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NeighborWorks ® America Neighborhood Stabilization Program.

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Presentation on theme: "NeighborWorks ® America Neighborhood Stabilization Program."— Presentation transcript:

1 NeighborWorks ® America Neighborhood Stabilization Program

2 Agenda Overview of the Neighborhood Stabilization Program I (NSP I) NSP I Examples Summary of Neighborhood Stabilization Program II (NSP II) Discussion

3 NSP I Created by the Housing and Economic Recovery Act (HERA) of 2008 $3.92 billion in one-time grants to states, cities and counties (nonprofits not eligible) Needs-based formula allocation Based on Community Development Block Grant (CDBG) program: HUD administers it

4 NSP II Additional $2 billion allocated in the American Reinvestment and Recovery Act (ARRA) of 2009 Will be a competitive application process Nonprofits can apply HUD to release guidelines in May

5 NSP I Requirements Intent is to help stabilize neighborhoods affected by foreclosure. Jurisdictions had to target funds to “areas of greatest need”. Minimum of 25% of funds must be used to create housing for <50% AMI; all housing to benefit < 120% AMI.

6 NSP I Requirements (Cont.) No more than 10% for administration. Foreclosed properties must be purchased at a discount (min. 5% up to 15%).

7 NSP I Eligible Uses A. Establish financing mechanisms for purchase and redevelopment of foreclosed homes. B. Purchase and rehabilitate properties that have been abandoned or foreclosed upon. C. Establish and operate land banks for homes and residential properties that have been foreclosed upon. D. Demolish blighted structures. E. Redevelop demolished or vacant properties.

8 NSP I Timeline Jurisdictions filed final Action Plans in February, 2009. HUD approvals followed later in February. Jurisdictions have 18 months after HUD approval to obligate funds. Funds not obligated w/in 18 months may be recaptured and re-allocated by HUD.

9 NSP I Examples

10 Caveats Jurisdictions have just started to implement their programs Few results available yet Consider these “emerging practices” All these jurisdictions have other NSP programs besides those featured here

11 NSP I- Example 1  San Bernadino County, CA Financing Mechanism: Purpose- “rapid re-occupancy” To help first-time homebuyers quickly purchase and occupy foreclosed single family homes before vandalism and blight become acute. 0% Downpayment: 3.5-5% of purchase price

12 San Bernadino County, CA (Cont.) Target Population o First-Time Homebuyers; and o Up to 120% of AMI; and o FHA creditworthy May be combined with the County’s NSP-funded rehab program if property needs repairs

13 San Bernadino County, CA (Cont.) Downpayment Assistance Planned Production NSP Funds: $2.5 million # of Units: 85 NSP Funds/Unit: $29,412/unit

14 NSP I: Example 2  Miami-Dade County, FL Purchase & Rehabilitation: Purpose- “multi-family housing” To purchase & rehab multi-family properties for continued use as rental property. Units to be purchased by the County; a partner entitlement city; or nonprofit or forprofit developers under contract with the County

15 Miami-Dade County, FL The County will conduct property appraisals, & negotiate discounted purchase prices 30 year affordability restrictions Targeted to neighborhoods in top two priority areas (identified by “areas of greatest need” analysis)

16 Miami-Dade County, FL Purchase & Rehab Planned Production NSP Funds:$21.57 million # Units: 172 NSP Funds/Unit:$125,400

17 NSP I- Example 3  Tampa, FL Redevelopment Purpose- “new construction on cleared lots” To create new housing on lots cleared by NSP funds that Tampa allocated to demolition of foreclosed properties 0% deferred payment loan

18 Tampa, FL Up to 40 lots will be cleared Cleared lots may be landbanked up to 10 years Lots will be cleared in a handful of target neighborhoods Tampa will issue RFQs to identify Housing Partners to help with redevelopment RFQ will make creation of an “interdisciplinary team” a competitive criterion in the RFQ

19 Tampa, FL Redevelopment Planned Production NSP Funds:$25.41 million # Units: N/A* NSP Funds/Unit: N/A* *SF or MF units to be constructed on up to 40 cleared lots

20 NSP I Example # 4  Genesee County, MI Landbanking Purpose- To demolish blighted structures that are already owned by the Genesee County Land Bank Authority. Vacant lots may be held or redeveloped as housing.

21 Genesee County, MI Planning Commission staff, &local inspectors & assessors will help identify properties Genesee County will subcontract to the Genesee County Land Bank Authority to oversee demolition The County will work with banks and FHA to acquire properties, help clear titles, etc. Leverage from TIFs; Genesee County downpayment assistance; private resources

22 Genesee County, MI Landbanking Planned Production NSP Funds:$1,800,000 million # Units: 200 NSP Funds/Unit:$9,000

23 NSP I Example #5 North Las Vegas & Clark County, NV Housing Counseling Purpose- HBE for households up to 120% of AMI seeking to purchase NSP- assisted housing. HUD approved counseling agencies only.

24 North Las Vegas & Clark County, NV An RFP process will be used to allocate funds Minimum of 8 hours counseling required Assumes 10 households will be counseled for every 1 that proceeds to purchase Target areas include very distressed census tracts where significant public investment has already occurred, with more planned. Leverage includes $93 million in MRB funding set aside by the state housing finance agency

25 North Las Vegas & Clark County, NV Housing Counseling Planned Production NSP Funds:$525,000 # Units: 200 NSP Funds/Unit:$100

26 Paying for NSP Activities NSP grantees may fund sales costs, closing costs, & reasonable developer’s fees related to housing rehab or new construction activities. HOWEVER NSP regs prohibit NSP-assisted housing to be sold at a profit.

27 Accurately analyze development costs so they can be reimbursed as fees. (Work this out with NSP jurisdiction)

28 NSP II Created by the American Recovery & Reinvestment Act (ARRA), February 2009 $2 billion in funding for NSP Some changes are retroactive to NSP I Others apply only to NSP II Stay tuned for more details from HUD

29 Changes Affecting both NSP I & II Elimination of the Program Income Section Expansion of the Land Banking Eligible Use Redevelopment will be Restricted to Housing Only- no non-residential uses NSP Grantees may not Refuse to Lease to Section 8 Recipients Additional Tenant Protections for those with Leases Signed Before Foreclosure

30 Changes Affecting NSP II Only Competitive Allocation Process (states, local gov’ts, nonprofits) Up to $200 million for Capacity Building Expenditure Timeline: Grantees must spend 50% of allocated funds w/in 2 yrs.; 100% w/in 3 yrs. No NSP Funds may Demolish Public Housing 10% Cap on Demolition

31 Changes Affecting NSP II Only (Cont.)  NSP II Allocation Criteria: 1.Areas of Greatest Need 2.Capacity to Execute Projects 3.Leveraging Potential 4.Others TBD by HUD

32 Discussion

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