Presentation on theme: "Georgia Department of Community Affairs Mike Beatty, Commissioner www.dca.ga.gov."— Presentation transcript:
Georgia Department of Community Affairs Mike Beatty, Commissioner www.dca.ga.gov
State of Georgia Neighborhood Stabilization Program Recipient Workshop April 14, 2009
State of Georgia Neighborhood Stabilization Program Federal NSP Funds Awarded March 6, 2009 18 Month Obligation “Clock” Expires September 5, 2010
NSP Eligible Activities Eligible UseEligible Activities A. Financing Mechanisms for the purchase & redevelopment of foreclosed upon homes and residential properties As an activity delivery cost for an eligible activity (designing & setting it up) Financing of an NSP eligible activity, to carry out that activity, is eligible as part of that activity
Relevant Definition: Foreclosed upon. A property “has been foreclosed upon” at the point that, under state or local law, the mortgage or tax foreclosure is complete. HUD generally will not consider a foreclosure to be complete until after the title for the property has been transferred from the former homeowner under some type of foreclosure proceeding or transfer in lieu of foreclosure, in accordance with state or local law.
Eligible Activities Eligible UseEligible Activities B. Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties Acquisition Disposition Relocation Direct homeownership assistance Eligible rehabilitation and preservation activities for homes and other residential properties Housing counseling for those seeking to take part in the activity
Relevant Definitions: Abandoned. A home is abandoned when mortgage or tax foreclosure proceedings have been initiated for that property, no mortgage or tax payments have been made by the property owner for at least 90 days, AND the property has been vacant for at least 90 days.
Eligible Activities Eligible UseEligible Activities C. Establish land banks for homes that have been foreclosed upon Acquisition/temporary management Disposition (includes maintenance)
Eligible Activities Eligible UseEligible Activities D. Demolish blighted structuresClearance, for blighted structures only NOTE: Acquisition is NOT eligible under this category
Eligible Activities Eligible UseEligible Activities E. Redevelop demolished or vacant properties Acquisition Disposition Public facilities and improvements Housing Counseling (limited to purchasers or tenants of redeveloped properties) Relocation New housing construction Direct homeownership assistance 570.204 activities by Community Based Development Organizations
Eligible Activities Eligible UseEligible Activities E. Redevelop demolished or vacant properties Notes Under this category: properties do not have to be abandoned or foreclosed Any property type is allowed (not limited to residential) Must be vacant or demolished Rehab of housing units under this category NOT allowed – rehab of PF OK New Construction IS allowed
Ineligible Activities Foreclosure Prevention Demolition of non-blighted structures
Meeting the “25% Rule” Relevant Definitions: HERA (Section 2301(f)(3)(A)(ii) states: "not less than 25 percent of the funds appropriated or otherwise made available under NSP shall be used for the purchase and redevelopment of abandoned or foreclosed upon homes or residential properties that will be used to house individuals or families whose incomes do not exceed 50 percent of area median income".
Meeting the “25% Rule” Relevant Definitions: What is “ Housing?” CDBG Definition of Housing prevails CDBG Statute defines these as Public Facilities: Shelters Convalescent homes Nursing Homes Battered Spouse Shelters
Meeting the “25% Rule” Relevant Definitions: CDBG Statute defines these as Public Facilities: Halfway Houses Group homes for persons with mental retardation Temporary housing for disaster victims
Meeting the “25% Rule” Relevant Definitions: Project types listed are not housing, however, Can be undertaken under NSP Activity E DO NOT COUNT toward the “25% Rule” regardless of NSP eligibility category Awaiting HUD clarification on policy for other types of housing transitional with affordable rents & lease Other type group homes with rent and lease
Meeting the “25% Rule” ActivityDoes it count toward 25%? A. Financing Mechanisms Yes-if “Housing” & Occupant meets <50% AMI requirement B. Purchase and rehabilitate homes … Yes-if “Housing” & Occupant meets <50% AMI requirement C. Land Banks No – unless land bank is operated as permanent rental housing for <50% AMI D. Demolition Not as a stand alone activity Yes - if combined with acquisition and redevelopment of foreclosed/abandoned units E. Redevelopment ONLY if property was abandoned or foreclosed and units are “Housing” & Occupant meets <50% AMI requirement
Use NSP to demolish a vacant blighted school and build new rental units for very low income tenants? Is it Eligible? Does it Count? Is it Eligible? Does it Count?
Use NSP to purchase REO property and rehab then provide down-payment and/or soft second mortgage assistance to sell to households <50% AMI? Is it Eligible? Does it Count? Is it Eligible? Does it Count?
Use NSP to acquire dilapidated buildings and demolish in order to remove blighting influence on neighborhood? Is it Eligible? Does it Count? Is it Eligible? Does it Count?
Project Delivery Costs (PDC’s) Allowable performance based fees for NSP Activities – Single Family (1- 4 units) ActivityPDC Acquisition$4000 Rehabilitation/Reconstruction/ New Construction 10% Rehab Cost not to exceed $3000 Down payment Assistance (incl. provision of counseling) $2000 Disposition (Sale)$4000 Demolition$1000 Maximum per unit$14000
Project Delivery Costs Do not include activity based items that are paid out of the activity budget Legal fees Appraisals Closing costs Surveys Etc.