NEIGHBORHOOD STABILIZATION PROGRAM

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NEIGHBORHOOD STABILIZATION PROGRAM

• A Component of HUDs Community Development
• Block Grant (CDBG) Program
• Pima County Draft Plan
• Pima County Housing Commission
• November 17, 2008

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Neighborhood Stabilization

• Authorized by Housing and Economic Recovery Act
  of 2008 (HERA)
• Funding Level 3.92 Billion
• Grants to states and local governments
• HERA specifies formula distribution, eligible
  uses, targeting requirements
• HUD used Notice approach to implementation

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Neighborhood Stabilization

• The time line
• HUD established formula and regulatory framework
  on Sept. 29
• Application is substantial amendment to existing
  annual CPD action plan
• HUD TA meeting in LA on Oct. 10
• Plans must be prepared for presentation to Mayor
  and Council and Board of Supervisors by early
  November
• 15 day public comment period starts on Nov 15.
• Grantees to submit amendment not later than
  December 1, 2008
• Funds must be committed within 18 months of
  approval by HUD and spent within 4 years

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Neighborhood Stabilization

• HERA directs that funds be treated as CDBG funds
  except
• As modified by HERA
• HUD may specify alternatives to CDBG requirements
  solely to expedite use of funds
• HUD may not alter fair housing,
  nondiscrimination, labor relations and
  environment.

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Neighborhood Stabilization

• Formula is based on number and percent by state
  and local government for
• Foreclosures
• Subprime loans
• Delinquencies
• Reallocation provision Failure to apply,
  unacceptable application, or poor performance

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Neighborhood Stabilization

• HERA imposes alternative low-mod benefit
  requirements
• All funds must benefit individuals at or below
  120 of area median income (AMI)
• 25 of all funds must be used to benefit
  individuals at or below 50 of AMI

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Tucson/Pima County Income limits for NSP
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Tucson - Pima County 50 rents
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Neighborhood Stabilization

• Not all regular CDBG entitlements received NSP
  funds
• Unfunded entitlements to access NSP funds through
  states
• States may award NSP funds to entitlements
  receiving own NSP grant
• States authorized to directly implement activities

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NSP allocations - AZ
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Neighborhood Stabilization

• Eligible uses 5 specified by HERA
• Financing mechanisms
• Acquisition and rehabilitation
• Land banking
• Demolition
• Redevelopment
• 10 for grantee administrative costs

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Neighborhood Stabilization

• Homes acquired or redeveloped for use as primary
  residence must be sold at or below total cost of
  activities
• All properties to be purchased at discount to
  current market appraised value
• HERA establishes alternative program income
  requirements for grantees 120 ami
• Goal is to invest NSP funds to stabilize
  neighborhoods.
• Housing counseling is required for Homebuyer
  activities

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Public Comments

• City of Tucson http//www.tucsonaz.gov/csd/
• Whats new
• Pima County
• http//www.pima.gov/CED/Data/NSP.htm
• ADOH
• http//azcms.housingaz.com/azcms/uploads/NSP/NSP_
• Action_Plan_DRAFT_for_Website_11.10.08.pdf
• Plans that are being submitted to HUD follow our
  current understanding and interpretation of the
  Notice.

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Targeting NSP Funds

• Hera Requires Targeting Based upon
• Foreclosures
• Subprime loans
• Delinquencies
• Risk scores mapped according to HUD data
• 0 - Lowest Risk Red
• 10 Highest Risk Green
• Scores based upon
• Decline in home values in metro area (OFHEO)
• HMDA high cost loan rates
• US Dept of Labor unemployment rates
• Predicted foreclosures in next 18 months (MBA
  info)
• USPS vacancy rates
• Maps of Foreclosure Notices based on Pima County
  Recorders Office lists

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Proposed uses of NPS funds
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Pima County Proposal

• Purchase of foreclosed properties 2 million
• 20 homes to be used for rental and or resale to
  qualified buyers targeted principally in
  Cardinal/Valencia area in conjunction with
  Southern Arizona Land Trust (SALT)
• Land Banking, Demolition of Blighted structures
  and Redevelopment 750,000
• South Tucson, Ajo and Flowing Wells - Pima County
  CDBG Target Areas. International Sonoran Desert
  Alliance and Primavera Foundation.
• Administration - 300,000

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Notes

• Considered to be a high risk program by
  OIG/HUD compliance is critical
• HUD recommends using existing program framework
  for implementation
• HUD places emphasis on how funds are to be
  targeted use of maps.

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Neighborhood Stabilization

• HUD encourages grantees to allocate funds in the
  context of a comprehensive plan for the
  communitys vision of how it can make its
  neighborhoods not only more stable, but also more
  sustainable, competitive and integrated into the
  overall metropolitan fabric, including access to
  transit, affordable housing, employers and
  services