NeighborWorks

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NeighborWorks America

• Neighborhood
• Stabilization
• Program

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Agenda

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

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• 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

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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

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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 lt50 AMI all housing to benefit lt
  120 AMI.

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NSP I Requirements (Cont.)

• No more than 10 for administration.
• Foreclosed properties must be purchased at a
  discount (min. 5 up to 15).

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NSP I Eligible Uses

1. Establish financing mechanisms for purchase and
   redevelopment of foreclosed homes.
2. Purchase and rehabilitate properties that have
   been abandoned or foreclosed upon.
3. Establish and operate land banks for homes and
   residential properties that have been foreclosed
   upon.
4. Demolish blighted structures.
5. Redevelop demolished or vacant properties.

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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.

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• NSP I Examples

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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

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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

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San Bernadino County, CA (Cont.)

• Target Population
• First-Time Homebuyers and
• Up to 120 of AMI and
• FHA creditworthy
• May be combined with the Countys NSP-funded
  rehab program if property needs repairs

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San Bernadino County, CA (Cont.)

• Downpayment Assistance
• Planned Production
• NSP Funds 2.5 million
• of Units 85
• NSP Funds/Unit 29,412/unit

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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

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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)

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Miami-Dade County, FL

• Purchase Rehab
• Planned Production
• NSP Funds 21.57 million
• Units 172
• NSP Funds/Unit 125,400

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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

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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

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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

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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.

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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

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Genesee County, MI

• Landbanking
• Planned Production
• NSP Funds 1,800,000 million
• Units 200
• NSP Funds/Unit 9,000

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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.

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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

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North Las Vegas Clark County, NV

• Housing Counseling
• Planned Production
• NSP Funds 525,000
• Units 200
• NSP Funds/Unit 100

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Paying for NSP Activities

• NSP grantees may fund sales costs, closing costs,
  reasonable developers fees related to housing
  rehab or new construction activities.
• HOWEVER
• NSP regs prohibit NSP-assisted housing to be sold
  at a profit.

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

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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

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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

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Changes Affecting NSP II Only

• Competitive Allocation Process (states, local
  govts, 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

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Changes Affecting NSP II Only (Cont.)

• NSP II Allocation Criteria
• Areas of Greatest Need
• Capacity to Execute Projects
• Leveraging Potential
• Others TBD by HUD

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Discussion