Transcript Neighborhood Stabilization Program (NSP)

Application Workshop for
NSP-1, NSP-2 and NSP-4.
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 Neighborhood
Stabilization Program (NSP)
 Enacted
under Title III of Division B of the
Housing and Economic Recovery Act of
2008 (HERA).
 Created
for the purpose of assisting in the
redevelopment of abandoned and
foreclosed homes under the heading of
Emergency Assistance for Redevelopment
of Abandoned and Foreclosed Homes.
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 NSP
Resources
 www.rivcoeda.org
 >Departments
 >Housing
 >Neighborhood Stabilization Programs
 >NSP Resources link
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 Tier
1.
 Tier
2.
 Tier
3.
 Tier
4.
4
 Tier
1.
• Foreclosed vacant single-family properties in need
of modest to substantial rehabilitation and marketed
for resale to LMMI First-Time Homebuyers. (NSP-1)
 Tier
2.
• Same as Tier 1, but marketed for rent with
preference to Special Needs Households Permanent Supportive Housing (not for shelters and
transitional housing) for households with incomes at
or below 50% AMI. (NSP-2)
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 Tier
3.
• Foreclosed vacant single-family properties in
need of relatively minor repairs. Ideal for firsttime homebuyers. Neighborhood Stabilization
Homeownership Program. (NSHP or NSP-3)
 Tier
4.
• Foreclosed vacant multi-family properties in
need of rehabilitation or completion of
construction for rent to households with incomes
at or below 50% AMI. (NSP-4)
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 Step
#1
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 Link
to Target Area Maps
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 Download
and pinpoint location
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 Print
out and indicate location.
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 Zoom
In to identify streets.
 Print “Current View”.
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NSP-1 and NSP-2.
Public and private non-profit organizations
NSP-4.
Public and private non-profit and for-profit organizations
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Experience and competency in all tasks
Financial capacity and working capital
5 years of housing experience
Professional development experience
Able to obtain sufficient financing
Non-profits may apply with a locality, Public Housing
Authority (PHA) or Community Redevelopment Agency
(CRA) as a Joint Applicant with jurisdiction over the
areas in which the Target Areas are located.
PHA’s may apply on behalf of cities with TAs.
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
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Teams of entities must demonstrate as a group the
capacity to perform all the necessary services.
One entity is to be designated as the Lead Entity.
Non-profit organizations may partner with a for-profit
organization, but the non-profit organization must be
the Lead Entity.
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
The Lead Entity must:
 Hold title to the property between acquisition and sale;
 Enter into an agreement with the County;
 Enter into letters of agreement, memorandums of
understanding, or similar agreements with the other
entities in the team in order to provide the needed
services for the program;
 Perform all rehabilitation work pursuant to the County’s
requirements;
 Receive and be responsible for all funds under the
program; and
 Take responsibility for all required compliance and
reporting.
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• NSP-1. No, a partial list is sufficient.
• Submit a revised list with changes and/or
additions at Stage Two.
• All properties must meet eligibility
requirements.
• NSP-2 and NSP-4.
Yes, the project site must be identified.
• All properties must meet eligibility
requirements.
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 The
purchase price limit cannot exceed
the actual 95 percent of the area median
sales price for Riverside County or FHA
203(b) limit, whichever is lower, as
published by HUD.
 As
of March 17, 2009, the maximum
program purchase price for the property
limit should not exceed $292,686.
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


(NSP-1 and NSP-2) Any single-family home, condominium or
town home
(NSP-4) Multi-family property
Properties must meet all of the following minimum criteria:
 Foreclosed or abandoned and bank-owned or REO.
 Currently vacant for a period of at least 90 days prior to
application initial offer. *URA relocation and displacement
requirements apply.
 Constructed post-1978 and must not be listed on, or eligible
for listing on, the National Register of Historic Places.
 Assessed in accordance with the provisions of the National
Environmental Policy Act of 1969 (NEPA).
 Single-Family homes with in-ground pools or spas are eligible
for acquisition.
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• Loan Committee Review (1 week)
• Pre-Approval Letter
• SHPO (30 days)
• Initial Notice & Offer
• NEPA Review – Environmental
•
•
•
•
•
•
(Open Escrow, PTR)
Appraisal (15 days or more)
Final Notice (negotiation required?)
Final Offer (PTR, PSA, escrow
instructions)
Prepare Loan Agreement
Board Approval of Loan Agreement
Close Escrow
Assessment
• Public Noticing for FONSI/NOI-RROF
(15 days)
• Board Approval of FONSI/RROF
• Request for Release of Funds from
HUD (15 days)
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•
•
•
•
•
Loan Committee Review (1 week)
Loan Agreement (NSP Allocation)
Board Approval of Loan Agreement (2 to 3 weeks)
Property submission/re-submission
Eligibility and NEPA Review (SHPO 30 days starts)
 Categorical Exclusion pending answers to questionnaire.
 Converts to Exempt if no impacts.
 No public noticing, No FONSI, No RROF, No amend OYAP.
•
•
•
•
•
•
Initial Notice & Offer (Open Escrow)
Appraisal (10 days)
Final Notice (Re-negotiation required?)
Final Offer (PTR, PSA, & Escrow Instructions)
SHPO cleared? If so, EXEMPT.
Close Escrow
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 Stage
One – Applicant and Project Identification
 Stage
Two – Acquisition Initial Notice and Offer
 Stage
Three – Acquisition Final Notice and Offer
 Stage
Four – Rehabilitation or Construction
 Stage
Five
• NSP-1. Resale to First-Time Homebuyer
• NSP-2 and NSP-4. Rental of Affordable Units.
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 Application
• Applicant Information
• Development Team
• Project Summary
• Location Maps and Photographs
• Project Timeline
• Rehabilitation Plan
• Marketing Strategy
• Certification, Disclosure Questionnaire
• Letter of Support from the City*
• Initial Project Budget
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
Letter of Pre-Approval
• Conditionally approves funding amount subject to
meeting NSP requirements.
• EDA reserves the right to reject any or all proposals, in
whole or in part.
• As the funding is time-sensitive, EDA reserves the right to
re-allocate any returned funds, unobligated or unused
funds during the project and set funds aside for
performance based developers.

Loan Agreement
• Funding disbursements will be contingent upon meeting
all NSP requirements including Environmental Review.
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 NSP
Assistance will be in the form of zero
percent (0%) interest loans.
 Loan Term:
• NSP-1 and NSP-2: Fifteen (15) months.
• NSP-4: Fifty-five (55) years.
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 NSP-1:
• 15 yrs from the close of escrow
 NSP-2:
• 55 yrs from the certificate of occupancy
 NSP-4:
• 55 yrs from the certificate of occupancy
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 Appraisals
 Preliminary
title reports
 Acquisition costs
 Rehabilitation costs
 Demolition
 Reasonable sales commission
 Customary closing costs
 Homebuyer education
 Reasonable developer fee
 Carrying and delivery costs
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 Ineligible
under CDBG is ineligible
under NSP.
 Administration and Operating costs.
 Foreclosure Prevention.
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EDA will pay for appraisal costs as follows:
 If the property’s purchase price does not meet
the minimum 15% discount below the CMAV,
then EDA will only pay up to $1,500 per
property*, a maximum $15,000 per Applicant,
of which will be paid by EDA. Beyond that
amount, the Sub-recipient must pay for the
cost of subsequent appraisals.
 If the property’s purchase price does meet or
exceed the minimum 15% discount below the
CMAV, then the cost of appraisal will be paid
from the closing costs budget for the project.
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 $100k
for Acquisition
 $200k for Rehabilitation
 Market Value
$150k
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 The
Sub-recipient is required to sell
each home to a Qualified Homebuyer
and repay EDA with the proceeds from
the sale.
 The
Resale Price of each property shall
not exceed the lesser of
• (a) the fair market value; or
• (b) the total costs to acquire, rehabilitate and
dispose the property per NSP regulations.
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
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Upon transfer of ownership to the Qualified
Homebuyer, the amount of the Homebuyer Loan
minus closing costs will be returned to EDA.
If necessary, a trust deed shall be recorded to
secure the second mortgage loan
Repayment is required if the property is no longer
the principal residence or the property is sold prior
to the expiration of the affordability period.
NSP-3 assistance, or NHSP, cannot be used for firsttime homebuyer assistance.
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 Each
Qualified Homebuyer will obtain a
loan for up to the Resale Price (the
“Homebuyer Loan”).
 If
the Homebuyer Loan is less than the
Resale Price, then the Qualified
Homebuyer will receive the difference as a
“Silent Second Mortgage” from EDA.
 The
Silent Second Mortgage is limited to
30% of the resale price and capped for a
maximum amount of $75,000.
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
Application Revisions or Submission of New Properties
• Changes, deletions and/or additions to the list of properties.
• Must meet eligibility requirements
• Bulk purchases must identify purchase prices for each
property.
• Revised Project Budget. The BOS approved NSP funding
allocation cannot be exceeded.
• Changes to the Project Timeline, Rehabilitation Plan and/or
Marketing Plan.

Completion of Environmental Review Questionnaire.

Property Eligibility Review

Initial Notice and Offer

Current Market Appraised Value
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1.
2.
3.
4.
5.
6.
Voluntary Acquisition of Foreclosed Property
Initial Notice – acknowledged & signed
Initial Offer – the initial purchase price
Appraisal
Final Notice – negotiation required?
Final Offer
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 Final
Notice and Offer
 Closing
 Final
of Escrow
Budget
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 Reimbursement
of rehabilitation costs is
paid as costs are incurred.
 Status
 Final
Reports
Budget
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 Market
property. Marketing and outreach.
 Homebuyer qualifications for approval.
 Obtain homebuyer loan commitment.
 Sell property and close escrow.
 Return balance of funds to EDA.
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 Market
property. Provide evidence of
marketing and outreach.
 Sub-recipient must submit tenant
qualifications for EDA approval.
Tenant Checklist.
 Obtain tenant lease commitment.
 Return balance of funds to EDA.
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 EDA
will determine whether returned funds
will be lent back to Sub-recipient for
additional purchases. EDA has full
discretion of funding to allocate.
 As
the funding is time-sensitive, EDA
reserves the right to re-allocate any
returned funds, un-obligated or unused
funds during project implementation and
set funds aside for performance based
developers.
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