Transcript NSP Elig Activities

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 Use
A. Financing Mechanisms for
the purchase & redevelopment
of foreclosed upon homes and
residential properties
Eligible Activities
• 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 Use
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
Eligible Activities
• 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 Use
C. Establish land banks for
homes that have been
foreclosed upon
Eligible Activities
• Acquisition/temporary
management
• Disposition (includes
maintenance)
Eligible Activities
Eligible Use
D. Demolish blighted structures
Eligible Activities
•Clearance, for blighted
structures only
NOTE: Acquisition is NOT
eligible under this category
Eligible Activities
Eligible Use
E. Redevelop
demolished or
vacant properties
Eligible Activities
• 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 Use
E. Redevelop
demolished or
vacant properties
Eligible Activities
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”
Activity
Does 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
QUIZ
TIME
Is it Eligible? Does it Count?
• 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?
Project Delivery Costs (PDC’s)
Allowable performance based fees for NSP
Activities – Single Family (1- 4 units)
Activity
PDC
Acquisition
$4000
Rehabilitation/Reconstruction/ 10% Rehab Cost not to
New Construction
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.
Questions?