Neighborhood Stabilization Program Round 2 - Consortia

Michelle Winters

LISC

Neighborhood Stabilization Program Background

NSP 1 established in Housing and Economic Recovery Act of 2008 $3.92 billion

NSP 2 established in the American Recovery and Reinvestment Act of 2009 $1.93 billion

Purpose is for purchase and rehabilitation of foreclosed and abandoned properties

Purpose is NOT foreclosure prevention Primarily targeted to families at 120% of AMI 25% of funds must be for families at 50% of AMI Long term affordability – at least HOME standards Discounted purchase price requirements

NSP Eligible Uses

New items for NSP 2 are underlined: Financing Mechanisms for purchase and

redevelopment of foreclosed homes and residential properties

Purchase, Rehab and Resale of abandoned or foreclosed homes and residential properties

Establish and Operate Land Banks for foreclosed homes and residential properties

Demolish Blighted Structures Redevelop demolished or vacant properties as

housing

Major Differences Between NSP1 and NSP2

NSP 1 NSP 2Allocation Formula Competition

Eligibility Governments Governments, Nonprofits, and Consortia, with for-profit partners

Timing of Use of Funds

All funds obligated within 18 months of the grant agreement

50% expended within 2 years of receipt, 100% within 3 years

Discount Requirements

15% average, 5% minimum

(soon to be updated to 1%)

Recently updated to 1% minimum

Geographic Targeting

Grantees may decide targeting Specific census tract criteria

Demolition No limit 10% limit; no public housing demolition

Green Rehab Recommended Required

NSP 2 NOFA Requirements

Minimum of $5 million and 100 homes Applicants must demonstrate capacity to

perform proposed activities 75 units of each type of proposed activity within

prior 24 months Geographic eligibility is deeply targeted

Average of 18 on a 1-20 needs scale

NSP 2 NOFA Priorities

Revitalize target neighborhoods and reconnect with the economy, market, social networks, and metropolitan region

Rapidly arrest neighborhood decline Assure deep targeting to 50% of AMI Longest feasible continued affordability Optimize economic activity and jobs Leverage resources or remove destabilizing

influences Set aggressive and achievable goals Ensure accountability and citizen input

NSP 2 NOFA Priorities, Cont.

Coordinate planning and resources with other Federal priorities: energy efficiency and conservation, sustainable and transit-oriented development, metro-wide planning and coordination, improve public education, improve access to healthcare.

Consortia Applications

Consortia may include both public and private nonprofit entities Governments, nonprofits, housing authorities Applicants cannot be lead for more than one application, or in

more than one application for a target geography Government entities or HUD manage environmental reviews

Must be a single lead applicant Execute grant agreement and assume responsibility on behalf of

consortium for compliance with all program requirements

Consortia must collectively have the capacity to carry out proposed activities Defined as having done 75 units of each proposed activity in past

24 months

Consortia Applications

Single Integrated Program Application must reflect an overall consortium program

design NOT a collection of disparate programs

Must propose a single program including: Proposed activities and timeline Continued affordability standards Community outreach Performance and monitoring Leveraging funds Green building and rehab standards

Consortia Applications

Points awarded in application for activities that are consistent with established comprehensive, regional, multi-jurisdiction plan such as: Transportation Sustainable development Economic revitalization Floodplain management

Proposed activities must relate to and increase effectiveness of established plan for maximum points

For-Profit Partners

Firm commitment required with application All for-profit partners must be identified in

application Requires a cost analysis and a separate

written agreement with each partner

Consortia – Two Stage Process

Consortium Agreement submitted with the application Signed by all members Members must cooperatively carry out program Authorizes lead entity Authorizes internal audit function

Consortium Funding Agreement submitted by December 1, 2009 Authorizes govt. members to carry out environmental reviews Lead member enters into separate agreement with each member

of consortium Describes members’ specific activities, timetables, and other

program responsibilities/compliance

Bottom Line

HUD is encouraging regional applications, but it must be a truly regional program rather than a collection of local programs

Many decisions must be made prior to application – July 17th

NSP 2 Process

Applications are Due July 17th

HUD will execute consortium funding agreements no later than December 1

HUD must obligate all funds to recipients by September 30, 2010

Recipients must expend 50% within 2 years Recipients must expend 100% within 3 years