State of Georgia Neighborhood Stabilization

Program

Goals

Areas of NSP Activity

Considerations: Already proposed general area(s) where you

will be working Program will mainly purchase REO Property Stay in HUD Risk Area of 8 or higher Purchase Worst first?

Areas of NSP Activity

Considerations: What is the difference between Neighborhood

Stabilization and Revitalization?

Will you work in a Redevelopment Area or a Tipping point area?

Areas of NSP Activity

Considerations: What can NSP do to increase marketability?

“Above and Beyond” RehabEnergy Star Compliant Internet WiredDesign improvement to fit in with neighborhood

Add porch if that feature is prevalent in the neighborhood Will you work in a Redevelopment Area or a Tipping point area?

Whatever is chosen, the Neighborhood Type impacts marketability!

Areas of NSP Activity

Considerations: Rehabilitate units to beyond “Safe and Decent” Unit must be marketable at the end of the day Make it the nicest house on the block – That is

true neighborhood Stabilization Work in area(s) where units will sell to people who

want to live there

Areas of NSP Activity

Considerations: Perform analysis of each area under consideration

Vacancy and Homeowner ratesTrends in sales activity and pricesProximity to anchors and amenitiesRecent public investment and/or planning

NSP Due Diligence

For EVERY acquisition:

Environmental and Historic Review Lead hazard evaluation for ALL pre-1978 Housing units

URA Notice of Voluntary Acquisition Appraisal by State certified appraiser Purchase discount at MINIMUM 15% of as-is appraised

value (including other sources of funds) Purchase price must be no more than average home

purchase price for jurisdiction.

NSP Due Diligence

All due diligence completed….. URA notices provided Agreement to purchase made Sale completed

NOW WHAT???

Disposition

RehabilitationFull work write-up by qualified rehab advisorFully vetted contractor pool in placeCompetitive bidding for workAward contract – oversee workProgress payments – Final Inspection/payment

Home ready for sale

DispositionSetting Sale Price

to Owner as Primary Residence

Cost of Acquisition +Cost of Rehabilitation +“Reasonable” developer fee

= Maximum Sale Price

Maintenance of unit until sold is NSP eligible, but can’t be considered in setting price

DispositionSetting Sale Price

to Owner as Primary Residence

Closing must include documents to ensure affordability as appropriate to amount of NSP funds provided to unit

See NSP Recipient Manual for affordability provision

Requirements.

DispositionSetting Sale Price

to Owner as primary residence

Sale of Unit generates Program Income:

CDBG Regulations @ 24 CFR Part 570.500   

“(a) Program income means gross income received by the recipient or a subrecipient directly generated from the use of CDBG funds…”

Questions?

Georgia Department of Community Affairs

Neighborhood Stabilization Program

http://www.dca.ga.gov/communities/CDBG/programs/nsp.asp