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 1NSP 2 AllocationFormulaCompetition EligibilityGovernmentsGovernments, 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 targetingSpecific census tract criteria DemolitionNo limit10% limit; no public housing demolition Green RehabRecommendedRequired

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 17 th 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