Neighborhood Stabilization Neighborhood Stabilization ProgramProgram

October 23, 2008

NeedNeed

ImpactImpact

LeveragingLeveraging

ReadinessReadiness

CapacityCapacity

Why We Are HereWhy We Are Here

•Meet new partnersMeet new partners

•Introduce ourselves and State Introduce ourselves and State CDBG programCDBG program

•Communicate NSP requirements Communicate NSP requirements and program optionsand program options

•Learn about local conditions and Learn about local conditions and existing local effortsexisting local efforts

Why We Are HereWhy We Are Here

• Identify stakeholders and tools Identify stakeholders and tools needed needed

for successfor success

• Identify stakeholders and tools in Identify stakeholders and tools in place or availableplace or available

• Identify tools DHCD, VHDA or Identify tools DHCD, VHDA or others can provideothers can provide

•Brainstorm IdeasBrainstorm Ideas–State allocation StrategyState allocation Strategy–PerformancePerformance–Neighborhood ImpactNeighborhood Impact–LeveragingLeveraging–Property acquisition Property acquisition strategiesstrategies

–Financing & facilitation Financing & facilitation targeted home ownershiptargeted home ownership

Virginia CDBG ProgramVirginia CDBG Program

•Denise AmbroseDenise Ambrose Associate DirectorAssociate Director (804) 371-7029(804) 371-7029

•Chris ThompsonChris ThompsonProgram Manager Project DevelopmentProgram Manager Project Development

(804) 371-7056(804) 371-7056

Virginia CDBG ProgramVirginia CDBG Program•Joanne PeermanJoanne Peerman Program Manager ImplementationProgram Manager Implementation (804) 371-7074(804) 371-7074

•Keith SherrillKeith Sherrill Policy Analyst Project DevelopmentPolicy Analyst Project Development (804) 371-7055(804) 371-7055

•Community RepresentativesCommunity RepresentativesMonica PooleMonica Poole

TBATBA

BackgroundBackground

• Authorized under Title III of the Housing and Authorized under Title III of the Housing and Economic Recovery Act of 2008Economic Recovery Act of 2008

• Targeted emergency assistance to state and Targeted emergency assistance to state and local governments local governments

• Acquire and redevelop foreclosed properties Acquire and redevelop foreclosed properties that might otherwise become sources of that might otherwise become sources of abandonment and blight within their abandonment and blight within their communities communities

FundingFunding

• $3.92 billion to all states and particularly hard-hit $3.92 billion to all states and particularly hard-hit areas areas

• Virginia - $38.7 millionVirginia - $38.7 million– Fairfax County - $2.8 millionFairfax County - $2.8 million– Prince William - $4.1 millionPrince William - $4.1 million

• Need is based on Need is based on number and percent of:number and percent of:– Home foreclosures in each State or unit of general local Home foreclosures in each State or unit of general local

governmentgovernment– Homes financed by a subprime mortgage related loan in each Homes financed by a subprime mortgage related loan in each

State or UGLGState or UGLG– Homes in default or delinquency in each State or UGLGHomes in default or delinquency in each State or UGLG

ActivitiesActivities

• Each activity must be CDBG eligible and meet a LMI national objectiveEach activity must be CDBG eligible and meet a LMI national objective

• Establish financing mechanisms for purchase and redevelopment of Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential propertiesforeclosed homes and residential properties

• Purchase and rehabilitate homes and residential properties Purchase and rehabilitate homes and residential properties abandoned or foreclosed; new housing construction is eligible as abandoned or foreclosed; new housing construction is eligible as redevelopmentredevelopment

• Establish land banks for foreclosed homesEstablish land banks for foreclosed homes

• Demolish blighted structuresDemolish blighted structures

• Redevelop demolished or vacant properties Redevelop demolished or vacant properties

EligibilityEligibility

• All funds be used to benefit individuals at or All funds be used to benefit individuals at or below 120% of area median incomebelow 120% of area median income

• At least 25% of the funds must be used for At least 25% of the funds must be used for individuals or families whose incomes do not individuals or families whose incomes do not exceed 50% of the area median incomeexceed 50% of the area median income

• Activities may not qualify using the "prevent or Activities may not qualify using the "prevent or eliminate slums and blight" or "address urgent eliminate slums and blight" or "address urgent community development needs" objectivescommunity development needs" objectives

DistributionDistribution

• Must target funds to give priority emphasis Must target funds to give priority emphasis and consideration to areas with greatest need and consideration to areas with greatest need including those:including those:– With the greatest percentage of home foreclosures;With the greatest percentage of home foreclosures;– With the highest percentage of homes financed by With the highest percentage of homes financed by

a subprime mortgage related loan; and a subprime mortgage related loan; and – Identified as likely to face a significant rise in the Identified as likely to face a significant rise in the

rate of home foreclosuresrate of home foreclosures

• 18 months to use NSP funds18 months to use NSP funds– Defined as being obligated for eligible activitiesDefined as being obligated for eligible activities– Funds must be expended within 4 yearsFunds must be expended within 4 years

Additional InformationAdditional Information

• http://www.hud.gov/nsphttp://www.hud.gov/nsp

Investment ApproachInvestment Approach

•Outcome FundingOutcome Funding

•Leveraging ResourcesLeveraging Resources

•Performance based contractsPerformance based contracts– Output based administrative & delivery Output based administrative & delivery

costscosts– Additional $$$$ for achievement of Additional $$$$ for achievement of

outcomesoutcomes

•Outcome oriented compliance Outcome oriented compliance monitoringmonitoring

Stakeholder InvolvementStakeholder Involvement

•Management teamManagement team – Everyone needed or affectedEveryone needed or affected

•Management PlanManagement Plan– Required contract documentRequired contract document

We need to knowWe need to know

•The areas of concentrated bank owned homes in your locality

•Status of your identification of ownership and the condition of affected properties

•Existing programs that you have in place or designed to address these properties

•Property acquisition strategy

We need to know: We need to know: •Banks or other partners that may provide

financing which can be leveraged with NSP funding. 

•Homeownership and special needs housing programs you operate, waiting lists for those programs, & plan to target to NSP areas.

•Program elements you see the need for assistance or collaborative involvement by DHCD, VHDA or state or national non-profit partners.

Options / Alternatives / Options / Alternatives / IssuesIssues

for DHCD to considerfor DHCD to consider•Eligible applicantsEligible applicants

•Prioritization of neighborhoods vis a vis Prioritization of neighborhoods vis a vis localities localities

•Percent of need met in neighborhoodsPercent of need met in neighborhoods

•Property acquisition strategiesProperty acquisition strategies

•Finding eligible ownership candidates Finding eligible ownership candidates interested in targeted propertiesinterested in targeted properties

•Rentals versus Owner occupiedRentals versus Owner occupied

Options / Alternatives / Options / Alternatives / Issues Issues

for DHCD to considerfor DHCD to consider•25% / 50% strategies25% / 50% strategies

•Role of non-profitsRole of non-profits

•Role of private for profitRole of private for profit

•Size of grantsSize of grants

•Planning grantsPlanning grants

•Pay for performancePay for performance

Options / Alternatives / Options / Alternatives / IssuesIssues

for DHCD to considerfor DHCD to consider•Measuring outcomesMeasuring outcomes

•Delivery costsDelivery costs

•Financing partnersFinancing partners

•Clearance activitiesClearance activities

• Infrastructure / Vacant lotsInfrastructure / Vacant lots

•Land banking criteriaLand banking criteria

Tentative Schedule - Tentative Schedule - DraftDraft

• Late November Program Design Late November Program Design WorkshopWorkshop

• December 1 Action plan to HUDDecember 1 Action plan to HUD

• Mid-January Mid-January RFP issuedRFP issued

• Late January Late January How to apply workshopHow to apply workshop

• March 1March 1 Proposals dueProposals due 11stst round NSP round NSP

ImplementationImplementation Planning grants (?)Planning grants (?)

Tentative Schedule - Tentative Schedule - DraftDraft• Early-AprilEarly-April Awards announcedAwards announced

• MayMay Contract negotiations Contract negotiations

and NSP contractsand NSP contracts

• JulyJuly Round 2 RFP issued (?)Round 2 RFP issued (?)

July 2010 July 2010

Performance window opensPerformance window opens

NeedNeed

ImpactImpact

LeveragingLeveraging

ReadinessReadiness

CapacityCapacity