7. HRSR 06-07-2010Item # 7
I ~,1_
.K~.ver
MEMORANDUM
TO: Housing & Redevelopment Authority
FROM: Annie Deckert, Economic Development Assistant
DATE: June 7, 2010
SUBJECT: Update on Neighborhood Stabilization Program (NSP)
As of May 27, 2010, all NSP funds have been obligated; there are four remaining down
payment assistance applications that axe set to close the month of June.
NSP de-obligation of funds
On March 9, 2010, staff was notified that after much review and consideration Minnesota
Housing Finance Agency (MHFA) recommend the City of Elk River for deobligation at its
March Board meeting. MHFA is required by statute to obligate 100% of its Neighborhood
Stabilization Program grant by September 20, 2010, 18 months from the program's
inception. The deobligation of funds, although an unpleasant and unfortunate process, is
necessary to ensure all program funds are committed prior to the September deadline, and
therefore utilized in the state of Minnesota. The money will be reallocated to other
entitlement communities who have a greater need fox the money.
Total Elk River NSP Activities Funded
• Eleven down payment assistance applications ($5,000-$15,000 per application)
through down payment assistance initiative
o Two of the applicants receiving $5,000 in NSP money also received an
additional $10,000 each in down payment assistance from the Greater MN
Housing Foundation (GMHF) and one received $15,000 based on income
eligibility.
o Five homes in Elk River Station, five in Trott Brook and one in Heritage
Landing
• One home acquired through acquisition/rehabilitation initiative
o Sale of home closed on February 26, 2010; home buyer received $14,999 in
NSP funding for down payment assistance
• Zero purchase rehabilitation applications
N:\Departments\Community Development\Economic
Development\Housing\Foreclosure\NSP\Memos\6.7. l O.doc
Summary
The Neighborhood Stabilization Program provided emergency assistance to states and local
governrnents to target areas within communities with a high concentration of foreclosures,
high percentage of homes financed by subprime mortgage and areas identified as likely to
face a significant rise in the rate of foreclosures. Because of this program, the Elk River
HRA was able to obligate $168,370.52 in funding and assist eleven homebuyers in the
purchase of a home they may not be able to otherwise afford, and acquire and redevelop a
property that may have not otherwise have sold without the funding. Implementing this
program allowed the HRA to assist in stabilizing three neighborhoods throughout the
community with a high concentration of foreclosures as well as placed people into these
vacant homes; providing investment into the housing community.
Next steps
Staff continues to receive foreclosure data and will continue to promote new and existing
foreclosure resources and housing financial programs to the community.
N:\Departments\Community Development\Economic
Development\Housing\Foreclosure\N SP\Memos\6.7.10. doc