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5. HRSR 03-02-2009Item # 5 t~ve r MEMORANDUM TO: Housing & Redevelopment Authority FROM: Catherine Mehelich. Director of Economic Development DATE: March 2, 2009 SUBJECT: Update on Neighborhood Stabilization Program Application Attachment • Neighborhood Stabilization Program (NSP) Background At its January 26, 2009 special meeting the HRA authorized submittal of an application to MN Housing Finance Agency for Neighborhood Stabilization Program (Foreclosure Recovery) Funds in the amount of $593,820. The HRA's application includes the following proposed program initiatives: Downpayment assistance Purchase & Rehabilitation of abandoned/foreclosed homes (buyer-driven) Purchase & Rehabilitation of abandoned/foreclosed homes (entity-driven) Update The completed application was submitted to MHFA on January 28, 2009. The MHFA Board is expected to meet February 26, 2009 to approve applicants, with formal announcement of awardees the next day. Therefore, staff will provide a verbal update on the status of the HRA's application at the HRA meeting. Next Steps Following application award, the next steps would include executing NSP funding agreements, initiate federal requirements such as environmental review, and developing the formal program implementation documents with Tri-CAP Agency. Staff anticipates implementing the program Spring 2009. Neighborhood Stabilization Program (NSP) Neighborhood Stabilization Program (NSP) The U.S. Department of Housing and Urban Development's new Neighborhood Stabilization Program (NSP) provides targeted emergency assistance to states and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight, Minnesota Housing is the grantee for the state in the amount of $38.8 million. Minnesota Housing's Funding Applications are due January 28, 2009. Eligible Applicants Local units of government experienced in administering CDBG funding are eligible applicants. Local units of government include cities, HRAs, EDAs, CDAs, PHAs and counties. Only local units of government operating in the zip codes ar counties identified as areas of greatest need may apply for funds. For cities within NSP entitlement counties (Anoka, Dakota, and Hennepin, with the exception of the city of Minneapolis), the entitlement county is the eligible applicant. For local units of government within the NSP entitlement cities (Minneapolis and St. Paul), the entitlement city is the eligible applicant. Local units of government who have contracted with other entities to administer CDBG funds and do not have direct experience administering CDBG funds must contract with an experienced CDBG administrator to administer the NSP funds. Minnesota Housing will sub grant NSP funds to eligible applicants. The sub grantees may accept applications to undertake eligible activities and/or may directly undertake eligible activities. Sub grantees are encouraged to work with experienced housing developers and property management companies and other local units of government in developing their application for state NSP funds. Minnesota Housing anticipates sub granting NSP funds to eligible local units of government. Minnesota Housing collaborating partners in the NSP program are the Department of Employment and Economic Development, Metropolitan Council, Department of Commerce, Family Housing Fund, and the Greater Minnesota Housing Fund. Areas of Greatest Need Minnesota Housing has targeted funds to give priority emphasis and consideration to areas with greatest need identified through a funding formula: • Areas with the greatest percentage of home foreclosures; • Areas with the highest percentage of homes financed by a subprime mortgage related loan; and • Areas, identified as likely to face a significant rise in the rate of home foreclosures. NSP Fund Uses • Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties • Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed, in order to sell, rent, or redevelop Page 1 of 3 http://www.mnhousing.gov/resources/apply/MHFA_007433.aspx?print=true 2/24/2009 Neighborhood Stabilization Program (NSP) • Establish land banks for homes that have been foreclosed + Demolish blighted structures • Redevelop demolished or vacant properties Ineligible Activities • Generally, if an activity is ineligible under CDBG, it is ineligible under NSP • Foreclosure prevention • Demolition of non-blighted structures Purchase of properties not abandoned or foreclosed upon • Redevelopment for commercial purposes Action Plan F " .' NSF {Zf708 Sut35tanti~l_Amertdn~ent)_Rction Plan -revised January 12, 2009 ' {2008 Substantial Amendment.) Action Plp_n !' ~ .,erice °__ >ata _Notice of Pubiic_Nearin and Draft Availability -September 26, 2008 Program Information N5P Timeline Minnesota H_o. using.._F.AQs -revised January 23, 2009 Nc'i-~i~;: , •s Archive ~" , ~` '?utreach 1 C~verviev~ _Powerpoint -October 17, 2008 ;;~ ' ~ ,~u Housing Technical Assist,ar7ce_ - (Training opportunities) NSP Award Announcements -Available February 2009 NSP Usage Report -Available March 2009 Application Materials Minnesota Housinga€T'"s NSP Funding Applications are due January 28, 2009. Ap ~~uicie Pry" ~ , '"fin -revised January 5, 2009 is 1 ~`ip Code Budget ~i,r j r~^~ur?ty Budget i' "?ain`t Nc," ~-?~t Starydards -revised January 5, 2009 Aff" ~ F.:."" mousing I~1a_rketing_Piar7 ~ Ir~tpediments f©_Fair Nc~i~sing NSP Income Limits: 50°io P~3,edian Income, i20°lo_Median Income. Resources ::Ufa '~P Information ,- ' ~' Approved_Counse.l±ng A.g~.~~cies { ~ _ ~ ~ aiscount_Methodology - (Powerpoint) Matching_Stratege.s to Neighborhood Conditions - (Powerpoint) M ~'`;-'-aiiizirtg Neighf~orhoods by Addressing. Foreclosed and Abandonded P _ _ , ',~___._sion Paper Page 2 of 3 http://www.mnhousing.gov/resources/apply/MHFA_OO7433.aspx?print=true 2/24/2009 Neighborhood Stabilization Program (NSP) Late r-i; 2C~0~3 pricing. Study - (Powerpoint) Best Practices Data/Recommended Resources r-~ - fcrt Noosing Policy ~,_ ., try Kr~o:~r~edc~^'- pr :. p C ~ ~`' wr of t1~~ ~. ~ ~ ,"_- administrator of fdationai E3,anks Other NSP Recipients ,. ~ ~„c~pol:3~~: Paul ;pin Cont;y ~'~ r~~. ~nty C' ''~~ur~ty Other Potential Funding Sources (~'n~artlTiE'fl~. of C{J37ijT1C~rCf? .Department of Employment and Economic Development u~;nq Fund C;r '~ ~ tinnesot.a Nousing__Fund r1c' - ~n Council NSP Contact Please contact Katy Lindblad or Ruth Simmons for questions on the NSP Fund: Katy Lindblad at 651-296-2617, katy.lindblad@state.mn.us or Ruth Simmons at 651-297-5146, ruth.simmons@state.m.us. Page 3 of 3 http://www.mnhousing.gov/resources/apply/MHFA_007433.aspx?print=true 2/24/2009