Neighborhood Stabilization
Program
Sherburne County Programs
Central MN
Housing Partnership
Agenda Overview
• Overview of NSP and MN Housing’s NSP
Program Goals/Requirements
• Description of Target Areas and Programs in
Sherburne County
Becker
Big Lake
Elk River
Zimmerman
Central MN
Housing Partnership
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Program and Funding Overview
HERA Act
• Title III of Division B of the Housing and
Economic Recovery Act, 2008 (HERA)
• Section 2301-Emergency Assistance for the
Redevelopment of Abandoned and Foreclosed
Homes
Central MN
Housing Partnership
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NSP Program Overview
• Activities must comply with CDBG rules
• Neighborhood Stabilization requirements
» 15% Discount
• Minnesota Housing’s NSP plan
requirements
Central MN
Housing Partnership
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NSP Program Overview
All fund uses identified under HERA
are eligible
» Eligible uses have root in CDBG program
» Investment aimed to Housing Individuals and
Families;
» Interim uses are to benefit area residents;
» Demolition within target area of
neighborhood redevelopment.
Central MN
Housing Partnership
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NSP Program Ineligible Fund Uses
• Foreclosure prevention
• Demolition of nonblighted structures
• Purchase of properties
not abandoned or
foreclosed upon
Central MN
Housing Partnership
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Neighborhood Stabilization Program
• A comprehensive strategy for
neighborhood stabilization
• Demonstrated feasibility and
capacity in using the funds within
the required timeframe
• Maximizing leverage, public
and/or private funds
• Outcomes are achievable
Central MN
Housing Partnership
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Neighborhood Stabilization Program
Funding Decisions
Priorities:
•Proximity to planned transit
•Promote Economic Diversity
Plans should be comprehensive and
include strategies to:
» Improve living conditions, preserve
affordability, stabilize home values,
address public safety, improve
schools, parks, job creation, and
engage residents.
Central MN
Housing Partnership
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NSP Program Program Goals
Maximize revitalization and
stabilization impact on
neighborhoods
Complement and coordinate
with other federal, state and
local investments in the
targeted neighborhood
To preserve affordable housing
opportunities in the targeted
neighborhoods
Central MN
Housing Partnership
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NSP Program Partnerships
• Collaborating partners to complement and supplement
expertise and improve capacity – Communities partner
with other organizations i.e. Tri-CAP, Central MN
Habitat for Humanity, Local Lenders, Real Estate
Agents
• Funding partners to improve investments and
maximize outcomes
• Realtors and Lenders play a key role in getting the
work out and reclaiming neighborhoods.
Central MN
Housing Partnership
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Program Requirements
• Subrecipients have less than 18 months to
obligate NSP funds.
• Timely use – Clock starts ticking from the date
HUD signs its grant agreement with Minnesota
Housing; our start date is March 20th, 2009 –
but grant agreements were only signed this
week.
Central MN
Housing Partnership
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Direct Grantees of Federal NSP
Dollars
Minnesota Housing : $38.8 MM (State Program)
Minneapolis
: $ 5.6 MM
St. Paul
: $ 4.3 MM
Hennepin County
: $ 3.8 MM
Dakota County
: $ 2.7 MM
Anoka County
: $ 2.3 MM
Grand Total – MN
$57.8 MM
Central MN
Housing Partnership
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Allocation and Pool Distribution
Minnesota Housing:
$38.8 MM -State Program
Community Revitalization Funds Minnesota Housing Adm. Costs -
$3.68 million
$500,000
Funds to be Distributed: $34.7 MM
Central MN
Housing Partnership
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Areas of Greatest Need
Determination of Target
Areas
Central MN
Housing Partnership
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Minnesota Housing’s Guidelines for
Determining Areas of Greatest Need
FUNDING FORMULA DEVELOPMENT
• Formula methodology was data driven
• Funds to be directed to areas of greatest need
• Areas heavily impacted by the crisis will have access to
direct allocations and competitive funds
• Crisis occurring in both Metro and Greater MN
• Targeted areas should be geographically small (based on
data availability) to produce the largest impact possible
Central MN
Housing Partnership
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Minnesota Housing’s Guidelines for
Determining Areas of Greatest Need
Funding Formula Development - Minnesota
Housing analyzed:
•Foreclosure data, real estate owned (REO), subprime,
and delinquency data by zip code
•Sheriff’s sales data on a county basis
Central MN
Housing Partnership
•Used adjusters for age of housing, rate of
foreclosures/100 Households, and median family income
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120 Highest Need Zip Codes
Source: Minnesota
Housing analysis of Federal
Reserve Board estimates
based on First American
LoanPerformance, April
2008
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Central MN
Housing Partnership
37 Zip Codes Assigned Funds
Central MN
Housing Partnership
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Allocation and Pool Distribution
$34.7 million
Funds To Be Distributed
$16 MM – High need zip codes in NSP entitlement areas
$7.5 MM – High need zip code areas outside NSP
entitlement areas
$10.9 MM – Competitive pool - Communities in one of
Minnesota’s 23 high need counties
» Twin Cities Metro Area - $2.9 million
» Greater Minnesota - $6.0 million
» General Pool - $1.8 million
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Central MN
Housing Partnership
Sherburne County NSP recipients
Funds To Be Distributed
BECKER
$1.6 Million
Regional Group Applied from
Competitive County Pool includes other
jurisdictions in Benton/Stearns
St. Cloud HRA to Administer
High Need Zip Code Pool
City of Big Lake to Administer w/St.
Cloud HRA
High Need Zip Code Pool
Tri-CAP to Administer
High Need Zip Code Pool - Central MN
Housing Partnership to Administer
BIG LAKE
$940,676
ELK RIVER
$593,820
ZIMMERMAN
$631,819
$2,919,706
TOTAL FUNDS AVAILABLE
Matching funds are also provided by recipients and partner agencies, not included in these totals.
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Program Requirements
Acquisition Discount
General: Properties must be purchased at a maximum reasonable
discount, which is a discount of 15% on all acquired properties.
This applies to all Buyer Incentive and Rehab
Loans.
Affordability Requirements
General: Affordability must be maintained for a duration dictated
by the amount of NSP funds used to subsidize a property on a per
unit basis. Resale or recapture provisions are in place to ensure
the affordability period is met.
Central MN
Housing Partnership
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Eligibility
• Can be used by families up to 120% of County Median
Income
• 25% of the funds must be used to benefit lower than 50% of
County Median Income – Habitat for Humanity as Partner
• Properties must be purchased at a discounted rate of 15%
This is based on an independent appraisal and negotiation
with the bank who owns the property.
• Funds can only be used for abandoned and/or foreclosed
homes – in an eligible Target Area
• There are a number of factors that ensure affordability for
people buying foreclosures.
• Homebuyers must attend a HUD certified homeownership
counseling program.
Central MN
Housing Partnership
Eligible Income Ranges
HH Size
Sherburne 120%
Sherburne 50%
1 Person
$70,500
$29,350
2 Person
$80,550
$33,550
3 Person
$90,600
$37,750
4 Person
$100,700
$41,950
5 Person
$108,750
$45,300
6 Person
$116,800
$48,650
7 Person
$124,850
$52,000
8 Person
$132,900
$55,350
Central MN
Housing Partnership
Program Requirements
Homebuyer Counseling
• 8 hours of homebuyer counseling
• Must be HUD approved - Homestretch Provider
Agencies pending approval
• Website will be updated with HUD’s response
• Bank regulator’s guidance on non-traditional
mortgages, see Statement on Subprime Mortgage
Lending available at
http://www.fdic.gov/regulations/laws/rules/50005160.html
Central MN
Housing Partnership
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Program Requirements
Rehabilitation Standards
▪
▪
▪
Rehabilitated in accordance with State Building, Electrical, and
Plumbing Codes.
In compliance with local housing standards. For St. Cloud
regional projects, the housing must meet the minimum housing
quality standards (HQS) of 24 CFR 982.401.
Minnesota Housing NSP Rehabilitation Standards
►
►
►
Mold and water infiltration mitigation
Installation of smoke detectors, carbon monoxide detection
equipment, and GFCI receptacle
Application of relevant 2008 Green Communities Criteria with the
Minnesota Overlay to any building component that is modified or
altered during a financed activity; including selecting Energy Star
qualified products.
Central MN
Housing Partnership
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Federal Compliance
Uniform Relocation Act
General: States and subrecipients must ensure
that reasonable steps are taken to minimize
the displacement of persons and businesses. If
such parties are displaced, they are to be
provided relocation assistance.
For these programs, we will not allow the use
of funds on any properties that have current
occupants – tenants or property owners.
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Federal Compliance
Lead Based Paint
General: Must meet CFR Part 35.
Environmental Review
HUD environmental review consists of evaluating a number of
factors and environmental impacts. Historic review can be the
most significant part of this process, as all homes must be
reviewed by State of MN Historic Preservation office, and can take
up to 30 days. This could affect time between offer acceptance
and setting the closing date.
Central MN
Housing Partnership
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BECKER TARGET AREAS
• Based on MHFA/HUD guidance
• High concentrations of foreclosures in a
defined geographic area
• Small, well-defined neighborhoods
Central MN
Housing Partnership
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Programs Offered – Becker
Homebuyer Incentive
$14,000 in Downpayment Assistance (not needs based)
10-yr forgivable, prorated forgiveness 1/10th per year
Repaid at time of sale, refinance, non-homestead - prorated rate
Must be foreclosed, vacant home
Homebuyer Rehab Loans
$30,000+ Rehab Loans – work determined by HRA staff
30-yr, 0%interest, deferred loans
Repaid at time of sale, refinance, non-homestead - no forgiveness
Must be foreclosed, vacant home
Habitat For Humanity Homes
6-8 Homes will be purchased, rehabbed and re-sold by Habitat for
Humanity. 1-2 in Becker???
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BECKER: Fund Uses - Activities
Homebuyer Incentive and Rehab loans:
• Applicant should contact the HRA for pre-approval prior
to identifying a home.
• Buyer obtains their own first mortgage.
• HRA to secure independent appraisal – compare it to
bank appraisal/purchase price to ensure 15%
discount.
• Independent appraisal to utilize comparables that are
sold under normal market conditions.
• 15% discount – applicant/buyer agent discuss this
process with HRA prior to offer.
• Loan closing simultaneous with first mortgage.
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BECKER Fund Uses - Activities
A. Down Payment Assistance
• This provides $14,000 incentive to purchased a foreclosed
home in an eligible Target Area.
• Qualify based on income.
• Every applicant receives the same amount.
• No Environmental review required.
• 15% discount does apply to purchase price.
• 10 year forgivable loan, forgiven 1/10th per year.
• 2nd mortgage, no interest, no payments.
• Repayment on sale, refinance, non-homestead, repayment is
prorated.
• Must be foreclosed, bank owned, unoccupied home
• Cannot be used for short sales
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BECKER Fund Uses - Activities
B. Rehab Loans for Acquisition
• 15% discount on purchase price applies.
• Upon a purchase offer, HRA will inspect home, prepare
scope of work and bid documents.
• Environmental Review required. This process alone
takes up to 30-days.
• Lead based paint rules apply. HRA maintains a list of
lead certified contractors only.
• Buyer solicits at least 3 bids, hires general contractor.
• Rehab funds placed in escrow account, those funds
used to pay contractor directly.
• All work must be done by a licensed general
contractor.
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BECKER Fund Uses - Activities
B. Rehab Loans for Acquisition
• $30,000+ available for rehab loans.
• Can be used in conjunction with Homebuyer Incentive.
• Rehab work must be completed in 90 days, unless
unavoidable delays occur. HRA conducts interim and
final inspections
• Repayment on sale, refinance, non-homestead,
repayment is prorated.
• Must be foreclosed, bank owned, unoccupied home
• Cannot be used for short sales
• Can be used for energy star certified appliances
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Becker NSP Programs
Web site materials
•Program Descriptions
•Downloadable Maps of Eligible
Target Areas
•Information on Homebuyer
Training Opportunities
http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?web
ListAction=search&searchstate=MN
•HUD’s link to NSP guidance
materials
http://www.hud.gov/offices/cpd/communitydevelopme
nt/programs/neighborhoodspg/
•Minnesota Housing’s FAQ’s
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www.stcloudhra.com
BECKER NSP/St. Cloud Housing and
Redevelopment Authority Contacts
Shannon Adamski – 320-252-0880
[email protected]@state.mn.us
Cliff Knettel –320-252-0880
[email protected]
Les Henson –320-252-0880
[email protected]
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City of Big Lake
Neighborhood Stabilization Program (NSP)
Funding Sources
City of Big Lake
Funding Opportunities
Program Activities
•Down Payment Assistance
• Acquisition and Rehab
• Demolition
•Tri-CAP Weatherization
•CASA Funding (Pending)
•FHLB Down Payment Assistance
City of Big Lake NSP Activities
•
Down Payment Assistance
$7,500 NSP incentive based Down Payment assistance
»
$15,000 FHLB Down Payment assistance
▪ 0% Deferred Loans
▪ If loan is for less than $15,000, then 5 year resale affordability
period
▪ If loan is $15,000 - $39,999, then 10 year resale affordability
period
▪ If loan is for over $40,000, then 15 year resale affordability
period
▪ Loans will have a resale restriction that requires the home to be
sold to a household meeting NSP income requirements if sold
during affordability period
▪ Home being purchased must be in one of the targeted
neighborhoods
▪ Must be foreclosed home
Affordability period is based on the total amount of NSP dollars utilized
(down payment and rehabilitation funds).
City of Big Lake NSP Activities
• Acquisition and Rehabilitation
» City of Big Lake
▪ Will purchase four homes in target neighborhood
▪ Rehab & resell to qualified buyers
▪ One home will be sold to a 50% AMI household
and other will be sold to a 120% AMI household
» Habitat for Humanity will purchase 2 homes
▪ Will purchase two homes in target neighborhood
▪ Will be sold to 50% AMI households
City of Big Lake
NSP Activities
• Demolition
» City will purchase two homes in target neighborhood
» Demolish & resell to income qualified buyer
City of Big Lake Target Areas
City of Big Lake
NSP Contact Information
Jim Thares- 763-263-2107
[email protected]
Leslie Chmielewski- 763-263-2107
[email protected]
TRI-COUNTY ACTION
PROGRAM, INC.
Neighborhood Stabilization Program (NSP)
Funding Sources
TRI-CAP, INC. FUNDING
OPPORTUNITIES
• City of Elk River NSP
» Down Payment Assistance
» Purchase Rehab
» Acquisition Rehab
• Weatherization
• Connexus Appliance Replacements
• FHLB Acquisition Rehabilitation
CITY OF ELK RIVER NSP
•
Down Payment
Assistance
»
»
»
»
»
»
»
»
»
$5,000 NSP Down Payment
$10,000 GMHF if over 60% AMI
$15,000 GMHF if under 60%
AMI
0% Deferred Loans
If loan is for less than $10,000,
then 5 year recapture period
If loan is for over $10,000, then
10 year recapture period
Loans are pro rata 10% each
year (10 year recapture periods)
or 20% each year (5 year
recapture periods)
Home being purchased must be
in one of the targeted
neighborhoods
Must be foreclosed home
• Purchase Rehab
» Rehabilitation funds for
homeowners who purchase
foreclosed properties
» Used to make necessary
improvements to property
» Maximum of $30,000
» 0% Deferred Loan
» If less than $10,000, then
5 year recapture period
» If more than $10,000, then
10 year recapture period
» Loans are pro rata 10%
each year (10 year
recapture) or 20% each year
(5 year recapture)
» Home being rehabbed must
be in one of targeted
neighborhoods
» Must be foreclosed home
CITY OF ELK RIVER NSP
• Acquisition Rehabilitation
» Tri-CAP will purchase 2 homes within one of the
neighborhoods at a 15% discount
» Home must be a foreclosed home
» Home will be rehabbed and resold to income
qualified buyer
» One home will be sold to 120% AMI household
» One home with be sold to 50% AMI household
CITY OF ELK RIVER
TARGETED NEIGHBORHOODS
Windsor Oaks
Trott Brook Farms
CITY OF ELK RIVER
TARGETED NEIGHBORHOODS
Park Pointe
Elk River Station
TRI-CAP, INC. WEATHERIZATION
• Weatherization
» Funds can be paired with NSP funding
» Funds used to help make homes more energy
efficient and to lower household energy consumption
» Ex: Insulation, caulking, weather stripping, blower
door diagnostic testing
» Homeowner must be qualified for Energy Assistance
through Tri-CAP to receive Weatherization
» Weatherization funds are in the form of a grant to
the homeowner (do not have to be repaid)
» Average of $3,500 per household in weatherization
activities
TRI-CAP, INC.
CONNEXUS APPLIANCE REPLACEMENTS
• Connexus Customers
» Tri-CAP, in collaboration with Connexus Energy, can
offer appliance replacements to Connexus Energy
customers
» Customers must be on the Energy Assistance
recipient list at Tri-CAP
» Replaced appliances must be over 10 years old or
not energy star rated
» New appliances will be energy star rated, brand new,
appliances
» Can be paired with NSP funding
TRI-CAP, INC.
FHLB ACQUISITION REHABILITATION
• Federal Home Loan Bank Acquisition Rehab
» Tri-CAP will be purchasing foreclosed homes in rural
areas in Benton, Sherburne, and Stearns counties
» Homes will be rehabbed
» Homes will be sold to income qualified homeowners
» Will be doing 12 homes over an 18 month period
» Can be used in conjunction with NSP funds if in
appropriate areas (rural)
» Rural in the three county area are any towns besides
St. Cloud, Sauk Rapids, Sartell, Waite Park, St.
Joseph, and Elk River
NOW TAKING APPLICATIONS!!
Tri-CAP: 320.251.1612
Dan Roberts: [email protected]
City of Elk River: 763.635.1000
Catherine Mehelich: [email protected]
Annie Deckert: [email protected]
CENTRAL
MINNESOTA
HOUSING
PARTNERSHIP
Central MN
Housing Partnership
Neighborhood Stabilization Program (NSP)
Funding Sources
CENTRAL MINNESOTA HOUSING
PARTNERSHIP
City of Zimmerman NSP
» Down Payment Assistance
» Purchase Rehab
•CASA Funding (application pending)
•FHLB Down Payment Assistance
•HUD Approved 8 hour Homebuyer
Education Course needed
Central MN
Housing Partnership
CITY OF ZIMMERMAN NSP
•
Down Payment Assistance
» $12,500 NSP incentive based Down
Payment assistance
» $15,000 NSP needs based Down Payment
assistance
» 0% Deferred Loans
» If loan is for less than $15,000, then 5
year resale affordability period
» If loan is $15,000 - $39,999, then 10 year
resale affordability period
» If loan is for over $40,000, then 15 year
resale affordability period
» Loans will have a resale restriction that
requires the home to be sold to a
household meeting NSP income
requirements if sold during affordability
period
» Home being purchased must be in one of
the targeted neighborhoods
» Must be foreclosed home
Affordability period is based on the total
amount of NSP dollars utilized (down
payment and rehabilitation funds).
• Purchase Rehab
Central MN
Housing Partnership
»
»
»
»
»
»
»
»
»
»
Rehabilitation funds for homeowners
who purchase foreclosed properties
Used to make necessary
improvements to property
Maximum of $30,000
0% Deferred Loan
If less than $15,000, then 5 year
resale affordability period
If loan is $15,000 - $39,999, then 10
year resale affordability period
If loan is for over $40,000, then 15
year resale affordability period
Loans will have a resale restriction
that requires the home to be sold to a
household meeting NSP income
requirements if sold during affordability
period
Home being rehabbed must be in one
of the targeted neighborhoods
Must be foreclosed home
CITY OF ZIMMERMAN TARGETED NEIGHBORHOODS
Central MN
Housing Partnership
Central MN
Housing Partnership
CENTRAL MINNESOTA HOUSING
PARTNERSHIP
Lenee Hoffman: [email protected]
320-259-0393
Central MN
Housing Partnership
Princeton
• Small section located in Sherburne County
• Program information at www.princetonmn.org
Click on Neighborhood Stabilization Program in
the menu below the photos
• Local Contact: Jay Blake, Community
Development Director, City of Princeton 763389-2040
• Project Coordinator, Lezlie Ballis, Lakes and
Pines Community Action Council , Mora, MN
320-679-1800 ext. 123
Sherburne County Neighborhood
Stabilization Programs
Questions and Answers
Central MN
Housing Partnership
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