The Neighborhood Stabilization Program

The Neighborhood Stabilization Program

The Neighborhood Stabilization Program Timothy C. Raffa, Esquire Weissman, Nowack, Curry & Wilco, P.C. timr@wncwlaw.com 404-926-4667 Fax 404-926-4867 www.wncwlaw.com

OVERVIEW Housing and Economic Recovery Act of 2008 Congress allocated $3.92 billion in funds to the states, cities and local governments Each state receives a minimum of $19.6 million Community Development Block Grant

Purpose & Area of Greatest Need Purpose: stabilize neighborhoods that have high rates of foreclosure, delinquency, defaults or a high percentage of sub-prime mortgages: Areas of Greatest Need Geographical Areas with highest rates of foreclosure and sub-prime mortgages Based upon HUD Foreclosure and Abandoned Risk Score (8,9 or 10)

Allocation of Funds Timeline: Funds are to be Obligated within 18-months Funds should be expended within 5 years Non-obligated funds are recaptured by HUD

Allocation of Funds State of Georgia received a total of $153 Million Department of Community Affairs: $77 million Cities and Local Governments received $76 million directly

Allocation of Funds GEORGIA STATE PROGRAM $77,085,125 DE KALB COUNTY $18,545,013 ATLANTA $12,316,082 GWINNETT COUNTY $10,507,827 FULTON COUNTY $10,333,410 CLAYTON COUNTY $9,732,126 COBB COUNTY $6,889,134 COLUMBUS-MUSCOGEE $3,117,039 AUGUSTA $2,473,064 SAVANNAH $2,038,631

Use of Funds and Eligible Activities Acquisition and rehabilitation of foreclosed and abandoned properties: Acquire Disposition Direct homeownership assistance Funding of eligible rehab and preservation activities

Use of Funds and Eligible Activities Financing mechanisms for purchase and redevelopment of foreclosed homes for low-and middle-income homebuyers: Permanent Soft-Second loans at 0% to aid purchasers with repayment periods if sold or paid off prior to end of loan term; Down Payment Assistance Payment of closing costs Housing and Loan Counseling

Use of Funds and Eligible Activities Demolition of blighted and vacant structures: Demolish blighted structures (Defined: A structure is blighted when it exhibits objectively determinable signs of deterioration sufficient to constitute a threat to human health, safety, and public welfare. Once cleared, properties can be Land Banked or Redeveloped

Use of Funds and Eligible Activities Redevelopment of properties after blighted structures removed: New Construction of demolished properties Rehabilitation of vacant properties Reuse of properties for affordable rental housing

Use of Funds and Eligible Activities Land Bank: Acquisition of properties Maintenance of properties in Land Bank Disposition of properties NSP will cover costs up to 10 years.

Single Family Re-sales Sales price cannot exceed the FHA loan limit pf $252,890.00 Must be purchasers primary residence Buyer must complete 8-hours of HUD certified Home Counseling Household income must not exceed 120% of Area Median Income (AMI) Lease-Purchase option is available.

National Objectives Targeting families and individuals whose income does not exceed 120% of the Area Median Income (AMI) A minimum of 25% of funds are to be used for the purchase and redevelopment of abandoned or foreclosed properties for families or individuals whose income does not exceed 50% of the AMI

Atlanta: Area Median income 2008 MSA Househol d Income Limits 50% AMI (Low Income) 80% AMI (Low- Moderate Income 1 2 3 4 5 6 7 8 $24,900 $28,500 $32,050 $35,600 $38,450 $41,300 $44,150, $47,000 $39,850 $45,550 $51,250 $56,950 $61,500 $66,050 $70,650 $75,200 120% AMI (Middle Income) $59,800 $68,350 $76,900 $85,450 $92,300 $99,100 $105,950 $112,800

Affordability Requirements Various mechanisms will be utilized to attain the goal maintaining affordability in the areas where funds are utilized Properties cannot be sold as a primary residence for more than the total acquisition and rehabilitation costs

Affordability Requirements Properties must meet housing code ordinance and lead-based paint requirements Deed restrictions will be utilized to maintain it as affordable housing That is, it can only be sold to a buyer who meets certain income requirements and at a price affordable for the property

Affordability Requirements Setting of rental rates based upon fair market rents as determined by HUD Homeowner counseling Use of FHA loans instead of sub-prime mortgages Purchase and redevelopment of REO properties at a discount - 15%

Opportunities in Metro Counties Cobb County has selected its vendors Gwinnett County has two priorities: Priority One: Purchase and Rehab Foreclosed single-family housing Priority Two: Purchase foreclosed property on which new affordable housing can be constructed.

Opportunities in Metro Counties Gwinnett does NOT plan on using funds for the following: Rental properties or Demolitions Gwinnett anticipates the purchase, rehab and sale of 100 housing units. The county anticipates construction not to exceed 5-7 new units. Total units: 105

Opportunities in Metro Counties City of Roswell Joint Application with Fulton County Applied for $3,000,000 in funds from Georgia Department of Community Affairs

Opportunities Continued Fulton County: Anticipates the following: a. Demolition: 96 Units b. Acquisition: 42 Units/ resale at average sales price of $175,000.00 c. Rehab: 39 Units with an average cost of $15,000.00 d. Sale of Homes: 26 Units e. Redevelopment: 3 properties for public facilities instead of housing. f. Land Banking: 6 properties into the Fulton/Atlanta Total units: 212

Opportunities Continued City of Atlanta: a. Purchase & redevelopment of affordable foreclosed homes: 50 Units (at $25,000.00 per unit). b. Purchase, Rehab and Disposition of Foreclosed homes: 67 Units c. Land Banking activities: 15 Units d. Demolition of Blighted/Vacant Structures: 16 Units e. Redevelop Demolished/Vacant properties:8 Units Total units: 156

Opportunities Continued City of Atlanta is requesting Request for Proposals to become vendors at this time. Contact person is: Evelyn Nu Man City of Atlanta Bureau of Housing 68 Mitchell Street, Suite 1200 Atlanta, Ga 30303 404-330-6390 enuman@atlantaga.gov

Additional Contacts Gwinnett County: Craig Goebel craig.goebel@gwinnettcounty.com 770-822-5190 http://www.gwinnettcounty.com/departments/fi nancialservices/pdf/gc_nsp_application.pdf

Additional Contacts DeKalb County Chris Morris, Director Community Development Department 404-286-3308 http://www.co.dekalb.ga.us/commdev/pdf/nei ghborhoodstablizationprogramoverviewandu pdates.pdf

Additional Contacts Fulton County Ruth Jones 404-612-8758 Ruth.jones@fultoncounty.gov

Additional Contacts Fulton County/City of Roswell Melvin Richardson (Fulton) 404-612-8060 Melvin.richardson@fultoncountyga.gov Danny Blitch (Roswell) 770-641-3727 dblitch@roswellgov.com http://www.fultoncountyga.gov/images/stories/office% 20of%20Community%20Relations/NSP%20DCA%20 Application(1).pdf

Informational Sessions Information Session for Real Estate Professionals for the DeKalb, Fulton and City of Atlanta NSP s will be held Saturday. February 14 th, from 10:00 am to 12:00, at the Maloof Auditorium. Those interested have been asked to e-mail dhartman@co.dekalb.ga.us to pre-register.

Web Sites of Interest www.atlantaga.gov www.co.dekalb.ga.us www.fultoncountyga.com www.gwinnettcounty.com www.ci.roswell.ga.us