HUD Funds Will Help N.C. Communities with Foreclosures, Other Housing Crisis Issues
Raleigh, NC – March 16, 2009 – (RealEstateRama) — Gov. Bev Perdue today announced that 20 local governments, nonprofits and other organizations have received grant awards totaling $48.85 million under the new federal Neighborhood Stabilization Program developed late last year by the U.S. Department of Housing and Urban Development. The program’s purpose is to assist those areas hit hardest by the housing crisis.
“Foreclosures, subprime mortgages and mortgage defaults are hurting homeowners, families and our communities,” Perdue said. “These new federal funds will go to communities most severely affected by the housing crisis and will be used effectively. I’m encouraging all participating organizations to collaborate in order to leverage these grant funds and make them go even further.”
States were required to identify areas of greatest need based on the number of foreclosure starts and other housing-related statistics from state and national sources. In North Carolina, areas in 23 counties met the “greatest need” criteria: Alamance, Brunswick, Buncombe, Cabarrus, Catawba, Cumberland, Dare, Davidson, Durham, Edgecombe, Forsyth, Gaston, Guilford, Iredell, Johnston, Mecklenburg, New Hanover, Pitt, Randolph, Rowan, Union, Vance and Wake. Please click here to see the “Greatest Needs Analysis” map.
Forty-six NSP grant applications were submitted by Feb. 3. Of those, 11 local governments and six non-profits were funded for specific areas; the three statewide organizations selected will ensure the areas of greatest need in the 23 counties receive assistance. Brief program descriptions follow this release. Grant recipients:
Local Government Recipients: City of Raleigh, $2.5 million; Wake County, $2.5 million; City of Charlotte, $2.5 million; City of Greensboro, $2.5 million; City of Winston-Salem, $2.5 million; City of High Point, $2.5 million; City of Gastonia, $2 million; Henderson/Vance County, $2 million; City of Durham, $2 million; City of Rocky Mount, $2 million; City of Lexington, $2 million.
Non-profit Agency Recipients: St. Augustine, in Raleigh, $2 million; Charlotte Housing Authority, $2 million; Guilford Habitat for Humanity, $2 million; Forsyth Habitat for Humanity, $2 million; Passage Home (in Wake County), $2 million; Greensboro Housing Authority, $2 million.
Statewide Agency/intermediary Recipients: Self-Help Credit Union, $2.5 million; N.C. Community Development Initiative, $3.5 million; and N.C. Housing Finance Agency, $4 million.
NSP funding is provided through HUD’s Community Development Block Grant program under the Housing and Economic Recovery Act of 2008. In North Carolina, the NSP grants are administered by the Commerce Department’s Division of Community Assistance. DCA staff developed North Carolina’s guidelines through a public process late last year. Total NSP grant funding to North Carolina is $52.1 million; 5 percent of that will be used by DCA to implement and monitor the program.
To ensure that funds are used most effectively, HUD recommended a minimum award of $2 million. DCA staff evaluated the 46 applications and more than 9,000 pages of documentation using a scoring system designed to be sure that the state complies with federal regulations and uses the funds most effectively. Selection criteria were based on severity of need (50 points); treatment of need, i.e., how the needs would be addressed (20 points); capacity of applicant and program administrators (20 points); mitigation of fraud, waste and abuse (5 points); socio-economic factors (4 points); and green building components and techniques (1 point).
For more information on the NSP program, please go to the NSP section on the Commerce Department’s Web site.
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Neighborhood Stabilization Program Award Recipients — Project Summaries
Neighborhood Revitalization for Local Governments
City of Charlotte
The city will utilize NSP funds to engage the private sector to promote home ownership purchases and rehabilitation in the areas of greatest need and target specific neighborhoods within the areas of greatest need experiencing high levels of foreclosures. Specifically, the city’s proposed activities include down- payment assistance and housing rehabilitation. As a result of funds, the city anticipates serving approximately 100 low to middle-income households.
City of Durham
The city proposes to use NSP funds to help stimulate the development of mixed-income neighborhoods in the city’s area of greatest need. Through a down-payment assistance program, the city plans to serve 36 tenant households and approximately 47 future homeowners.
City of Winston-Salem/Forsyth County
Winston-Salem/Forsyth County (WSF) proposes to use NSP funds to provide financing for the purchase and rehabilitation of foreclosed homes in neighborhoods which have experienced and/or are anticipated to incur high rates of foreclosure. These homes will be made available with attractive financing to homebuyers and non-profit affordable housing providers. The WSF project plans to serve a total of 101 low- to middle-income households.
City of Gastonia
The city proposes to use NSP funds to purchase and rehabilitate 14 foreclosed properties. The city’s overall goal is to provide homeownership opportunities to participants in the NSP Individual Development Account program as well as through a lease-purchase program. All of the city’s NSP activities will take place in the identified areas of greatest need. Due to the market absorption of foreclosed properties, the city will look to areas within the city to acquire properties not absorbed by the investor market when necessary.
City of Greensboro
The City of Greensboro’s NSP-Funded Housing Assistance Program proposes to address four objectives: 1) reduce the inventory level of foreclosed properties through incentives for homebuyer purchase, 2) reduce the inventory of dilapidated foreclosed properties through targeted acquisition and rehabilitation, 3) maintain homeownership levels, and 4) increase the availability of permanent supportive housing. The activities will be carried out in areas defined as high foreclosure risk where there are complementary community development activities and active partnerships under way to create synergies for long-term neighborhood stabilization.
City of High Point
The city proposes to use NSP funds to acquire, rehabilitate and resell 40 foreclosed properties. In addition to reselling rehabilitated properties, the city will build 10 new homes. It is anticipated that potential homebuyers participating in the city’s homebuyer education and foreclosure prevention training programs will be likely purchasers of rehabilitated properties.
City of Lexington
The affordable housing partners of the Homeownership Plan have identified a number of potential customers. These programs primarily serve families below 80 percent AMI (area median income). Based on the housing prices of foreclosed homes, it is necessary to create a mechanism for identifying buyers that are 80-120% percent AMI. As a member of The Association of Realtors, Lexington Housing and Community Development Corp. works closely with local Realtors and lenders. Lenders will also pay an important role in identifying customers 80-120 percent AMI.
The program will be openly advertised to the general public and clients of the Homeownership Plan partners. Contracts will be made available on a first come, first served basis. Customers must agree to homebuyer education/housing counseling requirements and obtain mortgage loans that meet affordability guidelines. The City’s financial assistance will not be used to leverage sub-prime mortgage products. Housing Counselors will assist in determining the household’s mortgage readiness and will review loan products of NSP buyers.
City of Raleigh
The goal of the Raleigh Neighborhood Stabilization Program is to strategically convert foreclosed properties into low-, moderate- and middle-income (LMMI) housing opportunities to stabilize targeted neighborhoods. Specifically, the city will acquire at least 30 foreclosed residential properties, rehabilitate 15 units for resale to LMMI homebuyers or for rental opportunities for households at or below 50 percent of area median income.
City of Rocky Mount
The City of Rocky Mount plans to use the NSP funds in a multi-prong approach, first concentrating on neighborhoods for which redevelopment plans are prepared and implementation has begun and then looking to additional areas with the greatest need. The NSP will be used to supplement current activities with an emphasis on abandoned and foreclosed properties.
Vance County/City of Henderson
Vance County and the City of Henderson have experienced tremendous job loss in recent years which has caused a large number of mortgage and tax foreclosures. There are approximately 20 structures that recently have been sold because of foreclosure. The city and county have 77 properties that have been turned over to an attorney to work through the foreclosure process. Eleven properties are currently owned by the city and county as a result of tax foreclosure process, of which 9 are currently on the market to be sold. In addition to foreclosed properties, the city and county have identified 125 properties that have been abandoned and are now considered blighted properties. With the assistance of NSP funds, Vance County plans to acquire, rehabilitate, demolish blighted structures, construct new dwellings, and provide down payment assistance to low-moderate-and middle income (LMMI) individuals and families.
Wake County’s goal for the NSP is to stabilize neighborhoods and prevent abandonment and blight in areas of the county stricken with high numbers of foreclosures. We will do this by repopulating these foreclosed and abandoned homes with families and individuals who qualify as low-, moderate-, and middle-income, and are in need of affordable housing. At least 30 percent of the families assisted through the NSP program will have incomes that are less than 50 percent of the area median income, and the remaining families have incomes that are less than 120 percent of the AMI.
Our objectives are to contract with non-profit organizations that will purchase foreclosed homes at a 15 percent discount of the appraised value, rehabilitate these homes where necessary, and sell them to prequalified homeowners who have received homeowner counseling and are well equipped to maintain a home and its related responsibilities. The non-profit organization will identify homes to purchase that are located in areas of greatest need determine by a high number of foreclosures in neighborhoods that are at risk of future foreclosures.
Neighborhood Revitalization for Non-profits
Charlotte Housing Authority
The Charlotte Housing Authority’s NSP strategy is to 1) increase the number of units available for families making less than 30 percent of median income who may have been displaced by the mortgage crisis and 2) target specific multi-family properties within the areas of greatest need to ensure neighborhood stabilization in these areas. The Charlotte Housing Authority’s efforts are focused primarily on creating rental opportunities as a part of multi-family redevelopment efforts. The Charlotte Housing Authority plans to serve approximately 300 households with NSP funds.
Greensboro Housing Authority
The Greensboro Housing Authority plans to use NSP funds to purchase and rehabilitate 30 foreclosed properties in greatest need areas of Greensboro. These units will be made available for affordable rental housing.
Habitat for Humanity of Forsyth County
The Habitat for Humanity of Forsyth County will use NSP funds to purchase vacant, foreclosed homes within the greatest needs areas of the county that have high rates of foreclosures and also where there has already been substantial investment in mixed-income housing. Key neighborhoods to be targeted include: Scotland Ridge, Shalimar, Ridgewood, Pleasant Hills, Thornaby and Bedford Park.
Habitat for Humanity of Guilford County
The Habitat for Humanity of Guilford County will use NSP funds to provide high quality workforce housing and stem neighborhood decline. Specifically, funds will be used to purchase 24 foreclosed properties and make them available for purchase by eligible homebuyers.
Passage Home Inc. (South Raleigh)
Passage Home Inc. will use NSP funds to promote neighborhood stabilization and energy-efficient affordable housing by replacing properties adversely affected by foreclosure issues in south Raleigh. Specifically, funds will be used to acquire foreclosed homes at a discount, redevelop and/or rehabilitate properties for purchase by eligible homebuyers or rent to low to moderate income households.
Saint Augustine Community Development Corp. (Southeast Raleigh)
Saint Augustine Community Development Corporation through the Southeast Raleigh Stabilization Partnership seeks to purchase foreclosed and abandoned residential properties located near State Street and the Idlewild and College Park neighborhoods. The goal of this project is to rehabilitate or redevelop foreclosed properties in to homeownership opportunities for low to moderate to middle income households that currently reside in the target area.
N.C. Housing Finance Agency
The North Carolina Housing Finance Agency will use NSP dollars to fund a second mortgage program for households at or below 120 percent of area median income wanting to purchase rehabilitated foreclosed properties. This second mortgage program will be available among the 23 areas of greatest need as identified in the NSP Guidelines.
Self-Help Credit Union
Self-Help will use NSP dollars to fund a loan-loss reserve. The loan-loss reserve will be used for eligible 1) homebuyers of foreclosed properties at or below 120 percent of area median income, and 2) non-profit and for-profit affordable housing developers for the purchase and rehabilitation of foreclosed properties. These NSP funds will be available among the 23 areas of greatest need as identified in the NSP Guidelines.
N.C. Community Development Initiative
The goal of this collaborative effort is to significantly enhance the ability of community development corporations, other non-profits and units of local government to engage with DCA and use State NSP resources to stabilize and rebuild communities within the identified areas of greatest need. The NC NCSP Collaborative proposes to provide services to all 23 counties identified by DCA as greatest need areas. More specifically, the Collaborative will target those areas where there may be gaps in service or a lack of institutional or organizational capacity to undertake State NSP activities.