Neighborhood Stabilization Program Redevelopment of Abandoned and Foreclosed Homes

Neighborhood Neighborhood Stabilization ProgramStabilization Program

Redevelopment of Abandoned and Foreclosed Redevelopment of Abandoned and Foreclosed

HomesHomes

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Presentation OutlinePresentation Outline

• Background

• Program Requirements

• Preliminary Program Design

• Accountability

• Next Steps

• Foreclosure Prevention Resources

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Presentation OutlinePresentation Outline

• Background

• Program Requirements

• Preliminary Program Design

• Accountability

• Next Steps

• Foreclosure Prevention Resources

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BackgroundBackground

• Title III of the Housing and Economic Recovery Act of 2008 created the Neighborhood Stabilization Program (NSP)

• Provides $3.9 billion for states and local governments to respond to rising residential foreclosures and property abandonment

• States and local governments will use this funding to acquire, redevelop and sell foreclosed properties

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BackgroundBackground

• Allocation of NSP funds were targeted to states and local jurisdictions of greatest need based on:

– Number and percent of home foreclosures

– Number and percent of homes financed by sub-prime mortgages

– Number and percent of homes in default or delinquencies

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BackgroundBackground

Funding Allocation:

• Orange County was allocated $27.9 million

• Second largest allocation in the state

• 18 month deadline to commit or expend the funds

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Background Background

Eligible Activities:

• Purchase and rehabilitation of foreclosed homes

• Demolition of abandoned and blighted structures

• Redevelopment of demolished or vacant properties

• Provision of financing tools to assist with sale of home

– Down payment assistance

– Soft second mortgages

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Presentation OutlinePresentation Outline

• Background

• Program Requirements

• Preliminary Program Design

• Accountability

• Next Steps

• Foreclosure Prevention Resources

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Program RequirementsProgram Requirements

• Neighborhood Stabilization Program funds are considered Community Development Block Grant (CDBG) funds

• NSP funds are being treated as a special allocation of FY 2008-2009 CDBG budget

• Grantees must submit a substantial amendment to our FY 2008-2009 CDBG Annual Action Plan

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Program RequirementsProgram Requirements

Significant elements of the NSP plan

1. Identify geographic areas of greatest need using:

–Percentage of home foreclosures.

–Percentage of home financed by sub-prime mortgages

–Areas likely to face significant rise in rate of foreclosures

2.Describe how the use of funds will be targeted to areas of greatest need

3.Describe the activities to be under taken

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Program RequirementsProgram Requirements

Significant elements of the NSP plan (cont)

4. Identify bank owned properties within target areas

5. Purchases must be at a discount from the current appraised value

– Minimum 5 percent for single purchases

– Minimum 15 percent for bulk purchases

6. Sale of home shall be equal to or less than cost to acquire and rehabilitate

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Program RequirementsProgram Requirements

The program must serve families making up to 120% of the areas median income (AMI)

(Example: $71,040 for a family of four)

Twenty five percent (25%) of the funds must serve families at or below 50% AMI

(Example: $29,600 for a family of four)

Income RequirementsIncome Requirements

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Presentation OutlinePresentation Outline

• Background

• Program Requirements

• Preliminary Program Design

• Accountability

• Next Steps

• Foreclosure Prevention Resources

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Preliminary Program DesignPreliminary Program Design

• Housing and Community Development Division will be lead agency

• Realignment of key staff to implement the program

– Draft the NSP plan

– Develop internal policies and controls

– Work with participating agencies and partners

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Preliminary Program DesignPreliminary Program Design

Selection Criteria for Nonprofit HousingDevelopment Agencies:

• Public Purpose Mission

• Housing Development/Rehabilitation Experience

• Agency Capacity

• Financial Stability

• Accountability

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Preliminary Program DesignPreliminary Program Design

Participating Agencies: • Nonprofit housing development agencies will be our

principal partners in acquisition, rehab, and sale of homes – Orange County Housing Finance Authority– Housing and Neighborhood Development

Services (HANDS)– Florida Community Partners– Orlando Neighborhood Improvement Corporation– Homes In Partnership– Habitat for Humanity

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Preliminary Program DesignPreliminary Program Design

Other Partners:

• Realtors will assist with finding qualified buyers

• The Lenders will provide the first mortgages

• Contractors and sub-contractors will participate in the rehabilitation, redevelopment work

• Housing counseling agencies will provide mandatory housing counseling

• Other community organizations to assist in marketing the program

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Preliminary Program DesignPreliminary Program Design

Initial Planning:

• Meeting with participating agencies

• Working with other county divisions to research the impact of foreclosures

• Identifying areas of greatest need

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Preliminary Program Design Preliminary Program Design Foreclosure Trends 2006-2008 (Top 12 Areas)

Zip Code Community Activities

32824 Taft / Meadow woods 114532808 Pine Hills 99732828 Waterford / Avalon 87232837 Hunter's Creek / Southchase 84232835 Metrowest 75132825 Union Park/Rio Pinar 71034787 Winter Garden / Horizon West 70632818 Pine Hills 70532822 Lee Vista 70232712 Apopka 59432811 Orlo Vista 56432703 Apopka 561

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Presentation OutlinePresentation Outline

• Background

• Program Requirements

• Preliminary Program Design

• Accountability

• Next Steps

• Foreclosure Prevention Resources

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AccountabilityAccountability

• Compliance with all Federal Regulations

• Coordination with Orange County Comptroller’s Office

• Monthly meetings with participating agencies

• Quarterly reports to HUD

• Interim reports to BCC

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Presentation OutlinePresentation Outline

• Background

• Program Requirements

• Preliminary Program Design

• Accountability

• Next Steps

• Foreclosure Prevention Resources

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Next StepsNext Steps

TimelineDate Action

By December 1, 2008

Orange County must amend its CDBG Annual Action Plan

On or about January 15, 2009 Execute grant agreement with HUD

On or aboutJuly 15, 2010 Funds must be committed or expended

On or aboutJuly 30, 2013 Program income returned to Treasury

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Presentation OutlinePresentation Outline

• Background

• Program Requirements

• Preliminary Program Design

• Accountability

• Next Steps

• Foreclosure Prevention Resources

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Foreclosure Prevention Foreclosure Prevention ResourcesResources

For mortgage default counseling:For mortgage default counseling:

Acorn Housing Acorn Housing 407-254-5974 407-254-5974

Consumer Credit Consumer Credit Counseling Services Counseling Services 1-800-741-70401-800-741-7040

Central Florida HANDS Central Florida HANDS 407-447-5686 407-447-5686

Orange CountyHousing & Community Development Division

Web Site Address:

www.OrangeCountyFL.net/housing

Neighborhood Neighborhood Stabilization ProgramStabilization Program

Redevelopment of Abandoned and Foreclosed Redevelopment of Abandoned and Foreclosed

HomesHomes