Key Features of NSP 2 Beyond the Neighborhood Stabilization Program Training Session Reclaiming...

Key Features of NSP 2

Beyond the Neighborhood Stabilization Program Training Session

Reclaiming Vacant Properties Conference Louisville, KYJune 1, 2009

Sarah M. GreenbergNeighborWorks® America

Creates opportunities for people to live in affordable homes, improve their lives and strengthen their communities

Provides financial support, technical assistance, and training for community development efforts around country

The NeighborWorks Network:

– Over 235 independent housing and community development nonprofit organizations

– All 50 states, Puerto Rico and D.C. - 4,400 communities

– $12.25 billion invested in America’scommunities

– 111,000 families have become homeowners

– 638,000 families have been educated about the home buying process

NeighborWorks® America

NeighborWorks® Center for Foreclosure Solutions

Began as pilot in 2005 Now the nation’s leading nonprofit foreclosure

mitigation program Training for foreclosure counselors Public outreach, educational, and awareness

campaigns Sustainable programs in cities and states with

high foreclosure rates Post-foreclosure and neighborhood

stabilization solutions

NeighborWorks® America’s Stable Communities Program

Support the Network and the field in efforts to turn the foreclosure crisis into an opportunity to build sustainable communities

– Help facilitate the swift but responsible disposition of foreclosed properties and the ability of communities return them to productive use

Resources/strategies:– Website

– Training/workshops

– Tools/publications

– Grants/technical assistance

– Success Measures – impact evaluation pilot

– National Community Stabilization Trust

NeighborWorks® Stable Communities Program: www.StableCommunities.org

Neighborhood Stabilization Program Round II: Just the Facts

– NOFA released May 4, 2009

– $2 billion in additional funds awarded competitively (vs. formula)

– $50 million for capacity building, $1.93 billion for program funds (HUD retained $20 million for program administration)

– Eligible grantees – states, units of government, nonprofits and consortia of nonprofits, for-profits in consortia

– $5 million minimum application (100 units), limit 10% for administrative expenses

– Applications due July 17th at 5:00 p.m. EST

– Last date for HUD to notify selected applicants: December 1, 2009

– Last date to make funds available: February 17, 2009

Neighborhood Stabilization Program Changes retroactive to Round 1:

– Land bank include operational costs and expanded to residential properties, not just foreclosed homes

– Redevelopment of vacant or demolished property limited to housing

– No demolition of public housing – Repealed challenging program income provisions

Key changes from Round 1:– Competitive application process– Nonprofits are eligible grantees– Greater tenant protections– Demolition activities limited to 10%– Must expend 50% within 2 years, 100% within 3 years– 1% discount per property, 5% per grantee– Gut rehab must meet Energy Star for New Homes

Standard– Streamlined citizen participation

Neighborhood Stabilization Program

Eligible Uses (same as Round1):

– Financing Mechanisms (foreclosed homes and residential properties)

– Purchase and rehab (foreclosed or abandoned homes and residential properties)

– Land-Banks (foreclosed homes and residential properties)

– Demolition (blighted structures)

– Redevelopment as housing (demolished or vacant properties)

Neighborhood Stabilization Program Round 2 attempts to address the challenges

inherent in Round 1, by focusing on:– Regional approaches

– Geographic targeting (concentration of resources)

– Capacity to carry out activities

– Comprehensive planning

– Leveraging resources

– Public/private partnerships

– Rational use of land

– Interventions likely to succeed

– Requiring energy efficiency

NSP 2 has some challenges, but a good NSP 2 application has a real chance of becoming a successful neighborhood stabilization project!


Application threshold requirements:

– Average foreclosure need index score or vacancy risk index score of 18 for census tracts served

• Data available at http://www.huduser.org/nspgis/nsp.html

– Demonstrated organizational capacity (75 units in past 24 months)

– Income targeting (120%, with 25% to 50% AMI or below)

http://www.huduser.org/nspgis/nsp.html

http://www.huduser.org/nspgis/nsp.html

Neighborhood Stabilization Program Six Scoring Factors (plus past performance)

– Up to 150 points

– Minimum of 115 points required for funding

– HUD may make adjustments

Factor 1: Need/Extent of the Problem (40 pts)

– Target geography (threshold factor) (10 pts)

– Market conditions (30 pts)• Absorption rate/months of inventory

• Income characteristics

• Housing cost burden

• Cause of the problem

• Identify NSP activities most likely to stabilize


Factor 2: Demonstrated capacity of applicant and staff (40 pts)

– Past experience (30 pts)

• Past 24 months

• Skills of your staff

• Results

– Management structure (10 pts)

• Include references


Factor 3: Soundness of approach (45 pts)

– Proposed activities (15 pts)

– Project completion schedule (5 pts)

– Income targeting (5 pts)

– Continued affordability (5 pts)

– Consultation, outreach, communication (5 pts)

– Performance and monitoring (10 pts)


Factor 4: Leverage or removing substantial negative effects (10 pts)

– Strictly quantitative

– All scores will be indexed, top third in either category will receive maximum points, second third will receive 5 points, bottom third will receive zero points

– Leverage = firm commitments/NSP 2 funds

• Cash, in-kind, donated land or services

• No sweat equity or mortgages to homebuyers

– Removal of negative effects = (Units acquired and rehabbed + units demolished)/total vacant residential units in target area


Factor 5: Energy efficiency and sustainable development (10 pts)

– Accessibility to transit (4 pts)

– Green building standards (3 pts)

– Reuse of all NSP sites (1 pt)

– Deconstruction (1 pt)

– Other sustainable development factors (1 pt)


Factor 6: Neighborhood transformation and economic opportunity (5 pts)

– Consistency with a comprehensive, regional, or multi-jurisdiction plan

– Demonstrate how NSP activities relate to and increase the effectiveness of the plan(s)

Neighborhood Stabilization Program Environmental reviews

– Nonprofits applying without a government entity as a co-applicant must rely on HUD to perform environmental reviews

– If a government entity is part of the consortium application, they must complete environmental reviews in their jurisdictions

The strongest application = a regional consortium that includes local government serving each target area and includes nonprofit and/or for/profit partners with demonstrated capacity

National Community Stabilization Trust A joint venture launched in 2008 and sponsored by:

– Enterprise Community Partners

– Housing Partnership Network

– LISC

– National Urban League

– National Council of La Raza

– NeighborWorks America

The Stabilization Trust facilitates the transfer of foreclosed and abandoned property from financial institutions nationwide to localities to promote neighborhood stability.

Creates a bridge between two worlds – the financial institution servicer/REO departments and state and local housing providers.

National Community Stabilization Trust Transfer Properties - Facilitate the Effective

Transfer of Foreclosed and Abandoned Properties to Localities

Financing - Provide Debt and Equity Financing to Support Local and State Efforts

Capacity Building - Organize and Facilitate Local Collaborations Working Through the Sponsor Organizations

Focal Point - Serve as an Industry “Voice” for Foreclosures and Neighborhood Stabilization

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Transfer Foreclosed Properties without the Trust

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Transfer Foreclosed Properties with the Trust

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Community Community Community Community

Thank You

For More Information:

Sarah M. Greenberg

NeighborWorks America

[email protected]

[email protected]

mailto:[email protected]

Key Features of NSP 2 Beyond the Neighborhood Stabilization Program Training Session Reclaiming...

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