Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
Exhibit 3
L' XII1D11 D City ofMiami Aeon Plan FY2008-2009 City of Miomi Deportment of Community Development TABLE OF CONTENTS THE NSP SUBSTANTIAL AMENDMENT.........................................................................2 A. AREAS OF GREATEST NEED...................................................................................2 Graph 1.- Properties undergoing foreclosure proceedings ......................................... 3 Graph 2.- Sub -prime Mortgages......................................................................................... 4 Graph 3.- Foreclosure Risk Levels....................................................................................... 4 Graph 4.- Areas of Greatest Needs derived by overlaying all 3 datasets .................... 6 Graph 5.- Isolating the Areas of Greatest Need............................................................... 7 Graph 6.- Income Eligibility Status......................•.............................................................. 8 Graph 7.- Abandoned Properties........................................................................................ 9 Table 1. - Areas of Greatest Need by Census Block Group...........................................10 B. DISTRIBUTION AND USES OF FUNDS.....................................................................12 Table 2. - NSP activities to be implemented..................................................................13 C. DEFINITIONS AND DESCRIPTIONS..........................................................................13 BlightedStructure..............................................................................................................13 AffordableRents...............................................................•.................................................. 14 AffordabilityPeriod: ............................................................................................................ 14 Housing Rehabilitation Standards...................................................................................15 Foreclosed............................................................................................................................15 Abandoned...........................................................................................................................15 Current market appraised value......................................................................................15 LandBank.............................................................................................................................. 16 D. LOW INCOME TARGETING...................................................................................16 Table 3.- Low income Targeting.............................................................................•........16 E. ACQUISITIONS & RELOCATION..............................................................................17 F. PUBLIC COMMENT.............................................................................................17 G. NSP INFORMATION BY ACTIVITY.........................................................................18 Strategy "A" Establish financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties: ........................................................................ IS Strategy "B" Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes andproperties..................................................................................................................... 21 Strategy "C" LandBanking........................................................................................................................ 22 Strategy "D" Demolition............................................................................................................................ 23 Strategy "E" Redevelopment of Demolished or Vacant Properties ................................................. 24 NSP SUBSTANTIAL AMENDMENT CHECKLIST..............................................................27 ATTACHMENT "A": PUBLIC COMMENTS.................................................................31 ATTACHMENT "B": SF -424/ CERTIFICATIONS/ NEWSPAPER AD..............................55 FY2008-2009 Action Plan Amendment Amendment # 2008.1 THE NSP SUBSTANTIAL AMENDMENT Jurisdiction: City of Miami NSP Contact Person: George Mensah Web Address: Address: 444 SW 2 Avenue, 2 Floor www.miamigov.com/Communitvdevelopment Miami, FL 33130. Tel. (305)416-2080; Fax: (305)416-2090 loacres/reports E-mail:cmensah miami ov.com A. AREAS OF GREATEST NEED The Neighborhood Stabilization Program ("NSP") was created to provide emergency assistance to state and local governments to acquire and redevelop foreclosed upon properties that might otherwise become sources of abandonment and blight within our communities. The NSP provided a grant to the City of Miami ("City") to purchase foreclosed upon or abandoned homes and to rehabilitate, redevelop and resell, these properties in order to stabilize neighborhoods and stem the decline of house values of neighboring homes. This program is authorized under Title III of the Housing and Economic Recovery Act ("HERA") of 2008. The City was awarded $12,063,702 in Community Development Block Grant ("CDBG") dollars to implement this new program. In response to the unveiling of this new federal program, the Department of Community Development ("DCD") conducted a special Housing -Market Foreclosure Assessment to identify the areas most affected by the current housing crisis. The City study consisted of the following steps: 1. DCD staff analyzed the geographical distribution of home foreclosure proceedings'. This data set included properties that were already foreclosed upon and are currently owned by banks and properties that are undergoing foreclosure procedures (Graph 1). Note that the number of proceedings is fairly balanced and evenly scattered across City boundaries showing that the housing foreclosure problem is spread over the entire City and not only in certain pockets as it was originally thought. 2. DCD staff then proceeded to plot the "Foreclose Risk Level"2 dataset which is composed of a combination of factors including fallen home values, unemployment rate, percentage of loans that are of high cost, and the number of addresses vacant for at least 90 days (Graph 2). 3. In addition, the City plotted census block information where the total number of homes financed by sub -prime mortgages exceeded 50 percent of the total number of loans issued for the area (Graph 3). This dataset allowed us to confirm that the sub -prime market was indeed located in areas of lower economic prosperity where predatory lending is usually found. 4. Graph 4 combines the results of all three datasets utilized and the results show that there are areas where the datasets overlap. As such, the overlapping areas were classified as the "Areas of Greatest Needs." These areas are better depicted in Graph 5. ' Dataset obtained from RealtyTrac© - Dataset obtained from www.huduser.org. Sources include: OFHEO data on decline in home values as of June 2008 compared to peak home values since 2000; Federal Reserve Home Mortgage Disclosure Act (NMDA) data; Labor Department data on unemployment rates in places and counties as of June 2008; USPS data on residential addresses identified as being vacant for 90 days or longer. 2 Graph 1. - Properties undergoing foreclosure proceedings. I L 3 Graph 2. - Foreclosure Risk Levels Foreclosure Risk Levels City of Miami Foreclosure risk is rated 1 to 10'(10 representing the high level based on fallen home values, unemployement rate, percentage of loans that are high cost loans, and the nurr of addresses vacant for at least 90 days. / Graph 3. - Sub -prime Mortgages. Hom Leger Ml Graph 4. - Areas of Greatest Needs derived by overlaying all 3 datasets City of Miami Areas of Greatest Need Legend Foreclosure Risk Level 0 rLis Pendens 7 Bank Owned 8 9 10 Tracts with more than 50% High Cost Loans (HCL) Foreclosure risk is rated 1 to 90 (10 representing the highest level based on fallen home values, unemployement rate, percentage of loans that are high cost loans, and the number of addresses vacant for at least 90 days. 0 Graph 5.- Isolating the Areas of Greatest Need. Are Graph 6.- Income Eligibility Status HUD h I ncom Graph 7.- Abandoned Properties Abandoned Properties by Deterioration Level All Properties by District Legend Level (I =Lowest, S=Highest) 0 1 + 2 O 3 s► 4 • S Di9triet NuMber Numbolr of Properties 1 72 z �s1 3 83 4 132 5 294 �1 03 F 772 d t� 9 06 �1 03 F '0 % fbx'� .. f O �5r9d 9 Statistics show South Florida as one of the top five regions in the United States that was hit the hardest by the current housing foreclosure and financial crises. Within the past five years, property values sky rocketed as a result of a buying frenzy inspired both by investors trying to take advantage of appreciating housing market conditions and of homebuyers eager to be able to share in part of the American dream at any cost, lured by attractive, but deceiving financial instruments private lenders set in place to profit from the appreciating market. These facts paired with a large sub -prime mortgage loan market and a stagnant economy with high unemployment rates contributed to the large number of foreclosure proceedings we encounter today in the City of Miami. Many homeowners found themselves with mortgages that exceeded the equity on their properties. Based upon the data and projections utilized, arguably, most of the areas in the City of Miami could be considered under "great need" for some financial relief. Nevertheless, it is clear that the concentration of high foreclosure risk factors, sub -prime mortgage loans, and actual cases under foreclosure proceedings is located north of the Miami River as illustrated in Graph 5 above. As such, the City has catalogued this area and other pockets around the City that show similar trends as the "Areas of Greatest Need ."3 These areas will be targeted by the City and will be given priority in the allocation of NSP funding. Table 1 below shows the census tracts and census blocks that comprise the Areas of Greatest Need. Table 1. - Areas of Greatest Need by Census Block Group Census Percent of Low, Census Percent of Low, Block People <= Mod, Block People <= Mod, Group 120 AMI Middle Group 120 AMI Middle Eligible Eligible 1401.4-- 81.0% YES 2500.1 78.5% ' YES 1401.5 94.3% YES 2500.2 94.0% YES 14fl1.$ " 93,0% YES 2500.3 79:6% YES 1402.1 90.8% YES 2500.4 87.6% YES 1402.2 '' 89.0°Io YES 2500.5 27.3% NO 1402.3 100.0% YES 2600.1 96.3% YES 1501.1 92.9% YES 2600.2 $9.7% YES 1501.2 98.3% YES 2600.3 93.6% YES 1501.3: 96.511YES 2600.4 98:0% YES 1501.4 100.0% YES 2800.1 98.5% YES 1703.1 ; 87.0% YES ; , 2800.2>14.0% NO 1703.492.2% YES 2800 11 .3 97,8'1% YES 1802.1 75.9% YES, 2900.1 60.3% YES 1802.2 81L0% YES 2900.2 74.7% YES 1802.3 ` 80,3Jo YES 2900.3 60.3°10 YES 1901.1 97.5% YES 3003.1 93.8% YES 1901.2 86.{1% YES 3003.2 91,2010 ; YES 1901.3 94.3% YES 3003.3 88.1% YES • 1901.4 78,$°10 YES3004.1 72.8% 'i YES ' 1901.5 92.0% YES- 3004.2 92.9% YES 1903.4 ` 8613%, YES . 3100.1 ' 91.5% YES 1903.5 93.06/6 YES 3100.2 73.0% YES 1903.5` 96.2% YES 3100.3 93.06% YES 3 Criteria utilized: areas with Foreclosure Risk Levels of 7+ AND where sub -prime loans comprise more than 50 percent of the total loans issued in the census block. In addition, all areas with Foreclosure Risk Levels of 10. 10 1903.7 98.2% YES 3400.1 97.0% YES 1904.1 91.8% YES 3400.2 98.9°In„ YES 1904.2 90.7% YES 3400.3 56.5% YES 1904.3 91.4% YES 3400.4 83.0% ` YES 1904.8 87.2% YES 3601.1 98.0% YES 2001.1 93.6°10 YES 3601.2 99.7% YES 2001.2 90.4% YES 3601.3 100.0% YES 2001.3 83.4% YES 5001.1 75.1% YES 2001.4 94.9% YES 5001.2 81.6°1% YES 2003.3 89.2% YES 5001.3 72.4% YES 2003.4 96.4% YES 5001.4 83.9% YES 2004.1 93.0% `' YES 5001.5 71.9%' YES 2004.2 90.7% YES 5001.6 67.8% YES 2202.1` 80.3% " YES 5002.1 86.9°l0 YES 2202.2 82.7% YES 5002.3 82.5% YES 2202:3 90.4% YES 5100.1 87.5010 'YES 2202.4 67.5% YES 5100.2 82.6% YES 2202.5 72.5% YES 5100.3 75.2% YES 2202.6 82.5% YES 5100.4 88.5% YES 2300.1`_ 78.2°l0 YES 5100.5 95.5°10'` YES 2300.2 83.9% YES 5100.6 84.8% YES 2300.3 78.2% ;' YES 5401.1 89.9% YES 2300.4 81.3% YES 5401.2 85.4% YES 2300.5 90.8% YES 5401.3 861% YES 2300.6 93.0% YES 5401.4 79.3% YES 2401.1: 84.6% -• YES 5401.5 89.8°10'. YES 2401.3 97.3% YES 7200.1 64.4% YES 2401.4 91.6% YES 7200.2 89.3% YES 2401.5 86.8% YES Source: HUD NSP data Table 1 above shows the census block groups where more than 51 percent of the population in the area had incomes at or less than 120 percent of the Area Median Income (2000). This dataset assisted City staff to evaluate the eligibility of the census block's area benefit for low-, moderate- and middle-income households. In the census block groups where less than 51 % of the population is at or below 120% AMI, the City will only provide assistance to families whose incomes are at or below 120 AMI. If or when the City identifies a project for funding outside the Areas of Greatest Needs, justification shall be provided to the HUD field office for approval. 11 S. DISTRIBUTION AND USES OF FUNDS HUD's definition of an assisted household is "one that will receive benefits through the investment of federal funds, either alone or in conjunction with the investment of other public or private funds." A renter is benefited if the household or person takes occupancy of affordable housing that is newly acquired, newly rehabilitated, or newly constructed, and/ or receives rental assistance through a budget authority. A homebuyer is benefited if a home is purchased during the year. An existing homeowner is benefited if the home's rehabilitation is completed. Under all of these three scenarios of assistance, the dwelling unit must, at a minimum, satisfy Housing Quality Standards. One of the major challenges the City faces for the successful implementation of this program is household eligibility. Financial institutions are being more fiscally conscious when issuing new mortgage loans after witnessing the collapse of global financial markets in recent days due in part to the housing crisis the country is experiencing which was sparked by the overwhelming amount of bad debt accumulated. The NSP target market makes it even more challenging as the City deals with a clientele whose income levels make homeownership difficult to attain. The current financial crisis adds an additional tier to the already complex task the City has. Creative methods of leveraging and layered financing have allowed the City to be successful in offering programs that allow for low -to moderate -income families to achieve the American dream of homeownership. Solid partnerships with private lenders helped the City build the foundations for programs that provide lasting, life -changing events for our residents, such as owning their own house for their well being and that of their children. The success of the City's current First Time Homebuyer program is reflected in the fact that only one homebuyer out of over 300 residents who received assistance through the program in the past 5 years endured foreclosure proceedings due to a death in the family. NSP funds will be distributed through the implementation of five different strategies that cover different areas of housing and address both the rental and the homeownership market. The City is confident that a combination of these strategies will provide much needed relief to City neighborhoods most affected by the foreclosure crisis. Additionally, the City will work in conjunction with the private and public sectors to fine-tune such strategies to ensure an efficient implementation of the NSP program. To be effective, strategies need to be well defined and target a specific clientele. The City recognizes that not all strategies are going to be effective to all income levels; as such, the implementation of different strategies, for renters and ready -to -be homeowners, is what will create the right balance and permit the City to assist more low-, moderate-, and middle-income residents. The City is firm in its commitment to affordable housing and clearly understands and accepts its role in the implementation of the NSP program. As such, it has taken a pro -active approach and has projected its efforts through different strategies that will benefit the ones that need housing the most while stabilizing neighborhoods in the process. Priority in applying these strategies will be placed in the areas identified as of "greatest need". Currently, the Department of Community Development is in the process of gathering data and information regarding abandoned and foreclosed upon homes in those areas and it is bringing aboard a specialized team of industry professionals to assess, negotiate, manage, and monitor the progress of the NSP program. Along with a team of City underwriters, inspectors, and housing managers, the City is moving forward with the implementation of this program as the timeframe for committing NSP dollars is very demanding. 12 The City will implement the following activities, or a combination thereof, in order to provide housing opportunities to low-, moderate- and middle- income households and to maintain or improve the value of properties in the areas of greatest need. Table 2 shows the estimated amount of funding allocated to each strategy and the estimated number of units that will result from the successful completion of each activity. Table 2. — NSP activities to be implemented Activity/ Strategy Estimated Amount Estimated Units A Establish financing mechanisms for purchase and redevelopment of $2,100,000 21 foreclosed upon homes and residential properties. 1. Equity sharing program 2. Down payment assistance program B. Purchase and rehabilitate homes and residential properties that have $4,500,000 90 been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties. C. Establish land banks for homes that have been foreclosed upon. $1;$51,000 24 D. Demolish blighted structures. $700,000 included under strategy "c" E. Redevelopment of demolished or vacant properties. $1,706,332 12 Administration $1,206,370 - TOTAL: $12063,702;> 147 As under the regular CDBG program, the City may fund costs, such as reasonable developer's fees, related to NSP -assisted housing rehabilitation or construction activities. NSP funds may be used to redevelop acquired property for nonresidential uses, such as a public park, commercial use, or mixed residential and commercial use4. Program Income — Any program income generated by the sale, rental, redevelopment, rehabilitation, or any other eligible use that is in excess of the cost to acquire and redevelop (including reasonable development fees) shall be used in accordance with the provisions of Section 2301 of the Housing and Economic Recovery Act of 2008. C. DEFINITIONS AND DESCRIPTIONS Blighted Structure Policy LU -1.2.1 of the City of Miami's Comprehensive Plan defines "blighted neighborhoods" as areas characterized by the prevalence of older structures with major deficiencies and deterioration, high residential vacancies, widespread abandonment of property, litter and poor maintenance of real property. In addition, Slum is defined by Florida Statutes as an area which there is a predominance of buildings, residential or commercial, that are either deteriorated, dilapidated or by reason of obsolescence, is a detriment to the public health, safety, morals, or welfare. Florida Statutes 4 Federal Register Vol. 73, No. 194 Pg. 58337. 13 define "blight" as an area determined by the local government to have the characteristics of a slum area or one or more of the following characteristics: 1. Predominance of defective or inadequate street layout. 2. Faulty lot layout in relation to size, adequacy, accessibility, or usefulness. 3. Unsanitary or unsafe conditions. 4. Deterioration of site or other improvements. 5. Inadequate and outdated building density standards. 6. Tax or special assessment delinquency exceeding the fair value of the land. 7. Inadequate transportation and parking facilities; and 8. Diversity of property ownership or defective or unusual conditions of title. The City uses a combination of the two definitions above to define a "blighted structure." Affordable Rents The City defines "affordable rents" as rental payments that do not place unnecessary burden to households. The City of Miami will use HUD's income and rent limits which are updated on an annual basis to ensure that housing provided through the NSP program is affordable. Affordable means that monthly rents or mortgage payments including taxes and insurance do not exceed 30% of the monthly gross income of eligible households as indicated in the table below.- Table elow:Table 3. — Affordable Rents Household Income Level Affordable Rents Low Income and below, Equal to 30%.of the FY2408 Income Limits for 50% of HUD AMI Moderate Income Equal to 30% of the FY2008 Income Limits for 80% of HUD AMI Middle Income Equal to 30% of the FY2008 income Limits for 120% 1of HUD AMI AMI = Area Median Income However, for a homebuyer, the City will not limit an individual household's ability to devote more than 30 percent of its income for housing, if the mortgage lender(s) is satisfied that the household can afford mortgage payments in excess of the 30 percent benchmark. In such a situation, the total monthly debt obligation as a percentage of monthly income cannot be more than 45 percent. In the case of rental housing, the City will ensure that rents do not exceed those rental limits adjusted for bedroom size. Affordabilitv Period: The City will ensure that NSP -assisted properties remain affordable to households with incomes at or below 120 percent of AMI. The City will adhere to HOME program standards (see table below), but at its discretion may choose to apply a higher affordability period to NSP - assisted properties. The maximum affordability period, however, shall not be longer than 30 years. The City monitors affordability of all its projects and activities on an annual basis and ensures that housing units that were assisted with federal funding remain affordable for the full affordability period. 14 Amount Provided Minimum period of affordability in years Rehabilitation or acquisition of existing housing per unit amount of HOME funds: Under $15,000 5 $15,000 to $40,000 10 Over $40,000 or rehabilitation involving refinancing 15 New Construction or acquisition of newly constructed housing 20 Housing Rehabilitation Standards For rehabilitation purposes, all materials and workmanship shall conform to the requirements of the South Florida Building Code. In addition, the Department of Community Development ensures that all repairs necessary to bring the house to a decent, safe, and sanitary condition are performed. Foreclosed A property "has been foreclosed upon" at the point that, under state or local law, the mortgage or tax foreclosure is complete. HUD generally will not consider a foreclosure to be complete until after the title for the property has been transferred from the former homeowner under some type of foreclosure proceeding or transfer in lieu of foreclosure, in accordance with state or local law. Abandoned A home is abandoned when mortgage or tax foreclosure proceedings have been initiated for that property, no mortgage or tax payments have been made by the property owner for at least 90 days, AND the property has been vacant for at least 90 days. Current market appraised value The current market appraised value means the value of a foreclosed upon home or residential property that is established through an appraisal made in conformity with the appraisal requirements of the URA at 49 CFR 24.103 and completed within 60 days prior to an offer made for the property by a grantee, sub -recipient, developer, or individual homebuyer. 15 Land Bank A land bank is a governmental or nongovernmental nonprofit entity established, at least in part, to assemble, temporarily manage, and dispose of vacant land for the purpose of stabilizing neighborhoods and encouraging re -use or redevelopment of urban property. For the purposes of the NSP, a land bank will operate in a specific, defined geographic area. It will purchase properties that have been abandoned or foreclosed upon and maintain, assemble, facilitate redevelopment of, market, and dispose of the land -banked properties. If the land bank is a governmental entity, it may also maintain abandoned or foreclosed property that it does not own, provided it charges the owner of the property the full cost of the service or places a lien on the property for the full cost of the service. D. LOW INCOME TARGETING The estimated amount of funds appropriated or otherwise made available under the NSP to be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals or families whose incomes do not exceed 50 percent of area median income is approximately $4,737,750. This amount equals to about 39.3 percent of the total NSP allocation for the City of Miami. Thus, the City will be meeting the statutory requirement by allocating over 25 percent of NSP funding toward housing individuals and families whose income do not exceed 50 percent of area median income. The table below illustrates low income targeting by activity. Table 3.- Low Income Targeting Activity/ Strategy Estimated Target Low Amount Income have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties. For more detailed information regarding the activities/ strategies fisted above, please refer to Section G in this amendment. 16 E. ACQUISITIONS & RELOCATION All acquisitions made by the City of Miami will follow and meet all federal requirements for acquiring properties utilizing federal funds and will comply with all of the Uniform Relocation Act mandates. The City of Miami will take all precautions not to demolish any occupied low- and moderate- income housing unit as these types of projects usually involve relocation costs, which would divert funding from other activities that could potentially achieve similar or better results without having to involve occupied low -and moderate -income housing or any public housing structures. However, should it become necessary for the City to demolish such housing, all eligible residents will be relocated in accordance with Section 104 or the Uniform Relocation Act. F. PUBLIC COMMENT The Department of Community Development duly advertised to the general public through a newspaper of general circulation the availability of the NSP substantial amendment and solicited comments from City residents. The comment period, as defined by NSP regulations, is of 15 -days. The NSP substantial amendment was available through the Department's website and at the offices of the Department of Community Development located at 444 SW 2 Avenue, 2 Floor, Miami, FL 33130 from October 29, 2008 to November 26, 2008. Please submit your comments in writing to: NSP Comment City of Miami — Department of Community Development 444 SW 2 Avenue, 2 Floor Miami, FL 33130 Attn.: Roberto Tazoe In addition to the availability of the NSP substantial amendment in its website and at the DCD reception, the City of Miami organized two public meetings where citizens had the opportunity to voice their support or concerns regarding the allocation of NSP dollars. Below is a summary of verbal comments received during the public meeting and of written comments submitted to the DCD. [Comments are found under Attachment "A"] 17 G. NSP INFORMATION BYACT/VITY Straten Y "A" Establish financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties: Providing or improving permanent residential structures that will be occupied by a household whose income is at or below 120% of area median income (LMMH). (2) Activity Type: Providing or improving permanent residential structures that will be occupied by a household whose income is at or below 120% of area median income. (3) National Objective: LMMH (Low -,Moderate -,Middle -Housing) (4) Projected Start Date: February 2009 (4. 1) Projected Commitment Date: August 2010 (5) Proiected End Date: February 2013 (6) Responsible Organization: City of Miami Department of Community Development 444 SW 2 Avenue, 2 Floor, Miami, FL 33130 Contact Information: Alfredo Duran, Deputy Director Phone #: 305-416-2080; email: aduran@miamigov.com (7) Location Description: Areas of Greatest Needs and other areas within City limits as determined by the Department of Community Development. (8) Activity Description: This strategy shall provide homeownership opportunities within the location description defined above. The City will be targeting households who do not exceed 120% of the area median income adjusted for family size. The City realizes that there may be households that may not qualify for this strategy as they may be affected by the current tighter financial restrictions imposed by private lending institutions. 1) Equity Sharing Program Provide shared -equity investment of no less than 20% of the purchase price to homebuyers purchasing a property in the City of Miami. The buyer locates an abandoned and/ or foreclosed upon residential property within City limits, meets with the bank holding title to the property and utilizes private lenders to be pre -qualified for a mortgage loan. The City of Miami inspects the property to ensure compliance with housing standards and underwrites the shared -equity investment based on all financial commitments provided to the homeowner. The City will process applications on a first- come, first -ready, first -serve basis taking in consideration any pre -established priority based on the "Areas of Greatest Need" assessment. If the City of Miami inspector determines that the property has code violations and/or is not meeting Housing Quality Standards as per 24 CFR 982.401, then the property must be purchased AND rehabilitated through the City's NSP -funded rehabilitation program before the buyer can start occupying such property. 2) Down Payment Assistance Program Provide zero percent (0%) deferred loans to homebuyers purchasing a property in the City of Miami. The buyer locates an abandoned and/or foreclosed upon residential property within City limits, meets with the bank holding title to the property and utilizes private lenders to be pre -qualified for a mortgage loan. The City of Miami inspects the property to ensure compliance with housing standards and underwrites the loan based on all financial commitments provided to the homeowner. The City will process applications on a first-come, first -ready, first -serve basis taking in consideration any pre -established priority based on the "Areas of Greatest Need" assessment. If the City of Miami inspector determines that the property has a code violation(s) and/or is not meeting the safe, sound, and sanitary standards, then the property must be purchased and rehabilitated through a City program before the owner can start occupying said premises. The following are eligibility requirements that apply to both the Equity Sharing and the Down Payment Assistance Programs described above. Eligible Properties: Abandoned or foreclosed upon single family residences, townhomes, and/ or condominiums. The property must be located within the City of Miami and must meet Housing Quality Standards as per 24 CFR 982.401. If the property is not meeting such standards, the property must undergo rehabilitation under the NSP -funded rehabilitation program. Eligible Buyers: The household income must be less than or equal to 120% of HUD's Area Median Income, adjusted for family size; the buyer must be able to afford a monthly payment based on income and debt; and the buyer must contribute at least $500 of personal funds toward the downpayment/ closing costs. The buyer must not hold title to another residential property at time of closing. Homebuyer Counseling_ Before obtaining a mortgage loan, eligible buyers must receive and complete at least 8 hours of homebuyer counseling from a HUD -approved housing counseling agency. Sales Price: Homes must be purchased at a discount from the current market appraised value of the property, taking into consideration its current condition. The appraisal shall be completed within 60 days prior to an offer made for the property by the homebuyer. Loan Terms (Down Payment Assistance Program Only): The maximum amount of assistance shall be the amount necessary to meet the lender's underwriting criteria. The loan will carry a 0% non -amortizing rate for a 30 -year deferred payment period. Payment of principal will be forgiven at the end of maturity period provided that the homeowner resided in the house as their primary residence. Security: The loan will be secured by a mortgage on the property. First Mortgage Restrictions: Term of the loan must be 30 years. fixed interest rate & cannot exceed more than 150 basis points over Freddie Mac's weekly average 30 -year rate, as published in the Primary Mortgage Market Survey ("PMMS"); no prepayment penalties; Total percentage charged for Discount, Origination & Broker fees must not exceed 2 points; all other lending fees must be reasonable and cannot exceed $500 or 0.5% of the loan amount, whichever is less. Resale Restrictions..- If estrictions:If the owner sells and/ or transfer the house prior to the end of the City's mortgage term, the following provisions will apply: 19 1. The sale of the property must be pre -approved by the City, and the new buyers must meet the program's income limits in effect at the time AND the sales price must not exceed the maximum affordable sales price in effect at the time. 2. Applicable to Down Payment Assistance Program Only. For any "early" sale or transfers, the City shall share in any gain realized, based on its pro -rated share of participation in the original purchase. Furthermore, if the sale occurs within the first 3 years, the City shall keep 100% of its pro -rated share of the "gain", from year 3 up to year 20, the City's share of its pro -rated "gain" shall decrease by 5% every year, while in turn, the owner's share shall increase by 5% each year. At year 20 up to the City's loan maturity, the owner shall retain 100% of the City's gain. 3. Applicable to the Equity Sharing Program Only. For any "early" sale or transfer3, the City shall share in any gain realized, based on its pro -rated share of participation in the original purchase. A 30year affordability period will be applicable under this strategy. 4. The above shared gain proposal terminates in the event of a foreclosure, with the lender required to provide the City the right of first refusal to purchase the loan at a negotiated price. In the case of a foreclosure, the City will recapture any amount of net proceeds available for the sale of the property3. These same restrictions apply to the Equity Sharing Program. NSP -Funded Rehabilitation Program The objective of this program is to prevent moderately declining neighborhoods in the City from further deteriorating by supporting the principles by which the NSP program was created and by providing an avenue to achieve decent, safe, and sanitary conditions. Eligible rehabilitations All repairs necessary to bring the house to a decent, safe, and sanitary condition. Eligible properties Abandoned or foreclosed upon single family residences, townhomes, and/ or condominiums with a buyer applying through Strategy A.1 or A.2 as explained above. The property must be located within the City of Miami. (9) Total Budget: $2,100,000 (10) Performance Measures: 21 Housing units The following are projected numbers. The City will try to target this program to the Areas of Greatest Needs and to all income levels with the understanding that will be extremely challenging to have a low- income (or below) household, under current financial conditions, qualify for a mortgage loan. Income Level Projected Estimated Housing Units Amount Less than 50 percent AMI` 1 $100,000;00 Between 51-80 percent AMI 5 $500,000.00 Between 81=120 percent AMI 15 $1,500,000:00 TOTAL: 21 $2,100,000.00 5 Any pro -rated share of participation (program income) received prior to July 30, 2013 shall be reinvested on NSP eligible activities. If the program income is realized after July 30, 2013, such gain shall be returned to the treasury. 20 Strateav "B" Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties. (2) Activity Type: Providing or improving permanent residential structures that will be occupied by a household whose income is at or below 120% of area median income. (3) National Obiective: LMMH (Low -,Moderate -,Middle -Housing) (4) Projected Start Date: February 2009 (4. 1) Projected Commitment Date: August 2010 (5) Projected End Date: February 2013 (6) Responsible Organization: City of Miami Department of Community Development 444 SW 2 Avenue, 2 Floor, Miami, FL 33130 Contact Information: Alfredo Duran, Deputy Director Phone #: 305-416-2080; email: aduran@miamigov.com (7) Location Description: Areas of Greatest Needs and other areas within City limits as determined by the Department of Community Development. (8) Activity Description: Purchase and Rehabilitation Program of Multi -Family Units This program allows for the City to purchase or provide assistance fully or in partially for the purchase of abandoned and/or foreclosed upon multi -family structures and rehabilitate them, if necessary, to meet the requirements of the South Florida Building Code. This activity may be designated as a rental activity, homeownership activity or a combination of both. All units, or a pro -rata share of them, shall be rented to low income families whose income does not exceed 50% of HUD's Area Median Income adjusted for family size. (9) Total Budget: $4,500,000 (10) Performance Measures: 90 Housing units The following are projected numbers. The City will target this program to the Areas of Greatest Needs and to low- and moderate -income households. Income Level Projected Estimated Housing Units Amount Less`.than�50 percent AMI 80 $4,0OO,�i00.OQ Between 51-80 percent AMI 10 $500,000.00 Between 81-'120 percent AMI- $0.6b TOTAL: 90 _ $4,500,000.00 6 If the City chooses to determine the discount for each purchase transaction through the use of a methodology, the average purchase discount shall be at least 10%, taking into consideration likely `carrying costs' if the City were not to sell the property. If not, the minimum average discount shall be at least 15%. 21 Strategy "C" Land Banking (2) Activity Type: Area Benefit. Benefits all residents of a primarily residential area in which at least 51 percent of the residents have incomes at or below 120% of area median income; OR providing or improving permanent residential structures that will be occupied by a household whose income is at or below 120% of area median income. (3) National Obiective: LMMA (Low -,Moderate -,Middle -Area) (4) Proiected Start Date: February 2009 (4.1) Projected Commitment Date: August 2010 (5) Projected End Date: February 2013 (6) Responsible Organization: City of Miami Department of Community Development 444 SW 2 Avenue, 2 Floor, Miami, FL 33130 Contact Information: Alfredo Duran, Deputy Director Phone #: 305-416-2080; email: aduran@miamigov.com (7) Location Description: Areas of Greatest Needs and other areas within City limits as determined by the Department of Community Development. (8) Activity Description: The City will purchase? properties that have been foreclosed upon and will provide the proper maintenance to such property/ land in an effort to protect the surrounding property values from devaluating. This strategy shall be utilized whenever applicable with Strategy "D". (9) Total Budget: $1,851,000 (10) Performance Measures: 24 Housing units The following are projected numbers. The City will target this program to the Areas of Greatest Needs and to low-, moderate- and middle-income households. Income Level Projected Estimated Housing Units Amount Less than 50. percent AMI' . ' 6 $462;750.00,' Between 51-80 percent AMI 6 $462,750.00 Between 81-120.percent AMI 12 $925,500.00 TOTAL: 24 $1.851.000.00 7 If the City chooses to determine the discount for each purchase transaction through the use of a methodology, the average purchase discount shall be at least 10%, taking into consideration likely `carrying costs' if the City were not to sell the property. If not, the minimum average discount shall be at least 15%. 22 Strategy "D" Demolition (2) Activity Type: Area Benefit. Benefits all residents of a primarily residential area in which at least 51 percent of the residents have incomes at or below 120% of area median income; OR providing or improving permanent residential structures that will be occupied by a household whose income is at or below 120% of area median income. (3) National Obiective: LMMA or LMMH (Low -,Moderate -,Middle -Area or Housing) (4) Projected Start Date: February 2009 (4. 1) Proiected Commitment Date: August 2010 (5) Projected End Date: February 2013 (6) Responsible Organization: City of Miami Department of Community Development 444 SW 2 Avenue, 2 Floor, Miami, FL 33130 Contact Information: Alfredo Duran, Deputy Director Phone #: 305-416-2080; email: aduran@miamigov.com (7) Location Description: Areas of Greatest Needs and other areas within City limits as determined by the Department of Community Development. (8) Activity Description: The City of Miami will utilize NSP funding to demolish "blighted structures" within City limits. (9) Total Budget: $700,000 (10) Performance Measures: 24 Housing units (included in Strategy C) The following are projected numbers. The City will target this program to the Areas of Greatest Needs and to low-, moderate- and middle-income households. Income Level Projected Estimated Housina Units Amount Between 51-80 percent AMI 6 175, 000.00 TOTAL: 24 $700,000.00 23 Strategy "E" Redevelopment of Demolished or Vacant Properties (2) Activity Type: Providing or improving permanent residential structures that will be occupied by a household whose income is at or below 120% of area median income. (3) National Objective: LMMH (Low -,Moderate -,Middle -Housing) (4) Projected Start Date: February 2009 (4.1) Proiected Commitment Date: August 2010 (5) Projected End Date: February 2013 (6) Responsible Organization: City of Miami Department of Community Development 444 SW 2 Avenue, 2 Floor, Miami, FL 33130 Contact Information: Alfredo Duran, Deputy Director Phone #: 305-416-2080; email: aduran@miamigov.com (7) Location Description: Areas of Greatest Needs and other areas within City limits as determined by the Department of Community Development. (8) Activity Description: The City of Miami will acquire$ abandoned properties or properties that have been foreclosed upon and demolish the sub -standard unit, if applicable, and reconstruct a new housing unit on the same lot. Under this program, the City will purchase or provide assistance for the purchase of the property to be reconstructed, demolish the structure, and build a brand new unit to be sold to a low -moderate or middle income household. The buyer utilizes one of the participating lenders to be pre -qualified for a mortgage loan. The City of Miami underwrites the loan based on the first mortgage lender's commitment. The City only accepts applications from participating lenders and they are processed on a first-come, first -ready, first -serve basis taking in consideration any pre -established priority based on the "Areas of Greatest Need" assessment. Eligible Buyers: The household income must be less than or equal to 120% of HUD's Area Median Income, adjusted for family size; the buyer must be able to afford a monthly payment based on income and debt; and the buyer must contribute at least $500 of personal funds toward the downpayment/ closing costs. The buyer must not hold title to another residential property at time of closing. Sales Price: The City of Miami shall sell the home in an amount not to exceed the total cost of the combined purchase and redevelopment of the property. The City will purchase abandoned or foreclosed upon properties at a discount from the current market appraised value, taking into consideration the home's current condition and work with the buyer to find the home that best fits the buyer's needs. B If the City chooses to determine the discount for each purchase transaction through the use of a methodology, the average purchase discount shall be at least 10%, taking into consideration likely `carrying costs' if the City were not to sell the property. If not, the minimum average discount shall be at least 15%. 24 Loan Terms: The maximum amount of assistance shall be the amount necessary to meet the lender's underwriting criteria. The loan will carry a 0% non -amortizing rate for a 30 -year deferred payment period. Payment of principal will be forgiven at the end of maturity period provided that the homeowner resided in the house as their primary residence. Security: The loan will be secured by a mortgage on the property. First Mortgage Restrictions.- Term estrictions:Term of the loan must be 30 years. fixed interest rate & cannot exceed more than 150 basis points over Freddie Mac's weekly average 30 -year rate, as published in the Primary Mortgage Market Survey ("PMMS"); no prepayment penalties; Total percentage charged for Discount, Origination & Broker fees must not exceed 2 points; all other lending fees must be reasonable and cannot exceed $500 or 0.5% of the loan amount, whichever is greater. First Mortgage Restrictions: Term of the loan must be 30 years. fixed interest rate & cannot exceed more than 150 basis points over Freddie Mac's weekly average 30 -year rate, as published in the Primary Mortgage Market Survey("PMMS"); no prepayment penalties, Total percentage charged for Discount, Origination & Broker fees must not exceed 2 points; all other lending fees must be reasonable and cannot exceed $500 or 0.5% of the loan amount, whichever is less. Resale Restrictions: If the owner sells and/ or transfer the house prior to the end of the City's mortgage term, the following provisions will apply. - 1 . pply:1. The sale of the property must be pre -approved by the City, and the new buyers must meet the program's income limits in effect at the time AND the sales price must not exceed the maximum affordable sales price in effect at the time. 2. For any "early" sale or transfer9, the City shall share in any gain realized, based on its pro -rated share of participation in the original purchase. Furthermore, if the sale occurs within the first 3 years, the City shall keep 100% of its pro -rated share of the "gain", from year 3 up to year 20, the City's share of its pro -rated "gain" shall decrease by 5% every year, while in turn, the owner's share shall increase by 5% each year. At year 20 up to the City's loan maturity, the owner shall retain 100% of the City's gain. 3. The above shared gain proposal terminates in the event of a foreclosure, with the lender required to provide the City the right of first refusal to purchase the loan at a negotiated price. In the case of a foreclosure, the City will recapture any amount of net proceeds available for the sale of the property3. (9) Total Budget: $1,706,332 (10) Performance Measures: 12 Housing units The following are projected numbers. The City will target this program to the Areas of Greatest Needs and to middle-income households. 9 Any pro -rated share of participation (program income) received prior to July 30, 2013 shall be reinvested on NSP eligible activities. If the program income is realized after July 30, 2013, such gain shall be returned to the treasury. 25 Income Level Projected Estimated Housing Units Amount Less than 50 percent AMI - $0.00 Between 51-80 percent AMI - $0.00 Between 81-120 percent AMI 12 $1,706,332.00 TOTAL: 12 $1,706,332.00 26 NSP Substantial Amendment Checklist For the purposes of expediting review, HUD asks that applicants submit the following checklist along with the NSP Substantial Amendment and SF -424. Contents of an NSP Action Plan Substantial Amendment Jurisdiction(s): City of Miami NSP Contact Person: George Mensah Address: 444 SW 2 Avenue, 2 Floor Jurisdiction Web Address: Miami, FL 33130 www.miamipov.com/communitvdevelooment/ Telephone: 305-416-1978 pages/reports Fax: 305-416-2090 Email: gmensah@miamigov.com The elements in the substantial amendment required for the Neighborhood Stabilization Program are: A. AREAS OF GREATEST NEED Does the submission include summary needs data identifying the geographic areas of greatest need in the grantee's jurisdiction? Yes® No❑. Verification found on page 1,910 . B. DISTRIBUTION AND USES OF FUNDS Does the submission contain a narrative describing how the distribution and uses of the grantee's NSP funds will meet the requirements of Section 2301(c)(2) of HERA that funds be distributed to the areas of greatest need, including those with the greatest percentage of home foreclosures, with the highest percentage of homes financed by a subprime mortgage related loan, and identified by the grantee as likely to face a significant rise in the rate of home foreclosures? Yes® No[:]. Verification found on page 1,11,12 . Note: The grantee's narrative must address the three stipulated need categories in the NSP statute, but the grantee may also consider other need categories. C. DEFINITIONS AND DESCRIPTIONS For the purposes of the NSP, do the narratives include: • a definition of "blighted structure" in the context of state or local law, Yes® No❑. Verification found on page 12 . • a definition of "affordable rents," Yes® No❑. Verification found on page 13 . • a description of how the grantee will ensure continued affordability for NSP assisted housing, Yes® No[], Verification found on page 13. • a description of housing rehabilitation standards that will apply to NSP assisted activities? Yes® No❑. Verification found on page 13. D. INFORMATION BYACTiwTy 27 Does the submission contain information by activity describing how the grantee will use the funds, identifying: • eligible use of funds under NSP, Yes® No[]. Verification found on page 26-33 . • correlated eligible activity under CDBG, Yes® No❑. Verification found on page 26-33. • the areas of greatest need addressed by the activity or activities, Yes® No❑. Verification found on page 26-33. • expected benefit to income -qualified persons or households or areas, Yes® No❑. Verification found on page 26-33. • appropriate performance measures for the activity, Yes® No❑. Verification found on page 26-33 . • amount of funds budgeted for the activity, Yes® No❑. Verification found on page 26-33 . • the name, location and contact information for the entity that will carry out the activity, Yes® No❑. Verification found on page 26-33. • expected start and end dates of the activity? Yes® No❑. Verification found on page 26-33. E. SPECIFIC ACTIVITY REQUIREMENTS Does each activity narrative describe the general terms under which assistance will be provided, including: If the activity includes acquisition of real property, • the discount required for acquisition of foreclosed upon properties, Yes® No❑. Verification found on page 29,30,32 . If the activity provides financing, • the range of interest rates (if any), Yes® No❑. Verification found on page 27,32 . If the activity provides housing. • duration or term of assistance, Yes® No❑. Verification found on page 27,32 . • tenure of beneficiaries (e.g., rental or homeownership), Yes® No❑. Verification found on page 27,32,33 . • does it ensure continued affordability? Yes® No❑. Verification found on page 26,29.32 . • does the applicant indicate which activities will count toward the statutory requirement that at least 25% of funds must be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals and families whose incomes do not exceed 50% of area median income? • Yes® No❑. Verification found on page 28.29.30,31,33 . F. LOW INCOME TARGETING • Has the grantee described how it will meet the statutory requirement that at least 25% of funds must be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals and families whose incomes do not exceed 50% of area median income? Yes® No❑. Verification found on page 15 . • Has the grantee identified how the estimated amount of funds appropriated or otherwise made available will be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals or families whose incomes do not exceed 50% of area median income? Yes® No[:]. Verification found on page 15, 29 . Amount budgeted = $4,737,750 G. DEMOLISHMENT OR CONVERSION OF LOW- AND MODERATE -INCOME UNITS Does grantee plan to demolish or convert any low- and moderate -income dwelling units? Yes® Nor -1. (If no, continue to next heading) Verification found on page 31 . Does the substantial amendment include: • The number of low- and moderate -income dwelling units—i.e.,:5 80% of area median income—reasonably expected to be demolished or converted as a direct result of NSP - assisted activities? Yes® NO❑. Verification found on page 31 . The number of NSP affordable housing units made available to low-, moderate-, and middle-income households—i.e., <_ 120% of area median income—reasonably expected to be produced by activity and income level as provided for in DRGR, by each NSP activity providing such housing (including a proposed time schedule for commencement and completion)? Yes® No❑. Verification found on page 28,29,30,31,33 . • The number of dwelling units reasonably expected to be made available for households whose income does not exceed 50 percent of area median income? Yes® No❑. Verification found on page 28.29,30.31,33 . H. PUBLIC COMMENT PERIOD Was the proposed action plan amendment published via the grantee jurisdiction's usual methods and on the Internet for no less than 15 calendar days of public comment? Yes® No❑. Verification found on page 16 . Is there a summary of citizen comments included in the final amendment? Yes® No[-] Verification found on page 16-25 . L WEBSITE PUBLICATION The following Documents are available on the grantee's website: • SF 424 Yes® No❑ • Proposed NSP Substantial Amendment Yes® No❑ • Final NSP Substantial Amendment Yes® No❑ • Subsequent NSP Amendments Yes® No❑ Website URL: www.miamigov.com/communitvdevelopment/pages/Reports/ 29 K. CERTIFicATIoNs The following certifications are complete and accurate: (1) Affirmatively furthering fair housing Yes® No❑ (2) Anti -lobbying Yes® No❑ (3) Authority of Jurisdiction Yes® No❑ (4) Consistency with Plan Yes® No❑ (5) Acquisition and relocation Yes® No❑ (6) Section 3 Yes® No❑ (7) Citizen Participation Yes® No❑ (8) Following Plan Yes® No❑ (9) Use of funds in 18 months Yes® No[:] (10) Use NSP funds <_ 120 of AMI Yes® No❑ (11) No recovery of capital costs thru special assessments Yes® No[:] (12) Excessive Force Yes® No❑ (13) Compliance with anti -discrimination laws Yes® No[:) (14) Compliance with lead-based paint procedures Yes® No[:] (15) Compliance with laws Yes® No❑ 30 ATTACHMENT "A": Public Comments Comments from Public Meeting November 12, 2008 Charles Hadley Park Black Box Theater 1300 NW 50" Street Miami, FL The following is a synopsis of citizen comments at the public meeting. This is not a verbatim transcription of the meeting. Comment #1 Mr. Leroy Jones, Neighbors and Neighbors Association, Inc. ■ Mr. Jones wants to assist small businesses by utilizing monies collected from the sale of foreclosed upon or abandoned commercial properties bought with NSP funds or by utilizing monies collected from the payment of City liens that could be placed on the property to recover demolition or other such costs by setting aside collected monies in a fund for projects that support small businesses. Mr. Jones requested staff to ask HUD about this scenario. Mr. Jones later proceeded to clarify his proposed use of collected monies as a situation where the City uses NSP funds to demolish or lien a commercial property. The City could collect any profit made from the repayment of the NSP monies originally invested for this project and some of that could be used for the commercial community. City Response: The City will ask HUD if Mr. Jones proposed usage is allowed under NSP regulations. Comment #2 Mr. Keith Carswell ■ Mr. Carswell asked if the City looked at properties with homestead exemptions. Mr. Carswell is concerned about NSP funding assisting investors and not homeowners. City Response: The NSP program is geared toward purchasing foreclosed upon properties. Whether the actual owner lived in the foreclosed upon property or not, this property is having a detrimental effect in our communities. ■ Mr. Carswell also noted that the City of Miami's proposed plan talks about moderate and middle income households which exceed the income limits set up by HUD. City Response: HUD created a new income category for the NSP program called middle-income, which is from 80 to 120 percent of AMI. 31 ■ For CBO participation, is there going to be an RFQ issued? City Response: Yes. That will happen during the implementation stage. Comment #3 Mr. Max Rameau Mr. Rameau wanted to know what was the AMI (Area Median Income) the City was going to use for the NSP program. City Response: $49,200 Mr. Rameau had a question on the amount of funding allocated to the activities outlined in the plan. He stated that strategy "E" was going to result in 5 houses at a cost of $140,000 each while strategy "B", which is for rehabilitating existing places, would cost an estimated $50,000 per unit. Mr. Rameau suggested that instead of using the $700,000 for building 5 houses under strategy "E", the City should use the $700,000 and rehabilitate additional units under strategy "B". Mr. Rameau believes that allocating monies to strategy "E" would be a poor use of funds because of the time it will take to rebuild a home and because the replacement program has not been successful in the past. City Response: CD Director agrees with Mr. Rameau observation; nevertheless, he pointed out that the replacement housing program has been successful. Citizen commented that only $2.1 million from strategy "A" is being earmarked to place people in homes. Mr. Rameau complained that the City has set aside more dollars under strategy "B" (land banking), approximately $2.8 million, which will create vacant lands and vacant homes for up to 10 years, but only $2.1 million to place people in homes. Citizen wants more direct assistance to help families get into homes. Citizen wishes to have no money allocated to strategy "E" and stated that the City should not be in the business of buying and keeping vacant homes. City Response: The City has $6.2 million for placing people in homes under two separate strategies (from the Proposed NSP plan). In addition, City staff explained that the land banking strategy is necessary because it will allow the City flexibility when properties, due to current market conditions, cannot be sold immediately. DCD staff indicated to Mr. Rameau that the amounts laid out on the plan were estimates and that, if one strategy proved to be more effective than any other, then the City would be able to amend its plan and move funding to the strategy that is performing better. Comment #4 Mr. Don Horne ■ Mr. Horne commented that areas discussed in the plan were laid out by census block groups, but it would be more helpful to him and to other residents to have the areas laid out by zip code. 32 City Response: The City will create a map with the zip code information and post it on its website. ■ All things being equal between people applying for a loan, what determines or what is the criterion for deciding whether a home in Little Havana, Model City or Little Haiti is refurbished and given to the client? There is not an extensive criterion. Who determines it and how it is done. What is the criterion if both properties are located in an Area of Greatest Need? City Response: Priority will be given to properties located in Areas of Greatest Need. If both properties are located in an Area of Greatest Need, then it will be treated on a first-come first -serve basis. ■ What is a unit? Is it a single family home, an apartment, an apartment building? City Response: A unit is a single family home or an apartment. It is not a building. ■ What is the affordability period? City Response: The affordability period will be for a minimum of 20 years. ■ Who will be doing the renovations? Of the $4.5 million under strategy "B", a lot of those monies will go to contractors for building the units? City Response: Most of the monies will go toward the purchasing and to contractors to rehabilitate the units. ■ If so, what is $1.2 million dollars of administration going to cover? If they are doing the work, what is the City going to do? City Response: Every City program has an administration (cost) attached to it. There is a cost for searching for foreclosed upon or abandoned properties, there is a cost for the appraisals, and so forth. ■ Citizen mentioned that numbers (dollar amounts allocated for each strategy) needed to be re- worked. The Director of CD requested the citizen to submit his comments in reference to the dollar allocation for each strategy in writing. Comment #5 Name not captured. ■ Citizen cited page 10 of the proposed NSP plan, which states that all acquisition must be done by the City of Miami. Citizen presumed that this referred directly only to strategy "B", Purchase and Rehabilitation of homes and residential properties, for $4.5 million. City Response: The acquisition and relocation guidelines relate to all strategies. ■ Citizen thought that NSP regulations clearly stated that units needed to be vacant for 90 days. 33 City Response: Abandoned properties need to be vacant for 90 days. The City will try not to acquire properties that are occupied; however, if there is the need to purchase a property that is occupied, the City will abide by all rules and regulations regarding acquisition and relocation set forth by the federal government. • Citizen cited page 12 of the proposed NSP plan, under Strategy "A", which states that buyers locate abandoned and/ or foreclosed upon residential properties within City limits, meet with the bank holding title to the property, etc. If City of Miami has to do the appraisal 60 days prior to the buyer making the offer for the property, how is this going to work? City Response: The appraisal needs to be done at least 60 days in advance; prior to submitting an offer, prior to having a contract. It is something that the City does not have control over as it is a requirement of the program. ■ What is the estimated time for the implementation plan criteria available as there has to be something more detailed as to how we will be using those monies. What is the estimated time for HUD to approve the NSP plan? City Response: Before we get into that, we have to first make sure that HUD agrees with what is being laid out in the plan and approves it. The deadline for HUD to approve the plan is February 13th 2009. Comment #6 Mr. Grady Muhammad Grady Muhammad Associates Investments ■ Mr. Muhammad commented that, in reference to purchasing apartments and others, the City should potentially look at using those properties as potential homeowner qualification -ready programs for renters who in two years will be able to move into homeownership. In addition, he also stated that on a case-by-case basis the City should bring down the maximum sales price of $236,000 (established by the City of Miami as a sales price ceiling for its down payment assistance program) as this is maintaining the high sales price in our communities. ■ When you purchase, are you going to purchase from some of the developers at $236,000 when the City gave these developers land. Is this a bail out for those developers? City Response: The requirements of the program state that you cannot sell the properties at a profit. The sale price of the property cannot be more than the cost of purchasing the property plus the rehabilitation cost. Comment #7 Mr. Schiller Jerome ■ Mr. Jerome commented that the City could have done a better job as far as explaining the program to the community. He indicated that there was a lot of information not provided to the public. He stated that one of the comments Mr. Leroy Jones stated earlier was 'half -right'. He 34 said that the City was correct to indicate that the NSP funds could not be used for commercial purposes, but that the program income could be used if the City of Miami changed its plans on what the City plans to do. Mr. Jerome proceeded to say that he had confirmed this information with Mr. David Noriega from HUD. City Response: The Director stated that as far as he is aware of and as far as it was explained on the NSP regional training in Ohio, the funds cannot be used for any activity that it is not laid out in the federal register. ■ Mr. Jerome stated that the register did say that it allows for mixed use. City Response: The Director stated that 'mixed-use' is not what he heard Mr. Jones mention earlier. Mr. Mensah stated that Mr. Jones said to give the monies to the business community so that they can prosper. Mr. Mensah reiterated that the City cannot use the money for a business as NSP is primarily a housing program. He proceeded to ask Mr. Jerome to submit comments. Mr. Jerome also stated that the City is correct to say that the entire City should be considered an Area of Greatest Need, nevertheless, by taking into consideration the AMI, subprime lending, and foreclosures, the area north of Little River is the most affected. As such there should be a percentage from the City to be used in these areas. City Response: It is not prudent for the City to say that 90 percent of the monies will be used in this area or 30 percent will be used in that area. Mr. Mensah suggested that concerned citizens could voice their opinion in the City commission public hearing, but that it was not prudent for him to indicate that. Comment #8 Mr. Mariano Cruz Mr. Cruz stated that tomorrow, November 13, 2008, he would be at the commission meeting and he voiced his opinion on many topics regarding CDBG. He stated that he did not feel sorry for the foreclosures on people as he has lived 40 some years in his house and raised three children. Mr. Cruz said that has heard people say that they have paid $400,000 for their homes of 5 bedrooms and 4 bathrooms and questioned whether they needed that much space for a family consisting of three people. He reiterated that he did not feel sorry for them, that it was not the banks, but the people. Mr. Cruz said that he could live in Pembroke Pines or in Pinecrest because he has the worth, but he chose to live in Allapattah. People want to live beyond their means and that's why he does not feel sorry for those going under foreclosure. Comment #9 Ms. Curl Smith ■ Ms. Smith discussed affordable rentals. 35 City Response: Staff asked Ms. Smith to provide her information to discuss this item on a personal basis as this is a forum for NSP related issues only. Comment #10 Mr. Roy Hardemon Mr. Hardemon stated that Model City Trust got into trouble for land banking, but that now under the NSP, land banking was ok. In the land banking that Model City created that now Liberty City Trust is working with the City, Mr. Hardemon stated that he wanted to see $1,000,000 of land banking monies (Strategy "C") committed to new construction on existing land they already had. City Response: CD Director stated that he had asked the following question to HUD and that he was waiting for an answer, "If the City already owns land, can any of these monies be used for redevelopment of this land? " Mr. Hardemon stated that Miami -Dade county is taking $8 million and earmarking it for new construction on the land for the Hope VI project. City Response: The City of Miami does not do things based on what Miami -Dade County does and clarified that Miami -Dade County is not the authority on how these funds are to be used. ■ Who is the team that puts this plan together? How come the County is doing that (providing funds for re -development of the HOPE VI project)? City Response: City staff, commission, discussions with the County and other Cities and jurisdictions. Each jurisdiction utilizes the funding in ways they feel is more appropriate. Mr. Hardemon wanted to see something more specific in the plan and stated that Mr. Mensah was very disrespectful as Mr. Hardemon was talking to him as a tax payer, as a community person and a commitment is what he wanted to see. Mr. Hardemon wanted to have the commitment written down in the proposed NSP plan and asked Mr. Mensah to place the commitment in the plan. He finished saying that all he was asking was $2 million to be allocated to the Liberty City area. City Response: Mr. Mensah stated that he understood what Mr. Hardemon was asking, to specifically allocate monies to a specific area. Mr. Mensah clarified that under his position it would be difficult to do that. When asked who has the authority to modify the plan before it went to commission, he stated that the City Manager would be the person who has the authority to do so. 36 Comment #11 Mr. Ken Knight Foreclosures don't only impact people who are undergoing foreclosures, but also current homeowners. He stated that it is important to look at the cost and the sub -prime market which caused the people to get into trouble. He said that some of the core issues for foreclosure have been the lack of money to rehabilitate housing; that there has to be money not only for the rehabilitation of foreclosed homes, but for existing homes. Enough money is not being spent in rehabilitation for homes in Liberty City. Foreclosures are being allowed because the people could not fix their homes. City Response This particular program cannot be used for existing homeowners. The last time the City opened the Single Family Rehabilitation program was October 2008 and only 80 people submitted applications. Mr. Knight stated that there were other 800 people who needed rehabilitation assistance and questioned whether as of today all applications submitted for Hadley had been processed. He also mentioned that it was by 'design' that the City only received 80 applications. City Response Mr. Mensah proceeded to ask Mr. Knight to help him market the program so that the City could receive more applications for rehabilitation. ■ Mr. Knight reiterated his point that if the City does not help fix the condition of current homes, homeowners would be in foreclosure as there is a direct correlation between the rehabilitation of homes and foreclosures. In addition, he stated that many of the loans issued were predatory in nature and that the City needed to invest monies in the area as residents are being victimized by predatory lending practices. City Response This particular funding source cannot be used for that purpose. The City of Miami is allocating $500,000 in SHIP monies to work in foreclosure prevention. ■ Mr. Knight stated that Florida leads the nation in mortgage fraud and that we need to have adequate funding. He stated that the City of Miami has to address the cost. 37 November 18, 2008 Manuel Artime Theater 900 SW 1"Street Miami, FL 33130 The following is a synopsis of citizen comments at the public meeting. This is not a verbatim transcription of the meeting. Comment #1 Mr. Mariano Cruz • Mr. Cruz wanted to know if there was any assistance for people who have already lost their homes (foreclosed upon). City Response The NSP program is to assist properties that have been foreclosed upon. This is not a foreclosure prevention program. • Is the City going to purchase the property or is it going to allow an individual to purchase the property directly from the bank and rehabilitate it or will the City buy it, create a land bank and then start a bidding process? City Response The City could purchase, the City could assist in the purchase (for an individual), the City could establish a land bank, etc. Comment #2 Mr. Mariano Quinones Mr. Quinones wanted to know why the City's NSP plan was not targeting people prior to them losing their homes. He also mentioned that there is an issue with code enforcement especially when poor people repair their homes. Mr. Quinones claimed that after the assistance is provided (by the City), the City's code enforcement inspectors do not follow the same standards when inspecting the same property, but rather they all have different concepts of what a violation should be. Mr. Quinones proceeded to state that the City has the right to inform the general public with ample time of the things that are happening in the City and said that the City always informs the public late and that there is no use of radio and television. Mr. Quinones said that the City is not helping anybody and that no one knows where the millions of dollars the City receives go. City Response The City of Miami has created a Foreclosure Prevention program which utilizes non-federal funding and it is a program that is different and separate from the Neighborhood Stabilization Program sponsored by HUD. Under this Foreclosure Prevention program, people that are in danger of losing their homes can apply for $7,500; however, this assistance is provided through approved mediators who will assist homeowners in negotiating with mortgage companies the payment of the homeowners' mortgage. 38 Comment #3 Mr. Roberto Datorre Miami Beach Community Development Corp. ■ Mr. Datorre wanted to know if the City was planning to leverage entitlement funding such as CDBG or HOME with NSP dollars. In addition, he asked if one of the strategies of the NSP program was going to mirror the existing homebuyer program being offered by the City and if there was an opportunity for non -for-profit agencies such as Miami Beach CDC to assist the City in working with potential customers. City Response Yes, the City is planning to leverage non -NSP dollars; Yes, the NSP downpayment assistance will be similar to the existing homebuyer program. The end benefit will go to a family that meets the income eligibility of the program, subject to the same criteria the City applies to the homebuyer program, ability to pay and such things; Yes, the City encourages the participation of not-for-profit agencies to bring potential customers with the properties to purchase. ■ Mr. Datorre also wanted to know if rental voucher programs or other programs such as the HOPWA Tenant Based Rental Assistance could benefit from the multi -family rental units that would result from the investment of NSP dollars. City Response The intention of the City is to use rental properties to meet the 25 percent of total NSP funding dedicated to households who are in the 50 percent or less of AMI. In addition, the City tries to maximize the assistance to low-, moderate-, and middle- income families and that placing a HOPWA household, which already receives subsidies, in one of the multifamily rental units rehabilitated using NSP monies, would cause a different family to lose the opportunity to be housed. ■ Are you working with banks, have you reached out to banks? City Response Yes, we have reached to banks, Fannie Mae, every possible source that we can access to successfully implement this program. Comment #4 Ms. Nicole Fiol ■ Ms. Fiol wanted to know what the next step was to be able to apply for the Downpayment Assistance program. City Response Staff directed Ms. Fiol to contact Mr. Sergio Garcia from the City of Miami for him to provide Ms. Fiol with detailed, step by step, information. 39 Comment #5 Mr. Nick Alvarez ■ Mr. Alvarez wanted to know which areas comprise the "Areas of Greatest Needs. Specifically, if Wynwood was part of such area. City Response Wynwood is part of that area, but all areas in the City will have the ability to participate. The only difference is that those properties located in the "Areas of Greatest Needs" will have priority over properties that are not located inside such areas. Comment #6 Ms. America Medina ■ Ms. Medina wanted to know if the NSP funds would also be used for abandoned businesses and if so, who would be eligible to purchase those businesses and what would be the criteria. City Response NSP funding could be utilized to demolish abandoned businesses. If the City decides to demolish an abandoned business, at this point there is no plan to rebuild that business. The City may decide to issue an RFP at a later date. ■ Before being rebuilt, would the residents in the community be informed of what is being planned to be built? City Response Yes ■ In reference to land use, before you make any changes to land use, would the residents in the area also be informed? City Response The zoning process typically provides for a notification in the neighborhood where the change will take effect. ■ Ms. Medina wanted to know, regarding the City's NSP strategy, if anything had been pre - planned for the area of Wynwood. City Response No, nothing has been pre -planned. Written Comments Carlisle Development Group November 12, 2008 To all NSP Grantees, Carlisle Development Group (Carlisle) would like to thank you for the opportunity to comment on the Neighborhood Stabilization Program. We are an affordable housing development company with knowledge and experience with a variety of different funding sources, the ability to work with local government and community groups, and the desire to implement the community's vision to create a sustainable neighborhood. Carlisle has established itself as a premiere partner for housing authorities, faith -based institutions, and local partners looking for professional, creative solutions to their unique housing needs. In the spirit of collaboration we would like to briefly comment on your community's proposed plan for Neighborhood Stabilization Program funds. Starting with the objectives of our recommendations (Desired Outcomes) and followed by the Suggestions listed below, it is our intent to be an active participant in the NSP program. Desired Outcomes: Maximize leverage: Stretch your NSP dollars. Minimize ongoing operating subsidies required. Avoid concentration of lower income residents in a single building or community. Encourage long term success of the very low (50% AMI or below) population. Stabilize the local housing market. Minimize the grantee's administrative burden. Suggestions: • Establish a Special Needs 2nd Mortgage Program. Utilize funds to provide second mortgages to eligible homebuyers. However, forgive second mortgages over time in return for homeowners opening their homes to 1-2 Special Needs population (Youths aging out of Foster Care, Elderly, Disabled, Homeless). • Supplement the nurturing environment provided by the homeowner family with formal case management and outcomes assessments through various social service agencies. A portion of the 10% Administration/Planning funds could be used to assist homebuyer counseling and social service agencies. • Allow one grantee with sufficient resources, experience and readiness to proceed to administer the majority of NSP funds. Concentrating funds will achieve better efficiency and minimize the grantee's administrative burden. • To maximize and allocate the funds in the required 18 -month timeframe, present a broad based plan to the State and HUD that includes all of the Eligible Activities allowed. • Encourage public/private partnerships and make funds available to non-profit and for-profit developers. • Encourage the utilization of funds for a variety of income levels. Combining income groups will reduce risks, improve outcomes, and foster life skills training and informal support networks. 41 If you would like more detail or should you or staff have any questions or comments, please do not hesitate to contact us. I appreciate the opportunity to comment and taking some of our recommendations under consideration. Thank you, Matthew Greer Matthew Greer Chief Executive Officer Matthew Greer mgreer(c�carlisledevelopmentgroup.com 2950 SW 27th Avenue, Suite 200 Miami, FL 33133 305-476-8118 Phone 305-476-9674 Fax Visit our website: www.carlisledevelopmentgroup.com 42 Tifv vrf ffiami ,x !Ir'CD'2G G.. i IrRNx' r)r7. P,.. $,, �• • `: i I '`•illi trcaaprr #3� Nove,iiber 19. 2008 Mr_ Aallhew Greer, CltiefFxecutive Officer Cmi-liAc I evolripment C irraip 2'}50 SW 2" .'-tu xluc:. Suite 200 Miim . FL 33133 Ref.: NeiehboTtlnod Stabilizutian t"rcl6tml SUbstanlial A mmidment to the FY1008-2009.kclion Plan D=r .14r_ Greer. Thalil: you for yaw oomineals mgwdingg the Nei ghborhocxl Smbiliziticlrl Pj,.gaam (�N ST'). the City of hiianl i and its I )cparirrl -nt L%f (.4m ltltl ni r...3 f )cwlopnletlt ("D(-.1)') sbam m ing Af tllc $; 3irod nulmm--s highlighted in tour letter and will iiet promptly and effmAivtly to addl'tss the hn usin r, tta,�ds of aur cJIItrdurLfiL'. Thrilugh its citinml purtiuipatiaa pmacess, the City rCC6VCd U LLLJmbcr of commmit5 uIri g wilb sue gestiurs If= residents, busirmm owners- for-llrcrlit and Load -for-profit Hie. BC:Ls has lv imed all suggestions rmcjwd tip m dsX ani will talkc theta into epnsideratinn pri-or to issuing it¢ Yu1al N'5P suhstanrial amendment trk tl, FY �W&zt109 Action Pl en_ The mal of iht City is t'D maximize the e!f-eet of NSP dollar, ilt our Liu*mm in itirs isad to eissure that the Areas of Gm dell Needs w. revil; h&- d ia. licalyd2ulc to the plan n£acticwi sct fi-mfi in the NSV dc[--un1cm 7ryou huve any qurstiuns, pleuse del not hesilatt in avila tint me aL 105-416-1978_ Sincerely. CA sWl,0r t)cpatrhis, it fCommunity 1)cv*,)npmcnt WFL TMIkN�)-i tlbi'NI �N:'IY IItL�F:(it'.VkNI 444 S.W ln.-1 Av<mu;. ::7r. Arm AUarni; rl::riri-,, N110 ;1-:1V ?: Far: ;115:=1:, I},,: M.-& ng At:c md: r;^.. ncx kin ;d:wm,; rt. '!: Yxi 43 [Submitted via e-mail] November 12, 2008 Public Comments concerning City of Miami Neighborhood Stabilization Plan (NSP) from Ann R. Kashmer The overall plan appears to be well thought out. (Proposed NSP substantial amendment) Substantive changes: 1. For homeownership rehab, I would suggest that the goal of one homeownership for the 50% < AMI is too aggressive, and should be allocated to the next income level: 80% <AMI. 2. Since each of the individual strategies expect to serve all 3 income levels: 50%, 80%, and 120% AMI, all references in the document need to be reviewed to insure that the total % of income levels served referenced in the document are consistent throughout the document. A summary of total units per income levels served should be included in the document. Minor Changes. 1. Page 10, first paragraph, line 4, insert "total" after of, and before funds. Add period after allocated. And insert after allocated "This 37.3% of total funds will be used". This clarifies that sentence. It is noted that when all the strategies are taken into consideration, the total 50% < AMI units are actually greater than this 37.3%. 2. Page 12, 1) Equity Sharing Program paragraph: Is there any formula for amount of subsidy? 3. Page 14, 3. Applicable to the Equity Sharing Program: Is this Equity sharing forever? Any term to this requirement? No definition of "early" sale or transfer. 4. Page 14, 4. Does the City's right of first refusal to purchase the loan requirement meet secondary mortgage market requirements? It also impairs bank's ability to sell mortgage and nullifies the value of servicing rights on the loan. 5. Page 15, (10) Performance Measures: Need to add the less than 50% AMI units into page 10, first paragraph of reference to 37.3% of funding. 6. Page 16, (10) Performance Measures: Somewhere, it should be noted that the measurement is based on census tract blocks, not individual incomes. Need to add the less than 50% AMI units into page 10, first paragraph of reference to 37.3% of funding. 7. Page 17, (10) Performance Measures: Somewhere, it should be noted that the measurement is based on census tract blocks, not individual incomes. Add units to total % of loans in each income category. Need to add the less than 50% AMI units into page 10, first paragraph of reference to 37.3% of funding. 8. Page 19, #3. Does the City's right of first refusal to purchase the loan requirement meet secondary mortgage market requirements? It also impairs bank's ability to sell mortgage and nullifies the value of servicing rights on the loan. [City of Miami response sent via e-mail] Dear Ms. Kashmer, Thank you for your comments regarding the Neighborhood Stabilization Program ("NSP") and for your active participation in assisting the City in drafting a comprehensive NSP plan of action. Your input was very valuable and allowed DCD to bring consistency to the City's NSP substantial amendment. Through its citizen participation process, the City received a number of comments along with suggestions from residents, business owners, community advocates, for-profit and non -for- profit organizations. Department of Community Development ("DCD") has reviewed all suggestions received up to date and will take them in to consideration prior to issuing its final NSP substantial amendment to the FY2008-2009 Action Plan. The goal of the City is to maximize the effect of NSP dollars in our communities and to ensure that the Areas of Greatest Needs are revitalized in accordance to the plan of action set forth in the NSP document. If you have any questions, please do not hesitate to contact my office at 305-416-1978 George Mensah, Director City of Miami Department of Community Development 45 [Submitted via e-mail] Mr. G. Mensah Director City of Miami CD Dept. 444 SW 2nd Ave. 2nd Floor Miami, FL 33128 Per my comments at the NSP -Public Meeting today Grady Muhammad Associates, Inc (GMAT); hope we can possibly use the Purchase of some rental property's to create a Rent -to -Own A HOME Pilot Project. First: It will allow resident to become homeowner ready, from 6 months to two (2) years. It will allow them to clear up any credit or other issues that may be preventing them from becoming homeowners. Second: We should use all available Section 8 Vouchers for Home Owner Ship Opportunities. Allow Renters to use their Section 8 Vouchers to pay their Mortgage instead of paying rent. I hope as part of the his project the city does not use organizations that do not normally work with programs like this and allow them to bite off more than they can chew. GMA. Inc; is ready and willing to assist the City of Miami Community Dept. to help facilitate these idea's into reality. ASAP If you have any questions please do not hesitate to call or email me with any suggestions. Warm regards, Grady Muhammad President GMA, Inc. .R [City of Miami response sent via e-mail] Dear Mr. Muhammad, Thank you for your comments regarding the Neighborhood Stabilization Program ("NSP") and for your active participation in assisting the City of Miami in drafting a comprehensive NSP plan of action. Through its citizen participation process, the City received a number of comments along with suggestions from residents, business owners, community advocates, for-profit and non -for-profit organizations. The Department of Community Development ("DCD") has reviewed all suggestions received up to date and will take them in to consideration prior to issuing its final NSP substantial amendment to the FY2008-2009 Action Plan. The goal of the City is to maximize the effect of NSP dollars in our communities and to ensure that the Areas of Greatest Needs are revitalized in accordance to the plan of action set forth in the NSP document. Your proposal of creating a Rent -to -Own a home pilot project is a great concept and is similar to the Section 8 Home Ownership Voucher program you make reference in your email. The City will work, as you suggested, with experienced organizations to ensure the successful implementation of the NSP. If you have any questions, please do not hesitate to contact my office at 305-416-1978. George Mensah, Director City of Miami Department of Community Development 47 Created by Schiller Jerome Review and Analysis of City of Miami Substantial Amendment to the Neighborhood Stabilization Plan #2008.1 NSP Substantial Amendment Overview The neighborhood Stabilization Program (NSP) was created to provide emergency assistance to state and local governments to acquire and redevelop foreclosed upon properties. The NSP program provided a grant to the City of Miami to purchase foreclosed upon or abandoned homes and to rehabilitate, redevelop and resell, these properties in order to stabilize neighborhoods. The program is authorized under Title III of the Housing and Economic Recovery Act (HERA) of 2008. The City was awarded $12,063,702 in Community Development Block Grant "CDBG" dollars to implement this new program. NSP Substantial Amendment Overview Questions 1. What is NSP's and the city's definition of an abandoned property? 2. HUD defines Foreclosed as the point at which the mortgage and tax foreclosure is complete. If the property is bought by a Third party at the court house and not retained by an REO or mortgage holder, does the property still qualify as an NSP Foreclosed property? 3. HUD allows NSP funds to be used for acquiring non residential use properties such as commercial or mix use. Will the city allow Mix use properties to be rehabilitated or acquired with NSP funds? 4. When will the implementation plan be made public? Review and Analysis of Strategy A: The availability of credit and qualification for credit has force most borrowers unable to attain credit. Lenders are requiring larger down payments, limiting Gift of Equity from sellers. The city will provide shared -equity investment of no less than 20% of the purchase price to homebuyers purchasing a property in the city of Miami. The Down Payment Assistance Program will provide zero (0%) deferred loan to homebuyers purchasing a property in the city of Miami. Questions: 1. What is the timeline for all transactions involving Equity Sharing and Down Payment Assistance? 2. Assuming that most of the NSP properties will require renovations and or rehabbing, Equity Sharing1 Down Payment Funds current allocation per projected units will not be enough. From which Strategy will funds be diverted in order to complete the transactions? 3. The city does plan to purchase and rehabilitate the property if does not meet housing standards with the Equity Sharing program. What are the guidelines for this form of transaction and how does the city protect itself from surplus of inventory due to purchaser inability to close? 4. How will the remaining strategies be adjusted and which strategy is a priority for the city? 5. In accordance to the Down Payment Assistance program, what city programs are available for the buyers to purchase and rehabilitate homes with violations? 6. Will the negotiated price to first right of refusal due to default of borrower be based on payoff amount or current market value? 7. Based on the Down Payment Program guidelines, it is not advantageous for homeowners to sale or transfer the property before three years. With a start date of 2009, Can we assume that all program income collected will be returned to HUD based on the NSP guidelines? 8. What housing rehabilitation standards will be used to ensure that these properties are retrofitted with energy efficient and Green makeover as mandated by NSP? 9. What is the Program Income component of Strategy A. Comments: ■ City guidelines will require income for housing to be no greater than 30% of Total Housing Income. City guidelines will allow total monthly debt obligation to be no greater than 45% of Total Housing Income. • Fannie Mae and Freddie Mac mortgages allow a maximum of 28% for the front ratio and 36% for the back ratio. (28136) • FHA mortgage allows a maximum of 29% for the front ratio and 41 % for back end ratio. (29141) • Non -conforming mortgages generally allow a back end ratio up to 55%. These loans are considered sub -prime loans under the NSP program. Analysis: With Average Total Acquisition and Rehabilitation of $175K per unit and maximum front ratio at 29% and average monthly debt obligations of $400.00, the projected housing units are as followed: ■ Providing 6 projected units for AMI between 51% -80% will require net minimum NSP funds of $128k to $175K per unit. Total NSP funds for 6 units will range $768K to $1.05 million. • Providing 15 projected units for AM1 between 81%-100% will require net minimum NSP funds of $8 1 K to $128K per unit. Total NSP funds for 15 units will range $1.21 million to $1.92 million. Recommendations: ■ Strategy A will require a total budget ranging 1.97 million and 2.97 million to meet performance measure. The projected 2.1 million for Strategy B is less than 20% of maximum project outlay. Strategy A funding should be increase order to complete projected housing units or the project housing units should be decreased. • Strategy would require income level between 50 to 70 percent of AMI to attain first mortgage from the City of Miami due to minimum income qualifications. ■ Those families earning between $2,050 and $2,887 yearly are ineligible. ■ The Income level between 8 1 % to120 percent AM1 is not accurate due to 96% of the Census Block Group is Low/Mod population. The correct Income Level range is between 8 1-100 percent of AMI. Notes: ■ The calculation for minimum NSP funds for each housing units is based on the maximum loan for the income range. ■ The maximum mortgage amount to income level groups is based on monthly housing expenses of $275 for Property Taxes and $210 for Hazard Insurance. It also allocates $400 dollars for other monthly obligations such as car payments and credit card debts. With an increase in monthly expense, the pre -qualify mortgage amount will decrease and thus increase the amount of NSP subsidies for each projected housing units. Minimum Fannie Mae, ■ Freddie Mac and VA first mortgage is 25K. ■ Projected homeownership housing units for income level less than 70% of AM1 is not feasible due to minimum first mortgages to be greater than 25K. ■ All calculations are based on no additional subsidies from non NSP sources. Review and Analysis of Strategy B: The success factor of Strategy B is based on the availability of Multifamily properties that are bank owned (REO) and Lis Pending. The majority of NSP qualified properties are SFR and Duplex. Strategy B Targets multifamily buildings with a minimum of 10 units based on total and projected housing units. Questions: 1. Please identify the mechanism the city will used to purchase, rehab and managed the projected 90 units? 2. Strategy B may be designated for homeownership activity as stated in the in the amendment. Would qualified buyers be allowed to purchase multi -family structures? 3. What roles will developers1 investors play in Strategy B? .6 4. The average age, condition, size and layout of NSP properties will require more renovation funds to repair the property to NSP guidelines. What Cost/Benefit analysis will be used to determine if a purchase NSP property should be demolished or repaired? 5. What housing rehabilitation standards will be used to ensure that these properties are retrofitted with energy efficient and Green makeover as mandated by NSP? 6. What is the Program Income component of Strategy B? 7. Based on RealtyTrac, how many duplex are available for NSP Funds? 8. Based on RealtyTrac, how many Multi family Structures (greater than 10 units) are available for NSP funds? Comment: ■ Income level less than 50% of AM1 in the City of Miami is $24,750 yearly/$2,062 monthly. • City guidelines will require income for housing to be no greater than 30% of Total Housing Income. City guidelines will allow total monthly debt obligation to be no greater than 45% of Total Housing Income. Analysis: With Total Acquisition and Rehabilitation cost of $175K per unit and maximum front ratio at 29%, the projected housing units are as followed: ■ Based on guidelines set forth by the city of Miami, the maximum total housing expense for this income group is $6181 monthly. • The average property tax bill for new homeowners is $3,300 yearly1 $275 monthly. ■ The average Hazard policy without Windstorm insurance is $2,520 yearly1 $210 monthly. ■ The average taxes and insurance housing expense per property is $485 monthly. • The minimum mortgage amount for a first lien mortgage is 25K. ■ Assuming the average monthly debt obligations of $400.00 ■ Purchasing a property with a total acquisition and renovation cost of 175K will result in Net • Loss of 128K- 175K of NSP funds for each family with a minimum mortgage of 25K. The correct projected units range is 25 to 36 units. • The escrow amount of $483 monthly is 78% of maximum housing expense of $618 monthly. ■ The homeownership activity of Strategy B is not feasible, practical or attainable. Recommendations: ■ The Performance measure to provide 90 projected housing units with a total budget of 4.5 million allots only 50K to purchase, rehabilitate each unit is not feasible or practical due to the average acquisition and renovation cost of projected housing units. • The homeownership activity for Strategy B is not feasible or attainable. Strategy B should be designated as a rental activity. ■ The availability of NSP multifamily structures in the area of greatest need should be identified prior to approving Strategy B. ■ Rental activity will mandate1 require partnership with private entities to be successful. The rental housing activity should produce program income based on percentage of NSP funds with each transaction. Notes: ■ The calculation for minimum NSP funds for each housing units is based on the maximum loan for the income range. ■ The maximum mortgage amount to income level groups is based on monthly housing expenses of $275 for Property Taxes and $210 for Hazard Insurance. It also allocates zero dollars for other monthly obligations such as car payments and credit card debts. With an increase or decrease in monthly expense, the pre -qualify mortgage amount will also increase or decrease and thus changing the amount of NSP subsidies for each projected housing units and possible program income. ■ Projected housing units for income level less than 50% of AM1 is not feasible due to minimum first mortgages to be greater than 25K and front end ratio requirements of FHA, Fannie Mae and Freddie Mac. 50 Review and Analysis of Strategy C: The city will establish land banks for properties that have been foreclosed upon and provide proper maintenance in an effort to protect surrounding property values. The total budget for Strategy is 2.8 million with a performance measure of 38 units. The city will allocate an average of 75 K per unit to meet performance measures. Land Banks is a property acquisition and management tool that must operate with a specific geographic area and operational time period. Questions: 1. Will the city establish several Land Banks throughout the city or will the entire city of Miami be defined as the Service Area? 2. Based on Realty Trac, the average property value of REO properties in the City of Miami is 150K to 200K. In addition, Miami Dade county NSP plan assumes 200k for the purchase of NSP properties. How will the city meet its performance measures of 38 units with available funds allocating only 75K per property? 3. The allocated NSP funds will acquire and assemble properties. What funds will be used to manage and developed these properties? 4. Will the Land Bank receive yearly operation and management funds from the city for maximum ten years it can hold title on each property acquired? 5. Strategy C and D states that funds allocated for Strategy D will be used to demolish Land Bank owned properties. Strategy D performance measure is to demolish 38 properties that are acquired by the Land Bank. Does the city plan to demolish all properties acquired by the Land Bank? If so, how will NSP funds provide or improve permanent residential structures? Comment: • The performance measure of 38 units will require the acquisition of majority multi family (+3 units) properties to be feasible. The City of Miami Census Block Group depict the areas of greatest needs are zoned mostly R1 and R2. Realty Trac also shows the majority of NSP properties to be SFR in the City of Miami. • The proper maintenance, monitoring and management of Land Bank properties will require the contracting of Property Manager or additional city staff through such departments as Public Works, Neighborhood Enhancement Team and Community Development. • Land Bank is a short term tool which must be accompanied by long term community development plan. • The strategy of establishing Land Banks has limited community benefits and is not accompanied by committed development funds from the city of Miami. Recommendations: It is my recommendation that city adopts the county activity for the acquisition and rehabilitation of Single Family Homes in the Census Block Groups based on the following: • The City will allow qualified home builders to identify and acquire foreclosed upon properties from lenders and rehabilitate them to the extent required to meet housing standards. • The city may fund up to the full cost of the acquisition and rehabilitation of the properties with NSP funds, subject to a first mortgage on the property. • The homes will be marketed to NSP income -eligible persons having undergone homebuyer counseling, who will be required to secure a first mortgage loan from a lender to purchase the home. • Some of the NSP funds used to purchase and rehabilitate the home would be converted into a soft second mortgage with zero interest rate and deed restriction for early sale or transfer of property. • Sales proceeds will be used to cover developers fees for performing the above activities on behalf of the city. The program allows 10% for developer's fees. • This approach will maximize benefits afforded by the city NSP allocation by permitting sale proceeds to return to the city's NSP program for additional units. 51 • The total budget of $2.8 million and average acquisition cost of $175K will result in the performance measure of 16 units minimum. • The approximate amount of additional units projected will be based on the targeted income level for this activity. Targeted income level 60-80% will result in 0 to 4.8 additional projected units. Targeted income level 81-100% will result in 4.29 to 8.56 additional projected units Targeted income level 101-120% will result in 8.56 to 12.8 additional projected units • The Income level between 70 to 100 percent AM1 is the correct targeted income group due to 96% of the Census Block Group is Low/Mod population. • Strategy D, the utilization of NSP funds to demolish "blighted structures: should be included with Strategy F. Notes: • The calculation for minimum NSP funds for each housing units is based on the maximum loan for the income range. Program income is the maximum qualified mortgage amount. • The maximum mortgage amount to income level groups is based on monthly housing expenses of $275 for Property Taxes and $210 for Hazard Insurance. It also allocates $400 for other monthly obligations such as car payments and credit card debts. With an increase or decrease in monthly expense, the pre -qualify mortgage amount will also increase or decrease and thus increase or decreasing the amount of NSP subsidies for each projected housing units and change possible program income. Review and Analysis of Strategy D: The city of Miami will utilize NSP funding to demolish "blighted Structures" within city limits. The performance measure is based on the demolishing of 38 Land Bank Owned Properties with a Total budget of $700K. Questions: ■ What is the city definition of Blighted Structure? ■ How does the demolition of non NSP blighted structures with NSP funds benefit individuals or households that do not exceed 120% of AMI? ■ What will be the criteria to determine if a property should be demolished? Comment: ■ The demolition of properties should be accompanied by NSP funds to re -construct on the vacant lot. The City of Miami current lot clearance fee range from 18K to 22K. The city would have to purchase 3 1 to 38 properties that require demolition based on a matrix of standards. ■ The city should target older unsafe structures with outdated amenities and structurally incapable of meeting the current building codes. Recommendations: The demolition of NSP purchase properties should be included as part of Strategy E. The total budgeted funds will enable additional projected units to be acquired for Strategy E. Review and Analysis of Strategy E: The city of Miami will acquire NSP properties and demolish the sub -standard unit and reconstruct a new housing unit on the same lot. The targeted income level is 81 to 120 percent of AMI. The Performance measure is 5 housing units with a total budget of $2.1 million. Questions: 1. Properties will be purchased with the intent to demolish. What is maximum acquisition price per property? 2. The city of Miami long term vision is to be a GREEN city. Will those properties be built LEED certified building as encourage in the NSP guidelines? 52 3. The activity of Strategy E has the highest cost per unit in the NSP activities. What income level will maximize benefits afforded by the city NSP allocation by permitting sale proceeds to return to the city's NSP program for additional units? 4. What is the maximum cost of construction for each unit built? Comment: ■ Based on the performance measure and total budget, the city will allocate $420K for each unit build. ■ LEED certified affordable single family units have built in the City of Miami through the Spotted Lot program and Urban Infill housing at a price ranging 225K -250K from local developers. • The income level between 8 1-120% AM1 will generate between $47K and $140K in program income per unit with total program income for 5 units ranging from $235k to $700K. The city will be able to build an additional maximum 1.6 units with the program income. Analysis: With Total Acquisition, Demolition and Re -construction cost of $420K per unit and maximum front ratio at 29%, the projected housing units are as followed: • Providing 5 projected units for AM1 between 81% -120% will require minimum NSP funds of 280K to $373K per unit. Total net required NSP funds for 5 units will range $1.40 million to $1.86 million. Recommendations: • The funds for Strategy D should be in included in Strategy E. This will result in $2.9 million of total funds. The new projected housing units will be 6.9 new units. ■ The targeted income group should be 10 1 % to 120% AMI. The income level between 101- 120% AM1 will generate between $105.2K and $141.5K in program income per unit with total program income for 6 units ranging from $633k to $849K. The city will be able to build an additional maximum 2.02 units. ■ The reconstruction of new housing units should be built to LEED certified. ■ It is my recommendation that city adopt the activity of allowing for the acquisition, demolition and reconstruction of Single Family Homes in the Census Block Groups based on the following: a.The City will allow qualified home builders/developers to identify and acquire foreclosed upon properties from lenders. The builder/developer will demolish the substandard unit and reconstruct a new housing unit based on LEEDS standards. b.The city will fund up to the full cost of the acquisition, demolition and reconstruction of the properties with NSP funds, subject to a first mortgage on the property. c. The homes will be marketed to NSP income -eligible persons having undergone homebuyer counseling, who will be required to secure a first mortgage loan from a lender to purchase the home. d. Some of the NSP funds used to purchase and rehabilitate the home would be converted into a soft second mortgage with zero interest rate and deed restriction for early sale or transfer of property. e. Sales proceeds will be used to cover developer's fees for performing the above activities on behalf of the city. The program allows 10% for developer's fees. Notes: ■ The calculation for minimum NSP funds for each housing units is based on the maximum loan for the income range. Program income is the maximum qualified mortgage amount. ■ The maximum mortgage amount to income level groups is based on monthly housing expenses of $275 for Property Taxes and $210 for Hazard Insurance. It also allocates zero dollars for other monthly obligations such as car payments and credit card debts. ■ An increase in monthly expense will result in a lesser pre -qualified mortgage amount will decrease and thus increase the amount of NSP subsidies for each projected housing units and lowering possible program income. 53 y�y?i L }� a I'_� ki: �•. L iCa?.Nr1f', -.}. Nuvembar 19, 2008 Mr. Schuller krt me 24 9F 47. 'trcCr \•1 inmi- ]- 3 � 1 S7 Rcf-: 'Neighborhood Stabilization Progrant Sfth,SUntial Amcndni.;m: m the }'Y20(19 -MOV Acti,-.m flan Dcar NIT- JcRr roc, TtianlA you fu*r tour cuname�LLs rceardirsg ltLe�eigLt>orh>.wd 5tzbi]unionFru�t'aon {`'N5P'} uru3 for y�,nr �rivc lx��icilxatiou in assisting the [.'icy in drafting a crlmprehcnsnY `.Sl' ltilan oY action. Through its cidMl participation l�rncasa, tint; City rcc)Civrd a numb.. -r of crMncnts alrniL. with att«Lestiaty Crum residemx, bwsinesa owners, cu nmunity advocates, fur-pmGL tmd non-fbr-prefiL &L=iattion:., The Dt F• LrncnL of Cum3LLuniLv Developnwat ('T )CD") hu3 Tv it:Wtd all su Lofsuuns received tor, w Sate and will rake, them into eon3idcridon prior in issuing iZ final'\SP subsM. tial amendment to the FY20L18 2#909 tenon Plan 'ncc final of the C_iiy is to maximinc: tk cff3ct of NSE' dullan in our communities and to cns urn Lhat the AMTS of GreaLest :deeds ate rev iLaLizer1 in accordnwe Lu the plan ,f action ser forth in the NSP dr%cutucnc. Rtxordb draw tla.LL you mailed }•our;zarnnoerds L;J the City un NnVear bCr lr3- 2008 Md LILe}• VvtcTt received bt DCD an Niotiernbea-1;, 2048. SiUee the time you criLlrtaLL,.- %vM e glnit *O=)enis, the City had as NSP public meeting ill C'hrul-s Eladles° Park„ which tiav wtirc able Ta attend, w'hcr4, many afthc qusstions in your letter wzrc addtc 4x1. b addition, Il(_ U titaff had rhe oppnrtunin to meet with you on N(iv=nhcr 13, 2068 to furdtc-r clarify any concerns you mut} hat'r had.. ity6n, hmever: have additional C1ndsLloas, please do nM hcsimtc in comacting. me at' -0-5-41 6-1 Y78 Si lto:crcl}•, ytcR�r rccii�r i3cpmltmc cofi natlmunir tA-�etrpmont S iI- ( T IMr-ti,. V rw ':: �•: F� i,p•aFN: 4=J.l4'. 'J nr.' i•+rr i^, ''nrl Aw.r - 5.-.nw:, fln�.la'i i1 i:'•; ;'•';tii AlE-2�faU: iea ;3x15 d"io-i U�0 au,-:Iir;,V.aro {J). Rau 34-1:ill=:;-:a, MIAni.-1 "1liy 1704 54 ATTACHMENT "B": Form SF -424/ Certifications/ Newspaper Ad 55