HomeMy WebLinkAboutExhibitCite of M:iani: Department of
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TABLE OF CONTENTS
THE NSP SUBSTANTIAL AMENDMENT...........................................................................2
JURISDICTION: CITY OF MIAMI....................................................................................2
NSP CONTACT PERSON: GEORGE MENSAH....................................................................2
WEB ADDRESS: WWW. MIAMIGOV.COM/COMMUNITYDEVELOPMENT...........................................2
PAGES/REPORTS...................................................................................................2
ADDRESS: 444 SW 2 AVENUE, 2 FLOOR ........................................................................2
MIAMI, FL 33130..................................................................................................2
TEL: (305)416-2080; FAX: (305)416-2090...................................................................2
E-MAIL: GMENSAH(C VIAMIGOV.COM.............................................................................2
A. AREAS OF GREATEST NEED..................................................................................2
Graph 1. - Properties undergoing foreclosure proceedings.....................................................
4
Graph2. - Foreclosure Risk Levels..........................................................................................
5
Graph 4. - Low Moderate & Middle Income Eligible Areas by Census Tract and Census
Block..........................................................................................................................................
7
Table 1. - Areas of Greatest Need by Census Block Group...................................................11
B. DISTRIBUTION AND USES OF FUNDS.......................................................................
15
Table 2. — NSP activities to be implemented..........................................................................16
C. DEFINITIONS AND DESCRIPTIONS..........................................................................
16
BlightedStructure...............................................................................................16
AffordableRents.................................................................................................17
Affordability Period: ............................................................................................
17
Housing Rehabilitation Standards.....................................................................18
Foreclosed...........................................................................................................18
Abandoned..........................................................................................................18
Current market appraised value.........................................................................19
LandBank............................................................................................................19
D. LOW INCOME TARGETING...................................................................................
19
Table 3.- Low Income Targeting..............................................................................................
20
E. Acouis TIONS & RELOCATION..............................................................................
20
F. PUBLIC COMMENT...........................................................................................
20
G. NSP INFORMATION BYACTIVITY...........................................................................
21
Strategy.,A.. .............................................................................................................................
21
Establish financing mechanisms for purchase and redevelopment of foreclosed upon homes
and residential properties: .......................................................................................................
21
Strategy..B.. .............................................................................................................................
25
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...................25
Strategy"C".............................................................................................................................
27
LandBanking...........................................................................................................................27
Strategy"D...............................................................................................................................
28
Demolition................................................................................................................................
28
Strategy,.E...............................................................................................................................
29
Redevelopment of Demolished or Vacant Properties.............................................................29
NSP SUBSTANTIAL AMENDMENT CHECKLIST ................................ ERROR! BOOKMARK NOT DEFINED.
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/communitydevelopment
Miami, FL 33130.
Tel: (305)416-2080; Fax: (305)416-2090
/pages/reports
E-mail: nsah@miamigov.com
A. AREAS OF GREATEST (DEED
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/rent, 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 -like ("CDBG") dollars to
implement this new program.
The Department of Community Development ("DCD") is hereby revising its original
Housing Market Foreclosure Assessment, which identified areas originally thought to be most
affected by the current housing crisis, with a new Housing Market Foreclosure Assessment that
provides for an updated and more realistic status of current housing market conditions. 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
and the geographical location of proceedings is fairly balanced and evenly scattered across
City boundaries. This clearly shows 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 Levels"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). Notice that almost all city neighborhoods fall under a Foreclosure Risk Level of 6 or
higher, which is properly reflected in the even distribution of foreclosures throughout the city
as shown in Graph 1.
3. In addition, the City plotted census block information where the total number of homes
financed by sub -prime mortgages exceeded 25 percent of the total number of loans issued
for the area (Graph 3). This means that at least 1 out of 4 households in each census block
represented was issued a high cost loan. This dataset again confirmed that the sub -prime
' Dataset obtained from First American CoreLogic.
2 Dataset obtained from www.huduser.oro. 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.
FY2008-2009 Action Plan Amendment
Amendment 4 2008.1
market problem is not just concentrated in a few areas, but affecting all city neighborhoods.
4. Graph 4 utilizes data from huduser.org to highlight, at census block level, the areas that are
eligible for NSP assistance based on income (LMMI).
5. Graph 5 combines the results of all four previous maps utilized and the results show that the
datasets overlap almost in every city neighborhood. As such, these overlapping areas are
classified as the revised "Areas of Greatest Needs" These areas are better depicted in Graph
6.
6. Graph 6 isolates the new AGN and distinguishes eligible vs. ineligible areas
7. Graph 7 shows the number of abandoned properties in the City of Miami and their
deterioration levels. This map complements Graph 1 as these properties also create a
negative effect in neighborhoods contributing to the decline of housing values in the areas
where they are located.
9
Graph 1. - Properties undergoing foreclosure proceedings.
City of MI
Legend
I Fo€eclum
Clem bturt<:FkaQAmerYn Gn!Ley1:, Jn, rft—,C-Zm
Graph 2. - Foreclosure Risk Levels
Foreclose
Legend
Foreclosme fits
70
RM 9
Foreclosure riskis n
k -vel based on faller
percentage of loans
address vaeent for at least 94 days)
oafa Source:. "UD Usex fi16p:11mvw.fttpduscr: oegfdatasaEslnsp farget.him@
5
Graph 3. - Sub -prime Mortgages.
Homes F
Legend
® Tracts N
High G
Data Source: HUD User ht9p:Yfwvww_FtudaSer.vrg?daiaseksfns;�_tar�et.hhe+I
6
Data Source;. HUD User blipJhvww.hudusergrgfdatesetslnsp_larget.bbA
Graph 5.- Areas of Greatest Need derived by overlaying all 4 datasets
City of MI
Legend
��? tre®der
emcee
Less its€
Foreclosure Ris
to
3
S
F 7
fi
® Tracts w
High Co!
Ej
Data Suurae: HUD UserhtEp;1lmvw.h�. loyer..org�cintasetsJesp_ gTet.htmF
8
Graph G.- Isolating the Areas of Greatest Need
City of MI
Legend
Low, Mad
RneAg.R.ik Low, Mod
Data Saoroe: HUD laser hflp::fhrww.hudvser;orgldatase4�4nsp_teaget..hfmE
9
Graph 7,- Abandoned Properties
Abandoned Properties by Deterioration Level
All Properties by District
Legend
,t
Level (1=Lowest, v=Highest)
atm q„a O
• W i '
�•
• 2
�•
3
r
•O d
0
:._
• J10
+.bfstiict Number Num bee of Properties
1 72
2 191
3 83
4 132
5 294
772
10
atm q„a O
• W i '
r
•O d
10
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, most of the areas in the City of Miami are
under "great need" for some financial relief. As such, the City has catalogued the area
represented in Graph 6 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
Source: HUD NSP data
Census
Low,
Percent
Census
Low,
Percent
Block
Mod,
of
Block
Mod,
of
Group
Middle
People
Group
Middle
People
?:5104
Eligible
<= 120
9fi% `.
Eligible
<= 120
67%
5100.6}
Ami
85%
1501 4
Ami
871°
1004.2
YES
98%
5002.3
YES
83%
1006.4
YES
100%
5100.2
YES
83%
12fl2 3' YE5
82°{°
5140 3 ; YES
�..,,..89%
1301.1
YES
66%o
5100.4
YES
1309 2 a
YES ?J2°I°
?:5104
5
YE5 •
9fi% `.
1301.3
YES
67%
5100.6}
YES
85%
1501 4
'ES...;5201
YES 94aY
1301.5
YES
95%
5201.2
YES
95%
';"="13021. 1�� - �2°% '. ,,:5201
3 :
YES
'�90°l0'•'_
1302.2
YES
53%
5201A
YES
95%
13021:` YES
$3°Ja
52021
YES �6°ia:'
1302.4
YES
92%
5202.2
YES
85%
::1302
YES
92%
5202 3?. ,.YES
94°10::
1302.6
YES
86% �
5202.4
YES
97%
" 1401 4 x YESy
°Jo
5301 3,
YES ;':
90
1401.5
YES
94%
5301 A
YES
83%
1401 t
YE5 _
3°,`°
530.5
1402.1
YES
91`%,
5301.6
YES
90%
3 Criteria utilized: areas with Foreclosure Risk Levels of 6+ AND where sub -prune loans comprise more
than 25 percent of the total loans issued in the census block.
11
Census
Low,
Percent
Census
Low,
Percent
Block
Mod,
of
Block
Mod,
of
Group
Middle
People
Group
Middle
People
2100.3
Eligible
<= 120
5704.3 YES
Eligible
<= 120
5401.2
YES
Ami
X703?# YES:
92°la
Ami
1402.2 `
YES;
9°l6
5301 7'
YES:
✓ 94%
14002.3
YES
100%
5301.8
YES
83%
1501.2 YES
98%
5302.2
YES
93%
1501 3_
5302 3
YES:
o°✓A,z;
1501.4 YES
101%
5302.4
YES
88%
2100 2 3 NO ,'
540 1<30%
,,: 5704 2.:= YES
�
2100.3
NO
42%
5704.3 YES
1703.1 YES
87%a
5401.2
YES
85%A
X703?# YES:
92°la
5401 3: __-YES
1801.1 YES
102%H
5401,4.:
X201 2
79%
1801 YDS:
74tr1a
540! 5
YE5
1801.1 YES
76%
5402.1
YES
..........,.
92%
1802 2YES'
,
$1°lA
5402 2
YES ;
92°l0='
1802.3 YES.,
°
8010
5402.3
YES
91%
1901 1,S �'7°I°
90°Itr
5402 4
YES 9°1a
1901.2 YES
86%
5402.5
�YES
7y 9%
..,7
1901.4 YES
78%
5501.1
YES
70%
1903.4 YES
86%
5501.3
YES
86%
14 5 YDS,. U..,...3°lo- x._. 55073 4 YES
_
0 b/a T,
1903.6 YES
96%6
5502.1
YES
$4%�
1903 7 _ YES 38I` X5132 2 YES
1904.1 YES
92%
55013
YES
76%
1904 _
550?'_ SES
1904.3 YES
91%
5600.1
YES
65°l0
=19D4 8 YES ` . ,
87YES
=
76°lV
2001.1 YES
94%
5600.3
YES
76%A
2001.3 YES 83% 5701.4 YES 75%
2001 4 i'€S5°fA 57{f1 5 ' YDS 72A,:
2003.3 YES * 89% 5701.6 YES 72%
2004.1
YES
93%
5703.2 YES
83%
Ot�4 2
YES; 7,19a,,
2100.1
NO
46%
5704.1 YES
88%
2100 2 3 NO ,'
40i°Ia„
,,: 5704 2.:= YES
$5°r6 '
2100.3
NO
42%
5704.3 YES
85%
2100.4..
YES'
88%
1 _ YES.:
56°f_
2201.1
YES
70%
5801.2 YES
76%
X201 2
YES "::'
8 i °la
5801 3"' ES
`: 74°ln
220 i .3
YES
100%
5801.4 YES
71 °iA
2202 1 ';
YES
80°!a
5802 1 YES
6ry°In
2202.2
YES
83%
5802.2 YES
81%
2202 3 ::
YES ,:
90°Itr
5802 3 _:
:72W
12
12
Census
Low,
Percent
Census
Low,
Percent
Block
Mod,
of
Block
Mod,
of
Group
Middle
People
Group
Middle
People
6402 3
. _.,:.6402.4 ;
Eligible
- 120
2402.2...
Eligible
- 120
Ami
2500 4 YES
78°,fl
Ami
2202.4
YES
68%
5802.4
YES
73%
22f32 5 ':
YES :
72°l°
x802 5 .
YES
75°l°
2202.6
YES
82%
6301.1
YES
88%
-..`2303 h
YES'-
M%
6301 2
E5
79°J°
2300.2
YES
84%
6301.3
YES
82%
23flfl 3 YDS '
73°l4
6301 4
YES 87AIA
2300.4
YES
81%
6302.1
YES
66%
231�0u YES,:.
81%
�
7AJ(
2300.6
YES
93%
6302.3
YES
57%
2401.3
YES
97%
6401.1
YES
82%
2401.5
YES
87%
6401.3
YES
93%
„24{t21
YES
6402 3
. _.,:.6402.4 ;
t'ES
..YES
82
2402.2...
YES,.,.
81°t°,.......
..:
. 85%
2500 4 YES
78°,fl
6402 5 "
YES
YES
64(0J2,.6
YES
74%J
w2rr5{00.2
y�914°'°
2500.4
YES
88%
6403.2
YES
67%
X5013 5 I�Ot " �7°Jo
` �' -6403 3k YES 7'IAI°
2600.1
YES
96%
6500.1
YES
62%
26002:
YES
90 J° s E 6500x2 '1'E5 �...fi6%;'
2600.3
YES
94%
6500.3
YES
68%
9$°1° 7. £5QD 4 SES
6s°J°
2701.1
YES
53%
6500.5
YES
81%
2701 2 YES,`- 78°l°„ . 6500 6 'i YES, ;`
7AJ(
2701.3
YES
74%
6601.2
YES
71%
704,4
cS _
=84%,
2701.5
YES
55%
6601.4
YES _.
92
7131 'Pa1O
f„
�6601.6
2702.1
YES
87%
NO
.8
...YE : 73°I°3W,
2800.1
YES
98%
6602.1
YES
94%
2800 23L3
1'% 6602 2 YES 1ii2°I°:
-6602.3
2800.3
YES
98%
YES
97%
29001
- ES `_
6D°I°
&602 4 :,
YES . `4%
2900.2
YES
75%
6701.1
NO
35%
1701.2
1dO .
41°X)
3001.1
"ES
67%
6704.3
NO
33%
3001 2 :
YES.
98°l°
3001.3
YES
75%
6702.2
NO
44%
m
3003
90�°
...,
3003.2
YES
91%
6702.4
YES
63%
3003 3
? YES .
:.58°!a
3004.1
YES
73%
6800.2
NO
31%
13
Census Low,
Percent
Census Low,
Percent
Block Mod,
of
Block Mod,
of
Group Middle
People
Group Middle
People
Eligible
<= 120
Eligible
<= 120
97°iD
Ami
Ami
3100.1
YES
92°!
6800.4 NO
38%
100 2,
YE8 _
73%
NO:
3100.3
YES
93%
6900.1 YES
71%
34001 YES
97°iD
:'6900 2 ` YES
3400.2
YES
99%
fi904.3 YES
59%
3400 3 YES 56°l0
3400.4
YES
83°/D
6900.5 YES
62%
3601 YES
3601.2
YES
100%
7001.2 YES
79%
701
72°X6
3602.1
YES
92%
7001.4 YES
68%
;74021 ;, YES ; .
78°✓D
3602.3
YES
9b°ID
7002.2 YES
86°D
":36024
YES;;
95��° 7002_3 YES ':.
73%
3701.1
NO
236%
7002.4 YES
74%
4601.2
NO
0%
7100.2 YES
51 %
49013w0
4901.3
YES
91 %
7100.4 YES
71%
49C� 4 YES, 88°Jo
71 '76°5 s
4902.2
YES
81%
7200.1 YES
64%
?l902 3 Yl= 8°!° _7200.2--,,,;,, YDS
. ..._ .. , , ,
_YES
&9°�D `)
4902.4
YES
90°/D
7200.3
8 i
YES '
?7
5001.2
YES
82%
7300.1 NO
15%
o4D1a
YES:'
72°lD
73002
5001.4
YES
84%
7300.3 NO
3007°
;001 5
Yi✓S 2-
5001.6
50-91.6
YES
68%
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 based on
meeting national objectives to benefit low-, moderate- and middle-income households.
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.
14
B. 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 recent collapse of global financial markets 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 has
brought 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.
15
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 Estimated Units
Amount
B. Purchase and rehabilitate homes and residential properties that $5.200.000 90
have been abandoned or foreclosed upon, in order to sell, rent, 5,{nn�nnn
or redevelop such homes and properties.
structures. $ 700,000 Inch
.c.
Administration $1,206, 370
TOTAL`�;:.<� .<< .....,.:' , .a...i. „< T.. ....,-93,Q$3,TQ2.,..,�747
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 use°.
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 and the Notice of Allocations,
Application Procedures, Regulatory Waivers Granted to and Alternative Requirements for
Emergency Assistance for Redevelopment of Abandoned and Foreclosed Homes Grantees
under the Housing and Economic Recovery Act, 2008; Revisions to Neighborhood Stabilization
Program (NSP) and Technical Corrections.
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
° Federal Register Vol. 73, No. 194 Pg. 58337.
m
Formatted: Indent: Left: 0.5", No bullets or
numbering
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
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 3. — Affordable Rents
Household Income Level Affordable Rents
Lowncome,a,dbeloW Equal;tnftheFY2a08;1nconeLimifsfo'rSOalfl:pfl-1UDIAtJl1:.::
Moderate Income Equal to 30% of the FY2008 Income Limits for 80% of HUD AMI
iVliddleiicome "' Equal fo°30% of ihe,FY20081ncdme Limits for 120°I° of`.! iUD ATI
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 target total monthly debt obligation as a percentage of monthly income cannot be
more than 45 percent. On an exception basis, the monthly payment of mortgage payments could
be less than the 30 percent benchmark, if justified. In the case of rental housing, the City will
ensure that rents do not exceed those rental limits adjusted for bedroom size..
Affordability 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
17
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.
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, as defined by US HUD's Housing Quality Standards as per 24 CFR
982.401.
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.
A property will be considered foreclosed and eliqible for NSP assistance if anv of the
following conditions aooly: The property is at least 60 days delinouent on its mortgage and the
owner has been notified; or the property owner is 90 days or more delinquent on tax payments: or
under state or local law, foreclosure oroceedinas have been initiated or completed: or foreclosure
proceedings have been completed and title has been transferred to an intermediary aggregator or
servicer that is not an NSP grantee. subrecioient. developer, or end user.
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.
18
A home is abandoned when no mortgage or tax payments have been made by the
property owner for at least 90 days or a code enforcement inspection has determined that the
Property is not habitable and the owner has taken no corrective actions within 90 days of
notification of the deficiencies.
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 of the final offer made
for the property by a grantee, sub -recipient, developer, or individual homebuyer.
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 [NcomE 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 $5,034,557 4,737;7-59. This amount equals to about 41.7
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.
WE
Table 3.- Low Income Targeting
Activity/ Strategy Estimated Target Low
Amount Income
A,,": Estabhstafinancmg mechanisms#or purchase and redevelopmentD•499�98 Na Dom;;;
Purchase and rehabilitate homes and residential properties that 65.034.557 Yes
have been abandoned or foreclosed upon, in order to sell, rent, or 4,000,009
redevelop such homes and properties. Funds used for single
family purchase/rehabilitation may be used as equity sharing or
down payment assistance.
a_
D. Demolish blighted structures. $ 'L00 No _a�
E ,,• Retleveloprtiento#demoiished or vacant,gropert�es0 „ No
Administration $0
For more detailed information regarding the activities/ strategies listed above, please refer to
Section G in this amendment.
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-, moderate-,
or middle-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-, moderate- or middle-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
20
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 November 17, 2009 to December 17, 2009.
Please submit your comments in writing to:
NSP Comment
City of Miami — Department of Community Development
444 SW 2nd Avenue, 2"d Floor
Miami, FL 33130
Attn.: Roberto Tazoe
The NSP substantial amendment was available on the City's website and at the DCD
reception,
[Comments are found under Attachment "A"]
G. NSP INFORfdiATION BYAt cTIvITY
Strategy "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 (I -AMID.
(1) 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.
(2) National Obiective: LMMH (Low-, Moderate -,Middle -Income Housing)
(3) Proiected Start Date: February 2009
(4) Proiected Commitment Date: August 2010
(5) Proiected End Date: February 2013
(6) Responsible Organization: City of Miami Department of Community Development
444 SW 2nd Avenue, 2nd 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
21
qualify for this strategy as they may be affected by the current tighter financial restrictions
imposed by private lending institutions.
1) Eguity 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's Areas of Greatest Need. The
City will buy down the price of the purchase with the subsidy, in exchange for a
guaranteed lower tax rate on the property. The buyer locates an abandoned and/ or
foreclosed upon residential property within the City's AGN, 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-served
basis 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 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's Areas of Greatest Need. The buyer locates an abandoned and/or
foreclosed upon residential property, 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-served basis.
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 NSP 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, foreclosed upon, or Strategy E. Redeveloped. single family residences,
townhomes, and/ or condominiums. The property must be located within the City of Miami's
Areas of Greatest Need 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 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.
Homebuver 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:
22
Homes must be purchased at a 1% or greater discount from the current market appraised
value of the property, taking into consideration its current condition. The appraisal shall be
completed within 60 days of the final offer made for the property by the homebuyer.
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 for the full 30 years.
Securitv:
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
Mortgaae 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. 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 transfer, the City
shall share in any gain realized, based on its pro -rated share of participation in the
original purchase. A 30 year 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 from
the sale of the property. 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.
?3
Eligible properties
Abandoned or foreclosed upon single family residences, townhomes, and/ or
Condominiums with a buyer applying through Strategy A as explained above. The
property must be located within the City of Miami.
(9) Total Budget: $g7_5�
(10) Performance Measures: 0 -8—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
Between 51-80 percent AMI 40
Between 8,1 120 percent AMI 60 X88 099
TOTAL: 9 0 $0750,000
24
Strategy "B"
Purchase and rehabilitate homes and multi -family properties that have
been abandoned or foreclosed upon, in order to sell, rent, or redevelop
such homes and properties. Funds used for single family
purchase/rehabilitation may be used as equity sharing or down payment
assistance.
(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) Proiected Start Date: February 2009
(4.1) Projected Commitment Date: August2010
(5) Proiected End Date: February 2013
(6) Responsible Organization: City of Miami Department of Community Development
444 SW 2nd Avenue, 2nd 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.
(8) Activity Description:
Purchase and Rehabilitation Program of Multi -Family Units or Single-family Units
This program allows for the City or Developers to purchase or provide assistance fully or in
partially for the purchase of abandoned and/or foreclosed upon multi -family or single 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 rental 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.
All funds used for home ownership units can be used for purchase. rehab/construction and
conversion to second mortgages or equity sharing to home owners at 120% of HUD's Area
Median Income adiusted for family size.
(9) Total Budge: $5.200.00088
(10) Performance Measures: 90 Housing units
25
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.
26
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 Objective: LMMA (Low-, Moderate -,Middle -Income Area)
(4) Proiected 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 2nd Avenue, 2"d 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
(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".
At the Citv's discretion. properties that have an estimated rehabilitation cost that is 50% or
greater of the "as is" appraised value. may be recommended for demolition.
1 (9) Total Budget: $800.000 95- 8
(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 ..
-
Between 51-80 percent AMI
—126
$592.750.00
Between 81 120 percenf AMl 12
138;888-98
$207250 00
259;250
TOTAL:
24
$800.000.00
X08
27
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. For City acquired properties under Strategy C. the City
may at its sole discretion, demolish a structure if the City determines the
rehabilitation costs exceed 50% of the appraised "as is" value of the property.
(3) National Obiective: LMMA or LMMH (Low-, Moderate-, Middle -Area or Household)
(4) Proiected 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 2nd Avenue, 2nd 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
(8) Activity Description:
The City of Miami will utilize NSP funding to demolish 'blighted structures' within City limits.
For City acquired properties under Strategy C, the Citv may at its sole discretion, demolish a
structure if the City determines the rehabilitation costs exceed 50% of the appraised "as is"
value of the prooerty.
(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
Housing Units Amount
Less #han 50 ,pdiceht ,4Mt
Between 51-80 percent Affil —12 § $350.000.00
176,890.98
Betw.... -120 percent AMI ' 12 $350;000 00,
TOTAL: 24 $700,000.00
28
Strate-gy "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 Obiective: LMMH (Low-, Moderate-, Middle- Households)
(4) Proiected Start Date: February 2009
(4. 1) Proiected Commitment Date: August 2010
(5) Proiected End Date: February 2013
(6) Responsible Organization: City of Miami Department of Community Development
444 SW 2nd Avenue, 2"d 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
(8) Activity Description:
The City of Miami will acquiree 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 City will also be able to
provide financing for the construction of new housing on vacant lots in the Areas of Greatest
Need. The buyer utilizes one of the participating lenders to be pre -qualified for a mortgage
loan. The City of Miami allows a Strategy A like subsidy to stay in the property, the amount of
the City's loan will be based on the first mortgage lender's commitment or the City can
finance the complete transaction.
The City will also be able to provide financing to qualified developers for redevelopment of
vacant or demolished properties into multi -family affordable rental properties. Eligible
tenants' income must be less than or equal to 120% of HUD's Area Median Income, adjusted
for family size.
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 of at least 1% from the current market appraised
29
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.
Loan Terms:
If lender financed, the maximum amount of City NSP 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. If the City finances the total cost, payments could
be dependent upon the buyer's ability to repay. 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 Mortoage 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
Mortgaoe 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. 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 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. 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: $4,157.3324 7-0&_n2
(10) Performance Measures: 33 25 Housing units
The following are projected numbers. The City will target this program to the Areas of Greatest
Needs and to middle-income households.
30
Income Level
Projected
Estimated
Housing Units
Amount
L°ess_than 5A percent AMi
Between 51-80 percent AMI
4
$_400,000
Between 81 10percent AMi
291 _
$3,57 332:
TOTAL:
3325
$4.157,332
3;0-5§;332
31
Patricia M. Arias
-10-001
Code Enforcement Board
Resolution #
Invoice Invoice
Date No.
Date of Service Fees
Costs Amount
Payment
Payment
Date Balance
10-0016
4/29/2010 CM-001
4/1/10 - 4/30/10 $1,600.00
$1,600.00
$1,600.00
5/20/2010 $1,600.00
5/29/2001 CM-002
5/1/10 - 5/31/10 $1,660.00
$1,660.00
$1,660.00
6/22/2010 $1,660.00
Total
$3,260.00
$3,260.00
$3,260.00
FY 09 -10
1 $3,260.001
$3,260.00
$3,260.00