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HomeMy WebLinkAboutExhibit AOir � , z City of Miami dr 1'ILIP'LLIIp lip Department of Commzrnity Development Annual Action Plan Amendments FY2O1O-2011 Volume 2.10 Submitted to: U.S. Department of Housing & Urban Development Community Planning & Development 909 SE First Avenue, Room 500 Miami, FL 33131-3028 City of Miami • Deportment of Community Development 1. NSP3 Grantee Information NSP3 Program Administrator Contact Information Name (Last, First) Ann R. Kashmer Email Address akashmer@miamigov.com Phone Number 305-416-2097 Mailing Address City of Miami, 444 S.W. 2nd Ave, 2ND Floor, Miami, FL 33130 2. Areas of Greatest Need Map Submission The map generated at the HUD NSP3 Mapping Tool for Preparing Action Plan website is included as an attachment. Data Sources Used to Determine Areas of Greatest Need Describe the data sources used to determine the areas of greatest need. Response: The City of Miami's Consolidated Plan and HUD provided data. Determination of Areas of Greatest Need Describe how the areas of greatest need were established. Response: All of the City of Miami has seen a decline in its neighborhoods due to the negative effects of a high number and percentage of homes that have been foreclosed upon or abandoned. With limited funding in round 3 of NSP, the City looked at areas where we could address this decline, stabilize neighborhoods, and provide rental opportunites for the citizens who have lost their homes. As a priority of NSP3, rental housing to our citizens is of utmost importance to the City. By providing opportunites in the targeted Areas of Greatest Need (AGN), the City will be able to allow displaced homeowners (who are now renters) to stay within their communities and continue to stabilize the population of these AGN's. The City identified areas which have the highest foreclosure rate and few vacancies. DRAFT 3. Definitions and Descriptions Definitions Term Definition 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 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 NSP3 program is affordable. Affordable means that monthly rents do not exceed 30% of the monthly gross income of eligible households as indicated in the table below: Household Income Level Affordable Rents Low Income & below Equal to 30% of the FY2010 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% of HUD AMI Descriti fans Term Definition Long -Term Affordability The City will ensure that NSP-assisted properties remain affordable to DRAFT 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. Amount Provided Minimum period of affordability in years Rehabilitation or acquisition of existing housing per unit 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 The NSP rehab Standards are attached. 4. Low -Income Targeting Low-income Set -Aside Amount Enter the low-income set -aside percentage in the first field. The field for total funds set aside will populate based on the percentage entered in the first field and the total NSP3 grant. Identify the estimated amount of funds appropriated or otherwise made available under the NSP3 to be used to provide housing for individuals or families whose incomes do not exceed 50 percent of area median income. Response: Total low-income set -aside percentage (must be no less than 25 percent): 26.32% Total funds set aside for low-income individuals = $1,200,000 Meeting Low-income Target Provide a summary that describes the manner in which the low-income targeting goals will be met. Response: The estimated amount of funds appropriated or otherwise made available under the NSP3 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 the area median income is approximately $1,200,000. This amount equals to 26.32% 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 NSP3 funding toward housing individuals and families whose income equals to or is less than 50 percent of the area median income, adjusted for family size. This goal will be met by Strategy B properties. DRAFT Low-income targeting: Strategy B: Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to rent or redevelop such homes and properties. $1,200,000 For more detailed information regarding the activities/strategies listed above, please refer to the Attachment entitled: NSP Information by Activity. 5. Acquisition and Relocation Demolition or Conversion of LMI Units Does the grantee intend to demolish or convert any low- and moderate -income dwelling units (i.e., <_ 80% of area median income)? Yes If yes, fill in the table below. Question Number of Units The number of low- and moderate -income dwelling units—i.e., <_ 80% of area median income —reasonably expected to be demolished or converted as a direct result of NSP-assisted activities. 10 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). 60 The number of dwelling units reasonably expected to be made available for households whose income does not exceed 50 percent of area median income. 24 6. Public Comment Citizen Participation Plan Briefly describe how the grantee followed its citizen participation plan regarding this proposed substantial amendment or abbreviated plan. Response: The City of Miami's Department of Community Development duly advertised to the general public through a newspaper of general circulation, the availability of the NSP substantial amendment and the solicited comments from City residents. The comment period, as defined by NSP regulations, is 15-days. The NSP3 substantial amendment was available through the Department's website and at the offices of the Department of Community Development located at 444 S.W. 2nd Avenue, 2nd Floor, Miami, Florida 33130 from January 26, 2011 through February 9, 2011. Please submit your comments in writing to: NSP Comment City of Miami -Department of Community Development 444 S.W. 2nd Avenue, 2nd Floor Miami, Florida 33130 Attn: Ann R. Kashmer DRAFT Surrnary of Public Comments Received. The summary of public comments received is included as an attachment. 7. NSP Information by Activity Enter each activity name and fill in the corresponding information. If you have fewer than seven activities, please delete any extra activity fields. (For example, if you have three activities, you should delete the tables labeled "Activity Number 4," "Activity Number 5," "Activity Number 6," and "Activity Number 7." If you are unsure how to delete a table, see the instructions above. The field labeled "Total Budget for Activity" will populate based on the figures entered in the fields above it. Consult the NSP3 Program Design Guidebook for guidance on completing the "Performance Measures" component of the activity tables below. Activity Number 1 CDBG Activity or Activities Strategy B: Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to rent or redevelop such homes and properties. Select all that apply: Eligible Use A: Financing Mechanisms Eligible Use B: Acquisition and Rehabilitation Eligible Use C: Land Banking Eligible Use D: Demolition Eligible Use E: Redevelopment 24 CFR 570.201(a) Acquisition and (b) Disposition National Objective Activity Description Low Moderate Middle Income Housing (LMMH) This program allows for the City or Developers to purchase or provide assistance, fully or partially, for the purchase of abandoned and/or foreclosed upon multi -family structures or single-family scattered units (minimum of 5) and rehabilitate them, if necessary, to meet the requirements of the South Florida Building code, and the NSP Rehabilitation Standards. This activity will be designated as rental housing for tenants who meet the 120 percent or below of area median income target. See NSP3 Information By Activity attachment for details. Location Description Upper East Side, East Little Havana/Shenandoah, or Flagler Source of Funding Dollar Amount NSP3 $1,943,1045.00 (Other funding source) (Other funding source) Total Budget for Activity $1,943,045.00 DRAFT Performance Measures Eligible tenants at or below 120 percent of the Area Median Income- LMMI. Projected housing units are 39. Projected Start Date 7/1/2011 Projected, End Date Responsible Organization 12/31/13 Name Location Administrator Contact. Info City Of Miami, Or Developer 444 S.W. 2nd Avenue, Miami, Florida Ann R. Kashmer 305.416.2097 Activity Activity Number 2 Strategy B: Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to rent or redevelop such homes and properties. Select all that apply: Eligible Use A: Financing Mechanisms Eligible Use B: Acquisition and Rehabilitation Eligible Use C: Land Banking Eligible Use D: Demolition Eligible Use E: Redevelopment CDBG Activity or Activities 24 CFR 570.201(a) Acquisition and (b) Disposition National Objective Activity Description Low -Income Housing to Meet 25% Set -Aside (LH25) This program allows for the City or Developers to purchase or provide assistance, fully or partially, for the purchase of abandoned and/or foreclosed upon multi -family structures or single-family scattered units (minimum of 5) and rehabilitate them, if necessary, to meet the requirements of the South Florida Building code, and the NSP Rehabilitation Standards. This activity will be designated as rental housing for tenants who meet the 50 percent or below of area median income set -aside target. See NSP3 Information By Activity attachment for details. Location Description Upper East Side, East Little Havana/Shenandoah, or Flagler Source of Funding Dollar Amount NSP3 $1,200,000.00 (Other funding source) (Other funding source) Total Budget for Activity $1,200,000.00 Performance Measures Eligible tenants at or below 50 percent of the Area Median Income- LI occupying the rehabbed abandoned or foreclosed upon property. Projected housing units are 24. Projected, Start Date 7/1/2011 Projected End Date 12/31/2013 Responsible Organization Name City Of Miami, Or Developer Location 444 S.W. 2nd Avenue, Miami, Florida Administrator Contact Info Ann R. Kashmer 305.416.2097 Activity. Number 3 DRAFT Activity Name Strategy E: Redevelopment of demolished or vacant properties. Select all that apply: Eligible Use A: Financing Mechanisms Eligible Use B: Acquisition and Rehabilitation Eligible Use C: Land Banking Eligible Use D: Demolition Eligible Use E: Redevelopment CDBG Activity or Activities 24 CFR 570.202 Eligible rehabilitation and preservation activities for demolished or vacant properties. National Objective Low Moderate Middle Income Housing (LMMH) Activity Description Purchase and Rehabilitation (New Construction) Program of Multi -Family and Scattered Single -Family Units This program allows for the City to purchase or to provide assistance, fully or partially, to a developer for the purchase of vacant (unoccupied structures or vacant lots) of multi -family structures or single family scattered site structures and rehabilitate them, if necessary, to meet the requirements of the South Florida Building Code and the NSP Rehabilitation Standards. This program also allows for the City to purchase or provide assistance, fully or partially, to a developer for the purchase of vacant (non -built upon lots) land to construct new multi -family structures or single-family scattered site units to meet the requirements of the South Florida Building Code and the City's NSP Green Standards. This activity will be designated as a rental activity only. Each single family scattered site project must include at least five (5) single family homes, which can include duplexes, tri-plexes or quadplexes. All units, or a pro-rata share of them, shall be rented to low-, moderate-, or middle -income families whose income does not exceed 120% of HUD's Area Median Income, adjusted for family size. See NSP3 Information By Activity attachment for details. Location Description Upper East Side, East Little Havana/Shenandoah, or Flagler Source of Funding NSP3 (Other funding source) (Other funding source) Dollar Amount $960,000.00 Total Budget for Activity $960,000.00 Performance Measures Eligible tenants at or below 120 percent of the Area Median Income- LMMI income tenants, occupying the rehabbed vacant or newly constructed property on vacant land. Projected housing units are 31. Projected Start Date 7/1/2011 Projected End Date Responsible Organization 12/31/2013 Name Location Administrator Contact Info City Of Miami Or Developer 444 S.W. 2nd Avenue, 2nd floor, Miami, FI Ann R. Kashmer, 305.416.2097 DRAFT NSP3 Information By Activity 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 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 Objective: LMMH (Low -,Moderate -,Middle -Income Housing) (4) Projected Start Date: July 1, 2011 (5) Projected End Date: December 31, 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: Upper Eastside, East Little Havana, or Hagler. (8) Activity Description: (9) Purchase and Rehabilitation Program of Multi -Family and Single-family Scattered Site 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 or single family scattered site structures and rehabilitate them, if necessary, to meet the requirements of the South Florida Building Code, the NSP Rehabilitation Standards, and the City's Green standards. This activity will be designated as a rental activity. Each single family scattered site project must include at least five (5) single family homes, which can include duplexes, tri-plexes or quadplexes. All units, or a pro-rata share of them, shall be rented to low-, moderate-, or middle -income families whose income does not exceed 120% of HUD's Area Median Income adjusted for family size. Total Budget: $1,943,045 (10) Performance Measures: 39 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 Housing Units Less than 50 percent AMI - Between 51-80 percent AMI 10 Between 81'120 percent AMI' 29 TOTAL: 39 Estimated Amount Strategy "B"- Low-income Targeting 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 Objective: LMMH (Low -,Moderate -,Middle -Income Housing) (4) Projected Start Date: July 1, 2011 (5) Projected End Date: December 31, 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@miarnigov.com (7) (8) (9) Location Description: Areas of Greatest Needs: Upper Eastside, East Little Havana, or Flagler. Activity Description: Purchase and Rehabilitation Program of Multi -Family Units and Single-family Scattered Site 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 or single family scattered site structures and rehabilitate them, if necessary, to meet the requirements of the South Florida Building Code, the NSP Rehabilitation Standards, and the NSP Green standards of the City. This activity will be designated as a rental activity only. Each single family scattered site project must include at least five (5) single family homes, which can include duplexes, tri-plexes or quadplexes. These units shall be rented to low income families whose income does not exceed 50% of HUD's Area Median Income adjusted for family size. Total Budget: $1,200,000 (10) Performance Measures: 24 Housing units The following are projected numbers. The City will target this program to the Areas of Greatest Needs: Upper Eastside, East Little Havana/Shenandoah, or Flagler. Income Level Less than 50 percent AMI;, Between 51-80 percent AMI Between'81120 percen TOTAL: Projected Housing Units 24 Estimated Amount 1,200,000.00 0 $1,200,000.00 (3) (4) (5) (6) (7) Strategy "E" Redevelopment of Demolished or Vacant Properties (2) Activity Type: Providing or improving permanent residential structures that will be rented to and occupied by a household whose income is at or below 120% of area median income. National Objective: LMMH (Low -,Moderate -,Middle -Income Housing) Projected Start Date: July 1, 2011 Projected End Date: December 31, 2013 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 Location Description: Areas of Greatest Need: Upper Eastside, East Little Havana/Shenandoah, or Flagler. (8) Activity Description: Purchase and Rehabilitation (or new construction) Program of Multi -Family and Single-family Scattered Site Units: This program allows for the City to purchase or to provide assistance, fully or partially, to a developer for the purchase of vacant (unoccupied structures or vacant lots) of multi -family structures or single family scattered site structures and rehabilitate them, if necessary, to meet the requirements of the South Florida Building Code and the NSP Rehabilitation Standards. This program also allows for the City to purchase or provide assistance, fully or partially, to a developer for the purchase of vacant (non -built upon lots) land to construct new multi -family structures or single-family scattered site units to meet the requirements of the South Florida Building Code and the City's NSP Green Standards. This activity will be designated as a rental activity only. Each single family scattered site project must include at least five (5) single family homes, which can include duplexes, tri-plexes or quadplexes. All units, or a pro-rata share of them, shall be rented to low-, moderate-, or middle -income families whose income does not exceed 120% of HUD's Area Median Income adjusted for family size. (9) Total Budget: $ 960,000 (10) Performance Measures: 31 Housing units The following are projected numbers. The City will target this program to the Areas of Greatest Needs: Upper Eastside, East Little Havana/Shenandoah, or Flagler. Income Level Less than 50 percent AM1 Between 51-80 percent AMI - Between81120 percent AMI 3;1 TOTAL: 31 Projected Housing Units Estimated Amount $ 960,000 $ 960,000.00 NSP3 - Zones Legend NW 12TH ST > PERIMETER R I <� W 62N1 J Eli WT15 Si I I I till 111111W 54T♦ �— m> N 46TH ' 111 s NWI O 1 21 ` ...21111111111 k Ii.1i imiltatilrii_ iii iiitS4118 ■ z 1111111111111111011 f.4 - lintt �� .,TH ST� _aOP'�/� lin Gy it 11 SUNSE Upper East Side East Little Havana & Shenandoah Flagler Z m EET CSWY WY NSP3 - Upper Eastside District 2 NE 95TH ST NE 94TH ST NE 92ND NE 90TH ST 8TH TER NE 88TH ST NE 87TH ST NE 91 ST TER nII �n1�j j: n ST f1Ai►j ��i r1►C ^ • i� ®/■M MI WI>!11#1s [!1l1��1 ■ o * i 1 41111111mini r • I III nisi ca � 1 11 ■®112I • l I NE 95TH ST i• ' NE94THST 0» z QJ NE 93RD ST rn e co D 4,N. NE 92ND ST -01 \4 _ NE 91STTER 0 NE 91 ST ST m NE 90TH ST NE 89TH ST NE 89TH ST NE 88TH ST NE 87TH ST 11111Writ !Pao se owe magi ®s 9 am ■a, —111 /11111/1 ■:. 111111 N1i11�_■ ®®1l11� fl IIIiliUli .!I 1## 1111111: 'A 1� 1U#IIIlI ,�#1`L`#r 11i1111IIII i1111 1®. i1111: IMEI 11IIIII5 NI IIIIAI® Block Group 12086921.5845000001301U3 120869215845000001301U4 Project Name : Upper East Side Neighborhood Housing Block Group Housing Block Group State LISPS HMDA Units Units Score Min 392 392 19 17 380 92 437 854 19 17 827 201 Total Neighborhood Housing Units: 829 Neighborhood NSP3 Score: 19,00 State Minimum Threshold NSP3 Score: 17 Neighborhood ID: 6061950 NSP3 Planning Data Grantee ID: 1219680E Grantee State: FL Grantee Name: MIAMI Grantee Address: 444 S,W. 2nd Avenue Miami Florida 33130 Grantee Email: akashmer@miamigov,com Neighborhood Name: Upper East Side Date:2011-01-13 00:00:00 NSP3 Score The neighborhoods identified by the NSP3 grantee as being the areas of greatest need must have an individual or average combined index score for the grantee's identified target geography that is not less than the lesser of 17 or the twentieth percentile most needy score in an individual state, For example, if a state's twentieth percentile most needy census tract is 18, the requirement will be a minimum need of 17. If, however, a state's twentieth percentile most needy census tract is 15, the requirement will be a minimum need of 15. If more than one neighborhood is identified in the Action Plan., HUD will average the Neighborhood Scores, weighting the scores by the estimated number of housing units in each identified neighborhood, Neighborhood NSP3 Score: 19 State Minimum Threshold NSP3 Score: 17 Total Housing Units in Neighborhood: 829 Area Benefit Eligibility Percent Persons Less than 120% AMI: 79,87 Percent Persons Less than 80% AMI: 59.14 Neighborhood Attributes (Estimates) Vacancy Estimate USPS data on addresses not receiving mail in the last 90 days or "NoStat" can be a useful measure of whether or not a target area has a serious vacancy problem. For urban neighborhoods, HUD has found that neighborhoods with a very high number vacant addresses relative to the total addresses in an area to be a very good indicator of a current for potentially serious blight problem. The USPS "NoStat" indicator can mean different things, In rural areas, it is an indicator of vacancy. However, it can also be an address that has been issued but not ever used, it can indicate units under development, and it can be a very distressed property (most of the still flood damaged properties in New Orleans are NoStat). When using this variable, users need to understand the target area identified. In addition, the housing unit counts HUD gets from the US Census indicated above are usually close to the residential address counts from the USPS .below. However, if the Census and USPS counts are substantially different for your identified target area, users are advised to use the information below with caution. For example if there are many NoStats in an area for units never built, the USPS residential address count may be larger than the .Census number; if the area is a rural area largely served by PO boxes it may have fewer addresses than housing units. USPS Residential Addresses in Neighborhood: 803 Residential Addresses Vacant 90 or more days (USPS, March 2010): 23 Residential Addresses NoStat (USPS, March 2010): 23 1/3 Foreclosure Estimates HUD has developed a model for predicting where foreclosures are likely. That model estimates serious delinquency rates using data on the leading causes of foreclosures - subprime loans (HMDA Census Tract data on high cost and highly leveraged loans), increasing unemployment (BLS data on unemployment rate change), and fall in home. values (:FHFA:data on house price change). The predicted serious delinquency rate is then .used to apportion the state total counts of foreclosure starts (from the Mortgage Bankers Association) and REOs (from RealtyTrac) to individual block groups. Total Housing Units to receive a mortgage between 2004 and 2007: 195 Percent of Housing Units with a high cost mortgage between 2004 and 2007: 29,3 Percent of Housing Units 90 or more days delinquent or in foreclosure: 18 Number of Foreclosure Starts in past year: 21 Number of Housing Units Real Estate Owned July 2009 to June 2010: 7 HUD is encouraging grantees to have small enough target areas for NSP 3 such .that their dollars will have a visible impact on the neighborhood. Nationwide there have been over 1.9 million foreclosure completions in the past two years. NSP 1, 2, and 3 combined are estimated to only be able to address 100,000 to 120,000 foreclosures. To stabilize a neighborhood requires focused Investment. Estimated number of properties needed to make an impact in identified target area (20% of REO in past year): 4 Supporting Data Metropolitan Area (or non -metropolitan area balance) percent fall in home value since peak value (Federal Housing Finance Agency Horne Price Index through June 2010): -39.4 Place (if place over 20,000) or county. unemployment rate June 2005*: 4.6 Place (if place over 20,000) or county unemployment rate June 2010*: 12.9 'Bureau of Labor Statistics Local Area Unemployment Statistics Market Analysis: HUD Is providing the data above as a. tool for both neighborhood targeting and to help inform the strategy development. Some things to consider: 1. Persistent Unemployment. Is this an area with persistently high unemployment? Serious consideration should be given to a rental strategy rather than a homeownership strategy. 2. Home Value Change and Vacancy. Is this an area where foreclosures are largely due to a combination of falling home values, a recent spike in unemployment, and a relatively low vacancy rate? A down payment assistance program may be an effective strategy. 3. Persistently High Vacancy. Are there a high number of substandard vacant addresses in the target area of a community with persistently high unemployment? A demolition/land bank strategy with selected acquisition rehab for rental or lease -purchase might be considered. 4. Historically low vacancy that is now rising. A targeted strategy of acquisition for homeownership and rental to retain or regain neighborhood stability might be considered, 5. Historically high cost rental market, Does this market historically have very high rents with low vacancies? A strategy of acquiring properties and developing them as long-term affordable rental might be considered. Latitude .and Longitude of corner points -80.184832 25,853624 -80.179532 25,853701-8.0.179124 25.854029-80.173699 25.854029 -80.176367 25,848053 -80,184585 25..847831 2/3 Blocks Comprising Target .Neighborhood 120860013013000,.120860013013014,120860.013013013,120860013013012,120860013013011, 120860013013010,120860013013009,120860013013008,120860013013007,120860013013006, 120860013013001,120860013013002,120860013013003,12086001301.3005,120860013013004, 12086001301400'5,120860013014007,12.0860013014009,120860013014008,120860013014006, 3/3 NSP3 - East Little Havana & Shenandoah 11811m q =1111_ 1, EN 11111111. MIME! QIIII? I111:. II:lu1:lu I MII1111 10111111 V'illl 2 =�IuI 11 Palmall an Imo go .I1P Imo um ull-u111BB111! BE sin ■11m1 ieIUI as "Iffii NMI imam nummuz uumudo '1®h IBIII111111i ;1{II�1(` 1111lI11°Il0$ :11L 1llLIIII®® Minn 11111111swum 00018 1„ 101111111r MINIM MINIM ■1u/1u11 IIU 11 l /111U11 180 Mein pule* ullilllull 11 nni[li oyeuri luul Ilirirn lthllli L Ir 1 1 1 lu n5" %lin114.1 m�°! 'a MIME •l;umt NUMB�1pp 1t: a!Mg,: MIMI Uu' lei la1:.__ E. 1 itil1! Muir Er rrrr�rr�r��� n �I® 11 UDR* hill 1 11 .;u..101 11 % t11111un`11 I t �Lf, ■uuU1111 [� Idfllh • Ills! mill® 901 211 Project Name : ELH and Shenandoah Block Group Neighborhood Housing Block Group Housing Block Group State USPS HMIJA Units Units Score Min 120869215845000005301U3 381 381 19 17 364 28 120869215845000005301U4 123 199 19 17 190 14 120869215845000005301U5 621 645 19 17 617 47 120869215845000005301U6 799 799 19 17 764 58 120869215845000005301.U7 730 730 19 17 698 53 120869215845000005301U8 514 581 19 17 556 42 120869215845000005402U1 801 868 20 17 840 87 12D869215845000005402U2 766 766 20 17 741 77 120869215845000005402U3 447 685 20 17 663 69 120869215845000005402U4 466 813 20 17 787 82 120869215845000006402U4 559 559 20 17 452 120 120869215845000006402U5 191 331 20 17 268 71 120869215845000006403U1 579 579 20 17 468 116 120869215845000006403U3 212 413 20 17 334 83 Total Neighborhood Housing Units: 7189 Neighborhood NSP3 Score: 19,56 State Minimum Threshold NSP3 Score: 17 Neighborhood ID: 9234802 NSP3 Planning Data Grantee ID: 1219680E Grantee State: FL Grantee Name: MIAMI Grantee Address: 444 S.W. 2nd Avenue Miami Florida 33130 Grantee Email: akashmer@miamigov,com Neighborhood Name: ELH and Shenandoah Date:2011-01-12 00:00:00 NSP3 Score The neighborhoods identified by the NSP3 grantee as being the areas of greatest need must have an individual or average combined index score for the grantee's identified target geography that is not less than the lesser of 17 or the twentieth percentile most needy score in anindividual state. For example, if a state's twentieth percentile most needy census tract is 18, the requirement will be a minimum need of 17. If, however, a state's twentieth percentile most needy census tract is 15, the requirement will be a minimum need of 15. If more than one neighborhood is Identified In the Action Plan, HUD will average the Neighborhood Scores, weighting the scores by the estimated number of housing units .in each identified neighborhood, Neighborhood NSP3 Score: 19.56 State Minimum Threshold NSP3 Score: 17 Total Housing Units in Neighborhood: 7189 Area Benefit Eligibility Percent Persons Less than 120% AML 89.25 Percent Persons Less than 80% AMI: 77.96 Neighborhood Attributes (Estimates) Vacancy Estimate USPS data on addresses not receiving mail in the last 90 days or "NoStat" can be a useful measure of whether or not a target area has a serious vacancy problem, For urban neighborhoods, HUD has found that neighborhoods with a very high number vacant addresses relative to the total addresses in an area to be a very good indicator of a current for potentially serious blight problem, The USPS "NoStat" indicator can mean different things. In rural areas, it is an indicator of vacancy. However, it can also be an address that has been issued but not ever used, It can indicate units underdevelopment, and it can be a very distressed property (most of the still flood damaged properties In New Orleans are NoStat). When using this variable, users need to understand the target area Identified, In addition, the housing unit counts HUD gets from the US Census indicated above are usually close to the residential address counts from the USPS below. However, If the Census and USPS counts are substantially different for your Identified target area, users are advised to use the information below with caution. For example if there are many NoStats in an area for units never built, the USPS residential address count may be larger than the Census number; if the area Is a rural area largely served by PO boxes it may have fewer addresses than housing units. USPS Residential Addresses in Neighborhood:.6675 Residential Addresses Vacant 90 or more days (USPS, March 2010): 108 Residential Addresses NoStat (USPS, March 2010): 64 1/3 Foreclosure .Estimates HUD has developed a model for predicting where foreclosures are likely. That model estimates serious delinquency rates using data o.n the leading causes of foreclosures - subprime loans (HMDA Census Tract data on high cost and highly leveraged loans), Increasing unemployment (BLS data on unemployment rate change), and fall in home values (FHFA data on house price change). The predicted serious delinquency rate is then used to apportion the state total counts of foreclosure starts (from the Mortgage Bankers Association) and REOs (from RealtyTrac) to individual block groups. Total Housing Units to receive a mortgage between 2004 and 2007: 799 Percent of Housing Units with a high cost mortgage between 2004 and 2007: 31.86 Percent of Housing Units 90 or more days delinquent or in foreclosure: 20.23 Number of Foreclosure Starts in past year: 106 Number of Housing Units Real Estate Owned July 2009 to June 2010: 31 HUD is encouraging grantees to have small enough target areas for NSP 3 such that .their dollars will have a visible impact on the neighborhood. Nationwide there have been over 1,9 million foreclosure .completions in the past two years. NSP 1, 2, and 3 combined are estimated to only be able to address 100,000 to 120,000 foreclosures. To stabilize a neighborhood requires focused investment, Estimated number of properties needed to make an impact in identified target area (20% of REO in past year): 22 Supporting Data Metropolitan Area (or non -metropolitan area balance) percent fall in home value since peak value (Federal Housing Finance Agency Home Price Index through June 2010): -39.4 Place (if place over 20,000) or county unemployment rate June 2005: 4,6 Place (if place over 20,000) or county unemployment rate June 2010': 12.9 'Bureau of Labor Statistics Local Area Unemployment Statistics Market Analysis: HUD is providing the data above as a tool for both neighborhood targeting and to help inform the strategy development. Some things to consider: 1. Pe.rsistent Unemployment. Is this an area with persistently high unemployment? Serious consideration should be given to a rental strategy rather than a homeownership strategy. 2. Horne Value Change and Vacancy. is this an area where foreclosures are largely due to a combination of falling home values, a recent spike in unemployment, and a relatively low vacancy rate? A down payment assistance program may be an effective strategy, 3. P.ersistently High Vacancy. Are there a high number of substandard vacant addresses in the target area of a community with persistently high unemployment? A demolition/land bank strategy with selected acquisition rehab for rental or lease -purchase might be considered. 4. Historically low vacancy that is now rising. A targeted strategy of acquisition for homeownership and rental to retain or regain neighborhood stability might be considered, 5. Historically high cost rental market. Does this market historically have very high rents with low vacancies? A strategy of acquiring properties and developing them as long-term affordable .rental might be considered. Latitude and Longitude of corner points -80.229249 25.771451 -80.214701 25.772726 -80.214357 25.761982 -80.228605 25.761441 2/3 Blocks Comprising Target Neighborhood 120860053013000, 120860053013001, 120860053013003, 120860053013002, 120860053014004, 120860053.014003,120860053014002,120860053015004,120860053015006,120860053.015009, 120860053015008, 120860053015007, 120860053015005, 120860053015003., 120860053016000, 120860053016004, 120860053016007, 120860053016006, 120860053016005, 12.0860053016003, 120860053016001, 120860053016002, 120860053017000, 120860053017004, 120860053017007, 120860053017006, 120860053017005, 120860053017003, 120860053017.001, 120860053017002, 120860053018004,120860053018009, 120860053018008,120860053018007,120860053018006, 120860053018005, 120860054021005, 120860054021007, 120860054021008, 120860054021006, 120860054021004, 120860054022000, 120860054022002, 120860054022004, 120860054022006, 120860054022007,120860.054022005,120860054022003,120860054022001,120860054023000, 120860054023004,120860054023007,120860054023003,120860054024006.,120860054024011, 120860054024009, 1.20860054024008, 120860054024007, 120860064024000, 120860064024004, 120860064024009, 120860064024008, 120860064024007, 120860064024006, 120860064024005, 120860064024003, 120860064024001, 120860064024002, 120860064025000, 120860064025004, 120860064025006,120860064025007,120860064025005,120860064031000,120860064031001, 120860064031002,120860064031004,120860064031006,120860064031.008,120860064031017, 120860064031016,.120860064031015,120860064031014,120860064031013,120860064031012, 120860064031011, 12086006403101.0, 120860064031009, 120860064031019, 120860064031018, 120860064031007, 120860064031005, 120860064031003, 120860064033000, 120860064033001, 120860064033003, 120860064033004, 120860064033002, 3/3 NSP3 - Flagler District 4 11@ -11111 NW 11TH ST 11I1 11111 �_111 NW 12TH ST ItlliI■. rmippm 11111111111 PIMA SW 11TH ST SW 12TH ST SW 13TH TER SW 14TH ST IAMI CIR PERIMETER RD NW 20TH •T -Itl "JRtltl Eo ill i, :u1L �wl•,i"i t l lwl1 ! �t�hNy�I1�G �1�. ii�i i�61��j[j 49 mill }Ill►1 1f1ni Ilcttt��i Intl Iv,4 1s:1IIS 11111n1S Hill 8(11 �•�A111111_ IMBUE .11nn1P: =Ii111111ii (11111111 1111 Wi WWI 1111111110 `711111Tfa in1'l is I - 101 11111 M f11�1�1�1i111 51111Iii n 1111 111 11111 111/11111 annual 11011/11111/ 11I1 11111111111 11111 '1il lilllilU�t111�O! 11w�g4061,111! u_ 0 ISPOAV 110 inl -- 11a1, 1t• ti� !>�'��� ltinf 1 1 u�m 1111 Erasmut Inn niuIi 0111 it i �. n:nu11 H HHI 111f11 IA linI.n� ilI!11Il. 1 • Illttl 11 n 11111E t Ito t 1 D 1! {{111 .LI r1lN1 i. n1I ill llIBI 111111111 Illil 111 0 11II1�1l11 Illl 1 1111111 11I➢1 111 0111 111 i111i111111 111 p, r� 0 m z 0 VENETIAA SOROLLA AV Block Group 120869215845000005801U1 120869215845000005801U2 120869215845000005801U3 120869215845000005801U4 120869215845000005802U1 120869215845000005802U2 Neighborhood Units 227 519 448 695 621 633 Project Name Flagler Housing Block Group Housing Units 475 519 448 695 621 633 Total Neighborhood Housing Units: 3143 Neighborhood NSP3 Score: 20,00 State Minimum Threshold NSP3 Score: 17 Block Group State USPS HMDA Score Min 20 17 450 164 20 17 491 179 20 17 424 154 20 17 658 239 20 17 601 207 20 17 613 211 Neighborhood ID: 3784484 NSP3 Planning Data Grantee ID: 1219680E Grantee State: FL Grantee Name: MIAMI Grantee Address: 444 S.W. 2nd Avenue Miami Florida 33130 Grantee Email: akashmer@miamigov.com Neighborhood Name; Flagler Date:2011-01-12 00:00:00 NSP3 Score The neighborhoods identified by the NSP3 grantee as being the areas of greatest need must have an individual or average combined index score for the grantee's identified target geography that is not Bless than the lesser of 17 or the twentieth percentile most needy score in an individual state. For example,, .if a state's twentieth percentile most needy census tract is 18, the requirement will be a minimum need of 17. If, however, a state's twentieth percentile most needy census tract is 15, the requirement will be a minimum need of 15. If more than one neighborhood is identified in the Action Plan, HUD will average the Neighborhood Scores, weighting the scores by the estimated number of housing units in each identified neighborhood. Neighborhood NSP3 Score: 20 State Minimum Threshold NSP3 Score: 17 Total Housing Units in Neighborhood: 3143 Area Benefit Eligibility Percent Persons Less than 120% AMI: 72.04 Percent Persons Less than 80% AMI: 55.08 Neighborhood Attributes (Estimates) Vacancy Estimate USPS data on addresses not receiving mail in the last 90 days or "NoStat" can be a useful measure of whether or not a target area has a serious vacancy problem.For urban neighborhoods, HUD has found that neighborhoods with a very high number vacant addresses relative to the total addresses in an area to be a very good indicator of a current for potentially serious blight problem. The USPS "NoStat" indicator can mean different things. in rural areas, it is an indicator of vacancy. However, it can also be an address that has been Issued but not ever used, It can indicate units under development, and it can be a very distressed property (most of the still flood damaged properties in New Orleans are NoStat). When using this variable, users need to understand the target area Identified. In addition, the housing unit counts HUD gets from the US Census indicated above are usually close to the residential address counts from the USPS below. However, if the Census and USPS counts are substantially different for your Identified target area, users are advised to use the information below with caution. For example if there are many NoStats in an area for units never built, the USPS. residential address count may be larger than the Census number; if the area Is a rural area largely served by PO boxes it may have fewer addresses than housing units. USPS Residential Addresses in Neighborhood: 3002 Residential Addresses Vacant 90 or more days (USPS, March 2010): 71 Residential Addresses NoStat (USPS, March 2010): 8 1/3 Foreclosure Estimates HUD has developed a model for predicting where foreclosures are likely. That model estimates serious delinquency rates using data on the leading causes of foreclosures - subprime loans (HMDA Census Tract data on high cost and highly leveraged loans), increasing unemployment (BLS data on• unemployment rate change), and fall in home values (FHFA data on house price change). The predicted serious delinquency rate Is then used to apportion the state total counts of foreclosure starts (from the Mortgage Bankers Association) and REOs (from RealtyTrac) to individual block groups. Total Housing Units to receive a mortgage between 2004 and 2007: 1068 Percent of Housing Units with a high cost mortgage between 2004 and 2007: 37.54 Percent of Housing Units 90 or more days delinquent or in foreclosure: 23.86 Number of Foreclosure Starts in past year: 157 Number of :Housing Units Real Estate Owned July 2009 to June 2010: 46 HUD is encouraging grantees to have small enough target areas for NSP 3 such that their dollars will have a visible impact on the neighborhood. Nationwide there have been over 1.9.million foreclosure completions in the past two years. NSP 1, 2, and 3 comb.ined are estimated to only be able to address 100,000 to 120,000 foreclosures. To stabilize a neighborhood requires focused investment, Estimated number of properties needed to make an impact in identified target area (20% of REO in past year): 31 Supporting Data Metropolitan Area (or non -metropolitan area balance) percent fall in home value since peak value (Federal Housing Finance Agency Home Price Index through June 2010): 39,4 Place (if place over 20,000) or county unemployment rate June 2005': 4.6 Place (if place over 20,000) or county unemployment rate June 2010': 12.9 'Bureau of Labor Statistics Local Area Unemployment Statistics Market Analysis: HUD is providing the data above as a tool for both neighborhood targeting and to help inform the strategy development, Some things to consider: 1, Persistent Unemployment. Is this an area with persistentlyhigh unemployment? Serious consideration should be given to a rental strategy rather than a homeownership strategy.. 2. Home Value Change and Vacancy. Is this an area where foreclosures are largely due to a combination of falling home values, a recent spike in unemployment, and a relatively low vacancy rate? A down payment assistance program may be an effective strategy. 3. Persistently High Vacancy. Are there a high number of substandard vacant addresses in the target area of a community with persistently high unemployment? A demolition/land hank strategy with selected acquisition rehab for rental or lease -purchase might be considered. 4. Historically low vacancy that Is now rising. A targeted strategy of acquisition for homeownership and rental to retain or regain neighborhood stability might be considered. 5. Historically high cost rental market, Does this market historically have very high rents with low vacancies? A strategy of acquiring properties and developing them as long-term affordable rental might be considered. Latitude and Longitude of corner points -80,300274 25.770484 -80.299888 25.763103 -80.273409 25.764107 -80,273623 25.771373 2/3 Blocks Comprising Target Neighborhoo 120860058011002,120860058011003, 120860058011015,120860058011011, 120860058012004,120860058012006, 120860058012015,120860058012014, 120860058012010,120860058012009, 120860058012005,120860058012003, 120860058013014,12.0860058013013, 120860058013009,120860058013008, 120860058013018.,120860058013017, 120860058.013002,120860058013001, 120860058014001,120860058014004, 120860058014032,120860058014031, 120860058014018,120860058014017, 120860058014013,1208600.58014012, 120860058014026,120860058014025, 120860058014021,120860058014020, 120860058021000,120.860058021001, 120860058021016,120860058021015, 120860058021011,120860058021010, 120860058021025,120860058021024, 120860058021020,120860058021019, 120860058021004,120860058021002, 120860058022005,120860058022007, 120860058022013,120860058022012, 120860058022008,120860058022026, 120860058022022, 120860058022021, d . 120860058011001, 120860058011010, 120860058011016, 120860058012000.,12086005801.200'1,120860058012002, 120860058012008,120860058012017,120860058012'016, 120860058012013,12086005801.2012,120860058012011, 120860058012019, 120860058012018, 120860058012007, 120860058013000, 120860058013003, 120860058013005, 120860058013012, 120860058013011., 120860058013010, 120860058013007, 120860058013006, 120860058013019, 120860058013016,120860058013015,120860058013004, 120860058014000, 120860058014002, 120860058014003, 120860058014006, 120860058014008, 120860058014010, 120860058014030, 120860058014029, 12.0860058014019, 1208600580'14016, 120860058014015, 120860058014014, 120860058014011, 12.0860058014028, 120860058014027, 120860058014024, 120860058014023, 120860058014022, 120860058014009, 120860058014007, 120860058014005, 12.086005802100.3,120860058021005,120860058021007, 120860058021014,120860058021013,120860058021012, 120860058021009,120860058021008,120860.058021026, 120860058021023,120860058021.022,120860058021021, 120860058021018,120860058021017,120860058021006, 120860058022000, 120860058022001, 120860058022003, 120860058022016, 120860058022015, 120860058022014, 120860058022011, 120860058022010, 120860058022009, 120860058022025, 120860058022024, 120860058022023, 120860058022020,120860058022019,120860058022018, 120860058022017, 120860058022006, 120860058022004, 120860058022002, 3/3 Neighborhood Stabilization Program ("NSP") Rehabilitation Standards City of Miami Department o.f Community Development Rehabilitation Standards Rev, April, 2010 I. Introduction Mission and Housing values The mission of the City of Miami Department of Community Development is to assist in creating a viable urban community for the neediest persons in our City while reducing poverty, embracing diversity, assisting with economic development, and improving the overall quality of life by providing equal access to safe, decent and affordable housing. The values that flow from this mission for this program are as follows: Increased energy efficiency; Affordable operating costs; Accessibility for persons with disabilities; Performance and durability; Historically sensitive exteriors; Economic life cycle costs; Balanced initial costs; and Lead -safe housing. Applicable Laws and Regulations The City of Miami NSP Program intends to build and preserve affordable housing units in full compliance with the following statutory and regulatory requirements: • Title III of Division B of the Housing and Economic Recovery Act of 2008 ("H.E.R.A.") ; • Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u, if applicable; • Code of Federal Regulations ("C.F.R."), Title 24, Section 135 • Davis -Bacon Act if applicable; • C.F.R., Title 24, Part 570, Subparts A, C, D, J, K, and 0; • National .Affordable Housing Act; • Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as amended ("U.R.A."); • Lead -Based Paint Poisoning Prevention Act; • HUD Lead -Based Paint Regulation (24 CFR Part 35); • National Enviromnental Policy Act ("N.E.P.A."); • Office of Management and Budget ("O.M.B."), O.M.B. Circular A-87 revised, "Cost Principles for State, Local, and Indian Tribal Governments," ; • C.F.R., Title 24, Part 85, "Uniform Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments,"; • Local Housing Codes: Any applicable local housing codes; • Federal Housing Code: Housing Quality Standards; • Life Safety Code In the event these standards are found to conflict with the State or Federal code, now or in the future, the State or Federal code will take precedence. The Program shall seek guidance and strive to conform to the following standards, to the extent financial resources are available for a specific project: Accessibility: ANSI standards for handicapped accessibility. Federal Fair Housing Act; Multiple Dwelling Law; Federal Fair Housing Act; and; Federal Labor Standards regulatory requirements (Davis -Bacon Related Acts). Exceptions: On a case -by -case basis deviations from the minimum requirements of this standard will be permitted with approval of the Department of Community Development. Rehabilitation will comply with the local minimum housing code standards and Chapter 553, Florida Statutes. IL Site Improvements Soil Treatments for Lead Hazards Repair Standard: Interim standards - 1 year - will require monitoring to ensure continued effective control methods, Replacement - 20 years. Play Areas: Bare soil play areas frequented by children under the age of six years shall be tested for lead content. Any bare soil over 400 g/g of lead in lead shall be covered with a reinforced landscape cloth and impermanent surface covering e.g. gravel, bark, sod, or artificial turf containing not more than 200 g/g of lead. Loose impermanent covering such as bark or gravel shall be applied in a thickness of not less than 6 inches. Other Bare Soil: Bare soil outside of play areas shall be tested for lead content. Bare soil over 2000 g/g of lead in lead and totaling more than 9 square feet per property shall be covered with a reinforced landscape cloth or other impermanent surface covering containing not more than 200 g/g of lead, an interim control measure which prevents children=s access to the bare soil. Soil lead levels above 5000 g/g of lead require abatement. Trees Repair Standard: Minimum Life: NA Trees that are too close to the structure or threaten the structure shall be trimmed or removed. Otherwise, shade trees shall be preserved whenever possible. Replacement Standard: NA Landscaping A moderate amount of landscaping will be installed to improve the appearance of the property. See Green Communities Criteria Checklist 3.3. Outbuildings Repair Standard: Minimum Life: I year Unsafe/illegal and blighted structures, including outbuildings, sheds, garages and barns, will be removed if it is not financially feasible to complete the repairs required to make them structurally sound and leak free with lead hazards stabilized. Replacement Standard: NA No replacement of outbuildings is allowed. Paving and walks Repair Standard: Minimum Life: 5 years Badly deteriorated, essential paving, such as front sidewalks, will be repaired to match. Non -essential deteriorated paving such as sidewalks that are unnecessary, will be removed and appropriately landscaped. Replacement Standard: Essential walks and drives shall be replaced with concrete. IIL Exterior Surfaces Exterior Lead Hazards Repair Standard: All exterior paint shall be stabilized using lead -safe .practices. Replacement Standard: Leaded components shall be replaced or the paint removed to create a lead-free exterior. See Green Communities Criteria Checklist #7.1. Exterior Steps and Decks Repair• Standard: Minimum Life: 5 years Steps, stairways, and porch decks will be. structurally sound, reasonably level, with smooth and even surfaces. Replacement Standard: 20 years New steps and stairways shall be constructed of preservative treated lumber in conformance with local code, or of masonry. Porch decks shall be replaced with tongue and groove pine. Exterior Railings Repair Standard: Minimum Life: 5 Years Handrails will be present on one.side of all interior and exterior steps or stairways with more than two risers, and aroundporches or platforms over 30" above ground level. Railing repairs will be historically sensitive. Replacement Standard: Minimum Life: 10 Years Railings shall be wrought iron. Exterior Cladding Repair Standard: Minimum Life: 10 Years Siding and trim will be intact and weatherproof. All exterior wood components will have a minimum of two continuous coats of paint, and no exterior painted surface will have any deteriorated paint, Replacement Standard: Minimum Life: 20 Years Historically sensitive vinyl siding over house wrap, or replacement of original materials with like materials, where cost-effective. See .Green Communities Criteria Checklist #7.1 Exterior Hardware Repair Standard: NA Minimum Life: 10 Years Replacement Standard: M ust meet building code. IV, Foundations and Structure Foundations Repair Standard: Minimum Life: 20± Years Foundations will be sound, reasonably level, and free from movement. Replacement Standard: Must meet building code. Structural Walls Repair. Standard: Minimum Life: 15 Years Structural framing and masonry shall be free from visible deterioration. rot, or serious termite damage. be adequately size for current loads. Prior to rehab, all sagging floor joists or rafters will be visually inspected. and significant structural damage and its cause will be corrected. Replacement Standard: Must meet building code. Firewalls Repair Standard: Minimum Life: 5 Years Party walls shall be maintained without cracks and plaster deterioration and covered with 5/8" type X gypsum, ,glued and screwed to studs. Replacement Standard Minimum Life: 10 Years V. Windows and Doors Exterior Doors Repair Standard: Minimum Life: 10 Years Doors shall be solid, weather .stripped, operate smoothly, and include a peep site, a dead bolt, and an entrance lock set. Replacement Standard: Minimum Life: 10 Years All replacement doors at the front of the property will be historically sensitive and Energy -Star rated. Steel six- panel doors may be installed at entrances not visible from the front street, Dead -bolt locks will be installed on all doors, Windows Repair Standard: Minimum Life: 10 Years All single glazed windows shall be replaced with Energy -Star rated windows. Operable windows shall have a locking device and mechanism to remain partially open. Dilapidated lead -containing windows should be replaced whenever the budget allows with impact windows or shutters. Replacement Standard: Double -glazed, double or single hung. PVC, low E, one over one, with historically sensitive snap -in grids and a minimum R-value of 2. (Energy Star ) Window Replacement Repair Standard: NA Replacement Standard: Minimum Life: 20 Years All windows must be replaced with Energy -Star rated windows. Bedrooms, kitchens and baths shall have one operable window with a screen. Interior Doors/Placement Repair Standard: Minimum Life: 10 Years All bedrooms, baths and closets shall have well -operating doors. Replacement Standard: Minimum Life: 10 Years Hollow core, pressed wood product with brass plated bedroom lockset. VI® Roofing Pitched Roofs Repair Standard: Minimum Life: 10 Years Missing and leaking shingles and flashing shall be repaired on otherwise functional roofs. Slate roofs shall be repaired when at all possible. Antennae shall be removed. Replacement Standard: Minimum Life: 25 Years Fiberglass asphalt, three -tab, class A shingles, weighing at least 200 and up to 240 lbs. with a pro -rated 25 year warranty with continuous ridge vent. Energy -Star rated wherever feasible. Flat and Low Slope Roofing Repair Standard: Minimum Life: 10 Years Built-up roofing. flashing and accessories shall be repaired wherever a 5-year leak free warranty is available from a certified roofing company. Replacement Standard: Minimum Life: 20 Years Fully adhered EPDM over 112" insulation board. VII. Insulation and Ventilation Insulation Repair Standard: NA Replacement Standard: Minimum Life: 15 Years Attic areas and crawl space will be insulated. The goal for .attic insulation is R-49, and for crawl spaces R- 19. Frame walls will be insulated with fiberglass batts if the wall finish is removed, and with high density cellulose otherwise. Plastic vapor barriers will be placed over bare soil in crawl spaces. Attic Ventilation. Repair Standard: NA Replacement Standard: Minimum life: 20 Years Attics will be ventilated with.a minimum of 1 square foot of free vent for each 300 square feet of roof area, Kitchen Ventilation .Repair Standard: NA Replacement Standard: Minimum Life: 5 Years Range hoods or exhaust fans shall be exterior ducted. See Green Communities Criteria Checklist#7.13 Bath Ventilation Repair Standard: NA Replacement Standard: Minimum Life: 5 Years Exterior ducted 70 CFM. 20 somes with separate switch in all full baths. VIIIo Interior Standards Lead -containing Components Repair Standard Deteriorated lead -based paint on walls, trim, doors, and cabinets must be stabilized using lead -safe work practices. Or, a liquid encapsulant can be applied on components when the surface is deemed suitable for such coatings. Replacement Standard: At the owner's request, when funding is sufficient, lead -containing walls, trim, doors and cabinets identified during a lead -paint inspection can be replaced or enclosed as appropriate. Flooring Repair Standard: Minimum Life: 3 Years Bathroom and kitchen floors shall be rendered smooth and cleanable using polyurethane or by being covered with water-resistant vinyl flooring or ceramic tile. Damaged wood floors will be repaired. Basement floors shall be continuous concrete. Replacement Standard: Minimum Life: 6 Years Baths shall receive vinyl sheet goods over plywood underlayment. Kitchens shall be vinyl composition tile or ceramic tile over plywood underlayment. New basement slabs shall be at least 3" thick and a 6-mil vapor barrier. See Green Communities Criteria Checklist #7.9a & 7.9b. Closets Repair Standard: Minimum Life: 5 Years All bedrooms shall have closets with a door, clothes rod, and shelf, Replacement Standard: Minimum Life: 15 Years All bedrooms shall have 4' long by 2' wide closets with bi-fold door and wire shelf. Interior Walls and Ceilings Repair Standard: Minimum Life: 5 Years All holes and cracks shall be repaired to create a continuous surface and any deteriorated paint should be stabilized using lead -safe measures. Replacement Standard: Minimum Life: 10 Years Walls shall be plumb, ceiling level with a smooth finish on at least 1/2" gypsum. Additional Reference: American Gypsum Association Hazardous Materials Repair Standard: Minimum Life: NA Asbestos, lead paint, and other hazards, when identified, shall be addressed in conformance with applicable local, state, and federal laws. Rehabilitated properties shall be cleaned to pass a lead dust clearance test to the levels prescribed by HUD regulations. IX. Electric Service Repair Standard: Minimum Life: 10 Years Main distribution panels shall have a main disconnect, at least 7 circuits, a 150 amp minimum capacity and be adequate to safely supply power to all existing and proposed electrical devices. Replacement Standard: Minimum Life: 15 Years 150 amp, main disconnect panel with at least 16 circuit breaker positions. Exterior Electric Repair Standard: Minimum Life: 7 Years All entrances will be well lighted and either switched at the interior side of the door, or the light will be controlled by a photoelectric cell. Motion actuated security lighting will be installed at the rear and sides ofproperties where indicated to increase safety. All dwelling units will have at least one exterior, GFCI protected, electrical receptacle. Replacement Standard: NA See Green Communities Criteria Check List # 5.3b Interior Electric Distribution Repair Standard: Minimum Life: 7 Years Exposed knob and tube shall be replaced. Every room will have a minimum of two duplex receptacles, placed on separate walls and one light fixture or receptacle switched at each room entrance. Where the source wiring circuit is accessible (Le. first floor above .basements, in gutted rooms, etc.), receptacles will be grounded. All switch, receptacle, and junction boxes shall have appropriate cover plates. Wiring shall be free from hazard and all circuits shall be properly .protected at the pane. Floor receptacles shall be removed and a metal cover plate installed. Replacement Standard: Minimum Life: 15 Years Must meet building code, See Green Communities Criteria Check List if 5.3.a Ground Fault Circuits Repair Standard: NA Minimum Life: 5 Years Replacement Standard: Basement and kitchen receptacles within 6 feet of a sink, all bath receptacles and at least one exterior receptacle shall be protected by a GFCI. Kitchen Electric Distribution Repair Standard: NA Minimum Life: 7 years Replacement Standard: Permanently installed stoves, refrigerators, freezers, dishwashers and disposals, washers and dryers shall have separate circuits sized to NEC. Two separate 20-amp counter circuits are required with each kitchen area, Stairwell .Lighting Repair Standard: NA Minimum Life: 7 Years Replacement Standard: All cornmon halls and stairways between living space must be well lighted with a fixture controlled by 3 way switches at both ends of the hall or stairway. See Green Communities Criteria Check List # 5.3a Alarms Repair Standard: NA Minimum Life: NA Replacement Standard: Minimum Life: 5 Years Directly wired or lithium battery -operated fire and smoke detectors shall be installed on all sleeping floors, to code. Carbon monoxide alarms shall be provided on each level where combustible appliances are operated. X. Plumbing System Water Supply Repair Standard: Minimum Life: 5 Years All fixtures must be: as per Table 604.4 of the Florida Building Code; LAV 2.2 GPM; WC 4.6 GPM; Shower head 2.5 GPM Replacement Standard: Minimum Life: 20 Years All inoperable or leaky main shut off valves shall be replaced. Lead pipe and exposed galvanized pipe shall be replaced with copper pipe. Drain, Waste, Vent Lines Repair Standard: Minimum Life: 15 Years Waste and vent lines must function without losing the trap seal. Replacement Standard: Minimum Life: .20 Years PVC replacement lines shall be installed in accordance with the most recently approved version of the plumbing code. Plumbing Minimum Equipment Repair Standard: Minimum Life: 7 Years Every dwelling unit shall have a minimum of one single bowl sink with hot and cold running water in kitchen and at least one bathroom containing a vanity with sink, and a shower/tub unit, both with hot and cold running water, and a toilet. Replacement Standard: Minimum Life: 20 Years Additional References: Local housing code. See Green Communities Criteria Checklist #4.1b Plumbing Fixtures Repair Standard; Minimum Life: 7 Years All fixtures and faucets shall have all working components replaced. Replacement Standard: Minimum Life: 20 Years Single lever, metal faucets and shower diverters with 15-year drip -free warranty. Ceramic toilets, double bowl stainless steel sinks, fiberglass tub surrounds and steel enameled 5' tubs. See Green Communities Criteria Cheeldist #4.1b Water Heaters Repair Standard: Minimum Life: 5 Years Each dwelling unit .shall have a. gas -fired water heater, where gas service is available. The minimum capacity for units with two bedrooms or less shall be 30 gallons; larger units shall have a minimum capacity of 40 gallons. Insulation jackets shall be present unless the installation poses a safety concern. Water heaters shall have pressure relief valves with drip legs that extend to within one foot of the floor. Expansion tanks will be included with the installation of new water heaters. Replacement Standard: Minimum Life: 8 Years Must meet building code. See Green Communities Criteria Checklist# 7.8. L® HVAC Heating Plant Repair Standard: Minimum Life: 10 Years Inoperative, hazardous or inefficient (less than 75% AFUE) heating plants shall be repaired and altered to perform at least 85% efficiency, where feasible. Setback thermostats are required. Replacement Standard: Minimum Life: 20 Years Gas- and oil -fired plants shall be Energy -Star rated. Heat pumps shall be rated at 12 SEER or better. Setback thermostats are required. Replacement heating equipment shall be properly sized in accordance with the ACCA's Manual J or other recognized methodology. Data for heat load/loss calculations shall be based on post -rehabilitation conditions. Distribution System Repair Standard: Minimum Life: 10 Years Duct work and radiator piping shall be well supported, insulated in unconditioned space and adequate to maintain 70° F pleasured 36" off the floor when the outside temperature is -50F., (the average yearly minimum) in all habitable and essential rooms. Replacement Standard: Minimum Life: 20 Years All ductwork shall be insulated. to R-4., sealed and run in concealed space. Air Conditioning Repair Standard: Minimum Life: 3 Years Any air conditioning unit provided must be Energy -Star rated and must not exceed the recommended capacity for the room in which it will be installed. See Green Requirements Green Items To the greatest extent possible, all NSP rehabilitation will incorporate the attached Green Requirements attached.. Green Elements for New Construction/Rehabilitation of Multi -family Developments For NSP3, HUD is requiring that all gut rehabilitation (i.e., general replacement of the interior of a building that may or may not include changes to structural elements such as flooring systems, columns or load bearing interior or exterior walls) or new construction of residential buildings up to three stories must be designed to meet the standard for Energy Star Qualified New Homes. All gut rehabilitation or new construction of mid -or high-rise multifamily housing must be designed to meet American Society of Heating, Refrigerating, and Air -Conditioning Engineers (ASHRAE) Standard 90.1-2004, Appendix G plus 20 percent (which is the Energy Star standard for multifamily buildings piloted by the Environmental Protection Agency and the Department of Energy). Other rehabilitation must meet these standards to the extent applicable to the rehabilitation work undertaken, e.g., replace older obsolete products and appliances (such as windows, doors, lighting, hot water heaters, furnaces, boilers, air conditioning units, refrigerators, clothes washers and dishwashers) with Energy Star -labeled products. Water efficient toilets, showers, and faucets, such as those with the WaterSense label, must be installed. Where relevant, the housing should be improved to mitigate the impact of disasters (e.g., earthquake, hurricane, flooding, fires). Exhibit B (Neighborhood Stabilization Program 3 Multi -family Green Elements) provides the green elements which will be incorporated into any projects using Neighborhood Stabilization Program 3 funds. EXHIBIT "B" NEIGHBORHOOD STABILIZATION PROGRAM 3 MULTI -FAMILY GREEN ELEMENTS The following list of green criteria items is included as part of the Neighborhood Stabilization Program 3 Green Elements. The attached Green Elements Details sheet provides more information on these items. Threshold Items: (All) Water -Conserving Appliances and Fixtures (toilets, shower heads, faucets) Energy Star Appliances (refrigerator, stove, dishwasher, and washer) Efficient Lightning Interior/ Exterior Construction Waste Management Low/ no Volatile Organic Compounds (VOC) Paints and Primers Exhaust Fans — Bathroom/Kitchen Storm Drain Labels Building Maintenance Manual Tenant's Manual New Tenant Orientation Minimum 16 SEER Air Conditioner Additional Items (Select 9 Items to be Incorporated in the Project): Landscaping Recycled Content Material Reduce Heat -Island Effect: Roofing Reducing Heat-island Effect: Planting Urea Formaldehyde -free Composite Wood Green label Certified Floor Coverings Ventilation Water Heaters: Mold Prevention Materials in Wet Areas: Surfaces/ Tub and Shower Enclosures Water Drainage Clothes Dryer Exhaust Integrated Pest Management Lead -Safe Work Practices Healthy Flooring Materials: alternative sources Water -Permeable Walkways Water -Permeable Parking Areas Smoke -free Building Combustion Equipment (includes space & water -heating equipment) Walkable Neighborhoods: Comrrections to Surrounding Neighborhoods Green Elements Details i'�r "'j"�il�Pa P+.. _,.`'�`:s'77,.�2-Y�F:.,. `£�7�_ k'_h.`7,H Walkable Provide a site all-weather Lsvqq}Xi _Y�. Neighborhoods: Connections to Surrounding Neighborhood plan demonstrating at least three separate connections from the development to sidewalks or athways in surrounding net hboihoods i''`vKzi£�` p1!y�� j Y.v s2Fic--. > ir.veic#c e- 33'xe`isea ..landscaping Provide a tree or plant list certified by the Architect or Landscape Architect, that the selection of new trees and plants are appropriate to the site's soils and microclimate and do not include invasive species. Locate plants to provide shading in the summer and allow for heat gam in the winter. Plants should conserve water, Storm Drain .Labels Label all storm drains orstorrn inlets to clearly indicate where the drain or inlet leads. er�-C>o e ;a Q� t 1 2 d w h om : Water -Conserving Appliances and Fixtures: New Construction Install water -conserving fixtures with the following minimum specifications: toilets —1.3 GPF; .:.showerheads — 2.0 GPM; kitchen faucets — 2,0 GPM; bathroom faucets — 2,0 GPM dv Water -Conserving Appliances and Fixtures: .Moderate Rehabilitation Install water -conserving fixtures with the following minimum specifications for toilets and shower heads and follow requirements for other fixtures wherever and whenever they are replaced: toilets — 1.3 GPF; showerheads — 2.0 .GPF; kitchen faucets -- 2.0 GPM; bathroom faucets — 2,0 GPM. r?Y.FnraL 'cJfce3..,'ald'c.i-:,, .=s�i SSl zr.iz'+T 3z;nse0Energy Star Appliances If providing appliances, install Energy Star clothes washers, dishwashers, refrigerators, and stoves. c-3a Efficient lighting: Interior Install the Energy Star Advanced Lighting Package in all interior units and use Energy Star or high - .efficiency commercial grade fixtures in all common areas and outdoors. S 3tirrsnsed efficient lighting: Install daylight Exterior sensors or timers on all outdoor lighting, including walkways. R :[_ Cir'MIS ,sol - Construction Waste Management All construction waste must be recycled, Ga `. Recycled Content Material Use materials with recycled content; provide calculation for recycled content percentage based on cost or value of recycled content in relation to total materials for project. Minimum recycled material must be 5 percent Water -Permeable Walkways Use water -permeable materials in 50 percent or more of walkways, sav Water -Permeable Parking Areas Use water -permeable materials in 50 percent or more of paved parking areas. -5c 9ea' Reduce Heat -Island Effect: Plantings Locate trees or other plantings to provide shading for sidewalks, patios and driveways. .R a sou Low / No Volatile Organic Compounds (VOC) Paints and Primers all interior paints and primers must comply with current Green Seal standards for low VOC Specify that limits, Urea Formaldehyde -free Composite Wood Use particleboard and MDF that is certified compliant with the ANSI A208,1 and A2.08.2. If using nonrated composite wood, all exposed edges and sides must be sealed with low-VOC sealants. Page 1 of 2 za Green Do utility carpet Label Certified Floor Coverings not install carpets in below grade living spaces, entryways, laundry rooms, bathrooms, kitchens or rooms. If using carpet, use the Carpet and RugInstitute's Green Label certified carpet, pad and adhesives. Exhaust Fans — Bathroom Install Energy Star -labeled bathroom fans that exhaust to the outdoors and are connected to a light switch and are equipped with a humidistat sensor or timer, or operate continuously. ?�u Exhaust Fans — Kitchen: Plew'Construction & Substantial Rehabilitation Install power vented fans or range hoods that exhaust to the exterior. ��.". Exhaust Fans — Kitchen: Moderate Rehabilitation Install power vented fans or range hoods that exhaust to the exterior. 76'a Ventilation: New Construction & Substantial Rehabilitation Install a ventilation system for the dwelling unit, providing adequate flesh air per ASHRAE 62,1-2007 for residential buildings above 3 stories or ASHRAE 62.2 for single family and low-rise multifamily dwellings, Ventilation: Moderate Rehabilitation Install a ventilation system for the dwelling unit, providing adequate fresh air per ASHRAE 62.1-2007 for residential buildings above 3 stories or ASHRAE 62.2 for single family and low-rise multifamily dwellings. 7s Water Heaters: Mold Prevention Use tankless hot water heaters or install conventional hot water heaters in rooms with drains or catch pans with drains piped to the exterior of the dwelling and with non -water sensitive floor coverings. :Materials in Wet Areas: Surfaces In wet areas, use materials that have smooth, durable, cleanable surfaces. Do not use mold -propagating materials such as vinyl wallpaper and unsealed grout, v 796 Materials in Wet Areas: Tub and Shower Enclosures Use fiberglass or similar enclosure or, if using any form of grouted material, use backing materials such as cement board, fiber cement board or equivalent (i.e., not paper -faced). 71i ` Water Drainage Provide drainage of water to the lowest level of concrete away from windows, walls and foundations. 773 Clothes Dryer Exhaust ix Clothes dryers must be exhausted directly to the outdoors. 734 integrated Pest Management Seal all wall, floor and joint penetrations with low VOC caulking. Provide rodent -proof and corrosion - proof screens (e,g., copper or stainless steel mesh) for large openings. 7 Lead,Safe Work Practices: Moderate & Substantial Rehabilitation For properties built before 1978, use lead -safe work practices during renovation, remodeling, painting and demolition. 71 ic's,sea' ,H"ealthy Flooring Materials: Alternative Sources Use non -vinyl coverings in all rooms. all } !'Smoke -free Budding Enforce a "no smoking" policy in all common and individual living areas in all buildings. See full criteria for "common area" definition. 3s Combustion Equipment (includes space & water -heating equipment) Specify power vented or combustion sealed equipment. Install one hard -wired CO detector for each sleeping area, minimum one per floor. � _i � � •poi . , { •. { r. �i"�� -- ... 3'f- 3T4 -Building Maintenance Manual Provide a manual that includes the following: a routine maintenance plan; instructions for all appliances, HVAC operation, water -system turnoffs, lighting equipment, paving materials and landscaping, pest control.and other systems that are part of each occupancy unit; an occupancy turnover plan that describes .the process of educating the tenant about proper use and maintenance of all building systems. $ xe sed Occupant's Manual Provide a guide for renters that explains the intent, benefits, use and maintenance of green building :features, along with the location of transit stops and other neighborhood conveniences, and encourages additional green activities such as recycling, gardening and use of healthy cleaning materials, alternate measures for pest control, and purchase of green power. 83 New Resident Orientation •Provide a walk-through and orientation to the homeowner or new resident using the Occupant Manual from 8-2 above that reviews the building's green features, operations. and maintenance along with neighborhood conveniences. Page 2 of 2 CITY OF MIAMI COMMUNITY DEVELOPMENT DEPARTMENT Neighborhood Stabilization Program 3 (NSP3) IMPLEMENTATION POLICIES Revised: February 10, 2011 Table of Contents Introduction 3 NSP Advisory Task Force 4 General Guidelines: 5 Strategy B: Purchase and Rehabilitation of Foreclosed & Abandoned Properties 6 Strategy E: Redevelopment 9 Page 2of11 Introduction The Dodd -Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd -Frank") was signed by President Barack Obama on July 21, 2010. This legislation made available $1 billion dollars of funds to states and local governments to stabilize neighborhoods whose viability has been, and continues to be, damaged by the economic effects of properties that have been foreclosed and abandoned and to establish the Neighborhood Stabilization Program 3 ("NSP3"). Under the NSP3 the City of Miami received approximately $4.5 million in Community Development Block Grant ("CDBG") funds to implement this program. On October 19, 2010, the U.S. Department of Housing and Urban Development, ("HUD") published regulations (Exhibit "A") for the implementation of the NSP3. As part of the application process to qualify for this funding, on February 10, 2011 the City Commission must approve, a substantial amendment to the annual Action Plan for FY2010-2011 ("AP"), which provides a framework for the use of the NSP3 funds in the City. As much as possible, this substantial amendment was designed to allow the City to be able to perform rental eligible activities under NSP3. It is important to note that the implementation policies contained herein may be stricter, in some instances, than the ones listed in the AP. Should any policy herein be broader than the AP, the interpretation as provided by the AP will govern. The implementation plan seeks to provide further guidance to staff on how this program is to be implemented. Page 3 of 11 NSP Advisory Task Force In an effort to receive community input throughout the implementation of the NSP1, on November 18, 2008, the City Commission requested the Department of Community Development to create an NSP Advisory Task Force ("Task Force".) This Task Force will also be used for the NSP3 program. Composition The Task Force consists of two representatives from each City district appointed by the district commissioners, one representative appointed by the Mayor and one representative appointed by the City Manager. District appointees must not be employed by the City of Miami. The NSP3 Project Manager is responsible for coordinating the operation of the Task Force. The Chair of the Task Force was elected at its first meeting. Meetings Meetings were held at least once a month during the first 18 months of the implementation of the program. After that, the meetings were extended on a year-to-year basis. The meetings can be called on an "as needed" basis by staff in consultation with the Chair of the Task Force. In addition, a meeting of the Task Force can be called by the Chair of the Task Force at any time. Quorum Since this is an advisory committee, there is no quorum requirement, except that when the Task Force becomes a Request for Proposal (RFP) review panel, a minimum of 3 members will be required to be present and a majority of the members present must not be City of Miami employees. Duties The duties of the Task Force include, but are not limited to the following: I. Make ongoing recommendations to staff on the implementation of NSP3. II. Act as an RFP panel for the development and review of all RFPs under the program. The Task Force will review and recommend applications and proposals received in response to RFPs, for final approval/award by the City of Miami's Housing and Commercial Loan Committee. Staff will provide scoring and review information to the Task Force for their recommendations. III. Look for properties in their respective neighborhoods that are eligible for NSP3 funding for consideration by developers and staff. IV. Review and recommend the purchase of properties at a 1% minimum discount from the appraised value prior to City Manager approval and signature. V. Review progress reports provided by staff. Page 4 of 11 General Guidelines: The following guidelines will apply to the NSP3 program as a whole irrespective of the strategy used: a. Purchase Price of Properties to be Purchased under this Program The price of properties to be purchased under this program must be at a minimum of a 1 % discount from the appraised value. b. Property Appraisal • Properties to be purchased under this program must be appraised. Appraisals can only be accepted from qualified appraisers and made in conformity with the appraisal requirements under 49 CFR 24.103 — Criteria for Appraisals — and completed within 60 days of the final offer to purchase. • The appraisal must be ordered by the City or the developer. Appraisals provided by the seller will not be acceptable unless the seller provides written proof that the appraisals conducted by them comply with all HUD requirements. C. Properties outside Areas of Greatest Need As stipulated by HUD, properties outside the AGN can only be eligible upon prior approval from HUD. To that extent, no funding will be provided to such properties without written approval from HUD. Any program participant, including the City, wishing to provide funding to such properties must provide the following information to the NSP3 Manager so that an approval can be requested from HUD: 1. Proof that the property is eligible under NSP3 program (foreclosed or abandoned) 2. Reason to include the property under the NSP3 program. Such a reason might include the extent of the deterioration of the property, crime caused by the abandonment of the property or the property causing a blight condition which if not removed will spread to other areas of the block, etc. 3. Have the City certify the lack of eligible properties or inability to purchase properties meeting NSP3 criteria in the AGN. d. Exception to Policy The following are the policies related to exceptions: 1. An exception to any of the policies established herein can only be made by the City Commission if such an exception is not at odds with the statute, regulations or the amended annual plan approved by HUD. 2. No exception can be made to policies derived from Dodd -Frank or the NSP3 regulation. 3. Exception to any policy derived from the substantial amendment to the annual Action Plan for FY2010-2011 (AP) can only be made through an amendment of the action plan. Such amendment must be approved by the City Commission and HUD before the exception can be granted. Page 5of11 Strategy B: Purchase "& Rehabilitation of Foreclosed & Abandoned Properties Program Description: Under this strategy, the City and/or Developers will 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. The City will primarily use qualified for -profit and non-profit developers in the execution of this strategy. The City will meet its $1,200,000 low-income set -aside requirement of serving tenants at 50 percent or below of area median income, adjusted for family size, via this strategy. 1. Selection of Developers Developers for this strategy will be selected pursuant to a Request for Proposals (RFP). The City will solicit proposals from qualified developers for funding for the acquisition and management of qualified properties under the NSP3 program. • RFP Advertisement The RFP will be advertised in a newspaper with wide circulation in the City The advertisement will allow the public a minimum of 30 days before proposals are due, unless otherwise warranted. • Contents of RFP Advertisement The RFP advertisement must contain at a minimum the amount of funding that will be available, the strategy and the date, place and time the RFP will be due. It should also provide the website where the RFP will be available for downloading and the name and contact information, including email address of a staff person who can answer RFP clarification questions pertaining to the RFP. The advertisement must also provide a date for a workshop, if any. • Selection Panel The recommendation of developers through the RFP will be made by the NSP3 Advisory Task Force for further selection/award of the RFP funding by the City of Miami's Housing and Commercial Loan Committee. 2. Qualification of Developers Developers selected for the implementation of this program must have the following qualifications (a) A minimum of 3 years experience in constructing/rehabilitating and managing affordable rentals. (b) For new development entities, experience of the principals may be counted as experience of the new entity. (c) Experience of partners or joint ventures may only be counted with a signed partnership or joint venture agreements. (d) Priority may be given to qualified non-profit developers Page 6of11 Eligible Single Family Properties For a single family property to be eligible to be included under this strategy, the property must meet the following criteria: a. The property must be located within the City of Miami's Areas of Greatest Need as indicated in the new substantial amendment to the annual Action Plan FY10-11AP b. Be foreclosed upon or abandoned as defined by the NSP3 Statute and AP. c. Must be vacant. The purchase price of the property must be at a discount of at least 1 % of the appraised value Eligible Multifamily Properties For a multifamily property to be eligible under this strategy, it must meet the following criteria: • The property must be located within the City of Miami's Areas of Greatest Need as indicated in the substantial amendment to the annual Action Plan FY10-11 AP. • Be foreclosed upon or abandoned as defined by the NSP3 Statute. • Priority will be given to vacant properties; however, occupied properties may be considered if any of the following conditions apply: • The property requires little or no rehabilitation. Any rehabilitation can be completed without moving any tenant; or • The property has enough vacant units to be able to move tenants from occupied units to them after they have been rehabbed; or • The operating pro -forma of the property can support a minimum of 6 months relocation and all associated payments. A. MULTIFAMILY RENTAL AND SINGLE FAMILY SCATTERED SITE RENTAL PROJECTS Program Description: Provides assistance to developers or the City for the purchase and rehabilitation of affordable rental units. All rental units, or a pro-rata share of them, shall be rented to low-, moderate- or middle -income families whose income does not exceed 120% of HUD's Area Median Income (AMI) adjusted for family size. The City must allocate a minimum of $1,200,000 of Strategy B and Strategy E funding or 26.32% of its total NSP3 award to assist units which will be occupied by tenants at or below 50% of the AMI, adjusted for family size. Each single family scattered site project must include at least five (5) single family homes, which can include duplexes, tri-plexes, or quadplexes. Type of Assistance: Purchase and rehabilitation hard and soft costs. i. Income of renters must be at or below 120% of Area Median Income as published annually by HUD. ii. Developers to be selected only from a Request for Proposal process. Projects will be selected based on rankings and merits of the application. Page 7of11 iii. Annual compliance monitoring will be enforced for the duration of the affordability period. Repayment Requirements Zero (0) percent purchase and rehabilitation loan converted to a 3% permanent mortgage on the property once the project is completed. Payment of principal and interests will be required during the term of the loan. Or, payment of principal during the term of the loan and accrued interest can be paid at the end of the affordability period. Determination for repayment is made at the sole discretion of the City for for -profit developers. For not -for -profit developers, the loan will be forgivable at the end of the affordability period. No payment of principal and interest will be required during the affordability period. Amount of assistance: Minimum: $1,000 per unit Maximum: $71,000 per unit Affordability Period: 30-year affordability period. Security: Recorded mortgage on the property. In addition, affordability period shall be enforced by a restrictive covenant that will run with the land. In the case of phased developments, the covenant will run with the land making up all phases of development. In the case of a developer's default, the restrictive covenant will continue throughout the affordability period. Developer Fee Up to 15% of total project costs. Developer fee will only be reimbursed upon full occupancy of the project. Minimum Leverage Ratio Determined on a project by project basis. Page 8of11 Strategy E: Redevelopment Program Description: This strategy allows the City and or Developers to redevelop demolished or vacant properties into eligible use under the NSP3 program. Eligible Single Family Properties For a single family property to be eligible to be included under this strategy, the property must meet the following criteria: • The property must be located within the City of Miami's Areas of Greatest Need as indicated in the new substantial amendment to the annual Action Plan FY10-11APBe vacant as defined by the NSP3 Statute and AP. • The purchase price of the property must be at a discount of at least 1 % of the appraised value • Each single family scattered site project must include at least five (5) single family homes, which can include duplexes, tri-plexes, or quadplexes. Eligible Multifamily Properties For a multifamily property to be eligible under this strategy, it must meet the following criteria: • The property must be located within the City of Miami's Areas of Greatest Need as indicated in the substantial amendment to the annual Action Plan FY10-11 AP. • Be vacant as defined by the NSP3 Statute. • The purchase price of the property must be at a discount of at least 1 % of the appraised value • Priority will be given to vacant properties; however, occupied properties may be considered if any of the following conditions apply: • The property requires little or no rehabilitation. Any rehabilitation can be completed without moving any tenant; or • The property has enough vacant units to be able to move tenants from occupied units to them after they have been rehabbed; or • The operating pro -forma of the property can support a minimum of 6 months relocation and all associated payments. Use of Redeveloped Property Properties built under this strategy can only be used as follows: • Properties must be rented to households with incomes less or equal to 120% of the Area Median Income adjusted for household size. Page 9 of 11 Type of Assistance: Purchase and rehabilitation (new construction) hard and soft costs. i. Income of renters must be at or below 120% of Area Median Income as published annually by HUD. ii. Developers to be selected only from a Request for Proposal process. Projects will be selected based on rankings and merits of the application. iii. Annual compliance monitoring will be enforced for the duration of the affordability period. Property Appraisal • Properties to be purchased under this program must be appraised. Appraisals can only be accepted from qualified appraisers and made in conformity with the appraisal requirements under 49 CFR 24.103 — Criteria for Appraisals — and completed within 60 days of the final offer to purchase. • The appraisal must be ordered by the City or the developer. Appraisals provided by the seller will not be acceptable unless the seller provides written proof that the appraisals conducted by them comply with all HUD requirements. Selection of Developers Developers for this strategy will be selected pursuant to a Request for Proposals (RFP). The City will solicit proposals from qualified developers for funding for the acquisition and management of qualified properties under the NSP3 program. • RFP Advertisement The RFP will be advertised in a newspaper with wide circulation in the City The advertisement will allow the public a minimum of 30 days before proposals are due, unless otherwise warranted. • Contents of RFP Advertisement The RFP advertisement must contain at a minimum the amount of funding that will be available, the strategy and the date, place and time the RFP will be due. It should also provide the website where the RFP will be available for downloading and the name and contact information, including email address of a staff person who can answer RFP clarification questions pertaining to the RFP. The advertisement must also provide a date for a workshop, if any. • Selection Panel The recommendation of developers through the RFP will be made by the NSP3 Advisory Task Force for further selection/award of the RFP funding by the City of Miami's Housing and Commercial Loan Committee. Qualification of Developers Developers selected for the implementation of this program must have the following qualifications (a) A minimum of 3 years experience in constructing/rehabilitating and managing affordable rentals. (b) For new development entities, experience of the principals may be counted as experience of the new entity. Page 10 of 11 (c) Experience of partners or joint ventures may only be counted with a signed partnership or joint venture agreements. (d) Priority may be given to qualified non-profit developers Repayment Requirements Zero (0) percent purchase and rehabilitation loan converted to a 3% permanent mortgage on the property once the project is completed. Payment of principal and interests will be required during the term of the loan. Or, payment of principal during the term of the loan and accrued interest can be paid at the end of the affordability period. Determination for repayment is made at the sole discretion of the City for for -profit developers. For not -for -profit developers, the loan will be forgivable at the end of the affordability period. No payment of principal and interest will be required during the affordability period. Amount of assistance: Minimum: $1,000 per unit Maximum: $71,000 per unit Affordability Period: 30-year affordability period. Security: Recorded mortgage on the property. In addition, affordability period shall be enforced by a restrictive covenant that will run with the land. In the case of phased developments, the covenant will run with the land making up all phases of development. In the case of a developer's default, the restrictive covenant will continue throughout the affordability period. Developer Fee Up to 15% of total project costs. Developer fee will only be reimbursed upon full occupancy of the project. Minimum Leverage Ratio Determined on a project by project basis. Page 11 of 11 Exhibit A 64322 Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices number for this notice (USCG-2010- 0212) in the "Keyword" box, and then click "Search." Procedural This meeting is open to the public. Please note that the meeting may close early if all business is finished. At the Chair's discretion, members of the public may make brief oral presentations during the meeting. If you would like to make an oral presentation at a meeting, please notify the Assistant to the Chairman no later than November 12, 2010. Written material (no more than 2 full pages) for distribution at the meeting should reach the Coast Guard no later than November 12, 2010. If you would like a copy of your material (no more than 2 full pages) distributed to each member of the committee in advance of the meeting, please submit 25 copies to the Assistant to the Chairman no later than November 12, 2010. The transcript of the meeting, including all comments received during the meeting, will be posted to http:// www.regulations.gov and will include any personal information you have provided, You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the Federal Register (73 FR 3316). Information on Services for Individuals With Disabilities For information on facilities or services for individuals with disabilities or to request special assistance at the meeting, contact the Chairman as soon as possible. Authority: This notice is issued under authority of 5 U.S.C. 552(a). Dated: October 14, 2010. J.R. Caplis, Captain, U.S. Coast Guard, Chief, Office of Incident Management & Preparedness. [FR Doc. 2010-26287 Filed 10-18-10; 8:45 am] BILLING CODE 9110-04-P DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT [Docket No. FR-5447—N-01] Notice of Formula Allocations and Program Requirements for Neighborhood Stabilization Program Formula Grants AGENCY: Office of the Secretary, HUD, ACTION: Notice of allocation method, waivers granted, alternative requirements applied, and statutory program requirements. SUMMARY: This notice advises the public of the allocation formula and allocation amounts, the list of grantees, alternative requirements, and the waivers of regulations granted to grantees under Section 2301(b) of the Housing and Economic Recovery Act of 2008 (Pub. L. 110-289, approved July 30, 2008) (HERA), as amended, and an additional allocation of funds provided under Section 1497 of the Wall Street Reform and Consumer Protection Act of 2010 (Pub. L. 111-203, approved July 21, 2010) (Dodd -Frank Act) for additional assistance in accordance with the second undesignated paragraph under the heading `Community Planning and Development —Community Development Fund' in Title XII of Division A of the American Recovery and Reinvestment Act of 2009 (Pub, L. 111-5, approved February 17, 2009) (Recovery Act), as amended, for the purpose of assisting in the redevelopment of abandoned and foreclosed homes. Except where provided for otherwise, these amounts are distributed based on funding formulas for such amounts established by the Secretary in accordance with HERA, The additional allocation represents the third round of Neighborhood Stabilization Program funding and is referred to throughout this notice as NSP3. HERA provided a first round of formula funding to States and units of general local government, and is referred to herein as NSP1. The Recovery Act provided a second round of funds awarded by competition and is referred to herein as NSP2. The three rounds of funding are collectively referred to as NSP. As described in the Supplementary Information section of this notice, HUD is authorized by statute to specify alternative requirements and make regulatory waivers for this purpose. This notice also notes statutory issues affecting program design and implementation. Note: This notice is intended to provide unified program requirements for grantees of the two formula NSP grant programs, NSP1 and NSP3. The allocation and application information under Section I.A and Section II.B below is only applicable to NSP3 grants. For NSP1, HUD awarded grants to a total of 309 grantees including the 55 states and territories and selected local governments to stabilize communities hardest hit by foreclosures and delinquencies. For the allocation formula and application process for NSP1, please see the October 6, 2008 Federal Register Notice (73 FR 58330), as amended by the June 19, 2009 "Bridge" Notice (74 FR 29223), and Appendix A attached hereto, For NSP2, HUD awarded a combined total $1.93 billion in NSP2 grants to 56 grantees nationwide on January 14, 2010. Funds under NSP2 were distributed by competition under criteria described in the May 4, 2009 Notice of Funding Availability. Where requirements differ between the rounds of funding, it is so noted. DATES: Effective Date: October 19, 2010. FOR FURTHER INFORMATION CONTACT: Stanley Gimont, Director, Office of Block Grant Assistance, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 7286, Washington, DC 20410, telephone number 202-708-3587. Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at 800-877-8339. FAX inquiries may be sent to Mr, Gimont at 202-401-2044. (Except for the "800" number, these telephone numbers are not toll -free.) SUPPLEMENTARY, INFORMATION: Program Background and Purpose Recipients will use the funds awarded under this notice to stabilize neighborhoods whose viability has been, and continues to be, damaged by the economic effects of properties that have been foreclosed upon and abandoned. In 2008, Congress appropriated funds for neighborhood stabilization under HERA. In 2009, Congress appropriated additional neighborhood stabilization funds under the Recovery Act, In 2010, Congress appropriated a third round of neighborhood stabilization funds in the Dodd -Frank Act, When referring to a provision of the first appropriations statute, this notice will refer to HERA; when referring to a provision of the second appropriations statute, this notice will refer to the Recovery Act; and when referring to the third appropriations statute this notice will refer to the Dodd -Frank Act. When referring to the grants, grantees, assisted activities, and implementation rules under the Dodd -Frank Act, this notice will use the term "NSP3." When referring to the grants, grantees, assisted activities, and implementation rules under the Recovery Act, this notice will use the term "NSP2". When referring to the grants, grantees, assisted activities, and implementation rules under HERA, this notice will use the term "NSP1." Collectively, the grants, grantees, assisted activities, and implementation rules under these three rounds of funding is referred to as NSP. NSP is a component of the Community Development Block Grant (CDBG) program (authorized under Housing and Community Development Act of 1974, as amended (42 U.S.C. 5301 et seq.) (HCD Act)). Federal Register / Vol. 75, No, 201 / Tuesday, October 19, 2010 / Notices 64323 Program Principles Programs under NSP should aim to integrate the following principles: • Retain CDBG distinctive requirements. Congress gave HUD broad waiver and alternative requirement authority, which HUD used in designing NSP program requirements. However, distinctive characteristics of the CDBG program including the objectives of the HCD Act, financial accountability, local citizen participation and information, grantee selection of activities within broad Federal policy parameters, and income targeting of beneficiaries were retained. All of these elements are required in NSP1, NSP2, and NSP3. • Target and reconnect neighborhoods, Invest funds in programs and projects that will revitalize targeted neighborhood(s) and reconnect those targeted neighborhoods with the economy, housing market, and social networks of the community and metropolitan area as a whole. • Rapidly arrest decline. Support NSP uses and activities that will rapidly arrest the decline of a targeted neighborhood(s) that has been negatively affected by abandoned or foreclosed properties. • Assure compliance with the NSP "deep targeting" requirement. No less than 25 percent of the funds shall be used to house individuals and families whose incomes do not exceed 50 percent of area median income. • Ensure longest feasible continued affordability. Invest in affordable housing that will remain desirable and affordable for the longest feasible period. • Support projects that optimize economic activity, and the number of jobs created or retained or that will provide other long-term economic benefits. • Build inclusive and sustainable communities free from discrimination. • Coordinate planning and resources. Integrate neighborhood stabilization programs with other Federal policy priorities and investments, including energy conservation and efficiency, sustainable and transit -oriented development, integrated metropolitan area -wide planning and coordination, improvements in public education, and access to healthcare. • Leverage resources and remove destabilizing influences. Augment neighborhood stabilization programs with other Federal, public and private resources. Eliminate destabilizing influences, such as blighted homes, that can prevent programs from producing results. • Set goals. Set aggressive, but achievable, goals for outputs and outcomes. • Ensure accountability. Ensure accountability for all programs, keep citizens actively informed, and provide all required NSP reporting elements. Objectives and Outcomes 1. Objectives. The primary objective of the CDBG program is the development of viable urban communities, by providing decent housing, a suitable living environment, and economic opportunity, principally for persons of low- and moderate -income. NSP grantees must strive to meet this objective in neighborhoods that are in decline (or further decline) due to the negative effects of a high number and percentage of homes that have been foreclosed upon. The first goal is to arrest the decline. Then the grantee must stabilize the neighborhood and position it for a sustainable role in a revitalized community. 2. Outcomes. Measurable NSP short term program outcomes may include, but are not limited to: • Arresting decline in home values based on average sales price in targeted neighborhoods, and • Reduction or elimination of vacant and abandoned residential property in targeted neighborhoods. The long term outcomes may include, but are not limited to: • Increased sales of residential property in targeted neighborhoods, and • Increased median market values of real estate in targeted neighborhoods. Authority To Provide Alternative Requirements and Grant Regulatory Waivers The Dodd -Frank Act states that, except where provided for otherwise, assistance shall be provided in accordance with the same provisions applicable under the NSP2 authorization. In turn, the Recovery Act provides that assistance shall be made available as authorized under HERA, The Recovery Act authorizes the Secretary to specify waivers and alternative requirements for any provision of any statute or regulation in connection with the obligation by the Secretary or the use of funds except for requirements related to fair housing, nondiscrimination, labor standards, and the environment (including lead -based paint), upon a finding that such a waiver is necessary to expedite or facilitate the use of such funds. The Secretary finds that the following alternative requirements are necessary to expedite the use of these funds for their required purposes. Except as described in this notice, statutory and regulatory provisions governing the CDBG program, including those at 24 CFR part 570 subpart I for states, and those at 24 CFR part 570 subparts A, C, D, J, K, and 0 for CDBG entitlement communities, as appropriate, shall apply to the use of these funds. The State of Hawaii will be allocated funds and will be subject to part 570, subpart I, as modified by this notice. Other sections of the notice provide further details of the changes, the majority of which deal with adjustments necessitated by statutory provisions, simplify program rules to expedite administration, or relate to the ability of state grantees to act directly instead of solely through distribution to local governments. Additional guidance and technical assistance will be available et http://www.hud.gov/nspta. Table of Contents I. Allocations A. Formula: NSP3 Allocation B. Formula: Reallocation II. Alternative Requirements and Regulatory Waivers A. Definitions for Purposes of the CDBG Neighborhood Stabilization Program B. NSP3 Pre -Grant Process 1. General 2. Contents of an NSP Action Plan Substantial amendment or abbreviated plan 3. Continued affordability 4. Citizen participation alternative requirement 5. joint requests 6. Effect of existing cooperation agreements governing joint programs and urban counties C. Reimbursement for Pre -Award Costs D. Grantee Capacity and Grant Conditions E. Income Eligibility Requirement Changes F. State Distribution to Entitlement Communities and Indian Tribes G. State's Direct Action H. Eligibility and Allowable Costs I. Rehabilitation Standards J. Sale of Homes K. Acquisition and Relocation L. Note on Eminent Domain M. Timeliness of Use and Expenditure of NSP Funds N. Alternative Requirement for Program Income (Revenue) Generated by Activities Assisted With Grant Funds O. Reporting P. FHA First Look Q. Purchase Discount R. Removal of Annual Requirements S. Affirmatively Furthering Fair Housing T. Certifications U. Additional NSP3 Requirements — Preferences for Rental Housing and Local Hiring V. Note on Statutory Limitation on Distribution of Funds W. Information Collection Approval Note X. Duration of Funding 64324 Federal Register /Vol. 75, No. 201 /Tuesday, October 19, 2010 /Notices I. Allocations A. Formula: Allocation. Grants awarded under NSP1 were allocated to States and local governments according to the formula described in Attachment A. The Dodd -Frank Act makes available an additional $1 billion that is generally to be construed as CDBG program funds (NSP3) for the communities and in the amounts listed in Attachment B to this notice. B. Formula: Reallocation. 1.a. Failure to Apply (NSP3). To expedite the use of NSP3 funds, the Department is specifying alternative requirements to 42 U.S.C. 5306(c). If a unit of general local government receiving an allocation of NSP3 funds under this notice (as designated in Attachment B) fails to submit a substantially complete application for its grant allocation by March 1, 2011, or submits an application for less than the total allocation amount, HUD will notify the jurisdiction of the cancellation of all or part of its allocation amount and proceed to reallocate the funds to the state in which the jurisdiction is located. b. If a state or insular area receiving an allocation of funds under this notice fails to submit a substantially complete application for its allocation by March 1, 2011, or submits an application for less than the total allocation amount, HUD will notify the state or insular area of the reduction in its allocation amount and proceed to reallocate the funds to the 10 highest -need states based on original rankings of need. 2.a. Failure to Meet 18-Month Obligation Deadline (NSP1), Consistent with the August 23, 2010 Notice of NSP Reallocation Process Changes (Docket No. FR-5435—N-01), HUD will block each grantee's ability to obligate NSP1 grant funds in the Disaster Recovery Grant Reporting System (DRGR) on the first business day after the statutory 18- month deadline for use of funds. HUD will notify the grantee of this action by electronic mail. Grantees will not be able to obligate grant funds after the deadline without requesting and receiving permission from HUD, and HUD determines that the grantee is not high risk consistent with this notice. The grantee will still be able to expend grant funds obligated before the deadline. Receipt and use of any program income will also be unaffected. b. Grantees that fail to obligate an amount equal to or greater than its initial grant amount may submit information to HUD, for up to 30 days following its 18-month deadline, documenting any additional obligation of funds not already recorded in the DRGR system and demonstrating to HUD that the obligation occurred on or before the 18-month deadline. Before the 18-month deadline, each grantee should also review its recorded obligations and notify HUD within 30 days following the deadline of any necessary adjustments to the amount and the reason for such an adjustment. For example, the grantee has become aware that an obligation amount that was previously recorded for an acquisition will not proceed, therefore a downward adjustment is necessary. c. After the deadline, if a grantee needs to decrease or increase the amount of grant funds obligated to an activity, it must first ask HUD to remove the DRGR block on changing the amount obligated. If the amount of decrease is more than 15 percent of the obligation for any activity, the grantee must submit to HUD a written request that clearly demonstrates with compelling information that factors beyond the grantee's reasonable control caused the need to adjust after the deadline. If HUD agrees to grant the request, it will restore the grantee's ability to obligate grant funds in DRGR. If HUD does not grant the request, the grantee must either complete the activity as originally obligated or the amount previously obligated for that activity will be recaptured. HUD may also remove the obligations block following risk assessment of the grantee or a review of some or all of a grantee's obligation documentation. d. Before HUD determines the appropriate corrective action or recaptures grant funds, HUD will review the submitted information, consider the grantee's capacity as described in 24 CFR 570.905 and 24 CFR 570.493, and the grantee's continuing need for the funds. e. Following the review and consistent with the procedures described in 24 CFR 570.900(b), HUD will proceed to notify the grantee of the selected corrective action it is required to undertake. f. HUD will recapture and reallocate up to $19.6 million from any state grantee with unused NSP1 grant funds. Additional corrective actions may be taken related to any amount of unused funds greater than $19.6 million. g. HUD will reallocate recaptured NSP1 grant funds in accordance with the reallocation formula described in a separate reallocation notice. A grantee receiving a reallocation must apply for the grant in accordance with the NSP1 Notice or this notice, as applicable. A nonentitlement grantee that is not required to submit a consolidated plan to HUD under the CDBG program will prepare an abbreviated plan. The substance of an abbreviated plan must include all the required elements that entitlement communities provide as part of an NSP Action Plan substantial amendment as described under Section II.B.2 of the NSP1 Notice or this Notice, as applicable. h. Each grantee must meet the statutory requirement to expend 25 percent of its grant amount for activities that will provide housing for households whose income is at or under 50 percent of area median income. This cannot occur unless the funds are first obligated to activities for this purpose, or program income is received and used for eligible activities. Therefore, if a grantee fails to obligate or record program income use of at least 25 percent of its original grant amount for activities that will provide housing for households whose income is at or under 50 percent of area median income, HUD may issue a concern or a finding of noncompliance. Consistent with the procedures described in 24 CFR 570.900(b), HUD will require as a corrective action that the grantee either adjust its remaining NSP1 planned activities to ensure that 25 percent of the original NSP1 formula grant amount and program income supports activities providing housing to households with incomes at or under 50 percent of area median income, or make a firm commitment to provide such housing with nonfederal funds in an amount sufficient to offset any deficiency to comply with the requirement before the expenditure deadline for the NSP1 grant. i. The NSP1 Notice allows each grantee to use up to 10 percent of its NSP1 grant for general administration and planning activities. If HUD recaptures funds from a grant, this percentage limitation will still apply to the remaining grant funds, reducing the amount available for administration activities. 3. Failure to Meet Expenditure Deadline for NSP3. NSP3 grantees must expend 50 percent of their grants within 2 years and 100 percent of their grants within 3 years. HUD will recapture and reallocate the amount of funds not expended by those deadlines or provide for other corrective action(s) or sanction. Further guidance will be issued prior to the deadline. II. Alternative Requirements and Regulatory Waivers This section of the notice briefly provides a justification for alternative requirements, where additional explanation is necessary, and describes Federal Register /Vol. 75, No. 201/Tuesday, October 19, 2010/Notices 64325 the necessary basis for each regulatory waiver. This section also highlights some of the statutory requirements applicable to the grants. This background narrative is followed by the NSP requirements. While program requirements across the three rounds of NSP funding are similar, certain requirements differ in accordance to statutory provisions. Each grantee eligible for an NSP grant that already receives annual CDBG allocations has carried out needs hearings, has a consolidated plan, an annual action plan, a citizen participation plan, a monitoring plan, an analysis of impediments to fair housing choice, and has made CDBG certifications. The consolidated plan already discusses housing needs related to up to four major grant programs: CDBG, HOME, Emergency Shelter Grants (ESG), and Housing Opportunities for Persons with AIDS (HOPWA). A grantee's annual action plan describes the activities budgeted under each of those annual programs. HUD is treating a state and entitlement grantee's use of its NSP grant to be a substantial amendment to its current approved consolidated plan and 2010 annual action plan. The NSP grant is a special CDBG allocation to address the problem of abandoned and foreclosed homes, Treating NSP3 as a substantial amendment will expedite the distribution of NSP3 funds, while ensuring citizen participation on the specific use of the funds. HUD is waiving the consolidated plan regulations on the certification of consistency with the consolidated plan to the extent necessary to mean NSP funds will be used to meet the congressionally identified needs of abandoned and foreclosed homes in the targeted areas set forth in the grantee's substantial amendment. In addition, HUD is waiving the consolidated plan regulations to the extent necessary to adjust reporting to fit the requirements of HERA and the use of DRGR. Non -entitlement local government grantees receiving NSP3 funds that are not required to submit a consolidated plan to HUD under the CDBG program will prepare an abbreviated plan. The substance of an abbreviated plan must include all the required elements that entitlement communities provide as part of an NSP Action Plan substantial amendment as described under Section II.B.2. The waivers, alternative requirements, and statutory changes apply only to the grant funds appropriated under NSP and not to the use of regular formula allocations of CDBG, even if they are used in conjunction with NSP funds for a project. They provide expedited program implementation and implement statutory requirements unique to the covered NSP appropriations. A. Definitions for Purposes of the Neighborhood Stabilization Program Background Certain terms are used in HERA that are not used in the regular CDBG program, or the terms are used differently in HERA and the HCD Act. In the interest of clarity of administration, HUD is defining these terms in this notice for all grantees, including states. For the same reason, HUD is also defining eligible fund uses for all grantees, including states. States may define other program terms under the authority of 24 CFR 570.481(a), and will be given maximum feasible deference in accordance with 24 CFR 570.480(c) in matters related to the administration of their NSP programs. Requirement Abandoned. A home or residential property is abandoned if either (a) mortgage, tribal leasehold, or tax payments are at least 90 days delinquent, or (b) 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, or (c) the property is subject to a court -ordered receivership or nuisance abatement related to abandonment pursuant to state or local law or otherwise meets a state definition of an abandoned home or residential property. Blighted structure. A structure is blighted when it exhibits objectively determinable signs of deterioration sufficient to constitute a threat to human health, safety, and public welfare. CDBG funds. CDBG funds means, in addition to the definition at 24 CFR 570.3, grant funds distributed under this notice. 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 either: (1) The appraisal requirements of the URA at 49 CFR 24.103, or (2) the Uniform Standards of Professional Appraisal Practice (USPAP), or (3) the appraisal requirements of the Federal Housing Administration (FHA) or a government sponsored enterprise (GSE); and the appraisal must be completed or updated within 60 days of a final offer made for the property by a grantee, subrecipient, developer, or individual homebuyer. However, if the anticipated value of the proposed acquisition is estimated at $25,000 or less, the current market appraised value of the property may be established by a valuation of the property that is based on a review of available data and is made by a person the grantee determines is qualified to make the valuation. Date of Notice of Foreclosure. For purposes of the NSP tenant protection provisions described at Section K, the date of notice of foreclosure shall be deemed to be the date on which complete title to a property is transferred to a successor entity or person as a result of an order of a court or pursuant to provisions in a mortgage, deed of trust, or security deed. If none of these events occur in the acquisition of a foreclosed property (e.g. in a short sale), in order to ensure fair and equitable treatment of bona fide tenants and consistency with the NSP definition of foreclosed, the date of notice of foreclosure shall be deemed to be the date on which the property is acquired for the NSP-assisted project. Note: This definition does not affect or otherwise alter the definition of "foreclosed" as provided in this notice. Foreclosed. A home or residential property has been foreclosed upon if any of the following conditions apply: (a) The property's current delinquency status is at least 60 days delinquent under the Mortgage Bankers of America delinquency calculation and the owner has been notified; (b) the property owner is 90 days or more delinquent on tax payments; (c) under state, local, or tribal law, foreclosure proceedings have been initiated or completed; or (d) foreclosure proceedings have been completed and title has been transferred to an intermediary aggregator or services that is not an NSP grantee, contractor, subrecipient, developer, or end user, 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 NSP, a land bank will operate in a specific, defined geographic area, It will purchase properties that have been 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 foreclosed property that it does not own, provided it charges the owner of the property the full cost 64326 Federal Register / Vol. 75, No. 201/Tuesday, October 19, 2010/Notices of the service or places a lien on the property for the full cost of the service. Subrecipient. Subrecipient shall have the same meaning as at the first sentence of 24 CFR 570.500(c). This includes any nonprofit organization (including a unit of general local government) that a state awards funds to. Use (for the purposes of HERA section 2301(c)(1)). Funds are used when they are obligated by a state, unit of general local government, or any subrecipient thereof, for a specific NSP activity; for example, for acquisition of a specific property. Funds are obligated for an activity when orders are placed, contracts are awarded, services are received, and similar transactions have occurred that require payment by the state, unit of general local government, or subrecipient during the same or a future period. Note that funds are not obligated for an activity when subawards (e.g., grants to subrecipients or to units of local government) are made. Vicinity. For the purposes of NSP3, HUD defines "vicinity" as each neighborhood identified by the NSP3 grantee as being the areas of greatest need. B. NSP3 Pre -Grant Process Background With this notice, HUD is establishing the NSP3 allocation formula, including reallocation provisions, and announcing the distribution of funds. CDBG grantees receiving NSP3 allocations may immediately begin to prepare and submit action plan substantial amendments for NSP3 funds, in accordance with this notice. (Insular areas should follow the requirements for entitlement communities.) Non - entitlement local government grantees will follow entitlement requirements except for the submission of an abbreviated plan rather than a substantial amendment or as otherwise explained in this notice. To receive NSP3 funding, each grantee listed in Attachment B must submit an action plan substantial amendment or abbreviated plan to HUD in accordance with this notice by March 1, 2011. HUD encourages each grantee to carry out its NSP activities in the context of a comprehensive plan for the community's vision of how it can make its neighborhoods not only more stable, but also more sustainable, inclusive, competitive, and integrated into the overall metropolitan fabric, including access to transit, affordable housing, employers, and services. HUD also encourages grantees to incorporate green and sustainable development practices, such as the examples in Attachment C. HUD encourages each local jurisdiction receiving an allocation to carefully consider its administrative capacity to use the funds within the statutory deadline. Jurisdictions may cooperate to carry out their grant programs through a joint request to HUD. HUD is providing regulatory waivers and alternative requirements to allow joint requests among units of general local government and to allow joint requests between units of general local government and a state. Any two or more contiguous units of general local government that are in the same metropolitan area and that are eligible to receive an NSP grant may instead make a joint request to HUD to implement a joint NSP program. A jurisdiction need not have a joint agreement with an urban county under the regular CDBG entitlement program to request a joint program for NSP funding. Similarly, any community eligible to receive an NSP grant may instead make a request for a joint NSP program with its state. An NSP joint request under a cooperation agreement results in a single combined grant and a single action plan substantial amendment. Potential requestors should contact HUD as soon as possible (as far as possible in advance of publishing a proposed NSP substantial amendment) for technical guidance. The requestors will specify which jurisdiction will receive the funds and administer the combined grant on behalf of the requestors; in the case of a joint request between a local government jurisdiction and a state, the state will administer the combined grant. (Grantees choosing this option should consider the Consolidated Plan and citizen participation implications of this approach. The lead entity's substantial amendment or abbreviated plan will cover any participating members. The citizen participation process must include citizens of all jurisdictions participating in the joint NSP program, not just those of the lead entity.) Given the rule of construction in HERA that NSP funds generally are construed as CDBG program funds, subject to CDBG program requirements, HUD generally is treating NSP3 funds as a special allocation of Fiscal Year (FY) 2010 CDBG funding. This has important consequences for local governments presently participating in an existing urban county program, and for metropolitan cities that have joint agreements with urban counties. HUD will consider any existing cooperation agreements between a local government and an urban county governing FY2010 CDBG funding (for purposes of either an urban county or a joint program) to automatically cover NSP funding as well. These cooperation agreements will continue to apply to the use of NSP funds for the duration of the NSP grant, just as cooperation agreements covering regular CDBG Entitlement program funds continue to apply to any use of the funds appropriated during the 3- year period covered by the agreements. For example, a local government presently has a cooperation agreement covering a joint program or participation in an urban county for Federal FYs 2009, 2010 and 2011. The local government may choose to discontinue its participation with the county at the end of the applicable qualification period for purposes of regular CDBG entitlement funding. However, the county will still be responsible for any NSP3 projects funded in that community, and for any NSP3 funding the local government receives from the county, until those funds are expended and the funded activities are completed. A third method of cooperating is also available. A jurisdiction may choose to apply for its entire grant, and then enter into a subrecipient agreement with another jurisdiction or nonprofit entity to administer the grant. In this manner, for example, all of the grantees operating in a single metropolitan area could designate the same land -bank entity (or the state housing finance agency) as a subrecipient for some or all of their NSP activities. Each NSP3 grantee will have until March 1, 2011, to complete and submit a substantial amendment to its annual action plan or an abbreviated plan. A grantee that wishes to submit its action plan amendment to HUD electronically in the DRGR system rather than by paper may do so by contacting its local field office for the DRGR submission directions. Paper submissions to HUD also will be allowed, although each grantee must set up its action plan in DRGR prior to the deadline for the first required performance report after receiving a grant. HUD encourages grantees, during development of their action plan amendments or abbreviated plans, to contact HUD field offices for guidance in complying with these requirements, or if they have any questions regarding meeting grant requirements. Normally, in the CDBG program, a grantee takes at least 30 days soliciting comment from its citizens before it submits an annual action plan to HUD, which then has 45 days to accept or reject the plan. To expedite the process and to ensure that the NSP grants are Federal Register/Vol. 75, No. 201/Tuesday, October 19, 2010/Notices 64327 awarded in a timely manner, while preserving reasonable citizen participation, HUD is waiving the requirement that the grantee follow its citizen participation plan for this substantial amendment. HUD is shortening the minimum time for citizen comments and requiring the substantial amendment or abbreviated plan to be posted on the grantee's official Web site as the materials are developed, published, and submitted to HUD. A grantee will be deemed by HUD to have received its NSP grant at the time HUD signs its NSP grant agreement (or amendment thereof, in the case of a state that later receives reallocated grant funds). Grantees are cautioned that, despite the expedited application and plan process, they are still responsible for ensuring that all citizens have equal access to information about the programs. Among other things, this means that each grantee must ensure that program information is available in the appropriate languages for the geographic area served by the jurisdiction. This will be a particular issue for states that make grants covering regular CDBG entitlement areas (or to entitlement grantees). Because regular State CDBG funds are not used in entitlement areas, State CDBG staffs may not be aware of limited English proficient (LEP) speaking populations in those metropolitan jurisdictions. HUD will review each grantee submission for completeness and consistency with the requirements of this notice and will disapprove incomplete and inconsistent action plan amendments or abbreviated plans. HUD will allow revision and resubmission of a disapproved amendment or abbreviated plan in accordance with 24 CFR 91.500(d) so long as any such resubmission is received by HUD 45 days or less following the date of first disapproval. In combination, the notice alternative requirements provide the following expedited steps for NSP grants: • Proposed action plan amendment or abbreviated plan published via the usual methods and on the Internet for no less than 15 calendar days of public comment; • Final action plan amendment or abbreviated plan posted on the Internet and submitted to HUD by March 1, 2011 (grant application includes Standard Form 424 (SF-424) and certifications); • HUD expedites review; • HUD accepts the plan and prepares a cover letter, grant agreement, and grant conditions; • Grant agreement signed by HUD and immediately transmitted to the grantee; • Grantee signs and returns the grant agreements; • HUD establishes the line of credit and the grantee requests and receives DRGR access (if it does not already have access); • After completing the environmental review(s) pursuant to 24 CFR part 58 and, as applicable, receiving from HUD or the state an approved Request for Release of Funds and certification, the grantee may draw down funds from the line of credit. In consideration of the shortened comment period, it is essential that grantees ensure that affected parties have sufficient notice of the opportunity to comment. The action plan substantial amendment or abbreviated plan and citizen participation alternative requirement will permit an expedited grant -making process, but one that still provides for public notice, appraisal, examination, and comment on the activities proposed for the use of NSP3 grant funds. Note: HUD believes an adequate and acceptable substantial amendment or abbreviated plan should be no longer than 25 pages. A plan should provide sufficient detail for citizens and HUD reviewers. Internet address links can be provided to longer elements that may change, such as detailed rehabilitation standards. Requirement 1. General. Except as described in this notice, statutory and regulatory provisions governing the CDBG program for states and entitlement communities, as applicable, shall apply to the use of these funds. Except as described in this notice, non -entitlement local government grantees receiving a grant directly from HUD shall follow statutory and regulatory provisions governing the CDBG program for entitlement communities. 2. Contents of an NSP Action Plan substantial amendment or abbreviated plan. The elements in the NSP substantial amendment to the Annual Action Plan or an abbreviated plan required for the CDBG program under part 91 are: a. General information about needs, distribution, use of funds, and definitions: i. Each grantee must use the HUD Foreclosure Need Web site as linked to from http://www.hud.gov/nsp to submit to HUD the locations of its NSP3 areas of greatest need. On this site, HUD provides estimates of foreclosure need and a foreclosure related needs scores at the Census Tract level. The score rank need from 1 to 20, with 20 being census tracts with the HUD -estimated greatest need. ii. The neighborhood or neighborhoods identified by the NSP3 grantee as being the areas of greatest need must have an individual or average combined index score for the grantee's identified target geography that is not less than the lesser of 17 or the twentieth percentile most needy score in an individual state. For example, if a state's twentieth percentile most needy census tract is 18, the requirement will be a minimum need of 17. If, however, a state's twentieth percentile most needy census tract is 15, the requirement will be a minimum need of 15. HUD will provide the minimum threshold for each state at its Web site http://www.hud.gov/nsp. If more than one neighborhood is identified in the Action Plan, HUD will average the neighborhood NSP3 scores, weighting the scores by the estimated number of housing units in each identified neighborhood. iii. 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, as amended by the Recovery Act and the Dodd -Frank Act; iv. For the purposes of the NSP3, the narratives will include: (A) A definition of "blighted structure" in the context of state or local law; (B) A definition of "affordable rents;" (C) A description of how the grantee will ensure continued affordability for NSP-assisted housing; and (D) A description of housing rehabilitation standards that will apply to NSP-assisted activities. b. Information by activity describing how the grantee will use the funds, identifying: i. The eligible use of funds under NSP3; ii. The eligible CDBG activity or activities; iii. The areas of greatest need addressed by the activity or activities; vi. The expected benefit to income - qualified persons or households or areas; v. Appropriate performance measures for the activity (e.g., units of housing to be acquired, rehabilitated, or demolished for the income levels represented in DRGR, which are currently 50 percent of area median income and below, 51 to 80 percent, and 81 to 120 percent); vi. Amount of funds budgeted for the activity; 64328 Federal Register/Vol. 75, No. 201 /Tuesday, October 19, 2010 /Notices vii. The name and location of the entity that will carry out the activity; and viii. The expected start and end dates of the activity. c. A brief description of the general terms under which assistance will be provided, including: i. Range of interest rates (if any); ii. Duration or term of assistance; Tenure of beneficiaries (e.g., renters or homeowners); and vi, If the activity produces housing, how the design of the activity will ensure continued affordability; v. How the grantee shall, to the maximum extent feasible, provide for the hiring of employees who reside in the vicinity of NSP3 projects or contract with small businesses that are owned and operated by persons residing in the vicinity of such project, including information on existing local ordinances that address these requirements; vi. The procedures used to create preferences for the development of affordable rental housing developed with NSP3 funds; and vii. Whether the funds used for the activity are to count toward the requirement to provide benefit to low- income persons (earning 50 percent or less of area median income), d. The action plan narrative should specifically address how the grantee's program design will address the local housing market conditions. e. Information on how to contact grantee program administrators, so that citizens and other interested parties know whom to contact for additional information, 3. Continued affordability. Grantees shall ensure, to the maximum extent practicable and for the longest feasible term, that the sale, rental, or redevelopment of abandoned and foreclosed -upon homes and residential properties under this section remain affordable to individuals or families whose incomes do not exceed 120 percent of area median income or, for units originally assisted with funds under the requirements of section 2301(f)(3)(A)(ii) of HERA, as amended, remain affordable to individuals and families whose incomes do not exceed 50 percent of area median income. a, In its NSP action plan substantial amendment, a grantee will define "affordable rents" and the continued affordability standards and enforcement mechanisms that it will apply for each (or all) of its NSP activities, HUD will consider any grantee adopting the HOME program standards at 24 CFR 92.252(a), (c), (e), and (f), and 92.254, to be in minimal compliance with this standard and expects any other standards proposed and applied by a grantee to be enforceable and longer in duration. (Note that HERA's continued affordability standard is longer than that required of subrecipients and participating units of general local government under 24 CFR 570.503 and 570.501(b).) b. The grantee must require each NSP- assisted homebuyer to receive and complete at least 8 hours of homebuyer counseling from a HUD -approved housing counseling agency before obtaining a mortgage loan. If the grantee is unable to meet this requirement for a good cause (e.g., there are no HUD - approved housing counseling agencies within the grantee's jurisdiction, or there are no HUD -approved housing counseling agencies within the grantee's jurisdiction that engage in homebuyer counseling), the grantee may submit a request for an exception to this requirement to the responsible HUD field office, and the HUD field office has the authority to grant an exception for good cause. The grantee must ensure that the homebuyer obtains a mortgage loan from a lender who agrees to comply with the bank regulators' guidance for non-traditional mortgages (see, Statement on Subprime Mortgage Lending issued by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Department of the Treasury, and National Credit Union Administration, available at http:// wvirwidic.gov/regulations/laws/rules/ 5000-5160.html). Grantees must design NSP programs to comply with this requirement and must document compliance in the records, for each homebuyer. Grantees are cautioned against providing or permitting homebuyers to obtain subprime mortgages for whom such mortgages are inappropriate, including homebuyers who qualify for traditional mortgage loans. 4. Citizen participation alternative requirement. HUD is providing an alternative requirement to 42 U.S.C. 5304(a)(2) and (3), to expedite distribution of grant funds and to provide for expedited citizen participation for the NSP substantial amendment, Provisions of 24 CFR 91.105(k), 91,115(i), 570.302 and 570.486, with respect to following the citizen participation plan, are waived to the extent necessary to allow implementation of the requirements below. a, Initial Allocation. To receive its grant allocation, a grantee must submit to HUD for approval an NSP3 application by March 1, 2011. This submission will include a signed SF- 424, signed certifications, and a substantial action plan amendment or abbreviated plan meeting the requirements of paragraph b below. (24 CFR 91.505 is waived to the extent necessary to require submission of the substantial amendment to HUD for approval in accordance with this notice.) Reallocation. To receive an NSP reallocation, a grantee must submit to HUD for approval an NSP application by the deadline indicated in a reallocation announcement. This submission will include a signed standard Federal form SF-424, signed certifications, and a substantial action plan amendment or abbreviated plan meeting the requirements of paragraph B.3.b below. (24 CFR 91.505 is waived to the extent necessary to require submission of the substantial amendment to HUD for approval in accordance with this notice.) b. Each grantee must prepare and submit its annual Action Plan amendment or abbreviated plan to HUD in accordance with the consolidated plan procedures under the CDBG program as modified by this notice, or HUD will reallocate the funds allocated for that grantee. HUD is providing alternative requirements to 42 U.S.C. 5304(a)(2) and waiving 24 CFR 91.105(c)(2), 91.105(k), 91.115(c)(2), and 91,115(i) to the extent necessary to allow the grantee to provide no fewer than 15 calendar days for citizen comment (rather than 30 days) for its initial NSP submission and any subsequent substantial NSP action plan amendment, and to require that, at the time of submission to HUD, each grantee post its approved action plan amendment and any subsequent NSP amendments on its official Web site along with a summary of citizen comments received within the 15-day comment period. After HUD processes and approves the plan amendment and both HUD and the grantee have signed the grant agreement, HUD will establish the grantee's line of credit in the amount of funds included in the Action Plan amendment, up to the allocation amount. 5. Joint requests. To expedite the use of funds, HUD is providing an alternative requirement to 42 U.S.C. 5304(i) and is waiving 24 CFR 570.308 to the extent necessary to allow for additional joint programs described below. a. Unit of General Local Government Joint Agreements. Two or more contiguous jurisdictions that are eligible to receive a NSP allocation and are located in the same metropolitan area Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices 64329 may enter into joint agreements. All members to the joint agreement must be eligible to receive NSP1 or NSP3 funds, and one unit of general local government must be designated as the lead entity. The lead entity must execute the NSP grant agreement with HUD. Consistent with 24 CFR 570,308, the lead entity must assume responsibility for administering the NSP grant on behalf of all members, in compliance with applicable program requirements. The lead entity's substantial amendment to the action plan or abbreviated plan will include all participating communities. b. Joint agreements with a state. Any jurisdiction that is eligible to receive an NSP allocation may enter into a joint agreement with its state. The state shall be the lead entity and must assume responsibility for administering the NSP grant on behalf of the local government, in compliance with applicable program requirements. The substantial amendment to the state's action plan will include any participating unit of general local government. c. Local jurisdictions receiving reallocation funds may enter into joint agreements in accordance with paragraph B.5.a, or b., regardless of whether the local jurisdiction had a joint agreement for the original NSP allocation. 6. Effect of existing cooperation agreements governing joint programs and urban counties for NSP3 (see NSP1 Notice for parallel language for NSP1 grantees). Any cooperation agreement between a unit of general local government and a county, concerning either a joint program or participation in an urban county under 24 CFR 570.307 or 570,308, and governing CDBG funds appropriated for Federal FY 2010, will be considered to incorporate and apply to NSP3 funding. Any such cooperation agreements will continue to apply to the use of NSP3 funds until the NSP3 funds are expended and the NSP3 grant is closed out. Grantees should note that certain provisions in existing cooperation agreements that govern CDBG funding may be inconsistent with parts of HERA, the Recovery Act, the Dodd -Frank Act or this notice. For instance, set minimum and/or maximum allocation amounts may conflict with priority distributions to areas of greatest need identified in the grantee's action plan substantial amendment, Conforming amendments should be made to existing cooperation agreements, as necessary, to comply with NSP statutory requirements and this notice. C. Reimbursement for Pre -Award Costs Background NSP grantees will need to move forward rapidly to prepare the NSP substantial amendment or abbreviated plan and to undertake other administrative actions, including environmental reviews, as soon as allocations are known. Therefore, HUD is granting permission to states and jurisdictions receiving a direct allocation of NSP funds to incur pre - award costs as if each was a new grantee preparing to receive its first allocation of CDBG funds, Requirement HUD is waiving 24 CFR 570.200(h) to the extent necessary to grant permission to jurisdictions receiving a direct NSP allocation under this notice to incur pre - award costs as if each was a new grantee preparing to receive its first allocation of CDBG funds, Similarly, in accordance with OMB Circular A-87, Attachment B, paragraph 31, HUD is allowing states to incur pre -award costs as if each was a new grantee preparing to receive its first allocation of CDBG funds, NSP grantees will be allowed to incur costs necessary to develop the NSP substantial action plan amendment and undertake other administrative actions necessary to receive its first grant, prior to the costs being included in the final plan, provided that the other conditions of 24 CFR 570.200(h) are met, (For units of general local government applying to the state (including entitlements not receiving a direct NSP allocation under this notice), 24 CFR 570.489(b) applies unmodified. Units of general local government receiving direct NSP allocations may incur pre -award costs as would an entitlement community.) D. Grantee Capacity and Grant Conditions Background In the October 6, 2008 Notice, HUD encouraged each local jurisdiction receiving an allocation to carefully consider its administrative capacity to use the funds within the statutory deadline. To support this consideration, HUD will provide each grantee a self - assessment tool that grantees may find useful in better understanding their capacity to undertake and manage NSP activities, This is essentially the same self -assessment tool that is used for NSP Technical Assistance purposes and it will allow HUD to more rapidly identify capacity gaps and technical assistance needs and to provide appropriate technical assistance. Although HUD suggests that every NSP grantee complete and submit the self - assessment with its substantial amendment or abbreviated plan, HUD will require some grantees to complete and submit such a self -assessment as a special condition of receiving funding. Requirement For NSP grantees that HUD determines are high risk in accordance with 24 CFR 85,12(a), HUD will apply additional grant conditions in accordance with 24 CFR 85.12(b). E. Income Eligibility Requirement Changes Background The NSP program includes two low - and moderate -income requirements at HERA section 2301(f)(3)(A) that supersede existing CDBG income qualification requirements. Under the heading "Low and Moderate Income Requirement," HERA states that: all of the funds appropriated or otherwise made available under this section shall be used with respect to individuals and families whose income does not exceed 120 percent of area median income. This provision does two main things. First, for the purposes of NSP, it effectively supersedes the overall benefit provisions of the HCD Act and the CDBG regulations, which allow up to 30 percent of a grant to be used for activities that meet a national objective other than low- and moderate -income benefit. Thus, NSP allows the use of only the low- and moderate -income benefit national objective. Activities may not qualify under NSP using the "prevent or eliminate slums and blight" or "address urgent community development needs" objectives. Second, this provision also redefines and supersedes the definition of "low - and moderate -income," effectively allowing households whose incomes exceed 80 percent of area median income but do not exceed 120 percent of area median income to qualify as if their incomes did not exceed the published low- and moderate -income levels of the regular CDBG program. To prevent confusion, HUD will refer to this new income group as "middle income," and keep the regular CDBG definitions of "low-income" and "moderate income" in use. Further, HUD will characterize aggregated households whose incomes do not exceed 120 percent of median income as "low-, moderate-, and middle -income households," abbreviated as LMMH, For the purposes of NSP only, an activity may meet the HERA low- and moderate - income national objective if the assisted activity: 64330 Federal Register/Vol. 75, No. 201 /Tuesday, October 19, 2010 /Notices • Provides or improves permanent residential structures that will be occupied by a household whose income is at or below 120 percent of area median income (abbreviated as LMMH); • Serves an area in which at least 51 percent of the residents have incomes at or below 120 percent of area median income (LMMA); or • Serves a limited clientele whose incomes are at or below 120 percent of area median income (LMMC). HUD will use the parenthetical terms above to refer to NSP national objectives in program implementation, to avoid confusion with the regular HCD Act definitions, Land banks are not allowed in the regular CDBG program because of the very high risk that the delay between acquiring property and meeting a national objective can be excessively lung, attenuating the intended CDBG program benefits by delaying benefit far beyond the annual or even the 5-year consolidated plan cycles. In the regular CDBG program (and in NSP other than in an eligible land -bank use), a property acquisition activity is dependent on the subsequent re -use of the property meeting a national objective in order to demonstrate program compliance. Given this, the HERA direction that assistance to land banks is an eligible use of NSP funds requires an alternative requirement and policy clarification. For grantees choosing to assist land banks or demolition of structures with NSP funds, the change to the income qualification level for low-, moderate - and middle -income areas will likely include most of the neighborhoods where property stabilization is required. If an assisted land bank is not merely acquiring properties, but is also working in an area in which other activities are being carried out that are intended to arrest neighborhood decline, such as maintenance, demolition, and facilitating redevelopment of the properties, HUD will, for NSP-assisted activities only, accept that the acquisition and management activities of the land bank may provide sufficient benefit to an area generally (as described in 24 CFR 570.208(a)(1) and 570,483(b)(1)) to meet a national objective (LMMA) prior to final disposition of the banked property. HUD notes that the grantee must determine the actual service area benefiting from a land bank's activities, in accordance with the regulations. However, HUD does not believe the benefits of just holding property are sufficient to stabilize most neighborhoods or that this is the best use of limited NSP funds absent a re -use plan. Therefore, HUD requires that a land bank may not hold a property for more than 10 years without obligating the property for a specific, eligible redevelopment of that property in accordance with NSP requirements. Note that if a state provides funds to an entitlement community, the entitlement community must apply the area median income levels applicable to its regular CDBG program geography and not the "balance of state" levels. Other than the change in the applicable low- and moderate -income qualification level from 80 percent to 120 percent and this notice's change to the calculation at 570,483(b)(3), the area benefit, housing, and limited clientele benefit requirements at 24 CFR 570,208(a) and 570.483(b) remain unchanged, as does the required documentation. The other NSP low- and moderate - income related provision, as modified by the Dodd -Frank Act, states that: "not less than 25 percent of the funds appropriated or otherwise made available under this section shall be used to house individuals or families whose incomes do not exceed 50 percent of area median income." The Dodd -Frank Act struck language in HERA that specified that funds meeting the 25 percent requirement must be used specifically for the purchase and redevelopment of abandoned and foreclosed homes or residential properties. This means that, as of the effective date of the Dodd - Frank Act, any NSP eligible activity used to house individuals or families at or below 50 percent area medium income may be used to satisfy this requirement (i.e., vacant properties that are not abandoned or foreclosed may be used to meet the requirement as well as eligible commercial properties that are reused to house individuals and families at or below 50% AMI). However, NSP1 and NSP2 funds already obligated or expended prior July 21, 2010, do not retroactively satisfy this requirement. HUD advises grantees to take note of this threshold as they design NSP activities. This provision does not have a parallel in the regular CDBG program. Grantees must document that an amount equal to at least 25 percent of a grantee's NSP grant (initial allocation plus any program income) has been budgeted in the initial approved action plan substantial amendment or abbreviated plan for activities that will provide housing for income -qualified individuals or families. Prior to and at grant closeout, HUD will review grantees for compliance with this provision by determining whether at least 25 percent of grant funds have been expended for housing for individual households whose incomes do not exceed 50 percent of area median income. HUD is providing a waiver and alternative requirement to allow grantees to determine low- and moderate income benefit on a unit basis to allow greater support of mixed income housing than the structure basis required by 24 CFR 570.483(b)(3). (Under the cited regulation, the general rule is that at least 51 percent of the residents of an assisted structure must be income eligible.) Under the unit approach, one or more of the units in a structure must house income -eligible families, but the remainder of the units may be market rate, so long as the proportion of assistance provided compared to the overall project budget is no more than the proportion of units that will be occupied by income -eligible households compared to the number of units in the overall project. Under the unit approach, the number of income - eligible units is proportional to tho amount of assistance provided. Note that this approach may only be used if the units are generally comparable in size and finishes. Based on HUD experience, this approach is generally more compatible with large-scale development of mixed -income housing than the structure approach under which a dollar of CDBG assistance to a structure means that 51 percent of the units must meet income requirements. For the purposes of NSP, adopting the unit basis continues to benefit individuals and families whose income does not exceed 120 percent of area median income by limiting the proportion of the funding to the proportion of units that are being assisted with NSP funds. This approach also helps to avoid displacing existing over -income tenants in a building being treated with NSP. Finally, it promotes the type of mixed -income developments that experience shows to be more successful both economically and socially. Therefore, the waiver and alternative requirements allow the grantee a choice. The grantee may measure benefit within a housing development project (1) according to the existing CDBG requirements, (2) according to the HOME program requirements at 24 CFR 92,205(d) or (3) according to the modified CDBG alternative requirements specified in this notice, which extend the CDBG exception noted above. The grantee must select and use just one method for each project. Federal Register/Vol. 75, No. 201 / Tuesday, October 19, 2010 /Notices 64331 Requirements 1. Overall benefit supersession and alternative requirement. The requirements at 42 U.S.C. 5301(c), 42 U.S.C, 5304(b)(3)(A), 24 CFR 570.484 (for states), and 24 CFR 570.200(a)(3) that 70 percent of funds are for activities that benefit low- and moderate -income persons are superseded and replaced by section 2301(f)(3)(A) of HERA. One hundred percent of NSP funds must be used to benefit individuals and households whose income does not exceed 120 percent of area median income. NSP shall refer to such households as "low-, moderate-, and middle -income." 2. National objectives supersession and alternative requirements. The requirements at 42 U.S.0 5301(c) are superseded and 24 CFR 570,208(a) and 570,483 are waived to the extent necessary to allow the following alternative requirements: a. for purposes of NSP only, the term "low- and moderate -income person" as it appears throughout the CDBG regulations at 24 CFR part 570 shall be defined as a member of a low-, moderate-, and middle -income household, and the term "low- and moderate -income household" as it appears throughout the CDBG regulations shall be defined as a household having an income equal to or less than 120 percent of area median income, measured as 2.4 times the current Section 8 income limit for households below 50 percent of median income, adjusted for family size. A state choosing to carry out an activity directly must apply the requirements of 24 CFR 570.208(a) to determine whether the activity has met the low-, moderate-, and middle -income (LMMI) national objective and must maintain the documentation required at 24 CFR 570.506 to demonstrate compliance to HUD. b. The national objectives related to prevention and elimination of slums and blight and addressing urgent community development needs (24 CFR 570.208(b) and (c) and 570.483(c) and (d)) are not applicable to NSP-assisted activities. c. Each grantee whose plan includes assisting rental housing shall develop and make public its definition of affordable rents for NSP-assisted rental projects. d. An NSP-assisted property may not be held in a land bank for more than 10 years without obligating the property for a specific, eligible redevelopment of that property in accordance with NSP requirements. e. Not less than 25 percent of any NSP grant shall be used to house individuals or families whose incomes do not exceed 50 percent of area median income. f. HUD will consider assistance for a multi -unit housing project involving new construction, acquisition, reconstruction, or rehabilitation to benefit LMMI households in the following circumstances: (i)(A) The NSP assistance defrays the development costs of a housing project providing eligible permanent residential units that, upon completion, will be occupied by income -qualified households; and (B) if the project is rental, the units occupied by income -qualified households will be leased at affordable rents. The grantee or unit of general local government shall adopt and make public its standards for determining "affordable rents" for this purpose; and (C) The proportion of the total cost of developing the project to be borne by NSP assistance is no greater than the proportion of units in the project that will be occupied by income -qualified households; or (ii) When NSP assistance defray the development costs of eligible permanent residential units, such assistance shall be considered to benefit LMMI persons if the grantee follows the provisions of 24 CFR 92.205(d); or (iii) The requirements of 24 CFR 570.208(a)(3) or 570.483(b)(3) are met, as applicable. (iv) The grantee must select and use just one method for each project. (v) The term "project" will be defined as in the HOME Program at 24 CFR 92.2. (vi) If the grantee applies option (i) or (ii) above to a housing project, 24 CFR 570,208(a)(3) or 570,483(b)(3), as applicable, is waived for that project. F. State Distribution to Entitlement Communities and Indian Tribes Background This notice includes an alternative requirement to the HCD Act and a regulatory waiver allowing distribution of funds by a state to CDBG regular entitlement communities and Tribes. This is consistent with the provision of HERA that specifically sets distribution priorities for areas with the greatest need, including "metropolitan areas, metropolitan cities, urban areas, rural areas, low- and moderate -income areas * * *." Therefore, states receiving allocations under this notice may distribute funds to or within any jurisdiction within the state that is among those with the greatest need, even if the jurisdiction is among those receiving a direct formula allocation of funds from HUD under the regular CDBG program or this notice. Requirement Alternative requirement for distribution to CDBG metropolitan cities, urban counties, and Tribes. In accordance with the direction of HERA that grantees distribute funds to the areas of greatest need, HUD is providing an alternative requirement to 42 U.S.C. 5302(a)(7) (definition of "nonentitlement area") and waiving provisions of 24 CFR part 570, including 24 CFR 570.480(a), that would prohibit states electing to receive CDBG funds from distributing such funds to units of general local government in entitlement communities or to Tribes. The appropriations law supersedes the statutory distribution prohibition at 42 U.S.C, 5306(d)(1) and (2)(A). Alternatively, the state is required to distribute funds without regard to a local government status under any other CDBG program and must use funds in entitlement jurisdictions if they are identified as areas of greatest need, regardless of whether the entitlement receives its own NSP allocation. G. State's Direct Action Background In the State CDBG Program, states receiving CDBG funds may not directly use the funds for activities, but must distribute them to units of general local government, which then use the funds for program activities. HUD also notes the language of HERA section 2301(c) that says, in part, that: "Any State * * * that receives amounts pursuant to this section shall * * * use such amounts to purchase and redevelop * * *." This clearly speaks to the states using funds directly for projects and supersedes the HCD Act direction for states to only distribute funds to nonentitlement areas. Direct use of funds by a state may also result in more expeditious use of NSP funds. Therefore, a state receiving NSP funds may carry out NSP activities directly for some or all of its assisted grant activities, just as CDBG entitlement communities do under 24 CFR 570.200(f), including, but not limited to, carrying out activities using its own employees, procuring contractors, private developers, and providing loans and grants through nonprofit subrecipients (including local governments and other public nonprofits such as regional or local planning or development authorities and public housing authorities). 64332 Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices For those activities a state chooses to carry out directly, HUD strongly advises the state to adopt the recordkeeping required for an entitlement community al 24 CFR 570.506 and the subrecipient agreement provisions at 24 CFR 570.503. Also, in such cases, as an alternative requirement to 42 U.S.C. 5304(i), the state may retain and re -use program income as if it were an entitlement community. HUD is granting regulatory waivers of State CDBG regulations to conform the applicable management, real property change of use, and recordkeeping rules when a state chooses to carry out activities as if it were an entitlement community. Requirements 1. Responsibility for state review and handling of noncompliance. This change conforms NSP requirements with the waiver allowing the state to carry out activities directly. 24 CFR 570.492 is waived and the following alternative requirement applies: The state shall make reviews and audits, including on -site reviews of any subrecipients, designated public agencies, and units of general local government as may be necessary or appropriate to meet the requirements of 42 U.S.C. 5304(e)(2), as amended, as modified by this notice. In the case of noncompliance with these requirements, the state shall take such actions as may be appropriate to prevent a continuance of the deficiency, mitigate any adverse effects or consequences, and prevent a recurrence. The state shall establish remedies for noncompliance by any designated public agencies or units of general local governments and for its subrecipients. 2. Change of use of real property for state grantees acting directly. This waiver conforms the change of use of real property rule to the waiver allowing a state to carry out activities directly. For purposes of this program, in 24 CFR 570.489(j), (j)(1), and the last sentence of (j)(2), "unit of general local government" shall be read as "unit of general local government or state." 3. Recordkeeping for a state grantee acting directly. Recognizing that the state may carry out activities directly, 24 CFR 570.490(b) is waived in such a case and the following alternative provision shall apply: State Records. The state shall establish and maintain such records as may be necessary to facilitate review and audit by HUD of the state's administration of NSP funds under 24 CFR 570.493. Consistent with applicable statutes, regulations, waivers and alternative requirements, and other Federal requirements, the content of records maintained by the state shall be sufficient to: (1) Enable HUD to make the applicable determinations described at 24 CFR 570,493; (2) make compliance determinations for activities carried out directly by the state; and (3) show how activities funded are consistent with the descriptions of activities proposed for funding in the action plan. For fair housing and equal opportunity purposes, and as applicable, such records shall include data on the racial, ethnic, and gender characteristics of persons who are applicants for, participants in, or beneficiaries of the program. 4. State compliance with certifications for state grantees acting directly. This is a conforming change related to the waiver to allow a state to act directly, Because a state grantee under this appropriation may carry out activities directly, HUD is applying the regulations at 24 CFR 570.480(c) with respect to the basis for HUD determining whether the state has failed to carry out its certifications, so that such basis shall be that the state has failed to carry out its certifications in compliance with applicable program requirements. 5. Clarifying note on the process for environmental release of funds when a state carries out activities directly. Usually, a state distributes CDBG funds to units of local government and takes on HUD's role in receiving environmental certifications from the grantees and approving releases of funds. For NSP, HUD allows a state grantee to also carry out activities directly instead of distributing them to other governments. According to the environmental regulations at 24 CFR 58,4, when a state carries out activities directly, the state must submit the certification and request for release of funds to HUD for approval. H. Eligibility and Allowable Costs Background Most of the activities eligible under NSP are correlated with CDBG-eligible activities under 42 U.S.C. 5305(a). This correlation reduces implementation risks, because it ensures that the NSP grants are administered largely in accordance with long-established CDBG rules and controls. The table in the requirements paragraph below shows the eligible uses under NSP and the eligible activities from the regulations for the regular CDBG entitlement program that HUD has determined best correspond to those uses. If a grantee creates a program design that includes a CDBG-eligible activity that is not shown in the table to support an NSP- eligible use, the Department is providing an alternative requirement to 42 U.S.C. 5305(a) that HUD may allow a grantee an additional eligible -activity category if HUD finds the activity to be in compliance with NSP statutory requirements. As under the regular CDBG program, grantees may fund costs, such as reasonable developer's fees, related to NSP-assisted housing rehabilitation or construction activities. Only NSP1 funds may be used to redevelop acquired property for nonresidential uses, such as public parks, commercial uses, or mixed residential and commercial uses. Redevelopment activities using NSP2 and NSP3 funds must be for housing. The annual entitlement CDBG program allows up to 20 percent of any grant amount plus program income may be used for general administration and planning costs. The State CDBG Program is also subject to the 20 percent limitation, but within that cap up to 3 percent may be used by the state for state administrative costs and technical assistance to potential local government program grantees, with the remainder available to be granted to local government grantees for their administrative costs. Because some of the costs usually allocated under these caps are not applicable to NSP grants (for example, the costs of completing the entire consolidated plan process), these amounts seem excessive to HUD in the context of the NSP program. On the other hand, HUD wants to encourage and support expeditious, appropriate, and compliant use of grant funds, and to prevent fraud, waste, and abuse of funds, Therefore, HUD is providing an alternative requirement that an amount of up to 10 percent of an NSP grant provided to a jurisdiction and of up to 10 percent of program income earned may be used for general administration and planning activities as those are defined at 24 CFR 570.205 and 206, For all grantees, including states, the 10 percent limitation applies to the grant as a whole. The regulatory and statutory requirements for state match for program administration at 24 CFR 570.489(a)(i) are superseded by the statutory direction at section 2301(e)(2) of HERA that no matching funds shall be required for a state or unit of general local government to receive a grant. Requirements 1. Use of grant funds must constitute an eligible use under HERA, 2. In addition to being an eligible NSP use of funds, each activity funded under NSP must also be CDBG-eligible under Federal Register / Vol. 75, No. 201 /Tuesday, October 19, 2010 /Notices 64333 42 U.S.C. 5305(a) and meet a CDBG national objective. 3.a, Certain CDBG-eligible activities correlate to specific NSP-eligible uses and vice versa. 42 U.S.C. 5305(a) and 24 CFR 570.201-207 and 570.482(a) through (d) are superseded to the extent necessary to allow the eligible uses described under section 2301(c)(4) of HERA in accordance with this paragraph (including the table and subparagraphs below) or with permission granted, in writing, by HUD upon a written request by the grantee that demonstrates that the proposed activity constitutes an eligible use under NSP. All NSP grantees, including states, will use the NSP categories and CDBG entitlement regulations listed below. NSP-eligible uses Correlated eligible activities from the CDBG entitlement regulations (A) Establish financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties, including such mechanisms as soft -seconds, loan loss reserves, and shared -equity loans for low- and moderate -income homebuyers. (B) Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or re- develop such homes and properties. (C) Establish and operate land banks for homes and residential prop- erties that have been foreclosed upon. (D) Demolish blighted structures (E) Redevelop demolished or vacant properties as housing." • As part of an activity delivery cost for an eligible activity as defined in 24 CFR 570.206. • Also, the eligible activities listed below to the extent financing mech- anisms are used to carry them out. • 24 CFR 570.201(a) Acquisition (b) Disposition, (i) Relocation , and (n) Direct homeownership assistance (as modified below); • 24 CFR 570.202 eligible rehabilitation and preservation activities for homes and other residential properties. • HUD notes that any of the activities listed above may include re- quired homebuyer counseling as an activity delivery cost. • 24 CFR 570.201(a) Acquisition and (b) Disposition. • HUD notes that any of the activities listed above may include re- quired homebuyer counseling as an activity delivery cost. • 24 CFR 570.201(d) Clearance for blighted structures only. • 24 CFR 570.201(a) Acquisition, (b) Disposition, (c) Public facilities and improvements, (e) Public services for housing counseling, but only to the extent that counseling beneficiaries are limited to pro- spective purchasers or tenants of the redeveloped properties, (i) Re- location, and (n) Direct homeownership assistance (as modified below). • 24 CFR 570.202 Eligible rehabilitation and preservation activities for demolished or vacant properties. • 24 CFR 570.204 Community based development organizations. • HUD notes that any of the activities listed above may include re- quired homebuyer counseling as an activity delivery cost. *NSP1 funds used under eligible use (E) may be used for nonresidential purposes, while NSP2 and NSP3 funds must be used for housing. b. HUD will not consider requests to allow foreclosure prevention activities, or to allow demolition of structures that are not blighted. Neither will it allow purchase of residential properties and homes that have not been abandoned or foreclosed upon, except under paragraph (E) of the eligible use chart above. HUD does not have the authority to permit uses or activities not authorized by HERA. c. New construction of housing is eligible as part the redevelopment of demolished or vacant properties as provided in paragraph (E) of the eligible use chart above. d. 24 CFR 570.201(n) is waived and an alternative requirement provided for 42 U.S.C. 5305(a) to the extent necessary to allow provision of NSP-assisted homeownership assistance to persons whose income does not exceed 120 percent of median income. e. No NSP2 or NSP3 funds may be used to demolish any public housing (as defined by Section 3 of the U.S. Housing Act of 1937 (42 U.S.C. 1437a)). f. For NSP2 and NSP3, a grantee may not use more than 10 percent of its grant for demolition activities under HERA sections 2301(c)(4)(C) and (D), unless the Secretary determines that such use represents an appropriate response to local market conditions. NSP2 and NSP3 grantees seeking to use more than 10 percent of their grant amounts on demolition activities must request a waiver from HUD. 4. Alternative requirement for the limitation on planning and administrative costs. 24 CFR 570.200(g) and 570.489(a)(3) are waived to the extent necessary to allow each grantee under this notice to expend no more than 10 percent of its grant amount, plus 10 percent of the amount of program income received by the grantee, for activities eligible under 24 CFR 570.205 or 206. The requirements at 24 CFR 570.489 are waived to the extent that they require a state match for general administrative costs, (States may use NSP funds under this 10 percent limitation to provide technical assistance to local governments and nonprofit program participants.) I. Rehabilitation Standards Background HERA provides that any NSP-assisted rehabilitation of a foreclosed -upon home or residential property shall be to the extent necessary to comply with applicable laws, codes, and other requirements relating to housing safety, quality, and habitability, in order to sell, rent, or redevelop such homes and properties. HUD is also imposing this requirement for NSP3-assisted new construction. This imposes a requirement that does not exist in the CDBG program. This means that each grantee must describe or reference in its NSP action plan amendment what rehabilitation standards it will apply for NSP-assisted rehabilitation. As a reminder, grantees are subject to Section 504 of the Rehabilitation Act of 1973 and the Fair Housing Act, including their respective provisions related to physical accessibility standards for persons with disabilities. See 24 CFR part 8; 24 CFR 100,205. See also 24 CFR 570.487 and 24 CFR 570.602. HUD will monitor to ensure the standards are implemented. HERA defines rehabilitation to include improvernents to increase the energy efficiency or conservation of such homes and properties or to provide a renewable energy source or sources for such homes and properties. Such improvernents are also eligible under the regular CDBG program. HUD strongly encourages grantees to use NSP funds not only to stabilize neighborhoods in the short-term, but to strategically incorporate modern, green 64334 Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices building and energy -efficiency improvements in all NSP activities to provide for long-term affordability and increased sustainability and attractiveness of housing and neighborhoods. At minimum, NSP3 grantees must have the rehabilitation standards required below. See Appendix C for examples of green and energy -efficiency actions, Additional resources related to sustainable and energy -efficient construction are available on the NSP Resource Exchange Web site (http://wwww.hud.gov/nspta). Requirement. For NSP3, HUD is requiring that all gut rehabilitation (i.e., general replacement of the interior of a building that may or may not include changes to structural elements such as flooring systems, columns or load bearing interior or exterior walls) or new construction of residential buildings up to three stories must be designed to meet the standard for Energy Star Qualified New Homes. All gut rehabilitation or new construction of mid -or high-rise multifamily housing must be designed to meet American Society of Heating, Refrigerating, and Air -Conditioning Engineers (ASHRAE) Standard 90,1-2004, Appendix G plus 20 percent (which is the Energy Star standard for multifamily buildings piloted by the Environmental Protection Agency and the Department of Energy). Other rehabilitation must meet these standards to the extent applicable to the rehabilitation work undertaken, e.g., replace older obsolete products and appliances (such as windows, doors, lighting, hot water heaters, furnaces, boilers, air conditioning units, refrigerators, clothes washers and dishwashers) with Energy Star -labeled products. Water efficient toilets, showers, and faucets, such as those with the WaterSense label, must be installed. Where relevant, the housing should be improved to mitigate the impact of disasters (e.g., earthquake, hurricane, flooding, fires). J. Sale of Homes Background Section 2301(d)(3) of HERA directs that, if an abandoned or foreclosed -upon home or residential property is purchased, redeveloped, or otherwise sold to an individual as a primary residence, then such sale shall be in an amount equal to or less than the cost to acquire and redevelop or rehabilitate such home or property up to a decent, safe, and habitable condition. (Sales and closing costs are eligible NSP redevelopment or rehabilitation costs). Note that the maximum sales price for a property is determined by aggregating all costs of acquisition, rehabilitation, and redevelopment (including related activity delivery costs, which generally may include, among other items, costs related to the sale of the property). Requirements 1. In its records, each grantee must maintain sufficient documentation about the purchase and sale amounts of each property and the sources and uses of funds for each activity so that HUD can determine whether the grantee is in compliance with this requirement. A grantee will be expected to provide this documentation individually for each activity. 2. In determining the sales price limitation, HUD will not consider the costs of boarding up, lawn mowing, simply maintaining the property in a static condition, or, in the absence of NSP-assisted rehabilitation or redevelopment of the property, the costs of completing a sales transaction or other disposition to be redevelopment or rehabilitation costs, These costs may not be included by the grantee in the determination of the sales price for an NSP-assisted property. 3. For reporting purposes only, for a housing program involving multiple single-family structures under the management of a single entity, HUD will permit reporting the aggregation of activity delivery costs across the total portfolio of projects until completion of the program or closeout of the grant with HUD, whichever comes earlier. K. Acquisition and Relocation Background Acquisition of Foreclosed -Upon Properties. HUD notes that section 2301(d)(1) of HERA conflicts with section 301(3) of the URA (42 U.S.C. 4651) and related regulatory requirements at 49 CFR 24.102(d). As discussed further, section 2301(d)(1) of HERA requires that any acquisition of a foreclosed -upon home or residential property under NSP be at a discount from the current market -appraised value of the home or property and that such discount shall ensure that purchasers are paying below -market value for the home or property. Section 301(3) of the URA, as implemented at 49 CFR 24.102(d), provides that an offer of just compensation shall not be less than the agency's approved appraisal of the fair market value of such property. These URA acquisition policies apply to any acquisition of real property for a federally funded project, except for acquisitions described in 49 CFR 24,101(b)(1) through (5) (commonly referred to as "voluntary acquisitions"). As the more recent and specific statutory provision, section 2301(d)(1) of HERA prevails over section 301 of the URA for purposes of NSP-assisted acquisitions of foreclosed -upon homes or residential properties. NSP Appraisal Requirements. Section 2301(d)(1) of HERA requires an appraisal for purposes of determining the statutory purchase discount, This appraisal requirement applies to any NSP-assisted acquisition of a foreclosed - upon home or residential property (including voluntary acquisitions). As noted above, section 301 of the URA does not apply to voluntary acquisitions. While the URA and its regulations do not require appraisals for such acquisitions, the URA acquisition policies do not prohibit acquiring agencies from obtaining appraisals. Appendix A, 49 CFR 24.101(b)(1)(iv) and (2)(ii), acknowledges that acquiring agencies may still obtain an appraisal to support their determination of fair market value. One -for -One Replacement. HUD is providing an alternative requirement to the one -for -one replacement requirements set forth in 42 U.S.C. 5304(d)(2), as implemented at 24 CFR 42.375. The Department anticipates a large number of requests from grantees for whom the requirements will be onerous given the pressing rush to implement NSP, and several of the major housing markets affected by the foreclosure crisis have a surplus of abandoned and foreclosed -upon residential properties. The additional workload of reviewing requests under 42 U.S.C. 5304(d)(3) and 24 CFR 42.375(d) could cause a substantial backlog at HUD and delay NSP program operations. Therefore, the alternative requirement is that an NSP grantee is not required to meet the requirements of 42 U.S.C. 5304(d), as implemented at 24 CFR 42,375, to provide one -for -one replacement of low- and moderate - income dwelling units demolished or converted in connection with activities assisted with NSP funds. Alternatively, each grantee must submit the information described below relating to its demolition and conversion activities in its action plan substantial amendment or abbreviated plan. The grantee will report to HUD and citizens (via prominent posting of the DRGR reports on the grantee's official Internet site) on progress related to these measures until the closeout of its grant with HUD. HUD reminds grantees to be aware of the requirement to have and follow a residential antidisplacement and relocation plan for the CDBG and HOME programs. This requirement is not waived for those programs and Federal Register/Vol. 75, No. 201/Tuesday, October 19, 2010/Notices 64335 continues to apply to activities assisted with regular CDBG and HOME funds. Relocation Assistance. HUD is not waiving or specifying alternative requirements to the URA's relocation provisions. Those requirements that do not conflict with HERA continue to apply. HUD is not specifying alternative requirements to the relocation assistance provisions at 42 U.S.C. 5304(d). Guidance on meeting these requirements is available on the HUD Web site and through local HUD field offices. HUD urges grantees to consider URA requirements in designing their programs and to remember that there are URA obligations related to voluntary and involuntary property acquisition activities, even for vacant and abandoned property. Tenant Protections. The Recovery Act included tenant protections applicable to NSP grants. First, the Recovery Act included a provision applicable to any foreclosed upon dwelling or residential real property that was acquired by the initial successor in interest pursuant to the foreclosure after February 17, 2009 and was occupied by a bona fide tenant at the time of foreclosure. The use of NSP funds for acquisition of such property is subject to a determination by the grantee that the initial successor in interest complied with these requirements. Second, NSP grantees may not refuse to lease a dwelling unit in housing with such loan or grant to a participant under section 8 of the United States Housing Act of 1937 (42 U.S.0 1437f) because of the status of the prospective tenant as such a participant. Requirements One for One Replacement Requirements. 1. The one -for -one replacement requirements at 24 CFR 570.488, 570.606(c), and 42,375 are waived for low- and moderate -income dwelling units demolished or converted in connection with an activity assisted with NSP funds. As an alternative requirement to 42 U.S.C. 5304(d)(2)(A)(i) and (ii), each grantee planning to demolish or convert any low- and moderate -income dwelling units as a result of NSP-assisted activities must identify all of the following information in its NSP substantial amendment or abbreviated plan: (a) The number of low- and moderate - income dwelling units reasonably expected to be demolished or converted as a direct result of NSP-assisted activities; (b) The number of NSP affordable housing units (made available to low-, moderate-, and middle -income households) 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); and (c) The number of dwelling units reasonably expected to be made available for households whose income does not exceed 50 percent of area median income. The grantee must also report on actual performance for demolitions and production, as required elsewhere in this notice. Tenant Protections. 2. The following requirements apply to any foreclosed upon dwelling or residential real property that was acquired by the initial successor in interest pursuant to the foreclosure after February 17, 2009 and was occupied by a bona fide tenant at the time of foreclosure. The use of NSP funds for acquisition of such property is subject to a determination by the grantee that the initial successor in interest complied with these requirements. a. The initial successor in interest in a foreclosed upon dwelling or residential real property shall provide a notice to vacate to any bona fide tenant at least 90 days before the effective date of such notice. The initial successor in interest shall assume such interest subject to the rights of any bona fide tenant, as of the date of such notice of foreclosure: (i) Under any bona fide lease entered into before the date of notice of foreclosure to occupy the premises until the end of the remaining term of the lease, except that a successor in interest may terminate a lease effective on the date of sale of the unit to a purchaser who will occupy the unit as a primary residence, subject to the receipt by the tenant of the 90-day notice under this paragraph; or (ii) without a lease or with a lease terminable at will under State law, subject to the receipt by the tenant of the 90-day notice under this paragraph, except that nothing in this section shall affect the requirements for termination of any Federal- or State -subsidized tenancy or of any State or local law that provides longer time periods or other additional protections for tenants. b.i. In the case of any qualified foreclosed housing in which a recipient of assistance under section 8 of the United States Housing Act of 1937 (42 U.S.0 1437f) (the "Section 8 Program") resides at the time of foreclosure, the initial successor in interest shall be subject to the lease and to the housing assistance payments contract for the occupied unit. ii. Vacating the property prior to sale shall not constitute good cause for termination of the tenancy unless the property is unmarketable while occupied or unless the owner or subsequent purchaser desires the unit for personal or family use. iii. If a public housing agency is unable to make payments under the contract to the immediate successor in interest after foreclosure, due to (A) an action or inaction by the successor in interest, including the rejection of payments or the failure of the successor to maintain the unit in compliance with the Section 8 Program or (B) an inability to identify the successor, the agency may use funds that would have been used to pay the rental amount on behalf of the family—(1) to pay for utilities that are the responsibility of the owner under the lease or applicable law, after taking reasonable steps to notify the owner that it intends to make payments to a utility provider in lieu of payments to the owner, except prior notification shall not be required in any case in which the unit will be or has been rendered uninhabitable due to the termination or threat of termination of service, in which case the public housing agency shall notify the owner within a reasonable time after making such payment; or (2) for the family's reasonable moving costs, including security deposit costs. c. For purposes of this section, a lease or tenancy shall be considered bona fide only if: (i) the mortgagor under the contract is not the tenant; (ii) the lease or tenancy was the result of an arm's length transaction; and (iii) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property. See Section II,A for the definition of date of notice of foreclosure. d. The grantee shall maintain documentation of its efforts to ensure that the initial successor in interest in a foreclosed upon dwelling or residential real property has complied with the requirements under section K,2.a. and K.2.b. If the grantee determines that the initial successor in interest in such property failed to comply with such requirements, it may not use NSP funds to finance the acquisition of such property unless it assumes the obligations of the initial successor in interest specified in section K2.a. and K.2.b. e. Grantees must provide the relocation assistance required pursuant to 24 CFR 570.606 to tenants displaced as a result of an NSP-assisted activity and maintain records in sufficient detail to demonstrate compliance with the provisions of that section. For purposes 64336 Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices of clarification, grantees need to be aware that the NSP tenant protection requirements under the Recovery Act are separate and apart from the obligations imposed on grantees by the URA. The URA applies to any person displaced as a direct result of acquisition, rehabilitation, and/or demolition of real property for a federally -assisted project. Eligibility determinations under the URA and the required notices and relocation assistance requirements are separate and distinct from the NSP tenant protections in the Recovery Act. Grantees cannot assume that a person entitled to the NSP tenant protections under the Recovery Act is also eligible for assistance under the URA (or vice versa). Any tenant lawfully occupying the property evicted by the owner/mortgagor in order to facilitate an acquisition under the NSP program (including short sales) is most likely eligible for URA relocation assistance and payments as a displaced person. 3. The grantee of any grant or loan made from NSP funds may not refuse to lease a dwelling unit in housing with such loan or grant to a participant under the Section 8 Program because of the status of the prospective tenant as such a participant. 4. This section shall not preempt any Federal, State or local law that provides more protections for tenants. L. Note on Eminent Domain Although section 2303 of HERA appears to allow some use of eminent domain for public purposes, HUD cautions grantees that HERA section 2301(d)(1) may effectively ensure that all NSP-assisted property acquisitions must be voluntary acquisitions as the term is defined by the URA and its implementing regulations. Section 2301(d)(1) of HERA directs that any purchase of a foreclosed -upon home or residential property under NSP be at a discount from the current market appraised value of the home or residential property and that such discount shall ensure that purchasers are paying below -market value for the home or property. However, the Fifth Amendment to the U.S. Constitution provides that private property shall not be taken for public use without just compensation. The Supreme Court has ruled that a jurisdiction must pay fair market value for the purchase of property through eminent domain. A grantee contemplating using NSP funds to assist an acquisition involving an eminent domain action is advised to consult appropriate legal counsel before taking action. M. Timeliness of Use and Expenditure of NSP Funds Background One of the most critical NSP1 provisions is the HERA requirement at section 2301(c)(1) that any grantee receiving a grant: "* * * shall, not later than 18 months after the receipt of such amounts, use such amounts to purchase and redevelop abandoned and foreclosed homes and residential properties." HUD has defined the term "use" in this notice to include obligation of funds. A further complication is that HERA clearly expects grantees to earn program income under this grant program. As provided under 24 CFR 85.21, entitlements grantees and subrecipients shall disburse program income before requesting additional cash withdrawals from the U.S. Treasury. States are governed similarly by 24 CFR 570.489(e)(3) and 31 CFR part 205, This requirement is reflected in the regulations governing use of program income by states and units of general local government under the CDBG program. This means that a grantee that successfully and quickly deploys its program and generates program income may obligate, draw down, and expend an amount equal to its NSP1 allocation amount, and still have funds remaining in its line of credit, possibly subject to recapture at the 18-month deadline. On consideration, the Department chose to implement the NSP1 use test based on whether the state or unit of general local government has expended or obligated the NSP1 grant funds and program income in an aggregate amount at least equal to the NSP1 allocation. HUD also imposed a deadline for expending NSP1 grant funds because the intent of these grants clearly is to quickly address an emergency situation in areas of the greatest need. NSP2 and NSP3 grants follow the statutory expenditure deadlines described under the Recovery Act, which provides that grantees: "shall expend at least 50 percent of allocated funds within 2 years of the date fiords become available to the [recipient) for obligation, and 100 percent of such funds within 3 years of such date." NSP2 and NSP3 expenditure timelines are tighter than under NSP1. In the NSP2 NOFA, HUD required NSP2 grantees to expend their entire grant, including program income, within the statutory timeframes. Upon reflection, HUD has determined that the better interpretation would be similar to the NSP1 requirement that requires the expenditure of grant funds and program income in an aggregate amount at least equal to the NSP2 or NSP3 allocation. HUD is therefore including a revision to the NSP2 NOFA program requirements in this Notice. If any NSP grantee fails to meet the requirement to expend an amount equal to its grant within the relevant timelines, HUD, on the first business day after that deadline, will notify the grantee and restrict the amount of unused funds in the grantee's line of credit. HUD will allow the grantee 30 days to submit information to HUD regarding any additional expenditure of funds not already recorded in DRGR. Then HUD may proceed to recapture the unused funds or provide for other corrective action(s) or sanction. Requirements 1. Timely use of NSP1 funds. At the end of the statutory 18-month use period, which begins when the NSP grantee receives its funds from HUD, the state or unit of general local government NSP grantee's accounting records and DRGR information must reflect outlays (expenditures) and unliquidated obligations for approved activities that, in the aggregate, are at least equal to the NSP allocation. (The DRGR system collects information on expenditures and obligations.) Grantees receiving a reallocation of NSP1 funds must also comply with the 18-month use requirement. 2. Timely expenditure of NSP1 funds. The timely distribution or expenditure requirements of sections 24 CFR 570.494 and 570.902 are waived to the extent necessary to allow the following alternative requirement: All NSP1 grantees must expend on eligible NSP activities an amount equal to or greater than the initial allocation of NSP1 funds within 4 years of receipt of those funds or HUD will recapture and reallocate the amount of funds not expended. 3. Timely expenditure of NSP2 and NSP3 funds, The timely distribution or expenditure requirements of sections 24 CFR 570.494 and 570.902 are waived to the extent necessary to allow the following alternative requirement: NSP2 and NSP3 grantees must expend on eligible NSP activities an amount equal to or greater than the 50 percent of the initial allocation of NSP funds within 2 years of receipt of those funds and 100 percent of the initial allocation of NSP funds within 3 years of receipt of those funds or HUD will recapture and reallocate the amount of funds not expended or provide for other corrective action(s) or sanction. A grantee will be deemed by HUD to have received its Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 /Notices 64337 NSP grant at the time HUD signs its NSP grant agreement. N. Alternative Requirement for Program Income (Revenue) Generated By Activities Assisted With Grant Funds Requirement 1. Revenue (i.e., gross income) received by a state, unit of general local government, or subrecipient (as defined at 24 CFR 570.500(c)) that is directly generated from the use of CDBG funds (which term includes NSP grant funds) constitutes CDBG program income. To ensure consistency of treatment of such program income, the definition of program income at 24 CFR 570.500(a) shall be applied to amounts received by states, units of general local government, and subrecipients. 2. Cash management. Substantially all program income must be disbursed for eligible NSP activities before additional cash withdrawals are made from the U.S. Treasury. 3. Agreements with subrecipients. States and units of general local government must incorporate in subrecipient agreements such provisions as are necessary to ensure compliance with the requirements of this section. O. Reporting Background HUD is requiring regular reporting on each NSP grant in the DRGR system to ensure the Department has sufficient management information to follow-up promptly if a grantee lags in implementation and risks recapture of its grant funds. For NSP, HUD is waiving the annual reporting requirements of the consolidated plan to allow HUD to collect more regular information on various aspects of the uses of funds and of the activities funded with these grants. HUD will use the reports to exercise oversight for compliance with the requirements of this notice and for prevention of fraud, waste, and abuse of funds. The regular CDBG performance measurement requirements will not apply to the NSP funds. HUD has configured DRGR performance measures to fit the NSP activities and will provide additional guidance on NSP performance measures. To collect these data elements and to meet its reporting requirements, HUD is requiring each grantee to report on its NSP funds to HUD using the online DRGR system, which uses a streamlined, Internet -based format. HUD will use grantee reports to monitor for anomalies or performance problems that suggest fraud, waste, and abuse of funds; to reconcile budgets, obligations, fund draws, and expenditures; to calculate applicable administrative and public service limitations and the overall percent of benefit to LMMI persons; and as a basis for risk analysis in determining a monitoring plan. The grantee must post the NSP report on a Web site for its citizens when it submits the report to HUD (DRGR generates a version of the report that the grantee can download, save, and post). The Office of Management and Budget has established October 1, 2010 as the deadline for Federal agencies to initiate sub -award reporting in compliance with the Federal Funding Accountability and Transparency Act (Pub. L. 109-282) (FFATA). NSP3 grantees will be required to comply with this additional reporting requirement. Additional HUD guidance on compliance with the FFATA requirements is forthcoming. Requirements 1. Performance report alternative requirement. The Secretary may specify the form and timing of reports provided by the grantee under both 42 U.S.C. 5304(e) (the HCD Act) and 42 U.S.C. 12708 (NAHA). Therefore, the consolidated plan regulation at 24 CFR 91.520 is waived and the alternative reporting form and timing for the NSP funds is that; a. Each grantee must enter its NSP Action Plan amendment or abbreviated plan into HUD's web -based DRGR system in sufficient detail to meet the NSP action plan content requirements of this notice and to serve as the basis for acceptable performance reports. b. NSP1 and NSP3 grantees must submit a quarterly performance report, as HUD prescribes, no later than 30 days following the end of each quarter, beginning 30 days after the completion of the first full calendar quarter after grant award and continuing until the end of the grant. In addition to this quarterly performance reporting, beginning three months prior to its use or expenditure deadline, as applicable, each grantee will report monthly on its NSP use and expenditure of funds, and continuing monthly until reported total uses or expenditure of funds are equal to or greater than the total NSP grant or the deadline occurs. After HUD has accepted a report from a grantee showing such use or expenditure of funds, the monthly reporting requirement will end. Quarterly reports will continue until all NSP funds (including program income) have been expended and those expenditures are included in a report to HUD, or until HUD issues other instructions. Each report will include information about the uses of funds, including, but not limited to, the project name, activity, location, national objective, funds budgeted and expended, the funding source and total amount of any non-NSP funds, numbers of properties and housing units, beginning and ending dates of activities, beneficiary characteristics, and numbers of low- and moderate -income persons or households benefiting. Reports must be submitted using HUD's web -based DRGR system and, at the time of submission, be posted prominently on the grantee's official Web site. c. Additional reporting requirements consistent with the Federal Funding Accountability and Transparency Act will be required for NSP3 Grantees. HUD guidance on these requirements is forthcoming. P. FHA First Look Program The Department notes that it is an eligible use of NSP grant funds to acquire and redevelop FHA foreclosed properties. The Federal Housing Administration's (FHA) First Look sales method provides NSP grantees exclusive access to review and purchase newly conveyed FHA real estate -owned (REO) properties that are located in their designated areas. Grantees will have the opportunity to make a purchase offer on a property prior to it being made available to other entities. NSP grantees can purchase these properties at up to a 10% discount from the appraised value. Further information about First Look was published in the Federal Register on July 15, 2010 (75 FR 41225), and is also available online at: http:// edocket.access.gpo.gov/2010/pdf/ 2010-17335.pdf. HUD will provide technical assistance on its Web site regarding how these programs can effectively interact. Grantees may also contact their local HUD FHA field office for further information. Q. Purchase Discount Background HERA Section 2301(d)(1) limits the purchase price of a foreclosed home or residential property, as follows: Any purchase of a foreclosed upon home or residential property under this section shall be at a discount from the current market appraised value of the home or property, taking into account its current condition, and such discount shall ensure that purchasers are paying below -market value for the home or property. To ensure that uncertainty over the meaning of this section does not delay program implementation, HUD is 64338 Federal Register / Vol, 75, No. 201 /Tuesday, October 19, 2010 /Notices defining "current market appraised value" in this notice, For mortgagee foreclosed properties, HUD is requiring that grantees seek to obtain the "maximum reasonable discount" from the mortgagee, taking into consideration likely "carrying costs" of the mortgagee if it were to not sell the property to the grantee or subrecipient. HUD has adopted an approach that requires a minimum discount of one percent for each foreclosed upon home or residential property purchased with NSP funds. Requirements 1. Individual purchase transaction. Each foreclosed -upon home or residential property shall be purchased at a discount of at least one percent from the current market -appraised value of the home or property. 2. An NSP grantee may not provide NSP funds to another party to finance an acquisition of tax foreclosed (or any other) properties from itself, other than to pay necessary and reasonable costs related to the appraisal and transfer of title. If NSP funds are used to pay such costs when property owned by the grantee is conveyed to a subrecipient, homebuyer, developer, or other jurisdiction, the property is NSP- assisted and subject to all program requirements, such as requirements for NSP-eligible use and benefit to income - qualified persons. This section does not preclude payment of tax liens on property that is not owned by the grantee or payment of current taxes while the property is being redeveloped or held in a land bank, 3. The address, appraised value, purchase offer amount, and discount amount of each property purchase must be documented in the grantee's program records. The address of each acquired property must be recorded in DRGR. R. Removal of Annual Requirements Requirement Throughout 24 CFR parts 91 and 570, all references to "annual" requirements such as submission of plans and reports are waived to the extent necessary to allow the provisions of this notice to apply to NSP funds, with no recurring annual requirements other than those related to civil rights and fair housing certifications and requirements. S. Affirmatively Furthering Fair Housing Nothing in this notice may be construed as affecting each grantee's responsibility to carry out its certification to affirmatively further fair housing. HUD encourages each grantee to review its analysis of impediments to fair housing choice to determine whether an update is necessary because of current market conditions or other factors. Non -entitlement local government grantees must affirmatively further fair housing by adopting and following procedures and requirements to affirmatively market NSP3-assisted housing opportunities. This means that they will affirmatively market NSP3 assisted units and carry out NSP3 activities that further fair housing through innovative housing design or construction to increase access for persons with disabilities, language assistance services to persons with limited English proficiency (on the basis of national origin), or location of new or rehabilitated housing in a manner that provides greater housing choice or mobility for persons in classes protected by the Fair Housing Act, and maintain records reflecting the actions in this regard. T. Certifications Background HUD is substituting alternative certifications. The alternative certifications are tailored to NSP3 grants and remove certifications and references that are appropriate only to the annual CDBG formula program. NSP1 and NSP2 certifications have already been submitted to HUD in accordance with the requirements of the NSP1 Notice and the NSP2 NOFA, Requirements 1. Certifications for states and for entitlement communities, alternative requirement. Although the NSP3 is being implemented as a substantial amendment to the current annual action plan, HUD is requiring submission of this alternative set of certifications as a conforming change, reflecting alternative requirements and waivers under this notice. Each jurisdiction will submit the following certifications: 1. Affirmatively furthering fair housing. The jurisdiction certifies that it will affirmatively further fair housing, which means that it will conduct an analysis to identify impediments to fair housing choice within the jurisdiction, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting the analysis and actions in this regard. 2. Anti -displacement and relocation plan. The applicant certifies that it has in effect and is following a residential anti -displacement and relocation assistance plan. 3. Anti -lobbying. The jurisdiction must submit a certification with regard to compliance with restrictions on lobbying required by 24 CFR part 87, together with disclosure forms, if required by that part. 4. Authority of jurisdiction. The jurisdiction certifies that the consolidated plan or abbreviated plan, as applicable, is authorized under state and local law (as applicable) and that the jurisdiction possesses the legal authority to carry out the programs for which it is seeking funding, in accordance with applicable HUD regulations and other program requirements. 5. Consistency with plan. The jurisdiction certifies that the housing activities to be undertaken with NSP funds are consistent with its consolidated plan or abbreviated plan, as applicable. 6. Acquisition and relocation. The jurisdiction certifies that it will comply with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (42 U.S.C. 4601), and implementing regulations at 49 CFR part 24, except as those provisions are modified by the notice for the NSP program published by HUD. 7. Section 3. The jurisdiction certifies that it will comply with section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), and implementing regulations at 24 CFR part 135. 8. Citizen participation. The jurisdiction certifies that it is in full compliance and following a detailed citizen participation plan that satisfies the requirements of Sections 24 CFR 91.105 or 91.115, as modified by NSP requirements. 9. Following a plan. The jurisdiction certifies it is following a current consolidated plan (or Comprehensive Housing Affordability Strategy) that has been approved by HUD. [Only States and entitlement jurisdictions use this certification.] 10. Use of funds. The jurisdiction certifies that it will comply with the Dodd -Frank Wall Street Reform and Consumer Protection Act and Title XII of Division A of the American Recovery and Reinvestment Act of 2009 by spending 50 percent of its grant funds within 2 years, and spending 100 percent within 3 years, of receipt of the grant. 11. The jurisdiction certifies: a. That all of the NSP funds made available to it will be used with respect to individuals and families whose Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices 64339 incomes do not exceed 120 percent of area median income; and b. The jurisdiction will not attempt to recover any capital costs of public improvements assisted with CDBG funds, including Section 108 loan guaranteed funds, by assessing any amount against properties owned and occupied by persons of low- and moderate -income, including any fee charged or assessment made as a condition of obtaining access to such public improvements. However, if NSP funds are used to pay the proportion of a fee or assessment attributable to the capital costs of public improvements (assisted in part with NSP funds) financed from other revenue sources, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than CDBG funds. In addition, with respect to properties owned and occupied by moderate - income (but not low-income) families, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than NSP funds if the jurisdiction certifies that it lacks NSP or CDBG funds to cover the assessment, 12. Excessive force. The jurisdiction certifies that it has adopted and is enforcing: a. A policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individuals engaged in nonviolent civil rights demonstrations; and b. A policy of enforcing applicable state and local laws against physically barring entrance to, or exit from, a facility or location that is the subject of such nonviolent civil rights demonstrations within its jurisdiction. 13. Compliance with anti- discrimination laws. The jurisdiction certifies that the NSP grant will be conducted and administered in conformity with Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d), the Fair Housing Act (42 U.S.C. 3601- 3619), and implementing regulations. 14. Compliance with lead -based paint procedures. The jurisdiction certifies that its activities concerning lead -based paint will comply with the requirements of part 35, subparts A, B, J, K, and R of this title. 15. Compliance with laws. The jurisdiction certifies that it will comply with applicable laws. 2. Certifications for Non -Entitlement Local Governments, alternative requirement. For non -entitlement local government grantees that do not have annual action plans to amend, NSP3 is being implemented through the submission of an abbreviated plan under 25 CFR 91.235. HUD is requiring submission of this alternative set of certifications as a conforming change, reflecting alternative requirements and waivers under this notice. Each jurisdiction will submit the following certifications: 1. Affirmatively furthering fair housing. The jurisdiction certifies that it will affirmatively further fair housing. 2. Anti -displacement and relocation plan. The applicant certifies that it has in effect and is following a residential anti -displacement and relocation assistance plan. 3. Anti -lobbying. The jurisdiction must submit a certification with regard to compliance with restrictions on lobbying required by 24 CFR part 87, together with disclosure forms, if required by that part. 4. Authority of jurisdiction. The jurisdiction certifies that the consolidated plan or abbreviated plan, as applicable, is authorized under state and local law (as applicable) and that the jurisdiction possesses the legal authority to carry out the programs for which it is seeking funding, in accordance with applicable HUD regulations and other program requirements. 5. Consistency with plan. The jurisdiction certifies that the housing activities to be undertaken with NSP funds are consistent with its consolidated plan or abbreviated plan, as applicable. 6. Acquisition and relocation. The jurisdiction certifies that it will comply with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (42 U.S.C. 4601), and implementing regulations at 49 CFR part 24, except as those provisions are modified by the notice for the NSP program published by HUD. 7. Section 3. The jurisdiction certifies that it will comply with section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), and implementing regulations at 24 CFR part 135. 8. Citizen participation. The jurisdiction certifies that it is in full compliance and following a detailed citizen participation plan that satisfies the requirements of Sections 24 CFR 91.105 or 91.115, as modified by NSP requirements. 9. Use of funds. The jurisdiction certifies that it will comply with the Dodd -Frank Wall Street Reform and Consumer Protection Act and Title XII of Division A of the American Recovery and Reinvestment Act of 2009 by spending 50 percent of its grant funds within 2 years, and spending 100 percent within 3 years, of receipt of the grant. 10. The jurisdiction certifies: a. That all of the NSP funds made available to it will be used with respect to individuals and families whose incomes do not exceed 120 percent of area median income; and b. The jurisdiction will not attempt to recover any capital costs of public improvements assisted with CDBG funds, including Section 108 loan guaranteed funds, by assessing any amount against properties owned and occupied by persons of low- and moderate -income, including any fee charged or assessment made as a condition of obtaining access to such public improvements. However, if NSP funds are used to pay the proportion of a fee or assessment attributable to the capital costs of public improvements (assisted in part with NSP funds) financed from other revenue sources, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than CDBG funds. In addition, with respect to properties owned and occupied by moderate - income (but not low-income) families, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than NSP funds if the jurisdiction certifies that it lacks NSP or CDBG funds to cover the assessment. 11. Excessive force. The jurisdiction certifies that it has adopted and is enforcing: a. A policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individuals engaged in nonviolent civil rights demonstrations; and b. A policy of enforcing applicable state and local laws against physically barring entrance to, or exit from, a facility or location that is the subject of such nonviolent civil rights demonstrations within its jurisdiction. 12. Compliance with anti- discrimination laws. The jurisdiction certifies that the NSP grant will be conducted and administered in conformity with Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d), the Fair Housing Act (42 U.S.C. 3601- 3619), and implementing regulations. 13. Compliance with lead -based paint procedures. The jurisdiction certifies that its activities concerning lead -based paint will comply with the requirements of part 35, subparts A, B, J, K, and R of this title. 14. Compliance with laws. The jurisdiction certifies that it will comply with applicable laws. 64340 Federal Register / Vol. 75, No. 201 /Tuesday, October 19, 2010 /Notices U. Additional NSP3 Requirements — Preferences for Rental Housing and Local Hiring The NSP3 allocation included statutory language requiring grantees to "establish procedures to create preferences for the development of affordable rental housing for properties assisted with NSP3 funds." HUD is requiring grantees to describe such procedures as part of their substantial amendments or abbreviated plans as described in Section II.B, above. Grantees also "shall, to the maximum extent feasible, provide for the hiring of employees who reside in the vicinity, as such term is defined by the Secretary, of projects funded under this section or contract with small businesses that are owned and operated by persons residing in the vicinity of such projects." For the purposes of administering this requirement, HUD is adopting the Section 3 applicability thresholds for community development assistance at 24 CFR 135.3(a)(3)(ii). Note: The NSP3 local hiring requirement does not replace the responsibilities of grantees under Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), and implementing regulations at 24 CFR part 135, except to the extent the obligations may be in direct conflict. For the purposes of NSP3, HUD defines "vicinity" as each neighborhood identified by the NSP3 grantee as being the areas of greatest need. See section II.B.2. Small business means a business that meets the criteria set forth in section 3(a) of the Small Business Act. See 42 U.S.C. 5302(a)(23). V. Note on Statutory Limitation on Distribution of Funds Section 2304 of HERA and 1479(a)(7)(A) of the Dodd -Frank Act states that none of the funds made available under this Title or title IV shall be distributed to an organization that has boon convicted of a violation under Federal law relating to an election for Federal office; or an organization that employs applicable individuals. Section 1479(a)(7)(B) defines applicable individuals, W. Information Collection Approval Note HUD has approval from the Office of Management and Budget (OMB) for information collection requirements in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501- 3520). OMB approval is under OMB control number 2506-0165. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor and a person is not required to respond to, a collection of information, unless the collection displays a valid control number. X. Duration of Funding The appropriation accounting provisions in 31 U.S.C. 1551-1557, added by section 1405 of the National Defense Authorization Act for Fiscal Year 1991 (Pub. L. 101-510), limit the availability of certain appropriations for expenditure. Such a limitation may not be waived. The appropriations acts for NSP1 and NSP3 grants direct that these funds be available until expended. Catalog of Federal Domestic Assistance The Catalog of Federal Domestic Assistance numbers for grants made under NSP are as follows; 14.218; 14,225; and 14,228. Finding of No Significant Impact A Finding of No Significant Impact with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(C)(2)). The Finding of No Significant Impact is available for public inspection between 8 a.m. and 5 p.m. weekdays in the Office of the Rules Docket Clerk, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 10276, Washington, DC 20410-0500. Establishment of Formula The funding formula set out in Attachment B to this notice was established by HUD on August 18, 2010. Dated: October 13, 2010. Mercedes M. Marquez, Assistant Secretary for Community Planning and Development. Attachments A —Formula Allocation B—NSP3 Formula and Allocation of Funds C—Recommended Green and Sustainable Practices Attachment A HUD's Methodology for Allocating the Funds for Neighborhood Stabilization Program 1 (NSP1) HERA calls for allocating funds "to States and units of general local government with the greatest need, as such need is determined in the discretion of the Secretary based on — (A) The number and percentage of home foreclosures in each State or unit of general local government; (B) the number and percentage of homes financed by a subprime mortgage related loan in each State or unit of general local government; and (C) the number and percentage of homes in default or delinquency in each State or unit of general local government." It further directs that "each State shall receive not less than 0.5 percent of funds". The allocation formula operates as follows. In this formula, the primary data on foreclosure rates, subprime loan rates, and rates of loans delinquent or in default come from the Mortgage Bankers Association National Delinquency Survey (MBA—NDS), Because the MBA—NDS may have uneven coverage from state -to -state in respect to the total number of mortgages reported, the total count of mortgages is calculated as the number of owner -occupied mortgages from the 2006 American Community Survey increased with data from the Home Mortgage Disclosure Act to capture the proportion of total mortgages made within a state made to investors between 2004 and 2006. The first step of the allocation is to make a "statewide" allocation using the following formula: Statewide Allocation = $3.92 billion* {[0.70 * (State's number of foreclosure starts in last 6 quarters) * National number of foreclosure starts in last 6 quarters 0.15 * (State's number of subprime loans)" National number of subprime loans 0.10 * (State's number of loans in default (90+ days delinquent). * National number of loans in default 0.05 * (State's number of loans 60 to 89 days delinquent).* National number of loans 60 to 89 days delinquent (Percent of all loans in state to enter foreclosure last 6 quarters)+ Percent of all loans in nation to enter foreclosure last 6 quarters (Percent of all loans in state subprime)+ Percent of all loans in nation subprime (Percent of all loans in state in default)+ Percent of all loans in nation in default Percent of all loans in state 60 to 89 days delinquent)] * National percent of all loans 60 to 89 days delinquent (Pct of all addresses in state vacant in Census Tracts where more than 40% of the 2004 to 2006 loans were high cost)} Pct of all addresses in nation vacant in Census Tracts where more than 40% of the 2004 to 2006 loans were high cost Federal Register /Vol. 75, No. 201 /Tuesday, October 19, 2010 /Notices 64341 This formula allocates 70 percent of the funds based on the number and percent of foreclosures, 15 percent for subprime loans, 10 percent for loans in default (delinquent 90 days or longer), and 5 percent for loans delinquent 60 to 90 days. The higher weight on foreclosures is based on the emphasis the statute places on targeting foreclosed homes. The percentage adjustments, the rate of a problem in a state relative to the national rate of a problem, are restricted such that a state's allocation based on its proportional share of a problem cannot be increased or decreased by more than 30 percent. Because HERA specifically indicates that the funds are needed for the "redevelopment of abandoned and foreclosed upon homes and residential properties," HUD has included a variable to proxy where abandonment of homes due to foreclosure is more likely, specifically each state's rate of vacant residential addresses in neighborhoods with a high proportion (more than 40 percent) of loans in 2004 to 2006 that were high cost. Information on vacant addresses is based on United States Postal Service data as of June 30, 2008 aggregated by HUD to the Census Tract level. The residential vacancy adjustment factor reflects a state's vacancy rate relative to the national average and cannot increase or decrease a state's proportional share of the allocation based on foreclosures, subprime loans, and delinquencies and defaults by more than 10 percent. Finally, if a statewide allocation is less than $19.6 million, the statewide grant is increased to $19.6 million. Because this approach will result in a total allocation in excess of appropriation, all grant amounts above $19.6 million are reduced pro-rata to make the total allocation equal to the total appropriation. From each statewide allocation, a substate allocation is made as follows: • Each state government is allocated $19.6 million • If the statewide allocation is more than $19.6 million, the remaining funds are allocated to FY 2008 CDBG entitlement cities, urban counties, and non -entitlement balance of state proportional to relative need. • If a local government receives less than $2 million under this sub -allocation, their grant is rolled up into the state government grant. Note that HUD has determined that HERA's direction that a minimum of $19.6 million be allocated to the state means that a minimum grant must be provided to each state government of $19.6 million. As a result, this approach provides state governments with proportionally more funding than their estimated need. As such, state governments should use their best judgment to serve both those areas not receiving a direct grant and those areas that do receive a direct grant, making sure that the total of all funds in the state are going proportionally more to those places (as prescribed by HERA): • "With the greatest percentage of home foreclosures; • With the highest percentage of homes financed by a subprime mortgage related loan; and • Identified by the State or unit of general local government as likely to face a significant rise in the rate of home foreclosures." For the amount of funds above each state's $19.6 million, the remaining funds are allocated among the entitlement communities and non -entitlement balances using the following formula: Local Allocation = (Statewide Allocation—$19,600,000) * [(Local estimated number of foreclosure starts in last 6 quarters) * State total number of foreclosure starts in last 6 quarters Local vacancy rate in Census Tracts with more than 40% of the loans High -cost)] State vacancy rate in Census Tracts with more than 40% of the loans High -cost Where: The residential vacancy rate adjustment cannot increase or reduce a local jurisdiction's allocation by more than 30 percent and the estimated number of foreclosures is calculated based on a predicted foreclosure rate times the estimated number of mortgages in a community. HUD analysis shows that 75 percent of the variance between states on foreclosure rates can be explained by three variables available from public data: • Office of Federal Housing Enterprise Oversight (OFHEO) data on change in home values as of June 2008 compared to peak home value since 2000. • Percent of all loans made between 2004 and 2006 that are high cost as reported in the Home Mortgage Disclosure Act (HMDA). • Unemployment rate as of June 2008 (from Bureau of Labor Statistics). Because these three variables are publicly available for all CDBG eligible communities and they are good predictors of foreclosure risk, they are used in a model to calculate the estimated number of foreclosures in each jurisdiction within a state. The formula used is as follows: Predicted Foreclosure Rate = —2.211 — (0.131 x Percent change in MSA OFHEO current price relative to the maximum in past 8 years) + (0,152*Percent of total loans made between 2004 and 2006 that are high cost) + (0.392*Percent unemployed in the place our county in June 2008). This predicted foreclosure rate is then multiplied times the estimated number of mortgages within a jurisdiction (number of HMDA loans made between 2004 and 2006 times the ratio of ACS 2006 data on total mortgages in state/HMDA loans in state). This "estimated number of mortgages in the jurisdiction" is further adjusted such that the estimated number of foreclosures from the model will equal the total foreclosure starts in the state from the Mortgage Bankers Association National Delinquency Survey. As noted above, for entitlement cities and urban counties that would receive an NSP allocation of less than $2 million, the funds are allocated to the state grantee. The District of Columbia and the four Insular Areas receive direct allocations and are not subject to the minimum grant threshold. Because this funding is one-time funding and the eligible activities under the program are different enough from the regular program, HUD believes that a grantee must receive a minimum amount of $2 million to have adequate staffing to properly administer the program effectively. In addition, fewer grants will allow HUD staff to more effectively monitor grantees to ensure proper implementation of the program and reduce the risk for fraud, waste, and abuse. Attachment B HUD's Methodology for Allocating the Funds for Neighborhood Stabilization Program 3 (NSP3) NEIGHBORHOOD STABILIZATION PROGRAM (NSP3) FUNDING UNDER DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT State Grantee NSP3 Grant $5,000,000 5,000,000 2,576,151 Alaska Alabama Arkansas Arizona State of Alaska State of Alabama Birmingham Alabama Total State of Arkansas Avondale City State of Arizona 7,576,151 5,000,000 1,224,903 5,000,000 64342 Federal Register /Vol, 75, No. 201 / Tuesday, October 19, 2010 /Notices NEIGHBORHOOD STABILIZATION PROGRAM (NSP3) FUNDING UNDER DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT —Continued State Grantee NSP3 Grant California Colorado Connecticut Chandler Glendale Maricopa County Mesa Mohave County Peoria City Phoenix Pinal County Surprise City Tucson Arizona Total Apple Valley Bakersfield State of California Compton Contra Costa County Corona Fontana Fresno Fresno County Hemet Hesperia Imperial County Indio City Kern County Lancaster Long Beach Los Angeles Los Angeles County Madera County Merced Merced County Modesto Monterey County Moreno Valley Oakland Ontario Orange County Palmdale Perris City Pomona Rialto Richmond Riverside Riverside County Sacramento Sacramento County San Bernardino San Bernardino County San Joaquin County Santa Ana Solano County Stanislaus County Stockton Tulare County Vallejo Victorville California Total Adams County Aurora State of Colorado Colorado Springs Denver Greeley Pueblo Weld County Colorado Total Bridgeport 1,332,011 3,718,377 4,257,346 4,019,457 1,990,744 1,198,780 16,053,525 3,168,315 1,329,844 2,083,771 45,377,073 1,463,014 3,320,927 7,777,019 1,436,300 1,871,294 1,317,310 2,695,735 3,547,219 2,739,766 1,360,197 1,785,047 1,708,780 1,092,071 5,202,037 2,364,566 1,567, 935 9,875,577 9,532,569 1,659,017 1,196,182 2,705,877 2,951,549 1,284,794 3,687,789 2,070,087 1,872,853 1,004,948 2,310,023 1,342,449 1,235,629 1,936,370 1,153,172 3,202,152 14,272,400 3,762,329 4,595,671 3,277,401 10,438,181 4,398,543 1,464,113 1,622,757 4,175,947 4,280,994 2,845,529 1,744,593 2,159,937 149,308,651 1,997,322 2,445,282 5,098,309 1,420,638 2,700,279 1,203,745 1,460,506 1,023,188 17,349,270 1,215,150 Federal Register/Vol. 75, No. 201 / Tuesday, October 19, 2010 /Notices 64343 NEIGHBORHOOD STABILIZATION PROGRAM (NSP3) FUNDING UNDER DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT —Continued State Grantee NSP3 Grant 5,000,000 1,029,926 1,041,579 1,036,101 District of Columbia Delaware Florida State of Connecticut Hartford New Haven Waterbury Connecticut Total Washington, DC State of Delaware Boynton Beach Brevard County Broward County Cape Coral Charlotte County Citrus County Clearwater Collier County Coral Springs Davie Daytona Beach Deerfield Beach Deltona Escambia County State of Florida Ft Lauderdale Ft Myers Hernando County Hialeah Hillsborough County Hollywood Indian River County Jacksonville -Duval County Kissimmee Lake County Lakeland Lauderhill Lee County Manatee County Margate Marion County Martin County Melbourne Miami Miami Beach Miami Gardens City Miami -Dade County Miramar North Miami Orange County Orlando Osceola County Palm Bay Palm Beach County Palm Coast City Pasco County Pembroke Pines Pinellas County Plantation Polk County Pompano Beach Port St Lucie Sanford Sarasota Sarasota County Seminole County St Petersburg St. Lucie County Sunrise Tamarac Tampa Titusville Volusia County 9,322,756 5,000,000 5,000,000 1,168,808 3,032,850 5,457,553 3,048,214 2,022,962 1,005,084 1,385,801 3,884,165 1,657,845 1,171,166 1,127,616 1,183,897 1,964,066 1,210,487 8,511,111 2,145,921 1,539,941 1,953,975 2,198,194 8,083,062 2,433,001 1,500,428 7,102,937 1,042,299 3,199,585 1,303,139 1,500,609 6,639,174 3,321,893 1,148,877 4,589,714 1,563,770 1,257,986 4,558,939 1,475,088 1,940,337 20,036,303 2,321,827 1,173,374 11,551,158 3,095,137 3,239,646 1,764,032 11,264,172 1,375,071 5,185,778 2,330,542 4,697,519 1,216,427 5,443,116 1,500,572 3,515,509 1,037,697 1,038,811 3,949,541 3,995,178 3,709,133 1,947,657 1,775,162 1,427,857 4,691,857 1,005,731 3,670,516 64344 Federal Register /Vol. 75, No. 201/Tuesday, October 19, 2010/Notices NEIGHBORHOOD STABILIZATION PROGRAM (NSP3) FUNDING UNDER DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT —Continued State Grantee NSP3 Grant Georgia Hawaii Iowa Idaho Illinois Indiana Kansas Kentucky Louisiana Massachusetts Maryland Maine Michigan West Palm Beach Florida Total Atlanta Augusta -Richmond County Carroll County Clayton County Cobb County Columbus-Muscogee County Dekalb County Douglas County Fulton County State of Georgia Gwinnett County Henry County Macon Paulding County Savannah Georgia Total State of Hawaii State of Iowa State of Idaho Chicago Cook County State of Illinois Lake County Illinois Total Anderson Elkhart Elkhart County Fort Wayne Gary Hammond State of Indiana Indianapolis Kokomo Lake County Muncie South Bend Indiana Total Kansas City State of Kansas Kansas Total Commonwealth of Kentucky State of Louisiana Commonwealth of Massachusetts Springfield Worcester County Massachusetts Total State of Maryland Prince George's County Maryland Total State of Maine Dearborn Detroit Flint Genesee County Grand Rapids Jackson County Lansing Macomb County State of Michigan Muskegon County Oakland County Pontiac 2,147,327 208,437,144 4,906,758 1,161,297 1,190,390 3,796,167 2,415,784 1,128,174 5,233,105 1,628,471 3,094,885 18,679,977 2,065,581 1,217,736 1,503,897 1,372,214 1,027,553 50,421,988 5,000,000 5,000,000 5,000,000 15,996,360 7,776,324 5,000,000 1,370,421 30,143,105 1,219,200 1,022,717 1,193,194 2,374,450 2,717,859 1,243,934 8,235,625 8,017,557 1,014,327 1,613,168 1,148,363 1,708,707 31,509,101 1,137,796 5,000,000 6,137,796 5,000,000 5,000,000 5,000,000 1,197,000 1,190,994 7,387,994 5,000,000 1,802,242 6,802,242 5,000,000 1,027,354 21,922,710 3,076,522 2,663,219 1,378,788 1,162,482 1,162,508 2,536,817 5,000,000 1,071,900 2,080,700 1,410,621 Federal Register/Vol. 75, No. 201/Tuesday, October 19, 2010/Notices 64345 NEIGHBORHOOD STABILIZATION PROGRAM (NSP3) FUNDING UNDER DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT —Continued State Grantee NSP3 Grant Minnesota Missouri Mississippi Montana North Carolina North Dakota Nebraska New Hampshire New Jersey New Mexico Nevada New York Ohio Saginaw Southfield St. Clair County Warren Wayne County Michigan Total Anoka County Hennepin County Minneapolis State of Minnesota St Paul Minnesota Total Kansas City State of Missouri St Louis St. Louis County Missouri Total State of Mississippi State of Montana State of North Carolina State of North Dakota State of Nebraska Omaha Nebraska Total State of New Hampshire Essex County Newark State of New Jersey Paterson Union County New Jersey Total State of New Mexico Clark County North Las Vegas Henderson Las Vegas State of Nevada Reno Washoe County Nevada Total Islip Town Nassau County New York State of New York Suffolk County New York Total Akron Butler County Canton Cincinnati Clark County Cleveland Columbus Cuyahoga County Dayton East Cleveland Euclid Hamilton County Lorain County Montgomery County State of Ohio Richland County Toledo Trumbull County 1,242,318 1,084,254 1,129,355 1,735,633 7,839,293 57,524,473 1,226,827 1,469,133 2,671,275 5,000,000 2,059,877 12,427,113 1,823,888 5,000,000 3,472,954 2,813,762 13,110,604 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 1,183,085 6,183,085 5,000,000 1,851,984 2,018,637 5,000,000 1,196,877 1,574,051 11,641,549 5,000,000 16,156,114 4,097,147 3,901,144 10,450,623 5,000,000 1,973,724 1,735,918 43,314,669 1,429,561 2,116,070 9,787,803 5,000,000 1,501,506 19,834,940 2,674,298 1,327,123 1,233,756 3,160,661 1,105,306 6,793,290 4,843,460 2,551,533 3,115,780 1,068,142 1,031,230 1,469,242 1,619,474 1,145,712 11,795,818 1,022,278 3,591,715 1,143,889 64346 Federal Register/Vol. 75, No. 201 /Tuesday, October 19, 2010 /Notices NEIGHBORHOOD STABILIZATION PROGRAM (NSP3) FUNDING UNDER DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT —Continued State Grantee NSP3 Grant Youngstown 1,096,328 Ohio Total 51,789,035 Oklahoma State of Oklahoma 5,000,000 Oregon State of Oregon 5,000,000 Pennsylvania Commonwealth of Pennsylvania 5,000,000 Puerto Rico Commonwealth of Puerto Rico 5,000,000 Rhode Island Providence 1,309,231 State of Rhode Island 5,000,000 Rhode Island Total 6,309,231 South Carolina State of South Carolina 5,615,020 South Carolina Total 5,615,020 South Dakota State of South Dakota 5,000,000 Tennessee Memphis 5,195,848 State of Tennessee 5,000,000 Tennessee Total 10,195,848 Texas Dallas 2,356,962 Dallas County 1,364,426 Harris County 1,925,917 Hidalgo County 1,716,924 Houston 3,389,035 State of Texas 7,284,978 Texas Total 18,038,242 Utah State of Utah 5,000,000 Virginia Richmond 1,254,970 Commonwealth of Virginia 5,000,000 Virginia Total 6,254,970 Vermont State of Vermont 5,000,000 Washington State of Washington 5,000,000 Wisconsin Milwaukee 2,687,949 State of Wisconsin 5,000,000 Wisconsin Total 7,687,949 West Virginia State of West Virginia 5,000,000 Wyoming State of Wyoming 5,000,000 Insular Areas 300,000 Total 970,000,000 Overview The Dodd -Frank Wall Street Reform and Consumer Protection Act of 2010 provided an additional $1 billion for the Neighborhood Stabilization Program (NSP) that was originally established under the Housing and Economic Recovery Act of 2008. The statute calls for allocating funds to States and local governments with the greatest need, as determined by: (A) "The number and percentage of home foreclosures in each State or unit of general local government; (B) "The number and percentage of homes financed by a subprime mortgages in each State or unit of general local government; and (C) "The number and percentage of homes in default or delinquency in each State or unit of general local government." The statute also requires that a minimum of 0.5 percent of the appropriation, $5 million be provided to each state. The Department has determined that for NSP3, the states and local governments with the greatest need for neighborhood stabilization funding are those communities that have high numbers of foreclosed and/or vacant properties in the neighborhoods with the highest concentrations of foreclosures, delinquent loans, and subprime loans. The basic formula allocates funds based on the number of foreclosures and vacancies in the 20 percent of U.S. neighborhoods (Census Tracts) with the highest rates of homes financed by a subprime mortgage, are delinquent, or are in foreclosure. This basic allocation is adjusted to ensure that every state receives a minimum of $5 million. The net result is that these funds are highly targeted to communities with the most severe neighborhood problems associated with the foreclosure crisis. Estimating Greatest Need To target the funds to States and local communities with the greatest need, HUD estimated the number of loans 90 days delinquent or in foreclosure for each Census Tract in America. This estimate was based on a model that was comprised of three factors that explain most foreclosures and delinquent loans (see note 1): • Rate of Subprime Loans. This is measured with HMIDA data on high cost and high leverage loans made between 2004 and 2007. These data are available at the Census Tract (neighborhood) level. • Increase in Unemployment Rate between March 2005 and March 2010. These data are from the BLS Local Area Unemployment Statistics, at the city and county level. • Fall in Home Value from Peak to Trough. Home value data at the Metropolitan Area level is available quarterly through March 2010 from the Federal Housing Finance Agency Horne Price Index. In addition to wanting to capture loans that are currently delinquent or in the foreclosure process, HUD sought to capture the aggregate impact of the foreclosure crisis on individual neighborhoods between 2007 and 2010. To do this, HUD estimated for each neighborhood the number of foreclosure starts between January 2007 and March 2010 as well as the number of foreclosure Federal Register/Vol. 75, No. 201/Tuesday, October 19, 2010/Notices 64347 completions between January 2007 and June 2010 (see note 2). Each neighborhood was assigned the larger of the two estimates. Finally, HUD has administrative data from the United States Postal Service on addresses not picking up mail for 90 days or longer. These data are very good current indicators of neighborhood stress from vacant housing. This number is adjusted using Census 2000 tract level data to remove vacant vacation properties from the count. The Formula Using the estimated rate of loans in foreclosure or delinquent, HUD identified the 20 percent of neighborhoods likely to be most distressed. This equates to an estimated serious delinquency rate (90 days delinquent or in foreclosure) of greater than 17.8 percent. Using the methodology described above, the national rate was estimated at 8.9 percent.1 For each place and balance of county in the United States we add up only from the 20 percent of neighborhoods with the greatest need the number of foreclosed homes between 2007 and 2010 and separately the number units 90 days or more vacant in March 2010. This "jurisdiction level" file is then used to run a formula to allocate the funds available, $969,700,000. Sixty percent of these funds are allocated based on each jurisdiction's share of foreclosures and 40 percent of the funds are allocated based on each jurisdiction's share of vacancies. Minimum Grant Threshold If a place gets less than HUD's established minimum grant threshold of $1 million, its grant is rolled up into the county grant. If the county grant is less than the minimum grant threshold of $1 million, its grant is rolled up into the state grant. State Minimum Grant of $5 million For any state government that would receive less than $5 million, its grant is increased to $5 million with all grant amounts above the minimum grant threshold reduced on a pro-rata basis to only allocate the amounts available. Note 1: Identifying Census Tracts with High Rates of Foreclosures, Delinquencies, and Subprhne Loans: To estimate which neighborhoods are likely to have high rates of foreclosures, delinquencies, and subprime loans, HUD used a July 2010 extract of county level serious delinquency rates from McDash Analytics to develop a predictive model using public data that was available for every Census Tract in the United States. The predictive model, which was weighted on number of mortgages in each county, was able to predict most of the variance between counties in their serious delinquency rate (R- square of 0.821), The model used is as follows: 0.523 (intercept) +0.476 Unemployment Change 3/2005 to 3/ 2010 (BLS LAUS) 1 This less than the Mortgage Bankers Association National Delinquency Survey rate of 9.54 percent for March 2010 and slightly more than the McDash Analytics rate of 8.39 percent as of July 2010, —0,176 Rate of low cost high leverage loans 2004 to 2007 (HMDA) +0.521 Rate of high cost high leverage loans 2004 to 2007 (HMDA) +0.090 Rate of high cost low leverage loans 2004 to 2007 (HMDA) — 0.188 Fall in Home Value Since Peak (FHFA Metro and Non -Metro Area) The predictive rate of seriously delinquent mortgages was multiplied times the number of loans made between 2004 and 2007 in a Census 'Tract to estimate the number of seriously delinquent loans in a Census Tract. Note 2: Calculating Number of Foreclosures at the Neighborhood Level: To estimate the number of homes in a neighborhood that have completed, or are at risk of becoming Real Estate Owned in a Census Tract, was done by allocating the statewide total of the greater of the sum of all foreclosure completions between January 2007 and June 2010 (from RealtyTrac) or the sum of all foreclosure starts between January 2007 and March 2010 (from the Mortgage Bankers Association) based on each Tracts share of a states estimated number of seriously delinquent loans. The estimated number of seriously delinquent loans was calculated by multiplying the estimated rate of seriously delinquent loans times the number of mortgages made between 2004 and 2007 (from Home Mortgage Disclosure Act data). Attachment C NSP Recommended Energy Efficient and Environmentally -Friendly Green Elements HUD strongly recommends that your proposed NSP3 program incorporate the following energy efficient and environmentally -friendly Green elements. No specific element is required. HUD encourages thoughtful, achievable consideration and implementation of energy efficient and environmentally friendly elements inside your NSP3 program. HUD is providing the guidance below because the Department has become aware during the implementation of NSP1 that many grantees are not aware that many of their common community development practices, such as trying to help police and teachers live in the neighborhood in which they work, are also considered sustainable and environmentally friendly, Similarly, most affordable housing units are also smaller and can easily be made more energy efficient than larger units. The increased energy efficiency then serves to increase the long-term affordability of the units. Transit Accessibility Select NSP target areas that are transit accessible, for example those that are in a census tract with convenient bus service (local bus service every 20 minutes during rush hour or an express commuter bus); or bordering a census tract with a passenger rail stop or station (including, for example, commuter rail, subway, light rail, and streetcars), Green Building Standards Comply with the required NSP rehabilitation standards and also fund new construction and gut rehabilitation activities that will exceed the Energy Star for New Homes standard. Ensure that moderate rehabilitation or energy retrofits will purchase only Energy Star products and appliances. You may go further and require NSP homes to achieve an established environmental or energy efficiency standard such as Green Communities or equivalent. Re -Use Cleared Sites Re -use cleared sites in accordance with a comprehensive or neighborhood plan. Plan to re -use all demolition sites within the term of your NSP grant as replacement housing, for use as a community resource, or to provide an environmental function, Examples include community gardens, pocket parks, or floodplain impoundment areas. Deconstruction Deconstruction means salvaging and re- using materials resulting from demolition activities. It recycles building materials, and provides employment. Renewable Energy 1. Passive Solar. Orient the building to make the greatest use of passive solar heating and cooling. 2. Photovoltaic -ready. Site, design, engineer and wire the development to accommodate installation of photovoltaic panels in the future. Sustainable Site Design 1. Transportation Choices. Locate projects within a one -quarter mile of at least two, or one-half mile of at least four community and retail facilities, 2. Connections to Surrounding Neighborhoods. Provide three separate connections from the development to sidewalks or pathways in surrounding neighborhoods. 3, Protecting Environmental Resources. Do not locate the project within 100 feet of wetlands; 1,000 feet of a critical habitat; or on steep slopes, prime farmland or park land. 4. Erosion and Sediment Control. Implement EPA's Best Management Practices for erosion and sedimentation control during construction. 5. Sustainable Landscaping. Select native trees and plants that are appropriate to the site's soils and microclimate. 6. Energy Efficient Landscaping. Locate trees and plants to provide shading in the summer and allow for heat gain in the winter. Water Conservation 1. Efficient Irrigation. Install low volume, non -spray irrigation system (such as drip irrigation, bubblers, or soaker hose). Energy Efficient Materials 1. Durable Materials. Use materials that last longer than conventional counterparts such as stone, brick or concrete. 2, Resource Efficient Materials. Use layouts and advanced building techniques that reduce the amount of homebuilding material required. 3. Heat Absorbing Materials. Use materials that retain solar heat in winter and remain cool in summer. 4. Solar -Reflective Paving. Use light- colored/high-albedo materials and/or open- 64348 Federal Register /Vol. 75, No. 201 / Tuesday, October 19, 2010 /Notices grid pavement with a minimum Solar Reflective index of 0.6 over at least 30 percent of the site's hardscaped areas. 5. Local Source Materials. Use materials from local sources that are close to the job site, 6. Green Roofing. Use Energy Star - compliant and high -emissive roofing, and/or install a Green (vegetated) roof for at least 50 percent of the roof area; or a combination of high-albedo and vegetated roof covering 75 percent of the roof area. Healthy Homes 1. Green Label Certified Floor Covering. Do not install carpets in basements, entryways, laundry rooms, bathrooms or kitchens; if using carpet, use the Carpet and Rug Institute's Green Label certified carpet and pad. 2. Healthy Flooring Materials: Alternatives, Use non -vinyl, non -carpet floor coverings in all rooms. 3. Healthy Flooring Materials: Reducing Dust. Install a whole -house vacuum system with high -efficiency particulate air filtration. 4. Sealing Joints. Seal all wall, floor and joint penetrations to prevent pest entry; provide rodent and corrosion proof screens (e.g., copper or stainless steel mesh) for large openings. 5, Termite -Resistant Materials. Use termite - resistant materials in areas known to be infested. 6. Tub and Shower Enclosures: Moisture Prevention. Use one-piece fiberglass or similar enclosure or, if using any form of grouted material, use backing materials such as cement board, fiber cement board, fiber- glass reinforced board or cement plaster. 7. Green Maintenance Guide. Provide a guide for homeowners and renters that explains the intent, benefits, use and maintenance of Green building features, and encourages additional Green activities such as recycling, gardening and use of healthy cleaning materials, 8, Resident Orientation. Provide a walk- through and orientation to the homeowner or new tenants. [Fit. Doc. 2010-26292 Filed 10-18-10; 8:45 am] BILLING CODE 4210-67-P DEPARTMENT OF THE INTERIOR Bureau of Ocean Energy Management, Regulation and Enforcement [Docket No. BOEM-2010-0052] BOEMRE Information Collection Activity: 1010-0182, Increased Safety Measures for Energy Development on the OCS NTL, Extension of a Collection; Comment Request AGENCY: Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), Interior, ACTION: Notice of an extension of an information collection (1010-0182). SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), BOEMRE is inviting comments on a collection of information that we will submit to the Office of Management and Budget (OMB) for review and approval. The information collection request (ICR) concerns the paperwork requirements in Notice to Lessees and Operators (NTL) "No. 2010—N05, Increased Safety Measures for Energy Development on the OCS." DATES: Submit written comments by December 20, 2010, FOR FURTHER INFORMATION CONTACT: Cheryl Blundon, Regulations and Standards Branch at (703) 787-1607. You may also contact Cheryl Blundon to obtain a copy, at no cost, of NTL No. 2010—N05 that requires the subject collection of information, ADDRESSES: You may submit comments by either of the following methods listed below, • Electronically: go to http:// www.regulations,gov. In the entry titled "Enter Keyword or ID," enter docket ID BOEM-2010-0052 then click search. Follow the instructions to submit public comments and view supporting and related materials available for this collection. BOEMRE will post all comments. • E-mail cheryl.blundon@boemre.gov. Mail or hand -carry comments to the Department of the Interior; Bureau of Ocean Energy Management, Regulation and Enforcement; Attention: Cheryl Blundon; 381 Elden Street, MS-4024; Herndon, Virginia 20170-4817, Please reference ICR 1010-0182 in your comment and include your name and return address. SUPPLEMENTARY INFORMATION: Title: Increased Safety Measures for Energy Development on the OCS, NTL No, 2010—N05. OMB Control Number: 1010-0182. Abstract: The Outer Continental Shelf (OCS) Lands Act, as amended (43 U.S.C. 1331 et seq. and 43 U.S.C. 1801 et seq.), authorizes the Secretary of the Interior (Secretary) to prescribe rules and regulations to manage the mineral resources of the OCS. Such rules and regulations will apply to all operations conducted under a lease, right -of -use and easement, and pipeline right-of- way. Operations on the OCS must preserve, protect, and develop oil and natural gas resources in a manner that is consistent with the need to make such resources available to meet the Nation's energy needs as rapidly as possible; to balance orderly energy resource development with protection of human, marine, and coastal environments; to ensure the public a fair and equitable return on the resources of the OCS; preserve and maintain free enterprise competition; and ensure that the extent of oil and natural gas resources of the OCS is assessed at the earliest practicable time, 43 U,S.C. 1332(6) states that "operations in the outer Continental Shelf should be conducted in a safe manner by well -trained personnel using technology, precautions, and techniques sufficient to prevent or minimize the likelihood of blowouts, loss of well control, fires, spillages, physical obstruction to other users of the waters or subsoil and seabed, or other occurrences which may cause damage to the environment or to property, or endanger life or health," To carry out these responsibilities, BOEMRE issues regulations to ensure that operations in the OCS will meet statutory requirements; provide for safety and protect the environment; and result in diligent exploration, development, and production of OCS leases. In addition, we also issue NTLs that provide clarification, explanation, and interpretation of our regulations. These NTLs are also used to convey purely informational material and to cover situations that might not be adequately addressed in our regulations. The latter is the case for the information collection required in the NTL. Because of the unusual nature of this information collection, issuing an NTL is the appropriate means to collect the information at the time of the event. The subject of this ICR is an NTL based on the recommendations in the May 27, 2010, Report from the Secretary of the Interior to the President of the United States, Increased Safety Measures for Energy Development on the Outer Continental Shelf (Report). BOEMRE issued NTLs for operators to comply with the requirements and recommendations of the report as a result of the Deepwater Horizon oil spill in the Gulf of Mexico. This collection pertains to one NTL, covered under the regulations at 30 CFR part 250, subparts, A, D, E, and F. The primary information collections for these regulations are approved under the Office of Management and Budget (OMB) Control Numbers 1010-0114, 1010-0141, 1010- 0067, and 1010-0043, respectively. However, BOEMRE believes that the paperwork burdens in the NTL are in addition to those currently approved. Only one of the requirements in the NTL has not yet been fully met; therefore, we are renewing that requirement in this collection to allow operators and/or lessees more response time than allowed by the original emergency OMB request. BOEMRE issued this NTL for lessees and operators to comply with the requirements and recommendations of