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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
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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
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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
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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
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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
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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;
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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.
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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
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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
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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