AMENDMENT TO THE
CITY OF CHARLOTTE’S FY09 ACTION PLAN
4TH YEAR OF THE CITY’S CONSOLIDATED PLAN
NEIGHBORHOOD STABILIZATION PROGRAM
GRANT APPLICATION
NOVEMBER 24, 2008
(REVISED 1/15/10)
THE NSP SUBSTANTIAL AMENDMENT
Jurisdiction(s): City of Charlotte,
North Carolina
Contact Person: Richard Payne
Address:
600 East Trade Street
Neighborhood Development
Charlotte, NC 28202
Telephone:
704.336.3796
Fax:
704.336.2904
Email:
rpayne@charlottenc.gov
Jurisdiction Web Address:
www.charmeck.org
This document amends the City of Charlotte’s FY09 Annual Action plan which is part of its Five
Year Consolidated Plan. The amendment describes the activities of the Neighborhood
Stabilization Program (NSP) funded as part of the Housing and Economic Recovery Act (HERA) of
2008. HERA allocated $3.9 billion to localities and states to mitigate the effects of foreclosures
and abandonments. The City of Charlotte received an allocation of $5,431,777 in NSP funds and
this Action Plan amendment serves as the application for those funds. The format of the
amendment is consistent with the template prescribed by the U.S. Department of Housing and
Urban Development (HUD).
Figure 1: Abandoned house in the Peachtree Hills neighborhoods in northwest
Charlotte, where 20% of the 177 homes have experienced foreclosures over the past
18 months.
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A. AREAS OF GREATEST NEED
Provide summary needs data identifying the geographic areas of greatest need in the
grantee’s jurisdiction.
Response: The City of Charlotte has determined the areas of greatest need for the NSP
program using several data sets based on Census tract block groups. Data regarding the
number and percent of subprime loans is available for Zip Codes and specifically addressed
below.
Methodology:
The City of Charlotte has used five data sets to determine the distribution of need. The first
two are provided in data found at HUD’s website link- HUD User Data.
1. The first data set is described as the “Estimated Foreclosure/Abandonment Risk Scores.”
These scores were used by HUD to determine national funding and provide a 1 to 10
rating scale (1 having the least risk and 10 having the most risk) on risk of foreclosure or
abandonment. Using the City’s Geographic Information System (GIS) the areas with a
risk score of 8 to 10 were identified.
2. The second set of data is also taken from the HUD data set and is described as
“Predicted 18 month Underlying Problem Foreclosure Rate”. Using GIS the City was
divided into three categories by estimated foreclosure rate: less than 3%, from 3% to 6%
and greater than 6%. The areas identified as greater than 6% are part of the area with
the greatest need.
3. The City has been able to use “Foreclosures Filed” data from the Mecklenburg County
Courts to also help identify areas of greatest need. The data is current as runs for an 18
month period from April of 2007 to September of 2008. The City estimates that one half
of foreclosures filed will end up being owned by the mortgagor.
4. HUD data was also used to delineate low-moderate and middle income areas. This data
confirms the overall area of possible activity but is significantly larger than the area of
greatest need.
5. The fifth set of data used to determine need and program viability is actual properties
owned by mortgagors, (Real Estate Owned or REO proprieties). The City obtained data
from RealtyTrac, a national foreclosure tracking company. This data is used to confirm
our choices for targeted redevelopment areas.
The City has combined the greatest need designations from a combination of 3 different
data sources to determine the “Area of Greatest Need” in Charlotte. The three data sets
are: 1) Estimated Foreclosure/Abandonment Risk Scores, 2) Predicted 18 month Underlying
Problem Foreclosure Rate and 3) Foreclosures Filed. The City has been working in eight
Neighborhood Action Plan areas for several years. Each of these areas is located within the
area identified as the NSP Area of Greatest Need.
Data regarding the concentration of subprime loans was provided by the Federal Reserve
and was available by Zip Codes. Those areas that have 11% or more subprime loans
compared to all single family loans constitutes the area of greatest concentrations of
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subprime loans. Attachment A is a map which illustrates subprime loan data by Zip Code.
The subprime data is overlaid on the Area of Greatest Need as determined above. The high
concentration area of subprime loans is consistent with the Area of Greatest Need.
The map that follows is the City’s designation of the overall area of greatest need and the
project areas for concentrated foreclosure remediation activity. The City has used the
existing system of Neighborhood Statistical Areas (NSAs) to define the boundaries of the
area of greatest need. Many of the City’s current programs use NSAs as the geographic
basis for eligibility.
B. DISTRIBUTION AND USES OF FUNDS
Provide a narrative describing how the distribution and uses of the grantee’s NSP funds will
meet the requirements of Section 2301(c) (2) of HERA that funds be distributed to the areas
of greatest need, including those with the greatest percentage of home foreclosures, with
the highest percentage of homes financed by a subprime mortgage related loan, and
identified by the grantee as likely to face a significant rise in the rate of home foreclosures.
Response: All of the City’s NSP activities will take place within the area identified in section
A. Areas of Greatest Need. The Areas of Greatest Needs were designated using data which
described those areas with the highest percentage of home foreclosures, the highest
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percentage of subprime mortgage related loans (using HUD data as the primary indictor)
and areas likely to face a significant rise in the rate of home foreclosures.
The City’s strategy is to 1) engage the private sector to promote home purchase and
rehabilitation in the areas of greatest need and 2) target specific neighborhoods within the
area of greatest need experiencing high foreclosures as part of a comprehensive
redevelopment strategy. City efforts are geared primarily toward creating new home
ownership opportunities to help stabilize neighborhoods, but some rental opportunities will
be provided through the program. The proposed program activities, a Down Payment
Assistance and Rehabilitation program and targeted Neighborhood Redevelopment
program, are described below.
1. Down Payment Assistance / Rehabilitation Program.
The City currently administers a down payment assistance program (HouseCharlotte)
using local and federal funding sources. Last year the City assisted over 500 families in
becoming homeowners. A similar program, limited to the area of greatest need as
described in Section A, is proposed for NSP funds. This program would provide forgivable
loans that extinguish after ten years. For households with incomes up to 120% Area
Median Income (AMI) up to $10,000 will be provided for down payment assistance and
up to $15,000 will be available for code related repairs and rehabilitation to make the
home marketable. The Peachtree Hills foreclosure initiative has shown that many
foreclosed properties will not be marketable without rehabilitation. The Down Payment
/ Rehabilitation program would be primarily driven by the private real estate market just
as the present HouseCharlotte program is driven. An estimated 15 homebuyers will
receive down payment and or rehabilitation assistance. All recipients of this assistance
will be required to complete a homebuyer education course provided by a HUD-certified
housing counseling agency.
2. Comprehensive Neighborhood Revitalization
Areas
The City has identified 11 neighborhoods as possible candidates for comprehensive
neighborhood revitalization activities. These neighborhoods include concentrations of
foreclosed housing. The City is already engaged in a comprehensive redevelopment
program in 8 of the 11 neighborhoods and will develop comprehensive strategies for the
four remaining neighborhoods. The neighborhoods targeted for under this program are:
Barrington*
Peachtree Hills /Grass Meadows
Druid Hills
Reid Park
Grier Heights*
Thomasboro/Hoskins
Lakewood
Windy Ridge/Todd Park*
Lincoln Heights
Wingate
Washington Heights
* - New Redevelopment Neighborhoods
Activities
Anticipated activities in Revitalization Neighborhoods include property acquisition,
demolition, housing rehabilitation, new construction, neighborhood infrastructure
investments and down payment assistance. These activities may be performed by the City
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directly or by non-profits under contract with the City. The City has experience with several
non-profits that have performed well in similar programs and are well suited to implement
the NSP along with the accompanying federal requirements. Non–profits include, but are
not limited to, the Charlotte-Mecklenburg Housing Partnership; Self Help CDC, Habitat for
Humanity and the Charlotte Housing Authority. The City will seek to leverage resources
from these organizations. We estimate that up to 60 units will be acquired and
rehabilitated in Neighborhood Redevelopment areas.
In addition to the physical development, the City will also establish neighborhood
preservation goals and neighborhood preservation teams. The City contracted with the
University of North Carolina at Charlotte to assist with neighborhood organization capacity
building. Other services to be provided to these neighborhoods include; community safety,
code enforcement, foreclosure prevention/financial literacy counseling, employment and
youth services.
Figure 2: Foreclosed home in the Peachtree Hills neighborhood
3. Projected NSP Budget
The Neighborhood Stabilization Program budget is included as Attachment B. The
projected budget includes only costs to the NSP grant. The City’s development partners
will leverage private funds to increase our programs impact. Program income may be
realized from the resale of homes acquired through the NSP.
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C. DEFINITIONS AND DESCRIPTIONS
(1) Definition of “blighted structure” in context of state or local law.
Response: A structure is blighted when it exhibits objectively determinable signs of
deterioration sufficient to constitute a threat to human health, safety, and public welfare as
defined by the City’s housing code.
(2) Definition of “affordable rents.”
Response: Affordable rents will be the maximum of the fair market rent for existing housing
for comparable units in the area or a rent that does not exceed 30% of the adjusted income
of a family whose annual income with adjustments for number of bedrooms in the unit. The
current Fair Market Rent in the Charlotte Metropolitan Statistical area for a three bedroom
unit is $954 per month.
(3) Describe how the grantee will ensure continued affordability for NSP assisted housing.
Response: Long-term affordability will be ensured through the use of deed restrictions that
establish periods of affordability that follow, at minimum, federal guidelines such as the HOME
rules for affordability. These guidelines ensure that each housing unit will remain affordable for
a period determined as follows:
NSP Funds Provided
Less than $15,000
$15,000-$40,000
More than $40,000
Period of Affordability
5 Years
10 Years
15 Years
(4) Describe housing rehabilitation standards that will apply to NSP assisted activities.
Response: All rehabilitation work will meet or exceed the following codes, standards and
ordinances as adopted by the City of Charlotte, in effect at the time of construction:
International Residential Building Code, with North Carolina Amendments
International Plumbing Code with North Carolina Amendments
International Mechanical Code with North Carolina Amendments
International Electrical Code with North Carolina Amendments
City of Charlotte Minimum Housing Code
City of Charlotte Zoning Ordinance
North Carolina Small Cities CDBG Rehabilitation Standards (where applicable)
D. LOW INCOME TARGETING
Identify the estimated amount of funds appropriated or otherwise made available under the
NSP to be used to purchase and redevelop abandoned or foreclosed upon homes or residential
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properties for housing individuals or families whose incomes do not exceed 50 percent of area
median income:
Response: The minimum amount identified to benefit households having incomes less than 51%
of the Area Median Income (AMI) is $1,357,944 or 25 percent of the grant allocation. The City
intends to continue its relationship with Habitat for Humanity to provide homes to buyers
earning 50% or less than the area median income level. The City also intends to partner with
the Charlotte Housing Authority to provide rental units which will be targeted to households
with incomes less than 30% of the area median income. The combination of these two efforts is
projected to produce at least 30 units of housing that meet the NSP requirement that 25% of
program funds benefit individuals or families whose incomes do not exceed 50% of the area
median income.
E. ACQUISITIONS & RELOCATION
Indicate whether grantee intends to demolish or convert any low- and moderate-income
dwelling units (i.e., ≤ 80% of area median income).
If so, include:
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 NSPassisted activities.
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).
The number of dwelling units reasonably expected to be made available for households
whose income does not exceed 50 percent of area median income.
Response: The City of Charlotte does not intend to convert any low-and moderate income
dwelling units as part of the Neighborhood Stabilization Program.
F. PUBLIC COMMENT
Provide a summary of public comments received to the proposed NSP Substantial Amendment.
Response: The public was invited to submit comments on this amendment from November 10,
2008 through November 24, 2008 to the following web address: www.charmeck.org. The City’s
NSP proposal was advertised in the Charlotte Observer on November 7, 2008. The City received
two comments on the Neighborhood Revitalization Program application. The Mixed Income
Housing Coalition supported the aspects of the application that 1) incorporate a number of
support activities for neighborhoods, 2) the inclusion of a range of incomes, and 3) the
interspersing rental and homeowner tenure types in each community. Another commentator
suggested that an opportunity exists to connect housing with service providers for persons with
disabilities and the homeless whose income is less than $15,000 per year.
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G. NSP INFORMATION BY ACTIVITY
1. ACQUISITION /REHABILITATION PROGRAM
(1) Activity Name: Acquisition/Rehabilitation Program
(2) Activity Type: The NSP Eligible use is “(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. The CDBG citation is 570.202 Eligible Rehabilitation and
Preservation Activities.
(3) National Objective: Low Moderate Middle Income Housing (LMMI) benefiting individuals
and families whose income does not exceed 120 percent of area median income. The use of
this objective is consistent with 24 CFR 570.208.
(4) Projected Start Date: February 1, 2009
(5) Projected End Date: July 31, 2010
(6) Responsible Organization: The City of Charlotte will administer the
Acquisition/Rehabilitation Program at 600 East Trade Street, Charlotte, North Carolina. The
City’s Housing Manager Stanley Wilson can be reached at 704-336-3337. The City also plans
to partner with non-profit agencies.
(7) Location Description: The Acquisition/Rehabilitation program will be available in the
defined areas of greatest need.
(8) Activity Description: The Acquisition/Rehabilitation program will be available to the areas of
greatest need defined in Section A of the substantial amendment. This program is expected
to produce 86 rental units for households earning 50% or less of the median income, 15
homeownership opportunities for households earning 31-50% of the median income and 40
homeownership opportunities for households earning 50-120% of the median income.
These homes will be purchased at a discount from the appraised value. Long-term
affordability will be ensured through the use of deed restrictions that establish periods of
affordability that follow federal guidelines. These guidelines ensure that each housing unit
will remain affordable for a period determined as follows:
NSP Funds Provided
Less than $15,000
$15,000-$40,000
More than $40,000
Period of Affordability
5 Years
10 Years
15 Years
Grant funding will be leveraged with $3,550,000 from non-profits. It is estimated that
loans will be available at interest rates of prime plus 1.5%.
I. Total Budget: The budget for the program is $3,516,000 including funding for 146
acquisition/rehabilitation units and program delivery.
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J. Performance Measures: Acquisition/ rehabilitation will be provided to 86 households with
incomes of less than 50% of the median, 15 with incomes between 31-50% of the median
income and to 40 households with incomes over 50% of the median income.
NSP INFORMATION BY ACTIVITY
2. DOWN PAYMENT ASSISTANCE/REHABILITATION PROGRAM
(1) Activity Name: Down Payment Assistance/Rehabilitation Program
(2) Activity Type: The NSP eligible use is “(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”. One CDBG regulation is 24 CFR 570.201(n) (n)
Homeownership assistance. CDBG funds may be used to provide direct homeownership
assistance to low- or moderate-income households in accordance with section 105(a) of the
Act. The other applicable CDBG citation is 570.202 Eligible Rehabilitation and Preservation
Activities.
(3) National Objective: Low Moderate Middle Income (LMMI) benefitting individuals and
families whose income does not exceed 120 percent of area median income. The use of this
objective is consistent with 24 CFR 570.208.
(4) Projected Start Date: February 1, 2008
(5) Projected End Date: July 31, 2010
(6) Responsible Organization: The City of Charlotte will administer the Down Payment
Assistance program. The program will be housed at 600 East Trade Street, Charlotte, North
Carolina and will be administered by the City’s Housing Manager Stanley Wilson who can be
reached at 704-336-3337.
(7) Location Description: The Down Payment Assistance program will be available in the
defined areas of greatest need.
(8) Activity Description: The Down Payment Assistance/Rehabilitation program will be available
within the areas of greatest need defined in Section A of the substantial amendment. Down
Payment Assistance will be provided in the form of 10-year forgivable loans up to $10,000
for households with incomes up to 120% of AMI. An additional $15,000 is available for
rehabilitation repairs to ensure compliance with local code and meet marketability
standards. Thus, a total of $25,000 is available as a 10-year forgivable loan. The program is
expected to provide homeownership opportunities to 15 households at or below 120% AMI.
Long-term affordability will be ensured through the use of deed restrictions that establish
periods of affordability that follow federal guidelines. These guidelines ensure that each
housing unit will remain affordable for a period determined as follows:
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NSP Funds Provided
Less than $15,000
$15,000-$40,000
More than $40,000
Period of Affordability
5 Years
10 Years
15 Years
I. Total Budget: The budget for the program is $269,200 including funding for up to 15 down
payment and or rehabilitation loans.
J. Performance Measures: Down payment and rehabilitation assistance loans will be provided
to 15 households with incomes at or below 120% AMI.
NSP INFORMATION BY ACTIVITY
3. LOAN LOSS RESERVE
(1) Activity Name: Loan Loss Reserve
(2) Activity Type: The NSP eligible use is “(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”.
(3) National Objective: Low Moderate Middle Income (LMMI) benefitting individuals and
families whose income does not exceed 120 percent of area median income. The use of this
objective is consistent with 24 CFR 570.208.
(4) Projected Start Date: February 1, 2008
(5) Projected End Date: July 31, 2010
(6) Responsible Organization: The City of Charlotte will Partner with the Center for Community
Self Help (CCSH) to provide a loan loss reserve for financing eligible acquisition activities.
The program will be housed at 600 East Trade Street, Charlotte, North Carolina and will be
administered by the City’s Housing Manager Stanley Wilson who can be reached at 704-3363337.
(7) Location Description: The Loan Loss Reserve program will be available in the defined areas
of greatest need.
(8) Activity Description: CCSH shall enter into binding agreements with two affiliated lending
organizations, Self-Help Ventures Fund, a North Carolina non-profit corporation and Self-Help Credit
Union, a North Carolina-chartered credit union (the foregoing, the “Lending Entities”), providing
that CCSH will use the Grant to establish a loan loss reserve to cover any actual losses on the
Lending Entities’ lending to one or more borrowers engaged in the acquisition and redeployment of
foreclosed properties in the eligible NSP1 areas as more fully described in Section A attached hereto
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(“NSP Properties”) as contemplated under NSP. Such binding agreements shall act as an
inducement to the Lending Entities to engage in such NSP lending, as such lending is higher risk and
on more favorable terms to the borrowers than the Lending Entities would otherwise provide. The
Lending Entities shall make loans under three product types: (1) commercial loans or revolving lines
of credit to nonprofit or for-profit organizations (“Developers”) for the acquisition, rehabilitation
and redeployment of foreclosed properties to low-, moderate- and middle-income households; (2)
residential mortgage loans to nonprofit organizations that will be assumed by tenants who become
purchasers under a lease-purchase program of such organization; and (3) direct residential home
mortgages to low-, moderate- and middle-income households. In each case, the end buyer or
renter of each NSP Property shall be a household (an “Income Qualified Household”) earning no
more than 120% of the Charlotte AMI (as defined below) and at least 25% of the Grant shall cover
losses under loans that are made to households earning no more than 50% of the Charlotte AMI.
CCSH agrees that it will endeavor to ensure that at least one of the Lending Entities makes an NSP
Loan to the Charlotte-Mecklenburg Housing Partnership, a North Carolina non-profit corporation
(“CMHP).
I. Total Budget: The budget for the program is $1,000,000.
J. Performance Measures: The Loan Loss Reserve program will be available to the areas of
greatest need defined in section A of the substantial amendment. This program will fund the
acquisition and redevelopment of up to 50 homes.
NSP INFORMATION BY ACTIVITY
4. CITY NEIGHBORHOOD REINVESTMENTS
(1) Activity Name: City Neighborhood Reinvestments
(2) Activity Type: The NSP Eligible use is “Redevelop demolished or vacant properties.” The
CDBG citation is 570.201(e) Public Facilities and Improvements.
(3) National Objective: Low Moderate Middle Income (LMMI) benefiting individuals and families
who reside in an area where at least 51% of the residents have incomes that do not exceed
120 percent of area median income. The use of this objective is consistent with 24 CFR
570.208.
(4) Projected Start Date: February 1, 2009
(5) Projected End Date: July 31, 2010
(6) Responsible Organization: The City of Charlotte will administer the City Neighborhood
Reinvestments Program at 600 East Trade Street, Charlotte, North Carolina. The City’s
Housing Manager Stanley Wilson can be reached at 704-336-3337.
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(7) Location Description: The City Neighborhood Reinvestments program will be available in
designated revitalization neighborhoods within the defined areas of greatest need.
(8) Activity Description: The City Neighborhood Reinvestment program will be available to the
areas of greatest need defined in section A of the substantial amendment. This program will
fund eligible demolition; curb, gutter and, sidewalk improvements and acquisitions.
In addition to the physical development, the City will also establish neighborhood
preservation goals and neighborhood preservation teams. The City contracted with the
University of North Carolina at Charlotte to assist with neighborhood organization capacity
building. Other services to be provided to these neighborhoods include; community safety,
code enforcement, foreclosure prevention/financial literacy counseling, employment and
youth services.
I. Total Budget: The budget for the program is $103,400.
J. Performance Measures: The City Neighborhood Reinvestment program will be available to
the areas of greatest need defined in section A of the substantial amendment. This program will
fund eligible demolition, curb, gutter, sidewalk and acquisitions in areas where at least 51% of
the residents have incomes less than 120% of the area median income.
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Figure 3: Trash and debris let at the curb in the Peachtree Hills neighborhood.
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Attachment A
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Attachment B
City of Charlotte Federal NSP Allocation
Funds for 50% and Below - HUD Requirement
Remaining Funds >51% AMI to 120% AMI
Total
Grant
% of
Funding
$ 2,323,200
$ 3,108,577
$ 5,431,777
Grant
43%
57%
100%
Federal Programs - $5,431,777
Program I - Loan Programs
Quantity
Housing Loan Production
Down Payment/Rehabilitation Loans
Self Help Loan Loss Reserve (1)
15
50
Total Program I - Loan Programs
65
Program II - Single Family
Staff
Positions
Quantity
Staff
Positions
Single Family Housing Unit Production
CMHP
SHCDC
Habitat
Builders of Hope
20
20
10
10
0.5
0.5
1
1
Total Program II - Single Family
60
Costs
Per Unit
$
17,947
$
20,000
Totals
$
$
269,200
1,000,000
$
1,269,200
Per Unit
Cost
$
12,320
$
12,320
$ 101,320
$
45,000
Budget
Amount
$
$
$
$
246,400
246,400
923,200
450,000
$
1,866,000
$
$
$
$
Budget
Amount
800,000
250,000
600,000
1,650,000
$
$
$
53,949
49,451
103,400
$
$
$
$
Budget
Amount
17,500
90,000
53,177
85,000
Program III - Multifamily
Multifamily Unit Production
CHA - Woodlawn
CHA - Hampton Creste
Builders of Hope
Total Program III - Multifamily
Quantity
62
24
25
86
Staff
Positions
Per Unit
Cost
$ 12,821
$ 10,460
$ 24,000
Program IV - Neighborhood Revitalization
City Neighborhood Investments (2)
Neighborhood UNCC Foreclosure Pilot
Total Program IV - Neighborhood Revitalization
Program Administration
City General Administration (3)
City Project Manager
Loan Officer/Processor - City
Revitalization Coordinator - City
2
Staff
Positions
1
1
1
16
CMHP Administration
SHCDC Administration
Habitat Administration
Builders of Hope
UNCC Administration
Subtotal - Program Administration
TOTAL FEDERAL NSP PROGRAM BUDGET
211
1
1
1
1
0
7
$
$
$
$
$
$
90,000
90,000
90,000
25,000
2,500
543,177
6
$
5,431,777
(1) City funds ($1M) leveraged with up to ($3M) Self-Help for acquisition/rehab loans to non-profit developers
(2) Neighborhood Investments - Eligible costs, demolition, acquisitions, infrastructure, curb, gutter, sidewalk
(3) Environmental reviews, legal costs, etc.
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