Property Acquisition and Disposition:
Sample NSP Documents
Tim Bolding, Executive Director of United Housing, Inc.
NSP Addendum
Seller is advised and understands Buyer anticipates using Neighborhood Stabilization
Program (NSP) funds for all acquisition and closing costs in connection with this offer.
Further, Seller acknowledges that in order to receive such funding Buyer must comply
with certain NSP rules and regulations which include but are not limited to the following:
1.
2.
3.
satisfactorily.
4.
closing.
5.
of the
Offer must meet appraisal discount rules which are applicable.
Any required environmental reviews must be completed satisfactorily.
Any applicable lead inspection requirements must be completed
The property must be vacant for no less than ninety (90) days prior to
The purchase must be in compliance with all other rules and requirements
American Recovery Reinvestment Act of 2009.
Seller understands that if for whatever reason NSP funds are not available to fund this
transaction, Buyer may declare this offer null and void with no recourse or liability to
either party and any escrow funds shall be promptly returned. All other terms and
conditions of this contract shall remain as written.
___________________________________________
Seller
__________________
Date
BY:________________________________________
__________________
Title
____________________________________________
Buyer
__________________
Date
BY:_________________________________________
__________________
Title
United Housing, Inc.
Neighborhood Stabilization Program
Bid Opening Form
Property Address: _________________________________
Bid Due Date: _____________________________________
Bid Opening Date & Time: ___________________________
In-House Estimate: _________________________________
Witnesses
Witness #1: ______________________________________
Witness #2: ______________________________________
Witness #3: ______________________________________
Bid Return Information
Contractor A: _____________________________
Bid Amount: $_______________
Maintenace: $_______________
Contractor B: _____________________________
Bid Amount: $_______________
Maintenance:$_______________
Contractor C: _____________________________
Bid Amount: $_______________
Maintenance:$_______________
Contractor D: _____________________________
Bid Amount: $_______________
Maintenance:$_______________
Contractor E: _____________________________
Bid Amount: $_______________
Maintenance: $_______________
Bid Award
Contract Awardee: ________________________
Contract Amount: $__________
Construction : $_____________
Maintenance: $_____________
NSP Sales Addendum
For [Insert Property Address Here]
Property is funded by:
THDA NSP [ ]
Shelby County NSP [ ]
City of Memphis NSP [ ]
Buyer is advised and understands Seller has used Neighborhood Stabilization Program
(NSP) funds for all acquisition and rehabilitation of this property. Further, Buyer
acknowledges that Seller must comply with certain NSP rules and regulations which
include but are not limited to the following:
6. Contract approval will be subject to Buyer income verification. Per HUD
regulations, Buyer must be at or below 120% of the area’s median income
based on household size.
7. Customer must meet all prequalification requirements as needed from
NSP funding source.
8. Buyer must attend a minimum of 8 hours of homebuyer education
provided by United Housing, Inc.
9. Any down payment assistance and affordability discounts will be provided
at the discretion of the NSP funding source.
10. Sales price will be no more than the allowable price per NSP regulations
or the appraised value, whichever is less.
11. Sale is subject to Buyer and Seller compliance with NSP regulations 73
CFR 58-330.
Buyer understands that if for whatever reason NSP conditions are not met for this
transaction, Seller may declare this offer null and void with no recourse or liability to
either party, and any escrow funds shall be promptly returned. All other terms and
conditions of this contract shall remain as written.
___________________________________________
__________________
Seller
Date
BY:________________________________________
__________________
Title
____________________________________________
Buyer
__________________
Date
BY:_________________________________________
__________________
Title
United Housing, Inc.
Neighborhood Stabilization Program
Policies and Procedures
September, 2009
The purpose of this manual is to establish an operations guide for the acquisition, rehabilitation,
and disposition of foreclosed properties using the Neighborhood Stabilization Program. UHI has
contracted with the City of Memphis, Shelby County, and Tennessee Housing Development
Agency to implement this program. This manual will set forth policies for determining property
eligibility, performing inspections and environmental reviews, purchasing the property, making
repairs, and marketing the property to targeted populations.
Note: All NSP Rules are published in Federal Register Volume 73, Number 194.
UNITED HOUSING, INC NSP PROGRAM
FOR THE PURCHASE AND RE-USE OF VACANT
FORECLOSED PROPERTIES AS
AFFORDABLE HOUSING FOR LMMI HOUSEHOLDS
GENERAL POLICIES AND PROCEDURES
1. PROGRAM GOALS:
1.1.
To use NSP funding to purchase, rehabilitate, and resell foreclosed properties.
1.2.
The overall goal of the program is to make affordable housing available through sale and/or
lease purchase opportunities to eligible individuals and families which fall at or below 120% of
the area median income by household sized.
2. RELEVANT DEFINITIONS:
2.1.
Abandoned Home. For purposes of the NSP, a home is abandoned when mortgage
or tax foreclosure proceedings have been initiated for that property, no mortgage or
tax payments have been made by the property owner for at least 90 days, AND the
property has been vacant for at least 90 days.
2.2.
Affordability Period: The period ranges from 5 – 15 years based on funds invested,
depending on the sale price of the home.
2.3.
Affordable Rents. Maximum affordable rents is defined as the lesser of (1) the fair
market rent for existing housing for comparable units in the area; or (2) a rent that
does not exceed 30 percent of the adjusted income of a family whose annual income
equals 65 percent of the median income for the area, as determined by HUD, with
adjustments for number of bedrooms in the unit.
2.4.
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. A structure that is unfit for human
occupation or use where conditions exist that are dangerous or injurious to the
health, safety, or morals of the occupants of such structure, or the occupants
of neighboring structures or other residents. Such conditions may include the
following (without limiting the generality of the foregoing): defects therein
increasing the hazards of fire, accident, or other calamities; lack of adequate
ventilation, light, or sanitary facilities; dilapidation; disrepair; structural defects;
or uncleanliness.
2.5.
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 by a qualified appraiser and completed within 60 days prior to an offer
made for the property.
2.6.
Foreclosed Property. A property “has been foreclosed upon” at the point that under
state or local law, the mortgage or tax foreclosure is complete.
2.7.
Homebuyer Counseling: Homebuyer Counseling is defined as a minimum of eight (8)
hours of homebuyer counseling from a HUD approved counseling agency.
2.8.
Maximum Sales Price: The maximum sales price of an unit utilizing NSP funds shall
be no more than the cost to acquire and redevelop or rehabilitate the home or property
up to a decent, safe, and habitable condition.
3. AMOUNT OF ASSISTANCE:
3.1.
4.
United Housing will utilize all NSP funds for the program as provided by the City of
Memphis, Shelby County, and the Tennessee Housing Development Agency to
acquire and rehab foreclosed single-family houses.
DESIGNATION OF NSP SERVICE AREA
(HOUSING AND ECONOMIC
RECOVERY ACT § 2301(c)(2))
4.1.
United Housing, Inc. will focus its NSP efforts within the 38127, 38111, 38116, 38115,
38114, 38106, 38109, 38118, 38128, and 38141 zip codes and certain census tracts
as designated by THDA.
5. PROPERTY VALUE LIMIT, MAXIMUM RENTS, AND MAXIMUM
SALES PRICE:
5.1.
Property Value Limit: The appraised value of an NSP assisted property may not
exceed the HUD 203(b) mortgage limits for Shelby County for the type of housing
being purchased by a qualified homebuyer.
5.2.
Affordable Rents: Rent on an NSP property may not (1) exceed the fair market rent for
existing housing for comparable units in the area as established by HUD; or (2) may
not exceed 30 percent of the adjusted income of a family whose annual income equals
65 percent of the median income for the area, as determined by HUD, with
adjustments for number of bedrooms in the unit.
5.3.
Maximum Sales Price: In compliance with HERA §2301(d)(2), the maximum sales
price of an unit utilizing NSP funds shall no more than the cost to acquire and
redevelop or rehabilitate the home or property up to a decent, safe, and habitable
condition.
6. INCOME GUIDELINES: (HOUSING AND ECONOMIC RECOVERY
ACT § 2301(f)(3)(A)(i) and (ii))
6.1.
All of the funds will be used with respect to individuals and families whose incomes do
not exceed 120% of area median income.
Memphis MSA Income Limits
1 person HH
$20,050
FY 2008 Income Limits for 50% of HUD Area Median Income
2 person
3 person
4 person 5 person
6 person
7 person
HH
HH
HH
HH
HH
HH
$22,900
$25,800
$28,650
$30,950
$33,250
$35,550.
8 person HH
$37,800.00
1 person
HH
$48,150
FY 2008 Income Limits for 120% of HUD Area Median Income
2 person
3 person 4 person 5 person
6 person
7 person
HH
HH
HH
HH
HH
HH
$55,000
$61,900
$68,750
$74,250
$79,750
$85,250
8 person HH
$90,750
For more information on the 120% of area median income requirement
consult http://www.huduser.org/publications/commdevl/nsp.html.
7 CONTINUED AFFORDABILITY (HOUSING AND ECONOMIC
RECOVERY ACT §2301(f)(3)(B).)
7.1. United Housing, Inc. will comply with affordability requirements as set forth by HERA for
eligible homebuyers.
8 GUIDANCE FOR ELIGIBLE TYPES OF ASSISTANCE: (Housing
and Economic Recovery Act §2301(c)(3)(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).
8.1.
NSP funds will be used for costs associated with acquisition of foreclosed properties
that have been vacant for 90 days, rehabilitation of purchased units, , and housing
counseling costs for LMMI individuals purchasing or renting an NSP unit, and other
development costs associated with each individual project.
9 PURCHASE/ACQUISTION
9.1.
United Housing, Inc. will comply with the following:
9.1.1.
All property acquisitions require an appraisal for purposes of determining the
purchase discount. No appraisal shall be older than 60 days from the date
upon which the offer to purchase is made.
9.1.2.
Any individual purchase of a foreclosed-upon home or residential property
shall negotiate the “maximum reasonable discount” from the mortgagee.
.
9.2.
United Housing, Inc. WILL NOT provide NSP funds to another party to finance an
acquisition of tax foreclosed (or any other) properties from itself.
9.3.
At no time will NSP funds be used in an acquisition involving an eminent domain
action.
10 REHABILITATION
10.1.
NSP funds used for rehabilitation will comply with all applicable law, codes, and other
health and safety requirements.
10.2.
At a minimum the following will govern rehabilitation on an NSP unit:
10.2.1.
All applicable local codes.
10.2.2.
Rehabilitation activities will include improvements to increase the energy
efficiency and conservation of the unit(s).
10.3.
NSP funds may be used for preservation, improving energy efficiency or conservation,
or providing renewable energy source(s).
10.3.1.
Rehabilitation designs to strategically incorporate modern green building and
energy efficiency improvements to provide for long-term affordability and
increased sustainability and attractiveness of housing and neighborhoods are
to encouraged when feasible.
10.4.
Rehab will follow all policies and procedures outlined in the UHI
Manual.
Construction
10.5.
Bid advertisements will be sent to a minimum of four (4) contractors from the United
Housing Invitation for Bid List.
10.5.1.
Contractors will be notified of the date when the bid period begins.
10.5.2.
Contractors will be given one (1) week to complete bid package and return it
to the UHI office by 3 p.m. on the day the bid period ends.
10.5.3.
All contractors must sign to acknowledge receipt of bid package and sign
again to acknowledge return of package to UHI.
10.5.4.
Any contractor not picking up or returning a bid package by 3 p.m. on the day
the bid period ends will be considered a “no bid” for that particular project.
10.5.5.
Per Federal Regulations, United Housing encourages the use of Section III
contractors for Neighborhood Stabilization Program rehabilitation projects.
10.5.6.
All contractors will be required to certify as to whether the Section III
classification applies to their company.
10.6.
Bid opening will occur no later than the day following the end of the bid period for a
particular project.
10.6.1.
Bids MUST be opened with a minimum of three witnesses, consisting of the
United Housing NSP Coordinator, UHI Construction Manager, and another
member of the UHI administrative staff.
10.6.2.
Bid award will be given to the lowest AND / OR best bid per standard
government construction procurement procedures. Winning bids must be
within 20% above or below the in-house estimate for construction work.
10.6.3.
The UHI Construction Manager will notify all contractors about the bid award
in a timely manner.
10.7.
Contractors will be notified of a time and date to come to UHI to sign the rehab
contract and discuss rehab specifications.
10.8.
Prior to awarding the contract, United Housing will monitor the Federal Debarment list
to ensure that the winning contractor has not been banned from receiving federal
dollars for work.
10.9.
Draw requests and inspections will be subject to NSP inspector approval where
applicable.
11 COUNSELING FOR HOMEBUYERS
11.1.
United Housing will ensure that all individuals who are eligible to purchase a home
under NSP income requirements will participate in a minimum of 8 hours of
homebuyer education.
12 Sale of NSP Properties (Housing and Economic Recovery Act §
2301(d)(3)).
12.1.
The sales price of NSP property shall be no more than the cost to acquire and
redevelop or rehabilitate such home or property to a decent, safe, and habitable
condition. Sales price will be set within criteria established by HUD.
12.2.
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 include, among other things, costs related to the sale of property).
12.3.
United Housing will not include the costs of boarding up, lawn mowing, maintaining the
property in determining the final sales price of a home.
12.4.
United Housing will assist eligible homebuyers find safe and secure mortgages,
avoiding subprime mortgages which are inappropriate for the target population.
12.5.
UHI will work with partner realtors to market these properties for a period of four (4)
months with the intention of selling the property. At the end of that period, UHI will
work toward establish a lease purchase plan with a qualified customer.
12.6.
UHI will provide secondary financing of up to $14,999 or up to the maximum allowed
by HUD to make the unit more affordable to qualified customers.
12.7.
All sales will comply with HUD restrictions and will provide for special notes, deeds,
and restrictive covenants as required by grantor.
13 Partnerships
13.1.
UHI will work in partnership with other CDCs, nonprofit, and for-profit organizations to
complete NSP activities.
14 Complaints
14.1.
Direct complaints to: Tim Bolding, Executive Director, 901-272-1122 (phone) or
tbolding@uhinc.org (email).
Important Note about NSP Regulations: Davis-Bacon Labor Standards
This letter explains labor and reporting regulations that apply to all CBDG
programs, including NSP. If your organization is receiving NSP funding,
you should be aware of the requirement to report the payroll of contractors.
All contracted workers are to be paid the prevailing wages, and your
organization must show compliance with this rule.