NSP DEVELOPER ARRESALE PROGRAM PROCEDURES
HERA 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;
Phase 1: Property Conveyance, Scope of Work and Contractor Selection
The City will convey the property to the Developer immediately after the
acquisition closing. Prior to closing, the Developer may chose to access the
property (provided the seller gives permission) in order to complete a thorough
Scope of Work. Developer will be given a copy of the City generated Inspection
Summary form NSP1-180C-NLV to be used as a reference guide as to the items
inspected by the City. In addition to the Inspection Summary, the developer will
be provided a copy of the Environmental Review and appraisal conducted on the
property along with its Covenants, Conditions and Requirements.
1.
City will create a summary outline of repairs required to meet minimum code
compliance (if code violations are discovered). Included in the summary outline
will be the necessary repairs required to bring the property to HUD minimum
property standards and identify property improvements. Also, the assessment of
the property will identify key repair and replacement measures which will
increase the energy efficiency and home performance of the property. This
inspection summary document (form NSP1-180C-NLV) will be compared against
the developers own property analysis (NSP1-182-NLV & Home Performance
Energy Audit Report) to obtain the necessary scope of work and cost estimates
needed to conduct rehabilitation on the property.
FORMS/ DOCUMENTS USED FOR THIS PROCESS:
A: Inspection Summary – NSP1-180C-NLV
B: Scope of Work and Cost Estimate-NSP1-182-NLV
C: Home Performance Energy Audit Report
2.
Developer to require that each housing unit is inspected by a Building
Performance Analyst/Energy Auditor certified by HERS and RESNET (City will
provide list of certified auditors to Developer) to evaluate the energy performance
of the building and to determine the energy efficient activities that need to be
accomplished in accordance with established program guidelines.
FORMS/DOCUMENTS USED FOR THIS PROCESS:
A: Home Performance Energy Audit Report
B: HomeFree Nevada HERS-BPI list as of 10/2009
3.
Developer creates a scope of work and cost estimate to be utilized for property
rehabilitation which is determined by the property inspection and energy audits
conducted on the site, in accordance with local codes along with City rehabilitation
1
D:\533560576.doc
standards. Soliciting several bids alone is not a substitute for preparing an
independent cost estimate.
In addition, the developer will prepare a Rehabilitation/Construction draw request
schedule to submit, along with the Scope of Work and Cost Estimate (NSP1-182NLV), Home Performance Energy Audit Report, a preliminary ARResale Unit
Project Budget (NSP1-220A-NLV), if applicable, contractor’s agreements, and
proof of Non-Debarred status to the City for review and approval. Should the City
find it necessary to obtain clarification of the information submitted for approval for
property rehabilitation by the developer or need additional information, form NSP1181-NLV (Request for Additional Information) will be used. Once all submittal
requirements have been met, and all approved rehabilitation items have been
authorize by City staff, a City approved scope of work along with a Notice to
Proceed (NSP1-186-NLV) will be given to the developer. At this time construction
contracts can be signed and rehabilitation of the property may commence
NOTE: Developer may select any non-debarred licensed General Contractor
that demonstrates competence to undertake construction in conformance with
the established Property Rehabilitation Standards and Guidelines. The
Developer must verify that selected contractor(s) is not on the debarred list
and Developer is to keep on file a certification of non-debarred status (NSP1120-NLV) of all contractors.
FORMS/DOCUMENTS USED FOR THIS PROCESS:
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
Request for Additional Information - NSP1-181-NLV
Scope of Work/Cost Estimate form –NSP1-182-NLV
Notice to Proceed – NSP-186-NLV
ARResale rehabilitation Document Checklist – NSP1-210-NLV
Preliminary ARResale Unit Project Budget (NSP1-220A-NLV)
Rehabilitation/Construction Schedule
Construction and Draw Request Schedule
Home Performance Energy Audit Report
CNLV NSP Property Standards and Guidelines
NSP Construction Standards Guide
Home Performance Standards for Warm Climates
Contractor’s Agreements
City Approved Scope of Work
North Las Vegas Building Code
North Las Vegas Planning and Zoning Ordinance
North Las Vegas Building and Planning and Zoning codes may be accesses via the
World Wide Web by pasting the following path to your browser at
http://library.municode.com/index.aspx?clientId=16023&stateId=28&stateName=Nevada
Phase 2: Rehabilitation Management
The developer will have the responsibility for overseeing the entire rehabilitation
process and will periodically (or as requested) provide the City with the necessary
progress updates as well as make all necessary requests (e.g. Inspection,
financial, administrative) to the City so as to ensure all program activities are
2
D:\533560576.doc
carried out in accordance with City of North Las Vegas Neighborhood
Stabilization program regulations.
4.
Rehabilitation activities will include construction oversight by the Developer. City is
to be notified of pre-construction meetings and reserves the right to participate in
those meetings and conduct routine site visits. A Status Report will be submitted by
the developer at monthly or as requested, to the City detailing the individual
progress of each property. All Rehab Activity will be inspected by the City as
needed. Project monitoring will be conducted via desk top or “on-site” by City staff
so as to ensure program compliance and identify any issues relating to the program
process and to assist in creating a solution as needed. Developer may request, as
desired, an intermediate progress inspection by the City to ensure rehabilitation
work timeline+ is kept so as to avoid project delays.
FORMS/DOCUMENTS USED FOR THIS PROCESS:
A. NSP Intermediate Inspection Request form – NSP1-188-NLV
B. ARResale/ARRental Monthly Status Report – NSP-240-NLV
5.
City is interested in any change orders between the contractor and Developer. If the
change order reflects a change in the authorized scope of work, it will require City
approval prior to implementing the change.
FORM/DOCUMENTS USED FOR THIS PROCESS:
A. Change Order Request form - NSP-187-NLV
B. Revised Scope of Work/Cost Estimate form –NSP1-182-NLV
6. When construction and rehabilitation is complete, Developer will schedule a punch
list inspection with the NSP Program Administrator. In addition, an inspection by a
Building Performance Analyst/Energy Auditor (certified by HERS and RESNET) will
also be scheduled. A list of items to be corrected will be provided to the Developer
and the contractor. Until punchlist items are corrected to the satisfaction of the
Developer and the inspector, and required permits are issued, and the receipt of the
revised Home Performance Energy Audit Report, the Developer will not be allowed
to proceed to property disposition.
7. The City will progress pay the rehabilitation expenses upon receipt of the required
documentation and Request for Payment forms; requests should not be submitted
more often than twice monthly. Advances on work will not be approved. The City
may retain 10% until the project is complete (disposition of the property).
8. Upon completion and prior to final payment, contractor shall provide Developer all
warranties, as-built drawings, operation manuals, guarantees and release of liens.
As part of NSP1 requirements, the developer must be in compliance with Section 3
of the Department of Housing and Urban Development Act of 1968.
3
D:\533560576.doc
FORMS/DOCUMENTS USED FOR THIS PROCESS:
A. A cover letter requesting reimbursement on Developer letterhead. Please
indicate the dollar amount of request in this letter.
B. A completed Request for Payment form (NSP1-231-NLV) with progress
narrative.
C. Contractor’s invoice with percentage of work completed.
D. Copies of checks and cancelled checks for payments made (front & back). In
the case of wire transfers copy of the wire transfer entry and wire transfer
receipt conformation.
E. NSP1 Rehabilitation Punchlist- NSP1-183-NLV
F. ARResale Project Completion Certification and Request for Inspection –
NSP1-236-NLV
G. Final Home Performance Energy Audit Report
H. HUD 2516 – Contract and Subcontract Activity
Phase 3: Applicant Eligibility/Disposition
Once Rehabilitation has been completed, efforts to sell the property should be
underway. Developer identifies a specific buyer for the completed unit and
determines the buyer’s eligibility for the program (24 CFR Part 5). The eligible
homebuyer then purchases the home from the Developer.
Intake and Eligibility
9. The Developer provides the list of the completed properties to a wait list of eligible
participants and begins to market home to potential homebuyers and/or a realtor.
The home is to be advertised at fair market value however it cannot be sold for
more that the cost to acquire and rehab the property. The Developer is ultimately
responsible for ensuring that the homebuyer is eligible for NSP.
In the event that the homebuyer does not come already preapproved for NSP
through one of the four NSP HAP Subrecipients, the Developer is responsible for
determining eligibility of the potential homebuyer (see Hap Program Procedures for
Subrecipients). If eligible, the Developer completes the intake process and forms
including income worksheet (use Part 5 for income determination).
The
Developer’s housing counselor assists homebuyer to determine down payment
amount, approximate mortgage amount, and eligible direct homebuyer assistance
available through NSP.
FORMS/DOCUMENTS USED FOR THIS PROCESS:
A.
B.
C.
D.
E.
HAP Program Procedures for Subrecipients
NSP1-305-NLV HAP Intake Application Content Guide
NSP1-306-NLV HAP Intake Application Required Certification Language
NSP1-310-NLV HAP Income Worksheet and Instructions
NSP1-311-NLV HAP Income Inclusions and Exclusions
4
D:\533560576.doc
10. Homebuyer that meets NSP program eligibility requirements makes loan
application and arranges financing with lender. Developer may create list of
preferred lenders and title companies through the issue of RFQ for the
homebuyer to choose. Borrower may already be pre-qualified for mortgage
financing and must have completed the required eight (8) hours of homebuyer
education through a HUD-certified agency.
FORMS/DOCUMENTS USED FOR THIS PROCESS:
A. List of preferred Lenders
B. Current Certificate of Completion of Homebuyer Education
C. 24 CFR Part 5, Income and Eligibility requirements
11. Developer provides City with an updated Project Budget, Purchase Agreement
between the Developer and the homebuyer. Upon approval, City issues
Developer a Notice to Proceed so as to move forward with the transaction.
FORMS/ DOCUMENTS USED FOR THIS PROCESS:
D.
E.
F.
Current/Updated Project Budget – NSP1-220B-NLV
Purchase Agreement
Disposition Notice to Proceed – NSP1-286-NLV
12 Lender completes credit package and approves borrower for 1st mortgage in
conjunction with NSP funded loan if also utilizing direct homebuyer assistance.
Homebuyer assistance to be determined based upon homebuyer eligibility
requirements of the program up to a maximum amount of $25,000. Homebuyer
assistance to be provided as a soft-second deferred loan at zero percent interest.
The 1st mortgage loan must be a traditional fixed-rate mortgage. Lender sends
copy of complete credit package to Developer for review of program eligibility.
13 Developer submits a Loan Closing Document Checklist, Final Project Budget,
Project Completion Document Checklist, confirmation of homebuyer eligibility,
and closing date to City for set up two weeks in advance of closing. City to send
funds for soft-second loan to Title Company prior to closing. Developer issues a
commitment and provides to the homebuyer the Deed of Trust, Promissory Note,
and Loan Agreement to be executed by homebuyer at closing.
FORMS/ DOCUMENTS USED FOR THIS PROCESS:
A.
B.
C.
D.
E.
F.
G.
H.
Loan Closing Document Checklist – NSP1-225-NLV
Commitment Letter
Deed of trust
Promissory Note
Loan Agreement
Project Completion Document checklist – NSP1-235-NLV
Final Project Budget– NSP1-220B-NLV
HUD-1 Settlement Statement
5
D:\533560576.doc
I.
Current Property Appraisal
14 At closing, the direct homebuyer assistance (down payment assistance, principal
buy-down and/or closing costs) funds are available as a deferred loan at zero
percent interest for a period determined by the amount of direct assistance. The
Homebuyer will complete the Loan Agreement with the Developer, Deed of Trust
and Promissory Note naming the City of North Las Vegas as Beneficiary.
15 Title Company will issue check payable to the Developer for the sale price of the
property – this is program income and must be repaid to the City for use in other
eligible NSP projects. The Developer is responsible for reviewing the closing
package for compliance.
16 Upon disposition, project is complete. Developer submits Client Statistics Report
to City.
FORMS/ DOCUMENTS USED FOR THIS PROCESS:
G.
H.
I.
J.
Homebuyer Statistics Report – NSP1-250-NLV
Copy of executed Loan agreement
Copy of executed Deed of Trust
Copy of executed Promissory Note
17 Developer requests final payment and the Project Delivery Fee as well as final
payment for property rehabilitation are to be submitted to the City through the
Request for Payment Form () and provides progress narrative with required
documentation.
FORMS/ DOCUMENTS USED FOR THIS PROCESS:
K.
L.
M.
N.
O.
P.
Q.
R.
NSP1 ARResale Project Completion Checklist - NSP1-235-NLV
Final Project Budget – NSP1-220B-NLV
Request for Payment – NSP1-231-NLV
Progress Narrative and all required documentation
Post-rehab Appraisal
Final Purchase Agreement between Agency and Homebuyer
Homebuyer Certificate of Completion (8 hours HUD-certified counseling)
HUD-1 Settlement Statement
6
D:\533560576.doc
RELEVANT DEFINITIONS:
Abandoned. A home is abandoned when mortgage or tax foreclosure proceedings have
been initiated and completed 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.
Acquisition Costs. Acquisition costs that will be considered reimbursable at the time of
sale cannot exceed the appraised market value conclusion determined of the home at
the time of purchase. Acquisition costs include payment of any and all liens to obtain a
clean title to the property, appraisals, hazmat reports, energy or “BEPS” audit reports,
code compliance costs, work scope reports, systems performance analysis costs and
other costs itemized in the Program Budget under Acquisition Delivery Fee (Exhibit “B”).
Area Median Income. Income limits are calculated by HUD in accordance with Section
3(b)(2) of the United States Housing Act of 1937, as amended. These limits are based
on HUD estimates of median family income, with adjustments based on family size.
These figures are updated on an annual basis and new limits will be utilized as
published. These limits are available on the www.hud.gov website. See Exhibit “D” for
HUD NSP Income limits as of April 2009.
Areas of Greatest Need. City has geographically identified the locations of greatest
need based on the areas with the greatest percentage of home foreclosures; areas with
the highest percentage of homes financed by sub-prime mortgages and areas identified
as likely to have a significant rise in the rate of home foreclosures. See Exhibit “E” for a
list of all eligible locations for City NSP-assisted properties.
Blighted. A structure is blighted when it exhibits objectively determinable signs of
deterioration sufficient to constitute a threat to human health, safety and public welfare.
Completed. A unit is considered completed once the construction/rehabilitation is 100
percent complete, the permit(s) have been finalized and issued by the Building
Department, the unit has been sold to an eligible household, and the appropriate
disposition documentation has been submitted to City.
Continued affordability. The affordability of the homeownership housing units will be in
accordance with the HOME program standards at 24 CFR 92.254. Using the HOME
program affordability periods will provide for a minimum length of affordability; however,
the City may require longer affordability periods that exceed the HOME program
requirements as the NSP program evolves.
Current market appraised value. The current market appraised value means the value of
a foreclosed upon home or residential property that is established through an appraisal
made in conformity with the appraisal requirements of the URA at 49 CFR 24.103 and
completed within 60 days after an offer is made for the property by a grantee, Developer,
or individual homebuyer.
Delivery Fee. Proposed project delivery fee per housing unit as identified by the
Developer and as detailed in the Program Budget (Exhibit “B”).
7
D:\533560576.doc
Foreclosed. A property has been foreclosed upon at the point that under state or local
law the mortgage or tax foreclosure is complete. HUD will not consider a foreclosure to
be complete until after the title for the property has been transferred from the former
homeowner under some type of foreclosure procedure or transfer in lieu of foreclosure,
in accordance with state and /or local law.
Housing Rehabilitation Standards. Rehabilitation standards require that all buildings
assisted with NSP funds be brought up to City codes in effect at this time, that required
building permits be obtained and that appropriate inspections be performed. NSP
assisted properties involving rehabilitation must conform to the City NSP Construction
Standard Checklist as well as the Home Performance Specifications for Warm Climates
manual as adopted by City for use with NSP Acquisition Rehab Resale projects.
Obligated. Funds are obligated for an activity when orders are placed, contracts are
awarded, services are received that require payment by the unit of local government or
Developer.
Participant. The consumer that buys the home upon completion of rehabilitation by the
Developer. Homebuyer must be eligible for the program as specified in Program
Description (Exhibit “A”).
8
D:\533560576.doc