Vermont Neighborhood
Stabilization Program (VT NSP)
Approved Plan
Agency of Commerce and
Community Development
Department of Housing and Community
Affairs
Agenda
•
Approved VT NSP Plan
•
NSP Regulations
•
VT Foreclosure Process
•
Application Review
•
Short Break
•
Questions & Answers
Vermont Neighborhood Stabilization
Program (VT NSP) Approved Plan
Goals

Acquire, renovate and sell/rent foreclosed or
abandoned residential housing to households at
or below 120% of area median income;

Allow municipalities to locally address the
residential foreclosure problem of their
community;

Provide an opportunity for- profit and non-profit
entities to reutilize foreclosed properties;
Vermont Neighborhood Stabilization
Program (VT NSP) Approved Plan
Goals

Preserve foreclosed upon assisted housing;

Ensure long-term affordability;

Alleviate blighted and abandoned buildings; and

Support and enhance designated downtowns,
villages, new neighborhoods and growth centers.
Vermont Neighborhood Stabilization
Program (VT NSP) Approved Plan
Three-Prong Approach
I.
Homeownership Acquisition and
Rehabilitation Program (HARP) - $7 million
II.
Municipal Program - $5.5 million
III.
Project-Specific Program - $6.5 million
I. Homeownership Acquisition and
Rehabilitation Program (HARP)
Funding to the Vermont Housing and
Finance Agency (VHFA)
–
Purchase and rehab abandoned or
foreclosed upon residential properties to
• sell, rent, or redevelop
–
Establish land banks for foreclosed upon
homes
I. Homeownership Acquisition and
Rehabilitation Program (HARP)

Acquire, rehab and sell properties

Transfer or sell properties to
housing organizations
All to be
• sold to income eligible homeowners
• rented to income eligible households
I. Homeownership Acquisition and
Rehabilitation Program (HARP)
Targeted Counties
–
–
–
–
–
–
–
Essex
Orleans
Caledonia
Orange
Rutland
Windham
Southern Windsor
I. Homeownership Acquisition and
Rehabilitation Program (HARP)
Estimated Benefit

55 Households – at or below 120%
of area median income
I. Homeownership Acquisition and
Rehabilitation Program (HARP)
VHFA Overview
II. Municipal Program
Locally address residential foreclosure
problem in Vermont communities
• Municipal applicants
II. Municipal Program
Eligible Uses
–
Establish financing mechanisms
• purchase and redevelopment of foreclosed upon
homes and residential properties
–
Purchase and rehabilitate abandoned or
foreclosed upon homes and residential
properties
• sell, rent, or redevelop
–
–
–
Establish land banks
Demolish blighted structures
Redevelop demolished or vacant properties
II. Municipal Program

Acquire, rehab and sell properties
 Transfer or sell properties to
housing organizations
All to be
•
•
sold to income eligible homeowners
rented to income eligible households
II. Municipal Program
Targeted Communities
–
–
–
–
–
–
–
–
City and Town of Barre
Town of Bennington
City of Burlington
Town of Hardwick
City and Town of Newport
City and Town of Rutland
Town of St. Johnsbury
Town of Springfield
The above are encouraged to work with contiguous communities with
similar foreclosure problems.
II. Municipal Program
Estimated Benefit
50 homeownership and rental units

–
–
–
13 Households – 120% - 81% of area median income
12 Households – 80% - 51% AMI
25 Households – 50% or below AMI
III. Project-Specific Program
Address projects more than 4 units per
structure or properties smaller than
4 units but together comprise more
than four units
•
For-profit or non-profit applicants
III. Project-Specific Program
Eligible Uses
–
Establish financing mechanisms
• purchase and redevelopment of foreclosed upon
homes and residential properties
–
Purchase and rehabilitate abandoned or
foreclosed upon homes and residential
properties
• sell, rent, or redevelop
–
–
–
Establish land banks
Demolish blighted structures
Redevelop demolished or vacant properties
III. Project-Specific Program
Targeted Communities
III. Project-Specific Program
Estimated Benefit
50 rental and homeownership units

–
–
–
13 Households – 120% - 81% of area median income
12 Households – 80% - 51% AMI
25 Households – 50% or below AMI
VT NSP Requirements

Serve Low, Moderate, and Middle
Income (LMMI)
– Low
– Moderate
– Middle
< 50% Area Median Income
< 80% Area Median Income
<120% Area Median Income
• Housing
• Public Facilities
VT NSP Requirements

At minimum 25% of the VT Grant ($4.9
million) must be used for the:
– purchase & redevelopment of abandoned or
foreclosed upon residential properties to
• serving less than 50% Area Median Income
BLIGHT DOES NOT COUNT!!!
VT NSP Requirements

Acquisition cost
– no more than 90% the appraised value
VT NSP Requirements

Sale price
– low as 50% total cost of acquisition, discharge
of liens, rehab and transaction costs
– no more than the total of those costs, less 10%
– no profit earned on the sale if abandoned or
foreclosed-upon residential property sold to an
individual as a primary residence
VT NSP Requirements

Rehabilitate to comply with:
–
–
–
–

Vermont Department Fire and Public Safety
CDBG Lead Paint regulations
Local building codes, and/or
Zoning permit requirements
Incorporate green & energy efficient
built environments
VT NSP Requirements

If a home assisted is sold:
– Sold to homeowners at or below 120% AMI
• occupied as primary residence
• receive at least 8 hours of HUD certified, home
ownership counseling,
• secure financing that is not subprime, and
• agree to a continued affordability agreement
VT NSP Requirements

If a home assisted is rented:
– Rented to households at or below 120% AMI
• Occupied as primary residence
VT NSP Requirements

Affordability, at a minimum:
– 15-year term - rehab properties
– 20-year term - new construction
VT NSP Requirements
 Community
Development Block
Grant (CDBG) Federal
Regulations – generally apply to
NSP funds
VT NSP Requirements
 Uniform
Relocation Act (URA)
– Appraisal required to establish
statutory purchase discount
– All acquisitions must be voluntary
VT NSP Requirements
 Uniform
Relocation Act (URA)
– One to One replacement waived
• Only applies to LMI units that are
demolished or converted using NSP funds
• Any reduction in units must be tracked just
as the production of units is tracked
VT NSP Requirements
 Uniform
Relocation Act (URA)
– Relocation assistance remains the
same
– Must follow a residential antidisplacement and relocation plan
• Municipal Plan
VT NSP Requirements
 Environmental Review
– Release of environmental conditions
must be obtained
– 3 Levels of Review
• Exempt
• Categorically Excluded
• Assessment
VT NSP Requirements
 Environmental Review
– Acquisition is Exempt
• If purchase and sales contract executed
prior to application for federal assistance
– Complete environmental review must
still be conducted
VT NSP Requirements
 Environmental
Review
– Generally rehabilitation activities for
single-family owner-occupied homes
• Categorically excluded
VT NSP Requirements
 Environmental Review
– Substantial rehabilitation – Assessment
• Rehabilitation expenditures consist of
greater than 75 % of the appraised value
VT NSP Requirements
 Environmental
Review
– Historic structures of 50 years or older
must be reviewed by an “Authorized
Historic Preservationist”
• See list on website
– http://www.dhca.state.vt.us/VCDP/Grants%20Man
agement/HP%20Consultants.pdf
VT NSP Requirements
 Environmental
Review
– Demolition activities
• Historic structures
• Archaeologically sensitive
VT NSP Requirements
 Labor

Standards
Davis Bacon
– Not applicable to single-family owneroccupied
– Applicable to Single-family rental
homes
• 8 or more units, commonly owned
VT NSP Requirements

Davis Bacon
– Applicable to 8 or more units of multifamily rental housing
• Same or contiguous parcel
– Wage Rates must be obtained
• http://www.gpo.gov/davisbacon/
VT NSP Requirements
 Procurement
Non-Profits
• Must follow 24 CFR §85
• Open and competitive process
VT NSP Requirements
 Procurement
For-Profits
• Exempt from any Regulations for
Procurement
• Employ prudent practices when using
public funds
VT NSP Requirements
 Contracts
– Must establish a written contract for any
work to be paid for with federal funds
VT NSP Requirements
 Contracts
– Bonding Requirements
• Bid Guarantee – 5% of bid price
• Performance Bond – 100% of contract price
– Ensure fulfillment of contract obligations
• Payment Bond – 100% of contract price
– Ensure payment to subcontractors
VT NSP Requirements

Program Income
– Income generated as a result of the use of the
NSP funds, by public and private entities
•
•
•
•
Sale
Rental
Redevelopment
Rehabilitation
VT NSP Requirements
 Program
Income
– Within the 18 month window of
obligation, income generated must
reduce any new requisitions of NSP
funds
• August 2010
VT NSP Requirements
 Program
Income
– Received prior to July 30, 2013
• May be retained, if treated as CDBG funds
– Income received by a private entity
must always be returned
VT NSP Requirements
 Program
Income
– Received on or after July 30, 2013
• Return to U.S Treasury
• Including the income from the Sale of rental
housing – after that date
VT NSP Requirements
 Program
Income
– Received on or after July 30, 2013
• May be retained with approval from HUD
– Income in excess of the cost to acquire,
rehabilitate – abandoned or foreclosed upon
home or residential property
VT NSP Requirements

Obligate funds
– August 2010
– GRANTEE or SUB-GRANTEE, NOT VERMONT

Expend funds & meet benefit
– February 2013
VT Foreclosure Process
Vermont Foreclosure Process
Application Selection & Review Process
1 Round - Rolling Acceptance
– January - May 2009
http://www.dhca.state.vt.us/VCDP/NSP.html
–
–
–
–
Scored and ranked with recommendation
CD Board
Decision 45-days from application submittal
Grant Agreement 35 days from decision
Application Selection & Review Process
Competitive Factors
–
Need met
–
Readiness
–
Plan to encumber funds by August, 2010
–
Capacity to undertake project on time and on budget
–
Ratio of units serving households at or below 50%
AMI
Application Selection & Review Process
Competitive Factors
–
Preservation of existing public subsidy
–
Longevity of benefit and affordability
–
Incorporation of energy efficiency and conservation
–
Location in designated downtown, village, new
neighborhood or growth center
Application Selection & Review Process
Competitive Factors
–
Elimination of health or safety issues
–
Sustainability
–
Cost effectiveness and leverage of NSP funds
–
Meeting other Consolidated Plan Priorities
Application Selection & Review Process
Tiers
A.
Eligible – Targeted - At or below 50% AMI
B.
Eligible – Targeted - Not at or below 50% AMI
C.
Eligible – Not Targeted - At or below 50% AMI
D.
Eligible – Not Targeted - Not at or below 50% AMI
Feasible yet unsuccessful applications will be ranked and maintained
for future consideration should a successful application(s) fail to
proceed toward fruition.
Vermont Neighborhood Stabilization
Program (VT NSP) Approved Plan
Short Break
Questions & Answers
Adjourn