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State of Georgia Neighborhood Stabilization Program Goals
Areas of NSP Activity Considerations: Ø Already proposed general area(s) where you will be working Ø Program will mainly purchase REO Property Ø Stay in HUD Risk Area of 8 or higher Ø Purchase Worst first?
Areas of NSP Activity Considerations: Ø What is the difference between Neighborhood Stabilization and Revitalization? Ø Will you work in a Redevelopment Area or a Tipping point area?
Areas of NSP Activity Considerations: Ø What can NSP do to increase marketability? Ø “Above and Beyond” Rehab Ø Energy Star Compliant Ø Internet Wired Ø Design improvement to fit in with neighborhood Ø Add porch if that feature is prevalent in the neighborhood Ø Will you work in a Redevelopment Area or a Tipping point area? Whatever is chosen, the Neighborhood Type impacts marketability!
Areas of NSP Activity Considerations: Ø Rehabilitate units to beyond “Safe and Decent” Ø Unit must be marketable at the end of the day Ø Make it the nicest house on the block – That is true neighborhood Stabilization Ø Work in area(s) where units will sell to people who want to live there
Areas of NSP Activity Considerations: Ø Perform analysis of each area under consideration Ø Vacancy and Homeowner rates Ø Trends in sales activity and prices Ø Proximity to anchors and amenities Ø Recent public investment and/or planning
NSP Due Diligence For EVERY acquisition: Ø Environmental and Historic Review Ø Lead hazard evaluation for ALL pre-1978 Housing units Ø URA Notice of Voluntary Acquisition Ø Appraisal by State certified appraiser Ø Purchase discount at MINIMUM 15% of as-is appraised value (including other sources of funds) Ø Purchase price must be no more than average home purchase price for jurisdiction.
NSP Due Diligence Ø All due diligence completed…. . Ø URA notices provided Ø Agreement to purchase made Ø Sale completed NOW WHAT? ? ?
Disposition Ø Rehabilitation Ø Full work write-up by qualified rehab advisor Ø Fully vetted contractor pool in place Ø Competitive bidding for work Ø Award contract – oversee work Ø Progress payments – Final Inspection/payment Home ready for sale
Disposition Setting Sale Price to Owner as Primary Residence Cost of Acquisition + Cost of Rehabilitation + “Reasonable” developer fee = Maximum Sale Price Maintenance of unit until sold is NSP eligible, but can’t be considered in setting price
Disposition Setting Sale Price to Owner as Primary Residence Closing must include documents to ensure affordability as appropriate to amount of NSP funds provided to unit See NSP Recipient Manual for affordability provision Requirements.
Disposition Setting Sale Price to Owner as primary residence Sale of Unit generates Program Income: CDBG Regulations @ 24 CFR Part 570. 500 “(a) Program income means gross income received by the recipient or a subrecipient directly generated from the use of CDBG funds…”
Georgia Department of Community Affairs Neighborhood Stabilization Program http: //www. dca. gov/communities/CDBG/programs/nsp. asp