NeighborhoodStabilizationProgram
NSP Overview NSP was created through the  Housing and Economic Recovery  Act of 2008 (HERA) Amended through the American...
Five Eligible Activities Establish financing mechanisms for the purchase and  redevelopment of foreclosed upon homes and ...
Some Key Provisions NSP funds can only be used in connection with housing-  -not commercial properties or public faciliti...
Some Key Provisions - continued Purchase Discount - foreclosed-upon properties  purchased with NSP funds must be acquired...
Areas of Greatest Need in N.C. Use of NSP funds restricted to areas of greatest need 23 counties in North Carolina ident...
Initiative Capital’s Program Line of credit product available to community  development corporations and other nonprofits...
Initiative Capital’s Program - continued Desired NSP participant developer skill sets –   ▫ Ability to target tracts seve...
Initiative Capital’s Program - continued                                                         Step 1: Purchase & sale  ...
ContactFor more information:Chris GonzalezHousing Program OfficerInitiative Capital(919) 835-6073cgonzalez@ncinitiative.org
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Initiative Capital's NSP Program for NC

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Initiative Capital's NSP Program for NC

  1. 1. NeighborhoodStabilizationProgram
  2. 2. NSP Overview NSP was created through the Housing and Economic Recovery Act of 2008 (HERA) Amended through the American Recovery and Reinvestment Act of 2009 (ARRA) Initially funded with $3.92 billion (NSP 1) $2 billion of additional funds provided through ARRA (NSP 2)
  3. 3. Five Eligible Activities Establish financing mechanisms for the purchase and redevelopment of foreclosed upon homes and residential properties Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon Establish land banks for homes that have been foreclosed upon Demolish blighted structures Redevelop demolished or vacant properties
  4. 4. Some Key Provisions NSP funds can only be used in connection with housing- -not commercial properties or public facilities Income Targeting--NSP funds must be used to benefit families whose income does not exceed 120% of area median income. Additionally, 25% of all NSP funds (30% in North Carolina) must be used to benefit families whose income does not exceed 50% of AMI
  5. 5. Some Key Provisions - continued Purchase Discount - foreclosed-upon properties purchased with NSP funds must be acquired at a discount to current market-appraised value. Current regulations provide that the discount should generally be 15% Sale of Homes - once redeveloped, previously foreclosed-upon or abandoned homes must be sold for an amount equal to or less than the cost to acquire and redevelop the home (including reasonable developer fees) Affordability - homes and residential properties made available through NSP must follow HOME rules for both initial and continued affordability
  6. 6. Areas of Greatest Need in N.C. Use of NSP funds restricted to areas of greatest need 23 counties in North Carolina identified by DCA Alamance, Brunswick, Buncombe, Cabarrus, Catawba, Cumberland, Dare, Davidson, Durham, Edgecombe, Forsyth, Gaston, Guildford, Iredell, Johnston, Mecklenburg, New Hannover, Pitt, Randolph, Rowan, Union, Vance and Wake
  7. 7. Initiative Capital’s Program Line of credit product available to community development corporations and other nonprofits Must be used to acquire and redevelop foreclosed-upon homes and residential properties Key product terms: ▫ 12 month term ▫ Maximum loan amount $1,000,000 ▫ Can be subordinated to traditional financing ▫ Flexible in order to make projects with the potential for significant impact work
  8. 8. Initiative Capital’s Program - continued Desired NSP participant developer skill sets – ▫ Ability to target tracts severely affected by foreclosures ▫ Develop a rehabilitation plan that generates the greatest neighborhood impact using NSP and other resources ▫ Successful and extensive track record in residential rehabilitation work ▫ Organizational capacity to attract eligible homeowners and sell foreclosed properties ▫ Experience in management, compliance and reporting of CDBG funds or other federal funding programs
  9. 9. Initiative Capital’s Program - continued Step 1: Purchase & sale of ten homes (acquisition 1st mortgage price includes purchase Bank REOBank loan: $500,000 discount) Portfolio CDC borrows $1 million to Step 2: Contracts for redevelopment of homes (including priority for inclusion of purchase, green building technologies, materials redevelop and sell and systems) ten foreclosed- upon homes Contractors 2nd mortgage IncomeInitiative loan: $500,000 Step 3: Sale of redeveloped homes to eligible Capital income eligible borrowers. - Sale price will not exceed cost borrowers of acquisition plus development costs - Sale structured to meet HOME requirements for initial and continued affordability, as well as all other program requirements
  10. 10. ContactFor more information:Chris GonzalezHousing Program OfficerInitiative Capital(919) 835-6073cgonzalez@ncinitiative.org

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