80B - NEIGHBORHOOD STABLIZATION PROGRAM

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DRAFT G. NSP INFORMATION BY ACTIVITY (COMPLETE FOR EACH ACTIVITY) (1) Activity Name: Program 2: Acquisition and Rehabilitation of Foreclosed Single Family Homes (2) Activity Type: (include NSP eligible use &CDBG eligible activity) NSP Eligible Uses: Financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties (HERA,2301 (c)(3)(A) CDBG: 24 CFR 570.201 (a) Acquisition, 201(b) Disposition, 201(i) Relocation, 201(n) Direct homeownership assistance; 202 Eligible rehabilitation and preservation activities for homes. (3) National Obtective: (Must be a national objective benefiting low, moderate and middle income persons, as defined in the NSP Notice-i.e., < 120% of area median income). LMMH -Expected to benefit primarily low, moderate and middle income (50 percent to 120 percent of area median) purchaser-occupants. (4) Activity Description: Include a narrative describing the area of greatest need that the activity addresses; the expected benefit to income-qualified persons; and whether funds used for this activity will be used to meet the low income housing requirement for those below 50% of area median income. This program will he operated by contracted intermediaries selected through a Request for Proposals (RFP) process. These intermediaries will use NSP funds, or ideally other funds available to them, to acquire and rehabilitate foreclosed or abandoned single family residences. Upon completion the homes will be marketed and sold to households with incomes at or below 120 percent of the area median. Sales prices will be established for both. low- and moderate-income households, and in accordance with the methodology established by the California Health and Safety Code with modifications designed to increase their affordability. For homesiloffered for sale to low-income households, the affordable sales price will be based on 30 percent of the monthly income of a household at 65 percent of area median. For homes offered for sale to moderate-and middle-income households, the sales price will be base on 30 percent of the monthly income of a household at 100 percent of area median income. For those receiving such assistance, continued affordability will be assured through forty five year deed restrictions and promissory notes requiring repayment of the difference between the sales price and the fair market value. Additionally, the loans will carry 3 percent interest rates, which interest rate will be forgivable over the forty five years. The City will insure that this activity benefits income qualified households by limiting eligibility to those with incomes at or below 120 percent of area median income. Given the significant upfront and long term costs associated with homeownership the City does not anticipate that this program will serve any very low-income households, and it will not deed restrict any homes purchased through this program to occupancy by very low- 16 80B-26