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NSP (3) <br />February 22, 2011 <br />Page 2 <br />Fifty percent of the funds must be expended within two years of the signed grant agreement with <br />100% expended within three years. Consistent with prior NSP allocations, funds may be used to <br />benefit households with incomes up to 120% of area median income; but a minimum of 25% of <br />these funds, or $366,029, must be spent on activities benefitting very low-income households <br />(50% AMI). <br />Currently, Santa Ana has approximately 337 foreclosed properties and 546 properties with a <br />recorded Notice of Default. Due to additional constraints instituted by HUD to stabilize <br />neighborhoods and concentrate funds, the City is required to target an area significantly smaller <br />than in prior NSP applications. Careful consideration was given as to our ability to significantly <br />impact the foreclosure problem in different neighborhoods with the limited funds allocated in this <br />third round. After analyzing foreclosure data from public records and the location of homes <br />preserved with the first two rounds of grant funds, it is recommended that a portion of the City <br />identified in Exhibit 1 would greatly benefit from higher concentration of stabilization funds. <br />In order to receive the funds, the City must adopt a Substantial Amendment to its 2010-2011 <br />Consolidated Plan Annual Action Plan (Exhibit 2). The Annual Action Plan is the document <br />whereby the City formally applies to HUD for its annual federal grant allocations (CDBG, HOME, <br />ESG, and HOPWA) and describes how those grant funds will be used. <br />The regulations identify five allowable programmatic uses for the purchase of foreclosed or <br />abandoned homes: <br />1. Establishment of financing mechanisms such as soft seconds and shared equity loans. <br />2. Purchase and rehabilitation for the purpose of selling, renting or redeveloping. <br />3. Establishment of a land bank for the purpose of assembling, managing and ultimately <br />disposing of vacant land in a manner that will help stabilize neighborhoods and encourage <br />re-use or redevelopment of urban land. <br />4. Demolition of blighted structures. <br />5. Redevelopment of demolished or vacant properties to be used for a public purpose and/or <br />new construction. <br />The proposed NSP programs, budgets, and target goals are identified in the table below. <br />20A-2