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FORECLOSED HOMES ACQUISITION PROGRAM <br />Introduction <br />The City of Santa Ana seeks to insure that its neighborhoods are attractive and well <br />maintained. To that end the City has applied for and received $10 million in federal <br />Neighborhood Stabilization Program 2 (NSP2) grant funds. These funds may only be <br />used for the acquisition, rehabilitation and resale of foreclosed upon residential <br />properties located in the city's NSP2 target area. This Foreclosed Homes Acquisition <br />Program (Program) was created to utilize federal HOME Program and Community <br />Development Block Grant Program funds to supplement the NSP funds. Similar to <br />NSP2, the purpose of the Program is to facilitate acquisition, rehabilitation and resale of <br />foreclosed and abandoned homes, and to operate in compliance with the requirements <br />of the NSP2 Program. Existing contracts and procedures established by the City for <br />implementation of its NSP2 grant will also be maintained. When necessary, and when <br />circumstances allow, HOME or CDBG funds allocated for this program may be used in <br />conjunction with NSP funds. In the event of any conflict between NSP regulations and <br />the City's procedures and HOME regulations, the more restrictive will prevail. With <br />certain exceptions called out and treated in the governing statutes, NSP funds have the <br />same regulatory requirements as CDBG. <br />Eligible Use of Funds <br />HOME and CDBG funds may be used to meet the costs of acquisition, rehabilitation, <br />soft costs and developer fees associated with these transactions. <br />Eligible Properties <br />Vacant and foreclosed residential units or parcels suitable for residential development <br />that are located in the target area established by the city for its NSP2 grant are eligible <br />for this Program. When HOME funds are used, the HOME investment per unit shall not <br />exceed the maximum per unit subsidy limit as periodically published by the U.S. <br />Department of Housing and Urban Development (HUD). Whenever HOME funds are <br />used, the value of the property after rehabilitation may not exceed 95 percent of the <br />area median purchase price for that type of housing. The after-rehabilitation value <br />estimate will be completed prior to investment of the HOME funds. In accordance with <br />NSP requirements, homes must be acquired from the foreclosing party at a minimum <br />discount of 1 percent off the as-is appraised value. <br />Eligible Homebuyers <br />To be eligible whenever HOME or CDBG funds are used alone or in conjunction with <br />NSP funds to facilitate the activity, the purchasing household must qualify as low- <br />income. The City will use Section 8 procedures for evaluating household compliance <br />with applicable HOME or CDGB income limits. Effective December 1, 2011, maximum <br />household incomes as adjusted for household size were as follows: <br />EXHIBIT 3 <br />29A-21