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State of Delaware
Notice of Public Comment
Substantial Amendment to the Consolidated Plan 2008 Action Plan
Neighborhood Stabilization Program (NSP)
Substantial Amendment for Kent County

Congress passed Public Law 110-289, the Housing and Economic Recovery
Act of 2008 (HERA), which created the Neighborhood Stabilization Program (NSP), which provides $3.92 billion to states, counties and cities in order to acquire, rehabilitate, demolish and redevelop foreclosed and abandoned residential properties. On October 6, 2008, the U.S. Department of
Housing and Urban Development (HUD) published the final notice of allocation formula and program regulations in the Federal Register Vol. 73. No.194.

Kent County has asked the Delaware State Housing Authority, to reallocate their NSP budget funds from “Use A – Financing Mechanisms” to “Use B – Purchase and Rehabilitation”. The reallocated funds will be used to purchase and rehabilitate two additional foreclosed homes for eligible NSP homebuyers. Kent County has found that downpayment and closing cost assistance is not needed to make their NSP homes affordable to qualified households under the NSP
program. This is due to the Kent County NSP program utilizing the land trust model through partnership with the Diamond State Community Land Trust (DSCLT) whereby the NSP subsidy is applied to the shared equity component of the property. This lowers the purchase price of the home while maintaining permanent affordability.

This amendment provides Kent County the ability to fully comply with the NSP on meeting the obligation deadline, while simultaneously increasing the number of units they will be able to purchase, rehabilitate, and sell to eligible NSP homeowners.

The comment period will run from 8:00 a.m. August 11, 2010 through 4:00 p.m. August 31, 2010. The draft Substantial Amendment is available for public inspection at regional public libraries, DSHA branch offices and all regional county offices. It is also available on DSHA’s website at ww.destatehousing.com or by phoning 302-739-4263.

Written comments may be sent to Valerie Miller, Delaware State Housing Authority, 18 The Green, Dover, DE 19901. All comments received will be addressed in the Citizen Participation and Public Comment Section of the NSP Kent County Substantial Amendment.

If you have a vision, hearing, or physical impairment that requires accommodation in the reading of this notice, DSHA will provide appropriate assistance. To schedule assistance, please call (302) 739-4263, Ext. 222 between the hours of 8:30 a.m. to 4:00 p.m., Monday through Friday. If you have a hearing impairment, DSHA's TDD number is (302)739-7428 during the same
hours.

DELAWARE STATE HOUSING AUTHORITY
NEIGHBORHOOD STABILIZATION PROGRAM (NSP) SUBSTANTIAL
AMENDMENT FOR KENT COUNTY LEVY COURT

Jurisdiction(s): State of Delaware
Jurisdiction Web Address:
www.destatehousing.com
NSP Contact Person: Valerie A. Miller
Address: 18 The Green
Dover, DE 19901
Telephone: (302) 739-4263
Fax: (302) 739-2416
Email: valerie@destatehousing.com

INTRODUCTION:

Congress passed Public Law 110-289, the Housing and Economic Recovery Act of 2008 (HERA), which created the Neighborhood Stabilization Program (NSP), which provides $3.92 billion to states, counties and cities in order to acquire, rehabilitate, demolish and redevelop foreclosed and abandoned residential properties. On October 6, 2008, the U.S. Department of Housing and Urban Development (HUD) published the final notice of allocation formula and program regulations in the Federal Register Vol. 73. No.194.

HUD devised a formula to allocate funds based on the number of foreclosures, sub-prime and delinquent loans in each jurisdiction. Hence, a statutory requirement was issued that each state receives a minimum allocation of 0.5% of the total $3.92 billion, which equates to $19.6 million.

The purpose of the NSP is to assist communities that have been, or are likely to be, affected by foreclosed and abandoned properties, while providing affordable rental and homeownership opportunities to households at or below 120 percent of Area Median Income (AMI) in areas of greatest need. Further, 25 percent of the total NSP funds must be targeted to provide homeownership or rental housing to households whose incomes do not exceed 50 percent of AMI. The Delaware State Housing Authority (DSHA) will implement the NSP funds and ensure they are delivered expeditiously to the areas of greatest need across the entire state. DSHA will use the NSP funds for the purposes intended – to promote neighborhood stabilization where subprime lending, foreclosure and housing vacancies have negatively affected the housing market.

This document is a substantial amendment to the FY2008 Action Plan submitted by the State of Delaware to HUD for the NSP amending Kent County’s NSP scope of services and budget. This amendment outlines Kent County’s request to use transfer funds under “Use A” to eligible “Use B” as part of their
NSP plan.

Eligible uses of the NSP funds must meet a Community Development Block Grant (CDBG) national objective as stated in Title 1 of the Housing and Community Development Act of 1974, which states the eligible activities, must benefit low- and moderate-income persons. For the purposes of these funds,
HUD also created a middle-income category for households between 80% and 120% of AMI. The eligible activities for the NSP are as follows:

Use A:

Establish financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties, including such mechanisms as soft-seconds, loan loss reserves, and shared-equity loans for low-, moderate- and middle-income (LMMI) homebuyers;

Use B: Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent or redevelop such homes and properties;

Use C: Establish land banks for homes that have been foreclosed upon;
Use D: Demolish blighted structures; and
Use E: Redevelop demolished or vacant properties.

KENT COUNTY'S PROPOSED AMENDMENT

The purpose of this amendment is to revise the original budget for Kent County so funds can be used in the appropriate categories to acquire, rehabilitate, and sell foreclosed homes and to meet the Neighborhood Stabilization Program (NSP) on targeting timeliness of obligation. Kent County has requested to transfer their funding under “Use A” to “Use B”, to the Delaware State Housing Authority through a written letter.

Kent County would like to reallocate $440,000 from “Use A” to “Use B”. These funds will be used to purchase and rehabilitate two additional foreclosed homes for eligible NSP homebuyers. Kent County has found that downpayment and closing cost assistance is not needed to make their NSP homes affordable to qualified households under the NSP program. This is due to the Kent County NSP program utilizing the land trust model through partnership with the Diamond State Community Land Trust (DSCLT) whereby the NSP subsidy is applied to the shared equity component of the property. This lowers the purchase price of the home while maintaining permanent affordability. Additionally, this request will ensure that Kent County will be to able fully comply with the legislatively mandated obligation deadline of September 20, 2010.

Kent County’s budget request is summarized below:

Kent County

Purchase & Rehab
Number 13
Budget - $2,375,000

Performance Measure -
3 homes below 50%
AMI; 2 homes 51-80%
AMI; 8 homes 81-
120% AMI

Admin
Number 0
Budget - $125,000

Total
Number 13
Budget - $2,500,000

This amendment provides Kent County the ability to fully comply with the NSP on meeting the obligation deadline, while simultaneously increasing the number of units they will be able able to purchase, rehabilitate, and sell to eligible NSP homeowners.

For additional information regarding the Delaware NSP, please visit www.NSPDelaware.org

 

 

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