HomeMy WebLinkAbout2009 Resolution No. 034• RESOLUT ION NO . 31-
SER[ES OF 2009 --
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RES OLUT ION AUT HORIZING THE CITY OF ENG LEWO OD, CO LORADO , TO FILL' AN
APPLICATION W,TH THE COLORA DO DIVISION OF HOUS ING FOR A PORTION OF
THE .',RAPAHOE COUNTY 'S ALLOCAT ION OF FEDERAL NE IGHBORHOOD
STAB'UZATIO N PROGRAM FUNDS .
WHEREAS. the Englewood City Coun ci l has approved reso lut ions alm os t annu all y sin ce
1977 au thori zi ng applications fo r fed eral funding to support vari ous housin g project s; and
WHEREAS, a Letter of Int ent to Apply for the Neighbo rh ood Sta bil izati on Program (NSP)
was sent by the Cit y to the Colorado Division of Housing on October 30, 2008; and
WHEREAS, the level of fo rec los ures in Co lorado has pl aced an increa sed burden on the
econom y and affected famili es; and
WHEREAS , the Co lorado Department of Local Affairs, Divi sion of Housing (CDOH) will use
the NSP funds for lhe purpo ses intended -to promote neighborhood sl.a bili za ti on in those area s
ex periencing high fo reclosures and high ra tes of prope rty va lu e depreciation ; and
WHEREAS, local government s will be re sponsib le for providing or CO!lrd inating th e
following roles and services : l) Project/partner management ; 2) Acquisition ; 3) Rehabilitation; 4)
Inspections; 5) Property mano gement; 6) Realtor/lender liai so 11; 7) Morketin g properti es; 8)
Property sa les· 9) Homebu yer co unse)ing ; I 0) P1 Jvisi on of an cillary serv ices -appra isa l, title
wo rk. rea lt ors, conuactors, etc.; and 11 ) Admi nistratio n, co mpliance , monitoring an d rep0rtin g;
and
WHEREAS , the City 's applicatio n will be us ed to initially acquire 4 si ngle-fornil y vaca nt
foreclosed propert ies that ore sca ttered throughout the City of Englewood in eligib le census
tracts: and
WHEREAS , eac h property will be rehabbed to th e ex tent necessary to ac hi eve complian ce
with local laws and codes inc lu ding energy effic iency wo rk items an d th en so ld as
owner/occupied units to fam ilies ·hat are at or bel ow 120% of the AMI ; and
WH EREAS , to compete in th e Neighborhood Stabilization Program local governments must
submit an app li cation; and
WH ERE AS, the City of Englewood ha s received a notice of fund ava il ab ilit y; and
WHEREAS, the City of Englewood, Co lorado, desi res 10 app ly for these ~mds through th e
Co lorado Department of Local Affa irs, Divisi on of Housing (CDO H) fo r these NS P fund s.
NOW, THEREFORE , BE IT RESOLVED BY THE CIT Y COUNC [L OF THE CITY OF
ENGLEWOO D, COLORADO, THAT:
Section I. The City of Engl ewood, Co lorado, is hereby authori zed to fi le an opp li cat ion fo r
Neigh borhood Stabilization Progra m (NSP) funds to promote nei ghborhood stabiliz ti on in the
Ci ty.
Sect ion 2. The Mayor and Cit y Clerk are authorized to sign and attest all necessary fonns ,
document s, assuran ces and certifications for the Neighborhood Stabiliz.,tion Program (NSP)
application for and on beh alf of the Cit y Council and th e City of Englewood.
ADOPTED AND APPROVED thi s 23,. day of March , 2009 .
es K. w'ood~ard , Mayor & ",J,,Q
I, Loucrishia A. Ellis , City Clerk for )jJe,iCity of Englewood, L'
abo\'e is a true copy of Resolution Ne.~. Series of 200
y
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COUNCIL COMMUNICATION
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Dat e: Age nda Item : Subject :
March 23, 2009 11 C ii A Resoluti on Approving th e Neighborhood
Stabilization Program Application
Initiated By: I Staff Source :
Commu nity Development D epartm ent Jan et Grimmett, Housin g Fi nance Specialist
COUNCIL GOAL AND PReVIOUS COUNCIL ACTION
City Council has approved resol uti ons almost annually sin ce 1977 to file appli ca tions for Federal
funding to support va ri ous housi n g projects. A Letter of Intent to Apply for th e Neighborhood
Stabilization Program was sen t c,y staff to the Colorado D ivision of Housing on October 30, 2008.
RECOMMENDED ACTION
Staff recommends th at Council approve a resolution auth orizing staff to apply to the Colorado
Divisio n of Housing for a portion o! the Arapahoe County's allocation of Fede ral N eigh b orhood
Stabi lizati on Progra m fu nds .
BACKGROUND, ANALYSIS , AND ALTERNATIVES IDENTIFIED
In 2008, the Federal gove rnm ent passed the H ous ing and Econ omi c Recovery Act (HERA), the first
n ew legi slation in a gene rati on for housi ng and economic deve lopment. HERA appropriat ed $3.92
billi on for th e Neighborhood Stabilizatio n Program (NS P) tu support the acq uis ition, reha bilitation
or demoli tion of fo reclosed and abandoned prop erties. The Sta te of Colorado will aJ minister $37.9
milli on in NSP fu nds .
The$e funds are separa te from NSP funding auth orized by the American Re covery and
Reinvestment Act sign ed into law in February 2009. A dditional funds may be available through th e
2009 Act.
Th e l evel of foreclosures in Colorado has placed an increased burden on the econ omy and affected
famili es. H ousing agencies and programs are also strained as the y w,)rk' to assi st fami li es and
individuals caught in th is na!1o nal tragedy. Colorado Department of [, .Al Affairs, Division of
Housing (CDOH) will use th e NSP funds for the purposes intended-to promote neighborhood
sta bilization in those areas expe ri enci ng hi gh foreclosures and high rate ' ": pru;:,erty va lue
depreciation.
The NS P Ac tion Plan outlines th e strategic role of the Stat e of Colorado to achi e •e three major
goals:
1. Assist in stabi li zing property va lu es in targeted co mmunities by dec reasing the rate of
decline in property va lu es in th e nin e c ounties and two cities w ith u ,e high es t
foreclos ure rates .
2. Purchas e and re habil11a 1e aband oned or foreclosed h ousi ng in th e highes t impa cted
areas qui ckly 10 lesse n th e ex •ended negati ve impa c t o f foreclosed and bligh ted
properti es in neighbo rh ooas .
3. Acquire abandoned or fo reclosud properti es to prov,de housing for lh e 111 0,1 seve rel1•
cost burden ed househ ol ds, remaining affordable f~· the greates t period of l ime.
The fo ll ow ing are eli gibl e NSP ac tivities all owed in the State of Colorado NSP Subs tantia l
Amendment:
1. Purc hase and Re habilitate Abandoned or Fo reclosed M ulti family Properties
2. Pur chase and Re',ab ilitate Abandoned or Fo reclosed Sin gle Family Pr op erti es
3. Acquisi ti o n an d Demolition of Blighted Structures
4. Pre-and post-purchase Homebuyer Counseling
S. Estab li sh /Coordinate Funding Mechanisms
6. Administration
Th e State of Colorado, manag ing jurisdicti ons and program implem en ters mu st fo ll ow pro gram
requi reme nts defined b y HUD w h en ca rry in g out th e NSP plan. While th e NSP is funded through a
specia l allocation, similar to th e Community Development Bl ock Grant (CDBG) progra m, so m e
program requirements vary fr om existing CDBG regulations.
Key NSP requirements include:
• NSP funds must be expend ed wi thin 18 months of th e date of receipt.
• A multi-ye ar reinvestment per iod with a term endin g Jul y 30, 2013.
• Households p urchas ing r,rope rti es must und ergo a minimum of 8 hours of HU D-a pproved
he,,neownership co un se lin g.
I 00% of all funds shall b e us ed to serve fam ili es w hose i ncom e does no t exceed 120% of
Area Median In co me (AM I).
• 25% of all funds shall be used to serve families whose income d oes n ot exceed 50% of
AM I.
• Rehab1l itati 0n Standards must be es tablished (minimum o f H o usin g Q uality Standa rds and
local co des, with gree n building and en ergy and water effic iency enco urage d).
• Sa le prices of ab and on ed or foreclosed homes purchased o r redevelop ed and so ld '.o
individuals as a primary res id ence shall be equal to o r less th an th e cos t to acq uire and
redevelop th e home.
Purc hase prices of h om es ca n include closing C<,s ts.
Appraisals are req uired o n all ac qui siti ons using NSP funds .
• Foreclosed h om es sh all be purc hase d at a di scount of at least 5% fr on, th e curren t market-
appraise d va lu e. Th e average discoun t during th e 18 month period shall b e at leas t 15%.
• Administrative fees up to 2% for non-Direct and reasonable developer fees to opera te th e
NSP are allowed. All o th er funds must 1,e recycl ed back into th e program until Jul y 30,
20 13 . After that time period, all funds must be return ed to the Federal Treasu ry.
Local governments w ill be respo nsibl e fo r providing or coordinating th e fo ll owing roles and
services: 1) Project/partn er managemen t; 2) Acq ui si ti on; 3) Rehabi litati on; 4) Inspect ions; 5)
Property management; 6) Re•lt or/lender li aison ; 7) Marketin g p ro p erties; 8) Pr ope rty sa les;
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9) H om ebLl)'er co un se lin g; 10) Prov ision of anci ll ary services -appraisa l, lil le work, realt ors ,
co ntra ctors , etc.; and 11 ) Admini stra tion, co mplian ce, monit oring and repo rting .
The Stal e of Colorado ha s allocated 10 Arapah oe Coun ty a 101al of $2 ,129,379 for NSP ac tivi ties.
Arapahoe Coun ty has reques ted t~.at th e Sl ate o f Colorado adminis ter th ei r all oca ti on . The City of
Engle wood musl submi t an ap pli ca ti o n to CDOH in order to re ceive any porti on of th e Arapa hoe
County NSP Jlloca tion .
The City's app li ca ti on w ill be for approxima tely $1 milli on to be used to init ia ll y acq uire fo ur (4)
single-famil y vaca nt foreclosed properties th at are sca tt ered through out the City of Englewood in
eligible census trac ts. The project will use th e expertise of a loca l rea ltor, if needed, to acqui re each
property at a min imu m 5% to 15% ,;1scou nt of th e cu rr en t appraised va lu e. Each property wi ll be
rehabbed to th e ex 1en t necessary to ac hi eve compliance w ith local laws and codes including
energy efficien cy work items . The properties wi!I then b e sold as owner/occupied units to families
th at are at or below 120% of th e AMI wi th pri ority given to famili es at or bel ow 50% AM I w ho are
parti cipa tin g in loca l .'am ily self-sufficiency programs. It is hoped th at at leas t on e home will b e so ld
to a family in this in co m e range to ass ist with m eeting th e 25% NSP requirem ent.
Partnerships w ith loca l banks w ill be used to leverage th e acq uisiti on and /or rehabilitation costs of
th e pro perties . This leve ra gin g w ill recycle th e funds faster in order max imiz e th • all impact of
the proj ec t on the co mmunity. Th ese leve raged loans w ill be finan ced thr our l ousin g
Rehabilitation Fund, Fund 46, and w ill be repa id to th e banks at the tim e of su1 e to th e qualified
buyers. Th e overall goal of the project is to acqui re, rehab and se ll a mi ni mum of 12 to 15
properties over a fo ur-yea r p eriod.
All projects are subject to addi ti onal review by th e Arapahoe County Com missio ners, CDOH
ad ministrat ors, an d th e Col orad o State Housing Boa rd . The fu ndin g leve l may cha nge based on
th ose reviews.
FINANCIAL IMPACT
Exis ti ng Community Deve lopment staff has th e required ex pe rt ise to acq uire foreclosed properti es,
provide re habilitation, and se ll th e properties to eligi ble buyers . Th e Housi ng Reh abilitation Fund,
Fund 46, w ill be use d to fi nance th e p roj ect. Es tim ated rehab cos ts ma y be approx im ately $30,000
per h ouse. Rehab funding is ava il able through th e ex istin g City of Engle wood H o usin g
Rehabilitation Fu nd l ine of credit with U.S. Bank . All J tl,er expe nses w ill be covered by th e NSP
grant. All proceeds from the sa le of p roperties w ill be reimburse d to Fund 46 until th e program
expires Jul y 30, 2013.
LIST OF ATTACHMENTS
Resolution