NEIGHBORHOOD STABILIZATION PROGRAM APPLICATION

Transcription

1 CITY OF NEWNAN, GEORGIA NEIGHBORHOOD STABILIZATION PROGRAM APPLICATION For Coweta County, Georgia Anna Clere 1/5/2009 Through collaboration with Newnan Coweta Habitat for Humanity (NCHFH) and Housing Authority of Newnan (HAN), the City of Newnan and Coweta County jurisdictions propose to take direct action to halt the rapid decline of Coweta County housing markets due to foreclosure and abandonment, through community reinvestment. The City of Newnan, as lead applicant, will apply for and use allocated NSP funds through an integrative approach, entering into a collaborative agreement with NCHFH and HAN, to secure safe, decent and affordable homes and neighborhoods by providing affordable homeownership and rental opportunities for low moderate and middle income families and individuals living in Coweta County. 1

2 Table of Contents Neighborhood Stabilization Program... 4 Application for Reservation of Funds... 4 State of Georgia... 4 Action Plan... 4 NEIG HBORHOOD STABILIZATION PROGRAM FUNDING PROPOSAL SUMMARY... 5 A. AREAS OF GREATEST NEED... 9 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) STATISTICS (Source: 9 PO LICY MAP STATISTICS ( 16 OTHER DATA SOURCES AND INFORMATION B. DISTRIBUTION AND USES OF FUNDS Targeted Areas Implementation of NSP funds Newnan-Coweta Habitat for Humanity (NCHFH) Proposed NSP loan recipient Housing Authority of Newnan (HAN) Proposed NSP Grant recipient NCHFH Community Homeownership Educational Workshops C. DEFINATIONS AND DESCRIPTIONS Blighted Property Affordable Rents Affordable Homeownership Opportunities Affordable Rental Opportunities Rehabilitation Standards D. LOW INCOME TARGETING Total Coweta County NSP Allocation Amount: $2,124, Summary: E. ACQUISITIONS AND RELOCATION $1,399, Housing Units will be purchased with NSP forgivable loan funds by NCHFH $599,634 6 Housing Units will be purchased with NSP grant funds by HAN

3 F. PUBLIC COMMENT G (1). NSP INFORMATION BY ACTIVITY (Complete for each Activity) The NSP five-year forgivable loan Continued Affordability G (2). NSP INFORMATION BY ACTIVITY (Complete for each activity) Family Self-Sufficiency Program Individual Saving Escrow Account Homeownership Workshop Classes Continued Affordability Case Management Services NSP Income Revenue G (3). NSP INFORMATION BY ACTIVITY (Complete for each activity) H. BUDGET SUMMARY Budget Codes Georgia Department of Community Affairs NSP Program Budget Analysis APPENDIX FORGIVABLE LOAN LANGUAGE RELEASED BY HUD FOR NON-PROFIT ORGANIZATIONS APPENDIX FAMILY SUPPORT WORKSHOP FLYER APPENDIX COWETA COUNTY MAP

4 Neighborhood Stabilization Program Application for Reservation of Funds State of Georgia Action Plan Jurisdiction(s): Coweta County & City of Newnan (submitted by): City of Newnan Jurisdiction Web Address: (URL where NSP Substantial Amendment materials are posted) NSP Contact Persons: Leslie Merriman, Executive Director, Newnan-Coweta Habitat for Humanity PO Box 2607 Newnan, GA Sandra Strozier, President and CEO Housing Authority of Newnan 48 Ball Street, Newnan, GA Tracy S. Dunnavant, Planning and Zoning Director, City of Newnan 25 LaGrange Street Newnan, Georgia (770) ext. 4 TDunnavant@cityofnewnan.org L.Theron Gay, County Administrator 22 East Broad Street, Newnan, GA tgay@coweta.ga.us THE STATE OF GEORGIA WILL ACCEPT REQUESTS FOR RESERVATION OF FUNDS UNDER TITLE III OF THE HOUSING AND ECONOMIC RECOVERY ACT (HERA) SEC ENTITLED EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND FORECLOSED HOMES. 4

5 NEIGHBORHOOD STABILIZATION PROGRAM FUNDING PROPOSAL SUMMARY Newnan-Coweta Habitat for Humanity (herein after referred to as NCHFH) and Housing Authority of Newnan (herein after referred to as HAN) respectfully request the joint application from the City of Newnan and Coweta County for the use of Neighborhood Stabilization Funds (herein after referred to as NSP) funds directly allocated to Coweta County by the Department of Community Affairs (herein referred to as DCA). Coweta County has received a direct allocation of funds from the DCA, of NSP funding in the proposed amount of $2,124,021 of which $413,755 has been allocated to the jurisdiction of the City of Newnan, and $1,710,266 the jurisdiction of Coweta County (current proposed amount appendix 2 of the proposed DCA action plan to HUD, December Neighborhood Stabilization Program funding intended purposes: The purpose of NSP funds is to address the negative ramifications of the housing foreclosure crisis that occurred over the past five years due to subprime mortgage lending which nationally resulted in significant numbers of homeowners entering into foreclosure and entire neighborhoods becoming vacant and abandoned. According to data collected by the DCA, Coweta County ranked in the upper twenty-fifth percentile for being an area of high risk for housing abandonment due to foreclosure in the state of Georgia. Community stabilization through collaboration: Through collaboration with NCHFH, and HAN, the City of Newnan and Coweta County propose to take direct action to halt the rapid decline of Coweta County housing markets due to foreclosure and abandonment, through community reinvestment. The City of Newnan and Coweta County will jointly apply for and use allocated NSP funds through an integrative approach, entering into a collaborative agreement with NCHFH and HAN, to secure safe, decent homes and neighborhoods by providing affordable homeownership and rental opportunities for low-moderate and middle income families living in Coweta County. Five year forgivable loan recipient: The City of Newnan and Coweta County will disburse a portion of NSP grant funds received to NCHFH. NCHFH will receive these funds under a five-year forgivable loan agreement, in accordance with forgivable-loan language released by HUD, November 11, After five years, contingent upon NCHFH upholding grant regulations the NSP loan will be forgiven and revenue generated from NSP funds will not have to be returned to the federal treasury, after the NSP program is completed, but will be continued to be used by NCHFH to provide safe, decent and affordable home mortgages for lowincome families living in Coweta County. No less than fourteen low-income families served: 5

6 NCHFH will use NSP funds received to purchase and rehabilitate no less than fourteen foreclosed, abandoned, and vacant properties in Coweta County. Homeownership opportunities NCHFH will then use the properties purchased with NSP funds to provide affordable financing mechanisms through homeownership opportunities for low-income families and individuals living in Coweta County. NSP Grant sub-recipient The City of Newnan and Coweta County will disburse a portion of NSP funds received to HAN. HAN will receive these funds as an NSP grant subrecipient. HAN will use NSP funds to purchase REO property in Coweta County and then use the properties to provide affordable rents to low-income families and individuals living in Coweta County. Families and individuals served by NSP funds will have the opportunity to be enrolled in HAN s Neighborhood Stabilization Program - Family Self- Sufficiency Program for a period of up to four (4) years from the start date of the NSP in Coweta County. In accordance with prior permission granted by HUD to HAN, NSP revenue will not have to be returned to treasury after the NSP ends, but will be continued to be used by HAN to provide affordable rental options for low-income families and individuals in Coweta County. Administration Requirements No more than 6% percent of NSP funds will be allocated toward necessary administrative costs incurred by NSP funding. Administrative funds will primarily be used to hire a NSP grant administrator for five years, and a NSP Case Management worker for HAN NSP activities. $1,399,146 - Proposed outline plan for NSP Grant forgivable loan recipient, Newnan-Coweta Habitat for Humanity: NCHFH will apply for and use $1,399,146 that DCA has allocated to stabilize the Coweta County community. All funds will be obligated within an 18-month period, beginning when funds are awarded. $1,399, Housing Units will be purchased with NSP forgivable loan funds: NCHFH will purchase no less than twenty foreclosed and abandoned properties costing no more than $99,939 each (total funds $1,399,146). NCHFH will rehabilitate all NSP funded properties to acceptable living standards, in compliance with the DCA rehabilitation standards referenced in section (C)(4) of the Proposed Substantial Amendment Plan. 6

7 14 affordable homeownership opportunities for low-income families: Fourteen housing units will be purchased and rehabilitated by NCHFH. NCHFH will use all housing units to provide affordable financing mechanisms through homeownership opportunities to pre-qualified lowincome families earning less than or equal to 50% of Area Median Income. $599,634 - Proposed Outline Plan for Sub-recipient grant agreement Housing Authority of Newnan: Housing Authority of Newnan will apply for and use $599,634 of the funds that DCA has allocated to stabilize the Coweta County community. All funds will be obligated within an 18 month period, beginning when funds are awarded. $599,634 6 Housing Units will be purchased using NSP funds HAN will purchase six housing units with NSP funds, costing no more than $99, 939 in order to provide affordable financing mechanisms for prequalified low-income families making less than 50 percent of the Area Median Income. $125,241 Proposed Administration Requirements: No more than 6% percent of NSP funds will be allocated toward necessary administrative costs incurred by NSP funding. Administrative funds will primarily be used to hire a NSP grant administrator for five years, and a NSP Case Management worker for HAN NSP activities. $100,000 NSP Grant Administrator Salary: A NSP Grant Administrator will be hired on a part-time contractual basis for a period of five years at the cost of $20,000 per year (total cost $100,000). The NSP Grant Administrator will work closely with NCHFH and HAN to ensure that NSP regulations are upheld. The Grant Administrator will be responsible for disbursing drawdown of funds, NSP auditing and reporting requirements. NCHFH and/or HAN will provide the NSP Grant Administrator office space, at no additional cost to the City or County. $20,000 HAN Case Management Services HAN will hire a Case Manager, on a part-time contractual basis, to work closely with families served using NSP funding, for a period of four years at $5,000 per year (total cost $5,000). The case manager will work closely with each family renting a NSP purchased home, to ensure that they successfully participate in and complete HAN s Family Self-Sufficiency Program. $5,241 Administrative expenses The remaining $5,241 will be used for any necessary administrative, transportation, travel or legal costs associated with NSP grant activities. 7

8 NCHFH Community Homeownership Educational Workshop All low-income families benefiting from NSP funded housing units, will be required to attend mandatory Department of Housing and Urban Development (HUD) approved Community Homeownership Educational Workshop classes, provided annually by NCHFH. All classes will be provided free of charge and open to the public. Workshop classes will cover subjects such as (but not limited to) household budgeting skills, home repair and improvement skills, financial organizational skills, mortgage information, best neighbor practices, homeowner and renters legal rights and obligations, credit-score and reporting awareness, and basic personal savings strategies. 8

9 A. AREAS OF GREATEST NEED Provide summary needs data identifying the geographic areas of greatest need in the applicant s jurisdiction. Note: The local jurisdiction must identify the area(s) of greatest need(s) and provide analysis of contributing factors that created the need described. Response: The purpose of the NSP grant is to address the negative ramifications of the housing foreclosure crisis that occurred over the past five years due to subprime mortgage lending which nationally resulted in significant numbers of homeowners entering into foreclosure and entire neighborhoods becoming vacant and abandoned. Coweta County is made up of diverse population groups with a wide range of income levels. Statistics gathered from independent sources indicate that NSP funding would greatly benefit Coweta County if focused in the neighborhoods located within the City of Newnan and East Newnan Census Designated Place (CDP), Grantville City and Moreland town. These areas are located within United States Zip Codes 30263, and and include all or part of Census Tract Areas 1708, 1707, 1706, , , and The following data shows that communities located in the City of Newnan and East Newnan CDP, Grantville City and Moreland Town in Coweta County are at high risk for fast developing into socially and economically disadvantaged communities. These are the areas of greatest need in Coweta County for NSP funding. This is due to a combination of high estimated foreclosure percentage rates, high percentage of previous sub-prime lending practices, continually rising unemployment rates and a high percentage of households with income well below 50%, 80% and 120% of the area median income (AMI). DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) STATISTICS (Source: Data available from the Department of Housing and Urban Development (herein after referred to as HUD) shows census tract area codes (1708,1707, 1706, , and 1702) located in and around the city of Newnan and East Newnan CDP, Grantville City and Moreland town are areas that will benefit the most from NSP funds. These areas consistently show to have some of the highest percentage of foreclosures, low-income households, and highest percentage of sub-prime lending practices in Coweta County. Data for Coweta County gathered from HUD in November of 2008 shows: SUBPRIME MORTGAGE LENDING 9

10 One fifth to one third of all mortgage loans made in census tract areas 1708,1707,1706,1705,170401,170301,1702 and 1701 during 2004 to 2006 were high cost subprime mortgage loans. Over one fifth of all mortgage loans made in Newnan City and East Newnan CDP during 2004 to 2006 were high cost subprime mortgage loans. Over one quarter of all mortgage loans made in Grantville and Moreland during 2004 to 2006 were high cost subprime mortgage loans. HIGH RESIDENTIAL VACANCY RATE REPORTED BY UNITED STATES POSTAL SERVICE 3.3% of all homes in Coweta County are estimated by the United States Postal Service to stand vacant for at least 90 days or more. Census Tract data for Newnan city and East Newnan CDP, Moreland and Grantville show estimated 90-day vacancy rates that exceed the county 3.3 percent vacancy rate. Furthermore, census tract area 1707 shows an estimated vacancy rate of 6.7%, double the County percentage.. HIGH UNEMPLOYMENT RATES The County unemployment rate continues to rise as the current economic recession lengthens. HUD statistics report Newnan City and Census Area Tract 1707 have the highest unemployment rates in the County, of 5.9% and 5.7% respectively. HIGH ESTIMATED FORECLOSURE ABANDOMENT RISK SCORES Areas of Newnan were reported by HUD to have the highest estimated foreclosure abandonment risk scores in Coweta County. Out of a possible 10, Census Tract Area 1707 had a score of nine and Census Tract Area 1702 had a score of eight. 10

11 HUD DATA ON HIGH COST LOAN HMDA LOAN FOR COWETA CENSUS TRACT AREAS Coweta County Census Tract Area codes Total HMDA loans Total High Cost HMDA loans Estimated percentage of high cost loans made between , % % , % , % , % , % % , % % , % HUD DATA ON HIGH COST HMDA LOAN FOR COWETA COUNTY PLACES Total HMDA loans Total High Cost HMDA loans Estimated percentage of High Cost loans made between COWETA COUNTY 12,686 2, % Corinth town % East Newnan CDP % Grantville city % Haralson town % Moreland town % Newnan city 2, % Palmetto city % Senoia city % Sharpsburg town % Turin town % 11

12 HUD VACANCY AND UNEMPLOYMENT PERCENTAGE RATES FOR COWETA CENSUS TRACT AREAS Coweta County Census Tract Area codes Total residential addresses Total 90 day vacant residential addresses Estimated 90 day vacancy rate Unemployment rate , % 5.4% , % 5.7% , % 5.6% , % 5.4% , % 5.5% , % 5.4% , % 5.4% , % 5.7% , % 5.6% , % 5.4% HUD VACANCY AND UNEMPLOYMENT PERCENTAGE RATES FOR COWETA COUNTY PLACES Total residential addresses Total 90 vacancy residential addresses Estimated 90 day vacancy % rate Unemployment rate COWETA COUNTY 33,062 1, % 5.4% Corinth town 7 0 0% 5.4% East Newnan CDP % 5.4% Grantville city % 5.4% Haralson town % 5.4% Moreland town % 5.4% Newnan city 9, % 5.9% Palmetto city % 5.4% Senoia city % 5.4% Sharpsburg town % 5.4% Turin town % 5.4% 12

13 HUD FORECLOSURE STATISTICS FOR COWETA COUNTY CENSUS AREA TRACTS Estimated Estimated # Estimated # foreclosure Mortgages foreclosures rate , % , % , % , % , % , % , % , % , % , % HUD FORECLOSURE STATISTICS FOR COWETA COUNTY PLACES Estimated # mortgages Estimated # foreclosures Estimated foreclosure rate COWETA COUNTY 25, % Corinth town 5 0 0% East Newnan CDP % Grantville city % Haralson town % Moreland town % Newnan city 5, % Palmetto city % Senoia city % Sharpsburg town % Turin town % 13

14 tractcode state sta county countyname tract hhuniv estimated_number_foreclosures estimated_number_mortgages estimated_foreclosure_rate total_90_day_vacant_residential_addresses total_residential_addresses estimated_90_day_vacancy_rate total_hicost_2004_to_2006_hmda_loans total_2004_to_2006_hmda_loans estimated_hicost_loan_rate bls_unemployment_rate ofheo_price_change 01/06/ GA 077 Coweta County , , % 79 2, % 265 1, % 5.4% 0.0% GA 077 Coweta County , , % 125 2, % % 5.6% 0.0% GA 077 Coweta County , , % 75 3, % 325 1, % 5.4% 0.0% GA 077 Coweta County , , % 100 6, % 302 1, % 5.7% 0.0% GA 077 Coweta County , , % 148 7, % 706 3, % 5.5% 0.0% GA 077 Coweta County , , % 2.9% 195 2, % 6.7% 171 1, % 54% 5.4% 00% 0.0% GA 077 Coweta County , , % 161 5, % 534 2, % 5.4% 0.0% GA 077 Coweta County , , % 322 7, % 498 2, % 5.6% 0.0% GA 077 Coweta County , , % 197 2, % % 5.7% 0.0% GA 077 Coweta County , , % 151 3, % 343 1, % 5.4% 0.0% 14

15 countyplace cdbguogi NAME state STA county countyname place placenm hhuniv 01/06/2009 estimated_number_foreclosure estimated_number_mortgage estimated_foreclosure_rat total_90_day_vacant_residential_addresse total_residential_addresse estimated_90_day_vacancy_rate total_hicost_2004_to_2006_hmda_loans total_2004_to_2006_hmda_loans estimated_hicost_loan_rat bls_unemployment_rateofheo_price_change GEORGIA 13 GA 077 Coweta County Corinth town % % % 5.4% 0.0% GEORGIA 13 GA 077 Coweta County East Newnan CDP % % % 5.4% 0.0% GEORGIA 13 GA 077 Coweta County Grantville city % % % 5.4% 0.0% GEORGIA 13 GA 077 Coweta County Haralson town % % % 5.4% 0.0% GEORGIA 13 GA 077 Coweta County Moreland town % % 4.1% % 54% 5.4% 00% 0.0% GEORGIA 13 GA 077 Coweta County Newnan city 6, , % 349 9, % 638 2, % 5.9% 0.0% FULTON C13 GA 077 Coweta County Palmetto city % % % 5.4% 0.0% GEORGIA 13 GA 077 Coweta County Senoia city % % % 5.4% 0.0% GEORGIA 13 GA 077 Coweta County Sharpsburg town % % % 5.4% 0.0% GEORGIA 13 GA 077 Coweta County Turin town % % % 5.4% 0.0% GEORGIA 13 GA 077 Coweta County , , % 1,088 33, % 2,753 12, % 5.4% 0.0% 15

16 POLICY MAP STATISTICS ( Coweta County Statistics retrieved from in November of 2008 shows: COST BURDENED CITIZENS The total percentage of renters who are cost burdened in Coweta County is 36.05% or 2,407 renters. (I.e. low-income renters pay more than 30% of their total household income for rent). Four census tract areas, (1707, 1706, , ),located in and around the city of Newnan and East Newnan CDP, all exceed the county average of renters who are cost burdened. The total percentage of homeowners in Coweta County who are cost burdened is 19% or 3,998 people. (I.e. low-income homeowners who pay more than 30 percent of their income for total household costs). Six independent census tract areas, (1708, 1707, , , 1702, 1701) all have percentages of cost-burdened homeowners in excess of the county average. Five of these Census Tract Areas are located in or around the city of Newnan and Newnan CDP. FAMILIES LIVING BELOW POVERTY THRESHOLDS Six percent of Coweta County families or 1,515 are living below the poverty threshold. Five independent census tract areas, (1708, 1707, 1706, , 1702), all have percentages of families living below poverty level that are above the County level percentage. Four of these Census Tract Areas are located in or around the city of Newnan and East Newnan CDP. According to Policy Map data, the median income of a typical household in Coweta County is $52,706. Six independent census tract areas, (1708, 1707, 1706, , 1702, 1701) all report a lower median household income than the county average. One census tract area, 1707 reports median household income lower that the state average. Five of these Census Tract Areas are located in or around the City of Newnan and East Newnan CDP. Moreland town and Grantville city are located in one of these census tract areas. SUBPRIME MORTGAGE LENDING IN NEWNAN AND EAST NEWNAN CDP. The Home Mortgage Disclosure Act (HMDA) data reveals that a high percentage of all mortgage loans made in all census tract areas of Coweta County were high-cost subprime mortgage loans. 16

17 All areas of Newnan and East Newnan CDP, Grantville City and Moreland town were affected by subprime mortgage lending. Census Tract Areas 1707 and 1702 show more than one third of all mortgage loans made between 2004 and 2006 were high-cost subprime mortgage loans. Census Tract Areas 1708 and 1701 show more than one quarter of all mortgage loans made between 2004 and 2006 were high-cost subprime mortgage loans. Census Tract Areas 1706, and all show more than one fifth of all mortgage loans made between 2004 and 2006 were high-cost subprime mortgage loans. POLICY MAP DATA (source: AREA GEORGIA COWETA % RENTERS COST BURDENED # RENTERS COST 341,484 2, BURDENED % OWNERS COST BURDENED # OWNERS COST 334,881 3, BURDENED % FAMILIES LIVING IN POVERTY # FAMILIES LIVING IN 210,138 1, POVERTY MEDIAN INCOME OF TYPICAL 42,433 52,706 43,750 37,061 43,002 54,219 67,586 70,364 66,081 47,050 47,409 50,669 HOUSEHOLD HMDA DATA ON % HIGH COST LOANS

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28 OTHER DATA SOURCES AND INFORMATION RealtyTrac ( website reports a daily average of over 400 foreclosures in the Newnan area and over 200 in the Grantville area. HotPads ( website reports an average of 1 in 150 homes are currently at risk for foreclosure in Newnan, East Newnan, and Grantville and Moreland areas. The US Census Bureau reports that over 13% percent of all people in Coweta County are living at or below the poverty rate. The US Census Bureau reports a large number of housing units with housing problems in Coweta County. Counts of Housing Units with Housing Problems--Overlaps Decomposition US Census 2000 SF3 Using US Census PUMS for Owners in Coweta County OWNER CITY Grantville city, Georgia Haralson city Moreland town, Georgia Newnan city, Georgia Palmetto city Senoia city, Georgia Sharpsburg town, Georgia Turin town, Georgia Total Cost Burdened* Total Severely Cost Burdened Total Overcrowded Total Lacking Facilities Total Problems COUNTY (ASSOCIATED WITH CITY) Meriwether, Coweta Coweta Coweta Coweta, Fulton Coweta Coweta Coweta 28

29 Counts of Housing Units with Housing Problems--Overlaps Decomposition US Census 2000 SF3 Using US Census PUMS for Renters in Coweta County RENTER CITY Grantville city, Georgia Total Cost Burdened* Total Severely Cost Burdened Total Overcrowded Total Lacking Facilities Total Problems COUNTY (ASSOCIATED WITH CITY) Coweta Haralson city Moreland town, Georgia Newnan city, Georgia Meriwether, Coweta Coweta Coweta Palmetto city Coweta, Fulton Senoia city, Georgia Sharpsburg town, Georgia Turin town, Georgia Coweta Coweta Coweta 29

30 B. DISTRIBUTION AND USES OF FUNDS Provide a narrative describing how the distribution and uses of the applicant s NSP funds will meet the requirements of Section 2301(c)(2) of HERA that funds be distributed to the areas of greatest need, including those with the greatest percentage of home foreclosures, with the highest percentage of homes financed by a subprime mortgage related loan, and identified by the applicant as likely to face a significant rise in the rate of home foreclosures. Note: The applicant s narrative must address these three stipulated need categories in the NSP statute, but the applicant may also consider other need categories. Response: The Department of Community Affairs (herein after referred to as DCA), has determined that Coweta County will receive a direct allocation of Neighborhood Stabilization Program (NSP) funds in the proposed amount of $2,124,021. Of this amount, $413,755 has been allocated to be spent in the jurisdiction of the City of Newnan, and $1,710,266 to be spent in the jurisdiction of Coweta County. Targeted Areas As identified in Section A of this proposal, the four areas of greatest need in Coweta County are City of Newnan, East Newnan CDP, Grantville City and Moreland Town. Data in Section A above show these four areas to have the greatest percentage of home foreclosures, the highest percentage of homes financed by subprime mortgage lending practices and most likely areas to face a significant rise in the rate of home foreclosures in Coweta County. Because NSP funding is limited and the greatest amount of impact in one area is the most desirable outcome of this program, no less than $413,755 will be spent inside the city limits of Newnan, as allocated by the DCA. It is the Grantees intent that the majority of all NSP Funds allocated to be spent in Coweta County, will primarily be focused in Newnan City and East Newnan CDP. In the event that eligible properties are not available for NSP purchase and use in these two localities, then NSP funds will be used to acquire eligible properties located in Grantville City and Moreland Town. Implementation of NSP funds The City of Newnan and Coweta County jurisdiction will jointly apply for and use allocated NSP funds through an integrated approach, entering into a collaborative agreement with Newnan-Coweta Habitat for Humanity (NCHFH) and Housing Authority of Newnan (HAN). Implementation of the NSP in Coweta County will be performed by these two entities as recipient of a forgivable NSP loan and Grant subrecipient agreements. 30

31 Newnan-Coweta Habitat for Humanity (NCHFH) Proposed NSP loan recipient Coweta County Jurisdiction and The City of Newnan will jointly apply for $2,124,021 NSP funds that DCA has allocated to stabilize the Coweta County Community. City of Newnan, as lead applicant and grant recipient of NSP, will enter into an agreement with NCHFH to provide a five-year forgivable loan to NCHFH, in accordance with language released by HUD November 11, 2008: ( pfaq.cfm). NCHFH will use the forgivable NSP loan to purchase and rehabilitate no less than 14 foreclosed and abandoned properties. Funds will be targeted to be spent in the zip area code located in Coweta County. NCHFH will then use the properties to provide affordable homeownership opportunities for pre-selected low-income (partner) families earning less than 50% and/or 80% of the area median income. A promissory note will evidence the loan between City of Newnan Jurisdiction and NCHFH. Provisions will be made for City of Newnan to forgive the entire NSP loan infull after five years (or at such other time as may be agreed to by NCHFH and the Grantee), in accordance with language released by HUD regarding NSP loans made to non-profit organizations, providing NCHFH uphold all NSP loan requirements. All funds will be obligated within an 18-month period, beginning the date funds are awarded in No less than 14 foreclosed properties will be purchased within 18 months of receipt of the NSP funds and all renovations and sales to approved Habitat Homeowners will be completed within four years of initial receipt of NSP funds. NSP funds received by NCHFH will be targeted toward United States zip code with a focus on the City of Newnan and East Newnan CDP. This area includes Census Tract Areas 1707, 1706, and In the event eligible properties cannot be purchased with NSP funds in zip code 30263, NCHFH will seek foreclosed properties located in zip code and 30259, Grantville and Moreland areas. These areas are located within census tract area Housing Authority of Newnan (HAN) Proposed NSP Grant recipient City of Newnan, as lead applicant and grant recipient of NSP, will enter into a subrecipient agreement with Housing Authority of Newnan. HAN will become the subrecipient of a $599,634 NSP grant. All funds will be obligated within 18 months of receipt. HAN will purchase no less than six foreclosed homes within 18 months of receipt of funds and all homes will be rented to pre-approved low-income families and individuals within four years. These families and 31

32 individuals may have the opportunity to later purchase a house in HAN s rent- to- own Family Self-Sufficiency program. HAN will use NSP funds to purchase foreclosed and abandoned homes located within the area code inside the city limits of Newnan and East Newnan CDP. This area includes Census Tract Areas 1707, 1706, and In the event eligible properties cannot be purchased with NSP funds in zip code 30263, HAN will seek foreclosed properties located in zip code and 30259, Grantville and Moreland areas. These areas are located within census tract area NCHFH Community Homeownership Educational Workshops All low-moderate and middle income families benefiting from NSP funded housing units, whether served by NCHFH or HAN, will be required to attend mandatory Department of Housing and Urban Development (HUD) approved Community Homeownership Educational Workshop classes, provided annually by NCHFH.* Workshop classes will cover subjects such as, but not limited to, household budgeting skills, home repair and improvement skills, financial organizational skills, mortgage information, best neighbor practices, homeowner and renters legal rights and obligations, credit-score and reporting awareness, and basic personal savings strategies. All participants in workshops will have the opportunity for one-on-one private counseling sessions for each workshop subject offered. (See appendix 2 for 2008 Homeowner Educational Workshop schedule). All workshops and counseling sessions will be provided free of charge and open to the public. All workshops and counseling sessions will be provided in the zip-area code, in and around the Newnan City area. * NCHFH is currently pursuing HUD certification. In the event that HUD certification is not obtained, NCHFH and HUD will arrange for NSP families and individuals served to received at least six hours HUD-approved housing counseling where available, at no cost to the family or individual. C. DEFINATIONS AND DESCRIPTIONS (1) Definition of blighted structure in context of state or local law. Note: For the purposes of the Georgia NSP the following definition shall apply: Pursuant to O.C.G.A "Blighted property," "blighted," or "blight" means any urbanized or developed property which: (A) Presents two or more of the following conditions: (i) Uninhabitable, unsafe, or abandoned structures; (ii) Inadequate provisions for ventilation, light, air, or sanitation; (iii) An imminent harm to life or other property caused by fire, flood, hurricane, tornado, earthquake, storm, or other natural catastrophe respecting which the Governor has declared a state of emergency under state law or has certified the need for disaster assistance under federal law; provided, however, this 32

33 division shall not apply to property unless the relevant public agency has given notice in writing to the property owner regarding specific harm caused by the property and the owner has failed to take reasonable measures to remedy the harm; (iv) A site identified by the federal Environmental Protection Agency as a Superfund site pursuant to 42 U.S.C. Section 9601, et seq., or environmental contamination to an extent that requires remedial investigation or a feasibility study; (v) Repeated illegal activity on the individual property of which the property owner knew or should have known; or (vi) The maintenance of the property is below state, county, or municipal codes for at least one year after notice of the code violation; and (B) Is conducive to ill health, transmission of disease, infant mortality, or crime in the immediate proximity of the property. Response: Blighted Property The above definition shall be adhered to by all entities using NSP funds in Coweta County: Grantees, Grant subrecipients and NSP Loan Recipients. (2) Definition of affordable rents. Applicants may use the definition they have adopted for their CDBG program but should review their existing definition to ensure compliance with NSP program specific requirements such as continued affordability. Note: The State will require the NSP program recipients to follow the HUD regulations as set forth in 24 CFR Response: Affordable Rents Affordable rents for the Coweta County NSP program shall be defined as housing units for which a renter pays no more than 30% of their total household income for rent and an owner would pay less than or equal to 30% of annual gross income for annual owner costs. (3) Describe how the applicant will ensure continued affordability for NSP assisted housing. Note: The State will require NSP projects to follow the affordability requirements for the HUD HOME program as set forth in 24 CFR (2) (2) for rental housing and in 24 CFR for homeownership housing, based on the amount of NSP funds provided for each project. All rental housing affordability restrictions will be imposed by deed restrictions. When there is more than one financing source (besides NSP) imposing land use restrictions on a project, the most restrictive requirements will apply to the project. 33

34 For homeownership projects, the DCA NSP program loan documents including a subordinate deed to secure debt, loan agreement and/or note will be used to enforce the required period of affordability. In accordance with HERA, in the case of previously HOME-assisted properties for which affordability restrictions were terminated through foreclosure or deed in lieu of foreclosure, an NSP applicant will be required to reinstate the HOME affordability restrictions for the remaining period of HOME affordability or any more restrictive continuing period of affordability required by any other financing source participating in the NSP project. Response: Coweta County jurisdiction and the City of Newnan will be collaborating with Newnan- Coweta Habitat for Humanity (NCHFH) and the Housing Authority of Newnan (HAN) to utilize NSP funds in the most cost-effective method available in our community. Affordable Homeownership Opportunities Newnan-Coweta Habitat for Humanity (NCHFH) will use the Habitat model to utilize NSP funds to provide affordable homeownership opportunities for low-moderate and middle-income families in Coweta County. Our mission is to help low-income families on the road to self-sufficiency through responsible home ownership. NCHFH offers unique characteristics that fit the goals of the NSP program: Our goal is to serve families up to 50% of the area median income (AMI). We do not make a profit. We have a large pool of pre-approved partner families that are waiting on affordable homes. We have a deep knowledge of local housing markets that are hardest hit by the current housing crisis. Habitat provides homebuyers with 0 percent seller financing. NSP funds used by NCHFH will be used to serve low-income families earning less than 50% of the area median income. NCHFH currently serves individuals and families whose income does not exceed 50 percent AMI. In order to support the Grantee in its compliance with Section 2301(f)(3)(A)(ii) of HERA, the Habitat NSP Grant Program will ensure that the residential properties purchased, rehabilitated or redeveloped under this activity will be sold to individuals or families whose incomes do not exceed 50% AMI. NCHFH will support the continued affordability of each property to those purchasers by utilizing Habitat s unique 0 percent purchase money mortgage model. To ensure that each property purchased with NSP funds remains affordable to future purchasers, NCHFH will also incorporate affordability restrictions (as described below) into its sale and mortgage documents. Finally, NCHFH will reinvest all mortgages and shared appreciation revenue received from its partner families to provide funding to build more homes for Habitat partner families on the same mortgage terms. 34

35 NCHFH will sell NSP financed homes to approved Habitat partner families that earn less than 50% of the area median income (AMI). The purchase price for these homes will comply with the requirements of HERA and the NSP regulations, and will be paid pursuant to a 0 percent purchase money mortgage under the following terms: No Interest Charged: The mortgage financing that is provided will charge no interest. First Mortgage Term: The term of the mortgage will be 20 years unless a longer term is required by local real estate conditions to keep the house affordable. Fully Amortizing First Mortgage Loans: The loans secured by the mortgage will fully amortize over the set term of the mortgage. Balloon Loans Prohibited: Loans, which require full payment before the end of the term of the loan, are prohibited. Use of Habitat House: NCHFH shall require that the homeowner use the house as their principal/primary residence. In order to maintain the continued affordability of the home, NCHFH will incorporate a right of first refusal in all mortgage documents. This allows NCHFH to retain the home as an affordable unit of housing, and can inhibit predatory lenders from gaining a controlling interest in the property. In addition, NCHFH will require the partner families to enter into an equity sharing second mortgage that will allow NCHFH to claim a percentage of the increase in the appreciation in the value of the home over and above the initial appraised value of the home and excluding capital improvements made to the home by the partner family. NCHFH s claim to the value of this shared appreciation of the home may only be exercised upon foreclosure, sale, and transfer of title, full payment or refinancing of the home or the first mortgage. NCHFH s formula for this shared appreciation value shall be determined by calculating the difference between the appraised value of the home and NCHFH s selling price to the family. The term of the shared appreciation silent-second mortgage shall be 20 years. The shared appreciation value will depreciate by 1/20 th each year. All mortgage payments and shared appreciation proceeds received by NCHFH from these mortgages will be retained by NCHFH in a segregated account and will be used by NCHFH to provide funding to build more homes for Habitat partner families on the same mortgage terms. This financing mechanism will further leverage the NSP funds and ensure the continued affordability of these homes pursuant to Section 2301(c)(3)(a) of HERA. Affordable Rental Opportunities The Housing Authority of Newnan (HAN) is a quasi-governmental agency established to provide decent, safe and sanitary housing for low-income citizens in Coweta County. The majority of the families served by HAN have incomes below 30% of the AMI. HAN will maintain compliance with Section 2301(f) (3)(A)(ii) of HERA and will focus on providing affordable rental housing to eligible families. HAN will ensure that the 35

36 residential properties purchased, rehabilitated or redeveloped under this activity will be rented to individuals or families whose incomes do not exceed 80 percent of AMI. HAN will conduct rent reasonableness on all properties to insure the rents are affordable to eligible families. The anticipated rents will be at least 20-25% under Fair Market Rent (FMR) for the area. The HAN will reinvest all rental receipts to the upkeep and maintenance of each property. A portion of the rental receipts will be placed in an Individual Saving Escrow Account to be used by the families to purchase their homes through the Family Self-Sufficiency program. HAN Family Self Sufficiency Affordable Homeownership Program Each family will have the opportunity to purchase their home when they have completed all program requirements. (A family s participation in the homeownership program is conditional upon the family attending and successfully completing a homeownership and housing counseling program approved by HAN prior to commencement of homeownership assistance). The proposed financing terms must be submitted to and approved by HAN prior to close of escrow. HAN shall determine the affordability of the family s proposed financing. (In making such determination, HAN may take into account other family expenses, including but not limited to childcare, un-reimbursed medical expenses, education and training expenses and the like). The purchase price for each home will comply with the requirements of HERA and the NSP regulations. Certain types of financing, including but not limited to, balloon payment mortgages, and predatory lending activities are prohibited. If a mortgage is not FHA insured, HAN will require the lender to comply with generally accepted mortgage underwriting standards consistent with those HUD/FHA, USDA Rural Housing Services, the Federal Home Loan Bank, or other approved private lending institutions. HAN will incorporate a right of first refusal in all mortgage documents. This will allow HAN to ensure the continued affordability of the property. All income received from the sale of NSP Homes will maintained in a segregated account and will be used to purchase additional affordable housing for rental and or purchase activities. (4) Describe housing rehabilitation standards that will apply to NSP assisted activities. Note: At a MINIMUM, NSP rehabilitation activities must meet the following: a) Newly constructed or rehabilitation of single or multi-family residential structures being funded using NSP assistance must, at project completion, meet all applicable regulations in accordance with Minimum Standard Georgia Building Codes ( as well as all locally adopted codes b) All requirements of 24 CFR Part 35 as related to lead-based paint shall apply to NSP activities. 36

37 Response: c) All single and/or multifamily residential structures must also meet all federal and state accessibility requirements including but not limited to those associated with the use of federal funds. Rehabilitation Standards All NSP-assisted rehabilitation of foreclosed-upon homes in Coweta County implemented by the Grantee, Grant subrecipients and NSP loan recipients, shall be rehabilitated to the extent necessary to comply with applicable laws, codes and other requirements relating to housing safety, quality, and habitability, in order to sell, rent or redevelop such homes and properties. Where easily applicable and cost effective, Newnan-Coweta Habitat for Humanity and Housing Authority of Newnan will use NSP funds to increase the energy efficiency or conservation of foreclosed-upon homes and properties, by incorporating modern, green building techniques and Energy Star rated improvements. These practices will help ensure long-term affordability, increased sustainability and attractiveness of NSP funded housing and neighborhoods. D. LOW INCOME TARGETING Identify the estimated amount of funds appropriated or otherwise made available under the NSP to be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals or families whose incomes do not exceed 50 percent of area median income: $999,390. (10 housing units costing no more than $99,939 each). Note: At least 25% of funds must be used for housing individuals and families whose incomes do not exceed 50 percent of area median income. The response must describe the methodology their project will use to ensure that at least 25% of NSP funds will be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals or families whose incomes do not exceed 50 percent of area median income Response: At least 85 percent of NSP funding in Coweta County will be used to purchase and redevelop abandoned or foreclosed upon homes or residential properties for housing individuals or families whose income do not exceed 50 percent of area median income. Distribution of total NSP funds received in Coweta County will be as follows: 37

38 Total Coweta County NSP Allocation Amount: $2,124,021 $1,399,146 Newnan Coweta Habitat for Humanity o $1,399,146 - No less than 14 housing units will be purchased (each property costing no more than $99,939) o $1,399,146 All fourteen of the above mentioned housing units will be purchased (each property costing no more than $99,939) to provide financing mechanisms for households earning less than 50% area median income. $599,634 Housing Authority of Newnan o $599,634 No less than 6 housing units will be purchased (each property costing no more than $99,939) o $299,817 At least three of the above mentioned housing units will be purchased (each property costing no more than $99,939) to provide financing mechanisms for households earning less than 50% area median income. $125,241 Total NSP funds allocated for administration requirements o $100,000 NSP Grant Administrator Salary ($20,000 per year for five years) o $20,000 HAN Case manager salary ($5,000 per year for four years) o $5,241 Other administrative expenses Summary: $1,998,780 - Total Coweta County NSP funds used to provide financing mechanisms for low-income families. o $1,698,963 Total amount of Coweta County NSP funds used to provide financing mechanisms for low-income families earning less than 50% area median income. o 80% - Total percentage of Coweta County NSP funds used to provide financing mechanisms for low-income families earning less than 50% area median income. 38

39 PROPOSED DISTRIBUTION OF NSP ALLOCATIONS IN COWETA COUNTY Total Funds NCHFH HAN Administrative NSP funds $2,124,021 $1,399,146 $599,634 $125,241 50% AMI $1,698,963 $1,399,146 $299,817 N/A 51 80%AMI $299,817 N/A $299,817 N/A PERCENTAGE OF FUNDS USED FOR 50% AMI HOUSEHOLDS TOTAL NUMBER OF PROPERTIES NUMBER OF PROPERTIES AVAILABLE FOR 50% AMI HOUSEHOLDS PERCENTAGE OF PROPERTIES AVAILABLE FOR 50% AMI HOUSEHOLDS 80% 100% 50% N/A N/A N/A 85% 100% 50% N/A 39

40 E. ACQUISITIONS AND RELOCATION Indicate whether applicant intends to demolish or convert any low- and moderate-income dwelling units (i.e., 80% of area median income). If so, include: The number of low- and moderate-income dwelling units i.e., 80% of area median income reasonably expected to be demolished or converted as a direct result of NSP-assisted activities. The number of NSP affordable housing units made available to low-, moderate-, and middle-income households i.e., 120% of area median income reasonably expected to be produced by activity and income level by each NSP activity providing such housing (including a proposed time schedule for commencement and completion). The number of dwelling units reasonably expected to be made available for households whose income does not exceed 50 percent of area median income. Response: City of Newnan, lead applicant and grantee of Coweta County NSP funds proposes to enter into a collaborative agreement with NCHFH and HAN. A total of 20 housing units will be made available to households earning less than 80 percent area median income. No less than 10 (half) of the housing units will be made available to households earning less than 50 percent of the area median income. Funds will be distributed as follows to provide financing mechanisms for 20 housing units: $1,399, Housing Units will be purchased with NSP forgivable loan funds by NCHFH o NCHFH will apply for and use $1,399,146 of NSP funding through a forgivable loan agreement. o No less than 14 housing units will be purchased with NSP forgivable loan funds. Each property s total acquirement and rehabilitation cost will be no more than $99,939. o All 14 housing units will be used to provide affordable home mortgages to low-moderate and middle-income households earning less than 50% area median income. $599,634 6 Housing Units will be purchased with NSP grant funds by HAN o HAN will apply for and use $599,634 of the NSP funding as a subrecipient of NSP grant. o No less than six housing units will be purchased with NSP grant funds. 40

41 o All six housing units will be used to provide affordable rents to low-moderate and middle income households earning less than 80 percent area median income. o No less than three housing units will be used to provide affordable rents for households earning less than 50 percent area median income. PROPOSED DISTRIBUTION OF HOUSING UNITS MADE AVAILABLE TO LOW INCOME FAMILIES PURCHASED WITH NSP FUNDS Total Housing Units NCHFH HAN Total Housing Units Total # Housing units for Households earning 80% AMI Total # Housing Units for Households earning 50% AMI % of Housing Units for Households earning 50% AMI 85% 100% 50% 41

42 F. PUBLIC COMMENT Provide a summary of public comments received to the proposed NSP Substantial Amendment. Note: The applicant must agree to the following: As required by the Housing and Community Development Act, the Georgia Department of Community Affairs has adopted a written Citizen Participation Plan, available on the DCA website at rticipationplan.pdf. Applicants for and recipients of CDBG/NSP funds certify that they will follow this plan that requires that local units of government will provide for and encourage participation in the planning, implementation and assessment of their CDBG/NSP program. In order to meet these goals, applicants must, at a minimum, meet the following requirements. 1. Hold at least one (1) public hearing in the locality prior to submission of an application to DCA. The purpose of the hearing will be to obtain citizens views and input in the development of their Neighborhood Stabilization Program (NSP) application. The applicant must furnish information including the estimated amount of funds proposed to be used for each NSP activity. Note: For joint or regional applications, separate public hearings for each jurisdiction are required. A single public hearing, however, may serve the needs of each jurisdiction, provided that (a) each jurisdiction shares a central location and (b) the hearing is clearly publicized to residents of all applicable jurisdictions. If a single hearing is proposed, please contact DCA for guidance. 2. Notification of the public hearing must be published not less than five (5) calendar days prior to the date of the hearing in the non-legal section of a local newspaper of general circulation or on the jurisdiction s web page. 3. Hearings must be held at times and locations convenient to potential or actual beneficiaries and with accommodations for the disabled. The needs of non-english speaking residents must be met for public hearings where a significant number of non-english speaking residents can be reasonably expected to participate. Contact DCA for any required assistance. 4. Applicant files must contain documentary evidence that the actions listed herein have been taken, including copies of actual notices and minutes of hearings. 5. Citizens must be provided with reasonable and timely access to local meetings, information and records relating to the local government's proposed and actual use of CDBG/NSP funds as required by HUD regulations, state law, or DCA policy. 42

43 6. This section should not be construed to restrict the responsibility or authority of the local government for the development and execution of its community development program. 7. The applicant must certify in the Certified Assurances component of the application that the requirements above have been met. Response: 43

44 01/06/

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46 G (1). NSP INFORMATION BY ACTIVITY (Complete for each Activity). (1) Activity Name: Financing Mechanism - (Newnan-Coweta Habitat for Humanity) (2) Activity Type: (include NSP eligible use & CDBG eligible activity) Eligible NSP Use: NSP (A) CDBG Eligible Activity 24 CFR (3) National Objective: (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). Low-Moderate-and Middle Income Area Benefit (LMMA) Low-Moderate and Middle Income Direct Housing Benefit (LMMH) Low-Moderate-and Middle Income Limited Clientele Benefit (LMMC) Low-Moderate-and Middle Income Job Benefit (LMMJ) (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. Coweta County is made up of diverse population groups with a wide range of income levels. Statistics gathered from independent sources indicate that NSP funding would greatly benefit Coweta County if focused in the neighborhoods located within the City of Newnan and East Newnan Census Designated Place (CDP) with the United States Postal Service Zip area code of This area includes all or part of Census Tract Areas 1707, 1706, , , and Statistics from HUD show: Over one fifth of all mortgage loans made in Newnan City and East Newnan CDP during 2004 to 2006 were high cost subprime mortgage loans. Census Tract areas located in Newnan city and East Newnan CDP have estimated 90-day vacancy rates that exceed the county 3.3 percent vacancy rate. HUD statistics report Newnan City has the highest unemployment rate in Coweta County of 5.9 percent. Census Tract Areas located within the City of Newnan were reported by HUD to have the highest estimated foreclosure abandonment risk scores in Coweta County. Newnan-Coweta Habitat for Humanity (NCHFH), a local affiliate of Habitat for Humanity International, has been building homes in partnership with low-income families in Coweta County since NCHFH is a 501(c)3 non-profit organization that 46

47 seeks to provide safe, decent and affordable housing to low-income families in Coweta County The Department of Community Affairs (DCA) has allocated $2,124,021 of NSP funding to be spent in Coweta County. NCHFH would like to use $1,998,780 to provide affordable homeownership opportunities for at least 14 low-income families living in and around the city of Newnan and East Newnan CDP in Coweta County. NCHFH would like to collaborate with the City of Newnan and Coweta County to help implement this NSP program by utilizing the Habitat model. We offer unique characteristics that fit the goals of the program: Our goal is to serve families up to 50% of the area median income (AMI). We do not make a profit. We have a large pool of pre-approved partner families that are waiting on affordable homes. We have a deep knowledge of local housing markets that are hardest hit by the current housing crisis. Habitat provides homebuyers with 0 percent seller financing. Our mission is to help low-income families on the road to self-sufficiency through responsible home ownership. Studies show that homeownership not only builds wealth for low-income families but also for the community. NSP funds will play a vital role in Coweta s continued growth into a strong and prosperous community, free from the detrimental effects of poverty housing. NSP funds used by NCHFH will be used to serve low-income families earning less than 50% of the area median income. (5) Location Description: (Description may include specific addresses, blocks or neighborhoods to the extent known.) NSP funds will be used to purchase REO properties located in United States Postal Zip Codes of 30263, City of Newnan and East Newnan CDP. In the event eligible properties are not available, property will be purchased within the and Zip Codes, City of Grantville and Moreland Town, Georgia. Twenty eligible REO properties have already been identified in the area code, and three in the zip code area. Negotiations with banks regarding these properties are in process. For more information regarding these properties please contact NCHFH. (6) Performance Measures (e.g., units of housing to be acquired, rehabilitated, or demolished for the income levels of households that are 50 percent of area median income and below, percent, and percent). The performance of this activity will be measured as follows: (a) The number of properties acquired, renovated and/or rehabilitated in order to provide affordable financing mechanisms with NSP funds. 47

48 (b) The income levels of each partner family will be provided to the Grantee to prove the affordability component of this program within 30 days after closing of each home. (7) Total Budget: (Include public and private components) $1,399,146 NSP five-year forgivable loan to NCHFH As a recipient of a five-year NSP forgivable loan (the NSP loan), Newnan- Coweta Habitat for Humanity (NCHFH) will acquire and rehabilitate no less than 14 housing units (total acquisition and rehabilitation costs for each unit not to exceed $99,939). NCHFH will rehabilitate all NSP funded properties to acceptable living standards, in compliance with the DCA rehabilitation standards referenced in section (C)(4) of the Proposed Substantial Amendment Plan. NCHFH will then sell each completed house to a pre-qualified low-income family earning less than 50% of the area median income. The sale will be pursuant to the Habitat model of 0 percent seller financing. (8) Responsible Organization: (Describe the responsible organization that will implement the NSP activity, including its name, location, and administrator contact information) Newnan-Coweta Habitat for Humanity (NCHFH) PO Box 2607 (mailing address) 1082 Highway 16 East (physical address) Newnan, GA Leslie Merriman, Executive Director. lesliemerriman@nchfh.org (9) Projected Start Date: March 2009 (10) Projected End Date: March 2014 (11) Specific Activity Requirements: For acquisition activities, include: discount rate For financing activities, include: range of interest rates For housing related activities, include: duration or term of assistance; tenure of beneficiaries--rental or homeownership; a description of how the design of the activity will ensure continued affordability 48

49 The NSP five-year forgivable loan NCHFH is a non-profit organization and will become a recipient of a five-year forgivable loan (the NSP loan) pursuant to an agreement with the Grantee, The City of Newnan, in accordance with language released by the Department of Housing and Urban Development (HUD) in November The Grantee and NCHFH will execute a loan agreement evidencing the amount of the loan and the payment terms of the loan. The loan agreement will also contain provisions relating to the forgiveness of the loan by Grantee at maturity (pursuant to such forgiveness terms as may be negotiated by Grantee and NCHFH), subject to completion of NSP projects by NCHFH. Upon sale of a completed home to a homebuyer, the excess cost (if any) of the construction (including administrative overhead) over the final sales price to the homebuyer will be forgiven (homebuyer subsidy). All principle payments received by NCHFH from the homebuyer (less a reasonable servicing fee) will be held in a segregated account and used for new NSP appropriate projects until forgiveness of the loan. After forgiveness of the loan, payments received from the partner family may be used for regular NCHFH business activities (i.e., self-help home ownership opportunities for low-income families). The NSP funds will be distributed in accordance with the budget outlined herein to acquire, rehabilitate and develop foreclosed properties in order to provide affordable homeownership opportunities to low-income pre-approved (partner) families, in accordance with the terms of HERA and all applicable NSP regulations. Continued Affordability NCHFH currently serves individuals and families whose income does not exceed 50 percent AMI. In order to support Grantee in its compliance with Section 2301(f)(3)(A)(ii) of HERA, the Habitat NSP Grant Program will ensure that the residential properties purchased, rehabilitated or redeveloped under this activity will be sold to individuals or families whose incomes do not exceed 50% AMI. NCHFH will support the continued affordability of each property to those purchasers by utilizing Habitat s unique 0 percent purchase money mortgage model. To ensure that each property purchased with NSP funds remains affordable to future purchasers, NCHFH will also incorporate affordability restrictions (as described below) into its sale and mortgage documents. Finally, NCHFH will reinvest all mortgages and shared appreciation revenue received from its partner families to provide funding to build more homes for Habitat partner families on the same mortgage terms. All properties acquired by NCHFH using NSP funds will be purchased at a discounted rate 15% below current appraised value. Upon completion of rehabilitation, NCHFH will sell these homes to approved Habitat partner families that earn less than 50% of the area median income (AMI). The properties will be purchased within 18 months of the receipt of the NSP funds by the Grantee and all renovations and sales to approved Habitat partner families will be completed within 5 years. The purchase price for these homes 49

50 will comply with the requirements of HERA and the NSP regulations, and will be paid pursuant to a 0 percent purchase money mortgage under the following terms: No Interest Charged: The mortgage financing that is provided will charge no interest. First Mortgage Term: The term of the mortgage will be 20 years unless a longer term is required by local real estate conditions to keep the house affordable. Fully Amortizing First Mortgage Loans: The loans secured by the mortgage will fully amortize over the set term of the mortgage. Balloon Loans Prohibited: Loans, which require full payment before the end of the term of the loan, are prohibited. Use of Habitat House: NCHFH shall require that the homeowner use the house as their principal/primary residence. In order to maintain the continued affordability of the home, NCHFH will incorporate a right of first refusal in all mortgage documents. This allows NCHFH to retain the home as an affordable unit of housing, and can inhibit predatory lenders from gaining a controlling interest in the property. In addition, NCHFH will require the partner families to enter into an equity sharing second mortgage that will allow NCHFH to claim a percentage of the increase in the appreciation in the value of the home over and above the initial appraised value of the home and excluding capital improvements made to the home by the partner family. NCHFH s claim to the value of this shared appreciation of the home may only be exercised upon foreclosure, sale, transfer of title, or full payment or refinancing of the home or the first mortgage. NCHFH s formula for this shared appreciation value shall be determined by calculating the difference between the appraised value of the home and the NCHFH s selling price to the partner family. The term of the shared appreciation silentsecond mortgage shall be 20 years. The shared appreciation value will depreciate by 1/20 th each year. All mortgage payments and shared appreciation proceeds received by NCHFH from these mortgages will be retained by NCHFH in a segregated account and will be used by NCHFH to provide funding to build more homes for Habitat partner families on the same mortgage terms. This model will further leverage the NSP funds and ensure the continued affordability of these homes pursuant to Section 2301(c)(3)(a) of HERA. After five years, (or at such other time as may be agreed to by NCHFH and the Grantee), the term of the NSP loan will mature. At this time, upon successful completion of NSP activities, the entire NSP loan to NCHFH will be forgiven, in accordance with language released by HUD, November NSP revenue will not need to be returned to the US Treasury, but will be continued to be used by NCHFH for other regular business activities to provide affordable financing mechanisms through self-help homeownership opportunities to low-income families living in Coweta County. 50

51 G (2). NSP INFORMATION BY ACTIVITY (Complete for each activity). (1) Activity Name: Acquisition - (Housing Authority of Newnan) (2) Activity Type: (include NSP eligible use & CDBG eligible activity) Eligible NSP Use: NSP (B), (C), (E) CDBG Eligible Activity 24 CFR (a) 24 CFR (b) (3) National Objective: (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). Low-Moderate-and Middle Income Area Benefit (LMMA) Low-Moderate and Middle Income Direct Housing Benefit (LMMH) Low-Moderate-and Middle Income Limited Clientele Benefit (LMMC) Low-Moderate-and Middle Income Job Benefit (LMMJ) (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. Coweta County is made up of diverse population groups with a wide range of income levels. Statistics gathered from independent sources indicate that NSP funding would greatly benefit Coweta County if focused in the neighborhoods located within the City of Newnan and East Newnan Census Designated Place (CDP) with the United States Postal Service Zip area code of This area includes all or part of Census Tract Areas 1707, 1706, , , and Statistics from HUD show: Over one fifth of all mortgage loans made in Newnan City and East Newnan CDP during 2004 to 2006 were high cost subprime mortgage loans. Census Tract areas located in Newnan city and East Newnan CDP have estimated 90-day vacancy rates that exceed the county 3.3 percent vacancy rate. HUD statistics report Newnan City has the highest unemployment rate in Coweta County of 5.9 percent. Census Tract Areas located within the City of Newnan were reported by HUD to have the highest estimated foreclosure abandonment risk scores in Coweta County. The Housing Authority of Newnan (HAN) is currently located in Newnan, Georgia. HAN provides rental assistance for clients located all over Coweta County with 51

52 properties located in and within a ten-mile radius of the City limits of Newnan, and within the city limits of Senoia. HAN currently serves individuals and families whose income cannot exceed 80 percent of the area median income (AMI). The majority of the families served by HAN have incomes below 30% of the AMI. HAN will maintain compliance with Section 2301(f)(3)(A)(ii) of HERA and will focus on providing affordable rental housing to eligible families. HAN will ensure that the residential properties purchased, rehabilitated or redeveloped under this activity will be rented to individuals or families whose incomes do not exceed 80 percent of AMI. HAN will ensure that 50% or no less than 3 residential properties purchased with NSP funds will be made available to families or individuals whose incomes do not exceed 50% AMI. HAN presently has 317 applicants on its waiting lists. (HAN receives an average of 45 applications per week). HAN will conduct rent reasonableness on all properties to insure the rents are affordable to eligible families. The anticipated rents will be at least 20-25% under Fair Market Rent (FMR) for the area. HAN will reinvest all rental receipts to the upkeep and maintenance of each property. A portion of the rental receipts will be placed in an individual saving escrow account to be used by the families to purchase their homes. (5) Location Description: (Description may include specific addresses, blocks or neighborhoods to the extent known.) NSP funds will be used to purchase REO properties located in United States Postal Zip Codes of 30263, and 30259, City of Newnan and East Newnan CDP, City of Grantville and Moreland Town, Georgia. Twenty eligible REO properties have already been identified in the area code. Negotiations with banks regarding these properties are in process. For more information regarding these properties please contact NCHFH. (6) Performance Measures (e.g., units of housing to be acquired, rehabilitated, or demolished for the income levels of households that are 50 percent of area median income and below, percent, and percent). The performance of the activity will be measured as follows: 1. The number of properties acquired, renovated and/or rehabilitated 2. The number of families who rent the NSP properties 3. The number of families who complete the FSS requirements and purchase their home 4. The number of families whose income meet the 50% or less of area median income 52

53 5. The number of families whose income meet the 80% or less of area median income (7) Total Budget: (Include public and private components) $599,634 NSP subrecipient grant agreement with HAN As a subrecipient of the NSP grant, HAN will acquire and rehabilitate no less than 6 housing units (each costing no more than $99,939) When necessary HAN will rehabilitate NSP funded properties to acceptable living standards, in compliance with the DCA rehabilitation standards referenced in section (C)(4) of the Proposed Substantial Amendment Plan. HAN will then provide affordable rents through 6 rental opportunities to prequalified low-income families earning less than 50% and 80% of the AMI. (8) Responsible Organization: (Describe the responsible organization that will implement the NSP activity, including its name, location, and administrator contact information) Housing Authority of Newnan (HAN) 48 Ball Street, Newnan, GA Sandra Strozier, President and CEO sstrozier@numail.org (9) Projected Start Date: March 2009 (10) Projected End Date: March 2013 (11) Specific Activity Requirements: For acquisition activities, include: discount rate For financing activities, include: range of interest rates For housing related activities, include: duration or term of assistance; tenure of beneficiaries--rental or homeownership; a description of how the design of the activity will ensure continued affordability The Housing Authority is a public quasi-governmental agency and will become a sub recipient of NSP funds pursuant to a grant agreement with the Grantee. NSP funds will be 53

54 used to acquire, rehabilitate and redevelop abandoned and foreclosed properties in accordance with the terms of HERA and all applicable NSP regulations. All properties purchased with NSP funds will be purchased at least 15% below certified appraisal value. Upon completion of purchase (and rehabilitation if needed), HAN will rent these homes to approved families that earn less than 50 percent and 80 percent of AMI. No less than one forth (1/4) of the properties will go to families making no more than 50 percent of the AMI. These properties will be purchased and rehabilitation work completed within 18 months of the receipt of the NSP funds by the Grantee. All homes will be rented within four years of the receipt of funds from the NSP program in Coweta County. Family Self-Sufficiency Program The Housing Authority of Newnan has operated a Family Self Sufficiency (FSS) Program since HAN has modified the FSS program to create a new program for families served by NSP funds. This program shall be called the National Stabilization Program-Family Self Sufficiency (NSP-FSS) program. Families and individuals served by NSP funds will have the opportunity to be enrolled in the Neighborhood Stabilization Program - Family Self-Sufficiency Program for a period of up to four (4) years from the start date of the NSP in Coweta County. The FSS program empowers people by combining housing assistance programs with a package of supportive services. FSS families work in partnership with the Housing Authority to set goals and obtain the skills they need to achieve financial independence and the pride that goes with it. Once a family is determined to be eligible to participate in the program, the family must comply with the following additional requirements: A. Complete a homeownership counseling program approved by HAN prior to commencement of homeownership assistance; B. Within a specified time if they do not intend on buying the home they are renting, locate the home they propose to purchase; A. Submit a sales agreement containing specific components to HAN for approval; B. Allow HAN to inspect the proposed homeownership dwelling to assure that the dwelling meets appropriate housing standards; C. Obtain an independent inspection covering major building systems; D. Obtain HAN approval of the proposed mortgage (which must comply with generally accepted mortgage underwriting requirements), E. Maintain an active bank account to cover the initial cost of loan application, earnest money, independent inspector fees, possible down payment and any other fees deemed necessary to complete the homeownership transaction; F. Enter into a written agreement with HAN to comply with all of its family obligations under the NSP program and any other provisions deemed necessary 54

55 Individual Saving Escrow Account The Housing Authority will offer a financial incentive to NSP families who are enrolled in the FSS program through the establishment of an individual saving escrow account based on the families earned income. This escrow becomes available to the family upon successful completion of their Contract of Participation, or upon achievement of certain interim goals. These savings can be used for the purchase of their first home. Each family will have the opportunity to purchase a home when they have completed all program requirements. Homeownership Workshop Classes A family s participation in the homeownership program is conditional upon the family attending and successfully completing a homeownership and housing counseling program approved by HAN prior to commencement of homeownership assistance. All families and individuals served by HAN shall attend Homeowner Workshop Classes provided Newnan-Coweta Habitat for Humanity (conditional upon HUD approval). These home ownership and counseling workshops will cover home maintenance; budgeting and money management; credit counseling; negotiating purchase price; securing mortgage financing; and finding a home and individual counseling will be available for each individual attending workshops in each subject offered. Continued Affordability HAN shall determine the affordability of each FSS family s proposed financing. In making such determination, HAN may take into account other family expenses, including but not limited to childcare, un-reimbursed medical expenses, education and training expenses, etc. The purchase price for any NSP home financed through HAN will comply with the requirements of HERA and the NSP regulations. Certain types of financing, including but not limited to, balloon payment mortgages, and predatory lending activities are prohibited. If a mortgage is not FHA insured, HAN will require the lender to comply with generally accepted mortgage underwriting standards consistent with those HUD/FHA, USDA Rural Housing Services, the Federal Home Loan Bank, or other approved private lending institutions. HAN will incorporate a right of first refusal in all mortgage documents. This will allow HAN to ensure the continued affordability of the property. All income received from the sale of NSP Homes will be used to purchase additional affordable housing for rental and/or purchase activities through the Family Self Sufficiency program. Case Management Services Each family and individual served by NSP funds will receive Case Management Services during the four-year period. A Case Manager will be assigned to co-ordinate the NSP 55

56 Family Self-Sufficiency (FSS) Program. The Case Manager will work closely with all families and individuals served by NSP funds to ensure their success with the program. The Case Management worker will conduct in home visits with each family; provide private one-on-one personal financial counseling and basic home budgeting advice. The Case Management worker will ensure the families and individuals are aware of and have access to all public services available in the area, and if required act as a spokesperson and liaison for the family when assistance is necessary. NSP Income Revenue HAN will continue to own and operate the rental units purchased with NSP funds. All net operating income received by HAN with respect to the rental units will be held in a segregated account and used for new NSP appropriate projects for so long as the NSP program is outstanding, and thereafter on other affordable rental within HAN s service area (which may or may not be for NSP specific purposes). Net Operating Income for purposes of HAN s NSP program is rents received from a project, less the cost to operate and manage the project, less reasonable replacement reserves. 56

57 G (3). NSP INFORMATION BY ACTIVITY (Complete for each activity) (1) Activity Name: Administration (2) Activity Type: NSP eligible use: CDBG eligible activity: NSP (A), (B), (D), (E) 24 CFR (a) As modified by HERA and following the HUD Notice: Docket No. FR N-01. (3) National Objective: (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). Low-Moderate-and Middle Income Area Benefit (LMMA) Low-Moderate-and Middle Income Direct Housing Benefit (LMMH) Low-Moderate-and Middle Income Limited Clientele Benefit (LMMC) Low-Moderate-and Middle Income Job Benefit (LMMJ) (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. Not Applicable. (5) Location Description: (Description may include specific addresses, blocks or neighborhoods to the extent known.) Not Applicable. (6) Performance Measures (e.g., units of housing to be acquired, rehabilitated, or demolished for the income levels of households that are 50 percent of area median income and below, percent, and percent). Not Applicable. (7) Total Budget: (Include public and private components) No more than 6% of total NSP funds requested for Coweta County will be used for administration purposes. Funds will be used as follows: NSP Grant Administrator Salary: $100,000 ($20,000 per year for four years) HAN Case Management Services: $ 20,000 ($5,000 per year for four years) Other administrative expenses: $ 5,241 Total NSP Administrative Funds: $125,241 57

58 (8) Responsible Organization: (Describe the responsible organization that will implement the NSP activity, including its name, location, and administrator contact information). Newnan-Coweta Habitat for Humanity Housing Authority of Newnan 1082 Highway 16 East, 48 Ball Street, Newnan, GA Newnan, GA Leslie Merriman, Executive Director Sandra Strozier, President and CEO (9) Projected Start Date: March 2009 (10) Projected End Date: March 2014 (11) Specific Activity Requirements: For acquisition activities, include: discount rate Not applicable. For financing activities, include: range of interest rates Not applicable. For housing related activities, include: duration or term of assistance; tenure of beneficiaries--rental or homeownership; a description of how the design of the activity will ensure continued affordability Not applicable. 58

59 H. BUDGET SUMMARY Complete a budget summary for each activity including source(s) of funds and use(s) for each activity proposed in Section G. See the guidance below for the preparation of DCA NSP Form H. The purpose of this form is to allow applicants to describe, in detail, the resources available, or to be made available, for each activity. Applicants are encouraged to provide sufficient quantifiable data and to describe supporting efforts for the proposed program. Form DCA NSP Form H should be backed-up by credible estimates of program cost prepared by individuals and agencies qualified to provide them. Leverage may be cash or in-kind services. Its source may be local public funds, other state or federal funds, or private investments or contributions. Whatever the source, it must be evidenced by a firm written commitment in order to demonstrate a proposed program s readiness to proceed. Line item instructions In column 1, list the NSP eligible use using the uses found in the HERA statute at Title III, 2301(c) and at the federal register at FR-5255-N-01. Rather than stating each use in its entirety, please use the appropriate letter found in the law and the federal register. For example, use the letter (D) to indicate the use as Demolish Blighted Structures. In column 2, list the activity name and number. See the note on the activity numbering system below. In column 3, briefly itemize NSP funds allocated for each activity. These brief summaries can reference additional detail that may be included in reports and attached to the application. The purpose of this form is to allow a review panel to compare unit costs. Be sure to provide units and costs (i.e., "construct 5,000 SF health $75 SF -- total cost: $375,000). Total engineering and architectural costs must be itemized here and shown in columns 3 though 6. Housing applications including rehabilitation activities for units constructed prior to 1978 should budget an additional 25% of the total estimated rehabilitation cost to fund compliance with lead-based paint regulations. Sufficient detail should be provided in this column to support proposed engineering and inspection fees. Such data should include detail on proposed services, as well as estimated fees for design services, 59

60 conferences, travel, resident and periodic inspections, tests, surveys, printing and reproduction, additional services, etc. In column 4 reference the NSP cost, if any, for each item shown in column 2. If the item in column 2 will not be paid for with NSP funds, indicate by placing a -0- in column 4. In column 5 show the amount of "other funds" (not NSP) that will be used to pay for itemized costs. The source of these funds should be identified on column 6. In column 7, enter the total amount of funds available to carry out the proposed activity. On each page of DCA NSP Form H use block 8 to subtotal columns 3, 4 and 5. On the final page, use block 9 to total all pages. Attach clear commitments from the appropriate agencies. Note on Activity Numbering System The activity number is used in this application on the DCA NSP Form H. In all instances, the activity should be referred to both by the activity number and activity name, as explained further below. In addition, all activities must be eligible as listed in the federal register at FR-5255-N-01. The activity number system has two components: For example: The prefixes indicate the purpose of the activity as follows: A = Administration E = Economic Development H = Housing P = Public Facility T = Engineering S = Architecture The second component is the budget code. The codes can be found below. Every code is comprised of three (3) alpha or numeric characters followed by a hyphen and then two (2) additional numeric characters. This code indicates the type of activity. P = Acquisition of Property for a Public Facility H = Acquisition of Property for Housing A-21A-00 = Grant Administration 60

61 Acquisition of Property (all acquisitions) Disposition of Property Public Facilities and Improvements (other) Domestic Violence Shelter Group Home Learning Center 03A-00 Senior Centers 03B-00 Centers for the Disabled/Handicapped 03C-00 Homeless Facilities (not operating costs) 03D-01 Boys and Girls Club or other At Risk Facility 03D-02 Youth Shelter 03E-00 Neighborhood Facilities 03G-00 Parking Facilities 03M-01 Child Care Center 03M-02 Head Start Center 03P-01 Health Center - Mental 03P-02 Health Center Physical 03P-03 Health Center - Mental and Physical 03Q-00 Abused and Neglected Children's Facilities 03F-00 Parks, Playgrounds and other Rec. Facilities Public Utilities, other than Water & Sewer Fac. Budget Codes 03K-01 Street Improvements 03J-01 Water Facilities 03J-02 Sewer Facilities 03L-00 Pedestrian Walkways 03K-02 Flood and Drainage Facilities 03S-00 Facilities for AIDS Patients (not operating) Clearance Public Services (General) Relocation Payments and Assistance Payments for Loss of Rental Income 14C-00 Rehabilitation of Public Residential Structures 14A-01 Rehabilitation of Private Properties Code Enforcement 14A-02 Reconstruction of Private Properties Site Development Housing Construction Homebuyer Education Down payment/closing Cost Assistance X00-00 Other - General (Attach Description) Planning 21A-00 Administration (General) 61

62 Georgia Department of Community Affairs NSP Program Budget Analysis Applicant: City of Newnan, Georgia Original: X Amendment dated: 1 NSP Eligible Use 2 Activity Name/Number 3 Itemized Unit Costs 4 NSP Funds (A) Property Acquisition H NCHFH to purchase 14 eligible $99,939 each 5 Other Funds 6 Source of Other Funds 7 Total Cost $1,399,146 0 N/A $1,399,146 (B) Property Acquisition H HAN to purchase 6 eligible $99,939 each $599,634 0 N/A $599,634 Administration H-21A-00 Administration H-21A-00 Administration H-21A-00 $100,000 NSP Grant Administrator $20,000/year x 5 years $20,000 HAN Case Management $5,000/year x 4 years $5,241 Other Administration Costs $100,000 0 N/A $100,000 $20,000 0 N/A $20,000 $5,241 0 N/A $5,241 8 Subtotal $2,124,021 $2,124,021 0 $2,124,021 9 Grand Total (if final page) $2,124,021 $2,124,021 $0 $2,124,021 Check here if continued on additional pages: Page 1_ of _1 DCA NSP Form H 62

63 APPENDIX 1 FORGIVABLE LOAN LANGUAGE RELEASED BY HUD FOR NON-PROFIT ORGANIZATIONS Source: faq.cfm FINANCING MECHANISMS Posted 11/7/08 Posted 11/7/08 A grantee wishes to make a loan (the NSP Loan ) to a non-profit entity (the Developer ) to finance the purchase of foreclosed upon homes and residential properties for rehabilitation (or redevelopment) and resale to lowand moderate-income homebuyers. Upon completion of the rehabilitation (or redevelopment), the Developer will sell each property to an NSP income eligible homebuyer and take back a purchase money mortgage (i.e., a promissory note secured by a lien on the property). The payments received by the Developer on the purchase money mortgages will be used by it in accordance with NSP requirements to finance the purchase and rehabilitation (or redevelopment) of additional foreclosed upon properties for subsequent resale to NSP income eligible homebuyers. The Developer will take back a purchase money mortgage on each sale. The terms of the NSP Loan may provide for no interest and no principal amortization until the maturity date, and may contain such other terms as may be negotiated between the Developer and the grantee, subject to compliance with applicable NSP requirements. The NSP Loan terms may also provide for forgiveness of the Developer s repayment obligations, in whole or in part, upon completion of the approved activities, as specified in the NSP Loan agreement, in accordance with NSP requirements. Is this activity eligible? The activity can be carried out as a financing mechanism pursuant to Section 2301(c)(3)(A) if the grantee provides the NSP funds to the Developer as a loan that is evidenced by a promissory note or other obligation. The financing mechanism can be used to carry out the correlated eligible activities for Section 2301(c)(3)(A) that are listed on page of the NSP Notice published in the Federal Register on October 6, Posted 11/7/08 Must the revenue received by the Developer from payments on the purchase money mortgage be returned to the grantee or can it be retained by the Developer for similar uses? 63

64 The NSP Notice provides that revenue received by a private individual or other entity that is directly generated by an activity carried out pursuant to Section 2301(c)(3)(A) must be provided to the grantee. However, since the grantee could immediately use that revenue to make another loan to the Developer for a similar activity, the loan agreement between the grantee and Developer can provide for continued use as described above, subject to compliance with all applicable NSP requirements. Grantees are reminded that Section 2301(d)(3) provides that, if an abandoned or foreclosed-upon home or residential property is purchased, redeveloped, or otherwise sold to an individual as a primary residence, then such sale shall be in an amount equal to or less than the cost to acquire and redevelop or rehabilitate such home or property up to a decent, safe, and habitable condition. Posted 11/7/08 Must the revenue be returned to HUD after five years? Revenue generated by activities carried out pursuant to Section 2301(c)(3)(A) does not have to be returned to the grantee after five years. 64

65 APPENDIX 2 01/06/ NCHFH HOMEOWNER WORKSHOP FLYER Learn how to Own and Maintain your Own Home? Free Classes Start 7p.m. 8:30p.m. Each Tuesday from July 8-Sept. 16 For More Information call: 770/ Habitat for Humanity Family Support Workshop Curriculum 2008 Class 1 Intro to Habitat for Humanity July 8 Class 2 Record Keeping July 15 Class 3 Climbing Out of Debt July 22 Class 4 Financial Planning July 29 Class 5 Understanding Home Mortgage Aug. 5 Class 6 Home & Lawn Maintenance Aug. 12 Class 7 Construction & Home Safety Aug. 19 Class 8 Construction (Continued) Aug. 26 NO Class Sept. 2 Class 9 Painting Sept. 9 Class 10 Being a Good Neighbor Sept. 16 Classes 1 thru 6 held at: Bank of Coweta Annex Building (main office at Bullsboro/Jefferson) Classes 7 thru 10 held at: CEC (Central Education Center)/Construction Department/160 Martin Luther King Dr. (call 678/ for Directions) 65

66 01/06/ PALMETTO Grant Application Map January V U Legend Zip Codes 29 V U 14 Census Tracts East Newnan V U V V U U V U 154 V U NEWNAN East Newnan SHARPSBURG TURIN V U V U SENOIA MORELAND µ U V V U GRANTVILLE HARALSON Miles 66