January 1, 2016 thru March 31, 2016 Performance Report

Transcription

1 Grantee: Grant: Mohave County, AZ B-11-UN January 1, 2016 thru March 31, 2016 Performance Report 1

2 Grant Number: B-11-UN Grantee Name: Mohave County, AZ Grant Award Amount: $1,990, LOCCS Authorized Amount: $1,990, Total Budget: $2,585, Obligation Date: Contract End Date: 03/16/2014 Grant Status: Active Estimated PI/RL Funds: $594, Award Date: Review by HUD: Reviewed and Approved QPR Contact: Jennifer Burch Disasters: Declaration Number No Disasters Found Narratives Summary of Distribution and Uses of NSP Funds: NSP3 GRANTEE INFORMATION Jurisdiction: Mohave County Arizona Jurisdiction Web Address: NSP Contact Person: Dave Wolf, Housing and Community Revitalization Manager Address: PO Box 7000 Kingman, AZ Telephone Fax: Public comments were accepted on this draft Plan from January 14, 2011 through February 1, Introduction and Executive Summary On October 14, 2010 HUD published in the Federal Register its Notice of Formula Allocations and Program Requirements for Neighborhood Stabilization Program Formula Grants. Mohave County received a Neighborhood Stabilization Program 3 (NSP3) formula allocation of $1,990,744. NSP3 funds are distributed based on funding formulas for such amounts established in accordance with the Housing and Economic Recovery Act of 2008 (HERA). Mohave County received NSP3 funding based on: 1. The number and percentage of home foreclosures. 2. The number and percentage of homes financed by a subprime mortgage. 3. The number and percentage of homes in default or delinquency. The NSP3 allocation is a one-time allocation; Mohave County must expend at least 50% of the allocated funds within two years and 100% within three years. 2

3 The purpose of NSP3 funds is to assist in the redevelopment of abandoned and foreclosed homes. Mohave County must use the funds to stabilize neighborhoods whose viability has been, and continues to be, damaged by the economic effects of properties that have been foreclosed upon and abandoned. HUD requires that Counties not receiving a direct allocation of Community Development Block Grant (CDBG) funds prepare and submit an Abbreviated Consolidated Plan, which serves as the application for NSP3 resources. This Abbreviated Consolidated Plan describes market conditions in Mohave County and each of the County s three NSP3 "areas of greatest need." It further describes how the County will utilize its NSP3 resources to address market conditions, and provides important definitions for understanding how NSP3 activities will be implemented. The County will target NSP3 resources in three areas of Kingman, Lake Havasu City, and Bullhead City. These areas have been identified by Mohave County as the areas of greatest need. Within these areas, the County will undertake the following two activities: 1 Acquisition, rehabilitation and resale of foreclosed or abandoned/vacant housing units for occupancy by homeowners combined with down payment and closing cost assistance and direct loans for households with incomes 50% or less of the county median income. 2 Program administrations and planning. Using NSP3 resources, the County will acquire, rehabilitate and resell up to 20 homes for occupancy by homeowners. Buyers purchasing NSP3 acquired and rehabilitated properties must earn less than 120% of the County median income. At least 25% of NSP3 resources (approximately $500,000) will assist homebuyers with incomes 50% or less of the County median income. All buyers will receive down payment and closin Summary of Distribution and Uses of NSP Funds: cost assistance of 5% of the after-rehabilitation resale (purchase) price; Buyers with incomes 50% or less of the County median income eligible for dirt loans. The budget for this program is $1,990, The breakdown for this is $1,791, for acquisition and rehabilitation for resale, combined with down payment and closing cost assistance and direct loans, this is a total of 20 homeownership units targeting all areas. The amount $199, will be used for administration of all activities. AREAS OF GREATEST NEED Maps: NSP3 Areas of Greatest Need Maps for each of the three Mohave County NSP3 Areas of Greatest Need are included as Attachment 1. Mohave County Geographic, Socio-economic and Housing Profile Mohave County is located in the northwestern corner of Arizona. According to the US Census Bureau, the County is the fifth largest in the contiguous United States with a total area of 13,470 square miles. The Colorado River forms most of the County's western boundary, and California, Nevada and Utah all border it. The Colorado River also runs east to west through Mohave County, dividing it between two of Arizona's geographic regions, the Arizona Strip to the north and the Mojave Desert to the south. Less than twenty percent (17.2%) of land in the County is privately owned. The vast majority of the land is government held. The U.S. Forest Service and Bureau of Land management own more than half (55.2%), the State of Arizona owns 6.6%, Indian reservations comprise 6.7%, and other public lands 14.3%. Mohave County contains parts of Grand Canyon National Park, Lake Mead National Recreation Area and all of the Grand Canyon-Parashant National Monument. The Kaibab, Fort Mojave and Hualapai Indian Reservations also lie within the County. The population density of Mohave County in 2000 was 12 people per square mile. The County includes five communities with a population over 4,000: Lake Havasu City is the largest (55,429), followed by Bullhead City (41,187), Kingman (28,823), New Kingman/Butler (4,922) and Colorado City (4,042). The Mohave County seat is Kingman. Mohave County experienced rapid growth during the past several decades. This growth may be attributed to a number of factors including the early retirement of baby boomers, the attractiveness of Mohave County for seasonal homeowners, and expansion in the housing market and housing-related economy. According to the US Census Bureau, the population increased 20.4% from 155,032 in 2000 to 194,907 in During the same period households increased 19.4% from 62,809 in 2000 to 75,010 in The average household size is 2.6 people. According to the 2000 Census, 25.1% of households include dependent children, 55.1% are married couples, 9.3% are single-female heads of household and 30.9% are non-families. Nearly one-quarter (24.1%) of all households are single person households, and 11.3% are a singleperson over the age of 65. The racial makeup of the County is 90% White, 4% "other" races, 2.4% Native American and 2% two or more races. Black or African American, Asian, and Pacific Islander races each represent less than 1% of the population. Eleven percent (11%) of the population is Hispanic or Latino. 3

4 Economic growth will be essential to the stabilization of the housing market. T Summary of Distribution and Uses of NSP Funds: e Mohave County Community Services Department (MCCSD) provides an integrated approach of programs and services to support local business start-up and expansion, as well as the attraction of companies and industries that offer high value jobs and share the county's values. 1. Increase employment opportunities, population and tax base. 2. Strategically position communities and businesses to better compete in the global economy. 3. Facilitate the formation high-paying jobs for the workforce. To accomplish these goals, MCCSD is working to attract, expand and retain primary-sector businesses an actively pursuing target industries, building partnerships to develop programs and opportunities for employers, administering a variety of programs, and facilitating access to financial incentive and employee training programs for business. Most recently, a trucking company relocated to Kingman bringing 100 new jobs to the area. The County Planning and Zoning Commission approved a solar plant that will generate between 2,500 and 3,000 jobs during construction and between 400 and 500 permanent jobs thereafter. The site of the new plant is on a formerly master-planned housing community and will provide not only additional low-cost electricity but will also use comparatively little water, a significant energy concern in the desert southwest. The County is working with Mohave Community College to develop a new curriculum that will train eligible residents to work at jobs in the new solar plant facilities moving to Mohave County. The County has utilized stimulus resources for workforce development activities to further stabilize the economy. The County created a fasttrack adult education program that provided education and training to 190 adults in the most in-demand job fields, such as medical billing coding, heating ventilation and air-conditioning, medical assistance, and certified nursing assistant. Eligible students received assistance with tuition, books, and transportation. According to the 2000 Census, there were 80,062 housing units in Mohave County in The housing stock consisted of 41,548 (52%) single-family detached, 1,582 (2%) single-family attached, 3,355 (4%) 2-4 unit structures, 1,512 (2%) multi-family structures and 26,622 (33%) manufactured or mobile homes. From 2000 to 2008, an additional 20,582 (26%) units were added to the housing stock. According to the 2006/2008 US Census Bureau American Community Survey, the majority (86% or 17,768) of new units were single-family detached; 878 (4%) were single-family attached, 1,090 (5%) were 2-4 unit structures, 550 (3%) were multi-family structures and 1,050 (5%) were manufactured or mobile homes. Vacancy, Occupancy and Tenure While the population and number of housing units increased significantly between 2000 and 2008, the US Census Bureau reports that vacant units increased 49% from 17,253 in 2000 to 25,364 in Among vacant units, seasonal units increased 45% from 10,681 in 2000 to 15,478 in 2008, vacant rental units increased 33% from 1,687 in 2000 to 2,242 in 2008, and the number of for-sale vacant units increased 92% from 1,806 to 3,471. Among occupied units in 2000, 74% (46,229) were owner occupied. By 2008, owner-occupancy declined to 69% (51,764 units), while renter occupancy increased from 2 Summary of Distribution and Uses of NSP Funds: % (16,580 units) in 2000 to 31% (23,246 units) in Mohave County Foreclosure Profile Census, HUD and other data suggest that the foreclosure market in Mohave County was driven by four primary factors: 1. Demand from investors and second home buyers that drove up housing prices; 2. Liberal financing conditions early in the decade followed by tightened financing conditions later in the decade; 3. Over building; and 4. Unemployment. Demand from Investors and Second Home Buyers According to the US Census Bureau, median income increased from $31,521 in 2000 to $39,578 in 2008, or 25.6%. During the same period, the number of housing units increased by 20,582 or 25.7% and the median value of housing increased 140.0% from $75,900 to $191,500. The Mohave County median household income is $47,600. The following income information demonstrates an average affordable mortgage for NSP3-eligible households at various income levels, assuming that a household could afford a housing 4

5 unit priced at an amount equal to 3 times their annual household income. A household income of $23,800 which is 50% of Mohave County median income will allow for an affordable mortgage of $71,400; $38,080 which is 80% of Mohave County median income will allow for an affordable mortgage of $114,240; $47,600 which is 100% of Mohave County median income will allow for an affordable mortgage of $142,800; and 57,120 which is 120% of Mohave County median income will allow for an affordable mortgage of $171,360. Financing Conditions According to US Department of Housing and Urban Development NSP3 Home Mortgage Disclosure Act (HMDA) data, there were 41,082 primary mortgages executed in Mohave County between 2004 and Of these loans, 23% or 9,449 were high cost loans. High cost loans indicate a greater risk of foreclosure. The estimated rate of mortgages that are seriously delinquent (90+ days delinquent or in foreclosure) is 14% or 5,751 loans. The number of foreclosure starts in the past year is 3,428. Many high-cost and high-leverage loans were possible as a result of non-traditional mortgages issued earlier in the decade. For many low, moderate and middle-income households, non-traditional mortgages were the only option as housing prices skyrocketed. Since 2007, when the real estate market weakened, lending practices have changed significantly. While housing prices have declined and opened the market to low, moderate and middle-income buyers, non-traditional mortgages are not typically available and credit requirements have become more stringent. The Federal Reserve Bank conducts a quarterly "Survey on Bank Lending Practices". The survey measures changes in the supply of, and demand for, bank loans to businesses and households over the past three months. For the July 2010 survey, banks reported that demand for business and consumer loans was about unchanged. The survey results suggest that lending conditions are beginning to ease, yet that improvement has been concentrated at large domestic banks. In terms of residential real estate loans, a small fraction of large banks reported having eased standards on prime residential mortgage loans as demand for such mortgages is reported to have increased. Less than one-half of the survey respond Summary of Distribution and Uses of NSP Funds: nts indicated that their bank originated non-traditional mortgage loans. In the April 2010 survey, one-third of banks reported that demand for non-traditional mortgages had weakened. For many low, moderate and middle income buyers, FHA-guaranteed loans are the most viable financing option. According to the November 2010 FHA annual report to Congress, FHA loans accounted for nearly 40% of all purchase mortgages between November 2009 and November In 2005, the FHA's market share of purchase loans was closer to 5%. FHA's market share generally follows lending trends - when lending trends are relaxed as they were in the early 2000 s, more borrowers had access to loans and did not need FHA insurance. Effective October 4, 2010, the FHA introduced new guidelines on loan to value ratios and the minimum credit score required for FHA borrowers: To be eligible for maximum financing, borrowers need a minimum credit score of 580 or higher. Borrowers with a credit score between 500 and 579 are limited to a loan to value of 90%, requiring a minimum 10% down payment on a purchase transaction. All borrowers with a credit score below 500 are not be eligible for FHA-insured mortgage financing. Despite FHA's requirements, most lenders have imposed a minimum credit score requirement of 640 or higher for FHA borrowers. Generally speaking, a credit score of 720 or above earns borrowers the most favorable interest rate and other terms and conditions. Borrowers with scores between 675 and 720 are generally able to find acceptable interest rates and loan terms, but borrowers below 620 currently have great difficulty finding acceptable loans. Very low income borrowers may have not established credit or their credit may have one or more blemishes that limit financing options, making necessary alternative loan sources. Further, saving for the necessary down payment and closing costs can be challenging. For example, a borrower wishing to purchase a home priced for $100,000 must save at least $3,000 for most "affordable housing" loan programs. For these reasons, additional outreach will be necessary to identify and prepare a pool of qualified buyers. There are an estimated 65 prepared buyers on waiting lists for housing programs available through the County's Section 8 homeownership program and the Housing America Corporation. Over Building Relatively inexpensive land combined with high demand from both owners and investors resulted in continued building even as the market slowed. According to HUD SOCDS (state of the cities data system) data, from 2001 to 2006, 17,294 single-family building permits were issued in Mohave County (2,882/year average). While the housing market began to show signs of weakness in 2007, 2,265 single-family building permits were issued and an additional 1,127 were issued in In 2009, only 455 single-family permits were issued and in 2010, only 261 were issued. Employment and Unemployment In 2008, major industries in Mohave County included Retail Trade, Health Care & Social Assistance, and Construction. The unemployment rate was 4.4% in 2000, 6.5% in 2008, and an estimated 10.4% in Unemployment is particularly worrisome in Mohave County as only 34.5% of the population was in the labor market in A large proportion of the population receives inc 5

6 Summary of Distribution and Uses of NSP Funds: me from non-labor sources such as dividends, interest, rent and government transfer payments such as retirement, disability benefits, welfare and other federal benefits. The median wage in 2008 was $27,747, or 70% of the median income, with a median entry wage of $17,867 and a median wage for experienced workers of $41,787. Units in Foreclosure Internet real estate resources and local multiple listing service (MLS) data provide addition references for understanding housing market conditions. According to realtytrac.com, one in every 236 housing units in Mohave County was subject to foreclosure action in November Among the currently-listed 3,745 foreclosed units, the average value is $153,415, with the largest volume of units (733) in the $100,000 - $200,000 price range. There are 236 units in the less than $100,000 price range. Nearly one third of units have square footage between 1,200 and 1,600 square feet and one in five are 3-bedroom units. NSP3 Target Areas Introduction HUD has developed a model for predicting where foreclosures are likely. That model estimates serious delinquency rates using data on the leading causes of foreclosures - subprime loans (HMDA Census Tract data on high cost and highly leveraged loans), increasing unemployment (BLS data on unemployment rate change), and fall in home values (FHFA data on house price change). The predicted serious delinquency rate is then used to apportion the state total counts of foreclosure starts (from the Mortgage Bankers Association) and REOs (from RealtyTrac) to individual block groups. This data established the index score for an area. The index score ranks need from 1 to 20, with 20 being census tracts with the HUD-estimated greatest need. The neighborhoods identified by the County as being the areas of greatest need must have an individual or average combined index score that is not less than the littlest of 17 or the twentieth percentile most needy score in an individual state. According to HUD's NSP3 data, Mohave County home prices have declined 37.9% since their peak. In greatest need neighborhoods throughout Mohave County, there have been an estimated 5,633 foreclosure starts or REO completions in the past 3+ years and 2,855 housing units have been vacant for 90 or more days. Considering Home Mortgage Disclosure Act (HMDA) Data, from 2004 to 2007, 12.5% of loans were low cost-high leverage, 8% of loans were high cost-high leverage, and 12.4% of loans were high cost-low leverage. A County is an arm of State Government created to carry out State mandates on a local level. County duties are mandated by Arizona Statutes. The Board of Supervisors is the governing body of Mohave County. Its duties, by State law, are both legislative and executive. The Board, as a body, is responsible for the overall management of the County government operations. The Board appoints a County Manager, responsible for the day to day operation of the County. The County Manager supervises the work of appointed department directors and is responsible for the appointment of non-elected department directors, with concurrence of the Board. Mohave County is divided into three supervisorial Districts. NSP3 resources will be allocated in each of the three Districts. Lake Havasu City Foreclosure and Housing Market Overview According to realtytrac.com, Summary of Distribution and Uses of NSP Funds: ne in every 225 housing units in Lake Havasu City was subject to foreclosure action in November The largest volume of currently-listed units (342) is in the $100,000 - $200,000 price range. There are 38 units in the less than $100,000 price range. More than one-third of units have square footage between 1,200 and 1,600 square feet. According to trulia.com, the median sales prices of the 221 Lake Havasu City housing units sold from September through November 2010 was $148,500, with an average per square foot price of $103. During the same period in 2009, the median sales price was $13,000 and in 2005 was $249,000. Since 2005, the median sales price in Lake Havasu City has declined $100,500 or 40.4%. The median sales price of a 3- bedroom unit sold from September through November 2010 was $176,231 compared to $169,000 in the prior three months, and $227,193 in Sales price data indicate that prices are stabilizing. One important element of the housing market is the amount of time it will take for the current inventory of available units to be absorbed. Real estate market analysts generally consider a 6-month absorption rate as reflective of a balanced supply and demand. There were 2,153 units listed on trulia.com, including 722 foreclosures or 34% of listed units. With quarterly sales of approximately 400 units, the current inventory will be absorbed in 16 months. Lake Havasu City NSP3 Target Area (Mc-eld-cisco-smoketree-n.acoma) Mohave County has identified the Mc-eld-cisco-smoketree-n.acoma neighborhood as the Lake Havasu City "Area of Greatest Need". The index score for the Mc-eld-cisco-n.acoma Neighborhood is 17. HUD estimates that there are 569 housing units in the Mc-eld-cisco-smoketreen.acoma neighborhood, while the US Postal Service (USPS) reports 617 residential addresses. According to the USPS, in March 2010 there were 14 units (2.3%) vacant for more than 90 days. According to US Department of Housing and Urban Development NSP3 Home Mortgage Disclosure Act (HMDA) data, there were 329 (57% of units) mortgages executed between 2004 and Of these loans, 22% or 72 were high cost loans. High cost loans indicate a greater risk of foreclosure. The estimated rate of mortgages that are seriously delinquent (90+ days delinquent or in foreclosure) is 14% or 46 loans. The number of foreclosure starts in the past year is 28 and the number of real estate owned (REO) properties between 6

7 July 2009 and June 2010 is 18. HUD estimates that directing NSP3 resources towards 5 properties will make an impact in the Mc-eld-ciscosmoketree-n.acoma Neighborhood. According to December 2010 Multiple Listing Service Data for the area, the median price of currently-listed foreclosed units is $94,900. Average rehabilitation costs are estimated at $15,000/unit and after-rehabilitation value is estimated at 95% of the total acquisition plus rehabilitation cost. Kingman Area Foreclosure and Housing Market Overview According to realtytrac.com, one in every 232 housing units in Kingman was subject to foreclosure action in November The largest volumes of units (138) are in the $100,000 - $200,000 price range. However there are also 122 units in the less than $100,000 price range. Nearly one-third of units have square footage between 1,000 and 1,400 square feet. According to tr Summary of Distribution and Uses of NSP Funds: lia.com, the median sales prices of the 282 Kingman housing units sold from September through November 2010 was $89,450, with an average per square foot price of $70. During the same period in 2009, the median sales price was $99,900 and in 2005 was $165,500. Since 2005, the median sales price has declined $76,050 or 46%. The median sales price of a 3-bedroom unit sold from September through November 2010 was $134,325 ($91/square foot), compared to $144,533 in the prior three months, and $119,500 in Sales price data indicate that prices are continuing to decline but at a slower rate. One important element of the housing market is the amount of time it will take for the current inventory of available units to be absorbed. Real estate market analysts generally consider a 6-month absorption rate as reflective of a balanced supply and demand. There were 1,695 units listed on trulia.com, including 470 foreclosures or 28% of listed units. With quarterly sales of approximately 280 units, the current inventory will be absorbed in 18 months. Kingman NSP3 Target Area: Detroit-Robinson Neighborhood Mohave County has identified the Detroit-Robinson Neighborhood as the Kingman "Area of Greatest Need". The neighborhoods identified by the County as being the areas of greatest need must have an individual or average combined index score that is not less than the littlest of 17 or the twentieth percentile most needy score in an individual state. The index score for the Detroit-Robinson Neighborhood is 17. HUD estimates that there are 634 housing units in the Detroit-Robinson neighborhood, while the US Postal Service (USPS) reports 837 residential addresses. According to the USPS, in March 2010 there were 55 units (8.7%) vacant for more than 90 days. According to US Department of Housing and Urban Development NSP3 Home Mortgage Disclosure Act (HMDA) data, there were 414 (65% of units) mortgages executed between 2004 and Of these loans, 22.9% or 95 were high cost loans. High cost loans indicate a greater risk of foreclosure. The estimated rate of mortgages that are seriously delinquent (90+ days delinquent or in foreclosure) is 14.4% or 60 loans. The number of foreclosure starts in the past year is 36 and the number of real estate owned (REO) properties between July 2009 and June 2010 is 18. HUD estimates that directing NSP3 resources towards 7 properties will make an impact in the Detroit-Robinson Neighborhood. According to December 2010 Multiple Listing Service Data for the area, the median price of currently-listed foreclosed units is $47,900. Average rehabilitation costs are estimated at $15,000/unit and after-rehabilitation value is estimated at 95% of the total acquisition plus rehabilitation cost. Bullhead City Foreclosure and Housing Market Overview According to realtytrac.com, one in every 323 housing units in Bullhead City was subject to foreclosure action in November Among the currently-listed 789 foreclosed units, the average value is $147,245 with the largest volume of units in the $100,000 - $200,000 price range. According to trulia.com, the median sales prices of the 249 Bullhead City housing units sold from September through November 2010 was $92,000, with an average per square foot price of $8. During the same period in 2009, the median sales price was$109,350and in 205 Summary of Distribution and Uses of NSP Funds: was $185, 57. Since 2005, the median sales price in Bullhead City has declined $91,537 or 49.9%. The median sales price of a 3-bedroom unit sold from September 2010 through November 2010 was $93,500, compared to $94,450 in the prior three months, and $109,350 in 2009, indicating that sales prices are stabilizing. One important element of the housing market is the amount of time it will take for the current inventory of available units to be absorbed. Real estate market analysts generally consider a 6-month absorption rate as reflective of a balanced supply and demand. There were 1,037 units listed on trulia.com, including 485 foreclosures or 47% of listed units. With quarterly sales of approximately 249 units, the current inventory will be absorbed in 12 months Bullhead City NSP3 Target Area: 9516u7 Neighborhood Mohave County has identified the 9516u7 Neighborhood as the Bullhead City "Area of Greatest Need". The neighborhoods identified by the County as being the areas of greatest need must have an individual or average combined index score that is not less than the littlest of 17 or the twentieth percentile most needy score in an individual state. The index score for the 9516u7 7

8 Neighborhood is 17. HUD estimates that there are 899 housing units in the 9516u7 neighborhood, while the US Postal Service (USPS) reports 942 residential addresses. According to the USPS, in March 2010 there were 70 units (7.8%) vacant for more than 90 days. According to US Department of Housing and Urban Development NSP3 Home Mortgage Disclosure Act (HMDA) data, there were 275 (31% of units) mortgages executed between 2004 and Of these loans, 22.4% or 62 were high cost loans. High cost loans indicate a greater risk of foreclosure. The estimated rate of mortgages that are seriously delinquent (90+ days delinquent or in foreclosure) is 14.8% or 41 loans. The number of foreclosure starts in the past year is 25 and the number of real estate owned (REO) properties between July 2009 and June 2010 is 17. HUD estimates that directing NSP3 resources towards 5 properties will make an impact in the 9516u7 neighborhood. According to December 2010 Multiple Listing Service Data for the area, the median price of currently-listed foreclosed units is $66,720. Average rehabilitation costs are estimated at $15,000/unit and after-rehabilitation value is estimated at 95% of the total acquisition plus rehabilitation cost. NSP INFORMATION BY ACTIVITY The housing-related activities of Mohave County are primarily governed by the County's Comprehensive Plan, which includes a Housing Element and the housing activities of the Mohave County Community Services Department. According to the County's Comprehensive Plan Housing Element, the goals of the County relative to neighborhood stabilization and low-to-moderate income households are: Identify substandard housing and promote the revitalization and rehabilitation of these structures in urban areas as a first priority. Encourage the development of low and moderate income housing to meet the needs of current and future residents in proportion to employment growth in the local economy. Support efforts to provide very low, low and moderate income households with housing in a variety of locations, housing types and price ranges Summary of Distribution and Uses of NSP Funds: /p> Support the use of quality manufactured housing, consistence with County Code, as a means to provide affordable housing to very low, low and moderate income households. Promote mixed use developments as a means of reducing housing costs. Neighborhood Stabilization Program 3 (NSP3) eligible activities are to: A. Use financing mechanisms for purchase and redevelopment B. Purchase and rehabilitate for sale, rental, or redevelopment C. Establish and operate land banks D. Demolish blighted structures E. Redevelop for housing Mohave County will undertake, in combination, the following NSP3 Eligible Activities to assist homebuyers in the identified target areas. A. Purchase and rehabilitate for resale; and B. Use financing mechanisms for purchase. The goals of the NSP3 activities are to: 1. Attract new owner-occupants to target areas, thereby increasing the homeownership rate and leveraging opportunities for private lending; 2. Improve properties, thereby improving property values and stabilizing the tax base; and 3. Remove blighting influences. Given these goals, Mohave County will not invest NSP3 resources in rental housing. Acquisition, Rehabilitation, Resale 8

9 Mohave County will acquire properties in each of the three NSP3 target areas. Properties may be acquired through the FHA First Look Program or through other mechanisms. Properties acquired through the FHA First Look Program may be acquired at up to a 10% discount. Foreclosed properties acquired through other mechanisms will be purchased at a 1% or greater discount, while abandoned/vacant properties will be acquired at the maximum possible discount given the current market appraised value of the home or property, taking into account its current condition and ensuring that purchasers are paying below-market value for the home or property. Properties will be evaluated for rehabilitation and brought into compliance with the County rehabilitation standards. The County will prepare a rehabilitation work write-up and rehabilitate acquired properties utilizing local contractors. The County maintains a list of qualified contractors through a constantly-open solicitation. Contractors from each of the local areas are included on the prequalified list, and many are small businesses owned and operated by persons residing in the vicinity of the areas of greatest need. Still, the target areas are very small and residential, and the possibility of hiring contractors located in the target areas is extremely limited. Contractors will be selected through a competitive process. The work write-up and rehabilitation will include energy efficiency and green building standards. Upon completion of rehabilitation, properties will be sold to income-eligible buyers who must owner occupy the property. Properties will be actively marketed to eligible buyers through local real estate agents and the Multiple Listing Service. All buyers shall receive a minimum of 8 hours of HUD-certified homebuyer counseling and education through a HUD-certified housing counseling agency. There are two HUD-certified housing counseling agencies operating in Western Arizona-Housing American Cor Summary of Distribution and Uses of NSP Funds: oration and Western Arizona Council of Governments. Mohave County will contract with one or both agencies to ensure buyer access to homebuyers counseling and educational services. Direct Homebuyer Assistance-Down Payment and Closing Cost Buyers must own and occupy purchased units, may acquire 30-year, fixed-rate financing through a lender of their choice. Financing shall be based on qualifying ratios not to exceed 31/43. All buyers must contribute 3% of the purchase price, with a minimum of 1% from their own funds. Mohave County will contribute down payment and closing cost assistance equal to 5% of the purchase price. NSP3 down payment and closing cost assistance shall be made in the form of a 0% forgivable loan, secured by a promissory note and deed of trust executed by the County. The promissory note and deed of trust shall require repayment of any unforgiven amount of the down payment and closing cost assistance upon resale or noncompliance with any terms of the deed of trust during the affordability/forgiveness period. Low-income Targeting Direct Homebuyer Assistance-Direct Loans Mohave County must utilize at least 25% of NSP3 resources or $497,686 to assist households with incomes below 50% of the County median income. In order to reach buyers with incomes 50% or below the area median income, the County will coordinate outreach activities to participants in the County's Section 8 homeownership program. Buyers with incomes 50% or less of the area median income may receive direct loans from Mohave County to purchase acquired and rehabilitated properties. All buyers must owner occupy properties and contribute 3% of the purchase price, with a minimum of 1% from their own funds. Mohave County will contribute down payment and closing cost assistance equal to 5% of the purchase price. Direct loans shall ensure debt ratios of not more than 31/43. Direct loans shall be for a period up to 30 years, at an interest rate of 4% and secured by a promissory note and deed of trust executed by the County. The promissory note and deed of trust shall require repayment of the remaining principal balance plus any unforgiven amount of the down payment and closing cost assistance upon resale or noncompliance with any terms of the deed of trust during the affordability/forgiveness period. The County may utilize non-traditional sources of credit to ensure that buyers are creditworthy. A Title Company will be contracted to manage all aspects of Direct Loan servicing. Performance Measurements Mohave County will acquire, rehabilitate and resell an estimated 20 units, providing down payment and closing cost assistance and direct loans. The estimated number of units is based on the following: The average acquisition price of foreclosed units in the areas of greatest need is $69,141, assuming a 1% discount; The average rehabilitation cost will be $15,000 per acquired unit; The average amount of down payment and closing cost assistance will be $4,237; The average NSP3 per unit investment will be $88,378; and At least 25% of NSP3 resources will be used to assist buyers with incomes 50% or less of the County median income. Our performance measurements will be 20 units doing acquisition, rehabilita 9

10 Summary of Distribution and Uses of NSP Funds: ion and resale and direct homebuyer assistance using 20 units will be broken down into two areas. First is a buyer income of less than or equal to 50 % AMI, for 6 units and the second with a buyer income of % for 14 units, for a total of 20 units. Planning and Administration In accordance with NSP3 guidelines, Mohave County will utilize 10% of its NSP3 award or $199,074 for program planning and administration. Acquisition and Relocation Mohave County does not intend to demolish or convert and low- and moderate-income dwelling units utilizing NSP3 resources. When acquiring property for NSP3 purposes, the County will acquire only properties that are vacant. The County will ensure that units are vacant through direct observation and review of documents indicating the date of last occupancy is at least 90 days prior. Public Comments Comment #1: "The more time that goes by, the weirder things get. I never thought I would see the day where the government went into competition with local real estate markets. Unbelievable, how does anyone compete against the outfit that owns and runs the money printing press?" Response # 1: "I attached the copy of the plan and maps in case you have any further comment. After reading it, I think you will see that the extent of our intervention into this sector is going to be small compared to the magnitude of the problem. Ultimately it will be up to our local elected officials to determine if this is in the best interest of the citizens in Mohave County." Comment # 2: A brief presentation on Mohave County's proposed NSP 3 program was given at the Mohave/LaPaz Local Workforce Investment Board on January 11, The economic development officials in attendance were favorable, viewing NSP as an economic development opportunity in Mohave County. One asked for additional information and I ed her the website location on January 14, 2011, the date that the plan was posted. Mohave County NSP 3 Amendment #1 Public comments were accepted on the Mohave County's Neighborhood Stabilization Program (NSP) Amendment #1 to its Abbreviated NSP Consolidated Plan. Comments were accepted through May 1, 2014 to May 31, 2014 at the below contacts. Comments may be made via e- mail, regular mail, fax or telephone. NSP Contact Person: Dave Wolf, Housing and Community Revitalization Manager Address: PO Box 7000 Kingman, AZ Telephone Fax: Dave.Wolf@mohavecounty.us TDD Arizona Relay 711 TDD Mohave County has prepared this Substantial Amendment to our NSP3 Abbreviated Consolidated Plan to make adjustments to our NSP3 program based on program progress to date and changes in projected costs. Through this Substantial Amendment we are proposing the following changes: Adjust the allocation of beneficiary and dollar goals between eligible uses based on program progress to date and including projections through March Performance Measurements Mohave County has acquired 20 units and have rehabilitated and resold 14 units. The number of units left to be rehabbed and sold is 6 10

11 Summary of Distribution and Uses of NSP Funds:. Under NSP Home Buyer Assistance we can provide down payment and closing cost assistance, principal reduction, interest rate buy downs and direct loans. Original Performance Measurements in Application and Plan The average acquisition price of foreclosed units in the areas of greatest need will be $69,141, assuming a 1% discount; The average rehabilitation cost will be $15,000 per acquired unit; The average amount of down payment and closing cost assistance will be $4,237; The average NSP3 per unit investment will be $88,378; and At least 25% of NSP3 resources will be used to assist buyers with incomes 50% or less of the County median income. Our previous performance measurement was 20 units for acquisition, rehabilitation and resale and direct homebuyer assistance the 20 units were broken down into two areas. The first is a buyer income of = 50 % AMI, will be 6 units, and the second buyer income of % will be 14 units; this will be a total of 20 units. Proposed Performance Measurements through March 2015 The average rehabilitation cost is $35, per acquired unit; The average amount direct homebuyers assistance is $4,530.00; The average NSP3 per unit investment is $96,245.00; and At least 25% of NSP3 resources, including program income, will be used to assist buyers with incomes 50% or less of the County median income. Our proposed performance measurements will be 20 units for acquisition, rehabilitation and resale and direct homebuyer assistance the 20 units will be broken down into two areas. The first is a buyer income of = 50 % AMI, will be 10 units, and the second buyer income of % will be 10 units; this will be a total of 20 units. Below shows funds originally budgeted in our NSP Application and Plan in 2011 and projected funds budgeted through March 2015 including program income received and projected program income. Below are the original budget from our NSP application and Plan 2011 and then the projected budget through March This includes program income received and projected program income. Administration which is activity 1 had $199, as a budget for 2011 and changed to the proposed March 2015 amendment amount budgeted to $253, LH 25% which is activity 2 had $497, as a budget for 2011 and changed to the proposed March 2015 amendment amount budgeted to $633, LMMI 120% which is activity 3 had $1,293, as a budget for 2011 and changed to the proposed March 2015 amendment amount budgeted to $1,647, Public Comment: The proposed Substantial Amendment was posted at the below website beginning on May 1, 2014 through May 31, 2014, for public comment. Comments could be made via , regular mail and phone or fax. No comments were received. Action Plan note: We have adjusted the budget to reflect the actual expenditures that were showing up in activity 2 but were drawn in activity 3. How Fund Use Addresses Market Conditions: The housing-related activities of Mohave County are primarily governed by the County's Comprehensive Plan, which includes a Housing Element and the housing activities of the Mohave County Community Services Department. According to the County's Comprehensive Plan Housing Element, the goals of the County relative to neighborhood stabilization and low-to-moderate income households are: 1 Identify substandard housing and promote the revitalization and rehabilitation of these structures in urban areas as a first priority. 2 Encourage the development of low and moderate income housing to meet the needs of current and future residents in proportion to employment growth in the local economy. 3 Support efforts to provide very low, low and moderate income households with housing in a variety of locations, housing types and price ranges. 4 Support the use of quality manufactured housing, consistent with County Code, as a means to provide affordable housing to very low, low and moderate income households. 5 Promote mixed use developments as a means of reducing housing costs. Neighborhood Stabilization Program 3 (NSP3) eligible activities are to: A Use financing mechanisms for purchase and redevelopment B Purchase and rehabilitate for sale, rental, or redevelopment 11

12 C Establish and operate land banks D Demolish blighted structures E Redevelop for housing Mohave County will undertake, in combination, the following NSP3 Eligible Activities to assist homebuyers in the identified target areas. A Purchase and rehabilitate for resale; and B Use financing mechanisms for purchase. The goals of the NSP3 activities are to: 1 Attract new owner-occupants to target areas, thereby increasing the homeownership rate and leveraging opportunities for private lending. 2 Improve properties, thereby improving property values and stabilizing the tax base. 3 Remove blighting influences. Given these goals, Mohae County will not invest NSP3 resources in rental housing. Acquisition, Rehabilitation, Resale. Mohave County will acquire properties in each of the three NSP3 target areas. Properties may beacquired through the FHA First Look Pogram or through other mechanism. Proerties acqured through the FHA First Look Program may be acquired at up to a 10% discount. Foreclosed properties acquired through other mechanisms will be purchased at a 1% or greater discount, while abandoned/vacant properties will be acquired at the maximum possible discount given the current market appraised value of the home or property, taking into account its current condition and ensuring that purchasers are paying below-market value for the home or property. Properties will be evaluated for rehabilitation and brought into compliance with the County's rehabilitation standards. The County will prepare a rehabilitation work write-up and rehabilitate acquired properties utilizing local contractors. The County maintains a list of qualified contractors through a constantly-open solicitation. Contractors from each of the local areas are included on the prequalified list, and many are small businesses owned and operated by persons residing in the vicinity of the areas of greatest need. Still, the target areas are very small and residential, and the possibility of hiring contractors located in the target areas is extremely limited How Fund Use Addresses Market Conditions:. Contractors will be selected through a competitive process. The work write-up and rehabilitation will include energy efficiency and green building standards. Upon completion of rehabilitation, properties will be sold to income-eligible buyers who must owner occupy the property. Properties will be actively marketed to eligible buyers through local real estate agents and the Multiple Listing Service. All buyers shall receive a minimum of 8 hours of HUD-certified homebuyer counseling and education through a HUD-certified housing counseling agency. There are two HUD-certified housing counseling agencies operating in Western Arizona-Housing American Corporation and Western Arizona Council of Governments. Mohave County will contract with one or both agencies to ensure buyer access to homebuyer counseling and education services. Direct Homebuyer Assistance-Down Payment and Closing Costs. Buyers, who must owner occupy purchased units, may acquire 30-year, fixed-rate financing through a lender of their choice. Financing shall be based on qualifying ratios not to exceed 31/43. All buyers must contribute 3% of the purchase price, with a minimum of 1% from their own funds. Mohave County will contribute down payment and closing cost assistance equal to 5% of the purchase price. NSP3 down payment and closing cost assistance shall be made in the form of a 0% forgivable loan, secured by a promissory note and deed of trust executed by the County. The promissory note and deed of trust shall require repayment of any unforgiven amount of the down payment and closing cost assistance upon resale or noncompliance with any terms of the deed of trust during the affordability/forgiveness period. Ensuring Continued Affordability: In order to insure continue affordability buyers with incomes 50% or below the area median income, the County will coordinate outreach activities to participants in the County's Section 8 home ownership program. Buyers with incomes 50% or less of the area median income may receive direct loans from Mohave County to purchase acquired and rehabilitated properties. All buyers must owner occupy properties and contribute 3% of the purchase price, with a minimum of 1% from their own funds. Mohave County will cotribute down payment and closing cost assistance equal to 5% of the purchase price. Direct loans shall ensure debt ratios of not more than 31/43. Direct loans help ensure affordability by eliminating the cost of mortgage insurance that adds 1% or more of the total loan in monthly payments. Direct loans shall be for a period of up to 30 years, at an interest rate of 4% and secured by a promissory note and deed of trust executed by the County. The promissory note and deed of trust shall require repayment of the remaining principal balance plus any unforgiven amount of the down payment and closing cost assistance upon resale or noncompliance with any terms of the deed of trust during the affordability/forgiveness period. The County may utilize non-traditional sources of credit to ensure that buyers are creditworthy. A Title Company will be contracted to manage all aspects of Direct Loan servicing. Definition of Blighted Structure: The State of Arizona does not define "blighted structure" but defers to the code enforcement standards of local government. Accordingly, Mohave County has defined a blighted structure as follows: "A structure is blighted when it exhibits objectively determinable signs of deterioration sufficient to constitute a threat to human health, safety and public welfare." Definition of Affordable Rents: The County defines affordable rents as consistent with the definition adopted for the State of Arizona Housing Fund Program. Affordable rents are the lesser of the Mohave County Fair Market Rent (FMR) or Mohave County 50% Rent Limit for the HOME program, including utilities, based on the number of bedrooms in the unit. Mohave County will not utilize NSP3 resource for rental housing activities. 12