Fort Wayne NSP : What's UP

Fort Wayne received $7 million from the federal government to stabilize neighborhood suffering from foreclosed home. That’s right seven million dollars for down payments, closing cost and restoration. Next week, Fort Wayne will highlight builders and developers, open house October 9, 10, 11.


2319 John St., Ideal Builders
2302 Florida Dr., Gerber Building
1903 Kensington Blvd., Gerber Building
2412 Gay St., Lancia
1137 Rivermet Ave., Belay Builders
2429 Smith St., Miracle Builders
4502 Winston Dr., Gerber Building
533 East Creighton Ave., Miracle Builders

Did you count eight homes? For almost 10 years Indiana foreclosure rates as outpaced the national rate. For seven years Indiana has placed second and first place amongst the 50 states in foreclosed homes.
The federal Housing and Economic Recovery Act of 2008 is in the house to give families of low income a chance at succeeding. “Homebuyers at or below 120% of area median income up to $15,000 (not to exceed 20% of purchase price) to purchase a foreclosed home as their principal residence.” The program places foundation for young folks living in areas that are disproportionately affected by foreclosures, blight and abandonment. I

“Every census block group in the state was evaluated for its qualification as a low-, moderate-, or middle-income area. That is, a census block group was considered an eligible area if more than 51 percent of the people in the area had incomes less than or equal to 120 percent of Area Median Income in 2000.” If these funds are not used by the city the funds may go back to HUD.

In May 2009, a second load of funds will go to designated locales called NSP2. these funds authorized under the American Recovery and Reinvestment Act (the Recovery Act) of 2009, provides grants to states, local governments, nonprofits and a consortium of nonprofit entities. In addition the monies from the community development block grant can be used to assist low income to moderate income families.

IN addition, NSP-TA funds will be available for technology purposes. Fort Wayne leaders in the African-American community where's you at?

From the HUD website:

How long do States and local communities have to spend this money?

Grantees have 18 months to obligate these funds, and four years to expend funds. Congress was very clear that this money be put to work quickly. HUD expects that grantees will have contracts signed or, at minimum, made written offers for properties within 18 months. Options or other non-binding instruments are not acceptable.
.
How does HUD determine when NSP funds have been obligated?

“Funds are obligated for an activity when orders are placed, contracts are awarded, services are received, and similar transactions have occurred that require payment by the state, unit of general local government, or subrecipient during the same or a future period. Note that funds are not obligated for an activity when subawards (e.g., grants to subrecipients or to units of local government) are made.” In other words, HUD expects grantees to obligate funds to specific activities.

The following are examples of obligations for a “specific activity”:
• Execution of an agreement with a REO holder to acquire one or more foreclosed upon properties;
• Execution of a contract to rehabilitate an abandoned or foreclosed upon property;
• Execution of a loan agreement;
• Issuance of a purchase order for equipment/supplies used to maintain acquired property;
• Execution of a demolition contract;
• Administrative action necessary to assign a staff person to work on NSP activities.

The execution of a subrecipient agreement would NOT qualify as an activity that counts toward meeting the 18-month obligation requirement.

UPdate on how Fort Wayne sells the NSP program by Journal-Gazette Don Stockman posted October 4, 2009, Grant rehabs homes, neighborhoods, lives.

Note: I am not absolutely positive on this but I would suggest that if a developer is spending more than the appraised value of a home, that the city is using CDBG funds to pay the developer the difference. I see no other way to explain why the developers would not stick to homes that could be rehabbed within the allotted amount.