Neighborhood Stabilization Program Funds ApplicationT®: The Honorable Mayor and City Council Members
FR®IVi: Michael C. Van Milligen, City Manager
Sl1BJEC°f: Application for Neighborhood Stabilization Program Funds
®i4TE: January 30, 2009
Housing and Community Development Department Director David Harris requests that
the City Council set a public. hearing for February 16, 2009, to receive comments on an
application to the Iowa Department of Economic Development (IDED) for Neighborhood
Stabilization program funds.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Harris, Housing and Community Development Department Director
T®: Michael Van Miien, City Manager
FRONT: David`~larris, Housing and Community Development Department
SUBJECT: Application for Neighborhood Stabilization Program funds
®ATE: 2 February 09
Introduction
The purpose of this memorandum is to request the City Council to set a public hearing
to receive comments on an application to the Iowa Department of Economic
Development (IDED) for Neighborhood Stabilization program funds.
®iscussion
IDED expects to receive $21 607 907 in funds from the US Department of Housing and
Urban Development (HUD) as Iowa's share of the Neighborhood Stabilization Program
(NSP.) The NSP funds were authorized by the Housing and Economic Recovery Act of
2008.
The purpose of the Neighborhood Stabilization Program is to provide emergency
assistance to state and local governments to purchase foreclosed or abandoned homes
and to rehabilitate, resell or redevelop these homes in order to stabilize neighborhoods
and deter decline in valuation of neighboring housing.
According to IDED data, Dubuque ranks seventh (of 11) major Iowa cities in number of
estimated foreclosures, with 325. This compares with Des Moines, ranked first, at 3157
foreclosures. A formula calculation allocates $444 328 to Dubuque, according to need.
An application has been submitted to IDED for approval of this award, by action of the
City Council at its 15 December 08 meeting. However, we subsequently have been
informed that an affidavit of publication of a public hearing notice and minutes of the
hearing must be submitted before an application can be approved.
Eligible activities include: financing, i.e., `soft' second mortgages for homebuyers;
purchase, rehabilitation and resale of properties which have been either abandoned or
foreclosed; establishing `land banks' to hold foreclosed properties until market
conditions are more favorable for resale; demolition of blighted structures;
redevelopment of vacated sites; and housing counseling for home buyers. Purchased
homes may also be rented as an eligible activity; we do not intend to propose rentals in
our application.
Communities are allowed a six percent administrative fee, or approximately $26 600 for
Dubuque.
Additional program requirements include:
1. All beneficiaries must earn less than 120% of area median income. In Dubuque,
a family of four persons would qualify earning about $71 000.
2. At least 25% of the funds must benefit households earning less than 50% of area
median income.
3. Homes purchased for rehab/resale must be purchased at an average of no less
than 15% discount to current market appraised value.
4. Properties must remain affordable to households earning less than 120% income
for 5-25 years, depending on amount of subsidy. Recaptured funds must be
reinvested in eligible activities until 2013.
To be eligible as a foreclosed property, a mortgage or tax foreclosure action must have
been completed. An "abandoned" property is one on which foreclosure proceedings
have been initiated, no mortgage or tax payments have been made for 90 days and the
property has been vacant for 90 days.
We are currently researching the inventory of eligible foreclosed properties and expect
that the majority will be located in the lower-income neighborhoods in the city. IDED
requires that activities should be targeted in no more than 25% of the total number of
Census Tracts, in order to maximize neighborhood impact and stabilization.
Action Step
The action step requested of the City Council is to approve the attached resolution,
setting a public hearing on the application.
RESOLUTION NO. 42 - 09
RESOLUTION SETTING A PUBLIC HEARING ON AN APPLICATION TO THE
IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT (IDED) FOR
NEIGHBORHOOD STABILIZATION PROGRAM FUNDS
Whereas, the US Department of Housing and Urban Development (HUD) has
made available funding to state and local governments to respond to the
increased number of foreclosures, by passage of the Housing and Economic
Recovery Act of 2008; and
Whereas, IDED has allocated $444 328 of these Neighborhood Stabilization
Program (NSP) funds to Dubuque, to acquire and redevelop foreclosed
properties that might otherwise become sources of abandonment and blight; and
Whereas, IDED requires that a municipality's governing body hold a public
hearing as a condition of application for these funds.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the City Council will meet in the Federal Building, Council
Chambers, 350 West 6t" Street, Dubuque, Iowa at 6:30 pm on 16 February 2009
for the purpose of holding a public hearing and taking action on this application.
Section 2. That the City Clerk be and she is hereby authorized and directed to
publish a notice of such public hearing and the City Council's intent to review and
take action on the application for Neighborhood Stabilization Program funds.
Passed, approved and adopted this 2nd
day of February 2009.
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Roy D ~uol, Mayor
Attest: . ~
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Jeanne F Schneider, CMC, City Clerk