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039-09RESOLUTION Action: BOARD OF SUPERVISORS: January 28, 2009 ❑ APPROVED ❑ DENIED SUPPORT FOR APPLICATION FOR FUNDS FROM THE NEIGHBORHOOD STABILIZATION PROGRAM Whereas, the Neighborhood Stabilization. Program (NSP), a federal program authorized under Title III of the Housing and Economic Recovery Act of 2008. will provide emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities, arid Whereas. the NSP provides grants to every state and certain local communities to purchase foreclosed or abandoned homes and to rehabilitate, resell, or redevelop these homes in order to stabilize neighborhoods and stem the decline of house values of neighborhood homes, and Whereas, the Northern Shenandoah Valley Regional Commission wishes to apply for a multi - jurisdictional grant in the amount of $4,000,000 of Virginia Co ninunity Development Block Grant Neighborhood Stabilization Program funds for implementatior, of the Northem Shenandoah Valley Foreclosure Mitigation Program, and Whereas, $5,000,000 mortgage interest rate subsidies are expected to be available as additional funds for this project, and it is projected that home- .awnership a. •;stance to approximately twenty five first time home buvers will result from the implementation of this protect, of which all will be low- moderate -and middle- income persons, and Now, therefore be it resolved, the Frederick Countv Board of Supervisors supports the submission of application for funding under the above mentioned Frogram, and Be It further resolved, this body has identified neighborhoods in the Stephens City and Senseny Road Corridor for use of NSP funds, and agrees to serve on the Management Team for oversight of this Program, and Be it further resolved that, Chris Price, Executive Director of ihe- Northern Shenandoah Vallev Regional Commission, is hereby authorized to sign and submit: P.ppropriate documents for the submittal of this proposal. PDRes #04 -09 This ordinance shall be in effect on the date of adoptioh. Passed this 28th day of January, 2009 by the following recorded vote: Richard C. Shickle, Chairman Aye Gary A. Loon Aye Gary W. Dove Aye Bill M. Ewing Aye Gene E. Fisher Aye Charles S. DeHaven, Jr. Aye Philip A. Lemieux Aye A COPY ATTEST `,. Johji R ilev, Jr. Freeerick County Administrator, PDRes #04 -09 BOS Res. #039 -09 COUNTY of FREDERICK John R. Riley, Jr. County Administrator 540/665 -5666 January 29, 2009 Fax 540/667 -0370 E -mail: jriley@co.frederick.va.us Christopher M. Price, AICP Executive Director Northern Shenandoah Valley Regional Commission 103 East Sixth Street Front Royal, VA 22630 Dear Mr. Price: The Frederick County Board of Supervisors, meeting in regular session on January 28, 2009, approved the Resolution of Support for Application for Funds from the Neighborhood Stabilization Program as requested in your correspondence dated January 21, 2009. Supervisor Philip Lemieux was appointed to serve on the Project Management Team. You may reach Supervisor Lemieux at 106 Dell Court, Winchester, VA 22602; Home: (540)722 -3673; Fax: (540)678 -8253; Email: plemieux @visuallink.com. Should you have any questions, please do not hesitate to contact me. With kindest regards, I am Sincefply, Jolhn R. Riley, Jr. County Administrator JRR /tjp Enclosure cc: Eric R. Lawrence, AICP, Director of Planning & Development Board of Supervisors C \ TJP\ nrtnshenvlyregcom\ LetPrice( NeighborhoodStabilizationProgram )012809BdMtg.docx 107 North Kent Street • Winchester, Virginia 22601 OFFICERS Dennis M. Morris Chairman John R. Riley Vice Chairman John E. Vance Treasurer Charles R. Johnston Secretary Executive Director Christopher M. Price COMMISSIONERS August, 2008 CLARKE COUNTY Barbara J. Byrd Charles R. Johnston FREDERICK COUNTY Charles S. DeHaven, Jr. Eric R. Lawrence John R. Riley Richard C. Shickle PAGE COUNTY Nora Belle Comer Carol Lee Fischer Strickler SHENANDOAH COUNTY Lillie J. Fleming Conrad Helsley Dennis M. Morris WARREN COUNTY Richard H. Traczyk John E. Vance Glenn L. White FRONT ROYAL J. Michael Graham Carson C. Lauder LURAY Jerry M. Schiro MIDDLETOWN Mayor Raymond D. Steele STRASBURG Scott E. Terndrup STEPHENS CITY Mayor Ray E. Ewing WINCHESTER Evan H. Clark Art H. Major Timothy A. Youmans January 21, 2009 John R. Riley County Administrator 107 N Kent Street Winchester, Virginia 22601 -%o Dear Nt 103 East 6th Street Front Royal,Virgirnia 22630 Phone: 540.636.8800 Fax: 540.635.4147 E -mail: nsvrc @shentel.net LD .f cj V !' li�� .011P�fi� yry n , V As you know, the Northern Shenandoah Valley Regional Commission (NSVRC) is applying for a grant from the Neighborhood Stabilization Program (authorized through the federal Housing and Economic Recovery Act of 2008) to be administered by the Virginia Department of Housing and Community Development. Grant funds will be made available in targeted communities and will only be used to acquire and/or rehabilitate homes that have already been foreclosed on. The purpose of the program is to prevent entire neighborhoods from the destabilizing impacts of multiple foreclosures and to mitigate the cascading effects on adjacent property values. Funds will only be spent in a jurisdiction with the concurrence of that jurisdiction. Based on a review of foreclosure data within the region prepared by the NSVRC, the proposed target communities are neighborhoods in the Winchester/Frederick County area, the Front Royal/Warren County area, and in the Strasburg /Shenandoah County area. We are asking for a resolution from each jurisdiction in support of the Conmission's request. This resolution will simply support the Commission's grant request and, should we approved for funding, authorize use of those funds within your jurisdiction. It does not obligate your jurisdiction to any commitments and there are no match requirements. We will ensure that you are consulted prior to pursuing any activities within your jurisdiction and we will ask that you appoint a representative to a project management team. I have attached some background materials and a draft resolution for your consideration. We hope to have the resolutions adopted in January, so please let me know if you have any questions or concerns as soon as possible so that we may accommodate your concerns in the draft resolution. As always, we are available to discuss the issue further with you or with your Board. Thank you for your consideration. Sincerely, /yw A Christopher M. Price, AICP Executive Director Neighborhood Stabilization Program OVERVIEW The Neighborhood Stabilization Program (NSP), authorized under Title III of the Housing and Economic Recovery Act of 2008 (HERA) enacted July 30, 2008, appropriates $3.92 billion of Community Development Block Grant funds nationwide. These targeted funds may be used to: 1) acquire, or provide financial assistance to acquire, or provide financial assistance to acquire foreclosed and /or abandoned properties that might otherwise become sources of blight within communities, and 2) develop a purchase assistance program for homebuyers. HUD allocated $38.2 million to the Commonwealth of Virginia that will be administered by the VA Department of Housing and Community Development. Funds can be accessed via two funding cycles: Open Submission and a Competitive Round beginning January 31, 2009 and in June, 2009 respectively. The Northern Shenandoah Valley Regional Commission intends to submit a request for project funds under the NSP for a multi- jurisdictional Foreclosure Mitigation Program in the amount of $4,000,000. These funds would be used to acquire, repair and sell foreclosure properties in target neighborhoods of Frederick, Shenandoah and Warren Counties to eligible qualified first time. The Board of Supervisors is requested to adopt a resolution: 1) to authorize use of funds, if awarded, in the jurisdiction and 2) to confirm participation by staff, elected officials, and /or citizens in the Management Team which will monitor program performance and determine consistency of project elements with local priorities. BACKGROUND w NSP is intended to provide emergency assistance to state and local governments to mitigate local effects of the current foreclosure crisis. In determining allocations, HUD followed Congress's direction that grants be targeted to areas based on the incidence of foreclosures, Subprime mortgages, and mortgage defaults and delinquencies. HUD used a data - driven approach to this process, relying on numerous data sets from government agencies and private sources. As a result of this process, Virginia was allocated a total of $45.7 million; -$2.8 million of which was committed to Fairfax County, and -$4.1 million to Prince William County. The remaining $38.7 million is available to localities in Virginia to access through an application process managed by DHCD. Grantees that receive NSP funds must give priority emphasis to areas of greatest need within their jurisdictions, including those: 1) with the greatest percentage of foreclosures, 2) with the highest percentage of homes financed by Subprime mortgage and related loans, and 3) identified as likely to face a significant rise in the rate of home foreclosures. NSVRC has been working with localities in the Region to identify these specific areas in the region. NSP also seeks to prevent future foreclosures by requiring participation in HUD certified housing counseling for all homebuyers participating in the Program. In addition, HUD seeks to protect future homebuyers by requiring that grantees ensure new homebuyers under this program obtain mortgage loans from lenders who agree to comply with sound lending practices. ELIGIBLE USES HUD has identified the following five eligible activities: - Purchase and repair of abandoned or foreclosed properties in order to sell, rent, or redevelop; - Establish financing mechanisms for purchase and development of foreclosed properties; - Establish land banks for homes foreclosed properties; - Demolish blighted structures; and - Redevelop demolished or vacant properties. NSVRC will primarily focus efforts on three of these activities based on direction from the locality: - Acquisition /rehabilitation and re -sale to qualified homebuyers, - Demolition and /or redevelopment of blighted structures, and - Development of a financing mechanism to promote purchase in the target neighborhoods. LOW- /MODERATE - /MIDDLE - INCOME (LMMI) REQUIREMENTS NSP mandates that at least 25% of the grant be used for housing for low income households whose incomes do not exceed 50% AMI. The remaining 75% of funds may be used in neighborhoods occupied by residents earning up to 120% AMI, or must directly benefit individual residents (ie the new housing occupants). This is the first federally funded housing program available to our community that serves middle- income residents- a priority population in the Northern Shenandoah Valley. LINKAGE TO THE CONSOLIDATED PLAN The requested actions are consistent with the 2008 -2012 Consolidated. If approved, the use of NSP funds will further local efforts to promote safe and livable communities by providing homebuyers with the opportunity to purchase a home in the Northern Shenandoah Valley Region. In addition, the purchase of foreclosed or abandoned homes for rehabilitation, resale, or redevelopment for affordable housing would help stabilize neighborhoods and stem the decline of housing values of neighboring homes. COMMUNITY IMPACT It is anticipated that the NSP will initially generate at least 25 real estate sales in the Frederick/ Shenandoah/ Warren County area over an 18 -month period. Timeliness of selling and eligibility of higher income qualified homebuyers may lead to regeneration of program funds during the implementation period, allowing the NSVRC to affect additional properties. FISCAL IMPACT There is no required match for this program. NSVRC requests limited support from locality staff and will be administered by existing NSVRC staff members. No new positions will be created. Frederick County, Virginia Foreclosures I i f h"neeiand Red Source: Realty Trac 2008. MnUa�lis � l / Stephens _ , city NS N(IX(HI SJ ItE41()NAL WMML'51()N Neighborhood Stabilization Program (VDHCD) —Study Area #1 Study area #1 equates to almost 8% - (197 parcels —15 in various states of foreclosure). Senseny Rd - Study Area # 1 Foreclosure Properties • all other values> w, • Auction y � • Bank Owned �`v, 0 Pre - Foreclosure 8 xra ew„ o • `' O • 0 • ..L�,. �k+ i Y 00 0 o • ° ° • �\\` • _ • ° •• • ., • ° ` • • • _ r \ � • • _-� -f. ,.. ,w� ,_ { u I ,r, • o 0 • O 0 • o o ° CP s0 m • • o '10 ♦ • - '� _ 0 Y Senseny Rd - Study Area # 1 Foreclosure Properties • all other values> w, • Auction y � • Bank Owned �`v, 0 Pre - Foreclosure Neighborhood Stabilization Program (VDHCD) - Study Area # 2 Study area #2 equates to 7% - (264 parcels — 18 in various states of foreclosure). Sao �xa • • • • 7 • A • • • o • • 1 e N• • • . •• • *"� a • % 000 i •• Y ' • F mx • it • I no J % • • l J 1 � • � $o Warrior Dr - Study Area # 2 Foreclosure Properties • Aucton Q Bank Owned Pre- Foreclosure • °wti. A • i