Can NSP funds be used for supportive housing?
New funding and First Look initiative may offer hope
The availability of Neighborhood Stabilization Program (NSP) can provide an opportunity to leverage the other needed resources to create permanent, affordable and supportive housing. Opening Doors published a comprehensive overview of how to use NSP to develop supportive housing. Click here to read this report.
The Dodd-Frank Financial Reform bill was signed into law on July 21. This legislation includes $1 billion in funding for Neighborhood Stabilization Program 3 (NSP3). This round of funding will be comparable to NSP1 given that it will be using a similar formula allocation. We should have seen the formula by August 23; (30 days from the President signing the legislation) however, the money will not be available till October 1 for distribution.
Click here for the NSP website.
Click here to read the Dodd-Frank Financial Reform bill.
Click here for Opening Doors.
Click here for more on First Look.
The legislation also includes a critical correction that will allow vacant properties to count towards the required 25% of funds set aside for very low-income households. HUD recently released guidance on this change, which affects all three rounds of funding. The allocation of the funds should be available soon and we will post the information on our site.
On September 1,2010, Housing and Urban Development (HUD) Secretary Shaun Donovan today announced an unprecedented agreement with the nation’s top mortgage lenders to offer selected state and local governments, and nonprofit organizations a “first look” or right of first refusal to purchase foreclosed homes before making these properties available to private investors.
The National First Look Program is a first-ever public-private partnership agreement between HUD and the National Community Stabilization Trust (Stabilization Trust). In collaboration with national servicers, Fannie Mae, and Freddie Mac, the First Look program is intended to give communities participating in HUD’s Neighborhood Stabilization Program (NSP) a brief exclusive opportunity to purchase bank-owned properties in certain neighborhoods so these homes can either be rehabilitated, rented, resold or demolished.
Some of the next step strategies for sponsors interested in using NSP for supportive housing should include identifying affordable rental units within an NSP-funded redevelopment project provides a starting point to undertake the task of compiling the other crucial pieces of the supportive housing model. Units set-aside as affordable for households at or below 50 percent of Adjusted Median (AMI) are easier to make affordable to the special needs population than housing that has no affordability restrictions. Even with the housing created through the 25/50 income targeting component of the NSP, some form of operating or rental subsidy will be required to cover operating costs while still creating affordability to the PSH population that traditionally has incomes between 15 and 20 percent of AMI.
Combining the units created in NSP-funded projects with some form of operating or rental subsidy, along with access to flexible supportive services for those being served in the units, will help make the inclusion of PSH units a successful component of a jurisdiction’s use of their NSP resources.
Over the next few weeks we will publish more information on NSP3 and how it can be resource for developing supportive housing.
