AROUND THE AGENCY

HUD Announces Changes to the Definitions of “Foreclosed” and “Abandoned” for the Neighborhood Stabilization Program

Last Friday the Department of Housing and Urban Development (HUD) released two Notices affecting the Neighborhood Stabilization Programs 1 and 2. Specifically, HUD is changing how it defines “foreclosed” and “abandoned” to include properties in mortgage default and uninhabitable homes with lingering housing code violations.

The original definition of foreclosed made eligible only those properties where the foreclosure process had been completed. Grantees had complained to HUD that this definition was overly restrictive and preventing addressing those homes which were in poor condition and where the foreclosure process was lingering. Properties will now be eligible for NSP assistance when any of the following conditions apply: the mortgage on a property is at least 60 days delinquent and the owner has been notified; the property owner is 90 days or more delinquent on tax payments to the jurisdiction; foreclosure proceeds have been initiated or completed under state or local law; or foreclosure proceedings have been completed and title has been transferred to an intermediary aggregator or servicer that is not an NSP grantee, subrecipient, developer or end user.

Under the Notice HUD has abandoned the definition or “abandoned” from the current requirement that that the property had been foreclosed on and vacant for at least 90 days to now include homes where no mortgage or tax payments have been made on the property for at least 90 days or a code enforcement inspection has determined that the property is not inhabitable and the owner has taken no corrective action within 90 days of notification of the deficiencies.

The first Notice (attached), Docket No. 5321-N-03, which applies to the Neighborhood Stabilization Program 1, is retroactive to the date of the submission by grantees to HUD of a Substantial Amendment and Action Plan, and it becomes effective on the date of the Notice’s publication in the Federal Register, probably Thursday of this week.

The second Notice (attached), Docket No. FR – 5321-N-04, applies the changes in definition to the NSP 2 program. NSP 2 grantees may apply these revised definitions as of the effective date of their grant agreements.

The expanding definitions come in response to concerns express by grantees that the pervious, narrower definitions were hampering program implementation. Grantees are faced with a September 30 th requirement to have all NSP 1 funds obligated. HUD has been working diligently with grantees it has identified as potentially having difficulty in meeting this deadline.

Assistant Secretary Marquez Announces FY 2010 CPD Formula Allocations; Urges Consideration for Returning Veterans in Shaping Programs, and Reporting of Performance Measures

In announcing FY 2010 allocations last week for the Community Development Block Grant, HOME, Emergency Shelter Grants and Housing Opportunities for Persons with AIDS, HUD Assistant Secretary for Community Planning and development Mercedes Marquez made two requests: “... First, the Department urges grantees to consider the needs or returning veterans and their families in the design and administration of these formula grant programs. Our fellow Americans have served our nation on the battlefields of Iraq and Afghanistan and countless other places around the globe. Many veterans are returning to our communities with wounds and injuries that may make it difficult for them to find housing or support themselves and /or their families. I ask that you consider their sacrifice and ensure that these men and women receive every appropriate consideration in the use of these funds at the local level.

Second, it is important that HUD have complete performance measurement data for its formula grant programs to report to Congress, the Office of Management and Budget, and the public at large. Grantees must report outcome indicators for all open activities in the Integrated Disbursement and Information System (IDIS) to assess their performance toward achieving their objectives and outcomes in their Consolidate Annual Performance and Evaluation Report...”

LEGISLATIVE UPDATE

House Democrats Pushing nearly $100 Billion for Creation of Public Sector Jobs Bill

House Democrats, led by Education and the Workforce Committee Chairman George Miller (D-CA) have introduced H.R. 4812, the “Local Jobs for America Act of 2010.” The bill, which currently has 105 cosponsors, would provide $75 billion over two years ($37.5 billion per year) to states and units of local government to save or create jobs using a variant of the Community Development Block Grant formula. Seventy percent of the funds would be allocated to entitlement cities and urban counties, 25% on the basis of population, 25% on poverty, and 50%on unemployment, and 30% to the states on the basis of the same formula. Of the states’ share 50% must be made available to units of local government in non-entitlement areas and 50% to community based organizations to provide by contract services not customarily provided by a unit of local government in the area. The program would be administered by the Department of Labor.

Grantees could use five percent of their funds for administrative purposes, and there would be no local match. Each grantee could use up to 50% of its funding to retain employees that might otherwise lose their jobs because of budget shortfalls. Grantees may use the remaining funding to hire new employees or rehire those previously terminated There is no requirement to retain employees once the funding runs out. Employees would have to be hired on a full-time basis with benefits under existing labor contract or agreements. There is no cap on a per-employee cost; however no more than 20% of the funds can be used for management employees.

The bill also provides $23 billion to help states support an estimated 250,000 education jobs, $1.18 billion to hire 5,500 law enforcement officers, $500 million to hire and retain fire fighters and $500 million for 50,000 additional on-the-job training positions to help private business expand employment.

House leaders are expected when they return from the Passover/Easter recess to decide how to handle the bill. It is possible there will be no markup in the Committee and the bill taken directly to the floor. No comparable legislation has been introduced in the Senate. While House passage is likely the legislation would face an uphill battle for passage in the Senate where 60 votes would be needed for its consideration and passage.

ATTACHMENTS:

NSP Notice on Abandoned Foreclosed (FR-5321-N-03)

NSP Notice on Abandoned Foreclosed (FR-5321-N-04)

AROUND THE AGENCY

HUD Announces Changes to the Definitions of “Foreclosed” and “Abandoned” for the Neighborhood Stabilization Program

Last Friday the Department of Housing and Urban Development (HUD) released two Notices affecting the Neighborhood Stabilization Programs 1 and 2. Specifically, HUD is changing how it defines “foreclosed” and “abandoned” to include properties in mortgage default and uninhabitable homes with lingering housing code violations.

The original definition of foreclosed made eligible only those properties where the foreclosure process had been completed. Grantees had complained to HUD that this definition was overly restrictive and preventing addressing those homes which were in poor condition and where the foreclosure process was lingering. Properties will now be eligible for NSP assistance when any of the following conditions apply: the mortgage on a property is at least 60 days delinquent and the owner has been notified; the property owner is 90 days or more delinquent on tax payments to the jurisdiction; foreclosure proceeds have been initiated or completed under state or local law; or foreclosure proceedings have been completed and title has been transferred to an intermediary aggregator or servicer that is not an NSP grantee, subrecipient, developer or end user.

Under the Notice HUD has abandoned the definition or “abandoned” from the current requirement that that the property had been foreclosed on and vacant for at least 90 days to now include homes where no mortgage or tax payments have been made on the property for at least 90 days or a code enforcement inspection has determined that the property is not inhabitable and the owner has taken no corrective action within 90 days of notification of the deficiencies.

The first Notice (attached), Docket No. 5321-N-03, which applies to the Neighborhood Stabilization Program 1, is retroactive to the date of the submission by grantees to HUD of a Substantial Amendment and Action Plan, and it becomes effective on the date of the Notice’s publication in the Federal Register, probably Thursday of this week.

The second Notice (attached), Docket No. FR – 5321-N-04, applies the changes in definition to the NSP 2 program. NSP 2 grantees may apply these revised definitions as of the effective date of their grant agreements.

The expanding definitions come in response to concerns express by grantees that the pervious, narrower definitions were hampering program implementation. Grantees are faced with a September 30 th requirement to have all NSP 1 funds obligated. HUD has been working diligently with grantees it has identified as potentially having difficulty in meeting this deadline.

Assistant Secretary Marquez Announces FY 2010 CPD Formula Allocations; Urges Consideration for Returning Veterans in Shaping Programs, and Reporting of Performance Measures

In announcing FY 2010 allocations last week for the Community Development Block Grant, HOME, Emergency Shelter Grants and Housing Opportunities for Persons with AIDS, HUD Assistant Secretary for Community Planning and development Mercedes Marquez made two requests: “... First, the Department urges grantees to consider the needs or returning veterans and their families in the design and administration of these formula grant programs. Our fellow Americans have served our nation on the battlefields of Iraq and Afghanistan and countless other places around the globe. Many veterans are returning to our communities with wounds and injuries that may make it difficult for them to find housing or support themselves and /or their families. I ask that you consider their sacrifice and ensure that these men and women receive every appropriate consideration in the use of these funds at the local level.

Second, it is important that HUD have complete performance measurement data for its formula grant programs to report to Congress, the Office of Management and Budget, and the public at large. Grantees must report outcome indicators for all open activities in the Integrated Disbursement and Information System (IDIS) to assess their performance toward achieving their objectives and outcomes in their Consolidate Annual Performance and Evaluation Report...”

LEGISLATIVE UPDATE

House Democrats Pushing nearly $100 Billion for Creation of Public Sector Jobs Bill

House Democrats, led by Education and the Workforce Committee Chairman George Miller (D-CA) have introduced H.R. 4812, the “Local Jobs for America Act of 2010.” The bill, which currently has 105 cosponsors, would provide $75 billion over two years ($37.5 billion per year) to states and units of local government to save or create jobs using a variant of the Community Development Block Grant formula. Seventy percent of the funds would be allocated to entitlement cities and urban counties, 25% on the basis of population, 25% on poverty, and 50%on unemployment, and 30% to the states on the basis of the same formula. Of the states’ share 50% must be made available to units of local government in non-entitlement areas and 50% to community based organizations to provide by contract services not customarily provided by a unit of local government in the area. The program would be administered by the Department of Labor.

Grantees could use five percent of their funds for administrative purposes, and there would be no local match. Each grantee could use up to 50% of its funding to retain employees that might otherwise lose their jobs because of budget shortfalls. Grantees may use the remaining funding to hire new employees or rehire those previously terminated There is no requirement to retain employees once the funding runs out. Employees would have to be hired on a full-time basis with benefits under existing labor contract or agreements. There is no cap on a per-employee cost; however no more than 20% of the funds can be used for management employees.

The bill also provides $23 billion to help states support an estimated 250,000 education jobs, $1.18 billion to hire 5,500 law enforcement officers, $500 million to hire and retain fire fighters and $500 million for 50,000 additional on-the-job training positions to help private business expand employment.

House leaders are expected when they return from the Passover/Easter recess to decide how to handle the bill. It is possible there will be no markup in the Committee and the bill taken directly to the floor. No comparable legislation has been introduced in the Senate. While House passage is likely the legislation would face an uphill battle for passage in the Senate where 60 votes would be needed for its consideration and passage.

ATTACHMENTS:

NSP Notice on Abandoned Foreclosed (FR-5321-N-03)

NSP Notice on Abandoned Foreclosed (FR-5321-N-04)