Public Hears About Neighborhood Stabilization Program

Those attending the Public Hearing Thursday evening at City Hall received information about the Neighborhood Stabilization Program 3, NSP 3.  They learned about the Neighborhood Stabilization Program, NSP, who qualifies to participate, what NSP does, Target Area and criteria.

“I wanted to see what type of a program this really is. Want to know how it could help communities, city and county. Also want to make sure we don’t repeat the cycle that got us in this in the first place,” said Clyde Strickland, 40 year resident, who came with his wife Sandra.  

The Neighborhood Stabilization Program was created by Congress in July 2008 to give citizens a path to affordable homeownership. It received initial funding of $3.92 billion in grants to local and state governments to acquire and rehabilitate foreclosed residential properties. Gwinnett County got $14,409,171 of NSP 1 funding.

The program mission is to purchase foreclosed residential properties in targeted areas. Rehabilitate (renovate) the homes and then sell the homes to low-, moderate-, and middle-income homebuyers. Also provides affordability assistance to the homebuyer. Purchase and rehabilitates foreclosed multi-family properties to rent to low income families. (NSP is separate from and is not affiliated with Section 8 housing.)

Since June of 2009, NSP 1 has purchased 77 homes; rehabilitated 70, sold 40 and had 10 under contract. The program has provided $900,000 in home buyers’ assistance. Reinvestment has generated over $5.3 million in Program Income.

In 2009, NSP 3 was created by Congress with $1 billion in nationwide funding. The U.S. Department of Housing and Urban Development, HUD, requires that funds be targeted in neighborhoods to have maximum impact. Funds spent must address 20 percent of area foreclosures.  

Gwinnett County will receive $2,065,581 directly from HUD. Money will be expended through the Neighborhood Stabilization Program 3, NSP 3. This money will be spent in Gwinnett’s Target Area for the purchase of foreclosed residential properties, rehabilitation and sell to eligible homebuyers.  These funds will enable 15 foreclosed homes in the areas of Village Run, Paper Mill Road, Springlake Road, Shoal Creek, New Hope Road, Canterbury and Grayson Highway, to get necessary repairs before they will be sold to qualifying families.

“The Lawrenceville area was selected as Target Area not only because it has the county seat, but because it meets the other selection criteria.  It met Census Tracts requirements and score.  HUD scores Census Tracts (1-20) on the number and percent of homes foreclosed upon in 2010. High risk sub-prime loans issued from 2004-2007. And the number of homes with mortgages in default or delinquent in 2010. In Georgia Census Tract score must be 17,” said Bill Kingsbury, Director, Gwinnett County Neighborhood Stabilization Program.

Additional criteria include the availability of community facilities, employment opportunities and mass transportation.

“Again Lawrenceville satisfies community and educational facilities requirements. The area has ample employment opportunities with hospital and county government. As for mass transportation in Gwinnett County, that was a challenge,” said Kingsbury. “We used Route 40 bus route to satisfy this mass transit criteria.”

In order to qualify to purchase NSP homes, the buyer must not currently own residential property. He or she must qualify for a 30-year fixed-rate mortgage. The buyer has to invest one percent of the purchase price towards buying the home. They must attend and complete an eight-hour, HUD approved homebuyers course, which emphasizes the importance of home maintenance. The home must be occupied as principal residence. Finally, depending on size of household, a maximum household income must be earned. For example in a four-person household, the maximum household income is $86,150.

NSP 3 additional funding will come from the Georgia Department of Community Development in the amount of $3,493,895. This amount added to HUD allocation means a total of $5,559,476 is proposed for use in the Target Area. Additional funds increases the number of NSP 3 homes to a total of 30. It is projected that with additional funds, the total number of homes that will go through NSP 3 will jump from 60 to 90.

As for the City of Lawrenceville, it is considered to be a participating partner with no monetary investment or commitment.

“NSP 3 is happy to have input from the city, but the city is not putting any money into NSP. City was already committed through Heritage Trail to improve sidewalks on Paper Mill Road. This lead NSP 3 into looking at and choosing that as a targeted area,” said Mayor Judy Jordan Johnson.

City participation includes $727,000 in sidewalk and storm water improvements on Paper Mill Road. Enhanced code enforcement, additional crime prevention, community organization and homeownership education are other identified areas of city participation.

Partnering with NSP 3 is the Lawrenceville Housing Corporation, LHC. It has been recommended that LHC receive $849,116 in HOME funds to encourage homeownership. Provide down payment assistance for eligible buyers. Encourage homebuyers to purchase in Target Area.

Gwinnett County HOME Rehabilitation will provide $20,000 in assistance to eligible homeowners. HOME will also work with Quality of Life Program to direct homeowners to the program.

Working with NSP to maximize use of funds, Gwinnett County HOMEstretch will provide down payment assistance to eligible homeowners.

“Part of my job as a realtor is to know and learn about programs like NSP so that I can serve my clients to the fullest. The NSP is a perfect solution to home ownership for single parent.  Homes in foreclosure affect entire communities. If used correctly, programs like NSP can stabilize and revitalize neighborhoods that are being devastated by foreclosures,” said Eric Reid, Managing Broker, Renaissance Realty Group.