CITY OF VISALIA, CALIFORNIA
THE NSP SUBSTANTIAL AMENDMENT
AMENDMENT: ADDITION OF ELIGIBLE USE “A”
Jurisdiction(s): City of Visalia
(identify lead entity in case of joint
agreements)
Jurisdiction Web Address:
www.visalia.city
(URL where NSP Substantial Amendment
materials are posted) See below
Contact Person: Leslie Caviglia
Address: 220 N Santa Fe
Visalia, California 93291
Telephone: (559) 713-4312
Fax: (559) 713-4800
Email: [email protected]
Second Contact: Margie Perez, Housing
Specialist, 707 West Acequia, Visalia,
CA 93291; (559)713-4460;
[email protected]
http://www.visalia.city/depts/finance/housing_n_cdbg_services/publications_n_reports/neig hborhood_stabilization_program.asp
This Amendment t o the Acti on Plan for the Neighborhood Stabilization Program 1 is hereby further amended to include the following:
Visalia has exceeded the NSP requirements, including set aside requirements through acquisition, rehabilitation and resell of single-family properties to income qualifying households in both categories (up to 50% AMI and between 51%- 120% AMI). The City was also successful in these income categories.
The City of Visalia is nearing closeout of its Neighborhood Stabilization Program (NSP1) and is propo sing to reallocate approximately $120,000 in Neighborhood Stabilization Program 1 (NSP1) funds from recaptured program income and available funds obligated for acquisition, rehabilitation and resell of foreclosed homes through Habitat for Humanity.
The market has changed substantially since the original grant was awarded; and there are very limited opportunities to make offers on foreclosed homes in the NSP1 targeted area.
NSP1 funds not expended must be obligated to NSP1 eligible activities i n order to meet Federal NSP1 grant requirements. The City proposes to provide First Time Homebuyer (FTHB) assistance as a deferred 30 -year seco ndary financing to newly constructed single-family homes with the use of HOME In vestment Partnerships Program (HO ME) funds, located in Visalia, CA, which meets NSP1 requirements.
NSP1 funds will be used for the secondary financing for 5 -single family homes for income eligible households that have not owned a home in the pas t 3 years , under the Eligible Use “A” – Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties.
2 The single-family home s are located within the NSP1 target area, with the location addresses of 101, 105, 111, and 113 NW 5th Avenue, and 1113 N Court Street in Visalia, CA. The homes will be sold to households with income meeting the NSP1 income limits at or below 120% area median income. Homebuyers will be required to provide annual occupancy verification for the life of the NSP1 loan, which the Cit y will revie w for compliance.
The City proposes to amend the NSP1 Action Plan 2008, to: 1) Add Eligible Use Activity (“A”) Estab lish financi ng mechanisms for p urchase and redevelopment of foreclos ed homes and residential properties. 2) redirect Neighborhood Stabilization Program (NSP1) Funding from Habitat for Humanity (Habitat) to First Time Homebuyer Assistance under eligible use “A” activity; 3) and provid e remaining funding (approximately $ 120,000) to eligible NSP1 Homebuyers for use of NSP1 funds towa rd 30-year deferred soft-second mortgage to assist income eligible homebuyers. Since this action adds a new eligible activity and new identified beneficiaries, the City has determined that a formal program amendment is required.
NSP NEW ACTIVITY DETAILS
A. AREAS OF GREATEST NEED
The property is within the identified “Area of Greatest Need” – NSP1 Boundaries.
B. DISTRIBUTION AND USES OF FUNDS
The City will provide NSP 1 homebuyer assistance to income eligible homebuyers as a soft-second mortgage. The NSP sof t-second mortgage will be 3 0-year deferred at zero percent interest. The NSP 1 loan will be due and payable in full on the 30 th year at conclusion of the deferral period in accordance with the terms of the Note required by the Owner’s Participation Agreement . The deferral p ayment principal shall become immediately due and payable at such time as either: the eligible homebuyer(s) ceases to maintain continuous residence on the property; Title to the property is transferred; or the property is refinanced.
1) ELIGIBLE ACTIVITY FROM THE NSP REGULATIONS:
• NSP Eligible Use “A”- Financing Mechanisms
2) CORRELATED ELIGIBLE ACTIVITY FROM THE CDBG ENTITLEMENT REGULATIONS:
The correlated eligibility activity from the CDBG Entitlement Regulations for the use of the NSP funding is as follows:
• 24 CFR 570.201 (n) Homeownership Assistance
C. DEFINITIONS AND DESCRIPTIONS
3 1) Describe how the grantee will ensure continued affordability for NSP assiste d property
The Property will be subject to a Restriction Agreement which will be reco rded against the property. The Agreement shall run with the land and shall bind Owner and all of Owner's successors in interest as owners of the Property.
2) Describe hou sing rehabilitation standards that will apply to NSP assisted activities.
The City of Visalia’s Building Department conducts inspections to confirm that the construction of properties meet s California Building Code requirements. The policy follows local and state regulations and codes , housing quality and habitability standards for construction.
D. LOW INCOME TARGETING
The Homebuyer Assistance will meet the Low-Moderate and Middle -Income ( LMMH) national objective. The project will be within an NSP Targeted area , f or households at or below 120% of the area median income. The Homebuyer Assistance will be provided to NSP1 eligible beneficiaries. All beneficiaries will have income certifications.
E. ACQUISITIONS
Five single -family homes were construct ed on vacan t land with the location addresses of 101, 105, 111, and 113 NW 5th Avenue, and 1113 N Court Street in Visalia, CA. The homes will be sold to households with income meeting the NSP1 income limits at or below 120% area median income.
The number of units- five (5) and there is no intention to demolish units.
F. PUBLIC COMMENT
Provide a su mmary of public comments received to the proposed NSP Substantial Amendment.
During the 30-day noticing of this proposed NSP Substantial Amendment, staff provided information regarding the amendment at three (3) community committee meetings and public hearings, listed below, and the public in general were invited to attend. As identified in the Citizens Participation Plan, the community committees, Citizens Advisory Co mmittee/Disability Advocacy Committee , along with the general public.
The community comments and City Staff responses shall be included.
Staff also presented the NSP1 Amendment at the City Council public hearing meeting s, held on Monday, April 3, 2023 , and Monday, April 17, 2023, held at the City H all, Council Chambers, 707 West Acequia, Visalia, CA, at 7:00 p.m.
4 In ad dition to inviting the public and committees, Staff published the public hearing notice in the Visalia Times Delta. The notice was also posted at City Hall East, City Hall West, City Administration, The Public Library, the City’s website , and the City’s social media outlets. A copy of the public notice is attached as Exhibit “A”.
ACTIVITY NO. (#) – Self Help Project NSP INFORMATION BY ACTIVITY (NEW
ACTIVITY- ADDED )
(1) Activity Name: Homeownership Assistance: Financing mechanisms for purchase of residential properties of vacant, ab andoned, foreclosed, or newly constructed on vacant land.
(2) Activity Type : Redevelopment. The identified NSP eligible uses and the CDBG eligible activity’s are as follows:
• NSP: §2301(c)(3)(A)Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties.
• CDBG: 24 CFR 570.201(a) Acq uisition; (b) Disposition, ( n) Homeownership Assistance
(3) National Objective: (Must be a national objective benefiting low-, moderate - and middle-income persons, as defined in the NSP Notice—i.e., ≤ 120% of area median income).
Low Moderate- and Middle -Income Housing (LMMH): The City of Visalia will provide NSP1 funding to provide or improve permanent residential structures that will be occupied by a household whose income is at or below 12 0% area median income (AMI).
The NSP1 homebuyer assistance will be p rovided to households with income who meet the NSP1 income limits at or below 120% area median income. Beneficiaries will be required to certify the ir household income at the time of assistance, which the City will review for compliance.
(4) Projected Start Date: April 1, 2023
(5) Projected End Date: December 31, 2023
(6) Responsible Organization : (Describe the responsible orga nization that will implement the NSP activ ity, including its name , location, and administrator contact information)
HUD has designated the City of Visalia as an entitlement city and a Participating Jurisdiction. The City of Visalia will provide the remai ning NSP funding to a qualified households for homebuyer assista nce as a s oft-second mortgage. (as defined und er 24
5 CFR 570.201 (f) (n), to provide low interest loans to individuals who purchase homes for use as their primary residence.
The City will underwrite the project, review income upon initial occupancy only, approve the household eligibility, cash flow , and reserves as needed. Beneficiaries for this amended activity will be persons with incomes below the maximum for the NSP1 program who are in n eed of homebuyer assistance for purchase of a property located at 101, 105, 111, or 113 NW 5th Avenue, or 1113 N Court Street in Visalia, CA. Self-Help Enterprises will be responsible for affirmatively marketing the available units to marginalized subpopulations in the City of Visalia, who may not have otherwise availed themselves of the services provided. Since this action adds a new eligible activity and newly identified beneficiaries, the City has determined that a formal program amendment is required.
Location and contact information is as follows:
City Contact:
City of Visalia
Leslie Caviglia, City Manager
220 N Santa Fe Street
Visalia, California 93291
Duns#030999866
Staff Contact:
Leslie Caviglia, City Manager (559) 713-4317
Renee Nagel, Finance Director (559) 713-4375
Margie Perez, Housing Specialist (559) 713-4460
Non-Profit Developer:
Self Help Enterprises, Inc.
(7) Location Description : (Description may include specific addresses, blocks or neighborhoods to the extent known.)
Proposed properties are located at 101, 105, 111, and 113 NW 5th Avenu e, and 1113 N Court Street in Visalia, CA.
(8) Activity Description:
This activity will address neighborhood stabilization in the NSP1 Boundaries through the financing mechanism for purchase of residential propert ies that may include soft -second mortgages for households a t or below 120 % of the area median income (AMI) level under the Eligible Use “ A”- Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties.
Include a narrative describing the area of gre atest need that the activity addresses ; the expected benefit to income-qualified persons; and whether funds used for this activity will
6 be used to meet the low-income housing requirement for those below 50% of area median income.
This activity ad dresses the need of providing homeownership assistance in the form of secondary financing to secure a sufficient amount of financin g to make housing affordable for low-and moderate-income households. Funds for this activity will not be used to meet the l ow-income housing requirement for those below 50% of the area median income level. The City has met the 25% se t asid e low-income housing requirement in previously funded NSP activities.
(9) Total Budget: (Include public and private components)
NSP1 funds will be $120,000 of program funds and program income but could increase slightly if additional program income is received during project negotiations of the funding agreement. The total costs asso ciated with acquisit ion and construction is approximately $1,000,000. Other po tential sources of funding for the project include conventional financing, Developer capital, foundation resources, private donations, and HUD HOME Investment Partnerships Program.
(10) Performance Measures: (Include public and private components)
The proposed NSP1 Amendment will provide Homebuyer Assistance. Accomplishments will be achieved following the close of escrow of an NSP1 income eligible homebuyer(s).
Annual home occupancy verification will be required for the life of the NSP1 loan.
Exhibit “A”, NSP1 Target Area Map
Exhibit “B”, Public Hearing Notice
7 EXHIBIT “A”
MAP –NSP1 TARGET AREA
8 EXHIBIT “B”:
PUBLIC HEARING NOTICE
City of Visalia Public Notice of the
Draft 2023 Annual Action Plan, 2022 Action Plan Amendment, 2022 NSP Action Plan Amendment, and 2021 Action Plan Amendment including the HOME ARP Allocation Plan Amendment
Review and Comment Period: March 17, 2023 – April 17, 2023
Notice is hereby given that the City of Visalia is seeking input on the draft Program Year (PY) 2023 Annual Action Plan, PY 2022 Action Plan Amendment, PY 2022 Neighborhood Stabilization Program (NSP) Action Plan Amendment, and PY 2021 Action Plan Amendment including the HOME Investment Partnerships American Rescue Plan Program (HOME-ARP) Allocation Plan Amendment. The 30-day public comment period is March 17, 2023 – April 17, 2023. The draft plans are available for public review on the City’s website at www.visalia.city/depts/finance/housing_n_cdbg_services/public_notices.asp.
Staff invites you to attend a community meeting and/or public hearing:
• Community Meeting – April 5, 2023, at 5:30pm at 220 N. Santa Fe, Visalia • Public Hearing – April 3, 2023, at 7:00pm at 707 W. Acequia Ave., Visalia • Public Hearing – April 17, 2023, at 7:00pm at 707 W. Acequia Ave., Visalia
If you are unable to attend a meeting, you may submit your comments in writing to Margie Perez, Housing Specialist at [email protected].
In Compliance with the American Disabilities Act, if you need special assistance to participate in meetings call (559) 713-4512 48-hours in advance of the meeting. For Hearing Impaired call (559) 713-4900 (TTY) 48-hours in advance of the scheduled meeting time to request services.
Published 3/15/23, 3/17/23, & 3/31/23