CDBG NSP1

 

This website is primarily for information on CDBG NSP1. Also, please realize the date for submission of a CDBG NSP1 application was due Wednesday, May 6, 2009, therefore NDED is no longer receiving applications for this program.

 

Introduction & Program History

The U.S. Department of Housing and Urban Development (HUD) new Neighborhood Stabilization Program 1 (NSP1) 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. The Community Development Block Grant (CDBG) NSP1 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 neighboring homes. The State of Nebraska was awarded $19.6 million in CDBG NSP1 funds. The program is authorized under Title III of the Housing and Economic Recovery Act of 2008. (HUDs CDBG NSP Website and HUDs CDBG NSP News Release.)

The Nebraska Department of Economic Development (NDED) hosted a briefing on October 17, 2008 at the Lincoln State Office Building detailing the CDBG NSP1. This briefing also detailed the CDBG NSP1 Pre-Application process. CDBG Pre-Applications were made available in October and were due November 3, 2008. The pre-application process was provided as a reference document to assist in the development of the NDED CDBG NSP1 application. Specifically, a pre-application was not required in order to apply for CDBG NSP1 funds. All applicants and projects were eligible to submit a pre-application, but not all pre-applications will meet the eligibility and/or threshold requirements in the final application process.

The NDED received 64 pre-applications representing potential CDBG NSP1 requests of over $60 million statewide (list of pre-application received XLS). The CDBG NSP1 Pre-Application process provided guidance for the NDED in submitting Nebraska’s CDBG NSP1 Substantial Plan to the HUD.

The NDED was required to provide a proposed CDBG NSP1 grant submission (substantial amendment to the 2008 Housing and Community Development Annual Action Plan) for public review and comment. The NDED CDBG NSP1 proposed grant submission was made available on November 10, 2008 on this web-page. The NDED accepted written comments from the public on the plan from November 10, 2008 thru November 25, 2008. Comments were received and are included in the NDED CDBG NSP1 plan.

The original Nebraska CDBG NSP1 grant to HUD was submitted on December 1, 2008. After numerous plan amendments the NDED received final approval of their CDBG NSP1 plan on February 13, 2009, and Funding Approval and the CDBG NSP1 Grant Agreement on March 19, 2009. The complete CDBG NSP1 Plan as approved by HUD can be downloaded in (PDF).

Application guideline workshops were held on March 18, March 19 and April 2, 2009 referencing how to apply for the CDBG NSP1 funds. Application guidelines were made available on March 18, 2009 and are due at the NDED on May 6, 2009 by 5 p.m. Central Daylight Time. A draft of the CDBG NSP1 Application Guidelines are available at (PDF) or (DOC).

DED held a public comment period on a proposed amendment to the CDBG NSP1 Plan August 19 – September 4, 2009. The purposes of the amendment was a change in Section B. Distribution and Uses of Funds of the CDBG NSP1 Plan to allow Grantee and State Administration funds to be awarded to projects in the eligible areas of greatest need using the Application Scoring Process outlined in Section B of the CDBG NSP1 Plan. No public comments were received regarding this proposed amendment. The complete and revised CDBG NSP1 Plan can be download in (PDF).

Eligible Activities

CDBG NSP1 funds may be used for the following activities.

  1. Establish financing mechanisms for the purchase and redevelopment of foreclosed upon homes and residential properties, including such mechanisms as soft-seconds, loan loss reserves, and shared-equity loans for low-and moderate-income homebuyers.
  2. Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties.
  3. Establish land banks for foreclosed homes.
  4. Demolish blighted structures.
  5. Redevelop demolished or vacant properties.
The Nebraska CDBG NSP1 plan does not include Eligible Use C, therefore establishing land banks for foreclosed homes will not be eligible.

 

Project Eligibility

The NDED CDBG NSP1 funds are not available statewide. Only those applications from the following counties are eligible to apply for funding under CDBG NSP1: Adams, Antelope, Buffalo, Burt, Cass, Chase, Cheyenne, Clay, Colfax, Cuming, Dakota, Dawes, Dawson, Dixon, Dodge, Douglas, Franklin, Gage, Garfield, Hall, Hamilton, Harlan, Holt, Howard, Jefferson, Johnson, Kearney, Keith, Kimball, Lancaster, Loup, Madison, Merrick, Nemaha, Nuckolls, Otoe, Perkins, Phelps, Pierce, Platte, Polk, Red Willow, Richardson, Saline, Sarpy, Saunders, Scotts Bluff, Seward, Stanton, Thayer, Thurston, and Washington. CDBG NSP1 funds must be used in incorporated areas.

Any activities occurring in the following counties are ineligible: Arthur, Banner, Blaine, Boone, Box Butte, Boyd, Brown, Butler, Cedar, Cherry, Custer, Deuel, Dundy, Fillmore, Frontier, Furnas, Garden, Gosper, Grant, Greeley, Hayes, Hitchcock, Hooker, Keya Paha, Knox, Lincoln, Logan, McPherson, Morrill, Nance, Pawnee, Rock, Sheridan, Sherman, Sioux, Thomas, Valley, Wayne, Webster, Wheeler, and York.

Any blighted structure that is to be demolished through a NDED CDBG NSP1 project must be located in an identified census block group and must be either in an area defined by NDED as having a likelihood of a higher than average percentage of houses that are dilapidated or the administrator must complete a Structure Condition Survey Tool that identifies the area as having an above average number of dilapidated houses. In addition, the blighted structure must be in an incorporated area that either enforces housing codes or nuisances ordinances or agrees to do so within 12 months of award. Nebraska’s CDBG NSP1 plan limits 30% of its total CDBG NSP1 funds to be allocated to demolition only projects that do not include eligible CDBG NSP1 redevelopment activities.

CDBG NSP1 Contacts

For CDBG NSP1 projects that will be located in the City of Lincoln or the City of Omaha, applicants must work closely with the local contact listed below. The City of Omaha and the City of Lincoln develop Housing and Community Development Consolidated Plans for HUD therefore, projects must be consistent with these local plans in addition to meeting all other eligibility requirements.

City of Lincoln
Steve Werthmann, Housing and Real Estate Manager
Urban Development Department
(402) 441-8621
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City of Omaha
James Thele, Assistant Director
Housing and Community Development Division
Omaha Planning Department
(402) 444-5206
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For CDBG NSP1 projects that will be located outside the City of Lincoln or the City of Omaha, applicants are encouraged to work closely with the Community and Rural Development Division CDBG NSP1 Staff:

Lara Huskey, Division Director
(402) 471-3759
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and

Lynn Franzen, Economic Development Consultant
(402) 440-2599
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How To Apply For CDBG NSP1 Funds

Eligible applicants for CDBG NSP1 funds include non-profit-organizations and local units of government.

A draft of the CDBG NSP1 Application Guidelines are available (PDF) or (DOC). Applications are due at NDED on May 6, 2009 by 5 p.m. Central Daylight Time.

What you can do now to prepare to submit an application for Nebraska CDBG NSP1 funds…

  1. Frequently monitor this web page. The bottom of the page includes a date as to when it was last updated.
  2. Review (a) the CDBG NSP Statue, (b) the CDBG NSP Final Notice, (c) the CDBG NSP Eligible Use, and (d) the CDBG NSP1 Application Guidelines (PDF) or (DOC).
  3. Begin immediately to review and work with the CDBG NSP1 Application Guidelines found on this web page.
  4. Identify the location of your project to determine if: (a) it is in an eligible county and (b) if it is in a Category A or Category B Zip Code Area to determine how well it will score.
  5. Form partnerships and meet with local interested parties about your project proposal. The application will require you to address any commitments from additional investors. Have these commitments ready to go.
  6. Review the PowerPoint presentations from the DED CDBG NSP1 workshops on March 18 and April 2, 2009.
  7. Do not purchase foreclosed upon or abandoned properties in anticipation that they will be eligible foreclosed upon or abandoned properties. This step can not take place until after the project is selected for an award, a contract is executed and the CDBG Environmental Review has been completed.
  8. If your project has potential eligibility for the CDBG program that is not NSP1, it is recommended that you do not set- aside developing that application to instead submit the project for CDBG NSP1. It appears that the CDBG NSP1 application process will be extremely competitive with possibly 5 times the amount of funds requested than NDED will have available to award.
  9. Make sure you have identified an eligible applicant for the project – local unit of government or a non-profit organization.
  10. If your project applicant or administrator will not be the City of Lincoln or the City of Omaha – you must select a NDED CDBG Certified Administrator prior to the application due date on May 6, 2009.
Helpful Hints to remember when submitting a pre-application…
  • As a result of the aggressive timeline for the use of CDBG NSP1 funds, projects that were included in a pre-application will benefit in the scoring process (however, it is not a requirement for applicants to have submitted a pre-application).
  • Projects that are located entirely within zip code areas that have high average monthly foreclosure rates and a high ratio of the number of households will receive a benefit in the CDBG NSP1 scoring process. (See Reference Material below for a spread sheet documenting this information.)
  • There is a required priority for areas (1) with the greatest percentage of home foreclosures; (2) with the highest percentage of homes financed by a subprime mortgage related loan; and (3) identified by the state as likely to face a significant rise in the rate of home foreclosures.

Reference Materials

The following are Reference Materials provided by NDED that will assist applicants with information/data in preparing their CDBG NSP1 application:

  • Activity Set-Up Report (.DOC) or (.PDF)
  • Completion Report
  • Request for Funds
  • Commonly Asked Nebraska CDBG NSP1 Questions (PDF) or (DOC)
  • Spreadsheet of zip codes in Category A – highest rates defined as average monthly foreclosures of 3 or greater or average ratio of 0.60% or greater and Category B – high rates defined as average monthly foreclosures of 1.0 to 2.9 or average ratio of 0.40% to 0.59%. (XLS)
  • A map of zip codes located in Category A and Category B (PDF) or Google Earth Files (KML) or (KMZ)
  • Nebraska Income Limits for 50% and 120% Area Median Income (AMI) (XLS)-57 KB)
  • Structure Condition Survey Tool for Demolition Only projects under CDBG NSP1 (PDF) or (DOC)
  • The following maps identify locations in Nebraska where CDBG NSP1 projects can be located and where eligible demolition projects can be located (including those locations requiring and not requiring a housing conditions survey).
    • State of Nebraska Map (PDF) or Google Earth Files (KML) (8.53 MB) or (KMZ) (1.69 MB)
    • Detailed Buffalo County Map (PDF)
    • Detailed Douglas County Map (PDF)
    • Detailed Hall County Map (PDF)
    • Detailed Lancaster County Map (PDF)
    • Detailed Sarpy County Map (PDF)
  • Note on Google Earth Files: to view these files you must download and install Google Earth to your computer (free).
The NDED has held numerous briefings/workshops about the CDBG NSP1 and its application cycle. Below are the PowerPoint Presentations and handouts from each briefing/workshop held:
October 17, 2008 NDED CDBG NSP1 Briefing

 

January 2009 NIFA Conference Presentation

 

March 2009 CDBG NSP1 Application Workshop

 

April 2009 CDBG NSP1 Workshop
All CDBG NSP Applicants who meet the basic threshold requirements of the program will be invited to an interview in Lincoln the week of May 25th, June 1st, or June 8th. Applicants preparing for the interview are encouraged to review the following document titled “Preparing for the CDBG Neighborhood Stabilization Program Interview.” (DOC) or (PDF)

 

Applicants are also encouraged to visit the HUD website at (http://www.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/) for further information on the CDBG NSP.

 

Historical Information on the Nebraska CDBG NSP1 Grant Submission

The original Nebraska CDBG NSP1 grant to HUD was submitted on December 1, 2008. After numerous plan amendments the NDED received final approval of their CDBG NSP1 plan on February 13, 2009, and Funding Approval and the CDBG NSP1 Grant Agreement on March 19, 2009. The complete CDBG NSP1 Plan as approved by HUD can be downloaded in (PDF).

  • December 1, 2008 - The NDED submitted a Substantial Amendment to the 2008 Annual Action Plan (CDBG NSP1 grant submission) to HUD. This original plan included an application process for CDBG NSP1 funds for projects in Nebraska and the scoring criteria. (.PDF)
  • December 22, 2008 - HUD provided the following response to NDED regarding its December 1, 2009 NSP grant submission (.PDF)
  • February 2, 2009 - NDED responded to HUD’s review and disapproval of the 2008 Substantial Plan Amendment to the 2008 Housing and Community Development Annual Action Plan dated December 2, 2008 (.PDF)
  • February 6, 2009 - HUD provided the following response to the NDED regarding its February 2, 2009 response to the plan deficiencies and revisions. (.PDF)
  • February 10, 2009 – The final CDBG NSP1 revision to the grant submission was submitted to HUD on February 10, 2009 and approved by HUD on February 13, 2009. The final Nebraska CDBG NSP1 Plan, can be downloaded in (.PDF)
Below is a timeline documenting the process the NDED went through to receive final approval on the Nebraska CDBG NSP1 Plan:

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Page Updated August 4, 2014


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