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Minnesota Housing releases Neighborhood Stabilization Program fund eligibility Page 1 of 3 ..:~-= ~.: ~, _r IYk _ (;ll~lt~ ONLINE EoirIf7N Minnesota Housing releases Neighborhood Stabilization Program fund eligibility Issue 31 BY ~r~t-cstl Published: December 10, 2008 Local governments will soon be able to apply for the Neif;hl~orhoi~d Stabililatic~n 1'rot;t~a_ (NSP) funds made available to the Mil~t~esota Housing Finance Agency (MHFA). MHFA will receive $38.8 million as part of the federal 1_I ;..„ ~, xa 1.c~>r~omic l~ocov~ry_,-pct of 20(~~ (HERA) to assist local governments acquire and redevelop foreclosed properties. In order to receive the funds, MHFA submitted a substantial amendment to its annual Community Development Block Grants (CDBG) action plan. The amendment includes MHFA's distribution plan, eligible applicants, application requirements, eligible uses and activities, funding cycles, and performance evaluation for NSP funds. Timeline Information and funding applications are available on the MHFA ~veb site. The application deadline is Jan. 28. Awards for the first round of funding will be awarded in February. Recipients of the funds are expected to make sufficient progress in using the awarded funds. If MHFA determines that sufficient progress is not being made, the funds will be recaptured and awarded in future funding rounds. Eligibility and distribution plan MHFA will sub-grant NSP funds to eligible local units of government. Local units of government experienced in administering CDBG funding and operating in zip codes or counties identified as high need are eligible applicants. Local units of government include cities, housing and redevelopment authorities, economic development authorities, community development authorities, public housing authorities, and counties. To determine what communities are eligible for the NSP funds, MHFA had to establish a formula for areas of greatest need to assign initial maximum distribution around the state. In determining greatest need, MHFA looked at the 120 zip codes with the highest foreclosure, real-estate- owned (REO), subprime, and delinquency rates in the state. The 120 highest-need zip codes each have a concentration of loans either in foreclosure or delinquent that is at least 25 percent higher than the statewide concentration. These zip codes account for 57 percent of the state's loans in foreclosure or REO. After further analysis, MHFA identified 37 of the 120 zip codes that will receive direct aid. The 37 zip codes represent 45 percent of the state's loans in foreclosure or REO. The 87 zip codes that will not receive direct aid are located in 23 counties in the state. The determination of initial distribution of NSP funds was made based on four categories of areas of greatest need: http://web.lmc.org/bulletin/story.cfm?id=2160&title_id=1 12/10/2008