The North Carolina Division of Community Assistance held a meeting yesterday in Greensboro to help cities, counties, and non-profits with their NSP applications. The NSP is a federal program, administered through HUD, that enjoins these groups to fight the foreclosure crisis in their communities. HUD has allocated $3.92 billion. Approximately $57 million will go to North Carolina, including $12 million for non-profits.
What is emerging is that in North Carolina, the NSP will be designed in such a way that only a narrow set of strategies can qualify.
The criteria are especially daunting for non-profits. There will be no land banking, for example. This is one of the ideas supported by one of North Carolina's largest non-profit housing developers and credit unions, Self-Help.
[polldaddy poll=1062393] Moreover, all funds must be recaptured. What does that mean? Well, if DCA grants a county $200,000 to do infill redevelopment of blighted property, the following scenario would emerge: The county might partner with a non-profit on redevelopment. Say the property was made into a multifamily rental and resold for $225,000. The non-profit would be able to take its costs of management out, but it would have to return what was left of the $225,000 after those costs.
Last, non-profits have to meet more stringent tests for population served. The HUD regs are written to require that at least half of all residents served by any grant are at incomes at or below 50 percent of area median income. That is a tough test, all by itself. It pretty much guarantees that most projects are going to be for rental housing.
Non-profits in North Carolina will have to go one more step. 100 percent of residents in non-profit projects must have incomes at or below 50 percent of AMI.
Last, although anyone is eligible, it looks like only twelve counties are "competitive." All twelve are east of Winston-Salem. Folks from Buncombe County were not happy when they heard about that at yesterday's meeting.
It seems likely that the NSP in North Carolina is going to be have requirements that make it most amenable for supportive housing.