Title
Resolution to Amend Resolution R-09-425 to Allocate $245,000 in Neighborhood Stabilization Funds to Community Housing Alternatives ($245,000 NSP Funds)
Memorandum
On October 19, 2009, Council approved the attached resolution (R-09-425). Historically, the City receives HUD funds directly from HUD as an entitlement community. However, under the Neighborhood Stabilization Program ("NSP") , the Michigan State Housing Development Authority (MSHDA) received an NSP allocation from HUD, and sub-granted the funds to the City. NSP, like many stimulus programs, was adopted by Congress quickly and without final administrative program guidelines. Both HUD and MSHDA are still adopting program guidelines for its sub-grantees, like the City of Ann Arbor.
At the time that Council adopted the following resolution, Community Development thought that implementation of the NSP program would be similar to its implementation of HUD funds received directly from HUD. When the City of Ann Arbor receives funds directly from HUD, the City can contract with developers, like Community Housing Alternatives, to develop affordable housing. All proceeds from mortgages on properties funded with HUD funds are repaid back to the City to be used on future HUD eligible projects. Community Development's implementation plan was also consistent with the City's application to MSHDA for NSP funding.
MSHDA has recently made a decision that the City of Ann Arbor is a pass-through entity, and as such, all mortgage repayments will be paid back to MSHDA instead of the City. As a consequence, the City may contract directly with Community Housing Alternatives to develop affordable housing, however, the mortgage will be between MSHDA and the homebuyer, not the City and the homebuyer. The City will no longer receive any proceeds from this transaction as all proceeds from the homeowner mortgage will be paid directly to MSHDA. The following resolution (R-09-425) has been amended in track cha...
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