hud nsp ta open forum qa 3-10-15 - hud exchange · 3/10/2015 · foreclosed. so i think it's...

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HUD NSP TA Open Forum Q&A, 3/10/15 Kent Buhl: Live from HUD headquarters today, please welcome Hunter Kurtz, Njeri Santana, Paul Patterson, and Larry Reyes and with a possible guest appearance from John Laswick. We'll see. And the following tips will be helpful for participating, and the two most important things to notice are that the presentation is shown on the left side of your screen, and the Q&A panel is on the right side. To get dial-in numbers, click the phone button, as indicated here, and call in using that information and be sure to include your attendee ID number when prompted. We'd love to hear your questions in your voice. It's a little bit friendlier, and we're often able to provide better answers with a verbal exchange. Simply click the raise hand button underneath the participant list to join the queue, and I ask that you remove yourself from the queue by clicking that button again after you've been called on. Another option for questions is to submit them in writing and type your question into the Q&A box at any time during the presentation. Please address your questions to all panelists, which is the default setting, and we'll also monitor Q&A for any technical issues you may have. Whether you raise your hand or submit a written question, please be patient, and we will get to you. This session is being recorded, and an archive will be created on the HUD exchange website. The archive will include the audio visual recording, a PDF version of the presentation slides, and a written transcript. So with that let's get to today's session and just a brief statement here about hot topics; right, Hunter? Hunter Kurtz: Yes. And thank you, Kent, and hello, everyone. Good morning. Good afternoon, and thank you for joining the NSP team here in D.C. for our Q&A webinar. Really the only main hot topic is that we're continuing with the readiness checks for closeout. If you've had one of those or -- and it was saying that you were ready to close and you're ready and you think you're ready and agree with that check, contact your field office and let's start the process. It will save you a lot of time I the future because you'll no longer have to do quarterly performance reports. You'll just do annual performance reports. And just eventually you're going to have to close the grant anyway. So why not just get it out of the way now? If you have not had a readiness check and you think you're ready to close, go check on the NSP -- or the HUD resource exchange for the NSP site. There's a little subcategory there on closeout. It will walk you through some thoughts that you need to have before you decide you're ready to close. And then you can sign up there for a readiness check. So feel free to do that, if you think you're ready. Paul, Larry, Njeri, you guys have anything you want to add to the hot topics? All right. So that is it for today's hot topics. Kent Buhl: Very good. We already have a question in the queue. And [inaudible] asks, "Can we purchase single-family homes that are for short sale and not yet foreclosed?"

HUD NSP TA Open Forum Q&A, 3/10/15

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Hunter Kurtz: Typically, the answer is usually yes. Typically a short sale involves some sort of late payments by the person owning the property. We greatly expanded the definition of foreclosed. So I think it's -- but you have missed 90 days' worth of payments. So as long as you meet what we define as foreclosed -- and you can check for a detailed description on the research exchange, if you look up NSP definition foreclosed. It will give you all the different ways, but typically a short sale would fall into those definitions. So you'd be fine. Kent Buhl: Excellent. Thank you. And Robert asks -- he's got a technical question, but he wants to -- that's being -- sorry. No. Just a technical question. Hunter Kurtz: Just in general, the closeout process we've done, we completed two grantees are closed, and I know we have a number in the hopper that are ready to go. It is -- it's about a four-month process we've seemed to find. And don't think that's going to take four months' worth of your work. What we're talking about is there's a lot of you signing a document and then sending to the field office. They sign the document sending it back to you type of process. So that just adds up into time. Paul Patterson: This is Paul Patterson. The readiness few checks that have been done to date identified initially 63 grantees that had grants ready to close out. There's another 28 that should be ready by now that didn't need any additional TA, and there was some about 48 that may need some additional TA that by now should be about ready to close out. If you do find yourself that you do need some additional technical assistance, you can go into that HUD exchange and request to get assistance. And we could assign some what they call on-call remote -- especially DRGR -- assistance to help you out with where you need to get to be to actually close out and through the process. Kent Buhl: Kelly, I see that your hand is raised, but you've got no phone icon or headset icon next to your name. So I can't unmute you. So if you'd please submit your question in writing. Same with Robert. I would appreciate that. We do have a question here from Gary. "What is the process for submitting and having a land bank disposition plan reviewed and approved prior to closeout?" Hunter Kurtz: Really this is just something you need to work with your field office on. There is no model for the land bank disposition plan. In general what we're seeking is some sort of feasible plan that will lay out how you're going to dispose of your properties. It does not mean that you need to say that 123 Main Street will be disposed of as a community garden, and 125 Main Street will be used for housing -- redeveloped into housing in the future. It means that you're looking at this targeted area where you have 73 land banked properties. You're estimating that half will be used for community gardens. Another half will be redeveloped within the -- something along those lines. But just submit it to your field office. I mean, it's one of the packet pieces that go to the field officer in the closeout process. So just work with them, and they can help you come up with a plan. Kent Buhl: Peggy asks, "Do grant limits on demolition apply during years when only program income is being spent?"



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Hunter Kurtz: That's an interesting question, Peggy. You need to check your waiver, if you received a waiver, for increasing your cap on demo. It is -- depending -- we realize that I think we've made it a little more -- we've made them a little more loose in the sense that we allow -- Larry, correct me if I'm wrong here. We allow for the waiver to include usually program income and grant funds now, where before we had done it a little more tight where it was just we increased it by a dollar amount. So you need to check your waiver, if you have one. If not, then obviously you can request a demo waiver increase, and that percentage would apply to just your grant funds until you get that waiver. Do you agree with that, Larry? Larry Reyes: Yeah. Hunter Kurtz: Okay. You're the expert. Larry Reyes: The cap is 10 percent. Hunter Kurtz: Yeah. Kent Buhl: Okay. Chris asks, "I'm new to this, but can I buy a multi-family property ad use the NSP grant to restore it?" Hunter Kurtz: Yes. As long as the multi-family property meets one of the eligible requirements -- the eligibility requirements to be acquired, which is abandoned, vacant, or foreclosed. As long as it's one of those, then yes. You can acquire it. Larry Reyes: Eligible. Hunter Kurtz: I mean, we encourage a lot of the folks that are doing the 25 percent set-aside are using multi-family properties to meet that. So we definitely encourage the multi-family. Paul Patterson: Yeah. And originally, didn't we think that more single-family houses would be in the program? Hunter Kurtz: That's true. Paul Patterson: But then we found out the reverse of that was really true, that we had more multi-family units that occurred than single-family. Kent Buhl: Paul, could you get a little closer to the speakerphone? That was hard to hear you. Paul Patterson: Okay. Certainly. I'll speak up. This is Paul Patterson. Originally we thought in the NSP program that we'd have more single-family housing units than multi-family units that would be going through the program, but then we found out the actual -- that the reverse of that was true, that we were ending up with more multi-family units than we are single-family units. So yes. Definitely multi-family units are available to be used.


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Kent Buhl: Thank you. Leslie has a question. It goes like this. "If a subrecipient received NSP2 funds for acquisition and development but does not have enough funds to complete the project, can they sell the property to a developer to complete? And how is the money received from the developer for the sale handled?" Hunter Kurtz: Yeah. That's a little sticky question there. The first thing is typically we're not selling properties to developers. Typically we're giving the property developer to allow them to finish or complete. And in that sense, the property will still have to meet a national objective and still have to meet the affordability requirements and all of the other issues that are involved with that. So the developer wants to use his own funding to finish the house, that's completely fine, and then you'll have a home that's financed with 50 percent NSP equity and 50 percent or whatever the mark up or breakdown is, 50 percent of the developer's funds. It should be noted that if you do -- if you are looking at the property as though you can't -- you've acquired a property but you're not going to be able to do anything with it, there are ways to sell the property out of the program. I would refer to some guidance we put on disposing of difficult properties, and we're doing a webinar on that in next week actually. And we're going to talk about how to get properties out of the program. And in those cases, those funds would be you're returning those funds to the program. But in general you might want to consider, rather than having the developer pay you for the property, giving the property to the developer and allowing the developer to finish the project with those funds they would pay you and then have a property that meets the affordability requirements and all that fun stuff. Njeri Santana: Just make sure that the developer is well aware of that any drop of NSP funding that's in the property, they're going to have to follow all the program rules. Hunter Kurtz: Yeah. Njeri Santana: That just might be a sticky point for some developers. Hunter Kurtz: Yeah. That's true. That's true. Kent Buhl: So again to Kelly and Robert, whose -- who have your hands up, I'm unable to unmute you because there's no audio icon next to your name. So if you would go ahead and submit your questions in writing, that would be helpful. Hunter Kurtz: Or couldn't they just call in, Kent, by -- Kent Buhl: They could -- yeah. You could do that, if you click the phone button underneath the participant list and hang up and call back in using the complete set of information. What we're looking for there is for you to include your attendee ID number. That's another great option. Hunter Kurtz: Hey, Kent. It looks like Kelly wrote in.



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Kent Buhl: There she did indeed. "Is there a template of a closeout document available for NSP closings for the home buyer? And if so, should this document be recorded at the Hall of Records?" Hunter Kurtz: Well, I would -- sort of first of all, clarify that. When we're talking about closing the grant as I was originally, what we're talking about is actually completing the grant sort of process, if you will, with the department. It's sort of saying you've completed all the funding -- all the projects with the initial grant allocation that you received. So closings in a real estate transaction, yeah. You would need to have all the correct and required documentation. We have tool kits available on the HUD exchange that have a lot of sample versions of all these that you'd probably want to refer to. So two types of closing. Njeri Santana: Yeah. One to buy [inaudible]. Kent Buhl: And there's Robert call back in. Hi, Robert. How are you? Thank you. Q: Can you hear me? Hunter Kurtz: Yes. We can. How are you doing today? Q: Okay. Great. Okay. This is Bob Degershio [ph] at LA HUD. Question on grantees that have already -- that have passed their deadline. They've spent all their money. However, it's -- they -- for example, they have admin that they haven't spent. So the amount of money that's going to be de-obligated, can they use any of that to put towards the maximum of administration to carry on monitoring in the future? Hunter Kurtz: When you close out the grant, the grantee retains any program income they have but loses any funds that are in their line of credit at the time of closeout. So there is no way to retain any type of funding that's in your line of credit past the closeout date. Treasury goes in and sweeps all that, but if they have program income and they have the ability to spend -- they have the admin -- Q: They still have -- they haven't reached their maximum, but their program is basically over. Hunter Kurtz: Right. But do they have any program income? Q: They probably -- they might have a little bit of program income. Hunter Kurtz: Well, if they have the capacity to spend money for admin, then -- and as long as they've met the 25 percent set-aside for the amount of program income they've received, then they can use really all that program income for admin. Q: Okay. Let's say it's not program income. Let's just say that the end of the program has come. They have money still in their line of credit, but they haven't expended all of their admin?



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Njeri Santana: Hi, Robert. This is Njeri. We're finding a couple of grantees that are having the same problem, but unfortunately, if there is administration money left over and they don't have any program income that's going to come back to them, then the admin money will be swept and they cannot maintain that after closeout. Q: Okay. All right. Okay. That answers the question. Njeri Santana: Okay. Hunter Kurtz: Yeah. Q: All right. Thanks. Hunter Kurtz: What they might want to do is move up their monitoring and finish the monitoring in a quick manner and then close out their grant. Q: Okay. All right. Yeah. They haven't closed it out yet. So all right. Thank you. Njeri Santana: You're welcome. Kent Buhl: Thanks for calling back in, Bob. A question from Gary, who recalls that it was stated that NSP2 consortia will be terminated at closeout. "Is this correct, and if so, can former subrecipients earn a fee on properties they develop?" Hunter Kurtz: The NSP 2 consortium, it depends on how the consortium agreement is signed or set up and the terms that are in that. A lot of them are set up in a way that they will be terminated at the time of closeout. The lead consortia member, though, still has responsibility for all the properties that they -- and reporting on all the properties during the affordability period that are in the consortium as of today or as of the day of closeout and any done during the five-year program income period for NSP. Well, with any program income. We'll just leave it at that. What was the second question you had? Njeri Santana: About subrecipients being able to come I guess and kind of -- Hunter Kurtz: Sub-recipients earn a fee on properties they develop? I'm not sure -- Njeri Santana: That would have to be worked out with whomever. Hunter Kurtz: Well, I think they're asking a fee like thinking they get a developer's fee or something. You still can't earn a developer's fee, but in some cases what consortiums are doing is charging a fee -- the lead consortia member is charging a fee to their current consortium members so that they can continue to monitor and do the admin that will have to happen in the



future, if that's what you're referring to. But you can't start earning developer fees on properties you've already done. Gary, if that's not answering your question -- Njeri Santana: Your follow-up. Hunter Kurtz: Yeah. Follow up or feel free to call in. Kent Buhl: And while we're waiting to see if that does answer Gary's question or not, we've got one from Karen Patterson who says, "Due to program income, we still have grant funds, NSP1 and 3 appropriations directed the funds be available until expended and not subject to the national defense act. What is HUD's deadline?" Hunter Kurtz: I think what Karen is referring to is that NSP2 grantees have a deadline at which any funds left in their line of credit on September 30th of this year will be swept. We granted a waiver to allow the 42 NSP2 grantees with substantial amounts in their line of credits to draw down their line of credits before they draw program income. Only NSP2 grantees, though, face that deadline. NSP1 and NSP3 grantees do not have a deadline to draw down their line of credit funds. So they just need to do it before they close out or they just can close out and leave any remainder in there in their line of credits. But we would encourage you to get as close to zero as possible. Quite frankly, very few grantees will. I was just talking to one that was looking at closing out, and they were talking about 15 cents left on a line of credit. That's not a problem. Kent Buhl: Leslie asks, "Is there guidance on how to handle NSP assisted housing that goes into foreclosure?" Hunter Kurtz: There is not, and that's something -- I would recommend checking the -- depending on how you set up the affordability period, checking the relevant regs to deal with that. But we are actually looking at doing something on enforcing recapture and resale here in the next couple months because I know a lot of grantees out there are having this problem. Kent Buhl: Good variety of question today. We like that. Keep them coming. Hunter Kurtz: Here's a question for our attendees. As we're sort of getting closer and closer to -- or working towards getting everyone closed out, is there something either in the realm of tool kits or webinars or policy alert or videos or what information and in what format would you like us to provide you? What do you need help-wise from us here at headquarters? Kent Buhl: And that would be a great thing to put into the Q&A so we'll have a written record of your suggestions. Hunter Kurtz: Yes. Come on. We got to have some -- we haven't had any good stumpers. I will say that I know that last time we had a stumper that we're still working on, our last Q&A. That was do you -- can you return your program income? And that is -- we do not have an answer to that question yet. That is not -- we're still working on that.



Kent Buhl: Gary has called back in, and let me unmute you, Gary. Go ahead. What's your question? Q: Okay. Can you hear me? Kent Buhl: Yes. Hunter Kurtz: Hello, Gary. How you doing? Q: Okay. In Tucson, and the question regarded the consortia at closeout, and you gave a very nuanced answer. So I don't know if I guess we'll have to follow up or if you can be more specific about. Depends. Hunter Kurtz: Well, do you mean how does the consortium survive closeout? Q: That's right. Hunter Kurtz: That -- and the reason I mean depends is there's nothing that we do at HUD that is going to end the consortium. Njeri Santana: We can't require it. Hunter Kurtz: Yeah. We can't require it. When consortium are formed, when they're applying for the NSP2 program, we encourage them to put some sort of end clause in the consortium agreement. That doesn't mean they did. So what we're saying is you need to go and review the close -- or the consortium agreement and see how closeout is dealt with. If it's entirely possible that the consortium may need to go back and adjust their agreement to deal with closeout because we do know there are a number of consortium that have kind of missed that in the original agreement, and they're now having to go back and fix that. So that's not -- but what I'm saying is that's not something that -- signing the closeout agreement doesn't automatically end the consortium. Q: Okay. So what you're saying is we could -- if we haven't included this kind of language, we could say the consortia terminates at closeout? Hunter Kurtz: You could do that, but you do need to remember that there's still responsibilities the consortium has as well as program income earned that the lead consortia member is still going to need to report on. So there's still a lot of responsibility and things that are going to take place within the consortium post-closeout. Q: Understood. So having terminated the consortia, assuming we do that, so there's still people -- we would still have a contract stating that they need to report stuff to us, so on and so forth. Can they earn fee on the properties that the consortia members are developing? So, for instance, they've purchased properties on our planning to redevelop them or properties that are purchased with program income, that kind of thing.



Hunter Kurtz: Thank you, Gary. You provided me with my stumper. I think the answer is no. I don't think you can earn a fee because you're still -- and see, Njeri is shaking her head, and this is why. Njeri Santana: [inaudible]. Hunter Kurtz: Yeah. And they amended out, but this is -- that's a -- you know what, Gary, one of -- I would just say that there is a couple things that we're looking to do, and one of them is a webinar on consortiums and closing out. And I think that is definitely something we'll need to address in that webinar. If you wouldn't mind sending this in through an ask a question because I think we need to -- I thought you were referring to homes they already developed. Q: No. No. No. Hunter Kurtz: You're talking about in the future, and I think we need to give that some thought and get back to you. Q: Okay. Well, do I get something for stumping the chumps? Hunter Kurtz: Exactly. Stumping the chumps. Q: Okay. Thank you very much. Hunter Kurtz: No. You don't, but we appreciate it. Q: Okay. Thanks. Kent Buhl: Thank you, Gary. Leslie wonders if there's any enforceable standard or timeline for meeting the national objective for projects that have run out of capital. Hunter Kurtz: No. There is no deadline to meet a national objective for anything in the NSP program. But if you have a property that you're never going to be able to finish, you need to figure out a way to either find other financing sources. If it's in a reasonable amount of predevelopment costs, you can make it a failed project and sort of spread those costs around. But if you're looking at sort of down the barrel of a multi-hundred-thousand-dollar or multi-million-dollar expenditures, that's not going to work as a failed project. So that you got to start thinking creatively. I would recommend contacting the field office, trying to get some technical assistance from one of our technical assistance providers to help you think of ways to deal with this project. There are -- obviously people have had issues and they're out there. We're aware of them, and we'll try to help you in any way to deal with them. Paul Patterson: Because the bottom line of Neighborhood Stabilization Program is to stabilize the neighborhood, and if you have property that you've acquired and it's just sitting out there and



there's nothing that's being done with it, it will start to deteriorate and will start to cause yourself some pain. So you don't want to do that. You don't want them just to sit there. Kent Buhl: Melissa says that, according to her query, it looks like the HUD weekly update was last done on January 12th. Is it possible to have this done more frequently? And if not, how frequently is it updated? This has been a great tool in reconciling for her records. Hunter Kurtz: I am not sure what weekly update she's referring to. So I don't know. Larry Reyes: It's a weekly update that we handle in our field office person's feed. Hunter Kurtz: Oh, okay. Larry Reyes: Requests have to be done again and do it periodically. Yes. It's probably time that we have it updated again. See if we can get it out by next week. Kent Buhl: Thank you for that, Melissa. Here's a wish list item from Karen. "Compete the NSP grantee workbooks and activity-specific checklists for states to use that match HUD's review to ensure our files are complete to the standards HUD wants us to have on hand and not just docs in the state's grantee's files." Hunter Kurtz: We are -- again, I was just mentioning that we were going to do a consortium closeout webinar. We're going to do some webinar and probably some other material for larger grantees, and we would -- obviously larger grantees would automatically be all the states. So I think we're going to get some more information out about that, but thank you for the wish list item. We will -- I'll make sure we address that. Kent Buhl: Vanessa wants to know, "How do they deal with long-term maintenance costs when we're locked into a 30-plus year," -- I assume -- "30-plus year land use agreement that precludes us from getting any county, state, or federal funding to maintain these properties?" Hunter Kurtz: I -- yeah. I'm not sure what type of property we're referring to. I don't know if that's -- Njeri Santana: A rental? A single-family? Hunter Kurtz: Yeah. If she wants to call in, we can sort of try to get some more details from her, or she can submit this to our ask a question with some more details. And you can find that on the HUD exchange. Just to ask question, put in the NSP, but the information we have there is not unfortunately enough for us to answer that question. Kent Buhl: So, Vanessa, if you do want to call in, this slide shows you how to do that. She's saying NSP properties, but I'm not sure that's enough detail either. Hunter Kurtz: No. I --



Kent Buhl: While you're thinking of other questions or calling in, just a note that there are a couple more NSP webinars on the schedule at the moment. Next Thursday, disposing of difficult properties that Hunter mentioned a little bit earlier. And on the 31st, a DRGR and NSP closeout webinar. Njeri Santana: Somebody. Hunter Kurtz: Yeah. Come on. We got to have more questions than that. Njeri Santana: This is like an awkward date. Hunter Kurtz: Awkward date? Njeri Santana: You know how you get to know each other. Seriously, please some questions here. Kent Buhl: I've been wondering if Alexander Graham Bell could ever have imagined cell phones or tablets or anything like that, other devices for setting up meetings. Hunter Kurtz: Or even just the fact that there are -- what -- almost 100 of us from all over the country all talking to each other at once. Njeri Santana: At one time. Yeah. Hunter Kurtz: Yeah. Kent Buhl: And seeing the same thing. Hunter Kurtz: Yeah. Njeri Santana: Yeah. Kent Buhl: Aw, here we go. It's been a while since I've heard Analbert's voice. Hello. How are you today? Q: I'm doing well. Thanks for taking my call, and I have an easy question. So not a big challenge, but we're amending our action plan fairly soon to add UD for demolition of five properties. And I'm assuming we have to do the public knowledge for 15 days; is that correct? Hunter Kurtz: As long as it's an NSP2 grant or -- Q: NSP3. One. I'm sorry. This is for one. Hunter Kurtz: Again, I think whatever the --



Q: Yeah. Okay. Hunter Kurtz: Yeah. Any time you amend your action plan, you need to do the public comment period. Q: Got it. But my question is would the notice be sufficient on the website versus the newspaper? Hunter Kurtz: I would talk to your field office about that, but it would be whatever -- however you do the other notices. Q: Okay. All right. So I'll do that, and then I will follow the normal steps. I just want to refresh my memory. I haven't done it for a while. After I do the public knowledge, we go to city council. Then we ask the HUD officer -- field officer to approve the action plan, and we have just the budget at that point; right? Hunter Kurtz: Yeah. Q: Okay. And go ahead. Hunter Kurtz: Standard procedure. Q: Okay. Standard procedure. All right. Well, thank you so much, and thanks for taking my call. Continue with the good seminars. Hunter Kurtz: Thank you, sir. Njeri Santana: Thank you. Q: All right. Bye-bye. Kent Buhl: Bye-bye. Hunter Kurtz: Bye. Kent Buhl: And here we have Vanessa who can give us a little more detail on her long-term -- Q: Yes. Kent Buhl: -- maintenance problems. Hi. Where are you calling from? Q: Hi. From Rockbridge, Florida. Kent Buhl: Great. Go ahead.



Q: And I'm calling from Housing for Homeless, and we have a number of NSP properties that we have acquired and had received funding on for rehabs. And along with those come a 30-year land use agreement. Hunter Kurtz: Okay. Q: And in that one of the stipulations is that we have to maintain the property to county standards and all maintenance and the biggest part being air conditioning, plumbing, the big maintenance items. And we've run into this year that we get no funding then to help us maintain the properties. We get the property and the use of it, but we get no funding to help us offset the cost of these maintenance items. We found this out when we applied to a local municipality to help us redo an air conditioning system with some other things, and they said that we were supposed to take care of that with no additional funding. Hunter Kurtz: Well, here's the issue. We -- the NSP program does not allow for its funding to be used for maintenance on the properties. But we don't have any restrictions in the program that allow -- that doesn't allow other types of federal or state or local funding. That might be something that your local -- it sounds like you're a subrecipient to an NSP2 or NSP grantee; is that correct? Q: Would that be our status, Ron? Q: Yes. Q: Yes. Hunter Kurtz: Yeah. That seems to be something that you need to work out with them. So I would direct you to contact them directly because there is not -- there's not a whole lot we could do from here. If they want -- because we can't give the sub TA. So yeah. I would sort of talk with your local -- Njeri Santana: Field office. Hunter Kurtz: Well, or the grantee themselves and work with them because we can't -- there's not a whole lot we can do, unfortunately. Q: Okay. But you're saying that there is nothing that says that they cannot? Nothing that says that the local, the county, the cities are restricted? Hunter Kurtz: Well, they're restricted from using NSP funding for maintenance. Yes. That is true. But it's also entirely possible that the local grantee has placed other restrictions on the property, which is completely allowable under the program. The rules and regulations that we set out are the minimum, and in many cases grantees place more restrictive restrictions on the program.



Q: All right. Let me ask you this. So they are restricted from using further NSP funding. What other funding sources then, so that we can go in when we approach them and talk to them, be a little proactive on our side. What funding can we ask for? Yeah. We are a CHODO-qualified organization in this area. Can we use CHODO funding for this? Hunter Kurtz: We're all experts in the NSP program, and I think we would be remiss for us to start telling you what funding or funding you can or cannot use from other programs. So I'm a little hesitant to answer that question. Q: All right. One other question. Are the land use agreements, is there a possibility of having them reduced from 30 years to a lesser amount of time? Hunter Kurtz: It depends on the -- how the funding was used. In many cases the 30-year affordability period is the minimum requirement. So it depends on the situation [inaudible]. Q: Well, can I give you one example? Hunter Kurtz: Sure. Q: During Hurricane Faith, our area was hit. Some of our properties, we got funding to put on a new roof, and at the same time, I think unbeknownst to the executive director here at that time, unwittingly signed then for funding that furthered the land use restriction by 30 years for the price of a roof. Do you see what I'm saying? Hunter Kurtz: Yeah. Q: Each time -- okay. Hunter Kurtz: No. No. I understand, but again, it depends on, A, what the grantee wants to do and they're allowed to increase the affordability period beyond what we set as the minimum. And it also depends on -- even at the minimum, it depends on the amount of funding that went into that property and whether it was new construction or rehab. And there are a whole host of requirements dealing with affordability that we've spent entire webinars talking about. So without knowing the details of this property, I can't answer that specifically. Q: Okay. Well, I do appreciate that you answered some of our questions, and we'll research it more. Hunter Kurtz: I'm sorry, but I couldn't answer a whole lot there, and I apologize. But I think really you just need to talk with your grantee and work with them to come up with a solution. We can't -- like I said, what we do, our rules and regulations are a minimum, and the grantees in many cases place additional restrictions based on possibly other sources of funding that are involved, based on state and local rules and laws. So there are a whole host of things. Q: Okay.



Njeri Santana: You can always ask your grantee for technical assistance. We are restricted from providing technical assistance directly to you, but through your grantee that TA can be requested and be delivered to you. Hunter Kurtz: Yeah. Q: All right. All right. Good. Okay. Well, thank you so much. Hunter Kurtz: No problem. Kent Buhl: Okay. Thanks for calling in, Vanessa. Thanks for calling in, Vanessa, and let's go to Kim's question. "Will the fiscal year 2015 income limits applicable to NSP be published on the website soon?" Hunter Kurtz: That's funny. Paul and I were just dealing with this question a few minutes ago, and they're up as of -- Paul Patterson: March 6. Hunter Kurtz: -- March 6. Yeah. So they're there. Kent Buhl: Great. I imagine Kim scrambling off to the website at this very moment. Hunter Kurtz: Let me see. Kent, if I email or put the little question answer box the link to the income limits, can you post that for us? Kent Buhl: Yes. I can. Actually, you would need chat to -- if you use chat, you can send that to all attendees. Hunter Kurtz: Chat. Well, maybe I'm not. Kent Buhl: You can also do it in Q&A too, if you just click on Kim's question and then you can post that into the answer box. Hunter Kurtz: Okay. I think I just sent it. Yes. And can everyone see that, or is that just us? Kent Buhl: Yeah. That's viewable now. Hunter Kurtz: Okay. Great. Here's the link to the income limits. Again, they just went up a few days ago. Kent Buhl: Thank you for that. How's that for customer service, Kim? All right. What other questions do you have? Clearly lots of activity going on there around the country. Hunter Kurtz: No more questions? Come on, folks. Well, like I said, there's going to be a dealing with difficult properties webinar that's coming up next week. We have the DRGR and



closeout on March 31st, and then we're going to do some grantee type closeout webinars, one on consortium and then one on large grantees/states. We're also going to do a webinar on more specific to dealing with land banks, and I'm trying to think. I know we have a couple other that we're working on toying around with. If you have any thoughts, you can also send in in the Q&A types of webinars you'd like. Njeri Santana: Well, another thing is that we're in the process of putting together some DRGR workshops. They'll be two-day trainings that will be across the country. We're aiming to do a total of eight. So look out for those. Especially for those individuals or grantees who are new to the program, this will be especially helpful. Hunter Kurtz: Well, I mean, I guess this summer. Yeah. Njeri Santana: Yeah. The summer. Yeah. During the summer. Hunter Kurtz: Oh, looks like we have another question. Kent Buhl: Very good. Indeed we do from Robert. "I'm new to NSP rental but about to do one soon as the amendment is okayed. I will structure it as a loan. Should I record a mortgage and affordable housing restriction as I would under a home?" Hunter Kurtz: Yes. Yeah. You need to have something to enforce the affordability period. Just like the home regs require -- and those are sort of our safe harbor, and just similar to what you would do in a situation with a single-family home. Kent Buhl: Good question, Robert. Thank you. Hunter Kurtz: There have to be some more questions out there, folks. Kent Buhl: Probably. And if you came late or want to review any of the questions that have happened so far or there's someone else you want to experience this webinar who couldn't be here, you can check out the archive. We'll have an AV recording of the entire webinar and a written transcript. Hunter Kurtz: Well, if we are not getting any more questions, I think -- Kent Buhl: We got one. Hunter Kurtz: Oh, we did? Yay. Kent Buhl: So Robert again. "On the same project, the rental project, five of the seven units will be NSP assisted. Must I make sure that NSP only pays for those units? Would I need to prorate common area improvements?" Hunter Kurtz: Basically, all we care about at the end of the day is that you can demonstrate -- what did you say? Five of the seven units?



Njeri Santana: Right. Hunter Kurtz: As long as all seven units are similar in features and size and all that stuff, all we care is that the -- I don't know what five-sevenths of the costs are NSP and the other costs are not. So if that means that you just purchased the land only and everything else you can pay for out of other funds, that's fine. We don't care how you do it, just at the end of the day the total development costs, five-sevenths of it is NSP and the other two-sevenths is other sources of funding. Kent Buhl: And next time you might want to do eight units for easier math. Hunter Kurtz: Yes. Yes. Very true. Kent Buhl: Leslie asks, "How far out from settlement can or should a homebuyer be qualified?" Hunter Kurtz: Oh, I assume that we're talking about the home buyer counseling. I think it might be -- I think it's more than that. I think maybe a year. I'm not -- we're looking that up. Do we have any other questions we can go to as we -- Kent Buhl: We do, indeed. While you're looking that up, Stella asks, "Can a developer who holds a general contractor's license charge a developer fee and contractor's overhead and profit?" Hunter Kurtz: I don't think so. We have some great guidance on develop -- oh, man, I got to -- I can't think of this. The answer is no. I think you're right, Njeri. Njeri Santana: It's double dipping. Hunter Kurtz: Right. Because you'll earn the developer fee. So that should cover the overhead -- well, yeah -- the other costs as a contractor. We're also -- we're still looking up the other. Any other questions, folks? Kent Buhl: Leslie thought it would be an easy question, I bet, and this could be a stumper. If any participants out there have your finger on the pulse of how far out from settlement a homebuyer should be qualified, you can chime in. Hunter Kurtz: Yeah. I don't know, Leslie. I think if you could just submit that to the Ask a Question, we'll get back to you. We're not finding the answer and we don't have any other. So I would hate having everyone just sort of wait for us to respond. Paul Patterson: In reality, once you have that person that's qualified and you -- it's been a long time; you might just want to ask them to update any information, if you go into settlement. Hunter Kurtz: Yeah.



Paul Patterson: And if they update information same as prior, that should take care of it. Hunter Kurtz: And I think if you've been working with somebody for a while and just having trouble finding a home for them that fits, that's different than somebody who for some other reason got a home buying counseling course six months ago. But we'll -- if you could submit that question to the ask a question, Leslie, we'll get you an answer. Kent Buhl: Melissa has a program income question. Hunter Kurtz: All right. Kent Buhl: "If an entity has $500,000 of NSP2 program income on hand as of the end of January, is that program income included in the amount that can be set aside in order to spend down the line of credit, or is it only the program income earned after that date?" Hunter Kurtz: It is any program income on hand as of today or it doesn't matter when you earned that program income. What we will not let you do is, if you expended $500,000 of program income before we sent out this waiver, you can't go back and charge that to line of credit funds. But any -- you can move the program income aside at any point you want. It's just that it's only going forward that you can draw down the line of credit funds. Kent Buhl: Peggy says it's her understanding that the homebuyer needs to be qualified within six months of the purchase, and if the purchase takes place after six months, the household then needs to be re-qualified. Hunter Kurtz: Yeah. That -- yeah. We'll verify that, but I think -- we all knew there was some deadline. We just -- we haven't had a lot of home buying counseling questions in a little bit. Well, we've been stumped twice. Kent Buhl: That makes it a great webinar; right? Hunter Kurtz: Yeah. Exactly. Kent Buhl: Let's go to Chris who is on the phone. Hi, Chris. Where you calling from? Q: I'm from Jackson, Tennessee. Can you hear me? Hunter Kurtz: Yes. We can. How are you doing, sir? Q: I'm doing great. Got a question. This is the first time that we've had an NSP home that we've sold. One of our homeowners is getting transferred with his job out of town, and he's only been in the house about two and a half years or so. And so this is kind of the first situation that's come up with one of the NSP houses that we've sold that we're having to sell kind of before the affordability period ends. And then we also have here in Jackson with our NSP program a 15-year restrictive period on top of the affordability period that the house has to be sold to somebody that qualifies through the NSP program.



So my question is this. My homeowner's asking, well, what if -- if he's not -- doesn't have to move for another six months, which is good and hopefully we'll find a qualified buyer by then. But if we don't, what are some other options for the homeowner to deal with the house? And could he possibly -- one of the questions it was was that he do a lease purchase for an NSP qualified person? Just seeing what his options are. Hunter Kurtz: Yeah. I don't see right off the top of my head why you couldn't do some sort of lease purchase. The issue is you just need to retain someone because it sounds like you've done a resale provision; correct? Q: Right. Hunter Kurtz: I think the issue is that you just need to ensure that somebody is in the -- Njeri Santana: The income guidelines. Hunter Kurtz: Yeah. In the income guidelines. I'm just looking real quickly here at the resale regs and -- Njeri Santana: Have you guys done lease purchase? Do you guys do lease purchase in general? Q: We have. Some of our new construction homes don't sell within six or nine months, we've offered a lease purchase opportunity and we have two folks in one rehab home and one new construction home for that. And this kind of brings up the same question as one of the couples that we have in the newer lease purchase home, interest rates are so low and they found that their credit has gotten good enough where they'd like to go ahead and exercise their option to purchase. Their main concern is that, well, gosh, for 15 years we have to sell it to somebody that qualifies through the NSP guidelines, the 120 percent or less. What happens if we can't? What if we get transferred or have to move out of town or outgrow the house within that period? Their reservations are, we'd like to go ahead and buy, but if our hands are tied that we must just have the only option to sell it, that scares them. Hunter Kurtz: Yeah. That is kind of a problem with resale. It may be possible to consider possibly looking at restructuring the way you all are doing it to allow for recapture, which is sometimes a little more friendly in that situation. But yeah. Resale gets a little tricky there when you're trying to find a new homeowner. But at the same time, it does allow for that home to be affordable during the period of affordability. Q: Right. Hunter Kurtz: Yeah. I don't see anything that would prevent you from doing some sort of rental or lease purchase with the new homeowner. I would make sure that I talk to your field office about that just to make sure that they don't have any issues with that. Q: Okay.



Hunter Kurtz: It might require some sort of change to your action plan or something like that, depending on how you define how you're going to do the recapture. Q: Right. Okay. Hunter Kurtz: We're getting some good questions today. Thank you, sir. Q: Yes. Thank you. Kent Buhl: Leslie has a property that is NSP eligible, and she's wondering if a legal partnership that consists of an agency can buy the property from that agency using NSP funds. Hunter Kurtz: Of an agency? Typically you can't -- I guess, if I'm reading this question correctly, she's saying that is it the same agency buying it from itself? Is that what she's trying to imply? Kent Buhl: Can you clarify that, Leslie? Hunter Kurtz: If not, you can just submit that question to the ask a question website. Kent Buhl: Leslie says, "Yes. That's the question. Is an organization that's part of a partnership considered the same entity, and can it buy the property from that agency using NSP funds?" Hunter Kurtz: Yeah. I think we're going to need some more details about that. On the face of it, it sounds like the answer's no, but it may be yes. But that's -- if you could write that in because that's -- there's a lot -- I think we're going to need as much detail about that as possible. I don't think we're going to be able to answer that over the phone. Kent Buhl: Thank you, Leslie. They look forward to receiving that in ask a question. Christine is citing -- so going back to the question of qualifying homeowners, she says, "Home Program Rule identifies the six-month income requalification guidelines at 24 CFR 92.203." That sounds pretty specific. Hunter Kurtz: Yeah. I don't know if we have the same restrictions, but I think that would probably be a pretty good measure for everyone to use. I don't know if there is -- we don't pick up that reg in the NSP program, but I would -- I think your use of six month is probably a good safe harbor. Well, should we do one more round, one more request? Kent Buhl: Yeah. Hunter Kurtz: Any final questions? Kent Buhl: What do we have here? Yeah. Leslie asks, "When is NSP4?"



Hunter Kurtz: Well, as we like to say, NSP4 is the over $1 billion of program income we've developed from the first three rounds of NSP. So there's still a lot of program income out there, folks, and there's still a lot of NSP that's going to be taking place. Kent Buhl: We certainly don't want to go back to the economic situation of 2008. Hunter Kurtz: Yeah. Kent Buhl: Well, perhaps we have run the gamut. There's another minute or so to submit a question, but I will remind folks that this will be posted in an archive on the HUD website. Doesn't take very long for that to get there. So feel free to visit that or refer others to it. These two specifically scheduled NSP webinars are coming up on the 19th and the 31st with others in the hopper awaiting dates. So stay tuned for all of that, and we hope to see you a week from Thursday for the disposing of difficult properties. Once you do leave this webinar, you will be automatically redirected to a brief Survey Monkey form, and we'd appreciate any feedback you've got on this webinar. It's not a place to ask program-specific questions, but we would like webinar-specific impressions and if you have other ideas for future topics, that would -- you can put that in there too, and thanks in advance for taking a moment to fill that out. Thanks to Hunter, Njeri, Paul, and Larry for your panelist duties today. We thank you very much and John in absentia. And we hope to see you all soon on another HUD NSP webinar. Thanks everyone. Hunter Kurtz: Whoa. Looks like we might have another question. Kent Buhl: Did we get another one. Oh, indeed we did. Hunter Kurtz: Yes. We did. Kent Buhl: Good eyes, Joselyn [ph]. Sorry. I didn't mean to leave you out. "Can an income eligible homebuyer purchase an NSP property in cash?" Hunter Kurtz: Technically, there's no reason they can't, but what you need to ensure is that there's some sort of mechanism to ensure the affordability period after they purchase the home, so whether that be a soft second or some other mechanism basically to ensure the affordability period. So yeah. Yeah. If somebody's moving from an area in the country where the property values are higher, it's entirely possible that this may happen. But you just need to make sure that you enforce that affordability period. Say that a couple more times in a couple different ways we want I think. Larry Reyes: Yeah. We have had that case a few times where retired people are living on very little income, but they do have some assets that they developed over the years or were given some assets that they were able to use. One thing we do need to be careful of is once they



purchase the property, that they don't pour a whole lot of more money into the property, especially if there's some resale recapture provision, especially resale provisions, or they might find a situation where the property's been developed a lot more than what they can ever get back out of the property. Hunter Kurtz: All right, Kent. Well, thank you very much, everyone. Kent Buhl: Thank you, guys, and thanks to all the participants. And we look forward to seeing you soon. Hunter Kurtz: Yeah. Kent Buhl: Take care, everyone.


hud nsp ta open forum qa 3-10-15 - hud exchange · 3/10/2015 · foreclosed. so i think it's...

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