Department of Housing and Urban Development News Briefs - October 2010

Friday, October 1, 2010

On August 25, the U.S. Department of Housing and Urban Development (HUD) announced the availability of $189 million in combined grants for the HOPE VI Revitalization program and the Choice Neighborhoods pilot initiative. HUD has $65 million available in Choice Neighborhoods planning and implementation grants and $129 million in HOPE VI Revitalization awards. The Choice Neighborhoods pilot program allows for redevelopment of both public and other HUD-assisted housing. Copies of the notices of funding availability (NOFAs) are available online at www.hudresourcecenter.com.

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HUD Secretary Shaun Donovan awarded an additional $1 billion in a third funding round under the Neighborhood Stabilization Program (NSP). Awarded to all states and a number of county and community governments, the grants provide targeted emergency assistance to acquire, redevelop or demolish foreclosed properties. A program in partnership with the National Community Stabilization Trust, First Look, will give NSP grantees a 12- to 14-day window to evaluate and bid on properties before others can do so, making it easier for grantees to choose properties strategically. Funding for NSP’s third round was provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The first and second rounds allocated $3.92 billion and $2 billion in funding, respectively. HUD also announced reallocation process changes that affect NSP 1 grantees, including an amendment to the recapture policy. Any grantee that fails to meet the 18-month use deadline will now have the opportunity to submit additional information about its NSP award, which HUD will review to consider the grantee’s continuing capacity to carry out the grant, before selecting a corrective or remedial action. See the August 27 Federal Register notice for more details.

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HUD made draft changes to its Section 8 Renewal Guide in August. Explanations of all changes beyond grammatical revisions are posted on the agency’s web site, which includes a summary of major changes to the guide. Download the full document at www.hud.gov.

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HUD is seeking public comments on how the agency should determine when an assisted project under the Multifamily and Assisted Housing Reform and Affordability Act (MAHRA) is eligible for mortgage restructuring. The agency initiated this rulemaking in accordance with a court decision that found that HUD did not follow proper notice-and-comment procedures before promulgating a final rule in 2006 establishing the point in time at which a project is judged to be eligible for restructuring. HUD also proposed incorporating the statutory list of project types eligible for restructuring into the regulation. Written comments must be received by October 26. More information is available in the August 27 Federal Register notice.

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A recent HUD survey of the New Orleans, La. metropolitan area showed a 13 percent drop in housing units and a 33 percent increase in housing costs since 2004. HUD’s 2009 New Orleans Metropolitan Area Housing Survey is the first comprehensive housing survey in that area since Hurricane Katrina, providing a point of comparison and a progress report for redevelopment efforts following the storm. Based on interviews with residents of more than 3,000 housing units, HUD estimates that Hurricane Katrina forced 80 percent of the area’s households to move; approximately 12 percent still consider themselves in transition. HUD plans to conduct another survey in 2011 to further gauge the housing stock’s restoration progress. Complete survey results are available on HUD’s web site at www.huduser.org. Turn to page 30 of this issue of the Journal of Tax Credits to learn more.

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HUD Inspector General Kenneth M. Donohue is leaving federal service this month. He was nominated and confirmed in 2002 after retiring from the federal law enforcement community. After the HUD Office of the Inspector General (OIG) New York field office was destroyed in the September 11th World Trade Center (WTC) attack, Donohue ordered HUD OIG agents from across the country to assist in the investigation that followed. HUD OIG says that throughout the reconstruction of the WTC site, its auditors have continually audited the expenditure of funds to reduce fraudulent activities. Eighteen months prior to the subprime-related crisis, Donohue testified to the dangers facing the U.S. mortgage industry and housing sector, expressing his concerns regarding Ginnie Mae’s posture as its portfolio expanded. He is leaving the HUD OIG for the private sector.