**Neighborhood Stabilization Program Instructions for Grantee
Submissions**

***(Updated 11.4.08)***

**Table of Contents**

[PROGRAM REQUIREMENTS 1](#refheading___toc210555867)

[Areas of Greatest Need 1](#__RefHeading___Toc210555868)

[Eligible Uses of NSP Funds 2](#__RefHeading___Toc210555869)

[Low/Moderate/Middle Income (LMMI) Requirements
2](#__RefHeading___Toc210555870)

[Submission Requirements 2](#refheading___toc210555871)

[What to Submit 2](#__RefHeading___Toc210555872)

[Deadlines 3](#__RefHeading___Toc210555873)

[Who Submits 3](#__RefHeading___Toc210555874)

[Management Information System 3](#__RefHeading___Toc210555875)

[Submission of Paper Substantial Amendments, Certifications, and SF-424s
3](#__RefHeading___Toc210555876)

[Public Comment 3](#__RefHeading___Toc210555877)

[Internet Postings 4](#__RefHeading___Toc210555878)

[Language 4](#__RefHeading___Toc210555879)

[Pre-Award Costs 4](#__RefHeading___Toc210555880)

[Waivers 4](#refheading___toc210555881)

[NSP Substantial Amendment Contents Checklist
5](#__RefHeading___Toc210555882)

[General Information 5](#__RefHeading___Toc210555883)

[Needs, Distribution, Use of Funds, and Definitions
5](#__RefHeading___Toc210555884)

[Activity Information Describing the Use of Funds
6](#__RefHeading___Toc210555885)

[]{#refheading___toc210555867 .anchor}**[PROGRAM
REQUIREMENTS]{.smallcaps}**

[]{#__RefHeading___Toc210555868 .anchor}**Areas of Greatest Need**

Jurisdictions that receive NSP funds must give priority emphasis to the
areas of greatest need within their states, including those:

\(1\) with the greatest percentage of foreclosures,

> \(2\) with the highest percentage of homes financed by subprime
> mortgage related
>
> loans, and

\(3\) identified as likely to face a significant rise in the rate of
home foreclosures.

To assist grantees in identifying areas of greatest need, HUD developed
a [foreclosure and abandonment risk
score](http://www.huduser.org/publications/commdevl/nsp.html) to assist
grantees in targeting the areas of greatest need within their
jurisdictions. 

[]{#__RefHeading___Toc210555869 .anchor}**Eligible Uses of NSP Funds**

NSP funds may be used for activities which include, but are not limited
to:

-   Establishing financing mechanisms for purchase and redevelopment of
    foreclosed homes and residential properties;

-   Purchasing and rehabilitating homes and residential properties
    abandoned or foreclosed;

-   Establishing land banks for foreclosed homes;

-   Demolishing blighted structures; or

-   Redeveloping demolished or vacant properties

For more information, HUD prepared a [Guide to NSP Eligible
Uses](http://hudstage.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/nspeligibleuses.doc)[.]{.underline}

[]{#__RefHeading___Toc210555870 .anchor}**Low/Moderate/Middle Income
(LMMI) Requirements**

-   All NSP funds shall be used to benefit individuals and families
    whose incomes do not exceed *120 percent of area median income*,
    measured as 2.4 times the current [Section 8 income
    limit](http://www.huduser.org/datasets/il/il08/index.html) for
    households below 50 percent of median income, adjusted for family
    size.

    -   ***Note:*** An entitlement community receiving money from the
        state must apply the *area median income* levels applicable to
        its regular CDBG program; not the "balance of state" levels.

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-   At least 25 percent of NSP funds shall be used for the purchase of
    abandoned or foreclosed upon homes or residential properties that
    will be used *to house* individuals or families whose incomes do not
    exceed *50 percent of area median income*.

> Grantees may visit the [NSP Data
> website](http://www.huduser.org/publications/commdevl/nsp.html) to
> identify LMMI areas.

[]{#refheading___toc210555871 .anchor}**Submission Requirements**

[]{#__RefHeading___Toc210555872 .anchor}**What to Submit**

-   NSP Substantial Amendment to the 2008 consolidated/action plan

-   [SF-424 (Signed &
    Dated)](http://www.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/afa.pdf)

-   Signed certifications (Signed & Dated).

***Note:*** Grantees may use the [Substantial Amendment
Template](http://hudstage.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/nsptemplate.doc),
which includes a form for the NSP Substantial Amendment and
certifications.

[]{#__RefHeading___Toc210555873 .anchor}**Deadlines**

-   November 15, 2008. By November 15, 2008, grantees must publish and
    post their proposed NSP Substantial Amendments to their websites for
    the required 15-day public comment period.

-   December 1, 2008. Grantees must submit a *substantially complete*
    Substantial Amendment by the December 1, 2008 deadline. Failure to
    submit a substantially complete Substantial Amendment on time means
    that HUD may reallocate the funds set aside under the formula.

***Note:*** Further information on how to submit will be forthcoming.

[]{#__RefHeading___Toc210555874 .anchor}**Who Submits**

-   Each eligible grantee may submit its own NSP Substantial Amendment;
    OR

-   Contiguous grantees (metropolitan cities or urban counties) in the
    same metropolitan area may submit joint requests, resulting in a
    single combined grant and a single NSP Substantial Amendment. A
    jurisdiction need not have a joint agreement with an urban county
    under the regular CDBG entitlement program to request a joint
    program for NSP funding. Grantees must specify which jurisdiction
    will receive the combined grant and administer the funds; OR

-   Any eligible grantee may submit a joint request with its state. The
    state will receive the combined grant and administer the funds.

***Note:*** Any existing entitlement city/urban county joint agreements
and urban county participation agreements governing Fiscal Year 2008
regular CDBG will apply to NSP as well.

[]{#__RefHeading___Toc210555875 .anchor}**Management Information
System**

-   Disaster Recovery Grant Reporting system (DRGR) is the Management
    Information System used for NSP;

-   Grantees may submit Substantial Amendments via
    [DRGR](https://drgr.hud.gov/DRGRWeb/index.jsp); or

-   Grantees submitting paper Substantial Amendments must set up their
    action plan in DRGR prior to the first required performance report.
    Applicants submitting paper NSP Substantial Amendments are
    encouraged to use the [NSP Substantial Amendment
    Template](http://hudstage.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/nsptemplate.doc)
    and Checklist in order to expedite HUD review.

    -   Paper Substantial Amendments should be delivered to grantees'
        local HUD offices. Grantees may locate contact information for
        field offices
        [here](http://www.hud.gov/offices/cpd/about/staff/fodirectors/).

        []{#__RefHeading___Toc210555876 .anchor}

        **Submission of Paper Substantial Amendments, Certifications,
        and SF-424s**

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-   Grantees must submit a signed and dated
    [SF-424](http://www.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/afa.pdf)

-   The Catalog of Federal Domestic Assistance numbers for grants made
    under NSP are as follows:

> -14.218 (CDBG/Entitlement Grants);
>
> -14.225 (CDBG/Special Purpose Grants/Insular Areas); and
>
> -14.228 (CDBG/State\'s program and Non-Entitlement Grants in Hawaii)

[]{#__RefHeading___Toc210555877 .anchor}**Public Comment**

-   The proposed action plan must be published via the usual methods
    used for the grantee's consolidated plan and action plans, and on
    the (lead) grantee's public website for at least 15 calendar days
    for public comment.

-   For joint requests, the citizen participation process must include
    citizens of all jurisdictions participating.

-   The final NSP Substantial Amendments must include a summary of
    public comments.

    []{#__RefHeading___Toc210555878 .anchor}**Internet Postings**

Grantees must maintain a website available to the general public
containing the following information:

-   Proposed NSP Substantial Amendment (for at least 15 days prior to
    final Substantial Amendment),

-   Final NSP Substantial Amendment (*Note:* If a state is incorporating
    an entitlement jurisdiction's consolidated plan and NSP needs,
    include a hyperlink to the entitlement jurisdiction's consolidated
    plan and NSP substantial amendment),

-   Standard Form 424, and

-   DRGR Reports

    []{#__RefHeading___Toc210555879 .anchor}**Language**

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-   All program information, including the NSP Substantial Amendment
    must be available in the appropriate languages for the geographic
    area for persons with limited English proficiency.

-   *This may be a particular issue for states.* Because regular state
    CDBG funds are not used in entitlement areas, state CDBG staffs may
    not be aware of limited English proficient speaking populations in
    those metropolitan jurisdictions.

    []{#__RefHeading___Toc210555880 .anchor}**Pre-Award Costs**

A grantee may incur pre-award costs necessary to develop the NSP
Substantial Amendment and undertake other administrative actions
necessary to receive the NSP grant, beginning September 29, 2008. A
state may also authorize its subrecipients to incur costs prior to the
state's award of funds to subrecipients.

[]{#refheading___toc210555881 .anchor}**Waivers**

Grantees seeking a waiver under the provisions of the NSP notice,
seeking to undertake an activity other than those specified in the NSP
notice, or who have inquiries regarding whether an activity requires a
waiver, should contact their local HUD field office.

Further information shall be forthcoming regarding the process of
submitting waivers.

[]{#__RefHeading___Toc210555882 .anchor}**NSP Substantial Amendment
Contents Checklist**

To ensure their submissions are substantially complete, grantees should
include the following in their [NSP Substantial Amendment]{.underline}.

[]{#__RefHeading___Toc210555883 .anchor}**General Information**

-   *Contact information.* Include administrator contact information.

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-   *Web Address.* Include the URL of administrator's website, where NSP
    documents are available.

    []{#__RefHeading___Toc210555884 .anchor}**Needs, Distribution, Use
    of Funds, and Definitions**

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-   *Needs Data.* Summary needs data identifying the geographic areas of
    greatest need in the grantee's jurisdiction.

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-   *Distribution and Use Narrative.* Narrative describing how the
    distribution and use of NSP funds prioritize the geographic areas of
    greatest need, including those:

    -   with the greatest percentage of home foreclosures;

    -   with the highest percentage of homes financed by a subprime
        mortgage related loan; and

    -   identified as likely to face a significant rise in the rate of
        home foreclosures.

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-   *Definitions.* Narratives shall include definitions of:

    -   "blighted structure" (in the context of state or local law);

    -   "affordable rents;"

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-   *Descriptions.* Narratives shall describe:

    -   how the jurisdiction will ensure continued affordability for
        NSP-assisted housing; and

    -   what housing rehabilitation standards shall apply to
        NSP-assisted activities.

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-   *Acquisition and Relocation.* If a grantee is planning to use NSP
    funds to demolish or convert any low- and moderate-income dwelling
    units, grantees shall include---

    -   the number of low- and moderate-income dwelling units---i.e., ≤
        80% of area median income---reasonably expected to be demolished
        or converted as a direct result of NSP-assisted activities;

    -   the number of NSP affordable housing units made available to
        low- , moderate-, and middle-income households---i.e., ≤ 120% of
        area median income---reasonably expected to be produced by
        activity and income level as provided for in DRGR, by each NSP
        activity providing such housing (including a proposed time
        schedule for commencement and completion);

    -   the number of dwelling units reasonably expected to be made
        available for households whose income does not exceed 50 percent
        of area median income.

        []{#__RefHeading___Toc210555885 .anchor}**Activity Information
        Describing the Use of Funds**

A description of *each* activity shall include:

*1. General Use Information (For All Activities)*

-   The eligible use of funds under NSP.

-   The eligible activity or activities under the CDBG program that
    correlates with the NSP eligible use. To help determine which CDBG
    activities correlate with uses under the NSP, grantees can consult
    the
    [crosswalk](http://www.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/nspcrosswalk.doc)
    from the NSP Notice.

-   The geographic areas of greatest need addressed by the activity or
    activities.

-   Appropriate performance measures (e.g., units of housing to be
    acquired, rehabilitated, or demolished).

-   The amount of funds budgeted for the activity.

-   The name and location of the entity that will carry out the
    activity.

-   The expected start and end dates of the activity.

-   Expected benefit to income-qualified persons or households.

-   Whether the activity will count towards the statutory requirement
    that at least 25% of funds must be used to purchase and redevelop
    abandoned or foreclosed upon homes or residential properties for
    housing individuals and families whose incomes do not exceed 50
    percent of area median income. If so, the estimated amount of funds
    to be used for this purpose.

*2. Specific Activity Requirements (if Applicable)*

Describe the general terms under which assistance will be provided,
including:

-   Discount required for acquisition of foreclosed upon properties for
    activities involving property acquisition.

-   Range of interest rates for financing mechanisms.

-   Duration or term of assistance.

-   Tenure of beneficiaries. (renters vs. homeowners)

-   How the housing production activities ensure affordable housing