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Date
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August 24, 2009
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Agenda
Item No. 30 Roll
Call No. 09- Communication No.
09-600 Submitted by: Larry Hulse, Community Development
Director |
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AGENDA
HEADING:
Approving the Memorandum of Understanding with the
National Community Stabilization Trust (NCST) to assist with property selection
for the Neighborhood Stabilization Program (NSP).
SYNOPSIS:
Recommend Council approval of the Memorandum of
Understanding with the National Community Stabilization Trust (NCST). The NCST works with local governments and
non-profits to facilitate the transfer of foreclosed properties from lenders to
community organizations at a discounted price.
FISCAL
IMPACT: NONE
Amount: N/A
Funding Source: N/A
ADDITIONAL
INFORMATION:
At the June 8th, 2009 meeting, the City
Council approved the contract with the Iowa Department of Economic Development
to allocate $3.9 million of Neighborhood Stabilization Funds (Roll Call No.
09-996). The plan calls for the City to
work with a coalition of housing agencies to purchase and redevelop
approximately 90 foreclosed and abandoned housing units over the next four
years. The coalition of housing agencies
purchasing foreclosed properties currently includes: Greater Des Moines Habitat
for Humanity, Community Housing Development Corporation, Home Opportunities
Made Easy Inc., (HOME Inc.), and the Neighborhood Finance Corporation. The coalition also includes the following for
profit construction companies; Double D Construction, MJM Homes, and JRW &
Associates.
Since mid-June, our coalition partners have been
working with local banks and real estate agents to purchase bank/real estate
owned (REO) properties for the NSP program.
However, many of our partners have had difficulty acquiring properties. Several properties have been sold before coalition
partners were made aware they were on the market, and other properties have sat
vacant for long periods of time after they were sold at sheriff sale. It is a very difficult and time consuming process
to find the right people to assist with the acquisition of these
properties.
Because of this concern, staff began to examine ways
to efficiently purchase properties. One
such program is the National Community Stabilization Trust (NCST). The NCST is a national collaboration of five
non-profit community development organizations including: the Housing
Partnership Network, NeighborWorks America, National Urban League, Local
Initiatives Support Corporation (LISC), and Enterprise Community Partners.
The goal of the NCST is to facilitate the efficient
transfer of REO properties to local housing providers to develop quality
neighborhood housing opportunities.
Specifically, the NCST was formed to assist cities and non-profit
organization with the implementation of the NSP. Because the NCST is funded by the national
non-profit partners and the federal government, they are able to provide this
service free of charge to participating communities.
The NCST will serve as a single point of contact
between financial institutions and community organizations. The NCST has developed relationships with
national lenders such as Wells Fargo, Bank of America, Chase, and JP
Morgan. These lenders have agreed to
allow local housing agencies involved with the NCST to gain access to their
portfolio of REO property before it is listed with the Multiple Listing Service
(MLS).
The NCST has developed a formula to work with
lenders and community organizations to expedite the transfer of property. The NCST will send a list of eligible
properties to the City who in turn will be given one business day to determine
if any of our coalition partners are interested in gaining access any of the
available properties. The coalition
partner will have 5 days to complete the examination and let the NCST know if
we are interested in obtaining a price for the property. Purchase agreements and other real estate
documents are agreed to in advance.
Because of these streamlined efforts, our coalition
partners will get a discounted price which takes into consideration savings the
lenders will have by not maintaining and marketing the property. The goal is to transfer property within 60
days of the sheriff’s sale. This will
significantly limit the amount of time these properties sit vacant after the
foreclosure is completed.
This agreement will allow the City to serve as the
“Community Coordinator” for our local NSP coalition. As the Community Coordinator, the City will
not be directly acquiring property, but will help to facilitate the process for
the other coalition members and will serve as the liaison between the local
coalition and the NCST. At this time it
is not anticipated the City will be acquiring properties from the NCST.
PREVIOUS
COUNCIL ACTION(S):
Date:
June 8, 2009
Roll Call Number: 09-997
Action: Memoranda of
Understanding with designated local housing agencies to implement the
Neighborhood Stabilization Program. (Council Communication No. 09-386) Moved by Vlassis to
adopt. Motion Carried 7-0.
Date:
June 8, 2009
Roll Call Number: 09-996
Action: Neighborhood
Stabilization Program Contract with the Iowa Department of Economic Development
(IDED).
Moved by Vlassis to adopt. Motion Carried 7-0.
Date:
February 23, 2009
Roll Call Number: 09-341
Action: On the City’s
plan to spend CDBG Neighborhood Stabilization Program Funds. (Council Communication No. 09-105) Moved by Coleman to adopt. Motion carried 7-0.
BOARD/COMMISSION
ACTION(S): NONE
ANTICIPATED
ACTIONS AND FUTURE COMMITMENTS:
At this time it is not anticipated the City will be
purchasing property via the NCST.
However, if this changes, any property acquisitions will require Council
approval.
For more information on this and other agenda items,
please call the City Clerk’s Office at 515-283-4209 or visit the Clerk’s Office
on the second floor of City Hall, 400 Robert D. Ray Drive. Council agendas are available to the public
at the City Clerk’s Office on Thursday afternoon preceding Monday’s Council meeting.
Citizens can also request to receive meeting notices and agendas by email by
calling the Clerk’s Office or sending their request via email to
cityclerk@dmgov.org.