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The Annual Action Plan Substantial Amendment - City of Pontiac

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(2) Activity Type: NSP Activity (B) Purchase and rehabilitate homes and residential<br />

properties that have been abandoned or foreclosed upon, in order to sell, rent or redevelop<br />

such homes and properties<br />

CDBG Activity 24 CFR 570.201 (a) Acquisition, (b) Disposition,<br />

(i) Relocation and (n) Direct homeownership assistance (as modified below); 570.202<br />

eligible rehabilitation and preservation activities for homes and other residential<br />

structures (Note that rehabilitation may includes counseling for those seeking to take part<br />

in the activity)<br />

(ii) NSP Activity (B) purchase and rehabilitate three properties that have been abandoned<br />

or foreclosed upon, in order to rent or leased with an option to buy to persons or families<br />

at and below 50% <strong>of</strong> AMI. <strong>The</strong>se homes will be renovated to be primarily leased with<br />

an option to purchase or, at least, that is the goal. It is anticipated that <strong>Pontiac</strong> Federal<br />

Programs will seek the cooperation <strong>of</strong> area counseling agencies and the <strong>Pontiac</strong> PHA to<br />

give lease purchase opportunities to persons graduating from their social support<br />

programs who are ready financially to assume the responsibilities <strong>of</strong> home ownership.<br />

Mortgages for these individuals will probably be in the range <strong>of</strong> $45,000 to $55,000. To<br />

develop these properties for the 50% and below buyers/renters will probably require<br />

deeper development subsidies from the $352,656.90, which is the 25% set aside program<br />

activity budget.<br />

(3) National Objective: (Must be a national objective benefiting low, moderate and<br />

middle income persons, as defined in the NSP Notice—i.e., ≤ 120% <strong>of</strong> area median<br />

income).<br />

Households with income equal to or less than 50% <strong>of</strong> area median income. This<br />

activity will meet the 25% set aside with $352,655 allocated to this activity.<br />

(4) Activity Description:<br />

Include a narrative describing the area <strong>of</strong> greatest need that the activity addresses; the<br />

expected benefit to income-qualified persons; and whether funds used for this activity<br />

will be used to meet the low income housing requirement for those below 50% <strong>of</strong> area<br />

median income.<br />

<strong>City</strong> <strong>of</strong> <strong>Pontiac</strong> Consolidated <strong>Plan</strong> 2005-2009 – Goal #2 Remove Barriers to<br />

Affordable Housing<br />

<strong>The</strong> <strong>City</strong> will purchase vacant, foreclosed upon bank-owned properties at a discount<br />

(minimum 1% as amended by the Bridge Notice dated June 19, 2009) <strong>of</strong> appraised value.<br />

<strong>The</strong> <strong>City</strong> will complete a team inspection and energy audit on each home and make<br />

necessary repairs to bring up to code and improve energy efficiency including appliances<br />

with Energy Star ratings. <strong>The</strong> homes will then be made available for rent/sale or leasepurchase<br />

to income eligible households up to 50% <strong>of</strong> Area Median Income for the<br />

amount <strong>of</strong> NSP assistance invested in the home (required by regulations). A lien will be<br />

placed on the home for the difference between the sales price and the after rehab<br />

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