The Annual Action Plan Substantial Amendment - City of Pontiac

(2) Activity Type: NSP Activity (B) Purchase and rehabilitate homes and residential
properties that have been abandoned or foreclosed upon, in order to sell, rent or redevelop
such homes and properties
CDBG Activity 24 CFR 570.201 (a) Acquisition, (b) Disposition,
(i) Relocation and (n) Direct homeownership assistance (as modified below); 570.202
eligible rehabilitation and preservation activities for homes and other residential
structures (Note that rehabilitation may includes counseling for those seeking to take part
in the activity)
(ii) NSP Activity (B) purchase and rehabilitate three properties that have been abandoned
or foreclosed upon, in order to rent or leased with an option to buy to persons or families
at and below 50% of AMI. These homes will be renovated to be primarily leased with
an option to purchase or, at least, that is the goal. It is anticipated that Pontiac Federal
Programs will seek the cooperation of area counseling agencies and the Pontiac PHA to
give lease purchase opportunities to persons graduating from their social support
programs who are ready financially to assume the responsibilities of home ownership.
Mortgages for these individuals will probably be in the range of $45,000 to $55,000. To
develop these properties for the 50% and below buyers/renters will probably require
deeper development subsidies from the $352,656.90, which is the 25% set aside program
activity budget.
(3) National Objective: (Must be a national objective benefiting low, moderate and
middle income persons, as defined in the NSP Notice—i.e., ≤ 120% of area median
income).
Households with income equal to or less than 50% of area median income. This
activity will meet the 25% set aside with $352,655 allocated to this activity.
(4) Activity Description:
Include a narrative describing the area of greatest need that the activity addresses; the
expected benefit to income-qualified persons; and whether funds used for this activity
will be used to meet the low income housing requirement for those below 50% of area
median income.
City of Pontiac Consolidated Plan 2005-2009 – Goal #2 Remove Barriers to
Affordable Housing
The City will purchase vacant, foreclosed upon bank-owned properties at a discount
(minimum 1% as amended by the Bridge Notice dated June 19, 2009) of appraised value.
The City will complete a team inspection and energy audit on each home and make
necessary repairs to bring up to code and improve energy efficiency including appliances
with Energy Star ratings. The homes will then be made available for rent/sale or leasepurchase
to income eligible households up to 50% of Area Median Income for the
amount of NSP assistance invested in the home (required by regulations). A lien will be
placed on the home for the difference between the sales price and the after rehab
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