The Annual Action Plan Substantial Amendment - City of Pontiac

For housing related activities, include:
• duration or term of assistance;
• tenure of beneficiaries--rental or homeownership;
• a description of how the design of the activity will ensure continued affordability
For those homes that are sold, a lien will be placed on the home for the difference
between the sales price and the after rehab appraised value to protect the affordability of
the unit for a period of 15 years (HOME Final Rule standards). At the end of the
affordability period, the lien will be released by the City. If the home is sold prior to the
end of the affordability period, a prorated amount must be repaid to the City. The
deferred loan will have a zero percent interest rate.
Because these homes will be targeted to families with incomes at 50% or below of area
median income, these units will most likely be rental units and/or lease purchase units.
Units that remain as either rental units or lease/purchase units will have liens to protect
their affordability and managed by a local nonprofit housing organization to insure
compliance.
NSP INFORMATION BY ACTIVITY (COMPLETE FOR EACH ACTIVITY)
(1) Activity Name: Acquisition, Rehabilitation and Resale/Rental of Vacant, Foreclosed
Properties – LMMI
(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 ten (10) residential properties that have
been abandoned or foreclosed upon, in order to sale to persons or families from 51%
AMI to 120% AMI. These homes will be renovated to be marketed primarily as sales or
leased with option to purchase to persons or families in these income ranges. The budget
for this specific activity will be $917,902.000 with an averaged Total Development Cost
of $97,000. It is anticipated that persons from 80% to 120% will be the most likely
candidates for mortgages from $60,000 to $80,000. From 51% to 70% of AMI the most
likely candidates for those properties will probably require a longer lease/purchase period
will becoming mortgage ready through effective financial counseling.
(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).
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