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Presentation, discussion, and possible action regarding approval of an Invitation to Apply for Neighborhood Stabilization Program funding
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RECOMMENDED ACTION
recommendation
WHEREAS, the Department has accrued approximately $4,000,000 in available Neighborhood Stabilization Program (NSP) 1 Program Income as of November 2023;
WHEREAS, the NSP Allocation Plan, as amended, allows TDHCA to redirect uncommitted amounts or additional allocations of NSP funding to eligible activities;
WHEREAS, Real Gardens, a supportive housing project, applied for the 2023-2 HOME-ARP Rental Notice of Funding Availability, but that funding source is incompatible with the proposed ownership structure of the Development; and
WHEREAS, staff recommends the Board approve authorization to release an Invitation to Apply for NSP 1 Program Income in the amount of $4,000,000, encouraging housing projects that were ineligible under the 2023-2 HOME-ARP NOFA;
NOW, therefore, it is hereby
RESOLVED, that the Invitation to Apply is hereby approved; and
FURTHER RESOLVED, that the Executive Director and his designees be and each of them hereby are authorized, empowered, and directed, for and on behalf of the Department, to release the Invitation to Application for NSP 1 Program Income to be released for Application, and to make any technical corrections or perform such other acts as may be necessary to effectuate the foregoing.
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BACKGROUND
The Neighborhood Stabilization Program (NSP) is a HUD-funded program authorized by H.R. 3221, the “Housing and Economic Recovery Act of 2008” (HERA), as a supplemental allocation to the Community Development Block Grant (CDBG) Program through an amendment to the existing State of Texas 2008 CDBG Action Plan. From time to time, the Department accrues enough program income from NSP to be able to release a NOFA or Invitation to Apply for eligible activities as outlined in the NSP Allocation Plan, as amended.
Real St. Supportive Housing submitted an application for Real Gardens under the 2023-2 HOME-ARP NOFA in January 2023. The Applicant is proposing a master tenant structure with the Travis County Housing Authority of the land and the rental building to be constructed with Department funding. The U.S. Department of Housing and Urban Development (HUD) has indicated that the proposed ownership structure would not be eligible due to federal requirements that any HOME-ARP funding must go to the owner of the development rather than a lessee or tenant.
Real St. Supportive Housing is ineligible to apply for a waiver of these provisions to HUD and keep their Application Acceptance Date for HOME-ARP. Because HOME-ARP is oversubscribed, it is unlikely that the Applicant would be able to re-apply for these funds, even in the waiver were to be granted by HUD.
Because there does not appear to be a realistic path for the Development to successfully be awarded HOME-ARP funding, the Department is proposing to release an Invitation to Apply for NSP 1 Program Income in the amount of $4,000,000, as presented in Appendix A. The Invitation to Apply would be made available to Real Gardens, which would be transferred off the 2023-2 HOME-ARP Application Log and referred to the other Departmental funding source, as allowed in the HOME-ARP NOFA. If the Invitation to Apply is approved by the Board, and the referral was made by HOME-ARP staff, Real Gardens would have 14 days to make the changes needed to its application to meet the requirements of the new funding source.
The Invitation to Apply for NSP 1 Program Income has certain key differences from HOME-ARP. One of the main differences is that NSP 1 does not focus on HOME-ARP qualified populations, including persons experiencing homelessness and other vulnerable populations. Because Real Gardens’ participated in a competitive NOFA and scored high enough to be considered for an award, to make the referral to the other funding source in-line with the purpose of HOME-ARP, the Invitation to Apply for NSP 1 will include a requirement that persons experiencing homelessness be a preference on the project-based waitlist.
Another difference from HOME-ARP is that NSP 1 Program Income is proposed to be at least partially repayable, and not fully forgivable. This is necessary to ensure that the Department has funding to cover the administration and long-term monitoring of the project, since NSP is no longer being funded through HUD. It also allows for the Department to fund future Developments with master tenant structures, as that structure is not federally allowed in the Department’s annually funded programs.