- If we sell a property a few years from now, can we sell it for a higher price than we purchased it?
Properties must be sold at 75% of the appraised value of the home. Depending on the amount of NSP investment per unit, affordability must be retained over the course of 5, 10, 15, or 20 years. Please refer to the State's Substantial Amendment for
- Who can we contact for assistance with reaching our minority participation goal?
Please contact the Illinois Black Chamber of Commerce contact person, Arness Dancy.
- Does the 4 years to implement include the 18 months to obligate funds?
The 4 year time limit includes the 18 month obligation period which began with State executing a grant agreement with HUD.
- Is there a section 3 requirement?
- At what point in the process does the environmental review take place?
Generally after notification of grant award but will be specific the type of project and grantee.
Who will oversee HUDs HQS?
The Illinois Housing Development Authority
- Was program income repealed by ARRA? Do CDBG rules apply?
Yes, CDBG rules apply.
- Are BEP vendors limited to those certified by the State?
Yes, minority vendors are identified by their certification with the State of Illinois Central Management Services (CMS).
- Explain the difference between BEP and MWDBE firms?
MWE stands for Minority, Women, and Disadvantaged Business Enterprises which is a form of identification for firms owned by priority populations. BEP - Business Enterprise Program is the certification that one of these firms receives from the State of
Does HUD require that 20% of all units be accessible on projects?
HUD requires that 20% of the State's overall funds go to support housing options for extremely low-income households (including households for persons with disabilities).
- Is "obligation" a purchase contract and a construction contract or a purchase agreement or a construction contract?
Both contracts are considered an obligation for funds
- How long is the compliance period? Does this vary according to the funds used per project?
- The affordability period is determined by the amount of NSP dollars provided per-unit and is stated within the "Application Guidance" section of the State's RFP.
- Did the new stimulus plan remove the 4 year term for this program?
- If a local government is the subrecipient and acquires a property for redevelopment, does signing a contract with a local non-profit constitute obligating the funds?
- An agreement with the local non-profit would likely not be sufficient to obligate the funds. Funds must be obligated to the property level by contracts requiring payment such as purchase contracts or construction contracts.
- How are we to handle program income? How is program income defined? How does money recaptured after selling an NSP property to an end user get handled?
- Most funds resulting or generated from the use of NSP funds are defined by HUD as program income. Recently under American Reinvestment and Recovery Act, the part of HERA authorizing the NSP which defined program income was repealed, thereby allowing
State and local grantees to use HUD's CDBG rules to define its allowable re-use. As such, the State has two options: requiring the return of all program income to the State, or allowing local subgrantees to retain program income if they are going to use
it to carry out the same activities from which it has been derived. The State will determine with the selected grantees whether or not program income will be allowed to be retained by the grantee or returned to the State. Also, additional guidance on
program income is forthcoming from HUD.
- "What happens if we recapture funds from NSP activities? Do we get to recycle those funds or a revolving loan fund or must those funds be returned to the State?"
- See answer above.
- Does the federal Environmental Review process apply?
- Yes. All properties assisted with NSP funds will be subject to the federal environmental review process.
- Who will be responsible for completing the environmental review process?
- Each grantee will have specific responsibilities regarding the environmental review process, depending on the grantee and type of project. For CDBG Entitlement grantees and other units of local government familiar with this HUD process, they will
likely be allowed to carry out their regular local environmental review responsibilities, but the State will serve as the point of receipt for Notices of Findings of No Significant Impact (FONSI) and Requests for Release of Funds (RROF) and other
approvals. In the case of other grantees, the State will carry out this function with information and some actions required by the grantee.
- Is a Phase I Environmental report required at the time of application?
- The Phase one is not required as part of the application but will be required of any project that by federal definition requires an examination of the past uses of the property. The Phase I is important in that it identifies all potential major
environmental issues on/in a subject property which may have to be mitigated, thereby having a frequent impact on project costs. If necessary, the Phase I will be ordered as part of the State's environmental review of the project.
- Does lead-based paint remediation only have to be dealt with if we are requesting rehab funds?
- No. Both federal law and State law in Illinois require identification of any lead-based paint hazards, as identified by a licensed lead based paint assessor. For rehab work, a licensed lead based paint contractor must be used. Illinois law also has a
lead-based paint disclosure statement which has to be executed as part of all real estate transactions.
- Who will oversee HUDs HQS?
- HQS refers to "Housing Quality Standards" and is a habitability standard usually used by local housing authorities to judge the acceptability of housing units for assisted renters. One of the areas that any applicant performing rehabilitation will
have to document is the capacity to carry out that activity, which in this case means having a staff person or partner agency as part of your team whom is qualified to do rehab work write-ups/cost estimates and physical inspections to ensure compliance
with HQS. The State will monitor these records through both desk and field monitoring, but this is clearly a function expected to be carried out by the grantee with oversight from the State. Please note that larger projects will have additional
requirements and inspections by the State and all projects involving rehabilitation will likely also have local permitting requirements.
- What is the maximum per-unit cost? Especially in cases where the acquisition cost is zero.
- Please see the Application Guidance section of the RFP for a discussion of maximum per unit costs. This cost limit does apply to units with little or no acquisition costs, although the state may waive the percentage limit on rehabilitation if
circumstances warrant. Applicants are reminded that all costs must be reasonable for the work proposed.
- Can you explain the rehabilitation cost limits?
- Any rehabilitation carried out using NSP funds cannot exceed 75% of the home's "as-is" value prior to rehab. This is a change from the application guidance which stated that the rehabilitation limit would be defined as 75% of the acquisition cost of
the property. Please also note that all costs must fall within the per-unit cost limit established by the State.
- How will the waiver for rehabilitation costs work?
- The grantee would be required to provide information to the State regarding the particular property and need for the waiver, the State would consider and determine if a waiver was appropriate.
- For new construction housing - How do we address monitoring the land use agreement? Will the grantee be expected to perform annual monitoring?
- Grantees approved for funding within the State's NSP may be required to perform, assist, or provide information needed in the monitoring of projects during the affordability period. These responsibilities will be agreed to within the State's
agreement with all grantees.
- Will the State provide homebuyer agreements and mortgages to awardees or will the grantee have to create their own legal documents?
- The State anticipates providing model documents as applicable to the selected projects.
- When do you have to get an appraisal to show the required discount?
- An appraisal must be done within 60 days of the final offer to purchase the property.
- Can we get an option to by foreclosed property pending NSP approval?
- The State does not recommend taking any action to acquire properties prior to the approval of your application and execution of an agreement with the State. Acquiring properties prior to this point could have implications for federal environmental
and acquisition regulations and could also impact whether the State could pay the acquisition costs of the property.
- Do rent-to-own projects count as rental for the purposes of yearly income certifications?
- Yes, rent-to-own projects usually do require yearly income certifications during the rental phase of the project.
- Do people have to move out if their income increases?
- Persons are not required to leave the property if their income increases but a change in rent may be necessary as applicable to the project and circumstances.
- What compliance standards should I use if I am developing adaptable or accessible residential units?
- Applicants should adhere to the Illinois Accessibility Code and Fair Housing Law standards for adaptable and accessible residential developments.