Fiscal Year 2011 Capital Funding
for the Rehabilitation of Affordable Housing

NeighborWorks America believes that rehabilitation of properties is an effective way to preserve affordable homes. In fiscal year 2011, NeighborWorks America made $34.9 million in grants from the Capital Funding for the Rehabilitation of Affordable Housing (CFRAH) law to its member nonprofit organizations and affiliated capital corporations. Grantees were permitted to use funds for:

• rehabilitation of rental homes and single-family homes
  
• financing of the rehabilitation of affordable housing units
  

Legislative Provisions

NeighborWorks organizations are required to utilize this funding only for rehabilitation or financing of the rehabilitation of affordable housing units. 

Legal Origins

Public Law 111-117 contained the following language for the Neighborhood Reinvestment Corporation: “...$35,000,000 shall be made available until expended for capital grants to rehabilitate or finance the rehabilitation of affordable housing units, including necessary administrative expenses.”

Public Laws 111-142, 111-290, 111-317, 111-322, 112-4, 112-6 and 112-10 provided NeighborWorks America with $34,930,000 for capital grants to rehabilitate or finance the rehabilitation of affordable housing units.

Senate Report 111-069, which accompanied the original Transportation and Housing and Urban Development, and Related Agencies Appropriations Bill for 2010, stated: “The Committee has included an additional $45,000,000 for capital grants to assist NeighborWorks organizations in creating or rehabilitating affordable housing, as well as creating financing or lending tools. The Committee has included this additional funding in order to assist communities that have been adversely impacted by the foreclosure crisis and the economic recession.  The Committee expects that this additional funding will aid the efforts of communities that received Neighborhood Stabilization Program [NSP] funding. However, the Committee also expects that a significant amount of the additional funding provided will assist smaller and rural communities that have affordable housing needs, including those that may not have received NSP funding. The Committee directs the NRC to include information in its fiscal year 2011 budget describing how this additional funding was used to assist communities in their efforts to create or sustain affordable housing.”

Summary of Applications

141 NeighborWorks organizations requested $53,550,601.17 and two NeighborWorks-affiliated capital corporations requested an additional $4 million to support rehabilitation of housing units.  Therefore, the funding opportunity was oversubscribed by more than a 1.7:1 margin. Awards were set to approximately match demand for the funding in all categories except “Existing Portfolio,” where the quantity and quality of applications warranted a greater percentage of awards. 

Award Principles

• Recommendation amounts in each funding opportunity are driven by demand. To achieve the demand calculation, recommended award amounts were set at 90% of request and 65% of request for Existing Portfolio and Rental Acquisition. For Single Family Acquisition Rehabilitation, recommended award amounts were set at 95% of request, 65% of request, and 45% of request; and, for RLF, recommended award amounts were set at 95% of request, 80% of request, and 70% of request, depending upon how the application scored. 
• Using these award amounts, floor or minimum scores were set for each funding opportunity for each percentage that came closest to matching demand by including applications above the floor or minimum score. (i.e. each award amount percentage had a separate floor or minimum score.)
• NeighborWorks organizations projecting to serve “Rural 20” areas received five (5) additional preference points for rural, or a percent of 5 points if the less than 100% of total units in the program were to serve this market.

Funding Provided

NeighborWorks America provided $34.9 million in capital grants to NeighborWorks organizations and to NeighborWorks-affiliated capital corporations for the rehabilitation of housing units.  Capital grants were used to upport rehabilitation costs exclusive of acquisition costs (except for pre-1976 Manufactured Housing).

NeighborWorks organizations were permitted to request up to $500,000 in aggregate for all resource opportunities, and the maximum total award to a NeighborWorks organization across all resource opportunities did not exceed $500,000 per NeighborWorks organization. 

NeighborWorks organizations were allowed to submit more than one of each of the following applications (total request across all submissions could not exceed $500,000):

• Revolving Loan Fund (RLF) – Rehabilitation Lending
  Grants through this program provide capital funds for revolving loan funds for rehabilitation lending programs. This includes lending for owner occupied repairs where the borrower is the owner of the property to be rehabilitated and lending for the acquisition and rehabilitation of a home where the borrower will be the end owner of the property to be acquired and rehabilitated. Grants from this program can support the replacement of pre-1976 manufactured housing.

• Real Estate: Rehab of Existing Portfolio Residential Rental Property
  Grants through this program provide capital funds for the rehabilitation of residential rental property currently owned by the NeighborWorks organization. Grants from this program can support the replacement of pre-1976 manufactured housing.

• Real Estate: Rehab of New Acquisition Residential Rental Property
  Grants from this program provide capital funds for the rehabilitation of projects that will be acquired or have recently been acquired by the NeighborWorks organization, and will be rehabilitated as residential rental property. Grants from this program can support the replacement of pre-1976 manufactured housing.

• Real Estate: Single Family Acquisition Rehab Program
  Grants from this program provide capital funds to support programs for the rehabilitation of single family properties that will be acquired or have recently been acquired by the NeighborWorks organization, and will be rehabilitated, and sold to homeowners. Grants from this program can support the replacement of pre-1976 manufactured housing.

NeighborWorks America collected information on the target areas for these affordable housing units and estimates that at least 25 percent of the grant funds were expended in areas that meet the USDA definition of rural for 502 programs:

(1) open country which is not part of or associated with an urban area. (2) Any town, village, city, or place, including the immediate adjacent densely settled area, which is not part of or associated with an urban area and which: (a) Has a population not in excess of 10,000 if it is rural in character; or (b) Has a population in excess of 10,000 but not in excess of 20,000, is not contained within a Metropolitan Statistical Area, and has a serious lack of mortgage credit for low- and moderate-income households as determined by the Secretary of Agriculture and the Secretary of HUD.

 

View list of 115 NeighborWorks organizations receiving awards»

 

For questions about this Web site visit our Help page.