An Assessment Guide to Assist Grantees with their NSP ...



Assessment Guide for Reviewing and Approving Acquisition Strategy

About this Tool

Description:

This tool is a guide to help NSP grantees and subrecipients assess their progress in achieving their action plan goals for acquiring single-family foreclosed and abandoned properties. It is intended as a guide for grantees to use in reviewing their original NSP acquisition goals, assessing progress, and making changes to their acquisition strategy in order to meet NSP program goals.

How to Adapt this Document:

This document is to be used as a reference tool to help grantees identify obstacles and develop solutions that will help them improve their performance in acquiring foreclosed and abandoned properties. It contains tables to help grantees summarize their progress in meeting NSP goals. Grantees can copy and save the tables to update their accomplishments and report progress to stakeholders, or convert the tables to Excel spreadsheets to use as tracking worksheets. Grantees are encouraged to adapt the tables and ideas in the tool to meet their individual needs. The tool also provides numerous suggestions to help grantees with their acquisition strategy.

Source of Document:

The sources used to complete this document are from consultants affiliated with the consulting firm Capital Access, Inc., and from practitioners and consultants implementing an NSP1 program in Bridgeport, Connecticut.

Disclaimer:

This document is not an official HUD document and has not been reviewed by HUD counsel. It is provided for informational purposes only. Any binding agreement should be reviewed by attorneys for the parties to the agreement and must conform to state and local laws.

|This resource is part of the NSP Toolkits. Additional toolkit resources may be found at nspta |

U.S. Department of Housing and Urban Development Page 1

Neighborhood Stabilization Program

An Assessment Guide to Assist Grantees with their NSP Acquisition Strategy

INTRODUCTION:

NSP grantees and subrecipients use NSP funds to purchase and rehabilitate foreclosed and abandoned homes as part of their plans to stabilize neighborhoods affected by large numbers of foreclosed properties. Grantees that use an effective process to identify, analyze, and purchase foreclosed properties will be successful in fulfilling the goals of their NSP acquisition strategy.

The following assessment guide has been designed to help NSP participants assess their acquisition strategy:

• Review their progress to date so they can analyze the effectiveness of their acquisition strategy.

• Identify components of successful acquisition strategy.

• Make adjustments to their acquisition strategy to meet program goals.

• Obtain information about approaches to incorporate into their NSP property acquisition process.

This guide contains two sections to help grantees answer the following questions:

1. Section One: How well is your NSP acquisition strategy working?

This section provides grantees with tables to help recipients compile information about their performance in acquiring foreclosed and abandoned properties. Recipients complete their assessment by entering data in the tables so they can quantify and summarize their NSP property acquisition progress.

2. Section Two: What are ways to improve your NSP acquisition strategy?

This section provides recipients with resources and suggestions on ways to improve their NSP acquisition process. Recipients are encouraged to use the data dashboard to regularly update and monitor their acquisition progress. Some users may wish to add additional data fields that are particularly relevant to their NSP stakeholders in their communities. Recipients can also adapt the suggestions so they are appropriate to the resources available in their own communities.

Section One: Determine Your Progress by Compiling and Reviewing Your Acquisition Progress to Date

Assess the effectiveness of your acquisition strategy by reviewing your original goals and comparing your goals to your actual progress to date.

1. List your total NSP award for NSP Acquisition and Rehabilitation: $______________

2. List your original Property Acquisition Goal by listing the total number of properties you expected to acquire by this date as set forth in your NSP Action Plan Amendment: _____________

3. List the actual number of properties you have acquired as of this date: _____________

4. Compare the original estimated average property acquisition price to the actual average property purchase price of the properties you have acquired:

| | |

|Original Estimated Average Purchase Price |$ |

| | |

|Actual Average Purchase Price |$ |

5. List the location of properties you have acquired to date by census tracts or neighborhood:

|Property Address |Location (Census Tract/Neighborhood) |

|1. | |

|2. | |

|3. | |

|4. | |

|5. | |

|6. | |

|7. | |

|8. | |

|9. | |

|10. | |

6. List the number of failed acquisitions and the reason:

|Reason for failed acquisition or did not pursue acquisition |Total number by reason |

|Purchase price higher than appraised value | |

|Rehabilitation cost too high | |

|Lost property to another buyer | |

|Property did not meet profile for desired acquisitions | |

|Other (list) | |

| | |

| | |

| | |

| | |

| | |

| Total failed acquisitions | |

7. List the sources of the properties you have acquired:

|Sources of Properties/Listings |Total Number by Source |

|National Stabilization Trust Corporation (NCST) | |

|Local realtors | |

|Fannie Mae | |

|Freddie Mac | |

|FHA | |

|VA | |

|Direct bank offer (e.g., Chase, Citi, Wells Fargo) | |

|RealtyTrac | |

|Other (list) | |

| | |

| | |

| | |

| Total number of properties acquired | |

The results of the data you compile in the tables will give you a summary of the key features of your acquisition strategy. Use the results to assist you in identifying areas that are working well or may need improvement. You may also find it helpful to convert the tables to Excel spreadsheets so that you can add data and track your progress as you acquire properties.

Section Two: Focus on Problem Areas

After compiling your acquisition results, determine how your progress to date compares with your original goals. Use the suggestions below to try new approaches to improve your progress.

1. Compare Your Status to other NSP Grantees

• Compare your NSP progress to other NSP recipients and obtain information about NSP grantees’ performance by viewing “Snapshot Reports” posted on . This site provides grantees and community stakeholders with information on how the NSP grantee, field office area, region and state are doing in meeting their commitments and expenditure goals.

2. Evaluate Team Roles and Responsibilities

Your NSP Team is one of the most valuable components of any NSP property acquisition strategy. The team of professionals you assemble to help you assess potential property acquisitions and to perform due diligence on prospective acquisitions is essential to the success of your NSP program.

• Review the role of each member of your team to ensure they are providing you with timely and helpful information. Team members who typically assist NSP grantees on performing due diligence on acquisitions are:

|Team Member/Role |Adequate/Timely Performance? |

|- Individual(s) authorized to approve the purchase of| |

|properties | |

|- Architects | |

|- Appraisers | |

|- Property Inspectors | |

|- Lead/Mold/Asbestos Environmental Inspectors | |

|- Section 8 Housing Quality Inspectors | |

|- Attorneys | |

|- Realtors | |

As you select or consider adding to your team, remember the rule of 3-3-3: speak to three appraisers, three realtors, and three architects before you make a decision regarding your team members.

(Remember the selection of vendors/contractors by grantees and subrecipients is subject to procurement rules. Developers do not have to follow Federal procurement guidelines.)

• Evaluate the effectiveness of your team members and be sure they understand the components of the NSP program.

o Review the critical NSP timeframes, deadline, and goals with team members so they are aware of the urgency in meeting program goals.

o Identify the critical items you need from each of your team members in order to make decision about purchasing properties.

• Determine how well your acquisition approval process is working.

o Review the process for making “go/no-go” decisions about the properties you want to purchase, and make sure all those involved in making decisions have a clear understanding of the process.

o Analyze the length of time it takes to receive approvals to acquire properties to determine whether the approval process is effective.

o Consider whether the approval process can be revised so that expeditious and timely decisions are made about property purchases.

o Identify obstacles in the decision-making process and propose alternatives to streamline the process.

• Rotate or change the team members you are working with by procuring new professionals with different expertise.

3. Identify Sources of Potential Properties for Purchase

An effective NSP acquisition strategy is one that includes a way for you to receive a steady and frequent number of foreclosed and abandoned properties to review as possible acquisitions. If you are not receiving a significant number of properties to consider on a regular basis, there are several resources you can use to help increase your volume.

• is a service that enables you to receive a variety of information about listed properties that meet your criteria.

• provides detailed information on foreclosures by geographic area.

• Identify the real estate agents in your community that have been selected by banks, Fannie Mae, and loan servicers to represent their REO properties.

o Explain the NSP program to them and inform them of your interest in receiving their listings. You will find that most realtors are not familiar with the NSP program. Once they understand the program, they are likely to be willing to work with you to identify properties.

o Describe to the agents the prospect of obtaining a book of business from you where they can serve as both sellers of properties you wish to buy, and as listing agents of the properties you rehabilitate for sale. Real estate agents will also be interested in knowing you will be offering attractive properties that will interest the clients they represent.

o Try to make these realtors stakeholders in the NSP program. Work with realtors by telling the agents the characteristics of the properties you are interested in, and ask them to arrange to send you email listings of new properties that meet your criteria via the email alert system called “property match”.

• Provide local realtors who obtain foreclosed listings with a letter from your attorney indicating you are able to purchase properties with cash and do not require mortgage financing. Remind them that you are a competitive and desirable purchaser of REO and foreclosed property because you can buy properties without mortgage financing.

• Obtain information about the email listings and websites maintained by banks on their foreclosed properties. Many banks with REO properties will send NSP participants direct emails with new listing. To identify the banks and obtain direct emails, visit the websites of the banks and look for “REO”, or “Recent Foreclosure Listings” that is usually listed on the home page of their websites.

• You can also find information about bank foreclosed properties in your municipality by contacting your local or county government office to obtain the name of the attorney responsible for managing foreclosures in your jurisdiction. Contact the attorney and inform him or her of your interest in property.

4. Target the Locations of Foreclosed, REO, and Abandoned Properties for Purchase

The goal of your NSP acquisition strategy is to acquire enough properties to achieve a critical mass and economies of scale to positively impact the stabilization of a target neighborhood.

• Determine the target areas where you have purchased the largest number of NSP properties and are making a scaled impact. Focus on identifying new properties in those areas adjacent to those you have already acquired.

• Perform an initial review or an updated survey of the inventory of properties on the market in your target neighborhoods so you are aware of the characteristics of the housing stock and the sales prices of properties comparable to those you wish to purchase and rehabilitate.

o Supplement this market intelligence with information you receive from your team members.

o Conduct frequent “drive bys” in the neighborhoods where you have purchased properties to identify newly-abandoned buildings so that you can be aware of the properties when they are listed.

o As noted above in #2, consider working with a realtor familiar with the neighborhoods where you are working. Consider engaging a realtor to be a buyer’s broker or to serve as a consultant (which may be subject to procurement requirements). You may be able to negotiate a flat fee for services you want the realtor perform, such as identifying properties, performing Broker’s Price Opinions (BPOs), and conducting other due diligence services. Ask the realtor to help you identify properties, and alert the agent of your interest in properties that appear to be abandoned or in foreclosure so the agent can monitor the status and inform you when properties are listed.

• If you identify a property where the foreclosure process has not been completed, contact the bank to inform the REO or Asset Management staff of your interest, and learn the name of the realtor who will have the listing. Contact the realtor in advance of the listing to inform the agent of your interest in the property.

• Ask realtors who list the properties you are considering how the prospective property compares to other properties. Learn the strong points and disadvantages of each property you consider for purchase. Consider how you might address the disadvantages in your rehabilitation scope of work so that the property may be attractive to purchasers.

• And don’ forget to adhere to the appraisal and acquisition rules that pertain to acquisitions with NSP funds.

5. Organize Your Information and Document Your Acquisition Activities

• Document your due diligence activities on potential properties by maintaining copies of all reports and findings in individual project files, including information on failed properties, and properties you did not purchase. This information is a valuable resource and can be used to compare trends and costs as you implement your NSP acquisition strategy.

6. Assess, Evaluate, and Revise

• Use the data you compiled in the tables in Section One of this assessment to help you monitor you NSP progress. Add other fields for data that you consider important to track. Update the dashboard so you can analyze the impact of your acquisition strategy.

• Note which activities produce the most results.

• Share the information with your NSP stakeholders and ask for feedback. Use the information you receive to modify your acquisition strategy and to achieve your NSP goals.

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download