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Compliance with Affordability Provision under NSP

Recently questions have arisen surrounding the compliance with affordability provisions under the Neighborhood Stabilization Program Grants (NSP):

Structuring Affordability

The U.S. Department of Housing and Urban Development (HUD) requires grantees to ensure, at a minimum, the NSP assisted units are affordable for the periods set out in the HOME Investment Partnerships Program (HOME) rules. Grantees only need to certify the incomes of tenants and homebuyers at the time of occupancy. But policies and procedures should be established by the grantee to ensure that the income eligible person is living in the home or rental unit or depending on the method of enforcement, that it has been rented or sold to an alternate income eligible household. HUD does not dictate how this is done; only that it is done. For guidance on structuring affordability provisions, please review the NSP Homebuyer Programs: Financing and Long-Term Affordability guide.

Tracking Affordability

HUD requires NSP grantees to report on the method and duration of affordability at the time of grant closeout. In general a grantee may submit the NSP Management Plan for Continued Affordability; or an excel spreadsheet with a column for each of the following categories: Grantee Name, Grant Number, Responsible Organization, Description of Affordability (Resale, Recapture, Rental or Other, for other provide an explanation), Property Address, DRGR Activity Number, Start of Affordability Period, End of Affordability Period; or a DRGR report or reports with the same information; this may entail a separate report for each responsible organization. For detailed instructions on tracking affordability, please review the NSP Management Plan for Continued Affordability document.

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