HUD Formally Publishes NSP Changes in FR: Oregon Substantial Amendment Could Expand Eligible Areas?

HUD has formalized the definitional changes for the NSP program (see prior post HERE) via a Notice publication in the Federal Register HERE.

The Notice also alerts that a statutory change for NSP 1 grantees receiving the minimum amount (including Oregon) permits those states to reallocate funding to additional areas IF the do so via a substantial amendment. Language from the notice says this statutory change:

now allows states to re-program NSP funds to additional
areas with homeowners at risk of foreclosure or in foreclosure without
regard to the percentage of home foreclosures in such areas if they
have fulfilled the requirements of section 2301(c)(2) of HERA. Eligible
states, those that only received $19.6 million in NSP funds, that wish
to take advantage of this option, must provide a substantial amendment to their NSP plan. The amendment must contain several elements, including the state's explanation of how it has fulfilled the
requirement of section 2301(c)(2), distributing funds in a manner that
gives priority to areas with greatest need, as outlined in the NSP
plan.
A state may define program terms under the authority of 24 CFR
570.481(a) and will be required to define certain terms if it chooses
to submit a substantial amendment. States will be given maximum
feasible deference in accordance with 24 CFR 570.480(c) in matters
related to the administration of their programs.
This amendment will not be subject to HUD approval, unlike the NSP
plan. States that plan to amend their NSP plan must follow the
alternative requirements found in section II.B.4.b. of the October 6,
2008, (73 FR 58330) notice as amended by the June 19, 2009, notice (74
FR 29223). The state will submit a copy of the substantial amendment to
the HUD field office when the citizen participation is complete.
Although the amendment is not subject to approval, HUD will monitor
grantees to ensure proper implementation of the substantial amendment pursuant to section 105 of HFSHA.

At the Housing Council meeting last week there was some discussion about reallocating NSP funding to insure timely expenditure. This new announcement MAY increase the flexibility that Oregon has to reallocate those funds, IF a substantial amendment is posted for public comment and approved by OHCS.

Originally created and posted on the Oregon Housing Blog.