HENNEPIN COUNTY

   Neighborhood Stabilization Program
    Program Description & Guidelines

              REVISED September 11, 2009
                                   TABLE OF CONTENTS

Program Background ........................................................................... 1
Purpose of the Program Guidelines ........................................................ 1

I.       Marketing and Outreach............................................................. 2
II.      Borrower Eligibility .................................................................... 3
III.     Eligible Properties ..................................................................... 5
IV.      Ineligible Properties .................................................................. 6
V.       NSP Homebuyer Assistance Program Loan .................................... 7
VI.      Lenders ................................................................................... 8
VII.     Underwriting ............................................................................ 8
VIII.    Application Processing ............................................................... 9
IX.      Summary of Typical Loan Process ............................................... 9
X.       Reasons for Denial or Postponement of Loan Applications ............. 11
XI.      Appeals Procedure .................................................................. 11
XII.     Subordination NSP Homebuyer Assistance Program Loan.............. 11
XIII.    Targeted Funding.................................................................... 12
XIV.     Modification and Termination of the Program .............................. 12
XV.      Reuse of Repaid Funds ............................................................ 12

EXHIBIT A HUD Approved Counseling Agencies in Hennepin County
EXHIBIT B Eligible Area Maps
EXHIBIT C Purchase Agreement Addendum

The Neighborhood Stabilization Program (NSP) is funded by the U.S. Department of
Housing and Urban Development (HUD) under the Housing and Economic Recovery Act
(HERA) of 2008. The goal of NSP is to revitalize and stabilize communities.

Hennepin County has created the Neighborhood Stabilization Program Homebuyer
Assistance Program (NSP Homebuyer Assistance Program). The NSP Homebuyer
Assistance Program provides financial assistance for low, moderate and middle income
households to become homeowners in neighborhoods that have been impacted by the
high rate of foreclosure to assist with stabilization. Hennepin County will provide NSP
financing to assist buyers interested in purchasing foreclosed properties. The property
must be located within an identified area of greatest need.

Administration of the NSP Homebuyer Assistance Program and the functions and
responsibilities of Hennepin County staff shall be in compliance with the U.S. Department
of Housing and Urban Development (HUD) NSP regulations as well as all Federal, State
and local nondiscrimination laws and with the rules and regulations governing Fair Housing
and Equal Opportunity in housing and employment.

Hennepin County shall not deny any family or individual the equal opportunity to apply for
or receive assistance under the NSP Homebuyer Assistance Program on the basis of race,
color, gender, religion, creed, national origin, age, familial or marital status, handicap or
disability, sexual or affectional orientation or reliance on public assistance.

Hennepin County’s office is accessible to persons with disabilities. The Minnesota Relay
Service and Hennepin County TTD/TTY line provides accessibility for the hearing impaired.

Loans provided under this program are considered special mortgages under the terms of
Minnesota Statute 58.13. A homeowner with a special mortgage must receive counseling
prior to any refinancing.

Purpose of the Program Guidelines

The purpose of the guidelines is to establish requirements for carrying out the NSP
Homebuyer Assistance Program in a manner consistent with the NSP requirements and
the Community Development Block Grant (CDBG) Program, as referenced in the HERA
Act. Hennepin County is responsible for complying with all changes in HUD regulations
pertaining to the HERA Act. If such changes conflict with these guidelines, HUD
regulations will have precedence. Hennepin County reserves the right to amend and
adapt these guidelines, as needed, to comply with NSP requirements and commitment

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                 NSP Homebuyer Assistance Program Guidelines and Description
I.   Marketing and Outreach

     A.      The NSP Homebuyer Assistance Program will be administered by:

                                       Hennepin County
                       Housing, Community Works and Transit Department
                                      417 North Fifth Street
                                           Suite 320
                                     Minneapolis, MN 55401
                       Main # (612) 348-9260         Fax # (612) 348-2920

     The program contacts are:

          Alyce Osborn            alyce.osborn@co.hennepin.mn.us            (612) 348-2205
     Tonja West-Hafner         tonja.west-hafner@co.hennepin.mn.us          (612) 348-2599

     B.      Hennepin County plans to conduct the required targeted outreach efforts
             through at least the following actions:

             1)     Develop an informational sheet/brochure;
             2)     Providing information to the Realtors Association;
             3)     Working with Lenders, particularly those that are currently
                    participating in Minnesota Housing programs;
             4)     Working with realtors and lenders to announce the programs and
                    provide training on the requirements;
             5)     Providing eligible homeownership counseling agencies with information
                    to make announcements at workshops, put information in their
                    newsletters and have the counselors make referrals;
             6)     Providing information to directors of the public housing agencies and
                    housing authorities that serve the target areas;
             7)     Providing information to the target cities to put on their websites and
                    in their newsletters;
             8)     Provide as a press release to newspapers covering the target areas;
             9)     Posting information on Hennepin County website.

     C.      Funds will be given out on a first come first serve basis. Each city with an
             eligible target area(s) has decided how much funding will be available in their
             city. The funds must be kept in individual accounts for each city. Funds are
             not committed until the property and the household have both been
             determined eligible for funds.

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                  NSP Homebuyer Assistance Program Guidelines and Description
II.   Borrower Eligibility

      A.       Must be a U.S. Citizen or be a legal U.S. Resident (have legal immigration

      B.       NSP Homebuyer Assistance Program will be an “incentive” to households
               whose gross (income before any deductions) household income does not
               exceed one hundred twenty percent (120%) of the area median income
               (AMI) for the Minneapolis/Saint Paul metropolitan statistical area as
               determined from time to time by HUD. In addition, if needed, the NSP
               Homebuyer Assistance Program can also provide “affordability assistance” for
               households at or below eighty percent (80%) of the AMI. The amount of
               assistance needed will be determined by Hennepin County. For NSP the
               current household income limits, as of March 19, 2009, are:

                       1        2        3          4        5        6        7        8
                     Person   Person   Person     Person   Person   Person   Person   Person

                     44,800   51,200   57,600     64,000   69,100   74,250   79,350   84,500

           120%      70,500   80,550   90,600     100,700 108,750 116,800 124,850 132,900

      C.       Prior to approval of the assistance, income eligibility will be determined by
               Hennepin County using definition of income found at 24 CFR Part 5.609.
               Household income refers to the annual projected income as of the date of the
               Certification Application, from all sources and before taxes and withholding,
               of all adults that will live in the housing unit. Gross income includes, but is
               not limited to: salary, commissions, bonuses, earnings from full or part-time
               employment, interest, dividends, tips, gains on sale of securities, annuities,
               pension, royalties, veterans administration compensation, net rental income
               from all sources, alimony, child support, public assistance, sick pay, social
               security benefits, income from assets, business activity or investments,
               unemployment, estate or trust income and miscellaneous income.

               The income from any of the following assets with a value over $5,000 shall
               be computed as the greater of 1) actual interest income; and 2) imputed
               income based on the percentage rate established by HUD from time to time
               (currently two percent (2%)):

               •    Cash in Checking and Savings Accounts;
               •    Certificates of Deposit;
               •    Retirement accounts such as IRAs, 401Ks and Deferred Compensation the
                    borrower has access to;
               •    Investment accounts, i.e., securities, stocks/bonds and U.S. Savings

                                           Page    -3-
                    NSP Homebuyer Assistance Program Guidelines and Description
     •   Life Insurance death benefits.
     •   Redemption value of Life Insurance Policies;
     •   The current market value of all interests in real estate minus the current
         loan amount and cost to sell the property.

D.   The Borrower does not have to be a first time buyer. The Borrower must not
     have an ownership interest in another property and must occupy the property
     within 60 days of closing. The NSP assisted property must be the primary
     residence of the Borrower.

E.   The Borrower must contribute at least $1,000.00 of his/her/their own funds
     toward the purchase of the property, to be applied to entry costs (i.e.
     inspections, appraisal fees, application fees, earnest money, prepaid expenses,
     appliances, or other items as approved by Hennepin County).

F.   The Borrower must complete a qualified homebuyer training course from a
     HUD approved counseling agency. For the purpose of the NSP
     Homebuyer Assistance Program, a qualified homebuyer training will be one
     using the curriculum called Home Stretch. The Home Stretch classes and
     curriculum are maintained by the statewide, nonprofit Home Ownership
     Center (HOC) and are recognized as a standard for homeownership education
     in Minnesota. The curriculum includes classes and one-to-one meetings with
     a homeownership counselor to review personal credit and income. A
     qualified homebuyer training provider in suburban Hennepin County is
     Community Action Partnership of Suburban Hennepin (CAPSH). Additional
     HUD approved counseling agencies in the metro area are listed on Exhibit A.

     A copy of the participation certificate should be submitted with the application
     for assistance, but must be provided prior to final approval of assistance. In the
     case of a Joint Tenancy purchase, both Borrowers should attend and
     satisfactorily complete a Home Stretch course. The main Borrower must
     complete a Home Stretch course within one year prior of purchase.

G.   The Borrower must meet the requirements of a participating lending
     institution and qualify for an eligible first mortgage.

H.   The Borrower must fulfill the NSP Homebuyer Assistance Program obligations
     in a timely manner and must remain eligible to participate based on the
     program requirements and those of the lender through the time of the loan

I.   The Borrower must not have a previous loan through Hennepin County or any
     other loan that ended in foreclosure within the previous five years.

J.   Borrower must purchase an Owner’s Title Insurance Policy.

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         NSP Homebuyer Assistance Program Guidelines and Description
       K.   The Borrower must meet the requirements as specified elsewhere in these

III.   Eligible Properties

       A.   The property must be unoccupied and foreclosed. Foreclosed is defined as
            the point that, under state or local law, the mortgage or tax foreclosure is
            complete after the title for the property has been transferred from the former
            homeowner under the foreclosure proceeding or transfer in lieu of
            foreclosure, in accordance with state or local law (i.e. past its redemption
            period and owned by a financial institution).

       B.   The properties must be located in target areas as shown on the maps,
            attached as Exhibit B, in suburban Hennepin County.

       C.   Properties purchased shall be at the maximum discount possible from the
            current market appraised value, taking into account its current condition, to
            ensure that Borrowers are paying below market value. Current market
            appraised value must be determined by an appraisal meeting the Uniform
            Relocation Act (URA) standards is required before Hennepin County will
            provide NSP assistance. The discount required by NSP is a minimum of one
            percent (1%) below the current market value. For the sole purpose of
            determining compliance with the discount requirement, Hennepin County will
            order and is responsible for securing and paying for the required NSP
            appraisal. The appraisal must be no more than 60 days prior to the date of
            the final offer.

       D.   The property must meet the applicable requirements of the required Part 58
            Environmental Review.

       E.   The purchase price cannot exceed the area median purchase price, as issued
            by HUD for the type of assisted property. For Community Land Trust
            properties (CLT) with the required 99-year ground lease, the property value
            of the improvements on the leased land cannot exceed the limit. The current
            maximum value limit for a single family unit is $276,683.

       F.   Properties must be single family housing, which includes a detached single
            family unit, a townhome unit, a condominium unit, a manufactured unit with
            the lot, or a cooperative or mutual housing unit.

       G.   Ownership in fee simple title, a 99-year leasehold interest (CLT), ownership
            in a state recognized cooperative or mutual housing unit.

       H.   The property must be the Borrowers’ occupied, principle place of residence.

                                       Page   -5-
               NSP Homebuyer Assistance Program Guidelines and Description
I.    Properties must meet the property standards adopted for the NSP program as
      outlined in the Hennepin Housing Consortium’s New Construction and
      Rehabilitation Standards (the Standards), which are hereby made part of
      these guidelines by reference. The Standards include the provisions at 24
      CFR 35, requiring property built prior to 1978 be free of all lead paint
      hazards. Any identified hazards must be removed using safe work practices.
      Safe work practices are described in the HUD Office of Lead Hazard Control
      brochure entitled “Lead Paint Safety, A Field Guide for Painting, Home
      Maintenance, and Renovation Work”. The brochure is available from
      Hennepin County or at the following HUD website on lead paint

      Hennepin County will complete the required inspection and necessary re-
      inspections, specifically to meet the requirement of NSP Homebuyer
      Assistance Program. A written inspection report will be generated to
      delineate any items failing to meet the Standards. If a property fails to meet
      any of the minimum requirements of the inspection, the health and safety
      items should be corrected prior to closing and must be corrected prior to
      occupancy. Other failed items can be corrected after closing, but must be
      complete within six months of occupancy by the household. Households
      must be able to provide written documentation of sufficient resources to
      prove to Hennepin County’s satisfaction that the failed items will be able to
      be corrected within the six month time limit. Additional time may be granted
      on a case by case basis at the sole discretion of Hennepin County.
      If necessary, funds may be available in some of the target cities for
      rehabilitation and repairs through the Hennepin County NSP Rehabilitation
      Assistance Program. Hennepin County should be contacted to determine the
      status or eligibility of the property for these funds.


To assist Borrowers with meeting the acquisition requirements for NSP, Hennepin
County has created a Neighborhood Stabilization Program Addendum, attached as
Exhibit C, which eligible households must use for the NSP funded purchase. It
contains the following required elements:

      •   Purchase Discount; and
      •   Environmental Review; and
      •   Minimum Property Standards; and
      •   Disclosure to Seller with Voluntary, Arm’s Length Purchase Offer

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          NSP Homebuyer Assistance Program Guidelines and Description
IV.   Ineligible Properties

      Properties specifically ineligible include:

            •   property not foreclosed (short sale properties, etc.);
            •   property not in a target area;
            •   property located in a 100-year flood plain;
            •   manufactured housing not on a fixed foundation and/or without the
                property underneath;
            •   currently occupied property; or
            •   recreational or seasonal property

V.    NSP Homebuyer Assistance Program Loan

      A.    The minimum principal amount of a NSP Homebuyer Assistance Program
            Loan is $1,000. The assistance is an “incentive” for households with income
            up to 120% of AMI and the maximum principal amount of a loan is $10,000.
            If determined necessary by Hennepin County, in addition to the incentive
            funds households at or below 80% of the AMI may also be eligible for
            “affordability assistance” of up to an additional $20,000.

      B.    The NSP Homebuyer Assistance Program Loan will be a forgivable, zero
            percent interest, deferred mortgage. The NSP program requires minimum
            affordability periods, so the term of the mortgage will be based on the
            amount of assistance provided to the household, as listed below:

            •      $1,000 to $14,999 will be a Five (5) year term
            •      $15,000 to $30,000 will be a Ten (10) year term

      C.    The NSP Homebuyer Assistance Program Loan will run concurrent to the first

      D.    The NSP Homebuyer Assistance Program Loan must be repaid if during the
            term of the loan the property:
            •     is sold;
            •     ownership is transferred;
            •     is refinanced; or
            •     is not maintained as the Borrower’s principal place of residence.

      E.    The NSP Homebuyer Assistance Program Loan is to take second position
            behind the first mortgage, unless approved by Hennepin County.

      F.    The NSP Homebuyer Assistance Program Loan may be used to pay:

            •      the upfront costs of acquiring a principal residence, but not the entire
                   cost of the acquisition; and/or

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                NSP Homebuyer Assistance Program Guidelines and Description
            •      up to 50% of the “required” down payment; and/or
            •      the reasonable and necessary costs incurred by the Borrower
                   associated with the purchase. These costs may include: private
                   lender origination fees, credit reports, fees for title evidence, fees for
                   the recording and filing of legal documents, attorney fees and private
                   appraisal fees.

      G.    The proceeds of the NSP Homebuyer Assistance Program Loan shall be
            disbursed at the loan closing. The loan closing is the legal process that
            transfers the property title to the Borrower, transfers loan funds and makes
            the property the legally enforceable collateral for the lender. All of the
            proceeds of the NSP Homebuyer Assistance Program Loan must be disbursed
            to persons or entities other than the Borrower. Any excess funds loaned to
            the Borrower not needed for the property purchase must be applied to
            decrease the amount of the first mortgage or be returned to Hennepin
            County. If returned to Hennepin County, funds shall be applied as a partial
            prepayment of the NSP Homebuyer Assistance Program Loan.

      H.    If repayment is due to the sale of the property and proceeds from sale are
            not sufficient to repay in full the NSP Homebuyer Assistance Program Loan
            after paying obligations due to the first mortgage, the repayment amount will
            not exceed said proceeds.

      I.    These loans are considered a “special mortgage” under the terms of
            Minnesota Statutes 58.13. The Borrower must receive counseling in regards
            to any mortgage refinancing even though they will need to repay the Loan.

VI.   Lenders

      All Loan Officers (LO) that want to participate each must make a commitment to the
      Program. Each LO must attend a lender outreach/training session, read the
      guidelines and sign a statement of participation. The Borrowers have their choice of
      any of the LO that meet this requirement. A list of participating LOs is available by
      contacting Hennepin County or on the Hennepin County website

VII. Underwriting

      The HERA Act requires that Hennepin County, when providing funds ensure
      affordability for households.

      A.    The NSP Homebuyer Assistance Program is depending upon the first
            mortgage lenders to apply prudent Borrower and property underwriting
            standards to support the objective of successful homeownership. Ideally, this
            means that the assistance should be used to make a homebuyer’s front end

                                         Page   -8-
                NSP Homebuyer Assistance Program Guidelines and Description
          ratio/monthly housing ratio payments of principal, interest, taxes and
          insurance (PITI) not exceed 30 percent of the household’s gross income.

          For households using the “incentive” loan, ratios can be lower than 30%
          with no need for approval by Hennepin County.

          For households at or below 80 percent of AMI could receive the “affordability
          assistance”, the assistance is “needs” based. The additional assistance will
          be used to help create an affordable housing ratio for the household. If the
          household is already spending less than 30 percent for their housing, they
          will not be eligible for the affordability assistance. Or if the 30 percent ratio
          cannot be achieved even with the affordability assistance the household may
          not be eligible for any assistance. Hennepin County will not provide
          assistance that would put the ratio lower than 28 percent.

          PITI amounts over the 30 percent ratio will need to be reviewed and
          approved by Hennepin County.

     B.   The first mortgage product must be considered an “A” or “prime” lending
          product. It must be a fixed rate FHA, VA, or Conventional, or Fannie Mae or
          Freddie Mac insured loan.

     C.   Hennepin County will not approve the use of NSP assistance with interest
          only loans, adjustable rate loans, balloon loans, or any loan that is considered
          sub-prime or predatory.

     D.   Hennepin County will also not approve the use of NSP assistance with loans
          that are co-signed with another party that will not live in the property.

VIII. Application Processing

     A.   Hennepin County will mail out an application packet. It is the responsibility
          of each applicant to assure that Hennepin County receives his/her/their
          application. Only applications and release forms with original signatures
          will be accepted by Hennepin County.

     B.   At the time of application, applicants must fully complete a Certification
          Application form, sign a Release of Information form and provide Hennepin
          County household income information, including but not limited to the

          •     Alternative income documentation as necessary to verify the total
                household Gross Annual income from all sources (i.e. employment,
                social security income, child support, asset income, etc.).

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              NSP Homebuyer Assistance Program Guidelines and Description
           •      For self employment income, signed copies of the most recent three
                  years of filed federal tax returns. In addition, they must provide a
                  current profit and loss statement.

IX.    Summary of a Typical Loan Process

 Item                   Description of Activity (who, what, where)
        The applicant registers for and attends the homebuyer workshop series through
  1     Community Action Partnership of Suburban Hennepin (CAPSH) or other qualified
        homebuyer training agency.
        The applicant arranges for and attends a private housing counseling session with
  3     The applicant requests an application packet from Hennepin County.
        The applicant selects a participating lender and applies for mortgage pre-
        The applicant completes and submits the application packet, eligibility
  5     information, and a mortgage pre-approval letter from the lender and a copy of
        the homeownership training certificate of completion to Hennepin County.
        The applicant searches for a foreclosed property in the target areas of suburban
        Hennepin County.
        The applicant enters into a purchase agreement (PA) with the required NSP
        Addendum and contacts the lender.
        The applicant faxes the PA with all addendums (NSP, LBP, etc.) to Hennepin
        Hennepin County arranges for the environmental, URA appraisal and the
        inspection of the property.

  10    The lender confirms applicant’s mortgage eligibility and approves purchase.

        The lender provides required supporting loan documentation to Hennepin
  11    County (1008-uniform underwriting form, 1003–residential loan application
        form, income and asset verifications, good faith estimate, etc.).
        Hennepin County completes the environmental, URA appraisal and the required
  12    minimum property standards inspection (this include a lead risk assessment, if
        the property was built prior to 1978) and provides copies to the Borrower.
        Borrower provides reasonable documentation that all health and safety issues
  13    will be completed prior to occupancy and that the minimum property standards
        can be meet with in six months.
        Hennepin County reviews supporting documentation and eligibility verification
        for consistency with program goals and requirements.

                                      Page   - 10 -
               NSP Homebuyer Assistance Program Guidelines and Description
 Item                        Description of Activity (who, what, where)
            Hennepin County receives a fully executed PA. Hennepin County reviews the PA
            to ensure the required discount has been achieved by the Borrower.
            If Borrower and the property are eligible, Hennepin County sends Borrower an
     16     approval letter, sample loan documents and a Buyer Awareness form for
            Hennepin County issues an approval letter to lender and reserves the funds for
            the Borrower’s closing on the property.
            The lender sends Hennepin County the final 1008 and a copy of the bank
            The Borrower or lender sends Hennepin County a copy of Borrower’s title
     19     commitment. The Borrower is required to purchase an Owner’s Title Insurance
            Policy. A copy of the Policy will be collected at closing.
            Borrower requests and provides Hennepin County a copy of their homeowners’
     20     policy binder, listing Hennepin County as an additional insured and additional
            Hennepin County prepares the required closing documents and requests check
            for the loan closing.
            Hennepin County attends the loan closing. At the loan closing, Hennepin County
            has the Borrower sign the required loan documents.

X.        Reasons for Denial or Postponement of Loan Applications

          Hennepin County will review and verify all applications for eligibility. Those
          applicants not meeting the eligibility requirements will be sent a written notice
          explaining the reason(s) for denial of participation.

          No further applications will be accepted by Hennepin County where an applicant has
          been previously found to have falsified their application or misused loan funds.

          No reapplications will be accepted for one year following applicant's cancellation of
          loan or other actions that delay the processing beyond a reasonable period of time.
          Consideration will be given to applicants who request an extension for a medical or
          family emergency, or applicants that are currently under written order to correct for
          health and safety items.

XI.       Appeal Procedures

          Appeals regarding denial of a loan application or interpretation of eligibility
          requirements may be made in writing to the Director of Hennepin County Housing,

                                            Page   - 11 -
                    NSP Homebuyer Assistance Program Guidelines and Description
      Community Works and Transit. A written response will be provided within thirty
      (30) days.

XII. Subordination of the NSP Homebuyer Assistance Program loan

      During the term of the loan, the Borrower’s ability to use any equity in the property
      may be limited as Hennepin County will not subordinate the NSP Homebuyer
      Assistance Program Loan to additional debt added after the purchase or upon

XIII. Targeted Funding

      NSP Homebuyer Assistance Program is limited to the defined target areas as
      indicated on the attached maps.

XIV. Modification and Termination of Program

      Hennepin County may modify or terminate the NSP Homebuyer Assistance Program
      as it deems appropriate, as required by HUD, or for the continued implementation
      of same, including, but not limited to: (1) policy revisions necessary due to a
      change in design of the NSP financing mechanism; (2) policy revisions necessary
      due to changes in the rules and regulations of the Neighborhood Stabilization
      Program and/or the Community Development Block Grant Program; and (3) to
      facilitate prompt and proper expenditure of NSP funds. Once Hennepin County has
      provided financial assistance and the mortgage executed, financial assistance shall
      not be rescinded except as provided for in the executed NSP Homebuyer Assistance
      Program Mortgage and Promissory Note.

XV.   Reuse of Repaid Funds

      Hennepin County will utilize repaid NSP funds for the purpose of assisting other
      affordable housing activities within suburban Hennepin County according to federal
      regulations and/or County policies.

                                       Page   - 12 -
                NSP Homebuyer Assistance Program Guidelines and Description
                                  Exhibit A

                   HUD Approved Counseling Agencies

 Community Action Partnership of         Anoka County Community Action
   Suburban Hennepin (CAPSH)                    Program (ACCAP)
    33 - 10th Ave S, Suite 150            1201 - 89th Ave. NE, Ste 345
       Hopkins, MN 55343                        Blaine, MN 55434
          www.capsh.org                          www.accap.org

       Phone: 952-933-9639                           Carin Sanford
(English Ext.281, Spanish Ext.295)              Phone: 763-783-4747
   homeownership@capsh.org                     carin.sanford@accap.org

Community Neighborhood Housing                   Carver County CDA
           Service                                 704 Walnut St.
       35 W. Water St.                           Chaska, MN 55318
     St. Paul, MN 55107                         www.hra.carver.mn.us
                                                   Lou Setterquist
      Phone: (651) 292-0473                     Phone: 952-448-7715
                                                 Fax: 952-448-6506

       Dakota County CDA                      Neighborhood Development
     1228 Town Centre Drive                        Alliance (NeDA)
        Eagan, MN 55123                           481 S. Wabasha St.
       www.dakotacda.org                          St. Paul, MN 55107
          Rachel Smith
     Phone: (651) 675-4471                      Phone: 651-292-0131
       Fax: (651) 675-4444                        Fax: 651-292-0925
  rsmith@dakotacda.state.mn.us                   info@nedahome.org

(New approved agency as of July 2009)

 Neighborhood Housing Services
         of Minneapolis
      1501 Dupont Ave N
     Minneapolis, MN 55411

       Phone: 612-521-3581
        Fax : 612-522-1963
       Exhibit B

   Eligible Area Maps

Brooklyn Center     B-1
Brooklyn Park       B-2
Champlin            B-3
Crystal             B-4
New Hope            B-5
Richfield           B-6
Exhibit B-1
       EXHIBIT B-2

                                               EXHIBIT B-3



         Census Tract 026908
         Block Groups 1-4
              EXHIBIT B-4

               EXHIBIT B-5





                               70th Ave
                        13th                     12th


                                                                        EXHIBIT B-6
                                        Exhibit C

                  Neighborhood Stabilization Program Addendum

This Neighborhood Stabilization Program Addendum (Addendum) is to be made part of
the Purchase Agreement (Agreement) dated ______________, 20__, between
______________________________________________ (Seller) and _____________
_______________________________ (Buyer), for the property located at: ________
_________________________________, ____________, MN, ______ (the Property)

A.    Purchase Discount
The Buyer’s obligation to close this transaction with federal assistance is expressly
contingent upon the results of an appraisal ordered by Hennepin County. The Buyer is
using certain federal funds that require the purchase price to be at or below 99
percent of the appraised value on the appraisal ordered by Hennepin County. The
Buyer shall be allowed 10 days after the date of this Agreement to cancel based on
the appraisal if the condition cannot be met, in which event this Agreement will be null
and void and the Seller shall return all earnest money to the Buyer.

B.     Environmental Review
Notwithstanding any provision of this Agreement, the parties hereto agree and
acknowledge that this Agreement does not constitute a commitment of funds or site
approval, and that such commitment of funds or approval may occur only upon
satisfactory completion of an environmental review and receipt by Hennepin County
under 24 CFR Part §58. The parties further agree that the provision of any fund to the
purchase is conditioned on Hennepin County’s determination to proceed with, modify or
cancel the purchase based on the results of said environmental review. Further, the
buyer shall not undertake or commit any funds to physical or choice-limiting actions,
including property acquisition, demolition, movement, rehabilitations, conversion,
repair, construction, or execution of a construction contract prior to the environmental
clearance, as denial of any funds to purchase may result.

C.     Minimum Property Standards
Seller shall allow Hennepin County to complete an inspection of the property within 10
days after the date of this Agreement to establish if the property will meet the
Hennepin Housing Consortium New Construction and Rehabilitation Standards
(Standards). If Hennepin County determines that the property does not meet the
Standards, the Buyer shall have the right to cancel this Agreement, in which event, this
Agreement will be null and void and the Seller shall return all earnest money to the

Seller’s Initials _________

Buyer’s Initials _________   ________
                     Neighborhood Stabilization Program Addendum

D.     Disclosure to Seller with Voluntary, Arm’s Length Purchase Offer
This is to inform you the Buyer would like to purchase the property under this
Agreement to owner occupy, if a satisfactory agreement can be reached. This
purchase may receive funding assistance from the U.S. Department of Housing and
Urban Development (HUD).

Please be advised that the Buyer does not have authority to acquire your property by
eminent domain. In the event we cannot reach an amicable agreement for the
purchase of your property, the Buyer will not pursue this proposed acquisition.

The property is listed for purchase at ($)_________________. The Buyer is prepared
to offer you ($)_________________________ to purchase your property and receive
clear title to the property under the conditions described in the attached Agreement.
The Buyer believes this amount represents the current market value of your property.
Under NSP, we are required to purchase foreclosed property at a discount from is
current appraised value. Depending upon the results of our appraisal, our final
purchase offer may differ from the amount noted above.

Since the purchase would be a voluntary acquisition, arm’s length transaction, you
would not be eligible for relocation payments or other relocation assistance in
accordance with the Uniform Relocation Assistance and Real Property Acquisition
Policies Act (URA).

In accordance with the Uniform Relocation Assistance and Real Property Acquisition
Policies Act (URA), owner-occupants who move as a result of a voluntary acquisition
are not eligible for relocation assistance. A tenant-occupant who moves as a result of
a voluntary acquisition for a federally-assisted project may be eligible for relocation
assistance. Such displaced persons may include not only current lawful occupants, but
also former tenants required to move for any reason other than an eviction for cause in
accordance with applicable federal, state, and local law. If your property is
currently tenant-occupied or a tenant lawfully occupied your property on or
after February 17, 2009, we need to know immediately in order to inform
Hennepin County. Further, you should not order current occupant(s) to move, or fail
to renew a lease, in order to sell the property to us as vacant. Also, as indicated in the
contract of sale, this offer is made on the condition that if the property is vacant then
no tenant will be permitted to occupy the property before the sale is complete.

Again, if you do not wish to sell the property, the Buyer will take no further action to
acquire it. If you are willing to sell the property under the conditions described in this
Agreement, please sign the Agreement and initial this Addendum. Your signature on
the Agreement and your initials on this Addendum constitute acknowledgement that
you have received this disclosure. Please contact the Buyer if you have any questions
about this disclosure.

Seller’s Initials _________

Buyer’s Initials _________   ________

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