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HERA 2301(c)(3)(B) purchase and rehabilitate homes and residential properties that
have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such
homes and properties;

Phase 1: Property Conveyance, Scope of Work and Contractor Selection

The City will convey the property to the Developer immediately after the
acquisition closing. Prior to closing, the Developer may chose to access the
property (provided the seller gives permission) in order to complete a thorough
Scope of Work. Developer will be given a copy of the City generated Inspection
Summary form NSP1-180C-NLV to be used as a reference guide as to the items
inspected by the City. In addition to the Inspection Summary, the developer will
be provided a copy of the Environmental Review and appraisal conducted on the
property along with its Covenants, Conditions and Requirements.

1.       City will create a summary outline of repairs required to meet minimum code
         compliance (if code violations are discovered). Included in the summary outline
         will be the necessary repairs required to bring the property to HUD minimum
         property standards and identify property improvements. Also, the assessment of
         the property will identify key repair and replacement measures which will
         increase the energy efficiency and home performance of the property. This
         inspection summary document (form NSP1-180C-NLV) will be compared against
         the developers own property analysis (NSP1-182-NLV & Home Performance
         Energy Audit Report) to obtain the necessary scope of work and cost estimates
         needed to conduct rehabilitation on the property.


         A: Inspection Summary – NSP1-180C-NLV
         B: Scope of Work and Cost Estimate-NSP1-182-NLV
         C: Home Performance Energy Audit Report

2.       Developer to require that each housing unit is inspected by a Building
         Performance Analyst/Energy Auditor certified by HERS and RESNET (City will
         provide list of certified auditors to Developer) to evaluate the energy performance
         of the building and to determine the energy efficient activities that need to be
         accomplished in accordance with established program guidelines.


         A: Home Performance Energy Audit Report
         B: HomeFree Nevada HERS-BPI list as of 10/2009

3.    Developer creates a scope of work and cost estimate to be utilized for property
      rehabilitation which is determined by the property inspection and energy audits
      conducted on the site, in accordance with local codes along with City rehabilitation

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      standards. Soliciting several bids alone is not a substitute for preparing an
      independent cost estimate.

      In addition, the developer will prepare a Rehabilitation/Construction draw request
      schedule to submit, along with the Scope of Work and Cost Estimate (NSP1-182-
      NLV), Home Performance Energy Audit Report, a preliminary ARResale Unit
      Project Budget (NSP1-220A-NLV), if applicable, contractor’s agreements, and
      proof of Non-Debarred status to the City for review and approval. Should the City
      find it necessary to obtain clarification of the information submitted for approval for
      property rehabilitation by the developer or need additional information, form NSP1-
      181-NLV (Request for Additional Information) will be used. Once all submittal
      requirements have been met, and all approved rehabilitation items have been
      authorize by City staff, a City approved scope of work along with a Notice to
      Proceed (NSP1-186-NLV) will be given to the developer. At this time construction
      contracts can be signed and rehabilitation of the property may commence

    NOTE: Developer may select any non-debarred licensed General Contractor
    that demonstrates competence to undertake construction in conformance with
    the established Property Rehabilitation Standards and Guidelines. The
    Developer must verify that selected contractor(s) is not on the debarred list
    and Developer is to keep on file a certification of non-debarred status (NSP1-
    120-NLV) of all contractors.


      A.   Request for Additional Information - NSP1-181-NLV
      B.   Scope of Work/Cost Estimate form –NSP1-182-NLV
      C.   Notice to Proceed – NSP-186-NLV
      D.   ARResale rehabilitation Document Checklist – NSP1-210-NLV
      E.   Preliminary ARResale Unit Project Budget (NSP1-220A-NLV)
      F.   Rehabilitation/Construction Schedule
      G.   Construction and Draw Request Schedule
      H.   Home Performance Energy Audit Report
      I.   CNLV NSP Property Standards and Guidelines
      J.   NSP Construction Standards Guide
      K.   Home Performance Standards for Warm Climates
      L.   Contractor’s Agreements
      M.   City Approved Scope of Work
      N.   North Las Vegas Building Code
      O.   North Las Vegas Planning and Zoning Ordinance

    North Las Vegas Building and Planning and Zoning codes may be accesses via the
    World Wide Web by pasting the following path to your browser at

Phase 2: Rehabilitation Management

The developer will have the responsibility for overseeing the entire rehabilitation
process and will periodically (or as requested) provide the City with the necessary
progress updates as well as make all necessary requests (e.g. Inspection,

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financial, administrative) to the City so as to ensure all program activities are
carried out in accordance with City of North Las Vegas Neighborhood
Stabilization program regulations.

4.    Rehabilitation activities will include construction oversight by the Developer. City is
     to be notified of pre-construction meetings and reserves the right to participate in
     those meetings and conduct routine site visits. A Status Report will be submitted by
     the developer at monthly or as requested, to the City detailing the individual
     progress of each property. All Rehab Activity will be inspected by the City as
     needed. Project monitoring will be conducted via desk top or “on-site” by City staff
     so as to ensure program compliance and identify any issues relating to the program
     process and to assist in creating a solution as needed. Developer may request, as
     desired, an intermediate progress inspection by the City to ensure rehabilitation
     work timeline+ is kept so as to avoid project delays.


         A. NSP Intermediate Inspection Request form – NSP1-188-NLV
         B. ARResale/ARRental Monthly Status Report – NSP-240-NLV

5.   City is interested in any change orders between the contractor and Developer. If the
     change order reflects a change in the authorized scope of work, it will require City
     approval prior to implementing the change.

                         FORM/DOCUMENTS USED FOR THIS PROCESS:

         A. Change Order Request form - NSP-187-NLV
         B. Revised Scope of Work/Cost Estimate form –NSP1-182-NLV

6. When construction and rehabilitation is complete, Developer will schedule a punch
   list inspection with the NSP Program Administrator. In addition, an inspection by a
   Building Performance Analyst/Energy Auditor (certified by HERS and RESNET) will
   also be scheduled. A list of items to be corrected will be provided to the Developer
   and the contractor. Until punchlist items are corrected to the satisfaction of the
   Developer and the inspector, and required permits are issued, and the receipt of the
   revised Home Performance Energy Audit Report, the Developer will not be allowed
   to proceed to property disposition.

7. The City will progress pay the rehabilitation expenses upon receipt of the required
   documentation and Request for Payment forms; requests should not be submitted
   more often than twice monthly. Advances on work will not be approved. The City
   may retain 10% until the project is complete (disposition of the property).

 8. Upon completion and prior to final payment, contractor shall provide Developer all
    warranties, as-built drawings, operation manuals, guarantees and release of liens.

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        As part of NSP1 requirements, the developer must be in compliance with Section 3
        of the Department of Housing and Urban Development Act of 1968.


         A. A cover letter requesting reimbursement on Developer letterhead. Please
            indicate the dollar amount of request in this letter.
         B. A completed Request for Payment form (NSP1-231-NLV) with progress
         C. Contractor’s invoice with percentage of work completed.
         D. Copies of checks and cancelled checks for payments made (front & back). In
            the case of wire transfers copy of the wire transfer entry and wire transfer
            receipt conformation.
         E. NSP1 Rehabilitation Punchlist- NSP1-183-NLV
         F. ARResale Project Completion Certification and Request for Inspection –
         G. Final Home Performance Energy Audit Report
         H. HUD 2516 – Contract and Subcontract Activity

Phase 3: Property Rent-Up and Property Management

Once rehabilitation is complete, outreach efforts will be underway. NSP acquired
properties will be rented to qualified households that are at or below 50% of the
area median income as required by the NSP 1 program.

13. Outreach – The Developer will develop and implement an affirmative marketing plan
    which will be made available to a broad spectrum of the community with particular
    emphasis on traditionally under-served populations. Particular outreach should be
    made available to those households living in public housing and mobile home
    communities. The Developer will make every reasonable effort to advertise the rental
    properties to qualified households through various means of promotion. It is NSP1
    program policy to admit qualified applicants only.

The City of North Las Vegas requires that the Developer ensure that all families
who express an interest in housing assistance are given an equal opportunity to
apply, and are treated in a fair and consistent manner.


    A. Affirmative Marketing Plan

14. Intake/Eligibility/Selection Guidelines – The Developer will submit an
    Intake/Eligibility/Selection Plan outlining, at a minimum, the following areas:

        Qualifications for admission
        Non-economic and suitability eligibility criteria
        Application processing and eligibility determination

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        Income limits and determination of rents
        Occupancy guidelines and unit management
        Annual recertification
        Lease and security deposit execution
        Inspections
        Complaints or grievance
        Lease termination and eviction
        Non-discrimination and fair housing policy
        Accessibility – Reasonable Accommodation


    B. Intake/Eligibility/Selection Guidelines

15. Determining Income Eligibility - Technical eligibility of the household will be
    performed by the Developer’s staff or property management staff and will be
    performed in accordance with the procedures identified in HUD’s “Technical Guide
    for Determining Income and Allowances for the HOME Program, Third Edition (HUD-
    1780-CPD), using the Part 5 definition of annual income. An “Income Eligibility
    Package” must be completed on each household to include, at a minimum:

        INCOME QUESTIONNAIRE (including, but not limited to, place and length of
         employment for each person in household 18 years of age or older)


    A. Technical Guide for Determining Income and Allowances for the HOME Program,
       Third Edition (HUD-1780-CPD)

16. Income Limits and Determination of Rents – The Neighborhood Stabilization
    Program regulations require families be at or below 50% of area median income at
    the time of admission to this program. The minimum income requirement is 30% of
    area median income (as long as the rent burden does not exceed 50% of monthly
    income). This is based on affordability and program revenue requirements. HUD’s
    published Income Limits will be used for this purpose.

    Affordable rents are defined as the annual Fair Market Rents (FMR) established by
    HUD annually, adjusted by the number of bedrooms. Affordable rents must also
    include a utility allowance which is based on utilities paid by the tenant (not including
    telephone) and adjusted by the number of bedrooms. Based on the family’s gross
    annual income, the applicable published HOME Rents schedules minus a utility
    allowance will apply. The City of North Las Vegas will utilize the Utility Allowance
    Schedule published annually by the Housing Authority of Clark County.

    HUD Income Limits are updated annually; therefore, applicable income limits and

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    rent structures will be posted in designated locations and will be used when
    determining eligibility and rent amounts.


    A.   Current Fair Market Rents -
    B.   Current HUD Income Limits -
    C.   Income Worksheet – NSP1-410-NLV
    D.   Income Inclusions and Exclusions – NSP-411-NLV

17. Property Management – The Developer is responsible for management of all
    residential properties which have been conveyed to the Developer’s organization;
    however they may procure a management firm. If a management firm is procured,
    the property management contract must be available for review in the project file. I
    addition to the contract, a property management procedures manual must be
    submitted to the Developer for review and must be kept on site with the Developer.

    The property management fee will be paid as a percentage of operating income as is
    standard in the industry. That fee will be 5 percent of the operating income for each

    The Developer may retain an appropriate amount of operating income for “reserve
    for replacement” – the amount to be determined on a case-by-case basis. Any other
    operating income above actual costs is considered program income and must be
    returned to the City of North Las Vegas.

18. Monthly Reporting - For each property the Developer must submit to the City:

        The developer will generate and submit a summary of all operating income,
         operating/maintenance expenses including replacement reserve, all
         management expenses and any net income generated by each property. The
         Developer should also include a project narrative regarding action taken on each
         property and any accomplishments achieved.
        NSP1-451-NLV ARRental Tenant Statistics Report.
        A Developer generated program progress and compliance report that outlines the
         following information:
         o Physical occupancy
         o Wait List information
         o Move-ins, move-outs and turn-around times
         o List of all vacant units and their status
         o Applications taken
         o Customer/client traffic
         o Active promotions and advertising
         o Resident Recertification’s
         o Property inspections
         o Lease enforcements
         o Non-emergency work orders
         o Emergency work orders

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         o   Delinquencies


    A.   Summary of Operating Income and Expenses
    B.   Summary Report of all Actions and Accomplishments
    C.   NSP1-451-NLV ARRental Tenant Statistics Report.
    D.   Program Progress and Compliance Report

19. Tenant File Management – The developer will maintain tenant files that will
contain, but are not limited to, the following information:

        Initial Occupancy – Application Packet
        Income Certification and Recertification
        Lease Agreements
        Financial and Resident Management Data
        Maintenance Data
        Rent Collection Data
        Lease Enforcement
        Inspections
        Evictions

20 Record Keeping - The developer will maintain accurate record keeping and
   reporting so as to adhere to the record keeping and reporting requirements of the
   NSP1 program requirements. The Developer will structure its project/case files and
   other records to comply with the NSP and other federal requirements and to facilitate
   preparation of progress and other reports.

    For each type of activity undertaken, the Developer, in consultation with the City, will
    determine the comparable data that should be maintained in the individual case files
    and establish a system for ensuring that every file contains the necessary
    information. At a minimum the project file will contain:

    o    National Objective being met
    o    characteristics and location of beneficiaries
    o    eligibility of the activity
    o    compliance with special program requirements
    o    allowability of the costs
    o    status of the case/project

Note: Records are to be retained for 4 years unless there is litigation, claims, audit,
negotiation, or other actions involving the records, which has started before expiration of
the 4-year period. In such cases, the records must be retained until completion of the
action and resolution of all issues which arise from it or the end of the regular 4-year
period, whichever is longer.

20. Record Retention - Developers are required to retain their records for extended

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periods of time, even though an activity may be completed for some time. The
Developers are responsible for retention of financial records, supporting documents,
statistical records and all other records pertaining to the project for a minimum of four
years from the date that the NSP activity was finalized (24 CFR 85.42 as modified by
570.502(a)(16), or 24 CFR 84.53(b) as modified by 570.502(b)(3)(ix) (A) and (B), as

21. Developers’ obligation - The Developer must assure that housing resources reach
only income- eligible families so that program integrity can be maintained. The NSP1
Developer will take all steps to prevent fraud, waste and mismanagement so that
available resources are utilized judiciously.

Tenant families must comply with provisions of the lease and other local and program
rules. The Developer staff will make every effort, formally and informally, to orient and
educate all families in order to avoid unintentional violations. However, the Developer
has a responsibility to the community and eligible families in need of housing assistance,
to monitor tenants’ lease obligations for compliance and when indicators of possible
abuse surface, to investigate those matters and take appropriate action. Each lease
should be for a period of no less than one year.

22. Monitoring – Monitoring activities will be conducted by the City in an ongoing basis
and as required. The City’s responsibility is to conduct periodic desk and/or file reviews
and on-site visits as needed to ensure that the Developer or property management firm
are operating the project in compliance with NSP requirements. The areas to be
reviewed for compliance may include, but are not limited:
• resident or tenant qualifications, income calculations and appropriate supporting
• the gross rent payment and its components, including utility allowance;
• the vacancy history;
• resident or tenant selection;
• on-going affirmative fair marketing efforts;
• housing quality standards;
• financial condition; and
• overall property management.

24. Program Income – Per the NSP Acquisition, Rehabilitation, Rental Agreement, all
net program income will be returned to the City of North Las Vegas. The Developer wil
retain a property management fee as part of the operating expenses which will be paid
as a percentage of operating income. The Developer may also retain an appropriate
amount of operating income for “reserve for replacement” on a case-by-case basis. This
amount will be approved by the City.

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Abandoned. A home is abandoned when mortgage or tax foreclosure proceedings have
been initiated and completed for that property, no mortgage or tax payments have been
made by the property owner for at least 90 days, AND the property has been vacant for
at least 90 days.

Acquisition Costs. Acquisition costs that will be considered reimbursable at the time of
sale cannot exceed the appraised market value conclusion determined of the home at
the time of purchase. Acquisition costs include payment of any and all liens to obtain a
clean title to the property, appraisals, hazmat reports, energy or “BEPS” audit reports,
code compliance costs, work scope reports, systems performance analysis costs and
other costs itemized in the Program Budget under Acquisition Delivery Fee (Exhibit “B”).

Area Median Income. Income limits are calculated by HUD in accordance with Section
3(b)(2) of the United States Housing Act of 1937, as amended. These limits are based
on HUD estimates of median family income, with adjustments based on family size.
These figures are updated on an annual basis and new limits will be utilized as
published. These limits are available on the website. See Exhibit “D” for
HUD NSP Income limits as of April 2009.

Areas of Greatest Need. City has geographically identified the locations of greatest
need based on the areas with the greatest percentage of home foreclosures; areas with
the highest percentage of homes financed by sub-prime mortgages and areas identified
as likely to have a significant rise in the rate of home foreclosures. See Exhibit “E” for a
list of all eligible locations for City NSP-assisted properties.

Blighted. A structure is blighted when it exhibits objectively determinable signs of
deterioration sufficient to constitute a threat to human health, safety and public welfare.

Completed. A unit is considered completed once the construction/rehabilitation is 100
percent complete, the permit(s) have been finalized and issued by the Building
Department, the unit has been sold to an eligible household, and the appropriate
disposition documentation has been submitted to City.

Continued affordability. The affordability of the homeownership housing units will be in
accordance with the HOME program standards at 24 CFR 92.254. Using the HOME
program affordability periods will provide for a minimum length of affordability; however,
the City may require longer affordability periods that exceed the HOME program
requirements as the NSP program evolves.

Current market appraised value. The current market appraised value means the value of
a foreclosed upon home or residential property that is established through an appraisal
made in conformity with the appraisal requirements of the URA at 49 CFR 24.103 and
completed within 60 days after an offer is made for the property by a grantee, Developer,
or individual homebuyer.

Delivery Fee. Proposed project delivery fee per housing unit as identified by the
Developer and as detailed in the Program Budget (Exhibit “B”).

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Foreclosed. A property has been foreclosed upon at the point that under state or local
law the mortgage or tax foreclosure is complete. HUD will not consider a foreclosure to
be complete until after the title for the property has been transferred from the former
homeowner under some type of foreclosure procedure or transfer in lieu of foreclosure,
in accordance with state and /or local law.

Housing Rehabilitation Standards. Rehabilitation standards require that all buildings
assisted with NSP funds be brought up to City codes in effect at this time, that required
building permits be obtained and that appropriate inspections be performed. NSP
assisted properties involving rehabilitation must conform to the City NSP Construction
Standard Checklist as well as the Home Performance Specifications for Warm Climates
manual as adopted by City for use with NSP Acquisition Rehab Resale projects.

Obligated. Funds are obligated for an activity when orders are placed, contracts are
awarded, services are received that require payment by the unit of local government or

Participant. The consumer that buys the home upon completion of rehabilitation by the
Developer. Homebuyer must be eligible for the program as specified in Program
Description (Exhibit “A”).

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