1. Acquisition - Acquisition of abandoned and foreclosed residential properties for the purposes of providing housing to NSP income eligible homebuyers.

2. Rehabilitation - Rehabilitation of abandoned and foreclosed single-family structures for the purposes of providing housing to NSP income eligible homebuyers. This activity would be combined with acquisition of abandoned and foreclosed properties.

3. Demolition of Blighted Structures - Demolition of blighted structures to be replaced by units for purchase by NSP income eligible homebuyers. This activity must be combined with acquisition of abandoned or foreclosed properties.

4. Reconstruction - Reconstruction of abandoned and foreclosed structures for the purposes of providing housing to NSP income eligible homebuyers. Any single-family structure demolished per #3 above, not economically feasible to rehabilitate or has projected per unit rehabilitation costs equal to or greater than twenty-five thousand dollars ($25,000), will be considered for reconstruction. This activity would be combined with acquisition of abandoned and foreclosed properties.

5. New Construction - New construction of single family structures for the purposes of providing housing to NSP income eligible homebuyers. The property upon which the structures are constructed must be either foreclosed or vacant, as defined by NSP.

Each application must include a minimum of five (5) units.

The properties rehabilitated or constructed must be made available for sale to NSP income-eligible LMMI buyer households. Through ADFA's network of approved lending institutions, the funds can also be combined with permanent financing to assist eligible homebuyers.

Applications for single-family, reconstruction, new construction or acquisition/rehabilitation for sale must provide documentation demonstrating a demand (i.e., marketability of the proposed NSP-assisted housing) for the requested activity. Acceptable documentation must include at least one of the following: (1) a market study completed by an ADFA-approved market analyst; (2) copies of sales contracts for pre-sold units; or (3) copies of mortgage pre-approval letters from a list of potential qualified homebuyers.

Each homebuyer household is required to receive at least eight (8) hours of counseling from a HUD-approved counseling agency. ADFA anticipates a small share of funds to be directed towards providing housing counseling in an amount not to exceed two hundred dollars ($200) per household. ADFA maintains a list of approved counseling agencies that is available at: www.arkansas.gov/adfa.

If for any reason, an applicant/awardee is unable to meet the requirement to provide at least eight (8) hours of counseling from a HUD-approved counseling agency for a good cause (e.g., there are no HUD-approved housing counseling agencies within the jurisdiction, or there are no HUD-approved housing counseling agencies within the jurisdiction that engage in homebuyer counseling), a request for an exception to this requirement may be submitted to ADFA, which will submit the request to the HUD Field Office for its review.

NSP funding cannot be used to fund projects that include the following:

• Properties that are not foreclosed or abandoned;

• Properties that will not he owner-occupied;

• Properties that will not be sold to eligible LMMI households;

• Rental or commercial properties; and

• Projects where contractors do not have a state contractor's license or cannot obtain a builder's risk insurance policy and where contractors do not have a payment and performance bond for the full amount of the construction contract.

1. Hard costs - Eligible hard costs are the actual costs associated with the rehabilitation of the housing units and include the following:

2. Soft costs - Soft costs must be “usual, customary, reasonable and necessary” and may include the following:

3. Relocation Costs - The cost of permanent or temporary relocation of tenants, as required by the URA.

4. Project Delivery Costs - Project delivery costs include staff time, overhead, fringe benefits, consultant fees, etc., which can be directly attributed to a specific project. Any entity receiving a NSP fund allocation may include in its application an amount for project delivery costs (in an amount not to exceed 10% of the final NSP allocation) in the development budget. For instance, if a recipient receives a three hundred thousand dollar ($300,000) NSP allocation, it may request an additional thirty thousand dollars ($30,000) for project delivery costs. Project delivery costs are eligible only for costs directly associated with the NSP-funded development or activity. Applicants must submit an itemized budget for project delivery costs as part of the initial application. The approved applicant must submit a certification of the project delivery costs incurred that is signed by the appropriate approving official of the participating entity with each request for project delivery funds. Project delivery costs must be allocated on a pro rata basis among the NSP-assisted units. On single-family projects (i.e., new construction or rehabilitation), ADFA will withhold a ten percent (10%) administrative retainage throughout the project. Single-family projects exceeding eighteen months (18) for completion will be paid no more than 90% of administrative fees.

Proper documentation is essential for the payment of project delivery cost fund requests. Project delivery costs must be supported by source documentation maintained on file by the recipient of NSP funds. Requests for payment of project delivery costs must be verified by the Certification of Costs (signed by the recipient) and not by the supporting documentation maintained by the recipient. Supporting documentation will be reviewed and verified by ADFA staff performing compliance and monitoring reviews.

Acceptable supportive documentation includes:

• A copy of a detailed bill highlighting the costs to be reimbursed to the NSP participant. The detailed bill should, at a minimum, include vendor identification, a description of the services received, the quantity (hours, units, etc.), and the price for services received. The detailed bill must be substantiated by a cancelled check, a copy of the bank statement or other proof of payment

• No handwritten invoices will be accepted.

• All invoices must have an authorized signature of the NSP participant's Executive Director, or his or her designee, approving the payment and verifying that the services were received and satisfactorily performed, the month the cost is being paid, dated, and cancelled to prevent the invoice from being paid twice.

• ADFA will reimburse salaries which are “reasonable and customary” for support personnel (e.g., clerical, temporary employee, etc.) of the NSP participant directly providing project delivery costs to the affordable housing being assisted at a rate commensurate with their regular hourly wages.

• A copy of any contracts for professional services (e.g., consultants, architects, contractors, etc.), if applicable, must be provided in the initial application outlining the services to be rendered, the cost of the proposed services, and the proposed payment schedule or terms.

The use of prorated payment percentages is acceptable and must be outlined in the initial application as well as each billing statement submitted for reimbursement. The applicant must provide the sources of other funds used to pay project delivery costs, if any.

1. All new construction and reconstruction homebuyer units constructed for persons with disabilities must comply with the Level 5, “All-Inclusive” usability criteria as set forth in the AUSH. The AUSH is available on the internet at the following website address: www.studioaid.org. Under the “Design” link, click on “standards.”

2. All exterior and interior doors intended for passage must provide for a minimum clear opening of 34″.

3. All rehabilitation, reconstruction, and new construction single-family units in the development will have “closed-fist” operability throughout the unit, (e.g., single handle door levers vs door knobs, push stick lighting and environmental controls, cabinet doors can be opened with a closed first, single handle faucets in bathrooms and kitchen).

4. All primary entries must have entry pad measuring at least 5′x 5′.

5. All walkways/sidewalks must be at least 5′ wide.

6. Homebuyer units with NSP funds used as part of the construction must meet at a minimum the Level 1: “Visitable” usability criteria as set forth in the AUSH.