Role of MHMFA in the Neighborhood Preservation Area

MHMFA will coordinate negotiations and communication between local participants in the Neighborhood Preservation Area. MHMFA will also issue tax-exempt bonds to finance the purchase of Loan Participations in Mortgage Loans originated by local Mortgage Lenders in the Neighborhood Preservation Area. An application to a local Mortgage Lender for a Mortgage Loan on a property within the NPA will be evaluated according to the same criteria established by MHMFA for all Mortgage Loans in which the Agency will purchase Loan Participations. MHMFA does not currently have the financial resources to provide extensive technical assistance in the development of a Neighborhood Preservation Area nor to fund the implementation of local components of the preservation programs. The NPA program can probably most effectivelybe used to increase the effectiveness of an existing local program or to stimulate the development and funding from other sources of local neighborhood preservation plans. Programs which could compatibly be used with MHMFA neighborhood preservation programs include: (a) the Department of Community Affairs Neighborhood Improvement Program (NIP), (b) Urban Reinvestments Task Force, Neighborhood Housing Service Programs, and (c) local housing improvement plans funded through Community Development Block Grant funds or federal "312" funds. Applicants are not limited to the above programs and are encouraged to explore every possible resource available to the local community to develop a program uniquely tailored to the need of the designated neighborhood. The following requirements must be met before a NPA will be approved by MHMFA: (1) Local Mortgage Lenders must submit or be willing to submit a commitment application to MHMFArequestinga "setaside"for mortgages originated within the Neighborhood Preservation Area (See MHMFA Commitment Application) in an amount sufficient to improve or stabilize the NPA. Further, participating Mortgage Lenders must indicate a commitment to make conventional mortgages to all creditworthy loan applicants from within the NPA whose incomes exceed the MHMFA maximum or who are otherwise not eligible for a mortgage in which MHMFA can purchase a Loan Participation. (2) The municipal government must make specific commitments to: (a) enforce the building and housing codes within the NPA; (b) provide improved public services or facilities which are significant in relation to the objective of stabilizing or improving the area. (3) A program must be developed and implemented, which includes the resources and staff to: (a) promote participation in the NPA program by local homeowners; (b) provide financial counseling to loan applicants, and; (c) provide advice and assistance in residential rehabilitation and maintenance. (4) A process for participation by local residents and/or organizations in the operation and monitoring of the NPA program must be developed and implemented. MHMFA will periodically review NPA programs to evaluate the implementation of the program outlined in the application. MHMFA may revoke its approvalof a NPA program or take such other action as may be stipulated in contracts and agreements if the program for the preservation and stabilization of the neighborhood is not initiated or if tangible activity is not continued.