The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
challenges in the Reno MSA housing market have been more severe than those in most areas of the naBon. The MSA currently ranks 49 in the naBon for th of foreclosure -‐ those 90 or more days delinquent or in the foreclosure process. During the early part of the last decade, local home prices rose at a pace tha than the naBonal average. Since that Bme, home prices in Reno have fallen more steeply than in most parts of the country. Falling property values and the re mortgages were parBally fueled by investor speculaBon and excess housing construcBon in the years leading up to the housing crisis. Rising defaults as a resu mortgage lending and rising unemployment during the subsequent recession added further to the decline in property values. Economic condiBons in Reno a housing market remains fragile with a high concentraBon of distressed sales, large numbers of vacancies, and 49 percent of home mortgages underwater. Ho broad approach to stabilize the housing market has been a real help to homeowners in Reno and surrounding ciBes. This addendum to the Obama Administr provides a summary of trends and condiBons in the local economy and the impact of the AdministraBon’s efforts to stabilize the housing market and help loc U.S Department of Housing and Urban Development U.S. Department of the Treasury Spotlight on the Housing Population Growth, Employment, and Housing Market: Market in Reno-Sparks, Nevada With a populaBon of 425,417 people according to the most recent Census, the Reno-‐ Sparks MSA is the 116th largest in the naBon. From 2000 to 2010, populaBon growth was moderate, increasing at an average of 8,250 people, or 2.4 percent a year. From Spotlight on the Housing Market in Reno-Sparks, Nevada 2000 to 2007, 6,125 people a year moved into the area, accounBng for 68 percent of total populaBon growth. As economic condiBons worsened from 2008 to 2010, an average of 260 people a year moved out of the MSA, slowing populaBon growth. The Obama Administration's Efforts to Stabilize the Housing Market and Help American Homeowners - November 2012 Reno Housing Unit Growth Outpaced Population and Househ the Past Decade Date of Census Reno-‐Sparks Population Annual Growth Rate Reno-‐Sparks Households Annual Growth Rate Reno-‐Sparks Housing Units Annual Growth Rate 4/1/00 342,885 -‐ 133,546 -‐ 145,504 -‐ opolitan StaBsBcal Area (Reno) is located in northwestern Nevada and includes two counBes: Washoe (including the ciBes of Reno and Sparks) and Storey. The Source: Census Bureau (2000 and 2010 Decennial) A housing market have been more severe than those in most areas of the naBon. The MSA currently ranks 49th in the naBon for the share of mortgages at risk r more days delinquent or in the foreclosure process. During the early part of the last decade, local home prices rose at a pace that was 27 percent greater Since that Bme, home prices in Reno have fallen more steeply than in most parts of the country. Falling property and the resulBng During vtalues he decade spanned by utnderwater he Census, new housing producBon exceeded household growth in the Reno-‐Sparks MSA. Net annual housing unit growth of ueled by investor speculaBon and excess housing construcBon in the years leading up to the housing crisis. Rthan ising the defaults as a result of unsustainable corresponding populaBon and household growth rates of 2.4 percent. The growth in the Reno housing stock between Census counts indicates an ex g unemployment during the subsequent recession added further to the decline in property values. Economic condiBons itn Reno are stabilizing, but tthe local construcBon hat may have contributed o the steep price declines observed ager 2006. Investor speculaBon was likely a major factor in the overbuilding in t agile with a high concentraBon of distressed sales, large numbers of vacancies, and 49 percent of home mortgages underwater. owever, he AadministraBon’s the crisis, as a larger H share of Rteno rea home purchases were by non-‐occupant investors than the corresponding share for the naBon. Specifically, from 200 U.S. Department of Housing and Urban Development | Office of Development andfor Research e the housing market has been a real help to homeowners in Reno and surrounding ciBes. This addendum to the O bama AdministraBon’s Housing sales rose from 11.2 to 18.8 percent of Stcorecard otal sales in Policy Reno, while the corresponding increase the naBon was from 7.8 to 14.6 percent of sales. SpeculaBve nds and condiBons in the local economy and the impact of the AdministraBon’s efforts to stabilize the housing market nd hvelp local homeowners. raised the laocal acancy rate, which according to the Census Bureau, increased by an average of 970 units, or 8.1 percent, annually in Reno during the 2000s, naBonal average increase of 4.4 percent during the same period. The Reno-Sparks, NV Metropolitan Statistical Area (Reno) is located in northwestern Nevada and includes two counties: Washoe (including the cities of The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | November 2012 Reno and Sparks) and Storey. The challenges in the Reno MSA housing market have been more severe than those in most areas of the nation. The MSA currently ranks 49th in the nation for the share of mortgages at risk of foreclosure - those 90 or more days delinquent or in the foreclosure process. During the early part of the last decade, local home prices rose at a pace that was 27 percent greater than the national average. Since that time, home prices in Reno have fallen more steeply than in most parts of the country. Falling property values and the resulting underwater mortgages wereFrom partially Reno's economy is stabilizing. The local economy experienced robust economic growth prior to the 2007 recession. the third fueled quarter of 2003 through Employment, and Housing Market: nonfarm paayrolls expanded at ato n aDverage annual rate crisis. of 7,200 jobs, or 3.6 defaults percent. Job as losses egan in tof he sunsustainable econd quarter of 2007 and conBnued through th Housing Uconstruction nit Growth Outpaced opulation nd leading Household Gup rowth uring housing by investor speculation and excessReno housing in Pthe years the Rising a bresult mortgage n average annual rate of 10,400 jobs, or 4.6 percent. The Reno economy has stabilized since then, with total jobs at approximately 189,400 from the fou the Past at Daecade 17 people according to the mand ost recent Census, the Reno-‐ lending rising unemployment during the subsequent recession added further to the decline in property values. Economic conditions in Reno are third quarter of 2012. The professional and business services and the leisure and hospitality sectors have added jobs since the recovery began, while job loss gest in the naBon. From 2000 to 2010, populaBon growth Date of Census 4/1/00 stabilizing, but the local housing market remains fragile with a concentration distressed sales, large rnumbers vacancies, 49falling percent of home and chigh onstrucBon sectors o4/1/10 ffset this of growth. The naBonal unemployment ate peaked in of October 2009 at 10.0 and percent, to 7.9 percent by October 2012 t an average of 8,250 people, or 2.4 percent a year. From Reno-‐Sparks Population 342,885 425,417 peaked at 13.3 percent in August 2011 before declining to 11.3 percent by October 2012. mortgages underwater. However, the Administration’s broadReno approach to stabilize the housing market has been a real help to homeowners in Reno and e a year moved into the area, accounBng for 68 percent of A nnual Growth Rate -‐ 2.4% s economic condiBons worsened from 2008 to 2010, an ouseholds Administration’s 165,187 surrounding cities. This addendumReno-‐Sparks to the HObama provides a summary of trends and conditions in the local economy 133,546 Housing Scorecard ar moved out of the MSA, slowing populaBon growth. Annual Growth Rate -‐ 2.4% and the impact of the Administration’s efforts toUnits stabilize the145,504 housing market 186,831 and help local homeowners. Reno-‐Sparks Housing Annual Growth Rate -‐ 2.8% Source: Census Bureau (2000 and 2010 Decennial) Population Growth, Employment, and Housing Market: 130 Reno Housing Unit Growth Outpaced Population and Household Growth During the Past Decade 125 Date of Census 4/1/2000 4/1/2010 Reno-Sparks Population 342,885 425,417 - 2.4% 133,546 165,187 Annual Growth Rate Reno-Sparks Households Annual Growth Rate Year and Quarter Reno-Sparks Housing Units Reno MSA 145,504 NaBon (right axis) onally Adjusted Data Annual Growth Rate ce: Bureau of Labor StaBsBcs Source: Census Bureau (2000 and 2010 Decennial) - 120 115 Millions Thousands recent Census, the Reno-Sparks MSA is the 116th largest in the 226 221 nation. From 2000 to 2010, population growth was moderate, 216 increasing at an average of 8,250 people, or 2.4 percent a 211 year. From 2000 to 2007, 6,125 people a year moved into the 206 area, accounting for 68 percent of total population growth. As zing. The local economy experienced robust economic growth prior to the 2007 recession. From the third quarter of 2003 through 201 the first quarter of 2007, economic conditions worsened from 2008 to 2010, an average d at an average annual rate of 7,200 jobs, or 3.6 percent. Job losses began in the second quarter of 2007 and conBnued through the third quarter of 2010, declining 196 quarter of 2010 through the 260 people a eyear moved outsince of the slowing population of 10,400 jobs, oof r 4.6 percent. The Reno conomy has stabilized then, MSA, with total jobs at approximately 189,400 from the fourth professional and business services and the leisure and hospitality sectors have added jobs since the recovery began, while job losses 191 primarily in the government growth. During the decade spanned by the Census, new housing ffset this growth. The naBonal unemployment rate peaked in October 2009 at 10.0 percent, falling to 7.9 percent by October 2012. The unemployment rate for 186 production exceeded household in the Reno-Sparks MSA. ent in August 2011 before declining to 11.3 percent by October 2growth 012. Net annual housing unit growth of 2.8 percent was greater than the corresponding population and household growth rates of 2.4 Year and Quarter percent. The growth in the Reno housing stock between Census Reno MSA NaBon (right axis) counts indicates an excess of housing construction that may have Seasonally Adjusted Data Source: Bureau of Labor StaBsBcs contributed to the steep price declines observed after 2006. Investor speculation was likely a major factor in the overbuilding in the years leading up to the crisis, as a larger share of Reno Unemployment Rates Remain High, But Show Improvement area home purchases were by non-occupant investors than the Monthly Unemployment Rate (Percent) Job Market Conditions Improving for the Nation, Stabilizing in Reno corresponding share for the nation. Specifically, from 2000 to Quarterly Nonfarm Employment 2006 investor home sales rose from 11.2 to 18.8 percent of total 14 140 sales in Reno, while the corresponding increase for the nation 12 was from 7.8 to 14.6 percent of sales. Speculative overbuilding 135 10 8 6 4 2 0 2.4% 186,831 2.8% Reno MSA Seasonally Adjusted Data Source: Bureau of Labor StaBsBcs Spotlight on Reno-Sparks MSA | Page 1 NaBon 14 140 12 135 130 125 120 115 10 Millions d by the Census, new housing producBon exceeded household growth in the Reno-‐Sparks MSA. Net annual housing unit growth of 2.8 percent was greater pulaBon and household growth rates of 2.4 percent. The growth in the Reno housing stock between Census counts indicates an excess of housing e contributed to the steep price declines observed ager 2006. Investor speculaBon was likely a major factor in the overbuilding in the years leading up to of Reno area home purchases were by non-‐occupant investors than the corresponding share for the naBon. Specifically, from 2000 to 2006 investor home Job lMarket Conditions Improving for the Nation, Stabilizing in Reno 8 percent of total sales in Reno, while the corresponding increase for the naBon was from 7.8 to 14.6 percent of sales. SpeculaBve overbuilding ikely Quarterly Nonfarm Employment e, which according to the ensus Bureau, increased by an average of 970 uaccording nits, or 8.1 percent, annually With aCpopulation of 425,417 people to the mostin Reno during the 2000s, nearly double the of 4.4 percent during the same period. 8 6 4 2 0 Sea Sou U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S. Department of Housing and Urban | Office PolicyAmerican Development and Research| November 2012 The Obama Administration’s Efforts to Stabilize the Development Housing Market andofHelp Homeowners Housing Market in Reno-Sparks, Nevada Housing Market in Reno-Sparks, Nevada to ut an to a Housing Market in Reno-Sparks, Nevada ed ut likely raised the local vacancy rate, which according to the ned an a nal Census Bureau, increased by an average of 970 units, or 8.1 ed to rate of home ned ut percent, annually in Reno during the 2000s, nearly double the e an price of nal raate national average increase of 4.4 percent during the same period. ercent ed home to ned e les price the ercent nal rate of Reno’s economy is stabilizing. The local economy re dtown les o home of d ecline experienced robust economic growth prior to the 2007 recession. the e price peak-‐ ercent re down From the third quarter of 2003 through the first quarter of 2007, e ednd les tecline o of of the peak-‐ e end of re down 2009. of decline 2012, peak-‐ 4e.6 e nd of 2009. previous 2012, 4.6 previous 2009. 2012, 4.6 previous ding to LPS of e to LPS ding d obf y 12.9 a naSonal e ages isk d by ta1o t 2.9 ding LrPS c risis. In ao naSonal f n p roducts, ages e at risk d b y 1a2.9 2c007 risis. Ind n ent into ap nroducts, aSonal n the ages at risk by 2007 and ose o aIn itnto e ent crisis. mortgages by the n products, t urrently. ose 2c007 to aand wth ent iin nto mortgages imposing t bcy urrently. the g the wth in ose to a operly. imposing mortgages t dctefault filed urrently. g he he fiourth wth n operly. 12 a t 4 51. imposing default filed 2 tfourth he he g t-‐he mortgage operly. 12 at 451. 2 default -‐ the filed he fourth mortgage ercent f 12 at 4o51. nding 2 -‐ the ped 45 of mortgage ercent es in the nding view ped 4o 5 f l process es in the ercent of ers' view of ending dramaScally ped 45 l process as o he es in f tthe ers' enSally eview of at dramaScally of the al as process enSally ers' at dramaScally as of the enSally at nonfarm payrolls expanded at an average annual rate of 7,200 jobs, or 3.6 percent. Job losses began in the second quarter of 2007 and continued through the third quarter of 2010, declining at an average annual rate of 10,400 jobs, or 4.6 percent. The Reno economy has stabilized since then, with total jobs at approximately 189,400 from the fourth quarter of 2010 through the third quarter of 2012. The professional and business services and the leisure and hospitality sectors have added jobs since the recovery began, while job losses primarily in the government and construction sectors offset this growth. The national unemployment rate peaked in October 2009 at 10.0 percent, falling to 7.9 percent by October 2012. The unemployment rate for Reno peaked at 13.3 percent in August 2011 before declining to 11.3 percent by October 2012. Existing home sales in the Reno MSA have improved since 2008 and new home sales are beginning to strengthen. Existing home sales peaked in 2004 at 13,000 units, declined to a low of 4,875 by 2008, but recovered to a rate of 8,175 homes sold by 2011. New home sales peaked in 2006 at 4,550 units, began a steep downward trend in 2007, and have been at historically low levels since 2009, although annualized average sales through September 2012 indicate sales are beginning to strengthen. Sales of bank-owned properties and short sales remain high at 43 percent of existing home sales - nearly double the national rate of 23 percent. The prevalence of distressed sales in Reno has contributed to the prolonged weakness in home prices as well as the low levels of new home construction and sales. The CoreLogic repeat-sales house price index (HPI) shows that the growth in Reno-Sparks home prices between 2000 and mid-2006 was 27 percent greater than the national increase. Investor speculation helped fuel the rise in house prices - home sales to investors averaged 21 percent between 2003 and 2006 - much greater than the 13 percent share for the nation. Home prices in the area fell further from their peak in April 2006 – prices in the Reno MSA were down 44 percent as of May 2009 compared to a national peak-to-low decline of 31 percent. While the rate of decline slowed after 2009, home values in Reno continued to fall by an additional 5 percent from their 2006 peak - although home values have improved in 2012. House prices for the nation have risen slightly since the end of the bubble. Despite weak rent growth, the rental housing market is doing well with vacancy rates falling since 2009. According to MPF Research, the Reno apartment vacancy rate was 4.8 percent in the third quarter of 2012, down from 5.0 percent a year earlier, while the national apartment vacancy rate declined from 5.1 to 4.6 percent. During the third quarter of 2012, the average rent in Reno increased by 1 percent from the previous year to $752. National average rent levels increased by 4 percent to $1,086 during the same period. New and Existing Home Sales: Reno Compared to the Nation Annual Home Sales (thousands) New and Existing Home Sales: Reno Compared to the Nation 16 14 16 12 14 10 16 12 8 14 10 6 12 8 4 10 6 2 8 4 0 6 2 8,000 Annual Home Sales (thousands) New and Existing Home Sales: Reno Compared to the Nation Annual Home Sales (thousands) 2003 2004 2005 2006 2007 2008 4 0 2003 2004 2005 NaSon: ExisSng Sales (right axis) 2 2006 New Sales 2007 (right axis) 2008 NaSon: 2009 2010 2011 2012 7,000 8,000 6,000 7,000 5,000 8,000 6,000 4,000 7,000 5,000 3,000 6,000 4,000 2,000 5,000 3,000 1,000 4,000 2,000 0 3,000 1,000 2,000 0 2009 2010 Sales 2011 Reno 2012 Reno MSA: ExisSng MSA: New 1,000 Sales 0 0 Sources: CoreLogic, Bureau, aNaSon: nd NaSonal Realtors. Reno Home ales EfxisSng or 2012 are esSmated. NaSon: ExisSng HSUD/Census ales (right axis) New ASssociaSon ales (right oaf xis) MsSA: Sales Reno MSA: New Sales 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Sources: CoreLogic, HUD/Census Bureau, and NaSonal AssociaSon of Realtors. Home sales for 2012 are esSmated. NaSon: ExisSng Sales (right axis) NaSon: New Sales (right axis) Reno MSA: ExisSng Sales Reno MSA: New Sales Sources: CoreLogic, HUD/Census Bureau, and Prices NaSonal Declined AssociaSon of Sharply Realtors. Home sales for 2012 are esSmated. Reno Home After Steep Rise Repeat-‐Sales House Price Index (Jan 2000 = 100) Reno Home Prices Declined Sharply After Steep Rise Repeat-‐Sales House Price Index (Jan 2000 = 100) 240 220 240 200 220 180 240 200 160 220 180 140 200 160 120 180 140 100 160 120 80 140 100 Reno Home Prices Declined Sharply After Steep Rise Repeat-‐Sales House Price Index (Jan 2000 = 100) 120 80 100 80 Source: CoreLogic. Reno-‐Sparks MSA HPI Reno MSA NaSon Reno MSA NaSon Reno MSA NaSon Source: CoreLogic. Reno-‐Sparks MSA HPI Source: CoreLogic. Reno-‐Sparks MSA HPI Rental Vacancy Rates Decline Since 2009, Now Comparable to the Nation Quarterly Apartment Rental Vacancy Rates (Percent) 12 10 12 8 10 12 6 8 10 4 6 8 2 4 6 0 2 4 0 2 Rental Vacancy Rates Decline Since 2009, Now Comparable to the Nation Quarterly Apartment Rental Vacancy Rates (Percent) Rental Vacancy Rates Decline Since 2009, Now Comparable to the Nation Quarterly Apartment Rental Vacancy Rates (Percent) Year and Quarter 0 Reno Metro Area Year and Quarter NaSon Reno Metro Area Year and Quarter NaSon Reno Metro Area NaSon Source: MPF Research Source: MPF Research Source: MPF RShare esearch of Distressed Mortgages Higher in Reno an Nation Mortgages 90+ Days Delinquent (Percent of All AcSve Mortgages) Share of Distressed Mortgages Higher in Reno an Nation 14 12 14 Mortgages 90+ Days Delinquent (Percent of All AcSve Mortgages) Share of Distressed Mortgages Higher in Reno an Nation Mortgages 90+ Days Delinquent (Percent of All AcSve Mortgages) Spotlight on Reno-Sparks MSA | Page 2 10 12 enders’ review of h a judicial process ge servicers' s slowed dramaScally of Housing and derwater U.S as of tDepartment he wners potenSally at U.S. Department of the Treasury 10 8 Urban Development 6 4 2 0 Year and Quarter U.S. Department of Housing and Urban | Office PolicyAmerican Development and Research| November 2012 The Obama Administration’s Efforts to Stabilize the Development Housing Market andofHelp Homeowners Reno Metro Area NaSon Source: MPF Research Trends in Mortgage Delinquencies and Foreclosures: Reno homeowners continue to struggle with high rates of mortgage delinquency and foreclosure. According to LPS Applied Analytics, as of September 2012 Reno placed 49th out of 366 metropolitan areas ranked by share of mortgages at risk of foreclosure (90 or more days delinquent or in the foreclosure process). However, the foreclosure situation is improving in Reno. LPS data show that mortgages at risk of foreclosure decreased by 12.9 percent during the last year, from 6,475 in September 2011 to 5,625 in September 2012, compared with a national decline of 6.0 percent during the same period. CoreLogic data since 2000 indicate that the rate of mortgages at risk of foreclosure in the Reno MSA had been below the national rate but rose sharply during the foreclosure crisis. In the first years of the crisis when singlefamily foreclosures were largely associated with unaffordable loan products, mortgages at risk of foreclosure in Reno rose from 0.7 percent to 4.7 percent of active mortgages during 2007 and 2008; the comparable rise for the nation was 1.6 to 4.4 percent. Beginning in 2009, more prime loans went into foreclosure, triggered by loss of income, unemployment, and high negative equity according to research by the Federal Reserve Bank of Chicago. During this time, the share of severely delinquent mortgages in Reno rose to a high of 11.5 percent in mid-2010, but has since declined to 8.7 percent. The rise in severely delinquent mortgages was less steep for the rest of the nation, peaking at 7.9 percent in early 2010 and declining to 6.3 percent currently. Recent changes to laws affecting the foreclosure process by the Nevada legislature have slowed the growth in foreclosures. Effective October 2011, the Nevada law halted future “robo-signing” efforts in the state by imposing strict penalties on banks and lenders found committing foreclosure fraud. As a result, mortgages entering the foreclosure process have declined sharply as banks and lenders ensure that foreclosures are handled properly. According to data provided by the Center for Regional Studies from Ticor Title of Nevada, Inc., notices of default filed in Washoe County declined from 1,682 in the third quarter of 2011 before the new law passed, to 56 in the fourth quarter of 2011 after its passage. Notices of default remain at low levels through the third quarter of 2012 at 451. The new law has also had the effect of extending the foreclosure timeline. As of the third quarter of 2012 - the average year-to-year processing time increased by 42 percent to 520 days. Lenders may foreclosure on a mortgage using a judicial or non-judicial process in Nevada. Foreclosure Completion Rates in the Reno-Sparks MSA Third Quarter 2012 Area Reno-Sparks MSA Nation Foreclosure Completions Foreclosure Rate Since April 1, 2009 Foreclosure Completions Foreclosure Rate 240 0.1% 9,640 5.2% 159,600 0.1% 3,066,900 2.3% Note: Foreclosure Rates as Percent of All Housing Units; Data through October 2012 for Foreclosures since April 2009 Source: Realty Trac and Census Bureau Share of Distressed Mortgages Higher in Reno an Nation Mortgages 90+ Days Delinquent (Percent of All AcSve Mortgages) 14 12 10 8 6 4 2 0 Reno MSA NaSon Source: CoreLogic The new law notwithstanding, the foreclosure completion rate in the Reno MSA since April 2009 is 5.2 percent of housing units, more than double the national rate of 2.3 percent. Foreclosure completions have been trending downward nationally and in the Reno MSA. As of September 2012, completed foreclosures in Reno dropped 45 percent below the previous quarter and 65 percent below the previous year, while completed foreclosures in the nation are down 1 percent from the previous quarter and 18 percent from the previous year. Lenders’ review of internal procedures related to the foreclosure process and backlogs in the courts for states with a judicial process also contributed to the decline in foreclosure activity. In the wake of the February 2012 mortgage servicers’ settlement, foreclosure activity is starting to pick up again, primarily in states where the process slowed dramatically in the last two years. CoreLogic reports that 49 percent of mortgages in the Reno MSA were underwater as of the second quarter of 2012 – compared to 22 percent nationally – representing additional homeowners potentially at risk. The Administration’s Efforts to Stabilize the Reno Housing Market: From the launch of the Administration’s assistance programs in April 2009 through the end of September 2012, nearly 9,700 homeowners received mortgage assistance in the Reno metropolitan area. Nearly 5,400 interventions were completed through the Home Affordable Modification Program (HAMP) and the Federal Housing Administration (FHA) loss mitigation and early delinquency intervention programs. An estimated additional 4,300 proprietary mortgage modifications have been made through HOPE Now Alliance servicers. While some homeowners may have received help from more than one program, the number of times assistance has been provided in the Reno MSA is slightly higher than the number of foreclosures completed during this period (9,600). In addition, it is estimated that over 10,000 Nevada homeowners are currently benefiting from over $900 million in refinancing, short sales and completed or trial loan modifications, including principal reduction on first and second lien mortgages, provided under the landmark National Mortgage Servicing Settlement. Nationwide, the settlement has provided more than $26.1 billion in consumer relief benefits to over 300,000 families. That is in addition to the $2.5 billion in payments to participating states and $1.5 billion in direct payments to borrowers who were foreclosed upon between 2008 and 2011. Together, the Administration’s Neighborhood Stabilization Program (NSP) and Hardest Hit Fund programs, as well as the provisions of the mortgage servicing settlement, are helping to stabilize the Reno housing market. Spotlight on Reno-Sparks MSA | Page 3 U.S Department of Housing and Urban Development U.S. Department of the Treasury Spotlight on the Housing Market in Reno-Sparks, Nevada The Administration’s Efforts to Stabilize the Reno Housing Market: From the launch of the AdministraPon’s assistance programs in April 2009 through the end of September 2012, nearly 9,700 homeowners received mor in the Reno metropolitan area. Nearly 5,400 intervenPons were completed through the Home Affordable ModificaPon Program (HAMP) and the Federa AdministraPon (FHA) loss miPgaPon and early delinquency intervenPon programs. An esPmated addiPonal 4,300 proprietary mortgage modificaPons h through HOPE Now Alliance servicers. While some homeowners may have received help from more than one program, the number of Pmes assistance h provided in the Reno MSA is slightly higher than the number of foreclosures completed during this period (9,600). In addiPon, it is esPmated that over 1 Development | Office of Policy and homeowners are currently benefiPng from over $900 mDevelopment illion in refinancing, short sales Research and completed or trial loan modificaPons, including principal red and second lien mortgages, provided under the landmark NaPonal Mortgage Servicing SeVlement. NaPonwide, the seVlement has provided more than consumer relief benefits to over 300,000 families. That is in addiPon to the $2.5 billion in payments to parPcipaPng states and $1.5 billion in direct paym borrowers who were foreclosed upon between 2008 and 2011. U.S. Department of Housing and Urban The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | November 2012 Given over three rounds, the Neighborhood Stabilization Program has invested $7 billion nationwide to help localities work with non-profits and community development corporations to turn tens of thousands of abandoned and foreclosed homes that lower property values into homeownership opportunities and the affordable rental housing that communities need. NSP1 funds were granted to all states and selected local governments on a formula basis under Division B, Title III of the Housing and Economic Recovery Act (HERA) of 2008; NSP2 funds authorized under the American Recovery and Reinvestment Act (the Recovery Act) of 2009 provided grants to states, local governments, nonprofits and a consortium of nonprofit entities on a competitive basis; and NSP3 funds authorized under the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 provided neighborhood stabilization grants to all states and select governments on a formula basis. In addition to stabilizing neighborhoods and providing affordable housing, NSP funds have helped save jobs. Each home purchased, rehabilitated and sold through the NSP program is the result of the efforts of 35 to 50 local employees. Overall, a total of $29.9 million has been awarded to 3 NSP grantees in the Reno MSA. The City of Reno received $4,818,796 as a sub-award from the State of Nevada’s NSP1 allocation. The Reno Housing Authority received an NSP2 award of $20,995,000. Under NSP3, the City of Reno and Washoe County received a total of $3,709,642. Washoe County also received an NSP3 sub-award from the State of Nevada for $400,000. Approximately 227 households have already benefited from NSP, and activities funded by the program are expected to provide assistance to an additional 109 owner-occupied and renter households. Examples of how these funds have been put to use are provided below. • • The City of Reno received $3,199,941 in NSP1 funds from the state of Nevada to acquire and rehabilitate abandoned or foreclosed homes for resale to qualified households (incomes between 81 and 120 percent of the area median income or AMI). The City received another $1,378,429 from the State to acquire, rehabilitate, and operate a long-term rental project for households with incomes at or below 50 percent of AMI. These funds were then passed through to the City of Reno Housing Authority to carry out the activities. A total of 24 households have already purchased rehabilitated homes and another 11 households are currently renting NSP homes managed by the Reno Housing Authority. The average NSP investment is $130,811 per home. A total of $793,882 has been generated from the sale of the NSP homes and will be used to fund additional projects. Reno Housing Authority’s (RHA) NSP2 program has met with great success. The Reno Housing Authority focused on purchasing vacant and foreclosed properties and rehabilitating them to a high standard by installing xeriscape (drought-tolerant) landscaping, for example. The properties are being rented or sold. Families with incomes under 50 percent of adjusted median income (AMI) qualify for rental properties, and families with incomes between 51 percent and 120 percent of AMI Mortgage Aid Provided Nearly 9,700 Times to Mitigate Rising Foreclosures Reno MSA: CumulaPve Offers of Aid by Source Compared with Foreclosures Since April 1, 2009 (Thousands) Mortgage Aid Extended in Reno MSA from April 2009 through September 2012: 9,700 Foreclosure ComplePons Over Same Period: 9,600 12 10 8 6 4 2 0 FHA Loss MiPgaPon HAMP Permanent ModificaPons EsPmated Hope Now ModificaPons Foreclosure ComplePons Note: Data on HOPE Now proprietary mortgage modificaPons are not available at the metropolitan area level. However, HOPE Now Alliance reports 38,500 non-‐HAMP modificaPons since April 1, 2009 in Nevada of which 11 percent are esPmated by HUD to have occurred in the Reno MSA. This chart excludes HAMP trial modificaPons not made permanent. Sources: Departments of HUD and Treasury, HOPE Now Alliance, and Realty Trac. Reno MSA NSP Activity (Housing Units) NSP1 Total Homeownership assistance to low-and moderate income Projected Completed 107 108 32 42 Reno received $3,19 Rehabilitation/reconstruction of residential structures 75 • The City of 66 Together, the AdministraPon’s Neighborhood StabilizaPon Program (NSP) and Hardest Hit Fund programs, as abandoned or foreclosed homes f well aNSP2 s the provisions median income or AM Total of the mortgage servicing seVlement, are helping to stabilize the Reno housing market. 200 of the area 119 rehabilitate, and operate a long-‐te assistanceStabilizaJon to low-and moderate income Given over tHomeownership hree rounds, the Neighborhood Program has invested $7 billion naPonwide to help 137 AMI. These f33 unds were then passe localiPes work with non-‐profits and community development corporaPons to turn tens of thousands of acPviPes. A total of 24 household of residential 63 households 86 abandoned aRehabilitation/reconstruction nd foreclosed homes that lower property values into hstructures omeownership opportuniPes and the are currently renPng N affordable rental housing that communiPes need. investment is $130,811 per home NSP3 Total 29 homes and will 0be used to fund ad NSP1 funds were granted to all states and selected local governments on a formula basis under Division B, Title Clearance and demolition 5 0 III of the Housing and Economic Recovery Act (HERA) of 2008; NSP2 funds authorized under the American • Reno Housing Authority’s (RHA Recovery and Reinvestment A (the Rhousing ecovery Act) of 2009 provided grants to states, local governments, vacant and Construction ofct new 14 focused on purchasing 0 nonprofits and a consorPum of nonprofit enPPes on a compePPve basis; and NSP3 funds authorized under the installing xeriscape (drought-‐toler Dodd–Frank Rehabilitation/reconstruction Wall Street Reform and Consumer ProtecPon Act of 2010 provided neighborhood stabilizaPon of residential structures 10 Families with i0ncomes under 50 p grants to all states and select governments on a formula basis. and families with incomes betwee program a sale program. To da Notes: The number of households assisted under NSP1 exceeds the grantee’s projection, as costs were loweror than In addiPon to stabilizing neighborhoods and providing ffordable hRehabilitated ousing, NSP funds ave jobs. Each aside as rental units, 62 o anticipated allowing more households to beaassisted. unitshave thathelped were scompleted under been NSP2set are home p urchased, r ehabilitated a nd s old t hrough t he N SP p rogram i s t he r esult o f t he e fforts o f 3 5 t o 5 0 l ocal for d irect s ale, higher than projected because some renters of these homes are expected to purchase their unit and will eventually32 of which have b employees. program, 24 of which have been l be included in the homeownership assistance category. rehabilitaPon or are available to b Overall, a total o f $ 29.9 m illion h as b een a warded t o 3 N SP g rantees i n t he R eno M SA. T he C ity o f R eno r eceived grant, with all expenditures from qualify for either a lease-to-own program or a sale program. To date, RHA $4,818,796 as a sub-‐award from the State of Nevada’s NSP1 allocaPon. The Reno Housing Authority received an purchased homes. Sixty-three of these properties have been NSP2 award ohas f $20,995,000. Under N140 SP3, the City of Reno and Washoe County received a total of $3,709,642. set Washoe County also received an NSP3 sub-‐award he State oare f Nevada for $400,000. Forty-five Approximately aside as rental units, 62from of twhich occupied. of227 these properties households have already benefited from NSP, and acPviPes funded by the program are expected to provide been aside forand direct 32 Examples of which have been sold. assistance to have an addiPonal 109 set owner-‐occupied renter hsale, ouseholds. of how these funds have been Thirty-two put to use are below. homes ofprovided the 140 are part of the lease-to-own program, 24 of which have been leased with one sold. Those not yet occupied are either undergoing rehabilitation or are available to be rented, sold, or leased. RHA has expended 100 percent of the NSP2 grant, with all expenditures from the grant required by February 2013. The Nevada Affordable Housing Assistance Corporation (NAHAC) oversees the Projected inCompleted Nevada Hardest Hit Fund®, which was launched February 2011 and funded 107 108 through a $194 million allocation from the Administration’s Hardest Hit Fund 32 42 75 66 as a support arm program. NAHAC was selected to oversee the ‘Fund’ serving 200 119 for the Nevada Housing Division, Nevada’s Housing 137 Finance 33 Agency. Nevada 63 Nevada 86 homeowners Hardest Hit Fund provides several programs to assist 29 0 who are at high risk of default or foreclosure. These5 programs 0 include: Principal 14 0 Reduction Program, Second Mortgage Reduction Plan, Short-Sale Acceleration 10 0 Program, and Mortgage Assistance Program (unemployment and reinstatement Notes: Tassistance). he number of households assisted under NSP1 exceeds the grantee's projection, of as costs were lower than Nevada provides nine months unemployment assistance to qualified anticipated allowing more households to be assisted. Rehabilitated units that were completed under NSP2 are higher than borrowers; they also up to $16,500 thebe removal projected because some renters of these homes provide are expected to purchase their unit and will efor ventually included in the of 2nd liens, and homeownership assistance category. $50,000 for unmatched principal curtailment in conjunction with a HARP loan refinance. The number of homeowners benefitting from the program has continued to increase due to strong demand, and the state expects to commit all of their funds on behalf of families in the near term – well before the program end date of 2017. For more information see: http://nevadahardesthitfund.nv.gov. Reno MSA NSP Activity (Housing Units) NSP1 Total Homeownership assistance to low-‐and moderate income Rehabilitation/reconstruction of residential structures NSP2 Total Homeownership assistance to low-‐and moderate income Rehabilitation/reconstruction of residential structures NSP3 Total Clearance and demolition Construction of new housing Rehabilitation/reconstruction of residential structures Spotlight on Reno-Sparks MSA | Page 4
@FedFRASER