Transcript Document

Affordable Housing Program
Overview
p r e s e n t e d b y:
Bruce Hatton
Highlights: Competitive Grants
• Fund the development of affordable single-family and rental
housing through direct grants of up to $500,000.
• The Bank contributes 10 percent of net income annually and
offers one application round.
• In 2011, 53 applications were approved for $11 million in AHP
grants. 146 applications were submitted requesting $35 million
in AHP grants.
AHP in 2011 & 2012
• One competitive funding round in 2012. Applications for 2011
were due on April 15, 2011.
• The AHP round schedule is designed to coincide with the
availability of affordable housing resources within the 5 state
district.
• Funding of SNAP and HELP for 2011 was $2,100,000 and
$1,700,000, respectively for each program.
AHP Produces Housing
Total Approved Projects
1990-2010
Units
38,394
AHP Grants
HELP Grants
SNAP Grants
$190.8 million
$10.6 million
$2.9 million
AHP Single-Family Results
Single-Family Projects
1990-2010
Units
17,892
AHP Grants
$87 million
HELP Grants
$10.6 million
SNAP Grants
$2.9 million
AHP Multifamily Results
Multifamily Projects
1990-2010
Units
20,502
AHP Grants
$103.8 million
Uses of Funds
• Acquisition
– Down Payment
– Closing Cost
• Construction
• Rehabilitation
• Counseling
Eligibility Requirements
• Sponsor capacity:
Document experience and manpower to meet objectives outlined
in project description – include resumes and organizational bios;
previous projects, AHP track record, etc.
• Evidence of Demand:
Support documentation that will provide evidence your project
location has a need for this type of housing and this type of
family/tenant (i.e. Market Study, Appraisal, City Consolidated Plan).
• Site Control/Zoning:
Evidence of site control and proper zoning must be provided in the
application. Zoning issues must be resolved and submitted to the
Bank for review by May 31, 2012.
Single-Family Feasibility
Criteria
Income Targeting
Subsidy Pass-through
Ranges/Limits
Less than 80% of AMI.
Clearly demonstrated to
homebuyer.
Interest Rates, Fees,
Points, and Other Finance
Costs
Developer Fee
Not to Exceed Market
Rate.
Cash Back
Not to Exceed 15% of TDC.
Cash Bank to Homebuyer
at Closing is NOT Allowed.
Single-Family Project
Harrison, Arkansas
Northwest Regional Housing Authority of Harrison received AHP grant funding to build single-family
houses for qualified, low-income, first-time homebuyers in Harrison, Arkansas.
Single-Family Project
Sources of Funding for pictured home in Harrison, Arkansas:
• USDA 502 Direct Loan for $94,500 - loans are used to help lowincome individuals or households purchase homes in rural areas.
• Awarded a $4,500 AHP grant from FHLB Dallas.
Multifamily Feasibility
Criteria
Targeting
Debt Service Ratio
Vacancy Ratio
Replacement Reserves
Operating Expenses
Escalators – Income Expense
Ranges/Limits
At least 20% of the units must be
targeted to <50% of AMI.
1.05 - 1.35
Less than or equal to 7.5% (up to
10% for special needs).
- Elderly new construction.
$250/unit/year.
- New construction $300/unit/year.
Less than $4,000/unit/year.
- 1-3%
- 2-4%
Multifamily Feasibility
Criteria
Management Fee
Tax Credit Price
Soft Construction Cost
Hard Cost Contingency
Developers Fee
Rents
Interest Rates, Fees, Points
Ranges/Limits
No more than 10% Gross Income
Greater than or equal to $0.60.
Not to exceed 30% of TDC.
Not to exceed 10% new/15% rehab.
Not to exceed 15% of TDC.
Not to exceed 30% of AMI.
Not to exceed market rate.
General Requirements, Builder
Overhead and Builder Profit.
14% of Total Construction Cost
Multifamily Development
Austin, Texas
An AHP grant assisted in the construction of The Willows, a 64-unit, housing project in Austin, TX. The project assists
individuals with disabilities.
Multifamily Development
• The Willows was awarded a $500,000 AHP grant.
• The sponsor, Mary Lee Community of Austin received $2,250,000
from Austin Housing Finance, $1,300,000 from Frost Bank and
$380,000 from Private Foundations.
• These funds were used for the development of housing to serve
persons with physical disabilities.
• The project was completed in August 2010.
Multifamily Development
City, State
Wilson Court II
Multifamily Development
• Wilson Court 2 was awarded a $154,000 AHP grant.
• The sponsor, Easter Seals of Little Rock received $1,216,931
in HUD funds for a section 811 project. These funds were used for
the development of housing to serve persons with mental or
physical disabilities.
• The project was completed in February 2009.
Scoring for 2011
5 Points
5 Points
25 Points
5 Points
5 Points
20 Points
5 Points
15 Points
15 Points
100 Points
Donated Property
Not-for-profit Sponsorship
Income Groups Targeted*
Homeless Housing
Empowerment Programs/Services
First District Priority*
Second District Priority
Effective Use of Funds*
Community Stability*
*See Separate Slide
2011 First District Priority
First-Time Homebuyer – 5 points (Variable)
Special Needs – 5 points (Variable)
Economic Diversity – 5 points (Fixed)
Within District – 5 points (Variable)
2011 Community Stability
Adaptive Reuse – 5 points
Rehabilitating Properties – 5 points
Demolition of Properties – 5 points
100% New Construction – 5 points
Preservation of Affordable Housing – 5 points
Community Stability
Projects can receive five (5) points for each of the following activities
not to exceed a total of ten (10) points:
• Rehabilitating or converting an existing non-housing structure
into housing (adaptive reuse).
• Rehabilitating at least 20% of the units in the project which are
vacant, abandoned or foreclosed properties (not including
vacant land) resulting in those properties meeting or exceeding
local building codes or the International Code Council (ICC)
standards.
• Demolishing at least 20% of the units in the project which are
vacant, abandoned, or foreclosed properties (not including
vacant land) and rebuilding with new construction.
• 100% new construction.
Community Stability (continued))
Projects will receive five (5) points if:
1) The project will, within two years after the AHP application
deadline, face expiring HUD Section 8 project-based rental
assistance contracts, reach the end of a tax credit compliance
period, or face expiring USDA-RD 515 rental assistance
contracts; AND
2) The project commits to preserve ALL of the affordable rental
units after the expiration of such contract or the end of the tax
credit compliance period.
2011 Income Targeting
Sliding Scale based upon income groups targeted.
< 50% - number of units *5
50%-60% - number of units *3
60%-80% - number of units *1
(Sum of Above)/Total # units/5 *25
Rental Projects – If at least 60% of units are targeted to
< 50%, receive 25 points; otherwise, the formula above is
applied.
2011 Effective Use of Funds
Sliding Scale based upon amount of AHP money requested
per unit.
• $7,000 or less – 15 points (maximum)
• $7,001 - $8,000 – 14 points
For every additional $1,000 requested per unit, the score
declines by 1 point.
Deed Restrictions
ALL AHP Grants are subject to a deed restriction:
• Owner projects for 5 years
• Rental projects for 15 years
Application
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Application is available on fhlb.com.
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Submit your application early to the member institution.
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Member approval is required by the deadline.
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Supporting documents must be sent to the FHLB within
five business days of the application submission.
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Get to know your FHLB contact!
Questions?
Homebuyer Equity
Leverage Partnership
(HELP)
Eligibility Requirements
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$1,700,000 was available for 2011.
Maximum grants per member capped at $68,000.
First-come, first-served.
Must be first-time homebuyer.
Area Median Income 80% or less.
Homebuyer contribution - $500, grant is provided up to
$5,000.
If Member contributes an additional $350, the maximum
grant increases from $5,000 to $7,000.
Homebuyer education required.
Special Needs Assistance
Program (SNAP)
What is SNAP?
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Owner-occupied rehabilitation program that targets
households with a special needs member in it.
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Rehabilitation or modification must be necessary for
structural and/or safety reasons. This is NOT a home
improvement program.
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Proper due diligence has to be performed to ensure that the
repair/modification is necessary and that the cost is
reasonable.
Eligibility Requirements
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$2,100,000 was available for 2011.
Maximum grants per member capped at $126,000.
First-come, first-served.
Must have a special needs household member.
Area Median Income 80% or less.
No Homeowner contribution, rehabilitation assistance up
to $5,000.
If Member contributes $350, maximum grant increases
from $5,000 to $7,000.
Partnership Grant Program
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Matching grant program with $225,000 available for the
year 2011
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Applications were accepted from August 1 through
August 5, 2011
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Nonprofit organization
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Revenue of $500,000 or less
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Member financial contribution from $500 up to $5,000
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Multiple member contributions allowed
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Bank match 3:1
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Selections made by lottery
Questions?
Community Investment Program
Community Investment Program (CIP)
The Bank’s program designed to support the financing of
affordable single and multifamily housing properties.
Community Investment Program (CIP)
• Favorably priced advances to increase single and multifamily
housing for individuals and families.
• Permanent financing for the purchase, construction or
rehabilitation of single and multifamily housing.
• No pre-set funding limit and may be used with AHP grants.
• Non-competitive year-round funding.
• Individual income qualification (115% or less of AMI).
• Individual income 115% or less of AMI
• 51% of tenants make at or below 115% of AMI
• Maximum spreads:
- 300 basis points for owner-occupied housing projects
- 400 basis points for rental development
Community Investment Program
• Advance terms from 91 days to 30 years:
- Fixed or Variable Rate
- Amortizing or Interest Only
- Amortizing w/ Balloons
- Pre-payable Options
• Quick response – commitment approval within 24 hours
• TVF required within 30 days of funding
• Member may fund the lesser of 15% of total assets or
$200MM in CIP/EDP/DRP Advance Programs
• Currently offer a free 3-Month Rate Lock
CIP Advance
• $925K CIP advance with a 30yr
amortization/15yr balloon structure.
• Member funded a tax credit multifamily
project.
• New construction of 35 single-family homes.
• FHLB able to qualify the project by its tax
credit status.
• All 35 homes will be rented to residents at or
below 80% of the AMI.
Letters of Credit & Confirmations
Letters of Credit and LOC Confirmations facilitate:
• Residential housing finance
• Community lending eligible for CIP/EDP projects
• Collateralize public unit deposits
Letters of Credit - utilized as an alternative to purchasing securities to insure PUDs
Letter of Credit Confirmations - utilized as credit support for taxable bonds; and as credit
support for tax-exempt bonds where Section 149 of the IRC specifically authorizes a debt
instrument to be federally guaranteed while maintaining its tax-exempt status
• Bank’s LOCs are AAA/Aaa-rated by Moody and S&P
• Terms from 1 day up to 10 years
• If eligible for CIP pricing:
- Letters of Credit range from 8-14 basis points
- Confirmations range from 20-30 basis points and an upfront
fee ranging from $1,500 to $5,000
Dollars Invested in Your State
Program Activity (06/30/2011)
CIP/EDP
Jobs
(millions)
Housing
Units
EDPPlus
Grants
No. of
Projects
Arkansas
$ 94.3
170
1,721
$ 351,061
18
Louisiana
$ 28.4
123
297
$ 100,000
4
Mississippi
$ 31.9
178
405
$
80,070
4
New Mexico
$ 95.4
0
748
$
25,000
1
Texas
$ 192.1
2,172
3,930
$
25,000
1
Total
$ 442.1
2,643
7,101
$ 583,131
Adv/LOCs
28
Economic Development Program (EDP)
• Favorably priced advances for economic development or
revitalization projects in income-qualified communities.
• Permanent financing of purchases, construction, renovation,
capital improvement and historic preservation.
• Non-competitive year-round funding.
• No pre-set funding limit, may be used with EDPPlus grant.
• Up to 400 basis points markup.
Economic Development
Plus
Plus
Program (EDP )
About EDPPlus
• Grants to small businesses in underserved areas that promote
economic development and create or retain jobs.
• Permanent financing for start-up, expansion or acquisition.
• The EDPPlus grant must be used in conjunction with an EDP
advance; recipient contributes at least 15% equity of the total
EDP advance amount.
• EDPPlus grant is up to 15% or $25,000 (whichever is less) of total
EDP advance amount.
• Member institutions eligible for up to $100,000 in EDPPlus grants
annually.
Small Business – EDPPlus
• Member had a local small business
client in Youngsville, LA that wanted to
open a new pharmacy
• The small business needed the funds
primarily for working capital, advertising
costs and equipment
• Member qualified for a $110M EDP
advance and an EDPPlus grant of $16.5M
• Project qualified because 51% of the
employee household incomes were at
or below 80% AMI
• The project allowed the business to
create 2 jobs
Questions?
For More Information
Contacts:
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AHP: Steven Matkovich
AHP: Mark Loya - MS
AHP Department
CIP: Michelle Purnell
Member Sales
214.441.8774
214.441.8636
800.362.2944
214.441.8619
800.422.9841
fhlb.com/community