Transcript Slide 1
Federal Home Loan Bank of Indianapolis
Funding Opportunities
FHLBI grant programs at work • Rental housing development • Homeownership rehabilitation grants • Downpayment assistance grants
FHLBI Programs • Affordable Housing Program • Homeownership Initiatives – HOP – NIP • Community Investment Program
Support Living
Senior Housing
Downpayment assistance for first-time homebuyers
Temporary shelter for victimized children
New medical Facility Saginaw
220 Indiana members
Flow of information and funds Important partner
FHLBI’s Contribution • Homeownership – Downpayment/closing cost assistance – Rehab dollars • Rental – Development/construction/rehab assistance
Contribution Allocation (10% of net income) AHP Contribution - 10% of net income Net income
Affordable Housing Program (AHP) • Direct subsidy for acquisition, construction or rehab of affordable housing • Eligible Uses – Land acquisition – Construction subsidy for single family homes – Rehabilitation costs on multifamily or single-family rental units – Downpayment and closing cost assistance to low-mod buyers – Soft costs - developer fees, construction interest, environmental assessments, other pre-development costs
Affordable Housing Program (AHP) • Maximum grant $500,000 per project • Competitive application process • Two funding rounds per year – Spring round announcements in June – Fall round to open during August 2005
Retention and monitoring • Retention commitments – 5 years homeownership – 15 years rental • Monitoring requirements – Semi-annual reporting – Long term reporting for rental projects
Allocation Process • Applications are scored – Read 2005 Implementation Plan • Changes to be published in June • Complete detailed application with member financial institution • Applications must demonstrate “readiness”
Development Budget without Soft Dollars Equity Bank Loan Total
Sources For 11 apartment units
$ 50,000 970,500 $ 1,020,500
Uses
Land $ 37,500 Pre-Development Construction 36,000 775,000 Developer Fee Loan and other fees 100,000 72,000 Total $ 1,020,500
Loan payments: $970,500 @ 7.5% for 15 yrs =
$9,000 per month or $108,000 per year
Rents withOUT soft dollars 1 bedroom 2 bedroom $650 $735 3 bedroom $755 4 bedroom $1,000
Development Budget with Soft Dollars Equity
AHP
HOME Bank Loan Total
Sources For 11 apartment units
$ 50,000
300,000
420,000 250,500 $ 1,020,500
Uses
Land $ 37,500 Pre-Development 36,000 Construction Developer Fee 775,000 100,000 Loan and other fees Total 72,000 $ 1,020,500
Loan payments: $250,500 @ 7.5% for 15 yrs =
$2,300 per month or $28,000 per year
Rents with soft dollars 1 bedroom 2 bedroom 3 bedroom 4 bedroom $229 $435 $600 $850
Contribution Allocation (35% of AHP) Homeownership Initatives Allocation AHP Allocation
Homeownership Opportunities Program (HOP) • $5,000 maximum grant • Downpayment/closing cost assistance • 3 to 1 match • $500 cash contribution from homeowner • Other grants/funds can be matched including member home equity loans
HOP • •
Express
– $1.0 million available in 2005 – First-come, first-served basis • $700,000 released in spring (exhausted) • $300,000 released in fall
Reserve
– Approximately $1.6 million awarded on March 1 – Member has 1 year to exhaust award
Single Parent – 2 Children Single Parent with 2 Children Family of 4 with Stay-home Mom $3,250 from paralegal job and child support ▪ $1,300/month for housing Needs 3-bedroom house; only has $2,500 to put towards house
Single Family Purchase - Without Subsidies
$1,300/month Mortgage Monthly $
Sale Price Downpayment Total Mortgage $130,000 (6,500) $123,500 Monthly payment $ 780 Taxes & insurance
Affordable!
Total payment 130 $910 Downpayment
Total up-front costs
$6,500 3,000
$9,500
Single-Family Purchase - With Subsidies
Closing funds
Downpayment Closing costs Total Homebuyer funds FHLBI grant HOME grant Total 6,500 3,000 9,500 (2,500) (5,000) (2,500) 10,000
$2,500
Neighborhood Impact Program (NIP) • Owner-occupied rehabilitation assistance for
existing
homeowners • 3 to1 match • Other grants/funds can be matched • Cash contribution not required
NIP best practice • Qualifies household • Counseling • Oversees rehab work • Makes payments • Provides fund from net income • Provides grant to homeowner through nonprofit
NIP • •
Express
– $500,000 total available – For emergency-type repairs – First-come, first-served basis • $300,000 released in spring (exhausted) • $200,000 released in fall
Reserve
– $1.3 million awarded on March 1 (includes carryovers) – $15,000 max. per home – Home must be in targeted area – Member has 1 year to exhaust award
Common Uses of NIP • Small scale projects • New roof or repairs • Modifications for disabled individuals – Ramps – Grab bars • Furnaces • Siding, gutters, soffit and facia • Windows
What is Community Economic Development?
The process by which local people build organizations and partnerships that interconnect profitable business with other interests and values - for example, skills and education, health, housing and the environment.
Government or nonprofit initiatives Business development and expansion Retail/commercial development Housing development
Community Investment Program (CIP) • Below market rate loans for community economic development in low-income areas • Longer terms available than with traditional financing • Member mitigates interest rate risk on long term deals
FHLBI Advance Rates Advance Information as of 4/18/05
Regular
Advances Term Rate 1 yr.
5 yr.
3.75
4.49
7 yr.
4.68
10 yr.
4.89
No terms beyond 10 yrs.
CIP
Advances Term Rate 1 yr.
5 yr.
7 yr.
10 yr.
15 yr.
20 yr.
3.49
4.23
4.41
4.63
4.90
5.01
How it Works
Long term – up to 20 years/30 year amortization Low rate Determined by member based on credit quality Project benefits from attractive financing package
CIP Examples • Commercial real estate financing • Multifamily housing 1 st mortgage financing • Small business – Real estate purchase – Equipment • Public facilities • Medical facilities – New construction or expansion
The Community Benefits
Housing
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