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Affordable Housing Program Overview

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.

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Affordable Housing Program Overview

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  1. Affordable Housing Program Overview p r e s e n t e d b y: Bruce Hatton

  2. 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.

  3. 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.

  4. AHP Produces Housing Total Approved Projects Units AHP Grants HELP Grants SNAP Grants 1990-2010 38,394 $190.8 million $10.6 million $2.9 million

  5. AHP Single-Family Results Single-Family Projects Units AHP Grants HELP Grants SNAP Grants 1990-2010 17,892 $87 million $10.6 million $2.9 million

  6. AHP Multifamily Results Multifamily Projects Units AHP Grants 1990-2010 20,502 $103.8 million

  7. Uses of Funds • Acquisition • Down Payment • Closing Cost • Construction • Rehabilitation • Counseling

  8. 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.

  9. Single-FamilyFeasibility

  10. 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.

  11. Single-Family Project • Sources of Funding for pictured home in Harrison, Arkansas: • USDA 502 Direct Loan for $94,500 - loans are used to help low- • income individuals or households purchase homes in rural areas. • Awarded a $4,500 AHP grant from FHLB Dallas.

  12. Multifamily Feasibility

  13. Multifamily Feasibility

  14. 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.

  15. 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.

  16. Multifamily Development City, State Wilson Court II

  17. 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.

  18. Scoring for 2011 5 Points Donated Property 5 Points Not-for-profit Sponsorship 25 Points Income Groups Targeted* 5 Points Homeless Housing 5 Points Empowerment Programs/Services 20 Points First District Priority* 5 Points Second District Priority 15 Points Effective Use of Funds* 15 Points Community Stability* 100 Points *See Separate Slide

  19. 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)

  20. 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

  21. 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.

  22. Community Stability (continued)) • Projects will receive five (5) points if: • 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 • 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.

  23. 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.

  24. 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.

  25. Deed Restrictions • ALL AHP Grants are subject to a deed restriction: • Owner projects for 5 years • Rental projects for 15 years

  26. Application • Application is available on fhlb.com. • Submit your application early to the member institution. • Member approval is required by the deadline. • Supporting documents must be sent to the FHLB within five business days of the application submission. • Get to know your FHLB contact!

  27. Questions?

  28. Homebuyer Equity Leverage Partnership (HELP)

  29. Eligibility Requirements • $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.

  30. Special Needs Assistance Program (SNAP)

  31. What is SNAP? • Owner-occupied rehabilitation program that targets households with a special needs member in it. • Rehabilitation or modification must be necessary for structural and/or safety reasons. This is NOT a home improvement program. • Proper due diligence has to be performed to ensure that the repair/modification is necessary and that the cost is reasonable.

  32. Eligibility Requirements • $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.

  33. Partnership Grant Program • Matching grant program with $225,000 available for the year 2011 • Applications were accepted from August 1 through August 5, 2011 • Nonprofit organization • Revenue of $500,000 or less • Member financial contribution from $500 up to $5,000 • Multiple member contributions allowed • Bank match 3:1 • Selections made by lottery

  34. Questions?

  35. Community Investment Program Community Investment Program (CIP) The Bank’s program designed to support the financing of affordable single and multifamily housing properties.

  36. 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

  37. 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

  38. 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.

  39. 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

  40. Dollars Invested in Your State Program Activity (06/30/2011)

  41. 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.

  42. Economic Development ProgramPlus (EDPPlus)

  43. 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.

  44. 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 EDPPlusgrant 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

  45. Questions?

  46. For More Information • Contacts: • AHP: Steven Matkovich 214.441.8774 • AHP: Mark Loya - MS 214.441.8636 • AHP Department 800.362.2944 • CIP: Michelle Purnell 214.441.8619 • Member Sales 800.422.9841 fhlb.com/community

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