Presented to Minnesota Housing Programs Relocation Aid April 21, 2006

Presented to

Minnesota Housing Programs

Relocation Aid

April 21, 2006

2

We are committed to meeting Minnesotans’ needs for

decent, safe, affordable homes and stronger communities

Minnesota Housing’s Mission

3

• End Long-Term Homelessness

• Increase Minority Homeownership

• Preserve Strategically The Existing Affordable Housing Stock

• Provide Housing Choices For Low And Moderate Income Workers

• Housing Partner Of Choice

Minnesota Housing’s Strategic Goals

4

Today’s Multifamily Agenda

• Three Goals:» Agency Introduction» Long-term tools:

▪ Case Study

▪ Capital Resources

» Short-term tools:▪ Rental Assistance Resources

5

Housing Assistance, 10/04 - 9/05

• Single Family» $398.8 million in assistance to over 16,400

homeowners and homebuyers.

• Multifamily» $238.5 million to over 41,500 units of

affordable rental housing.» Contact staff to determine affordable rental

housing available in your area.

6

Case Study – Agency Financed

• New San Marco Apartments» 70 SRO/Efficiency units, New Construction» City of Duluth» Affordable to residents at 30% AMI» 36 Long-term homeless units» 40 Section 8 PBV units» 30 GRH units» Targeting homeless with disabilities

7

New San Marco - Site

8

Case Study – New San Marco

• Multi-year process:» Planning» Application» Selection» Underwriting » Construction» Occupancy

9

Case Study – New San Marco

• Financing – TDC, $9.2 Million» $5.96 million – Tax Credit Equity ($650,000)» $1.65 million – Minnesota Housing » $500,000 – Federal Home Loan Bank» $400,000 – HUD» $300,000 – Greater MN Housing Fund» $250,000 – City of Duluth (HOME, HIF)» $170,000 – MN Green & Owner Equity

10

Multifamily Resources

• Annual Request for Proposals (RFP)» Capital Resources» Rental Assistance» Operating Subsidy

• 2006 RFP» Published, April 24» Applications deadline, June 20

11

2006 RFP Timeline

• April 24, 2006 – RFP Published.

• May 10, 2006 – RFP Training.» Earle Brown Center, Brooklyn Center

• June 20, 2006 – RFP Deadline.

• October 26, 2006 – Board Selection.

12

Multifamily Resources – 2006 RFP

• State Resources» Approximately $80,000,000

• Funding Partner Resources» Approximately $5,000,000

• Housing Tax Credits» Approximately $10,000,000

13

Multifamily Resources – 2006 RFP

• Funding Partners» Family Housing Fund» Greater MN Housing Fund» Met Council» Green Communities Initiative

• Collaborating Partners» Hennepin County» Ramsey County» City of Minneapolis» City of St. Paul

• Coordinating Partners» Federal (HUD & USDA Rural Dev.) » State (DHS, DEED)

14

Multifamily Resources – 2006 RFP

• Minnesota Housing Funding Programs» Housing Trust Fund

▪ Deferred Loan

▪ Capital, Operating Subsidy & Rental Assistance

▪ 70% targeted toward LTH proposals.

» Ending Long-Term Homeless Initiative Fund▪ Deferred Loan

▪ Capital, Operating Subsidy & Rental Assistance

▪ Targets LTH proposals.

15

Multifamily Resources – 2006 RFP

• Funding Programs Continued:» Publicly Owned Permanent Supportive

Housing Program▪ Forgivable Loan, Capital

▪ Public ownership requirement

▪ LTH requirement

» Economic Development Housing Challenge▪ Deferred Loan, Capital

▪ Workforce housing proposals

▪ American Indian set-aside

16

Multifamily Resources – 2006 RFP

• Funding Programs Continued:» Preservation of Affordable Housing Investment

Fund▪ 1st Mortgage or deferred, Capital

▪ Preservation – Acquisition, rehab or debt restructuring of developments with Project Based Federal assistance and supportive housing developments.

» Economic Development Housing Challenge▪ Deferred Loan, Capital

▪ Workforce housing proposals

▪ American Indian set-aside

17

Multifamily Resources – 2006 RFP

• Funding Programs Continued:» Low and Moderate Income Rental Program

▪ 1st Mortgage, Capital

▪ Acquisition, rehab and new construction

» Flexible Financing for Capital Costs▪ Deferred loan – in conjunction with 1st mortgage

▪ Acquisition, rehab and new construction

18

Multifamily Resources – 2006 RFP

• Funding Programs Continued:» Housing Tax Credits

▪ Housing Program under IRS rules

▪ Eligible acquisition, rehab and new construction expenses

▪ Two competitive rounds per year

19

Rental Assistance Resources

• Rental Assistance» Housing Opportunities for Persons w/ AIDS

▪ Short-term Rent, utility and mortgage assistance

» ELHIF – LTH specific▪ Available through the RFP or local administrators

» Bridges – SPMI specific▪ Minnesota Housing partners with DHS

» Local Administrators (ELHIF & HTF)▪ Each program is unique

▪ 21 program administrators statewide► Contact list available on website

20

Rental Assistance Resources

• Rental Assistance» Minnesota Housing Contact:

▪ Kim Lieberman, Program Manager► 651-296-9841► Kim.Lieberman@state.mn.us

21

Rent Assistance Resources

• Rent Assistance Brochure» www.mhfa.state.mn.us/multifamily/RA_Brochure.pdf

• HTF & ELHIF Rent Assistance Program Info.» www.mhfa.state.mn.us/multifamily/HTF.htm

• HTF & ELHIF Rent Assistance Program Administrators» www.mhfa.state.mn.us/multifamily/HTFRA_ELHIF_Contacts.pdf

• Bridges Program Administrators» www.mhfa.state.mn.us/multifamily/BRIDGES%20Contacts.pdf

• Bridges Program Information» www.mhfa.state.mn.us/multifamily/bridges.htm

• Family Homeless Prevention and Assistance» www.mhfa.state.mn.us/multifamily/FHPAP.htm

22

Multifamily Resources

• Multifamily Housing» www.mhfa.state.mn.us/multifamily/_home.htm

• Consolidated RFP Guide» www.mhfa.state.mn.us/multifamily/MF_Application_Guide.pdf

• Housing Tax Credits» www.mhfa.state.mn.us/multifamily/Multifamily_Tax.htm

• Long Term Homeless Business Plan» www.mhfa.state.mn.us/multifamily/LTH.htm

• Program Guides» www.mhfa.state.mn.us/managers/Program_Guidelines.htm

23

For More Information Contact

Ken Doresky

651-284-3177

Ken.Doresky@state.mn.us

400 Sibley Street, Suite 300

St. Paul, MN 55101

651-296-7608 * 800-657-3769 * TTY 651-297-2361

www.mhfa.state.mn.us

Presented to

Single-Family Homeownership and Home Improvement Programs

April 21, 2006

25

Supporting Successful Home Ownership

Education & Outreach

Pre-PurchaseCounseling

Affordable Financing: Loans

Post-Purchase Support

Default and Foreclosure Counseling & Assistance

Before-Purchase

Purchase

After-Purchase

26

Homebuyer Education

Homestretch Curriculum• Advantages vs. disadvantages of homeownership• Mortgage industry terms• Overview of loan application process• Evaluation of credit picture and barriers• Shopping for a home• Home Inspections• Loan closings & forms• Post-purchase responsibilities

27

First Mortgage Programs

Minnesota Mortgage Program (MMP)• Below market interest rate• $3,000 in entry-cost assistance available• Available statewide from participating lenders

Community Activity Set Aside (CASA)• Below market interest rate• $3,000 in entry-cost assistance available• Monthly payment assistance ($75, $50, $25)• Option of a 40– year term mortgage• Partnerships apply for the program

28

Borrower Eligibility RequirementIncome Limits: MMP and CASA

• 11 County Twin Cities Metro Area contains: Anoka, Carver, Chicago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington and Wright Counties

• These limits are based on data supplied by the US Department of Housing and Urban Development (HUD)

Household Size 11-County Twin Cities Metro Area

Olmsted County Balance of State

1 – 4 $63,000 $57,000 $55,000

5 $68,500 $62,000 $59,500

6 $73,500 $66,500 $64,000

7 $78,500 $71,000 $68,500

8 $83,500 $75,500 $73,000

29

Borrower Eligibility Requirement– House Price Limits

For MMP and CASA

Area New and Existing Residences

11 County Twin Cities Metro Area $298,125

Balance of State $237,031

30

Borrower Eligibility Requirement First-time Homebuyer

• Has not had an ownership interest in a principal residence for 3 years First-Time Homebuyer (Section 4.3)

31

Downpayment and Entry-Cost Assistance

Homeownership Assistance Fund (2nd Mortgage)• Interest free, deferred loan• Helps borrowers qualify by providing cash to close,

improving ratios and increasing borrower purchasing power

• Due and payable upon one of the following: Sale or transfer of property Refinance of the first mortgage Payoff of first mortgage No longer a primary residence

32

Downpayment and Entry-Cost Assistance

• Various levels of assistance depending on mortgage program » MMP

▪ $3,000 in entry-cost assistance for eligible borrowers

► Targeted borrower/non-targeted borrower requirements

» CASA▪ $3,000 in entry-cost assistance

▪ Monthly payment assistance ($75, $50, $25)

33

HAF Program Guidelines

1. CASA or MMP First Mortgage

2. Borrower meets income limits

3. Borrower required to pay out of own funds $500

(Borrower must cover their minimum investment per guidelines of the insurer/guarantor FHA,VA, RD,etc.)

34

How Borrowers Access Programs

Apply with a lender that originates Minnesota Housing first mortgage programs.

The lender originates, processes, underwrites, closes and funds the loan, then sells the loan to Minnesota Housing.

35

Credit Requirements

• Credit worthiness (Section 4.7)

• Must be a good credit risk as defined by loan type and mortgage industry underwriting standards

– FHA– VA– RD– Conventional (Fannie Mae, Freddie Mac, etc.)

36

Mortgage Eligibility

Fully amortized fixed rate loans- No balloons

Allowable Loan Amortization Terms

• MMP (15, 20, 25, 30)

• CASA (15, 20, 25, 30, 40)

37

Increased Purchasing Power & Cash to Close

5.625%

$3,000

$233,300

$217,400

$233,300

CASA = An increase of $37,100 in buying

power and $3,000 cash to close!

Scenario A

Market Interest Rate 6.250%

Max Loan $196,200

No HAF $0

Same Maximum Loan

$196,200

Scenario B

CASA Interest Rate

Higher Loan AmountHAF Entry Cost Asst

HAF Mo Payment Asst ($75)

40 Year Term

Increased Maximum Loan

$206,700

$60,000 Income, 20% added to PITI for Taxes & Insurance, 33/38

38

Home Improvement Programs

• Improve livability, accessibility or energy efficiency of a home

• Accessibility features» Room additions» Accessible bathrooms» Ramps» Hardwood flooring» Hallway widening

39

Home Improvement Programs

» Fix-Up Fund▪ Flagship program

» Community Fix-Up Fund▪ Community targeting

▪ Subprime features

» Rehab Loan Fund▪ Targeted to very low-income borrowers

40

Fix-Up Fund

• Max loan $35,000• Higher loan amount possible if serving a household member

with a disability

• Fixed payments• Max repayment 20 yrs• No down payment• Low closing costs• 110% LTV• Unsecured loans if < $10,000

41

Community Fix-Up Fund

Special home improvement programs for

targeted community initiatives! Same terms and conditions as the fix-up-fund

Subprime component available

To access this program:

www.mhfa.state.mn.us/homes/CFUF_Matrix.pdf

42

Fix-Up Fund and Community Fix-Up Fund Requirements

• Household incomes: $90,000• Income waiver possible if serving a family member

with a disability

• Decent credit

• Owner-occupied homes (No cabins!)

43

Rehab Loan Program

• Features:» Max loan amount is $15,000» Additional $5,000 can be accessed in hh contains a family member with a

disability» Single-family homes = 30 yr. term with 0% interest rate loan payment

deferred until borrower sells, transfers title or no longer occupies the property

• Requirements:» Income limits apply (4 person hh is $23,550)» Owner-occupancy required» Assets not greater than $25,000

• Access by contacting an administrator:www.mhfa.state.mn.us/homes/Rehab_Administrator_by_County.pdf

44

Resources

• Homebuyer Education» Minnesota Home Ownership Center, www.hocmn.org

• First-Time Homebuyer Programs» www.mhfa.state.mn.us/homes/homes_mortgage.htm

• Downpayment and Closing Cost Assistance» www.mhfa.state.mn.us/homes/homes_payment.htm

• Home Improvement Programs» www.mhfa.state.mn.us/homes/homes_improvement.htm

• Foreclosure Prevention Assistance» www.mhfa.state.mn.us/homes/homes_foreclosure.htm

45

For More Information Contact

Devon Pohlman

(651) 296-8255

Devon.Pohlman@state.mn.us

400 Sibley Street, Suite 300

St. Paul, MN 55101

651-296-7608 * 800-657-3769 * TTY 651-297-2361

www.mhfa.state.mn.us