Post on 09-Feb-2016
description
Funding Opportunities
Federal Home Loan Bank of Indianapolis
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 $ 50,000Bank Loan 970,500
Loan payments: $970,500 @ 7.5% for 15 yrs =
$9,000 per month or $108,000 per year
Land $ 37,500
Pre-Development 36,000
Construction 775,000
Developer Fee 100,000
Loan and other fees 72,000
Total $ 1,020,500
Sources UsesFor 11 apartment units
Total $ 1,020,500
Rents withOUT soft dollars
1 bedroom $650
2 bedroom $735
3 bedroom $755
4 bedroom $1,000
Development Budget with Soft Dollars
Loan payments: $250,500 @ 7.5% for 15 yrs =
$2,300 per month or $28,000 per year
Sources UsesFor 11 apartment units
Equity $ 50,000AHP 300,000HOME 420,000Bank Loan 250,500Total $ 1,020,500
Land $ 37,500Pre-Development 36,000Construction 775,000Developer Fee 100,000Loan and other fees 72,000Total $ 1,020,500
Rents with soft dollars
1 bedroom $229
2 bedroom $435
3 bedroom $600
4 bedroom $850
Contribution Allocation (35% of AHP)
AHP Allocation
Homeownership Initatives 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 with 2 Children
Family of 4 with Stay-home Mom
Single Parent – 2 Children
$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
Downpayment $6,500
Closing costs 3,000
Total up-front costs $9,500
$1,300/month
Mortgage
Sale Price $130,000Downpayment (6,500)
Total Mortgage $123,500
Monthly $
Monthly payment $ 780Taxes & insurance 130
Total payment $910
Short $7,000
Affordable!
Single-Family Purchase - With Subsidies
Total up-front costs $2,500
Closing funds
Downpayment 6,500Closing costs 3,000Total 9,500
Homebuyer funds (2,500)FHLBI grant (5,000)HOME grant (2,500)Total 10,000
Enough Up-Front $$
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 grant to homeowner through nonprofit
• Provides fund from net income
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
Retail/commercial development
Business development and expansion
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
Regular Advances
Term Rate
1 yr. 3.75
5 yr. 4.49
7 yr. 4.68
10 yr. 4.89
No terms beyond 10 yrs.
CIP AdvancesTerm Rate
1 yr. 3.49
5 yr. 4.23
7 yr. 4.41
10 yr. 4.63
15 yr. 4.90
20 yr. 5.01
Advance Information as of 4/18/05
Project benefits from attractive financing package
How it Works
Long term – up to 20 years/30 year amortization
Low rate
Determined by member based on credit quality
CIP Examples
• Commercial real estate financing• Multifamily housing 1st mortgage financing• Small business
– Real estate purchase– Equipment
• Public facilities• Medical facilities
– New construction or expansion
The Community Benefits
Housing + Jobs =
Sustainable neighborhoods and communities