Louisville Metro Housing Authority Section 8 Homeownership

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Louisville Metro Housing Authority Section 8
Homeownership

• Prepared by Lisa Osanka
• Louisville Metro Housing Authority

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Goal and Objective

• LMHA offers a comprehensive route to
  self-sufficiency for low-income families through
  mortgage assistance, counseling and maintenance
  support.
• Participants challenge their over-representation
  in poverty statistics and under-representation in
  indicators of success.

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Highlights

• First Section 8 closing in the nation (11/97)
• Time limits for purchase
• Utility estimates
• Single mortgage model
• Intensive post-purchase counseling
• Individual Development Accounts with 2-1 match
  for maintenance
• Continuing work requirement

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Highlights

• Time limits for purchase
• At briefing 4-month term
• Must get Good Faith Estimate to get 1st extension
• Update appointment
• 2nd 4-month term
• Must have loan approval letter to get 2nd
  extension
• Update appointment
• Final 4-month term (full year of eligibility)
• One year break required if not able to purchase
• 58 briefed but no Section 8 purchase
• Rental assistance not effected by not purchasing
  (both Section 8 or Public Housing)
• 48 completed counseling and have purchased on
  their own without Section 8 subsidy
• 123 completed counseling and have purchased with
  Section 8 subsidy
• 46 of 123 have participated in the Family Self
  Sufficiency (FSS) Program

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Highlights

• Utility estimates
• Needed for bank pre-qualification affordability
• Slightly different from Rental
• Calculated from standard allowances for single
  family home (uses higher of gas or electric)
• Assumption made that homeowner will pay for all
  utilities (incentive to keep utility costs low)
• Can be recalculated for condo purchase
• 5 of 123 homebuyers have purchased condo units
• 2 purchased in exception payment areas

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Highlights

• Single mortgage model
• Maximizes buying power
• Market-driven competitive offers (several partner
  banks)
• Access to down payment assistance
• Not limited by funds in secondary pool

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Highlights

• HUD Waiver for 1 Bedroom Qualified Tenants
• Reasonable accommodation for homebuyers to
  increase payment standard to 2 Bedroom Qualified
  as 1 Bedroom homeownership units are so scarce
• Still 4 units purchased are 1 Bedroom (3 condos
  and 1 SFH)
• Moving To Work (MTW) Initiative to Expand
  Exception Payment Standard Census Tracts
• Proposed effective July 1, 2008
• Used MTW flexibility to adjust statute to use
  Owner Occupied Median Value instead of Renter
  Occupied Median Gross Rent in calculating
  exception payment census tracts
• Exception Payment Areas are needed to promote
  residential choice, help families move closer to
  areas of job growth, and de-concentrate poverty.

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Highlights

• Intensive post-purchase counseling
• New Home 101 Tour with HQS Inspector
• Making Spending Choices
• Managing Money in Any Season
• Major Home Maintenance
• Minor Home Maintenance
• Foreclosure Prevention
• Managing Equity

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Highlights

• Individual Development Accounts with 2-1 match
  for repairs and maintenance
• First 3 years in home
• Minimum monthly investment of 10 matched with
  20 from LMHA
• Encourages long-term saving habits
• Maximum 500 per year (1,000 match per year)
• Account balance of up to 4,500
• ATM-like card (deposit only) or Electronic Fund
  Transfers
• Works with Homeownership Specialist on reviewing
  bids and making payments

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Highlights

• Continuing work requirement
• Head of household must remain full-time employed
  (unless EDH)
• Anyone else 18 or older (unless EDH) must be
  full-time employed, student and/or caring for
  pre-school age children or disabled adult
• Only two week break in employment allowed

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Data Analysis

• First Section 8 closing in the nation in November
  of 1997
• Pilot program 1997-2000
• 123 closings with exponential growth
• Pilot 5
• 2002 5
• 2003 11
• 2004 20
• 2005 26
• 2006 27
• 2007 19
• 2008 10 to date with 14 pending sales contracts

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Data Analysis

• 123 homeowners
• 13 already off assistance
• 7 exception payment
• 22 new construction
• Geographic distribution (22 of 26 Metro Council
  Districts represented)
• 18 straight from public housing
• 49 EDH (elderly/disabled/handicapped)
• 46 also in Family Self Sufficiency Program

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Data Analysis

• Pipeline
• 14 sales contracts
• 6 looking for units
• 12 applications
• 300 in counseling
• 3,000 income-eligible (out of 8,200 vouchers and
  3,900 public housing units)

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Data Analysis

• Demographics
• Similar to Section 8 Rental
• Populations underrepresented in homeownership and
  overrepresented in poverty statistics
• Female head of households w/children (68)
• African-Americans (66)
• Elderly/Disabled/Handicapped (40)

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Data Analysis

• Averages (snapshot at closings)
• Income 16,544 (28 MFI)
• Sales Price 91,382 (56,500-142,500)
• Loan Amt 82,639 (90 LTV) (61 w/PMI)
• Interest Rate 6.04 (1-8)
• Down Payment Assistance 16,110
• Earnest money 339
• LMHA does not require 1 client investment
• Funds to close 727

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Data Analysis

• Averages
• Mortgage Payment 646
• Tenant Payment 460 (34 of income)
• Includes Utilities 161
• Housing Assistance Payment 346
• Homeowners covering 56 of total cost with LMHA
  subsidizing 44
• Homeownership HAP 30 less than Rental Housing
  Assistance Payment

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Team/Resources

• Partnerships are key
• Louisville Metro Housing Authority
• Participants
• Homeownership Counseling Agencies
• Banks and Kentucky Housing Corp
• Fannie Mae
• US and Kentucky HUD
• Local Government HOME DPA
• Federal Home Loan Bank Welcome Home DPA

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LMHA Team/Resources

• Louisville Metro Housing Authority
• Intentionally made it function like Section 8
  Rental to utilize whole staff team
• Executive Administrator (1/2 FTE)
• Homeownership Specialist (2/3 FTE)
• Project Specialist (2/3 FTE)
• Housing Specialists (fits in to schedule)
• HQS Inspector (fits in)
• Case Mgmt Coordinators (fits in)

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For more information

• Lisa Osanka
• Executive Administrator
• Louisville Metro Housing Authority
• 420 South Eighth Street
• Louisville, KY 40203
• 502-569-7040 (O)
• 502-569-3459 (F)
• osanka_at_lmha1.org
• www.lmha1.org