Homeownership Program

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Housing Development Assistance Program HDAP

• Homeownership Program

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HDAP Homeownership

• Todays topics
• Brief overview of the program guidelines
• Will not substitute for reading the guidelines!
• Go over the Single Family Proforma Section of the
  AHFA2

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HDAP Homeownership

• Eligible Projects
• Single-family residential projects
• Mobil homes are eligible under certain
  circumstances
• Land Trusts

• Ineligible Projects
• Condominiums
• Multiple Units (duplexes, triplexes)

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HDAP Homeownership

• Funding Limits
• 350,000 in a PJ area
• 400,000 in a non-PJ area

• Use of funds
• Development Subsidy cost to build FMV
• Affordability Subsidy FMV buyers maximum
  loan amount

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HDAP Homeownership

• HDAP Award
• Development subsidy cannot exceed 50 of the
  award (per project and per unit limit) or
  20,000.
• Exceptions will be reviewed on a case-by-case
  basis and only under certain conditions.

• Use of funds for development subsidy
• Eligible uses are outlined in the guidelines

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HDAP Homeownership

• Financing
• Option 1
• Non interest bearing loan to the homebuyer.
• Partially/FullyForgivable over 15 years
• Based on the homebuyer
• 65 of AMGI or less fully forgivable
• 65 - 80 AMGI forgive 50
• Pro-rata forgiveness

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HDAP Homeownership

• Financing
• Option 2
• 1 loan to the homebuyer.
• 30 year loan
• Not forgivable monthly repayment
• Homebuyer must take a conventional 1st mortgage
  for at least 10 of the mortgagable debt or
  10,000 whichever is more.

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HDAP Homeownership

• Project Design
• Purchase price cannot exceed the FMV
• FMV cannot exceed the 203(b) limits

• Mortgage must be through a recognized mortgage
  lender and no more that 95 LTV.

• Affordable to and occupied by households at or
  below 80 of the AMGI.

• Housing payment (PITI utilities) must be
  between 25 and 35 of the gross median household
  income.

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HDAP Homeownership

• Buyer must contribute 500 towards the
  downpayment not closing costs.

• Homebuyer counseling is required.

• Be aware of subdivision requirements, if
  applicable

• There are fee limits (soft costs,
  developer/consultant fees.)

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Single-Family Proforma HDAP
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SF Proforma Section
1. Single Family Cash Flow Statement
More on this later.
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SF Proforma Section

• Single-Family Homeownership Affordability
  Analysis
• a. Utility Allowance Calculation

Manually entered
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SF Proforma Section

• Single-Family Homeownership Affordability
  Analysis
• a. Buyers Housing Calculation

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SF Proforma Section

• Single-Family Homeownership Affordability
  Analysis
• c. Unit Amenities

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SF Proforma Section

• Single-Family Homeownership Affordability
  Analysis
• d. Subsidy Calculation

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SF Proforma Section

• Single-Family Homeownership Affordability
  Analysis
• d. Subsidy Calculation

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SF Proforma Section

• Single-Family Homeownership Affordability
  Analysis
• e. Income Targeting

All fields are calculated or link to other
fields. Provides the applicant with a general
idea of what income the application is targeting.
This is NOT a crucial chart.
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SF Proforma Section

• Single-Family Homeownership Affordability
  Analysis
• f. Affordability Range

GOAL to ensure that the specifics of the
project DO meet the target population the
applicant is trying to serve.
Range needs to be consistent with the narrative
information provided in the AHFA2.
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SF Proforma

• An OVERVIEW of how the S.F. Proforma works with
  the HDAP program.
• Primary focus will be on the bottom of the Cash
  Flow Statement.

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SF Proforma
You already know ...
Number of homes being built 14 How long
construction will take on each home 3
months When each home will be started 2 homes
are begun each month starting in month 2
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SF Proforma
You have already determined ...
What costs (hard soft) will be incurred during
the construction of each home
What costs will NOT be incurred during the
construction of each home (land acquisition,
appraisals, etc.)
What costs will be incurred in the first month on
the Proforma (land acquisition).
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SF Proforma
You may not know ...
How to reflect the HDAP award on the Single
Family Spreadsheet.
What OHFA staff looks at when they review the
S.F. Spreadsheet and the Proforma.
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We are going to look at 3 scenarios
1. Draw all of the HDAP during Construction,
regardless of whether or not it will be used as
Development or Affordability Subsidy.
2. Draw the Development Subsidy during
Construction and the Affordability subsidy when
the homes are sold.
3. Draw some or most of the HDAP during
construction and draw the rest when the homes are
sold.
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SF Proforma
HDAP Requested 570,560 Cost to develop each
home 119,934 Estimated Buyers First Mortgage
78,180 Buyer downpayment 1,000 FMV 118,700
Development Subsidy Necessary
119,934-118,700 1,234
Affordability Subsidy Necessary
118,700-78,180-1,000 39,520
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2 homes
???

• Remember
• Affordability subsidy of 39,520 per home (total
  553,280)
• Development subsidy of 1,234 per home (total
  17,276)
• Mortgage amount 78,180 (156,360 for two
  homes)

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2
1
Two ways to reflect the use of HDAP on the
proforma
1. Construction Financing
2. Affordability Subsidy
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Each time you indicate you are using funds,
either as construction financing or Affordability
Subsidy, the amount shown in the line Balance of
HDAP Used increases.
These Balance of . Used should NEVER be more
than the amounts noted in your Construction
Budget
This project requested and is using 570,560 in
HDAP funds. Therefore, the Balance of HDAP
Used can never be more that 570,560.
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All of the HDAP has been DRAWN before the homes
are sold.
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What will happen if I add the affordability
subsidy (39,520 per home)?
The Balance of HDAP Used is now greater than
the amount requested - the amount that appears in
the Construction Budget (Sources).
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So were back to What happened to the
Affordability Subsidy????
The funds needed to subsidize the mortgage are
already IN the project - they were drawn during
construction.
Therefore, they should not be reflected again as
Affordability Subsidy.
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We are going to look at 3 scenarios
1. Draw all of the HDAP during Construction,
regardless of whether or not it will be used as
Development or Affordability Subsidy.
2. Draw the Development Subsidy during
Construction and the Affordability subsidy when
the homes are sold.
3. Draw some or most of the HDAP during
construction and draw the rest when the homes are
sold.
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3
1
2
Remember 1. Affordability subsidy of 39,520
per home (79,040 for 2 homes)
2. Development subsidy of 1,234 per home (total
17,276).
3. Mortgage amount 78,180 (156,360 for two
homes)
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We are going to look at 3 scenarios
1. Draw all of the HDAP during Construction,
regardless of whether or not it will be used as
Development or Affordability Subsidy.
2. Draw the Development Subsidy during
Construction and the Affordability subsidy when
the homes are sold.
3. Draw some or most of the HDAP during
construction and draw the rest when the homes are
sold.
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• Affordability subsidy of 50,000 per home
• No Development subsidy
• Mortgage Amount 59,500

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Affordability subsidy of 50,000 per home means
that when the first four homes are sold, the
Affordability Subsidy of 200,000 is already in
the project. This is because more that 200,000
has been drawn in HDAP. It should not be
reflected again.
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Remember 220,000 of the HDAP has already been
drawn. AND, another 280 was drawn in the 4th
month. (20,280 total) 200,000 of that was
used as the affordability subsidy in the first
four homes sold. This means that there is
20,280 of HDAP that still needs to transition
into Affordability Subsidy.
Now we have two homes being sold. Affordability
Subsidy for two homes would be 100,000. The
project has already used 20,280 in construction,
which means they now draw 79,720 for
Affordability Subsidy (100,000 - 20,280).
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This shows what happens to the Balance of HDAP
Used as the project uses the HDAP during
construction and later as Affordability Subsidy.
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We are going to look at 3 scenarios
1. Draw all of the HDAP during Construction,
regardless of whether or not it will be used as
Development or Affordability Subsidy.
2. Draw the Development Subsidy during
Construction and the Affordability subsidy when
the homes are sold.
3. Draw some or most of the HDAP during
construction and draw the rest when the homes are
sold.
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You may not know ...
How to reflect the HDAP award on the Single
Family Spreadsheet.
What OHFA staff looks at when they review the
S.F. Spreadsheet and the Proforma.
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When the construction interest is added up on the
S.F. Spreadsheet, is it the same as the amount
noted throughout the Proforma, including the
Uses section of the profoma?
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Do the Balances of . Used exceed the amounts
noted in the Construction Source?
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After all of the homes are sold, does the
spreadsheet evidence positive or negative cash
flow?
If it does have either, how much and has an
explanation been provided? If there is positive
cash flow, does the project need as much HDAP as
requested. If there is a negative cash flow, how
will the gap be filled if necessary.
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When HDAP funds are used on the Spreadsheet, are
they for eligible costs?
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When all of the homes are sold, are the projects
cumulative expenses the Total Project Costs and
Construction Sources reflected throughout the
Proforma?
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(No Transcript)
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Do the Utility Allowances Agree with the
documentation provided from either the PHA or
Service provider?
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Are the subsidies requested necessary and are
they consistent throughout the proforma?
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Have both the Development Subsidy and
Affordability Subsidy needs been met?
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Is the mortgage amount correct based on the
information provided?
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Is the range of affordability consistent with the
Application?
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???
???
???
???
Are all ratios and calculations reflected?
DIV/0! AND REF are indications something is
wrong!
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