HOME Program

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(No Transcript)
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HOME Program Review Committee
Presentation by East Palo Alto Housing Services
Department with First Home, Inc. Lisa
Hamburger Arlene Joyner Walter Zhovreboff
April 24, 2001
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Advance and support policies and programs to
ensure that East Palo Alto is a sustainable and
economically vital city of culturally and
vocationally diverse residents of all ages.
Housing Related Policies
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Availability of Affordable Housing
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• Comprehensive Homebuyer
• Assistance Program (CHAMP)

• request for 550,000 in Home Funding for the FY
  2002
• secure 14 permanently affordable single family
  homes
• aid families to take advantage of existing
  programs to purchase their first home, live
  closer to their jobs and save on their housing
  costs
• average of 39,285 per home
• leveraging over 10 for every HOME dollar invested

Comprehensive Homebuyer Assistance Program (CHAMP)
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CHAMP Leverages Existing Unusable or
Underutilized Programs!
Patrick please replace the number with figures
like from the previous presentation. Thanks 5
households will purchase newly
constructed, deed restricted single family
homes These families would otherwise leave East
Palo Alto, since the cost of a newly constructed
home is about 630,000 and affordable only to
those making over 250 AMI. The BMR truly
provides an unbelievable opportunity to obtain
homeownership and increased standard of living.
3 Family Self Sufficiency
graduates will lease-to-purchase existing single
family homes There are currently no programs in
SMC that offer the capacity for lower income
households who have struggled to maintain a
living while trying to maintain some level of
credit management. Thats why EPA is a founding
member of East Bay Delta Housing and Finance
Agency. Through the sale of bonds the Agency is
in position to purchase homes and lease them to
low income households. Unfortunately the maximum
mortgage is capped and the market has skyrocketed
out of reach. CHAMP will take advantage of this
otherwise unusable program to give families a
chance to continue to build their credit
worthiness, increase their earning capacity while
investing in their own down payment. FSS
families have a rare chance of ever becoming a
homeowner, since at most they could afford to buy
a 285,000 home, even with the 50,000 FSS grant.
(FSS) 6
Emergency Personnel for the City must be able to
report to City Hall Since 90 of the Citys
employees live in a different area code, the City
is in danger of falling into chaos in an
emergency if personnel do not live close by.
This health and safety issue is mitigate by
CHAMP. Without assistance, theses families
cannot afford to buy in excess of 237,000.
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CHAMP will...
Each prospective borrowing family profile was
analyzed so as to maximize the utility of
existing programs, mortgage credit certificates
and reduce wasted expense of mortgage
insurance. CHAMP Results FSS made
useable Lease-to-Purchase made
useable additional MCC placements 14 1st
time homebuyers

• BMR families are required to invest a minimum 3
  down payment, then the LTV is reduced just enough
  to eliminate mortgage insurance.
• CHAMP Results 279.40 additional savings
• FSS families each will be awarded a 50,000
  grant.
• CHAMP Results 225.00 additional savings
• 1st response families are required to invest a
  minimum 3 down payment, then the LTV is reduced
  just enough to eliminate mortgage insurance.
• CHAMP Results 225.00 additional savings

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CHAMP will use HOME funds to assist each
household as follows.
For each Family No. of
Borrower Investment 1st HOME Market Family
Leveraged Mortgage Subsidy Value BMR 5
4,524 481,2131 120,640 25,636 630,000 FSS
3 0 52,0132 236,667 50,000 336,667 1st
Response 6 9,900 52,0133 215,100 50,000 325,00
0 Total/Avg 14 5,859 205,299 185,986 39,285 436,
429 Percentage 1 47 43 9 100 1 developer
contribution under BMR Program, plus EPA
Subsidy 2 grant awarded to FSS graduates for home
purchase in SMC only, plus EPA Subsidy 3 private
investor as per CHIPS program design, plus EPA
Subsidy1
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CHAMP will be the last opportunity for 14 EPA
families at 80 and below of AMI to become
homeowners in their community.
should be a pie chart showing the total number
of units sold in the last 12 months below
350,000 (64). Then pop out a pie slice
representing 9, the number of homes needed for
CHAMP families.
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CHAMP Deepens Affordability!
? BMR ? FSS ? 1st Response Area
Median Income 60-80 75-80 75-80 Median
Income 2001 4,369 4,861 4,861 Purchase Prices
2001 150,800 336,667 325,000 Housing Ratio1
2001 27.6 48.6 42.2 Housing Ratio1
2006 23.9 41.6 41.7 Housing Ratio1
2011 23.0 39.7 39.8 1Including PITI,
Utilities Maintenance Repair
CHAMP Results Cost of ownership versus earnings
decreases Households are able to increase their
standard of living
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CHAMP Helps Families Accumulate Assets!
? BMR ? FSS ? 1st Response Purchase
Prices 2001 150,800 336,667 325,000 Down
Payment 4,524 50,000 9,900 Annual Index
(CPI) 1.2 3.5 3.5 Sale Price
2011 169,346 474,902 458,445 Due to
1st 79,405 195,432 173,865 Due to
HOME 38,150 114,340 106,703 Due to 3rd Prty
Investor 101,529 Due to City 2,907 4,435 4,33
9 Due to Borrower 7,306 119,118 72,010
CHAMP Results Homeowner realize asset
accumulation
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CHAMP is Self-Sufficient in 10 Years!

• ? BMR ? FSS ? 1st Response
• Sale Price 2011 169,346 474,902 458,445
• Due to HOME _at_sale -38,150 -114,340 -106,703
• HOME Income 33,070 5,587 -38,657
• Due to City _at_sale -2,907 -4,435 -4,339
• City Loan Repayment -422 -422 -422
• City Income 3,329 4,857 -8,186
• Mortgage 164,266 366,149 301,138
• Area Median Income 60-80 75-80 75-80
• Median Income 2011 6,163 6,857 6,857
• Housing Ratio1
• 1Including PITI, Utilities, Maintenance Repair,
  Mortgage Insurance

CHAMP Results Develop program self-sufficiency
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Why Invest in CHAMP?

• Leverage existing Programs only usable or
  available in East Palo Alto
• FSS made useable
• Lease-to-Purchase made useable
• additional MCC placements
• Provide Families with additional housing costs
  savings by eliminating mortgage insurance
• Reduces cost of ownership versus estimated
  earnings
• Households are able to increase their standard of
  living
• Homeowner realize asset accumulation
• Develop program self-sufficiency

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should be two pie charts. 1st showing EPA
homownership rates ___ homeowners vs __ of
renters. Then add another pie chart showing the
relationship of affordable rental units to
affordable homeownership units with three slices
Rental (396), Homeownership (48), Homeownership
proposed (14). Color/shade the homeownership
pieces similarly.