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Funding Opportunities Federal Home Loan Bank of Indianapolis.

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Presentation on theme: "Funding Opportunities Federal Home Loan Bank of Indianapolis."— Presentation transcript:

1 Funding Opportunities Federal Home Loan Bank of Indianapolis

2 FHLBI grant programs at work Rental housing development Homeownership rehabilitation grants Downpayment assistance grants

3 FHLBI Programs Affordable Housing Program Homeownership Initiatives –HOP –NIP Community Investment Program

4 Support Living

5 Senior Housing

6 Downpayment assistance for first-time homebuyers

7 Temporary shelter for victimized children

8 New medical Facility Saginaw

9 220 Indiana members

10 Flow of information and funds Important partner

11 FHLBI’s Contribution Homeownership –Downpayment/closing cost assistance –Rehab dollars Rental –Development/construction/rehab assistance

12 Contribution Allocation (10% of net income)

13 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

14 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

15 Retention and monitoring Retention commitments –5 years homeownership –15 years rental Monitoring requirements –Semi-annual reporting –Long term reporting for rental projects

16 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”

17 Development Budget without Soft Dollars Equity $ 50,000 Bank Loan970,500 Loan payments: 7.5% for 15 yrs = $9,000 per month or $108,000 per year Land$ 37,500 Pre-Development 36,000 Construction775,000 Developer Fee100,000 Loan and other fees72,000 Total$ 1,020,500 Sources Uses For 11 apartment units Total $ 1,020,500

18 Rents withOUT soft dollars 1 bedroom $650 2 bedroom $735 3 bedroom$755 4 bedroom$1,000

19 Development Budget with Soft Dollars Loan payments: 7.5% for 15 yrs = $2,300 per month or $28,000 per year SourcesUses For 11 apartment units Equity$ 50,000 AHP300,000 HOME420,000 Bank Loan250,500 Total$ 1,020,500 Land$ 37,500 Pre-Development 36,000 Construction775,000 Developer Fee100,000 Loan and other fees72,000 Total$ 1,020,500

20 Rents with soft dollars 1 bedroom $229 2 bedroom $435 3 bedroom$600 4 bedroom$850

21 Contribution Allocation (35% of AHP)

22 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

23 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

24 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

25 Single Family Purchase - Without Subsidies Downpayment $6,500 Closing costs 3,000 Total up-front costs$9,500 $1,300/month Mortgage Sale Price$130,000 Downpayment(6,500) Total Mortgage$123,500 Monthly $ Monthly payment$ 780 Taxes & insurance130 Total payment$910 Short $7,000Affordable!

26 Single-Family Purchase - With Subsidies Total up-front costs$2,500 Closing funds Downpayment6,500 Closing costs3,000 Total9,500 Homebuyer funds(2,500) FHLBI grant(5,000) HOME grant(2,500) Total 10,000 Enough Up-Front $$

27 Neighborhood Impact Program (NIP) Owner-occupied rehabilitation assistance for existing homeowners 3 to1 match Other grants/funds can be matched Cash contribution not required

28 NIP best practice Qualifies household Counseling Oversees rehab work Makes payments Provides grant to homeowner through nonprofit Provides fund from net income

29 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

30 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

31 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.

32 Government or nonprofit initiatives Retail/commercial development Business development and expansion Housing development

33 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

34 FHLBI Advance Rates Regular Advances TermRate 1 yr yr yr yr.4.89 No terms beyond 10 yrs. CIP Advances TermRate 1 yr yr yr yr yr yr.5.01 Advance Information as of 4/18/05

35 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

36 CIP Examples Commercial real estate financing Multifamily housing 1 st mortgage financing Small business –Real estate purchase –Equipment Public facilities Medical facilities –New construction or expansion

37 The Community Benefits Housing + Jobs = Sustainable neighborhoods and communities


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