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)

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 $ 50,000 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

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

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

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

Contribution Allocation (35% of AHP)

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$130,000 Downpayment(6,500) Total Mortgage$123,500 Monthly $ Monthly payment$ 780 Taxes & insurance130 Total payment$910 Short $7,000Affordable!

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 $$

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 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

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 1 st 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