Housing Assistance Council Building Rural Communities since 1971 Southeast Regional Mutual Self-Help Housing Conference “Other Funding Sources” Wednesday,
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Housing Assistance Housing Assistance CouncilCouncil
Building Rural Communities since Building Rural Communities since 19711971
Southeast Regional Mutual Self-HelpSoutheast Regional Mutual Self-Help Housing Conference Housing Conference
“Other Funding Sources”“Other Funding Sources”
Wednesday, June 19, 2013Wednesday, June 19, 2013
HAC’s MissionHAC’s Mission“Improve housing conditions for the rural poor
with an emphasis on the poorest of the poor in the most rural places.”
Loan Fund ObjectiveHelp establish and strengthen a housing delivery system that will provide, on a
continual basis , additional decent, safe, and affordable houses in rural areas for low-
income people.
Housing Assistance Housing Assistance CouncilCouncil
• Established in 1971
• National nonprofit organization
• AAA+2 CARs rated CDFI
• Provide services to local, state, and national nonprofit organizations and developers
• High needs areas: Indian County, Southwest Border Colonias, Mississippi Delta, and Appalachia
• High needs groups: farm-workers and minorities
Housing Assistance Housing Assistance CouncilCouncil
HAC emphasizes:
Local Solutions
Empowerment of the poor
Reduced dependence
Self-Help strategies
Homeownership
Safe and Sustainable communities
Services OfferedServices Offered
Technical Assistance & Training
Loan Funds Research,
Publications & Information
HAC Loan FundsHAC Loan Funds
HAC Loan FundsHAC Loan Funds(from inception to March 31, 2013)(from inception to March 31, 2013)
Loan Fund Capitalization $62.0 million (includes SHOP & other loans) 67% equity; 33% debt investments
Approved Commitments $300 million 2,244 loans 68,301 housing units and water/sewer
connections
Current Loan Portfolio 165 loans = $36.5 million 80 borrowers = 37 states
Rural Housing Loan Rural Housing Loan FundFund
Uses• predevelopment• land acquisition• site
development• construction up
to $750,000• gap/interim• Land banking• Loan fund
investment
Structure:• Up to five years• Interest rate
5% nonprofits; 8% for-profits
• Quarterly interest payments
• 1% service fee• Maximum 100% LTV• Adequate
security/collateral• Committed take-out
source
Pre-Development
Standard 3 year term or less 1% HAC service fee No maximum loan amount Maximum 100% LTV Security of lien position on real property
and/or assignments and UCC-1 filings on unrestricted net assets of borrower.
Repayment typically upon sale of developed lots or closing of construction/permanent financing
Construction Loans
$750,000 cap per loan and borrower Standard 2 year term with option to extend
for 1 year. A 1% extension fee applies. 1% HAC service fee Maximum 100% LTV as supported by
current appraisal Security of lien position on the project
property Repayment upon sale of developed lots or
closing permanent financing Permanent, take-out financing committed
prior to disbursement.
Preservation Revolving Preservation Revolving Loan Fund Loan Fund
Uses•
predevelopment
• land acquisition
• rehab• Equity by USDA
approval only
Structure:• Up to 15 years
amortized over 30 years
• Interest rate 5% nonprofits
• Quarterly interest payments
• 1% service fee• Maximum 100% LTV• Adequate
security/collateral• Repayment
structure: operating income of project, permanent financing.
FocusPreservation of at
risk USDA-financed multifamily, elderly or farm-labor rental complexes.
Site Acquisition
Standard 5 year term 1% HAC service fee Maximum 100% LTV as supported by
current appraisal Security of lien position on the project
property Repayment upon sale of developed lots or
closing of construction/permanent financing
Eligible BorrowersEligible Borrowers
Community-based nonprofit organizations Housing development corporations Farm worker organizations Housing cooperatives and condo
associations Native American tribes Public agencies and units of local
government Public utility districts
Eligible ProjectsEligible Projects
Located in areas, which are rural in character (preference for projects located in towns with populations of less than 25,000)
Serve low- to very- low income persons, which includes persons earning less than 80% AMI
Minimum of 51% of the resulting housing units must be affordable to low- or very-low income people
Loan Uses & Loan Uses & StructureStructure
Uses• predevelopment• land acquisition• site development• construction• preservation• gap/interim
Structure• loans• guarantees• compensating
deposits• letters of credit• lines of credit
Sample ProjectsSample Projects Acquisition and infrastructure development
of a subdivision for affordable housing units. Acquisition and site development of
scattered site lots for self-help unit construction.
Acquisition and rehab of existing apartment complex serving farm-workers or other workforce group.
Acquisition loan to tenants of manufactured housing community seeking to
cooperatively purchase the park. Loan to another nonprofit lender to
capitalize their rural lending initiatives ( water/sewer, rehab loan program).
The SHOP program is authorized under Section 11 of the Housing Opportunity Program Extension Act of 1996
Funded through the U.S. Department of Housing & Urban Development (HUD)
Provides grant monies for land acquisition and infrastructure improvement costs associated with the development of self-help units
Self-Help Self-Help Homeownership Homeownership
Opportunity Program Opportunity Program (SHOP)(SHOP)
Land Acquisition• Purchase of real property pursuant to a
deed or minimum 25 year lease
• Financing and closing costs associated with the land acquisition transaction
Infrastructure Improvements• Water & sewer lines (or wells & septic)• Roads, curbs and gutters, sidewalks • Utilities, gas, electric• Environmental testing & remediation• Soft costs (legal, closing, etc.)
SHOP Eligible ActivitiesSHOP Eligible Activities
HUD requirements• Public or private nonprofit organization
under federal or state law• 100+ hours of family sweat equity labor• $15,000 per unit maximum• Rural or urban areas
HAC requirements• Competitive review• Security required• Ongoing reporting required• 0% interest• 90% forgivable upon unit completion
and other loan agreement condition
SHOP Program DesignSHOP Program Design
• Subsidize lot costs (keep $$ in project)
• Loans/Grants to families• 5-year, 30-year loans• soft seconds
• Capitalize internal development fund
• SHOP-eligible uses ONLY
SHOP Grant Conversion SHOP Grant Conversion FundsFunds
Loan ProcessLoan Process1. Inquiry/Pre-screening.2. Submission of loan application.3. Comprehensive underwriting process.4. Internal management review.5. Loan committee review.6. If accepted, loan commitment issued.7. Pre-closing conditions satisfied before
disbursement of funds.8. Loan closing and disbursement.9. Servicing/monitoring loan throughout the
term of the loan.10.Full repayment of loan.
HAC Loan Fund at a HAC Loan Fund at a GlanceGlance
Contact InformationContact InformationHousing Assistance CouncilHousing Assistance Council
(202) 842-8600 (202) 347-3447 Fax(202) 842-8600 (202) 347-3447 Fax
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