Vermont Homeownership Programs and Financing

Vermont Homeownership Vermont Homeownership Programs and FinancingPrograms and Financing

AGENDAAGENDA

Programs Programs Vermont Community Land TrustsVermont Community Land TrustsVermont HomeOwnership CentersVermont HomeOwnership Centers

FinancingFinancingVHFAVHFAUSDA Rural DevelopmentUSDA Rural DevelopmentVHCB HOMELANDVHCB HOMELANDVSHA Homeownership Voucher ProgramVSHA Homeownership Voucher Program

Vermont Community Land TrustsVermont Community Land Trusts

DevelopersDevelopersOwners of Affordable Rental HousingOwners of Affordable Rental HousingNeighborWorks HomeOwnership CentersNeighborWorks HomeOwnership Centers

Vermont HomeOwnership CentersVermont HomeOwnership CentersHomebuyer’s WorkshopsHomebuyer’s WorkshopsCounselingCounseling– Pre-purchasePre-purchase– Delinquency and ForeclosureDelinquency and Foreclosure

Resource andResource and Referral to loan programs and Referral to loan programs and

products and housing products and housing professionalsprofessionalsAccess to GrantsAccess to GrantsRevolving Loan Funds –Revolving Loan Funds –– Health and SafetyHealth and Safety– Well and SepticWell and Septic– Energy ConservationEnergy Conservation

www.vthomeownership.org

VHFAVHFA

Offers low interest loans for eligible Offers low interest loans for eligible borrowers through participating banks, borrowers through participating banks, savings and loans, and credit unions.savings and loans, and credit unions.ProductsProducts– MOVEMOVE– Cash AssistanceCash Assistance– HOUSEHOUSE– Limited RefinanceLimited Refinance

USDA Rural DevelopmentUSDA Rural Development

Direct loan program (502)Direct loan program (502)– Subsidized loans to eligible borrowersSubsidized loans to eligible borrowers– Below 80% median incomeBelow 80% median income– Regional offices originate loansRegional offices originate loansGuaranteed Loan ProgramGuaranteed Loan Program– Offered through local lendersOffered through local lenders– Eliminates need for down payment or Eliminates need for down payment or

mortgage insurancemortgage insuranceRepair Loan Program (504)Repair Loan Program (504)

Community Land Trust ModelCommunity Land Trust Model

HOMELAND grants provide both initial HOMELAND grants provide both initial and perpetual affordability.and perpetual affordability.One-time investment by the State.One-time investment by the State.Homeowners share appreciation when Homeowners share appreciation when they sellthey sell

HOMELAND Shared Appreciation Program HOMELAND Shared Appreciation Program What Happens When I Sell My Homeland HouseWhat Happens When I Sell My Homeland House At PurchaseAt PurchaseOriginal Appraised ValueOriginal Appraised Value $175,000$175,000

Original Purchase PriceOriginal Purchase Price $175,000$175,000CLT GrantCLT Grant ---- $ 35,000$ 35,000Original Net Purchase PriceOriginal Net Purchase Price $140,000 $140,000

At ResaleNew Appraised Value $225,000

Original Appraised Value - $175,000

Market Appreciation $ 50,000

Appreciation that Owner Earns$50,000 x 25% = $12,500

Option PriceOriginal Net Purchase Price $140,000Owner’s Share of Appreciation + $ 12,500Price Owner sells house to CLT

$152,500

What Owner Makes on Sale $152,500 Option Price- $135,000 Pay off of Mortgage $ 17,500 = $12,500 appreciation + $5,000

mortgage principal

Price to New BuyerCLT purchase price $152,500CLT Stewardship Fee (6% of new appraised value) + $ 13,500Price to New Buyer $166,000

Amount ‘Banked’ in Perpetual TrustOriginal Grant $35,000 Shared Appreciation + $24,000 TOTAL $59,000

$225,000 - $166,000 = $59,000

VSHA Homeownership Voucher VSHA Homeownership Voucher ProgramProgram

Comparable to Section 8 Rental VoucherComparable to Section 8 Rental VoucherSubsidizes PITI and maintenance costs of Subsidizes PITI and maintenance costs of owning a homeowning a homeAvailable to existing rental voucher Available to existing rental voucher holders. Waiting list to join is closed for holders. Waiting list to join is closed for people without rental vouchers.people without rental vouchers.