Affordable Housing in Nebraska PowerPoint Presentation

Affordable Housing in Nebraska PowerPoint Presentation

2016-07-01 71K 71 0 0

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Pat Compton – . Housing Development Specialist. DEPT OF ECONOMIC DEVELOPMENT. pat.compton@nebraska.gov. www.neded.org. Housing Funding Sources. Community Development Block Grant—CDBG. HOME Partnership Act funds—HOME. ID: 384829

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Presentations text content in Affordable Housing in Nebraska

Slide1

Affordable Housing in Nebraska

Pat Compton –

Housing Development Specialist

DEPT OF ECONOMIC DEVELOPMENT

pat.compton@nebraska.gov

www.neded.org

Slide2

Housing Funding Sources

Community Development Block Grant—CDBGHOME Partnership Act funds—HOMENebraska Affordable Housing Trust Fund--NAHTF

Slide3

Eligible Activities

Build new rental units for persons that are low to moderate income.

Adapt a building from another use such as an old school or hotel to rental housing.

Rehabilitate an existing rental property owned by a non-profit or Public Housing Authority to meet local building codes and DED Rehabilitation Standards.

Slide4

Eligible Activities (cont)

Administer a homebuyer assistance program.

Develop new single family housing for home ownership, including infrastructure.

Purchase homes, rehabilitate to meet local building codes and DED Rehabilitation Standards and provide down payment assistance to a new homebuyer to purchase the homes. (PRR)

Slide5

Eligible Activities (cont)

Administer a program to assist homeowners in rehabilitating their houses.Strengthen the operations of non-profit organizations to develop affordable housing.

Slide6

American Dream?

Homeownership not for everyone:Rental may be best option because:Bad creditJob moves to different locationsFuture not knownDon’t want the upkeepIncome does not support ownership

Slide7

Rental With Tax Credits

Larger projects of more than 10-12 units

Application for DED funding is included with LIHTC application

Applications due in the fall

Income eligible tenants at 60% AMI and below

Slide8

Rentals Without Tax Credits

DED funding cycle begins in Febr. with Pre Ap

Awards announced after June 30

ROF in the fall

Sustainability depends on debt, expenses, revenue

Funding sources may include DED; FHLB; Private Foundations; Capital Campaign Fund

Slide9

Rural Community Commonalities

Population does not support need for larger LIHTC projects

Capital investment limited

Empty buildings may be available but uncertain condition

Few housing choices available

Labor force may be temporary/commute elsewhere

Slide10

Rental Units Developed w/o LIHTC

Income eligibility-80% AMI or belowFirst stepsDetermine market, need, location/service area, budgetDetermine financing sourcesWho’s in charge—create the teamLender, developer, architect,engineer, construction mngr

Slide11

Variety of Approaches to Satisfy Housing Need

New ConstructionSingle family housing units—scattered sitesDuplexMultifamily – up to 10 units Existing buildingPurchase; convert to rental by rehabilitationNon profit ownership of rental properties—rehab to fit market: 1 br > 2 br; 2 br > 1 br; ADA accessible

Slide12

You May Need a Developer for

Creating the development concept

Testing the market

Evaluating site and design and costing out construction

Preparing the pro forma income and expenses statement

Preparing the sources and uses of funds statement

Slide13

The Developer (cont)

Obtaining the construction financingLocating permanent financing resourcesObtaining the construction LoanConstructing the ProjectManaging the Project during construction

Slide14

Filling the Gap at Construction

Subsidizing Capital Costs

Smaller projects will have greater sustainability with less debt service

Monthly operating costs per unit may run approx. $350/mo. (taxes; insurance; maintenance)

NEDED AHP funding, FHL Bank AHP funding, USDA-Rural Development programs; private foundations

Slide15

Filling the Gap and Serving the Customer

Rental SubsidiesConsumer pays 30% of incomeSSI Consumer with income at $715 per monthPays $215Rental Subsidy $185 (Sect 8 voucher)Rental Income $400$350 Taxes/insurance$50/mo Debt Service?Maintenance?

Slide16

Rental Subsidies

HUD Section 8 Vouchers

Tenant-based – Can be used in any approved housing with the geographic service area of the Public Housing Authority

HUD-funded Public Housing Authority Project

Project-based – must live in that rental project and tenant must meet the application criteria

USDA-Rural Development Project

May have project-based assistance

Other HUD funded projects (811)

Project-based

Slide17

Challenges

Over estimated marketLimited rental assistance (Sect. 8)Mismatched amenities, design. services with tenant marketWorkforce unstable/mobile Vacancies result in decreased revenue and failure to cash flowdemand improved marketing strategies may result in property deterioration

Slide18

Conclusions

Rental Housing projects need adequate income to operate/cash flowSuccess depends on:Proven market needAffordable rentsMaintenance of propertyDebt reduction


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