Deborah Webster dwebsterccgmecom 505 4017254 Why Mixed Income One source old way Leveraging Sources Designing Master Planned Mixed Income Projects Starts with a Vision What is our visionconcept ID: 811220
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Slide1
Mixed Income housing Development
Deborah Websterdwebsterccg@me.com(505) 401-7254
Slide2Why Mixed Income?
Slide3One source, old way
Slide4Leveraging Sources
Slide5Designing Master Planned Mixed Income Projects Starts with a Vision
What is our vision/concept?What is our approach?
Slide6Five Key Elements to Mixed Income
Designing to market and building demand Will mixed income families need and want the housing you are proposing. Can they afford or want to pay the costs?2.
Identifying and accessing “flexible” fundingWhat sources have acceptable income, or housing payment restrictions?
Slide7Five Key Elements to Mixed Income (continued)
Navigating the “rules” of leveraging funding sourcesLaws and regulationsAllocation of federal funding in mixed income projectsFair HousingFinancial feasibilityDoes the mixed income unit mix “work”?
Financing gaps and affordability gapsCan we repay the loans?
Slide8Five Key Elements to Mixed Income
(continued)Building your team’s capacity and partnershipsAssessment of resources, staff and boardWhat do we need to change or add?
Identifying political and other supportWill there be resistance?Do we promote mixed income land use “zoning”Devise a multi-year plan for development
Education on benefits, risks and linkages to Tribal Planning, etc. for data, models
Slide9Rules About
All SourcesFinancing should be designed to meet the needs of the target market, tribe’s priorities
Sources are affected by changes in economy and local, state and federal policy, “appetite” and funding can “
go away
”
, get smaller or harder to get
Sources do not always blend easily , e.g., AMI versus USMI Know the ratios and timing of funds, e.g., when are funds available and when do we have to pay it back
Slide10Rules About
All SourcesIf leveraging or combining, develop a process with lenders, federal, state agencies, etc.Balance design and financing innovation with practicality
Have a Plan B
Slide11Rules About Restricted Sources
Restricted sources used for infrastructure and building or rehabilitation need to be allocated to a project’s site, lot and unit to determine which units are “assisted”, and therefore restricted, to low-income HHsPIH 2010-32/2011-40 details how to determine which units/lots are “assisted” or “unassisted” when using NAHASDA. That is, which can be sold or rented to non-low-income (and maybe non-Indian) families based on the amount and type of each source
Slide12Mixed Income: Allocate Eligible Costs: Pro-Rate versus Unit by Unit Calculation
Pro-rating the CostsFor projects where the lots/units are comparable in size, amenities For common costs that benefit all residentsUnit by Unit CostsFor projects where units/lots are not comparable in size, amenities
Slide13Infrastructure – Market vs. LI
$1,500,000 used for 40 lotsNone of the funds have income requirementsAll lots can be sold to market rate buyers$1,500,000 used for 40 lots$300,000 in IHBG = 20% of Total sources20% times 40 lots = 8 lots <=80% USMI (or AMI)
Slide14Mixed Income: Allocating Costs for Mixed Income
40 Units – Comparable Homeownership UnitsProrate NAHASDA/HOME, ICDBG, etc.Amount of restricted funds divided by total eligible costs/sources = %, then multiply total costs/sources by that %Example: $100,000 NAHASDA ÷ $1,000,000 TDC= 10%40 Units × 10% = 4 Units are NAHASDA assisted
Slide15Example A: Comparable Units Homeownership
Prorated Share Allocation of Costs in Mixed Income
Total Units
40
Uses
Total
Per Unit
Land
$80,000
$2,000
Infrastructure/Roads
$360,000
$9,000
Community Center
$375,000
$9,375
New Construction
$6,080,000
$152,000
Financing Costs
$25,000
$625
Professional Fees
$40,000
$1,000
Subtotal
$6,960,000
$174,000
Developer Fee
$208,800
$5,220
Total Costs
$7,168,800
$179,220
Sources
Total
% of Sources
IHBG
$2,500,000
35%
Bank
$1,500,000
21%
Program Income
$2,000,000
28%
Tribal Funds
$1,168,800
16%
$7,168,800
100%
Gap
$-
0%
NAHASDA Assisted Units
14
Total NAHASDA ÷ Total Sources = % of NAHASDA Funds. Multiply that Percentage Times the Number of Total Units = NAHASDA Assisted Units
Slide16Mixed Income: Allocate Cost for Non-Comparable
40 Units – Non Comparable UnitsTally costs for LI versus Market unitsPro-rate site/common, if comparable, by number of units, then multiply by LI unitsPJ’s may not allow non-comparable units on HOME
Slide17Example B: Non Comparable Units Homeownership
Total
Basic
Moderate
High
Number of Units
40
10
20
10
Desired # of Affordable Units in Basic
10
Uses
Total
Per Unit
Per Unit
Per Unit
Desired # of Affordable Units in Moderate
5
Land
$80,000
$2,000
$2,000
$2,000
Total Affordable Units
15
Infrastructure and Related Costs
$360,000
$9,000
$9,000
$9,000
Desired # of Market Rate in Moderate
15
Community Center
$375,000
$9,375
$9,375
$9,375
Desired # of Market Rate in High End
10
New Construction - Basic
$1,520,000
$152,000
Total Market Rate Units
25
New Construction - Moderate Design
$3,675,000
$-
$183,750
New Construction - High End
$2,070,000
$-
$207,000
Costs For Units by Income and Type
Total
Financing Costs
$25,000
$625
$625
$625
Basic and Moderate Units for Affordable
$2,438,750
Professional Fees
$40,000
$1,000
$1,000
$1,000
Affordable Units - Land/Infrastructure/Common
$330,000
Subtotal
$8,145,000
$174,000
$205,750
$229,000
Developer Fee
$91,631
Developer Fee
$244,350
$6,109
$6,109
$6,109
Total Costs for LI Targets
$2,860,381
Total Costs
$8,389,350
$180,109
$211,859
$235,109
Moderate and High End Units for Market
$4,826,250
Market Units - Land/Infrastructure/Common
$550,000
Sources
Total
% of Sources
Developer Fee
$152,719
IHBG
$1,850,000
22%
Total Costs for Market Rate
$5,528,969
AHP Grant
$150,000
2%
Total Project Costs
$8,389,350
USDA RUS
$1,000,000
12%
Program Income
$1,500,000
18%
-
Total Costs for Comparable Site
$880,000
Tribal Funds
$2,000,000
24%
Per Unit/40 Units
$22,000
CDFI/Bank Loan
$1,889,350
23%
Total for LI Units
$330,000
Total Sources
$8,389,350
100%
Total for Market
$550,000
Gap
$-
0%
Total
$880,000
IHBG Assisted Units
9
Slide18Akwesasne Concept- Infrastructure
Total Units
40
Per Unit
# of Lots Targeted Low Income
# of Lots Targeted Market Rate
20
20
Uses
Total
Land (Donated)
$-
$-
$-
$-
Infrastructure/Roads (w/10% Contingency)
$2,441,680
$61,042
$1,220,840
$1,220,840
Contingency
10%
$244,168
$6,104.20
$122,084
$122,084
Professional Fees
$390,669
$9,767
$195,335
$195,335
Subtotal
$3,076,517
$76,913
$1,538,259
$1,538,259
Planning and Administration
0%
$-
$-
$-
$-
Total Unit Costs
$3,076,517
$76,913
$1,538,259
$1,538,259
Sources
Total
% of Sources
IHBG
$-
0%
State HTF - Loan
$-
0%
ICDBG (In support of new housing)
$605,000
20%
Title VI - Loan
$500,000
16%
USDA RUS
$-
0%
Indian Health Service
$471,517
15%
Other
$-
0%
Tribe - General Funds Grant
$750,000
24%
NM TIF
$750,000
24%
Total Sources
$3,076,517
100%
Gap
$-
0%
Minimum # of IHBG NAHASDA Assisted Units
USMI
0
Meet NAHASDA Minimum?
Yes
Minimum # of Title VI (NAHASDA) Assisted Units
USMI
7
Meet Title VI (NAHASDA) Minimum?
Yes
Minimum # of ICDBG Assisted Units
AMI
8
7.86603812
Meet ICDBG Minimum?
Yes
Slide19Akwesasne Concept: Phase I - 15 Units
Total
1 BR
2 BR
3 BR
4 BR
Vision
BR
Number of Units
20
6
6
8
0
Desired # of Affordable Units
1
4
Uses
Sq Ft
Costs
Total
Per Unit
Per Unit
Per Unit
Per Unit
Desired # of Affordable Units
2
4
Land
$-
$-
$-
$-
Desired # of Affordable Units
3
2
Infrastructure and Related Costs
$-
$-
$-
$-
Desired # of Affordable Units
4
0
New Construction - 1 BR
720
125
$540,000
$90,000
$-
$-
Total Affordable Units
10
New Construction - 2 BR
980
120
$705,600
$-
$117,600
$-
Desired # of Market Rate
1
2
New Construction - 3 BR
1050
98
$823,200
$-
$-
$102,900
$-
Desired # of Market Rate
2
2
New Construction - 4 BR
1250
95
$-
$-
$-
$118,750
Desired # of Market Rate
3
6
Financing Costs
$-
$-
$-
$-
Desired # of Market Rate
4
0
Professional Fees
$75,000
$3,750.00
$3,750
$3,750
$3,750
Total Market Rate Units
10
Subtotal
$2,143,800
$93,750
$121,350
$106,650
$122,500
Developer Fee
0%
$-
$-
$-
$-
$-
Total Costs
$2,143,800
$93,750
$121,350
$106,650
$122,500
Costs For Units by Income and Type
Total
Sources
Total
% of Sources
Affordable
$1,036,200
IHBG
$750,000
35%
Land/Infrastructure/Common
$-
AHP Grant
$100,000
5%
Developer Fee
$-
HUD 184
$750,000
35%
Total Costs for LI Targets
$1,036,200
Tribal Mortgage Program
$543,800
25%
-
Market Rate
$1,107,600
Tribal Funds - Grant
0%
Market Units - Land/Infrastructure/Common
$-
CDFI/Bank Loan
$-
0%
Developer Fee
$-
Total Sources
$2,143,800
100%
Total Costs for Market Rate
$1,107,600
Gap
$-
0%
Total Project Costs
$2,143,800
Total Costs for Comparable Site
$-
Minimum # of NAHASDA Assisted Units
USMI
7
Per Unit/40 Units
$-
Meet NAHASDA Minimum?
Yes
Total for LI Units
$-
Total for Market
$-
Total
$-
Slide20Akwesasne Concept– Putting it Together
Costs Per Unit
*Market Rate
Low Income
20
10
10
Average House Construction
$94,875
$93,330
Infrastructure Costs/Fee
40
$76,913
$76,913
$171,788
$170,243
Totals
$3,420,313
$1,717,881.25
$1,702,431.25
Permanent Financing
Sources
Market Rate Per Unit
LI Per Unit
IHBG
$-
20
$-
$-
State HTF - Loan
$-
40
$-
$-
ICDBG (In support of new housing)
$605,000
20
$-
$30,250
Title VI - Loan
$500,000
20
$-
$25,000
USDA RUS
$-
40
$-
$-
Indian Health Service
$471,517
20
$23,576
$-
Other
$-
40
$-
$-
Tribe - General Funds Grant
$750,000
40
$34,587
$2,913
NM TIF
$750,000
40
$18,750
$18,750
$3,076,517
$76,913
$76,913
IHBG
$750,000
$-
$75,000
AHP Grant
$100,000
$-
$10,000
HUD 184
$750,000
$75,000
$-
Tribal Mortgage Program
$543,800
$19,875
$-
Tribal Funds
$8,330
CDFI/Bank Loan
$-
Total Sources
$2,143,800
$-
$94,875
$93,330
Total Housing and Infrastructure
$5,220,317
$171,788
$170,243
AFFORDABILITY ANALYSIS
Market Rate Payment
Low Income Payment
First Mortgage
$171,788
$845
$108,330
$533
Second Mortgage
$18,750
$95
$21,663
$0
Third Mortgage
$34,587
$0
$10,000
$0
Fourth Mortgage
$-
$0
$30,250
$0
Monthly Insurance Fees/Taxes
$-
$50
$-
$50
Total Housing Costs
$225,125
$990
$170,243
$583
MP/Income
35.00%
30.00%
INCOME REQUIRED
$33,941
$23,317
Higher of Area or US Median Income - HH 2
$57,520
$57,520
% Median
59.01%
40.54%
Local Median Income - HH 2
$43,000
$43,000
% Median
78.93%
54.23%
Slide21Your Housing Market is...
The number of people who want and can afford or want to pay for the housing you are building or rehabilitating
Slide22The Market Study
The market for mixed income housing projects is quantified by a “market study” (ies)A market study is an analysis of your project to see if it will sell or rent as you designed to the targeted market – takes into account supply and demand
Slide23A Market Study Tells You Are...
Targeting the right incomes Setting realistic rents or sale prices Meets funder rulesEstimate of subsidyBuilding the number of units that are needed
Supply and DemandHow many, long it takes to lease-up, sell
Establishing the correct set asides for Market and Affordable
Building the right product in the right place
Size, # of bedrooms, design & aesthetics
Location and site is near services important to the buyer/renter
Meeting the priorities, needs of Tribe
Slide24Market Study Elements
*Site -Location, location, locationMarket Area Information
Economic*Demographic
The waiting list
*Housing Market --
How long will it take to sell or rent-up?
*Demand
How many people want what I am building?
Marketability
*Conclusions
Read me first!
Slide25Levels of Market Study
Basic – the MinimumWaiting lists, focus groups, census data & other Tribal DepartmentsMid-size study All above plus surveys
ComprehensiveAll elements
In house - $300-$500
Small or house-by-house projects or preliminary analysis
In house and 3
rd
party -$1,000 – $2,500
NC land development, larger rehabs
3
rd
Party Qualified Firms - $5,500 - $25,000
LIHTC, bank financed and mixed use
Slide26The Basics for Assessing Your Market
Economic Conditions/Growth Census, Tribal planning and enrollment dataIncomes, family sizes for LI and OIApplications, Waiting List, Surveys, Enrollment Desired, needed housing products for LI and OI Focus Groups, Design Charrettes
Data on the financial fitness, e.g., amount and type of debt The Credit ReportKnowledge of “housing payment shock”
,
“
housing payment tolerance
”
and housing ratios
Slide27The Market and Setting the Housing Payments
Housing Payment Shock The difference between the current housing payment (which may be “zero”) and new housing paymentHousing Payment ToleranceThe amount of rent or mortgage payment a homebuyer or renter wants to pay – may be less than 30% of adjusted income or what they can afford to pay based on lender’s program
Slide28Lender Affordability versus A Family’s Housing Payment Tolerance
Example I: Lender Criteria: What Can I Afford To Pay?
Household income
$30,000
Divided by 12 (monthly income)
$2,500
Allowable installment debt (back end ratio 41%)
$1,025.00
Less existing family installment debt (monthly)
$350
Available for Principal Interest Taxes and Insurance (PITI)
$675
plus rental income
$0
Less insurance (monthly)
$50
Total PITI
$625
Mortgage interest rate
4.25%
Sustainable Mortgage Amount
$127,048
House Price
$175,000
GAP or NEED FOR SUBSIDY
$47,952
Market: What Am I Willing to Pay?
Household income
$30,000
Divided by 12 (monthly income)
$2,500
Allowable installment debt (back end ratio 41%)
$1,025.00
Less existing family installment debt (monthly)
$350
Available for PITI
$675
plus rental income
$0
Less insurance (monthly)
$50
Total PITI
$625
Enter Market Tolerances - What the Buyer is Willing to Pay?
$500
Mortgage interest rate
4.25%
Sustainable Mortgage Amount
$101,638
House Price
$175,000
GAP or NEED FOR SUBSIDY
$73,362
Slide29What is the Market for Mixed Income Housing for Our Project?
Let’s Review the Waiting List
Slide30Will the Buyers and Renters be there when I need them?
OR
Project A
Project B
Slide31Building Demand: What is the
Marketing Plan?A written strategy that helps you build the Pipeline so that buyers/renters are “ready” when construction/rehab is completed
Slide32Marketing Plan Elements
Measurable goals with a timeline Details how will you get customer inputRoles for partners, consultants of staff roles
Budget for each of the activitiesReporting on a weekly or monthly basis to measure goals to actual Plan performance
Be ready to make changes to the Plan if goals are not met!
Slide33Building the Demand Pipeline - Financial Readiness
Challenges
High debt/credit issues, regardless of income limitsBuyer/renter fears on housing costs/payments
Quality, relevance of and access to financial education and credit counseling
Solutions
Be prepared for multi-year credit repair/debt consolidation using fitness plans and one-on-one pre and post closing counseling
Assess need for “softer” loan criteria, more subsidy for rent and mortgage – and then arrange for a variety of individual financing options: Section 184, VA, Tribal credit unions, CDFI’s, Tribal funds
Use Relevant Financial Curricula, without too much adaption and offer it at convenient times
Slide34Building the Pipeline – Location and Product
ChallengesBuyer/renter (and yes, lender) perceptions of “value” of reservation housing Buyer/renter concerns about quality of housing and services/amenities
Solutions
Focus on living near cultural core, desired services and recreation areas....and show financial benefits
Ensure, show construction quality control measures and procedures
Make sure your site is located near services are relevant and affordable
Get community input...
Slide35...Share Site Plan Renditions
Slide36...Get Feedback on Preliminary Home Design Drawings
Slide37.... And Floor Plans
Slide38Four Rules for Implementing a Marketing Plan
DESIGNING AND OPERATING HOMEOWNERSHIP PROGRAMS
ON TRIBAL LANDS
Slide39Marketing Rules
Maintain the PipelineEarly and ongoing intake, applications and pre-qualifying, updated waiting lists, deliver counseling as advertised and close coordination with renters/buyersCommunity events
Accentuate the Positive!Shorter commute, close to cultural activities, tax deductions on mortgage interest, building equity, healthy homes
Slide40Marketing Rules
Marketing campaigns can go stale Make sure you update and refresh materials, review pricing, offer incentives, refresh radio ads Avoid Messaging....That talks about you instead of your product, service
Starts off with all the hoops they have to go through – the process should be seamlessHighlights the negative – crime, overcrowding, etc.
Slide41Realities for Marketing Mixed Income Projects
Units come on line too slow or too fastLack of coordination with other partners, e.g., tribal infrastructure Loss or other changes in financing
Our unit mix is not panning outLoss of major employer (s)
Loss or other changes in financing
Fluctuating, seasonal and subsistence incomes
Not in My Back Yard (NIMBY)
Slide42Realities for Marketing Mixed Income Projects
What is your “Brand”Are you a “full” service housing provider, i.e., not only providing low income housing?Refocus staff so they can shift from a needs driven approach to market driven
Shifts in Tribal PolicySupport may wan, change with new Tribal administrations
Leaders may not support different pricing and benefits for low income versus market rate
Slide43Non-Discrimination Laws & NAHASDA
Be mindful of how you are using the NAHASDA (including Title VI) funds - only projects owned Tribe or TDHE are exempt from these laws if the project is located out of Tribe’s jurisdiction Market/assist only *Indian families for Projects out of Tribal Jurisdiction, if using NAHASDA :
And federal funds (HOME, USDA, ICDBG/CDBG) – “combined funds” based on proportional, pro-rated basis of units (or actual costs if not comparable units) %Alone, 100% of the unitsAnd Private funds (e.g., LIHTC) “leveraged funds”
* NAHASDA Eligible
*Refer to PIH 2010-32 (PIH 2011-40) and as needed work with experienced fair housing lawyers, consultants and HUD ONAP
Slide44Marketing
“Stopping advertising to save money is like stopping your watch to save time.” – Henry Ford
Slide45More Financing Rules for Mixed Income Projects
1.Financing Ratios2. Using NAHASDA/federal funds
Slide461. Financing Ratios and Limits: Homebuyer Qualifying Ratios
Total Debt Ratio
Monthly revolving and housing debt divided by monthly gross incomeHousing Payment RatioMonthly housing payment divided by monthly gross income
Housing Payment “Shock” Ratio
Current housing payment divided by projected new housing payment
*Adjusted income to determine rental/lease purchase housing payment for federal programs
Slide471. Homebuyer Ratios
What is the total debt ratio for a HH earning $30,567 annually with $461 monthly debt and a $300/month housing payment = ____%What is the total debt ratio for the above HH with a housing payment of $550/month = ___%What is the payment shock for the HH? = ___%
Slide481. Financing Ratios and Limits: Loan/Grant Terms and Limits
Acquisition/Rehab: Loan to appraised value (“LTV”) or % of loan to appraised value of land and/or buildings Other maximums apply, e.g., Title VI, HUD 184, USDA 502/504Appraised value of land $255,000 times 60% LTV = $153,000 Maximum LoanFor a 97.75% LTV for an existing home = $249,263 Maximum LoanProject Construction Loans: Debt service coverage ratio (DSCR) for permanent mortgage loans
For “sizing” the mortgage loan. Ratio of the net operating income (NOI) that is available to pay an annual mortgage debt. Ratio set by lender. NOI = $50,000 divided by 1.2 = $41,667 for annual debt service
Slide491. Financing Ratios and Limits: Loan/Grant Terms and Limits
Per Unit and Per Project LimitsHow much can I spend on the lot/unitHow much can I ask for:Homebuyer Down Payment2.25%-20% from homebuyer fundsConstruction/Permanent loan interest rate, terms
Rates – VaryTypical: 2-5 Years Construction 15-30 years Permanent
Slide502. If we are using NAHASDA…
We can commit the amount of IHBG needed and the activity is in my IHPDo you have an Over Income and Essential Family (OIEF) policy and procedures to assist over 80% to 100% families with NAHASDA? [PIH 2014-02]Over-income families that have housing need and “but for” NAHASDA, their housing need cannot be metCan allocate 10% of annual IHBG w/o HUD approval – If family is “essential” or law enforcement , they can receive same amount as LI and 10% limit not applicable
Policy includes rationale for demonstrating need and documentation requirements.
Slide512. If we are using NAHASDA…, cont’d.
Use Proformas to track costs and ensure compliance with Know how fair housing laws apply if you are funding projects, units out of the Tribe’s jurisdiction and the Tribe or TDHE does not own projectDevise the allocation of assistance strategy for using the NAHASDA (and other federal assistance) early in the process and review, adjust along the wayHow many LI (or NAHASDA assisted) and market rate units or lots?
Slide522. If we are using NAHASDA…, cont’d.
Devise appropriate project ownership/structures and binding commitmentsHow do we own the project? e.g., Limited Liability Limited Partnership or other entityDo we have mortgage documents or LURAs? Meet with HUD ONAP and other funders to explain your financing and allocation plan, get feedback
Slide53What is a
Proforma? A forecast of the project financing and how you expect the project will turn out Tool to ensure you define/research all your costs and potential sources
Primary method for communication with fundersTest Financial Feasibility Track your costs and sources of fundingExplain how financing flows from and between acquisition/pre-development to construction to permanent
Explain how the unit mix balances out – how many market rate versus affordable units Tells us what the LI and non-LI home buyer can afford to pay which then defines how much, with subsidies, you have to spend to build the homes
Tells us whether there is sufficient cash flow from commercial, retail or housing rental operations to afford a mortgage and the needed rental subsidy and may define needed up-front reserves
Slide54How the Mixed Income Pro-Forma is Different
Development Budget May include fees for origination, inspections and interest with a repayable bank or other loansSources and UsesUse of tribal funds, bank loans, program income, etc.No LIHTC equity, HOME, AHP on commercial/non-LI units/sq. ft. Filling funding gaps that may exist due to timing
of fundsThere may be less (or no) subsidy for non-low income families to help them reach housing payment limits (based on tolerance and debt for homeownership or rental assistance programs).
Slide55Reminder!
The financing does not drive your unit mix – number of assisted versus market rate unitsYour unit mix should be based on the market analysis/studyMonitor your unit mix (and income targets and levels) you update and change sources
Slide56Other Affordability Gaps for Homeowners/Buyers
Slide57Other Affordability Gap Factors in Homeownership
Cost of Housing and IncomesDebtInterest RatesImpacts LI and Market Homebuyers
Slide58Example C: Cost of Housing and Income/Debt
Example H - Homeownership Affordability Gap - Higher Debt
Market (Non-LI)
LI
Sales Price/TDC
$300,000
$250,000
HH Size
4
4
USMI
98.8%
60.8%
Annual Income/Target Market
$65,000
$40,000
Monthly Income
$5,417
$3,333
Maximum Debt Ratio
41%
41%
Maximum Monthly Debt
$2,221
$1,366.67
Loan Interest Rate
4.50%
4.50%
Loan Term
30
30
Sustainable Mortgage Assuming No Debt
$438,306
$269,727
Estimated Monthly Revolving Debt (Calculated per Lender Criteria)
$750
$350
Non Housing Debt to Income Ratio
14%
11%
Balance for Housing Payment
$1,471
$1,017
Sustainable Mortgage
$290,285
$200,651
Subsidy Gap and Amount Needed for Affordability
$9,715
$49,349
Enter Estimated Number of Affordable and Market Rate Units
15
10
Subsidy Based on Project Size
$145,719
$493,495
Slide59Example D: Interest Rates and Reaching Income Targets
Loan @
4.00%
Mortgage Loan
$100,000
Interest Rate
4.00%
Term (years)
30
Housing Payment
$477.42
Affordable to a Family Earning (30% housing payment)
$19,096.61
Loan @
6.00%
Mortgage Loan
$100,000
Interest Rate
6.00%
Term (years)
30
Housing Payment
$599.55
Affordable to a Family Earning (30% housing payment)
$23,982.02
Slide60What Next?
Attend trainings Reach out for other models, adapt to fit, if feasible.Meet with lenders/funders Do a market studyStart the design/pro-forma “loop” and set a schedule