Item3_CDC_HRLP_Recs _June14_2022 — original pdf

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CDC Presentation Home Repair Loan Programs June 14, 2022 Current Home Rehabilitation Loan Programs (HRLP) Loan Program Home Rehabilitation Loan Program (Rehabilitation) Home Rehabilitation Loan Program (Reconstruction) Holly Good Neighbor Program Services Provided • Repairs to the foundation, roof, plumbing, HVAC, windows, and electrical • Major interior and exterior repairs • Complete rehabilitation of home, reconstruction if needed • Deferred 0% loan, terms up to 15 years. • Complete reconstruction, if • Deferred 0% loan, terms up needed to 30 years. • The repairs were limited to plumbing, electrical, roof, foundation, exterior painting and solar panel installation. • Forgivable 0% loan, terms up to 10 years. Funding Source CDBG Funding Amount Provide funding amount up to $75,000. Up to $110,000 for historical homes. Provide funding amount up to $250,000 for demolish and reconstruction. CDBG Austin Energy $50,000 MFI% At or below 80% At or below 80% At or below 100% 2 Home Rehabilitation Loan Program (HRLP) purpose and services Loan Program Home Rehabilitation Loan Program How does HRLP work? • No interest or monthly payments, but a lien is placed against the property. • The home must remain the primary residence of the homeowner for the entire term • • of the loan. If the owners choose to sell or rent the home, transfer title, refinance or draw an equity loan within 15 years of the loan, the amount owed on the loan due and payable. If it is necessary to demolish and replace the home, owners may be eligible for a loan up to $250,000 for a term of 20 years, with a 25% shared equity lien on the home for an additional 10 years, for a total of 30 years on the lien. Eligibility Requirements • The home is within the Austin city limits. • The home is a single-family detached home. It must be the primary residence of the • The applicant must own the property. Owner has clear title on the property (reconstruction), and ownership is in his/her name. • Applicant has not been discharged from bankruptcy less than two years of • Applicant must have a gross annual income at/below 80% Median Family Income applicant. application date. (MFI). 3 Housing and Urban Development Affordability Period Home Assistance Per Unit or Buyer Length of Affordability Period Less than $15,000 $15,000 - $40,000 More than $40,000 New construction 5 Years 10 Years 15 Years 20 Years 4 Active Vs Released Loans 120 100 80 60 40 20 0 Active Released HRLP 102 94 HRLP S/E 30 7 HOLLY 6 5 Loan Program Released Amount HRLP - Rehabilitation HRLP- Shared Equity $ 4,733,086.18 $ 690,145.73 Holly $172,260.52 5 Revolving loan 6 Appreciation from Original Loan Amount for 30 HRLP S/E Homes 800,000.00 700,000.00 600,000.00 500,000.00 400,000.00 300,000.00 200,000.00 100,000.00 0.00 Original Loan Amount TCAD Appraised Value 2021 7 Sample of how the homes Appraisal values increased from construction to 2021 $800,000.00 $700,000.00 $600,000.00 $500,000.00 $400,000.00 $300,000.00 $200,000.00 $100,000.00 $0.00 TCAD Appraised Value at Closing date TCAD Appraised Value 2021 8 Summary for 30 Active S/E homes based on Council District 63% E / S P L R H e v i t c A 20 18 16 14 12 10 8 6 4 2 0 27% 7% 3% 1 2 3 4 0% 5 0% 6 0% 7 0% 8 0% 9 0% 10 Council District 9 Current Loan Portfolio Loan Portfolio HOLLY HRLP- Rehabilitation Projects HRLP Shared Equity- Reconstruction Projects Number of active Loans 6 loans 102 loans 30 loans Funded Amount Range Range from $16,470.29 to $34,304.77 Range from $4800 to $74,700 Range from $84,156.50 to $129,866.04 Term 10-year term 10 to 20 year term 30-year term 10 Staff Recommendation • Holly Action: • HRLP Shared Equity Action: • HRLP Action: The 10-year term is already aligned with the HUD Affordability Period. No action required. Align the 30-year term with HUD’s Affordability Period of 20 years. Forgive $990,175.21. No principal amount or equity due to the City after 20 years. 46 loans are aligned with the HUD Period Already. No action required 36 loans are 5 years over the HUD Affordability Period. Forgive $482,491.95 4 loans are 10 years over the HUD Affordability Period. Forgive $54,740.31 16 loans are 15 years over the HUD Affordability Period. Forgive $636,423.48 11 Staff Recommendation All Programs Action: • Align terms with the HUD Affordability Term • Loan changed from deferred to forgiven • Assumption: Someone else, at or below 80% Median Family Income, can assume the remainder of the loan at sell or death of the client • • Implement staff recommendations in a temporary waiver for new loans. Implement staff recommendations in the next program guidelines, 2022 12 Thank You Questions? Please call 311 or 512-974-3100 or email to HPDCS@austintexas.gov AustinTexas.gov/HomeRepairs Short form link for Home Repair Programs  https://bit.ly/ATXHomeRepair