Backup — original pdf

Backup

AHFC Down Payment Assistance (DPA) Program FY26 Program Updates Austin Housing | 8/11/2026 ‹#› Purpose: • Provide an overview of recommended FY26 Down Payment Assistance program updates • Align program with new HUD HOME regulations • Address affordability pressures for low- to moderate-income buyers by raising the DPA amounts ‹#› What’s Driving the Update? Equity and accessibility goals for underserved communities Rapid increase in Austin home prices HUD HOME rule changes requiring affordability alignment Decline in market -rate (price) buyer’s using DPA use since 2020 Elevated mortgage rates, Homeown er's Insurance and HOA fees contribute to reduced buying power ‹#› Affordability Period Alignment Upda te d HUD HOME Afforda bility Pe riods Current Upda te DPA Amounts Up to $14,999 $15,000 up to $40,000 Affordability Periods 5 Years 10 Years N/A DPA Amounts Up to $24,999 Affordability Periods 5 Years $25,000 up to $49,999 $50,000 up to Max 10 Years 15 Years ‹#› Proposed Change: Jurisdiction Expansion Curre ntly: Lim ite d to Aus tin Full-Purpos e Propos e d expa ns ion: Lim ite d Purpos e + ETJ Pe nding HUD a pprova l a s Ma y 2026 ‹#› Proposed Change: Max DPA Amount Increase Current maximum DPA: $40,000 Proposed: Up to 20% of HUD HOME sales price limit For FY26: Up to $88,000, or 20% down payment and closing costs up to the max Needs-based distribution to prevent over-subsidization Expands access to both income-restricted & market-rate homes ‹#› Proposed Change: Repayment Structure All loans remain deferred, forgivable, second lien Market-rate homes: Shared appreciation reintroduced Shared appreciation capped at original AHFC investment Affordable units: no shared appreciation, 2% simple appreciation cap ‹#› Why is Shared Appreciation Returning? (Market Only) Aligns with FannieMae Community Seconds and Industry Standards for Shared Equity program guidance Allows long-term fund recycling Previous model removed in 2023 due to community concerns New version adds borrower protections + repayment caps Key Concern Addressed: The affordability period is reduced to 15 years with a repayment cap never to exceed what was borrowed. ‹#› Modeling Long -Term Homeowner Wealth Through Equity DPA Shared Appreciation Payoff Example DPA 20% Principal Equity Home Price $ 320,000 $64,000 $ 390,078 N/A Year 1 Year 10 $ 256,0000 $ 64,000 $ 214,235 $ 175,843 If a buye r s e lls in ye a r 10, the y would pa y 20% of the ne t proc e e ds m a de from the s a le of the hom e. All DPA re quire m e nts a re c om ple te in ye a r 15. Ye a rs 1-10, DPA princ ipa l a m ount is forgive n m onthly. Ye a rs 10-15 only s ha re d a ppre c ia tion is owe d a s a pe rc e nta ge of a c tua l ne t proc e e ds . ‹#› Program Impacts Expands access to affordable and market-rate homes Supports economic mobility and first-time buyers Improves buyer choice and autonomy Aligns program with federal requirements ‹#›