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U. S. Department of Housing and Urban Development September 13, 2005

U. S. Department of Housing and Urban Development September 13, 2005. What Does HUD Do?. In the State of Indiana HUD insured more than 26,000 Single Family mortgages last year HUD also insures mortgages on more than 600 Multi-Family properties, representing more than 58,000 total units

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U. S. Department of Housing and Urban Development September 13, 2005

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  1. U. S. Department of Housing and Urban Development September 13, 2005

  2. What Does HUD Do? In the State of Indiana • HUD insured more than 26,000 Single Family mortgages last year • HUD also insures mortgages on more than 600 Multi-Family properties, representing more than 58,000 total units • (More than 41,000 of those units have Section 8 subsidy) • Subsidizes 66 Public Housing Authorities plus the State of Indiana - 54,000 units of PIH and Section 8 • Provides CDBG funds to 24 Entitlement Communities and the State of Indiana, totaling over to $78 million for FY 2005 • Total HUD grants to Indiana last year - $545 million

  3. Affordable Housing Needs • According to the State’s most recent Consolidated Plan: • Shortage of 152,000 housing units for extremely low income people • earning less than 30% of median household income • More than 187,000 households are paying more than 30% of their income for housing costs

  4. 2001 GAO report – Only one-third of Eligible very low-income renter households receive housing assistance

  5. HUD Affordable Housing Programs • CDBG • HOME • Section 8 Homeownership • Single Family Programs • 203(b) mortgage insurance program • Good Neighbor Program • Teacher Next Door • Officer Next Door

  6. Community Development Block Grant • State of Indiana - $78,271,273 • Indiana Office of Rural Affairs ($34,933,351) • Reallocates $5,000,000 to IHFA • Assisting homebuyers directly through downpayment assistance or a revolving loan fund for first-time buyers. • Reconstructing or rehabilitating housing • Acquiring property

  7. HOME Funds • State of Indiana - $30,192,799 • IHCDA receives $16,320,149 • Allowable activities • build, buy or rehabilitate affordable housing • rental or homeownership • rental assistance to low-income people • grants, direct loans, loan guarantees or other forms of credit enhancement

  8. Section 8 Homeownership • Homeownership Rule - published September 11, 2000 • Effective October 12, 2000 • PHA option • Offer • whether to limit number

  9. Section 8 Homeownership • Limitations • Can be used for up to 15 years for mortgages 20 yrs or more, 10 years for shorter term(elderly & disabled exempt) • Must have income = 2,000 hrs @ minimum wage ($5.50 x 2,000). Welfare assistance to elderly or disabled must be counted toward income requirement • One or more adult family members must be employed at least 30 hrs per week

  10. Section 8 Homeownership Programs • Active programs • Bloomington • Columbus • Fort Wayne • Goshen • Indianapolis • Lafayette • Michigan City • State of Indiana FSSA

  11. Example of Sec 8 Voucher Fair Market Rent = $500 SSI = $521 If apartment rents for $510 Section 8 pays $344 Tenant pays $166 (33%) Sec 8 pays difference between FMR of $500 and 30% of tenant income ($156)

  12. Single Family Housing Programs

  13. Single Family Mortgage Insurance • 203(b) FHA Mortgage Insurance • More flexible underwriting terms than a conventional mortgage • Low downpayment requirements • Protects lenders against default risk • Many closing costs can be financed

  14. Discounted Sales of REO Properties • Sales to Non-profits • 10% to 30% discount • Officer/Teacher Next Door • 50% discount • Must be in revitalization area • Good Neighbor Program • Sale to city for $1

  15. Revitalization Areas • Revitalization areas are HUD-designated neighborhoods in need of economic and community development and where there is already a strong commitment by the local governments. • Census Tracts or blocks in Zip Codes • East Chicago, Elkhart, Fort Wayne, Gary, Indianapolis, New Albany, Terre Haute

  16. FHA Rehab Loans • 203 (k) Rehab Loan • Purchase/Refinance and Rehab Loan • Must have at least $5,000 in rehab work • Title 1 Rehab Loan • Insures loans to finance the light or moderate rehabilitation of properties. • Limit of $25,000 in loan amount. Can be used for accessibility rehab

  17. MultiFamily Housing Programs • Production Programs • Elderly Housing (Section 202) • Supportive Housing for Persons with Disabilities (Section 811) • Grants to nonprofit sponsors to build or rehabilitate rental housing for low-income elderly/disabled with support services • Rental assistance to residents covering the difference between monthly operating cost and 30 percent of residents adjusted income

  18. Housing Assistance Review Team The Indiana Housing Assistance Review Team (IHART) is a group of representatives from various state and federal agencies that provides assistance and guidance in exploring financial options for community housing developments.

  19. IHART Process • Submit In-Take Document with attachments to IRDC • Project will be discussed at IHART meeting • Letter of funding options available sent to community • Follow-up with community

  20. Benefits of IHART • Provides “one-stop shopping” for communities • Early identification of potential funding sources • Identifies partnering opportunities • Early notice to funding agencies of communities’ options

  21. Tips for IHART Success • Present project ideas early in planning stages • Provide as much information as possible • Follow-up on suggestions from team • Contact agency representatives for additional assistance

  22. How to Access HUD Programs • Through Your City or the State of Indiana • CDBG, HOME • HUD SuperNOFA Application • Available on our web site: www.hud.gov • HUD Approved FHA Lender • 203(b) • 203(k) • REO Sales • Available on web site: www.hud.org

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