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HAC’s Mission

Housing Assistance Council Building Rural Communities since 1971 Southeast Regional Mutual Self-Help Housing Conference “Other Funding Sources” Wednesday, June 19, 2013. HAC’s Mission.

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HAC’s Mission

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  1. Housing Assistance CouncilBuilding Rural Communities since 1971Southeast Regional Mutual Self-HelpHousing Conference“Other Funding Sources”Wednesday, June 19, 2013

  2. HAC’s Mission “Improve housing conditions for the rural poor with an emphasis on the poorest of the poor in the most rural places.” Loan Fund Objective Help establish and strengthen a housing delivery system that will provide, on a continual basis , additional decent, safe, and affordable houses in rural areas for low-income people.

  3. Housing Assistance Council • Established in 1971 • National nonprofit organization • AAA+2 CARs rated CDFI • Provide services to local, state, and national nonprofit organizations and developers • High needs areas: Indian County, Southwest Border Colonias, Mississippi Delta, and Appalachia • High needs groups: farm-workers and minorities

  4. Housing Assistance Council • HAC emphasizes: • Local Solutions • Empowerment of the poor • Reduced dependence • Self-Help strategies • Homeownership • Safe and Sustainable communities

  5. Services Offered • Technical Assistance & Training • Loan Funds • Research, Publications & Information

  6. HAC Loan Funds

  7. HAC Loan Funds(from inception to March 31, 2013) • Loan Fund Capitalization • $62.0 million (includes SHOP & other loans) • 67% equity; 33% debt investments • Approved Commitments • $300 million • 2,244 loans • 68,301 housing units and water/sewer connections • Current Loan Portfolio • 165 loans = $36.5 million • 80 borrowers = 37 states

  8. Rural Housing Loan Fund • Uses • predevelopment • land acquisition • site development • construction up to $750,000 • gap/interim • Land banking • Loan fund investment • Structure: • Up to five years • Interest rate • 5% nonprofits; • 8% for-profits • Quarterly interest payments • 1% service fee • Maximum 100% LTV • Adequate security/collateral • Committed take-out source

  9. Pre-Development Standard 3 year term or less 1% HAC service fee No maximum loan amount Maximum 100% LTV Security of lien position on real property and/or assignments and UCC-1 filings on unrestricted net assets of borrower. Repayment typically upon sale of developed lots or closing of construction/permanent financing

  10. Construction Loans $750,000 cap per loan and borrower Standard 2 year term with option to extend for 1 year. A 1% extension fee applies. 1% HAC service fee Maximum 100% LTV as supported by current appraisal Security of lien position on the project property Repayment upon sale of developed lots or closing permanent financing Permanent, take-out financing committed prior to disbursement.

  11. Preservation Revolving Loan Fund • Focus • Preservation of at risk USDA-financed multifamily, elderly or farm-labor rental complexes. • Structure: • Up to 15 years amortized over 30 years • Interest rate • 5% nonprofits • Quarterly interest payments • 1% service fee • Maximum 100% LTV • Adequate security/collateral • Repayment structure: operating income of project, permanent financing. • Uses • predevelopment • land acquisition • rehab • Equity by USDA approval only

  12. Site Acquisition Standard 5 year term 1% HAC service fee Maximum 100% LTV as supported by current appraisal Security of lien position on the project property Repayment upon sale of developed lots or closing of construction/permanent financing

  13. Eligible Borrowers • Community-based nonprofit organizations • Housing development corporations • Farm worker organizations • Housing cooperatives and condo associations • Native American tribes • Public agencies and units of local government • Public utility districts

  14. Eligible Projects • Located in areas, which are rural in character (preference for projects located in towns with populations of less than 25,000) • Serve low- to very- low income persons, which includes persons earning less than 80% AMI • Minimum of 51% of the resulting housing units must be affordable to low- or very-low income people

  15. Uses • predevelopment • land acquisition • site development • construction • preservation • gap/interim Structure • loans • guarantees • compensating deposits • letters of credit • lines of credit Loan Uses & Structure

  16. Acquisition and infrastructure development of a subdivision for affordable housing units. • Acquisition and site development of scattered site lots for self-help unit construction. • Acquisition and rehab of existing apartment complex serving farm-workers or other workforce group. • Acquisition loan to tenants of manufactured • housing community seeking to cooperatively purchase the park. • Loan to another nonprofit lender to capitalize their rural lending initiatives ( water/sewer, rehab loan program). Sample Projects

  17. Self-Help Homeownership Opportunity Program (SHOP) • The SHOP program is authorized under Section 11 of the Housing Opportunity Program Extension Act of 1996 • Funded through the U.S. Department of Housing & Urban Development (HUD) • Provides grant monies for land acquisition and infrastructure improvement costs associated with the development of self-help units

  18. Land Acquisition • Purchase of real property pursuant to a deed or minimum 25 year lease • Financing and closing costs associated with the land acquisition transaction • Infrastructure Improvements • Water & sewer lines (or wells & septic) • Roads, curbs and gutters, sidewalks • Utilities, gas, electric • Environmental testing & remediation • Soft costs (legal, closing, etc.) SHOP Eligible Activities

  19. HUD requirements • Public or private nonprofit organization under federal or state law • 100+ hours of family sweat equity labor • $15,000 per unit maximum • Rural or urban areas • HAC requirements • Competitive review • Security required • Ongoing reporting required • 0% interest • 90% forgivable upon unit completion and other loan agreement condition SHOP Program Design

  20. SHOP Grant Conversion Funds • Subsidize lot costs (keep $$ in project) • Loans/Grants to families • 5-year, 30-year loans • soft seconds • Capitalize internal development fund • SHOP-eligible uses ONLY

  21. Loan Process • Inquiry/Pre-screening. • Submission of loan application. • Comprehensive underwriting process. • Internal management review. • Loan committee review. • If accepted, loan commitment issued. • Pre-closing conditions satisfied before disbursement of funds. • Loan closing and disbursement. • Servicing/monitoring loan throughout the term of the loan. • Full repayment of loan.

  22. HAC Loan Fund at a Glance

  23. Contact InformationHousing Assistance Council(202) 842-8600 (202) 347-3447 Fax

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