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Resource Horizon for Affordable Housing Preservation

Resource Horizon for Affordable Housing Preservation. Arizona Affordable Preservation Summit February 25, 2011 Jim Beachler JMB Preservation Advisors Jimbeachler@comcast.net. Fractured Housing Markets; Affordability Redefined . Housing Market Disarray Foreclosure

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Resource Horizon for Affordable Housing Preservation

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  1. Resource Horizon for Affordable Housing Preservation Arizona Affordable Preservation Summit February 25, 2011 Jim Beachler JMB Preservation Advisors Jimbeachler@comcast.net

  2. Fractured Housing Markets; Affordability Redefined • Housing Market Disarray • Foreclosure • Financial Market Upheaval • Affordable Rental Housing Market Redefined • Job loss = doubling up; Halt to New Construction • National Rental Vacancy rate 10.6% in 2010 • Despite an increase of 800,000 Households

  3. Market Disarray and Responses • LIHTC Market • TCAP and TECP • Neighborhood Stabilization Program • New Issue Bond Program • HOME and CDBG; Other Local Resources • Alternative Funding Resources • Energy Monies

  4. NSP Basics and Affordability • Three Rounds totaling 7 Billion • Round 2 competitive; 1 and 3 = Entitlement • 25% of total Grant - < 50% median • Grantee choice re: Rental or Homebuyer • Use restriction Provisions choice of Grantee • Many follow HOME Program as Safe Harbor

  5. NSP Property Types • Foreclosed • 60 days delinquent under MBA delinquency calculations and owner notified • Property owner 90 days or more delinquent on tax payments • Foreclosure proceedings initiated or completed • Foreclosure proceedings complete, title transferred to intermediary that is NOT an NSP grantee, sub-contractor, or developer

  6. NSP Property Types • Abandoned • Mortgage/tax/tribal leasehold no payments 90 days • Code inspection determines not habitable and no corrective action within 90 days • Subject to court-ordered receivership/nuisance abatement or state definition of abandoned • Vacant • Unoccupied structures or vacant land that was once developed

  7. Tax Exempt Bond Market • Continues to be important to Preservation Market • New Issue Bond Program 2009 initiative • Treasury Department purchased $18.5 Billion • $6 Billion for Multifamily • Expenditure deadline extended through 2011 • Leveraged other resources (LIHTC, HOME, etc.) • Also provided Liquidity for HFA Variable Rate Bonds • Volume Cap Tax exempt Bonds Important to Rental Housing finance efforts

  8. Treasury / HUD Report to Congress(Reforming Housing Finance Market - 2/11) • Four Priorities Referenced, including • Commitment to affordable rental housing • Flexible / transparent funding of targeted affordability • 100 million renters • 25% of all renters pay 50% of income for rent • For every 100 extremely low income renters (< 50 of median) – 32 adequate rental homes • Small Properties contain 1/3 of all rental apartments

  9. Creativity and Focused Resources • Budget Deficits = importance of wise expenditures • Locally Designed and targeted • NSP Funds / other resources may Revolve • Gap Financing Key for Affordability • Rural Housing 515 Loan Subordination – other creative solutions are critical • Energy Resources – Utility Company / other

  10. Preservation Challenge Continues • Importance of protecting housing resources • LIHTC Expiring use, Section 8, Section 236, RHS 515, other assisted rental properties • New Challenges and Opportunities to employ creative solutions • Lessons learned from recent housing upheaval • Array of Resources – Information Sharing Key

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