housing assistance council building rural communities since 1971 southeast regional mutual self-help...
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Housing Assistance Housing Assistance CouncilCouncil
Building Rural Communities since Building Rural Communities since 19711971
Southeast Regional Mutual Self-HelpSoutheast Regional Mutual Self-Help Housing Conference Housing Conference
“Other Funding Sources”“Other Funding Sources”
Wednesday, June 19, 2013Wednesday, June 19, 2013
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HAC’s MissionHAC’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 ObjectiveHelp 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.
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Housing Assistance Housing Assistance CouncilCouncil
• 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
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Housing Assistance Housing Assistance CouncilCouncil
HAC emphasizes:
Local Solutions
Empowerment of the poor
Reduced dependence
Self-Help strategies
Homeownership
Safe and Sustainable communities
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Services OfferedServices Offered
Technical Assistance & Training
Loan Funds Research,
Publications & Information
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HAC Loan FundsHAC Loan Funds
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HAC Loan FundsHAC Loan Funds(from inception to March 31, 2013)(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
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Rural Housing Loan Rural Housing Loan FundFund
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
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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
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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.
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Preservation Revolving Preservation Revolving Loan Fund Loan Fund
Uses•
predevelopment
• land acquisition
• rehab• Equity by USDA
approval only
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.
FocusPreservation of at
risk USDA-financed multifamily, elderly or farm-labor rental complexes.
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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
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Eligible BorrowersEligible 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
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Eligible ProjectsEligible 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
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Loan Uses & Loan Uses & StructureStructure
Uses• predevelopment• land acquisition• site development• construction• preservation• gap/interim
Structure• loans• guarantees• compensating
deposits• letters of credit• lines of credit
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Sample ProjectsSample Projects 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).
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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
Self-Help Self-Help Homeownership Homeownership
Opportunity Program Opportunity Program (SHOP)(SHOP)
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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 ActivitiesSHOP Eligible Activities
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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 DesignSHOP Program Design
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• 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
SHOP Grant Conversion SHOP Grant Conversion FundsFunds
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Loan ProcessLoan Process1. Inquiry/Pre-screening.2. Submission of loan application.3. Comprehensive underwriting process.4. Internal management review.5. Loan committee review.6. If accepted, loan commitment issued.7. Pre-closing conditions satisfied before
disbursement of funds.8. Loan closing and disbursement.9. Servicing/monitoring loan throughout the
term of the loan.10.Full repayment of loan.
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HAC Loan Fund at a HAC Loan Fund at a GlanceGlance
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Contact InformationContact InformationHousing Assistance CouncilHousing Assistance Council
(202) 842-8600 (202) 347-3447 Fax(202) 842-8600 (202) 347-3447 Fax