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Michigan State Housing Development Authority Office of Community Development Bill Parker Field Services Office of Community Development
MSHDA MISSION MSHDA provides financial and technical assistance through public and private partnerships, to create and preserve decent, affordable housing for low and moderate income Michigan residents.
County Allocation • All Michigan counties not funded directly by HUD receive an allocation of State of Michigan CDBG funds from MSHDA for housing – based on the population • All Michigan counties are eligible to receive funds from MSHDA (except Genesee, Kent, Macomb, Oakland, Washtenaw, and Wayne who are funded by HUD directly) • Lake County chooses not to participate
County Allocation • The primary activity undertaken by the counties is homeowner rehabilitation. • At least 85% of funds are for rehabilitation that brings the house up to at least HUD Minimum Housing Quality Standards (HQS). • Up to 15% of the funds can be used for emergency repairs and HQS standards are not required. • In 2009 County allocation grantees completed 477 homeowner rehab. projects totaling $6,025,000. Average CDBG cost was $12,700. (maximum loan is $35,000 – deferred no payment loan – repayable at sale or transfer) • Counties used program income funds to complete approximately 200 other projects in 2009.
Housing Resource Fund • Approximately $6-10 million in 2010* • HOME funds • CDBG for housing • MSHDA funds (limited funding – if any) • * Estimate, not including County Allocation funds
Housing Resource Funds (HRF) are used to assist low-income households with incomes at or below 80% of the “Area Median Income (AMI) as adjusted for family size” . Some HRF components are targeted to lower incomes.
HRF Desired Result All communities will be vibrant, sustainable, affordable, and diverse places, where people choose to live and stay.
HRF Eligible Applicants Community Housing Development Organizations (CHDOs) and nonprofit organizations. Any non-PJ Unit of Government
A Nonprofit in a Local HOME Participating Jurisdiction (PJ): Must have been approved by MSHDA as a CHDO; Must leverage 100% of the HRF request from the local PJ.
HRF Funds are Targeted All HRF funds should be targeted to achieve our desired outcome, to help create healthy communities and neighborhoods.
Homeowner Assistance Homebuyer Assistance Rental Rehabilitation Neighborhood Preservation HRF Components:
Homeowner Assistance • Enables existing homeowners to do moderate rehabilitation. • Allowed as part of County Allocation program or Neighborhood Preservation Program or other targeted approach • Incentive for homeowners in targeted programs – 50% of OCD funds forgivable over 5 years
Targeted Homeowner Applicants are encouraged to apply for targeted HO rehabilitation programs that do not duplicate County Allocation Programs. Appropriate target areas are where other HRF (or other MSHDA) investments have occurred – around downtowns including Mainstreet and Blueprint DTs , NPP areas, NEZs etc.
Leveraging for HO Projects MSHDA encourages leveraging with other sources MSHDA will pay up to 10% of funds leveraged as a project delivery fee Collaboration with weatherization encouraged ($200 Million dollars available in 2009-2011 for weatherization in Michigan) Visit www.mcaaa.org to find program near you
Leveraging, cont. Federal Home Loan Bank of Indianapolis is another leveraging source for homeowner and homebuyer programs MSHDA OCD will pay FHLB Lender up to $200 for providing a NIP loan to an OCD funded HO project USDA RD funds may be available in rural areas Participation in MSHDA PIP encouraged
Homebuyer Assistance Homebuyer Purchase Rehabilitation Grantees may help buyers select a home they can afford in the local market and manage the necessary rehabilitation. Activities usually involve moderate “rehabilitation” and “down payment assistance”.
Homebuyer Assistance Acquisition, Development, Resale Grantees may develop property for resale in local target area. Activities usually involve “acquisition”, substantial “rehabilitation”, and/or “new construction”. Poor homebuyer market means ADR programs more risky (60 unsold ADR units currently). Funding for ADR VERY limited.
Homebuyer Assistance Down Payment Assistance (without rehab) Available through MSHDA’s LINKS to Homeownership Program Contact MSHDA’s Homeownership Division at 517-373-6840
Homebuyer Assistance NSP 1 Down Payment Assistance (with rehab) Available through MSHDA’s Homeownership Program Foreclosed properties in high foreclosure risk areas Up to $25,000 in DPA plus rehab. funds – MSHDA 1st NSP 2nd mortgage is forgivable over 10 years Contact MSHDA’s Homeownership Division at 517-373-6840
Rental Rehabilitation Generally done through local units of government with code enforcement. Targetted residential or city-wide – only funded with HOME up to $14,999 Landlords must provide at least 25% of the project cost. Downtown rental program (creating space above commercial store fronts) - or in NPPs, is a higher priority for OCD
Downtown Rental Rehabilitation • Non CDBG Entitlement eligible for CDBG – Entitlement Cities can apply for HOME funding • Preference given to: • High capacity communities, (we encourage counties to apply) • Projects ready to go (leverage financing in place) • Strong local support – tax incentives (NEZs, Brownfields etc) • Mainstreet and/or communities with Historic designation • Larger projects (4-16 units) must have strong financial sponsor, evidence of market and long term financial viability
Rental Rehabilitation Recent change: Up to $40,000 per unit in HOME funds is now allowed for creating new units above commercial space in downtown buildings
Rental Rehabilitation Compliance CDBG: Initial Tenant on 51% of units below 80% AMI – FMR for 51% of units Units must stay rental & meet HQS- 5 yrs HOME: Initial tenants below 60% AMI, subsequent below 80% (all HOME Units) Lower of FMR or HOME rent for compliance period 5 yrs - $14,999 10 yrs $15,000-$40,000 HOME $s
Neighborhood Preservation Primarily a HOUSING strategy, combining HRF components. Includes non-housing activities. Provides support for comprehensive housing and neighborhood revitalization efforts in a target area. Funding for planning grants usually precedes funding for projects.
“Neighborhood Preservation” activities that support the targeted housing improvement strategy: Demolition Public Improvements Beautification Marketing and Education, and Business District Improvement Neighborhood Preservation
You may apply for more than one HRF component at a time if.. The housing problems you are addressing require multiple approaches, and; Your application demonstrates that your organization has the capacity to implement a more complex program.
To Apply for HRF Funds: Use the “Planning for Results” section of the Housing Resource Fund (HRF) Guide available at the MSHDA Web-Site www.michigan.gov/mshda with your organization’s leaders to identify the changes you want to see in your target area as a result of your proposed housing project.
To Apply for the HRF: Use the HRF Summary to determine funding for activities under each component. Complete application online during an HRF funding window. NPP projects may be submitted outside the application windows (are not yet on-line).
2010 HRF Application Windows Round I: Spring April 19 – 30, 2010 Round II: Fall September 20 – October 1, 2010
Other MSHDA HOME Programs • Multi-Family Development including Supportive Housing Projects • John Hundt 517-241-7207 • Cities of Promise: Benton Harbor, Detroit, Flint, Highland Park, Hamtramck, Muskegon Heights, Pontiac, and Saginaw • Call CD Specialist
Homeowner Requirements: Gross annual income cannot exceed $65k, and up to $74,750 in some areas. Borrow up to $25k without equity; up to $50k with equity. Up to 20 years to repay. Interest rates 4%, 6% or 8% based on gross household income. Most rehabilitation/improvements eligible (no luxury improvements) Manufactured and mobile homes subject to lower loan limits and shorter repayment period. Property Improvement Loan Landlord Requirements: No income restrictions. Borrow average of $12k per unit, $60k per address; no max per borrower OR; Borrow max $25k per unit, $100k max regardless of address. Up to 20 years to repay. Interest rate flat 8%. Most rehabilitation/ improvements eligible (no luxury improvements) 1-24 units, rents cannot exceed current MSHDA rent limits. Homeowner and Landlord Requirements: Minimum credit score of 620 (660 in certain cases). DTI cannot exceed 45%.
Public input requested on draft C-Plan HOME, CDBG, ESG, HOPWA www.michigan.gov/mshda Please read draft plan and submit comments as desired 2010 Consolidated Plan
Questions?… Call your CD Specialist OCD Contact info