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

(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

Affordable Housing NeedsAccording 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 incomeMore than 187,000 households are

paying more than 30% of their income for housing costs

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

Eligiible Very L0w-Income Renter Households

4.3 million assisted households

4.9 million unassisted households

3.9 million unassisted households Pay 31% -

50% of income for rent

Pay 30% of income for rent

Pay over 50% of income for rent

HUD Affordable Housing Programs

CDBGHOMESection 8 HomeownershipSingle Family Programs

203(b) mortgage insurance program Good Neighbor Program Teacher Next Door Officer Next Door

Community Development Block Grant

State of Indiana - $78,271,273Indiana 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 housingAcquiring property

HOME Funds

State of Indiana - $30,192,799 IHCDA receives $16,320,149Allowable activities

build, buy or rehabilitate affordable housingrental or homeownershiprental assistance to low-income people grants, direct loans, loan guarantees or

other forms of credit enhancement

Section 8 HomeownershipHomeownership Rule - published

September 11, 2000Effective October 12, 2000PHA option

Offerwhether to limit number

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

Section 8 Homeownership Programs

Active programs– Bloomington– Columbus– Fort Wayne – Goshen– Indianapolis– Lafayette– Michigan City– State of Indiana FSSA

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)

Single Family Housing Programs

Single Family Mortgage Insurance

203(b) FHA Mortgage InsuranceMore flexible underwriting terms than a

conventional mortgageLow downpayment requirementsProtects lenders against default riskMany closing costs can be financed

Discounted Sales of REO Properties

Sales to Non-profits10% to 30% discount

Officer/Teacher Next Door50% discountMust be in revitalization area

Good Neighbor ProgramSale to city for $1

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

FHA Rehab Loans

203 (k) Rehab LoanPurchase/Refinance and Rehab LoanMust 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

MultiFamily Housing Programs

Production ProgramsElderly 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

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.

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

Benefits of IHART

Provides “one-stop shopping” for communities

Early identification of potential funding sources

Identifies partnering opportunitiesEarly notice to funding agencies of

communities’ options

Tips for IHART Success

Present project ideas early in planning stages

Provide as much information as possibleFollow-up on suggestions from teamContact agency representatives for

additional assistance

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