2019 community investment workshops
TRANSCRIPT
Affordable Housing Program
Homeownership InitiativesHOP, NIP, and AMP
Community Investments Program and Elevate
Today’s Agenda
O V E RV I E W
• Cooperatives created by Congress in 1932
• 11 regional banks with over $1 trillion in total assets
• Member owned – only members can access products/services
• Each FHLBank independently managed
• 10% of yearly net earnings from each bank are reinvested into communities
Federal Home Loan Bank System
A S O F 1 / 3 1 / 1 9
What is FHLBank Indianapolis?
• Regional Wholesale Bank o Serving member financial
institutions throughout Indiana and Michigan since 1932.
• Our Missiono To provide a reliable source of
liquidity to members to support housing finance, asset-liability management, and community lending.
o To provide grants and low-cost loans to our members that help support affordable housing and economic development initiatives.
Credit Unions
34%
Insurance Companies
14%
CDFI's1%
Banks & Thrifts
51%
• The Community Investment Department illustrates the mission of FHLBI:
What we do is valuable!
• Our goal is to be good stewards of our AHP allocation by disbursing funds to quality requests and projects
• We strive to provide excellent customer service, operate efficiently, and be proactive
• In the end, people and communities are helped
Guiding Principles
Homeownership Initiatives (HOP: NIP: AMP): 35% = $7.9 Million in 2019First-come, first served grant funding programs that match each step in the lifecycle of home ownership.
A L L O C AT I O N S
Community Investment Programs
Affordable Housing Program (AHP): 65% = $14.7 Million in 2019Competitive grants awarded to members to support the creation of rental and homeownership opportunities for low- and moderate-income households.
Community Investment Program (CIP) Targeted $150 Million in 2019Discounted advances and letters of credit available to members on an ongoing basis to support targeted housing and economic development.
Elevate Small Business Grant Program – $375,000 in 2019Competitive grants awarded to members to help stimulate local economic development, workforce development and job creation through small businesses in the states of Indiana and Michigan.
DATE: PRESENTED BY:
CompetitiveAffordable Housing Program (AHP)
March 2019 MaryBeth Wott, FVP, Community Investment Officer
T H E B A S I C S
• Provides direct grants for the acquisition, rehabilitation, or construction of affordable housing.
• Only FHLBI members may apply for AHP grant funding.
• Maximum grant is $500,000.
• Project sponsors are housing developers (either for profit or nonprofit) that partner with an FHLBI member to complete the project.
Affordable Housing Program (AHP)
AHP: Competitive grants awarded to FHLBI members to support the
creation of rental and homeownership opportunities for low- and moderate-
income households.
Competitive AHP o Funded 29 projects
(3 alternates)o Total of $13 million o Created 1,066
affordable units
Highlights of 2018 Program Year
L I M I T E D TO H O U S I N G
• Eligible Project Types• Single family – single or
scattered site• Multi-family – single or multi-site• Domestic violence shelters• Homeless and emergency
housing shelters• Transitional housing• Permanent supportive housing• Group homes and congregate
living plans
Flexible Development Funding Source
Grants of up to $500,000 per
project!
• Ineligible Project Types• Nursing homes• Assisted living facilities• Echo or cottage housing
units for the elderly
M I N I M U M R E Q U I R E M E N T S
• Thresholds• Need for subsidy• Readiness to proceed• Reasonable & realistic• Capacity• Minimum requirements for targeting• Housing costs must be affordable
• Incomes must be validated with third-party documentation• AHP subsidy must be used for eligible purpose• AHP subsidy per unit limit is $50,000• Demonstrated market need for housing type
Eligibility Thresholds
A H P I S C O M P E T I T I V E –1 O F E V E R Y 2 A P P L I C AT I O N S I S A W A R D E D
• 5 pts Donated Property• 7 pts Non Profit Sponsorship• 20 pts Targeting• 5 pts Housing for Homeless• 8 pts Empowerment Initiatives• 8 pts Member Involvement • 3 pts Rural Housing• 9 pts Opportunity Targeting• 8 pts Desirable Sites• 5 pts Readiness to Proceed• 15 pts Subsidy per Unit• 7 pts Community Stability
AHP Scoring Summary - 2019
New Changes in 2019
New Changes in 2019
New Changes in 2019
New Changes in 2019
A H P R E Q U I R E S A N F H L B I M E M B E R PA RT N E R
• Member Role• Underwrites the projects • Maintains relationship with sponsor• Oversees construction and disbursement of AHP funds• May require additional reporting beyond AHP requirements• May be required to repay AHP subsidy • May require security instrument in addition to Retention Agreement• Provides compliance reports and disbursement requests to FHLBI
• Sponsor Role• Assemble a well documented realistic AHP Application• Inform the Member and FHLBI when things change• Prepare and assemble well documented compliance reports and
disbursement requests• Treat the AHP grant like a loan – the Member is! (AHP Agreement)• Understand requirements to remain in compliance with AHP Regulations• Understand repayment obligation
Roles & Expectations
W H AT M A K E S A G R E AT PA RT N E R ?
• Develop a relationship before you have a financial ask• Provide volunteer opportunities for employees• Research member website for their area of focus• Offer board seats to financial institution employees • Share success stories
Community financial institutions need the community to thrive in order to thrive!
Roles & Expectations
Awarded Application2019
Stage I –Development
Phase (1-3 yrs)2019-2022
Stage II –Project Completion
(3 yrs)2022
Completion Monitoring
(1 yr from completion)2023
Stage III – Long term monitoring
(for 15 yrs post-completion)
2037
Life Cycle of AHP Rental Project
FHLBI is involved in each AHP Rental Project for up to 18 years
2 0 1 9 P R O G R A M Y E A R
AHP Application Timeline
JanuaryImplementation Plan
2019 Released
MarchPre-application and Quick Smart Tools released
June 14, 2019Pre-Application Due
Date
JuneOn-Site Technical
Assistance
August 14Applications are due
at 5 PM ET
November 16Awards announced
G E T T I N G S TA RT E D F O R 2 0 1 9
• 2019 Implementation Plan• Review Threshold
Requirements• Quick Smart Score• Identify Partners• Technical Assistance On
Demand
Competitive AHP Program
• AHP Application Files –(excel format)• Getting Started Instructions• Pre- Application & Final
Application Assembly• Financial Workbook• Exhibit Cover Pages• Certification / Authorized
Signatures
• 2019 Implementation Plan• AHP Training Guide• AHP Application Tips & Tools• Notification of Intent • Technical Assistance on
Demand• AHP Training Webinars
(recorded)• Quick Smart Score• AHP Pre-Application & Final
Application Files• Awardee lists / Statistics
Available on our Website
Join us for an Underwriting Affordable Housing Workshop!• Affordable housing experts walk
you through the different layers of funding for affordable housing projects.
Check fhlbi.com/training for updates on future trainings and workshops.
Underwriting Affordable Housing
May 21, 2019
Detroit, MI
June 4, 2019
Indianapolis, IN
(800) 688.6697 (TOLL FREE)
AFFORDABLE HOUSING PROGRAM STAFF
VP, AHP Portfolio ManagerTrish Lewis – [email protected]
AHP Production ManagerMike Recker – [email protected]
Senior Compliance AnalystDevin Day – [email protected]
Senior Compliance AnalystErica Petty-Saunders – [email protected]
Compliance Analyst IAshlen Nisley- [email protected]
Federal Home Loan Bank of Indianapolis
DATE: PRESENTED BY:
Federal Housing Finance Agency AHP Final Rule
March 2019 MaryBeth Wott, FVP, Community Investment Officer
P U B L I S H E D I N T H E F E D E R A L R E G I S T E R N O V. 2 8 , 2 0 1 8
• Provides the FHLBanks additional authority to allocate their funds
• Authorizes the FHLBanks to establish separate competitive funds that target specific affordable housing needs in their districts
General
• Provides additional flexibility to design project selection scoring systems
• Aligns certain monitoring requirements with those of other federal funding programs
• Streamlines and reorganizes the regulation
P R O V I S I O N S M U S T B E I M P L E M E N T E D B Y J A N . 1 , 2 0 2 1
• FHLBank must establish a General Fund
• FHLBanks can establish up to three Targeted Funds
• Does not include previously proposed “outcome requirements” –thank you for your comments!!
• Five-year retention agreement eliminated for homeownership transactions involving only rehabilitation (must be implemented by January 1, 2020)
• Final Rule adopts Proposed Rule requirement for “cure first” provision
Competitive AHP
P R O V I S I O N S M U S T B E I M P L E M E N T E D B Y J A N . 1 , 2 0 2 1
Competitive AHP
• Statutory Scoring Priorities:– Donated property (5 points)– Nonprofit sponsorship (5 points)– Home purchase by low-income
household (5 points)• Regulatory Scoring Priorities:
– Targeting to Lower Income Households (20 points)
– Underserved Communities and populations (5 points)
– Creating economic opportunity (5 points)– Community Stability (5 points)
• FHLBank Optional Priorities:– Housing needs identified by FHLBanks
(0 – 50 points)
P R O V I S I O N S M U S T B E I M P L E M E N T E D B Y J A N . 1 , 2 0 2 1
• Maximum grant increased from $15,000 to $22,000 and can adjust upward based on FHFA’s House Price Index
• Five-year retention agreement required for purchase transactions
• Five-year retention agreement eliminated for transactions involving only rehabilitation (must be implemented by January 1, 2020)
• When calculating pro rata repayment, will use “net proceeds” instead of current requirement to use “net gain”
• If required repayment is $2,500 or less, the repayment is forgiven
Homeownership Initiatives (Set-asides)
P L E A S E R E T U R N TO Y O U R S E AT S B Y 1 0 : 4 5
Here are a few questions you can ask to help ‘break the ice’ with your new acquaintance:
1. What brings you to today’s workshop?
2. What are you currently working on that you are the most excited about?
3. What would you be doing right now if you were not at this workshop?
Networking Opportunity
DATE: PRESENTED BY:
Homeownership InitiativesG R A N T P R O G R A M S F O R T H E L I F E -
C Y C L E O F H O M E O W N E R S H I P
March 2019 Rori Chaney, Ronna Edwards
AVA I L A B L E TO A N Y F H L B I M E M B E R
• Down payment and closing cost assistance for eligible first-time homebuyers ($500,000 per member cap)
HOP – Homeownership Opportunities Program
• Owner-occupied rehabilitation for eligible homeowners ($300,000 per member cap)
NIP – Neighborhood Impact Program
• Accessibility modifications and rehabilitation for eligible senior or disabled households ($300,000 per member cap)
AMP – Accessibility Modifications Program
Homeownership Initiatives
T Y P I C A L P R O G R A M T I M E L I N E
Q1 2019Implementation
Plan and program forms
are updated and available for
review
MarchCID Workshops
are held throughout IN
and MI (6 total)
March/AprilProgram
specific training takes place (webinars)
April/MayFunding round typically opens
when HUD announces
income limits
Funding round will close when
all funds are exhausted
Homeownership Initiative Programs
• Members are the gatekeepers of the programs, households can only participate with member assistance
• Understand the requirements of each program• Ensure partnering organizations understand the
program requirements as well• Manage the transaction: Establish a process• Exercise due-diligence in the process
– Worthy situations of the grant funds
Member Role and Responsibilities
C H A N G E S TO T H E I - P L A N
What’s New In 2019?
Changes for Homeownership InitiativesHOP• There is no longer a requirement for matched funds when a non-member
originates the mortgage ($1,000 home-buyer contribution remains)• Return of funds of $2,500 or less are not required on sale or refinance.
NIP• Plumbing is removed as an eligible expense• Electrical now only applies to replacement of knob-and-tube wiring
AMP• Maximum disbursement amount per household is reduced to $12,000• Amount allowed to go toward CAP certified agency for inspection of the
home is reduced to $250
F O R M S
Additional Changes for 2019
Changes for Homeownership Initiatives
NIP and AMP• The Real Estate Retention Agreement is no longer required.
All existing NIP and AMP retention agreements are now null and void and can be removed from the recipient’s property.
• Title Requirements: Titles that include adult children for estate planning purposes
are now allowed Homeowners must have owned and resided in the subject
property for at least 6 months prior to enrollment (previous requirement was 18 months)
W E B I N A R S
• Only NEW users, those members who have not received a disbursement in the previous two years, are required to view the training webinars
• All others are free to view webinars at your leisure. We highly recommend taking advantage of the information provided!
fhlbi.com/training
HOP/NIP/AMP - Training
2018 HOP Profile
245 Total Households Assisted
$1.8M Total Funds Disbursed
$7,670 Average Grant Size
$35,251 Average Household Income
26% Households Considered Very Low Income <50% AMI
468 Total Households Assisted
$3.2M Total Funds Disbursed$6,772 Average Grant Size$23,081 Average Household
Income 57% Households Considered
Very Low Income <50% AMI
2018 NIP Profile
2018 AMP Profile
98 Total Households Assisted
$1.2M Total Funds Disbursed
$12,874 Average Grant Size
$20,169 Average Household Income
58% Households Considered Very Low Income <50% AMI
O P P O RT U N I T Y
• In 2017, 65% of home buyers age 37 and younger, were first-time home buyers
– 24% of those age 38-52 were first-time home buyers.
First-time Home Buyer
S O C I A L R E S P O N S I B I L I T Y
Support & Responsibility
Joint Center for Housing Studies of Harvard University, 2016
H O P - D O W N P A Y M E N T A N D C L O S I N G C O S T A S S I S T A N C EF O R F I R S T - T I M E H O M E B U Y E R S
Homeownership Opportunities Program
F I R S T- T I M E H O M E B U Y E R S O N LY
First-time homebuyer(s):• Person(s) who has not had ownership in a principal
residence during a three year period ending on the date of the purchase of the property.
• A single parent who has only owned a home with a spouse while married
• Person(s) who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations.
Who can access HOP funds?
H O P : D O W N PAY M E N T A N D C C A S S I S TA N C E
1) Member Originated First Mortgage• $8,000 in HOP funds
2) Non-member Originated First Mortgage• $4,000 in HOP funds
Homeownership Opportunities Program
M U S T B E O W N E R O C C U P I E D
• Single-Family Detached (1-4 family)• Condominiums• Duplexes• Townhomes• Modular and Manufactured Homes
– All properties must be titled as real estate and be permanently affixed to a permanent foundation
Non-eligible Properties Member REO Properties
Eligible Properties
• Loan origination fees• Doc prep fees• Credit report• Closing fees• Attorney fees• Appraisal fee• Title Insurance• Recording Fees
See Implementation Plan for full list of eligible closing costs
Eligible Closing Costs
• 30 days prepaid interest• Up to 10 months of escrow
– Taxes and/or HO insurance– Flood Insurance
• Final mortgage payment: PITI <35% of gross household income• Minimum $1,000 cash contribution (borrower’s own funds)• Must have 12 months of continuous employment• Homebuyer may not receive more than $250 cash back at closing• Homebuyer counseling required ($150 of HOP funds toward this)• Minimum loan term 5 years• Minimum amortization 15 years• Rehab costs must be paid by 3rd party or outside of closing• No non-arm’s length transactions • No construction-perm transactions• Other assistance funds are allowed (cannot be other FHLBank
grants)
See the Implementation Plan for further details www.fhlbi.com/communitiesandhousing
HOP Requirements
R E PA I R S F O R O W N E R - O C C U P I E D P R O P E RT I E S
Each homeowner can request up to $7,500 for qualified repairs
Each repair must be supported by at least two independent bids*
Owner-occupants must have resided in the home for at least 6 months prior to enrollment
Must be current on mortgage and taxes
Household income must be ≤80% AMI
Funds can only be used for eligible repairs
NIP Grant Details
W H AT R E PA I R S A R E E L I G I B L E ?
• HVAC repair/replacement• Water heater replacement• Windows• Soffits and Fascia• Siding• Roofing• Gutters and downspouts• Exterior doors
NIP Repairs
• Electrical – replace knob-and-tube wiring
• Weatherization needs– Caulking– Weather stripping– Insulation
A M P : H E L P I N G K E E P FA M I L I E S I N T H E I R H O M E S
Accessibility Modification Program
W H O I S E L I G I B L E
1) Households where all members are age 62 or older
2) Households where all members are age 62 or older and age 17 or younger
3) Households with a member of any age who has a permanent disability (must be receiving disability benefits)
Only households in IN and MI
AMP
P R O G R A M D E TA I L S
• Each household can request up to $12,000 for eligible repairs
• Two independent bids must be obtained*
• If the agency supplying the assessment is also bidding on the project, there needs to be two (2) additional bids: 3 total bids.
• Owner-occupants must have resided in the home for at least 6 months prior to enrollment
Up to 50% of amount requested for AMP eligible repairs can be requested for NIP eligible repairs within the same request– If AMP repairs = $8,000 then can request up to $4,000 for NIP
repairs
AMP
M O D I F I C AT I O N S A N D R E PA I R S
• Ramps or zero step entries• Hand rails• Levered door handles• Widened doorways• Bathroom modifications
– Walk/roll-in showers– Grab bars– ADA approved toilets– Roll under vanity– Lower level ½ bath conversions
AMP
• Installation of smoke detectors
• Universal floor coverings• Relocation of laundry facilities
to the main floor• Internal chair lifts
C I D : 8 0 0 - 6 8 8 - 6 6 9 7
Rori ChaneyCommunity Lending [email protected]
Ronna EdwardsCompliance Analyst [email protected]
Mark StermerCompliance Analyst [email protected]
Anastasia WeinreichCompliance Analyst [email protected]
Contact Information
DATE: PRESENTED BY:
Community InvestmentProgram - CIP
3/6/19 Rori Chaney, AVP, Community Lending Manager
• FHLBI’s lowest-cost funding• Available at FHLBI’s cost of
funds, plus a nominal administrative fee (non-competitive)
• Flexible terms/structure• Variable and fixed rates to 20
years• Up to 30-year amortization
• Same collateral, prepayment terms, and activity-based stock requirements as traditional advances.
Community Investment Program
CIP includes discounted advances and letters of credit, available to members on
an on-going basis to support targeted housing and economic development.
Community Investment Program• Advances: $357.6 Million for 29 projects• Letters of Credit: $12.5 Million for 5 projects
Project Types• Housing: $327.4 Million• Economic Development: $42.7 Million
Highlights of 2018 Program Year
Q U A L I F I C AT I O N
CIP Housing Project
Ownership Residentialo Individual owner-occupied units owned or purchasedo All household incomes ≤ 115% of Area Median
Income (AMI)o REQUIRED Documentation: List of originated
mortgages
Rental Residentialo Financing of rental units and cooperativeso At least 51% of resident incomes ≤ 115% of AMI oro Rents affordable to at least 51% of residents whose
incomes are ≤ 115% AMIo REQUIRED Documentation: Rent roll, FHLBI Rent
Schedule, or Income Roll
CIP can be used to support ownership or rental projects.
Q U A L I F I C AT I O NCIP: Commercial/Economic Development
CIP can be used to support the establishment of small business or projects that
create jobs in communities.
Small Business ConcernSmall Business revenue/size standards (NAICS code)
Job creation/retention at qualified wage levelsAt least 51% of job salaries ≤ 115% AMI for rural At least 51% of job salaries ≤ 100% AMI for urban
I N C O M E R E Q U I R E M E N T SCIP: Commercial Economic Development
≤ 115% AMI for rural areas
Provides services or benefits to urban or rural area
≤ 100% AMI for urban areas
Project located in a targeted area (income exemption)
Rural/urban Champion Community, Empowerment Zone, or Enterprise Community
State of Michigan Renaissance Zone
Native American area
State of Indiana Enterprise Zone
Area affected by a federal military base closing or realignment
Federal Brownfield Tax Credit
Federally declared disaster area
C I P A P P L I C AT I O N S O R Q U E S T I O N S
Rori ChaneyAVP, Community Lending Manager317.465.0428 : [email protected]
Contact Information
P U R P O S E
The Federal Home Loan Bank of Indianapolis created the Elevate grant to help stimulate local economic development, business expansion, workforce development, and job creation through small businesses in the Bank’s district states of Indiana and Michigan.
Elevate Small Business Grant
• The Bank will target to award $375,000 in Elevate grants in 2019
• Maximum request amount per application is $25,000
• Applicants are limited to one application per year• Members may ‘sponsor’ more than one
applicant/small business
Elevate Small Business Grant
W H O I S E L I G I B L E ?
Elevate was developed to help businesses and communities in the Bank’s district.
Therefore, only small businesses in the states of Indiana and Michigan are eligible who:
• Have been in business for at least 12 months;• Have annual revenue less than $1 Million;• Are a for-profit business; • Provide a complete budget of sources and uses of funds
involved with the qualifying expense.
Elevate Small Business Grant
W H AT C A N I T B E U S E D F O R ?
• Acquisition of real property
• Acquisition of buildings, office space, warehouse space etc.
• Facility expansion• Acquisition of machinery
or equipment
Elevate Small Business Grant
• Workforce development or training
• Business loan closing costs
• Other technology enhancements
The following are the permitted uses of Elevate:
D E C I S I O N S , D E C I S I O N S …
Applications that, in the Bank’s judgment, best meet the objectives of the ELEVATE Grant: To make positive contributions toward:
a) local economic development,b) business expansion,c) workforce development, or d) job creation.
Evaluation Factors:
A P P L I C AT I O N P R O C E S S
• All applications must be submitted by a member institution
• Applications will be made available on the Bank’s website (www.fhlbi.com) by May 1, 2019
• Applications are due to FHLBI no later than July 15, 2019
• Awards will be announced no later than August 16, 2019
Applying for the Grant
C H A R A C T E R I S T I C S O F A S T R O N G A P P L I C AT I O N
Inform:– Let us know who you are and what your business is
about:• When and why did you start this business• Provide your mission/vision statement• Provide a link to your website
– Who is your customer base– What products/services do you provide– What does your past growth look like
• Employees• Revenues
Elevate Small Business Grant
C H A R A C T E R I S T I C S O F A S T R O N G A P P L I C AT I O N
Detail the need:– What is the need or problem to be solved?
• Give details of Who? What? Where? When? Why?• What is the impact:
– Impact on people (employees, customers, community)– Impact on the business– Impact on local economy
– Be clear and realistic• Provide supportive, realistic data
– Don’t give the funder reason to doubt your information
Elevate Small Business Grant
S U B M I T TA L T I P S
• Submit a typed application, not handwritten
• Include photos– Current location– Before and after of what’s already been done– Photos of the equipment/machinery/item to be funded
• Submit the application early!
Elevate Small Business Grant
Q U E S T I O N S ?
Contact an Elevate team member at: [email protected]
Elevate Small Business Grant
G O A L S
Automation Project
Automation Goals
Provide functionality and ease of use to Members
Automate existing paper-burdened processes and accept onlineapplications
Continue to provide services in a manner that meets regulatory expectations
Create operational efficiencies
T I M E L I N E
Automation Project
Current StageIT Development, QA,
User Acceptance Testing
Summer 2019Member Beta Group
2020 CID Workshops
Member Training
2020 RoundSystem is in Production
• Will begin no earlier than July• Need approximately 15 members to
be a Beta group
A N E W TO O L
• What is the Secure Portal?– A tool to send and receive files with FHLBank Indianapolis
• Who should be using the Secure Portal?– Any member or organization partnering with a member on
an AHP funded project that is responsible for sending files to FHLBank
• When do I get to use the Secure Portal?– Projects awarded in 2018 are currently using the Secure
Portal. Throughout 2019, previously awarded projects will be added
AHP Secure Portal
A N E W TO O L
• How do I know when to submit documents on the Secure Portal?– You will be emailed by FHLBank when you should be
using the Secure Portal
AHP Secure Portal
A C C E S S I N G P O RTA L
Secure Portal Access• Login button on fhlbi.com• https://fhlbi.moveitcloud.com• fhlbi.com/secureportal
AHP Secure Portal
R E S O U R C E S
www.fhlbi.com/secureportal– Quick Start Guide– FAQ– Webinar– Forms
AHP Secure Portal
Q U E S T I O N S ?
System Navigation Issues
Contact the Community Investment Department for questions regarding
navigating the system.
800-688-6697
AHP Secure Portal
Account Administration Issues
Contact the FHLBank Indianapolis Service Desk for account issues.
800-442-2568