Funding Opportunities

Federal Home Loan Bank of Indianapolis

FHLBI grant programs at work

• Rental housing development• Homeownership rehabilitation grants• Downpayment assistance grants

FHLBI Programs

• Affordable Housing Program• Homeownership Initiatives

– HOP– NIP

• Community Investment Program

Support Living

Senior Housing

Downpayment assistance for

first-time homebuyers

Temporary shelter for victimized children

New medical Facility Saginaw

220 Indiana members

Flow of information and funds

Important partner

FHLBI’s Contribution

• Homeownership– Downpayment/closing cost assistance– Rehab dollars

• Rental– Development/construction/rehab assistance

Contribution Allocation (10% of net income)

AHP Contribution - 10% of net income

Net income

Affordable Housing Program (AHP)

• Direct subsidy for acquisition, construction or rehab of affordable housing

• Eligible Uses– Land acquisition– Construction subsidy for single family homes– Rehabilitation costs on multifamily or single-family rental units– Downpayment and closing cost assistance to low-mod buyers– Soft costs - developer fees, construction interest,

environmental assessments, other pre-development costs

Affordable Housing Program (AHP)

• Maximum grant $500,000 per project• Competitive application process• Two funding rounds per year

– Spring round announcements in June– Fall round to open during August 2005

Retention and monitoring

• Retention commitments– 5 years homeownership – 15 years rental

• Monitoring requirements– Semi-annual reporting– Long term reporting for rental projects

Allocation Process

• Applications are scored– Read 2005 Implementation Plan

• Changes to be published in June• Complete detailed application with member

financial institution• Applications must demonstrate “readiness”

Development Budget without Soft Dollars

Equity $ 50,000Bank Loan 970,500

Loan payments: $970,500 @ 7.5% for 15 yrs =

$9,000 per month or $108,000 per year

Land $ 37,500

Pre-Development 36,000

Construction 775,000

Developer Fee 100,000

Loan and other fees 72,000

Total $ 1,020,500

Sources UsesFor 11 apartment units

Total $ 1,020,500

Rents withOUT soft dollars

1 bedroom $650

2 bedroom $735

3 bedroom $755

4 bedroom $1,000

Development Budget with Soft Dollars

Loan payments: $250,500 @ 7.5% for 15 yrs =

$2,300 per month or $28,000 per year

Sources UsesFor 11 apartment units

Equity $ 50,000AHP 300,000HOME 420,000Bank Loan 250,500Total $ 1,020,500

Land $ 37,500Pre-Development 36,000Construction 775,000Developer Fee 100,000Loan and other fees 72,000Total $ 1,020,500

Rents with soft dollars

1 bedroom $229

2 bedroom $435

3 bedroom $600

4 bedroom $850

Contribution Allocation (35% of AHP)

AHP Allocation

Homeownership Initatives Allocation

Homeownership Opportunities Program (HOP)

• $5,000 maximum grant• Downpayment/closing cost assistance• 3 to 1 match• $500 cash contribution from

homeowner• Other grants/funds can be matched

including member home equity loans

HOP

• Express– $1.0 million available in 2005 – First-come, first-served basis

• $700,000 released in spring (exhausted)• $300,000 released in fall

• Reserve– Approximately $1.6 million awarded on March 1– Member has 1 year to exhaust award

Single Parent with 2 Children

Family of 4 with Stay-home Mom

Single Parent – 2 Children

$3,250 from paralegal job and child support ▪ $1,300/month for housing

Needs 3-bedroom house; only has $2,500 to put towards house

Single Family Purchase - Without Subsidies

Downpayment $6,500

Closing costs 3,000

Total up-front costs $9,500

$1,300/month

Mortgage

Sale Price $130,000Downpayment (6,500)

Total Mortgage $123,500

Monthly $

Monthly payment $ 780Taxes & insurance 130

Total payment $910

Short $7,000

Affordable!

Single-Family Purchase - With Subsidies

Total up-front costs $2,500

Closing funds

Downpayment 6,500Closing costs 3,000Total 9,500

Homebuyer funds (2,500)FHLBI grant (5,000)HOME grant (2,500)Total 10,000

Enough Up-Front $$

Neighborhood Impact Program (NIP)

• Owner-occupied rehabilitation assistance for existing homeowners

• 3 to1 match• Other grants/funds can be matched• Cash contribution not required

NIP best practice

• Qualifies household

• Counseling

• Oversees rehab work

• Makes payments

• Provides grant to homeowner through nonprofit

• Provides fund from net income

NIP

• Express– $500,000 total available– For emergency-type repairs – First-come, first-served basis

• $300,000 released in spring (exhausted)• $200,000 released in fall

• Reserve– $1.3 million awarded on March 1 (includes carryovers)– $15,000 max. per home– Home must be in targeted area– Member has 1 year to exhaust award

Common Uses of NIP

• Small scale projects • New roof or repairs• Modifications for disabled individuals

– Ramps– Grab bars

• Furnaces• Siding, gutters, soffit and facia• Windows

What is Community Economic Development?

The process by which local people build organizations and partnerships that interconnect profitable business with other interests and values - for example, skills and education, health, housing and the environment.

Government or nonprofit initiatives

Retail/commercial development

Business development and expansion

Housing development

Community Investment Program (CIP)

• Below market rate loans for community economic development in low-income areas

• Longer terms available than with traditional financing

• Member mitigates interest rate risk on long term deals

FHLBI Advance Rates

Regular Advances

Term Rate

1 yr. 3.75

5 yr. 4.49

7 yr. 4.68

10 yr. 4.89

No terms beyond 10 yrs.

CIP AdvancesTerm Rate

1 yr. 3.49

5 yr. 4.23

7 yr. 4.41

10 yr. 4.63

15 yr. 4.90

20 yr. 5.01

Advance Information as of 4/18/05

Project benefits from attractive financing package

How it Works

Long term – up to 20 years/30 year amortization

Low rate

Determined by member based on credit quality

CIP Examples

• Commercial real estate financing• Multifamily housing 1st mortgage financing• Small business

– Real estate purchase– Equipment

• Public facilities• Medical facilities

– New construction or expansion

The Community Benefits

Housing + Jobs =

Sustainable neighborhoods and communities