2006 NIFA Affordable Housing Deal Makers’ Marketplace Dealing with Out of Date Housing Stock...

2006 NIFA Affordable Housing Deal Makers’

Marketplace

Dealing with Out of Date Housing Stock

January 2006

Roger D. Nadrchal

Executive Director

Staff

Roger Nadrchal, Executive Director

Leslie Coleman, Program Director

Mitch Borst, Housing Assistant

Kelli Holton, Administrative Assistant

Mission Statement

To strengthen families and communities by developing opportunities that make homeownership a reality

We renovate “out of date housing stock” to make them safe, energy-efficient and affordable

Service Area

Purchase/Rehab/Resell Program is available to families and individuals living in communities within a 40-mile radius of Norfolk.

Purchase / Rehab / Resell Program

• EVCDC Designed Original Program

• Implemented in 1997

• Very Successful To-Date

Achievements

201 Units Rehabilitated

Property Value: $13,500,000

Down Payment Assistance: $2,400,000

Housing Project Averages

2005 Overall

Initial Purchase $61,850 $55,200

Resale Value $74,500 $67,300

1st Mortgage $64,137 $56,676

Rehabilitation $ 8,500 $ 7,200

Homebuyer Equity $ 2,708 $ 1,600

Development Fee $ 4,111 $ 2,500

• Organization identifies housing unit

• Homebuyer identifies housing unit (Preferred)

House Selection

Initial Inspection

• Once property is identified, inspection is arranged• Inspection completed by qualified

inspector• Property inspected according to:

• Minimal Housing Quality Standards, (HQS)• DED Housing Rehab Standards• Other requirements: City, State, etc.

Review Results of Inspection

• Rehabilitation specifications reviewed– Review repairs with homebuyer– Review costs with homebuyer– Determine re-sale amount– Determine amount of cash needed from buyer– Determine amount of financing required

Submit Offer to Purchase

• Purchaser is organization, not homebuyer

• Amount of offer determined with homebuyers’ input

• Offer can be cash or loan

• Offer is “as-is”, no repairs required of seller

• Set purchase date as soon as possible

Contingencies on Offer to Purchase

• Homebuyer obtaining loan approval• Appraisal to meet purchase price of organization’s

homebuyer• Acceptable inspections

(electrical, plumbing, HVAC, etc.)• Lead Based Paint inspection• Termite inspection• Survey• Title Insurance

Appraisal Requirements

• Appraisal is ordered “subject to” by homebuyers’ lender– Eliminates need to have 2 different appraisals– Allows appraisal to be used for permanent

financing

• If valuation is acceptable, proceed to purchase property

Purchase/Rehab of Property

• Acquire property with Closing Agent or Realtor

• Have utilities put into organizations name

• Give Notice to Proceed to rehabilitation contractors and/or homebuyers– Use “Lead Safe Work Practices” when lead-

based paint is present

Resale of Property

• Determine all repairs are completed• Contact lender to have appraiser complete

final inspection to review list of repairs were completed according to write-up

• Establish closing agent, date & location• If providing Down Payment Assistance,

prepare loan documents as needed• Sell property, and finalize sale

Purchase/Rehab/Resell Example

PURCHASE PRICE OF HOME: $65,000Rehab Costs: (+) $ 5,000Development Fee: (+) $ 5,000PURCHASE PRICE FOR HOMEBUYER: $75,000

Lender’s Closing Costs: (+) $ 4,500TOTAL EXPENSES TO BE PAID BY HOMEBUYER: $79,500

Elkhorn Valley CDC’s Down Payment Assistance (20%): (-) $15,000Buyer’s Cash: (-) $ 1,000TOTAL CASH AVAILABLE: $16,000

ESTIMATED MORTGAGE LOAN NEEDED: $63,500

We educate and enable individuals and families to be responsible homeowners

We help homebuyers afford the American Dream

Achievements

$2,400,000 of down payment and closing cost assistance provided to 275 qualified homebuyers.

• Lenders• REALTORS®• Contractors• Closing Agents• Community Leaders• Norfolk Housing Agency• Homebuyers/Homeowners

Partners in Community Revitalization

Partners in Community Revitalization

Thank you for your time and attention!!