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04/07/2023 NSP Homebuyer Purchase Feasibility Analysis 2
document.xls 1. Program Guidelines
UNDERWRITING CRITERIA
Housing to Income Ratio Minimum Maximum
Gross Household Income 25% 33%
Debt to Income Ratio 41%
PROGRAM GUIDELINES
Fo
rms
of
Ass
ista
nce Subsidy Amount Limits Uses
Final Development $80,000 per unit
$50,000 per unit
Maximum $150,000 per unit
Pro
fess
ion
al F
ees Fee Amount Eligible Service Provider
Developer Fee 12% of TDC less Acquisition Costs
Sales Referral6% of Sales Price or $4,000
Licensed Real Estate Agents(whichever greater)
Homebuyer Education $500
TAB 1: HOMEBUYER PROJECT - DEVELOPER-DRIVEN MODELM
ort
gag
e T
erm
R
equ
irem
ents
Appraisal Gap (TDC exceeds Sales Price)
Final Affordability Homebuyer
Affordability Gap (Down Payment, Closing Costs
and Mortgage Buy Down)
Non-Profit and For Profit Developers
per NSP-assisted unit sold to eligible buyer
HUD-certified Housing Counselors
04/07/2023 NSP Homebuyer Purchase Feasibility Analysis 3
document.xls 2.Proj Description & Compliance
PROJECT DESCRIPTION, HOMEBUYER INFORMATION & COMPLIANCE
GENERAL INFORMATIONAddress 1965 West Avalon Street, Allentown, PA Census Tract 3205.5Developer Bidwell Construction
DEVELOPERA. Is the Developer a Local Government or Subrecipient? Yes or No? NO
PROPERTY
A. Property Description B. Purchase Price and Appraisal AnalysisAS-IS Appraised FMV $45,000
# of Bedrooms: 3 4 Date of Appraisal 06/01/10
# of Bathrooms: 1 2 Purchase Price $32,500
Square Feet: 1250 1800 Date of Final Agreement 05/25/10
Year Built: 1980 Purchase Discount 28%Lead-based paint hazard control needed? NO Meet Discount Requirement?* YES
Estimated As-Improved Sales Price $100,000 YES
*"Yes" to both questions for purchase to comply with NSP.
C. Property Type & NSP Eligible Use Analysis
Yes or No? no NO NSP ELIGIBLE USE
Yes or No? yes YES Acquisition?
Yes or No? yes NO USE ERehab/Redevelop?
USE E
INCOME TARGETING
A. NSP funds may only assist housing that serves families earning less than 120% AMI. Please complete the table below.
B. Will you serve households earning at or below 50% AMI? Yes or No? no NO
Year City or MSA
2009 Allentown Household Size 50% AMI 80% AMI 100% AMI 120% AMI
1 $20,000 $32,000 $40,000 $48,000
2 $23,600 $37,760 $47,200 $56,640
3 $25,600 $40,960 $51,200 $61,440
4 $27,000 $43,200 $54,000 $64,800
5 $28,500 $45,600 $57,000 $68,400
6 $29,000 $46,400 $58,000 $69,600
7 $31,250 $50,000 $62,500 $75,000
8 $34,000 $54,400 $68,000 $81,600
TAB 2: HOMEBUYER PROJECT - DEVELOPER-DRIVEN
If YES, Local Government does not receive Developer Fee. Rather, they will use Administration Funds.
As Is As Improved
Appraisal done within 60 days prior to Final Agreement date?*
1. Is the Property a vacant lot, or a vacant, foreclosed or abandoned single-family home?
2. Is the Property a vacant, non-foreclosed single family home?
3. Will the project rehabilitate the existing single family home?
If No to questions #1 & 2, then property is ineligible for NSP. If No to question #3, then new construction project.
Link to income limits
04/07/2023 NSP Homebuyer Purchase Feasibility Analysis 4
document.xls 3. Buyer Affordability
What Income and Down Payment Can Support Proposed Sale Price?
How Much Needed in Homebuyer Affordability Gap Subsidy? As-Is As-Improved
Address 1965 West Avalon Street, Allentown, PA # of Bedrooms: 3 4
Developer Bidwell Construction # of Bathrooms: 1 2
Income Targeting Up to 120% Square Feet: 1,250 1,800
Sales Price: $100,000
Meeting Your Income Level? YES
HOUSEHOLD SIZE AND INCOME:
4 $54,000 $54,000 $54,000 $54,000
SMSA Allentown Low Moderate Middle
% Area Median Income of Target Buyers: 36% 50% 80% 120%Maximum Incomes of Target Buyers $19,344 $27,000 $43,200 $64,800 Monthly Incomes of Target Buyers $1,612 $2,250 $3,600 $5,400
33% 33% 33% 33%
Target Buyers' Maximum Monthly Mrtg Pmt (PITI) $532 $743 $1,188 $1,782
AVERAGE SALE PRICE: $ 100,000 $100,000 $100,000 $100,000
Down Payment-From Buyer 3.00% $3,000 $3,000 $3,000 $3,000
Other Down Payment Assistance 0.00% $0 $0 $0 $0
Amortizing Subordinate Mortgage $0 $0 $0 $0
Deferred Due on Sale 2nd Mortgage $40,000 $17,000 $0 $0
FIRST MORTGAGE AMT BASED ON AFFORDABILITY: $57,000 $80,000 $97,000 $97,000
57.00% 80.00% 97.00% 97.00%
First Mortgage Interest Rate: 5.500% 5.500% 5.500% 5.500%
First Mortgage Term: 30 30 30 30
First Mortgage Principal and Interest $324 $454 $551 $551 0.00% 0.00% 0.00% 0.00%
Second Mortgage Interest Rate: 0.00% 0.00% 0.00% 0.00% Second Mortgage Term: 30 12 12 12
$0 $0 $0 $0
Taxes $2,000 $167 $167 $167 $167
Homeowners Insurance $500 $42 $42 $42 $42
Private Mortgage Insurance required if LTV > or = 80% $0 $0 $49 $49 Homeowners Association Fee $0 $0 $0 $0 $0
TOTAL MONTHLY MORTGAGE PAYMENT: $532 $663 $808 $808
Minimum Qualifying Income $ 19,344 $ 24,093 $ 29,367 $ 29,367 % Area Median Income 36% 45% 54% 54%
Affordable to Target Income Group? Yes Yes Yes Yes
CASH REQUIREMENTS
CDBG requires Buyer pay 50.0% of Down Payment required by Lender $1,500
Down Payment 3.00% $3,000 $3,000 $3,000 $3,000
Closing Costs 4.23% $4,235 $4,235 $4,235 $4,235
Down Pmt & Closing Cost Assistance -5.73% ($5,735) ($5,735) ($5,735) ($5,735)
TOTAL BUYER CASH TO CLOSE: $1,500 $1,500 $1,500 $1,500
Affordability Subsidy SOURCES Subsidy USE Schedule of Closing Costs
NSP DPA Subsidy Down Payment $1,500 Title Insurance $500
NSP Closing Costs Assistance Closing Costs $4,235 Appraisal $200
Other Down Payment Assistance DPA $0 Recording $90
NSP Homebuyer Subsidy Mortgage Write Down $40,000 Deed Prep $90
Amortizing Subordinate Mortgage Amortizing Subordinate Mortgage $0 Transfer Taxes
TOTAL BUYER AFFORDABILITY SUBSIDY: $45,735 Tax Stamp
Homebuyer Subsidy as a % of Sale Price: 46% Pre-Paid Taxes $2,000
Grantee Maximum Homebuyer Affordability GAP: $50,000 Pre-Paid Insurance $500
NSP Affordability GAP: $45,735 Loan Origination Fee 1.50% $855
Balance from Limit: $4,265 Loan Guarantee Fee $0
Total Closing Costs: $4,235
Homebuyer Subsidy within Limits? PROCEED
TAB 3: HOMEBUYER PROJECT - DEVELOPER-DRIVEN
TO BE IDENTIFIED HOMEBUYER AFFORDABILITY ANALYSIS
Lowest Qualifying
MAXIMUM Housing/Income Ratio
First Mortgage Loan-to-Value Ratio:
Second Mortgage Loan-to-Value Ratio:
Second Mortgage Principal and Interest:
Per Unit Affordability Subsidy
04/07/2023 NSP Homebuyer Purchase Feasibility Analysis 5
document.xls 4. Development Budget
DEVELOPMENT BUDGET
What are the Estimated Costs to Rehab A Scattered-Site Single Family Unit?
What is the Development Appraisal Gap?
Address # of Bedrooms: 3 4
Developer Bidwell Construction # of Bathrooms: 1 2
Income Targeting Up to 120% Square Feet: 1,250 1,800 Sales Price: $100,000
U S E S
PREDEVELOPMENT PER UNITEnvironmental Review and Assessments $500
As-Is URA Appraisal and As-Completed Estimate $400
Title and Recording $125
Architect & Structural Engineer $4,500
Asbestos & Lead Based Paint Testing Year Built: 1980 $400
Property Acquisition Consultant $0
Code Inspections & Preparation of Specifications $550
Survey & Civil Engineering $1,000
Energy Audit and Energy Efficiency Specifications $500
Other $0
Other $0
Other $0
Total Predevelopment: $7,975 BUILDING AND PROPERTY ACQUISITIONLand & Building $32,500
Temporary Relocation* 0 Households $3,000 per Relocation $0
*Contact State if relocation; but assume $3000 for temporary relocation Total Acquisition: $32,500
CONSTRUCTION COSTSREHAB or NEW CONSTRUCTION $32.84 Average Cost per Square Foot $59,120
Demolition of Blighted Structures for New Construction $0
Infrastructure Improvements $4,000
Lead Based Paint & Asbestos Abatement $2,000
Landscaping $2,500
CONTRACTOR FEE 10.00% / hard cost $6,762
CONSTRUCTION CONTINGENCY 10.00% / hard cost $6,762
Total Construction: $81,145 CARRYING COSTSBoard Up & Lawn Maintenance $0
Utilities $100
Builder's Risk Insurance $400
Fire Insurance (Commercial) $400
Property (General) Liability Insurance $400
Real Estate Taxes $1,000
Other $0
Other $0
Other $0
Total Carrying Costs: $2,300 PROFESSIONAL SERVICESLegal $2,500
Accounting $3,000
Consultant $1,500
Marketing /Advertising $4,500
Other $0
Other $0
Other $0
Total Professional Fees: $11,500 SELLER'S CLOSING COSTSRealtor Commission 6.0% of sale price or $4,000 (whichever more) $6,000
Seller's Closing Costs 3.00% of sale price $3,000
Homebuyer Education $500 per unit $500
Seller Paid Transfer Taxes 0.00% of sale price $0
Total Seller's Closing Costs: $9,500
Hard & Soft Costs Sub-Total: $144,920
DEVELOPER FEE
12% of TDC less Acquisition Costs $13,490 Is the Developer a Local Government? NO
TOTAL DEVELOPMENT COSTS (TDC): $158,410
$100,000
Development Appraisal GAP: ($58,410) 37%
Maximum Development GAP NSP Subsidy: $80,000
Requested NSP Appraisal GAP Funds $58,410 Balance from Limit: $21,590
YES Within Appraisal Gap Limit? Proceed
As-Is Improved1965 West Avalon Street,
Allentown, PA
If YES, Local Government does not receive Developer Fee. Rather, they will use Administration Funds.
less SALE Proceeds:
Compliant with Sales Price?
04/07/2023 NSP Homebuyer Purchase Feasibility Analysis 6
document.xls 5. Construction Budget
CONSTRUCTION BUDGETWhat is the Development Appraisal Gap?
Address # of Bedrooms: 3 4
Developer Bidwell Construction # of Bathrooms: 1 2
Income % AMI Up to 120% Square Feet: 1,250 1,800
Sales Price: $100,000
CONSTRUCTION Linear Feet Sq. ft. Quantity Unit Price Total Cost0 $0
Excavation 0 $0 Concrete 0 $0 Masonry 0 $0 Roofing 1 $8,000.00 $8,000 Siding Repair and Clean 1 $1,200.00 $1,200 Rough carpentry 1 $7,320.47 $7,320
0 $0 Plumbing 1 $3,000.00 $3,000 Electrical 1 $3,000.00 $3,000 Finish carpentry 1 $750.00 $750 Interior Doors and Closet 12 $125.00 $1,500
0 $0 Drywall 1 $1,000.00 $1,000 Tile 4 $500.00 $2,000 Paint (interior) 10 $250.00 $2,500 Flooring 8 $500.00 $4,000
1 $500.00 $500 Energy Efficiency Enhancements See Schedule Below $12,950 Appliances See Schedule Below $3,000 Cabinets & Counter Tops 1 $4,500.00 $4,500 Hardware and Accessories 11 $100.00 $1,100 Window Treatments (mini blinds) 20 $50.00 $1,000 Exterior Door 2 $600.00 $1,200 Storm Door 2 $300.00 $600 Other $0 Other $0 Other $0 Other $0 Other $0 Other $0 Other $0 Other $0 Other $0
Subtotal Materials / Labor: Cost per Sq. ft.: $32.84 $59,120
Energy Efficiency Improvements # Per Unit Per Unit Cost Project
1 $2,000 $2,000 Windows 20 $250 $5,000 HVAC 1 $4,000 $4,000 Blower Door Test 1 $500 $500 House energy monitor $0 Ceiling Fans 6 $100 $600 Electrical: (motion, photovoltaic, dimmers, lt blbs) 11 $50 $550 Low Flow Plumbing Fixtures 3 $100 $300 Tankless water heater $0 Solar Panels - Photovoltaic $0 Other $0 Other $0 Other $0 Other $0
Total Energy Efficiency Improvements: $12,950
Appliance Allowance # Per Unit Per Unit Cost Project
Refrigerator 1 $600 $600 Range/Microwave Hood 1 $500 $500 Dishwasher 1 $400 $400 Garbage Disposal 1 $100 $100 Garage Door Opener 1 $200 $200 Washer / Dryer 1 $1,200 $1,200 Other $0 Other $0 Other $0
Total Appliance Allowance $3,000
TAB 6: HOMEBUYER PROJECT - DEVELOPER-DRIVEN
As-Is Improved
1965 West Avalon Street, Allentown, PA
Demolition (Partial for Rehab only)
HVAC (Repair, not Replacement)
Windows (Refurbish, not Replacement)
Basic Insulation (not for Energy Efficiency)
House insulation upgrades
04/07/2023 NSP Homebuyer Purchase Feasibility Analysis 7
document.xls 6. Sources & Uses
SOURCES AND USES SCHEDULEPROJECT INFORMATION
What is the Development Appraisal Gap?
Address # of Bedrooms: 3 4
Developer # of Bathrooms: 1 2
Income Targeting Up to 120% Square Feet: 1,250 1,800 Sales Price: $100,000
INTERIM NSP-FUNDED DEVELOPMENT FINANCINGPER UNIT COSTS
Total Predevelopment: $7,975 Total Acquisition: $32,500 Total Construction: $81,145 Total Carrying Costs: $2,300 Total Professional Fees: $11,500 Total Seller's Closing Costs: $9,500 Total Developer Fee $13,490
TOTAL DEVELOPMENT COSTS: $158,410
I. TOTAL NSP INTERIM LOAN FOR TDC: $158,410
REHABILITATION - DEVELOPMENT SUBSIDY CALCULATE DEVELOPMENT "Appraisal GAP" SUBSIDY
TOTAL DEVELOPMENT COSTS: $158,410
less SALES PRICE $ 100,000
NSP REHAB DEVELOPER SUBSIDY: $58,410
HOMEBUYER AFFORDABILITY - CALCULATE HOMEBUYER "Affordability GAP" SUBSIDYMinimum Qualifying Income $19,344 Household Size: 4 PER UNIT COSTS
Housing to Income Ratio: 33%
US
ES
Estimated As-Improved Sales Price $100,000
Closing Costs $4,235
Total Sales Transaction Costs: $104,235
SO
UR
CE
S
FIRST MORTGAGE AMOUNT
$57,000
NSP Down Payment Assistance $1,500
NSP Closing Cost Assistance $4,235
Other Down Payment Assistance $0
$5,735
NSP Affordability Buy Down of Purchase Mortgage $40,000
$40,000 CASH FROM HOMEBUYER
$1,500
NSP HOMEBUYER SUBSIDY ANALYSIS
NSP Funded Mortgage Buy Down $40,000
NSP Funded Down Payment Assistance $1,500
NSP Funded Closing Cost Assistance $4,235
$45,735
II. FINAL COMBINED NSP SUBSIDY: $104,145
TAB 6: HOMEBUYER PROJECT - DEVELOPER-DRIVEN
As-Is Improved1965 West Avalon Street, Allentown,
PABidwell Construction
DOWN PAYMENT / PRINCIPAL BUY DOWN (Based on incentives to market and sell unit)
AFFORDABILITY BUY DOWN OF MORTGAGE (Based on income & affordability needs)
TOTAL NSP HOMEBUYER AFFORDABILITY SUBSIDY (Mortgage Buydown & DPA):
04/07/2023 NSP Homebuyer Purchase Feasibility Analysis 8
document.xls 7. Funds Management
FUNDS MANAGEMENT ANALYSIS
PROJECT INFORMATIONAddress 1965 West Avalon Street, Allentown, PA As-Is Improved
Developer Bidwell Construction # of Bedrooms: 3 4
Income Level Up to 120% # of Bathrooms: 1 2
Square Feet: 1250 1800
Sales Price: $100,000
FUNDS MANAGEMENT INFORMATION
TOTAL DEVELOPMENT COST $158,410 100% interim financing
Sales Price $100,000NSP Development Subsidy $58,410
Sales Transaction Costs $104,235 Sales Price + Closing Costs
Buyer Purchase Power $58,500 1st Mortgage + Buyer Down Payment
NSP Homebuyer Subsidy $45,735 DPA + Mortgage Buy Down + Closing Cost Assistance
NSP OBLIGATION AMOUNT: $162,645 TDC + Closing Cost Assistance
FINAL NSP SUBSIDY: $104,145 Development plus Homebuyer Subsidy
NSP PROGRAM INCOME $58,500 Buyer Purchase Power
SUBSIDY ANALYSIS
Max Per Unit Total NSP Subisdy $150,000
Requested NSP Subsidy $104,145 Balance from Limit: $45,855
YES. PROCEED.
DISASTER RECOVERY GRANTS REPORTING SYSTEM
Income Level: 36% of AMI
Meet 25% Set-aside? NONSP Eligible
Obligation Amount UseAcquisition $40,475 USE EDisposition $11,800 USE E
$106,135 USE EDemolition of Blighted Structures $0 USE D
$4,235 USE ETotal $162,645
TAB 7: HOMEBUYER PROJECT - DEVELOPER-DRIVEN
Within Maximum Subsidy Limits?
Rehabilitation / Redevelopment *
Homebuyer Assistance **
* Because of 100% financing and assumes developer-driven model, mortgage buydown and downpayment assistance are covered though total development costs. But, mortgage buydown and downpayment assistance affects program income returning to Grantee.
** Closing cost assistance is paid through a CDBG activity "Homebuyer Assistance."