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Homeownership Programming Discussion April 18, 2024 CDAC Meeting Presentation Overview 2 • Neighborhood Stabilization Program (NSP) accomplishments • Grant requirements for homeowner programs (HOME and CDBG) • Existing homeownership programs • County-wide allocation of CDBG and HOME funds • Affordability analysis • Employment and wages • Potential partners • Homeownership under the THRIVE Program 3 NSP Accomplishments Activity Type Total Expended Period of Affordability (Years) Units Assisted Initial Cost Per Unit Acquisition/New Construction - Rental $2,197,133 30 16 $137,321 Demolition $156,429 0 10 $15,643 Direct Homebuyer Assistance $83,269 5 18 $4,626 Acquisition/Rehab/Resale - Homeowner $9,255,729 15 61 $151,733 Total: $11,692,561 -- 105 $111,358 4 CPD Homebuyer Requirements Requirement HOME CDBG Income Limit 80% AMI 80% AMI Maximum Home Value $432,000 None Affordability Requirements • <15K = 5 years • $15K-$40K = 10 years • >$40K = 15 years • New Construction = 20 years None Funding Cap None None Eligible Uses of Funds • Down payment (HOME – no limit; CDBG – 50%) • Mortgage and points buy downs (including MI) • Loan guarantees • Reasonable closing costs 5 Existing Homebuyer Programs Program Name Agency Funding Basic Program Requirements Home in Five (Advantage and Platinum) Maricopa County and Phoenix IDAs (joint sponsors) Single Family Mortgage Revenue Bonds HH Income: $138,600 D/I Ratio: 50% Homebuyer Education Open Doors City of Phoenix HOME 1st time Home Buyer Low- Moderate income (80% AMI) Min Buyer Investment: $1,000 Purchase Price below $428,000 Homebuyer Education First-Time Homebuyer Program City of Avondale HOME; not recommended for new funding in FY 2024-25 1st time Home Buyer Low- Moderate income (80% AMI) Max assistance $30,000 Homebuyer Education Arizona is Home (New) Statewide Governor's Initiative 1st time Home Buyer Low- Moderate income (120% AMI) Max assistance $20,000- $30,000 Homebuyer Education FY 2024-25 Annual Action Plans (CDBG) 6 Municipality CDBG Allocation Avondale $650,000 Surprise $766,285 Peoria $902,707 Gilbert $1,023,547 Scottsdale $1,163,185 Chandler $1,343,477 Tempe $1,695,733 Glendale $2,354,682 Mesa $3,450,064 Maricopa County $3,731,446 FY 2024-25 Action Plans (HOME) 7 Municipality HOME Allocation Avondale $214,593 Surprise $252,694 Peoria $297,476 Gilbert $337,297 Scottsdale $355,614 Chandler $442,726 Tempe $575,285 Glendale $775,957 Mesa $3,400,000 Maricopa County* $2,057,196 * This figure is Maricopa County’s share of the total HOME allocation from HUD. The total HUD allocation to the County is inclusive of all member allocations and is estimated to be $5,308,838 ** Final allocations from HUD are not yet available, though the total HOME Program appropriation was reduced by $250M (17%), from $1.5B to $1.25B FY 2024-25 Annual Action Plans (HOME) 8 Municipality Proposed HOME funded activities Avondale Tenant-Based Rental Assistance (TBRA) Chandler TBRA Gilbert Acquisition/New Construction – Rental Glendale TBRA Maricopa County Acquisition/Rehabilitation – Rental; Acquisition/New Construction – Rental and Owner (including CHDO) Mesa TBRA, New Construction – Rental Peoria Acquisition/New Construction – Owner Scottsdale TBRA Surprise TBRA Tempe TBRA 9 What is the annual income needed to purchase a home in the current market? 1. AZ Multiple Listing Service, Statistical Market Analysis, 4/12/24 2. Freddie Mac, Primary Mortgage Market Survey, 4/4/24 3. MI Estimate, HUD.gov, Accessed 4/15/2024 Housing Cost Factor Amount Median Listing Price1 $464,900 Median Sales Price1 (past 90 days) $424,990 Expenses at closing: down payment (3.5% for FHA), Upfront PMI (1.75% for FHA), Closing Costs (est. 3%) $34,801 Mortgage (Price less expenses paid at closing) $390,189 Mortgage Rate2 6.82% Principal & Interest Monthly Payment $2,549 Taxes & Hazard Insurance Monthly Payment $275 Mortgage Insurance3 (MI) (± 0.55% of loan amount) $188 Total Monthly Housing Payment $3,012 HH Income Required to Afford Payment (30% of income) $120,476 Exceeds 80% AMI What is the purchase price an eligible HH requires to achieve affordable homeownership? 10 Housing Cost Factor (3-member household, looking for a 3-bedroom home in Glendale) Amount Max Annual Income (80% AMI for 3-member HH) $66,375 HH Income Required to Afford Payment (30% of income) $120,476 Annual HH Income Gap ($54,101) Affordable Monthly Payment @ median income (30% of 3-member HH income) $1,659 Max affordable mortgage $254,015 Total Properties Active on MLS (3 Bedroom, under $255,000)1 20 Total Properties Active on MLS (3 Bedroom, under $350,000)1 21 Total Properties Active on MLS (3 Bedroom, under $425,000)1 55 Total Properties Active on MLS (3 Bedroom, over $425,001)1 71 1. AZ Multiple Listing Service, Active Property Search, 3 Bedroom, Glendale, 4/12/24 Employee Wages (Arizona) 11 HH Income required to afford median house = $120,476 Positions and median wages1 – Kindergarten Teachers $51,200 – Executive Administrative Assistants $64,290 – Chefs and Head Cooks $64,560 – Licensed Practical Nurses $65,500 – Web Developers $66,960 – Respiratory Therapists $74,520 – Management Occupations $102,560 – Aerospace Engineers $128,230 – Nurse Practitioners $130,960 1. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2023 Partnership Opportunities 12 • Trellis • Chicanos Por La Causa • Community Development Financial Institutions (CDFIs) • Housing for Hope • Habitat for Humanity Transcending, Hope, Resiliency, Into, Viable, Empowerment (THRIVE) Program 13 • CAP Success Coaches – Long-term stability focuses on: • Asset building, education, financial literacy, network building and maintaining housing – Three (3) participants are working towards homeownership • Paid off debt • Improved FICO Score • Saving down payment for the Workforce Initiative Subsidy for Homeownership (WISH) & State Down Payment program Thank you! 14 Questions