U. S. Department of Housing and Urban Development
September 13, 2005
What Does HUD Do?In the State of Indiana
HUD insured more than 26,000 Single Family mortgages last year
HUD also insures mortgages on more than 600 Multi-Family properties, representing more than 58,000 total units
(More than 41,000 of those units have Section 8 subsidy) Subsidizes 66 Public Housing Authorities plus the State
of Indiana - 54,000 units of PIH and Section 8 Provides CDBG funds to 24 Entitlement Communities
and the State of Indiana, totaling over to $78 million for FY 2005
Total HUD grants to Indiana last year - $545 million
Affordable Housing NeedsAccording to the State’s most recent
Consolidated Plan:Shortage of 152,000 housing units for
extremely low income people earning less than 30% of median
household incomeMore than 187,000 households are
paying more than 30% of their income for housing costs
2001 GAO report – Only one-third of Eligible very low-income renter households receive housing assistance
Eligiible Very L0w-Income Renter Households
4.3 million assisted households
4.9 million unassisted households
3.9 million unassisted households Pay 31% -
50% of income for rent
Pay 30% of income for rent
Pay over 50% of income for rent
HUD Affordable Housing Programs
CDBGHOMESection 8 HomeownershipSingle Family Programs
203(b) mortgage insurance program Good Neighbor Program Teacher Next Door Officer Next Door
Community Development Block Grant
State of Indiana - $78,271,273Indiana Office of Rural Affairs ($34,933,351)Reallocates $5,000,000 to IHFA
Assisting homebuyers directly through downpayment assistance or a revolving loan fund for first-time buyers.
Reconstructing or rehabilitating housingAcquiring property
HOME Funds
State of Indiana - $30,192,799 IHCDA receives $16,320,149Allowable activities
build, buy or rehabilitate affordable housingrental or homeownershiprental assistance to low-income people grants, direct loans, loan guarantees or
other forms of credit enhancement
Section 8 HomeownershipHomeownership Rule - published
September 11, 2000Effective October 12, 2000PHA option
Offerwhether to limit number
Section 8 Homeownership Limitations
– Can be used for up to 15 years for mortgages 20 yrs or more, 10 years for shorter term(elderly & disabled exempt)
– Must have income = 2,000 hrs @ minimum wage ($5.50 x 2,000). Welfare assistance to elderly or disabled must be counted toward income requirement
– One or more adult family members must be employed at least 30 hrs per week
Section 8 Homeownership Programs
Active programs– Bloomington– Columbus– Fort Wayne – Goshen– Indianapolis– Lafayette– Michigan City– State of Indiana FSSA
Example of Sec 8 Voucher
Fair Market Rent = $500 SSI = $521
If apartment rents for $510
Section 8 pays $344
Tenant pays $166 (33%)
Sec 8 pays difference between FMR of $500 and 30% of tenant income ($156)
Single Family Housing Programs
Single Family Mortgage Insurance
203(b) FHA Mortgage InsuranceMore flexible underwriting terms than a
conventional mortgageLow downpayment requirementsProtects lenders against default riskMany closing costs can be financed
Discounted Sales of REO Properties
Sales to Non-profits10% to 30% discount
Officer/Teacher Next Door50% discountMust be in revitalization area
Good Neighbor ProgramSale to city for $1
Revitalization Areas
Revitalization areas are HUD-designated neighborhoods in need of economic and community development and where there is already a strong commitment by the local governments.
Census Tracts or blocks in Zip Codes East Chicago, Elkhart, Fort Wayne, Gary,
Indianapolis, New Albany, Terre Haute
FHA Rehab Loans
203 (k) Rehab LoanPurchase/Refinance and Rehab LoanMust have at least $5,000 in rehab work
Title 1 Rehab Loan Insures loans to finance the light or
moderate rehabilitation of properties. Limit of $25,000 in loan amount. Can be
used for accessibility rehab
MultiFamily Housing Programs
Production ProgramsElderly Housing (Section 202)Supportive Housing for Persons with
Disabilities (Section 811)Grants to nonprofit sponsors to build or
rehabilitate rental housing for low-income elderly/disabled with support services
Rental assistance to residents covering the difference between monthly operating cost and 30 percent of residents adjusted income
Housing Assistance Review Team
The Indiana Housing Assistance Review Team (IHART) is a group of representatives from various state and federal agencies that provides assistance and guidance in exploring financial options for community housing developments.
IHART Process
Submit In-Take Document with attachments to IRDC
Project will be discussed at IHART meeting
Letter of funding options available sent to community
Follow-up with community
Benefits of IHART
Provides “one-stop shopping” for communities
Early identification of potential funding sources
Identifies partnering opportunitiesEarly notice to funding agencies of
communities’ options
Tips for IHART Success
Present project ideas early in planning stages
Provide as much information as possibleFollow-up on suggestions from teamContact agency representatives for
additional assistance
How to Access HUD Programs
Through Your City or the State of Indiana CDBG, HOME
HUD SuperNOFA Application Available on our web site: www.hud.gov
HUD Approved FHA Lender 203(b) 203(k)
REO Sales Available on web site: www.hud.org