Presented by Paul HastieExecutive Director, Homestarts Incorporated

Housing Services Corporation Regeneration Forum May 10-11, 2016

� Founded in 1975 we are a non-profit, community based organization governed by a volunteer board. There are currently 155 members of Homestars staff who live and work in the Ontario communities where we provide service.

� We provide a comprehensive range of services to Ontario housing cooperatives including: management, maintenance, property redevelopment and development, consulting and community development

� From 1976 to 1996 we developed 57 housing co-ops and non-profithousing providers

� We currently provide management, maintenance and redevelopment services to 80 housing co-ops and 2 non-profit housing providers (6,000 homes)

� We play an active role in the national and local co-op housing movement and provide significant support to co-op housing charities and initiatives, including Diversity Scholarship Program and Rooftops Canada/AbriInternational

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� There are over 200 housing co-ops in Ontario that were NOT downloaded. They operate under agreements with CMHC. The Agency for Co-operative Housing administers these agreements under contract to CMHC.

� There are more or less 3 types of operating agreements: section 61, section 95 and ILM. Most have mortgages with CMHC.

� A number of operating agreements between CMHC and housing co-ops have now ended.

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� In 2011, CHF Canada and Homestarts agreed to work together with Mondragon Co-op a federally funded housing cooperative (operating under the Section 95 Program) to test if refinancing would work. Specifically, we wanted to know:

◦ If CMHC would allow a s95 housing co-op to refinance without a crippling interest pre-payment penalty and maintain its rent-geared-to-income subsidy assistance until the end of the Co-op’s Operating Agreement

◦ If a well governed and managed housing co-op could use the equity in its lands and buildings to secure new financing from an Ontario credit union to allow it to reinvest in its housing stock

Less than two years later, the answer to both of these questions was YES.

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Does a Housing Co-op Need to Refinance?

NO: If for the foreseeable future the co-op has the capital reserves and annual income from housing charges to fund necessary capital repairs and operating expenses plus maintain a healthy capital reserve

YES: If the co-op doesn’t have the reserves it needs but does have the annual income stream to support new debt

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Internal

� Board decides to proceed and secure Membership approval to borrow funds and carry out defined capital repairs over a specific time frame

� Members ultimately authorize a borrowing resolution so the refinancing process can proceed

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The Agency/CMHC

� The Agency evaluates the future viability of the housing co-op and consequently provides its recommendation to CMHC. Its recommendation assumes the credit union’s conditional commitment to provide the loan

� CMHC reviews and then provides final approval

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Credit Union� With the help of CHF Canada the coop submits a

detailed application to its credit union to borrow the money it needs

� The credit union evaluates the application and makes the decision. If positive, a term sheet and the conditional commitment letter is provided to the co-op

� Once all related agreements and approvals are in place, final mortgage documents are released and then registered on title

� Funds can then be provided to the co-op

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Legal

� Co-op’s lawyer registers the mortgage and reviews all associated agreements including the mortgage support agreement with CHF Canada, agreement with the engineer and/or project manager, agreement(s) with general contractor(s)

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Role of CHF Canada

� Assist the co-op in determining is eligibility to refinance

� Liaise on the co-op’s behalf with its Credit Union and The Agency for Cooperative Housing

� Assist the co-op board secure membership approval for a borrowing resolution

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Role of CHF Canada

� Advice the co-op what technical studies it should undertake and what plans to put in place

� Monitor the co-op’s compliance with its mortgage agreement on behalf of the credit union

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Project Management

� Co-op engages the services of an engineer / project manager to:

� Evaluate the co-op’s BCA and other technical studies

� Finalize scope of work

� Set out a construction staging plan

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Project Management

� Develop tender documents including project specification and drawings

� Invite qualified contractors to bid and assist co-op with final selection

� Administer the contract, process payment claims, inspect the work and issue completion certificate

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� Three Homestarts managed co-ops who have successfully refinanced

� Mondragon, Brampton

� Cahiague, Brantford

� Windfield, Guelph

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MONDRAGON CO-OP, 79 Mondragon Circle, Brampton

� 78 Townhomes

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Credit Union Mortgage 4, 488,750

Payout of CMHC mortgage 1,315,092

Envelop – roofing, windows, doors, foundation

1,227,500

Exterior – patio, balcony, walkway, roadway

738,500

Engineering Fees 170,000

Work to be completed 1,037,658

WINDFIELD CO-OP, 240 Westwood Road, Guelph

� 62 Townhomes, 8 Apartments

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Credit Union Mortgage 3,800,000

Payout of CMHC mortgage 1,344,726

Envelop – roofing 1,068,890

Interior – kitchen, bathroom, closet,flooring

585,054

Work to be completed 801,330

CAHIAGUE CO-OP, 76 Craig Street, Brantford

� 49 Townhomes

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Credit Union Mortgage 2,600,000

Payout of CMHC mortgage 1,133,670

Envelop – roofing, windows, garage doors, brick work

327,354

Exterior –roadway 27,000

Interior – kitchen, bathroom, appliances

665,458

Work to be completed 446,518

� The Refinancing Pipeline

2016-17

� Newmarket, Newmarket

� Cambridge New Hope, Cambridge

� Ainslie Wood, Owen Sound

2017 going forward

� A number of s61 housing co-ops

� Co-ops who have no operating agreement

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What a housing co-op will need:

� Updated BCA with 5 to 10-year capital plan

� ESA Phase 1

� 3 years audited financial statements

� Current Property Tax Assessment

� 5-year Operating budget forecast

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