FUNDING SOURCES FOR AFFORDABLE HOUSING IN HANCOCK COUNTY, MAINE March 2013 Prepared by: Hancock County Planning Commission, 395 State Street Ellsworth, ME 04605 www.hcpcme.org voice: 207-667-7131 Fax: 207-667-2099 Prepared with funding from the Maine Department of Economic and Community Development. Opinions Expressed herein are not necessarily those of the funding agency.
SOURCES OF MATCHING FUNDS FOR HOUSING DEVELOPMENT OR REHABILITATION PROJECTS. 2012-2013 Introduction Many groups in Hancock County are working on efforts to create affordable housing or rehabilitate substandard housing. This brochure serves as a short summary of various funding sources. Normally, multiple funding sources are needed to make a project viable. For more information contact Tom Martin at the Hancock County Planning Commission (667-7131 or tmartin@hcpcme.org). Also, visit the agency web site at: http://www.hcpcme.org/comdev.html Please note that program rules are subject to change. Contact Tom Martin for the latest information. WASHINGTON HANCOCK COMMUNITY AGENCY Telephone: (207-546-7544) Website: http://www.whcacap.org/house-and-home/index.php Agency Purpose: Washington Hancock Community Agency is a community action agency dedicated to fighting poverty and helping low-income people in Down East Maine. It offers a wide range of services including heating assistance, transportation, weatherization, small business assistance, tax preparation and more. WHCA brings community resources together to help people in Washington County and Hancock County achieve selfsufficiency and a better quality of life. For 2012-2013 WHCA has Community Development Block Grant funding for well and septic system replacement for income qualifying households. It provides the following housing services in conjunction with Maine State Housing Authority (MaineHousing): 1. Maine Home Repair Network The Maine Home Repair Network provides 1% mortgages or 0% deferred/forgivable 1
mortgages (i.e. 0% interest rate with no monthly payment) to low-income homeowners for necessary home repairs. With just one application, you can apply to both state and federal programs that fund renovations or repairs such as: Wells and septic system repairs or replacements Heating and electrical system repairs Roof and chimney repairs Structural repairs Lead paint mitigation Repair or replacement of windows and doors Energy efficiency improvements Repair or replacement of siding Handicap accessibility improvements Other health and safety repairs In cases where home repair is not feasible, home replacement may be an option. The Home Repair Network is a collaboration of MaineHousing and the Department of Economic and Community Development (DECD), USDA, Rural Development, U.S. Department of Housing and Urban Development (HUD) and Maine's Community Action Program agencies. The Home Repair Network helps approximately 300 low-income Maine families pay for necessary home repairs each year. To be eligible you must own and live in the home to be renovated. Assistance is available for single family homes and single and double wide mobile homes built after 1978 that are on owned or leased land. 2. Lead Hazard Control Program. This program provides 0%, deferred, forgivable loans (no interest and no monthly payment) to make lower-income homes lead safe. If you own a single-family home that was built before 1978, your income is at or below 80% of the area median income, and you have a child under age six living at home, you may be eligible. HCPC can provide the latest data on income thresholds. Priority is given to families whose children under age six test positive for elevated lead levels in their blood. 3. Weatherization & Central Heating Improvement Programs MaineHousing s Weatherization Program and Central Heating Improvement Program (CHIP) provide grants to low-income homeowners and renters to improve home energy performance. Weatherization improvements may include insulation, weather-stripping, caulking, and some safety-related repairs. Central Heating Improvement Program (CHIP) grants may be used to repair or replace central heating systems. 2
MAINE STATE HOUSING AUTHORITY Telephone: 1-800-452-4668 Website: http://www.mainehousing.org/ Agency Purpose: MaineHousing is an independent state agency that bridges public and private housing finance, combining them to benefit Maine s low and moderate-income people. MaineHousing brings millions of new private and federal housing fund dollars to Maine annually to create safe, affordable, and warm housing. The mission of the Maine State Housing Authority is to assist Maine people to obtain and maintain decent, safe, affordable housing and services suitable to their unique housing needs. In carrying out this mission, MaineHousing will provide leadership, maximize resources, and promote partnerships to develop and implement sound housing policy. MaineHousing works through its many private and public partners to provide programs and services that make decent, safe housing more affordable and accessible to Maine people. Over 90,000 Maine households will benefit from MaineHousing assistance this year (2012-2013). Our policies and priorities make the most of every dollar spent on affordable housing. It provides the following programs: a. Low Income Housing Tax Credit The federal Low Income Housing Tax Credit (LIHTC) provides subsidy in the form of a federal tax credit to developers of affordable rental housing. Developers using funding must reserve a portion of the rental units for lower income renters. MaineHousing allocates the LIHTC to developers who sell (syndicate) the tax credit to corporate investors. The money this raises is used as equity in the rental housing project. The LIHTC can be linked with other financing through MaineHousing s Rental Loan Program (RLP). For more information see: http://www.mainehousing.org/programsservices/development/developmentdetail?programid=51. The federal Low Income Housing Tax Credit (LIHTC) provides subsidy in the form of a federal tax credit to developers of affordable rental housing. Developers using funding must reserve a portion of the rental units for lower income renters. MaineHousing s allocation of the LIHTC is a competitive process scored through the Qualified Allocation Plan (QAP). Global Green USA ranked MaineHousing s 2008 QAP as the sixth best in the country in incorporating green building measures in its QAP application. Global Green, an organization committed to advancing green affordable housing, analyzes green building measures in four categories Smart Growth, Energy 3
Efficiency, Resource Conservation, and Health Protection. The tax credits provide approximately $20 million annually in subsidy. Additional funds are provided under the American Reinvestment and Recovery Act (ARRA) funded programs: Tax Credit Assistance Program (TCAP) and the Section 1602 Tax Credit Exchange Program. b. Rental Loan Program The Rental Loan Program (RLP) provides low interest rate, long-term mortgage financing to qualified private and nonprofit developers of affordable rental housing. The RLP may be used for acquisition, rehab, or new construction of apartment buildings of five or more units. Developers must reserve a portion of the units for lower income renters. For more information, see: http://www.mainehousing.org/programsservices/development/developmentdetail?programid=45 Qualified developers may apply. Applicants must: Demonstrate previous successful experience in the development of similar projects. Have a satisfactory credit history and demonstrate adequate financial capacity to own and operate the housing. Have control of the development site. Demonstrate they will provide the required number of lower income units. In addition, the management agent for the housing must demonstrate successful experience in managing similar properties. MaineHousing generally selects for RLP funding those developments that will provide the greatest amount of long term, lowincome housing at the least cost of taxpayer subsidy dollars. c. Revolving Loan for Acquisition Program The Revolving Loan for Acquisition Program provides loans up to $300,000 to assist developers in the acquisition of land or land and buildings for the development of affordable housing projects. Eligible projects include those that qualify and have applied (or will apply) to the tax credit financing programs, and projects that will create supportive housing units for people with special needs. The loan term is 24 months, and repayment is deferred until the project s permanent loan closing or the end of the term. For more information, see: http://www.mainehousing.org/programsservices/development/developmentdetail?programid=58 Any nonprofit agency that has filed for or received 501(c)(3) tax-exempt status from the U.S. Internal Revenue Service, and who is registered to do business in Maine, may apply for a pre-development loan. An applicant is limited to a maximum of two loans totaling not more than $500,000 at one time. 4
d. Affordable Housing Tax Increment Financing The Affordable Housing Tax Increment Financing (AHTIF) Program offers communities a flexible financing tool to assist affordable housing projects and support related infrastructure and facilities, including local schools. AHTIF enables communities to dedicate the incremental tax revenues from new affordable housing development to help make the housing affordable or to pay for related costs. Communities using AHTIF also avoid the decreases in state revenue sharing and increases in county taxes that otherwise would occur with increased property values. Eligible uses of incremental tax revenues include: Housing development or operating costs within the AHTIF district, such as capital investments, financing costs, project operating costs, professional service fees, administrative and start-up expenses, and the costs of recreational and child care facilities. Investments outside the AHTIF district that are necessary because of activities within the district, such as: infrastructure or public safety improvements, and mitigation of adverse impacts on the community (including costs to local schools). Establishing permanent housing development revolving loan or investment. Several Maine municipalities already have used the AHTIF program since it became available in 2004. Click here for a summary of approved AHTIF districts and development programs. Municipalities with qualifying proposals are eligible for the AHTIF program. Key requirements include: At least 25% of the district area must be suitable for residential use, and development within the district must be primarily residential. The development must address an identified community housing need and comply with Maine law regarding growth-related capital investments. At least 33% of the housing units must be for households earning no more than 120% of area median income. The affordability of rental units must be maintained for at least 30 years; the affordability of homeownership units must be maintained for at least 10 years. How Do I Apply? A community designates an area as an Affordable Housing Development District, develops an Affordable Housing Development Program for the district, and applies to MaineHousing for approval. Steps include: Municipality shares informal ideas and draft proposals with MaineHousing staff for early, informal review. 5
Municipality s council, selectmen, or other legislative body designates an Affordable Housing Development District and adopts an associated Affordable Housing Development Program. Municipality submits a completed application to MaineHousing for approval. If MaineHousing approval is needed before the end of a given tax year (March 31), MaineHousing must receive the completed application no later than March 15. Applications must be submitted using the standard application form. Applications are processed in the order received. e. Supportive Housing Program The Supportive Housing Programs (SHP) provide reduced interest rate debt financing and subsidy funds to eligible nonprofit developers to create affordable housing for lowand very low- income persons with special needs. Financing may be used to purchase, purchase and rehab, or construct facilities such as transitional housing, group homes, emergency shelters, and supported or independent apartments. For more information, see: http://www.mainehousing.org/programsservices/development/developmentdetail?programid=55 USDA HOUSING LOANS AND GRANTS Telephone: 207-990-3676 Website: http://www.rurdev.usda.gov/me/rhp_cf.htm Agency Purpose: Rural Development is a division of the United States Department of Agriculture comprised of the utilities programs, business-cooperative programs, and the housing programs. These three program areas provide a variety of financial services to communities and individuals in the state of Maine. The agency's goal is to work with other federal, state, and local groups to enhance the quality of life in rural Maine. It provides financing for many different programs that benefit the citizens of rural Maine. Multi-family housing programs provide apartments for families and senior citizens. Hundreds of families have become homeowners, most for the first time. Single Family Housing programs include: 1. Section 502 Guaranteed Loans - Loans are made by mortgage lenders and guaranteed by USDA Rural Development to low and moderate income applicants 6
to buy or build homes (30-year fixed interest rate) in rural areas of Maine. 2. Section 502 Direct Loan Program - Low interest loans are made directly by Rural Development to applicants whose incomes are less than 80 percent of the median income for the area. This program is focused toward purchasing modest housing, constructing new homes, or repairing pre-owned dwellings, located in rural areas of Maine. 3. Section 504 Direct Loan Program - Loans are made at 1 percent interest rate to repair, improve, or modernize modest single family homes in rural areas, making homes safer or more sanitary, or to remove health and safety hazards. Applicants' incomes must be less than 50 percent of the median income for the area. 4. Section 504 Grant Program - For homeowners 62 years old or older who cannot repay a loan, grant funds are available to remove health or safety hazards, or remodel dwellings to make them accessible to household members with disabilities. 5. Mutual Self-Help Housing Program - Low interest loans are made directly by Rural Development to applicants whose incomes are less than 80 percent median income for the area. This program is focused toward constructing modest new homes, through a group effort, in rural areas of Maine. Direct Single-Family Housing Income Limits If you are not reading this on-line contact the HCPC or Rural Development for this information. Multi-Family Housing Loans and Grants Include: 1. Section 515 Direct Loans - Loans made by USDA Rural Development to build or repair elderly or family apartment style housing in rural areas for very-low, low and moderate income residents. Up to 102 percent of the appraised value or development costs, whichever is less, can be borrowed by non-profits and up to 97 percent can be borrowed by limited profits. 2. Section 538 Guaranteed Loans - Loans made by mortgage lenders and guaranteed by USDA Rural Development covering up to 90 percent of development cost of apartment style housing in rural areas. Guaranteed housing residents' income can be up to 115 percent of median income. 3. Section 533 Housing Preservation Grants - Grants made by USDA Rural Development to not-for-profit entities to operate a program which finances repair 7
and rehabilitation activities to individual housing and rental properties for verylow and low-income property owners. 4. Section 514 and 516 Farm Labor Housing Loans and Grants - Loans and Grants made by USDA Rural Development to public bodies, not-for-profit entities or individuals to finance living units for domestic seasonal or year-round resident farm labor. HANCOCK COUNTY HABITAT FOR HUMANITY Telephone: 207-667-8484, 207-667-3082 Website: http://www.hancockcountyhabitat.org/ Agency purpose: Hancock County Habitat for Humanity is a locally run affiliate of Habitat for Humanity International, a non-profit, ecumenical Christian housing organization. Habitat for Humanity works in partnership with people in need to build and renovate decent, affordable housing. The houses are sold to those in need at no profit and with no interest charged. MAINE OFFICE OF COMMUNITY DEVELOPMENT Telephone: 207-624-7484 Website: http://www.meocd.org/ Agency Purpose: The Office of Community Development is a division within the Department of Economic and Community Development (DECD). The primary focus of OCD is the administration of the HUD funded Community Development Block Grant (CDBG) Program. Hancock County Planning Commission serves as the designated technical assistance provider for CDBG programs in the HCPC service area. For details on application and match requirements, contact Tom Martin at the HCPC. Housing Programs include: 1. Housing Assistance Grants: The Housing Assistance Grant Program (HA) provides funding in to address housing problems of low and moderate-income (LMI) persons. Eligible activities are those directly related to assisting or creating residential housing units including Acquisition, 8
Code Enforcement, Conversion of Non-Residential Structures, Demolition, Historic Preservation, Housing Rehabilitation, New Housing Construction as allowed by HUD regulations, Relocation Assistance, and Removal of Architectural Barriers. Only applicants with populations that exceed 3,000 are eligible to apply. Multi-jurisdictional applications with more than 3 communities will not be accepted. Maximum grant award: $500,000. 2. Public Infrastructure Category 2: Provides funding for infrastructure in support of new LMI affordable fully financed housing Maximum Grant Award: $500,000 9