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Programs are available to meet an array of needs regarding financing, closing cost assistance, and tax exemptions for pre-development, new construction, rehabilitation of residential housing, preservation of real estate, and property improvement.
AFL-CIO Housing Investment Trust Real Estate Finance (HIT)
Financing is offered by the Trust for the new construction and substantial rehabilitation of rental apartments, senior housing, and health care facilities, with an emphasis on housing for low-, moderate- and middle-income working families. The Trust also makes financing available for the preservation of affordable rental housing. HIT Financing Programs meet an array of needs related to the development, rehabilitation, or preservation of real estate, including: construction financing, permanent financing, fixed or floating rate forward commitments, and secured bridge loans. To protect its investors from a loss of principal and to provide the most attractive terms to developers, the Trust structures its financing with credit enhancements provided by a variety of sources, including the Federal Housing Administration (FHA), Ginnie Mae, government-sponsored enterprises (GSE) such as Fannie Mae and Freddie Mac, and state and local agencies.
The Trust’s Multifamily staff has technical expertise in structuring layered affordable housing financing using a variety of public and private capital sources, including low-income housing tax credits, federal and state historic tax credits, Home Investment Partnership Program (HOME), Community Development Block Grants (CDBGs), the Federal Home Loan Bank’s Affordable Housing Program (AHP), Community Investment Program (CIP), and other programs. The Trust offers the following financing programs:
- FHA-Insured Construction and Permanent Loan Program for multifamily housing, nursing homes and intermediate care facilities.
- GSE Credit-Enhanced Construction/Permanent Loan Program for multifamily housing for fixed-rate construction and permanent loans.
- GSE Credit-Enhanced Forward Commitment Permanent Loan Program for multifamily housing.
- State Housing Finance Agency Programs for financing affordable to market-rate housing.
- Tax Credit Bridge Loan Investment Program for loans that bridge low-income housing tax credit investor payments to owners of multifamily tax credit projects.
Program eligibility, requirements, size, and terms vary. Loan size can range between $2 million to $10 million and loan terms can range between 30 years to up to 40 years plus the construction period. For more information on the AFL-CIO Housing Investment Trust Real Estate Finance programs, call 202.331.8055 and ask to speak with the Multifamily Finance Department or visit http://www.aflcio-hit.com/.
Citizens Bank Homebuilder Loan Programs
Charter One has a number of programs that are tailored to meet the needs of local developers. They include acquisition financing, lines of credit, letters of credit, and construction loans. Additional services include reposition financing, cash management, development financing, mini perm loans, bridge loans, credit lease tenant financing, interest rate management products, access to commercial mortgage-backed security (cmbs) placements, debt distribution, equity distribution, private placements, Reit and subscription line financing, correspondent credit lease, and permanent financing solutions. Charter One also offers programs for first time home buyers to experienced real estate investors. They have zero down loans, 100% financing, rates in the mid 5%’s on Jumbo and Super Jumbo loans, and work with all types of credit. For information, visit www.citizensbank.com or call 1-800-922-9999
FHA HUD 203(k) Loan Program
Section 203(k) insurance enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home.
Section 203(k) fills a unique and important need for homebuyers. When buying a house that needs repair or modernization, homebuyers usually have to follow a complicated and costly process. The interim acquisition and improvement loans often have relatively high interest rates, short repayment terms and a balloon payment. However, Section 203(k) offers a solution that helps both borrowers and lenders, insuring a single, long term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of a property. Section 203(k) insured loans save borrowers time and money. They also protect the lender by allowing them to have the loan insured even before the condition and value of the property may offer adequate security. For more information, visit: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203k--df
Nationally, Gershman services $1.5 billion in loans for multifamily and healthcare facilities. They specialize in providing and servicing all types of financing for apartments, nursing homes, assisted living facilities and hospitals utilizing tax free and taxable bonds. In addition to HUD financing, they offer other conventional financing options as well.
Multifamily Housing New Construction and Substantial Rehabilitation Programs
- Section 220: The 220 program is a single construction-to-permanent loan for New Construction and Substantial Rehab of multifamily and elderly apartment properties in urban renewal areas.
- Section 221(d)(4): The 221(d)(4) program is a single construction-to-permanent loan for New Construction and Substantial Rehab of multifamily and elderly apartment properties in urban renewal areas.
Multifamily Housing Acquisition and Refinancing Programs
- Section 223(f): The 223(f) program is a financing program designed for acquisitions or refinancing of existing multifamily properties. The program can be used to finance repairs or for equity take-outs.
- Section 223(a)(7): The 223(a)(7) program is a financing program designed for the refinancing of existing multifamily properties that are already in the FHA Insured Loan Program. The program is used to lower debt service as well as finance repairs.
- Section 241(a): The 241(a) program is a financing program designed to insure a second mortgage to finance repairs, additions and improvements of existing multifamily apartments that already have an existing FHA insured mortgage.
Healthcare Facility New Construction and Substantial Rehabilitation Programs
- LEAN 232: The LEAN 232 program is a single construction-to-permanent loan for New Construction or Substantial Rehab of healthcare facilities including Skilled Care Nursing Homes, Intermediate Care, Assisted Living and Personal Care facilities.
Healthcare Facility Acquisition and Refinancing Programs
- LEAN 223(f): The LEAN 223(f) program is a financing program designed for acquisitions or refinancing of existing healthcare facilities including Skilled Care Nursing Homes, Intermediate Care, Assisted Living and Personal Care facilities.
- LEAN 223(a)(7): The LEAN 223(a)(7) program is a financing program designed for the refinancing of existing healthcare facilities that are already in the FHA Insured Loan Program. The program is used to lower debt service as well as finance repairs.
- LEAN 241(a): The LEAN 241(a) program is a financing program designed to insure a second mortgage to finance repairs, additions and improvements of Skilled Care Nursing Homes, Intermediate Care, Assisted Living and Personal Care facilities that already have an existing FHA insured mortgage.
Great Lakes Capital Fund for Housing (GLCF)
The GLCF helps responsible corporations invest in affordable housing and community economic development activities. GLCF raises capital from corporations and financial institutions, and invests these resources into real estate development partnerships. The partnerships receive essential equity for their developments. The investors receive a competitive internal rate of return on their investment through tax benefits; and the community receives high quality, affordably-priced housing and/or commercial developments that generate social and economic benefits for area residents. For more information on Great Lakes Capital Fund for Housing, visit http://capfund.net or call the Detroit Office at 313.841.3751.
Invest Detroit is a leading source of private sector gap financing that utilizes a variety of funding tools through managed for-profit and non-profit targeted funds to support economic and community development in underserved communities primarily in the City of Detroit. Invest Detroit and its related entities were formed to facilitate funding from the public, private and foundation sectors and to address targeted needs of the communities it serves. Representing $110 million in funds and tax credits, Invest Detroit serves as a platform to meet a broad range of financing needs to support business expansion and real estate development, the creation and retention of jobs, and the revitalization of distressed areas.
Invest Detroit represents the vision of the Board of Directors and management of the Detroit Investment Fund (DIF), which was created and funded in 1995 by members of Detroit Renaissance, now known as Business Leaders for Michigan. In 2010, the DIF Board and management team enhanced and transitioned the capabilities of DIF to create Invest Detroit, which serves as an umbrella entity for DIF and other for-profit and non-profit managed funds. The efforts of Invest Detroit are intended to promote job creation, expansion of the tax base and an improved quality of life for the communities it serves. Invest Detroit’s financing tools support a variety of needs including business expansion and purchase of equipment, real estate development and redevelopment, predevelopment costs, neighborhood retail, emerging business’ development costs, and New Markets Tax Credits. Loans for strategic projects are considered when the potential exists for a long-term, clear benefit which is critical to the economic development of the City of Detroit. This emphasizes the Fund’s commitment to economic revitalization by financing projects that would likely not be completed without the participation of Invest Detroit.
Invest Detroit invests in eligible projects or companies from several different funding sources which include Detroit Investment Fund (DIF) , New Markets Tax Credits (NMTC), Lower Woodward Housing Fund (LWHF), Predevelopment Loan Funds, Urban Retail Loan Fund (URLF), and First Step Fund. The economic development efforts of Invest Detroit have resulted in 2,000 jobs created or retained, 1,490 housing units created or renovated, 2,230,657 residential square feet developed, 1,626,010 commercial square feet developed, and 40,000 retail square feet developed. For more information, call the Invest Detroit office at 313.259.6368 or visit http://www.investdetroit.com.
Invest Detroit Foundation (IDF)
Invest Detroit Foundation is a 501(c)(3) organization and certified Community Development Financial Institution formed exclusively for the purpose of receiving and administering funds for charitable, educational and scientific purposes. IDF promotes a higher quality of life for distressed communities, primarily in the City of Detroit through attracting new industry, encouraging the development of business, housing, transportation and other community resources. IDF provides loans and financial assistance to promote community development and combat community deterioration and economic blight. The IDF loan programs provide funding, generally in the form of loans, to qualified applicants to encourage revitalization and development. In concert with operating the loan programs, IDF also conducts programmatic activities that include planning, spearheading and developing strategies for urban revitalization. The impact of the IDF loan programs includes the creation of jobs and training to the unemployed and persons of low income, and providing quality housing for the low-income community.
IDF Funds are financing resources aimed at encouraging projects where the necessary financing is not available from traditional sources, or may be available, but at high rates and restrictive terms. Financing may also be unavailable because of the poor credit risks of financing a project in the designated area. Projects will also be evaluated based on whether they have received support from local community groups, institutions and public agencies. Loans and the repayment of funds are offered upon terms and conditions that are not available from traditional private and public financing sources. IDF Loan Programs include: Lower Woodward Housing Fund, Predevelopment Funds, and Urban Retail Loan Fund. For more information on the Invest Detroit Foundation, call 313.259.6368 at Invest Detroit or visit http://www.investdetroit.com.
Pre-Development Loan Fund
Pre-development funds are intended to act as a catalyst for commercial, residential and mixed-use development projects in targeted areas in the City of Detroit. Predevelopment financing assists both individual developers and community organizations by providing funding for costs incurred in the early stages of a project, such as environmental studies or appraisals that facilitate the project’s pursuit of traditional financing. To be considered for a loan under this program, applicants must be able to contribute meaningful owners’ equity in their projects, present a viable business or project plan, and demonstrate a successful track record. Loan sizes range from $50,000 to $250,000 for projects within a targeted area of Detroit or for nonprofit and community development projects, the entire City of Detroit. For more information on the Pre-Development Loan Fund, including loan terms, contact Mary Seaberg King at 313.259.6368 or visit http://www.investdetroit.com/managed-funds/predevelopment-loan-fund.
Predevelopment financing assists both individual developers and community organizations by providing funding for costs incurred in the early stages of a project, such as environmental studies or appraisals that facilitate the project’s pursuit of traditional financing. Predevelopment loans may be utilized for commercial, residential and mixed-use development projects in targeted areas of Detroit. Loan sizes range from $50,000 to $250,000 for housing development projects including single, multi-family and mixed-use developments, and commercial projects that have potential for significant positive impact on the community. Loan uses include; land acquisition (intended for immediate release), environmental studies, legal work, tax credit consultants and fees, site planning and design, appraisals, survey work, and construction required to preserve the structural integrity of a building. To be considered for a loan under this program, applicants must be able to contribute meaningful owners’ equity in their projects, present a viable business or project plan, and demonstrate a successful track record. For more information on the targeted area and loan criteria, call 313.259.6368 or visit http://investdetroit.com/your-financing-needs/predevelopment/.
Real estate financing may be utilized to support the development of commercial residential and mixed-use projects. Loans to experienced developers of residential real estate and neighborhood retail centers will be considered. Financing is intended for construction of apartments, lofts/condos and single-family home developments, financing for commercial residential rental properties and retail centers, bridging tax credit equity, and purchase of real property intended for immediate development. Financing assists the developer in meeting the requirements of traditional lenders and are typically subordinate to the senior lender, but will not exceed 50% of the equity required for the project. Available loans include bridge loans to facilitate the timing gap of monetizing tax credits, construction loans, term loans (up to 7 years), and mortgage loans (up to 7 years), and range from $500,000 to $2.5 million.
General Loan Criteria includes the borrower (developer) must provide financial projections for the project which demonstrate its viability along with detailed budgets and demonstrated repayment capacity, the developer(s) must provide 3 years of financial statements and sufficient information to evaluate the developer’s cash flow and debt service capacity, and real estate loans require an equity contribution by the borrower/developer. For more information, visit http://investdetroit.com/your-financing-needs/real-estate/ or call 313-259-6368.
National Homeownership Retention Program
Loan modification programs available to eligible borrowers under this program must have received a qualifying subprime mortgage or a Pay Option adjustable-rate mortgage prior to 2008, and the property must be a 1-4 unit owner-occupied residential property. Loan modifications include FHA refinance under the HOPE for Homeowners Program, and programs for Subprime 2-, 3-, 5-, 7- and 10-Year Hybrid ARM borrowers, Pay Option ARM borrowers, and other subprime borrowers. There are various qualification requirements as well as different loan modifications options depending on the home loan. For more information on the National Homeownership Retention Program and additional assistance programs, call 313.202.3086 or visithttp://homeloanhelp.bankofamerica.com/en/nhrpfactsheet.html .
Opportunity Resource Fund
Formerly known as the Michigan Interfaith Trust Fund, the Opportunity Resource Fund is a nonprofit 501 (c) (3) celebrating 25 years of working for social and economic justice. Supporting Michigan’s communities via the creation of decent and affordable housing, jobs and great commercial spaces, we are a catalyst for positive change. The new name and logo reflect our reenergized commitment to the mission and values we have lived since our inception in 1985. The Opportunity Resource Fund seeks to reach even more communities. The purpose, while updated to incorporate a larger audience, continues to accept loans and investments from individuals and organizations to provide these funds to those denied traditional access to capital. For more information on the Opportunity Resource Fund, call 313.964.7300 or visit http://www.oppfund.org.
The Opportunity Resource Fund lends primarily to nonprofit 501(c) (3) or 501(c) (4) organizations with a stated mission of creating affordable housing. For-profit entities and local units of government may also be eligible. The Fund is a statewide organization, and provides loans throughout Michigan. Loans are provided for all phases of affordable housing development and can be used for pre-development costs, construction, rehabilitation and acquisition. Projects may include the development of single or multi-family rental, lease-purchase, homeownership and cooperative living units. Loans may also be obtained for permanent financing and bridge loans. Borrowers can include: housing development corporations, cooperatives and trusts, social service agencies, credit unions, faith-based institutions, and community development corporations. Loan amounts range from $10,000 to $1.2 million with flexible terms and affordable interest rates. For more information on the Opportunity Resource Fund Affordable Housing, call 313.964.7300 or visit http://www.oppfund.org.
Fresh Opportunity Mortgage Program
The Opportunity Resource Fund’s new program provides financing to homebuyers that normally would be unable to obtain credit. This program is an effort to revitalize Metro Detroit neighborhoods and other select areas of Michigan. The following are some highlights from this program.
- Loan amounts from $10,000 to $200,000
- No prepayment penalties
- No ARMs, reverse negative amortization or balloon loans
- No monthly mortgage insurance
- Financing with as little as 3% down (maximum loan-to-value is 97%)
- No minimum credit score required (subject to underwriting approval)
- Down payment assistance is accepted
- Flexible In-house underwriting
- 10, 15 and 30 year fixed terms available
For more information on the Opportunity Resource Fund's Fresh Opportunity Mortgage Program, visit http://oppfund.org or call 313.964.7300.
State of Michigan
Helping Michigan’s Hardest Hit Homeowners
The Michigan Homeowner Assistance Nonprofit Housing Corporation (MHA) acting through the Michigan State Housing Development Authority (MSHDA) has received federal funds from the U.S. Department of Treasury to help homeowners who are at high risk of default or foreclosure. Through A Step Forward: MHA designed programs help homeowners who have had a financial hardship. The programs include: Unemployment Mortgage Subsidy Program, Mortgage Loan Rescue Program, and Principal Curtailment Program. A Help for Hardest Hit advisor will help determine which program homeowners may be eligible for and work with the lender to provide assistance; however, Lenders are not required to participate in all three programs. Homeowners can apply directly for loan assistance at http://www.stepforwardmichigan.org. For additional information, visit http://www.michigan.gov/mshda/0,1607,7-141--235359--,00.htm or call 866.946.7432 to be directed to an advisor.
Michigan State Housing Development Authority (MSHDA)
The Michigan State Housing Development Authority (MSHDA), established in 1966, provides financial and technical assistance through public and private partnerships to create and preserve safe and decent affordable housing, engage in community economic development activities, develop vibrant cities, towns and villages, and address homeless issues. MSHDA's loans and operating expenses are financed through the sale of tax-exempt and taxable bonds and notes to private investors, not from state tax revenues. Proceeds of the bonds and notes are loaned at below-market interest rates to developers of rental housing, and also fund home mortgages and home improvement loans. MSHDA also administers various federal housing programs. For more information, visit http://michigan.gov/mshda/0,4641,7-141-7559-217947--,00.html or call 313.456.3540. The Michigan State Housing Development Authority helps first-time homebuyers through:
- Special loans and programs to make your mortgage affordable.
- Down payment help up to $7,500.
- Partnerships with banks, credit unions and mortgage companies near you, so you can work with people you trust.
- Friendly homeownership counselors who will give you straight answers to your home buying questions.
Using a MSHDA loan to help you buy your home is a great way to start.
- MSHDA 30-year, fixed-rate loans are safe and secure.
- You’ll work with a bank, credit union or mortgage company that’s a trusted MSHDA partner.
- We help prepare home budgets and offer credit repair strategies.
- MSHDA has special FHA loans, veteran loans and rural loans. We’ll help you find the loan that’s right for you.
- We have ownership counselors to help with answers to your homebuying questions and valuable homeownership classes are free.
Visit www.OwnMIHome.org for more information.
MSHDA Down Payment Assistance Program
The Michigan State Housing Development Authority is offering a Down Payment Assistance Program to low-to-moderate income homebuyers. The program offers a zero-interest, non-amortizing loan with no monthly payments. The maximum assistance is $7,500, a sales price no greater than $224,500, and household income limits depending on location and family size. Funds may be used for down payment, closing costs, prepaid/escrow expenses and a home inspection performed by a qualified home inspector. As part of the program, the homebuyer must complete a homebuyer education class and at minimum contribute one percent of the sales price. The program is available with MSHDA's FHA or Rural Development first mortgage. For more information, call 313.456.3540 or visit MSDHA’s Down Payment Assistance Program site at http://www.michigan.gov/mshda/0%2C1607%2C7-141-45866_45870-175332--%2C00.html.
MSHDA Property Improvement Program
The program offers low interest home improvement loans for eligible homeowners and landlords. For homeowners, the Property Improvement Program offers low-interest home improvement loans to single-family Michigan homeowners up to $50,000. Landlords can be eligible for up to $60,000. Eligible home improvements include roofing, insulation, siding, windows, doors, heating, air conditioning, plumbing, electrical, kitchen and bathroom remodeling, attic and basement finishing, garage, carport, deck installation, septic and sewer upgrades. Loan amounts, terms, and interest rates vary.
For more information on MSHDA's Property Improvement program, visit http://www.michigan.gov/mshda/0,1607,7-141-49317---,00.html or call 313.456.3540.
MSHDA Supportive Housing Exemption
Certified eligible supportive housing property is exempt from the tax levied by a local school district for school operating purposes. Those interested in applying for a supportive housing exemption must be non-profit, scattered-site, single-family supportive housing property and must first obtain certification as a supportive housing project from the Michigan State Housing Development Authority (MSHDA). The MSHDA certification and Supportive Housing Exemption Affidavit must be presented to the local assessor in the municipality in which the supportive housing property is located. For more information on MSHDA's Supportive Housing Exemption, call 313.456.3540 or visit http://www.michigan.gov/taxes/0,1607,7-238-43535_53197-231661--,00.html.
Neighborhood Enterprise Zone (NEZ)
The NEZ program was established by Public Act 147 of 1992, as amended. The program provides a tax incentive for the development and rehabilitation of residential housing and to spur the development and rehabilitation of residential housing in communities where it may not
otherwise occur. A NEZ also promotes neighborhood revitalization, encourages owner occupied housing and new investment by lowering property tax A qualified local unit of government may designate one or more areas as a NEZ within that local unit of government. The program was established to spur the development and rehabilitation of residential housing in communities where it may not otherwise occur. The program also encourages owner-occupied housing and new investment in communities.
The program provides for the development of new construction and rehabilitation of residential housing located within eligible distressed communities. New and rehabilitated facilities applications are filed, reviewed and approved by the local unit of government, but are also subject to review at the State level by the Property Services Division. The State Tax Commission (STC) is responsible for final approval and issuance of new and rehabilitated facility certificates. Exemptions for new and rehabilitated facilities are not effective until approved by the State Tax Commission (STC). NEZ Homestead applications are filed, reviewed and approved by the local unit of government.
New, rehabilitation, and homestead facilities may receive a term of exemption up to 15 years. Currently, three NEZ's exist in the Midtown area in the following locations: NEZ bounded by Hendrie, Brush, Ferry and Woodward; NEZ roughly bounded by Ferry, I-75, alley south of Ferry and Brush; NEZ roughly bounded by Hancock, Cass, Selden and the Lodge Freeway. For more information, call the City of Detroit Planning Department at 313.224.6380 or visithttp://www.michigan.gov/taxes/0,1607,7-238-43535_53197-213184--,00.html or contact the MEDC Customer Assistance Center at 517.373.9808.
Wells Fargo HomeLIFT Down Payment Assistance
For a limited time, if eligible, you may receive $15,000 for down payment assistance for the purchase of a primary, owner-occupied residence within select city limits in Wayne County. The assistance is fully forgivable after you live in the home as your primary residence for five years.
The program is available if you are approved for home financing and your household income is equal to or less than 120% of the area median income. Whether this is your first home or you are ready to buy again, there are a number of homebuyer education requirements that must be completed prior to home purchase.
For more information visit www.wellsfargo.com/homelift.