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Home My WebLink AboutItem 3B - PresentationA Comprehensive and Integrated Approach to Affordable Homeownership www.nphsinc.org 3B - 1 NPHS Three Areas of Impact Socio Economic Community Wealth Building and Preservation •Economic Inclusion •Homeownership Development •Homeownership Preservation •Financial Wealth Building CDFI Lender Inclusive Consumer Lending •Down Payment Assistance •Home Repair Lending •ADU Lending •Small BusinessLending Community Developer Single Family Housing Development •HomesbyNPHS •Factory-Built Homes •NPHS Community Land Trust www.nphsinc.org 3B - 2 Scaling Climate Resilient and Adaptive Homes that are Accessible to Everyone www.nphsinc.org 3B - 3 Scaling Climate Resilient and Adaptive Homeownership that is Accessible to Everyone www.nphsinc.org 3B - 4 www.nphsinc.org Homes that Rise to Meet the Wellness of Families Integrating energy efficiency, healthy features, and climate resilience in home construction enhances family wellness. Our homes will include the following features: 1.Eco-Friendly Construction 2.Highly Energy Efficient Ecosystem 3.Solar Panels and Energy Storage 4.EV Ready 5.Indoor Air Quality Monitors 6.Wildfire Preparedness Certification These features prioritize energy efficiency, health, and climate resilience to promote family well-being.3B - 5 www.nphsinc.org Highland Haven •Approx. 1,494 square feet in size •3 bedrooms •2 bathrooms •2 car garage (400 sqft.) •Solar Panels and Battery Storage •WUI Plus Package •Dual Tempered Glass •Energy Star Rated •Electric Appliances included •Water Resistant Plank Flooring •Granite Countertops •Wildfire Prepared Home Plus Designation*3B - 6 3B - 7 3B - 8 www.nphsinc.org Elevate Villa •Approx. 1,200 square feet in size •3 bedrooms •2 bathrooms •2 car garage (400 sqft.) •Solar Panels and Battery Storage •WUI Plus Package •Dual Tempered Glass •Energy Star Rated •Electric Appliances included •Water Resistant Plank Flooring •Granite Countertops •Wildfire Prepared Home Plus Designation*3B - 9 3B - 10 www.nphsinc.org This development aims to benefit the City of Palm Springs, the neighborhood where the homes are located, and low-income homebuyers. The project will provide homeownership opportunities for low-income households who earn 80% or less of the area median income (AMI). *Rosa Parks property would allow homeownership opportunities for households up to 120% AMI. By targeting buyers within this income range, NPHS offers viable homeownership options for those who struggle to find housing within their budget in our current housing affordability crisis. To ensure long-term affordability, each property will be placed in a Community Land Trust (CLT), ensuring a 99-year affordability commitment. This model will be utilizing innovative development practices and sustainable affordability through creative ownership structures.3B - 11 The land is a community asset with homes on it set aside for the workforce. www.nphsinc.org HOUSING OUR WORKFORCE -IT IS ALL ABOUT THE PAYCHECK The price of the home is tied to income, so it remains affordable in perpetuity. 3B - 12 Partnerships City NPHS Nonprofit Developer & Land Trust www.nphsinc.org 3B - 13 www.nphsinc.org Over 12,000 Homeowners Created Since 1991 3B - 14 The Process for Partners Developer approaches City with Project City &Developer discuss CLT model for workforce units City creates MOU outlining #of workforce units in project &AMI Regulatory Agreements Drafted Developer puts in an application Entitlement process/City project approval Buyers qualified. Regulatory docs signed. City deeds the land Developer Builds Workforce Units Prepare for COE with Qualified Buyer www.nphsinc.org 3B - 15 City deeds land for housing to Land Trust Land Trust holds land as community benefit. Land Trust Leases land to Family Developer sells house to the Family •Family enters 99-year renewable ground lease. •Has exclusive rights to the property, like ownership. •Agrees to sell to same income level to keep the home affordable in perpetuity. How Does it Work? Family owns the home and has a 30-year fixed mortgage. www.nphsinc.org 3B - 16 Qualifying information compiled by lender and CLT: Date of Application Name of Applicants AMI % Number of people in household FICO Score Annual Income Qualifying ratios: % of housing costs to income & % of debt to income (ideally max 35%/43%) Purchase price Down payment Employer 1st Time homebuyer:Yes/No Live or work in City:Yes/No* *The application is open to all, and preference is given to qualified applicants who live or work in the City www.nphsinc.org 3B - 17 How do we keep the home affordable for subsequent buyers? The price of the home is tied to the paycheck, not the market .The index tied to resale is the Area Median Income (AMI) To keep the homes affordable to future buyers, homeowners agree to sell their home for a limited price when they decide to move The maximum price is calculated based on what was paid plus an annual increase based on the change in the area median income www.nphsinc.org 3B - 18 Calculating the Resale Price (Example) •Initial Median Income in 2013 for Family of 4 at 80%AMI: $50,950 10 years later in 2023: •Median Income in 2023 for Family of 4 at 80%AMI: $74,550 •Change in Incomes from 2013 to 2023 = 32% (AMI chart comes out annually -could be more, could be less for future changes) Source: HCD State Income Limits -Riverside www.nphsinc.org 3B - 19 Calculating the Resale Price (Example) Initial Purchase Price:$200,000 If: Change in Median Income =32% Then: Maximum Sales Price =$264,000 Total Appreciation = $64,000 Total equity = Appreciation + Debt Reduction + Down payment www.nphsinc.org 3B - 20 Stewardship Matters CLTs during the Great Recession www.nphsinc.org 3B - 21 www.nphsinc.org 3B - 22 Example of a Proven Working Model 1x Community Investment serves to keep the Home as affordable to subsequent buyers as it was to the 1st Buyer -for example, a house built in 2005 in Santa Rosa, CA has now served the 5th buyer 1x Investment www.nphsinc.org 3B - 23 Equity = appreciation based on area median income + amount of principal paid off $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 0 2 4 6 12 14 16 18EQUITY810 YEARS IN HOME Model success example: Is There Wealth Building in HLT Homes? RESALE EQUITY•HLT has completed 32 resales since its inception •Our homeowners have on average sold their homes for $50,000 more than they bought it for •Upon selling their home, our homeowners have walked away with an average of $100,000 in total equity, which is often used towards the purchase of a market rate home. www.nphsinc.org 3B - 24 www.nphsinc.org Why Does Subsidy Retention Matter? Protecting the Public Investment Eliminating Eliminating the need for government & private subsidies in future years as units are resold Tying Tying subsidy to the unit, not the family Maintaining Maintaining income targeted workforce housing stock Creating Creating community wealth and personal wealth while maintaining future affordability 3B - 25 Partnering Partnering with a non-profit in NPHS to steward a finite resource that serves as a permanent subsidy to generation after generation of affordable homeownership. Making Making homeownership a reality for the workforce in our community. Delivering Delivering stewardship to families to ensure successful homeownership. Creating Creating community wealth by preserving land that will benefit the community in perpetuity. Strengthening Strengthening the fabric of our community by providing our workforce a secure place to live. www.nphsinc.org What are we Accomplishing? 3B - 26 Jesse Ibarra, Chief Business Officer @ jesse@nphsinc.org (562) 879-3899 www.nphsinc.org 3B - 27