# Presentation: 293275

## Commonwealth Housing Forum 2004

- Presentation by Milton R. Pratt, Jr.
- HUD Regional Director
- Wednesday, December 15, 2004

## Sustaining Development & Building Communities

- “This Administration is working specifically to promote the production of affordable homes.”
- HUD Secretary Alphonso Jackson

## HUD’s Financial Resources

- Community Development Block Grant/HOME
- 202/811 Programs
- Capital Bond Fund Financing
- FHA Multi-Family Insurance
- Housing Choice Voucher Program

## Community Development Block Grant Programs (CDBG)

- Community Development Block Grant Programs
- 	-The rehabilitation of affordable housing has traditionally been the largest single use of CDBG grants.
- 	-CDBG funds are distributed by formula around the country based on population, income levels, poverty rates and age of housing stock.

## HOME Investment Partnerships Program

- CDBG is the largest Federal block grant to State and local governments designed to create affordable housing for low-income households.
- Since 1992, through the HOME program, we have committed to produce nearly 130,000 affordable housing units in Pennsylvania.

## CDBG Funds for Pennsylvania

- CDBG Funds for FY’ 2004
- 	-$348.7 million
- Eligible Uses for the Funds
- 	-70% must be used for activities that benefit low- and moderate-income persons.
- 	-Funds can be used for rehabilitation, new construction and infrastructure improvements.

## CDBG Funds for Pennsylvania

- Innovative Uses of CDBG Funds in Pennsylvania
- 	-The McFarland Press Apartments: a 49-unit affordable rental property in Harrisburg’s South Allison Hill neighborhood.
- 	-This adaptive reuse project included $450,000 of city HOME funds.
- 	-Completed in 1997, it has received multiple accolades including a PAHRA award of excellence.

## What does the future hold for CDBG?

- The trend over the past two years reflects reductions in the program funds because of declining population in Pennsylvania and other factors used to determine funding levels.
- Program continues to be very popular with Congress and local elected officials; however, CDBG experienced a 6% decrease in the budget this year.

## 202/811 Programs 

- Funds for FY’ 2004
- 	-$38.5 million for Pennsylvania
- Eligible Uses for 202 Funds
- 	-Finance construction, rehabilitation or acquisition with or without rehabilitation of structures that will serve as supportive housing for very low-income elderly and provide for rent subsidies to make them affordable.

## 202/811 Programs 

- Eligible Uses for 811 Funds
- 	-Provide interest-free capital advances to non-profit sponsors to help finance the development of independent living condominium units and small group homes for persons with disabilities.
- Both programs provide funding assistance to project owners to subsidize operating expenses.

## 202/811 Programs 

- Innovative Use of 202 Program
- 	-South Philadelphia Presbyterian Apartments were officially dedicated on October 8, 2004.
- 	-The apartments provide 66 affordable one bedroom units in a five story building.
- 	-HUD provided more than $5.7 million to fund the mortgage of the building and an additional $1.2 million to subsidize the rent for the units.

## What does the future hold for the 202/811 Programs ?

- Pennsylvania continues to produce competitive projects; however, environmental issues have hampered funding for some projects.
- Nationally, congressional support for these programs is strong.  The programs have faced some pressure regarding completion  of projects in a timely manner.

## Capital Fund Bond Financing

- Pennsylvania’s leading the charge with the allocation of capital fund bonds.
- Housing Authorities in the Commonwealth are trying to raise $40 million to be used for infrastructure upgrades in public housing and mixed finance projects.
- Housing Authorities can borrow private capital and pledge part as debt service.
- Structured as a bond transaction which can be done on an individual or group basis.

## Capital Fund Bond Financing

-  Funds for FY’2004
- 	-Congress appropriated approximately $2.7 billion in ‘04 for the Capital Fund Program.
- 	-Housing Authorities can use up to 33% of the annual capital fund for debt service.

## Capital Fund Bond Financing

-  Eligible Uses for the Funds
- 	-Mixed finance projects and improvements to building systems such as HVAC, windows, doors, deferred maintenance.

## Capital Fund Bond Financing

-  Innovative Use of Capital Fund Bond Financing
- Philadelphia Housing Authority has completed the first bond pool transaction in Pennsylvania in the amount of $150 million.
- Grays Ferry Estates in Philadelphia is a multi-phased mixed finance project undertaken by the Philadelphia Housing Authority.

## What does the future hold for Capital Fund Bond Financing?

-  The future is very promising for this program.
- Currently, a second round pool of funding is
- 	underway thanks to PHFA’s leadership and PAHRA support; the leverage amount is greater than the first round.

## Multi-Family FHA

- FY’ 2004 FHA Initial Endorsements in Pennsylvania and Production/Refinanced Units
- 	-$25.6 million
- 	-1,403 Units
- Eligible Uses for Funds
- 	-   HUD provides insurance for loans generated by private lenders for development of multi-family projects.
- 	-   These may not generate affordable units but they do keep housing stock growing in areas where units are needed.

## Multi-Family FHA

- Innovative Use of Multi-Family FHA
- 	- Heinz Factory in Pittsburgh, Pennsylvania
- 	- FHA insured mortgage amounts to $35 million which is approximately 1⁄2 of total development cost.
- 	-The development includes 267 loft units and is located along the Pittsburgh waterfront.
- 	- It is a source of pride and has stimulated additional development in the area.

## Multi-Family FHA

- Innovative Use of Multi-Family FHA
- Heinz Factory
- 	-This project helped to preserve historically significant buildings.
- 	-Historic investment tax credits and a conservation easement helped this project which is approximately 83% complete.

## What does the future hold for Multi-Family FHA?

- Congress looks favorably on this program.
- HUD will continue to refine it to remain competitive in the conventional market.

## Housing Choice Voucher Program 

- Funds for FY’ 2004 for Pennsylvania
- 	-$885 million (Section 8, Public Housing Operating Funds, Capital Fund Program, Section 8 Moderate Rehab/SRO, Resident Opportunity and Self Sufficiency Grants)
- Eligible Uses for the Funds
- 	-Rental Assistance.
- 	-Spur development because developers can rely on subsidies from low-income tenants.
- 	-Majority are administered through Housing Authorities, PHFA and HUD directly.

## Housing Choice Voucher Program 

- Innovative Use of Funds
- 	-Upland Terrace Development and Pusey Estates Mixed Finance Project: 51 project based units consisting of 2, 3 and 4 bedroom units are currently under construction and could be complete by 2005.
- 	-Funding secured from PHFA, HUD Capital Funds and Low-Income Housing Tax Credit Equity among other sources.
- 	-Delaware County HA partnered with Pennrose Properties for this project.

## What does the future hold for the Voucher Program? 

- The program must be reformed as it continues to put pressure on all other programs.
- Program was funded in the 2005 Budget at an increase of $300 million for tenant-based vouchers and $800 million across the board.
- HUD will now provide each housing agency with a specific budget amount rather than a fixed number of vouchers.

## Technical Resources

- Regulatory Barrier Reforms
- Energy Star Program
- Economic Market Analysis
- HUD’s Regional and Local Staff

## Technical Resources

- Regulatory Barrier Reforms
- 	-Regulatory Barriers Clearinghouse, a national Web-based forum that provides state and local governments with opportunities to share ideas and develop solutions to address unique housing challenges.

## Technical Resources

- Energy Star
- 	-Voluntary government-supported labeling program that identifies appliances and products that are more efficient.
- 	-Energy Star labels can be applied to new homes or substantially rehabilitated homes under CDBG and HOME Program that are 30% more efficient than a standard house.

## Technical Resources

- Energy Star Applications
- 	-Energy savings by public housing agencies
- 	through replacing appliances with Energy Star appliances.
- 	-Energy savings attained in HOPE VI new construction.
- 	-Energy savings through the use of combined heat and power or cogeneration.

## Technical Resources

- Economic Market Analysis
- 	- HUD has published Comprehensive Housing Market Analyses for the Allentown-Bethlehem-Easton, Erie, Lancaster, Reading and York Housing Market areas.
- 	- We’re working on completing analysis for State College and plan to do one for Harrisburg Housing Market in 2005.

## HUD’s Financial/Technical Resources

- More information on HUD’s programs
- is available on the HUD website:
- 	_[www.hud.gov](http://www.hud.gov/)_

## HUD’s Financial/Technical Resources

- Today’s presentation is available on:
- _[http://www.hud.gov/local/index.cfm?state=pa&topic=news](http://www.hud.gov/local/index.cfm?state=pa&topic=news)_
- under the Highlights section