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I am Warren wooden I'm the assistant director for affordable housing for the city of Charlotte and I am joined by
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some of my esteemed colleagues this morning we have Miss Ruth EPO on the
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call she is one of our project managers uh and we have Ronald Mason Ron is uh in
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charge of our home ownership down payment assistance and other Home Ownership activities here at the city of Charlotte we're excited to bring to you
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new opportunity this morning I'm going to do about half of the slide deck um
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and then Ruth is going going to do the other half and we will be able to take questions from you at the end you can do
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that either by dropping a question into the chat or disabling your mic um and
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Ron as I get going if you would uh help with letting people into the meeting and also muting any mics that come in hot um
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while I'm talking thank you sir all right good to see everyone
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um so this uh this this program that we're going to present this morning um
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is a program that was piloted by the city back in 2020 with some funding and some direction to council that they
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wanted to see uh the city to take a more active role in positive development in existing neighborhoods and so uh that is
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where the ARR program came from um stands for acquisition rehab and resell
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and so we're going to go through you know what this program is and how to utilize it um and I'm going to try not
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to read all of these SL slides to you because I know that you could read them for yourselves but basically what we do with this program is partner with
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nonprofit organizations um to acquire uh restrict
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and resale um homes that are on the market that are um either being sold by
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a homeowner or are um or being sold out out of a rental single family rental
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inventory and it allows us to to partner with you to acquire those units and
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um uh and resell them to low and moderate income home buyers and uh it's
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a bit of a unique approach in that the way the city funding comes in is we help to provide the the subsidy either
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through a direct subsidy um at the closing table or um through a write down of a loan to help you acquire and Rehab
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uh that property
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so the way the program is going to work this round is it's going to work through a loan pool model this is something that
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we're going to try um and hopefully uh it it will work the way that we've intended um and the process will be that
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you will apply to be an eligible loan pool member and so what we have up on the screen here are some of the um the
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the requirements um we're looking for nonprofits who do have some experience
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in this work um you you may I know that there may be some for-profits on the line um we we welcome for profits to
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participate um we just ask that you have a nonprofit partner and we'll kind of
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show you why we're we're doing that here in a little bit uh you need to be registered with the city as a vendor um
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we have a an insurance requirement that you have to maintain and then we're going to be looking at your rehab uh
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experience and um so that rehab experience we're looking at you've completed 15 other rehab
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projects in the last five years and again that could be directly or through a group that's that's applying and
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working together so the way the way this program
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works is uh you you will you will you will act on your own looking for
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properties to acquire um these can be uh loans that you you know like I said can
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be coming from a a rental inventory could be for coming from an owner to to resale um if you are nonprofit you have
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first right refusal on properties those are eligible properties to be acquired we're going to show that you the GE the
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geography that the city is interested in um right now we're working at this loan value of 342 or less uh and that is uh
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the resale value and that s that value is set um based on some information that
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we have for HUD and how HUD does its programs um we will fund you over that
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again you know we're going to allow you to collect some fees for your participation in the program and so the
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maximum funding for any unit that we're going to do is going to be $350,000 um and and and for one partner
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you may you may have up to $700,000 out with us at one time so that could be two
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350 $50,000 loans or if you have Capital that you want to use um you don't have
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to take the full loan from us you could just take a loan for subsidy um and and finance the rest of the construction um
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out of cash on hand or out of a line of credit um as long as you only have
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$700,000 of outstanding liabilities with us so you could uh do uh one loan at
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350,000 and then pick three other units that you're going to finance yourself and ask us for just the subsidy amount
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of those of those units um and then of course they be sold to
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households out of below um 80%
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Ami so that's what I just said we already talked about the market value um
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we we will allow you to use a soft second to capture uh any difference between um the um the the Sal price and
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what you're financing uh to the to the owner um so this is a situation where the house might be worth 300
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$42,000 uh but there's actually only a need to finance uh
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$250,000 and you want to capture the rest of the equity through a soft second
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we will'll allow you to do that but the subsidy amount coming from the city can be no more than
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$80,000 um we we we do want you using our other basically the subsidy that we
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leave in the program through ARR is kind of The Last Resort subsidy we want you using lenders down assistance programs
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we want you use the Housing Finance agency's programs we want you to use House Charlotte and then if there's a
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remaining Gap when you're doing this um will allow you to use the equity out of
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the the AR loan um we are going to Institute a
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minimum shared Equity approach in this um we will be flexible with this know
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some of you might do a a longer stretch of shared equity on these projects um
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but we at least want to do a minimum 10year shared Equity approach as see seen here so if you're not familiar with
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shared Equity this is just to help to capture the gains on the property for
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the first 10 years and so in years one to three the homeowner would not capture those gains the nonprofit would actually
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capture those those gains and we'd ask that you'd reinvest those into another affordable housing um uh uh unit either
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either the unit that this person is selling or another unit if for some reason this this unit isn't a viable
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unit you know in year four the owner gets a third of that equity in year seven they get another third so they're
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at two thirds and then after 10 years all of the equity um is is captured and
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and to them and then we asked that the profit partner hold a first R refusal so
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you do have the ability to buy it back um and also to put a restriction on the
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property so that it can't be used as a rental as a rental uh property so again
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this approach is to provide stability in neighborhoods to convert rental units from rental into Home Ownership um to
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help with the the the the ratio of ownership uh to rental units we're going to be focused in um our corridors area
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uh and so we'll show you that in in a minute but the whole approach is to to help increase and stabilize home
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ownership and home ownership in some of our older neighborhoods this is a little bit more
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about the loan terms uh the loan that you take from the city is a loan it will be it will be securing that property
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it's a zero 0% interest rate again at $350,000 a unit or or less that's just
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our our maximum amount we will have you put affordability requirements on on that um we will be watching these
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projects and we'll be you know we'll be able we'll have a loan term on that loan but if for some reason something gets
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stalled out that happens we'll extend that loan term and then basically at the
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when you resale to the homeowner after you'll provide a performant at the end you'll provide a perform at the at the
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beginning and we will help with that final piece of subsidy by writing down
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the amount needed to make it affordable to the buyer at the end of the of the
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project so this is just uh an overview and again we're going to make these
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slide deck the slide deck available so that you have it um but this is just an overview of the entire approach um that
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we're discussing um and uh again I'm not going to read through all of this because uh
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that's not what this is here for but this is just to show you that the approach is a is a cyclical uh approach
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where the money goes out you become a a loan pool member once you're a member
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you have the ability to reserve uh funds uh from the pool uh once you reserve
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them will hold those funds for three months at first as long as the closing
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is going to happen there's no issues there we can extend that again we understand that the real EST State
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Market pre especially right now can be volatile and so we'll extend that you'll
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close on the on the acquisition you'll you'll do the renovations you'll put the I'm sorry you you'll close the the the
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loan you'll purchase you'll put the restrictions onto the property you'll do the Rehab on that property and then
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you'll resell it to LMI buyer we'll put the subsidy in needed to make the
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project pencil out and the remaining amount of that funding will then come back into the loan pool then that
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funding will then go back out to the next person in line to purchase a
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property I think that that's the end of my set of uh slides and I think uh Ruth
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you're going to run through this next Set uh with the with the with our with
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our company and uh we'll get some questions at the end so I'll flip to the next slide for you thank
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you um yes so I'm going to run through the um actual process uh once again gets going so the first step would be for um
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Partners to apply to actually become members um of the uh pool the funding
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pool um so we have some uh requirements um that we'd like you to submit as part
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of that application um and you can see our requirements listed here it's
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basically making sure that you've got the experience um and also the capacity to carry out um the program once it gets
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going so the first stage will be for the um pool membership to open um and then
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once um you're approved sorry there's some other bits that you'd also need to um include in your submission to become
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the member so that's kind of standard that we request in other rfps too so Articles of
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Incorporation um and tax exemption for the nonprofit uh from the IRS um and two
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we're looking for two years ideally certified um by public accountant of your financial statements um and
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then I'd receive those documents and then there may be a requests for further
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information and hopefully you're approved and then we'd move on to the next stage and next slide please
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Warren so the if you're as long as you're approved and you become an actual pool member so what would happen once
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you're a pool member you'd get a letter of certification from the city um saying that you're approved to go
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ahead um and bid for funding from the ARR pool um it's a non-competitive
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process in so much that we not applications could be submitted at any time when the pool is actually open um
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so as in when you find properties that you think are suitable and you have the information on um please go ahead and
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submit those we do ask for um substantial information that comes along
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with the applications just so that we can verify their suitability to the actual program so those will be listed
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out within the actual supporting documentation I've given a snapshot of what we'll be looking at here um the one
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of the key things to note is that the rehab the rehabilitation cost themselves must follow procurement processes and by
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that we mean that um we'd ask you to submit at least two quotes for the actual um Rehabilitation costs if you're
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choosing or electing to use internal labor um we just be comparing that with
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labor rates and we do use RS means as a means of kind of comparing costs um that
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are within the local area too um it sets out the so the financing if you can also
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set out the amount of loan requests that you're doing the estimated acquisition of Rehabilitation costs again we know
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that those may or may not vary as you go through the project so we'll be kind of working with you at the end um to fix on
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the actual costs incurred um and then sources of any non- city funding that
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you anticipate using for the acquisition of Rehabilitation too and we have there's a standard City Pro former with
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a subsidy analysis um that we'd ask you to complete both at the beginning and the end of the process once the resale
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is successful we can go to the next
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slide so the eligible properties that we're looking at will be single family
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and town homes um fee simple ownership and currently Condominiums aren't um
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accepted in the program at the moment um and the reason we're looking at um or
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requesting a minimum of 10 years life for the home systems and the structural components is that we don't want to
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burden um low bate income buyers with like a
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high ticket item as soon as they've purchased a property and to to ensure that they've got like a prolonged
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lifespan um we we don't want anybody um or households to be displaced during
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this program that's not the purpose of it we want to House people um and not have to undergo relocation we do have a
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specific area that we're targeting so it's the corridors of opportunity which is six areas that have been identified
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by the city um so yeah we'd be focusing on those ones um and if you could just
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pop back again so we're just fixing on those um building code is also critical
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so no um illegal uh structures um we won't be
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paying for the legalization or permitting of anything like that um no code violations um if if when you're
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viewing the property and it becomes aware that there's an environmental concern then we'd be looking um for your
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plan of action time scales and cost for remediating um any issues that have been
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identified um and it's just to reiterate again that the um resale value of the rehabilitated property cannot exceed
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342,000 um and the properties must be sold at
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Market uh yeah if we move on to the map
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quickly so yeah this is um showing you the six areas where Charlotte is
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focusing and actually targeting investment um and that's where we want to focus the um areas of where we're
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looking to include properties within this um acquisition and Rehab resale program so those are the ones that
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you'll be looking for to see if there's any um vacant homes any properties that are on the market um at present that may
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need um that you can utilize this program and funding for next slide
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please okay so the actual application review
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process so the um this is for when you've actually identified a property
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you have you've compiled the costs and everything like that um you would actually submit that information to me
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as the program and administrator um I'll be reviewing the cost checking cost checking that it kind of conforms to the
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program um where we're looking at location um property type resale value
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excuse me and then as long as it's approved and we'll do the same as we do with other loans we'll issue you with um
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a commitment letter and that would provide you with the level of loan amount the city's prepared to offer
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along with a maximum of three months um validity period um the documents
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themselves will be drafted by the city myself and then the partner the AR pool
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member and their attorney um and then we'd be looking to get documents executed in house with regards to the
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funds it would depend on the structure of the deal so if you're seeking funds say for the acquisition um then the loan
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would close at the point that you'd acquire the property whereas if you're looking for funds to assist with the um
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Rehabilitation of the property itself then the funds would be released on a reimbursement basis so as in when you
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incur the costs you would submit the invoices and then the city would make payment um based on those invoices is
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but it's important to note that those invoices must have the um supportive supporting information basically to
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verify that the cost have been incurred by the AR po member and next slide
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please so we actually have an in-house uh rehab team um so they're basically on
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point to um um monitor the works as and when they're going on um so as and when
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we close on a loan um with a pool member um they'll be notified and we'll keep in
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uh contact with you so as and when works begin um our rehab Specialists will actually visit site to check how the
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progress is going um and they can report back to me with how um The Works are progressing um we do request um that PO
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members provide us with monthly reports themselves along with um the financial
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uh progress and this is the onus is on the member to actually Market the property
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once it's completed the rehab um to for the affordable sale um so you're looking
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at ensuring that in the um sale documents that people are fully aware
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that there's like a maximum income limit um at the resale closing we do ask that City's given the
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opportunity to verify that the home buyer is actually um eligible um as a
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home buyer for the property so we'll be looking for income verification um to demonstrate they fall within the program
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requirement of um maximum of 80% are immediate income and then obviously
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following that once the resale is closed um we'd be looking to have a payoff
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statement um where we can settle the amount that's payable back to the city
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which will then go back into the um AR pool fund and next slide
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please and we are looking for this to be an ongoing program um so there'll be an
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annual renewal process for pool members that are interested in continuing um so
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what would happen is You' submit a letter to the city um and just submit supporting documentation to basically
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demonstrate that you're still in good standing um we'd ask for the last year's um
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certified uh accounts um and your updated insurance policy to um and then
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what would happen is once that's approved I'd issue another letter to say that you're continuing as a a pool
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member for that next year so that be FY 26 and that's all for me so I'd now like
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to open up oh no it isn't all for me we've got the program schedule I apologize so the poll which is where
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you'd apply to be a member um is to be launched in August um and that's where
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you're giving your um experience capacity demonstration of any similar
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project you've worked on within the past 5 years and then the actual funding will open in September of 24 so it gives us
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time to review the actual member applications and then um you can get going with submitting property um
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funding requests from September and now I'd like to open the
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floor for questions thank you very much yeah so that's all we have in terms of the
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program uh overview again uh we we try when we ask you to come to these uh
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webinars to just provide you the information very quickly so that you can find out a little bit about the program
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um if you'd like to ask a question you can either uh use the raise hand feature at the top of the screen or you can pop
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pop something into uh the chat we'll be happy to respond to it if we can and if
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we can't uh we will we will get back to you also all of the program documentation for additional details
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will be on the website when you're eligible to apply for the pool we'll put the program outline which will provide
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you more detail on the program so um you if you have program detail questions uh
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um we we we'll try to answer them today if if you do if if not um we will make
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sure that they are answered by the document uh that'll be on the website coming up in just a few days any
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questions
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well Ruth we did an amazing job oh we got one question there we go hold on one
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second yeah so uh Rachel asked a question for shared appreciation will
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Arrangements longer than 10 years be accepted uh yes so that that that's the
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minimum for for the program but we understand that various nonprofit organizations already run programs like
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this and so a longer period will be will be accepted as long as you be that
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minimum requirement thank you Rachel uh Kirk you can come off of uh off of mute
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and ask your question if you'd like I'm sorry I got I just went back
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and read the slide um I was looking at it where um just to see if new construction would be a part of this
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process no new construction will not be part of this process
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yep we'll have some other opportunities for new construction um coming up soon and if you're also working for a
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nonprofit organization for new construction you can talk to Ruth offline about the home uh the home
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funding pool uh so there's actually a way to do that so um Ruth do you have
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your email at the end of this slide deck we'll make sure that Ruth gets her email out oh do you yeah there it is so
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there's Ruth email Kirk um you can you can send her an email about that and she'll be happy to share that
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information with you thanks for the question so I have one more question if you don't mind sure um so is this
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typically just for um Acquisitions and sales of property for affordable housing so people having equity in a home are we
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targeting um rental rates or just selling so of the home so this yeah
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so this this is for the what what are eligible for acquisition are properties that are already on the
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market by a homeowner who is going to sell their property anyways or by a for
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a rental unit that is no longer occupied so an empty rental unit to ensure that we don't displace anyone those are the
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properties that are eligible for purchase 104 104 that makes a lot
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Warr hey Warren this is Marcus por um thanks uh to you and Ro for this great
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overview of this opportunity that's one question I have um related to a scenario
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where um the participant in a program um leverages funding to purchase
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a home and wants to leverage additional funding you have home is there a time
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window or time period from purchase to to rehab and actually that home is ready
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for for resale um do you have any restrictions or applys or time it takes
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to actually from the time of purchasing securing those loans from the city to
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purchase to time that unit needs to be ready for the sale yeah so R Ruth said that you know
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we'd like you to be in a place when you when you when you apply to the pool that you can close within 90 days to purchase
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that property um I will go back and check to see if we've talked about a time frame for
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renovation um but I will tell you that my expectation would be four to 6 months that that's that's typically what we've
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seen the the learning that we've done after this is we we we did this with a couple of Partners on a pilot basis um
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over the last couple of years and and typically what we are seeing is is four to six months to get that thing on the
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market um and ready for for sale great question perfect thank
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you great uh any other questions yeah Rachel's H got a good one uh regarding
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she says how long do you anticipate the preparation of the loan docks by the city staff and attorney and pool member
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to take which is a good really good question um I can tell you that we've got um very efficient attorneys and it
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all depends on the efficiency of the turnaround of the pool member and their attorney um to be honest um we we have
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had experience in the past where we've had comments back like within a day I'm not sure how quick it worked on the
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previous um uh round because I wasn't actually here um so I can't speak with
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that but in terms of other deals I've been working on dep as long as you've got the right people in place it can be
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very quick and efficient Warren I don't know if you want to extend on that no and these are fairly straightforward
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transactions so you know we'll have we'll already have pre-prepared docs on
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these um that you'll be able to look at and see so um again I don't I don't
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anticipate that being a difficult process great
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any other questions before we close out our time together I have one question if that's
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okay yeah go ahead uh Sean Kennedy with Prosper Alliance Kennedy properties
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quick question SE so knowing the market in Charlotte um would it be possible if we identify a property and being that
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it's so competitive pay cash to purchase it and being reimbursed from the city once we pay cash for it just to make
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sure we secure it at a good price and make sure we get it that is that is an acceptable practice you just want to
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make sure that you're fully approved and you have the money reserved in the uh in
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the loan pool before doing that I would recommend you don't do that until we can get you an approved loan process so that
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can happen very quickly we we were making decisions once the partner got us all of the paperwork within 48 Hours it
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just gives us enough time to be um to review your documents to make sure that
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everything um is all the costs that you're saving are reasonable um and that it meets the
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requirements you know that it's in the the correct location that the cost the sales cost is going to be correct so so
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yeah that's that is a an acceptable practice so long as you reserve the money before you actually make the
29:45
purchase but that's a great question Sean thank you and then I saw one more come in through
29:54
chat will the presentation be emailed to us it won't be emailed to you but all of
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this including this webinar will be posted onto our um proposals website and
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if you just em if you can't find it uh email Ruth and Ruth will send you the link so you can see this proposal and
30:13
Ruth is already on top of it there it is right there so copy that copy that link down everything that comes out from
30:20
Housing Services in terms of housing um funding opportunities is is posted on
30:27
that page this we will be posted on that page all the the application link will be posted on that page all the program
30:33
documents will be posted on that page but it's a great question all right uh not seeing any
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additional questions I don't think I've missed any hands up um just want to
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really thank everyone for their time um we um recognize that uh the city can
30:53
play a part but it is when we are working together that we actually have the big
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impact on the city and uh this is an area where we really want to partner
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with you to help increase uh home ownership opportunities in our existing
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neighborhoods and uh really give people an opportunity for economic uh Mobility
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so so thank you all for your time today we look forward to hearing for you and we look forward to your participation in
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the loan pole take care