fhlbank atlanta 1 1 federal home loan bank of atlanta virginia housing credit conference september...
TRANSCRIPT
FHLBank Atlanta
11
Federal Home Loan Bank of Atlanta
Virginia Housing Credit ConferenceSeptember 5, 2013
Joel Brockmann Rental Production Manager
Community Investment Services
FHLBank Atlanta
• FHLBank Atlanta Overview
• Community Investment Services (CIS)– Overview– Product and Services– Connecting the Dots: Value and Benefits
• What Can We Do To Assist You?
Our Discussion Today
2
FHLBank Atlanta
FHLBanks Perform Critical Function• Cooperative, regional structure of FHLBanks
helps reduce risk; increases responsiveness to shareholders
• FHLBanks meet liquidity and risk management needs of financial institutions of all sizes
• Via our shareholders, provide essential “equity-like” funding for locally based affordable housing and community development
3
FHLBank Atlanta
4
• Like every “dividend,” predicated upon earnings
• “Equity-like” capital for real estate transactions
• Direct & indirect benefits to shareholders, developers, homebuyers, tenants, and the community
Unique Offering to Shareholder
FHLBankProducts
CommunityDividendEarnings
10 percent
=
FHLBank Atlanta
Growing communities create demand for additional financing
FHLBank Atlanta provides “equity-like” funding enabling shareholders to make
transactions viable and attract new customers
Funds are invested in community-based transactions generating successful lending opportunities
FHLBank Atlanta
Shareholder
Community
Shareholder originations create demand
for advances
BenefitViable lending;new customers
5
BenefitNew and Rehabbed
Housing,Growing Local
Tax Base;Job Creation
Connecting the Dots
FHLBank Atlanta
EconomicDevelopme
nt Program
AHPCompetitiv
eProgram
AHPSet-asideProgram
Community
Investment
Program
$441 Millioncompetitive funding to create over 73,000 rental and homeownership opportunities for moderate-, low- and very low-income households since 1990.AHP Competitive Leverage Ratio – 1:15
$121 Millionfunded through AHP Set-aside products and supporting more than 18,000 units since 1997.AHP Set-aside Leverage Ratio – 1:18
$6.5 Billionof low-cost CICA advances supporting community economic initiatives and affordable housing development.
Scale and Impact of our Shareholder Leveraging of AHP
6
*As of 7/31/13
FHLBank Atlanta
7
Products Responsive to Market• Affordable Housing Program (AHP)
– AHP Competitive – rental and ownership• Rental or Ownership• New construction or rehabilitation• Single-family or multi-family• Mixed-use• Acquisition/owner-occupied
– AHP Set-aside – ownership only• First-time Homebuyer Product (FHP) • Community Stability Product (CSP)• Foreclosure Recovery Product (FRP)• Energy Efficiency/Weatherization Rehabilitation Product (EWP)• Accessibility Rehabilitation Product (ARP)• Veterans Products
• Community Investment Program (CIP)/Economic Development Program (EDP)
– Discounted advance products for residential or economic development projects
Commercial Opportunities
Single-Family Mortgage Opportunities
Commercial Opportunities
FHLBank Atlanta
8
• Funding to create rental and homeownership opportunities for moderate-, low- and very-low income households
• Maximum $500,000 per project• Competitive Application Process (1 round per year)• Beneficiaries
• Residents at or below 80% of Area Median Income (AMI)• Uses:
• New construction/rehabilitation• Single-family/multi-family• Acquisition/Owner-occupied rehabilitation
AHP Competitive Product - Rental
8
FHLBank Atlanta
Multi-family Purchase and RehabilitationWashington, DC, 43 units
Housing for homeless veterans AHP Shareholder VA
Acquisition $850,000 $450,000 $400,000
Construction $500,000 $50,000 $450,000
Soft Costs
Other Costs $83,000 $83,000
Total Development Budget $1,433,000 $500,000 $533,000 $400,000
Total Shareholder Debt – First Mortgage $533,000
Shareholder Loan-to-value (LTV)/cost 37.2%
AHP Competitive $500,000
Total Shareholder Debt if AHP converted to Debt
$1,033,000
Shareholder LTV/cost if AHP converted to Debt
72.1%
DCR 1.15
DCR if AHP converted to debt (7.5% for 15 years)
0.67
9
“AHP has the ability to fill funding gaps.” – FHLBank Atlanta Shareholder
AHP Competitive Product – Rental Example
FHLBank Atlanta
Multifamily Rental
Multi-family Acquisition/RehabilitationNewport News City, VA, 80 units
AHP Member
Other Sources
Acquisition $1,350,000 $950,000 $400,000
Construction $6,579.724 $714,000 $950,000 $4,915,724
Soft Costs $1,380,734 $1,380,734
Other Costs $1,914,619 $1,914,619
Total Development Budget $11,225,077
$714,000 $1,900,000 $8,611,077
Total Member Debt – First Mortgage $1,900,000
Member Loan-to-value (LTV)/cost 16.9%
AHP Competitive $714,000
Total Member Debt if AHP converted to Debt $2,614,000
Member LTV/cost if AHP converted to Debt 23.3%
DCR 1.36
DCR if AHP converted to debt (7.5% for 15 years)
.91
10
FHLBank Atlanta
11
• Ownership transactions• Types
• Ownership new construction • Acquisition / rehab• Owner-occupied rehab• Downpayment assistance
• Use of Funds • Acquisition • Rehabilitation• New Construction and/ or • Permanent funding
AHP Competitive Product - Ownership
11
FHLBank Atlanta
Value and Impact to You as a Business Developer
• Enables extension of credit
• Reduces loan risk
• Compatible with public or private debt and equity
• Equity for difficult to develop/critical deals
• Magnet to create new relationships
12
FHLBank Atlanta
Stimulates Real Estate Activity
Housing
13
*Beyond Units: Economic Benefits of the
Federal Home Loan Bank’s Affordable Housing Program
Additional$8.3 Billion
local economic Impact*
AHP Bank funds circulate through the economy of your
local communities multiple times
Tax Revenue$932 Million*
Local Development
$4.8 Billion*
46,000 Jobs*
FHLBank Atlanta
Value and Impact to Shareholder Financial Institutions
• Business Opportunities
• Commercial / construction loans
• First mortgage origination
• Reduces loan risk
• Public perception
• CRA and compliance friendly
• Stimulates real estate activity and economic
development14
FHLBank Atlanta
15
• Village Bank, Richmond, VA
Virginia Success Stories
Leverages AHP to assist first time homebuyers
FHLBank Atlanta
16
Virginia Success Stories
Union First Market Bank, Ruther Glen, VA – “The Federal Home Loan Bank has help realized the dream of persons with
disabilities gaining access to affordable and accessible housing in King George County. We could not have done it without you!”
- Fronce Wardlaw, Project FAITH, Inc.
Virginia Heritage, Vienna, VA“We are a big fan of the Federal Home Loan Bank of Atlanta. They werecritical in helping us establish our mortgage operation. We see the
strategic marketing advantage of using AHP programs. We just got done with a Fair Lending review with our regulator who was very pleased with Virginia
Heritage Bank’s first time homebuyer activity.”
- Richard Hutchison, Chief Mortgage Officer, Virginia Heritage Bank
FHLBank Atlanta
Just Announced! Virginia Winning Projects in 2013• Virginia Projects were awarded $2,886,789 in affordable housing
funding for the 2013 round– 447 rental units funded– Leveraging $55,331,371 in total development - 19:1
leveraging• Armstrong Place, Lynchburg, VA
– Member: Community Capital Bank of Virginia– Sponsor: Rush Lifetime Homes– AHP Amount: $195,477 for 27 rental units– Total Development Cost: $6,232,771– (28) 1- and 2-bedroom affordable units for special needs residents
• Pine Ridge Apartments, Louisa VA– Member: EagleBank– Sponsor: REBJ, Inc. with Telamon Corporation– AHP Amount: $265,000 for 27 rental units– Total Development Cost: $2,680,171– Preservation and rehab of two-story garden style buildings
17
FHLBank Atlanta
Just Announced! Virginia Winning Projects in 2013• Lovingston Ridge, Lovinston, VA
– Member: Branch Banking and Trust Company– Sponsor: Southeastern Housing Preservation, Inc.– AHP Amount: $250,000 for 64 rental units– Total Development Cost: $5,491,191– Acquisition and rehabilitation of 64 units for low- and very-low
income residents• Crescent Square, Virginia Beach, VA
– Member: Branch Banking and Trust Company– Sponsor: Virginia Supportive Housing– AHP Amount: $500,000 for 80 rental units– Total Development Cost: $10,216,352– Mixed-income community with support services for homeless
and low-income residents
18
FHLBank Atlanta
Just Announced! Virginia Winning Projects in 2013• New River Gardens II, Radford, VA
– Member: Branch Banking and Trust Company– Sponsor: Southeastern Housing Preservation, Inc.– AHP Amount: $346,312 for 44 rental units– Total Development Cost: $3,912,392– Acquisition and rehabilitation for units targeted to very-low
income families• Edenbrook Park, Crozet, VA
– Member: Bank of America, National Association– Sponsor: Humanities Foundation, Inc.– AHP Amount: $500,000 for 84 units– Total Development Cost: $11,765,882– 84 homes targeted to low- and moderate-income families
19
FHLBank Atlanta
Just Announced! Virginia Winning Projects in 2013• Puddledock Place, Prince George, VA
– Member: Bank of America, National Association– Sponsor: Humanities Foundation, Inc.– AHP Amount: $500,000 for 84 units– Total Development Cost: $11,600,873– Acquisition of 84 homes in five buildings with a new
community building• Hillside Apartments, Pearisburg, VA
– Member: Community Capital Bank of Virginia– Sponsor: Pax-Edwards, LLC with Green Trust Alliance– AHP Amount: $330,000 for 36 rental units– Total Development Cost: $3,431,739– Acquisition and rehabilitation of 37 1-, 2-, and 3-bedroom units
20
FHLBank Atlanta
What’s Next for AHP Competitive
• New Veterans Housing category • 5 points for projects that reserve 10% of the
units for Veterans
• 2014 AHP Competitive Round Schedule• Round Opens January 14• Applications Due February 13• Award Announcements by early June
21
FHLBank Atlanta
What’s Next for AHP Competitive (cont.)• 3-Year Schedule
22
Open 1/14/15
Close 2/13/14
Winners Notified
Juneq q qJan Feb Mar Apr May June July Aug Sep Oct Nov Dec
Open June
Close July
Winners Notified
Octq q q
Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
Open March
Close April
Winners Notified
Julyq q q
Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
2014
2015
2016
FHLBank Atlanta
Affordable Housing
Christopher Place Academy Baltimore, MD
AHP Investment$500,000
Total Development Cost $4,303,020
23
FHLBank AtlantaThe Community Dividend at Work
Affordable Housing
Boaz and Ruth Homes IRichmond, VA
AHP Investment $190,000
Total Development Cost $1,420,000
Foreclosure Recovery
Khella FamilyMidlothian, VA AHP Investment $12,000
Sales Price$170,000
23
Affordable Housing
Woods at YorktownYorktown, VA
AHP Investment $354,000
Total Development Cost $7,203,459
Energy Weatherization
Lamas FamilyMc Gaheysville, VA AHP Investment $11,331
Hard Cost $9,443Soft Cost $1,888
Affordable HousingCrispus Attucks Apartments
Exmore, VA
AHP Investment $110,000
Total Development Cost $3,998,016