Creating Affordable Housing: SEED Funding / PDF Funding
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Transcript of Creating Affordable Housing: SEED Funding / PDF Funding
Creating Affordable Housing:SEED Funding / PDF Funding
Overview
What is affordable housing?
Who creates it? What approaches
work? What programs are
available?
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The Community Housing Continuum
Emergency
Shelters
Transitional
Housing
Social Housin
g
Affordable Rental
Housing
AffordableHome
Ownership
RentalHousin
g
HomeOwnership
Government Subsidized Housing Non-Market Housing Market housing
What is Affordable Housing?
What is Affordable?
30 per cent of gross household income is generally considered “affordable”.
However, affordability criteria typically differs by program and funding authority.
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Affordability Criteria – Two examples
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Example 1Canada-Ontario Affordable Housing Agreement (MMAH as IAH)
•80 percent of CMHC average market rents
•Below average resale price
Example 2CMHC Seed and Proposal Development Funds Program
•80th rent percentile
•Below average resale price
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Who creates affordable housing?
• Community leaders including non- profit service organizations and housing providers, churches, private sector developers, and municipalities.
• Each partnership brings value to the deal, such as business knowledge, financial resources or regulatory flexibility.
What approaches work? Municipal Tools Used In
Canada
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Acquiring andrenovating building
Expedited approval process
Parkland dedication fees
Affordable housing strategy Grants and loans Public–private
Partnerships
Allowing infillHousing agreements
fornew development
Redeveloping/converting
non-residentialbuildings/sites
Comprehensivedevelopment zoning Housing fund Resale price
restrictions
Designing flexibleHousing Housing organization Retaining affordable
housing
Donating landor facilities Inclusionary zoning Secondary and
garden suites
Encouraging buildingenergy efficient
housingIntensification Using development
levies
Encouragingsmaller units Land banking Waiving or reducing
property taxes
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Ideas that have worked
There are many approaches to creating affordable housing.
• Benevolent financing & funding• Donate money• Lend money
• Property • Sell property, with conditions• Lease property• Donate property
• Developers • Acquire and rehabilitate• Build new housing
Programs Available
1. Seed Funding2. Proposal Development Funds
(PDF)
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CMHC’s Seed Funding program offers financial assistance to housing proponents who are in the early stages of developing an affordable housing project.
1. Seed Funding
Up to $10,000 in the form of a grant
Up to $10,000 in the form of an interest-free loan
Seed Funding
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What Types of Housing Projects are Eligible?
Housing project must be affordable
Housing Project must be located in Canada
No restrictions on:
Building formTenure typeFuture residents of the
housing projectType of housing proponent
organization
Seed Funding
rental housing project in which units will have rents within CMHC’s Affordability Criteria
homeowner project - the units must be modest and the purchase prices must be below the market for units of similar type, size and number of bedrooms in the subject housing market and neighbourhood
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What is Affordable?
Seed Funding
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Who is Eligible?
• Not-for-profit organization
• Housing co-operative
• First Nations
• Private entrepreneur
• Group of individuals who may or may not intend to become incorporated
• Municipalities
Seed Funding
Housing market studies to evaluate need and demand for the proposed project
Development of a business plan Exploration of funding sources or options Evaluation of procurement options Preliminary financial viability analysis Environmental site assessment Preliminary design of the housing project Incorporation of a not-for-profit organization
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What activities are eligible?
Seed Funding
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What Expenses are not Eligible? Not related to the development of the
housing project
Expenses carried out prior to CMHC’s written approval of Seed Funding
Expenses related to “hard” project costs, example - lot servicing, construction, renovation, and so on
Ongoing operating expenses of the organization, example - salaries and benefits, travel, office rental
Retainer fees paid to consultants or any other professionals for work to be completed in the future
Seed Funding
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Conditions of the Funding
1. Must enter into a Contribution Agreement with CMHC
2. Must provide a need and demand study satisfactory to CMHC and an acceptable business plan before further funds will be advanced
3. Funds will be transferred only for eligible expenses confirmed with invoices or receipts
4. Eligible activities are expected to be completed within 12 months of the date of the Contribution Agreement. A longer period may be negotiated.
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CMHC’s PDF program providesinterest-free loans to facilitate the development of affordable housing.
2. Proposal Development Funding
- Up to $100,000, determined by CMHC
- Depending on the size and complexity of the proposed housing project and how much development work needs to be done.
** Not available for housing proposals whose viability or level of affordability depends upon approval for a Provincial or Territorial program funded under the Affordable Housing Agreement
Proposal Development Funding
Must have at least five (5) housing units If rental – majority of rents must be below market
rent limits established by CMHC for units of similar type, size and number of bedrooms in the subject housing market
If home ownership – the sale price must be below the market value for similar housing in the neighbourhood
Units – whether rental or homeowner – must be modest in size and design
There must be a demonstrated need for the proposed project
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Eligible criteria
Proposal Development Funding
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Who is Eligible?
Not-for-profit organization
Housing co-operative
First Nations
Private entrepreneur
Any other housing proponents who can demonstrate their ability to produce a viable affordable housing project which meets CMHC’s criteria
Proposal Development Funding
Soil load-bearing tests Environmental site
assessments Project drawings and
specifications Professional fees Cost estimates Management plan Option to purchase Development permits Contract document Application fees
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What activities are eligible?
Proposal Development Funding
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What Expenses are not Eligible?
Not related to the development of the housing project
Expenses carried out prior to CMHC’s written approval
Ongoing operating expenses of the organization, example - salaries and benefits, travel, office rental
Retainer fees paid to consultants or any other professionals for work to be completed in the future
Proposal Development Funding
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Conditions of the Funding
1. Must enter into a Contribution Agreement with CMHC
2. Must provide a comprehensive description of the project proposal, along with a need and demand study and a preliminary viability analysis and business plan
3. Funds will be transferred only for eligible expenses confirmed with invoices or receipts
Proposal Development Funding
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Loan Repayment Requirements
To be repaid out of the project’s capital financing, normally from the first advance of the mortgage loan
Only the principal amount is repaid
If project is successful in producing an affordable housing project, it may be eligible for a portion of the loan to be forgiven
If project is successful but unable to produce affordable housing units, the full amount is repayable, without interest
www.cmhc.ca/affordablehousing
Harmony House
Locked up suites
www.cmhc.ca
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Jeff KolibashCorporate RepresentativeNorthern [email protected]