AFFORDABLE HOUSING UBCM September 25, 2003

A LITTLE HISTORY  The Federal Government, through CMHC currently spends $1.9 billion annually in supporting 640,000 units for lower- income households.  In BC the figures are $207.9 million annually to support 76,900 units.

WHAT’S NEW?  $1 billion Affordable Housing initiative  $384 million for Renovation programs  Focus on affordable Housing  Expanded Partnership Initiatives  Increased Loan Insurance Flexibilities  No longer limited to non-profit sector

AFFORDABLE HOUSING INITIATIVE  Provinces and territories have the primary responsibility for design and delivery  Provinces require flexible programs to address their housing needs  The initiative needs to create affordable housing for low to moderate income households

AFFORDABLE HOUSING INITIATIVE – cont’d  Units funded will remain affordable for a minimum of 10 years.  Provinces and territories will be required to match federal contributions overall

EXPANDED PARTNERSHIP INITIATIVES  Seed Funding  CMHC sponsored training to increase capacity development  CMHC consultation services For housing that is community based and/or innovative – not necessarily affordable

SEED FUNDING  Financial assistance to potential housing providers, for-profit and not-for-profit  Proposal must be for a specific housing project that is innovative OR community based OR affordable  Funding is up to $20,000 per housing project – up to $10,000 grant, up to $10,000 loan  Proposal call process

CAPACITY BUILDING TRAINING Training to assist housing providers in acquiring information and skills they need to:  Organize themselves  Develop the project  Manage the housing once it is build Curriculum is currently under development

EXPANDED CONSULTATION SERVICES  Increased resources  More financing advice and underwriting guidance to assess long-term project viability  Earlier in the housing development process

PROPOSAL DEVELOPMENT LOANS  Financial assistance to potential housing providers, for-profit and not-for-profit  Repayable interest-free loans to a maximum of $100,000  A portion will be forgiven if the project is successful in producing affordable housing

PROPOSAL DEVELOPMENT LOANS  Must be able to demonstrate the project will meet CMHC’s affordability criteria  Reasonable expectation of project viability  The proposed project must be at least 5 units  Units must be modest in size and design  Demonstrated need for the proposed housing project

Increased Loan Insurance Flexibilities  Larger rental loans  Reducing rental mortgage insurance premiums  Greater flexibility related to cash flow requirements, loan advancing and repayment options  Greater flexibility in equity requirements for homeowner loans

MORTGAGE LOAN INSURANCE What is it? Protects Approved Lenders against losses resulting from borrowers defaulting on their mortgage loans Because the lender’s risk is greatly reduced, they are more willing to make the loan

ADVANTAGES FOR BORROWERS  Reduced Equity (higher loan-to-value ratio)  Better interest rates  Insurance coverage for duration of loan

CONDITIONS  Units must be additions to the affordable housing stock  Minimum of 5 units  Modest in size and design  Available to any sponsor who provides affordable housing and who meets borrower eligibility criteria

AFFORDABLE - RENTAL  Level th percentile  Level 2 – 65 th percentile  Rent maxima published by CMHC for 172 CMA’s and CA’s  Majority of units in a rental project must have rents below Level 1 or Level 2 limits

AFFORDABLE - RENTAL Maximum Rent Level – 2 Bedroom Limits CMA or CALevel 1Level 2 Campbell River Cranbrook Dawson Creek Kamloops Kelowna Prince George Terrace600 Vancouver1, Victoria840775

INSURANCE PREMIUMS Loan To Value Ratio Standard Premium (% Of Loan Amount) Reduced Premium for Affordable Rental (%Of Loan Amount) 65% or less1.75%1.40% 70% or less2.00%1.60% 75% or less2.25%1.80% 80% or less3.50%2.80% 85% or less4.50%3.60% 90% or less4.05% 95% or less4.50%

GENERAL PRINCIPLE The more affordable the housing, the wider the range of tools available…

BENEFITS  Increased community capacity  Financial assistance for grass roots organizations to get organized and assess housing needs in their community  Interest free loans are available to any organization that can show their projects provides affordable modest rental units

BENEFITS  Encouraging private sector donations to non-profit housing  Discounted mortgage insurance premiums  Increased loan to value limits  Extended amortizations  Increased flexibility in cash flow requirements

FOR MORE INFORMATION  CMHC website  Contact a regional Partnership representative Stephen Hall Senior Advisor, Partnerships

HOUSING OUTLOOK CONFERENCE 2003 Wednesday, November 5, 2003, 7:30 AM – NOON HYATT REGENCY HOTEL 655 BURRARD STREET VANCOUVER, BC

REGISTER BEFORE OCTOBER 3, $175/person Regular Rate: $195/person Group Rate: $165/person (3 or more people from the same organization) TO REGISTER: Telephone (604) ca-.ca