1. 11 Vision West Consortium NDHFA Update June 16, 2015

2. Overview of NDHFA Self-supporting state agency that –Provides low-cost mortgages for low-to-moderate income households (Homeownership Division); –Finances the construction and rehabilitation of affordable multifamily and single family housing; (Planning and Housing Development Division);and –Monitors program compliance on low income housing projects (Property Management Division) 2

3. Legislative Update Housing Incentive Fund reauthorized with –$30 million in state income tax credits –$5 million from the Bank of North Dakota profits immediately –An additional $5 million from BND if they reach a $130 million profit level during 2015 –Restricts the additional $5 million for use in communities with populations under 12,500 –Capped origination fees at 5% 3

4. Other Legislative Action Legislature defeated NDHFA sponsored bill to include projects owned by 501(c)(4)s as being eligible for lower property taxes –Currently limited to projects owned by 501 (c)(3)s that meet other criteria –Info available on Agency website www.ndhfa.org BND received funding for the Affordable Housing Flex Pace program of $12 million 4

5. Housing Incentive Fund Administered by the North Dakota Housing Finance Agency www.ndhfa.org or www.ndhousingincentivefund.org www.ndhfa.orgwww.ndhousingincentivefund.org State funded program to encourage developers to set-aside some or all of their rental units for low to moderate income households. Initially created in 2011 by Legislature to allow a credit against state income and financial institution taxes equal to the contribution into the HIF. Available only for rental units 30% of cost of project (limited to $3 million) in the form of a 0% forgivable loan 5

6. 66 How does HIF work? (with state tax credits) Affordable Housing Developers NDHFA HIF Contributors State Tax Credits $ ContributionsLow-Cost Financing HIF Loan Repayment

7. HIF III Status Update $35 million fund for 2015-17 –First funding round closed May 29 th –33 applications requesting $52.4 million –Expectation is that there will be no further funding rounds until additional $5 million becomes available in 2016 –15 of 33 applications located in Oil and Gas Producing counties 7

8. HIF III Pending Applications Projects located in Oil and Gas Producing Counties –1 in Beulah (24 units) –4 in Dickinson (138 units of which 72 are retirement of debt to convert to affordable) –1 in Hazen (22 units) –1 in Killdeer (4 units) –4 in Minot (145 units) –1 in Ray (47 units) –1 in Williston (186 units) –2 in Watford City (97 units) 8

9. HIF III Process Decisions on approved projects anticipated around July 1 st – score driven selections Awards will be majority credits-partial cash –85.7% credits –14.3% cash Successful applicants will be responsible, with NDHFA assistance, for soliciting contributions into the HIF III for their projects –NDHFA can begin accepting contributions into the fund on July 1 st 9

10. Challenges for Housing Housing costs for consumers still are unaffordable for many Higher land, labor and material costs forcing the end price up for consumers Inadequate infrastructure is inhibiting housing development Creation of affordable housing requires subsidy 6

11. Challenges for Housing Average cost per unit of HIF III applications exceeded $182,000 Developer paid infrastructure and higher land costs increasing the final cost of a new single family –Often times said to cost $70-100,000 for a lot before any construction starts Creation of truly affordable housing most often requires local as well as state financial support –Donation or reduced cost of land –Site infrastructure assistance Smaller lot size, narrower streets, various city imposed fees –Reduction in property taxes 11

12. 12 For More Information General Information on Agency Programs: www.ndhfa.org Jolene Kline, Executive Director jkline@nd.gov 701/328-8072 Jennifer Henderson, Director of Planning and Housing Development jhenderson@nd.gov 701/328-8085