MCHENRY COUNTY HOUSING COMMISSION AGENDA JANUARY 21, Public Meeting P & D Conference Room 8:30 AM. 667 Ware Rd, Woodstock, IL 60098

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1 MCHENRY COUNTY HOUSING COMMISSION AGENDA JANUARY 21, 2014 Public Meeting P & D Conference Room 8:30 AM 667 Ware Rd, Woodstock, IL CALL TO ORDER Roll Call 2. MINUTES APPROVAL Housing Commission - Public Meeting - Dec 17, :30 AM 3. PUBLIC PARTICIPATION 4. COMMITTEE REPORTS A. Executive Committee - None B. Education Committee - None 5. OLD BUSINESS 5.1 Update Status of HOME projects/conflicts of interest 6. NEW BUSINESS 6.1 Consolidated Plan Objectives - Discussion 6.2 Review McHenry County Homebuyer Policy - Adopting 7. MEMBERS' COMMENTS AND ANNOUNCEMENTS 8. ADJOURNMENT McHenry County Page 1 Updated 1/17/ :35 AM

2 MCHENRY COUNTY HOUSING COMMISSION MINUTES DECEMBER 17, 2013 Public Meeting County Board Conference Room 8:30 AM 667 Ware Rd, Administration Building, Woodstock, IL CALL TO ORDER Vice Chairman Kociecki called the meeting to order at 8:39 and requested roll call. PRESENT: Draffkorn, Henry (8:40 AM), Kociecki, Kaufmann, Wimmer, Reeks, Peterson ABSENT: Peschke, Weltch Staff Present: Mr. Jeffrey Harris, Ms. Kim Ulbrich & Ms. Lynnsey Osborne. Other's Present: Mr. Jerry Monica - Habitat for Humanity, Ms. Cynthia Macleod - Housing Opportunity Development, Mr. Alan Belcher & Ms. Barb Szul - TLS Veterans, Mr. Chip Eldredge - MCAHC, Mr. Chris Hooker - Banner, Ms. Julie Biel-Claussen & Mr. Mike Isitoro - Housing Authority, Ms. Elizabeth Demes & Ms. Sarah Beck - The Alden Foundation. 2. MINUTES APPROVAL Housing Commission - Public Meeting - Sep 17, :30 AM RESULT: MOVER: SECONDER: AYES: ABSENT: 3. PUBLIC PARTICIPATION - NONE 4. COMMITTEE REPORTS - NONE 5. NEW BUSINESS ACCEPTED [UNANIMOUS] Sue Draffkorn Catherine Peterson Draffkorn, Henry, Kociecki, Kaufmann, Wimmer, Reeks, Peterson Peschke, Weltch A. HOME PY Applicant Hearings Ms. Ulbrich noted that the agenda printed out of order and apologized for the inconvenience. Since representatives for the Housing Authority had not yet arrived to the meeting, the presentations were shifted around to keep the meeting running. Minutes Acceptance: Minutes of Dec 17, :30 AM (Minutes Approval) i. Habitat for Humanity of McHenry County, Rehab, Property Acquisition Mr. Jerry Monica gave his presentation to the Commission about his proposed project of rehab and property acquisition. He explained his program, how it works and the impact they have on the Community. Commissioner Draffkorn asked what direction Habitat was going in this year to which Mr. Monica responded that it would be 100% rehabilitation. Mr. Monica said his organization is taking the direction of the County and the Board to stop building new houses and work on rehabilitation of homes and this will actually expand their capacity by five times. He said their goal is to rehab ten (10) houses in 2014, where normally they are only building two (2) new houses a year. Mr. Monica was also asked to address his staffing and the ability to complete the projects. Mr. Monica talked about obtaining approval from his board to hire a full-time family McHenry County Page 1 Updated 1/17/2014 9:32 AM Packet Pg. 2

3 Minutes Housing Commission December 17, 2013 services coordinator who will be responsible for marketing and outreach of these projects and that they hired a second construction manager. Mr. Monica said they have not had another problems getting construction volunteers and currently has six corporations that are willing to help them out. ii. Bull Valley Ridge, LLC, Bull Valley Ridge Mr. Chris Hooker gave a short power point presentation about his application, Bull Valley Ridge, LLC/ Banner Apartments for new construction of 66 units of affordable workforce and supportive housing. The presentation explained the scope of the work and the financing behind the project. Mr. Hooker stressed that the HOME money would be used for leveraging. Mr. Hooker also explained the deadline he had to work on between the HOME applications and the IHDA applications and how he was working with Ms. Ulbrich to make these time constraints work since he was looking at multiple sites for his IHDA submission. Mr. Hooker said he followed Ms. Ulbrich's instructions of submitting the Bull Valley Ridge application and then include a list of alternate sites at the end. Mr. Hooker said he just found out that won't work now and you can not consider the Spring Grove project during this hearing but he said he will run through both projects so the Commission can decide what they would like to do. Commissioner Draffkorn asked if the Bull Valley Ridge project was off the table, to which Mr. Hooker responded no. Mr. Hooker explained both projects. Vice Chairman Kocieki asked Mr. Hooker what he was wanting this Commission to consider. Mr Hooker said he would like to get letters from the County that would say that the funds would either go to Spring Grove or Bull Valley Ridge contingent on the tax credit award from IHDA. Staff reminded the Commission that the Bull Valley Ridge is the only project they can consider without reopening the funding round to everyone. Mr. Harris said if you decide that none of the projects you hear today are worthy of funding than you can could choose to reopen the funding and have new applications received. Commissioner Henry asked if the Spring Grove project is something you could come back with next year. Mr. Hooker said he did not know because it's all dependant on IHDA, if the property is still available and funding. He said his concern is that this project actually works and he doesn't get the money to get it built because he wasn't able to make this application process. iii. Housing Opportunity Development Corporation/TLS, Brett's Place Mr. Alan Belcher from Transitional Living Services (TLS) made introduced himself and the other individuals he brought with him. Which were Reverend Laurie from St. Paul's Episcopal Church (partnership with the land), Ms. Cynthia Macleod (developer) from Housing Opportunity Development and Barb Szul from TLS. Mr. Belcher next showed the Commission a short video that introduced his agency, what they are about and the difficulties Veteran's encounter when they return home from war. After the video Mr. Belcher explained his project and the need for it. He told the Commission that he has strong support from the city of McHenry and how the mayor advocated for this project. Mr. Belcher said they have site control, zoning and it annexed into the city of McHenry. Reverend Laurie described to the Commissioner the partnership the church will have with TLS, the background of the property and how the project, Bett's Place was developed. Mr. Belcher next did a power point presentation that provide pictures, details and the need for the development of Bett's Place. Ms. Cynthia Macleod informed the Commission that they did submit an application yesterday to IHDA. She also informed the Commission that her organization currently has 18 different properties of their own with over 250 units that they have developed, so they have experience. Minutes Acceptance: Minutes of Dec 17, :30 AM (Minutes Approval) Ms. Ulbrich told the Commission that Housing Opportunity Development is the County's second CHDO and she explained the work that the organization has done in the County along with Lake County. Vice Chairman Kociecki asked Staff to explain their recommendation to which Ms. McHenry County Page 2 Updated 1/17/2014 9:32 AM Packet Pg. 3

4 Minutes Housing Commission December 17, 2013 Ulbrich explained the pro forma does not sustain the 20 years of affordability. She said the project only gets to around year eleven but did caution the Commission that the numbers are always a moving target until everything gets completed. Ms. Ulbrich said that we have rules that we must follow and HUD will look at that pro forma and if it's going in the red before year twenty (20) we will have a problem. She said we have to somehow make that work. Ms. Macleod said told the Commission that this is the very first step and showing Community support is very important to IHDA, and it's the most important thing for them is the Community support. Mr. Belcher stated other commitments they have received financially for the project. He said there is also a major foundation that advised them that once they get some more skin in the game that they would consider 500, towards the project. Mr. Belcher requested that the Commission would consider their project for some of the HOME funds so they can show that they have community support. Commissioner Kaufmann asked if all 24 units were one bedroom. Mr. Belcher said yes. Ms. Macleod again stressed how important it was to received Community support of this project to help with IHDA application. Commissioner Kaufmann asked if they needed the full amount. Ms. Macleod said no they do not need the full amount again your support is most important, but the minimum amount would be around $100, iv. The Alden Foundation, Huntley Horizon Senior Living Community Ms. Elizabeth Demes and Ms. Sarah Beck from the Alden Foundation explained to the Commission about their project which is the Huntley Horizon Senior Living Community. They are requesting $200, for new construction of a senior living community located at NWC of Regency Parkway and Princeton Avenue in Huntley. The project is for 90 units of affordable independent living for seniors age 62 and older. Ms. Demes also gave the Commission a brief background on her agency and other projects they have completed. They detailed the project and explained the buildings, it's amenities, the location, and the financing of the project. She also noted that there would not be any assisted living services provided to the seniors, meaning the seniors will need to be able to cook and care for themselves. Vice Chairman Kociecki asked if they had site control and Ms. Demes responded yes. She said they have a contract that offers them options to extend. Ms. Demes also told the Commission that they will be part of the Continuum of Care and explained that adjacent to this site the Alden Foundation will be developing a skilled nursing/rehab center and a memory care facility. She also explained the income level structures of the units and how many units at each level they will be providing. Ms. Demes also noted that the HOME funds would leverage nearly 20 million dollars in additional financing. Commissioner Kaufmann asked for the name of the construction group again and if it was owned by the Alden Group. Ms. Demes said yes it's the Alden Bennett Construction that is located in Chicago. Mr. Harris reminded the Commission that since this project is in Kane County, as long as we can document that the people being served in the McHenry County units are McHenry County citizens we would have no problems. Ms. Ulbrich said that the Alden Group said they would have no problem providing documentation for that since it is a low amount of units. Minutes Acceptance: Minutes of Dec 17, :30 AM (Minutes Approval) Vice Chairman Kociecki asked Staff to explain their recommendation on the project to which Ms. Ulbrich did. She also noted that the project does go out it twenty years of affordable. v. McHenry County Housing Authroity, Owner Occupied Rehab Program Ms. Julie Biel-Claussen first apologized for being late and next introduced herself and Mike Isitoro to the Commission. She explained Mike's position with the Housing Authority and what his responsibilities are within the organization. Ms. Biel-Claussen stated that while there is a preference for rental assistance for this funding there is also a high demand in the County for McHenry County Page 3 Updated 1/17/2014 9:32 AM Packet Pg. 4

5 Minutes Housing Commission December 17, 2013 owner occupied rehab. She said that her agency used to have a waiting list that contained over 270 homes waiting to have their homes rehabilitated, but HUD advised them to eliminate that waiting list. Ms. Biel-Claussen told the Commission that they still had 2012 HOME funds they will be receiving from the County once a contract is drawn up and that they anticipate being able to rehab 10 homes. Ms. Biel-Claussen said one of the concerns from Staff was if her organization could handle this project and she was confindent that they could. She even noted how many homes they have completed in the last calendar using CDBG funding. They next presented pictures and descriptions of some of the homes they have rehabilitated. Ms. Biel-Claussen also noted that HUD suggested that they try to make more of an impact in one area instead of traveling around the county from one site to another, so they last year they focused on Wonder Lake because of it's need of what used to be on their waiting list. Ms. Ulbrich said another change to the 2012 funding was it was changed from a grant to a mortgage which is why they do not have their contract yet. Mr. Isitoro wanted to let the Commission know that these funds are their only source of funds for this program. Commissioner Kaufmann asked about their workforce. Mr. Isitoro stated that everything goes out to bid. Ms. Ulbrich said all the homes must have equity in them to be considered. Vice Chairman Kociecki said to Ms. Biel-Claussen that he saw where Staff was concerned that they would be able to spend the money quickly enough, but you said you feel this wouldn't be an issue. Ms Claussen said yes she didn't think it would be an issue. Commissioner Kaufmann asked if they needed the full amount or could they take less and if less what is that minimum amount. Ms. Biel- Claussen said yes they could take less and probably around $100, B. HOME PY Allocations-Discussion, Action Motion by Commissioner Henry seconded by Commissioner Kaufmann to take a five (5) minute break at 10:29 a.m. before the commission started their discussions. All member's present voted aye and a five minute break was taken. The meeting resumed at 10:38 a.m. and Vice-Chairman Kociecki asked Staff to explain the voting options available to the Commission. Ms. Ulbrich explained the recommendations and the scores that each application received from Staff. The Commission next discussed the projects and then their ranking. The Commission asked Staff what would need to be done if they wanted the opportunity to fund Banner's Spring Grove project instead of the Bull Valley Ridge project. Mr. Harris said that since Staff did not receive an application for the Spring Grove project and in order to have an equal process, Staff would have to reopen the funding round. Mr. Harris said if it is the Commission's decision that they would like to consider the Spring Grove project, than he would advise the Commission to reopen the funding round so that Banner and anyone else that is out there could make a new application, so the process is fair for everyone. Minutes Acceptance: Minutes of Dec 17, :30 AM (Minutes Approval) Mr. Chris Hooker's asked for permission to address the Commission. Vice-Chairman Kociecki granted him permission to speak. Mr. Hooker's requested that in the future when dealing with tax credits the main questions this commission should ask is what is your projected IHDA score. Mr. Hooker's said his two projects would have scored 10 to 15 points higher than the other two projects heard today. Commissioner Henry said this is why everything has to come in equal and at the same time and not throw an additional project in after all projects were reviewed. Vice-Chairman Kociecki thought that maybe the Commission should reopen the funding round so the Spring Grove project can be submitted and officially in front of us for a decision. Commissioner Peterson questioned whether the Commission thought the Spring Grove Project was a better project. To which Commissioner Kaufmann said she did not. Commissioner Peterson said while she thought McHenry County Page 4 Updated 1/17/2014 9:32 AM Packet Pg. 5

6 Minutes Housing Commission December 17, 2013 the Spring Grove Banner project was a good and well needed project, she felt it was not time sensitive and that Banner could come back next year with this project. She felt that this group and Staff put in a lot of work to get the applications reviewed and presented and to reopen this round would be a lot of unnecessary work. Ms. Peterson said we have worthy projects in front of us and she would be opposed to reopening this funding round for submittal's of new applications. The Commission agreed and continued their discussion on which projects to fund. Ms. Ulbrich explained to the Commission what had happened with Banner's and where the miscommunication had occurred. Ms. Ulbrich reminded the Commission that truthfully TLS isn't ready yet either because their pro forma does not work. Ms. Ulbrich said the Commission has the ability to fund any project they desire and they can also put contingency on receiving the HOME funds just as they had done with last years funding. Commissioner Henry asked for clarification on the CHDO funds and when Staff was recommending less than the full amount. Ms. Ulbrich explained Staff's recommendation. 1. Motion: fund Habitat for Humanity in the amount of $77, with 2012 CHDO funds Motion by Commissioner Kaufmann seconded by Commissioner Reeks to give $77, of the CHDO funds to Habitat for Humanity for the rehabilitation of 1912 Lakewood Avenue in McHenry and a Homebuyer assistance amount to be determined. On a roll call vote all member's present voted aye. Motion passed. RESULT: MOVER: SECONDER: AYES: ABSENT: PASSED [UNANIMOUS] Alex C Wimmer Angie Reeks Draffkorn, Henry, Kociecki, Kaufmann, Wimmer, Reeks, Peterson Peschke, Weltch 2. Motion: fund Bull Valley Ridge, LLC project for $300, for General Project Funding - Rental Units Motion by Commissioner Draffkorn seconded by Commissioner Wimmer to fund Bull Valley Ridge, LLC project for $300, for General Project Funding/Rental Units contingent on upon Staff s recommendations of permanent sources of financing, zoning and underwriting pro forma compliant with the 2013 HOME Rule regulations. The Commission discussed this motion and Commissioner Kaufmann stated that she would like the Commission to consider also funding the TLS Veteran's project Bett's Place in the amount of $100, which would also be contingent obtaining their other funding sources. Vice Chairman Kociecki voiced his concern about their financing and how it currently doesn't get past year 11. Ms. Ulbrich reminded the Commission that you could put contingency on the project meaning they would receive our funds until all other funding is secured. Commissioner Draffkorn and Commissioner Wimmer withdrew their motion. RESULT: WITHDRAWN Minutes Acceptance: Minutes of Dec 17, :30 AM (Minutes Approval) 3. Motion: fund Bull Valley Ridge, LLC/Banner Apartments Bravo Properties, L.L.C. $232, Motion by Commissioner Kociecki seconded by Commissioner Kaufmann to award $232, to Bull Valley Ridge, LLC/Banner Apartments Bravo Properties, L.L.C. contingent upon Staff s recommendations of permanent sources of financing, zoning and underwriting proforma compliant with the 2013 HOME Rule regulations with a deadline of August 1, On a roll call vote all member s present voted aye. Motion passed. McHenry County Page 5 Updated 1/17/2014 9:32 AM Packet Pg. 6

7 Minutes Housing Commission December 17, 2013 RESULT: MOVER: SECONDER: AYES: ABSENT: PASSED [UNANIMOUS] Robert Kociecki, Vice-Chair Jacqueline Kaufmann Draffkorn, Henry, Kociecki, Kaufmann, Wimmer, Reeks, Peterson Peschke, Weltch 4. Motion: fund Housing Opportunity Development Corporation / Transitional Living Services $100, Motion by Commissioner Kaufmann seconded by Commissioner Reeks that Housing Opportunity Development Corporation / Transitional Living Services receive $100, contingent upon Staff s recommendations of permanent sources of financing, zoning and underwriting pro forma compliant with the 2013 HOME Rule regulations with a deadline of August 1, On a roll call vote all member s present voted aye. Motion passed. RESULT: MOVER: SECONDER: AYES: ABSENT: 6. MEMBERS' COMMENTS AND ANNOUNCEMENTS PASSED [UNANIMOUS] Jacqueline Kaufmann Angie Reeks Draffkorn, Henry, Kociecki, Kaufmann, Wimmer, Reeks, Peterson Peschke, Weltch Ms. Ulbrich informed the Commission that Staff is currently working on the consolidated plan and that they have hired a consultant to help. She said that this is where the Commissions can take control of what they want to do, so instead of having developers and non-profits come to you and ask for money you can say this is what the county needs and this is what we want to do. Ms. Ulbrich requested the Commission to be prepared to have a discussion about this at the next meeting. 7. ADJOURNMENT Motion by Commission Henry seconded by Commissioner Kaufmann to adjourn the meeting. All member present voted aye and the meeting adjourned at 11:21 a.m. Minutes Acceptance: Minutes of Dec 17, :30 AM (Minutes Approval) McHenry County Page 6 Updated 1/17/2014 9:32 AM Packet Pg. 7

8 Department of Planning and Development McHenry County Government Center - Administration Building 2200 North Seminary Avenue Woodstock, Illinois Fax MEMORANDUM To: Mary Anne Weltch, Chairwoman and members of the Housing Commission From: Kim Ulbrich, Planning and Development Department Community Development Specialist Date: January 21 st, 2014 Re: Consolidated Plan Action Requested: Please provide comments and suggestions for the Consolidated Plan particularly areas that are relevant to the HOME program and Housing Commission. Background: The County expects to publish a summary of its proposed Five-Year Consolidated Plan for and Annual Action Plan for 2015 on or about May 1, A copy of these documents will be placed on public display for a thirty-day review period beginning on or about July 1, A second public hearing will be duly advertised and conducted to present the proposed plan to the public. The County will consider comments on the proposed plan prior to adoption by the McHenry County Board of Commissioners in October, Proper notice of the display date and subsequent public hearing will be properly advertised. The County intends to submit its Five-Year Consolidated Plan and Annual Action Plan to HUD on or before November 15, Each year HUD grantees are required to submit an Annual Action Plan to request funds for formula programs which include; CDBG, HOME, ESG and HOPWA. The Department recognizes that the Annual Action Plan is an important tool which addresses how communities plan to utilize the resources made available from HUD, as well as leveraged funds obtained through other resources. The Plan will be released for public comment on September 4. The development of the plan allows citizens an opportunity to discuss available resources and to propose uses as well as provides a document from which HUD gains a better understanding of the communities needs and a way to assess compliance. This plan will be approved by P & D and the County Board. It must be submitted to HUD on November 15 th, 2014 Packet Pg. 8

9 Discussion: Review and discuss any changes to the proposed goals for the Consolidated Plan. Action Requested: NONE Packet Pg. 9

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34 Department of Planning and Development McHenry County Government Center - Administration Building 2200 North Seminary Avenue Woodstock, Illinois Fax McHenry County HOME Underwriting Standards for Homebuyer Programs Adopted: January 21, Background and Applicability. In accordance with HOME regulation at 24 CFR (a)(3) and (f) McHenry County has created a Homebuyer Policy to establish underwriting standards for homeownership, lending and refinancing and subordination. This policy supersedes any policy, program provision, or program directive previously issued as related to the HOME program specific to homebuyer programming and will be enforces as it relates to application made for the HOME program. McHenry County will utilize market-rate based guidelines (sourcing from FHA standards and local real estate lending practices) to establish homebuyer underwriting parameters. Said parameters are applicable to all direct homebuyer assistance (collectively known as down-payment assistance, closing costs assistance, and discount to sales price) for any HOME assistance to homebuyers. Any provider or developer utilizing HOME funds to assist a homebuyer must comply with the criteria in the McHenry County Policy. 2. Housing Type and Ownership. Housing that is for acquisition by a family must be single family housing held in fee simple title. The land may be owned in fee simple or the homeowner may have a 99-year ground lease. For manufactured housing, the ground lease must be a for a period at least equal to the applicable period of compliance/ affordability set forth in Paragraph 6 below. Single family housing means a one-to fourfamily residence, condominium unit, cooperative unit, combination of manufactured housing and lot, or manufactured housing lot. Single family rehabilitation refers to the type of ownership of the housing unit, not the design of the housing unit. A manufactured home dwelling unit may not have wheels, must be affixed to the ground, and may not be licensed as a vehicle under Illinois law. Communication: 6.2 Review McHenry County Homebuyer Policy - Adopting (New Business) 3. Housing Value. The housing must be modest as follows: Acquisition of newly constructed housing or pre-existing housing: The housing purchase price may not exceed 95 percent of the median purchase price for the 1 Packet Pg. 34

35 type of housing for the area as determined and published by the U.S. Department of Housing and Urban Development (HUD) from time to time. McHenry County also reserves the right to determine the 95 percent limit following HUD approved methodology, with such newly determined limit to be approved by HUD. Acquisition with Rehabilitation: The housing has an estimated after rehabilitation value not to exceed 95 percent of the median purchase price for the area as determined and published by HUD from time to time, calculated in accordance with the McHenry County Underwriting Standards for Rehabilitation Programs in effect at the time of acquisition. McHenry County also reserves the right to determine the 95 percent limit following HUD approved methodology, with such newly determined limit to be approved by HUD. 4. Location of Real Property. McHenry County may undertake homebuyer activities within the boundaries of McHenry County s HOME jurisdiction. However, this HOME/CDBG jurisdiction may change during HUD s urban county requalification process, which occurs every three years. 5. Income Qualification of Household. The housing must be acquired by a homebuyer whose family qualifies as a low-income family. In determining the income eligibility of the family, the participating jurisdiction must include the income of all persons living in the housing. Low income households are defined as those with incomes that do not exceed 80% of median family income (MFI) for the Chicago metropolitan area as determined by the Department of Housing and Urban Development. Some programs subject to these underwriting standards may have more restrictive income requirements but will not have a less restrictive requirement. The standard income qualification method for the HOME program is the HUD Part 5 definition unless otherwise stated in the McHenry County Consolidated or Action Plans. 6. Occupancy. The housing must be the principal residence of the family throughout the following periods of compliance/affordability: Housing for a homebuyer activity assisted with CDBG funds: five years. Housing for a homebuyer activity assisted with HOME funds: Under $15,000 5 years; $15,000 to $40, years; over $40, years. Dependent upon the type of project, McHenry County will require either that the housing be re-sold to an income qualified household or that the assistance given to the homebuyer (or a pro-rated portion thereof) be recaptured. A determination of whether to use resale or recapture for each particular program or project will be will be carried out by the placing of deed restrictions, mortgages and/or recapture agreements. Communication: 6.2 Review McHenry County Homebuyer Policy - Adopting (New Business) 2 Packet Pg. 35

36 7. Counseling. All homebuyers must receive counseling and submit evidence of completed counseling to McHenry County prior to home closing. 8. Financial Underwriting of Homebuyer. McHenry County will adopt the following underwriting parameters to ensure that no household receiving direct assistance is under or over subsidized Criteria Housing Debt and Overall Debt Appropriateness of Amount of Assistance Monthly Expenses of Family Homebuyer Program Program parameters must conform to the ratio policies contained in the McHenry County Homebuyer policy. In accordance with above stated ratio policy, subsidy will not be given that allows a homebuyer to have a total housing expense to income ratio less than 25%. Cannot exceed 41% of income. Housing ratio cannot exceed 35% (or go lower than 25% per above policy). Budgeting is part of the homeownership counseling process. Potential clients will be required to sign an Authority for release of information form to allow budget, bank information, employment income, housing counselor recommendations to be evaluated. McHenry Habitat Programs McHenry County Habitat for Humanity (Habitat) has written program guidelines to ensure that the housing is affordable to the homebuyer. These guidelines will be written into any project agreement. McHenry County Habitat for Humanity (Habitat) has written program guidelines to ensure that the housing is affordable to the homebuyer but also ensuring that the homebuyer is not being oversubsidized. These guidelines will be written into any project agreement. McHenry County Habitat for Humanity (Habitat) has written program guidelines to ensure that the housing is affordable to the homebuyer but also ensuring that the homebuyer is not being oversubsidized. These guidelines will be written into any project agreement. Budgeting is part of the homeownership counseling process. Potential clients will be required to sign an Authority for release of information form to allow budget, bank information, employment income, housing counselor recommendations to be evaluated. Rehab/Resale Programs Program parameters must conform to the ratio policies contained in the McHenry County Homebuyer policy In accordance with above stated ratio policy, subsidy will not be given that allows a homebuyer to have total housing expenses to income ratio less than 25%. Cannot exceed 41% of income. Housing ratio cannot exceed 35% (or go lower than 25% per above policy). Budgeting is part of the homeownership counseling process. Potential clients will be required to sign an Authority for release of information form to allow budget, bank information, employment income, housing counselor recommendations to be evaluated. Communication: 6.2 Review McHenry County Homebuyer Policy - Adopting (New Business) 3 Packet Pg. 36

37 Assets Available for the Acquisition Financial Resources to Sustain Homeownership Responsible Lending A 5% down payment is required. Homebuyer must have at least 1% or $1,000, whichever is greater, of their own funds invested in the transaction. Borrowers liquid assets after closing may not exceed 100% of AMI for household size. Gift limit of $10,000. Borrowers must have one month PITI in reserve within 60 days prior to closing. Must choose a 30-year fixedrate FHA or conventional mortgage. The interest rate (with no points) cannot be more than two percentage points above the 30-year fixed rate for the Illinois In accordance with Habitat policies. Borrowers must have one month PITI in reserve within 60 days prior to closing In accordance with Habitat policies; Habitat originates and services its own 0% interest loans. Homebuyer s liquid assets after closing excluding college and retirement funds and special needs trust may not exceed 100% of AMI for household size. Homebuyer may use any combination of primary mortgage financing, personal funds, and/or gift funds ( limit of $10,000) to acquire the housing, but must require McHenry County assistance of at least $1,000 or they may not purchase the housing. Borrowers must have one month PITI in reserve within 60 days prior to closing. If utilizing other mortgage financing, must choose a fixed rate FHA or conventional mortgage. If the lender is not on the list of lenders for the 9. Subordination of McHenry County Mortgages due to Refinancing of Primary Loans. McHenry County s provisions are summarized as follows: Should the mortgagor under a McHenry County mortgage desire to refinance a mortgage which is superior to the McHenry County mortgage, McHenry County will subordinate its mortgage, as follows: homeowner may not take cash out; homeowner may roll into the new first mortgage only reasonable and customary closing costs associated with the refinancing (this does NOT include points paid to buy down the interest rate); the new first mortgage principal balance cannot exceed the original first mortgage principal; the new first mortgage must be a fixed rate loan (15 year permissible on a case by case basis, dependent on capacity to make payments); balloon mortgages are not permissible; if the prior mortgage required escrowing of taxes and insurance, the new mortgage shall also have this requirement. 10. Appeal. Should any loan or subordination be denied under the foregoing underwriting criteria, an appeal may be made to the McHenry County Housing Commission having jurisdiction over the grant funds employed to make the loan. An Applicant may request a review of eligibility by McHenry County Housing Commission Policy appeals may be made by calling the CD Division and asking to be put on the agenda for the next appropriate committee meeting. Applicant must also submit a letter to the CD Division at least 10 days prior to the committee meeting which outlines the request for appeal and basis for the request. If the appeals letter is not received by the CD Division at least ten days prior to the committee meeting, the appeal will be delayed until the next meeting of the appropriate committee. Notwithstanding the foregoing, appeals may not be made Communication: 6.2 Review McHenry County Homebuyer Policy - Adopting (New Business) 4 Packet Pg. 37

38 over items that are regulatory, such as: location of property, value of property, income qualification of household, requirement for counseling, occupancy requirement, and financial underwriting of homebuyer. Communication: 6.2 Review McHenry County Homebuyer Policy - Adopting (New Business) 5 Packet Pg. 38