Louisiana Housing Corporation - Market Study and Analysis Insights

LOUISIANA HOUSING CORPORATION Housing Production Department www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Homeownership Development Initial Considerations Market Primary Question is Does a Market Exist for your project? Is there a market at all. In your target area. Amenities Disadvantages Market Study Pros : Timely, Profession, Reliable, Independent Cons : Costly Alternative Market Analysis Pros: Cheep, Sized for Your Project Cons: May take longer, Not as reliable, Information may be difficult to obtain www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Alternative Market Study Requirements 1. Number of prospective low income (80% of AMI and less) current rental households in the Market Area; 2. Household size of eligible prospective buyers; 3. Income Required of prospective buyers; 4. Average amount of direct homebuyer assistance required (if any) of prospective buyers; 5. Number of comparable units sold over the last year; 6. Sale price of comparable units sold in the last year; 7. Size of comparable units sold in the last year; 8. Square foot cost of comparable units sold in the last year; 9. Listing date of comparable units sold in the last year; 10. Sale date of comparable units sold in the last year; 11. Time on market (Average, Maximum, Minimum) www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation 12. Absorption Rate

American Community Survey American Community Survey can be accessed by at this link: https://www.census.gov/acs/www/data/data-tables-and-tools/data-profiles/2015/ www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Alternative Market Analysis Existing Market Data INCOME AND BENEFITS (IN 2015 INFLATION- ADJUSTED DOLLARS) How to Determine Eligible Households in Fractional HUD Median Household Income $33,600 Total households 4,672 4,672 Less than $10,000 1,135 24.3% How to Determine population of Eligible households.: Census Range 34,999 25,000 = 9,999 (Largest Income in range Lowest income in rage) $10,000 to $14,999 531 11.4% $15,000 to $24,999 850 18.2% $25,000 to $34,999 618 13.2% HUD Median Income Percentage Within Range.: 33,600 25,000 = 8,600/9999 = 86% (HUD Median Income Lowest Income in rage divided by the Census rage). $35,000 to $49,999 551 11.8% $50,000 to $74,999 419 9.0% $75,000 to $99,999 216 4.6% $100,000 to $149,999 293 6.3% 618 X 0.86 = 531 Population in Census Rage X HUD Percentage within rage. $150,000 to $199,999 53 1.1% $200,000 or more 6 0.1% Median household income (dollars) 531+850+531+1,135 = 3,047. This is all the households below the HUD Median 4-person household 80% limit. 23,315 HUD Median Household Income (4 Person) 33.600 www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Alternative Market Analysis Existing Market Data (Cont.) VALUE Estimate Percent SELECTED MONTHLY OWNER COSTS (SMOC) Estimate Percent Owner-occupied units 2,710 2,710 Housing units with a mortgage Less than $50,000 929 34.3% 1,058 1,058 $50,000 to $99,999 1,069 39.4% Less than $500 29 2.7% $100,000 to $149,999 375 13.8% $500 to $999 638 60.3% $1,000 to $1,499 307 29.0% $150,000 to $199,999 156 5.8% $1,500 to $1,999 64 6.0% $200,000 to $299,999 102 3.8% $2,000 to $2,499 20 1.9% $300,000 to $499,999 53 2.0% $2,500 to $2,999 0 0.0% $500,000 to $999,999 8 0.3% $3,000 or more 0 0.0% $1,000,000 or more 18 0.7% Median (dollars) 916 (X Median (dollars) 65,900 (X) www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Alternative Market Analysis Existing Market Data (Cont.) GROSS RENT AS A PERCENTAGE OF HOUSEHOLD INCOME (GRAPI) GROSS RENT Estimate Percent Estimate Percent Occupied units paying rent 1,695 1,695 Occupied units paying rent (excluding units where GRAPI cannot be computed) 1,633 1,633 Less than $500 748 44.1% $500 to $999 895 52.8% Less than 15.0 percent 227 13.9% $1,000 to $1,499 52 3.1% 15.0 to 19.9 percent 123 7.5% $1,500 to $1,999 0 0.0% 20.0 to 24.9 percent 63 3.9% $2,000 to $2,499 0 0.0% 25.0 to 29.9 percent 195 11.9% $2,500 to $2,999 0 0.0% 30.0 to 34.9 percent 138 8.5% $3,000 or more 0 0.0% Median (dollars) 565 (X) 35.0 percent or more 887 54.3% www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Income Table Alexandria, LA MSA 1 Person 2 Person 3 Person 4 Person 5 Person 6 Person 7 Person 8 Person 30% LIMITS 11650 13300 14950 16600 17950 19300 20600 21950 VERY LOW INCOME 19400 22200 24950 27700 29950 32150 34350 36600 60% LIMITS 23280 26640 29940 33240 35940 38580 41220 43920 LOW INCOME 31050 35450 39900 44300 47850 51400 54950 58500 Complete Income and Value Tables Can Be Found at: https://www.lhc.la.gov/page/home www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

SOURCES OF MARKET INFORMATION Local Real Estate Profession (Agent/Realtor) Using MLS Sold Listing Report Or Trulia https://www.trulia.com/ And Zillow https://www.zillow.com/ www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

SAMPLE ALTERNATIVE MARKET ANALYSIS TABLE Address Size Price Square Foot Cost Time on Market (Days) In Square Feet 1205 Front St, Bogalusa, LA 70427 1,668 40,000 23.98 446 1028 Front St, Bogalusa, LA 70427 799 10,000 12.52 534 1709 Charlevoix St, Bogalusa, LA 70427 1,375 21,500 16.64 236 1904 Charlevoix St, Bogalusa, LA 70427 1,622 28,000 17.26 419 1115 Young Brothers Rd, Bogalusa, LA 70427 1,082 6,000 5.55 877 AVERAGES 1309 21.104 16.12 502, 877, 236 Subject 1410 (132,540)* 22,730 94.00 www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Absorption Rate ABSORPTION RATE - Is the rate at which homes are selling in a specific area. There are 3 pieces of information you will need to find absorption rate: 1.The specific time frame 2.The number of sold homes during that time frame 3.The number of active homes right now www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Absorption Rate Calculation THE DATA: Bogalusa Time Frame =365 days (total days from twelve month period) Number of Sold Homes =95 (for 12 month period) Number of Active Homes =77 (All Current Listed Homes; Remove 12 month qualifier) Remove any Land/Lots only from you active figure. (36 for example) True Active Homes For Sale 41 CALCULATIONS: Rate of Home Sales 3.8421 - 1 home is sold every 3.8421 days. This number is found by taking 365/95 (Time Frame/Number of Sold Homes) Absorption Rate =157.53 Days (5.25 Months). Found by taking 41 x 3.8421(Number of Active Homes x Rate of Home Sales) www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Importance of the Absorption Rate Calculation According to Realtor.com a balanced market's absorption rate is typically between 5 - 7 months. The HOME Regulations require that: family qualifies as a low-income family, and the housing must be the principal residence of the family throughout the period described in paragraph (a)(4) of this section. If there is no ratified sales contract with an eligible homebuyer for the housing within 9 months of the date of completion of construction or rehabilitation, the housing must be rented to an eligible tenant in accordance with 92.252. The housing must be acquired by a homebuyer whose Pay close attention to your Absorption Rate. www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Value Limits HOME and Housing Trust Fund Homeownership Sales Price Limits - FY 2018 (Data through June 2017; New limits posted March 2018) Existing Homes HOME/HTF Purchase Price Limit New Homes HOME/HTF Purchase Price Limit State County Name Metropolitan/FMR Area Name 1-Unit 2-unit 3-unit 4-unit 1-Unit 2-unit 3-unit 4-unit LA Grant Parish Alexandria, LA MSA $166,000 $213,000 $258,000 $319,000 $228,000 $292,000 $353,000 $438,000 LA Rapides Parish Alexandria, LA MSA $166,000 $213,000 $258,000 $319,000 $228,000 $292,000 $353,000 $438,000 Baton Rouge, LA HUD Metro FMR Area LA Ascension Parish $191,000 $244,000 $296,000 $367,000 $228,000 $292,000 $353,000 $438,000 Baton Rouge, LA HUD Metro FMR Area LA East Baton Rouge Parish $184,000 $236,000 $286,000 $354,000 $228,000 $292,000 $353,000 $438,000 Baton Rouge, LA HUD Metro FMR Area LA East Feliciana Parish $182,000 $233,000 $282,000 $349,000 $228,000 $292,000 $353,000 $438,000 Baton Rouge, LA HUD Metro FMR Area LA Livingston Parish $182,000 $233,000 $282,000 $349,000 $228,000 $292,000 $353,000 $438,000 Baton Rouge, LA HUD Metro FMR Area LA Pointe Coupee Parish $190,000 $243,000 $295,000 $365,000 $228,000 $292,000 $353,000 $438,000 Baton Rouge, LA HUD Metro FMR Area LA St. Helena Parish $182,000 $233,000 $282,000 $349,000 $228,000 $292,000 $353,000 $438,000 Baton Rouge, LA HUD Metro FMR Area LA West Baton Rouge Parish $190,000 $243,000 $295,000 $365,000 $228,000 $292,000 $353,000 $438,000 Baton Rouge, LA HUD Metro FMR Area LA West Feliciana Parish $228,000 $292,000 $353,000 $438,000 $228,000 $292,000 $353,000 $438,000 www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Standard Assumptions Front End: Back End: Average Credit Card Debt: $2,000 (State average is $6,129) Income: Dependent on size of home and parish of project location. For Annual Taxes Annual Insurance Loan to Value 97.00% 28% - 31% 39% - 41% $600.00 $750.00 www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Extended Affordability Homeownership assistance HOME amount per-unit Under $15,000 Minimum period of affordability in years 5 $15,000 to $40,000 10 Over $40,000 15 www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Development Subsidy Development Subsidy The portion of Total Development Costs that does not have to be mortgaged to an eligible homebuyer. A Development Subsidy is necessary when the total cost to develop (TDC) of a home exceeds the appraised value. Example: TDC = $130,000 As-Build Appraised Value = $120,000 Development Subsidy = $10,000 (TDC ABAV) LHC limits Development Subsidy to $10,000 except in Areas of Demonstrated Need www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Area of Demonstrated Need Determination Area of Demonstrated Need -- An Area of Demonstrated Need is one that is located in a Qualified Census Tract, has a shortage of standard affordable housing units available for 80% AMI households and meets at least two of the following three criteria: 1. Housing value at or below 50% of the State average. The State Average is currently $144,100 (2015 ACS 5-Year Estimates, Table B25077) 2. Median Household Income at or below 65% of the State Average. The State Average is currently $45,047.00 (2015 ACS 5-Year Estimates, Table B19013). 3. A Poverty Rate at or above 1.5 times the state average. The State Average is currently 0.20197615 as computed from Poverty Status in the Past 12 Months By Sex and Age Table B17001 (2015 ACS 5-Year Estimates). www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Area of Demonstrated Need Determination Qualified Census Tract: https://www.huduser.gov/qct/qctmap.html Enter the City and State of your project in the address box and press GO. Click the Click Here for Full Screen Map You can now enlarge your view by using the + sign on the map Find the Census Tract your project is located in Double Click anywhere in the Census Tract. This bring up a status table. As long as the tract shows as Qualified for any year you may proceed to the next step. If it does not show as Qualified then your project is not in an Area of Demonstrated Need. www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Area of Demonstrated Need Determination Demographic Information: https://www.census.gov/acs/www/data/data-tables-and-tools/data-profiles/2015/ Scroll down and click the factfinder link. In the State County Place box enter Louisiana and click GO. In the State County Place box enter the town your project is located in and click GO. Click on Selected Housing Characteristics. Scroll down to VALUE and look at the Median for Louisiana and Your Town. If your town median value is 50% or less than the Louisiana number, you meet this criterion. Click the Back Button Click SELECTED ECONOMIC CHARACTERISTICS Scroll to INCOME AND BENEFITS (IN 2015 INFLATION-ADJUSTED DOLLARS) and check Median Household Income for Louisiana and your town. If your towns number is 65% or less of the State number, then you meet this criterion. Now scroll to PERCENTAGE OF FAMILIES AND PEOPLE WHOSE INCOME IN THE PAST 12 MONTHS IS BELOW THE POVERTY LEVEL and check the All Families line. If your towns number is 1.5 times greater than the State number, you meet this criterion. Remember to qualify you must be in a non-entitlement area, be in a Qualified Census Tract and meet two of the three criteria. www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation

Income Table Income and Value Tables Can Be Found: https://www.lhc.la.gov/ So go to the LHC website and click on Partners. Then click on HOME Program. Scroll to the bottom of the page and click on HOME Income Limits. The HUD Income Limits Spreadsheet should open up. The titles across the top tell you what each column is. Find you parish under area name (for 2017 column E). www.lhc.la.gov LouisianaHousingCorp @lahousingcorp Louisiana-housing-corporation