Tag Archives: sleeping second

Land Development

CASA housing explained

Workplace Housing

Skylark Meadows, Novato sets state affordable ownership record
Skylark Meadows, Novato sets state affordable ownership record

Affordably Owned by not-super rich folks

Section 8 rental subsidies for generations?

Section 8 tax dollars taken from your taxed wallet to help low income households for generations?

Or

Own a home and its appreciation in the North Bay?

One time financial partnership assist to boost your toward financial independence?

FANNIE MAE

(Federal National

Mortgage Association)

1990 Blue Book National Model

CASA (Community Assisted

Shared Appreciation)

FANNIE MAE recommends emulating CASA across the nation

What is CASA?

Allows low and moderate income households to share in the benefits of homeownership in overpriced areas.

How?

The household buys in partnership with a non-profit, public benefit trust fund, foundation or public agency.

Why?

Allows civil servants, teachers, nurses, small businessman to live in their work community, share great American dream of equity appreciation thereby building true community and reducing traffic and environmental pollution caused by forced commutes to distant housing.

Town house, condo, starter home costs $225,000.

3 person household =  $40,000 income, good credit

Saved, family gift     =  $20,000 down

 Qualifies $125,000 9% mortgage, $1,0005 monthly

 Sales price                   $225,000

Less down & mortgage    -(20,000+125,000)

Shortfall                        $80,000

$80,000 = from Affordable Ownership Fund (CASA)

Funded from?

MCFoundation Affordable Ownership Trust Fund

Redevelopment Agency Fund

Open Space District or replica

Marin’s Most Pressing Need Trust Fund

Developer in-lieu fees…

Combination of above

How repaid?

Deferred principle and interest 2nd mortgage

“Sleeping Second Mortgage”

How is financial independence gained by homeowner?

Homeowner shares proportionally in appreciation.

20,000 down + 125,000 mortgage =  Homeowner’s share

$225,000 Sales Price                         Unit Sales Price

$145,000          =      65% homeowner’s share

$225,000

Homeowner will live in home, maintain and care for it, take tax write-offs, and if and when he/she sells it reap 65% of the appreciation.

How is solvency of CASA (Workplace/Affordable Ownership Housing Fund) maintained to continue program?

CASA contributed $80,000 toward purchase price.

$80,000    =  35% CASA’s share

$225,000

At sale CASA will receive 35% of appreciation which will return to the CASA fund to provide funds to repurchase that same or another house for the low/moderate income household seeking affordable ownership housing at that time.

X years later the CASA assisted buyer sells

Selling Price  =             $400,000

Less original costs         -225,000

Appreciation                 $175,000

CASA fund receive 35% or $61,250

of appreciation/contingent interest to assist next low/moderate income buyer.

Homeowner receives 65% of the appreciation or $113,750 to buy another home.

General Plan Update

San Rafael should add this to Housing Element as:

  • Corner stone of its affordable housing program.
  • In-lieu fee contribution to CASA Fund should be option available to developers rather than just prescribed %age of low income units in their developments
  • Benefits employers whose employees want to own and not commute long distances.
  • Adds option to developer’s available tools.
  • Workers prefer owning to renting.
  • Builds community pride.

Fund this program via:

  • Budgeting it as line item
  • Transferring some Redevelopment Agency funds to it
  • Proactively pressing the Marin Community Foundation to fund it
  • Educating the community on the more pressing need to fund it versus such less needed well-funded programs such as the Open Space Acquisition Fund.

The dearth of affordable housing – and the traffic congestion it causes – is Marin’s most pressing need – not more open space.

The family is best educational source children will ever be exposed to.

The house you live in is the schoolhouse you’ll learn the most from.

Every family should have the opportunity to proudly own a home near where they work.

To build strong families and the benefits they bring to the community, this should be a priority program in every General Plan and every endowed public benefit agency in pricey Marin.

3 person household =  $40,000 income, good credit

Saved, family gift     =  $20,000 down

 Qualifies $125,000 9% mortgage, $1,0005 monthly

 Sales price                   $225,000

Less down & mortgage    -(20,000+125,000)

Shortfall                        $80,000

$80,000 = from Affordable Ownership Fund (CASA)

Funded from?

MCFoundation Affordable Ownership Trust Fund

Redevelopment Agency Fund

Open Space District or replica

Marin’s Most Pressing Need Trust Fund

Developer in-lieu fees…

Combination of above

How repaid?

Deferred principle and interest 2nd mortgage

“Sleeping Second Mortgage”

How is financial independence gained by homeowner?

Homeowner shares proportionally in appreciation.

20,000 down + 125,000 mortgage =  Homeowner’s share

$225,000 Sales Price                         Unit Sales Price

$145,000          =      65% homeowner’s share

$225,000

Homeowner will live in home, maintain and care for it, take tax write-offs, and if and when he/she sells it reap 65% of the appreciation.

 

Common Sense Opeds, Land Development

CASA program a model

Novato Advance       May 9, 1990

Viewpoint

 CASA program a model

        By DWAYNE HUNN

Some interesting things have been happening at Novato Ecumenical Housing recently. Last month NEH was notified by the Federal National Mortgage Association (FANNIE MAE) that our Community Assisted Shared Appreciation (CASA) home ownership program for low and moderate income households will re recognized in FANNIE MAE’S  1990 Blue Book as one of two national models shared equity home ownership programs. FANNIE MAE uses its prestigious annual publication to recognize programs that it believes should be emulated by other cities across the nation.

The national recognition does not come without some irony. For years, NEH  has struggled to obtain additional funds to expand our CASA program in Novato and throughout the county. So many political, environmental, and bureaucratic boulders have been placed in our path that we often feel like Sisyphus, the mythological figure who was compelled to roll a stone to the top of a slope, the stone always escaping him near the top and rolling down again.

Perhaps the uphill fight, taking place among the rolling hills of exclusive Marin, is part of the reason the program has been recognized. CASA has assisted more than 60 low and moderate income families in purchasing their first homes in Novato. Families earning as low as 34% of Marin’s median income have purchased homes through this deferred principal and interest second mortgage home ownership program. Our average second mortgage assistance been $37,000 per family and their average income has been $22,700.

NEH is proud of the award. We are prouder, however, that we have been able to help many starting families obtain the Great American Dream. Our assisted owners are not, as our uninformed opponents like to portray them, low-lifes. They are nurses, sheriff and police department employees, private entrepreneurs, secretaries, hard-working, single moms, etc. They are essential service providers and they have an almost  non-existent mortgage failure rate.

NEH has been able to raise more than $2 million to fund this program. The sources from which we raised the funds might help explain to some who oppose our work why we often argue on behalf of sensible, long-term environmentally sound developments. Source of Affordable Ownership Housing Trust Funds:

  • 53 percent developer contributions. Densities have been cut so drastically in Novato that no new sources of in-lieu fees are foreseen in the near future.
  • 18 percent Community Development Block Grants. We have not received and additional CDBG funds since 1984.
  • 15 percent NEH’s recapture of its equity share and second mortgage. Soon NEH will be the second largest supplier to its own program. Unfortunately, that means the program is not growing to handle the increased need.
  • 11 percent San Francisco Foundation. The San Francisco Foundation was replaced by the Marin Community Foundation.
  • 4 percent Marin Community Foundation.

As you can see, most of our funds which allow us to assist Novato residents in purchasing their own Novato homes come from developer contributions. When reasonable densities are drastically reduced to such a low point  that developers cannot justify the expense of affordable unit development or developers are not required to contribute in-lieu fees, we cannot help balance the jobs/housing imbalance.

The Brookside development is an example of how drastic density reductions hurt Novato’s ability to balance housing with the purchasing power of local residents. Ten years ago Brookside was approved for 120 units, of which 34 were  to be affordable. The Novato City Council then cut the allowed development to 70 units on 59 acres with no affordable units. Now come “concerned” citizens want the density to be cut to 0 units and want to you to assess yourself a parcel tax to purchase the Brookside  land for open space.

This desire for more open space is taking place in a county where more than 84 percent of the land is set aside in open space, agriculture reserve and park land. The petitions are being gathered in a city where, in 1980, the city averaged four units per acre and where today that average has dropped to about 2.4 units per developed acre. Politics, like awards, often has an ironic character to it.

For more information, call 892-8136.