Affordable Rental Housing Construction Planning Worksheet

Transcription

1 Affordable Rental Housing Construction Planning Worksheet Presenter: Milton Hoyt, Chairman Renville County Vision West Housing Committee Vision West Housing Development Webinar

2 What does the Program Provide? A Method to Estimate the Cost of a proposed project, based on recent Construction Costs A Method to Project Annual Operating Costs and Monthly Rent Requirements A Method to Explore various Financing Options for comparison purposes A Process to participate in the NDHFA Incentive Grant Program and Determination of Rent An Amortization Schedule for the Term of the Mortgage or Revenue Bond Loan A 15-Year Pro Forma (Cash Flow) Report required by Lenders and the NDHFA 2

3 Microsoft Word Document DATA ENTRY TABLES START HERE > PICTURE RENVILLE COUNTY HOUSING - Vision West Project November. 25, 2014 CONSTRUCTION: 15-YR PRO FORMA Directions Directions Amortization Calculator here to open DEBT SERVICE SUMMARY DEVELOPMENT COSTS AND FINANCING PROJECTION Mortgage Term > >>>> Loan ServiceChg.> 1.000% No. Rental Units > 6 Inflation Index % > 2% Loan > 785, Annual Prin. & Int. Payment: 39,720 Living/Garage SqFt> Total Construction Cost > $1,017,600 NOTE: Enter a (1) in Yellow Cell for selected Term and Int. Rate - Others-(0) Add: Service Chg., If Any: 397 Property Development Fees Add: Contingency $0 Cost/SqFt % 2.375% 2.500% 2.625% 2.750% 2.875% 3.000% 3.125% >>>> Annual Payment: > 40,117 Developer Basic Fee: $72,000 Less: NDHFA Grant $232,500 $ Monthly Payment: > 3, Architect Fees: $20,000 Less: Down Payment $ % 3.375% 3.500% 3.625% 3.750% 3.875% 4.000% 4.125% Year One Equity > 16,391 Bond Attorney Fees: $4,000 Construction Loan Required > $785, >>>> Equity Determination Factor: % Construct. Managm't: $ % 4.375% 4.500% 4.625% 4.750% 4.875% 5.000% 5.125% Property Acquisition: $20,000 Override Cost Enter (0)> Incentive Grant Fees: $4,000 Here > Cost > $ % 5.375% 5.500% 5.625% 5.750% 5.875% 6.000% 6.125% 6.250% 6.375% 6.500% 6.625% 6.750% TOTAL DEVELOPM'T $120, Proj. Operating Costs Per Unit Inflation Bldg Fund Reserves: $ % Directions RENT DETERMINATION - - REQUIRED RENT TO MEET OPERATING COSTS NDHFA - Incentive Capital Outlays $ % Year-1 Projected Costs Enter (1) If Occupied No.Units BasicROI> % Rent TOTAL Grant Rent Guide Caretaker Contract: $ % Debt Service: $40,117 1 TYPE A: RENTAL: 4 Market Rate Rent: 935 3,740 Renville: Management Contract: $0 0.00% ENTER DATA Operating Exp: 15,360 0 TYPE B: RENTAL: 0 Market Rate Rent: 0 0 ENTER DATA Statewide: Taxes / Spec As'mts: $0 0.00% YELLOW CELLS Desired ROI: 6,686 1 TYPE C: RENTAL: 2 Grant Rate Rent: 720 1,440 YELLOW CELLS Gen. Operating Exp: $ % ONLY TOTAL COSTS > > 62,163 0 TYPE D: RENTAL: 0 Grant Rate Rent: 0 0 ONLY Housing Authority Utilities $1, % Rent Required > 863 Total Units > 6 Average Rent > 863 5,180 Statute: > Property & Liability Ins. $ % Months Percent Calculation Only Miscellaneous Expense: $ % Rented: Year 1 > 12 Override R.O.I. > Enter (0)> 1 Override Type A Enter (0)> 1 Vacancy Allowance 6 0 TOTAL OPERATING $2,560 Per Unit Renewal Increase: $10 Here >> Desired> 0.00% Rental > NewRent $0 Here > 1.00% % $6 Acrobat Document

4 Getting Started Determine the Number of Units and Size of your proposed Rental Housing Project Program will Estimate the Construction Cost Determine the Fixed Costs and Fees for Property and Services Provided by your Developer Program will incorporate Fees into total cost of Project Arrange for Financing the Housing Project and determine the Term and Rate of Interest Program will calculate the Debt Service Payment Program will prepare an Amortization Schedule for Term Determine the Rent Rates for each of the Types of Rental Units, including the NDHFA HIF Rate Program will calculate Rent Requirements to meet Expenses Program will allow for Override if necessary to compete 4

5 Project Development and Costs DEVELOPMENT COSTS AND FINANCING PROJECTION No. Rental Units > 6 Inflation Index % > 2% Living/Garage SqFt> Total Construction Cost > $1,017,600 Property Development Fees Add: Contingency $0 Cost/SqFt. Developer Basic Fee: $72,000 Less: NDHFA Grant $232,500 $98.26 Architect Fees: $20,000 Less: Down Payment $0 Bond Attorney Fees: $4,000 Construction Loan Required > $785,100 Construct. Managm't: $0 Property Acquisition: $20,000 Override Cost Enter (0)> 1 Incentive Grant Fees: $4,000 Here > Cost > $0 TOTAL DEVELOPM'T $120,000

6 Select Term and Interest Rate RENVILLE COUNTY HOUSING - Vision West Project November. 25, 2014 Directions Amortization Calculator here to open DEBT SERVICE SUMMARY Mortgage Term > >>>> Loan ServiceChg.> 1.000% Loan > 785, Annual Prin. & Int. Payment: 39,720 NOTE: Enter a (1) in Yellow Cell for selected Term and Int. Rate - Others-(0) Add: Service Chg., If Any: % 2.375% 2.500% 2.625% 2.750% 2.875% 3.000% 3.125% >>>> Annual Payment: > 40, Monthly Payment: > 3, % 3.375% 3.500% 3.625% 3.750% 3.875% 4.000% 4.125% Year One Equity > 16, >>>> Equity Determination Factor: % 4.250% 4.375% 4.500% 4.625% 4.750% 4.875% 5.000% 5.125% % 5.375% 5.500% 5.625% 5.750% 5.875% 6.000% 6.125% 6.250% 6.375% 6.500% 6.625% 6.750%

7 Enter Operating Costs and Projected Rate of Inflation Proj. Operating Costs Per Unit Inflation Bldg Fund Reserves: $ % Capital Outlays $ % Caretaker Contract: $ % Management Contract: $0 0.00% Taxes / Spec As'mts: $0 0.00% Gen. Operating Exp: $ % Utilities $1, % Property & Liability Ins. $ % Miscellaneous Expense: $ % TOTAL OPERATING $2,560 Per Unit

8 Summary of Data Entered Determination of Rent Requirement Directions RENT DETERMINATION - - REQUIRED RENT TO MEET OPERATING COSTS Year-1 Projected Costs Enter (1) If Occupied No.Units BasicROI> % Rent TOTAL Months Debt Service: $40,117 1 TYPE A: RENTAL: 4 Market Rate Rent: 935 3,740 Operating Exp: 15,360 0 TYPE B: RENTAL: 0 Market Rate Rent: 0 0 Desired ROI: 6,686 1 TYPE C: RENTAL: 2 Grant Rate Rent: 720 1,440 TOTAL COSTS > > 62,163 0 TYPE D: RENTAL: 0 Grant Rate Rent: 0 0 Rent Required > 863 Total Units > 6 Average Rent > 863 5,180 Percent Rented: Year 1 > 12 Override R.O.I. > Enter (0)> 1 Override Type A Enter (0)> 1 Vacancy Allowance Renewal Increase: $10 Here >> Desired> 0.00% Rental > NewRent $0 Here > 1.00% $6

9 Loan Amortization Report Determination of Debt Service Payment EXHIBIT--A - Loan Date: /30/ Directions Here > LOAN PAYMENT CHART Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Monthly Debt Service Payment 3, , , , , , , , , , , , , , , , , , Annual Debt Service (P & I) 40, ,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 Annual Equity (Principal) 16,391 16,890 17,404 17,933 18,478 19,040 19,620 20,216 20,831 21,465 22,118 22,790 23,484 24,198 24,934 25,692 26,474 27,279 Annual Interest on Loan Balance 23,726 23,227 22,713 22,184 21,639 21,077 20,497 19,901 19,286 18,652 17,999 17,327 16,633 15,919 15,183 14,425 13,643 12,838 Accumulating Equity 16,391 33,281 50,685 68,618 87, , , , , , , , , , , , , ,237 Loan Principal Balance-EOFY 768, , , , , , , , , , , , , , , , , ,863 Note: Program will set Term at Years > PAYMENT CHART Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 Loan Monthly P & I Pymt: 3, , , , , , , , , , , , , #DIV/0! Totals Annual (P & I) Pymt: 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40, ,203,509 Annual Equity 28,109 28,964 29,845 30,752 31,688 32,652 33,645 34,668 35,722 36,809 37,929 39, ,100 Annual Interest 12,008 11,153 10,272 9,365 8,429 7,465 6,472 5,449 4,395 3,308 2,188 1, ,409 Accumulating Equity 413, , , , , , , , , , , , , Principal Balance-EOFY 371, , , , , , , , ,819 77,010 39,

10 15-Year Pro Forma Cash Flow Revenue/Expense Projection EXHIBIT: B RENEWAL RENT PROJECTION The Rent increases shown represent the "Accumulated Increase" in Rent from First-Year Monthly Rent 15-YEAR PROFORMA Renewal Yr-1 Base Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Fiscal 15 CASHFLOW PREDICTION Rent Increase > $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150 Average Rent / Type Occupied TYPE Market Rate Rental 1 UNIT A: Market Rate Rental 0 UNIT B: Grant Rate Rental 1 UNIT C: Grant Rate Rental 0 UNIT D: FISCAL YEAR BASIS Gross 62,163 62,883 63,603 64,323 65,043 65,763 66,483 67,203 67,923 68,643 69,363 70,083 70,803 71,523 72, ,008,047 To Display on FY basis, Vacancy % ,080 Enter a ( 12 ) at Cell I27 Net 61,542 62,254 62,967 63,680 64,393 65,106 65,818 66,531 67,244 67,957 68,670 69,382 70,095 70,808 71, ,967 PROJECTED COST / Yrly Rate OPERATING COSTS UNIT Inflation Yr-1 Base Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Fiscal 15 TOTALS Bldg Fund Reserves: $ % 1,140 1,151 1,163 1,175 1,186 1,198 1,210 1,222 1,234 1,247 1,259 1,272 1,285 1,297 1, ,350 Capital Outlays $ % ,000 Caretaker Contract: $ % 2,700 2,754 2,809 2,865 2,923 2,981 3,041 3,101 3,163 3,227 3,291 3,357 3,424 3,493 3, ,692 Management Contract: $0 0.00% Taxes / Spec As'mts: $0 0.00% Gen. Operating Exp: $ % ,014 1,034 1,054 1,076 1,097 1,119 1,141 1,164 1, ,564 Utilities: (If Provided) $1, % 8,400 8,400 8,400 8,400 8,400 8,400 8,400 8,400 8,400 8,400 8,400 8,400 8,400 8,400 8, ,000 Property & Liability Ins. $ % 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1, ,250 Miscellaneous Expense $ % ,050 Oper. Costs / Unit:>> $2,560 Operating 15,360 15,443 15,528 15,615 15,703 15,793 15,884 15,978 16,072 16,169 16,268 16,368 16,470 16,574 16, ,907 Debt Service Pymt: 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40,117 40, ,755 TOTAL COSTS > 55,477 55,560 55,645 55,732 55,820 55,910 56,001 56,094 56,189 56,286 56,385 56,485 56,587 56,691 56, ,661 NET PROFIT 6,065 6,694 7,322 7,948 8,573 9,196 9,817 10,437 11,055 11,671 12,285 12,897 13,508 14,117 14, ,305 Accumulating Profit: 6,065 12,758 20,080 28,028 36,601 45,797 55,614 66,050 77,105 88, , , , , , ,305 Rate of Return on Investment > 0.772% 0.85% 0.93% 1.01% 1.09% 1.17% 1.25% 1.33% 1.41% 1.49% 1.56% 1.64% 1.72% 1.80% 1.88% 0.00% 1.327% ADD: Reserves and Equity > 3.005% 3.15% 3.30% 3.45% 3.60% 3.75% 3.90% 4.06% 4.22% 4.38% 4.54% 4.71% 4.88% 5.05% 5.22% 0.00% 4.080% 15-Yr Average Return on Investmt EXHIBIT: C E.O.Y DESCENDING LOAN BALANCE Balance> 768, , , , , , , , , , , , , , , ,616

11 Navigating the Program Follow the Directions for each Section Enter Data in Bright Yellow Cells Only Experiment with the various Options See Effects of different Term of the Loan See Effects of different Rates of interest See Effects of different Rent Amounts for Grant-Rate Units See Effects of different Monthly Rent Increases See Effects of different Allowance for Vacancy Percents Goal of the Program TO DETERMINE IF THE PROJECT CAN BE CONSTRUCTED OR PURCHASED AT A COST THAT ALLOWS FOR A REASONABLE RETURN ON INVESTMENT AT AFFORDABLE AND COMPETITIVE RENT RATES 11

12 Milton Hoyt, Chair Mohall Housing Authority Renville County Vision West Housing Committee

13 Introduction Bowman Dickinson

14 Education of general public, legislators, businesses, Ease of contributions 4 year history of success

15 Collaborative efforts in Bowman Hosted community forum of business leaders to explain the program Met with individuals

16 Talk with people who handle money Bankers Accountants Financial Planners Business Vendors Community Spirited People and Business Owners

17 Quarterly tax payers Consideration for large out of state businesses Companies that contribute to the fund but do not specify a project

18 Mary Anderson, Executive Director st Street West Dickinson ND (fax)