5/19/2012

NSP Homebuyer Purchase Feasibility Analysis

TAB 1: HOMEBUYER PROJECT - DEVELOPER-DRIVEN MODEL

UNDERWRITING CRITERIA

Mortgage Term Requirements

Housing to Income Ratio Gross Household Income Debt to Income Ratio

Minimum

Maximum

25%

33% 41%

PROGRAM GUIDELINES
Subsidy Amount Limits $80,000 per unit Uses
Appraisal Gap
(TDC exceeds Sales Price)

Forms of Assistance

Final Development Final Affordability Homebuyer Maximum

Affordability Gap

$50,000

per unit

(Down Payment, Closing Costs and Mortgage Buy Down)

$150,000

per unit

Professional Fees

Fee Developer Fee Sales Referral 12%

Amount
of TDC less Acquisition Costs of Sales Price or

Eligible Service Provider

Non-Profit and For Profit Developers Licensed Real Estate Agents

6%

$4,000

(whichever greater)

Homebuyer Education

$500 to eligible buyer

per NSP-assisted unit sold

HUD-certified Housing Counselors

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1. Program Guidelines

5/19/2012

NSP Homebuyer Purchase Feasibility Analysis

TAB 2: HOMEBUYER PROJECT - DEVELOPER-DRIVEN PROJECT DESCRIPTION, HOMEBUYER INFORMATION & COMPLIANCE
GENERAL INFORMATION
Address Developer 1965 West Avalon Street, Allentown, PA Bidwell Construction Census Tract 3205.5

DEVELOPER
A. Is the Developer a Local Government or Subrecipient?
Yes or No? If YES, Local Government does not receive Developer Fee. Rather, they will use Administration Funds.

NO

PROPERTY
A. Property Description
As Is As Improved

B. Purchase Price and Appraisal Analysis 3 1 1250 1980 NO 4 2 1800

AS-IS Appraised FMV Date of Appraisal Purchase Price Date of Final Agreement Purchase Discount Meet Discount Requirement?* Appraisal done within 60 days prior to Final Agreement date?* $45,000 06/01/10 $32,500 05/25/10

# of Bedrooms: # of Bathrooms: Square Feet: Year Built: Lead-based paint hazard control needed? Estimated As-Improved Sales Price

28% YES YES

$100,000

*"Yes" to both questions for purchase to comply with NSP.

C. Property Type & NSP Eligible Use Analysis

1. Is the Property a vacant lot, or a vacant, foreclosed or abandoned single-family home?

Yes or No? Yes or No? Yes or No?

2. Is the Property a vacant, non-foreclosed single family home? 3. Will the project rehabilitate the existing single family home?

no yes yes

NO YES NO

NSP ELIGIBLE USE Acquisition?

USE E
Rehab/Redevelop?

If No to questions #1 & 2, then property is ineligible for NSP. If No to question #3, then new construction project.

USE E

INCOME TARGETING
A. NSP funds may only assist housing that serves families earning less than 120% AMI. Please complete the table below. B. Will you serve households earning at or below 50% AMI?
Year

Yes or No?

no
120% AMI $48,000 $56,640 $61,440 $64,800 $68,400 $69,600 $75,000 $81,600

NO

City or MSA

2009

Allentown

Household Size 1 2 3 4 5 6 7 8

50% AMI

80% AMI $32,000 $37,760 $40,960 $43,200 $45,600 $46,400 $50,000 $54,400

100% AMI $40,000 $47,200 $51,200 $54,000 $57,000 $58,000 $62,500 $68,000

Link to income limits

$20,000 $23,600 $25,600 $27,000 $28,500 $29,000 $31,250 $34,000

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2.Proj Description & Compliance

5/19/2012

NSP Homebuyer Purchase Feasibility Analysis

TAB 3: HOMEBUYER PROJECT - DEVELOPER-DRIVEN TO BE IDENTIFIED HOMEBUYER AFFORDABILITY ANALYSIS

What Income and Down Payment Can Support Proposed Sale Price? How Much Needed in Homebuyer Affordability Gap Subsidy? Address Developer Income Targeting 1965 West Avalon Street, Allentown, PA Bidwell Construction Up to 120% # of Bedrooms: # of Bathrooms: Square Feet: Sales Price:
As-Is As-Improved

3 1 1,250

4 2 1,800 $100,000

Meeting Your Income Level? HOUSEHOLD SIZE AND INCOME:

YES
4 $54,000
Lowest Qualifying
$54,000 $54,000 $54,000

SMSA % Area Median Income of Target Buyers: Maximum Incomes of Target Buyers Monthly Incomes of Target Buyers
MAXIMUM Housing/Income Ratio

Allentown

Low

Moderate

Middle

36%
$19,344 $1,612 33% $532

50%
$27,000 $2,250 33% $743

80%
$43,200 $3,600 33% $1,188

120%
$64,800 $5,400 33% $1,782

Target Buyers' Maximum Monthly Mrtg Pmt (PITI)

AVERAGE SALE PRICE:

Down Payment-From Buyer Other Down Payment Assistance
Amortizing Subordinate Mortgage Deferred Due on Sale 2nd Mortgage

$
3.00% 0.00%

100,000
$3,000 $0 $0 $40,000 $57,000 57.00% 5.500% 30 $324
0.00% 0.00% 30 $0

$100,000 $3,000 $0 $0 $17,000 $80,000

80.00% 5.500% 30 $454
0.00% 0.00% 12 $0

$100,000 $3,000 $0 $0 $0 $97,000

97.00% 5.500% 30 $551
0.00% 0.00% 12 $0

$100,000 $3,000 $0 $0 $0 $97,000

97.00% 5.500% 30 $551
0.00% 0.00% 12 $0

FIRST MORTGAGE AMT BASED ON AFFORDABILITY:

First Mortgage Loan-to-Value Ratio: First Mortgage Interest Rate: First Mortgage Term: First Mortgage Principal and Interest
Second Mortgage Loan-to-Value Ratio: Second Mortgage Interest Rate: Second Mortgage Term: Second Mortgage Principal and Interest:

Taxes Homeowners Insurance Private Mortgage Insurance

Homeowners Association Fee

$2,000 $500 required if LTV > or = 80% $0

$167 $42 $0
$0

$167 $42 $0
$0

$167 $42 $49

$0

$167 $42 $49

$0

TOTAL MONTHLY MORTGAGE PAYMENT:

Minimum Qualifying Income
% Area Median Income Affordable to Target Income Group?
Yes

$532
$ 19,344
36%
Yes

$663
$ 24,093
45%
Yes

$808
$ 29,367
54%
Yes

$808
$ 29,367
54%

CASH REQUIREMENTS
CDBG requires Buyer pay
Down Payment Closing Costs Down Pmt & Closing Cost Assistance

50.0% of Down Payment required by Lender 3.00% $3,000 $3,000 4.24% -5.74% $4,235 ($5,735)
$4,235 ($5,735)

$1,500
$3,000 $4,235 ($5,735) $3,000 $4,235 ($5,735)

TOTAL BUYER CASH TO CLOSE:

$1,500

$1,500

$1,500

$1,500

Affordability Subsidy SOURCES

Subsidy USE Down Payment Closing Costs

DPA Mortgage Write Down Amortizing Subordinate Mortgage

Per Unit Affordability Subsidy

Schedule of Closing Costs

Title Insurance Appraisal Recording Deed Prep Transfer Taxes Tax Stamp Pre-Paid Taxes Pre-Paid Insurance Loan Origination Fee Loan Guarantee Fee Total Closing Costs: 1.50% $2,000 $500 $855 $0 $4,235 $500 $200 $90 $90

NSP DPA Subsidy NSP Closing Costs Assistance

Other Down Payment Assistance

$1,500 $4,235
$0

NSP Homebuyer Subsidy

Amortizing Subordinate Mortgage

$40,000
$0

TOTAL BUYER AFFORDABILITY SUBSIDY:

Homebuyer Subsidy as a % of Sale Price:

$45,735
46% $50,000 $45,735 $4,265
PROCEED

Grantee Maximum Homebuyer Affordability GAP: NSP Affordability GAP: Balance from Limit: Homebuyer Subsidy within Limits?

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3. Buyer Affordability

5/19/2012

NSP Homebuyer Purchase Feasibility Analysis DEVELOPMENT BUDGET

What are the Estimated Costs to Rehab A Scattered-Site Single Family Unit? What is the Development Appraisal Gap? Address Developer Income Targeting 1965 West Avalon Street, Bidwell Construction Up to 120% # of Bedrooms: # of Bathrooms: Square Feet:
Sales Price:
USES PREDEVELOPMENT
Environmental Review and Assessments As-Is URA Appraisal and As-Completed Estimate Title and Recording Architect & Structural Engineer Asbestos & Lead Based Paint Testing Property Acquisition Consultant Code Inspections & Preparation of Specifications Survey & Civil Engineering Energy Audit and Energy Efficiency Specifications Other As-Is Improved

3 1 1,250

4 2 1,800 $100,000

PER UNIT
$500 $400 $125 $4,500 $400 $0 $550 $1,000 $500 $0 $0 $0

Year Built:

1980

Other
Other

Total Predevelopment:
BUILDING AND PROPERTY ACQUISITION
Land & Building Temporary Relocation* 0 Households $3,000 per Relocation

$7,975
$32,500 $0

*Contact State if relocation; but assume $3000 for temporary relocation

Total Acquisition:

$32,500

CONSTRUCTION COSTS
REHAB or NEW CONSTRUCTION Demolition of Blighted Structures for New Construction Infrastructure Improvements Lead Based Paint & Asbestos Abatement Landscaping CONTRACTOR FEE CONSTRUCTION CONTINGENCY $32.84 Average Cost per Square Foot $59,120 $0 $4,000 $2,000 $2,500 $6,762 $6,762

10.00% / hard cost 10.00% / hard cost

Total Construction:
CARRYING COSTS
Board Up & Lawn Maintenance Utilities Builder's Risk Insurance Fire Insurance (Commercial) Property (General) Liability Insurance Real Estate Taxes Other Other Other

$81,145
$0 $100 $400 $400 $400 $1,000 $0 $0 $0

Total Carrying Costs:

PROFESSIONAL SERVICES
Legal Accounting Consultant Marketing /Advertising Other Other Other

$2,300
$2,500 $3,000 $1,500 $4,500 $0 $0 $0

Total Professional Fees:

SELLER'S CLOSING COSTS
Realtor Commission Seller's Closing Costs Homebuyer Education Seller Paid Transfer Taxes 6.0% of sale price or 3.00% of sale price $500 per unit 0.00% of sale price $4,000 (whichever more)

$11,500
$6,000 $3,000 $500 $0

Total Seller's Closing Costs:

Hard & Soft Costs Sub-Total:

$9,500
$144,920

DEVELOPER FEE
12% of TDC less Acquisition Costs Is the Developer a Local Government? NO If YES, Local Government does not receive Developer Fee. Rather, they will use Administration Funds.

$13,490

TOTAL DEVELOPMENT COSTS (TDC): less SALE Proceeds: Development Appraisal GAP:
Maximum Development GAP NSP Subsidy: Requested NSP Appraisal GAP Funds Balance from Limit: Compliant with Sales
Price?

$158,410 $100,000 ($58,410)

$80,000 $58,410 $21,590 37%

YES

Within Appraisal Gap Limit?

Proceed

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4. Development Budget

5/19/2012

NSP Homebuyer Purchase Feasibility Analysis

TAB 6: HOMEBUYER PROJECT - DEVELOPER-DRIVEN

CONSTRUCTION BUDGET
What is the Development Appraisal Gap? Address Developer Income % AMI
1965 West Avalon Street, Allentown, PA Bidwell Construction Up to 120%
As-Is Improved

# of Bedrooms: # of Bathrooms: Square Feet: Sales Price:

3 1 1,250

4 2 1,800 $100,000

CONSTRUCTION
Demolition (Partial for Rehab only) Excavation Concrete Masonry Roofing Siding Rough carpentry HVAC (Repair, not Replacement) Plumbing Electrical Finish carpentry Interior Doors and Closet Windows (Refurbish, not Replacement) Drywall Tile Paint (interior) Flooring Basic Insulation (not for Energy Efficiency) Energy Efficiency Enhancements Appliances Cabinets & Counter Tops Hardware and Accessories Window Treatments (mini blinds) Exterior Door Storm Door Other Other Other Other Other Other Other Other Other

Linear Feet

Sq. ft.

Quantity

Unit Price

Total Cost

Repair and Clean

0 0 0 0 1 1 1 0 1 1 1 12 0 1 4 10 8 1 See Schedule Below See Schedule Below 1 11 20 2 2

$8,000.00 $1,200.00 $7,320.47 $3,000.00 $3,000.00 $750.00 $125.00 $1,000.00 $500.00 $250.00 $500.00 $500.00

$4,500.00 $100.00 $50.00 $600.00 $300.00

$0 $0 $0 $0 $8,000 $1,200 $7,320 $0 $3,000 $3,000 $750 $1,500 $0 $1,000 $2,000 $2,500 $4,000 $500 $12,950 $3,000 $4,500 $1,100 $1,000 $1,200 $600 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Materials / Labor:

Cost per Sq. ft.:

$32.84

$59,120
Project

Energy Efficiency Improvements

House insulation upgrades Windows HVAC Blower Door Test House energy monitor Ceiling Fans Electrical: (motion, photovoltaic, dimmers, lt blbs) Low Flow Plumbing Fixtures Tankless water heater Solar Panels - Photovoltaic Other Other Other Other

# Per Unit

Per Unit Cost

1 20 1 1 6 11 3

$2,000 $250 $4,000 $500 $100 $50 $100

$2,000 $5,000 $4,000 $500 $0 $600 $550 $300 $0 $0 $0 $0 $0 $0

Total Energy Efficiency Improvements:

$12,950
# Per Unit Per Unit Cost Project

Appliance Allowance
Refrigerator Range/Microwave Hood Dishwasher Garbage Disposal Garage Door Opener Washer / Dryer Other Other Other

1 1 1 1 1 1

$600 $500 $400 $100 $200 $1,200

$600 $500 $400 $100 $200 $1,200 $0 $0 $0

Total Appliance Allowance

$3,000

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5. Construction Budget

5/19/2012

NSP Homebuyer Purchase Feasibility Analysis

TAB 6: HOMEBUYER PROJECT - DEVELOPER-DRIVEN SOURCES AND USES SCHEDULE

PROJECT INFORMATION
What is the Development Appraisal Gap? Address Developer Income Targeting 1965 West Avalon Bidwell Up to 120% # of Bedrooms: # of Bathrooms: Square Feet:
Sales Price:
As-Is Improved

3 1 1,250

4 2 1,800 $100,000

INTERIM NSP-FUNDED DEVELOPMENT FINANCING

PER UNIT COSTS

Total Predevelopment: Total Acquisition: Total Construction: Total Carrying Costs: Total Professional Fees: Total Seller's Closing Costs: Total Developer Fee

$7,975 $32,500 $81,145 $2,300 $11,500 $9,500 $13,490

TOTAL DEVELOPMENT COSTS:

$158,410

I.
REHABILITATION - DEVELOPMENT SUBSIDY TOTAL DEVELOPMENT COSTS:
less

TOTAL NSP INTERIM LOAN FOR TDC:

$158,410

CALCULATE DEVELOPMENT "Appraisal GAP" SUBSIDY

$158,410 $ 100,000

SALES PRICE

NSP REHAB DEVELOPER SUBSIDY:

HOMEBUYER AFFORDABILITY Minimum Qualifying Income $19,344 Household Size: Housing to Income Ratio:

$58,410

CALCULATE HOMEBUYER "Affordability GAP" SUBSIDY

4 33%
PER UNIT COSTS

USES

Estimated As-Improved Sales Price Closing Costs Total Sales Transaction Costs: FIRST MORTGAGE AMOUNT

$100,000 $4,235 $104,235

$57,000

SOURCES

DOWN PAYMENT / PRINCIPAL BUY DOWN (Based on incentives to market and sell unit) NSP Down Payment Assistance NSP Closing Cost Assistance Other Down Payment Assistance AFFORDABILITY BUY DOWN OF MORTGAGE (Based on income & affordability needs) NSP Affordability Buy Down of Purchase Mortgage CASH FROM HOMEBUYER

$1,500 $4,235 $0 $5,735

$40,000

$40,000 $1,500 NSP HOMEBUYER SUBSIDY ANALYSIS NSP Funded Mortgage Buy Down NSP Funded Down Payment Assistance NSP Funded Closing Cost Assistance $40,000 $1,500 $4,235

TOTAL NSP HOMEBUYER AFFORDABILITY SUBSIDY (Mortgage Buydown & DPA):

$45,735

II.

FINAL COMBINED NSP SUBSIDY:

$104,145

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6. Sources & Uses

5/19/2012

NSP Homebuyer Purchase Feasibility Analysis

TAB 7: HOMEBUYER PROJECT - DEVELOPER-DRIVEN FUNDS MANAGEMENT ANALYSIS

PROJECT INFORMATION 1965 West Avalon Street, Allentown, PA Address Bidwell Construction Developer Up to 120% Income Level

# of Bedrooms: # of Bathrooms: Square Feet: Sales Price:

As-Is 3 1 1250

Improved 4 2 1800 $100,000

FUNDS MANAGEMENT INFORMATION

TOTAL DEVELOPMENT COST Sales Price NSP Development Subsidy Sales Transaction Costs Buyer Purchase Power NSP Homebuyer Subsidy

$158,410 $100,000 $58,410 $104,235 $58,500 $45,735

100% interim financing

Sales Price + Closing Costs 1st Mortgage + Buyer Down Payment DPA + Mortgage Buy Down + Closing Cost Assistance

NSP OBLIGATION AMOUNT: FINAL NSP SUBSIDY:

$162,645 $104,145 $58,500

TDC + Closing Cost Assistance

Development plus Homebuyer Subsidy

NSP PROGRAM INCOME

Buyer Purchase Power

SUBSIDY ANALYSIS
Max Per Unit Total NSP Subisdy Requested NSP Subsidy Balance from Limit: $150,000 $104,145 $45,855

Within Maximum Subsidy Limits?

YES. PROCEED.

DISASTER RECOVERY GRANTS REPORTING SYSTEM

Income Level: Meet 25% Set-aside?

36% NO
Obligation Amount

of AMI NSP Eligible Use

Acquisition Disposition Rehabilitation / Redevelopment * Demolition of Blighted Structures Homebuyer Assistance ** Total

$40,475 $11,800 $106,135 $0 $4,235 $162,645

USE E USE E USE E USE D USE E

* Because of 100% financing and assumes developer-driven model, mortgage buydown and downpayment assistance are covered though total development costs. But, mortgage buydown and downpayment assistance affects program income returning to Grantee. ** Closing cost assistance is paid through a CDBG activity "Homebuyer Assistance."

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7. Funds Management