Helping ‘American Dream’ in Indiana

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Politician, housing partners join Fannie Mae to launch $33B affordable housing plan for Indiana. Plan will provide affordable homeownership and rental opportunities for 310,000 individuals and families.
Helping ‘American Dream’ in Indiana

RISMEDIA, Aug. 28 — Building on the successful completion of its $9.1 billion investment plan, which financed affordable housing for 110,000 Indiana families two years ahead of schedule, Fannie Mae, the nation’s largest source of financing for home mortgages, today announced a new $33 billion investment plan for the State of Indiana.

U.S. Representative Julia Carson (D-Ind.), local lenders and housing advocates joined Barry Zigas, senior vice president and executive director of Fannie Mae’s National Community Lending Center, to unveil details of the American Dream Commitment for Indiana.

The investment plan will provide affordable homeownership and rental opportunities for 310,000 individuals and families across the state through 2010. The announcement was made during Zigas’ luncheon keynote for the 12th Annual Indiana Affordable Housing Conference, hosted by the Indiana Housing Finance Authority (IHFA), at the Indiana Convention Center.

“I am pleased to hear that Fannie Mae will invest $33 billion in Indiana through the end of the decade. This is an important initiative and one that will increase the availability and affordability of homeownership for Hoosiers,” says Senator Richard Lugar (R-Ind.). “Homeownership is essential in building strong communities, and I commend Fannie Mae for making such a substantial investment in Indiana.”

“Affordable housing development is such an important component of economic growth,” says Sen. Evan Bayh (D-Ind.). “Fannie Mae has shown that it means business with this investment by bringing resources, technology, and staff to address Indiana’s housing challenges in a very meaningful way.”

“Homeownership is an important path to personal wealth and equity building for our state’s residents,” Carson says. “The more mainstream mortgage funding available the less likely it is that people will have to resort to high-cost subprime or credit-wrecking predatory lenders. Fannie Mae has a proud record of investment in underserved communities, and today’s $33 billion commitment to increase affordable housing will certainly add to that record.”

The American Dream Commitment for Indiana is part of Fannie Mae’s $2 trillion American Dream Commitment to increase homeownership nationwide among working families, minorities, rural residents, and others whose homeownership rates lag the general population by the end of the decade.

“When we opened the Indiana Partnership Office in 1999, we set a goal to provide $9.1 billion in affordable housing financing in five years. With the help of local lenders and housing partners, this goal has been met in less than three years,” Zigas says. “This new investment plan will address the housing needs unique to the state, from affordability to community development. It also will target the toughest rural and urban housing challenges, and provide more affordable housing opportunities for Indiana.”

Fannie Mae’s rapid success in Indiana was made possible thanks to the help of local lender, nonprofit, and public sector partners. Some of the accomplishments include the establishment of affordable mortgage products and initiatives such as:

IHFA First Home Community: IHFA-approved lenders offer this affordable mortgage product, which has flexible credit guidelines and qualifying ratios, as well as a minimum down payment contribution of 1 percent or $500, whichever is less, from the borrower’s own funds to help teachers, firefighters, police officers, and state and municipal workers become homeowners. First Home Opportunity, is a similar product that is available for first-time home buyers who fall outside of First Home Community’s employment classification.

Section 8 to Homeownership: Under the Section 8 Homeownership Underwriting Experiment, Fannie Mae is working with local lenders and Public Housing Agencies to finance homeownership for individuals and families who receive U.S. Department of Housing and Urban Development’s (HUD) Section 8 rental assistance vouchers. These households may qualify for a mortgage loan based on their current earned income, combined with the housing assistance subsidy. Upon purchasing a home, the homeownership option allows Section 8 recipients to apply the subsidy toward the payment of principal, interest, taxes, and insurance. To qualify, Section 8 recipients must earn a minimum annual income of $10,300, work full-time, and must have completed a one year lease in HUD’s Section 8 Housing Assistance Payment program. Section 8 voucher recipients who are elderly or have disabilities, are exempt from being employed full-time, but they must receive $10,300 in annual income.

“We’ve been able to meet our goals because of the work done by housing partners like IHFA,” says Curt Wiley, director of Fannie Mae’s Indiana Partnership Office. “The creative partnerships we’ve developed as part of IHFA’s leadership has resulted in lower cost mortgages for first-time home buyers.”

Over the next eight years, Fannie Mae will implement the new Indiana affordable housing investment plan by focusing resources on expanding homeownership and rental opportunities throughout the state. Components of the plan include:

? Working with IHFA, local governments, employers, and lenders across the state to increase homeownership among Indiana’s workforce through employer assisted housing (EAH) plans. EAH is a tool to attract and retain qualified employees, as well as a way to revitalize neighborhoods and reduce employees’ commutes. By implementing an EAH plan, employers can provide a variety of assistance, including down payment or closing cost assistance, interest rate buy-downs, rental assistance, home-buyer education, and help with savings plans.

? Expanding affordable mortgage products and services to support underserved communities, including rural residents, minorities, and low- and moderate-income families by making available low down payment products such as MyCommunityMortgage, a suite of flexible mortgage options that allow for a minimum contribution of 1% or $500, whichever is less, from the borrower’s own funds, with the remaining down payment (if applicable) coming from flexible sources such as grants or gifts. Credit guidelines for MyCommunityMortgage options are flexible, and mortgage reserves can range from none to two months, depending on the mortgage.

? Investing in community development and neighborhood revitalization efforts to develop and preserve affordable rental housing across the state. Recent investments include tax credit investments in the Davlan Apartments in Indianapolis, the Cotton Mill Apartments in Cannelton, the Emerson Housing Project in Gary, and Rivertrace Apartments in Madison.

For more information, call (800) 732-6643 or visit www.fanniemae.com.

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