Jump to Main Content

Program Procedures, Policies and Criteria

 

Mission Statement

New Chauncey Housing Incorporated (NCHI), a not-for-profit housing development organization, promotes the stabilization of the near campus New Chauncey Neighborhood by increasing affordable home ownership for moderate income families thus preserving the historic nature and value of the neighborhood.

Acquisition/Rehabilitation Program

Through this program the organization acquires properties in the New Chauncey Neighborhood that are currently in use as rental properties or those at risk of becoming rental properties. All properties found to have substandard conditions are then rehabilitated to meet minimum housing standards.

After rehabilitation is complete the properties are then sold as owner occupied homes to eligible families. This program does not provide first mortgage funds; therefore, eligible families must be able to obtain a conventional mortgage. The amount of mortgage that the eligible family can obtain will determine participation in the program. The project and gap financing feasibility criteria determine the selling price of a property. The property upon completion of the rehabilitation must meet the West Lafayette Housing-Property Maintenance Code.

A) Project Feasibility Criteria:

For the acquisition with Community Development Block Grant funds and/or HOME funds for resale to an eligible family:

  1. The total costs including the purchase price, all estimated closing costs, all estimated rehabilitation costs and all estimated project delivery costs are limited to $132,000. This limit has been determined by the affordability of a home by an eligible family of four with income at the moderate income limit with gap financing up to $25,000.
  2. Purchase prices of housing exceeding $125,000 would necessitate that the property be in substantial compliance with the City of West Lafayette Housing-Property Maintenance Code. It is expected that no rehabilitation will be required on properties with purchase prices approaching the $132,000 limit.
  3. Purchase prices of housing below $100,000 must have estimated rehabilitation costs and project delivery costs limited to 25% of the purchase price or estimated rehabilitation and project delivery costs not exceeding the difference between the purchase price and an after-rehabilitation appraisal.

4 ) Home Ownership Assistance

The desired level of NCHI's "gap financing", or the difference between the total costs of the agency and what an eligible family can afford, is $25,000 per project. The gap financing can be in the form of:

    1. Forgivable loan.
    2. Deferred repayable loan at 3% interest with the payment of principal deferred for 8 years with the term not exceeding 15 years. Interest is to be paid for the deferral period.
    3. Balloon repayable loan at 3% with balloon repayment at the end of 5 years. Payment of principal and interest for the five year period with loan term written for 15 years.
    4. Straight repayable loan at 3% interest for a term not exceeding 15 years.
    5. A combination of not more than two of the above loan types. Both loans would be secured with separate mortgages with repayable loans having seniority over a forgivable loan.

B) Criteria for projects acquired by other funds:

  1. There is no established criteria for private funds unless established by the funding source.
  2. The use of other federal or state funds will be determined by the specific funding source.

Homebuyer Assistance Program

Through this program the agency provides financial assistance for downpayment and closing costs to eligible families for the purchase of a home in the New Chauncey Neighborhood. The Agency does not purchase the property in this program but only facilitates the sale by providing financial assistance to a low to moderate income family who would otherwise be unable to purchase a home.

    1. The sale of the property is a traditional transaction where the client finds a home with or without NCHI's help, makes an offer and obtains a conventional mortgage. Applicants need to be pre-qualified by NCHI for financial assistance prior to making an offer to purchase a home.
    2. The financial assistance is in the form of a forgivable loan for one-half the downpayment and normal closing costs. The downpayment is limited to 20% of the selling price.
    3. The client must obtain a first mortgage and have sufficient funds to cover the remaining portion of the downpayment. Lower income families with limited funds but not less than the required minimum of $1,000 may apply and upon Board approval obtain a loan for the remainder of the downpayment. The loan at 6% interest must be repaid within five years and is separate from the forgivable loan. The second loan is factored in the client's total housing costs.

Rehabilitation Loan Program

Through this program current low to moderate income homeowners may obtain low interest loans to rehabilitate their homes. The purpose of the program is to provide affordable rehabilitation opportunities for lower income homeowners allowing them to maintain or increase energy conservation of their homes. Program has emphasis on elderly and disabled households allowing them to remain in their homes and remain self-sufficient. Allowing people to remain in their homes further increases stability in the neighborhood. Rehabilitation projects are limited to code compliance and/or energy conservation projects. The property upon completion of the rehabilitation must meet the West Lafayette Housing-Property Maintenance Code.

    1. Clients must own the property to be rehabilitated.
    2. Loans of up to $25,000 at 3% interest with terms of up to15 years may be obtained. The final form of assistance is dependent upon the client's financial status and if they are elderly or if they are disabled. Loans can be as follows:
    1. Straight repayable loan at 3% interest for a term not exceeding 15 years.
    2. Deferred repayable loan at 3% interest with the payment of principal deferred for 5 years with the term not exceeding 15 years. Interest is to be paid for the deferral period.
    3. Balloon repayable loan at 3% with balloon repayment at the end of 5 years. Payment of principal and interest for the five year period with loan term written for 15 years.
    4. Forgivable loan.

For all programs

A) Client Eligibility

  1. The applicant's household income cannot exceed the HUD income limits for a moderate income family. The upper limit is 80% of the Area Median Family Income adjusted for family size. Currently, the household income for a family of four cannot exceed $47,900. The income limits are periodically changed by HUD.
  2. The applicant must have at least $1,000 available to apply towards the purchase of the home. (Acquisition/Rehab and Homebuyer's Assistance Programs)

B) Investment Security/Mortgage

All Programs require that the financial assistance be in the form of a promissory note secured by a mortgage.

    1. For forgivable loans the mortgage will be written for 15. Included in the mortgages will be the provision that if the property is sold, rented, or transfered within the first 10 years of the mortgage term, the total amount of assistance will have to be repaid. The amount that would have to be repaid is reduced by 10% over the remaining years of the mortgage.
    2. All other mortgages include a similar provision regarding repayment of the remaining amortized amount if the property is sold, transfered or rented.
    3. The ability to repay all or a portion of the loan will be determined by the New Chauncey Housing Incorporated Executive Board. The Board's decision will depend upon the eligible family's current income levels for straight repayable loans and the eligible family's potential of increased income in the future for the deferred and balloon payment loans. The possibility of the repayment of loans apply to families at the higher moderate income levels and families with probable changes in employment or marital status.
    4. Families obtaining repayable loans may request Board review of income, employment and marital status during the life of the loan to determine the applicability of the loan.

C) New Chauncey Housing Incorporated programs must comply with all Community Development Block Grant and all other federal program regulations as applicable.

D) New Chauncey Housing Incorporated is a subrecipient of the City of West Lafayette and must comply with all local regulations and policies as outlined in the subrecipient agreement.

E) New Chauncey Housing Incorporated is an equal housing opportunity provider.

Amendments to the program policies, procedures and criteria are to be approved by the majority of the Executive Board and are to have written approval by the City of West Lafayette Department of Development.

Exceptions to program purchase, rehabilitation or gap financing limitations due to extenuating circumstances or situations that promote NCHI's missions or promotes a benefit to a low to moderate income family that otherwise would not be able to receive the benefit are to be documented by the Executive Director, approved by the Executive Board and approved in writing by the City of West Lafayette Department of Development.