Background of the Housing Development Fund
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About Housing Development Fund
Creatively Funding Affordable Housing & Encouraging Homeownership

Some Background on Affordable Housing
Affordable housing is a topic being increasingly discussed and debated in communities around the New York metropolitan area and other high-cost housing markets across the United States. It is also a topic about which there is a widespread lack of understanding among many individuals, employers, developers and public officials.

At the core of this issue are the facts that many:

• People who work in a town – for example police, firefighters, teachers, hospital workers, postal employees - can’t afford to live there and must often commute hours daily to their jobs.
• Children who have grown up in a community cannot afford to raise their own families in their hometowns.
• Seniors who have spent lives contributing to the fabric of life in a town must leave it when they retire.
• People living in public housing are solidly employed and can move into homeownership with the right assistance.

Skeptics complain about the ‘costs’ of developing affordable housing but, were it tallied up, the costs to municipalities of the lack of a nearby workforce, the loss of their highly educated youth and the wisdom and community knowledge of their seniors constitute the true costs of not addressing this issue. Among other misconceptions, the naysayers are concerned that affordable housing ‘attracts large, low-income families that put a burden on schools and services’. According to the Housing Development Fund, a unique nonprofit bank that advocates for affordable housing and provides first time home buyers with down payment and closing cost assistance, statistics do not bear this out. The average size of the hundreds of families it has helped into homeownership is 2.3 people – smaller than the average family size of 2.6 people (U.S. Census Report) in Fairfield County, Conn., where HDF operates.

Information is sorely needed about who affordable housing serves, whether or not the buyers pay property taxes (they do), the financial and other criteria that qualified prospects for affordable housing must meet, how an initiative to add affordable units can make a positive community impact and other factors.

Adding affordable housing units in upscale urban and suburban markets requires not only a persistent educational effort, but also a great deal of fiscal creativity and the participation and cooperation of public and private entities. Developers need incentives or sometimes mandates to build affordable developments or to include below-market-rate units in market rate developments. Municipalities need expertise and assistance to craft and manage affordable housing initiatives. Most of all, qualified homebuyers need help closing the gap between what they have saved and what they need for down payment and closing costs.

Housing Development Fund
In southwestern Connecticut, which encompasses the wealthy suburbs and several cities of Fairfield County and environs, the Housing Development Fund (HDF), is succeeding in contributing to all of these endeavors and making a significant difference for hundreds of first time homebuyers. HDF provides a myriad of financial products, programs and services designed to:

• Create and manage public/private partnerships to encourage affordable housing development and homeownership.
• Help private individuals and professional developers build and/or renovate multi-unit dwellings for affordable housing units by providing acquisition, planning and construction financing at below market interest rates.
• Identify, qualify, counsel and put together low-interest or no-interest down payment and closing cost assistance for first time homebuyers.
• Introduce first time homebuyers to commercial banks who serve as lending partners, providing fixed rate first mortgages that marry with HDF funding layers.
• Provide first time homebuyers with ongoing support and post purchase education on home maintenance, alternatives to refinancing, avoiding predatory lending practices and other information that contributes to successful homeownership and asset management.
• Offer municipalities and their housing authorities technical assistance with creating and managing affordable housing strategies and initiatives.
• Help real estate developers identify qualified buyers for below-market-rate units and put together the purchase financing for these units.
• Offer expertise to commercial banks and other funders on leveraging funding they provide for affordable housing and homebuyer assistance.

Founded in Stamford, Connecticut in 1989 as a local agency, HDF now serves all of southwestern Connecticut. The organization has helped 470 households to become homeowners by leveraging $75.4 million in private sector financing and loaning a total of $6 million in subsidies for down payment and closing costs. In addition, HDF has financed 38 multi-family developments, which have resulted in 554 rental units for nearly 1400 people. The organization has achieved this by leveraging nearly $35.5 million in private sector subsidies for these developments and lending an additional $8.5 million in subsidies – making it the largest nonprofit funding affordable housing in the state.

Behind these HDF statistics is a professional staff and volunteer board of directors – bankers, developers, municipal officials – with a passionate commitment to finding creative and flexible ways to expand affordable housing options in their communities. All take a personal interest in helping the individuals and families who seek assistance from HDF.

“We want to shine a spotlight on the real faces of those who are seeking affordable housing,” said HDF Executive Director Joan Carty. “They work hard and earn good, steady incomes - though not enough to readily purchase in high-priced markets. Some, as first time buyers, need help to understand the importance of good credit and how to establish it, and need to learn how to budget to save more for a down payment. We ultimately help all of our buyers to make their way through the finance and home purchase process. All share the dream of owning a home – the American Dream – and it’s a privilege to help them achieve it.”

The HDF process begins with an initial 30-minute orientation session where applicants provide the information necessary to assess their qualifications as homebuyers and to get the ball rolling. Homebuyer income criteria vary depending upon the program, but most require that buyers earn no more than a certain percentage of the median income for the area.

HDF is a HUD-certified lender and counselor and provides the homebuyer education and one-on-one counseling required to qualify for homebuyer assistance programs. Once potential homebuyers are qualified and have completed the educational requirements, HDF helps put together the financing package required to purchase either a house or condo selected on the open market or a below market rate unit available from HDF developer or municipal partners. HDF staff members are available to explain the steps to buying a home and can introduce buyers to reliable attorneys, home inspection services and other professionals required for a smooth and informed home purchase. After the purchase, HDF still remains available to new homeowners as they face the ongoing challenges of maintenance, condo boards and other responsibilities of homeownership.

For those who want to buy and renovate multi-family homes, HDF provides below-market-rate financing, as well as interim assistance during the architectural and planning phase, and construction financing for improvements. This is a difficult financial package to find on the open market, particularly for developers without a prior track record. HDF is able to provide this funding by pooling resources from a number of banks and public funding sources in order to spread the risk.

HDF works with a number of municipalities, including Stamford, Danbury and Greenwich, to help them identify qualified homebuyers for below market rate housing and homebuyer assistance programs, as well as to help manage the distribution of their affordable housing funds. The group has also developed innovative programs to facilitate affordable housing and homeownership for special needs populations including the elderly, transitional, public housing residents, mentally ill and previously incarcerated.

The organization has branded a number of its homebuyer assistance programs including: SmartMove low-interest second mortgages up to 20 percent of the purchase price; its First Time Home Buyer Program (formerly known as Adopt-A-House), providing down payment and closing cost assistance; and Homeward Bound, a program to move families from public housing into homeownership.

HDF programs are funded and supported through: its partnerships with 17 private banks; municipalities; government entities including Connecticut Housing Finance Authority (CHFA), State of Conn. Department of Economic and Community Development (DECD), the United States Treasury Department Community Development Financial Institutions Fund (CDFI); private developers, other nonprofit agencies, corporations, foundations, the faith-based community and individual donors. It maintains membership in the Housing Partnership Network and the Opportunity Finance Network.

The organization and its staff have been recognized with numerous awards for achievements in the affordable housing arena. Executive Director Joan Carty serves on the advisory board of the Federal Home Loan Bank of Boston’s New England Advisory Council and other influential boards and committees. She is a noted expert and frequent speaker on financing of affordable housing and encouragement of homeownership.

The Housing Development Fund has its headquarters at 100 Prospect Street, South Tower Plaza, SP-101, Stamford, Connecticut 06901-1696. In 2004, HDF opened an office in Danbury to serve the upper Fairfield County region. Additional information is available at www.hdf-ct.org.