A resolution approving a proposed Second Amendment and Modification Agreement between the City and County of Denver and Habitat for Humanity of Metro Denver, Inc. to amend and modify the terms and conditions of the loan to support the construction of 32 units of affordable for-sale houses located at 43rd & Elizabeth in Globeville-Elyria Swansea. Amends a loan agreement with Habitat for Humanity of Metro Denver to align requirements with Habitat’s new 90-year covenant, as well as allowing subsequent sales to households at or below 100% Area Median Income (AMI) immediately, not after 21 years, and adding an exhibit describing long term compliance requirements for funds that were used for land acquisition and hard construction costs to develop 32 homeownership units located at 43rd and Elizabeth Street in Council District 9. No change to agreement amount (OEDEV-201736287-02). The last regularly scheduled Council meeting within the 30-day review period is on 3-9-20. The Committee approved filing this item at its meeting on 2-5-20.
And how do we define a family? The we define the family as a parent and a child. And where will these ones be located? At the Lambert Center on Federal. Awesome. Thank you. That's all the questions I had on that one. All right. Thank you, Councilmember. I believe the next one is yours as well. Madam Secretary, if you please put 94 on our screens and go ahead with your questions on this one. Thank you. Anybody here to answer questions about Habitat? Jennifer SIEGEL, housing development officer with host. Thank you so much. I have a question about the the switch on this one from the 20 waiting 21 years before an affordable unit is sold into changing it immediately. Why is that change happening? The change. That's happening is that subsequent sales. In the current covenant that's being changed. Subsequent sales were. To households at or below 80% AMI through 21. Years of the covenant. And then they could go. Up to 100%. Ami in the current covenant, the covenant length. Will be increased to 90. Years from 60 years. However, the change. That will be made is that subsequent sales. Meaning when a current. Home buyer wants to sell their unit, that unit could. Be sold to households at 100% AMI immediately. So the current owner who's living there would be able to sell their house to a household at, at or below 100%. AMI Why are we making that change? We've been working closely with Habitat two to craft a 90 year covenant length in it from 60 years to 90 years. And to have a covenant. That works for nearly all of their properties because they've had different covenants on different properties. And we wanted a. Consistent covenant. And there's other changes in that covenant that. Make it. Easier for Habitat to repurchase the House. In most cases. Nearly all cases. Habitat repurchases of the House and then resells that house to a household at or below. 80% of a. Mine. But that provision that allows a resale to a household up to 100% am I would be if habitat did not exercise their right to repurchase and the homeowner would would resell the house. But in. Cases nearly all cases. On habitat repurchase the house, it is resold to a household at 80% EMI. How many? What is the percentage of recaptures by habitat when an owner wants to sell? I have Maria. Sepulveda here from Habitat. She might be able to answer. Sure. Hi, Maria Sepulveda with Habitat for Humanity of Metro Denver. And just to finish part of that first question, I think you're asking why 100% and what we found in the current market, you know, at 80%, AMI, we are able to make sure that families that live in habitat, whole households are not cost burden. So they're not paying more than 30% of their income on their housing costs. And part of that is made possible because we provide a below market mortgage. Now, if they were to resell and for some reason Habitat didn't buy under its 90 year repurchase rights, it enables that seller to be able to sell it 100% because most likely that person who buys that home will not be able to find a mortgage that's, you know, probably double the amount that the habitat mortgage would be. And that would make it very difficult for an 80% AMI person to be household to be able to purchase it. That 100% makes it possible for our habitat homeowners to actually sell them, you know, in a in a market where they're going to have to the buyer's going to have to have a higher mortgage rate. So that makes sense. It does. And it's concerning because these these are across the alley from my house. And so we can build these up, sell them, and then within two years, a homeowner could sell it at essentially market rate or 100% of the am. I know so. And I think just to add a point to that, so the family that would be purchasing it would be limited to 100%. Am I so today 90 to 8, right. For a family of four. But the price will be limited. We have a schedule attached to this covenant that limits price appreciation year over year by 2% so that you can't. One of the challenges before was that in our current market, we've seen market values. These homes swing up so high that then Habitat, for example, wouldn't be able to purchase it and resell it at an affordable rate . This makes sure that the price is not skyrocketing and making it unaffordable for the next family. So it's unlikely, you know, for someone who might I know probably part of what you're thinking is, you know, an investor, would you really want to buy something that you can't get the full appreciation on because it's capped year over year ? And so what percent of buybacks does happen? That, too, when a owner wants to sell their house, do you guys buy 90% of them back? And resell them. I don't have the specific number. It's a very high percentage and most certainly where we can control for the price because that would be the thing that would be the main thing that would stand in the way of us. Re purchasing the property would be that the price was so high we wouldn't be able to meet our mission of making that homeownership affordable. So with this tool in place, I'm sure it'll be a higher rate, right? Because the price will be kept affordable. Okay. Thank you. You welcome. Councilmember, can I you in at one point, did you get your question answered? Yeah, I think so. I mean, let me just. Yes, mostly, but I will just actually add one. Thank you, Mr. President. So, Maria, we're talking I would say it's actually not even 80% of most habitat buyers are. Can you just clarify the typical am I level for a family? Yeah. So for habitat, households are typical. Thank you. Our typical homeowners are around more of the 60, 40 to 60, 60% depending on the size of the home. Am I level? And just to clarify, when I had spoken with Heather Lafferty, the director, and I had asked, you know, what had Habitat failed to repurchase and resell her home to a qualified buyer recently? I thought the answer was no. Now, I don't know that that's 100% I don't know how far back that went, but it is not. Is there an occurrence you're aware of of habitat failing to purchase a home?