OHFA Annual Plan - Ohio Housing Finance Agency

Best Practices, Policies and ProgramsOhio Department of Development: Community Housing Investment Program(CHIP):Homeownership:General InformationThe State of Ohio, through the Community Housing Improvement Program administered bythe Office of Housing & Community Partnership and local small cities and counties, providesHOME funds to create affordable homeownership. Typically aimed at first time buyersof existing single-family homes, the Homeownership model provides for DownpaymentAssistance coupled with rehabilitation loans. Buyers below 80 percent of median incomeborrow from private lenders (or from Rural Development’s 502 loan program) for a firstmortgage, with CHIP funds provided as a “soft” second. Sub-grantees devise appropriatefinance mechanisms, with a minimum of 15 percent recovered as deferred loans.Housing Rehabilitation and Repair:General InformationThe State of Ohio, through the Community Housing Improvement Program administered bythe Office of Housing & Community Partnership and local small cities and counties, providesHOME and CDBG funds to help preserve affordable homeownership. Owner-occupants mayqualify to receive rehabilitation loans with which to address substandard conditions in majorsystems such as heating, roofing, foundations, electrical and plumbing, thereby eliminatingthreats to structural integrity and/or serious safety risks. Local sub-grantees design financemechanisms that typically blend deferred and forgivable loans with no monthly paymentsand no interest. The Home Repair activity provides CDBG or Ohio Housing Trust Fund grantsto owners to address one substandard or unsafe system.Recommendations for Annual Plan Advisory Board1. Individual Development AccountsIndividual Development Account (IDA) programs can help households who are not able toqualify for a mortgage due to weak credit history or limited income or changing underwritingstandards, by encouraging savings for down payment while the household gains financialliteracy and improves their credit. Ohio should expand Individual Development Accountprograms by supporting increases in federal funding, promoting the concept with employersand philanthropic organizations, and exploring the potential to expand matched savingsresources through an Ohio State Income Tax or other public resources.2. Lease Purchase ProgramsFormer homeowners who have experienced recent foreclosure or bankruptcy would benefitfrom short term lease purchase programs while they re-establish their credit and save fora down payment. Such programs would also keep people in homes that might otherwisebecome or remain vacant. A portion of rent paid would be applied to down paymentprovided the individual participates in a financial literacy plan and follows it in order tocorrect whatever credit issue they may have.3. Financial LiteracyOHFA and other agencies administering housing programs should help connect consumerswith financial literacy resources such as those offered by the Ohio Treasurer (Your MoneyNow), the FDIC (Money Smart), HUD and many other partners through links on its website.54