The URL can be used to link to this page

Home My WebLink AboutIR 8336 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8336 '4 To the Mayor and Members of the City Council June 26, 2001 0XA fg7!3 SUBJECT: HOUSING AFFORDABILITY Over the past several months, staff has had discussions with various City Councilmembers regarding housing development for affordable home ownership as one of the means of redeveloping the central city. Invariably during the discussion, the question is raised as to what is affordable housing. The purpose of this Informal Report is to share definition of affordable homeownership we use. The federal government funds the home ownership programs administered by the City, so we begin with the definition offered by the U. S. Department of Housing and Urban Development (HUD). According to HUD, a house is considered affordable if the total housing cost (principal, interest, insurance and taxes) does not exceed 30% of household income. HUD restricts the use of its funds to develop housing that is affordable to households earning income not to exceed 80% of the area median income (AMI). This amount varies based on the size of the household (see attachment). The two tables shown on the next page illustrate the house price and payment affordable to several different income levels. The first table assumes a 30-year mortgage with an interest rate of 7.5% and the second table assumes an 8.5% interest rate. Both tables assume down payment is 5% of the sales price. In summary, a family of four with incomes at 80% of AMI can afford to spend aboL!t $1,200 per month in housing, and can afford to purchase a houses priced from $129,000 to $142,000 without subsidy, depending on the interest rate. If the interest rate is 8.5%, a family of four with income at 61% of AMI or higher, can purchase a $90,000 house without subsidy. Families with incomes between 55% and 60.9% of AMI can also afford a $90,000 house with homebuyers' subsidy. In order to provide a context for you of what the various income levels in the tables mean to working families in Fort Worth, a list of position titles in the City of Fort Worth with salary levels of $30,780 to $34,140 is included on page three. Families with incomes in this range will require homebuyers' subsidy assistance to purchase a $90,000 house. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8336 AW ter. To the Mayor and Members of the City Council Jame 26, 2001 Page 2 of 3 n t xn x � SUBJECT: HOUSING AFFORDABILITY Affordability Worksheet A (Interest rate = 7.5%) ITEMS 80% of AMI* with Lowest Income Lowest Income No Assistance with No Maximum y - Assistance Assistance Maximum sales price supported by income $ 142,406 $ 90,000 $ 90,000 Down payment (paid by homebuyer) $ 7,120 $ 4,500 $ 1,500 Homebuyers' assistance - Down payment - - $ 3,000 - Soft second mortgage assistance - - $ 12,000 Mortgage amount $ 135,286 $ 85,500 $ 73,500 Monthly housing cost $ 1,202 $ 854 $ 770 Annual Income of homebuyer $ 48,080 $ 34,140 $ 30,780 Homebuyer income as % of AMI 80% 57% 51% Affordability Worksheet B (Interest rate = 8.5%) ITEMS 80% of AMI with Lowest Income Lowest Income 1 No Assistance with No Maximum Assistance Assistance Maximum sales price supported by income $ 129,600 $ 90,000 $ 90,000 Down payment (paid by homebuyer) $ 6,480 $ 4,500 $ 1,500 Homebuyers' assistance - Down payment - - $ 3,000 - Soft second mortgage assistance - - $ 12,000 Mortgage amount $ 123,120 $ 85,500 $ 73,500 Monthly housing cost $ 1,202 $ 913 $ 820 Annual Income of homebuyer $ 48,080 $ 36,506 $ 32,814 Homebuyer income as % of AMI 80% 61% 55% " AMI: Area Median Income. 2001 Income Guidelines for Fort Worth attached. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8336 mar To the Mayor and Members of the City Council June 26, 2001&I�F O� Page 3 of 3 Axa$ SUBJECT: HOUSING AFFORDABILITY Selected City of Fort Worth Entry Level Positions 1. Hearing Officer 20.Planner 2. Animal Control Supervisor 21.Community Counselor 3. Assistant Zoo Curator 22.Information System Technical Support 4. Community Center Supervisor Analyst II 5. Information Systems Supervisor 23. Information System Analyst 1 6. Customer Service Supervisor 24.Utility Rate Analyst 7. Assistant Water System Plant 25.Accounts Payable Supervisor Superintendent 26.Reprographics Tics Coordinator 8. Benefits Specialist 27.Cable Services Super. 9. Human Resources Analyst_ 28.Tech/Paraprofessionals 10.Land Agent 29.Administrative Assistant to City Manager 11.Consumer Health Specialist 30.Construction Inspector 11 12.Conservation Specialist 31. Plans Examiner 13.Environmental Specialist 32.Senior Engineering Technician 14.Microbiologist 33.Equipment Services Crew Leader 15.Historical Curator 34.Traffic System Crew Leader 16.Equipment Technician Specialist 35.Senior Telecommunication Technician 17.Chemist 36.Senior Deputy Marshall 18.Auditor 37.Senior Code Enforcement Officer 19.Risk Management Analyst If you would like additional information, please don't hesitate to contact Jerome Walker, Housing Director. ry W. J c4 son y Manag r ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS CITY OF FORT WORTH HOUSING DEPARTMENT LOW AND VERY-LOW INCOME GUIDELINES 2001 VERY FAMILY MEDIAN VERY-LOW VERY-LOW SIZE INCOME INCOME INCOME LOW-INCOME (30%of Median) (50% of Median) (80% of Median) 1 $42,050 $12,600 $21,050 $33,650 2 $48,050 $14,400 $24,050 $38,450 3 $54,050 $16,250 $27,050 $43,250 4 $60,100 $18,050 $30,050 $48,100 5 $64,950 $19,450 $32,450 $51,950 6 $69,700 $20,901 $34,850 $55,750 7 $74,500 $22,350 $37,250 $59,600 8 $79,300 $23,800 $39,650 $63,450 Income(4/01)