VANCITY SPRINGBOARD HOMEOWNERSHIP PROGRAM INTRODUCTION

1
Affordable Homeownership Springboard Mortgage
model
Presented at CHRA Annual Congress Elisabeth
GellerManager, Community Leadership Vancity
Credit Union April 4, 2008
2
Agenda

• Vancity Credit Union
• Vancitys Community Leadership Strategy
• The Challenge
• Springboard Our response
• Looking forward Shared Equity
• Contact information

3
Vancity Credit Union
4
Community Leadership at Vancity
Acting on Climate Change By reducing our impact
and promoting solutions to climate change

Facing Poverty By building economic
self-reliance, improving access to financial
services, affordable housing home ownership
Growing the Social Economy By strengthening
non-profits, social enterprises and investing in
targeted communities
Being Accountable The systems that hold us
accountable to living up to our commitments.
5
Community Leadership at Vancity

• Tools we use
• Specialized products and services
• Community investments (grants, loans groans)
• Purchasing power
• Convening power
• Advocacy (direct indirect)

6
The Challenge

• Highest residential prices in Canada
• Purpose-built rentals at a virtual standstill
• Highest incidence of working poor in urban Canada
• Non-Profit Housing
• 3-5 year wait lists for affordable housing
• Over 6,600 people on waitlist in Lower Mainland,
  8,000 province-wide
• Provincial focus on supported housing for seniors
  etc.

7
Our Response Springboard Program

• Reduces wait times for affordable housing
• Moves people from rental to ownership
• Provides 100 financing, structured to be
  affordable
• Ensures people are adequately prepared for home
  ownership
• Helps low and moderate income people develop an
  asset / equity

8
Springboard Program

• 20 down payment loan, interest free and payable
  over 10 years
• 80 10-year fixed rate mortgage, payable over 35
  years
• After 10 years, owner negotiates a conventional
  mortgage
• Both loan and mortgage cannot exceed 300,000

9
Springboard Program

• To qualify
• Must be living in subsidized housing
• Have verifiable income
• No undischarged bankruptcies
• Have paid rent on time, every time for at least
  two years
• Complete a one-day homeownership readiness
  course, offered in partnership with MCC
• We dont check credit ratings
• We dont review debt ratios
• We dont restrict based on age

10
Springboard Program
11
Springboard Program Results

• 3.2MM in sales in 18 months
• 16 mortgages sold, 48 pre-approved
• 20 non-profit units vacated and available
• Homes purchased are 160 - 280,000 range
• Participants are largely single mothers
• Tend to buy close to current housing
• Sells well in Fraser Valley tri-cities

12
Shared Equity 1

• Owner Occupier
• Portional ownership (of 25, 50 or 75 equity
  share)
• Gets a Vancity mortgage for their ownership share

• Non-Profit Housing Society or Developer
• Holds the balance of the portional ownership (of
  75, 50 or 25 equity share)
• Retains ownership of their portion and uses
  capital from owner occupier purchase to build
  additional units.

13
Shared Equity 2

• Owner Occupier
• Portional ownership (of 25, 50 or 75 equity
  share)
• Gets a Vancity mortgage for their ownership
  share

• Owner Investor
• Portional ownership (of 75, 50 or 25 equity
  share)
• Investors purchase an equity share paying a
  guaranteed (variable??) rate of return

14
Contact information

• Elisabeth Geller
• Manager. Community Leadership
• 604-877-7402
• elisabeth_geller_at_vancity.com
• Njeri (Jeri) Kontulahti
• Senior Community Leadership Associate
• 604-709-5868
• njeri_kontulahti_at_vancity.com