HEMAPs Enduring Impact in Pennsylvania 2019 Housing Forum Come - - PowerPoint PPT Presentation

2019 Housing Forum Come Together

May 9, 2019

HEMAP’s Enduring Impact in Pennsylvania

About Reinvestment Fund

• We are a national mission-driven financial institution that creates opportunity for

underserved people and places through partnerships. We marshal the capital, analytics, and expertise necessary to build strong, healthy, and more equitable communities.

• Since 1985, Reinvestment Fund has made $2.2 billion in cumulative investments

and loans.

• We are supported by 880 investors that include individuals, foundations, religious

institutions, financial institutions, civic organizations and government.

• How we work:

Lending and Investing Policy Solutions PolicyMap

Our Childcare Mission

Our experience:

25 years $30+ million

Our scope:

• Philadelphia
• Newark
• Passaic County
• Atlanta
• Washington, DC

Purpose of this Analysis

This analysis estimates the financial impact of PHFA’s Homeowners’ Emergency Mortgage Assistance Program (HEMAP) – for the Commonwealth’s homeowners, lenders, municipalities and neighbors – through saving homes from going to foreclosure. In 2011 Reinvestment Fund analyzed data from 2008-2010 – a period during which the Commonwealth and nation struggled with the recession and housing/mortgage market meltdown. For that three-year period, we estimated the aggregate savings to be $480 million.

Pennsylvania’s Housing, Mortgage and Labor Market Since Restarting HEMAP

Unemployment is significantly down from peak recession levels

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Unemployment Rate Month / Year

Pennsylvania and US Unemployment Rate (NSA); 1976 - 2019

Unemployment Rate, PA Unemployment Rate, US

HEMAP Launched HEMAP Closed HEMAP Restarted

The income of owner occupied households is now rising

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Median Owner HH Income Year Median Household Income for Owner Occupied Households, 2007-2017 US Median HH Income PA Median HH Income

Owner occupancy has trended down with a minor recent uptick (nationally)

58.0% 60.0% 62.0% 64.0% 66.0% 68.0% 70.0% 72.0% 74.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Percent Owner Occupied Year Percent Owner Occupied Households, 2007-2017 PA Percent Owner Occupants US Percent Owner Occupants

Conventional loan levels are down from pre-recession peaks

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Percent Conventional Year Percent Conventional of Purchase / Refinance Home Mortgages, 2007-2017 US % Conventional PA % Conventional

Conventional loans dominate the market, but not evenly across the Commonwealth, 2014-2015

Conventional loans dominate the market, but not evenly across the Commonwealth, 2016-2017

The Financial Impact of PHFA’s HEMAP

As the conventional delinquency rate declined, so too did HEMAP applications and originations

7,539 5,180 3,969 3,182 3,097 2,633 1,064 710 487 311 370 440

0.00 0.50 1.00 1.50 2.00 2.50 3.00 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2013 2014 2015 2016 2017 2018 Pct Conventional Loans 90+ Days Delinquent HEMAP Volume Year Volume of HEMAP Applications and Approvals; 2013-2018 Applications Originations Conv 90+ Days Delinq

Foreclosures affect homeowners, lenders, government and neighbors of those in foreclosure

Homeowners $8,612.23 9.2% Lenders $59,807.13 64.2% Local Gov't $22,998.23 24.7% Neighbors $1,803.78 1.9%

Areas of Financial Impact of Mortgage Foreclosures, 2018

Homeowners Lenders Local Gov't Neighbors

Over six years, HEMAP saved the Commonwealth nearly $300 million

$92,008,570 $153,869,642 $196,610,651 $224,471,481 $258,316,883 $299,334,286 $- $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 $350,000,000 2013 2014 2015 2016 2017 2018 Cumulative Financial Impact Year

Cumulative Financial Savings Attributable to HEMAP Approvals; 2013-2018

Impact of HEMAP – PA, Monroe, Pittsburgh & Philadelphia

Beyond the $300 million, the Commonwealth’s foreclosure rate would be higher without HEMAP

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 2013 2014 2015 2016 2017 2018 Foreclosure Rate Year Foreclosure Rate and Adjusted Foreclosure Rate Were it Not for HEMAP, 2013-2018 Foreclosure Rate Foreclosure Rate Without HEMAP

Ira Goldstein, President, Policy Solutions Reinvestment Fund

ira.Goldstein@reinvestment.com

Colin Weidig, Senior Policy Analyst

colin.weidig@reinvestment.com

Alana Kim, Research Analyst

alana.kim@reinvestment.com

Reinvestment Fund Policy Solutions Team