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

HEMAP’s Enduring Impact in Pennsylvania 2019 Housing Forum Come Together May 9, 2019

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 Policy Solutions PolicyMap Investing

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 Pennsylvania and US Unemployment Rate (NSA); 1976 - 2019 14.0 HEMAP Launched 12.0 10.0 Unemployment Rate HEMAP Closed 8.0 HEMAP Restarted 6.0 4.0 2.0 0.0 Month / Year Unemployment Rate, PA Unemployment Rate, US

The income of owner occupied households is now rising Median Household Income for Owner Occupied Households, 2007-2017 $80,000 $70,000 $60,000 Median Owner HH Income $50,000 $40,000 $30,000 $20,000 $10,000 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Year US Median HH Income PA Median HH Income

Owner occupancy has trended down with a minor recent uptick (nationally) Percent Owner Occupied Households, 2007-2017 74.0% 72.0% 70.0% Percent Owner Occupied 68.0% 66.0% 64.0% 62.0% 60.0% 58.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Year PA Percent Owner Occupants US Percent Owner Occupants

Conventional loan levels are down from pre-recession peaks Percent Conventional of Purchase / Refinance Home Mortgages, 2007-2017 100.0% 90.0% 80.0% 70.0% Percent Conventional 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Year 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 Volume of HEMAP Applications and Approvals; 2013-2018 8,000 3.00 7,539 7,000 Pct Conventional Loans 90+ Days Delinquent 2.50 6,000 5,180 2.00 5,000 HEMAP Volume 3,969 4,000 1.50 3,182 3,097 3,000 2,633 1.00 2,000 1,064 0.50 1,000 710 487 440 370 311 0 0.00 2013 2014 2015 2016 2017 2018 Year Applications Originations Conv 90+ Days Delinq

Foreclosures affect homeowners, lenders, government and neighbors of those in foreclosure Areas of Financial Impact of Mortgage Foreclosures, 2018 Local Gov't $22,998.23 Neighbors 24.7% $1,803.78 1.9% Homeowners $8,612.23 9.2% Lenders $59,807.13 64.2% Homeowners Lenders Local Gov't Neighbors

Over six years, HEMAP saved the Commonwealth nearly $300 million Cumulative Financial Savings Attributable to HEMAP Approvals; 2013-2018 $350,000,000 $299,334,286 $300,000,000 $258,316,883 $250,000,000 Cumulative Financial Impact $224,471,481 $196,610,651 $200,000,000 $153,869,642 $150,000,000 $92,008,570 $100,000,000 $50,000,000 $- 2013 2014 2015 2016 2017 2018 Year

Impact of HEMAP – PA, Monroe, Pittsburgh & Philadelphia

Beyond the $300 million, the Commonwealth’s foreclosure rate would be higher without HEMAP Foreclosure Rate and Adjusted Foreclosure Rate Were it Not for HEMAP, 2013-2018 3.50 3.00 2.50 Foreclosure Rate 2.00 1.50 1.00 0.50 0.00 2013 2014 2015 2016 2017 2018 Year Foreclosure Rate Foreclosure Rate Without HEMAP

Reinvestment Fund Policy Solutions Team 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