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ARTICLE 8 (d) Project: LexHAB Set-Aside for Housing Acquisition CPA Category: Community Housing Amount Requested: $450,000 Amount Recommended: $450,000 CPC Vote: (8-1) Project Description: This request is made by LexHAB for $450,000 in set-aside funds for the acquisition and/or creation of affordable housing units in Lexington as opportunities arise, rather than seeking funding after a property has already been identified. The units which LexHAB acquires or builds will be subject to specific standards (listed on the following page) agreed upon among LexHAB, the CPC and the Board of Selectmen. The units will receive affordable housing deed restrictions, and will become part of the Town’s Subsidized Housing Inventory (SHI). Project Goals and Objectives: The goal of this project is to streamline the process by which LexHAB acquires and creates affordable housing units and receives State approval for them. Project Benefit: At present, LexHAB identifies a property, makes a downpayment and obtains a mortgage from a bank to purchase the unit. LexHAB then applies to the CPC in November for an appropriation to retire the mortgage, and waits until spring Town Meeting for approval of the funding. If approved, the funding becomes available July 1, but by this time, LexHAB may have been “carrying” the property for several months. The average time between borrowing the funds and completing the purchase is ten months, and the average mortgage interest accrued during this lag time is $16,000. In addition, since tenants cannot move in until the deed restrictions are approved and recorded, there is typically $4,000 lost in rental income to LexHAB (average rent being $400 per month). The existing process, with its two closings, results in higher than necessary legal fees as well. By being granted “up-front” CPA funding, LexHAB will be able to move promptly to purchase properties and avoid costly and duplicative closings and legal fees.It will be able to bring affordable units “online” in a cost-effective and timely manner and make them available as quickly as possible to the long list of applicants waiting for affordable housing in Lexington. Funding Request: The FY 12 funding request for this project is $450,000. Funds which are not expended in a given year may be carried over and used for affordable housing acquisitions the following year. 10