Fannie Mae to Subsidize Affordable Housing in St. Johns County

Once the loan is finalized midsummer, St. Johns County will begin using $2 million from Fannie Mae to help developers build work force housing.

“It’s a $2 million line of credit for construction loans, and it can’t be used for anything else,” said Tom Crawford, director of the county’s housing and community services division. “It’s simply a below-market construction loan to help provide additional incentive to work with us” in areas in need of affordable Florida housing.

Several areas, including West Augustine, Flagler Estates and the town of Hastings, are considered redevelopment areas and need affordable housing, Crawford said. The county will give builders loans for homes worth $150,000 and less.

“Initially, we will concentrate on West Augustine,” he said. “This is just another tool to help us produce work force housing.”

County commissioners have approved the loan program, but the loan itself has not closed. Fannie Mae spokesman John Searles said the Florida mortgage lender could not comment until it does, which should be in late June.

The loan is through Fannie Mae’s Community Express program, which mostly provides short-term loans to local governments. Fannie Mae has closed more than $180 million in Community Express loans since launching the program in 2000.

St. Johns will have a four-year Florida mortgage loan and may seek an extension if officials believe it is still needed. The county will use the standard guidelines laid out in the State Housing Initiative Partnership Program.

Standard guidelines
Established in 1992, the SHIP program offers downpayment assistance to very low, low and moderate income households. “We are using those [SHIP] guidelines for the sale price limits on housing,” Crawford said.

This type of affordable housing is intended to entice builders, but also to encourage first-time home buyers.

“One of the big problems is finding homes that first-time homeowners qualify for,” said Randy Brunson, president of the St. Johns Builders Council. “The majority of builders know there’s not much profit margin in these types of homes. This [loan program] is mainly geared to give incentives to builders to build these types of homes.”

St. Johns County lacks affordable housing. It was one of 11 counties in the state’s Community Workforce Housing Innovation Pilot Program, which is a $50 million program to encourage innovative, public-private partnerships that create affordable housing.

More than 30 counties applied for the program, but St. Johns was approved in large part because of its West Augustine area.

The last time the county did a study to measure the need for affordable housing was in 2001, when county leaders found a shortage of several thousand units for Florida mortgage applicants from lower-income brackets - and that number was expected to increase, Crawford said.

“In terms of demand on lower- and moderate-income home buyers, I think there is quite a bit of it within that range,” he said.

The idea for such a program has been in the works for a short while, he said. “We’ve been looking at and talking about a program like this for about a year and a half.”

Brunson said he considers the new loan program to be a good way to spur more affordable housing in the county, considering the low profit generated from building startup homes.

With the program having just been approved by county commissioners May 15, builders have not yet given Brunson much feedback on the matter. He plans to approach builders who might be interested in the program and give them information about the approval process required.

“I anticipate that we might have eight to 10 builders participate in this program,” he said.

The program will start slowly, Crawford said, with 18 homes being built in the first year. Eventually he expects to average 36 homes per year.