Agenda - Council Work Session - 01/28/2014

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Area Median Income for a family of four Minneapolis -St. Paul Metropolitan Statistical Area U.S. Department of Housing and Urban Development 2013 2012 2011 Area median income $82,300 $83,900 $82,700 60% of area median income $49,400 $50,340 $49,600 30% of area median income $24,700 $25,170 $24,800 Applying an interest rate on a 30-year fixed-rate home loan of 3.25 percent for 2013 and other payment factors1 to the 60 percent of area median income amount adjusted for a family of four ($49,400), yields an affordable purchase price of $177,500 in 2013. This compares to a 2011 limit of $160,250 and a 2012 limit of $171,500. Record low mortgage interest rates offered by Minnesota Housing are driving the expanded income limit for 2013 despite the decrease in the area median income. To implement the Livable Communities Act in 2013, the Metropolitan Council will use as the upper limit of affordability for ownership purchase price and monthly rents, the following dollar amounts: 2013 HOMEOWNERSHIP Household Income Level: Affordable Home Price 60% of area median income ($49,400) $177,500 30% of area median income ($24,700) $80,500 2013 RENTAL HOUSING Bedroom size: Monthly gross rent including tenant -paid utilities, affordable at 30 percent of area median income Monthly gross rent including tenant -paid utilities, affordable at 50 percent of area median income Monthly gross rent including tenant -paid utilities, affordable at 60 percent of area median income Efficiency $432 $721 $865 1 bedroom $463 $772 $927 2 bedrooms $555 $926 $1,111 3 bedrooms $642 $1,070 $1,284 4 bedrooms $716 $1,193 $1,432 1 Assumes a 29 percent housing debt to household income ratio, 3.5 percent downpayment, a property tax rate of 1.25 percent of property sales price, mortgage insurance at 1.15 percent of unpaid principal, and $100 / month for hazard insurance.