[yrhasc] FW: Long Island affordable housing questions

Mon Jan 7 17:43:01 EST 2008

Hello YRHASC,

At your last meeting, you discussed some uncertainties about requiring
pre-approval for a mortgage of your applicants.  Mark and I got thinking
about this and tried to dig up some more information.

I wrote to Joanne Campbell, who runs Camden's affordable housing
program, and also works on housing-related issues for Camden National
Bank.  I asked for ideas she had about how to use pre-qualifications and
pre-approvals to assess candidates.  

Below, you can read my email to her and her response.  Also, attached is
sample of the form the Camden housing folks use to gather financial
information about their potential clients.

Hope it's helpful.  I will pass on more information as I find it.

Best,

Alden

________________________________________________

Alden S. Robinson

Island Institute Fellow

Town of Long Island, Maine

(207) 766-2336

arobinson at islandinstitute.org

________________________________

From: Joanne Campbell [mailto:JCampbell at camdennational.com] 
Sent: Sunday, January 06, 2008 9:02 AM
To: Alden Robinson
Subject: RE: Long Island affordable housing questions

Alden,

My apologies for not getting back to you sooner.  Life has been a little
crazy here.

We use the following application for CAHO purposes.  We use these to vet
if the person meets our income criteria. We do require the applicants to
get preapproved before we make any final selections.  You are accurate
in terms of timing so we keep these on file until we have a property
ready, then contact folks, have them get their preapprovals and then
begin to work with them.  You don't want them to be getting preapproved
every year so timing on this is important.

Most banks will prequalify people at no cost to the individual. However,
they are preapproving for what the applicant can afford. If you have
income limitations these are for you to have vetted not the bank.

Every bank does different levels of prequalification or preapproval so
you would need to just ask the applicant to bring back to you in writing
what the bank would prequalify them for.  

I would be happy to talk at some point. I will be traveling on Monday
but back in the office after that.

Joanne

From: Alden Robinson [mailto:arobinson at islandinstitute.org] 
Sent: Friday, January 04, 2008 12:01 PM
To: Joanne Campbell
Subject: Long Island affordable housing questions

Dear Ms. Campbell,

I'm a planning intern with the Town of Long Island (Casco Bay), doing
research for a new affordable housing project.  I believe I met you last
year at the Camden Affordable Housing Conference.  

Over the past year, Long Island's Year-Round Housing Committee has been
developing an affordable housing program based loosely on the Community
Land Trust model.  Under the program, parcels of town-owned land are to
be leased to eligible applicants, who would construct their own
year-round homes on them.  The committee is currently working on
designing the candidate selection process.

Assessing candidates' financial capabilities will be an important part
of the process.  To do this, the committee envisions requiring
applicants to become pre-qualified or pre-approved for mortgages.  We're
trying to learn more about how this would work.

Specifically, we're concerned that simply requiring applicants to get
pre-qualfied for a mortgage might not give us enough information.  We
don't know how much information banks use to pre-qualify people; we also
don't know what sort of a commitment, if any, a bank makes by
pre-qualifying someone.

On the other hand, we're concerned that requiring someone to become
pre-approved for a mortgage would be overkill.  Successful applicants
might have to wait months or years before a suitable piece of land
becomes available, and we're concerned that multiple pre-approvals could
damage their credit scores.  

I left you a voicemail message a little while ago regarding these
questions.  Ultimately, I think we'd like to arrange a meeting with you
or someone else from CNB to learn more, but we want to improve our
background knowledge before doing that.    

If you can spare the time, I'd love to talk to you by phone or email
regarding these questions.  My cell phone is 837-0636; my home phone is
766-2336 (I work at home a good part of the day).  This email address is
also good.

Many thanks in advance for your assistance,

Alden

________________________________________________

Alden S. Robinson

Island Institute Fellow

Town of Long Island, Maine

(207) 766-2336

arobinson at islandinstitute.org

________________________________

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Camden National Corporation thanks you for your cooperation.

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