Economic Impact of Oregon Hardest Hit Mortgage Payment Assistance Program Will be a LOT Bigger than Most Realize.

$100 Million in Mortgage Payments for 5,000 Winning Families Will Produce:

1. The Equivalent of 5,000 jobs@ $20,000 Per Year,
2. The Salary Equivalent of $332 Million, 
3. $10 Million in Local Property Taxes.

• On the surface, the 5,000 slots for the Oregon Hardest Hit Unemployed Mortgage Payment Assistance Program will produce the equivalent of 5,000 jobs paying $20,000 per year @113% of the 2011 Oregon minimum wage of $8.50 per hour. (Actual pay equivalent is higher IF Mortgage Assistance Program payments are tax free to the recipient).
• Another way of looking at that would be that the $20,000 per year available for mortgage payments is the equivalent of a job with salary costs of $64,516 since the standard underwriting ratio would have the family paying 31% of their income for mortgage payments.
• Using this second method the $100 million in mortgage payments would be equivalent to $332 MILLION in salaries. ($100 million/31%=$322,580,645).
• Assuming the average property tax expense for the 5,000 winning families is $2,000 per year, the property tax portion of the $100 million in mortgage payments would total $10 MILLION. (The actual amount could be greater than the $10 million if property taxes in arrears are an eligible expense).
  

And.. An Estimated 85 FTE Jobs Will be Created for Intermediaries and OHSI, Using an Estimated $5.8 Million in Admin Expenses.

The table below shows that intermediaries likely will be able to devote 70 FTE's to the tasks of initial application processing and ongoing monitoring. If Oregon Homeownership Stabilization Initiative (OHSI) staff processing of applications and monitoring of intermediary work and program development add another 15 FTE, the total number of FTE for Intermediaries and OHSI would be 85.

NOTE that if eligible applications received exceed the 10,000 used for this estimate, total intermediary FTE will go UP from the 70 estimated here. FTE would also go up if total cost per staff hour is less than the $40 I used.

Total Cost Per Staff Hour	$           40
Annual TOTAL Staffing Cost	$    83,200
Initial $$ Per Eligible Application	$           80
$$ for Monitoring	$      1,000
Estimated Applications	10,000
Slots	5,000
Payments for Application Processing	$800,000
Payment for Monitoring	$5,000,000
Total Payments	$5,800,000
FTE Supported by Application Payments	9.62
FTE Supported by  On Going Monitoring	60.10
Total FTE Supported by Admin Fees	69.71

Originally created and posted on the Oregon Housing Blog.