FINAL 2018 Housing & Community Development Action Plan

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The resale policy is enforced through the use of a deed restriction signed by the homebuyer at closing. The deed restriction will specify: 1. The length of the affordability period; 2. That the home remain the buyer's principal residence throughout the affordability ' period; and 3. The conditions and obligations of the owner should the owner wish to sell before the end of the affordability period, including: ' a. The owner must contact the developer if intending to sell the home prior to the end of the affordability period; b. The subsequent purchaser must be at or below 80% of current South Bend- Mishawaka AMI and occupy the home as his/her primary residence for the iremaining years of the affordability period; and c. The sales price must be affordable to the subsequent purchaser. "Affordable" is defined as limiting the principal, interest, taxes and insurance (PITI) amount to ' no more than 30% of the new purchaser's gross monthly income. The Consortium will ensure that the owner receives a fair return on his/her investment and that the home will continue to be affordable. "Fair return on investment" is defined as total ' homeowner investment, which is the total cash contribution plus approved capital improvements as described below: ' 1. The amount of the down payment; 2. The cost of capital improvements, documented with receipts provided by.the. homeowner, including but not limited to: ' a. Any additions to the home such as a bedroom, bathroom or garage; b. Replacement of heating, ventilation and air conditioning systems; c. Accessibility improvements such as bathroom .modifications for disabled or elderly; installation of wheel chair ramps and grab bars, any and all of which must have been paid for directly by the owner and which were not installed through .a federal, state or local-funded grant program; and d. Outdoor improvements such as a new driveway, walkway, retaining wall or fence, ' Note: All capital improvements will be visually inspected to verify their existence, After inspection, the PJ will determine if the improvements qualify as capital improvements for the purpose of"Fair Return on Investment". 3. The percentage of change as calculated by the Housing Price Index (HPI) Calculator of ' the Federal Housing Finance Agency. The HPI Calculator can be found at http•//www fhfa gov/DataTools/Tools/Pages/HPI-Calculator.aspx and projects what a house purchased.at a point in time would be worth today if it appreciated at the average ' appreciation rate of all homes in the area. The calculation will be performed for the South Bend-Mishawaka Metropolitan Statistical Area (MSA). The Consortium will ensure continued affordability to a range of buyers whose total household income does not exceed 80% AMI for the South Bend-Mishawaka MSA. Sale prices will be set such that the amount of principal, interest, taxes and insurance does not exceed 30% of the new buyer's annual income, yet provides a fair return on investment to ' the original buyer. Note: In certain circumstances, such as a declining housing market where home values are depreciating, the original homebuyer may not receive a return on his/her investment because the home sells for less or the same price as the original purchase price.