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FINAL 2018 Housing & Community Development Action Plan
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FINAL 2018 Housing & Community Development Action Plan
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6/13/2018 10:05:46 AM
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6/13/2018 10:00:42 AM
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City Council - City Clerk
City Counci - Date
6/12/2018
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The resale policy is enforced through the use of a deed restriction signed by the homebuyer <br /> at closing. The deed restriction will specify: <br /> 1. The length of the affordability period; <br /> 2. That the home remain the buyer's principal residence throughout the affordability <br /> ' period; and <br /> 3. The conditions and obligations of the owner should the owner wish to sell before the end <br /> of the affordability period, including: <br /> ' a. The owner must contact the developer if intending to sell the home prior to the <br /> end of the affordability period; <br /> b. The subsequent purchaser must be at or below 80% of current South Bend- <br /> Mishawaka AMI and occupy the home as his/her primary residence for the <br /> iremaining years of the affordability period; and <br /> c. The sales price must be affordable to the subsequent purchaser. "Affordable" is <br /> defined as limiting the principal, interest, taxes and insurance (PITI) amount to <br /> ' no more than 30% of the new purchaser's gross monthly income. <br /> The Consortium will ensure that the owner receives a fair return on his/her investment and <br /> that the home will continue to be affordable. "Fair return on investment" is defined as total <br /> ' homeowner investment, which is the total cash contribution plus approved capital <br /> improvements as described below: <br /> ' 1. The amount of the down payment; <br /> 2. The cost of capital improvements, documented with receipts provided by.the. <br /> homeowner, including but not limited to: <br /> ' a. Any additions to the home such as a bedroom, bathroom or garage; <br /> b. Replacement of heating, ventilation and air conditioning systems; <br /> c. Accessibility improvements such as bathroom .modifications for disabled or <br /> elderly; installation of wheel chair ramps and grab bars, any and all of which <br /> must have been paid for directly by the owner and which were not installed <br /> through .a federal, state or local-funded grant program; and <br /> d. Outdoor improvements such as a new driveway, walkway, retaining wall or fence, <br /> ' Note: All capital improvements will be visually inspected to verify their existence, <br /> After inspection, the PJ will determine if the improvements qualify as capital <br /> improvements for the purpose of"Fair Return on Investment". <br /> 3. The percentage of change as calculated by the Housing Price Index (HPI) Calculator of <br /> ' the Federal Housing Finance Agency. The HPI Calculator can be found at <br /> http•//www fhfa gov/DataTools/Tools/Pages/HPI-Calculator.aspx and projects what a <br /> house purchased.at a point in time would be worth today if it appreciated at the average <br /> ' appreciation rate of all homes in the area. The calculation will be performed for the <br /> South Bend-Mishawaka Metropolitan Statistical Area (MSA). <br /> The Consortium will ensure continued affordability to a range of buyers whose total <br /> household income does not exceed 80% AMI for the South Bend-Mishawaka MSA. Sale <br /> prices will be set such that the amount of principal, interest, taxes and insurance does not <br /> exceed 30% of the new buyer's annual income, yet provides a fair return on investment to <br /> ' the original buyer. <br /> Note: In certain circumstances, such as a declining housing market where home values are <br /> depreciating, the original homebuyer may not receive a return on his/her investment <br /> because the home sells for less or the same price as the original purchase price. <br />
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