FREQUENTLY ASKED QUESTION FOR HOUSING LOTTERIES
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Rockland, Massachusetts
55+ Purchaser Application - Purchase Price: $172,500
Description of the New Home
An Affordable Townhouse-Style Home consisting of a Kitchen, Dining Area, Living Room, 2 Baths, 2 Bedrooms, Basement, Washer/Dryer Hookups, Closet, Deck, Porch, and Garage
Access to the properties is prohibited during construction based on Builder liability requirements.
INFORMATION SESSION AT THE ROCKLAND COUNCIL ON AGING, 394 UNION ST, ON WEDNESDAY, MARCH18TH AT 6:00 pm to 7:00 pm.
Name ___________________________________ Home Tel. # _______________________
Address__________________________________ Work Tel. #________________________
City __________________________________ Cell Phone #_______________________
State _____ Zip ___________ E-Mail Address______________________________
Social Security # _________________ Number of Persons in Household _______________
HOUSEHOLD MEMBERS:
Please list ALL household members regardless of age who will occupy the affordable home:
Birth Relationship
Name Age Date Gender SS# to Applicant
[above] [Self]
________________________________________________
___________________________________________________________________________
To be considered as a local resident, one or both of the boxes must be checked. Proof of preference must be provided at time of application such as copy of license, tax bill, utility bill, census listing, birth certificate, pay stubs, letter from employer, etc.
❑ Employed in Rockland
❑ Present residents of Rockland
❑ Have you owned a home or joint interest in a home in the past three (3) years? Yes __________ No__________
If yes, please include a copy of the HUD Settlement Sheet.
❑ Are you a displaced homemaker*_______yes _____no
❑ Are you a single parent* _______yes _____no
❑ Household 55 years +* _______yes _____no
*Please refer to the definition in Frequent Asked Questions of the Lottery Packet.
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EMPLOYMENT STATUS
Please provide all income information for all household members over the age of 18 (except for full time students) listed on the application. Household income includes but not limited to gross wages, retirement income (if drawing on it for income), business income, veterans benefits, alimony/child support, unemployment compensation, social security, pension/disability income, supplemental second income and dividend income.
Applicant’s Name: _________________________________________________
Occupation: _________________________________________________
Employer/Contact Information:
Name:_____________________ Address:________________________________________
Phone:____________________ Email:___________________________________________
Date of Hire:________________
Hourly Wage:_________ Avg. Hours per week:_________ Total Weekly Amnt:_________
Annualize Weekly Salary______________ (Avg. Salary for the Last 4 wks x 52)
Other Income
Interest & Dividends______________ Veterans Benefits__________
Alimony/Child Support____________ Other____________________
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Co-Applicant’s Name: __________________________________________________
Occupation: __________________________________________________
Employer/Contact Information:
Name:_____________________Address:__________________________________________
Phone:____________________ Email:____________________________________________
Date of Hire:________________
Hourly Wage_________ Avg. Hours per week:_________ Total Weekly Amnt:___________
Annualize Weekly Salary______________ (Avg. Salary for the Last 4 wks x 52)
Other Income
Interest & Dividends______________ Veterans Benefits__________
Alimony/Child Support____________ Other____________________
If Applicant or Co-Applicant has more than one (1) job or other adult household members are employed, please attach a separate sheet with second job employment information.
In addition to the above, please attach all income documentation including:
• Five most recent pay stubs
• Social security documentation
• Pension documentation
• Tax returns &W-2’s for the last 3 years
• Child Support/Alimony documentation
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ASSETS
Include but not limited to stocks, bonds, retirement accounts such as 401K, Keogh, etc. For a comprehensive explanation, please refer to the section titled “Frequently Asked Questions”.
APPLICANT:
NAME ON ACCOUNT: _____________________________________________
BANK NAME: _____________________________________________
BANK ADDRESS: _____________________________________________
SAVINGS: _____________________________________________
CHECKING: _____________________________________________
(Attach a copy of last 3 months activity for both checking and savings accounts)
MONETARY GIFT: _____________________________________________
(Attach a letter from the giver, indicating the source of funds and no repayment is expected.)
STOCK/BONDS: _____________________________________________
(Attach a copy last three Stocks and Bonds Investment Portfolio Statements)
TOTAL ASSETS: _____________________________________________
CO-APPLICANT:
NAME ON ACCOUNT: _____________________________________________
BANK NAME: _____________________________________________
BANK ADDRESS: _____________________________________________
SAVINGS: _____________________________________________
CHECKING: _____________________________________________
(Attach a copy of last 3 months activity for both checking and savings accounts)
MONETARY GIFT: _____________________________________________
(Attach a letter from the giver, indicating the source of funds and no repayment is expected.)
STOCK/BONDS: _____________________________________________
(Attach a copy last three Stocks and Bonds Investment Portfolio Statements)
TOTAL ASSETS: _____________________________________________
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HOME BUYER CERTIFICATION
I/We certify that our household is _______ persons; and that our household income does not exceed the income limits provided in the Lottery Information Packet; and that our household is able to provide the minimum down payment required.
I/We have attached as required a pre-approval (not a pre-qualification) letter from a lender; and
I/We certify that I/we have read the Home Buyer Disclosure Statements and understand the purchaser obligation thereunder or shall seek legal or other counsel for further explanation.
I/We hereby authorize the Lottery and Monitoring Agents to inquire of credit agencies, employer, banking institutions and lending institutions to allow and assist them to determine my/our determination of eligibility of an affordable home. In addition, we hereby authorize any lender, Mortgage Company or mortgage broker to whom we apply for a mortgage in conjunction with our application to release any and all information regarding our loan application. This authorization includes all mortgage application information provided to the lender including, but not limited to credit reports, other loan applications, assets, employer information, etc.
I/We certify that we comply with the maximum asset limitations of $75,000 in liquid assets. In addition to qualified Real Estate Equity of $200,000 for applicants over the age of 55.
I/We certify that South Shore Housing, the Managing Member, Lottery Director or any other employee shall not be held liable for any decisions made pertaining to the applicants’ eligibility or their application.
Information missing from the application, including, but not limited to the following could be considered an incomplete application, thus being ineligible for the lottery.
• Lender pre-approval letter (not pre-qualification)
• Income documentation (as indicated on checklist)
I/we certify that no member of our family has a financial interest in this development.
I/We have completed an application and have reviewed and understand the process that will be utilized to distribute the available homes here. I/We am qualified based upon the program guidelines and agree to comply with applicable regulations.
I/We certify that the information in this application and in support of this application is true and correct to the best of my/our knowledge and belief under full penalty of perjury. I/We understand that perjury will result in disqualification from further consideration.
___________________________________ ____________________
APPLICANT SIGNATURE DATE
___________________________________ ____________________
CO-APPLICANT SIGNATURE DATE
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HOMEBUYER DISCLOSURE STATEMENT
For Projects in Which Affordability Restrictions Survive Foreclosure
You, the potential Homebuyer, have expressed an interest in, or are about to purchase a home at less than the home’s fair market value. Program guidelines require that the home be sold to a buyer who meets the above income and asset limitations (“Eligible Purchaser”). In exchange for the opportunity to purchase the home at less than its fair market value, you must agree to certain use and transfer restrictions. These restrictions are described in detail in an Affordable Housing Restriction that will be attached to the deed to your home (the “Restriction”).
This Homebuyer Disclosure Statement summarizes the restrictions and requirements imposed by the Deed Restriction. YOU SHOULD READ THE RESTRICTION IN ITS ENTIRETY BECAUSE IT IMPOSES LEGAL REQUIREMENTS.
I. Principal Residence: You and your household must occupy and use the home you purchase exclusively as your primary residence during the period the home is owned by you.
II. Required Consents from the Monitoring Agent You must obtain the prior written consent of the “Monitoring Agent” before you do any of the following:
a. Lease or rent the home; Refinance any loan secured by a mortgage on the home;
b. Grant any other mortgage (such as a home equity loan mortgage) or other encumbrance (such as an easement) on the home; and/or
c. Make any Capital Improvements (defined in Section III below) to the home, if you wish to get credit for those costs (at a discounted rate) when you sell your home.
The Restriction may require that a resale fee be paid to the Monitoring Agent for its work in any resale of the home, as described below. Although not stated in the Restriction, the Lottery Agent may assess a reasonable fee for reviewing any request for its consent. Currently, this fee will not exceed $75 per request.
III. Resale Requirements
If you decide to sell your home, you may not sell the home for more than what you paid for it, with limited adjustments. You are also required to give written notice to the Monitoring Agent of your desire to sell so they may locate an Eligible Purchaser for the home.
The allowed sale price is defined in the Restriction as the “Maximum Resale Price.” The “Maximum Resale Price” is calculated by adjusting the purchase price you paid for the home to reflect any increase in the area median income from the time you purchased the home to the time of the proposed resale, and adding (a) the amount of any applicable Resale Fee payable to the Monitoring Agent, (b) any necessary marketing fees (including broker’s fee) approved by the Monitoring Agent, and (c) the costs of any Capital Improvements to the home that were approved by the Monitoring Agent (discounted over their useful life). The “Resale Fee” payable to the Monitoring Agent for its work is listed in the Restriction. “Capital Improvements” are extraordinary improvements of a capital nature (for example, a new roof or a new septic system) that must be documented and commercially reasonable. Capital Improvements are intended to cover replacement of necessary capital items and are not intended to cover discretionary upgrades. The Maximum Resale Price will never be more than the amount for which an Eligible Purchaser earning 70% of the area median income could obtain mortgage financing, as calculated by the Monitoring Agent, and will never be less than the purchase price you paid (unless you accept a lower price).
The Monitoring Agent will determine the Maximum Resale Price that you are allowed to receive on your sale of the home based on the formula set forth in the Restriction, and will begin marketing efforts to locate an Eligible Purchaser to buy the home. The Monitoring Agent is responsible for selecting the Eligible Purchaser who will buy the home. Alternatively, the Monitoring Agent or the Municipality may purchase the home (or have a party they designate purchase the home). Any sale to an Eligible Purchaser or to the Monitoring Agent or the Municipality (or their designee) under this option to purchase will be for the Maximum Resale Price, and the home will be sold subject to a Restriction in the same form as the Restriction you were required to sign.
The Monitoring Agent and Municipality will have up to 90 days after you give them notice of your intention to sell the home to close on a sale to an Eligible Purchaser. This time period can be extended as provided in the Restriction to arrange for details of closing, to locate a subsequent purchaser if the first selected purchaser is unable to obtain financing or for lack of cooperation on your part.
Any sale by you to an Eligible Purchaser, or to the Monitoring Agent or the Municipality (or their designee) or to an ineligible purchaser, as described above, is subject to customary terms for a property conveyance, which are set forth in the Restriction. There is no commitment or guarantee that an Eligible Purchaser, the Monitoring Agent or the Municipality will purchase the home, or that you will receive the Maximum Resale Price (or any other price) for your sale of the home to an ineligible purchaser.
A sale or transfer of the home will not be valid unless (1) the total value of all payments and anything else delivered by the purchaser does not exceed the Maximum Resale Price, and (2) the Monitoring Agent has signed and recorded in the Registry a Compliance Certificate that confirms the sale or transfer was made in compliance with the requirements of the Restriction. If you attempt to sell or transfer the home without complying with the Restriction requirements, the Monitoring Agent and the Municipality may, among their other rights, void any contract for such sale or the sale itself, seek money damages for the costs to construct or obtain a comparable home for an Eligible Purchaser, or locate an Eligible Purchaser or exercise their purchase option to buy the home.
IV. Foreclosure
The Restriction also gives the Municipality an option to purchase the home (or to designate another party to purchase the home) for a period of 120 days after the holder of a mortgage delivers notice to the Monitoring Agent and the Municipality that it intends to commence foreclosure proceedings. If this foreclosure purchase option is exercised, the purchase price will be the greater of (i) the amount of the outstanding balance of the loan secured by mortgage, plus the outstanding balance of the loans secured by any mortgages senior in priority, up to the Maximum Resale Price as of the date the mortgage was granted, plus any future advances, accrued interest and/or reasonable costs and expenses that the mortgage holder is entitled to recover, or (ii) the Maximum Resale Price at the time of the foreclosure purchase option, except that in this case the Maximum Resale Price may be less than the purchase price you paid. By signing the Restriction, you are agreeing that this foreclosure purchase option granted to the Municipality takes precedence over any statutory rights of redemption and that you will cooperate in executing the deed and other required closing documents.
If the foreclosure purchase option has not been exercised within 120 days of delivery of the foreclosure notice to the Monitoring Agent, the mortgage holder may conduct a foreclosure sale. The mortgage holder or an ineligible purchaser may purchase the home at the foreclosure sale, subject to a Restriction. If the sale price at the foreclosure sale is greater than the purchase price that would have applied for the foreclosure purchase option, as described above, the excess will be paid to the Municipality, for its Affordable Housing Fund. By signing the Restriction, you are agreeing to assign any rights and interest you may otherwise have in the balance of any foreclosure proceeds available after satisfaction of all obligations to the holder of the foreclosing mortgagee, for delivery to the Municipality.
The Restriction provisions regarding a sale of the home after delivery of a foreclosure notice take precedence over your rights to sell the property, even if you deliver notice of your intention to sell the home before the mortgage holder delivers the foreclosure notice. There is no commitment or guarantee that the Municipality will exercise the foreclosure purchase option, or that you will receive the Maximum Resale Price (or any other price) in any foreclosure sale of the home. In addition, the foreclosing lender retains the right to pursue a deficiency against you.
V. Violation of Restriction Requirements
If you violate any of the Restriction terms, you will be in default and the Monitoring Agent and Municipality may exercise the remedies set forth in the Restriction. If the Monitoring Agent and/or the Municipality brings an enforcement action against you and prevails, you will be responsible for all fees and expenses (including legal fees) for the Monitoring Agent and Municipality. The Monitoring Agent and Municipality can assert a lien against the home to secure your obligation to pay those fees and expenses.
VI. Special Rules for Ineligible Purchasers
If you do not qualify as an Eligible Purchaser at the time of purchase, you do not need to occupy the home as your principal residence. However, you must obtain the consent of the Monitoring Agent to rent the home. The rules for rental by an ineligible purchaser are governed by MassHousing Housing Starts Program Guidelines. In general, you may rent only to a tenant who would qualify as an Eligible Purchaser at a rent level deemed affordable according to MassHousing rental standards. You should contact the Monitoring Agent for further details prior to renting your home.
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VII. Acknowledgements
By signing below, I certify that I have read this Homebuyer Disclosure Statement and understand the benefits and restrictions described. I further certify that I have read the Restriction and understand the legal obligations that I undertake by signing that document.
Dated ________________, 2009
____________________________ ______________________
Homebuyer Witness
____________________________ ______________________
Homebuyer Witness
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APPLICATION CHECKLIST
Your application may not be considered complete without the following documents. Incomplete or ineligible applications will not be entered into the lottery.
❑ Completed and signed application
❑ All income documentation including five most recent pay stubs, entire tax returns and W-2’s for the last 3 years, and any additional income documentation such as but not limited to social security, pension, alimony and child support income
❑ All asset information including the last 3 checking and savings account bank statements, evidence of the value of CDs, brokerage statements, etc.
❑ A pre-approval (not pre-qualification) letter from a bank or mortgage company indicating your household qualifies for a mortgage large enough to purchase a home.
❑ Signed Homebuyer Disclosure Statement
❑ Narrative stating each applicant’s work history for last 2 years (attach to application)
❑ Documentation to be considered within the Local Preference group
All applications must be received no later than Friday, April 24, 2009, Noon, as below. Late applications will not be considered - NO EXCEPTIONS.
EXAMPLES OF MAXIMUM RESALE PRICE CALCULATION
Example 1: Assume you have a household of four, and you closed on the purchase of a home in June, 2006 for a purchase price of $100,000, and that the Restriction provides for a 2% resale fee. Assume also that in the first year of ownership, for medical reasons you replaced the carpet in a bedroom with hardwood flooring at a cost of $2,500, and that the Lottery Agent approved such capital improvement cost and determined the appropriate discount is $250/year for 10 years. Assume further that you elect to sell your home in September, 2014, and that the Lottery Agent has determined the necessary marketing fees, including broker’s fees, are $8,000. Finally, assume that at the time you purchased the home, the most recently published area median income for a four-person household in the Municipality was $50,000, and at the time of resale, the most recently published area median income for a four-person household in the Municipality is $58,000; and that, at the time of the proposed resale, the maximum amount for which an Eligible Purchaser earning 70% of the area median income, adjusted for household size, could obtain mortgage financing is $135,000. The Lottery Agent would calculate the Maximum Resale Price as follows:
|Adjustment to owner’s purchase price, based on change in area median |($58,000 X $100,000/$50,000) = | |
|income: | |$116,000 |
|Adjustments for: | | |
|Resale fee and approved marketing expenses (including broker’s fee): |(2% x $116,000) = $2,320 + $8,000 = | |
| | |$ 10,320 |
|Approved capital improvements: |($2,500 - $2,000) = |$ 500 |
|Maximum Resale Price: | |$126,820 |
Example 2: Assume the same facts as Example 1, except assume that, at the time of the proposed resale, the maximum amount for which an Eligible Purchaser earning 70% of the area median income, adjusted for household size, could obtain mortgage financing is $120,000. In this scenario, the Maximum Resale Price would be $120,000.
Example 3: Assume the same facts as Example 1, except assume that at the time of resale, the area median income for a four-person household in the Municipality has decreased to $40,000. The Lottery Agent would calculate the Maximum Resale Price as follows:
|Adjustment to owner’s purchase price, based on change in area median income: |($40,000 X $100,000/$50,000) = | |
| | |$ 80,000 |
|Adjustments for: | | |
|Resale fee and approved marketing expenses (including broker’s fee): |(2% x $116,000) = $2,320 + $8,000 = | |
| | |$ 10,320 |
|Approved capital improvements: |($2,500 - $2,000) = |$ 500 |
| | |$ 90,820 |
|Maximum Resale Price: | |$100,000 |
In this scenario, the Maximum Resale Price would be the owner’s purchase price, or $100,000.
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FREQUENTLY ASKED QUESTION FOR HOUSING LOTTERIES
GENERAL QUESTIONS:
Q: Who is eligible to apply for Affordable Homes?
A: Applicants must be first-time homebuyers. A person is a “first-time home buyer” if no person in his or her household has, within the preceding three years, owned a home or owned an interest in a home with one or more people, such as through joint ownership with the exception of:
“DISPLACED HOMEMAKERS”(where the displaced homemaker (an adult who has not worked full-time, full-year in the labor force for a number of years but has, during such years, worked primarily without pay to care for the home and family), while a homemaker, owned a home with his or her partner or resided in a home owned by the partner);
“SINGLE PARENTS” (where the individual owned a home with his or her partner or resided in a home owned by the partner and is a single parent (is unmarried or legally separated from a spouse and either has 1 or more children of whom the individual has custody or joint custody, or is pregnant);
Q: MAXIMUM INCOME
A: Maximum allowable household total income by household size cannot exceed:
|Household Size |2 |3 |4 |
| Maximum Income |$52,950 |$59,550 |$66,150 |
Q: MAXIMUM ASSETS
A: Definition of Assets
The value of necessary items of personal property, such as furniture or automobiles shall be excluded. Determination of assets shall be based upon a full and fair present cash value of the asset at the time of application to the program. If a potential purchaser divests himself or herself of an asset for less than full and fair present cash value of the asset within one year prior to application, the full and fair cash value of the asset at the time of its disposition must be declared and shall be included for purposes of calculating eligibility.
Household Assets include the following:
1. Cash held in savings and checking accounts, safe deposit boxes, homes, etc: For savings accounts, use the current balance. For checking accounts, use the average balance for the last six months. Assets held in foreign countries are considered assets.
2. Revocable trusts: The cash value of any revocable trust available to the applicant.
3. Equity in rental property or other capital investments: The current fair market value less (a) any unpaid balance on any loans secured by the property and (b) reasonable costs that would be incurred in selling the asset (e.g., penalties, broker fees, etc.).
4. Stocks, bonds, Treasury bills, certificates of deposit, mutual funds, and money market accounts: The value of stocks and other assets vary from day to day and should be determined within a reasonable time in advance of the applicant’s submission of an application to participate in the housing program.
5. Individual retirement, 401K, and Keogh accounts: When the holder has access to the funds, even though a penalty may be assessed. If the applicant is making occasional withdrawals from the account, determine the amount of the asset by using the average balance for the previous six months. (Do not count withdrawals as income.)
6. Retirement and pension funds: a) While the person is employed: Amounts the applicant can withdraw without retiring or terminating employment. Count the whole amount less any penalties or transaction costs. b) At retirement, termination of employment, or withdrawal: Periodic receipts from pension and retirement funds are counted as income. Lump-sum receipts from pension and retirement funds are counted as assets. Count the amount as an asset or as income, as provided below. If benefits will be received in a lump sum, include the lump-sum receipt in net household assets. If benefits will be received through periodic payments, include the benefits in annual income. Do not count any remaining amounts in the account as an asset.
If the applicant initially receives a lump-sum benefit followed by periodic payments, count the lump-sum benefit as an asset as provided in the example below and treat the periodic payment as income. In subsequent years, count only the periodic payment as income. Do not count the remaining amount as an asset.
NOTE: This paragraph assumes that the lump-sum receipt is a one-time receipt and that it does not represent delayed periodic payments. However, in situations in which a lump-sum payment does represent delayed periodic payments, then the amount would be considered as income and not an asset.
7. Cash value of life insurance policies available to the applicant before death (e.g., the surrender value of a whole life policy or a universal life policy): It would not include a value for term insurance, which has no cash value to the applicant before death.
8. Personal property held as an investment: Gems, jewelry, coin collections, or antique cars held as an investment. Personal jewelry is NOT considered an asset.
9. Lump-sum receipts or one-time receipts: Inheritances, capital gains, one-time lottery winnings, victim’s restitution, settlements on insurance claims (including health and accident insurance, worker’s compensation, and personal or property losses), and any other amounts that are not intended as periodic payments.
10. A mortgage or deed of trust held by an applicant: Payments on this type of asset are often received as one combined payment of principal and interest with the interest portion counted as income from the asset. This combined figure needs to be separated into the principal and interest portions of the payment. (Refer to an amortization schedule that relates to the specific term and interest rate of the mortgage.) To count the actual income for this asset, use the interest portion due, based on the amortization schedule, for the 12-month period following the certification. To count the imputed income for this asset, determine the asset value at the end of the 12-month period following the certification.
Household Assets DO NOT include the following:
• Personal property (clothing, furniture, cars, wedding ring, other jewelry that is not held as an investment, vehicles specially equipped for persons with disabilities).
• Interests in Indian trust land.
• Term life insurance policies (i.e., where there is no cash value).
• Equity in the cooperative home in which the applicant lives.
• Assets that are part of an active business: "Business" does NOT include rental of properties that are held as investments unless such properties are the applicant’s main occupation.
• Assets that are NOT effectively owned by the applicant: Assets are not effectively owned when they are held in an individual's name, but (a) the assets and any income they earn accrue to the benefit of someone else who is not the applicant, and (b) that other person is responsible for income taxes incurred on income generated by the assets.
Q: What constitutes a household?
A: A household is the number of persons living in the home regardless of marital status.
Gross income from all household members over the age of 18 (except for full time students) shall be considered in determining compliance with income eligibility requirements.
Q. I am expecting a child - do I add the child to our household size?
A: Please provide information with the application on the due date of the child and we will determine if the child can be included in the household size.
Q: Our total Gross Income including an unusual bonus rendered our income higher than the guidelines. Are we automatically disqualified?
A: On a case by case basis a determination will be made by the Consultant. If the bonus, overtime pay, or compensation is not customary, you could still qualify.
Q: What are the minimum income requirements?
A: To qualify for a mortgage the total annual household income as determined by the lender, must adequate to support the requested mortgage amount. The lender will use a “Housing Debt Ratio” of housing expense to include principal, interest, mortgage insurance, real estate taxes and home owner’s insurance and a “Total Debt Ratio” including housing and all other debts. The precise ratios and minimum income requirements will vary for each applicant according to the terms of the loan, the amount of the down payment, the interest rate, and other factors.
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LOTTERY PROCESS:
Q. Why is there a Lottery?
A: The Lottery selection process is for use in the typical situation where the number of affordable applicants exceeds the number of affordable homes.
Q. Where can I get answers to questions I might have about the process?
A: A Public Workshop will take place at the Rockland Council on Aging, 394 Union St., Wednesday, March 18 at 6:00 p.m. We and representatives of lending institutions may be available to answer any questions about the eligibility requirements, priorities for selection and the lottery process. We strongly urge all interested parties to attend.
All applications must be received no later than Friday, April 24, 2009 at Noon by:
South Shore Housing
169 Summer Street
Kingston, MA 02364
Attention: Housing Lottery
Late and/or incomplete applications will not be entered into the lottery!
All applicants will be notified of their lottery status on or about May 8, 2009.
May 20, 2009: the Lottery will take place at 7:00 P.M. at a location to be announced.
It is anticipated that affordable homes will be available for occupancy starting June, 2009.
Q. How is the Lottery conducted?
A: Only complete applications will be entered into the lottery. Each applicant shall be assigned a confirmation code once all required information is received. Those confirmation codes are placed in each lottery pool in which they qualify.
Q. I “won” the lottery; do I automatically get a home?
A: Because you rank high in the lottery process does not mean that you automatically “win” a home. It means that you have won the opportunity, not the obligation to purchase a home. You must still meet all program eligibility requirements and will need to receive a financing commitment to purchase the property. If you meet the eligibility requirements but are unable to secure financing you will lose the opportunity to purchase the home.
Q. I did not receive a high ranking in the lottery process. Will I be able to purchase a home?
A: Many times there is a movement on the ranking list. Applicants who received a high lottery ranking may have withdrawn their application or may not be able to obtain a financing commitment or decided not to go forward for a variety of reason. From time to time applicants can inquire of changes to the lottery list.
Q. After the initial Lottery, what is the process of selecting an affordable buyer, should the number of applications be less than the number of affordable homes.
A: Applications will be received on a “Rolling Basis” and homes will be given to qualified applicants on a first come first serve basis.
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FINANCING:
Q: Do I need to attend homebuyer education classes?
A: All financing programs offered by “MassHousing” and the Massachusetts Housing Partnership” and any down payment or closing costs programs require the borrower to complete a pre-purchase homebuyer education course. These courses can be found at under “Homeownership”.
Q. Do we need to get a pre-approval from a lender?
A: Yes. Applicants are required to submit a pre-approval letter (not a pre-qualifying letter) with the application. A preapproval letter says the lender will provide the buyer with a mortgage of $X, subject to housing and total debt ratios, work history and other criteria.
Households should demonstrate availability of sufficient funds for a down payment, closing costs and prepaid costs such as taxes. For down payment and closing costs programs, refer to uploads/resources/softsecond_community_downpay_assist.pdf
Q. How or where do I apply for a mortgage?
A: We have a variety of lending sources that are familiar with the qualifying process to purchase the affordable homes. We are willing to share these references with all, however, other lenders and mortgage brokers may participate in this process.
There are many programs available for First Time Home Buyers including those offered by the MassHousing such as “My Community”. We suggest you or your lender refer to the MassHousing website .
There are also programs being offered by the Massachusetts Housing Partnership (MHP) such as the “MHP Soft Second Program” which is offered to buyers typically at a rate of 1% less than a lenders typical best rate to a conventional buyer. We suggest that you contact a lender on the list of participants as shown on the MHP website .
Some of the program requirements are:
1. That the mortgage be a fixed rate for a long term typical 25 to 30 years;
2. Household members can not be co-signers on the mortgage;
3. Buyer is responsible for all down payments and closing cost;
Q. How or much of a down payment will I need?
A: Many programs are being offered with a minimum down payment between 3-5% of the purchase price of which 1.5% must be from the buyers own funds the balance can be obtained by gift or from down payment and closing cost assistance programs. In addition to the down payment the buyer will also need closing costs and prepaid expenses.
Q. Are there restrictions on my home upon resale or refinancing?
A: Yes, the intention of the Affordable Housing Programs is to give persons the opportunity to purchase homes at reduced prices that otherwise may not qualify for a conventional purchase. As an example if you purchase a home in Brockton for $164,000 there is a possibility that home could be worth as much as $300,000 on the open market, however, you would not be able to sell the home at a market rate price and pocket the difference.
If you choose to sell your home or refinance there is a limit on the resale price or refinancing amount which is determined by the Deed Rider. Upon resale or refinance you must notify the community and the Monitoring Agent in accordance with the requirements in the Deed Rider. The Monitoring Agent will determine the Maximum Resale or refinancing amount. Typically the sales price is determined by the resale multiplier on your Deed Rider as an example an initial 3 bedroom home priced at $188,200 and the current median income adjusted for family size is $85,800 the resale multiplier would be $188,200/ $85,800 = 2.19.
In addition, the resale fee as indicated in the Deed Rider would be added to the Maximum Resale Price along with improvements of the home that had been approved by the Monitoring Agent.
Q. I do not fully understand the conditions of the Deed Rider.
A: As part of applications package we have included a summary of the Deed Rider explaining some of its key components. In addition, you may log onto CHAPA for a complete typical Deed Rider.
If you still have questions and our office is unable to answer those questions to your satisfaction we urge that you seek legal counsel.
The Deed Rider is a critical legal document explaining your responsibility regarding re-sale, re-finance and household improvements.
Q. Can you provide names and contacts for some bankers for a mortgage?
A: As part of applications package we have included this list of bankers, however you are free to go with any financial institution that will provide a “conventional, fixed-rate loan” as described above and accept the terms of the Deed Rider/Affordable Housing Restriction.
Participating Lenders will approve only 30 year fixed rate mortgages with 5% down payment. Participating lenders include but are not limited to:
Norwood Coop. Bank, 11 Central St, Norwood, MA 02062
Tracy Robbins (781) 440-4238
Sovereign Bank, 533 Washington St., Abington, MA 02351
Charleen Corcoran (781) 982-7926
Harbor One Credit Union, 770 Oak St., Brockton 02301
Nato Fonseca (508) 895-1169
Crescent Credit Union, 1300 Belmont St., Brockton 02303
Donald Schemnitz (508) 269-4058
Rockland Trust Company, 100 Belmont St., Brockton 02301
Steven Borgerson (781) 982-6599
North Easton Savings Bank, P.O. Box 299, North Easton 02356
Kammi Azevedo (508) 238-2007 ext 2084
The Community Bank, 1265 Belmont St., Brockton, MA 02301
John Whitaker (508) 631-2169 or (800) 457-2043 ext. 3888
FIRST-TIME HOMEBUYER CLASSES
|Quincy C.A.P.-Quincy / So.Shr.Housing-Hanover / So.Shr.N.H.S. |
|March 7 and 14 |March 23,24,&28,Hanover 6:00-8:00 p.m., W & |March 10 & 12, 5 to 9 pm at 120 Liberty St., |
|9:00 a.m. - 2:00 p.m. |T; |Brockton or |
|1509 Hancock St. #4 |10:00 a.m. Sat |March 31 6-8, & April 4 9-4 at |
|Quincy, MA 02169 |Linda Trinkaus |490 Turnpike St., Canton |
|617-479-8181 x319 Free |781-422-4251 $25/household |Debbie Edgerly |
| | |617-770-2227 x1 $15 each |
These agencies will have other classes. Call the contacts or go to:
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