Agenda 06-18-19 Item 8-v - Proposed Changes to the Long-Term Housing Affordability Policy

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17 (2)Life estate. The person who has the life estate has the right to live in the housing for the remainder of his or her life and does not pay rent.The participating jurisdiction may assist the person holding the life estate if the person is low-income and occupies the housing as his or her principal residence. (3)Inter vivos trust, also known as a living trust. A living trust is created during the lifetime of a person.A living trust is created when the owner of property conveys his or her property to a trust for his or her own benefit or for that of a third party(the beneficiaries).The trust holds legal title and the beneficiary holds equitable title.The person may name him or herself as the beneficiary.The trustee is under a fiduciary responsibility to hold and manage the trust assets for the beneficiary.The participating jurisdiction may assist if all beneficiaries of the trust qualify as a low-income family and occupy the property as their principal residence (except that contingent beneficiaries,who receive no benefit from the trust nor have any control over the trust assets until the beneficiary is deceased, need not be low- income).The trust must be valid and enforceable and ensure that each beneficiary has the legal right to occupy the property for the remainder of his or her life. (4)Beneficiary deed. A beneficiary deed conveys an interest in real property, including any debt secured by a lien on real property, to a grantee beneficiary designated by the owner and that expressly states that the deed is effective on the death of the owner. Upon the death of the owner, the grantee beneficiary receives ownership in the property, subject to all conveyances, assignments, contracts, mortgages, deeds of trust, liens, security pledges, and other encumbrances made by the owner or to which the owner was subject during the owner's lifetime.The participating jurisdiction may assist if the owner qualifies as low-income and the owner occupies the property as his or her principal residence. (d)New construction without acquisition. Newly constructed housing that is built on property currently owned by a family which will occupy the housing upon completion, qualifies as affordable housing if it meets the requirements under paragraph (a) of this section. (e)Providing homeownership assistance through lenders. Subject to the requirements of this paragraph (e),the participating jurisdiction may provide homeownership assistance through for-profit or nonprofit lending institutions that provide the first mortgage loan to a low-income family. (1)The homeownership assistance may be provided only as specified in a written agreement between the participating jurisdiction and the lender.The written agreement must specify the forms and amounts of homeownership assistance that the participating jurisdiction authorizes the lender to provide to families and any conditions that apply to the provision of such homeownership assistance. (2) Before the lender provides any homeownership assistance to a family,the participating jurisdiction must verify that the family is low-income and must inspect the housing for compliance with the property standards in § 92.251. (3) No fees (e.g., origination fees or points) may be charged to a family for the HOME homeownership assistance provided pursuant to this paragraph (e), and the participating jurisdiction must determine that the fees and other amounts charged to the family by the lender for the first mortgage financing are reasonable. Reasonable administrative costs may be charged to the HOME program as a project cost. If the participating jurisdiction requires lenders to pay a fee to participate in the HOME program, the fee is program income to the HOME program.