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33 <br /> assistance does not include HOME funds provided to a developer to cover the unit production costs <br /> that do not reduce the purchase price below fair market value. <br /> HOME Funds Provided <br /> to a unit or as direct assistance to buyer HOME Affordability Period <br /> <$15,000 5 years <br /> $15,000—$40,000 10 years <br /> >$40,000 15 years <br /> Resale provisions are enforced through the use of a Deed of Restrictive Covenants signed by the <br /> homebuyer at closing.The Deed of Restrictive Covenants will specify: <br /> A. The length of the HOME Affordability Period (per the chart above); <br /> B. The home must remain the owner's principal residence throughout the HOME Affordability <br /> Period; and <br /> C. The conditions and obligations of the owner should the owner wish to sell before the end of the <br /> HOME Affordability Period, including; <br /> 1. The owner must contact the Orange County HOME Consortium or its designated <br /> representative in writing if intending to sell the home prior to the end of the HOME <br /> Affordability Period; <br /> 2. The subsequent purchaser must be low-income as defined by HOME regulations, and <br /> occupy the home as their primary residence for the remaining years of the HOME <br /> Affordability Period (however, if the new purchaser receives HOME direct assistance, <br /> the HOME Affordability Period will be re-set according to the amount of assistance <br /> provided); and <br /> 3. The sales price must be affordable to the subsequent purchaser; affordable is defined as <br /> limiting the Principal, Interest,Taxes and Insurance (PITT) amount to no more than 30% <br /> of the new purchaser's monthly income. <br /> 3. A description of the guidelines for resale or recapture that ensures the affordability of units <br /> acquired with HOME funds?See 24 CFR 92.254(a)(4)are as follows: <br /> Fair Return on Investment <br /> The Consortium must ensure the owner receives a fair return on their investment and that the <br /> home will continue to be affordable to a specific range of incomes.To calculate the fair return on <br /> investment to the homeowner, the Consortium will: <br /> A. Determine the amount of market appreciation, if any, realized over the ownership term by <br /> calculating the difference between the initial appraised value at purchase and the current appraised <br /> value at resale.This figure represents the basis for calculating the fair return on investment. In <br /> declining markets, it is possible that the homeowner may not realize a return. <br /> Annual Action Plan 29 <br /> FY 2023-2024 <br />