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34 <br /> B. Multiply the basis by the Federal Housing Finance Agency's Housing Price Index (HPI)to <br /> determine the fair return to the homeowner: <br /> https://www.fhfa.gov/DataTools/Tools/Pages/HPICalculator.aspx <br /> To calculate the resale price to the next homebuyer, the Consortium will add the fair return on <br /> investment to the homeowner to the original affordable price of the home at purchase by the <br /> original buyer. <br /> Example#1: <br /> • Appraised (Fair Market)Value at Purchase: $210,000 <br /> • Affordable Price at Purchase: $190,000 <br /> • Appraised Value at Resale: $240,300 <br /> • Increase in Market Appreciation: $240,300-$210,000=$30,300 <br /> • Average Appreciation in the Raleigh-Durham MSA (per the HPI Calculator): 29.4% <br /> • Fair Return on Investment: $30,300 x 0.294= $8,908 <br /> • Resale Price: $190,000+$8,908 = $198,908 <br /> Affordability to a Range of Buyers <br /> The Consortium will ensure continued affordability to a range of buyers, particularly those whose <br /> total household incomes range from 60 to 80%of area median income (AMI) as calculated by HUD <br /> for the HOME Program. Sales price will be set such that the amount of principal, interest,taxes, and <br /> insurance does not exceed 30%of the new buyer's annual income. <br /> In the event the resale price required to provide a fair return exceeds the affordability to a range of <br /> LMI buyers, additional HOME funding will be provided to the subsequent buyer based on the level of <br /> funds required to make the unit affordable. <br /> Principal Residency Requirements <br /> Households receiving HOME-funded homeownership assistance will be required to occupy the home <br /> as their principal residence throughout the HOME Affordability Period. <br /> In the event the original HOME-assisted homebuyer no longer occupies the unit as their principal <br /> residence (i.e.,the unit is rented or vacant),the homeowner will be in violation of the terms of the <br /> HOME assistance. In cases of noncompliance,the Consortium will enforce the terms of the HOME <br /> written agreement to require repayment of any outstanding HOME funds invested in the housing. <br /> The amount subject to repayment is the total amount of HOME funds invested in the housing(i.e., <br /> any HOME development subsidy to the developer plus any HOME direct assistance provided to the <br /> homebuyer) minus any HOME funds already repaid (i.e., payment of principal on a HOME loan). <br /> Noncompliance with principal residency requirements by a homebuyer is not considered a transfer <br /> and is not subject to resale provisions. <br /> Annual Action Plan 30 <br /> FY 2023-2024 <br />