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11 <br />EmPOWERment Proposal <br />Shared appreciation upon the sale of the home, based upon the proportion of the public subsidy <br />to the total appraised value of the home. The property would not remain in the affordable <br />housing inventory. <br />EXAMPLE: <br />This family purchased this home in 1995 for a purchase price of $120,000. The family financed <br />this purchase in the following manner. <br />Cash downpayment $ 1,000 <br />First Mortgage $ 89,000 <br />Deferred Loan/County S ~Qi000 <br />Total $120,000 <br />In 2000, the family decides to sell the home at a price of $130,000. <br />Property Sales Price: $130,000 <br />First Mortgage Payoff $ (87,000) <br />Deferred Loan Repayment $ 00.0001 <br />Proceeds to the Seller $ 13,000 <br />In this example, the seller does not sell to aloes-income family. When the property is sold, the <br />seller shares the proceeds of the sale (equity) in proportion to the total cost of home at the initial <br />purchase. Continuing with this example, the original sales price was $120,000 and the $30,000 <br />deferred loan represents 25% of the total appreciation. Thus, at the time of resale, the actual <br />return to the buyer is as follows. <br />Original Sales Price <br />Deferred Loan <br />$120,000 <br />$30,000 or 25% ofthe price <br />Current Property Sales Price <br />First Mortgage Payoff <br />Deferred Loan Repayment <br />Net Proceeds <br />$130,000 <br />$ (87,000) <br />X30,0001 <br />$ 13,000 <br />Applying the "proportionate share" formula, 25% of the proceeds or $3,250 would be repaid to <br />the County and the remainder, the seller would retain $9,750. The County would receive the <br />initial investment of $30,000 plus $3,250. <br />