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8 <br />COMPARISON~SHEE~QUITY SHARING PROPOSALS <br />Situation I <br />The property is sold during the term of affordability by the original buyer to another qualified <br />homebuyer, i.e., aloes-income household, one whose combined income does not exceed 80% of <br />the area median household income by family size, as determined by the U.S. Department of <br />Housing and Urban Development at the time of the transfer, to use as their principal residence. <br />County Proposal <br />No equity sharing is required. The original dwelling unit remains in the affordable housing <br />stock. <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 ~ 30,000 <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 $(8'7,000) <br />Deferred Loan to be assumed <br />by the next buyer. ~ 00,0001 <br />Proceeds to the Seller $ 13,000 <br />In this example, the seller must sell to a low income family, thus, the property sales price less the <br />deferred loan must make the property affordable to the next buyer. <br />Property Sales Price: $130,000 <br />Deferred Loan to be assumed <br />by the next buyer. ~ (,30.0001 <br />$100,000 <br />The property must be affordable at $140,000 or the sales price must be reduced to make it <br />affordable for the next buyer. When the property is sold to a qualified buyer, the seller retains <br />100% of the appreciation (proceeds from the sale). The property remains in the affordable <br />housing stock of the community. <br />