20A - NEIGHBORHOOD STABILIZATION PROGRAM 3

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Household Size Income Limit Household Size Income Limit One $32,550 Five $50,200 Two $37,200 Six $53,900 Three $41,850 Seven $57,600 Four $46,450 Eight $61,350 • NSP3 funds will be loaned to an intermediary to help acquire NSP3 eligible homes. • Using other funds, the intermediary will rehabilitate these homes in accordance with the City's rehabilitation standards (Attachment 2), market them, and sell them to income qualified households. • The maximum sales price will be the lesser of the aggregate cost to acquire, rehabilitate and sell the property, or its fair market value as established by a City approved appraiser. • In consultation with the City, sales prices may. be adjusted to, reflect market conditions and homebuyer qualifying requirements. • The City will record an NSP3-funded silentsecond mortgage in the amount necessary to accomplish the sale. • Concurrently with the transfer of ownership'to the homebuyer, and in addition to the trust deed, a regulatory agreement will be recorded to require its repayment should the property be sold prior to completion of a 45 year period of affordability. • Depending on need, homebuyer„eligibiWy and the availability of funds, the City may also provide down payment assistance. loans using,federal HOME Program American Dream Downpayment Initiative; (ADDI) funds. • The City requires that homebuyers make downpayments equal to 3 percent of the purchase price'out of their-or funds. Gift funds cannot be used to meet this requirement., • For households participatingin the-program, the City's required debt ratio is 30/40. Should experience suggest that the ratio is not working, the City may re-evaluate and adjust it. • In some cases the intermediary may be unable to sell the homes at a price that enables them to. recover eligible development costs (acquisition, rehabilitation, marketing, developer fee). The City Will reimburse the intermediary for such costs. • If within six months of marketing a home for sale, the intermediary has been unable to identify an income qualified homebuyer with adequate cash to make the downpayment required for a first mortgage, the intermediary will offer the home for sale under the terms of a Lease to Own Program. • Lease to Own Program guidelines will be established by the intermediary in consultation with the City. • The Lease to Own Program will be operated by the intermediary in consultation with the City. • The City has allocated $366,029 of NSP3 funds for this program, and has established a performance measure of at least one unit acquired, rehabilitated and sold to an income eligible household. The dollar amount is the minimum that must be allocated to this program. If necessary to accomplish the goal, additional funds may be transferred from the other program. Page 4 20A-41