2017-10-13 CPA Question Habitat GARFIELD.docxResponse to CPA Questions October 10, 2017
Garfield Avenue Extension
o What has been the retention rate of homeowners – have any been forced to sell involuntarily?
100% All five of the originally selected Pioneer Valley Habitat for Humanity homeowners still own their homes. No one will be forced to sell involuntarily, in the case of default or
family change we would negotiate with the homeowners.
o How is the resale price set?
Using a formula in the Universal Deed Rider written by the Massachusetts Department of Housing and Community Development (DHCD). The goal is to allow for some appreciation in value
but maintain affordability for future buyers who earn less than 70-80% of the Area Median Income.
The deed rider states:
Maximum Resale Price means the sum of (i) the Base Income Number* (at the time of resale) multiplied by the Resale Price Multiplier, plus (ii) the Resale Fee and any necessary marketing
expenses (including broker’s fees) as may have been approved by the Monitoring Agent, plus (iii) Approved Capital Improvements, if any (the original cost of which shall have been discounted
over time, as calculated by the Monitoring Agent); provided that in no event shall the Maximum Resale Price be greater than the purchase price for which a credit-worthy Eligible Purchaser
earning seventy percent (70%) of the Area Median Income (or, if checked [ ] ____ percent (___%) of Area Median Income, as required by the Program) for an Appropriate Size Household
could obtain mortgage financing (as such purchase price is determined by the Monitoring Agent using the same methodology then used by DHCD for its Local Initiative Program or similar
comprehensive permit program); and further provided that the Maximum Resale Price shall not be less than the purchase price paid for the Property by the Owner unless the Owner agrees
to accept a lesser price.
*Base Income Number means the Area Median Income for a four (4)-person household
o Please confirm that the bedroom is large enough to accommodate 2 people under the Sanitary Code (the drawings indicate square footage, but it’s difficult to read on the copy.)
The state sanitary code requires bedrooms for two people to be at least 100 sq ft the bedroom will be at least this size and is currently ~190 sq ft.
o Was it not feasible to also make this house zero net energy?
Energy efficiency is also a priority for this house and planning for the possibility of solar is part of the design process. We have not yet completed final designs and value engineering
to determine if zero net energy will be possible. We are putting a higher priority on overall cost reduction for this project and often the last 10% of energy savings in getting to
zero is the most expensive. We are committed to meeting ENERGY STAR and Stretch Energy Code requirements which provides for a high level of energy efficiency.
o Given limited CPC funding, which of the Habitat projects is the highest priority?
The total budget for the Glendale Rd project is higher so there is a greater need for funding making it a higher priority.
o Can you describe in a little more detail the deed restrictions that would be put on each property.
We would like to work with the city of Northampton to complete a Local Initiative Program application and commit this unit to being on the state’s affordable housing inventory. If/when
CPA funds are committed we will start this application process. http://www.mass.gov/hed/community/40b-plan/local-initiative-program-lip.html
Attached is the sample deed rider from this program. This deed rider is commonly referred to as the “universal” deed rider because it is used across the state as an affordable housing
tool for many projects.