Homeownership: Permanent Affordability vs. Equity Building October 7, 2003 Rick Jacobus, LISC John...
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Transcript of Homeownership: Permanent Affordability vs. Equity Building October 7, 2003 Rick Jacobus, LISC John...
Homeownership: Homeownership: Permanent Affordability vs. Permanent Affordability vs.
Equity BuildingEquity Building
October 7, 2003October 7, 2003Rick Jacobus, LISCRick Jacobus, LISC
John Lowry, Burbank HousingJohn Lowry, Burbank HousingMark Moulton, Peninsula Habitat for Mark Moulton, Peninsula Habitat for
HumanityHumanity
Burbank Housing DevelopmentBurbank Housing Development
Discussion QuestionDiscussion Question
Given the costs and subsidies required, Given the costs and subsidies required, and Burbank’s goals…and Burbank’s goals…
How should they handle the potential How should they handle the potential increases in the value of that home? increases in the value of that home? Should the homeowners be allowed to Should the homeowners be allowed to
keep all of the increase in price? keep all of the increase in price? Should they have to return all of the Should they have to return all of the
increase to Burbank? increase to Burbank? ……something in the middle? something in the middle?
Peninsula Habitat for HumanityPeninsula Habitat for Humanity
Discussion QuestionDiscussion Question
Given the costs and subsidies required, Given the costs and subsidies required, and Habitat’s goals…and Habitat’s goals…
How should they handle the potential How should they handle the potential increases in the value of that home? increases in the value of that home?
Should Habitat be thinking about this Should Habitat be thinking about this differently from Burbank?differently from Burbank?
Continuum of ApproachesContinuum of Approaches
Resale Price Restrictions
Share
d E
quity
Loans
Optio
n to
Purch
ase
Forg
ivable
Loans
Dow
npaym
ent
Gra
nts
Permanent AffordabilityAsset Building
Mortg
age F
orm
ula
s In
dex F
orm
ula
s Appra
isal F
orm
ula
s
Burbank Housing DevelopmentBurbank Housing Development
Shared Appreciation LoanShared Appreciation Loan Option to repurchase at appraised Option to repurchase at appraised
valuevalue Deferred paymentsDeferred payments Buyer repays percentage of Buyer repays percentage of
appraised value based on loan appraised value based on loan amount as a percent of initial value.amount as a percent of initial value.
Peninsula Habitat for HumanityPeninsula Habitat for Humanity
Resale Price RestrictionResale Price Restriction Option to purchase at formula price Option to purchase at formula price
(well below market)(well below market) Resale price indexed to CPI (up to 3%)Resale price indexed to CPI (up to 3%) Habitat provides mortgage with term Habitat provides mortgage with term
(length) adjusted to insure (length) adjusted to insure affordability to 50% of Area Median affordability to 50% of Area Median IncomeIncome