Paradise Place Condominium

Application Process:

LOTTERY APPLICANT QUALIFICATIONS:

1. Household income cannot exceed the above maximum allowable income limits. Income from all adults 18 or older will be counted towards income eligibility.
2. Household must be a first-time homebuyer defined as not having owned a residential property for three years, including a home in a trust. ** The following exceptions apply:
3. displaced homemakers, where the displaced homemaker (an adult who has not worked full-time, full-year in the labor force for a number of years but has, during such years, worked primarily without remuneration to care for the home and family), while a homemaker, owned a home with his or her partner or resided in a home owned by the partner;
4. single parent, where the individual owned a home with his or her partner or resided in a home owned by the partner and is a single parent (is unmarried or legally separated from a spouse and either has 1 or more children of who the individual has custody or joint custody, or is pregnant);
5. households where at least one household member is 55 or over;
6. households that owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations; and
7. households that owned a property that was not in compliance with State, local or model building codes and that cannot be brought into compliance for less than the cost of construction a permanent structure.

**  A home owned by one of the above exception must be sold prior to closing on the affordable unit.

1. Total household assets shall not exceed $75,000.  Liquid retirement assets are counted. 
2. Individual retirement, 401K and Keogh accounts are included at 100% of the account value. 
3. The value of Retirement and Pension Funds differ if you are employed or are no longer working.  If still employed the value is determined using the amount you can withdraw less any penalties or transaction costs.  At retirement, termination of employment or withdrawal periodic receipts from pension and retirement funds are counted as income.  Lump sum receipts are counted as assets. 
4. Assets divested at less than full market value within two years of application will be counted at full market value when determining eligibility.

Complete Income and Asset Guidelines will be provided upon request, if you have an opportunity to purchase or you can view online at www.chelmsfordha.com.

Other program highlights for Lottery applicants:

• Unit must be principal residence of the owners and cannot be rented or leased with permission from the Monitoring Agent.
• Non-household members are not permitted to be co-signers on the mortgage.
• A mortgage pre-approval letter, from a bank experienced with deed-restricted properties, is required to participate in this lottery. VA and Quicken loans will not be accepted.

Are there mortgage guidelines that we need to follow? Yes, they are:     

(1) Must secure a 30-year fixed rate mortgage.

(2) The loan must have a current fair market interest rate.  No more than 2% points above the current MassHousing Rate.

(3) The buyer must provide a down payment of at least 3%, 1.5% of the purchase price must come from the buyer’s own funds.

(4) The loan can have no more than 2 points.

(5) The sales price of the unit is set by EOHLC to be affordable to an income-eligible household paying no more than 30% of their monthly income for housing costs. The buyer may not pay more than 38% of their monthly income for housing costs.

(6) Non-household members are not permitted to be co-signers on the mortgage.

Additional Mortgage Specifics:

1.  Your mortgage pre-approval MUST cover the purchase price.  Anything less than your pre-approval will not be accepted. If you are applying for more than one unit size, then the approval must cover the highest priced unit.
2. Your mortgage pre-approval must be a fixed rate mortgage.  Adjustable-rate mortgages will not be accepted, and you will not be included in the lottery.
3. At minimum, your pre-approval must show purchase price and financing amount.  If it does not you will not be included in the lottery.
4. If your mortgage pre-approval does not have an expiration date, then after 60 days from date of issue it will be considered expired.  If your pre-approval expires after your application submission, we will accept it, but should you have a chance to purchase it, it will need to be updated prior to final eligibility determination.  If it expires prior to your application submission, you will not be included in the lottery.
5. If you plan on using a down payment assistance program then the program must be noted in the pre-approval, i.e. Mass Housing downpayment, etc.  If a specific downpayment assistance program is not stated in the pre-approval it will not be taken into consideration.
6. POST LOTTERY:  We will determine your downpayment amount based on your pre-approval.  For example, your purchase price is $250,000 and you are financing $225,000 so we expect to see $25,000 in assets to cover the purchase price.  If some of a downpayment is coming through a gift that information should be provided with your application.  If we do not see the $25,000, whether it is your funds or gift monies, then you will not be included in the lottery. As a reminder, the minimum down-payment is 3% of your own funds. If you are receiving a downpayment gift or using a downpayment assistant program, then 1.5% of your own funds is required as long as the total downpayment equals the minimum 3%. Your downpayment can be more than 3% but not less. Also remember you are responsible for downpayment and closing costs.
7. POST LOTTERY:  A gift letter must be for a specific amount.  If the letter is provided with a range, we will count the highest amount.  If this puts you over the asset limit you will be determined ineligible to participate in the lottery.
8. If your pre-approval is from any of the stated loans we will not accept (FHA, VA, Rocket Mortgage, Quicken loans) your application will not be included in the lottery. No exceptions.
9. Online mortgage pre-approvals will not be accepted.  You must speak/meet with a mortgage lender who should be checking credit and pay history to determine your ability to secure a mortgage.
10. We will accept no pre-approvals where any information has been crossed out, whited out and submitted with the application.
11. Non-household members cannot be co-signers on your mortgage.

A mortgage pre-approval letter will be required to participate in the lottery. The pre-approval letter must be based on applicants’ credit score and current financial situation. It MUST be from an institutional lender familiar with affordable deed restrictions and received with their application before the application deadline.  An online letter will NOT be accepted. 

It is recommended applicants consider the One Mortgage Program through MHP or MassHousing.  For a list of some recommended lenders offering this program, please visit this page: https://www.masshousing.com/home-ownership/homebuyers/lenders

Are there preferences for local residents and those with families?

There is no local preference.  Both units will be distributed through the Open Pool.

Household size preferences are based on the following unit preferences.

Unit preferences are based on the following:

a. There is at least one occupant per bedroom.

b. A married couple, or those in a similar living arrangement, shall be required to share a bedroom. Other household members may share but shall not be required to share a bedroom.

c. A person described in (b) shall not be required to share a bedroom if the consequence of sharing would be a severe adverse impact on his or her mental or physical health and reliable medical documentation is provided substantiating the adverse impact.

d. A household may count an unborn child as a household member.  The household must submit proof of pregnancy with the application.

e. If the applicant is in the process of a divorce or separation, the applicant must provide proof that the divorce or separation has begun or has been finalized, as set forth in the application.

Persons with disabilities are entitled to request a reasonable accommodation of rules, policies, practices, or services or to request a reasonable modification of the housing, when such accommodations or modifications are necessary to afford the person(s) with disabilities equal opportunity to use and enjoy the housing.  The request must be made at the time of application with documented proof of needs, i.e. letter from doctor.

Are there any restrictions?

YES. Deed restrictions are used to ensure the units are affordable for future buyers.  The deed rider requires principal residency, affordability for perpetuity and prior approval from the Town and EOHLC for capital improvements and refinancing. If you choose to sell your unit you must notify the town and EOHLC in writing. There is a limit on the resale price. The maximum resale price is determined by EOHLC using a Resale Price Multiplier, a figure calculated by taking the initial sales price and dividing it by the area median income. For example, if the initial three bedroom price is $220,200 and the current area median income is $152,600, the Resale Price Multiplier would be $220,200/152,600= 1.44. 

Upon resale, the Resale Price Multiplier is multiplied by the updated area median income number to determine the maximum resale price. 

All selected applicants are urged to review the deed rider with their own attorney. All buyers will be provided with a copy at the time of Purchase and Sale Agreement.  Email lottery@chelmsfordha.com for a copy of the deed rider. 

How much money do I need to make to afford the unit?

The minimum income required to purchase is based upon an applicant’s ability to secure a mortgage.  Attached is a “Sample Affordability Analysis” based upon current interest rates and anticipated real estate taxes and related housing expenses. 

Lottery Process

Due to the nature of the affordable units’ availability, it is important for everyone to understand the procedure.   Please understand the allowable income guidelines are adjusted based upon your household size.  Also be advised that the program and its requirements are subject to changes in local, state or federal regulations. 

Lottery Pools

The lottery has one pool, the Open Pool, open to all eligible applicants.  Each eligible applicant will receive a lottery code and will be included in the lottery. All eligible applicants will be pulled, and their lottery code announced at the time of the lottery.  This order of selection will establish the rankings for the home’s distribution.  The first applicants on the list that require a three and a four-bedroom unit will have the first opportunity to purchase.

Once the buyers have been identified they will be emailed the list of required documentation that must be provided within a defined period of time.  Failure to provide all the required documentation and we will move onto the next buyer on the list.

Time Frames

If you are selected and have the opportunity to purchase the unit, you will need to provide all the required financial documentation within the timeframe provided post lottery.  Once received and reviewed, your information will be forwarded to the Monitoring Agent for final eligibility determination.  Once you have been determined eligible by the Monitoring Agent, you will be shown the unit and your information will be forwarded to the sellers attorney to prepare the Purchase and Sale Agreement.  There may be a delay in submitting documentation for final approval based on the occupancy date. 

Acceptance of Home

If you choose not to purchase the property, you will go to the bottom of the list and will likely NOT have another opportunity. 

Summary

We hope this helps explain the process by which the units will be distributed.  It can be a lengthy and sometimes complicated process.  We greatly appreciate your participation and wish you the best of luck in the lottery process.