Louis Farm Village 55+ Community

What are the qualifications required for Prospective Buyers?

              1. The maximum allowable gross income guidelines, adjusted for household size, is below.  Income for all household members 18 years of age or older must be provided.

2. At least one household member must be 55 years of age or older. 

3. Eligible households are allowed up to $275,000 combination equity from home sale and assets.  You cannot purchase an affordable home unless your current home is sold.  If you do not have a home to sell the asset limit is the same at $275,000.

Retirement Accounts are determined as follows:

1. Individual retirement, 401K and Keogh accounts are included when the holder has access to the funds, even though a penalty may be assessed.

   1. The value of Retirement and Pension Funds differs depending on whether 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 or termination of employment or upon voluntary withdrawals, receipts from pension and retirement funds are counted as income.  The balance of the account is not counted as an asset.   Lump sum receipts are counted as assets. 
   2. Assets divested at less than full market value within two years of application will be counted at full market value when determining eligibility.

    

Refer to Required Financial Documentation Form at the end of the package for full list of required asset documentation.

Other program highlights for Lottery applicants:

• Units must be owner occupied.  They cannot be rented or leased.
• Non-household members are not permitted to be co-signers on the mortgage.
• A mortgage pre-approval letter is required to participate in this lottery, but you can also pay cash. 

Are there specific mortgage guidelines?

Yes, they are:

1. Be a fully amortizing fixed rate mortgage with a down payment of at least 3%, at least half of which must come from the buyer’s own funds.

2. Be made by an institutional lender. 

3. Have a fixed interest rate through the full term of the mortgage that is a current fair market interest rate.

4. No more than 2 points.

5. Monthly housing (inclusive of principal, interest, property taxes, hazard insurance, private mortgage insurance and condominium or homeowner association fees) may not exceed 38% of the buyer’s monthly income for the mortgage.

6. Non-household members shall not be permitted as co-signers of the mortgage.

7.  The following mortgage programs will not close on deed restricted properties, FHA, Quicken Loans or Rocket 

Additional Mortgage Specifics:

1. Your mortgage pre-approval must cover the purchase price.  You can pay cash for the home.
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 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. 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 then 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. 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) and 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.

We recommend you investigate the One Mortgage Program through the Massachusetts Housing Partnership (MHP), www.mhp.net, and MassHousing, www.masshousing.com, as both have programs geared to first-time homebuyers. 

Are there preferences for local residents? 

Yes, three of the 5 available units will be sold to applicants that meet the Local Preference Criteria that applied for the lottery.

Household Size Preferences Criteria

Household size preferences are based on the following:

1. There is at least one occupant per bedroom.
2. A husband and wife, 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.
3. A person described in the first sentence of (b) shall not be required to share a bedroom if a consequence of 
4. A household may count an unborn child as a household member.  The household must submit proof of 
5. If the Applicant is in the process of a divorce or separation, the Applicant must provide proof that the divorce or

sharing would have a severe adverse impact on his or her mental or physical health and the lottery agent receives reliable medical documentation as to such impact of sharing.

pregnancy with the application.

separation has begun or has been finalized, as set forth in the application.

Is there a preference for minorities?

If the percentage of minority applicants in the Local Preference Pool is less than the percentage of minorities in the Surrounding HUD-defined area, currently 33.4%, a preliminary lottery will be held, comprised of all the minority applicants who do not qualify for the Local Preference Pool. These minority applicants would be drawn until their percentage in the local pool closely approximates the percentage in the Boston area population.  Applicants not selected for the Local Preference Pool would be in the Open Pool only.

Are there any restrictions?

YES. Deed restrictions are used to protect the affordability of the town homes for future buyers.  The deed restrictions encumber the property in perpetuity, with certain exceptions. If you choose to sell your home, there is a limit on the resale price. The maximum resale price is determined using a Resale Price Multiplier, a figure calculated by taking the initial sales price and dividing it by the area median income. For example, the initial 2-bedroom affordable condominium home price, at 80% AMI, is $217,600 and the current area median income is $132,900, the Resale Price Multiplier would be $217,00/$132,900 = 1.63. 

Upon resale, the Resale Price Multiplier is multiplied by the updated area median income number to determine the maximum resale price.  A resale fee up to 2% of the resale price may be added onto the resale price to be paid by the buyer to the Monitoring Agent.  The final price must be affordable to buyers at the time of resale, which may mean an adjustment to the resale price.

Applicants are strongly encouraged to review the restrictions in the deed rider with their attorney.

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

The minimum income required to purchase is based solely upon an applicant’s ability to secure a mortgage.  Attached is an “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 state or federal regulations. 

Lottery Pools

Five (5) townhomes are available by lottery at Louis Farm Village for applicants earning up 80% AMI. The units will be distributed through two pools – Local Preference Pool and the Open Pool.   You must meet at least one of the Local Preference Criteria to be included in the Local Pool.  The units’ breakdown as follows:

                                Unit Size                              # of Units            Local Pool           Open Pool           

                                 2 Bedroom Units                     5                           3                           2

Eligible applicants will receive a lottery code prior to the lottery.  Local applicants would have two opportunities to purchase a unit by being in both the Local Preference Pool and Open Pool.

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. There will be two pools of applicants, one for the Local Preference Pool applicants and the second for Local Preference and non-local applicants (Open Pool).  The highest ranked applicants for each unit size, meeting the household size preference (see page 4) in the Local Preference Pool would have the initial opportunity to purchase.  The highest ranked applicants that meet the household size preference for the Open Pool would have the opportunity to purchase the available homes.  Local Pool applicants will select their unit locations first and then the Open Pool

NOTE:  Homes will not be offered to smaller households until all applicants meeting the household size criteria have been offered a unit. For example, this means if we exhaust the two-bedroom households in the Local Preference Pool we will move to the Open Pool to fill the units before offering to smaller households in the Local Preference Pool.

Household size shall not exceed, nor may the maximum allowable household size be more restrictive than State Sanitary Code requirements for occupancy of a unit (See 105 CMR 400). 

Time Frames

If you are selected and have the opportunity to purchase a home, you will speak or meet with a representative to review your application to verify all the information. Applicants selected for homes approaching completion will need to start working with an approved lender immediately to secure the necessary mortgage.  Please be advised the official income verification will be done at the time you have an opportunity to purchase a home.  Meaning, if one year after the initial lottery you have the opportunity to purchase a home and you are over income at that time, you may not be able to purchase.

Acceptance of Homes

It is important for all applicants to understand that applicants may not have a choice of home locations, style or schedules. If you have the opportunity to purchase, you will have two weeks to sign the Purchase and Sale Agreement once you receive it by the seller’s representative.  You will not be able “pass” on a home and wait for another home. If you choose not to take the designated home, you will go to the bottom of the list and will NOT have another opportunity. 

Resale of Homes

The resale of the affordable homes will be coordinated by the Monitoring Agent.  If you have an opportunity to purchase you will receive a copy of the LIP Homebuyer Disclosure Statement which outlines the limitation on profit, steps to resell the home, time allowed to sell, and capital improvements etc. If you would like to receive a copy of this document send an email to maureen@mcohousingservices.com and a copy will be emailed to you.