Resale or recapture requirements. The grantee must establish the resale or recapture requirements that comply with the standards of § 93.305 and set forth the requirements in its xxxxxxx- dated plan. HUD must determine that they are appropriate and must specifi- cally approve them in writing.
Resale or recapture requirements. The grantee must establish the resale or recapture requirements that comply with the standards of this section and set forth the requirements in its con- solidated plan. The HTF-assisted hous- ing must meet the affordability re- quirements for not less than 30 years if resale restrictions are used. If recap- ture restrictions are used, the afford- ability periods are based on the amount of HTF funds per unit as fol- lows: Homeownership assistance HTF amount per-unit Minimum period of affordability in years Under $30,000 ......................................... 10 $30,000–$50,000 ..................................... 20 Over $50,000 ........................................... 30 (1) Resale. Resale requirements must ensure, if the housing does not con- tinue to be the principal residence of the family for the duration of the pe- riod of affordability, that the housing is made available for subsequent pur- chase only to a buyer whose family qualifies as a very low-income family and will use the property as the fam- ily’s principal residence. The resale re- quirement must also ensure that the price at resale provides the original HTF-assisted owner a fair return on in- vestment (including the homeowner’s investment and any capital improve- ment) and ensure that the housing will remain affordable to a reasonable range of income-eligible homebuyers. The grantee must specifically define ‘‘fair return on investment’’ and ‘‘af- fordability to a reasonable range of very low-income homebuyers,’’ and specifically address how it will make the housing affordable to an income el- igible homebuyer in the event that the resale price necessary to provide fair return is not affordable to the subse- quent buyer. Deed restrictions, cov- enants running with the land, or other mechanisms approved by HUD must be used as the mechanism to impose the resale requirements. The affordability restrictions may terminate upon occur- rence of any of the following termi- nation events: foreclosure, transfer in lieu of foreclosure, or assignment of an FHA insured mortgage to HUD. The grantee may use purchase options, § 93.305 rights of first refusal or other preemp- tive rights to purchase the housing be- fore foreclosure to preserve afford- ability. The affordability restrictions shall be revived according to the origi- nal terms if, during the original afford- ability period, the owner of record be- fore the termination event, obtains an ownership interest in the housing.
