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Net proceeds are defined as the sales price minus superior loan repayment (other than
HOME funds) and any closing costs. Under no circumstances can the City or its
subrecipients recapture more than is available from the net proceeds of the sale.
PERIOD OF AFFORDABILITY
The use of HOME funds for homebuyer programs requires an affordability period until the
home is no longer the primary residence. The requirements must be incorporated in an agreement
with the homebuyer and through the deed of trust and note on the property.
If a household decides to sell its home or to no longer use the home as its principal residence,
the City must determine whether the affordability period requirements have been met. If they
have, the household owes no more money and may sell the house free of any conditions. If they
have not, the City must recapture some or the entire HOME subsidy.
• The amount of HOME investment to be recaptured will be reduced on a pro-rata basis for
the time the homeowner has owned and occupied the housing measured against
the required affordability period. A forgivable loan will be used to finance the HOME
assistance to the homebuyer. The HOME balance due will be reduced by an equal amount
annually during the affordability period. The HOME amount will be completely forgiven
if the homebuyer remains the owner and occupant for the full affordability period.
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