§12895 Other Program Requirements

Summary

The federal official in charge can set cost limits for activities under this program. When an entity sells ownership shares or units to eligible families, it may use any money from the first sale to pay program costs like running the program, fixing the project, creating business chances for low-income families, providing supportive services, and creating more homeownership opportunities. A homeowner may sell their share, but the program can put rules on resale. If a resident management group, resident council, or cooperative oversees the unit, that group has the first right to buy at the price in a firm contract between the seller and a buyer. If that group does not control the unit or chooses not to buy, and the buyer is not low-income, the public housing agency or grant recipient has the same purchase right. The homeowner must sign a written promise to pay the difference between market value and the sale price to the public housing agency or another designated entity, and give a mortgage as security for that promise. If the homeowner sells within 6 years, the program must limit how much the family can profit. The family may only get back what they paid in equity, the value of any improvements they paid for while owning the home, and a limited amount of appreciation based on an inflation or market measure agreed to at the first sale; the seller may set a cap on that appreciation when selling initially. If the sale happens more than 6 years but within 20 years, the Secretary or the program may recapture an amount equal to the remaining balance on the written loan. Of any net sales proceeds the homeowner cannot keep under these rules, 50% goes back to the entity that sold the units for program uses and 50% goes to the federal program, subject to funding limits. Recipients must keep records of receipts, costs, and sources of funds and must allow audits by the Secretary and the Comptroller General. Low-income families, resident groups, public housing agencies, and similar parties can go to court to enforce quality, resale, or transfer rules and may recover attorney fees if they win. Tenants living in a unit when the grant was approved cannot be evicted because of the homeownership program.