Stonegate St. Patrick

LOTTERY APPLICANT QUALIFICATIONS:

1. Total gross household income cannot exceed the above maximum allowable income limits.  Income for all adults 18 or older are required.  Household income is based on all household members 18 years of age or older.
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. However, 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 whom the individual has custody or joint custody, or is pregnant);
5. households where at least one household member is 55 or older;
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 exceptions must be sold prior to closing of the affordable unit.

3. Total household assets shall not exceed $75,000.  Liquid retirement assets are counted. 
   1. Individual retirement, 401K and Keogh accounts are included when the holder has access to the funds, even though a penalty may be assessed.
   2. The valuation of Retirement and Pension Funds differ 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. 
   3.  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, or you can view these guidelines online at www.mcohousingservices.com.

Other program highlights for Lottery applicants:

• Unit must be the principal residence of the owners and cannot be rented or leased unless the Monitoring Agent grants permission.
• 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.

Are there mortgage guidelines that you 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% (200 basis points) above the current MassHousing Rate.)

(3) The buyer must provide a down payment of at least 3% of the purchase price and at least  half (1 ½%) 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 MassHousing 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.

(7) FHA, VA, Quicken and Rocket Mortgage loans are not accepted as those programs will not close on Deed Restricted properties.

We recommend you look into 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.

Additional Mortgage Specifics:

1.  Your mortgage pre-approval must cover the purchase price.  If it does not you will not be included in the lottery.  If you are applying for more than one unit size or income limit AMI, 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 unit 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 the 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, your pre-approval 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 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. 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 purchase. We do not expect the gifts funds to be in your account at the time of eligibility review, but they will be taken under consideration when reviewing your application.
8. If your pre-approval is from any of the stated loans we will not accept (FHA, 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, at minimum, 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.

Are there preferences for local residents and those with families?

One of the two units available will be distributed through the Local Pool.

Household size preferences are based on the following:

a. There is at least one occupant per bedroom.

b. 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.

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

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 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.

Are there any Deed 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 City and the Monitoring Agent for capital improvements and refinancing. If you choose to sell your unit you must notify the City and the Monitoring Agent in writing. There is a limit on the resale price. The maximum resale price is determined by the Monitoring Agent 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 sale price is $325,300 and the current applicable Median Family Income established by HUD is $160,900, the Resale Price Multiplier would be $325,300/$160,900= 2.02. 

Upon resale, the Resale Price Multiplier is multiplied by the current Median Family Income 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 of the Deed Rider at the time of the Purchase and Sale Agreement.  Email maureen@mcohousingservices.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

It is very 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 two pools – Local Preference and Open.  The pool and unit breakdown is as follows:

Bedrooms                           Total # of Units                    Local Pool                        Open Pool                

Three Bedroom                           1                                        0                                            1

Four Bedroom                              1                                          1                                           0                                                                                                                        

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 6) in the Local Preference Pool would have the initial opportunity to purchase.  The highest-ranking applicant for each unit size, that meets the household size preference, for the Open Pool would have the opportunity to purchase the available home. 

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 three-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.

Time Frames

If you are selected and have the opportunity to purchase the unit, you will speak the Lottery Agent representative to review your application to verify all information.  An Applicant selected for the home will start working with their lender immediately to finalize the necessary mortgage loan.  Please be advised that the final income verification will be done at the time you have an opportunity to purchase a unit.  All applicants must be determined income/asset eligible BEFORE they are entered into the lottery.   Applicants must be eligible at the time of application and before they close on the unit. 

Approved applicants have approximately two weeks to sign a Purchase and Sale Agreement, when received. 

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.