How it Works
Whether it is an 8-plex, a single family dwelling or another type of development the Affordable Housing Rent-to-Own (AHR2O) program is can work for qualified renters because:
a. The builder constructs a good-quality, efficient multi-unit building at a low cost per unit.
b. The shared equity and/or grant funding is used as the down-payment to reduce the size of the mortgage.
c. The affordable housing provider rents the unit at a minimum net operating income.
d. The mortgager accepts a low debt coverage ration mortgage with a reasonable terms.
e. As a result, much of the mortgage can be paid down quickly enabling the buy-out option.
f. The tenant buys-out the unit for the value of the outstanding mortgage plus the value of the original Shared Equity/Grant.
g. The affordable housing provider re-invests the shared equity/grant amount in the next project “paying forward” the initial Investments.
Why it Works
The program works by creating a sustainable path from affordable renting to homeownership, while allowing the original investment to continue supporting future housing projects.
a. During the Rental Period the Occupant receives Education and Mentoring on Ownership, Financial Discipline, etc…
b. If the Tenant cannot buy-out the unit, it remains rented at the affordable rate indefinitely.
c. The tenant is eligible to buy-out the unit at any time.
d. The price to the Tenant is the outstanding mortgage plus the escalated value of the Shared-Equity/Grant amount.
e. The Appreciated Value of the unit provides a high loan to value for the Occupant to negotiate a mortgage.
f. The Affordable Housing Provider is required to re-invest the Shared-Equity/Grant portion of the sale into the next project.
g. The impact of the Shared Equity/Grant investment is perpetual.
h. The AHP is satisfied with breaking even in order to let the Occupant accrue all the benefits of Equity Appreciation.
Contact Us
Want to learn more about the Affordable Housing Rent-to-Own Program? Send us an email at tellmemore@maritimehousing.com.