[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR906.15]

[Page 363-364]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 906_PUBLIC HOUSING HOMEOWNERSHIP PROGRAMS--Table of Contents
 
                    Subpart C_Purchaser Requirements
 
Sec. 906.15  Requirements applicable to a family purchasing a property 
under a homeownership program.

    (a) Low-income requirement. Except in the case of a PHA's offer of 
first refusal to a resident occupying the unit under Sec. 906.13, a 
family purchasing a property under a PHA homeownership program must be a 
low-income family, as defined in section 3 of the 1937 Act (42 U.S.C. 
1437a), at the time the contract to purchase the property is executed.
    (b) Principal residence requirement. The dwelling unit sold to an 
eligible family must be used as the principal residence of the family.
    (c) Financial capacity requirement. Eligibility must be limited to 
families who are capable of assuming the financial obligations of 
homeownership, under minimum income standards for affordability, taking 
into account the unavailability of public housing operating subsidies 
and modernization funds after conveyance of the property by the PHA. A 
homeownership program may, however, take account of any available 
subsidy from other sources. Under this affordability standard, an 
applicant must meet the following requirements:
    (1) Cost/income ratio. On an average monthly estimate, the amount of 
the applicant's payments for mortgage principal and interest, plus 
insurance, real estate taxes, utilities, maintenance, and other 
regularly recurring homeownership costs (such as condominium, 
cooperative, or other homeownership association fees) will not exceed 
the sum of:
    (i) 35 percent of the applicant's adjusted income as defined in 24 
CFR part 913; and
    (ii) Any subsidy that will be available for such payments;
    (2) Down payment requirement. Each family purchasing housing under a 
homeownership program must provide a down payment in connection with any 
loan for acquisition of the housing, in an amount determined by the PHA 
or PRE, in accordance with an approved homeownership program. Except as 
provided in paragraph (c)(3) of this section, the PHA or PRE must permit 
the family to use grant amounts, gifts from relatives, contributions 
from private sources, and other similar amounts in making the down 
payment;
    (3) The family must use its own resources other than grants, gifts, 
contributions, or similar amounts, to contribute an amount of the down 
payment that is not less than one percent of the purchase price of the 
housing. The PHA or PRE must maintain records that are verifiable by HUD

[[Page 364]]

through audits regarding the source of this one percent contribution.
    (d) Other requirements established by the PHA. A PHA may establish 
requirements or limitations for families to purchase housing under a 
homeownership program, including but not limited to requirements or 
limitations regarding:
    (1) Employment or participation in employment counseling or training 
activities;
    (2) Criminal activity;
    (3) Participation in homeownership counseling programs; and
    (4) Evidence of regular income.