[Code of Federal Regulations] [Title 24, Volume 4] [Revised as of April 1, 2006] From the U.S. Government Printing Office via GPO Access [CITE: 24CFR904.101] [Page 302-304] TITLE 24--HOUSING AND URBAN DEVELOPMENT CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PART 904_LOW RENT HOUSING HOMEOWNERSHIP OPPORTUNITIES--Table of Contents Subpart B_Turnkey III Program Description Sec. 904.101 Introduction. Subpart A--Introduction to Low-Rent Housing Homeownership Opportunity Program [Reserved] Subpart B_Turnkey III Program Description Sec. 904.101 Introduction. 904.102 Definitions. 904.103 Development. 904.104 Eligibility and selection of homebuyers. 904.105 Counseling of homebuyers. 904.106 Homebuyers Association (HBA). 904.107 Responsibilities of homebuyer. 904.108 Break-even amount. 904.109 Monthly operating expense. 904.110 Earned Home Payments Account. (EHPA) 904.111 Nonroutine Maintenance Reserve (NRMR). 904.112 Operating reserve. [[Page 303]] 904.113 Achievement of ownership by initial homebuyer. 904.114 Payment upon resale at profit. 904.115 Achievement of ownership by subsequent homebuyers. 904.116 Transfer of title to homebuyer. 904.117 Responsibilities of homebuyer after acquisition of ownership. 904.118 Homeowners association-planned unit development (PUD). 904.119 Homeowners association-condominium. 904.120 Relationship of homeowners association to HBA. 904.121 Use of appendices. 904.122 Statutory preferences. Appendix I to Subpart B--Annual Contributions Contract Appendix II to Subpart B--Homebuyers Ownership Opportunity Agreement (Turnkey III) Appendix III to Subpart B--Certification of Homebuyer Status Appendix IV to Subpart B--Promissory Note for Payment Upon Resale by Homebuyer at Profit Subpart C_Homeownership Counseling and Training 904.201 Purpose. 904.202 Objectives. 904.203 Planning. 904.204 General requirements and information. 904.205 Training methodology. 904.206 Funding. 904.207 Use of appendix. Appendix I to Subpart C--Content Guide for Counseling and Training Program Subpart D_Homebuyers Association (HBA) 904.301 Purpose. 904.302 Membership. 904.303 Organizing the HBA. 904.304 Functions of the HBA. 904.305 Funding of HBA. 904.306 Performing management services. 904.307 Alternative to HBA. 904.308 Relationship with homeowners association. 904.309 Use of appendices. Appendix I to Subpart D--Articles of Incorporation and By-Laws of Homebuyers Association Appendix II to Subpart D--Recognition Agreement Between Local Housing Authority and Homebuyers Association Authority: 42 U.S.C. 1437-1437ee and 3535(d). Source: 39 FR 10966, Mar. 22, 1974, unless otherwise noted. Redesignated at 40 FR 15580, Apr. 7, 1975, and further redesignated at 49 FR 6714, Feb. 23, 1984. Subpart A--Introduction to Low-Rent Housing Homeownership Opportunity Program [Reserved] (a) Purpose. This subpart sets forth the essential elements of the HUD Homeownership Opportunities Program for Low-Income Families (Turnkey III). (b) Applicability. This subpart is applicable to Turnkey III developments operated by LHA. For Turnkey III developments operated by an Indian Housing Authority, applicable provisions are found at 24 CFR part 905, subpart G. (1) With respect to any development to be operated as Turnkey III, the Annual Contributions Contract (ACC) shall contain the ``Special Provisions for Turnkey III Homeownership Opportunity Project'' as set forth in Appendix I. A Turnkey III development may include only units which are to be operated as such under Homebuyers Ownership Opportunity Agreements. If for any reason it is determined that certain units should be operated as conventional rental units, such units must comprise or be made part of a conventional rental project. (2) With respect to Turnkey III developments pursuant to an executed ACC where no Agreements with Homebuyers have been signed, the ACC shall be amended (i) to include the ``Special Provisions'' set forth in Appendix I, (ii) to extend its term to 30 years, and (iii) to reduce its Maximum Contribution Percentage to a rate that will amortize the debt in 30 years at the minimum Loan Interest Rate specified in the ACC for the specific Turnkey III project involved. Further development and operation shall be in accordance with this subpart including use of the form of Homebuyers Ownership Opportunity Agreement set forth in Appendix II. [[Page 304]] (3) With respect to developments where Agreements with homebuyers have been signed, the following steps shall be taken: (i) The ACC shall be amended to include the Special Provisions'' set forth in Appendix I; further development and operation of the Project shall be in accordance with this subpart. (ii) The LHA shall offer all qualified homebuyers in the development a new Homebuyers Ownership Opportunity Agreement as set forth in Appendix II with an amendment to section 16a to refer to ``the latest approved Development Cost Budget, or Actual Development Cost Certificate if issued,'' in lieu of ``the Development Cost Budget in effect upon award of the Main Construction Contract or execution of the Contract of Sale,'' and, if the ACC for the Project has a term of 25 years, an amendment to section 16(b) to refer to a term of 25 years, instead of 30, for the Purchase Price Schedule. Each Purchase Price Schedule shall commence with the first day of the month following the effective date of the initial Agreement. No other modification in the new Agreement may be made. In the event the homebuyer refuses to accept the new Agreement, no modifications may be made in the old Agreement and the matter shall be referred to HUD. (4) With respect to Projects which were under ACC on the effective date of this subpart, the Total Development Cost Budget shall be revised, if financially feasible, to include the cost of the appraisals which are necessary for computation of the initial purchase prices pursuant to Sec. 904.113. In the event this is not financially feasible, the matter shall be referred to HUD, which may, if necessary, authorize a different method for computation of such initial purchase prices on an equitable basis. (5) With respect to all developments which were completed by the effective date of this subpart, the appraisals which are necessary for computation of the initial purchase prices pursuant to Sec. 904.113 shall be made as of the date of completion of the development. [39 FR 10966, Mar. 22, 1974. Redesignated at 40 FR 15580, Apr. 7, 1975, and 49 FR 6714, Feb. 23, 1984, and amended at 56 FR 922, Jan. 9, 1991]