[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: 24CFR906.15]



[Page 357]

 

                 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 

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.



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