An Outline of Affordable Housing Covenants for Sales Units
If you are interested in owning an affordable home, your should familiarize yourself with these covenants or restrictions that all owners must adhere to.
A. The property may be conveyed only to a household who has been approved in advance and in writing by the administrative agent appointed under the Regulations (hereinafter, the “Administrative Agent”).
B. No sale of the Property shall be lawful, unless approved in advance and in writing by the Administrative Agent, and no sale shall be for a consideration greater than maximum permitted price (“Maximum Resale Price”, or “MRP”) as determined by the Administrative Agent.
C. No refinancing, equity loan, secured letter of credit, or any other mortgage obligation or other debt (collectively, “Debt”) secured by the Property, may be incurred except as approved in advance and in writing by the Administrative Agent. At no time shall the Administrative Agent approve any such Debt, if incurring the Debt would make the total of all such Debt exceed Ninety-Five Percent (95%) of the applicable MRP.
D. The owner of the Property shall at all times maintain the Property as his or her principal place of residence.
E. At no time shall the owner of the Property lease or rent the Property to any person or persons, except on a short-term hardship basis as approved in advance and in writing by the Administrative Agent.
F. No improvements may be made to the Property that would affect its bedroom configuration, and in any event, no improvement made to the Property will be taken into consideration to increase the MRP, except for improvements approved in advance and in writing by the Administrative Agent.
G. Owners may not transfer, add to, subtract from, or modify the ownership interest of the Property, except as outlined above, or as may otherwise be provided by regulation as “exempt transaction”, i.e., “…transfer of ownership between husband and wife; the transfer of ownership between former spouses ordered as a result of a judicial decree of divorce or judicial separation, but not including sales to third parties; the transfer of ownership between family members as a result of inheritance; the transfer of ownership through an executor’s deed to a class A beneficiary; and the transfer of ownership by court order.” (N.J.A.C.5:80-26.2)
This Outline is provided as a quick reference for your convenience only and does not represent the full terms and conditions or replace the actual documentation and required deed restrictions.
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