The Carlisle Mosquito Online

Friday, June 23, 2006


Over 160 to compete for affordable housing in Laurel Hollow lottery

"You do not win a home," began Maureen O'Hagan of MCO Housing Services, regarding the Laurel Hollow affordable housing lottery. This came as no surprise to the 20 prospective entrants gathered in the Clark Room, but based on her experiences in the past, O'Hagan wanted to leave no doubt. "You win a chance to buy a home," she informed the group at the June 14 public information session. O'Hagan's company has the job of running the lottery, and she wants to make sure that everyone knows the rules. "The purpose of this public information meeting is to answer specific questions regarding the upcoming June 29 lottery and to provide an overview of the process."

Two affordable units in eight-unit development

There are eight town home units in Laurel Hollow. Six of the units have already been sold at market rate of over $700,000 apiece. The project is divided into two lots, each with four units and each lot with its own association to ensure that members of the affordable units have equal voting power. The two affordable units are located in the first building on the left as you enter the Rocky Point driveway. Both units of affordable housing are 1,900-square-foot town houses, with a sale price of $165,000. The units have two bedrooms, 1.5 baths and two-car garages.

Lottery details

O'Hagan has already received 165 applications for the affordable housing lottery. All applications must be received or postmarked by midnight on or before June 21 to be considered. The lottery will be broken down into two pools — Local and At-Large — and local preference will be given to applications for one of the two units. Eligibility requirements include asset and income limits. To qualify for the local preference pool, applicants must be current Carlisle residents, or the adult child or parent of a resident, or a town employee, or employed by the Concord-Carlisle Regional School District. All local applicants must provide documentation such as tax forms, rental receipts or a postmarked utility bill in order to prove local status. Local applicants have two opportunities by being in both the Local and At-Large pools to "win" a unit.

Maximum allowable income ranges from $46,300 for a single adult, to $66,150 for a family of four. Preference will be given to families with children, and then to couples over single adults. This means if you are a two-person household with no children and are drawn first in the lottery, MCO will move on to the first applicant that meets the preference criteria and then offer them the unit. Second preference is for a two-person household without children; third preference is for single person households. The definition of a dependent child is up to 18 years old or a full-time college student and a dependent on the parent's federal income tax return. A non-dependent individual 18 or over is considered an adult, and the household may not be eligible for the primary preference criteria.

Lottery applicants must meet the allowable income limits:

Applicants must have not owned a home as a principal residence for a period of three years. There is an exception for someone who owned a home with a spouse and had to sell it recently as part of a divorce. Applicants must have $50,000 or less in household assets. All affordable units must be owner-occupied. They cannot be rented or leased.

Buyers of affordable units are encouraged to secure a fixed-rate mortgage, typically 30-year. Non-household members may not be mortgage co-signers. O'Hagan strongly recommends that buyers obtain their mortgage through a bank that is willing to accept the deed restrictions that must be placed on the mortgage. "A buyer who makes arrangements through a mortgage company may find a week before the closing that the mortgage company won't accept the deed restriction and the buyer then loses the home."

Deed restrictions are used to ensure the units are affordable for future buyers and are attached to the property in perpetuity. To remain in effect in perpetuity, the restrictions are written as a deed-rider. However, this proved to be difficult when Fannie Mae insisted that deed restrictions terminate in cases of mortgage foreclosure (see Mosquito, June 16). O'Hagan expects that they will use a revised permanent deed-rider to circumvent this problem, but final details have not been worked out.

Resale price calculation

The maximum resale price is determined using a Resale Price Multiplier (RPM), a figure calculated by taking the initial sales price and dividing it by the area median income. O'Hagan provided an example: the initial two-bedroom affordable town home unit price is $165,000 and the current area median income is $84,100. The RPM would be $165,000/$84,100 = 1.96.

Upon resale, the RPM is multiplied by the updated area median income to determine the maximum retail price. For example, if the original buyer decides to sell the unit in five years and the current median income has increased to $87,000, the resale price would be $87,000 x 1.96 = $170,520. In addition, the Monitoring Agent receives a resale fee that can be added to the maximum resale price. The fee is equal to 2.5% of the set new purchase price ($170,520 x 2.5% = $4,263). The total resale price would be $174,783.

The actual lottery process is surprisingly low-tech. No computer selection, no random number generator — the names are pulled out of something akin to a hat. All of the applicants in the pool will be pulled at the time of the lottery. This will establish the rankings for the distribution of the units. For example, if there are 60 local applicants for the lottery, the first applicant that meets the preference criteria would have the opportunity to purchase the unit, and the remaining 59 applicants would establish the waiting list if the initial "winner" is unable to purchase.

The lottery will be held at 7 p.m., June 29, in the Clark Room at the Carlisle Town Hall. Though not required, applicants are encouraged to attend. The first affordable units are slated for July/August 2006 occupancy. To all those applicants who dream of a new home, O'Hagan ended the information meeting by wishing them all, "Good Luck!"

2006 The Carlisle Mosquito