As soon as a developer knows when a workforce housing unit will become available for sale, he/she should notify the city. Should the city decide not to purchase the unit, it will become available to an eligible buyer. An eligible buyer is defined as "a household whose Workforce Housing application has been approved and who meets all the home ownership requirements of the Workforce Housing Program.
For information about the city's right to purchase, click here.
The city will maintain a list of households who have been pre-screened and determined to be eligible buyers. Once a workforce housing unit becomes available for sale, the city will verify that the eligible buyer continues to meet all program eligibility standards and provide them with documentation identifying them as a workforce housing eligible buyer so that they may visit the property to determine if they are interested in purchasing the unit.
Once an eligible buyer desires to purchase a workforce housing unit, he/she will sign a sales agreement with the developer and notify the city. At that point, the developer will enter into a workforce housing participation agreement with the city whereby he/she agrees to sell a specific workforce housing unit to the eligible buyer. The eligible buyer also enters into a workforce housing participation agreement with the city, which states that the city has entered into an agreement with the developer for the developer to sell a specific workforce housing unit to the eligible buyer. This agreement specifies the Initial Sales Price (the consideration paid for the workforce housing unit by the eligible buyer) to be paid by the eligible buyer for the unit and the Discounted Sales Price (the consideration paid for the workforce housing unit to the developer) to be paid to the developer. At the closing, the developer sells the unit to the eligible buyer at fair market value (i.e. the Initial Sales Price). The eligible buyer will use a first mortgage loan for the Discounted Sales Price and a second mortgage loan provided by the city for the amount of the Workforce Housing Discount (the difference between the Initial Sales Price and the Discounted Sales Price). To view the Participation Agreements, click here.
It is important to note that in the case of a sale between the developer and an eligible buyer, the developer surrenders the amount of the workforce housing discount to the city, which in turn makes the discount available to the eligible buyer in order to buy down their first mortgage. There is no actual money changing hands; it is a paper transaction at this point.