It is the policy and intent of the program to support and encourage communities to develop innovative responses to their workforce housing challenges. Project structure however, must demonstrate a method to ensure:
(a) Constraints are in place that prevent unduly enriching a developer/builder. - (i) This may include but is not limited to the following method: to ensure the land developer or homebuilder is not unduly enriched as a result of the public investment for the workforce housing infrastructure, the applicant, developer and builder shall enter into a development agreement that includes the following cost information for the lot and the house:
- (A) Developer lot cost: the developer shall provide cost information for the workforce housing subdivision. The costs shall include but are not limited to, land costs, on-site and off-site improvement costs (i.e. water, sewer, roads), materials and labor, soft costs including design and planning, consultant fees, permitting costs, construction interest and developer fees (developer fees shall be limited to no more than 1 5% of development costs). This information will be used to determine the developer cost for each lot.
- (B) Public investment lot cost: the applicant shall provide cost information for the eligible workforce housing infrastructure as outlined in Chapter 1, Section 5. This information will be used to determine the public investment cost for each lot.
- (C) House cost: the builder shall provide cost information for the workforce housing. The cost shall include but are not limited to, cost of construction including materials and labor, soft costs including design and planning, consultant fees, permitting costs, construction interest and builder profit, overhead and general requirements (this shall be limited to no more than 14% of builders costs).
- (D) As part of the development agreement the applicant shall place a lien on each workforce housing lot. For example, if the public investment cost to construct the workforce housing infrastructure is $300,000 and 30 workforce housing lots will be developed the lien amount per lot would be $10,000. The lien is filed with the county clerk along with the final plat of the subdivision or at the time the workforce housing infrastructure loan is executed if the plat was previously filed. All homes sell for the predetermined lot cost, plus house cost as identified in the development agreement. At the time of closing the sale price of the home to the homebuyer is reduced by the per lot cost of the public investment for the workforce housing infrastructure. The homebuyer has two payments, one to their mortgage company and the other to the applicant of the workforce housing loan i.e. city, town, county, special improvement district, joint powers board or tribe.
(b) Constraints are in place to prevent speculators from buying a house in order to quickly sell at a profit. - (i) This may include but is not limited to the following: The homebuyer shall live in the house for a minimum of 5 yrs in order to receive the benefit of the lower workforce housing loan interest rate. If the homebuyer sells the house before five years from the date of closing, the interest rate would then be calculated at the same rate as the first mortgage. The loan may be assumed by the new homeowner if the family gross income is at or below 120 percent of the area median income.
(c) The public investment is passed on to the home buyer.
(d) Loan repayment.
(e) Loan collateralization.
(f) Land trust requirements are satisfied.