DRAFT Morrisville Affordable Housing Plan, September 23, 2019 version

DRAFT SEPTEMBER 23, 2019

PART 1 | The Regional Market 3 Recomme dations for Taking Action

ESTABLISH A COMMUNITY SERVANT HOUSING CHOICE PROGRAM

Shared Equity A shared equity component would provide a loan investment covering a specified share of a home purchase in Morrisville. The investment would stay with the home and the Town would receive the share back (including any appreciation) at resale.

$65k/YR

Example

A Morrisville police officer and their spouse have a combined household income of $65,000 and currently rent in Morrisville with a two-month-old baby. Their home purchasing power is around $195,000 – well below median home values in the town. They find a house they like priced at $250,000. The Town agrees to a 25% shared equity stake in the purchase , which brings the amount the family needs to cover down to $187,500 – helping them qualify for a conventional loan. When the family sells, the Town will receive 25% of the fair market selling price.

$195,000

Purchasing Capacity

$250,000

FOR SALE

(Below the median home values)

-$62,500 Town agrees to 25% shared equity stake in purchase $187,000 Reduced amount family needs to cover

SOLD

Couple secures loan and purchases home.

Cost Scenarios

Assuming that the typical shared equity investment would be $60,000 … $300,000 would aid 5 home purchases per year $600,000 would aid 10 home purchases per year $900,000 would aid 15 home purchases per year

…with the Town receiving its share of equity back when the participating employees sell (and sharing in potential gains or losses).

Affordable Housing Plan for Morrisville, NC | 2019

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