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Co Setting and Adjusting the Contract Price <br /> In executing a home sales agreement, Developer may not agree to a contract price that <br /> is less than the amounts described above without the written approval of Grantee, <br /> except that Developer may amend the contract price in a home sales agreement to be <br /> equal to the market value of the home as determined by a first mortgage lender' s <br /> appraisal . <br /> D . Adjustment in Contract Price <br /> For_purposes of NS133 compliance , any such reduced prices shall be considered to be the <br /> current market value of the home , regardless of the value determined by any prior <br /> appraisal . Note that no NSP3 Home can be sold for more than the total development <br /> cost, per NS133 rules . <br /> E . NSP3 Development Subsidy When Investment Exceeds Market <br /> Value <br /> When development costs exceed market value, the portion of NS133 funds advanced to <br /> the project that are above the market value become a development subsidy to the <br /> project . Neither the Developer nor the homebuyer is required to repay NSP3 funds used <br /> for an approved development subsidy . (The homebuyer, however, will be subject to <br /> recapture provisions for the amount of any Homeowner Financial Assistance as defined <br /> herein — which subsidizes the contract price of the home and possibly closing costs as <br /> well . ) <br /> F . Determining Market Value , to Establish the Development Subsidy <br /> The development subsidy is calculated with the following formula , according to the <br /> HOME program rules that are referenced as a "safe harbor" for the NSP3 program . <br /> Total development cost <br /> ( Minus ) current market value <br /> ( Equals ) the development subsidy <br /> If an NSP3 home is sold for a price equal to the after- construction / rehab appraised <br /> value, then the appraised value is deemed to be market value . Moreover, if the price of <br /> a home has been reduced due to a lack of qualified offers after adequate marketing and <br /> sales efforts over a reasonable period of time ( as described above ) , the reduced selling <br /> price will be considered market value for purposes of calculating the development <br /> subsidy . , <br /> G . Accounting for Expenditures <br /> Developer will account for total NSP3 expenditures per home by means of assigning an <br /> accounting code for NSP34unded or reimbursed expenses for each property and <br /> another accounting code, if applicable , for non - NSP3 funded expenditures ( if any ) . At <br /> 14 <br />