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Selecting Buyers- How We Choose Between Qualified Applicants

Selecting Buyers- How We Choose Between Qualified Applicants

 

Given the crisis of supply that limits the number of affordable homes for sale in King County, Homestead has multiple buyers for each home it sells. How do we decide who can purchase the home when there are more buyers than homes?

As an Equal Housing Opportunity program, we avoid discrimination – against or in favor of – any protected class. Under federal law, protected classes include race, color, national origin, religion, sex, age, or disability. Homestead’s non-discrimination policy states we will not discriminate against any homebuyer on the basis of race, color, national origin, religion, sex, creed, same-gender relationship, age, disability, sexual orientation, gender identity, marital status or familial status.

We therefore select from equally qualified applicants using criteria that does not violate Fair Housing laws. We apply the following criteria to sort applicants to determine who gets the first opportunity to purchase a home:

 

Minimum Criteria

  • First and foremost, each applicant must have income that is neither too high (over our income limits), nor too low (unable to buy the home without cost burden).
  • Applicants must also be able to secure a conventional 30-year fixed-rate mortgage (or Halal home purchase financing)
  • Applicants must contribute at least 1% of the home purchase price as a downpayment

 

Special Criteria

The purchase of some homes are subject to special qualifying criteria, such as an income level that is lower that 80%, or the applicant must be certified as housing unstable*. Some homes may be subject to Community Preference** criteria. These special criteria, which are specific to certain homes and developments, are considered second after Minimum Criteria. If a home is subject to special criteria that will be noted in the marketing for that home.

 

Tie-Breaking Criteria

Tie-breaking criteria are used in cases where there are no other special criteria, or after the consideration of special criteria. These include:

1. Lowest percent of Average Median Income (AMI).

The lower the AMI the higher the score. In the event of an overall tie, the household that has the lowest percent of gross income based on household size will break the tie.

2. Number of bedrooms matches household size.

If household size is the same or higher number of bedrooms the applicant scores higher than if household size is less than the number of bedrooms.

3. Homeless/Housing Unstable.

Applicants will receive credit if they meet the FHLB definition for being housing unstable (see below). This must be verified by an independent third party via a signed document.

4. Ties to the area.

Does the household currently reside in the neighborhood? Yes or No
Does any member of the household work in the neighborhood? Yes or No
Is there a child in the neighborhood school district? Yes or No

5. Employed in the municipality or King County.

Any household employed within King County
Any household member employed within the same municipality as the home they are applying for

6. Turned down previously for home in tie assessment.

An applicant is awarded points if they have lost a tie-breaker for a Homestead home in the past.

The household with the highest points is given the first opportunity to purchase. If that person is disqualified or declines to purchase the home, the next person in line is offered the opportunity purchase.

In the event of a tie, the property is offered to the household with the lowest median income based on household size.

If a tie persists, the names will be drawn via lottery.

 

*Federal Home Loan Board Definition of Homeless or Housing Unstable

“HOMELESS” means a household made up of one or more individuals, other than individuals imprisoned or otherwise detained pursuant to state or federal law, who:

1) lack a fixed, regular, or adequate nighttime residence; or

2) have a primary nighttime residence that is:

a)     a supervised publicly or privately owned operated shelter designed to provide temporary living accommodations (including welfare hotels, congregate shelters, and transitional housing for the mentally ill); or

b)     a public or private place not designated for, or ordinarily used as, a regular sleeping accommodation for human beings, including a car, park, abandoned building, bus or train station, airport, camping ground, etc.

Additionally, households will be considered homeless if they:

a)     are fleeing or attempting to flee domestic violence or other dangerous or life threatening conditions;

b)     will imminently lose their housing, including housing they own, rent, or live in without paying rent or are sharing with others; or

c)      are “doubled-up” temporarily in any other household’s dwelling unit.

If a home is subject to this criteria, interested applicants must submit the Affordable Housing Program Homeless Certification signed by a qualified service provider.

 

**Community Preference

Some homes sold in the City of Seattle may be sold under the guidelines of the City’s Community Preference Policy.  This policy gives those who have been displaced from an area the first opportunity to purchase publicly funded homes for sale in that area.  Areas where the policy applies are those the City has deemed to have experienced or at risk of displacement.

Homes sold under community preference guidelines will be identified as such during the sales process.  Homebuyer selection in community preference will be based:

  1. First by Minimum Qualifying Criteria (see above)
  2. Second by Historic ties to the area. To provide verification of these ties we utilize the recommendations provided here: Community Preference Verification Documents.
  3. Third by other Tie-Breaking Criteria (see above).

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