What date does NSP use as the beginning of the 5-20 year affordability period?

Date Published: July 2013

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The affordability period for homeownership programs begins on the date of the purchase and loan closing (generally the same date.)          

For rental projects, the affordability period begins when the project reaches stabilized occupancy (sometimes called "break-even" cash flow) generally about 80-90% occupancy.        

For lease-purchase type programs, the period starts on the date of the lease for initial occupancy of the property. HUD recommends that  the lease period count toward the affordability period if and only if the same family purchases the home or stays in the home as permanent rental.  If the original occupants are not able or willing to purchase the home, and the home is then sold to a different family, the affordability period should start at the date of sale to the new occupants.         

Note that, unlike HOME, lessees are not required to purchase within 36 months in NSP. The home may remain a rental for a longer period without automatically converting to rental status. This allows more time for markets to stabilize and for families to become credit-worthy. HUD recommends offering rental units first to the families renting them, but does allow sale to a different family if necessary.

Tags: NSP Program Requirements - Affordability Period