HUD Publishes HOMEfires Vol. 15, No. 1: Appraisal-based Resale Formulas
This issue of HOMEfires provides guidance to Participating Jurisdictions (PJs) on using an appraisal-based resale method to meet HOME program requirements. Resale requirements submitted for HUD approval must establish an objective method for determining a fair return to the original homebuyer and ensure that the housing will remain affordable to a reasonable range of low-income homebuyers.
Under previous guidance, the use of an appraisal to determine fair return on investment was not explicitly stated as an acceptable objective method. The Office of Affordable Programs (OAHP) is now clarifying that an appraisal-based resale method can be accepted along with the other resale methods outlined in Notice CPD-12-003 (i.e., fair return calculated by determining homeowner’s initial investment and any capital improvements the homeowner made to the property subject to an objective, standard index).