CITY OF VIRGINIA BEACH DEPARTMENT OF HOUSING & NEIGHBORHOOD PRESERVATION WORKFORCE HOUSING PROGRAM

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1 CITY OF VIRGINIA BEACH DEPARTMENT OF HOUSING & NEIGHBORHOOD PRESERVATION WORKFORCE HOUSING PROGRAM INFORMATION AND INSTRUCTIONS FOR COMPLETING AN APPLICATION TO DETERMINE PROGRAM ELIGIBILITY FOR PLACEMENT ON THE WORKFORCE HOUSING WAITING LIST FOR THE OPPORTUNITY TO PURCHASE A WORKFORCE HOUSING UNIT **Please Read the Following Information and Instructions BEFORE Completing an Application** Introduction On March 8, 2011, City Council approved the construction of the City s first Workforce Housing Development, known as Riverlake. At this time the Department of Housing and Neighborhood Preservation is accepting applications from eligible households for placement on its waiting list for the opportunity to purchase a Workforce Housing Unit in Riverlake. For information about the Workforce Housing Program, please refer to the attached Workforce Housing Program Description for Homebuyers. The Workforce Housing Program is a shared-appreciation program which means a portion of the accrued equity in the Workforce Housing Unit will belong to the City of Virginia Beach upon the sale or transfer of the unit. The program description explains this in more detail and gives examples of how the amount of equity owed to the City is calculated. The program description also explains the eligibility requirements for potential buyers, resale and refinance restrictions, and occupancy requirements attached to the Workforce Housing Units. It is highly recommended that you read the program description before continuing with this document. Overview of Riverlake The City s First Workforce Housing Development The Riverlake development is located between Indian River Road across the street from Stumpy Lake in the Centerville District. The development, once completed, will consist of 42 singlefamily, detached, 2-story 3 and 4 bedroom units with attached garages. There will be no condo fees or homeowner s association fees. Of these 42 units, 7 units are designated as Workforce Housing Units to be sold to eligible buyers under the Workforce Housing Program. Of the 7 Workforce Housing Units, 6 will be 3 bedrooms and 1 will be 4 bedrooms. Construction of the first Workforce Housing Unit is expected to be complete around June, However, weather and/or other unexpected factors could delay the start and/or completion of construction Public Schools New Castle Elementary School, Salem Middle School, and Salem High School For information on Workforce Housing sales prices for the Riverlake Development, please see the chart below: 1

2 Information on Sales Price (Initial & Discounted) 3 Bedroom Units 4 Bedroom Unit Estimated Fair Market Value (Initial Sales Price to Buyer): The initial sales price is the fair market value as determined by an $269, $289, appraisal. Workforce Housing Discount (Developer s Obligation to the City is 25% of the Fair Market Value): The City will hold a second mortgage for the amount of the Workforce Housing Discount. The City s second mortgage carries a 0% interest rate (0% APR), requires no monthly payments, and is due and $67, $72, payable to the City upon resale or transfer. In addition to the amount of the Workforce Housing Discount being owed to the City, 25% of the net appreciation in the property will also be owed to the City.* Discounted Sales Price (Amount Due to Developer): This is the estimated amount the Eligible Buyer must finance in the form of a first mortgage and/or cash. $202, $217, *Please refer to the attached program description for a more detailed explanation and examples of how the amount of accrued equity owed to the City upon resale or transfer is calculated. You can view a copy of the site layout and elevations (architect s rendering of the units) with floor plans at Eligibility Requirements for Placement on the Workforce Housing Waiting List To have your name/household placed on the Workforce Housing Waiting List, you must complete the attached Application to Determine Program Eligibility and return it to the Department of Housing and Neighborhood Preservation. For purposes of this program, a household is one or more persons living in, or intending to live in, the same Workforce Housing Unit. To be considered part of the household, children under the age of 18 must reside in the home a minimum of 26 weeks out of the year. The parent(s) must have joint custody of the child/children. To be eligible for placement on the Workforce Housing Waiting List, you must meet all of the following FIVE (5) eligibility requirements: 1. Must live or work full-time in Virginia Beach, or have a bona fide offer of full-time employment in Virginia Beach within 3 months of the time of application. At least one adult, non-dependent member of the household to be listed on the deed of trust note as a borrower must meet this requirement. Work hours per week must average a minimum of 40 hours per week in order for the work to be considered full-time. Volunteer works hours do not qualify. 2. No member of the household can own, or have a controlling interest in, other real estate property (excluding timeshares). 3. The household s combined gross annual income cannot be lower than 80% of the Area Median income (AMI), or more than 120% of the Area Median Income (AMI) adjusted for household size. Appendix A of the attached Program Description for Homebuyers contains the income limits for 80%, 90%, 100%, 110% and 120% of AMI by household size. Appendix B of the attached Program Description for Homebuyers contains the gross income guidelines (i.e. what income to count and whose income to count). 2

3 4. Net worth cannot exceed 50% of the sales price of the Workforce Housing Unit. For example, the estimated sales price of a 3 bedroom unit is $269,900.00; therefore, net worth cannot exceed $134, Appendix B of the attached Program Description for Homebuyers contains the net worth guidelines. 5. Must be able to verify that the household can pre-qualify for a first mortgage, and/or has cash assets, in the amount of the Discounted Sales Price of a Workforce Housing Unit. For example, the Discounted Sales Price of a 3 bedroom unit listed on page 2 is $202, Therefore, you must verify that you can finance $202, through either a first mortgage, or a combination of a first mortgage and cash assets. For instance, you would meet this qualification if you have $5, in your savings account and can qualify for a first mortgage in the amount of $197, ($5, $197, = $202,425.00). Additionally, the pre-qualification letter must be from a lender acceptable to the City of Virginia Beach. The City of Virginia Beach will accept pre-qualification letters only from lenders that are approved by the Virginia Housing Development Authority (VHDA). To find a list of VHDA-approved lenders, go to NOTE: In order to be admitted to the waiting list, you must have a pre-qualification letter for a minimum of $175,000.00, and meet all 4 of the other eligibility requirements listed above. The Workforce Housing waiting list is not just for the Riverlake development, but also for any future developments to be built. Although your pre-qualification letter may not be for an amount sufficient to purchase a unit in Riverlake, we still invite and encourage you to apply to secure your position on the waiting list for the opportunity to purchase any workforce housing unit to be built in the future. How To Apply - Completing and Submitting an Application to Determine Program Eligibility To have your name/household placed on the waiting list to purchase a Workforce Housing Unit, you must complete an Application to Determine Program Eligibility and return it by mail or hand delivery (faxes and s will not be accepted), along with the Workforce Housing Program Application Checklist and all required documentation, to the following address: Department of Housing & Neighborhood Preservation ATTN: Workforce Housing Program Application 2424 Courthouse Drive, Bldg. 18A Virginia Beach, VA Whether hand delivered or mailed, the application package must clearly indicate Workforce Housing Program Application. Information regarding the current income guidelines, which household members income counts toward the household s total gross annual income, what sources of income is included in the calculation of the household s total gross annual income, which assets are counted, and how income is calculated can be found in Appendix A and Appendix B of the attached Workforce Housing Program Description for Homebuyers. Before completing the Application, it is recommended that you review Appendix A and Appendix B referenced in the paragraph above, as well as all of the forms that comprise this application package. 3

4 Included in this package you will find the following documents: 1. Workforce Housing Application Checklist - this checklist must be completed and returned with your application package. The checklist is a guide as to what documents you are required to submit in order for the Department of Housing and Neighborhood Preservation to determine your household s eligibility for submission to the waiting list. Failure to submit all required documents may be cause for denial for placement on the waiting list. 2. Application To Determine Program Eligibility For Waiting List all sections of this 5 page application must be completed. The Certification and the Acknowledgement and Agreement on page 5 must be signed by the Applicant and the Co-Applicant. Failure to sign the application may be cause for denial for placement on the waiting list. 3. Certification & Authorization this form must be signed and dated by every member of the household age 18 and older. Social security numbers must be included on this form for every member of the household signing the form. The completed form must be included with the application. 4. Request for Verification of Rental Account this form must be submitted to verify the households current rental and residency information. Please read the Instructions to Renter at the top left column of this form. The Applicant(s) must submit this form to their landlord or property manager (or to the person who owns the home in which they are residing if living with family or friends) for them to fill in the requested information concerning your rental information and/or residency, and they must sign, date and provide their phone number. This completed form must be included with the application. 5. Request For Verification Of Employment this form must be completed by every member of the household age 18 and older who is employed. Please read the Instructions To Employee at the top left column of this form. The household member/employee must submit this form to their employer for the employer to fill in the requested information concerning your employment, and they must sign, date and provide their phone number. This completed form must be included with the application along with copies of the employee s 2 most recent pay stubs. This form does not need to be completed by those persons employed by the Military who receive a Leave and Earning Statement (LES). Persons employed by the Military must submit their 2 most current LES with the application. 6. Consent For The Release Of Benefit And/Or Wage Information From The Virginia Employment Commission (VEC) - if applicable, this form must be completed by any/every member of the household who receives unemployment compensation. Do not take this form to the Virginia Employment Commission (VEC); the Department of Housing and Neighborhood Preservation will submit it to the VEC as part of the application review process. The completed form must be included with the application along with a copy of the most recent check stub from the VEC for unemployment benefits. 7. Zero Income Certification if applicable, this form must be completed by any/every member of the household age 18 and older who receives no income from any of the sources of income listed on the form. The completed form must be included with the application. 8. Request For Verification Of Assets this form must be completed for every member of the household, regardless of age, who has a checking account, savings account, certificate of deposit, money market account, treasury bills, mutual funds, stocks, bonds or a lump sum or one-time 4

5 receipt, such as inheritances, capital gains, victim s restitution, insurance settlement or other amounts not intended as periodic payments. Please read the Instructions To Account Holder at the top left column of this form. The household member/account holder must submit this form to the financial institution where the account is maintained for the financial institution to fill in the requested information about your account(s), and they must sign, date and provide their phone number. The completed form must be included with the application along with copies of the account holder s most recent statement for each account listed on the form. 9. Request for Verification of Student Status if applicable, this form must be completed for any working member of the household age 18 and older who is a full-time student, but is not the applicant, head of household, or spouse of applicant or head of household. Please read the Instructions To Student at the top left column of this form. The household member/student must submit this form to their school for the school representative to fill in the requested information about you enrollment, and they must sign, date and provide their phone number. The completed form must be included with the application. The 9 documents listed above are not inclusive of everything you are required to submit as part of your application package. Other documents, as listed in the Workforce Housing Application Checklist (item #1 above) are also required to be submitted if applicable to your household. It is recommended that you determine how many of each of the above forms you will need based on your household s characteristics (i.e. who is employed, who has assets, who is a full-time student, etc.), and make the appropriate number of copies of each form. Additional forms can be obtained at How To Apply Workshops The Department of Housing and Neighborhood Preservation will conduct free public workshops at which we will explain the program requirements and guide attendees through the application and qualification process. A VDHA-approved lender may be present at the workshops to answer any questions you may have concerning financing of the first mortgage (conventional and FHA financing). The workshop times and locations are as follows (application packages will be available at the workshops): Meyera E. Oberndorf Central Library 4l00 Virginia Beach Blvd. Virginia Beach, VA Wednesday September 21, :30 8:30 pm Meyera E. Oberndorf Central Library 4l00 Virginia Beach Blvd. Virginia Beach, VA Saturday October 1, :00 am 12:00 pm Meyera E. Oberndorf Central Library 4l00 Virginia Beach Blvd. Virginia Beach, VA Monday November 14, :30 8:30 pm Attendance is not mandatory. However, attending the workshops will allow participants to ask questions in person, and often results in an easier application process. All information presented at the workshops, other than information provided by any VHDA-approved lender attending the workshop, is available in this packet, and by visiting To reserve a seat at one of the workshops, you must RSVP by calling (757) , or ing csmith@vbgov.com. Please leave a message (please speak slowly and clearly) or send an with your name, phone number, the number of people with which you plan to attend, and the date of the 5

6 workshop you wish to attend. If you are unable to attend one the above workshops, and you have questions concerning the application process, please call the Workforce Housing Program Coordinator at (757) Placement on the Waiting List Upon receipt of your application, it will be reviewed to determine if the applicant(s)/household meets the 5 eligibility requirements listed above. Applications may fall into one of two categories listed below: 1. Household Does Not Meet All of the Five Eligibility Requirements upon review of the application, if the applicant/household does not meet all five eligibility requirements listed above, the applicant/household will be declared ineligible, and an ineligibility letter will be sent to the applicant stating which requirement(s) the household does not meet. DHNP s determination of ineligibility is subject to review if the applicant so requests, in writing, within 10 days of the date of the ineligibility letter from the DHNP. 2. Household Meets All Five Eligibility Requirements - upon review of the application, if the applicant/household meets all five eligibility requirements listed above, the applicant/household will be declared eligible for placement on the waiting list, and a letter will be sent to the applicant informing them of their number on said list. Please be advised that, although not a requirement for placement on the waiting list, applicants who are purchasing a home for the first time will be required to attend a VHDA-approved first-time homebuyer s seminar prior to purchasing a Workforce Housing Unit. Applicants at or near the top of the waiting list should plan on taking a VHDA-approved seminar within a few months of placement on the list. Seminars are free of charge, and a list of seminars can be found at Reservations are required as availability of classes, as well as seating in the classes, is limited. Upon completion of the seminar, you will be issued a Certificate. You will need to provide a copy of the certificate to the Workforce Housing Program Coordinator. Management of the Waiting List Once your name is placed on the waiting list, you will be contacted with your number on the waiting list. You are responsible to ensure that the contact information on your application remains current. Please notify the Workforce Housing Program Coordinator if your mailing address or phone numbers change. If any correspondence we send you is returned because you no longer reside at the address listed on your application, your name will be removed from the waiting list. The waiting list will be updated as the Department of Housing and Neighborhood Preservation deems necessary. Once the determination is made to update the waiting list, you will be contacted by mail. A form will be mailed to you for you to complete and return by a specified date. Failure to complete and return the form by the stated deadline will result in your name being removed from the waiting list. When a unit is available for purchase and you are next on the list for the opportunity to purchase, you will be contacted. Should you opt not to apply to purchase the unit being offered, you will maintain your position on the waiting list, and the opportunity to purchase will be given to the applicant next in line on the waiting list. You will be contacted when the next unit becomes available for purchase. There is no 6

7 limit to the amount of time you can remain on the waiting list. Please be advised that the City does not maintain separate waiting lists for individual Workforce Housing Units or Developments. There is only one waiting list. New applicants will be placed on the waiting list behind existing applicants. Should you not be selected for the opportunity to qualify to purchase a unit in Riverlake, you will retain your position on the waiting list for the opportunity to qualify to purchase a unit in any Workforce Housing Developments built in the future. Being eligible for placement on the waiting list does not guarantee a household the opportunity to purchase a Workforce Housing Unit given that the demand for these units is likely to exceed the available supply. Availability of Unit(s) for Purchase If you are notified of a Workforce Housing Unit becoming available for purchase, you will be invited to an applicant briefing. At this time, you must verify your continued ability to meet the eligibility requirements that you were required to meet in order to be placed on the waiting list (see Eligibility Requirements for Placement on the Workforce Housing Waiting List above). To do this, you will need to complete an Application to Purchase a Workforce Housing Unit, which will be provided at the briefing. Program staff will be available to answer questions concerning the application process. This application is very similar to the Application to Determine Program Eligibility. Applicants will have 14 calendar days to complete and return the application, with all required documents attached, including a $50.00 non-refundable application fee, to the Department of Housing and Neighborhood Preservation. Upon receipt of an application package, program staff will review it to ensure the applicant continues to meet the 5 eligibility requirements listed above. If the applicant no longer meets all eligibility requirements, the applicant will be notified as to their ineligibility, and the applicant s name will be removed from the waiting list. If the applicant still meets all of the eligibility requirements, they will be issued a Certificate of Qualification for Eligible Buyer Status. Once the applicant is issued the Certificate of Qualification for Eligible Buyer Status, they will have 7 calendar days in which to visit the Riverlake development and purchase a unit. The Eligible Buyer must take the Certificate of Qualification for Eligible Buyer Status to the site agent as it is this form that identifies them as an Eligible Buyer of a Workforce Housing Unit. The Certificate also indicates the size of the unit the Eligible Buyer is eligible to purchase. Eligibility for unit size is not based on household size; rather it is based on affordability to households at a specific area median income (AMI). For example, the 4-bedroom units are affordable to households with incomes at 120% AMI while the 3- bedroom units are affordable to households with incomes at 110% AMI. It would be unfair to allow the household at 120% AMI buy down, that is, to purchase a unit affordable to the household at 110% AMI, when the household at 110% AMI most likely cannot afford to buy up. However, an eligible household at 120% AMI may be permitted to buy down to a 3-bedroom unit if the eligible households with incomes at 110% on the waiting list do not purchase all of the available 3-bedroom Workforce Housing Units. If more than one unit is available at the same time, the actual unit selection process will be first-comefirst-served. For example, if 3 units are available and 3 Certificates of Qualification for Eligible Buyer Status are issued to the 3 highest applicants from the waiting list at the same time, the Eligible Buyer with the highest number on the waiting list does not have 7 days to go to the site and select a unit before the next highest Eligible Buyer on the waiting list gets to go out and make a selection. All 3 Eligible Buyers may have the same 7 day period to purchase a unit. The first Eligible Buyer to select a particular unit and make a deposit gets that particular unit. The City has a 90-day window to sell the designated Workforce Housing Units to Eligible Buyers from the Workforce Housing Waiting List. After the 90-day period, if 7

8 the City has not facilitated the sale of a Workforce Housing Unit to an Eligible Buyer, the developer then has the right to sell the unit to whomever he pleases, and the City loses that unit as a Workforce Housing Unit. If the Eligible Buyer does not select a unit within the 7 calendars days, on the eighth day Eligible Buyer Status is terminated. The applicant will retain their position on the waiting list, and a Certificate of Qualification for Eligible Buyer Status will be issued to the next Eligible Buyer on the waiting list. If the Eligible Buyer wishes to purchase a unit, the Eligible Buyer and the developer, or his authorized agent, shall sign a Workforce Housing Unit Selection Certificate identifying the unit selected, the Initial Sales Price, the amount of the Workforce Housing Discount, and the Discounted Sales Price (the amount due to the developer), along with any other documentation required by the developer, or his authorized agent. The Eligible Buyer will also put down a deposit on the unit at this time. The developer, or his authorized agent, shall notify the City that an agreement to purchase a particular unit has been reached, and the City will prepare a Workforce Housing Participation Agreement and a Workforce Housing Equity Sharing Agreement to be signed by the City and Eligible Buyer, and a Disclosure and Certification to be signed by the Eligible Buyer. Note: The Workforce Housing Participation Agreement, Equity Sharing Agreement and the Disclosure and Certification are available for review on the Department of Housing and Neighborhood Preservation s website at Application to Lender for First Mortgage The Eligible Buyer shall have 5 working days from the date of the Workforce Housing Participation Agreement referenced above, to make application to a lender, and shall have 15 working days from the date of said Agreement to provide the lender and the City any forms or other materials as may be required by the lender or City. Upon making application to a lender, the Eligible Buyer needs to notify the Workforce Housing Program Coordinator with the name and phone number of the lender. Failure to make application to a lender within 5 days shall result in Eligible Buyer status being terminated. Should Eligible Buyer Status be terminated, the applicant will retain their position on the waiting list, and a Certificate of Qualification for Eligible Buyer Status will be issued to the next Eligible Buyer on the waiting list. The Workforce Housing Program Coordinator will follow-up with the Eligible Buyer and the lender during loan processing and underwriting to check on the status of the loan. If the Eligible Buyer is unable to obtain the loan referenced above, Eligible Buyer status will be terminated. Should Eligible Buyer Status be terminated, the applicant will retain their position on the waiting list, and a Certificate of Qualification for Eligible Buyer Status will be issued to the next Eligible Buyer on the waiting list. Upon notification of loan approval, the Eligible Buyer shall contact the Workforce Housing Program Coordinator, who will contact the lender to obtain the name and phone number of the settlement agent handling the closing. Settlement Agent/Loan Closing The Workforce Housing Program Coordinator will be in contact with the settlement agent, and will provide the necessary instructions and legal documents to said agent. At closing, the Eligible Buyer shall 8

9 sign all documents required by the lender of the first mortgage, along with the City s Workforce Housing Deed of Trust, Workforce Housing Promissory Note, Workforce Housing Equity Sharing Agreement and HUD-1 Settlement Statement for the City s second mortgage. Note: The Workforce Housing Deed of Trust and Promissory Note are available for review on the Department of Housing and Neighborhood Preservation s website at The Eligible Buyer shall pay all points, loan origination fees, charges and other costs imposed by the lender or otherwise incurred in connection with obtaining and closing the loan or loans. The fees charged by the City for the second mortgage are as follows: 1. A non-refundable application fee in the amount of $50.00 paid at the time the Eligible Buyer submits their residential loan application to the City when they are pulled from the waiting list. 2. A Program Administration Fee of $ due at the time of closing. This fee cannot be financed in either the first or second mortgage. In the event the Eligible Buyer does not close on a loan, the City shall only be entitled to the $50.00 nonrefundable residential loan application fee; not the $ program administration fee. Should you have any questions regarding the application process, contact the Workforce Housing Program Coordinator at (757) DHNP DOES BUSINESS IN ACCORDANCE WITH THE FEDERAL FAIR HOUSING LAW AND THE SECTION 504 PROGRAM ACCESSIBILITY REQUIREMENTS IT IS ILLIGAL TO DISCRIMINATE AGAINST ANY PERSON BECAUSE OF RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL STATUS OR NATIONAL ORIGIN 9