Lets Do The MATH
Total Cost is the price Home Partners pays for the home, closing costs, make ready and repairs/maintenance costs. Total Cost is used to determine the resident's Right to Purchase prices. A sample is highlighted below:300
Purchase Price $200,000
Closing Costs* $3000
Make Ready and Repairs/Maintenance Costs. $7,000
Total Cost $210,000
*Includes costs such as transfer taxes, attorneys' fees, title insurance, other acquisition costs, etc
Monthly Rent Increases
Each year, a resident's Monthly Rent increases by no more than 3.75% over the previous year’s Monthly Rent.
For example, if the Monthly Rent for Year 1 is $1,400 per month, the increase for the next year is $50/month (i.e., $1,400 x 1.0375)*.
Year 1 $1,400
Year 2 $1,450
Year 3 $1,500
Year 4 $1,560 (Does not apply in Texas)
Year 5 $1,620 (Does not apply in Texas)
Right to Purchase Price Increases
Each year, the Right to Purchase Price increases by 3.5%-5% (depending on the region).
In the example, if the Total Cost of the home is $210,000 and if the Right to Purchase increases by 5% (i.e., Prior Year Purchase Right Price x 1.05)* then the Purchase Right Price for Years 1-5 is as follows:
Year 1 $220,500
Year 2 $231,500
Year 3 $243,100
Year 4 $255,300 (Does not apply in Texas)
Year 5 $268,000 (Does not apply in Texas)
There are additional costs that the resident will incur if they exercise the Right to Purchase such as closing costs to purchase the home, including transfer taxes, attorneys' fees, title insurance, and the cost of a mortgage loan. As a result, actual total costs to exercise the Right to Purchase will vary.
* Rent will round to the nearest $10. Right to Purchase Price will round to the nearest $100.