Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
2
Field Guide to Affordable Housing
Look Before You Leap!
There’s no doubt about it. The idea of owning a home—possibly
the first place you can call your very own—is exciting! When
looking at the listings, almost anything seems possible. Dream away
... but how about a reality check? Can you really handle it? Let’s
take a look.
What’s in a name?
APCHA (APP-sha), the Housing Authority, Housing Board,
Housing Office, Affordable Housing, Employee Housing, Deed-
restricted Housing, Work Force Housing ... they’re all the same: a
program coordinated by the City of Aspen and Pitkin County in a
proud effort to keep the community in our community.
The Housing Board develops policy, the Aspen City Council and
Board of County Commissioners review, deliberate and put policy
into action. APCHA administers the program from offices located
in the Court House Plaza Building, 530 East Main Street, Aspen.
It’s a Wonderful Life.
Aspen has an entirely unique character that attracts, well, entirely
unique characters who visit, live, work and retire in the valley.
Booming resort real estate prices have made it difficult if not
impossible for local employees and business owners—the very
people who keep the community and the community spirit going—
to live where they work.
APCHA intends this booklet as a general guide and not as a legal document.
All information is subject to change without notice.
City and county employee housing programs were instituted in
1974, combined in 1982 and reorganized as APCHA in 1988 to
foster public and private development of Affordable Housing for
resident workers.
The Affordable Housing program is a vital component of the
Aspen Area Community Plan that advances key principles
including sustainability, diversity, preservation and quality of life.
APCHA makes housing available to full-time employees who could
not otherwise afford to own a home and build a life as part of the
community they support. Homes are categorized according to
incomes/asset level and the number of household members.
This booklet focuses on the Affordable Housing ownership program
that oversees several hundred homes and plans future
developments. “Affordable” means not only limited cost of
purchase, but also restricted property deeds and limited returns
when selling.
Established APCHA Guidelines—all sixty-some pages!—spell out
specific eligibility requirements for potential buyers and the simple
steps in an orderly process for bidding, buying, owning and selling.
Affordable Housing rental units and a special type of Resident-
Occupied (RO) units are explained in the Guidelines but not
reviewed here.
Of course, Affordable Housing ownership carries serious
responsibilities. Each complex is governed by a Home Owners’
Association (HOA) under Deed Restrictions, Covenants, Bylaws,
Declarations, Rules and Regulations specific to that complex.
Don’t be confused by the different terms that HOAs use—they’re
all rules or statutory requirements that establish how a complex is
managed and operated.
APCHA website: www.aspenhousingoffice.com
Guidelines, current sales listings, forms, Home Owners’
Association documents for each complex, and other helpful
information are posted on the APCHA website.
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
4
Table of Contents
Glossary . . . . . . . 4
Definitions of Affordable Housing terms
First Things First . . . . . . 7
Who is eligible; why Affordable Housing is affordable;
Deed Restrictions, HOAs, Capital Reserves.
Budget Worksheet . . . . . 9
Will your nest egg be enough?
Eligibility: Square Peg in a Round Hole? . . 12
Affordable Housing qualifications and categories
Category Table. . . . . . . 13
See where you fit in
Application: Mighty are the Preparations . . 14
Application process, checklist of supporting documents
Bidding: Chart Your Course . . . . 18
Listings, bid process and timetable, priorities, the lottery
Buying: Put Your Ducks in a Row . . . 21
Negotiating the sales contract, financing and
inspection checklists, closing the sale
Owning: It’s Affordable Housing! Big Brother’s
Going to Look After Me, Right? . . . 27
Rights and responsibilities of ownership,
HOA participation, home maintenance,
capital improvements, compliance
Selling: Can’t Put Lipstick on a Pig . . . 30
Maximum Sales Price, Minimum Standards, fees
Glossary
All definitions are in reference to the Affordable Housing program and not intended as legal definitions.
Affidavit of Lawful Presence: sworn written statement that
applicant is in the US legally
Amendments to Protective Covenants: changes and/or
additions to HOA Declarations, rules and regulations; same as
Supplemental Declarations of Covenants
APCHA: Aspen Pitkin County Housing Authority; office located
in Courthouse Plaza, Lower Level, 530 East Main Street, Aspen;
www.aspenhousingoffice.com
APCHA home: specific residence, unit, condominium or
freestanding home in an Affordable Housing complex
Articles of Incorporation: legal certificate issued by the state
empowering an HOA to conduct prescribed business of
administering and managing an Affordable Housing complex
Assessment: periodic or special charge to owners to meet a
particular or immediate need or to fund Capital Reserves
Bid period: two weeks following initial sales listing of an
Affordable Housing home during which bids are accepted
Bylaws: corporate rules for conducting business
Capital Reserve: HOA policy regarding depreciation, capital
repairs and replacements; Capital Reserves are funds or an account
set aside to make capital repairs and replacements.
Common area: portions of complex property and improvements
shared by all residents; maintained by the HOA
Complex: reference to Affordable Housing property consisting of
ownership homes or units and common areas; building with
multiple units, multiple buildings of units or freestanding homes
Declaration of Covenants/Condominium Declaration: with
regard to HOAs, policies and rules adopted in addition to Bylaws
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
6
Deed Restriction: terms of contract between APCHA and every
Affordable Housing owner imposing limitations on property
ownership according to state and local laws and APCHA policies
Dependent: dependents in household determine the number of
bedrooms available to an APCHA applicant;
child, stepchild or sibling, or their child/grandchild under age 19, if
a student, under 24 at year end; who lived at home at least 100 days
of last year and provided no more than half her/his own financial
support that year; only one divorced parent may count a dependent
child; or
adult relative or household member living with taxpaying applicant,
receiving more than half her/his financial support from applicant;
not a qualified dependent of another Affordable Housing owner
Dues/Monthly Assessments: routine charges to owners for
management and maintenance of complex usually charged monthly
Earnest money: funds presented by buyer as consideration to
bind a sales contract when signed; for APCHA contracts, $2000
Employee: an APCHA-qualified employee works full-time (1500
hours/year) in Aspen/Pitkin County for a qualified employer; self-
employed applicants qualify by proving ongoing business
operations in Pitkin County.
Employer: an APCHA-qualified employer is located, licensed,
doing business and paying taxes in Aspen/Pitkin County; or a not-
for-profit business within Pitkin County
Escrow: amount held in trust by third party to meet future
obligation, often for payment of taxes or insurance on real property
Fair Market Value (FMV): the price a property will bring on the
free market; Affordable Housing applicants may not transfer assets
for less than FMV in order to qualify
Home Owners’ Association (HOA); not-for-profit corporation
managing and maintaining an Affordable Housing complex
In-complex: refers to Affordable Housing owner of a unit at the
same Affordable Housing residential complex where another unit is
listed for sale; “in-complex” owners have bidding priority
Lottery: process following the close of the bid period to determine
a winner among tying bidders of top priority
Mortgage: financial agreement under which an individual borrows
money to purchase real property and secures the loan with
property as collateral
Ownership Exclusion Zone (APCHA Zone): Roaring Fork
Drainage including areas of Eagle, Garfield, Gunnison and Pitkin
counties; and town of Rifle to No Name area; persons owning
developed property in the APCHA Zone are not eligible for
Affordable Housing.
Pre-qualification: with regard to a mortgage, process of obtaining
general approval from a bank or lender in advance of bidding on or
signing a contract to buy a home
Priority: established order in which bids of eligible applicants are
accepted; determined by applicant’s bid price, size of household,
history of local employment and current Affordable Housing
ownership, if any, special needs and other factors
Property taxes: Affordable Housing owners are responsible for
payment of Pitkin County taxes on their APCHA homes; due in
February and June each year; often included in mortgage escrow
Protective Covenants: same as Deed Restrictions, Declarations of
Covenants
Reverification Affidavit: legal document required of APCHA
owners every two years confirming continuing eligibility
Settlement statement: closing document detailing financial terms
of contract sale
Supplemental Declaration of Covenants: same as Amendments
to Protective Covenants
Title company: local real estate title office administering closing
of real estate sale; APCHA provides a list of title companies
Transaction Fee: fee paid by seller to APCHA; currently two
percent (2%) of sale price; includes six hundred dollars ($600) due
as non-refundable Listing Fee; balance due upon closing
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
8
First Things First
Find out if you are eligible and ready to make the leap. Make sure
you understand the APCHA process, including steps and timing of
your application, bidding and the lottery. And consider the ongoing
responsibilities of owning as well as the possibility of selling as part
of your plan as you consider Affordable Housing.
Who is eligible for Affordable Housing?
Under APCHA rules, an eligible applicant must:
Work full time (1500 hours/year) in Aspen or Pitkin County
Occupy Affordable Housing as a primary residence
Not own other developed property in the Ownership
Exclusion Zone (APCHA Zone)
Full-time employees/employers are eligible for Affordable Housing
as soon as they begin full-time work in Aspen/Pitkin County,
though other qualifications must also be met. Look for the current
table illustrating the category income/asset levels and household
size under “Eligibility,” page 13.
A minimum four-year work history establishes priority in the
bidding process, but is not a pre-requisite for eligibility. Find out
more about priorities in the “Bidding” section, page 19.
Retirees and persons with special needs who have worked full-time
in Pitkin County for four years prior to Affordable Housing
application are considered to meet the work requirement. An
applicant who owns other property in the APCHA Zone but
intends to sell it may be eligible as long as the other property is sold
at Fair Market Value before or simultaneously with an Affordable
Housing purchase.
Having raised my family, worked and retired in Aspen
I am so grateful to have the ability to stay
in the community that I’ve made my own.
I couldn’t live anywhere else.
Can I afford to own my own home?
Good question! The time to take an honest look at your situation is
before you make the leap.
Evaluate your financial situation realistically. Ask yourself the hard
questions. What is my income after taxes? What are my current financial
obligations? How would buying a home affect my plans for saving, or facing a
financial emergency? Can I afford the upkeep of a home?
Owning a home is a major financial commitment that continues as
long as you own the property. The purchase price is just one
expense—the largest, of course—among many others in buying
and owning. Buying usually involves financing costs and other fees.
Owning involves HOA dues, annual property taxes, homeowner’s
insurance, maintenance, furnishing and improvement costs.
Keep your dreams alive but your feet on the ground. Find out if
you can, in fact, afford an Affordable Housing home before taking
any steps to buy. Sort out your finances and priorities. Take the
time to organize your records, loose papers and important
documents in one location, a file or loose-leaf binder—you’ll need
them for both Affordable Housing and financing applications.
If you have not worked out a monthly budget, the following
budget worksheet might help you get started. Find out if your nest
egg will be enough for an APCHA home. Make a list of your
income from all sources. Next, list routine expenses and fixed costs
such as utilities, auto, insurance, etc., as well as existing debts and
obligations (remember credit card debt, child support, etc.).
With an understanding of your current income and expenses, check
Affordable Housing listings for the cost of units for which you
might qualify. Add up the expected ownership expenses: HOA
dues and assessments, property taxes and move-in expenses like
painting, or buying furniture. And there will be surprises ... there
always are. You’ll want a financial cushion.
List any assets and property you own. Lay it all out in writing to see
where you stand. If you are not sure about your credit history or
your qualification for financing, you might want to obtain your
credit report from the credit bureaus listed on page 11.
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
10
Monthly Budget Worksheet
What about financing?
Smart buyers plan ahead and are proactive about financing.
APCHA offers a list of local mortgage lenders familiar with deed-
restricted property. You can ask a bank about pre-qualifying for
financing—that is, before beginning the application and bidding
process. Pre-qualification does not actually secure a loan but lets
you know what you can afford.
If you manage to get into the Affordable Housing process before
visiting the bank, it could cause a delay. And even with pre-
qualification, a sales contract should include a financing
contingency to allow time for securing a loan for a specific home
and purchase price. APCHA approves all financing agreements.
Look for tips on applying for a loan under “Buying,” page 24.
HOAs and Deed Restrictions
A Home Owners’ Association (HOA) incorporated as a not-for-
profit business by the State of Colorado governs each Affordable
Housing complex.
It’s not as complicated as it sounds. Owners are members of the
HOA at their complex; the HOA manages the complex according
to the Deed Restrictions and certain state and local laws. It’s a
democracy.
If you are interested in a particular complex, learn about the HOA
that governs it. Open the HOA documents online and take a look.
The documents may look like a bunch of legal beagle hooey that
won’t affect you, but if you become an Affordable Housing owner,
they will! Deed Restrictions and Bylaws establish rights and
responsibilities of owners and authorize HOAs to manage the
complex, collect dues and assessments and adopt new rules. HOA
dues usually cover regular operational costs; assessments can be
less predictable.
It might help to talk to people who live in Affordable Housing,
particularly in complexes you are considering. Ask how the HOA
works. Is it representative of the owners, organized, are dues and
assessments reasonable, what about the Capital Reserves? Learn
what you can from others, but stay focused on your situation.
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
What are Capital Reserves?
Colorado law mandates that each HOA adopt a Capital Reserve
policy regarding depreciation, repairs and replacements of common
areas such as parking lots, stairways, sidewalks, etc. Though having
a policy is required, setting aside funds for repairs and replacements
is not.
Naturally, you would want to know if, as an owner, you could be
assessed for unexpected or major capital repairs or replacements in
the future, right? When considering a unit listed for sale, be sure to
check the HOA Capital Reserves situation!
Capital Reserves apply only to repairs and replacements in
common areas and do not apply to capital improvements you make
to your unit—those are made at your personal expense.
Will I need a lawyer?
Maybe. In CO, lawyers are not required in real estate transactions
but a buyer or seller may, of course, seek legal advice. If you want a
lawyer but don’t know one, ask family or friends for
recommendations or do your own research and get help before
signing on the dotted line.
It is the right house for us and
when I think of all the houses I looked at in the past ...
that I never would have been able to afford
... this one I can.
Would you like to check your credit?
Contact one of three national credit bureaus:
Equifax 800 685 1111 www.equifax.com
Experian 888 397 3742 www.experian.com
TransUnion 800 888 4213 www.transunion.com
Credit concerns? Pick up the brochure Building a Better Credit
Report at the APCHA office.
Eligibility
Square Peg in a Round Hole?
Okay, you’re employed in Pitkin County full time (or otherwise
qualified), you will use your Affordable Housing unit as your
primary residence and you do not own developed property in the
Ownership Exclusion (APCHA) Zone ... and you’re confident you
can handle the responsibility. Check, check, check, check!
How do I fit into the program?
It can be hard to tell which home is right for you. Every Affordable
Housing complex is different, every home is different—each with a
certain number of bedrooms. And every home fits into a category.
At first glance the categories look like a puzzle, but a simple
formula correlates income and asset levels to size of the home. If
you’re organized, identifying your category is a breeze. If not,
locate your financial/tax records and important documents ASAP.
The rule of thumb is one bedroom per owner, one bedroom per
dependent. For a couple or two-person household, both persons
must be qualified employees to be eligible for a second bedroom.
A long list of written proof of qualification and income/assets is
required with your application—find application requirements and
a document checklist on pages 15-16—but for starters, to establish
eligibility for a certain category, you need to know:
Number of adults and dependents in your household; look
under “Glossary,” page 4, to find out who is a dependent.
Two previous years’ household income; includes everyone in the
household, even Granny and the kids; refer to W-2s and tax
returns; includes retirement income of which all must be
reported, though only sixty percent is counted.
Value of all assets owned by the household; savings,
investment and retirement accounts, real property, business
interests, your share in the family cabin back home ... everything.
12
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
Add up your gross household income/net assets and number of
qualified dependents. Then check the table to see where you fit in.
Applicants facing unusual hardship may apply for special review.
Ownership Categories
What if my circumstances change? Will I have to move?
APCHA rules accommodate the normal course of life. Generally,
once ownership is established, income, asset and number-in-
household limits are lifted.
However, every two years, each owner is required to submit a
Reverification Affidavit confirming eligibility.
Owners retiring from qualified employment retain eligibility. An
owner whose spouse or other qualified household member dies
may remain in the home. A surviving minor child may remain until
age eighteen (18) when individual qualification is required.
But for a couple or two-person household, both must continue
qualified employment until retirement to retain eligibility in their
category. And roommates are allowed only if eligible and HOA
rules permit; find roommate rental rates in the APCHA Guidelines.
An Affordable Housing owner who develops property in the
APCHA Zone may retain eligibility for three years from the date a
building permit is issued. A qualified business owner may, with
approval, be eligible to purchase an additional Affordable Housing
unit for business-related purposes. On rare occasion, owners in
violation of HOA and APCHA rules may lose eligibility.
Take the long view. When committing to a buying a new home,
look down the road ahead and consider the future to be sure you
and your household will remain eligible.
Application
Mighty are the Preparations
In most situations APCHA manages every step in the sale and
purchase of a home, from approving eligibility of buyers to
listing homes for sellers, bidding, lotteries, sales contract
negotiations, closings and compliance—the whole enchilada!
Take the time to understand the process before jumping in.
Submitting an application for eligibility is the first step of many in
buying an Affordable Housing home ... and it’s a big one!
Start by reviewing the application documents. We’re talking
paperwork here ... and lots of it!!
APCHA requires a completed application form and several
supporting documents proving qualification—with absolutely
everything in writing. But have no fear! Completing one step helps
with the next.
If you are organized enough to figure out your housing category
and/or pre-qualify for a loan, you have most of what you need to
apply.
The “Employee Housing Bid Submission Packet,” available for
download on the APCHA website, includes an application form, an
affidavit to attest applicants are US citizens or permanent residents,
an IRS Request for Transcript of Tax Return form and a Bid
Submission Form. If two people are applying both must submit
individual required documents. Bids may be submitted with the
application or in later bid periods, after eligibility is established.
Eligibility is generally valid for one year.
The staff was exceptionally supportive and friendly,
and helped me overcome the seemingly
overwhelming hurdles in buying a home.
14
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
16
Application Form
Here’s what you need or need to know to complete the
application form:
Personal information: date of birth, contact information
Household information: name, relationship and date of
birth of household members
Employment history: employers, dates of employment
Income of all household members from all sources: gross
monthly income; dividends, interest, rental income, child
support/alimony, Social Security, other
Assets of all household members: net value of bank, credit
union accounts, retirement (sixty percent (60%) counted as
asset) and investments, real estate, autos, businesses, other
Real property owned: household member/owner’s name,
property address, type, market value, amount owed, net
value
Financial liabilities of all household members: amounts
owed on mortgages, auto, student and personal loans,
credit cards, child support/alimony, other
Supporting Documents Checklist
Copies of the following documents must be submitted with the
completed application:
Valid CO driver’s license or CO ID card; or US military or
military dependent ID, Native American tribal document,
Permanent Resident card; picture ID
Most recent pay stub; if self-employed, Aspen business license
and supporting documents.
Two previous years’ Federal and State income tax returns;
Self-employed applicants may be required to provide
additional documents, e.g., office lease, profit/loss statements,
client/appointment records, etc.
W-2s, 1099s for ALL years worked in Aspen/Pitkin County
Statements/appraisals of all assets and liabilities
APCHA release form authorizing access to loan application
information
If necessary, Employer Affidavit.
If necessary, Pitkin County Voter Registration;
separation/divorce decrees, custody affidavits, other
Affidavit of Lawful Presence
Each applicant must sign a statement that she/he is in the United
States legally. The form is part of the application packet. Non-US
citizens must submit documents to support the affidavit.
... everyone was extremely helpful
with information on what paperwork I needed ...
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
18
Application Tips
Check or cash only. A fifty-dollar ($50) application fee is due with
the application. One bid may be submitted with the application at no
charge; each additional and later bid is subject to a $5 filing fee each.
Submit copies of documents; keep your originals. APCHA
charges to make copies.
Can’t find your tax returns? Call the IRS at 800 829 1040 and
follow the prompts to speak with a real person to request a free
transcript of your tax return(s). Transcript(s) may be faxed or will be
mailed within five days of the request. The APCHA application
packet includes IRS form 4506-T for mailing a request. Or check
www.irs.gov
Qualifying income. Seventy-five percent (75%) of qualifying
household income must be earned in Pitkin County. Net income
determines eligibility; gross income is not specifically limited.
Need proof of Aspen/Pitkin County employment? Lost your W-
2s? Submit a Request for Social Security Administration Earnings,
with the required small fee, to the SSA to receive your earnings
report. Download form SSA-7050 at www.ssa.gov or call or visit the
Glenwood Springs Social Security office at 866 220 7898, 201 14th
St, Glenwood Springs (9am-4pm, M-F) to obtain a form. It can take
several weeks to get the info ... better to keep track of your W-2s!
What if my files are on my computer? Print documents from your
computer for the application process. If you file taxes electronically,
be sure to print and keep a copy of your tax returns. Remember to
burn a CD or back up computer files periodically or at year-end and
keep software or backup drive current to ensure future access.
Keep records organized; start a household file. Once organized,
try to stay organized; store your important papers in a secure, central
location—a fireproof safe, locked file or safe deposit box. Start an
APCHA file, beginning with a copy of your application. Keep HOA
notices together in a loose-leaf binder.
Just the facts, ma’am. Applicants submitting false statements will
be disqualified.
Privacy Policy. Documents submitted to APCHA remain
confidential.
Bidding
Chart Your Course
APCHA bidding follows a specific pattern and timetable.
Listings are posted Mondays, advertised Wednesdays.
As homes become available for sale, listings are posted on the
APCHA website on Mondays and advertised the same week—only
on Wednesdays—in local newspapers.
Read the listings carefully. Look for your category and number of
bedrooms (BR). Check square footage (SF), special features, and,
oh, yes, the $$$ price. If parking is provided or pets allowed, etc.,
the listing will usually say so. Note the HOA dues and property tax.
An open house date or owner contact information is included in
each listing. Open houses usually take place later on the same day
the listing is advertised. If you are anticipating bidding, plan ahead
and allow time for open houses on Wednesdays.
Sample Listing
TWIRLINGAME CONDOMINIUMS, 123 GORGE ROAD, #4,
CATEGORY 2, 3 BR, 3 BA, 1300 SF, $145,000. W/D, parking, no
pets. HOA dues, $225/mo; ann prop taxes approx $301. Open
House, Wed, March 22, 2010, 5:30-7:00pm. Bid period ends 4pm,
Wed, Apr 5, 2010; in-complex bids due 4pm, Wed, Mar 29, 2010;
lottery scheduled at noon, Mon, Apr 10, 2010.
Initial Bid Period is Two Weeks.
Bids must be submitted in writing on the APCHA Bid Submission
Form before the end of the bid period. In-complex bids are due
during the first week of the bid period or are treated like other bids.
APCHA homes not sold in the initial bid period remain listed until
sold.
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
Bid results are posted on Fridays.
On Friday following the end of the bid period, results are posted
on the APCHA website and at the APCHA office at Courthouse
Plaza, 530 East Main Street, Aspen. Can’t make it to Courthouse
Plaza? Call 920 5050.
Because of the high demand for Affordable Housing and the fact
that bids above the asking price are disqualified, APCHA usually
receives several tying bids at the asking price. Tying bidders are
then prioritized and a winner is decided by lottery.
How are bids prioritized?
Bids are prioritized first according to the amount of the bid, then
the number in household as it relates to the size of the home and
finally the employment history of the bidder. Top priority requires
a minimum four-year work history and only bidders of top priority
are allowed to participate in the lottery. When housing inventory
warrants, applicants without priority may be allowed to bid. Have
your eye on a particular unit? Ask APCHA if you can bid on it!
A few situations are given special priority. A person already living
in an Affordable Housing household has first priority if a departing
household member sells her/his share.
An in-complex owner—in the same Affordable Housing complex
under the same HOA as the home listed for sale—is given second
priority in bidding on another home in that complex, provided the
bid is placed during the first week of the bid period. In-complex
priority does not apply to Affordable Housing single-family homes.
For mobility-disability homes, special-needs applicants have
priority after in-complex bidders.
Eligible applicants who do not have a four-year work history or a
household that does not include one person per bedroom are
permitted to bid, however the bid will have a lower priority.
Priority does not alter other eligibility requirements. Detailed
explanations of all factors that determine priority may be found in
the Guidelines.
Lotteries are held on Mondays.
A lottery is held to select the winner and runners-up among all
tying bidders of top priority on a particular APCHA home. The
longer the work history of the bidder, the more chances she/he has
in the lottery.
An applicant with work history of 4-8 years is permitted 5 chances;
8-11 years, 6 chances; 12-15, 7 chances; 16-19, 8 chances; 20 or
more years, 9 chances. Though the system is now computerized,
picture ping-pong balls in a glass bowl—with five balls
representing a bidder with a four-year work history and up to a
nine-ball maximum for those with longer work histories.
The lottery takes place in the APCHA office at high noon on the
Monday following the close of the bid period. Lottery results are
posted on the website and at the APCHA office. APCHA contacts
the winner(s) and assists with completion of the sales contract.
Second Chances
Yes, Virginia, there is a Santa Claus. If a lottery winner does not
sign a sales contract within three days, or if a signed sales contract
fails for any reason, runners-up in the lottery will be given the
opportunity to proceed to a sales contract, in order of lottery
selection. Applicants who do not qualify for or win the lottery on a
particular home may, of course, try and try again.
Bidding Tips
In-household bids. A joint owner of an APCHA home may not bid
on another APCHA home without proof of divorce or separation, or
of transfer of the jointly owned share.
Don’t aim too high. Bids exceeding the asking price are disqualified.
Good standing. An Affordable Housing owner bidding on another
Affordable Housing home must be an owner in good standing and
not under compliance review.
Prepare to win. A winning bidder and seller are given just three days
to negotiate and sign a sales contract. Buyer must present two
thousand dollars ($2000) earnest money when the contract is signed.
Be ready to roll!
20
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
22
Buying
Put Your Ducks in a Row
Winning is one thing. Buying a home is quite another. This is no
Ducky Derby, but it can sometimes feel like a race to the finish.
Three-day Negotiation Period to Sign Sales Contract
The winning bidder is allowed a maximum three-day period to
negotiate and sign a sales contract with the seller or the opportunity
is lost. If so, the lottery runner-up is declared winner, and the
process continues until a sales contract is signed and closed.
APCHA works with both buyer and seller as transaction broker
and uses a modified Colorado Real Estate Commission contract
form for buyer and seller to agree to terms usually including:
Purchase price
Inspection contingency: Buyer establishes the right to inspect the
home and settle any inspection discrepancies with seller in a
certain period of time, under APCHA rules no later than
halfway through the contract period.
Financing contingency: Buyer agrees to secure financing within a
specified time frame or forfeit the contract.
Seller’s list of attachments: “Attached” items usually transfer with
real estate, but a seller may negotiate particular items, like a
favorite chandelier or curtains.
Closing date: The date to settle the contract, or “close” the sale;
buyer and seller usually attend a formal closing at a title
company office to sign the necessary documents ensuring
transfer of the property and funds.
Without the cooperative guidance and downright helpful
assistance of APCHA, I quite honestly think
we would not be in this most happy of situations.
About Property Title
Property title is an official legal record of real estate ownership,
registered in the county where the property is located. The title is
issued as a deed and will read exactly as the buyer(s) are named at
the top of the sales contract (double-check for accuracy). An
Affordable Housing home is owned in fee simple, an old legal term
meaning it is owned completely and in its entirety.
If an Affordable Housing home is to be jointly owned, the names
of all buyers are written on the sales contract and buyers usually
choose one of two forms of Colorado joint property title.
Joint Tenants own undivided shares in the property and have a
“right of survivorship.” If one owner dies, the survivor(s)
assumes ownership of the share owned by the deceased.
Typically used between spouses or settled couples, this form
of title is intended to leave a family home to the surviving
spouse or partner.
Tenants in Common own separate shares that may be sold
independently of other owners of the home. Of course, a new
buyer of a separate share in an APCHA home must be eligible
and is subject to the rules regarding priority.
Three days fly by! The negotiation/signing period is the time to
consult a lawyer if you so choose, review contract details, Deed
Restrictions and HOA documents, determine the time frame for
any contingencies—usually financing and inspection—and set a
closing date. If you decide not to consult a lawyer, be very cautious
and take the time to understand every part of the contract you sign.
Pay attention to everything you sign!
Your signature is a legal commitment. Read everything carefully, even
the fine print. If you don’t understand something, ask for help.
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
24
Okay, I have a signed contract. Now what?
The contingencies you negotiated in the contract now must be
settled within the agreed time frame, usually several days before the
closing date. Line up your financing, take care of the inspection of
the home as soon as possible and check with APCHA to be sure
you have everything covered.
Help! I’m going to need a loan!
Banks are in business to make loans. They’re looking for customers
who are making a good investment and have the income to pay
them back. It’s as simple as that.
Local banks like to work with Affordable Housing applicants
because the APCHA financial review is rigorous and property
values are reliable. A list of local banks and lenders familiar with
deed-restricted property is available at the APCHA office; friends
and family may also offer referrals.
Banks charge borrowers interest on money loaned and repaid over
a specific period of time, usually a period of years. Interest rates
and loan repayment plans vary and they change with economic
times. Some interest rates are fixed and will not change for the
term of the loan; others are variable and can be raised over time.
Late monthly payments and, in some cases, early repayment of the
entire loan usually carry penalty charges.
Do some homework. Research current interest rates and local
home mortgage terms and learn as much as you can before going
to the bank.
Make an appointment with a loan officer at your bank and other
lending institutions. Don’t be afraid to shop around! Compare rates
and terms. Find the best deal you can.
The bank will require completion of a loan or mortgage application
(usually long). Ask about picking up the application in advance so
that you can arrive at your meeting prepared. If the meeting will be
on the phone, ask that application materials be faxed or emailed to
you in advance. You may also be asked to fax or email your
documents to the bank.
Mortgage Application Checklist
A bank/lender usually requires the following:
Personal identification: e.g., driver’s license, passport
Social Security number
Letter or proof of employment
Recent W-2s, pay stubs and tax returns as proof of income
Current statement(s) of assets: investment and retirement
accounts, etc., business and property appraisals
Legal documents showing financial obligations or anticipated
income, divorces, alimony, child support decrees
Other documents affecting financial status
Household budget
Listing information for a particular APCHA home under
consideration
Allow about an hour for a productive meeting. Take the time to
gain a clear understanding of the terms being offered and the
obligations you would assume. Ask all the questions you have.
Learn what amount of money you will be able to borrow and what
your financing costs will be going forward. It is your responsibility
to be sure your financing is realistic.
Remember, if you pre-qualify, it is based on the facts at the time;
an actual mortgage is based on the specific home and facts at the
time of purchase. If significant time passes between pre-
qualification and signing a sales contract, your bank may request
recent financials.
What if I need a co-signer for my loan?
Sometimes a financing applicant is unable to qualify for a mortgage
on her/his own and may be asked by the lender to provide a co-
signer, usually a parent or relative, who agrees to repay the loan if
the applicant fails to do so. APCHA allows a non-eligible co-signer
but requires a Co-signer’s Affidavit.
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
26
Inspection Checklist
APCHA conducts a basic inspection of a home before establishing
a sales price, nevertheless buyers of an Affordable Housing home
are advised to include an inspection contingency in the sales
contract and pursue a thorough inspection.
Professional, licensed inspectors are available by appointment for a
fee usually based on square footage—a minor expense compared to
the cost of a home. An inspector’s written report pinpoints items
and areas that are damaged, defective or not up to code as well as
any estimated cost of repairs. Inspection results are negotiated
through the APCHA office and satisfied either through repair by
seller before closing or a reduction in sales price for cost of the
repairs. Areas typically inspected are:
Structural: foundation, walls, ceilings, roof, masonry
Roof, gutters, downspouts: confirm whether these are
common areas covered under your HOA Declarations;
Electrical: electrical service and circuit-breaker box adequate
and meets code; outlets, switches, fixtures secure and in good
working order; no exposed or excess wires
Plumbing, water heater: service to home meets code; no leaks,
good water pressure and drainage
Heating/air conditioning: units up to code and in good repair;
ask for maintenance records and service provider; vents,
intakes clean and in good working order; check filters
Telephone and cable: locate service boxes, connections and
wires; check installations and quality of connections
Bathrooms: tile, fixtures, mirrors
Kitchen: appliances, sink, cabinets
Floors: all surfaces
Windows in good working order, no broken windowpanes
Woodwork, doors, built-in shelves and cabinets
Garage, storage space: access and condition
Closing the Sale
When all the contingencies in the sales contract have been satisfied
and documented with APCHA approval, you’re ready to close.
Closing takes place in a title company office. APCHA assembles
the closing documents, contingency agreements, financing
documents, etc., in coordination with the title company that
oversees the actual closing. The title company insures clear,
transferable property title, handles completion and signing of
closing documents, ensures the transfer of funds and registers the
sale with the county to establish the new property title.
APCHA, the buyer and seller and/or their lawyers usually review
and agree in advance to all issues and documents including a
“settlement statement” declaring final financial terms between all
parties, including any adjustments for repairs. The settlement
statement also shows the balance of the transaction fee due to
APCHA from the seller.
Buyers are, of course, required to sign an HOA document agreeing
to Deed Restrictions governing the home being purchased.
Depending on the HOA, the document may be called a
Memorandum of Acceptance of a Master Deed Restriction or an
Occupancy and Resale Agreement. APCHA may under certain
circumstances require other closing documents.
That’s it. All parties sign all documents—it usually takes about an
hour to pass the papers around for signatures—and the deal is
done! Congratulations! You are a homeowner!
A few weeks later, the county sends a property deed to the new
owner(s) and/or the bank holding the mortgage. Keep it in a safe
place!
I am very happy in my new "family oriented" community,
and forever grateful for Aspen’s affordable housing model
and to the committed staff for
keeping the valley livable for all!
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
28
Owning
It’s Affordable Housing! Big Brother’s going
to look after me ... right?
APCHA helps you through the door, but after that you’re on your
own. Home sweet home.
Owning a new home is thrilling to be sure, but the responsibilities
of home ownership can become overwhelming. APCHA offers
occasional seminars to familiarize new owners with the routine of
home maintenance and HOA governance.
Participate in your HOA.
Every Affordable Housing complex is a true community. Owners
have much to gain by participating in, or at least following, their
HOAs. Stay up to date on HOA issues, read the notices you
receive, attend meetings, ask questions and keep track of HOA
meeting minutes as a reference.
Maintain your home.
Your HOA—with the help of your dues and periodic or special
assessments—is responsible for common areas but, in general,
everything inside the walls of your home is yours to maintain.
You will want to protect your investment, of course, but it is also
your obligation as an owner to comply with your specific HOA
Declarations in maintaining your home.
Set up an annual calendar for routine cleaning and seasonal
maintenance. Make repairs when needed.
Thankfully, we have not had any
“surprise” special assessments over the years because
our HOA has a strong long-term Capital Reserve policy and
has maintained the funds to support major repairs.
Permitted Capital Improvements
Capital improvements can enhance the quality and value of your
home. Permitted capital improvements as listed below must be
approved in advance by APCHA. Non-permitted and non-
approved capital improvements may not or may only partially be
credited toward the value of your APCHA home.
Permanent fixtures (like a wall)
Energy and water conservation installations
Senior/special needs facilities
Health/safety devices (e.g. radon remediation)
Finishing unfinished spaces
Addition of or finishing permanent storage spaces
Landscaping, deck, balcony additions and extensions
“Green” building products
Leave of Absence
On occasion owners have to leave the valley temporarily and may,
with bona fide reason and statement of clear intent to return, retain
Affordable Housing eligibility by requesting a leave of absence of
up to one year with the possibility of a one-year extension. A Leave
of Absence Request form must be submitted thirty days in advance
of taking leave and is subject to approval of both APCHA and your
HOA.
Can I ever rent my home?
HOA rules permitting, owners taking approved leave may be
allowed to rent provided:
A copy of the lease is approved by APCHA and the HOA
The tenant agrees to HOA Deed Restrictions
Rent does not exceed routine owner’s expenses—mortgage,
HOA fees, taxes and insurance—plus fifty dollars.
In some complexes, APCHA may approve short-term rentals to
faculty, students and staff on a seasonal basis.
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
30
Compliance
Complaints about violations of rules and policies do occasionally
arise. Grievance policies for each APCHA complex are explained
in the respective Deed Restrictions and HOA Declarations.
The grievance process is intended to resolve compliance issues to
the benefit of every party involved. The process requires timely
written notice to APCHA and, if necessary, a hearing. Procedures
are detailed in the Guidelines.
As an owner, the best way to protect your investment is to honor
your Deed Restrictions and HOA responsibilities, maintain your
home, participate in HOA governance and simply be a good
neighbor.
As for deed restriction and all that comes with it,
I didn’t buy this house to make money;
I bought it because I want to live in Aspen.
I’m close to my job so
I don’t have to get up in the middle of the night
to go to work in the morning.
And no having to drive up and down 82, yeah!!
Selling
Can’t Put Lipstick on a Pig!
Families grow. Children move away. Things change. Affordable
Housing owners decide to sell. When that time comes, inform the
APCHA office and follow the procedures for listing and selling. It
can be almost as exciting as buying! And of course, you’ll want the
best possible price. Who wouldn’t?
Maximum Sales Price
Now remember ... Affordable Housing homes are deed-restricted,
with both a limited cost of purchase and a limited rate of return—
some call it a “cap” on return. APCHA establishes a Maximum
Sales Price based on:
Previous purchase price
Plus—Deed Restrictions permitting—three percent (3%)
simple appreciation for each year owned or a multiple of the
Consumer Price Index (CPI) between date of purchase and
date of sale, whichever is less
Plus cost of approved capital improvements, not to exceed
ten percent (10%) of purchase price, less depreciation
Plus cost of exempt capital improvements: health, safety,
energy efficiency, water conservation, “green” building
materials, etc.
Following inspection of the home, the maximum price could
be discounted according to:
the CONDITION of the home—and this is the clincher!
If you want full value, whip your home into shape before listing it!
Make all necessary repairs. Don’t try to cover up problems—you
can put lipstick on a pig but, it’s still a pig! A professional inspector
will not be fooled. Make repairs the right way—it will pay off.
Field Guide to Affordable Housing /Read 1.1.2012
www.aspenhousingoffice.com !
!
!
Minimum Standards
Leave your Affordable Housing home in the condition you would
expect to find it if you were buying. Sellers are expected to meet
APCHA Minimum Standards:
Clean, odor-free home
Carpets steam-cleaned within 2-3 days of closing
Surface scratches, marks, holes in doors, floors, walls,
woodwork, cabinets, counter tops, other than normal wear
and tear, repaired
Walls in good repair and paint-ready
Windows and window locks in good repair; broken panes
replaced
Original window screens in place and in good repair
Window coverings clean and in working order
Doors and door locks in good repair
Light fixtures, outlets, switches secure and in working order
Plumbing in good repair with no leaks
Tile grout in good repair and clean
Roof in good repair with no leaks
Safety hazards including radon remediation resolved
Working keys for all locks to be provided at closing
If the condition of a home does not meet Minimum Standards
and/or a buyer’s inspection warrants, sellers may be asked to make
certain repairs prior to closing or the sales price may be reduced by
the cost of necessary repairs, as approved by APCHA.
Transaction Fee
Every seller is charged a Transaction Fee, currently two percent
(2%) of the sale price of the home. Six hundred dollars ($600) is
collected as a non-refundable Listing Fee at the time of listing. The
balance, based on the final sales price, is deducted at closing.
Pop Quiz
Ready, Freddy?
Find out if you’re ready for Affordable Housing ownership—there
could more than one right answer. Good luck!
What’s an HOA?
a) Happy Old Aspenite b) Affordable Housing Home Owners’
Association c) slurred “hey, how are ya?” We’ve all heard it. d)
corporation governing an Affordable Housing complex
Who decides bidding priority?
a) APCHA b) APCHA c) APCHA d) the president
May I remodel my APCHA home?
a) no b) sure, whatever you like c) yes, with APCHA approval and
within Permitted Capital Improvements guidelines
When should I go to the bank about financing?
a) when there are no more checks in my checkbook b) before starting
the bidding process c) when APCHA tells me to go
If I can’t make a big profit, why bother taking care
of my APCHA home?
a) oh, come on! b) to honor HOA Deed Restrictions c) to get the big
bucks Maximum Sales Price when I sell
Capital Reserves are:
a) savings that Congress puts aside each year b) funding to support
HOA long-term capital repairs and replacements c) dinner plans in
Denver d) hockey benchwarmers
How can I contact APCHA?
www.aspenhousingoffice.com
Courthouse Plaza Building,
530 East Main Street, Lower Level
Aspen CO 81611
970 920 5050
32
