A Private Nonprofit Developer, CAN-DO, with the Cooperation and Support of the City Of

BACKGROUND

A private nonprofit developer, CAN-DO, with the cooperation and support of the City of Newtonhas created a six-unit condominium project which will provide a housing opportunity in Newtonfor families with incomes between 80% and 100% of the Area Median Income. The units were created in part through funding from the City of Newton’s Community Preservation Funds and as such are being offered to those households who fall within the Newton Local Preference i.e., Newton resident, a household member works in Newton, a household with a child or children in the Newton public schools or having an immediate family member who lives in Newton.

TheMillhouse Commons developmentislocated at 1093-1101 Chestnut Street in Newton Upper Falls,MA. Itisasix condominium complex consisting of two detached homes located on Chestnut Street, behind each of which is a duplex unit. Five of the units are modular construction. The two CPA units are located in the duplex situated at the rear of 1093 Chestnut Street. One of the units has two bedrooms and the other has three bedrooms. For a description of the development and the property please refer to thelastpageof this packet. The two CPA condominium units at Millhouse Commons will be sold a prices affordableto households with incomesbetween 80%and 100% of the area median income Thetwounitsare:

Unit # / Bedrooms / Bathrooms / Square feet / Price
1093 A / 2 / 1.5 / 2113 / $245,000
1093 B / 3 / 2.5 / 2318 / $280,000

The exteriors of the CPA units are not significantly different than those of the market rate units (other than the historic restored home). The interior of the units will be constructed according to current building codes but will not havethe upgrades and specialty finish work that will be available in the market rate units.

Each CPA unit will have a “Deed Restriction” that will be filed with the mortgage at the time of purchase.This deed restriction limits the amount that the unit can be resold for and requires the resale to another income-eligible buyer. The deed restriction ensures that the unit remainsrelatively affordable in perpetuity.

Since it is anticipated that there will be more interested and eligible applicants
than available units, CAN-DO will sponsor an application process and lottery todetermine those applicants who will first be offered the units. The application and lottery process, dates, and eligibility requirements can all be found within this Information Packet. Informationcan also be found at the CAN-DO website as well as the City of Newton website .

ELIGIBILITY REQUIREMENTS

Q: Who is eligible to apply for theCPA units in Millhouse Commons?

A: InordertoqualifyforaCPA unitthehouseholdmust satisfy the income qualifications and asset limitations and consist of two to four persons for the two bedroom unit and three to six persons for the three bedroom unit.

Q: Whataretheincomeeligibilityrequirements?

A: To be eligible to purchase a unit annual income must bewithin a particular range, set by maximum and minimum income levels and household assets may not exceed a set value as follows:

Households shall have total gross assets not exceeding $75,000 in value. Details of how assets are to be counted are contained in Appendix I Income and Assets.

MaximumIncome

HouseholdSize IncomeLimit

2 ...... $ 67,231

3 ...... $ 75,659

4 ...... $ 84,100

5 ...... $ 90,812

6 ...... $ 97,523

MinimumIncome

To qualify for a mortgage loan to purchase these units, there will be minimum income limits to be determined by the lender. Normally, the bank will use a “Housing Debt Ratio” of housing expense to include principal, interest, mortgage insurance, real estate taxes, and homeowner’s insurance at 33%of household income and a “Total Debt Ratio” including housing and all other debts of 38% of household income. The precise minimum income requirements will vary for each applicant according to the terms of the loan, the amount of down payment, applicant’s credit scores, the interest rate, and other factors.

Applicantsshould consider pursuing available public mortgage assistance sourcestohelp make a purchase more affordable, includingtheNewton Connection Homebuyer Program, the Newton First Time Homebuyer’s Program, the Massachusetts Housing Partnership’s Soft Second Program, and lending programs available from private financial institutions for first‐time homebuyers.These programs provide eligible applicants grantswhichwould write downorreduce closing costs and/or purchase price, increasing the ability of lower incomes to qualify for mortgages.

Q: Can a non-household member co-sign on the mortgage?

A: No. only members of the applying household can sign on the mortgage. All monies gifted to household members to assist in down-payment or other costs will be counted as household assets.

Q:What considerations determine the size unit which may be applied for?

A:Households are eligible only for as many bedrooms as they need. Generally, that means having a bedroom shared by one or two adults, and one bedroom shared by two children only if they are of the same gender and separated by no more than six years in age. Households for 2 and 3 bedroom units must include a custodial parent and at least one dependent child. No household having fewer persons than the number of bedrooms will be eligible for that unit. There is additionalinformationin the next section onhow selection priority relates to householdsize.

Q:Does the unborn child of a currently pregnant household member count towards our household size?

A:Yes. A household may count an unborn child as a household member. If you are asked to move forward in the home-buying process after the lottery you will have to document having been pregnant at the time of application thru a doctor’s note or equivalent.

Q:What if there are more eligible applicants than units available?

A:If there are more applicants than units, as is likely, certain selection criteria will apply. See the following section on SELECTION PRIORITY for an explanation of these criteria. While the preference criteria will be used to determine priority for consideration, any first-time homebuyer who meets income and household size criteria may apply.

Q: Must purchasers provide documentation of completion of a First-Time Homebuyer Course?

A:Yes; purchasers will be required to complete a homebuyer’s training prior to closing on the property. Only those who receive a certificate of completion are eligible to proceed to sale. Homebuyer training classes in the metro Boston area are listed online at:

SELECTION PROCESS

Q:How willapplicantsforthe CPA unitsbeselected?

A.A separate drawing will be held for each of the units. Applicants may apply for either of the available units for which they are eligible. Selections from among applicants will be made separately for each of the units. Qualifying applicants will be offered an opportunity to purchase in the order in which they were drawn, within the following priorities:

Three-bedroom unit:

Six-person households. If there are none then

Five-person households. If none, then

Four-person households. If none, then

Three-person households. If none, then

Four person households. If none, then

Three-person households.

Two-bedroom unit:

Four-person households. If none, then

Three-person households. If none, then

Two-person households.

Up to six high-ranking households in the drawings for each of the units will be asked to submit all required income and asset documentation and will also be invited to apply for a mortgage loan application to purchase a CPA unit. The highest ranking households which are found to be program eligible and qualified for a home mortgage loan will be offered a CPA unit. If a household fails to submit requested documentation, fails to obtain a mortgage approval by the set deadlines, or fails to meet deadlines set in the process of purchasing the house then the CPA unit will be offered to the next ranked and approved applicant.

APPLICATION PROCESS AND SCHEDULE

Q:What is the schedule for applications and the selection of buyers for

theCommunity Housing (CPA)units?

A: October 1st thru October 31, 2006: CAN-DO will publicize the availability of this CommunityHousing opportunity in Newton and distribute applications and this Information Packet to all interestedpersons who might be eligible to apply.

October 17th, 2006: A Public Workshop will take place at 7:30 pm in the Pomeroy Auditorium at 492 Waltham Street, West Newton, MA to answer questions about the eligibility requirements, priorities for selection, and the lottery process. Applications will be available at this workshop, the Newton City HallPlanning Department, Newton City Housing Office, and CAN-DO’s website

OCTOBER 25th – 4;30 to 7:00 pm – OPEN HOUSE

November 3rd , 2006:Deadline by which those interested in applying for the CPA units need to postmark and mail their application to participate in the lottery. Applicationsshouldbesubmittedto:

THECPA HOUSINGLOTTERY
SANDRA FROMM, P.O. Box 600453, NEWTONVILLE,MA.02460

Lateapplicationswillnotbeaccepted‐NOEXCEPTIONS!

November 10th,2006:TheCommunity Housing (CPA)housinglottery

7:00pminthePomeroy AuditoriumattheNewtonCommunity Service

Centers Building at 492 Waltham Street, WestNewtonMA.

Week of November 13th , 2006: All lottery applicants will be mailed written notice of their status. The top 6 positions on each Lottery Drawing List will be invited to submit all income, asset and preference documentation and will be notified of all deadlines and requirements that must be met to maintain their positions on the Lottery Drawing Lists.

November 27th , 2006: Documentation of mortgage pre‐approval must be sent to the Lottery Agent along with all required income, asset and preference documentation or the household will be dropped from the Lottery Drawing List. The Lottery Agent will conduct a preliminary review of all required documentation. If thehouseholdis deemed eligible according to program guidelines the applying household will then have seven days to sign a Purchase and Sale agreement for purchase of completed Community Housing (CPA) units or will forfeit their position in the Lottery.

PROPERTY DESCRIPTION

Millhouse Commons includes six condominium housing units in four structures on over a half acre in Newton Upper Falls. Two detached homes are located on Chestnut Street and four are located at the lot interior, in two duplex structures. One of the Chestnut Street homesis an historic restored house, characteristic of late 19th Century residential buildings. All structures have steeply pitched roofs, covered main entrances and back or side porches leading to private outdoor spaces. Each of the six units has two off street parking places adjacent to its front door. All units have cedar siding and double hung windows. Each of the four buildings is painted an historic color, with white windows and trim. Unit entry doors are painted to compliment the individual building color and signal the house primary entries. Mature stands of trees at the interior lot line and at the parking area, with newly plantedtrees and plants, distributed throughout the site, give Millhouse Commons an established residential character.

Each of the two duplex buildings contains one three bedroom and one two bedroom house in townhouse layouts, with separate entries and yards. These homes are two stories with full basement and attic storage, second floor laundry rooms, and separate dining and living rooms. All units have natural maple kitchen cabinets, hardwood flooring at stairs, halls and dining and living rooms, and ceramic tile flooring at baths and laundry rooms. Interior “windows” between kitchen areas and dining or living rooms extendviews and add to the open feeling of these homes. Heating is provided by high efficiency gas boilers for hot water baseboard heating at all rooms. The three bedroom Community Housing (CPA) unit totals approximately 2300 square feet and the two bedroom Community Housing (CPA) unit is approximately 2100 square feet.

APPENDIX I: INCOME AND ASSETS

Annual Income

Annual gross income means all amounts, monetary or not, which go to, or on behalf of, the family head or spouse or to any other family memberreceived from a source outside the family during the 12-month period following application.

Annual income includes, but is not limited to:

• The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services;

• The net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family;

• Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (b)(2) of this section. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family;

• The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a periodic amount;

• Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay;

• Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling;

• All regular pay, special pay and allowances of a member of the Armed Forces;

• Income derived from assets to which any member of the family has access.

Annual income does not include the following:

• Income from employment of children (including foster children) under the age of 18 years;

• Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone);

• Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses;

• Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member;

• Income of a live-in aide, as defined in Sec. 5.403;

• The full amount of student financial assistance paid directly to the student or to the educational institution;

• The special pay to a family member serving in the Armed Forces who is exposed to hostile fire;

• Temporary, nonrecurring or sporadic income (including gifts);

• Deferred periodic amounts from supplemental security income and social security benefits that are receivedin a lump sum amount or in prospective monthly amounts;

• Amounts paid by a State agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home;

• Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(c) apply.

Assets

Net Family Assets include the following:

• Cash held in savings and checking accounts, safe deposit boxes, homes, etc. For savings accounts, use the current balance. For checking accounts, use the average balance for the last six months. Assets held in foreign countries are considered assets.
• Revocable trusts. Include the cash value of any revocable trust available to the applicant.
• Equity in rental property or other capital investments. Include the current fair market value less (a) any unpaid balance on any loans secured by the property and (b) reasonable costs that would be incurred in selling the asset (e.g., penalties, broker fees, etc.).
• Stocks, bonds, Treasury bills, certificates of deposit, mutual funds, and money market accounts. The value of stocks and other assets vary from one day to another and should be determined within a reasonable time in advance of the applicant’s submission of a lottery application.

Individual retirement, 401K, and Keogh accounts. These are included when the holder has access to the funds, even though a penalty may be assessed. If the applicant is making occasional withdrawals from the account, determine the amount of the asset by using the average balance for the previous six months. (Do not count withdrawals as income.)

Retirement and pension funds. While the person is employed, include only amounts the applicant can withdraw without retiring or terminating employment. Count the whole amount less any penalties or transaction costs. At retirement, termination of employment, or withdrawal, periodic receipts from pension and retirement funds are counted as income. Lump-sum receipts from pension and retirement funds are counted as assets. Count the amount as an asset or as income, as provided below.

If benefits will be received in a lump sum, include the lump-sum receipt in net family assets.

If benefits will be received through periodic payments, include the benefits in annual income. Do not count any remaining amounts in the account as an asset.

If the applicant initially receives a lump-sum benefit followed by periodic payments, count the lump-sum benefit as an asset as provided in the example below and treat the periodic payment as income. In subsequent years, count only the periodic payment as income. Do not count the remaining amount as an asset.

NOTE: This section assumes that the lump-sum receipt is a one-time receipt and that it does not represent delayed periodic payments. However, in situations in which a lump-sum payment does represent delayed periodic payments, then the amount would be considered as income and not an asset.