Resale

Stone School Home | Floor Plans | Income Requirements | Purchase Price

Affordability Agreement
All Stone School Townhome condominium units are subsidized to sell below market rate to make the units affordable to 3 income brackets. Therefore, the City of Ann Arbor requires that each purchaser sign an affordability agreement to regulate the resale price according to a prescribed resale formula to ensure the subsidy shall be passed down to subsequent purchasers of units. Subsequent purchasers must also meet income guidelines for the unit price category. The City of Ann Arbor will annually calculate and notify purchasers of the maximum allowable resale price and resale criteria. In addition to regulating the resale price, the Affordability Agreement will limit the property tax assessment, which will be based on the purchase price rather than market value of the unit.

Resale Formulas
The Sales Price is determined by the bedroom size of the unit and Price Category. The maximum running sales price (or resale price) will increase or decrease each year based on HUD’s published income limits. The Area Median Income (AMI) in the price category formula shall determine the maximum original and running sales price by bedroom size. The formulas shall not be interpreted to restrict the number of people in the household that are eligible to purchase the unit.

1. Subsidized Affordable units (60% AMI price category)
The resale price shall be twice the area median income for household’s at 60%, based on HUD’s annually published income limits, at the time of sale, minus half the increase in income from the previous year:

Example Formula for the sale of a 2-bedroom unit in 2003:
The income limit for a 2-person family at 60% AMI is $37,320
$37,320 x 2 = $74, 640
The sales price in 2003 is $74, 640

Example Formula for resale of a 2-bedroom unit in 2004:
If the income limit for a 2-person family at 60% AMI for 2004 is $39,320*.
$39,320 x 2 = $78,640
$78,640 - $74,640 = $4,000
$4,000/2 = $2,000
$78,640 - $2,000 = $76,640
The running sales price (resale price) would be $76,640 in 2004.
* Based on an estimate for 2004 HUD income limits

2. Required Affordable units (80% AMI price category)
The resale price shall be twice the area median income for households at 80%, based on HUD’s annually published income limits, at the time of sale.

Example Formula for the sale of a 2-bedroom unit in 2003:
The income limit for a 2-person family at 80% AMI is $45,200
$45,200 x 2 = $90,400
The sales price in 2003 is $90,400

Example Formula for resale of a 2-bedroom unit in 2004:
If the income limit for a 2 person family at 80% AMI in 2004 is $47,200*
$47,200 x 2 = $94,400
The maximum resale price in 2004 is $94,400
* Based on an estimate for 2004 HUD income limits

3. Below Market units (85% AMI price category, available to households with up to the 100 AMI)
The resale price shall be twice the area median income for households at 85%, based on HUD’s annually published income limits, at the time of sale.

Example Formula for the sale of a 2-bedroom unit in 2003:
If the income for a 2 person family at 85% AMI is $52,870
$52,870 x 2 = $105,740
The sales price in 2003 is $105,740

Example Formula for resale of a 2-bedroom unit in 2004:
If the income for a 2 person family at 85% AMI in 2004 is $54,870*
$54,870 x 2 = $109,740
The maximum resale price in 2004 is $109,740
* Based on an estimate for 2004 HUD income limits