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:
|Closing Costs *||$3,000|
|Make Ready and Repairs/Maintenance Costs||$7,000|
* 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 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 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.