Pre-affidavit and pre-legislation owners
Back to topOption 1: Continue to be governed as a pre-legislation owner (stay on the current program)
ONLY Pre-Legislation Owners are eligible for this option. If you choose to stay on the current Condo Conversion BMR Program, your unit will continue to be regulated by the provisions in the Ordinance that relate to units acquired prior to the effective date of the Ordinance.
Action required:
You do not need to do anything to remain on the current Condo Conversion BMR Program. Any unit for which the City and owner have not finalized an agreement under one of the other options by January 18, 2011 will automatically remain part of the current Condo Conversion BMR Program and subject to the provisions in the Ordinance for pre-legislation owners.
Links to documents related to the current program:
- Ordinance #320-08
- Implementation of Ordinance #320-08 Overview & Options Chart
- Condo Conversion BMR Program Resale Procedures
- 1993 Capital Improvements Policy
- Condo Conversion BMR Rental Procedures
Option 2: Agree to be governed as a post-legislation owner (opt into the updated program)
ONLY Pre-Legislation Owners are eligible for this option. Post-Legislation Owners will be automatically enrolled in the updated Condo Conversion BMR Program and are subject to the requirements for post-legislation owners. If you choose to opt into the updated Condo Conversion BMR Program, your unit will be subject to all of the requirements applicable to post-legislation owners. It is important that you read the procedures and legal documents (see documents below) that govern post-legislation owners, as many aspects of the Program differ from the rules that govern pre-legislation owners. In entering into any legal agreement with the City, the City recommends that an owner retain his or her own legal counsel. MOHCD cannot offer legal advice. If you agree to opt into the updated Condo Conversion BMR Program, your base price will be increased one time to the value printed in the Ordinance and re-printed below.
| Unit Size | Moderate Income Designation (120% AMI) |
Low Income Designation (80% AMI) |
|---|---|---|
|
Junior Studio |
$216,150 |
$142,100 |
|
Studio |
$240,200 |
$157,900 |
|
1-Bedroom |
$282,350 |
$189,050 |
|
2-Bedroom |
$324,150 |
$220,250 |
|
3-Bedroom |
$366,300 |
$251,400 |
|
4-Bedroom |
$399,900 |
$276,350 |
Action required:
You must make a request to MOHCD to sign into the updated Condo Conversion BMR Program. To get the process started, you must submit the attached Checklist with paper copies of all necessary attachments (not electronic copies). MOHCD will process requests in the order received and contact you when complete. MOHCD will not process incomplete submissions. MOHCD will begin accepting owner requests on Monday, April 20, 2009. Owners must complete the transaction for this option by January 18, 2011. In order to ensure that your submission can be processed in time, MOHCD must receive your complete application by December 1, 2010.
Links to documents related to the updated program:
- Ordinance #320-08
- Implementation of Ordinance #320-08 Overview & Options Chart
- 2007 Inclusionary Procedures Manual
- 2008 Condo Conversion BMR Addendum
- MOHCD Subordination Policy
- Opt into Updated Program - Checklist
- Opt into Updated Program - Agreement (for current owners who are immediately selling)
- Opt into Updated Program - Declaration of Restrictions
- Opt into Updated Program - Promissory Note and Deed of Trust
- Opt into Updated Program - Acknowledgement
- Capital Improvements Review Sheet
Option 3: Pay a fee and be released from the program
ONLY Pre-Affidavit Owners are eligible for this option. If you choose to pay the fee, your unit will be permanently released from the Program. It is important that you read the procedures and legal documents (see documents below) regarding this option. In entering into any legal agreement with the City, the City recommends that an owner retain his or her own legal counsel. MOHCD cannot offer legal advice.
The fee is determined as the lesser of: 1) the fee printed in the Ordinance and re-printed below, or 2) 50% of the difference between the fair market value and the BMR price at the time of repayment.
| Unit Size | Moderate Income Designation (120% AMI) |
Low Income Designation (80% AMI) |
|---|---|---|
| 1-Bedroom or Smaller | $150,000 | $200,000 |
| 2-Bedroom | $250,000 | $300,00 |
| 3-Bedroom | $350,000 | $400,000 |
| 4-Bedroom | $450,000 | $500,000 |
If you are unable to pay the fee immediately, you may take out a loan with the City in the form of a City Lien. The City Lien will only be allowed if the combined loan to value of your home does not exceed 80% of the fair market value (all loans, including the City Lien).
If your combined loan to value exceeds 80%, you may execute an agreement with the City that you will pay the fee or pay down your other debt to meet the 80% loan to value requirement within 10 years. In this case, the City will not release the unit from the Program until the terms of the lien agreement are met and a City Lien is recorded. If you do not meet the terms of the lien agreement within the 10-year period, your property will remain part of the current Program (see above section "Option 1: Continue to be Governed as a Pre-Legislation Owner [Stay on the Current Program]").
All liens will accrue interest at the rate of 3% simple interest annually. No partial payments of the lien are allowed. If choosing to pay the fee by City Lien, you will be required to close the transaction through a title company. MOHCD will pay ½ of the closing costs related to recording the City Lien up to a maximum of $650. MOHCD will not pay for closing costs if the lien is being recorded in conjunction with another transaction, such as a refinance. You will be responsible for the fair market appraisal and closing costs associated with all future transactions related to the property, including the repayment of the City Lien, refinance or sale.
MOHCD will follow the procedures for determining the fair market value of the property as published in Subdivision Code Section 1344(b) (see page 6 of the Ordinance). The agreed upon fair market value will be used to calculate the fee amount and the combined loan to value.
NOTICE: Due to additional public feedback received after the public comment period, MOHCD has made the following changes to documents related to this option. These changes are ONLY applicable to owners under the Fee and Release Option. (posted 7/17/09)
- MOHCD has added language to clarify that for those owners who select the lien option, the due date for payment of the fee will not be accelerated upon recordation of additional liens on the property or upon certain types of transfers through inheritance permitted under federal and state law. In addition, the due date will not be accelerated for "pending" transfers, but rather only when an actual transfer occurs. Language was also added to make clear that in all cases, the fee would be due and payable no later than 50 years from the date of the Agreement between the Owner and the City.
- MOHCD has clarified sections of the Agreement, Deed and Note regarding the fair market value. The fair market value of the property will be determined according to the procedures outlined in Subdivision Code Section 1344(b) (see page 6 of the Ordinance).
- In order to establish the BMR price for calculation of the fee, MOHCD will review capital improvements made to the property prior to the completion of the transaction. MOHCD has removed language that prevented the owner to claim any capital improvements made after January 18, 2009. Your capital improvements are a fixed amount that will be listed in your Agreement with the City.
Action Required:
You must request enrollment in the Fee and Release Option through MOHCD. To get the process started, you must submit the attached Checklist with paper copies of all necessary attachments (not electronic copies). MOHCD will process requests in the order received and contact you when complete. MOHCD will not process incomplete submissions. MOHCD will begin accepting owner requests on Monday, April 20, 2009. Owners must complete the transaction for this option by January 18, 2011. In order to ensure that your submission can be processed in time, MOHCD must receive your complete application by December 1, 2010.
Links to Documents Related to the Fee and Release Option:
- Ordinance #320-08
- Implementation of Ordinance #320-08 Overview & Options Chart
- Fee and Release Option - Checklist
- Fee and Release Option - Agreement between Owner and City
- Fee and Release Option - Promissory Note and Deed of Trust (if paid by City lien)
- Capital Improvements Review Sheet
Original subdividers
Back to topOption 1: Demonstrate a 20-year affordable rental history and be released from the program
ONLY Original Subdividers are eligible for this option. If you choose to demonstrate that any or all of your BMR units have been rented within the Program's guidelines for 20 years, those units will be permanently released from the Program. Please follow the attached procedures to demonstrate that you have complied with the affordable rental requirements. Rental history must be compiled for each BMR unit.
Action required:
You may notify the City when you are ready to demonstrate your 20-year rental history for each BMR unit at any time. You are not bound by the 24-month option period applicable to pre-legislation owners in the Ordinance.
Links to documents related to the 20-year rental history:
- Standards for Determining 20-year Affordable Rental History
- Historical Rent Limits 1979 - Present (LOW INCOME UNITS)
- Historical Rent Limits 1979 - Present (MODERATE INCOME UNITS)
Option 2: Pay a fee and be released from the program
ONLY Original Subdividers are eligible for this option. If you choose to pay the fee for any or all of your units, those units will be permanently released from the Program. It is important that you read the procedures and legal documents (see documents below) regarding this option. In entering into any legal agreement with the City, the City recommends that an owner retain his or her own legal counsel. MOHCD cannot offer legal advice.
The per unit fee is determined as the lesser of: 1) the fee printed in the Ordinance and re-printed below, or 2) 50% of the difference between the fair market value and the BMR price at the time of repayment.
| Unit Size | Moderate Income Designation (120% AMI) |
Low Income Designation (80% AMI) |
|---|---|---|
| 1-Bedroom or Smaller | $150,000 | $200,000 |
| 2-Bedroom | $250,000 | $300,00 |
| 3-Bedroom | $350,000 | $400,000 |
| 4-Bedroom | $450,000 | $500,000 |
If you are unable to pay the fee immediately for a particular unit, you may take out a loan for such unit with the City in the form of a City Lien. The City Lien will only be allowed if the combined loan to value of the BMR Unit does not exceed 80% of the fair market value (all loans, including the City Lien).
If the combined loan to value exceeds 80%, you may execute an agreement with the City that you will pay the fee or pay down your other debt to meet the 80% loan to value requirement within 10 years. In this case, the City will not release the unit until the terms of the lien agreement are met and a City Lien is recorded. If you do not meet the terms of the lien agreement within the 10-year period, your property will remain part of the current Program.
All liens will accrue interest at the rate of 3% simple interest annually. No partial payments of the lien are allowed. If choosing to pay the fee by City Lien, you will be required to close the transaction through a title company. MOHCD will pay ½ of the closing costs related to recording the City Lien up to a maximum of $650. MOHCD will not pay for closing costs if the lien is being recorded in conjunction with another transaction, such as a refinance. You will be responsible for the fair market appraisal and closing costs associated with all future transactions related to the property, including the repayment of the City Lien, refinance, or sale. The City Lien is due in full 20 years after the effective date of the Ordinance.
MOHCD will follow the procedures for determining the fair market value of the property as published in Subdivision Code Section 1344(b) (see page 6 of the Ordinance). The agreed upon fair market value will be used to calculate the fee amount and the combined loan to value.
Please note that if you select the Fee and Release Option for a unit, you cannot subsequently request a release of such unit under Option 1, above (Demonstrate a 20-year Affordable Rental History and be Released from the Program).
Action required:
You must request enrollment in the Fee and Release Option through MOHCD. To get the process started, please submit the attached Checklist with paper copies of all necessary attachments (not electronic copies). MOHCD will process requests in the order received and contact you when complete. MOHCD will not process incomplete submissions. You are not bound by the 24-month option period applicable to pre-legislation owners in the Ordinance.
Links to Documents Related to the Fee and Release Option:
- Ordinance #320-08
- Fee and Release Option - Checklist for Original Subdivider
- Fee and Release Option - Agreement between Original Subdivider and City
- Fee and Release Option - Promissory Note and Deed of Trust for Original Subdivider (if paid by City lien)
Please note that there will be one Fee and Release Option Agreement to cover all of your BMR units. If you select the lien option for some or all of your units, you will be required to record a separate Promissory Note and Deed of Trust for each unit.
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Condo Conversion owner legislation information
View information about Condo Conversion legislation.
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