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126 <br /> <br /> Mr. Martinelli stated that the buyer could sell the unit at <br /> the market rate at the time of sale. But his equity will be based <br /> on a portion of the ownership, and he has to guarantee repayment <br /> of the second, which will have an interest cap in it. The lower <br /> the price is, the greater the subsidy, which will appreciate <br /> indirectly in the same manner as the rest of the equity. At the <br /> point of sale, the appreciation that has to be realized by the <br /> seller in the market is equal to the share in the market. <br /> <br /> Mr. Tarver stated that he would prefer to increase the number <br /> of affordable units to lowering the price of the existing units. <br /> He inquired if it would create a substantial problem to try and do <br /> that. <br /> <br /> Mr. Martinelli replied that it would involve the same <br /> function of trying to meet the affordable standard and maintaining <br /> the subsidy. However, increasing the number of affordable units <br /> would lessen the amount of the subsidy and diminish the base to <br /> pay for the road and the SDSP improvements. <br /> <br /> Ms. Mohr inquired if the County is looking at recovering some <br /> of the subsidy money from the light industrial development. <br /> <br /> Mr. Martinelli said yes. He explained that there are three <br /> essential subsidies involved in the project. The affordable <br /> housing area of 2.5 acres, plus improvements, would cost between <br /> $350,000 and $400,000 per acre, and the SDSP assignment of costs <br /> would add another $80,000 per acre. <br /> <br /> Mr. Tarver inquired if selling the units for $138,000- <br /> $140,000 involves transferring the underlying cost of improvements <br /> from the area and taking the fees. <br /> <br /> Mr. Martinelli replied that normally, a non-profit agency <br /> would market the units and do the screening to make sure the <br /> buyers meet the requirements. But the cost of this process would <br /> be added to the units. <br /> <br /> Mr. Butler stated that there could be families with income <br /> levels lower than required. He asked if the program precludes <br /> equity sharing in the down payment. <br /> <br /> Mr. Martinelli answered that having a co-signer on the first <br /> would be acceptable. <br /> <br /> Mr. Tarver commented that if the buyer puts in a substantial <br /> amount of money up front, he would be able to get more out of the <br /> house and turn it around faster in terms of resale. <br /> <br /> - 18 - <br /> 3-20-90 <br /> <br /> <br />