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The recapture provision ensures that all or a portion of the City's HOME assistance to homebuyers or <br />home owners is recaptured if the housing does not continue to bethe principal residence of the family <br />for the duration of the applicable period of affordability. In establishing this provision, the City is <br />subject to the limitation that when the recapture requirement is triggered by a sale (voluntary or <br />involuntary) of the housing unit, and there are no net proceeds or the net proceeds are insufficient to <br />repay the HOME investment due, the City can only recapture a portion of the net proceeds, if any. <br />The net proceeds are the sales price minus superior loan repayment (otherthan HOME funds), capital <br />improvements, and any closing costs. <br />The recapture provisions are based on the period of time that the homebuyer has resided in the <br />property as their primary residence. These provisions comply with HUD's affordability period <br />requirements: <br />Assistance under $15,000: 5-year affordability period <br />Assistance between $15,000 - $40,000: 10-year affordability period <br />Assistance over $40,000: 15-year affordability period <br />In the event of a mortgage default, the City has the right of first refusal before foreclosure and may <br />use additional HOME funds to acquire the housing in order to preserve the housing's affordability. <br />However, notwithstanding a foreclosure situation, the City intends to recapture all or some of its <br />HOME funds invested during or at the end of the established affordability period, if practicable. <br />Recaptured HOME funds consist of loan payments (including interest) and/ora loan payoff, upon sale <br />if the assisted owner is no longer residing in the assisted residence or for any other breaches of the <br />agreement with the City. Recaptured funds may be used for any HOME eligible activity. <br />These recaptured funds are identified in the City's accounting system by a unique recaptured revenue <br />object number. Any recaptured funds will be used by the City before any additional HOME funds. <br />3. A description of the guidelines for resale or recapture that ensures the affordability of units acquired <br />with HOME funds? See 24 CFR 92.254(a)(4) are as follows: <br />See above. <br />4. Plans for using HOME funds to refinance existing debt secured by multifamily housing that is <br />rehabilitated with HOME funds along with a description of the refinancing guidelines required that will <br />be used under 24 CFR 92.206(b), are as follows: <br />N/A — the City will not be using HOME funds for this activity. If the City elects to refinance existing <br />debt, it will provide its policies and procedures as part of an amendment to its Action Plan. <br />Consolidated Plan SANTA ANA 166 <br />OMB control No: 2506-0117(exp. 06/30/2018) 75A-174 <br />