24 N.C. Admin. Code 01D .0102 - ELIGIBLE PERSONS AND FAMILIES
(a) For
loans purchased with the proceeds of all bonds other than tax exempt bonds
issued after January 1, 1987:
(1) The agency
hereby finds and declares that income eligible persons and families, within the
meaning of the act, are deemed to be those persons and families who satisfy the
following criteria: insufficient total income, when size of family is
considered, to obtain on the normal housing market without subsidy, from
available housing supply in a given geographical area of residence in North
Carolina, housing found to be decent, safe and sanitary. The agency has
carefully considered all the factors which the General Assembly has specified
in the statutory definition of "persons and families of lower income." A
purpose of the act is to foster the new construction and substantial
rehabilitation of residential housing in the state for persons and families of
lower income by assisting in the permanent financing of such housing and that
the income limits used by the agency in ascertaining who are "persons and
families of lower income" must reflect, among other things, the costs of such
newly constructed and substantially rehabilitated housing. The General Assembly
intended, by means of the act, to assist not only those persons and families
eligible for federal housing assistance predicated on a lower income basis, but
also those persons and families whose incomes are too high to qualify them for
such federal assistance but are too low to enable them to obtain, without
governmental assistance, a mortgage loan to finance the purchase of a decent,
safe and sanitary home. The agency can best effectuate the purposes of the act
by establishing income limits for income eligible persons and families for
specific areas of the state which represent the agency's determination of the
maximum income level which persons and families in such area may have in order
to qualify for assistance under the act. Income eligibility is defined as a
function of median income by area, construction costs, and mortgage loan
underwriting criteria. Each factor is applied as follows to achieve an
equitable result:
(A) The agency used 150
percent of median income.
(B)
Housing construction costs were determined for a prototype of a modest house in
various areas of the state. The Marshall Swift Handbook was used to establish
the base construction costs. Finally, minimum lot costs in rural and urban
areas were added to the construction cost determinations to produce a finished
housing cost for urban areas and for rural areas.
(C) Mortgage lending industry underwriting
standards which establish the amount of loan for which a borrower may qualify
will be used by the agency. The agency assumes that the borrower would seek 100
percent financing at the FHA/VA maximum rate on a 30 year amortization and that
the borrower would be restricted to using 28 percent of his gross monthly
income to make the monthly mortgage payment which would include principal
interest, taxes and insurance.
(D)
Composite figures for median income and for housing cost and mortgage loan
underwriting were calculated upon the following premises:
(i) The median income factor relates to
eligibility for other housing predicated upon a lower income basis.
(ii) The house cost/underwriting figure
establishes minimum financial eligibility in the normal housing
market.
The combination of the two figures at a 50:50 ratio establishes the maximum income limits for the agency.
(2) The agency has, in
accordance with the act, considered the effect of family size on the
sufficiency of income for housing needs and determined that the income limits
computed in accordance with this Section must be increased by eight hundred
dollars ($800.00) a year for the fifth family member and for each additional
family member thereafter in a large lower income family in order to reflect the
additional costs of providing housing for large families, and that the income
limits for one person households shall be three-fourth of such limits, except
when two or more persons in a non-dependent relationship are jointly purchasing
a home, the income of any one person in this relationship cannot exceed the
one-person household limit established by the agency, nor can the combined
incomes of these persons exceed the income limits for families established by
the agency.
(3) An applicant's
income will be calculated by including all income in whatever form and from
whatever source derived, including the following: compensation for services,
including fees, commissions and similar items; gross income derived from
business; gains derived from dealings in property; interest; rents royalties;
dividends; alimony and separate maintenance payments; annuities; income from
life insurance and endowment contracts; pensions; income from discharge of
indebtedness; distributive share of partnership income; income in respect of a
descendant; income from an interest in an estate or trust; payments made by or
on behalf of an employer by reason of death of an employee to the widow or
heirs of the employee; recovery of bad debts; amounts received as reimbursement
for losses; prizes and awards; amounts received or made available from
individual retirement accounts, annuities and retirement bonds. In addition,
the calculation of an applicant's income for this purpose will be increased by
an amount equal to ten percent of the value of all the applicant's non-income
producing tangible assets, excepting personal property and including real
property, securities and stocks.
(b) For loans purchased with the proceeds of
tax exempt bonds issued after January 1, 1987 income eligible persons and
families is defined by the agency to be those persons and families with incomes
not exceeding the income requirements for mortgage revenue bonds established in
Section 143(f) of the Internal Revenue Code 1986.
(1) The sources used in calculating an
applicant's income will be determined according to the rules established by the
Internal Revenue Service in Revenue Ruling 86-124.
(c) In no instance will any person or family
having net assets exceeding forty thousand dollars ($40,000) be considered
eligible for assistance by the agency, except that for persons between the ages
of 62 and 64, the net assets limit shall be fifty thousand dollars ($50,000),
for persons 65 years of age and over, the net assets limits shall be sixty
thousand dollars ($60,000), and for handicapped persons requiring a constant
attendant the net assets limit shall be seventy five thousand dollars
($75,000). For the purposes of this Section, "net assets" shall mean the total
assets of the borrower and excluding household goods, in the Home Improvement
Loan Program, the structure to be improved and its site, any debts against the
borrower and excluding also, any assets of a borrower determined by the
executive director to be appropriate for exclusion, including, without
limitation, assets which in the determination of the executive director the
borrower is dependent upon for a livelihood. Any such determination that assets
are appropriate for exclusion shall be evidenced by a certificate signed by the
executive director and filed with the secretary of the agency.
(d) The agency deems that persons and
families with annual incomes not in excess of the income limits established by
application of the above definitions and with net assets not more than those
set forth above, are persons and families which require such assistance as is
made available by the act and such persons and families are hereby deemed,
therefore, to be persons and families of lower income eligible to occupy
residential housing financed by means of such assistance.
Notes
Eff. May 28, 1976;
Amended Eff. July 2, 1981; January 31, 1980; March 22, 1979;
Transferred from T15: 14 Eff. December 1, 1981;
Amended Eff. March 1, 1983;
Legislative Objection Lodged Eff. March 7, 1983;
Curative Amended Eff. March 9, 1983;
Amended Eff. July 1, 1987; March 1, 1984; May 1, 1983;
Pursuant to G.S. 150B-21.3A, rule is necessary without substantive public interest Eff. September 23, 2017.
Authority G.S. 122A-3; 122A-5; 122A-5.1;
Eff. May 28, 1976;
Amended Eff. July 2, 1981; January 31, 1980; March 22, 1979;
Transferred from T15: 14 Eff. December 1, 1981;
Amended Eff. March 1, 1983;
Curative Amended Eff. March 9, 1983;
Amended Eff. July 1, 1987; March 1, 1984; May 1, 1983;
Pursuant to G.S. 150B-21.3A, rule is necessary without substantive public interest Eff. September 23, 2017.
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