Overview
Homebuyer Selection
Goals
The goals that these policies are intended to support are:
a) To provide guidelines for evaluating applicants in a fair and equitable manner and to assure the evaluation process is transparent and made fully available to applicants.
b) To assure continuity in selection criteria and policies;
c) To assure that NHOM implements policies consistent with the laws and principles of Fair Housing.
d) To find the best match between households and housing units that are the right price and the right size.
Selection Criteria
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A. THRESHOLD SELECTION CRITERIA (PRIMARY CRITERIA)
- The following criteria reflect the NHOM Community Land Trust’s goal to reasonably match household size to unit size and household income to housing costs. To qualify for a NHOM home, applicants must be:
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1. Majority Age – must be 18 in Hawaii to qualify for a mortgage
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2. Citizen of the USA or resident alien
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3. Income Eligible:
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a) Maximum Income:
- To be considered for selection, a household must have a combined annual income that does not exceed the maximum income limit established for the specific housing opportunity (e.g., 80%, 120%, or 140% of the HUD Area Median Income for households of equal size residing in Maui County, or adjusted limits for Hāna, Lānaʻi, and Molokaʻi as determined by the County of Maui Department of Housing or other applicable funding agency). The grant or funding source for the property will determine the applicable maximum income limit (for example, the County of Maui Affordable Housing Fund requires households to earn no more than 120% of Area Median Income). In addition, households at any income level may be eligible if they:
- 1. Wish to place land they own into the NHOM Community Land Trust; or
- 2. Wish to enter into a sale-leaseback arrangement with the NHOM Community Land Trust; or
- 3. Agree to be bound by the NHOM Community Land Trust’s resale restrictions.
b) Minimum Income:
To be considered for selection, a household’s monthly income, when multiplied by the appropriate debt-to-income ratio, must be sufficient to support the housing costs associated with the home being offered. In general, households that require a non-occupant co-signer in order to obtain a mortgage will not be considered.
c) Affordability:
In general, “affordable” means that the monthly cost of occupying a particular home does not exceed approximately 35% of the household’s monthly income, subject to the requirements of the lender and the mortgage program for which the household may qualify.
d) Assets:
To be considered for selection, a review of the household’s financial resources and circumstances must indicate a limited ability to compete successfully in Maui County’s conventional housing market. Asset limits may follow the requirements of the applicable funding source (for example, the County of Maui Residential Workforce Housing Policy limits household assets to 160% of the County’s Area Median Income as established by HUD or adjusted for Hāna, Lānaʻi, and Molokaʻi).
4. Creditworthiness:
In all cases, a household must be able to demonstrate a sense of ownership of its financial obligations, and a history of responsible effort to meet them. The household must be “pre-approved” by an institutional mortgage lender to determine whether mortgage financing is likely to be obtained by the household based on the applicant’s available cash resources and the known requirements of various mortgage programs for which the household may be eligible, and have completed the NHOM 4-step qualification process.
B. SECONDARY SELECTION CRITERIA
The following considerations will be given weight in evaluating applicants. The considerations presented here, not necessarily in order of priority or importance, will be considered in those instances when there are two or more households expressing interest in a particular unit and who meet the Threshold Eligibility Criteria described above.
1. Residency:
Preference may be given to residents of the community in which the home is located, followed by residents of Maui County, and then residents of the State of Hawaiʻi. Residency must be documented.
2. First-Time Homebuyer:
First-time homebuyers will receive preference. A first-time homebuyer is defined as a household that has not owned a principal residence within the past three years, or a single parent who previously owned a home with a former spouse but no longer resides in that home. Households who previously owned a home but lost it due to disaster, destruction, or involuntary displacement may be considered first-time homebuyers for the purpose of this policy.
3. Appropriate Size:
NHOM seeks to reasonably match household size to the size of the available home. In general, preference may be given to households whose size and composition are appropriate for the number of bedrooms, consistent with HUD occupancy standards (typically one to two persons per bedroom), while allowing for documented household needs such as age, gender mix, disability, or multi-generational living patterns.
General guidelines: 1 Bedroom: 1–2 persons 2 Bedroom: 2–4 persons 3 Bedroom: 3–6 persons 4 Bedroom: 4–8 persons 5 Bedroom: 5–10 persons
Final determinations will consider household composition and Fair Housing requirements.
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4. Need:
- NHOM may give consideration to households with greater demonstrated housing needs. When comparing otherwise eligible applicants from different income categories, preference may be given to the household in the lower income category. Special consideration may also be given to households facing documented immediate or near-term displacement, including displacement caused by disaster, loss of rental housing, unsafe or unhealthy housing conditions, overcrowding, or other circumstances beyond the household’s control. The evaluation of need will be applied consistently and without regard to any protected class.
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5. Application on File:
- When applicants are otherwise similarly qualified, preference may be given to households whose completed homeownership application has been on file with NHOM for a longer period of time.
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6. NHOM Community Land Trust Membership:
- Households who are NHOM members in good standing may receive secondary consideration. NHOM homeowners who apply to purchase another NHOM home may make their Purchase Contract contingent upon the sale of their existing NHOM home pursuant to Article 10 of the Ground Lease and Purchase Option. NHOM will not accept offers contingent upon the sale of a market-rate home.
7. Community Involvement:
Secondary consideration may be given to applicants who have demonstrated documented involvement in community service or volunteer activities within Maui County. Community involvement must be open to all individuals and may not be based on religion, organizational membership, or affiliation with any group identified as a protected class.
8. Heirs:
When NHOM acquires heir property, documented heirs of the former homeowner who meet all Threshold Eligibility Criteria and have a complete, active homeownership application may receive secondary consideration. For purposes of this policy, “heir property” refers to a home acquired by NHOM that was transferred or conveyed by the legal heirs of a deceased homeowner. All selections must be made within Fair Housing requirements and NHOM’s occupancy and income guidelines.
9. Additional Criteria:
On a project-by-project basis, additional secondary criteria may be applied, such as proximity to employment or current work in Maui County, when required or permitted by the project’s funding source. Any additional criteria will be established in advance of the selection process, applied uniformly, and in compliance with Fair Housing requirements.
