ASSOCIATION OF VILLAGE COUNCIL PRESIDENTS

REGIONAL HOUSING AUTHORITY

MUTUAL HELP AND OCCUPANCY AGREEMENT
Article 1.
1.1.

Parties and Definitions

Parties

This Mutual Help and Occupancy Agreement ("Agreement) is entered into by and between AVCP
REGIONAL HOUSING AUTHORITY (HA) and the Homebuyer whose signature(s) appears below.
Under this Agreement, the HA will give the Homebuyer an opportunity to purchase the Unit subject to this
Agreement if the Homebuyer fully complies with all terms and conditions of this Agreement. The terms
and conditions of this Agreement are attached hereto and made a part of this Agreement. This
Agreement has been executed in duplicate originals, and the Homebuyer hereby acknowledges receipt of
one such original.
HA:

Association of Village Council Presidents Regional Housing Authority

By:

__________________________________
Ronald B. Hoffman
Executive Director

Homebuyer:
____________________________
PRINTED NAME

____________________________
SIGNATURE

Homebuyer's Spouse:
____________________________
PRINTED NAME

____________________________
SIGNATURE

_______________
Project No.

_______________
Unit No.

__________
__________

Initial Homebuyer
Subsequent Homebuyer

DATE: _____________________
1.2.

Definitions

Administration Charge. The monthly housing cost established by the HA from time to time based on the
HAs estimated operating costs covering the following categories: (a) administrative salaries, payroll,
taxes, travel; postage, telephone, computer software and office supplies; office costs, including
maintenance and utilities; general liability insurance or risk protection costs; accounting services; legal
expenses; program losses, unreimbursed maintenance costs and move-out costs; operating reserves;
and (b) general expenses, such as premiums for fire and related insurance, payments in lieu of taxes, if
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any, and other similar expenses. The Administrative Charge is established to ensure the long-term
financial viability of the Project and the Homeowner opportunity program.
Homebuyer. The person(s) who has executed this Agreement and has not yet exercised his/her option
to purchase the Unit. The Homebuyer has no equitable interest in the Unit or Property and is a Lessee
prior to the transfer of title.
Homeowner. A former Homebuyer who has achieved ownership of his/her Unit and has acquired title to
the Unit.
MEPA or Monthly Equity Payments Account. A Homebuyer account credited with the amount by
which each required monthly payment exceeds the Administration Charge. The MEPA may also contain
any voluntary payments made by the Homebuyer, over and above the required payments.
Mutual Help Contribution. The land, cash, or any combination thereof, required to be provided by the
Homebuyer in exchange for receiving the option to purchase. The Mutual Help Contribution is credited
toward purchase of a home. Contributions for land are not refundable once substantial improvements
have been made.
MHOA. A Mutual Help and Occupancy Agreement between the HA and a Homebuyer. The Agreement
constitutes a lease-option agreement. The Homebuyer acquires no equitable interest in the Unit during
the term of the Agreement, until the option to purchase is exercised and the title is transferred.
Policies. The HA's adopted policies which detail the operating rules and procedures for this Mutual Help
program, and which interpret provisions of this Agreement.
Purchase Price Schedule. The schedule identifying the purchase price of the home.
Subsequent Homebuyer. Any Homebuyer other than the first Homebuyer who occupies a Unit pursuant
to an MHOA.
Successor Homebuyer. An eligible individual selected by the Homebuyer or the HA to replace the
original Homebuyer on the MHOA. To qualify, the successor must accept the home in the condition
received from the original Homebuyer, assume all financial obligations under the MHOA, and agree to
comply with the MHOA.
Termination. As used in this Agreement, the phrase "termination" does not include title transfer to the
Homebuyer. Effective on the date of the title transfer, the MHOA is considered fully performed.
Unit. The dwelling unit covered by this Agreement.
Other. In addition to the definitions listed above, certain terms have the same meaning in this Agreement
as they have in the construction contract between the HA and the builder.
Article 2.

Termination Due to Change in Income Before Authorized Occupancy

2.1.
If a family's income changes materially after the MHOA is executed but before the Homebuyer is
authorized to occupy the Unit, the HA may reject the family for this program and cancel this Agreement
upon ten (10) days' written notice to the Homebuyer.
2.2.
If the family's income materially increases, the HA may counsel the Homebuyer about other
homeownership opportunities he/she may qualify for. If the family income materially decreases, the HA
may advise the family of rental openings at the HA, if any.

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Article 3.

Mutual Help Contribution

3.1.
In order to receive the right to occupy the Unit and obtain an option to purchase the Unit at a
future date, the Homebuyer must provide a Mutual Help Contribution valued at $1,500 unless otherwise
specified. If the Homebuyer exercises his/her option to purchase the Unit, the value of the Mutual Help
Contribution will be credited to the Purchase Price.
3.2.
The MH contribution may consist of land, cash, or any combination thereof. Contributions may be
made by an Indian tribe on behalf of a family. The value of the contribution must be $1,500 unless
otherwise specified.
3.3.

Land Contributions

Land has been leased, donated or conveyed to the HA, or will be so leased, donated or conveyed as a
contributed site for the Unit. This land is valued at $__________ ($1,500 unless otherwise specified).
This amount has been credited to the Homebuyer and is not refundable in the event of termination.
3.4.

Cash Contribution

The Homebuyer agrees to make a cash contribution in the amount of $__________ which shall be paid in
full to the HA not later than the date on which the Unit is available for occupancy in accordance with the
following schedule:
Payment Due Dates
Date Due: __________
Date Due: __________

Amount Due
Installment 1: $_______________
Installment 2: $_______________

Payment in full is required prior to Homebuyers occupancy of the Unit. If either installment is not paid on
or before the due date, the HA may terminate this MHOA by giving ten (10) days written notice to the
Homebuyer.
3.5.

Disposition of Contributions on Termination Not Due to Homebuyer's Default

If this Agreement is terminated by the HA for any reason other than the Homebuyers default, any Mutual
Help Contribution paid in cash will be refunded to the Homebuyer. Where the Homebuyer has provided
his/her own privately held land, and so long as no improvements have been made on the land, the HA will
return the land contribution. Where the project has progressed substantially, the HA may opt to pay the
cash market value of the land to the Homebuyer. Where land has been contributed by an Indian Tribe,
the Homebuyer is not entitled to any refund or credit.
3.6.

Disposition of Mutual Help Contribution Upon Homebuyers Default

The Mutual Help Contribution does not entitle the Homebuyer to any right, title or equity in or to the
property. Upon termination due to Homebuyers default, the Homebuyer is not entitled to any refund of
the Mutual Help Contribution.
Article 4.
4.1.

Commencement of Occupancy

Notice

4.1.1. The HA shall determine whether the Homebuyer has met all requirements for occupancy, including
meeting the Mutual Help Contribution requirements and fulfillment of Homebuyer counseling
requirements. In the event of an affirmative determination, the Homebuyer shall be notified in writing that
the Unit is available for occupancy as of a date specified in the notice (Date of Occupancy).

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4.1.2. If the HA determines that the Homebuyer has not fully provided the MH Contribution or has not
met any of the other conditions for occupancy, the Homebuyer shall be so notified in writing. The Notice:
(1) must specify the date by which all requirements must be satisfied; and (2) shall advise the Homebuyer
that the MHOA will be terminated if the requirements are not satisfied by the specified date.
4.2.

Lease Term

The term of the lease under this Agreement shall commence on the Date of Occupancy and shall
continue thereafter until the Homebuyer acquires title of the Unit or this Agreement is terminated as
provided at Article 11. Generally, the term shall not exceed 25 years except as authorized under
Article 9.4.8.
Article 5.
5.1.

Inspections: Responsibility for Items Covered by Warranty

Inspection Before Date of Occupancy and Identification of Warranties

5.1.1. To establish a record of the condition of the Unit on the Date of Occupancy, the Homebuyer
(including a subsequent Homebuyer) and the HA shall make an inspection of the Unit as close as
possible to, but not later than, the date the Homebuyer takes occupancy. After the inspection, the HA
representative shall give the Homebuyer a signed statement of the condition of the Unit and a full written
description of all Homebuyer responsibilities. The Homebuyer shall sign a copy of the statement,
acknowledging concurrence or stating objections; and any differences shall be resolved by the HA. A
copy of the signed inspection report shall be kept at the HA.
5.1.2. Within 30 days of commencement of occupancy of the Unit, the HA shall furnish the Homebuyer
with a list of applicable contractors, manufacturers and suppliers warranties indicating the items covered
and the periods of the warranties, and stating the Homebuyers responsibility for notifying the HA of any
deficiencies that would be covered under the warranties. The HAs failure to provide copies of such
warranties shall not extend or increase the HAs responsibility under this Agreement.
5.2.

Inspections During Contractors Warranty Periods; Responsibility for Items Covered by

Contractors, Manufacturers or Suppliers Warranties

In addition to inspection required under Article 5, the HA may inspect the Unit regularly in accordance
with Article 7.3. However, it is the responsibility of the Homebuyer, during the period of applicable
warranties, to promptly inform the HA in writing of any deficiencies arising during the warranty period
(including manufacturers and suppliers warranties) so that the HA may enforce any rights under the
applicable warranties. If a Homebuyer fails to timely furnish such a written report, or the HA is unable,
despite reasonable efforts, to obtain redress under the warranty, correction of the deficiency shall be the
sole responsibility of the Homebuyer.
5.3.

Periodic Inspections

The HA has the right to perform inspections of the Unit upon reasonable notice to the Homebuyer. Such
notice may be given personally, by mail, in writing, or by general notice posted at prominent locations in
the community. Twenty-four hours' notice is considered sufficient, but may be shortened in the event of
an emergency. The Homebuyer shall permit the HA to inspect the Unit at reasonable hours and intervals
during the period of this Agreement.
5.4.

Inspection Upon Termination of Agreement

If this Agreement is terminated for any reason after commencement of occupancy, the HA shall inspect
the Unit, after notifying the Homebuyer of the time for the inspection, and shall give the Homebuyer a
written statement of the cost of any maintenance, repairs or replacement required to put the Unit in
satisfactory condition for the next occupant (see Articles 11.4 and 11.5).

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Article 6.

Homebuyer Payments

6.1.
The amount of the Required Monthly Payment for a Homebuyer is determined in accordance with
this Article.
6.2.

Minimum Payment Amount

Except as provided in Article 6.5, the Required Monthly Payment shall be not less than the Administration
Charge established by the HA. Increases in the Administration Charge shall go into effect on or after the
90th day after the HA sends written notice of the increase.
The initial Administration Charge is $________________.
6.3.

Payments Based on 15 Percent of Income

6.3.1. Where the Administration Charge is less than 15 percent of the households adjusted monthly
income, the Required Monthly Payment shall be computed by multiplying adjusted income by 15 percent.
From time to time, the HA may establish a cap on such payments, in accordance with its Policies. The
amount by which each payment exceeds the Administration Charge shall be credited to the MEPA, or at
the HAs election, to any past-due Required Monthly Payments, charges for HA-performed maintenance,
repairs or replacements, or HA-provided utilities, as provided in Article 8.2.
6.4.

Adjustments in the Amount of the Required Monthly Payment

6.4.1. After the initial determination of the Homebuyers Required Monthly Payment, the HA shall
increase or decrease the amount of such payment in accordance with HA Policies to reflect changes in
adjusted income (pursuant to income reexamination by the HA), adjustment in the Administration Charge
or in any of the other factors affecting the computation of the Homebuyers Required Monthly Payment.
6.5.

Hardship Application Based on Very Low Income

If, after occupancy, the Homebuyer establishes that the Administration Charge is equal to or greater than
30 percent of the adjusted household income, the household may qualify for a reduced Required Monthly
Payment due to hardship. Upon approval, the Required Monthly Payment may be calculated based on
30 percent of the adjusted household income, until such time as the household can again support
payment of the Administration Charge, or the MHOA is terminated as provided below. It is the
Homebuyers responsibility to notify the HA when the household income decreases such that the
Homebuyer cannot pay the Administration Charge.
6.5.1. Hardship Application to Pay Less Than Administration Charge. Unless the Homebuyer notifies the
HA in writing that the Homebuyers household income has become too low to pay the Administration
Charge, and successfully applies for a reduced payment, the HA will continue to charge the established
Required Monthly Payment, which is not less than the Administration Charge. The Homebuyer shall be
liable for such monthly charges, regardless of income.
6.5.2. Contents of Hardship Application. The Homebuyer shall (1) complete and certify the Statement of
Household Income; and (2) briefly describe how long the hardship is anticipated to last. Temporary
reductions in household income (defined as six months or less) are insufficient to justify waiver of the
Administration Charge. In its discretion, the HA may use income averaging over a period of up to three
years to determine the best estimate of the households annualized income.
6.5.3. Hardship Adjustment. If the hardship application is granted, the HA shall determine the new
monthly payment based on 30 percent of adjusted household income, which shall go into effect the first
day of the calendar month in which the determination is made. The HA shall determine an appropriate
schedule of household income reporting and verification. Automatic reports and verifications may be

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required as often as every 90 days. The Homebuyer shall promptly report any increase in household
income to the HA.
6.5.4. Effect of Paying Less Than the Administration Charge. Each payment of the Administration
Charge reduces the purchase price of the home. When the Homebuyer pays less than the Administration
Charge, the purchase price for the home will not decline. In the event the Homebuyer resumes monthly
payment of the Administration Charge, the purchase price will again decline one step with each payment
as provided in the Purchase Price Schedule.
6.5.5. Duration of Administration Charge Waiver. Where the HA determines that the hardship is
expected to last, or does last, for 18 months or more), the Homebuyer shall be counseled on the
availability of other housing programs, if available, and shall be given a specific period established by the
HA, not to exceed one year, to (1) voluntarily terminate the MHOA, in accordance with Article 11.3 below;
or (2) voluntarily successor the home to an eligible and qualified individual (see Article 12). The HA may,
but is not required to, offer conversion of the home in place to a rental Unit. If the Homebuyer fails to
exercise his/her decision within the time allowed, and is still unwilling or unable to pay the Administration
Charge, the HA may terminate this Agreement in accordance with Article 11 below.
6.5.6. Responsibilities Unchanged. Waiver of the Administration Charge shall not reduce or otherwise
affect the Homebuyers responsibility to provide all maintenance, repairs and replacements for the home.
Failure to pay the reduced payment and any other violation of the Agreement shall constitute grounds for
termination and eviction.
6.6.

Collection and Enforcement Policy

Enforcement of this Agreement and collection of past-due payments and charges will be pursued in
accordance with the HAs Policies. A copy of the pertinent Policy is available at the HA office, and shall
be provided to the Homebuyer upon request.
Article 7.

Maintenance, Utilities and Use of Unit

7.1.
The HA will provide a habitable dwelling at the original Date of Occupancy. The HA has made
and makes no representations concerning the quality, desirability, marketability, energy efficiency or other
characteristics of the home other than habitability.
7.1.1. In consideration of granting the Homebuyer the opportunity to purchase the Unit at substantially
less than market price, the Homebuyer agrees to provide all utilities and to perform all repairs,
replacements and maintenance, except for warranty items corrected by the appliance supplier or builder
in accordance with Article 5.2.
7.1.2. The Homebuyer shall be responsible for routine and nonroutine maintenance of the Unit, including
all repairs and replacements (including those resulting from damage from any cause). The Homebuyer
shall maintain the home in a decent, safe and sanitary condition in compliance with the HAs Policies.
The HA shall not be obligated to pay for or provide any maintenance of the Unit other than the correction
of warranty items reported during the applicable warranty periods in accordance with Article 5.2.
7.1.3. The Homebuyer acknowledges that he/she has had an opportunity to independently (1) inspect the
home; (2) request a professional inspection; (3) review design or construction documents on file at the
HA; and (4) evaluate the value of the home and the payments and price to be paid for it. Homebuyer
agrees that if he/she decides the home is not worth the cost charged, or is found to be undesirable for
reasons other than Homebuyer default or initial habitability, Homebuyer has the option to (1) buy the
home and make any desired improvements; (2) request HA authorization to make structural changes at
the Homebuyers expense; or (3) voluntarily terminate this Agreement pursuant to Article 11.3.

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7.2.

Homebuyers Failure to Maintain

7.2.1. Failure of the Homebuyer to perform maintenance, repair and replacement obligations constitutes
a breach of this Agreement and grounds for its termination. Upon the HAs determination that the
Homebuyer has failed to perform its maintenance obligations, the HA shall notify the Homebuyer of the
violation or breach. If the problem is correctable, the Homebuyer shall respond by offering a plan to cure
the breach and assure future compliance. The plan shall provide for the work to be done within a
reasonable time by the Homebuyer, or be done by the HA and charged to the Homebuyers account with
a deposit or plan for prompt payment. If the Homebuyer fails to agree to or carry out an approved plan, or
the violation is not correctable, this Agreement shall be terminated in accordance with Article 11.
7.2.2. If the HA determines that the condition of the property creates a hazard to the life, health or safety
of the occupants or the community, or if there is a risk of damage to the property if the condition is not
corrected, and it appears that the Homebuyer is unable, unwilling or unavailable to perform the work, the
HA may, at its option, perform the work and charge the Homebuyer in accordance with Article 8.2.
7.2.3. Any work performed by the HA under this Article shall be accounted for through a work order
stating the nature of and charge for the work. The HA shall give the Homebuyer copies of all work orders
for the home. Performance of maintenance services by the HA shall not constitute waiver of any
Homebuyer breach or limit the HAs right to terminate this Agreement.
7.3.

Inspections

The HA may conduct a complete interior and exterior examination of each Unit at least once a year, and
shall furnish a copy of the inspection report to the Homebuyer. The HA shall take appropriate action, as
needed, to remedy conditions shown by the inspection, including steps to assure performance of the
Homebuyer 's obligations under this Agreement.
7.4

Homebuyer 's Responsibilities for Utilities

The Homebuyer is responsible for the cost of furnishing utilities for the Unit. The HA shall have no
obligation for the utilities. However, if the HA determines that the Homebuyer is unable to pay for the
utilities for the Unit, and that this inability creates conditions that are hazardous to life, health or safety of
the occupants, or threatens damage to the property, the HA may, at its option, pay for the utilities on
behalf of the Homebuyer and charge the Homebuyers accounts for the costs in accordance with
Article 8.2. If the Homebuyer fails to cure the violation or the Homebuyer 's accounts have been
exhausted, the HA shall pursue termination of this Agreement.
7.5.

Obligations with Respect to Unit and Other Persons and Property

7.5.1. The Homebuyer shall occupy the Unit as the Homebuyers principal place of residence. Failure to
reside in the Unit will result in termination of this Agreement. The Homebuyer shall comply with all HA
Policies covering pre-approved absences, subleasing and vacancies.
7.5.2. The Homebuyer may request HA permission to operate a small business in the Unit. The HA shall
grant this authority where the Homebuyer provides the following assurances:
7.5.2.1. The Unit will remain the Homebuyer s principal residence;
7.5.2.2. The business activity will not disrupt the basic residential nature of the housing site; and
7.5.2.3. The business will not require permanent structural changes to the Unit that could
adversely affect a future Homebuyer s use of the Unit.
The HA may rescind such authority whenever any of the above assurances are violated.

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7.5.3. The Homebuyer shall at all times abide by local law, and shall commit no crimes or violations on or
near the premises. Repeated or serious violations of quiet enjoyment, creation of health hazards and any
criminal activity, including bootlegging or drug-related activities on or near the premises, will constitute
grounds for termination and eviction.
7.6.

Structural Changes

7.6.1. Structural changes or additions to the Unit require pre-approval by the HA. The HA may approve
the change upon a determination that such change would not: (1) impair the value of the Unit, the
surrounding Units, or the Project as a whole; or (2) affect the use of the Unit for residential purposes.
7.6.2. If the change is not approved, the Homebuyer may exercise the option to purchase the home and
then make the changes as the Homeowner. Where a proposed change is substantial or expensive, or
the Homebuyer makes a change without obtaining HA approval, the HA may require the Homebuyer to
buy the home.
7.6.3. Additions to the Unit include, but are not limited to, energy-conservation items such as solar
panels, wood-burning stoves, flues and insulation. Any changes or additions made in accordance with
this Article shall be at the Homebuyer s expense. In the event of termination of this Agreement, the
Homebuyer shall not be entitled to any compensation or reimbursement for such changes or additions.
Structural changes or additions by the Homebuyer made prior to transfer of title do not entitle the
Homebuyer to any equity interest in the property. Such changes or additions are the sole property of the
HA until such time as the title is transferred to the Homebuyer.
Article 8.
8.1.

Homebuyer Accounts

Equity Reserve

8.1.1. The HA shall maintain a separate Monthly Equity Payments Account (MEPA") for each
Homebuyer. The HA shall credit this account with the amount by which each Required Monthly Payment
exceeds the Administration Charge and any past-due charges. Should the Homebuyer fail to pay the
Required Monthly Payment, the HA may in its discretion reduce the MEPA by the amount owed each
month towards the Administration Charge, until the MEPA has been fully expended. The existence of an
MEPA balance shall not prevent the HA from terminating a Homebuyer who has substantially breached
his/her payment or other obligations under this Agreement. The HA shall have no obligation to permit the
accumulation of debit balance in the MEPA.
8.2.

Charges for Maintenance or Utilities

8.2.1. Maintenance, repairs, replacements or utilities paid for by the HA in accordance with Article 7 may
be deducted from the Homebuyers MEPA balance.
8.2.2. Past due maintenance or utility charges may be automatically deducted from the MEPA balance,
without notice to the Homebuyer.
8.3.

Disposition of Accounts

When the Homebuyer exercises his/her option to purchase the Unit, any balances in the Homebuyers
MEPA and regular account shall be applied in accordance with Article 9.4. If this Agreement is
terminated by the Homebuyer or the HA, the balances in the Homebuyers MEPA and regular account
shall be applied or disbursed in accordance with Article 11.4.
8.4. Use of Reserve, Credit and Accounts; Nonassignability
The Homebuyer shall have no right to receive or use the MEPA or the Mutual Help Contribution credit.
Credits in the regular Homebuyer account may be applied exclusively toward charges or payments due
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under this Agreement. The Homebuyer shall not, without the approval of the HA, assign, mortgage or
pledge any right in this Agreement to a creditor, assignee or third party. The HA, in its discretion, and
according to adopted Policies, may authorize the Homebuyer to use a portion of the MEPA to perform
improvements on the Unit, subject to a full repayment agreement.
Article 9.
9.1.

Purchase of Unit

General.

9.1.1. The HA provides the Homebuyer an opportunity to purchase the Unit under this Agreement (a
lease with an option to purchase) at a subsidized price, in accordance with the Purchase Price Schedule.
The Homebuyer may exercise the option to purchase the home at any time during the term of this
Agreement, but only if the Homebuyer has met all obligations under this Agreement, including monthly
payment obligations.
9.1.2. The option must be exercised by clear written notice to the HA. The Homebuyer may obtain
financing from the HA or an outside source, at any time, to cover the applicable purchase price. The
financing may be provided using such methods as a mortgage or a loan agreement. If the Homebuyer is
able to obtain financing from an outside source, through the Homebuyers own funds, or through a
combination of funds, the HA shall sell and convey the home to the Homebuyer in accordance with
Article 9.4.
9.2.

Purchase Price and Purchase Price Schedule

9.2.1. Initial Purchase Price. The HA shall determine the initial purchase price of the home and state the
Initial Purchase Price on the attached Purchase Price Schedule. The Purchase Price Schedule provides
for a reduction in price over a 25-year period.
9.2.2. Declining Purchase Price. Each time the Homebuyer makes a payment of not less than the
Administration Charge, the Purchase Price of the home is reduced by one step. Where the obligation to
pay at least the Administration Charge is waived, the Purchase Price Schedule shall be suspended until
payments are resumed.
9.3.

Mandatory Purchase

9.3.1. The Homebuyer may be required to exercise the purchase option or voluntarily terminate the
Agreement if the HA determines that the Homebuyer:
9.3.1.1. Has the sustained financial ability to pay the monthly principal, interest, tax and
insurance charges on the home, using an interest rate of not less than 1 percent nor more than 9 percent;
over a mortgage period not to exceed 20 years;
9.3.1.2. Has demonstrated a pattern of absenteeism, subletting or vacancy, or has moved from
the residence;
9.3.1.3. Has through inheritance, marriage or other acquisition become the owner or co-owner
(with full and equal right of occupancy) of another livable residence;
9.3.1.4. Has family income in excess of 100 percent of the applicable median income and
qualifies for outside financing or for in-house financing from the HA; or
9.3.1.5. Has made significant changes or alterations in the home, and such changes were made
without the HA's permission.
9.3.2. If the HA determines that the Homebuyer is required to purchase the home under this Article, the
HA shall send written notice to the Homebuyer, stating (1) the reason for the mandatory purchase; (2) the
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deadline by which the Homebuyer shall exercise the purchase option, which shall be not less than
90 days; and (3) if the Homebuyer qualifies for HA in-house financing, a brief description of the terms on
which such financing would be offered. Failure of the Homebuyer to comply with the notice shall
constitute grounds for termination and eviction.
9.4.

Conveyance of Unit

9.4.1. Purchase Procedure. In accordance with this Agreement, the HA shall convey title to the
Homebuyer when the balance of the purchase price can be covered from the amount in the MEPA plus
the Mutual Help Contribution credit. The Homebuyer may supplement the amount in the MEPA with
his/her own funds.
9.4.2. Amounts to be Paid. The Purchase Price shall be the amount shown on the Purchase Price
Schedule for the month in which the settlement date falls, less any adjustments based on payment
reductions or suspensions pursuant to Articles 6.5.4 and 13.2.3.
9.4.3. Settlement Costs. Settlement Costs are the costs incidental to acquiring ownership, including the
costs and fees for credit report, field survey, title examination, title insurance, inspections, deed
preparation, Homebuyer's attorney, closing, recording, transfer taxes, financing fees and mortgage loan
discount. Settlement costs shall be paid by the Homebuyer. The Homebuyer's excess MEPA balance
may be used toward the settlement costs.
9.4.4. Disposition of Homebuyer Accounts. When the Homebuyer purchases the home, the cash
balance in the Homebuyers MEPA, supplemented by the Mutual Help Contribution credit, shall be
applied in the following order:
9.4.4.1. For the initial payment for fire and extended coverage insurance on the home after
conveyance, if the HA finances purchase of the home in accordance with Article 10;
9.4.4.2. For settlement costs, if the Homebuyer so directs;
9.4.4.3. For the purchase price; and
9.4.4.4. The balance, if any, will be refunded to the Homebuyer.
9.4.5. Settlement. A home shall not be conveyed until the Homebuyer has met all the obligations under
this MHOA. The settlement date shall be mutually agreed upon by the parties. On the settlement date,
the Homebuyer shall receive the documents necessary to receive the HAs right, title and interest in the
home, subject to any applicable restrictions, covenants, easements or leases as expressed in such
documents. The required documents shall be approved by the HAs attorney and provided to the
Homebuyer for review.
9.4.6. HA Investment and Use of Sale Proceeds. To the extent required by law, all proceeds held or
received by the HA from the sale of a unit in a project financed with grants shall be used for purposes
related to low-income housing assistance.
9.4.7. Removal of the Home from MH Program. When title has been transferred to the Homebuyer,
whether or not with HA financing, the Unit is removed from the HAs project. If the HA has provided the
financing for the sale, the HAs relationship with the Homeowner becomes that of lender/borrower, in
accordance with documents executed during settlement.
9.4.8. Homebuyer with Delinquencies. If a Homebuyer has a delinquency at the end of the standard
25-year Purchase Price Schedule, the HA will take action to timely close out the Agreement. The
Homebuyer shall comply with any reasonable plan proposed by the HA to complete the Homebuyers
acquisition of title. Close-out may involve developing a repayment schedule to be completed in a
reasonable period, but not longer than three (3) years. The HA may reduce the Required Monthly
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Payment in order to accelerate payback of the delinquency. In all cases the Homebuyer must, at a
minimum, pay the costs of insurance. If the Homebuyer fails to meet the requirements of the repayment
plan or schedule, the HA may immediately proceed with termination and eviction.
Article 10.

HA Homeownership Financing

10.1. If the HA offers Homeownership financing, the Homebuyer is eligible for it when the HA
determines that:
10.1.1. The Homebuyer can pay from the balance in the Homebuyers accounts, or from other sources:
10.1.1.1. The amount necessary for settlement costs;
10.1.1.2. The initial payment for fire and extended coverage insurance carried on the Unit after
conveyance; and
10.1.1.3. The amount necessary for the establishment of a maintenance reserve account, at the
discretion of the HA.
10.1.2. The Homebuyer s income has reached the level, and is likely to continue at such level, at which
30 percent of monthly adjusted income is sufficient to cover principal and interest payments on a
promissory note not to exceed 20 years or 9 percent interest, plus the HAs estimates of the following
monthly payments and allowances:
10.1.2.1. Payment for fire and extended coverage insurance;
10.1.2.2. Payment for taxes and special assessments, if any;
10.1.2.3. The HA mortgage servicing charge;
10.1.2.4. The amount necessary for maintenance of the Unit; and
10.1.2.5. The amount necessary for utilities for the Unit.
(Additional information relative to HA financing will be provided to Homebuyer upon request.)
Article 11.
11.1.

Termination of MHOA

Termination Upon Breach

11.1.1. In the event the Homebuyer fails to comply with any of the obligations under this Agreement, the
HA may terminate this Agreement by written notice to the Homebuyer. Termination will be enforced by
eviction pursuant to forcible entry and detainer action in accordance with Alaska Statutes 09.45.060-.160.
Foreclosure and ejectment are inappropriate methods for enforcing termination of this Agreement. This
Agreement constitutes a lease with an option to purchase. The Homebuyer is a Lessee during the term
of this Agreement and acquires no equitable interest in the Unit until such time as the option to purchase
is exercised. The Homebuyer expressly acknowledges that he/she has no equitable interest in the Unit in
the event of a termination due to the Homebuyers default.
11.1.2. Misrepresentation or withholding of material information in applying for admission or in
connection with any subsequent reexamination of income and family composition constitutes a breach of
the Homebuyer s obligations under this Agreement. In lieu of termination, the HA may retroactively
increase the required monthly payments in order to mitigate the effect of the Homebuyers failure to report
income.

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11.1.3. The termination procedures outlined in this Article do not limit the HAs right to repossess the
Unit, without court action or prior notice in cases of apparent abandonment, so long as the HA may take
possession without force or breach of the peace.
11.2.

Notice of Termination of MHOA by HA, Right of Homebuyer to Respond

Termination of this Agreement by the HA for any reason shall be by written notice of termination. Such
notice shall provide not less than 30 days for the Homebuyer to cure the breach, unless the breach is
determined to be incurable by the HA. If the Homebuyer fails to comply with the Notice of Termination or
fails to timely cure the breach, the MHOA shall terminate and the HA shall enforce the termination using
eviction procedures in accordance with Alaska Statutes 09.45.060-.160 (Forcible Entry and Detainer).
Such notice shall be in compliance with the Articles of this Agreement and, in all cases, shall afford a fair
and reasonable opportunity to have the Homebuyer's response heard and considered by the HA. The
Homebuyer shall have the right to request examination of any documents relevant to the termination and
the right to grieve the termination in accordance with the HA's Policies.
11.3.

Termination of MHOA by Homebuyer

The Homebuyer may terminate this Agreement by giving the HA written notice in accordance with this
Agreement. If the Homebuyer vacates the Unit without notice to the HA, the Homebuyer shall remain
subject to the obligations of this Agreement, including the obligation to make monthly payments, until the
HA terminates this Agreement in writing. Notice of the termination shall be communicated by the HA to the
Homebuyer in accordance with Article 13.3 of this Agreement, and the termination shall be effective on the
date stated in the notice.
11.4.

Disposition of Funds Upon Termination of the MHOA

If this Agreement is terminated, the balances in the Homebuyers accounts shall be disposed of as
follows:
11.4.1. The MEPA shall be charged with:
11.4.1.1. Any maintenance and replacement costs incurred by the HA to prepare the Unit for the
next occupant;
11.4.1.2. Any amounts the Homebuyer owes the HA, including Required Monthly Payments;
11.4.1.3. The Required Monthly Payment for the period the Unit is vacant, not to exceed 60 days
from the date of receipt of the notice of termination, or if the Homebuyer vacates the Unit without notice to
the HA, for the period ending with the effective date of termination by the HA; and
11.4.1.4. The costs of securing the vacant Unit, notification and associated termination tasks,
and storage and/or disposal of personal property.
11.4.2. If, after making the charges in accordance with Article 11.4, there is a debit balance in the MEPA,
the HA shall charge that debit balance against any Mutual Help Contribution made in cash. If the debit
balance exceeds the sum of the credit balances in these accounts, the Homebuyer shall be required to
pay to the HA all remaining amounts due.
11.4.3. If, after making the charges in accordance with Articles 11.4.1 and 11.4.2, there is a credit
balance in the MEPA, or a cash credit in the Mutual Help Contribution, this amount shall be refunded to
the Homebuyer. Any land contribution remains the property of the HA for use by a subsequent
Homebuyer. In no event shall the contribution credit for land be applied to the Homebuyers debits or
delinquent charges.

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11.5.

Settlement Upon Termination

11.5.1. Time for Settlement. Settlement with the Homebuyer following a termination shall be made as
promptly as possible after all charges provided in Article 11.4 have been determined and the HA has
given the Homebuyer a statement of such charges. The Homebuyer may obtain settlement before
determination of the actual cost of any maintenance required to put the Unit in satisfactory condition for
the next occupant, if the Homebuyer is willing to accept the HAs estimate of the amount of such cost. In
such cases, the amounts to be charged for maintenance shall be based on the HAs estimate of the cost
thereof.
11.5.2. Disposition of Personal Property. Upon termination, the HA may dispose of any item of personal
property abandoned by the Homebuyer in the Unit, in a reasonable manner deemed suitable by the HA.
Items deemed perishable or of minimal value may be immediately discarded or donated to a nonprofit,
governmental or social services organization. All other items may be sold at an informal sale, or donated
upon 15 days notice sent to the Homebuyers last-known address. Proceeds, if any, after such
disposition, may be applied to the payment of amounts owed by the Homebuyer to the HA.
11.6.

Responsibility of HA to Terminate

11.6.1. The HA will take action with respect to any noncompliance with this Agreement by the
Homebuyer. In cases of noncompliance that are not corrected as provided further in this Article, it is the
responsibility of the HA to terminate this Agreement in accordance with the provisions contained herein,
and to institute eviction proceedings against the Homebuyer.
11.6.2. Promptly after a noncompliance comes to the attention of the HA, if the HA determines the
violation to be curable, the HA shall discuss the matter with the Homebuyer and give the Homebuyer an
opportunity to identify any extenuating circumstances or complaints which may exist. The Homebuyer
shall agree to a plan of action specifying how the Homebuyer will come into compliance, as well as any
actions by the HA that may be appropriate. This plan shall be in writing and signed by both parties.
11.6.3. Compliance with the plan shall be checked by the HA not later than 30 days from the date
thereof. If the Homebuyer refuses to agree to such a plan or fails to comply with the plan, the HA shall
issue a notice of termination of this Agreement and evict the Homebuyer.
11.6.4. A record of meetings with the Homebuyer, written plans of action agreed upon, and all other
related steps taken in accordance with Article 11.6.2 shall be maintained by the HA.
11.6.5. The HA is not obligated to enter into a plan with the Homebuyer to correct a violation of the
Agreement that is so serious that it has been determined an incurable breach.
11.6.6. In the event that the HA reasonably expends legal fees and costs in enforcing the MHOA, and the
Homebuyer fails to cure all defaults prior to legal action, the HA may, at its option, require Homebuyer to
reimburse the HA some or all of its reasonable attorneys' fees and court costs as a condition of
reinstating the Homebuyers rights under this Agreement.
11.7.

Subsequent Use of Unit

Upon termination of this Agreement due to Homebuyers default, the Unit remains part of the Mutual Help
Project. The HA may select a subsequent Homebuyer for the Unit under the Mutual Help Program
pursuant to the HA's Policies.
11.8.

Non-Waiver

Delay or failure of the HA to enforce any term of this Agreement shall not constitute a waiver of the HA's
right to terminate the MHOA for any violation or breach.

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Article 12.
12.1.

Succession Upon Death or Mental Incapacity

Definition of "Event"

"Event" means the death or mental incapacity of all of the persons who have executed this Agreement as
Homebuyer(s). The HA may choose to define additional triggering events and allow "voluntary"
successorship pursuant to the HA's Policies. The Policies in effect on the date of the triggering event
must be complied with.
12.2.

Succession to Spouse or Significant Other

If an Event occurs involving the death or incapacity of all persons who have executed this Agreement,
and there exists a qualified spouse or significant other cohabitating with Homebuyer, the spouse or
significant other shall be deemed the successor and should assume the status of Homebuyer.
Upon a qualifying Event, ___________________, the qualified cohabitating spouse or significant other
who continues to reside in the Unit after the Event, hereby agrees to be bound by all terms and conditions
of this MHOA.
Dated: ___________________
12.3.

By: ______________________________
Cohabitating Spouse or Significant Other

Designation of Successor by Homebuyer

12.3.1. If there exists no spouse or significant other cohabitating with Homebuyer at the time of the
Event, Homebuyer may designate a successor who, at the time of the Event would assume the status of
the Homebuyer. The alternate designation shall be made at the time of execution of this Agreement, and
the Homebuyer may change the designation at any time by providing written notice to the HA. The
designated successor as of the date of execution of this Agreement is:
__________________________________________________
First Name
Middle Initial
Last Name
__________________________________________________
Address
__________________________________________________
City, State, Zip code
__________________________________________________
Relationship to Homebuyer

Upon a qualifying Event, ___________________, the designated successor hereby agrees to be bound
by all terms and conditions of this MHOA.
Dated: ___________________

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By: ______________________________
Designated Successor

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12.4.

Qualified Successor

12.4.1. Upon occurrence of an Event, the spouse or significant other cohabitating with Homebuyer, or
the person designated as the successor in Article 12.3.1 shall succeed to the former Homebuyers rights,
responsibilities and obligations under this Agreement if the successor meets the following conditions:
12.4.1.1. The successor is a family member and will make the Unit his or her primary residence;
12.4.1.2. The successor is willing and able to pay the Administration Charge and to perform the
obligations of a Homebuyer under this Agreement;
12.4.1.3. The successor satisfies the program eligibility requirements; and
12.4.1.4. The successor executes an assumption of the former Homebuyers obligations under
this Agreement.
12.4.2. If a successor satisfies the requirements of Article 12.4.1, except that he/she does not meet
eligibility requirements of the program, the successor may execute an outright purchase of the Unit.
12.5.

Designation of Successor by HA

If at the time of the Event there is no spouse or significant other cohabitating with Homebuyer or no
successor designated by the Homebuyer, or if any of the conditions in Article 12.4.1 are not met by the
designated successor, the HA may designate a successor who qualifies under Article 12.4.1. The HA
may, at its option, consider beneficiaries designated in the Homebuyers written will, if any, but in no
event shall the HA be bound by a Homebuyers will prior to transfer of title following Homebuyers
exercise of the option to purchase.
12.6.

Occupancy by Appointed Guardian

If at the time of the Event there is no qualified successor designated by the Homebuyer or by the HA in
accordance with the foregoing provisions of this Article, and a minor child or children of the Homebuyer
are living in the Unit, the HA may, in order to protect their continued occupancy and opportunity for
acquiring ownership of the Unit, approve as occupant of the Unit an appropriate adult who has been
appointed legal guardian of the children with a duty to perform the obligations of this Agreement in their
interest and on their behalf.
12.7.

Succession and Occupancy on Trust Land

In the case of a Unit on trust land subject to restrictions on alienation under federal law (including federal
trust or restricted land and land subject to trust or restriction under state law), or under state or tribal law
where such laws do not violate federal statutes, a person who is prohibited by law from succeeding to the
HAs interest on such land may, nevertheless, continue to occupy with all the rights, obligations and
benefits of this Agreement, modified to conform to these restrictions on succession to the land.
12.8.

Termination in Absence of Qualified Successor or Occupant

If there is no qualified successor in accordance with the HAs Policies, the HA shall terminate this
Agreement and select a subsequent Homebuyer to occupy the Unit under a new MHOA. If a new
Homebuyer is unavailable or if the Unit cannot continue to be used for low-income housing in accordance
with the Mutual Help program, the HA may otherwise appropriately dispose of the Unit.

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Article 13.
13.1.

Miscellaneous

Annual Statement to Homebuyer

The HA shall provide an annual statement to the Homebuyer that sets forth the balance in the
Homebuyers accounts at the end of each HA fiscal year. The statement shall also set forth the
remaining balance of the purchase price. The Statement shall also set forth the Purchase Price, taken
from the applicable Purchase Price Schedule. The Purchase Price is subject to correction based on
periods of suspended payments.
13.2.

Insurance Before Transfer of Ownership, Repair or Rebuilding

13.2.1. Insurance. The HA shall carry fire and extended coverage insurance for the Unit. The
Homebuyer shall be solely responsible for insuring the contents of the Unit and the familys personal
belongings.
13.2.2. Repair or Rebuilding. In the event the Unit is damaged or destroyed by fire or other casualty, the
HA shall consult with the Homebuyer as to whether the Unit shall be repaired or rebuilt. The HA shall use
the insurance proceeds to have the Unit repaired or rebuilt unless there is good cause for not doing so.
In the event the HA determines that there is good cause not to repair or rebuild the Unit, the Homebuyer
may challenge this decision in accordance with the HAs grievance policy. If the final determination is that
the Unit should not be repaired or rebuilt, the HA shall terminate this Agreement, and the Homebuyer 's
obligation to make Required Monthly Payments shall be deemed to have terminated as of the date of the
damage or destruction. In the event of a partial loss, the MHOA may be modified or terminated at the
option of either party.
13.2.3. Suspension of Payments. In the event of termination of this Agreement because of damage or
destruction of the Unit, or if the Unit must be vacated during the repair period, the HA will make
reasonable efforts to assist in relocating the Homebuyer. If the Unit must be vacated during the repair
period, Required Monthly Payments shall be suspended during the vacancy period.
13.2.4. Nonwaiver. The HAs maintenance of insurance and its application of insurance proceeds to
repair or reconstruct the home shall not constitute a waiver of the HAs right to terminate the Homebuyer
for any breach of this Agreement, including criminal activities, abuse or neglect of the home. If the HA
determines that a member of the Homebuyer family or guests were responsible for the fire, the HA may
terminate the MHOA upon 30 days' notice to the Homebuyer.
13.3.

Notice

13.3.1. To Homebuyer. The Homebuyer shall promptly notify the HA of any change in address.
Homebuyer agrees that notice sent to the last-known address provided by the Homebuyer shall constitute
good and valid notice by the HA. Any notice by the HA to the Homebuyer that is required under this
Agreement or by law shall be in writing, and
13.3.1.1. Delivered to the Homebuyer personally or to any adult resident of the home;
13.3.1.2. Sent by certified mail, return receipt requested, properly addressed, postage prepaid; or
13.3.1.3. Where a Homebuyer has refused to accept or claim certified mail, the notice shall be
deemed sufficient and received, provided that the notice is also sent via regular mail, on or after sending
notice pursuant to Article 13.3.1.2.
13.3.2. To the Housing Authority. Notice to the HA shall be in writing, and either delivered by hand to an
HA employee at the HA office, or sent to the HA by certified mail, return receipt requested, properly
addressed, postage prepaid.

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Article 14.

Late Charges

If the HA has not received the full amount of any Required Monthly Payment by the end of ten (10)
calendar days after the date it is due, the Homebuyer shall pay a late charge established by the HA, not
to exceed $25 per month.

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