Affordable Housing Program
Q. Why do you put a mortgage and promissory notes on the property?
A. Under the guidelines for the Federal Home Loan Bank Program (FHLB), GROW South Dakota is required to place a deed restriction on the property for five years.
Q. I received a Truth in Lending, what is this for? Do I have to pay this money?
A. A Truth in Lending is required if there is a mortgage placed on your property, even though you do not make payments to the loan. It shows what the estimated overall costs are going to be at final term of the loan. As far as payments - you are obligated to pay based on the terms of the promissory note and mortgage.
Q. What happens to the mortgage and promissory note debt if I need to move into a different living arrangement (e.g. nursing home, assisted living, apartment) or if I pass away?
A. The deed restriction will remain on the property until the property is sold or transferred. At that time, the recapture amount is based on the day the home is no longer your primary residence or the day of the death of the person who received the funding. However, if the person purchasing the home is eligible, they may have the option to assume the forgivable loan, if that option was on the original deed restriction. The recapture amount is based on the number of years / months that have been forgiven as well as the amount of profit that may be obtained by the previous owner.
Q. What happens if the husband or wife pass away or move out and one still remains in the home?
A. If at the time eligibility was determined both were considered living in the home and now only one of the eligible parties remains in the home as their primary residence, there is no recapture required until the remaining person no longer meets the terms of the mortgage and promissory note.
Q. What happens if the household consists of the parent(s) and an adult child and the parent moves or dies?
A. As long as the child is on the deed of the property and has signed the deed restriction, there would be no recapture at the time of death or move.
Q. What if the house is owned by the applicant who resides at the home and other parties that do not reside at that home?
A. All parties that are on the deed to the home will be required to sign the deed restriction. Eligibility will be determined based on the parties that will reside at the home as their primary residence during the time the work is done.
Q. What if the household is owned by the parent and a child or other person(s), but the other parties do not live in the home at the time of eligibility is determined, then the parent moves out or dies and the child / other person moves in?
A. The child / other person will have to meet household income and eligibility guidelines. If they do not meet the guidelines, the property will be subject to the recapture clause.
Q. What if I move out and rent the property out to an income eligible person?
A. If there is a deed restriction, you will be bound by the regulations on that document. Regardless of who you rent the property to, you will be obligated to the recapture clause.
Q. What if I give my house to my kids or another person?
A. If there is a deed restriction, you will be bound by the regulations on that mortgage and promissory note. Any time you transfer the deed and are no longer on the new deed, the expense provided to rehabilitate your home would be subject to recapture, unless the new owner meets eligibility and will reside in the home.
Q. I am responsible for paying all the bills, taxes, insurance, but I do not own the property, can I be considered the home owner?
A. No, your name will need to be included on the deed for the property before you are considered the home owner.
Q. I received weatherization assistance on my home before. I now need work on my windows and doors, can I re-apply?
A. If you have received weatherization under the Department of Energy (DOE) program after September 30, 1994, our agency will not consider your application for weatherization assistance. Any work that may have been addressed under the weatherization program and now is being requested again, is considered maintenance and is the homeowner's responsibility.
Q. Do you consider that I own the home if it is a Contract for Deed?
A. The weatherization program will consider a contract for deed ownership, if all signatures on the contract have been notarized. The Federal Home Loan Bank program does not consider a Contract for Deed as home ownership. Therefore you would not be eligible for this program.
Q. I am married but my spouse is not listed on the deed, will we both have to sign the mortgage?
A. Both husband and wife will need to sign the deed restriction.
Q. What if I am divorced but do not live with my spouse and my spouse will not sign the deed restriction?
A. When the program guidelines require a deed restriction be placed on the property, you will not be considered eligible. If the applicant fails to make good on the promissory note, a judgment can be placed on the person.
Q. I have given Power of Attorney to my child / another person, who will need to sign the mortgage, promissory note or the application?
A. If you are no longer capable of signing for yourself, your POA may sign for you. Our agency will need to have legal documentation showing who has the POA.