HOME Program

How to Apply

  1. Prior to participating in the NRHA HOME Program, participate in one of the following current NRHA HOME Program Approved and HUD Approved Housing Counseling Agencies for attendance and completion of a VHDA Homeownership Education Program 6 hour class and a minimum 2 hours of homebuyer individual counseling.

NRHA HOME Program Approved and HUD Approved Housing Counseling Agencies

Housing Counseling Agency

Address

Contact Information

HomeNet

Homeownership Center

555 E. Main Street

Norfolk, VA  23510-1820

Phone: 757-314-4202

Fax: 757-314-1305

Submit a Question via Email at www.nrha.us/homenet

Website: www.nrha.us/homenet

Urban League

of Hampton Roads

5700 Thurston Avenue

Suite 200

Virginia Beach. VA  23455

Phone: 757-673-0851

Toll-free: 877-431-5576

Fax: 757-966-9613

E-mail: yvyoung@ulhr.org

Website: www.ulhr.org

The STOP Organization

2551 Almeda Avenue

Norfolk, VA  23513-2443

Phone: 757-858-1360

Fax: 757-858-1389

E-mail: lawrence@stopinc.org

Website: www.stopinc.org

The Up Center

of Norfolk

222 W 19th Street

Norfolk, VA  23517-2218

Phone: 757-965-8639

Fax: 757-640-8402

E-mail: john.allen@theupcenter.org

Website: www.theupcenter.org

 

Once the NRHA HOME Program Approved and HUD Approved Housing Counseling Agency determines a household is prepared to purchase (which includes completion of required VHDA Homeownership Education Program 6 hour class, minimum 2 hours of homebuyer individual counseling, satisfactory credit, lender pre-approval, and required savings), the NRHA HOME Program Approved and HUD Approved Housing Counseling Agency is required to submit to the NRHA HOME Program a “Request for Eligibility Determination” and the following 5 documents:

  1. Lender Pre-approval Letter;
  2. Currently dated Verification of at least $3,000 in Savings (bank statement, receipt, etc) or at least $500 in Savings + 295 sweat equity hours if pre-approved to purchase through Habitat for Humanity;
  3. Credit Certification signed by a Housing Counselor with an NRHA HOME Program Approved and HUD Approved Housing Counseling Agency;
  4. VHDA Homeownership Educational Program Certificate; and
  5. Copy of Credit Report.

Once the HOME Program receives all the required documentation, a HOME Program Application will be mailed to the client. Upon receipt of the completed and signed application, the client will be contacted by phone and an interview appointment will be scheduled. The client will be requested to bring required original documents pertaining to household composition, income and assets to the interview.

The HOME Program will obtain 3rd party verification of all household income and assets according to HUD guidelines. Once the 3rd party verification process is complete, the HOME Program will project the gross household annual income within the next 12 months based on the annual income and asset inclusions and exclusions defined in 24 CFR 5.609 of the federal code. If it is determined that the gross annual household income is within 80 percent of the HUD Area Median Income Limit for the household size, a Certificate of Eligibility and Mortgage Affordability Worksheet will be mailed to the client. NOTE: A Certificate of Eligibility does not guarantee the availability of HOME funds – HOME funds are committed on a first-come first-served basis at the time the household submits a ratified contract that meets HOME guidelines. If it is determined that the gross annual household income is over 80 percent of the HUD Area Median Income Limit for the household size, an Ineligibility Letter will be mailed to the client.

 

HOUSING SEARCH

Once the client receives a Certificate of Eligibility and the client and agent (if applicable) meets with a HOME Program staff member regarding HOME Program purchase agreement (contract) requirements, a housing search may begin. The client will select the neighborhood in which to reside and select an affordable existing home or new construction home to purchase within the City of Norfolk. The client will submit an offer to the seller listing NRHA’s loan for downpayment and closing cost assistance as secondary financing and specify that the offer is contingent upon the property meeting NRHA HOME Program Property Standards Requirements for loan approval of secondary financing.

 

RATIFIED CONTRACT

The HOME Program will not accept ratified contracts that specify properties are being sold “AS-IS”, “Where-IS”, “No Repairs by Seller” and/or “No Contingencies”. The Seller must agree to the cost of a minimum cap of the lesser amount of 1% of the Sales Price or $1,000 for Lender required inspections, repairs and/or treatments.

The amount of down payment assistance should be itemized on the contract as other financing terms:  NRHA HOME Loan (secondary financing).

The settlement date on the contract must be at least 30 days from the date of contract ratification.

If Buyer/Borrower is purchasing an existing home, the following must be written in the contract under “Other Contingencies”:

  • “Sale is Contingent upon the property meeting NRHA HOME Program Property Standards for loan approval of secondary financing. The estimated delivery deadline date for the NRHA HOME Program Property Standards Inspection is 15 days from the date of contract ratification, at which time NRHA will submit an itemized list of required repairs to the Seller/Listing Agent and the Buyer/Selling Agent. The NRHA HOME Program Property Standards Inspection is not a Buyer’s Property/Home Inspection.

If Buyer/Borrower is purchasing a new construction home in which a Certificate of Occupancy has already been issued prior to the date of contract ratification, the following must be written in the contract under “Other Contingencies”:

  • “Sale is Contingent upon the property meeting NRHA HOME Program Property Standards for loan approval of secondary financing. The estimated delivery deadline date for the NRHA HOME Program Property Standards Inspection is 15 days from the date of contract ratification, at which time NRHA will submit an itemized list of required repairs to the Seller/Listing Agent and the Buyer/Selling Agent. The NRHA HOME Program Property Standards Inspection is not a Buyer’s Property/Home Inspection.
  • Seller agrees to provide the NRHA HOME Program with the following required documents: 
    • Certificate of Occupancy
    • Subterranean Termite Soil Treatment Builder’s Guarantee (Form HUD-NPCA-99-A)
    • New Construction Subterranean Termite Soil Treatment Record (Form HUD-NPCA-99-B)

If Buyer/Borrower is purchasing a new construction home in which a Certificate of Occupancy has not yet been issued prior to the date of contract ratification, the following must be written in the contract under “Other Contingencies”:

  • Seller agrees to provide the NRHA HOME Program with the following required documents:
    • Certificate of Occupancy
    • Subterranean Termite Soil Treatment Builder’s Guarantee (Form HUD-NPCA-99-A)
    • New Construction Subterranean Termite Soil Treatment Record (Form HUD-NPCA-99-B)

If Buyer/Borrower desires the purchase of the property to be contingent upon a Buyer’s Property/Home Inspection, at Buyer’s own cost, to determine the condition of the Property (which NRHA highly suggests), the delivery deadline date for the Buyer’s Property/Home Inspection should also be within 15 days from the date of contract ratification so that the seller will have knowledge of all requested and required repairs simultaneously (this is a suggestion and not a requirement).

Once the seller accepts the homebuyer’s offer and both the seller and buyer agree to all terms of the purchase agreement and all parties have signed the purchase agreement, this is what is referred to as a “ratified contract”. Once the contract is ratified, the following documents must be immediately (same or next NRHA HOME Program business day) submitted to a HOME Program staff member at NRHA.

  • A legible copy of the ratified contract completely signed by all parties;
  • Copy of Earnest Money Deposit Check;
  • Copy of "Items to Convey Addendum", if items to convey are not specified in the contract;
  • Property Inspection Contingency Addendum (if applicable) completely signed by all parties;
  • Disclosure of information on Lead-Based Paint and/or Lead-Based Paint Hazards initialed and completely signed and dated by all parties (only applicable if the property was built prior to 1978)
  • A legible copy of the REIN Listing (if applicable).

 

MINIMUM HOMEBUYER CONTRIBUTION

The required minimum homebuyer contribution towards the purchase of the home is the greater of 1% of the sales price of the home or the homebuyer’s assets exceeding $20,000.referred to as excess assets. The minimum homebuyer contribution includes any cost incurred prior to closing such as: earnest money deposit, lender application fee, lender credit report fee, appraisal fee, etc. In addition to the required minimum homebuyer contribution, the homebuyer must be prepared to cover whatever balance of closing cost remains after the minimum homebuyer contribution and the up to $5,000 closing cost assistance from the NRHA HOME Program has been applied.

 

GIFT FUNDS

A Homebuyer may receive “gift funds” as part of their home purchase transaction; however the following restrictions apply:

  1. The “gift funds” are limited to $10,000;
  2. The “gift funds” can only be from an immediate relative (Immediate relative defined as current spouse, parent, sibling, child, grandparent and/or grandchild not counted as a member of the Borrower’s household when determining household size and income);
  3. The immediate relative must submit to the NRHA HOME Program a signed notarized statement which specifically states that the “gift funds” being provided is not a loan and does not require any repayment from the HOME-assisted homebuyer;
  4. Proof of the “gift funds” being transferred from the immediate relative (donor of gift funds) to the Borrower (recipient of gift funds) must be submitted to the NRHA HOME Program.
  5. A gift donor may not be an immediate relative with an interest in the sale of the property, such as the seller, the real estate agent, broker or builder. Gifts from an immediate relative with an interest in the sale of the property must be subtracted from the sales price.

 

HOME WARRANTY

The NRHA HOME Program will order and purchase a one year comprehensive warranty for the homebuyer; unless a one year warranty is being provided to the homebuyer by the seller.

 

LOAN FOR BORROWED DOWNPAYMENT AND CLOSING COST ASSISTANCE

The downpayment and closing cost assistance provided to the homebuyer by the NRHA HOME Program is a loan (not a grant). On the Settlement Date of the home purchase, otherwise known as “the closing”, the homebuyer signs a Promissory Note and Deed of Trust agreeing to abide by the principal residence requirement, affordability period, forgiveness term, recapture restrictions, and refinance restrictions of borrowed funds. The NRHA Promissory Note is a forgivable, no interest and no monthly payment “soft second” loan. The homebuyer’s first mortgage loan is recorded as a first lien on the property and the NRHA Deed of Trust is recorded at the City of Norfolk Circuit Court Clerk ’s Office as a second lien on the property.

 

Additional Information

NRHA HOME Program Approved and HUD Approved Housing Counseling Agencies

Borrowers that are in need of credit score improvement (credit score less than 600) and/or credit repair (bankruptcies that have not been discharged and/or judgments/collections that have not been satisfied) should contact one of the following HUD-Approved Housing Counseling Agencies:

NRHA HOME Program Approved and HUD Approved Housing Counseling Agencies

Housing Counseling Agency

Address

Contact Information

HomeNet

Homeownership Center

555 E. Main Street

Norfolk, VA  23510

Phone: 757-314-4202

Fax: 757-314-1305

Submit a Question via Email at www.nrha.us/homenet

Website: www.nrha.us/homenet

Urban League

of Hampton Roads

5700 Thurston Avenue

Suite 200

Virginia Beach. VA  23455

Phone: 757-673-0851

Toll-free: 877-431-5576

Fax: 757-966-9613

E-mail: yvyoung@ulhr.org

Website: www.ulhr.org

The STOP Organization

2551 Almeda Avenue

Norfolk, VA  23513

Phone: 757-858-1360

Fax: 757-858-1389

E-mail: lawrence@stopinc.org

Website: www.stopinc.org

The Up Center

of Norfolk

222 W 19th Street

Norfolk, VA  23517-2218

Phone: 757-965-8639

Fax: 757-640-8402

E-mail: john.allen@theupcenter.org

Website: www.theupcenter.org

 

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VHDA Approved Lenders

Homebuyer’s assisted with HOME funds must apply for a 1st mortgage loan with either a VHDA-approved Lender or Habitat for Humanity.

A list of all VHDA-Approved Lenders can be found on VHDA’s website at www.vhda.com.

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Certificate of Eligibility

The Certificate of Eligibility provides a six month period in which a contract on a new construction home must be ratified or a closing on an existing home must occur - if not, eligibility expires and the “borrower” must reapply for NRHA HOME funds.

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Mortgage Affordability Worksheet

30.99% Front End Ratio & 55% Back End Ratio. Affordability and loan approval is determined by the following factors: (1) Gross annual income of household members who are Borrowers on the 1st mortgage loan; (2) the actual interest rate of the 1st mortgage loan; (3) the type of first mortgage loan (FHA Insured, VA, Conventional Uninsured, Conventional Insured or Habitat for Humanity); and (4) total monthly debt (PITI + all other recurring debt excluding utilities). The actual Principal, Interest, Taxes & Insurance(s), otherwise known as the front-end ratio, cannot exceed 30.99% or be less than 20% of the Gross Monthly Income (determined by the NRHA HOME Program) for the household members who are Borrowers on the 1st Mortgage Loan and the total debt, otherwise known as the back-end ratio, cannot exceed 55% of the Gross Monthly Income (determined by the NRHA HOME Program) for the household members who are Borrowers on the 1st Mortgage Loan. 

 

The basic factors used in the NRHA Mortgage Affordability Worksheet formula are as follows:

  • The gross annual household income (determined by the NRHA HOME Program) of household members who are Borrowers on the 1st Mortgage Loan. NOTE: To be eligible for HOME assistance the gross annual household income cannot exceed the 80% AMI limits established by HUD for Norfolk – as verified and determined using the “Part 5” annual income definition.
  • The Interest Rate, which cannot exceed 1% above the VHDA fixed rate, reserved/locked by a VHDA-approved Lender for the homebuyer’s 30-year, fixed rate 1st mortgage loan (the NRHA HOME Program receives confirmation of the interest rate from the VHDA-approved Lender). The Interest Rate is 0% for a loan through Habitat for Humanity.
  • The type of first mortgage loan (FHA Insured, VA, Conventional Uninsured, Conventional Insured or Habitat for Humanity).
  • The total monthly debt (PITI + all other recurring debt excluding utilities) of the household members who are Borrowers on the 1st Mortgage Loan. Other recurring debt includes, but is not limited to: Auto Loan Payments, Installment Loan Payments, Student Loan Payments, Credit Card/Revolving Debt Payments, Medical/Dental Insurance Payments, Life Insurance Payments, Auto Insurance Payments, Child Support Payments, Alimony Payments, Court Ordered Separation Maintenance Payments, Child Care Expenses, Homeowner Association Fees, Medical Debt Payments, and etc.
  • The current Norfolk Property Tax Rate.
  • The cost of Hazard Insurance (and required Flood Insurance, if applicable).
  • The cost of any applicable monthly FHA Loan MIP or Conventional Loan PMI payment.
  • The cost of any applicable upfront FHA Loan MIP or VA Loan Funding Fee.
  • The formula determines 20% of the gross monthly income for the household members who are Borrowers on the 1st Mortgage Loan – the monthly PITI payment cannot be less than this amount (refer to Subsidy Layering Guideline).
  • The formula determines 30.99% of the gross monthly income for the household members who are Borrowers on the 1st Mortgage Loan – the monthly PITI payment cannot exceed this amount.
  • The formula determines 55% of the gross monthly income for the household members who are Borrowers on the 1st Mortgage Loan – the total monthly debt (PITI + all other recurring debt excluding utilities) for the household members who are Borrowers on the 1st Mortgage Loan cannot exceed this amount.
  • The formula determines a Maximum Allowable 1st Mortgage Loan, an NRHA Suggested Home Purchase Price and a Maximum Allowable HOME Subsidy.
  • The maximum allowable HOME Subsidy is up to $40,000 for Purchase Agreements/Contracts signed and ratified on or after July 1, 2015.
  • Up to $5,000 of the maximum allowable HOME Subsidy can be applied towards closing costs and the remaining balance towards down payment.
  • The homebuyer’s required minimum out-of-pocket contribution towards the purchase of a home is the greater of (1) 1% of the Home Sales Price; or (2) the homebuyer’s household assets in excess of $20,000. The HOME Subsidy will be reduced by the amount of any household assets in excess of $20,000.

 

Subsidy Layering Guideline

The actual Principal, Interest, Taxes & Insurance(s), otherwise known as the front-end ratio, cannot be less than 20% of the Gross Monthly Income (determined by the NRHA HOME Program) for the household members who are Borrowers on the 1st Mortgage Loan. This requirement is to ensure that the HOME-assisted Borrower(s) is/are not receiving more HOME funding, either alone or in combination with other governmental assistance and/or downpayment assistance programs, than necessary to provide affordable housing. 

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Ineligibility Letter

The Ineligibility Letter specifies the reason(s) ineligibility has been determined and provides the denied applicant the right to appeal the decision. The appeal will be fairly considered and the NRHA HOME Program will provide a formal reply.

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Existing Home

The Existing Home must be within the “borrower’s” affordability and must meet NRHA HOME Program Property Standards Requirements. The Maximum Allowable Purchase Price for an Existing Home effective $195,000 effective 05/02/2016.

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New Construction Home

The New Construction Homes that participating program applicants select for purchase may be located in any neighborhood in the City of Norfolk and the Sales Price must be affordable to the homebuyer.

The Maximum Allowable Purchase Price for a New Construction Home is $228,000 effective 05/02/2016.

The neighborhoods in which NRHA has been able to provide affordable new construction housing are as follows:

  • Ballentine Place
  • Berkley 
  • Broad Creek
  • Central Brambleton
  • Huntersville
  • Lamberts Point
  • Park Place 

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HOME Program Property Standards Requirements

As specified in 24 CFR Part 92.251(a)(2) and 24 CFR Part 92.612(b), housing acquired with HOME or ADDI funds must meet all applicable State and local housing quality standards and code requirements. As specified in City of Norfolk Code of Ordinances Sec. 11.1-1 Adoption, the Virginia Uniform Statewide Building Code, including the property maintenance provisions, as promulgated by the Virginia State Board of Housing and Community Development, as amended, along with its associated referenced standards have been adopted by the City of Norfolk as a comprehensive body of law which is cited as the Uniform Statewide Building Code, USBC, or the Building Code of the City of Norfolk.
 
New Construction Home Purchases: The Virginia Construction Code (Part I of the Virginia Uniform Statewide Building Code) is applicable to New Construction Home Purchases. All New Construction Homes are inspected by the City of Norfolk to ensure that the properties meet Property Standards specified in the Virginia Construction Code. A Certificate of Occupancy must be issued by the City of Norfolk prior to a New Construction Home being acquired with HOME or ADDI funds.

New Construction Homes must meet the Property Standards Requirements of the Norfolk First-time Homebuyer Assistance HOME Program and pass an inspection conducted by the City of Norfolk as evidenced by a Certificate of Use and Occupancy.

Construction Progress Inspections performed by a qualified NRHA staff member are required for CHDO or NRHA Guild Builder developed new construction homes. Provided that the NRHA Land Sales Contract with the CHDO or NRHA Guild Builder has “low-to-moderate income designation” language, the Construction Progress Inspections Fee for the purchasing homebuyer receiving direct homeownership assistance will be paid for with HOME funds as an eligible “project-related soft cost”.

Existing Home Purchases:  The Virginia Maintenance Code (Part III of the Virginia Uniform Statewide Building Code) is applicable to Existing Home Purchases. The Virginia Maintenance Code adopts Chapters 2 – 8 of the International Property Maintenance Code (IPMC), including text changes of these chapters identified in Chapter 1 of the Virginia Maintenance Code, to be an enforceable part of the Virginia Maintenance Code. The Property Standards Inspection for an Existing Home Purchase are to be performed by qualified NRHA staff or contracted out to a qualified third party. Existing Home properties must meet Property Standards specified in the Virginia Maintenance Code prior to an Existing Home being acquired with HOME or ADDI funds. Additional NRHA required Property Standards are applicable to Existing Home Purchases.

Existing Homes must meet the Property Standards Requirements of the Norfolk First-time Homebuyer Assistance HOME Program and pass Property Standards Inspection performed by qualified NRHA staff and/or contracted out to a qualified third party.

The buyer, selling agent and listing agent (or seller if no listing agent is involved in the purchase transaction) are provided with a HOME Program Property Standards Compliance Addendum which itemizes any property deficiencies (referred to as NRHA Required Repairs) that do not meet program Property Standards Requirements and that must be corrected. The buyer will then request the Seller to correct the NRHA Required Repairs. If the Seller will not agree to do the NRHA Required Repairs and the homebuyer does not wish to purchase the property without down payment and closing cost assistance, the contract is terminated. If the Seller agrees to do the NRHA Required Repairs, all applicable parties to the contract will sign the HOME Program Property Standards Compliance Addendum. Once all NRHA Required Repairs have been completed, NRHA will order a re-inspection to confirm that the property meets program Property Standards Requirements as evidence by a Certificate of Compliance after collecting all applicable repair invoices, business licenses, tradesman licenses, written evaluations, termite/moisture report, etc.

The HOME Program covers the cost of the initial Property Standards Inspection and any and all Property Standards Re-inspections utilizing HOME funds as an eligible “project soft cost” if HOME funds are invested in the purchase of the property, or “administrative cost” if HOME funds are not invested in the purchase of the property.

**The Required NRHA Property Standards Inspection Is Not a Home Inspection**

NRHA assists individuals and families become homeowners by providing loans, with HOME or ADDI funds, for down payment and closing cost assistance to eligible first-time homebuyers.


NRHA does not guarantee the value or condition of your future home, and NRHA does not perform home inspections. If you find problems with your new home after closing, NRHA cannot give or lend you money for repairs, nor can NRHA buy the home back from you.


The Department of Housing and Urban Development (HUD) requires that the home you have selected to purchase with HOME and/or ADDI Down Payment and Closing Costs Assistance Funds be in compliance with applicable program property standards. It is for this purpose that NRHA performs a Property Standard Inspection. The NRHA Property Standard Inspection is not a home inspection. The NRHA Property Standards Inspection will identify readily visible problems with the property that are in non-compliance with NRHA HOME Homebuyer Program Property Standards which must be corrected prior to loan approval for down payment and closing cost assistance. These problems may or may not be the same as those items noted in the home inspection report.

When you make a written offer on a home, the contract must state that the offer is contingent on an NRHA Property Standards Inspection and that the home must meet NRHA HOME Program Property Standards Requirements for loan approval of NRHA secondary financing.

 

**For Your Protection Get a Home Inspection**

Buying a home is one of the most important purchases you will make in your lifetime, so you should be sure that the home you want to buy is in good condition. A home inspection is an evaluation of a home’s condition by a trained expert. During a home inspection, a qualified inspector takes an in-dept and impartial look at the property you plan to buy. The inspector will:

Evaluate the physical condition: the structure, construction and mechanical systems.
Identify items that should be repaired or replaced.
Estimate the remaining useful life of the major systems (such as electrical, plumbing, heating, air conditioning), equipment, structure and finishes. 

It is important that you, the buyer, get an independent home inspection. When you make a written offer on a home, you should insist that the contract state that the offer is contingent (dependent) on a home inspection. As the buyer, it is your responsibility to carefully select a qualified home inspector. Ask the qualified home inspector you select to thoroughly examine the physical condition of your future home and give you the information you need to make a wise decision. You will have to pay for the inspection yourself, but it could keep you from buying a house that will cost you far more in repairs down the road. After the inspection is complete, you will receive a written report of the findings from the home inspector. Be sure you are satisfied with the results of the inspection and the condition of the home you are interested in purchasing.
.

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Excess Assets

Homebuyers with assets that exceed $20,000 must liquidate the excess asset amount and apply that amount towards the purchase of the home. The HOME Subsidy will be reduced by the amount of any household assets in excess of $20,000.

NOTE: The following types of assets are excluded from this rule:

  1. Funds in a Federally-designated Retirement Account (IRA’s, 401K’s, etc.)
  2. Funds in a State Approved College Savings Account
  3. Funds in a Burial Expense Plan

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Principal Residence Requirement

The “property” purchased with borrowed downpayment and closing cost assistance must be the principal residence of the “borrower” during the affordability period. The “borrower” is not allowed to temporarily sublease the “property” (exceptions, with restrictions, can be made for military families with prior written approval from NRHA).

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Affordability Period

The “property” occupied by the “borrower” as a principal residence must remain affordable for a specific period of time, depending on the amount of “HOME” funds invested. The affordability period for the “borrower” assisted with “HOME” funds is as follows:

  1. HOME Loan less than $15,000 has a 5-Year Term
  2. HOME Loan between $15,000 and $40,000 has a 10-Year Term
  3. HOME Loan greater than $40,000 has a 15-Year Term

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Forgiveness Term

The date of forgiveness shall begin on the date of closing (Settlement Date). The borrowed “HOME” funds will be forgiven each annual anniversary date as follows:

  1. On a 5-Year Term Note for a HOME Loan less than $15,000 - 20% of the original amount of the NRHA HOME Note is forgiven each anniversary year.
  2. On a 10-Year Term Note for a HOME Loan between $15,000 and $40,000 - 10% of the original amount of the NRHA HOME Note is forgiven each anniversary year.
  3. On a 15-Year Term Note for a HOME Loan greater than $40,000 - 6.67% of the original amount of the NRHA HOME Note is forgiven each anniversary year.

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Recapture Restrictions

Recapture Restrictions apply if the “property” is either sold or rented during the affordability (term) of the NRHA HOME Note - the unforgiven amount of the principle balance of the NRHA HOME Note must be repaid to NRHA, unless

  1. The property is sold to an income eligible buyer approved for HOME funds that can assume all or part of the unforgiven balance, or
  2. The Net Proceeds from the sale of the “property” at its fair market value are insufficient to the pay the unforgiven balance of the NRHA HOME Note in full, in this situation NRHA will forgive repayment of the amount of the unforgiven balance in excess of the Net Proceeds.

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Refinance Restrictions

During the affordability period (term) of the NRHA HOME Note, the “borrower” is not permitted to refinance the “property” without specific written permission from NRHA. NRHA will allow the subordination of its lien interest only for the sole purpose of the “borrower” obtaining an interest rate reduction on a new 30 year fixed rate standard Conventional, FHA or VHA first mortgage loan with a principal balance that does not exceed the balance owed on the existing first mortgage loan. The “borrower” must make payable to NRHA the unforgiven amount of the principal balance of the NRHA HOME Note at the time of refinancing if cash or equity is removed from the “property” proceeds.

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