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City is bending this program over backwards in efforts to turn it into a "low income" charity housing scheme.
It has been known for months something was coming down the pike regarding credit scores. Where apartments are reserved for a population within a certain community board it can be daunting sometimes to find qualified applicants with decent credit scores. So rather than open up the process to a wider group, the City is now attempting to lower the bar. In other words more of the same...
You cannot get a market rate apartment with a 580 credit score on average. The only mortgage likely to be had is a FHA or other government backed scheme, and even then would require ten to twenty percent down payment. But somehow mayor de Boob and the CC think forcing developers to rent to such persons is a good idea. That is if there is a history of poor financial or fiscal management future behavior is likely not going to change.
Bugsy, in addition to the credit score, a developer can also look at debt-to-income ratio. That's spelled out in the guidelines. I bet that most folks with a 580 are carrying too much debt. So they might be rejected based on that.
New guidelines seem to have also changed the asset limit, or cap. It's made clear, as did the previous guidelines, that retirement accounts don't count in the total asset limit (they're assets but not included in the total asset cap -- an intelligent move that every managing agent I ever dealt with was misinformed about), but the cap, or limit, seems to now be much lower -- I haven't had time to read the full guidelines, but that's what it looks like.
3. Asset Limit for Applicants of Rental Units
a. For a rental affordable unit, the value of the applicant’s household assets
may not exceed the amount of the current HUD income limit for a fourperson
household for the AMI limit applicable to such unit.
b. For example, if the 60% HUD income limit for a four-person household is
$55,000, a household of any size applying for a 60% AMI unit is not
eligible if its total household assets exceed $55,000. If the 80% limit is
$72,000, a household applying for an 80% AMI unit may not have more
than $72,000 in assets.
That is a considerable drop, considering the cap was previously $250,000, but previous and new guidelines excluded retirement accounts in the cap total (they count in the asset total, but are excluded from the cap, which does make sense), otherwise it would inadvertently discriminate against older people.
That is a considerable drop, considering the cap was previously $250,000, but previous and new guidelines excluded retirement accounts in the cap total (they count in the asset total, but are excluded from the cap, which does make sense), otherwise it would inadvertently discriminate against older people.
I haven't read the whole document, but I assume this applies to the 80/20s. It does definitely exclude 401ks and IRAs, and if marketing agents tell you differently, which I can assure you they will, go armed with the printed guidelines. You have HPD on your side here.
Have said this before; a large majority of persons in NYC need low income and or subsided housing. That and or have issues which are simply beyond the normal landlord/tenant relationship to address.
Slowly but surely as what happens to nearly everything else in NYC the mayor and CC are seeking to turn affordable housing scheme into a quasi welfare/low income program.
The natural inclination for any LL is to find the most qualified tenant using various metrics. Given New York's notoriously pro-tenant laws and court system, coupled with the fact these "affordable" units are RS means once in a LL will have to live with that decision for decades.
I haven't read the whole document, but I assume this applies to the 80/20s. It does definitely exclude 401ks and IRAs, and if marketing agents tell you differently, which I can assure you they will, go armed with the printed guidelines. You have HPD on your side here.
b. Balances in specifically designated retirement funds and college savings
accounts are not subject to the asset limit, but are counted toward
overall assets and income from assets.
However, my question has been for a long time how you calculate "income from assets" from retirement accounts. If you're not receiving disbursements from your 401k, are you receiving income from it as it goes up (and down) with the market? 401k's are expected to grow over time, but is that "income"? I would think not, but who knows what these marketing people think.
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