Bills Logo

Information on Resale Restriction Agreement

Mark Cappel
UpdatedJun 19, 2024

I am trying to do a reverse mortgage, but I am being tols that there is a resale restriction on my home. What does this mean?

Dear Bill, in year 2000 I bought a house in a redeveloping area, the house is only eight years old. Since my health is not the same, in my later years I have decided to do a reverse mortgage. Now I am being told that there was a resale restriction agreement because I was a first time buyer under a county redvelopment program. Wellsfargo has offered to repay them their money, there is now where it says they can't be repaid. My question is, if they are paid back, doesn't that put them out of the loan, and become solely Wellsfargo's. Then the house can be sold in a different manner? Need your help. The houses around me are going far 3 and 4 hundred thousand dollars my house cost 105000.00 at the time of sale. with a second loan that is paid back living in the house brings the total amount 135000.00. Thanks for taking the time to listen to my problem.

Depending on the state that you reside in, the Resale Restriction Agreement restricts the use and sale of the home for 30 to 55 years. These types of agreements are put in place to make sure that certain properties remain affordable. The effect of the resale restriction is that it precludes you from earning market rate returns on your home. Even in the scenario that you repay the loan, you are still limited to the type of buyers that you may sell or transfer the home to. Please examine your agreement more carefully to see what type of restrictions apply on your home.

Resale restrictions are typical when you buy homes at below market value. Below market rate homes sell at a significant discount from the market-rate sales price. The affordability of the units is made possible by your agreement to certain restrictions specific to the resale price of the unit in the event you decide to sell. The terms of the Resale Restriction Agreement usually include:

- Limits on resale price for stipulated period of time.

- Requirement that the buyer you resell to must be an eligible moderate-income household. This ensures that the next home buyer will benefit as you did.

- The City's Right of First Refusal when you resell.

- Requirement to occupy the unit as your principal residence.

For more information om Mortgages, please visit our Mortgage Information page. I hope the information provided helps you Find. Learn. Save.



The mortgage market: what's new?

No surprise that mortgage rates fluctuate. If you are thinking about purchasing a home or maybe considering refinancing your current mortgage, then you want to be up to date on mortgage rates.

Mortgage rates April 10, 2024
According to Freddie Mac, the 30-year mortgage rate for the week of April 10, 2024 stands at 6.88%. This reflects a 6 basis points increase from the previous week's rate.
Note: A basis point is equal to one-hundredth of one percent (0.01%). In numerical terms, if the mortgage rate changes by 20 basis points, it means the rate has changed by 0.20%.
Additionally, Freddie Mac reports that the 15-year mortgage rate for April 10, 2024 is 6.16%, indicating a 10 basis points increase from last week’s rates.

What does the mortgage rate mean for you?
Mortgage rates are one of the key factors that determine your monthly payment. Here are avergage interest rates (APR) for April 14, 2024 based on Zillow date for borrowers with a high credit score (680-740) in the United States:

  • 30-year conventional loan is 7.09%
  • 15-year conventional loan is 6.29%
    Using the rates mentioned above, the monthly payment for a $279,082 30-year-year mortgage would be $1,874. A 15-year mortgage would require a monthly payment of around $2,399.

Simplify your mortgage journey: Shop around and get pre-approved today!
To make the home-buying or refinancing process a breeze, we highly recommend shopping around for mortgages and getting pre-approved. So, why not Check Out mortgage rates now for the best options available.



BBill, Aug, 2009
Unfortunately, there does not seem to be any model purchase agreements for affordable housing online. Therefore, it is difficult for me to comment on a specific type of agreement I have not seen. Readers, any ideas?
EEbony Cortez, Aug, 2009
Dear Bill,I am in the process of purchasing a home under an Affordable Housing Plan. I am aware that there will be resale ristrictions and such but my question or concern is...Wouldn't this be the same thing as leassing if I had to sell early? i.e. increase in family size or job relocation. Does this mean that if I do sell before the 45yr I will pretty much be out all the money I have paid towards the home because I would have to sell at the median income price. Example if the median income went up (or down) wouldn't I be entitled to the profit difference at least. I know that stat that I cannot make a substancial profit but what is substancial.