The Rare Affordable Unit Resale

• March 4, 2013
• 9 Comments

by Shilpi Paul

1414 Belmont Street NW

A modern two-bedroom condo just above the U Street Corridor is being sold well below-market rate. But not everyone is eligible to make an offer.

When the Solea was constructed at 1414 Belmont Street NW in the late ’00s, the developers agreed to set aside a portion of condos as affordable dwelling units, limited to those making no more than a certain income level. HUD and the DC Housing and Community Development Office negotiated with developers, offering incentives in exchange for the assurance that they would do their part to maintain affordable housing in the quickly growing area.

Living Room

This two-bedroom is one of those units. Priced perhaps $100,000 less than what a comparable unit in the neighborhood would go for, this condo has big windows, newish features and appliances, and access to a rooftop terrace. It is perhaps on the small side, at 809 square feet, but feels bright and well-maintained.

So, who is eligible? Singletons making no more than $60,088 a year, two-person households making no more than $68,672 and three-person households with a joint income no more than $77,256. Given the income restrictions, the unit doesn’t quite come across as the deal that the asking price implies, but with 20 percent down, the monthly payments would be less than that of renting a one-bedroom in the neighborhood. More photos and details below.

Kitchen

Rooftop terrace

• Address: 1414 Belmont Street NW, #213 (map)
• Price: $297,500
• Bedrooms: Two
• Bathrooms: Two
• Price Per Square Foot: $368
• Listing Agent: Adam Vogt, Redfin

Here are some monthly payment calculations based on a 20 percent down payment and a 30-year fixed rate mortgage at 3.5 percent.

• Loan Amount: $238,000
• Principal and Interest: $1,069
• HOA fees: $208
• Total Monthly Payment: $1,277

This article originally published at http://dc.urbanturf.com/articles/blog/the_rare_affordable_unit_resale/6735

9 Comments

1. Jane said at 6:32 pm on Monday March 4, 2013:
   This article says that the unit is priced 100k below market. However, I haven't seen a 2-bd room in a new condo for less than 499k, making it more like 200k below. Too bad about the income restriction...

1. justin s said at 10:52 pm on Monday March 4, 2013:
   Wow... 300k and an income restriction of <60k?! That basically means someone who's "working class" but has rich parents to foot a down payment as large as a year's salary. End result: "Low Income" housing for someone with rich parents or an inheritance, etc., to provide a down payment. No one making <60k in DC is likely going to be able to come up with a down payment large enough to make them eligible for the loan on their own. This will probably be another unfortunate example of good intentions leading to keeping wealth with the wealthy, rather than helping someone who is struggling on their own. (or maybe it'll go to some "struggling" lawyer that once earned a large salary but now works in a modest nonprofit? again, not exactly going to the most eligible of people).

1. jag said at 11:31 pm on Monday March 4, 2013:
   So do income restrictions remain until the end of time? Or does whoever the owner of the unit after some predetermined time-frame (10 years? 30 years?) luck out?

1. Zcf said at 3:51 pm on Tuesday March 5, 2013:
   Agreed. Even with FHA, one would need $20K for down payment and closing costs. I can't imagine too many people in DC making $60K would save that on their own. More realistically, you would likely need 10% down for a building like this. Or around $40K with closing costs. Frankly, the concept of affordable housing seems stupid. A person making $80K isn't any less deserving of this home than a person making $60K.. Let alone a person making $62K.

1. BayviewMortgageInc said at 5:49 pm on Tuesday March 5, 2013:
   Far below market means. As soon as you buy it. the value will drop to 165,000. That area for some reason is very hard to refinance. None of those condos and the condos around this building don't appraise. As soon as the building is 2/3rd sold. the developer will do what they all do. start dropping the prices to move the rest of the condos. thus, nothing appraises when you want to refinance.

1. Caleb said at 6:22 pm on Tuesday March 5, 2013:
   @jag, as far as I know, the income restriction is for the lifetime of the unit. I disagree that these are not great opportunities for a person who is trying to break into the housing market. With good discipline in savings over several years, one could be eligible to provide a downpayment of 5-10% through an FHA loan. It allows the purchaser to also bank equity over the years in the home and then sell, take the equity and possibly a greater income level to purchase a different home that would possibly appreciate in value.

1. Oli said at 3:10 am on Wednesday March 6, 2013:
   justin s nailed it... he's described exactly how this program works in the real world.

1. Do your research said at 1:49 am on Tuesday March 12, 2013:
   Check out the resale process these folks don't get any real equity perks unless they stay for 20 years or so..... An affordable dwelling is nothing more than paying rent on an apartment with the potential of financial very serious problems in the event the condo ups the fees.

1. Not always a cynic said at 11:38 pm on Monday May 13, 2013:
   The sale restrictions are currently for a period of about 20 years. There are some other advantages to home ownership like tax and some equity which does work well if and when a person wants to purchase a home later on. The 20 year is a bit of a waste for condo properties that are 1 and 2 bedroom because most people are going to outgrow them quickly. Still there are some advantages over renting. Also, there are other programs to aid in the affordability of the downpayment, etc. The bottom line...many of those who are on here looking and complaining are the opposite of who these homes are intended for. A lot of the folks that get these homes are still making less than the max income and they are native to this area. They've been displaced by all the fancy lux condos and transplants with high-powered careers and salaries. It's hard to belly ache about those making 60K that will likely be making double, triple, or quadruple their salaries in the 1-5 and 5-10 year future. There there are those who may top at that minimum by 10 years and not much more when you factor in CPI. I always ask...what are these people who pay $4K a month for one of these new condos making per year? Most of us can't afford it - rent or otherwise!