NPDc4 Option 2 : how to determine price of for-sale units

William Gagnon

Sustainable Development Coordinator

Provencher Roy Associés Architectes Inc.

LEEDuser Basic Member

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Project location :

Canada

February 14, 2017

Hey-ya, We are having a hard time finding out how to calculate Option 2 : Affordable Housing, for-sale units. We read from the LEED ND v4 reference guide : ''Determine the maximum amount of income available to pay principal, taxes and insurance (PITI) according to Equation 5. A factor of 28% is applied to adjusted target income as the recommended maximum percentage of income that households hould spend on homeownership.'' What about interests on mortgages? There are no guidelines, nor are they mentioned anywhere. I don't know where to start; should we get in touch with banks and see what kind of mortgages we could obtain? What if the mortgage is based on 75 years? : of course we are going to obtain the credit! Thanks for your help. William

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Eliot Allen

LEED AP-ND, Principal

Criterion Planners

LEEDuser Expert

231 thumbs up

Wed, 02/15/2017 - 17:23

William, if for example the AMI is $60,000, the adjusted target income for a two-bedroom dwelling is $54,000, and Equation 5 then gives a maximum monthly PITI (principal, interest, taxes, insurance) of $1,260. The developer is therefore committing to sell x percent of the project's for-sale units at or below $1,260/month using any combination of equity, mortgage terms, and/or subsidies the developer can pre-arrange to offer buyers. The developer would normally work with its financiers and housing agencies to analyze and arrive at such a pricing arrangement. Does this help? Eliot

William Gagnon

Sustainable Development Coordinator

Provencher Roy Associés Architectes Inc.

LEEDuser Basic Member

0 thumbs up

Mon, 02/27/2017 - 21:57

It does! Thank you. Then I just need to get a confirmation from the promoter of the selling price and monthly instalments and add that to my documentation. Thank you!