For Owners of City Assisted Affordable Homeownership Units

Auburn Court

There are more than 500 affordable homeownership units in Cambridge. These units were created through various programs, including non-profit housing development, inclusionary zoning, and the Financial Assistance Program. All of these units have affordability restrictions. While most restrictions have similar terms, some may have different requirements. The information below may not apply to units sold prior to 1990. For specific questions about your unit, please consult your individual affordability restriction, or please contact Antonia Finley, Homebuyer Coordinator, at 617/349-4643 or afinley@cambridgema.gov. 

Homeownership Program Review Process

The Housing Division is currently undertaking a review of the City's affordable homeownership programs, with a focus on how units increase in value and inheritance policies. You can find more information about this process here. 

Selling Your Unit

The City holds a Right of First Refusal on most affordable units. This gives the City the option to repurchase the unit, either by locating an eligible buyer or by designating a non-profit to purchase the unit. Below is an outline of the sales process:

  1. Inform the City of your intent to sell. This notice must be in writing and signed by all owners listed on the Deed.
  2. Provide the City with a full loan payment history for all mortgages on the property. Your bank can provide this upon request.
  3. Provide the City with copies of all receipts for review for if you are requesting reimbursement for capital improvements. Please see guidelines for capital improvement reimbursement .
  4. The City will schedule a brief inspection of the unit to assess the condition and review any capital improvements for potential reimbursement.
  5. The resale price is calculated in accordance with the formula in your affordability restriction.
  6. The City sends a letter stating whether or not the City is exercising its purchase right; and if so, whether the purchase will be a direct sale to a new buyer or a sale to a non-profit designee. The price stated in the letter is the contract sales price.
  7. The owner receives a package with instructions for items they must bring to the closing, which will generally include: a smoke detector inspection certificate, 6D certificate (for condominium units), and receipted final water bill if applicable. The seller’s package outlines how to obtain these items.
  8. If the unit is being sold directly to a new buyer, the City arranges times to show the unit to potential buyers selected through the Homeownership Resale Pool. After a new buyer is selected, we recommend the current owner retain an attorney to assist with the sale. A purchase and sales agreement is drafted and a closing is scheduled between the owner and the new buyer.
  9. If the unit is being sold to a non-profit designee, a purchase and sales agreement is drafted and a closing is schedule between the owner, non-profit, and City. 
  10. Units must be free of all possessions and broom-clean at the time of sale. After the closing, the seller no longer has access to the unit.

If you have questions on selling your unit, please contact Antonia Finley, Homebuyer Coordinator, at 617/349-4643 or afinley@cambridgema.gov or Emily Salomon, Associate Housing Planner, at 617/349-4661 or esalomon@cambridgema.gov. 

Refinancing

Owners of City-restricted units may refinance at any time as long as the new loan, combined with any other outstanding liens on the property, does not exceed the current affordable value as determined by the formula in your affordability restriction. The City generally has three roles in the refinancing process:

  1. Provide an estimate of the current affordable value. Using information about your current mortgage balances, the City will calculate the current affordable value for the purpose of refinancing. The refinancing value does not include capital improvements, which are only added to the value of a unit at the time of sale. The City will provide a letter stating the value. Banks may ask for a copy of this letter.
  2. Answer any questions banks may have about the City's affordability restriction. Sometimes banks have questions about the City restriction on a unit, and how the restriction affects their mortgage, the City will work with them to help them understand the affordable housing program and how the restrictions work.
  3. Provide a subordination upon request. Some City affordability restrictions are secured by a mortgage held by the City which is recorded with the Middlesex South Registry of Deeds. The City will subordinate the mortgage securing its restriction to an approved new first mortgage upon request.  A copy of a signed commitment letter from a bank showing a new mortgage amount less than the current affordable value is required to request a subordination. Please request any subordination at least 15 business days prior to a closing.

If you have questions regarding refinancing your unit, please contact the Housing Division at 617/349-4643 or homeownership@cambridgema.gov.  

Capital Improvements

Most City restrictions contain a policy regarding reimbursement for eligible capital improvements. The policy outlined below applies to most but not all restricted units. For more detailed information, please see the affordability restriction for your unit.

The standard definition of a real estate capital improvement is a permanent addition to a property that enhances value and cannot be considered repairs or maintenance. Capital improvements are generally eligible for reimbursement based on the following guidelines:

  1. The work must involve a permanent fixture in the unit such as flooring or a light fixture and not ordinary repairs. Ordinary repairs or maintenance include painting, carpet cleaning and calling a plumber to fix a leak.
  2. All work must be done to City standards. Prior to reimbursement, capital improvements will be inspected by the City. If the work is not done properly, it may not be approved for reimbursement.
  3. Original receipts for all labor and materials must be provided. Please save detailed receipts and backup for any work you may want reviewed for reimbursement when you sell.
  4. If it has been some time since you made the improvement and the time of sale, the improvement will be depreciated based on the “useful life” of the improvement, and the reimbursement amount reduced to reflect the remaining useful life of the improvement. Depreciation is based on industry standards.
  5. Improvements made to the common elements of condominiums may be eligible for reimbursement. Condominium owners should retain a copy of their portion of the payment for capital improvements completed. Examples of eligible work include replacement of a roof or a heating system. Ineligible costs include landscaping, snow removal and painting.
  6. Work completed by the homeowner is not eligible for reimbursement for labor costs.
  7. Most restrictions contain a cap on the amount of capital improvements eligible for reimbursement. The most common cap is 1 percent of the purchase price of the unit in aggregate. For example, a unit purchased for $150,000 would have an annual capital improvement allowance of $1,500. After five years, the total allowance would be $7,500. Please see your restriction for more specific information.
  8. in exceptional circumstances, the reimbursement cap may be exceeded with prior approval from the City. If you are doing work that you would like to be eligible for reimbursement at the time of sale, you must inform the City prior to completing the work and apply for a capital improvement waiver.

If you have specific questions about capital improvements, please contact please contact the Housing Division at 617/349-4643 or homeownership@cambridgema.gov.  

Funding for Renovation and Repair

The City's Home Improvement Program provides low-interest and deferred financing for homeowners to complete necessary repairs and improvements. The program is administered by two non-profit housing agencies, Homeowners Rehab, Inc. (HRI) and Just A Start Corporation.

Foreclosure Issues

If you are having trouble paying your mortgage or condominium fees, please contact the City as soon as possible to discuss your situation, or find more information at resources for owners facing foreclosure.

Mediation for Results

The City supports Just A Start Mediation Services, a non-profit, professional mediation service that can assist homeowners and associations of affordable condominium units to help ensure owners can work together as an effective condominium association. Assistance is available to help with understanding your rights and responsibilities as a condominium owner, association development, non-payment of condominium fees, owner conflicts and other issues that arise.