Housing lotteries take place in cities where the demand for affordable housing is very high due to the typically elevated cost of most homes in the area. The lottery is for properties built or rehabilitated using private or government subsidies. The home developer is required to post an announcement about the lottery, but they are not required to repeat the announcement more than once. If you are interested in participating in a housing lottery, you should act quickly when you first see a notice.
Qualifying for a Home Lottery
Potential lottery participants must meet certain criteria in order to take part in the lottery process. You will be required to present tax information as well as other detailed financial information to help the lottery administrators determine whether you qualify. The family income guidelines come from numbers compiled by the Federal Department of Housing and Urban Development, which reports that the median annual income for a family of four is $79,000. Each development involved in a housing lottery will have specific requirements that are unique to the lottery that is taking place.
Those with Lower Numbers Win
Once you qualify for the lottery, you must submit an application to the development. A drawing will be held to determine which applicants receive which numbers in the lottery. You are welcome to attend the drawing, but you failure to attend will not disqualify you. The opportunity to purchase a home goes to the lowest number drawn. The person who holds the #1 has the first chance at the home. If there were 10 homes being sold in the same development, numbers 1 – 10 would each win an opportunity to purchase the homes. Not every winner is ready to make the purchase immediately, so people holding larger numbers may have a chance to purchase a home eventually.
Making a Deposit and Down Payment
If you win the chance to buy a home, you must begin the process of purchasing the property. When you pay your deposit, you will have an opportunity to read the Affordability Covenant. This document contains detailed regulations regarding the purchase and subsequent use of the property through the affordable housing lottery purchase system. Make sure you read it thoroughly before you proceed. When you have secured a home loan, you can present the developers with your down payment and begin the closing process.
Closing the Deal
Sometimes the house will still be under construction on the purchase date. You cannot occupy the house until a certificate of completion is presented to the developer. Before you move in, you should hire an assessor to file a report regarding the property. It is important to make sure that everything is in good working order so that you can have things repaired during the warranty period if necessary. When you sign the ownership papers, the Affordability Covenant becomes part of your ownership deed. It is your responsibility to understand the regulations and follow them.
Jessica Bosari writes for LowIncomeApartmentFinder.com. The site helps individuals find affordable apartments for rent.
