Resale Formula Summary

To ensure affordability for the current and all future homeowners, the Oberlin CLT utilizes a resale formula to determine a fair and equitable maximum sales price when a homeowner wishes to sell their home.

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This maximum price considers the equity that stays with the home (to ensure affordability for the next buyer), the increase in the value of the home, and the amount of money put in by the current owner.

 

The sale price is determined by the purchase price plus the homeowner’s share of the increased value of the home.

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The homeowner receives 25% of the increased value of the home. The remaining 75% of the increased value stays with the home and ensures that the price is affordable for the next buyer

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Forgivable loans (in the form of down payment/closing cost assistance) do not count as money put into the purchase by the current owner in the resale formula. This way those funds stay with the house and become part of the shared equity that ensures affordability for the next buyer.

 

If the home loses value, the formula uses a growth of $0 instead of ta negative number. If we did not stipulate this, depreciation in the home’s value could force the owner to sell for less money than they spent on the home.