Eligibility Requirements

Below is a list to test your eligibility. Satisfying all the criteria does not guarantee eligibility, but allows you to self-determine if you think you may be eligible for LCLT housing.

1. Minimum Two-Year Residency.

A minimum residency on Lopez of at least two years OR an employment contract with a Lopez employer with a minimum anticipated duration of two years. You must be able to demonstrate the ability to support your household in the islands. If there are homes available beyond the qualified waiting list, the two-year minimum may be waived.

2. Household Income

Your income eligibility will be determined by your previous two years Federal Tax Returns or signed, notarized statements. The income of all adults in the household is included when determining eligibility, even if all adults are not planning to purchase the house. You must have a reliable stable income (seasonal is ok if it is consistent from year to year) that can support you locally. You’ll need to earn enough to pay the monthly mortgage, taxes and insurance and household associated fees, and your income must be at or below 80% of the median income for the county for your family size. Use the table below to determine if you are at or below 80% for your family size. In some cases your income may be up to 115% of the area median income. If you are self-employed, qualifying income is calculated after deducting any business-related expenses (i.e. the bottom of your Schedule C).

A minimum income is also necessary and is dependent on the sale price of the home you wish to buy, closing costs and current interest rates. This minimum will be clarified during your interview.

3. Credit Rating

Households must have a good credit rating, which means no more than two late payments (30 days late) in the last year, any collections must be paid in full at least six months prior to applying for a mortgage, no judgments or federal debt and no bankruptcies within the past two years. If you have no credit but no derogatory credit we may be able to build a case of alternative credit for your application. If you have concerns about your credit, talk to LCLT’s Representative.

To order your free annual credit report, visit www.annualcreditreport.com, or call 1-877-322-8228. Credit reports must be dated within three months of your application date.

4. Employment or Other Sources of Income

Sources of income include wages, overtime and tips; interest and dividends; social security, annuities, pensions; unemployment, disability and severance compensation; alimony and child support; and some forms of public assistance.

5. Household Contribution to New Construction

The household should expect to work on the construction site – 16 hours minimum hours per week during the course of construction. It takes, on average, 8 months to build a house depending on circumstances. Relatives, friends and ‘building partners’ can help up to 50%. In order to qualify you must be willing to participate within your abilities.

6. Assets

Homebuyers purchasing a coop share or house on LCLT land may retain assets after the share or house purchase (exclusive of share or house) with an aggregate value not to exceed 115% of AMI (Area Median Income) for household size, as long as this does not exceed the assets limits for mortgage compliance. For the purposes of this requirement, “assets” do not include the following:

(a) employer-provided retirement plan (both qualified and non-qualified) and IRS- recognized individual retirement accounts;

(b) cars or other vehicles necessary for work or daily living;

(c) assets required for the conduct of the applicant’s business, or used in applicant’s employment, such as tools, equipment, supplies, and business inventory; and

(d) if the applicant is age sixty-five or over, income-producing assets (such as brokerage accounts, stocks, bonds, and passive interest in income-producing partnerships, limited liability companies and corporations) to the extent that such assets produce annual income not greater than 80% of the AMI based on household size.

7. Home, Mobile Home, Land

Ownership of any of these will likely make you ineligible. It is necessary for you to list them with the current associated value. A final determination will be made after a complete review of all terms and conditions are known. Generally, ownership interest in a home or mobile home on property you own will make you ineligible. Ownership of a mobile home on rented land or ownership of raw land will be counted as part of your asset limit.

8. Debt

At the time you apply your total projected debt (including the cost of your CLT house share – mortgage payment, insurance, taxes and lease fee – may not exceed 38% – 44% of your income. Debt includes any long-term obligations (a repayment period of more than six months), such as automobile payments and student loans, plus the minimum monthly payment for all credit card debts. LCLT’s Representative can help you determine this percentage during your initial screening interview.

If you are not eligible, how could you become eligible?

The most frequent causes of ineligibility are poor credit, too much debt, or unverified or insufficient income sources. If a prospective resident meets all other eligibility and pre- qualification requirements, we encourage them to meet with the LCLT Representative. We may have resources to assist with debt reduction and budget planning that will move an applicant towards eligibility. Call the office to make an appointment (468- 3723).