Program Description

The Homeownership Opportunity Program (HOP) was created in 1986 to stimulate the development of mixed-income single family or condominium projects sponsored by community housing partnerships and developers. The program is no longer active for constructing units, however units regularly become available for resale to qualified buyers.

How it works:

Developers were encouraged to produce single-family or condominium housing with the cooperation of local communities. Community support, including but was not limited to, comprehensive permits or other zoning relief, waiving fees or donating land. At least 30 percent of the units in a development were to be reserved for first-time homebuyers with incomes at or below 80% of the area median income.

Buyers received below market-rate interest mortgages from the Massachusetts Housing Finance Agency (MHFA, now MassHousing), as well as interest subsidies from the Massachusetts Housing Partnership Fund (MHP). Initial buyers of HOP units were selected by a lottery process. The resale of units fall under deed restrictions to preserve their longterm affordability.

Resale restrictions:

There are three mechanisms used to ensure that units maintain their affordability.

1. Deeded resale restrictions: HOP-assisted units were discounted and sold for less than their fair market value. The percentage of the initial selling price to the appraised fair market value establishes the "discount rate" for each HOP unit (i.e. a unit sold for $75,000 and was appraised at $100,000. The discount rate for the unit was established at 75%). The discount rate appears on the unit deed rider--the recorded legal document that carries the HOP program restrictions.

A HOP unit may sell for no more than the "maximum resale price." The "maximum resale price" is calculated by multiplying a unit's a current appraised fair market value by the discount rate that appears on the HOP deed rider (i.e. a HOP unit with a 75% discount rate and an appraised value of $165,000 will have a maximum resale price of $123,750).

2. Right of first refusal: When owners of deed-restricted units sell, they must notify DHCD in writing and include an appraisal that is no more than 120 days past the completion date. DHCD has 30 days from receipt of the owner's notice to respond in writing. The written response from DHCD to the owner will set forth the maximum resale price for the unit. The written response will also state that, for a period of 90 days, the agency reserves the right to sell the unit only to a program-eligible buyer.

3. Repayment of HOP subsidy: Qualified HOP buyers receive a subsidy to reduce the mortgage interest. The subsidy is secured by a second mortgage to DHCD. Upon resale, the seller must repay the actual amount of the subsidy paid during ownership of the home, or 20% of the net profit gained on the sale of the home.

Application process:

No longer accepting applications.

For further information:

Please call the Division of Housing Development at (617) 573-1300.