**TOTAL COST**

Total Cost is the price the investor pays for the home, closing costs, make ready and repairs/maintenance costs. Total Cost is used to determine the resident’s Right to Purchase prices. A sample is highlighted below:

Purchase Price – $239,500

Closing Costs* – $3,500

Make Ready & Repairs/Maintenance Costs – $7,000

Total Cost

$250,000

**Includes costs such as transfer taxes, attorneys’ fees, title insurance, other acquisition costs, etc. To be used as an example only, actual costs and figures vary based on price and location.*

**MONTHLY RENT INCREASES**

Each year, a resident’s Monthly Rent increases by no more than 3.75% over the previous year’s Monthly Rent.

For example, if the Monthly Rent for Year 1 is $2,000 per month, the increase for the next year is $75/month (i.e., $2,000 x 1.0375).**

Monthly Rent

Year 1 ……….$2,000

Year 2 ……….$2,075

Year 3 ……….$2,150

Year 4 ……….$2,230

Year 5 ……….$2,310

**RIGHT TO PURCHASE PRICE INCREASES**

Each year, the Right to Purchase Price increases by 3.5%

In the example, if the Total Cost of the home is $250,000 and if the Right to Purchase increases by 3.5% (i.e., Prior Year Purchase Right Price x 1.035)** then the Purchase Right Price for Years 1-5 is as follows:

Year 1 ………………..$258,800

Year 2 ………………..$267,900

Year 3 ………………..$277,300

Year 4 ………………..$287,000

Year 5 ………………..$297,000

There are additional costs that the resident will incur if they exercise their Right to Purchase, such as, closing costs, transfer taxes, attorneys’ fees, title insurance and the cost of a mortgage loan. As a result, actual total costs to exercise the Right to Purchase will vary.

***Rent will round to the nearest $10. Right to purchase price will round to the nearest $100.*

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