Valuation of BMR Units

Resale

The resale price of BMR units is established in accordance with a formula that limits appreciation to a percentage of the increase in the Consumer Price Index (CPI) for the San Francisco Bay Area during the period of ownership. The use of this formula means that BMR units appreciate by very modest amounts compared to market rate properties. However, the limit on appreciation enables the City of Palo to keep BMR units affordable for the next generation of BMR homebuyers.

In appropriate cases, an amount equal to the depreciated cost of significant improvements made to the unit by the BMR owner for which the owner can provide receipts and the full amount of any special assessments paid by the BMR owner to the Homeowners Association for the maintenance and repair of common areas are added to the resale price.

The sale price of comparable market rate units or even comparable BMR units has no bearing on the resale price of a particular BMR unit. The resale price of BMR units is determined solely by application of the rules set forth above.

Example: Price Calculation for BMR Property Purchased in 1993 and Sold in 2008

Refinancing

You should notify PAHC if you intend to refinance your unit. At that time, PAHC will inform you of the current BMR value of your unit. (Interim price calculations made for purposes other than resale do not include any adjustments for improvements or special assessments.)

You may not take out mortgage loans that exceed the current BMR value of your unit. Over-financing is a violation of the program rules, may constitute criminal fraud, and can result in the loss of your home.

Know the Current Value of Your BMR Unit

You may ask PAHC to calculate the current value of your BMR unit at any time, not just when you are considering refinancing. We recommend that you do so periodically to ensure that the assessed value of your unit for property tax purposes does not exceed the BMR value. If the assessed value of your unit exceeds the BMR value you are overpaying on your property taxes and should contact the Santa Clara County Assessor’s Office to request an adjustment.
 

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