Appendix M: ROSE Program

Table of Contents

Introduction 

The Renter to Ownership Single-Family Education Program (the ROSE Program) is for low-income households that are initially qualified (Qualified Household) under LIHTC. Qualified Households participating in the ROSE Program will have the opportunity to gain knowledge necessary to purchase a home and basic skills needed for home maintenance. A Qualified Household can choose to purchase a home outside of the LIHTC property after fulfilling a one-year lease term or to purchase their rental unit after the Owner completes the 15-year LIHTC Compliance Period. All Qualified Households living in a single-family home have the right of first refusal to purchase their unit after the Compliance Period is completed. Renters will continue to have the right of first refusal to purchase their unit through the property’s 30-year LIHTC Extended Use Period.

LIHTC Allocation Requirements 

  1. The ROSE Program cannot be used in conjunction with State HOME or Permanent Supportive Housing. 
  2. The ROSE Program is for general occupancy (families or individuals). No Senior housing exemptions can be used.
  3. Only single-family detached homes are allowed. 
  4. No common buildings or shared amenities are allowed or required. 
  5. The Property must be 100% LIHTC, and the Owner must select a minimum set-aside of 40/60. 
  6. Rent Affordability points for a ROSE Program project are restricted to 6.1(B), Rent Reduction. 
  7. Each parcel for the single-family homes shall be platted to allow the parcels of land to be split from the project after the end of the 15-year Compliance Period. 
  8. The Owner must continue to rent the homes through the Extended Use Period if not sold to a Qualified Household. 
  9. The Owner must provide a tentative Homeownership Plan for evaluation in the Application. This plan shall address a Minimum Purchase Price and provide a calculation of the Maximum Purchase Price. The Maximum Purchase Price calculation must demonstrate how the price is attainable for a Qualified Household at 60% AMI or less to purchase a single-family home using current market calculations. This shall include the required down payment, principal, interest, tax, and insurance (PITI). The Iowa Finance Authority has the right to reject incomplete or unfeasible plans. 

Owner Requirements 

  1. The Owner is responsible for ensuring ongoing LIHTC and ROSE Program compliance even if management duties are delegated to another agent. 
  2. The Owner understands it is optional for Qualified Households to participate in the ROSE Program. The Owner shall continue to offer the ROSE Program while single-family homes are being rented. 
  3. The Owner understands their right to the receipt of rent is inseparable from the duty to maintain the premises until each parcel is sold and privately owned. While the unit remains a rental unit, the Owner shall maintain lawns, complete snow removal, and conduct all maintenance and repairs. 
  4. The ROSE Program must be explained in the project’s Tenant Selection Criteria for prospective applicants. 
  5. The Owner will operate and maintain all single-family homes throughout the Extended Use Period if not sold to a Qualified Household. 
  6. Every Qualified Household in the Project must receive a copy of the fully executed Appendix at initial move in and the original executed Appendix will be maintained in their tenant file. 
  7. The Owner must include in the Lease or a Lease Addendum the month, day, and year a Qualified Household can first purchase a single-family home in the property. The Lease or Lease Addendum must specify all renters will be given the Right of First Refusal (ROFR) to purchase the single-family home in which they are residing at least 6 months prior to the end of the 15-year Compliance Period. If a unit is not sold, the single-family home will remain as a rental unit through the Extended Use Period unless sold to a Qualified Household. The ROFR to purchase shall be given to any Qualified Household renting a single-family unit after the initial 15-year Compliance Period. If the single-family unit is still rented at the end of the Extended Use Period, the Qualified Household residing in the unit shall be given the final ROFR one year prior to the end of the Extended Use Period and will have the right to accept or decline within 6 months and, if accepted, purchase the unit before 12/31 of the 30th year. 
  8. The lease cannot charge a penalty fee for early termination if the Qualified Household can provide evidence a home will be purchased. The Owner shall have the right to obtain rent through the end of the lease term if the Owner makes reasonable efforts to rent the unit to Qualified Households under the LIHTC Program. If the Owner rents the unit for a term beginning prior to the expiration of the rental agreement, it is deemed to be terminated as of the date the new tenancy begins.
  9. The Owner must offer, free of charge, to all Qualified Households living at the property Homeownership Education, Financial Counseling Services, and Maintenance Education to help prepare for homeownership. 
  10. The Owner must provide to IFA an updated Homeownership Plan in the first quarter of the 14th year of the Compliance Period. IFA will review and approve before the ROFR can be provided to existing Qualified Households. 
  11. The Owner must maintain the single-family units in good condition throughout the Extended Use Period. If it is necessary to improve units to marketable condition prior to selling that unit, the Owner shall use replacement reserves or other funding source(s) available. IFA reserves the right to inspect homes which are being sold. 

Qualified Household Requirements

  1. All utilities shall be paid by a Qualified Household regardless of whether the household actively participates in the ROSE Program. 
  2. Participating in the ROSE Program is not a guarantee of homeownership. Qualified Households must still obtain financing, and loan approvals through a financial institution of their choice when purchasing a home. 
  3. Qualified Households living at the project have two options to consider when participating in the ROSE Program: 
  • A household can purchase a home of their choice outside of the project or; 
  • Purchase their rental unit in the project after the end of the 15-year Compliance Period by exercising the ROFR. 
  1. Participation in the ROSE Program is optional. The Owner cannot prevent a Qualified Household from purchasing a home of their choice or exclude them from purchasing their unit in the project after the 15-year Compliance Period. 
  2. Qualified Household means you qualified under the LIHTC Program income restrictions upon initial occupancy. Since this program is 100% LIHTC, your income could increase over time and exceed the income limits. The Owner shall always rent the next available single-family unit to an income qualified household. 
  3. Qualified Households must follow the lease and is subject to Iowa Landlord and Tenant Laws and LIHTC Program rules. 

Program Requirements

  1. The Owner shall offer at no cost to Qualified Households personal homeownership education and financial counseling sessions quarterly during the first year of participation. Participation does not start until the Qualified Household requests counseling and then bi-annually thereafter if the Qualified Household wishes to continue to meet with a housing counselor. The housing counselor shall be an Iowa licensed residential insurance agent or real estate agent and not an employee of the Owner. The counselor must be able to guide and educate Qualified Households on what to expect, what is necessary, and potential obstacles when purchasing a home. These sessions should be private between the counselor and the Qualified Household. The Qualified Household may participate as long as they have interest in achieving homeownership by attending scheduled sessions. The Qualified Household should have the opportunity to participate in sessions in person if they do not have the capability to use an alternative method of participation. The counselor shall maintain a list of participants and general content of session topics. If a Qualified Household cancels three times in a row without reason or regard to the counselor’s time, the counselor can refuse to continue to work with the Qualified Household. Sessions should include but are not limited to topics relating to: 
  • Understanding and establishing objectives to obtain homeownership;
  • Reviewing progress and set goals;
  • Identifying areas of needed improvement; and
  • Creating a timetable to complete the named objectives.
  1. The Owner shall offer, at no cost to Qualified Households, semi-annual maintenance workshops. Workshop participation is optional for Qualified Households. The Owner shall maintain a record of workshops held, attendee(s), date, location, and topic covered to demonstrate on-going compliance. Workshops should be conducted by a knowledgeable person who possesses the skills necessary to cover workshop topics, including maintenance staff assigned to the project. Workshop topics should include but are not limited to: 
  • Becoming familiar with electrical, heating, and plumbing systems;
  • Addressing problems identified in maintenance inspections;
  • Recognizing and teach seasonal preventative maintenance; and
  • Developing home maintenance knowledge in general.

This is maintenance education only. Qualified Households are not required to maintain rental single-family homes as this is the Owner’s obligation.

  1. The Owner shall allow one opt-in and one opt-out each lease term or per calendar year if the tenant is on a month-to-month lease.
  2. Participating Qualified Households shall develop a plan to save towards the purchase of a home and find available programs to obtain a mortgage by using the offered education and financial counseling sessions. 
    • The Iowa Finance Authority (IFA) offers a variety of programs for first-time mortgage financing, down payment, and closing cost assistance. IFA has a network of lenders across the state who work with our programs as well as offering other financing programs. Other programs for individuals interested in purchasing their first home are available through various resources, including but not limited to HUD, USDA RD, FHLB, or the VA.
ROSE Program Forms
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