Selling Your Home FAQ
Can I sell my home?
Yes! Habitat homeowners have the right to sell their homes. However, Habitat homeowners have unique mortgages and conditions to consider when selling their homes. Exact conditions and terms vary from homeowner to homeowner, and it is important to gather all details directly from Habitat (not the bank where you send your mortgage payment). All terms and conditions of your mortgage and home purchase were explained when you bought your home and on documents you signed, but we recognize that may have been a long time ago and we are happy to review these with you. The considerations below are not exhaustive nor applicable to each homeowner, but represent common requirements.
Considerations for Selling Your Home
- Multiple Mortgages to payoff
- Most Habitat homeowners have more than one mortgage loan even if they only make one payment each month. When you sell your home, you are responsible for paying off all mortgage balances owed.
- Additional mortgages may be “silent” or “forgivable” and do not require a monthly payment but do require payoff if the home is sold before the end of the term.
- Habitat is the only entity that can provide you with a full pay off balance. Do not rely solely on Pinnacle Financial Partners or Volunteer Mortgage Loan Servicing (VMLS) information for your full payoff information.
- First Right of Refusal or Right of First Offer
- These terms apply to most homes Habitat has ever sold. The duration of this requirement may vary, but for most, it is in place for 30 years from the date of purchase, even if loans have been paid off.
- For homes sold prior to July 2023, Habitat typically maintains the right to match any reasonable, bona fide offer by a third party to purchase your home, at similar terms as the proposed sale. You must notify your real estate agent and any potential buyers of Habitat’s first right of refusal. When a third-party purchase offer is received, it must be presented to Habitat in writing. Habitat will respond within 30 days regarding whether the first right of refusal will be exercised. Upon preliminary discussion with Habitat, prior to listing for sale, Habitat can typically provide guidance on whether it would anticipate exercising this right.
- For homes sold after June 2023, Habitat maintains a right of first offer which allows Habitat the first right to purchase the home, before it is offered to others, at fair market value (as further defined in the home purchase documents). These homeowners must let Habitat know of their desire to sell. Habitat will respond in 30 days. If Habitat declines to buy the home as defined, then the homeowner may proceed with listing the home for sale.
- Shared Property Value Appreciation
- Homes sold by Habitat since 2010 included a Shared Appreciation Agreement.
- Shared Appreciation means that if the value of your home has appreciated (increased) since your original purchase, you will share a percentage of the appreciation with Habitat upon the sale (or refinance in some cases) of the home. The percentage shared is determined by the formula in the Shared Appreciation Agreement. Habitat will calculate and provide you the amount of shared appreciation owed when selling your home.
- This agreement remains in place for the full length of your mortgage loan, even if the loans have been paid off.
- Important - Appreciation is the value above your initial purchase price, so sharing appreciation with Habitat does not take from the equity you built through your monthly loan principal payments. The purpose of sharing appreciation is to allow the sale of a Habitat home to give back funds to the program to help continue Habitat’s mission.
- Grant Funding & Other Considerations
- Over time, various funding sources are used by Habitat to build and finance homes. Specific conditions may exist for your home based on funding used at the time of your purchase. Habitat will let you know if these apply to you and any impact regarding selling your home.
- Affordability Restrictions - Many homes sold in Nashville since 2017 require that the home be sold to a buyer whose income meets certain limits and at a price that keeps the home “affordable” by a certain definition. This information was explained to you when you purchased your home. If this applies, we will help you understand and navigate this process.
- Consider the amount of funds you will need to pay closing costs as a seller (i.e. real estate agent commissions, transfer taxes or recording fees, title insurance fees, attorney fees).
What steps do I take to sell my home?
- Contact Habitat’s Mortgage Servicing Specialist to obtain a Potential Home Sale Assessment. This information will help you make an informed decision about the financial implications of selling your home and ultimately the amount of money estimated to receive after the sale. We will also guide you on other specific actions to be taken in your situation.
- Habitat recommends hiring a licensed real estate professional to list your home for sale. A real estate agent is typically a commission based on a percentage of the price your home is sold for. Use an internet search for lists of questions to ask when choosing a real estate agent. Interview more than one! Because of the unique terms for selling Habitat homes, it will be important for your agent is willing to communicate with Habitat to best serve you.
- Continue making your mortgage payments and maintaining your home. If payments are not made, you could find yourself in default, which could result in negative credit reporting, fees, penalties, and ultimately foreclosure.
Can I lease my home instead of selling?
This answer is usually no. One requirement of having a Habitat mortgage is that the owner uses the home as their primary residence, meaning they live in the home. In neighborhoods with homeowner’s associations (HOA), there may also be HOA restrictions prohibiting the leasing of homes in that community. Temporary rental of the home for a defined period may be considered, dependent upon circumstances, and requires permission from Habitat and possibly other funders of your home. You will need to contact Habitat’s Mortgage Servicing Specialist to review your situation. If your loans have been paid off (or have reached maturity for silent mortgages), and there are no other restrictions in place, you may otherwise be able to rent your home, but this would be a very uncommon circumstance for most Habitat homeowners.
For additional questions about your mortgage:
Please contact Mortgage Servicing Specialist, Da’Marcus Hunt, 615-942-1263., dhunt@habitatnashville.org