Inclusionary Housing Program

The City of Huntington Beach Inclusionary Housing Program

The City provides for affordable low, median, or moderate-income families through a City-wide Inclusionary Housing Program. Homes become available for purchase by eligible buyers when new developments are built or when existing homeowners decide to sell.

There are several hundred homes in Huntington Beach that were built under the City’s Inclusionary Housing Program to be affordable for low, median, or moderate income home buyers. By clicking on the following links you can:

Learn about the Inclusionary Housing Program and affordability requirements,

The Inclusionary homes have an affordability period of up to 60 years from the time a home was built. Any Inclusionary Housing Program home that is sold must be purchased by an eligible buyer and the price of the home must fall within an affordable price limit calculated by the City. Prices are calculated for affordability. This calculation is not driven by property values or other market conditions.

The City records a lien on each affordable home that remains on title for the duration of the affordability period. The lien ensures that the City is able to enforce the Inclusionary Housing Program requirements, including the resale restrictions.

Buying an Affordable Home

From time to time, affordable homes are available for purchase. To be eligible to buy one of these homes, your total household income must be within certain limits. Most homes are restricted to moderate-income buyers; a limited number are restricted to low or median-income buyers. The City examines total gross income (before taxes or deductions) from all sources for all household members, even if not all household members are related or intend to be named on the mortgage or title. Home buyer eligibility is based only on gross household income; net worth is not considered.

If you find an affordable home that you are interested in buying, you or your Realtor should contact the listing Realtor and negotiate a purchase offer. After your offer is accepted, you will be given several forms to complete, and you will be asked to provide copies of recent pay stubs, bank statements, and tax forms; occasionally, additional documentation may be required. This information is necessary to verify your income eligibility. The Community Enhancement Division staff will examine these documents for the sole purpose of determining eligibility.

Maximum Selling Price

At the time of initial sale and for all re-sales during the affordability period, the maximum price for each Inclusionary Housing Program home is calculated by the City. The City’s formula is intended to provide the amount an eligible buyer should be able to pay without spending more than 35% of their gross income toward housing expenses. Prices are calculated for affordability. This calculation is not driven by property values or other market conditions.

When the City calculates a maximum sales price, the price equals the present value of the anticipated amount of the buyer’s income available for mortgage payments over 30 years at the current interest rate, plus a 10% assumed down payment. A sample calculation using this formula is provided along with an explanation of the variables used in the formula. 

When determining housing expenses the following factors are included: Homeowners’ Association Dues related to the specific housing development; utilities are determined by bedroom count (see below); property insurance is assumed by periodic survey of local insurance companies to determine the typical annual cost of insuring a home for its replacement value; maintenance is a nominal cost that homeowners will be expected to incur for maintaining their property over a one-year period; and the property tax rate applied determines the annual property tax costs will be 1.08% of the purchase price of an affordable home.

Pricing Example

Moderate Income Limit for a Family of Four
(Three Bedroom Home)

$154,800

35% of Income

$54,180

Less Annual Housing Expenses:

HOA Dues

-4,200

Utilities Expenses

-4,464

Property Insurance

-900

Maintenance

-600

Property Taxes

-6,397

Annual Income Available for Mortgage Payments

$37,618.58

Interest Rate

5.82%

Present Value of Income Available for Mortgage Payments over 30-Year Term

$533,118

Plus 10% Down Payment

$59,236

Maximum Sales Price

$592,354

*The pricing example provided is intended for explanatory purposes only and is not necessarily reflective of current pricing calculations.

The buyer’s anticipated income available for mortgage payments equals the income limit (either low, median, or moderate, depending on the home being priced) for a household size equal to the number of bedrooms in the home plus one (a three-bedroom home would use the income limit of a family of four). This amount is then decreased by 35% for anticipated home ownership costs, including homeowner association dues, utility expenses, property insurance, maintenance expenses, and property taxes. The income remaining is the amount a homeowner would be expected to be able to pay on their mortgage.

The interest rate used will be the lowest Fannie Mae 30-year, fixed yield-90day mortgage rate, as published in the finanicals.com for the three months immediately proceeding the proposed home purchase.

Interest rate used to calculate Sale Price: 6.17% (Effective June 1, 2024)Published lowest interest rate of preceding three months.

  • March            6.17%
  • April               6.32%
  • May               6.27%

Please Note: Interest rates used to calculate maximum sale prices may have a significant effect on the maximum sale price outcome. When interest rates are lower, the maximum sales price will increase in price. When interest rates are higher, the maximum sales price lowers in price.
 
Owning and Selling an "Affordable" Home

The Neighborhood Enhancement Division monitors the various affordable housing communities to ensure compliance with program requirements. These requirements include the following:

  • Homes must be owner-occupied.
  • Homes may not be rented.
  • Home mortgage refinances and second liens must be approved by the City.
  • Home re-sales must be approved by the City.

Affordable homes are covenanted by the City for up to 60 years. These covenants enable the City to enforce the various program requirements.

If you are interested in selling your Inclusionary Housing home

Review the Inclusionary Housing Program Homebuyer Application. This packet includes material for the buyer you select. It is your responsibility to find an eligible buyer and to direct the buyer to the City for approval.

Submit a Request for Maximum Affordable Sales Price to the City's Neighborhood Enhancement Division. Your maximum sales price will be calculated, and you may request that your property be added to the list of homes for sale displayed on the City’s website.

When the buyer’s eligibility is confirmed by the City and your negotiated sales price is found to be within the affordable limit, your sale will be approved.

Many people ask if affordable homes can build equity. As with any home, building equity depends on various factors, such as the status of the real estate market. Unlike unrestricted homes, equity growth in affordable homes is not solely market-driven and may be limited due to program restrictions. 

Service Fees for Inclusionary Housing Program

Effective August 8, 2022, the Neighborhood Enhancement Division charges the following fees for housing program services:

Service Fees

Loan Payoff Demand

$148

Subordination Agreement

$265

Reconveyance

$85

Sales Price Determination

One free per year
$50 for each additional request


Payment will be required at the time of application. Checks should be made payable to the "City of Huntington Beach".

Documents may be delivered or mailed to:

Huntington Beach City Hall, Community Enhancement Division, 2000 Main Street, 5th Floor, Huntington Beach, CA 92648.