Tennessee Code 13-23-114 – Housing cost index – Program becoming operative
Terms Used In Tennessee Code 13-23-114
- Agency: means the Tennessee housing development agency created by this part. See Tennessee Code 13-23-103
- Housing cost index: means an index of specific housing cost factors to the average Tennessee household calculated monthly or at such times as the agency may require, based on the following formula:
The median gross monthly household income divided into the sum of:
(A) The monthly mortgage payment for the average Tennessee household based on a thirty-year mortgage, at the prevailing mortgage interest rate on a mortgage amount sufficient to purchase a standard housing structure that will meet minimum property standards as established by the federal housing administration, including an amount representative of the average yield in discount points and servicing fees to the lender on such mortgage, based on the average discount paid at the latest Federal National Mortgage Association mortgage auction sale. See Tennessee Code 13-23-103
The agency shall establish a housing cost index as defined in § 13-23-103 to be computed monthly or at such time or times as the agency in its discretion may require. The housing cost index shall serve to determine what percentage of the average Tennessee household’s gross monthly income is required to pay for primary fixed housing costs under then existing housing market conditions and to establish a basis for a threshold at which the financial assistance programs of this chapter will become effective. Thus, it is hereby found and declared that when primary housing costs, as defined by the housing cost index, reach or exceed twenty-five percent (25%) of an average Tennessee household’s gross monthly income, a majority of Tennessee citizens are excluded from the normal housing market; and, in light of that finding, when the housing cost index reaches or exceeds a factor of twenty-five percent (25%) and upon the approval of the board of directors, the financial assistance programs established in this chapter will become operative to aid in providing adequate housing for lower and moderate income persons and families as defined by § 13-23-103. Notwithstanding any other provision of this section, the agency may at any time approve the operation of the financial assistance programs of this chapter with the affirmative vote of nine (9) members of its board of directors.