Step One is the Assisted Home Ownership initiative introduced by North Wales Housing Association (NWHA) and based on the Welsh Assembly Government’s HomeBuy Scheme.

It aims to help those people in our communities who are unable to buy their own home without additional assistance.

With Step One the homebuyer provides 70 per cent of the cost of the property, generally through a mortgage, while NWHA funds the remaining 30 per cent through an ‘equity loan’. (This is secured by means of a second charge recorded at Land Registry which helps to ensure that NWHA receives the repayment of the 30 per cent loan on resale.)

Funding the 70%

There are no monthly repayments to make with NWHA’s equity loan. The loan is repaid
to the Association when you sell the property and the amount you repay is calculated as 30 per cent of its open market value at the time of repayment. The Association will not include the value of any agreed improvements in this open market valuation.

For instance, if the value of your home goes up by four per cent, the amount you repay to N W H A will also increase by four per cent. Likewise, if the value of your home falls, the amount you repay to NWHA also falls.

It is worth bearing in mind though that this is not the case with your mortgage and even if the value of your home falls, you will still have to repay the total amount you borrowed from your mortgage provider.

Stamp Duty Land Tax is paid when you buy property like houses, flats, other
buildings and land. It is charged on a sliding scale determined by the value of
the property being bought. There is no Stamp Duty on properties costing
£ 125,000 or less but for those valued at£ 125,001 - £250,000, you will have to pay
one per cent of the total purchase price. For instance, for a home costing £140,000,
the stamp duty would be £1,400. (Figures correct as of May 2007).

Once the purchase of your property has gone through, you will own it outright and, just like anyone buying a home without Step One assistance, you will be responsible
for its upkeep, making your mortgage repayments and paying your Council
Tax and other utilities bills.

It is normal when getting a mortgage to also take out buildings insurance to protect against losing your home in a fire or similar disastrous circumstances. This will
be required by your mortgage lender and NWHA will also require a copy for its records. There are other conditions you will also need to comply with in order for the
Association to protect its loan:

You will need to . . .

• Notify and obtain NWHA’s approval for any alterations or improvements you want to make to your home such as building an extension or altering its layout;

• Obtain NWHA’s consent before taking out further loans for repairs or improvements which are secured on your home;

• Ask NWHA for an independent valuation of your home – for which you will need to pay – should you wish to sell it or repay the loan. This is to agree the value of your home. Once the loan is repaid in full, the Legal Charge on your property (for the equity loan) is removed but a Deed of Pre-Emption in respect of the sale of your home will remain. (The Deed of Pre-Emption entitles NWHA to have the opportunity to buy the property from you or to provide you with a suitable purchaser.)

Step One is designed to help people from Ynys Mon, Gwynedd and Conwy who want to become homeowners but cannot meet the full cost of buying a property by themselves. To qualify for Step One you must be able to demonstrate this, be approved in writing by NWHA and generally fulfil the following criteria:

You should be either:

• A tenant of NWHA or Council tenant from Ynys Mon, Gwynedd or Conwy
• First time buyers registered with NWHA or on Ynys Mon, Gwynedd or Conwy Councils’ housing lists
• First time buyers living in Ynys Mon, Gwynedd or Conwy for the last five years.
• First time buyers living in Ynys Mon, Gwynedd or Conwy.

NOTE: These priorities may not have equal ranking and may be used in the
priority order stated.

• You must be able to obtain a mortgage to cover 70 per cent of the property’s
  purchase price and be able to meet the other costs associated with buying a
  home such as legal and surveyors’ fees.
• You must not be in rent arrears or in breach of your tenancy agreement if you
  are a tenant of a housing association or local council.
• Your eligibility may be effected if you have been in receipt of Housing Benefit
  in the last 12 months.
• If you already own, or part-own, a property, you will only be considered for
  Step One if NWHA and your local council agree that there are exceptional
  circumstances. You will also have to sell your interest in the property at the same
  time as buying a home through Step One.

There is a limit to the amount of any equity loan available as well as a maximum purchase price. You will not be able to use Step One if your family income is more than the limit set at the time of application. (These figures may be varied to allow for changes in the housing market and are available from NWHA.)

• The property must be located in Ynys Mon, Gwynedd or Conwy and be suitable for your household’s needs.

You may buy with someone else as long as your joint income and savings would not enable you to buy a home together outright and NWHA will take your joint incomes into consideration when deciding whether you need help from Step One.

No more than four people can jointly buy a home through Step One and if anyone already owns a home, they will need to sell it and any likely profit will be taken into account when considering the application.

For a successful joint application all parties will need to jointly own the home. A Deed of Trust providing rights of occupation for a qualifying applicant is unacceptable.

• Step 1 – Making an application: Firstly complete the application form enclosed, take a copy of it for your own records and then return it to NWHA at Plas Blodwel, Broad Street, Llandudno Junction, Conwy LL31 9HL.

• Do not make any financial or legal commitments to buy a home at this stage as this may disqualify you.
  
• Step 2 – Considering the application: NWHA will check through your application and, if necessary, may ask for more details such as evidence of savings or income. Once satisfied with the information provided, the Association will notify you in writing as to whether or not you qualify for Step One.
  
• Step 3 – Progressing your purchase: Having received your letter confirming your eligibility for Step One and with a property to purchase lined up, you can now: " Apply for your specific mortgage." Appoint a legal representative – solicitor or licensed conveyancer – to handle the purchase for you. There are guidance notes on Assisted Purchase available from NWHA for you to pass on to your mortgage provider and legal representative.
  
• Step 4 – Making it legal: When NWHA has agreed your application and has received a copy of your mortgage offer, you may instruct your legal representative to go ahead and purchase the property.
  
• Step 5 – Looking ahead: If, in future, you wish to sell your home or repay the loan, you must first notify NWHA who will arrange for a valuation to be carried out - at a cost payable by you – in order to agree the loan repayment amount. The amount you repay is based upon the market value of your home at the time you want to sell it or repay the loan. The valuation will not include any improvements you may have made to your home with NWHA’s written consent.

In the event of bereavement: If someone buying through Step One should die and their partner or family member is left, they may take over ownership and continue to live in the home. The cost of running the home and keeping up mortgage repayments then normally transfers to the remaining occupants. If this is not the case the home will be sold and the outstanding loan repaid. Insurance that pays off the mortgage on death can be taken out although it is not obligatory.