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Home Forum / Elizabeth Rhodes
What are the rules for qualifying as first-time buyer?

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A: First-time buyer programs help low- and moderate-income purchasers afford a home by providing down-payment assistance or a lower than customary mortgage-interest rate.

What constitutes low and moderate income varies by counties. Usually it's defined as earning less than 80 percent of the county's median income, which in King County means $46,000 or less for a family of two.

Most programs consider you a first-time buyer if in the past three years you've not owned a home and lived in it. If you have, you won't be eligible, "but there are exceptions," notes Amy Duggan, executive director of the Community Home Ownership Center, or CHOC for short. This nonprofit buyer-information clearinghouse has information about such programs.

The exceptions vary according to who's offering the first-time buyer aid. For example, Duggan says one program waives the three-year ownership rule for "displaced homemakers" of either gender. "You could be married, then divorced and as part of that divorce settlement the other partner was awarded the house, then you would be eligible for a first-time buyer program even if you'd owned within that three-year period of time.

"Or if there was a divorce and both partners sold the house and split the proceeds, then both of them would be eligible."

To see if you're eligible for any of these programs, visit CHOC online at www.choc-wa.org or call 800-317-2918. "It's a complex situation," Duggan says, "and if someone brings a situation to us that makes us scratch our heads, we'll do some research and help them find the answer."

Q: We're on friendly terms with our neighbors and would like to buy or preferably lease a large portion of their rear yard that they don't use to expand our garden. Any suggestions about how to do this and decide what's fair?

A: Seattle attorney Brian Ritchie says it's relatively straightforward to do either if both parties are willing. Most important is that both you and your neighbor think this through carefully before committing anything to paper.

If you go for a lease, here are a few things to consider: what's OK to grow or plant and what's not; what kinds of garden chemicals — if any — can be used; whether any structures, such as a shed or fence, can be erected; and what happens if any of your gardening spills over to the neighbor's property (this certainly can happen with invasive plants).

You'll also want to think about how long the lease should run, and whether a security deposit might be in order.
 
Ritchie suggests that would be a good idea if one of the neighbor's conditions is that you eventually return the property to its original condition ... to lawn, for example.

As for rent, one way to calculate it would be to start with a percentage of the assessed value of the land. Finally, to make it legal, you need to write it all out — stationery-store forms are adequate — and you must include a legal description of the land and a reference to the portion you're leasing. The legal description is provided on property-tax statements.

Purchasing the property requires more consideration.

First, you'd need to be sure that carving off a portion of your neighbor's lot doesn't make it so small that it violates your area's minimum lot-size rules. If your homes are in a planned community, you should research whether there are any rules forbidding your land purchase. If you're OK there, Ritchie says, your next step would be to hire a surveyor to survey the neighbor's yard and write up new legal descriptions of your enlarged yard and your neighbor's smaller one. Then you draft a purchase-and-sale agreement noting these two legal descriptions and have it recorded at your county courthouse. An attorney can help you with this. One thing to consider in setting the sales price: The seller will pay excise tax on this transaction.

Q: Just shy of 40 years ago, a neighbor built a 6-foot fence between our two houses. This neighbor is now very elderly, her house is for sale and the fence is falling apart. Do I have any recourse to tell her she needs to repair or replace the fence?

A: You have as much recourse as neighbors ever have to make comments about neighboring properties. And your elderly neighbor can do with your comments as she sees fit. As she's obviously moving on, "her last concern is probably the fence," says RE/MAX Metro broker Pat Fitzgerald, who adds that a worn-out fence isn't necessarily a detriment to a sale. "It would depend on the price and desirability of the house and how much buyers wanted it."

Since you get value out of this fence, too, you might approach your neighbor with a proposition that she pay a portion of the cost and you repair or replace the fence. If she won't go for this, perhaps she'll simply let you take the fence down and erect another. Should that get nixed, your final option is to wait until you have new neighbors, then work with them on this eyesore.

Home Forum answers readers' real-estate questions. Send questions to Home Forum, Seattle Times, P.O. Box 1845, Seattle, WA 98111, or call 206-464-8510 to leave a question on a recorded line. The e-mail address is erhodes@seattletimes.com. Sorry, no personal replies. More columns at www.seattletimes.com/columnists.

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