Administrative Code

Virginia Administrative Code
8/9/2022

Part VIII. Replacement Housing Payments for Owner-Occupants of 90 Days or More

24VAC30-41-390. General.

A displaced owner-occupant of a dwelling may receive a replacement housing payment, the elements of which will not exceed $31,000 except when last resort housing has been authorized. The elements included in the replacement housing payment are: additional costs necessary to purchase replacement housing (purchase supplement); compensation to the owner for the increased interest cost and other debt service costs that are incurred in connection with a mortgage or mortgages on the replacement dwelling; and reimbursement to the owner for expenses incidental to the purchase of replacement housing when such costs are incurred as specified by the provisions of this chapter.

The purchase supplement is the amount, if any, which when added to the amount for which VDOT acquired the dwelling, equals the actual cost that the owner is required to pay for a decent, safe and sanitary dwelling or, if lesser, the amount determined by VDOT as necessary to purchase a comparable decent, safe and sanitary dwelling.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.; 49 CFR Part 24.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001; amended, Virginia Register Volume 30, Issue 26, eff. October 1, 2014.

24VAC30-41-400. Eligibility.

An owner-occupant is entitled to a replacement housing payment when:

1. The owner is in occupancy at the initiation of negotiations for the acquisition of the property, or is in occupancy at the time a written notice of intent to acquire is delivered by VDOT;

2. Such ownership and occupancy has been for at least 90 consecutive days immediately prior to the earlier of the initiation of negotiations, or the date of vacation if a notice of intent to acquire has been issued;

3. Purchase and occupancy of a decent, safe and sanitary dwelling has occurred within the specified time period; and

4. If otherwise eligible, the owner-occupant can receive these payments if the move was a result of the initiation of negotiations, even though VDOT did not acquire the property.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.; 49 CFR Part 24.Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001; amended, Virginia Register Volume 30, Issue 26, eff. October 1, 2014.

24VAC30-41-410. Purchase of replacement dwelling.

A. For the purpose of this section, a displaced person "purchases" a dwelling when:

1. An existing decent, safe and sanitary dwelling is acquired.

2. A life estate in a retirement home is purchased. The actual cost will be entrance fee plus any other monetary commitments to the home, except periodic service charges may not be considered. The replacement housing payment is limited to the reasonable cost of purchasing a comparable replacement dwelling less the acquisition cost of the acquired dwelling.

3. A dwelling previously owned or acquired is relocated or rehabilitated, or both. The basis for determining the purchase supplement will be the current value of the dwelling at the time of relocation.

4. Construction is completed or contracts have been executed for the construction of a new dwelling on a site owned or acquired. The actual cost provision limits the reimbursable construction cost to only those costs necessary to construct a dwelling comparable to the one acquired. The costs of adding new features that clearly exceed comparable features in the displacement dwelling are not eligible for reimbursement. Eligible costs of the site will be limited to the current residential fair market value of the replacement site rather than what the displaced person actually paid for it.

5. Any person who has obtained legal ownership of a replacement dwelling or land upon which the replacement dwelling is located, constructed or relocated to, either before or after displacement and occupies the replacement dwelling after being displaced, but within the time limit specified in 24VAC30-41-360 is eligible for a replacement housing payment if the replacement dwelling meets the decent, safe and sanitary standards. The current fair market value of land and dwelling will constitute the "actual cost" in the replacement housing determination.

B. When the replacement dwelling has decent, safe and sanitary deficiencies, the cost to correct such deficiencies may be added to the current fair market value of a previously owned dwelling, or the purchase price of the acquired replacement dwelling.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001.

24VAC30-41-420. Advance replacement housing payments in condemnation cases.

An advance replacement housing payment may be paid to a property owner if the payment of the acquisition price for the displacement dwelling is delayed pending the outcome of condemnation proceedings. A provisional replacement housing payment may be determined by using the amount of the Certificate as the acquisition price.

Payment can be made upon the owner-occupant signing the agreement included on Library Form RW-65A(1) that:

1. Upon final determination of the condemnation proceedings, the replacement housing payment will be recomputed using the acquisition price determined by the court.

2. If the amount awarded by the court for the value of the residential unit exceeds the Certificate amount, the displacee will make a refund for any excess replacement housing payment resulting from the court judgment. The difference in the replacement housing payment will be deducted from the court award before final payment is made. However, in no event will the refund be more than the amount of the replacement housing payment advanced. If the property owner fails to execute the Provisional Replacement Housing Payment Clause on Library Form RW-65A, the replacement housing payment will be deferred until the case is adjudicated.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001.

24VAC30-41-430. Purchase supplement payment computation.

A. Method.

1. The probable selling price of a comparable dwelling will be determined by the district office by analyzing at least three dwellings from the inventory of available housing, Library Form RW-69B, which are available on the private market and which meet the criteria of a comparable replacement dwelling. Less than three comparables may be used for this determination when fewer comparable dwellings are available. The relocation agent performing the determination must provide a full explanation supporting the determination, including a discussion of efforts to locate more than one comparable. One comparable, from among those evaluated and considered, will be selected as the basis for the purchase supplement determination. The selection will be made by careful consideration of all factors in the dwellings being considered which affect the needs of the displacee with reference to the elements in the definition of comparable replacement housing.

Refer to the "Guidance Document for Determination of Certain Financial Benefits for Displacees," effective October 1, 2014, for a step-by-step summary of the determination process, and an example of the purchase supplement payment computation.

2. If comparable decent, safe and sanitary housing cannot be located, after a diligent search of the market, available non-decent, safe and sanitary replacement dwellings may be used as the basis for the maximum amount of the purchase supplement. In these cases, the maximum payment will be established by obtaining cost estimates from persons qualified to correct the decent, safe and sanitary deficiencies and adding this amount to the probable selling price of the available replacement housing.

A displacee will not be required to vacate the displacement dwelling until decent, safe and sanitary housing has been made available.

B. Major exterior attributes. When the dwelling selected in computing the payment is similar, except it lacks major exterior attributes present at the displacement property such as a garage, outbuilding, swimming pool, etc., the appraised value of such items will be deducted from the acquisition cost of the acquired dwelling for purposes of computing the payment. No exterior attributes are to be added to the comparable. However, the added cost of actually building an exterior attribute at the replacement property occupied, may be added to the acquisition cost provided major exterior attributes having the same function are found in the displacement property and in the comparable used to determine the maximum payment.

The following calculation shows how a purchase supplement is determined when a major exterior attribute is present:

Example
Major Exterior Attribute (swimming pool)

The appraiser assigned $5,000 contributing value for the pool, and a total property value of $100,000. A comparable house, not having a pool, is listed for sale at $105,000. After a 3.0% adjustment, a probable selling price of $101,850 is determined for the comparable property. The purchase supplement amount is computed below:

Comparable Dwelling (adjusted)

$101,850

Less:

Displacement property value

$100,000

Less value of the pool

$5,000

Adjusted displacement property value

$95,000

Purchase Supplement Amount

$6,850

C. Comparable housing not available.

1. In the absence of available comparable housing upon which to compute the maximum replacement housing payment, the district office may establish the estimated selling price of a new comparable decent, safe and sanitary dwelling on a typical home site. To accomplish this, the district office will contact at least two reputable home builders for the purpose of obtaining firm commitments for the cost of building a comparable dwelling on a typical home site.

2. If the only housing available greatly exceeds comparable standards, a payment determination may be based on estimated construction cost of a new dwelling that meets, but does not exceed, comparable standards.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.; 49 CFR Part 24.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001; amended, Virginia Register Volume 21, Issue 13, eff. April 6, 2005; Volume 22, Issue 21, eff. July 26, 2006; Volume 30, Issue 26, eff. October 1, 2014.

24VAC30-41-440. Highest and best use other than residential.

When the acquired dwelling is located on a site where the fair market value is established on a use higher and better than residential, the purchase supplement maximum amount will be determined by deducting the acquisition price of the acquired dwelling plus the acquisition price of that portion of the acquired land which represents a tract typical in size for the area from the probable selling price of the most comparable listing. The following calculation shows how this amount is determined:

Example
Acquired Dwelling on Commercial Zoned Site

The acquired house (whole take) is on a five-acre site zoned commercial. The typical residential lot in the area is one acre. The land is appraised at $50,000/acre and the dwelling is valued at $10,000 as an interim use.

A comparable house on a residentially zoned lot is available for $70,000 (after adjustment). The maximum purchase supplement amount is determined below:

Displacement property value

$100,000

Comparable property

$70,000

LESS: Value of the house acquired on one acre

$60,000

Maximum Purchase Supplement Amount

$10,000

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001.

24VAC30-41-450. Mixed-use properties.

A. When the acquired dwelling unit is part of a structure which also includes space used for nonresidential purposes, the amount of the purchase supplement offer will be determined by using only that part of the fair market value that is attributable to the residential use of the acquired property. The following calculation shows how this amount is determined:

Example
Displacement Property in Residential and Commercial Use

A grocery storeowner lives in a two-bedroom, one-bath apartment above the store. The residential unit has 1,200 sq. ft. of habitable living space. The property is appraised at $150,000. The appraiser allocated 40% of total property value to the residence.

There are several two-bedroom, one-bath units available for sale. They are: (i) a duplex with two identical units - $125,000; (ii) a single-family house - $75,000; (iii) a condo unit in a sixplex - $50,000.

Most comparable property: a) duplex unit.

Value $62,500

LESS: Displacement dwelling.

Value $60,000

Maximum Purchase Supplement Amount

$2,500

When the replacement property is a structure which includes space used for nonresidential purposes, only that part of the total cost that relates to the value of the owner's living unit will be used when determining the purchase supplement payment.

B. When the replacement property contains buildings other than the residence which are used for nonresidential purposes, the value of these buildings must be carved out of the entire purchase price of the replacement property in order to determine the residential use value. The residential use value will represent the amount paid for replacement housing when determining the purchase supplement payment amount. The following calculation shows how this amount is determined:

Example
Displacee Purchases Mixed Use Replacement Property

A family displaced from a single-family house (acquisition value $80,000, purchase supplement $10,000) contracts to purchase an operating chicken farm for $250,000. They will live in the farmhouse, which has an estimated value separate from the farm of $85,000. The displaced family submits a claim for the full $10,000 maximum purchase supplement amount.

The family is eligible to receive $5,000, not $10,000, as a Purchase Supplement Payment

Before processing the claim for payment, the district office must determine the value of the farmhouse on a lot normal for residential use in the area. This will determine the payment ceiling. The part of the purchase price attributable to the farm operation ($165,000) is not to be considered in the claim. This should have been explained to the displaced family members before they search for replacement property.

C. When the acquired property consists of a multi-family structure of which one unit is owner-occupied, the amount of the supplemental offer will be the difference between the value of one unit of a multi-family comparable and the value of the owner occupied residential-use portion of the acquired property. When the replacement property is a multi-family structure, only the value of the owner's living unit can be used to determine the supplemental payment, not the entire purchase price. The purchase supplement amount will be the price of one unit of a multi-family comparable or the price of one unit of a multi-family replacement, whichever is less, minus the residential use portion of the acquired property.

The following calculation shows how this amount is determined:

Example
Owner Displaced from Condominium Unit

The acquired dwelling is a condominium unit in a building containing three stores and six residential units. The appraised value of the building is $1 million. The value of the displacee's unit is $120,000.

The purchase supplement is the cost of a comparable condo unit in a similarly configured building having residential and commercial units, less the $120,000 attributed to the displacement unit.

There may not be a condominium unit on the market in a mixed use, six residential unit building. Look for units in buildings having five, four, three, or two units. Use the "most comparable" unit considering the ownership form and configuration of units, as well as other factors.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001.

24VAC30-41-460. Partial take of a typical residential site.

A. Remaining buildable site. If the acquisition of a portion of a typical residential property causes the displacement of the owner from the dwelling and the remainder is a buildable residential site, VDOT will offer to purchase the entire property. If the owner refuses to sell the remainder which is a buildable site to VDOT, the fair market value of the remainder will be added to the acquisition cost of the acquired property for the purposes of computing the maximum purchase supplement payment.

B. Remaining uneconomic remnant. If the owner refuses to sell the residue that is an uneconomic remnant to VDOT, the value of the take and damages to the remainder will be used in computing the replacement housing payment.

C. Larger tract than normal. If the acquired property is a dwelling on a significantly larger site than typical for residential use in the area, the maximum replacement housing payment is the asking price of a comparable replacement dwelling on a tract typical in size for residential use, less the acquisition price of the acquired dwelling and the portion of the site which represents a typical size residential lot in the area. The following calculation shows how this amount is determined:

Example
Partial Take From Larger than Typical Residential Site

The displacement dwelling is on a five-acre site. One-acre lots are typical in the area. The house and three acres are being acquired. Appraised value: $125,000 (no remainder damage). The appraiser valued land at $5,000/acre. A comparable house on one acre is available. It is estimated it will sell for $120,000 (adjusted listing price).

Comparable property

$120,000

LESS: Displacement property

$115,000

Maximum Purchase Supplement Amount

$5,000

* $10,000 value of two acres of acquisition area excess to typical lot has been deducted.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001.

24VAC30-41-470. Payment to occupant with a partial ownership.

A. When a displacement dwelling is owned by several persons and occupied by only some of the owners, the replacement housing payment will be the lesser of:

1. The difference between the owner-occupants' share of the acquisition cost of the acquired dwelling and the actual cost of the replacement; or

2. The difference between the total acquisition cost of the acquired dwelling and the amount determined by the district as necessary to purchase a comparable dwelling.

Generally, the circumstance of partial owner occupants arises when the ownership comes from a family inheritance, where one or more, but not all the heirs, occupy the property.

B. If the displaced partial owner-occupants rent rather than purchase a replacement dwelling, they will be entitled to receive a rent supplement payment if they rent and occupy a decent, safe and sanitary dwelling in accordance with the provisions of 24VAC30-41-510 of this chapter.

C. If unusual circumstances would create an unintended hardship on the occupants with a partial ownership, the full facts along with a recommended solution are to be submitted to the central office for consideration.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001.

24VAC30-41-480. Revisions to replacement housing amount.

Housing must be offered which is available for purchase within the offered amount. When comparable housing is no longer available within the amount initially established, the district office will review the housing market and establish a revised replacement housing amount. In no event will a purchase supplement amount previously offered be reduced as the result of this review.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001.

24VAC30-41-490. Increased interest payments.

A. General. Increased interest payments are provided to compensate a displaced person for higher increased interest costs required for financing a replacement dwelling. The increased interest payment will be allowed only when the dwelling acquired by VDOT was encumbered by a bona fide mortgage which was a valid lien on such dwelling for not less than 180 days before the established eligibility date under Part VII (24VAC30-41-330 et seq.) of this chapter (usually date of initial offer to purchase). All bona fide mortgages on the dwelling acquired by VDOT will be used to compute the increased interest portion of the replacement housing payment. Home equity loans are valid mortgages on residential real property regardless of how the proceeds from the loans are used. Therefore, they must be included in the computation. In the case of a home equity loan the unpaid balance shall be that balance which existed 180 days prior to the initiation of negotiations or the balance on the date of acquisition, whichever is less. When the property is secured with an adjustable rate mortgage, the mortgage interest rate that is current on the property as of the date of acquisition will be used in the computation. The displaced person will be advised of the approximate amount of this payment as soon as the facts relative to the person's current mortgages are known. The payment will be made at the time of closing on the replacement dwelling, so that the new mortgage can be reduced.

B. Payment computation. The computation of the payment for increased interest costs will be the amount which will reduce the mortgage balance on the replacement dwelling to an amount which could be amortized with the same monthly payment for principal and interest as that for the mortgage or mortgages on the displacement dwelling. The amount of the increased interest payment will be computed by the district office, utilizing Library Form RW-66, based on:

1. The unpaid mortgage balances on the displacement dwelling; however, in the event the person obtains a smaller mortgage than the mortgage balance computed in the buydown determination, the payment will be prorated and reduced accordingly.

2. The remaining term of the mortgage or mortgages on the displacement dwelling or the term of the new mortgage, whichever is shorter.

3. The interest rate on the new mortgage which shall not exceed the prevailing fixed interest rate for conventional mortgages currently charged by mortgage lending institutions in the area in which the replacement dwelling is located.

C. To whom payment is made. The increased interest amount can be paid to the displaced individual or family. On written instruction from the displacee, it can be paid to the mortgagee of the replacement dwelling. Upon specific request, VDOT can make an advance payment into escrow prior to the displacee moving.

The following calculation shows how this increased interest cost is determined:

Example
Increased Mortgage Interest Payment

FACTS:

1. Outstanding balance – acquired dwelling mortgage

$43,210

2. Outstanding balance – replacement

$47,000

3. Remaining term, in months, acquired dwelling mortgage

212

4. Term, in months, replacement dwelling mortgage

360

5. Interest rate – acquired dwelling mortgage

7.5%

6. Interest rate – replacement mortgage

8.0%

DETERMINATION:

1. Monthly payment required to amortize a loan of $43,210 in 212 months at an annual rate of 7-1/2%

$368.38

2. Amount of reduced loan having a monthly payment of $368.38 for 212 months at interest rate of 8%

$41,749

3. Increased Mortgage Interest Payment: $43,210 - $41,749

$1,462

D. Partial acquisition.

1. When the displacement or the replacement dwelling is located on a tract larger than normal for residential use in the area, the interest payment will be reduced to the percentage ratio that the respective acquisition price bears to the value of the part of the property normal for residential use property, except the reduction will not apply when the mortgagee requires the entire mortgage balance to be paid because of the acquisition and it is necessary to refinance.

2. Where a dwelling is located on a tract larger than normal for residential use in the area, the total mortgage balance will be reduced to the percentage ratio that the value of the residential portion bears to the before value for computational purposes. This reduction will apply whether or not it is required that the entire mortgage balance be paid.

E. Multi-use properties. The interest payment on the multi-use properties will be reduced to the percentage ratio that the residential value of the multi-use property bears to the before value.

F. Other highest and best use. If the dwelling is located on a tract where the fair market value is established on a higher and better use than residential and if the mortgage is based on residential value, the interest payment will be computed as provided in the appropriate sub-section above. If the mortgage is obviously based on the higher use, however, the interest payment will be reduced to the percentage ratio that the estimated residential value of the parcel has to the before value.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001.

24VAC30-41-500. Incidental expenses (closing costs incurred in purchase of replacement dwelling).

The incidental expenses payment is the amount necessary to reimburse the homeowner for the reasonable costs actually incurred incidental to the purchase of the replacement dwelling, but not for prepaid expenses such as prepaid real estate taxes, fire insurance, etc. Such costs include the following items if normally paid by the buyer:

1. Legal, closing and related costs, including those for title search and mortgage insurance, preparing conveyance instruments, notary fees, preparing surveys and plats and recording fees;

2. Lender, Federal Housing Administration (FHA) or Veterans Administration (VA) appraisal fees;

3. FHA or VA application fee;

4. Professional home inspection or certification of structural soundness when required by the lender;

5. Credit report;

6. Owner's and mortgagee's evidence of title, e.g., title insurance, (not to exceed the cost for the comparable replacement dwelling);

7. Escrow agent's fee;

8. State and local revenue or documentary stamps, sales or transfer taxes charged to record deed (not to exceed the costs for a comparable replacement dwelling);

9. Loan origination or assumption fees that do not represent prepaid interest;

10. Purchaser's points, but not seller's points, normal to similar real estate transactions; and

11. Such other costs as VDOT determines to be incidental to the purchase.

No fee, cost, charge or expense is reimbursable as an incidental expense when it is determined to be part of the debt service or finance charge under the Truth in Lending Act. Except when the replacement housing amount is paid into escrow, the combined total of the payments under this section will be claimed and paid in a lump sum.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.; 49 CFR Part 24.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001; amended, Virginia Register Volume 21, Issue 13, eff. April 6, 2005.

24VAC30-41-510. Owner-occupant of 90 days or more who rents.

A. An owner-occupant eligible for a replacement housing payment under this section who elects to rent a replacement dwelling is eligible for a rental replacement housing payment. The amount of a rent supplement also will not exceed the amount the displaced family would have received had the family purchased replacement housing.

B. The payment is to be computed and disbursed in accordance with the provisions of 24VAC30-41-520, except that the present rental rate for the displacement dwelling will be the economic rent.

C. An owner-displacee retains eligibility for a replacement housing payment if replacement housing is purchased and occupied within one year after the date of final payment is received for the acquired property. Further, eligibility to submit a claim for relocation benefits extends for 18 months from the date of final payment for the acquired property. An owner who initially rents replacement housing may later purchase and qualify for a replacement housing payment. The total amount of the rent and the purchase supplements, however, will not exceed the amount that would have been received if the displacee had initially purchased replacement housing.

Statutory Authority

§ 25.1-402 of the Code of Virginia; 42 USC § 4601 et seq.; 49 CFR Part 24.

Historical Notes

Derived from Virginia Register Volume 18, Issue 3, eff. November 21, 2001; amended, Virginia Register Volume 21, Issue 13, eff. April 6, 2005; Volume 30, Issue 26, eff. October 1, 2014.

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