Procedures for Purchasing a Membership in Potomac Heights

General Policy Statement

Potomac Heights Cooperative Housing (PHCH) establishes the following policy to define the qualifications to become a member of the cooperative, handling of confidential applicant information, and our non-discrimination practices.

Confidential Information

All information provided to PHCH in the process of applying for membership in the cooperative is confidential. The applicant's information is accessible to the administrative staff and the Vice President of the Board of Directors who serve as our membership officer. An overview of an applicant's information is discussed when an application is presented for approval by the Board if Directors.

Upon approval for membership an applicant's information becomes part of their confidential membership record.

If an applicant is turned down for membership their application is retained for a period of 12 months, remains confidential and then ultimately destroyed.

PHCH Does Not Discriminate

PHCH does not discriminate based upon race, color, sex, national origin, religion, family status, physical disabilities/handicap, martial status, age or lawful source of income.

Membership Approval Process

1. New Membership - Individual

   Complete and sign the application, provide proof of income, attend the membership orientation in-person

2. New Membership - Joint

   Complete and sign one joint application, provide proof of income for both parties, attend the membership orientation in-person

3. Add-On Membership

   Complete and sign the add-on membership application. Both the existing member and the applicant to be added must attend the membership orientation in-person

4. Inherited Membership

   Complete and sign a membership application, provide proof of income, attend the membership orientation in-person

Approval Criterions

PHCH considers a number of different criterions in deciding whether to approve membership or not. Those criterions are:

• Income
• Prior housing information (rental history, mortgage history, history of HOA dues, etc.)
• Credit history
• Financial obligations
• Your Public Record(s)
• The validity of the information you provide on your application
• The number of people intending to occupy the dwelling
• Verification of your identity with a valid non-expired US Government issued ID

Reasons to deny an application for membership:

• Pets (number or unacceptable breeds)
• Prior evictions, foreclosures, debts to other communities
• Information contained in your public record(s)
• Poor credit history
• Excessive financial obligations
• Not sufficient income or non-verifiable source of income
• False or missing information on the application
• Does not complete the entire membership process
• Number of occupants exceeds “reasonable” occupancy limits
• Poor reference from a past landlord (unpaid rent, damages, etc.)
• Unable to provide positive identification

Financial Qualifications

To ensure that applicants becoming members will have the ability to pay the monthly obligations to PHCH as well as reasonable living expenses for a PHCH dwelling we have established a maximum debt-to-income ratio and a minimum disposable income threshold.

1. The maximum Debt-to-income Ratio for an individual applicant or joint applicant is 55%.
2. The minimum calculated Disposable Income for any applicant(s) must be at least $1,000 per month.

Applicants are required to provide proof of income

1. Only lawful, verifiable income is acceptable.
   1. This includes verifiable government subsidized forms of income. Examples of such income are social security, court ordered child support, court ordered spousal support. or food and healthcare vouchers.
   2. Those who receive pay from an employer please provide copies of your two most recent paystubs.
   3. We require those applicants who receive income from self-employment, your family's business, rental income; or any other income that is not received in the form of a regular paycheck to complete an IRS Request for Transcript of Tax Return, form 4506-T. Your tax transcripts will be mailed directly to PHCH.
   4. The debt-to-income calculations for individuals receiving income from sources other than a regular payroll check will be considered the average of the income reported to the IRS in the most recent tax years.
2. If you are self-employed we may require additional information such as business license and Tax ID Number.

PHCH Reviews Your Credit Report

PHCH obtains and reviews the credit report of all applicants.

1. Any debt with an outstanding balance listed on your credit report is included in your debt-to-income calculation
   1. PHCH calculates an estimated minimum payment for debts with no listed minimum payment, such as student loans or collection items. Minimum payment is calculated as 2% of the balance owed.
   2. Student loans in deferral at the time of application are included in your debt-to-income calculation because they will one day affect your ability to pay your obligations to PHCH.
   3. The full payment amount of any joint debt is included in the debt-to-income calculation.

PHCH Reviews Your Public Records

PHCH reviews your public records as well as the public records of anyone age 18 and over who will reside in your home.

We will not approve membership when the applicant or any family member age 18 and over had a public record of criminal behavior involving charges or convictions for crimes involving:

• violence against people or property,
• illegal possession of weapons,
• illegal substance use or sale,
• sexual offenses,
• theft,
• or fraud.

Membership Orientation

All parties who will be listed on the membership certificate are required to attend a membership orientation. Orientation for prospective members is offered once or twice each month based upon the number of pending applications. Orientation usually lasts about 60 minutes.

Transfer of Membership

From time-to-time an existing member may wish to transfer their membership to a different address upon the sale of their current membership. This is permitted when the following conditions are met:

1. Owning more than one share is not permitted. The existing shares must be sold and the buyer (new member) must have gone to settlement.
2. Only members who have been in-good-standing for the previous twelve (12) months will be permitted to transfer their membership.

   Note: In-good-standing is defined as paying the monthly operating payment by the first calendar day of each month, not violating any by-laws, not violating any rules or regulations.

3. The member has 120 days from the sale of their current membership to go to settlement on a new address. PHCH will waive the membership fee when transferring a membership from one address to another. The settlement fee and real estate property tax on the new address remain due at the time of settlement on the new address.