What is Affordable Market Value (AMV)?
Affordable Market Value is used as a tool by the Federal Deposit Insurance Corporation (FDIC) to make housing more affordable for low-income buyers. The affordable market value of a property held for low-income households is below the estimated market price of a property. Factors usually considered include the lower income buying requirement, the environmental condition of the property, anticipated operating expenses, and financing options.
Generally, the market price of a property is the price a buyer is willing to pay, not the valuation based on the property by the seller. In return for buying a property at a price below the average market value, purchasers acknowledge making units available to low and very low-income families at an affordable price. The rent and income limitations are created to guarantee that, for the next 50 years, the property serves households in need of affordable housing. One purpose of FDIC is to serve communities with their home needs, which is the reason behind the Affordable Housing Program (AHP) creation. It is intended to help low and moderate-income households buy residential properties earlier owned by failed banks. When a financial institution crashes, the FDIC is credited with assuring that the institution’s assets are sold off promptly. It brings in a leading agent to take over the operations and uses assets managers and experts to value assets and sell those assets off. With the help of the network of state housing agencies, the FDIC monitors and assures consent with the Land Use Restriction Agreements that oversee the use of single and multi-family properties in the Affordable Housing Program.