Clawback and negative equity

ooter

Does anyone know what the definitive situation is with affordable housing when it comes to negative equity?
I've looked through all the documentation I have from the time I got my affordable house and there's no mention of negative equity,only how the clawback works in a situation where the house is sold at a profit.
If the house is sold at below the value the house was bought for does the owner have to pay the lender (bank/local authority) the difference?
I'm sure I read somewhere before that affordable house owners are covered in these situations.
I know I could just ask the council but I'm afraid they might just fob me off or give me some spiel..

warrenaldo

I am assuming you are selling or looking into the possibility - otherwise negative equity doesnt really apply to you.

If the house is now worth less than YOU PAID for it (not what its market value was at time of the purchase).

Then when you sell, you will be required to pay back the full amount that you borrowed.

Assuming you bought for 200k. House was valued at 300k. You sell now for 150k. You still owe the bank 200k.

You will need to pay back the 50k. The Clawback means you wont have to pay back the further 100k - the council will lose out on this!

prettyboy81

I am in Affordable Housing apartment. I spoke to DCC regarding this & I got some documentation on it just can't find it at the mo...

But my memory serves me right, the DOE draft legalisation as a result of affordable home owners like myself going into negative equity. Basically if you are in negative equity the claw back does not apply was the bottom line...

ooter

thanks for the replies lads.
i rang the LA and they confirmed if i sell the house for less than my mortgage amount i'll have to pay back the difference..