What are the Key Differences Between Right-of-Occupancy and Part-Ownership Housing

When it comes to finding a home, understanding the different types of housing options available is crucial. Two popular choices are right-of-occupancy and part-ownership housing. While both offer unique benefits, they cater to different needs and financial situations. In this article, we will explore the key differences between these two housing options to help you make an informed decision.

Understanding Right-of-Occupancy Housing

Right-of-occupancy housing, known as “asumisoikeusasunto” in Finnish, is a unique form of housing that combines elements of renting and owning. To secure a right-of-occupancy home, you need to apply for a queue number from the Housing Finance and Development Centre of Finland (ARA). Once you have this number, you can search for available homes through our housing search and submit your application. To qualify for right-of-occupancy housing, you must be an adult without owning a home or having sufficient assets to purchase one. However, individuals over 55 years old are exempt from asset restrictions. Importantly, your income does not affect your eligibility for a right-of-occupancy home. If multiple applicants meet the criteria for the same home, the one with the lower queue number will be given priority.

Exploring Part-Ownership Housing

Part-ownership housing, on the other hand, allows you to purchase a share of a property, typically ranging from 25% to 75%. This option is ideal for those who want to step onto the property ladder but may not have the financial means to buy a home outright. Over time, you can increase your ownership share, eventually owning the property in full. With part-ownership, you will need to secure a mortgage for the share you are purchasing. Additionally, you will pay rent on the remaining share owned by the housing association. This dual payment structure can be beneficial as it allows you to gradually increase your investment in the property while enjoying the benefits of homeownership.

Financial Considerations

One of the main differences between right-of-occupancy and part-ownership housing is the financial commitment required. Right-of-occupancy housing requires an initial payment, typically 15% of the property’s value, which grants you the right to live in the home indefinitely. This payment is refundable if you decide to move out, making it a relatively low-risk investment. In contrast, part-ownership housing requires a more significant financial commitment upfront, as you are purchasing a share of the property. Additionally, you will need to secure a mortgage for your share, which involves meeting the lender’s criteria and potentially paying interest over time. However, part-ownership offers the potential for property value appreciation, which can be a significant financial benefit in the long term.

Flexibility and Control

Right-of-occupancy housing offers a high degree of flexibility, as you are not tied to a mortgage and can move out with relative ease. This option is ideal for those who value flexibility and do not want the long-term commitment of a mortgage. Additionally, right-of-occupancy homes are often managed by housing associations, which handle maintenance and repairs, reducing the burden on residents. Part-ownership housing, while offering the potential for full homeownership, comes with more responsibilities. As a part-owner, you will be responsible for maintenance and repairs, as well as any mortgage-related obligations. However, this option provides greater control over your living environment and the potential to build equity over time.

Eligibility and Application Process

To apply for right-of-occupancy housing, you must first obtain a queue number from ARA. After securing this number, you can search for available homes through our platform and submit your application. Eligibility criteria include being an adult without owning a home or having sufficient assets to purchase one. Income does not affect your eligibility, and individuals over 55 are exempt from asset restrictions. For part-ownership housing, the application process involves securing a mortgage for the share you wish to purchase. You will need to meet the lender’s criteria, which may include income and credit checks. Once approved, you can proceed with purchasing your share and moving into your new home. This option is ideal for those who are financially stable and looking to invest in property over time.

Conclusion

Both right-of-occupancy and part-ownership housing offer unique benefits and cater to different needs. Right-of-occupancy housing provides flexibility and a lower financial commitment, making it ideal for those who value ease of living and minimal risk. Part-ownership housing, on the other hand, offers the potential for full homeownership and property value appreciation, making it suitable for those looking to invest in their future. At Avain Asunnot, we are committed to helping you find the best housing option for your needs. Whether you are interested in right-of-occupancy or part-ownership housing, our team is here to guide you through the process and ensure you find a home that meets your requirements. Contact us today to learn more about our housing options and start your journey towards finding your perfect home.