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Affordable Market Value - Explained

What is Affordable Market Value?

Written by Jason Gordon

Updated at April 18th, 2022

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Table of Contents

What is Affordable Market Value?How Does Affordable Market Value Work?History of Affordable Market Value (AMV)

What is Affordable Market Value?

Affordable market value (AMV) is a mechanism used by the Federal Deposit Insurance Corporation (FDIC) in the United States to make housing more affordable for buyers. It refers to the sale price of a property or housing unit sold through the FDICs Affordable Housing Program. The FDIC assigns affordable market value to properties considering the income of a family buying the property and not the appraised value of that property.

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How Does Affordable Market Value Work?

FDIC was established to solve the housing needs of communities, especially low-income families. Through the FDICs Affordable Housing Program, low-income families and homebuyers are able to access affordable properties. Affordable Market Value (AMV) as used by the FDIC takes into consideration the lower-income purchase requirement to assign a value at which housing units are sold. AMV differs from the appraised value of a property, it is often lower. Typically, AMV is the value placed on the property by FDIC and not the market value of the property (what buyers are willing to pay). Low-income families who purchase properties through the FDICs Affordable Housing Program must agree to rent out units of the multi-faceted apartment to low-Income individuals and households, and at affordable rents.

History of Affordable Market Value (AMV)

The Affordable Housing Program (AHP) was created as a response to the housing crisis of communities and especially low-income families. The FDIC helps families purchase properties and housing units previously held by failed banks at an affordable rate. The aim of FDIC was to see to the sale of residential properties of failed financial institutions in a prompt manner and at affordable rates to low-income families across the States. The goal of FDICs AHP is similar to the Resolution Trust Corporation (RTC), a corporation that was created to dispose of assets of failed financial institutions. FDIC primarily helped low-income families meet their housing needs by providing affordable housing held by failed banks.

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