The New Foundations Program is a streamlined, HPD homeownership program established in 2000 to develop infill sites in neighborhoods that lacked home ownership opportunities and to encourage small developers and contractors to create affordable housing. It is a mixed-income program that seeks to maximize homeowner affordability and income diversity. At least one third of the units in each project must be affordable to households earning up to 80% of area median income (AMI). Greater consideration was given to projects that include additional tiers of affordability for households earning between 80% and 100% and between 100% and 130% of AMI.
Under the program, sponsors purchase city-owned land and construct one- to four-family homes and/or cooperatives/condominiums to provide as many affordable units as financially feasible for low, moderate and middle-income purchasers. Developers are responsible for assembling a development team to design, construct and market the homes. When the sponsor purchases the land, they pay $1,000/dwelling unit in cash and deliver a note and mortgage for the remainder of the land's appraised value ("Land Debt"). Construction financing is provided through loans from private lenders and developer equity. City, state and/or federal housing subsidies may be available, on a project-by-project basis, to enhance purchaser affordability. Such subsidies, if applied, are anticipated to be used during construction, or to write down the cost of a home, or as down payment assistance, as appropriate. Additionally, the City provides UDAAP Real Property Tax Exemption pursuant to Section 696 of the General Municipal Law.
Upon construction completion, the developer sells the homes to families who have agreed to occupy the homes purchased. At least one unit in the home must remain owner-occupied for 15 years following the initial purchase of the house from the developer. The Land Debt and City subsidy are apportioned pro rata to each home built. Purchasers will repay the Land Debt and City subsidy attributable to their homes, by delivering a subordinate mortgage to the City. The sum evidenced by the note declines from years 6 to 15 by one-tenth of the original principal sum for each year of owner-occupancy. Upon resale or refinancing, initial purchasers are required to make payments to the City out of resale or refinancing profits.
As development opportunities through the New Foundations Program became available, Requests for Proposals will be posted below. Developers seeking more information about this program may contact Lenny Seif at (212) 863-6421.
If you are looking for an affordable apartment or home, please visit our apartment listings. Click here for HPD’s list of current HPD's lists of affordable homes. To request a homeownership kit, call 311