New Foundations 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 become 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
