Encouraging the Sale of Foreclosed or Vacant NYC Homes with Forgivable Home Loans
up to $80,000 and Homebuyer Counseling
Loans Targeted to the North Shore Neighborhood in Staten Island
NYC Deputy Mayor Robert K. Steel, NYC Department of Housing Preservation and Development (HPD) Commissioner Mathew M. Wambua, U.S. Department of Housing and Urban Development (HUD), and The New York Mortgage Coalition joined City Council Speaker Christine Quinn and Staten Island Council Member Deborah Rose today to announce the launch of the NSP2 Buyer Assistance Program. The program grants qualified homebuyers up to $80,000 in forgivable loans toward the purchase of foreclosed or vacant homes in eligible neighborhoods in Brooklyn, Queens and Staten Island. Housing counseling and homeowner training for participants will be provided through local program partners. The eligible neighborhoods were selected based on HUD criteria used to identify the neighborhoods which have been most adversely impacted by the mortgage foreclosure crisis of recent years.
This program was created under the Bloomberg Administration’s New Housing Marketplace Plan (NHMP). The NHMP, launched by Mayor Bloomberg in 2003, is a multibillion dollar initiative to finance 165,000 units of affordable housing for half a million New Yorkers by the close of the 2014 fiscal year. To date, the plan has funded the creation or preservation of more than 125,700 units of affordable housing across the five boroughs.
“HUD’s investment in New York City’s via the NSP2 program is a key component in Mayor Bloomberg’s efforts to help reverse the deleterious effects of foreclosure on our neighborhoods,” Deputy Mayor Robert K. Steel said. “The single-family foreclosure crisis has significantly impacted neighborhoods across Brooklyn, Queens and Staten Island, and stabilizing these communities is critical to New York City’s economic recovery. HPD’s efforts in securing this funding and working with the NY Mortgage Coalition in creating this initiative will help make homes affordable for qualified buyers looking to put down roots in these neighborhoods.”
“Stabilizing communities with high foreclosure rates is the primary mission of the Neighborhood Stabilization Program,” said HUD Regional Administrator Adolfo Carrión. “To accomplish this, we need to work closely with our partners who have the resources, energy and commitment to turn distressed communities around. So I applaud the City Council, HPD and the NYMC for their effort in giving families an opportunity to be part of the American Dream and re-energizing our neighborhoods as well.”
“Investing in our neighborhoods is essential if we are to preserve them. The Neighborhood Stabilization Program helps us to educate and empower families, allowing those who qualify to make affordable investments in areas of Brooklyn, Queens and Staten Island that have borne the brunt of small home foreclosures,” said HPD Commissioner Mathew Wambua. “I am proud to work with HUD, the New York Mortgage Coalition and local partners to help New Yorkers become educated homeowners. NSP gives us the wherewithal to promote financially responsible homeownership that, thanks to the hard work and dedication of our partners, is sustainable. Through our joint, concerted efforts, we will overcome the foreclosure crisis in our neighborhoods and begin to rebuild our communities.”
“The single family foreclosure crisis has had a major impact on this city,” said Council Speaker Christine C. Quinn. “We’re doing everything we can by working with local non-profits to keep people in their homes. But when the homes are abandoned or vacant, we need to bring in new families to maintain the stability of the neighborhoods. The Buyer Assistance Program is a boon for New Yorkers and I want to congratulate Commissioner Mathew Wambua and HPD on this program to help homebuyers purchase foreclosed homes. “
The program is funded through the Department of Housing and Urban Development’s Neighborhood Stabilization Program 2 (NSP 2). HPD was awarded a $20 million NSP2 grant from HUD and has allocated $4 million to this Buyer Assistance Program. At the inception of NSP2, HPD assessed the level of foreclosure activity in each eligible census tract between the 2007-2009 time period. HUD determined an estimated number of mortgages at the start of foreclosure and/or in danger of foreclosure. According to this data roughly 8,133 total mortgages were in danger of foreclosure in eligible areas. Of these vulnerable mortgages 5,780 mortgages were in Queens, 1,656 mortgages in Brooklyn and 697 mortgages in Staten Island. These amounts do not include vacant homes or homes already in foreclosure.
NSP2 builds on HPD’s NSP1 Real Estate Owned program which purchases and rehabilitates foreclosed one- to four-family homes to be marketed at affordable prices. For more information on HPD’s NSP 1 programs: http://on.nyc.gov/fu36e1. Under the new NSP 2 Buyer Assistance Program, prospective homebuyers who wish to participate must meet HUD income requirements and seek to purchase foreclosed or vacant homes in program eligible neighborhoods. The home to be purchased must also be the homebuyer’s primary residence. Rental units in two, three, and four unit homes purchased under the NSP2 Program will be subject to rent and income restrictions, providing more affordable rental units in Queens. For NSP2 Program details and property qualifications: http://nymc.org/nsp2.
“Those who act now on this time-sensitive program will reap the most benefit from a revitalized housing market,” stated Ken Inadomi, Executive Director, NYMC. “The purchase-rehab loan program makes it easier to finance a fixer-upper, since it requires only a three-and-a-half percent down-payment.”
The New York Mortgage Coalition (NYMC) is a nonprofit collaboration of financial institutions and community housing agencies dedicated to helping low to moderate-income families. The New York Mortgage Coalition will serve as administrator for the NSP2 Program. NYMC will work with partners to identify eligible foreclosed homes as they come on the market making it possible for buyers to have a “first look” as properties become available. NYMC will work directly with neighborhood partners to coordinate initial home inspections and attend all closings.
The New York City NSP2 Buyer Assistance Program participants will select one of the program’s qualified partners as their NSP2 counseling agency. Partners will provide one-on-one mortgage counseling, eligibility certification and assistance in the loan pre-approval process. There are multiple HUD-approved housing counselors in each borough. Families may choose to work with any participating agency convenient to them. Participating agencies in Staten Island are the Neighborhood Housing Services of Staten Island and the Northfield Local Development Corporation.
"While it's unfortunate we're facing high numbers of foreclosed homes in our communities, this program is a vehicle that can help many people realize their dream of becoming a homeowner for the first time,” said Council Member Deborah Rose. “This program will not only help new homeowners but it will also help our neighborhoods that have been most effected by this economic downturn."
To be eligible, the purchasers’ income cannot exceed 120% of the Area Median Income and they are required to receive at least 8 hours of homeownership counseling from one of the 10 HUD-certified community-based homeownership counseling partners working with the New York Mortgage Coalition. These partners will provide additional one-on-one counseling to help the purchasers to secure a mortgage. A buyer in the program will have access to some homes before they go on the market, and may be able to obtain a below-market price. Qualified participants must purchase qualified homes in targeted neighborhoods. If a home requires repairs, eligible purchasers may apply for 203K or SONYMA Remodel New York mortgages which permit owners to borrow funds for repairs.
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About the US Department of Housing and Urban Development (HUD):
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and http://espanol.hud.gov. You can also follow HUD on twitter @HUDnews, on facebook at www.facebook.com/HUD, or sign up for news alerts on HUD’s News Listserv.
About the NYC Department of Housing Preservation and Development (HPD)
HPD is the nation’s largest municipal housing preservation and development agency. Its mission is to promote quality housing and viable neighborhoods for New Yorkers through education, outreach, loan and development programs and enforcement of housing quality standards. It is responsible for implementing Mayor Bloomberg’s New Housing Marketplace Plan to finance the construction or preservation of 165,000 units of affordable housing by 2014. Since the plan’s inception, more than 125,300 affordable homes have been created or preserved. For more information, visit www.nyc.gov/hpd
About the New York Mortgage Coalition (NYMC)
The New York Mortgage Coalition (NYMC) is a nonprofit collaboration of financial institutions and community housing agencies dedicated to helping low to moderate-income families in New York, Long Island and Westchester County achieve the dream of responsible homeownership.
NYMC provides financial workshops, pre-purchase counseling, and access to competitive, fixed-rate loans and payment assistance in the form of closing cost grants and down payment subsidies. NYMC also plays a leading role in preserving homeownership for those families facing foreclosure. The foreclosure prevention programs of our ten neighborhood-based agencies help families retain their homes through informational workshops and one-on-one counseling.