June 8, 2009
Owning a home is within reach for some with new program
By Councilmember Trinity Donovan
Individuals priced out of the Chandler housing market have something to look forward to. Affordable homeownership opportunities are now available through the newly created Chandler First Time Homebuyer’s Program, a partnership between the City of Chandler and the Tempe based non-profit, Newtown Community Development Corporation.
This program enables individuals to purchase homes at a considerably reduced price because they only need to finance the cost of the structure. Newtown retains ownership of the land in a Community Land Trust and leases it out to homebuyers who in turn have exclusive rights over it. This program is not only beneficial to individuals who purchase the homes but also to the community as a whole. It ensures permanent affordability of homes, while reducing the number of foreclosed properties, therefore fostering more sustainable neighborhoods.
The City of Chandler received funding for the program through the U.S. Department of Housing and Urban Development (HUD) Neighborhood Stabilization Program (NSP). City staff worked diligently to prepare a proposal that matches HUD guidelines for addressing the effects of abandoned and foreclosed properties. Based on a formula that includes the number and percentage of home foreclosures in the city; the number and percentage of homes financed by sub-prime mortgages; and the number and percentage of homes in default or delinquency, Chandler was awarded $2,415,100.
Of this funding, $1,468,500 will be used specifically to help income-qualified families purchase and rehabilitate foreclosed homes. As many as 17 foreclosed properties in the central Chandler area, which was identified as the hardest hit by foreclosures could be purchased. The boundaries are Elliott Road and Chandler Boulevard; Arizona Avenue and Alma School Road.
Qualifying applicants need to be first time homebuyers, which by HUD standards means that they can’t have owned properties in the past three years. Also, total yearly household income needs to fall between $55,320 for an individual to $79,080 for a family of four. Another requirement is that the houses need to be owner-occupied and not rented out. If the homeowners decide to sell the house, they are entitled to a profit margin of 25 percent of the appreciation. The remaining 75 percent stays with the property, thus making it affordable for future buyers.
Homeowners are allowed to live in their houses indefinitely and are entitled to pass them down to heirs. Unlike rentals, the Community Land Trust model provides the benefit of stable monthly payments and security from eviction.
Guidance and support is available throughout the process by Newtown Community Development Corporation. Interested parties can inquire about the program by attending an orientation session. Potential buyers can receive counseling to pre-qualify for a 30-year fixed loan. A minimum down payment of one percent is also required at the time of purchase, although Newtown offers a generous program to assist those in need. The Individual Development Account program matches up to $15,000 of the individual’s contributions and is forgivable after living in the house for five years.
Newtown will also rehabilitate the house to improve its aesthetics and make it energy efficient. Major systems such as water, electric, heating and air conditioning units are oftentimes replaced.
The Chandler First Time Homebuyer’s Program is ready to be rolled out to our community. I encourage interested parties to call the City’s Community Development Division at 480-782-4320 to inquire about the registration process. Further information is also available on the City’s Web site as well as on Newtown’s Web site at www.newtowncdc.org.
This program is a long-term investment that will provide exciting opportunities for first-time buyers and stabilize the neighborhood. |