- Townhomes will be constructed on eight separate vacant parcels
- Sold to homebuyers at affordable prices for families at or below 80% of the area median income
- Subsidy will allow the homes to be offered at a purchase price below the construction cost and the market value, generating immediate equity
NCIF: $2.150MM in NMTC allocation
Industrial Bank: Participation- $2.15MM
This proposed residential development that will construct eight three-story townhomes, each comprised of two 3-bedroom and 2-bathroom family-sized units. The townhomes will be constructed on eight separate vacant parcels in the Fairmount neighborhood of Newark, NJ, a moderate-income census tract with low levels of homeownership.
Upon completion, the townhomes will be sold to homebuyers at affordable prices for families at or below 80% of the area median income (“AMI”). Project costs will be subsidized primarily by NMTC in addition to a $750,000 grant from the City of Newark Department of Economic & Housing Development and a $250,000 grant from the New Jersey Department of Community Affairs (“NJDCA”).
The project subsidy will allow the homes to be offered at a purchase price below the construction cost and the market value, generating immediate equity for the buyer. Additionally, since each townhome is a two-unit property, buyers can live in one unit and rent the other to establish rental cash flow to supplement their income and ability to service their mortgage debt.
In Newark, NJ, only about 20% of households are homeowners. This project will create affordable homeownership opportunities within a neighborhood predominantly consisting of renters with market rate home prices that are unaffordable to many area residents. Additionally, to prepare potential borrowers for home ownership, ULEC facilitates housing counseling programs via its Financial Opportunity Center, including credit repair counseling and homebuying advising with HUD-approved housing counselors, to ensure community participants are fully equipped with the right skills to manage their home finance effectively.
The synergy between this project and ULEC’s long-established homeownership counseling program provides an increased chance of success for the low-to-moderate income homebuyers who benefit from the project. Further, this project will contribute to wealth creation in the Low to moderate income community. Per ULEC, many of the borrowers will be from the African American community.