Programs aim to aid low-wage homebuyers

| | Comments (0) | TrackBacks (0)

The Arizona Republic
By: Peter Corbett
August 24, 2010

Julianna Martinez feels blessed to be in her renovated home.

She and her children earlier this month moved in to a three-bedroom Tempe home that she bought with the assistance of the Tempe Community Land Trust.

Scottsdale is starting a similar land trust aimed at helping residents buy refurbished homes.

Martinez said it took her nearly four years to save up enough money to qualify for the $154,000 land-trust home, but it has all been worth it.

"It's not a dream come true," he said. "It's a miracle."

Martinez, 45, is an instructional assistant in the Kyrene School District. She has four children, ages 15, 16, 18 and 20, with the two youngest still at home.

They had been homeless for a while but more recently lived in an apartment complex that cost her more in rent than she will pay for her mortgage. The land trust, administered by the non-profit Newtown Community Development Corp., works like this:

An income-eligible homebuyer gets pre-approved for a bank loan. In Scottsdale, a buyer with a four-person household could make no more than $53,300 annually to be eligible. A single buyer could have an income less than $37,350.

A buyer identifies a home within their price range that is then reviewed by Newtown. If it checks out, Newtown buys the home and renovates it. The eligible buyer agrees to buy the home from Newtown once the renovation is complete.

Newtown sells the home, but the buyer leases the land it sits on for 99 years. The buyer, if they choose to move, must agree to sell the home back to Newtown, which can then resell it as another affordable home.

"It's a way of creating a stock of permanently affordable homes for lower-wage workers," said Allen Carlson, Newtown's executive director.

It's also a way of stabilizing or improving a neighborhood, he said.

After extensive renovation, averaging about $50,000 each, the homes typically are among of the best in a neighborhood, Carlson said.

Newtown contractors install energy-efficient windows, appliances, air-conditioning and water heaters. They do structural improvements, paint, weatherize, install new cabinets, flooring and plumbing fixtures.

Since 2002, Newtown has renovated 46 homes in Tempe and Chandler. It also has added a land trust in Glendale to assist buyers there.

In Scottsdale, its first-year budget will be $315,866. The money is coming from a grant for a U.S. Housing and Urban Development fund, Carlson said.

The goal is to renovate four homes in the first year, he said.

All the Scottsdale homes must be south of Indian Bend Road in one of three ZIP codes: 85250, 85251 and 85257.

There is also assistance of up to $10,000 for the down payment.

Interested residents can contact Newtown at 480-517-1589 or Michelle Albanese, Scottsdale community-assistance manager, at 480-312-2309.

Jonathan Miller of Realty Executives in Scottsdale, who has worked with land-trust buyers, said the program has been successful in making homeownership more affordable.
He said the program's default rate for the local buyers is nearly zero.

Carlson said the land trust works with buyers to make sure they stay current on their mortgages.

0 TrackBacks

Listed below are links to blogs that reference this entry: Programs aim to aid low-wage homebuyers.

TrackBack URL for this entry: http://blogs.cfed.org/cgi-sys/cgiwrap/cfed/managed-mt/mt-tb.cgi/1909

Leave a comment

About this Entry

This page contains a single entry by CFED published on August 25, 2010 3:32 PM.

Which cities are most willing to tackle education reform? was the previous entry in this blog.

Upside Down is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.