Categories: Articles, Columnists, Harlem, Rev. Dr. Charles Butler,
Can anyone afford to buy a home in Harlem? Well, it does not seem very likely. Current fair market home values are no longer attainable for first-time low to moderate income families. Which simply means it is becoming increasingly difficult for anyone to purchase a home.
Yes, these are indeed frustrating times for many families who have decided they are ready to stop making the ridiculous high monthly rent payments. But do they have any recourse? One option you might want to consider is the Mitchell-Lama units in the area.
This is a unique type of cooperative housing program offered through New York City.
For more information regarding available units, you can go to www. Nyc.gov/hpd –look up Mitchell-Lama housing programs.
These are limited equity affordable coop units. One major drawback for most of these units is the extremely long time you will spend on the waiting list. Most buyers will tell me, they were on the waiting for as long as ten-fifteen years before finally having their name selected for a unit. This waiting period will allow you to save some additional money for making the purchase.
In the past, another major drawback to purchasing a Mitchell-Lama unit has been arranging the finances to complete the purchase. The finance options were limited to either making an all-cash transaction or applying for a personal loan. Most low-income families simply do not have $30-45k available for a cash purchase. Personal loans generally come with a significant higher interest rate around 9-12% and a shorter term of 5-7 years. Also, a personal loan is not a mortgage, so you will not be eligible for any of the grant programs or receive any mortgage benefits.
However, now New York City Department of Housing Preservation & Development (HPD) has approved some lenders willing to write mortgages on these units. The two lenders making mortgages available are Amalgamated Bank and Webster Bank.
You must be approved for the mortgage. The benefit of using either of these lenders is now first-time eligible buyers can also apply for the HPD’s Home First Down Payment Assistance Grant Program. This is a ‘forgivable loan’ provided the unit remains your primary residence for a specified number of years. This grant amount is 20% of the purchase price up to $100K. You will still need to put at least 3% of your own money into the purchase.
For many low to moderate-income prospective first-time buyers this is an excellent opportunity to enjoy the experience of homeownership. You still will be able to accumulate some equity but not much over the purchase price of your unit. However, the main value is no longer paying rent to your landlord which will undoubtedly continue to rise with each lease renewal agreement.
If you are interested in attending the workshop or have questions regarding the home buying process contact Rev.Dr. Charles Butler at (212) 281 4887 ext. 231 or email at cbutler@hcci.org.
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