Newark employees, teachers can receive 'forgiveable loans' under new housing program

By Naomi Nix | NJ Advance Media for NJ.com
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on February 05, 2015

Address: 986-988 18th Avenue, Newark, NJ Ward: West Minimum Bid: $35,000 Deposit: $7,000

 

NEWARK — Newark Mayor Ras Baraka had one message for city employees and teachers: buy a home in one of our troubled neighborhoods and we will help you pay for it.

The city announced today a new housing program which gives city employees and teachers forgiveable loans if they buy a home in one of the city's "model neighborhoods" in the South and West Wards.

"What we want them to do is to choose Newark, live in Newark, and make Newark their community," Baraka said during a press conference at City Hall.

Under the program, employees could purchase a city-owned abandoned home or a private home and receive a $5,000 loan for closing costs and/or a $25,000 loan for rehabilitation costs.

The loan is forgiven by a rate of 20 percent for every year of occupancy for the $5,000 loan and by 10 percent each year for the $25,000 loan, according to the city.

To start, the program is funded by one million dollars in city funds that have been reallocated from the city's rental car tax and will be able to help between 33 and 38 people, according to the city.

In the future, the city may expand the program using money from the federal Community Development Block Grant Program, officials said.

The city is also considering offering 5-year tax abatements to program participants as well as opening it up to retirees.

Newark Teachers Union secretary Michael Dixon said the program will benefit students to see their teachers outside the classroom.

"They go to the movies they see their teacher," he said. "They go downtown shopping they see their teacher."

Officials said the initiative is designed to help add more employees to struggling neighborhoods and keep the money those workers spend in the city.

"It is essential that we live in the neighborhood that we serve," said Julio Colón, the city's director of real estate and housing.

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