Newark program hopes to turn low-income residents into homeowners

Posted Jul 18, 2020

Three Section 8 recipients will soon be able to use their vouchers to pay their mortgage on a home as part of a pilot program in Newark.

It is one of the first programs to be rolled out under the city’s newly established land bank, a soon-to-be-created online database of vacant or abandoned properties that are up for sale. Invest Newark, a nonprofit whose sole client is the city, operates the land bank by being able to acquire property on the city’s behalf.

The Newark Housing Authority will also assist with the Section 8 Homeownership Conversion Program, which aims to increase homeownership for Newark residents regardless of income level.

“Through this partnership with Invest Newark and the Newark Housing Authority, numerous residents will enjoy the independence and empowerment of achieving the American Dream of home ownership,” said Newark Mayor Ras Baraka. “At the same time, it achieves other goals of the Land Bank: transforming blighted properties, restoring our city’s economic strength and reviving neighborhoods.”

The city transferred the title of the three properties to Invest Newark, formerly known as the Newark Community Economic Development Corporation. The properties will be rehabilitated by three local developers or contractors and then sold to qualified Section 8 recipients through a lottery process for $190,000 with a 20-year, 4% interest mortgage.

The Section 8 voucher will then be used to help pay the mortgage.

Invest Newark is still in the midst of acquiring more property and hopes to expand the program once it has more inventory. The nonprofit’s agreement with the city to act as its agent and acquire property was just finalized in April

“The plan is for another 100 or 150 families to go through the same process for another 100 to 150 properties,” Invest Newark President and CEO Bernel Hall told NJ Advance Media.

The Newark Housing Authority will start opening the lottery process to pre-qualified residents in the coming weeks.

“It’s a way to build wealth by building equity,” Newark Housing Authority Director Victor Cirilo told NJ Advance Media. “And we’re working with folks who wouldn’t otherwise have the knowledge on how to become homeowners.”

For this pilot program, local minority or women-owned business enterprises will contract with Invest Newark to rehabilitate the homes, said Newark Economic and Housing Development Director Allison Ladd. The process will ultimately revitalize neighborhoods and grow the city’s tax base while avoiding gentrification, officials say.

“Owning a home is the cornerstone of the American Dream, providing families with emotional and financial stability as it builds wealth,” said Ladd. “This exciting and innovative Land Bank project will help to create strong, stable and safer communities.”

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