The City of Newark in New Jersey held its first ever housing lottery for residents who wish to purchase a home for only $1.
Hopeful homebuyers attended the event today at Newark City Hall as a part of the Newark Homeownership Revitalization Program (NHRP), according to the City of Newark’s website.
“The Homeownership Revitalization Program is a new way to enable longtime Newark residents to become homeowners at costs that they can afford,” Mayor Ras J. Baraka said in a news release when the program was first announced in May.
THIS WAS THE AVERAGE COST OF AN AMERICAN HOME IN THE DECADE YOU WERE BORN
Residents of Newark who were eligible to enter the lottery had to meet specific requirements.
“You must be a Newark resident for [five] consecutive years or recently displaced,” according to the NHRP FAQ release issued by Baraka and the Municipal Council.
“Displaced residents must have also lived in Newark for at least five consecutive years, within the last 10 years, at the time of application.”
The release also noted that the future owner of these $1 homes must commit to living in the property for a minimum of 10 years.
If new homeowners decide to sell a property before the 10 years are up, the property will be taken by the City due to the deed restriction.
HOME BUYERS STRUGGLE IN 2023, BUT HOMEOWNERSHIP RATE COULD RISE IN 2024
In order to apply for the lottery, applicants cannot be current homeowners, city officials wrote in the release.
Applicants must then sign up with the Neighborhood Assistance Corporation of America (NACA) – a nonprofit organization which fights for “economic justice through homeownership and community action,” according to NACA’s Linkedin profile.
Qualified applicants are then placed in an in-person lottery.
The number of properties were “limited,” but city officials hope to acquire more homes and lots as the program grows.
“The lots will be used for the construction of one, two, three, and four family homes,” the release said.
MEDIAN SALE PRICE FOR US HOMES SAW BIGGEST JUMP IN OVER A YEAR
The program will not just provide future homebuyers with a $1 home, but will also help them prepare for homeownership.
“This program requires homebuyer counseling, creating well-informed owners with knowledge of how to successfully develop/redevelop their properties,” city officials noted in the release.
“Participants will gain an understanding of homeownership, including the borrowing process, their housing needs, home maintenance, household budgeting and more.”
The homes will require costs surpassing $1 due to required repairs and construction.
The cost of potential repairs will be paid by the homeowners, but they will receive “a low interest rate mortgage” to assist in the costs.
The average value of a home in Newark is $428,985 — a 6.6% increase over the past year, according Zillow.com.
Baraka’s office reported that only 25% of residents in Newark own their home and this program hopes to “enable longtime Newark residents to become homeowners at costs that they can afford.”
Fox Business reached out to the City of Newark for comment.
For more Lifestyle articles, visit www.foxbusiness.com/lifestyle.
Read the full article here