Community Development Block Grant
Elizabeth, NJ - Mayor J. Christian Bollwage
First Time Homebuyer Program
The First Time Homebuyer Program provides both educational and financial assistance to eligible low- and moderate-income residents of Elizabeth, enabling them to purchase a home of their own. With CDBG funds and the support of several local organizations, the Program provides first-time home buyers with readiness seminars and financial assistance to cover two percent of their purchase price, plus closing costs - up to $10,000.
Over 400 persons attended the first two seminar series, which were held in October 1998 and March 1999. The series is conducted in both Spanish and English, with materials distributed in both languages as well. Topics covered included:
City officials and local service providers working together have determined that the two biggest barriers to homeownership that low- and moderate-income residents of Elizabeth face are credit problems and a financial gap - the inability to save money for down payment and closing costs. The educational seminars were designed to increase the participant's credit knowledge; the financial assistance was designed to address the financial gap. To be eligible for financial assistance, the home buyer must meet the HUD definition of a first-time home buyer, have an income which does not exceed 80 percent of median income, and complete the readiness seminar series. No repayment is necessary until the house is sold or the title is transferred. Rents must remain affordable for five years, based on HUD established rents.
In addition, the home buyers are eligible for renovation assistance. The City will provide a grant up to 25 percent of the rehabilitation costs if the homeowner covers the remaining 75 percent - and that 75 percent can be folded into the first mortgage.
The First Time Homebuyer Program involves a strong public-private partnership. Summit Bank pledged $1 million of its loan pool to Elizabeth residents in the form of below-market-rate loans and made substantial contributions to the educational series, including the cost of running credit reports for all participants. Community Access Unlimited, a local service provider, offered space and logistical support for the seminars. The Urban League provided individual credit counseling and arranged for speakers. Bridgeway House, another local provider agency, helped to prepare materials and assisted with registration. The City of Elizabeth used CDBG funds to support its contributions, which included providing logistical support for the seminars and sponsoring the financial assistance portion of the Program. All of the organizations were involved in planning the effort.
Contact: Susan J. Dimetros, Community Development Program Director, (908) 820-4072
The United States Conference of Mayors
J. Thomas Cochran, Executive Director
Copyright ©1999, U.S. Conference of Mayors, All rights reserved.