A 'New Home' for an Incentive Program
The city has approved a program to lure new home buyers with cash incentives.
The City Council recently approved a measure that offers down payment assistance up to $5,000 to individuals or families who buy a home and live in the city. New London has just under 38 percent owner-occupied houses.
The "New Home New London" program, which was approved by the council earlier this month, will be funded this year with $100,000 from the Housing Community Development fund and will pay home buyers up to $5,000 toward the purchase of an owner occupied, one- to four-family house.
The assistance will be in the form of a deferred loan, which will be forgiven as long as the property is not sold or transferred within five years.
Pero and Deputy Mayor Adam Specace proposed such a program nearly three years ago.
"It's in our Plan of Development, to strive to increase owner-occupied homes with the goal of improving property values,'' Pero said.
He said he met earlier this year with the city manager and other members of the staff to see if the city could offer a monetary incentive for people to live in the properties they buy.
"We had these recurring dollars. It sounded like it went together perfectly,'' he said.
The funds in the Housing Community Development Fund are used to develop activities including community festivals and housing conservation programs. The account earns about $20,000 a year in income.
It is not the only financial incentive program to entice people to live in urban areas. The state has an Urban Rehab program in which municipal workers who buy in the city can get up to $20,000 in low interest loans.
The maximum household incomes served by the program will be 120 percent of the area median income, or incomes up to $68,100 for a single person and up to $128,420 for a family of eight. No more than 40 percent of the funds will be used for single-family properties.
The city also will be looking for local lenders as partners to help buyers with the loan process.