New affordable-housing program in NL crosses neighborhoods
New London — A $2.6 million state-funded program to bring back derelict buildings in the city and make them affordable for middle-income families is quietly coming to full flower this month, with the first of the homes being put up for sale.
The Home New London program, believed to be the most extensive of its kind in the city, is expected to renovate at least 22 one- and two-family homes in New London over a three-year period. The program, led by Eastern Connecticut Housing Opportunities with perhaps the help of other affordable-housing agencies in the future, is not to be confused with House New London, a project coordinated by the Renaissance City Development Association in the Belden Street neighborhood a few years ago that initially targeted about 13 homes.
The first two homes in the latest program, at 126 Plant St. and 55 Ledyard St., just went on the statewide Multiple Listing Service a little over a week ago, resulting in nine showings last weekend and a total of five contract offers, said Peter Battles, executive director of ECHO.
"We're selling houses at full market value," Battles added.
The trick to make it affordable, however, is that ECHO is offering a second forgivable mortgage covering 20 percent of the purchase price that will help keep down the cost of home financing. The mortgage also makes it unnecessary for middle-income owners to pay for private mortgage insurance, which can add $100 a month to the cost of owning a home.
"It's all New London," he said of the program. "No particular neighborhoods or areas."
Besides the Plant Street home, in a quiet neighborhood on the well-heeled south side of the city, and the Ledyard Street home near Interstate 95, ECHO has other buildings soon to go on the market, at 43 Williams St., 59 Georgiana St., 142 Squire St. and 258 Ledyard St. The Williams Street site is handicapped-accessible.
"It's very much scattered site," Battles said.
Still, Battles said ECHO wouldn't hesitate to renovate several homes in the same locale if they were available.
"If it made sense, we would go for it," he said.
The program, funded by the state Department of Housing, aims at increasing home ownership in the city, an issue that has long dogged officials looking to increase civic engagement. It also is intended to improve the city's aging housing stock by rehabilitating neglected and foreclosed-on buildings, including doing lead and asbestos abatement.
Eligible homebuyers must be Connecticut residents with good credit with income sufficient to afford a home but not higher than the median household income for the area ($75,700 for a family of four). The program is targeting first-time homebuyers or those who have not owned a home in at least three years, and anyone getting assistance will have to complete a homebuyer training course.
Battles said 22 is the minimum number of homes he expects to finish with the help of contractor MG2 of Voluntown, but the subsidy amounts he has paid so far to renovate buildings has boosted his confidence that the final number will be higher.
"I think we'll be able to do more than that," he said.
Battles showed off one of the Home New London properties last week, on Plant Street near the Mitchell College ballfields, as he described the program. Like many of the homes, it was in poor shape, requiring a new roof and siding, updated kitchens and baths, new flooring and updated heat and electrical work.
"It's a beautiful street, but this was a rotten tooth in the middle of it all," he said. "We very rarely find a place like this south of the hospital."
The three-bedroom, two-bath home is now on the market for $195,000. But with the 30-year second mortgage taken by ECHO, it will cost the buyer only $156,000.
The mortgage is fully forgivable after 30 years, while those who sell earlier will have to pay back some of the money on a pro-rated basis. The affordable-home deed requires owner occupancy and limits appreciation in the sale of the home to 3 percent a year.
Money for the program was approved by the legislature in 2014, and ECHO bought the first five homes the next year after its program was approved. The state Bond Commission approved funding early in 2016, and the grant closing occurred late that same year, but release of funds didn't happen until last month.
Additional monies were procured from lines of credit at Liberty Bank and Dime Bank, as well as from contributions by People's United Community Foundation, Frank Loomis Palmer Foundation, Dime Bank Foundation, Liberty Bank Foundation and the Chelsea Groton Foundation. The City of New London also gave out money as part of its lead-abatement program.
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