Newark NJ plan will revamp Section 8 vouchers to turn tenants into homeowners

[1srelluc]

Less than a quarter of Newark residents own their home, a basic means of building and preserving family wealth, stable housing, good credit, and the borrowing power to seize on opportunities in business, education, or other areas.

That’s compared to a statewide homeownership rate of 64%, and a particular concern for Newark in light of a Rutgers report in May that real estate prices are rising beyond the reach of many residents thanks to corporate investors snatching up single and multi-family homes.

So city officials are hoping to turn thousands of Newark’s low-income renters into homeowners, through a new program allowing recipients of Section 8 rent subsidies to use that money to help make mortgage payments instead.

“We need to build wealth through equity,” said Newark Housing Authority Executive Director Victor Cirilo, whose agency provides rental subsidies — and now mortgage subsidies — under the federal Department of Housing and Urban Development’s Section 8 program.

Newark has about 6,150 residents receiving Section 8 vouchers, Cirilo said, many of whom could become homeowners under the new program, which is known as Homeownership Through Public Housing Assistance, or HOT-PHA.

Last week, Cirilo joined Newark Mayor Ras Baraka and Neighborhood Assistance Corporation of America CEO Bruce Marks to announce that the Boston-based non-profit housing broker was launching the new program in Brick City.

The event included the first closing ceremony for a participant in the program, on a $185,000 single-family house on Cutler Street. Bank of America is involved as a lender.

We are committed to creating pathways for more of our Newark residents to become homeowners no matter their income level,” Baraka said in a statement. “This closing day is just one of many to come and we look forward to having numerous residents enjoy the independence and empowerment of achieving the American Dream of home ownership.”

The HOT-PHA program converts tenant-based Section 8 vouchers used to subsidize rents into Section 8 homeownership vouchers for mortgage payments. Additional benefits include no down payment, no closing costs or brokerage fees, and below-market rates depending on the buyer’s credit. As with Section 8 rent subsidies, homeowners contribute a maximum of 30% of their income to their monthly mortgage payment, with the housing authority sending the bank or mortgage company a separate check for the rest.

For Araselys Maldonado, who closed on her 3-bedroom house on Thursday, her share of the $1,253 monthly mortgage payment is $213. And now her money is paying for a property she owns. “The same payment that would go to the landlord now goes to the lender, generating significant wealth for hard working people in lower paying jobs,” Marks stated in last week’s announcement.


Newark plan will revamp Section 8 vouchers to turn tenants into homeowners

LOL....What could go wrong?

I see BoA is getting in on the money laundering.

 

[martybegan]

Less than a quarter of Newark residents own their home, a basic means of building and preserving family wealth, stable housing, good credit, and the borrowing power to seize on opportunities in business, education, or other areas.

That’s compared to a statewide homeownership rate of 64%, and a particular concern for Newark in light of a Rutgers report in May that real estate prices are rising beyond the reach of many residents thanks to corporate investors snatching up single and multi-family homes.

So city officials are hoping to turn thousands of Newark’s low-income renters into homeowners, through a new program allowing recipients of Section 8 rent subsidies to use that money to help make mortgage payments instead.

“We need to build wealth through equity,” said Newark Housing Authority Executive Director Victor Cirilo, whose agency provides rental subsidies — and now mortgage subsidies — under the federal Department of Housing and Urban Development’s Section 8 program.

Newark has about 6,150 residents receiving Section 8 vouchers, Cirilo said, many of whom could become homeowners under the new program, which is known as Homeownership Through Public Housing Assistance, or HOT-PHA.

Last week, Cirilo joined Newark Mayor Ras Baraka and Neighborhood Assistance Corporation of America CEO Bruce Marks to announce that the Boston-based non-profit housing broker was launching the new program in Brick City.

The event included the first closing ceremony for a participant in the program, on a $185,000 single-family house on Cutler Street. Bank of America is involved as a lender.

We are committed to creating pathways for more of our Newark residents to become homeowners no matter their income level,” Baraka said in a statement. “This closing day is just one of many to come and we look forward to having numerous residents enjoy the independence and empowerment of achieving the American Dream of home ownership.”

The HOT-PHA program converts tenant-based Section 8 vouchers used to subsidize rents into Section 8 homeownership vouchers for mortgage payments. Additional benefits include no down payment, no closing costs or brokerage fees, and below-market rates depending on the buyer’s credit. As with Section 8 rent subsidies, homeowners contribute a maximum of 30% of their income to their monthly mortgage payment, with the housing authority sending the bank or mortgage company a separate check for the rest.

For Araselys Maldonado, who closed on her 3-bedroom house on Thursday, her share of the $1,253 monthly mortgage payment is $213. And now her money is paying for a property she owns. “The same payment that would go to the landlord now goes to the lender, generating significant wealth for hard working people in lower paying jobs,” Marks stated in last week’s announcement.


Newark plan will revamp Section 8 vouchers to turn tenants into homeowners

LOL....What could go wrong?

I see BoA is getting in on the money laundering.

I thought progressives want people to be renters, not homeowners....

This isn't a bad idea in my opinion, just have to make sure it stays clean. It also can reverse some levels of urban decay. When people own something they take better care of it.

 

[1srelluc]

I thought progressives want people to be renters, not homeowners....

This isn't a bad idea in my opinion, just have to make sure it stays clean. It also can reverse some levels of urban decay. When people own something they take better care of it.

Just wait till major repairs are needed.....It does not make much sense to me to expect someone on section 8 to be able to foot the bill for as much as a new water heater install. You can bet BoA sees a angle to reclaim those properties for resale.

 

[martybegan]

Just wait till major repairs are needed.....It does not make much sense to me to expect someone on section 8 to be able to foot the bill for as much as a new water heater install. You can bet BoA sees a angle to reclaim those properties for resale.

With their mortgage only $200 bucks a month, and no landlord to fix things, hopefully this will be a life lesson for them the first time something breaks.

Plus in poor neighborhoods there's always that guy who can fix anything for $50.00.

 

[MisterBeale]

I thought progressives want people to be renters, not homeowners....

This isn't a bad idea in my opinion, just have to make sure it stays clean. It also can reverse some levels of urban decay. When people own something they take better care of it.

My state has a program like this.

It is administered by privatized corporations contracted by the state, program participants have individualized financial/career counselor which help them on their way toward financial/career independence, and program participants must be at least part-time employed and show a willingness to establish a steady, reliable employment and income history, while working with the program administrator's assigned counselor.

 

[EvilCat Breath]

What could go wrong is that the people they are trying to help don't know enough to be helped. Some will look at equity as a piggy bank and borrow against the equity until they can no longer afford the payments. Some won't understand the responsibility. Maria and Jose Flores will move out but Pedro and Anna Fuentes have promised to make the payments, until they move. Arturo is alone but he can rent sleeping bag space. He will make the payments until his Grandma in Guadalajara gets sick. The six renters don't bother with payments at all. There are a million ways this goes south.

 

[whitehall]

If you ever served in the military, "Section 8" means something different. Or maybe it's similar.

 

[martybegan]

What could go wrong is that the people they are trying to help don't know enough to be helped. Some will look at equity as a piggy bank and borrow against the equity until they can no longer afford the payments. Some won't understand the responsibility. Maria and Jose Flores will move out but Pedro and Anna Fuentes have promised to make the payments, until they move. Arturo is alone but he can rent sleeping bag space. He will make the payments until his Grandma in Guadalajara gets sick. The six renters don't bother with payments at all. There are a million ways this goes south.

That's why it has to be closely monitored. No equity lending, no subletting.

 

[MisterBeale]

Just wait till major repairs are needed.....It does not make much sense to me to expect someone on section 8 to be able to foot the bill for as much as a new water heater install. You can bet BoA sees a angle to reclaim those properties for resale.

With their mortgage only $200 bucks a month, and no landlord to fix things, hopefully this will be a life lesson for them the first time something breaks.

Plus in poor neighborhoods there's always that guy who can fix anything for $50.00.

 

[JGalt]

Less than a quarter of Newark residents own their home, a basic means of building and preserving family wealth, stable housing, good credit, and the borrowing power to seize on opportunities in business, education, or other areas.

That’s compared to a statewide homeownership rate of 64%, and a particular concern for Newark in light of a Rutgers report in May that real estate prices are rising beyond the reach of many residents thanks to corporate investors snatching up single and multi-family homes.

So city officials are hoping to turn thousands of Newark’s low-income renters into homeowners, through a new program allowing recipients of Section 8 rent subsidies to use that money to help make mortgage payments instead.

“We need to build wealth through equity,” said Newark Housing Authority Executive Director Victor Cirilo, whose agency provides rental subsidies — and now mortgage subsidies — under the federal Department of Housing and Urban Development’s Section 8 program.

Newark has about 6,150 residents receiving Section 8 vouchers, Cirilo said, many of whom could become homeowners under the new program, which is known as Homeownership Through Public Housing Assistance, or HOT-PHA.

Last week, Cirilo joined Newark Mayor Ras Baraka and Neighborhood Assistance Corporation of America CEO Bruce Marks to announce that the Boston-based non-profit housing broker was launching the new program in Brick City.

The event included the first closing ceremony for a participant in the program, on a $185,000 single-family house on Cutler Street. Bank of America is involved as a lender.

We are committed to creating pathways for more of our Newark residents to become homeowners no matter their income level,” Baraka said in a statement. “This closing day is just one of many to come and we look forward to having numerous residents enjoy the independence and empowerment of achieving the American Dream of home ownership.”

The HOT-PHA program converts tenant-based Section 8 vouchers used to subsidize rents into Section 8 homeownership vouchers for mortgage payments. Additional benefits include no down payment, no closing costs or brokerage fees, and below-market rates depending on the buyer’s credit. As with Section 8 rent subsidies, homeowners contribute a maximum of 30% of their income to their monthly mortgage payment, with the housing authority sending the bank or mortgage company a separate check for the rest.

For Araselys Maldonado, who closed on her 3-bedroom house on Thursday, her share of the $1,253 monthly mortgage payment is $213. And now her money is paying for a property she owns. “The same payment that would go to the landlord now goes to the lender, generating significant wealth for hard working people in lower paying jobs,” Marks stated in last week’s announcement.


Newark plan will revamp Section 8 vouchers to turn tenants into homeowners

LOL....What could go wrong?

I see BoA is getting in on the money laundering.

The landlord is responsible for maintenance on Section 8 housing, and I would guess that he gets reimbursed by the government, right? If the tenants became the owners, wouldn't that put the responsibility for maintenance and upkeep on them instead?

I can only imagine how much more those houses will resemble shitholes in a couple years.

 

[MisterBeale]

That's why it has to be closely monitored. No equity lending, no subletting.

PHA's, (Public Housing Authorities) using subcontractors for the state, which administer HUD funds;

"Housing Authority's Obligations: The PHA administers the voucher program locally. The PHA provides a family with the housing assistance that enables the family to seek out suitable housing and the PHA enters into a contract with the landlord to provide housing assistance payments on behalf of the family. If the landlord fails to meet the owner's obligations under the lease, the PHA has the right to terminate assistance payments. The PHA must reexamine the family's income and composition at least annually and must inspect each unit at least annually to ensure that it meets minimum housing quality standards."

https://www.hud.gov/topics/housing_choice_voucher_program_section_8

Now, in the age of computer's, and meta-data tracking? The type of stuff that EvilCat Breath hypothesized about? Is highly unlikely. The bureaucracy and Deep State know all bank account activity and employment activity automatically. If it is logged onto a computer? THEY KNOW, they will send you a copy, and have you sign it to make sure, if there is a conflict, they will open up a hearing.

I remember reading a story about a computer glitch in my state, regarding the unemployment situation just yesterday.

The only thing they don't know, is cash economy transactions. The bureaucracy knows everything about everyone.

They review, EVERY - SINGLE - YEAR.

All these programs are very closely monitored for fraud and abuse.

The only ones that get away with fraud and abuse? Are the folks writing the laws at the very top.

 

[MisterBeale]

The landlord is responsible for maintenance on Section 8 housing, and I would guess that he gets reimbursed by the government, right? If the tenants became the owners, wouldn't that put the responsibility for maintenance and upkeep on them instead?

I can only imagine how much more those houses will resemble shitholes in a couple years.

Public housing has inspections by the government contracted PHA's. If they lose their. . . um, government approval, the tenets have to move, and the landlord won't get paid by the government.

The costs for keeping them up to code come right out of the landlord's pocket, and they will be doing the bare minimum to pass HUD inspections.

I would imagine that the PHA's would still do inspections, and if the property participant failed those inspections, the PHA's would probably help the tenets, and give them support to get those repairs made. Depending on whether they were able to do the repairs themselves, or whether they needed a contractor. I can't say if the government would have to pay though. Probably some bureaucrat with formulas and access to the program participant's income and resources would make the technical determination if they can afford it or not.

 

[JGalt]

Public housing has inspections by the government contracted PHA's. If they lose their. . . um, government approval, the tenets have to move, and the landlord won't get paid by the government.

The costs for keeping them up to code come right out of the landlord's pocket, and they will using do the bare minimum to pass HUD inspections.

So what happens when the tenants become the owners? Will the federal government still pay for the upkeep and maintenance of the property?

 

[1srelluc]

The landlord is responsible for maintenance on Section 8 housing, and I would guess that he gets reimbursed by the government, right? If the tenants became the owners, wouldn't that put the responsibility for maintenance and upkeep on them instead?

I can only imagine how much more those houses will resemble shitholes in a couple years.

Well if they are currently Section 8 they are likely shit-holes any way.

 

[Concerned American]

The event included the first closing ceremony for a participant in the program, on a $185,000 single-family house on Cutler Street. Bank of America is involved as a lender.

Are those Section 8 payments repaid from the equity that is realized upon sale of the property? If not, then it is just another give-away of tax payer dollars.

 

[Concerned American]

So what happens when the tenants become the owners? Will the federal government still pay for the upkeep and maintenance of the property?

Who pays the property taxes annually?

 

[Indeependent]

Who pays the property taxes annually?

We do!

 

[Concerned American]

Well if they are currently Section 8 they are likely shit-holes any way.

I don't know what the annual appreciation on property is in NJ, but in this area it has been around 10% over the past two years and is projected to be 7.5% in the coming year. On $185K, that is a fair amount of change that the new owner will realize on the sale and all public funds should be repaid from this equity.

 

[1srelluc]

Who pays the property taxes annually?

I doubt it's the homeowner.....Not in a traditional sense anyway given the property tax rate in NJ is the highest in the USA.

 

[Concerned American]

We do!

SMFH. Does anybody have the balls to stand up and say, ENOUGH!? Don't answer, we all know the answer.