It pays to buy in Atlantic City / Buyers can get $20,000 for first home By KEVIN POST Business Editor, Published: September 13, 2009 Page in newspaper:
Farook Hossain has been working in food service at the Tropicana Casino and Resort for seven years. But until recently, all he could afford for his family was a one-bedroom rental apartment. That changed in the past month with the help of a city-administered federal program that provides as much as $20,000 to first-time buyers of homes in the city -- on top of the $8,000 federal tax credit such buyers can get until the end of November.
Hossain, his wife and his 3-year-old son moved into a three-bedroom home on Raleigh Avenue here."I need a big house because maybe I'll have another baby next year," Hossain said Tuesday.He said he didn't have money for a down payment on the house, so if it weren't for the Atlantic City First-time Homebuyers Program, he wouldn't be a homeowner.
And that's the point of the program, part of the federal Home Investments Partnership Program, said Lois Braithwaite, director of the city Division of Community & Economic Development that administers it. Since 2004, when the program began under the previous administration of Mayor Lorenzo Langford, the division has helped about 80 families become first-time homebuyers, she said.
"But for this grant, these people wouldn't be able to buy a house," Braithwaite said.
Steven Mento, a Realtor with Prudential Fox & Roach in Northfield, has helped a few first-time homebuyers with the program, including Hossain. He said that after paying the down payment and closings costs, the balance of the $20,000 is used to pay down the mortgage. "You're not permitted to take any of it in cash," he said.
Braithwaite said the aid is in the form of a forgivable, deferred loan that is subordinate to the first mortgage. If homebuyers stay in the homes for 10 years, the loans are forgiven. If they sell or lease the house, then they must pay the loans back, she said. Braithwaite said that to be eligible, prospective homebuyers must have lived in the city for the prior 12 months, can't have owned a home for three years and must obtain a mortgage approval adequate to buy an Atlantic City home. For the 12 people the program has helped since December, she said, the average home price has been about $150,000.
There are also annual income limits to qualify -- $38,300 for a single person, $54,7000 for a family of four (counting all earnings in the family). "It's a great incentive, and we've run the gamut of ethnicities in the city helped by the program," she said, including Native American, Pakistani, black, white and Hispanic.
Mento said the program requires a bit of paperwork, but it usually proceeds smoothly. "They recently added that they want a lead-based-paint inspection. If it exists, you have to have the paint remediated before closing," he said. First-time buyers hoping to get both the $20,000 Atlantic City assistance and the federal First Time Homebuyers Tax Credit of $8,000 had better hurry, though.
Mento said that since it typically takes six weeks to get a mortgage, buyers need to find a home and start the paperwork by the end of September, if not sooner. You can reach Steven Mento at 609-271-1953
E-mail Kevin Post: KPost@pressofac.com
HELP FOR FIRST-TIME HOMEBUYERS
Atlantic City First-Time Homebuyers Program
$20,000 for down payment, closing costs, mortgage reduction
Division of Community & Economic Development