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Long Island buyers can get loans to fix up ‘zombie’ homes

"Abandoned and foreclosed 'zombie properties' drag down surrounding home values and can impact the economic health and public safety of entire communities," Gov. Andrew M. Cuomo said in a news release on June , 2016. Under a new state program, Long Island home buyers can apply for up to $20,000 to repair vacant "zombie" houses like this one in Wantagh. Photo Credit: Johnny Milano

Long Island home buyers can apply for up to $20,000 to repair vacant “zombie” houses, as part of a new state program that aims to reduce blight.

The new Neighborhood Revitalization Program will provide the money in the form of loans to low- and moderate-income home buyers on Long Island and in other areas with large numbers of zombie homes, state officials said Tuesday. The interest-free loans will be forgiven over 10 years.

In a separate program, the state also will give grants to certain homeowners — older homeowners, veterans, Medicaid recipients, people with disabilities, and people with low incomes — who need funds to improve their properties.

Zombie homes “impact the economic health and public safety of entire communities,” Gov. Andrew M. Cuomo said in a news release. The new programs, Cuomo said, will help “crack down on these neighborhood blights.”

The loan program is funded by $22 million from a state settlement with JPMorgan Chase. Long Island is expected to receive 20 to 40 percent of the funds, since it has roughly that share of New York’s zombie homes, state officials said.

Buyers can receive the funds when they receive a mortgage from the State of New York Mortgage Agency, or SONYMA. The loans can be combined with other subsidies and grants.

The loans will help purchasers “buy and own a home in the neighborhood of their choice that they can afford over the long-term,” James S. Rubin, commissioner of the Department of Homes and Community Renewal, said in a statement.

The loan program will make it “financially viable” for buyers to purchase abandoned homes, whose repair costs might otherwise be too high, said Marianne Garvin, chief executive of the Centereach-based Community Development Corp. of Long Island, which will be helping home buyers apply for the loans.

In addition, Garvin said, the program is open to those making more than the traditional limits for housing assistance programs. The new loans are primarily available to those earning up to 125 percent of the area’s median income, although those making up to 150 percent also will be considered.

Long Island’s median income is $106,200 for a family of four.

“That middle income family needs help too, and we often neglect them,” Garvin said.

The program could give the local economy a boost, said Peter Elkowitz, chief executive of the Hauppauge-based Long Island Housing Partnership. “You’re going to have contractors repairing these homes, lenders originating these loans,” he said. “At the end it’s going to provide a new decent home for someone and improve the surrounding community.”

More information is available on the state housing agency’s website.

The grant program for homeowners is funded by $27 million in state and federal dollars. Eligible homeowners can apply starting June 27 through the state housing agency’s website.

The state Assembly has passed a bill that would create a zombie house registry and require banks to maintain distressed houses during court foreclosure proceedings. The State Senate is considering the bill.

With Carl MacGowan

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