Thirty houses damaged by superstorm Sandy and acquired by the state’s New York Rising program will be taken over by a housing group to be made into permanent affordable housing for eligible home buyers.
The Long Island Housing Partnership will soon take ownership of the first 15 properties — seven in Nassau County and eight in Suffolk County — and the next 15 in the fall. The houses will be demolished, rebuilt and elevated for sale to applicants with incomes no greater than 80 percent of the community’s area median income (AMI), who haven’t owned a house in the last three years, and who qualify for a mortgage from a lending institution.
The properties were chosen by LIHP at the invitation of the state from among damaged properties acquired by New York Rising after Sandy. Hundreds of acquired properties have already been sold at auctions to be redeveloped privately.
The program will reduce the principal of the sale price for the home to make it affordable, costing home buyers no more than about 30 percent of their monthly income for mortgage payments, taxes and flood insurance. Their down payment will be between 3 percent and 5 percent of the sale price.
The AMI for Long Island is $106,200 for a family of four in annual household income.
While the homes will be sold outright, at a discount from market rate, there are some restrictions on resale, and the Partnership retains first rights to repurchase the house for resale to another eligible buyer. The land will remain in a new land trust controlled by the Partnership to maintain the properties’ affordability.
The LIHP will also counsel the home buyers and help if they run into hardships.
Peter Elkowitz Jr., president and CEO of the housing partnership, said the 30 properties were selected from among the hundreds of houses acquired by the state to be auctioned off and redeveloped. Those selected had taxes of less than $10,000 and are near downtowns, transportation, schools and shopping. The first 15 are in Island Park, Massapequa, Baldwin and Babylon and Islip townships.
“The estimated sale price to the purchaser will probably be around $200,000 after subsidies,” said Elkowitz, who said federal, state and local governments as well as private funders, including Citibank, would help subsidize the costs.
“Because of the location of these sites, we expect a large number of applicants,” said James Britz, executive vice president of LIHP.
LIHP is setting up the land trust, which will also take over some of the so-called zombie houses — vacant foreclosed houses that languish in often dangerously dilapidated conditions.
“It’s a tool, not just for Sandy-related properties,” Elkowitz said. “It’s a win-win.”
He said that the LIHP will open applications online through its website probably by the end of the summer for a 30- to 45-day marketing period, rank applicants randomly by lottery and evaluate their eligibility, in that order. Besides income and asset limits, buyers must not have purchased a home within the last three years or have other special circumstances, must qualify for the mortgage and undergo mortgage counseling.
Although the details are still being developed, home buyers may be able to resell the homes at a price that rises with the consumer price index rather than market rates, and can sell to their children — only if the children’s income qualifies them to purchase.
Buyers will be able to review and choose from available properties based on their ranking. Their sale prices will be determined by the cost to LIHP to demolish and rebuild them.
LIHP has helped more than 27,000 people get into or stay in housing over the years and helped develop more than 1,200 scattered-site affordable homes for sale to eligible buyers. “Because of the education and training we provide, the stewardship services over the entire time the person is in the home, we have a very low default rate,” Elkowitz said.