Lottery Announced For First-Time Homebuyers
New houses with an equity stake to be sold to low-income families
Two brand new houses are up for sale to first-time buyers in Springfield, Massachusetts. But there will be some luck involved.
The city of Springfield, in partnership with a social service agency, is going to sell two brand new single-family homes in the North End neighborhood to low-income buyers at prices that will be well-below the appraised value for both dwellings giving the families a significant amount of equity from day one.
Given that the current real estate market is “red-hot,” said Mayor Domenic Sarno, it’s been decided that selling the houses through a lottery is the best approach.
“And this is about home ownership, which is extremely important,” Sarno said.
The houses were developed by the New North Citizens Council’s North End Housing Initiative using federal funds. They were built on vacant lots previously owned by the city at 111 Jefferson Ave. and 45 Bancroft Street.
The houses are expected to appraise in excess of $300,000, but each will be sold for about $200,000 leaving the buyer with instant equity and an affordable mortgage, explained the city’s Deputy Director of Housing Robert DeMusis.
“It’s an incredible opportunity for somebody,” he said.
To qualify, the maximum annual household income cannot exceed 80 percent of the Area Median Income, which for a family of four is $67,300.
The city also plans to kick in $5,000 from its first-time homebuyer program to help the buyers cover closing costs and other expenses.
Applications, which can be filled out online at the city’s website, are due November 8th to give time for pre-approval by a mortgage lender.
A date for the drawings has not been set.
“We’ll do it around Thanksgiving,” DeMusis said. “It’ll be a great Christmas present for somebody. We’ll hopefully have them into the house by Christmas.”
State Representative Carlos Gonzalez said not only is the initiative a great opportunity for a first-time homebuyer, it is also a chance to build family wealth.
“The Latino community is the largest segment of Springfield and if they continue to live in the rate of poverty as they do, this city will have some serious challenges,” Gonzalez said. “So, this is a great opportunity to change the game.”
A deed restriction will prevent the re-sale of the houses for 15 years.
City officials said there are plans to build four more similar homes in the Maple High/Six Corners neighborhood.