Bridgeport-based People’s Bank has teamed with Neighborhood Housing Services of New Haven and the city of New Haven to provide housing to low- and moderate-income families in that community.
As an aid to its community and to augment its lending programs, one Connecticut bank has partnered with a nonprofit group to clean up a few houses in New Haven to lend to lower-income families.
People’s Bank, Neighborhood Housing Services of New Haven and the city of New Haven have joined forces to rehabilitate six houses and construct one new home in the West River section of New Haven. The houses will be made available to low- and moderate-income borrowers once the rehabilitation is completed.
On behalf of NHS, People’s submitted an application to the Federal Home Loan Bank’s Federal Housing Finance Board, through that agency’s Affordable Housing Program, for a grant of $210,000 to help renovate the six properties and build the additional home. Each year, the FHLB sets aside 10 percent of its revenues to provide grants to nonprofit organizations promoting affordable housing initiatives; it also requires a member bank, like People’s, to sponsor the application of the nonprofit organization seeking funding. The grant subsidy will enable NHS to sell the homes for $30,000 less than their total development cost, making them more affordable for low- to moderate-income borrowers.
As part of the Affordable Housing Program grant, People’s has agreed to write all of the final mortgages to the homeowners who will buy the newly renovated or constructed homes. The bank will offer new homebuyers its “Affordable Lending” mortgage, which already helps low- to moderate-income applicants qualify for mortgage loans.
“This project augments People’s efforts to create homeownership opportunities for New Haven residents. As the No. 1 lender to low- to moderate-income borrowers in the Elm City, according to Home Mortgage Disclosure Act statistics, People’s is proud of its lending initiatives here,” said Timothy Hodges, vice president of the bank’s Affordable Lending Group. “With our homeownership training classes and our outreach to low- and moderate-income communities, this homebuilding project with NHS is a natural extension of our commitment to partner with the city of New Haven and its nonprofit organizations to revitalize local neighborhoods.”
‘Our Greatest Asset’
NHS’s goal is to “stem the tide of vacancy and neglect in targeted city neighborhoods,” said Jim Paley, executive director of NHS. “The affected properties are tightly clustered within the neighborhood, forming a project with the power to make a noticeable change in the appearance of New Haven streetscapes. Our organizational mission promotes homeownership and the stability of resident populations in neighborhoods that have a low rate of owner-occupied homes.”
NHS has worked for more than 23 years to improve New Haven neighborhoods, restoring or constructing more than 250 homes for city residents in that period. NHS has worked in the West River neighborhood in the past, partnering with such institutions as the Hospital of St. Raphael, the Mutual Housing Association of South Central Connecticut, the West River Neighborhood Association and other nonprofit community agencies.
According to statistics from NHS, there are 1,401 households in the West River area. Of those 1,401 households, only 288 – or 21 percent – live in owner-occupied homes, well below the 30 percent of owner-occupied homes citywide.
To help make this project a reality, the city of New Haven made available at a nominal cost five properties located at 34 Gilbert Ave., 40 Gilbert Ave., 95 Gilbert Ave., 19 Judson Ave. and 14 Judson Ave. NHS had to purchase the sixth home being rehabbed, 64 Gilbert Ave., from a private investor. All of the properties except the house at 14 Judson Ave. are two-family homes. New buyers will have the option to become landlords, providing them the added cushion of rental income when making mortgage payments.
“New Haven’s strength lies in its neighborhoods. It always has and it always will,” said New Haven Mayor John DeStefano. “To protect our greatest asset, we want to do all we can to restore some of our neglected homes to their past glory. In doing so, we improve and strengthen our neighborhoods one street and one property at a time, creating homeownership opportunities in the process.”
DeStefano added, “In addition to increased homeownership opportunities, West River is in need of sufficient funds to renovate its wonderful housing stock, 33 percent of which was constructed before 1939, and a full 67 percent of which was built before 1960.”
According to Paley, NHS’s ability to gain the FHLB grant through People’s Bank was enhanced by its partnership with the city in acquiring the West River properties.
The one new home that is currently under construction is located on a formerly vacant lot at 161 Porter St. A private donor contributed the lot, and students from the Yale School of Architecture donated their time to the project and designed the home for free. Paley said the NHS partnership with Yale also enhanced the People’s sponsorship of the FHLB grant request.
Rehabilitation and new construction work on all of the properties is scheduled for completion later this year. The one-family home will sell for approximately $85,000 and the two-family homes for approximately $150,000. Several of the homes are already under deposit.
People’s, which is based in Bridgeport, is a diversified financial services company providing commercial, consumer, insurance and investment services. Founded in 1842, it is the largest state-chartered bank in Connecticut with assets of $12 billion, 154 branches and more than 230 ATMs.
