SOUTH ORANGE, NJ – The South Orange Board of Directors has approved a resolution to allocate $ 100,000 from an Affordable Housing Settlement Agreement with the Third and Valley Redevelopment Project to support the Wealth Gap Loan Program Equalizer at its October 11 meeting with a vote of 5 0; Trustee Karen Hartshorn Hilton was absent. The loans will go to black and Hispanic first-time home buyers in South Orange and Maplewood who have been approved for a mortgage and have graduated from a home buying program approved by the US Department of Housing and Urban Development. Village president Sheena Collum told the meeting that this allocation is part of a total of $ 1 million that will go into the trust fund; the initial payment of $ 500,000 has been received by the city and an additional $ 100,000 will be paid each year for the next five years.
“As part of this deal with Third and Valley, one of the things we allowed in this promissory note was to be able to distribute some of the funds in the affordable housing trust fund,” she said. declared. “We could also take money at our discretion from this deal and spend it on equity and inclusion programs in housing affordability.”
South Orange officials worked with the South Orange / Maplewood Community Coalition on Race to launch the program, which is mirrored by others across the country. It aims to address racial disparities in the two cities. For the first year of the program, $ 75,000 will be set aside for loans and $ 25,000 will be used for marketing.
“It’s the first of its kind in this area, but it’s reflected in some best practices across the country on how we can close the wealth gap and these terrible disparities in the wealth gap, and how we let’s address the issues in our own community of the loss of black and non-white Hispanic populations, ”Collum said.
Colleen Breslin, a CCR member who works on the program, told the meeting that property is the main generator of generational wealth in the United States and that racial discrimination in housing has made it historically difficult for blacks and Hispanics own a home.
“The Wealth Gap Equalizer Loan will increase equity by providing additional liquidity to black and Hispanic applicants to get help with a myriad of topics related to buying a home,” Breslin said at the meeting. “It includes offers to buy a home, down payments, closing costs, legal fees and other financial transactions necessary to complete the home buying process. The loan does not offer eligible borrowers any interest rate without forcing them to leverage assets, and with proper documentation, they will get the money quickly.
Loans of up to $ 7,500 will be available and properties purchased from South Orange will be eligible for a 50% loan discount. An approval committee is being formed.
CCR program director Audrey Rowe told the meeting that the program is being piloted this year. Next year the city and the CCR will decide if anything needs to be changed.
“We have questions that we hope to learn answers to,” Rowe said. “At the end of the pilot, we will make a recommendation as to whether this is something that will help us achieve our underlying goal, which is to protect our integration with Maplewood and South Orange and have an impact on l wealth gap between the two races. Then we will decide if we are moving forward or if we have learned anything that indicates we need to change in some way.
CCR Executive Director Nancy Gagnier said the organization has had a financial incentive loan program for over 20 years that has morphed a few times to meet new needs as they arise.
“This community has worked tirelessly to deliver something innovative that serves our particular cities,” she said. “He’s a pilot, but we have high hopes of having a real impact on residential racial integration. That’s the point.