The Community Foundation is committing $500,000 to help Home HeadQuarters provide mortgages to new, first-time homebuyers in the City of Syracuse. This is part of our LeadSafeCNY initiative, a commitment to invest $2 million over four years to help end childhood lead poisoning in Syracuse.
The mortgages will be used by residents purchasing a new home built by Home HeadQuarters, which looks to build up to 50 new, single-family homes on vacant properties in Syracuse over the next two years. Each newly constructed home will be lead-free.
Home HeadQuarters currently holds a $39 million loan portfolio with a lower-than-average delinquency rate of 2.35 percent over 90 days. Yet, even with such a successful track record, it is expected that some of the new loans will default due to failure to pay. This is often because of unexpected life challenges such as the loss of a job or the need to move quickly.
The $500,000 commitment is in the form of a loan loss reserve that will help guarantee the loans. Should a mortgage result in foreclosure, Home HeadQuarters would assume the property and loan, make renovations and resell the property. If the sale results in a loss, a Community Foundation grant would be paid to the organization to cover any shortfall.
The location of the new homes will be based on housing and economic data to target specific blocks that not only have empty lots, but also steady long-term residents. According to Home HeadQuarters officials, this approach ensures that they, along with city planners, are creating more stable neighborhoods and an improved quality of life for an entire block.
Home HeadQuarters expects to leverage an additional $5 million in loan capital from banks and credit unions thanks to our reserve commitment. Buyers will often be first-time homeowners coming out of public housing or rental properties and investing in areas that have high childhood lead poisoning rates, stagnant housing values and high poverty. The newly constructed Home HeadQuarters properties will help to stabilize and alter the outcome of these neighborhoods.
Home HeadQuarters’ new homebuyers must complete an 8-hour homebuyer education program that includes financial and home ownership counseling. These efforts motivate borrowers to keep their mortgages in good standing.
This $500,000 commitment is one of our Program Related Investments, which allow up to five percent of our general funds to be deployed towards loans, loan guarantees, nonprofit equity investments and other non-grant financial strategies aimed at community impact.