Mayor Ras J. Baraka and President and CEO of the Urban League of Essex County (ULEC) Vivian Cox Fraser today announced the launch of a new $6 million initiative aimed at promoting homeownership and wealth-building opportunities among Newark Black and Latino residents, in partnership with National Community Investment Fund (NCIF) and Wells Fargo.
“The City of Newark has committed $750,000 to further reduce costs for participating families because we believe so strongly that homeownership is fundamental to equity for those who have been blocked by systemic barriers decade after decade,” said Mayor Baraka. “We are grateful to The Urban League for developing high quality affordable housing for residents to buy and rent in the West Ward and we are proud to support their commitment to one of this administration’s highest priorities.”
ULEC will develop and sell 10 two-family homes in the Fairmount neighborhood of Newark. Each home will include a unit for the homebuyer along with an affordable rental unit that can help defray the cost of owning the home. Bringing affordability even further, these homes are designed and built for economy and efficiency during ongoing climate change. By reducing their carbon footprint and greenhouse emissions, these dwellings contribute to racial equity and economic and environmental justice.
Through an innovative use of capital sources, ULEC will sell those homes at below market sales prices to low-income homebuyers and provide them with mortgage financing with favorable terms, including an interest-only option. ULEC’s program combines a saving and wealth-building component with benefits that include homeownership and landlord readiness training and personalized financial empowerment counseling.
“Transforming communities requires capital,” said Ms. Fraser. “We are excited to utilize the New Market Tax Credit (NMTC) program to address the racial wealth gap and build homeownership. Using NMTC for subsidizing single-family homes is unique and could not have been possible without the assistance of the solid partnerships with the City of Newark, NCIF, Wells Fargo and Monge Capital. We’ve worked very hard to create wealth among low-income communities, especially minority communities, to revitalize Newark and create generational wealth.”
The NMTC Program attracts private capital into low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments in specialized financial intermediaries called Community Development Entities (CDEs). This project funding was made possible through a strategic partnership with NCIF, a community development financial institution (CDFI) that invests in low- and moderate-income communities nationwide, and Wells Fargo’s Community Lending and Investment Group (Wells Fargo). In addition, NCIF brought in Industrial Bank (a minority depository institution and another CDFI) as a participant in its loan. Bringing Industrial Bank as a partner aligns with NCIF’s three-way strategy to generate long-term, sustainable change in low-and moderate-income markets nationally.
"NCIF is thrilled to partner with the Urban League of Essex County and Wells Fargo on this groundbreaking pathway to make eight individuals become homeowners to build wealth," said Saurabh Narain, President and CEO, NCIF. "The Urban League's track record and its affiliation with a national network of partners make them the ideal collaborator to help us replicate this unique structure across the country."
As part of the capital stack, Wells Fargo Bank contributed $1.9 million in equity to the project through its purchase of the New Markets Tax Credits.
“Wells Fargo is proud to be part of another impactful Urban League homeownership initiative, helping residents of a low-income, minority community begin to build wealth and stability through the long-term benefits of owning a home,” said Scott Pinover, Director of Wells Fargo’s Northeast New Market Tax Credit Team.
ULEC engaged Monge Capital Advisors, a Newark based Minority Business Enterprise firm, as a key advisor to this transaction. Monge Capital provides financing and real estate solutions leveraging their expertise in New Markets Tax Credit financing nationally and including the Newark, NJ area.
“This transaction structure and partnership with the City of Newark, ULEC and NCIF will go a big step forward to revitalize Newark,” said Jeff Monge, Founder, Monge Capital Advisors.”
The City of Newark currently stands as a national model in creating innovative pathways to homeownership and affordable housing.
About the Urban League of Essex County
Since its founding in 1917 by William B. Ashby, the Urban League has provided training, assistance and direction to thousands of African-Americans and others in the Essex County area. Our mission is to assist African American and other disadvantaged urban residents in the achievement of social and economic equality.
For more information about the new homeownership initiative and other programs, please visit the ULEC website at ulec.org.
About the National Community Investment Fund (NCIF)
National Community Investment Fund (NCIF) is a nonprofit Impact Investor and a Community Development Financial Institutions (CDFI) with a mission of catalyzing economic development in low-income and underserved communities across the US by investing in mission-oriented financial institutions. NCIF invests capital in banks and other institutions that improve access to financial services for local individuals, small businesses, and minorities. It is the largest investor in CDFI and MDI banks with AUM of >$220 million. For more information visit, www.ncif.org.