SOUTH ORANGE, NJ — The South Orange Board of Trustees 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 Equalizer Loan program at its Oct. 11 meeting with a vote of 5-0; Trustee Karen Hartshorn Hilton was absent. The loans will go to black and Hispanic first-time homebuyers in South Orange and Maplewood who have been approved for a mortgage and are graduates of a U.S. Department of Housing and Urban Development–approved homebuyer program. Village President Sheena Collum said at the meeting that this allocation is part of a $1 million total that will be paid to the trust fund; the initial payment of $500,000 was received by the town and there will be another $100,000 paid each year for the next five years.
“As a part of this agreement with Third and Valley, one of the things that we had enabled in this promissory note was to be able to distribute a portion of the funds into the affordable housing trust fund,” she said. “We could also take moneys at our discretion from that agreement and put it towards equity and inclusion programs in housing affordability.”
South Orange officials worked with the South Orange/Maplewood Community Coalition on Race to start the program, which is mirrored after others around the country. It’s meant to address racial disparities in both towns. For the first year of the program, $75,000 will be set aside for loans and $25,000 will be used for marketing.
“This is the first of its kind in this area but is mirrored after some best practices throughout the country on how we can address the wealth gap and those awful disparities in the wealth gap, and how we’re addressing issues in our own community of the loss of black and non-white Hispanic populations,” Collum said.
Colleen Breslin, a CCR member who is working on the program, said at the meeting that homeownership is a primary generator of generational wealth in the United States, and racial housing discrimination has made it historically hard for black and Hispanic people to own homes.
“The Wealth Gap Equalizer Loan will increase equity by providing supplemental cash to black and Hispanic applicants for assistance for a myriad of topics that come along with buying a home,” Breslin said at the meeting. “It includes home purchase offers, down payments, closing costs, legal fees and other financial transactions required to successfully complete the home-buying process. The loan offers qualifying borrowers no interest rate without requiring them to leverage any assets, and, with adequate documentation, they’ll get the cash quickly.”
Loans for up to $7,500 will be available and properties purchased in South Orange will be eligible for 50-percent loan forgiveness. An approval committee is in the process of being formed.
CCR Program Director Audrey Rowe said at the meeting that the program is being piloted this year. Next year the town and CCR will decide if anything needs to be changed.
“There are questions we have that we hope to learn answers to,” Rowe said. “At the end of the pilot we’ll be making a recommendation as to whether this is something that will help us achieve our underlying objective, which is to protect our integration in Maplewood and South Orange and impact the wealth gap between the two races. Then we’ll be deciding whether we move ahead or whether we’ve learned some things that say we need to modify in some way.”
CCR Executive Director Nancy Gagnier said the organization has had a financial incentive loan program for more than 20 years that has morphed a few times to serve new needs that arise.
“This community has worked tirelessly to come up with something that is innovative that serves our particular towns,” she said. “It is a pilot, but we have high hopes that we will have a real impact on residential racial integration. That’s the goal.”
South Orange BOT approves allocation for loan project to support black homebuyers added by Amanda Valentovic on
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