Directory of New York City Affordable Housing Programs

Program (?) Section 235 Program
Program Description

Section 235 was an FHA mortgage insurance program designed to help new borrowers achieve homeownership by allowing them to take out government-insured mortgages with no money down on new properties. Section 235 also subsidized a low-income homeowner’s interest payments to an interest rate as low as one percent, though the homeowner was required to pay 20 percent of their adjusted gross income for the principal, interest, FHA insurance premium, taxes, and hazard insurance. To be eligible, homebuyers had to have an annual income at or below 95 percent of the AMI. The Nixon administration deemed the program a failure in 1974 after defaults nearly bankrupted the program and some cases of fraud were uncovered. Until then, New York City used the program successfully to finance condominium purchases. HPD used previously-allocated Section 235 awards to produce new single-family homes in the early 1980s, a forerunner of the New Homes Program.

Benefit Classification (?)  
Supply or Demand Supply
One-Time or Ongoing One-Time
Benefit Type (?) Financing, Grant
Government Agency (?) US Dept of Housing and Urban Development
Program Information (?)  
Scale Medium Scale (between 1,000 and 4,999 units produced)
Timeframe 1968-1974
Developer/Owners (?) For-Profit, Non-Profit
Property Information (?)  
Property Occupancy Vacant
Property Type Land
Building Type One- to Four-family
Construction Type New Construction
Occupant Tenure (?) Homeownership
Occupant Income Restrictions (?) Moderate-Income
More Information HEIN Online

« Back