Under HomeWorks small, vacant City-owned buildings were completely rehabilitated by experienced builders to create one- to four- family homes for sale to individual homebuyers at market prices. There were mostly no income limits for the buyers, nor were there any income or price limits for any rental apartments. However, the builders generally worked with lenders to provide mortgages with low down payments and the lenders took the income from the rental apartments into account in qualifying homebuyers for loans thus making many of the homes affordable to moderate- and middle-income buyers.
To make the program feasible, the City sold the buildings at nominal prices and at times provided a subsidy in the form of a zero percent, non-amortizing loan that evaporated over a period of six years. The City also provided partial tax abatement to homebuyers for a six-year period. Where the buyer did not require a subsidy there will still be a resale restriction.
Homebuyers were selected through lotteries carried out by the builders under the City’s Department of Housing Preservation and Development (HPD) supervision. Preference for 50 percent of the homes was given to current residents of the communities in which the homes were located, and preference for 5 percent of the homes was given to uniformed members of the New York City Police Department. Homebuyers were required to occupy at least one unit in their homes as their primary residence.