City Pulls Rug on Homebuyer Grants, Leaving Applicants Stuck Between Floors
Housing agency puts 20-year-old program helping New Yorkers buy real estate on pause — leaving hopes and deeds up in the air.
Clare Sherry said she was unexpectedly told a grant was no longer available from Housing Preservation & Development, which would have allowed her to move out of her supportive building in Brownsville to an affordable unit in Harlem, January 3, 2023. Photo by Ben Fractenberg/THE CITY
This article was originally published on by THE CITY
Clare Fogerty thought this was the year she could get out of supportive housing and into her own place with help from a city-run homebuyer program, which would give her a grant towards a down payment.
She began participating in the HomeFirst Down Payment Assistance Program through the Department of Housing Preservation and Development (HPD) at the start of 2023, taking an education course run by the nonprofit Mutual Housing Association of New York and connecting with a counselor there.
In September, she received preapproval for a grant and got the go-ahead to look for a place to buy. Her offer on a one-bedroom apartment in an affordable HDFC co-op in Harlem was accepted in November, and she received the contract on December 12.
But just before the new year, her mortgage broker told her that HPD had paused the program weeks earlier. She said she wasn’t notified by the agency or her counselor — and told THE CITY that if she can’t use the $31,000 grant she was supposed to receive for the closing costs, her purchase is in jeopardy.
“This is my one chance to get out and make a better life for myself,” said Fogerty, who is 41 years old and lives with physical and mental challenges. “And for people like me to get it taken away, it’s the worst-case scenario.”
The HomeFirst program paused on December 7 and suspended all incoming applications because it’s in the middle of selecting new partners to operate its grant program, a spokesperson for HPD said. It is set to resume sometime in the spring — but it might be too late by then for Fogerty.
Her lawyer told THE CITY she could also lose the thousands of dollars she has put in an escrow account if her contract isn’t fulfilled.
Mixed Messages
After being contacted by THE CITY, housing officials promised to look into Forgerty’s plight.
“While this person’s situation was not brought to HPD’s attention until Wednesday and their application never made it to HPD for final review and approval, we are immediately reaching out to those involved to do whatever we can to make this right for her,” agency spokesperson William Fowler told THE CITY in a statement. “Our HomeFirst partners routinely advise prospective homebuyers through training and one-on-one meetings to never sign documents before consulting with their counselor.”
But emails Fogerty shared with THE CITY showed she kept her counselor up to date throughout the process. On September 12, she emailed her counselor to let her know she had been preapproved for a mortgage, and was told “best of luck shopping” in a reply.
She then emailed her counselor on November 3 to let her know the offer on her apartment was accepted, and asked details about some questions from the seller regarding her financing.
“Do you have any experience with the grant not going through? Because I am assuming in that case then I would lose the cash I would be putting into escrow while we wait for the deal to close?,” she asked — more than a month before the unexpected pause on the program was announced.
“How worried should I be about this?”
She received a reply on November 7 from her counselor sending along her congratulations and reminding her of MHANY’s experience with the program.
“We have been working with the HPD Grant since its inception and you qualify based on your income and household size,” the counselor wrote.
On December 12, Fogerty sent her contract to her individual counselor and to Cecilia Joza, the homeownership and counseling program director at MHANY.
Joza told THE CITY she replied to that email informing Fogerty that the program had been paused five days earlier, but Fogerty said she never received any email and MHANY did not supply proof of that correspondence.
On December 13, Fogerty emailed Joza to ask if she could forward the homebuyer education certificate that was needed for her mortgage approval, which Joza sent along — with no mention of the program now being on pause.
Fogerty said she’s since heard from other people in the program who were having similar issues.
Achieving the Dream
HomeFirst launched in 2004 and works with qualified New Yorkers who make up to 80 percent of the region’s median household income, awarding grants to help buy an apartment or house in New York City. Participants are required to have their own savings to help pay the down payment or closing costs, and live in the home for at least 10 or 15 years, depending on the size of the grant.
In October 2021, the program began offering up to $100,000 — up from a previous cap of $40,000 — for down payment help. In 2022 and 2023, a total of 200 households were assisted in buying homes through the program, according to HPD.
When it expanded, city officials touted HomeFirst’s help in allowing low-income New Yorkers the chance to tap into homeownership, which is the largest wealth creator in the country.
Vicki Been, the former deputy mayor for housing and economic development, said in 2021 that it “will serve to make New Yorkers more economically secure, our neighborhoods more stable, and a recovery for all of us more certain.”
Mayor Eric Adams picked up HomeFirst and vowed to expand it. His housing blueprint, released in 2022, detailed plans to double the budget and broaden eligibility, tripling the hundred households helped each year.
“HomeFirst has provided thousands of New Yorkers with the support needed to achieve the dream of owning their first home,” the HPD’s Fowler told THE CITY. “While the program is paused temporarily, we are working with our partners to bring it back online in the coming weeks.”
For Fogerty, who works with people living with disabilities at SKIP of NY, the program has been crucial in helping her get back to independent living. She was diagnosed with a disability from spinal cord injuries and anxiety, and moved into an apartment within Independent Community Living of Brooklyn in August 2017.
She found out about HomeFirst once she started working again, after speaking with the doorman of a building where one of the families she works with lives. He had recently purchased a home in Brooklyn with help from the program.
Now, her lawyer is trying to negotiate with the sellers of the co-op as they try to figure out what’s next with their grant.
“I really got everything all together and this was my chance,” she said.
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Editor’s note: A version of this story originally ran in Brooklyn Paper. Click here to see the original story.
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