WOONSOCKET – It'll take not just a decent credit score but a bit of luck to claim the keys to this house. But for whomever can put the two together, it really will be like hitting the jackpot.
Worth $140,000, the three-decker at 41 Bennett St. will be sold by the owner – the City of Woonsocket – for just $100,000. But with three units, the house is easily capable of generating enough rental income to cover the mortgage and put some money aside.
The city plans to sell the house by lottery to eligible applicants on June 1.
It's all part of the Super Deal Program, designed to put a decent house within reach of a low- to moderate-income buyer who's never owned a home before, says Paulette Miller, deputy director of the planning and community development.
“The idea is to help stabilize neighborhoods with safe and affordable housing,” she says.
The house was a Federal Housing Administration foreclosure that was offered to the city for $1 by the Department of Housing and Urban Development about a year ago. The house was part of HUD's “dollar home program,” which means it had already been on the open market for at least six months before it was conveyed to the city, in 2009.
The city “jumped at the chance” to buy the house for a buck, said Miller. Using grant money, the city hired a contractor who thoroughly renovated the property, which is now in like-new condition.
As he showed a visitor around this week, Tom Koback, the city's supervisor of construction, said most of the house was gutted and rebuilt from scratch. About the only thing that was saved, he said, were the kitchen cabinets, but the countertops are new laminates, and the appliances are new.
Most of the floors in the house are vinyl tile and Berber carpets, but ceramics were salvaged in one of the kitchens and “all the bathrooms are brand spanking new,” says Koback. There's a new rubber roof on the house and all the utilities have been replaced with state-of-the-art fixtures.
“They look great,” Koback says of the apartments. “They're code-compliant and affordable. You can't go wrong.”
Not everyone may jump at the chance to play in a lottery where the prize is a $100,000 mortgage, but the number might seem more frightening than if really is. Considering the rental potential, the house is actually a great opportunity, city officials say.
Consider the math: With a trifecta of two-bedroom apartments, two could generate rental income of, say, $600 each, a reasonably conservative figure in the local market. Multiply that by two and that's $1,200 a month the owner-occupant could put toward the mortgage.
And that's probably going to be more than enough to cover it. RealestateABC.com's mortgage calculator, actually, pegs the monthly nut at $798.35, a figure that assumes interest of 4.5 percent on a conventional 30-year mortgage, plus $3,500 a year for taxes and insurance.
But it's not for everyone. In order to qualify, buyers must meet HUD's income eligibility standards for low- to moderate-income families, which vary according to household size, according to Miller. A family of four, for example, could earn no more than $57,700 a year.
Applicants will be subject to income verification and also be required to supply employment, credit and housing references, according to Miller.
The selected lottery winner must also qualify for a conventional mortgage, make the home their primary residence, complete a homeowner/landlord education course and abide by other conditions of the sale, she says.
As the renovations of 41 Bennett St. near completion, the city has also listed with Kate Duggan of Essex Properties, a real estate professional who will assist the city in the sale of the property.
To qualify for the lottery, buyers must complete an application and return it the community development office at City Hall by May 15. The applications will be pre-screened to determined with the buyers are qualified. If all goes according to plan, said Miller, the city will receive more than one application from a qualified buyer, and Mayor Leo T. Fontaine will randomly choose a winner from that pool on June 1.
Applications are available on the city's web site, www.ci.woonsocket.ri.us . Choose the housing and community development header from the menu bar and click on “First Time Homebuyer Super Deal Program.” Or contact Kate Duggan of Essex Properties, 401-765-7773.
For more information, contact Miller at 401-767-9232 or by e-mail at firstname.lastname@example.org .