How tough is it for first-time homebuyers?
Less than 9% of property listings today are considered affordable for a household with a $50,000 income. That helps explain why only 24% of housing sales last year were made by first-time homebuyers. That figure in 2010? A disquieting 50%.
Some communities say it’s time first-time homebuyers had a fighting chance at affordable home ownership.
Case in point: 216 Lux Street in Rochester, NY.
This three-bedroom, 102-year-old home was substantially rehabbed recently by the Rochester Housing Development Fund Corporation (RHDFC) through the HOME Rochester program. This non-profit is a regional affordable housing catalyst, instrumental in the restoration of more than 900 single-family homes since 1991, which adds about $52 million to the city’s tax base.
“We acquire vacant ‘zombie’ housing, typically foreclosures,” explains Theodora Finn, president of the RHDFC and Greater Rochester Housing Partnership (GRHP). “We collaborate with banks, nonprofits, local contractors and agencies to renovate these homes to a very high standard. Then we sell the home to an income-eligible, first-time homebuyer.”
$15,000 Neighborhood Bonus
If all that RHDFC and GRHP represented was home ownership to families that couldn’t otherwise afford it, that might be enough. But their reinvestment has a powerful echo effect. Raising property values, creating generational wealth and upgrading the property to a level another investor might not be willing to match are also found benefits. Local contractors, including minority and woman-owned businesses, along with local lending, real estate firms and law firms are also program beneficiaries.
The rebirth of 216 Lux Street impresses Tammy Wise, community development banker – east region for J.P.Morgan, a long-time RHDFC and GRHP financing partner: “RHDFC did a beautiful job. I would be thrilled to live there.” Lux Street neighbors should be delighted, too. Finn adds, “We did an evaluation, and it shows our improvements increase surrounding home values by at least $15,000 versus a vacant home.”
Surging Home Values
Vice President
J.P. Morgan
It's just what Rochester needs. Buying a home there, like many U.S. communities, is a challenge. Local data shows the median sale price surged from around $102,000 in 2018 to more than $148,000 in 2024 – a 45% increase. In 2023 nearly 40% of Rochester households were considered cost-burdened (more than 30% of monthly income going to housing).
“The RHDFC has touched over 2% of the single-family housing stock in Rochester,” reports Wise. “That’s an impressive number.”
Financial Momentum
The RHDFC recently closed the organization’s tenth fundraising round – or phase – with nine outside financing participants. The phase generated $14.5 million, with the funds allocated to acquire and rehab up to 45 area homes. J.P. Morgan is the lead participant, providing a $2.6 million non-revolving credit facility.
“The folks at RHDFC and GRHP are great to work with,” Wise says. “We take the lead role in each phase and have done so through all 10. The facility we provide, coupled with subsidies from the city and state allow them to make quite an impact on the housing supply.”
A Property Reborn
The transformation of each home to move-in status is a story unto itself. For example, 216 Lux Street required asbestos removal and environmental clean-up, which you might expect in a century-old home. Remediation was just the beginning.
“We work with our partners to renovate the home to a very high standard,” observes Finn. “They typically have new roofs, windows, all-new interiors including the kitchen, bathrooms, HVAC system and hot water heater. Insulation is added, too, if it’s required to deliver a tight, energy-efficient home.”
Cheers from a New Homeowner
It’s difficult to overstate what the opportunity to purchase a home renovated through HOME Rochester represents to Kevin Langlois, first time homeowner. Like many others that have gone through the program, Langlois shares “homeownership offers a sense of safety, knowing that I am investing in my future as my home's equity grows.” Since owning his home he has been able to foster a stronger connection to his neighbors and community. “I have also embraced new hobbies, such as gardening and getting a puppy now that I have a yard for him to play,” adds Langlois.
To learn more, get in touch with the J.P. Morgan Community Development Banking team.