JP residents get first shot at condos

October 5, 2007
By

John Ruch

HYDE SQ.—Jamaica Plain residents and first-time homebuyers will get the first shot at new Forbes Street condos in an unusual sales program offered by the JP Lofts development company.

“You would have a leg up on anybody else,” said project head Xerxes Agassi, referring to locals.

The Home Ownership Opportunity Program (HOOP) was a resident-suggested idea to help stabilize the local community during controversy three years ago about the development, which eventually will include high-end condos in the former Language and Cognitive Development (LCDC) School at 11 Wyman St.

HOOP originally was supposed to price the units at relatively affordable rates and have a maximum income range, but those parts have been scrapped because of uncertainty about whether lower-income residents could qualify for mortgages in the current market, Agassi said. The market-rate units are priced at about $380,000 to $390,000.

However, HOOP still includes some financial help, including JP Lofts covering all closing costs and paying up to 1 percent of the final mortgage contract to lower payments.

The advantage, Agassi said, would be to “someone who’s on the path [to home-ownership] but having some difficulty making those numbers work.”

“It’s not just to give money away,” he said. “The point is to help people.”

The mortgages must be sought through a South End branch of Countrywide Home Loans. Also involved in HOOP is local Jamaica Hill Realty, the broker for JP Lofts.

Maureen McElroy, owner of Jamaica Hill Realty, said she has never come across a program like HOOP before. “It just helps keep costs down for first-time homebuyers,” she said.

Countrywide broker Joe Smith could not immediately comment without corporate clearance.

Various aspects of the program have been offered by other sellers, but the HOOP plan is unusual, especially for a private developer. Agassi said it may
become a model for himself and other developers.

“If [we] get some traction with this program, maybe [we] can do more on the next project,” Agassi said. “I think if you get the ball rolling…then you have a template to work on.”

“I’d love to personally do more,” Agassi said, explaining that HOOP on this project is limited by his more-cautious investors, regulatory limits and market uncertainties. “We’re open to any suggestions,” he said.

In 2004, JP Lofts introduced its proposal to turn the LCDC School into condos and build three three-family condo buildings at 24-28 Forbes St. on the back of the school lot. Today, Forbes Street buildings are being finished, while the school is still about six to nine months from completion, Agassi said.

The plan bitterly divided abutters, who generally supported the development, and affordable housing activists, who warned of possible displacement of residents with the introduction of luxury condos.

Amid the controversy, local residents suggested the ideas behind HOOP as a way to preserve affordability and keep JP residents in the neighborhood. With HOOP factored in—though it was still in development at the time—the project was approved in 2004 with great praise from the Jamaica Plain Neighborhood Council’s Zoning Committee.

Under city requirements, JP Lofts already had to price three units in the Forbes Street buildings at relatively affordable rates. Those units already sold, Agassi said.

HOOP, which applies to as many as three additional units, originally included affordability standards. Altogether, it gave the project even more affordability than the stringent 25 percent required by the JPNC Housing and Development Committee.

Now that the affordable component is gone, the overall affordability drops back to the city’s standard of roughly 13 percent.

“To be up-front, we’re probably not focusing on the low-income part of the spectrum,” Agassi said. But the focus on JP residents and first-time homebuyers remains.

HOOP needed approval from the Boston Fair Housing Commission for its JP-resident preference. Agassi said HOOP got the approval because of the unusual diversity of the JP population.

Affordable housing projects have received similar JP-preference approval before, but it is unusual for a for-profit developer to target JP residents with a privately developed program.

The second-floor units in each Forbes Street building are HOOP-eligible. Agassi said it is possible they would transfer HOOP eligibility to one of the LCDC building units under the right circumstances.

While HOOP originally envisioned a lottery for the units, they will now be sold first-come, first-serve. The first step is getting mortage approval from Countrywide. The application period runs through Dec. 31.

Under HOOP, the mortgages are being offered with no downpayments and no requirement for private mortgage insurance. The homebuyer has to agree to live in the property for a minimum of three years.

Countrywide is one of the nation’s largest mortgage brokers and has received criticism for its lending practices, according to recent national media coverage, including in the New York Times. Its parent corporation, Countrywide Financial Corporation, has had cash-flow problems and falling stock prices due to failures in the sub-prime mortgage market, among other issues, according to national media stories over the past month.

It is unclear whether any of that might affect HOOP. Some Countrywide criticisms have focused on the company’s fees, which would not be an issue for the homebuyer under HOOP.

For more information on HOOP, see www.jplofts.com or contact McElroy at 524-0130.