NEW ORLEANS, LA - The Hurricane Katrina recovery effort in New Orleans took a giant leap forward this month with the announcement of “New Era,” the largest workforce housing initiative for victims of Hurricane Katrina. New Era consists of more than 315 one, two and three bedroom homes priced starting at $72,000. The initiative, including hard-to-obtain financing for working families, is led by CityView Executive Chairman Henry G. Cisneros, New Orleans real estate developer Stewart Juneau, CEO of leTriomphe Property Group, LLC, and Michael Wojciechowski, head of California-based Our Castle Homes, LLC, one of the nation’s most innovative developers of housing for America’s workforce. Homeowner financing for the New Era project is provided by the Neighborhood Assistance Corporation of America (NACA).
“This is a new era for families of New Orleans who want to come back home and work and restore themselves to homeownership, or move up to homeownership,” said CityView Executive Chairman and former U.S. Secretary of Housing and Urban Development Cisneros. “This is the ideal way to build an American middle class, and provide a way to achieve the American dream for working families in this area.”
Stewart Juneau of leTriomphe Property Group, LLC, who redeveloped the Ritz-Carlton Hotel in downtown New Orleans, is the owner of the 320-unit The Gates on Manhattan, a former apartment complex that has been converted into homes for working families selling for between $72,000 and $108,000. The project’s development group includes leTriomphe; Cisneros’ California-based real estate investment firm CityView; Our Castle Homes, a for-profit developer of affordable housing; and American Sunrise Communities, a non-profit from San Antonio also founded by Cisneros works with first-time homebuyers.
“We first offered these units for sale in May of last year and then were hit with the housing finance crisis,” said leTriomphe CEO Stewart Juneau. “We have spent almost a year trying to convince banks and other lenders to provide loans to people in our area with less-than-perfect credit scores.”
The NACA solution allows home buyers who don’t have ideal credit but do have a stable source of income to lease their home for up to 18 months while they repair any credit issues, and then convert the lease into a no down payment, 30-year fixed-rate mortgage at one percentage point below prime rate. American Sunrise Homes will also offer credit counseling to residents of The Gates on Manhattan.
While the New Era homeowners will have 18 months to work with NACA to correct their credit problems, but agency representatives expect that most households will acquire mortgages in less time. New Era participants’ lease payments will include a reserve fund that they will own to help with their future homeownership expenses such as repairs on their new homes and ‘rainy-day funds’ in case of an emergency.
“Our Castle Homes’ mission is to instill in homeowners the pride of ownership that helps build stable communities where people may co-exist and support each other,” commented Our Castle Homes’ Wojciechowski. “That mission will be realized in New Orleans with New Era. We are looking for other opportunities not only to assist in the rebuilding of this great American city, but also to help families find workforce housing around the country. We welcome other developers to join with us in these public/private partnerships that bring all of our resources to bear on the nation’s housing crisis.”
Carl Brown, one of the first residents of The Gates on Manhattan participating in New Era commented that the program gives him a chance to own his first home in an environment where he didn’t believe that was possible.
“I know that banks aren’t anxious to help people like me who had problems making a few payments on time after the hurricane,” said Brown while settling into his new three-bedroom home with his daughter and granddaughter. “Because I’ll be paying $830 a month instead of $1200 a month to rent somewhere, I will be saving almost $4500 a year and building equity for myself and my family.”
