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My hunch is that the economic impact of vacant properties is a more pressing issue for the city than the economic impact of eventual foreclosures. It is something of a band aid that may help some and hurt others. For someone living just above paycheck to paycheck, who has been doing so in a stable manner for a while, if they can maintain or improve their financial outlook for the 10 year period they will do better owning a home through this program than renting (ceteris parabus of course). And that's a big if.

I know there have been issues with developers buying up properties and then sitting on them until the market improves, and the vacancies are dragging the neighborhood down in the meantime, and maybe that's what this plan is meant to address. Stabilize the housing market, if only temporarily.

This program is ideal for people who have some financial assets (savings, etc.) but are underemployed currently. The type of people who have education or experience that will eventually get them a job at the high end of the ranges specified or above them. Someone who gets 25K in disability a year...not so much. You need to be able to afford home maintenance and that's often what sinks home owners.

Why is the city subsidizing house purchases for the people who can't afford to buy a house? Isn't this exactly what led to the mortgage crisis in the first place?

Jersey City Division of Community Development
http://jerseycitynj.gov/hedc.aspx?id=5332

Q: WHO IS A FIRST TIME HOMEBUYER?
A: An individual or family that has either never owned a home or has not owned a home in the last three (3) years and meets the
eligibility requirements based on family size and income.


Q: WHAT IS THE SUBSIDY AMOUNT?
A: Eligible GNHP homebuyers can receive up to 10% of the purchase price for the down payment with a maximum subsidy of $40,000 for down payment and closing costs.


Q: WHAT ARE THE INCOME AND FAMILY QUALIFICATIONS?
A: The family income must be within the following ranges to qualify for assistance:
Family Size
One $24,550 $39,300
Two $28,050 $44,900
Three $31,550 $50,500
Four $35,050 $56,100
Five $37,900 $60,600

Golden Neighborhoods Announcement
http://jerseycitynj.gov/uploadedFiles ... ent/Department_of_Housing,_Economic_Development_and_Commerce/Division_of_Community_Development/2011%20GNHP%20Public%20Notice.pdf

More information:
Jersey City Division of Community Development
http://jerseycitynj.gov/hedc.aspx?id=5332