Fair Haven is finally receiving the support from Yale and New Haven it has long sought for neighborhood revitalization.

City and University officials announced Monday the inception of the Fair Haven Homebuyer Program, an initiative that will promote home ownership in the Fair Haven neighborhood by providing financial assistance for first-time homeowners and for those who will be displaced when their apartments are demolished to make room for a new K-8 school being built in the neighborhood.

The program is similar to the Yale Homebuyer Program, in which Yale provides no-cost loans to its employees who buy homes in New Haven neighborhoods, although the Fair Haven program announced Monday will not be restricted to Yale affiliates.

Financial assistance will be provided to prospective homebuyers through zero-interest deferred loans of $5,000 each to help pay down payment and closing costs. Those interested must be current on all taxes owed to the city and have a household income at or below 80 percent of the median family income for New Haven.

Twenty percent of the loan will be forgiven each year, so that after five years the homeowner will not have to pay off any of the loan. If the owner sells the home in fewer than five years, he must pay the balance of the loan.

“Home ownership is markedly lower in Fair Haven than in other parts of the city,” said Wendy Clarke of the Livable City Initiative. “People are reinvesting in that part of the city, so we want to turn properties into homes to help stabilize the neighborhood.”

The U.S. Department of Housing and Urban Development is providing $200,000 to fund the program. Yale secured the HUD grant.

Last year, Fair Haven residents were upset their neighborhood was not one of the neighborhoods eligible for the six-year-old Yale Homebuyer Program. In that program, Yale employees can receive up to $25,000 to help buy a home in one of the designated neighborhoods.

Mayor John DeStefano Jr. affirmed the city’s commitment to Fair Haven, the neighborhood about a mile east of the New Haven Green, past I-95.

“The Fair Haven neighborhood is a diverse and vibrant community, but one that has faced many challenges,” DeStefano said. “By providing homeownership opportunities, this program will help revitalize the neighborhood and build on its strengths.”

Michael Morand, Yale’s associate vice president for New Haven and state affairs, said the homebuyer program could serve as a test for similar collaboration between the city and the University.

“When resources become available, we will assess Fair Haven to see if such a project makes sense in other areas,” Morand said. “We’re looking to be both aggressive and creative in supporting home ownership.”

The program continues an ongoing resurgence in the Fair Haven area. James Welter, director of the Fair Haven Development Corporation, said the area is poised to flourish.

“Fair Haven has tended to be a lower-income neighborhood and there was much blighted housing because of this lack of economic strength,” Welter said. “In recent years, we have seen initiatives that have addressed economic conditions and have helped reverse these trends.”

Such programs have included renovation and sale of properties in the Lloyd Street area and a neighborhood cleanup program in Fair Haven this past summer.

Welter said he is grateful for the contributions his community stands to receive.

“Those of us who live and work in Fair Haven appreciate the efforts of the city and Yale to help us revitalize,” Welter said. “We’d like to see these partnerships continue to help create a better Fair Haven.”