News

Lebanon applies for affordable home programming grant

Written by John Latimer, Lebanon Daily News | Sep 30, 2015 1:00 PM
lebanon city council graphic.jpg

(Lebanon) -- Lebanon City Council on Monday night authorized Mayor Sherry Capello to apply for a $300,000 HOME grant from the Pennsylvania Department of Community and Economic Development. 

The funding, which comes through the U.S. Department of Housing and Urban Development, would be used to fund Lebanon's First Time Homebuyer and Home Rehabilitation programs for low-income residents.

Not everyone was in agreement that the city should apply for the competitive grant that requires no matching funds.

Councilwoman Pat Royer voted against it, stating she feels the city has enough affordable housing and does not want to be beholden to the state and federal government, which have declared the city needs more.

"I am tired of the federal government and the state commonwealth telling us we don't have enough housing for low-income people," she said passionately, as she cast her vote. "I think we do. No! Move on."

Capello defended applying for the grant, claiming that the housing programs are beneficial because they increase the number of owner-occupied homes.

"Research shows that people who own their homes -- some of them, I don't want to stereotype people -- tend to take better care of their homes. And a lot of other positive things come out of people owning their homes and having pride in their neighborhoods," she said.

The last time the city applied for a HOME grant was in 2009 when it received $500,000, the mayor said.

The city is applying for a lesser amount this time because the funding for the program has been cut in half, and there is now a requirement that it be allocated within three years. No time limit existed before, Capello said.

Betsy Bowman, director of the Lebanon County Redevelopment Authority, explained to council during last week's public hearing on the grant application that the city will be making some changes to both programs. Some because of rule changes and others to boost their popularity.

As it currently runs, the First Time Homebuyer Program gives all qualifying, income-eligible buyers 17 percent of the down payment on homes with a maximum value of $100,000. The city then collects the money and returns it to the program when the house is sold.

Under new federal guidelines the no-interest loans will no longer be distributed in a one-size fits all fashion, Bowman said. Instead, a tiered-system will be developed to direct more of the program's funds to participants with the lowest incomes, typically below 50 percent of the poverty level.

"The idea being, if you have a higher income you don't have as great a need, and you may have been able to accumulate some money for your down payment," she said.

Details on how the funds will be allocated under the tiered system must still be worked out, Bowman said.

The First Time Homebuyer program surged in popularity several years ago when the government gave tax breaks to first time buyers, said Capello. But it had been waning in popularity until this year, when it got a boost from a federal program called "First Front Door" that gives assistance to offset settlement costs.

So far this year, 12 residents have purchased new homes through the program, and four more are in the process of buying.

The city's Home Rehabilitation Program also has waned in popularity over the last several years.

Bowman explained that the 3 percent loans the city gives moderately low-income (50 to 80 percent of poverty level) homeowners are not much better than the rates for home equity loans, which come without the city's requirement that the home must be brought up to code.

"Whereas someone can get a home equity loan and only address one or two things they think are very important, we want to see everything repaired at the property at one time," she said.

The program also suffered because moderate-income homeowners received traditional loans of up to $25,000 with a monthly payback schedule. That will be discontinued, Bowman said.

To entice more moderately low-income property owners to take advantage of the Home Rehabilitation Program, they will now be given the same no-interest, deferred-loan terms the lowest income participants receive, which will allow them to pay it back at a later date or when the home is sold.

"The rehab program has been operating the last few years with CDBG (Community Development Block Grant) money and has been operating pretty much as an emergency assistance program, where we are dealing with someone who has an immediate need," Bowman said. "We think there is a great need out there, and we'd certainly like to be able to assist more people."


This article comes to us through a partnership between Lebanon Daily News and WITF. 

 

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