Public sources of funds used to acquire and rehab vacant and blighted homes have been a mainstay for NCST community buyers, particularly municipalities and non-profit housing developers. Federal housing programs such as the HOME Investment Partnership program, Community Development Block Grants, and of course the Neighborhood Stabilization Program have invested billions of dollars into affordable housing activities across the country.
However, sharp declines in federal spending and state/local budget cuts have led to severe reductions (and, in the case of NSP, complete elimination) in many federal affordable housing programs. The Federal HOME program budget, for example, fell by 62 percent between 2005 and 2015. Yet many NCST buyers still use public sources of funds – including Federal, State and local monies – to advance their mission of providing decent, affordable housing to low- to moderate-income families.
NCST strives to support buyers using these funds by giving them priority over buyers using non-government funding sources in purchasing properties through REOMatch, which helps them meet the strict spending timelines and other requirements such as housing type, geographic area, end-use disposition and income guidelines.
Below are two examples of community buyers who are successfully using these funds:
- Housing Initiative Partnership (HIP) works to help meet the needs of low- to moderate-income residents of Prince George’s County, Maryland. Rising rents in this county adjacent to the District of Columbia means many residents – more than 41% – meet the definition of “cost-burdened” by spending more than 30% of their monthly income on housing costs. In 2017, HIP received $720,000 in CDBG, HOME and NSP funds, which they used to acquire five homes through the First Look program. These homes were then rehabbed and sold to local families with incomes below 50% of area median income ($55,100/family of 4).
- St. Joseph’s Carpenter Society in Camden, New Jersey, has received over $585,000 in State Neighborhood Revitalization Tax Credits to support its work acquiring and rehabbing distressed homes in East Camden, where the median household income is $26,214. Pilar Hogan-Closkey, Executive Director of St. Joseph’s, said, “NCST’s programs allow us to acquire homes before cash investors, and that early access, combined with the tax credits, gave us the opportunity to purchase and rehab 10 homes into which we’ve placed families who earn between 60-80% of AMI.”
A number of cities also are channeling their limited Federal allocations to community partners that create affordable housing opportunities. Cincinnati recently allocated $4 million from city coffers to community organizations to encourage rehabilitation of the city’s most distressed neighborhoods. Increasingly, state and local municipalities are establishing housing trust funds to provide a dedicated source of funding for affordable housing.
As we celebrate National Homeownership Month, it’s important to acknowledge the role public financing plays in revitalizing and stabilizing low-to-moderate income neighborhoods. With increasing threats to public funding for affordable housing, it’s crucial that NCST buyers can leverage these sources, along with private capital, to create positive housing outcomes for their communities. I encourage you to support advocacy efforts at both the local and national level that raise awareness of the importance of public investment for affordable homeownership.
Kathy Carter serves as a Community Development Manager (Northeast/Mid-Atlantic Region) for NCST.