Funding Sources
Local Sources
Federal Sources
Community Development Block Grants (CDBG), allocated through
the Chapel Hill Town Council
HOME Funding, allocated through the Orange County HOME
Consortium
Using
local revenue sharing funds, in 1973 the Town Council established the Housing
Loan Trust Fund to assist low-income families with the purchase of a new home
or to renovate an existing home. The
Housing Loan Trust Fund has since been used to support a variety of Community
Development projects, including deferred second mortgage loans for Tandler and
Culbreth Park programs and construction loans to EmPOWERment Inc. and Habitat
for Humanity. The Council authorized
these funds to be converted into deferred second mortgages for the
homebuyers. Funds have been recently
provided to the First Baptist Church for assistance with developing a Section
202 Elderly Housing application for submittal to the U.S. Department of Housing
and Urban Development.
On January 28, 2002, the Council budgeted $150,000 of
the $250,000 fund balance of the Housing Loan Trust Fund to create the
Revolving Acquisition Fund. At that
time, it was recommended that there be a residual reserve of $100,000 to
account for future anticipated recurring expenditures and to provide a safety
cushion. It was also noted to the
Council that if the Housing Loan Trust Fund was used to establish a Revolving
Acquisition Fund, funds likely would not be available for any other affordable
housing projects typically funded through this source for at least one to two
years. It was further explained that
revenue sources (typically program income from Tandler and Culbreth second
mortgages, or other loans made by the Council) would eventually replenish the
Fund balance and be available for other projects. Click here to see the Guidelines of
the Housing Loan Trust Fund.
The main goal for the Revolving Acquisition Fund is
to preserve owner occupied housing for affordable housing purposes. A Revolving Acquisition Fund provides
non-profit affordable housing providers a source of funds that can be accessed
quickly to purchase properties that might otherwise be sold to non-lower income
households or be used for relatively high cost rental housing. This fund
assists with maintaining or creating additional affordable homeownership
opportunities in Chapel Hill. A
Revolving Acquisition Fund prevents the loss of some single-family homes
through conversion to rental units specifically for properties where the Town
has a right of first refusal. A right of first refusal is a legal, recorded
document that would require a property owner to notify the Town or a designated
non-profit agency prior to placing their home on the market and give the Town
or the designated agency the first opportunity to purchase the house for fair
market value. Some homes purchased with
these funds may require renovation and/or second mortgage assistance so that
the property is more affordable to a household earning less than 80% of the
area median income by household size.
Funds from the Town’s Housing Loan Trust Fund and/or the Community
Development Neighborhood Revitalization program are used to provide this
subsidy. (Click here to see the Town’s Memorandum and Resolution for the
Revolving Acquisition Fund.)
Community Development Block
Grants (CDBG), allocated through the Chapel Hill Town Council
Congress
established the Community Development program in 1974 by consolidating a number
of grant programs into one “block grant”.
The primary objectives are the “development of viable urban communities,
including decent housing and a suitable living environment and expanding
economic opportunity, principally for persons of low and moderate-income.” (Housing and Community Development Act of
1974) To receive future Community
Development Block Grant funds, Chapel Hill must certify that its overall
program carries out these objectives. In
addition, each Community Development Block Grant activity must:
1. Benefit low-
and moderate-income persons (80% of median income and below); or
2. Aid in the
prevention or elimination of slums and blight; or
3. Treat urgent
needs posing an immediate threat to public health and welfare.
Community
Development Block Grant funds may be used for the following types of activities
(provided national objectives are also met):
·
acquisition of property
·
disposition of property
·
public facilities and improvements
·
clearance, demolition and removal of buildings
·
site improvements
·
some public services (subject to some limits in regulations)
·
relocation
·
housing rehabilitation, preservation and code enforcement
·
economic development activities
·
planning and administrative costs
CDBG Quickfinder: An overview of federal objectives,
eligibility, standards, and requirements developed by Training & Development Associates, Inc.
Community
Development Block Grant (CDBG): Information about the CDBG from HUD’s
website. (http://www.hud.gov/offices/cpd/communitydevelopment/programs/cdbg.cfm)
HOME Funding, allocated through
the Orange Country HOME Consortium
In 1992,
Chapel Hill, Carrboro, Hillsborough and Orange County formed the Orange County
HOME Consortium, with Orange County acting as the lead entity. The Consortium was established as a local
partnership to develop affordable housing throughout Orange County. In the first year, the Consortium received
funds through the State’s HOME Program.
Since 1995, the Consortium has received funds directly from the
Department of Housing and Urban Development (HUD) through the federal HOME
Program.
The U.S.
Department of Housing and Urban Development awarded the Orange County HOME
Consortium $481,000 for fiscal year 2002-2003. In addition, the
participating municipalities are required to contribute a 25% match of the
grant funds after subtracting administration costs of $48,100. The total
match requirement is $108,225. The Town’s contribution to the matching
funds is 41% or $44,372. Orange County, Carrboro and Hillsborough will
contribute $43,290, $15,152 and $5,411 respectively. In addition, the
HOME Consortium has received $73,992 of HOME program income from the repayment
of second mortgages issued with HOME funds in prior years. Therefore including program administration
(allocated to the Orange County Department of Housing and Community
Development), the Council will be planning activities for a total of
$663,217.
HOME
Quickfinder: An overview of federal objectives, eligibility, standards, and
requirements developed by Training &
Development Associates, Inc.
HOME
Program: Information about the federal HOM program from HUD’s website. (http://www.hud.gov/offices/cpd/affordablehousing/programs/home/index.cfm)