State College will apply to receive up to $600,000 in newly available state funding for first-time homebuyer projects in the borough.
Borough council on Monday unanimously approved the application for $500,000 for two acquisition and rehabilitation activities for first-time homebuyer programs and up to $100,000 in Community Housing and Development Organization (CHDO) operating funds.
The Pennsylvania Department of Community and Economic Development has made HOME Investment Partnership Program (HOME) funds available for the first time to municipalities, like State College, that already receive a direct HOME entitlement from the U.S. Department of Housing and Urban Development of less than $500,000.
The state program previously only made the funds available to local governments that are not HUD participating jurisdictions.
Funds will be sought for the borough's two Community Development and Housing nonprofit partners, State College Community Land Trust (SCCLT) and Temporary Housing Foundation (THF). Each would receive $235,000 to acquire and rehabilitate properties that would be offered as affordable housing for qualifying first-time homebuyers. The borough would receive $30,000 toward administrative expenses to support the first-time homebuyers program.
An additional $100,000 for Community Development and Housing operating funds also is part of the application.
Federal HOME funding for SCCLT and THF was $320,531 in 2017. Though the amount of the grants has fluctuated over the years, it's seen an overall decline since a high mark of $566,000 in 2003, while home prices in the borough have steadily increased.
The new state funds would allow THF and SCCLT an opportunity they would not have otherwise had to buy another home and sell it to a qualifying first-time homebuyer at an affordable rate. THF's Morgan Wasikonis said at a public hearing on the application last week that the new availability of the state funds was unexpected and welcome.
"The funds we use right now become more and more limited each year and the prices of the homes we’re trying to buy and sell become more and more expensive," she said.
"We would probably have to wait another year and a half to purchase a home for the program because the funds we get in October would not be sufficient. Having these would allow us to move forward and those proceeds are used to further benefit affordable housing opportunities and options in the borough. It gives us a lot more of a chance to move forward with some of those projects."
Susan Venegoni, SCCLT board president, also noted that funding and home prices have trended in opposite directions, and that has been compounded by the non-profit organizations often having to compete against investors for properties.
Even as it was facing decreased funding -- total HUD funding for the two programs dropped by $21,000 from 2016 to 2017, and has declined by $83,000 since 2014 -- SCCLT remained committed to providing affordable housing options in State College.
"The Land Trust is strong and resolute in carrying out our mission," Venegoni said. "We have gone through a strategic planning process this year so even with the reduced funding we were facing we will continue forward with our work increasing diversity in the neighborhoods and providing home ownership opportunity for people who want to put down roots in the borough."