Sussex housing trust fund to start in 2022
After meeting with stakeholders, Sussex County Community Development and Housing Director Brandy Nauman presented several amendments regarding the new county housing trust fund to Sussex County Council during its Nov. 16 meeting. The fund process will begin in January 2022.
Nauman said $500,000 was placed in the fiscal year 2020 county budget for the fund to address the lack of affordable housing in the county.
Nauman said $400,000 has been set aside to assist nonprofit affordable-housing developers and providers in a development loan program with up to $100,000 per project. The 5-year loans are interest free, and repayment can be deferred for one year. Funds can be used for pre-development expenses such as engineering and architectural costs, and capital costs such as site improvements.
Funds will be available through an application process with priority given to applications that repurpose or redevelop existing units or structures, purchase incomplete subdivisions, and assist households earning less than 50 percent of area median income.
Nauman said stakeholders told her the $100,000 cap per project was not sufficient for multimillion-dollar projects, and the county should explore the use of American Rescue Plan Act funds to expand the program and allow for higher project loan amounts. They also said the program should award grants instead of loans.
Nauman said the fund would remain as a loan program for the pilot year. She said if rescue plan funds can be used to expand the amount in the trust fund, staff would revisit allowing more flexibility in the amount of money that could be loaned.
Under the $100,000 direct homebuyers assistance program, up to $10,000 per application will be awarded for closing and settlement costs. Funds will be disbursed through a settlement agent. Nauman said based on stakeholders' feedback, funding eligibility will be for homebuyers earning less than 80 percent of area median income, which is $60,100 annually for a family of four.
Stakeholders, including Realtors, said the proposed $10,000 cap on closing and settlement costs is not sufficient in today’s market and should be increased to a minimum of $25,000 with a preferable amount of $50,000.
Nauman said the $10,000 cap will remain during the first year of the pilot program.
A housing fund advisory group consisting of Nauman; Gina Jennings, county COO/finance director; Bill Pfaff, county economic development director; Sarah Rhine, Housing Alliance Delaware policy director; and Amy Walls, Discover Bank principal, community reinvestment, will review and evaluate applications.
