New and Expanded Housing Programs
Rehabilitation Programs
Expand Rental and Owner Rehab Programs
Issues/Opportunities Addressed:
Timeframe for Action: Short to Mid Term
The City of Nashua currently offers two separate
residential rehabilitation programs through the City's
CDBG Housing Program. The first is an owner-occupied
Housing Improvement Program (HIP) which provides 0%
interest loans to correct code, safety, health, or
accessibility issues. Examples of eligible activities include
roofs, electrical, plumbing, wheelchair ramps and more.
The loans are up to a maximum of $40,000 for the first
unit and $5,000 for each additional unit. Eligibility for the
program is restricted to owner-occupied properties, the
owner must be of low-moderate income (at or below 80%
of AMI), and the structure cannot contain more than four
units.
The City also began offering a rental rehab program to
assist landlords with correcting serious code, safety,
health, or accessibility issues. This program is targeted to
addressing critical structural needs such as roofs, heating,
and structural code deficiencies. The loans are up to a
maximum of $20,000 for the first unit and $5,000 for each
additional unit. Eligibility for the program is restricted to
owners who DO NOT reside at the property, tenants must
be low-moderate income, and the structure cannot contain
more than 8 units. Property owners must contribute 10%
of the total contractual cost as well.
Nashua Housing Study - 72
Given the estimated rehabilitation needs of property
just in the Downtown area alone (estimated at $12
million), these two rehabilitation programs are of
critical importance to improving and maintaining
higher quality affordable housing across the City.
Currently the City is funding between 4 and 13 units
per year with average loan amounts between $8,500
and $15,900. The program is funded through the City’s
annual allocation of federal CDBG funds which is good
use of those funds, but the flexibility of those funds
can create competing priorities potentially lowering the
amounts available for rehab. CDBG funds, along with
many federal funding sources, have been shrinking
leaving entitlement communities with less money.
Relying on these funds alone may leave the City with
fewer dollars for not only the rehab programs, but
other City programs and priorities too.
Keeping this programs in place and making them
financially sustainable over time should be a priority
for the City. One way to do that is to find ways to either
leverage other funding sources or find ways to require
payment of the loan over time to build a revolving
source of capital.
ASSOCIATES INC
The City should convert the current deferred home repair
loan programs into a 0% amortizing loan program, which
will allow the City to leverage additional resources before
properties turn over — expanding the pool of capital that can
support further home repairs. Other programs that have
converted from home repair grants or deferred loans to
repayable loans have proven to have similar demand levels
and higher productivity while still serving very-low, low, and
moderate-income level households. The City may also
consider charging a small interest rate (1%-2%) for
moderate income households and 0% for low to extremely
low-income households.
The City could also consider using the Affordable Housing
Trust as a leveraged funding source to pair with CDBG,
Bond Funds, philanthropic grants, and private capital to
deploy more resources in a consistent manner for home
repair programs. Coupling the rehab programs with
owner/investor education and conversations around the
long-term affordability of units could be helpful in early
identification of property sales or conversions of affordable
units to market rate. Early identification of these issues
could help the City approach other funders such as local
banks looking to use Community Reinvestment Act (CRA)
funds to keep units affordable over time.
