The Greensboro Housing and Neighborhood Development Department is planning on changing the current home repair loan program to a home repair grant program.
The presentation on this new program was made at the Greensboro City Council work session on Thursday, Oct. 27.
Not a single member of the City Council asked about the financial aspects of turning a loan program into a grant program. With a loan program, one assumes that at least some of the loans are repaid. A grant program is simply a give-away – no money ever comes back to the program or the city.
The benefits of going from a loan program to a grant program are fairly obvious. The top reason according to the Housing and Neighborhood Development Department is, “Does not impact a homeowner’s equity.”
The other benefits of giving money away instead of loaning money for home repairs are:
- Heir property, title issues, marital status, insurance and credit qualification are not barriers.
- Less likely to trigger expensive federal rules – lead paint, historic windows/doors, relocation.
- Can significantly increase number of units completed without increasing staff capacity
- Lower costs per unit spreads the limited assistance to more eligible applicants.
- Allows for more geographic targeting, leveraging the impact of more improved units in a concentrated area.
- Grant terms match better with other available program resources.
So, there is less paperwork and less hassle for both the Housing and Neighborhood Development Department and the applicant, but there is nothing in the presentation about how giving away money instead of loaning money benefits the city.
To qualify for the program the household income has to be under 60 percent of the area median income, the homeowner must have a clear title and have lived in the home as their primary residence for at least five years. The homeowner may not own additional real estate, must not owe the City of Greensboro or Guilford County any money and the home has to be in the city limits of Greensboro.
The City Council, without receiving information about the financial implications of the program, expressed full support of going from a home repair loan program to a home repair giveaway program.