ARPA funds support affordable housing

Using American Rescue Plan Act funds, the Delaware State Housing Authority has embarked on a campaign to address the affordable housing crisis across the state. The state has received $925 million in federal funds.

Three Sussex County nonprofit housing agencies will receive $9.9 million. Those include:

• National Council on Agricultural Life and Labor Land Bank – $4 million to purchase property in Sussex and Kent counties for future affordable housing development

• NCALL – $2.9 million to leverage $5 million in funding from the U.S. Department of Agriculture for the development of 40 affordable rental housing units for poultry industry workers

• Sussex Habitat for Humanity – $3 million to assist with Kimmeytown revitalization in Georgetown and develop an affordable homeownership creation project, which will include construction of 27 new affordable homes, and additional smaller projects.

Over the past 30 years, Habitat for Humanity, based in Georgetown, has provided affordable housing for more than 150 families throughout the county, using mostly volunteer labor. The organization also offers home repair, accessibility, energy efficiency and financial coaching programs.

NCALL, also based in Georgetown, offers technical assistance to support nonprofits developing or preserving affordable housing. Its programs include homeownership and financial education, foreclosure prevention, rental assistance, a loan fund and real estate development.

Statewide programs for housing

Also, the housing authority will use ARPA funds to develop a multitiered approach to address the affordable housing crisis across the state. The authority will create the following programs as part of this initiative, and will administer the programs through 2026:

Catalyst Fund (expected launch this summer)

Creating and preserving affordable homeownership opportunities through the acquisition and rehabilitation of vacant homes in Delaware’s neighborhoods. These funds will be administered in partnership with Cinnaire, a certified community development financial institution that offers lending options for community development construction. Cinnaire will offer construction lending by leveraging ARPA funds to incentivize for-profit and nonprofit developers to purchase, renovate or replace vacant and blighted properties.

Market Pressure Relief Fund (expected launch this summer)

Relieving economic cost pressures on Delaware’s affordable housing development community. This will provide additional financing to owners of affordable multifamily rental projects currently under construction that have faced construction cost increases due to supply chain disruptions and inflation to ensure these projects are completed.

Accelerator Fund (expected launch fall 2022)

Leveraging once-in-a-generation funding available to unlock Delaware’s development potential. The fund will provide an incentive to market-rate rental developers with planned construction projects to provide affordable rental units in their new or renovated properties.

Developers will receive an upfront payment from the housing authority, funded by ARPA, which will offset construction costs. As part of the funding agreement, developers will commit to an affordable monthly rent for a specified number of units in a project that would otherwise be exclusively market rate. This new program will also provide additional funds for traditional affordable rental developers that qualify for the federal low-income housing tax credit.

Preservation Fund (expected launch spring 2023)

Funds will offer financial incentives to ensure nearly 1,000 existing affordable rental units eligible to convert to market rate instead remain in the affordable rental inventory.

“We are investing in affordable housing development across our state so that more Delaware families have access to safe, affordable housing,” said Gov. John Carney. “We are using ARPA funds to make sure these affordable housing construction projects get through the finish line, support more Delawareans in becoming homeowners, and revitalize communities that were hit hard by the COVID-19 pandemic.”

Mortgage relief program

The housing authority has launched the Delaware Mortgage Relief Program, which can provide up to $40,000 in financial assistance to eligible households who experienced a COVID-19-related financial hardship that resulted in mortgage delinquency or forbearance. This program is supported by the federal Homeowners Assistance Fund, which was created under ARPA and distributed to states to provide relief for homeowners. Delaware received $50 million. Homeowners can apply for the program by going to demortgagehelp.com.

For more information, sign up for the housing authority's newsletter at destatehousing.com/NewsAndEvents/newsletters.php.

Go to de.gov/rescueplan to learn more about Delaware’s ARPA investments.