Housing rehab changes would cut interest ates

November 29, 2006|by JENNIFER FITCH

CHAMBERSBURG, PA. - Changes to the housing rehabilitation program in the Borough of Chambersburg would cut the interest rates for loans made available to low- and moderate-income homeowners.

The Chambersburg Borough Council on Monday also took steps to change the source of funding for its program, which has been in place since 1992.

The funds are currently allocated through the Pennsylvania Department of Community and Economic Development's Community Development Block Grant program. The borough is an "entitlement community," which means it automatically receives funding each year based on population.

The DCED has been encouraging municipalities to apply for its HOME investment partnership program and instead use block grant money for roads and parks, Chambersburg CDBG Administrator Phil Wolgemuth said.


The HOME program is a competitive one for municipalities, he said, and Chambersburg will be favored if it meets a series of targets. Those include providing complete grants for people with extremely low incomes, selecting homes in certain neighborhoods and showing local support of the initiatives.

The local support target will be demonstrated by a $50,000 request to the Franklin County (Pa.) Commissioners, Wolgemuth said. The HOME program could provide $350,000 to the borough annually, he said.

"We envision rehabbing another 17 or 18 houses at least if we get that money," Wolgemuth said.

Homeowners qualify for the borough's housing rehabilitation program based on the federal Housing and Urban Development Section 8 guidelines.

The borough council favored funding the entire cost of projects up to $25,000 for homeowners with an annual income at or below 30 percent of the median income.

The grant would be refunded if the home is sold or transferred within 10 years.

Homeowners with incomes greater than the 30 percent mark but still within Section 8 would have expenses covered up to $10,000. A loan could be issued at 3 percent interest for up to $15,000 more.

Chambersburg is one of five communities in the state with a loan option, Wolgemuth said.

The grants and loans can be used to bring a home up to code standards. Past projects have included roofing, siding and plumbing repairs. All homes also must be brought into compliance with the federal lead-based paint regulations.

"We're not just benefiting the person doing the rehab. We're benefiting the whole neighborhood," Councilman Glenn K. Manns said.

The Borough of Chambersburg has allocated more than $800,000 to 125 homeowners since its program began.

"Currently we're finishing two duplexes," Wolgemuth said.

Council President William McLaughlin praised lowering the loan interest rate from its prior 10 percent to 3 percent paid over 10 years.

He said retirees raising grandchildren will benefit from the lower-interest loan.

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