Selbyville Town Council members unanimously agreed Monday to apply for community development block grants (CDBG) for the town again this year. The grants help low-income property owners and landlords with low-income tenants make needed refurbishments and improvements to their homes.
The grant pool is $1.9 million, shared between Kent and Sussex counties, among both municipal and county governments. Housing rehabilitation and demolition makes up 70 percent of the total grant allocations, while 30 percent goes toward infrastructure projects such as sidewalks, streets, water and sewer.
Municipalities receiving the infrastructure grants are required to make a match of cash ranging between 10 and 20 percent of the total cost or in-kind matches (value of work done in-house) of 15 to 25 percent.
Al Phillips of the Sussex County Community Development and Housing Division explained the basic of the program to council members and those in attendance at the Dec. 5 council meeting and public hearing on the issue.
He noted that while funds were available for grants to those with very low income under the HPG program, those funds were limited compared to the CDBG program with its slightly higher income qualifications.
To be eligible for the HPG program, a family of four could make no more than $27,550 in annual income. The same family qualifies for CDBG at $44,100. All the grants are made on a first-come, first-served basis, though Phillips noted emergency cases (such as the need for a handicapped access ramp) could be pushed through more quickly.
Phillips said the typical use of the grants was for repairs to roofs, replacement of windows, floors and doors, and connection to utilities. The average grant is $15,000.
Applicants for CDBG funds must be Sussex County property owners and permanent residents of the county. There is also a limit of $15,000 in liquid assets, and applicants must be otherwise unable to make the necessary improvements or secure the credit necessary to do so. The home must also be insured or insurable and all taxes must be current.
The string attached is a non-interest-bearing lien, to help guarantee that the property owner will remain in the home on a long-term basis once the refurbishments are made. The amount and term of the lean is based on the property owner’s age. Those younger than 62 will have a 10-year lien, while those 62 or older have a five-year lien.
Phillips noted that the funds spent on rehabilitation had increased over the years, with a total of $605,630 spent in Selbyville grants for both rehabilitation and infrastructure over the last 10 years, in 100 projects.
The town is on the upper end of the scale in terms of the percentage of its residents with low incomes, according to Phillips. Some 43.6 percent of Selbyville residents have low or moderate incomes, compared to 12.3 percent in South Bethany, 18.5 percent in Bethany Beach, 21.3 percent in Fenwick Island, 24.8 percent in Ocean View, 35.5 percent in Millville and 38.9 percent in Dagsboro.
Frankford has an even higher percentage of low- to moderate-income residents, with 49.6 percent designated as such. Georgetown, Laurel, Bridgeville and Delmar all top the list with around 55 percent of low- to moderate-income residents. (All figures based on the 2000 Census.)
For those with slightly more to work with as far as finances, Phillips also mentioned the Housing Rehab Loan Program (HRLP), which provides low-interest loans instead of grants.
The loan amounts range from $2,000 to $35,000 and are made at a 3 percent interest rate over a 15-year term. A family of four qualifies for the HRLP at $51,405 or less in annual income. There are some non-refundable fees involved in applying for HRLP loans, as well, and the core part of the program focuses on owner-occupied properties.
However, Phillips noted there is also an investor/rental property aspect to HRLP, and that program qualifies applicants based not on the owner’s income but upon the tenants’ income and the amount of rent paid each month.
For example, a property owner renting to a family of four whose income was less than $44,100 would potentially qualify. Rent on a four-bedroom dwelling would have to be less than $816 per month, and on a two-bedroom dwelling, less than $582 per month.
Phillips emphasized that the monthly repayment amount on the low-interest 15-year loans could be quite reasonable, at only $13.81 per month on a $2,000 loan or $207.17 per month on a $30,000 loan.
Again, one qualifier is being unable to obtain the funds through another method. But, since the HRLP relates to loans rather than grants, simply being unable to obtain the same amount at a 3 percent interest rate (or lower) would satisfy that requirement.
Mayor Clifton Murray noted that the CDBG program has been very successful for the town, saying they’d had a lot of luck with rehabilitating homes in Selbyville with funds obtained via CDBG. The council members voted unanimously to make the application again this year.
Property owners seeking more information on the various programs are encouraged to contact the Sussex County Community Development and Housing Division in Georgetown at (302) 855-7777.