Stonington — The town will launch a loan program on Thursday that will help low- and middle-income households make improvements to their homes they otherwise couldn’t afford.
The Housing Rehabilitation Loan program, which is funded with $150,000 in US federal bailout money, is designed to improve access to quality housing.
First Woman Select Danielle Chesebrough originally proposed that the city use $500,000 of its $5.2 million in ARPA funds, but the Finance Council reduced that request to $150,000 to fund the pilot program.
“Programs like this have the potential to not only address critical security issues in a home, but also dramatically improve the physical and mental well-being of its residents. We look forward to being able to open doors to repair opportunities that will keep residents in their respective homes for many years to come,” said City Social Services Director Leanne Theodore in the announcement. program.
In exchange for a loan to make specific improvements to the home, the city will hold a mortgage on the property and have an affordable housing deed restriction — meaning the property must remain affordable — for the term of the loan. Housing is defined as affordable when it is “sold or rented at or below a price for which a household pays 30% or less of its income”; in Stonington, the median family household income is $79,250.
Those who get loans can repay them through a payment plan, or repay them when the property is sold, refinanced, or transferred.
Two types of loans are available:
- Deferred interest-free loans are available for homeowner households earning 80% or less of the median household income for the Norwich-New London Metropolitan Statistical Area, or $78,500 for a family of four, according to market research of housing conducted as part of the creation of the city’s recent affordable housing plan.
- Low-interest loans are available to investor-owners whose tenants meet income criteria and agree to specific affordable rent requirements. The interest rate is 3%, payable monthly over a term of five years.
Program details, including how to apply, will be available on the city’s website, stonington-ct.gov, at the end of the week. Anyone interested in learning more about the program can also contact the Department of Social Services at (860) 535-5015.
The Department of Social Services will also be available to meet with landlords and tenants to explain the program.
Applications will be considered on a first-come, first-served basis, with one exception. An applicant requiring rehabilitation work to correct an emergency condition that affects the health and safety of the household will be moved to the top of the list.
“Launching the new program took 11 months of hard work by many people. We are so lucky at Stonington to have such dedicated staff who genuinely care about the community they serve,” Chesebrough said. “We are optimistic about the positive impact this new program will have and its potential to be sustained over time.