Union County Revises Affordable Housing Fund Rules to Unlock $700,000

Nearly $700,000 sat untouched in Union County's affordable housing account while first-time buyers lost bidding wars to cash purchasers and watched Lewisburg-area listings disappear in days. On March 26, the Union County Board of Commissioners voted to rewrite the rules that had bottled up that money for years.

The revisions to the Union County Affordable Housing Fund, administered through the county Planning Department at 155 N. 15th Street in Lewisburg, loosen eligibility criteria, adjust loan structures, and open the door to forgivable mortgage terms that did not previously exist in the program. Commissioner Preston Boop had championed the forgiveness concept during advisory board deliberations earlier this year, proposing a sliding-scale model: five years of residency could erase $5,000 in debt, while ten years could wipe out $10,000. "I like the idea that you have to live there for a certain amount of years for forgiveness," Boop said at January planning sessions. "There are options."

The existing program, on the books since 1996, provides no-interest, no-payment second mortgages capped at $25,000 or 10 percent of the purchase price, whichever is smaller. Applicants must contribute at least 3 percent of the purchase price themselves and cannot earn more than 100 percent of the county median income, which HUD currently sets at $103,600 for a family of four. Despite those terms, the $700,000 reserve had barely moved.

Commissioner Stacy Richards identified a paradox that had frozen the local supply: homeowners who locked in historically low mortgage rates have little incentive to sell. "They have low interest rates on their mortgages, so why move and pay a higher mortgage?" Richards said. "There are a lot of things associated with this, not just that we haven't been using our funds."

Advisory board member Barrick added two more layers: eligible buyers were being outbid by cash purchasers who program participants simply could not match at closing, and high property taxes in the Lewisburg Area School District were pricing out low-income families even when financing was available. Barrick also pointed to a marketing failure. "I think there's not enough information that goes out about this program," she said.

Among the structural changes approved March 26, the county can now consider third-position mortgages, which carry greater risk but expand the pool of eligible buyers. Officials also discussed modeling part of the revised program on Centre County's Construction Acquisition/Rehabilitation for Sustainable Housing initiative, which bundles acquisition and rehabilitation costs into a single loan structure. John Del Vecchio, the Planning Department's administrator for the fund, praised the commissioners for moving forward with the amendments.

Implementation falls to the county's Planning and Economic Development office, directed by Shawn McLaughlin. Updated application forms and revised eligibility guidance are expected in the coming weeks, with the fund's advisory board continuing to recommend adjustments as the county tracks whether the changes translate into completed transactions.