Called the Neighborhood Revitalization Program, ACFCU and its partners will leverage those funds toward two primary goals: Improve neighborhoods through home renovation projects and provide mortgage loans to assist families gain home ownership.
“Homeownership is transformative,” ACFCU CEO Ron Scott said. “It transforms families generationally by allowing them to build wealth and stability. When homeownership numbers increase in concentrated areas, it transforms neighborhoods.”
This grant is the third affordable homeownership-related grant, totaling $4.4 million, that ACFCU has received in the last three years. The grant was made available through the Capital Magnet Fund managed by the U.S. Department of Treasury’s Community Development Financial Institutions Fund.
The grant permits mortgage loans providing up to 110 percent of the home’s value. The extra 10 percent in excess funding will be used to fund renovations, energy efficient upgrades and closing costs.
Half of the 103 loans will be offered to families making 80 to 120 percent of area median income and the other half will be offered to those making 51 to 80 percent of median income. Area median income for a family of four in the Tri-Cities is in the $54,000 range.
Before receiving the mortgage, borrowers must pass an eight-hour, U.S. Department of Housing and Urban Development-approved homeownership class to ensure they understand the program and what they will be responsible for.
An estimated average loan size will be around $110,000, and ACFCU officials expect the $1 million grant will create more than $10 million in economic impact.
This program will coincide with the Opportunity Zones initiative, created through the Tax Cuts and Jobs Act, that spurs capital investment through federal tax credits. The Opportunity Zones initiative and the Neighborhood Revitalization Program will focus on neighborhoods in the same areas, ACFCU officials said.
“This is a heavy lift,” Scott said. “It’s hard to transition substandard, investor-owned rental houses to good-quality homes that low- and moderate-income families can afford. We believe the transformation for families and neighborhoods is worth the effort.
“Homes that could be improved and owner-occupied often are purchased by investors who rent them out,” Scott said. “This usually means fewer improvements, less positive change in neighborhoods and fewer people with the potential to successfully transition to ownership having the opportunity to do it.”
ACFCU will be partner with the newly-formed nonprofit Appalachian Opportunity Fund to engage community members in targeted neighborhoods. Appalachian Opportunity Executive Chairman Adam Dickson said he believes the Langston neighborhood will be a good fit for the Neighborhood Revitalization project.
“Working with community leaders around the Langston High School renovation project in Johnson City, we’ve learned how important it is to make sure all voices are heard,” Dickson said.
“We hope to take our experiences with the school project, apply them to this effort to gain trust and buy-in, and repeat that across neighborhoods throughout the Tri-Cities.”
John Birchette IV, owner of Birchette Mortuary, grew up in the Langston neighborhood and said he hopes the funds can be used to make the neighborhood look like it did when he was growing up.
“I’m excited about the potential. This is where I rode my bike and where my friends lived. It was a community then, and now we’ve gone away from that and you see what has happened to the neighborhood,” Birchette said, standing next to a dilapidated two-story house on Welbourne Street.
“I’m excited about the possibility of things returning back to the way I remember them.”
Johnson City Vice Mayor Jenny Brock said the city could also focus on these same neighborhoods by investing in infrastructure improvements, such as sidewalks, streets and lighting.
“Then we will truly see revitalization projects that make remarkable differences,” Brock said. “Property values should increase, providing homeowners greater equity in their homes. We applaud ACFCU for making innovative investments in our community.”
ACFCU and the Appalachian Opportunity Fund are seeking additional partners and grants to acquire labor and materials at or below cost.
For anyone wanting more information about the program, Scott said to call Dickson at 423-676-5547.