Background

At the Community Development Block Grant (CDBG) public hearings held on January 13, 2014, the Housing Commission was asked to consider whether the Group Home and Transitional Housing Rehabilitation Program could include a repayment provision should the property be sold. The stated concern was to insure that the Village’s investment would stay in the Village and that the public would receive the intended benefits of the investments in the residences.  

The Housing Commission discussed this matter and made a recommendation to the Village Board concerning terms for financial assistance provided under the program. On May 5, 2014, the Village Board adopted the terms below for assistance provided under the Group Home and Transitional Housing Program.  The terms are substantially those recommended by the Housing Commission with one small modification to require Village Board approval in term 3.

1. One-third of the funded amount for each project would be provided as a grant.

2. Two-thirds of the funded amount for each project would be provided as a 0% interest loan, with repayment deferred and due in full when the improved property is sold or ceases to be used primarily for a CDBG-eligible purpose. 

3.   Upon the occurrence of a condition that makes the loan due, the agency would have the option to request from the Village Board that the lien be transferred to another property in Arlington Heights that is being used for a CDBG-eligible purpose.   

Prior to the adoption of this policy, CDBG funds had been provided as 100% grants to agencies for the remodeling of group homes and transitional housing.  

Since the adoption of the May 5, 2014 terms, two agencies have utilized CDBG funds under these terms to make improvements to three group homes. Two other agencies applied for CDBG funding to make improvements to group homes, but withdrew their requests, at least in part due to concerns over the terms of financing.  

At its May 12, 2015 meeting, the Housing Commission discussed the merits of the financing terms and responses of the agencies to the policy.  At the conclusion of the discussion, the Housing Commission approved the motion below recommending a return to the 100% grant funding for renovations to group homes.  The Housing Commission’s discussion may be found in the attached minutes from the Housing Commission’s May 12, 2015 meeting.  

A motion was made by Commissioner Hellner, seconded by Commissioner White, to recommend to the Village Board that the terms of financial assistance under the Group Home and Transitional Housing Program be returned to the 100% grant policy applied prior to the adoption of the 1/3 grant and 2/3s loan policy adopted by the Village Board on May 5, 2014. The financing for the three projects undertaken since the adoption of the 1/3 grant; 2/3s loan policy would be converted retroactively to 100% grants. The HUD requirement regarding reversion of assets for financing in the amount of $25,000 or more would continue to be applied which is required by law. The motion was approved unanimously.