Last night, the Board of Selectmen approved a proposal to provide assistance to Southborough residents financially hit by the pandemic. The program will leverage the CARES Act to help meet rent or mortgage payments.
Selectmen hope to have the program in place in time for applications to be accepted from November 1st (this Sunday) to December 1st.
Selectman Lisa Braccio noted that many Towns are already providing the service. Many are even providing matching assistance from their Community Preservation Act Funds. Currently, selectmen intend only to provide funds for which they can seek reimbursement from the federal government.
The current plans are to allow up to $25,000 for the program. The money will be fronted by the Town’s General Fund. The December 1st deadline would allow the Town Accountant time to file for reimbursement under CARES before it expires at the end of that month. It also allows time to reassess the amount if applications indicate there’s a greater need.
The program isn’t fully authorized yet. There are two more approvals in process, including a second vote (of mostly the same group) on Friday.
The Affordable Housing Trust Fund Committee will meet at noon this Friday to discuss the plan and vote. Braccio said she’ll be seeking authorization to use the Affordable Housing Trust Fund to back the program in case of any reimbursement issues. She also is looking to have fellow Selectman Chelsea Malinowski authorized serve as an additional “check” in the process.
Five of the AHTFC’s seven members are/will be selectmen.* So, passage of the plans is likely, though alterations could be made.
Draft materials were modeled off of Ashland’s documents. Selectmen’s vote last night approved the process outlined by Braccio and the materials (with described revisions). Their vote was contingent on review and approval by Town Counsel. Selectman Sam Stivers also planned to review materials prior to Friday’s meeting to ensure wording is consistent across documents.
The draft requires that applicants must have reduced income attributed to Covid-19. They must not already be receiving government-funded rental assistance. And, they must have been residing in Southborough for at least six months.
Qualified applicants would be eligible for up to two months rental or mortgage assistance (subject to available funding):
- $1200 / month for an efficiency/studio
- $1400 / month for a 1-bedroom
- $1600 / month for a 2-bedroom
- $2000 / month for a 3+-bedroom
Assistance could be used to make payments past due since April 1st. Mortgage assistance could not be applied to escrow or homeowner’s insurance.
To qualify, the total household income for those over the age of 18 must not exceed 80% of the Area Median Income for the greater Boston area adjusted for family size. (Members of/the household that are pursuing postsecondary education on a full-time basis are exempt from being included in the total household income.) A table specified:
Applications will be reviewed by Southborough’s Emergency Fund members. Braccio explained that the group already has procedures in place for other programs assisting residents in need. Members consist of the Director of Youth and Family Services, the Senior Center’s Director and Outreach Coordinator, and the coordinator for the Southborough Food Pantry.
The group will review applications to ensure they qualify and are complete. To ease the burden on the Town Accountant, eligible applications will be redacted (for confidentiality) and forwarded to Malinowski. She will double check that applications are complete with all required documentation. Applications deemed complete will be forwarded to the Town Accountant to process. She will then apply for reimbursements.
To look at the draft materials discussed in last night’s meeting, click here. Stay tuned for news on the final vote and approved versions of documents.
*Technically, four of the five selectmen serve on the 7 person AHTFC. The Town website still lists former Selectman Dan Kolenda as a member instead of Malinowski who was elected to that seat this summer. That will be rectified in a quick BOS meeting immediately prior to the noon meeting. The other two members appointed by the Board are William Boland and Doriann Jasinski.
It’s a good thing to help people stay in their homes during this unprecedented crisis.
But it is unfair to the taxpayers funding this assistance to increase recipients’ net worth by allowing any approved assistance to be used for mortgage principal — which is explicitly allowed in the application. That has the effect of paying off part of the mortgage loan. Paying for principal is a very different thing from paying the lender interest due. The program’s intent is to give the lender incentive to not foreclose. Payment through this program of the accumulated interest should be enough to get lenders to agree to not foreclose.
The application states that the lenders must participate and that the mortgage loan should be in forbearance. In that case, the lender can easily calculate the amount of interest in arrears and agree to accept that amount. This might even have the effect of stretching the assistance to enable people to remain in their homes for longer.
Is the assistance intended to be tax free? The application calls the funds “assistance,” not outright grants. Other forms of temporary assistance, like unemployment assistance, are taxable. This program should clarify in the application whether or not the funds are taxable or not.