HIGHLIGHTS

• There are insufficient maintenance and renovation dollars available to public housing agencies to maintain all the properties in their portfolio to a high standard.

• The City’s Healthy Home Repair program has a waitlist of over 5 years with over 1,250 applicants.

• There were $219 million dollars in home improvement capital deployed in St. Louis City and County in 2020.

• Black applicants were more than twice as likely to be denied a home improvement loan than white applicants in 2020. 

Overview

Preserving existing affordable housing requires financing for home repair and rehabilitation. A common rule of thumb is that property owners should plan to spend 1-2% of the home’s value on annual maintenance. This section will discuss the resources available to homeowners, landlords, and multifamily property managers, such as public housing authorities. These resources include:

1. Capital funds and maintenance for public housing authorities

2. Resyndication for LIHTC developments

3. Home repair grants for low-income homeowners

4. Home improvement loans for homeowners 

5. Home refinance loans for homeowners  

6. Energy efficiency assistance for households

Public Housing: Capital Funds and Maintenance

Local housing authorities manage repair and renovations of their units through operating expenses and capital funds. Large-scale physical improvements requiring capital funds include significant repairs such as roof replacements, mold remediation, and plumbing/sewer repairs. St. Louis Housing Authority Director Alana Green predicts the need for more than $100 million to fully address the capital needs of the City’s public housing portfolio. As of August 2021, a physical needs assessment is in the process of being completed.

The St. Louis Housing Authority has less than half of the per-unit budget for maintaining units in their public housing portfolio as the Housing Authority of Saint Louis County. 

Rental Assistance Demonstration

Launched in 2015, the Rental Assistance Demonstration (RAD) program allows public housing agencies to convert public housing to project-based Section 8 units. This allows the agency is finance repairs or physical improvements to the property using private financing or Low Income Housing Tax Credits. The Housing Authority of Saint Louis County has applied for the program but has not yet been approved, as of 2020.

LIHTC: Resyndication

Low-income housing tax credit projects are structured with 15-year funding compliance periods, meaning new equity investment and an additional capital raise can happen after this time period. Referred to as project resyndication, this process can include an additional capital raise for maintenance, especially if paired with historic rehabilitation tax credits. SLDC should track these applications. 

Home Repair Grants

There are several home repair programs run by government and nonprofit partners in the St. Louis region, including those that are funded by Community Development Block Grants (CDBG) and other HUD programs. In their 2020 Consolidated Annual Performance and Evaluation Report, St. Louis City reports supporting the rehabilitation of 50 units, 374 Healthy Home Repair loans were issued to low-income homeowners, and 146 households received home repairs funded through the Affordable Housing Trust Fund (AHTF).  While the City was able to share some information regarding the Healthy Home Repair Program, it does not publicly report how funds are distributed geographically or the demographics of applicants and recipients. 

In the County, the Home Improvement Program (HIP) provides home repair advice and financial assistance to qualified homeowners. Some municipalities are no longer accepting applications due to the significant numbers of applicants on its waitlist. The County does not publicly report the number of applicants or recipients of home repair assistance.

Other major nonprofit partners providing home repair services across the region include the Community Action Agency of St. Louis County, The Housing Partnership (Lemay), Rebuilding Together, Beyond Housing, and Mission St. Louis. Due to the number of nonprofit providers of home repair grants and services, it will take a coordinated effort to estimate how many home repair dollars are available overall in the region.

The City’s Healthy Home Repair Program offers home repair assistance to low- to moderate-income homeowners. It is managed by the Community Development Administration at the City of St. Louis and is funded by Community Development Block Grants (CDBG). Homeowners are eligible if they make less than 80% of AMI. They offer home repair loans to residents with the following terms: (1) A 5-year forgivable loan for loans of less than $10,000, and (2) a deferred payment loan with 0% interest, payable upon sale of home for loans more than $10,000. Beginning in February 2021, loans are turned into grants for any loans where value appraisals are less than the mortgage and repair loan balance. 

The City estimates that they administer 200-250 loans per year, with an average value of $18,000. As of March 2021 according to City staff, there were 1,250 applicants on the waiting list for comprehensive home repair loans and they are adding about 200 applicants per year. In order to meet 100% of priority requests in 2020, the City did not approve any comprehensive home repair requests. By the end of 2021, they hope to have less than 1,000 people on the waiting list. 

Home Improvement Loans

The Home Mortgage Disclosure Act (HMDA) requires financial institutions to maintain, report, and publicly disclose loan-level information about mortgages, including applications for home improvement loans. As a caveat, home improvement loan applications are an underestimate of demand and interest for home repair capital: homeowners who have received loan denials from previous applications may be discouraged from applying again, and some homeowners may be advised their financial situation would lead to a loan denial, leading them to not submit an application.

According to Home Mortgage Disclosure Act data, there were 4,137 applications for home improvement loans in St. Louis City and County in 2020. 52% of those applications had loans originated, with a total of $219 million dollars in home improvement capital being deployed in our region. 93% of loan applications were for primary residences, while 5% were used for investment properties. 

Home improvement loan applications were approved at low rates in North City and North County, as well as the Dutchtown, Gravois Park neighborhoods of South St. Louis City. 82% of home improvement loans were for properties located in Saint Louis County. 

Black applicants were more than twice as likely to be denied a home improvement loan than white applicants. Home improvement loans were originated for applicants and properties that predominantly located in South and West Saint Louis County and pockets of South St. Louis City.

Home Refinance Loans

Home refinancing can be a tool for some homeowners to make their monthly mortgage payments more affordable by taking advantage of lower interest rates or to convert from an adjustable-rate mortgage to a fixed-rate mortgage. It is a “cash-out” refinance if the homeowner uses their home equity to raise emergency or investment funds. In 2020, there were 53,379 refinancing loans with no cash out and 14,717 cash-out refinancing loans. 85% of both types in the region were in Saint Louis County. 

Black applicants were nearly three times as likely to be denied home refinancing loans as white applicants. The geographical distribution of where home refinancing is approved is nearly identical to the home improvement loan, with nearly no refinancing activity in North City and parts of North County. 

Energy Efficiency

The U.S. Department of Health and Human Services sponsors the Low Income Home Energy Assistance Program (LIHEAP), which provides assistance with paying energy bills, weatherization, and energy-related minor home repairs. This program is administered by Urban League in St. Louis City and Community Action Agency of St. Louis County (CAASTLC) in the County. Households must meet the following criteria to qualify for LIHEAP:

• Have a household income less than 60% AMI

• Be responsible for paying home heating costs

• Have $3,000 or less in bank accounts, retirement accounts, or investments

• All household members must be a U.S. citizen or legally admitted for permanent residence

In 2020, Missouri-wide, the average household received $728 in LIHEAP energy assistance. In their Model Plan, the Missouri Department of Social Services reports that 42% of LIHEAP is used for heating assistance, 28% for crisis assistance, and 10% for weatherization assistance.

We do not have standardized, aggregated reporting of the number of households that applied and were assisted with energy efficiency programs at the local level. It is not clear the number of households that received weatherization assistance and it appears no households received energy-related home repairs under this program. 

Data Recommendations

In order to better measure the availability and effectiveness of financing for home repair and rehabilitation, we recommend...

• City and County governments aggregate and report the number of applicants and recipients of home repair grant programs administered across the region, disaggregated by race, income level, and geography. 

• The Missouri Department of Social Services reports the number of households that applied and were assisted with energy efficiency programs, disaggregated by race, income level, and geography. 

• The St. Louis Development Corporation reports the number of LIHTC developments that are eligible and apply for resyndication.