Opportunity Knocks: $1 million grant to help ACFCU revitalize neighborhoods



A $1 million grant will help Appalachian Community Federal Credit Union (ACFCU) and partners to revitalize neighborhoods and allow more than 100 low and moderate-income families to purchase or renovate homes over the next five years in the greater Tri-Cities.

The U.S. Treasury’s CDFI Fund’s “Capital Magnet Fund” award supports affordable housing activities that attract private capital to economically distressed communities. ACFCU has now received three affordable homeownership-related grants totaling $4.4 million since early 2017.

ACFCU and partners will focus on two primary goals with the “Neighborhood Revitalization Program”: improving neighborhoods through upgrading homes – including many that have been renter-occupied – and helping aspiring families complete the journey to homeownership.

“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.”

Collaboration and innovation will be essential to the Neighborhood Revitalization Program’s overall success. The grant permits mortgage loans providing up to 110 percent of the home’s value with the 10 percent excess funding renovation, energy efficiency upgrades and closing costs.

Many targeted homes would benefit from extensive renovation, and many eligible families will have financial or credit hurdles to overcome. Fortunately, the program coincides with the Opportunity Zones initiative, a new federal tax credit opportunity to attract capital to distressed census tracts. The Neighborhood Revitalization Program will focus on neighborhoods in the same areas, opening the door to additional investment.

“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.”

About half the 103 loans will be for families making 80 to 120 percent of area median income (AMI) and half to those making 51 to 80 percent. AMI for a family of four is in the $54,000 range for most of the Tri-Cities. Borrowers must pass an eight-hour, HUD-approved homeownership class to ensure they understand the challenges and responsibilities they’ll face.

With an estimated average loan size of $110,000, ACFCU expects to leverage the $1 million grant award into more than $10 million of economic impact.

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