Columbus City Council Monday evening approved forgiving nearly 600 emergency home-repair loans that were given to residents to fix hot-water tanks, furnaces, roofs and foundations by removing liens on the properties, with a few conditions.
The loans total $7.6 million, putting the average loan at $12,860. All of the 591 are more than a decade old, and the requirements for them to be forgiven include that the homeowners involved with the loan still own the property, and haven’t declared bankruptcy or been foreclosed on.
Homeowners weren’t required to repay the zero-interest loans for property repairs until they sold the properties, at which point the entire principal was due. The idea was that so long as homeowners lived there, they didn’t owe anything.
The loan program started in 1986, and often includes the use of federal funds.
“When home-repair assistance was first offered by the city several decades ago, it often came in the form of a loan,” Columbus Mayor Andrew J. Ginther said Monday afternoon at a press conference at Modcon Living, a nonprofit serving Franklin County residents with home-improvement goals — including operating a “tool library” that lends tools for a modest annual fee.
But today, grants rather than have become more common, Ginther said, meaning some residents had to repay loans the city gave them for repairs while others didn’t.
“So today, we’re making things right,” Ginther said, noting the lien forgiveness program targets homeowners who have remained in their homes for at least 10 years.
The Columbus Development Department will have authority to forgive loans up to $2,500. As a financial check on the program, loans between $2,501 and $20,000 require a further sign-off by the city attorney’s office, and loans of more than $20,000 will require the approval of City Council.
“Home repair is a key solution to Columbus’ housing crisis. By preserving existing housing stock, we ensure that safer, habitable units stay in our community. Home repair assistance from the city shouldn’t be the reason a family is burdened with debt,” said Council member Shayla Favor.
As loans are forgiven, officials say they plan to review the city’s loan portfolio every quarter to see if the program needs tweaking. As loans are under 10 years old, they will also become eligible for forgiveness.
The City Council ordinance says that the forgiveness ensures “that the city’s programs do not perpetuate inequitable outcomes or limit wealth building opportunities for those who have faced a legacy of systematic disinvestment.”
Ginther has made housing affordability one of the themes of his election campaign.
“The Columbus Housing Strategy is about more than simply building more affordable housing. It’s also about preserving affordability by protecting our neighbors from being displaced,” Ginter said in a prepared release issued as the press conference was going on.
Ginther’s sole opponent in the Columbus mayoral race, Joe Motil, called the forgiveness initiative “a good gesture.”
“But again, we need to concentrate on building affordable housing,” Motil said, calling on the city to take up his plan to use tens of millions of dollars in leftover federal COVID-relief funds to build low-cost apartments, and not the “market rate, tax-abated luxury units” getting built.