The Blight Elimination Program from the Tennessee Housing Development Agency is officially active.
THDA can now begin accepting loan applications and funding demolition and greening activities to stabilize local housing markets.
"We're thrilled to be able to put these Treasury dollars to use in neighborhoods where one or two abandoned houses are dragging down everyone else's property values and creating serious safety concerns as well," said Ralph M.
Perrey, executive director of THDA.
As approved by the U.S. Department of the Treasury, the THDA program provides zero-interest loans up to $25,000 to qualified nonprofit groups to purchase an abandoned home, demolish the structure, and transform the lot into a green space, affordable housing, or other approved end use.
"We have a number of nonprofits who have been chomping at the bit for a chance to apply for this program, especially in Shelby County, where we expect a large number of groups to receive loans," said Mr. Perrey. "We encourage everyone to study the map and the guidelines carefully, and we're excited to see the plans they put forward."
Only properties in approved counties may qualify for the program. There are six approved counties within Tennessee: Davidson, Hamilton, Knox, Montgomery, Rutherford, and Shelby.
"It's almost impossible to sell a home near a blighted property, and if you do happen to find a buyer, what are the chances they're even going to offer you what you owe on your mortgage? It creates a financial trap for families down the street who did nothing wrong," said Mr. Perrey. "By working with our friends at Treasury, we've been able to create a highly targeted program where a relatively small loan of $25,000 can make a huge difference to an entire neighborhood."
Approved nonprofits will receive funding in two stages. First, THDA will provide a $25,000 short-term loan for the acquisition and demolition of the property. Then, once the work has been verified, THDA will use Treasury funding to provide a second loan that will be used to repay the original THDA loan. The Treasury loan can be forgiven immediately if the lot is transformed into affordable housing. Otherwise, the loan is forgiven without repayment over the next three years, provided the property remains in compliance with the program requirements.
To launch the Blight Elimination Program, the Treasury Department has approved the use of $5.5 million in federal dollars originally allocated to Tennessee for the foreclosure prevention program known as Keep My Tennessee Home, which is no longer accepting applications. THDA has also set aside $1 million of its own funding to provide the first-stage loans.
Treasury originally set a deadline of Dec. 31, 2017, for THDA to allocate all Blight Elimination Program funds in grants to local nonprofits. That deadline is now extended to Dec. 31, 2020.
For the Blight Elimination Program guidebook and application procedure, visit
THDA.org.