A pilot program to spend $3 million on mortgage assistance for 20 public safety officers has been canceled

The following was sent to the Bloomingtonian:

FOR IMMEDIATE RELEASE

May 2, 2024

For more information, please contact:

Sharr Pechac, Director of Human Resources, [email protected] or 812-349-3404

Justin Crossley, Digital Brand Manager, Office of the Mayor

[email protected] or 812-349-3406

PUBLIC SAFETY HOUSING PILOT CANCELED

Mayor cites inequity, high cost

Bloomington, Ind. – Today the Office of the Mayor announced that a pilot program to spend $3 million on mortgage assistance for 20 public safety officers has been canceled. The City will instead direct interested parties to an existing program that offers public safety officers $18,000 toward home purchase. 

Former Mayor John Hamilton announced the pilot program in February 2023, with the intent of boosting public safety recruitment and retention by offering $100,000 toward a down payment on a home in Bloomington. The City Council then committed an initial $500,000 to fund it. On December 15, 2023, after an unsuccessful search for a local partner, a contract was signed with Fahe to facilitate the mortgage assistance program. 

“We’ve spent several months working with the great people at Fahe to understand how this complicated program would be administered,” said Mayor Thomson. “After investigating the costs for the City and for participants, and consulting with police, fire, and union leaderships, we have come to the conclusion that this pilot would not be an equitable or cost-effective use of City funds. Instead, we’ll seek scaleable, sustainable solutions to attract and retain public safety officers.” 

Several factors led to the cancellation of the pilot, according to the Office of the Mayor. These include the high cost for a limited number of beneficiaries; the lack of criteria for when and how to evaluate the success of the 10-year program; and the financial impossibility of extending the benefit to all public safety officers or the City’s hundreds of other employees. 

The program would have cost $3 million over 10 years to provide mortgage assistance to 10 firefighters and 10 police officers. Each year, the City Council would have had to appropriate $200,000 ($10,000 per participant) to cover mortgage costs. In addition, the City would have had to put an additional $1 million into a nonrefundable reserve at Fahe. The $1 million fund would have covered the interest on all 20 mortgages in the pilot. It would have also served as Fahe’s insurance policy if and when the Council did not make the required annual appropriation of $10,000 per participant at any time during the 10-year pilot. Participating employees would have had to pay back the loan interest as well as pay additional payroll tax each year on their $10,000 annual appropriation.

Eligibility for the program was to have been determined in two phases. New recruits would have had to finish probation and complete 1 year of service at the City, then apply to Fahe to pass their requirements. If a participant received a loan and later was terminated or otherwise became ineligible (for example, if the employee rented the house out instead of living in it, moved away, lost the house in a divorce, etc.), the City would have stopped paying and the employee would have become responsible for the remainder of the mortgage.

City Council approved an initial $500,000 in American Rescue Plan Act (ARPA) funds for the program in February 2023, but it was later determined that those funds could not be used. The $500,000 would have come from the general fund instead to get the program started, and an additional $500,000 would have been due once Fahe had accepted 8 loans. At the time of the cancellation, no payments had been made yet.

Since the program was announced in February 2023, 7 people have expressed interest. No one relocated or transferred based on the offer, and no one reached the stage of applying for Fahe eligibility. Fire Union Local 586 supports the decision to cancel the program. Paul Post, President of Don Owens Memorial Lodge 88, Fraternal Order of Police, commented, “We appreciate Mayor Thomson notifying us about this decision, and support her review of the previous administration’s financial actions. The FOP looks forward to working with her administration to find further recruiting and retention efforts to get BPD back up to fully staffed and recognize the hard work of the existing officers.”

“We are very proud of our dedicated firefighters and police officers, and we are collaborating with Chiefs Kerr and Diekhoff, Human Resources, and union leadership to understand and meet their recruitment and retention needs in sustainable ways,” added Mayor Thomson. 

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About Fahe

Fahe is a network of 50+ community nonprofits serving Appalachia and other regions. Fahe provides people, especially those living in persistently poor rural counties, with the opportunity to fulfill their potential through access to housing, community services, and inclusive local economies. JustChoice Lending is the mortgage lending division of Fahe, with more than 15 years of experience connecting families with financial resources to secure homeownership.

During the 2023 fiscal year, Fahe made total direct investments of $144.8 million. Total capital under management exceeded $300 million. Since 1980 Fahe has invested almost $2 billion and served more than 940,000 people. Learn more at fahe.org.

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