The City of Lowell Affordable Housing Trust Fund on Sept. 17 discussed how to spend $3,300,000 in federal American Rescue Plan Act (ARPA) money and heard repeated cautions from staff and outside advisers about regulatory complexity and tight spending deadlines.

The discussion matters because federal deadlines limit how long the city has to obligate and then spend ARPA funds, and missteps could trigger clawbacks. Jessica Fanacio, an ARPA compliance adviser, told the trustees that “the potential risk of not using funds because we go down a certain road... get into contracts with this funding, and then aren’t able to spend it and we’re not able to pivot later is a very extreme risk for this set of funds, the 3,300,000.”

Board administrator George Galores provided a budget breakdown: “The fund itself has $3,300,000 in it,” and, after noting additional revenue sources, said the total accounting left a budget balance of $3,305,000 after $10,000 in operating costs. Galores identified two other small revenue items: roughly $110,000 from CPA and $5,000 from a vacant storefront fee.

Trust members and advisers reviewed several broad choices for using the money. Fanacio described three operational models the trust could adopt: act as a funding entity that solicits project proposals, act as an active initiator that develops projects directly, or operate as a hybrid. She advised keeping options flexible because ARPA rules and time constraints make some paths difficult. “That decision will cover you for what you want to do moving forward,” she said, urging the trust to prioritize projects that can be executed quickly.

Staff and guests flagged specific program types the trust could consider. Merrimack Valley Housing Partnership Executive Director Kathy Mercado recommended exploring a down-payment assistance program that would sit outside restrictive HOME program rules; she explained that under many HOME-funded down-payment programs the city recaptures assistance if the property is sold. “If you get the down payment assistance through HOME funds and you sell the property, then there’s a recapture,” Mercado said, adding that HOME rules and housing-condition standards can block otherwise eligible properties.

City staff (identified in the meeting as Moran) provided HUD income limits used to define eligibility. Moran reported HUD’s 2025 published limits, effective April 1, 2025, stating that 80% of area median income (AMI) for a family of four is $104,550 and 100% of AMI for a family of four is $136,900. Trustees discussed targeting households at different AMI levels and how different interventions (grants, low-interest loans, deed restrictions) affect which AMI levels are feasible.

Advisers also discussed federal compliance issues that could affect specific projects. Fanacio explained that certain uses can trigger wage and labor rules (for example, Davis-Bacon prevailing-wage requirements) depending on how the ARPA funds are layered with other federal program rules such as HOME or CDBG. The board heard that invoking an existing federal program’s rules can create a “presumptively eligible” path for ARPA spending but may mean inheriting that program’s labor or procurement rules.

Trust members and staff identified practical constraints. Fanacio and staff said the ARPA obligation deadline (the date the city had to obligate funds) was Dec. 31, 2024 and that the legal final date to spend ARPA funds citywide is Dec. 31, 2026; because compliance reporting and accounting follow project closeouts, the advisers emphasized an earlier internal target where possible. Fanacio recommended favoring larger-dollar, faster-to-execute options to reduce administrative burden and audit risk, while acknowledging the trust’s longer-term interest in creating recurring revenue streams through repayable loans or program returns.

Trustees asked staff to identify projects already in the pipeline or shovel-ready developments that could accept ARPA funding, and staff said city ARPA project details are available on ClearGov’s ARPA webpage. Staff also agreed to research how many existing units currently qualify as affordable in Lowell and whether approvals could be expedited.

No allocation decisions were made at the meeting. The trustees did take two formal administrative actions: they approved the Aug. 20 meeting minutes, and they voted to accept Kathy Mercado as Mayor Daniel Rourke’s appointee to the trust (motion by Tai Cha; motion passed). The board set a next meeting for Oct. 15 to review concrete funding options and any pipeline projects staff can present.

Trust members and staff said they will return with specific, due-diligenced proposals for the board to consider, including program rules, AMI targets, and compliance advice so the trust can choose options that balance speed, long-term impact, and ARPA compliance risk.