Housing Strategies Corp. adopts baseline homeowner program policies to pursue $5 million in ESD funds

The Housing Strategies Corporation board voted to adopt a set of baseline policies and procedures to support homeowner programming and to keep the organization’s application process on schedule with New York State Empire State Development (ESD).

Michelle, a Housing Strategies Corporation staff member, introduced the item as "an item to adopt some general policies and procedures related to homeowner programming," saying the baseline framework is needed to move forward with ESD after the state issued an award commitment of $5,000,000.

Board members said the approval is meant to preserve the organization’s ability to complete ESD’s multi-step award process while governance and program teams continue to develop more detailed rules. "What we are looking to do with this is kind of affirm a set of what those basic things are, and then, look to pretty immediately convene the governance committee to kind of consider some of the more specific types of things," Michelle said.

The draft framework approved by the board includes high-level provisions on application processing, program tiers, allowable and ineligible activities, and procedural requirements for applicants who later request changes to their scopes of work. Staff said the document intentionally leaves some items open so that a governance committee can craft specific construction and design standards, mortgage/liability approaches and other program rules.

Staff said a mailing to about 7,000 properties across four neighborhoods will begin landing in mailboxes to recruit interest and potential focus-group participants. Michelle described the mailing as part of a dual track of public outreach and policy development: "Those should be hitting mailboxes any day now," she said, and the materials can include options for residents "who might be interested in participating in some focus groups."

Board members raised several recurring practical concerns during discussion. One board member questioned using a mortgage instrument to secure loans, saying that many homeowners already have first and second mortgages and that a third-position mortgage could be effectively worthless: "if we came in in a third position ... it wouldn't be any of value," the board member said. Staff responded that mortgage requirements may vary by program tier and that the final guidelines will specify when a mortgage, lien, forgivable loan or other security is appropriate.

The board discussed financing mechanics including forgivable loans, reimbursements and direct-pay arrangements to contractors. Michelle said the draft includes examples drawn from other jurisdictions — including a Des Moines neighborhood model — but is not committing the corporation to mirror those models. She recommended consulting outside counsel and, where appropriate, local financial institutions to design options such as bank advance financing against receivables.

The board also discussed allowing "sweat equity" to count toward applicant match requirements, and whether reimbursement rules should permit making checks directly to contractors. Staff said these items must be balanced to protect the organization's interest while allowing flexible participation: "Sweat equity, I think, can be considered contribution as match, but there's some interesting kind of quantification in there as far as reimbursement for expenses," Michelle said.

The board approved the resolution after discussion. The adopted baseline will allow the corporation to proceed with ESD’s next administrative steps while governance and staff refine program-level rules and implementation details.

Looking ahead, staff said the governance committee will reconvene promptly to draft specific construction standards, mortgage/lien policies, reimbursement procedures and other programmatic rules that the board will later review and adopt.

Votes at a glance

- Approval of minutes: The board approved the January 27 minutes (identified in the packet as draft version 2) by voice vote during the meeting.

- Resolution adopting baseline homeowner program policies and procedures: The board approved the resolution by voice vote to allow the organization to proceed with ESD processes and related outreach work.