Lenders in Escambia County are scrambling for alternative ways to help potential first-time homeowners with down payment and closing cost assistance after the sudden announcement that one of the main sources of assistance funding, the State Housing Initiatives Partnership Program (SHIP), has been halted for new applicants.
Some community leaders say the lack of financial options to help people in the low- to moderate-range income bracket become homeowners is making it even harder to navigate the affordable housing crisis.
The city of Pensacola received word from Escambia County’s Neighborhood Enterprise Division manager in mid-July that SHIP funding for the fiscal year 2024/2025 has been “fully exhausted” and they are “out of money” for the purchase assistance funding program for the next 12 to 18 months.
The news came as a surprise to coordinators with the city’s homebuyer program who say they had little warning SHIP funding was so low and would remain that way for so long. Historically, the city of Pensacola and Escambia County have jointly participated in the SHIP program under an interlocal agreement.
The city administers the home buyer program county-wide; taking applications and working with lenders and buyers regardless of if the purchase is in the city limits or the county. The county manages the money that is designated to both Pensacola and Escambia County for the SHIP program.
“This really is unheard of, the fact that we just abruptly stopped and had all these files in our office. We weren't sure if those were going to be covered,” said Meredith Reeves, Pensacola city housing administrator. “We couldn't get a response. In the past, over the years, there have been times where we've had to stop due to lack of funding, but we had time to address it. I think the frustration now is not getting regular communication, or asking and not getting a response, like how much is the city’s allocation of funding?”
Mayor D.C. Reeves also has questions about what happened to the funding and the equity of the interlocal agreement, which expires in June 2025. He said it has been difficult to get clear answers from Escambia County about how the money is being spent. The city is also getting a 10% administrative fee for managing the program, but the 10% is only for managing the city’s portion of the funding, when Pensacola is managing the program for the entire county and not being compensated for it.
“Can you bring a financial breakdown of what has been spent in the city and county over the last three years as well as the accounting for when city funds are returned and how those are brought back to the city?” Mayor D.C. Reeves wrote in an email obtained through a public records request and sent July 17 to Clara Long, Escambia County Community Redevelopment Agency director, and Garett Griffin, Escambia County Neighborhood Enterprise division manager. “How are we presented with our funding each year? The impression I get is that there is a lot of ambiguity about who is entitled to what, and that’s not typically how I do business. If there has been a financial audit of these funds lately, maybe that’s the most concise way to get me up to speed.”
The city says a breakdown of the requested financial information still has not been received.
Where did the down payment assistance money go?
Escambia Neighborhood Enterprise Division Manager Garett Griffin told the News Journal the last allocation for state SHIP funding was for $3.2 million, which included both the city and county’s portion of funding. He said the city’s portion was around $500,000. The next round of SHIP dollars will be available Oct. 1, but the total amount dropped to $2.7 million.
Griffin said the county wasn’t expecting that much of a cut and there are fewer dollars to spread around to all SHIP funded programs, including money set aside for the down payment and closing costs assistance program. He said the amount spent on the program last year was more than double the amount the county usually sets aside for “first-time homebuyer activities,” which is typically about $450,000.
The reason he said the costs went up so much, to $1.3 million, is because the city and county agreed to give first-time homebuyers more money toward down payment assistance and closing costs due to the high cost of housing, which has gone up significantly. As a result, the county has decided to put this year’s SHIP funding allocation for the down payment assistance program and use it to cover last year’s applications, which includes buyers who were already approved for the money even though that pot of money was running dry.
Griffin said the program helped 54 homebuyers, last year.
“Basically, we have just exhausted, beyond exhausted, the funding that we had set aside for that strategy,” Griffin said. “It was a great thing for those people. It's just we can't use all of our money for just that when we have such a great need in other areas of the community.”
The issue was recently discussed at an Affordable Housing Advisory Committee (AHAC) meeting. The organization is made of representatives from the city and county, as well as nonprofits and others in the banking and lending community to help oversee and strategize the community’s approach to affordable housing, including the use of SHIP funds.
AHAC members, including Chair Crystal Scott, expressed surprise, frustration and disappointment over the sudden news that SHIP funds for the down payment assistance program would no longer be available to new applicants for the time being. They also question how the county is spending all its SHIP funds.
“A lack of down payment assistance money really impacts everything,” Scott said. “The SHIP dollars are there to assist citizens of our county and our city to achieve ownership. They're there as a subsidy to help our most vulnerable folks try and find a place of their own. It's disheartening and kind of unbelievable that our SHIP dollars could be depleted.”
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How is Escambia County spending SHIP dollars?
The News Journal requested a list of the programs Escambia County is funding with SHIP dollars and how much is being spent on each. In response, the county provided a Housing Delivery Goals Chart for 2024/2025 which is an annual report sent to the Florida Housing Finance Corporation, that shows how much the county intends to spend the money.
Griffin said the county uses SHIP to fund, either wholly or in part, at least a handful of other, primarily construction programs including wheelchair ramps, septic to sewer conversions, emergency assistance, demolition and replacement, and rehabilitation.
According to the Housing Delivery Goals Chart, the county intended to spend $497,500 on 18 "units" under the purchase assistance program; $800,000 on four units under the demo/reconstruction program; $675,000 on nine units under the owner occupied rehabilitation (OOR) program; $70,000 on ten units under the OOR accessibility program; $25,000 on disaster mitigation/assistance; and $150,000 on 6 units under the owner occupied emergency repair program.
Griffin all those programs except for purchase assistance are still “rolling full steam ahead” because the county has essentially given them priority due to "need" and "waitlists." He said the waitlist for the rehabilitation is over 350 and there are close to 40 people on the waitlist for the demo and replacement program. How do these programs work? According to Griffin, the county is making repairs to keep some homes safe and inhabitable – with projects ranging from roof replacements to termite infestations – with the goal to get people "out of that dangerous living space and into a brand-new home.”
Griffin said the recipients of this type of county assistance often have no other option for help, unlike home buyers who can tap into other programs for purchase assistance.
“We have to look at our wait lists that we have, which, unfortunately, because of the mass need in the community, these wait lists are growing each year,” Griffin said. “We can't keep up with the demand in the community just because of funding limitations.”
According to the county, funds under this strategy are provided for the rehabilitation or reconstruction of severely substandard (more than 50% of value of home to repair) owner‐occupied single-family units. These units are unable to be addressed through other consortium repair programs and will be brought up to code through this strategy and will be referred through the housing inspection process or code enforcement.
"The size and specifications of the replacement house will be determined by County or, when applicable, City staff," said Griffin. Several of the programs use deferred loans or grant, depending on the proposed project.
Escambia County has also used $600,000 in SHIP dollars to build three houses for its Infill/Workforce Housing program, at a cost of $200,000 each, according to the Housing Delivery Goals Chart. He said 14 houses have either been built or are in the process of being built through the program and all but the SHIP funded homes were built with a combination of federal and state funds.
However, none of the houses that are finished have been sold or listed for sale, proceeds which would return some money to county coffers. The county has not yet provided the cost for building all the homes.
Many of the houses built through the county’s workforce housing program are in the city, on county-owned properties. The News Journal visited a handful that appeared to be complete or nearly complete. The county said it’s working to find a partner who can help the county sell them because by law the government entity can’t sell them.
“We are going to be doing an (request for proposals) just to seek some interest from the community for builders and someone who has done income qualification type things, because all of the eligible buyers have to meet that income guideline, 80% (area median income) and below,” said Clara Long, Escambia County Community Redevelopment Agency director. “We will be putting information out there and seeing what organization will best fit the criteria that we're needing for them to not only sell the house, but also provide housing counseling, looking at their credit and just getting them ready to purchase a first-time home buyer.”
The county has no timeline for selecting a partner and selling the homes, but staff say they have “weekly conversations” about it.
What happens now
Both the county and city say they want to find better ways to communicate and work together to help provide people with affordable housing opportunities. In the meantime, the city’s housing administrators are looking at alternative funding options to help some first-time homebuyers.
“We definitely have heard from lenders and realtors and buyers that are frustrated and would like to have some funding available in the upcoming 12 months,” said Meredith Reeves. “So, from our point of view we are looking at some alternate funding to make available so we can assist people, at least inside the city limits, with down payment and closing cost assistance.”
The mayor says he’s also taking a closer look at the interlocal agreement Pensacola has with Escambia County on sharing the SHIP funding. He said it may be time for a change when the agreement expires next year.
“We are either renegotiating this or we're not doing it,” Reeves said. “It's one of the two. The lack of communication and the lack of understanding of priorities and the lack of a seat at the table for our money to be dictated by someone else isn't where it needs to be.”
This article originally appeared on Pensacola News Journal: Escambia, Pensacola SHIP funding for first-time home buyers depleted
