Why Should Delaware Care?
As Wilmington struggles with teacher retention rates and desires to have more resident educators in its schools, the city has created a new initiative to provide forgivable home loans to school staff.
Wilmington is launching an initiative to provide forgivable loans of up to $15,000 to teachers and other school staffers to help them buy their first homes.
The program is part of a larger effort to keep mid-career educators from leaving Wilmington in favor of better paying teaching jobs in neighboring suburbs.
On Oct. 14, Mayor John Carney signed into law the ordinance that created the program. Eligibility is not limited to teachers, but also includes paraprofessionals, lunchroom staff, social workers, and others who work full-time in schools.
The program adds to a similar city initiative, called the First Start Homebuyers Program, that offers financial assistance for settlement and down-payment costs to any first-time homebuyers who buy a home in the city. It’s part of a broad effort by the city to draw back residents following decades of suburban flight.
City Councilman Coby Owens told Spotlight Delaware that he sponsored the initiative after he heard from teachers in Wilmington schools who wanted to live in the city but could not afford to buy a home.
“This is targeted at individuals who work within our inner city schools,” he said.
The state’s educator’s union has also called the legislation a “groundbreaking step” toward making sure educators can afford to live in the communities they serve.
“Hopefully, other town and county governments in Delaware will follow Wilmington’s lead by actively recruiting educators to their communities as well,” Delaware State Education Association President Stephanie Ingram said in a statement to Spotlight Delaware.
Aaron Bass, the CEO of EastSide Charter School in Wilmington, said the program is a “great way to support our educators,” and will help them build better relationships with students and families.
“If I can’t trust you, then I don’t necessarily value what you say. When I know that you’re not only telling me or educating my child, but you also are a part of my own neighborhood, my own fabric, then it deepens the lessons being learned in school,” Bass said.
Housing prices rising
Home prices in Wilmington surged during and after the COVID pandemic. At the beginning of 2020, the average home price in the city was about $222,000, according to data from the real estate website Zillow. Last month, it was $318,000.
While pay scales vary between the four districts that serve Wilmington, the salary for an experienced teacher with a bachelor’s degree is just over $70,000 for each.
Owens said he wanted to bring to Wilmington an initiative similar to federal programs, such as one called Teacher Next Door, that provides grants and loans to help school employees buy homes.
“I wanted to make sure that we opened [the existing downpayment program] up to everyone who helps our youth on their journey,” Owens said.
The City Council passed the ordinance 11-0, with two absences.
It came about 10 months after the city similarly stepped into the education field, establishing an Office of Educational Advocacy that aims to ensure the concerns and interests of Wilmington students and families are represented in state and local policy and legislation.
How does the program work?
For now, the focus on educational staff is more an initiative than a new program. It will utilize the $500,000 allocated between federal and city funding to the city’s First Start Homebuyers Program.
Homebuyers can’t have owned a home within the last three years, must be buying a single-family home and must have at least $1,000 to put toward closing costs.
Applicants also must be income-eligible using the city’s average median household income, which equals $83,600 a year for an individual or $119,400 for a family of four.
Closing cost and downpayment assistance are capped at the lesser of $15,000 or 6% of the property’s purchase price.
The loan forgiveness scale starts after the first five consecutive years of homeownership, with 10% being forgiven each year. In total, it will take 10 years of consecutive homeownership for the loan to be fully forgiven.
The city program can also be stacked with state programs, like the Delaware State Housing Authority’s first-time homebuyer assistance program and the state’s First-Time Home Buyer Tax Credit.
While Owens had originally proposed to offer 120% of the area median income to the school staff program – or 20% above the general population limit – it was reduced in line to the First Start Homebuyer Program limit of 100% to avoid confusing the public.
Where the city initiative could stand out, however, is the potential to attract matching private dollars into the program. At a June city council committee hearing where Owens’s ordinance was discussed, he spoke about the desire to partner with school districts and private employers to contribute to a joint fund to provide more assistance to teachers and school staff.
Owens also noted the ongoing national teacher shortage, which has affected Delaware in recent years, and said he hopes the program will help with retention efforts.
“We have a lot of teachers who are amazing, who will transfer out and go to a different school out in the suburbs,” Owens said. “Hopefully, this will encourage them to stay in the city and give back to the city.”
