Allentown seeks funding to boost home ownership, address 'nightmare' blighted properties

ALLENTOWN, Pa. — Allentown could launch a program next year to tackle “nightmare” properties and open up home-ownership for low-income residents.

The city’s Redevelopment Authority on Wednesday unanimously approved plans to apply for up to $1.5 million from the Federal Home Loan Bank of Pittsburgh to fund the program.

The authority would use the funding to rehabilitate 10 single-family homes, according to Mark Hartney, deputy director of Allentown’s department of community and economic development.

Those homes would be sold to income-qualified residents.

Sales prices could range from about $150,000 to $200,000, and each home’s deed would be restricted to “keep it affordable for … 20 or 30 years,” Hartney said.

Officials hope to add Federal Home Loan Bank funding to a state tax-credit program worth up to $1 million through Peoples Security Bank & Trust.

The Lackawanna County-based bank was eyeing a rental-assistance program but “got really excited” about investing in Allentown’s potential home-ownership program, Hartney said.

And the authority needs a bank to sponsor its application for funding, he said.

Peoples Security Bank & Trust works with a developer “that is interested in and has the capability” to rehab homes in Allentown, he said.

And “this developer is not looking to make money on these projects” beyond its costs, Hartney said.

'Nightmare' properties

The Redevelopment Authority will “be targeting properties that have been a nightmare in a neighborhood for a long time,” Hartney said.

They would be renovated to have “longevity” and not immediately need major repairs, he said.

“We're going to try to work with this developer to make sure that [these homes] should be sold in a condition where they can exist for a number of years before they have a major systems issue to deal with,” he said.

Allentown’s strategic housing plan, released in January, called for a program to help residents become homeowners.

Chris Raad, chairman of the Redevelopment Authority, threw his full support behind the proposed program.

“I think this program … checks off so many boxes and covers so much of what we discussed in our strategic plan that this is just a win for everybody,” Raad said.

'Commitment ... to attack blight'

The Redevelopment Authority must submit its funding application by early August to the Federal Home Loan Bank of Pittsburgh, which will make funding decisions in December, according to the DCED’s deputy director.

Peoples Security Bank & Trust is slated to apply next spring for funding from the state tax-credit program.

That means work on blighted homes likely would start in the second half of 2026, but the authority can start acquiring properties now, Hartney said.

That gives officials time to work out the proposed program’s many details, including which entity will own blighted and rehabbed properties until they’re sold.

Vicky Kistler, who leads the department of community and economic development, said the city would work to implement the program even if the authority secured no funding from its upcoming applications.

“You all made a commitment and a statement that you're ready to attack blight, [and] we feel strongly that we've got the groundwork now established to attack blight,” she said.