The city now has a plan in place to help make housing in Stoughton a bit more affordable and benefit the environment, too.

A one-year extension for tax-increment financing district No. 3 (TID 3), which covers Business Park North, will fund three housing programs. That takes advantage of a recently changed state law that allows such TID extensions if 75 percent of funds are used for affordable housing.

The Common Council unanimously approved the extension Sept. 10. It would have expired in November.

Finance director Jamin Friedl estimates the city will receive around $500,000 from the extension. The money wouldn’t be available until 2021, but it could be used anywhere around Stoughton.

The city has planned three programs that will use the funds, all of which are aimed at homeowners or potential homeowners. Two of them count as affordable housing programs.

The first would be a grant for the Stoughton Housing Authority’s capital improvement plan. Some of the money might be used to support remodeling efforts at Greenspire Apartments, Mayor Tim Swadley said.

Second, the city would create a fund providing down payment assistance for first-time home buyers, offering up to $5,000 in no-interest loans that must be paid off within 15 years.

The remaining 25 percent of the TID money would be used for providing environmental remediation assistance, particularly for lead pipe replacement.

Through this program, homeowners would be able to receive full reimbursement for the cost of removing lead pipes, up to $1,500, and would be able to recoup 50 percent of the cost of other environmental projects, also up to $1,500.

“If somebody came in and had lead paint or asbestos that they wanted to remove and the total project cost was $3,000, we would pay them $1,500 to get that project done,” Friedl said.

The extension of TID 3 will also serve as a pilot program to guide future TID closures.

“I imagine every time we close a TID, we’ll look at this as an option,” he said. “As we get closer to closing out TIF 4 and move down that road, we can look at this program and try to build some more sustainable programs out of those closings.”