Island towns are set to apply for approximately $1 million in federal pandemic relief funds to help with rental assistance, forgivable small business loans and homelessness prevention.

The funds will be administered through the Community Development Block Grant program, according to grant writer Alice Boyd, and will be available to all six towns on the Island.

“We are getting moving on this so we can submit immediately,” Ms. Boyd told selectmen in Edgartown this week. “We believe that this will likely be a first-come, first-served system.”

The federal Coronavirus Aid, Relief, and Economic Security (CARES) act was signed into law on March 27 and included CDBG funds for each state to assist local communities to meet the needs of low-to-moderate income residents. In Massachusetts, the state Department of Housing and Community Development has made $19.6 million available to the state’s approximately 300 non-entitlement communities.

Although the applications are not yet available, Ms. Boyd said that they were coming imminently and would be gone fast.

While the CDBG program normally focuses specifically on housing and rental assistance, the CARES Act money will also go toward forgivable small business loans, Ms. Boyd said. Approximately half the funds will go toward housing and rental assistance, 40 per cent will go toward small businesses and micro-enterprises, and 10 per cent will go toward homelessness prevention.

Decisions on how to allocate the funds were recommended by the Martha’s Vineyard Community Advisory Group, which includes various Island social service providers. It was decided that money would not go to mortgage payments because many banks have already provided extensions or relief, but rather to support renters. The money for homelessness will go to helping make payments that have dried up for hotels to house Islanders.

The money made available for eligible small businesses would be similar to money normally used by community block grants for their housing rehabilitation program. More than half the businesses’ beneficiaries would have to be low-to-moderate income. The loans would provide payroll assistance for both seasonal and year round enterprises, with an estimated cap between $10,000 to $20,000. If businesses show that they retain jobs through the summer months on their payroll records, then the loans will be forgiven.

“We don’t want to put more debt on any small businesses,” Ms. Boyd said. “We can help with payroll and with overhead.”

Ms. Boyd is compiling one application for Edgartown, West Tisbury, Chilmark and Aquinnah — and then separate applications for Oak Bluffs and Tisbury. Because the Island towns are going up against 300 communities statewide, she said it was prudent to ask for the maximum, but to expect much less.

“We know that they will cut the funds, but we’d like to do everything we can on the Islands,” Ms Boyd said. “If we get $400,000, that will still serve a considerable amount of people.”

“We hope we’ll be able to help a lot of community members,” Ms. Boyd added.