2012 HOME program description approved
This past Thursday, the HOME Program Commission met to discuss the 2012 HOME Program Description. The city intends to use its 2012 fund for program administration and for eligible HOME program activities, as outlined below. They have decided not to use any of their available funding for tenant-based rental assistance, as this is already available through the Kenosha Housing Authority. The total amount of anticipated 2012 HOME Program Entitlement and Program Income Funds (2012 funds based on the 2011 allocation) is $464,881. The city must match 25% of the grant, which would be $104,598.23.
The city has decided to support the following types of activities undertaken by the city, community housing development organizations (CHDOs), sub-recipients or private developers: the acquisition and rehabilitation of foreclosed single family homes in targeted neighborhoods; and home buyer purchase assistance city-wide.
The allocations are:
- The city will use 10% ($46,488.10) of its allocation for payment of administrative and planning costs of the HOME Program.
- The city will set aside the minimum required 15% of its allocation ($69,732.15) for eligible CHDOs, even though there is not a CHDO in place at the present time. (If no certified CHDO is in place, the funds are lost and are returned to HUD.)
- The remainder ($348,660.75) will be used for eligible housing activities in 2012.
It was decided that HOME program income funds will be used to fund eligible HOME program activities and funding set-asides for eligible CHDOs and/or sub-recipients to carry out HOME eligible activities, including housing rehabilitation projects, homeowner rehabilitation loans, rental property rehabilitation, and single family new construction.
Applicants must meet the following requirements:
- U. S. citizenship or “Qualified Alien” status (as defined by HUD);
- 18 years of age or older;
- Must meet the city’s income limits for the HOME Program;
- Cannot own any real estate at time of closing;
- Good verifiable credit rating;
- Adequate verifiable income to support homeownership;
- Must have 3% in funds to be used toward down payment, plus closing costs; and
- Must complete a HUD accredited Homebuyer Counseling Course.
When the purchase contract is signed, a $500 earnest money deposit is required and will be credited toward the down payment. Obtaining first mortgage loan financing from private sources is the responsibility of the applicant.
This past year, the city has assisted two homeowners in Brookstone Homes with second mortgage purchase assistance for up to 17% of the purchase price of the home. The loans are written as deferred payment loans at 0% interest for the first ten years, then monthly payments are required for the next twenty years at an interest rate of 3% annually.
Chairperson David Bogdala wanted to know if there was a housing stock inventory. He stated that he has a lot of ideas, but that he’s struggling with how they can make the best impact. “It would be good if someone could map out all of the foreclosed properties in the city; then we could see where they’re located.”
Bogdala further stated, “It seems that we are all working at opposite ends of the spectrum. The Redevelopment Authority, CDBG, the Housing Authority. Do they know? No one’s really attacking the problem. All have their little pot of money. How can we make a real impact?” (To read the article about the Redevelopment Authority’s meeting earlier this week, click here: Redevelopment Authority Trying to Operate with Little Funding.)
Ron Frederick, commission member, stated that he felt that “foreclosures should continue as a priority element. Pick a neighborhood. Wilson Heights, or whatever. Let’s turn around as many as possible.”
Bogdala agreed. “Pick a neighborhood. Let’s go in and make headway. But, a map/list is not available.” Art Landry, another commission member, asked where such a list could be obtained. “Doesn’t the Neighborhood Services Inspections Department track it?” They track vacant, foreclosed properties. Tony Gelichi, city staff, will research this item.
Bogdala also raised the idea of contacting the Kenosha Realtors Association (KRA). Possibly, we could ask them. “We could form partnerships with the Realtors Association and the Housing Authority. We could say, ‘I can fix this up for you.’ We could set a priority with the targeted neighborhood piece, rehab the homes, invite them to help sell the homes, and assist us with map preparation. We have $348,000 to work with. Do we have other dollars?”
Gelichi stated that “we have $100,000 from 2011 funds eligible under the current 2011 description. We will receive the new allocation plan once it’s applied for.” The city is also estimating on the following 2012 HOME Program income: selling three houses at $104,000 each. The net proceeds at sale, less 10% program administration would come to $280,800.
Another commission member, Anderson Lattimore, stated that he likes the realtor association idea. He asked if there was a problem finding people who qualified for the program, and Mike Maki, city staff, said that there was. “Recently, one applicant made too much money,” he said.
Frederick asked if physically handicapped individuals could make use of the HOME Program funds. Gelichi replied that if it was a rehab project, they could. “Under the HOME Program, there is a limit as to how much can be put in. If it was under the limit, yes, you could. We have a fully accessible house right now at 24th Avenue and 56th Street. It’s a ranch-style house that the CHIP Program built a few years ago. But, we don’t have a line of people clamoring for it.”
Alderperson Steve Bostrom walked in, and Bogdala asked him if the commission could ask him a few questions, since the real estate business is his profession. Bogdala asked him if it made any sense to partner with the KRA. Bostrom recommended not contacting the KRA; “they are an organization to assist realtors to communicate with each other.” However, he did think that contacting the KRA and asking them who might be the ten best realtors would be a good idea. He stated that he believed they would be very receptive to the city reaching out.
Bostrom also cautioned the commission that “not every foreclosed property can be rehabbed or re-marketed. The city tried this. One example, it just didn’t make sense. Buy the home for $50,000. The top price of the homes in the neighborhood was $70,000 or $80,000. If you need to put $100,000 into the home to rehab it, it just doesn’t make sense. You’d have to find the best deals.”
Art Landry stated that he liked the idea of the KRA recommending ten or so realtors. “This way the commission wouldn’t be showing favoritism to any one realtor.” Lattimore asked if they should be looking at the top ten sellers instead. Landry thought that was a valid point.
Bostrom suggested starting with the KRA’s Public Relations Committee. “We are not hiring anyone. We are just seeking advice. Pick one, two, or ten. You could put a Request for Proposal out there and have the realtors tell us where and how.” Bogdala thanked Bostrom for his input.
The commission unanimously approved the proposed 2012 HOME Program Description. The next step is that it be approved at a City Council meeting within the next month.
To review the 8-page 2012 HOME Program Description for yourself, click here: 2012 Home Program Description.