City applying for low-income home improvement loans
Phil Beckman
Daily Egyptian
Ruth Duncan, 83, has lived in her two-bedroom house on the northwest side of Carbondale since 1953.
"It's getting along in years, just like me," Duncan said.
In May 2001, she applied for a Single Family Owner Occupied Rehabilitation loan to fix up the house. A year and a half before she had a new roof put on, but last year she said she didn't have enough money to do more work. She said she was struggling to keep up the property.
The SFOOR program is designed to help low-income homeowners improve their homes. Carbondale is now in the process of applying for next year's loan, which must be completed by Oct. 24. The city is applying for $189,000 and is hoping to have enough money to renovate six homes.
"The city sees it as important to try to maintain the housing stock in the community," Assistant City Manager Don Monty said. "We know there are people in the community who, for financial reasons, cannot keep up with the investment needed to maintain older homes."
The owner will certainly benefit, Monty said, but it also benefits the neighborhood and entire community and in the future, when the house is sold, it will continue to be a part of the community.
To participate, prospective applicants must meet income eligibility established by the federal government. They must be classified as low-income, which is defined as having a family income 80 percent or less of the median family income for the county. Minimum qualifying income for a family of one is $26,150 and for a family of three is $33,600.
Funds can be used to rehabilitate single-family owner occupied dwellings including houses, condos and manufactured homes. The owner must live in the home they are asking to be rehabilitated.
Once a home has been chosen, it must be inspected to identify all problems. The program requires that the house be brought up to federal and state housing standards. Each violation must be corrected for the project to be approved. The city may also do work to correct problems with a house that may not yet be in violation but will in be in the future.
Duncan said that all she wanted them to do was replace the siding, but they told her everything had be brought up to government standards. Work began on her house on Jan. 10 and was completed on March 3.
"I didn't know I had so many demerits around this house," she said laughing. "I was always glad when something satisfied them."
They came in and replaced all 13 of her windows, re-sided the house with vinyl siding, put in new carpeting, new floor tiles, a new kitchen sink, new light switches and electrical outlets, a new bathroom fan, a new ceiling in a backroom that had water damage, a concrete sidewalk from the driveway to the front door, a new handrail at the front steps, new gutters, new smoke detectors, a new shower head, fresh paint on the walls, and a new countertop in the kitchen.
Monty said the city cannot pick and choose what to fix, but must correct anything the inspectors identify as a problem.
Duncan said the total cost of improving her house was nearly $24,000.
The maximum amount of money that can be awarded to each house is $30,000, which includes cost of work itself as well as inspections, supervision of construction, testing for lead based paint and a title search to verify ownership.
"It's amazing how much money you can chew up fixing up an old house," Monty said.
If the house can't be brought up to standard for $30,000, then it is not eligible. It's an all or nothing deal. However, if the owner can find an alternative source of funds to cover the expenses above $30,000, then the project can go forward.
But, Monty said, the reason for the program is to help people who do not have the money to improve their properties and so they are unlikely to have the extra money.
The money comes in the form of a forgivable loan. For projects costing between $4,000 and $15,000, the loan will be forgiven over a period of five years. For costs from $15,000 to $30,000, the loan is forgiven over a 10-year period.
A percentage of the loan is forgiven each month the family occupies the house after the renovation is completed. If, for example, a family decides to sell the house six years after the rehabilitation, 60 percent of the loan will have been forgiven, but they will have to pay back the remaining 40 percent. At the end of the required period the total amount is forgiven.
Monty said there are usually more applications than funds. Once the city's loan application is approved, the city solicits pre-applications. These are screened to ensure the applicant owns and resides in the home and meets the income requirements.
After the qualified applicants are identified, a lottery is used to pick 15 applicants and a more detailed application is filled out. Inspectors are then sent out to determine the extent of the needed repairs and the applicants are ranked to determine those most in need and the money is distributed until it is gone.
The city uses pre-qualified contractors to do the work. The contractors are chosen in a bidding process and are paid directly by the city. During renovation, the city monitors the worksite almost daily to ensure the work is done properly, Monty said.
Duncan said she is very happy with the work that was done and was impressed by the professionalism of the workers. A couple of the workers still come around to say "Hi," she said.
"Having my house renovated so beautifully was a dream come true," she wrote in a letter to City Manager Jeff Doherty after the work was completed.
Reporter Phil Beckman can be reached at
pbeckman@dailyegyptian.com
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Last update: Friday, October 18, 2002 at 1:30:00 AM
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