Community Action, Habitat explain plan to work together

Partnership plans to seek grant to buy and restore foreclosed homes

[April 18, 2009]  Leaders from Community Action and Habitat met Wednesday afternoon to discuss collaboration between the two organizations in order to apply for grant funding for a housing rehabilitation program for Logan County. Angela Stoltzenburg, executive director of the Community Action Partnership of Central Illinois, along with the agency's community services program director, Kathy Shepherd, met with Toni Reifsteck, Joe Runyon and George Dahmm, representing Habitat for Humanity. Also attending was Mayor-elect Keith Snyder.

The Illinois Housing Development Authority has identified that there are 41 counties in Illinois with excessively high foreclosure rates and Logan County is among the 41.

The funding that the partnership of Community Action and Habitat is seeking will ultimately come from the U.S. Department of Housing and Urban Development.

The purpose of the funding is to allow the partnership to purchase foreclosed and abandoned homes in Logan County, refurbish those homes or demolish and rebuild them, and then sell them to income-eligible families at a significant savings with zero-interest mortgages.

The grant would come to the partnership as a sub-grantee through the Illinois Community Action Association. The association is putting together groups of four or five troubled counties that could benefit from the funding. Each county will submit its own grant application, which will be combined by the ICAA.

Stoltzenburg explained that when the grant is finally awarded, some counties could be left out, as it is with most state and federal grants. There are no guarantees that Logan County will receive any of the funding.

If the grant is awarded, the partnership will receive approximately $600,000. With those funds they will be expected to purchase the homes, insure them and do all the rehabilitation work to make the homes livable.

The grant specifies that the homes must be purchased by Community Action for no more than 75 percent of their appraised value at the time of purchase. Stoltzenburg and Reifsteck agreed that they could purchase a total of seven homes. Because Habitat work is done by volunteers, expense for the rehab will be limited to the cost of building materials.

Reifsteck said that by the time the grant is awarded in June, there should be a total of 15 homes available in the city of Lincoln alone. While the grant is for the entire county, she added that they would probably have to work within the parameters of Lincoln because that is where the majority of their volunteer base is.

Stoltzenburg said that the grantor is recommending that the rehab homes be located in the same neighborhood so that there can be some stabilization of that entire area.

Reifsteck noted that of the list she has right now of foreclosed and abandoned homes, she is showing that there are three grouped together and two more within just a few blocks.

In the partnership, Community Action and Habitat will each have their own roles to play. Community Action will be the administering agency, responsible for all the reporting to funding sources. The agency will also purchase and hold ownership of the homes during the rehabilitation process, pay for all building materials and provide insurance coverage on the buildings until they are turned over to Habitat.

Habitat will select the families who will purchase the finished homes, take those families through the Habitat homeownership counseling services, be responsible for acquiring building materials and provide the labor for the rehab.

Once the homes are purchased, families will be chosen before rehab begins. Each family will be required to meet Habitat income guidelines and volunteer a total of 250 hours per family to Habitat, with 100 of those hours being working on their own home.

When the homes are finished, they will be reappraised and a new market value set for their improved condition. Each home will be sold at 70 percent of the finished appraised value and will be matched to the family according to size. Rehab will be done so as to accommodate any special needs of the family, such as handicap accessibility or hearing assistance.

When a home is completed, Habitat will have the customary home blessing and turn the keys over to the recipient family. At that point the ownership of the home will transfer from Community Action to Habitat, and Habitat will own the mortgage on the home until it is paid off.

Stoltzenburg pointed out that this program would be a terrific resource for Habitat because the grant is going to pay for everything, but the mortgage payments will go directly to Habitat, which will increase their cash pool, allowing them to go forward with other projects.

Stoltzenburg will be responsible for filing the grant application and has a series of deadlines she must meet between now and the end of April.

The grant is scheduled to be awarded in June. Once awarded, the partnership would have 18 months to obligate all the funds to projects and a total of four years to complete the projects.

Habitat will be looking for volunteers to help with these projects as well as others they are working on. Anyone who is interested in volunteering should call the Habitat office at 732-6412.

Anyone who would like to learn more about this home rehabilitation program can contact Community Action at 732-2159 or Habitat for Humanity for more information.

[By NILA SMITH]