08/25/1975 Meeting - Laserfiche WebLink

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E. Allocation of Revenue Sharing Funds for Housing Downpayments, Eugene Nonprofit Housing Program - Copies of Housing and Community Development Commission report of August 14, 1975 were furnished to Council with agenda. The Commission recommended - that $3,000 of 1975-76 revenue sharing funds allocated for housing be used to make downpayments on eight houses to be financed under the 235 Interest Subsidy Program. The houses were previously owned by the Eugene Nonprofit Housing Corporation, bank- rupt, and the downpayment grant would enable present occupants to remain in their homes. The Commission made the recommendation on the condition that HUD contract would provide that money advanced by the city would be returned to the city should the properties covered change ownership by any means other than foreclosure. The Commission also instructed its staff to recommend to Lane County that it make similar arrangements for six houses outside the city. Manager explained that changes had occurred since the issue was before the HCDC re- sulting in only five houses needing the downpayment grant at this time - two of the families were not considered safe credit risks, and the condition of one house was too deteriorated. However, because it was decided to make higher downpayments the amount of grant required would remain about the same. He said that Robin Cushman, housing expeditor, had reviewed the credit rating of the people involved. Also, that the matter was brought to the Council at this time because the 235 Interest Subsidy Program expires on Augusut 21. Councilman Keller questioned the need for $3,000 when it was mentioned in Commission minutes that downpayments'would amount to about $200 each. Manager said that down- payments would be about $500 or $600. Ms. Cushman explained that HUD originally thought the downpayments could be set at about $200 but their legal counsel ad- vised that under new legislation a downpayment of 3% of the total cost of the house would have to be made in each case. So, although there were fewer families involved, the same amount of money would be required. She named the location of e the houses covered by the proposal. Councilman Hamel asked what happened to those houses reclaimed by HUD. Ms.Cushman said they would be disposed of however possible under foreclosure procedures, usually sold. Manager added that some are rehabilitated, some are sold as is. Competitive bidding is usually encouraged but generally the idea is to get rid of them as soon as possible because of the huge inventory of these type properties. He said the average person is not familiar enough with the process to get into the market, as a consequence most of them are picked up by brokers. , Councilwoman Beal wondered whether the city would acquire some of those houses for rentals for low-income people in the community and whether they were considered a "good buy." Manager said it could be investigated, that for the price, they could be considered a bargajn. Ms. Cushman said city purchase of these type homes had been tried without success, but at this time the request was for only those families now occupying houses on which foreclosure had started. John Porter, planning di- rector, added that the Federal government was financing this program and he thought it would be better to remain that way rather than the city's becoming involved. Councilwoman Beal asked whether welfare payments to the low-income people were in- cluded in determining whether they qualified as a credit risk. Ms. Cushman answered that of the five families involved, three were employed, one family was on welfare, all were approved for the program. Councilman Haws wondered why the monies advanced by the city would not be returned e under foreclosure procedures. He asked too whether the $3,000 proposed for the program had been budgeted already for something else. Ms. Cushman answered that statutory requirements made it impossible for money to revert to a governmental 8/25/75 - 12 4-i:Cco: ~'