LIHU’E — A county loan program and a senior apartment project have received national awards for their innovative means of providing housing for Kauaians. Andrew Cuomo, secretary of the U.S. Department of Housing and Urban Development (HUD), recently announced that
LIHU’E — A county loan program and a senior apartment project have received
national awards for their innovative means of providing housing for
Kauaians.
Andrew Cuomo, secretary of the U.S. Department of Housing and
Urban Development (HUD), recently announced that the two projects have received
HUD Best Practices Awards as models for other communities around the country to
follow.
The County Housing Agency’s (CHA) home-buyer loan program has
helped 44 families realize their dream of home ownership over the last three
years.
Another 12 to 14 other families are either in escrow or are out
looking for homes to buy.
Thé program offers classroom training on
the realities of changing habits to be able to afford four-figure monthly
mortgage payments, as well as actual loans and second-mortgage loans to make up
the difference between what a bank will loan a family and what it takes to
purchase a home on the island. The program has also benefited those going
through the classes even if they aren’t successful in purchasing a home right
after attending the classes, explained Jim Seitenzahl, public housing and
development program specialist with the CHA.
The CHA is now under the
umbrella of the county’s Offices of Community Assistance.
The other Kaua’i
Best Practices Award winner is the Harry and Jeanette Weinberg Senior
Apartments at the Lihu’e Theater.
The theater, damaged by both ‘Iwa and
‘Iniki, has been a movie theater, roller-skating rink, disco, restaurant, and
various other entities since the 1980s, with none of these businesses being
particularly successful.
In addition, the historic structure was in danger
of being torn down as a result of damage from Hurricane ‘Iniki.
In order to
preserve the theater, and provide needed housing to Kaua’i’s elderly
population, a partnership was formed to historically restore the front lobby
and facade, while constructing a new rear portion to house 21, one-bedroom
units for the elderly.
Partners included the Harry and Jeanette Weinberg
Foundation (the family still owns the property where the theater is located),
state Rental Housing Trust Fund, Federal Home Loan Bank of Seattle, and Kaua’i
Housing Development Corporation (KHDC).
The apartments are offered to
senior citizens based on income criteria, and half are now occupied. Senior
housing enjoys lower parking requirements than other projects, making this type
of housing the only viable route for developers.
An elevator was added to
serve all three floors of the building, and all-concrete construction is hoped
to aid in hurricane-resistance and sound insulation.
Despite being located
on the main road through Lihu’e (Kuhio Highway), the individual apartments are
very quiet.
In 1994, the project received over $2 million in federal
disaster funds administered through the CHA’s Pakui Housing program, and this
year won a Historic Hawai’i Foundation preservation certificate for the
restoration work.
Besides the foundation and KHDC, included in the award
were Sueda & Associates (the architects), and Olga Urminska, the Kaua’i
artist who did the facade restoration work.
“I am extremely proud of these
two Best Practices winners and the positive impacts they have made thus far in
our community,” said Gordan Y. Furutani, Hawai’i state HUD office senior
community builder.
“We are proud to have 18 Best Practices winners from our
field office (statewide),” he said.
“Well, we’re very excited” about the
HUD award, Seitenzahl said. “We’re very pleased.”
The Kaua’i winners and 16
other state winners will compete regionally and nationally for Simply the Best
national honors.
A HUD Best Practice must be replicable in other areas of
the country, region or local jurisdiction, and generate a significant and
demonstrable positive impact on those being served or managed.
It is a
program or project, management tool, or technique that fulfills at least one of
the following characteristics: effectively uses partnerships among government
agencies, nonprofit organizations and private businesses; demonstrates creative
problem solving; overcomes serious obstacles to program implementation;
demonstrates efficiencies achieved (such as time or resources
saved).
“Almost every year, some members of Congress propose deep cuts in
HUD’s budget because they say HUD grantees aren’t doing anything important,
anything innovative with HUD funds,” Cuomo said.
“Indeed, our budget is
under assault this year again for that reason. But the work being done by these
two projects is a clear and compelling demonstration of how effectively and
efficiently HUD funds are being used across the country to expand the reach and
to improve the quality of the services HUD and its grantees provide to the
American people,” Cuomo commented.
A symposium in early August in
Washington, D.C. will be the forum to honor the Best Practices winners.
“Building a Better Tomorrow: Sharing, Preparing and Succeeding” is the title of
the seminar, expected to draw thousands of people from all over the
country.
Last year, two O’ahu projects won national Simply the Best or Best
of the Best awards, said Furutani. Honolulu Mayor Jeremy Harris’ visioning
program, and the Kalihi-Palama Weed and Seed program, were national
winners.
The CHA home-buyer loan program helps people fill out loan
applications, teaches them about credit and budgeting, spending patterns, and
other essential matters for those wishing to become home owners, Seitenzahl
said.
“It’s a real personalized attempt to find who is motivated and
wanting to become a home owner,” he said of the classes.
After attending
the classes, students turn in homework and applications, which are reviewed by
CHA staff. Interviews follow, and successful candidates get loan-eligibility
letters from the county that they present to conventional lenders, like
banks.
If the students have credit or down payment issues, “We come up with
some real specific recommendations,” like close some charge accounts, try to
consolidate, pay more than the minimum on charge cards, don’t incur new credit
debt, he continued.
Sometimes, lifestyle changes, cutting down on impulse
buying, and other alterations are recommended.
“We’ve found that, by
working with people over a long period of time, rather than just a snapshot, we
can concentrate on them, we can find out more about them, and it’s not just a
‘yes’ or ‘no,’ but there’s also a ‘maybe,'” he said.
“Judging on their
motivation how hard they work to make this happen, we found that we make more
loans with fewer students being interviewed,” said Seitenzahl.
Of a class
of 25, some drop out due to hopeless credit issues, having too much income to
be eligible for the program, bad timing or other issues, but on average seven
or eight families complete the program and get loans to buy homes.
The CHA
makes three types of loans through the program.
Under the first scenario,
the student has money for a down payment, is a first-time buyer, and gets a
pre-qualifying letter from the CHA to take to a bank. The bank would approve a
loan for, say, $100,000, but the home the student is looking at is selling for
$170,000.
The CHA would makes a second-mortgage loan for, say, $65,000, at
3 percent interest and no payments for seven years. This allows the student to
concentrate on the conventional mortgage payments for those first seven
years.
After seven years, the home owner begins paying both the
conventional and CHA mortgage, so in 30 years both notes are paid off, he
said.
On occasion, the CHA will make the primary, or first mortgage loan,
when a student has been turned down by the banks. Typically, this happens with
self-employed people. The method is a 15-year mortgage with a balloon payment
at the end of those 15 years.
If the home owner still qualifies for CHA
help after those 15 years, the balloon payment amount is refinanced for an
additional 15 years.
The CHA also occasionally makes construction loans
(around four active now), typically when a family owns land and gives a CHA
client a lot. The CHA provides the construction loan, sees that the home is
built, and then, if the client is able to get conventional bank financing and
completely pay CHA back, fine, he said.
If that doesn’t work, and the
client qualifies, they are taken in as a new client in the CHA second-mortgage
program described earlier.
“This allows them to get the house up and
built,” he said.
Folks who go through the CHA classes but aren’t quite
ready to purchase (usually those with credit issues) are offered membership in
the CHA Home-Buyers Club, where they are given specific recommendations to
allow them to better prepare themselves to become home owners.
The CHA
checks up on these club members every two or three months, and four or five
former club members have made changes to allow themselves to get into their own
homes, he continued.
“We’ve got the opportunity to work with people right
on the spot. If they’re good, we send them out,” he said.
“But, also, if
they have some problems, but potential to fix those problems, we’re able to
work with them over a period of time. And that’s actually happened in a couple
situations,” Seitenzahl said.
“Even folks who have not been able to go
through and purchase a home have been very appreciative of the educational
program that we’ve offered,” he said.
“It’s put some of them on track
toward home ownership, that it’s an achievable dream for them,” Seitenzahl
continued.
“It’s pretty rewarding to have this kind of feedback from
clients.”
