Two Kauai projects up for national awards

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.”

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