Middletown Forum : STRAND THEATRE DEMOLITION & $2,144,000 NSP-1 GRANT

MiddletownUSA Post: 22 May 2009 at 2:56 pm

A BETTER USE OF $2.144 MILLION IN HUD NEIGHBORHOOD STABILIZATION PROGRAM FUNDS???

Good Afternoon Judy (Gilleland) -

In view of concerns raised by three City Council members plus some local housing industry professionals regarding Middletown's proposed use of $2.144 million in HUD Neighborhood Stabilization Program - Round One (NSP-1) funds, I again present this alternative recommendation. It was presented by me to senior Community Revitalization Department staff last October more than two weeks before the HUD submission deadline. Sadly, it was ignored by a now retired senior staff person.

First of all, the proposal that CRD staff and their paid consultant concocted does put the City of Middletown in the real estate business. And, it has the potential of adding twenty (20) more homes to the large inventory of unsold and non-rehabilitated properties already owned by the City.

My proposal was quite simple and produced far more "bang for the buck" than what was approved for submission to HUD late last year (I incorrectly said December) at a City Council meeting. Immediately following was my strategy:

Neighborhood Stabilization Program - Round One -- Proposed Activities & Budget

$ 450,000 Down Payment & Closing Cost Assistance (DPA)

Provide Seventy-Five (75) Forgivable Loans @ $6,000 Each

For Income-Eligible & "Bankable" Home Buyers

$1,195,000 Housing Rehabilitation Assistance

Provide Seven-Five (75) Repayable Loans @ $15,000 Average

Each For Income-Eligible & "Bankable" Home Buyers

$ 375,000 Property Demolition Program -- Remove Fifty (50)

Blighted & Dilapidated Properties @ $7,500 Average Each

$ 124,144 Program Administration, Legal, Appraisal, Other Expenses

Including Home Buyer Education & Counseling (LifeSpan)

________

$2,144,000 Total

The above plan DOES NOT call for the City of Middletown to acquire, rehab and resell Twenty (20) homes. Instead, it calls for the City to make available down payment/closing cost and rehab financing in working with home buyers, participating lenders and real estate professionals. Instead of Twenty (20) households assisted this proposal assists SEVENTY-FIVE (75) home buyers! It is predicated upon using a variety of lending products including FHA 203 K and similar bank purchase/rehab mortgages. It continues the success of the Down Payment/Closing Cost Assistance Program that the Middletown Board of REALTORS, local mortgage lenders, neighborhood residents and former City staff developed dating back to the Fall months of 2007.

Not only does this concept provide 350% of the benefit of the current plan, it is based upon all housing rehabilitation funds being repaid to the City via no- and very low-interest secondary financing. By the way, I submitted this to HUD Neighborhood Stabilization Program representatives (in Washington, D.C.) and they voiced no objection to this proposal.

A number of members of the now defunct HUD Consolidated Planning Committee and other local informed housing industry professionals have endorsed this approach.

I trust that you may give serious consideration to this proposal that is cost-effective, productive and non-bureaucratic.

Sincerely,

Nelson Self

MiddletownUSA Post: 22 May 2009 at 7:54 pm

To: Ed Richter, Middletown Journal

I remember Doug Adkins, Interim Community Revitalization Director promising the City Council a revision to the City of Middletown's late 2008 application for $2.144 million NSP funds. It was promised within 90 days (sometime in April or early May)??? What happened???

You remember the City Council meeting in January where City Councilmen Becker, Schiavone and Marconi raised major concerns about the City's ability to implement any type of purchase-rehab-resale homeownership program. They cited the FHA Dollar Home fiasco, huge losses in other rehab activities, etc. etc. as the reasons.

When they suggested making the NSP activity heavily based on property demolition there was no opposition (in fact there was support) from the City Manager. The video tape of the meeting confirms what we all know.

Nelson Self