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Supes shut door on HOME loan |
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Saturday, 16 August 2008 |
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By Mike Gervais
Register Staff 8-14-2008
Inyo County has elected to shut down its HOME grant program for first-time home buyers.
At its meeting on Tuesday, the Inyo County Board of Supervisors voted unanimously to not renew the program, which has helped four residents purchase their first homes. The board cited several issues that it would like to address before continuing with the pricey loans.
The HOME loan program utilizes a federal grant that the county can loan to citizens who are attempting to purchase their first home.
Inyo County Planning Director Pat Cecil suggested that the Inyo County Board of Supervisors approve his request to apply for the HOME loan grant program this week and schedule later discussions on how the county would handle this round of loans.
Cecil mentioned that the board may want to discuss the possibility of partnering with a different organization (the Inyo-Mono Advocates for Community Action worked with the county during the first series of loans to screen HOME loan applicants) and how the county planned to supply enough money upfront for down payments on new homes.
The board expressed dismay that the planning director’s request came so late in the application process.
Second District Supervisor Susan Cash said that she felt the program was worthwhile and that she would like to continue the program, “but there are so many things we have to discuss” before diving back in.
Cash also said that the Inyo County Planning Department received the HOME grant application packet back in June, but the board did not see a request to apply for the funds until Tuesday, just three days from the grant deadline.
Cecil suggested that the county could apply for the HOME grant, discuss outstanding issues with the program at a later date, and decide this fall, when the grant would be awarded, if it wanted to move forward.
But the supervisors agreed that it would be a waste of resources to spend staff time filling out the application if it is not clear whether the county should move forward with the program.
During its first go at the HOME grant loans, Inyo County faced difficulties ranging from problems receiving state funding, to miscommunications between county employees administering the grant and the subcontractor, IMACA, regarding the approval process for home loan applicants.
“I, as one board member, am not willing to do this again,” said Third District Supervisor Beverly Brown. “It’s hard working with another agency, and there are so many issues that have come up.” She said the board would need more time to discuss the program and work out the kinks before she could give her approval for county staff members to spend time completing the application.
The other supervisors echoed that sentiment.
There’s another major issue the county came across during its initial go-round with the first-time home buyer grants.
The problem is that the state receives the money before it reaches the county. When the county first got on board with the program, it was able to give part of the loan to qualified first-time home-buyers for the down payment of their home.
But as the county prepared to issue the last two loans (the fifth was ultimately rejected as the applicant was found not to qualify), the state changed the rules. The county was required to fork over the down-payment money out of its own pocket and wait for 6-8 weeks for a reimbursement from the state.
The supervisors expressed fear that the county could find itself in a financial pinch if it were required to front thousands of dollars per loan and wait for the reimbursement while Inyo’s economy struggles.
“I don’t see any possible way that we can front this money and wait 6-8 weeks” to get it back, said Brown.
Inyo County Auditor Controller Leslie Chapman did say that the county could find the funds to float the loans up front and continue the program, but that could leave government finances in a pinch if an emergency arises.
Another fear expressed by the supervisors is the possibility of a HOME Loan recipient defaulting on the loan.
In such cases the county is responsible for making up the loss.
Generally in such cases, the home would be sold to cover the outstanding debt, but in today’s real estate market, it is likely that the value of homes will continue to plummet, and a home’s value may not cover the debt.
If that were to occur, Inyo would be liable to use its funds to make up the difference.
While the board agreed Tuesday to sit out on this year’s HOME grant cycle, did say that it could re-think the process and start anew at the beginning of the next grant cycle.
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Last Updated ( Saturday, 13 September 2008 )
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