MISSOULA - The Montana Department of Commerce, through its Community Development Block Grant program, has awarded a grant to Missoula County to provide homeowners with assistance paying for home rehabilitation and repair costs. The program is administered by District XI Human Resource Council, Inc. (HRC) in an effort to address health and safety issues for homeowners, make their home comfortable and adaptable to their needs and help increase the quality of housing available in Missoula County.
To be eligible for the Home Rehabilitation Assistance Loan Program, homes must be located within Missoula County but outside of Missoula city limits. The home must be the primary residence of the homeowner; rental units do not qualify. The household must be at or below 80 percent of the area median income to qualify for the loan. That is based on household size and changes annually. For example, in 2017 a family of four would qualify if they are at or below $49,200 gross income.
The final criterion is the homeowner must be in need of a loan for repair or rehabilitation that is not cosmetic. The program can be applied to upgrades and repairs including electrical, plumbing, roofing and weatherization assistance. The funds can also be used to modify a home that is over-crowded.
Cosmetic projects do not qualify unless they are to save or preserve the materials. For example, painting and staining wood in the home would not be eligible unless it had not been treated and it could deteriorate.
“It is really exciting because we have a lot of options in assisting households and can go in and do multiple things,” said Jim Morton, executive director for the District XI Human Resource Council, Inc.
Applicants for the program need to propose the project and have some estimates of cost. The Human Resource Council acts as the lender and will assist the homeowner in creating a work order for the projects. They then help the homeowner choose a contractor(s) based on estimates they receive. Payments would be processed by the Human Resource Council after the homeowner verifies the work has been done and is completed to their satisfaction.
“Since the homeowner is borrowing the money, we expect them to be engaged but we can help them through the process,” said Morton.
The borrower must justify the costs with supporting documentation and Morton said they will not lend more than the equity of the home. Morton said the Department of Commerce did not want to impose an arbitrary limit on the amount that could be borrowed but the HRC will work with the homeowners to justify the amount.
“We are not as concerned about your credit score [as other lenders]. We want to make sure that there are no outstanding taxes, child support or other leans that would affect your equity. We also have the right to defer payment and we do that routinely because people get into situations where they have job loss or just don’t have the income,” said Morton.
The interest on the loan for a similar program within Missoula City is 3.5 percent simple interest that does not compound. While the interest rate has not been formalized for the county program, Morton expects it will be similar.
According to Morton, the contract between the Department of Commerce and Missoula County designates only one home can be in production at a time. It is not until the rehabilitation on that home is complete, all permits have been signed off, any concerns raised have been addressed, and the construction and repair components of the loan are closed out that funds will be available for the next project.
“Why that is a challenge is that it means we can’t be working on more than one home at a time,” said Morton. “We have been thinking that what we would like to do is maintain some sort of a waiting list. However [even with the waiting list] we can’t begin any kind of repair or work until the current loan is closed out and all the work has been completed and approved. That could be three to four months or it could be one month depending on the nature of the repair.”
Morton estimates that they should be able to do three per year depending on how quickly the projects are completed and if the funds remain available. The community development block grant program is congressionally appropriated. Morton said that the proposed federal budget for fiscal year 2018 that starts in October does not include funding for Community Block Grants.
Program startup is expected by May 1. Initially the program will be first come first serve. However, Morton acknowledged they need a way to address situations that need immediate attention, such as septic tank replacement, for the health and safety of the homeowner.
“We are hoping to be flexible enough to work with families and households that are facing difficulties whether they are long-term emergencies or short-term,” said Morton.
For more information or to receive an application, contact Human Resource Council Loan Officer Shera at 406-728-3710.
Reader Comments(0)