Nevada County Picayune and Gurdon Times Newspaper Archive

City looking at housing agreement

Prescott's City Council jumped on the housing bandwagon with the Nevada County Quorum Court.

In the council's regular monthly meeting, held Monday, May 17, it agreed to consider working with the South Arkansas Community Development agency for the renovation and rebuilding of homes within the city limits. A public hearing will be held Monday, June 7, at 7 p.m. at the Nevada County Courthouse to see if there is enough local interest to pursue the idea.

Jon Chadwell, executive director of the Prescott-Nevada County Economic Development Office, introduced representatives from SACD, and said the program they work with is from the Arkansas Department of Finance Administration (ADFA). The SACD is a non-profit organization, receiving its funding through the administration of the grants and loans for the housing program.

Teddi Gardner said the SACD was formed in 1997 following the devastation of the tornadoes on March 1 in Arkadelphia. Research was done on programs available to repair and rebuild houses, and from the research, the SACD came into being.

The SACD is established in Arkadelphia and is looking to branch out and help other communities. Gardner said most of the programs are for low-income people, though there are some for those in the moderate income range. Basically, though, the group does a self-help housing program.

Johnny Ingler defined self-help housing by pointing out the homeowner puts in "sweat equity", generally around 700 hours over a six or seven month period. This, program, however, is primarily for those getting new homes. This particular program, he said, is funded through the United States Department of Agriculture (USDA). Loans for this program are currently 5.875 percent, but can be obtained for as low as 1 percent.

When new homes are built, he said, they appraise in the $80,000-$90,000 range, are energy efficient and average 1,375 square feet of living space. There are nine different house plans for people to choose from. They also get to pick the color, flooring and counter tops.

Those trying to get a new home built will have their debt ratio examined to make sure they can make the payments. They must also undergo mandatory credit counseling.

Gardner said the SACD will work with the city to find land to build homes, but tries to keep the cost of the property as low as possible, so a larger and better house can be built. She pointed out all homes built contain a safe room for inclement weather and have steel doors.

The renovation program is much like the one the quorum court entered into earlier this month. Homes are examined to determine what's needed and can get up to $25,000 in what is termed a "forgivable loan" to have the work done. The loan is forgivable if the homeowner has the house as their primary residence for at least 10 years. The loan is forgiven at the start of the 11th year. Otherwise, the loan is prorated and must be paid back.

Lynn Paul, talking about the rehabilitation program, said the funding comes through ADFA with some help from the Housing and Urban Development Department (HUD) at the federal level.

While there is no age limit for the program, she said, the person owning the house must have lived there at least five years or longer, and it must be their principal residence. The owner can still have a mortgage against the home, but the title must be in the owner's name.

The entire structure will be brought up to code under the terms of the program. This will include wiring, windows, plumbing and siding, which are the most expensive aspects of renovation. Representatives with the SACD will make an annual inspection to make sure the homeowner is keeping the property in good repair.

Should the repairs cost more than $25,000, she said, they can borrow up to $65,000 at a fixed 1 percent rate for 20 years. The first $25,000, though, remains a forgivable loan. However, if there is a mortgage against the property, it must be paid off before construction can begin.

Gardner said if the cost is a little over the $25,000 limit, such as $26,000, and the owner can raise $500, a federal program could also kick in $500 to be used for the rehabilitation under the forgivable loan.

"This helps those close on the rehabilitation program," Paul said. "It's a rewarding program and we hope the state increases the amount of grants."

The only downside to the program is there is no money available to relocate a family while the work is being done. Gardner said families must find their own accommodations during this period.

Chadwell said the application process is intensive and the SACD would take care of all applications and it won't cost Prescott anything. The cap is $350,000 a year for the program, though other agencies can get involved as well.

Should enough people apply to exceed the $350,000 cap, he said, another entity, such as the Prescott Housing Authority could act as a sponsor for an agency such as SACD and get more money. "This can be done annually as long as Congress keeps funding it," Chadwell said.

For those unable to attend the June 7 public meeting at the courthouse, applications can be picked up at the courthouse or the Partnership.