With Greensburg Mayor John Janssen unable to attend last week’s City Council meeting, Vice-Mayor Gary Goodheart inherited the honor of shaking the hand of State USDA Director Chuck Banks while accepting yet another customary, over-sized faux check from the agency—this one for an even $1 million.

   With Greensburg Mayor John Janssen unable to attend last week’s City Council meeting, Vice-Mayor Gary Goodheart inherited the honor of shaking the hand of State USDA Director Chuck Banks while accepting yet another customary, over-sized faux check from the agency—this one for an even $1 million.
   The funds are being given to the City to enable it to pay the planning and administrative expenses associated with implementing USDA’s Self-Help Housing Loan program in the tornado-stricken town.  That program is used primarily to help very low and low-income households construct their own homes.  (See details of the program below.)
   “This is a day we’ve worked toward for several years,” USDA’s Tim Rogers said as he made initial remarks during the presentation.
   City Administrator Steve Hewitt commented on the significance of the occasion by saying, “This definitely is a right step in the right direction of getting affordable housing back in town.  With Habitat for Humanity and other groups like them (Mennonite Housing Rehabilitation Services among them) soon to get involved here the building effort should move quickly.”
   Banks himself noted the possibility of further funding from his agency being possible if results from the initial $1 million prove favorable.
   “If this first round of self-help funding goes well we can likely convince Washington there can be a second and third round,” Banks said.
   Other agencies poised to participate in the effort, and whose effort will be needed to make effective use of the USDA money, include Mennonite Housing, Community Housing Services, South Central Kansas Tornado Recovery Organization (SCKTRO will shoulder the burden of recruiting and organizing the volunteer labor for such housing construction), South Central Community Foundation of Pratt, and Kansas Housing Resource Corporation (KHRC).  All were represented at the check presentation.
   Tom Corns of Greensburg State Bank also reminded those present that anyone planning to build housing in town is eligible for a $700 gift from the H.B. Hudson Foundation.  Corns said interested parties should contact him directly.
   Renters were not left out of the housing picture at the meeting, as Gary Allsup of KHRC announced a program of his agency—Rental Assistance Program—that he said is designed to “help people deal with rental sticker shock as they look to rent down the road units that are just now starting to be built.”
   The program is available to individuals making no more than 80 percent of the county’s median level.  Under the program’s guidelines, KHRC will “pay for the gap between 30 percent of their income and the monthly rent,” according to Allsup.
   By way of example, Allsup referred to someone earning $1,000 a month, 30 percent of which would be $300.  If the rent of a newly finished unit were $500 monthly, KHRC would pay the difference, or $200 a month, directly to the landlord.
   “There are no restrictions as to where in town you could live,” Allsup said.  He directed interested parties to contact Renee Scott in Ford County at 620 225 8230, or Brad Reed of the KHRC office at 785 296 5865.  Another alternative is to visit kshousingcorp.org.
In other matters…
   nHewitt reported he’d recently spoken to FEMA officials, discovering the agency has “a team of housing consultants willing to visit you and your family about finding a reasonable way of moving out of the mobile home park into more permanent housing.”
   He stressed FEMA “will not force anyone out of the mobile home park, but is set up to help people there make plans for getting out of the settlement into longer term housing arrangements.”
  nWith the third and final phase of the city’s electrical project 90 percent finished, a PEC spokesman said the project is virtually complete.  Hewitt echoed “it’s as complete as it needs to be at this point,” and that no impediments remain to prevent anyone in town from being able to connect to electrical power.
  nHewitt also reported temporary lighting, mounted on wooden poles, will be in place along US 54 and Main Street by mid-December and that once placement is completed, “We’ll move on to permanent lighting for all of the city.”  He mentioned the possibility of the manufacturer being “willing to provide for LED lights at a price comparable to what standard fixtures would run.”
    The lighting project has been mentioned on previous occasions as having an approximate price tag of $1 million, a good share of which should be picked up by a $400,000 grant courtesy of the State’s Community Development Grant Block program.  Hewitt said the City’s share of the lighting project should be $150,000.
Details of USDA Self-Help Housing Loan Program…
Purpose: The Section 502 Mutual Self-Help Housing Loan program is used primarily to help very low- and low-income households construct their own homes. The program is targeted to families who are unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other's homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan.
Eligibility: Applicants must have very low or low incomes. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI. Families must be without adequate housing; however, they must be able to afford the mortgage payments including principal, interest, taxes and insurance (PITI). These payments are 22 to 26 percent of an applicant's income. In addition, applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories. Families with very low incomes living in substandard housing are given first priority.
Terms: Loans are for up to 33 years (38 for those with incomes below 60 percent of the area median and who cannot afford 33-year terms). The promissory note interest rate is set by HCFP (in July 1997 it was 7.25 percent). However, the interest rate is not usually meaningful since payment assistance can reduce the interest rate to as low as 1 percent. The amount of subsidy is determined by family income as a percentage of AMI, so that the family pays from 22 to 26 percent of their income for principal, interest, taxes, and insurance (PITI) up to an amount not exceeding the promissory note rate. There is no required down payment. HCFP must also determine repayment feasibility using ratios of repayment (gross) income to PITI and to total family debt.
Standards: Under the Section 502 Mutual Self-Help Housing program, housing must be modest in size, design, and cost. Modest housing is defined as housing costing less than the HUD dollar cap, which as of 1997 was $81,548 with adjustments for high cost areas. Houses constructed must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards.
Approval: Rural Development Community Development Managers have the authority to approve most Section 502 Mutual Self-Help Housing loan requests. If no backlog exists, decisions on applications should be made within 30 to 60 days of the Rural Development office's receipt of the application.