`Housing purchase and rehab program is going ahead without grant`

By Joe Pinchot
Herald Staff Writer

Community Homebuyers Inc. will proceed with its home ownership program despite being turned down for a federal grant.

But CHI will have to alter the way it had been planning to work, said L. DeWitt Boosel, executive director of Mercer County Housing Authority, which established the nonprofit corporation. CHI plans to buy aging homes, rehabilitate them and sell them to working families of low and moderate incomes who have never owned a house before. The $105,000 grant sought from the Federal Home Loan Bank was to be used for rehabilitation and assistance for down payments and closing costs.

But a key use for the money was to help CHI absorb the cost of selling a house for less than the rehabilitation cost, which is likely in the areas CHI will be targeting. Banks will only give mortgages for a house’s appraised value, which is based in part on the value of nearby properties.

CHI has entered into a partnership with National City Community Development Corp., First National Bank of Pennsylvania, First Western Bank N.A. and Mellon Bank to provide a total of $1.05 million for property purchase and rehabilitation or demolition. But that money cannot be used to absorb losses on sales at prices lower than appraisals.

“We can go ahead without the Home Loan Bank money but we have to be very selective about the buildings we choose because we don’t have any write-down ability,” Boosel said.

The authority was to find out today why it was turned down. Boosel said 38 of 78 applications were funded.

CHI also has expressed a desire to apply for $267,120 from the HOME Investment Partnership Program of the state Department of Community and Economic Development, but has not applied yet.

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Updated January 8, 1999
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