City and HUD Discuss Resolution to HOME Monitoring Findings
March 16, 2022
Wilmington Mayor Mike Purzycki and City Housing Director Bob Weir said today the City is working with the U.S. Department of Housing and Urban Development (HUD) to resolve concerns raised by the federal agency’s monitoring of the use of federal HOME funds. The Mayor said today’s announcement is intended to offer facts to dispel misperceptions and rumors as to why the federal government has raised questions.
The Mayor and Director Weir said, contrary to what some are alleging, all funds are accounted for, and that all funds were used for affordable housing for City residents and families. They said none of the federal government’s findings or concerns were connected in any way to financial wrongdoing or missing funds, although the Department of Real Estate and Housing was cited for poor recordkeeping and for not following required policy and procedures. The City is working to correct all deficiencies. Use this link to view the HUD monitoring reports.
First, some background to help with the understanding of HUD’s questions:
•Wilmington receives approximately $3.8 million annually in federal funds to support community and neighborhood projects related to affordable housing, housing for people with AIDS, emergency housing, and youth and community services.
•Of the total $3.8 million federal appropriations to Wilmington, approximately $579,000 is in a category labeled HOME, which is the HOME Investment Partnerships Program that enables local governments to provide decent and affordable housing for low- and very low-income residents.
•HUD conducted monitoring or audit of the City’s HOME-funded projects in May of 2021.
Now, here are the details of the questions raised by HUD as to whether HOME funds were appropriated properly to three housing projects:
•The first project was started in 2016 under a previous City Administration and is a single-family property located in the 500 block of Vandever Avenue. This was a project of the largely defunct Wilmington Housing Partnership (WHP). Today, a family resides in the newly constructed home. The contract between the City and the developer required that any profits realized from the sale of this property be returned to the City government for use on future affordable housing projects. The City allocated $195,000 in HOME funding for this project. The WHP maintains that, due to construction delays and cost overruns, there were no profits realized and, consequently, no money is due to the City. The WHP is collecting the necessary data to substantiate the loss and is in discussions with HUD regarding a resolution.
•The second project was started in 2017 by the Department of Real Estate and Housing under the current Administration and is located on East 11th Street. This is a single-family rehabilitation project which was sold to a family that is living in the home today. The contract/agreement for HOME funds totaled $16,418 for architect/professional services. The City provided documentation for $10,950 for eligible soft costs. However, there was no backup documentation for the balance of the funds. The City submitted proof of all costs ($5,468.45) for the professional services contract and this matter has now been closed by HUD.
•The third project was started in 2018 under the current Administration by local developer Norman Oliver (Our Youth, Inc.), who applied to the Department of Real Estate and Housing (RE&H) for HOME funds to build two single-family homes on Lafayette Boulevard in Quaker Hill. The City invested $186,000 in this two-home project, which was eventually built and sold to families who reside in them today. The federal government’s monitoring found that the developer was not a certified CHODA or Community Housing Development Organization, even though he had been previously certified. A developer must be certified each time HOME funds are sought for a project. The City does not dispute this finding. The City agrees that RE&H staff did not re-certify the developer as required by the federal government. HUD is asking that the City repay the $186,000 invested in this project. The City and HUD are in discussions to resolve the final amount owed.
Mayor Purzycki said the City, as required by HUD, posted the federal government’s audit findings on the City’s website last month, and recently paid for an ad in the local newspaper to notify the public about the HUD findings and efforts to reach a resolution. The City will request from HUD any final amounts to be repaid to the federal government be deducted from its next HOME allocation.