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TUSCALOOSA | Tuscaloosa Housing Authority officials are working on a response to a corrective action plan recommended by the U.S. Department of Housing and Urban Development.
“I’m just one commissioner, but my inclination is to do exactly what HUD asked us to do,” said Jim Phillips, a member of the Housing Authority board of commissioners. “I don’t understand any other position but that.”
In September, HUD officials made an on-site visit to the Housing Authority and generated a report in October. The report took exception to some recent THA real estate purchases, its relationship with the nonprofit Tuscaloosa Affordable Housing Corp. and personnel and management issues.
The corrective action plan addresses each of the issues raised in the report and asks the authority what steps it will take to remedy the problems.
Rick Herbert, THA executive director, took issue with some of the recommended remedies.
“Some of this stuff we’ve answered repeatedly,” Herbert said. “How many times do we have to answer them before they’re answered?”
He also said that since HUD drafted the corrective action plan, THA has been taken off “manual review.” That means that HUD no longer reviews all of THA’s expenditures before the agency spends money.
The most pressing issue for THA is property bought with loans that encumber Housing Authority assets. HUD has told THA that it must repay any federal funds used to buy the property or make debt service on the property. And THA can’t make any debt service with federal funds.
The Housing Authority has some non-federal funds that it can use to make debt payments, Herbert said.
“I’ve got enough right now to do debt service, and the banks are willing to give us an extension,” Herbert said.
The property will be refinanced and eventually transferred into the Tuscaloosa Affordable Housing Corp.’s name.
But the THA board hasn’t determined yet how it will repay the loans without federal funds. The nonprofit has no dedicated funding source.
If necessary, THA can sell the property, Herbert said. He said he’s been approached by a developer who offered to buy all of it. But he hesitates to do that because it would kill the authority’s chances of getting a Hope VI grant.
In its corrective action plan, HUD wants a list of property that has been and will be deeded to Tuscaloosa Affordable Housing and copies of the deeds. It also wants specifically to know when a house purchased from City Council President Harrison Taylor is transferred to the nonprofit.
HUD wants a complete list of loans used to purchase the property and it wants documentation showing the loans have been terminated or transferred to Tuscaloosa Affordable Housing Corp. THA must repay $153,000 in developers’ fees from the McKenzie Court Hope VI project, $15,000 from the THA operating fund and $9,400 from the THA rental account used to make interest payments on the loans. Repayment must come from non-federal funds. More HERE
