Repayment of Housing Loans To Taxpayers Is Not Priority

6:17 PM, Dec 13, 2013   |    comments
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GREENSBORO, N.C. - 2 Wants To Know has discovered millions of your tax dollars are being handed out as loans.

But the government in charge of collecting those loans says repayment isn't the priority. We figured you might want to know why.

The loans are your  federal tax dollars sent to the City of Greensboro. The city uses these loans for low income housing developers. Since the 1990's, the city has handed out more than $15 million of your federal tax money. But we found half of those loans still owe the same amount or more than the original amount. The city isn't as concerned your money being paid back as your money providing a service.

A service for people like Cynthia Bryant. Her one bedroom apartment is just $280 per month - perfect for the fixed income senior citizen. She's already skimping on medicine and food to get by.

"I said Lord I thank you because I've been wondering all this time how I was going to take care of myself," Bryant said. "It was just like the windows of heaven just opened up."

In 2008 the City loaned her Rankin Associates complex $635,000 of your federal tax dollars. The amount owed today - $634,075.

In half a decade, they've paid down the loan by only $925. This is just one loan of many. In all Greensboro  used your federal tax dollars to give loans to 29 low income housing developments.

Fourteen still owe the original amount or more because of interest. But the city's not concerned. Greensboro's Cynthia Blue says the paperwork may say "loan" but really you should think of your tax money as being used as a grant.

"The design is to make the units affordable and to preserve those units as affordable units for a long time," Blue said.

City leaders say this unusual set-up protects your money.  By calling the funding a loan, the city has oversight controls. For example, the loans require yearly inspections of the property and limits how much profit the developers can make. That means lower rents for the people living in the developments.

Here's another protection of  your investment of federal tax dollars.  Most of the loans are structured with low-to-no payments - with a balloon payment at the end. If the developer can't make the payments, the city can reinvest in the property or the developer may sell the property and repay the money.

Bottom line: the city measures success by what the money does instead of when or if it comes back.

Greensboro's loaned out about $15,000,000 million. That's produced 14-hundred units for people to live in.

 

 

 

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