BY KEN de la BASTIDE
It will seem like winning the lottery for 60 Kokomo families as the city — through a federal grant — is making the dream of home ownership possible.
Debbie Cook, director of development for the city, said a $2.18 million Neighborhood Stabilization Grant has been received from the U.S. Housing and Urban Development.
The funds will be used to purchase and rehabilitate up to 60 houses in the city.
Kokomo selected the Mishawaka-based Mecca Companies to oversee the operation of the program through a bid proposal process. The company has offices at Kokomo City Hall.
Kyle Bach, president and CEO of Mecca, said the program is the first in Indiana and the company has been doing similar work in Illinois.
The first phase of the program involved 30 houses, of which 19 will be sold for single-family occupancy and 11 will be sold for use as rental properties.
Bach said the company purchases foreclosed properties in a blighted area of Kokomo. They must be vacant or abandoned for at least 90 days.
The company has budgeted $55,000 for the purchase and rehabilitation of each property, he said. The houses cannot be sold for more than the $55,000.
Cook said the targeted area for the program includes most of the city of Kokomo.
People wanting to purchase a home once it has been rehabilitated has to meet an income guideline and has to be at or below 125 percent of the area median income.
The city is offering down payment assistance of up to 20 percent of the purchase price, which doesn’t have to be repaid if the family resides in the house for a predetermined period of time.
Bach said potential owners would have to obtain a mortgage.
He said the rehabilitation work could include a new heating and air conditioning unit, new appliances, painting, electrical, plumbing and exterior siding.
Local contractors will be asked to submit bids for the work being done at each of the houses purchased by Mecca.
“This will help stimulate the local economy,” Bach said.
Cook said when each home is sold, approximately 67 percent of the funds are used to purchase and rehabilitate another home. The city shares the administrative fee with Mecca.
The city will do all the necessary paperwork and file reports with HUD. It will also process the applications to purchase a home and verify income levels.
Families can pre-qualify with the city for the purchase of a home, according to Cook.
“This will get families into a home that might not have been able to make a purchase in the past,” Cook said.
Bach said the rental properties will be sold to either a single buy or several purchasers and the rent collected can’t be more than the HUD maximum. He said the rental property would be two- and three-bedroom houses. Renters have to be at or below 50 percent of the area median income to qualify.
Cook said landlords would not be eligible to purchase the rehabilitated property if they owe back taxes or there are liens on current real estate holdings.
“We’re going to be careful with our selection,” Bach said.
Bach said the company hopes to make the first purchase by the end of the year and has asked HUD for $75,000 to be placed in an escrow account to place bids on properties for purchase.
He said once a home is sold, the process will begin for the selection of another property to be purchased and rehabilitated.
