A coalition of five local banks has agreed to provide $1.8 million to help low-income people fix their houses, officials said.
The coalition was spurred partly by the federal Community Reinvestment Act. Regulators enforcing the act encourage banks to make such investments.The money will be lent evenly between the Salt Lake City Redevelopment Agency and the Salt Lake County Housing Authority. Those agencies will combine the funds with money obtained through federal programs and will lend it to low- and moderate-income homeowners at interest rates ranging from 3 percent to 9 percent, officials said.
"As lenders, we're excited," said M.J. Camberlango, chairman of the coalition, known as the Multibank Community Reinvestment Program. "Our hope is that this agreement will serve as a model for additional funding in the future."
Noting that about 400 houses are vacant or boarded in the county, city Redevelopment Agency Director Alice Larkin Steiner said the money will help bring those houses back into usable shape.
She said borrowers must be unable to receive a conventional second mortgage and must also demonstrate an ability to repay the low-interest loans.
The money will help the city's agency overcome some recent frustrations involving federal programs. The Department of Housing and Urban Development told told the city's Redevelopment Agency recently to return $180,000 in rental rehabilitation money because it didn't lend the money quickly enough. But the federal money came with rules and requirements that made it difficult for many owners to qualify, Steiner said.
HUD has decided to discontinue that program, as well as others.
"We don't know what we'll get from year to year," said Doug Tapking, director of the county's Housing Authority. He hopes the coalition of banks will decide to continue funding the two agencies.
The five banks are First Interstate, First Security, Olympus, Valley and Zions First National.