HUD Considers Foreclosure On Tornado Damaged Housing Cooperative
Efforts by residents of a low- income housing cooperative in Springfield, Massachusetts to recover from the June 2011 tornado have been dealt another setback. The U.S. Department of Housing and Urban Development , which funded the 90- unit complex nearly 40 years ago, is weighing foreclosure.
The Boston HUD office has made a foreclosure recommendation for the Hill Homes Housing Cooperative. The recommendation is being evaluated by HUD headquarters. A spokesperson for HUD, in an email, said the project had a seven- year history of failed physical inspection scores, which triggered a technical default according to the terms of the mortgage.
Twenty- six of the units in the townhouse complex were heavily damaged by the tornado that roared through Springfield on June 1, 2011. Efforts to rebuild have snagged over disagreements on how to proceed. Some co-op members believe the complex can be rehabbed. Others favor demolition and reconstruction at another location.
Marilyn Bryant, the president of the co-op board said the last 21 months have been frustrating.
A $1.3 million insurance settlement for the tornado damage is in an escrow account while displaced residents remain in temporary housing, and options are explored according to co-op board vice president Ethel Wright.
The damaged units were condemned by the city of Springfield. The co-op is in court fighting a demolition order. A lawyer , who had been working for the board pro-bono, recently withdrew from the case. Now, comes the threat of foreclosure. Wright said just over $300,000 is still owed on the 40 year mortgage which matures in 2015.
Springfield City Councilor Bud Williams, one of several local elected officials who have been trying to help resident of the housing development, is critical of HUD.
A HUD spokesperson said the agency’s foreclosure guidelines specify the local government unit-, in this case, the city of Springfield- has a right of first refusal to acquire the property. It has been reported that Springfield College is attempting to acquire the site to expand its neighboring campus. A college spokesperson would say only that through the years there has been interest in many properties surrounding the campus.
Anti-poverty activists point to the Hill Homes saga as an example of the uneven recovery from the tornado. Most of the single family homes that were damaged have been repaired or rebuilt, while most of the apartments and affordable housing that was lost in the storm have not been brought back.
Democratic State Representative Benjamin Swan said the Hill Homes residents appear to have been treated differently than others who were affected by the tornado.
Swan said natural disasters have been used, historically, has a means to displace minority populations.