Monday, May 17, 2004
Federal grants are reducing the costs for prospective buyers.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
SHARON, Pa. -- The city is ready to break ground on its first single-family affordable housing project.
The city is tapping $280,000 in federal Community Development Block Grants to finance the construction of three homes for low- or moderate-income families.
Affordable family housing is being pushed by the U.S. Department of Housing & amp; Urban Development, which provides the CDBG program, said Rosette Fisher, executive director of the city's Community Development Department.
Sharon has formed a partnership with Community Action Partnership of Mercer County (formerly Mercer County Community Action Agency), which is serving as the project developer.
Fisher said the agency is ready to begin digging a basement for the first new home, at 377 A St. on the city's West Hill.
Specifications of house
It will be a three-bedroom, 11/2-bath home with a full basement, said Gary Cervone, vice president and chief financial officer of Community Action Partnership. The project will cost $90,000.
The CDBG is being used as a subsidy to reduce the cost of the project to the homeowner, and the Mercer County Affordable Housing Trust Fund is kicking in $15,000 as well, Cervone said.
The basement is prefabricated, so all that is needed is for the excavation contractor to dig the hole, Cervone said.
The house is a manufactured structure built by Commodore Homes near Clarion, Pa.
Once the basement is in place, the house will be placed on the foundation, Cervone said.
Additional projects
Community Action Partnership has some experience with this type of construction, he said, noting that the agency has built four of them in nearby Farrell over the past several years and plans to build a fifth there.
The new house might cost $90,000, but that's not what a buyer will pay.
Fisher said the city will have the home appraised once it is finished and will sell it at or near the appraised value. Fisher and Cervone said the house will likely appraise for much less than the total cost.
Appraisal values are determined by the sale of other homes in the area and the location of the particular house being appraised.
The actual cost of the manufactured house, a stock model made by Commodore Homes, is about $38,000, and that's probably about where the appraisal will come in, Cervone said.
Application process
There isn't a targeted buyer for the house. Once it is completed, applications will be taken from interested families.
They must meet HUD income guidelines -- for example, a family of four can have a maximum income of only $38,000. They also must be able to secure a conventional mortgage and be first-time home buyers.
Although the city has plans to build two more of the affordable units, it's uncertain when that will happen, Fisher said.
Finding suitable building sites has turned out to be more difficult than first thought, she said. Lot size and location are factors in making that selection.
The houses have to be built in areas where the appraised value is low enough for the targeted families to buy them, Cervone said.
gwin@vindy.com