Their buildings on 114th Street won’t be torn down–merely gutted and rebuilt. Nonetheless, the news came like a bombshell for the tenants of the A. Philip Randolph Houses. They would have to move out of their homes for months, and some of them would never be able to come back.

Now, the residents have been hit with another surprise: in May, the New York City Housing Authority announced that it wouldn’t be trying to get the funding that would have both fixed the buildings and added social services counseling, job training and a computer lab to the project.

This winter, tenants learned that the local housing authority planned to apply for federal money to rebuild the 36 run-down tenement buildings in this housing project. But there was a big catch, one that outraged residents. The funding for the work was to come from HOPE VI, a federal housing program that requires that developments be scaled down in size or density. Once the rehab was complete, there wouldn’t be room for all 322 families that now live in the buildings to move back.

With the help of elected officials, tenants successfully pressed NYCHA to revise its blueprints and squeeze in additional low-rent apartments. It seemed a smart compromise, fulfilling tenant needs, NYCHA priorities and federal funding rules.

But weeks later, NYCHA announced that it wouldn’t be applying for the money after all.

According to sources familiar with the discussions, an internal housing authority review concluded that the application wouldn’t meet the federal government’s stringent requirements for the grants. (Among other things, the projects to be rebuilt must be seriously deteriorated and be replaced largely with low-rise owner-occupied townhouses.)

Tenants were furious about the decision, and even angrier that the agency’s Sharon Ebert, the agency’s director of housing finance and development, had given a detailed presentation on the plan only days before at a community board meeting–even though she reportedly already knew the application was dead. (Ebert did not return calls seeking comment.)

“This is the hope that turns into a lie,” rages Councilman Bill Perkins, whose Harlem district includes the buildings. He predicts NYCHA will have a tough time regaining tenants’ trust. “People are now going to fear the worst–the racism fears, the gentrification fears, all the bogeymen are going to come out.”

Commissioner John Martinez told the project’s planners that the city will proceed with the reconstruction anyway, using other sources of money.