TENANTS SUFFER UNDER FEDERAL MORTGAGE PROGRAM

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A federal housing department program that has been a haven for real estate speculators who use nonprofits to line their pockets has now caught some Harlem residents in the crosshairs.

When St. Stephens Baptist Church, a Las Vegas-based nonprofit, bought 108 West 119th Street early last year, it was taking part in the 203(k) program run by the federal Department of Housing and Urban Development. This program, in which the government guarantees mortgage and rehab money loaned to nonprofits and homeowners, provides cash for purchase and substantial repairs.

But tenants in this 10-room single-room occupancy residence haven’t seen many repairs since the nonprofit took over the building. In fact, the city housing department has now stepped in and pledged to make necessary repairs–and the tenants are stuck with this summer’s electric bills.

“It’s not right,” said Wyman Carter, who has lived in the building for 13 years. “Our issue is that St. Stephens isn’t doing what it should to maintain this building.”

Housing inspectors have come to the building five times over the last few months and still found the same persistent problems, including leaks that trickle down two stories and dangerous junk in the basement. After spending last winter without heat or hot water, the tenants stopped paying rent in January.

“They had been paying rent, but it was going into a sink hole,” said Terry Poe of the West Side SRO Law Project. “It hadn’t been going into the building.”

Then, in April, Con Edison informed tenants that the owner hadn’t been paying the electricity bill, and that they owed about $1,800. That’s when residents, half of whom are on some kind of public assistance, started ponying up. In total they’ve laid out over $2,700. St. Stephens Baptist Church could not be reached for comment.

This is certainly not the intention of the federal 203(k) program, which was set up to provide hard-to-come-by rehab money in neighborhoods where banks are skittish to make loans. But it is consistent with some of the other flawed or failed rehab projects set up in New York City under this program.

Last fall, City Limits wrote about how investors have used this program to turn a quick profit on buildings in Harlem and Bed-Stuy. The buildings were generally bought at an inflated price, leaving little money for rehab and a big danger of default. Usually, repairs were shoddy, if they were even done at all.

Residents at 108 West 119th St. were recently told that a new management company took over the building in June. It is now threatening to take the tenants to court for not paying their rent–even though the electric bill still hasn’t been paid.

Carter now thinks back fondly on his former landlord. “He fixed the floor, he did his little paint job. It was shoddy, but at least he tried.”