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With the clock running out on the Clinton Administration, a coalition of political heavyweights and federal housing officials announced a last-minute save in January that would rescue about 465 brownstones that have been pillaged, exploited and left for dead through scams carried out under the federal mortgage insurance program known as 203(k). Larded with cash from the flush Federal Housing Administration insurance fund and reliant upon the expertise of some of the city’s most admired nonprofit housing groups, the plan looks like salvation for both low-income tenants and fragile housing stock:

  • The federal Department of Housing and Urban Development, after taking title to the buildings, will pass them off to nonprofits for a nominal cost. The nonprofits will manage the occupied buildings (tenants will pay no more than 30 percent of their income) and sell off the vacant ones to families, with preference given to upper Manhattan residents who make up to $79,000.
  • HUD will pay back the banks that now hold the mortgages, pay for all repairs and pay the powerhouse nonprofits that will be overseeing the buildings with management, development and marketing fees. (Abyssinian Development Corporation will superintend about 185 properties in Harlem, and East Brooklyn Congregations will manage the rest in Brooklyn.)

It’s quite a victory. Now, there’s just one thing left to do: Make it work.

That won’t be easy. The scams have left a messy legal tangle behind. It could take HUD 18 months or longer to get control of some of the properties. In the meantime, since the original nonprofits involved in the scandal still hold the titles, they are actively trying to unload some of the debt-ridden brownstones on unwary buyers. (“There’s nothing that HUD, you, I or any of these people can do to stop them,” says Abyssinian’s Darren Walker, an architect of the plan.) On top of that, several of the plan’s masterminds at the federal Department of Housing and Development–as well as the department’s top brass–are now out of their jobs.

There are practical pitfalls as well. The motley collection could be a hard sell: Some are untouched, some partly fixed and boarded up, and some have been gutted. And at this point, nobody knows exactly how many properties are involved–or who lives in them.

At a raucous meeting in mid-January, top HUD representatives, Harlem pols and nonprofit housing experts presented the plan to about a hundred frustrated and skeptical Harlem tenants and local activists. The officials, pledging repeatedly that no tenant would be evicted, also promised to quickly address all the buildings’ maintenance problems.

The deal–and those promises–are impressive, says Elizabeth Kane of the Westside SRO Law Project, which initially uncovered the scam. But she and other observers worry that even as politicians promise that no tenant will be ousted, that pledge will be hard to enforce. “There’s an enormous amount of work ahead of us to make sure it’s implemented in a way that’s as good as its word,” she said.

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