Funding feud threatens four housing projects in Nevada

Wednesday, July 25, 2001 | 10:22 a.m.

SUN STAFF AND WIRE REPORTS

Four Nevada projects that would provide 344 affordable apartments for the working poor are in jeopardy because of a battle over federal funding.

At stake is the success of a government program designed to encourage low-income housing. The program -- the Federal Housing Administration Multifamily Credit Subsidy -- ran out of money in April and won't get any more until the new fiscal year starts Oct. 1.

Congress has failed to appropriate interim dollars that would guarantee loans and pay for defaults. The Bush administration refused an alternate solution, leaving in the lurch projects valued at $3.5 billion to develop up to 50,000 apartments in 33 states and Washington, D.C.

The FHA has remained tight-lipped about the exact locations of the projects affected by the funding shortfall, saying only that three of the Nevada projects are in Las Vegas and one is in Reno.

The Sun in its May 7 edition quoted the Mortgage Bankers Association as saying the locally planned projects include a 58-unit complex to be built at $2.6 million, a 51-unit complex to be built at $4.5 million and a 41-unit project to be built at $2.7 million.

The Reno project is a 194-unit complex to be built at $4 million, officials said.

The FHA program insures loans that finance the construction or rehabilitation of badly needed rental apartments for moderate-income families. The agency closed the program in April after exhausting the $101 million appropriated this year. Since then Congress and the White House have bickered about what to do.

Anticipating another year of high demand, Congress set aside an extra $40 million that would be available if the $101 million weren't enough. But to release that extra money the White House must declare an "emergency."

Earlier this month the White House and Congress appeared close to a resolution. At the administration's suggestion the House approved a supplemental spending bill that contained a separate $40 million for the program. The Senate approved a slightly different bill that would strip the offending "emergency" language from the original legislation.

But when negotiators from the two chambers met to hammer out a final version of the supplemental spending bill last week, all references to the affordable housing program disappeared.

"We were as surprised as anyone to hear that the conference committee had dropped the $40 million," said John Weicher, who heads the FHA. But, he said, the administration still won't declare the situation an emergency and permit the release of the original extra $40 million.

Gannett News Service and Sun reporter Ed Koch

contributed to this report.