On May 9, the city council unanimously passed legislation that would
give low-income homeowners—those making 80 percent or less of the
Seattle median income—access to one-time, interest-free loans of
up to $5,000 toward past-due mortgage payments.
But in the face of a national lending crisis, the council’s measure
seems like a token gesture. The total allocation for the program is
only $210,000. Thus, the program could conceivably prevent—or
more likely just delay—foreclosure of about 40 to 50 homes.
“The reality is, compared to the cost of home, a maximum loan of
$5,000 is very modest,” Council Member Tom Rasmussen said. “How can
this amount help them out?”
Council Member Richard McIver, who sponsored the legislation, said
it was geared toward people who are only slightly behind on their
payments and therefore might be able to repay their loans. “This helps
provide two to three months of mortgage payments to bring [homeowners]
current,” McIver said.
Nonprofits Solid Ground and the Urban League will administer the
loans. Solid Ground was also chosen in February to administer part of a
fund to help tenants displaced by condo conversions; that fund,
approved by the council last year, was frozen by the mayor in early
2008 to help pay for a funding
shortfall at the city’s Human
Services Department [“Cash Out,” by Jonah Spangenthal-Lee, Feb 14]. A
spokesman for Mayor Nickels did not return a call for comment.
For applicants to qualify, they must show a “temporary interruption
in their income” such as missing work due to an illness, Solid Ground
spokesperson Mike Buchman says—excluding people who’ve simply
lost their jobs. If homeowners can’t maintain their payments after the
loan, Buchman says, “there’s no penalty other than their personal
financial picture and being unable to resurrect credit. The hope is
that clients are screened well enough that that’s unlikely.” 