Milwaukee tweaks home-repair loans

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Milwaukee aldermen are still debating the eligibility requirements for a home-repair loan program even as the proposal nears a final vote.

The program would make loans available to homeowners at risk of losing their homes over code-compliance problems. The city would have a $65,000 pot for the program, and each qualified homeowner would be eligible for as much as a $15,000, no-interest loan to be paid back when the home is sold.

The sticking point has been who those homeowners would be.

It was contentious enough that the city’s Zoning, Neighborhoods & Development Committee in December refused to vote on the program until the eligibility disagreements were resolved. At the time, committee members postponed the vote because, among other things, it was unclear how homeowners would be selected.

The city’s Department of Neighborhood Services, which would run the program, clarified its position on eligibility when it returned to the zoning committee Tuesday. According to a program term sheet, eligible homeowners must be up-to-date on property taxes and mortgage payments, among other things.

The committee approved the program, but the debate that started in December over income caps continued.

DNS officials have insisted the income cap for eligible residents should be set at 50 percent of Milwaukee County’s median income. According to information provided by the DNS, that would mean homeowners earning no more than $24,600 for a single-person family or $46,350 for an eight-person family would be eligible.

Alderman Robert Bauman, a member of the committee, wants the cap set at 120 percent. His proposal would increase the income cap to $59,040 for a single-person family and $111,240 for an eight-person family.

Bauman, reprising an argument from December, said Tuesday that his proposal allows for flexibility. The DNS, he said, still could award the loans to homeowners with incomes far below the 120 percent cap.

“We are drawing an absolute, black line at 50 percent,” he said during the meeting, “and anyone making 51 percent, we couldn’t even recommend them to the program.”

Raising the ceiling, he said, would let the department consider a wider pool of potential applicants.

But that is the source of resistance from DNS because homeowners do not apply for the loans, DNS Commissioner Art Dahlberg said. The department does not have enough money or staff members to market the program to the general public, he said, so program involvement would be based on referrals from DNS inspectors.

Still, the call for flexibility was strong enough to prompt a proposal that the program include the possibility for waiving the income cap proposed by the DNS if a homeowner is above the 50 percent cap but has extenuating circumstances, such as medical bills. The committee did not vote on the amendment but required that it be ready for a vote before the Common Council on Feb. 11.

The DNS might spend the $65,000 before using the waiver.

Dahlberg told the committee Tuesday the department found 36 homeowners who could be eligible during its latest round of re-inspections.

After the meeting, Dahlberg said the criteria his department crafted for the program should ensure the city takes a good risk with the loans. The right candidates, he said, were managing before the department cited them for code violations.

“We aren’t trying,” he said, “to solve all the world’s ills with this program.” Follow @bkevit