City of College Station & Local Non-Profit Disagree Over Use of a Federal Housing Grant

A local non-profit and faith based housing assistance organization disagrees with the city of College Station over the administration of a federal grant that assists homebuyers with lower incomes.

EMBRACE Brazos Valley owes the city of College Station $180,974 dollars. That’s after the city council approved reimbursing HUD…the department of housing and urban development…after city staff determined EMBRACE spent money on an out of town project.

EMBRACE attorney Chris Peterson says the issue is over two lots purchased in College Station being used as collateral. Peterson says the original contract administrators knew the collateral was for a line of credit to pay operating expenses in multiple cities.

While College Station self-reported a technical violation to HUD, Peterson says that hasn’t been an issue in other cities.

Peterson says one home in College Station was built and sold. Construction on the second home is continuing without the grant and will go as far as the money generated from the sale of the first home. Peterson says when the second house is completed and sold, a portion of those proceeds will be returned to the city under the terms of the grant.

Click below for comments from Chris Peterson, visiting with WTAW’s Bill Oliver.

 

According to a recap of the July 24 city council meeting posted on the city’s website:

In 2012, the council approved a funding agreement with EMBRACE Brazos Valley to provide $198,607.50 in federal HOME Investment Partnership Funds to construct two new single‐family homes that would be available for income eligible homebuyers. EMBRACE was reimbursed $180,973.90 for lot acquisition and construction costs. However, staff identified a misuse of funds when EMBRACE used a reimbursement on another project outside of the city limits instead of repaying a line of credit at the bank. HUD will be repaid from the city’s general fund. City Manager Kelly Templin stressed that city staff was not at fault and is pursuing corrective action to resolve the issue. If the funds are reimbursed by EMBRACE, the money will go back into the general fund.

College Station’s community services director, Debbie Eller, says it is the first time in the 15 years she’s worked for the city that there has been a funding issue. Eller did not give specifics on how the city is attempting to get reimbursed from EMBRACE.

Click below for comments from Debbie Eller, visiting with WTAW’s Bill Oliver.

 

Bryan city officials say there have no problems with six contracts awarded to EMBRACE, though no community housing grant contracts have been awarded since learning what happened in College Station. But EMBRACE has been awarded contracting jobs in Bryan when they were the lowest qualified bidder. Bryan officials also noted EMBRACE has done several minor repair projects and has provided free services.