Spokane rushes to save foreclosure program after feds pull funding

(The Center Square) – The city of Spokane is scrambling to hire certified housing counselors as federal cuts upend a program that prevented over 700 home foreclosures in the area last year.

Federal funding typically pays for the counseling services provided by individuals certified by the U.S. Department of Housing and Urban Development. According to HUD, there are 10 housing counseling agencies across the state, with Community Frameworks and Credit.org in Spokane.

The counselors help residents avoid eviction, handle disputes with landlords and access other services amid housing insecurity. Dawn Kinder, director of Spokane’s Neighborhood, Housing and Human Services division, said Monday that the city wants to fill the service gap by July.

“It was brought to our attention in the last two, maybe three weeks that federal funding sources that have provided HUD certified housing counselors in the region have been cut,” Kinder told the council, “which would result in layoffs of those positions at partner agencies effective July 1.”

She said NHHS will disseminate a request for proposals today, with applicant’s submissions due by June 29, which is unusually fast for the procurement process. Kinder wants to provide $300,000 for six months to prevent the agencies from going under as NHHS finds other solutions.

Expediting the process could save the jobs of those currently serving the region, but only for so long. Kinder said a volunteer review team would have about two days to review the proposals after Sunday before drafting contracts over the following five for an initial review by July 9.

“One agency in Spokane alone, using just two HUD certified housing counselors, prevented 376 foreclosures last year, primarily for senior citizens who are low income,” she said, with Monday’s agenda placing the total figure at over 700 foreclosures prevented between both providers.

Anyone one project is capped at $200,000, but Kinder said the $300,000 total should cover both agencies for the next six months. She recognized the quick turnaround when questioned by the council but emphasized the need to speed things up to prevent people from losing their homes.

Most seniors who use the program pay monthly mortgages ranging from $500 to $700, but Kinder said they will never be able to afford market-rate housing in Spokane again if the banks foreclose on them.

Some of the agencies had relied on federal funding for the last two decades, so the cuts surprised everyone, especially the city, which will now foot the bill. Kinder said NHHS would pay for the contracts with 1590 service funds, raised by a 0.1% affordable housing sales tax.

The goal is to put the proposals up for a vote by the council by the end of July.

“Often, we have existing contracts in place where we can bring the council an amendment to the scope instead and add funds when necessary to preserve resources,” Kinder said. “We don’t currently fund any of these because they have been federally funded, so our only opportunity here is to do a whole new contracting round.”