Council Panel Backs Condo Repair Loans

A Los Angeles city housing panel recommended Monday the creation of loan programs to help condominium owners rebuild and to allow investors to buy and repair damaged apartment buildings.

The latest effort to rebuild the city’s quake-damaged housing stock, the programs would provide zero- or low-interest loans from a $318-million pool of federal and local housing repair funds.

The loan programs, recommended by the council’s Housing and Community Redevelopment Committee, must win final approval by the entire City Council next week.

The program for condo owners alone, city officials estimate, could help rebuild between 3,000 and 5,000 units.

Responding to condo owners who complained that they could not pay to repair their damaged units, the panel voted to provide zero-interest loans to individual owners and to condo associations that suffered damage to common areas in the condo complexes.

The owners of many quake-damaged condominiums have yet to begin repairs because major fixes often require the support of a majority of individual owners. In some cases, condo owners are in legal squabbles with each other over whether to rebuild.

“We feel we are helping out where there is an unmet need,” said Bob Moncrief, the city’s housing director. He noted that the Small Business Administration has received 1,900 loan applications for condo projects.

The loan program would be offered to individual condo owners and associations that have already been rejected by other private or government loan programs.

Associations interested in a loan to repair common areas must get a majority of the members to agree to take on the loan and each pay a “pro rata” share of the monthly payments. Individual owners can apply for separate loans without a vote of the entire association.

The funds must be paid off over a 30-year period with the first payment deferred for five years. The loan program will provide a maximum of $35,000 per unit.

Investors interested in buying and rehabilitating damaged apartment buildings would be able to get 30-year loans with interest rates that vary from zero to 4%, based on how many units are set aside for low-income tenants.

In related actions, the housing panel recommended approval of four emergency loans totaling $6.59 million to rebuild four quake-damaged apartment buildings in Sherman Oaks and Studio City, which will provide 243 apartments.