Fox 16 Investigates: Hopeless Home Program

EUDORA, Ark. -- An elderly couple in Chicot County thought a government program would be the key to addressing the issues with their home. Instead, they've been living in a rental unit without heat , and cooking dinner on a hot plate for more than a year, unsure about their fate after they say their home was demolished while the program failed to deliver.

Hopes & HOME

Eighty-four year old Lucell Hopes doesn't get around as easily as he once did. Inside the small rental house, space is cramped. There's no room large enough for him and his wife with advanced Alzheimer's to keep both their beds. When the couple moved into the rental in the summer of 2015, they didn't plan on staying long.

"My wife is down where she can't walk. All she hollers is when we going home? When she going home? " Hopes said.

The home they had, Hopes would admit, was not anything special. But it had been theirs for decades. When his home burnt down in the 1980s, he paid cash to quickly replace it with a used mobile home.

"I didn't want a mobile home, but it was all I could afford," Hopes said. "But I built onto it, and made it our home."

Hopes had built a storage room and two additional bedrooms. By 2014, the roof had started to leak. He replaced the floor, attempted to patch the roof, and sought assistance to accentuate the $1,000 a month he received from Social Security to help pay for repairs.

He sought out governmental loans to help low-income families, he said, but was turned down -- told the government wouldn't put more money into a home than it was worth.

"I went and put anything I could on top, because I didn't have the means to go buy material to do the top," he said.

That was when he learned that Chicot County had a government program that could build him a new house. So, he filled out the application, submitted it to County Judge Mack Ball and got approved for a $90,000 loan repayable over 20 years.

He would be subject to paying half at a low interest rate -- the other half was forgivable under the HOME Program provided through HUD. The Arkansas Development Finance Authority (ADFA) would finance the mortgage.

"I'm worse off. I worsened my condition trying to better it," Hopes said.

As it turned out, HUD restrictions only allow a mobile home to be replaced with a mobile home. It wasn't what Hopes wanted or had in mind, but he got on board. He said he thought this program would be the key to getting a new place that his wheelchair-bound wife could move around in.

According to Hopes, he often has his daughters Lillie and Barbara work with him on his behalf in official matters, now that his eyesight and hearing are failing, in addition to other challenges.

"Cause I didn't get no education. I can't do much reading," Hopes said. "What reading I could do, I can't now because my eyesight's so bad. When you can't hear good, you can't understand good. So, I need the help."

Rushing, Pushing, Rushing. They Had to Go

On the day the county set to sign the paperwork for the loan, the Hopes described it as a rush, with five families participating in the program all in the same room and no time to actually read the stack of papers. Others in the room, not associated with the Hopes, confirmed that when the Hopes began to "waffle" on signing they were told by an ADFA employee that they needed to sign that day or the money would need to go to someone else.

According to the Hopes, concerning details included drawings of a mobile home floor layout. A closing document they didn't want to sign with a mobile home vendor they didn't select. They said eventually some of the paperwork was pulled and set to the side, to move the process along.

ADFA declined our requests for interviews, but in a phone call, the vice president of Legal and Tax for ADFA, Ben Van Kleef, noted that it would be inappropriate for an employee to pressure a participant to sign the paperwork. At the time the Hopes entered the project, and through the majority of this process, emails from Van Kleef show in his signature line that he was the Vice President of Housing.

A written statement from ADFA said, "We sympathize with the Hopes' situation and look forward to a resolution as soon as possible. The HOME Program has experienced  significant  staff  turnover  from  the time Chicot County applied  for funding which  may explain, but not excuse some of   the incomplete documentation.  We are diligently working to fix this  situation."

We've attached the full statement to this article, here.

Mr. Hopes said he believed he had only agreed to sign for the loan to fund a mobile home purchase. Confusion later on would lead to the conclusion that he had actually agreed to buy a specific home during that group closing, despite his reluctance to sign sale documentation with the vendor.

"My daughter was trying to read the thing. They kept rushing, pushing, rushing, rushing. They said they had to go," Mr. Hopes said.

The loan packet is, ADFA admits, missing information. There's a non-itemized bid sheet that was accepted. A later itemized version that wasn't in the packet given to us by ADFA, but that the Hopes were apparently provided later in 2015, included delivery and set up charges that were supposed to have been included in the purchase price of the mobile home.

Still, Mr. Hopes believed after signing the loan paperwork that he could choose his own home, from a dealer of his choosing, since he would be paying on the loan until 2035 -- or when he was around 104 years old.

"I know a rotten deal when I hear it. The way they were going at this here...they didn't explain anything to me," he said.

He claims things only got worse, because he was told he had a choice between just two homes from one particular dealer. The paperwork in his project packet at ADFA doesn't show how that mobile home vendor was selected. And ADFA's written responses to questions submitted by Fox16 Investigates reveals HOME program participants are expected to have a choice in where they purchase their home and from whom.

"ADFA does not specify the vendors. We encourage the homeowner to choose the manufactured   home  of  their  liking  as  long  as  it  complies  with  HUD  regulations," the written response states.

Left feeling as though he didn't have options, Hopes said, he chose one of the options, assured it would be ADA accessible and come as described. According to the Hopes, they were told the home was being built at an out-of-state facility and would have to be delivered to the Jonesboro dealer. They claim they never received a full brochure, were only able to view a few pictures online.

According to the project contractor, he had actually selected to use Clayton Homes, noting that he had worked with them before on HOME projects. The mobile homes in these programs have to meet specific requirements that are set out by HUD, the contractor told Fox16 Investigates, and there are very few dealers who participate. The two homes the Hopes had to choose from were the only ones that were available within the price he had bid to the county for the project.

Two Closings, Zero Homes

In July 2015, Hopes' home was approved for demolition to make room for the new structure, which the family didn't get to see until September. When his daughters went to inspect it, they said the showers were not handicap accessible as promised, fixtures and light switches were wrong, toilets were shorter than promised and the overall quality wasn't up to par. Hopes also refused to sign closing documents from the vendor, which contained power of attorney documents that he was wary of.

According to the Arkansas Manufactured Housing Association, power of attorney documentation to secure a title is not uncommon in these transactions. However, the Hopes were concerned over language and phrases that seemed vague or open-ended in the paperwork. He chose to refuse the home, and requested that he be able to purchase a home from a different location. The Hopes said they had promising leads that puttered out after the dealers they spoke with inquired about providing the home through the official project channels.

"Confusion and Free-For-All"

Even operation of the program, in regard to who was in charge, seems to be different in operation than in the paperwork. According to the paperwork the Hopes signed, it agrees that the Homeowner and Contractor have a contract with one another. The county's involvement is to arrange and authorize that work is completed and is sufficient to warrant payment. But according to the contractor, he most often deals with agents inside the agency applying for the loans, in this case Chicot County, and rarely interacts with the homeowners.

The homeowners are supposed to interact with the consultant and the county, the contractor said.

When we contacted the contractor and the county judge, listed as the administrator of the program, both said that it was unclear why the Hopes were dissatisfied with the home. According to Judge Mack Ball, he began the HOME program to get residents of Chicot County "out of substandard housing." He added that he believed the program was a good thing, but that obstruction from one of  Hopes' daughters caused the issues with the program. More than one person involved in the project expressed that sentiment.

Hopes denied that allegation when we raised it to him adding that while his daughter may communicate for him because of his difficulty hearing and speaking -- he's the one making decisions.

"They done took all of my rights, they tore down my home," he said.

It's been well over a year since Hopes' home was demolished. The cement on the ground - the only sign construction was even contemplated. At this point the ownership and the deed to his property is under dispute.

One person with internal knowledge of the case, who asked not to be identified, confirmed that the program was mismanaged and operated in “free-for-all” status, without direction and accountability.

Spending Your Funeral Savings to Get Back to Living

Hopes spent his funeral savings to hire an attorney to challenge the deal and work out a solution. The first letter sent by the attorney was in December 2015. Six months later, emails and letters indicate that an investigation by Van Kleef found the Hopes hadn't signed the sale documents, and the demo of their home was premature. ADFA indicated it would release the mortgage loan and deed.

"To tell you the truth -- they bout done killed me. They robbed me out," Hopes said.

In emails, Hopes' attorneys became clearly frustrated as weeks without responses from ADFA staff began to seem ridiculous. ADFA employees, including Van Kleef said they had misjudged what HUD would allow them to do, and ADFA ultimately changed its offer from a clean and clear release, according to emails and letters from the Hopes' attorneys.

Hopes' attorneys, according to the correspondence, advised them to seek some sort of settlement agreement. The attorneys pointed out that the Hopes never desired a mobile home in the first place, and hadn't authorized the destruction of their home as evidence by the paperwork available.

Throughout the next year, ADFA changed positions, from releasing the Hopes to converting their case under the HOME program to a different case type so that they could then move forward with building a house as they originally desired. That decision - not voted on by the board of ADFA until December of 2016, despite updates throughout the year that it would be a matter of days or a few weeks to finalize the details.

"We were and still are understaffed for this program and as a result the response was delayed," said ADFA's written response. In phone conversations, the vice president of housing admitted ADFA's staff "dropped the ball."

The Hopes said they were told that they would have to secure another loan, build a house within a year or owe contractors about $15,000 for work on the property, which the Hopes said included burying debris from the demolished house underneath their garden.

Hopes would just need to sign on the dotted line.

"I'm scared to sign because they aren't standing up to their word. Without your word - you're nobody," he said.

Owe...Or Do Not Owe? That is the Question.

Written responses to the questions to ADFA raise confusion on that point, to which Fox16 Investigates has requested clarification. According to those responses, "The $13,000 represents the cost associated with preparing the lot for placement  of a  new manufactured home. If the Hopes choose not to use ADFA's  HOME Program,  they will not owe that  money."

When we asked for follow up, because the Hopes were under the impression they would be required to pay the money back, Van Kleef wrote:

If the Hopes opted to discontinue in the HOME program and receive separate funding, "ADFA would release the note and mortgage, but we would ask that we be allowed to have deed restrictions be placed on the land for 5 years. The deed restrictions allow us to use federal funds to pay the $13,000. The deed restrictions merely state that the owners of the land for the next five years will be low-income individual(s) as defined by HUD. If that is not agreed to, ADFA will be liable and will pay the $13,000. We would then seek to recover those costs from Chicot County. If the Hopes choose to get their own home loan, ADFA does not intend to have any encumbrance on the Hopes property that will offer itself to exposure of foreclosure. Deed restrictions do not allow for foreclosure since there is no debt involved."

If the Hopes were to continue in the HOME program, the $13,000 would still be forgivable, Van Kleef wrote, adding, "The Hopes are not liable for the $13,000 in either of the situations you pose. Homebuyer activities in ADFA's HOME Program, for amounts less than $25,000, are in the form of a forgivable promissory note."

Somewhere along the way, miscommunication has occurred, with letters sent to the Hopes from their attorneys indicating that an "encumbrance, collection or foreclosure" could occur if they failed to meet the one-year timeline set out in the settlement.

When a House Isn’t Home

All the while, Lucell and Josephine Hopes have been cramped inside a small rental without heat, cooking dinner on a hot plate.

"I think about that, man," Hopes said. "They can lay up in a good bed. Warm house. My handicapped wife lays here and just wants to go home."

Some employees at ADFA involved with the program are no longer with the agency, according to Van Kleef, "The employees responsible for this project from its initial approval have been terminated from ADFA."

The HOME program has been suspended for a so-called re-vamping. A special report by the Division of Legislative Audit for the State investigated ADFA's operation of the program in addition to one other agency that served as a finance provider for North Little Rock. The report's findings, which you can read here, note:

Homeowner misunderstanding of program rules and regulations, leading to mistrust of HOME personnel

Unattainable homeowner expectations due to differences among project outcomes and between PJs [ADFA & North Little Rock].

Lack of a coordinated effort between HUD, the central administrative body, and the PJs to investigate and resolve homeowner concerns.

ADFA did not provide a written response to the reports finding, but noted in its written responses to our questions that members of ADFA had testified in front of the audit committee in June 2016. Fox16 Investigates has requested the recordings from those meetings.

In addition, ADFA's written responses, in regard to questions about complaints, said, "HOME Program funds have been used to fund thousands of affordable  housing  activities since its inception in 1990. We do receive complaints  but  don't have  an  exact figure to site."

"I feel bad. God know I do," Hopes said. "I wish to God I had never went in [the program]."

All of that does little to help the Hopes. While home may be where the heart is, that doesn't make it any easier for them to sleep at night.

To follow this story and all of Marci's coverage, click here for Facebook or here for Twitter.

DO YOU NEED FOX16 INVESTIGATES?

Fox16 Investigates is committed to uncovering truth and problems people face across Arkansas. If you have a story that needs to be investigated, call Investigative Reporter Marci Manley on the Investigations Tipline at (501) 340-4448 or email at investigations@fox16.com


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