Incentives Added to Quake Loan Offer

SAN FERNANDO —  City officials are discovering that sometimes it can be hard to do people a favor. Even giving them money.

Frustrated by the lack of response to an innovative seismic retrofit program introduced last year, members of the local redevelopment agency voted recently to sweeten a deal that already provided forgivable, interest-free loans to residents living in homes most susceptible to earthquake damage: those not bolted to their foundations.

“It’s a shame not to have more people beating down my door,” said Jim Eldridge, an engineering consultant hired by the city to administer the program.

“We have probably 1,000 homes in the city that are in delicate condition and maybe 400 to 600 of them are really vulnerable. Right now we have the money to retrofit about 95 houses and it’s just laying there,” Eldridge said. Only 41 homes have been repaired through the program so far, he added.

Under new guidelines introduced Jan. 6, eligible homeowners will no longer have to put up any collateral whatsoever to receive the loans, which range from $2,000 to $4,000 depending on the work needed. In addition, San Fernando residents over 62 would receive the money as a grant rather than a loan.

Once the city receives an application and determines that a resident is economically eligible for the program, it will send an inspector to see if the home qualifies. After that determination is made, Eldridge said, the city will hire a contractor and oversee the work.

“Some people may think that it’s too good to be true, something for nothing,” said San Fernando City Councilman Raul Godinez, a civil engineer by profession who was one of the driving forces behind the retrofit program.

Godinez expressed disappointment at public response to the program, but was cautiously optimistic that the new guidelines would spur more people to sign up.

“We changed it to a signatory loan instead of something that goes against your property,” said Godinez. “People are gunshy about loans that go against their property. They don’t want to put their house on the line for $2,500.”

Eldridge agreed that many residents were reluctant to sign a lien against their home to pay for the repairs, but suggested that a fear of government red tape was one of the main reasons for the lack of interest in the program.

After all, he pointed out, even under the original terms, the city promised to forgive the balance of the loan at a rate of $500 per year. With most loans in the range of $2,500, most residents could get the money for free simply by living in their homes for the next five years.

Residents would be required to pay back the loan only if they sold their home before the balance dwindled to zero, in which case the money would come from the sale, Eldridge said.

Now however, with no collateral involved, residents simply need to promise to repay the money if they move from their house before the balance disappears over time.

Dozens of older homes were damaged or destroyed in San Fernando in the 1994 Northridge earthquake, prompting Godinez and others to introduce the retrofit program last February. It was intended to help residents living in pre-World War II wooden frame houses that are not bolted to their foundations.

To be eligible for the program, residents must be in a low or middle income bracket and must live in a home that meets structural qualifications.

“Basically, we’re bolting the wood frame to the concrete foundation,” said Eldridge of work being done on the homes, most of which were built before current seismic standards were introduced about 50 years ago.

Leanna Reynolds, who lives on Workman Street, was one of the first to take advantage of the program last year.

“It’s more solid now than it has been in the 50 years I’ve lived here,” Reynolds said of her home. “Why anyone wouldn’t take advantage of this I don’t understand.”

San Fernando City Administrator Mary Strenn said officials initially set aside $300,000 from two funding sources for the retrofit program. Half was to come from money generated by the city’s redevelopment tax increments. The rest was from an annual federal Community Development Block Grant.

Because of the low response, however, Strenn said the city has not used up the original $150,000 and has not dipped into the federal money at all.