Nine Cities to Receive State Funds to Aid Residents With Quake-Damaged Homes

Nine San Gabriel Valley cities will receive more than $1.5 million in state funds to assist residents whose homes were damaged in the Oct. 1 earthquake.

“Ours is the funding of last resort,” said Julie Stewart, spokeswoman for the state Department of Housing and Community Development. “It is for homeowners who were ineligible for federal funds or who did not receive enough federal money to repair the damage.”

The program will be administered by the individual cities--Alhambra, Monrovia, Monterey Park, Pasadena, Rosemead, San Gabriel, San Marino, South El Monte and South Pasadena--which provided the state with damage estimates.

To qualify for the program, most homeowners must have already applied to the federal government for assistance and either been turned down or been given too little money to cover the damage. The homeowners also must have exhausted all other types of possible financial assistance, such as private insurance, Stewart said. Such homeowners may receive up to $20,000 at 3% interest. The loan does not have to be repaid until the property is sold.

If less than $10,000 is needed for repairs, cities have greater discretion in disbursing the money, according to Blair Babcock, assistant administrator of Housing and Community Development in Monterey Park.

In such cases, for example, homeowners are not required to have applied for federal assistance.

Under a federal program administered by the Small Business Administration, homeowners can apply for loans of up to $100,000 at 4% interest, with up to 30 years to repay them, said Carl Suchocki of the Federal Emergency Management Agency. Applications may be obtained at 9300 Flair Drive, El Monte.

But some people are denied the federal loans because they cannot repay them. In other instances, a federal loan would not cover all the damage.

“So little is being paid out by the federal government, and it is so slow to come,” said John Bernardi, city manager of South Pasadena, which has received $210,000 under the state program.

Bernardi said the program is so new that only six homeowners have applied. He noted that three homes in South Pasadena were damaged beyond repair.

In Monterey Park, which received $262,500 from the state, 100 homeowners have applied for the loans, Babcock said.

“The city puts the money in escrow and pays the contractor directly,” he said. “We are now inspecting damaged property, and we can tell if it is earthquake-related.”

Thirty-six housing units in Monterey Park have been declared uninhabitable because of quake damage, including 20 condominium units. Babcock said that if the initial allocation is insufficient, the city can apply to the state for more money.

In Monrovia, which received $78,750, no houses were damaged beyond repair, said Steve Cervantes of the Department of Community Development.

But Cervantes said 10 to 20 elderly residents whose homes were damaged probably won’t qualify for federal loans because they are on fixed incomes and cannot repay them. These people should be eligible for the state funding, he said.

Cervantes agreed with Bernardi that some of the federal loans will not cover the cost of repairs.

John Nowak, city manager of San Marino, which received $157,500, said the city has just begun receiving inquiries about the state program.

Other San Gabriel Valley cities that applied for funds and the amounts they received are Alhambra, $262,500; Pasadena, $210,000; Rosemead, $210,000; San Gabriel, $78,750, and South El Monte, $105,000.