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A funding oops at Grand Forks City Hall

The Grand Forks City Council voted to grant Habitat for Humanity $40,000 in state funds to build a new home last year, but it turns out the project isn’t eligible and the group’s loans are due.

That’s the scenario city staff will lay out for the council’s Finance/Development Committee at its meeting at 5:30 tonight at City Hall.

While the city gets to redistribute the state funds, it still needs to prove to the state that the funds will go toward some kind of housing gap, according to a staff report.

Because of the design, it turns out the new home at 617 N. 24th St. is worth more than the cost of building it so there is no “development gap,” the report said. Because Habitat for Humanity offers clients zero-percent interest, the homeowner’s monthly payment is less than 30 percent of his or her gross income so there is no “affordability gap.”

Staff recommends the city give Habitat for Humanity $40,000 from a federal grant that the city controls. The $40,000 from the state would be available for other projects.