1602 projects to undergo site compliance monitoring by off-island company

Betham: 98 of 132 projects completed to date

The section 1602 projects administered by the Development Bank of American Samoa (DBAS) which the center of a lot of talk in the community will now be undergoing compliance monitoring site visits by Spectrum Consultants, an off island company based in Maine and contracted by DBAS, says DBAS Acting President Jason Betham.

The DBAS acting president was responding to queries by Samoa News in connection with a notice issued by DBAS regarding the 1602 projectsstating that Spectrum Consultants will be conducting compliance monitoring site visits in December 2012.

Betham told Samoa News that Spectrum is a consulting service for state housing agencies in the territory, as well as California, Connecticut, Hawaii, Maryland, Massachusetts, the U.S. Virgin Islands, West Virginia and Wyoming.

While the company is based in Maine, DBAS was introduced to Spectrum in Hawai’i during a training seminar regarding the Low Income House Tax Credit program.

He added that Spectrum has over 25 years of experience and specializes in compliance monitoring, file review, tenant application review and physical inspections for federally funded housing programs.

“Spectrum has assisted DBAS in developing the Section 1602 program and has visited American Samoa and conducted training for project owners at the Lee Auditorium in April 2011. “Spectrum has reviewed tenant applications and has helped certify tenants for completed section 1602 projects.”

Betham said that DBAS has retained Spectrum into 2013 to help train DBAS staff in compliance monitoring going forward.

“Spectrum senior personnel will be in American Samoa in December 2012 to conduct physical inspections of section 1602 projects” said Betham.

According to the notice, which was approved by Betham, all 1602 projects must be completed by December 31, 2012 and any violations are to be reported to DBAS at 633-4031 or email infor@dbas.org.

He explained in an email to Samoa News that the 1602 program does not end on December 31, 2012, rather it is the deadline to complete construction of the section 1602 projects.

Betham further explained that for projects completed in 2011, by Dec. 31, 2012, owners must show proof that they have rented at least 40% of their units. For projects completed in 2012, 40% of all units must be rented to qualified tenants by December 31, 2013.

The acting DBAS president said that as of July 31, 2012, 98 of the 132 projects have been completed, with many of the remaining projects near completion.

He added that DBAS will continue to conduct periodic progress inspections for the unfinished projects.

“The rules in the notice have been covered in previous workshops conducted by DBAS for the project owners since 2010,” says Betham.

Samoa News inquired if there are any complaints about unqualified tenants occupying section 1602 units. He replied there have been no written complaints regarding this.

Betham added that although DBAS through Spectrum has offered to certify tenants prior to their move-in, this is not a program requirement.

“Projects owners are allowed to self-certify tenants."

“However, when DBAS conducts its compliance monitoring, if violations such as these are discovered and then confirmed, DBAS will then enforce its Grant Agreement and Declaration of Restrictive Covenants and Mortgage that was signed with each project owner to bring any non-complying project into compliance”.

“If the violations are not cured, DBAS will pursue the legal remedies included in the Grant Agreement and Declaration of Restrictive Covenants and Mortgage, which include suit or foreclosure etc, so that appropriate amount of grant funds are returned to the US treasury.”

According to the notice issued, for projects with five or more units, the landlord may rent units to anyone who qualifies as low-income under the published low income scale.

“Maximum rental units must be complied and there is no minimum rent required.” The notice further states the Landlord must pay all water and electricity utilities, not included are phone line and cable.

For projects with fewer than five units, the landlord may not rent to their spouse, parents, children, grandchildren, brothers, sisters or grandparents, however the landlord can rent it out to anyone else who qualifies under the published low income scale.


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