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BOS Closes Loophole on Housing Rehab Program

Stafford has a Housing Rehabilitation program funded by a Community Development Block Grant that allows residents to apply for interest-free loans to make needed improvements — like new rooves or chimney repairs, as opposed to kitchen makeover — that they must pay back upon property transfer. In other words, you don’t have to pay the money back until you sell it — although some residents choose to pay it off early to get the associated lien off the property. For some recipients, however, a loophole has allowed them to pass the properties on to family members without paying back the money. The Board of Selectmen is looking to close that loophole.


According to Beth DaDalt, executive assistant to the First Selectman, Mary Bromm, the grant administrator for the program, has suggested Stafford change the language to include “quitclaim deeds” which are used to quickly transfer ownership of a property — sometimes after a marriage or divorce, but also from one family member to another. Unlike other property transfers, a title search isn’t required, so liens on the property don’t appear. Essentially, some people in town have used this as a way to circumvent paying back the money they owe the town while still being able to pass the property on. One property on Village Hill was mentioned several times during the discussion.


DaDalt said the town has somewhere in the neighborhood of $2 million in loans out, but not all of those need to be paid back at the moment. However, when property owners don’t pay back these rehab loans, it prevents the Housing Rehabilitation program from being able to give loans to others in need. Bromm based her suggested changes to the language on a similar change Killingly made after having the same problem. It is, however, unclear whether changing the language would allow the town to retroactively seek repayment from property owners who have already taken advantage of the loophole or simply allow them to enforce the change going forward.


The board voted unanimously to change the language, pending the approval of the town’s lawyer.


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