A Chapel Hill housing project for the homeless was denied federal funding last month and now might be forced to close its doors.
The Inter-Faith Council plans to ask federal lawmakers to reallocate money for Project Homestart, a program some say was shortchanged.
The loss of funds will cut 75 percent of Project Homestart's budget and force it to shut down on March 31, leaving 15 families and their 31 children homeless.
"It's strange to us," said IFC Executive Director Chris Moran. "It's very disconcerting."
Project Homestart was denied renewal of a grant from the U.S. Department of Housing and Urban Development -- a grant it has received since 1998.
Project Homestart provides transitional housing for homeless families and tries to place them in permanent housing within two years. The program also teaches families skills they need in order to avoid becoming homeless again.
Moran said that this year, a group of social service activists, the Orange County Continuum of Care, was advised to give more priority to programs providing permanent housing instead of Project Homestart.
The COC ranked Club Nova, a housing project for the mentally ill in Carrboro that will purchase affordable housing in the area, higher than Project Homestart. Therefore, when federal funds were distributed, there was not enough money for Project Homestart.
Club Nova received $103,296 to construct new apartments and $525,000 for the purchase of affordable housing for low-income residents. Orange County also received $103,000 for a project aiding the homeless that is not in competition with Project Homestart for funds.
Project Homestart requested $366,156 in grant renewal from the government and would contribute $95,547 of its own money to fund its yearly operating budget.
Moran said he wants HUD to reallocate full funding to Project Homestart and offer an additional $262,140 for purchasing affordable housing. "We want them to reallocate so that there is a transitional program for the homeless and some permanent housing money," he said. "We want to do it all."
But HUD officials say that once funds are distributed for a specific purpose, they are not reverted to a different source.
HUD Field Office Director Debrah Holsten said that she is sorry Project Homestart was not funded but that the organization will not know why it did not receive funding until a report is filed later this month.
Moran has petitioned local officials to advocate on behalf of Project Homestart by communicating with the Orange County Board of Commissioners and by writing letters to Sen. Elizabeth Dole, R-N.C.; Sen. John Edwards, D-N.C.; and Rep. David Price, D-N.C.
"We want all of our local representatives to do resolutions asking for the assistance," he said. "We can't operate that program as it is without HUD's funding."
Margaret Brown, chairwoman of the Board of Commissioners, said members will do their part to support the reallocation of funds to Project Homestart. "We'll certainly have a resolution," she said. "We're very involved and very aware of what's going on."
Moran said if funds cannot be reallocated, the next step is to look for other sources of federal funding and then, if possible, money from the state budget.
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