"We were just doing our jobs," says HUD Richmond Multi-Family Asset Manager Bettie Mills of HUD Richmond's efforts she, her supervisor Carol Schrader and their boss Charlie Famuliner as well as the Atlanta Multifamily Center Property Disposition Director Bill Melvin and HUD Counsel Jennifer Harry, undertook to preserve a 240-unit cooperative housing complex as a source of affordable housing in Portsmouth, Virginia.

The HUD Employees (From left to right) are: Bettie Mills, Carol Schrader, Charles Famuliner, WIlliam Melvin, and Jennifer Harry

On July 24th the U.S. Department of Justice Investigative Agents' Public Service Award will be conferred on Mills, Schrader, Famuliner, Melvin and Harry for what is described as efforts "well above and well beyond their designated job responsibilities."

Built in the 1970's, Charlestowne I and II at Cavalier, for a time, was a model of how HUD's Section 236 program could be used to produce affordable, state-of-the-art cooperative housing. Over time, however, the cooperative owners could not, keep pace, either with the demands of an ever-changing and rising market or the increasing challenges of maintaining deteriorating buildings.

By November 2004, in fact, the property faced an estimated $7.3 million in urgent repair needs, delinquent, HUD-insured mortgages over $4 million, and unpaid excess income over $1.2 million. HUD commenced foreclosure proceedings. "It was," explained Famuliner, "almost a for-sure foreclosure."

And all parties faced huge risks. The owners were at risk of losing their homes. HUD was at risk of losing millions of dollars. And the City of Portsmouth was at risk of losing this vital part of their affordable housing stock.

Fortunately, HUD's team with the assistance of the U.S. Attorney's Office and, ultimately, the cooperative averted those risks. The property's cooperative owners filed for bankruptcy. But, at the request of the U.S. Attorney, the U. S. Bankruptcy Court entered its Order granting relief from stay, permitting HUD to resume a scheduled foreclose of its mortgages, but on the conditions that foreclosure sale would not occur until a certain time and that HUD would permit Charlestowne at Cavalier to sell the projects under terms that would maintain the affordability of the projects.

Charlestowne's cooperative members stepped forward to do precisely that, finding a buyer who would, consistent with HUD's Use Agreement, only use the project's units as rental properties, except for those as condominiums to current owners or to first-time homebuyers with incomes not exceeding 80 percent of the area median income.

"The hard work and above-and-beyond efforts of Mills and Schrader at HUD Richmond and Melvin and Harvey at HUD Atlanta resulted in a win-win-win," said Famuliner. "For HUD because the Insurance Fund was made whole. For residents who will see $7.3 million in repairs made. And for Portsmouth in preserving 240 units of affordable housing."