In February of 1999, CDCW, a Milwaukee non-profit corporation that owned and managed more than 700 units of low income housing, announced its intention to file for bankruptcy at the end of the month. CDCW’s portfolio of properties included three FHA-insured apartment buildings that housed 206 families. The challenge facing the Wisconsin HUD office was to prevent the potential foreclosure of these FHA properties, with mortgages totaling $3,040,000.

"Our first reaction was that we needed a lot of information, and we needed it fast," said Community Builder Fellow David Balcer. "I had known the Director of CDCW for a number of years, so he was willing to come in to see us and explain the situation." Dave, along with Senior Community Builder Del Reynolds and staff from the Office of Community Planning and Development (CPD) and Office of Housing, met with CDCW’s Executive Director a few days later.

Armed with the information provided at this meeting and gathered from other sources, Dave used his mortgage lending experience to prepare an analysis of CDCW’s real estate holdings and financial arrangements. Meanwhile, HUD Housing staff intensified monitoring of the FHA properties to ensure that project funds were not used improperly and CPD staff assured compliance with CDBG and HOME regulations.

Working closely with the Wisconsin HUD Chief Counsel and the Housing and CPD Directors, Dave developed an overall strategy to protect HUD’s interests. "One of our concerns was that the residents not be harmed by CDCW’s problems. The best way to protect the residents was to work with CDCW on transferring their properties to responsible owners," said Dave.

Two non-profit organizations were identified to take over the FHA/HUD properties. The properties were successfully transferred within an eight day period.

Reflecting on the transaction, Chief Counsel Jerry Beitz said, "What was really helpful was that David managed a solution which protected our interests with such ease and speed. His rapport with the parties was invaluable, something we would not have possessed without him." Joe Bates, Multifamily Program Center Director, added "It was nice to see HUD resolve a potential problem like this with such finesse."

Del Reynolds summed it all up as follows: "This is an excellent example of collaboration among Community Builder Fellows and Public Trust Officers. Their teamwork prevented the costs of having HUD projects go in to bankruptcy court and avoided claims on the FHA mortgages. Dave’s experience as a former banker and non-profit manager made it possible for us to move quickly to protect the interests of the residents, the community, and the insurance fund."