Should county help with mortgages?

• Commissioners debate whether interest-free loans should be offered to property owners

BROOKINGS – Brookings County commissioners debated Tuesday whether it is the county’s place to give one-time, interest-free loans to people who can’t afford their mortgage payments.

Tuesday, while approving loans given through the county’s Welfare Department, commissioners noticed two recommendations for mortgage payments of $323 and $731. They were among recommended loans for rent, hospital bills and utility bills.

Making these payments is a normal function of the Brookings County Welfare Department. According to the county website, the department’s job is to “provide support necessary to ensure the survival of indigent clients who are county residents.”

This is accomplished by helping residents pay for necessities that include rent, utilities, dental work, hospital care and burial. It does not pay phone bills or for other things deemed not to be a necessity.

However, commissioners did not recall ever loaning money to make a mortgage payment. A mortgage is different from rent because it means the person has at least one substantial asset – a house.

“We’ve always done the utilities and we’ve done all of these things, but a mortgage, that’s a little bit of a different ball game,” said commission chair Deanna Santema.

Santema noted that commissioners do not know who is applying for the loans, so their decisions to give or withhold assistance money cannot be prejudiced.

Loans made by the Welfare Department are interest-free and do not include any fees. Recipients must complete an application process. Assistance is regularly denied because people do not complete the application process.

Recipients are asked to repay this money, but the county has no assurance that they will, because the person generally has no assets.

But, as a department employee told commissioners Tuesday, the county would be more likely to get its money back from a mortgage loan because it would put a lien against the house. If the house is sold before the loan is repaid, the county will get its money back from proceeds of the sale. Commissioner Stephne Miller said Tuesday that this is important to consider.

In the past, because loan recipients have not owned substantial property like a house, the county has put a lien against the borrower’s name. If that person wants to purchase property in the future, they will first need to repay the county to have the lien released.

The Welfare Department limits loans to once per year per person. The only exception would be dire circumstances such as having utilities shut off during especially cold winter months. It only pays one month of past-due rent or mortgage, in this case, and it never pays deposits on rent.

Commissioner Dennis Falken asked Tuesday that the two mortgage loans be postponed until the board can get more information and decide whether it wants to give them.

“I think we have to make a decision whether or not we think this is appropriate, to use welfare funds for mortgage payments. And I think it hasn’t been something we’ve done in the past,” Falken said.

The commission agreed to postpone a decision until they can gain more information from Welfare Department Director Michael Holzhauser, who was out of town Tuesday, and discuss the issue further.



Contact Charis Prunty at cprunty@brookingsregister.com.