Housing firm claims that it is bankrupt
Homebuyers demanding answers

By Pamela G. Dempsey
Diné Bureau

WINDOW ROCK — Louis Maldonado thought it was a good deal.

The Maldonados were told they could rent-to-own a new home at the Church Rock Estates by its builder, the Fort Defiance Housing Corporation.

And why not?

The non-profit organization had other developments throughout the Navajo Nation, in places like Chilchinbito and Tsaile Acres and in Kayenta as well.

"They told us we were buying our home," Maldonado said of the three-bedroom, two-bath house he and his wife are raising their three grandchildren in.

"I'd much rather own a house (than rent)," he said. "That way, we have a little something. In your own home, you can do as you please."

Last January, however, the tenants were warned of rent increases to help Fort Defiance Housing Corporation pay back the federal loans it took to build the project.

One of the organization's board members, Everett Ross, told some Church Rock residents during a meeting last January that while the new leases would say "rent," the organization intended to give the tenanents their homes once the mortgage was paid off.

"We can't do it legally," Ross said.

The federal programs used to finance the Church Rock project provided low-rent housing, not ownership.

Maldonado saw his rent increase by $40 a month.

The new leases, he said, contained "all kinds of goofy junk," such as the landlord's right to enter their homes without any tenants being there.

The troubles with Fort Defiance Housing Corporation prompted a few of its residents to ask for help from Navajo Housing Authority, one of the organization's creditors.

Navajo Housing Authority then threatened a lawsuit against the organization to take over its properties.

This and other legal problems spurred Fort Defiance Housing Corporation to file bankruptcy in late March.

In a resolution signed by its board of directors, the organization stated that due to "interference by the Navajo Housing Authority Grants Management Department and Navajo Housing Authority Management" it cannot pay the substantial debt it incurred in the development of two Chilchinbeto development projects.

Chester Carl, chief executive officer of Navajo Housing Authority, said the issues with Fort Defiance Housing Corporation have been progressing for the past three years.

Navajo Housing Authority took foreclosure action in Navajo Nation Court against the organization.

Right now, he said, Navajo Housing Authority is waiting for the court to appoint a trustee who can oversee all of the organization's federal-funded housing projects, including Church Rock.

"In trying to resolve some complaints with Church Rock, (we'd like to work) with the trustee to develop individual mortgages," Carl said.

A hearing is set for Wednesday in a Phoenix federal bankruptcy court to determine if Fort Defiance Housing Corporation can proceed with its bankruptcy.

Attorneys for the organization did not return a call seeking comment on Friday.

Either way, Maldonado is happy that the organization that sold him the house will soon be out of the picture.

"If Fort Defiance Housing Corporation is out, NHA will take it over and we will be able to buy," he said. "If not (buy), then our situation will still be better. (NHA) has better management, not Gestapo management."

— To contact reporter Pam Dempsey call (505) 879-1707 or email pamelagdempsey@msn.com