The troubled Northwest Oregon Housing Authority is under such scrutiny that federal funds for a new renovation project have extraordinary strings attached.

A third-party “asset manager” will monitor NOHA’s use of $2.5 million in federal money to be used to improve apartments in Seaside because the state sees supporting the housing authority financially as an increased liability.

It is the only organization being required to jump through the extra hoop by Oregon Housing and Community Services, said Bob Gillespie, Housing Division administrator for OHCS.

“They’ve been going through enough lately that we needed that added security. We’re taking a greater risk,” Gillespie said. An extra $10,000 has been included to pay for the services of the manager, he added.

NOHA’s Sandhill Apartments in Seaside was one of two stalled Clatsop County affordable housing projects to get a funding boost from stimulus money.

The funds will fill the gap on NOHA’s Sandhill renovation project, and will spruce up and weatherize the NOHA-owned 32-unit complex built in 1979 on South Wahanna Road. Maintenance for the property has been sorely needed since it was purchased in 2007, said NOHA spokeswoman Teresa Sims. Sandhill was purchased with a loan from the Enterprise Community Foundation with a 25 percent guarantee by OHCS.

The gap financing will also provide some of the needed money to move the Gateway II project, in Astoria, forward.

The governing board that oversees OHCS recently took action on 17 similar housing projects throughout the state, providing a total of 725 multifamily units and reserving $28.6 million in federal recovery act dollars.

NOHA’s management has been under scrutiny since June, when hundreds of families in Clatsop, Columbia and Tillamook counties lived on the brink of homelessness for months because of the agency’s overspending. While the households are no longer at risk thanks to a $795,000 bailout from the U.S. Department of Housing and Urban Development, repercussions of the mismanagement are still being felt.

Soon after, HUD officials came to audit critical parts of NOHA’s federally-funded Section 8 rental assistance program, and the Portland Housing Authority also made a visit to scour NOHA’s books.

Then, last month OHCS canceled its contract with NOHA for a state rent-assistance program called HOME Tenant Based Assistance.

Gillespie explained that while OHCS doesn’t have any ownership in Sandhill, if the project was to underperform, OHCS would end up having to pay back the U.S. Treasury for the $2.5 million.

Sims was “looking into” the Sandhill Project after The Daily Astorian inquired about the project’s asset manager Wednesday and did not have any further comments in time for today’s pubication. She is hopeful that the work could begin in the spring now that financing has been secured.

Sims did say that the housing authority and the board of commissioners have been working hard to make changes to the systems and tools NOHA uses to give out rent-help money.

“The NOHA staff is working diligently to implement new processes, tracking systems, and quality assurance measures to improve the overall functioning of the Section 8 Voucher program,” she said.

The Astoria project, called Gateway II, is being put together by Shelter Resources of Bellevue, Wash., the same developer that made the existing Gateway Senior Residence housing project a reality in 2005.

Ryan Brennan, associate developer with Shelter Resources, said funding is still needed to bring the $7.2 million Mill Pond Village project to life.

“With this, we’re about 45 percent there,” he said. He’s hoping construction on the 33-unit workforce housing project could begin as soon as Spring 2010. Workforce housing is intended for working families earning 60 percent and below the average median income.

This gap financing consists of two federal programs, both of which bolster affordable housing by supporting the low-income housing tax credit industry. They are the federal Tax Credit Assistance Program and the Tax Credit Exchange Program administered by the Oregon Department.

“Creatively utilizing these types of programs is vital during lean times such as these,” OHCS Director Victor Merced said. “Loss of capital has threatened many affordable housing developments, but the TCAP and Exchange programs will allow them to move forward. We are grateful for the Recovery Act and excited that it allows us to continue to help Oregonians.”