Newport commissioners authorize CDBG application for five single‑family homes; mayor recuses

The City of Newport Board of Commissioners on Tuesday authorized Mayor Thomas L. Cadulli Jr. to submit an application to the Kentucky Department for Local Government seeking Community Development Block Grant (CDBG) housing funds to build five single‑family homes within the city.

The item, introduced as an order to the board, passed on a roll call with all voting commissioners recorded as “yes” except Mayor Cadulli, who recused himself because of a disclosed relationship between the city and Newport Housing Authority projects handled by his family. The board’s authorization allows the city to apply for housing‑pool CDBG funds administered by the state and allocated by the U.S. Department of Housing and Urban Development (HUD).

The application seeks funding to build five new detached single‑family houses on vacant lots. City and project representatives said the houses are planned as three‑bedroom, two‑bath, two‑story units with brick front façades and off‑street parking where feasible. The projected sales price discussed at the meeting was $190,000 per unit; project staff said $20,000 of that would be structured as a “soft second” mortgage to the buyer that is forgiven over time if the buyer remains in the house and complies with program rules.

City staff and Dennis Elrod, who provided a program overview, described the CDBG housing pool as one of several funding “pools” (alongside public facilities, community facilities and economic development) and noted that selecting housing funds for this project precludes the city from applying for public‑facilities or community‑facilities CDBG funds until the housing project closes. Staff estimated the project could remain open about 18 months to two years from award to completion and said the city is eligible to apply now because it recently closed its last housing project.

Ron Rowe, identified at the meeting as treasurer of Newport Millennium Housing Corp. 3 (the developer partner), said the organization has delivered similar projects and provided multiple letters of local support. He and Elrod told commissioners that construction costs have risen substantially in recent years and that CDBG subsidies and the soft‑second mortgage are necessary to make the homes financially feasible for buyers and developers.

Project eligibility requirements discussed at the meeting include buyer income at or below 80% of area median income (adjusted by household size), completion of a homebuyer education course, ability to obtain a conventional 30‑year mortgage, and not currently owning a home at the time of application. Staff said advertising and applications for specific units would be posted about 90 to 120 days before homes are ready to sell, and that applications will generally be processed on a first‑come, first‑serve basis for units that are available.

The board’s authorization initiates the application process; staff said the CDBG application deadline for the current funding round is January 31 and that if the state awards funds, the city will return with required evidentiary documents before any grant contract is executed.

Commissioners expressed support for using CDBG housing funds as a tool to stabilize blocks and increase homeownership, and several commissioners praised prior projects delivered by Newport Millennium Housing Corp. 3. Mayor Cadulli’s recusal was noted on the record before the vote.

Votes at a glance: roll call showed commissioners Redmansky, Sutherland, Vice Mayor Smith Morrow and Recton voting yes; Mayor Cadulli recused.