The Lansing Housing Commission's plan to sell about 200 public housing units to Florida-based buyer SK Investments for more than $14 million took a step forward this past week with a federal housing agency signing off on the transfer.

LHC Executive Director Doug Fleming confirmed Wednesday via email that the U.S. Department of Housing and Urban Development approved the commission's sale on Oct. 28. The sale includes the approval of 191 Section 18 project-based vouchers for all included units,which will allow residents to use Section 8 subsidies once the homes are converted to privately held units.

"This approval requires a 90-day notice to the residents," Fleming wrote in an email. "We sent the notices (Nov. 1) and are calling all the residents as well to ensure that they understand that this is nothing new from our previous communications."

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The HUD-mandated notifications don't include any information residents haven't already been informed about, Fleming said.

"The timeline is that we can now begin the closing process with SK investments and will close the deal sometime after the 90 days," Fleming wrote.

The commission sought proposals from Oct. 20 to Dec. 17, 2021, and two companies submitted bids: SK Investments Group and Alliance Property Group. Commissioners selected SK Investments Group's $17.7 million bid for 235 units, which was reduced to a $14 million bid for 191 units.

The sale was reduced in scope because 45 renters were assessing whether to purchase their rentals. Although the initial deadline was July 1, LHC teams continue to work beyond that deadline with residents who are interested in and qualify for purchasing their homes, officials said.

"The LHC team intends to work with residents into the fall to determine their purchasing qualifications and final decision. A second Section 18 application will be submitted in support of resident purchases," the LHC said.

According to 600-plus pages of public records HUD furnished to the State Journal following a June 17 request, LHC,after expenses, is expected to receive $12,315,000 from the sale.

A third party will conduct housing quality inspections on all units, and HUD will either approve or deny inspection reports, in order for the commission to make voucher subsidy payments.

"This ensures that the housing meets HUD standards for subsidy payments," Fleming wrote.

Rent subsidies vary, but HUD says they are generally, at maximum, the gross rent of the unit minus 30% of the renter's monthly net income.

No one will be required to move out of their homes, according to the commission's sale document. Fleming said Thursday only regular maintenance on the units will be done.

"We're not doing any renovations except on empty units," he said.

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Why is Lansing Housing Commission selling the homes?

The commission has considered the sale for nearly two years, asserting it can't properly maintain the homes. The sale would convert the houses to private ownership offering Section 8 subsidies, which allows private landlordsto rent properties at fair-market rates to low-income tenants through a subsidy program.

The commission has converted 140 units from public housing to private housing, as of June 6.

HUD has encouraged public housing agencies to convert their properties to Section 8-eligible homes since 2011 because funding no longer would be dependent on the federal agency's annual budget.

HUD requires all revenue from the sale to be put toward affordable public housing. Details haven't yet been shared on exactly how the commission will use the funds.

LHC Special Projects Director Sam Spadafore, who submitted the sale documents, wrote some of the funds could be used to renovate existing public housing complexes, build more affordable housing and finance more wrap-around services. Fleming said last week those suggestions aren't final, but serve as an example of what the commission hopes to accomplish.

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Contact reporter Krystal Nurse at (517) 267-1344 or knurse@lsj.com. Follow her on Twitter @KrystalRNurse.

This article originally appeared on Lansing State Journal: Lansing Housing Commission's public housing sale approved by HUD