Three state of North Carolina grant-funded houses on Keysville Road in Washington have not been completed by the deadline.

City of Washington officials applied for a Community Development Block Grant on behalf of Reverend David Moore and Metropolitan Housing to build Low to Moderate Income Housing on Keysville Road.

“The grant was originally funded in 2007 or 2008,” Doug Mercer said, Washington city councilman. “That was time the housing market went to pot. The houses that were required to be built were not built in the original time frame.”

The grant stipulated the Keyslanding Housing project was to be completed by June 30, 2014, but the three houses are not finished. If the project was not finished by the end of the fiscal year, the city is required to repay $75,000 to the state.

Brian Alligood, Washington’s city manager, said state officials told the city that two houses had to be completed by June 30.

“The way it is set up, the city is the grant recipient so the city is on the hook for the money,” Alligood said. “If performance is not done, the city is the one that has to pay back the money.

“We have a legally binding commitment that was signed with Metropolitan that essentially says any nonperformance of the grant, any money that has to be paid back by the city, that Metropolitan will make that whole,” Alligood said.

During a March Washington City Council meeting, Moore told council that underground electrical and sewer were not in the original estimate of the houses, and that caused delays in construction.

According to Alligood, the city had originally budgeted the $75,000 to repay the state in case Metropolitan Housing did not finish the houses.

“Rev. Moore came to us and said, ‘Don’t worry about it, we’re going to make that deadline,’ and obviously they weren’t able to make that deadline,” Alligood said.

Alligood said the city and the state are working together because the three houses are close to completion.

“Their initial reply to us was, ‘You have to repay it,’ but we’re making an appeal to them that we’re within two weeks from people being in these homes,” Alligood said.

City officials are hoping Metropolitan Housing will have two of the homes completed and occupied by July 31.