Housing aid revives a community time forgot : Urban growth has erased many an old farm town, but they couldn’t take the country out of this one.

Big changes are taking place in Guadalupe. Crumbling adobes and dilapidated shacks are being razed to make way for spanking-new houses. Homeowners are planning improvements never before possible.

People such as Dolores Meza are smiling and giving thanks for wonderful twists of fate, for rays of hope in a town that has been mired in despair and poverty for so many years.

“I prayed to God and he heard me,” said Meza, beaming, in the living room of her new $44,000 home. “I got my house.”

The changes in Guadalupe are mostly due to the efforts of Town Manager Jose Solarez. A third-generation native of the community, Solarez returned nearly four years ago to the largely forsaken area determined to turn things around. His dogged efforts have resulted in an infusion of millions of dollars in housing aid.

By year’s end, Solarez said, 10 to 15 houses will have been built, financed with low-interest federal loans. That’s big news for a town that had the worst housing for miles around but had been stuck in a governmental Catch-22.

Guadalupe, sandwiched between Phoenix and Tempe, has many of the same features it did when the Yaqui Indians of Mexico settled there 100 years ago.

It is still tiny--just two-thirds of a square mile. Yaqui ceremonies are still celebrated on holidays. Many homes have dirt floors and lack indoor plumbing. Agriculture remains a way of life for many of the 5,473 Yaqui and Mexican-American residents.

What has changed over the years is the neighborhood. The farmland that once surrounded Guadalupe has been developed.

“Through no fault of its own Guadalupe became a part of the Phoenix metropolitan area,” Solarez explained, and that made it ineligible for Farmers Home Administration (FmHA) money for rural communities.

An Arizona State University student study, commissioned by Solarez in 1989, found that 84% of the town’s 1,100 homes were substandard and 57% of those needed to be rebuilt.

Solarez used the study to try to get Guadalupe designated an area of “chronic economic distress” for Department of Housing and Urban Development purposes, and to try to persuade the FmHA that the town was rural.

Then, in February, 1990, HUD Secretary Jack Kemp made an appearance at Arizona State. Solarez attended, and he stepped up to the audience microphone.

“I said, ‘It’s great to talk about anti-poverty efforts of HUD and the federal government, but if you want to see real need, you should come to Guadalupe, about five miles away as the bird flies,’ ” Solarez recalled.

Kemp invited Solarez into his limousine for an impromptu trip to Guadalupe. Appalled by what he saw, Kemp pledged to do what he could to help the town. A month later, Guadalupe was declared to be in chronic economic distress, a status that led to the HUD loan program Meza read about in literature sent with her monthly water bill.

Domingo and Dolores Meza, who have two daughters, were first to qualify for one of the no-money-down, 8.39% HUD mortgages. On Easter Sunday, they moved into a gray-and-white stucco, three bedroom, two-bath house near the site of their old home, a pink clapboard structure made of two farm laborers’ shacks pushed together.

With both Mezas employed--he’s a hotel mechanic, she’s a hospital housekeeper--their $383 monthly payment will be affordable.

Even lower interest rates--down to 1%--were available through the FmHA. Repeatedly rebuffed by federal officials, Solarez asked what it would take to get Guadalupe recognized as a rural community.

“They said the only way we are going to do that is through an act of Congress,” Solarez recalled. “I said, ‘OK, how do I go about doing that?’ ”

Solarez’s lobbying resulted in the addition of two paragraphs about Guadalupe to the Cranston-Gonzalez National Affordable Housing Act, which passed in November.

Ground was recently broken for a $55,000 house for Larry and Becky Vega, who were first to be accepted into the FmHA loan program in Guadalupe.

Before they heard about the FmHA program, the Vegas thought their dream of owning a home was years away. Now, their monthly mortgage payment of about $150 will save them some $200 over their old rent.

Other families plan to upgrade their homes through a rehabilitation program involving low-interest loans from area banks. The town will use grant money to match half the sum borrowed, Solarez said, but repayment of that part of the loan will be postponed for five years.

If homeowners meet certain requirements--such as taking classes in budgeting and home maintenance--the town will write off their loans, Solarez said.