$2 Million Loan OKd for Owners of Condos : Aid: Federal program helps out a Granada Hills complex denied SBA assistance after the Northridge quake.

Gertrude McCubbins didn’t want to bother with a monthly mortgage payment or have to depend on others to put a roof over her head. So two years ago, she used her life savings to pay $90,000 cash for a three-bedroom condominium near Woodley Avenue and Chatsworth Street.

However, her independence was taken away by the Jan. 17 Northridge earthquake, which left her 88-unit condo complex uninhabitable. McCubbins, 79, was forced to move in first with her son and later get an apartment for herself.

Worst of all, she faced losing her life’s savings if the building could not be rebuilt.

Her homeowners’ association had no earthquake insurance and the group--composed mostly of first-time and elderly homeowners with limited incomes--was turned down for a Small Business Administration loan because it lacked the ability to repay it. Some homeowners simply stopped paying their mortgages and allowed the banks to foreclose.

But thanks to a no-interest 30-year federal loan, McCubbins and her neighbors expect to move back into their rebuilt complex by the end of summer.

On Tuesday, the Los Angeles City Council approved a $2-million loan for the association, the first to a large condominium complex under a federal program administered by the city’s Housing Department for owners of apartments, condominiums and single-family home who were turned down for SBA loans after the quake.

“It’s been very frustrating, it’s been kind of hard,” McCubbins said. “I broke myself buying this place. But I think it’s great that we are getting this loan.”

“It has taken a year, but we are so thrilled,” said Lela Collins, who manages the building and was persistent in trying to get a loan to save the 14-year-old building. She sent letters to government officials locally and in Washington.

“This will allow homeowners to get back on their feet without having to incur additional debt for a few years,” said Brian Hatkoff, acting president of the Continental Village Condominium Assn., noting that the first payment is not due for six years. “Without the loan, the building would not have been rebuilt and the city would have been forced to tear it down.”

Although not within the boundaries of a “ghost town,” the building suffered much of the same vandalism as those within the 13 designated clusters of severely damaged vacant buildings, and owners were forced to hire private security guards to keep vandals out.

“Every single door was kicked in and windows were broken,” said Hatkoff, who was renting out his unit in the complex at the time of the quake. “They took appliances and even garbage disposals.”

Hatkoff said the complex sustained about $250,000 in damage from the vandalism, and the association has been paying $10,000 a month for security.

Robert Moncrief, director of the major projects division of the city’s housing department, said the Continental Village condo is precisely the type of building officials hoped to help when additional funds were made available by President Clinton.

“This is a group that had very little money left, but they remained organized and kept moving forward,” Moncrief said. “They have shown courage. I wish we could have helped them sooner.”

Times staff writer Hugo Martin contributed to this story.