Kevin and Lisa Dudley will have to wait a little longer to realize their piece of the American dream.

But the Dudleys say the delay won't deter them and hasn't made them give up on a county-administered U.S. Department of Housing and Urban Development effort to help low and moderate income families join the ranks of homeowners.The Dudleys are one of four local families working to become first-time homeowners through HUD's Urban Homesteading program. But late last year, budget wrangling in Congress left the program without funding.

That meant low-interest loans weren't available as planned to the Dudleys and the other Salt Lake County urban homesteaders. Not only were plans to repair and move into their first home delayed for three months while the Salt Lake County Housing Authority looked for alternative lenders, but anticipated monthly mortgage payments for some homestead families would double because of higher interest rates on the alternative loans.

"We're not going to give up the dream of owning a home just because it will cost a few more dollars a month," Kevin Dudley said. "None of the families in the program can afford to buy a home the traditional way. Sure, it's frustrating to have to wait. But there's probably no better program to help low-income people get into a home of their own."

The lack of federal loan money and the resulting higher monthly payments apparently won't keep any of the families out of the homes they've acquired, said the Housing Authority's John Godfrey.

"We're the first program of this type in the state. Just like the pioneers of old had their setbacks and tribulations, this is no different. We definitely feel bad that things haven't worked out like we had planned. We can empathize with these families and how frustrating it is for them."

Last December, with a lot of news media coverage and fanfare, the Housing Authority turned over to the Urban Homestead families keys to their "new" homes. Actually the homes, all in the Kearns and Magna areas, are far from new. All had been abandoned and are in need of extensive repairs, estimated to cost $20,000-$25,000.

HUD purchased the homes for about $18,000 each and through the Housing Authority turned them over to qualifying low- and middle-income families. In exchange, the homesteaders agreed to make all needed repairs. HUD loans at 3 percent interest were to finance repairs, with monthly loan payments in the range of $180-$220.

The idea is that older neighborhoods will be rehabilitated instead of allowed to deteriorate.

But when Congress didn't fund the program, the Dudleys and other Salt Lake County homesteaders had to put their plans on hold. With low-interest HUD loans unavailable, the Housing Authority had to strike a deal with a local mortgage lender for authority-guaranteed loans at 10.5 percent interest - the lowest available rate.

For the Dudleys, those terms would make their monthly mortgage payments on a 20-year housing rehabilitation loan of $20,000 closer to $350 than to $180. But that hasn't changed their minds about their Kearns home, or about the homesteading program.

"I look at it this way. For $300 a month we couldn't even rent a place as nice as our home will be once it's fixed up," Kevin said. "We'd like to know what happened to the 3 percent money, but the Housing Authority met its commitment to us and no one will lose their home. We're the first group, so there are still bugs in the program to be worked out. It should go a lot smoother for the next group."