The Blue Ridge Housing Development Corp. has fallen on hard times.

Cited before as one of Roanoke's leading community development groups -- particularly in filling the need for dependable homes for people in the lower income bracket -- the nonprofit housing corporation is now operating with a skeleton crew working without pay.

In November, members of Blue Ridge's board approached Roanoke Mayor David Bowers and Vice Mayor Sherman Lea to ask for $180,000 to pay current bills, and another $200,000 for each of five years after that.

And the agency's former president and chief executive, Alvin Nash, resigned in December. Nash is a Roanoke city councilman.

Craig Balzer, a board member who is temporarily filling Nash's position as Blue Ridge president, said the problems stem entirely from a "cash flow" issue driven by the national housing market slowdown.

"So much of what we do, we have to have the revenue upfront to start the projects, and then get the reimbursements," Balzer said.

The Blue Ridge Housing Development Corp. is currently dependent on the sale of three houses -- two placed on the market in December 2007 and one in September 2008 -- that have not sold.

"Normally they sell houses every three months," Nash said by telephone Thursday. "They've got at least two or three that have been on the market for a year."

As a result, the board decided in December to pare its operations until March in an effort to wait out the market. New projects were put on hold, and most of the staff was laid off.

"The few of us that are still left here are working reduced hours so that we don't have to heat the building as often, so we're pretty much part time," said Blue Ridge Chief Financial Officer Cindy Hebblethwaite, who has been in charge of overseeing the agency's daily operations since Nash left.

According to the most recent tax filing available for the nonprofit, which detailed the tax year that ended in June 2007, Blue Ridge had $1.6 million in expenses -- most tied to home building and renovation work. Almost every penny of the organization's revenue came from public channels.

Blue Ridge reported two paid key employees for that year: Nash at an annual salary of $64,210, and Hebblethwaite at $50,000.

Blue Ridge isn't the only community development agency that has been hit by the recent housing crunch. The Roanoke Redevelopment and Housing Authority put its Miller's Hill revitalization project in Old Southwest on hold at the end of 2007 because two of the homes on Day Avenue had been renovated but sat unsold.

Executive Director Glenda Edwards said the housing authority is scheduled to close today on the sale of two unrenovated homes in the project to a private developer, Piedmont Properties LLC.

Although the nonprofit Total Action Against Poverty hasn't had to stop any ongoing projects, "we've got some projects on the drawing board that we've had to pull back because of the credit markets," said Earl Reynolds, TAP's director of housing and community development.

Blue Ridge is smaller than either of those agencies and therefore more susceptible to the economic downturn, Balzer said.

But despite the problems, Hebblethwaite and Balzer both remain optimistic about Blue Ridge's future.

"I don't think our staff would be working for no pay if they thought it was at an end," Balzer said.

Before he left, Nash laid out a plan for Blue Ridge that includes seeking funding from new sources.

"It's a full range of fundraising, looking at more contracts outside of the city, perhaps city funding down the way," Nash said.

The question of city funding for Blue Ridge, however, may be a sticky one.

When Blue Ridge board members approached Bowers and Lea to request funding, Bowers said he told the board "there are no funds available" because of a tight budget year.

"I know they've had a long and good relationship with TAP and my thought was that we may need to restructure a couple of these things over the next couple of years, either temporarily or permanently," Bowers said.

But complicating the request was that, at the time, Nash was still president of the agency as well as a council member.

"I felt awkward at the request given where Alvin was," Lea said.

When Nash was appointed to the city council in March, the Blue Ridge board of directors decided that the agency would forgo two types of federal grants in order to avoid a conflict of interest for Nash. A board member said at the time that the agency had previously received enough federal funding to sustain another 18 to 24 months of projects.

Balzer and Nash both said the decision to forgo federal funding is not the cause for Blue Ridge's current cash flow problems. Nash said the federal funding would not have been received until July 1 anyway.

He said he did get frustrated while he was both a councilman and president of Blue Ridge.

"I'm on council, and it's all deserving, but I'm approving $5 million of support to other nonprofits," Nash said. "We need help just like they do. They get it and we don't. For us not to get it because I'm on council, that's just ridiculously unfair."

After the interview, Nash sent an e-mail to other council members, expressing his frustration over the lingering questions.

"I have done nothing wrong," Nash wrote. "I have resigned from Blue Ridge Housing. I have never approached members of Council about funding Blue Ridge. Any issues that Blue Ridge Housing has with the City occurred before I joined Council .... I hope we won't let the newspaper control our common sense but please understand this my value system is strong and I know right from wrong."