Milagros Rivera nearly burst into tears when she got a call from people at the Haverhill Housing Authority.

They had a newly renovated apartment waiting for her in the city's Highlands neighborhood.

"I feel so much better here," said Rivera, who had been feeling trapped in her former apartment on Hilldale Avenue.

Her bedroom was on the second floor while her kitchen and bathroom were on the first floor.

"I used to stay in my room a lot," she said. "After my third heart surgery in February I've had shortness of breath and it was very difficult walking up and down the stairs. I was telling my family that I just wanted to move out, but I didn't think the city would find me a place as nice as this."

Milagros' fight to regain her health has become less of a battle. She is one of the newest residents of an 18-unit apartment building at 17-25 Mount Vernon St. which the city renovated and has reopened. It was originally built in 1948 for World War II veterans, but over the years the building fell into disrepair, which forced the city to close it. The last three tenants moved out a year ago.

Officials said the roof was leaking, the plumbing was failing and the building was in violation of city health and safety codes. Now it sparkles and gleams from floor to ceiling and has become home to families who were either homeless or living with others.

"I had called the Housing Authority in February and a month later they called me to say they had a new apartment for me," said Milagros, 34. "When they showed me the apartment I just said, 'When can I move in?'"

She said her two teenage children each have their own bedroom, and that they told her they love their new apartment.

A combination of $450,000 in neighborhood stabilization funds along with labor provided by the Housing Authority, contractors and the sheriff's department allowed the city to return the apartment building to productive reuse, with a priority for veterans with families in need of permanent housing.

Officials said most of the interior cleaning, painting and wall repair work was done at no cost by inmates in a pre-release program operated by Sheriff Frank Cousins Jr., saving the city thousands of dollars.

Housing Authority Director Dennis Soraghan estimated it would have cost $1.6 million to renovate the building had the city used only a private contractor to do the work.

"It would have taken us a decade," Soraghan said.

Because there were no families of veterans on the housing authority's waiting list, Soraghan said he filled the building with others who were on the list, including a family that had been displaced by a fire last year.

Tenants pay the Housing Authority 32 percent of their income for rent, with utilities included.

Mayor James Fiorentini said the city embarked on the project after he was contacted by a Haverhill woman who was living with friends and relatives, was no longer able to work due to a disability, and begged him to help her find an apartment she could afford.

He said the woman, Paula Gagnon, convinced him of a need to find additional housing. Fiorentini said he decided to use neighborhood stabilization money, which he said is a federal stimulus program, to renovate the building.

"We had called the Housing Authority, which had no space for her and a long waiting list, so we got this project going," Fiorentini said. "Without the neighborhood stabilization funds, Paula would still be living with relatives."

During a tour of the renovated building, Fiorentini along with members of his staff as well as Soraghan and members of his staff visited Milagros and Gagnon in their new apartments.

"This brings me the greatest sense of satisfaction in my nine years as mayor," Fiorentini told Rivera and her sister Dafnelis Sousa, who was visiting.

Sousa said the apartment is a dream come true for her sister.

"It's so much better for her and it's a very nice neighborhood," Sousa told the mayor. "She loves it here and we are all happy for her."

Gagnon, 53, said she was feeling stuck living with friends and relatives as she could not afford to pay the first and last month's rent that landlords often required. She is a former pharmacy technician. A brain aneurism eight years ago forced her to give up her job.

"My daughter, who is disabled, can't be left alone and it was difficult living with relatives," Gagnon said. "I've been waiting seven years for my own place and it finally happened."

She said she was speechless when the Housing Authority contacted her to say they had a place for her.

"When my daughter and I visited the apartment we were both in tears," Gagnon said. "I'm happy to have a roof over my head. We finally have a home."

Gagnon said that after she and her daughter moved into their new apartment, she sent thank you cards to Fiorentini and Soraghan.

"They did a great job getting us in here," Gagnon said.

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