Leaky faucets. Broken kitchen and bathroom tiles. Crumbling concrete stairs.

In a survey of just 18 of Methuen's public housing units, the state found these problems and 21 instances of noncompliance with state regulations. The 2007 audit also stated the state should pay to fix the problems.

The problem is the state wasn't paying. The audit said a series of requests for money was denied by the state Department of Housing and Community Development, which oversees local housing authorities.

"Deferring or denying the authority's modernization needs may result in further deteriorating conditions that could render the units and buildings uninhabitable," the audit states. "If the authority does not receive funding to correct these conditions, additional emergency situations may occur and the authority's ability to provide safe, decent and sanitary housing for its elderly and family tenants will be seriously compromised."

This bad news has brought good news to Methuen. The state is now coming through for the 500 units of housing located across the city.

"It brought the issues to the forefront, and everyone took note of it. It said Massachusetts is not living up to its obligation and that's part of the reason the governor stepped up," said Ken Martin, director of the Methuen Housing Authority.

The authority has a waiting list of about 100 people for its affordable elderly and family buildings that include garden-style apartments and townhouses spread out over three sections of Methuen.

The Housing Authority is funded through state and federal programs, grants and tenant rents, which are set at 30 percent of a resident's income. There are income guidelines to be eligible for public housing.

It does not receive city money.

This year, the authority received a 12 percent budget increase and a $650,000 grant for de-leading and other improvements to the family housing complex on Oakside Avenue. In 2007, the authority received $181,000 for bath exhaust fan installation, leaky pipe replacement, and roof and window replacement projects, according to the state.

It was the first maintenance money in five years, Martin said. But the increases are not enough to keep up with all the growing maintenance issues, Martin said.

"We've had zero increase in budget and no capital funds. It's been a tough five years," Martin said. "These are safety issues and they haven't been funded."

Gov. Deval Patrick has also approved a $500 million bond to give out grants for capital improvements for the state's public housing complexes. Methuen will apply and learn later this year if it will receive any additional money, Martin said.

"Preserving public housing is crucial," he said. "The cost of utilities, rents, prescriptions, have made it prohibitive for seniors to live by themselves. The housing stock is aging, they need to pump money into it."

Martin said the public housing apartments and townhouses are not fancy, but are structurally sound, up to code and safe for residents. Most of the apartments were built in the 1950s and 1960s.

"We've made repairs so none of the tenants have gone without," Martin said.

Residents of senior housing on Mystic Street love the Housing Authority community and the ability to live on their own in small, affordable, one-bedroom apartments. They just don't want to see the place further deteriorate.

"A lot of people have walkers and canes, and fall into the cracks," said Vern Zimmer, who has lived on Mystic Street for seven years. "They can't hold the handrails because they're broken. But this place is beautiful; it's our home. We wouldn't be able to live on our own without it."

"The steps are crumbling at every corner," said Matt DiZoglio of the authority's maintenance staff. "To me, it never looked like public housing. But as the years go by, it is starting to look like public housing."

Walking through the Mystic Street complex recently, Martin and staff point out troublesome spots. Maintenance worker Mike Ramsdell picks up a large piece of cement that cracked off the steps. Ramsdell gets his tools to start patching some smaller cracks — a temporary fix, he said.

In other spots, iron handrails have been removed and replaced with wooden rails, another cheap, temporary fix. The Housing Authority also replaced outdated white cabinets with dark wood cabinets left over from a renovation project at Fort Devens.

"We're putting them to good use," said Martin, adding that the work was done by authority staff for little cost.

Residents would like to see more security measures, like intercoms, and smooth paths to walk on. One woman leaned on a handrail recently, and it fell right over.

"There's a lot that has to be done," said Joan Mannke, who's lived in the Mystic Street complex for 13 years. "We need money for preventive maintenance."

"We're here because we can't afford anything else. And it's just deteriorated more," said Claire Cavanaugh, who was living with her granddaughter while waiting to get into public housing.

Residents say the improvements would encourage more of the elderly residents to come out and participate in the community.

The authority, thanks to a program through elder services, provides hot lunch every day and the complex community room is busy with residents playing card games and bingo nearly every afternoon.

"It has to be done to get the seniors out and about," said Ruth Scammon, who has lived there for two years.