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HomeMy WebLinkAboutRES 89-148 R E S O L U T I O N BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the revisions to the Housing Repair & Rehabilitation Guidelines, as shown in Exhibit "A" attached hereto, be, and they are hereby, adopted by the City of Beaumont. ASSED BY THE CITY COUNCIL of the City of Beaumont this the �� day of , 1989. Mayor - LEAH IBIT "A c HOUSING REPAIR & REHABILITATION PROGRAM GUIDELINES INTRODUCTION Conservation and expansion of the nation's housing stock is one of the specific objectives to be met by the expenditure of Community Development Block Grant (CDBG) funds. Title I of the Housing and Community Development Act provides that the principal beneficiaries of these expenditures should be persons of low and moderate income. Affordable housing is ' a national priority and ranks as one of the foremost legislative agenda items. The City of Beaumont has participated in the Community Development Program since its inception in 1975. One of its major activities is the Housing Rehabilitation Program which was designed to provide low interest loans and/or grants to low and moderate income persons primarily residing in designated CDBG strategy areas. The goal of the Housing Rehabilitation Program has been to prevent deterioration of older City neighborhoods and to provide safe, affordable housing for economically disadvantaged residents. Assistance has been directed toward individuals who own their own home and investors with rental properties that provide units for low and moderate income persons. 1 r PURPOSE -The purpose of the Housing Rehabilitation Program is to provide financial and technical assistance to eligible individuals who own homes and need moderate or emergency repairs to keep their property safe and habitable, thereby prolonging the useful life of the structure, preserving the viability of the neighborhood and preventing slum conditions when economically feasible. FUNDING AND ADMINISTRATION The housing rehabilitation activity is conducted by the Housing Assistance Division which is part of the Internal Services Department. Funding for direct costs comes from CDBG allocations. The City of Beaumont funds most of the indirect costs from its general operations' budget. HOUSING ASSISTANCE ADVISORY BOARD Authority 1. The Housing Assistance Advisory Board (HAAB) shall be composed of seven (7) members selected from the community at large. The HAAB shall be appointed by the City Council and each member shall serve a term of two (2) years 2 t ` without compensation. 2 . The HAAB will be responsible for making eligibility determinations on all rehabilitation assistance. Advisory Board meetings will be held as the case load dictates. Due to the confidential nature of the information disclosed at these meetings , the Board meetings will not be open to the public. However, quarterly and annual status reports will be available to the public and Citizen Advisory Committee. 3. The HAAB shall be provided with a financial packet for each applicant which shall include: family composition, employment status, mortgage and appraisal data, credit data, income and expense statement, repair specifications, and staff recommendations. 4 . Recommendations shall be presented by the Housing Assistance Division. The HAAB may accept or formulate recommendations as long as they coincide with eligibility criteria. 5. The HAAB shall act on each case presented. The 3 Y y � Board shall have the right to approve, deny, table, or reject any request for assistance as long as it is for reasons consistent with guidelines. 6. All action on applications shall be certified by the Chairman of the Board and the Administrator of the Housing Assistance Division. ELIGIBILITY CRITERIA Eligibility for housing rehabilitation assistance is established by criteria consistent with HUD income and housing code standards, as well as local City housing goals and objectives. Types of financial assistance may include loans or grants. Applicant Eligibility In order to be considered for housing rehabilitation assistance, the applicant must meet the following criteria: 1. Own, have clear title, and be residing in, or have moved out of the house temporarily with intent to move back in the house for which they request assistance; 4 2 . Have owned such property at least one (1) year ® prior to submitting an application for rehabilitation assistance; 3 . Provide proof that mortgage payments are current; 4 . Provide proof that taxes are current and hazard insurance is in force prior to beginning construction; 5. Receive total family income that does not exceed the current HUD Office of Economic Affairs ' limits defining low and moderate income levels; 6. For rental rehabilitation assistance, own property that is inhabited by low or moderate income persons or shall be used for such once the property is repaired; and, 7 . Shall not have received housing rehabilitation assistance within the past five (5) years. 5 M Applicant Priority Applications will be accepted on a daily basis and will be rated on a quarterly basis in the months of January, April , July, and October of each calendar year. Advance notices will be published in the news media to give citizens sufficient time and information to submit an application for the applicable quarterly rating. Applications will be reviewed and processed by priority of need based on criteria that will include: 1. Location of property; 2 . Physical disability or impairment; 3 . Elderly; 4 . Number of minor children living in the home for whom applicant has legal custody; 5. Parental status; 6. Income; 7 . Length of residence in property; and, 6 8 . Conditions posing an imminent threat to health or safety. Each set of criteria will be assigned a numeric value. The total points on each application will determine the order of ranking by need and the priority in which the application will be processed. A quarterly work plan will be formulated based on twenty-five percent (25%) of the total funding available and the ranking order of the applicants. In cases of tied rankings, priority shall be determined on the basis of cash or cash equivalent per capita income. Property Eligibility Rehabilitation work shall be limited to those properties that are determined in need of repairs in order to comply with the City' s Minimum Housing Codes. The properties must either be located within the CDBG strategy areas or must provide shelter for primarily low income residents. SCOPE OF WORK The extent of rehabilitation work specified shall be determined by the Housing Inspector' s findings of minimum housing code 7 deficiencies and subsequent cost estimates for the necessary repairs to bring the house up to standards. In some cases, ,additional improvements beyond minimum standards may be warranted, especially in instances where incipient violations may become minimum housing code deficiencies within the succeeding twelve (12) months. In most cases, however, general property improvements, which may be desirable but are not required to meet minimum housing standards, shall not exceed ten percent (10%) of the repair cost. In addition to necessary minimum housing code repairs, specifications may include up to $600 of energy conservation improvements. In cases determined economically feasible to bid, preliminary specifications will be reviewed thoroughly at a prebid conference with the contractors, and any recommended changes, based on their site inspection, will be taken into consideration and incorporated into the final specifications as appropriate. On site inspections must be made by all contractors submitting bids. Rehabilitation Categories The scope of work shall be defined and limited by the costs estimated to bring the property up to minimum housing, Section 8 , and other codes when applicable, except in those cases where the structure is too deteriorated to be repaired to minimum standards, 8 but needs immediate emergency repairs to make the structure habitable. Each current year's funding level for repairs shall be allocated by a percentage of tie total into five (5) rehab categories. This annual allocation shall be made in order to assure unit production acceptable to meet HUD guidelines (11 units per staff year) , as well as to maximize the available funds to benefit the greatest number of eligible applicants. Estimated costs in excess of $15, 000 for repairs shall render the project economically unfeasible and shall be recommended as such to the HAAB. The following table indicates the five (5) rehab categories and allocated percentage to each from available funds. Estimated Category Cost Range % Allocation Intensive Rehab $12, 000 - $15, 000 10% Substantial Rehab $ 9, 000 - $12 , 000 20% Moderate Rehab $ 7, 500 - $ 9, 000 30% Minor Rehab $ 1, 000 - $ 7 , 500 35% Emergency Repair Grants $ 500 - $ 5, 000 5% PROJECT SELECTION Each applicant' s property will have a cost work up after thorough 9 evaluation of the property's condition is made to determine the extent of work necessary to meet applicable minimum housing standards. If the costs exceed the $15, 000 limit, the owner will be advised that the property is economically unfeasible and unless other financial resources or alternative housing programs are available, no further action will be taken. For cost estimates falling within the defined rehab categories, work will proceed on the basis of priority of need provided there is money remaining in that category. Otherwise, the applicant will be put on a waiting list for a period of twelve (12) months, and receive assistance as money becomes available, provided their ranking of need is not superseded by new applications. To assure fairness and impartiality in the selection process, each project will be submitted to the HAAB for review and determination of eligibility, except in emergency situations which require immediate attention. FINANCIAL ASSISTANCE Financial assistance for housing rehabilitation work shall be given in three (3) distinct ways, under the following guidelines: Loans 1. Loan (deferred payments - forgivable) - 10 Available to eligible owner-occupied applicants. Amount: Total Cost of Repair Project Term: Five (5) Years Interest: Zero Percent (0%) Eligible applicants may receive a loan for the cost of repairs. The loan will be amortized and reduced by ten percent (10%) each year, with the remaining balance terminated at the end of the fifth year of the loan, provided that the following conditions are met: a. The applicant remains in the home; b. Proof of paid taxes and hazard insurance is provided annually; and, C. The property is properly maintained. No cash payments are required as long as the participant complies with the conditions outlined above. Failure to comply with the above requirements may result in the demand of payment for the remaining balance or initiation of equal monthly payments for the amount remaining. 2. Loan - If Rental Rehabilitation funds are li unavailable, eligible investors may apply for a loan to repair rental units, provided the property is occupied by a low or moderate income family or will be occupied by low or moderate income tenants. Amount: Cost of Repair Project Terms: Ten (10) Years Maximum Interest: Five Percent (5%) Eligible applicants may receive a loan for the project cost. Payments shall be amortized over the term of the loan. The following conditions must be met: a. Rents must remain affordable to low or moderate income persons and shall not exceed fair market rent for the area; b. Investor must show proof annually of the payment of taxes and hazard insurance; C. Units must be properly maintained; d. If property changes ownership before 12 F expiration of the term of loan, the City may demand payment on the remaining balance. Grants Available to eligible owner-occupied applicants for emergency repairs, which if not done, would pose an immediate threat to the health and safety of the occupant. SECURITY FOR PREFERRED REHABILITATION i.OANS All rehabilitation assistance, excluding emergency repair grants, will be secured by a properly executed real estate lien note and deed of trust in favor of the City of Beaumont. CANCELLATION OF LIEN To prevent windfall profits from the resale of rehabilitated property, the City of Beaumont will place a lien upon the property for the amount of the loan. If any of the following events occur during the term of the loan, arrangements must be made with the City for payment of the remaining balance: 1. The sale of all or any interest in the subject 13 m property; 2. The death of the original loan recipient (in case of a husband and wife, the death of both) ; if both parties to this loan should die during its terms, the heirs would be required to assume and pay the remaining portion; or, 3 . The breach of the terms of the lien. APPEAL PROCESS The City Manager shall consider the written appeal of applicants who feel that due process has been denied. The cause for such appeal shall be limited to: 1. Denial of loan due to excessive rehab cost estimates exceeding program guidelines; or, 2 . Cases in which the applicant feels inaccurate information may have been included on the application which adversely affected their ranking of priority. The Housing Assistance Division shall advise applicants of their 14 •b right to appeal and prepare the requisite documents for the City Manager' s resolution. Appeals must be postmarked within ten (10) days of the date of the letter of notification rejecting the application. 15