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HomeMy WebLinkAboutORD 82-73 ORDINANCE NO. ENTITLED AN ORDINANCE AMENDING CHAPTER 14 OF THE CODE OF ORDINANCES BY REPEALING SECTIONS 14-77 AND 14-78; REDUCING THE MEMBERSHIP OF THE LOAN ADVISORY BOARD; ADOPTING N&i REGULATIONS FOR THE HOME REHABILITATION LOAN PROGRAM; PROVIDING FOR SEVERABILITY; PROVIDING FOR REPEAL; AND PROVIDING FOR A PENALTY. BE IT ORDAINED BY THE CITY OF BEAUMONT: Section 1 . That Chapter 14, Sections 14-77 and 14-78 of the Code of Ordinances of the City of Beaumont be, and the same are hereby, repealed and that Sections 14-76 and 14-79 be, and the same are hereby, amended to read as follows : Section 14-76: There is hereby created a loan advisory board to which loan application shall be submitted for approval. The loan advisory board shall be composed of five (5) members selected from the community at large. The loan advisory board shall be appointed by the City Council and each member shall serve a term of two years without compensation. Section 14-79: The loan advisory board shall promulgate operating rules and regulations as set forth in the rules governing the administration of the rehabilitation loan program created herein, complete and current copies of which shall be maintained on file in the office of the City Clerk. Section 2.- The regulations for the Home Rehabilitatlion Loan Program attached hereto as Exhibit "All and made a part hereof are hereby adopted and shall. be filed with the City Clerk. Section 3-- That if any section, sentence, clause or phrase of this ordinance, or the application of same to a particular set of persons or circumstances, should for any reason be held to be invalid, such invalidity shall not affect the remaining portions of this ordinance, and to such end the various portions and provisions of this ordinance are declared to be severable. -,2 73 7--1.3 .2- ell, Section 4. All ordinances or parts of ordinances in conflict herewith are repealed to the extent of the conflict only. Section 5. Any person who violates any provision of this ordinance shall, upon conviction, be punished as provided in Section 1-8 of the Code of Ordinances of Beaumont, Texas. PASSED THE CITY COUNCIL of the City of Beaumont this the day of Mayor - 2 - CITY OF BEAUMONT HOUSING REHABILITATION LOAN PROGRAM Section Page Number 1. Purpose and Intent 1. 2. Definitions 2. 3. Loan Advisory Board 3. 4. Terms and Conditions 6. 5. Energy Conservation 11. 6. Loan Payment Subsidy 13. 7. Relocation 14. ADOPTED JULY 13, 1982 EXHIBIT "A" HOUSING REHABILITATION PROGRAM SECTION 1. PURPOSE AND INTENT The primary objective of Title I of the Housing and Community Development Act is "development of viable urban communities by providing decent housing, suitable living environment and expanding economic opportunities, principally for persons of low and moderate income" .1 Conservation and expansion of the nation's existing housing stock is one of the specific objec- tives of the use of Community Development Block Grant funds. Beaumont has participated in the Community Development Pro- gram since its inception in 1975. The City's Rehabilitation Loans and Grants Program was primarily designed to provide low interest rehabilitation loans to property owners in Neighborhood Strategy Areas or Target Areas. Over the last couple of years, changes have been made to expand the partici- pants of the program and to increase the variety of rehabili- tation assistance available. The basic rehabilitation loan available to property owners in Neighborhood Strategy Areas comes directly from the City's annual CDBG grant. The City of Beaumont's ,Housing Rehabilitation Loan Program is intended to provide financial assistance for rehabilitation to individuals or families who own a single family dwelling unit, within the designated strategy area, and limited in- vestor owned properties needing financial assistance for the renovation of rental units that will be made available to low and moderate income individuals or families. The Rehabilitation Loan Program also benefits property owners who, because of their low income and/or family size cannot afford to make full monthly payments on interest bearing 1Public Law 93-383, 93rd Congress, S. 3066, August 22, 1974. 1 . SECTION 1. (Cont'd.) amortized loans necessary to make repairs to their home. Loans shall be funded by the Community Development Block Grant Program. SECTION 2. DEFINITIONS The following definitions may appear in this manual in con- nection with rehabilitation loans and grants: A. COMMUNITY DEVELOPMENT BLOCK GRANT (CDGB) The federal program from which the City of Beaumont receives funds that can be used to make rehabilitation loans. B. PROJECT AREA(S) An area within the City of Beaumont, Texas, where it has been determined by the City Council that Community De- velopment Block Grant funds may be spent for rehabilita- tion loans. C. LOCAL PUBLIC AGENCY (LPA) The City of Beaumont's Agency. D. AREA OFFICE An office of the United States Department of Housing and Urban Development. E, OWNER-OCCUPIED PROPERTY A property occupied by the owner that is used entirely for residential purposes and that contains one to two dwelling units. F. INVESTOR-OWNED PROPERTY A property used entirely for residential purposes that is either:. (a) not occupied by the owner, or (b) contains three or more dwelling units whether or not occupied by the owner. 2. SECTION 2. (Cont'd.) G. MINIMUM HOUSING CODE (MHC) The minimum physical standards which a dwelling must meet in order to be determined a safe, decent and sanitary dwelling unit. H. REQUIRED WORK Rehabilitation work necessary to make property comply with the Minimum Housing Code standards. I. INCIPIENT DEFECTS Defects that are not apparent or minor in nature but will become serious in the near future. J. GENERAL PROPERTY IMPROVEMENT (GPI) Rehabilitation work or improvements not required to make property comply with the Minimum Housing Code standards, but are desirable to improve life quality and enhance pro- perty value. SECTION 3. LOAN ADVISORY BOARD A. AUTHORITY (1) The Loan Advisory Board is composed of five members appointed at large. Members of the Advisory Board shall be appointed by the City Council for two-year terms and shall serve without compensation. (2) This Board will be responsible for making determina- tions on all rehabilitation loans. Advisory Board meetings will be held as the case load dictates. Due to the confidential nature of the information dis- closed 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 committees. 3. SECTION 3. A tCbnf-d. ) (3) The Loan Advisory Board shall be provided with a comprehensive financial packet, for each applicant, which will include: family composition, employ- ment status, mortgage and appraisal data, credit data, loan amount, repair specifications, and loan recommendations. (The entire rehabilitation file will be available at the Board meetings and any in- formation within that file will be presented upon request, except for the applicant's name.) (4) The recommendations are suggestions from the Re- habilitation Loan Office. The Loan Advisory Board may accept or formulate their own recommendations as long as they coincide with eligibility criteria. (5) The Loan Advisory Board, at their discretion, may exceed those loan limits established by policy, not by more than 10 percent, in extenuating circum- stances. (6) The Loan Advisory Board shall act on each loan case presented. The Board shall have the right to approve, deny, table, or reject any loan for sound and suf- ficient reason. (7) The Loan Advisory Board shall not approve any loan the terms of which exceed the remaining economic life of the property to be approved. The terms of any loan shall not exceed the following: a. Maximum term - 12 years. b. Remaining economic life shall be equal to or greater than the maximum term. (8) All action on loan applications shall be certified by the Chairman of the Board and the Administrator of the Rehabilitation Loan Office. 4. SECTION 3. V. (Cdn'V d.) (9) The Loan Board shall consider applications for deferred payments, on loan originally approved, in extenuating circumstances such as death or ill- ness requiring long periods of convalescing to a providing spouse or head of household. B. APPEALS (1) The Loan Advisory Board shall consider the appeal of applicants who feel that due process has been denied in the administering of rehabilitation ser- vices by the Rehabilitation Loan Office. The cause for such appeal shall be limited to: a. Denial of loan processing by Rehabilitation Loan Office because of excessive rehab cost estimates that exceed program guidelines. b. Information submitted on the application appears to be inaccurate. c. To mediate disputes or disagreements between loan recipients/contractors and rehab staff. C. APPEAL PROCEDURE (1) The applicant must submit in writing to the Loan Advisory Board those related facts which in his opinion are being misinterpreted by the Rehabilita- tion Office. (2) If the applicant is unable to clearly state his opinion in writing, he may request to appear before the Loan Board and explain his position. (3) The appeals form must be executed within 30 days after receipt of notification that a loan has been denied by the Rehab Loan Office. 5. SECTION 3. C (Cont'd. ) (4) Upon receipt of appeals from improper order, the Rehab Loan Office, the Administrator, shall cause the hearing to be scheduled at the next available Board meeting. The decision of the Loan Advisory Board regarding the appeal is final . SECTION 4. TERMS AND CONDITIONS A. GENERAL (1) The Rehabilitation Loan Agency will consider such loans that would be legal loans as defined by Ordinance No. 79.4. The Rehab Agency cannot accept applications to finance any type of new construction except where new construction is necessary in order to comply with the City of Beaumont's Minimum Housing Code. Neither can the Agency accept an application on a property situated outside the boundaries of a community development designated strategy area. (2) The City of Beaumont shall have the authority to collect delinquent loans through any reasonable means permitted by law, including foreclosure and sale, upon the direction of the City Manager. (3) Every loan applicant will be required to furnish proof of non-delinquent taxes before loans will be approved by the Rehabilitation Agency. (4) Applicant denied a loan by the Rehabilitation Loan Agency may not submit another application for a period of six months unless the applicant's applica- tion is affected by changes in the program policies. 6. SECTION 4. (Cont`d. ) B. STRATEGY AREAS Are those areas of the City of Beaumont designated by the City Council to be recipients of funds from the Com- munity Development Block Grant Program. Those areas are Census Tracts 7, 8, 9, 10, 15, 17, 18, 22, 23 and portions of Census Tracts 19 and 20. C. APPLICANT ELIGIBILITY To be eligible for a Rehabilitation Loan, the applicant must: (1) Own a single-family dwelling or multi-family dwell- ing units within a designated strategy area. (2) Owner must hold general warranty deed and/or deed of trust to property to be eligible for loan payment subsidy. (3) Owners occupying a single-family dwelling unit pur- chasing such a property under a general warranty deed and/or deed of trust executed six months prior to sub- mitting an application for rehabilitation assistance. (4) Owner cannot be delinquent in the payment of mortgage or land contracts payment by more than 60 days. (5) The applicant must evidence adequate capacity to repay the loan and have a satisfactory record of fulfilling previous obligations. (6) Owners eligible for annual loan payment subsidy must be certified financially capable of making payments on the unsubsidized amount. (7) Owners certified for annual loan payment must pro- vide financial documentation to the Rehabilitation Loan Agency on an annual basis to receive continued loan payment subsidy. 7. SECTION 4 C. (Cont'd. ) (8) Property owners may provide qualified cosigners who will assume responsibility for payment of the un- subsidized portion of the rehabilitation loan. D. PROPERTY ELIGIBILITY A rehabilitation loan may be made only to properties meet- ing the following requirements: (1) Is in need of rehabilitation work in order to comply with the City's Minimum Housing Codes. (2) Is located within a designated CDBG Strategy Area. (3) Single family or multi-family dwelling units. (4) Appraised value exclusive of land must exceed $5,000. E. INCOME LIMITATIONS Applicant eligibility for annual loan payments subsidy is determined on the current Community Services Administrative Income Poverty guidelines. F. MAXIMUM LOAN LIMITATIONS (1) The maximum amount for rehabilitation of a single family unit or duplex units shall not exceed a maximum of $15,000. (2) The maximum amount for three or four multi-family units shall not exceed $10,000 per unit. (3) The maximum amount for five or more multi-family units shall not exceed 50 percent of the rehabilitation cost. (4) The maximum amount of loan funds which may be used to refinance existing debts secured by the property can- not exceed $4,500. 8. SECTION 4. (Cont'd. ) G. REFINANCING EXISTING DEBT SECURED BY THE PROPERTY A rehabilitation loan may include, within the applicable loan limits, an amount to refinance existing debts se- cured by the property. The requirements for refinancing are as follows: (1) The debt to be refinanced must be a housing-related debt secured by a lien, mortgage or deed of trust against that property to be refinanced. (2) The cost of the rehabilitation work required to make the property comply with the City of Beaumont's Standard Building Codes and Minimum Housing Codes must represent at least 60 percent of the total amount of the loan excluding refinancing of debts. H. SECURITY FOR REHABILITATION LOANS (1) All rehabilitation loans will be secured by a pro- perly executed real estate lien note and deed of trust in favor of the City of Beaumont. (2) Adequate hazard insurance must be maintained for the duration of the loan. I. TERMS OF LOAN (1) The interest on rehabilitation loans shall be figured at five percent for single family and duplex units. (2) Interest rates for multi-family units may be es- tablished by the Loan Board, but will not be less than 12 percent. (3) The maximum term on rehabilitation loans shall not exceed 12 years. J. COST INCLUDABLE IN REHABILITATION LOAN A rehabilitation loan may include amounts for the fol- lowing purposes:. 9. SECTION 4. J (Cont'd. ) (1) Rehab loan must cover the cost of correcting all work necessary to make the property conform with the City of Beaumont's Minumum Housing Code and ap- plicable Standard Building Codes. (2) Forty percent of the loan may be used to correct in- cipient defects and make general property improve- ments. (3) The cost of refinancing existing housing-related indebtedness when applicable. (4) A contingency amount, for unforeseen expense, not to exceed six percent of the rehabilitation contract price. (5) The cost of certain expenses related to the proces- sing of the application and to obtain security of the loan, such as: a. Title reports b. Attorney certificates c. Recording and other fees d. Appraisals (6) The cost of Energy Conservation Improvements (within guidelines) . K. CANCELLATION OF LIEN To prevent inappropriate windfall profits from the resale of the property of the rehabilitation, 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, the remaining balance must be repaid: (1) The sale of all or any interest in the subject property. (2) The death of the original loan recipient (in the case of a husband and wife, the death of both) . If both 10. SECTION 4. K (2) (Cont`d. ) parties to this loan shall decease during its term, the heirs would then be required to assume and pay the remaining portion. (3) A breach of any of the terms of the lien. After the terms of the loan have been met, the lien shall be cancelled. SECTION 5. ENERGY CONSERVATION A. PURPOSE (1) Expand the scope of the rehab loan program to include energy conservation repairs. (2) Provide additional funds to include energy conserva- tion measures in all rehabilitation contracts over the above and statutory loan limits. (3) Offer technical assistance to homeowners about ways they can make their home more energy-efficient, aid them in prioritizing their energy conservation needs. (4) Offer property owners an avenue by which to lower their utility bills and total housing expenses, there- by increasing their ability to repay their loan. (5) Increase the ability to make expenditures under the Community Development Block Grant Program for the benefit of low and moderate income families. B. LOAN LIMITATION Property owners applying for and receiving Community De- velopment Block Grant Rehabilitation Loan funds. Appli- cants are eligible for up to fifteen hundred dollars maximum for labor and material or six hundred dollars for materials to make energy conservation repairs. Adjusted loan maximums shall reflect this limit increase. 11. SECTION 5. (Cont'd.) C. ELIGIBILITY CRITERIA (1) Recipient must be a participant in the Rehabilitation Loan Program. (2) All code violations must be correctable by the primary loan. (3) Property owners must meet or exceed the Miminum Hous- ing Code and applicable Standard Building Codes. D. ELIGIBILE REPAIRS (1) Installation of individual utility meters or check meters. (2) Ceiling insulation. (3) Insulation of hot water and steam pipes. (4) Insulation of heating and cooling ducts in unheated spaces. (5) Caulking and sealants in building joints. (6) Weatherstripping doors and windows. (7) Clock thermostats for units with individual heating units. 12. SECTION 6. REHAB LOAN SUBSIDY SLIDING FEE SCALE: PERCENTAGE OF MAXIMUM CHARGE BASED ON FAMILY INCOME AND SIZE FAMILY SIZE 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 $ 4,741 $ 5,172 $ 5,603 $ 6,034 $ 6,465 $ 6,986 $ 7,327 $ 7,758 $ 8,189 $ 8,620 2 6,259 6,828 7,397 7,966 8,535 9,104 9,673 10,242 10,811 11,380 3 7,777 8,484 9,191 9,898 10,605 11,312 12,019 12,726 13,433 14,140 4 9,295 10,140 10,985 11,830 12,675 13,520 14,365 15,210 16,055 16,900 5 10,813 11,796 12,779 13,762 14,745 15,728 16,711 17,694 18,677 19,660 M 6 12,331 13,452 14,573 15,694 16,815 17,936 19,057 20,178 21,299 22,420 7 13,849 15,108 16,367 17,626 18,885 20,144 21,403 22,662 23,921 25,180 8 15,367 16,764 18,161 19,558 20,955 22,352 23,749 25,146 26,543 27,940 9 16,885 18,420 19,955 21,490 23,025 24,560 26,095 27,630 29,165 30,700 10 18,403 20,076 21,749 23,422 25,095 26,768 28,441 30,114 31,787 33,460 SECTION 7. RELOCATION The City of Beaumont's relocation policies and guidelines for relocation payment and assistance made to individuals or fami- lies displaced by activities that are not established under the Uniform Relocation Act (570.602a) were adopted by the City Manager or his designee pursuant to Section 14-16D of the Code of Ordinances for the City of Beaumont, Texas. A. OPTIONAL RELOCATION PAYMENTS AND ASSISTANCE (1) Determination of Appropriatness In accordance with HUD regulations at 24 CFR 570.602c, it is determined that the provision of the optional relocation payments and assistance described herein is appropriate to the Community Development Program of the City of Beaumont, Texas. (2) Replacement Housing Payments for Homeowners and Tenants Provide suitable and adequate housing for homeowners and tenants whose homes have been determined to be in- feasible for rehabilitation. B. HOMEOWNER PAYMENTS AND ASSISTANCE (1) Homeowners must apply for a Housing Rehabilitation Loan. The application shall be presented to the Loan Advisory Board (LAB) for review and approval except when the structure is deemed unsafe for occupancy in the judg- ment of the Relocation Administrator. The LAB may re- fer an application for rehabilitation to the relocation program for the following reasons: a. The amount to rehabilitate the property grossly exceeds the loan limit. b. The "as is" appraisal value is less than $3,000. (2) An eligible family shall be provided a replacement housing payment in lieu of a housing rehabilitation loan if the LAB determines that undue hardship would result from any housing rehabilitation loan repayment 14. SECTION 7. B (2) (Cont'd.) requirement, and/or a housing rehabilitation loan would be insufficient to bring the owner-occupant's home into compliance with the Minimum Housing Code. Such relocation payments may include the amounts determined by the LAB to be necessary and reasonable for: a. Temporary housing costs. b. Acquisition and moving of dwellings to a home- owner's property. c. Rehabilitation of dwellings. d. Moving expenses for the owner's personal pro- perty. e. Miscellaneous expenses necessary to complete the successful rehousing of the owner into an adequate decent, safe and sanitary dwelling. As an alternative to, or in addition to any rehabilitation payment specified above, and at the LAB's discretion, a homeowner-occupant may be provided a rehabilitation loan ne- cessary to bring the owner's home into compliance with the Minimum Housing Code Standards. C. TENANT PAYMENTS AND ASSISTANCE A tenant who vacates a dwelling following a determination by the LAB that such dwelling is infeasible to rehabilitate shall be eligible for assistance in obtaining an adequate decent, safe and sanitary replacement dwelling, as follows: (1) If the tenant is unable to obtain Section 8 Housing Assistance, the tenant shall be eligible to receive a rental assistance payment not to exceed $4,000 and computed in accordance with HUD Relocation Regulations at 24 CFR 42.453, "Replacement Housing Payment for Rental Assistance". 1S. SECTION 7. C Cont'd. ) (2) Reimbursement for moving expenses necessary to move the tenant's personal property. (3) Actual reasonable and necessary miscellaneous expenses necessary to complete the rehousing of the tenant. (4) Payments for rental assistance may be made jointly to the tenant and provider of the replacement dwelling on a monthly basis. D. REIMBURSEMENT FOR TEMPORARY REHOUSING EXPENSES (1) Prior to May 1, 1982, eligible families may qualify for temporary rehousing assistance payments not to exceed one year in duration, or for such reasonable period of time as determined to be necessary by the LAB. After May 1, 1982, temporary rehousing assistance payments will not exceed 120 days. (2) Payments for temporary rehousing expenses shall not exceed the actual and reasonable out-of-pocket ex- penses necessary to facilitate the rehousing of the family in an adequate decent, safe and sanitary dwell- ing, as determined by the LAB. When determined ne- cessary by the LAB, checks for temporary rehousing expenses may be made payable to the family and pro- vider of the temporary housing. The payment and assistance provisions of this policy related to the permanent relocation of any person under the City's Rehabilitation Program terminate May 1, 1982, subject to amendment by the City. 16.