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HomeMy WebLinkAboutRES 84-463 AC- R E S O L U T I O N BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Manager be, and he is hereby , authorized to amend the guidelines for the C .D.B .G. Housing Rehabilitation Loan Program in the form attached hereto as Exhibit "A" . / PASSED BY THE CITY COUNCIL of the City of Beaumont this the / day of � � � � -t��[ 1984 . r Mayor - CITY OF BEALMONT 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 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.111 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 Program 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 l'mited investor 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. DEFINITIO14S The following definitions may appear in this manual in connection with rehabilitation loans and grants: A. CO MUNITY DEVEG011= BI.DCK GRANT (CDBG) 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 Beaunont, Texas, where it has been determined by the City Council that Cormmunity Development Block Grant funds may be spent for rehabilitation loans. C. LOAN PUBLIC AGENCY (LPA) The City of Beaunont'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. (Contd. ) G. MINIMUAI 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. GMgRAL PROPERTY IMPROVEMENT (GPI) Rehabilitation work or improvements not required to make property comply with the Alinimun Housing Code standards, but are desirable to improve life quality and enhance property value. SECTION 3. LOAN ADVISORY HOARD 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 t"o-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 disclosed at these meetings, the Board meetings will not be open to the up blic. However, quarterly and annual status reports will be available to the public and citizen advisory committees. 3. SBCTION 3. A (Cont'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 information within that file will be presented upon request, except for the applicant's name. ) (4) The recommendations are suggestions from the Rehabilitation 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 sufficient 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 terns 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. A (Cont'd.) (9) The Loan Board shall consider applications for deferred payments, on loan originally approved, in extenuating circumstances such as death or illness, 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 services 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 Rehabilitation 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 canply with the City of Beaumont's Mininm 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 application is affected by changes in the program policies. 6. SUCTION 4. (Cont'd.) B. STRATBGY AREAS Are those areas of the City of Beaumont designated by the City Council to be recipients of funds from the Community 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 elgible 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 recieve 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 unsubsidize portion of the rehabilitation loan. D. PROPERTY ELIGIBILITY A rehabilitation loan may be made only to properties meeting 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 Areas. (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 amunt for rehabilitation of a single family unit or duplex units shall not exceed a maximum of $18,000. a. Investor owned single family residence - The investor must agree to rent the renovated single family house to an individual in the low or moderate income category. b. The property must remain rental property for a low or moderate income family for a period of not less than three (3) years. (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 costs. G. REFINANCING EXISTING DEBT SECURED By TFIE PSOPERTY The Rehabilitation Program will not refinance existing debt. The program will accept a second lien position on structures that are to be rehabilitated.. Amended December 18, 1984 8. SECTION 4. (Cont'd. ) Fi. SBaJRITY FOR REHABILITATION MOANS (1) All rehabilitation loans will be secured by a properly 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 will be 57, 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 following purpose: (1) Rehab loan must cover the cost of correcting all work necessary to make the property conform with the City of Beaumont's Minimum Housing Code and applicable Standard Building Codes. (2) Forty percent of the loan may be used to correct incipient defects and make general property improvements. (3) The cost of refinancing existing housing-related indebtedness when applicable. (4) A contigency amount, for unforeseen expense, not to exceed six percent of the rehabilitation contract price. (5) The cost of certain expenses related to the processing of the application and to obtain security of the loan, such as: 9. Amended December. 18, 1981 SECTION 4. (Cont'd. ) a. Title reports b. Attorney certificates c. Recording and other fees d. Appraisals (6) The cost of Energy Conservation Improvements (within guidelines). Y. 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 case of a husband and wife, the death of both). If both parties to this loan shall decease during its term, the heirs would then be required to assume and pay the remaining portion. (2) A breach of any of the terns of the lien. After the terns 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. 10. SECTION 5. (Cont'd. ) (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, thereby 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 LBUTATION Property owners applying for and receiving Cormnznity Developnent Block Grant Rehabilitation Loan funds. Applicants 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 maximum shall reflect this limit increase. 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 Minimum Housing Code and applicable Standard Building Codes. D. ELIGIBLE 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 unit. 11. SECTION 6. REHAB LOAN SUBSIDY SLIDING FEE SCALE: PERCENTAGE Or MAXIAM CHAME BASED ON FAMILY INCOME AND SIZE FAMILY SIZE 10°0 20%'0 3 W 40°0 501/1'6 60°'0 70% 8/o 90j0 10 0 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 90104 9,673 10,242 10,811 11,380 3 71777 8,484 9,191 9,898 10,605 11,312 12,10 12,726 13,433 14,140 4 97295 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 131762 14,745 15,728 16,71-1 17,694 18,677 19,660 N .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$ 43 27,940 9 162885 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 6a RIUTAB. LOAN SUBSIDY SLIDING AMORTIZATION SCALE 12 12 12 12 12 10 10 8 8 6 1011,10 Less* 2G, $ 10,000 Less* 3070 11,000 $ 10,000 Less* 407o 12,000 11,000 $ 10,000 Less* 507o 13,000 12,000 11,000 $ 10,000 Less* c 607o 14,000 13,000 12,000 11,000 $ 10,000 Less* 707o 15,000 14,000 13,000 12,000 11,000 $ 10,000 Less* 807o 16,000 15,000 14,000 13,000 12,000 11,000 $ 10,000 Less* 9070 17,000 16,000 15,000 14,000 13,000 12,000 11,000 $ 10,000 Less* 10070 18,000 17,000 16,000 15,000 14,000 13,000 12,000 11,000 10,000 Less* *Less than $10,000 SECTION 7. RELOCATION The City of Beaunont's relocation policies and guidelines for relocation payment and assistance made to individuals or families displaced by activities that are not established under the Uniform Relocation Act (570.603.a) 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 Appropriateness. In accordance with HUD regulations at 24 CFR 570.603c, 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 home have been determined to be infeasible for rehabilitation. B. HONID0I1NER PAYMEM AND ASS I STANCE (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 judgment of the Relocation Achninistrator. The LAB may refer 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. 13. SECTION 7. (Cont-d. ) (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 requirement, and/or a housing rehabilitation loan would be insufficient to bring the owner-occupant's home into compliance with the Minimun 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 homeowner's property. c. Rehabilitation of dwellings. d. Moving expenses for the owner's personal property. 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 rehailitation payment specified above, and at the LAB's discretion, a homeowner-occupant may be provided a rehabilitation loan necessary to bring the owner's home into compliance with the Minimun Fusing Code Standards. C. TENANT PAWENTS AND ASSISTANCE A tenant who vacates a dwelling following a determination by the LAB that such dwelling is unfeasible 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." (2) Reimbursement for moving expenses necessary to move 14. SECTION 7. C (Cont'd. ) 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. REIlIZBURSH= FOR MIPORARY 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, 1983, 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 expenses necessary to facilitate the rehousing of the family in an adequate, decent, safe and sanitary dwelling, as determined by the LAB. When determined necessary by the LAB, checks for temporary rehousing expenses may be made payable to the family and provider of the temporary housing. The payment and assistance provisions of this policy related to the prenanent relocation of any person under the City's Rehabilitation Program terminate May 1, 1982, subject to amendment by the City. 15. 111MILMI DESCHIl'1'ION USIDENTIAL R.LIIABILITATION O(Y.CSIDE TIIE DESIGNAM) SIRATLXaY AREAS F-Hlding Source Residential Rehabilitation Outside of Designated Caimunity Development Strategy Areas is an eligible activity under the Community Development Block Grant program and is the source of funding for this program. Up to $250,000 will be made available, for this program. Purpose and Intent The primary objective of Title I of the Housing and Comnunit.y Development Act is the development of viable urban c:oi?munities by providing decent housing, suitable living envirorument and expanding economic opportunities, principally for persons of IOW and moderato income. Recognizing this need beyond the desi€;riated Connnini ty Ik-velolxmen t. Block Grant Strategy Areas is the intent of this program, The City of Beaumont's residential rehabilitation program is intended to provide financial assistance to individuals in the form of rehabilita- tion loans, who own or occupy single family dwelling units in designated areas of our city. Recipients are persons in the low and moderate income bracket for the city of Beaumont, senior citizens and hand,i car)lx,.ci persons. The amount of these loans will be based on faunily income and size. A portion of the rehabil.itaticn loan may be subsidized according to the number of dep�mdents in a family and that family's income. 1 . Applicant 1"1.igihi 11 t:� To be eligible Col- a relmhi I i (at.ion .1(),111 , the ,t)>pl icaut_ filiht: (1) own and occupy a si rig Iu C,uni 1y resicll,nce. (2) Owner must hold a general warranty deed and/or a deed of trust to property to be eligible for loan payment subsidy. (3) Owner occupying a Single family dwelling unit purchasing such a property under a general warranty deed and/or deed of trust executed six months prior to submitting an application for rehabi-litation assistance. (4) Owner cannot be delinquent in the payment of mortgage or land contract payments by more than 60 clays (5) Me applicant must evidence adequate ca,,pacity t.o 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) Owner certified for annual loan payment subsidy must provide financial documentation to the Rehabilitation Loan Agency on an annual basis to receive continued loan payment subsidy. (8) Property owner may provide qualified cosigners who will assume responsibility for payment of the rehabilitation loan. 2. y. 1 (9) (hvner's i nc(c)e does to r t, exc(�(,d o f t i ie i t y's median i ncOme adjusted to Y,uni 1 y size. LOW INCCME BY FAMILY SIZE Median Moderate Intone Date Income 80% of Aledian 5(v of Med j an 7/28 $28,800.00 $23,000.00 $14,400.00 CITY WIDE BY FAMILY SILT Number in Low Income Moderate Inex)me Family 50°,o of Median 8f0 of Median- 1 $10,100 $16, 150 2 11,500 18,450 3 12,950 20,750 4 14,400 23,050 5 15,550 24,500 6 16,700 25,900 7 17,850 27,350 8 $19,000 $28,800 3. sc-c:urity tot• I ('Ilabi I i tation Ioalls 1. All rehabilitation loans w I 1 bt. sc;<:urtxl 1>vi it properly executed real estate 1 it�n not.(, and deed of trust in favor of the City of Beaunt)nt. 2. Adequate hazard insurance must be maintained for the duration of the loan. Terms of Loan 1. The interest on rehabilitation loans shall be figured at five percent (5`/o). 2. The maximum term on rehabilitation loans shall not exceed 12 years. Cost Includable in Rehabilitation Loan A rehabilitation loan may include amounts for the following purposes: 1. Rehab loan must cover the cost of correcting al]_ vork necessary to make the property conform with the City of Beaunont's Minimum Housing Code and applicable Standard Building Codes. 2. Thirty percent (30`,0) of the loan may be used to correct incipient defects. 3. The Rehabilitation Program will not refinance existing debt. The program will accept a second lien position on structures that are to be rehabilitated. 4. A contingency amount, for unforseen expense, not to exceed six percent (6'/C')) of the rehabilitation contract price. 4. Amended December 18, 198$L ati 5. '11to cost of certain io Hit, of the application rind to oh( ain scrctit i (y 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). Cancellation of Lien To prevent inappropriate windfall pi,of its f rcxn the resale of the property of the rehabilitation, the City of Beaumont wj11. pace a lien upon the property for the amount of the loan. If any .,f the following events occur during the term of the loan, the rottain- ing balance must be repaid; 1. 'Ihe sale of all or any interest in the subject: 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 shall decease during its term, the heirs would then be required to asstrne and pay the remaining portion. 3. A breach of any of the ternis of the l i Ern. After the terms of the loan have bean met, the lien sha] 1 be cancelled. 5. Property Eligi_biIiLy A rehabilitation loan wilt be mule only to i 1W, the following requirements: 1. Is in need of rehabilitation work in order to comply with minimum housing codes. 2. Owner occupied single family dwelling unit. 3. Appraised value exclusive of land must exceed $5,000. 4. All code violations must be correctable by primary loan. Maximum Loan Limitations 1. The maximum amount for rehabilitation of a single family dwelling unit shall not exceed a maximum of $15,000 of which $1,000 shall be for energy conservation. 2. Loan funds will be used to correct only code violations and incipient violations. Refinancing Fisting Debt Secured by Property A rehabilitation loan may include, within the applicable loam limits, an amount to refinance existing debts secured by the property. The requirement for refinancing is that 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. f>. Amended December 18, 19844- Energy Conservation Me of 1. Expand the scope of the rehab loan progrwmm to J nc l udk, energy conservation repairs. 2. Provide additional funds to include energ;, conserva- tion measures in all rehibilitaLion (x)ntracts over and above the statutory loan limits. 3. Offer technical assistance to homeowners about ways they can make their home more energy-efficient, aid there in prioritizing their energy conservation needs. 4. Offer property owners an avenue by which to lower their utility bills and total housing expenses, thereby increasing their ability to repay their loan. 5. Increase the ability to make expenditures under the Community Development Block Grant Progr-.un for the benefit of low and moderate income families. 7. Method of selection 1. An application period for rehiibi 1 i Cation loa►i.S vvi I 1 bf� for 30 clays after opening period has been annOLUICOd. After this period, no other application will be accepted or considered until another opening period is announced. 2. After the closing date, application will be screened and those meeting the eligibility criteria will he processed by; a. An inspection will be made to determine code violations. b. A cost estimate will be prepared based on those violations. c. Those applicants with repair estimates which exceed the maximum loan amount by five percent (50) will be rejected and notified. 3. Final selection of those homeowners who may be provided a rehabilitation loan will be based on a need index. The need index will reflect points awarded for factors of need including repairs to the home. 8. 6 NlaD 1M)EX Points 1. Elderly (tic-act of household), 62 and over (20) 2. Handicapped (20) 3. Single head of household with pre-school age children (20) 4. Plumbing deficiencies (20) a. No hot water heater (10) b. Leaking gas lines ( 15) 5. Electrical deficiencies (20) a. Extreme code violation (15) 6. Structural deficiencies (30) a. Roof replacement (10) b. Support defects (10) Applicants with the highest needs shall be considered first. Loan jgprova l Once a number of applicants are selected for further processing, their property will be appraised, specifications written, and bids for work will be taken and then the final loan packages will be presented for review and approval by the Loan Advisory Board (LAB). 0.