Loading...
HomeMy WebLinkAboutMINUTES - 12042012 - C.61RECOMMENDATION(S): APPROVE and AUTHORIZE the Director of Conservation and Development, or designee, to execute an agreement for $262,652 with the City of Concord for the County to administer Concord’s Housing Rehabilitation Loan and Grant Program using City Community Development Block Grant (CDBG) funds for the term of December 4, 2012 through June 30, 2013. FISCAL IMPACT: No fiscal impact to the General Fund, all funds are City of Concord CDBG – Federal Funds. BACKGROUND: The County Department of Conservation and Development administers a housing rehabilitation loan program through its Neighborhood Preservation Program. The Program offers low interest loans and grants to low-income households who own and occupy their home. The loan recipients qualify for loan assistance under County guidelines and U.S. Department of Housing and Urban Development (HUD) regulations. The City of Concord wishes to enter into a contract with the County NPP to administer its Housing Rehabilitation Loan Program. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 12/04/2012 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYES 5 NOES ____ ABSENT ____ ABSTAIN ____ RECUSE ____ Contact: Kara Douglas, 674-7880 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: December 4, 2012 David J. Twa, County Administrator and Clerk of the Board of Supervisors By: Carrie Del Bonta, Deputy cc: C. 61 To:Board of Supervisors From:Catherine Kutsuris, Conservation & Development Date:December 4, 2012 Contra Costa County Subject:AGREEMENT BETWEEN CONTRA COSTA COUNTY AND THE CITY OF CONCORD FOR THE HOUSING REHABILITATION LOAN AND GRANT PROGRAM BACKGROUND: (CONT'D) The program offers loans and grants to homeowners who can not obtain conventional financing. Funds are used to eliminate conditions that are detrimental to health and safety, and for repairs such as roofing, electrical, plumbing, mechanical, termite repairs, lead paint mitigation, disabled accessibility, interior and exterior painting and other necessary deferred maintenance repairs. The program promotes the stabilization and enhancement of older neighborhoods in order to encourage a sense of pride in the neighborhood. The City receives CDBG funds from HUD and has approved and authorized the expenditure of $262,652 in CDBG funds for this program. The City will pay the County a minimum of $1,500 for each loan and grant up to a maximum of 20 percent of the loan or grant amount as compensation for the services provided by the County to the City of Concord. CONSEQUENCE OF NEGATIVE ACTION: If the Board of Supervisors does not approve this contract, the Department will be unable to assist the City of Concord with their program which provides grants and loans to low income property owners. CHILDREN'S IMPACT STATEMENT: N/A Exhibit A City of Concord Community and Economic Development Department Housing Program Housing Rehabilitation Loan and Grant Program - Administrative Guidelines I. Introduction A. The Housing Rehabilitation Program is funded with Community Development Block Grant (CDBG) funds. B. The City of Concord will enter into a contract with Contra Costa County Neighborhood Preservation Program to administer the City’s Housing Rehabilitation Loan and Grant Programs. II. Objectives A. The intent of the City’s Housing Rehabilitation Loan and Grant Program is to provide low-interest rehabilitation loans and emergency grants to low-income homeowners in the City of Concord for the purpose of improving their homes. B. The program is designed to achieve the following goals: ƒ Upgrade substandard single-family owner-occupied housing. ƒ Contribute to the revitalization of housing and assist in stabilizing challenged neighborhoods. ƒ Prevent displacement of lower income families. C. Eliminate conditions that are detrimental to health, safety and public welfare by rehabilitating housing that does not meet building or housing codes. D. Stabilize and enhance older neighborhoods to encourage future investment from the private sector and from other public funds and programs. III. Rehabilitation Loan and Grant Program Overview The Rehabilitation Loan and Grant Program consists of the Single Family Loan Program and the Rehabilitation Grant Program including: Mobile Home Grants, Emergency Repair and Accessibility Grants, Weatherization and Home Security Grants for Seniors, and Lead-based Paint Abatement Grants. A project must require rehabilitation based on Housing Rehabilitation Loan and Grant Program Administrative Guidelines pertaining to Contra Costa County Neighborhood Preservation Specifications and Standards, local codes, local rehabilitation standards, zoning ordinances, and cost effective energy conservation and effective standards. Housing Conservation Program Administrative Guidelines 2 September 26, 2012 Eligibility for the Housing Rehabilitation Programs is generally the same for each of the separate loan and grant programs with household income as a primary eligibility factor. Table 1, 2012 Contra Costa County Median Income, provides an overview of the income categories. For example, an applicant for the Rehabilitation Loan Program must be at or below 80 percent of the Area Median Income (for CDBG, this is referred to as moderate income with 50 percent referred to as Low Income). Based on Table 1, below, a family of four applying for a Rehabilitation Loan is eligible if the combined household income is at or below $65,350, annually. In addition to income, there are guidelines specific to each of the separate Housing Programs, providing instructions for the management of the programs and distribution of the program funds. A homeowner is eligible for one loan or grant in a twelve (12) month period. A. Single Family Rehabilitation Loans 1. The City’s Single Family Home Rehabilitation Loan makes available to qualified residents Low Interest Rate (3 percent) Home Repair Loans to assist homeowners with major repair work on their homes under current guidelines. This loan program provides loans, up to a total maximum of $55,000, for owner-occupants of single family homes with incomes that are at or below 80 percent of the area median income. The $55,000 loan maximum includes contingencies and loan fees. 2. Loan Parameters a. Loan interest rate is fixed at 3 percent. b. Loans are repaid with regular monthly installments. The maximum loan term is 15 years. There is no pre-payment penalty. c. Deferred payment loans require one large payment due upon maturity of specified payment date or upon sale or transfer of title, whichever is earlier. Deferred payment loans are available to senior (age 60+) and disabled homeowners. Deferred payment loans require the approval of the City Community Grants Manager. d. The maximum loan to value ratio may not exceed 85 percent. This includes the City’s loan and all loans on the house. This ratio is based upon the after- rehabilitation value. e. Loans are secured with a Deed of Trust on the property. All existing liens will be evaluated to determine if the property can be used as security for the loan. f. Work must be completed by State licensed, insured contractors or, in some cases, the homeowner. Work is limited to eligible loan improvements, as described in Attachment 1. g. Loans funded under this program are not assumable, unless specifically indicated in the loan promissory note and/or deed of trust. h. A credit check, employment and income verification, title search and verification of homeowners insurance are required as part of the loan application. Loan fees may range from $375 to $450. These fees can be included as part of the loan. i. Properties to receive repair must be located within the incorporated boundaries of the City of Concord. Housing Conservation Program Administrative Guidelines 3 September 26, 2012 j. The annual family income for eligibility must be no more than 80 percent of Area Median Income levels, as noted in the bold line of Table 1. k. In addition to annual income, household assets must not exceed $20,000 for a single householder or $30,000 for a household of two or more. Assets are defined as: savings accounts, time certificates of deposit, equity in stocks or bonds, real property, or any other capital investments. Assets exclude your principal residence and other personal effects such as furniture, appliances and automobiles. Table 1 2012 Contra Costa County Median Income Number of Persons in Household Income Category 1 2 3 4 5 6 7 Extremely Low (30 percent) $19,650 $22,450 $25,250 $28,050 $30,300 $32,550 $34,800 Low Income (50 percent) $32,750 $37,400 $42,100 $46,750 $50,500 $54,250 $58,000 Mod. Income (80 percent) $45,750 $52,300 $58,850 $65,350 $70,600 $75,850 $81,050 Median Income $65,500 $74,800 $84,200 $93,500 $101,000 $108,500 $116,000 Source: Contra Costa County Median Income, as determined by the Department of Housing and Urban Development (HUD). 3. Repair work shall focus on: a. The correction of health and safety code items; b. Repair or replacement of roofs, electrical, plumbing; c. Foundations; d. Bath and kitchen repairs; and/or e. Related necessary repairs not to exceed 10 percent of the total repair. Work performed with proceeds from a loan or grant is to be completed in the following order of priority: First, Priority A; second, Priority B; and third, Priority C. Each category of priority is described in Attachment 1 hereto. No more than 10 percent of a loan may be used to fund work that is characterized as Category C. 4. Loans and grants shall not be combined, except in the case of Lead-based Paint Abatement Grants, which may be combined with a loan. In such instances, the maximum amount would be equivalent to the loan ($55,000) plus the amount of the lead abatement (typically up to $22,500). 5. Once a homeowner receives a loan, the homeowner enters into a contract with a contractor to complete the rehabilitation project. The City/County is not a party to these contracts. As a condition of receiving a loan, a homeowner must agree to allow the City/County to enter the home and inspect to determine whether the rehabilitation work complies with building, housing and safety codes. Housing Conservation Program Administrative Guidelines 4 September 26, 2012 6. A $75.00 loan origination fee will be charged the borrower by the City. In addition, title, lien, registration appraisal, and related administrative costs shall be charged by the City. These fees may be paid with loan proceeds. The amount of such fees will be adjusted annually in the Fees and Charges Resolution. 7. Loan amendments may be allowed on a case by case basis. Loan amendments occur when an initial loan has been made for less than the maximum amount and at a later date a second request is made for a Priority A Repair (mandatory code, health and safety item). The loan will be updated to the additional amount and interest will begin accruing on the larger amount. 8. Deferred loans are due upon sale or transfer of the home or upon death of the home owner, through subsequent sale of the home by the executor. The County currently collects installment loans and forward funds to the City, semi-annually. B. Mobile Home Rehabilitation Grants Mobile Home Rehabilitation Grants are made available to qualified residents to assist homeowners with major repair work on their homes under current guidelines. This grant program provides grants of a minimum of $2,000 up to a total maximum of $10,000, for owner-occupants of mobile homes with families of up to 80 percent of the area median income. C. Emergency Repair and Accessibility Grants 1. Emergency Repair and Accessibility Grants are made available to qualified residents to assist single family homeowners with major repair work on their homes under current guidelines. Larger grants are typically provided to those homeowners requiring work to be performed, but who are unable to meet the 85 percent loan to value ratio. This program provides grants of a minimum of $2,000 up to a total maximum of $10,000, for owner-occupants of single family homes and mobile homes with families of up to 80 percent of the area median income. 2. Repair work shall focus on: a. Roofs, heating, plumbing and electrical work; b. Replacement of damaged water heaters; c. Construction of ramps, railings, grab bars, etc. for handicapped accessibility; & d. Other related repairs as deemed necessary by the Housing Program. D. Weatherization and Home Security Grants for Seniors 1. Weatherization and Home Security Grants for Seniors (age 60 years and older) are made available to qualified residents to assist homeowners with minor repair work on their homes under current guidelines. This program provides grants of a minimum of $2,000 up to a total maximum of $5,000, for owner-occupants of Housing Conservation Program Administrative Guidelines 5 September 26, 2012 single family homes and mobile homes with families of up to 80 percent of the area median income. 2. Repair work shall focus on: a. Insulation for attics and walls; b. Weatherstripping for doors and windows; c. Security lighting; d. Security doors and security screens; e. Energy efficient windows; f. Smoke detectors and carbon monoxide detectors; & g. Other related repairs as deemed necessary by the Housing Program. E. Lead Based Paint Abatement Grants 1. Lead-Based Paint Abatement Grants are made available to qualified residents to assist homeowners with repair work on their homes under current guidelines, when the homes have tested positive for lead. This program provides grants, up to a maximum of $22,500, for owner-occupants of single family homes with incomes that are at or below 80 percent of the area median income. The grant maximum includes contingencies and administrative fees. 2. The only loan and grant that may be combined is a Rehabilitation Loan and a Lead-Based Paint Grant. In this situation, the maximum loan amount may exceed the $55,000 maximum by the amount of the Lead-Based Paint related work. IV. Subordinations for Refinance Overview – (City) The following documents must be submitted for review prior to approval of the subordination of the loan, as necessary to accommodate a refinance of the loan. The loan processor for the subject bank shall submit the required documents and staff will review materials and make a determination on the subordination. These include: • A letter from the new lender requesting subordination. • A copy of the new loan application to determine purpose of the re-written loan. • A copy of the new title report and appraisal. • No additional “seconds” or equity line. • No cash out to owner. (Please note, amount borrowed must be exact amount due on loan to be refinanced, no loan proceeds may go to the homeowner.)  • First plus City's second cannot be more than 85 percent of property value unless borrower has a net monthly savings on housing costs.  • A copy of the closing settlement statement. • Property insurance with City as additional insured. Timeline for review and signing of the subordination agreements is approximately 2-3 weeks for review and approval. Housing Conservation Program Administrative Guidelines 6 September 26, 2012 V. Administration of Housing Rehabilitation Loan and Grant Program The County’s Neighborhood Preservation Program (NPP) performs all the functions necessary to make housing rehabilitation loans and grants to low and moderate-income owner occupants of single family homes within the City of Concord. The City funds the program and coordinates with County NPP on approval of deferred loans, invoices and coordination of check payments back to County NPP for distribution to contractors. The respective obligations of the City and the County are set forth in the CDBG Loan Administration Agreement dated as of July 1, 2012 between the City and the County. Attachment “1” Page 1 of 3 PRIORITY A - MANDATORY CODE, HEALTH, SAFETY All uniform building, mechanical, electrical and plumbing code items are Priority A. In addition, all Title 24, energy conservation, ADA Compliance, and health & safety violations are categorized as Priority A. Below Priority A improvements: • Electrical • Plumbing • Roof; replacement must be 30-year comp. roof (wood-shake roofs are considered ineligible improvements) • Foundation work • Structural improvements and repairs • Mold and mildew remediation • Lead Paint remediation • Repair or replace leaking and/or broken windows • Permanent and like-for-like replacement of appliances when appliances are nonfunctional • Carpet/flooring based on standard like-for-like replacement with no exceptions on flooring/carpet upgrades; excludes wall-to-wall unless the entire wall-to-wall area is shown to be code, safety, and/or health violation • Failing retaining walls • Toilets • HVAC related units (must comply with 92% EE) • Exterior and interior door replacements when existing doors are damaged • Dry rot • Termite damage and/or extermination • Smoke detectors • Garage doors – repair or replace when damaged, or cited as a CMC violation • Interior/exterior paint when damaged or cited as a CMC violation • Driveways or walkways when damaged and a hazard, or cited as a CMC violation • Exhaust fans • Asbestos removal • Removal of trees and debris when dangerous, or cited as a CMC violation Attachment “1” Page 2 of 3 PRIORITY B – IMPORTANT TO HEALTH & SAFETY, POSSIBLE CODE VIOLATION • Landscaping and Exterior Hardscapes (the following exterior improvements will be considered Priority B only if the existing condition is considered a code violation or if the existing condition poses a potential safety or health issue. For example, tree roots causing lifting of walkway would constitute Priority B improvements requiring removal of the tree, if deemed necessary, and patching of the walkway o Front yard irrigation o Front yard sod o Driveways and/or walkways o Removal of trees and debris o Fencing o Masonry • Permanent and like-for-like replacement of appliances when existing appliances are nonfunctional • Carpet/flooring - based on standard like-for-like replacement with no exceptions on flooring/carpet upgrades; excludes wall-to-wall unless the entire wall-to-wall area is shown to be code, safety, and/or health violation • Garage door repair or replacement when damaged or a violation of CMC. • HVAC related units (92% EE) when existing unit is damaged or nonfunctional • Interior/exterior paint (unless Lead-Based Paint which constitutes Priority A); an example of this item would be if the paint is peeling and constitutes code violation (note that any interior/exterior paint included in a Rehabilitation Loan includes only one color, the loan does not include different color in different rooms • Window replacement where existing windows are damaged or leaking • Interior/exterior door(s) when damaged or missing • Drywall/Siding when damaged or damaged during other work. • Handrails, landings, steps when existing is damaged or dangerous, or as part of accessibility improvements Attachment “1” Page 3 of 3 PRIORITY C – GENERAL PROPERTY IMPROVEMENTS Items included in Priority C may not exceed 10% of the loan amount and these items must show a direct nexus to the rehabilitation work. For example, a resident may not replace their garage door as Priority C work, if the rehabilitation loan is based on improvements related to dry rot and water damage in the kitchen. • Wall texturing – when associated with interior painting and repair of damaged interior walls • Gutters/downspouts • Installation of security doors • Installation of double-paned windows • Carpet/flooring • Garage door repair/replacement • Repair or replacement of interior/exterior doors • Permanent and like-for-like replacement of appliances when existing appliances are nonfunctional • Interior/exterior paint (unless Lead-Based Paint) • Landscaping and hardscape o Front yard ground cover o Front yard drought-resistant vegetation o Hardscapes with brush finish or equivalent value o Front yard irrigation o Removal of trees and debris o Repair of driveways or walkways