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Res 129-84 7/3/1984RESOLUTION NO. /4' _j L A RESOLUTION APPROVING A RENTAL REHABILITATION GRANT PROGRAM UNDER THE HOUSING AND URBAN-RURAL RECOVERY ACT OF 1983 WHEREAS, the City of Wichita Falls, Texas has received notice of funding for a housing program to assist in the rehabilitation of rental units, under the Housing and Urban-Rural Recovery Act of 1983, and, WHEREAS, the application for such funding includes the establishment and operation of a Rental Rehabilitation Program as outlined in the attached program description, and, WHEREAS, there is a need for such a program in the City of Wichita Falls, NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS THAT: The Rental Rehabilitation Grant Program is hereby endorsed and approved and the City Manager is authorized to execute an agreement with the Department of Housing and Urban Development for the program funding. PASSED AND APPROVED THIS THE J./c1_, day of 1984. s K. AYOR ATTEST: i.e //L _/ RENTAL REHABILITATION GRANT PROGRAM FOR THE CITY OF WICHITA FALLS, TEXAS I. PURPOSE OF THE PROGRAM A. The City of Wichita Falls, Texas, acting by and through the Housing Division of the Planning Department shall provide financial assistance to those applicants who meet the eligibility criteria specified herein. B. The Primary Goal of the financial assistance given under this program is to provide decent, safe, sanitary and affordable rental housing for low income persons. This goal will be met by the rehabilitation of existing substandard rental units to a condition which brings the structures into compliance with the Standard Housing Code and the requirements of the U.S. Department of Housing and Urban Development (HUD) . C. The program shall conform with the Code of Federal Regulations, 24 CFR Part 511 ; applicable rules and regulations of the State of Texas and the City of Wichita Falls. D. The number of units to be rehabilitated each year will be determined by the funding levels available from HUD. II. DESIGNATED AUTHORITY/RESPONSIBILITIES A. The Housing Division of the Planning Department of the City of Wichita Falls, Texas, shall administer the rental rehabilitation grant program. B. The Community Development Administrator is the approval officer. C. The Housing Division shall assist in the preparation of applications for approval on behalf of the applicants. This responsibility shall apply to all housing related programs. III. ELIGIBLE PROJECTS A. These Rental Rehabilitation Grant funds shall be used only for rental residential rehabilitation. When commercial or owner-occupied use occur in the same structure, only that portion which has a rental residential use can be used to determine eligible rehabilitation costs. At least fifty-one percent 51%) of the structure must be for residential use, except in the case of a owner-occupied duplex then at least fifty percent (50%) of the rentable floor space must be renter occupied. Page 2 of 10 Pages Agenda Item No. 9.L B. Funds shall be used only in neighborhoods (as defined by the Census Bureau in the Neighborhood StatisticalProgram) or Block Groups in which at least fifty-one percent (S1Y_) of the residents are at or below eightypercent (80 ) of the Metropolitan Statistical Area'sNSA) median income. C. The units, after rehabilitation, must meet the Standard Housing Code and/or Section 8 Minimum Housing QualityStandards (whichever is higher) and be reasonably expected to remain affordable to low income families. Units that can be rented at or below the Fair Market Rent of Section 8 will be considered as being affordabletolowincomefamilies. D. The maximum number of units at one project site shall not exceed nine (9) units. E. To ensure funds are used to assist larger families, not more than thirty percent (30 ) of the units rehabilitated shall be less than three (3) bedroom units. IV. ELIGIBLE COSTS A. Only those actual rehabilitation costs needed to correct substandard conditions; to repair major systems (i . e. plumbing, heating and electrical ) in danger of failure;to provide energy-related repairs and improvements; and improvements to permit the use of the units by elderly orhandicappedpersonsshallbeusedtodeterminetheamount of assistance. B. Additional funding may be provided for other costs as described in Section 511 . 10 (g) (iii ) of CFR 24. C. Maximum amounts of grant funds shall not exceed fifty percent50%) of the actual rehabilitation costs needed to correct or add the items described in "A" above or $5,000.00 average per unit whichever is less. D. Minimum amount of grant funds shall not be less than $600. 00 per unit. V. ELIGIBILITY REQUIREMENTS FOR ASSISTANCE A. General 1. The applicant must be the owner of the property and have the right to enter into a contract for rehabilitation of the property. 2. To qualify for assistance, all county, city and school taxes assessed on the property must have been paid. In Page 3 of 10 Pages Agenda Item No. 9.f. the event a delinquency is discovered, the applicant will be notified and afforded a thirty (30) day- period to pay delinquent taxes. If the delinquent taxes remain unpaid thirty (30) days from the date of notification, the application will be deemed ineligible for assistance until such time as all delinquent taxes are paid. 3. The applicant must agree to maintain the rehabilitated dwelling to housing code standards and agree to annual compliance inspections during the period the lien is in force. 4. The applicant will be required to provide proof of insurance protection on the unit prior to work pro- ceeding, as required in the Builder 's and Mechanic 's Lien Contract. Insurance must continue to be carried during the period of time the lien is in force. 5. The structure must be located in one of the shaded areas on the map on the last page of these guidelines. 6. Chapter 15 1/2, FLOOD DAMAGE PREVENTION, of the City of Wichita Falls Code of Ordinances shall be complied with for any structures that lie within the Flood Plain. Flood Plain Insurance must be obtained and continued to be carried during the period the lien is in force. 7. To be eligible the structure must be capable of being rehabilitated up to Housing Code Standards within the amount of funds approved in Section IV. B. Financial - The applicant must be able to establish that necessary funds can be obligated to pay for that portion of the rehabilitation not covered by the grant funds. VI. RENTAL REHABILIATION GRANT PROGRAMS When all eligibility requirements have been met, the applicant shall be entitled to receive rental rehabilitation grant assis- tance under one or more of the following programs. A. REHABILITATION GRANT PROGRAM 1 . The maximum amount from grant funds shall not exceed an average of 45,000.00 per unit, subject to fifty percent (507.) rule (Section IV, C) and $45,000. 00 per 2. When required, additional funds from CDBG Housing Rehabilitation Assistance Progam may be approved to provide facilities for elderly and handicapped residents. This amount shall not exceed S5OO. O0 per unit and will not be included in the maximum allowable amount under the rental rehabilitation grant amount. Page 4 of 10 Pages Agenda Item No. 9.f. B. LOAN SUBSIDY PROGRAM - Rehabilitation funds may be used to subsidize interest rates for rehabilitation loans secured from private sources such as banks, savings and loans, mortgage companies, etc. The subsidy paid shall be restricted to payments necessary to reduce the interest rate from the current market rate to a more favorable rate to be determined by the private lending institute and City of Wichita Falls. 1. The Housing Division may assist the applicant to prepare and submit the loan application to the private source for approval . The private investment source shall be given the first position of security by means of a promisory note and mortgage from the applicant to them. . 2. Funds used in conjunction with a subsidized loan shall not exceed the maximum amount specified in Section VI. VII. ADMINISTRATION A. GENERAL - The Rental Rehabilitation Grant Program is designed as a self-referral program; however, there shall be a continuous outreach effort in such areas as neighborhood meetings and through the local news media. B. RECEIPT OF APPLICATIONS 1 . The Housing Division will accept applications for verifi- cation from owners with units in the specified area At the time of initial applications, the Rehabilitation Specialist shall make a determination of initial eligi- bility followed by a detailed inspection and application report. The information obtained on the application and rehabilitation guidelines shall determine if any priority issues are being addressed. 2. Applications will be handled on a first come first serve basis as long as the basic eligibility requirements are met. Units for large low-income families will have top priority. Those structures with the most uroent need i . e. defective roof , ma ior- heating or plumbing failure) will be given priority. 3. After initial determination , the applicant will present a Fro-forma and financial statement to establish the capability to meet their portion of the rehabilitation cost. C. CONTRACTOR REQUIREMENTS 1 . Contractors eligible to accept completecontr_ts to complete rehabilitation projects shall be on file with the City of Wichita Falls Building Inspector as a licensed and Page 5 of 10 Pages Agenda Item No. 9.f. bonded contractor for the work to be performed. 2. The contractor shall provide the Housing Division evidence of insurance as required by the City of Wichita Falls and the State of Texas. D. BIDDING PROCEDURES 1 . The owner shall select qualified contactors of their choice for competitive bidding. All contractors' bidding must meet the requirements in "C" (above) to be eligible to do rehabilitation. 2. If the owner has no preference, two or more contractors will be assigned from the list of approved contractors on file in the Housing Division. 3. If all bids received exceed the amount authorized, the work write-up will be reviewed to determine if any items can be deleted or changed to reduce the amount. If the cost can be reduced, the same contractors will be asked to rebid on the revised write-up. F. CONTRACTS - Rehabilitation work shall be undertaken only through a written contract between the contractor and the recipient of the grant or loan. The Housing Division shall assist each applicant in arranging for and obtaining an acceptable contract. 1 . The rental rehabilitation contract will consist of a single docuement signed by the contractor and accepted by the applicant, only following approval of the rehabili- tation grant and/or loan. It shall contain a bid and proposal by the contractor, and the general conditions as well as the specifications for the work to be performed. 2. The contractor shall obtain all permits required by the City of Wichita Falls, and shall require the same of his sub-contractors. 3. All work performed by the contractor must be covered by a one (1 ) year warranty. For a period of one year, the owner may require the contractor to correct defects and inadequacies in the work performed under the contract. G. SECURITY REQUIREMENTS FOR REHABILITATION GRANTS - A Builder 's and Mechanic 's Lien Note and Contract to the City of WichitaFalls, Texas; or such Agency as they may designate, shall be required on every rental rehabilitation grant. Said Contract will be properly filed and include the following provisions: Page 6 of 10 Pages Agenda Item No. 9.f. 1 . Zero percent (0%) interest rate. 2. No payments shall be due from the property owner as longastheowner (1) does not discriminate against tenants orprospectivetenantsonthebasisoftheirreceiptof , oreligibilityforhousingassistancepayments, (2) does notdiscriminateagainstfamilieswithminorchildren, and (3)the units are not converted to condominium or cooperativeownership. 3. If the property is transferred by sale or the owner failstocomplywithItem2above, repayment of the unearned portion of the rehabilitation grant shall be due and payableimmediately. Each year, on the anniversary date of the lien,the repayment amount shall be reduced by ten percent (lo ) ofthetotalamountoftherehabilitationgrantuntilazerobalanceisobtainedattheendoftheten (10) years. 4. fl surviving owner of a joint owner application will continue to be afforded the benefit of the terms of theoriginalgrant. S. In the event of the death of a single person applicant,the legal heir (s) to the property shall be offered therighttoenterintoanagreementwiththeCityofWichitaFallstocarryontheexistingagreement. 6. The City of Wichita Falls or such agency as they maydesignatewillfileaReleaseofLienuponreceiptofpayment , or on the anniversary dateY of the tenth yearsincerehabilitation. H. INSPECTION OF REHABILITATION WORK - This section sets forththerequirementsfortheinspectionofrehabilitationworkfinancedinwholeorinpartwitharehabilitationgrantand/or loan. 1 . Responsibility ='` Making Inspections.ng ire HousingDivisionshallcoordinateinspectionsofconstructionwork. To accomplish this, the Hous F nc Division shallensurethat: a. Periodic inspections to deterimi i lie that the con ILI Cl! Jworkiscompletedinaccordancewiththecontract. b. Compliance inspection, as necessary, thatoassure '-the contracted work has been giant with city co.:,pl eted i n accordancewithciLycodedLcodes. TheTte Con Tractor- will contact theBuildinginspectionofficeforrequiredinspectionsofpermittedwork. 2. Final Inspection - Upon completion of the rehabilitationworkandreceiptofthecontractor 's certification of satisfactory completion of all the work in accordance Page 7 of 10 Pages Agenda Item No. 9.f. with the contract, the Contractor shall arrange for inspection of the completed work. 3. Making Final Payment - When the final inspection determines that the work has been satisfactorily completed in accordance with the contract, the Housing Division shall obtain from the contractor a Release of Liens and a copy of each warranty due the applicant for the work. After receipt of a Release of Liens, including releases from all subcontractors and suppliers and a copy of each warranty, the Division shall make final payment. I. CONTINGENCY FUNDS - At the discretion of the Community Development .Administrator, additional funding not to exceed ten percent (10 ) of the total allowable amount may be utilized as a contingency fund to pay for condi- tions which were not detected and included in the original contract. J. FILES - The Housing Division shall maintain accurate files and records on each applicant and all documentation pertinent to the case shall be included. Personal data on individuals will be considered confidential informa- tion under the Privacy Act and will be released only to authorized government agencies and other applicable personnel . K. CHANGES OR WAIVERS - The City Manager shall have the right to waive, change, or modify all or any part of this plan provided such changes do not conflict with U. S. Department of Housing and Urban Development regulations and guidelines. 1983 CDBG HOUSING REHABILITATION ASSISTANCE INCOME LIMITS ESTIMATED INCOME BY FAMILY SIZE Percentage of Median Income 1 2 3 4 5 6 7 8 100 17,100 19,500 22,000 24,400 *25,950 *27,450 *28,950 *30,500 • 95 16,250 18,500 20,900 23,200 *24,600 *26,100 *27,500 *29,000 80 13,650 15,600 17,550 19,500 20,750 21,950 23,200 24,400 65 11,100 12,700 14,300 15,850 •17,000 *18,250 *19,200 *20,250 50 8,550 9,750 11,000 12,200 13,200 14,150 15,150 16,100 Revised by HUD April 20, 1993 HUD computes all income data based on statistical projections of data for a family of four. The figures used for 5 to 8# sized families will match HUD data only at 50% and 80% levels. Page 8 of 10 Pages, Agenda Item No. 9.f. 1`1 i Il 1 swcl.jrto u row. use I A" A. . l•-,--.-.-- 1- yW,----M RINI 32-I luu: 1 11fA74*-r lI w. R®crat + u.... i• 1 I 31.9' 32 2 I j' t ,I r A 3__....... • • YI lF Q 31.2 •_` q t L.f.'''\,,.. ILL-(/ r' Y r 1 y i i.ri 3119 ice-`.c.I j 3b-1 1#-s t AI 1 - 29.1 r¢f .I'. ` IIt:s c, 1. e ` 4. 1. V -•` 10-1 Ia•3O 1011p,...... ".ter r': y I. t,.." w 1I / / w . afe !• 1 ti. t-.:3 t i I'i 79-i s 10.3 [(sue 2 2_! Ir weIli'. 19.. 3 r: y. s 1 I 2B•Z t 1 r s + 0,111,,t...N . . I I 1 1 2fi,°L r i4 71 ii7° 14 2 I. J la-I ' w. I Imo"--+ „ y 26.- i t j 2 1 2?-4 I/-I I- i Eta s:7•-,i9'r- 6 r 20 I 1 25•`4 ..war I itio00000 Ii -- _— 24.3 I '''...>))_ f l / pa I' a,el.l IS I 4,,,, ./... 2..2 . e# „,..._=, -, i , Yt1 } y;; 212 tom I 16.9 C 1 i I' — :,,,,?\.1.,_...4- 7.:...' I ['3. ', r 18-1+ , 1,8-2 r •k :,..22.9 la: ; ' i sr.- I.. r,1 1 111'.1-. 77 --''"' 1 I 23 2 - 22.9 I 2 1 r 2-%N yTI 7) CENSUS BLOCK MAP 1983 Page 9 of 10 Pages Target Sectors Agenda Item No. 9.f.