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Res 037-83 2/15/1983RESOLUTION NO. 57-f3' A RESOLUTION AMENDING THE CITY OF WICHITA FALLS COMMUNITY DEVELOPMENT BLOCK GRANT HOUSING REHABILITATION ASSISTANCE PROGRAM WHEREAS, Resolution 2380, August 7, 1979 , established a housing reha- bilitation program for the City of Wichita Falls; and, WHEREAS, Resolution 26-82 amended the existing housing rehabilitation assistance program to include additional programs; and, WHEREAS, increased maximum rehabilitation amounts are needed to compen- sate for the effects of inflation; and, WHEREAS, the administrative procedures and policies need to be revised to increase the understanding of the program. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE CITY OF WICHITA FALLS, THAT: The City of Wichita Falls Housing Rehabilitation Assistance Program is hereby amended in accordance with the attached document titled, "CDBG Housing Rehabilitation Assistance". iri PASSED AND APPROVED THIS THE .> ~'day of t,-/„.c-i 1983. V , Y 0 R ATTEST: 1/0...-/; 17/.4/"Ii C.Y'‘:,,e-/Y1-el• ---' 7 2 CITY CLERK HOUSING REHABILITATION ASSISTANCE PROGRAMS TABLE OF CONTENTS Page No. I. Purpose of the Programs 1 II. Designated Authority/Responsibilities 1 III. Includable Cost for Rehabilitation 1 IV. Eligibility Requirements 1 A. General 1 B. Financial 2 V. CBDG Housing Rehabilitation Assistance Programs 3 A. Rehabilitation Grant Program 3 B. Project SHARE 3 C. Loan Subsidy Program 4 D. Project PAINT Program 4 E. Energy Retrofit Program 5 F. Emergency Repairs 5 VI. Administration 6 A. General 6 B. Receipt of Applications 6 C. Contractor Requirements 7 D. Bidding Procedures 7 E. Contracts 7 F. Security Requirements for Rehabilitation Grants 8 G. Inspection 8 H. Contingency Funds 9 I. Files 9 J. Changes or Waivers 9 i HOUSING REHABILITATION ASSISTANCE PROGRAMS WICHITA FALLS, TEXAS I. PURPOSE OF THE PROGRAMS A. The City of Wichita Falls, Texas , acting by and through its Planning Department, shall provide financial assistance to those applicants of Wichita Falls who reside in those areas specified in the grant appli - cation for Community Development Block Grant funds as approved by the Department of Housing and Urban Development and who meet these eligi - bility criteria specified herein. B. The sole purpose of the financial assistance provided shall be to provide decent, safe and sanitary housing for low and moderate income residents by rehabilitation of existing structures to a condition which brings the structures into compliance with the Standard Housing Code and/or other program requirements as may be approved by the Board of Aldermen of the City of Wichita Falls , Texas. C. This program shall be operated in accordance with applicable rules and regulations of the City of Wichita Falls , the State of Texas and the Department of Housing and Urban Development. II. DESIGNATED AUTHORITY/RESPONSIBILITIES A. The Planning Department of the City of Wichita Falls , Texas, shall administer the housing rehabilitation assistance program. B. The Director of the Planning Department is the approval officer. C. The Community Development Section shall prepare and submit applica- tions for approval on behalf of the applicants. This responsibility shall apply to all housing related programs. III. INCLUDABLE COST FOR CDBG FUNDED REHABILITATION A. CDBG rehabilitation funds shall be used only for those repairs and/or replacements which are necessary to correct actual or incipient violations of the Standard Housing code and/or D. Those repairs and replacements necessary to provide energy efficient qualities specified by the Department of Housing and Urban Development, and/0r C. Those improvements designated by programs as may be approved by the Board of Aldermen of the City of Wichita Falls. IV. ELIGIBILITY REQUIREMENTS FOR CDBG FINANCIAL ASSISTANCE A. GENERAL 1. The applicant must be an individual or family who owns and occupies the residential unit. The applicant will be considered the owner if s/he: 2- a. Is the "owner of record" on the books at the County Court House and has a minimum occupancy in that residential unit of not less than three months. b. Possesses a valid contract for deed which has been or may be filed for record at the Wichita County Court House and which includes reasonable rights of redemption and quiet and peaceable possession of the property, or c. Possesses a life estate which has been, or may be filed for record at the County Court House. 2. To qualify for any CDBG Housing Assistance Program, all county, city and school taxes assessed on a property must have been paid. In 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. 3. The applicant must agree to maintain the rehabilitated dwelling to housing code standards and to annual compliance inspections during the pay back period. 4. The applicant will be required to provide proof of homeowners insurance protection on the unit prior to work proceeding, 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 owner occupied structure must be located in one of the following census tracts : 101, 102, 103, 104, 105, lUh, lO7" 108, 109, 110, 111, 112, 113, 114, 116, or 127. Any of these census tracts , or portion thereof, may be targeted to receive a specific amount of the program funds provided it meets established criteria. 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 continue to be carried during the period the lien is in force. B. FINANCIAL. Community Development Block Grant funds are intended to serve the maximum feasible number of low and moderate income resi - dences who have no other means of financing repairs or improvements. Such funds shall not be made available to any homeowner having sub- stantial financial resources and assets available. 1. In order to qualify for CDBG Housing Rehabilitation Assistance, maximum income limits have been adopted using Department of Housing and Urban Development (HUD) guidelines. Income levels are established and periodically revised by HUD based on median/income and family size. The most current income levels , based on family size, for the City of Wichita Falls shall be used to determine the number of points awarded for income on the Point Assessment Schedule. 3- 2. To ensure that funds expended under this program meet the intent of the CDBG guidelines, no more than fifteen precent (15%) of the total Housing Rehabilitation Assistance funds shall be expended for home-owners with income exceeding the income ceiling established for Section 8 of the National Housing Act. V. CDBG HOUSING REHABILITATION ASSISTANCE PROGRAMS When all eligibility requirements have been met, the applicant shall be entitled to receive CDBG housing rehabilitation assistance under one or more of the following programs. A. REHABILITATION GRANT PROGRAM. CDBG Housing Rehabilitation Assistance in the amount necessary to bring the property to minimum standards and City codes may be provided. The total maximum allowable amount shall not exceed $10,000 and shall be computed using the following criteria. 1. Structure. That amount of the grant to be used for strucutre and mechanical system repairs shall not exceed 50% of the replacement cost of a similar structure or $7,500, whichever is less. 2. Energy. That amount of the grant to be used to provide energy saving devices shuch as insulation, storm door and windows, etc. shall not exceed $1,250. 3. Paint. That amount of the grant used to paint the structure exterior shall not exceed $2,500. 4. When required, additional funds may be provided for improvements to make the structure or facilities accessible for handicapped residents of the residential unit. This amount shall not exceed 750, and will not be included in the maximum grant amount. these special costs may include, but shall not be limited to: a. Widening of doorways. b. Construction of ramps. c. Smoothing floors and adjustment of surfaces. d. Raising or lowering cabinets and shelves. e. Installing special equipment such as braces and supports in critical areas such as bathrooms and bedrooms. B. PROJECT SHARE - SHELF HELP ADJUSTMENT TO REHABILITATION EXPENSES. Project SHARE provides assistance to applicants who are ineligible for a rehabilitation grant because the amount of money required for the necessary rehabilitation exceeds the program limits and/or the applicant has accrued insufficient points on the Point Assessment Schedule. 4- 1. Points. Additional points may be awarded an applicant on a ratio of one (1) point for each $500 worth of labor the applicant is willing to perform to accomplish the rehabilitation of the structure. Labor for computing a point increase or reducing the cost of rehabilitation shall be based on the most current Davis-Bacon Wage Decision. 2. Rehabilitation Cost Reduction. The total amount of rehabilita- tion cost may be reduced by the value of the labor the applicant is willing to perform to accomplish the rehabilitation of the structure. 3. Rehabilitation Grant Conditions. The total maximum allowable amount shall not exceed $10,000 and shall be computed using the same criteria as those established in V.A. above. C. LOAN SUBSIDY PROGRAM. CDBG housing rehabilitation funds may be used to subsidize interest rates for rehabilitation loans secured from private investors such as banks, savings and loans , mortgage companies , etc. The subsidy paid from CMG funds 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 institution and the Planning Department of the City of Wichita Falls. 1. The Planning Department shall assist the applicant to prepare and submit the loan application to the private investor for approval . The private investor shall be given the first position of security by means of a promissory note and mortgage from the applicant to the private investor. 2. The term of the mortgage shall not exceed ten (10) years or a maximum amount of $10,000. 3. CDBG funds may be used in conjunction with a subsidized loan; however, CDBG funds shall not exceed the maximum amount specified in Section V or the amount necessary to reduce the applicant 's monthly housing expense after rehabilitation to 30% of the applicant 's gross monthly income, whichever is less. In such cases, the City 's security requirement shall be secondary to the private institution 's security interest. D. PROJECT PAINT PROGRAM. The Planning Department may grant funds for the Community Development Project PAINT for any eligible applicant whose residence is structurally sound and meets minimum code standards but is in need of exterior painting. Elderly and handicapped households will be given priority in this program. Such funds shall be granted for materials and labor needed to make necessary exterior improvements to prevent deterioration of the structure. 1. The Director of Planning or his designated representative shall review all applications for Project PAINT prior to approving a grant and the decision of the review shall be final . 2. The applicant must meet the eligibility requirements for the CDBG rehabilitation assistance to receive assistance. 5_ 3. The security requirements stated in Section VI shall be required to secure approved grants within this program; however, the term of repayment shall be three (3) years unless this program is used in conjunction with any other CDBG Rehabilitation Program. In such event, the term of the repayment will be five (5) years. 4. No applicant shall be eligible to receive more than one grant for Project PAINT. The total grant amount shall not exceed $2,500. E. ENERGY RETROFIT PROGRAM. The Planning Department has the authority to grant funds for energy retrofit to eligible applicants whose residents is structurally sound and meets the minimum code standards but is in need of weatherization improvements. Elderly and handi - capped households will be given priority in this program. Such funds shall be granted to bring the structure into compliance with energy efficient guidelines as established by the Department of Housing and Urban Development. 1. The Director of Planning or his designated representative shall review all applications for energy retrofit assistance prior to approving a grant and the decision of the review shall be final . 2. The applicant must meet the eligibility requirements for the CDBG rehabilitation assistance to receive energy retrofit assistance. 3. The security requirements stated in Section VI shall be required to secure approved grants within this program; however, the term of repayment shall be three (3) years unless this program is used in conjunction with any other CDBG Rehabilitation Program. In such event, the term of the repayment will be five (5) years. 4. No applicant shall be eligible to receive more than one energy retrofit grant. The total grant amount shall not exceed $1,250. F. EMERGENCY REPAIRS. The emergency repair program is designed to eliminate a specific hazard to the health, safety or welfare of the homeowner, who is financially unable to make the required repairs. It is not specifically designed to meet housing code standards, but rather to correct situations that endanger the health, safety or welfare of the inhabitants , or situations that if not immediately corrected, could be expected to cause additional damage to the structure, resulting in a hazard to the homeowner. 1. The applicant must meet the eligibility requirements for the CDBG rehabilitation assistance to receive emergency repairs. The Department shall have the authority to waive prior verification of eligibility in cases where an immediate danger to health, safety or sanitation exists. The applicant shall be notified that, in the event the verification of eligibility should reveal the applicant does not fall within the requiremeKtS , they shall be required to make full restitution to the Department or a lien will be filed. 2. The security requirements stated in Section VI.F. shall not be required to secure approved grants within this program. 3. No applicant shall be eligible to receive more than one emergency repair in one calendar year nor more than $1,000 per repair. The total amount of the emergency repairs on any structure shall not exceed $3,000 nor shall any family receive more than this amount on any dwelling unit they may purchase. 6— VI. ADMINISTRATION A. GENERAL. The CDBG Housing Rehabilitation 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. The Planning Department will accept applications for verification from owner-occupants of the specified area. At the time of initial applications , the Rehabilitation Specialist shall make a determination of initial eligibility followed by a detailed inspection and application report. The information obtained on the application and rehabilitation guidelines shall determine which program the applicant is eligible for.The Rehabilitation Specialist shall be responsible for the grading of all applications in accordance with the following schedule. Those applicants receiving the highest number of points shall be considered as first priority applications. Point Assessment Schedule Maximum Points 1. INCOME 4 Points 1 - 81-95% of median income 2 - 65-80% of median income 3 - 50% - 65% of median income 4 - less than 50% of median income 2. HOUSING CONDITIONS: 9 Points 9 - Fails to meet Section 8 Housing Quality Standards as described in HUD Form 52580 1 point will be awarded for each failing section except section O which will award 2 points 6 - Meets Section 8 Housing Quality Standards but fails Standard Housing Code (current edition) ; each portion of the electrical , plumbing, structural sections that fails will award 2 points 3. FINANCIAL FEASIBILITY: 5 Points 5 - Can be rehabilitated to Standard Housing Code within program limits. 4. OWNER EFFORTS TO MAINTAIN UNIT: 5 Points 5 - Unit meets Section 307 of the Standard Housing Code for cleanliness and care of premises and section I01. 5 for maintenance. 5. AGE OF OCCUPANT: 2 One point for each five years the head of house- hold exceeds age 60. 6. HANDICAPPED 2 Two points for handicapped 7. FEMALE HEAD OF HOUSEHOLD 1 B. FAMILY SIZE OVER 4 PERSONS 2 TOTAL MAXIMUM POINTS 30 7- C. CONTRACTOR REQUIREMENTS i 1. Contractors eligible to accept contracts to complete rehabilita- tion projects shall be on file with the City of Wichita Falls Building Inspector as a licensed and bonded contractor for the work to be performed. 2. The contractor shall provide the Planning Department evidence of insurance as required by the City of Wichita Falls and the State of Texas. D. BIDDING PROCEDURES 1. The homeowner shall have the right to select any qualified contractor. 2. The homeowner shall have the right to select more than one contractor for competitive bidding. All contractors bidding must meet Department 's requirements to be eligible to do rehabilita- tion. If the homeowner has no preference, two or more con- tractors will be assigned. 3. The Planning Department shall have the option to group approved applications into a single project for competitive bidding. E. CONTRACTS. This section sets forth requirements and procedures with respect to contracts for rehabilitation financed through a rehabilitation grant, and/or a rehabilitation loan. Rehabilitation work shall be undertaken only through a written contract between the contractor and the recipient of the grant or loan. The Planning Department shall assist each applicant in arranging for and obtaining an acceptable contract. 1. The rehabilitation contract will consist of a single document signed by the contractor and accepted by the applicant, only following approval of the rehabilitation 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. Copies of all permits shall be submitted to the Planning Department with all other final papers before disbursement is made. 3. All work performed by the contractor is covered by a one (1) year guarantee. For a period of one year, the homeowner may require the contractor to correct defects and inadequacies in the work performed under the contract. 8- F. SECURITY REQUIREMENTS FOR REHABILITATION GRANTS. A Builder's and Mechanic's Lien Note and Contract to the City of Wichita Falls, Texas, or such Agency as they may designate, shall be required on every CDBG rehabilitation assistance. Said Note and Contract will be properly filed and include the following provisions : 1. Zero percent (0%) interest rate. 2. No payments shall be due from the property owner as long as the property is the legal residence of the recipient. 3. If the property is transferred by sale or the recipient ceases to occupy the property as his legal residence, repayments of the CDBG rehabilitation assistance shall be due and payable imme- diately. Each year, on the anniversary date of the lien, the repayment amount shall be reduced by twenty percent (20%) or one-fifth (1/5) of the total amount of the CDBG rehabilitation assistance until a zero balance is obtained at the end of five 5) years. For example, on a CDBG rehabilition assistance of 7,500, the following repayment schedule would apply: Date of Mortgage Repayment Amount End of Year 1 6,000 End of Year 2 4,500 End of Year 3 3,000 End of Year 4 1,500 End of Year 5 0- 4. In the event of the death of a single person family applicant, the legal heir(s ) to the property shall repay to the City within fifteen (15) days, unless extended, the amount of the unearned assistance as set out in Section VI, 3. A surviving spouse of a joint application or lineal descendants of an applicant who were residents at the time of the application will continue to be afforded the benefit of the terms of the original grant. 5. The City of Wichita Falls or such agency as they may designate will file a Release of Lien upon receipt of payment, or on the anniversary date of the (5th) year of occupancy by the applicant since rehabilitation. G. INSPECTION OF REHABILITATION WORK. This section sets forth the requirements for the inspection of rehabilitation work financed in whole or in part with a rehabilitation grant and/or loan. 1. Responsibility for Making Inspections. The Planning Department shall arrange inspections of construction work. To accomplish this , the Planning Department shall ensure: a. Periodic inspections to determine that the contracted work is completed in accordance with the contract. b. Compliance inspection, as necessary, to assure that the contracted work has been completed in accordance with city codes 9- 2. Final Inspection. Upon completion of the rehabilitation work and receipt of the contractor's invoice containing his certification of satisfactory completion of all the work in accordance with the contract and his warranty, the Planning Department 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 Planning Department 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 Department shall make final payment in accordance with rules and regulations. H. CONTINGENCY FUNDS. At the discretion of the Community Development Section, additional funding not to exceed ten percent /10%\ of the original contract may be utilized as a contingency fund to pay for conditions which were not detected and included in the original contract. I. FILES. The Planning Department 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 information under the Privacy Act and will be released only to authorized governmental agencies and other applicable personnel . J. CHANGES OR WAIVERS. The Board of Aldermen shall have the right to waive, change, modify or revoke all or any part of this plan.