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Res 026-82 2/2/1982RESOLUTION NO. ,g-Avv A RESOLUTION AMENDING THE CITY OF WICHITA FALLS COMMUNITY DEVELOPMENT BLOCK GRANT HOUSING REHABILITATION ASSISTANCE PROGRAM WHEREAS, Resolution 2380, August 7, 1980, established a housing rehabilitation program for the City of Wichita Falls, and; WHEREAS, the FY 1979-80 and 1980-81 rehabilitation programs have been completed, and; WHEREAS, the City of Wichita Falls Community Development Block Grant application for FY 1981-82 has been approved to include additional programs, and; WHEREAS, the existing housing rehabilitation assistance program must be amended to include the approved programs. 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 ,att/ached document. PASSED AND APPROVED THIS THE gLday of 1982. MAYOR ATTEST: CIT CLERK 6 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 the 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 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 all 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 rehabilitation program of the City of Wichita Falls. 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. ELIGIBILITY REQUIREMENTS FOR CDBG FINANCIAL ASSISTANCE A. The applicant must be an individual or family who owns and occupies a residential unit. The applicant will be considered the owner if he: 1 . Is the "owner of record" on the books at the County Court House. 2. 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 3. Possesses a life estate which has been, or may be filed for record at the County Court House. 1- B. The owner occupied structure must be located in one of the following census tracts: 101 105 109 113 102 106 110 114 103 107 111 116 104 108 112 127 Any of the above census tracts, or portion thereof, may be targeted to receive a specific amount of the program funds provided it meets established criteria. C. Since Community Development Block Grant funds are intended to serve low and moderate income residents or hardship cases who have no other means of financing repairs or improvements, such funds shall not be available to any owner-occupants who have substantial financial resources available. D. To qualify for assistance, the income of the applicant shall not exceed the limits defined by the Department of Housing and Urban Development for eligibility for the Section 8 Housing Assistance Pay- ments Program. The income limits of the CDBG rehabilitation program shall be automatically amended by changes in the Section 8 guidelines as authorized by the Department of Housing and Urban Development . All income of all residents in the dwelling unit of the applicant shall be counted as a part of the applicant's income. E. 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. IV. INCLUDABLE COST FOR CDBG FUNDED REHABILITATION CDBG rehabilitation funds shall be used only for those repairs and/or replacements which are necessary to correct actual or incipient viola- tions of the Housing Codes of the City of Wichita Falls, Texas, and/or Those repairs and replacements necessary to provide energy efficient qualities specified by the Department of Housing and Urban Development, and/or Those improvements designated by programs as may be approved by the Board of Aldermen of the City of Wichita Falls . V. CDBG REHABILITATION ASSISTANCE AMOUNTS A. When all qualifications have been met by the applicant , the applicant shall be entitled to receive CDBG rehabilitation assistance in the amount necessary to bring the property to minimum property standards and the City Codes, provided the amount does not exceed $7,500. 2- B. In the event $7,500 is not sufficient to bring the property to mini- mum property standards and the City Codes, CDBG rehabilitation assistance will not be approved unless: 1 . The applicant places the necessary funds in escrow with the CDBG rehabilitation assistance funds when the contract is signed, or 2. Used in conjunction with an approved rehabilitation loan from a private investor as defined in Section VI. C. An applicant approved for the energy retrofit program may be eligible for assistance not to exceed $1,250. D. An applicant approved for project PAINT may be eligible for assis- tance not to exceed $2,500. VI. LOAN SUBSIDY PROGRAM A. CDBG 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 CDBG 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. The Planning Department shall 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. B. If there is an existing mortgage on the property to be rehabilitated, the private investor may, at their discretion, disapprove the appli- cation or accept a secondary mortgage position. Terms of the mortgage shall not exceed ten (10) years or a maximum amount of $10,000. C. CDBG funds may be used in ccnjunction with a subsidized loan; how- ever, 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 25% of the applicant 's gross monthly income. In such cases , the City's security requirement shall be secondary to the private institution's security interest. 3- VII. SECURITY REQUIREMENTS A. A Builder's andn 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 he due and payable imme- diately. At the end of each year, 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 the maximum 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 VII, 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 at the conclusion of the fifth (5th) year of occupancy by the applicant. VIII. OTHER REHABILITATION ASSISTANCE CDBG funds may be used for temporary off-site relocation expenses for those displaced temporarily by rehabilitaion activities being carried out with CDBG assistance. 4- IX. EMERGENCY REPAIRS A. The Planning Department has the authority to grant funds for emer- gency repairs on any structure which it determines to be feasible . Such funds shall be granted only for the following reasons: 1. Any act of nature resulting in critical damage to the structural condition. 2. To eliminate specific hazards to health and sanitation. B. The Director of Planning or his designated representative shall review all applications for emergency repairs prior to approving a grant and the decision of the review shall be final. C. The applicant must meet the eligibility requirements for the CDBG rehabilitation assistance to receive emergency repairs. The Depart- ment shall have the authority to waive prior verification of eligi- bility in cases where an immediate danger to health, safety or sani- tation exists. The applicant shall be notified that, in the event the verification of eligibility should reveal the applicant does not fall within the requirements, they shall be required to make full restitu- tion to the Department. D. The security requirements stated in Section VII 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. E. No applicant shall be eligible to receive more than one emergency repair in one calendar year nor more than $750.00 per repair. X. ENERGY RETROFIT PROGRAM A. The Planning Department has the authority to grant funds for energy retrofit on any structure which it determines to be feasible. Such funds shall be granted to bring the structure into compliance with energy efficient guidelines as established by the Department of Hous- ing and Urban Development. B. 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. C. The applicant must meet the eligibility requirements for the CDBG rehabilitation assistance to receive energy retrofit assistance. D. The security requirements stated in Section VII 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. E. No applicant shall be eligible to receive more than one energy retro- fit grant. The total grant amount shall not exceed $1,250. 5- XI. PROJECT PAINT A. The Planning Department has the authority to grant funds for the Com- munity Development Project PAINT for any structure which it determines to be feasible. Such funds shall be granted for those materials and labor necessary to make those exterior improvements necessary to prevent deterioration of the structure. B. 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. C. The applicant must meet the eligibility requirements for the CDBG rehabilitation assistance to receive assistance. D. The security requirements stated in Section VII 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 . E . No applicant shall be eligible to receive more than one grant for Project PAINT. The total grant amount shall not exceed $2,500. XII. CONTINGENCY FUNDS At the discretion of the Community Development Section, additional fund- ing not to exceed ten percenc (10%) of the original contract may be utilized as a contingency fund to pay costs which were not observed and included in the original contract. XIII. FILES AND REPORTS The Planning Department shall maintain accurate files and records on each applicant and all documentation pertinent to the applicant shall be included. Such files shall be open for inspection as to qualifications, bid procedures, inspections of work and payments from the escrow account. XIV. BIDDING PROCEDURE A. The homeowner shall have the right to select any qualified contrac- tor. If the contractor selected has not been previously approved by the Department, he shall submit contractor qualification forms, a credit report and a Certificate of Insurance. If the contractor is approved by the Department, then he will be awarded the contract . B. The homeowner shall have the right to select more than one contractor for competitive bidding. All contractors bidding must meet Depart- ment 's requirements to be eligible to do rehabilitation. If the home- owner has no preference, two or more contractors will he assigned from the approved contractor rotation file to bid on their job. C. The Planning Department shall have the option to group approved applicants for any CDBG Rehabilitation Program into a single project for competitive bidding. 6- XV. CONTRACTOR QUALIFICATIONS A. The Planning Department shall adopt and abide by the qualifications and regulations established by the Department of Housing and Urban Development Rehabilitation Handbook, February 1974, and all subse- quent revisions thereto. B. The contractor shall carry insurance as required by the City of Wichita Falls and the State of Texas. XVI. RECEIPT OF APPLICATIONS The Planning Department will accept applications for verification from owner-occupants of the specified area. The Rehabilitation Specialist shall be responsible for the grading of all applications in accordance with the following schedule. Those applications receiving the highest number of points shall be considered as first priority applications. 1. Income Maximum 5 Points One point for each 10% below eligibility limit. 2. Housing Conditions Maximum 10 Points Lack of essential plumbing 3 Points Lack of essential heating 2 Points Lack of adequate electrical 2 Points Condition of foundation, roof or exterior walls 2 Points Condition of windows and doors 1 Point 3. Age of Occupant or Handicapped Maximum 5 Points One point for every 5 years over 60 of head of household or 5 points for handicapped 4. Female Head-of-Household 2 Points 5. Large Family (above 4 dependents) 2 Points 6. Length of Time as Qualified Applicant Maximum 6 Points One point for each six months Total Maximum Points 30 Points XVII.CONTRACTING REHABILITATION WORK A. This section sets forth requirements and procedures with respect to construction contracts for rehabilitation financed through a reha- bilitation grant, a rehabilitation loan, or both. Construction work for rehabilitation financed through a rehabilitation grant and/or a 7- rehabilitation loan shall he undertaken only through a written con- tract 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 construction contract . 1. Form of Contract The construction 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 gene- ral conditions as well as the specifications for the work to be performed. 2. Acceptable Contractors The Planning Department shall always exercise care and good judgement in approving a contractor. An approved contractor shall be of good reputation, financially sound, have adequate financial resources to carry out his contract, and be qualified to do the required work. The Department shall frequently monitor its list of contractors to assure that they continue to be acceptable. 3. The contractor shall be required to 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. XVIII.INSPECTION OF REHABILITATION WORK A. This section sets forth the requirements for the inspection of reha- bilitation work financed in whole or in part with a rehabilitation grant and/or loan. B. Responsibility for Making Inspections The Planning Department shall arrange inspections of construction work in cases involving a residential loan and for such loans under 7,500 regardless of the number of dwelling units involved. To accom- plish this, the Planning Department shall ensure: 1 . Compliance inspection, as necessary, to assure that the construction work has been completed in accordance with the construction contract. 2. A final inspection to determine that the construction work has been completed in accordance with the construction contract . 8- C. Final Inspection Upon completion of the rehabilitation work and receipt of the con- tractor' s invoice containing his certification of satisfactory com- pletion of all the work in accordance with the contract and his warranty, the Planning Department shall arrange for inspection of the completed work. D. Making Final Payment When the final inspection determines that the work has been satisfac- torily 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 . E. One Year Guarantee of Work by Contractor 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 significant defects and inadequacies in the work performed under his contract. XIX. CHANGES, WAIVERS AND/OR CONFLICTS A. The City Council shall have the right to waive, change, modify or revoke all or any part of the plan by a majority vote of the Council. 9-