07-D Owner Occupied ProgramDRAFT
LISAhO. ESOLUTIONS\CURRENT\TCDP Owner Occ Program Guidelines
August 9, 2001
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS,
PARIS, TEXAS, APPROVING THE OWNER OCCUPIED
REHABILITATION PROGRAM DESIGN, TCDP NO. 721048, UNDER THE
TEXAS HOUSING REHABILITATION FUND PROGRAM GRANT;
AUTHORIZING THE CITY MANAGER TO EXECUTE THE AFORESAID
PROGRAM DESIGN; MAKING OTHER FINDINGS AND PROVISIONS
RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, the City Council of the City of Paris did heretofore, on the 12th day of June,
2000, in Resolution No. 2000-074, authorize a Texas Community Development Program
(TCDP) application to the Texas Department of Housing and Community Affairs (TDHCA) for
a Housing Rehabilitation Fund Program Grant; and,
WHEREAS, the City Council of the City of Paris did heretofore, on the 12th day of June,
2000, in Resolution No. 2000-075, accept the Response to Request for Proposal for the Texas
Community Development Program Grant Management Services from R.I.M. Enterprises and
authorize the City Manager to execute the Contract for Administrative Services with R.I.M.
Enterprises, Inc. upon approval of the grant application; and,
WHEREAS, the City Council of the City of Paris did heretofore, on the 9th day of July,
2001, in Resolution No. 2001-104, accept said grant and authorize the execution of the Texas
Department of Housing and Community Affairs 2001 Community Development Housing
Rehabilitation Fund Grant, TCDP Contract No. 721048; and,
WHEREAS, the City of Paris is in receipt of the City of Paris Owner Occupied Rehabilitation
Program Design, TCDP No. 721048, which should, in all things, be approved, and the City Manager
should be authorized to execute the same; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS,
TEXAS:
Section 1. That the findings set out in the preamble to this resolution are hereby in all things
approved.
Section 2. That the Owner Occupied Rehabilitation Program Design, TCDP No. 721048,
be, and the same is hereby, approved.
Section 3. That the City Manager, be, and he is hereby, authorized and directed to execute,
on behalf of the City of Paris, the Owner Occupied Rehabilitation Program Design, TCDP No.
721048, in the form shown in Exhibit A, attached hereto.
Section 4. That this resolution shall be effective from and after its date of passage.
PASSED AND APPROVED this 13th day of August, 2001.
ATTEST:
Michael J. Pfiester, Mayor
Mattie Cunningham, City Clerk
APPROVED AS TO FORM:
Larry W. Schenk, City Attorney
CITY OF PARIS
OWNER OCCUPIED
REHABILITATION PROGRAM DESIGN
TCDP No: 721048
AUGUST, 2001
i~XHIBIT A
HEADING
Introduction
General DeaSnitions
Chapter 1
City Map
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter
Table of Contents
Eligibility Requirements
Cost Allowable in Loans
Limitations on Loans
Solicitation, Submission and
Processing of Applications
Terms and Conditions Underwhich
Loans are Made
Determination of Work to be Done
Contracting for Rehabilitation Work
Contractor Requirements
Inspection, Close-Out and Final
Payment
Applicants Eligibility to Appeal
Conflict of Interest
Reconstruction
PAGE
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CITY OF PARIS
HOME REHABILITATION LOAN
PROGRAM DESIGN
INTRODUCTION
The purpose and objective of this Rehabilitation/Reconstruction Program of owner occupied
housing is to assist low to moderate income families to obtain decent, safe and sanitary housing.
Further, through revitalization and conservation of existing housing stock, the City seeks to
restore and preserve environmentally pleasing neighborhoods, encourage additional home
maimenance, and provide incentive for redevelopmem.
In the event it is not economically feasible to rehabilitate existing structures, replacement housing
will be considered as a viable option.
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GENERAL DEFINITIONS
OWNER-OCCUPIED RESIDENCE. A property occupied by the owner which is used by a
single family for residential purposes only.
REHABILITATION STANDARDS- Standard Building Code as adopted by the City Council,
or Texas Minimum Construction Standards, Cost Effective Energy Measures.
REHABILITATION COSTS- The future costs of repairs, improvements, and other incidentals
incurred by an applicant for the rehabilitation of eligible property financed by loan funds.
ELIGIBILITY INCOME- Actual annual income from all sources as stipulated and based upon
50°A, and 30% of median income for the area, for all members 18 and over.
ELIGIBILITY CONDITIONS- Applicants must provide the City with proof of home
ownership as well as a tax statement which demonstrates taxes are either current or there
is an agreement to pay back taxes in order to be grant eligible.
PROGRAM GOVERNING BODY- The Housing Board as established by the Mayor and City
HANDICAPPED PERSON-An eligible applicant or family member who has a physical
handicap(s) which disallows them the full access to their home, e.g., must use wheel chair or
walker to get around in a home which does not accommodate this condition.
REPLACEMENT HOUSING - In cases where rehabilitation of existing housing is not
econlmically feasible, replacement housing might be constructed when owner agrees to voluntarily
accept said housing on another area oftbeir property or will voluntarily locate elsewhere so
construction can take place on their lot.
VOLUNTARY RELOCATION- An eligible applicant may agree to take up temporary
residence in another location during rehabilitation or replacement construction. Owner will certify
in writing they waive any and all benefits under the Act since the City will not be forcing the
rehabilitation or replacement construction.
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CHAPTER 1
ELIGIBILITY REQUIREMENTS
1.1 Applicant Requirements For A Loan
To be eligible for a rehabilitation loan, all applicants must be at or below the income levels stated
below and owns and occupies a single family dwelling used for residential purposes only, located
within the City limits. In addition, the property must have at least one condition which constitutes
a code violation as stipulated in the Standard Building Code and/or TMCS.
1.2 Validation of Ownership
Applicants must supply a Deed, Deed &Trust, or Warranty Deed to verify ownership. Contracts
of Sale or Contracts of Deed will not be accepted.
1.3 Establishing Eligibility For A Loan
a. Applicant must reside in a single family dwelling located within the City limits.
b. The following table shall be used to establish a applicants eligibility based upon gross family
annual income at the time of application:
NUMBER ,30%MEDIAN 50 % MEDIA;N 80 %
1 8,100 13,500 21,550
2 9,250 15,400 24,650
3 10,400 17,350 27,700
4 11,550 19,250 30,800
5 12,450 20,800 33,250
6 13,400 22,350 35,750
7 14,300 23,850 38,200
8 15,250 25,400 40,650
t.4 Income Verification
The applicants statement of income shall be verified by a year to date check stub, or their most
recent tax return. Other acceptable documentation includes: Social Security, SSI Statement of
Benefits, Statement from DHI-IS for AFDC, Unemployment Insurance Statement, etc. Income
from all soumes for each member residing in the unit over 18 must be verified.
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1.5 Rehabilitation/Reconstruction Loan Approval
Units will be rehabilitated following the eligibility procedure listed below:
Applications will be taken following a notice of fund availability. Applications will be taken at the
local agency or Community Council. Applicants will be required to provide ownership
verification and income information. Status of eligibility will then be determined. Applicants
whose income is at or below 50% of median as listed in the previous chapter will be considered
eligible. Incomes up to 80% will be considered if City's contract performance statement
commitment has been met.
An inspection of each eligible applicant's house will be made in order to establish the general
condition of the unit. Those units which demonstrate deterioration beyond feasibility to repair
under this loan: the scope of work necessary to meet codes exceeds the average allowable amount
provided by the loan, will be notified reconstruction would be the recommended method of
approach. Or, appropriate referral will be made ifaitemative funding is available.
When, in the concuring opinion of inspector(s), the initial inspection demonstrates the applicant's
disregard for minimal sanitation and housekeeping activities based upon verifiable living
conditions which could represent a health and safety threat to City staffand workmen: and when
this condition causes inspectors to reasonably expect non-compliance with (3.4), the applicant
mayl be notified in writing of the his/her ineligibility for program funds.
Those whose house shows signs of only light deterioration mayl be referred to the Weatherization
Program for repairs. The remainder of applicants, who are eligible to receive loans, will be
addressed on a first-come, first-served basis until all funds have been spent.
Persons residing in homes located in the flood plain must be willing to obtain flood Insurance.
Due to limited funding, applicants who have not been served by a previous grant will be awarded
ahead of those who have received housing rehabilitation assistance bom a previous loan.
In situations where applicant housing was constructed prior to 1978, the Lead Based Paint
Poisoning Act may require inspection and testing by certified personnel, the cost of wNch is not
eligible for a TDHCA/HOME grant iftbe project is not done. Because of this, applicants will be
notified that these units may only be rehabilitated if there are circumstances which guarantee the
rehabilitation and testing, if auy, can be done within program limits. Otherwise these units will be
considered for reconstructed.
CHAPTER 2.
COSTS ALLOWABLE IN REHABILITATION LOANS
2.1 General
A rehabilitation loan will be made only to cover the cost of reconstruction or rehabilitation
necessary to make owner-occupied, single-family residential property accessible and to conform
to local codes, and other costs as provided in this section.
2.2 Includable Costs
Requirement of the City:
(1) The repair or removal and replacement of elements of the dwelling structure,
including basic equipment and other improvements to the property such as attached
garage and steps. The term "basic equipment" includes such items as heating furnace,
water heater, stove, refrigerator, electrical and plumbing systems and sanitary
fixtures, the replacement of all unrented space heaters.
(2) The provision of sanitary or other facilities, including provision, expansion, and
finishing of space necessary to accommodate those facilities.
(3) Structural modification to allow accessibility by owner in wheel chair or walker.
Incipient Violations
An incipient violation exists if, at the time of the inspection, it is determined that the
condition of an element in the structure will deteriorate into an actual violation within
one year.
Building Permits And Construction Administration
The cost of building permits, fees and specific construction inspection mayl be
waived by the City. Filing fees and the cost of legally binding documents shall be eligible
under the grant.
2,3 Costs Not Includable
a. Materials, fixtures, equipment or landscaping of a type or quality which exceeds that
customarily used in the locality for properties of the same general type as the property to
be rehabilitated.
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CHAPTER 3.
LIMITATION OF REHABILITATION LOANS
3.1 Limitation Of Loan Amount
The mount of rehabilitation/replacement loan shall not exceed the actual cost of the repairs and
improvements necessary to make the property handicapped accessible and/or conform with local
codes. From loan sources the average rehabilitation mount is $25,000. Private funds may be
used to increase this mount. Loans exceeding this average will be evaluated on a case-by-case
basis by the City's Housing Board. No more than $25,000 of TCDP funds may be spent to
rehabilitate or replace a single unit without approval of the Board.
3.2 Rehabilitation Exceeding Program Limits
For units which cannot be replaced or made accessible and brought to local codes with the
expenditure of the maximum grant amount, the following procedure will be followed:
Applicant will be notified in writing of the infeasibility of their application. Appropriate referral
for rehabilitation assistance will be given the applicant.
3.3 Contingency Funds
There will be no contingency funds. Any change in the contract amount, individually and
cumulatively, will be approved by the City Inspectors, in writing, and prior to the modification of
scope of work.
3.4 Owner Responsibility
Owner agrees to maintain housing unit to local building codes for the term oftbe lien.
Failure to comply by the owner may be cause for the City to require pro rata amount of the
original Forgivable Loan to become due and payable.
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CHAPTER 4.
SOLICITATION, SUBMISSION ANI) PROCESSING OF APPLICATIONS
4. t Solicitation Of Application And Records
a. All notices, interviews and application activities will be carded out in facilities located within
the community.
b. Ail official records will be kept on file within city offices for at least 5 years after close.
c. Processing and maintenance of records will comply with existing legislation.
4.2 Processing And Submissions For A Rehabilitation/Reconstruction.
Listed below are the functions to be performed with a rehabilitation/receonstruction loan:
Following a public notice, applicants will be interviewed and advised of the objectives of the
program. Applications will be taken at a local Community Center or public agency for
at least 1 week. Letters will be sent to the local agencies. Reconstructed housing will be in
compliance with SB 623 and the Model Energy Code as well as the City Code or TMCS.
Applicants may send a representative to apply.
Public service announcements and cable TV notices may be made where available.
b. Applicants will be advised of the availability and benefits and responsibilities of a loan.
c. Eligibility of applicant will be determined. Official verification of income and ownership will
be obtained as well as any special needs condition.
d. Property will be inspected.
e. Work Write-Up/Cost Estimate of required work will be done.
f. Amount of loan necessary to complete unit will be determined.
g. Applicant will be advised oftbe conditions underwhich a loan will be made.
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h. Selection of contractor will be bid or fi.om a City established list will be made by Owner.
Contractor will bid on specifications. ,If bid is within 15% of estimate, a contract will be
drawn up between owner and contractor. If bid is greater than 15% above estimate
contractor will have the opportunity to modifiy bid. If not, Owner will select another
contractor fi.om the list.
i. Completed application package is presented to Housing Board for approval.
j. Construction contract and all closing documents are prepared and signed.
k. Owner issues Notice To Proceed to contractor.
1. Interim inspections are made as necessary.
m. Final inspection is made.
n. Contractor provides owner with; 1 year warranty, releases fi.om all sub contractors and
suppliers.
o. City will provide payment to Contractor on behalf of Owner.
p. Aid applicant in exercising a 1 year warranty made by the contractor when necessary.
4.3 Approval Of Loan Application
If the rehabilitation/reconstruction amount is sufficient to repair the structure to local codes, the
application shall be presented to the Housing Board. When signed it will be considered approved.
4.4 Loan Cancellation
An approved rehabilitation loan may be canceled because the applicant has requested cancellation,
or is unwilling or unable to proceed with the rehabilitation work.
The City may cancel a rehabilitation loan if it is determined that information given is incorrect or
incomplete.
In either event the City will prepare a letter of cancellation and mail to owner. City will retain a
copy.
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4.5 Loan Repayment
Eligibility for receiving a rehabilitation loan is based on the non-sale or transfer of the property for
a period of five (5) years following construction completion.
The City will file a lien, (first or subordinated), against the subject property which states should
the property be sold prior to the end of the fifth year, the owner will be required to repay the
principal amount of the loan in the following way:
a. If sold within the first year, the total amount is due.
b. If sold during the second year, 80% is due.
c. If sold during the third year, 60% is due.
d. If sold during the fourth year, 40% is due.
e. If sold during the fifth year, 20% is due.
£ After the fifth anniversary of completion of construction, the loan is forgiven and the lien
is considered null and void by the City.
g. If funds have been expended and loan is canceled prior to completion, owner must
reimburse City for expenditures. City will return funds to TDHCA or HOME Program.
CHAPTER 5
TERMS AND CONDITIONS UNDERWHICH LOANS ARE MADE
5.1 Rehabilitation/Reconstruction Conditions
The specific terms and conditions with respect to a rehabilitation/replacement loan are
incorporated into the application. The applicant shall agree, and by signing does agree to:
Civil Rights:
Comply with all DHISD requirements with respect to Title VI of the Civil Rights Act of
1964, to not discriminate on the basis of Color, Religion, Handicap, Familial Status or
National Origin.
Cancellation of Loan:
Return of the grant proceeds with no right, interest, or claim in the proceeds, if the loan is
canceled before the rehabilitation/replacement work is started.
Use of Proceeds:
Use of loan proceeds only to pay for costs ofmateriais and services necessary to carry out
the rehabilitation/replacement work for which the loan will he approved.
Completion of Work:
Assure the rehabilitation/replacement work shall be carried out promptly and efficiently
through written contract but with the prior concurrence of the Program Governing Body.
Ineligible Contractors:
Not award any contract for construction to be paid for in whole or in part with the
proceeds of the loan to any contractor appearing on the federal debarment list.
Inspection:
Inspection by the City or it's designee of the property, the construction work and all
contracts, materials, equipment, payrolls, and conditions pertaining to the work.
11
g. Records:
Keep such records as~ may be required by the City.
Interest:
Not permit any member of Congress or City official to share in the proceeds of
or any benefit arising from the loan.
Relocation:
Temporary or voluntary relocation may be approved as detailed in (2.3). It is understood
The Act does not apply to housing rehabilitation/reconstruction.
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CHAPTER 6
DETERMINING WORK TO BE DONE WITH A CONSTRUCTION LOAN
6.1 Property Inspection
The Building Inspector or construction manager shall inspect the property and shall prepare an
inspection report which identifies each deficiency with respect to local codes or TMCS, or other
deficiencies which may be corrected through a rehabilitation loan.
6.2 Work Write-Up And Cost Estimate
A work write-up and cost estimate is a statement prepared by program administrator based upon
the property inspection report that itemizes all the rehabilitation or reconstruction work to be
done on the property, and includes an estimate of the cost of each item. The cost estimate shall
be reasonable and reflect actual costs prevailing in the locality for comparable work. This
document will be reviewed and signed by the City's Building Inspector.
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CHAPTER 7
CONTRACTING FOR REHABILITATION WORK
7.1 Form Of Contract
The construction contract will consist cfa document signed by the contractor and accepted by the
applicant upon approval of the rehabilitation/reconstruction. The contract shall contain a bid and
proposal by the contractor as well as specifications for the work to be done.
7.2 Use Of Alternatives
The contract document may provide for alternates by which the bidder, as part of his bid and
proposal, offers increases or decreases to the lump sum contract price to cover alternates for
work to be performed.
7.3 Selection Of Contractor
The program administrator will perform outreach/notification of work to contractors.
Contractors will make application on forms provided by the City. Work and banking references
will be checked. TDHCM HOME office will be contacted in order to determine if contractor has
been debarred from State and Federal projects.
Contractors on bidders list will be selected by owner as applications become eligible. The
contractor, using owner/mgr, developed write-up will walk through unit in order to prepare his
bid. At a subsequent meeting with staff, the Contractor will present his bid. Bids within 15% of
staff estimate will be accepted. Contracts may also be competitively bid.
Approved contractors who fail to bid on units selected, and/or continue to demonstrate
unrealistically high bids or who demonstrate an unwillingness or inability to perform work as
required, will be removed fi.om the list. New contractors, when making application during
program, will be added to approved contractor's list and be offered a unit when selected by
owner. After the successful completion of their first contract, more than one unit may be assigned
to a contractor at one time.
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7.4 Labor Performed By Owner
The owner may complete some tasks if he has the skills required to perform the work involved
and if no license is required. If work requires a license, and the owner has such license, he, or she
may perform said work. The loan shall not reimburse the owner or his family for any work
performed.
This work may not cause the term of the contract to be extended.
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CI:I_APTER 8
CONTRACTOR REQUIREMENTS
8.1 Contractor Approval
Before a contractor is placed on the approved list the following procedure must be completed:
a. Contractor must submit approved application to City. The Contractor must carry Workmen's
Compensation Insurance, Automobile Insurance, ~md General Contractors Liability in the
amount of $100,000/$50,000.
b. Contractor must not appear on the TDHCA, HOME Programs or DHUD debarment lists.
¢. The program administrator must verify a positive history of acceptable performance and/or
business practice as demonstrated fi-om 3 previous completed projects, information obtained
from contractors lender, and information fi-om material suppliers.
d. Approval by the Housing Board must be obtained prior to letting the contract.
8.2 Provisions For Continuous Eligibility
The contractor must continue to perform his work in a satisfactory manner as well as correcting
deficiencies on completed jobs in order to remain on the approved contractor's list.
8.3 Removal From The Approved Contractor's List
In the event a contractor fails to complete a project, as agreed in the Contract with Owner, or if
he submits bids not within the acceptable cost range for the area, he shall be removed fi'om the list
for cause by the Housing Board.
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CHAPTER 9 t
INSPECTION, CLOSE-OUT, AND FINAL PAYMENT
Inspection of construction work shall be made in accordance with the following:
a. Progress Inspections:
A compliance inspection of the rehabilitation work shall be made as appropriate during the
construction period.
Final Inspection:
Upon completion of the rehabilitation work and receipt of the contractor's request, including
his certification of satisfactory completion in accordance with the contract and his warranty,
a final inspection will be scheduled.
Final Payment:
When the final inspection verities work required by the contract has been satisfactorily
completed, inspector shall obtain from the contractor; Releases of Liens, or Affidavit of Paid
Bills, copy of each warranty due, and final permit approval. A request for Payment shall be
submitted to the City. The City will issue a check to the owner and contractor for 90% of
the contract amount upon completion. A check for the remaining 10% will be issued within
30 days upon verification with the Owner that no deficiencies exist.
9.1 Certification Of Final Inspection
After it has been determined the rehabilitation work has been fully and satisfactorily completed
and the final inspection form obtained, any and all necessary paperwork will be processed and
disbursed.
9.2 Close-Out Files
The City will receive from the contractor releases of claims on the property and warranties for
equipment installed and copies offinai permit approval. These documents will be retained in City
tiles.
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CRAPTER 10
APPLICANT'S ELIGIBILITY TO APPEAL
10.1 Applicant's Intent To Appeal:
The applicant must make his appeal known by filing a letter to the Housing Board.
a. The City will instruct the appellant as to form and content of this letter.
b. Applicant will be notified of the time and place of the next appeals hearing and informed that
either he or his representative must be present at the appeal.
10.2 Heating The Appeal
The appeals proceeding is designed to allow each person an equitable opportunity to express
his/her views and reasons for believing he/she has been treated unfairly or unfairly denied housing
rehabilitation assistance, as long as such appeal is made within fifteen (15) days of the decision or
notification. Applicants and selected speakers listed on the appeals notice will be allotted five
minutes each for his/her statements. In addition, any person may submit written statements on
behalf of the applicant. At the conclusion of the appeals presentation, each member of the
Appeals Board (Housing Board) will be given the opportunity to ask questions in an effort to
obtain pertinent facts. The appeals board will then adjourn. Each person making an appeal will
be notified in writing within one week as to the findings of the Board.
If the issue cannot be resolved, the complainant may write to the City for an appeal as long as
such letter is received by the City within fffieen (15) days of the Housing Board Hearing.
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CHAPTER ! 1
CONFLICT OF INTEREST
a. The conflict of interest regulations contained in the HOME contract between the City and
TDHCA prohibit local elected officials, city employees, and consultants who exercise functions
with respect to HOME activities or who are in a position to participate in a decision making
process or gain inside information with regard to such activities, from receiving any benefit from
the HOME activity either for themselves or for those for whom they have family or business ties,
during their tenure or for one year thereafter.
b. The Home Investment Partnership Program has defined "family" to include parents (including
mother-in-law and father-in-law), grand parents, siblings (including sister-in-law and
brother-in-law), and children of and official covered under the HOME conflict of interest
regulations 24 CFR Sec. 570.489(h).
c. No member, officer, agent, or employee of the City shall be personally liable concerning any
matters arising out of, or in relation to, the commitment of HOME Program funds with regard to
the feasibility or validity of the proposed project.
d. The City shall have the right to change, modify, waive or revoke all or any part of these
guidelines in writing by a majority vote taken at an open meeting of the City and a3-ailable to the
Department.
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CHAPTER 12
RECONSTRUCTION
If, in the opinion of City Inspectors, and following an inspection and preliminary work write up,
the rehabilitation of the home cannot be done within the budget and in compliance with existing
codes and regulations, the City may offer to reconstruct a home on the same site.
Owner must agree, in writing, to voluntary relocation if the unit must be reconstructed on the
same site. If the unit can be reconstructed on the same lot, the owner may remain in the unit until
the new unit is completed. The original unit will be demolished in either event.
Owner must also agree, in writing, to request the demolition and clearance of the original
structure.
New units wilt be constructed with SBC, TMCS, ADA, and the MEC.
All other conditions, requirements, and eligibility standards previously mentioned wilt apply to
this chapter.
PASSED AND APPROVED this 13th day of August, 2001 by the designated authorities listed
below:
Michael E. Malone, Mayor
Mattie Cuuningham, City Secretary
Ml'rogDes