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HomeMy WebLinkAboutS Housing - Assistance Policy for the 2014 Cycle of the Single-Family Rehabilitation Loan Pool - 10-7-2014 - 6f Orange County Assistance Policy For the 2014 Cycle of the Single-Family Rehabilitation Loan Pool (SFRLPI4) What is the Single-Family Rehabilitation Loan Pool? Orange County ("the County") has been allocated a set-aside of $170,000 by the North Carolina Housing Finance Agency (NCHFA) under the 2014 cycle of the Single-Family Rehabilitation Loan Pool (SFRLPI4). This program provides funds to assist with the rehabilitation of moderately deteriorated single-family owner-occupied housing units occupied by lower income (less than 80% are median income) households with one or more elderly (62+) or disabled fulltime household members or owner-occupied units with lead hazards and a child less than six years old. Orange County plans to apply the funds toward the rehabilitation of three (3) houses within the Orange County. Additional funds may be available from the Agency to address additional dwelling units, depending upon Orange County's performance under the allocated set-aside. The Assistance Policy describes who is eligible for assistance under SFRLPI4, how applications for assistance will be rated and ranked, what the terms of assistance are, and how the rehabilitation process will be managed. Orange County has designed the SFRLPI4 project to be fair, open, and consistent with its approved application for funding and with the SFRLPI4 Program Guidelines. The funds provided by NCHFA come for the US Department of Housing and Urban Development's (HUD) federal HOME Investment Partnership Program. The form of assistance will be no interest, no payment loans which are forgiven at the rate of$3,000 per year with a grant of soft costs up to $10,000. Eligibility. There are several major requirements to be eligible for SFRLPI4 assistance: • The housing unit to be rehabilitated with SFR funds must be located in Orange County, and must be owner-occupied. The household occupying the unit must have an elderly (62+) or disabled fulltime household member or a child less than 6 years old and the dwelling unit must contain led-based paint hazards; • The gross annual household income must not exceed 80% of the area median income for Orange County(see income limit table on the following page) and; • The cost of rehabilitation including all mandatory energy-related measures and lead hazard remediation, if applicable, cannot exceed SFRLP 14 Program Guideline limits of$45,000. Unfortunately, not all homes can be brought up to the Program-required Rehabilitation Standards with the limited funding available. Some otherwise-eligible households may be deemed ineligible for assistance because their homes fail this test. 1 Additionally,properties are eligible only if they meet all of the following requirements: • The property must require at least $5,000 of improvements in order to meet SFR Rehabilitation Standards. • The property must be free of environmental hazards and other nuisances as defined by all applicable codes or regulations, or any such hazards or nuisances must be corrected as part of the rehabilitation of the unit. The County's Rehabilitation Specialist will determine whether there are environmental hazards/nuisances present on the site and if they can be removed through rehabilitation. • Properties cannot be located in a right-of-way of any impending or planned public improvements. The County's Rehabilitation Specialist will assist in verifying status. • The property cannot be located on a site that is endangered by mudslides, landslides or other natural or environmental hazards. The Rehabilitation Specialist will work with the homeowner to make this determination, if needed. • Manufactured housing is not eligible for assistance • The property must be current with all taxes. County staff will assist in verifying status. • The property may not be located in a flood hazard area. (Orange County will verify whether the home is in the flood plain.) • The property cannot have been repaired or rehabilitated with public funding of $5,000 or more within the past 10 years. 2014 Income Limits for Orange County's Single-Family Rehabilitation Program -Num, 30% %o f 60"/0 of u WW "Very Lo Median ncome Income In ®nic.`' 1 $13,800 $23,000 $27,600 $36,800 2 $15,800 $26,300 $31,560 $42,050 3 $17,750 $29,600 $35,520 $47,300 4 $19,700 $32,850 $39,420 $52,550 5 $21,300 $35,500 $42,600 $56,800 6 $22,900 $38,150 $45,780 $61,000 7 $24,450 $40,750 $48,900 $65,200 8 $26,050 $43,400 $52,080 $69,400 I 2 Rating and ranking of applications. There are many more SFR-eligible households (with eligible houses) than can be assisted with the available funds. Therefore, Orange County has devised the following priority system to rank eligible applicants, determine which of them will be selected for assistance and in what order. Under this system applicants will receive points for falling into certain categories. Applications will be ranked according to which receive the most points. Priority Ranking System for Orange County's 2014 Single-Family Rehabilitation Program Elderly Head of Household(62 or older) 4 Disabled Head of Household 4 Disabled or Elderly Household Member(not Head of Household) 2 Less than 30% of County Median Income 8 30% to 50% of County Median Income 5 50% to 80% of County Median Income 1 In the case of equivalent rankings based on the above criteria the applicant with the lowest percentage of median income will rank highest. The definitions of special needs populations are: • Elderly: An individual aged 62 or older. • Disabled: A person who has a physical, mental or developmental disability that greatly limits one or more life activities, has a record of such impairment, or is regarded as having such impairment. • Head of Household: The person or persons who own(s)the house. • Household Member: Any individual who is an occupant (defined below) of the unit to be rehabilitated shall be considered a "household member" (the number of household members will be used to determine household size and all household members are subject to income verification). • Occupant: An occupant is defined as any immediate family member (mother, father, spouse, son/daughter of the head of the household, regardless of the time of occupancy; or non-immediate family member who has resided in the dwelling at least 3 months prior to the submission of the family's application. Recipients of assistance under the SFR program will be chosen by the above criteria without regard to race, creed, sex, color or national origin. Forms and terms of assistance under SFRLPI4. Orange County will provide assistance to those households selected in the form of a 0% interest, forgivable loan covering the hard costs associated with the rehabilitation of the home. The loan will be forgiven at$3,000 per year. 3 As long as the borrower lives in the home, no payments on the loan will be required. If the recipient prefers, the loan can be paid off at any time, either in installments or as a lump sum payment. Furthermore, no payment will be required as long as the house continues to be both owned and occupied by the household whose income is less than 80% of the area median income. That means a buyer who may wish to buy the property to live in, may upon Agency approval, "assume" the loan, and make no payments, so long as they can document that they are income-eligible. Should an heir inherit the property and choose to live in the house as their permanent residence, they may assume the loan without being income eligible. However, the lien remains on the property. A buyer who may wish to buy the property to live in may assume the loan as long as they can document that they are income-eligible (< 80% AMI). Default can occur if the property is sold or transferred to another person and/or if the borrower fails to use the home as a principal residence, without prior written approval of the North Carolina Housing Finance Agency. What kinds of work will be done? Each house selected for assistance must be rehabilitated to meet all SFR Rehabilitation Standards. This means every house must, upon completion of the rehabilitation: • Meet the US Department of Housing and Urban Development ("HUD") Section 8 Housing Quality Standards including applicable Lead-Based Paint regulations 27 CFR part 35, and Orange County's Minimum Housing Code. (These are so- called "habitability standards" which set minimum standards for decent, safe and sanitary living conditions. )Housing Quality Standards will be replaced with the Uniform Property Condition Standards(UPCS) effective January 2015. • Meet or exceed NCHFA Energy-Efficiency Standards. (These are standards designed to save energy and save you money on your monthly utility bills. They also result in healthier and more comfortable homes.) • Meet or exceed SRF "Written Rehabilitation Standards" (These standards are designed to ensure greater durability) • Retain no "imminent threats" to the occupants of the home or to the home's "structural integrity". (An example of an imminent threat to occupants as well as to the home's structural integrity is a crawlspace that is too damp. In time the dampness may provide an invitation for the growth of mold and mildew as well as promote damage to the framing from termites and fungi.) These requirements are spelled out in full in Orange County's SFRLPI4 Administrator's Manual which you may view, at reasonable times,upon request, at the County's office or at the North Carolina Housing Finance Agency's website www.nehfa.com under forms and documents SFRLPI4. In addition to the above items that must be done to satisfy NCHFA requirements, the scope of work may also include certain items meant to enhance or protect neighborhood and unit property values, and/or home modifications designed to enable frail or disabled household members to function more independently. 4 It is anticipated that each home rehabilitated with SFRLPI4 funds will, with reasonable maintenance,be capable of lasting another 30 or 40 years. Of course, contractors performing work funded under SFRLP 14 are responsible for meeting all local requirements for permits and inspections. All work done under the program must be performed to NC State Residential Building Code standards. (This does not mean, however, that the whole house must be brought up to Building Code Standards.) What about lead-based paint? Until it was discovered to be a health hazard, the metal, lead, was used for centuries to make house paints. Now we know that lead exposure is a serious problem for everyone and especially small children. Selling lead paint was outlawed in 1978, but many older buildings still contain lead paint and children are still being poisoned. Under SFRLP 14, a lead hazard evaluation must be performed on every home selected for rehabilitation that was built before 1978. The specific type of evaluation and the appropriate lead hazard reduction work performed will depend on the total amount of Federal funds used to rehabilitate the home, as per 24 CFR part 35. It may be necessary for the household to temporarily relocate during the construction process for protection against further lead poisoning. If temporary relocation is required, reasonable and documented temporary relocation expenses will be covered by SFRLPI4 assistance. The cost of temporary relocation will be part of the loan associated with SFRLPI4 and the average cost cannot exceed$1,000 per assisted household. Who will do the work on the homes? Orange County is obligated under SFRLPI4 to ensure that quality work is done at reasonable prices and that all work is contracted through fair, open and competitive process. To meet those very difficult requirements, Orange County will invite bids only from contractors who are part of an "approved contractor's registry". To be on the registry, contractors must (1) fill out an application form, listing several references and recent jobs completed, and (2) receive the "conditional approval" of Orange County. Once a contractor has been conditionally approved has successfully completed on job for Orange County, his or her status is upgraded to "regular approval", meaning that they will be allowed to bid on a regular rotation as long as they remain in good standing. (Homeowners who know of quality rehabilitation contractors that are not on Orange County's Approved Contractors Registry are welcome to invite them to apply.) From three to five approved contractors will be invited to bid on each job, and the lowest responsive and responsible bidder will be selected for the contract. "Responsive and responsible" means the contractor (1) is deemed able to complete the work in a timely fashion, and (2) that the bid is within 15% (in either direction) of Orange County's cost I 5 estimate. In the event that more than five approved contractors wish to compete, licensed contractors will take precedence. If required, lead based paint hazard reduction and/or abatement will be performed by contractors who are trained and certified to perform such work. What are the steps in the process, from application to completion? Now that you have the information about how to qualify for the 2014 Single-Family Rehabilitation Loan Pool Program, what work can be done, and who will do it, let's go through all the major steps in the process: 1. Completing an Application form: Homeowners who wish to apply for assistance must do by October 31, 2014. Apply by contacting Renee D. Holmes, Housing Programs Coordinator, at (919)245-2495. Proof of ownership and income will be required. Those who have applied for housing assistance from Orange County in the past will not automatically be reconsidered. A new application must be submitted. 2. Preliminary Inspection: Orange County Rehabilitation Specialist will visit the homes of eligible households to determine the need and feasibility of the home for rehabilitation. 3. Screening of applicants: Applications will be rated and ranked by Orange County based on the priority system outlined on page 3 and the feasibility of rehabilitating the house. Households to be offered assistance will be selected by November 30, 2014. Household income will be verified for program purposes only (information will be kept confidential) and ownership of property will be verified by conducting a title search. From this review, the three (3) most qualified applicants will be chosen according to the priority system described above. There will also be a list of two (2) alternates. Orange County will then submit to NCHFA a SFRLP 14 Loan Application and Reservation Request form for each potential borrower for approval of SFR funding. Applicants not selected for SFR will be notified in writing. 4. Written agreement: Upon verification of ownership resulting from the title search, a written agreement between the homeowner and Orange County will be executed by both parties. This agreement will certify that the property is the principal residence of the owner, that the post-rehab value of the property will not exceed 95% of the median sales price limits established by HUD and define the amount and form of assistance being provided to the homeowner by Orange County, the scope of work to be performed, the date of completion and the rehabilitation standards to be met. 5. Pre-rehab inspections & unit evaluation: Orange County's Rehabilitation Specialist will visit the home again for a more thorough inspection. All parts of the home must be made accessible for inspection, including the attic and crawlspace. The owner should report any known problems such as electrical short circuits, blinking lights, rook leaks, etc. Each unit will be evaluated for energy-saving 6 I I opportunities such as air-sealing and duct-sealing as well as for environmental concerns, such as lead based paint hazards and high levels of radon. 6. Work write-up: The Rehabilitation Specialist will prepare complete and detailed work specifications (known as the "work write-up"). A final cost estimate will also be prepared by the Rehabilitation Specialist and held in confidence until bids are received from the contractor. 7. Lead Testing: Orange County will arrange for a certified firm to inspect the home for potential lead hazards. The owner will receive information covering the results of the tests and any corrective actions that will be needed as part of the rehabilitation. 8. Formal agreement: After approval of the work write-up, the homeowner will sign a formal agreement that will explain and govern the rehabilitation process. The agreement will define the roles of the parties involved throughout the rehabilitation process. 9. Bidding: The work write-up and bid documents will be mailed to three to five contractors from the Approved Contractors Registry who will be given two to three weeks in which to inspect the property and prepare a bid. A bid opening will be conducted by Orange - County's Housing, Human Rights and Community Development office at a specified date and time, will all bidders and homeowners invited to attend. 10. Contractor selection: Within 24 hours of the bid opening, after review of bid breakdowns and construction schedules, the winning bidder will be selected. All bidders and the homeowners will be notified of(1)the selection of the winning bid, (2) the amount of the winning bid; (3) the amount of Orange County's cost estimate, and (4) the specific reasons for the selection, if other than the lowest bidder was selected. 11. Loan closing and contract execution: Loan documents will be prepared and executed by the homeowner and construction contract documents will be executed by the homeowner and contractor with Orange County signing on as an interested third parry. 12. Pre-construction conference: A pre-construction conference will be held at the selected applicant's home. At this time, the homeowner, contractor and program representatives will discuss the details of the work to be done. Starting and ending dates will be finalized, along with any special arrangements such as weekend or evening work hours and disposition of items to be removed from the home (such as old cabinets, etc.). Within 24 hours of the pre-construction conference, Orange County will issue a "proceed order" formally instructing the contractor to commence by the agreed-upon date. 7 �I 13. Construction: The contractor will be responsible for obtaining a building permit for the project before beginning work. The permit must be posted at the house during the entire period of construction. Program staff will closely monitor the contractor during the construction period to make sure that the work is being done according to the work write-up (which is made a part of the rehabilitation contract by reference) and in a timely fashion. Local Code Enforcement Officials will inspect the work for compliance with NC State Building Code. The homeowner will be responsible for working with the contractor toward protecting personal property clearing work areas as much as practicable. If applicable, the contractor will obtain a permit for lead hazard related activities. 14. Change Orders: All changes to the scope of work must be approved by the owner, the contractor, a County representative and the Rehabilitation Specialist, and reduced to writing as a contract amendment ("change order"). If the changes require and adjustment in the loan amount, the change must be specified in the change order. Also, a modification agreement stating these changes in the contract amount must be completed by Orange County, and executed by the owner. 15. Progress payments: The contractor is entitled to request a maximum of one partial payment during construction per$8,000 of contracted amount. When a payment is requested, the Rehabilitation Specialist will inspect the work within three days, list all items deemed 100% complete, and calculate a payment based on 85% of the total contracted amount of those completed items. Payments will be made within four business days of the inspection. 16. Closeout: When the contractor declares the work complete, program staff will thoroughly inspect work. If deficiencies are observed, the contractor will be required to correct them. When the Rehabilitation Specialist and the homeowner are satisfied that the contract has been fulfilled, each will sign off and, after receipt of the contractor's final invoice and lien releases, the final payment will be ordered. All material and workmanship will be guaranteed by the contractor for a period of one-year from the date of completion of the work. 17. Post-construction conference: Following construction the contractor and the Rehabilitation Specialist will sit down with the homeowner one last time. At this conference the contractor will hand over all owner's manuals and warranties on equipment. The contractor and Rehabilitation Specialist will go over operating and maintenance requirements for the new equipment and appliances and discuss general maintenance of the home with the homeowner. The homeowner will have the opportunity to ask any final questions about work. 18.Recordation and assignment: As soon as possible after the contractor has been selected, and prior to beginning work, Orange County staff and the homeowner will execute the required promissory note deed of trust. These documents are then recorded by the Orange County staff. If, upon completion of all rehabilitation work, the contract price has changed due to the effect of change orders, Orange 8 II County staff will execute and record a loan modification agreement reflecting the resulting increase in the original loan amount. If the amount of the loan is decreased due to a change order, then an Estoppel Agreement is executed by NCHFA, reducing the amount of the lien. 19. The warranty period: It is extremely important that any problems with the work that was performed be reported by the homeowner, to the Rehabilitation Specialist, as soon as possible. All bona fide defects in materials and workmanship reported within one year of completion of construction will be corrected free of charge. What are the key dates? If after reading this document, you feel that you qualify for this program and wish to apply,please keep the following dates in mind: • Applications available to the public starting September 1,2014. • Applications must be turned in to Orange County by 5:00 PM on October 31, 2014. • Selection of units will be made monthly on September 30, October 31, and November 28,2014. • All rehabilitation work must be under construction by December 31,2016. • All rehabilitation work must be completed by June 30,2017. How do I request an application? Contact: Renee D. Holmes, Housing Programs Coordinator Orange County Housing, Human Rights and Community Development 300 W. Tryon Street PO Box 8181 Hillsborough,NC 27278 Phone: (919)245-2495 Or request by mail at: Orange County Housing, Human Rights and Community Development Department 300 W. Tryon Street PO Box 8181 Hillsborough,NC 27278 Is there a procedure for dealing with complaints, disputes and appeals? Although the application process and rehabilitation guidelines are meant to be as fair as possible, Orange County realizes that there is still a chance that some applicants or participants may feel that they are not treated fairly. The following procedures are designed to provide an avenue for resolution of complaints and appeals. During the application process: 9 1. If the applicant feels that his/her application was not fairly reviewed or rated and would like to appeal the decision made about it, he/she should contact Bonnie Hammersley, County Manager (919)245-2300 within five days of the initial decision and voice their concern. If the applicant remains dissatisfied with the decision, the detailed complaint should be put into writing. 2. A written appeal must be made within 10 business days of the initial decision on an application. 3. Orange County will respond in writing to any complaints or appeals within 10 business days of receiving written comments. 4. Should the applicant remain dissatisfied with the decision, a conference between the applicant and the County will be held. During the rehabilitation process: 1. If the homeowner feels that construction is not being completed according to the contract,he/she must inform the contractor and the Rehabilitation Specialist. 2. The Rehabilitation Specialist will inspect the work in question. If he finds that the work is not being completed according to contract, the Rehabilitation Specialist will review the contract with the contractor and ask the contractor to remedy the problem. 3. If the Rehabilitation Specialist finds that the work is being completed according to contract, the complaint will be noted and the Rehabilitation Specialist and the homeowner will discuss the concern and the reason for the Rehabilitation Specialist's decision. 4. If the homeowner is dissatisfied a written appeal detailing the concerns must be submitted within 10 business days for review by the County. Orange County will respond in writing to any complaints or appeals within 10 business day of receiving written comments. 5. If the homeowners concerns are not satisfied, a mediation conference between the homeowner and the contractor may be convened by the Rehabilitation Specialist and facilitated by the County's Housing, Human Rights and Community Development Director. 6. Should the mediation conference fail to resolve the dispute, Orange County will render a written final decision. Final Appeal: After following the above procedures, any applicant or homeowner who remains dissatisfied with Orange County's final decision may appeal to Michael Handley, NCHFA, PO Box 28066, Raleigh,NC 27611-8066, (919)877-5700. Will the personal information provided remain confidential? Yes. All information in applicant files will remain confidential. Access to the information will be provided only to County employees and County employees who are directly involved in the program, the North Carolina Housing Finance Agency, the US Department of Housing and Urban Development(HUD) and auditors. 10 What about conflicts of interest? No officer, employee or other public official of the County, or member of the Governing Board, or entity contracting with the County, who exercises any functions or responsibilities with respect to the SFR program shall have any interest, direct or indirect, in any contract or subcontract for work to be performed with program funding, either for themselves or those with whom they have family business ties, during their tenure or for one year thereafter. Relatives of County employees, Governing Board Members and others closely identified with the County, may be approved for rehabilitation assistance only upon public disclosure before the Governing Board and written permission from NCHFA. What about favoritism? All activities under SFR2014, including rating and ranking applications, inviting bids, selecting contractors and resolving complains, will be conducted in a fair, open and non-discriminatory manner, entirely without regard to race, creed, sex, color or national origin. Who can I contact about the SFR2014 program? Any questions regarding any part of this application or program should be address to: Renee Holmes James Hutcherson Orange County Orange County PO Box 8181 PO Box 8181 Hillsborough,NC 27278 Chapel Hill,NC 27516 (919)245-2495 (919)245-2485 David Saconn Orange County PO Box 8181 Hillsborough,NC 27278 (919)245-2494 These contacts will do their utmost to answer questions and inquires in the most efficient and correct manner possible. This amended Assistance Policy is adopted this 7th Day of October 2014. Ward air Attest 11