HomeMy WebLinkAboutPolicy - Orange County Assistance Policy for the 2017 Cycle of the Essential Single-Family Rehabilitation Loan Pool PV
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Orange County
Assistance Policy
For the 2017 Cycle of the
Essential Single-Family Rehabilitation Loan Pool
What is the Essential Single-Family Rehabilitation Loan Pool?
Orange County has been awarded Membership by the North Carolina Housing
Finance Agency ("NCHFA") under the 2017 cycle of the Essential Single-Family
Rehabilitation Loan Pool ("ESFRLP17"). This program provides Members with funds
via a "loan pool" to assist with the rehabilitation of moderately deteriorated homes
that are owned and occupied by lower-income, special need households. ESRLP17
assists eligible households by facilitating aging in place, meeting minimum housing
code requirements, promoting long-term affordability, lowering operating costs, and
stabilizing pre-1978 homes that include children aged 6 or under whose health is
threatened by the presence of lead hazards.
Orange County has been allocated an initial set-aside of$175,000 which it plans to
apply toward the rehabilitation of five houses in Orange County. After demonstrating
successful use of the initial set-aside, the County may access additional funds, when
available, on a unit-by-unit basis from the ESFRLP17 loan pool.
This Assistance Policy describes who is eligible for assistance under ESFRLP17,
how applications for assistance will be ranked, what the terms of assistance are, and
how the rehabilitation process will be managed. Orange County has designed the
ESFRLP17 project to be fair, open and consistent with its approved application for
funding and with ESFRLP17 Program Guidelines.
The funds provided by NCHFA come from the US Department of Housing and Urban
Development's (HUD) Federal HOME Investment Partnerships Program. Assistance
for construction-related costs (hard costs) will be provided as no interest, no payment
loans which are forgiven at the rate of$3,000 per year. Non-construction-related
costs (soft costs including lead/asbestos inspections/clearances, radon testing and
environmental reviews) will be provided in the form of a grant.
Who is Eligible to Apply?
There are three major requirements to be eligible for ESFRLP17 assistance:
1) The housing unit to be rehabilitated with ESFRLP funds must be located in
Orange County, and must be owner-occupied. The household occupying the unit
must have an elderly, disabled and/or veteran (see definitions) fulltime household
member or a child aged 6 or under if there are lead hazards in the home;
2) The gross annual household income must not exceed 80% of the Area Median
Income for the County (see income limit table on the following page) and;
3) The cost of rehabilitation cannot exceed the ESFRLP17 Program limit of$25,000
and must include all Essential Rehabilitation Criteria as described in the
ESFRLP17 Administrator's Manual (available online at www.NCHFA.com).
Unfortunately, not all homes can be rehabilitated to meet the Essential Rehabilitation
Criteria with the limited funding available. Some otherwise-eligible households may
be deemed ineligible for assistance because their homes fail this test.
What Types Of Houses Are Eligible?
Properties are eligible only if they meet all of the following requirements:
• The property must require at least $5,000 of improvements to meet ESFRLP
Property Standards or the local minimum housing code.
• Site-built and off frame modular units are eligible for assistance. Manufactured
housing is eligible for assistance if the foundation and utility hookups are
permanently affixed including removal of all transporting equipment (e.g. wheels,
axles, tongue) and installation of a full masonry foundation and tie-downs.
• No more than fifty percent (50%) of the total area of the unit may be used for an
office or business (e.g. day care). Program funds may only be used to improve
the residential portion of mixed-use buildings.
• 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 home. Orange County's
Rehabilitation Specialist will determine the presence of any known environmental
hazards/nuisances on the site and if they can be removed through rehabilitation.
• Properties cannot be located in the right-of-way of any impending or planned
public improvements. Orange County staff will assist in making this determination.
• The property cannot be located on a site that is endangered by mudslides,
landslides or other natural or environmental hazards. If needed, the
Rehabilitation Specialist will work with the homeowner to make this determination.
• The property may be located in the 100 year flood plain if the lowest finished floor
level (verified by an elevation certificate provided by the homeowner) is above the
base flood elevation and the property will be covered by flood insurance. The
property must be in compliance with Orange County's flood plain ordinance. All
things considered equal, properties located outside the 100-year flood plain will
be given priority over properties located in the 100-year flood plain. (Orange
County will verify whether the home is in the flood plain.)
• The property cannot have been repaired or rehabilitated with public funding of
$25,000 or more within the past 10 years without NCHFA approval.
2016 Income Limits for Orange County's
Essential Single-Family Rehabilitation Loan Pool
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1 $14,850 $24,750 $39,600
2 $17,000 $28,300 $45,250
3 $19,100 $31,850 $50,900
4 $21,200 $35,350 $56,550
5 $22,900 $38,200 $61,100
6 $24,600 $41,050 $65,600
7 $26,300 $43,850 $70.150
8 1 $28,000 1 $46,700 $74,650
*Income limits are subject to change based on annually published HUD HOME Limits.
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How are applications ranked?
There are many more ESFRLP-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. If there are more eligible applicants with eligible
houses than can be treated with existing funding, Orange County may be able to
treat additional houses with unrestricted pool funds. Pool applicants will come from
the original applicant list and be considered according to which received the most
points. If alternate pool applicants are not identified on the original applicant list and
must be solicited, the solicited, eligible, pool applicants will be selected on a first
come first served basis.
Priority Ranking System for Orange County's
2017 Single-Family Rehabilitation Loan Pool
Household with a child age 6 or under with lead hazards in the home 5
Elderly Head of Household (62 or older) 4
Disabled Head of Household 4
Veteran Head of Household 4
Disabled, Elderly or Veteran Household Member (not Head of Household) 2
Less than 30% of County Median Income 3
30% to 50% of County Median Income 4
50% to 80% of County Median Income 3
Definitions under EESFRLP17 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 major 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 household who has resided in the
dwelling unit for at least 3 months prior to the submission of the family's
application.
• Veteran: A person who is a military veteran, is defined as one who served in the
active military, naval, or air service (i.e. Army, Navy, Air Force, Marine Corps, and
Coast Guard; as a commissioned officer of the Public Health Service; or as a
commissioned officer of the National Oceanic and Atmospheric Administration or
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its predecessors), and who was discharged or released there from under
conditions other than dishonorable.
Recipients of assistance under ESFRLP will be chosen by the above criteria without
regard to race, color, religion, national origin, sex, familial status and disability.
What Are The Terms of Assistance Under ESFRLP17?
The form of ESFRLP assistance is a 0% interest, forgivable loan covering the hard
costs associated with the rehabilitation of the home and a grant for the soft costs.
These will be two separate documents or sets of documents.
The Loan: To provide assistance to households selected for the project, NCHFA will
create loan documents including a Promissory Note and Deed of Trust covering hard
costs for the rehabilitation in an amount not to exceed $25,000. This loan covering
the hard costs remains 0% interest and forgivable at $3,000 per year for as long as
the owner resides in the home or until the balance is reduced to $0. The term of the
loan is dependent upon the loan amount and the number of years it takes to bring the
balance of the loan to $0 when forgiven at $3,000 per year. For example, if the
amount of the loan is $21,452, then the term is 8 ears ($21,000 forgiven over the
first 7 years and $452 forgiven at the end of the 8 h year). The maximum term of the
loan will be nine years.
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 to NCHFA, either in
installments or as a lump sum payment. Furthermore, under certain circumstances
NCHFA may allow assumption or refinancing of the loan. 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
so 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.
The Grant: To pay for soft costs including application outreach/intake/management,
environmental reviews/inspections/testing and project assessment/documentation/
estimating/bidding, NCHFA will create a Grant Agreement not to exceed $10,000.
The grant has no repayment or recovery terms.
What Kinds Of Work Will Be Done?
Each house selected for assistance must be rehabilitated to meet ESFRLP17
Rehabilitation Criteria. That means every house must, upon completion of the
rehabilitation:
• meet the more stringent requirements of either NCHFA's Essential Property
Standard or Orange County's Minimum Housing Code (These are so-called
"habitability standards"which set minimum standards for decent, safe and
sanitary living conditions.) Additionally, the home must meet applicable Lead-
Based Paint regulations 24 CFR part 35.
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• retain no "imminent threats" to the health and safety of the home's occupants 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 an infestation of insects or a
crawlspace that is too damp).
These requirements are spelled out in full in the ESFRLP17Administrator's Manual
which you may view, at reasonable times, upon request, at the Housing, Human
Rights and Community Development office of Orange County or anytime online at
www.NCHFA.com.
In addition to the above items that must be done to satisfy NCHFA requirements, the
scope of work may include approved items meant to reduce future maintenance and
operational costs or to further protect homes from natural disasters and/or home
modifications designed to enable greater accessibility for household members to
function more independently as they age.
Once the rehabilitation is complete, major systems in the home that, with reasonable
maintenance and normal use, should be capable of lasting another 5 years include:
structural support, roofing, cladding and weatherproofing, plumbing, electrical and
heating/cooling systems.
Of course, contractors performing work funded under ESFRLP17are responsible for
meeting all local requirements for permits and inspections. All work done under the
program must be performed to meet NC State Residential Building Code standards.
(This does not mean, however, that the whole house must be brought up to current
Building Code Standards.)
What About Lead-based Paint?
Until it was discovered to be a health hazard, 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 ESFRLP17, 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 parts 35. If
required, lead-based paint hazard reduction and/or abatement will be performed by
contractors who are trained and certified to perform such work.
It may be necessary for the household to relocate during the construction process for
protection against lead poisoning. If relocation is required, it shall be the
responsibility of the homeowner to pay for the relocation.
Who Will Do The Work On The Homes?
Orange County is obligated under ESFRLP17 to ensure that quality work is done at
reasonable prices and that all work is contracted through a fair, open and competitive
process. To meet these requirements, Orange County will invite bids only from
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licensed general contractors who are part of an "Approved Contractors Registry". For
additional information about procurement and disbursement procedures, please refer
to the ESFRLP17 Procurement and Disbursement Policy for Orange County.
• All qualified members of the Approved Contractors Registry will be invited to bid
on each job, and the lowest responsive and responsible bidder will be selected for
the contract.
• All contractors working on pre-1978 units must be Renovate, Repair and Paint
Rule (RR&P) Certified Renovators working for Certified Renovation firms.
• Homeowners who know of quality rehabilitation contractors that are not on the
approved contractors' registry are welcome to invite them to apply.
What Are The Steps In The Process, From Application To Completion?
You now have information about how to apply for the Essential Single-Family
Rehabilitation Loan Pool and what type of work can be done through the Program.
Let's go through the steps for getting the work done:
1. Completing a pre-application form: Homeowners who wish to apply for
assistance must do so by October 31, 2017. Apply by contacting Renee D.
Holmes, Housing Program 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 and must
complete a new pre-application form.
2. Client Referral and Support Services Many homeowners seeking assistance
through the Essential Single-Family Rehabilitation Loan Pool may also need other
services. If the ESFRLP staff meets the homeowner during the application
process, they will provide pamphlets and a list of the agencies with contact
information for the resources and programs available in the County. For
households that meet the requirements of the pre-application step and qualify to
receive assistance through the ESFRLP program, additional verbal discussion will
be offered during the Screening of applicants and/or Pre-rehab inspection steps
of the program.
3.
4. Preliminary inspection: Orange County's Rehabilitation Specialist will visit the
homes of eligible households to determine the need and feasibility of the home for
rehabilitation.
5. Screening of applicants: Applications will be 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,
2017. Household income will be verified for program purposes only (information
will be kept confidential). NCHFA will verify ownership of the property by
conducting a title search. From this review, the five most qualified applicants will
be chosen according to the priority system described above; there will be a list of
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two (2) alternates. Orange County will then submit to NCHFA an ESFRLP17 Loan
Application and Reservation Request for each potential borrower for approval.
Applicants not selected for ESFRLP assistance will be notified in writing.
6. Written agreement: A Homeowner Written Agreement, between the homeowner
and Orange County, will be executed as part of the Loan Application and
Reservation Request procedure (that formally commits funds to a dwelling unit).
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
203(b) limits established by HUD and defines the ESFRLP maximum amount and
form of assistance being provided to the homeowner, the scope of work to be
performed, the date of completion and the rehabilitation criteria and standards to
be met.
7. Pre-rehab inspection & 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, roof leaks, etc. Each unit will be evaluated for energy-saving
opportunities such as air-sealing and duct-sealing as well as for environmental
concerns, such as lead based paint hazards, radon and asbestos.
8. 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 contractors.
9. Lead and Other Testing: Orange County will arrange for a certified firm to
inspect all the pre-1978 constructed homes for potential lead and asbestos
hazards. All homes will be tested for radon. The owner will receive information
covering the results of the tests and any corrective actions that will be needed as
part of the rehabilitation.
10.Bidding: The work write-up and bid documents will be conveyed to all
contractors from the Approved Contractors Registry who will be given no less
than seven days in which to inspect the property and prepare bid proposals.
Each contractor will need access to all parts of the house in order to prepare a
bid. A bid opening will be conducted in the Orange County Housing, Human
Rights and Community Development Department, located at 300 W. Tryon Street,
Hillsborough, NC 27278, at a specified date and time, with all bidders invited to
attend.
11.Contractor selection: Within 72 hours of the bid opening the winning bidders
will be selected. All bidders and the homeowner will be notified in writing of 1) the
selection of the winning bid, 2) the amount of the winning bid; 3) the amount of
the County's cost estimate, and 4) the specific reasons for the selection, if other
than the lowest bidder was selected.
12.Loan closing and contract execution: Loan documents (Promissory Note and
Deed of Trust) will be prepared by NCHFA as the lender and executed by the
homeowner. By law, homeowner's have the right to hire legal representation of
their choosing at loan closing. If a homeowner does not have "representation" at
the closing, the borrower must sign a NCHFA "Unrepresented Borrower Affidavit".
Rehabilitation contract documents will be executed by the homeowner and
contractor with Orange County signing on as an interested third party prior to the
commencement of any construction. Orange County will facilitate with the loan
closing and recordation of these documents and forward the recorded documents
to NCHFA.
13.Pre-construction conference: A pre-construction conference will be held at the
selected applicant's home. At this time, the homeowner, contractor and ESFRLP
Orange County program representatives will discuss the details of the work to be
completed. 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. Orange County will issue a "proceed order" formally
instructing the contractor to commence work by the agreed-upon date.
14.Construction: The contractor is responsible for obtaining and posting all permits
for the project before beginning work. Orange County ESFRLP Program staff will
closely monitor the contractor during the construction period and local Code
Enforcement Officials will inspect the work. To protect personal property the
homeowner will be responsible for working with the contractor toward clearing
work areas of personal property as needed as much as practicable. The
contractor will be responsible for all clearing and cleaning activities necessary due
to construction activities.
15.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 in writing as a contract amendment ("change order"). The owner,
contractor and two Orange County personnel must execute any change order
agreements to the construction contract.
16.Progress payments: The contractor is entitled to request two partial payments
and a final payment. When a payment is requested, the Rehabilitation Specialist
will inspect the work within three days.
17.Closeout: When the Rehabilitation Specialist and the Homeowner are satisfied
that the contract has been fulfilled, the Homeowner, Project Administrator and
Rehabilitation Specialist will sign off on the work. All material and workmanship
will be guaranteed by the contractor for a period of one-year from the date of
completion of the work.
18.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 and materials to the homeowner. The contractor and Rehabilitation
Specialist will go over operating and maintenance requirements for the new
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equipment, materials and appliances and discuss general maintenance of the
home with the Homeowner. The Homeowner will have the opportunity to ask any
final questions about the work.
19.Final loan amount determination: If, upon completion of all rehabilitation work,
the contract price has changed due to the effect of change orders, NCHFA will
prepare an estoppel for a loan reduction or modification agreement for loan
increases as necessary at the time of closeout of the unit to modify the loan
amount when there is a need for a change order involving a change in the original
loan amount). The loan will remain the property of NCHFA, with original
documents remaining there for storage and "servicing. Please note that it is the
responsibility of the owner to record an estoppel if they wish this to be reflected in
the Deed of Trust.
The warranty period: It is extremely important that any problems with the work that
was performed be reported by the homeowner to the Orange County Rehabilitation
Specialist or other representative, as soon as possible in writing. All bona fide
defects in materials and workmanship reported within one year of completion of
construction will be corrected free of charge by the Contractor.
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 October 2, 2017.
• Applications must be turned in at the Orange County Planning Office by 5:00 PM
on October 31, 2017.
• Selection of units will be made on November 30, 2017.
• All rehabilitation work must be under contract by December 31, 2019.
• All rehabilitation work must be completed by June 30, 2020.
How do I request an application?
Contact:
Renee D. Holmes, Housing Program Coordinator
Orange County
P.O. Box 8181
Hillsborough, NC 27278
Phone: (919) 245-2495
Or: pick up an application at the Housing, Human Rights and Community
Development Department, located 300 W .Tryon Street, 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.
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Durinq the application process:
1. If an 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.
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 the contract, the Rehabilitation
Specialist will review the contract with the contractor and ask the contractor to
correct the problem.
3. If problems persist, the homeowner must put the concern in writing and a
mediation conference between the homeowner and the contractor may be
convened by the Rehabilitation Specialist and facilitated by the Orange County
Housing, Human Rights and Community Development Director.
4. Should the mediation conference fail to resolve the dispute, Orange County will
render a written final decision.
5. 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.
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) 877-5627.
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 Orange 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.
What about conflicts of interest? No employee or board member of Orange
County, or entity contracting with Orange County, who exercises any functions or
responsibilities with respect to the ESFRLP17 project shall have any interest, direct
or indirect, in any contract or subcontract for work to be performed with project
funding, either for themselves or those with whom they have family or business ties,
during their tenure or for one year thereafter. Relatives of Orange County employees
or of Orange County board members and others closely identified with, may be
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approved for rehabilitation assistance only upon public disclosure before the Orange
County Board of Commissioners and written permission from NCHFA.
What about favoritism? All activities under ESFRLP17, including rating and ranking
applications, inviting bids, selecting contractors and resolving complaints, will be
conducted in a fair, open and non-discriminatory manner, entirely without regard to
race, color, religion, national origin, sex, familial status and disability.
Who can I contact about the ESFRLP17 program? Any questions regarding any
part of this application or program should be addressed to:
Renee D. Holmes
Orange County
P.O. Box 8181
Hillsborough, NC 27278
Phone: (919) 245-2495
James Hutcherson
Orange County
P.O. Box 8181
Hillsborough, NC 27278
Phone: (919) 245-2485
David Saconn
Orange County
P.O. Box 8181
Hillsborough, NC 27278
Phone: (919) 245-2494
This Assistance Policy is adopted this day of 2017.
Mark Dorosi , Chair
AAttedlstl_�� Orange Co my B
of Commissioners
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