HomeMy WebLinkAbout3215 Resolution RESOLUTION NO. 3
A RESOLUTION APPROVING THE RENTAL
REHABILITATION PROGRAM (RRP) GUIDELINES
WHEREAS, the City of Pasco receives through the Tri-Cities HOME Consortium a
regular entitlement from the US Department of Housing and Urban Development (HUD) HOME
Investment Partnerships Program for the purpose of improving the availability of affordable
housing opportunities in Pasco and establishing private and public partnerships; and
WHEREAS, the Pasco City Council approved the Community Housing Improvement
Program (CHIP) Single Family Rehabilitation Program regulations by Resolution on
November 7, 2005; and
WHEREAS, the Rental Rehabilitation Program (RRP) Guidelines have been prepared in
conjunction with the Community Housing Improvement Program (CHIP) Single Family
Rehabilitation Program; NOW,THEREFORE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO:
Section 1. That the Rental Rehabilitation Program (RRP) Guidelines (attached) are
hereby approved.
PASSED by the City Council of the City of Pasco this day of E� 2010
CITY OF PASCO:
Joyce Olson
Mayor
ATTEST: APPROVED AS TO FORM:
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De ra . Clark Leland B. Kerr
City Clerk City Attorney
SUMMARY
RENTAL REHABILITATION PROGRAM REQUIREMENTS
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Applicability Program Requirement
Goals • Assists rental property owners with health,safety, X
security, accessibility and energy improvements ;
• Preserves and restore structural integrity, improve X
physical quality of rental housing stock;
• Improves long-term value and affordability; X
• Assists in preservation of neighborhoods. X
Eligible Landlord • United States citizen,United States non-citizen national X
or qualified alien;
• Rents to households falling within the current low- X
moderate income guidelines;
i
• Makes a minimum contribution of at least 25%of total X
project costs toward improvements;
• Current property taxes; X
• Credit worthy borrower; X
• Sufficient income to support the primary debt and able to X
show evidence of approved funding from primary lender.
Real Property • Within Pasco city limits; X
• Meets the definition of single family housing at 24 CFR X
92.254(a) (1),rental units having 1 to 4 units;
• Fee Simple Title—the borrower must provide a X j
preliminary title report that is satisfactory to the City;
• Meet the definition of affordable,modest housing
contained in 24 CFR 92.254(a)(2); X
• Property is vacant, or displacement of tenant is not likely X
to occur;
• After rehabilitation, meet the property standards X
contained in 24 CFR 92.251(a)(2);
i
• Free of chipped or peeling paint if the home was built X
before 1978, per 24 CFR 92.355;
Manufactured Home • In addition to above real property requirements: X
• Constructed after June 15, 1976 and in accordance with X
standards established under 24 CFR Part 3280;
• Located on land that is held by the first-time homebuyer, X
or the homebuyer has a lease interest in the land for the
entire required affordability period;
• Meet local building and zoning standards; X
• Be fixed to a permanent foundation; X
• Be taxed as real property, i.e. title eliminated; and X
• Be connected to pennarient utility hook-ups. X
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Applicability Program Requirement
Eligible Project • Reasonable and necessary project costs as allowable per X
Costs OMB-A87 and 24 CFR 92.602(b)(1)and(3)
• Loan to Value Ratio no greater than 103.5%of the sales X
price of the home, including required and necessary
closing costs.
• Health& Safety Rehabilitation Costs X
• Structural Rehabilitation Costs X
• Weatherization X
• Incidental Repairs X
• Essential Repairs X
Inspections • Meets HUD Housing Quality Standards X
Required • Meets Environmental Review requirements X
• Meets Lead-Based Paint minimum requirements X
•
Appraisal X
Rehabilitation Loan • Up to$40,000 of direct assistance as silent second X
Terms . Three percent interest rate, 10-year term with interest X
compounded annually;
• $10,000 per unit,maximum of four units per program X
year per owner/co-owner.
• Lien in no less than 2"d position X
• Recapture or resale of 100% of HOME investment if X
default event occurs during period of affordability
(5 years)
• Repayment terms for resale or recapture from net X
proceeds(pro-rated to return some of owner's
investment).
• Acceptable primary loan types(conventional loan, fixed X
rate,no greater than 30 year term),no adjustable rate or
subprime mortgages
• Rent to low-moderate income households during period X
of affordability
• Real property taxes and hazard insurance must be current X
at all times
• Property kept in good condition,repair and permit no X
waste thereof
• The home may not be used for any activities prohibited X
by law.
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Applicability Program Requirement
Other Regulations • Fair Housing Act Equal Credit Opportunity Act(ECOA). X
Applicable • Real Estate Settlement Practices Act(RESPA) X
• Truth in Lending Act(TILA) (Part of federal Consumer X
Credit Protection Act)
• Right to Financial Privacy Act of 1978 [Codified to 12 X
U.S.C. 3401 note]
• Title N of the Personal Responsibility and Work X
Opportunity Reconciliation Act of 1996.
Monitoring • City will monitor the landlord via postal mail or other X
methods throughout the life of the HOME loan to ensure
compliance with residency requirements.
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RENTAL REHABILITATION PROGRAM
SUPPLEMENT TO COMMUNITY HOUSING IMPROVEMENT PROGRAM
PROGRAM FUNDED THROUGH CDBG AND HOME
Page 1 of 18 2/10/10
TABLE OF CONTENTS
RENTAL REHABILITATION PROGRAM..................................................................1
SECTIONI - GOALS.................................................................................................4
SECTION 11 - ORGANIZATIONAL STRUCTURE................................................4
SECTION III - SINGLE FAMILY RENTAL HOUSING IMPROVEMENT
PROCESS ...............................................................................................................4
1. Eligible Landlord. ....................................................................................................4
2. Application and El igibility....................................................................................... 4
3. Evaluation and Cost Estimates................................................................................. 5
4. Commitment and Loan Closing............................................................................... 5
5. Bidding, Contracting and Work............................................................................... 6
6. Contract Completion and Payment.......................................................................... 7
SECTION IV - CRITERIA FOR ELIGIBILITY...........................................................7
1. Eligibility. ................................................................................................................ 7
2. Tenant Income Limits.............................................................................................. 7
3. Project Viability....................................................................................................... 8
4. Value Limit. ............................................................................................................. 8
5. Eligible Dwelling...................................................................................................1. 8
6. Location................................................................................................................... 9
7. Equity....................................................................................................................... 9
8. Soundness. ............................................................................................................... 9
9. Pride of Ownership.................................................................................................. 9
10. Mortgage Payments.............................................................................................. 9
11. Property Taxes...................................................................................................... 9
12. Fire Insurance....................................................................................................... 9
13. Owner's Responsibilities.................................................................................... 10
14. Non-Cooperation................................................................................................ 10
15. Non-Response. ................................................................................................... 10
16. Misrepresentation............................................................................................... 10
17. Forfeiture or Foreclosure.................................................................................... 10
SECTION V - ALLOWABLE REHABILITATION.................................................11
1. Health& Safety Rehabilitation.............................................................................. 11
2. Structural Rehabilitation........................................................................................ 12
3. Weatherization....................................................................................................... 12
4. Incidental Repairs. ................................................................................................. 12
5. Essential Repairs.................................................................................................... 12
6. Non-allowable Improvements................................................................................ 13
7. Miscellaneous Fees and Costs. .............................................................................. 13
SECTION VI - LOAN TERMS AND CONDITIONS.............................................13
1. Terms. .................................................................................................................... 13
2. Assistance Limit/Minimum. .................................................................................. 13
3. Assumptions and Subordinations........................................................................... 14
4. Fair Housing........................................................................................................... 14
5. Annual Recertification/Inspection......................................................................... 14
6. Non-Compliance.................................................................................................... 15
Page 2 of 18 2/10/10
SECTION VII - CONTRACTORS AND BIDDING................................................15
1. Contractor Qualifications......................................................................................1 15
2. Representations and Certifications. ....................................................................... 15
3. Waiver of Lien Certificate. .................................................................................... 15
4. Retainage................................................................................................................ 16
5. Construction Contracts........................................................................................... 16
6. Contractor's Manual. ............................................................................................. 16
7. Contractor Suspension/Disqualification. ............................................................... 16
SECTIONVIII - MARKETING...................................................................................16
SECTION IX - NON-DISCRIMINATION................................................................16
SECTIONX - REAPPLICATION. ...........................................................................17
SECTION XI - EXCEPTIONAL SITUATIONS........................................................17
SECTION XII - CONFLICT OF INTEREST.............................................................17
SECTION XIII - RULES AND RECORDS................................................................17
SECTIONXIV - APPEALS........................................................................................18
SECTION XV - REVIEWS AND AMENDMENTS. ...............................................18
1. Progress Report...................................................................................................... 18
2. Summary Reports................................................................................................... 18
3. Annual Evaluation. ................................................................................................ 18
4. Director's Review.................................................................................................. 18
SECTION XVI - UNDERLYING DOCUMENTS....................................................18
Page 3 of 18 2110/10
SECTION I - GOALS
1. The primary goal of the Rental Rehabilitation Program is to provide
assistance to owners of targeted rental properties to:
a. Assist property owners with health, safety, security, accessibility
and energy efficiency improvements to rental properties;
b. Preserve and restore the structural integrity of the building thereby
improving the physical quality of Pasco's rental housing stock;
c. Improve the long-term value and affordability of the housing in
Pasco.
2. A secondary goal is to "assist" in the preservation of neighborhoods,
giving priority to neighborhoods with high concentrations of poverty.
SECTION 11 - ORGANIZATIONAL STRUCTURE
SEE THE COMMUNITY HOUSING PROGRAM DESCRIPTION.
SECTION 111 - SINGLE FAMILY RENTAL HOUSING
IMPROVEMENT PROCESS
1. Eligible Landlord.
This program is designed to assist small, for profit, independent landlords
in the City of Pasco who own rentals (]-4 units) and who rent to
households falling within the current low-moderate income guidelines. To
this end, the Program will assist eligible landlords, as well as the
beneficiaries (tenants). Additionally, participants may receive assistance
for no more than four (4) units during any program year. Nor may
participants be partners in more than 4 units receiving assistance during
any program year.
2. Application and Eligibility.
a. Application Processing.
The property owner applies for funding using a standard application.
Applications will be processed on a first come, first served basis, with
weight given to the following list of priorities:
i. Vacant properties
ii. Properties where displacement of tenants will not occur
iii. Target low-moderate income neighborhoods
Page 4 of 18 2/10110
iv. Projects with owner contributing greater than 25% minimum
match toward improvements
v. Large family units (three or more bedrooms)
Applications will be accepted until the funds available are exhausted.
The Program may, from time to time, close the application period,
retaining any unprocessed applications in priority status over
applications filed after the Program resumes accepting applications.
b. Eligibility Verification
When an applicant's name nears the top of the waiting list the Program
staff contacts him/her, and obtains all information necessary to
establish his/her eligibility for Program assistance.
c. Confidentiality
Personal and financial information required to establish an owner's
and/or a tenant's eligibility shall be held confidential, subject to
disclosure requirements and procedures under applicable State and
Federal laws.
3. Evaluation and Cost Estimates
a. Rehabilitation Evaluation
When eligibility is confirmed, the Program staff shall obtain
authorization from the owner to proceed with the rehabilitation
evaluation. The Program staff will arrange for the property to be
evaluated, review the owner's requested work list,
contractor/subcontractor list, schedule of fixtures and materials, and
preliminary cost estimate. This evaluation will list essential and
allowable improvements, as well as clarify regulatory issues and
procedures. The applicant will review the evaluation report and
authorize the Program to proceed to the next step.
b. Historic Review
The Program staff will follow the Historic Review guidelines as
delineated in the Community Housing Improvement Program
description.
4. Commitment and Loan Closing.
The Program staff will re,6ew with the owner all proposed work schedules
and the loan amount. On the basis of cost estimates, the Program Staff
will commit loan funds to the owner for the proposed rehabilitation
project(s) and order title insurance on all loans. When the loan security on
the property is assured, Program staff will prepare a Rehabilitation
Agreement, Promissory Note and Deed of Trust for the borrower's
signature. The Deed of Trust will be recorded with the County Auditor.
Page 5 of 18 2/10/10
The loan will be closed by staff and the owner in accordance with
applicable laws and regulations.
g. Bidding, Contracting and Work.
a. Invitations to Bid.
The project will be bid to general contractors qualified by the program,
following the Single Family Housing Rehabilitation Program
guidelines. In the event that the owner will act as general contractor,
the remainder of the work will be bid to qualified subcontractors. The
owner and/or subcontractors must take the appropriate lead based
paint hazard reduction courses as specified by the City (if required)
prior to the commencement of work. Program staff will assist the
owner to understand his/her responsibilities and work with the
contractor to select a level of finish materials and quality of work
acceptable to the Program, in accordance with the Contractor's
Manual.
b. Notice to Proceed.
Notice(s) to Proceed will be issued when all aspects of the agreed-upon
scope of work are in order and the funds have been obligated. The
contractor(s) and/or the Owner will secure the necessary permits prior
to work commencing. Permits not secured are subject to a "double fee"
penalty.
c. Inspections.
Inspections required by the City Inspection Services Division will be
performed by the City Building Inspectors. Inspections for electrical
work will be performed by the Department of Labor and Industries.
Inspections for compliance with the Contractors Manual and for
overall quality of work will be performed by Program Staff. If the work
has not been performed consistently with applicable codes, the
requirements of the of the Contractors manual, and accepted standards
of good practice, Program staff may require the contractor make
changes in the work, which would require additional inspections to
assure that corrections are made.
d. Payment.
Payment for partial and final work completed will be made when
presented by the owner and approved by the Program staff. The owner
must present paid bills for materials and services in order to receive
payments. When the owner, the Building Official, and the contractor
agree that the work billed is completed and acceptable, the Program
staff may approve the acceptance of that work and authorize partial or
final payment. The Program staff shall verify all billings submitted for
Page 6 of 18 2/10/10
construction work and materials and shall certify that the work has
been performed and/or the materials installed.
e. Disputes/Arbitration.
All rehabilitation contracts executed through the Program are binding
upon the parties to the contract. Any disputes arising over the contract
work must be ultimately resolved by those parties. The Program staff
may offer its advice in efforts to mediate disputes. Any disputes that
cannot be resolved informally will be submitted to binding arbitration
for settlement. The arbitrator shall in all cases have authority to order
the Program staff to disburse payment as warranted by his or her
decision.
6. Contract Completion and Payment.
Upon completion of the rehabilitation work the owner is responsible for
repaying his or her loan as agreed. If future problems with materials and
workmanship arise, they will be resolved by the owner and the contractor
with the assistance of the Program staff. The loan payments are still due
on schedule.
SECTION IV - CRITERIA FOR ELIGIBILITV
1. Eligibility.
Applicant eligibility for rehabilitation assistance is based upon the
applicant renting the subject property to low-moderate income renters (as
defined by HUD). Eligible properties must be located within the City
limits and are not limited by neighborhood boundaries. However, priority
is given to target low-moderate income neighborhoods. The tenants' gross
household income must be less than or equal to 80% of area median
income as adjusted for family size.
z. Tenant Income Limits.
a. Income.
An applicant must agree to rent all eligible units to households where
income is 80% of area median income or below as adjusted for family
size by HUD for a period of five (5) years. Tenant income is verified
per Part 5 standards at project application (if occupied), at lease-up (if
vacant) or whenever a new lease is signed during the five-year period.
A qualified tenant will be determined by their gross annual household
income, and shall follow the guidelines developed for the Single Family
Housing Rehabilitation Program.
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b. Base Year.
In the event an eligible unit is occupied, initial qualification of the
tenants shall be based on gross household income for the previous
calendar year. In the event a tenant's income goes over 8o% of AMI
during their tenancy, the next available unit must be rented to an
eligible, qualifying tenant. If the landlord has only one unit, when that
tenant moves out, the unit must be rented to an eligible, qualifying
tenant.
3. Project Viability.
a. Cash Flow.
To be eligible for a loan, the Owner must demonstrate sufficient cash
flown to cover all anticipated building expenses, including reserves and
the new Rental Improvement loan repayment.
b. Profit and Loss.
To be eligible for participation, the Owner must provide Program staff
with most recent Tax Return as well as a current Profit and Loss
statement.
4. Value Limit.
For loans made with HOME funds, the appraised value of the structure
may not exceed the current mortgage limit for FHA mortgage insurance in
the Pasco market. HOME maximum per unit subsidy limits apply subject
to cost allocation and subsidy layering analysis.
5. Eligible Dwelling
a. Type.
The dwelling must be no greater than 4 units, as defined by HUD
regulations 24 CFR 92.2.
b. Property for Sale.
A property offered for sale is not eligible. A property managed by a real
estate company is eligible for assistance.
c. Multiple Owners.
All owners of record must sign the note and Deed of Trust securing the
loan.
d. Eligible Rents.
The Property owner must rent to qualified households at rates at or
below the affordable rental rates established by HUD (HUD's Fair
Page 8 of 18 2110110
Market rents — FMR — adjusted for utilities). The lease rate must not
exceed Fair Market Rate during the 5-year period of affordability.
6. Location
To be eligible for assistance the dwelling must be situated in a residential
zoning district in accordance with Pasco zoning codes. Commercial and
industrial zoned properties are ineligible.
7. Equity
In general, there should be io% equity in the property remaining after the
rental improvement loan is made (based on county assessed value) or 20
equity remaining based on appraised value.
S. Soundness.
The dwelling must be basically sound as determined by the Program staff—
it must be judged capable of remaining in use as a dwelling for the
foreseeable future after the expenditure of Program funds for its
rehabilitation.
9. Pride of Ownership.
An applicant may be declared ineligible for assistance if they evidence
exceptionally low pride of ownership/management in his/her property.
Determination of eligibility may be deferred for a specified period to allow
time for the owner to correct the low pride of ownership/management
condition(s), unless the owner can otherwise demonstrate that the cause of
the condition has been removed.
io. Mortgage Payments.
Mortgage payments must be current at the time the applicant is declared
eligible for assistance, and the owner must evidence the ability to continue
to keep payments current.
11. Property Taxes.
Real property taxes must be current at the time the applicant is declared
eligible for assistance.
12. Fire Insurance.
The property must be insured against loss by fire, and the City of Pasco
acknowledged by the insurer as a loss payee, before funds can be
committed. The owner must also agree to keep the property continuously
insured for the life of the loan. Any subsequent lapse in coverage will be
regarded as an event of default on the loan. The insurance requirement
may be temporarily waived when the owner cannot obtain insurance due
the condition of the property, provided insurance is obtained as soon as
necessary repairs are completed.
Page 9 of 18 2/10/10
13. Owner's Responsibilities.
It is the responsibility of the owner to complete all necessary application
forms, provide financial, title and personal information, tenant
information and cooperate fully with the Program staff in a timely manner.
The owner must provide reasonable access for Program staff, contractors,
and workmen to allow them to accomplish needed repairs and carry out
other tasks as necessary for the successful completion of scheduled
rehabilitation work. The owner shall be responsible for signing notes,
deeds of trust and other loan documents; signing work contracts; and,
monitoring and accepting work reasonably completed according to the
contract. The owner shall cooperate with the Program staff to achieve the
efficient execution of work without delays and repay loans as agreed. An
owner who withdraws his or her application before a loan is closed and
security documents signed, shall be responsible for payment of any fees or
costs incurred.
14. Non-Cooperation.
In order to achieve the Program's goals it is essential that participating
owners cooperate fully with the Program staff in order that construction
and administrative costs, as well as processing time, can be kept to a
minimum. If while in process, an owner is not cooperating or meeting
his/her responsibilities, the Program staff may declare the owner ineligible
for further assistance and close out the file. An owner who is found
ineligible for the reason non-cooperation may reapply. To be considered
for future assistance sufficient evidence that circumstances have changed
must be presented to warrant reconsideration.
15. Non-Response.
If an owner does not respond to the Program's efforts to contact him or
her, the owner shall be mailed a letter of notification. If that is not
successful, the owner will then be declared ineligible, with a letter sent to
that effect and acknowledgement of his/her opportunity to reapply in the
future.
16. Misrepresentation.
Any owner who knowingly misrepresents information to the Program
pertinent to his/her eligibility for assistance shall be declared ineligible.
Applicants determined ineligible for reason of misrepresenting their
situations may not be considered for future assistance.
17. Forfeiture or Foreclosure.
An owner who loses a house or property through a forfeiture or foreclosure
type of action, which results in a loss of funds to the City, will be ineligible
for further assistance.
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SECTION V - ALLOWABLE REHABILITATION
All repairs and improvements must comply with requirements as specified
in the Contractor's Manual. Repairs normally eligible for Program
financing are described as follows:
1. Health&Safety Rehabilitation
Repairs allowed are:
a. Electrical repairs;
b. Plumbing repairs;
c. Repair, cleaning or proper installation of furnaces or other space
heating equipment or systems needed to provide adequate and
affordable heating of the dwelling;
d. Clean up of former methamphetamine labs including contracting of
environmental cleaning companies, cleaning or removal of
contaminated surfaces/absorbent materials (such as carpeting and
drapes) removal and replacement of contaminated surfaces (such as
drywall, floor coverings and counters), painting, air ventilation
system cleaning, and plumbing system flush and clean-out;
e. Installation of flooring materials including sub-floors;
f. Repair of floor structures, stairs, and porch decks, where
hazardous, and repair or installation of handrails and guardrails
where insecure or missing - work is limited to existing area of
structures;
g. Installation of door locks and window sash locks;
h. Installation of emergency egress windows/doors and smoke
detectors;
i. Installation of appropriate venting in kitchens and bathrooms;
j. Installation of wheelchair ramps, grab-bars, and other safety or
accessibility devices required by a disabled occupant;
k. Correction or abatement of lead-based paint hazards and asbestos
hazards by methods approved b HUD, State of Washington and US
Environmental Protection Agency. Performance of Safe Work
Practices, Interim Controls, or abatement of lead-based paint, as
required by and using methods specified in HUD's lead safe
housing regulation and Guidelines for the Evaluation and Control of
Lead-Based Paint Hazards in Housing, including such paint that is
defective, disturbed during repairs, or determined hazardous by a
Risk Assessor;
1. Demolition of detached accessory building (garage, sheds) when
hazardous;
m. Repairs to or installation of kitchen base and wall cabinets,
including countertops, when necessary to provide adequate space
for sanitary food storage and preparation.
n. Repair, removal or replacement of appliances, such as a cooking
surface or oven, or combination and refrigerators;
Page 11 of 18 2/10/10
2. Structural Rehabilitation.
Repairs allowed are:
a. Replacement of the roof, including repair or replacement of
sheathing;
b. Exterior painting of the dwelling and repairs to brick exteriors or
re-siding of the house when the existing siding can no longer
provide an effective weather barrier;
c. Exterior carpentry repairs;
d. Repairs to the foundation or other portions of the support structure
of the dwelling;
e. Repairs to walls and ceilings;
f. Repairs to chimneys;
g. Repair or replacement of defective interior doors.
3. Weatherization.
Improvements allowed are:
a. Installation of insulation, and ventilation and vapor barriers where
appropriate;
b. Installation of storm window, replacement windows, repair of
broken glass, screens;
c. Replacement of entry doors;
d. Installation of insulation or heat tapes as necessary;
e. Caulking and weather stripping as necessary to reduce air
infiltration.
4. Incidental Repairs.
Other repairs may be made when necessary to properly accomplish repairs
allowed under Sub-sections 1 through 3 above, or to correct unavoidable
damages caused to other parts of the home in making allowed repairs.
5. Essential Repairs.
The Program staff will identify all repairs indicated by the survey which
are essential to remove an immediate threat to the health or safety of the
occupants or preserve the integrity of the structure. Connecting a home to
the city sewer system when a sewer lateral is available within 200 feet of
the property is an essential repair. Repairs needed to bring the home into
compliance with HUD Section 8 Housing Quality Standards, are also
deemed Essential Repairs.
The property must be able to pass a Pasco Rental Inspection or HQS
inspection upon completion of the project. If project funds are not
sufficient to ensure that that all required repairs are resolved, the owner
must be able to demonstrate additional funding. (The HQS Inspection is
deemed to be a basic, common level of repair and maintenance for the
owner to follow.)
Page 12 of 18 2/10/10
The Program staff will compare the owner's work list with the essential
repairs and explain to the owner the requirements of completing all
repairs. If the owner declines to authorize completion of all essential
repairs, he/she will be considered to have voluntarily withdrawn their
application.
6. Non-allowable Improvements.
The following improvements may not be financed through the Program:
a. conversion of a single-family dwelling to a two or more-family
dwelling;
b. conversion of a commercial or industrial property to a single family
dwelling;
c. provision of or repairs to moveable appliances except for
refrigerators in specific circumstances;
d. use of materials, fixtures, or equipment which exceeds in cost the
customarily used in the locality for properties of similar type;
e. work on unattached garages and out buildings;
f. area increases of structures;
g. enclosing of open areas, such as porches and decks;
h. Labor performed by the owner or tools purchased by the owner.
7. Miscellaneous Fees and Costs.
Funds to pay certain loan-related fees and costs for which the owner is
responsible may be included in Program loans, including:
a. Recording fees;
b. Credit report fees;
c. Sec. 1o6 Historic Preservation Review fees;
d. Title Insurance premiums;
e. Lead Testing and Assessment;
f. Lead Clearance Test (1 per unit).
g. Building permit and inspection fees.
SECTION VI - LOAN TERMS AND CONDITIONS.
1. Terms.
All loans shall be secured as liens on the property and shall bear an
interest rate of 3% rate, not exceeding a 10-year term, with interest
compounded annually. The minimum rehab monthly loan payment will
be $1oo.00. In the event the unit(s) is (are) vacant, the loan will be
deferred during construction. Title insurance is required for all loans.
2. Assistance Limit/Minimum.
No owner may receive more than $1o,000 per unit in Program assistance
(maximum of $40,0oo). The minimum loan for the Program shall be
$5,000.00. There is no penalty for early pay-off.
Page 13 of 18 2/10/10
3. Assumptions and Subordinations.
a. Assumptions. Loans may not be assumed.
b. Subordination. The Director of Community & Economic
Development may allow the subordination of a Program lien
against a rehabilitated property upon the request of the owner,
provided the request meets the criteria of the Community Housing
Improvement Program. Subordination is permitted for the owner to
refinance only existing superior loans to obtain a lower interest
rate, lower payment or a shorter term. Loan to Value Ratio no
greater than 103.5% of the sales price of the home, including
required and necessary closing costs. No cash proceeds will be
returned to the owner.At closing any over payment will be returned
to the City of Pasco as principal reduction of the second lien.
4. Fair Housing.
The owner agrees to meet all Fair Housing Guidelines, and attend annual
Fair Housing Training as provided locally and verified by sign-in sheets.
g. Annual Recertification/Inspection
a. Recertification -Income.
The owner agrees to provide the gross annual income as well as family
size of their tenants whenever a new lease is signed during the 5-year
period. The owner thrill take whatever steps necessary to ensure that
the information is provided to the Program Manager, who will then
certify income guideline compliance. In the event that an owner rents
to a tenant over 80% of AMI,the owner will be considered in default.
b. Recertification-Rent.
The owner agrees to provide copies of signed leases for all tenants as
they are signed. In the event the rent rate exceeds HUD's published
FMR, the owner will be considered in default.
c. HQS Inspection.
The owner agrees to make the property and each unit available for an
interior/exterior HQS inspection on an annual basis or as requested by
the Program Manager. Any HQS violations must be corrected within
the timeframe prescribe by the Program Manager or the property
owner will be considered in default.
d. Rental License/Inspection
The owner agrees to provide copies of current rental licenses for all
units as they are obtained and renewed. The owner agrees to make the
property and each unit available for an interior/exterior Rental
inspection on a biannual basis or as requested by the Program
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Manager. Any Rental Inspection violations must be corrected within
the timeframe prescribed by the Inspection Program Manager or the
property owner will be considered in default.
6. Non-Compliance.
In the event of non-compliance with program guidelines the property
owner will be considered in default. The City's remedies may include the
following:
a. The entire note may be accelerated and made due and payable in
full.
b. In the event the note is not paid, the City may seek foreclosure in
order to satisfy the debt.
c. The interest rate may be increased to prime plus 2% retroactive to
the date of non-compliance.
SECTION V11 - CONTRACTORS AND BIDDING
1. Contractor Qualifications.
Licensed Bonded Contractors. All rehabilitation work contracted through
the Program shall be performed by licensed, bonded contractors, or by
persons working under their direct supervision. The only exception is for
work performed by the property owner. Contractors shall have a current
City business license. The Program staff shall review the license, bond,
and insurance of all sub-contractors selected by the owner to work on the
project. No contractor excluded from the Single Family Housing
Rehabilitation Program may work on any Rental Rehabilitation Program
project. Contractors and owners acting as contractor must perform
craftsman-like work meeting City Codes, be able to complete contracted
work in a timely and businesslike manner, be licensed, bonded and
insured in the State of Washington, be EPA certified or trained to perform
lead-based paint abatement or interim controls as required, and not be
suspended or debarred from work on State or Federally funded projects.
2. Representations and Certifications.
All contractors shall agree to equal opportunity and affirmative action
employment standards required by HUD regulations of contractors
working on projects financed in whole or in part by Federal funds as
disclosed in contract Representations and Certifications. All contractors
shall provide proof of comprehensive public liability insurance in amounts
determined by the Program staff.
3. Waiver of Lien Certificate.
The owner must submit a Waiver of Lien Certificate for all work, including
one from each contractor, subcontractor and supplier indicating the
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amount of payment and work completed. Additionally all material
receipts for which the owner requires reimbursement must be presented.
4. Retainage.
The Program staff may withhold up to 5% retainage of the contract
amount for up to 6o days after completion of work or until requirements
for public works projects are met and Contract Completion Certified.
Contractors/owners are responsible for payment of all city, state and
federal taxes and shall obtain all necessary construction permits.
5. Construction Contracts.
The owner enters into a two party contract with the contractor or
subcontractors. The terms of the contract shall be binding on all parties to
the contract. The Program cannot be considered to be a party to the
contract.
6. Contractor's Manual.
All work performed under the Rental Rehabilitation Program shall meet or
exceed the material and workmanship specifications and comply with the
General Provisions as listed in the Community Development Housing
Rehabilitation Program Contractor's Manual and in any amendments
thereto. In the event an Owner is performing work, they must purchase a
copy of the Contractor's Manual from the Program Manager.
7. Contractor Suspension/Disqualification.
A contractor may be disqualified from further participation in the Program
who fails to meet minimum standards of professionalism, as evidenced by
poor quality work, illegal or unethical business practices, failure to
perform the contract, or refusing to cooperate in a timely manner with
either the Program, owner, or other contractors
SECTION VIII - MARKETING.
The Single Family Rental Rehabilitation Program will have an affirmative
marketing program for the housing rehabilitation services. The
affirmative marketing program shall include provisions for the solicitation
of applications from minority property owners.
SECTION IX - NON-DISCRIMINATION.
The Single Family Rental Rehabilitation Program shall be administered
and assistance rendered without discrimination due to race or color,
ethnic origin, religion, creed, gender, age, disability, marital or familial
status or sexual orientation.
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SECTION X - REAPPLICATION.
Applications for assistance by owners of properties pre-dously assisted
with CDBG, NSP or HOME funds may be considered for assistance
provided the previous assistance was used more than five (5) years
previous to the request for assistance under this program, subject to
appropriate federal regulations. Additionally, there may be no
outstanding federal assistance on the subject property.
SECTION XI - EXCEPTIONAL SITUATIONS.
It is understood, that there may be special circumstances applying to some
applicants which are not individually addressed in this Program Outline.
In such cases Program staff will, after evaluating the application, consult
with the Director of Community & Economic Development who may
authorize assistance as appropriate to meet the goals of the Program. The
reason(s) for the exception shall be documented in writing in the owner's
file.
SECTION XII - CONFLICT OF INTEREST.
Ineligible Applicants. No person directly involved in the implementation
of, or who serves in a decision or policy-making capacity with the Rental
Improvement Program shall derive profit, advantage, or benefit therefrom
except his or her lawful compensation while in such capacity.
SECTION XIII - RULES AND RECORDS.
The Program staff, and Community&Economic Development Department
shall establish and maintain such administrative procedures, rules and
forms as needed to reasonably and efficiently administer their
responsibilities in conformity with Program goals. The Program staff shall
maintain performance and financial records which support all requested
draws of Community development and HOME funds, evidence
expenditure of all funds and account for all loans of public monies and
income to the Program. All files, computerized forms, data bases and
computer software programs, data records, computerized reports and
documents, records, maps, and reports prepared and maintained pursuant
to this Program shall be property of the City of Pasco, Washington and
delivered to the office of the Community Development Department, City
Hall, upon request of the Director of Community & Economic
Development and shall be accessible to the Director of Community &
Economic Development or designated representative for review and audit.
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SECTION XIV - APPEALS.
Administrative decisions of the Program staff or the Building Official may
be appealed to the Director of Community & Economic Development,
except that appeals involving decisions or interpretations of the Building
Code shall be referred to the appropriate appeals board established in said
Code. Appeals of administrative rulings of the Director of Community- &
Economic Development, and questions on overall Program policy or
operation may be brought before the Community Development Board,
SECTION XV M REVIEWS AND AMENDMENTS.
1. Progress Report.
A progress report on the Program and a financial statement shall be
prepared and submitted by the Program staff to the Director of
Community & Economic Development quarterly, and at such other times
as may be requested by the Director. The Director of Community &
Economic Development shall evaluate the progress and administration of
the Program annually.
2. Summary Reports.
The Program staff shall make a monthly summary report to the Director of
Community & Economic Development, detailing activities and
expenditures.
3. Annual Evaluation.
An annual evaluation of the Program and its progress shall be submitted
by the Program staff to the Director of Community & Economic
Development by October 31st of each calendar year.
4. Director's Review.
The Director will receive and evaluate all reports, evaluate ways in which
Program administration may be improved in the future, and make reports
on the Program to the City Manager/City Council as requested.
SECTION XVI - UNDERLYING DOCUMENTS.
The Rental Improvement Program is an expansion of the Single Family
Housing Rehabilitation Program; therefore the Single Family Housing
Rehabilitation Program policy and procedures will form the underlying
foundation. In the event that some portion of this pilot program
description is not clear, the source document for clarification will be the
Program Description for the City of Pasco's Single Family Housing
Rehabilitation Program as well as the standard operating procedures for
the program.
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