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Home My WebLink AboutReso 96-094 - Authorizing consolidation of the Mobilehome Repair Program & Home Repair Program & Establishment of the Emergency Repair Program .._ �.__ , � . � RESOLUTION NO. �!p—q� A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING AUTHORIZING CONSOLIDATION OF THE MOBILEHOME REPAIR PROGRAM AND HOME REPAIR PROGRAM AND ESTABLISHMENT OF THE EMERGENCY REPAIR PROGRAM. WHEREAS, the City of Redding has previously adopted a Rehabilitation Loan Policy and Mobilehome Repair Program Policy by City Council action; and WHEREAS, the City Council deems it to be in the best interest of the citizens of the City of Redding to consolidate both the Mobilehome Repair Program and Home Repair Program into the Emergency Repair Program and the afformentioned policies be amended and a new policy be adopted as set forth in Exhibits "A," "B," and "C," attached hereto; and WHEREAS, it has been determined that this matter is categorically exempt from the provisions of CEQA. NOW, THEREFORE, BE IT RESOLVED that the amendments to the Rehabilitation Loan Policy, and Mobilehome Repair Program Policy, and establishment of the Emergency Repai� Program Policy, attached hereto as Exhibits "A," "B," and "C," are hereby approved and adopted. I HEREBY CERTIFY that the foregoing resolution was introduced and read at a regular meeting of the City Council of the City of Redding on the 7th day of Mav, 1996, and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: P. Anderson, R. Anderson, Kehoe, Murray and McGeorge NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None ABSTAIN: COUNCIL MEMBERS: None . G � _-.. DAVID L. OR ayor � . __ City of Redding ATTEST: _ . � CONNIE .S7R0 �M�'jYER, Ci rk FORPJI APPROVED: f/, '�� , - � � /� � G'.� ' �"'t,�12 p" "Z-- '-�l`' \,� W. L�O ARD WINGATE�Ci y Attorney a:\erp.rso '�} � � \ ,. • .. , � � i; EXHIBIT "A" CITY OF REDDING REHABILITATION LOAN POLICY Prepared by Department of Planning and Community Development Housing Division Adopted by Resolution No. 75-86 � I N POLICY � Page 19 ( � CITY OF REDDING REHABILI 1 AT O , Loan Subordinations: Subordination of a City Rehabilitation Loan may be approved by the Housing Loan Committee if the new first mortgage does not exceed the balance remaining on the original first mortgage, plus reasonable costs related to the financing; if the equity position of the loan is not decreased; and if the borrower is not receiving cash out of the transaction. The monthly financial savings must be a substantial amount in order to justify approval. If the current market value of the home indicates that there is sufficient equity to pay off the City loan when refinancing a superior loan, and if the borrower's subsequent housing expense is not increased beyond program guidelines, then the subordination request shall be denied. Special consideration may be given to families experiencing undue hardship or that have had a drastic change in circumstances which necessitate certain financial adjustments. The Housing Loan Committee may take appropriate action under these circumstances subject to protection of the City's interest. SECT/ON 10 - SPEC/AL PROGRAMS A. Loans to Eliminate Serious Health and Safety Hazards: The Housing Loan Committee may approve loans in areas other than the designated neighborhood strategy areas in those cases where it is determined that a serious health or safety hazard exists. B. Relocation Grants and Advisory Services: Relocation grants and advisory services shall be provided to individuals or families who must move from their dwelling during the course of rehabilitation under the City of Redding Loan program or the HOME Investment Partnerships program. These services shall consist of: 1 . Actual moving and storage costs. 2. Actual rent and deposits for temporary replacement housing. 3. Relocation advisory service. All requests for relocation payments shall be reviewed and approved or denied by the Housing Loan Committee at the time the rehabilitation loan or grant is considered by the Committee. Rental projects must be in compliance with regulations of the Tenant Assistance Policy under the Rental Rehabilitation Grant program. C. Emergency Deferred Loans: Deferred loans may be available to those persons who are unable to make a monthly loan payment and who do not meet the criteria of the deferred loan program. Eligible costs under this program include loan processing fees and code items. General property improvements are not eligible. . , � , . , • i ' CITY OF REDDING REHABILITATION POLICY Page 20 ,� �� ,� �� , , , SECT/ON 11 - EL/G/BLE AREAS The following areas are eligible for City of Redding Housing Rehabilitation Loans: Homeowner and Non-Profit Corporations: Residentially zoned areas within the city limits of the City of Redding. Investor/Owner - Rental Rehabilitation: Residentially zoned areas within the city limits of the City of Redding. SECT/ON 12 - DEFAULT, FORECLOSURE AND PROPERTY D/SPOS/T/ON POL/CY A. DEFAULT. If a borrower breaches or violates any provision of (1) the loan agreement, (2) the promissory note, (3) the deed of trust, (4) any other agreement pertaining to the loan, or (5) applicable program regulations, the City may give written notice to the borrower to cure the breach or violation within a period of not less than 30 days from such notice. If the breach or violation is not cured to the satisfaction of the department within the specified time period, the City, at its option, may declare a default under the relevant document and seek legal remedies for the default which include the following: 1 . The City may accelerate all amounts due under the prescribed loan, including outstanding principal and interest, and demand immediate repayment. Upon a failure to repay such accelerated amount in full, the City may proceed with foreclosure in accordance with the provision of the deed of trust; 2. The City may seek such other remedies, with Housing Loan Committee approval, as may be available under the relevant program agreement and the law. Possible alternatives include the following: Short Sale. When the market value of the property is less than the total indebtedness, the City may consider a short sale. This action involves reduction of the loan payoff amount by the City to facilitate the sale and avoid acquisition of an inventory property. Any discount by the City of its promissory note in order to facilitate a sale may be subject to any junior lien holder of record similarly discounting its promissory note. Loan Assumption. This alternative offers an opportunity to place a program-eligible family in a qualified property to avoid foreclosure. The borrowerls) can maintain their credit rating and the City's loan remains secure. Deed-in-Lieu of Foreclosure. This action is available when the City is in first position and allows the borrower to deed the property to the lender to avoid foreclosure. Although first lenders do not usually accept a Deed-in-lieu of Foreclosure if a second Deed of Trust exists, a second lender could accept a Deed-in-lieu of Foreclosure. A title search must be completed on the property to determine if any junior liens or judgements exist. i • � � ��. � .y ' � � EXHIBIT "B" /-� � � v n � o � nninir� ' .ri T1T� T"�Q �/1 r1 � 1 1 C LJ !1 A A L _ D T_� A I � rf � /'1 r`_ � A 1�A o /'��T 1"f__�___J L'"' - �cNa�cu vy. rcc__�:_ n.._.._. n �nnn __ - ivc �uyua� .�� .i.�� A�-_J�J C�L�..__.. 9(ll1G LI UQI�/ 1 JJJ � � ?. �e�o�� ru��e� o�nn�o 1']�A!"1'fA11A ��nnrn T A I'f��r�T I�T,�,L�T 1�� ,r _ nnr� JL � ^`-'� �. in�rnnn�� . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .: . . . . . . . . . . . . . . . . . . . i —��.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- . . . . . . . . . . . . . . . . � TCISJG�I mr�77T�I�TY�T r�n�� n n r�n o n�e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . � ��L-7. � � r+nnr.�T nn�ne�n�e . . . . . . . . . . . . . . . . . . . . : . . . . . . . . . . . . . e n ��p n� r� ��+�rs�� tr�i nr��t�o��eCn tTo � '�—Q�'�TCTITT�CCR�7IIiLT7�T�Ci�77TC7PrGTV"rr . . . . . . . . . . . . . . .-. . . . . . . . . . . . . . . . . . v —d. ENG�$r�C--R�ERi4FR�S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . � � �-�PENGFB��E--F� . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' Fit�si°reta�--Rreeess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . � rre�TB$iirttYt�feTrrrvEes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' , � n nr�r��+�n��oco f!`n A wIT\ . � Cttli�vCC33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ,� �� -{�C�YB�t�t�8#19TrTrv . . . . . . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . , w �� r . � • City of Redding Mobilehome Repair P�ogram (MRP) Page 1 , � , , , . , , , , , . � ..�r__�•.... � �� ' , , , c�cnrinwi o n�cieurineic� �@fl�jf�'` E�316f1� . i i � � � . 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City of Redding Mobilehome Repair Program (MRP) Page 14 � , . . , r,.. �,..,,��,..+,: ,:.�.� � . r inJ�'F''Frnw��• L7CLIACII ITATIA\.1 �['fAr�Q��T�1�� TI'C0� 0 r�-r'vE.'@98 n�,.,.,.a.,..,... AK....L. FI.. .+L.....I.I:..L l�.....1....4: ..1:.... ..L.. ...a.. ��4�I:�:.... �`C/'`TI!"11.1 O I"11AfC1 1 IAI/'` r��v 1 I�IIT IAICI']C/'`TI/'1A1 �Cf]l1�T a.. .J .J..A..:.......7.... pT'�7"I'RTt�T—G�1TOTtTCGTGTCT[�T'EEOT'O^Q'GTT.R.R�GI'C'S. `� � � � s . City of Redding Mobilehome Repair Program (MRP) Page 15 �X�I9ftB�teR" �� o.,..;�,. i..:.a .:si.. ...� ..a__�.:..,.n....� .�ab. - �n�-rm�u��c� vriu� A1..4�•—_f]........ ..:L.i.. L.... L.i.J i........ I:...........1 RJ �I VI11 IIVG11JG4 .• � � : E7�IIIIBIT "C" CITY OF REDDING EMERGENCY REPAIR PROGRAM POLICY Prepared by: Development Services Department Housing Rehabilitation Adopted by Resolution No. Effective May 7, 1996 � � •. EMERGENCY REPAIR PROGRAM (ERP) TABLE OF CONTENTS SECTION PAGE 1 . INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3. DESCRIPTION OF LOAN PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4. GENERAL ELIGIBILITY REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5. ELIGIBLE REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6. INELIGIBLE REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 8. PROCEDURES Financial Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Rehabilitation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 I . _. _... ........._........ .. ... _. _. . ', • . . � � � City of Redding Emergency Repair Program (ERP) Page 1 SECT/ON 1 - /NTRODUCT/ON As the community continues to grow, it is important to recognize the increase of mobile homes as principal residences for low-income households. There are over 2,241 mobile homes in the City of Redding (1990 censusl. Of these, 75% to 85% are older and half are occupied by very-low-income persons, many of whom are elderly. Many of the older units fail to meet minimum health and safety standards. Conventional loans for financing necessary repairs of mobile homes are cost-prohibitive for individuals or households on low or fixed incomes. Local housing programs have proven unable to provide adequate financial assistance for mobile home repair needs, because of difficulties in securing notes against the property or insufficient equity. Because mobile homes are a part of the permanent housing stock and those occupying them are among the most needy, they should be included in the overall effort to provide decent, affordable housing. Equally important, are the low-income homeowners who reside in conventional housing which requires completion of immediate health and/or safety repairs, or handicapped accessibility improvements. These are eligible individuals and families whose needs are not being met because provision of a conventional loan is either not feasible or cost-effective. The Emergency Repair Program (ERP) has been designed to provide affordable loans to low- income owners of both mobile homes and conventional homes in the City of Redding, who are otherwise unable to obtain funding resources. This program offers an unsecured, 3 percent interest loan up to a maximum of $2,500.00 to eligible households on a one-time basis to eliminate basic health and safety problems, and/or make necessary handicapped accessibility improvements. Low-income, eligible tenants of rental units needing handicapped accessibility improvements only may also apply for assistance under the Emergency Repair Program. Tenant-based improvements may only be accomplished with matching private dollars and approval from the respective landlord In those cases where it is determined that an emergency or serious health and/or safety hazard exists, the City reserves the right to consider a previous borrower's further request for assistance. The funding for this program will be provided by the federal Community Development Block Grant Program. This program is meant as a vehicle to serve a specific at-risk population, largely comprised of the elderly and disabled, who need repairs to eliminate basic health and safety problems. It seeks to improve and streamline the City's involvement with minor emergency repairs by minimizing the investment risk and providing a preferable administrative cost-to-benefit ratio for the smaller repair loan without excess title work and loan monitoring. Most importantly, it is recognized that some loans will not be repaid; however, this is offset by the realization that prior to the inception of the program, some monies always have been available through grants not meant to be repaid. The City of Redding shall utilize Housing Rehabilitation staff to manage and carry out day-to- day functions of the loan program. It should be recognized that it may be necessary to make adjustments to the program as experience dictates. SECT/ON 2 - DEF/N/T/ONS ., � � � . � City of Redding Emergency Repair Program (ERP) Page 2 The following definitions shall apply to this document unless another meaning is clearly apparent from the context: ADJUSTED GROSS ANNUAL INCOME shall mean the applicant's gross income less allowable exclusions. ASSETS shall mean the entire property of all sorts belonging to an applicant. BORROWER shall mean the recipient of a loan. CDBG shall mean the Community Development Block Grant Program as set forth in the Housing and Community Development Act of 1974. CITY shall mean the City of Redding, California, Development Services Department. CITY COUNCIL shall mean the City Council of the City of Redding. CODE VIOLATIONS shall mean infractions against the applicable codes contained in the Housing Rehabilitation Standards. DEFERRED PAYMENT LOAN shall mean a loan which is not liquidated on an installment basis. EMERGENCY REPAIRS shall address those conditions which pose a serious and immediate health and/or safety threat to the inhabitants of a dwelling. These conditions shall include either hazardous wiring, plumbing, mechanical, structural or sanitation problems as detailed in Chapter 10 of the current Uniform Housing Code. EQUITY shall mean the value of a property in excess of claims or liens against it. FAMILY shall mean all individuals who reside in a dwelling unit related by blood, marriage, or kinship. FAMILY INCOME shall mean adjusted gross income of all family members. GENERAL PROPERTY IMPROVEMENTS shall mean improvements other than code violations, incipient code violations, and required items which are eligible for rehabilitation loan funds. HOUSEHOLD shall mean all individuals who reside in or have an ownership interest in a dwelling unit regardless of family ties. HOUSEHOLD INCOME shall mean adjusted gross income of all household members. HOUSING QUALITY STANDARDS shall mean those HUD regulations set forth in the HUD Section 8 Rental Assistance Program which details a basic level of acceptable housing. INCOME/HOUSING EXPENSES shall mean the ratio of adjusted gross income to housing expenses. INTEREST shall mean a charge for borrowed money repaid along with the amount of the loan. _� � � i � City of Redding Emergency Repair Program (ERP) Page 3 LIEN shall mean a form of encumbrance which usually makes property secure over the time of payment of a debt or discharge of an obligation. Example: judgments, taxes, mortgages, deeds of trust. LOAN COMMITTEE shall mean a committee consisting of three members of the City Staff, derived from the following positions: the City Manager, the Assistant City Manager, the City Attorney, the Director of Development Services and the Director of Finance. The Loan Committee shall be charged with approving or disapproving loan applications consistent with the policies of the Emergency Repair Program. LOW INCOME shall mean those incomes which do not exceed 80 percent of the Redding area- wide median income as established by the latest published guidelines from the United States Department of Housing and Urban Development (HUD). VERY-LOW INCOME shall mean those incomes which do not exceed 50 percent of the Redding area-wide median income as established by the latest published guidelines from the United States Department of Housing and Urban Development (HUD1. MOBILE HOME shall mean a transportable dwelling that is not self-contained and that is used as a permanent residence, connected to utilities, with or without a permanent foundation. MONTHLY HOUSING EXPENSES shall mean those amounts expended for mortgage payments or rent, hazard insurance, real estate taxes, maintenance and utilities. MORTGAGE shall mean an instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation; procedure for foreclosure in event of default is established by statute. OWNER-OCCUPANT shall mean an individual or family who occupies and owns or who is buying a unit of residential property and will occupy such residence. PROMISSORY NOTE shall mean a written promise to pay or repay a specified sum of money at a stated time or on demand. REHABILITATION COST shall mean the total cost of repairs and improvements and other costs for rehabilitation to be incurred by the applicant that are eligible for inclusion in a rehabilitation loan. UTILITIES shall mean gas, electricity, water, sewage disposal and refuse collection. SECT/ON 3 - DESCR/PT/ON OF LOAN PROGRAM The Emergency Repair Program (ERP) Loan shall consist of two types of loans: A Deferred-Payment Loan for Elderly and Disabled: A loan for eligible homeowners and tenants over 60 years of age or disabled, that requires no monthly payments and is due only upon sale of the home, transfer of title, rental of the home, or when the borrower is able to repay. A 15-Year Deferred Payment Loan: A loan for eligible borrowers, as established in Section 4 of this document, that requires no monthly repayment, but one that,.is�due wpon�sale�ofi fihe - -: � � . - , City of Redding Emergency Repair Program (ERP) Page 4 home, transfer of title, rental of the home, or at the end of 15 years if the borrower is able to repay. SECT/ON 4 - GENERAL EL/G/B/L/TY REQU/REMENTS A. Location: Rehabilitation loans will be made only in neighborhoods within Redding city limits, within an area designated as Residential on the Redding General Plan. B. Borrowers: To be eligible for a rehabilitation loan, the applicant must be an owner- occupant of the home to be repaired; or, a tenant needing only handicapped accessibility improvements. C. Income/Housing Expenses: The applicant must meet both of the following conditions: 1. Household adjusted annual gross income must be less than the following amounts (NOTE: These income guidelines are from the Section 8, Title 2 of the Housing Act of 1974, as most recently published by the Department of Housing and Community Development): 1 person 519,500 2 person 22,250 3 person 25,050 4 person 27,850 5 person 30,050 6 person 32,300 7 person 34,500 8 or more 36,750 2. The ratio of housing expense to adjusted gross income shall be not more than 25 percent, except for those applicants that qualify for deferred-payment loans for the elderly or disabled. D. Determination of Adjusted Gross Income: In calculating adjusted gross income, all of the income of the applicant or applicants in cash or in kind shall be considered, except for the following specific exceptions: 1. Social Security monthly educational benefits to the children of an individual entitled to disability or old age insurance benefits provided that the child is: a. Unmarried. b. Under age 18. c. A full-time student under age 22. 2. Annual amounts paid for child support, provided that: a. The child support is required by court order. b. The required child support payments must be paid and..recei.v:ed..r,egularly.. ; .- : � .. , . . � • City of Redding Emergency Repair Program (ERP) Page 5 3. Foster care payments. 4. Relocation payments made pursuant to Title II of the Federal Uniform Relocation and Real Property Assistance Policies Act of 1970. 5. Payments under the G.I. Bill. 6. 5300 for each dependent child. E. Use: An Emergency Repair Program rehabilitation loan shall be used only for repairs related to health and/or safety, or necessary handicapped accessibility improvements. F. Housing Expense: To determine the ratio set forth in Paragraph C2 in this section, the following expenses shall be included in housing expense: 1. Mortgage payments, including principal and interest. 2. Rent, where applicable (including mobile home space rent). 3. Mortgage insurance premium. 4. Service charges. 5. Hazard insurance. 6. Real estate taxes and special assessments. 7. Maintenance and repairs. 8. Utilities G. Credit: A rehabilitation loan will be approved only if the applicant's credit record does not show substantial disregard for former or existing obligations. I. Assets: In order to qualify for a rehabilitation loan, the applicant must be unable to accomplish rehabilitation through conventional financing or use of his or her own assets as determined by the Housing Loan Committee. Evaluation of assets shall focus on the borrower's specific circumstances including both present and future medical/physical needs, earning capacity and family conditions. SECT/ON 5 - DESCR/PT/ON OF LOAN PROGRAMS A. peferred-Payment Emergencyfie_pair Program (ERPI Loan 1 . Pur�. The purpose of a deferred-payment Emergency Repair Program (ERP) Loan is to pay the costs of minimum health and/or safety housing repairs for eligible, low- income homeowners and tenants, particularly the elderly and disabled, without increasing current monthly housing expenses. � 2. Amount. The amount of an Emergency Repair Program Loan shall not exceed the . • � City of Redding Emergency Repair Program (ERP) Page 6 actual and approved cost of all necessary repairs up to a maximum of $2,500.00. 3. ReRayment. If not repaid earlier, the loan shall become due and payable upon sale or transfer of the property, the death of the ownerls►, when the property is no longer the owner(s1's principal place of residence, whichever first occurs. For tenant-based loans, repayment shall become due and payable when the property is no longer the principal place of residence. All interest earnings shall become forgiven upon repayment of the full principal loan balance wh�en°received�an t�ma lnterest�earnings shal��a��beFFfa�given,.o�',de��nquent�loanss-:wh��ch 'da not meefi�GityK�',payaff=�tlemantl . ,,� ,.�_, .< z ,. cxo�r�di�ion�s� 4. Terms and Conditions: a. The entire amount of an Emergency Repair Program Loan shall be conveyed by a statement of understanding and an unsecured promissory note. b. For owner-occupied loans, the borrower shall have hazard insurance at the time of signing loan documents, and will agree to maintain it. The borrower shall provide evidence that property taxes are current; or for mobile homes, that registration is current. c. Prior to execution of a tenant-based loan, the prospective borrower shall secure authorization from the property owner regarding implementation of the specified improvementls). d. An Emergency Repair Program Loan shall bear interest at the rate of three percent (3%) interest per year. e. Loan amounts shall be used towards the cost of rehabilitation of the home as it relates to handicapped accessibility improvements and Housing Quality Standards (HQS) detailed in Section 4 of this document. C. 15-Year Emergency Repair Program IERP) Loan 1 . Purpose. The purpose of an Emergency Repair Program (ERP) Loan is to pay the costs of minimum health and/or safety housing repairs for those homeowners whose income is so low as to prohibit a monthly payment. 2. Amount. The amount of an Emergency Repair Program Loan shall not exceed the actual and approved cost of all necessary repairs up to a maximum of 52,500.00. 3. Repavment. If not repaid earlier, the loan shall become due and payable upon sale or transfer of the property, the death of the owner(s1, when the property is no longer the ownerls)'s principal place of residence, or at the end of 15 years, whichever first occurs. All interest earnings shall become forgiven upon repayment of the full principal loan balance wlien�re��c��oC��ti�t� Intsrest e�arn��t h�l,��no'k�be forgi�en on d+�lii��uer��la�ar�s wMi�h�dq n��meet'°Ci�Cy payofif demand ��iti�n�». 4. Terms and Conditions: . • • City of Redding Emergency Repair Program (ERP) Page 7 a. The entire amount of an Emergency Repair Program Loan shall be conveyed by a statement of understanding and an unsecured promissory note. b. For owner-occupied loans, the borrower shall have hazard insurance at the time of signing loan documents, and will agree to maintain it. The borrower shall provide evidence that property taxes are current; or for mobile homes, that registration is current. c. An Emergency Repair Program Loan shall bear interest at the rate of three percent (3%) interest per year. d. Loan amounts shall be used towards the cost of rehabilitation of the home as it relates to handicapped accessibility improvements and Housing Quality Standards (HQS) detailed in Section 6. SECT/ON 6 - EL/G/BLE REPA/RS The following repairs are eligible costs for a rehabilitation loan under the Emergency Repair Program: 1 . LEAKY ROOFS. 2. DAMAGED OR DETERIORATED WINDOWS. 3. PLUMBING. 4. PEELING PAINT ON EXTERIOR AND INTERIOR SURFACES. 5. ELECTRICAL HAZARDS. Examples of electrical hazards include: Broken or frayed electrical wiring; bare wires not covered by rubber or plastic insulation; loose or improper wire connections to outlets; light fixtures hanging from electric wire with no other firm support; missing or cracked cover plates on switches or outlets; exposed fuse box connections; overloaded circuits evidenced by frequently "blown" fuses. Any rubber or plastic coated-electrical wiring (romex) in a room or on the exterior that is accessible to possible physical abuse or wear. 6. SECURITY. This may include operable locks or security devices on exterior windows and doors. 7. DEFECTIVE STOVE, RANGE, OR REFRIGERATOR. 8. WATER HEATER IN NEED OF TEMPERATURE-PRESSURE RELIEF (POP-OFF) VALVE AND DISCHARGE LINE. 9. DAMAGED OR DETERIORATED FLOORING. 10. WEATHERIZATION/ENERGY CONSERVATION. This may include improvements to exterior doors, air conditioning and cooler-vent openings, walls, floors and ceilings to ensure weather-tight conditions. Any cracks, holes, gaps, or openings that allow air or .� � ! • City of Redding Emergency Repair Program (ERP) Page 8 moisture infiltration into a living space may be addressed. 1 1 . UNSAFE HANDRAILS, STAIRS AND PORCHES. 12. SUBSTANDARD HEATING/COOLING. 13. ADAPTABLE HOUSING REPAIRS. Adaptable housing repairs (such as grab bars, modified counters, doorways, ramps, fixtures and facilities) may be eligible modifications for handicapped or disabled home occupants. .� � � • • City of Redding Emergency Repair Program (ERP) Page 9 SECT/ON 7 - /NEL/G/BLE REPA/RS The following repairs are not eligible costs for rehabilitation work under the Emergency Repair Program. 1 . New construction, substantial reconstruction, expansion of the structure, or the finishing of unfinished spaces unless otherwise stated in this policy. 2. Materials, fixtures, equipment or landscaping of a type and quality which exceeds adequate service or that is not customarily used for properties of the same general type. 3. Refinancing the existing debt on property or back taxes. 4. A rehabilitation loan shall not be used to finance or obtain any of the following items: - Barbecue pit - Bathhouse - Burglar alarm - Fire extinguisher - Greenhouse - Hot tub/spa - Kennel - Photo mural - Swimming pool - Television antenna - Tennis court - Valance or cornice board 5. Other "luxury" items. SECT/ON 8 - PROCEDURES FINANCIAL PROCESS Process Procedures Initial Contact: Advise applicant of general objectives and benefits of the program. Get information from applicant (Use Initial Telephone Survey, Form No. ERP.1). - Live in city limits? - Live in residential zoning? - Owner-occupied? - Applicant's income. - Any assets that would disqualify applicant? - Elderly or disabled? ff yes, applicant may need adaptable housing products or aids. • i � � `. City of Redding Emergency Repair Program (ERP) Page 10 - Who is owner of record? Application: Assist owner in completing all necessary forms. - City of Redding ERP Loan Application, Form No. ERP.2. - Copy of current mobile home registration. - Copy of most recent property tax statement. - Medical verification of need (as required). - Verification of SSI-SDI. Request Initial Inspection Deficiency List With Cost Estimate: Request inspection by Rehab Inspector (SEE REHAB PROCEDURES SECTION) when all verifications return and all applicant forms are completed. Assemble Loan File: Assemble loan file and evaluate for completeness. - Completed applications. - Current mobile home registration. - Credit report. - Property tax statement. - Income verification of SSI-SSP (or other). - Deficiency List and Cost Estimate. - Assign Project Loan No. Request Contract and Bid: Request contract and bid from home owner. (Owner to have solicited bid from contractor of his/her choice.) (SEE REHAB PROCEDURES SECTION) City Loan Committee Review and Approval: Submit loan package and photo of home to Housing Rehab Supervisor for review and approval by City Housing Loan Committee. - Rehab Finance Specialist will prepare Rehab Loan Narrative for Loan Committee. Assemble Loan Documents: Assemble and prepare loan documents. This includes the following: - Statement of Understanding - Promissory Note ... .y � • City of Redding Emergency Repair Program (ERP) Page 11 - Loan Disclosure Statement - Memo to Finance Department - Terms and Conditions Loan Settlement: Arrange appointment for all signatory parties to sign loan documents and review construction procedures. - Review all loan documents with applicant. - Obtain signatures of applicant(s) for all appropriate forms with notarization as required. - Provide applicant with copy of all documents. - Indicate to applicant that funding is secured for the rehab work and that he/she may now sign an agreement with the contractor and commence work. - Indicate to applicant that it is the responsibility of the contractor to facilitate and complete the permit process with the State HCD office (Housing and Community Development, 2986 Bechelli Lane, Redding, California 96002, (916) 224-4815) or City of Redding Building Division, as necessary. Memo to Finance: (SEE APPENDIX FOR INSTRUCTIONS FOR MEMO TO FINANCE DEPARTMENT) Work Underway: (SEE REHAB PROCEDURES SECTION) Construction Contract: The construction contract is the responsibility of the contractor and shall be provided and explained to the home owner prior to Loan Committee. Completion of Construction: (SEE REHAB PROCEDURES SECTION) Disbursement of Funds: Upon acceptance of the completed work by the home owner, City staff may release the check for the approved loan amount to the contractor. Notice of Completion: It shall be the responsibility of the property owner to complete and record a notice of completion with the Shasta County Recorder if he/she desires to obtain verification of material supplier or subcontractor payments by the general contractor. Final Approvat by the State HCD Office: On those rehab projects requiring a permit with the State Housing and Community Development Department, it is the responsibility of the contractor to obtain final approval for the completed work. Completing the File: Upon disbursal of all funds, the Housing Staff shall complete all necessary documents to close out the file. ,:...... . _.. .. ..... .. . . . . Final Letter 2o Borrower. Send letter with statement of disposition�of.:funds; notifying �� • � ,. City of Redding Emergency Repair Program (ERP) Page 12 borrower of completion date and call-back procedures. REHABILITATION PROCESS r s Procedures Receive Request for Initial Inspection: Upon receiving a request for property inspection from the Rehab Finance Specialist, set up owner file: - Attach file checklist. - Obtain copy of Assessor's Parcel Map (confirm location of property within city limits). Arrange appointment for Initial Inspection: Make appointment with applicant to inspect property. Initial Inspection: Explain Emergency Repair Program and process. Conduct inspection of property utilizing SECTION 8 - DWELLING UNIT INSPECTION REPORT to record deficiencies. Deficiency List and Cost Estimate: Finish deficiency list and cost estimate for applicant complete with letter of explanation. Give copy of deficiency list and cost estimate to Rehab Finance Specialist. Send letter of explanation to applicant. Review Deficiency List with Applicant: Review repair items and any significant problems concerning the project. Review bid process with applicant and present him/her with Contractors List if requested. Note: Applicant is responsible for securing bid from licensed contractor to perform the work. Applicant is also responsible for communicating the Emergency Repair Program process to the contractor (explanation sheet will be provided). Loan Approval Process: Put rehab file in order while awaiting approval by the Loan Committee. Complete HISTORIC AND ARCHITECTURAL ASSESSMENT FORM. Loan Settlement: Upon signing the loan documents, the applicant is now ready to sign the construction contract with the contractor. Work may now commence. Work Underway: Borrower/contractor responsibility. Completion of Construction: Borrower/contractor responsibility. �, � . � • . � City of Redding Emergency Repair Program (ERP) Page 13 Final Approval by the State HCD Office: Borrower/contractor responsibility. Final approval by the City of Redding Building Division: Borrower/contractor responsibility. Final Approval by the Housing Division: Borrower shall contact the Housing Division for final approval. d:\d\policy.ERP • i . .' ,