HomeMy WebLinkAboutReso 93-250 - Authorize implementation of Amendments to the Rehab loan policy, Mobile Home Repair Program Policy & Property Rehab Standards r
RESOLUTION N0. 113 —,�S0
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING AUTHORIZING
IMPLEMENTATION OF AMENDMENTS TO THE REHABILITATION LOAN POLICY,
MOBILEHOME REPAIR PROGRAM POLICY AND PROPERTY REHABILITATION STANDARDS
ADOPTED BY CITY COUNCIL RESOLUTION NO.
WHEREAS, the City of Redding has previously adopted a Rehabilitation Loan Policy,
Mobilehome Repair Program Policy and Property Rehabilitation Standards 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
that the aforementioned policies and.standards be further amended 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,
Mobilehome Repair Program Policy and Property Rehabilitation Standards 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 6th day of July 1993, and was duly adopted
at said meeting by the following vote:
AYES: COUNCIL MEMBERS: Anderson, Dahl, Kehoe, P9oss and Arness
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
CARL ARN S, Mayor
City of Redding
ATTEST:
CONNIE STRO MAYER, Cit I
FORM APPROVED:
RAN ALL A. HAYS, Ci Ateney
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EXHIBIT "A"
CITY OF REDDING
REHABILITATION LOAN POLICY
Prepared by
Department of Planning and Community Development
(NeW Draft of Juni 1993)
Adopted by Resolution No. 75-86
Effective September 2, 1975
With Amendments to May 21, 1991
TABLE OF CONTENTS
Page No.
SECTIONI - INTRODUCTION . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2 - DEFINITION OF TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3 - GENERAL ELIGIBILITY REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . 6
A. Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
B. Owner Occupant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
C. Income/Housing Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
D. Determination of Adjusted Gross Income . . . . . . . . . . . . . . . . . . . . . . . 6
E. Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
F. Housing Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
G. Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
H. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
I. Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
J. Assurance of Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
K. Water and Sewer Connection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4 - DESCRIPTION OF LOAN PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
A. Amortized Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
B. Ecrosmietie HOME Investment Partnerships Program Loans . . . . . . . . 11
C. Partially Deferred Payment Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
D. Deferred Payment Loans for
Elderly and Disabled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
E. Water and Sewer Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
F. Deferred Payment Loans, Non-Profit Corporations 14
SECTION 5 - ELIGIBLE COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
A. Code and Rehabilitation Requirements . . . . . . . . . . . . . . . . . . . . . . . . . 16
B. Rehabilitation Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
C. Building Permits and Related Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
D. Certain Related Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6 - INELIGIBLE COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7 - PROCESSING A LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8 - COMPLETING A HOME REHABILITATION . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9 - GENERAL CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 10 - SPECIAL PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 11 - ELIGIBLE AREAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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SECTION 1 - INTRODUCTION
The City of Redding has been allocated funds to develop and implement a community development
program pursuant to the Housing and Community Development Act of 1974. The number one priority
set by the Citizens Committee was the establishment of a home rehabilitation program.
The following program has been designed to provide: (1) low-interest loans to low-and moderate-income
homeowners; (2) loans to investor/owners who agree to participate in the Rental Rehabilitation Pr-eg.,,,.v.
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HOME Investment Partnerships Program; and (3) loans to non-profit corporations for transitional or
permanent housing facilities. Loans of up to $32,000 for homeowners, $8,50A $62,596 for
investor/owners participating in the Rental Rehab PFo,-Fai:n HOME Investment Partnerships Program,
and $10,000 per unit to non-profit corporations are available to correct housing deficiencies. The
program will promote housing opportunities for low- and moderate-income families by means of loans
which will be provided to homeowners who would not otherwise be eligible for conventional home repair
loans. Special consideration will be given to families on fixed incomes, particularly the elderly and
disabled.
The program will offer four types of loans:
A. Amortized Loan: A low-interest loan amortized monthly over a period not to exceed 10 years
for homeowners, and a Market-rate loan amortized monthly over a period not to exceed 10 years
for investor/owners participating in the Rental Rehab Program.
B. Construction Loan: A loan having a term that is the lesser of the actual term of rehabilitation
plus 60 days, or one year for investor/owners participating in the Rental Rehabilitation Pfag
HOME Investment Partnerships.
C. Partially Deferred Payment Loan: Loans which are amortized in an amount not to exceed 25%
of family income and deferred for the balance of the amount necessary to rehabilitate the
property, but in no event shall the borrower be permitted to defer more than 90% of the total
loan.
D. Deferred Payment Loan for Elderly and/or Disabled: A low-interest loan requiring no monthly
payments. These loans will be repaid only when property title is transferred.
E. Deferred Payment Loan - Non-Profit Corporations: A low-interest loan carrying a term not to
exceed 20 years and repaid according to the following schedule.
1. Year 0 - 5, interest and principal deferred;
2. Year 6 - 10, annual payment of accrued interest required; and
3. Year 11 - 20, remaining balance and any accrued interest amortized for 10 years.
Monthly payments of principal and interest required.
As loans are repaid, the money will be returned to the loan account, creating a revolving pool of money
available for future applicants. With judicious qualifying of applicants and careful monitoring of
outstanding loans, the original fund will be replenished continually and more families will benefit from
the original account.
It is hoped this program will be a useful tool in helping to maintain and upgrade the housing stock within
the City of Redding, particularly in helping to stabilize and enhance other neighborhoods. It is also
hoped the program will be liberal enough in scope and terms to help families and individuals of low
income, yet conservative enough to insure the security of the investment and be acceptable to a broad
cross-section of the community.
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It should be recognized that it may be necessary to make adjustments to the program as working
experience dictates. Above all, we will strive to create and maintain a workable program of housing
rehabilitation.
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SECTION 2 - DEFINITIONS
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.
AMORTIZED LOAN shall mean a loan liquidated on an installment basis.
ASSETS shall mean the entire property of all sorts belonging to an applicant.
BORROWER shall mean the recipient of a rehabilitation loan.
THE "CITY" shall mean the City of Redding, California, Department of Planning and Community
Development.
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.
CONSTRUCTION LOAN shall mean a loan which has no monthly payment and bears interest and is
liquidated within 60 days following the end of the construction period.
CREDIT shall mean financial or commercial trustworthiness, as determined by the applicant's previous
performance of the payment of debts.
DEED OF TRUST shall mean a deed given by borrower to trustee to be held pending fulfillment of an
obligation, which is ordinarily repayment of a loan to a beneficiary.
DEFERRED PAYMENT LOAN shall mean a loan which is not liquidated on an installment basis.
DESIGNATED NEIGHBORHOODS shall mean those neighborhoods designated by the City Council of
the City of Redding for rehabilitation assistance.
EMERGENCY REPAIRS shall address those conditions which pose a serious and immediate health/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.
GENERAL PROPERTY IMPROVEMENTS shall mean improvements other than code violations and
incipient code violations which are eligible for rehabilitation loan money.
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HOME INVESTMENT PARTNERSHIPS ACT of the National Affordable Housing Act of 1990 shall
mean the Federal legislation which provides funding for the current program activities in the City
of Redding including tenant-based rental subsidies, assistance to first-time home buyers, property
acquisition, new construction, reconstruction, moderate or substantial rehabilitation, site
improvements, demolition, relocation and other reasonable and necessary expenses related to the
development of affordable housing.
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HOUSEHOLD shall mean all individuals who reside in or have an ownership interest in a dwelling unit
regardless of family ties.
HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974 shall mean the Federal enabling
legislation which provides funding for the current program of Housing and Community Development in
the City of Redding.
INCIPIENT CODE VIOLATIONS shall mean a condition or element of a structure which will deteriorate
into an actual violation within a year or two of inspection.
INCOME/HOUSING EXPENSES shall mean the ratio of adjusted gross income to housing expenses.
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INTEREST shall mean a charge for borrowed money, repaid with the amount of the loan.
INVESTOR/OWNER shall mean an individual or individuals or family who owns or is buying a unit(s)
for the purpose of renting as residential property.
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LAND CONTRACT shall mean a contract ordinarily used in connection with the sale of property in cases
where the seller does not wish to convey title until all or a certain part of the purchase price is paid by
the buyer; often used when property is sold on a small down payment.
LIEN shall mean a form of encumbrance which usually makes property security for the payment of a debt
or discharge of an obligation. Example: judgments, taxes, mortgages, deeds of trust.
LOAN COMMITTEE shall mean a committee appointed by the City Council to review and approve or "
disapprove loan applications consisting of four members of the City Staff, i.e., the Director of Planning
and Community Development, the Finance Director, the City Attorney, and the Housing and
Redevelopment Manager.
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LOW INCOME shall mean those incomes which do not exceed 80 percent of the median income as
established by the Department of Housing and Urban Development
MONTHLY HOUSING EXPENSES shall mean those expenses allowable as legitimate housing expenses.
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.
NON-PROFIT CORPORATION shall mean a non-profit public benefit corporation organized under the
Non-Profit Public Benefit Corporation Law for charitable purposes within the meaning of Section
501(c)(3) of the Internal Revenue Code.
OWNER OCCUPANT shall mean an individual or family who occupies and owns or is buying a unit of
residential property.
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14OUSING PROPERTY REHABILITATION STANDARDS shall mean that document of the same title,
identifying city codes applicable to residential rehabilitation and other environmental deficiencies to be
corrected during the rehabilitation process not identified in City codes.
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.
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SECTION 8 MODERATE REHABILITATION PROGRAM shall mean that program which is designed
to provide a rent subsidy for an eligible tenant residing in a unit which has been rehabilitated according
to Section 8 Moderate Rehabilitation guidelines.
TITLE I, COMMUNITY DEVELOPMENT shall mean that portion of the Housing and Community
Development Act of 1974 which provides for general improvements in the community and particularly
for home rehabilitation.
TITLE II, SECTION 8 shall mean that portion of the Housing and Community Development Act of 1974
which states that housing assistance payments may be made for new and substantially rehabilitated
housing. In this policy handbook, Section 8 Income Guidelines are used.
TRANSITIONAL HOUSING FACILITY shall mean residential units which are occupied for a specified
length of time under a written contract while independent living skills are learned.
UTILITIES shall mean gas, electricity, water, sewage disposal and refuse collection.
VERY LOW INCOME shall mean those incomes which do not exceed 50 percent of the median income
as established by the Department of Housing and Urban Development.
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SECTION 3 - GENERAL ELIGIBILITY REQUIREMENTS
A. Location: Rehabilitation loans will be made only in neighborhoods designated by the City
Council, to correct code violations and to make general improvements in the dwelling unit as
defined in the Housing Rehabilitation Standards.
B. Owner Occupant/Investor Owner: To be eligible for a rehabilitation loan, the applicant must be
included in one of the following categories:
1. Owner Occupant. The applicant must be an individual or individuals or family who owns
or is buying a home. Persons buying homes under land contracts are excluded from the
loan rehabilitation program, except in those special cases where a land contract is held
by the State of California Department of Veteran Affairs. One or more of the applicants
must reside in such home.
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2. Investor Owner. The applicant must be an individual or individuals or family who owns
or is buying a unit(s) for the purpose of renting as residential property. Income
eligibility requirements as identified in Items C & D do not apply to investor/owner j
applicants. Investor/owners are not eligible for Water and
Sewer loans. Investment properties shall have a positive cash flow.
In addition to the above requirements, individual programs require the following:
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a. ModeFate Re HOME - the owner(s) of such unit(s) must agree to participate
in the HOME Investment
Partnerships Program and abide by all contracts and program regulations.
b. Rental Rehab il itation e gthe owner(s) of stteh unit(s) ,sr ng-Fee to �
Fafn and abide by all eofitfaets and
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C. Income/Housing Expenses: The applicant must meet both of the following conditions:
1. Family adjusted annual gross income must be less than the following amounts:
1 person $19,150
2 persons $21,900
3 persons $24,600
4 persons $27,350
5 persons $29,550
6 persons $31,750
7 persons $33,950
8 or more $36,100
2. The ratio of housing expense to adjusted gross income shall be not more than 25% except
for applicants that qualify otherwise for deferred or partially deferred payment loans.
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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 specific
exceptions set forth hereinafter.
*NOTE: Income guidelines of Section S, Title 2 of the Housing Act of 1974,as most recently published by the Department of Housing and
Community Development.
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I. The 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. The annual amounts paid for child support will be excluded from gross annual income
provided that:
a. The child support is required by court order.
b. Child support payments required must be paid and received regularly.
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 G.I. Bill.
6. $300 for each dependent child.
E. Use: A rehabilitation loan shall be used to correct code violations and to make general
improvements to the dwelling unit as defined in the Housing Rehabilitation Standards and Section
5 of this policy.
That portion of an Amortized Rehabilitation Loan used for General Property Improvement, as
specified in Section 5B, shall not exceed 40 percent of that total loan.
F. Housing Expense: To determine the ratio set forth in C2 above, the following expenses shall be
included in housing expense:
1. Mortgage payments, including principal and interest.
2. Mortgage insurance premium.
3. Service charges.
4. Hazard insurance.
5. Real estate taxes and special assessments.
6. Maintenance and repairs.
7. 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.
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H. Equity: The applicant must have not less than a 10 percent equity in the property being
rehabilitated.
I. Assets: In order to quality for a rehabilitation loan the applicant must not be able to accomplish
rehabilitation through conventional financing or use of his own assets as determined by the Loan
Committee.
J. Assurance of Completion: In some cases, the rehabilitation costs may exceed the amount of a
rehabilitation loan. In such instances a rehabilitation loan will not be made unless the applicant
can provide whatever additional amount is needed to assure completion of the work so that the
property will at least meet minimum city codes on the portions which are to be rehabilitated. If
the owner is to provide funds in addition to the rehabilitation loan amount to complete the total
rehabilitation, satisfactory evidence of such funds must be presented to the City of Redding before
the loan can be approved.
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K. Water and Sewer Connection: In those cases where water and sewer services are available, an
applicant must be connected to those services or a part of the proceeds of the loan be used to
connect to these services.
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SECTION 4 - DESCRIPTION OF LOAN PROGRAMS
A. Amortized Loans:
1. Purpose. The purpose of an Amortized Rehabilitation Loan is to pay the costs of
rehabilitation in those cases where family income is adequate to meet the increased
monthly housing expense of a rehabilitation loan payment.
2. Eligibility. In order to qualify for an Amortized Rehabilitation Loan the applicant must
meet all general eligibility requirements.
3. Ability to Repay. The applicant's total indebtedness should not exceed three times his
gross yearly income and debt payments should not exceed 40 percent of his gross
income.
4. Amount. The amount of an Amortized Rehabilitation Loan shall not exceed the lesser
of:
a. The actual (and approved) cost of repairs and improvements.
b. $23,000 for homeowners, $10,000 peF tinit 4)F ifivestaf/ewneFs Under- the
"r„a *^ D.,".,, o „,Fa, and X5;000.00 $31,624.00 to $62,596.00 per unit
(depending on bedroom size) for investor/owners under the Rental Reha4
nFr�n HOME Investment Partnerships Program.
C. The loan amount may be increased up to a maximum of$32,000 on
homeowner loans in those cases where the cost to repair the code violations
exceed the $23,000 loan limit. These loans are for code items and do not include
general property improvements.
d. These limits also apply to the Partially Deferred Payment Loans and Deferred
Payment Loans for Elderly and/or Disabled.
5. Repayment:
a. Homeowner: A rehabilitation loan shall be repaid. However, the borrower shall
not be required to pay housing expenses including rehabilitation loan payments
in excess of 25 percent of family income.
If not repaid earlier, the loan shall become due and payable at the time of a
property transfer, or at the end of the loan term, whichever first occurs.
b. Investor/Owner: A rehabilitation loan will become due and payable at the end
of the loan term or when the Section 4 ",r dei:ate Rehab; itatien n..,,,....,..,
b
Rental Rehabilitatio HOME Investment Partnerships Program Contract is
terminated. The loan may be assumed provided that the applicable contract
remains in effect.
6. Terms and Conditions:
a. Homeowner: A rehabilitation loan shall be amortized in not more than 15 years
and shall bear interest at one (4 f�'�, Rtes: Fis,e pereent 44 `vefy low
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eight . two (2) percent
above prime rate as indicated by the U.S. Federal Reserve Board.
b.
, ot -fflofe_than 15 years and .hall bedf intefest—at the Fate of 5 PeFeent-
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iffPCTR7T7p�VTCCl�f'C�,"'fTi'ai"ZC�.fi'�Ip��` `G�-aTT7�fCTGC�TO L"T7CPC
FnOFe than 10 )'edfS iffid Shdil beff inteFest at the etiffent maket rate, plus 1,12
b b
Investor/Owner-HOME Investment Partnerships Program: A rehabilitation
loan shall be amortized for not more than 15 years and shall bear interest
at a maximum of 5 percent and a minimum of 3 percent simple interest I�
(interest rate is determined by needs of project and/or term of affordability
of units).
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C. A rehabilitation loan shall be secured by a note and a deed of trust on the
property.
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d. There shall be a title insurance policy on the property which secures the loan
supplied to the City for the value of the property at the time of approval of the
loan.
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e. The borrower shall maintain current payments on property taxes and fire
insurance. The minimum amount of fire insurance must cover all trust deeds on I!
the property. The City shall obtain annual verification of paid taxes and effective
fire insurance.
f. Installments shall be due monthly.
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g. The loan may be prepaid in whole or in part at any time without prepayment
penalty.
QStH .t:efl i �
1 D Th ptiFpose .f it C str .t: Loan is to eeveF the ew eFshare of a eas
of Fehabilitation andef the Rental Rehabilitation GEafit Pfegf:afn in these eases wheFe
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in Ede te alif., f a G r Lean,ivu � r aNf'li nt must be aH
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iaN,es
r l t' r: in the Rental RehabilitationPfegfafn, . ..t eeleligibility
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available on the ubjeet prepeFty pFiof to ehabilitatien
ravrricuiavaa.
3. AbiliIX 'e Ref3ay. Pr-ieF to City lean II
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is eempieted. This eemmitment of fidnding must eentain the speeifie date that ftindincg
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will be pfevided.
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the end Of the 16-a.". tevffn. The ieaR may net be assamed.
6. TeffflS and
a. A G,,.,,tfuetion Loan—shall eaf interest—at the euFfeHt mafket rate, plus-W2
b b
13 }.
h. Thi, teen, of a !`onstfiietion Lean shall be the lesseF
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(2) 1 yea
e. A G(anstfuetion Loan shall be seetifed by a note and a deed of tFust oft the
f. No Rienthly instailmews shall he FeqttiFe&7
B. HOME Investment Partnerships Program Loans:
1. Purpose. The purpose of a HOME Program Loan is to assist the participating
owner-investor with financing on the acquisition or rehabilitation of rental property
for low-income tenants.
2. Eligibility. In order to qualify for a HOME Program Loan, the applicant must be
in the process of acquiring a property in need of rehabilitation or have site control
of the property in need of rehabilitation; and must demonstrate the ability and
financial capacity to secure, manage, and maintain the property upon completion of
the rehabilitation. A minimum of 10 percent in cash of the cost of rehabilitation
work must also be provided by the borrower.
3. Ability to Repay. The applicant must demonstrate the property's ability to have a
positive cash flow. Evidence of a good credit rating by the applicant is also
required.
4. Amount. The maximum amount for HOME-assisted units are as follows:
Studios $31,624
1-Bedroom $36,250
2-Bedroom $44,081
3-Bedroom $57,025
4-Bedroom + $62,596
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5. Loan-to-Value Ratio:
a. The loan-to-value ratio of a project having less than 12 units shall not exceed
90 percent.
b. The loan-to-value ratio for projects having more than 12 units cannot exceed
80% of the completed value.
6. Repayment. Loans shall be repaid in one of three repayment plans depending upon
the needs of the project. The three repayment plans are:
a. principal and interest that are fully amortized;
b. partial amortization of principal and interest or interest-only payments;
C. principal and interest payments that are fully deferred in two- to five-year
increments on a case-by-case basis.
7. Terms and Conditions: pp
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a. The maximum interest rate shall be 5 percent simple interest; the minimum
rate shall be 3 percent. (Interest rates are determined by the needs of the
project and/or term of affordability of the units.)
b. The term of the loan shall he no more than fifteen (15) years.
C. The loan shall be secured by a note and a deed of trust on the property.
d. There shall he a title insurance policy on the property which secures the loan
supplied by the City for the value of the property at the time of approval of
the loan.
e. The borrower shall maintain current payments on fire insurance. The
minimum amount of fire insurance must cover all trust deeds on the
property. The borrower shall meet all HOME program conditions including,
but not limited to affordability and occupancy.
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C. Partially Deferred Payment Loans:
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1. Certification. An applicant for an Amortized Loan may have a portion of his monthly
loan payment deferred. If his housing expenses including the loan payments exceed 25
percent of his gross income, the amount of the loan which causes this excess shall be
considered a Deferred Payment Loan, but in no event shall the borrower be permitted to
defer more than 90% of such loan.
2. Purpose. The purpose of a Partially Deferred Payment Loan is to make possible the
rehabilitation of the property and improvements of the neighborhood in those situations11
where the applicant cannot qualify for an Amortized Loan.
3. Repayment. A Partially Deferred Payment loan shall be repaid. The non-amortized
portion of the loan shall fall due and become payable upon transfer of title to the property
securing the loan.
4. Conversion. When the borrower's circumstance is substantially changed, at the
borrower's option, the loan may be converted to a straight Amortized Loan.
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5. Terms and Conditions:
a. The entire amount of a Partially Deferred Payment Loan shall become due and
payable if the borrower sells the property, or when title is transferred.
b. A Partially Deferred Payment Loan shall be secured by a note and a deed of trust
on the property.
C. There shall be a title insurance policy on the property which secured the loan
supplied to the City.
d. The borrower shall maintain current payments on property taxes and fire
insurance. The minimum amount of fire insurance must cover all trust deeds on
the property. The City shall obtain annual verification of paid taxes and effective
fire insurance.
e. This loan shall bear interest at the Fate of fiv,e peFeent. current prime rate as
indicated by the U.S. Federal Reserve Board.
D. Deferred Payment Loans For Elderly and/or Disabled:
1. Purpose. The purpose of a Deferred Payment Rehabilitation Loan for the Elderly and/or
Disabled is to pay the costs of rehabilitation without increasing current monthly housing
expenses of those families on fixed incomes, particularly the elderly and disabled.
2. Eligibility. To qualify for a Deferred Payment Loan for the Elderly and/or Disabled, the
applicant must meet all of the general eligibility requirements except his monthly housing
expense need not exceed 25% of gross income and must meet one of the following
requirements:
a. Be at least 60 years of age.
b. Be disabled according to the criteria established by the Social Security
Administration.
3. Terms and Conditions:
a. The entire amount of a Deferred Payment Loan for the Elderly and/or Disabled
shall be secured by a note and a deed of trust on the property.
b. There shall be a title insurance policy supplied to the City on the property which
secures the loan.
C. The borrower shall maintain current payments on property taxes and fire
insurance. The minimum amount of fire insurance must cover all trust deeds on
the property. The City shall obtain annual verification of paid taxes and effective
fire insurance.
d. This loan shall bear interest at the fate of fi . the current prime rate
as indicated by the Federal Reserve Board.
E. Water and Sewer Loans:
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1. Purpose. The purpose of a Water and Sewer Loan is to pay the water and sewer hook-up
in those cases whether or not the family is applying for a rehabilitation loan.
2. Eligibility. In order to qualify for a Water and Sewer Loan, the applicant must meet all
general eligibility requirements.
3. Amount. The amount of a Water and Sewer Loan shall not exceed the actual (and
approved) cost of installation.
4. Terms and Conditions:
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a. Repayment. The term of repayment of the Water and Sewer Loan shall be:
1. A maximum loan term of 15 years for those applicants meeting the
eligibility requirements for Amortized Loans defined in Section 4A.
Installments shall be due monthly.
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2. A loan term that will be due and payable upon transfer of title to the II
property securing the loan for those applicants meeting the eligibility j
requirements for deferred payment loans defined in Section 4C.
b. A Water and Sewer Loan shall be secured by a note and a deed of trust on the
property in the amount of the loan.
C. The loan may be prepaid in whole or in part at any time without prepayment
penalty.
In consideration of the minimal amount of the loan for water and sewer connection, it
will not be necessary to secure termite inspection reports, appraisals, credit reports, a
title search and title insurance, or evidence of insurance. It will be required that staff
document owner-equity in the property and verify mortgage balances on the property.
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F. Deferred Payment Loans - Non-Profit Corporations:
1. Purpose. The purpose of a Deferred Payment Loan to a Non-Profit Corporation is to
assist with the cost of the rehabilitation of residential units to be occupied at an affordable
rate by lower-income households on a transitional or permanent basis.
2. Eligibility. In order to qualify for a Deferred Payment Loan, the applicant must be a �
non-profit corporation who owns or is buying residential units for the purpose of
establishing a transitional housing facility or for renting as permanent residential units.
All residents of the transitional housing facility units or permanent residential units
assisted under this program must meet HUD lower-income requirements, as stated in
Section 3C1 of this Policy.
The rents charged plus any required utility payments must not exceed 30% of the resident
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household gross monthly income.
3. Amount. The amount of a Deferred Payment Loan - Non-profits shall not exceed the
lessor of : (1) the actual (and approved) cost of repairs and improvements; or (2)
$10,000 per assisted unit.
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The maximum number of assisted units per project will be determined according to the
following formula:
Projects of 1 - 6 units: 100% of the units
Projects of 7 - 20 units: 50% of the units
Projects of 21 + units: 25% of the units
4. Terms and Conditions:
a. The full amount of a Deferred Payment Loan under this section shall be secured
by a note and a deed of trust recorded on the property.
b. The loan shall be for a term not to exceed 20 years and shall bear interest at the
rate of three percent (3%) simple interest per year. Repayment of loans under
this section shall be according to the following schedule:
(1) Year 0 - 5, principal and interest payments are deferred;
(2) Year 6 - 10, annual payment of accrued interest required;
(3) Year 11 - 20, remaining loan balance plus accrued interest, if any, will
be amortized. Monthly payments of principal plus interest required.
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C. The entire amount of the loan may he repaid early without any penalties.
d. The entire amount of a Deferred Payment Loan under this section shall become
due and payable if the borrower sells the property, transfers title, or changes the
use of the property.
e. There shall be a policy of title insurance issued to the City at the time of loan
closing securing the City for the full amount of the loan.
f. The borrower shall maintain current payments on all liens, property taxes, and
fire insurance on the property. The minimum of amount of fire insurance must
cover all trust deeds on the property. The borrower shall provide annual
verification of paid taxes and fire insurance coverage.
g. The deed of trust securing the Deferred Payment Loan under this section shall
be recorded in the first or primary position on the subject property. A
subordinate position is acceptable only if sufficient equity exists above the
principal balances on all trust deeds superior to the City loan to cover the full
amount of the City loan with 10% equity unencumbered.
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SECTION 5 - ELIGIBLE COSTS
A. Code and Rehabilitation Requirements: A rehabilitation loan shall be made to cover the cost of
rehabilitation necessary to make the dwelling conform to housing rehabilitation standards.
Rehabilitation activities for those units to be leased under the Section 8 Moderate Rehabilitation
Program shall be in accordance with Housing Rehabilitation Standards subject to limitations of
the Section 8 Moderate Rehabilitation Program regulations and Section 6. It shall correct hazards
to health and safety, halt deterioration of the structure, and correct incipient code violations.
After rehabilitation, the property shall, as a minimum, be a safe and habitable dwelling.
B. Rehabilitation Objectives: In addition to compliance with code and rehabilitation requirements
set forth in the Housing Rehabilitation Standards of the City of Redding, certain objectives are
encouraged. Objectives are not mandatory provisions, they have been included as desirable
improvements to properties. After the property has been rehabilitated to conform with the
Housing Rehabilitation Standards, additional loan money not to exceed 40% of the total loan, �I
may be used for the following General Property Improvements:
1. Walks and steps should be provided for all-weather access to the building and constructed
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so as to provide safety, reasonable durability, and economy of maintenance. Where I
needed, driveways, garage floors, or vehicle parking areas shall have asphalt, concrete,
or compacted (aggregate) surfaces presenting level, unbroken planes, free from ruts, mud
holes or obstructions of any kind.
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2. Exterior doors should have safe locks.
3. Each living unit should have a minimum of eight linear feet of kitchen work counter
space including the sink. Minimum areas of kitchen storage should be:
a. Total shelving in wall and base cabinets, 20 square feet.
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b. Drawer area, two square feet.
C. All one-bedroom and efficiency units should have not less than one-half of the
above requirements.
4. Each dwellingunit should have at least 100 cubic feet of enclosed general storage on the
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property. All bedrooms should have closet space that is either a built-in or portable
enclosure insuring adequate private clothes storage for occupants. Closets should provide
a minimum of 4 square feet of area per bedroom, not less than two feet deep, and, if not
contained within bedroom, should be reasonably accessible to it.
5. Each habitable room should have three or four supplied convenience wall outlets and one
supplied electric light fixture. Each bathroom should have one supplied convenience
outlet and one supplied electric light fixture.
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6. The topmost ceilings of all dwellings should be provided with a minimum of four inches
of fire resistant insulation. The sidewalls and open attic spaces of boxed-in attic rooms
should also be provided with fire resistant insulation.
7. Facilities for the handicapped should be provided as necessary. These include ramps,
railings, supports, locksets and doors, and larger door openings, as appropriate for the
safety and convenience of such persons.
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8. Drain tiling should be provided to public streets, alleys, or storm sewers.
9. To improve the visual quality of the neighborhood environment, landscaping of a similar
quality and quantity to the rest of the neighborhood should be provided.
10. Floors in kitchens and bathrooms should be of durable, waterproof, non-absorptive
materials, such as asphalt, vinyl asbestos, vinyl plastic, rubber or ceramic tile, or
linoleum. Wood finish flooring should not be used in these rooms.
11. Walls and ceilings should be painted, papered, or have other appropriately finished
surface. Kitchens and bathrooms should be painted or papered to provide a waterproof
and washable finish surface.
12. A room addition may be built, altered, or improved in special cases where the absence
poses a serious hardship for the family.
13. Minor remodeling may be done in order to make a dwelling more functional or attractive.
14. An adequate cooling system should be provided for each dwelling to an extent deemed
appropriate by the City.
15. Insect screens for windows and screen doors may he provided.
16. Each dwelling should be provided with adequate electrical service where existing
electrical service is inadequate.
17. The repair/replacement or new installation of free-standing stove appliances, garbage
disposals, and dishwashers may be provided if compliance with HUD regulations are
met.
C. Building Permits and Related Fees: Funds may be provided in the rehabilitation loan to cover
costs of building permits and related fees if these are not included in the contractor's fees.
D. Certain Related Costs: A rehabilitation loan may include funds to cover certain costs, and
charges relating to processing the loan application and closing. Accordingly, a rehabilitation loan
may provide for the cost of the following:
1. Appraisals.
2. Preliminary title reports.
3. Filing and recording fees.
4. Title insurance.
5. Hazard insurance.
6. Unpaid property taxes.
7. Termite inspection report.
8. Other fees as may be required.
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The City will advance funds as necessary for appraisal and preliminary title report prior to final
approval of the loan application. When the loan is approved, the City shall be reimbursed from
the proceeds of the loan at the time of the loan closing. If the loan is not approved or the
application is withdrawn, advances shall he paid by the City.
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SECTION 6 - INELIGIBLE COSTS
The following costs are not eligible costs for a rehabilitation loan:
A. New construction, substantial reconstruction, expansion of the structure, or the finishing of
unfinished spaces unless otherwise stated in this text.
B. 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.
C. Acquisition of land.
D. Purchase, installation or repair of furnishings or trade fixtures.
E. Appliances including refrigerators.
F. Credit reports.
G. Refinancing the existing debt on property excluding back taxes.
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SECTION 7 - PROCESSING A LOAN
The following offers a brief outline of the steps necessary to process a loan. It is not intended to detail
all the mechanics of the process:
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A. Interview applicant and determine basic eligibility.
B. Perform on-site inspection of property.
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C. Prepare work write-up and estimate based on property inspection.
D. Obtain appraisal and credit check.
E. Staff committee approval or denial.
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F. Prepare all applicable loan documents. i
G. The loan applicant will be informed in writing if a loan application is turned down. The
applicant may correct or exhibit a valid explanation of these disqualifications and resubmit the
application. Upon resubmission, the application will be re-evaluated by the staff committee.
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SECTION 8 - COMPLETING A HOME REHABILITATION
Once a loan has been processed and approved, the following activities will take place. Again, this is not
intended to detail the process of completing a home rehabilitation, it is only a summary of the steps to
be taken.
A. Prepare all documents necessary to close the loan.
B. Arrange for dispersal of loan money.
C. Determine method of rehabilitation (self-help, contractor, Self-Help Home Improvement Project
or combination) and prepare contracts with family and contractor or other.
D. Oversee work in progress and provide regular inspections of work.
E. Upon completion, file Notice of Completion, make final payments to contractors and suppliers
for rehabilitation work.
F. After expiration of 35 days, make final payments to contractors and suppliers for rehabilitation
work.
G. Monitor payment procedures.
H. Upon repayment of loan amount execute and record documents required to cancel note and deed
of trust.
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SECTION 9 - GENERAL CONDITIONS
Civil Rights: Comply with all HUD requirements with respect to "Title VI of the Civil Rights Act of
1964, as amended, to not discriminate upon . . . "the basis of race, color, creed, sex or national origin
in sale, lease, rental, use or occupancy of the subject property."
Equal Employment Opportunity: Must comply with Executive Order 11246 and HUD equal opportunity
requirements.
Use of Proceeds: Loan proceeds shall be used only to pay for costs of services and materials necessary
to carry out the rehabilitation work for which the loan will be approved.
Disbursement of Funds: Rehabilitation loan funds shall be disbursed in a manner defined by the City.
Completion of Work: Assure that rehabilitation work will be carried out promptly and efficiently,
through written contract let with prior concurrence of the City.
Inspection: Inspection by the City or its designee of the property, the rehabilitation work and all contract,
materials, equipment, payrolls and conditions of employment pertaining to the work.
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Loan Security: The applicant must agree to provide security for a roan in the form of a deed of trust and
promissory note in favor of the City of Redding. A second deed of trust is acceptable if sufficient equity
exists above the principal balance on the first trust deed.
Maximum Term: The maximum terms for a rehabilitation loan shall be fifteen years. Loans may be
repaid in full at any time without any penalties.
Maximum Term - Deferred Payment Loans to Non-Profit Corporations: The maximum terms for a
rehabilitation loan to a non-profit agency shall be twenty years. Loans may be repaid in full at any time
without any penalties.
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SECTION 10 - SPECIAL PROGRAMS
designatedaeetimulated total of$76,000.00 will be Fflade to applieants in the previously
Rehabilitation A.• ..he meet the all fieat:ons listed bel. w:
Rehabilitation Bully 11 rI IczJ"
b
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2. FQF handjefds. DefeFfed J=E)aHs will be Fnade to these PFOPeFty E)%'fleFS WhO wish t-8,
but ., unable tom, do h th
Ilk"'te-Efl-tl•} E'L�6fl- -��6E��e•-R'e��'-I�f6g��aitin�r�co�v-vccuarJc-cnc
TheseThese .�1efeffed leans ..,:Il be used ..(..,:....,.t:,,., -with othef fiHa.. mg
ll lillilll�ll IVITIIJ �Yi b,
This leaii %,ill be PFON'ided at euFFenf F14A Title 1, mayciffitiffi annual intefest fates and
will be eon,,,efted to a bFitflt b
b if the b e
the leaii is immediately dtie and payable. if the VFE)pei-ty is sold befaFe this b
atiOH
eentFaetaal b b a b .
indiN,idual loan amatifits will be determified by the Loan Coliillli--
B A. Loans to Eliminate Serious Health and Safety Hazards: The Rehabilitation Housing Loan
Administration 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.
D b
$90,000 Shall beestablished. individual b
sewer- assessment. GFants will he awai-ded t) those applieafits whose V
with the City of b' b
b bfaflt if they b
b i-ehabilitation loan b
-Faffl will be aN,ailable fig
this purpose.
D. Se%,ef Assessment Loansi Residents within a sewei: assessnient distf-ietwhe qualify under the
b b
Wit.
gr-ant b` housing
Fehabilitafiefl
StandaMs.
E 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 , ReHtal Rehabilitation n.. ~t
HOME Investment Partnerships program b . These services
shall consist of:
1. Actual moving and storage costs.
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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 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.
b
FaHts in an affleant not to e*e ed $4,000.00
gfant be made toqualified OIA'ReF HeetipaHtS. ,-,i i
grant t6-[iriiiclre' , • $2.00 h.�.•.•eweci-tmde• r ehabilitation loan pFe-,••,•H• See 4
ftiindinb will be the fehabilitation loan b '
6 C. Emergency Deferred Loans: Deferred loans will be made available in designated rehabilitation
loan areas to those persons who are unable to make a monthly loan payment but 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.
H. FHA Title 1 HeFfle ent-Laefl•
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to the eenditions set fiaFth in
Oper-atinb b
-Feement between Seetifity Piteifie National Bank and the City of Redding. Thesb
ulations Of the FHA
b '
Seeufity Piteifie Nationai Ban!( will finitnee the leans at the etir-r-ent FHA Title-4Redding-
These per-sons deteEmined to he very lew meenie,. its Elefined by Seetien 8, Title 2 of the Hetisin
Aet of 1974will �e eligible fOF subsidies to an effeetiN,e inteFeSt fate of 4%. These peFseni
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deterfnined to be low ifieeFne, its defined by Section 9, Title 2 of the Reusing Aet of 1974, �
be eligible feF subsidies to an .ffeer;.,,. .,t,..est .ate e f 401_
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SECTION 11 - ELIGIBLE AREAS
The following areas are eligible for City of Redding Housing Rehabilitation Loans:
Homeowner & Non-Profit Corporations: Residentially Zoned Areas within City Limits of the
City of Redding.
Investor/Owner - Rental Rehab: Residentiaily Zoned Afeas within Rental Rehab Boundar-y Are
as adepted by the Redding City Getineil (aft Abgtist 2, . Residentially Zoned Areas within
City Limits of the City of Redding.
\d\policy.93
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EXHIBIT "B"
CITY OF BEDDING
M OBILEHO M E REPAIR PROGRAM
POLICY
Prepared by:
Department of Planning & Community Development
Housing Division
July 1992
MOBILEHOME REPAIR PROGRAM
CONTENTS
SECTION PAGE
1 - INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 DEFINITIONS 2
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3 - DESCRIPTION OF LOAN PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4 - DESCRIPTION OF GRANT PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5 - GENERAL ELIGIBILITY REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6 - ELIGIBLEREPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7 - INELIGIBLEREPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8 - PROCEDURES (LOAN)
Financial Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Rehabilitation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9 - PROCEDURES (GRANT)
Financial Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Rehabilitation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 1 - INTRODUCTION
There are over 2,241 mobile homes in the City of Redding (1990 census). Typically, 75% to 85% of
these are older, and half are occupied by low-income persons, many of whom are elderly. Most, if not
all, of the older units fail to meet minimum health and safety standards. Market-lending rates are cost
prohibitive for low-income families as a means of financing repairs in the mobilehome market. Local
housing programs are typically unable to provide adequate financial assistance to address mobilehome
repair needs, often because of difficulties in securing notes against the property or insufficient equity.
The Mobilehome Repair Program (MRP) has been designed to provide low-interest loans to low-income
mobile home owners in the City of Redding who are elderly, on a fixed income, or needy. The program
will assist those families who are owner-occupants of mobile homes, and are unable to obtain
rehabilitation funding resources.
This program offers a maximum $4,000.00 loan to eligible households on a one-time basis to meet
rehabilitation needs and eliminate basic health and safety problems. 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 applicant's further request for assistance. Provision of a grant (up to $500) to
eligible participants, who are in need of handicapped accessibility improvements or immediate
health/safety repairs, is also available in cases where provision of a loan is not feasible or cost
effective.
In order to administer this program, the City of Redding shall utilize Housing Division 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.
As the community continues to grow, it is recognized that the importance of a mobile home as a
principal residence for lower-income households also increases. This fact supports the consideration
that the mobile home is part of the community's permanent housing stock and should be included in
the overall effort to provide decent, affordable housing.
It is the intention of this program to utilize a loan as the primary funding mechanism GE)Upled With
PFegfam except under special circumstances warranting a grant. It is also hoped that the program will
be liberal enough in scope and terms to help families and individuals of lower income, yet conservative .
enough to ensure the security of the City's investment and be acceptable to a broad cross-section of
the community.
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SECTION 2 - DEFINITIONS
The following definitions shall apply to this document unless another meaning is clearly apparent from
the context:
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ADJUSTED GROSS ANNUAL INCOME shall mean the applicant's gross income less allowable
exclusions.
AMORTIZED LOAN shall mean a loan liquidated on an installment basis.
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.
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THE "CITY" shall mean the City of Redding, California, Department of Planning and Community
Development.
CITY COUNCIL shall mean the City Council of the City of Redding.
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CODE VIOLATIONS shall mean infractions against the applicable codes contained in the Housing
Rehabilitation Standards.
CREDIT shall mean financial or commercial trustworthiness, as determined by the applicant's previous
performance of the payment of debts.
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/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.
GRANT shall mean a financial contribution for the particular purpose of rehabilitating property through
the Mobilehome Repair Program.
GRANTEE shall mean that owner of record receiving the financial contribution for the purpose of
rehabilitating his/her property through the Mobilehome Repair Program.
GRANTOR shall mean the provider of the financial contribution to rehabilitate said property through the
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Mobilehome Repair Program.
HOUSEHOLD shall mean all individuals who reside in or have an ownership interest in a dwelling unit
regardless of family ties.
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.
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 four members of the City staff, i.e., the City
Manager, the City Attorney, the Director of Planning and Community Development, and the Housing
Manager, appointed by the City Council to review and approve or disapprove loan and grant
applications. The Loan Committee shall be charged with approving or disapproving loan and grant
applications consistent with the policies of the Mobilehome Repair Program.
LOW INCOME shall mean those incomes which do not exceed 60 percent of the Redding area-wide
median income as established by the latest published guidelines from the Metropolitan Statistical Area.
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.
MODERATE INCOME shall mean those incomes which exceed 80 percent but less than 120 percent
of the median income as established by the U.S. Department of Housing and Urban Development.
SECTION 3 - DESCRIPTION OF LOAN PROGRAM
MONTHLY HOUSING EXPENSES shall mean those expenses allowable as legitimate housing expenses.
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.
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SECTION 3 - DESCRIPTION OF LOAN PROGRAM
A. Deferred Payment Loans For Elderly and/or Disabled:
1. Purpose. The purpose of a Deferred Payment Rehabilitation Loan for the Elderly and/or
Disabled is to pay the costs of rehabilitation without increasing current monthly housing
expenses of those families on fixed incomes, particularly the elderly and disabled.
2. Eligibility. To qualify for a Deferred Payment Loan for the Elderly and/or Disabled in the
Mobilehome Repair Program, the applicant must meet all of the general eligibility
requirements, except his/her monthly housing expense need not exceed 25% of gross
income and must meet one of the following requirements:
a. Be at least 60 years of age.
b. Be disabled according to the criteria established by the Social Security Administration.
3. Amount. The amount of a Deferred Payment Loan shall not exceed the lesser of:
a. The actual (and approved) cost of all necessary repairs and allowable loan costs.
b. A maximum of $4,000.00
4. Repayment. If not repaid earlier, the loan shall become due and payable at the time of a
property transfer, death of owner(s), or at a date specified in the loan documents, whichever
first occurs.
5. Terms and Conditions:
a. The entire amount of a Deferred Payment Loan for the Elderly and/or Disabled shall be
secured by a note and a security agreement on the property.
b. The borrower shall maintain current payments on hazard insurance. The minimum
amount of hazard insurance must cover all liens on the property and shall name the City
of Redding as loss payee on the property. The City shall obtain annual verification of
paid taxes and effective hazard insurance.
c. A Deferred Payment Loan shall bear interest at the rate of zero percent simple interest
per year.
d. A Deferred Payment Loan shall be deferred for the lifetime of the borrower, unless
otherwise specified in the loan documents, provided that if the property is used for
rental income, then the deferred loan shall be due and payable. If this occurs, the City
has the right to foreclose on the loan.
e. As part of the administration of the Program, the applicant will be required to pay for
loan costs. These costs may be funded from the loan proceeds or paid directly by the
borrower and are as follows:
- Pest Control Report Fees, if applicable
- Title Investigation Fees
- Credit Report Fees
- Lender Processing Fees
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B. Deferred Payment Loans
1. Purpose. The purpose of a Deferred Payment Rehabilitation Loan is to pay the costs of
rehabilitation without increasing current monthly housing expenses of low- and fixed-income
households.
2. Eligibility. In order to qualify for a Deferred Payment Loan in the Mobilehome Repair
Program,the applicant must meet all of the general eligibility requirements detailed in Section
4 of this document.
3. Amount. The amount of a Deferred Payment Loan shall not exceed the lesser of:
a. The actual (and approved) cost of all necessary repairs and allowable loan costs.
b. A maximum of $4,000.00
4. Repayment. If not repaid earlier, the loan shall become due and payable at the time of a
property transfer, death of owner(s), or at a date specified in the loan documents (up to 15
years), whichever first occurs.
5. Terms and Conditions:
a. The entire amount of a Deferred Payment Loan shall be secured by a note and a security
agreement on the property.
b. The borrower shall maintain current payments on hazard insurance. The minimum
amount of hazard insurance must cover all liens on the property and shall name the City
of Redding as loss payee on the property. The City shall obtain annual verification of
paid taxes and effective hazard insurance.
c. A Deferred Payment Loan shall bear interest at the rate of zero percent simple interest
per year.
d. A Deferred Payment Loan shall be deferred for the lifetime of the borrower, unless
otherwise specified in the loan documents, provided that if the property is used for
rental income, then the deferred loan shall be due and payable. If this occurs, the City
has the right to foreclose on the loan.
e. As part of the administration of the Program, the applicant will be required to pay for
loan costs. These costs may be funded from the loan proceeds or paid directly by the
borrower and are as follows:
- Pest Control Report Fees, if applicable
- Title Investigation Fees
- Credit Report Fees
- Lender Processing Fees
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SECTION 4 - DESCRIPTION OF GRANT PROGRAM
A. Grant Features
1. Purpose. The purpose of the Grant Program is to provide lower-income owner-occupants of
mobile homes with a grant to rehabilitate the structures in order to eliminate health and
safety hazards, when provisions of a loan is not feasible or cost effective. (i
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2. Eligibility. In order to qualify for a grant, the applicant must meet all General Eligibility
Requirements referred to in Section 5.
3. Amount. The maximum amount allowed for rehabilitation needs shall be $500 for a single-
family dwelling.
4. Terms and Conditions
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Grant amounts shall be used towards the cost of rehabilitation of the mobile home as it
relates to handicapped accessibility improvements and Housing Quality Standards (HQS)
detailed in Section 6.
(a) Mobile home owners shall be responsible for securing bids from licensed contractors
based on deficiency reports and cost estimates provided by City staff.
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(b) Mobile home owners shall be responsible for executing contracts for work with licensed
contractors. !
(c) Mobile home owners shall be responsible for acceptance of contract work and payment
to contractors.
(d) Contract work shall be completed in an expedient manner (typically, 30 days).
(e) The City shall provide assistance in carrying out the above items in those cases where
the owner is unable to perform the tasks due to a handicap or other incapacity.
(f) Completion of the contract work by a licensed contractor may be waived by the
Grantee.
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SECTION 5 - GENERAL ELIGIBILITY REQUIREMENTS
A. Location
Mobile homes must be located within Redding city limits in order to be eligible, and be located
within an area designated as Residential on the Redding General Plan.
B. Characteristics of Recipient
1 . Mobile home owners shall meet income guidelines as defined below.
2. Mobile units must demonstrate a definite need for rehabilitation as detailed by City staff on
the DWELLING UNIT INSPECTION REPORT.
3. Mobile home owners may be selected and prioritized for approval based on applicant's need.
C. Income Guidelines
The income of a mobile home owner shall not exceed the 60% low-income range of the Redding
area-wide median income as per the latest published guidelines from the Metropolitan Statistical
Area.
D. Determination of Adiusted Gross Income
1 . When calculating the adjusted gross income of an applicant, the guidelines outlined in the
City of Redding Rehabilitation Loan Policy under Section 3 shall be followed.
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SECTION 6 - ELIGIBLE REPAIRS
The following repairs are eligible costs for a rehabilitation loan under the Mobilehome Repair Program
when the listed conditions are deemed to be substandard to an extent that endangers the life, limb,
health, property, safety or welfare of the public or occupants thereof:
1. LEAKY ROOFS. All roof systems shall be weathertight and free from unsound or hazardous
conditions.
2. DAMAGED OR DETERIORATED WINDOWS. All windows shall be openable and meet applicable
egress, light and ventilation standards. Missing or broken panes shall be replaced. Serious drafts
or moisture entry shall be eliminated.
3. PLUMBING. All mobile homes must have hot and cold running water and a properly working
sewer system. Any serious leaks at fixtures or within the plumbing system shall be repaired.
4. PEELING PAINT ON EXTERIOR AND INTERIOR SURFACES. All exterior and interior surfaces shall
be free from cracking, scaling, peeling, chipping, and loose paint, or adequately treated, or
covered to prevent exposure to lead-based paint hazards.
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 shall be considered an
electrical hazard. Such wiring should be enclosed in flexible conduit, EMT (encased metal tube),
liquid-tight conduit, or other approved material.
6. SECURITY. All exterior windows and doors shall have operable locks or security devices.
7. DEFECTIVE STOVE OR RANGE. Both an oven and a stove (or range) with top burners must be
present and working. Microwave appliances are acceptable substitutes for a non-working oven.
8. ABSENCE OF TEMPERATURE-PRESSURE RELIEF (POP-OFF) VALVE AND DISCHARGE LINE ON
WATER HEATER. All water heaters must have a temperature-pressure relief valve which will
operate when the temperature or the pressure in the tank is too high. The discharge line shall be
constructed of 3/4-inch galvanized steel or copper pipe and shall be piped to the outside of the
structure as per code.
9. DAMAGED OR DETERIORATED FLOORING. All carpeting, sheet vinyl and tile flooring shall be
free of holes, cracks, tears, or missing sections that represent a tripping hazard or unsafe
condition.
10. IMPROPER WEATHERSEAL. All exterior doors, air conditioning and cooler-vent openings, walls,
floors and ceilings, shall be weathertight. Any cracks, holes, gaps, or openings that allow air or
moisture infiltration into a living space shall be eliminated.
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11. UNSAFE HANDRAILS, STAIRS AND PORCHES. All stairs, rails, porches and balconies shall be
sound and free from hazards. Any section(s) with missing steps, broken or rotting material or
absence of handrails shall be repaired.
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12. SUBSTANDARD HEATING/COOLING. All mobile units shall provide adequate heating and cooling
to meet the Uniform Housing Code and City of Redding Rehabilitation Standards.
13. ADAPTABLE HOUSING REPAIRS. Adaptable housing repairs (such as grab bars, modified
counters, doorways, fixtures and facilities) may be eligible modifications for handicapped or
disabled mobile home occupants.
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SECTION 7 - INELIGIBLE REPAIRS
The following repairs are not eligible costs for rehabilitation work under the Mobilehome Repair
Program.
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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. I'
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.
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SECTION 8 - PROCEDURES (LOAN)
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. MRP.1).
' Live in city limits?
Live in residential zoning?
- Owner-occupied?
- Applicant's income.
- Any assets that would disqualify applicant?
- Elderly or disabled? If yes, applicant may need
adaptable housing products or aids.
- Who is owner of record?
Application: Assist owner in completing all necessary forms.
City of Redding MRP Loan Application, Form No.
MRP.2
Aosta GeURtT Spee+al—G+FE;Li Fn sta Rees PFogFaFR
ApplieatieR F=A_.r.m. 9-9-12 41A.
Copy of current mobile home registration.
Copy of most recent property tax statement.
Medical verification of need (as required).
Verification of SSI-SSP.
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.
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Assemble Loan File: Assemble loan file and evaluate for completeness.
Completed applications.
Formal title search through DMV or State HCD office.
Current mobile home registration.
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Credit report.
Property tax statement. I'
Income verification of SSI-SSP (or other).
Equity verification (utilize Bluebook or consult with real
estate service specializing in the mobile home market).
Deficiency List and Cost Estimate.
Obtain Project Loan No. from Finance Department.
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Request Contract and
Bid: Request contract and bid from mobile home owner. (Owner to
have solicited bid from contractor of his/her choice.) (SEE
REHAB PROCEDURES SECTION) r
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City Loan Committee
Review and Approval: Submit loan !
package and photo of mobile home to Housing Rehab
Supervisor for review and approval by City Rehabil+tatiee
Housing Loan Committee.
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Rehab Finance Specialist will prepare Rehab Loan
Narrative for Loan Committee.
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Assemble Loan
Documents: Assemble and prepare loan documents. This includes
the following:
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Security Agreement.
Statement of Understanding
Promissory Note
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Notice of Right to Rescind
Loan Disclosure Statement
Tax Service Order
Memo to Finance Department
Terms and Conditions
- Letter to Insurance Company
Letter to Title Company
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, 405 Redcliff Drive, Redding, California
96002, (916) 224-4815).
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Letter to Insurance
Company: Prepare letter to owner's insurance company requesting an
endorsement and that the City be listed as additional insured.
Utilize Form No. 100.23. Send out after loan settlement.
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 mobile home owner
prior to Loan Committee.
Completion of Construction: (SEE REHAB PROCEDURES SECTION)
Disbursement of Funds: Upon acceptance of the completed work by the mobile home
owner, City staff may release the check for the approved loan
amount to said owner. it is alse the FespeRsibility of the eWReF
Sew+Ee-PFeg
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Notice of Completion:
(if applicable) It shall be the responsibility of the mobile home 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 Approval by the !,
State HCD Office: On those rehab projects requiring a permit with the State f
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 to Mobile home i•
Owner: Send letter with statement of disposition of funds, notifying
applicant of completion date and call-back procedures.
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REHABILITATION PROCESS
Process 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 owner to inspect property.
Initial Inspection: Explain mobile 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 mobile home owner
complete with letter of explanation.
Give copy of deficiency list and cost estimate to Rehab Finance
Specialist.
Send letter of explanation to property owner.
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Review Deficiency List
with Owner: Review repair items and any significant problems concerning
the project.
Review bid process with owner and present him/her with
Contractors List if requested.
Note: Owner is responsible for securing bid from licensed
contractor to perform the work. Owner is also responsible for
communicating the Mobilehome 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 mobile home owner is
now ready to sign the construction contract with the
contractor. Work may now commence.
Work Underway: Owner/contractor responsibility.
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Completion of Construction: Owner/contractor responsibility.
Final Approval by the II
State HCD Office: Owner/contractor responsibility. M
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Final approval by the City
of Redding Building Division: Owner/contractor responsibility.
Final Approval by the
Housing Division: Owner shall contact the Housing Division for final approval.
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SECTION 9 - PROCEDURES (GRANT)
FINANCIAL PROCESS
Process Procedures
Initialtial Contact: Advise applicant of general objectives and benefits of the
program.
Get information from applicant (Use Initial Telephone Survey,
Form No. MRP.)).
- Live in city limits?
- Live in residential zoning?
- Owner-occupied?
- Applicant's income.
- Any assets that would disqualify applicant?
- Elderly or disabled? If yes, applicant may need
adaptable housing products or aids.
Who is owner of record?
Application: Assist owner in completing all necessary forms.
City of Redding MRP Grant Application, Form No.
MRP.2.
- Copy of current mobile home registration.
- Copy of most recent property tax statement.
- Medical verification of need (as required).
- Verification of SSI-SSP.
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 Grant File: Assemble grant file and evaluate for completeness.
Completed applications.
17
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Current mobile home registration.
Property tax statement.
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Income verification of SSI-SSP (or other).
Deficiency List and Cost Estimate.
- Obtain Project Grant No. from Finance Department.
Request Contract and
Bid: Request contract and bid from mobile home owner. (Owner to
have solicited bid from contractor of his/her choice.) (SEE
REHAB PROCEDURES SECTION)
City Loan Committee
Review and Approval: Submit grant package and photo of mobile home to Housing
Rehab Supervisor for review and approval by City RP-hals+li#at+eR
Housing Loan Committee.
Rehab Finance Specialist will prepare Rehab Grant
Narrative for Loan Committee.
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Assemble Grant
Documents: Assemble and prepare grant documents. This includes
the following:
- Grant Agreement.
Statement of Understanding
Grant Settlement: Arrange appointment for all signatory parties to sign
grant documents and review construction procedures.
Review Grant Agreement and Statement of
Understanding 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 I`
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, 405 Redcliff Drive, Redding, California
96002, (916) 224-4815).
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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 mobile home owner
prior to Loan Committee.
Completion of Construction: (SEE REHAB PROCEDURES SECTION)
Disbursement of Funds: Upon acceptance of the completed work by the mobile home
owner, City staff may release the check for the approved grant
amount to said owner.
Notice of Completion:
(if applicable) It shall be the responsibility of the mobile home 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 Approval 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 to Mobile home
Owner: Send letter with statement of disposition of funds, notifying
applicant of completion date and call-back procedures.
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REHABILITATION PROCESS
Process 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).
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Arrange appointment for
Initial Inspection: Make appointment with owner to inspect property. N
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Initial Inspection: Explain mobile repair program and process.
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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 mobile home owner
complete with letter of explanation.
Give copy of deficiency list and cost estimate to Rehab Finance
Specialist.
Send letter of explanation to property owner.
Review Deficiency List
with Owner: Review repair items and any significant problems concerning
the project.
Review bid process with owner and present him/her with
Contractors List if requested.
Note: Owner is responsible for securing bid from licensed
contractor to perform the work. Owner is also responsible for
communicating the Mobilehome Repair Program process to the
contractor (explanation sheet will be provided).
Grant Approval Process: Put rehab file in order while awaiting approval by the Loan
Committee. Complete HISTORIC AND ARCHITECTURAL
ASSESSMENT FORM.
Grant Settlement: Upon signing the Grant Agreement, the mobile home owner is
now ready to sign the construction contract with the
contractor. Work may now commence.
Work Underway: Owner/contractor responsibility. j
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Completion of Construction: Owner/contractor responsibility.
Final Approval by the
State HCD Office: Owner/contractor responsibility.
Final approval by the City
of Redding Building Division: Owner/contractor responsibility.
Final Approval by the
Housing Division: Owner shall contact the Housing Division for final approval.
cAd\policy.mrp
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EXHIBIT "C"
CITY OF REDDING HOUSING DIVISION
PROPERTY REHABILITATION STANDARDS
I. HOUSING REHABILITATION PROGRAM PURPOSE
The City of Redding (City) has developed a Housing Rehabilitation Program to assist property owners
in rehabilitating their homes through low-interest loans. The specific objectives of the program are:
A. To assist low- and moderate-income property owners throughout the City to rehabilitate their
homes to an acceptable living standard.
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J B. To upgrade substandard and deteriorated housing units within the City of Redding.
C. To increase the supply of affordable and quality housing units within the City of Redding.
D. To accomplish rehabilitation in such a manner that the structure will have increased its
economic life and value to the homeowner and the neighborhood.
II. PURPOSE OF THESE STANDARDS
The purpose of these property rehabilitation standards is:
A. To serve as minimum standards to which individual properties shall be improved under the
Housing Rehabilitation Program.
B. To serve as a guide in determining how rehabilitation financial assistance may best be utilized.
C. To serve as standards in the inspection and evaluation of the condition of residential structures
to be considered for rehabilitation.
III. USE OF THESE STANDARDS
These standards are broken into five general categories as follows:
A. REQUIRED IMPROVEMENTS: Items that are listed in this category provide the minimum
standards which properties being rehabilitated under the Rehabilitation programs must meet.
All items listed in this category are required to be corrected for participation in the program.
This category is further broken down into three sub-categories as follows:
1) Program Repair Requirements: This section provides for minimum repair standards
to increase the general appearance of the outside of the structure and property, as well
as requirements necessary to secure the City's loan interest in the property, in keeping
with HUD's Housing Quality Standards.
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2) Critical Code: This section provides for minimum repair standards to safeguard life
or limb, health, and the public welfare.
3) Water and Sewer Connection Requirement: This section provides for sewer and water
hook-up as a minimum requirement of the Rehabilitation Program. This allows
residents to secure a more permanent source of water and waste disposal.
B. ADDITIONAL IMPROVEMENTS: This section serves as a guide in determining what
additional repairs shall be considered to further improve the property in the interests of
achieving the objectives of the program. Items listed in this category are not required to be
addressed in the course of rehabilitation unless it is determined that the severity of the
deficiency is such that it threatens the life, health, or safety of the building occupants or the
public. This section also includes additional code items, applicable Uniform Building Codes,
and City ordinances that may be required. Accomplishment of additional improvements shall
be based upon the economic feasibility of the proposed rehabilitation activity.
C. GENERAL PROPERTY IMPROVEMENTS: This section describes other types of
improvements that may be done in addition to the Required and Additional Repairs to
generally upgrade the property under certain City loans.
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D. INELIGIBLE IMPROVEMENTS & COSTS: This section lists improvements that are
inconsistent with the objectives of the Rehabilitation Program and are therefore ineligible for
Rehabilitation Program funding.
E. MATERIALS AND PRODUCTS: This section describes the basic quality and design criteria
of materials provided through City funding as per the City of Redding Housing Division's
General Specifications.
PROPERTY REHABILITATION STANDARDS Page 2 -
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REQUIRED IMPROVEMENTS
A. PROGRAM REPAIR REOUIREMENTS:
1. Substandard Buildings: Buildings which have previously been determined to be
substandard under the rules and regulations of the City having jurisdiction, shall be
brought up to the standards as mandated by that authority.
2. Outstanding Permit Work and Correction Notices: Properties or buildings which have
prior incomplete work under permit, out- standing correction notices, nuisance
abatement citations or similar related notices for corrective action shall be brought up
to the standards as mandated by the City.
3. Incomplete Construction Not Under Proper Permit: Properties or buildings which
have incomplete work for which the proper permits were not issued shall be inspected
by the City having jurisdiction and shall be brought up to the standards as mandated
by the City.
4. Termite Reports and Related Work: All properties receiving assistance under the loan
program shall have a structural pest control inspection by a licensed pest control
company, unless otherwise exempted by the Rehabilitation Inspector for just cause.
All structural deficiencies and infestation listed on the report shall be corrected. Upon
completion of the work, one or both of the following documents shall be provided to
the City prior to final disbursements:
a) An original Structural Pest Control Report showing the property to be free and
clear of all infestation and infection; or
b) A Notice of Work Completed and Not Completed showing all work completed
as listed on a referenced Structural Pest Control Report and associated Limited
Reports, if any, for the subject property.
5. The general appearance of the outside of the structure and the lot shall be such that
it makes a significant contribution to the general appearance of the neighborhood after
rehabilitation. The following shall serve as minimum standards in accomplishing
such:
a) All buildings on the lot shall be provided with a new exterior paint coating
when the existing coating is peeling, cracking, stained, fading, chalking or
otherwise in a condition that detracts from the appearance of the property.
b) All fences visible from the street that are structurally unsound or have broken,
sagging or missing members, shall be removed, repaired or replaced.
C) All abandoned or nonoperative vehicles or vehicles which constitute a threat
to children shall be removed from areas visible from the street.
PROPERTY REHABILITATION STANDARDS - Page 3 -
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d) All trash and debris shall be removed from areas visible from the street.
6. All properties shall be appraised by a licensed real estate appraiser, as determined in
the City of Redding Housing Rehabilitation Procedures Manual.
7. All dwelling units shall have smoke detectors as per the latest applicable UBC adopted
by the City.
B. CRITICAL CODE:
All buildings on the property or portions thereof which have any of the following deficiencies
to the point that they endanger the life, limb, health, safety or welfare of the public or the
occupants thereof or pose a threat of imminent collapse or failure, shall be corrected under
permit and in accordance with the appropriate construction Code, Zoning and Use
Requirements, and Historical Preservation Requirements. Deficiencies shall include the
following:
1. Structural Deficiencies:
a) Deteriorated or inadequate foundations.
b) Defective, deteriorated, missing or insufficiently sized sub-flooring or floor
supports.
c) Defective, deteriorated or insufficiently sized members of walls, partitions or
other vertical supports that split, lean, list or buckle due to the loads imposed.
d) Defective, deteriorated or insufficiently sized members of ceilings, roofs, and
roof supports which sag, split, or buckle due to the loads imposed.
e) Large holes, severe bulging or large areas of failing wall-covering materials
such as sheetrock or plaster.
fl Fireplaces or chimneys which list, bulge or have visible loose bricks.
g) Defective, deteriorated, loose or missing stairs, landings, handrails, or guard
rails.
h) Plumbing vents that terminate or are broken within the building envelope or
substructure area.
i) Lack of the following minimum plumbing facilities in working order per
dwelling unit:
- One water closet
- One lavatory
- One bathtub or shower
PROPERTY REHABILITATION STANDARDS - Page 4 -
- One kitchen sink
- One hot water heater
j) Fuel-gas piping which is broken, leaking, defective, or in such condition as
to endanger life or property.
2. Hazardous Mechanical Equipment:
a) Lack of adequate heating and cooling source.
b) Improperly vented or unvented gas or wood-burning appliances.
C) Improperly installed or defective mechanical equipment that is in such
condition as to endanger life or property.
3. Hazardous Site Conditions:
a Open abandoned septic tanks cess pools, water wells and dry wells.
b) Trenches and large open pits or holes near public or private walkways.
C) Failed septic systems posing public health problems.
d) Garbage accumulation posing a public health hazard.
ADDITIONAL IMPROVEMENTS
A. All deficiencies listed in the previous Critical Code Section that are not in a condition that
they may endanger the life, limb, health, safety or welfare of the public or the occupants
thereof, or pose the threat of imminent collapse or failure may be corrected.
B. All properties shall be brought to the minimum standards of the Uniform Housing Code,
including Space and Occupancy Standards, Structural Requirements, Mechanical
Requirements, and Exits and Fire Protection. All existing conditions which fall into the
Substandard Buildings Definitions of the above-mentioned codes shall be abated.
C. GENERAL SERVICES AND FACILITIES: Utilities for occupancy shall be provided or
upgraded for each property as follows:
1. Operating connection with a municipal water supply as per City code.
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2. Sanitary facilities connected with municipal sewage system as per City code.
3. Facilities for domestic hot water with a reasonable life expectancy.
4. Heating facilities adequate for healthful and comfortable living conditions.
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5. A minimum of a 100-amp electrical service.
6. Water supply and distribution piping that allows for adequate water pressure and
volume for normal usage.
7. Sewer lines that are properly graded, structurally sound and free from persistent
clogging and intrusion by roots.
D. ACCESS TO PROPERTY AND DWELLING:
t 1. Each property shall be provided with dust-free vehicular access to and from the
property at all times from an abutting public or private street. (Does not include the
paving of private streets.)
2. Safe and durable walks, steps, and existing flat concrete work shall be provided for
convenient all-weather access to the structure. (Does not include the installation of
covered walkways.)
E. SITE IMPROVEMENTS:
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1. Site development of each property shall:
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I a) Provide for the immediate diversion of water away from buildings and
dispersal from the lot.
b) Prevent soil saturation detrimental to the structures.
2. Fences shall be repaired, removed, or replaced when found to be dilapidated or
hazardous.
3. All exterior appurtenances or accessory structures which are in a deteriorated
condition and which are not economically feasible for repair shall be removed or
replaced in kind.
4. All overgrown shrubbery and/or vegetation shall be removed or trimmed.
j 5. All trash, junk, debris, abandoned vehicles or appliances shall be removed from the
property.
F. ROOF COVERING:
1. All roofs shall have a suitable covering free of holes, cracks or excessively worn
surfaces, which will prevent the entrance of moisture into the structure interior and
provide reasonable durability and longevity. Roofs shall have a controlled method of
dispersion of water from the surface. All existing gutters and downspouts shall be in
good repair.
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G. EXTERIOR OPENINGS:
1. Exterior windows and doors shall be equipped with screens and locking devices.
2. Existing doors and windows shall be repaired, unless deteriorated beyond repair, in
which case these shall be replaced with new doors or windows.
H. GENERAL INTERIOR:
1. Properly hung doors with workable hardware shall be provided to each bedroom,
closet, bathroom or toilet compartment.
2. Finished floors shall be provided that are appropriate for the use of the space and in
such a condition so as not to pose a tripping hazard.
3. All stairs, landings and corridors shall be arranged to permit adequate headroom and
the passage of furniture and equipment.
4. All interior finish surfaces that are disturbed as a result of other work called for in the
Required or Additional Improvements sections shall be painted or repainted to the
degree necessary to provide a quality finished project. Existing wall and ceiling
surfaces shall provide for durability and relative economy of maintenance. Areas
subject to moisture shall be painted with a non-absorbent type paint.
I. EXTERIOR ENVELOPE - WEATHER PROTECTION/SECURITY: The following shall be
corrected:
1. Defective or ineffective waterproofing of a dwelling's exterior roof and/or walls,
doors, or windows which allows the penetration of moisture to the interior of the
dwelling.
2. Defective or lack of reasonable security to dwelling, including doors and windows and
associated locking devices.
3. Excessive moisture in habitable rooms due to seepage or drainage.
J. HAZARDOUS ELECTRICAL: The following shall be corrected:
1. Main service, sub-panels, connection or fixture boxes with missing or ineffective
covers or anchorage.
2. Inadequate breaker or fuse size for the wire being serviced.
3. Double lugging or over-loading of circuits.
4. Improper grounding of electrical system.
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5. Overhead service wiring below the minimum height requirements of the City of
Redding Electric Department and/or the National Electric Code.
6. Exposed, loose, or sparking wiring and connections.
7. Lack of adequate electrical outlets.
8. Unfused conductors throughout the dwelling.
K. HAZARDOUS PLUMBING AND WASTE DISPOSAL: The following shall be corrected:
1. Lack of cold running water to plumbing fixtures.
2. Polluted domestic water wells.
3. Improper cross-connections with municipal water supply.
4. Leaking domestic water supply or distribution lines.
5. All conditions which cause open liquid waste or sewage including overwhelmed,
broken,defective, or leaking building drain and sewer lines or private sewage disposal
system.
6. Lack of connection to required sewage disposal system.
L. KITCHEN FACILITIES:
1. Each living unit shall have a specific kitchen space with a chip-free sink, hot and cold
running water, and a non-absorbent counter for the preparation of food.
2. All kitchen floor coverings shall be of a water-impervious material.
3. Countertop work space shall be a minimum of 6 square feet for a one- or two-
bedroom living unit, and 10 square feet for a three- or four-bedroom living unit.
4. Storage shelving shall be a minimum of 30 square feet. Drawer area shall be a
minimum of 5 square feet. (Storage and drawer facilities in pantries, sink or range
complexes may be counted as part of the required storage space.)
5. Existing cabinets with broken or missing components, or permeable surfaces due to
a defective protective finish, shall be repaired and/or refinished unless replacement
with new cabinets is more effective.
6. Kitchens shall be provided with a mechanical exhaust system, to expel smoke and/or
fumes associated with cooking to the exterior.
7. Existing defective built-in ranges, ovens, garbage disposals, and dishwashers shall be
PROPERTY REHABILITATION STANDARDS - Page 8 -
repaired or replaced in kind. Existing defective free-standing ranges may be replaced.
M. BATH FACILITIES:
1. All bathroom floor coverings shall be of a water-impervious material.
2. A locking device shall be provided to each bathroom door.
3. All plumbing fixtures and appurtenances shall be in good working condition and
properly connected to hot and/or cold running water as applicable.
4. Each bathroom shall contain a medicine cabinet, towel bars and a toilet tissue holder.
5. Bathrooms shall be provided with a mechanical exhaust system to expel moisture-laden
air to the exterior when no means of natural ventilation exist.
6. Ground-fault circuit interrupter receptacles or breakers shall be provided to all existing
bathroom outlets.
7. Bathtub or shower enclosures must have suitable wall coverings free of voids or
cracks to prevent the penetration of moisture into the wall cavity and must provide
ease of maintenance, reasonable durability, and longevity.
N. BEDROOMS:
1. Bedrooms shall be enlarged or added when an overcrowding condition exists as
defined by City's Bedroom Addition Policy.
2. Clothes closet space shall be provided within each room being used as a bedroom.
Closets shall be provided with a shelf and clothes pole.
3. Windows in sleeping rooms that are re-framed shall meet current UBC exit standards.
O. LAUNDRY FACILITIES:
1. Provisions for the installation of laundry facilities (utility hook-ups only) shall be
provided on the premises.
P. WEATHERIZATION/ENERGY CONSERVATION:
1. The attics of conditioned areas shall be insulated to a minimum of R-30 with an
acceptable insulative material.
2. Weatherstripping shall be applied as needed around all exterior doors and windows of
conditioned areas. Foam types shall not be utilized for this item. Insulate walls to
a minimum of R-11 with an acceptable insulative material.
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3. Any exterior walls of conditioned areas that are opened down to the studs during the
course of rehabilitation shall be insulated to a minimum of R-11 with an acceptable
insulative material.
4. All joints in the building envelope shall be caulked or sealed and loose or brittle
caulking shall be replaced. This includes caulking around windows.
5. Supply and return heating and air-conditioning ducts shall be insulated where they run
through unconditioned spaces.
6. Water heaters shall have an insulation rating or insulation blanket with a rating of no
less than R-6.
7. When replacing windows, new windows shall be dual-pane.
8. Attics shall be provided with natural ventilation to prevent excessive heat in attics.
Q. All other corrections that, in the opinion of the inspecting Housing Specialist, will prevent the
precipitous deterioration of the property.
GENERAL PROPERTY IMPROVEMENTS
A. General Property Improvements (GPI's) may be made in addition to Required and Additional
Improvements under some City loan programs. These types of improvements are not eligible
under all programs and are limited to forty percent (40%) of the cost of completing the
Required and Additional Improvements.
B. GPI's include the addition of or general upgrading of any component of the structure or
property, providing the improvement is not listed as an Ineligible Improvement. Examples
include but are not limited to:
1. Room additions including bathrooms, bedrooms, kitchens, and general living areas.
2. Upgrading of built-in appliances and fixtures from a medium grade to a high grade.
3. Upgrading of carpet and linoleum.
4. Repainting or finishing of interior surfaces when not a part of the Required or
Additional Improvements.
5. Installation of ceramic tile counters, floors, or shower stalls (except when replacing
in-kind).
6. Kitchen or bath remodeling.
7. Patios and patio covers.
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INELIGIBLE IMPROVEMENTS
There are certain improvements that are clearly inconsistent with the objectives of the Rehabilitation
Program or can not be considered a part of the real property against which the loan is secured. These
types of improvements are not eligible for Rehabilitation Program funding. These improvements
include but are not limited to:
1. Appliances:
- Clothes washers and dryers
- Microwave or toaster ovens
- Refrigerators
- Free-standing room air conditioners or purifiers.
2. Barbecues
3. TV sets or antennas
4. Furniture or area ruas
5. Draperies and appurtenances
6. Swimming pools and spas
7. Burglar protection bars
8. Kennels or other facilities for the care of domestic or farm animals.
9. Fixed or free-standing equipment, and/or alterations or additions to structures or
property that are intended for business use.
10. Expensive luxury or designer goods of an extravagant nature.
11. All other items or work that are not considered or do not improve the real property
to which the loan is secured.
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MATERIALS AND PRODUCTS
A. QUALITY OF MATERIALS AND PRODUCTS: All materials used as replacements or
additions shall be of good quality and of medium grade. Expensive replacements or
installations of an extravagant nature are prohibited. Second-hand material may be used when
agreed to by the parties of the contract and the City of Redding Building Department.
Materials installed shall provide appropriate structural strength, adequate resistance to weather
and moisture, and reasonable durability and economy of maintenance. Refer to the City of
Redding Housing Division's General Specifications for greater detail.
B. DESIGN COMPATIBILITY: Inherent historical architectural character is an important
resource and every effort shall be made to preserve and restore the architectural heritage of
historically significant buildings. Alterations or repairs of all buildings shall be made to match
or improve the original as to style, material, and appearance.
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