HomeMy WebLinkAboutReso 92-343 - Approve modifications of the Mobilehome repair program policy RESOLUTION NO. 'F2—3 e13
'i A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING APPROVING THE
MODIFICATION OF THE MOBILEHOME REPAIR PROGRAM POLICY
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WHEREAS, the City has allocated $30,000.00 in CDBG funds for the Mobilehome Repair
Program in Fiscal Year 1992-93, and $36,500.00 for Fiscal Year 1993-94; and
WHEREAS, the Department of Planning and Community Development of the City of Redding
has prepared and submitted a revised Mobilehome Repair Program Policy; and
WHEREAS, the City Council has reviewed the attached Mobilehome Repair Program Policy;
and
WHEREAS,the City Council has determined that it would be in the best interest of the residents
of the City to expand and modify the Mobilehome Repair Program.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Redding that the
Mobilehome Repair Program Policy, attached hereto as Exhibit "A", is hereby approved and adopted as
the Mobilehome Repair Policy to be used by the Department of Planning and Community Development
of the City of Redding.
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 4th day of August 1992, and was duly adopted at said
meeting by the following vote:
AYES: COUNCIL MEMBERS: Anderson, Arness, Dahl, Kehoe & Moss
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
CH RL-15—MOSS, y r
ATTEST: City of Redding
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CONNIE STROHMAYER, City rk
FORM APPROVED:
RA DALL A. HAY , Ci Attorney
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j EXHIBIT "A"
CITY OF REDDING
MOBILEHOME REPAIR PROGRAM
POLICY
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Prepared by:
Department of Planning & Community Development
Housing Division
July 1992
MOBILEHOME REPAIR PROGRAM
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CONTENTS
SECTION PAGE
1 - INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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2 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3 - DESCRIPTION OF LOAN PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4 - GENERAL ELIGIBILITY REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5 - ELIGIBLE REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6 - INELIGIBLE REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7 - PROCEDURES
Financial Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Rehabilitation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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SECTION i - INTRODUCTION
There are over 2,241 mobilehomes 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
mobilehome 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 mobilehomes, 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.
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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 mobilehome as a principal
residence for lower-income households also increases. This fact supports the consideration that the j
mobilehome 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 coupled with
supplementary financing arranged through the State of California Supplemental Security Income Program.
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.
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.
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.
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.
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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.
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LOW INCOME shall mean those incomes which do not exceed 60 percent of the Redding area-wide j
median income as established by the latest published guidelines from the Metropolitan Statistical Area.
MOBILEHOME 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 60 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
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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 low- and fixed-income households of the elderly and/or disabled.
2. Eligibility. To quality 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
detailed in Section 4 of this document as well as 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 three 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
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- Credit Report Fees
- Lender Processing Fees
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. Eligibilily. To qualify for a Deferred Payment Loan in the Mobilehome Rehabilitation 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.
d. A Deferred Payment Loan shall bear interest at the rate of three percent simple interest per
year.
e. 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 - GENERAL ELIGIBILITY REQUIREMENTS
A. Location
Mobilehomes must be located within Redding city limits in order to be eligible, and be located within
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uan area designated as Residential on the Redding General Plan.
j B. Characteristics of Recipient
1. Mobilehome owners shall meet income guidelines as defined below.
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2. Mobile units must demonstrate a definite need for rehabilitation as detailed by City staff on the
' DWELLING UNIT INSPECTION REPORT.
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3. Mobilehome owners may be selected and prioritized for approval based on applicant's need.
C. Income Guidelines
The income of a mobilehome owner shall not exceed the 60% low-income range of the Redding
j area-wide median income as per the latest published guidelines from the Metropolitan Statistical
Area.
D. Determination of Adjusted 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 5- 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 mobilehomes 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.
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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.
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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.
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
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SECTION 6 - INELIGIBLE REPAIRS
The following repairs are not eligible costs for rehabilitation work under the Mobilehome Repair Program.
1. New construction,substantial reconstruction,expansion of the structure,or the finishing of unfinished
spaces unless otherwise stated in this policy.
2. Materials, fixtures, equipment or landscaping of a type and quality which exceeds adequate service
or that is not customarily used for properties of the same general type.
3. Refinancing the existing debt on property or back taxes.
4. A rehabilitation loan shall not be used to finance or obtain any of the following items:
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- 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 7- PROCEDURES
FINANCIAL PROCESS
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Process Procedures
i 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?
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- 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.
- Shasta County Special Circumstances Program Application,
Form SSP 4A.
- Copy of current mobilehome registration.
- Copy of most recent property tax statement.
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- 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 Loan File: Assemble loan file and evaluate for completeness.
Completed applications.
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- Formal title search through DMV or State HCD office.
- Current mobilehome registration.
- Credit report.
- Property tax statement.
- Income verification of SSI-SSP (or other).
- Equity verification (utilize Bluebook or consult with real estate
service specializing in the mobilehome 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 mobilehome owner. (Owner to have
solicited bid from contractor of his/her choice.) (SEE REHAB
PROCEDURES SECTION)
Submit SCP Application
to County for Approval: When bid is obtained, submit Special Circumstance funding
application package (if required) to Shasta County Social Services
Department for approval.
City Loan Committee
Review and Approval: Pending approval of SCP funding by the County, submit loan
package and photo of mobilehome to Housing Rehab Supervisor for
review and approval by City Rehabilitation Loan Committee.
- Shasta County Social Services Department will confirm funding
approval with phone call and follow-up copy of Notice of Action.
- Rehab Finance Specialist will prepare Rehab Loan Narrative for
Loan Committee.
Assemble Loan
Documents: Assemble and prepare loan documents. This includes the following:
- Security Agreement.
- Statement of Understanding
- Promissory Note
- 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
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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).
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 mobilehome owner prior to
Loan Committee.
Completion of Construction: (SEE REHAB PROCEDURES SECTION)
Disbursement of Funds: Upon acceptance of the completed work by the mobilehome owner,
City staff may release the check for the approved loan amount to
said owner. It is also the responsibility of the owner to contact
Special Circumstance staff with Shasta County to request payment
of any funds approved through the Social Service Program.
Notice of Completion:
(if applicable) It shall be the responsibility of the mobilehome 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.
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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 Mobilehome
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 mobilehome 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).
Loan Approval Process: Put rehab file in order while awaiting approval by the Loan
Committee. Complete HISTORIC AND ARCHITECTURAL
ASSESSMENT FORM.
t Loan Settlement: Upon signing the loan documents, the mobilehome owner is now
ready to sign the construction contract with the contractor. Work
may now commence.
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Work Underway: Owner/contractor responsibility.
Completion of Construction: Owner/contractor responsibility. i
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.
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