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PR 20911: REVISIONS TO THE OWNER OCCUPIED HOUSING ASSISTANCE REHABILITATION AND RECONSTRUCTION PROGRAM GUIDELINES
INTEROFFICE MEMORANDUM DEPARTMENT OF DEVELOPMENT SERVICES DIVISION OF HOUSING AND NEIGHBORHOOD REVITALIZATION Date: June 21, 2019 To: Rebecca Underhill, Interim City Manager From: Beverly Freeman, Housing and Neighborhood Revitalization Manager RE: P.R. No. 20911 Revisions to the Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program Guidelines. Nature of the Request: The Housing Division recommends City Council adopt Proposed Resolution No. 20911 authorizing revisions to the City of Port Arthur's Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program Guidelines. Staff Analysis/Considerations: Community Development Block Grant (CDBG) Program funds and HOME Investment Partnership (HOME) Program funds are allocated annually to the City by the U.S. Department of Housing and Urban Development to provide Emergency, Minor, Full Rehabilitation and Reconstruction activities in accordance with 24 Code of Federal Regulations Part 570 and Part 92. The City Council by authorization of Resolution Number 19-226 (authorizing submission of a 2019 Consolidated Plan) has obligated the City to provide owner occupied rehabilitation and reconstruction assistance to qualified low and moderate income persons/families of the city. The revisions to the City's Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program Guidelines, as recommended by the U.S. Department of Housing & Urban Development, are as follows: OWNER OCCUPIED HOUSING ASSISTANCE REHABILITATION AND RECONSTRUCTION PROGRAM GUIDELINES • Page 7 - Moved the Market Analysis from Section 16 to Section 3. • Page 9 - Section 5, Part A. o #1 — Revised for clarity: ■ To be eligible to apply for assistance, individuals or families must own and occupy or have occupied a residential unit in the City of Port Arthur • Page 10 - Participant Eligibility: o Item 9 — Updated the Annual Income Limits o Item B: Deleted the following: o A credit report is required, at the expense of the applicant, to determine the applicant's financial ability to participate in the Housing Assistance Programs. • Page 11 — Item A: Deleted the following since all applicants are 100% deferred as previously approved by City Council: - in thc Programs, the deferred loan becomes payable in full, or, based on thc required. • Page 15 — Program Structure: Deleted the following since all applicants are 100% deferred as previously approved by City Council: o The in house loans will be a 3% interest bearing payment note. Thcrc will be a • Page 15 — Program Features — o Item C. — Inserting "As applicable" o Item G. — Deleting the following: •—When an eligible applicant's income is verified between 71% to 80% of -- ---:'. - . -- - :--- :r Jefferson County, the applicant will be required to make repayments as listed below: • Page 16 — Implementation Process, Policy & Process for Funding in the Integrated Disbursement Information System (IDIS) o Deleting identified construction costs due to rapid high rising of material and deleting the stated (fees for demolition, site clearance and preparation are not included: • Item C—The following is being revised and the costs is being eliminated: The amount of assistance for a two (2) bedroom unit shall not exceed the Maximum Subsidy Per Unit Limits as identified and published by the U.S. Department of Housing and Urban Development (HUD) annually, $105,000, with an allowance of 10% of the contract amount per location for contingency, as determined necessary on a case by case basis and as approved by the City Council; (fees for demolition, site clearance and preparation arc not included). • Item D -The amount of assistance for a three (3) bedroom unit shall not exceed the Maximum Subsidy Per Unit Limits as identified and published by the U.S. Department of Housing and Urban Development (HUD) annually, $115,000, with an allowance of 10% of the contract amount per location for contingency, as determined necessary on a case by case basis and as approved by the City Council; (fees for demolition, site • Item E - The amount of assistance for a four (4) bedroom unit shall not exceed the Maximum Subsidy Per Unit Limits as identified and published by the U.S. Department of Housing and Urban Development (HUD) annually, $125,000, with an allowance of 10% of the contract amount per location for contingency, as determined necessary on a case by case basis and as approved by the City Council; (fees for demolition, site elearance and preparation are not included). • Page 30-31 - Section 30. c Delinquency Guidelines: adding (If/As Applicable) c Not Sufficient Funds: adding (If/As Applicable) c Informal Payment Plan: adding (If/As Applicable) • Page 31-32 — Section 31. o Default Guidelines: adding (If/As Applicable) o Extended Repayment Agreement: adding (If/As Applicable) • Page 42 - Update the Designated Authority for the Program and the Grievance Procedures. • Page 46 — Added Definitions Recommendations: The Housing Division recommends City Council adopt Proposed Resolution No. 20911 authorizing revisions to the City of Port Arthur's Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program Guidelines. Budget Consideration: N/A P. R. 20911 6/21/19 BAF RESOLUTION NUMBER A RESOLUTION AUTHORIZING REVISIONS TO THE CITY'S OWNER OCCUPIED HOUSING ASSISTANCE REHABILITATION AND RECONSTRUCTION PROGRAM GUIDELINES. WHEREAS, pursuant to the Housing and Urban Development Act of 1974, the U. S. Department of Housing and Urban Development (HUD) awards annual Community Development Block Grant (CDBG) Program funds and HOME Investment Partnership Program (HOME) funds to the City of Port Arthur for the primary benefit of low and moderate income persons/families in accordance with 24 Code of Federal Regulations Part 570 and Part 92; and, WHEREAS, the City Council by authorization of Resolution Number 19-226 has obligated itself to provide owner occupied rehabilitation and reconstruction assistance to low and moderate income persons/families of the city; and, WHEREAS, it is now deemed necessary to revise the Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program Guidelines; and, WHEREAS, the following revisions have been made to the procedures of the City's Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program Guidelines to be utilized on a case-by-case basis, as recommended by the U.S. Department of Housing & Urban Development; and, WHEREAS, the revisions to the guidelines are attached hereto as Exhibit "A"; and, WHEREAS, the revised Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program Guidelines are attached hereto in substantially the same form as Exhibit "B". BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. THAT the facts and opinions in the preamble are true and correct. Section 2. THAT the City Manager is hereby authorized to implement the revised Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program Guidelines that are attached hereto in substantially the same form as Exhibit "A". Section 3. THAT a copy of the caption of this Resolution be spread upon the minutes of the City Council. READ, ADOPTED AND APPROVED this day of A.D., 2019 at a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following vote: AYES: MAYOR COUNCILMEMBERS NOES: MAYOR, DERRICK FORD FREEMAN ATTEST: SHERRI BELLARD, CITY SECRETARY APPROVED FOR FORM: nA VAL.iA TI 0, CI ATTORNEY APPROVED FOR ADMINISTRATION: REBECCA UNDERHILL, INTERIM CITY MANAGER RON BURTON, ASSISTANT CITY MANAGER BEVERLY FREEMAN, HOUSING & NEIGHBORHOOD REVITALIZATION EXHIBIT "A" "°REVISIONS" TO THE OWNER OCCUPIED HOUSING ASSISTANCE REHABILITATION AND RECONSTRUCTION PROGRAM GUIDELINES • Page 7 - Moved the Market Analysis from Section 16 to Section 3. • Page 9 - Section 5, Part A. D #1 — Revised for clarity: • To be eligible to apply for assistance, individuals or families must own and occupy or have occupied a residential unit in the City of Port Arthur • Page 10 - Participant Eligibility: o Item 9 — Updated the Annual Income Limits o Item B: Deleted the following: o A credit report is required, . -- - :-- - ; -- . :: . - , to determine the applicant's financial ability to participate in the Housing Assistance Programs. • Page 11 — Item A: Deleted the following since all applicants are 100% deferred as previously approved by City Council: in the Programs, the deferred loan becomes payable in full, or, based on the •. - --; . - - . ; .,hed based on gross income, loan repayments will be required. • Page 15 — Program Structure: Deleted the following since all applicants are 100% deferred as previously approved by City Council: • • - -- - - - - ' - - - - - • Page 15 — Program Features — c Item C. — Inserting "As applicable" c Item G. — Deleting the following: --When an eligible applicant's income is verified between 71% to 80% of -- ---• - . -- - •--- • fferson County, the applicant will be required to make repayments as listed below: • Page 16 — Implementation Process, Policy & Process for Funding in the Integrated Disbursement Information System (IDIS) Deleting identified construction costs due to rapid high rising of material and deleting the stated (fees for demolition, site clearance and preparation are not included: • Item C—The following is being revised and the costs is being eliminated: The amount of assistance for a two (2) bedroom unit shall not exceed the Maximum Subsidy Per Unit Limits as identified and published by the U.S. Department of Housing and Urban Development (HUD) annually, $ 9-5,000, with an allowance of 10% of the contract amount per location for contingency, as determined necessary on a case by case basis and as approved by the City Council; ( ees- for demolition,-site ci arance and preparation arc not included). • Item D -The amount of assistance for a three (3) bedroom unit shall not exceed the Maximum Subsidy Per Unit Limits as identified and published by the U.S. Department of Housing and Urban Development (HUD) annually, $14-57090, with an allowance of 10% of the contract amount per location for contingency, as determined necessary on a case by case basis and as approved by the City Council; (fees for demolition, site clearance and preparation arc not included), • Item E - The amount of assistance for a four (4) bedroom unit shall not exceed the Maximum Subsidy Per Unit Limits as identified and published by the U.S. Department of Housing and Urban Development (HUD) annually, $125,000, with an allowance of 10% of the contract amount per location for contingency, as determined necessary on a case by case basis and as approved by the City Council; (fees for demolition, site clearance and preparation are not included). • Page 30-31 - Section 30. o Delinquency Guidelines: adding (If/As Applicable) o Not Sufficient Funds: adding (If/As Applicable) o Informal Payment Plan: adding (If/As Applicable) • Page 31-32 — Section 31. o Default Guidelines: adding (If/As Applicable) o Extended Repayment Agreement: adding (If/As Applicable) • Page 42 - Update the Designated Authority for the Program and the Grievance Procedures. • Page 46 — Added Definitions EXHIBIT " B " Circ'of ...i,-;,..:.71111!„:- ort r1JtaL r"`~ Texas CITY OF PORT ARTHUR r t :. ,..,:::-.. t.,I g . .: w ,.-.,.:''.- k : C r2 _ • '' ..;,:. N r ++ } _ i ` i t ^siS , O 2 • . it:',..vrs- 41.7 J HOUSING ASSISTANCE PROGRAMS OWNER OCCUPIED HOUSING REHABILITATION & RECONSTRUCTION ACTIVITIES "REBUILDING COMMUNITIES, ONE BLOCK ATA TIME" 1 'CrRevised June 2019 P.R. 20911 TABLE OF CONTENTS SECTION 1. PURPOSE OF THE PROGRAM 4 SECTION 2. DESIGNATED AUTHORITY 6 SECTION 3. MARKET ANALYSIS 7 SECTION 4. METHOD OF APPLICATION 8 SECTION 5. ELIGIBILITY REQUIREMENTS FOR FINANCIAL ASSISTANCE/ SELECTION PROCEDURES 9 SECTION 6. ALLOWED PROGRAM EXPENSES 11 SECTION 7. FORMS OF ASSISTANCE AND MAXIMUM ASSISTANCE AMOUNTS 11 SECTION 8. EMERGENCY AND MINOR HOME REPAIR PROGRAMS 12 SECTION 9. MINOR HOME REPAIRS 13 SECTION 10. FULL REHABILITATION-BELOW MARKET LOAN/NO INTEREST DERERRED LOAN PROGRAM 13 SECTION 11. DEMOLITION AND RECONSTRUCTION 14 SECTION 12. PROGRAM STRUCTURE 14 SECTION 13. PROGRAM FEATURES 15 SECTION 14. UNDERWRITING 15 SECTION 15. IMPLEMENTATION PROCESS, POLICY FOR FUNDING PROJECTS IN THE INTEGRETATED DISBURSEMENT INFORMATION SYSTEM 16 SECTION 16. REHOUSING AGREEMENT 17 SECTION 17. FEASIBILITY OF REHABILITATION 17 SECTION 18. OWNER/CITY AGREEMENT 18 SECTION 19. PROPERTY REQUIREMENTS 18 SECTION 20. SELECTION OF CONTRACTORS 19 SECTION 21. CONTRACTORS QUALIFICATIONS 19 2 Revised June 2019 P.R. 20911 SECTION 22. CONTRACTING 19 SECTION 23. INSPECTION OF REHABILITATION WORK 20 SECTION 24. PAYMENT PROCEDURES 21 SECTION 25. PROGRAM SPECIFIC REQUIREMENTS 22 SECTION 26. SECTION 3 REQUIREMENTS 26 SECTION 27. FORMS 29 SECTION 28. CONFLICT OF INTEREST 29 SECTION 29. GENERAL PROPERTY IMPROVEMENTS 30 SECTION 30. DELINQUENCY GUIDELINES 30 SECTION 31. DEFAULT GUIDELINES 31 SECTION 32. ENVIRONMENTAL CLEARANCE REQUIREMENTS 32 SECTION 33. CIVIL RIGHTS 36 SECTION 34. LEAD BASED PAINT 37 SECTION 35. GRIEVANCE PROCEDURES 41 SECTION 36. APPLICATION CHECKLIST 43 ACKNOWLEDGEMENT 45 DEFINITIONS 46 3 Revised June 2019 P.R. 20911 CITY OF PORT ARTHUR OWNER OCCUPIED HOUSING ASSISTANCE REHABILITATION AND RECONSTRUCTION PROGRAM FOR SINGLE FAMILY/OWNER OCCUPIED STRUCTURES FUNDING SOURCES: COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME INVESTMENTS PARTNERSHIP (HOME) PROGRAMS Section 1. PURPOSE OF THE PROGRAM: National Objective Overview A. The ultimate use of a project determines how its national objective will be met. The national objective requirements are not met until after the project is underway and there is sufficient documentation to ensure that the project is consistent with the designated national objective. B. Program rules state that in order to be eligible for funding, every Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) funded activity must meet one of the three (3) national objectives listed below: A. Benefit low to moderate income households; B. Aid in the prevention or elimination of slum or blight; or C. To meet a particular urgent need. The purpose of the program is to assist low to moderate income property owners in maintaining their homes, eliminate housing code violations and upgrade neighborhoods. Through this program, the City will help to provide decent, safe, sanitary and affordable housing for residents and promote a viable housing stock for the future. Improvements made through this program will assist in bringing existing substandard units into compliance with the City of Port Arthur Housing Code, U. S. Department of Housing and Urban Development Housing Quality Standards and/or all applicable Housing Standards, locally adopted rehabilitation standards and the City's construction specifications and other State, Federal and local Building Codes and Ordinances. The use of CDBG funds in the Emergency Repairs Program shall be the only program that does not have to meet all construction standards. While threats to health and safety caused by conditions in structures will be alleviated by the emergency assistance whenever possible; the program's primary focus will be to make repairs and improvements to houses which, following rehabilitation, will contribute to the long term structurally sound housing stock of the City of Port Arthur; rather than assist houses which will continue to be substandard following the infusion of program funds. The program will be operated in accordance with all applicable rules and Regulations of the City of Port Arthur, the State of Texas, and the U.S. Department of Housing and Urban Development (HUD) and Other Federal Requirements. Administrative procedures used to implement the program will be 4 0 Revised June 2019 P.R. 20911 added and modified to meet any changes made to such rules and regulations of the above entities, which may occur over time. C. The Program's flexibility is intended to empower the Participating Jurisdictions and communities to design and implement strategies tailored to their own needs and priorities. Low/Moderate Income (LMI) The City of Port Arthur Housing Assistance Programs requires that all housing assistance be provided under the Low/Moderate Income (LMI) national objective. Slum and Blight The activity must be designed to eliminate specific conditions of blight or physical decay located in a designated slum or blighted area. The City of Port Arthur, Texas acting by and through the Housing & Neighborhood Revitalization Division, hereinafter called the "HNRD" will provide financial and technical assistance to low-income applicants residing in the City of Port Arthur in accordance with 24 Code of Federal Regulations Part 92 and Part 570 and Other Federal Requirements. D. The purpose of the program is to assist low-moderate income property owners in maintaining their homes, eliminate housing code violations and upgrade neighborhoods. Through this program, the City will help to provide decent, safe, sanitary and affordable housing for residents and promote a viable housing stock for the future. Improvements made through this program will assist in bringing existing substandard units into compliance with the City of Port Arthur Housing code, U.S. Department of Housing and Urban Development Housing Quality Standards/UPS and/or all applicable Housing Standards, locally adopted rehabilitation standards and the City's construction specifications and other local, State and Federal Building Codes and Ordinances. Note: The only exception is when Emergency Repair Assistance is provided. When CDBG funds are used to provide Emergency Repairs Assistance to alleviate immediate threats to the health and safety of an applicant, the entire structure needs not to be brought into compliance with all Federal, State and Local Building Codes, applicable Housing Standards and the City's construction specifications. While threats to health and safety caused by conditions in structures will be alleviated by the emergency assistance whenever possible; the program's primary focus will be to make repairs and improvements to houses which, following rehabilitation, will contribute to the long term; structurally sound housin g stock of 5 Revised June 2019 P.R. 20911 the City of Port Arthur; rather than assist houses which will continue to be substandard following the infusion of program funds. 1. The program will be operated in accordance with all applicable rules and regulations of the City of Port Arthur, the State of Texas, and the U.S. Department of Housing and Urban Development (HUD) and Other Federal Requirements. Administrative procedures used to implement the program will be added and modified to meet any changes made to such rules and regulations of the above entities, which may occur over time. Section 2. DESIGNATED AUTHORITY A. Administrative authority for implementation of the program will be based on the Administrative Guidelines herewith as approved by the City Council of the City of Port Arthur and will be administered in the office of the Housing and Neighborhood Revitalization Division (HNRD) under the direction of the Housing and Neighborhood Revitalization Manager, Assistant City Manager and City Manager, or his/her designee. B. The Housing and Neighborhood Revitalization Manager or his/her designee, under the direction of the Assistant City Manager and City Manager or his/her designee will be responsible for final approval of applicant eligibility, eligibility for "emergency assistance", and confirmation of eligibility of the work elements proposed to be undertaken. C. The approval of a qualified contractor will be the responsibility of the Purchasing Division and HNRD of the City of Port Arthur, under the direction of the City Manager, or his /her designee. D. The HNRD will notify the applicant and selected contractor of the approval of the bid and will establish a date for the signing of all applicable documents. Prior to the signing of documents, a pre-construction conference will be held. In attendance, shall be the City's Housing & Neighborhood Revitalization Manager, the Housing Inspector, the Loan Specialist, Administrative Staff, the selected Contractor and the applicant or their legally appointed designee. Each item of the work write-up, house plans, and elevations will be reviewed for compliance with State, Federal and local laws, construction specifications and other applicable building codes. E. The HNRD and/or designated staff shall be responsible for carrying out the following activities: 1. Processing & recommending applicant for program assistance 2. Identifying property deficiencies 3. Preparing property evaluations 11* 6 Revised June 2019 P.R. 20911 4. Reviewing work write-ups and cost estimates 5. Preparing and submitting recommendations for awarding bid documents including but not limited to developing plans and specifications 6. Implementing and maintaining construction specification manual 7. Implementing and maintaining a contractor's manual 8. Assisting with preparation of pre-bid conferences and bid openings 9. Preparing contract documents and any other required forms 10.Conducting meetings to explain the contract documents and procedures. 11.Inspecting work for compliance with contract for certifications needed for progress and final payments 12.Authorizing of payment to contractor following City inspection and applicant approval 13.Inspecting request for change orders, initiating written change orders and preparing for City Council review and approval as required and 14. Managing and maintaining program records as required by 24 Code of Federal Regulations Part 92 and 570, Other Federal Requirements, and public relations efforts as needed to promote the program. INSERTED MARKET ANALYSIS HERE — WAS LISTED AS SECTION 16 Section 3. MARKET ANALYSIS A. The following process will be implemented annually for solicit of applicants to be served with the annual HOME Investment Partnership Program and Community Development Block Grant Program funds: 1. The Rehabilitation Demolition and Reconstruction Program will be marketed and is strongly committed to providing information in English, Spanish and Vietnamese. Every effort will be made to make applications available in English, Spanish and Vietnamese. An interpreter of both Spanish and Vietnamese will be made available to assist in the application process. 2. The Housing and Neighborhood Revitalization Manager, his/her designee and Staff will take measures to make the program accessible to all by advertising with media outlets which provide unique access for persons who are considered members of a protected class under the Fair Housing Act including: Ethnic newspapers and/or media outlets. 3. The availability of the Program funds shall be publicized via informational pamphlets, public notices and press releases in the local newspapers and the government channel. Distribution will also be to the local churches, other community organizations 7 ©= Revised June 2019 P.R. 20911 and local broadcast media. B. Not all HOME Investment Partnership Program and Community Development Block Grant projects will require a full-scale market analysis. The market area for projects of various sizes or other characteristics will vary. While such analyses are appropriate for large-scale developments, assessing market conditions in the case of smaller projects will be considerably less burdensome. The purpose of the requirement is to ensure that there will be adequate market demand for a project before committing HOME Investment Partnership Program and Community Development Block Grant. The HOME Investment Partnership Program final rule makes explicit that an underwriting analysis is only required for owner-occupied rehabilitation projects if the HOME Investment Partnership Program funded rehabilitation loan is amortizing; participating jurisdictions will not be required to perform underwriting analyses of HOME Investment Partnership Program funded grants or deferred, forgivable loans to owner- occupants seeking rehabilitation assistance. This rule also makes clear that participating jurisdictions will not be required to perform neighborhood market analysis or evaluate developer capacity for owner-occupied rehabilitation projects or projects involving the provision of HOME Investment Partnership Program funded down payment assistance 92.250(b)(3) & (4). SECTION 4. METHOD OF APPLICATION A. Applications will only be accepted from interested households for at least 90 days, in a year, or until a defined quota is met, in accordance with the annual funding allocation. B. All applications received will be dated stamped as they are received. C. Applications will be reviewed for completeness in the order in which they are received. D. Applications will be screened for completeness and all required information and documentation related to the program eligibility requirements, including, but not limited to the employment, income, assets and liabilities, warranty deed, Jefferson County Tax Assessor record, and Jefferson County Appraisal District, will be verified. E. The Housing and Neighborhood Revitalization Manager or his/her designee and staff shall be responsible for determining the eligibility of each applicant. F. The final decision of the applicants eligibility shall be determined by the Housing and Neighborhood Revitalization Manager or his/her designee. 8 ir Revised June 2019 P.R. 20911 SECTION 5. ELIGIBILITY REQUIREMENTS FOR FINANCIAL ASSISTANCE & SELECTION PROCEDURES A. Participant Eligibility 1. To be eligible to apply for assistance, individuals or families must own and occupy or have occupied a residential unit in the City of Port Arthur. The applicant will be considered the owner if he or she is the "owner on record" according to the records as listed with the County Clerk's Office or other verifiable locations. The applicant/applicant must meet the definition of"applicants" in 24 Code of Federal Regulations Part 92.2 and have a warranty deed and utility bills in his/her name showing the property as his/her principal residence for at least one (1) year. 2. The applicant must meet income limit levels that are established annually by the U.S. Department of Housing and Development (HUD) by the time HOME funds are committed for housing assistance. 3. The applicant must be current on property taxes. 4. The applicant's lot must be a standard sized lot per Code of Ordinance Appendix A Section 10.201 of the City of Port Arthur Zoning Ordinance (i.e. 5000 sq. ft). If the applicant's/applicant's lot is sub-standard, located in an environmentally unsafe location, or located in a high flood plain zone, the City can offer to convey an available City owned property to the applicant, if available. If the applicant agrees to accept the City owned property, the City will demolish the existing home located on the applicant's original lot and rebuild on the conveyed City owned standard size lot that is environmentally safe, located in a safe flood zone. 5. "All moving expenses will be at the expense of the applicant(s)." The City will provide a storage unit for the applicant for the duration of the demolition and reconstruction. 6. All past and present eligible participants of the CDBG and/or HOME Programs, who provide documentation that can be verified and meet the income eligibility requirements as identified in 24 Code of Federal Regulations Part 92, and income of 70% or below the Area Median Income will receive assistance with 100% deferment for the remainder of the affordability period associated with their home. Income Limits are established, adjusted and published by the U.S. Department of Housing and Urban Development (HUD) annually and are used to qualify applicants requesting Housing Assistance. 7. On a case-by-case basis, when an extenuating circumstance has been 9 ©� Revised June 2019 P.R. 20911 determined by the City of Port Arthur, (depending on the applicant's financial ability), the applicant will be considered for a 100% deferment and 100% flexibility will be recommended. All current and projected income for all persons residing in the home will be included as part of the total household income. 8. Housing Assistance will be provided only one time and will be considered on a first come, first serve basis. The applicant will be responsible for any future maintenance and repairs to the rehabilitated or reconstructed home. 9. Income Limits are established, adjusted and published by the U.S. Department of Housing and Urban Development (HUD) annually and are used to qualify applicants requesting Housing Assistance. As of January 2019, the income limits are as follows: Household Size Very Low Income Low Income <50% Median Income <80% Median Income 1 $22,850 $36,550 2 $26,100 $41,750 3 $29,350 $46,950 4 $32,600 $52,150 5 $35,250 $56,350 6 $37,850 $60,500 7 $40,450 $64,700 8 $43,050 $68,850 10. Applicants will be selected and serviced in the order that all required documentation is received and approved by the HNRD. Applications are processed and applicants are considered for assistance once all requirements are met as outlined in these guidelines. Housing assistance will be provided according to the applicant's certification date. NOTE: Applications must be submitted with all required documents as outlined on the attached "Application Checklist", or the application will "not' be accepted. B. PROOF OF GOOD CREDIT A credit report is required, at the cxpcnsc of , to determine the applicant's financial ability to participate in the Housing Assistance Programs. All applicants are required to obtain and maintain hazardous and windstorm insurance and property taxes, as applicable, for the life of the unit. 10 0 Revised June 2019 P.R. 20911 SECTION 6. ALLOWED PROGRAM EXPENSES Funds will be used primarily to finance repairs or replacements of principal fixtures and components needed to bring the structure into substantial compliance with local, State and Federal codes and ordinances, HUD standards, locally adopted rehabilitation standards and the City's Construction Specifications, to eliminate conditions detrimental to the health and safety of the applicants, as well as to provide for the more efficient use of energy in structures where possible. General property improvements designed to improve the overall living environment may also be allowed to a limited extent under the program. Section 7. FORMS OF ASSISTANCE AND MAXIMUM ASSISTANCE AMOUNTS A. The Housing Assistance Rehabilitation and Reconstruction Program funding will be provided to eligible households for the following activities: i. Emergency repair ii. Minor Repair iii. Rehabilitation iv. Demolition and Reconstruction or new construction The major form of assistance will be to provide eligible applicants with either a: 1. no interest deferred payment forgivable loan and/or 2. an amortized below market rate loan These loans will be made to pay for expenses necessary to bring the structure into compliance with Federal, State and local laws, Section 8 Housing Quality Standards and UPS standards. The deferred payment forgivable and/or amortized below market rate loan shall not exceed $50,000, unless deemed necessary by the HNRD Staff. Such exceptions, in extenuating conditions will be considered on a case-by-case basis and will be limited to a $5,000 floating cap or up to a 10% contingency as authorized by City Council. At the time of the loan award, a lien will be placed on the structure for the applicable period of affordability. In the case of deferred forgivable loans, if the house is sold or transferred before the lien period expires, the applicant will receive credit for every month spent in the house on a pro rata basis of 10% of the contract amount per year. The credit is subtracted from the total note amount that is repaid to the City and designated for other eligible housing activities. At the City's option, transfer or ownership to an eligible low to moderate income family member is available if the family member's income is verified at 70% or below the Area Median Family Income for the remainder of the affordability period. In the event an - - • ---- I •- - - • • I . 'II -- -- - • •- :---, . -= -- - • • . :: : • -.1 : :.rticipatc in thc Programs, thc dcfcrrcd loan �- i--- i• • . i - . , V , - - • i - 5 incomc, loan -- - • 11 Revised June 2019 P.R. 20911 Minimum Lien period will be based upon the following CDBG and HOME Program Affordability Periods: CDBG or HOME Length of Lien Investment per Unit Period $1,000 -$5,000 No lien filed $5,001 - $14,999 5 years $15,000 - $40,000 10 years $40,001 & above 15 years B. In the event that $50,000 is not sufficient to bring the entire properly into compliance with Federal, State and local laws, the applicant may be considered for the Demolition and Reconstruction Program. C. Under the CDBG funded Minor Home Repair Assistance Program, a maximum loan of $10,000 is allowed to correct single or minor deficiencies, without bringing the unit fully up to code. A 10% contingency will be allowed for eligible justifiable repair expenses and must be authorized by the City Manager or his/her designee. Section 8. EMERGENCY AND MINOR HOME REPAIR PROGRAMS A. Emergency and Minor Home Repair Assistance programs will be provided to alleviate immediate threats to the health and safety of a person/family, but such repairs will not be designed to bring an entire structure into conformance with any standard or code. Examples of such repairs are: 1. Water leaks 2. Unsafe plumbing conditions 3. Unsafe electrical hazards 4. Alternatively repairs necessary to secure a structure from further deterioration 5. Exposure and degradation caused by such things as exposure to the elements. B. Emergency Assistance to eliminate emanate threats/specific hazards to health, sanitation and safety of low-income persons will be provided up to $5,000, unless otherwise deemed necessary by the City Manager, or his/her designee. In extenuating circumstances, a floating cap of $2,500 is allowed. Assistance will be provided in the form of a grant. A lien will not be filed on the property, if repairs do not exceed $5,000. C. The amount of the Emergency Assistance will be considered in all future requests for Rehabilitation Assistance and will be subtracted from the base maximum amount of assistance in computing feasibility under the regular Rehabilitation Assistance Program. ilThi 12 Revised June 2019 P.R. 20911 D. The Housing & Neighborhood Revitalization Manager or his/her designee will review all applications for Emergency Assistance and the decision of the review will be final. Assistance will be provided to owner-occupants of residential structures on a case-by- case basis. E. Applicants for assistance under the Emergency Program must meet the income eligibility requirements of the regular Rehabilitation Demolition and Reconstruction Program. The Housing & Neighborhood Revitalization Manager or his/her designee will have the authority to waive prior verification of eligibility in cases where an immediate threat to health, safety or sanitation situations exists. Section 9. MINOR HOME REPAIR PROGRAM A. Minor Home Repair Assistance will be provided up to $10,000. The amount of assistance will be determined by the HNRD and is based on the condition of structure. In extenuating circumstances, a floating cap of $3,000 is allowed. Assistance will be provided in the form of a grant and/or below market rate loan based on the amount of assistance as identified in the Loan Schedule. A lien will not be filed on the property, if repairs do not exceed $5,000. B. The Housing & Neighborhood Revitalization Manager and/or his/her designee will review all applications for Minor Home Repair Assistance and the assistance will be final. Assistance will be provided to owner-occupants of residential structures on a case-by-case basis. C. Applicants for assistance under the Minor Home Repair Program must meet the income eligibility requirements of the Rehabilitation & Reconstruction Program. The Housing & Neighborhood Revitalization Manager or his/her designee will have the authority to waive prior verification of eligibility in cases where an immediate danger to health, safety or sanitation exists. Section 10. FULL REHABILITATION BELOW MARKET LOAN/NO INTEREST DEFERRED LOAN PROGRAM A. The Below Market Loan/No Interest Deferred Loan Programs is an outgrowth of the previous Grant and Deferred Payment Forgivable Loan Programs. 1. The program is in response to the increasing need to recapture federal funds. 2. The program is designed to assist in the elimination and prevention of slums and blighted areas, to encourage property owners to upgrade and preserve existing neighborhoods and rehabilitate private properties. 13 © Revised June 2019 P.R. 20911 Section 11. DEMOLITION AND RECONSTRUCTION A. The Housing Reconstruction shall be defined as the demolition, removal and disposal of an existing housing unit and the replacement of that unit on the same lot with a unit that complies with the universal design features in new construction established by §2306.514 Texas Government Code, energy standards as verified by a RESCHECK certification, and the most current International Residential Codes, as required by Subchapter G, Chapter 214 of Local Government Codes. B. The Reconstruction Program will provide assistance for the "voluntary" demolition and reconstruction of dilapidated structures. Structures must not be feasible for rehabilitation to qualify. The cost of rehabilitation must exceed the cost of replacement to qualify. Reconstruction of a housing unit shall be of a similar type structure. C. The applicant's lot must meet minimum regulations per Code of Ordinance Appendix a Section 10.201 and must be located in an environmentally safe location, or a high flood zone area to rebuild the house. If the applicant's lot is substandard, located in an environmentally unsafe location, or a high flood zone area the applicant can "VOLUNTARILY" agree to accept the conveyance of a City owned property, if available, that meets minimum standards per Ordinance 10.201. The Director of Housing & Neighborhood Revitalization and/or the Housing Programs Administrator, or his/her designee, under the direction of the City Manager, Director of Development Services or his/her designee will make the decision if the City will accept the applicants original lot in exchange for an approved City owned lot to begin construction of a HUD approved house. The Director of Housing & Neighborhood Revitalization and/or the Housing Programs Administrator, or his/her designee, under the direction of the City Manager, Director of Development Services or his/her designee will have the authority to make the final decision. D. The Housing Assistance Program staff will be responsible for processing applicants, determining feasibility of rehabilitation, notifying applicant of eligibility and housing options, preparing housing agreements, inspecting rehabilitation and new construction activities, initiating final inspections for certificates of occupancy and maintaining records as required by HUD. Section 12. PROGRAM STRUCTURE Under the Housing Assistance Program, each eligible and approved applicant will receive a loan and/or no interest-deferred loan for home rehabilitation using Community Development Block Grant (CDBG), HOME Investment Partnership (HOME) Program funds and/or other local funds. CI 14 Revised June 2019 P.R. 20911 The City can opt to contract with a local lending institute to service the loan at its discretion. The in house loans will be a 3% interest bearing payment note. There will be . . .. - - - - - - - - - - - - The loans will have deferred scheduled payments. The payments will be collected according to a monthly amortization schedule based on flexible terms. If the property is sold or transferred before the deferred loan is fulfilled, the unamortized portion of the loan will be due and payable in full immediately. Section 13. PROGRAM FEATURES A. Maximum loan amount:$50,000 B. Minimum loan amount: $1,000 C. Effective Interest Rate: 0% 3-% D. Term: Flexible (15 year maximum) E. Maximum income limit is 80% of the Area Median Income adjusted for family size as established by HUD annually. The income guidelines are adjusted annually. F. Applicants may qualify for a Below Market Rate/No Interest Deferred Payment (BMR/NIDP) Loan according to the Loan Schedule listed below and based on gross income. GT--••• . - .': . :: . - :- . ;“•• • : .. . : -- median family income for Jefferson County, the applicant will be required to make repayments as listed below: % Of 0% No Interest Deferred 3% below Market Median Income Payment Rate Loan 0-30% 0% 0% 31-40% 0% 0% 41-50% 0% 0% 51-60% 0% 0% 61-70% 0% 0% 71-80% 0% 7-13/4 0% 30% Section 14. UNDERWRITING A. The maximum housing expense ratio is 300/o. B. The total debt ratio cannot exceed 45%. C. A credit analysis will be completed. D. Income limits will determine qualification. E. Applicant must complete a 4 hour Homeowner Certification Course. 15 'Q Revised June 2019 P.R. 20911 Section 15. IMPLEMENTATION PROCESS, POLICY & PROCESS FOR FUNDING PROJECTS IN THE INTEGRATED DISBURSEMENT INFORMATION SYSTEM (IDIS) A. Due to the limitation of funding, the City currently maintains a list of not more than twenty (20) applicants for the Owner Occupied Housing Assistance Rehabilitation Demolition and Reconstruction Program where a determination has been made that the structure is not feasible to rehabilitate to minimum standards under the City's Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program. B. Applicants are evaluated for reconstruction assistance under the same guidelines as the Rehabilitation Program. The assistance may be in the form of a combination Below Market Rate Loan and a No Interest Deferred Payment Loan as identified in the Loan Schedule. C. The amount of assistance for a two (2) bedroom unit shall not exceed the Maximum Subsidy Per Unit Limits as identified and published by the U.S. Department of Housing and Urban Development (HUD) annually, $105,000, with an allowance of 100/n of the contract amount per location for contingency, as determined necessary on a case by case basis and as approved by the City Council; (fees for--demolition,--s-ite-cicafanee- and- rep-ar-ation-are--trot -included). Additional costs will be allowed on a case by case basis for elevations based on the elevation survey as determined by a professional survey company as/if applicable. D. The amount of assistance for a three (3) bedroom unit shall not exceed the Maximum Subsidy Per Unit Limits as identified and published by the U.S. Department of Housing and Urban Development (HUD) annually, $11-5,000, with an allowance of 10% of the contract amount per location for contingency, as determined necessary on a case by case basis and as approved by the City Council; (fccs for defel+t-ien, site clearance and pree-anti-eta-arc-net- inetuded-). Additional costs will be allowed on a case by case basis for elevations based on the elevation survey as determined by a professional survey company as/if applicable. E. The amount of assistance for a four (4) bedroom unit shall not exceed the Maximum Subsidy Per Unit Limits as identified and published by the U.S. Department of Housing and Urban Development (HUD) annually, $125,000, with an allowance of 10% of the contract amount per location for contingency, as determined necessary on a case by case basis and as approved by the City Council; (fees--€eF ei-itieR, site cicatancc-and-ptcpa-ation arc-net-included). Additional costs will be allowed on a case by case basis for elevations based on the elevation survey as determined by a professional survey company as/if applicable. F. Feasibility determination will be made following a detailed inspection of the property by City Staff. This inspection includes completing a list of deficiencies that must be corrected in order to bring the structure into compliance with Federal, 16 Revised June 2019 P.R. 20911 State and local laws. Feasibility of rehabilitating structures under established program limits will be determined by an assessment of the estimated cost to correct all code violations or to remedy emanate threats to health and safety of persons/families. G. The HNRD activities and projects will be set up in the U. S. Department of Housing and Urban Development (HUD) Integrated Disbursement Information System (IDIS) for monitoring and management of the HUD assisted activity; the activity will be funded in the HUD's Integrated Disbursement Information System (IDIS) only after all applicable steps including an accurate and complete environmental review and a fully executed, legally binding written agreement has been completed and approved by City Council. Section 16. REHOUSING AGREEMENT A. Each applicant will sign a Housing Agreement with the City which outlines the owner's and the City's responsibilities under the program. This agreement establishes a date on which the owner agrees to vacate the present structure, agrees to leave the required utilities active, agrees to let the contractor demolish the structure, agrees to occupy replacement structure, when complete and also agrees that reconstruction is voluntary, therefore, temporary housing during reconstruction is the applicants responsibility. B. Housing Assistance Staff will provide technical assistance to applicants. This assistance will include explaining the program and program procedures used to process applicants request for assistance, assuring applicants understanding program requirements and may include referral of applicant to social service agencies, etc., as appropriate. C. Housing Assistance Staff will conduct liaison oversight with the applicant and construction contractor. Section 17. FEASIBILITY OF REHABILITATION A. In addition to determining eligibility of the applicant, the feasibility of rehabilitation and/or reconstruction of the property to minimum program standards within identified program dollar limits will be made following a detailed inspection of the property, completion of a list of deficiencies, including pictures that must be corrected and a preliminary cost estimate. Feasibility of the project will be determined by an assessment of the estimated of costs needed to substantially correct all code violations and to remedy immediate threats to health and safety. Feasibility will be based upon the replacement cost for comparable units to meet needs. A list of all structures determined to be unfeasible under the program will be maintained which will serve as the waiting list for the Owner Occupied Housing Assistance Rehabilitation Demolition and Reconstruction Program. 17 © Revised June 2019 P.R. 20911 B. If the feasibility analysis indicates a budget in excess of $50,000, based on the estimate for rehabilitation and the applicant does not desire reconstruction, the Director of Housing and Neighborhood Revitalization and/or the Housing Programs Administrator or his/her designee, shall provide in writing a determination to "walk away" from the program after notifying the applicant in writing, offering an explanation that the project is not feasible. C. Due to the funding limitation, the City reserves the right to close the application season once objectives are met for the year and if funds become no longer available for rehabilitation and reconstruction assistance, as not to provide un- realistic hope to anyone applying for rehabilitation and/or reconstruction assistance. Section 18. OWNER/CITY AGREEMENT A. An Owner/City Agreement between the applicant and the City of Port Arthur will be required as part of each Below Market Rate Loan, (BMRL)/Deferred Loan made under the program. This agreement will outline responsibilities of each and will include provisions for the filing of a lien when appropriate. The City Manager, City Attorney, and City Secretary will sign this agreement on behalf of the City. Section 19. PROPERTY REQUIREMENTS A. The property must be a single family dwelling located within the City of Port Arthur. B. The applicant must provide evidence of ownership. The following will be considered eligible forms of ownership: 1. Warranty Deed 2. Fee simple Title 3. Contract for Deed is not eligible evidence of ownership. 4. After assistance is provided, the housing unit must remain in compliance with Federal, State and Local Codes, Regulations, and the Locally Adopted Property Standards. 5. Newly constructed homes (including reconstructs) must meet: 6. Energy standards as verified by a RESCHECK certification. The certification must be available in the administration file, prior to closing. 7. The most current International Residential Code as established by §2306.514 Texas Government Code, energy standards as verified by a RESCHECK certification, and the most current International Building Codes, as required by Subchapter G, Chapter 214 of Local Government Codes. 8. Any housing unit built before 1978 must be inspected for hazards associated with the presence of lead-based paint or may be presumed to have lead- based paint hazards. Proof of notifications, work completed and clearance examination must be available in the file. 18 'Q Revised June 2019 P.R. 20911 Section 20. SELECTION OF CONTRACTORS (ALL PROGRAMS) A. The City of Port Arthur will participate as an objective third party to the contractor selection process. The City acts as an oversight or administrative agency only. 1. The bid process will be processed through the City of Port Arthur Purchasing and HNRDs. The contract will be awarded directly to the lowest and most responsible bidder, if the bid meets cost reasonableness parameters (10-15% higher or lower than staff and/or professional estimates), as approved by City Council. B. A contract will not be awarded to the lowest responsible bidder if that contractor has a maximum of three (3) incomplete rehabilitation or reconstruction projects at the time of the bid opening or if it has been determined that the contractor should be rejected, due to non compliance with Local, State and Federal codes, ordinances and regulations; i.e., no insurance, failure to perform, or the contractor being listed with the SAM.gov, etc. C. In all cases, documentation that bids were solicited and awarded competitively will be maintained and in all cases contractors will be notified of bid results and awards in writing. Section 2L CONTRACTOR QUALIFICATION A. The City will adopt qualifications and regulations with respect to contractor qualifications and will maintain an active contractor list. B. All work performed by the contractor will be required to be guaranteed for one (1) year period following certificate of final inspection. The Housing administrative staff or designated staff will be responsible for making applicants aware of this guarantee and will assist in enforcing this guarantee should problems arise. Section 22. CONTRACTING A. Form of Contract — Rehabilitation work will be undertaken through a written contract between a licensed contractor and the applicant. Housing and Neighborhood Revitalization staff will prepare the contract for signature by the contractor and the applicant. Approval by the City to fund improvements contained in the contract will be required in order for funding of the contract to be dispensed. The signature of the City Manager, City Attorney, and City Secretary on the contract document will be evidence of City approval. The contract will consist of a single document made up of the bid, general and specific terms of the contract, and specification of work to be accomplished under the contract and a copy of the Owner-City Agreement. 19 Revised June 2019 P.R. 20911 B. Change Order Procedure — Except as specifically provided otherwise in contracts, any alterations, additions, or deletions to the terms of contracts shall be by submission of requests for an amendment hereto in writing, and must be submitted to the City Council for approval before any alterations, additions, or deletions to the terms of contract can be executed by both parties to the contract in an amount not to exceed 25% of the total contract amount. C. Changes in scope of work or to allow for cost increase/decrease required to pay the cost of repair and/or replacement of actual code violations which were not observed or known at the time of the preparation of the original contract must be submitted to the City Council for approval before any alterations, additions or deletions to the terms of this contract can be executed by all parties to the contract. However, an exception may be if there is no increase or decrease in costs, but only the scope of work, and the amount does not exceed the authorized amount as designated for approval by the City Manager, or his/her designee. Section 23. INSPECTION OF REHABILITATION WORK A. Housing Assistance staff and the City Inspections and Permits Department will have the responsibility for making inspections on work being financed by the program. Staff will make inspections as necessary to assure work is being completed according to the contract. Inspections will always be made when progress payments are requested or when requests to change or add to original scope of work are made either by the Contractor or Applicant. Additionally, inspectors will make periodical on-site inspections. B. Upon adequate final inspection, the Housing & Neighborhood Revitalization Manager, or designated staff members will obtain a release of liens/lien waivers from each subcontractor, general and if applicable, major supplier, whenever payment is made. Contractor must also provide a copy of each warranty due to the applicant. Following this, a Notice of Completion will be issued and a final payment minus 10% retainage will be authorized. All of retainage will be returned 30 days following Notice of Completion unless problems have surfaced which need to be resolved. The Housing & Neighborhood Revitalization Manager, or designated staff members will inspect the property 11 months after completion to assure defects, (if any), have been identified so they can be corrected during the warranty period and to assure the property is being maintained in accordance with 24 Code of Federal Regulations 92.209, 92.504 and 92.251. C. Applicants with warranty concerns should make a written request to the contractor and forward a copy of this request to the City. The contractor will be given ten (10) working days to remedy the concern. Any contractor unwilling to honor their warranty will be considered a non-responsible contractor and will be 20 Revised June 2019 P.R. 20911 taken off the approved contractor list; until such time that the concerns are addressed. D. The property will be re-inspected every three (3) years to assure the participant is maintaining the property as required for compliance during the affordability period of the property in accordance with 24 Code of Federal Regulations 92.209, 92.504 and 92.251. In the event the property is inspected and documented as not in compliance with Federal Regulations and Local requirements, all necessary actions will be taken to alleviate any violations and bring the unit into compliance. Section 24. PAYMENT PROCEDURE For construction, payment will be made in three (3) phases: A. Inspection of the construction work in progress will be made to ensure that such work is being carried out in accordance with the terms of the AGREEMENT and the HOME Program Regulations as delineated in 24 Code of Federal Regulations Part 92, local, Federal, State codes and ordinances, all applicable most current International Residential and Building codes and the CONSTRUCTION SPECIFICATIONS. B. The City shall compensate the CONTRACTOR and implement CLOSEOUT REQUIREMENTS as follows. Except as hereinafter provided, payment for the Construction Contract will be made in progress payments. 1. Payment one (1) will be fifty percent (50%) of total contract amount if at least fifty percent (50%) of the work provided under this Contract has been completed, inspected and accepted, less five percent (5%) held in retainage. 2. Payment two (2) will be forty-five percent (50%) of total contract amount if at least one hundred percent (100%) of the work provided under this Contract has been completed, inspected and accepted, less five percent (5%) held in retainage. 3. Final payment will be the five percent(s) (5%) held as retainages. This retainage will be held by the City for a maximum of thirty (30) days after satisfactory completion, inspection and acceptance of the Contract to guarantee the completion of work. Thirty (30) days after said completion, inspection and acceptance, final payment shall be made in a lump sum or total agreed price less the progress payment, as made, by check issued by the City of Port Arthur and made payable to the CONTRACTOR for the satisfactory completion, inspection and acceptance of the work, described herein. 21 Revised June 2019 P.R. 20911 Section 25. PROGRAM SPECIFIC REQUIREMENTS Recapture Provision A. Homes assisted with HOME Investment Partnership Program and the Community Development Block Grant Program funds must satisfy the affordability requirements for a time no less than the applicable period as indicated by the table(s) that follows, beginning after a project has been completed in accordance with 24 Code of Federal Regulations Part 92 and Part 570. B. During the affordability period, the following rules related to the owners investment, where applicable, and the HOME Investment Partnership Program and the Community Development Block Grant Program funds are applicable: 1. The dwelling assisted with the HOME Investment Partnership Program and the Community Development Block Grant Program funds subsidy will be the principal residence of the participant and will not be rented or used for other purposes. 2. The participant will not engage the property to obtain a mortgage, gift, sell or exchange the property without the written consent of the Municipality of the City of Port Arthur, Texas. 3. The Municipality will inspect the property eleven (11) months after completion of the housing assistance and every 2 years thereafter to assure that the participant is in compliance with these requirements during the affordability period of the property. C. In the event the Applicant dies or is unable to reside in the home as his/her principal residence prior to the expiration of the aforementioned fifteen (15) year period of affordability, the applicant hereby agrees and understands that he or she / his or her estates, whichever is applicable, shall be liable to the City of Port Arthur for the amount of costs expended in the rehabilitation based upon scheduled outlined in the owner agreement. D. Per 92.254(a) (5)(ii) Recapture provisions may permit a subsequent low income homebuyer/applicant to assume the existing loan and affordability obligations, if NO ADDITIONAL HOME Investment Partnership Program assistance is provided to the subsequent low income homebuyer. E. The non-compliance with the terms and conditions mentioned in this provision will obligate the participant to reimburse the total amount of the subsidy to the Municipality. 22 Revised June 2019 P.R. 20911 F. The affordability period of the property will be as follows, according to the HOME Investment Partnership Program Regulations 24 Code of Federal Regulations Part 92.254: CDBG or HOME Length of Lien Investment per Unit Period $1,000 -$5,000 No lien filed $5,001 - $14,999 5 years $15,000 - $40,000 10 years $40,001 & above 15 years G. If the participant sells the property within the affordability periods and net proceeds are sufficient to repay HOME Investment Partnership Program Funds invested and applicant investment, the Municipality will recover the full amount of HOME Investment Partnership Program funds investment only. The participant will recover any amount for investments and apply the following formula for distribution of surplus net proceeds. Non compliance during Recapture amount of HOME Program affordability period and Community Development Block Grant Program Assistance Year 1 100% recaptured Year 2-5 80% recaptured Year 6-9 60% recaptured Year 10-13 40% recaptured Year 14-15 20% recaptured H. If the participant sells, rents, or vacates the property within any of the affordability periods, but net proceeds are insufficient to repay HOME Investment Partnership Program and the Community Development Block Grant Program funds and applicant investment, the Municipality will allow the participant to recover its whole investment before recapturing HOME Investment Partnership Program funds' investments. I. In consideration of the applicant property that is provided structural rehabilitation or demolition & reconstruction improvements for the Applicant pursuant to means from award of HOME Investment Partnership Program and/or the Community Development Block Grant Program funding to the City of Port Arthur, by the Department of Housing and Urban Development (HUD) from the City of Port Arthur, Applicant shall hereby agree as follows: 4. The Applicant shall not transfer, assign, encumber or sell the home or an interest herein for a period of fifteen (15) years from the date of the final acceptance of all work required under the Contract. Further, the Applicant shall not sell, assign, encumber or transfer any of his/her rights or obligations 23 Revised June 2019 P.R. 20911 contained herein in whole or in part without the previous written consent of the City. In the event that the Applicant sells, assigns, encumbers or transfers the property or 5. The Applicant dies or is unable to continue to maintain the property as their primary residence prior to the expiration of the aforementioned fifteen (15) year period, the Applicant hereby agrees and understands that his/her estate, whichever is applicable, shall be liable to the City of Port Arthur for the amount of costs expended in the rehabilitation based upon the following schedule in accordance with 24 Code of Federal Regulations Part 92.254: a. If the property is sold, assigned, transferred or encumbered or if the Applicant dies within the first twelve (12) months following the date of final completion of the rehabilitation, the Applicant or his/her estate, as applicable, must repay one hundred percent (100%) of the amount funded by the City of Port Arthur's HOME Investment Partnership Program in accordance with 24 Code of Federal Regulations Part 92 for the rehabilitation of the home: b. If the property is sold, assigned, transferred or encumbered or if the Applicant dies at any time during years 2 — 5, the Applicant or his/her estate, as applicable, are responsible to reimburse eighty percent (800/o) of the amount spent on the rehabilitation. c. If the property is sold, assigned, transferred or encumbered or if the Applicant dies at any time during years 6 — 9, the Applicant or his/her estate, as applicable, is responsible to reimburse sixty percent (60%) of the amount spent on rehabilitation. d. If the property is sold, assigned, transferred or encumbered or if the Applicant dies at any time during years 10 — 13, the Applicant or his/her estate, as applicable, is responsible to reimburse forty percent (40%) of the amount spent on rehabilitation. e. If the property is sold, assigned transferred or encumbered or if the Applicant dies at any time during years 14 — 15, the Applicant or his/her estate, as applicable, is responsible to reimburse twenty percent (20%) of the amount spent on rehabilitation. 3. Such amounts shall be due and owing on the date the property is sold, assigned, transferred or otherwise encumbered. Failure to remit the appropriate amount owed to the City of Port Arthur in a timely manner shall result not only in interest calculated in accordance with Chapter 2251 of the Texas Government Code, but also in the Applicant or his/her estate, as applicable, being obligated to pay court 24 Revised June 2019 P.R. 20911 costs and all attorneys' fees expended by the City in order to collect the amount owed to the City. K. Other requirements shall apply: 1. The participants will pay up to $5,000 to cover the cost of legal service in case of breaches of any of the terms and condition of this provision. 2. The participant will allow that the HOME Investment Partnership Program and the Community Development Block Grant subsidy constitute a second mortgage to their property. 3. Specific documentation required to calculate HOME Investment Partnership Program and the Community Development Block Grant Program net proceeds. 4. Once the documentation is presented, the Municipality will determine the amount of the recapture on a case-by-case basis. L. In addition to the recapture restrictions to be incorporated in the deed of sale and promissory note, other provisions will be established to guarantee that the units remain affordable for subsequent applicants. These provisions include the following considerations: 6. A provision restricting refinancing and subsequent mortgages of the property, without the written consent of the Municipality. Refinancing will be limited to capital improvements without equity return. This restriction is necessary, as refinancing with cash return will have the effect of reducing the profit at resale thus violating the purpose of resale / recapture provisions. In addition, a higher monthly payment after refinancing could represent a risk of foreclosure due to income adjustments. A requirement that the property will be used as the principal residence of the applicant(s) will not be leased, converted, sold, donated, and permuted to other such use without written consent of the Municipality. 7. The indebtedness evidence by the Note, and any other financial obligation which may hereafter be imposed on borrower by the Lender, is subordinate to the indebtedness evidence by a note payable to a senior lender ("Senior Lien Holder"), which note is secured by a first deed of trust (the "First Deed of Trust") dated of even date therewith encumbering certain real property located in Port Arthur, Texas (the "Property"). 8. In the implementation of the Program, the Department will comply and will require recipients to comply with the provisions of 24 CFR 92.217, Income targeting and 24 CFR 92.254, Qualifications as affordable housing. 25 Cr Revised June 2019 P.R. 20911 SECTION 26. SECTION 3 REQUIREMENTS The City of Port Arthur's HNRD will incorporate Section 3 in its existing Procurement Policy and adopt a Section 3 Contracting Policy and Procedure to be included in all procurements generated for use with HUD funding. The policy and procedures contain goal requirements for awarding contracts to Section 3 Business Concerns. All contractors/businesses will be required to seek Section 3 preference before submitting bids/proposals to the City of Port Arthur's Purchasing Division & HNRD and will be required to complete certifications, as appropriate, as acknowledgement of the Section 3 contracting and employment provisions required by this section. Such certifications shall be adequately supported with appropriate documentation as referenced in the form. All section 3 covered contracts shall include the following clause (referred to as the section 3 clause): A. The work to be performed under this contract is subject to the requirements of section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u (section 3). The purpose of section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered by section 3 shall, to the greatest extent feasible, be directed to low- and very low-income persons, particularly persons who are recipients of HUD assistance for housing. B. The parties to this contract agree to comply with HUD's regulations in 24 CFR pPart 135, which implement section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the 24 Code of Federal Regulations Part 135 regulations. C. The contractor agrees to send to each labor organization or representative of workers with which the contractor has collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this section 3 clause, and will post copies of the notice in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the section 3 preference, shall set forth minimum number and job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin. D. The contractor agrees to include this section 3 clause in every subcontract subject to compliance with regulations in 24 CFR Part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR Part 135. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that ith 26 Revised lune 2019 P.R. 20911 the subcontractor has been found in violation of the regulations in 24 CFR Part 135. E. The contractor will certify that any vacant employment positions, including training positions, that are filled (1) after the contractor is selected, but before the contract is executed, and (2) with person other than those to whom the regulations of 24 CFR part 135 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR part 135. F. Noncompliance with HUD's regulations in 24 CFR Part 135 may result in sanctions, termination of this contract for default, and debarment of suspension from future HUD assisted contracts. G. With respect to work performed in connection with section 3 covered Indian housing assistance section 7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract. Section 7 (b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises. Parties to this contract that are subject to the provisions of section 3 and section 7 (b) agree to comply with section 3 to the maximum extent feasible, but not in derogation of compliance with section 7 (b). Program Participant Responsibilities • Written procedures governing notification to eligible residents about employment and training opportunities generated by Section 3 covered assistance in 24 CFR 135.32 (a) requires that HUD grantees must provide adequate notification to all potential Section 3 eligible about possible Section 3 employment and training opportunities. The Housing and Neighborhood Revitalization Division will certify Section 3 program participants who reside in the City of Port Arthur and who are seeking preference in training and employment by completing and attaching adequate proof of Section 3 eligibility, as required. • Whenever the City of Port Arthur holds a public hearing, whether for an Annual Action Plan or the Consolidated Plan, participants will be informed of the City's Section 3 efforts; • The City of Port Arthur's Consolidated Annual Performance and Evaluation Report (CAPER) will include a Section 3 report that reflects the number of Section 3 participants during the reporting period. • All persons living in the City who meet the Section 3 eligibility guidelines can, by appointment, visit with the City Manager or his/her designee to complete a job readiness assessment. 27 Revised June 2019 P.R. 20911 • Once this assessment is complete, the Housing & Neighborhood Revitalization Manager or his/her designee and the Purchasing Manager, under the direction of the Director of Development Services or his/her designee, will determine if the individual meets the eligibility requirements and is job ready. • If the individual is deemed eligible for Section 3 participation and deemed not ready for employment, a referral will be made to other agencies that are better equipped to address the individual's needs, i.e., substance abuse providers, etc. • The Section 3 job readiness component is a part of the City of Port Arthur's commitment to provide economic opportunities and training to residents/eligible participants to become gainfully employed. • Twice a year, public housing residents will be notified of Section 3 possibilities for training and employment in an insert mailed with their monthly rent statements. The City Manager or his/her designee will coordinate this marketing through the Division of Tenant Resources. • Written procedures governing notification to Section 3 business concerns about contracting opportunities generated by Section 3 covered assistance 24 Code of Federal Regulations 135.32 (b) requires that HUD grantees must provide adequate notification to all potential Section 3 business concerns about contract opportunities generated by Section 3 covered assistance. The Housing & Neighborhood Revitalization Department under the direction of the Director of Development Services or his/her designee will use the following methods to notify and contract with Section 3 business concerns when contracting opportunities exist. • Whenever the Housing & Neighborhood Revitalization Department holds a public hearing, whether for an Annual Action Plan, CAPER, or Consolidated Plan, participants, including businesses and contractors, will be informed of the City's Section 3 efforts; • Advertise contracting opportunities via newspaper, mailings, posting notices that provide general information about the work to be contracted and where to obtain additional information. • Whenever an existing HNRD Contract is signed or renewed, all sub recipients and contractors will receive copies of the HUD Section 3 brochure (HUD-1476-FHEO Rev 2) for themselves and to distribute to subcontractors they might use. 28 © Revised June 2019 P.R. 20911 • Provide written notice of contracting opportunities to all known Section 3 business concerns. The written notice will be provided in sufficient time to enable business concerns the opportunity to respond to the bid invitation. • Coordinate pre-bid meetings at which the Section 3 business concerns would be informed of upcoming contracting opportunities in advance. • Conduct workshops on the City's contracting procedures to include bonding, insurance, and other pertinent requirements, in a timely manner in an effort to allow Section 3 business concerns the opportunity to take advantage of any upcoming contracting opportunities. • Contact the City of Port Arthur's, business assistance agencies, Minority and Women's Business Enterprise (M/WBE) contractor associations and community organizations to inform them of contracting opportunities and to request their assistance in identifying Section 3 businesses. • Establish relationships with the Small Business Administration (SBA), Minority and Women's Business Enterprise M/WBE association, Economic Development Corporation, Community Development Corporations, and other sources as necessary to assist SPHA with educating and mentoring residents with a desire to start their own businesses. • Seek out referral sources in order to ensure job readiness for public housing residents through on-the-job-training (OJT) and mentoring to obtain necessary skills that will transfer into the external labor market. • Develop resources or seek out training to assist residents interested in starting their own businesses to learn to prepare contracts, prepare taxes, and obtain licenses, bonding, and insurance. • The establishment of and fulfillment of numerical goals for employment and training opportunities for residents and contracting employees for Section 3 business concerns. Section 27. FORMS A. The City Attorney, prior to their use in operation of the program will approve all forms used as part of the implementation of the programs and which constitute legal instruments, such as the contracts and other legal documents. Section 28. CONFLICT OF INTEREST A. No member of the City Council and no other official, employee or agent of the city government who exercise policy decision-making functions or responsibilities in 29 'CrRevised June 2019 P.R. 20911 Connection with the planning and implementation of the Housing Assistance Program shall directly or indirectly benefit from the program, be eligible for the program or have an interest in any contract, subcontract either for themselves or those with whom they have an immediate family or business ties. Section 29. GENERAL PROPERTY IMPROVEMENTS (GPI) General property improvements may include but are not required and shall not exceed 20% of the total of the required repairs for code and incipient violations. 1. Painting of walls, etc., not provided or corrected as part of rehabilitation. 2. Bathroom hardware requested by the applicant that is in place prior to rehabilitation. This may include mirrors, medicine cabinets, towel bars, toilet paper holders, and soap dishes. Grab rails needed for handicapped occupants are not considered as bathroom hardware as it applies to this section. 3. Closing in/and or adding moving interior doors, which are not absolutely necessary for other essential rehabilitation. 4. Provision of additional shelves, closet space, etc., to increase storage space of the occupants. 5. Landscaping, removal of dead trees not endangering the structure. 6. Additional of kitchen cabinets and food preparation areas in excess of minimum standards. 7. Safety devices requested by the applicant such as floodlights, etc., not required under Minimum Rehabilitation Standards. 8. Doorbells 9. Installation of new and/or replacement of existing floor coverings when not cited as a violation. 10.Upgrades of materials, which exceed the minimum grade and price established by the City. To the extent feasible, GPIs may be included in the approved bid amount. However, should the amount needed to correct all required repairs exceed the amount of assistance available, all GPI items will be removed and the cost reduced accordingly. Section 30. DELINQUENCY GUIDELINES (If/As Applicable) Notices 10 Day After a 10-day grace period, a late charge of $4.00 will be assessed to the account. At this point, the Borrower can pay the total amount due or contact the HNRD to discuss any special considerations he/she might need to meet his payment agreement. 30 Day 30 Revised June 2019 P.R. 20911 After a 30 days delinquent period, if contact or payment has not been made, a letter will be sent to the Borrower. The Housing & Neighborhood Revitalization Division will also call the Borrower to discuss repayment. 60 and 90 Day If there is no response after a 30-day notice, a certified letter will be mailed, with a return receipt requested and a call will be made to the Borrower at 60 and 90 days. These contacts will express the importance of repayment, the possibility of default with possible foreclosure on the loan. Beyond 90 days, the loan will be in default and foreclosure on the property will be considered. Not Sufficient Funds (If/As Applicable) Checks returned due to "Not Sufficient Funds" will automatically make the Borrower's account delinquent, as the payment(s) will have to be reversed in the Mortgage Service. To make the account current, a letter will be sent requesting the Borrower to pay the original payment amount plus late charge and a $30.00 NSF charge per check in the form of cash, money order or cashier's check. Informal Payment Plan (If/As Applicable) If the Borrower is less than three payments behind, he/she can schedule an informal payment plan with the Loan Service. An informal loan will allow the Borrower to pay as needed to make the account current. Example: The Borrower can work out a plan to make weekly or bi-weekly payments until the account is current. If after two months the Borrower cannot make his account current then he/she has the option of requesting forbearance. Section 31. DEFAULT GUIDELINES (If/As Applicable) Forbearance Special consideration for forbearance may be given if the Borrower has a situation with extenuating circumstances that prevents the Borrower from being able to make payments as stated in the contract. To have a situation considered, the Borrower needs to contact the Housing & Neighborhood Revitalization Staff and inform them verbally of the situation and provide the following written information: 1.) A letter informing the Housing & Neighborhood Revitalization Staff of the situation requiring special consideration and; 2.) Substantiating evidence of the situation (medical bills, legal papers, etc.), 31 Revised June 2019 P.R. 20911 If the City Manager approves the request for the forbearance, then the interoffice memorandum of recommendation will be presented to the City Council for discussion in the Executive Session of City Council for the Council's review and final approval. Extended Repayment Agreement (If/As Applicable) An extended repayment agreement can be established to bring the Borrower out of default/foreclosure. The City Manager shall work out the terms of this agreement. Late payments, interest due and late charges will be added to the current principal balance of the loan and re-amortized to determine the new monthly payment amount and term. This agreement will be signed by the borrower(s) and the City Manager and will become the new loan agreement. Foreclosure If after three months (90 days) the Borrower has not responded to the delinquency letters and calls and has not made a payment, the loan will be in default. The file will UC referred LU II IC City I"Ic1IIQUCI pIIU LI It Legal uepaiLIIIelIL for foreclosure proceedings in accordance with the Texas Property Code. After foreclosure proceedings have been completed in accordance with the Texas Property Code, the City can permit a new subsequent low income applicant that qualifies for the Reconstruction/Rehabilitation Program to assume the existing loan and affordability obligations if no additional HOME Investment Partnership Program and the Community Development Block Grant Program assistance is provided to the subsequent homebuyer; or, if the entire original subsidy may be recovered from the original applicant. The City may enter into a new agreement with a separate affordability obligation with a new qualifying low income applicant who will receive a separate HOME subsidy. The City Manager or his/her designee will have the authority to make the final decision if the City would have the applicant convey the applicant's substandard lot. Summary The goals of our programs are to provide decent, safe and sanitary housing and to provide opportunities for low to moderate-income families and individuals; not to repossess homes. Therefore, every effort possible will be made to work out an agreement to keep the applicants in their homes up the 90-day default. Section 32. ENVIRONMENTAL CLEARANCE REQUIREMENTS AND STANDARDS IN ACCORDANCE WITH 24 CODE OF FEDERAL REGULATIONS PART 58 A. The City shall be responsible for providing all information, concerning HOME Investment Partnership Program and the Community Development Block Grant Program 32 Revised June 2019 P.R. 20911 funded projects, and are required to meet the City's responsibilities for environmental review, decision-making, and other action, which applies to City in accordance with and to the extent specified in 24 Code of Federal Regulations, Part 58. In accordance with 24 Code of Federal Regulations 58.77(b), the City shall make all reasonable efforts in handling inquiries and complaints from persons and agencies seeking redress in relation to environmental reviews covered by approved certifications. B. 58.5 Related Federal laws and authorities In accordance with the provisions of law cited in §58.1(b), the responsible entity must assume responsibilities for environmental review, decision-making and action that would apply to HUD under the following specified laws and authorities. The responsible entity must certify that it has complied with the requirements that would apply to HUD under these laws and authorities and must consider the criteria, standards, policies, and regulations of these laws and authorities. 1. Historic properties. (1) The National Historic Preservation Act of 1966 (16 U.S.C. 470 et seq.), particularly sections 106 and 110 (16 U.S.C. 470 and 470h-2). 2. Executive Order 11593, Protection and Enhancement of the Cultural Environment, May 13, 1971 (36 FR 8921), 3 Code of Federal Regulations 1971-1975 Comp., p. 559, particularly section 2(c). 3. Federal historic preservation regulations as follows: (i) 36 Code of Federal Regulations part 800 with respect to HUD programs other than Urban Development Action Grants (UDAG); and (ii) 36 Code of Federal Regulations part 801 with respect to UDAG. 4. The Reservoir Salvage Act of 1960 as amended by the Archeological and Historic Preservation Act of 1974 (16 U.S.C. 469 et seq.), particularly section 3 (16 U.S.C. 469a-1). 5. Floodplain management and wetland protection. (1) Executive Order 11988, Floodplain Management, May 24, 1977 (42 FR 26951), 3 CFR, 1977 Comp., p. 117, as interpreted in HUD regulations at 24 Code of Federal Regulations part 55, particularly section 2(a) of the order (For an explanation of the relationship between the decision- making process in 24 Code of Federal Regulations part 55 and this part, see §55.10 of this subtitle A.) 6. Executive Order 11990, Protection of Wetlands, May 24, 1977 (42 FR 26961), 3 Code of Federal Regulations, 1977 Comp., p. 121, particularly sections 2 and 5. 7. Coastal Zone Management. The Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.), as amended, particularly section 307(c) and (d) (16 U.S.C. 1456(c) and (d)). 111 33 Revised June 2019 P.R. 20911 8. Sole source aquifers. (1) The Safe Drinking Water Act of 1974 (42 U.S.C. 201, 300(f) et seq., and 21 U.S.C. 349) as amended, particularly section 1424(e) (42 U.S.C. 300h-3(e)). 9. Sole Source Aquifers (Environmental Protection Agency-40 Code of Federal Regulations part 149). 10. Endangered species. The Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.) as amended, particularly section 7 (16 U.S.C. 1536). 11. Wild and scenic rivers. The Wild and Scenic Rivers Act of 1968 (16 U.S.C. 1271 et seq.) as amended, particularly section 7(b) and (c) (16 U.S.C. 1278(b) and (c)). 12. Air quality. (1) The Clean Air Act (42 U.S.C. 7401 et. seq.) as amended; particularly section 176(c) and (d) (42 U.S.C. 7506(c) and (d)). 13. Determining Conformity of Federal Actions to State or Federal Implementation Plans (Environmental Protection Agency-40 CFR parts 6, 51, and 93). 14. Farmlands protection. (1) Farmland Protection Policy Act of 1981 (7 U.S.C. 4201 et seq.) particularly sections 1540(b) and 1541 (7 U.S.C. 4201(b) and 4202). (i) Farmland Protection Policy (Department of Agriculture-7 Code of Federal Regulations part 658). (ii) HUD environmental standards. (1) Applicable criteria and standards specified in part 51 of this title, other than the runway clear zone notification requirement in §51.303(a) (3). 15. Also, it is HUD policy that all properties that are being proposed for use in HUD programs be free of hazardous materials, contamination, toxic chemicals and gases, and radioactive substances, where a hazard could affect the health and safety of occupants or conflict with the intended utilization of the property. (i) The environmental review of multifamily housing with five or more dwelling units (including leasing), or non-residential property, must include the evaluation of previous uses of the site or other evidence of contamination on or near the site, to ensure that the occupants of proposed sites are not adversely affected by any of the hazards listed in paragraph (i) (2) (i) of this section. (ii) Particular attention should be given to any proposed site on or in the general proximity of such areas as dumps, landfills, industrial sites, or other locations that contain, or may have contained, hazardous wastes. (iii) The responsible entity shall use current techniques by qualified professionals to undertake investigations determined necessary. 16. Environmental justice. Executive Order 12898—Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, February 11, 1994 (59 FR 7629), 3 Code of Federal Regulations, 1994 Comp. p. 859. 34 Revised June 2019 P.R. 20911 [61 FR 19122, Apr. 30, 1996, as amended at 68 FR 56128, Sept. 29, 2003] 17. 58.6 Other Requirements A. In addition to the duties under the laws and authorities specified in §58.5 for assumption by the responsible entity under the laws cited in §58.1(b), the responsible entity must comply with the following requirements. Applicability of the following requirements does not trigger the certification and release of funds procedure under this part or preclude exemption of an activity under §58.34(a) (12) and/or the applicability of §58.35(b). However, the responsible entity remains responsible for addressing the following requirements in it's ERR and meeting these requirements, where applicable, regardless of whether the activity is exempt under §58.34 or categorically excluded under §58.35(a) or (b). (a) (1) Under the Flood Disaster Protection Act of 1973, as amended (42 U.S.C. 4001-4128), Federal financial assistance for acquisition and construction purposes (including rehabilitation) may not be used in an area identified by the Federal Emergency Management Agency (FEMA) as having special flood hazards, unless: (i) The community in which the area is situated is participating in the National Flood Insurance Program (see 44 Code of Federal Regulations parts 59 through 79), or less than one year has passed since the FEMA notification regarding such hazards; and (ii) Where the community is participating in the National Flood Insurance Program, flood insurance protection is to be obtained as a condition of the approval of financial assistance to the property owner. B. Where the community is participating in the National Flood Insurance Program and the recipient provides financial assistance for acquisition or construction purposes (including rehabilitation) for property located in an area identified by FEMA as having special flood hazards, the responsible entity is responsible for assuring that flood insurance under the National Flood Insurance Program is obtained and maintained. C. Paragraph (a) of this section does not apply to Federal formula grants made to a State. (i) Under section 582 of the National Flood Insurance Reform Act of 1994, 42 U.S.C. 5154a, HUD disaster assistance that is made available in a special flood hazard area may not be used to make a payment (including any loan assistance payment) to a person for repair, replacement or restoration for flood damage to any personal, residential or commercial property if: (ii) The person had previously received Federal flood disaster assistance conditioned on obtaining and maintaining flood insurance; and (iii) The person failed to obtain and maintain flood insurance. 35 Revised June 2019 P.R. 20911 D. Pursuant to the Coastal Barrier Resources Act, as amended by the Coastal Barrier Improvement Act of 1990 (16 U.S.C. 3501), HUD assistance may not be used for most activities proposed in the Coastal Barrier Resources System. E. In all cases involving HUD assistance, subsidy, or insurance for the purchase or sale of an existing property in a Runway Clear Zone or Clear Zone, as defined in 24 Code of Federal Regulations part 51, the responsible entity shall advise the buyer that the property is in a runway clear zone or clear zone, what the implications of such a location are, and that there is a possibility that the property may, at a later date, be acquired by the airport operator. The buyer must sign a statement acknowledging receipt of this information. [61 FR 19122, Apr. 30, 1996, as amended at 63 FR 15271, Mar. 30, 1998] Section 33. CIVIL RIGHTS The Fair Housing Act (42U.S.C. 3601-20) and implementing regulations at 24 Code of Federal Regulations part 10; Executive Order II063, as amended by Executive Order 11063, as amended by Executive Order 12259 (3 Code of Federal Regulations, 1958-1963 Comp., 652 and 3CFR, 1980 Comp., p. 307) (Equal Opportunity in Housing and implementing regulations at 24 Code of Federal Regulations, Part 107; and title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (Nondiscrimination on Federally Assisted Programs) and implementing regulations issued at 24 CFR, Part 1; Executive Order 11063, as amended by Executive Order 12259, and 24 Code of Federal Regulations part 107, "Nondiscrimination and Equal Opportunity in Housing under Executive order 11063 or 24 Code of Federal Regulations, Part 107 shall be a proper basis for the imposition of sanctions specified in 24 Code of Federal Regulations 107.60; The prohibition against discrimination on the basis of age under the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and implementing regulations t 24 Code of Federal Regulations, Part 146, and the prohibitions against discrimination against handicapped individuals under Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 Code of Federal Regulations, Part 8; The requirements of Executive Orders 1246 (3 Code of Federal Regulations 1964-65, Comp., p. 339) (Equal Employment Opportunity) and the implementing regulations issued at 4I Code of Federal Regulations, Chapter 60. The requirements of Executive Orders 11625 and 12432 (concerning Minority Business Enterprise), and 12138 (concerning Women's Business Enterprise). Consistent with HUD's responsibilities under these Orders, each applicant must make efforts to encourage the use of minority and women's business enterprises in connection with HOME funded activities. Each Contractor must prescribe procedures acceptable to the State to establish activities to ensure the inclusion, to the maximum extent possible, of 36 Revised June 2019 P.R. 20911 minorities and women, and entities owned by minorities and women. The Contractor/Subcontractor will be required to identify contracts, which have been bid by minority owned, women owned, and/or small disadvantaged businesses. The Age Discrimination Act of 1975 (42 U.S.C., Section 6101 et seq.); Section 504 of the Rehabilitation Act of 1973 (29 U.S.C., Section 794) and "Nondiscrimination Based on Handicap in Federally-Assisted Programs and Activities of the Department of Housing and Urban Development," 24 CFR, Part 8. By signing this contract, Contractor understands and agrees that the activities funded herein shall be operated in accordance with 24 CFR, Part 8; and the Architectural Barriers Act of 10968 (42 U.S.C., Section 4151 et. seq.), including the use of a telecommunications device for deaf persons (TDDs) or equally effective communication system. Section 34. LEAD-BASED PAINT POISONING PREVENTION IN CERTAIN RESIDENTIAL STRUCTURES IN ACCORDANCE WITH 24 CODES OF FEDERAL REGULATIONS PART 35 35.100 Purpose and Applicability A. Purpose. The requirements of subparts B through R of this part are promulgated to implement the Lead-Based Paint Poisoning Prevention Act, as amended (42 U.S.C. 4821 et seq.), and the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851 et seq.). 35.910 Notices and pamphlet A. Notices. In cases where evaluation or hazard reduction or both are undertaken as part of federally funded rehabilitation, the grantee or participating jurisdiction shall provide a notice to occupants in accordance with §35.125. A visual assessment alone is not considered an evaluation for the purposes of this part. B. Lead hazard information pamphlet. The grantee or participating jurisdiction shall provide the lead hazard information pamphlet in accordance with §35.130. [69 FR 34272, June 21, 2004] 35.915 Calculating Federal Rehabilitation Assistance In Certain Structures With Lead- Based Paint Hazards. A. Applicability. This section applies to recipients of Federal rehabilitation assistance. B. Rehabilitation assistance. (1) Lead-based paint requirements for rehabilitation fall into three categories that depend on the amount of Federal rehabilitation assistance provided. The three categories are: (i) Assistance of up to and including $5,000 per unit; (ii) Assistance of more than $5,000 per unit up to and including $25,000 per unit; and 37 Revised June 2019 P.R. 20911 (iii) Assistance of more than $25,000 per unit. (1) For purposes of implementing §35.930 and 35.935, the amount of rehabilitation assistance is the lesser of two amounts: the average Federal assistance per assisted dwelling unit and the average per unit hard costs of rehabilitation. Federal assistance includes all Federal funds assisting the project, regardless of the use of the funds. Federal funds being used for acquisition of the property are to be included as well as funds for construction, permits, fees, and other project costs. The hard costs of rehabilitation include all hard costs, regardless of source, except that the costs of lead- based paint hazard evaluation and hazard reduction activities are not to be included. Costs of site preparation, occupant protection, relocation, interim controls, abatement, clearance, and waste handling attributable to compliance with the requirements of this part are not to be included in the hard costs of rehabilitation. All other hard costs are to be included, regardless of whether the source of funds is Federal or non-Federal, public or private. C. Calculating rehabilitation assistance in properties with both assisted and unassisted dwelling units. For a residential property that includes both federally assisted and non- assisted units, the rehabilitation costs and Federal assistance associated with non- assisted units are not included in the calculations of the average per unit hard costs of rehabilitation and the average Federal assistance per unit. (1) The average per unit hard costs of rehabilitation for the assisted units is calculated using the following formula: Per Unit Hard Costs of Rehabilitation $ = (a/c) + (b/d) Where: a = Rehabilitation hard costs for all assisted units (not including common areas and exterior surfaces) b = Rehabilitation hard costs for common areas and exterior painted surfaces c = Number of federally assisted units d = Total number of units (2) The average Federal assistance per assisted dwelling unit is calculated using the following formula: Per unit Federal assistance = e/c Where: e = Total Federal assistance for the project 38 Revised June 2019 P.R. 20911 f = Number of federally assisted units [69 FR 34272, June 21, 2004] 35.925 Examples of determining applicable requirements The following examples illustrate how to determine whether the requirements of §§35.930(b), (c), or (d) apply to a dwelling unit receiving Federal rehabilitation assistance (dollar amounts are on a per unit basis): A. If the total amount of Federal assistance for a dwelling is $2,000, and the hard costs of rehabilitation are $10,000, the lead-based paint requirements would be those described in §35.930(b), because Federal rehabilitation assistance is up to and including $5,000. B. If the total amount of Federal assistance for a dwelling unit is $6,000, and the hard costs of rehabilitation are $2,000, the lead-based paint requirements would be those described in §35.930(b). Although the total amount of Federal dollars is more than $5,000, only the $2,000 of that total can be applied to rehabilitation. Therefore, the Federal rehabilitation assistance is $2,000, which is not more than $5,000. C. If the total amount of Federal assistance for a unit is $6,000, and the hard costs of rehabilitation are $6,000, the lead-based paint requirements are those described in §35.930(c), because the amount of Federal rehabilitation assistance is more than $5,000 but not more than $25,000. D. If eight dwelling units in a residential property receive Federal rehabilitation assistance [symbol c in §35.915(c)(2)] out of a total of 10 dwelling units [d], the total Federal assistance for the rehabilitation project is $300,000 [e], the total hard costs of rehabilitation for the dwelling units are $160,000 [a], and the total hard costs of rehabilitation for the common areas and exterior surfaces are $20,000 [b], then the lead-based paint requirements would be those described in §35.930(c), because the level of Federal rehabilitation assistance is $22,000, which is not greater than $25,000. This is calculated as follows: The total Federal assistance per assisted unit is $37,500 (e/c = $300,000/8), the per unit hard costs of rehabilitation is $22,000 (a/c + b/d = $160,000/8 + $20,000/10), and the level of Federal rehabilitation assistance is the lesser of $37,500 and $22,000. [64 FR 50212, Sept. 15, 1999, as amended at 69 FR 34272, June 21, 2004] 35.930 Evaluation and hazard reduction requirements A. Paint testing. The grantee or participating jurisdiction shall either perform paint testing on the painted surfaces to be disturbed or replaced during rehabilitation activities, or presume that all these painted surfaces are coated with lead-based paint. 39 © Revised June 2019 P.R. 20911 B. Residential property receiving an average of up to and including $5,000 per unit in Federal rehabilitation assistance. Each grantee or participating jurisdiction shall: (1) Conduct paint testing or presume the presence of lead-based paint, in accordance with paragraph (a) of this section. If paint testing indicates that the painted surfaces are not coated with lead-based paint, safe work practices, and clearance are not required. (2) Implement safe work practices during rehabilitation work in accordance with §35.1350 and repair any paint that is disturbed. (3) After completion of any rehabilitation disturbing painted surfaces, perform a clearance examination of the worksite(s) in accordance with §35.1340. Clearance is not required if rehabilitation did not disturb painted surfaces of a total area more than that set forth in §35.1350(d). C. Residential property receiving an average of more than $5,000 and up to and including $25,000 per unit in Federal rehabilitation assistance. Each grantee or participating jurisdiction shall: (1) Conduct paint testing or presume the presence of lead-based paint, in accordance with paragraph (a) of this section. (2) Perform a risk assessment in the dwelling units receiving Federal assistance, in common areas servicing those units, and exterior painted surfaces, in accordance with §35.1320(b), before rehabilitation begins. (3) Perform interim controls in accordance with §35.1330 of all lead-based paint hazards identified pursuant to paragraphs (c) (1) and (c) (2) of this section. (4) Implement safe work practices during rehabilitation work in accordance with §35.1350 and repair any paint that is disturbed and is known or presumed to be lead- based paint. D. Residential property receiving an average of more than $25,000 per unit in Federal rehabilitation assistance. Each grantee or participating jurisdiction shall: (1) Conduct paint testing or presume the presence of lead-based paint in accordance with paragraph (a) of this section. (2) Perform a risk assessment in the dwelling units receiving Federal assistance and in associated common areas and exterior painted surfaces in accordance with §35.1320(b) before rehabilitation begins. (3) Abate all lead-based paint hazards identified by the paint testing or risk assessment conducted pursuant to paragraphs (d) (1) and (d) (2) of this section, in accordance with §35.1325, except that interim controls are acceptable on exterior surfaces that are not disturbed by rehabilitation and on paint-lead hazards that have an area smaller than the de minimis limits of §35.1350(d). If abatement of a paint-lead 40 © Revised June 2019 P.R. 20911 hazard is required, it is necessary to abate only the surface area with hazardous conditions. (4) Implement safe work practices during rehabilitation work in accordance with §35.1350 and repair any paint that is disturbed and is known or presumed to be lead- based paint. [64 FR 50214, Sept. 15, 1999; 65 FR 3387, Jan. 21, 2000, as amended at 69 FR 34273, June 21, 2004] Section 35. GRIEVANCE PROCEDURE City of Port Arthur Housing Assistance Programs Any applicant or participant of services from the Housing & Neighborhood Revitalization Department shall have the right to appeal any decision in the form of a grievance. This appeal shall be made in writing to the HNRD, provided such appeal is made within fifteen (15) days from the date the decision has been rendered or the grievance occurred and/or became know to the applicant. If the applicant/participant is not satisfied with the decision of the Housing and Neighborhood Revitalization Manager, or his/her designee, applicant may then appeal his or her grievance to the Director of Development Services, pertaining to services received or applied for. The procedure for filing a grievance is as follows: 1) The person(s) filing the grievance may either verbally or in writing request an appointment with the HNRD to present the complaint. At this informal stage of the resolution process, the complaint may be presented either in written form or verbally. It is the Division's intent to respond to and resolve the complaint as practically & quickly as possible. A response to the complaint should be made no later than 10 working days from the date of receipt. 2) Should the response by the HNRD or its designees be determined not to be satisfactory to the person(s) bringing the complaint, an appeal may be made directly to the Director of Development Services. At this stage of the resolution process, the request for appeal and the complaint itself is to be submitted in writing. The complaint should fully describe the nature of the problem and contain all pertinent information that may aid in understanding the scope of the problem. The Director of Housing & Neighborhood Revitalization, Housing Programs Administrator or his/her designee has option of meeting with the person(s) involved before reaching a decision. A response to the complaint should be made as expeditiously as practical, but no later than 10 working days from the date of receipt of all written information provided or requested. 3) Should the response by the Director of Housing & Neighborhood Revitalization, Housing Programs Administrator or their designee, not be satisfactory to the person(s) bringing the complaint, an appeal may be made directly to the Director of Development Services requesting review of the decision. The request for appeal and review should be 41 Revised June 2019 P.R. 20911 in writing. A response to the complaint should be made within twenty (20) working days from receipt of the request for appeal to the Director of Development Services. No member, officer, agent, or employee of the City of Port Arthur shall be personally liable concerning any matters arising out of or in relation to, the commitment of the Housing Assistance Programs funds with regard to feasibility or viability of the proposed project. No member of the governing body of the City and no other official, employee, or agent of the City who exercises policy or decision-making functions or responsibilities in connection with the planning and implementation of this Program shall be eligible for rehabilitation assistance in accordance with 24 Code of Federal Regulations Section 570.489 (h), "Conflict of Interest" The following list identifies the names, addresses, and telephone numbers of the persons to contact to file a grievance: Beverly A. Freeman, Housing & Neighborhood Revitalization Manager 444 4t Street Port Arthur, Texas 77640 (409) 983-8259 Ron Burton, Director of Development Services Assistant City Manager 444 4th Street Port Arthur, Texas 77640 (409) 983-8135 Rebecca Underhill, Interim City Manager 444 4th Street Port Arthur, Texas 77640 (409) 983-8101 I, (We), the undersigned, have read and understand the grievance procedure described above which is to be used for the purpose of resolving any complaint relating to the Housing & Neighborhood Revitalization Housing Assistance Programs of the City of Port Arthur, Texas. Applicant Date Co-applicant Date 122 42 Revised June 2019 P.R. 20911 OWNER OCCUPIED REHABILITATION/RECONSTRUCTION PROGRAM GUIDELINES "APPLICATION CHECKLIST" General Intake VERY IMPORTANT NOTE: An application must be submitted with "ALL Required Documents, (items "a to in or the application cannot be accepted. 1. WHEN APPLICANT/APPLICANT RETURNS A SIGNED/DATED APPLICANT APPLICATION A REVIEW WILL BE MADE FOR ALL PERTINENT INFORMATION (ASSETS, INCOME, SS#, PHONE, SIGNATURE/S ETC. THE APPLICATION WILL BE STAMPED & DATED TO VALIDATE IT IS RECEIVED). a) Copy of identification, for all members of the household, as applicable. b) Copy of social security cards for all members of household. c) Copy of current utility bills in the name of the applicant for water, lights, and gas. d) Copy of last "2" years of tax statements and W-2's, as applicable. e) Proof of income for all household members for "3 consecutive months"; (Check stubs, Social Security Award Letter for current year, Child Support award letter and/or Retirement award letter; checkstubs for all household members must be consecutive — (Monthly/1 check, Bi- Weekly/2 checks — Weekly/4 checks), If there is a college student, a certified copy of transcript and a letter showing how school tuition is being paid for with all financial information. f) Copy of "6 consecutive months" of bank statements for all household members, as applicable. (Must not skip a month. Start with most recent and go back 6 consecutive months) Example: January, December, November, October, Septmber and August. If applicant does not have checking account, verification will be accepted by notarized form letter. g) Copy of Warranty Deed in the name of applicant only. (Deed must have bar code number — filed with Jefferson Courthouse) NOTE: Applicant must be occupant/owner of the home for at least "one" year. h) Printout of Jefferson County Tax Records www.co.jefferson.tx.us; (Applicant is "NOT" eligible for City's 43 © Revised June 2019 P.R. 20911 Federal Applicant Reconstuction/Rehabiliation Program if taxes are owed on the property). i) A list of all other properties owned by applicant. I and acknowledge (Print Your Name) (Print Your Name) I have received, read, and understand the City of Port Arthur's Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program Checklist that details all pertinent information required before I can be given consideration for Applicant's Rehabilitation and Reconstruction Assistance. Participant Participant Date 44 Revised June 2019 P.R. 20911 ACKNOWLEDGEMENT All applicants, potential homebuyers and/or tenants should receive a copy of the City Of Port Arthur's Housing & Neighborhood Revitalization Programs Guidelines for the Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program and the Homebuyers Assistance New Construction and Existing Home Purchase Program Guidelines, which contain information regarding the program rules and Federal Regulations in accordance with 24 Code of Federal Regulations Parts 92 and 570. I and acknowledge (Print Your Name) (Print Your Name) I have received, read, and understand the City of Port Arthur's Owner Occupied Housing Assistance Rehabilitation and Reconstruction Program Guidelines and/or the Homebuyers Assistance New Construction and Existing Home Purchase Program Guidelines. Participant Participant Date 45 Revised June 2019 P.R. 20911 Definitions Affordability: affordability refers to the requirements of the HOME Program that relate to the cost of housing both at initial occupancy and over established timeframes, as prescribed in the HOME regulations. Affordability requirements vary depending on the nature of the HOME-assisted activity. Affordable Housing: affordability refers to the requirements of the HOME Program that relate to the cost of housing both at initial occupancy and over established timeframes, as prescribed in the HOME regulations. Affordability requirements vary depending on the nature of the HOME-assisted activity (i.e., applicantship or rental housing). Annual Income: The HOME Program allows the use of three income definitions for the purpose of determining applicant eligibility: 1. annual income as defined in 24 CFR 5.609; or 2. annual income as reported under the Census Long Form for the most recent decennial census; or 3. adjusted gross income as defined for purposes of reporting under Internal Revenue Service (IRS) Form 1040 series for individual Federal annual income tax purposes. The definitions are collectively referred to as annual income and are also used in the Community Development Block Grant (CDBG) Program. Applicant: A person or a family that has applied for housing assistance. [24 CFR 5.403] Application: A written request for occupancy in a subsidized housing unit that includes the information required to determine eligibility for assistance and suitability for tenancy. Owners generally develop a standardized form that is completed by the prospective applicant. The application must be signed and dated by the applicant and include the applicant's certification that the information provided is complete and accurate. Assets: Cash and other assets that are expected to be converted to cash or consumed within one year. Community Development Block Grant Program (CDBG): A Federal program created under the Housing and Community Development Act of 1974. This program provides grants funds to local and State governments to be used to develop viable urban communities by providing decent housing with a suitable living environment and expanding economic opportunities to assist low- and moderate-income residents. CDBG replaced several categorical grant programs such as the Model Cities Program, the Urban Renewal Program and the Housing Rehabilitation Loan and Grant Program. 46 Revised June 2019 P.R. 20911 CDBG is awarded to entitlement communities to carry out a wide range of community development activities directed toward revitalizing neighborhoods, economic development, and providing improved community facilities and services. CDBG funds: Community Development Block Grant funds, including funds received in the form of grants under subpart D, F, or 570.405 of this part, funds awarded under section 108(q) of the Housing and Community Development Act of 1974, loans guaranteed under subpart M of this part, urban renewal surplus grant funds, and program income as defined in 570.500(a). Certification: Shall have the meaning provided in section 104(21) of the Cranston- Gonzalez National Affordable Housing Act, as amended, 42 U.S.C. 12704. Checklist: The form developed by HUD for use by landholding agencies to report the information to be used by HUD in making determinations of suitability. Contractors: A contractor is an entity paid with CDBG funds in return for a specific service (e.g., construction). Contractors must be selected through a competitive procurement process. Deferred-payment loans: A loan which aiiows the borrower to defer all the monthly principal and interest payments until the maturity date of the promissory note, at which time the outstanding principal loan balance and all accrued interest is due and payable. Documentation: Source documents, such as wage statements, interest statements, unemployment compensation statements, etc., must be reviewed to determine annual (gross) income. Eligibility is based on anticipated income during the next 12 months. Emergency: Physical work items that pose an immediate threat to the life, health and safety of residents, or that are related to fire safety. 24 CFR 901.05(n). Fair Housing Act: Title VIII of the Civil Rights Act, 42 U.S.C. 3601. The Fair Housing Act is a broad statute that prohibits discrimination based upon race, color, religion, sex, national origin, disability, or familial status in most housing and housing-related transactions. Family: A household composed of two or more related persons. The term family also includes one or more eligible persons living with another person or persons who are determined to be important to their care or well-being, and the surviving member or members of any family described in this definition who were living in a unit assisted under the program with the person with AIDS at the time of his or her death. Federal Financial Assistance: Any assistance provided or otherwise made available by the Department through any grant, loan, contract, or any other arrangement, in the form of: 47 Revised June 2019 P.R. 20911 1. Funds; 2. Services of Federal personnel; or 3. Real or personal property or any interest in or use of such property, including: a. Transfers or leases of the property for less than fair market value or for reduced consideration; and b. Proceeds from a subsequent transfer or lease of the property if the Federal share of its fair market value is not returned to the Federal Government. Federal financial assistance: Includes community development funds in the form of proceeds from loans guaranteed under Section 108 of the Housing and Community Development Act of 1974, as amended, but does not include assistance made available through direct federal procurement contracts or payments made under these contracts or any other contract of insurance or guaranty. First-come, first-served: Applicants are served on a first-come, first-served basis. To ensure fairness, the date and time they applied should be stamped on their application by the person receiving the application. Foreclosure: The process of taking possession of a mortgaged property as a result of the mortgagor's failure to keep up mortgage payments Full-Time Student: A person who is attending school or vocational training on a full- time basis. Grant: Agree to give or allow something requested. Household: One or more persons occupying a housing unit. HOME Investment Partnership (HOME): A program established and funded by HUD by formula among eligible State and local governments to strengthen public and private partnerships and to expand the supply of decent, safe, sanitary, and affordable housing, with primary attention to rental housing, for very low-income and low-income families. Low-Income Family: A family whose annual income does not exceed 80 percent of the area median income, as determined by HUD, with adjustments for smaller and larger families. Low and Moderate Income: Low and moderate income (also referred to in this manual as LMI) means family or household with an annual income less than the Section 8 Low Income Limit, generally 80 percent of the area median income, as established by HUD. Income Household/Family: A household/family having an income equal to or less 48 © Revised June 2019 P.R. 20911 Market Analysis: The process of determining factors, conditions, and characteristics of a market. Moderate-Income Household/Family: A household/family having an income equal to or less than the Section 8 Low Income limit (80% of area median income) established by HUD, but greater than the Section 8 Very Low Income limit (50% of area median income) established by HUD. International Residential Code (IRC): The International Residential Code is a comprehensive, stand-alone residential code that creates minimum regulations for one- and two-family dwellings of three stories or less. It brings together all building, plumbing, mechanical, fuel gas, energy, and electrical provisions for one- and two- family residences. Loan: A mortgage loan made through a Program and in accordance with the provisions of this Guide. Low-and moderate-income household: A household having an income equal to or less than the Section 8 low-income limit established by HUD. Low- and moderate-income person: A member of a family having an income equal to or less than the Section 8 low-income limit established by HUD. Unrelated individuals will be considered as one-person families for this purpose. Ownership: A family or individual owns the property if that family or person who has fee simple title to the property. Principal Residence: A single-family dwelling in which, at the time of loss, the named insured or the named insured's spouse has lived for either 80 percent of the 365 days immediately preceding the loss, or 80 percent of the period of ownership, if less than 365 days. Property Standards: Properties that are rehabilitated with HOME funds must meet certain standards. This section briefly discusses the standards that apply to properties rehabilitated with HOME assistance. (For full information on standards for all HOME- assisted properties, see Exhibit 2-1 in Chapter 2: General Program Rules). Rehabilitation: The labor, materials, tools, and other costs of improving buildings, other than minor or routine repairs. The term includes where the use of a building is changed to an emergency shelter and the cost of this change and any rehabilitation costs does not exceed 75 percent of the value of the building before the change in use. Reconstruction: Also Rehabilitation; the stage at which all necessary title transfer requirements and construction work have been performed; the project complies with all HOME requirements. 49 © Revised June 2019 P.R. 20911 Reconstruction (also rehabilitation): The rebuilding, on the same lot, of housing standing on a site at the time of project commitment. The number of housing units on the lot may not be changed as part of the reconstruction project, but the number of rooms per unit may change. Reconstruction also includes replacing an existing substandard unit of manufactured housing with a new or standard unit of manufactured housing. Recapture provision: The provision where a City may choose to recapture all or a portion of housing subsidy assistance provided to a person or family purchasing a home through the HUD assisted program. Slum and Blight: Buildings whose condition meets the definition of fair or poor under the rating criteria. Underwriting: Sign and accept liability under and insurance policy thus guaranteeing payment in case of loss or damage occurs. U.S. Department of Housing and Urban Development (HUD): The Federal agency responsible for national policy and programs that address America's housing needs that improve and develop the Nation's communities, and enforce fair housing laws. HUD's business is helping create a decent home and suitable living environment for all Americans, and it has given America's cities a strong national voice at the Cabinet level. Verv-Low-Income Families: Families whose annual incomes do not exceed 50 percent of the median income for the area (adjusted for family size). Written rehabilitation standards: A written set of guidelines and requirements describing the method and materials to be used when performing rehabilitation of a housing unit. 'Cir 50 Revised June 2019 P.R. 20911