HomeMy WebLinkAboutPR 14876: HOUSING REHABILITATION PROGRAM GUIDELINE REVISIONSMemo
To: Steve Fibgibbons, City Manager
From: Col%en Russel% Director of Planning and Grants Management
Date: September 3, 2008
Re: P.R. 14876 -Revisions to Hou.~sing Rehabilitation Program Guidelines
RECOMMENDATION:
I recommend City Council adopt Proposed Resolution 14876 authorizing revisions t:o the City
of Port Arthur's Housing Assistance Rehabilitation and Reconstruction Program Guidelines.
BACKGROUND:
The City Council by authorization of Resolution Number 08-119 has obligated the City to
provide owner-occupied rehabilitation assistancE~ to qualified homeowners of the city.
Community Development Block Grant and HOME= funds have been allocated to provide
Emergency, Minor, Full Rehabilitation and Reconstruction activities.
Due to the rising costs of general construction material, windstorm inspections and additional
insurance requirements, (Performance and Payment Bonds when applicable), and iin an effort
to more effectively utilize the Housing Programs, it has been deemed necessary to revise the
Housing Assistance Rehabilitation and Reconstruction Program Guidelines.
The following summarizes revisions in the Housing Assistance Rehabilitation and
Reconstruction Program Guidelines to be utilized on a case-by-case basis, as recommended
by Melodee Humbert, HUD Rehabilitation Specialist:
REHABILITATION/RECON;STRUCTION ACTIVITIES
^ Increase limit for a full rehabilitation from $35,000 with a $2,000 floating cap; to
$50,000, with a $3,000 floating cap.
^ Increase limit for reconstruction from $55,000 with a $2,000 floating cap; (fee;s for
demolition/site clearance & prep included), to $70,000, with a $3,000 floating cap,
(fees for demolition/site clearance & prep included), for atwo-bedroom unit:; shall
include the cost for athree-bedroom unit of $75,000, with a $3,000 floating cap,
(fees for demolition/site clearance & prep included); shall include the cost for afour-
bedroom unit of $93,000, with a $3,000 floating cap, (fees for demolition/site
clearance & prep included).
BUDGETARY/FISCAL EFFECT:
No effect
STAFFING/EMPLOYEE EFFECT:
No effect
SUMMARY:
I recommend the approval of Proposed Resolution 14876 authorizing revisions to the City of
Port Arthur's Housing Assistance Rehabilitation Program Guidelines. These revisions will
enable the Housing Assistance Staff to better utlilize available funds and stabilize the City's
deteriorating owner-occupied housing stock.
P. R. 14876
9/2/2008--Housing/CR
RESOLUTION NUME3ER
A RESOLUTION AUTHORIZING REVISIONS TO THE CITY'S
HOUSING ASSISTANCE REHABILITATION AND RECONSTRUCTICIN
PROGRAM GUIDELINES.
WHEREAS, pursuant to the Housing and Urban Development Act of 1974 the
Housing and Urban Development awards annual Community Development Block iSrant and
HOME funds to the City of Port Arthur for the primary benefit of low and moderate income
persons; and,
WHEREAS, the City Council, by it:s adoption of Resolution Number 08-119,
(authorizing submission of the 2008 Action Plain) the City has obligated itself to pirovide
owner occupied rehabilitation and reconstruction assistance to low and moderate income
persons/families; and,
WHEREAS, it is now deemed nea°ssary to revise the previous Emergency,
Minor, Full Rehabilitation and Reconstruction Program guidelines; and,
WHEREAS, the revisions are attached hereto as Exhibit'~A"; and,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR:
THAT the new guidelines attached hereto as Exhibit °A"are approvc~d; and,
THAT the City Manager is hereby authorized to implement the new
guidelines that are attached hereto; and,
THAT a copy of the caption of this Resolution be spread upon the minutes of
the City Council.
READ, ADOPTED AND APPROVEC) this day of
A. D., 2008 at a Regular Meeting of the City Council of the City
of Port Arthur, Texas by the following vote: AYES: MAYOR
COUNCILMEMBERS _
NOES:
MAYOR
ATTEST:
CITY SECRETARY
APPROVED FOR FORM:
~~
CITY ATTORN ~ D,N ~0~-{r11~{,~ ~F~
APPROVED FOR ADMINISTRATION:
CITY MANAGER
COLLEEN RUS
DIRECTOR OF
APPROVED FOR AVAILABILITY 01=
FUNDS:
DIRECTOR OF FINANCE
EXHIBIT "A"
CITY OF PORT ARTHUR
~'~'-' ' r
,~t
HOUSING ASSISTANCE PROGRAMS
OWNER OCCUPIED HOUSING REHABILITATION ~&
RECONSTRUCTION ACTIVITIES
"REBUILDING, COMMUNITIES BLOCK BY BLOCk"'
1 Revised September 2008
TABLE OF CONTENTS
I. PURPOSE OF THE PROGRAM .................................................................. 4
II. DESIGNATED AUTHORITY ..................................................................... 5
III. ELIGIBILITY REQUIREMENTS FOR FINANCIAL ASSISTANCE/
SELECTION PROCEDURES ............................................................... 7
IV. ALLOWED PROGRAM EXPENSES .......................................................... 9
V. FORMS OF ASSISTANCE AND MAXIMUM ASSISTANCE AMOUNTS....... 10
VI. EMERGENCY AND MINOR HOME REPAIR I'ROGRAMS ......................... 12
VII. FULL REHABILITATION-BELOW MARKET LOAN/NO INTEREST
DEFERRED LOAN PROGRAM ........................................................... 15
VIII. HOUSING RECONSTRUCTION PROGRAM ......................................... 17
IX. FEASIBILITY OF REHABILITATION ...................................................... 21
X. OWNER/CITY AGREEMENT ................................................................ 21
XI. SELECTION OF CONTRACTORS ....................................................... 22
XII. CONTRACTORS QUALIFICATIONS .................................................... 24
XIII. CONTRACTING ................................................................................... 25
2 Revised September 2008
XIV. INSPECTION OF REHABILITATION WORK ....................................... 26
XV. FORMS ................................................................................................ 27
XVI. CONFLICT OF INTEREST .................................................................. 27
GENERAL PROPERTY IMPROVEMENTS .................................................... 29
DELINQUENCY GUIDELINES .................................................................... 30
DEFAULT GUIDELINES ............................................................................. 31
GRIEVANCE PROCEDURES ....................................................................... 32
3 Revised September 2008
CITY OF PORT ARTHUR
HOUSING REHABILITATION ASSISTANCE PROGRAM
FOR SINGLE FAMILY/OWNER OCCUPIED STRUCTURES
FUNDING SOURCES: COMMUNITY DEVELOPMENT BLOCK GRANT
AND HOME PROGRAMS
I. PURPOSE OF THE PROGRAM:
A. The City of Port Arthur, Texas acting by and through the Housing
Assistance Division will provide i-inancial and technical assistance to low-
income homeowners residing in the City of Port Arthur.
B. The purpose of the program is to assist low-income property owrners in
maintaining their homes, eliminate housing code violations and upgrade
neighborhoods. Through this program the City will help to provide decent,
safe and sanitary housing for residents and promote a viable housiing
stock for the future. Improvements made through this program will assist:
in bringing existing substandard units into compliance with City of Port
Arthur Housing Code, U. S. Department of Housing and Urban
Development Housing Quality Sttandards and/or locally adopted
rehabilitation standards. The only exceptions not meeting all standards
will be in the case of emergency assistance repairs funded with CDBG
funds. When CDBG funds provicles Emergency Assistance improvements
to alleviate immediate threats to the health and safety of the applicants,
the entire structure needs not to be brought into compliance with ,all
Federal, State and Local Building Codes. While threats to health and
safety caused by conditions in structures will be alleviated by the
4 Revised September 2008
GRIEVANCE PROCEDURE
City of Port Arthur Housing Assistance Programs
Should any applicant or participant of services from the Housing Assistance Division
wish to file a grievance against the City of Port Arthur pertaining to services received or
applied for, they may do so by the following procedure:
1) The person(s) filing the grievance may either verbally or in writing reque:>t an
appointment with the Housing Programs Administrator 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 Housing Programs Administrator not be satisfactory
to the person(s) bringing the complaint, an apppeal may be made directly to the Director
of Planning. At this stage of the resolution process, the request for appeal and 1the
complaint itself should 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 Planning has option of
meeting with the person(s) involved before rE~aching a decision. A response to i:he
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 Directorr of Planning not be satisfactory to the
person(s) bringing the complaint, an appeal may be made directly to the City IManager
requesting review of the decision. The request for appeal and review should be in
writing. A response to the complaint should be made within twenty (20) working days
from receipt of the request for appeal to the City Manager.
The following list identifies the names, acldresses, and telephone numbers of the
persons to contact to file a grievance:
Beverly A. Freeman
Housing Programs Administrator
Room 203
444 4th Street
Port Arthur, Texas 77640
(409)983-8259
Colleen Russell, Director of Planning
Ron Burton, Assist. Director of Planning
Room 337
444 4th Street
Port Arthur, Texas 77640
(409) 983-8135
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 Assistance Programs of the City of Port Arthur.
Applicant
Date Co-applicant
Date
32 Revised Septeinber2008
emergency assistance whenever possible; the program's primary focus will
be to make repairs and improvements to houses which, followina
rehabilitation, will contribute to 'the long term, structurally sound housing
stock of the city of Port Arthur rather than to assist houses which will
continue to be substandard following the infusion of program funds.
C. 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). 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.
II. DESIGNATED AUTHORITY
A. Administrative authority for implementation of the program will rest ire the
office of the Housing Assistance Programs Administrator. This office will
serve as the approving office for rehabilitation program assistance, will
attest to this approval on rehabilitation contracts, and will authorize any
required change orders to the contract, not to exceed 25%. Final approval
for Emergency Assistance will also rest with this office.
B. The office of the Housing Assistance Program Administrator will be
responsible for final approval of applicant eligibility, designation as, eligible
for emergency assistance, confirmation of eligibility of work elements
proposed to be undertaken, and approval of the qualified contractor.
5 Revised September 2008
C. The office of the Housing Programs; Administrator will notify the homeowner
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, apre-rehabilitation meeting will be held at the rehabilitation
site. In attendance, shall be the city's Housing Inspector, the homE:owner
and the selected contractor. At 1:his time, each item of the work write-up
will be reviewed.
D. The Housing Assistance Programs ~4dministrator or designated staff shall be
responsible for carrying out the following activities.
1. Processing Hof applicants for assistance
2. Recommending applicant for program assistance
3. Identifying property deficiencies
4. Preparing property evaluations
5. Work write-ups and cost estimates
6. Assisting owners in soliciting of contractors
7. Preparing and awarding bid documents including but
not limited to developing plans and specifications
8. Implementing and maintaining construction
specification manual
9. Conducting pre-bid conferences and bid openings
10. Preparing contract documents and any other
required foirms
Revised September 2008
11. Conducting meetings to explain contract documents and
procedures to be followed
12. Issuing Notice to Proceed following request by homeowner
13. Inspecting work for compliance with contract for
certifications needed for progress and final payments
14. Authorizing of payment to contractor following City
inspection and horeowner approval
15. Initiating change orders as required and
16. Maintaining program records as required by HUD and public
relations efforts as; needed to promote the program.
III. ELIGIBILITY REQUIREMENTS f=OR FINANCIAL ASSISTANCE/SELE:CTION
PROCEDURES
A. The applicant must be are individual or family who owns the
property in "fee-simple" and occupies it as his/her/their principal
residential unit.
B. Funds are intended to serve low and moderate-income residents
who have no other me<~ns of financing needed repairs and
improvements. To qualii'y for assistance, the income of thE~
applicant cannot exceed 80% of the area median family income,
adjusted for family size as published annually by HUD. On a case-
by-case basis, extenuating circumstances, depending on the
applicant's financial ability, a 100% deferment and 100% flexibility
7 Revised September 2008
will be implemented after verification and proper documentation is
provided. All income by ;any person who resides in the structure
will be counted towards total household income.
C. Housing Assistance will be considered on a first come, first serve
basis. Housing Assistance will be provided on a one-time b<~sis.
The homeowner will be responsible for any future maintenance and
repair.
D. The income limits are adjusted and published by the U.S.
Department of Housing &. Urban Development (HUD) annually &
will be use to qualify appllicants requesting Housing Assistance.
Since January 2008, these limits are as follows*:
Household Size Very Low Income
<50% Median
Income Low Inconne
<80% Median
Income
1 :18,000 $28,750
2 ;$20,550 $32,900
3 ;$23,150 $37,000
4 '.$25,700 $41,100
5 $27,750 $44,400
6 $29,800 $47,700
7 $31,850 $50,950
8 $33,900 $54,250
* These guidelines change annually & will change every year.
g Revised September 2008
E. Applicants will be selected by date of application from the applicant listing.
F. Proof of good credit. To meet this requirement, the Housing Assistance
Division will request a credit report.
IV. ALLOWED PROGRAM EXPENSES
A. Funds will be used primarily to finance repairs or replacements of
principal fixtures and components needed to bring the structure
into substantial compliance with City codes, HUD standards and
locally adopted rehabilitattion standards, to eliminate conditions
detrimental to health and safety of occupants, as well as to provide
for the more efficient use; of energy in structures where possible.
General property improvE~ments designed to improve the overall
living environment may also be allowed to a limited extent under
the program.
B. A Property Rehabilitation Standard's Manual for the City of Port
Arthur based upon local housing code requirements, HUD Section 8
Housing Quality Standardls, and locally adopted rehabilitation
standards will be maintaiined. This manual will serve as a basis on
which City staff will makes decisions as to eligibility of specific items
for funding under the program and will be used to ensure fairness
and consistency in developing work write-ups and cost estirnates
for individual properties. Only items considered as eligible
g Revised September 2008
rehabilitation expenses by HUD will be included in the manual. This
will be used in conjunction with the Contractor's Performance
Manual for the program, which serves as the source book o1F
specifications for individual work elements in projects. This lincludes
information as to the minimum acceptable grades of fixtures and
materials to be used, installation procedures, etc.
V. FORMS OF ASSISTANCE AND MAXIMUM ASSISTANCE AMOUNTS
A. The major form of assistance will be to provide eligible homeowners
with either a no interest deferred payment forgivable loan and/or
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 Codes and Section 8 Housing Quality
Standards, whichever is rnore stringent, for energy improvemments
and general property improvements as possible within program
limits. The loan shall not exceed $50,000, unless deemed necessary
by the Housing Programs Administrator. Such exceptions, ins
extenuating conditions will be justified on a case-by-case basis and
will be limited to a $3,00() floating cap. At the time of loan award, a
lien will be placed upon the structure for applicable periods of
affordability. In the case of deferred forgivable loans, if the house
is sold or transferred before the lien period expires, the homeowner
will receive credit for eveiry month spent in the house. The credit is
10 Revised September 2008
subtracted from the total note amount that is repaid to the City and
designated for other eligible housing activities; the option o1F
transferring ownership to an eligible family member is avail<~ble if
the family member's income is verified at 30% or below of t:he
median family income for the remainder of the affordability period,.
In the event a eligible farnily member's income is verified ar~d is
between 31% to 80% of the median family income, the deferred
loan becomes payable in full, or, based on the loan schedule
established based on gross income, loan repayments will bey
required.
B. Minimum Lien period will be based upon the following HOME Affordability
Periods:
CDBG or HOME
Investment per Unit Length of Lien
Period
$2,000 -$5,000 No lien filed
$5,001 - $14,999 5 years
$15,000 - $40,000 10 years
$40,001 & above 15 years
C. In the event that $50,000 is not sufficient to bring the entire property into
compliance with Federal, State and Local codes and the locally adopted
Property Standards, the applicant may be considered for the CDBG funded
11 Revised September 2008
Minor Home Repair and Emergency Assistance Program or the Horne
Reconstruction Program. Under the CDBG funded Minor Home Repair
Assistance Programs a maximunn loan of $10,000 is allowed to corirect
single or minor deficiencies, without bringing unit fully up to code.
Immediate dangers to health and safety qualify for Emergency Assistance
Program assistance not to exceE~d $5,000. No lien will be placed.
VI. EMERGENCY AND MINOR HOME: REPAIR PROGRAMS
Emergency and Minor Home Repair Assistance Programs will be provided
to address a limited number of deficiencies, without bringing unit to full
compliance as to alleviate issues of health and safety such as:
i. Water leaks
ii. unsafe plumbing conditions
iii. unsafe electrical hazards
iv. or alternatively repairs necessary to secure a structure from
further exposure and degradation caused by such things as
exposure to the elements.
Such repairs will not be designed to bring an entire structure into
conformance with any standard or code except to address and alleviate
the immediate threat to the health and safety of a household.
A. Emergency Assistance Program
1. Emergency Assistance to eliminate specific hazards
to health, sanitation and safety of low-income persons
12 Revised September 2008
will be provided up to $5,000, unless otherwise
deemed necessary by Housing Programs
Administrator. In extenuating circumstances, a
floating cap of $1,500 is allowed. Assistance will be
provided in the form of a grant. Alien will not: be
filed on the property, if repairs do not exceed $5,000.
2. 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.
3. The Housing Programs Administrator or 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.
4. Applicants for assistance under the Emergency
Program must meet the income eligibility
requirements of the regular Rehabilitation and
Reconstruction Program. The Housing Prograns
Administrator will have the authority to waive prior
13 Revised Septernber 2008
verification of eligibility in cases where an immediate
danger to health, safety or sanitation situation exists.
C. MINOR HOME REPAIR PROGRAM
1. Minor HomE~ Repair Assistance will be provided) up to
$10,000 (arnount of assistance to be determined by
Housing Administrator) based upon condition of
structure. In extenuating circumstances, a floating
cap of 3,00() is allowed. Assistance will be provided in
the form of a grant and/or loan based on amount of
assistance as identified in the Loan Schedule. ,A lien
will not be filed on the property, if repairs do not
exceed $5,(100
2. The Housing Programs Administrator 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 oin a
case-by-case basis.
3. Applicants for assistance under the Minor Horr~e
Repair Program must meet the income eligibility
requirements of the Rehabilitation & Reconstruction
Program. The Housing Programs Administratorr will
have the authority to waive prior verification oaf
14 Revised September 2008
eligibility in cases where an immediate danger to
health, safety or sanitation exists.
VII. FULL REHABILITATION BELOW MARKET LOAN/NO INTEREST
DEFERRED LOAN PROGRAM
The Below Market Loan/No Interest Deferred Loan Programs is an
outgrowth of the previous Grant and Deferred Payment Forgivable Loan
Programs. The program authorizes loans to eligible borrowers whose
repayments together with interest from a "Revolving Loan Fund" from which
other Below Market Loan/No Interest Deferred Loans will be made.
The program is in response to the iincreasing need to recapture federal funds.
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.
Program Structure
Under this program, each eligible and approved applicant will
receive a loan and/or no interest-dE~ferred loan for home rehabilitation using
Community Development Block Grant and HOME Program funds.
The City will contract with a local lending institute to service the
loan. The loan will be 3% interest bearing payment note. There will be a
$4.00 per month service charge to each loan recipient.
The loans will have scheduled payments. They are payment. loans
that will be collected according to a monthly amortization schedule based on
15 Revised September 2008
flexible terms. If the property is sold or transferred before the loan is Fully
paid, the unamortized portion of the loan will be due and payable
immediately.
Program Features:
1. Maximum loan amount: $50,000
2. Minimum loan amount: $2,000
3. Effective Interest Rate: 3%
4. Term: Flexible (15 year maximum)
5. Maximum income limit is 80% of the Median income adjusted for family
size as described by HUD. The income guidelines will be adjusted
annually.
6. Applicants will qualify for an Below Market Rate/No Interest Deferred
Payment (BMR/NIDP) Loan according to the following Loan Schedule
based on gross income:
Of Median Income % No Interest Deferred %Below Marrket
P~vment
0-30% 100% 0
31-40% 60% 40%
41-50% 50% 50%
51-60% 40% 60%
61-70% 30% 70%
71-80% 20% 80%
Underwriting
1. Housing expense ratio/total debt ratio. The maximum housing Expense
ratio is 30%. The total debt ratio cannot exceed 45%.
2. Credit analysis.
3. Income limits.
16 Revised Septerhber 2008
4. Complete Homeowner's Certification Course.
VIII. HOUSING RECONSTRUCTION PROGRAP~1
The Housing Reconstruction Program will provide for the voluntary demolition
and reconstruction of dilapidated stiructures. The city must certify that the
structure is infeasible for rehabilitatlion to qualify.
A. The Housing Assistance Program staff will be responsible for approval of
applicant eligibility for the program. This will be based upon the City's list
of houses that have been determined not to be feasible for rehabillitation
under the existing rehabilitation program.
B. The Housing Assistance Program staff will be responsible for processing
applicants, determining feasibility of rehabilitation, notifying applicant of
eligibility and rehousing options, preparing rehousing agreements,
assisting applicant in contractor selection process, inspecting new
construction, initiating final inspections for certificates of occupancy and
maintaining records as required by HUD.
C. Implementation Process
1. City currently maintains a list of applicants for housing
Rehabilitation and Reconstruction Program assistance
where a determination has been made that the
structure is not feasible to rehabilitate to minimum
standards under the City's Housing Rehabilitation and
Reconstruction Program.
17 Revised September 2008
2. Applicant is evaluated for reconstruction assistance.
Staff processes applicant under the same guidelines
as the Rehabilitation and Reconstruction Program.
The assistance will be in the form of a combination
Below Market Rate Loan and No Interest Defeirred
Loan as identified in the Loan Schedule.
3. The amount: of assistance for a two bedroom unit
shall not exceed $70,000, with a $3,000 floating cap,
as determined necessary on a case by case basis,
(fees for demolition, site clearance and preparation
included, with an exception given for homes in the
high flood plain requiring elevation certification;
additional costs will be allow on a case by cast: basis
for elevations based on the elevation survey a;s
determined by the a professional Survey Company).
4. The amount of assistance for a three bedroom unit
shall not exceed $75,000, with a 3,000-floating cap,
as determined necessary on a case-by-case basis,
(fees for demolition, site clearance and preparation
included, wlith an exception given for homes in the
high flood plain requiring elevation certification;
additional costs will be allow on a case by casE~ basis
1$ Revised September 2008
for elevations based on the elevation survey as
determined by the a professional Survey Company).
5. The amount: of assistance for a four bedroom unit
shall not exceed $93,000, with a $4,000 floating cap,
as determined on a case-by-case basis, accorcling to
which is appropriate for the family size, (fees for
demolition, site clearance and site preparation are
included, with an exception given for homes irr the
high flood plain requiring elevation certification;
additional costs will be allow on a case-by-case basis
for elevations based on the elevation survey a;s
determined by the a professional Survey Company).
6. Feasibility determination will be made following a
detailed inspection of the property by Housing Staff.
This inspection includes completing a list of
deficiencies that must be corrected in order to bring
the structure into compliance with Federal, State and
Local Codes and Locally Adopted Property Staindards.
Feasibility oaf rehabilitating structures under
established program limits will be determined by an
assessment; of the estimated cost to correct all code
1 g Revised September 2008
violations or' to remedy immediate threats to health
and safety.
7. The Housing Staff will provide assistance in soliciting
bids and contractor contractual compliance.
D. REHOUSING AGREEMENT
Each applicant will sign a Rehousing 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, <~grees
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 homeowners
responsibility.
E. Housing Assistance Staff will prc-vide technical assistance to homeowners.
This assistance will include expl<~ining the program and program
procedures used to process applicants request for assistance and assuring
applicants understanding program requirements, serving as a
representative of the homeowner when requested and dealing with the
construction contractor. This technical assistance may include refE~rral of
homeowner to social service agencies, etc., as appropriate.
2Q Revised September 2008
IX. FEASIBILITY OF REHABILITATION
In addition to determining eligibilit`~ of the homeowner, 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. 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 Home Reconstruction Program.
X. OWNER/CITY AGREEMENT
An Owner/City Agreement between the homeowner 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 Housing Administrator will sign this agreement on behalf of
the City.
21 Revised September 2008
XI. SELECTION OF CONTRACTORS (ALL PROGRAMS)
A. The City of Port Arthur will participate as an objective third parity to
the contractor selection process. The City acts as an oversight or
administrative agency only.
B. The owner shall assume the primary responsibility of obtaining a
contractor to complete the rehabilitation work. Bids for projjects
may be solicited and awarded using any of the following methods.
1. Owners may request that bids be formally solicited,
by advertising the project in the newspaper. Sealed
bids will be required and the City Housing Programs
Administrator will conduct a full bid opening process.
No bid award will be made at this time. Prior 'to the
award of any bid, City staff shall review all bids for
completeness, accuracy and cost reasonableness.
2. The owner, from contractors on the City's approved
Contractor list, may solicit bids.
3. Owner may submit a bid from any contractor of their
choosing (such contractors must apply and meet
City's qualifications for contractors). If the chosen
contractor cannot meet the City Approved Contract
standards, the owner would have to obtain another
22 Revised September 2008
contractor or select an alternate, if more than one bid
was obtained.
Under option 1, the bid process would be normally advertised and the
contract would be awarded directly to the lowest responsible bidder without
further negotiations, if bid meets cost reasonableness parameters (10-1 S%
higher or lower than staff estimate).
Under options 2 and 3, the owners wou/d be required to submit to the
City the bid they wish to accept. The City will then review the bid for
completeness and cost-reasonableness: If the bid amount is within the
established cost-reasonableness parameters, as determined by the City (within
10% above or be%w the staff cost estimate) the bid is considered to be cost
reasonable and can be awarded.
If the bid se%cted falls outside of the above parameters, under options 2
and 3, the owner and the contractor, with assistance from the City's staff,; would
meet to review, and discuss the individual line-item amounts If the discussions
over the excess cost are not resolved, the owner wou/d have two options: (1)
reject the bid and obtain another or select an a/tered bid or (2) pay the
difference between the final City staff cost-estimate and the amount of the
se%cted contractors bid.
This process places the majority of the responsibility for rehabilitation
directly on the owners as they become actively involved in the contractor
se%ction process Corollary benefits to this process are that there shoula~ be
23 Revised Septerhber 2008
significant improvements in the contrac:~ors performance and an expansion of
the City's base of eligible contractors In addition, by allowing the owner to
assume his/her ownership responsibilities in this process, they realize that they
have both input and fol%w-up obligations for the work being done in their
homes This process can also significantly reduce the number of comp/amts
received. As an indirect observer to the contract, the City's liability under this
system is generally reduced.
C. A contract will not be awarded to the low bidder if that contractor
has a maximum of three (3) incomplete rehabilitation jobs apt the
time of the bid opening or if it has been determined that thE~
contractor should be rejected; i.e., no insurance or failure to
perform.
D. 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.
XII. 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 programs Administrator or designated
staff member will be responsible for making homeowners aware of
24 Revised September 2008
this guarantee and will assist in enforcing this guarantee should
problems arise.
XIII. CONTRACTING
A. Form of Contract -Rehabilitation work will be undertaken through
a written contract between a licensed contractor and the
homeowner. Housing Assistance staff will prepare the contract for
signature by the contractor and the homeowner. 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 Housing Programs Administrator 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 bye
accomplished under the contract and a copy of the Owner-C;ity
Agreement.
B. Change Order Procedure -Change orders may be approved to
make changes in scope of work or to allow for cost
increase/decrease or no cost change required to pay the cost of
repair and/or replacement of actual or incipient code violations
which were not observed or known at the time of the preparation
of the original contract.
25 Revised September 2008
C. Payment Procedure -Payments will be made following paynnent
schedules contained in the contract. These will generally bE~ after
completion of 50% and 100% of the work. Payments will be made
based upon the Housing Programs Administrator's or designated
staff's concurrence that work has been completed accordingi to
specifications in the contract.
XIV. INSPECTION OF REHABILITATION WORK
A. Housing Assistance staff will have the responsibility for makling
inspections on work being financed by the program. Staff ~nrill
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
Homeowner. Additionally, inspectors will make periodical on-site
inspections.
B. Upon adequate final inspection, the Housing Programs
Administrator or designated staff member 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 homeowner.
Following this, a Notice of Completion will be issued and a final
payment minus 10% retainage will be authorized. All of retainage
26 Revised September 2008
will be returned 30 days following Notice of Completion unless
problems have surfaced which need to be resolved. The Housing
Programs Administrator or designated staff member will re-inspect
the property 10 months after completion to see if any defects have
been identified so they can be corrected during the warranty
period.
C. Homeowners 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 10 working days to remedy the
concern. Any contractor unwilling to honor their warranty v~rill be
considered anon-responsible contractor and will be taken off the
approved contractor list; until such time that the concerns acre
addressed.
XV. FORMS
The city attorney prior to their use in operation the prograrri will
approve all forms used as part of the implementation of the
program and which constitute legal instruments, such as the
contracts and legal documents.
XVI. CONFLICT OF INTEREST
No member of the City Council and no other official, employee or
agent of the city government who exercise policy decision-rnaking
functions or responsibilities in connection with the planning and
27 Revised Septei~nber 2008
implementation of the Housing Assistance Program shall dirE~ctly 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.
2g Revised September 2008
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 homeowner 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 snot
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 homeowner 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.
29 Revised September 2008
DELINQUENCY GUIDELINES
Notices
10 Dav
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 Loan Service to
discuss any special considerations he/she might need to meet his/her payment
agreement.
30 Day
After a 30 days delinquent period, if contact or payment has not been made, a letter
will be sent to the Borrower. The Loan Services will also call the Borrower to discuss
repayment.
60 and 90 Dav
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 ~~0 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
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 NSI= charge
per check in the form of cash, money order or cashiers check.
Informal Payment Plan
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 ~-lan to
make weekly or bi-weekly payments until the account is current. If after two months
the Borrower cannot make his/her account current then he/she has the option oaf
requesting forbearance.
30 Revised September 2008
DEFAULT GUIDELINES
Forbearance
Special consideration for forbearance can be yiven 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 Loan Service and inform them verbally of the situation and provide
the following written information:
1.) A letter informing the Loan Service of the situation requiring special
consideration and;
2.) Substantiating evidence of the situation (medical bills, legal papers, etc.)
Housing Programs Administrator, Staff and Loan Services will review the requesl: for
Forbearance. The recommendation will then be presented to the City Manager 1~or final
approval.
Extended Repayment Agreement
An extended repayment agreement can be established to bring the Borrower out of
default/foreclosure. The Loan Service 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
be referred to Legal to begin foreclosure proceedings in accordance with the Texas
Property Code.
Summary
The goals of our programs are to provide decent, safe and sanitary housing and to
provide homeownership opportunities for low to moderate-income families and
individuals; not to repossess homes. Therefore, every effort possible will be m2ide to
work out an agreement to keep the homeowners in their homes up the 90-day default.
31. Revised September 2008
GRIEVANCE PROCEDURE
City of Port Arthur Housing Assistance Programs
Should any applicant or participant of services from the Housing Assistance Division
wish to file a grievance against the City of Part Arthur pertaining to services received or
applied for, they may do so by the following procedure:
1) The person(s) filing the grievance may either verbally or in writing request an
appointment with the Housing Programs Administrator 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 they
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 Housing Programs Administrator not be satisfactory
to the person(s) bringing the complaint, an appeal may be made directly to the Director
of Planning. At this stage of the resolution process, the request for appeal and the
complaint itself should 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 Planning has option o~F
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 Planning not be satisfactory to the
person(s) bringing the complaint, an appeal may be made directly to the City Manager
requesting review of the decision. The request for appeal and review should be in
writing. A response to the complaint should be made within twenty (20) working days
from receipt of the request for appeal to the City Manager.
The following list identifies the names, addresses, and telephone numbers of the
persons to contact to file a grievance:
Beverly A. Freeman
Housing Programs Administrator
Room 203
444 4th Street
Port Arthur, Texas 77640
(409) 983-8259
Colleen Russell, Director of Planning
Ron Burton, Assist. Director of Planning
Room 337
444 4th Street
Port Arthur, Texas 77640
(409)983-8135
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 Assistance Programs of the City of Port Arthur.
Applicant Date Co-applicant Date
32 Revised September 2008