HomeMy WebLinkAboutPR 18911: REVISIONS TO THE CITY'S OWNER OCCUPIED HOUSING ASSISTANCE REHABILITATIONS AND CONSTUCTION PROGRAM GUIDELINES INTEROFFICE MEMORANDUM
DEPARTMENT OF DEVELOPMENT SERVICES
DIVISION OF HOUSING AND NEIGHBORHOOD REVITALIZATION
Date: April 28, 2015
To: Brian McDougal, City Manager
From: Beverly Freeman, Acting Director of Housing and Neighborhood Revitalization
RE: P.R. No. 18911 Revisions to the Owner Occupied Housing Assistance Rehabilitation
and Reconstruction Program Guidelines.
Nature of Request:
The Housing Division recommends City Council adopt Proposed Resolution No. 18911
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 15-118 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 attached hereto in substantially the same form as Exhibit "A".
Recommendations:
The Housing Division recommends City Council adopt Proposed Resolution No. 18911
authorizing revisions to the City of Port Arthur's Owner Occupied Housing Assistance
Rehabilitation and Reconstruction Program Guidelines.
Budget Consideration:
N/A
P. R. 18911
4/27/15 BAF/DF
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 15-118
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 in substantially
the same form as Exhibit"A".
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., 2015 at a Regular Meeting of the City Council of the City
of Port Arthur, Texas by the following vote: AYES:
MAYOR
COUNCILMEMBERS
NOES:
MAYOR, DELORIS "BOBBIE" PRINCE
ATTEST:
SHERRI BELLARD,
CITY SECRETARY
APPROVED FOR FORM:
VALECIA TIZENO
CITY ATTORNEY
APPROVED FOR ADMINISTRATION:
BRIAN MCDOUGAL
CITY MANAGER
r / RQ Pjyr
BEVERLY FR:EMAN, ACTING DIRECTOR
OF HOUSINt & NEIGHBORHOOD REVITALIZATION
EXHIBIT "A"
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HOUSING ASSISTANCE PROGRAMS
OWNER OCCUPIED HOUSING REHABILITATION &
RECONSTRUCTION ACTIVITIES
"REBUILDING COMMUNITIES, ONE BLOCKA T A TIME”
TABLE OF CONTENTS
DEFINITIONS 4
SECTION 1. PURPOSE OF THE PROGRAM 9
SECTION 2. DESIGNATED AUTHORITY 10
SECTION 3. MARKET ANALYSIS 11
SECTION 4. METHOD OF APPLICATION 12
SECTION 4. ELIGIBILITY REQUIREMENTS FOR FINANCIAL ASSISTANCE/
SELECTION PROCEDURES 13
SECTION 5. ALLOWED PROGRAM EXPENSES 15
SECTION 6. FORMS OF ASSISTANCE AND MAXIMUM ASSISTANCE AMOUNTS 15
SECTION 7. EMERGENCY AND MINOR HOME REPAIR PROGRAMS 16
SECTION 8. MINOR HOME REPAIRS 17
SECTION 9. FULL REHABILITATION-BELOW MARKET LOAN/NO INTEREST
DERERRED LOAN PROGRAM 17
SECTION 10. PROGRAM STRUCTURE 19
SECTION 11. PROGRAM FEATURES 19
SECTION 12. UNDERWRITING 19
SECTION 13. HOUSING RECONSTRUCTION PROGRAM 19
SECTION 14. IMPLEMENTATION PROCESS 20
SECTION 15. REHOUSING AGREEMENT 21
SECTION 16. FEASIBILITY OF REHABILITATION 21
SECTION 17. OWNER/CITY AGREEMENT 22
SECTION 18. PROPERTY REQUIREMENT 22
SECTION 19. SELECTION OF CONTRACTORS (ALL PROGRAMS) 23
SECTION 20. CONTRACTOR QUALIFICATIONS 23
SECTION 21. CONTRACTING 23
SECTION 22. INSPECTION OF REHABILITATION WORK 24
SECTION 23. PAYMENT PROCEDURE 25
SECTION 24. PROGRAM SPECIFIC 26
SECTION 25. SECTION 3 REQUIREMENTS 30
SECTION 26. FORMS 34
SECTION 27. CONFLICT OF INTEREST 34
SECTION 28. GENERAL PROPERTY IMPROVEMENTS 34
SECTION 29. DELINQUENCY GUIDELINES 35
SECTION 30. DEFAULT GUIDELINES 36
SECTION 31. ENVIRONMENTAL CLEARANCE REQUIREMENTS & STANDARDS 37
SECTION 32. CIVIL RIGHTS 40
SECTION 33. LEAD BASE PAINT 41
SECTION 34. GRIEVANCE PROCEDURES 45
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 (i.e., applicant-ship or rental housing).
Age of housing: means the number of year-round housing units, as further defined in
section 102(a)(11) of the Act.
Affordable Housing: means Housing for which the occupant is paying no more than 30
percent of his or her income for gross housing costs, including utilities.
Annual Income: The HOME Program allows the use of one of three definitions of
annual income: Section 8 annual income; annual income as reported on the U.S.
Census long form; and adjusted gross income as defined for reporting on IRS Form
1040.
Affordability: 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 Final
Rule. Affordability requirements vary depending upon the nature of the HOME assisted
activity (i.e., applicant-ship or rental housing).
Annual Income: means 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: means items of ownership convertible into cash; total resources of a person or
business, as cash, notes and accounts receivable, securities, inventories, goodwill, fixtures,
machinery, or real estate (opposed to liabilities).
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. 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: means 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: means 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 : means a contractor is an entity paid with CDBG/HOME funds in return for a
specific service (e.g., construction). Contractors must be selected through a competitive
procurement process.
Deferred-payment loans: means the loan has a zero percent interest rate and does not
require you to make payments, but there is a affordability period associated with the
deferred payment loan.
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: means 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: means 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: means any assistance provided or otherwise made
available by the Department through any grant, loan, contract, or any other arrangement,
in the form of:
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: means applicants are served on a first-come, first-served
basis, after all required supporting documentation is provided. To ensure fairness, the date
and time the application is submitted will be stamped on the application by the person
receiving the application.
NO . . : .' -; . -; .;;;- : :: --- . ':- ' . :-- - -- :: - ----
according to the applicant's certification date.
Full-Time Student: means a person who is attending school or vocational training on a
full-time basis.
Grant: means a financial award given to a owner occupied housing participant that meets
the income limits of 80% or less. There is usually an affordability period associated with
length of the lien placed on the property.
HNRD: Housing and Neighborhood Revitalization Division.
Household: One or more persons occupying a housing unit.
Income Household/Family: A household/family having an income equal to or less than
the Section 8 Very Low Income limit (50% of the area median income) as 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
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.
Loan: means a mortgage loan made through a Program and in accordance with the
provisions of this Guide
Low- and moderate-income household: means a household having an income equal
to or less than the Section 8 low-income limit established by HUD.
Low- and moderate-income person means 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
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.
Ownership: A family or individual owns the property if that family or person who has fee
simple title to the property
Principal Residence: means primary location that a person inhabits/resides and can
claim a homestead exemption.
Property Standards: means as with all HOME-assisted properties, 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: means 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) means the stage at which all necessary title
transfer requirements and construction work have been performed; the project
complies with all HOME requirements;
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: means this provision outlines the terms of recapture of PHA
subsidy to the purchaser. The PHA may choose to recapture the entire amount of direct
financing to the purchaser (generally in the form of a subordinate mortgage) or to forgive
the loan over time.
U.S. Department of Housing and Urban Development (HUD): means 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.
Very-Low-Income Families: means families whose annual incomes do not exceed 50
percent of the median income for the area (adjusted for family size).
Written Rehabilitation Standards: means all Pis must have written rehabilitation
standards describing the methods and materials to be used when performingrehabilitation.
All HOME-assisted rehabilitation projects must meet the PJ's written rehabilitation
standards.
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. 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 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.
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 HNRD under the direction of
the City Manager, or his/her designee.
B. The Director of Housing and Neighborhood Revitalization or his/her designee, under
the direction of the City Manager or his/his 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 Director of Housing & Neighborhood Revitalization, the Housing
Programs Administrator, 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
a. Identifying property deficiencies
2. Preparing property evaluations
3. Reviewing work write-ups and cost estimates
4. Preparing and submitting recommendations for awarding bid
documents including but not limited to developing plans and
specifications
5. Implementing and maintaining construction specification
manual
6. Implementing and maintaining a contractor's manual
7. Assisting with preparation of pre-bid conferences and bid
openings
8. Preparing contract documents and any other required forms
9. Conducting meetings to explain the contract documents and
procedures.
10.Inspecting work for compliance with contract for
certifications needed for progress and final payments
11.Authorizing of payment to contractor following City
inspection and applicant approval
12.Inspecting request for change orders, initiating written
change orders and preparing for City Council review and
approval as required and
13. 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.
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 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 Director of Housing and Neighborhood Revitalization, 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
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 Director of Housing and Neighborhood Revitalization and/or the Housing
Programs Administrator, 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 Director of
Housing and Neighborhood Revitalization and/or the Housing Programs Administrator
or his/her designee.
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 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"applicantship" 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 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
plain 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.
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 570,
income of 80% 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. All current and projected
income for all persons residing in the home will be included as part of the total
household income.
6:—On a case by case basis, when an extenuating circumstance has been
determined by the City of Port Arthur, (depending on the applicant's financial
ability), All applicants that qualify for the Owner Occupied
Rehabilitation/Reconstruction Program will be 100% deferred
6. 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.
As of April 2015, the income limits are as follows:
Household Size Very Low Income Low Income
<50% Median Income <80% Median Income
1 $20,000 $32,000
2 $22,850 $36,550
3 $25,700 $41,100
4 $28,550 $45,560
5 $30,850 $49,350
6 $33,150 $53,000
7 $35,450 $56,650
8 $37,700 $60,300
7. 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.
8. A credit report and a detailed financial and background check is required, to
determine the applicant's financial ability to participate in the Housing Assistance
Programs. If an applicant has an outstanding past due balance with a
Federal/State agency, the balance must be paid in full before the applicant can
be considered for the City of Port Arthur's Housing Program.
In the event an extenuating circumstance arises and/or is determined to exist,
the application is required to be reviewed by the City Manager and City Attorney
for a determination on the applicants request for assistance.
All applicants are required to obtain and maintain hazardous and windstorm
insurance and property taxes, as applicable, for the life of the unit.
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
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 a:
1. no interest deferred payment forgivable loan
27 an amortized below market rate loan
These no interest deferred 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 forgiveable loan for the
Rehabilitation assistance 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 x5,000
floating cap or up to a 10% contingency.
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 80% or below the Area
Median Family Income for the remainder of the affordability period.
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
In the event that $50,000 is not sufficient to bring the entire property into compliance with
Federal, State and local laws, the applicant may be considered for the Demolition and
Reconstruction Program.
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
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. An example
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.
Emergency Assistance to eliminate emanate threats/specific hazards to health, sanitation and
safety of low-income persons will be provided up to $5,000 and must have a minimum cost of
$750, 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.
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.
The Director of Housing & Neighborhood Revitalization and/or the Housing Programs
Administrator 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.
Applicants for assistance under the Emergency Program must meet the income eligibility
requirements of the regular Rehabilitation and Reconstruction Program. The Director of
Housing & Neighborhood Revitalization and/or the Housing Programs Administrator 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
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.
1. The Director of Housing & Neighborhood Revitalization and/or the Housing
Programs Administrator or his/her designee,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.
2. Applicants for assistance under the Minor Home Repair Program must meet
the income eligibility requirements of the Rehabilitation & Reconstruction
Program. The Director of Housing &Neighborhood Revitalization 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.
a) The program is in response to the increasing need to recapture federal funds.
b) 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.
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 11. 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.
The in house loans will be a 3% interest bearing payment note. Thcrc will be a $4.00 per
The loans will have scheduled payments. The payments will be collected according to a
monthly amortization schedule based on flexible terms. If thc property is sold or transferred
before thc loan is fully paid, the unamortized portion of the loan will be due and payable in
full immediately.
SECTION 12. PROGRAM FEATURES
A. Maximum loan amount:$50,000
B. Minimum loan amount: $750 (CDBG) $1000 (HOME)
C. Term: Flexible (15 year maximum)
D. 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.
• - - - , - - - e- - --- ..
Loan according to the Loan Schedule listed below and based on gross income.
•- :--- - - :- :. - , -- .a: • .- •••• I be required to make repayments as listed
below
SECTION 13.UNDERWRITING
A. The maximum housing expense ratio is 30%.
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.
SECTION 14. 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 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 assistanceform of a combination Below
Market Rate Loan and will be 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 $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 are not 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 fora three (3) bedroom unit shall not exceed $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 clearance and preparation are not 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.
E. The amount of assistance for a four (4) bedroom unit shall not exceed $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). 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/Contractor. 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 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 15. 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, 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 understand 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 16. 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 costs needed to substantially correct all code
violations and to remedy immediate threats to health and safety. Feasibility will be
based on 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 and
Reconstruction Program.
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 17. 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 18. 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 applicantship. The following will be
considered eligible forms of applicantship:
1. Warranty Deed
2. Fee simple Title
3. Contract for Deed is not eligible evidence of applicantship
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.
SECTION 19. 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. 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 20. 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 21. 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.
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 22. 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 Director of Housing &Neighborhood Revitalization,
Housing Programs Administrator 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 Director of Housing & Neighborhood Revitalization, Housing Programs
Administrator 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 taken off the approved
contractor list; until such time that the concerns are addressed.
D. The property will be inspected eleven (11) months after the completion of the project
and re-inspected every three (3) years, thereafter to assure the Participant is
maintaining the property as required during the affordability period 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, at the expense of the homeowner.
SECTION 23. 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 (45%) 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 (45%) 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 (5%) that is 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.
SECTION 24. 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 City will inspect the property eleven (11) months after completion of the
housing assistance and every three (3) 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.
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 and
affordability period 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 and Community Development Block
Grant 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:
J. 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 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;
K. 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.
f. 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 costs and all
attorneys' fees expended by the City in order to collect the amount owed to the City.
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.
g. 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:
1. 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.
2. 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").
a. In the implementation of the Applicantship Program, the Department will
comply and will require recipients to comply with the provisions of 24 CFR
92.217, Income targeting Applicantship and 24 CFR 92.254, Qualifications as
affordable housing.
SECTION 25. 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. All contractors/businesses seeking Section 3 preference must, before submitting
bids/proposals to the City of Port Arthur, complete certifications, as appropriate, as
acknowledgement of the Section 3 contracting and employment provisions required
by Section 3 Regulations.
C. The Section 3 Staff shall examine and consider a contractor's or vendor's potential
for success by providing employment and business opportunities to low-moderate
income residents prior to acting on any proposed award.
D. The Parties to this contract agree to comply with HUD's regulations in 24 CFR Part
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.
E. 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.
F. 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 the subcontractor has been found in
violation of the regulations in 24 CFR Part 135.
G. 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.
H. 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.
I. 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
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.
• Once this assessment is complete, the Housing & Neighborhood Revitalization
Director, Housing Programs Administrator 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.
• 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 26. 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 27. 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
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 28. 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 29. DELINQUENCY GUIDELINES
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:
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 Davison 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:
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 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 30. DEFAULT GUIDELINES
Extended Repayment Agreement:
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:
In the event the primary homeowner defaults on their loan agreement the file will be referred
to the City Manager and the Legal Department 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 applicantship 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 31. 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 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)).
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.
[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.
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 32. 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 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 33. 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
(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
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.
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 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 34. 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
Acting Director of Housing and Neighborhood Revitalization, Housing Programs Administrator,
he/she 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 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,
Acting Director of Housing & Neighborhood Revitalization
444 4th Street
Port Arthur, Texas 77640
(409) 983-8259
Ron Burton, Brian McDougal
Director of Development Services City Manager
444 4th Street 444 4th Street
Port Arthur, Texas 77640 Port Arthur, Texas 77640
(409) 983-8135 (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
Acknowledgement
Homeowners, potential homebuyers and/or tenants should receive a copy of the City of Port
Arthur's Housing & Neighborhood Revitalization Program Guidelines for the Owner Occupied
Housing Assistance Rehabilitation and Reconstruction Program and the Homeowners
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 570 & 92.
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