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HomeMy WebLinkAboutCC RES 07-53RESOLUTION NO. 07-53 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT APPROVING THE REVISED HOME IMPROVEMENT PROGRAM FOR VERY LOW, LOW AND MODERATE INCOME RESIDENTIAL HOMEOWNERS SUPERSEDING ALL PREVIOUS RESOLUTIONS APPROVING SAID PROGRAM NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. The City of Palm Desert (the "City"), in cooperation with the Palm Desert Redevelopment Agency, has established a residential rehabilitation loan and grant program known as the Home Improvement Program (the "Program") for very low, low and moderate income residential homeowners in the City. Section 2. The City wishes to modify the Program and its components to provide financial assistance to residential homeowners in connection with the correction of code violations, health and safety hazards, and improvements that are intended to reduce the consumption of natural resources. Section 3. The City has a limited budget for the Program. As a result, the Program is based on a first -come -first -served basis, except that urgent needs and improvements related to health and safety hazards will have first priority. Section 4. The City Council wishes to approve the modified Guidelines, Funding Components and Procedures for the Program outlined in Exhibit A attached hereto and incorporated herein by this reference. Section 5. The City Manager may take any action which he believes is necessary or desirable to implement this Resolution so long as such action is not inconsistent with the intent hereof. PASSED, APPROVED AND ADOPTED by the City Council of the City of Palm Desert, this 12th day of July 2007 by the following vote, to wit: AYES: BENSON, FERGUSON, FINERTY, SPIEGEL and KELLY NOES: NONE ABSENT: NONE ABSTAIN: NONE 42 i D S. KELLY, MAYOR ATTEST. RACI1ELLE D. Kt\SSEN, 2`ITY CLERK CITY OF PALM DESERT, CALIFORNIA W:\Agenda Items\2007-July 12\Approve Res appvng Revised HIP\CC Reso.doc [This page has intentionally been left blank.] CITY OF PALM DESERT — REDEVELOPMENT AGENCY HOME IMPROVEMENT PROGRAM (HIP) ���r •1:41~r�rf114)4. As* ,\ AL o 73-510 Fred Waring Drive Palm Desert, CA 92260 Phone: (760) 346-0611 Fax: (760) 341-6372 www.cityofpalmdesert.org Version 1.0 Exhibit A to Resolution Nos. 07-53 and 541 Approved 7/12/07 Finalized by Executive Director 10-8-07 Guidelines Funding Components Procedures Home Improvement Program — Guidelines, Funding Components and Procedures Effective July 12, 2007 Finalized Oct. 8, 2007 Table of Contents I. Guidelines 1. Program Overview 1 2. Definitions and Interpretations 2-3 3. Eligible Homeowners 4 4. Eligible Properties 5-6 5. Eligible Improvements 7 6. Eligible Contractors 7 7. Participation Priorities 8 8. Terms and Conditions 8-9 9. Loan Management 9-10 10. Administrative Fees 10 11. Consultants 11 II. Funding Components Component No. 1 — Emergency Grant (EG) 12 Component No. 2 — Rehabilitation Grant (RG) 13 Component No. 3 — Matching Fund (MF) 13 Component No. 4A — Rehabilitation (RL) — Low Income 14 Component No. 4B — Rehabilitation (RL) — Moderate Income 14 Component No. 4C — Deferred Loan (RL-D) 14-15 Component No. 5 — Drought Tolerant Landscape Retrofit (DTLR) 15 Component No. 6 — Make a Difference Volunteer (MADV) 15-16 Component No. 7 — Acquisition/Rehabilitation/Resale (ARR) 16 Component No. 8 — Lead and Asbestos Abatement Grant (LAAG) 17-18 Financial Hardship Exception 18 III. Procedures Step 1 - Application Process 19-20 Step 2 - Loan/Grant Approval or Denial 21 Step 3 - Loan Funding 21-22 Step 4 - Pre -Construction (Bids and Contracts) 22-24 Step 5 - Construction 24 Step 6 - Disbursement of Payments 24-25 Step 7 - Project Completion 25 Step 8 - Final Loan/Cost Verification Statements 25 Step 9 - Appeal and Dispute Resolution Process 25-26 Exhibits Exhibit A — Eligible Improvements 27 Exhibit B — Ineligible Improvements 28 Exhibit C — HUD Chart of Co. of Riverside Median Income Data 29 Exhibit D — HIP At -A -Glance 30-32 Home Improvement Program — Guidelines, Funding Components and Procedures Effective July 12, 2007 Finalized Oct. 8, 2007 HOME IMPROVEMENT PROGRAM Section I. Guidelines 1. PROGRAM OVERVIEW The Home Improvement Program ("HIP" or "Program") is a residential rehabilitation loan and grant program. The Program is designed to provide financial assistance to very low, low and moderate -income homeowners in the City of Palm Desert ("City") to correct existing code violations, health and safety hazards, and substandard conditions of the home. The objective of the Program is to assist the City's lower income residents maintain healthy, safe and attractive housing in the City. The funding sources for HP are Community Development Block Grant (CDBG) funds; 20% tax increment housing set -aside funds; and housing mitigation funds. The Palm Desert Redevelopment Agency ("Agency") is the administrator ("Administrator") of the HIP and has the authority to administer the Program, regardless of funding source. Financial assistance includes grants, low -interest and deferred loans. Loans are secured by a loan agreement, promissory note and deed of trust, and are subject to certain conditions which are recorded against assisted properties. Grants are secured by a grant agreement, promissory note and deed of trust that proportionately forgives the obligation to repay over the term of the grant, and are subject to certain conditions which are recorded against assisted properties. Program grants/loans are subject to the availability of Program funds and will be processed by priority noted in Section 1-7. The Agency may retain one or more consultants ("Program Consultant") to provide technical and professional consulting services in connection with the administration of the Program. In particular, the Program Consultant will assist eligible homeowners in assessing the scope of needed repairs, assisting the homeowner in obtaining bids or estimates, selecting and retaining contractors, coordinating and monitoring construction or repair work, arranging for inspections and overseeing required paperwork. All construction contracts are between the homeowner and contractor. Therefore, by signing the construction contract, the homeowner approves the construction contract and authorizes the work to proceed as stated in the construction contract in accordance with its terms. The City, Agency and Program Consultant are not parties to the construction contracts entered into for HIP improvement work and assume no liability whatsoever for any work performed or not performed by any contractor or other person or entity pursuant to the Program. To qualify for a HIP loan or grant, both the Participant and the property must satisfy eligibility criteria. Home Improvement Program — Guidelines, Funding Components and Procedures Effective July 12, 2007 Finalized Oct. 8, 2007 1 Home Improvement Program Section I Guidelines 2. DEFINITIONS AND INTERPRETATION Definitions:. Capitalized terms used herein shall have the following meanings unless the context in which they are used clearly requires otherwise. "Administrator" of the Program shall mean the Palm Desert Redevelopment Agency regardless of funding source. "Adjusted for Family Size" shall mean a household of one person in the case of a studio unit, two persons in the case of a one -bedroom unit, three persons in the case of a two -bedroom unit, four persons in the case of a three -bedroom unit, and five persons in the case of a four -bedroom unit. "Affordable Housing Cost" shall mean a housing cost which is calculated pursuant to California Health and Safety Code Section 50052.5, as amended from time to time, and for the purposes hereof, the term "housing cost" shall have the meaning ascribed to such term in Title 25 of the California Code of Regulations Section 6920, as such regulations may be amended from time to time, and the term "Gross Income" shall have the meaning ascribed to such term in Title 25 of the California Code of Regulations Section 6914, as such regulations may be amended from time to time. "Agency" shall mean the Palm Desert Redevelopment Agency. "AMI" shall mean the area median income for Riverside County as published by the United States Department of Housing and Urban Development, or if such agency shall cease to publish such an index, then any comparable index published by any other federal or state agency which is approved by the Agency. The AMI shall be adjusted for family size in accordance with the state regulations adopted pursuant to Califomia Health and Safety Code Section 50052.5. "Applicant" shall mean an owner of real property seeking financial assistance pursuant to the program for the purposes of improving their property. See also "Homeowner" and "Participant". "CDBG" shall mean Community Development Block Grant. "City" shall mean the City of Palm Desert. "City Manager' shall mean the City Manager for the City of Palm Desert. "County" shall mean the County of Riverside, California. "Executive Director" shall mean the Executive Director of the Palm Desert Redevelopment Agency. "Extremely Low Income Households" shall mean persons and families whose income does not exceed the qualifying limits for persons and families of very low income set forth in California Health and Safety Code Section 50106 and Title 25 of the Califomia Code of Regulations, Section 6910, as such statute and regulations may be amended from time to time. "Gross Income" shall have the meaning ascribed to such term in Title 25 of the California Code of Regulations Section 6914, as such regulations may be amended from time to time. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 2 Home Improvement Program Section I Guidelines "HCD" shall mean the Department of Housing and Community Development for the State of California. "HP" shall mean the Palm Desert Home Improvement Program. "Homeowner" shall mean the owner of real property. See also "Applicant" and "Participant". "Household Income" shall mean the household income of all Applicants, co -Applicants, persons holding title to the participating property, and all household occupants 18 years of age or older calculated in accordance with Title 25 of the California Code of Regulations Section 6914. "HUD" shall mean the Federal Department of Housing and Urban Development. "Low Income Households" shall mean persons and families whose income does not exceed the qualifying limits for lower income households set forth in California Health and Safety Code Section 50079.5 and Title 25 of the California Code of Regulations, Section 6910, as such statute and regulations may be amended from time to time. "Moderate Income Households" shall mean persons and families whose income does not exceed the qualifying limits for persons and families of moderate income set forth in California Health and Safety Code Section 50093 and Title 25 of the Califomia Code of Regulations, Section 6910, as such statute and regulations may be amended from time to time. "Owner" see "Homeowner". "Participant" shall mean a qualified applicant who agrees to participate in the Home Improvement Program. See also: "Applicant" and "Homeowner". "Program Consultant" shall mean the person or entity designated by the City Manager or Executive Director of the Redevelopment Agency to implement the program. "Qualified Person or Household" shall mean a person or persons whose Household Income and eligibility requirements are met as they pertain to the Program. "Redevelopment Lave" shall mean California Community Redevelopment Law. "Three -Year Period" shall mean the three-year period commencing on the date of the final disbursement of the most recent HIP assistance. "Total Assistance" shall mean the aggregate dollar amount of financial assistance from the City of Palm Desert, the Palm Desert Redevelopment Agency or its related entities. This includes down payment assistance, silent seconds and previous and projected HIP assistance. Total Assistance may not exceed $45,000. Exception: Down payment assistance under Component No. 7. "Very Low Income Households" shall mean persons and families whose income does not exceed the qualifying limits for persons and families of very low income set forth in California Health and Safety Code Section 50105 and Title 25 of the Califomia Code of Regulations, Section 6910, as such statute and regulations may be amended from time to time. Home Improvement Program -- Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 3 Home Improvement Program Section I Guidelines 3. ELIGIBLE HOMEOWNERS Homeowners who seek financial assistance pursuant to the HIP are referred to in these Guidelines as "Homeowner," "Applicant" and/or "Participant". ■ Title - Participants must have title to the property for which the request for funding of improvements is being made. ■ Owner -Occupancy - Participants must occupy the property as their sole and principal residence, except where occupancy would be detrimental due to unhealthy, unsafe or emergency circumstances. • Household Income — Gross household income may not exceed the AMI percentages in the specified funding component that the applicants applies for. • Credit Report Check - Participants must consent and submit to a credit report check to verify necessary identification and credit information. • Capacity - Participants must be of legal age and, by applying for the Program, have stated that they have the capacity to enter into binding contracts. • Conflicts - No employee of the City, Agency or related entity thereof, elected or appointed official, agent or consultant who exercises any policy, decision -making function or may receive an indirect gain in connection with the Program is eligible for HIP assistance. • False, Inadequate or Misleading Information -- The City/Agency maintains the right to deny Program assistance to any Applicant if false, misleading, inadequate or misrepresentative information is found in the application or other documentation made a part of the application process and used to determine eligibility. • Recipient of Previous HIP Assistance — For Applicants having received previous HIP assistance, three (3) years must have elapsed, as measured by the date of the final disbursement, except as otherwise outlined in the funding components. Previous recipient's Total Assistance may not exceed the value of funding component 4C, which is $45,000. • Outside Agency Funding — Applicants who are eligible to receive funding through another agency (i.e. county, state, federal), lender or insurance adjustment/settlement, etc., must exhaust those resources before being approved for HIP assistance; in most cases, the City/Agency will require priority recording position when Program documents are recorded in the Riverside County Recorder's Office. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 4 Home Improvement Program , Section I Guidelines 4. ELIGIBLE PROPERTIES • Location - The property must be located within the City of Palm Desert's city boundaries. • Focus Areas — The Agency may from time to time establish geographically defined Focus Areas within the City that may be eligible for priority or special assistance under the Program. • Type - The property must be a single-family detached home, mobile home or a duplex. Duplexes must be owned either as a separate parcel with a common area or owned in its entirety, and the owner must occupy at least a 50% portion of the habitable dwelling on the property as a primary and sole residence. The improvements funded by the Program shall be only to the property occupied by a qualifying person. Exception: mobilehomes are not eligible for the Deferred Loan (DL) but are eligible for all other funding components. • Condition - The condition of the property must be such that it is in need of one or more of the following repairs: a) Correct existing nonconforming local and/or state code requirements b) Correct existing local and/or state code violations c) Correct existing nonconforming development standards d) Protect structural integrity of the property e) Promote neighborhood safety f) Correct an existing condition that creates a life safety issue g) Correct an existing health and safety condition h) Improve energy efficiency i) Refurbish deteriorating exterior conditions j) Aid in the mobility of the physically disabled and/or the elderly k) Improve efficiency of water usage, drainage or sewage transfer • Prooertv Age Conditions — Properties built prior to certain dates may contain lead - based paint and/or asbestos that may require inspections: a) Lead -Based Paint and Abatement - Properties that were built prior to January 1, 1978 must be inspected for lead -based paint, except for: • Properties that have been found free of lead -based paint by a certified lead -based paint inspector; a copy of the lead hazard evaluation report must be submitted to the Administrator prior to work write-up • Properties where all lead -based paint has been removed; a copy of the lead -based paint clearance report must be submitted to the Administrator prior to work write-up; or • No painted surface will be disturbed during any HIP funded improvement projects b) Asbestos & Abatement - Properties that were built prior to January 1, 1980 must be inspected for asbestos, except for: Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 5 Home Improvement Program Section I Guidelines • Properties that have been found free of asbestos by a certified asbestos professional and licensed asbestos laboratory; a copy of the asbestos evaluation report must be submitted to the Administrator prior to work write-up • Properties where all asbestos has been removed; a copy of the asbestos Clearance report must be submitted to the Administrator prior to work write-up; or • No asbestos containing materials will be disturbed during any improvement Projects Both lead -based paint and asbestos inspections must be conducted for the areas that will be disturbed during the HIP funded rehabilitation. Refer to the Lead and Asbestos Abatement Grant (LAAG) funding component for more information on inspections, inspection results, and the payment of costs associated with lead - based paint and asbestos. • Insurance - Properties must be insured with an all-risk property insurance policy of not Tess than the replacement value of the home and may require that the Agency be listed as a loss payee or additional insured. • Equity - Appraisals - At the time of application for HIP assistance, unless approved in writing by the Executive Director, the property shall not be encumbered in excess of eighty percent (80%) of its current fair market value. Total encumbrances, including the HIP loan, shall not exceed ninety-five percent (95%) of the property's current fair market value. Current fair market value may be determined by comparable sales data for sales within six (6) months prior to the date of the application; alternatively, the City/Agency may elect to determine fair market value by an appraisal conducted by an appraiser approved by the City/Agency. If HIP assistance is approved, the cost of the appraisal shall be paid by the Applicant or may be included in the loan amount; if HIP assistance is not approved or the Homeowner decides to withdraw the application, the Homeowner shall pay for the appraisal. • No Tax Delinquency or Recorded Liens - Property taxes and assessments must be paid current, and must remain current during the term of the HIP loan/grant, unless the property owner is participating in the State's Property Tax Postponement program (or other similar program) and no tax liens or mechanics liens are recorded against the property without prior written approval by the Agency. • No Criminal Activity - Properties that have evidence of repeated or ongoing criminal activity will not be eligible for HIP assistance. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 6 Home Improvement Program Section I Guidelines 5. ELIGIBLE IMPROVEMENTS Eligible improvements must be designed to correct one or more of the property conditions described in Section 1-4. An illustrative list of general categories of eligible improvements is set forth in Exhibit A. An illustrative list of general categories of ineligible improvements is set forth in Exhibit B. ■ Improvements will be authorized upon the determination by the Administrator, in its discretion, that they are necessary to correct any condition set forth in Section 1-4., and will improve the appearance of the dwelling and property from the public right- of-way; are interior repairs needed to provide safe and sanitary living conditions; or are improvements requiring replacement of an item (i.e., roof, water heater, windows) that is defective, unsafe, energy deficient, or aesthetically unattractive • Any Improvements that were previously funded through the HIP are ineligible, unless the subsequent work is to correct a defect, deficiency or damage in the original improvement, and only to the extent that is permitted by law according to funding type. • Improvements to a mobile home that include affixing the mobile home in a permanent manner to a foundation will require that either the land be owned solely by the registered owner of the mobile home or the registered owner of the mobile home must obtain written approval of the owner(s) of the land and Homeowner's Association, if any, to affix the mobile home to a foundation. This documentation must be provided prior to approval of the application. For any improvements that are eligible to receive funding through an energy -efficient program, those resources must be exhausted first prior to Applicant(s) receiving HIP assistance. Rebates will be refunded to the HIP program and the assistance grant or loan will be adjusted accordingly. 6. ELIGIBLE CONTRACTORS Before the homeowner enters into a construction agreement and before work begins, all contractors must meet the following requirements, in accordance with the laws and regulations of the State Contractors License Board (CSLB), by providing proof of: ■ A contractor's license, which the classification thereof covers the type of improvements being done, and bonded by the State of California (verified as "current, active, and in good standing") • A City of Palm Desert business license • Workers' Compensation (if they employ or otherwise engage any person to work) • Any other insurances or certificates required by law to perform such work Contractors are required to provide the homeowner any and all required notices and will be responsible for knowing and conforming to all federal and state laws and regulations pertaining to the type of work to be performed, and the consequences thereof. Home Improvement Program -- Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 7 Home Improvement Program Section I Guidelines 7. PARTICIPATION PRIORITIES • Funding is based on a first -come -first -served basis, except when health and safety code violations and emergencies exist, they will have first priority. • The City/Agency will not pay for improvements that have been completed or started prior to the date of the release of the Notice to Proceed without prior approval from the Executive Director, unless determined by the Executive Director to be unavoidable due to emergency circumstances. • The Executive Director shall establish and modify from time to time the type, nature and scope of improvements that will be financed by HIP. 8. TERMS AND CONDITIONS A deed of trust or security agreement, in the case of a non -affixed mobilehome, will be recorded against HIP assisted properties and will include but is not limited to the following terms and conditions: • Compliance with Ordinances, Rules and Regulations — Participants will comply with all federal, state and local laws, including ordinances, rules and regulations of the Agency and the City. • Maintenance Requirements - Participants must maintain assisted properties and the improvements thereon clean and in good condition and repair; not remove or demolish any building thereon; complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefore; to comply with all laws affecting the Property, or requiring any alterations or improvements to be made thereon; not to commit or permit waste or nuisance thereof; not to commit, suffer, or permit any act upon the Property in violation of the law; and to do all other acts which from the character or use of the Property may be reasonably necessary. • Hazard Insurance - Throughout the HIP loan or grant term, participating homeowners must maintain an all-risk property insurance policy, insuring the property in an amount not less than the full replacement cost of the home and any improvements thereto. The policy may be required to name the City/Agency as additional insured/loss payees and a current copy of coverage may be required to be provided on an annual basis or from time to time as requested. • Nondiscrimination — In accordance with state and federal laws, there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental disability, medical condition, or sexual orientation in the administration of the Program and provision of HIP assistance, in the homeowner's selection of contractors to complete the rehabilitation work financed with HIP assistance, or in the sale, transfer, use, occupancy, tenure, or enjoyment of assisted properties. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 8 Home Improvement Program Section I Guidelines • Records — The Administrator will -keep records. as appropriate within their respective retention schedules; however it is strongly suggested that Participants keep all loan/grant documents, and such records as may be required from time to time for the rehabilitation work financed with HIP assistance, including work orders, contracts, invoices, payments and receipts. 9. LOAN MANAGEMENT A. Payments on Loans Payments on HIP loans are due in accordance with the terms of the Promissory Note. In the event loan payments are not paid in a timely manner and become delinquent, the Agency reserves the right to exercise all remedies available, up to and including foreclosure. Participants may prepay a HIP loan or grant in whole or in part at any time without a prepayment penalty. In the event that the Participants seek to payoff a loan or grant, a demand for payoff must be requested in writing to the Agency or its loan servicer, whichever applies. HIP loans may be serviced through the City/Agency or an outside service. The loan closing notification will indicate the address where payments are to be sent. Any changes in payment locations will be provided to the borrower in writing. B. Loan/Grant Payoff (Reconveyance) The entire loan/grant, including principal and accrued interest, is immediately due and payable in full upon the occurrence of any of the following events: • Sale or transfer of the property (unless the property is sold or otherwise transferred to a person or persons qualifying under the criteria of the HIP loan/grant) • Property is refinanced with a "cash out" provision • Participant no longer resides at the property as his/her sole or principal residence • Participants are discovered to have title to additional residential property(ies), other than the subject property • Property is determined by the City/Agency to be in violation of the City's Municipal Code and such default has not been cured after reasonable notice and opportunity to cure; or • The discovery by City/Agency of the commission of any fraud or deceit in relation to the HIP Program by Participants Notwithstanding the foregoing, to the extent required by applicable law, the following shall not entitle the City/Agency to accelerate the principal under the Note, but will not affect any other remedies to which the City/Agency may be entitled: Home Improvement Program -- Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 9 Home Improvement Program Section I Guidelines • A transfer resulting from the death of any Participant where the transfer is to the spouse of that Participant who is also a Participant • A transfer by a Participant where the transfer is due to the spouse becoming a co- owner of the Property ■ A transfer resulting from a decree of dissolution of the marriage or legal separation or from a property settlement agreement incidental to such a decree which requires the applicable Participant to continue to make the loan payments by which the spouse (or former spouse) of such Participant who is also a Participant becomes the sole owner of the Property • A transfer by a Participants entering into an inter vivos trust in which such Participant(s) are beneficiaries; or ■ The Property or any portion thereof is made subject to a junior encumbrance or lien. C. Refinancing of Participating Property (Subordination) If, at any time during the life of the loan/grant, Participants request the City/Agency to subordinate to a new loan (i.e., refinance), the following conditions will apply but are not limited to: • The amount of the refinancing may not exceed the outstanding balance of the loan being refinanced plus reasonable closing costs for the refinancing. • New loan being refinanced has no provisions for subsequent disbursements of cash, or its equivalent, to the borrower after the closing of the loan. • There are no other encumbrances against the property, other than the new, proposed deed of trust that the Agency would be subordinating to, that the Agency has not approved in writing. • The terms of the refinanced loan comply with the Loan/Grant Agreement that remains in full force and effect, in addition to all conditions set forth in the Subordination Agreement. Documentation that may be required includes but is not limited to: • Copy of the Good Faith Estimate (or other similar document defining the amount of the new loan, terms and the new payment). ■ Copy of the proposed note and deed of trust in connection with the new first loan. ■ Copy of the preliminary title report. • The borrower must execute and record a Request for Notice in favor of the Agency on the new first trust deed. • The form agreement for Subordination must be approved by the Executive Director, City Manager, or his designee as applicable. 10. ADMINISTRATIVE FEES Participants may be responsible for fees incurred by the application processing should HP assistance be denied due to false information, failure to disclose or submit information, or should the homeowner withdraw the application after any services have been provided and/or fees incurred. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 10 Home Improvement Program a ;.<, Section I Guidelines 11. CONSULTANTS The City/Agency may utilize one or more Program Consultants for any or all of the implementation and/or administration of the Program. Applicant will be notified in writing upon initial review of income as to who the designated Administrator will be for the work write-up, documentation and construction portion of the Program. Home Improvement Program -- Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 11 Home Improvement Program Section II Funding Components Section II. Funding Components Income eligibility for the various funding components of HIP assistance is determined in accordance with applicable percentages of the AMI for Riverside County. A chart setting forth the current AMI figures, effective as of April 2007, is attached as Exhibit C. Income eligibility for Program applications shall be processed in accordance with Exhibit C or, as AMI figures are revised and updated from time to time by HUD. Component No. 1 — Emergency Grant (EG) • For very low and low-income households whose income does not exceed 80% of AMI. • Maximum grant amount of $7,500 for very low income families; $5,000 for low income families. • Covers emergency conditions, as determined by staff, including but not limited to the following: - abatement of lead abatement of asbestos abatement of existing or incipient code violations correction of existing or incipient health and safety and/or City municipal code violations - repair or replacement of roof leaks (during rainy conditions) repair of plumbing leaks repair or replacement of air conditioner (during summer months) or heating system (during winter months) fumigation and treatment of pest, rodent and vector control, not otherwise provided for by any other governmental agency - access improvements and special safety features to aid the physically disabled and the elderly • Grant agreement that proportionally forgives the obligation to repay over five (5) years (For example, with a grant of $5,000, $1,000 is forgiven annually). • Deed of trust recorded as security for the performance of the obligations under the grant agreement. • No repayment is required during the term of the grant agreement unless the property is sold or transferred to a household that exceeds 80% of the AMI. • Assumable if property is sold or transferred to a household whose income equals or is Tess than 80% of the AMI. The Administrator, in its discretion, may streamline verifications and with justification proceed with only one construction bid proposal or estimate. Under the EG, the three year period for previous recipients of the Program does not apply; however, total EG assistance may not exceed twice the maximum emergency grant amount and provided Total Assistance is not exceeded. Home improvement Program — Guidelines, Funding Components and Procedures Effective 7-12-07 Finalized 10-8-07 12 Home Improvement Program Section II Funding Components Component No. 2 — Rehabilitation Grant i(RGI • For very low income households whose income does not exceed 50% of AMI. • Maximum grant amount of $20,000. • Grant agreement proportionally forgives the obligation to repay over fifteen (15) years; (For example, with a grant of $7,500, $500 is forgiven annually); no repayment is required during the term of the grant agreement unless the property is sold or transferred to a household that exceeds 50% of the AMI. • Deed of trust recorded as security for the performance of the obligations under the grant agreement. • Assumable if property is sold or transferred to a household whose income equals or is Tess than 50% of the AMI. • Available once per household in a three-year period as defined in herein, provided Total Assistance is not exceeded. Component No. 3 — Matching Fund Grant (MFGI • For very low, low, and moderate income households whose income does not exceed 100% of the AMI, the City will match funds dollar for dollar with the homeowner (For example, the homeowner has a City -approved HIP project that costs $3,000; the homeowner pays $1,500 and the City will pay $1,500). • Matches expenditures of an eligible household up to a maximum grant amount of $5,000. • Grant agreement that proportionally forgives the obligation to repay the homeowner's portion over five (5) years. • Deed of trust recorded as security for the performance of the obligations under the grant agreement. No repayment is required unless the property is sold or transferred to a household that exceeds 100% of AMI. • Assumable if property is sold or transferred to a household whose income equals or is less than 100% of the AMI. • Available once every 18 months to a maximum of $10,000 in matching funds, provided Total Assistance is not exceeded, during the term of the grant agreement and cannot be combined with another funding component. Home 'morovement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 13 Home Improvement Program Section II Funding Components Component No. 4 — Rehabilitation Loan (RL) Component No. 4A — Rehabilitation Loan (very low and low income households) • For very low and low-income households whose income does not exceed 80% of the AMI. • Maximum loan amount of $35,000. • Deed of trust and/or security agreement recorded securing note at an interest rate which shall be 1 % for very low income households and 3% for low income households, simple interest rate with principal and interest fully amortized over: (a) ten (10) years if Tess than $15,000, (b) fifteen (15) years if between $15,000 and $20,000, or (c) twenty (20) years if between $20,001 and $35,000. The maturity date is 10, 15 or 20 years depending on the amount. • Assumable if property is sold or transferred to a household whose income equals or is Tess than 80% of the AMI. • Available once per household in a three-year period as defined herein, provided Total Assistance is not exceeded. Component No. 4B — Rehabilitation Loan (moderate income households) • For moderate income households whose income is between 81-100% of the AMI • Maximum loan amount of $35,000 • Deed of trust and/or security agreement recorded securing note at an interest rate of 5% simple interest with principal and interest fully amortized over: (a) ten (10) years if less than $15,000, or (b) fifteen (15) years if between $15,000 and $20,000, or (c) twenty (20) years if between $20,001 and $35,000. The maturity date is 10, 15 or 20 years depending on the amount. • Assumable if property is sold or transferred to a household whose income equals or is less than 100% of the AMI • Available once per household in a three-year period as defined herein, provided Total Assistance is not exceeded. Component No. 4C — Rehabilitation Loan -- Deferred (RL-D) (not available for mobilehomes) • For very low, low, and moderate income households whose income does not exceed 100% of the AMI. • Maximum loan amount of $45,000. Home Improvement Program — Guidelines, Funding Components and P oceduros Effective 07-12-07 Finalized 10-8-07 14 Home Improvement Program Section II Funding Components • 45-year affordability restriction required. • Deed of trust recorded securing note at 3% simple interest requiring no payments. Deferred loan forgiven after 30 years if property remains in compliance ("Silent Second"). • Assumable if property is sold or transferred to a household that does not exceed 100% of the AMI. • Available once per household or property while loan is outstanding provided Total Assistance is not exceeded. This component is not available for mobilehomes. Component No. 5 - Drouciht Tolerant Landscape Retrofit Loan (DTLR) The DTLR component is designed for improvements that are intended to reduce the consumption of water or other natural resource. • For very low, low and moderate income households whose income does not exceed 100% of the AMI. • Maximum loan amount of $7,500. • Deed of trust recorded securing note at 3% simple interest requiring no payments. • Assumable if property is sold or transferred to a household that does not exceed 100% of the AMI. • Available once per household or property. • Can be combined with any other HIP component provided Total Assistance is not exceeded. Component No. 6 — Make a Difference Volunteer (MADV1 The Make a Difference Volunteer (MADV) component is designed to elicit the involvement of volunteers to assist with special neighborhood clean-up events within a geographic area that from time to time may be identified as a Focus Area. Focus Areas are defined in Section 1-4. In addition, City/Agency will solicit donations of material to defray the cost of improvements made pursuant to this component. • Properties will be identified within the Focus Area in need of repairs and clean- up. • Homeowners will be contacted to inquire as to their willingness to participate in the Program. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 15 Home Improvement Program Section II Funding Components ■ A clean-up/repair work program will be prepared by the Administrator. • An event date will be selected and solicitation of both volunteers and donations will begin. • The Administrator will coordinate all aspects of the Make a Difference Volunteer component. ■ Can be combined with any other HIP component. Component No. 7 — Acquisition/Rehabilitation/Resale (ARR • For very low, low and moderate income households whose income does not exceed 120% of the AMI. • Will be targeted to first-time homebuyers. Any available waitlists will be utilized to identify potential buyers. • Anticipated acquisition cost per home up to a maximum of $350,000. • Second trust deeds in amounts not to exceed $75,000 per property will be made available as required from 20% Housing Set -Aside Funds to ensure an affordable housing cost. • Can only be combined with another HIP component with written approval of the Executive Director. Total Assistance will apply to recipients under the ARR program in the event additional assistance is requested after acquisition. Property Acquisition and Rehabilitation Procedures • The Administrator will identify homes that are for sale within the jurisdiction and negotiate the acquisition of such property. • The Administrator will accomplish due diligence and define renovation costs by preparing a Scope of Work analysis to include costs of rehabilitation. • The Administrator will identify and work with conventional lending institutions to qualify and finance prospective buyers for fixed rate loans at the then -current market rate for a term up to 30 years. • The Administrator will establish a waiting list of qualified very low, low and moderate -income families for ARR assistance. • The City/Agency will provide, as necessary, a silent second trust deed mortgage to reduce the mortgage amount and make a grant to cover closing costs to ensure an affordable housing cost. • The City/Agency may from time to time identify non-profit organizations which may acquire, rehabilitate and resell identified property to a very low, low or moderate income household. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 16 Home Improvement Program Section II Funding Components Component No. 8 — Lead and Asbestos Abatement Grant (LAAG1 • For very low and low-income households whose income does not exceed 80% of the AMI. ■ Covers lead and asbestos abatement requirements identified by inspections noted in Section 1-4. (Also see: Inspections, below). ■ Maximum grant amount of $7,500. • Grant agreement proportionally forgives the obligation to repay over five (5) years (For example, with a grant of $5,000, $1,000 is forgiven annually). ■ Deed of trust recorded as security for the performance of the obligations under the grant agreement. • No repayment is required unless property is sold or transferred to a household that exceeds 80% of the AMI. • Assumable if property is sold or transferred to a household whose income does not exceed 80% of the AMI. • Can be combined with any HIP component provided Total Assistance is not exceeded. Inspections will be conducted by certified professionals approved by the Administrator, but such approval shall not render the City/Agency or Administrator liable for the work or the acts or omissions of such professionals. The total inspection fees for: 1) lead -based paint and asbestos inspection; and 2) risk assessment will be paid for by the HIP Participant and reimbursed to the approved Applicant by increasing the amount of the loan or grant by the amount necessary to cover the cost of such inspection, provided the addition of the cost does not cause the loan or grant to exceed the respective maximums. If the inspection reveals no presence of lead or asbestos, and no further inspection, analysis, or abatement is necessary, then the costs may be funded under the Lead and Asbestos Abatement Grant (LAAG), subject to the Participant meeting the criteria under the LAAG. If the Participant exceeds the income levels to be eligible for a LAAG, then the costs can be funded through the Participant's HIP loan, provided the applicable loan limits are not exceeded. If the inspection reveals positive results, risk assessment must be conducted at the same time to determine the level of risk involved. The costs (up to $7,500 per property, including the initial inspection fees) for risk assessment, abatement, abatement monitoring, clearance inspection, laboratory sampling, and other related work may be funded under the LAAG. If abatement services are needed, the Participant must obtain three (3) abatement estimates from state certified and licensed abatement specialists Home Improvement Program -- Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 17 Home Improvement Program Section II Funding Components and contract directly for the service. The Administrator will assist Participants in obtaining a list of state certified hazard abatement contractors. If Participant cancels the application for funding after costs are incurred related to the lead and asbestos inspection or abatement, the Participant shall be responsible for those costs. The Administrator, in its discretion, may streamline verifications and with justification proceed with only one construction or repair proposal, bid or estimate. Under the LAAG, there is no three-year waiting period required for previous recipients of the Program; however, total LAAG assistance may not exceed twice the maximum LAAG grant amount. Financial Hardship Exceptions to Component Requirements The Executive Director or his/her designee has the authority to reduce or waive interest, and/or to authorize other discretionary modifications to the Funding Components in order to further assist otherwise eligible homeowners in cases of extreme financial hardship and/or need for eligible improvements. Such exceptions shall be made strictly on a case -by -case basis, in accordance with the terms and conditions set forth in Section I, above and the funding sources used. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 18 Home Improvement Program Section III Procedures Section III. Procedures The Palm Desert Redevelopment Agency is the administrator of the HIP, regardless of funding source. The Executive Director of the Agency is authorized to establish Guidelines and other procedures to implement the HIP and to amend them from time to time as necessary, or as required by law. Step 1: Application Process A. Submission of an Application Package and Supporting Documentation An application must be submitted along with supporting documentation including but not limited to: • A signed application by both Applicant and co-Applicant(s); an incomplete application will not be processed • All required supporting documentation outlined in the application in addition to any other additional information requested during the application process • All persons having title to property have submitted a completed application and supporting documentation indicating eligibility by meeting all Program criteria • Signed Consent form(s) including authorization to verify application documentation such as credit checks, employment, mortgage, insurance, and assets B. Evaluation and Verification of Application As part of the application process, the following steps will be performed: • Review of application and supporting documentation that may include: tax returns, identification, and household status. • Verification of prior HIP assistance (for three-year period or other applicable waiting period criteria). • Property legal description and vesting verification. • Credit report check (paid for by Agency). • Ordering of preliminary title report paid for by the City/Agency subject to Section 1-10. • Verifications of employment(s), deposit(s) and mortgage(s). • Determination of eligibility as more particularly described in Sections 1-3, 1-4 and 1-5 of these Guidelines. • Review of Preliminary Title Report. Grants and liens will be recorded with the Riverside County recorder's office in the most favorable position for the City/Agency. It is anticipated that the recorded grants and liens may be subordinate to a superior first trust deed, however, the City/Agency reserve the right to approve all other liens that may take a superior position to the grant or lien. If such approval is withheld, the application will be denied. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 7-12-07 Finalized 10-8-07 19 Home Improvement Program Section III Procedures Upon receipt of the application, supporting documentation, verifications, and if the Applicant(s) and property are determined to meet the Program's criteria as defined by these Guidelines, then the Applicant(s) will be allowed to proceed to the next step of the application process, as outlined in Section III- Step 2, below. At this step, upon receipt of all required documentation, if the Applicant or property is determined not to meet the Program's criteria, then the Applicant will be mailed a letter of ineligibility in accordance with federal consumer credit laws. C. Inspection and Work Write -Up • The Administrator will conduct an initial property inspection. At this time, photographs are taken to determine the eligibility of homeowner's desired improvement projects. • Inspections will be completed on a first -come -first -served basis as appointments are set-up except that priority will be given to those property inspections that involve code violations, health and safety issues, potential environmental issues or emergency conditions. • Any additional requests for home improvements not examined during the inspection and not listed on the "Work Write -Up" must be brought to the attention of the Administrator immediately before loan/grant documents are signed. ■ Any corrective work for lead -based paint and/or asbestos removal will be identified during the initial inspection and made part of the Work Write Up. All remediation and abatement will be completed and certified prior to any other work commencing, except for emergency or health and safety items that will in no way impact the area where the lead -based paint, asbestos or other contaminant that is known to exist unless, in the discretion of the Administrator, the emergency is life - threatening. Following the initial inspection, the Administrator will issue a "Work Write -Up" and outline the eligible improvements and estimated costs. The estimated dollar amount of the Work Write -Up will be used to determine the HIP funding type and amount needed to approve the loan/grant. The homeowner and the Administrator will review the Work Write -Up and finalize the list of improvements which will be made part of the application. The funding type and loan/grant amount will be adjusted, as needed, upon receipt of bids, estimates or proposals. Only those improvements listed in the Work Write -Up that are approved under the Guidelines will be eligible for HIP funding. All the improvements listed in the Work Write -Up may or may not be funded depending on eligibility, funding availability and funding component limits. D. Completed Application An application is complete once the requirements in Step 1 A. through C. above, have been completed. A completed application is neither an approval nor denial for funding assistance. A written statement of approval, denial or ineligibility will be provided to the Applicant in accordance with the procedural steps identified in these Guidelines. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 20 Home Improvement Program Section III Procedures Step 2: Loan/Grant Approval or Denial Upon review of the Work Write -Up, if the Applicant and property is determined to meet the Program's criteria, the funding type will be identified, subject to the Agency having sufficient funds. Concurrently, the application will be forwarded to the City's CDBG department for CDBG environmental and applicability acceptance, should CDBG funding be available. If the Work Write -Up does not meet the Program's criteria, is not in accordance with CDBG guidelines, or is not approved by the Agency, then the Applicant will be mailed a letter of denial in accordance with the federal consumer credit laws within thirty (30) days of completion of the application. If the program eligibility guidelines are met and all other Agency approvals have been granted, the Administrator will issue final loan approval, and notify the Applicant in writing within thirty (30) days of completion of the application. Step 3: Loan Funding A. Signing of Documents Once all above steps have been completed, loan/grant documents will be prepared for Participant's signature. All persons holding title to the property must sign the loan or grant documents and consent to the terms therein. The City/Agency does not provide notary services and any documents requiring notary services and associated fees are the responsibility of the Participant. The following documents are required, as differentiated by the funding type: Loans ■ Deed of Trust • Promissory Note • Loan Agreement • Truth in Lending Disclosure Statement • Notice of Right to Cancel • Regulatory Agreement (for Component No. 4C — Deferred Loan, only) Grants • Deed of Trust • Promissory Note ■ Grant Agreement ■ Notice of Right to Cancel Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 21 Home Improvement Program Section III Procedures Participants will be provided with a copy of the non -executed documents. Note: Upon completion of the improvement work, the actual costs and indebtedness shall be confirmed by the City/Agency in writing (see Step 8, below). B. Notice of Right to Cancel (3-Day Cancellation Period) As required by law, there is a three (3) business day cancellation period after the Participant executes the loan/grant documents. Participants have this period to cancel the loan/grant without incurring additional fees. C. Title Insurance For loans or grants that are in an amount determined by the City/Agency to require the City/Agency's position to be insured, title insurance shall be obtained, the cost of which shall be paid for by the City/Agency. This policy will be requested and obtained after Participants have fully executed all loan documents, and prior to beginning construction. D. Recording of Documents Following the execution and notarization (when applicable) of all grant or loan documents, the Applicant shall return the documents to the Administrator. The Administrator will forward the documents and authorize recording with the Riverside County Recorder's Office. Step 4: Pre -Construction (Bids and Contracts) A. Bid Process The Participants are strongly encouraged but not required to participate in obtaining bids, proposals or estimates for the home improvement projects approved under the Program, since all construction contracts are by and between the homeowner and the contractor(s) exclusively. The Participant, and not the City/Agency or Program Consultant, makes the final selection of contractor(s). The obtaining of three (3) written estimates from licensed contractors for each improvement (excluding Emergency Grants) must be attempted and submitted to the Administrator within thirty (30) days from the receipt of the letter of approval, unless exception is given by the Agency. The Participants must indicate their 1st, 2nd and 3rd choice for each improvement project. In the event that three estimates cannot be obtained, the Administrator may process the bid with less than the required three estimates if adequate documentation has been supplied to indicate that there has been sufficient effort expended to obtain three estimates and that the required number of qualified contractors have not responded. The Administrator retains the discretion to reject all bids or estimates if they are deemed to be unreasonable, incomplete or otherwise irregular. Home Improvement Program -- Guidelines, Funding Components end Procedures Effective 07-12-07 Finalized 10-8-07 22 Home Improvement Program Section III Procedures In the event of an emergency situation, the Administrator may proceed with only one estimate. It is the contractor's responsibility to obtain permits when permits are required for the approved work. Inspections that are required as part of the approved work will be conducted by a person or entity deemed to be qualified for such inspections. Contractor's estimates must include costs for all applicable permits and required inspections except in the case of environmental inspections which will be handled in the customary manner for such inspections. Participants may perform the work themselves, if they are deemed and approved to be qualified in the discretion of the Administrator. In such situations, HIP covers the cost of materials only, and does not cover the cost of labor. B. Contractor Requirements and Contracts For all contracts for work in excess of $500, contractors selected by the Participants must meet all California State Contractor's Board (CSLB) requirements including but not limited to the following: • California State Contractor's license and bond verified as "Current, Active, and in Good Standing;" the information can be verified by contacting the CSLB: 1-800- 321-CSLB or www.cslb.ca.gov • A current and valid City of Palm Desert business license. If not, one must be obtained prior to the commencement of work; payment will not be disbursed until the license is obtained • Workers' Compensation (WC) is required if contractor employs or otherwise engages any person to work; verification of WC insurance will be verified on CSLB's website • A completed Taxpayer Identification Request form • All other licenses and insurances that cover the contractor and its employees for the type of work being performed, as required by the CSLB C. Notice to Proceed A Notice to Proceed is issued to Participants after the 3-business day cancellation period following the signing of loan/grant documents. D. Skirling of Contracts Upon receiving the Notice to Proceed, Participants shall sign the approved contract(s) and, once fully executed, begin the improvement projects with the approved contractors. Contracts must reflect the estimate received; any changes in the contract or any Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 23 Home Improvement Program Section III Procedures subsequent change orders to the contract must be authorized in writing by the Participant and approved by the Administrator. Prior to the commencement of construction, the contractor will submit the following documents to the Participant: • IRS form W-9 (Request for Taxpayer Identification and Certification) • Contract (fully executed) The Participant shall permit the Administrator to make and retain copies of the fully executed IRS forms and contract documents(s). The Participant will retain all original contract documents. Step 5: Construction All improvement work shall be in accordance with the Uniform Building Code, as well as the City's codes and other applicable laws. The Administrator will monitor the progress of work and assist the Participant, as needed, should any problems, disputes or delays occur. Home improvement work should be done in the following order: • Health and safety (including lead and/or asbestos hazards) • Emergencies (as defined by the Program) • Code violation abatement • Other work as approved by the Administrator As required by law, hazard abatement activities must be monitored by certified inspectors. Participants need to coordinate with both the hazard abatement professional and a certified inspector (same firms as the initial lead -based and asbestos inspections) to ensure the work is performed properly. After the hazard abatement activities are completed, a certified inspector will perform a second clearance test and generate a "Notice to Lead Hazard Abatement Activity" report and/or "Asbestos Abatement Report", which will be provided to Participant within fifteen (15) days, to declare the areas of the property to be disturbed to be free of lead, asbestos or other hazardous material. Construction work will not proceed until the property has been declared to be free of lead, asbestos or other hazardous material. Prior to or during the improvement work, a HIP sign will be placed on the participating property (subject to sign availability). Step 6: Disbursement of Payments The contractor and Participant must sign and submit a draw request for work completed in accordance with the contract. Prior to approval of each draw request, the Administrator will inspect the work performed, but no inspection or disbursement of Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 24 Home Improvement Program Section III Procedures funds shall render the City/Agency or Any Program Consultant liable for any defects in the work or any damage incident thereto. Payments will not be disbursed until contractors have provided the following: • Certificate of Satisfactory Completion of Progression Portion of Work or Certificate of Satisfactory Completion of Work (whichever is applicable) • Conditional Waiver and Release Upon Progressive Payment or Conditional Waiver and Release Upon Final Payment (whichever is applicable) • Change Order (if applicable) Ten (10%) percent retention of each draw request will be held until the final payment and all work is completed (see Step 7), inspected by the Administrator and approved by the Participant. Checks will be issued payable to the contractor unless otherwise approved by the Executive Director. Step 7: Project Completion Upon the completion of improvement work, projects will be inspected and photographed by the Administrator. If applicable, the work must be finaled by the City's Building and Safety Department. If applicable, a "Notice of Completion" document will be signed by the Participant, submitted to the Administrator who will forward it to the Riverside County Recorder's Office for recordation. Step 8: Final Loan/Cost Verification Statements • Once Step 7 is complete and the final disbursement has been issued, final principal adjustments will be made to the loan or grant of record and will reflect actual disbursements made pursuant to the HIP. Participant will receive notification of the principal adjustment upon completion of all cost verifications. • Copies of the closing documents will be distributed to appropriate staff for purposes of maintaining information relative to the HIP loan or grant. In cases where the loan is being handled by an outside agency, loan set up and other necessary actions necessary to close the loan, will be performed. Step 9: Appeal and Dispute Resolution Process If an Applicant is denied Program participation or is not satisfied with the assistance provided under the HIP, the following procedures may be taken: • Denial of application: Within ten (10) days of receiving written notification of the application for HIP assistance being denied, the Applicant shall submit an Home Improvement Program -- Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 25 Home Improvement Program Section III Procedures appeal, in writing, to the attention of the Executive Director. The appeal shall set forth a clear and concise statement of the reason(s) the Applicant believes the application for HIP assistance should have been approved, together with any supporting documentation. The Executive Director or his/her designee shall review the appeal and issue a decision thereon in writing and mail it to the Applicant within thirty (30) days. The decision of the Agency shall be final. • Dispute Resolution: If the Participant is not satisfied with the assistance provided under the HP or encounters problems with the Contractor or the workmanship of the Contractor, the Participant should promptly bring this to the attention of the Administrator. The Administrator will endeavor to assist the Participant in resolving such disputes or problems informally. Every effort should be made to address and resolve problems promptly. In the event of a dispute between the Participant and the Contractor that cannot be resolved with the assistance of the Administrator, the Participant 's sole recourse is against the Contractor. The City/Agency and Any Program Consultant assume no liability whatsoever for any work performed or not performed by any contractor or other person or entity pursuant to the Program. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 26 Home Improvement Program Exhibits Exhibit A Eligible Improvements Eligible improvements include, but are not limited to the following: A Additions to structures: bathrooms/bedroom (to mitigate crowded or unsatisfactory living conditions) Air conditioning (central) Attic fans B Basements (repairs) Bathroom & bedroom: handicap accessibility improvements or plumbing leaks Blacktopping C Carpentry Carports Ceilings Chimney (repairs) Code violation abatement Concrete Curbing (single family only) D Debris cleanup Demolition, clearing & grubbing Doors & hardware: exterior Driveways Drywall, hardboard & plywood E Earthwork Electrical Energy efficiency improvements*: (ceiling insulation, weather-stripping, caulking, low -flow shower heads, water heater blankets, evaporative or a/c covers, pipe insulation, faucet aerators, fluorescent lights & fixtures) Evaporative coolers Exhaust fans Exterior work (as eligible) F Fencing: brick, wood, iron Finishes: exterior Fireplaces (indoor only) Furnaces: coal, floor, gas, oil G Garage doors & system Garages & carports Gas heating systems Gas leaks Greenhouses Guardrails Gutters, downspouts & flashing H Handicap accessibility improvements Hardware (door) Health & safety items Heat system & ventilation (repairs & new) I Insulation Irrigation system J K L Landscaping Lathe & plaster Lighting: exterior M Masonry Meters: electric, water, gas Molding P Painting (exterior) Patios Paving Pest control Plastering Plumbing Porches R Railings for handicap accessibility Resurfacing Retaining walls Roofing (repairs & new) S Sandblasting Sanding Sashes Screening Sewerage system (sewer & septic) Siding Sills Structural: repair, changes & facades Stucco Studding T Thermostats Tiles: roof Termite control (with replacement of damage) Trees (diseased or damaged and hazard to structure on property or to the public right of way V Ventilation systems Vents W Wall heaters Walls: brick, wood, iron Walkways Water heaters Weather & water proofing Weather stripping Windows: screen, storm, thermal Wiring: electric *Includes installation of insulation and other energy conservation measures if staff determines it is cost effective and verifies that Applicant has exhausted all available energy program resources for assistance prior to applying for HIP funds. Home Improvement Program -- Guidelines, Funding Components and Procedures 27 Effective 07-12-07 Finalized 10-8-07 Home Improvement Program Exhibits Exhibit B Ineligible Improvements* Ineligible improvements include, without limitation, improvements that are cosmetic in nature and/or accessory -use improvements, including, but not limited to: A Air conditioning placed in windows Alarm systems Appliances B Barbeque pits Basements (new) Bath houses Blinds: shutters, Venetian, vertical Built -Ins: stove or ovens that are functionally obsolete are the exception c Cabana rooms Cabinets: handicap accessibility is the exception Carpet: sanitary conditions are the exception Chimneys (new) D Deck around swimming pool Dishwasher Door chimes F Fans Fire extinguishers Fireplaces or hearths G Gazebos or decks Green houses H Home furnishings: indoor/outdoor Hot tubs, saunas, spas or whirlpool baths (interior or exterior) Interior work: handicap accessibility improvements, health & safety are the exception K Kitchen appliances or equipment: built- in stoves & ovens are the exception if functionally obsolete L Lighting: interior (energy efficient items are the exception) M Moveable structures 0 P Penthouse additions Photomurals Pool (restoration or aesthetic) Range hoods Remodeling Satellite dishes Security system Sinks Sprinkler system: fire Swimming pools (or any repairs in connection with) Swimming pool enclosures T Television antennae Tree surgery/removal (unless diseased and hazard to structure) V Valence or cornice boards w Water conditioners Waterproofing (pumping or injecting any substance in the earth adjacent to or beneath the foundation or basement floor) * Some items noted as ineligible may qualify under one or more programs available for the purposes of increasing energy efficiency, thus reducing overall energy consumption. Those items will be identified by the Palm Desert Office of Energy Management. If such designation is made, this program may be utilized for the purchase and installation of energy components. If Applicant is eligible for any other program monies for the same purpose, the Applicant must apply for and expend such monies prior to HIP funds being disbursed. in the case of rebates, such rebates will be refunded to the Agency and applied to the grant/loan accordingly. Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 28 Home Improvement Program Exhibits Exhibit C Department of Housing and Urban Development Chart of County of Riverside Median Income data Effective as of April 2007 INCOME ELIGIBILITY LIMITS FOR AFFORDABLE HOUSING IN RIVERSIDE COUNTY This chart is based on HUD & HCD published income figures NOTE 1: operative as of Interim °A) of AMI have been calculated based on 100% AMI for each NOTE 2: household size Income Category April 23, 2007 Income eligibility limits based on the following number of persons in the % of family household Median 1 2 3 4 5 6 7 8 Extremely low 20% 8,280 9,480 10,660 11,840 12,780 13,740 14,680 15,620 Extremely low 25% 10,350 11,850 13,325 14,800 15,975 17,175 18,350 19,525 Extremely low HUD/HCD 30% 12,450 14,200 16,000 17,750 19,150 20,600 22,000 23,450 Very low 35% 14,490 16,590 18,655 20,720 22,365 24,045 25,690 27,335 Very low 40% 16,560 18,960 21,320 23,680 25,560 27,480 29,360 31,240 Very low 45% 18,630 21,330 23,985 26,640 28,755 30,915 33,030 35,145 Very low HUD/HCD 50% 20,700 23,700 26,650 29,600 31,950 34,350 36,700 39,050 Lower 55% 22,770 26,070 29,315 32,560 35,145 37,785 40,370 42,955 Lower 60% 24,840 28,440 31,980 35,520 38,340 41,220 44,040 46,860 Lower 65% 26,910 30,810 34,645 38,480 41,535 44,655 47,710 50,765 Lower 70% 28,980 33,180 37,310 41,440 44,730 48,090 51,380 54,670 Lower 75% 31,050 35,550 39,975 44,400 47,925 51,525 55,050 58,575 Lower HUD/HCD 80% 33,150 37,900 42,600 47,350 51,150 54,950 58,700 62,500 Median 85% 35,190 40,290 45,305 50,320 54,315 58,395 62,390 66,385 Median 90% 37,260 42,660 47,970 53,280 57,510 61,830 66,060 70,290 Median 95% 39,330 45,030 50,635 56,240 60,705 65,265 69,730 74,195 Median HUD/HCD 100% 41,400 47,400 53,300 59,200 63,900 68,700 73,400 78,100 Moderate 105% 43,470 49,770 55,965 62,160 67,095 72,135 77,070 82,005 Moderate 110% 45,540 52,140 58,630 65,120 70,290 75,570 80,740 85,910 Moderate 115% 47,610 54,510 61,295 68,080 73,485 79,005 84,410 89,815 Moderate HUD/HCD 120% 49,700 56,800 63,900 71,000 76,700 82,400 88,000 93,700 Home Improvement Program - Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 29 Home Improvement Program Exhibits COMPONENT Mobile Homes Lead -Based Paint & Asbestos Abatement Emergency Grant (EG) Emergency improvements Rehabilitation Grant (RG) Rehabilitation Improvements Matching Funds (MF) The City will match funds dollar for dollar with a homeowner (for example, the homeowner has a City approved project done that costs $3,000. The homeowner pays $1,500 and the City will pay $1,500) HOME IMPROVEMENT PROGRAM AT -A -GLANCE Exhibit D PROGRAM REQUIREMENTS AND ASSISTANCE AMOUNTS • Added mobile homes to property criteria — (7-12-07) • Added lead -based paint & asbestos abatement (7-12-07) • Maximum grant amount of $7,500 for very low income; $5,000 for low income households • Very Low and Low Income does not exceed 80% of AMI • Interest rate is 0% • Obligation forgiven equally porportionate over 5 years • No payments required unless default • Maximum grant amount of $20,000 • Very low income households whose income does not exceed 50% of AMI • Interest rate is 0% • Obligation forgiven equally porportionate over 15 years • No payments required unless default • Available once per household in a 3-year period • Maximum grant of $5,000 • Very iow,Low and Median income households whose income does not exceed 100% AMI • Interest rate is 0% • Obligation forgiven equally porportionate over 5 years • No payments required unless default • Available once every 18 months to a maximum of $10,000 Home Improvement Program — Guidelires, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 30 Home Improvement Program Exhibits COMPONENT HOME IMPROVEMENT PROGRAM AT -A -GLANCE Exhibit D PROGRAM REQUIREMENTS AND ASSISTANCE AMOUNTS Rehabilitation Loan (RL) (RL) — Low Income Rehabilitation Improvements Rehabilitation Loan (RL) (RL) — Median Income Rehabilitation Improvements Rehabilitation Loan - Deferred (RL-D) Rehabilitation Improvements Draught Tolerant Landscape Retrofit (DTLR) The DTLR component is designed for improvements having a nature that will serve to reduce the consumption of water or other natural resource. • • • • • • • • • • • • • • • • • • • • • Maximum loan amount of $35,000 Very low and Low income households whose income does not exceed 80% AMI Interest from 1-3% Simple depending on income level Amortized over 10-20 years depending on Loan amount Payments due monthly Available once per household in a three year period Maximum loan amount of $35,000 Median income households whose income does not exceed 100% of AMI Interest 5% Simple Amortized over 10-20 years depending on amount Payments due monthly Available once per household in a three year period Maximum loan amount of $45,000 Very low,Low and Median income households whose income does not exceed 100% AMI Interest 3% Simple No payments required unless default Requires a 30 year affordability Covenant Available once per household or residence while loan is outstanding Maximum loan amount of $7,500 Very Iow,Low and Median income households whose income does not exceed 100% AMI Interest 3% Simple Available once per household or residence Home Improvement Program — Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 31 Home Improvement Program Exhibits HOME IMPROVEMENT PROGRAM AT -A -GLANCE COMPONENT Make a Difference Volunteer Program (MADD) Acquisition/Rehab/Resale (ARR) Lead & Asbestos Abatement Grant (LAAG) Exhibit D PROGRAM REQUIREMENTS AND ASSISTANCE AMOUNTS • Volunteers will assist with special neighborhood cleanups • Program Administrator will solicit donations of material to defray the cost of improvements • Anticipated cost per home up to $350,000 • • First -Time Horne Buyer Program Very Low, Low and Moderate income households • Income does not exceed 120% of AMI • Anticipated rehabilitation cost will vary on the homes condition • Silent Second Trust Deed to ensure affordability • Maximum grant amount of $7,500.00 • Very Low, Low income households • Income does not exceed 80% of AMI • Interest rate 0% • Principal forgiven over 5 years • No payments required unless default Energy Efficiency • Added energy efficiency eligible improvements in connection Upgrade Program with any plan designed by the office of Energy Management; Coordination Home Improvement Program -- Guidelines, Funding Components and Procedures Effective 07-12-07 Finalized 10-8-07 32