HomeMy WebLinkAbout1982-01-26; City Council; 6879; Residential Rehabilitation Program2 ;,'
CITJISF CARLSBAD - AGEN&LL ,/
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CITY MGR DEPT. BIJG*
CITY Am MTG. j;/ 26 / 82
DEPT. HD. TITLE RESIDENTIAL REHABILITATION PROGRAM
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RECOMMENDED ACTION: City Council direct staff to begin conducting a locally administered Residentic
Rehabilitation Program.
ITEM EXPL.4NATION:
At its meeting of May 5, 1981 , City Council directed staff to request the retul Carlsbad's Residential Rehabiiitation funds plus administration fees from the ( of San Diego for the purpose of conducting a locally administered Rehabilitatic
Program.
A program has been designed by staff. This program has been approved by Count! Counsel and the County Department of Housing and Community Development. Appro\ of the recommendation would mean a program could start up in the community by February 1982. Funds will be temporarily borrowed from the General Fund to depc with the lender. The creation of this "debit" will permit us to draw on funds held by the County.
FISCAL IMPACT:
$96,900 funded by 3rd year Block Grant representing up to $250,000 in leveragel rehabi 1 i tation 1 oans.
EXHIBITS:
A- Memo dated October 26, 1981, to Assistant City Manager/Developmental Servi
B- Residential Rehabilitation Program dated June 1981
C- Agreement for Management and Implementation of a Community Development Blo Grant Project.
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NENORANDVM
DATE : Octobgr 26t 3981
TO :
FROM :
Ron Beckman, Assistant City IQx~qer/Deu, Service
Chris Salomoce, Administrative Ride c Block Grant
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VIA: A- J. Aitken, Director, I-fousing 6- Redevelopmen.21:
SUBJECT : Residential Rehabiiitation Prcrgrarn
The County of San Diego has apgroved the City of Carlsbad
Residential Rehabilitation Prograz and sent forward a propssec:
contract for the managemant and irqlementation of the project,
A copy of the program arrd contract acconpany this wepou-k,.
BACKGEOUND
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The City of Carlsbad devoted its entire alXo-tmen-t; of !rhi.ri
Year Cormiunity Development Block Grant fund5ny to a Resridexti;
Rehabilitation Program, The funding c7nsun.t wc'cs $103,000- 41k
was in 1976 - The program was to be run for the City hy the
County as a part of the' county ~s- overa.11 rehabilitaii-on prcxrs:<
The purpose of a Residential Rehabilitation Program is to
upgrade deteriorating housing stozl< by making ava:ila.'i:,l-~-) ~iow-c~~
no-interest loans -to cpatlifying hcse G~,~EZS -
The program, as run by the- Coiznty for Carlsbad, has no-[: ?X
effective. Six loans have Seen KEG? and a balan,ce 'sf a-lmos-?:
$90,000 representing over $250,00C in lozns rernairrs IJ-~KS~~~L-
City Council directed staff to design a workable prroqr~1m.
and tak; steps to have the funds 63tpositErd with a local lend2
in order to operate OUT oxr~ progrzTt.
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Per City Council direction; E: nroqrmt h;;s bee2 designed,
reviewed by County Counsel and armroved by Ccun-ty ~L~usLn<r ani!
Coxnunity nevclopmen-t for adninlstrat~ion by and. fort: Ca-r:t shad c
OPTIONS
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1) To s-tart-up -tlrle program, ?he ccmt:r~?ck ~msk be a;?:,i.co-,rc:
and returned. to the Coun-ky ~ kts -t-F--.'- LCIL -tirnc? , the :Frrmds
will be deposited with z loczl I.znc:.elr :Ear 1.everz~~i~~~f
and. loan processing assis'raxe - A CiIi.$(: <:ommerc.i_al
Rehabilitation Program will. concurrently have ftrn:~~;
k7ith the lender.
EXHIBIT "A"
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OPTIONS The combined programs assure a 'good leveraging
(continued) ,of the City's rehabilitation eEforts, rate and a centralized loan processsr for all.
2) If the program is not approved, the money coulc
be reprogramed into ano-ther eligible Block ~r~ Project -
STAFFING
The combined Comercia1 and ksidential Kell~a'ori%ritat.ion
Programs will require additional staff, It is estimated. -th&
a building inspector will be utilized on a. 25% to 50% bssis
to assure safety and code compliarzce.
At least one-half a full-time administrator wiX7. he re--
quired to conduct the outreach, loan processing and legal paperwork for the program,
Administrative fees can be paid ou.t of Coun-by CBEG, monies -
iT;n Agenda Bi11 is af=tached fcr Cotznc:i.l_ cons:Lc~eratj~on, .
EXH I B IT "A" Page 2
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R€/lD€llTll91 REHRRILITATION
PROGRBM
DEPARTMENT OF HOUSING AND REDEVELOPMENT
JUNE
1981
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TABLE OF CONTENTS
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PROGRAM SUMMARY ........................................... 1
PROGRAM DESCRIPTION ....................................... 3
Low Interest Property Improvement Loans ............... 3
Deferred Loans ........................................ 5
Grants ................................................ 6
Absentee Owners ....................................... 7
CITY DEPARTMENTAL FUNCTIONS ............................... 8
COMMUNTIY REHABILITATION LOAN COMMITTEE ................... 9
PROCESSING RRP LOANS ...................................... 10
CONTRACTING PROCEDURE ..................................... 13
PROPERTY STANDARDS ........................................ 15
LOAN PROCESS FLOW CHART ................................... 21
GLOSSARY .................................................. 22
INCOME LIMIT CHART ........................................ 25
MAP OF TARGET AREA ........................................ 26
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RESIDENTIAL REHABILITATION PROGRAM
(RRP)
PROGRAM SUMMARY-
Goals of Residential Rehabilitation Program
It is the primary goal of Carlsbad's Residential Rehabilitation Program to
upgrade the existing housing stock and maintain affordable housing. The
program is designed to assist property owners to obtain financing who previously were not interested in or could not afford a home improvement loan. This is
accomplished by making the loan terms more attractive and reducing the monthly
cost of repaying the loan (in some cases reducing the cost to zero). A
corollary goal is to "l'everage'' the limited Community Development Block Grant
funds set aside for rehabilitation to reach as many households as possible.
Additional program goals are:
- to eliminate unhealthy or hazardous conditions
in low-moderate income areas
- to encourage and assure reinvestment by private
lenders in the targeted rehabilitation area
- to increase property values and conserve the
property tax base of the community
Funding
The Residential Rehabilitation Program (RRP) in Carlsbad is financed through
the Community Development Block Grant program. Funds are annually subventioned to local governments based on a population/poverty/housing formula. The major
federal requirement is that funds be used primarily to assist low-moderate income households. The formula requires that cities with poyulations of less
than 50,000 cannot apply directly to the federal government for monies.
Therefore, the County of San Diego is the grantee on behalf of the City of
Carlsbad. Community Development Block Grant programs and projects are reviewed
and approved by the County of San Diego.
TYPES OF REHABILITATION LOANS
The program would make available:
1. Below Market Interest Rate Loans
2. Deferred Loans
3. Grants
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Target Area
Census Tract 179.00 (see page 26)
Eligible Participants:
1) Property Owners with annual incomes which fall within prescribed limits. (pa
2) Absentee owners who agree to specific rental rates in order to qualify.
Eligible Improvements:
Interior/exterior/code repairs as eligible per Title I FHA Loans and Loan
Committee approval.
Staffing:
Housing and Redevelopment Department staff will implement and administer the
RRP .
Inquiries:
Interested citizens and applicants may contact:
City of Carlsbad
Dept. of Housing and Redevelopment
3096 Harding Street Carlsbad, CA. 92008
438-5611
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PROGRAM .DESCRIPTION
Types of Loans:
The loan program may be divided into these categories:
1. Low-interest property improvement loans
2. Deferred loans
3. Direct Grants
1. Low Interest Property Improvement Loans
The first category of assistance is the below market interest rate
(BMIR) loan program. Services for this program is arranged through
local lender's FHA Title I program. Basically, this program allows the City to increase the impact of its Community Development funds in
the target area through low-interest subsidized loans. Government insured
loans are provided at low-interest to property owners whs have been
approved by the City's Loan Committee. The City may lower the amount of
interest on these loans by making an up-front payment of an agreed upon
precentage of the total amount of interest which would be paid over the
entire term of the loan. For the first year, staff suggests that interest
rates be subsidized to 3.00% and 6.75%, or 10.00% depending upon the
income of the applicant. The maximum term of loans under this program
is fifteen years. The minimum loan amount is $1,000 and the maximum is $15,000
Eligibility for Below Market Interest Rate Loans
In order to be eligible the applicant must:
1. Own property in an eligible property rehabilitation census tract as
identified in the City's Federal Block Grant Application.
2. Be an owner-occupant of a single family dwelling or duplex.
3. Own a single family dwelling or multi-family dwelling, but not occupy
the unit (s) .
4. Have a satisfactory credit record and demonstrate a willingness and
the ability to repay the loan.
5. Receive approval from the City Loan Committee.
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The City will offer three levels of subsidy to applicants, depending on their
income levels:
1. For applicants whose gross annual income is less than 80% of the County
Median income for their family size, a 3% loan interest rate.
2. For applicants whose gross annual income is between 80% and 100% of the
County Median income for their family size, 6.75% loan interest rate.
3. For applicants whose income is between 100% and 120% of the County Median
income for their family size, a 10%-12% loan interest rate.
4. Absentee owners of low-rent properties, rate is to be determined by
Committee review.
All interest subsidies will be based on the prevailing FHA Title I Home Improvement Loan APR. For specific income requirements see page 25 of this report.
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2. Deferred Loans
The second category of assistance could be a deferred loan program.
This program would use Community Development Block Grant funds to
make direct long term, zero interest loans. A lien would be taken on
the property and the loan would be due in full at the time the property
changes hands. The minim deferred loan will be $500, the maximum will
be $7,500. No monthly payments will be required in this program. This
type of program has been demonstrated to be of great usefulness to the
elderly and others with very low fixed incomes.
Eligibility for Deferred Loans
Eligibility for these special purpose loans will be based on income criteria, target area location, and the nature of repairs. In order to be elibible the applicant must:
1. Own property in an eligible rehabilitation census tract as identified
in the City's Federal Block Grant Application.
2. Be an owner-occupant of a single family dwelling or duplex.
3. Be elderly or handicapped.
4. Have an income of less than 80% of the County Median income.
5. Receive approval from the City Loan Committee.
In these cases the deferred loan would be used only to correct code violations.
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3. Grants
The third category of assistance is the grants. Grants of up to $2,000 are available for owner-occupants residing in a one or two-unit structure.
They will be limited to the cost of correcting State Health and Safety
Code violations and to property which needs to be brought up to property
rehabilitation standards.
Eligibility requirements for Standard Grants
In order to be eligible for a repair grant, the applicant/household must have
all the following qualifications:
1. Be located in target area.
2. Be an owner/occupant of a single-family dwelling or a two-family dwelling.
3. Have an income under 50% of the County Median income.
4. Have existing within the subject home, conditions which are in violation
of the Health and Safety Codes of the State of California, the Uniform
Building Codes as determined by the City Housing Inspector or conditions
which are not up to property rehabilitation standards.
5. Be 100% disabled and/or be 62 years of age or older.
6. If a loan is made under the '?DEFFERED LOAN" program, any money used in
the standard grant will be added to the deferred loan.
Recipients of grants must sign a "Reimbursement Agreement'' which provides for
repayment of the grant if owner sells the property rehabilitated within five
years.
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RESIDENTIAL REHABILITATION PROGRAM LOANS-ABSENTEE OWNERS
Maximum amount of each loan will be determined by the City Loan Committee
according to the needs and request of each owner occupant. Adequate property
insurance will be required for all loans. All loans will be in accordance
with the individual bank agreement that has been agreed upon by the
City and the Lender.
Eligibility Requirements:
In order to be eligible for an RRP Loan the applicant must:
1. Own residential units in an eligible property rehabilitation census
tract as identified in the City's Federal Block Grant Application.
2. Have a satisfactory Credit record and demonstrate a willingness and ability
to repay the loan in accordance with all prescribed requirements needed
for an interest subsidy loan.
3. Receive approval of the City Loan Committee for a real property loan.
The local lender will follow all the prescribed requirements that have been
agreed upon in the "Loan Agreement Contract" between the City and Local
Lender.
Agreements:
1. Applicants must sign an agreement with the City of Carlsbad not to increase
the rent of the property rehabilitated except as stipulated in the
agreement.
2. Applicants must sign an agreement with the City not to sell a unit (Froperty
dwelling], which as been improved with RRP funds, for at least one year.
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CITY DEPARTMENTAL.FUNCTIONS
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The City of Carlsbad Housing and Redevelopment Department will administer the
Residential Rehabilitation Program. Other City departments will assist in
those areas appropriate to their jurisdiction.
Residential Rehabilitation Administrator
1. Contact and screen owners, determining the eligibility to participate
in program.
2. Advise and counselhomeowners about the rehabilitation process and
the allowable renovations and improvements.
3. Operate as a liaison between thehomeowners , bank, lender, contractor,
and the various City agencies to expedite the rehabilitation process.
4. Present complete loan package request to appropriate Loan Committee for approval and act as recorder.
5. Make final approval of loan with concurrence of Loan Committee.
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Building Department Inspector
1. Conduct "Code Inspection" of all residential rehabilitation applicants.
2. Itemize code discrepencies for property owner and RRP Administrator.
3. Perform "Permit" inspections of those properties being rehabilitated with
funding through Community Development sources.
Any repairs involving the public right-of-way, e.g., sewers and streets, will
be handled by the Engineering Department.
Commercial Lender
The Commercial Lender will perform all functions as agreed upon in the
"LOAN AGREEMENT CONTRACT" entered into with the City.
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COMMUNITY REHABILITATION 'LOAN 'COMMITTEE
The Community Rehabilitation Loan Committee is the final review board for
loan applicants. It shall consist of four members selected from the Community
and City government and staff. Tplis Committee shall review applications as
presented by staff and rule as to their acceptability and disposition.
The Loan Committee shall be comprised of:
1. A lending institution representative,
2. The City's Director of Finance or his designee.
3. The City's Building Department head or his designee.
4. The Chairman of the Housing and Redevelopment Advisory Committee.
The -function of the Loan Committee will be to approve/disapprove all loan
applications following their credit approval/disapproval by the lender. The
Committee must review and make disposition of all cases involving, but not
limited to, the following:
1. Requests for grants;
2. Hardship cases where hazardous conditions exist and the participant
cannot afford any loan, or a loan large enough to correct the unsafe
and/or unsanitary conditions;
3. Approval of deferred payment option, subsidized or partial payment
option, etc;
4. Situations where participant should be relocated (hazardous conditions, structures too far gone to salvage, etc.) ;
5. Disagreements between Housing Rehabilitation Coordinator and participant
regarding what repairs must be made first to correct unsafe and/or
unsanitary conditions;
6. Request to deviate from the interest rate schedule;
7. Participants whose loan applications have been denied by the bank;
8. Self-help repair projects ;
9. Final approval of successful bidder;
10. Absentee owner application.
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Procedure :
The Loan Committee will schedule meetings as approved applications are
received from the lender. When the Rehabilitation Administrator has
problem cases to resolve, he/she will request time on the agenda. Sufficient
information on each case will be sent out with the agenda no later than
three (3) days preceeding the scheduled Committee meeting.
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TROCESSING
RESIDENTIAL REHABILITATION LOANS
The Process: ~~ ~
Begin with the initial contact of homeowners and/or tenants and proceed
step-by-step to the final loan payments as follows:
1. Interview and advise the applicant on the general rehabilitation loan.
2. Have a complete information packet available for each applicant.
3. Determine eligibility of the applicant.
4. Verify applicant's income, housing expense and assets.
5. Advise applicant concerning the conditions under which a Rehabilitation
Loan is made.
6. Make an appointment with the property owner for an inspection by Building Department's Inspector.
7. After the initial inspection, notify the homeowner by mail of any code
deficiencies and advise the homeowner of the availability and benefits
of a Residential Rehabilitation Loan or Grant. If the homeowner shows an interest, make an appointment with them and start filling out required
forms in the applicant folder. The loan will then be subject to approval by
the Loan Committee for forwarding to appropriate private bank.
8. Prepare a preliminary work write-up and cost estimate of the rehabilitation
work which includes code violations, incipient violations, and property rehabilitation standards.
" WORK WRITE-UP "
1. A work write-up will be compiled, based on the property inspection report.
All health and safety code violations will be listed first, followed by
all items of work that are deemed substandard in accordance with Health
and Safety Codes of the State of California and Uniform Housing Code and
Property Rehabilitation Standards. Those work items that are mandatory
will be required to be completed by the homeowner and monies will be made
available as per other sections of this manual.
2. A preliminary work write-up will not contain details which have no
significant effect in cost, such as color, style or pattern. These
details will be selected by owner. Insulation of the space between
ceiling and roof is mandatory.
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9. Obtain the following documents: 1) formal specifications and cost
estimates; 2) as is appraisal; 3) Title report; and 4) credit report.
10. Review formal estimates and financial information to determine that the
case is workable.
11. Review contractor bid process with applicant. Inform applicant of
contract bid and proposal procedures.
12. Assist applicant in preparation of construction contract documents ad
obtaining bids and proposals from contractors.
13. Complete Rehabilitation Loan Application and submit for approval by the
Loan Committee.
14. After approval, prepare for and carry out loan settlement.
15. Perform necessary inspections and documentation through completion of
rehabilitation.
16. Make final payment to contractor for completed rehabilitation.
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CONTRACTING PROCEDURE
Once a loan has been approved by the financing agency, the Housing and
Redevelopment Department will begin the contracting procedure. Any denials
will be referred back to the Loan Committee for consideration. The contracting
objective is to obtain the best possible work at the least cost while enforcing
high performance standards. Therefore, all contracts will be reviewed by
the City.
The contract will be forwarded to the bank which will prepare the loan
documents and advise the City of the interest subsidy due. The applicant will
make payments in equal monthly installments, the first payment is due thirty
days after the note date. The City obtains all signatures and returns
documents to the bank along with the interest subsidy. The bank will forward
payment to the City in the form of a cashier's check payable to the borrower. The City will obtain written agreements that it may control the proceeds of
the loan. A fund control will be used for job continuity.
Contract Bid Procedures:
If the work to be done does not exceed $200.00, the RRP Administrator or the
homeowner can contact any journeyman and request a written cost for the work
to be completed. When the homeowner and W Administrator are satisfied with
the selection, that person/firm will be notified to start work. Upon
satisfactory completion and with concurrence of the homeowner and RRP Administrato:
the person/firm doing the work will be paid in full. Any work in excess of
$200.00 but less than $1,000 will still have the same requirements except the
person/firm doing the work must be a California State Licensed Contractor.
When the cost of work desired exceeds $500.00, at least three (3) qualified
contractors will be required to bid. "Qualified" meaning those contractors
who are licensed with the State of California. If the homeowner desires to
get their own bids, that is their prerogative. All bids will be requested
to be returned within twenty (20) days. Upon receipt of the bids, the
homeowner shall make the selection of the contractor and sign the contract
agreement.
Appraisals and Lot Book Report:
In accordance with the "Loan Agreement Contract" entered into by the Lender
and City.
Proceed Orders:
The applicant will be notified by the RRP Administrator when all requirements
have been filled and to proceed with the work. The homeowner should be
cautioned against signing any contract prior to final approval notification
by the RRP Administrator.
Disbursement :
Standard General Contractor Method. Payments to contractors will be processed
through a designated fund control system in accordance with their standard operating procedures. Monies will be disbursed by the bank to a designated
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fund control company upon authorization of the City RRP Administrator, as
required on the contract between the borrower and contractor. Borrower shall
pay one-half the required fee. The fee amount to be paid by the borrower may
be added to their loan.
The timing of the disbursement of funds will be on a progress-of-work basis.
Excess Funds:
Upon completion of all rehabilitation work specified in the contract, any
remaining funds or surplus will be credited to the borrower's loan account
to be applied on the loan's principal.
Financial Reporting:
The lender will, on a monthly basis, provide the City with financial statements
indicating the status of all outstanding loan commitments.
Loan Security, Loan Default and Foreclosure Procedures:
In accordance with "LOAN AGREEMENT CONTRACT" entered into by the lender and
City.
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PROPERTY REHABILITATION STANDARDS
When the following structural and maintenance violations present a dangerous-
or potentially dangerous condition which jeopardizes the health and safety
of the occupants and the longevity or fire safety of a structure, rehabilitation
is desireable to restore the structure to a safe, sound and sanitary condition.
In order to insure uniform rehabilitation, it is the intent of the City to
utilize the following criteria as a guide to property rehabilitation standards:
I. GENERAL ACCEPTABILITY CRITERIA
General. These general acceptability criteria apply to all existing
living units in the Community Development Block Grant Target areas and
units being rehabilitated with low-interest funds.
Local Codes and Regulations. The minimum standards set forth herein
above have been established to accomplish certain basic objectives for
rehabilitation purposes and shall not be construed as relieving the
property owner or the contractor of his responsibility for compliance
with any other local ordinances, codes and regulations.
Service and Facilities:
1. Utilities shall be independent for each property owner without
dependence upon other properties.
2. Independent facilities shall be provided for each living unit except
that common facilities such as laundry and storage space or heating
may be provided for each property.
3. Each building and each living unit within the building shall contain
provisions for the following:
a. A continuing supply of safe potable water.
b. Sanitary facilities and safe method of sewage disposal.
c. Heating adequate for healthful and comfortable living conditions.
d. Domestic hot water.
e. Electricity for lighting and for electrical equipment used in
the dwelling.
f. Provisions for the removal of trash and garbage and its sanitary
storage pending removal.
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Access :
1. Access to the property. Each property shall be provided with vehicular
access to and from the property at all times by an abutting public or private street. Private streets shall be protected by a permanent
easement.
2. Access to building walks and steps shall be provided for all weather
access to.the building and constructed so as to provide safety and
reasonable durability.
11. SITE CRITERIA
Site Criteria. To develop the individual site or group of sites so that obsolescence is overcome, and the development is appropriate and an asset
to the neighborhood in which it is located.
Site Improvements. The open space of each property shall provide for:
1. The immediate diversion of water away from buildings and disposal from
the lot.
2. The prevention of soil saturation detrimental to structures and lot use.
3. Where needed, appropriate paved walks, parking areas, driveways, exterior steps and landscaping.
Objectives. To assure a living unit which provides for a healthful
environment and complete living facilities arranged and equipped for a
suitable and desirable living condition commensurate with the type and
quality of the property in question. To provide each living unit with
space necessary for suitable living, sleeping, cooking, and dining
accommodations, laundry and sanitary facilities.
Room Sizes. Assure that room sizes are in accordance with Uniform
Housing Code.
Closets and General Storage. Clothes closet space should be provided
within bedrooms or conveniently located nearby.
Exterior Doors. Exterior doors shall have safe locks.
Attic. Attics and underfloor areas shall have proper access.
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111. UNACCEPTABLE FEATURES. Features which are unacceptable in any property,
and compromise one or more health and safety code violations.
Electrical Wiring
1. Exposed live electrical conductors.
2. Over-fused circuits.
3. Extension cords used as integral part of system.
4. Extension cords exposed to unusual wear.
5. Lack of grounding or improper grounding.
6. Conductors which have deteriorated or damaged insulation.
7. Improper clearance of overhead conductors.
8. Inadequate water-proofing of system.
Plumbing
1. Cross connections.
2. Inadequate or damaged fixtures, traps, and/or. vents.
3. Leaks in system (gas, water, or sewage).
4. Lack of an approved sewage disposal system.
5. Lack of approved gas shutoff valves.
6. Non-approved type fixture and gas appliance supply connectors.
7. A non-potable water supply.
8. Lack of hot and cold water supply to fixtures.
Foundat ion
1. Insufficient number or size of screened foundation vents.
2. Missing sections of foundation material.
3. Decayed foundation boards or wood foundation underpinning.
4. Surface spalling or cracks in foundation walls.
5. Untreated wood in contact with ground.
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Fire Safety
1. Inadequate exits.
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2. Accumulation of flammable debris in building.
3. Accumulation of trash, debris, and weeds-exterior.
4. No smoke alarms or' other fire alarm.
Mechancial Equipment
1. Damaged or deteriorated space heater fire box.
2. Improper appliance connector.
3. Unvented type space heater.
4. Improper or non-existent gas appliance fuel shutoff valve.
5. Vents serving gas-fired appliances are missing, damaged, deteriorated, or improper clearance from combustible materials.
6. Temperature and/or pressure relief valve inoperative or missing on
water heater.
7. Non-approved or inadequate space heating system.
8. Inadequate combustion air for gas-fired appliances.
Floor Structure
1. Excessive deflection.
2. Structural members (floor joists, girders, subflooring) excessively
damaged by termites and/or fungus.
3. Absorbent flooring in area of bathroom fixtures.
4. Torn carpet or missing tile flooring.
Roof Structure
1. Missing, decayed, or damaged roof sheathing, bracing members and roof
rafters.
2. Roof covering deterioated or damaged.
3. Excessive deflection of ridge or any portion of system.
4. Inadequate roof flashing around vents or fireplaces allowing water
intrusion.
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5. Deteriorated fascia boards.
Exterior Walls
‘e Exterior covering damaged or missing to a degree that the walls,
windows, or doors do not protect occupants from the elements.
2. Walls lean, list or buckle due to structural damage or failure.
3. Damaged, deteriorated, or missing mortar.
4. Parapet and appendages on buildings erected prior to 1933.
5. Broken or missing window glass, doors and screens.
6. Weathering of exterior wall covering due to lack of paint.
Interior Walls and Ceilings
1. Walls and ceilings that lean, list or buckle.
2. Loose, crumbled, or missing interior wall and ceiling coverings.
3. Filthy, torn, or peeling wall covering.
Stairways
1. Risers in excess of 8 inces, run less than 9 inches, or variance
exceeds 3/16” with other riser or tread in same system.
2. Damaged, loose, or missing handrails.
3. Damaged, deteriorated, missing, or improperly anchored
structural supporting members.
4. Damaged tread covering or treads which do not have non-skid surfaces.
Light and Ventilation
1. Inadequate natural or artificial lighting.
2. Absence of or improperly functioning windows.
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Various
Lack of general environmental sanitation of external premises.
Kitchen Equipment
Lack bf stove or refrigerator. Replacement of existing stove or
refrigerator if existing equipment is unsafe or unsanitary.
Insulation
Lack of insulation in walls and attic.
Items not covered above but which are in violation of the Uniform
Housing Code.
IV. STANDARDS FOR MATERIALS AND PRODUCTS
Specific requirements of new materials and products used as replacements
or additions to dwellings being rehabilitated will be governed by the
applicable codes currently utilized by the City of Carlsbad. In the
rehabilitation of older structures, materials and methods shall not be
limited to current code restrictions.
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LOAN PROCESS FLOW CHART
a
FINANCIAL COUNSELING (lender) REHABILITATION COUNSELING (5
: > (START)
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Credit Application Contact/Outreach
Credit Verification
1 '1 y Property Inspection 1 L Financial Capacity 4 Work Write-up Cost Estimate
5==j Staff Conference
Owner Agreement
m Tit le Search, J
Appraisal, etc.
\* Contract Bids
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Loan corn- Contractor Selection Bank Approval and Approval > * I I Conference/Signature -
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Progress Payments L Interim Inspections
I i /-I Job Completion h e' I1
Loan Servicing/
Counseling Construction Complaints
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GLOSSARY
The following are definitions of various terms as used with respect to a
Rehabilitation Loan or Grant.
Absentee Owner - Owner of single family or multi-family unit (s) located
in target area, but not actually residing in unit.
Amortize- To repay the principal and interest of a loan in periodic
installments so that at the expiration date of the loan agreement, all of the loan will have been repaid.
As-Is Appraisal- The highest price a property will bring in its kxisting
condition if exposed for sale in the open market , allowing a reasonable
time to find a purchaser who buys with-knowledge of all uses for which it
is capable of being used or adapted. The value must take into consideration
the neighborhood upgrading expected as a result of the local Code Enforcement
Program and targeted rehabilitation activities.
Building Department- Carlsbad City Deparment responsible for performing inspections of rehabilitation loan households.
Community Development Block Grant- The Federal Housing and Community Deve1opmen.t
Act of 1974 Drovides monies to cities and counties that will be utilized to -~ A implement a wide variety of local programs. Under Title I of the Act (Block
Grant Program), a portion of the funds allocated to local governments may be
set aside for property rehabilitation and neighborhood conservation.
Date Certain- The date and time that a loan is scheduled for settlement. ~~ ~ ~
Default- Failure of a mortgagor to perform in accordance with the terms of
a mortgage.
Deferred Loan- A non-interest bearing loan to low-income persons who cannot
afford to make loan payments for part or all of the amount needed to rehabilitate
their homes. As long as at least one of the applicants who was awarded the
Deferred Loan, remains in the dwelling, the Deferred Loan does not require
repayment.
Delinquency- When a mortgagor is in arrears in his mortgage payments.
Elderly- A one or two-person household headed by a person over 62 years of age.
Escrow Accounts- Accounts established at loan settlement providing for payment
of taxes, ground rent, and insurance by the borrowers:
a. where the community is the first mortgagee
b. where there is no prior provision for these items in the
event that the community is second mortgagee 22
0 a
c. when such an account is determined by the Local Loan
Approving Officer to be essential to the security of
the loan.
Forebearance- A written agreement between the mortgagor and the HRD that
allows the mortgagor to resolve his delinquency by resuming the regular
monthly payment plus a portion of another payment until the mortgage is
brought current.
Foreclosure- The legal proceeding that terminates the mortgagor's ownership
of property covered by the mortgage.
Handicapped- Any person with a physical disability of long, continued, or
indefinite duration whose mobility and functioning are hampered by a dwelling
unit without special modifications.
Hazard Insurance- An insurance coverage for loss of property due to fire and
other hazards.
Grant- Up to $2,000 available to owner-occupants for correction of code
deficiencies. Income requirements.
Housing and Redevelopment Department- City Department which is the administering
agency for the Residential Rehabilitation Program.
Incipient Code Violations - An element in a structure that has not been
cited as a code violation, but the element is in early states of deterioration
and will deteriorate into a code violation within a short period.
- Lien- A elaim against property which entitles the person holding the lein
to take appropriate legal action to satisfy the claim.
Loan Approving Committee- The body responsible for approving loans and other
benefits, including corrective actions for delinquencies and defaults.
Owner-Occupied Property- A property used entirely for residential purposes that is occupied by the owner.
Principal- The original amount of a loan or sum of money on which interest
will be paid.
Satisfaction of Mortgage- A legal document which discharges a debt obligation
against a property upon final payment as stipulated in a mortgage, promissory note, or lien.
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Target Area- Federal Census Tract 179.00 roughly located west of 1-5 and
east of Railroad tracks between Buena Vista and Agua Hedionda Lagoons in
the City of Carlsbad.
Title Report- A written report which indicates the owners of record of the
property and any encumbrances against the property.
Warranty Deed- A legal instrument that conveys title, rights and possession
of a property.
Work Write-up and Cost Estimate- A statement prepared by the Housing and
Redevelopment Department based on the property inspection report that itemizes
all rehabilitation work to be done on the property and includes an estimation
of the cost to correct each item.
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RRP INCOME LIMITS
0
Percentage of County Median Income:
Family Size
1
2
3
4
5
6
7
8
9
10
11
12
100%
15,000
17 y 120
19,250
21,370
22,750
24,060
25,440
26,750
28,490
30,340
32,310
34,410
80%
12,000
13,700
15,400
17,100
18,200
19,250
20,350
21,400
22,790
24,270
25 y 850
27,530
50%
7,500
8,560
9,625
10,685
11,375
12,030
12,720
13,375
14,245
15 y 170
16 y 155
17,205
Residential participants must have title to the property on which the rehabilitation loan is taken for a minimum of one year prior to and following
application. In addition, absentee owners are eligible for below market
interest rate loans. Owners of rental property are to sign an agreement not
to change rental rates in excess of Fair Market Rents.
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AGREEM d ' FOR MANAGEMENT AND IMPLEPJENTATION
OF A COMMUNITY DEVELOPMENT BLOCK GRANT PROJECT
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This AGREEMENT entered into by.and between the City of
Carlsbad (hereinafter referred to as "City"), and the COUNTY
OF SAN DIEGO (hereinafter referr.ed to as "COUNTY"), on
WITNESSETH:'
WHEREAS, there has been enacted into law Public Law 93-
383,'the Housing and Cornunity Development Act of 1974, the
primary objective of which is the development of viable
urban communities by providing federal assistance for community development activities in urban areas; and
..
WHEREAS, County as an. "urban county" as that term is
used in the Act, is authorized to-apply for and accept
Community Development grants with respect to its unincorporated territory.and with respect to included units of general local government with which it has entered into Cooperation Agreements to undertake or to assist in the undertaking of
esseiltial community development and,housing assistance
activities; and .
WHEREAS, City is a unit of general local government
located within.the territorial boundaries of the County; and
,. WHEREAS, on January 25, 1977 City and County entered into a cooperative agreement for submission of-a proposal to
the Department of Housing and Urban Development (hereinafter referred to as "HUD") :
WHEREAS, pursuant to that Cooperation Agreement County
incorporated the City's proposal for the project described in Attachment "A" hereof (hereinafter referred to as the
"Project") into the County's application which was submitted to HUD: and
WHEREAS, the Cooperation Agreement provided that in the
even,t that the City proposal is approved by HUD as part of the County proposal and Community Deve.1opment ,Block Grant is
made to the County on account of such proposal the parties
heretofore will enter into a supplementary agreement providing for implementation of the City proposal by the County, the
City or by cooperative action of the two agencies; and
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WHEREAS, IfuD has- approved the County application for
Community Development Block Grant funds; and
WHEREAS, it is the desire of the City and the County
that the Project be implemented by the City; and
WHEREAS the City shall undertake the same obligations - to the County with respect to the Project in tpe County's
. aforesaid application for participation in the Community
Development Block Grant program; NOW THEREFORE
IT IS AGREE3 AS FOLLOWS:
1, WORK !FQ BE PERFORMED: City agrees to implement
..
the Project described in Attachment "A" .hereof (entitled "Scope of Work") fully in accordance with the terms of the
application made by the County to HUD for funds to carry out
the Project and the assurances (HUD Form No. 7068) which
application and assurances form is hereby incorporated by reference into this agreement fully as is set forth herein. City agrees that.it undertakes hereby the same 'obligations
to the County that the County has undertaken to HUD pursuant
to.said application and assurances, City to hold County
respect to HUD oi accqunt of any failure on the part of City to comply with the requirements of any such obligation. The
obligations.undertaken by City include, but are not limited to, the obligation to comply with each of the following:
. were submitted concurrently with the application, The
- harmless against any indemnity which it may suffer with
(a) ' The Housing and Community Development Act' of
1974 (Public Law 93-383); and the Housing and Community Development Act of 1979;
(b) Regulations of the Department of Housing and
Urban Development relating to Community Development Block Grants (Title 24, Chapter V, Part 570 of
the Code of Federal Regulations commencing with
Section 570.1) ;
(e) Regulations of the Department of Housing and
Urban Development relating to environmental review i
procedures for the Community Development Block
the code of Federal Regulations, commencing at
Section 58.1) ;
' ' Grant program .(Title 24, Subtitle A, Part 58 of ',
1. .
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(d.) Title VI of the Civil Rights Act of 1964 (public Law 88-352); Title VI11 .of the Civil Rights Act
. of 1968 (Public Law 90-284); Section 109 of the
Housing and Coinmunity Development Act of 1974; ,
Section 3 of the Housing and Urban Development Act of 1968; Executive Order 11246; Executive
Order 11063; and any HUD regulations heretofore.
issued or to be issued to implement these authorities relating to civil rights;
(e) The Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 and
.the Code of Federal Regulations, Title 24, Part
. regulations adopted to implement that Act in
42;
(f) Federal Management Circular 74-4 entitled "Cost
Principles Applicable to Grants and Contracts
With State and Local Governments" and Federal
Management Circular 74-7 entitled '*Uniform
Administrative Requirements for Grants in Aid to State and Local Governments." Reference is
particularly made to the following appendices:
' (1) .Appendix G of Federal Management Circular
. =. 74-7 relating to financial management systems which meet Federal standards for fund control and accountability;
-(2) Appendix N of Federal Management Circular
74-7 pertaining to property management;
.. (3) Appendix 0 of Federal Management Circular
74-7 relating to procurement standards;
.(4) Appendix B of Federal Management Circular .. 94-7 relating. to bonding and insurance;
..
(9) The following laws and reguiations relating to
preservation of historic places: Public Law
89-665 the Archeological and Historical Preservation
Act of 1974 (Public Law 93-291), and Executive Order 11593 including the procedures prescribed
'by the Advisory Council on Historic Preservation 'in 36 Code of Federal Regulations, Part 800;
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(h) The Labor Standards Regulations set forth in
Section. 570.605 .of 24 CFR, Part 570;
(i) The Architectural Barriers Act of 1969 (42 U.S.C. Section 4151);
(j) The Hatch Act relating to the conduct of political .. activities (Chapter 15 6f Title 5, U.S.C.):
(k) Thr Flood Disaster Protection Act of 1973 (Public
Law 93-234 and the regulations adopted pursuant
thereto) 24 CFR, Chapter X Subpart B; ..
(1) The Clean Air Act (42 U.S.C. Section 1857 et seq.)
. and the Federal Water Pollution Control Act, as
regulations adopted pursuant thereto (40 CFR,
Part 15) .
.. amended (33 U.S.C. Section 1251 et seq.) and the
..
2. COMPENSATION: County agrees to pay City total
Compensation for implementation for the Projects described
herein project costs not to exceed the sum of $79,189,
3. COMPENSATION SCHEDULE: County agrees to pay City
. and submittal by City of a statement of actual expenditures incurred, supported by appropriate documentation provided,
however, that not more than 90% of the total agreed compensatio will be paid during the performance of this Agreement. The balance due shall be paid upon certification by City that
all of the required services have been completed. Payment
by County is not to be construed as final in the event that
HUD disallows reimbursement for the project or any portion
..- monthly progress payments of actual costs, upon certification
' thereof.
4. Term: This Agreement shall commence when executed by both parties hereto and shall continue in full force and effect until terminated as provided herein. The Agreement
may be terminated,by either party after 30 days notice of intention to terminate has been given to the other party, provided, however, that no notice of termination given by City. shall be effective unless HUD has agreed to release
County from its obligations pursuant.to the Project.
Alternatively, the Agreement will be automatically terminated in the event that the United States Government terminates
the Community Development Block Grant program or terminates
the project, which is the subject of the Agreement.
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5. Termination of Agreement for Cause: City and
County recognize that the County is the governmental entity ' which executed the Grant,Agreement received pursuant to its
application and that it has thereby become legally liable
. and responsible thereunder for the proper.performance of the
project." If through any cause City shall fail to fulfill in timely and proper manner its obligations under this Agreement to undertake, conduct, or perform the project identified in
this Agreement, or if City shall violate any of the cgvenants,
. agreements, or stipulations of this Agreement, County shall thereupon have the right to terminate this Agreement by
giving written notice to City of such termination and specifying
the effective date thereof at least 5 days before the effective date of such termination, and also specifying with particularity
the nature and extent of the alleged cause. Upon receipt of such a notice of termination for cause from.County, the City
shall be afforded a period of 30 days in which period of time-County may either confirm or rescind its said notice.
Notwithstanding the above, City shall not be relieved of
liability to County for damages sustained by County by virtue of any breach of the Agreement by City and County may
withhold any payments to City for the purpose of set-off
un.til such time as the exact amount of damages due County
and all claims for damages for compensation arising under
this Agreement except as set forth in this section in'the
event of such termination. Notwithstanding any other provisions of this contract;City, by entering into this contract and
the previous Cooperation Agreement, does not waive ,or impair to any degree whatever immunity from suit and/or damages to which it may legally be entitled.
-
- from City is determined. City hereby expressly waives any
6. Contract Administration: The Housing and Community . Development Director shall administer this Agreement on
: behalf of the County. The City Manager sha.11 administer
thisAgreement on behalf of the City. City agrees to supply to County within a reasonable period of time after request,
by the County's contract administrator to audit performance
of this Agreement.
.. progress reports or other documentation as shall be required
7. RECORDS AND REPORTS: The City shall maintain records and make such reports as required by the Housing and
Community Development Director to enable the County to analyze utilization of the program. All records of the City
respecting this Project shall be open and available'for
inspection by auditors assigned by HUD and/or the County on reasonable notice during the normal business hours of the
City.
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. 8.. INDEMNIFICATION: To the extent authorized by law,
each party shall at all times indemnify and save harmless- . .
the other party against and pay in full any and all loss,
damage or expense that 'the other party may sustain, incur, or become liable for resulting in any manner from, or connected
with, the implementation of this Project, including any
IOSS, damage or expense arising out of, loss of, or damage
loss, damage or expense and claims for loss, damage or 'expense resulting in any manner from the negligent act 01:
acts of the other party, its contractors, officers, ager,ts,
or employees.
. to property and injury to or death of. persons excepting any
9. NOTICE: Any notice or notices required or permitted to be given pursuant,to this Agreement may be personally. served on the other party by the party giving such notice or may be served by certified mail. Notices hereunder shall be
sufficient if sent by certified mail, postage .prepaid to:
CITY: COUNTY: ' ..
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City Manager Clerk of the Board of Supervisors 1200 Elm Avenue County Administration Center Carlsbad, California 1600 Pacific Highway
. 92008 San Diego, California
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92101
IN WITNESS WHEREOF, the parties have executed this
'agr'eement on the year and day first above written.
. CITY OF CARLSBAD COUNTY OF SAN DIEGO
BY /' g&edBy- ..- . . ' '.
RONALD C, PACKARD, eyer
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,A 3' * & , a *ATTACHMENT "A" c
.. . . SCOPE OF WORK
The work to be accomplis'hed by the City of Carlsbad in
their Residential Rehabilitation Program within Census Tract
No. 179.00 will consist of: - The City will make Loans avaixable at Below Market Interest
rates, Deferred Loans and Grants. Eligible participants
will be Pioperty owners with annual incomes that are
within the attached prescribed Limits and Absentee Owners .who agree to specific rental rates in order to qualify, The City will also establish a Loan Committee to review each of the Loans. Eligible improvements will consist
of interior, exterior and code repairs which are
eligible under Title I, FHA Loans-
,.
Below Market Interest rates (Low Interest Loans) will be from a minimum $1,000 to a maximum of $15,000 for a
period of fifteen years. The .interest rates will be
variable dependent upon the Applicants income.
Deferred Loans will be for a minimum of $500 to a
maximum of $7,500. A Lien will be taken on the property
is sold.
_- and the Loan will be payable in full when the property
Grants will be available to owner-occupants for a
, maximum of $2,000. A grant will be limited to covering
Uniform Housing Code violations and to property which needs to be brought up to Rehabilitation standards.
The City will operate the program in accordance with
the June 1981 "Residential Rehabilitation Program",
which by reference is incorporated herein. The City
also agrees that a minimum of 60% of the total loans
made within the target area will be for persons of low income; i.e., 50% to 80% of median income.
. 4.
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RRP INCO3E LIblITS
percentage of County Median Income: -
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Family Size 100% SO% ' ' 50% I: -
" i .
1 .' 15,000 12,000 . 7,500
2: -2 .2 17,120 13,700 8,560.
1 3 . 19,250' 15,400 9,625
4
5
6
21,370
22,750
24,060
17,100
18,200
19,250
10,685
11,375
12,030
. .. .
* 7. . .25,440 . 20,350 12,720 :- .. .. z- 8 . ' 26,750 . 21,400 13 o 375
9 ' 28,490 .. 22,790 14,245
10 30,340 24,270 15, 170 '
- 11 32,310 25,850 16,155
I 12 34,410 . 27,530 .n 17,205
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i . kesidential participants must have title to the property on which the
i rehabilitation loan is taken.for a minimum' of one year prior to and fo1loi.ring.
application, In addition, absentee owners are eligible for below market 1 . interest rate loans. Owners of rental property are to sign an agreement not
. to change rental rates in excess of Fair Market Rents.
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