1997-305A \OPTRECON 0
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
APPROVING GUIDELINES FOR OPERATION OF THE CITY OF DENTON OPTIONAL
RECONSTRUCTION PROGRAM AND ELIGIBILITY CRITERIA, AUTHORIZING EXPEN-
DITURES IN EXCESS OF $15,000 FOR PROJECTS MEETING PROGRAM GUIDE-
LINES,AND CRITERIA, AND PROVIDING FOR AN EFFECTIVE DATE
WHEREAS, the City Council of the City of Denton recognizes the
need to assist low and moderate income families in securing safe,
sanitary and decent housing, and
WHEREAS, the City of Denton participates ~n a Housing Rehabili-
tation Program administered by the City of Denton Community Devel-
opment Office and funded through a federal grant from the Depart-
ment of Housing and Urban Development, NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the City Council approves the Optional
ReconStruction Program Guidelines and Optional Reconstruction
Program Eligibility Criteria whlch is attached to and made a part
of this ordinance for all purposes as Exhibit "A" and authorizes
the C~ty of Denton Community Development Office to administer this
program
S~CTION II That it authorizes the expenditure of funds in
excess of $15,000 by the Community Development Office for pro3ects
meeting program guidelines and criteria, sub3ect to compliance with
competitive bidding laws where applicable
~ III That this ordinance shall become effective ~mmed-
lately upon its passage ~/~d ~~F~
PASSED AI~D APPROVED thls the ay of _ , 1997
JACK MILLER, MAYOR
CITY OF DENTON
OPTIONAL RECONSTRUCTION
PROGRAM
GUIDELINES- 1997/98
TABLE OF CONTENTS
I P~RPOSE Page 1
II DESIGNATED AUTHORITY Page 1
III IMPLEMENTATION PROCESS Page 2
IV ELIGIBILITY REQUIREMENTS Page 3
v FEASIBILITY FOR RECONSTRUCTION Page 5
VI SELECTION OF RECIPIENTS FOR ASSISTA};CE Page 5
VII ALLOWABLE EXPENSES AND CATEGORIES OF FINANCIAL ASSISTANCE Page 5
VIII REHOUSING AGREEMENT Page 7
IX FINAL INSPECTION - CERTIFICATE OF OCCUPANCY Page 7
APPENDIX I PROGP3%M INCOME RANGE TABLE Page 8
APPENDIX II APPLICATION AND TEMPOP~Y RELOCATION QUESTIONNAIRE Page 9
APPENDIX III REHOUSING AGREEMENT FOR Applicants Page 10
APPENDIX IV TD. RGET REHABILITATION NEIGHBORHOODS MAP Page 12
CITY OF DENTON
OPTIONAL RECONSTRUCTION PROGRAM
GUIDELINES
Unless ~erein stated otherwise, the general operating procedures contained in the
City og Dsnton's Community Development Homeowner Rehabilitation Progro~
Guideli~es will be followed
A The City of Denton, Texas, will provide assistance necessary to
accomplish the reconstruction of dwellings not feasible for rehab~l~ta-
tlon The Optional Reconstruction Program will provide funds to
demolish ex~st~ng dzlapldated dwellings and reconstruct adequate,
decent, safe and sanitary replacement dwellings In addition, the City
will also promote the eliminatlon of slum and blight that exists in the
City
B Reconstruction payments and assistance w~ll be carried out under the
City of Denton's Community Development Program as an eligible expense
from project funds Assistance shall be subject to the ava~labll~ty
of grant funds and U S Department of Housing and Urban Development
(HUD) implementing regulations Adm~nistratlve procedures will be
modified to meet any change ~n rules and regulations of HUD which may
occur over t~me
II DESIGNATED AUTHORITY
A Administrative authority for implementation of the program w~ll rest
w~th the City of Denton's Community Development Off,ce This office
will serve as the approving office for Rehousing Agreements and for
contractual and budget changes as needed for prelect completzon
B The Community Development Administrator w~ll have the respons~b~llty
for final determination of the amount of reconstruction assistance to
be made available to Individual applicants in accordance with the
Implementing procedures
C The Community Development Adm~nlstrator will be responsible for
approval of applicant ellglbility for the program and final approval
of selection of applicants to be assisted Th~s w~ll be based upon
relative need of applicants on the City's l~st of houses which have
been determined ~nfeas~ble for rehab~lltat~on under the C~ty's
Homeowner Rehabilitation Program
Revised 8/20/97 Program Guidelines - Page i
III IMPLEMENTATION PROCESS
Steps in zmplementlng the program will be as follows
A Community Development Office maintains list of applicants for Homeowner
Rehabilitation Program assistance where a determination has been made
that the structure is not feasible to rehabilitate to minimum standards
under the City's Homeowner Rehabilitation Program
B Applicant is notified that the rehabilitation of the structure has been
determined to be infeasible Eligibility requirements for the Optional
Reconstruction Program must be met for applicants to be placed on the
Optional Reconstruction Program wa~tlng l~st
C Staff evaluates applications for reconstruction assistance as specified
in Section VI Staff processes applications as possible under funding
and staff limitations
D Applicant is informed of available assistance
E Applicant submits a Replacement Housing Assistance Request, acknowledg-
ing receipt of information explaining the City's program, and request-
ing reconstruction assistance to enable applicant to obtain suitable
and adequate housing
F Community Development Staff determine whether or not approval of
applicant's Replacement Housing Assistance Request reasonably may be
expected to result in the successful and feasible rehousing of the
applicant In cases where the applicant's general health or income
level would preclude his or her adequate and responsible operation of
a replacement dwelling, and/or cases in which the costs of the
replacement dwelling would be substantially above the costs of typical
cases, and to the extent that the probability of the City reaching its
Community Development Program goals would be endangered due to cost
overruns, the applicant's request may be denied The applicant will
be notified in writing of the determination and, if the request is not
approved, the reasons for denial When the determination is approval
of the applicant's request, a Notice of Approval will be sent informing
the applicant that the City is authorized to enter into a Rehousing
Agreement with the applicant for a specified Replacement Housing
Payment determined appropriate by the city pursuant to 1ts Reconstruc-
tion Policy Prior to any agreement being executed between the
applicant and the City, the Community Development Office will comply
with the public disclosure and notification/authorization to and from
HUD requirements according to 24CFR Part 70, Sectlon 104(d), Recon-
struction and One-for-One Replacement Housing Requirements
G A RehouslngAgreement is executed between the applicant and the City,
under the terms of which the applicant agrees to move permanently and
voluntarily from the dwelling on or before a specified date
Revised 8/20/97 Program Guidelines - Page 2
Com~unlty Development Staff will provide counseling and assistance as
needed to approved applicants zn order to facilitate the applicant's
rehouszng, including referrals to builders, suppliers, etc
I The applicant and the Community Development off~ce agree to the
arrangement and method of the approved payments, the applicant will
execute a contract with a bullder for the selected replacement
dwelling The applicant w~ll also contract for the demol~tlon of the
substandard dwelling and for lot and s~te clearance and preparation
J When appropriate, the applicant voluntarily vacates the substandard
dwelling
K The replacement dwelling is constructed and appropriately inspected
by the City to determine adequacy and compliance with C~ty codes
L City certifies that the replacement dwelling ~s decent, safe, and
sanitary and ready for occupancy city ~ssues a f~nal building
~nspectlon
M Applicant accepts replacement home
N All remaining approved payments are made to applicant at a formal
closing ceremony, and applicant acknowledges receipt of payment
schedule
O, Upon completion of all actions in regards to reconstruction, applicant
acknowledges zn writing that all payments, assistance, and conditions
of the Rehousing Agreement have been received to the applicant's
satisfaction
P Applicant occupies replacement structure
IV ELIGIBILITY REOUIR~MENTB
Eligibility for reconstruction payments and assistance shall be estab-
lished as follows
A, Applicant must have applied for rehabilitation assistance under the
City of Denton's Housing Rehabilitation Program
B Applicant must have been rejected for rehabilitation assistance on the
grounds that the applicant's occupied dwelling was not feasible to
rehabmlltate
C, Applicant must be an owner occupant of the dwelling for which rehabll~-
tatlon assistance is requested and reside within a Target
Rehabilitation Neighborhood (see Appendix 4) The dwelling must be the
applicant's principal residence for a minimum of 8 years prior to the
submission of a completed application for assistance
Revmsed 8/20/97 Program Gumdellnes - Page 3
Applicant must present proof of ownership by General or Special
Warranty deed City staff will verify proof of ownership with title
searches as necessary on the property where the dilapidated structure
exists and/or the site where the replacement housing w~ll be built
In situations where the applicant does not have clear t~tle, attempts
to clear the title wzll be ~nlt~ated w~th the assistance of the
applicant When meeting th~s guideline requirement is not feasible,
applicant must present proof of ownership (General or Special Warranty
Deed) showing fee simple title of 50% or more ownership in the
applicant's name (All other t~tle holders will be requested to
relinquish their title rights to the applicant ) Applicants with less
than 100 percent fee s~mple t~tle must have a continuing r~ght to
occupy the premises Applicant must provide documentation for all
ex~st~ng l~ens All current lienholders w~ll be requested to subordi-
nate their l~en position to the C~ty
Mortgage note balance cannot exceed 50 percent of the property's
appraised value as set by the Denton Central Appraisal Dlstrzct
The City w~ll relinquish f~rst l~en position only to a mortgage lender
In all other cases, llenholders w~ll need to relinquish f~rst lien
pos~t~on to the C~ty
Applicants shall provzde complete and accurate ~nformatlon regarding
their household composition, household ~ncome, and housing s~tuat~on
Failure to disclose information which may affect ellg~b~l~ty require-
ments shall also constitute fraud Applicants shall be required to
make full restitution to the City in the event Community Development
services are provided to applicants who provided inaccurate or
incomplete lnformat~on in order to meet eligibility requirements
Requests for further assistance w~ll be den~ed unless restitution ~s
made in full
Applicants must demonstrate that their ~ncome exceede their projected
housing expenses
Applicants will agree to conform with Denton Code Enforcement requests
prior to being determlned eligible for replacement housing assistance
Applicants agree to maintain dwelling and exterior grounds ~n accor-
dance wlth applicable city ordinances
Applicants wzll be encouraged based on lnd~v~dual needs to attend
Community Development applicant educatlon classes, w~th emphasis being
placed on maintenance, budgeting, cost effective decorating, and
responslb~l~t~es of home ownership when available
Must apply to a participating lender and be eligible for a loan to
cover part of the cost of the reconstruction
Revised 8/20/97 Program Guidelines - Page 4
V FEASIBILITY FOR RECONSTRUCTION
Feasibility for reconstruction is based on determining all related costs
to complete a reconstruction project Total project costs cannot exceed
the maximum amount allowed as set by the current Section 221(d)(3) Lowest
Home Per-Unit Subsidy Limits for the State of Texas as set by the
Department of Housing and Urban Development (HUD) Project costs 1nclude,
but are not limited to, the cost of demolition, s~te preparation, cost of
replacement dwelling, t~tle search fee, and/or Clty-funded interest buy-
down for bank financed portion of the pro3ect
VI SELECTION O0 RECIPIENTS FOR ASSIETANCE
A Initlal recipients of this program will be taken from the list of
applicants residing in structures determined to be lnfeas~ble to
rehabzlztate Additional rec~plents w~ll be added during subsequent
operation of the City of Denton's Housing Rehabllltat~on Program
B The number of rec~plents to receive assistance w~ll be sub]ect to
availability of funds
C Applicants w~ll be placed on a wa~tlng list for reconstruction
assistance based on the t~me and date they orlg~nally applied to the
Community Development Office for rehabilitation assistance
VII A%LOW~BL~ EXPENSES AND ~ATE~ORIES OF FINANCIAL ASSISTANCE
A The primary form of asszstance to be provided wlll be the use of
Federal HOME grant funds to pay for the cost of the replacement
dwelling and costs related to replacing a substandard unit
B NO reconstruction w~ll net fewer bedrooms than the number of bedrooms
a family has before reconstructzon Room add~tlon(s) to relieve
serzous overcrowdzng may be eligible only with the approval of the
Communlty Development Admzn~strator In general the C~ty will follow
the standards consistent w~th the appllcable Housing Quality Standards
described at 24CFR 882 209(b) (2) when considering the number of
bedrooms needed to avoid overcrowding
S oX 0ecunants in Household
~ Minimum Maximum
2 i 4
3 3 6
4 6 8
C The C~ty of Denton has FOUR FINANCIAL ASSISTANCE CATEGORIES for those
who qualzfy for the Optlonal Reconstruction Program These categories
are based on the Oualifvin~ Income Limits and Ranges ~or the City of
Revised 8/20/97 Program Guidelines - Page 5
Denton~s Federally Assisted Proarams (see appendix I to these ~uide-
lines for current income limit ranges) A description of the financial
assistance categories and their requirements are found ~n Section III
of the Homeowner Rehabilitation Guidelines
Allowable expenses w~ll include
I Cost of total demolltLon and clearance of the dilapidated
structure, lot clearance, and preparation of ]ob sate for new
replacement dwelling
2 Cost to reconstruct safe, sanitary, decent replacement dwelling
3 Other expenses the Community Development Office determines to be
necessary to facilitate the reconstruction of the substandard
property
Community Development staff w~ll also provide assistance and counseling
to applicants as needed, including the following
i Information on the program and rehousing options available
2 Assistance an soliciting bids for replacement housing
3 Assistance an contractual compliance between applicant and
contractor
4 Asszstance an ~nspect~on of construction of replacement dwelling,
if applicable
5 Assistance to applicant an evaluation of future maintenance
burdens of various housing options
If, after the loan payback begins, a household experiences a permanent,
substantial loss of household income, a applicant can request a review
to adjust their current level of assistance However, ~n no ~nstance
will the payable loan portion be reduced below the m~nlmum 10 percent
payable loan level The loss of income must be from an income-earning
aDDlieantfs) whose income wac used in determining the originel loan
asstst~ee ~etegory Loss of employment (voluntarily or lnvoluntar~ly)
is not considered a "permanent loss" For purposes of this program
"permanent loss" Ks defined as
i death
2 mandatory retirement (must be 62 years of age or older)
3 permanent disability
To determine if a reduction an the loan Ks eligible, the household
members will be asked to complete all income ~nformatlon and forms as
required in Section II - Application Processing A determination will
ReVlsed18/20/97 Program Guidelines - Page 6
be made after evaluating the household size and income usmng the
program gumdeline income lmmmts and fmnancmal assistance categormes
that are being used at the tmme the request for reduced loan payment
ms made If the loss of Income places the household in a lower payback
category, the loan balance wmll be reduced (whmch will mncrease the
deferred payment loan balance) according to current financmal aesms-
tance category gumdelines When a loan reduction ms granted, the
applmcant must sign an Extension of Note and Lien reflectmng the new
loan and deferred loan amounts
A waiver of these provmslons can be requested mf the applicant feels that
their cmrcumstances requmre special consmderat~on Section V of Program
Procedures explamns how to request a waiver
Each applicant assisted through the program will sign a Rehousmng
Agreement with the Cmty which outlines the responsmbilmt~es of each The
agreement establmshes a date on which the applicant agrees to permanently
vacate the present structure, agrees to demolition of the present
dmlapidated structure, agrees to occupy the replacement structure when
structure is completed and ready to be inhabmted, and agrees that
temporary housmng wmll terminate when structure is ready for occupancy as
determined by the Cmty of Denton
IX FINAL INSPECTION - CERTIFICATE O~ OCCUPANCY
The City of Denton will conduct a f~nal inspection of all housmng un.ts
made available through the program to determine that the replacement unit
and all items mdent~fled mn a "punch list" have been corrected Thms
Certifmcate of Occupancy will serve as evidence to HUD of the Cmty's
determmnatmon that the dmlapmdated structure has been replaced by a
decent, safe, and sanmtary dwellmng and that the family has been
successfully relocated
Revised 8/20/97 Program Gumdelines - Page 7
APPENDIX 2
OPTIONAL RECONSTRUCTION PROGRAM
APPLICATION
YourpartlcipatlonlntheOptlonalReconstructionPmgrammvoluntapJ Reconstructlon funds are limited Therefom, the Program does
not cover coats necaasary for household to relocate during raconstruchon of property Please complete the following questionnaire
This ~nformatton wrll help our staff In determimng ~f you will be eligible for the Optional Reconstrucbon Program
I understand that It is my responsibility to relocate my household and that I am responsible for all costs involved to do so?
Yes No
2 I understand that as a result of reconstruction, my appramed property value may ~ncraase significantly from the amount at
which it is currently valued?
Yes No
3 I understand that an ~ncrease in my property value may cause my property taxes to increase by a a~gmficant amount lam
financially prepared to meet any increase?
Yes No
4 I understand that I am obligated to carry homeowner's msuranca for the durabon of the I~en (10 years) that the C~ty of Denton
will have on my property
Yes No
5 I understand that my homeowner inauranca premium will most hkely Increase as a result of the reconstruchon I am awara
that my Inauranca policy must cover the after-reconstruction appramed value of my property I am financially prepared to
meet this ~ncrease
Yes No
6 I understand that I must request that my insurance company hst the City of Denton as a "Mortgagee" on my policy for the
duration of the hen (IO years)?
Yes No
7 I understand that The City of Denton Is limited ~n the amount of funds they can spend to roconstruct a property I have been
briefed on these limits and understand that my ehglblhty for the Optional Reconstruction Program will be granted only if it is
determined that the total of all costs involved to reconstruct my property will be at or below the allowable program limit
Yes No
Th~s APPLICATION was completed by
on By s~gmng below, I am requesting that the C~ty of Denton's
Commumty Development Office accept this as my apphcabon to be considered for the Opbonal
Reconstruction Program
Applicant's S~gnature Date
Revised 8/20/97 Program Guldel;~nes - Page 9
APPENDIX 3
CITY OF DENTON
COMMtYNITY DEVELOPMENT PROGRAM
OPTIONAL RECONSTRUCTION PROGRAM
REHOUSING AGREEMENT FOR APPLICANTS
THIS AGREEMENT, made and entered into on I1}, by and between the City of Denton,
Texas, and ~1~ hereinafter referred to as Applicants This agreement covers the structure
occupied at the following legal address
WHEREAS, The Applicant has heretofore requested and qualified for the Homeowner
Rehabilitation Program w~th assistance from the Clty in order to obtam adequate, decent, safe, and
samtary housmg under the C~ty's Commumty Development Block Grant and HOME Program, and
WHEREAS, the C~ty has detenmned that rehabtlltatlon of the Apphcant's residence ~s not a
feasible alternative, and
WHEREAS, the City has determined that the Commumty Development Program will not provide
the Apphcant relocation payments and assistance necessary to accomplish the voluntary relocation
of the Apphcant from the substandard, unrehabable dwelling currently occupied ~nto an adequate,
safe, and samtary replacement dwelling
NOW, THEREFORE, the C~ty and the Applicant for and an consideration of the covenants and
prormses as hereinafter set forth, do agree as follows
1 The Applicant agrees to vacate permanently the currently occupied substandard
dwelling w~thm 10 days notxce by the City for the need to vacate
2 The Applicant agrees and hereby authorizes the demolition and removal of the
currently occupied dwelhng and clearance by the City of the property The
Apphcant further releases the C~ty from any and all clauus arising from flus action
3 The Apphcant agrees to take possession and occupy the replacement dwellmg when
such dwelling is completed and the City determines it to be ready for occupancy
The Applicant further agrees to s~gn any required ~nstruments to effect th~s ~tem
Revxsed 8/20/97 Program Guldelxnes - Page 10
4 The Apphcant agrees, to prowde and bear all financial costs necessary to relocate
Apphcant's household and furmsbangs w~thout assistance from the C~ty of Denton
5 The maxamum budget authority for the OpHonal Reconstructaon Program is
~6~, Much includes, but as not lnmted to, property t~tle search fee, the cost
to demohsh the ex~stmg dilapidated structure and the cost to reconstruct an
adequate, decent, safe, and samtary replacement dwelhng on the onganal s~te (lot)
of the dwelhng vacated by the apphcant
6 Apphcant agrees to the tune 1Lmltat~ons as set forth m the OpHonal Reconstruction
Guadehnes m whach to be moved from the substandard property
12[ DATE 13[ DATE
CITY OF DENTON:
BARBARA ROSS, COMMUNITY
DEVELOPMENT ADMINISTRATOR
NANCY BAKER, HOUSING
REHABILITATION SPECIALIST
Revxsed 8/20/97 Pro,ram Guidelines - Pa~e 11
APPENDIX 4
_'DENTON, TX , ~.~.~.~
T, xget Rehabdltatllon
N~ig~rhoods Map ~j~
! .... ~" i~ ~ ~~ ,,,,.. ~ / · I ""~
I. -- ....
: , ~~~:-'-~
Revssed 8/20/97 Program Guidelsnes - Page 12
MERGE FIELD DOCUMENT EXPLANATION
FIELD 11 = DATE DOCUMENT WILL BE SIGNED
FIELD ! = NAME(S) OF Apphcant SIGNING DOCUMENT
FIELD 4 = LEGAL PROPERTY DESCRIPTION OF DWELLING TO
BE RECONSTRUCTED
FIELD 6 = MAXIMUM ALLOWABLE FUNDS FOR PROJECT I E,
1 BDRM = $41,054, 2 BDRM = $49,921, 3 BDRM =
$64,581, AND 4 BDRM = $70,890 (THESE DOLLAR
AMOUNTS ARE SET BY HUD FOR THE DENTON AREA
AND WILL BE CHANGED TO REFLECT HUD'S RE-
QUIREMENTS FOR DENTON AS DIRECTED )
FIELD 12 = FIRST NAME OF Apphcant
FIELD 13 = SECOND NAME OF Apphcam (IF APPLICABLE)
Revxsed 8/20/97 Pro,ram Guxdelxnes - Page 13