1996-235t \u~o¢$\ord~tr~ o
ORDINANCE NO. ~
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 in 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 it approves the Optional Reconstruction
Program Guidelines and Optional Reconstruction Program Eligibility
Criteria which is attached to this ordinance as Exhibit "A" and
authorizes the City of Denton Community Development Office to
administer this program
S CTI_~. That it authorizes the expenditure of funds in
excess of $15,000 by the Community Development Office for projects
meeting program guidelines and criteria.
SECTION III. That this ordinance shall become effective Immed-
iately upon its passage.
PASSED AND APPROVED this the ~7-day of ~~U~, , 1996.
JACK MILLER, MAYOR
ATTEST:
JEiNIFERBy. ~/1~6}~~WALTERS' CItY SECRETARY
HERB~T~ PROUTY, CITY ATTO~Y
CITY OF DENTON
OPTIONAL RECONSTRUCTION
PROGRAM
GUIDELINES- 1996/97
Page 4
'~AB~.t~ OF
I PURPOSE Page 1
II DESIGNATED AUTHORITY Page 1
III IMPLEMENTATION PROCESS Page 1
IV ELIGIBILITY REQUIREMENTS Page 3
V FEASIBILITY FOR RECONSTRUCTION Page 4
VI SELECTION OF RECIPIENTS FOR ASSISTANCE Page 4
VII ALLOWABLE EXPENSES AND CATEGORIES OF FINANCIAL ASSISTANCE Page 4
VIII REHOUSING AGREEMENT Page 6
IX FINAL INSPECTION CERTIFICATE OF OCCUPANCY Page 6
APPENDIX I PROGRAM INCOME RANGE TABLE Page 7
APPENDIX II APPLICATION AND TEMPORARY RELOCATION QUESTIONNAIRE Page 8
APPENDIX III REHOUSING AGREEMENT FOR Applicants PaGe 9
APPENDIX IV TARGET REHABILITATION NEIGHBORHOODS MAP Page 11
Page 5
CITY OF DENTON
OPTIONAL RECONSTRUCTION PROGRAM
GUIDeZ.INB8
Unless herein stated otherwise, the general operating procedures contained in the
City of Denton's Community Development Homeowner Rehabilitation Program
Guidelines will be followed
PURPOSE
The City of Denton, Texas, will provide assistance necessary to
accomplish the reconstruction of dwellings not feasible for rehabilita-
tion The Optional Reconstruction Program will provide funds to
demolish existing dilapidated dwellings and reconstruct adequate,
decent, safe and sanitary replacement dwellings. In addition, the City
will also promote the elimination of slum and blight that exists in the
City
Reconstruction payments and assistance will 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~lability
of grant funds and U S Department of Housing and Urban Development
(HUD) implementing regulations. Administrative procedures will be
modified to meet any change in rules and regulations of HUD which may
occur over time.
DBSIGNA~BD AUTHORITY
A. Administrative authority for implementation of the program wiii rest
with the City of Denton's Community Development Office. This office
will serve as the approving office for Rehousing Agreements and for
contractual and budget changes as needed for project completion
8. The Community Development Administrator will have the res~onsibility
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 Administrator will be responsible for
approval of applicant eligibility for the program and final approval
of selection of applicants to be assisted This will be based upon
relative need of applicants on the City's list of houses which have
been determined infeasible for rehabilitation under the City's
Homeowner Rehab£1itetion Program
ZMPLEMEH~ATI0~ PRocess
Steps in implementing 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
Revised 08/02/96 Program Guidelines - Page
Page 6
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 waiting list
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 probab[lity 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 its 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, Section 104(d), Recon-
struction and One-for-One Replacement Housing Requirements
G. A Rehousing Agreement 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.
Community Development Staff will provide counseling and assistance as
needed to approved applicants in order to facilitate the applicant's
rehousing, including referrals to builders, suppliers, etc.
I The applicant and the community Development office agree to the
arrangement and method of the approved payments, the applicant will
execute a contract with a builder for the selected replacement
dwelling The applicant will also contract for the demolition of the
substandard dwelling and for lot and site clearance and preparation
J When appropriate, the applicant voluntarily vacates the substandard
dwelling
K The replacement dwelling Ks constructed and appropriately inspected
by the City to determine adequacy and compliance with City codes
L City certifies that the replacement dwelling is decent, safe, and
sanitary and ready for occupancy. City issues a final building
inspection
Revised 08/02/96 Program Guidelines - Page 2
Page 7
M. Applicant accepts replacement home
N. Ail 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 in 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. ELXGZBZLZTY REOUZREMEgTS
Eligibility for reconstruction payments and assistance shall be estab-
lished as followsz
A. Applicant must have applied for rehabilitation assistance under the
City of Denton's Rousing Rehabilitation Program.
E. Applicant must have been rejected for rehabilitation assistance on the
grounds that the applicant's occupied dwelling was not feasible to
rehabilitate.
C. Applicant must be an owner occupant of the dwelling for which rehabili-
tation 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
D 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 will be built
In situations where the applicant does not have clear title, attempts
to clear the title will be initiated with the assistance of the
applicant. When meeting this 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 title holders will be requested to
relinquish their title rights to the applicant ) Applicants with less
than 100 percent fee simple title must have a continuing right to
occupy the premises. Applicant must provide documentation for all
existing liens. All current lienholders will be requested to subordi-
nate their lien position to the city
E Mortgage note balance cannot exceed 50 percent of the property's
appraised value as set by the Denton Central Appraisal District
F. The City will relinquish first lien position only to a mortgage lender
In all other cases, lienholders will need to relinquish first lien
position to the city.
G Applicants shall provide complete and accurate information regarding
their household composition, household income, and housing situation
Failure to disclose information which may affect eligibility 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 xnaccurate or
incomplete information in order to meet eligibility requirements
Revised 08/02/96 Program Guidelines - Page 3
Page
Requests for further assistance will be denied unless restitution is
made in full
Applicants must demonstrate that their income exceeds their projected
housing expenses
I Applicants will agree to conform with Denton Code Enforcement requests
prior to being determined eligible for replacement housing assistance
Applicants agree to maintain dwelling and exterior grounds in accor-
dance with applicable city ordinances
J Applicants will be encouraged based on individual needs to attend
Community Development applicant education classes, with emphasis being
placed on maintenance, budgeting, cost effective decorating, and
responsibilities of home ownership when available.
K Must apply to a participating lender and be eligible for a loan to
cover part of the cost of the reconstruction
V. FEASZHZLZTY FOR RE~w~q~ll~T!~
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 include,
but are not limited to, the cost of demolition, site preparation, cost of
replacement dwelling, title search fee, and/or city-funded interest buy-
down for bank financed portion of the project.
VZ. ~t'~.mCTXOM OF RECZPZB~TS FOR ASSXSTA_M~w
A Initial recipients of this program will be taken from the list of
applicants residing in structures determined to be infeasible to
rehabilitate Additional recipients will be added during subsequent
operation of the City of Denton's Housing Rehabilitation Program
B The number of recipients to receive assistance will be subject to
availability of funds
C Applicants will be placed on a waiting list for reconstruction
assistance based on the time and date they originally applied to the
Community Development Office for rehabilitation assistance
VII, ALLOWABLE EXPENSES AND ~a~ORIES OF F?W~W~?a?. ASS?emaw~F
A. The primary form of assistance to be provided will 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 will net fewer bedrooms than the number of bedrooms
a family has before reconstruction Room addition(s) to relieve
serious overcrowding may be eligible only with the approval of the
Community Development Administrator In general the City will follow
the standards consistent wzth the applicable Housing Quality Standards
described at 24CFR 882 209(b)(2) when considering the number of
bedrooms needed to avoid overcrowding
Revised 08/02/96 Program Guidelines - Page 4
Page 9
~ of Ocgvpants in Household
# of Bedrooms Minimum ~aximum
2 i 4
3 3 6
4 6 8
C The City of Denton has FOUR FINANCIAL ASSlSTANC! CATI~ORIES for those
who qualify for the Optional Reconstruction Program. These categories
are based on the Ouslifvina In~o~ ?.4m4~s and Ranaes for the City of
Denton's Federally Assisted P=oarams (see appendix 1 to these guide-
lines for current income limit ranges) A description of the financial
assistance categories and their requirements are found in Section III
of the Homeowner Rehabilitation Guidelines
D Allowable expenses will include=
1 cost of total demolition and clearance of the dilapidated
structure, lot clearance, and preparation of Job site for new
replacement dwelling.
2. Cost to reconstruct safe, sanitary, decent replacement dwelling
3 Other expenses the Community Develolanent Office determines to be
necessary to facilitate the reconstruction of the substandard
property
E. community Development staff will also provide assistance and counseling
to applicants as needed, including the following.
1. Information on the program and rehousing options available
2 Assistance in soliciting bids for replacement housing
3. Assistance in contractual compliance between applicant and
contractor
4. Assistance in inspection of construction of replacement dwelling,
if applicable.
5. Assistance to applicant in evaluation of future maintenance
burdens of various housing options
F If, after the loan payback begins, a household experiences a permanent.
substantial loss of household income, a applLcant can request a review
to adjust their current level of assistance However, in no instance
will the payable loan ~ortion be reduced below the minimum 10 percent
payable loan level The loss of~noomemusthefro~afl /ncome-earn~g
e~nllca~t(sJ whose ~oome was used /~ determin~g the original loan
assistance category. Lose of employment (voluntarily or involuntarily)
is not consadered a "permanent loss". For purposes of this program
"permanent loss" is defined
1 death
2 mandatory retirement (must be 62 years of age or older)
3. permanent disability
Revised 08/02/96 Program Guidelines - Page 5
Page 10
To determine if a reduction in the loan is eligible, the household
members will be asked to complete all income information and forms as
required in Section II - Application Processing A determination will
be made after evaluating the household size and income using the
program guideline income limits and financial assistance categories
that are being used at the time the request for reduced loan payment
is made If the loss of income places the household in a lower payback
category, the loan balance will be reduced (which will increase the
deferred payment loan balance) according to current financial assis-
tance category guidelines When a loan reduction is granted, the
applicant must sign an Extension of Note and Lien reflecting the new
loan and deferred loan amounts
A waiver of these provisions can be requested ~f the applicant feels that
their circumstances require special consideration. Section V of Program
Procedures explains how to request a waiver
ROUSING AG
Each applicant assisted through the program will sign a Rehousing
Agreement with the city which outlines the responsibilities of each The
agreement establishes a date on which the applicant agrees to permanently
vacate the present structure, agrees to demolition of the present
dilapidated structure, agrees to occupy the replacement structure when
structure is completed and ready to be inhabited, and agrees that
temporary housing will terminate when structure is ready for occupancy as
determined by the City of Denton
FINAL INSPECTION -
The City of Denton will conduct a final inspection of all housing units
made available through the program to determine that the replacement unit
and all items identified in a "punch list" have been corrected This
Certificate of Occupancy will serve as evidence to HUD of the City's
determination that the dilapidated structure has been replaced by a
decent, safe, and sanitary dwelling and that the family has been
successfully relocated
Revised 08/02/96 Program Guidelines - Page
Page 11
APPENDIX 1
Page 12
APPENDIX 2
OPTIONAL RECONSTRUCTION PROGRAM
APPLICATION
Your par~ctpation in the Optional Reconstruction Program ;s voluntary Reconst~n funds am limited Therefore, the Program does
ont cover coals necossary for household to relocate during reconstruction of proparty Pleave complete the following questionnaire
'l~is Information will help our staff in duten'nlning If you will be eligibte for Ihe Optional Reconstmoflon Program
I undemtand 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 appraised property value may inorease significantly from the amount at
which it is currently valued?
Yes No
3 I understand that an thoreaes in my property value may cause my property taxes to increase by a significant amount I am
financially prepared fo meet any increase?
__ Yes __ No
4 I understand that I am obligated fo carry homeowner's insurance for the duration of the lien (10 yearn) that the City o!
De,toe1 will have on my properly
Yes No
5 I understand that my homeowner insurance premium will most likely increase as · result of the reoonstmcifon I am aware
that my Insurance policy must cover Ihe affor-reconstmction a,opralsed value of my pmberty I am flnarmtelly prepared fo
meet this increase
__ Yes No
8 I undemtand that I must request that my insurance company list the City of Denton as a 'Cefllticate Holder' on my polioy?
Yes No
7 I understand that l~e City of Denton Is Ilmhed In the amount of funds they can spend to resonstn~t a property I have been
blteted on these limits and understand that my etigthlllty for the Optional Reconstruction Program will he granted only If It
Is dotarmJued that the total of all costs thvol~l to reconstruct my properly will be at or below the allowable program limit
Yes No
This APPLICATION was completed by
on By signing below, I am requesting that the City of Denton's
Commun~ Development Office accept th~s as my applmat~on to be considered for the Optional
Reconstruction Program
Apphcant's Signature DATE
Rev~secl 08/02/96 Program Guidelines - Page 8
Page 13
APPENDIX 3
CITY OF DENTON
COMMUNITY DEVELOPMENT PROGRAM
OPTIONAL RECONSTRUCTION PROGRAM
REHOUSING AGREEMENT FOR APPLICANTS
'ITIIS AGREEMENT, made and entered into on FIELD(11), by and between the City of Denton,
Texas, and FIELD(I) hereinafter referred to as Applicants This agreement covers the structure
occupied at the following legal address
FIELD(n)
WHEREAS, The Apphcant has heretofore requested and qualified for the Homeowner
Rehabthtatton Program with assistance from the City m order to obtain adequate, decent, safe,
and samtary housing under the City's Commumty Development Block Grant and HOME
Program, and
WHEREAS, the City has determined that rehabihtat~on of the Applicant's residence is not a
feasible alternative, and
WHEREAS, the C~ty has detemuned that the Commumty Development Program will not provide
the Applicant relocation payments and assistance necessary to aocomphsh the voluntary relocation
of the Apphcant from the substandard, unrehabable dwelling currently occupied into an adequate,
safe, and samtary replacement dwelling
NOW, THEREFORE, the City and the Applicant for and m consideration of the covenants and
pronuses as hereinafter set forth, do agree as follows
1 The Applicant agrees to vacate permanently the currently occupied substandard
dwelling wlttun 10 days notice by the City for the need to vacate
2 The Applicant agrees and hereby authorizes the demolition and removal of the
currently occupied dwelling and clearance by the City of the property The
Applicant further releases the City from any and all clarms arising from ttus
action
3 The Apphcant agrees to take possession and occupy the replacement dwelling
when such dwelling is completed and the City determines it to be ready for
occupancy The Applicant further agrees to sign any required instruments to
effect flus item
Rev£sed 08/02/96 Program Ou£delines - Page 9
Page 14
4 The Apphcant agrees, to provide and bear all fmanmal costs necessary to relocate
Applicant's household and furmslungs w~thout assistance from the C~ty of Denton
5 The maximum budget authority for the Optional Reconstmctmn Program ~s
FIELD(6), wluch includes, but ~s not limited to, property t~tle search fee, the cost
to demohsh the ex~stmg ddap~dated structure and the cost to reconstruct an
adequate, decent, safe, and samtary replacement dwelling on the original s~te (lot)
of the dwelling vacated by the apphcant
6 Apphcant agrees to the tune lumtations as set forth m the Optional Reconstruction
Gmdelmes tn wtuch to be moved from the substandard property
FIELD(12) DATE FIELD(13) DATE
CITY OF DENTON
BARBARA ROSS, COMMUNITY
DEVELOPMENT ADMINISTRATOR
NANCY BAKER, HOUSING
REHABILITATION SPECIALIST
Revised 08/02/96 Program Ouadel£nes - Page
Page 15
APPENDIX 4
Texas
Target Rehabilitation
Neighborhoods Map
Page 16