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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