2006-245
S:\Our Documents\Ordinances\06\2006 HIP Ordinance.doc
ORDINANCE NO. ,;? tJOb-;? t./!?
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, APPROVING
GUIDELINES FOR OPERATION OF THE CITY OF DENTON HOME IMPROVEMENT
PROGRAM AND ELIGIBILITY CRITERIA; AUTHORIZING EXPENDITURES IN EXCESS
OF $25,000 FOR PROJECTS MEETING PROGRAM GUIDELINES 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 Home Improvement Program administered
by the City of Denton Community Development Division and funded through a federal grant from
the Department of Housing and Urban Development; and
WHEREAS. The City Council deems it to be in the public interest to approve the Program
Eligibility Criteria for the 2006 Program year; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. The City Council approves the 2006 Home Improvement Program Guidelines
and Home Improvement Program Eligibility Criteria which are attached hereto and made a part of
this ordinance for all purposes as Exhibit "A" and authorizes the City of Denton Community
Development Division to administer this program.
SECTION 2. The City Council authorizes the expenditure of funds in excess of $25,000 the
Community Development Division for projects meeting Program Guidelines and Criteria,
subject to compliance with competitive bidding laws, where applicable.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
. !,./}d
PASSED AND APPROVED thiS the d'I - day of
0eptunkU
tP.rnr)1J
,2006.
R. McNEILL, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
BY~
Page 2 of2
- ~----- -- - -.--- - - .
Exhibit A
2006
Home Improvement
Program Guidelines
r3l
OPPORT\JNITY
Available in Spanish I Disponible en Espaftol
EffActlvA DatA: 10/0112006
r3l
OPPORTUNITY
Applicant(s) Is Subject
To All Guideline
Changes Up To The
Time Contracts Are
Signed And Project
Begins
TABLE OF CONTENTS
INTRODUCTION
Home Improvement Program.................. ................... .............. .......... ................................... .......... ........................5
Description of General Program Procedures ...........................................................................................................5
I. PURPOSE ....................................................................................................................................................5
II. DESIGNATED AUTHORITY ....................................................................................................................5
III. ELIGIBILITY REQUIREMENTS: .. ........ ... ... ...... .... .... .... ... ...... ... ..... .... ...... ........ ........... ..... ..... ... ... ... ...... ....5
IV. APPLICATION PROCESSING .................................................................................................................. 7
V. SELECTION OF RECIPIENTS FOR ASSISTANCE................................................................................7
VI. WAIVERS AND APPEALS PROVISION .................................................................................................8
VII. FINANCIAL ASSISTANCE ... ...... ... ........... ... ...... ............ ... ...... ... ... ...... ... ...... .... .... ........ .... ...... ... ... ... ...... ....8
VIII. CONTRACT REQUIREMENTS ................................................................................................................8
IX. PROJECT FEASIBILITY CRITERIA ........................................................................................................9
X. PROJECT COST LIMITS .........................................................................................................................1 0
XI. ALLOWABLE EXPENSES ......................................................................................................................1 0
XII. PROGRAM ACTIVITY OPTIONS ..........................................................................................................10
A. Owner-Occupied Rehabilitation ........................................................................................11
B. Optional Reconstruction ....................................................................................................11
XIII. CONTRACTOR SELECTION AND PROJECT MONITORING ...........................................................11
XIV. PAYMENTS TO CONTRACTOR ...........................................................................................................12
XV. CONTRACTOR DEBARMENT ..............................................................................................................13
APPENDICES .......................................................................................................................................................14
APPENDIX I Qualifying Income Limits for Federally Assisted Programs .........................................................15
APPENDIX 2 Targeted Neighborhoods Map .......................................................................................................16
APPENDIX 3 Optional Reconstruction Assistance Application & ......................................................................17
APPENDIX 4 Optional Reconstruction Rehousing Agreement...........................................................................18
APPENDIX 5 Space & Amenity Allowances For Reconstruction Activities......................................................21
INTRODUCTION
The City of Denton Home Improvement Program's objective is to assist low and moderate-income families in
securing safe, sanitary and decent housing. This objective is accomplished through owner-occupied
rehabilitation and optional reconstruction activities. Rehabilitation of an owner-occupied dwelling corrects
code violations and makes needed repairs. If a dwelling is not feasible for rehabilitation, the applicant may be
eligible for a replacement single-family dwelling. Optional reconstruction activity provides funds to demolish
dilapidated dwellings and construct new modest, energy efficient and safe single-family dwellings on owners'
lots.
The Home Improvement Program is administered by the City of Denton Community Development Division and
is funded by federal grant dollars from the United States Department of Housing and Urban Development
(HUD), participating owner funds, program income and other grant and private dollars, when available.
The following pages contain a detailed description of the Home Improvement Program including program
and project guidelines, policies and procedures and application and project bidding eligibility criteria. The
purpose of the guidelines is to explain to potential applicants and the citizens of Denton, the Home
Improvement Program and the levels of assistance available. For further information or clarification of the
guidelines, please contact the:
Community Development Division
101 S. Locust Street, Suite 500
Denton, Texas 76201
(940) 349-7726
(Located on the Denton Square in the Wells Fargo Bank Building - Fifth Floor)
Home Improvement Program
Description of General Program Procedures
I. PURPOSE
A. The City of Denton Home Improvement Program provides technical and financial assistance for eligible low
and moderate-income households to complete rehabilitation and reconstruction activities to provide, as their
principal residence, modest, decent, safe and sanitary single-family dwellings.
B. Assistance shall be subject to the availability of grant funds, program loan income and HUD implementing
regulations. Administrative procedures will be modified to meet any change in rules and regulations of HUD
that may occur over time.
II. DESIGNATED AUTHORITY
A. Administrative authority for implementation of the program will rest with the City of Denton Community
Development Division. Community Development staff approves rehousinglhousing agreements, contractual
and budget changes, as needed for project completion.
B. The Community Development Administrator will have the responsibility for final determination of the amount
of 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.
III. ELIGIBILITY REQUIREMENTS:
Eligibility requirements must be met for both the applicant's household and the property. Eligibility for assistance
is completed in two phases as described in sections A. and B. below.
A. Applicant(s) / Household Eligibility Requirements:
1. Must be a United States citizen or a legal resident alien.
2. Must have owned and occupied the dwelling for not less than three consecutive years. (The period of
time an applicant has lived in a property under a lease for purchase or contract for deed form of
purchase may be taken into consideration in calculating the three consecutive years.)
3. Must hold a Fee Simple Title to the property. City staff will verify ownership through a general title
search.
a. If applicant is purchasing their home by a "contract for deed" (or a like contract), where applicant
does not gain title to the property deed until all contractual obligations have been met, applicant is
not eligible for assistance. The seller must provide the purchaser with a filed warranty deed on
the property to satisfy this eligibility requirement.
b. lfapplicant(s) inherited the property, the legal documents establishing applicant(s) has fee simple
title to the property must be on file in the Denton County Clerk's Office. Applicant must provide
proof of financial responsibility for the property (i.e. tax payments, and/or utility payments, fee
simple title, executed, filed affidavit of heirship, etc.), and, proof of residency, both, for not less
than the most recent, three consecutive years.
4. Must meet program's income limits.
a. Gross annual total household income is at or below the following, adjusted for family size.
Current maximum income limit by household size is:
Household Size
1
2
3
4
5
6
7
8
Rehabilitation I Reconstruction
80% of the AMI
Maximum Income Limit
$37,250
$42,550
$47,900
$53,200
$57,450
$61,700
$65,950
$70,200
b. Must not have assets (total combined for all household members) in excess of$IOO,OOO.
NOTE 1: The appraised value ofthe applicant's property is excluded in total assets calculation.
NOTE 2: Annual income and asset income are calculated using HUD's most current Section 8 Income
guidelines and rules as established in the Technical Guide for Determining Income.
5. Must be in good credit standing with and exhibit the financial ability to pay creditors, including the
following basic housing expenses:
a. Home Mortgage Payment, including the loan with the City of Denton for Home Improvement
assistance.
b. Loan and revolving credit payment(s).
c. Property Taxes (City, County, DISD) for all owned properties.
d. Homeowner's Insurance Policy premiums
e. Utilities: electricaUwaterlsewage/solid waste and gas
6. Applicants denied assistance due to poor credit history may be reconsidered for the program upon
verifiable completion of six (6) consecutive months of successful debt management with Consumer
Credit Counseling of North Texas or other debt management companies with written approval. Note:
Debt management will be recertified prior to signing contracts.
7. Must demonstrate that income exceeds projected housing expenses and would allow the applicant to
maintain the dwelling.
8. Homeowner may be required to provide owner contribution toward project cost (see Section VILA.).
9. Pre-existing mortgage note balance cannot exceed 80 percent of the property's appraised value for
rehabilitation and 70 percent ofthe property's appraised value for reconstruction.
10. .Sie ";h()usi6()T~':.guid,-fin~ atsecti()n)IJ:B.IO.~.bei()wJ
NOTE: The City of Denton reserves the right to request an independent market analysis.
B. Property Eligibility Requirements
I. Must be zoned to allow for single-family construction and be situated in a Targeted Neighborhood
within the city limits of Denton (Refer to Targeted Neighborhoods Map - Appendix 2).
2. Must exhibit building code deficiencies that make the dwelling unsafe or unsanitary.
3. Structure must be more than 20 years old.
4. May not have existing property code violations (such as high weeds, trash, debris,junk vehicles, etc).
Any liens placed on a property for correcting any past or present code violations must be paid in full by
the time application processing occurs. Any items cited as a code violation on the property must be
corrected or removed before assistance is provided.
5. Must be serviced by or be accessible to City-approved water supply, sanitary sewer and electrical
system.
6. Must meet all of the City of Denton's Land Development Codes.
7. Must comply with and meet all environmental regulations; i.e., historical, floodplain, noise, lead, etc.
8. May not exceed Community Development Division Replacement Housing Space Allowances Policy for
reconstruction. Projects that would exceed the set standards due to property deed restrictions or
neighborhood minimum requirements are not eligible for assistance.
9. Must be covered by an approved homeowner's insurance policy.
NOTE: If an applicant's property is not currently insurable because of its present condition or the
property is going to be reconstructed, the applicant must sign a HOMEOWNER AFFIDAVIT OF
UNDERSTANDING AGREEMENT FOR HOMEOWNER'S INSURANCE to satisfy this eligibility
requirement. Proof of homeowners insurance must be provided at completion of a rehab or
reconstruction.
il~Households and/or properties)pr.;yio.usly~[~isf~,nh~()uih~thTipi2l9:i~ may.or may'rto.t be'eligihlefor
!!,dditiQ,!!al ass!5;t.an,ce .l!5.Jollowsi
r--:-":- --:: ~:~'-,::",",:,,~~~~-~'":"~_ -_'~ ~_~___c ,~-~--"-- -:-- - -- --',.'''_'' .. _-:-'.:~~-_c_---,
1!. . khousehold.that:has received assistance t()rehabilitate or recoristruc(:ahome thattheYt
- -.1..,.:.... ,',.C.' ...,.;.<'>:'....,'.'...cc:.".... ......,.', ...,..,.....:.,.,. .....,.:.,. '>:.....:", ,'," :..~~:.:.:- ..:.:..<.:.":..,..,,.....,. .:,',:,- -- -------,
,subsequently, so Id..is-.n.2.t e lig[Q!e ..[or. ~sj,,!aricf:on another~ome'!.h-"Y-')Urchase, E~gardless...ofthe.
,.... .... -. J
P!rc..!lmstance~
E.' ,A property that receivedrehabiTitatJ9Q":J.mstance-a.fi.er~March-=1996'is noteiigji,l"-.fur 1!.ddi~iQlla!
!'~ istanceJroll1!.his.p'!".Qgram.:
r-"-'--" .-.- ---"'~"--,".:'."~---,' ~'.::::-..~ . - ~':'.-' -.p o. ... ~--:'."~:----~ ... ,': ,~"... ... -- ---:- "C:-""-'-"",::.',::^- -- -.......,...,..--.--. ~..,..- - ...-..- ...-.
c',_ A propertythatreceived rehabilitation assistance before April19J~II1a.Y,lJ.~igi1:>le fOLa_d<[itional
~sist!,nce w...h~ll!,nlh:,ns...have beenpai.<! aq4~rele.a!;ed..
~-:-""--"'-_""__"__'.-:-C'.--'-'--_'.__" - ----'--....-.,...-,..'."'.-~ - .:..~'. ,,-- ___'_0" ,,- ,,'" ,,':'--:.--------:---- -."1
fL.Aproperty that hasr~ceivedreconstructi2.Il,assi~tanc.~ isqot eligLble for additLonal as~!5;tan~e.
'f~omthjs..pr()gramr
IV. APPLICATION PROCESSING
A. To be placed on the waiting list, applicants must meet the following guidelines:
1. Household's total gross annual income does not exceed current program income limits (See Appendix I).
2. Owner is living in and owns the single-family dwelling for not less than two consecutive years.
3. Property is located in a Targeted Neighborhood (see Appendix 2).
4. Property meets requirements in Section I1LB.
S. Applicant must complete a Waiting List Application Form and attach a copy of property deed or proof
of ownership. (Waiting List Application Forms are available at the Community Development Division,
101 S. Locust Street, Suite 500 Denton, Texas, 76201, 940-349.7726.)
B. Prospective applicants are assigned the next available number on the waiting list in the order the completed
waiting list application is received by the Community Development Division.
C. When applicant reaches the top of the waiting list, s/he will be notified in writing to complete the application
process and must provide all items requested on the checklist. Further documentation, in addition to items
listed on the checklist, may be required to process application.
NOTE: Deadline dates will be specified in the notice to apply letter for contacting Community
Development to schedule an appointment to apply and for submitting required application information. These
deadlines are strictly enforced.
D. Applicant must provide all information requested and information must be complete and accurate regarding
their household composition, household income, and housing situation. All information submitted by the
applicant must be current and up to date. All information will be verified and recertified by Community
Development staff as required by Federal regulations.
Any intentionally falsified information will cause the application to be rejected and the applicant will not be
allowed to reapply. Failure to disclose information that may affect eligibility requirements shall also
constitute fraud. Applicants shall be required to make full restitution to the City in the event Community
Development Division services are provided to applicants who provide inaccurate or incomplete information
in order to meet eligibility requirements.
E. Applicant must attend a credit, debt and monthly expenses evaluation meeting with Consumer Credit
Counseling Services, Inc.
F. Applicant must attend a Successful Homeownership Workshop, with emphasis being placed on maintenance,
budgeting, cost effective decorating, and responsibilities of home ownership.
G. Community Development staff will notify eligible applicant(s) of the financial assistance category he/she is
eligible for under the program guidelines. Applicant will be notified that final eligibility for assistance is
determined upon completion of the feasibility study ofthe property. Ineligible applicants will be notified of
the reason their application for assistance is being rejected.
H. Any applicant who feels that s/he has been unjustly denied assistance under the Home Improvement Program
should follow the appeal procedure outlined in Section VI.
V. SELECTION OF RECIPIENTS FOR ASSISTANCE
A. ~ssistance.i~ providec(on "firstcome,firstservea:;;;B:l.s"eddIFil1e date of apRlicationcdinpletion kd th~
, ',' " . ,.. .. ,.~.rc~-~._. - -... .. ..._.. .~_..._...... - -- -- -.
'availabilitvoffunds*.@etel"ll1lpe theor~e.l" oCas.!i.i~.\ans<;1
. . .The HIPProgranlproject targelsstated Tn the f\Sfi9~rlalian"dfSectionl 08applic.ations must be met. . It _ .. _ .
funds needed to complete a reconstruction project'ar~'-not'avaiJ~ble,.the_appllc!,n.t will!J~~as~i~tedba.sed on tilli
~ate of aRPjication ~bl11issiQll"'l1ellfullds_ becoIT1.,,-av"aila!Jl~!
B. Community Development Staff will provide counseling, and assistance as needed, to applicants in order to
facilitate the applicant's rehousing/housing, including the following:
I. Information on the program and rehousinglhousing 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.
VI. WAIVERS AND APPEALS PROVISION
A. Request for Waiver: The City of Denton Home Improvement Program has been developed to adhere to a set
of guidelines in order to assure proper administration and management. In the event that an applicant feels
that his/her circumstances require special consideration, s/he may request, in writing, a waiver from the usual
requirements. All requests should specify the requirement(s) to be considered for waiver and state the
applicant's reason(s) or special circumstances why s/he believes a waiver should be approved. The
Community Development Administrator will review requests on a case-by-case basis. Applicant will be
notified in writing of the final decision.
B. Appeals Procedure: Applicants, who have been determined by the Community Development Administrator
to be ineligible for assistance, may appeal this decision to the Department Director. A written appeal must be
submitted.
C. The Department Director shall issue a written response within fifteen days of receiving the request.
VII. FINANCIAL ASSISTANCE
A. Owner Contribution is a percentage of the total project cost that the applicant must provide at contract
signing. These funds are held in an escrow account and will be expended before City funds are used when
making contractor payments. Owner contribution increases on a sliding scale as household income increases.
See Appendix I for percent of owner contribution by income ranges and family size.
B. City of Denton Funds: The City of Denton will fund the remaining project costs using Federal HUD CDBG
and HOME dollars, program income and private funds, when available.
C. Term of the Note is determined by the activity to be completed and/or total project cost as follows:
Activity / Proiect Cost
Rehabilitation/Below $10,000
Rehabilitation/Between $10,000 - $25,000
Rehabilitation/Above $25,000 - $45,000
Term
60 months ( 5 years)
120 months (1 0 years)
I 80 months ( 15 years)
Reconstruction or Rehabilitation/Above $45,000
240 months (20 years)
D. Financial Assistance Levels: The City-funded dollars are payable through a two-part loan. See Appendix I
for income ranges by household size, payable to deferred loan ratios and description of Payable and Deferred
loans.
E. Applying to the Home Improvement Program is voluntary. Funds for temporary relocation are not provided.
VIII. CONTRACT REQUIREMENTS
A. Liens are in effect until all requirements of the deed and promissory note are satisfied. The City of Denton
will be in the first lien position. When a first lien position is not possible, the City may accept second lien
position, subject to the review and approval of the Community Development Administrator. Liens are
released once all the requirements and conditions of the deed and note have been met.
B. DEFAULT ON CONTRACT: If the applicant defaults on their contract, the lien will be called due in full,
and referred to the City of Denton's Legal Department to begin acceleration ofthe note as allowed by law.
The City will make every effort to work with the applicant to avoid foreclosure and will examine each
situation on a case-by-case basis. Examples of loan default include, but are not limited to: I.) Delinquent loan
payments; 2.) Failure of grantee to reside in the assisted dwelling unit as the principal residence of applicant;
3.) Failure to maintain adequate homeowner insurance coverage; 4.) Failure to pay property taxes when due.
C. SALE OF PROPERTY: In the event the grantee sells the property prior to maturity of the note, the sum of
the unpaid balance of the loan and the unforgiven balance of the deferred loan amount will become due
immediately. Under no circumstance will assistance be provided to grantee on any future property purchased.
D. DISCONTINUATION OF RESIDENCY: In the event the owner(s) no longer resides in the unit due to
death or a permanent medical condition and the heirs/owner decide to sell the property, the City of Denton
will accept as settlement of the note the lesser of:
I. Seventy (70) percent of the property's market value at the time of sale (the City reserves the right to
conduct an independent appraisal), or,
2. Payment of the entire loan balance (both payable and forgivable) owed at the time of grantee's death or
date grantee was no longer able to reside in his/her home due to medical reasons.
If the heirs decide to reside in the property, the City of Denton will negotiate a modified and/or continuation
ofthe note depending on beneficiary income and ownership circumstances. Ifthe heirs decide to set up the
property as a rental unit, they will pay the balance due as calculated in "D" above and may request a monthly
payment arrangement. The heirs will be required to sign a Modification of Note and Lien.
E. LOSS OF HOUSEHOLD INCOME: If, after the project begins, a household experiences a permanent,
substantial loss of household income, an applicant may request are-evaluation of their total annual gross
household income. This evaluation may result in a decrease in the payable portion of the note. The loss of
income must befrom an income-earning household member(s) whose income was used in determining the
original loan assistance category. Please note: Loss of employment (voluntarily or involuntarily) is not
considered a "permanent loss". For purpose of this program "permanent loss" is defined as:
I. death
2. retirement (must be 62 years of age or older)
3. permanent disability
4. Other substantial permanent loss of income, when approved by Community Development
Administrator.
All household members must complete all income information and forms as required in section IV,
Application Processing - Application processing will be completed to determine if an adjustment and/or
extension to the payable portion of the note is eligible. 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. When a loan adjustment and/or
extension is granted, the applicant must sign a Modilication and Extension of Real Estate Note and Lien
reflecting the adjustment and/or extension of the note.
IX. PROJECT FEASmILITY CRITERIA
A. A decision as to the type and amount of assistance an applicant is allowed is based on the feasibility of a
property to be rehabilitated. An assessment will be completed using the following factors:
1. Determine if the rehabilitation cost will be affected by: the zoning of a property, a property being
located in a designated 100-year floodplain or floodway, a need to abate possible presence of lead-
based paint, possible historical restoration requirements, or if a rehab will reduce noise levels if
property is in a high noise area.
NOTE: The Floodplain Management regulations limit the total cost of all non-code repairs for any dwelling
located in a designated IOO-year floodplain to 50 percent of a property's pre-rehabilitation appraised value as
set by the Denton Central Appraisal District (dwelling [not land] value only).
2. Determine ifthe framework and foundation of a dwelling are stable, or can be made stable through
rehabilitation. (May allow for structural engineer evaluation of structure when staff cannot determine.)
3. Lead-based paint hazard reduction techniques will be used when lead-based paint exceeds HUD's
acceptable limits for lead content in existing paint. The limits for lead content exceed HUD's limits
when lead content exceeds I mg per cm' (one milligram per centimeter squared), or 5000 ppm (parts
per million). The reduction techniques used by this program are described and found in the U. S.
Department of Housing & Urban Development's publication, Guidelines for the Evaluation and Control
of Lead-Based Paint Hazards in Housing, issued June 1995.
4. Is a room addition(s) needed to relieve serious overcrowding?
NOTE: Room additions and improvements to relieve serious overcrowding may be eligible and require the
approval of the Community Development Administrator.
B. A structural evaluation and project cost determination is completed. Projects that will exceed the Project Cost
Limits (Section X) are not eligible for rehabilitation assistance. Applicant may be referred for optional
reconstruction assistance.
X. PROJECT COST LIMITS
A. A rehabilitation project must meet all of the following 3 tests to be considered feasible to rehabilitate.
Projects not feasible for the rehabilitation activity may be eligible for reconstruction and must meet the cost
criteria in items 2 and 3 of this section.
1. Rehabilitation will not exceed $45 per square foot of total living space (using after rehabilitation square
footage). Exceptions: An additional $10 per square foot may be available, if the house needs to
comply with lead reduction. An additional $10 per square foot may be available to comply with
historical requirements.
2. Total project cost will not exceed ofthe current Maximum Home Subsidy Limits for Denton as set by
HUD (See Appendix I).
3. The after project appraised property value plus all costs expended to complete the project (including
"other funds" and "owner's contribution") will not exceed 95% of the current Single Family Mortgage
Limit for Denton as established by HUD (See Appendix I).
B. PROGRAM MINIMUM LIMITS FOR Home Improvement projects: A dwelling needing less than $5000 of
repairs is not eligible for Home Improvement Program assistance.
XI. ALLOWABLE EXPENSES
Federal CDBG and HOME grant funds will be used to pay for eligible project costs to complete substantial
rehabilitation of existing owner-occupied properties and reconstruction of substandard owner-occupied properties.
Some allowable fees are:
o Cost of room addition(s), to relieve serious overcrowding when approved by the Community Development
Administrator.
o Demolition of substandard structures as needed to complete projects.
o Costs necessary to build modest, energy efficient, safe and sanitary replacement of principal residences
o Other eligible expenses the Community Development Division determines necessary to facilitate the
completion of activities allowed by this program (Example: title search, filing fees, platting, engineering
reports, permit and tap fees, etc.)
o Eligible administrative costs.
o Other fees and costs as allowed by the CDBG and HOME regulations.
NOTE: Funds for temporary relocation during project construction are not provided.
XII. PROGRAM ACTIVITY OPTIONS
The Home Improvement Program provides three options. The process required for all activities will be:
Process
o CD staff will complete a project feasibility study. This inspection will include a detailed evaluation of all
deficiencies needing to be addressed to bring the dwelling up to minimum program standards.
o Activity option determined based on feasibility criteria (Section IX.).
o Project details completed and approved by applicant.
o CD staff completes a cost estimate ofthe work to be completed.
o CD Administrator certifies the project as "eligible" or "not eligible."
o If eligible, applicant signs a rehousing agreement (Appendix 4 or 6).
o Bid packet is prepared, bid out as described in Contractor Selection and Monitoring (Section Xlll), owner
chooses contractor from eligible bids, contracts are signed and project begins.
o The City's Building Inspections Division and CD staff inspects project's progress routinely to ensure
compliance with City codes and project specifications. Community Development staff completes final
inspection.
o For reconstruction activity, owner must have utilities connected and provide proof of homeowner's insurance
before property can be occupied.
o Project is closed upon contractor receiving contingency payment; owner receives loan payment schedule;
invoicing begins.
In the event a procedure is not addressed in these guidelines the Program Manager will determine the best course of
action.
A. Owner-Occupied Rehabilitation
This activity will assist eligible applicants rehabilitate single-family principal residences by making needed
repairs with the first priority being to correct code violations. This activity is eligible when a completed
project will yield a structurally sound, safe, sanitary and decent single-family dwelling that meets City's
building codes (see Section IX).
B. Optional Reconstruction
The reconstruction activity is offered when existing dwellings are not feasible for rehabilitation. Optional
reconstruction provides funds to demolish existing dilapidated dwellings and reconstruct modest, energy
efficient, safe and sanitary replacement single-family dwellings.
XIII. CONTRACTOR SELECTION AND PROJECT MONITORING
All applicants are responsible for finding a contractor who will develop a proposal to complete approved home
improvement activity. Eligible applicants may request assistance from Community Development staff to help
homeowner with the bidding process. The homeowner may elect to seek a bid proposal from a qualified contractor
of their choice. Bids by contractors submitted by the applicant must be reasonable (within 10 percent, high or low,
of the Community Development cost estimate). Contractors selected by the applicants must meet eligibility and
insurance requirements.
Contact any reputable and experienced contractor and request a bid for the required work.
IF YOU HAVE ANY TROUBLE FINDING A CONTRACTOR, contact any ofthe following places for assistance:
Your local Better Business Bureau
. Any friends or neighbors who have had remodeling done to their properties.
Chamber of Commerce
Community Development Division Contractor's List
When a contractor comes to meet with you, you should:
Show himlher the mandatory work items that have been identified by the Community Development Division
per the work write up, construction plans and project standards.
Advise himlher that the bid proposal must be returned to you for submission to the rehabilitation program by
a due date.
DO NOT SIGN ANY AGREEMENT WITH THE CONTRACTOR.
Owner must submit the contractor's bid proposal to the Community Development Division at 101 S. Locust Street.
Suite 500. Denton. TX.
The Community Development staff will review the proposal to verify that:
I. The contractor is licensed and has all City-required insurance coverage.
2. All required improvements have been included in the bid.
3. The proposed work is in conformance with the program's General Specifications.
4. All proposed costs are reasonable (as verified by CD staff prepared cost estimate).
5. The contractor chosen by owner has not been disqualified by any local, State or Federal government
agency.
Any contractor whose name appears on the most current HUD or City of Denton Debarred Contractor's List will
not be eligible to participate in this program. References will be checked and claims of substandard workmanship
will be cause to declare a contractor ineligible. The contractor must also submit all required proof of insurance
forms and bonds (if applicable). Failure to submit these will result in rejection of the bid proposal.
The bid proposals that are submitted by the applicant will be reviewed by the Community Development Division to
determine if the total bid price is reasonable per cost estimate and under the maximum allowable amount. THE
CITY OF DENTON AND THE APPLICANT RESERVE THE RIGHT TO REJECT ANY AND ALL BIDS.
If the Community Development Administrator approves the bid proposal submitted by the applicant, the
Community Development staff shall proceed.
A construction contract must be signed. Before the contractor can start work, the applicant must issue a notice to
proceed.
The contractor's work will be monitored by the applicant, the Community Development staff and the City of
Denton building code inspector. If the applicant considers any work done by the contractor to be unsatisfactory or
incomplete, the applicant should advise the contractor of the discrepancy and ask that it be corrected. In the event a
dispute exists between the applicant and the contractor with respect to the work, the City shall take appropriate
action in accordance with the provisions of the construction contract to assure that the applicant is satisfied before
making any payment to the contractor. In the event a dispute cannot be resolved, the Department Director shall
consider all pertinent facts and shall decide an appropriate course of action to resolve the dispute.
Acceptance of Work
I. FinalInspection In order for the contractor to close out a project, a final inspection shall be made by
the City of Denton building code inspector, the Community Development staff, and the applicant. If
the final inspection results in no additional work or no specified corrections, the applicant shall sign
final payment request stating that all work has been completed to their (applicant's) satisfaction. The
building code inspector shall sign a final inspection form to confirm the same. At this time, the
contractor is advised to submit to the Community Development Division copies of all warranties and
releases of liens from subcontractors and suppliers prior to contingency payment. Community
Development staff will make copies of warranties and other documentation. The applicant will receive
original warranty and guarantee documents. The Community Development Division will retain copies
of these documents for the file.
2. Warranty of Work As stated in the contract, the contractor shall guarantee the work performed for a
period of at least one-year from the date of final acceptance. The contractor will return in thirty (30)
days and ask the applicant if any additional repairs are necessary. Any deficiencies or necessary repairs
to specified work will be completed at this time. Ifno repairs are needed, the contractor will request
that the applicant release the contingency payment.
XIV. PAYMENTS TO CONTRACTOR
A. The contractor shall receive approved final payment, minus a 10 percent contingency, for completed contract
within 15 working days after final inspection approval. The contingency is calculated on the final contract
amount by adding the total project bid amount plus or minus change orders, minus, if applicable, the cost for
demolition. Contingency is withheld for thirty (30) days from the date of final acceptance by Community
Development Division staff. After thirty days, if no additional or warranty work remains, the contractor must
request written approval from owner and CD staff to release withheld contingency funds. Contractor must
endorse the Mechanic's Lien Note over to the City of Denton and sign a release of note and lien of the
Mechanic's Lien Contract before contingency payment can be released.
B. A contractor may request interim-project payments throughout the course of the project. Interim payments
will be made available to the contractor upon applicant and CD staff approval of any contract work that has
been completed. Contractor will submit a CONTRACTOR REQUEST FOR PAYMENT AND PERIODIC
STATEMENT form to the applicant when requesting payments.
C. An "All Bills Paid" affidavit and release of lien from all subcontractors and suppliers must be submitted to the
Community Development Division before final payment can be released to contractor. Any electrical,
plumbing, mechanical, window and/or roofing permits and termite inspection report must also be submitted to
the Community Development Division prior to releasing contingency payment to the contractor.
XV. CONTRACTOR DEBARMENT
A. A contractor will be declared ineligible to participate in projects funded by the City of Denton Home
Improvement Program for one or more of the following causes:
I. Failure to complete a project within the prescribed contract period.
2. Failure to complete warranty repairs within a reasonable time period.
3. Failure to use licensed plumbing and electrical subcontractors.
4. Failure to obtain City-required insurance, i.e., general contractor's liability, automobile liability and
builder's risk (if applicable).
5. Failure to complete work in accordance with program specifications and/or accepted standards of
workmanship.
6. Failure to pay all subcontractors working on the project appropriately and/or by not submitting
affidavits of payment signed by all subcontractors.
7. Failure to obtain proper permits for work in progress.
8. Failure to treat applicants with respect and courtesy.
9. Other offenses not described here when the Community Development Director believes a contractor's
action(s) does not serve the best interest of the program, the City or the applicant.
B. Contractors will be notified of their proposed debarment and will be afforded the opportunity to comment or
appeal the action. All appeals must be made in writing to the Community Development Division by the 15th
day from the date of the notification letter.
Appendix I
Appendix 2
Appendix 3
Appendix 4
Appendix 7
APPENDICES
QualifYing Income Limits and Ranges for the City of Denton's Federally Assisted Programs
Target Neighborhoods Map
Optional Reconstruction Assistance Application and Temporary Relocation Questionnaire
Optional Reconstruction Rehousing Agreement
Space & Amenity Allowances For Reconstruction Activities
APPENDIX 1
FY 2006/2007
City of Denton Community Development Division
Quali in Income Limits for Federal! Assisted Pro rams
Rehabilitation and Optional Reconstruction Eligible Income Ranges
2-Part Loan Ratio. 75% Payable /25% Deferred 45% Payable /55% Deferred 25% Payable /75% Deferred 15% Payable 185% Deferred
Owner Contribution 1 % of T ofal Project Cost .75% of Total Project Cost .5% of Total Project Cost .25% of Total Project Cost
Income Range Moderate Low Very-Low Extremely-Low
Famil Size 80% AMI - 65% AMI 65% AMI - 50% AMI 50% AMI - 30% AMI 0;;30% AMI
$37,250 - $30,251 $30,250 - $23,301 $23,300 - $13,951 $13,950 or Below
2 $42,550 - $34,601 $34,600 - $26,601 $26,600 - $15,951 $15,950 or Below
3 $47,900 - $38,901 $38,900 - $29,951 $29,950 - $17,951 $17,950 or Below
4 $53,200 - $43,251 $43,250 - $33,251 $33,250 - $19,951 $19,950 or Below
5 $57,450 - $46,701 $46,700 - $35,901 $35,900 - $21,551 $21,550 or Below
6 $61,700 -$50,151 $50,150 - $38,551 $38,550 - $23,151 $23,150 or Below
7 $65,950 - $53,601 $53,600 - $41,251 $41,250 - $24,751 $24,750 or Below
8 $70,200 - $57,051 $57,050 - $43,901 $43,900 - 26,351 $26,350 or Below
'In this two-part loan:
Part I: Pavable Loan is based on a percentage of the total City-paid project cost (see Section VILD.). The payable
portion of the loan is amortized over the term ofthe note (60 to 240 months - see Section VII.C.), and carries a 3 percent
interest rate. There is no penalty for paying the payable loan off early.
Part II: Deferred Loan is based on a percentage of the total City-paid project cost (see Section VII.D.). This portion of
the loan carries a zero percent interest rate. For every month applicant complies with deed and note requirements, a
fraction of the deferred loan is forgiven (on a 5-year note, 1/60, on a 10-year note 1/120, on a 15-year note 1/180, and on a
20-year note 1/240). The deferred loan terms are from between 60 to 240 months (5 to 20 years) based on project cost
and/or type of assistance activity (see Section VILC.). At the end of the contract term the deferred loan is forgiven,
provided applicant has satisfied all the conditions listed in the Deed of Trust and Promissory Note. The deferred loan is
secured by a lien on the property.
Reportable Income: Gross income for all household members aged 18 and above must be included to determine
household's eligibility to receive assistance; however, some household members' incomes may be excluded when
determining the payback category that the eligible household will be approved for. They are: applicant's children,
grandchildren or legal guardians of the applicant who are aged 18 up to 22 and/or children aged 22 up to 25 who are full
or part-time students. Incomes for household members aged 25 and older will be included in determining the payback
category for the household.
Income Limit Source: U.S. Department of Housing and Urban Development. Effective: February 11,2005
2006 Maximum Home Per-Unit Subsidy Limits for Denton
O-BDR=$85,273 I-BDR=$98,266 2-BDR=$119,491 3-BDR=$1S4,581 4-BDR=$169,683
95 Percent ofthe 2005 Single Family Mortgage Limit for Denton = $164,000 Effective: August 31, 2005
APPENDIX 2
City of Denton, Texas
Targeted Neighborhoods Map
~ I Denton, Texas I
lii
o =i!!:
~ ~
APPENDIX 3
OPTIONAL RECONSTRUCTION ASSISTANCE APPLICATION AND
TEMPORARY RELOCATION QUESTIONNAIRE
Your participation for optional reconstruction assistance is voluntary. Reconstruction funds are limited therefore; the
Program does not cover costs necessary for household to relocate during reconstruction of the property. Please complete
the following questionnaire. This information will help our staff in determining if you will be eligible for optional
reconstruction assistance.
1. 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 appraised property value, set by the Denton Central Appraisal, may
increase significantly from the amount at which it is currently valued.
Yes No
3. I understand that an increase in my property value may cause my property taxes to increase by a significant amount.
I am financially prepared to meet any increase.
Yes No
4. I understand that I am obligated to carry homeowner's insurance for the duration of the lien (20 years) that the City of
Denton will have on my property.
Yes No
5. I understand that my homeowner insurance premium will most likely increase as a result of the reconstruction. I am
aware that my insurance policy must cover the after-reconstruction appraised value of my property. I am financially
prepared to meet this increase.
Yes No
6. I understand that I must request that my insurance company list the City of Denton as a "Certificate Holde( on my
policy.
Yes No
7. I understand that The City of Denton is limited in the amount of funds it can spend to reconstruct a property. I have
been briefed on these limits and understand that my eligibility for optional reconstruction assistance 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
This APPLICATION was completed by on. By signing
below, I am requesting that the City of Denton's Community Development Division to accept this as my application to be
considered for optional reconstruction assistance.
Applicant's Signature
Date
APPENDIX 4
HOME IMPROVEMENT PROGRAM
OPTIONAL RECONSTRUCTION REHOUSING AGREEMENT
THIS AGREEMENT, made and entered into on (Date document will be siqned). by and between the City of Denton, Texas, and (Name
of aoolicant siqninq document) hereinafter referred to as Applicant. This agreement covers the dwelling occupied at the following legal
address:
(Legal property description of dwelling to be reconstructed)
WHEREAS, The Applicant has heretofore requested and qualified for the Home Improvement Program with assistance from the City in
order to obtain adequate, decent, safe, and sanitary housing under the City's Community Development Block Grant and HOME
Program; and
WHEREAS, the City has determined that rehabilitation of the Applicant's residence is not a feasible alternative; and
WHEREAS, the City has determined that the Community Development Program will not provide the Applicant relocation payments and
assistance necessary to accomplish the voluntary relocation of the Applicant from the substandard, unrehabable dwelling currently
occupied into an adequate, safe, and sanitary replacement dwelling.
NOW, THEREFORE, the City and the Applicant for and in consideration of the covenants and promises as hereinafter set forth, do
agree as follows:
1. The Applicant agrees to vacate permanently the currently occupied substandard dwelling within 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 claims arising from this action.
3. The Applicant 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 this item.
4. The Applicant agrees to provide and bear all financial costs necessary to relocate Applicant's household and furnishings without
assistance from the City of Denton.
5. The maximum budget authority for optional reconstruction assistance is (Maximum allowable funds for project), which includes,
but is not limited to, property title search fee, the cost to demolish the existing dilapidated dwelling and the cost to reconstruct an
adequate, decent, safe, and sanitary replacement dwelling on the original site (lot) of the dwelling vacated by the applicant.
6. Applicant agrees to the time limitations as set forth in the Optional Reconstruction Guidelines in which to be moved from the
substandard property.
Applicant's Signature
Date
2nd. Applicant' Signature
Date
CITY OF DENTON:
Community Development Administrator
APPENDIX 5
SPACE & AMENITY ALLOWANCES
FOR RECONSTRUCTION ACTIVITIES
The City of Denton may provide replacement single-family modest, safe, energy-efficient, decent dwellings. Space and
room limits for replacement housing are determined by household need. Replacement housing will provide up to the
following:
Provided Space
1 Kitchen
1 Laundry Alcove
1 Coat Closet
1 Living Area
1 or 2 Bathrooms*
1 Dining Area or Kitchenette
1 Food Pantry Closet and/or Cabinet
1 Linen Closet
2-3 Bedrooms*** W/Closets**
1 Attached (Non-Conditioned) Storage Area
Maximum Square Feet Allowed (Within 2 oercent high or low)
2 Bedrooms 1 bath - 985 SF
2 Bedrooms 2 baths - 1040SF
3 Bedrooms 1 bath - 1100 SF
3 Bedrooms 2 baths - 1180 SF
4 Bedrooms 2 baths - 1225 SF (***must be approved)
Amenities
1 Brick Mailbox
1 HVAC Unit (14-Seer AC)
1 Front Entry Door
1 50 gallon Water Heater
2-Car Driveway Space
Programmable Thermostat
1 Energy Star Refrigerator
1 Ceiling fan per bedroom and 1 in Living Room
1 Front & 1 Rear Exterior Weatherproof Electrical Outlets
1 Rear or Side Entry Door
1 Front & 1 Rear Hose Bib
1 Attic Access Stairs
Standard lighting including exterior safety lights front and back
1 4 burner Gas or Electric Range/single Oven (appliances if needed)
Sod will be installed at a minimum of 5' wide around entire foundation/perimeter, 3' wide around sidewalks and driveway.
Season-appropriate seed will be spread on remainder of un-sod yard.
*A full bathroom may be made ADA accessible to accommodate a physically handicapped household member. Household
may also select a 1/2 or 3/4 bath in place of a second full bath, if desired.
**Clothes closets will ideally, when possible, provide a minimum of 4' X 2' of space per bedroom.
***Determining Maximum Number of Bedrooms from household makeup: A household may select up to a 3 bedroom 2
bathroom house based on need. A fourth bedroom may be requested in writing when a household believes there is a valid
need for the additional space. The Community Development Administrator approves requests on a case-by-case basis.
Under no circumstances will this program provide space exceeding that described above.