2007-239s:\our documems\ordinances107\2007 hip ordinance.doc
ORDINANCE NO. DO ! " J~
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
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 2007 Program year; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Council approves the 2007Home 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. q~"'~/,, /
PASSED AND APPROVED this the ~ day of (JGU,U(lLC~iJ , 2007.
~~~-
PERRY R. McNEILL, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
B
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
BY:
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EXHIBIT A
2007
Home Improvement
Program ;Guidelines
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~ Available in Spanish 1 Disponible en Espanol ~
Effective Date: 1010112007
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Applicant(s) Is Subject
To All Guideline
Changes Up To The
Time Contracts Are
Signed and Project
Begins
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TABLE OF CONTENTS
INTRODUCTION
Home Improvement Program ............................................................................................................................ ......5
Description of General Program Procedures ..................................................................................................... ......5
I. PURPOSE ........................................................'..................................................................................... ......5
T1. DESIGNATED AUTHORITY ........................'..................................................................................... ......5
III. ELIGIBILITY REQUIREMENTS :................. i..................................................................................... ......5
IV. APPLICATION PROCESSING ......................'..................................................................................... ......7
V. SELECTION OF RECIPIENTS FOR ASSISTANCE ........................................................................:. ......8
VI. WAIVERS AND APPEALS PROVISION.....~ ..................................................................................... ......8
VII. FINANCIAL ASSISTANCE ................................................................................................................. ......8
VIII. CONTRACT REQUIREMENTS ....................:..................................................................................... ......9
IX. PROJECT FEASIBILITY CRITERIA .................................................................................................. ....10
X. PROJECT COST LIMITS ..................................................................................................................... ....10
XI. ALLOWABLE EXPENSES .................................................................................................................. ....10
XII. PROGRAM ACTNITY OPTIONS ................:..................................................................................... ....11
A. Owner-Occupied Rehabilitation ........................................................................................11
B. Optional Reconstruction ....................................................................................................11
XTTT. CONTRACTOR SELECTION AND PROJECT MONITORING ....................................................... ....11
XIV. PAYMENTS TO CONTRACTOR ......................................................................................................: ....13
XV. CONTRACTOR DEBARMENT ........................................................................................................... ....13
APPENDICES .............................................................:..................................................................................... ....14
APPENDIX 1 Qualifying Income Limits for Federally Assisted Programs ..................................................... ....15
APPENDIX 2 Targeted Neighborhoods Map ..............:..................................................................................... ....16
APPENDIX 3 HOME Certification and Participation Agreement .................................................................. ....17
APPENDIX 4 Optional Reconstruction Assistance Application & Temporary Relocation Questionnaire .... ....19
APPENDIX 5 Space & Amenity Allowances For Reconstruction Activities .................................................. ....20
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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 maybe
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, application instructions and project bidding process. 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
601 E. Hickory Street, Suite B
Denton, Texas 76205
(940) 349-7726
Located at City Hall East - 2"d Floor
C
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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 or reconstruction of their principal residence.
B. Assistance shall be subject to the availability of program funds. Administrative procedures will be moditied
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 rehousing/housing 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 available to individual applicants, in accordance with the program guidelines, policies and ,
procedures.
C. The Community Development Administrator will be responsible for approval of applicant eligibility for the
program and final approval 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:
Must be a United States citizen or a legal resident alien.
2. Must have owned and occupied the dwelyling for not less than two 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 two 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. If applicant(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, two 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:
Rehabilitation 1 Reconstruction
80% of the AMI
Household Size Maximum Income Limit
1 ~ $37,250
2 $42,550
3 $47,900
4 $53,200
5 $57,450
6 $61,700
7 $65,950
8 $70,200
b. Must not have assets (total combined for all household members) in excess of $100,000.
NOTE 1: The appraised value of the applicant's property is excluded in total assets calculation.
NOTE 2: Household income is calculated based on HUD's Technical Guide for Determining Income
and Allowances for the HOME Program as described in the City's Home Improvement Program
Policies and Procedures Manual
Must have acceptable credit under the City of Denton Community Development Division underwriting
policy. Applicant(s) must 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: electrical/water/sewage/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. Note: Debt management will
be recertified prior to sigming 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 of the property's appraised value for reconstruction. ~
10. See "household" guideline at section IILB.l0.a. below.
NOTE: The City of Denton reserves the right to request an independent market analysis.
B
Property Eligibility Requirements
1. 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.
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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 Yime application processing occurs. Any items cited as a code violation on the property must b'e
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 burrently 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 [o satisfy this eligibility
requirement. Proof of homeowners insurance must be provided at completion of a rehab or
reconstruction.
10. Households and/or properties previously assisted through this program may or may not be eligible for
additional assistance as follows: ~
a. A household that has received assistance to rehabilitate or reconstruct a home that they
subsequently sold is not eligible for assistance on another home they purchase, regardless of the
circumstances.
b. A property that received rehabilitation assistance after March 1996 is not eligible for additional
assistance from this program.
c. A property that received rehabilitation assistance before April 1996 may be eligible for additional
assistance when all liens have been paid and released.
d. A property that has received reconstruction assistance is not eligible for additional assistance
from this program.
IV. APPLICATION PROCESSING
A. To be placed on the waiting list, applicants must meet the following criteria:
1. Household's total gross annual income does not exceed current program income limits (See Appendix 1).
2. Owner is living in and has owned the single-family dwelling for not less than twelve consecutiven
months. '
3. Property is located in a Targeted Neighborhood (see Appendix 2).
4. Property meets all requirements in Section IILB.
5. Applicant must complete a Waiting List Application Form and attach a copy of their property deed or
proof of ownership. (Waiting List Application Forms are available at the Community Development
Division, 601 E. Hickory Street, Suite B Denton, Texas, 76205, 940-349-7726.) ,
B. Upon submission of a waiting list application to the Community Development Division office, applicants are
placed on the waiting list in the order in which their application was received.
C. When applicant reaches the top of the waiting list, s/he will be notified in writing to complete the applioation
process and must provide all items requested on the checklist. In addition to checklist items, further
documentation may be required to process application.
NOTE: Contact deadline dates will be specified in the notice to apply letter from Community Development.
Applicant must schedule an appointment to apply and must submit required application information prior to
the stated deadline. These deadlines are strictly enforced.
f.,
D. Application information regarding household income and composition must be complete, accurate and up-to-
date. Al] information will be verified by Community Development staff.
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 provided inaccurate or incomplete information
in order to meet eligibility requirements.
E. Applicant must provide a detailed personal budget that includes household's expenditures and net incomes to
determine if household has enough discretionary income available to pay back a loan to the City.
F. Applicant must attend a 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 of the property. Ineligible applicants will be notified of
the reason their application for assistance is being rejected. ~'
II. 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. Assistance is provided on "first come, first served" based on the date of application completion and the a?;
availability off«uds* determine the order of assistance.
*The HIP Program project targets stated in the Action Plan and Section 108 applications must be met. If
funds needed to complete a reconstruction project are not available, the applicant will be assisted based on the
date of application submission when funds become available. -
B. Community Development Staff will provide counseling and assistance as needed to facilitate the applicant's
rehousing/housing including the following: r ,
l . Tnformation on the program and rehousing/housing options available.
2. Assistance in soliciting bids for replacement housing. 1'
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 must follow specific 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 Gx'
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. ~~"
VIi. FINANCIAL ASSISTANCE
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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. The 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 /Project Cost Term
Rehabilitation/Below $10,000 60 months (5 years)
Rehabilitation/Between $10,000 - $25,000 120 months (10 years)
Rehabilitation/Above $25,000 - $45,000 ~ 180 months (15 years) '
Reconstruction or Rehabilitation/Above $45,000 240'months (20 years)
D. Financial Assistance Levels: The City-funded dollars are payable through atwo-part loan. See Appendix I
for income ranges by household size, payable to deferred loan ratios and description of Payable and Deferred
loans. :.
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E. Applying to the Home Improvement Program is voluntary. Funds for temporary relocation are not proyided.
VIII. CONTRACT REQUIREMENTS
A. 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 promissory` 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 of the 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: 1.) 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 unforgiden 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:
1. Seventy (70) percent of the property's market value at the time of sale (the City reserves the right o
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
of the note depending on beneficiary income and ownership circumstances. If the 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 a re-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 determiniieg U:e
original loan assistance category. Please note: Loss of employment (voluntarily or involuntarily) is ndt
considered a "permanent loss". For purpose of this program "permanent loss" is defined as:
1. death
2. retirement (must be 62 years of age or older)
3. permanent disability
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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, +';
Apulication 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
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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'ModiFcation and Extension of Real Estate Note and Lien
reflecting the adjustment and/or extension of the note. ,
IX. PROJECT FEASIBILITY 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 al] non-code repairs for any
dwelling located in a designated 100-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 if the 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 IIiJD's~`
acceptable limits for lead content in existing paint. The limits for lead content exceed HUD's limits
when lead content exceeds 1 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.
Departrnent of Housing & Urban Development's publication, Guidelines for the Evaluation and Control
of Lead-Based Paint Hazards in Housink, 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. Frojects 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. ~1'
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 the current Maximum Per Unit Home Subsidy Limits for Denton as
set by HUD (See Appendix I).
3. The afer project appraised property value 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.
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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 ]X.).
o Project details completed and approved by applicant.
o CD staff completes a cost estimate of the work to be completed.
T;
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 XIII), 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 s;
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 even[ 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 completedi
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,lbw,
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of the Community Development cost estimate). Contractors selected by the applicants must meet eligibility arid
insurance requirements.
Contact any reputable and experienced contractor and request a bid for the required work. 1;
IF YOU I-IAVE ANY TROUBLE FINDING A CONTRACTOR, contact any of the following places for assistance:
;a,
• 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 him/her the mandatory work items that have been identified by the Community Development Division
per the work write up, construction plans and project standards. `
• Advise him/her 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 Develonment Division at 601 E. Hickory'
Street, Suite B Denton, TX 76205.
The Community Development staff will review the proposal to verify that:
1. 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.
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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 OP DENTON AND THE APPLICANT RESERV E 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. ~`3i
A construction contract must be signed. Before the contractor can start work, the applicant must issue a notice to
proceed.
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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. ht 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. '
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Accentance of Work
Final Inspection 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
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the final inspection results in no additional work or no specified corrections, [he applicant shall sign
final payment request stating that al] 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.
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.
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 £nal 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. Y.~'
;,~
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:
,r
1. 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 ofd
workmanship.
is
6. Failure to pay all subcontractors working on [he 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 writine to the Community Development Division by the 15th
day from the date of the notification letter. ~ ~=
13
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APPENDICES
Appendix 1 Qualifying Income Limits and Ranges for the City of Denton's Federally Assisted Programs
Appendix 2 Target Neighborhoods Map
Appendix 3 Homeowner HOME Certification and Agreement to Participate in the Home Improvement
Program Owner Occupied Assistance
Appendix 4 Optional Reconstruction Assistance Application and Temporary Relocation Questionnaire,
Appendix 5 Space & Amenity Allowances For Reconstruction Activities
` ~
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i
APPENDIX 1
FY 2007/2008
City of Denton Community Development Division
Qualif 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 I55% Deferred 25% Payable 175% Deferred 15% Payable / 85% Deferred
owner Contribution 1% of Total 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 <30%AMI '~
1 $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 hvo-part loan:
Part L Payable 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 of the note (60 to 240 months -see Section VILC.), and carries a 3 percent
interest rate. There is no penalty for paying the payable loan off early. r
Part IL• Deferred Loan is based on a percentage of the total City-paid project cost (see Section VIT.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. ,q,
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
Home 221(D)(3) Maximum Per-Unit Subsidy Limits For Denton -
0-BDR=$96,701 1-BDR=$110,848 2-BDR=$134,792 3-BDR=$174,375 4-BDR=$191,412
EFFECTIVE - Ma , 2007
95 Percent of the 2007 Single Family Mortgage Limit for Denton = $190,152 Effective: June 2007
. ~~
15
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APPENDIX 2 _,
City of Denton, Texas
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Targeted Neighborhoods Map '.
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APPENDIX 3
City of Denton Community Development Division $
Home Improvement Program
ea~ni. ~rousir+n ,
Homeowner ROME Certiticatiou and Partici anon A reement
Community Development Division staff:
Homeowner• 3,
Homeowner's Pro ert Address:
Mailin Address (if different from above):
Phone: Mobile: Fax: Email:
1. I certify that I, Homeowner named above, am the owner/occupant of the property located at the above-referenced Street
Address and that it is my principal residence.
2. As the Homeowner, I acknowledge I am responsible for completing and returning all required documentation to [he '
Community Development Division staff within the time period stated on [he application materials. Required documentation
will include, but is not limited to, a completed Community Development Division Home Improvement Program Verification
of Income Application, proof of income and proof of home ownership. If I fail to provide these documents in a timely
manner, or if I fail to respond to any inquiries made by Community Development Division staff regazding my HOME
Application for Assistance, I may be disqualified from participating in [his program and receiving benefits.
3. I understand the funding limitations of the HOME program and have been instmcted regarding which services I may receive.
I understand a thorough inspection of my home may resid[ in one of the following recommendations:
a. REHABILITATION- Repairs are made [o the existing home in order [o eliminate its construction deficiencies, in
accordance with [he Home Improvement Program Minimum Construction Standards as established by the Cify~of
Denton Home Improvement Program. The homeowner maybe required to make arrangements for relocation while
the rehabilitation takes place.
b. RECONSTRUCTLON-Due to excessive construction deficiencies which cannot be repaired or rehabilitated
sufficiently to meet required minimum construction standards, the existing stmcmre is demolished and replaced with
a newly constructed home built on the same site. Reconstructed homes must comply with 2003 International
Residential Code (IRC) standards. The homeowner will be required [o make aaangements for relocation whileithe
reconstruction takes place. ~ .•
c. NOT ELIGIBLE- Results when the required repairs are estimated to exceed the program's previously established
budget or funding limitations, or when either the Community Development Division staff or Homeowner elect not to
allow rehabilitation or reconstruction of the home. it.
4. I understand that by accepting funding for rehabilitation /reconstruction of my property, I will be required to sign a deed
contract that will make me legally responsible for:
a. regular upkeep and maintenance of the home following rehabilitation /reconstruction;
b. keeping my home adequately insured as described in the Home Improvement Program Policies and Procedures
booklet; ,
c. keeping al] my property taxes paid when due;
d. paying the loan payments in a timely manner. r~=~
5. 1 have reviewed the Home Improvement Program Policies and Procedures with Community Development Division staff and
have initialed all areas included in the detailed review. 1 have initialed each item on the attached checklist that was reviewed
in detail with me. I was provided an opportunity to ask any questions about [he program, it's limitations, eligibility criteria,
etc., regarding such items as contracts, minimum building standards and specifications, financial limits, type of loans,
funding sources contractor selection and payments, etc., prior to signing this Homeowner Certification and Agreement to„
Participate in the Home Improvement Program.
6. I understand it is my responsibility to arrange access to the home for building contractors, inspectors, and workers performing
constmction or repair services to the home. Following completion of the constmction, [he home will continue to be i;
accessible for completion of punch list items and warranty work. If reasonable and timely access is denied to a building
is
~~ 17
contractor or inspector who is attempting [o make a good faith effort to make or inspect required repairs, I will become
responsible for completing the repairs at my expense. E
7. I understand that the security of the property, household goods, and personal items is my responsibility and that I may be
required [o move and/or store persona] property at my expense. If personal property is damaged, displaced or lost during the
constmction or inspection of the property, I will immediately report the situation to [he Community Development Division
staff, but it will be my responsibility to pursue damages for any losses through my own insurance provider. I will complete
photographic and written inventory prior [o the beginning of rehabilitation / reconstmction. '~
8. During rehabilitation / reconstruction, I will not touch, disturb, move, or otherwise affect, the construction areas, tools,
materials and/or equipment. I will make a reasonable effort to stay away from [he construction zone.
9. I will provide all existing utilities for use by Building Contractor only as they relate to the rehabilitation /reconstruction of
the home. [ am responsible for continuous maintenance and payment of existing utilities. ' ~•~
10. I will review each Building Contractor's Request for Payment and I will make a reasonable effort to inspect each item `'
Building Contractor submits for payment prior to approving the payment request. By signing the Building Contractor's
Request for Payment, I am verifying that to the best of thy knowledge and belief each of the listed rehabilitation / '
reeonstntetion items has been completed according to the required standards and specification. If I am no[ satisfied with a
particular item of repair [hat has been presented for payment, I may delete the items(s) until such repair is satisfactorily
completed. If the repair is completed according to standards and specifications but I refuse to approve the payment request, I
understand that I may be responsible for payment to Building Contractor for any lost time. Community Development
Division staff shall resolve any such conflicts.
11. Before approving final payment I will receive a Warranty from Building Contractor. If warranty work is required during the
warranty period, 1 will be responsible for contacting Building Contractor by telephone. If no contact is made by telephone, I
will seed a certified letter (with a return receipt) to building Contractor If Building Contractor has not responded within 30
days, [will immediately report [he situation to Community Development Division staff. I will provide Community
Development Division staff with copies of my receipts and letters supporting my attempt to contact Building Contrac[oi. If
warranty issues or other complaints remain unresolved, I agree to adhere to the Home Improvement Program's Dispute
Resolution Policy including an informal conference and possibly, binding arbitration.
Homeowner's Certification i
I/We certify that I/we have read and I/we understand [his "Homeowner Certification and Participation Agreement. I/We certify
[ha[, [o the best of my/our knowledge, all required documents and materials I/we have completed and submitted [o Community,
Development Division staff for my/our Application for Assistance are true and correct I/We certify that Contract
Administrator has explained to me/us, and Ihve understand the benefit options available under [he Home Improvement
Program.
I/We choose [o participate in [he Home Improvement Program and [o comply with all Program requirements. t,.
O I/We choose NOT to participate in [he Home Improvement Program or to receive any services provided and/or funded !'
by the Program. ii
Signature of Homeowner Date
Signature of Homeowner ~ Date ,}~,
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APPENDIX 4
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 costs will begin to incur that may include but are not limited to filing, platting, re-platting, title search, property surveys
and other costs deemed necessary. I understand I will be responsible for these costs, even though project may or may not be '
completed.
Yes No ,
I understand that it is my responsibility to relocate my household, before the reconstruction and after the reconstruction is completed, and
that I am responsible for all costs involved to do so. I also understand that I must vacate permanently the currently occupied
substandard dwelling within 10 days notice by the City.
~'
Yes No
3. 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
4. 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
5. 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. I understand that I must request that my insurance company list the Cily of Denton as a "Certificate Holder" on my policy.
Yes No
6. 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
7. I understand that I must take possession and occupy the replacement dwelling when the reconstruction is completed and the City
determines it to be ready for occupancy. I understand that I may be required to resign contracts.
Yes No
8. 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
19
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APPENDIX 5
SPACE 8 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 Dining Area or Kitchenette
1 Laundry Alcove 1 Food Pantry Closet and/or Cabinet
1 Coat Closet 1 Linen Closet
1 Living Area 2-3 Bedrooms*** W/Closets**
1 or 2 Bathrooms* 1 Attached (Non-Conditioned) Storage Area
Maximum Square Feet Allowed (Within 2 percent 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 HoseBib
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 A.D.A. 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 housefold 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.
.. 20