2004-306ORDNANCE NO. Pef/- Z;g
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 Iow 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 ficom
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 2004 Program year; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the City Council approves the 2004 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
Commtmity Development Division to administer tiffs program.
SECTION 2. That the City Council authorizes the expenditure of funds in excess of $25,000
by the Community Development Division for projects meeting Program Guidelines and Criteria~
subject to compliance with competitive bidding laws, where applicable.
SECTION 3. That this ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APeROVED this the ~A'-'-~fi~ dayof ~-~ ,2004.
EUL1NE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
Page2 of 2
2004 Home Improvement
Program Guidelines
Available in Spanish I Disponible en Espa~ol
Effective Date: 10/01/2004
EQUAL HOUSING
OPPORTUNITY
Applicant(s) Is
Subject To All
Guideline Changes
Up To The Time
Contracts Are
Signed And
Project Begins
TABLE OF CONTENTS
INTRODUCTION ................................................................................................................................................................. 4
Home Improvement Program ................................................................................................................................................. 5
Description of General Program Procedures .......................................................................................................................... 5
I. PURPOSE ................................................................................................................................................................ 5
II. DESIGNATED AUTHORITY ................................................................................................................................. 5
lB. ELIGIBILITY REQUIREMENTS: .......................................................................................................................... 5
A. Applicant(s) / Household Eligibility Requirements: ........................................................................................ 5
B. Property EligibilityRequirements .................................................................................................................... 6
iV. APPLICATION PROCESSING ............................................................................................................................... 7
V. SELECTION OF RECIPIBNTS FOR ASSISTANCE ............................................................................................. 8
VI. WAIVERS AND APPEALS PROVISION .............................................................................................................. 8
VII. FINANCIAL ASSISTANCE .................................................................................................................................... 8
VIII. CONTRACT REQUI1LEMENTS ............................................................................................................................. 8
IX. PROJECT FEASIBILITY CRITERIA ..................................................................................................................... 9
X. PROJECT COST LIMITS ...................................................................................................................................... 10
XI. ALLOWABLE EXPENSES ................................................................................................................................... 10
XII. PROGRAM ACTIVITY OPTIONS ....................................................................................................................... 10
A. Owner-Occupied Rehabilitation .................................................................................................................... 11
B. Optional Reconstruction ............................................................................................................................... 11
C. New Construction Assistance ........................................................................................................................ 11
XIB. CONTRACTOR SELECTION AND PROJECT MONITORING ......................................................................... 11
XIV. PAYMENTS TO CONTRACTOR ........................................................................................................................ 12
XV. CONTRACTOR DEBARMENT ........................................................................................................................... 13
APPENDICES ..................................................................................................................................................................... 14
APPENDIX 1 ...................................................................................................................................................................... 15
Qualifying Income Limits for Federally Assisted Programs ................................................................................... 15
Modemte .............................................................................................................................................................................. 15
Low 15
Very-Low ............................................................................................................................................................................. 15
Extremely-Low .................................................................................................................................................................... 15
2004 Maximum Home Per-Unit Subsidy Limits for Denton .................................................................................. 15
95 Percent of the 2004 Single Family Mortgage Limit for Denton = $162,360 ...................................................... 15
APPENDIX 2 ...................................................................................................................................................................... 16
Targeted Neighborhoods Map ................................................................................................................................ 16
APPENDIX 3 ...................................................................................................................................................................... 17
OPTIONAL RECONSTRUCTION ASSISTANCE APPLICATION AND .......................................................... 17
TEMPORARY RELOCATION QUESTIONNAIRE ............................................................................................ 17
APPENDIX 4 ...................................................................................................................................................................... 18
HOME IMPROVEMENT PROGRAM .................................................................................................................. 18
OPTIONAL RECONSTRUCTION REHOUSING AGREEMENT ...................................................................... 18
APPENDIX 5 ...................................................................................................................................................................... 19
NEW CONSTRUCTION ASSISTANCE APPLICATION AND QUESTIONNAIRE ......................................... 19
APPENDIX 6 ...................................................................................................................................................................... 20
NEW CONSTRUCTION HOUSING AGREEMENT ........................................................................................... 20
APPENDIX 7 ...................................................................................................................................................................... 21
SPACE & AMENITY ALLOWANCES FOR RECONSTRUCTION & NEW CONSTRUCTION ACTIVITIES21
INTRODUCTION
The City of Denton Home Improvement Program's objective is to assist low and moderate-income families
with securing safe, sanitary and decent housing. This objective is accomplished through owner-occupied
rehabilitation, optional reconstruction or new construction activities. Rehabilitation of an owner-occupied
dwelling corrects code violations and makes needed repairs when a dwelling is feasible for rehabilitation. When
a dwelling is not feasible for rehabilitation, the applicant may be eligible for a replacement single-family
dwelling. New construction provides affordable homeownership opporttmities to eligible low-income renters or
displaced households who own eligible land. Both optional reconstruction, and new construction activities
provide 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 l~om 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)
4
in.
Home Improvement Program
Description of General Program Procedures
PURPOSE
A. The City of Denton Home Improvement Program provides technical and financial assistance for eligible low and
moderate-income households to complete rehabilitation, reconstruction or new construction 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 roles and regulations of HUD that
may occur over time.
DESIGNATED AUTHORITY
A. Administrative authority for implementation of the program will rest with the City of Denton Community
Development Division. CommunityDevelopment 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 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.
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.) New construction applicants must
have owned property for not less than 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. 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, except for new construction assistance, 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:
Humber of People
Livino in Household
1
2
3
4
5
9
7
9
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
65% of the AMI
Maximum Income Limit
$30,250
$34,600
$38,900
$43,250
$46,70O
$50,150
$53,600
$57,050
b. Must not have assets (total combined for all household members) in excess of $ 100,000. New construction:
Must not own standard renter or owner-occupied property.
NOTE 1: The appraised value of the 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 roles as established in the Technical Guide for Determining Income.
5. Must be in good credit stancFmg 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: 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 with written approval. Note: Debt
management will be recertified prior to signing contracts.
7. Must demonstrate that income exceeds projected housing expenses and the ability to maintain the
dwelling.
8. Homeowner may be required to provide owner contribution toward project cost (see Section VI/.A.).
9. Pre-existing mortgage note balance carmot exceed 80 pement of the property's appraised value for
rehabilitation and 70 percent of the property's appraised value for reconstruction.
10. New construction activity required property to be 100% owned with no prior liens.
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. New construction is
exempt fi.om this requirement.
3. 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 must be removed or corrected fi.om the
property before assistance is rendered.
4. Must be serviced or be accessible to a City-approved water supply, sanitary sewer and electhcal system.
5. Must meet all of the City of Denton's Land Development Codes.
6. Must comply with and meet all environmental regulations; i.e., historical, floodplain, noise, lead, etc.
7. May not exceed Community Development Division Replacement Housing Space Allowances Policy for
new construction and reconstruction. Projects that would exceed the set standards due to property deed
restrictions or neighborhood minimum requirements are not eligible for assistance.
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IV*
8. 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 has
no structures, 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, reconstruct or new construction.
9. A property that has been previously assisted with Federal or State grant funds after March 1996 is not
eligible for assistance. Properties having received assistance before April 1996 may be eligible for
additional assistance after eight (8) years from the date of the last assistance. Provided all liens have been
paid and/or released.
10. With the exception of 1.B.9., households previously assisted with HOME funds may be eligible for rehab
assistance based on availability of funds and federal regulations.
APPLICATION PROCESSING
A. To be placed on the waiting list, applicants must meet the following guidelines:
l. Household's total gross annual income does not exceed current program income limits.
2. Owner is living in and owns a singie-fanfily dwelling for not less than two consecutive years. New
construction: Owner must have owned property for two consecutive years.
3.Property is located in a Targeted Neighborhood (see Appendix 2).
4. 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 w~fiting list in the order the completed waiting
list application is received by the Community Development Division.
C. When applicant reaches the top of the w~fiting list, s/he will be notified in writing to complete the application
process and must provide all items requested per checklist. Further documentation, in addition to items listed on
the checklist, may be required to process application.
NOTE: Deadlines given for contacting the Community Development office to make an appointment to apply
and those given for submitting application information will be stated in the notice to apply letter. The deadlines
will be enforced.
D. Applicant must provide ail 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 staffwill notify eligible applicant(s) ofthe 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.
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.
7
V. ' SELECTION OF RECIPIENTS FOR ASSISTANCE
A. Date of application completion and eligibility will determine the order of assistance.
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:
1. Information on the program and rehousing/housing 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 thc event that an applicant feels that
his/her circumstances require special consideration, s/he can request, in writing, a waiver from thc usual
requirements. All requests should specify the requirement(s) to be considered for waiver and state thc applicant's
reason(s) or special circumstances why s/he believes a waiver should bc approved. The Community Development
Administrator will review requests on a case-by-case basis. Applicant will be notified in writing of thc final
decision.
B. Appeals Procedure: Applicants, who have been determined by the Community Development Adrrfmistrator 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.
VH. FINANCIAL ASSISTANCE
A. Owner Contribution is a percentage of the totalproj ect cost that thc applicant must provide at contract signing.
These funds are held in an escrow account and will bc expended before City funds are used when making
contractor payments. Owner contribution increases on a sliding scale as household income inareascs. See
Appendix I for percent of owner contribution by income ranges and family size.
B. City Of Denton Funds: Thc City of Denton will fund thc 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 thc activity to be completed and/or total project cost as follows:
Activity / Project Cost
Rehabilitation/Below $10,000
Rehabilitation/Between $10,000 - $25,000
Rehabilitation/Above $25,000
Reconstruction and New Construction/Total Const
TerIn
60 months ( 5 years)
120 months (10 years)
180 months (15 years)
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.
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 posihon, subject
to the review and approval of the Community Development Administrator. Property approved for the new
construction activ/ty must be free of all liens and City of Denton will be in the first lien position. Liens are released
once all the requirements and conditions of the deed and note have been met.
B. 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
IX*
loan default include, but are not linfited 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. 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..
D. In the event the owner(s) passes away prior to the maturity date, or the owner(s) can no longer reside in the
property due to a permanent medical condition, if the heirs decide to sell the property, the City of Denton will
accept as settlement of the note the lesser of:
1. Pay 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. Pay the payoff balance of the lien owed at the time the grantee passed away or was no longer able to reside
in his/her home
If the heirs keep the property the City of Denton will negotiate a modified and/or continuation of the note
depending on beneficiary income and ownership circumstances. Heirs using property for rental income will pay
the can request the note balance
E. If, after the project begins, a household experiences a permanent, substantial loss of household income, an
applicant can 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 be from 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:
1. deaths
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 - Re-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 evaluafmg the household size and
income using the program guideline income limits and fmancial 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 Modification and Extension of Real Estate Note and Lien reflecting the adjustment and/or extension of
the note.
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 ifa 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 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. Deterraine 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 HUD'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 em2 (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
9
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 LIMI'rS
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 or new construction and must meet the cost
criteria in items 2 and 3 of this section.
I. Rehabilitation will not exceed $40 per square foot of total living space (using after rehabilitation square
footage). Exceptions: An additional $10 per square foot is available, if the house needs to comply with lead
reduction. An additional $10 per square foot is available to comply with historical requirements.
2. Total project cost will not exceed of the 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, reconstruction of substandard owner-occupied properties and new
construction of single-family modest dwelling units for eligible applicants who own eligible vacant lots. 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 determmes 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 relocatima during project construction are not provided.
311I. PROGRAM ACTMTY OPTIONS
The Home Improvement Program provides three options. The process required for all activities will be:
Process
o CD staff will complete a project feasibilitystudy. This inspection willinclude 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 of the work to be completed.
o CD Administrator certifies the project as "eligible" or "not eligible."
10
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 staffinspects project's progress routinely to ensure compliance with
City codes and project specifications. Community Development staff completes final inspection.
o For reconstruction and new construction activities, 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.
C. New Construction Assistance
The City of Denton will provide homeownership opportunities to eligible low-income families who own eligible
property. New construction provides funds to construct a modest, decent, energy efficient, safe, and affordable
single-family dwelling·
1. Applicantcannotcurrentlyownaresidenceoramobilehome. Exceptionsaremadeforsubstandardproperfies.
2. Community Development Division will determine the condition of the dwelling.
3. Substandard residential properties in the flood plain/flood way, may also be eligible for this activity, if the
owner owns an eligible vacant lot, not in the flood plain/flood way.
CONTRACTOR SELECTION AND PROJECT MONITORING
All applicants arc 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 thc bidding process. Thc 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 thc required work.
1F YOU HAVE ANY TROUBLE FINDING A CONTRACTOR, contact any of thc 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 mcct 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 thc rehabilitation program by a duc
date.
DO NOT SIGN ANY AGREEMENT WITH THE CONTRACTOR.
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' 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:
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. AIl 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
1. 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 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 confmu 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 gnarantee the work performed for a period of at
least one-year from the date of final acceptance. The contractor will retum in thirty (30) days and ask the applicant
if any additional repairs are necessary. Any defi6iencies or necessary repairs to specified work will be completed at
this time. If no repairs are needed, the contractor will request that the applicant release the contingency payment.
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. Atler 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.
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XVl
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 terunte inspection report must also be submitted to the Community
Development Division prior to releasing contingency payment to the contractor.
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:
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 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.
13
APPENDICES
Appendix 1 Qualifying Inc°me Limits and Ranges for the City of Denton's Federally Assisted Programs
Appendix 2 Target Neighborhoods Map
Appendix 3 Optional Reconstruction Assistance Application and Temporary Relocation Questionnaire
Appendix 4 Optional Reconstruction Rehousing Agreement
Appendix 5 New Construction Assistance Application And Questionnaire
Appendix 6 New Construction Housing Agreement
14
APPENDIX 1
FY 2004/2005
City of Denton Community Development Division
Qualifying Income Limits for Federally Assisted Programs
and Optional Reconstructio~ ~ligible Income Ranges
2-Part Loan Ratio* 70% Payable / 30% Deferred 40% Payable / 60% Deferred 20% Payable / 80% Deferred 10% Payable / 90% 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
80% AMI - <65% AMI
Low
65% AMI - <50% AMI
Very-Low
50% AMI - <30% AMI
Extremely-Low
_<30% AMI
Family Size
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 - $381551 $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: Payable Loan is based on a percentage of the total City-paid project cost (see Section VII.D.). The payable portion
of the loan is amortized over the term of the note (60 to 240 months - see Section VII.C.), and carries a 3 percent interest
rote. There is no penalty for paying the payable loan off early.
Part H: Deferred Loan is based on a percentage of the total City-paid project cost (see Section VII.D0. 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 1 O-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 VII.C.). 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. Forgiveness begins on the completion date of the project.
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 thepayback 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 thepayback
category for the household.
Income Limit Source: U.S. Department of Housing and Urban Development. Effective: January 28, 2004
2004 Maximum Home Per-Unit Subsidy Limits for Denton
0-BDR=$74,180 1-BDR=$85,032 2-BDR=103,440 3-BDR=$133,763 4-BDR=$146,831
95 Percent of the 2004 Single Family Mortgage Limit for Denton = $162,360
15
APPENDIX 2
City of Denton, Texas
Targeted Neighborhoods Map
'16
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
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
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
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
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 cever 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 Holder" on my policy.
Yes No
I understand that The City of Denton is limited in the amount of funds they 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
17
APPENDIX 4
CITY OF DENTON
COMMUNITY DEVELOPMENT DMSON
HOME IMPROVEMENT PROGRAM
OPTIONAL RECONSTRUCTION REHOUSING AGREEMENT
THIS AGREEMENT, made and entered into on (Date document will be siqned), by and bet~veen the City of Denton, Texas, and
{Name of applicant siqnin,q 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 fi:om 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 with'm 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 f'mancial 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' Signature
2nd. Applicant' Signature
Date
Date
CITY OF DENTON:
Community Development Administrator
18
APPENDIX 5
HOME IMPROVEMENT PROGRAM
NEW CONSTRUCTION ASSISTANCE APPLICATION AND QUESTIONNAIRE
Your participation for new construction assistance is voluntaxy. Program funds are limited. Please complete the
following questionnaire. This information will help our staffin determining if you will be eligible for new
construction.
I understand that the appraised value will include the cost of the new construction and the land and will be set by the Denton Central
Appraisal District, This will cause your property value to increase significantly from the amount at which it is currently valued.
Yes No
I understand that an increase in my property value will cause my property taxes to increase by a significant amount. I am financially
prepared to meet any increase.
Yes No
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 am financially prepared to meet any increase.
Yes No
5. I understand that I must request that my insurance company list the City of Denton as a "Certificate Holder" on my policy?
Yes No
I understand that The City of Denton is limited in the amount of funds they can spend for new construction. I have been briefed on
these limits and understand that my eligibility for the Home Improvement Program will be granted only if it is determined that the total
of all costs involved for new construction on 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 accept this as my application to be considered for new
construction of the Home Improvement Program.
Applicant's Signature
Date
19
APPENDIX 6
CITY OF DENTON
COMMUNITY DEVELOPMENT PROGRAM
HOME IMPROVEMENT PROGRAM
NEW CONSTRUCTION HOUSING AGREEMENT
THIS AGREEMENT, made and entered into on (Date document will be signed), by and between the City of Denton, Texas, and
(Name of applicant signing document) hereinafter referred to as Applicants. This agreement covers the property located 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
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 take possession and occupy the new constructed 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.
2. The Applicant agrees to provide and bear all financial costs necessary to relocate Applicant's household and fumishings
without assistance from the City of Denton to the new constructed dwelling.
3. The maximum budget authority for new construction is (Maximum allowable funds for project), which includes, but is not
limited to, property title search fee and cost of new construction of an adequate, decent, safe, and sanitary dwelling.
Applicant' Signature
Date
Date
2ha. Applicant' Signature
CITY OF DENTON:
Community Development Administrator
2O
APPENDIX 7
SPACE & AMENITY ALLOWANCES FOR
RECONSTRUCTION & NEW CONSTRUCTION
ACTIVITIES
The City of Denton may provide replacement or new 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 1 percent high or low)
2 Bedrooms 1 bath
2 Bedrooms 2 baths
3 Bedrooms 1 bath
3 Bedrooms 2 baths
4 Bedrooms 2 baths
-985 SF
-1040SF
~1100 SF
-1180 SF
-1225 SF (***mustbeapproved)
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 &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 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.
21