2003-347ORDINANCE NO. ~t~,~¢7
AN ORDINANCE OF TH]E CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
APPROVING GUIDELINES FOR OPERATION OF THE CITY OF DENTON HOME
IMPROVEMENT & OPTIONAL RECONSTRUCTION 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 & Optional
Reconstruction Program administered by the City of Denton Community Development Division
and funded through a federal grant fxom 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 2003 Program year; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. That the City Council approves the Home Improvement & Optional
Reconstruction Program Guidelines and Home Improvement & Optional Reconstruction Program
Eligibility Criteria which are attached hereto and made a part of this ord'manee for all proposes as
Exhibit "A" and authorizes the City of Denton Commtmity Development Division to administer this
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 APPROVED this the ~/~ day of f~f_,/~ ,2003.
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
Page 2 of 2
Home Improvement
&
Optional Reconstruction
2OO3
Program
Guidelines
Available in Spanish I Disponible en Espa~oi
Effective Dale: 10/01/2003
Applicant(s) Is
Subject To All
Guideline Changes
TABLE OFCONTENTS
Introduction
Description of Program Procedures
Page #
Home Improvement Program
I.
II.
III,
IV.
V.
VI.
vii.
VIII.
5
Eligibility Requirements .............................................................. 5
Applieatinn Processing ................................................................. 6
Description of Financial Assistance ............................................. 7
Feasibility for Rehabilitation Process ........................................ 10
Appeals Provision ...................................................................... 11
Contractor Selection and Monitoring ......................................... 11
Payment to Contractor ................................................................ 12
Contractor Debarment ................................................................ 13
Optional Reconstruction Program
14
I. Purpose ....................................................................................... 14
II. Designated Authority ................................................................. 14
III. Implementation Process ............................................................. 14
IV. Eligibility Requirements ............................................................ 15
V. Feasibility for Reconstruction .................................................... 16
VI. Selection of Recipients for Assistance ....................................... 16
VII. Allowable Expenses & Categories of Financial Assistance ...... 16
VIII. Rehousing Agreement ................................................................ 19
IX. Final Inspection - Certificate of Occupancy .............................. 19
Appendices 20
Appendix 1 Qualifying Income Limits and Ranges for the City of
Denton's Federally Assisted Programs ................................ 21
Appendix 2 Target Neighborhoods Map ................................................. 22
Appendix 3 Optional Reconstruction Program Application and
Temporary Relocation Questionnaire .................................. 23
Appendix 4 Optional Recanstxaction Program Rehousing Agreement
for Applicants ...................................................................... 24
INTRODUCTION
The City of Denton Home Improvement and Optional Reconstruction Program is designed to assist low and
moderate-income families in securing safe, sanitary and decent housing. This program's objective is to assist
eligible homeowners to rehabilitate single-family owner-occupied houses by making needed repairs with the first
priority being to correct code violations. When a determination is made that the structure is not feasible to
rehabilitate to minimum standards the applicant may be eligible for assistance to reconstruct the property. The
Optional Reconstruction Program provides funds to demolish existing dilapidated dwellings and reconstruct adequate,
decent, safe and sanitary replacement dwellings.
The Home Improvement and Optional Reconstruction Program is administered by the City of Denton's
Community Development Division and is funded by federal grant from the Department of Housing and Urban
Development.
The following pages contain a detailed description of this program including policies and procedures. The
purpose of these guidelines is to explain to potential applicants and the citizens of Denton, the Home
Improvement and Optional Reconstruction Program and the levels of assistance. For further information or
clarification of the guidelines, contact the Community Development Division.
Community Development Division
101 S. Locust Street, Suite 500
Denton, Texas 76201
(940) 349-7726
(In the Wells Fargo Bank Building - Fifth Floor)
Home Improvement Program
Description of Program Procedures
fll$11blll~ R~lulrements- Eligibility requirements must be met for both the applicant household and the structure.
Eligibility for assistance is completed in two phases as described in Sections I.A. and I.B. below.
A. ApplicanV~-Iousehold Eligibility Requirements Are:
1. Must be a United States citizen or a legal resident alien.
2. Must have owned and occupied the single-family-dwelling unit for not less than three consecutive years. (The
period of time an applicant has lived in a property under a lease for purchase/or contract for deed form of
purchase may be taken into consideration in calculating the three consecutive years.)
3. Must hold a Fee Simple Title to the property.
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 rehabilitation assistance. The seller must provide the purchaser with a warranty deed on
the property to satisfy the eligibility requirement of item I.A.3. above.
b. If applicant(s) irtherited property, the legal documents establishing applicant(s) as the sole deed holder
must be on file in the Real Property Records of the Denton County Clerk's Office. If applicant can
provide proof of residency and financial responsibility for this property for the most recent three (3)
consecutive years, the three-year consecutive ownership requirement may be waived.
4. Must meet program's income limits.
a. Gross annual total household income is at or below 80 percent the current Area Median Income (AMi)
adjusted for family size. Current maximum income limit by household size is:
NumberofPeople 80%oftheAMI
Livinq in Household Maximum lncome Limit
1 $37,250
2 $42,550
3 $47,900
4 $53,2OO
5 $57,450
6 $61,700
7 $65,950
8 $7O,2OO
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 home is excluded in total assets calculation.
NOTE 2: Annual income and asset income are calculated using HUD's most current Section 8 Income
guidelines and rules as established ha the Technical Guide for Determining Income.
Must be in good credit standing with and exhibit the financial ability to pay creditors including the following
basic housing expenses:
a. Home Mortgage Payment including the loan with the City of Denton to rehabilitate property
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. Homeowner may be required to apply for a loan to provide the program-required owner contribution toward
project cost (see Section I/I.A.).
7. Pre-existing mortgage note balance cannot exceed 80 pement of the property's appraised value as set by the
Denton Central Appraisal District (cannot exceed 70 percent of the property's appraised value to participate in
the Optional Recnnstmction Program).
NOTE: The City of Denton reserves the right to request an independent market analysis.
8. 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.
B. Property Eligibility Requirements
1. Must be classified as a single-family-dwelling unit 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 structure unsafe or unsanitary.
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.
4. Must be serviced by a City-approved water supply, sanitary sewer and electrical system.
5. Must meet all of the City of Dentun's Land Development Codes.
6. Must be feasible for rehabilitation as defined in Section IV of these Program Guidelines.
7. Must be covered by an approved homeowner's insurance policy.
NOTE: If an applicant's property is not currently insurable because of/ts present condition, the
applicant must obtain a homeowner's insurance policy quote (from any reputable insurance agency).
The quote should be based on the after-rehabilitation structural status. Uninsurable applicant(s) should
inform The Insurance agent that the structure will be rehabilitated to meet all current Building,
Electrical, Plumbing and Fire-Safety codes. Applicant must provide this quote to the Community
Development Division and sign a NOTICE OF INTENT AND AGREEMENT TO OBTAIN A
HOMEOWNER INSURANCE POLICY to satisfy this eligibility requirement.
8. A property that has been previously rehabilitated with Federal or State grant funds after March 1995 is not
eligible for assistance. Properties having received assistance before April 1995 may be eligible for additional
assistance aficer eight (8) years from the date of the last assistance.
9. With the exception of 1 .B.8. above, households previously assisted with HOME funds may be eligible for rehab
assistance based on availability of funds and federal regulations.
II. Application Processln.
A. To be placed on the waiting list, applicants must meet the following guidelines:
1. Household's total gross annual income does not exceed current program income limits.
2. Owner is the occupant of a single-family dwelling unit for not less than three consecutive years.
3. Property is located in a Targeted Neighborhood (see Appendix 2)
4. Applicant must complete a Waiting List Application Forrn and attach a copy of property deed. (WaitingList
Application Forms are available at the Commuff~ty Development Division, 101 S. Locust Street, Suite 500,
Denton, Texas, 76201,940-349-7726.)
B. A household is assigned the next available number on the waiting list, in the order, by time and date the completed
waiting list application is received by the Community Development Division.
6
C. When applicant reaches the top of the waiting list, s/he will be notified in writing to complete the application
process. The letter of notice to apply for assistance requests applicant to provide the following items:
Copy of Deed or Warranty Deed for the property to be rehabilitated (applicant must be deed holder)
Name/mailing address of your mortgage company (if you have a mortgage payment)
Name/mailing address of your Homeowner insurance policy provider with "paid" receipt or canceled check
Current year's "paid" Property Tax receipts from DISD, City and County tax offices.
Most current Notice of Appraised Value from the Denton Central Appraisal Distdct
Current year's Income Tax Return with W-2's, 1099's, etc. for each household member who tiled tax returns
Social Secudty number(s) for household members who receive Social Secudty benefits
Most current income statement (if you receive Social Secudty benetits)
Paycheck stubs for last four weeks for each employed household member
Employers' names/addresses for each employed household member
Names and addresses of retirement income or any other income sources (ALL INCOME SOURCES MUST BE
DISCLOSE[~RETIREMENT, RENTAL/HAP INCOME, AFDC, FOOD STAMPS, ETC,)
Divorce decree if you receive child/other support Eom a divorce or if you were awarded deed to your property through a
divorce
Two most current months' statements (must include names/addresses/account numbers of all banks, credit unions, savings
banks, IRA accounts, etc. for all household members who have any of these types of accounts
Bills for the last twelve months from TXU, CoServe, ONCOR and City Utilities. (If you don't have copies of the last
twelve months bills, TXU, CoServe, ONCOR or City of Denton Utilities will mail you a summary. Please be sure the
summary has your current balance stated.)
NOTE: Deadlines given for contacting the CD office to make an appointment to apply and those given for submitting
application information will be stated in the notice to apply letter (See Section II.C.). The deadlines will be
enforced.
D. Applicant must provide all information requested in II.C. above that applies to his/her household and complete all
required verification forms in the application packet. All provided information must be current and up to date.
Household income will be re-verified prior to contract signing. All information will be verified by Community
Development staff. If any information is found to have been intentionally falsified, the application will be rejected
and the applicant will not be allowed to reapply to this program.
E. Community Development staff will calculate the gross annual household income and determine the percent of
income spent for housing expenses.
F. Community Development staffwill notify eligible applicant(s) of the financial assistance catego~ 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 for rehabilitation process. Ineligible applicants will be notified of the reason their
application for assistance is being rejected.
III. Description Of Financial Assistance Cate~lorles
A. Applicant must attend a credit evaluation meeting with Consumer Credit Counseling Services, Inc. Also, obtain a
loan, or provide from personal funds a personal contribution toward the rehabilitation of the property. The amount
of private funds a household is asked to contribute to the project is based on a sliding scale as follows:
Moderate (80%-+65%AMI) Income Households : 1°/o of total project
Low Income (65%-+50%AMI) Households = .75% of total project
Very-Low Income (50%-+30%AMI) Households = .5% of total project
Exlremely-Low tacome (0-30%AMI) Households= .25% of total project
To be eligible for assistance through the City of Denton's Home Improvement Program a family must be in good
credit standing and exhibit the ability to pay back a rehab loan.
The City of Dentun will fund the remaining project cost. This City funded portion of the project has a loan lien
period and financial assistance categories for those who qualify for the Home Improvement Program. The loan lien
period categories are based on project cost. The financial assistance categories are based on the Oualifvinr, Income
Limits and Ranges for the City of Denton's Federally Assisted Programs (see Appendix I to these guidelines
for current income limit ranges). A description of the loan lien period and financial assistance categories and their
requirements are:
Loan Lien Period Cateqories:
Project Cost Less than $10,000
Project Cost Between $10,000 - $25,000
Project Cost Between $25,001 & up
Financial Assistance Categories:
1.
= 5 year lien (60 months)
= 10 year lien (120 months)
= 15 year lien (180 months)
70 Percent Rehabilitation Loan / 30 Percent Deferred Payment Loan: Applicants whose gross annual
household income falls above 65 percent up to 80 pement of the area median family income limits will qualify
for this two-part loan;
a. a 3 percent interest loan with the loan amount being based on 70 percent of the total City-funded project
cost amortized over the Loan Lien Period. The lien will not be released on this part of the loan until all
payments are received in full by the City of Denton; and
b. a deferred payment loan with the loan amount being based on 30 percent of the total City-funded project
cost. A detailed description of the deferred payment loan is found below at the end of sectiun III.B.4.
2. 40 Percent Rehabilitation Loan / 60 Percent Deferred Payment Loan: Applicants whose gross annual
household income fails above 50 percent up to 65 percent of the area median family income limits will qualify
for this two-part loan;
a. a 3 percent interest loan with the loan amount being based on 40 pement of the total City-funded project
cost amortized over the Loan Lien Period. The lien will not be released on this part of the loan until all
payments are received in full by the City of Denton; and
b. a deferred payment loan with the loan amount being based on 60 percent of the total City-funded project
cost. A detailed description of the deferred payment loan is found at the end of section III.B.4.
3. 20 Percent Rehabilitation Loan / 80 Percent Deferred Payment Loan: Applicants whose gross annual
household income falls above 30 percent up to 50 percent of the area median family income limits will qualify
for this two-part loan;
a. 3 percent interest loan with the loan amount being based on 20 percent of the total City-funded project
cost amortized over the Loan Lien Period. The lien will not be released on this part of the loan until all
payments are received in full by the City of Denton; and
b. a deferred payment loan with the loan amount being based on 80 percent of the total City-funded proj eot
cost. A detailed description of the deferred payment loan is found at the end of section III.B.4.
4. 10 Percent Rehabilitation Loan / 90 Percent Deferred Payment Loan: Applicants whose gross annual
household income falls at or below 30 percent of the area median family income limits will qualify for this two-
part loan;
a. a 3 pement interest loan with the loan amount being based on 10 percent of the total City-funded project
cost amortized over the Loan Lien Period. The lien will not be released on this part of the loan until all
payments are received in full by the City of Denton; and
b. a deferred payment loan with the loan amount being based on 90 percent of the total City-funded project
cost. A detailed description of the deferred payment loan is found at the end of section III.B.4.
*DESCRIPTION OF A DEFERRED PAYMENT LOAN
A deferred payment loan shall carry 0 percent interest and continue until the applicant satisfies the conditions listed
in the deed of trust and promissory note executed prior to project start date. There are no monthly payments.
Deferred payment loans are secured by a 1lan on the property. For each month the applicant lives on the property, a
monthly payment amount established in a promissory note will be forgiven. If the property is sold or transferred
before the lien period expires, the applicant is credited for every month of residency. The credit is subtracted from
the total loan amount to determine the unforgiven loan balance. The unforg~vcn balance is owed and becomes due to
the Community Development Program. Amounts received are used as program income. The City of Dentun will be
in the first lien position on all rehabilitated dwellings. However, in situations where first lien position is not feasible,
the City will accept a second lien position subject to the review and approval of the Community Development
Administrator. The lien will not be released unless the following conditions are met:
1. The applicant must reside in the unit for the full period of the lien.
2. The property must be maintained to meet City code requirements.
3. Mortgage payments must be met on a thnely basis.
4. Home applicant must provide documentation of adequate homeowner's insurance, including casualty and fire
coverage, and the City must be listed as a Mortgagee on the Certificate of Insurance to be notified in case of
policy cancellation.
NOTE: The Deed of Trust Contract requires the applicant, upon completion of the rehabilitation, to maintain
and/or purchase, for the full length of time which the City of Denton will have a lien on property, an
insurance policy that: covers all improvements resulting from the rehabilitation for their full insurable value;
provide fire and extended coverage, including windstorm coverage; provides flood insurance at any time
property is in a flood hazard area. Applicant agrees to comply at all times with the requirements of the 80
percent coinsurance clause; and keep any buildings occupied as required by the insurance policy.
5. If within the period of the lien the applicant defaults on their deferred payment loan or the payable loan, the lien
will be called due in full and foreclosure proceedings may be initiated. 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.
Repayment Policy for Financial Assistance: The applica,nt must agree to have a lien placed on their property until
they have satisfied the requirements of the promissory note. The lien will remain until the loan has been paid in full.
If for any reason the loan recipient decides to sell or rent the pmperty before the lien's terms are all met, the note's
balance will become due.
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, should the legal heirs to the propet~ty decide to sell the property, the City of
Denton will settle for the lesser of.'
a. 7~ par~ent ~f the pr~perty~ s market value (based ~n an appr~ved independent appraisal at the time ~f sa~e); ~r~
b. The payoff balance ofthe lien due the City of Denton at the tmie the applicant passed away or is no longer able
to reside in his/har home.
Liens will remain in effect until the grantee has met all requirements as specified in the promissory note. In the
event of the sale of the property, any unpaid balance of the loan and the total deferred loan amount will become due
immediately. If, in the event of the death of the grantee, a family member who meets the Program's income limits
who takes up residency in the property and who becomes the sole deed holder of the property must apply and qualify
to the Community Development Division for continued assistance with the loan. The assistance level will be based
on current-year Program guidelines and the applicant-owner will be required to sign a Modification and Extension of
Real Estate Note and Lien. Failme to do so can result in default on the loan, the lien will be called due in full and
foreclosure proceedings may be initiated. 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.
If, after the loan payback 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 purposes of this program
"permanent loss" is defined as:
1. death
2. retirement (must be 62 years of age or older)
3. permanent disability
4. Other substantial permanent loss of income, when approved by Community Development Administrator.
All household members must complete all income information and forms as required in Section II - Application
Processing 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 f'mancial 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 Modi[ication andExtension o[
Real Estate Note and Lien reflecting the adjustment and/or extension of the note.
IV. Feasibility For Rehabilitation Process
A. A decision as to whether a structure is feasible for rehabilitation is made after a complete assessment of the
following factors.
I. Completion of a detailed inspection of the property by Community Development staff is conducted. This
inspection includes completing a list of all deficiencies that must be corrected in order to bring the structure up
to minimum program standards (compliance with HUD's Section 8 Minimum Housing Quality Standards) and
City of Denton building codes.
2. Determine if the rehabilitation cost will be affected by: the zoning of a property, a property being located in a
designated 100-year floodplain or floodway, a need to abate possible presence of lead-based paint, possible
historical restoration requirements or if a rehab will reduce noise levels if property is in a high noise area.
NOTE: The Floodplain Management regulations limit the total cost of all non-code repairs for any structure
located in a designated 100-year floodplain to not exceed 50 pement of a property's (structure only) pre-
rehabilitation appraised value as set by the Denton Central Appraisal District.
3. Determine if the framework and foundation of a structure are stable, or can be made stable through
rehabilitation.
4. 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 cm2 (one milligram per centimeter squared), or 5000 ppm (parts par million). The reduction
techniques used by this program are described and found in the U. S. Department of Housing & Urban
Development's publication, Guidelines For The Evaluation and Control Of Lead-Based Paint Hazards In
Housing, issued June 1995.
5. 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. The City will follow the standards consistent with the
Community Development Division Replacement Housing Space Allowances Policy when considering the
number of bedrooms needed to avoid overcrowding.
B. Using all information obtained in items 1V.A. 1-5. above, a cost estimate and structural evaluation will be completed.
A project with a cost estimate above Program Maximum Limits is not eligible for rehabilitation assistance.
Applicant may be referred to Optional Reconstruction Program.
C. PROGRAM MAXIMUM LIMITS FOR REHABILITATION
A rehabilitation that cannot meet all of the following limit tests is considered cost prohibitive or not feasible for
rehabilitation.
10
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 if house needs to comply with historical requirements.
2. Rehabilitation will not exceed the current Maximum Home Subsidy Limits for Denton as set by HUD.
3. The after rehabilitation appraised proper~ value plus all costs expended to complete the project (including the
other funds and owners portion) will not exceed the current Single Family Mortgage Limit for Denton as
established by HUD.
D. PROGRAM MINIMUM LIMITS FOR REHABILITATION
A structure needing less than $5000 of repairs is not eligible for rehabilitation assistance.
An applicant who feels that s/he has been unjustly denied rehabilitation assistance under the City's Home Improvement or
Optional Recons~uction Program should follow the appeals procedure outlined in Section V.
V. Appeals Provisions:
A. Request for Waiver: The City of Danton's Home improvement Program has been developed to adhere to a set of
guidelines in order to assure proper adrniinstrafion and management of the Home Improvement Program. In the
event that an applicant feels that his/her circumstances require special consideration, s/he can request, in writing, a
waiver from the usual requirements. All requests should specify the requirement(s) to be considered for waiver and
state the applicant's reason(s) or special circumstances why s/he believes a waiver should be approved. Requests
will be reviewed by the Community Development Administrator on a case-by-case basis. Applicant will be notified
in writing of the Community Development Division's final decision.
B. Appeals Procedure: Applicants, who have been determined by the Community Development Administrator to be
ineligible for rehabilitation, may appeal this decision to the Department Director. A written appeal must be
submitted.
The Department Director shall issue a written response within fifreen days of receiving the request.
VI. Contractor Selection And Monitoring
All housing rehabilitation recipients are responsible for finding a contractor who will develop a proposal to make the
necessary repairs to their home. Your contractor's proposal must be submitted to the Community Development Division
within 30 days from the date you receive the work order write-up prepared by the Community Development Housing
Inspector.
Contact any reputable and experienced contractor and request a bid for the required work.
IF YOU HAVE ANY TROUBLE FINDiNG A CONTRACTOR, contact any of the following places for assistance:
Your local Better Business Bureau
Any fi'iends or neighbors who have had remodeling done to their properties.
Chamber of Commerce
Community Development Division Contractor's List
When a contractor comes to look at your home you should:
Show him/her the mandatory work items that have been identified by the Community Development Housing
Inspector.
Advise him/her that the bid proposal must be returned to you or the Community Development Division for
submission to the rehabilitation program on or before the due date.
DO NOT SIGN ANY AGREEMENT WITH THE CONTRACTOR.
Bring the contractor's bid proposal to the Community Development Division at 101 S. Locust Street, Suite 500, where
you made your original application. The Community Development Rehabilitation Conslauction Specialist or the Housing
11
Programs Manager will review the proposal to verify that:
1. The contractor is licensed and has all City-required insurance coverages.
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 rehabilitation costs are reasonable.
5. The contractor you have chosen has not been disqualified (debarred) by any local, State or Federal government
agency.
The bid proposals that are submitted by the applicant will be reviewed by the Community Development Housing
Rehabilitation Inspector to determine if the total bid price is reasonable and under the maximum allowable amount. THE
CITY OF DENTON AND THE APPLICANT RESERVE THE RIGHT TO REJECT ANY AND ALL BIDS.
If the bid proposal selected by the applicant is approved by the Community Development A~strator, then the
Community Development staff shall proceed with the review of all other forms submitted by the contractor. 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.
Once the contractor has been selected and approved, 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 rehabilitation work, the City shall take appropriate action in
accordance with the provisions of the constmctiun contract to assure that the applicant is satisfied before making any
payment to the contractor. In the event a dispute eunnot 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 rehabilitation job, 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 the contractor's release form winch
states that all work has been completed to their (applicant's) satisfaction. The building code inspector shall sign a
final inspection form to confirm the same. At tins time, the contractor is required to submit to the Community
Development Division copies of all warranties and releases of liens fi.om subcontractors and suppliers. Community
Development will not authorize payment to the contractor until these documents are properly completed and
submitted. 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 rehabilitation 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. If no repairs are needed, the contractor will request that the applicant release the contingency
payment.
VII.Payment To Contractor
The contractor shall receive payment, minus the contingency amount, for all completed contracts within 15 working days
after fmal inspection approval. The contingency amount equals 10 percent of the total contract amount and will be
withheld for thirty (30) days from the date of frnal acceptance by CD staff. Afier thirty days, if no additional or warranty
work remains, the contractor must request fi.om applicant an approval to release withheld contingency funds.
A contractor may request interim payments throughout the course of the project. Interim payments will be made available
12
to the contractor upon applicant and inspector approval of any contract work that has been completed. Contractor will
submit a CONTRACTOR REQUEST FOR PAYMENT AND PERIODIC STATEMENT fi.om the applicant when
requesting payments.
An "All Bills Paid" affidavit and release of lien fi.om all subcontractors and suppliers must be submitted by the contractor
to the Community Development Division before final payment can be released to contractor. All electrical, plumbing,
mechanical and roofing permits and termite inspection report must also be submitted to the Community Development
Division prior to releasing contingency payment to the contractor.
VIII. Contractor Debarment
A contractor will be declared ineligible to participate in projects funded by the City of Denton's 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.
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 fi.om the date of
the notification letter.
Contractors debarred fi.om the Home Improvement Program may no longer contact applicants receiving CDBG or HOME
grant funds with the intent of providing a bid for a project.
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Optional Reconstruction Program
Description of Program Procedures
Unless herein stated otherwise, the general operating procedures contained in the City of Denton Community
Development Home Improvement Program Guidelines will be followed.
I. PURPOSE
A. The City of Denton, Texas, will provide assistance necessary to accomplish the reconsWaction of dwellings not
feasible for rehabilitation. The Optional Reconstruction Program will provide funds to demolish existing
dilapidated dwellings and reconstruct adequate, decent, safe and sanitary replacement dwellings. In addition,
the City will also promote the elimination of slum and blight that exists in the City.
B. Reconstruction payments and assistance will be carried out under the City of Denton% Community
Development Program as an eligible expense fi'om project funds. Assistance shall be subject to the availability
of grant funds and U.S. Department of Housing and Urban Development (HUD) implementing regulations.
Administrative procedures will be modified to meet any change in mles 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's Community
Development Division. This office will serve as the approving office for rehousing agreements and for
contractual and budget changes as needed for project completion.
B. The Community Development Administrator will have the responsibility for fmal determination of the amount
of reconstruction assistance to be made available to individual applicants in accordance with the implementing
procedures.
C. The Community Development Administrator will be responsible for approval of applinant eligibility for the
program and final approval of selection of applicants to be assisted. This will be based upon relative need of
applicants on the City's list of houses that have been determined infeasible for rehabilitation under the Home
Improvement Program.
III. IMPLEMENTATION PROCESS
Steps in implementing the program will be as follows:
A. Community Development Division maintains the list of applicants to the Home Improvement Program. When a
determination has been made that the structure is not feasible to rehabilitate to minimum standards under the
City's Home Improvement Program. Eligible applicants will be assisted in the reconstruction of their home.
They will be assisted in the Home Improvement Program Waiting List order.
B. Applicant is notified that the rehabilitation of the structure has been determined to be infeasible. Eligibility
requirements for the Optional Reconstruction Program must be met for applicants to be placed on the Optional
Reconstruction Program waiting list.
C. Staff evaluates applications for reconstruction assistance as specified in Section VI. Staff processes
applications as possible under funding and staff limitations.
D. Applicant is informed of available assistance.
E. Applicant submits an Optional Reconstruction Program Application & Temporary Relocation
Questionnaire, acknowledging receipt of information explaining the City's program, and requesting
reconstruction assistance to enable applicant to obtain suitable and adequate housing.
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F. Community Development Staff determine whether or not approval of applicant's Optional Reconstruction
Program Application & Temporary Relocation Questionnaire reasonably may be expected to result in the
successful and feasible rehousing of the applicant. In cases where the applicant's general health or income
level would preclude his or her adequate and responsible operation ora replacement dwelling; and/or cases in
which the costs of the replacement dwelling would be substantially above the costs of typical cases; and to the
extent that the probability of the City reaching its Community Development Program goals would be
endangered due to cost overruns, the applicant's request may be denied. The applicant will be notified in
writing of the determination and, if the request is not approved, the reasons for denial. When the determination
is approval of the applicant's request, a Notice of Approval will be sent informing the applicant that the City is
authorized to enter into a rehousing agreement with the applicant for a specified Replacement Housing
Payment determined appropriate by the city pursuant to its Reconstruction Policy. Prior to any agreement
being executed between the applicant and the City, the Community Development Division will comply with
the public disclosure and notification/authorization to and from HUD requirements according to 24CFR Part
70, Section 104(d), Reconstruction and One-for-One Replacement Housing Requirements.
G. A Rehousing Agreement is executed between the applicant and the City, under the terms of which the applicant
agrees to move permanently and voluntarily from the dwelling on or before a specified date.
H. Community Development Staff will provide counseling and assistance as needed to applicants in order to
facilitate the applicant's rehousing, including referrals to buildem, suppliers, etc.
I. The applicant and the Community Development Division agree to the arrangement and method of the approved
payments, the applicant will execute a contract with a builder for the selected replacement dwelling. The
applicant will also contract for the demolition of the substandard dwelling and for lot and site clearance and
preparation.
J. When appropriate, the applicant voluntarily vacates the substandard dwelling.
K. The replacement dwelling is constructed on the same lot as the original and is inspected by the City Building
Inspections Division to determine adequacy and compliance with City codes.
L. City certifies that the replacement dwelling is decent, safe, and sanitary and ready for occupancy. City issues a
fmal building inspection.
M. Applicant is required to obtain a Homeowner's Insurance Policy to cover the reconstructed home, as required
by Deed of Trust. Coverage is required prior to the homeowner(s) moving in. Failure by the owner, or their
representatives, to obtain homeowner's Insurance could result in the Community Development Office
obligation to obtain insurance for the property and to take immediate action to begin foreclosure of the
property.
N. Applicant accepts replacement home.
O. A formal closing ceremony is held and applicant acknowledges receipt of payment schedule.
P. Upon completion of all actions in regards to reconslmction, applicant acknowledges in writing that all
payments, assistance, and conditions of the rehousing agreement have been received to the applicant's
satisfaction.
Q. Applicant occupies replacement structure.
IV. ELIGIBILITY REQUIREMENTS
Eligibility for reconstruction payments and assistance shall be established as follows:
A. Applicant has applied for rehabilitation assistance under the City of Denton's Home Improvement Program.
B. Applicant was rejected for rehabilitation assistance on the grounds that the dwelling was not feasible for
rehabilitation.
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C. Applicant is the owner-occupant ofthe dwelling for which reconslruction assistance is being requested and s/he
resides within a Targeted Neighborhood (see Appendix 2). The dwelling has been the applicant's principal
residence for a minimum of 5 years prior to application for reconstruction assistance.
D. Applicant has presented proof of ownership by General or Special Warranty deed (City staffverifies proof of
ownership through a title search
E. An existing mortgage note balance cannot exceed 70 percent of the property's estimated after reconstruction
appraised value as set by the Denton Central Appraisal District. (Note: The City of Denton reserves the fight
to request an independent market analysis.)
F. Applicants shall provide complete and accurate information regarding their household composition, household
income, and housing situation. Failure to disclose information that may affect eligibility requirements shall
also constitute fi.aud. 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.
G.Applicants must demonstrate that their income exceeds their projected housing expenses.
H. Applicants agree to conform to Denton Code Enforcement requests prior to being determined eligible for
replacement housing assistance. Applicants agree to maintain dwelling and exterior grounds in accordance
with applicable city ordinances.
I. Applicants are required to attend the Successful Homeownership Workshop, with emphasis being placed on
maintenance, budgeting, cost effective decorating, and responsibilities of home ownership.
J.Applicant may be required to apply for a loan to provide the program-required personal contribution.
V. FEASIBILITY FOR RECONSTRUCTION
Feasibility for reconstruction is based on determining all related costs to complete a reconstruction project. Total
project costs cannot exceed the maximum amount allowed as set by the current Section 221(d)(3) Lowest Home
Per-Unit Subsidy Limits for the State of Texas as set by the Department of Housing and Urban Development
(HUD). Project costs include, but are not limited to, the cost of demolition, site preparation, cost of replacement
dwelling, rifle search fee, and/or required City permit fees for construction.
VI. SELECTION OF RECIPIENTS FOR ASSISTANCE
A. Initial recipients of this program will be taken from the list of applicants residing in structures determined to be
infeasible to rehabilitate. Additional recipients will be added during subsequent operation of the City of
Denton's Home Improvement Program.
B. The number of recipients to receive assistance will be subject to availability of ftmds.
C. Applicants will be placed on a waiting list for reconstruction assistance based on the time and date they
originally applied to the Community Development Division for rehabilitation assistance.
VII. ALLOWABLE EXPENSES AND CATEGORIES OF FINANCIAL ASSISTANCE
A. The primary form of assistance to be provided will be the use of Federal HOME grant Innds to pay for the cost
of the replacement dwelling and costs related to replacing a substandard unit.
B. In general the City will follow the standards consistent with the Community Development Division
Replacement Housing Space Allowances Policy when considering the number of bedrooms needed to avoid
ovemrowding. The policy allow for:
A household consisting of one person is eligible for two bedrooms. A household consisting of more than
one person is eligible for three bedrooms.
C. The City of Denton has FOUR FINANCIAL ASSISTANCE CATEGORIES for those who qualify for the
Optional Reconstruction Program. These categories are based on the Qualifying Income Limits and Ranges
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for the City of Denton's Federally Assisted Programs (see appendix 1 to these guidelines for current
income limit ranges). A dascription of the financial assistance categories and their requirements are:
1. 70 Percent Reconstruction Loan / 30 Percent Deferred Payment Loan: Applicants whose gross annual household
income falIs above 65 percent up to 80 percent of the area median family income limits will qualify for this
two-part loan;
a. a 3 percent interest loan with the loan amount being based on 70 percent of thc total City-funded project
cost amortized over 240 months. The lien will not be released on this part of the loan until all 240
payments are received in full by the City of Denton; and
b. a deferred payment loan with the loan amount being based on 30 percent of the total City-funded projant
cost. A detailed description of the deferred payment loan is found below at the end of section VII.CA.
2. 40 Percent Recoasa'uction Loan / 60 Percent Deferred Payment Loan: Applicants whose gross annual household
income falls above 50 percent up to 65 percent of the area median family income limits will qualify for this
two-part loan;
a. a 3 percent interest loan with the loan amount being based on 40 percent of the total City-funded project
cost amortized over 240 months. The lien will not be released on this part of the loan until all 240
payments are received in full by the City of Denton; and
b. a deferred payment loan with the loan amount being based on 60 percent of the total City-funded project
cost. A detailed description of the deferred payment loan is found at the end of section VII.C.4.
3. 20 Percent Reconsh'uction Loan / 80 Percent Deferred Payment Loan: Applicants whose gross annual household
income falls above 30 percent up to 50 percent of the area median family income limits will qualify for this
two-part loan;
a. 3 percent interest loan with the loan amount being based on 20 percent of the total City-funded project
cost amortized over 240 months. The lien will not be released on this part of the loan until all 240
payments are received in full by the City of Denton; and
b. a deferred payment loan with the loan amount being based on 80 percent of the total City-funded project
cost. A detailed description of the deferred payment loan is found at the end of section VII.C.4.
4. 10 Percent Reconstruction Loan / 90 Percent Deferred Payment Loan; Applicants whose gross annual household
income falls at or below 30 percent of the area median family income limits will qualify for this two-part loan;
a. a 3 percent interest loan with the loan amount being based on I0 percent of the total City-funded project
cost amortized over 240 months. The lien will not be released on this part of the loan until all 240
payments are received in full by the City of Dentun; and
b. a deferred payment loan with the loan amount being based on 90 percent of the total City-funded project
cost. A detailed description of the deferred payment loan is found at the end of sectiun VILC.4.
*DESCRIPTION OF A DEFERRED PAYMENT LOAN
A deferred payment loan shall carry 0 percent interest and continue until the applicant satisfies the conditions listed
in the deed of trust and promissory note executed prior to project start date. Deferred payment loans are secured by a
lien on the property. There are no monthly payments. After the applicant has lived on the property for the required
240 months (20 years), as stated in the contracts, the deferred payment loan will be forgiven. If the property is sold
or transferred before the lien period expires, the total deferred loan amount is owed and becomes due to the
Community Development Program. Amounts received are used as program income. The City of Denton will be in
the fh:st lien position on all recons~ucted dwellings. However, in situations where first lien position is not feasible,
the City will accept a second lien position subject to the review and approval of the Community Development
Administrator. The lien will not be released unless the following conditions are met:
1. The applicant must reside in the unit for the full period of the lien.
2. The property must be maintained to meet City code requirements.
3. Mortgage payments must be met on a timely basis.
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4. Home applicant must provide documentation of adequate Homeowner's Insurance, including casualty and fire
coverage, and the City must be listed as a Mortgagee on the Certificate of Insurance to be notified in case of
policy cancellation. Homeowner's Insurance documentation must be received prior to applicant moving in to
completed reconstruct house.
NOTE: The Deed of Trust Contract requires the applicant, upon completion of the reconstruction, to
maintain and/or purchase, for the full length of time which the City of Denton will have a lien on property, an
insurance policy that: covers the home for its full insurable value; provide fire and extended coverage,
including windstorm coverage; provides flood insurance at any time property is in a flood hazard area.
Applicant agrees to comply at all times with the requirements of the 80 percent coinsurance clause; and keep
any buildings occupied as required by the insurance policy.
5. If within the period of the lien the applicant defaults on their deferred payment loan or the payable loan, the lien
will be called due in full and foreclosure proceedings may be initiated. 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.
D. Repayment Policy for Financial Assistance: The applicant must agree to have a lien placed on their property until
they have satisfied the requirements of the promissory note. The lien will remain until the loan has been paid in full.
If for any reason the loan recipient decides to sell or rent the property before the lien's terms are all met, the note's
payable loan balance and the full amount of the deferred loan will become due.
E. 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, should the legal heirs to the property decide to sell the property, the City of
Denton will settle for the lesser off
a. 7~ percent ~f the pr~perty~s market vaine (based ~n an appr~ved indepandent appr~dsa~ at the time ~f sa~e); ~r~
b. The payoffbalance of the lien due the City of Denton at the time the applicant passed away or is no longer able
to reside in his/her home.
F. Liens will remain in effect until the grantee has met all requirements as specified in the promissory note. In the
event of the sale of the property, any unpaid balance of the loan and the total deferred loan amount will become due
immediately. If, in the event of the death of the grantee, a family member who meets the Program's income limits
who takes up residency in the property and who becomes the sole deed holder of the property must apply and
qualify to the Community Development Division for continued assistance with the loan. The assistance level will be
based on current-year Program guidelines and the applicant-owner will be required to sign a Modification and
Extension of RealEstate Note andLien. Failure to do so can result in default on the loan, the lien will be called due
in full and foreclosure proceedings may be initiated. 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.
G. Allowable expenses will include:
1. Cost of total demolition and clearance of the dilapidated structure, lot clearance, and preparation ofjob site for
new replacement dwelling.
2. Cost to reconstruct safe, sanitary, decent replacement dwelling.
3. Other expenses the Community Development Division determines to be necessary to facilitate the
reconstruction of the substandard property (Ex: title search, filing fees, platting, engineering reports...)
H. Community Development staff will also provide assistance and counseling to applicants as needed, including the
following:
1. Information on the program and rehousing options available.
2. Assistance in soliciting bids for replacement housing.
3. Assistance in contractual compliance between applicant and contractor.
4. Assistance in inspection of consmtction of replacement dwelling, if applicable.
I. If, after the loan payback 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
18
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 purposes of this program
"permanent loss" is defined as:
1. death
2. retirement (must be 62 years of age or older)
3. permanent disability
4. Other substantial permanent loss of income, when approved by Community Development Administrator.
All household members must complete all income information and forms as required in Section II - ~4pplication
Processing to determine if an adjustment and/or extension to the payable portion of the note is eligible. A determination
will be made after evaluating the household size and income using the program guideline income limits and financial
assistance categories that are being used at the time the request for reduced loan payment is made. When a loan
adjusmaent and/or extension is granted, the applicant must sign a Modi£~cation and Extension of Real Estate Note and
Lien contract reflecting the adjustment and/or extension of the note.
VIII. REHOUSING AGREEMENT
Each applicant assisted through the program will sign a rehousing agreement with the City, which outlines the
responsibilities of each. The agreement establishes a date on which the applicant agrees to permanently vacate the
present structure, agrees to demolition of the present dilapidated structure, agrees to occupy the replacement structure
when structure is completed and ready to be inhabited, and agrees that temporary housing will terminate when sU-acture
is ready for occupancy as determined by the City of Denton.
IX. FINAL INSPECTION - CERTIFICATE OF OCCUPANCY
The City of Denton will conduct a final inspection of all housing units made available through the program to determine
that the replacement unit is approved for occupancy and that all items identified in a "punch list" have been corrected.
This Certificate of Occupancy will serve as evidence to HUD of the City's determination that the dilapidated structure has
been replaced by a decent, safe, and sanitary dwelling and that the family has been successfully relocated.
19
Appendix 1
Appendix 2
Appendix 3
Appendix 4
APPENDICES
Qualifying Income Limits and Ranges for the City of
Denton's Federally Assisted Programs
Target Neighborhoods Map
Optional Reconstruction Program Application and
Temporary Relocation Questionnaire
Optional Reconstruction Program Rehousing
Agreement for Applicants
APPENDIX 1 FY 2003/2004
City of Denton - Community Development Division
Qualifying Income Limits for Federally Assisted Programs
Maximum Income Levels and *Two-Part Loan Percentages
*70% Payable Loan I *40% Payable Loan/ *20% Payable Loan/ *10% Payable Loan/
*30% Deferred Loan *60% Deferred Loan *80% Deferred Loan *90% Deferred Loan
Family Owner Provided Funds: Owner Provided Funds: Owner Provided Funds: Owner Provided Funds:
f% of Total Cost .75% of Total Cost .5% of Total Cost .25% of Total Cost
Size
Moderate Income Low Income Very-Low Income Extremely-Low Income
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 two-part loan:
Part I: Payable Loan is based on a percent of the total City-paid project cost. The loan is payable and amortized over a period fi.om
between 60 to 180 months (5 to 15 years) for rehabilitation, based on cost of the project (see Section III.B.) and over 240 months (20
years) for reconstruction, both at a 3 percent interest rate (APR).
Part II: Deferred Payment Loan is based on a percent of the total City-paid project cost. This portion o£ the loan carries a zero
percent interest rate. The deferred payment loan continues until the applicant satisfies the conditions listed in the Deed of Trust and
Promissmy Note (executed prior to the project start date). There are no monthly payments. Deferred payment loans are secured by a
lien on the property. The loan deferral period is for a period from between 60 and 180 months (5 to 15 years), based on cost of the
pro.ieet (see Seetian III.B. for rehabilitation) and not less than (20 years) for reconstruction.
Income Limit Source: U.S. Department of Housing and Urban Development. Effective: February 2003
Gross income for all household members aged 18 and above must be included to deterw/me 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 f~ll or part-time students. Incomes £or household members aged 25 and older will be
included in determining the payback category for the household.
21
APPENDIX 2
City of Denton, Texas
Targeted Neighborhoods Map
22
APPENDIX 3
OPTIONAL RECONSTRUCTION PROGRAM APPLICATION
AND TEMPORARY RELOCATION QUESTIONNAIRE
Your participation in the Optional Reconstruction Program is voluntary. Reconstruction funds ara limited.
Therefore, the Program does not cover costs necessary for household to relocate during reconstruction
of property. Please complete the following questionnaire. This information wifi help our staff in
determining if you will be eligible for the Optional Reconstruction Program.
1. I undemtand that it is my responsibility to relocate my household and that I am responsible for all costs involved to do so?
Yes No
I understand that as a result of reconstruction, my appraised property value 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 undemtand that I am obligated to carry homeowner's insurance for the duretion of the lien (20 yearn) 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 amaware
that my insurance policy must cover the after-reconstruction appraised value of my property. I am financially prepared to
meet this increase.
Yes No
6. I understand that I must request that my insurance company list the City of Denton as a "Certificate 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 the Optional Reconstruction Program 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 accept this
as my application to be considered for the Optional Reconstruction Program.
Applicant's Signature Date
23
APPENDIX 4
CITY OF DENTON
COMMUNITY DEVELOPMENT PROGRAM
OPTIONAL RECONSTRUCTION PROGRAM
REHOUSING AGREEMENT FOR APPLICANTS
THIS AGREEMENT, made and entered into on (Date document will be signed), by and between the City of Denton, Texas, and
(Same of applicant signing document) hereinai~er referred to as Applicants. This agreement covers the slruc~ure occupied at the
following legal add~ess:
(Legal property description of dwelling to be reconstructed)
WHEREAS, The Applicant has heretofore requested and qualified for the Home Improvement Program with assistance from
the City in order to obtain adequate, decent, safe, and sanitary housing under the City's Community Development Block Grant
and HOME Program; and
WHEREAS, the City has determined that rehabilitation of the Applicant's residence is not a feasible alternative; and
WHEREAS, the City has determined that the Community Development Program will not provide the Applicant relocation
payments and assistance necassm3' to accomplish the voluntary relocation of the Applicant fi.om the substandard, tmrehabable
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 hereinat'cer set
forth, do agree as follows:
1. The Applicant agrees to vacate permanently the currently occupied substandard dwelling within I 0 days notice by the
City for the need to vacate.
2. The Applicant agrees and hereby authorizes the demolition and removal of the currently occupied dwelling and
clearance by the City of the property. The Applicant further releases the City from any and all claims arising from this
action.
3. The Applicant agrees to take possession and occupy the replacement dwelling when such dwelling is completed and the
City determines it to be ready for occupancy. The Applicant further agrees to sign any required instruments to effect this
item.
4. The Applicant agrees to provide and bear all financial costs necessary to relocate Applicant's household and furnishings
without assistance from the City of Denton.
5. The maximum budget authority for the Optional Reconstruction Program is (Maximum allowable funds for project), which
includes, but is not limited to, property title search fee, the cost to demolish the existing dilapidated structure 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 Reconsh'uction Guidelines in which to be moved from
the substandard property.
Applicant' Signature Date 2nd. Applicant' Signature Date
CITY OF DENTON:
Community Development Administrator
24