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HomeMy WebLinkAboutR-1999-100 Housing Program Guideline AmendmentRESOLUTION NO. R-99-1 0 0 A RESOLUTION approving and adopting amendments to the Housing Program Guidelines regarding various home ownership programs administered by the City of Yakima Office of Neighborhood Development Services. WHEREAS, the City of Yakima receives Community Development Block Grant (CDBG) and HOME funds from the United States Department of Housing and Urban Development; and WHEREAS, certain homeownership programs in the City have been developed and implemented with CBDG and HOME funds, such as the following programs: Single Family Housing Rehabilitation; Senior and Disabled Persons Home Repair; Home Ownership New Construction; Down Payment Assistance; and Single Family Rehabilitation/Restoration; and WHEREAS, and regarding administration of such programs, formal Housing Program Guidelines were reviewed and approved by the City Council on March 3, 1998; and WHEREAS, at its meetings on April 2, 1999, and July 8, 1999, the Council Neighborhood Development Committee reviewed and recommended adoption of the following amendments to the Housing Program Guidelines: • Increase the dollar limit of the Down Payment Assistance Program from $2,000 to $4,000; and • Implement the attached and incorporated ONDS Late Payment and Foreclosure Policy; and • Grant the City Manager the authority to appoint new members to the loan committee of the Housing Program; and WHEREAS, the City Council deems it to be in the best interest of the City of Yakima to approve and adopt the above amendments to the Housing Program Guidelines, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The following amendments to the Housing Program Guidelines are hereby approved and adopted: • Increasing the dollar limit of the Down Payment Assistance Program from $2,000 to $4,000; and (lk)ONDS/housing prog guidelines/amend/99/pm • The attached and incorporated ONDS Late Payment and Foreclosure Policy; and • Granting the City Manager the authority to appoint future members to the loan committee of the Housing Program. ADOPTED BY THE CITY COUNCIL this 3rd day of August, 1999. ATTEST: _Z, City Clerk QkpNDS/housing pros guidelines/amend/99/pm John Puccinelli, Mayor Proposed ONDS Late Payment and Foreclosure Policy There has been an increase in the number of city financed housing loans that are delinquent. As we make more loans with payments (rather than deferred loans), we anticipate that this will be an ongoing problem. Accordingly, we are proposing the - following policies and procedures. Once these are approved, a copy of the policies will be sent to each current borrower, and a copy included in all future loan application packets. We recognize that everyone experiences financial difficulties from time to time, and will make every effort to work with a borrower to help resolve their problem. It is not the desire of the city to take a home away from anyone. However, it is also true that by successfully completing the terms of a loan the borrower obtains clear title to the property, and the city is able to loan the same money to a new borrower. Thus it is in everyone's best interest that loan payments be made. In order to ensure the viability of the city home ownership programs, we propose the following policies: 1. The bank which services our loan portfolio has been instructed to mail out late notices at 30 days, and send us a monthly statement listing all late accounts. 2. If ONDS funds are in second position to a bank loan, the bank is required to notify us if they institute foreclosure proceedings. If we receive such notice, we will immediately file for foreclosure on our own. This policy will protect our interest in the property. If we do not do this, we risk losing our entire loan amount, since once a senior loan completes foreclosure, all junior loans are wiped out. 3. In addition, when a client is 30 days late, ONDS staff will contact the homeowner, both by phone and with a registered letter. We will be requesting payment, but also offering assistance if there is some temporary difficulty that we can help resolve. 4. In response to temporary difficulties, ONDS will offer, depending on circumstances, to either reduce payments or defer payments until the difficulty is resolved. One thing that must be remembered in altering payments is the need to stay current with that portion of the payment which covers taxes and insurance, and cannot be deferred. 5. Unless there are extenuating circumstances we have agreed to help mitigate, at 60 days, we will send the matter to the Legal Department to begin foreclosure proceedings. A copy of the letter to legal will go to the City Manager. 6. Foreclosure proceedings take a minimum of 190 days to complete. So the result of a foreclosure beginning at 60 days is a period of more than 8 months during which the homeowner can retain ownership of the home without making payments. During the foreclosure period, there is a period of time during which the homeowner can bring his payments current, by paying these and any costs associated with the foreclosure. There is then a period when the homeowner is allowed to keep the property by paying off the entire loan plus costs. At the end of the proceeding there is a sale at the county courthouse. The holder of the mortgage in foreclosure either gets ownership to the property if there is no one interested in bidding on the property, or others can bid an amount equal to or in excess of the amount owed, and purchase the property. 7. If ONDS ultimately ends up with title to the property, the Division will immediately begin working to market the home. Any needed repairs will be made so the home is brought to "move in" condition. _ _ _ Off icc of Neighborhood Development Services Housing Program Guidelines Funded in part by The U.S. Department of Housing and Urban Development EQUAL HOUSINO OPPORTUNITY T /�firr f /lf/Rlzi,. DISM 4/ OWILi.. /-s�:.,f�i.142,1 . A.1.1111401.4416 1 i v51u1ri V uiucjj,LCJ Table of Contents Program Description 1 Environmental Review Record 2 Applicant Eligibility 2 City Loan Underwriting 3 Property Inspection 3 Eligible Improvements 3 Bid Process 4 Preconstruction 4 Payments 4 Final Inspection 4 Warranty 4 Arbitration 5 Loan Approval r - Bank Financing 7 Subordination 8 Foreclosure 8 Relocation Assistance 8 Contractor Qualification Process 9 Contractor Escrow Bonding 9 Senior & Disabled Persons Home Repair 10 ODS Disclaimer 12" OFFICE OF NEIGHBORHOOD DEVELOPMENT SERVICES Housing Program Guidelines Throughout the country, cities are being challenged to attract reinvestment and new economic activity to remain competitive in a rapidly changing national and international economy. Competitiveness is critical to maintaining and growing the tax base needed to meet increasing costs of service delivery and infrastructure maintenance. One initiative underway in Yakima is the revitalization of east Yakima neighborhoods. Although not a new program, recent expanded community participation through the City's neighborhood planning process has resulted in a coordinated and multi -dimensional approach to these efforts. Economic development loans, infrastructure improvements, expanded service delivery, and housing programs are being funded with federal entitlement dollars from the U.S. Department of Housing and Urban Development. A significant commitment from these resources has been designated for homeownership programs. Homeownership programs provide two very important benefits: 1) assist families to buy a home in our east Yakima "Gateway Neighborhoods"; and 2) assist families currently living in these neighborhoods to rehabilitate their homes. Why are these efforts important? Homeownership is the backbone of a strong healthy neighborhood, and homeownership begin a journey that can create wealth for a family as property values appreciate. Homeownership creates a "player" out of every family owning their own home. A player who benefits from his or her working together with neighbors to improve their community, protect their investment and increase the value of their property. Such forces can be very strong and can sustain revitalization efforts far beyond the limited resources available through local, state or federal programs. It is this energy and this commitment that must be put in motion and supported. To encourage such private investment in the City's "Gateway Neighborhoods" the following homeownership programs have been developed and implemented with Community Development Block Grant (CBDG) and HOME funds from the U.S. Department of Housing and Urban Development: SINGLE FAMILY HOUSING REHABILITATION: Through this program the City of Yakima provides financial assistance to residents of the City to rehabilitate their home. Assistance is provided in the form of a loan for code required improvements to single family residential structures located in the City's target area east of 16th Avenue. (CDBG and HQQVIE funded) SENIOR AND DISABLED PERSONS HOME REPAIR: This program will fund materials and direct costs for repair to owner occupied low income elderly and/or disabled persons in the City of Yakima. Maximum assistance under this program is $2500 or a lifetime total of $5,000, unless approved in writing by the Manager of ONDS. Such exceptions may only be approved if a single priority emergency repair item requires a higher dollar amount such as roof repair. The average of all projects done during the year shall be $2500. Please note that this program is available city-wide. (CDBG funded) 1 HOME OWNERSHIP, NEW CONSTRUCTION: Utilizing a contractor set -a -side, this program will assist low and moderate income families purchasing newly constructed homes developed by contractors selected through a competitive process. A total of ten new homes will be built in 1998 in the City's target area east of 16th Ave. (HOME funded) DOWN PAYMENT ASSISTANCE: This program provides financial assistance of up to $2000 for downpayment and closing costs associated with a first time home purchase in the City's east Yakima target area. Families assisted through this program must be low and moderate income. SINGLE FAMILY REHABILITATION/RESTORATION: This new program for 1998 has been designed to provide financial assistance to first time homebuyers who purchase and restore vacant illegally subdivided single family homes back to their original homeownership condition. This program is limited to properties within the City limit east of 16th Ave. (CDBG funded) 1) Note: Federal regulations define a first-time homeowner as an individual or family who has not owned a home in the past 3 years. ENVIRONMENTAL REVIEW RECORD: The Office of Neighborhood Development Services maintains a record of all environmental assessments of activities funded with CDBG and HOME funds. This record is available for review by the public between 8:00 a.m. and 5:00 p.m. Monday through Friday. Copies of the environmental review record will be made available upon request at a cost of .25 cents per page. The Environmental Review file contains: • a listing of all activities funded by CDBG and HOME during the program year • a determination of the degree of environmental impact, if any, of each activity • the basis for the determination • in the event of a negative impact, a summary of the mitigating measures • communication with other agencies • copies of notices and a request for release of funding for each activity All activities are reviewed initially for impacts at the time they are selected for funding. The Environmental Review file is updated throughout the program year as activities are implemented to reflect any change in the determination of impacts due to changes in the location or scope of the activity, and as activities are added or deleted. APPLICANT ELIGIBILITY: 1. A preliminary application submission from the applicant shall include the following: • copy of latest two years IRS tax returns • copy of a current credit report from Yakima Credit Bureau Please note, a first time homebuyer must contribute a minimum of 3% of the first lien amount as equity at closing. 2. ONDS will prepare an eligibility evaluation with review of income, debt ratio and credit history. ONDS will respond to the applicant in writing within 45 days of receipt of application indicating whether the applicant is eligible or ineligible and why. Applicants will be given an opportunity to respond to the ONDS determination in writing within 30 days or to reapply in the future when issues of ineligibility are resolved. 2 3. An approval letter from ONDS will request the applicant fill out a lender application form and attach the following: • latest two years IRS tax returns (if different from #1 above) • signed employment verification • signed landlord verification (for homeownership assistance only) 4. Upon receipt of the above submission, ONDS will: a. send out employment verifications b. send out mortgage verifications (rehabilitation assistance only) c. update credit report (for homeownership assistance, report shall be updated to a mortgage report) d. order preliminary title report on property CITY LOAN UNDERWRITING: ONDS will provide a maximum of $20,000 ($2000 for downpayment assistance) unless conditions warrant and City Council approves a high amount based upon special circumstances. Special circumstances that could justify additional assistance include; 1) the project's unique positive impact on the neighborhood, or 2) the renovation of an historic structure when at least 85% of total project cost is being provided by other sources. The following criteria will be utilized to determine project feasibility: • applicant must be able, based upon income and credit, to borrow the necessary funds which together with the city's assistance are needed for rehabilitation and/or purchase. • applicant's housing debt ratio (principle, interest, taxes and insurance) do not exceed 30% of gross monthly income and total debt ratio (including housing) shall not exceed 40% of gross monthly income after project completion • no personal bankruptcy within the last three years • no unpaid judgments or liens • no unpaid collections • clear title to property PROPERTY INSPECTION: The applicant's property is inspected based upon the criteria of bringing the home up to HUD minimum housing property standards and the Uniform Building Code. Properties listed on the State National, or local Register of Historic places will be rehabilitated to the State's Historic Preservation Guidelines. ELIGIBLE IMPROVEMENTS: • structural repair or alterations • roofing • reconditioning or replacement of plumbing, heating, or electrical system • energy conservation (windows and insulation) • exterior painting • accessibility for disabled persons • asbestos and lead paint abatement SPECIFICATIONS AND DRAWINGS: Specifications and drawings are prepared by ONDS and agreed to by signature of the homeowner(s), listing all required work and materials. All work performed and materials supplied must comply with the workmanship and material standards of the trade. Any changes to the contract must be approved in writing by the homeowner, contractor and the Office of Neighborhood Development Services and the homeowner must sign all appropriate documents 3 including modification to contract and loan (if necessary) before work is started. Improvements will be completed under an agreement between the homeowner and general contractor. Homeowner's who can demonstrate their ability to do required work themselves and who are preapproved by ONDS in writing, may perform all or part of the improvements but receive funding for materials only. Program funds can only be used to pay for the cost of materials. supplies and labor supplied by persons who are unrelated and do not live on the property. BID REQUEST: A letter is sent to all prequalified contractors listed with the Office of Neighborhood Development Services requesting a sealed bid on the work specifications for the home. A copy of the work specifications must be picked up at the Office of Neighborhood Development Services. BID AWARD: The Office of Neighborhood Development Services recommends to the homeowner the lowest bid within a range of 10% above or below the ONDS cost estimate on proposed work specifications. ONDS will review the bids with the homeowner and will recommend the qualified bid. Any owner in disagreement of the qualified bid may accept one of the other bids if they give written justification acceptable to ONDS. If all bids are received outside the 10% above or below requirement, the homeowner may select a submitted bid, request a negotiated bid or request a rebid. PRECONSTRUCTION: A preconstruction conference is schedule between the homeowner, contractor and ONDS. Specifications and drawings are reviewed, lead base paint, disclosures, notice to proceed and other contract documents are signed. The contractor will be responsible for securing all necessary building permits and performing the work specified in a standard workmanship manner within the time lines outlined in their contract agreement. Any request for change of original work specifications or unforeseen work must be submitted in writing as a change order listing the changes and costs. This must be approved in writing by ONDS, contractor and homeowner. A request for an extension of time may be submitted to ONDS in writing by the contractor if weather or unforeseen circumstances arise. With the homeowners written approval, ONDS will notify the contractor if an extension has been approved. PA YMENT: A request for disbursement of funds by the contractor will be filled out and submitted to ONDS. ONDS will inspect the construction work completed and determine the amount authorized to be disbursed. All draws will be approved for payment in writing by the homeowner and ONDS after an inspection of the property. The file ledger will be reviewed to determine if the requested funds are available prior to processing disbursement. The source of funds shall be designated on the pay req uest. FINAL INSPECTION: Prior to release of final payment, the homeowner and ONDS will review the work to determine whether all specifications and change orders have been completed. The homeowner will sign the acceptance of improvements. The contractor will be responsible for obtaining all lien releases prior to submitting a request for final payment. A minimum of 10% of the total contract price will be retained by the ONDS until final inspection and submission of all lien releases. WARRANTY: ONDS staff will inspect completed rehabilitation work and issue the homeowner(s) warranties after 30 days. This warranty package will include the work warranty for one year, the applicable warranty exemptions and information on how to file a warranty problem. A program survey will be performed at the time soliciting the comments from the homeowner on 1) the contractor's work, 2) program policy and 3) staff performance. 4 ARBITRATION All parties to contracts funded in whole or in part by the City of Yakima's ONDS shall be required to agree to binding arbitration. The rules shall be as follows: 1. Agreement of parties: These rules shall apply whenever the parties have agreed to arbitrate under them. They apply to the extent they are not inconsistent with applicable statute nor with the agreement to the parties. The parties shall be_deemed to have agreed to these rules in the form obtained at the time arbitration commenced. 2. initiation of expedited arbitration proceedings: An arbitration proceeding is a part of the dispute settlement process which is initiated by the filing of a "demand for Dispute Settlement" with the American Arbitration Association (AAA) for administration pursuant to these rules. 3. Appointment of arbitrator: The AAA Committee shall appoint a single arbitrator from its panel of persons knowledgeable in home construction. 4. Qualifications of an arbitrator: No person shall serve as an arbitrator in any arbitration in which that person has any financial or personal interest in the results of the arbitration. Prior to accepting an appointment, the prospective arbitrator shall disclose any circumstances likely to prevent the prompt hearing or to create a presumption of bias. Upon receipt of such information, the AAA shall immediately replace the arbitrator or communication the information to the parties for their comments. 5 . Vacancies: The AAA is authorized to appoint another arbitrator if a vacancy occurs or if an appointed arbitrator is unable to serve promptly. 6. Time and place of hearing: The hearing will be held at the homesite whenever possible or in such other feasible place as the arbitrator may designate. The arbitrator shall fix the time of the hearing, notice of which must be given to the parties at least five (5) business days in advance. 7. Representation: Any party may be represented at the hearing. 8. Attendance at the hearing: All persons who have direct interest in the arbitration as well as representatives and witnesses are entitled to attend the hearings. The arbitrator shall determine whether any other persons may attend the hearing. 9. Adjournments: Hearing shall be adjourned by the arbitrator only for good cause. 10. No stenographic record: There is no requirement that such records be taken of the proceeding, but any party may make such a provision at their own expense. The parties may make appropriate notes of the proceedings. 11. Proceedings: The hearing shall be conducted by the arbitrator in any manner in which to permit full and expeditious presentation of the case by both parties. Where possible, the parties and the arbitrator shall inspect the homesite and claimed defects. Normally the hearings shall be completed in one day, but the arbitrator may, to obtain additional evidence, or for other good cause, schedule an additional hearing, normally within five (5) days. 5 12. Arbitration in the absence of a party: '1 ne arbitration may proceed in the absence of any party, who, after due notice, fails to be present. An award shall not be made solely on the default of the party, the arbitrator shall require the attending party to submit supporting evidence. 13. Evidence: The arbitrator shall be the sole judge of the relevancy and the material of the evidence offered. 14. Evidence of filing of documents: The arbitrator may receive and consider documentary evidence. Documents to be considered by the arbitrator may be subrnitted prior to the hearing provided a copy is simultaneously transmitted to all other parties. Neither party may submit any written documentation prepared by an conciliator assigned to the dispute. 15. Close of hearing; The arbitrator shall ask whether parties have any further proof to offer or witnesses to be heard. Upon receiving negative replies, the arbitrator shall declare the hearing closed. 16. Waiver of rules: Any party who proceeds with the arbitration after knowledge that any provision or requirement of these rules has not been complied with and fails to state his objection in writing, shall he deemed to waive his right to object. 17. Serving of notice: Any papers or processes necessary for the initiation or continuation of an arbitration under these rules and for any action in connection with or for the entry of judgment on an award made hereunder, may be served upon any party: a. By mail addressed to such party or its attorney at its last known address, or b. By personal service, or c. As otherwise provided in these rules. 18. Time of award: The award shall he rendered promptly by the arbitrator, unless otherwise agreed by the parties, not later than forty (40) days from the date the AAA receives the "Demand for Dispute Settlement". 19. Nature of awards: The award shall be limited to a determination of: a. Existence of the defect or defects claimed. b. Nature of the repair or replacement and time in which the contractor will perform. 20. Form of award: The award shall be in writing and shall be signed by the arbitrator. Findings of the arbitrator shall be in summary form. 21. Delivery of award to parties: Parties shall accept as legal delivery -of the award the placing of such award or a true copy thereof in the mail by the AAA; addressed to such party at its last known address or its attorney, or personnel service of the award, or the filing of the award in any manner which may be prescribed by law. 22. Modification and clarification. Upon delivery of the award to the parties, either party may, within twenty (20) days, request modification or clarification of the award. Application for modification or clarification must be sent to the AAA for transmittal to the arbitrator and a copy simultaneously transmitted to all other parties. The arbitrator is not empowered to redetermine the merits of any claim already decided, but may modify tile award if tile arbitrator finds that the award exceeds the scope of the warranty merits coverage. Written objection to modification or clarification must be delivered to the AAA for transmittal to the arbitrator and simultaneously sent to all parties within ten (10) days of the application. The arbitrator shall dispose of an application for 6 modification or clarification within ten (10) days from receipt of objection or the expiration of time to make objection, whichever is earlier. 23. Expenses: The expense of witnesses, expert witnesses or reports for either side shall be paid for by the party producing such witnesses or reports. In the event that the arbitrator shall require the appearance of witnesses, expert witnesses or reports, the costs shall be borne equally by the parties. 24. Interpretation and application of rules: The arbitrator shall interpret and apply these rules in so far as they relate to their power and duties. All other rules shall be interpreted and applied by the AAA, as administrator. LOAN APPROVAL A loan committee and loan committee process approved by City Council, will be utilized to review City assisted rehabilitation and first time homeownership projects. The committee, made up of five representatives from local lending institutions, will review each loan package and make a written recommendation to the City Manager to approve or not approve. A loan package will include the City's subsidy analysis reflecting the first lien loan, applicant's equity participation and the City's subsidy participation. BANK FINANCING: A loan package will be submitted to a local lender. It will consist of a subsidy analysis, application, 2 years IRS tax returns and W -2's, mortgage verification (rehabilitation assistance only), credit report, preliminary title (rehabilitation assistance only) and employment verifications. • Please note that under the Down Payment Assistance program, the applicant is responsible for working directly with the bank of their choice. The City of Yakima's loan will be in a second position to the private lenders financing. The private lender's loan will be maximized to utilize the full amount of borrower's available income with the provision that not more than 30% of the borrower's gross income be committed to housing related expenses. The City's loan may, if circumstances require, he in the form of a 0% deferred loan, for a term not exceeding five (5) years. At the end of the five year period, the City's loan will convert to an amortizing loan at the rate of the first lien note unless borrower can show that family income is insufficient to support such additional housing expenses, in which case, the interest rate may be reduced or the loan deferred for an additional five year term. The Deed of Trust executed with the City's loan documents will include a provision for an annual exterior inspection, and a default provision for failure to correct code violations, if any, cited by the City's building inspector. An Electronic Funds Transfer form with a copy of the appraisal and settlement Statement attached will be submitted to the City Manager for signature. A copy of this package will then be forwarded to the City's Finance Department to initiate the wire transfer. The City's loan funds will be transferred to the appropriate Title Company on the day of closing. PURCHASE OF REPOSSESSED HOMES: When ONDS has a home for sale due to a repossession, an applicant will be qualified following standard procedures. At the time the applicant signs the sales and purchase agreement, they will be required to make a non-refundable $100 deposit. 7 RECONVEYANCE: When the City receives final payment or a full payoff of a loan, it is the City's responsibility to provide the title company with signed reconveyance documents. ONDS will submit a request for reconveyance to the trustee along with a copy of a reconveyance ready for signature by the trustee. The reconveyance is then forwarded to the appropriate title company for recording- - appropriate . company recording, - - __ c_ SUBORDINATION: ONDS will review a request for subordination of our loan on _a case by case basis but only if payments on the City's loan are current. ONDS reserves the right to restructure the repayment of the City's loan as a condition of subordination approval. No subordination will be allowed if the additional funds borrowed, plus the ONDS lien, is more than 80% of current appraised value. Subordination may be approved if it can be satisfactorily shown that the purpose of the refinancing is one of the following: 1) to lower the interest rate of a senior lien. 2) finance additional fixed improvements to the home which secures the City's debt, or 3) finance family educational or health needs The City will not subordinate if the first lien is being increased for non -housing related expenses, unless the City's loan is restructured to current market rates. FORECLOSURE: Homeowner is notified in writing of any delinquency over 30 days. Failure to become current within 60 days after the written notice may result in initiation of foreclosure process. However, the City may at the City's sole discretion, enter into a repayment plan with the borrower prior to foreclosure. The repayment plan shall bring the note current within 120 days. A loan may be restructured to lower monthly payments if satisfactory evidence of reduced family income is provide, verified, and approved by the loan committee. RELOCATION ASSISTANCE: All families receiving housing assistance, lawfully occupying a property, who are required to move as a direct result of the rehabilitation of their property shall be offered reimbursement for authorized reasonable out-of-pocket expenses incurred in connection with the temporary relocation. Authorized expenses to include: 1. Monthly Rental: Up to a maximum of the listed "Fair Market Rent" for the necessary bedroom sized unit to accommodate the family or reasonable charges of a storage unit, not previously leased or owned by the family, to store their personal belongings and/or furniture. It shall be the applicant's responsibility to locate and secure their temporary housing upon receipt of written authorization from ONDS. .. ti 2. SecurityiDamage Deposits: Refundable deposits for rental or storage unit, gas or electric utilities, truck or trailer rental, necessary equipment for moving. 3. Moving Expenses: Reasonable charges for rental of necessary moving equipment such as a truck, trailer or appliance dolly, fuel and non family labor charges. All relocation expenses must be pre- approved in writing by ONDS before the expense is incurred. Reimbursement of expenses shall be based upon reasonable charges verified by not less than three written quotes and a legitimate receipt. 8 Examples of expenses not covered by relocation assistance: No reimbursement shall be paid for the damage or loss of any personal or rental property, injury, monthly utilities for either existing home or rental, meals or groceries, connection or transfer fees of telephone, cable TV or other accessory use. CONTRACTOR QUALIFICATION PROCESS: All contractors working on single family rehabilitation projects assisted through the Office of Neighborhood Development Services (ONDS) will be processed -for pre -qualification as follows: Copies of the following must be submitted. These papers will be maintained in the ONDS contractor's file and monitored on an annual basis. 1. A contractor's license issued by the State of Washington, 2. Evidence of liability and other insurance as required and in a form perscribed by the City's Legal Department, 3. A City of Yakima business license, 4. A federal identification number, 5. Minority status disclosure. The contractor will furnish ONDS a minimum of three references of past work related to remodeling of existing homes and small new construction additions. These references will be verified by ONDS Staff for workmanship and code compliance. The final decision will be that of the ONDS Manager. If accepted, a letter will be sent notifying the contractor of his or her placement on the pre -qualified contractor's list. Bid Invitations will then be sent to the contractor. If a contractor is denied, ONDS will send a letter explaining the reason(s) for non-acceptance. The contractor has the right to appeal the decision if it was based on the submitted referenced work. Disqualification on the required documentation cannot be appealed. The appeal must be made in writing within 30 days of the notice of non-acceptance and directed to the Director of the Department of Community and Economic Development, 129 North 2nd St. Yakima WA, 98901. If the contractor has been disqualified for any reason through the programs sponsored by ONDS, it will be the responsibility of the contractor to take whatever corrective measures are needed to remedy the disqualification. If the contractor feels that through these corrective measures they are again qualified to work for the program, the contractor will have to re- apply through the same procedures as a new contractor. Reapplication cannot be submitted until after a six month time period has past since the date the disqualification occurred. CONTRACTOR ESCROW BONDING: The City of Yakima, Office of Neighborhood Development Services requires 'Contractors who participate in housing rehabilitation programs to provide a performance bond for contracts in excess of $10,000. ONDS has a self -bonding program that qualified contractors may use for a limited time in lieu of a performance bond. The intent of this program is to assist small start up contracting firms to become established. Once a contractor is established they must purchase a performance bond from their insurance company. Starting January 1, 1998 all existing qualified contractors or new contractors may use ONDS self -bonding escrow program for 18 months or the first $100,000 of ONDS contracts, whichever occur first. This escrow account is used to remedy work not performed under the original contract or the one year warranty. Policies and procedures of self -bonding escrow: 9 1. Each contract requires a payment from the contractor prior to work start of 2% of contract amount. ($25,000 contract @.02=$500). This is a non-refundable payment. 2. The contractor's payment is placed in the ONDS self bonding account to secure the performance and completion of contract. 3. The housing rehabilitation contract will contain a binding arbitration clause. The American Arbitration Association (AAA), conducts all binding arbitrations for ONDS. 4. Upon dispute, the AAA will hold hearings and make a final determination of the work necessary to satisfactorily complete the project. If the contractor does not remedy the findings, or if for any other reason the City is required to expend funds from the self - bonding account to satisfactorily complete a project, the contractor will be disqualified from future participation until the funds are repaid. If the homeowner does not honor the AAA findings releasing the contractor, the repairs will be paid for from this account with no penalty imposed on the contractor and the City will utilities any and all available legal remedies to recover this expense from the homeowner. 5. Reason for using the A_AA or payments from the escrow account are: a. The contractor "walks -off the job" with no intention of returning. b. Workmanship disputes between the contractor and homeowner. c. Contractor removed from the job because of the quality of workmanship. d. Warranty work not honored by contractor. e. Material or supplier liens imposed on homeowner for lack of payment by contractor. f. Potential liability suits filed by the homeowner in action contrary to the AAA findings and decisions. SENIOR AND DISABLED PERSONS HOME REPAIR PROGRAM: The Senior and Disabled Persons Home Repair Program is designed to assist low income senior and disable, homeowners with health and safety related home repairs. TYPES OF ASSISTANCE AVAILABLE: • The Regular Home Repair Program offers an average grant of $2,500 for eligible homeowners in the City of Yakima • The Emergency Home Repair Program is a grant that averages $500 annually. eligible emergency repairs are as follows: • No heat • No electricity • No hot water • No sewer • The Exterior Paint Program offers a grant to provide labor and materilils to paint the exterior of qualified applicant's homes. Due to limited funding, not all homes can be painted. The Office of Neighborhood Development Services will determine which homes will meet program standard for painting. Maximum Life Program Benefits: $5,000. (Including Regular Home Repair, Emergency Repairs and Exterior Paint.) APPLICATION Seniors or disabled persons in need of home repairs, contact the Office Of Neighborhood Development Services. The property is inspected to determined if an emergency health and safety issue exists. All other applicant's names are placed on a waiting list in the order they apply for assistance. Applicants must be a senior, fifty-five (55) years of age or older. There is no age 10 requirement for disabled persons, although they must meet social security guidelines for a person with disabilities and receive benefits. The application for the program is taken either in the Office of Neighborhood Development Services, or if requested, in the applicants home by ONDS staff. INCOME All applicants must be low income as defined by current federal median family income guidelines. Income must be at or below 50% of current median family income levels for the family size. Assets cannot exceed $10,000, not including home or vehicles. PROPERTY OWNERSHIP All applicants must own or be purchasing their home and be located within the city limits of Yakima. The applicant must occupy the home on a permanent year around basis. Ownership is verified by tax notification or City computer print-out. ELIGIBILITY VERIFICATION No credit report is required. Staff prepares the lead based paint disclosure which is signed by the applicant. An ONDS staff member prepares the eligibility analysis based on income and ownership verifications. LETTER OF ACCEPTANCE A letter of acceptance for program participation or rejection is sent to applicant, after eligibility has been determined. A staff member then takes pictures of the outside and/or inside of the applicant's home. INSPECTION Property is inspected by ONDS staff based on priority of health and safety needs of the home. WRITTEN SPECIFICATIONS Proposed work plan is written by ONDS staff which lists all the required work and materials. ONDS staff prepares the Environmental Assessment and Lead Based Paint check list based on the property inspection findings. OWNERS ACCEPTANCE The work plan is reviewed with homeowner(s) for required work and materials and the homeowner(s) approves the scope of work by signing the work plan. COST ANALYSIS ONDS staff prepare a cost analysis of materials for the repairs to the home based on the available funds for the program. BIDS ONDS staff requests three sub -contractor's bids for electrical, plumbing, rooting, weatherization and painting as needed. Bids are compiled and awarded to an approved sub- contractor(s) with a qualified bid. WORK SCHEDULE All work is completed under the supervision of ONDS staff. ONDS staff will evaluate the subcontract work force and prepare the Minority participation documentation. FINAL INSPECTION All work is certified through a final Inspection to assure compliance with the approved work plan. A code compliance certification form is prepare by staff certifying that the home meets Section 8 Standards. 11 WARRANTY Homeowners are asked to sign a warranty and complete the program evaluation during the ONDS final inspection after the work has been completed. The Office of Neighborhood Development Services reserves the right to interpret any and all of the above guidelines. All interpretations may be appealed in writing within 30 days of issuance by sending a letter to the Director of the Department of Community and Economic Development at 129 No. 2nd Street, Yakima, WA 98901. These guidelines may be amended from time to time as circumstances dictate. Amended On: 12 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT ITEM TITLE: Housing Program Guidelines Item No.: 11 For Meeting of: March 3. 1998 SUBMITTED BY: Glenn Rice, Acting Director of Community and Economic Development (575-6040) CONTACT PERSON/PHONE: William Cook, Neighborhood Development Services Manager (575-6101) SUMMARY EXPLANATION: The City of Yakima, Office of Neighborhood Development Services (ONDS). is submitting Housing Program Guidelines for City Council's review and approval. The proposed guidelines include the following: • Program descriptions • Borrowers' responsibilities • City assistance • Contractors' responsibilities • Guideline interpretations and appeal process ONDS loan underwriting limits will provide a maximum of $20,000 unless conditions warrant and City Council approves a higher amount based upon special circumstances. Maximum term for a deferred loan will be five years with a provision for the City to extend the term for an additional five years, if the applicant's income warrants. The new program guidelines also include a loan committee to be established by separate Council action scheduled for early April 1998. These guidelines were reviewed and recommended by the Council Neighborhood Development Committee at their meeting on February 18, 1998. Resolution X Ordinance Contract Other Specify Funding Source: 1998 Community Development Block Grant Funds APPROVAL FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Approve Housing Program Guidelines Resolution BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: BUSINESS OF '1'10.; CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No.: / For Meeting of: August 3, 1999 ITEM TITLE: Amendments To Housing Program Guidelines SUBMITTED BY: William Cook, Director of Community and Economic Development CONTACT PERSON/TELEPHONE: William Cobabe, Neighborhood Development Services, Manager (575-6101) SUMMARY EXPLANATION: On March 3, 1998 City Council approved Housing Program Guidelines submitted by the Office of Neighborhood Development Services (ONDS). ONDS proposes the following amendments to the guidelines: • Increase the dollar limit of the Down Payment Assistance Program from $2,000 to $4,000. The Down Payment Assistance Program provides financial assistance for the down payment and closing costs associated with eligible first time homebuyers to purchase homes. ONDS has assisted 28 homebuyers since the program began in 1998. • Implement ONDS Late Payment and Foreclosure Policy. (See Attached) • Delegate authority to City Manager to appoint members to the City's ONDS loan committee to fill vacancies. ONDS Loan Committee reviews City assisted rehabilitation and First Time Homeownership loan packages and makes a written recommendation to the City Manager to approve or not approve. These amendments to guidelines were reviewed and recommended by the Council Neighborhood Development Committee at their meeting on April 2, 1999 and July 8, 1999. Resolution X Ordinance Contract Other Specify Funding Source: `\ APPROVAL FOR SUBMITTAL: 2 - City Manager STAFF RECOMMENDATION: Approve Amendments to Housing Program Guidelines. BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: