HOME IMPROVEMENT LOAN PROGRAM Policies and Procedures SUCCESSOR AGENCY OF THE CITY OF COMPTON The Successor Agency of the City of Compton does not discriminate based On ancestry, race, color, religion, sex, disability, familial status or national origin
Home Improvement Loan Program The Home Improvement Loan Program provides loan assistance from $25,000 to $45,000 to low and moderate income homeowners to improve their home. The property must be a single family residence located within city limits and owner-occupied. The program is designed as a loan and a lien will be placed on the property for a period of thirty (30) years. The full loan amount will be due and payable upon the occurrence of either of the following: (a) sale (b) transfer or any change of ownership (c) foreclosure (d) refinance (e) the property is no longer occupied by Borrower (f) the discovery of willful misrepresentation or fraud in connection with the Program. In the event of the owner s demise, beneficiary must assume the loan for the remaining affordability period, must meet income requirements for the Program, must reside in the property and property title must remain as is. No monthly payments are required and there is no interest on the loan. The loan shall be forgiven after thirty (30) years. The Program provides for repairs such as, plumbing, electrical, roofing, windows, painting, screens, smoke alarms, toilets, handicapped grab bars, ramps, termite treatment and/or tenting. The Agency may deem appropriate other repairs ONLY if code violations impede the health and safety of the homeowner. All repairs require final approval by the Successor Agency. The Home Improvement Loan Program is not designed for upgrading, remodeling or room additions. (No Cosmetic Repairs will be completed). The Program must address Health and Safety Violations ONLY. Replacements will be of like-kind or equal. NOTE: SUBMISSION OF A PRE-APPLICATION DOES NOT GUARANTEE LOAN APPROVAL UNDER THE PROGRAM. PROPERTIES WITH ILLEGAL OR UN-PERMITTED STRUCTURES MUST MEET THE CITY S BUILDING AND SAFETY CODE REQUIREMENTS PRIOR TO LOAN APPROVAL. FAILURE TO COMPLY WITH CITY S BUILDING AND SAFETY CODE REQUIREMENTS WILL RESULT IN DECLINE OF LOAN APPLICATION. Continuous implementation in the program will be based on availability of program funds. Upon depletion of program funds, the Successor Agency will discontinue the acceptance of applications for home improvement loans under the program. 1 Revised Oct /2015
Los Angeles County Income Guidelines 2015-16 HOUSEHOLD SIZE MAXIMUM INCOME LIMITS (120%) 1 $54,450 NOTE: To participate in the Program, the Total Household Annual Adjusted Gross Income must fall below the listed amounts 2 $62,200 3 $70,000 4 $77,750 5 $83,950 6 $90,200 7 $96,400 8 $102,650 Types of Rehabilitation and Repairs The Home Improvement Loan Program is designed to rehabilitate properties by correcting code violations, potential code violations, or unsafe or hazardous living conditions only. Please note that items listed on application will be replaced and/or repaired only if needed, all repairs will be reviewed and approved by the Agency. All repairs will be approved by Agency prior to start of work. The types of eligible repairs include: Beams, joists or rafters as needed Cornices, eaves and fascia board Doors Electrical service and panel boxes (convert from fuses to breakers only) Electrical wiring, dwelling and garage Floor coverings (replace what is removed as needed) Furnace/heaters Garage repair (per inspection only) Gas lines Gutters and down spouts Light fixtures (replace what is removed as needed) Painting or protective covering (exterior, if paint is chipping, flaking, etc) Painting or protective covering for interior walls and ceilings Plumbing and fixtures Porches or steps (as necessary) Replacement/removal/relocation of hot water heater and metal housing as needed Roof, dwelling and garage Screens Sewer lines and service 2 Revised Oct /2015
Shut-off valves (gas and water) Sinks Sub flooring in dwelling (where needed) Termite work Walls, (plaster, patching, drywall) Water lines Windows Frequently Asked Questions 1. What if my income exceeds the limits of the program? You may not participate in the program. 2. What if I do not have proof of income? If unemployed, you must submit signed Federal Income Taxes for the last three (3) tax years with form 4506-T (completed and signed), SSI Printout and provide verification from EDD (Unemployment Office). 3. I live in the unincorporated area of the City of Compton. Do I qualify for the program? No. The home must be located in the incorporated area of the City of Compton. You may call the Building and Safety Department to verify that your home is within the City limits at (310) 605-5509. Residents located in the unincorporated area of Compton, may contact the County of Los Angeles Community Development Commission for assistance at (626) 262-4512. 4. I have a rental house. Can I use the loan or grant to make the necessary repairs? No. The Program is for homeowners who reside in the property as their primary residence. 5. May I use the loan to fix up my duplex? If applicant resides in one of the units, the Agency will provide assistance specifically to that unit. The Agency will not provide assistance for non-owner occupied units. NOTE: Mobile homes are not eligible for assistance under the Home Improvement Loan Program. 6. I have owned my property for less than six (6) months. May I participate in the Residential Rehabilitation Program? Yes, you may apply for the program 7. If I already had one grant or loan, may I get another grant or loan? Yes. Applicants who have received a previous rehabilitation Grant/Loan or First Time Homebuyer Loan are eligible to apply for the Program. 3 Revised Oct /2015
8. May I use the funds to repair my driveway or walkway? The Program is designed to make the dwelling areas safe and livable. Therefore, these items will be repaired based on Successor Agency approval. 9. What are considered minor and/or major repairs? Minor repairs are repairs that are of a smaller amount, size or degree of work. Examples of minor work are: replacing doors, fumigation, heater replacement, one or two windows. Examples of major repairs are: electrical, plumbing, roofing, window replacement throughout the property. 10. How long is the process? The process takes approximately 90 days from qualification of applicant to completion of work. 11. Are the funds disbursed to the homeowner or the contractor? The funds are disbursed directly to the state licensed contractor upon completion of work and approval by the Homeowner and Successor Agency 12. May I use any contractor I choose? Yes, however, as a courtesy to the homeowner, the Agency has a List of Contractors who has been approved for the program. If you would like to use a contractor that is not on the list, please refer them to our office to obtain a Contractor s Packet and apply to be added to our list. Please note: Contractor s must meet certain criteria in order to qualify to be placed on the Agency s Contractor s List. 13. If I have a problem with a contractor, what can I do? Please notify the Successor Agency in writing and we will investigate your complaint. 14. There is someone on my Grant Deed that does not live in my house. Do I have to count that person s income? Yes, if the person who is listed on the Grant Deed resides in the property. No, if the person on the Grant Deed does not reside in the property; however, the applicant must provide a signed statement and Driver s License from the individual stating that they do not reside in the property and that they consent to the repairs and the lien that will be placed on the property. (Under these conditions income will not be included). This form must be notarized as a sworn statement (jurat). NOTE: If individual does not want to provide signed affidavit and Driver s License, individual must sign required Contract Agreements with the Agency (Under these conditions income will be included) 4 Revised Oct /2015
15. What is considered disabled? A doctor must certify the disability. 16. Who is qualified as a senior? A person 62 years of age or older is qualified as a senior. 17. Do I have to pay the loan off in 30 years? No. The full loan amount will be forgiven after thirty (30) years. However, the full loan amount must be repaid if any of the following occurs: the property is sold, refinanced, transfer/change in title, the property is no longer owner-occupied, upon foreclosure of the property, discovery of any false and/or fraudulent information by owner. 18. How do I participate in the Program and where do I submit the pre-application? Pre-Applications may be downloaded from the City s Website at www.comptoncity.org. or picked up in person at the Successor Agency at 205 S. Willowbrook Ave., Compton, CA 90220. Pre-Applications must be fully completed, signed and must include copies of all required documentation. Note: Original documents will not be accepted. (For required documentation, refer to page 6) 19. Who do I call if I still have questions? Contact the Successor Agency at (310) 605-5511. 5 Revised Oct /2015
REQUIRED DOCUMENTS (MUST SUBMIT ONE COPY OF EACH DOCUMENT WITH APPLICATION) Grant Deed Must submit most recent Recorded Grant Deed. If recorded copy is not available, a copy may be obtained from LA County Registrar /Recorder s Office at 12400 Imperial Highway, Norwalk. NOTE: A Deed of Trust is not an acceptable document. If a person on title is deceased, a copy of a Death Certificate must be submitted. CA Drivers License/CA Identification Card and Social Security Cards Must be submitted for all household members age 18 and over Social Security Cards and Birth Certificates or Court Guardianship Must submit copies of Social Security Cards and Birth Certificates for all minors listed on application or Court Guardianship Documents. NOTE: All minors listed on application must be on all Federal Income Tax Returns. Income Verification Must submit three (3) months of current consecutive pay check stubs for all household members 18 years of age and over. If applicable the following documentation must be submitted: One (1) current Social Security printout Veteran s Benefit Statement Pension Statement, AFDC, etc Retirement Statement If household member is not employed, must provide unemployment verification (EDD printout) and SSI printout. If in school, household member must submit current school transcripts. Signed Federal Income Tax Returns, W-2 s and IRS form 4506-T Must submit (3) current consecutive years of Federal Income Tax Returns for all wage earners 18 years of age or older. (2012, 2013, & 2014) NOTE: All Federal Income Tax Returns must be signed and include ALL pages and attachments. In addition, the Agency will provide a 4506-T form to be completed and signed by applicant in order to obtain transcripts from IRS; the Agency will forward the form to IRS to verify filing or non-filing of Federal Income Tax Returns. If applicant does not have any Federal Income Tax returns, applicant must submit a written statement affirming or acknowledging that applicant does not have and has not filed Federal Income Tax returns. Bank statements: savings, checking, CDs, retirement and investment accounts Must submit three (3) current consecutive statements including all pages for all household members age 18 and over. If applicant does not have any bank statements or other accounts, applicant must submit a written statement affirming or acknowledging that applicant does not have bank statements. Mortgage Statements Must submit three (3) current consecutive statements If applicant does not have a mortgage, applicant must submit a written statement affirming or acknowledging that applicant does not have a mortgage and a recorded Full Reconveyance or Substitution of Trustee and Full Reconveyance to verify the property has been paid in full must be provided. Property Insurance Verification (Hazard insurance) Must submit current insurance policy which indicates the amount of coverage. Joint Consolidated Annual Tax Bill (Property Tax Bill) Must submit current Property Tax Bill. If copy is not available contact the Tax Assessor s Office at (562) 256-1701 to obtain a duplicate copy. Utility Bills Must submit one (1) copy of each current utility bill: Gas, Water and Electricity (light) bill 6 Revised Oct /2015
HOME IMPROVEMENT LOAN PROGRAM FLOW CHART Step 1 Applicant downloads guidelines and pre-application from City website www.comptoncity.org or pick up pre-application in person at the Successor Agency APPLICANT SUCCESSOR AGENCY Applicant completes and submits pre-application directly to Successor Agency Step 2 Step 3 CONTRACTORS Agency staff reviews pre-application and documentation to determine potential eligibility for conditional approval Step 4 Step 5 Step 6 Agency Inspector performs inspection on the property and Provides homeowner with Lead Disclosure pamphlet. Agency inspector prepares inspection Report cost estimate to determine the amount of Loan Agency requests Lead Assessment Inspection for homes built Pre-1978 and a Termite Report, if applicable. Step 7 Step 8 Agency requests verification from SHPO to determine Historical Assessment of Property and Environmental Review Forms are completed. Department. The Agency will coordinate a Job Site Bid Meeting with Homeowner, Prospective Contractors and Inspector Step 9 Step 10 Prospective contractors submit bid to Agency by the scheduled deadline The Agency will notify homeowner in writing regarding the selection of the Contractor based on the results of the competitive bid process. Step 11 Step 12 Agency staff coordinates pre-construction meeting and loan signing with homeowner and selected contractor Contractor begins rehabilitation work. Step 13 Completion of rehabilitation work will require approval from Agency Inspector. Deferred Equity Loan Timeline: 90 days 7 Revised Oct /2015
HOME IMPROVEMENT LOAN PROGRAM POLICIES AND PROCEDURES The Successor Agency administers and implements the Home Improvement Loan Program, which is designed to assist low to moderate income families with needed home repairs to improve the quality housing stock in the Community. ELIGIBILITY REQUIREMENTS: Applicant must be legal owner of subject property (As shown on the Recorded Grant Deed) Applicant must be residing on the subject property (Must be a single-family residence) Income and family size must meet the Income Limits Requirements. (see chart on Page 2) Property must be located within the boundaries (incorporated area) of the City of Compton. Applicant must complete and submit a Pre-Application along with copies of ALL required documentation (Refer to Page 6 for list of required documents). Only completed and signed Pre-Applications with all required documentation will be accepted. Incomplete Pre-Applications will not be accepted by the Agency. Applicants must respond within seven (7) days to any correspondence from the Successor Agency. Failure to comply or respond will result in cancellation. Applicants must be available for the various inspections that will be performed at the property as part of the program. The inspections will be scheduled Monday through Thursday between 8:00 a.m. and 2:00 p.m. Failure to comply will result in Cancellation of your application. Applicants are not eligible for Program if there is an illegal garage conversion, illegal structures on the property, or have previous code violations that have not been corrected. All properties must meet the City s Building and Safety code requirements. Failure to comply will result in denial of pre-application. Applicants are not eligible for the Program if the cost of repairs exceeds the Program limit. 8 Revised Oct /2015
INCOME DETERMINATION (IRS 1040 Form) ADJUSTED GROSS INCOME The Agency will determine applicant s eligibility for the Program by completing an Income Determination Sheet (IRS 1040 Form) for all household members 18 years of age and over. If the household has a Form 1040 that was submitted to the IRS for income tax purposes and the form is less than six (6) months old, the Agency will use the form to determine eligibility. However, if any circumstances as reported on the form have changed or will change in the upcoming 12 months, such as applicant received a raise in salary; then applicants must submit their current income to determine eligibility. Note: Everyone in the household must be listed and/or represented through the use of the Federal Tax Returns. The annualized income will be determined for each member and all inclusions and exclusions will be identified to determine the Total Household Annual Adjusted Gross Income as listed on your most current Federal Tax Returns. The annualized income will be determined by adding (3) three month gross pay stubs (or from any other source of income) then divide by total number of check stubs and multiply by corresponding pay period. Sample of income calculation The Agency will annualize income from wages/salary as follows: Pay periods: Weekly - 52 weeks (Paid once a week usually 40 hours per week) Bi-monthly or Semi-monthly - 24 weeks (Paid twice each month usually the 15 th and 30 th of each month) Bi-weekly - 26 weeks (Every other week, usually 80 hours per pay period) Monthly - 12 months The Successor Agency will review pre-application and determine potential eligibility for the Program based on income and family size. If applicant meets income requirements, the Agency will coordinate an inspection with homeowner and contractors to determine the scope of work. If during the inspection it s discovered that the property has an illegal or un-permitted structure, the homeowner must comply with City s Building and Safety Code Requirements before participating in the Program. Failure to comply with City s Building and Safety Code Requirements will result in ineligibility of the Program. The Agency will send a formal disqualification letter to homeowner and request that they comply with City s Building and Safety Code Requirements before participating in the Program. If the property is up to code and the applicant meets the eligibility requirements, an approval letter will mailed to homeowner along with the Home Improvement Loan Application. 9 Revised Oct /2015
INSPECTION AND WORK-WRITE UP PROCESS The Successor Agency will perform a series of inspections on the property, such inspections will include: Initial, Housing Quality Standards (HQS), Lead Based Paint Assessment, Site Bid Proposal, Draw Payment, Monitoring and Final Inspection. (Termite inspection will be scheduled only if applicable). In order to participate in the Program, all applicants must be available for the various inspections. The inspections will be conducted Monday through Thursday between 8:00 a.m. and 2:00 p.m. Failure to comply will result in Cancellation. To determine eligible repairs, the Agency will perform an Initial inspection to determine eligible repairs. The Agency will confirm scheduled appointment and will notify homeowner of appointment date and time. During the Initial Inspection, Agency staff will provide homeowner with the following forms: Lead pamphlet acknowledgement, photo release authorization that must be signed by homeowner. In addition, staff will take photographs (before pictures) of the property. After inspection is performed on the property, staff will prepare write-up (correction notice) containing all violations and repairs necessary on the property along with the cost estimate. If termite inspection is required, the Agency will coordinate with Termite Company to schedule an appointment with applicant. Upon completion of Inspection, the Termite Company will issue a report to the Agency and the Applicant. If sufficient funds are available under the contract, these funds may be utilized towards termite repair work. All properties participating under the Program will undergo an Environmental and Historical Assessment whereby the State of California will determine if the property has historical value. This process will add an additional 30 days to the application process. No Residential Rehabilitation Work will commence on the property until this process is completed. NOTE: Pre-1978 property: A lead based paint assessment inspection will be scheduled by a licensed Lead Assessment Company. A report will be submitted to the Successor Agency; the Agency will then notify the applicant of the results of the inspection and attach a copy of the report. If Lead removal is necessary, the Agency will contract a licensed Lead Assessment Company to remove ALL Lead applicable only to the scope of work. Contractor will not be responsible for Lead outside of scope of work. In addition, the Agency will provide homeowner with a pamphlet titled Protect Your Family from Lead in Your Home. Applicant will sign an affidavit acknowledging that Agency provided Lead Disclosure pamphlet. This information will be provided at the Initial Inspection. All repairs are subject to Agency approval. 10 Revised Oct /2015
CONTRACTOR SELECTION AND BID PROPOSAL PROCESS Under the Program, there is a list of approved, licensed and bonded General Contractors.. The Agency will prepare and provide bid proposals for homeowner and each contractor. The bid proposals will list the eligible repairs under the Program. The Agency will coordinate with contractors to bid on each item on the bid proposal. The Agency will coordinate a Job Site Bid Meeting with homeowner, Agency Inspector, and contractor. Contractor must submit completed bid proposal to the Agency no later than 3 (three) days after Job Site Meeting. The Agency will notify homeowner in writing of the selection of the contractor based on responsive and responsible bid process. PRE-CONSTRUCTION MEETING AND CONTRACT SIGNING The Agency will schedule a Pre-Construction Meeting and Contract Signing appointment with Homeowner, Contractor and Agency. During the contract Signing Meeting the following agreements will be signed: Homeowner/Contractor Agreement, Deed of Trust and Assignment of Rents (form will be notarized), Promissory Note (form will be notarized), Truth-in Lending Statement, Escrow Instructions, Dispute Settlement Process Agreement, No Side Deals Agreement, Notice of Extensive Repairs Form, and Notice of Right to Cancel. The Agency will only honor approved Home Improvement Loan Repairs agreed upon during contract signing. The Agency will only authorize Change Orders or Amendment deviations from the original bid proposal that are pertaining to code violations on the property. Change orders or amendments require an inspection from Agency Inspector and must have written approval and authorized by the Agency. All work must comply with Building Codes and Manufacturers Installation Requirements. The Agency will provide contractor and applicant with copies of all agreements and a copy of the bid proposal that indicates the work to be completed (scope of work). NOTE: Final approval of funds is determined once written agreements are signed between homeowner, contractor and Agency. 11 Revised Oct /2015
COMMENCEMENT OF REHABILITATION WORK Contractor must obtain required permits for the Home Improvement Loan Program from the City of Compton Building and Safety Department. Contractor must submit all required permits to the Agency within (12) days after signing Contract Agreements. The Agency will issue a written Notice to Proceed to Contractor authorizing the Home Improvement work to begin within ten (10) days of issuance. Contractor must coordinate with Homeowner to schedule an appointment to begin Home Improvement Work. If any discrepancies arise between Contractor and Homeowner that cannot be resolved, the Agency must be informed by Contractor or Homeowner for an investigation and resolution of the dispute. Contractor must complete Home Improvement Work within ninety (90) days. Failure to do so will result in the contractor s disqualification of the Program. COMPLETION OF REHABILITATION WORK The Agency will monitor the progress of the project in compliance with Flow-Chart in order to maintain timeline of 90 days. Homeowner must be available for scheduled appointments and inspections. Homeowner must verify all work performed on property to ensure satisfaction of work performance and craftsmanship by signing the required forms provided by the Agency. (ONLY AUTHORIZED SIGNATURES WILL BE ACCEPTED). Homeowner agrees to release the Agency and Contractor of any future repairs not related to agreed scope of work per signed Contract Agreement. Agency staff coordinates with homeowner, contractor and inspector to conduct scheduled draw payment inspections for Draw 1, 2, 3 & 10% retention. During the final inspection the following will be completed: Field Inspection Report, after pictures of the property, Final checklist, and Notice of Completion (form will be notarized by homeowner). Contractor must have all necessary forms provided by Agency at the time of inspection. (Failure to comply will result in rescheduling of inspection and if problem becomes persistent, Contractor will be subject to removal from program). Contractor must submit the following documentation pertaining to each draw payment: Draw Payment #1 Invoice and Draw Payment Form Draw Payment #2- Invoice and Draw Payment Form Draw Payment #3 & 10% Retention - Invoice, Draw Payment Form, Final Sign-off, Final 12 Revised Oct /2015
Checklist, Manufacturer warranties, Lien Release, and Certified Copy of the Recorded Notice of Completion. Contractor is responsible for submitting all required forms signed by homeowner and contractor in order to obtain Draw Payments. Agency will reimburse Contractor for home improvement repairs performed on the property. All payments are made directly to the Contractor. Agency will coordinate with Termite Company and Homeowner if termite work is required. Termite Company will contact homeowner to schedule an appointment to begin termite work. All Termite work is to be performed after completion of Home Improvement Work. Agency waives all rights to any Termite work perform by Termite Company. The Agency is not liable for any repairs or improvement work performed by the contractor. Agency solely acts as mediator between the homeowner and contractor. Contractor must honor 1 (one) year warranty period agreed upon on signed Contract Agreement. For assistance with the application process, please contact the Agency at (310) 605-5511. AFFORDABILITY PERIOD The affordability period is thirty (30) years. The Successor Agency requires annual monitoring of the property during the affordability period. In order to comply with the Successor Agency s requirement, the Agency will contact the homeowner annually by written correspondence and request that homeowner complete and submit the Annual Residence Certification Form along with required documentation to the Agency. During the affordability period, the Agency may perform on-site monitoring of the home. The homeowner must comply with the City s requirements and the Home Improvement Loan Program Policies and Procedures. 13 Revised Oct /2015