Program Description Introduction City of Milford Department of Economic & Community Development 70 West River Street, Milford, CT 06460 (203) 783-3230 Sheila Dravis, CDBG Administrator sdravis@ci.milford.ct.us Last update 4/2017 Single Family Housing Program Program Policy & Procedure The policy and procedure of the CDBG Program contained herein are applicable to all persons, 18 years of age or older, who reside in the household. The Department of Economic and Community Development administers the housing program with Community Development Block Grant Program (CDBG) funds, an entitlement grant it receives from the U.S. Department of Housing and Urban Development (HUD) under the provisions of Title I of the Housing and Community Development Act of 1974, and 1983 and 1987 amendments thereto. Program Description The program is designed to provide eligible Milford homeownersan affordable way to repair and improve the properties safety, energy efficiency and the general living conditions of the household. Secured Program Loan & budget Funds provided under this program will be made available to eligible homeowners on a first come first serve basis. The CDBG program staff shall secure loan funds to assist eligible homeowners with active mortgage commitments. The CDBG reserves the right to close the program to new applicants upon receiving the number of applications expected to deplete the budget in any program year. Nondiscrimination Section 109 of the Housing and Community Development Act of 1974 requires that no one shall, on the grounds of race, color, national origin, sex, age or a disability, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity funded with CDBG funds. In addition, any property owner as a condition to obtaining a program funds, must comply with all applicable requirements imposed by or pursuant to regulations effectuating Title VI of the 1
Civil Rights Act of 1964 and title VIII of the Civil Rights Act of 1968 regarding the sale, lease, use or occupancy of his/her property. Dislocation or Relocation The federal funds allocated to any housing activity cannot be used if it will dislocate the owner or tenants to permanently vacate the property. Relocation assistance in accordance with the Uniform Relocation Act would be required. Program Amendments The city reserves the right to amend this program at any time, without notice, to further the goals of the program or to protect and/or preserve the city s interests and improve the program s benefit to the community. Program EligibilityRequirements General The program staff shall determine an owner s eligibility for assistance in accordance with the requirements set forth below and the HUD Community Planning Department (CPD) Income Eligibility Calculator. The owner will be required to re-certify household income eligibility if the project hasn t begun within 12 months of initial eligibility notification. Program Application Prior to be the start of the application and income verification process, the buyer(s) are required to schedule an appointment with CDBG program staff to present a complete program application with all documentation for review. Incomplete applications will not be considered for review. Please include the following documentation with the program application. Federal Tax return, most recent year, with Schedules and W2 s. Employer Income: payroll statements, most recent 8 weeks. Other Employer Income: Include explanation of other income compensation, i.e. overtime hours, bonus, commission, if applicable. Other Income: yearly alimony and/or child support amount, unemployment statement, rental property lease, a 1099-MISC non-employee/ independent contractor, etc. Benefit Income/Revenue: ALL Social security, disability, unemployment, Workmen's Compensation, military pay, Food Stamps (SNAP), Aid to Family payments (AFDC), etc. Bank : ALL CD, saving(s) and checking account statements, past 6 months. Investment/IRA: ALL IRA, CD, cash reserve, stocks, bonds and pension account statements, past 6 months. 2
Document assets: Explanation, or other documentation if requested, of lump sum or one time deposits, such as inheritances, capital gains, lottery winning, insurance settlements, or other. - Cash assets in excess of $5,000 are considered income and calculated as such for the purposes of determining total household income. Bankruptcy Grant Notice and/or a Foreclosure Writ of Possession statement Current utility statement with buyer(s) name, address, account balance. Full time student verification: college enrollment letter from registrar or recent grades documenting a minimum of 12 credits or 4 classes. Divorce agreement, if applicable. Income Verification The owner household income must not exceed the income guidelines established by HUD based on household size referenced in the table below. Income eligibility is determined by totaling all income and assets over $5,000, received by all persons, over the age of 18, residing in the owner s house. Property Requirements Current HUD Income Eligibility Table (Source: HUD 4/14/17) Household Size Annual Adjusted Gross Income 1 $47,600 2 $54,400 3 $61,200 4 $68,000 5 $73,450 6 $78,900 7 $84,350 8 $89,800 To participate in the CDBG program, the owner shall: 1. Hold legal title to the property. 2. Verify primary residency (owner-occupancy). 3. Be current on all City property taxes. 4. Submit Homeowner s Insurance Policy and/or Flood Insurance Policy. 5. Owner will add the City of Milford as an additional insurer to Homeowner s Insurance Policy and/or Flood Insurance Policy/ 6. Submit current Mortgage statement to verify sufficient equity in the home to ensure the combined total of the mortgage balance(s) with the Housing Program Loan second mortgage will not exceed the market value of the property. 7. Property must be free of liens and encumbrances, other than a first mortgage. 8. Execute an agreement and mortgage lien to secure the program loan by the City of Milford. 3
Program Criteria Program Funding Limits Funding is awarded once and only once per property. The funding amount is limited to fifteen thousand dollars ($15,000). The staff will consider exceeding the program funding limit if unforeseen work is deemed necessary by the staff or emergency repairs exceed the funding limit. Approval of project funding over the maximum amount will be based on eligibility, review of the wait list projects and funding availability. In certain cases, the cost of the housing repair or emergency repairs may exceed the funding limit amount but will not exceed $20,000 unless the owner agrees to pay the amount over the maximum or is willing to extend the loan restriction period. Program Loan & Restriction Period The program funds are awarded to an eligible owner in the form of a 0% interest loan, forgivable after a restriction period, the loan termination date, determined by the loan amount. The property is secured with an agreement and mortgage deed by the CITY and recorded on the land records. Restriction Period: 5 year $2,500 - $10,000 loan 10 year $10,001-$20,000 loan Payment on the loan is required prior to the end of the restriction period if; the owner sells the property, transfers ownership interest through an estate or probate process to person other than spouse, refinances to additionally mortgage the property. Upon notification of intent to sell, transfer title or ownership interest in anyway, a prorated loan payment amount is calculated based on the total loan amount divided by the five year/60month(or time period) less the number of months forgiven since date of execution of a mortgage deed. The CITY shall provide the owner with a letter stating the amount due as of the date of property transfer. A property release will be recorded on the land records upon the CITY receiving payment the remaining loan balance. The CITY has the right to refuse to subordinate its interest in all cases where, in its sole discretion, it does not view subordination as furthering the goals of the program or where the homeowner is financially capable of repaying the City at the time the property title is transfer. 4
Eligible Repairs The owner must have a clear and identifiable housing repair need and provide a written project description on the application. The city reserves the right to reject any work it deems cosmetic or unnecessary. Eligible projects can include: correction of health and building code violations; repair/replace/convert property mechanical systems (plumbing, electrical, heating, cooling); energy efficient improvements and repairs (roofing, siding, windows, doors, insulation); general home repairs (window sills, foundations, steps, floors); water conservation improvements (replace fixtures, repair of minor water leaks, ); water and sewer connections; handicap accessible home improvements (widening of room entry, ramp, grab bars); and abatement of asbestos and lead hazards (and other contaminants).miscellaneous projects, as part of a related repair, such as smoke detectors and door locks. Purchase of materials by owner as part of the agreed upon project scope for use by contractor or owner (interior repair painting, grab bars). Ineligible projects include: new construction; unattached property buildings; the expansion of existing residential structures; theinstallation of luxury items such as swimming pools; purchase of personal property or equipment such as a window air conditioners, refrigerator, and laundry. Owner performed labor costs are not permitted. CDBG Funds are not used to make cosmetic property improvements (kitchen cabinets, painting) or exterior property improvements, such as landscaping, fencing, driveways or sidewalks. These types of projects will be considered if it is in connection with an allowable project or an emergency repair. This program will attempt to accommodate emergency repairs quickly while adhering to the program requirements but resolving anemergency repair may take 10-20days. The program recognizes an emergency repair as afailed roof, heating system, septic system, sewer line or water supply, a building or health code violation, if the violation is eligible under program regulations. If an owner believes a repair meets the program definition of an emergency, please write emergency repair on the front page of the application and provide a written project description. The staff will notify an owner of its decision onthe emergency request based on eligibility, review of the wait list projects andavailable program funds. Notification of Eligibility Program staff will send the ownerwritten notice of income and project eligibility. The eligible owner will be placed on a waiting list prioritized according to the date complete applications are received and determined to be income eligible.non-eligible owners are encouraged to re-apply if their financial circumstances change. 5
Project Coordination General In assisting the owner, the Community Development staff will: Inspect the property including tests for the presence of lead-based paint. Create written project specifications to outline therepair. Discuss the proposed repair within the limits of available funding and allowable project types. Prepare a final work specification and receive a cost estimate from at least two contractors and the set the improvement priorities based on the total cost. Environmental Concerns The cost to comply with HUD regulations related to lead-based paint and the correction or removal of other environmental hazards will not be the owner s responsibility. Lead paint inspections and testing, Lead paint follow-up clearance testing, Lead paint safe construction practices and abatement, Asbestos testing and removal, Radon testing and remediation, Underground oil tank removal, testing and clean-up (subject to limitations), Wastewater contamination control. Lead-Based Paint For properties constructed prior to 1978, a lead-based paint inspection and risk assessment will be required. The publication Protect Your Family from Lead in Your Home will be provided to property owners and building occupants participating in the program. Please sign and return the required lead based paint notification form. The inspection will be arranged by the program staff and will be performed by a professional. The lead based paint inspection accomplishes the following: Identify surfaces coated with lead-based paint that are deteriorated and pose a present risk to building occupants. Identify building components that are coated with lead-based paint that might be disturbed when the repair work is performed thus creating a potential risk. Determine the presence and number of children under age six and the women of childbearing age that might potentially be exposed to lead-based paint hazards within the structure. The results of the assessment will be compiled into a written report and a copy will be provided to the property owner and all occupants. Any tests and/or abatement cost will be paid from grant funds awarded by the U.S. Department of Housing and Urban 6
Development and administered by the Department of Economic and Community Development and will not be included in the project loan amount. Lead-based Paint Hazard If a lead-based paint hazard or potential hazard is identified, the effected surfaces will either need to have the paint abated (properly removed by a trained professional) or be stabilized (repaired to correct a peeling, chipping or chalking condition). Upon completion of the repair work, the house will be re-tested for loose lead paint dust or paint chips that pose a potential hazard. This is referred to as Clearance Testing. The final payment will not be made to the construction contractor until satisfactory Clearance has been achieved. If a lead-based paint hazard could potentially be created by the planned construction (eg. removing old windows and wood trim coated with lead-based paint) the contractor will be directed to perform the construction work following Lead-based Paint Safe Works Practices. This means the work will be done without creating and lead paint chips or dust conditions that could affect the residents while work is being done or after the work is completed. The contractor will provide an itemized cost breakdown for the work being performed including a Provision for Safe Work Practices. High Risk Residents Lead-based paint poisoning can adversely affect adults, children and pets. Young children are the most vulnerable due to their stage of growth and development and their behavior (crawling on the floor, hands in their mouths, etc.). Parents with small children should be particularly diligent in following these important guidelines to protect their families. Households with children under the age of six (6) that have been found to contain lead-based paint will be required to provide the child s written blood test results for the presence of elevated lead levels. If elevated levels are discovered, Connecticut Law requires the Milford Health Department to report the finding to the state Health Department. A lead abatement plan will be developed as part of the general repair plan to eliminate the lead-based paint hazard. Abatement costs will be paid for with grant funds provided by the U.S. Department of Housing and Urban Development and administered by the Department of Community & Economic Development and will not be included in the loan amount. Property Inspection, Specifications and Bid Documents The program staff will inspect the property to develop a project plan with the ownerand a project specification will be prepared for the owners review. The project specification shall be the basis for determining the final project specification to solicit project bidsfrom contractors or vendors. A bid package will be created incorporating the project specifications and the lead-based paint report, if applicable. The package provides general conditions and instructions to the contractor, bid form, local, state and federal acknowledgements and affidavits,a bid 7
due date and date of a mandatory pre-bid walk-through, if necessary to inspect the project. A bid notice will be published on the City webpage and/or in the newspaper. Bidding contractors must have the appropriate CT state licenses and maintain the proper insurance with adequate coverage amounts. Contractor Selection General Construction work for repairs financed through the Housing Loan Program shall be undertaken only through a written contract between the contractor and the property owner. Provisions of general conditions shall be included in all contracts. These protect the property owner and establish parameters for how the work will be performed and the quality standards expected of the contractor. Project Pre-Bid Inspection A mandatory walk-through may be held at the property with all contractors. Specifications will be reviewed and questions answered by the CDBG project manager. Only contractors who attend a mandatory walk-through will be allowed to submit proposals. Bid Preparation, Selection and Completion The local, State and federal procurement procedure will be followed. A contractor may bid on the work to be done but no contract may be awarded until all city requirements are met. All bids are received by the City Purchasing Dept and/or CDBG Administrator and reviewed accordingly. A contract is awarded to the lowest compliant bidder provided that the bid is deemed responsible and acceptable by the City Purchasing Dept and/or CDBG Administrator. HUD requires at least two competitive bid per project or a single source approval. If the owner chooses to award the contract to a contractor other than the lowest bidder, the owner is responsible for the additional cost. Once a contractor is selected, the documentation required in the General Conditions should be submitted by the date required. The contractor will begin the project when all requirements are met, including a signed contract and building permit. The contractor discuss a project timetable with the owner prior to starting the project. The contractor as specified in his/her proposal and contract documents is responsible for finishing the work within the required timeframe. Progress will be monitored for contract compliance and quality of work by the CDBG project 8
manager. Work contained in the contract that requires a permit will be inspected by the Building Inspection Development. Project Management Project Management It shall be the responsibility of the contractor to ensure that all required inspections under local codes are made and contact the CDBG Administrator /CDBG project manager to inspect for payment authorization. No contract will be closed until all work performed undera permit has been inspected and approved by the Milford Building Inspection Department. Contract Change Orders A change order may only be issued to complete unforeseen work requiring additional labor and materials that could not have been identified at the time the original specifications were written. Likewise, a change order may be issued for deletion of work found no longer necessary. Specifications for the addition or deletion of work will be prepared by the CDBG project manager and forwarded to the contractor who will offer a cost proposal for the addition or deletion of work. Upon approval and signature of the owner, contractor, CDBG project manager, and CDBG Administrator, the change order will be made part of the contract and all work contained therein will be governed by the terms of the original contract. Contractor Payment The Contractor shall be paid the Contract Price in progress payments as work is completed to the satisfaction of the CDBG project manager and the property owner. Generally not more than three (3) payments will be made in the course of the construction process and a final payment will be held until the project is satisfactorily completed and lead-based paint clearance, if applicable. The contractor will sign off on the Payment Request Form upon receipt each approved progress and/or final payment. Contractor Disputes Should the contractor default on their obligations or fail to perform in an acceptable manner, the CDBG project manager will make every effort to correct the default and restore acceptable performance. If the default cannot be resolved, the contract will be terminated and an alternative contractor will be retained to complete the project. If a dispute between the contractor and the owner arises that does not clearly represent a default by the contractor, it will be the responsibility of the property owner to resolve the dispute. The construction contract and payment obligations therein represent an 9
agreement between the contractor and the property owner and does not contractually obligate the Department of Economic & Community Development or City of Milford in any way. Every effort will be made to see that the work is performed and the contract is honored to the satisfaction of all parties. Final Documentation & Project Completion After it has been determined that the work has been completed in accordance with the contract, the CDBG Administrator will provide the property owner with copies of payment records, contracts, permits and other documents related to the project. The contractor is required to warranty all workmanship and is held responsible for correction of deficiencies that may arise from workmanship or faulty materials by the contractor or subcontractors for a period of one (1) year from the date of contract completion and acceptance. Equal Opportunity Statement The CDBG Housing program is funded by the U.S. Department of Housing and Urban Development and is governed by federal laws regarding fair housing, fair credit and equal opportunity in lending. The federal equal credit opportunity act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex marital status, age (provided that the applicant has the capacity to enter into a binding contract); because all or part of the applicant s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the consumer credit protection act. The federal agency that administers compliance with this law concerning this agency is the Department of Housing and Urban Development, One Corporate Center, 20 Church Street, 10 th Floor, Hartford, CT, 06103-3220. The City of Milford Homebuyer Assistance Program is an equal opportunity lender. Disputes/Complaints Complaints concerning matters related to this program shall be filed with the Director of Economic and Development and CDBG Administrator in writing. The ECD and CDBG staff shall respond to complaints within ten (10) business days of receipt of the complaint. If the complaint is deemed a regulatory matter, the Staff will consult with the Hartford Office of Housing and Urban Development, Department of Community Planning and Development. If the complainant is dissatisfied with the response of the EDC and CDBG staff, they may appeal to the City Attorney, 110 River Street, Milford CT 06460, within ten (10) business days from issuance of the response. The complainant shall be responsible for providing all relevant information. Upon review of the Community Development office records and information submitted by the complainant, the City Attorney shall issue a written decision within twenty (20) business days after receipt of the appeal. 10