Award Training

2007-2009 HOME Owner-Occupied Rehabilitation Program

HOME OWNER OCCUPIED REHABILITATION PROGRAM

Agenda Community Development Staff Introduction Important Dates Award Processes

Community Development Staff

Cecelia Johnson-Powell, Community Development Manager

Brian Philps, Senior Representative Megan Maxwell, Representative NW Region Emily Duncan, Representative NW Region Mike Recker, Representative NE Region Sara Cobb, Representative NE Region Jennifer Snider, Representative SW Region Alan Rakowski, Representative SW Region Talisha Bradley, Representative SE Region Kelli Barker, Representative SE Region

Important Dates

October 1, 2007- Program Year Begins October 31, 2007- Executed Award

Documents due at IHCDA office. October 31, 2008- 60% of funds must be

drawn April 30, 2009- Program Expires

Program Guidelines

Eligible Beneficiaries– Elderly– Persons With Disabilities– Children age 6 or under

Program Guidelines

Eligible Properties– Any owner occupied single family property or a

condominium unit– Ownership must be in form of fee simple title

or 99-year leasehold– If manufactured housing, must be built in

compliance with Federal Manufactured Housing Construction and Safety Standards law

Program Guidelines

Ineligible Properties– 100-year flood plain– Life estates

Program Guidelines

Rehabilitation Requirements– Follow IHCDA Rehabilitation Standards – Funds can be used in conjunction with your

weatherization program or on homes not receiving Weatherization funding

– Home, at completion, must meet stricter of Indiana State Building code or local rehabilitation standards

Program Guidelines

Affordability Requirements– Up to $25,000 per unit-3 years

Lead Based Paint Beneficiary Requirements

– “ Protect Your Family from Lead in Your Home” Contractor Requirements

– “Lead Paint Safety: A Field Guide for Painting” Recipient & Subrecipient Requirements

– Poster: “Protect Your Children from Lead Poisoning”

Lead Based Paint

Exemptions– Residential structures built after 01/01/78– Emergency action activities– Areas where lead based paint was banned by

state and local governments prior to 01/01/78– Properties previously found not to contain lead

based paint– Properties where lead based paint has been

removed using appropriate methods

Lead Based Paint

Exemptions (continued)– Unoccupied units to be demolished– Property not suitable for habitation– Rehabilitation does not disturb paint– Single Room Occupancy (where child

occupancy is highly unlikely)

Lead Based Paint

Notification Requirements for Property Owners– Exhibits – C, D, F, G, H & I– Notice of Evaluation– Notice of Hazard Reduction & Clearance

Lead Safe Housing Rule – Applicability Form– Exhibit E – ensures applicability of lead rule

Accessibility Requirements

24 CFR Part 8– Uniform Federal Accessibility Standards (UFAS)

– Places of client intake Program Accessibility

– People have access to apply for programs

– Reasonable accommodations

– Communication Systems

– Accessibility logo on client-related materials

Civil Rights

IHCDA Requirements Post the Fair Housing Opportunity Poster

– Include Equal Housing Opportunity logo on all client materials (with Accessibility logo)

– Logo available at: www.in.gov/ihfa/comdev/newsfaqs/newsfaqs.htm

Beneficiary Requirement– Provide all beneficiaries throughout project affordability

period, “You May Be a Victim Of…” brochure

Conflict of Interest

HOME Procedures– Recipients should request exception to conflict of interest

prohibition– Copy of minutes from public meeting– Opinion letter from attorney– IHCDA reviews & forwards to HUD– IHCDA will forward HUD decision to recipient– Exhibit A – Uniform Conflict of Interest Disclosure

Statement submit within 15 days to:• State Board of Accounts;• Clerk of Circuit Court; and• IHCDA

Income Verification

All households must be income eligible to receive assistance, less than or equal to 80% AMI

Must complete an income verification IHCDA uses the Section 8 Definition of

Income which projects income forward for the following 12-months

Income Verification

Owner-Occupied Projects– Household must be income eligible at the time

of construction contract execution– An Income Verification is good for 6 months– If more than six months lapse, between initial

application and rehabilitation contract execution, household income must be re-verified.

Income Verification

Helpful tools– Technical Guide for Determining Income and

Allowances for the HOME Program can be ordered at 800-998-9999

– Income Calculator- http://www.hud.gov/offices/cpd/affordablehousing/training/calculator/calculator.cfm

Income Verification

Exhibit A – Calculating annual income Exhibit B – Verification of employment Exhibit C – Verification of income from a

business Exhibit D – Verification of social security

benefits Exhibit E – Verification of child support

payments

Income Verification

Exhibit F – Verification of full-time student status

Exhibit G – Verification of unemployment benefits

Exhibit H – Verification of Public Assistance Income

Exhibit I – Verification of Assets on Deposit

Procurement Procedures

What is Procurement? – The process of selecting a person, business, or

retail store to supply you with a service or materials

             

Procurement Procedures

Not-for-Profit Agencies (NFPs)– May utilize own procurement standards as long as:

• The standards comply with OMB Circular A-110

• IHCDA will look at these standards during monitoring visit

Procurement Procedures

Not for Profit Procurement Standards– Written items to include in Standards:

• Avoid purchasing unnecessary items• Analysis of lease and purchase alternatives• Solicitation of goods & services – specific as to

what applies when

– MBE/WBE Solicitation• Must solicit at least two MBE/WBE firms with each

procurement action.

Procurement Procedures

Contractor Verification – Required for All Recipients– Must verify all contractors being considered for bid

– Verify contractors, print and place in file

– Verification may be found at the following websites:• HUD Limited Denial of participation

– http://www.hud.gov/offices/enforce/ecldp.cfm

• Excluded Parties List System– http://www.epls.gov/epls/search.do

Procurement Procedures

Required Contract Provisions– Effective Date of Contract

– Names & Addresses of recipient/sub-recipient and contractor

– Names of representatives of recipient/sub-recipient and contractor who will act as liaison for administration of contract

– A citation of authority of the recipient under which the contract is entered into and source of funds

Procurement Procedures

Required Contract Provisions (cont’d)– Contractual provisions or conditions when a contractor

violates or breaches the contract terms

– Provisions for termination

– Scope of services

– Match contributions—optional

– Bonding & insurance requirements (if applicable)

– Federal Standards Provisions

Procurement Procedures

Retainage Requirements– Only for contracts over $100,000– Some portion must be held until all work is

completed satisfactorily– Any interest on the retained funds goes to the

contractor– IHCDA requires retainage on all homes until

clearance is received on the lead-based paint work

Procurement Procedures

Notice of Contract Execution (Exhibit E) – Submit to the Community Development

Coordinator – Submitted for all contracts with contractors and

subcontractors– Required in order to pay claims – Insurance information

Set-Up

In order to set-up a property address you must have: – Received Release of Funds from IHCDA– Received Section 106 Historic Review

Clearance letter from DHPA– Addressed Lead-Based Paint– Addressed Insurance

Set-Up

Submit the following:– Set-up Report – Exhibit A– Summary of HOME Assisted Sites – Exhibit B– Lead Based Paint Form – Exhibit C– After-Rehab Appraisal

Drawing Funds

Claim Voucher Forms:– Exhibit A – Draw Checklists

– Exhibit B – Claim Voucher

– Exhibit C – Claim Voucher Summary

– Exhibit D-Claim Voucher Narrative

– Exhibit E – Claim Voucher Supplemental

– Exhibit F – Ledger of Expenditure by Site Address

– Exhibit G – Inspection Certification Form

Drawing Funds

Receipt & Disbursement of Funds– Separate account within General Fund– Disburse funds to a $0 balance within 15 days

of receiving IHCDA check

Completion

– Exhibit A: Owner-Occupied Rehabilitation Completion Report

– Individual Site-Match Summary – Exhibit B (if applicable)

• Detailed match support documentation

Modifications

Program Modifications– Submit request to your Community

Development Representative– Award Extensions– Budget Reallocation– Substantial Reconstruction

Modifications

Award Extensions– IHCDA will not entertain Award Extensions

for the 2007-2009 Program Year

Modifications

Budget Reallocation – Provide detail as to why you are requesting to

shift funds– Include revised budget based on request

Modifications

Substantial Reconstruction – The rebuilding of existing housing on the same

foundation– Cannot exceed subsidy limits as outlined in

award agreement

Modifications

Substantial Reconstruction Waivers are considered based on:

– Condition of housing-unsuitable for rehabilitation– Cost of reconstruction is at least 20% less than to

purchase newly constructed housing– Estimated reconstruction cost is less than the fair market

value of the reconstructed housing and land—based on appraisal

– Unit is located on land held by the beneficiary in fee simple title or 99-year leasehold

– Is the principal residence of the beneficiary

Construction Requirements

Follow stricter of Indiana State Building Code or local rehabilitation standards

Deed Restrictions

Deed Restrictions– Must be recorded on properties assisted with HOME

funds– Deed Restrictions specify the affordability period,

identifies if resale or recapture is applicable and includes language that states the property will run as the activity it was funded for

Affordability Period – Determined by the total amount of assistance that goes

into each unit (rehabilitation, demolition, and program delivery)

Deed Restrictions

Termination of Affordability Period– Foreclosure– Transfer in lieu of foreclosure– Assignment of an FHA insured mortgage to

HUD– HOME Award Recipient may use preemptive

rights to purchase the housing before foreclosure to preserve affordability

Deed Restrictions

3 year Affordability Period

Number of Years Fulfilled % of HOME funds Recaptured

Year 1 66%

Year 2 33%

Year 3 0%

Deed Restrictions

Recapture/Resale Provisions– Recipients must indicate in their program guidelines

if recapture or resale provisions will be utilized in their programs

Recapture Guidelines– Maximum amount of HOME funds subject to recapture is based

on the amount of HOME assistance that enabled the homebuyer to buy the unit

– The recapture is based on the number of years that the owner has occupied the property during the affordability period.

Deed Restrictions

Resale Guidelines– Resale restrictions require the seller to sell the

property only to a low-income family (below 80% AMI), that will use the property as their principal residence

– The purchasing family should pay no more than 29% of their gross annual income towards the principal, interest, taxes and insurance for the property on a monthly basis

Deed Restrictions

Resale Guidelines (continued)– Award recipients may establish guidelines regarding

the back-end ratio

– The guidelines must be described in the award recipient’s program guidelines

– The recipient needs to establish guidelines regarding subordination

– Forgiven upon death

Program Monitoring

What is the purpose for monitoring?– Verification of program progress

– Ensure necessary records are maintained

– Contracts and purchase orders are issued in accordance with required procurement procedures

– Specific program requirements and objectives are being met

Program Monitoring

Who conducts monitoring/audit– Self-monitoring – Award Recipient– Monitoring – IHCDA Staff

Self-Monitoring– Exhibit A – self-monitoring checklist– Award Recipient should perform period self-monitoring to anticipate

and correct problems at the earliest possible stage– The checklist contains specific questions about award progress. The

checklist is designed so that “no” answers are items which require correction.

– Recipient should contact IHCDA Community Development Representative for questions or assistance upon completion of the self-monitoring

Program Monitoring

Types of monitoring:– On-Site Review

• Exit Interview

Program Monitoring

Results of monitoring review– Upon completion of the monitoring, recipient will

receive a formal monitoring letter

– The letter will list those areas of compliance that were reviewed and detail the results of the review

– Three classifications of determinations: Satisfactory, Findings, Concerns

Program Monitoring

Results Review– Satisfactory– Concerns– Findings

Program Monitoring

Determination and Responses– Written review– Chief Executive respond to written review

• Findings• Concerns

Close-Out Procedures

Final Claim for Payment– Final claim on an award is due to IHCDA by 5:00 p.m.

on the date the award expires

– Claims received after this time will not be processed by IHCDA

– IHCDA will withhold the final $5,000 payment on the award until all the close-out documentation, match/leverage information (if applicable), and all other supporting documentation has been submitted and approved by IHCDA staff

Close-Out Procedures

Items to be submitted– Exhibit A – Status of Federal Cash & Match/Leverage

Statement

– Exhibit B – Property Inventory Form

– Exhibit C – Financial Settlement/Expenditure Summary

– Exhibit D – Applicants & Beneficiary Summary

– Exhibit E – Section 3: Economic Opportunities for Low and Very Low Income Persons

– Exhibit F – Certification of Recipient

Close-Out Procedures

Close-Out– Once IHCDA has reviewed all of the close-out

documentation, a letter will be issued closing out the award

– The letter will outline the affordability period and record retention requirements

GOOD LUCK