7.2 Housing Rehab Program CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
1/6/97 4:00 P.M.
AGENDASECTION: ORIGINATING DEPARTMENT: APPROVEDFOR
NO. AGENDA:
7 PLANNING &DEVELOPMENT
ITEM ROY DUDARK ~
NO. 2
BY: BY:~:~.~
Item
Consider adoption of City Housing Rehabilitation Program guidelines.
Background
The 1996 City budget contained $75,000 for minor or emergency housing
rehabilitation assistance for qualified homeowners. Financial
assistance is limited to $6,000 and can consist of deferred and
installment loans depending upon income. During 1996, a total of
$45,160 was spent assisting 30 homeowners with the following repair
projects: furnaces (5), plumbing repairs (5), water heaters (4),
water services (4), sewer lines (3), roofs (2), gutters/downspouts
(2), and 10 various other repairs.
The 1997 city budget contains $75,000 to continue this program.
Staff is recommending the following changes in program guidelines:
1. Mobile homes shall not be eligible for assistance.
2. A purchaser under a land sales contract shall not be considered
an owner unless a mortgage has been recorded.
3. No outstanding loans shall exceed $6,000 over a five year
period.
4. No loan shall be made for less than $100.00.
5. The minimum payment per month shall be $25.00.
Recommended Action
Staff would recommend that the amended city guidelines be adopted.
Enclosure: City Program Guidelines
City of Salina Housing Rehabilitation Program
The City of Salina Housing Rehabilitation Program is designed to assist qualified homeowners
with loans to maintain and improve their dwellings through minor rehabilitation. The program is
funded with City of Salina funds and repayments from recipients of loans financed through this
program maybe used to assist other qualified homeowners.
Eligibility_ Requirements
This program will be for emergency repairs and minor rehabilitation projects and is available
throughout the City of Salina. The property must be a one or two family dwelling. Mobile homes
are not eligible.
Eligible applicants must be the owner and occupant of the dwelling for which a rehabilitation loan
is being sought. A purchaser under a land sales contract is not considered an owner unless a
mortgage has been recorded. Each applicant must also have occupied the subject dwelling for not
less than six (6) months and shall have homeowner's insurance. All property taxes and city
utilities currently due shall be fully paid before applications will be considered. All applicants
must meet the HUD Section 8 assisted housing income limits prepared by the Kansas Department
of Commerce and Housing in effect at the time of application.
All applicants will be considered on a non-discriminatory basis without regard to race, color,
creed, religion, national origin, sex, age, handicap, marital or family status.
Deferred Loan / In~l[ollment Loan Terms and Conditions
Deferred and installment loans will be made available based on the income classification of the
applicant household adjusted by household size.
Deferred Loans: A forgivable no-interest loan for a portion or the full amount of rehabilitation
costs. The property owner agrees to repay the remaining principal amount if the homeowner dies
or ceases to occupy the residence, or the property is sold or transferred within five years. For each
month that elapses, 1/60 or 1.66 percent of the principal shall be forgiven. Any repayment
obligation shall be prorated on a monthly basis. The owner must sign a Promissory Note for the
amount of the loan secured by a mortgage against the rehabilitated property in favor of the City of
Salina.
Installment Loan: A repayable no-interest loan for a portion or the full amount of rehabilitation
costs. The property owner agrees to repay the full principal amount loaned according to a
monthly payment or amortization schedule.
Households with less than 50% of median income will be provided deferred loans for 100% of
rehabilitation costs.
1/6/97
Households with incomes 50% to 65% of median will be provided deferred loans for 75% of the
rehabilitation cost, and an installment loan for 25% of the rehabilitation cost.
Households with incomes 65% to 80% of median will be provided with deferred loans for 50% of
the rehabilitation cost, and an installment loan for 50% of the rehabilitation cost.
Households with incomes of more than 80% of the median are not eligible.
City Housing Rehabilitation Program loans shall not exceed $6,000 during a five year period. No
loan shall be made for less than $100.
The term of any loan shall be based upon the borrower's ability to repay the loan without creating
a financial burden but in no case shall the term exceed five years. The minimum payment per
month shall be not less than $25.00. In no case shall the loan amount exceed 75 percent of the
market value of the property following rehabilitation. The amount loaned shall not exceed the
actual cost of rehabilitation excluding any funds supplied by other sources.
Eligible Activities
Houses are eligible for minor rehabilitation activities necessary to correct a substandard condition
provided the dwelling is suitable for rehabilitation. "Suitable for Rehabilitation" is defined as a
substandard house for which it is technically and financially feasible to restore it to a standard
condition, given the limits of the program. "Substandard" is defined as a house that is in need of
any of the following items:
1. Roof repairs or replacement.
2. Sidewall and/or siding repairs.
3. Foundation repairs.
4. Structural member repairs and/or replacement.
5. Electrical repairs and/or replacement.
6. Plumbing repairs and/or replacement.
7. Furnace repairs and/or replacement.
8. Door and or/window repairs and/or replacement.
Completion of emergency repairs and elimination of unsafe and/or unhealthful
conditions existing anywhere on the property.
The following items are ineligible: pools, patios, decks, fireplaces, driveways, garages, vinyl or
metal over siding and other non-essential improvements. In addition, no funds shall be used for
weatherization activities eligible under another governmental program.
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Any housing rehabilitation undertaken must, at a minimum, meet HUD Section 8 Existing
Housing Quality and Cost - Effective Energy Conservation Standards.
Application and Inspection Procedures
An application form must be completed and returned to the Department of Community
Development. Applications will be processed on a first come, first served basis. After an
applicant is qualified for assistance, an inspection of the property will be made at no expense to
the homeowner.
Following inspection, a work write-up and cost estimate will be prepared. Upon property owner
approval of the work write-up, a contractor will be selected by the city to complete the specified
repairs. A construction contract, a loan agreement and promissory note will be prepared, and
following approval by the property owner, a notice to proceed will be issued. All work will be
inspected for compliance with contract specifications and city codes. The property owner must
approve in writing the final inspection of the work.
Homeowner Obligations
Homeowners must agree to allow the rehabilitation work and to provide access to the property by
contractors and city inspectors. A waiver of liability holding the city harmless from injury or
damage caused by the contractor must also be signed by the homeowner.
In order to receive a loan, the property owner must sign a promissory note secured by a mortgage
against the rehabilitated property in favor of the city obligating regular and complete payment of
the principal loan amount. The mortgage against the rehabilitated property will be released upon
complete repayment of the installment loan or expiration of five (5) years for deferred payment
loans.
Contracting Procedures
Contractors will be selected for minor rehabilitation by competitive price quotations from a
minimum of three individuals or firms to provide specific scope of work and/or materials for a
fixed sum.
A contract will be signed by the homeowner, contractor and Department of Community
Development. The contract will outline the scope of work to be performed and required
specifications. No changes will be made unless prior written approval is obtained from all parties.
Progress payments will be made for completed work only. Under no circumstances will final
payment be made to the contractor until all work is satisfactorily completed.
Complaint and Grievance Procedures
Complaints and grievances will be handled initially by the Housing Rehabilitation Coordinator and
Director of Community Development. If that matter cannot be satisfactorily settled, the individual
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may file a written complaint with the City Manager. The complaint will be answered in writing
within fif[een (15) working days of receipt. The individual may file a written appeal of the
decision of the City Manager with the Board of City Commissioners. The individual must appear
in person before the City Commission in order for the appeal to be considered. The decision of
the City Commission shall be final and the individual notified in writing.
Administrative Requirements
The Department of Community Development shall administer the Housing Rehabilitation
Program and assure that all program requirements are being satisfactorily met. City funds may be
expended to cover administrative and work write-up/inspection expenses.
Adopted by the Board of City Commissioners of the City of Salina, Kansas on January 8, 1996.
CITY OF SALINA HOUSING REHABILITATION PROGRAM
INCOME LIMITS
Very Low Income (50% of Median)
1 person 2person 3 person 4person
$12,800 $14,600 $16,400 $18,250
5 person 6 person 7 person 8+person
$19,700 $21,150 $22,650 $24,100
Low Income (65% of Median)
1 person 2person 3 person
$16,650 $19,000 $21,325
4 person 5 person 6 person 7 person 8+person
$23,725 $25,600 $27,500 $29,450 $31,325
Moderate Income (80% of Median)
1 person 2person 3 person 4person
$20,450 $23,350 $26,300 $29,200
5 person 6 person 7 person 8+person
$31,550 $33,850 $36,200 $38,550
Median Income
1 person 2person 3 person 4person
$25,600 $29,200 $32,800 $36,500
5 person 6 person 7 person 8+person
$39,400 $42,300 $45,300 48,200
Source: Kansas Department of Commerce and Housing
Prepared: 2/1/96
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