060711 lakeport city council - council business

8/6/2019 060711 Lakeport City Council - Council Business

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Meeting Date: 06/07/2011 Page 1 Agenda Item #VIII.A.1.

CITY OF LAKEPORTCity Council

Lakeport Redevelopment AgencyCity of Lakeport Municipal Sewer District

STAFF REPORTRE: Revisions to the CDBG Housing Rehabilitation Program

GuidelinesMEETING DATE: 06/07/2011

SUBMITTED BY: Richard Knoll, Redevelopment, Housing & Economic Development Director

PURPOSE OF REPORT: Information only Discussion Action Item

WHAT IS BEING ASKED OF THE CITY COUNCIL/AGENCY/BOARD:

The City Council is being asked to approve minor revisions to the Community Development Block Grant(CDBG) Housing Rehabilitation Guidelines (Guidelines).

BACKGROUND:

The Guidelines establish the City policies for the projects to be considered for rehabilitation utilizing CDBGfunds. They include income limits, qualification criteria, property eligibility, loan terms, grant eligibilitycriteria, relocation plan, rehabilitation standards, etc. The essence of the Citys CDBG HousingRehabilitation Guidelines has been in place for over 20 years in this fashion.

In December 2011, the City Council approved the CDBG Housing Rehabilitation Guidelines for the new$400,000 CDBG grant. After staff reviewing the Guidelines with Lakeport's State representative, a fewminor revisions are being proposed by staff.

DISCUSSION:

The proposed revisions are in six paragraphs highlighted in yellow, beginning on page 5. On page 5 of theGuidelines, the interest rate was changed from 2% to 2.5% to match the interest rate charged on theHOME rehab loans.

Also on page 5, the total CDBG program funds distributed as grants was changed from $100,000 to$70,000.

Page 6 changed the percent of amortized payments to 75% as opposed to 50% and the percentage ofamounts to be deferred to 25% instead of 50%.

Page 6 also now indicates that owner-investor loans will be governed by a recorded Rent LimitationAgreement until paid in full - rather than for a period of 5 years. Same change has been made to the"Terms" paragraph on page 7.

Please note that the Attachments are, for the most part, language that has been set forth by the State.

OPTIONS:

Approve the proposed revisions as presented; revise the proposed revisions; and/or make additionalrevisions.


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Meeting Date: 06/07/2011 Page 2 Agenda Item #VIII.A.1.

FISCAL IMPACT:

None $ Account Number: Comments:

SUGGESTED MOTIONS:

Move that the City Council adopt the June 2011 CDBG Housing Rehabilitation Guidelines as presented, orwith revisions.

Attachments: Rehabilitation Guidelines


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City ofLakeport

CDBG

Housing Rehabilitation

Program

Program Guidelines

June 2011


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TABLE OF CONTENTS

I. PROGRAM OBJECTIVE 1

II. ELIGIBILITY 1CONFLICT OF INTERESTFAIR HOUSING

III. CURRENT INCOME LIMITS FOR THE AREA, BY HOUSEHOLD SIZE 1HOUSEHOLDANNUALINCOME

IV. INCOME QUALIFICATION CRITERIA... 2HOUSEHOLDINCOMEDEFINITIONASSETS

V. OCCUPANCY.. 2

TEMPORARY RELOCATION

VI. PROPERTY ELIGIBILITY... 3LOCATIONREHABILITATION STANDARDSENERGY EFFICIENCYGENERAL PROPERTY IMPROVEMENTSLEAD BASED PAINTMOBILEHOMES

VII. FINANCING... 4OWNER-OCCUPANT

TYPESOFFINANCINGANDTERMSDETERMININGELIGIBILITY

OWNER-INVESTORTYPESANDTERMSOFFINANCINGRESTRICTIONS

RENTLIMITATIONAGREEMENTBASERENT(S)TERMSLEADBASEDPAINTMAINTENANCEAGREEMENT

VIII. RESIDENCY REQUIREMENTS... 7OWNER-OCCUPANTOWNER-INVESTOR

IX. DEFAULT AND FORECLOSURE..8

X. INSURANCE....8FIREINSURANCEFLOODINSURANCE

XI. LOANORGRANTAPPROVAL.....8


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XII. PROGRAMCOMPLAINTANDAPPEALPROCEDURE.... 8

XIII. GRIEVANCES BETWEEN PARTICIPANTS AND CONSTRUCTION CONTRACTOR8

XIV. REPAIRCALLBACKS9

XV. CONTRACTINGPROCEDURES...9

XVI. SWEATEQUITY..9

XVII. AMENDMENTS...9

XVIII. EXCEPTIONS.9

ATTACHMENTS:

ATTACHMENT A: MAXIMUM INCOME LIMITS FOR LAKE COUNTY

ATTACHMENT B: 24CFR PART 5 ANNUAL INCOME INCLUSIONS

ATTACHMENT C: 24CFR PART 5 ANNUAL INCOME EXCLUSIONS

ATTACHMENT D: ASSET INCLUSIONS AND EXCLUSIONS

ATTACHMENT E: CITY OF LAKEPORT TEMPORARY RELOCATION PLAN

ATTACHMENT F: REHABILITATION GRADES AND STANDARDS

ATTACHMENT G: LOAN SERVICING POLICIES AND PROCEDURES


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CCIITTYY OOFF LLAAKKEEPPOORRTTCDBG HOUSING REHABILITATION

PROGRAM GUIDELINES

I. PROGRAM OBJECTIVE

The objective of the City of Lakeport Low-Income Housing Rehabilitation Program is to increase and improvecommunitys supply of low-income housing. To fulfill this objective, the City will provide financial assistance, and

such assistance to projects where the principal beneficiaries are low-income persons.

II. ELIGIBILITY

Conflict of Interest

No member of the governing body and no other official, employee, or agent of the City who exercises policy, decismaking functions, or responsibilities in connection with the planning and implementation of the Program shall directindirectly be eligible for the Program, unless the application for assistance has been reviewed and approved accordinapplicable California Department of Housing and Community Development (HCD) guidelines. This ineligibility continue for one year after an individual's relationship with the City ends.

A contractor with a vested interest in a property cannot bid on a rehabilitation job. Such a contractor may acowner/builder, subject to standard construction procedures. (Owner/builders are reimbursed for materials purchwhich are verified by invoice/receipt and used on the job. Reimbursement occurs after the installation is verified byProgram Inspector to be part of the scope of work. Owner/builders are not reimbursed for labor.) The City reserveright to determine if an owner is capable of owner/builder rehabilitation work.

Fair Housing

The Program will be implemented in ways consistent with the City's commitment to Fair Housing. No person shaexcluded from participation in, denied the benefit of, or be subjected to discrimination under any program or actfunded in whole or in part with Community Development Block Grant (CDBG) funds on the basis of his or her religioreligious affiliation, age, race, color, ancestry, national origin, sex, marital status, familial status (children), physica

mental disability, sexual orientation, or other arbitrary cause.

III. CURRENT INCOME LIMITS FOR THE AREA, BY HOUSEHOLD SIZE

All applicants must certify that they meet the household income eligibility requirements for the Program and havetheir household income documented. The income limits in place at the time of loan approval will apply whendetermining applicant income-eligibility. All applicants must have incomes at or below 80% of the Countys areamedian income (AMI), adjusted for household size, as published by HCD each year. See Attachment A Current Income Limits for Lake County.

Household: All persons in residence are considered household members for purposes of income eligibility.

Annual Income: Generally, the gross amount of income of all adult household members that is anticipated to bereceived during the coming 12-month period.

Owner Occupant - To be eligible, household income (the combined income of all adult household members) mbe equal to, or less than, the applicable HCD income guidelines for Lake County.

Owner Investor - There are no restrictions on the income of the owner-investor unless the owner- investormember of the Targeted Income Group (TIG) and is interested in qualifying for a Deferred Payment Loan.


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Tenant - If a rental is currently occupied, the tenant's household income (combined income of all adult househmembers) must be equal to, or less than, the applicable HCD income guidelines. Tenants must cooperatproviding income documentation.

IV. INCOME QUALIFICATION CRITERIA

Projected annual gross income of the applicant household will be used to determine whether they are above orbelow the published HCD income limits. Income qualification criteria, as shown in the most recent HCDprogram-specific guidance, will be followed to determine and certify the households annual gross income.Income will be verified by reviewing and documenting tax returns, copies of wage receipts, subsidy checks, bankstatements and third party verification of employment forms sent to employers. All documentation shall be datedwithin six months prior to loan closing and kept in the applicant file and held in strict confidence.

Household Income Definition:

Household income is the annual gross income of all adult household members that is projected to be receivedduring the coming 12-month period, and will be used to determine program eligibility. For those types of incomecounted, gross amounts (before any deductions have been taken) are used; and the types of income that are notconsidered would be income of minors or live-in aides. Certain other household members living apart from thehousehold also require special consideration. The households projected ability to pay must be used, rather thanpast earnings, when calculating income. See Attachments B and C Annual Income Inclusions and

Exclusions.

Assets:

There is no asset limitation for participation in the Program. Income from assets is, however, recognized as partof annual income under the Part 5 definition. An asset is a cash or non-cash item that can be converted to cash.The value of necessary items such as furniture and automobiles are not included. (Note: it is the income earnede.g. interest on a savings account not the asset value, which is counted in annual income.)

An assets cash value is the market value less reasonable expenses required to convert the asset to cash, including :Penalties or fees for converting financial holdings and costs for selling real property. The cash value (rather thanthe market value) of an item is counted as an asset. See Attachment DAsset Inclusions and Exclusions.

V. OCCUPANCY

No unit to be rehabilitated will be eligible if it is currently occupied by an HCD ineligible household. Rental househoccupying such units will be allowed to remain in the units. To prevent owners from evicting ineligible tenants beapplying for the Program, the owner must certify that no tenant has been forced to move without cause duringprevious six months.

Temporary Relocation

Tenants will be informed of their eligibility for temporary relocation benefits if occupancy during rehabilitaconstitutes a danger to the health and safety of the tenant, public danger or is otherwise undesirable because of the na

of the project. Relocated tenants will receive increased housing costs, payment for moving and related expensesappropriate advisory services, as detailed in the City of Lakeport "Residential Antidisplacement and RelocaAssistance Plan". See Attachment E.

Owner-occupants will not eligible for temporary relocation benefits, unless health and safety threats are determineexist by the Program Inspector.


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VI. PROPERTY ELIGIBILITY

Location

Units to be rehabilitated must be located within the city limits of the City of Lakeport.

Rehabilitation Standards

All repair work will meet Uniform Building Code standards. See Attachment F - Rehabilitation Grades and Standa

Priority will be given to the elimination of health and safety hazards and energy efficiency.

The City is committed to using the following criteria to ensure that all projects funded through the Housing RehabilitaProgram meet the established minimum level of green building standards:

Materials and Resources:

Use of plant and tree species that require low water use in sufficient quantities Installation of irrigation systems using only low-flow drip, bubblers, or low-flow sprinklers Use of engineered lumber for beams, headers, wood I-Joists or web trusses for floors and ceilings Use of Oriented Strand Board (OSB) for floor, wall, and roof sheathing To provide effective air sealing:

o Seal sole plateso Seal exterior penetrations at plumbing, electrical, and other penetrationso Seal top plate penetrations at plumbing, electrical, cable, and other penetrationso Weatherstrip doors and attic access openingso Seal penetrations in interior equipment closets and roomso Seal around bathtub drain penetrations in raised floors

Install and flash windows in compliance with window installation protocols Exterior doors:

o Insulated or solid coreo Flush, paint or stain grade shall be metal clad or have hardwood faceso Factory primed on six sides with a one-year warranty

Select durable non-combustible roofing materials which carry a three-year contractor installaguaranteeo 20-year manufacturers warranty: oro 30-year manufacturers warranty

Energy Efficiency:

Install ENERGY STARCeiling Fans in living areas and all bedrooms; install a whole house fan insulated louvers; or install an economizer

Install ENERGY STARAppliances (where applicable) Install gas storage water heater with an Energy Factor (EF) of 0.62 or greater and a capacity of at leasgallons for one- and two-bedroom units and 40 gallons for three-bedroom units or larger

Water Efficiency:

Use water-saving fixtures or flow restrictorso Kitchen and Service Areas < 2 gallons per minute (gpm)o Bathroom Sinks < or = 1.5 gallons per minute (gpm)o Showers and bathtubs < or = 2.5 gallons per minute (gpm)


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Indoor Environmental Quality:

Use Low-VOC paint and staino Flat interior wall/ceiling paints & stains < 50gpl VOCso Non-flat wall/ceiling paints & stains < 150gpl VOCs

Provide window coveringo Drapes or blinds may be fire retardant

Floor Coveringo Light and medium traffic areas shall have vinyl or linoleum at least 3/32 in thickness o Heavy traffic areas shall have vinyl or linoleum at least 1/8 in thickness o Carpet shall comply with U.S. Department of Housing and Urban Development/Federal Hou

Administration UM 44C, or alternatively, cork, bamboo, linoleum, or hardwood floors shaprovided in all other floor areas.

Evidence that energy efficiency criteria was met will be evidenced by purchase order information from contracmaintaining detailed work write-ups that include all criteria, pictures, inspections, etc.

Property ImprovementsAll improvements must be physically attached to the property and permanent in nature. General property improvemenwill be limited to 20% of the rehabilitation loan amount. Luxury items are not permitted.

Lead-Based Paint

Program participants rehabilitating homes constructed prior to January 1, 1978 must be provided with the prdisclosure notification concerning lead-based paint (LBP) hazards. Whenever pre-1978 houses are rehabilitated uCDBG, Lead-Based Paint Requirements will be fulfilled. The cost associated with meeting these requirements is eligto be paid for with CDBG funds, and will be considered during program design.

Mobile Homes

The Owner-Occupied Rehabilitation Program should be used, to the greatest extent possible, to replace unsoundand/or pre-76 mobile homes, whether the home is in a park or on a rented lot or on owned land. This goal is

among the highest community development priorities.

Should the residential dwelling or existing mobile home that is being considered for rehabilitation meet thecriteria for "reconstruction" discussed below and as determined from the CDBG reconstruction worksheet, a newmanufactured home can be used for replacement. All costs associated with the purchase and transportation can beadded to the applicant's loan. Manufactured home replacements must meet local design requirements. As ageneral rule, mobile homes manufactured prior to 1976 should be replaced, subject to compliance with theseguidelines, as they, with rare exceptions, do not comply with the standards contained in the NationalManufactured Housing Construction and Safety Act of 1974 and the costs of rehabilitation (compliance) willexceed replacement costs.

Mobile homes manufactured after 1976 may be renovated if economically feasible under the guidelines described

above or replaced if this is not feasible.

For reconstruction projects, it is required that the structure being demolished be replaced with a like structure(replace manufactured housing with manufactured housing, for example) of like size. Stick built homes can bereplaced with manufactured housing. Used manufactured homes in very good condition can be used as areplacement unit, with agreement from the property owner, in order to reduce expenditures.


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VII. FINANCING

Owner Occupant

Limits - An eligible owner may qualify for the full cost of the rehabilitation work needed to comply with UnifBuilding Code standards and to meet the energy efficiency standards outlined in Section II above. Maximum assistwith CDBG funds shall never cause the combined loan-to-value (LTV) of the property to exceed 100% of the estimafter-rehabilitation value. Rehabilitation costs for CDBG funded jobs may be supplemented with personal financinwith other loan or grant programs, which may be sources of leverage for the City.

Types of Financing and Terms

Deferred Payment Loan (DPL)A 2.5%, simple-interest loan, evidenced by a Promissory Note and secured by a Dof Trust, with no payback required until the participant sells or transfers title or discontinues residence in the dwellunless sold or transferred to a targeted income group household. Payments may be made voluntarily on a DPL.

Grants are limited, with a maximum grant of $10,000 per household. The total CDBG program funds distributegrants shall not exceed $70,000.

Determining Eligibility

1. Every targeted income group owner-occupant who is determined to be eligible for the Program willreceive DPL financing.

2. A limited number of grants, with a maximum of $10,000, are available as follows:

Senior Citizen - at least 62 years old.

Handicapped - for handicap modifications to a house with one or more physically handicapoccupants who would function more independently if such modifications were installed.

Lowest Targeted Income Group - with gross annual income at or less than 30% percent of comedian income. Grants to residents with gross annual income of 50% of county median caconsidered under extreme hardship conditions as determined by the Loan Committee.

Owner-Investor

Limits-An owner-investor may qualify for the full cost of the rehabilitation work needed to comply with UnifBuilding Code standards. Maximum assistance per unit with CDBG funds will be determined by the City on a casecase basis. Two underwriting variables that will be considered are the loan-to-value ratio (LTV) is there suffiequity in the property to secure the loan, and the debt-to-income ratio of the owner-investor (the ability of the Borrowrepay the debt). Total indebtedness against property (combined LTV) shall not exceed 100 percent of the arehabilitation value. Rehabilitation costs for CDBG funded jobs may be supplemented with personal financing or other funds, which may be sources of leverage for the City. Priority will be given to owner-occupied investor pro(i.e.: a duplex, tri-plex, or four-plex where the owner occupies one of the units.)

Maximum loanto-value

The maximum encumbrance (combined LTV) will normally be limited to 100% of the propertys after-rehabilivalue. Exceptions will be made on a case-by-case basis, and must be approved by the Loan Committee. The City require an appraisal to determine the after-rehabilitation value of a property.


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Types and Terms of Financing

Amortized loanOwner-Investors will be offered a Below Market Interest Rate (BMIR) loan at 3% interest. The loan wevidenced by a Promissory Note, secured by a Deed of Trust which is due and payable in 15 years but which can be amorfor up to 20 years.

Combined financing - 75% percent of rehabilitation costs as an amortized BMIR loan and 25% percent as a DPL ma

offered to owner-investors when it is determined that the ability to make a fully amortized loan payment will crea

financial hardship for the owner-investor. These loans will be approved on a case-by-case basis by the Loan Commit

A DPL will be offered to any owner-investor who is determined to be in the TIG (Targeted Income Group).

All owner-investor loans will be governed by a recorded Rent Limitation Agreement until paid in full, as outlined belo

Restrictions

Rent Limitation Agreement (RLA)

An owner investor who elects to rehabilitate a rental unit with CDBG financing must sign an RLA, which wil

recorded. This agreement will specify:

In no instance shall rents exceed the U.S. Department of Housing and Urban Development (HUD) Fair Market R

(FMR) schedule while the RLA is in effect.

Base Rent -- Vacant Unit

If the house is vacant, rent charges shall not exceed 30 percent of 80 percent of the median income (by County) fo

appropriate household size in that unit. The owner-investor shall affirmatively seek TIG households by contacting

local housing authority. Where such contact does not result in eligible TIG tenants, the owner-investor shall contac

City for guidance.

Base Rent -- Occupied Unit

If the house is occupied, rent charges shall not exceed 30 percent of the existing tenants' household income; or, wh

before rehabilitation, rents already exceed 30 percent of the existing tenants' income, no rent increases shall be allo

which provide for rents plus utilities over 30 percent of the tenants' income.

Terms

Adherence to the Rent Limitation Agreement shall be required until the loan is paid in full.

Lead-based Paint

Program participants, including tenants, rehabilitating homes constructed prior to January 1, 1978 must be provided the proper disclosure notification concerning lead-based paint (LBP) hazards. Whenever pre-1978 housesrehabilitated under CDBG, lead-based paint regulations will be met. The cost associated with meeting these requiremis eligible to be paid for with CDBG funds, and will be considered during project design.


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Maintenance Agreement

As specified in the Rehabilitation Loan Agreement, an owner investor who participates in the program must maintainproperty at post-rehabilitation conditions for a minimum of five years. Should the property not be maintaaccordingly, the loan will become due and payable, and if necessary, foreclosure proceedings will be instituted.

VIII. RESIDENCY REQUIREMENTS

Owner Occupant

Owner occupants will be required to submit to the city between January 1 and 15 of each year for the term of the loan:

Proof of occupancy in the form of a copy of a current utility bill.

Statement of unit's continued use as a residence.

Declaration that other title holders do not reside on the premises.

In the event that an owner occupant sells, transfers title, or discontinues residence in the rehabilitated or purchasedproperty for any reason, the loan is due and payable.

If an owner-occupant sells or otherwise transfers title of the property to a targeted income group household, the City consider subordinating the loan and continuing all or part of the lien as a DPL.

If an owner-occupant dies, and the heir to the property lives in the house and is income-eligible, the heir maypermitted, upon approval of the City, to assume the loan at the rate and terms the heir qualifies for under cuparticipation guidelines.

If an owner-occupant dies and the heir is not income-eligible, the loan is due and payable.

If an owner-occupant dies and the heir is not income-eligible, but he or she chooses to rent the unit to TIG householdsagrees to comply with owner-investor restrictions, the heir may be permitted, upon approval of the City, to assumeloan at the same rate and terms offered owner-investors under current program guidelines. If the heir/owner-investor

not comply with owner-investor restrictions, the loan is due and payable.

If an owner-occupant wants to convert the rehabilitated property to a rental unit, the owner must notify the Citadvance. If the City approves the conversion of an owner-occupied unit to a rental, the owner will be required to comwith the provisions of the owner-investor guidelines, including rent limitation provisions and financing arrangements.

If an owner wants to convert the rehabilitated property to any commercial or non-residential use, the loan is due andpayable.

Owner Investor

If an owner-investor sells or transfers title of the rehabilitated property for any reason, the loan is due and payable.

An owner-investor may convert a rental property to his or her personal residence if all conditions below exist:

He or she can prove that the previous tenant was not evicted without cause.

He or she is income-eligible.

He or she requests approval from the City.


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If an owner-investor converts a rental property, rehabilitated with CDBG funds, to his or her personal residence, but hshe is not income-eligible, the loan is due and payable.

If an owner wants to convert the rehabilitated property to any commercial or non-residential use, the loan is due andpayable.

IX. DEFAULT AND FORECLOSURE

If an owner defaults on a loan, and foreclosure procedures are instituted, they shall be carried out according to the CD

Foreclosure Policy adopted by the City. See Attachment GLoan Servicing Policies and Procedures

X. INSURANCE

Fire Insurance

Borrowers shall maintain fire insurance on the rehabilitated property for the duration of the loan(s). This insurance mbe an amount adequate to cover all encumbrances on the property. The insurer must identify the City as Loss Payeethe amount of the loan(s). A binder must be provided to the City.

In the event the applicant fails to make the fire insurance premium payments in a timely fashion, the City, at its optmay make such payments for a period not to exceed 60 days. The City may, in its discretion and upon the showin

special circumstances, make such premium payments for a longer period of time. Should the City make any paymenmay, in its sole discretion, add such payments to the principal amount that the Borrower is obligated to repay the under this program.

Flood Insurance

In areas designated by HUD as flood prone, Borrowers will be required to maintain flood insurance in an amoadequate to secure the Rehabilitation Loan. This policy must designate the City as Loss Payee. The premium mapaid by the Rehabilitation Loan for one year.

XI. LOAN OR GRANT APPROVAL

All loans and grants must be approved by the CDBG Loan Review Committee. In order to obtain CDBG financapplicants must meet all property and eligibility guidelines in effect at the time of loan approval. Applicants wiprovided written notification of approval or denial. Reason for denial will be provided to the applicant in writing.

XII. PROGRAM COMPLAINT AND APPEAL PROCEDURE

Complaints concerning the CDBG Program should be made to the Project Manager first. If unresolved in this mannercomplaint or appeal should be made in writing and filed with the City. The City will then schedule a meeting withCDBG Loan Review Committee. Their written response will be made within fifteen (15) working days. If the applis not satisfied with the committee's decision, a request for an appeal may be filed with the City Council. Final apmay be filed in writing with HCD within one year after denial or the filing of the Project Notice of Completion.

XIII. GRIEVANCES BETWEEN PARTICIPANTS AND CONSTRUCTION CONTRACTOR

Contracts signed by a contractor and the Borrower will include the following clause, which provides a procedureresolution of grievances:

Any controversy arising out of or relating to this Contract, or the breach thereof, shall be submitted to binding arbitrain accordance with the provisions of the California Arbitration Law, Code of Civil Procedure 1280 et seq., and the Rof the American Arbitration Association. The arbitrator shall have the final authority to order work performed, to othe payment from one party to another, and to order who shall bear the costs of arbitration. Costs to initiate arbitra


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shall be paid by the party seeking arbitration. Notwithstanding, the party prevailing in any arbitration proceeding shaentitled to recover from the other all attorney's fees and costs of arbitration.

XIV. REPAIR CALLBACKS

In the event that a contractor must be called back to make corrections on rehabilitation work items that are not coverethe one year warranty, the City has the option to cover the costs through the current CDBG construction budget.

XV. CONTRACTING PROCEDURES

All housing rehabilitation work must be carried out using the CDBG adopted housing rehabilitation guideline The City, or its designee, will prepare, advertise the bid package and assist the homeowner in negotiating

contract.

The homeowner will select the contractor. All contractors must be checked and cleared with HUDS federal debarred list of contractors. All contractors must be actively licensed and bonded with the State of California. All contractors must have public liability insurance to the City required limits, Workmens Compensa

Insurance, unemployment and disability insurance.

All contractors must comply with CDBG federal and state regulations. A Notice of Completion must be recorded with the County Recorder.

XVI. SWEAT EQUITY

Participants who wish to perform sweat equity will sign a written commitment itemizing the work they will perfortime schedule for completion and a dollar value of the contribution.

Owners that contribute sweat equity that involves painting will not participate in activities that include the abatemenmitigation of lead paint hazards without first being trained on Safe Work Practices as required by HUD and prodocumentation of such in the project file.

XVII. AMENDMENTS

Amendments to these guidelines may be made by the City and submitted to HCD for approval.

XVIII. EXCEPTIONS

Exceptions to these guidelines will require City Council and HCD approval.


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ATTACHMENT A

MAXIMUM INCOME LIMITS LAKE COUNTY

As of April 2010

FamilySize:

1Person

2Persons

3Persons

4Persons

5Persons

6Persons

7Persons

8Persons

80% ofMedian

$31,550 $36,060 $40,550 $45,050 $48,700 $52,300 $55,900 $59,500


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ATTACHMENT B

24 CFR Part 5 Annual Income Inclusions

1. The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees,tips and bonuses, and other compensation for personal services.

2. The net income from the operation of a business or profession. Expenditures for business expansion oramortization of capital indebtedness shall not be used as deductions in determining net income. An allowance fordepreciation of assets used in a business or profession may be deducted, based on straight-line depreciation, asprovided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a businessor profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assetsinvested in the operation by the family.

3. Interest, dividends, and other net income of any kind from real or personal property. Expenditures foramortization of capital indebtedness shall not be used as deductions in determining net income. An allowance fordepreciation is permitted only as authorized in number 2 (above). Any withdrawal of cash or assets from aninvestment will be included in income, except to the extent the withdrawal is reimbursement of cash or assetsinvested by the family. Where the family has net family assets in excess of $5,000, annual income shall include thegreater of the actual income derived from all net family assets or a percentage of the value of such assets based on

the current passbook savings rate, as determined by HUD.

4. The full amount of periodic amounts received from Social Security, annuities, insurance policies,retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including alump-sum amount or prospective monthly amounts for the delayed start of a periodic amount (except for certainexclusions, listed in Exhibit 3.2, number 14).

5. Payments in lieu of earnings, such as unemployment and disability compensation, workers compensation,and severance pay (except for certain exclusions, as listed in Exhibit 3.2, number 3).

6. Welfare Assistance. Welfare assistance payments made under the Temporary Assistance for NeedyFamilies (TANF) program are included in annual income:

Qualify as assistance under the TANF program definition at 45 CFR 260.31; and

Are otherwise excluded from the calculation of annual income per 24 CFR 5.609(c)

If the welfare assistance payment includes an amount specifically designated for shelter and utilities that issubject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter andutilities, the amount of welfare assistance income to be included as income shall consist of:

The amount of the allowance or grant exclusive of the amount specifically designated for shelteror utilities;plus

The maximum amount that the welfare assistance agency could in fact allow the family for shelterand utilities. If the familys welfare assistance is reduced from the standard of need by applying apercentage, the amount calculated under 24 CFR 5.609 shall be the amount resulting from one

application of the percentage.

7. Periodic and determinable allowances, such as alimony and child support payments, and regularcontributions or gifts received from organizations or from persons not residing in the dwelling.

8. All regular pay, special pay. And allowances of a member of the Armed Forces (except as provided innumber 8 of Income Exclusions).


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ATTACHMENT C

24 CFR Part 5 Annual Income Exclusions

1. Income from employment of children (including foster children) under the age of 18 years.

2. Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated

to the tenant family, who are unable to live alone).

3. Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under

health and accident insurance and workers compensation), capital gains, and settlement for personal or property

losses (except as provided in Exhibit 3.1, number 5 of Income Inclusions).

4. Amounts received by the family that are specifically for, or in reimbursement of, the costs of medical

expenses for any family member.

5. Income of a live-in aide (as defined in 24 CFR 5.403).

6. Certain increases in income of a disabled member of qualified families residing in HOME-assisted housing

or receiving HOME tenant-based rental assistance (24 CFR 5.671(a)).

7. The full amount of student financial assistance paid directly to the student or to the educational institution.

8. The special pay to a family member serving in the Armed Forces who is exposed to hostile fire.

9. (a) Amounts received under training programs funded by HUD.

(b) Amounts received by a person with a disability that are disregarded for a limited time for purposes of

Supplemental Security Income eligibility and benefits because they are set side for use under a Plan to Attain Self-

Sufficiency (PASS).

(c) Amounts received by a participant in other publicly assisted programs that are specifically for, or in

reimbursement of, out-of-pocket expenses incurred (special equipment, clothing, transportation, childcare, etc.) and

which are made solely to allow participation in a specific program.

(d) Amounts received under a resident service stipend. A resident service stipend is a modest amount (not

to exceed $200 per month) received by a resident for performing a service for the PHA or owner, on a part-time

basis, that enhances the quality of life in the development. Such services may include, but are not limited to, firepatrol, hall monitoring, lawn maintenance, resident initiatives coordination, and serving as a member of the PHAs

governing board. No resident may receive more than one such stipend during the same period of time.

(e) Incremental earnings and benefits, resulting to any family member from participation in qualifying state or

local employment training programs (including training not affiliated with a local government) and training of a family

member as resident management staff. Amounts excluded by this provision must be received under employment

training programs with clearly defined goals and objectives, and are excluded only for the period during which the

family member participates in the employment training program.


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10. Temporary, nonrecurring, or sporadic income (including gifts).

11. Reparation payments paid by a foreign government pursuant to claims filed under the laws of that

government by persons who were persecuted during the Nazi era.

12. Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household

or spouse).

13. Adoption assistance payments in excess of $480 per adopted child.

14. Deferred periodic amounts from supplemental security income and social security benefits that are received

in a lump sum amount or in prospective monthly amounts.

15. Amounts received by the family in the form of refunds or rebates under state or local law for property taxes

paid on the dwelling unit.

16. Amounts paid by a state agency to a family with a member who has a developmental disability and is living

at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at

home.

17. Amounts specifically excluded by any other Federal statute from consideration as income for purposes of

determining eligibility or benefits under a category of assistance programs that includes assistance under any

program to which the exclusions set forth in 24 CFR 5.609(c) apply. A notice will be published in the Federal

Register and distributed to housing owners identifying the benefits that qualify for this exclusion. Updates will be

published and distributed when necessary. The following is a list of income sources that qualify for that exclusion:

The value of the allotment provided to an eligible household under the Food Stamp Act of 1977;

Payments to volunteers under the Domestic Volunteer Service Act of 1973 (employment throughAmeriCorps, VISTA, Retired Senior Volunteer Program, Foster Grandparents Program, youthful offenderincarceration alternatives, senior companions);

Payments received under the Alaskan Native Claims Settlement Act;

Income derived from the disposition of funds to the Grand River Band of Ottawa Indians;

Income derived from certain submarginal land of the United States that is held in trust for certain Indiantribes;

Payments or allowances made under the Department of Health and Human Services Low -Income HomeEnergy Assistance Program;

Payments received under the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721);

The first $2,000 of per capita shares received from judgment funds awarded by the Indian ClaimsCommission or the U.S. Claims Court and the interests of individual Indians in trust or restricted lands,including the first $2,000 per year of income received by individual Indians from funds derived from interestheld in such trust or restricted lands;

Amounts of scholarships funded under Title IV of the Higher Education Act of 1965, including awards underthe Federal work-study program or under the Bureau of Indian Affairs student assistance programs;

Payments received from programs funded under Title V of the Older Americans Act of 1985 (Green Thumb,Senior Aides, Older American Community Service Employment Program);


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Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fundestablished pursuant to the settlement in the In Re Agent Orange product liability litigation, M.D.L. No. 381(E.D.N.Y.);

Earned Income tax credit refund payments received on or after January 1, 1991, including advanced earnedincome credit payments;

The value of any child care provided or arranged (or any amount received as payment for such care orreimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of1990;

Payments received under programs funded in whole or in part under the Job Training Partnership Act(employment and training programs for Native Americans and migrant and seasonal farm workers, JobCorps, veterans employment programs, state job training programs and career intern programs,AmeriCorps);

Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nationor the Apache Tribe of Mescalero Reservation;

Allowances, earnings, and payments to AmeriCorps participants under the National and Community ServiceAct of 1990;

Any allowance paid under the provisions of 38 U.S.C. 1805 to a child suffering from spina bifida who is thechild of a Vietnam veteran;

Any amount of crime victim compensation (under the Victims of Crime Act) received through crime victimassistance (or payment or reimbursement of the costs of such assistance) as determined under the Victimsof Crime Act because of the commission of a crime against the applicant under the Victims of Crime Act;and

Allowances, earnings, and payments to individuals participating in programs under the WorkforceInvestment Act of 1998.


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ATTACHMENT D

Asset Inclusions and Exclusions

Inclusions:

1. Cash held in savings accounts, checking accounts, safe deposit boxes, homes, etc. For savingsaccounts, use the current balance. For checking accounts, use the average 6-month balance.Assets held in foreign countries are considered assets.

2. Cash value of revocable trusts available to the applicant.

3. Equity in rental property or other capital investments. Equity is the estimated current marketvalue of the asset less the unpaid balance on all loans secured by the asset and all reasonablecosts (e.g., broker fees) that would be incurred in selling the asset. Under HOME, equity in thefamily's primary residence is not considered in the calculation of assets for owner-occupiedrehabilitation projects.

4. Cash value of stocks, bonds, Treasury bills, certificates of deposit, mutual funds, and money

market accounts.

5. Individual retirement, 401(K), and Keogh accounts (even though withdrawal would result in apenalty).

6. Retirement and pension funds.

7. Cash value of life insurance policies available to the individual before death (e.g., surrendervalue of a whole life or universal life policy).

8. Personal property held as an investment such as gems, jewelry, coin collections, antique cars,etc.

9. Lump sum or one-time receipts, such as inheritances, capital gains, lottery winnings, victim'srestitution, insurance settlements and other amounts not intended as periodic payments.

10.Mortgages or deeds of trust held by an applicant.

Exclusions

1. Necessary personal property, except as noted in number 8 of Inclusions, such as clothing,furniture, cars and vehicles specially equipped for persons with disabilities.

2. Interest in Indian trust lands.

3. Assets not effectively owned by the applicant. That is, when assets are held in an individual'sname, but the assets and any income they earn accrue to the benefit of someone else who isnot a member of the household and that other person is responsible for income taxes incurredon income generated by the asset.

4. Equity in cooperatives in which the family lives.

5. Assets not accessible to and that provide no income for the applicant.

6. Term life insurance policies (i.e., where there is no cash value).

7. Assets that are part of an active business. "Business" does not include rental of properties thatare held as an investment and not a main occupation.


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ATTACHMENT E

CITY OF LAKEPORT

HOUSING REHABILITATION PROGRAM

SINGLE FAMILY TEMPORARY RELOCATION PLAN

The Housing and Community Development Act of 1974, as amended, and the National AffordableHousing Act of 1990, require all grantees of Community Development Block Grant (CDBG) funds orHome Investment Partnership (HOME) funds to follow a written Residential Anti-displacement andRelocation Assistance Plan (Plan) for any activities which could lead to displacement of occupants whoseproperty is receiving funds from these or other federal funding source. Having been developed inresponse to both aforesaid federal legislations, this Plan is intended to inform the public of the complianceof the City of Lakeport with the requirements of federal regulations 24 CFR 570.606 under state recipientrequirements and Section 104(d) of the Housing and Community Development Act of 1974 and 24 CFR92 of the HOME federal regulations. The Plan will outline reasonable steps, which the City will take tominimize displacement and ensure compliance with all applicable federal and state relocationrequirements. The Citys governing body has adopted this plan via a formal resolution.

This Plan will affect rehabilitation activities funded by the U.S. Department of Housing and UrbanDevelopment (HUD) under the following program titles: HOME, CDBG, Urban Development ActionGrant (UDAG), Special Purpose Grants, Section 108 Loan Guarantee Program, and such other grants asHUD may designate as applicable, which take place with in the City limits.

The City of Lakeport will provide permanent relocation benefits to all eligible displaced householdseither owner-occupied or rental-occupied units which are permanently displaced by the housingrehabilitation program (See Section E below.). In addition, the City will replace all eligible occupied andvacant, occupiable low-income group dwelling units demolished or converted to a use other than low-income group housing as a direct result of rehabilitation activities. This applies to all units assisted withfunds provided under the Housing and Community Development Act of 1974, as amended, and asdescribed in the Federal Regulations 24 CFR 570.496(a), Relocation, Displacement and Acquisition:Final Rule dated July 18, 1990 (Section 104(d)) and 49 CFR Part 24, Uniform Relocation Assistance(URA) and Real Property Acquisition Regulations Final Rule and Notice (URA) dated March 2, 1989.

All City programs/projects will be implemented in ways consistent with the Citys commitment to Fair

Housing. Participants will not be discriminated against on the basis of race, color, religion, age, ancestry,national origin, sex, familial status, or handicap. The City will provide equal relocation assistanceavailable 1) to each targeted income group household displaced by the demolition or rehabilitation ofhousing or by the conversion of a targeted income group dwelling to another use as a direct result ofassisted activities; and 2) to each separate class of targeted income group persons temporarily relocated asa direct result of activities funded by HUD programs.

A. Minimizing Permanent Displacement and Temporary Relocation Resulting from HousingRehabilitation or Reconstruction ActivitiesConsistent with the goals and objectives of activities assisted under the Act, the City will take thefollowing steps to minimize the displacement of persons from their homes during housingrehabilitation or reconstruction funded by HUD programs:

1. Provide proper notices with counseling and referral services to all tenants so that they understandtheir relocation rights and receive the proper benefits. When necessary assist permanentlydisplaced persons to find alternate housing in the neighborhood.


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2. Stage rehabilitation of assisted households to allow owner-occupants and/or tenants to remainduring minor rehabilitation.

3. Encourage owner-investors to temporarily relocate tenants to other available safe and sanitaryvacant units on the project site area during the course of rehabilitation or pay expenses on behalf

of replaced tenants.

4. Work with area landlords, real estate brokers, and/or hotel/motel managements to locatevacancies for households facing temporary relocation.

5. When necessary, use public funds, such as CDBG funds, to pay moving costs and providerelocation/displacement payments to households permanently displaced by assisted activities.

B. Lead Based Paint Mitigation Which Causes Temporary Relocation:On September 15, 2000, the Final Rule for Lead Based Paint Hazard Control went into effect.Among other things, it requires that federally-funded rehabilitation must use safe work practices sothat occupants and workers can be protected from lead hazards. At no time should the tenant-

occupant(s) be present in work areas or designated adjacent areas while LHC activities aretaking place in any dwelling unit interior, common area, or exterior. As such, occupants may notbe allowed to remain in their units during the time that lead-based paint hazards are being created ortreated. Once work that causes lead hazards has been completed, and the unit passes clearance, theoccupants can return. The tenant-occupants may not reoccupy a work area or adjacent area untilpost-lead hazard reduction clearance standards have been achieved and verified withlaboratory results.The final rule allows for certain exceptions: programs:1. The work will not disturb lead-based paint, or create dust-lead or soil-lead hazard; or2. The work is on exterior only and openings are sealed to prevent dust from entering the home, the

work area is cleaned after the work is completed, and the residents have alternative lead freeentry; or

3. The interior work will be completed in one period of less than 8-daytime hours and the work siteis contained to prevent the release of dust into other areas of the home; or

4. The interior work will be completed within five (5) calendar days, the work site is contained toprevent the release of dust, the worksite and areas within 10 feet of the worksite are cleaned at theend of each day to remove any visible dust and debris, and the residents have safe access tokitchen and bath and bedrooms.

If temporary relocation benefits are not provided because the City believes that the project meets oneof the above criteria, then proper documentation must be provided in the rehabilitation project file toshow compliance. It is up to the City to ensure that the owner-occupant or tenant in the project does

not get impacted by lead paint mitigation efforts. In most cases where lead paint mitigation is takingplace, occupants (tenants or owners) will be strongly encouraged to relocate even for just a few daysuntil a final lead clearance can be issued by a certified lead based paint assessor. Occupants who aretemporarily relocated because of lead based paint mitigation are entitled to the same relocationbenefits as those who are relocated because of substantial rehabilitation or reconstruction activities.

C. Temporary Relocation of Owner Occupants:Owner-occupants are not allowed to stay in units which are hazardous environments during leadbased paint mitigation. When their home is having lead based paint mitigation work done which willnot make it safe to live in, then they are eligible for temporary relocation benefits up to $500, which


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f. The replacement value of property lost, stolen or damaged in the process of moving (notthrough the fault of the displaced person, his or her agent, or employee) where insurancecovering such loss, theft or damage is not reasonably available;

g. Reasonable and necessary costs of security deposits required to rent the replacement

dwelling;h. Any costs of credit checks required to rent the replacement dwelling;

i. Other moving related expenses as the grantee determines to be reasonable and necessary,except the following ineligible expenses:

1) Interest on a loan to cover moving expenses; or2) Personal injury; or3) Any legal fee or other cost for preparing a claim for a relocation payment or for

representing the claimant before the Grantee; or4) Costs for storage of personal property on real property already owned or leased by

the displaced person before the initiation of negotiations.

E. Rehabilitation Activities Requiring Permanent DisplacementThe City rehabilitation program will not typically trigger permanent displacement and permanentdisplacement activities fall outside of the scope of this plan. If a case of permanent displacement isencountered, then the staff responsible for the rehabilitation program will consult with City legalcounsel to decide if they have the capacity to conduct the permanent displacement activity. If localstaff does not have the capacity, then a professional relocation consultant will be hired to do thecounseling and benefit determination and implementation. If local staff does wish to do thepermanent displacement activity then they will consult and follow the HUD Relocation Handbook1378.

F. Rehabilitation Which Triggers Replacement HousingIf the City rehabilitation program assists a property where one or more units are eliminated then under

Section 104 (d) of the Housing and Community Act of 1974, as amended applies and the City isrequired to replace those lost units. An example of this would be a duplex unit which is convertedinto a single family unit. In all cases where rehabilitation activities will reduce the number of housingunits in the jurisdiction, then the City must document that any lost units are replaced and anyoccupants of reduced units are given permanent relocation benefits. (This does not apply toreconstruction or replacement housing done under a rehabilitation program where the existing unit(s)is demolished and replaced with a structure equal in size without in loss number of units orbedrooms.)

Replacement housing will be provided within three years after the commencement of the demolitionor conversion. Before entering into a contract committing the City to provide funds for an activitythat will directly result in such demolition or conversion, the City will make this activity public

(through a noticed public hearing and/or publication in a newspaper of general circulation) andsubmit to the California Department of Housing and Community Development or the appropriatefederal authority the following information in writing:

1. A description of the proposed assisted activity;

2. The location on a map and the approximate number of dwelling units by size (number ofbedrooms) that will be demolished or converted to a use other than as targeted income groupdwelling units as a direct result of the assisted activity;


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3. A time schedule for the commencement and completion of the demolition or conversion;

4. The location on a map and the approximate number of dwelling units by size (number ofbedrooms) that will be provided as replacement dwelling units;

5. The source of funding and a time schedule for the provision of the replacement dwellingunits;

6. The basis for concluding that each replacement dwelling unit will remain a targeted incomegroup dwelling unit for at least 10 years from the date of initial occupancy; and,

7. Information demonstrating that any proposed replacement of dwelling units with smallerdwelling units (e.g., a two-bedroom unit with two one-bedroom units) is consistent with thehousing needs of targeted income group households in the jurisdiction.

The Grants Coordinator at the City is responsible for tracking the replacement of housing andensuring that it is provided within the required period. The City is responsible for ensuring

requirements are met for notification and provision of relocation assistance, as described inSection 570.606, to any targeted income group displaced by the demolition of any dwelling unitor the conversion of a targeted income group dwelling unit to another use in connection with anassisted activity.

E. Record Keeping and Relocation Disclosures/NotificationsThe City will maintain records of occupants of Federally funded rehabilitated, reconstructed ordemolished property from the start to completion of the project to demonstrate compliance withsection 104(d), URA and applicable program regulations. Each rehabilitation project, which dictatestemporary or permanent or replacement activities, will have a project description and documentationof assistance provided. (See sample forms in HUD Relocation Handbook 1378, Chapter 1, Appendix11, form HUD-40054)

Appropriate advisory services will include reasonable advance written notice of (a) the date andapproximate duration of the temporary relocation; (b) the address of the suitable, decent, safe, andsanitary dwelling to be made available for the temporary period; (c) the terms and conditions underwhich the tenant may lease and occupy a suitable, decent, safe, and sanitary dwelling.

Notices shall be written in plain, understandable primary language of the persons involved. Personswho are unable to read and understand the notice (e.g. illiterate, foreign language, or impaired visionor other disability) will be provided with appropriate translation/communication. Each notice willindicate the name and telephone number of a person who may be contacted for answers to questionsor other needed help. The notices and process below is only for temporary relocation. If permanentrelocation is involved then other sets of notice and noticing process and relocation benefits must be

applied (See HUD relocation handbook 1378 for those forms and procedures) The TemporaryRelocation Advisory Notices to be provided are as follows:

1. General Information Notice: As soon as feasible when an owner-investor is applying for Federalfinancing for rehabilitation, reconstruction, or demolition, the tenant of a housing unit will bemailed or hand delivered a General Information Notice that the project has been proposed andthat the tenant will be able to occupy his or her present house upon completion of rehabilitation.The tenant will be informed that the rent after rehabilitation will not exceed current rent or 30percent of his or her average monthly gross household income. The tenant will be informed thatif he or she is required to move temporarily so that the rehabilitation can be completed, suitable


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housing will be made available and he or she will be reimbursed for all reasonable extraexpenses. The tenant will be cautioned that he or she will not be provided relocation assistance ifhe or she decides to move for personal reasons.

2. Notice of Non Displacement: As soon as feasible when the rehabilitation application has beenapproved, the tenant will be informed that they will not be permanently displaced and that theyare eligible for temporary relocation benefits because of lead based paint mitigation or substantialrehabilitation, or reconstruction of their unit. The tenant will also again be cautioned not to movefor personal reasons during rehabilitation, or risk losing relocation assistance.

3. Disclosure to Occupants of Temporary Relocation Benefits: This form is completed to documentthat the City is following its adopted temporary relocation plan for owner occupants and tenants.

4. Other Relocation/Displacement Notices: The above three notices are required for temporaryrelocation. If the City is attempting to provide permanent displacement benefits then there are anumber of other forms which are required. Staff will consult HUDs Relocation Handbook 1378and ensure that all the proper notices are provided for persons who are permanently displaced as a

result of housing rehabilitation activities funded by CDBG or other federal programs.


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ATTACHMENT F

REHABILITATION GRADES AND STANDARDS

The Citys priority will be to eliminate health and safety issues and to extend the useful life of the

residence. At minimum, all repair work, determined to be necessary by the rehabilitation inspector andincluded in the work write-up, shall meet 2007 California Building Codes, Section 8 Housing QualityStandards, and the following general provisions:

A. General RequirementsThe purpose of each rehabilitation project will be to assure a living unit that provides a healthfulenvironment and complete living facilities arranged and equipped for suitable and desirable livingconditions commensurate with the type and quality of the property under consideration. It will also be toprovide each living unit with the space necessary for suitable living, sleeping, cooking and diningaccommodations, as well as sanitary facilities.

1. Independent facilities shall be provided for each living unit except that common facilities such

as laundry and storage space or heating may be provided for each property.2. Each living unit shall contain provisions for each of the following:a. A continuing supply of safe potable water.b. Sanitary facilities and a safe method of sewage disposal.c. Heating adequate for healthful and comfortable living conditions.d. Domestic hot water.e. Electricity for lighting and for electrical equipment used in the dwelling.f. Must have adequate weather protection.

3. Closet space should be provided with bedrooms or conveniently located nearby;4. Exterior doors shall have keyed locks;5. Attics and under floor areas shall have proper access and insulation as required by local codes;6. Every dwelling unit shall be supplied with a means of disposal or removal of trash andgarbage which is inaccessible to rodents.

B. Access to the BuildingWalkways and steps shall be provided for all-weather access to the building and constructed to providesafety and reasonable durability.C. GradingAny deficiencies in proper grading or paving adjacent to the building shall be corrected to assure surfacedrainage away from foundations and basement walls. Retaining walls shall be maintained in adequaterepair and must be provided where necessary to protect the structure, driveway and walls and to preventsoil erosion.D. Unacceptable FeaturesFeatures which are not ordinarily acceptable in a property and which must be corrected, where feasible,are:

1. Buildings in which adequate attic and/or underfloor space ventilation has not been provided toprevent conditions conducive to dampness, decay, fungi and/or insect infestation and deterioration of thestructure.

2. Buildings constructed on wood mud sills resting directly on the ground.3. Crawl space vents with vent bottom less than 6 inches above the finish grade. Minimum

clearance between bottom of floor joists and grade shall be 12 inches.4. Foundations with top of stem wall less than 6 inches above finished grade.5. Wood, siding, floors and/or door casings or sills in contact with the ground.


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E. Structural SoundnessAll structural components of the dwelling shall be in sound condition and considered serviceable for theexpected useful life of the rehabilitated building. Sagging floors, fireplaces, partitions, stairs, and exteriorwalls shall be restored, if practicable, to an acceptable level or plumb position, and supported or braced soas to prevent the reoccurrence of these conditions. Stair railings shall be rigid. Individual structuralmembers in a seriously deteriorated condition shall be replaced and loose or damaged joints between

structural members shall be corrected.F. Inspections and CorrectionA careful inspection by qualified persons shall be made of buildings and accessory structures on each

property forevidence of actual or potential insect or rodent infestation or access channels. Defects in existing

buildings that permit theentry of rodents, termites, or other vermin will be corrected by appropriate preventive measures.

Damaged or deterioratedstructural members will be replaced. Certain preventive and protective measures against several forms of

infestations are:1. Window or other openings near grade to have snug fitting screens.2. Exterior doors to fit tightly and be flashed or caulked at sill.

3. Opening for pipes or ducts through floors or walls to have tight fitting collars.4. Cracks and crevices in foundations and above-ground walls may be effectively sealed by

pointing with mortar or other approved materials.5. Cracked, broken, or decayed wood surfaces shall be replaced.6. Appropriate chemical treatment of soil adjacent to foundations and within hollow masonry

foundations and treatment of the soil in enclosed spaces.7. The application of precautions or corrective actions recommended by licensed professional

exterminators.G. Exterior and Interior FinishesExterior and interior finishes shall assure that building finishes will be adequate to prevent the entrance orpenetration of moisture and weather; protect from damage by decay, corrosion, insects, and otherdestructive elements; and provide reasonable durability and economy of maintenance.

H. Exterior AppurtenancesAll exterior appurtenances or accessory structures which serve no useful purpose, or those in adeteriorated condition which are not economically repairable, may be removed. Such structures include,but are not limited to, porches, terraces, entrance platforms, garages and carports, walls, fences, andsheds.I. FoundationsAll masonry or concrete foundation walls shall be improved to a safe and sound condition, with the top ofthe wall being not less than 6 inches above finish grade. All wood foundation posts, sills, girders, andplates showing signs of rot, decay, infestation, or structural failure shall be replaced with new suitablematerials of proper design, where practicable.J. Exterior WallsWood siding materials and trim that are broken, split or damaged so as to permit the entrance of weather

or which show signs of decay or insect infestation shall be replaced. Where required, all existing woodsurfaces shall be suitably prepared for painting and shall receive at least one coat of prepared exteriorhouse paint. New wood siding materials shall be protected by appropriate finishes. Composition sidings,including mineral surfaced fibre-board, mineral surfaced asphaltic siding, asbestos cement types, etc.,which show deterioration, damage or joint failure so as to permit the entrance of weather or whichadversely affects the appearance of the dwelling may be repaired, replaced or covered with new suitablesiding materials.K. Interior Walls and Ceilings

1. All loose and broken gypsum board should be renailed or replaced, if possible, and refinished.All loose and broken plaster should be soundly patched and repaired. Where deterioration is so extensive


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that patching is impractical, the entire wall or ceiling area shall be replastered or covered with acceptabledrywall materials.

2. All walls and ceilings shall be properly prepared and painted or received other appropriatefinish.

3. Interior doors, jambs and interior trim which show excessive deterioration, abuse and patchingshall be replaced. Existing and/or new interior millwork shall be properly prepared and receive protective

finish. All broken or missing hardware shall be replaced.L. Kitchen FixturesCountertop and backsplash shall be of approved durable and water-resistant materials. Where required,new sink and fittings properly connected to hot and cold water supply and waste lines shall be installed.M. Finished Floors

1. Bathroom/toilet compartments and kitchen floors shall be provided with approvedunderlayment, approved waterproof floor covering materials, and appropriate basemold.

2. Floors in other areas of the living unit which show excessive wear, shrinkage, cupping or otherserious damage shall be, if possible, be replaced or covered with acceptable finish flooring materialsproperly installed. Sound wood floors showing normal wear and discoloration may be refinished.

3. Finish floors shall be appropriate to the use of the space, be in good condition, and provide alow maintenance service life.

N. Roof and Roof DrainageEach dwelling shall have a controlled method of disposal of water from roofs, where necessary, to preventdamage to the building and property, if possible. All roofs and flashing shall be replaced or repaired tothe extent necessary to protect the building against leakage.O. Gutters, Cornices and Exterior DetailsGutters, downspouts, eaves, rafter ends, fascias, soffits and cornices, moldings, trim, etc., showingevidence of deterioration shall be replaced with new materials suitably protected with paint or stain.Repairs shall be made with any necessary changes of existing design or with appropriate new designwithin reasonable limits to prevent recurrence of the deterioration.P. ChimneysChimneys, brickwork or fireplaces showing signs of deterioration should be repaired or replaced withappropriate materials, if possible.

Q. Windows, Doors, and Other OpeningsExisting windows and doors, including their hardware, shall properly function and give evidence ofcontinuing acceptable service. Defective glass or locking mechanisms shall be replaced or repaired.Windows and doors and their frames that show signs of decay, deterioration, excessive warping,racking or misalignment shall be replaced or repaired and adequately protected with paint andflashings against further deterioration.R. Electrical WiringWhen electrical services must be replaced, 100-amp main service with a minimum of four branch circuitsis required. Additional branch circuits shall be installed, as required, to service cooking ranges, clothesdryer, water heater and other heavy-duty fixed appliances. A minimum of one duplex receptacle and oneoverhead light fixture or two duplex receptacles per bedroom and one for each other habitable room shallbe provided. Permanent light fixtures with wall mount switches are required in kitchen and bath. Outlets

within six (6) feet of kitchen sink and in bathrooms must be GFCI protected.S. PlumbingAll plumbing fixtures shall be appropriately connected to approved drain, waste, vent, and supply lines.All leaking, deteriorated or clogged piping shall be replaced or restored to a condition which will providesafe and adequate service for the plumbing fixtures or gas-fired equipment to which they are connected.T. Heating and VentilationNo unvented fuel-burning heater shall be permitted. All heating devices and appliances shall be of anapproved type. Each living unit shall have properly vented domestic water heating equipment capable ofadequately supplying hot water, as defined in U.P.C., with properly installed safety devices in place.


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U. Porches and StepsAll unsafe or unsound porches and steps will be removed and/or replaced and protected fromdeterioration with paint or other acceptable finish. Where required, approved handrails and guardrailsshall be provided.V. Fences and GatesDilapidated wood fencing which poses a health or safety hazard should be replaced. Wood fences that

lean or have missing pickets, boards, or panels may have missing parts replaced with suitable materials.Sagging gates may be braced and those dragging on the ground may be rehung.W. Yard AreasTrees which are undermining the structural integrity of the dwelling shall be safety pruned or removed.All debris, lumber and trash shall be removed.X. Painting and DecoratingWhere necessary, a protective and decorative finish coating shall provide: (a) adequate resistance toweathering, (b) protection of finished surfaces from moisture or corrosion, (c) an attractive appearance,and (d) reasonable durability. Where painted surfaces are in a well-maintained condition and notdisturbed by the rehabilitation work, painting and decorating is not required.Y. Expansion of Dwelling Bedroom additions may be made to alleviate overcrowding. Householdswhich exceed the maximums listed in the CDBG table below may be eligible. In addition, a bedroom

may be added, even if the number of persons in the household does not exceed two per bedroom, basedon the criteria listed below. For instance, male and female children under 6 years of age may share abedroom, but opposite sex children over six may have their own bedroom, while same sex children mayshare a bedroom at any age.Z. State CDBG Standards for Room and Bathroom Additions:

Unit Size Maximum Persons in Household

SRO 1

0-BR 1

1-BR 2

2-BR 43-BR 6

4-BR 8

5-BR 10

6-BR 12

Opposite sex children less than 6 years of age may share a bedroom.

Opposite sex children 6 years of age and older may have their own bedroom.

Children shall be permitted a separate bedroom from their parents.

Same sex children of any age may share a bedroom.5 or more people-a second bathroom may be added.

10 or more people- a third bathroom may be added.

AA. Energy Conservation MeasuresThe City is committed to using the following criteria to ensure that all projects funded through the HousingRehabilitation Program meet the established minimum level of green building standards:


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Materials and Resources:

Use of plant and tree species that require low water use in sufficient quantities Installation of irrigation systems using only low-flow drip, bubblers, or low-flow sprinklers Use of engineered lumber for beams, headers, wood I-Joists or web trusses for floors and ceilings

Use of Oriented Strand Board (OSB) for floor, wall, and roof sheathing To provide effective air sealing:

o Seal sole plateso Seal exterior penetrations at plumbing, electrical, and other penetrationso Seal top plate penetrations at plumbing, electrical, cable, and other penetrationso Weatherstrip doors and attic access openingso Seal penetrations in interior equipment closets and roomso Seal around bathtub drain penetrations in raised floors

Install and flash windows in compliance with window installation protocols Exterior doors:

o Insulated or solid coreo Flush, paint or stain grade shall be metal clad or have hardwood faceso Factory primed on six sides with a one-year warranty

Select durable non-combustible roofing materials which carry a three-year contractor installationguarantee

o 20-year manufacturers warranty: oro 30-year manufacturers warranty

Energy Efficiency:

Install ENERGY STARCeiling Fans in living areas and all bedrooms; install a whole house fanwithinsulated louvers; or install an economizer

Install ENERGY STARAppliances (where applicable) Install gas storage water heater with an Energy Factor (EF) of 0.62 or greater and a capacity of aleast30 gallons for one- and two-bedroom units and 40 gallons for three-bedroom units or larger

Water Efficiency:

Use water-saving fixtures or flow restrictorso Kitchen and Service Areas < 2 gallons per minute (gpm)o Bathroom Sinks < or = 1.5 gallons per minute (gpm)o Showers and bathtubs < or = 2.5 gallons per minute (gpm)

Indoor Environmental Quality:

Use Low-VOC paint and staino Flat interior wall/ceiling paints & stains < 50gpl VOCso Non-flat wall/ceiling paints & stains < 150gpl VOCs

Provide window coveringo Drapes or blinds may be fire retardant

Floor Coveringo Light and medium traffic areas shall have vinyl or linoleum at least 3/32 in thickness


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o Heavy traffic areas shall have vinyl or linoleum at least 1/8 in thickness o Carpet shall comply with U.S. Department of Housing and Urban Development/FederalHousing Administration UM 44C, or alternatively, cork, bamboo, linoleum, or hardwoodfloors shall be provided in all other floor areas.

Evidence that energy efficiency criteria was met will be evidenced by purchase order information from

contractors,maintaining detailed work write-ups that include all criteria, pictures, inspections, etc.BB. Fire SafetyRehabilitation assistance may be used to meet code requirements for residential fire safety for the type ofdwelling to be rehabilitated.CC. Incipient ViolationsRehabilitation assistance may be used for rehabilitation work necessary to correct incipient, as well asactual violations of Housing Quality Standards. An incipient violation exists if it is thought that thephysical condition of an element in the structure will deteriorate into an actual violation in the near future.

DD. Building Permits and Related FeesRehabilitation assistance may provide funds to cover the cost of building permits and related fees that are

required to carry out the proposed rehabilitation work.EE. Ineligible CostsExcept as otherwise provided for herein, a rehabilitation loan shall not be used for:

New construction, substantial reconstruction, expansion of the structure, or the finishingof unfinished spaces (except in documented overcrowded conditions).

FF. General Property ImprovementsGeneral property improvements will be limited to 20% of the project total. Incipient repair items areeligible. Incipient means that the fixture or system is functional now, but is likely to fail in a few years,i.e. a functioning by 30-year old water heater. Removable household appliances (stoves, dishwashers,refrigerators, wall air conditioners, etc.) are eligible documentation that the item needs to be replacedbecause of incipient failure and that the item being replaced is of moderate quality only will be placed inthe applicants file.

Housing Rehabilitation Program Cash Allowances

Under the Housing Rehabilitation Program, the following items may not exceed the allowances listed(Prices listed below do not include labor):

Ranges/Stoves (drop-in) $750

Cook-tops (built-in) $450

Ovens (built-in) $550

Garbage Disposal $110

Range Hood $175

Carpet per square yard (without pad) $ 18

Sheet vinyl (per square yard) $ 20

Dishwasher $450


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ATTACHMENT GLOAN SERVICING POLICIES AND PROCEDURES

FOR THE CITY OF LAKEPORT

The City of Lakeport, herein after called Lender has adopted these policies and procedures in order topreserve its financial interest in properties, whos Borrowers have been assisted with public funds. The

Lender will, to the greatest extent possible, follow these policies and procedures, but each loan will beevaluated and handled on a case-by-case basis. The Lender has formulated this document to comply withstate and federal regulations regarding the use of these public funds and any property restrictions, whichare associated with them.

The policies and procedures are broken down into the follow areas: 1) making required monthly paymentsor voluntary payments on a loans principle and interest; 2) required payment of property taxes andinsurance; 3) required Request for Notice of Default on all second mortgages; 4) required Rent LimitationAgreement and monitoring of investor properties; 5) loans with annual occupancy restrictions andcertifications 6) required noticing and limitations on any changes in title or use of property; 7) requirednoticing and process for requesting a subordination during a refinance; 8) process of foreclosure in case ofdefault on the loan.

1) Loan Repayments:The Lender will collect monthly payments from those borrowers who are obligated to do so under anyInstallment Note, (which are amortized promissory notes), (or Lender may use a loan collection companyto collect payments). Late fees will be charged for payments received after the assigned monthly date.

For Promissory Notes which have deferred payments, the Lender may accept voluntary payments on theloan. Loan payments will be credited to the interest first and then to principal. The Borrower may repaythe loan balance at any time with no penalty.

2) Payment of Property Taxes and Insurance:As part of keeping the loan from going into default, Borrowers must maintain property insurance

coverage naming the Lender as loss payee in first position or additional insured if the loan is a secondmortgage. If a Borrower fails to maintain the necessary insurance, the Lender may take out forced placeinsurance to cover the property while the Borrower puts a new insurance policy in place. All costs forinstalling the necessary insurance will be added to the loan balance at time of installation of Borrowersnew insurance.

When a property is located in a 100 year flood plain, the Borrower will be required to carry the necessaryflood insurance. A certificate of insurance for flood and for standard property insurance will be requiredat close of escrow. The lender will verify insurance on an annual basis.

Property taxes must be kept current during the term of the loan. If a Borrower fails to maintain paymentof property taxes then the lender may pay the taxes current and add the balance of the tax payment plusany penalties to the balance of the loan. Wherever possible, the Lender encourages Borrowers to haveimpound accounts set up with their first mortgagee wherein they pay their taxes and insurance as part oftheir monthly mortgage payment.

3) Required Request for Notice of Default:When a Borrowers loan is in second position behind an existing first mortgage, it is the Lender's policyto prepare and record a "Request for Notice of Default" for each senior lien in front of Lenders loan.This document requires any senior lien holder listed in the notice to notify the lender of initiation of aforeclosure action. The Lender will then have time to contact the Borrower and assist them in bringingthe first loan current. The Lender can also monitor the foreclosure process and go through the necessary


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analysis to determine if the loan can be made whole or preserved. When the Lender is in a third positionand receives notification of foreclosure from only one senior lien holder, it is in their best interest tocontact any other senior lien holders regarding the status of their loans.

4) Required Rent Limitation Agreement for Investor Properties:All owner-investor properties which receive loans from the Lender will be required to enter into a rent

limitation agreement which restricts the tenants and the rents on the property for a fixed period of time,depending on the public funds used. The rent limitation agreement will be recorded on title of theproperty and non-compliance with this agreement can lead to foreclosure action by the Lender. The rentlimitation agreement will be monitored annually to ensure that low or very low-income householdsoccupy the assisted investor units and that the rents charged to those households is affordable. In somecases the units must be inspected annually to ensure that they are up to minimum health and safetystandards. At the end of the designated affordability period, the Lender will release the Borrower fromthe rent limitation agreement.

5) Annual Occupancy Restrictions and Certifications:On owner-occupied loans, the Lender will require that Borrowers submit utility bills and/or otherdocumentation annually to prove occupancy during the term of the loan. Other loans may have income

and housing cost evaluations, which require a household to document that they are not able to makerepayments, typically every five years. Loan terms will be incorporated into the original note and deed oftrust.

6) Required Noticing and Restrictions on Any Changes of Title or Occupancy:In all cases where there is a change in title or occupancy or use, the Borrower must notify the Lender inwriting of any change. Lender and Borrower will work together to ensure the property is kept incompliance with the original program terms and conditions such that it remains available as an affordablehome for low income families. These types of changes are typical when Borrowers do estate planning(adding a relative to title) or if a Borrower dies and property is transferred to heirs or when the property issold or transferred as part of a business transaction. In some cases the Borrower may move and turn theproperty into a rental unit without notifying the Lender. Changes in title or occupancy must be in keepingwith the objective of benefit to the Targeted Income Group (TIG) families.

Change from owner-occupant to owner-occupant occurs at a sale. When a new owner-occupant is notlow-income, the loan is not assumable and the loan balance is immediately due and payable. If the newowner-occupant qualifies as low-income, the purchaser may either pay the loan in full or assume all loanrepayment obligations of the original owner-occupant, subject to the approval of the Lenders LoanCommittee.

If a transfer of the property occurs through inheritance, the heir (as owner-occupant) may be provided theopportunity to assume the loan at an interest rate based on family size and household income, providedthe heir is in the TIG. If the heir intends to occupy the property and is non-TIG, the balance of the loan isdue and payable. If the heir intends to act as an owner-investor, the balance of the loan may be convertedto an owner/investor interest rate and loan term and a rent limitation agreement is signed and recorded ontitle. All such changes are subject to the review and approval of the Lenders Loan Committee.

Change from owner-occupant to owner-investor occurs when an owner-occupant decides to move out andrent the assisted property, or if the property is sold to an investor. I

060711 lakeport city council - council business

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