HOME Investment Partnership Program

Report
HOME
Investment Partnership
Program
Presented by:
-Dale Quisgard, State of Maryland , DHCD HOME Program Manager
-Susan Devlin, Habitat for Humanity Maryland, Executive Director
-Robert Rommel, State of Maryland , DHCD HOME Program Rehabilitation Inspector
1
Martin O'Malley
GOVERNOR
Anthony G. Brown
LT. GOVERNOR
Raymond A. Skinner
SECRETARY
Clarence J. Snuggs
DEPUTY SECRETARY
HOME
The HOME program began in 1990 and has funded over
1 million units of affordable housing since inception
Objectives




Provide decent affordable housing to lower-income
households,
Expand the capacity of nonprofit housing providers,
Strengthen the ability of state and local governments to
provide housing, and
Leverage private-sector participation.
Program Regulations


The HOME Program regulation is at 24 CFR Part 92
Additional guidance, including notices can be found at
http://www.hud.gov/offices/cpd/affordablehousing/library/
2
Eligible Jurisdictions
Maryland offers HOME funds to
applicants throughout the State with
the exception of the following
entitlement jurisdictions which have
their own HOME Program
Anne Arundel County, Baltimore City, Baltimore County, Harford County,
Howard County Montgomery County and Prince George’s County
Exceptions can be made on a case to case basis to fund projects within these jurisdictions.
3
ACCESSING
HOME FUNDS


Each fall funds are awarded under the “HOME Initiatives”
competitive round. Sub-Recipients may apply for funding
through this round to finance programs, projects and activities
that fill a need not met by other DHCD housing programs.
Potential homebuyers seeking assistance , such as closing cost
and/or down payment assistance, will access funds directly
from Sub-Recipients who have been awarded funds through the
HOME Initiative for this activity.
4
ACCESSING HOME
FUNDS (Continued)


Applicants seeking homeowner rehabilitation will have
access to funding directly through a local sub-recipient in
their jurisdiction or, if there are no sub-recipients in their
jurisdiction, directly through DHCD Special Loan Programs.
Applicants seeking funds for housing development may apply
for funding through DHCDs Multi-Family Yearly Funding
Round(s)
5
Eligible HOME Activities
Homebuyer Acquisition Assistance
Owner-Occupied Rehabilitation/Replacement
Housing
Rental Housing
Tenant-Based Rental Assistance (TBRA)
6
Homebuyer Acquisition
Assistance
Eligible Activities:
 Down payment and closing cost assistance
 Interest Rate Buy downs
Owner Requirements:
Frederick County
 Low income – Household Income
(<80% of AMI)
 Must occupy home as primary residence
7
Homebuyer Acquisition Assistance
(Continued)
Eligible Properties:
 1-4 Unit dwelling, condominium, cooperative


Garrett County
or manufactured home
Must meet property standards prior to closing
Purchase price <95% of the area median
purchase price
Affordability Period:
< $ 15,000
$ 15,000 - $ 40,000
>$ 40,000
8
5 years
10 years
15 years
Homebuyer Acquisition
Assistance (Continued)
Application Process:


Cecil County

Homebuyers will apply directly to a SubRecipient, who has been awarded funds from
DHCD Home Initiatives and is administering
a Homebuyer Assistance Program.
Sub-Recipient must obtain environmental
review approval from State prior to
homebuyer entering into any binding
contracts/commitments. When a property has
been identified, the environmental package is
forwarded to DHCD for approval/sign off.
Upon environmental approval Sub-Recipient
may continue to process application.
9
OUR EXPIERENCE WITH
THE STATE HOME
PROGRAM
Susan Devlin
10
Our Mission
Habitat for Humanity Maryland is dedicated to enhancing the
effectiveness of Maryland Habitat affiliates through advocacy,
resource development, training and disaster services. Together
we increase our capacity to transform the lives and communities
of our low-income neighbors using appropriate housing
solutions.
11
Our Purpose
 Fundraise on a large scale for 15 Maryland affiliates
 Advocate for affordable housing at the local, state and federal
level
 Provide training and technical assistance to affiliates
 Assist during times of disaster in areas in need across
Maryland
12
Housing Solutions
 New Construction – Ground up construction
of townhouses, single family houses, and
condos
 Rehabilitation – Rehabilitation of vacant,
distressed properties
 Weatherization/Repair – Painting, accessibility
improvements, roof replacement, foundation
work, mold remediation and increasing energy
efficiency by adding insulation, storm doors, etc.
13
History
 Since 2009, Habitat for Humanity Maryland has received
$225,000 in HOME Funds.
 Funds have been used for
down payment and
closing cost assistance
14
HOME Funds Used by 8 Habitat Affiliates
Habitat Montgomery
Habitat Frederick
Habitat Choptank
Habitat Wicomico
Habitat Patuxent
Habitat Chesapeake
Sandtown Habitat
Washington Habitat
Serving Montgomery County*
Serving Frederick County*
Serving Talbot* and Dorchester*
Counties
Serving Wicomico County*
Serving St. Mary’s* and Calvert
Counties
Serving Anne Arundel, Howard,
Baltimore Counties and Baltimore City*
Serving Baltimore City Neighborhood Sandtown-Winchester*
Serving Washington County
15
Families Served
 59 Habitat families have benefited from
HOME Funds since 2009 and
 An additional 12 families are expected to
benefit by the end of 2012.
16
Application Process - Habitat for Humanity Maryland
 Submits a joint application representing all interested and
eligible affiliates
 Provides guidance and oversight to participating affiliates
 Reviews all required documents prior to submitting to DHCD
 Manages all aspects of grant management for
Affiliates
17
Application Process - Affiliates
 Determine affiliate need
 Provide addresses of projects to be submitted with application
 Provide homeowner education
 Work with title company to have required documents at
closing
 Submit documents to Habitat Maryland for review and
submission
18
Distribution of Funds
 Affiliates submit addresses that will close during the grant
period
 Estimate down payment/closing cost assistance needed
 Habitat Maryland distributes the awarded funds in an
equitable manner
19
Owner-Occupied
Rehabilitation/Replacement Housing
Application Process:
 If the homeowner lives in an area served by a participating Sub

Recipient then they will apply directly to that Sub-Recipient. If the
homeowner is in an area where there is no Sub-Recipient then they
will apply directly to DHCD’s Special Loans Program
DHCD Loan underwriter determines if the applicant and the home
meet the program criteria
The Underwriter then assigns the case to a rehabilitation specialist
who inspects home to determine the amount of work required and the
estimated cost for such work.
20
Owner-Occupied
Rehabilitation/Replacement Housing
(Continued)
Application Process (Continued):
 The loan underwriter continues to process case - continuing to

collect any additional items needed. Once the estimated cost for
work is received the underwriter will determine if funding is
feasible.
As with all HOME/Federally funded programs an environmental
review and approval must be received prior to entering into any
binding agreement (i.e. Construction Contract, Loan
Commitment)
21
Owner-Occupied
Rehabilitation/Replacement Housing
(Continued)
Eligible Properties:





Property must be the owner’s principal residence
1-4 Unit dwelling, condominium, cooperative or
manufactured home.
After rehabilitation value <95% of area median purchase
price for the area, as published by HUD
Loan cannot exceed maximum subsidy requirements
determined by HUD
Units must meet applicable property standards upon
completion of rehab
22
Owner-Occupied
Rehabilitation/Replacement Housing
Eligible Activities/Rehabilitation
Rehab of Existing Home to Code – which may include the following:
Essential Improvements
Energy related improvements
Incipient repairs and general property improvements of a non-
luxury nature
For pre-1978 properties, lead based paint rules @ 24 CFR part 35,
Subpart J apply
All code items must be addressed
23
Owner-Occupied
Rehabilitation/Replacement Housing
(Continued)
Replacement Housing
Replacement of existing home is permitted when existing home is
determined, by the State DHCD Inspector, to be beyond repair or
too costly to repair. (As part of approval process for replacement
homes all senior lien holders must provide written approval of the
demolition of the existing house)
Eligible applicants must have owned and occupied the home as their
primary residence for at least five years prior to applying.
The replacement housing will be of modest design and materials.
24
Owner-Occupied
Rehabilitation/Replacement Housing
(Continued)
Replacement Housing
25
Owner-Occupied
Rehabilitation/Replacement Housing
The
Rehabilitation/Replacement
Housing Inspection
Rob Rommel
26
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
WHY AM I HERE/WHAT AM I LOOKING FOR?
Major code violations
Structure issues
Weatherization issues
Minimum livable codes
Sanitization issues
Health and Safety
Slip trip and falls
27
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
THE INITIAL ASSESSMENT
In order to help with the initial assessment of the home and what
repairs may be needed the homeowner is asked several questions
regarding their home:
How old is your home and how long have you lived there?
Have you done any major renovations?
Age of roof and when were shingles last replaced?
Heating source? How old is it? Is it serviced yearly? Any problems?
Windows and Entrance Doors – Any problems with drafts or opening?
28
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
THE INITIAL ASSESSMENT(continued)
Do you have breakers or fuses?
Are there operable outlets in every room?
Do you have a problem with
breakers or fuses blowing?
Do you have Hot Water? Are all faucets operable ?
LEAD ISSUES – Age of individuals living in home? Is anyone living
in home or are there future occupants within the target age group?
Discuss the items that the homeowner wants. Are these allowable
under the program?
29
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
THE PROGRAM
Explanation of the program is provided which includes the steps that
will be followed, time frames for write up, bids , preconstruction
meetings/contract, appraisal commitment letter, closing to start
Explain that they will need to begin looking for and finding contractors
immediately so that they will have 45 to 60 days to obtain bids.
30
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
Code Violations:
With HOME funds the house must be bought up to code.
Every home build before 2012 has some type of code
violation.
Take into account the date the home was built and is it in
code compliance for that period.
When code violations are found, if it is a hazard to
occupants, it must be replaced or repaired and when
gutting an entire room that entire room must be bought up
to code.
31
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
Code Violations:
Minimum livable codes
Protects the public health, safety and welfare in residential
structures and premises by establishing property
maintenance standards.
Follow the 2012 International Property Maintenance Code
(IPMC) effective September 17, 2012
32
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
THE PHYSICAL INSPECTION
Type and Style of Home:
In order to begin evaluating and correcting deficiencies you will
need to know the type and style of the construction of the home:
Type:
Balloon
Platform
Modular
Manufacture Log
Post and Beam
33
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
Type and Style of Home:
Style - can be one, two or three story:
Colonial
Victorian
Historic
Tudor
Duplex/Multiplex Townhouse/Row
Modular
Cottage or Log Cabin
34
Contemporary
Cape Code
Condominium
Chalet
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
35
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
THE PHYSICAL INSPECTION
Structure:
 Look for structural issues:
Sagging and bulging roof lines,
plum lines of exterior walls, floors that are weak, have holes,
are leaning and or have bulges or are sagging. Damage to
foundation like deteriorated/leaning foundation walls, piers and
girders. Gaps between walls and ceiling and/or floors. Doors
and windows are binding, settlement.
36
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
Structure:
Grounds:
 Divert ground and runoff water away from house
 (a) Inadequate or negative drainage
 (b) Gutter and downspouts to control water.
 (c) Sump pumps, drain tile
 (d) Ideally you want the crawl space floor to be above the outside
ground.
.
37
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
38
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
THE PHYSICAL INSPECTION (continued)
Roofing:
 Type
 Style: Gable, Hip, Mansard, Gambrel or Shed
 Material: asphalt/fiberglass, wood, roll, metal, slate or tile,
 Condition: sagging, bulge, irregular, exposed wood, visible rot
sheathing is weak and/or framing is bouncy
 Life expectancy; (Water infiltration and possible concealed damage
from deteriorated, curling, cracking, torn, missing, eroded, lifting,
not sealing, nail pops, blistering, premature wear, exposed matrix,
wind damage, crooked rows or slots, inadequate pitch and fungus)
39
.
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
Weatherization issues (ENERGY EFFICIENCY)
Siding
 Age condition voids possible concealed damage, fungus issues,
expose wood, water infiltration
Windows and Doors:
 Damage, Lead issues, operational issue, energy efficiency safety
issues,
.
40
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
Insulation:
 Lack of or increase R-value
 Vapor barriers
 Sealants
Sanitization issues
Health and Safety
Lead
Mold
Smoke detector/Carbon Monoxide
Egress
41
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
Slip, trip and falls
 Carpet/vinyl
 Decks/patio/ Stoops
 Railings/barriers at decks, balcony and doors (Slider)
 Stairs/steps
 Sidewalks/ Landings
 Driveway
42
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
Kitchens
 Deteriorated Cabinetry: falling off the wall, frames falling
apart, doors and drawers damaged , heavy wear
 Substandard workmanship
throughout/Incomplete
 Fixtures not operating properly
 Sanitization issues
43
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
Bathrooms
 Sanitization issues
 Heavy wear
 Water Damage, leaks
 Weak floors
 Drain and water supply
 Slip/trip hazards
 Fixture not operating properly
 Mold /Mildew
44
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
Electrical
 Evaluate the system
 Correct deficiencies/replace hazards
 Upgrade if necessary
HVAC
 Evaluate the system
 Determine age and remaining life expectancy of system
 Look for hazard/leaks
45
Owner-Occupied
Rehabilitation/Replacement Housing
Site Inspections
Decks/Porches/Attic/Garage/Carports
 Safety issues
 Slip /trips/falls
 Proper operations of doors
 Structural issues
 Weatherization issues
46
Rental Housing
Eligible Activities:
 Sponsor Rental Projects 1-4 Units


47
(through our Single Family Special
Loan Program)
Multi-Family Projects
Acquisition, new construction or
rehabilitation of affordable rental
housing
Multi-Family Project St. Mary’s County
Rental Housing
(Continued)
Owner Requirements:
Main Street Housing
Annapolis Maryland
The developers or owners of the rental
housing may be small scale property
owners, for-profit developers, nonprofit
housing providers, CHDOs or the local
government, redevelopment
organizations or public housing
authorities.
48
Rental Housing
(Continued)
Eligible Properties:




HOME rental projects may be one or more buildings on a
single site, or multiple sites that are under common
ownership, management and financing.
The project includes all activities associated with the site
or building.
Transitional as well as permanent housing, including
group homes and SROs, are allowed.
There are no preferences for project or unit size or style.
49
Rental Housing
(Continued)
Property Standards:



Units must meet applicable property standards at
occupancy or upon completion of rehab
Units must be maintained to property standards for
affordability period
HOME property standards apply to the common areas
and the building’s exterior, not only the HOME units.
50
Rental Housing
(Continued)
Rent/Occupancy Requirements:
 Incomes must be below 80% of AMI
 90% of initial occupants must be below 60% of AMI
 Minimum 20% of units in projects with 5 or more
units must be at 50% or below of AMI.
 If combined with Tax Credits rents must conform to
both HOME and Tax Credit Limits
51
Rental Housing
(Continued)
Affordability Period:
 HOME-assisted rental units carry rent and occupancy
restrictions for varying lengths of time, depending upon the
average amount of HOME funds invested per unit
ACTIVITY
AVERAGE PERUNIT HOME $
MINIMUM AFFORDABILITY PERIOD
Rehabilitation or
Acquisition of Existing
Housing
<$15,000/unit
$15,000-$40,000/unit
>$40,000
5 years
10 years
15 years
Refinance of
Rehabilitation Project
Any $ amount
15 years
New Construction or
Acquisition of New
Housing
Any $ amount
20 years
52
Rental Housing
(Continued)
Long Term Compliance
 In order to verify compliance with property standards and
the information submitted by owners on tenants’ incomes,
rents and other HOME rental requirements during a
project’s period of affordability, HOME rules require onsite inspections of HOME properties as follows:
# of Units
Inspection Required
1-4
every 3 years
5-25
every two years
26 or more
annually
Not all units must be inspected in a large project, only a
“sufficient” sample.
53
Rental Housing
(Continued)
Long Term Compliance (continued):
 Tenant income must be recertified annually during

affordability period
Rents must be reviewed annually for all HOME assisted
units
54
Tenant-Based Rental Assistance
(TBRA)
Tenant Based Rental Assistance (TBRA) is assistance that
fills the gap between the amount a family can afford to pay
for housing cost (rent and utilities) and the actual costs of
housing selected by the family
Application:
Sub-recipients may apply for funds to support TBRA
programs through the DHCD HOME Initiatives Round.
Additional information on TBRA can be found at the HOME Website
http://www.hud.gov/offices/cpd/affordablehousing/programs/home/topical/tenant.cfm
55
Community Housing Development
Organizations
CHDOs
A Community Housing Development Organization
(CHDO) is a private nonprofit, community-based
service organization that has obtained or intends to
obtain staff with the capacity to develop affordable
housing for the community it serves.
56
Community Housing Development
Organizations
CHDOs
CHDO Benefits


15 percent of the States HOME allocations must be set
aside for housing activities in which qualified CHDOs
are the owners, developers and/or sponsors of the
housing. Included within that amount, up to 10 percent
of the 15% may be used for predevelopment costs for
CHDOs.
Operating funds are available annually for active
CHDOs.
57
Environmental Reviews
Environmental Review
Level of review depends upon the activity
 For rehabilitation and new construction (4 or fewer units);
categorically excluded subject to 58.5. All rehabilitation
loans will require a Statutory Checklist completed in order
to determine if project may become exempt.
New Construction (more than 5 units) subject to
environmental assessment.
58
Prohibited
HOME funds may not be used to



Pay delinquent taxes, fees or charges on properties to be
assisted with HOME funds.
Provide non-federal matching contributions required under
any other Federal program;
Life estates and land contracts/ contracts for deeds are not
approved by HUD as eligible forms of ownership.
59
Prohibited
(Continued)
 Provide assistance to a project previously assisted with
HOME funds during the period of affordability established
by the participating jurisdiction.
However, additional HOME funds may be committed to a
project up to one year after project completion, but the
amount of HOME funds in the project may not exceed the
maximum per-unit subsidy amount allowed.
7
60
FY 2012 HUD Appropriations Law
Four-Year Project Completion Deadline



Project must be completed and ready for occupancy
within 4 years of the date the written agreement is
executed.
If not completed, these projects will be considered
‘involuntarily terminated before completion’ and the
HOME investment must be repaid
“Completion” means that all necessary construction
work has been completed and a certificate of occupancy
has been issued
61
FY 2012 HUD Appropriations Law
(Continued)
Deadline for Sale of Homebuyer Units
 PJs must convert all homebuyer units that have not been
sold to a homebuyer within 6 months of construction
completion to HOME rental units, or repay the HOME
investment
 HUD has no exception authority
62
FY 2012 HUD Appropriations Law
(Continued)
Project Certification:
Before executing a legally binding written agreement,
a PJ must :
a) conduct an underwriting review;
b) assess developer’s capacity and fiscal
soundness;
c) examine neighborhood market conditions to
ensure adequate need for project.–assessment of
project underwriting, developer capacity, and
market need
63
FY 2012 HUD Appropriations Law
(Continued)
CHDO Development Capacity:
A PJ may not reserve FY 2012 funds to a CHDO
unless it has determined that the CHDO has staff
with demonstrated development experience.
–Experience developing projects of same size,
scope, and complexity
–HUD defines CHDO staff as paid employees
responsible for day-to-day operations (volunteers,
board members, and consultants are not staff)
64
Contact List

HOME Program Manager
 HOME Program Processor
HOME Rehabilitation
Dale Quisgard
Catherine Spencer 410-514-7492
[email protected]
Robert Rommel
410-514-7458
[email protected]
David Klingler
410-514-7605
[email protected]
Inspector
Assistant Director, CDA
410-514-7456
[email protected]
Special Loan Program
65
Web Sites
 Maryland State Web Site:
http://www.mdhousing.org/Website/Programs/hipp/Default.aspx
 HUD/HOME Web Site:
http://www.hud.gov/offices/cpd/affordablehousing/programs/home
 HOME Environmental Site:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/environment
66

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