HOUSTON-GALVESTON AREA COUNCIL SUBREGIONAL DISASTER RECOVERY HOUSING PROGRAM HURRICANE IKE ROUND 2, PHASE 2 HOUSING GUIDELINES

Transcription

1 HOUSTON-GALVESTON AREA COUNCIL SUBREGIONAL DISASTER RECOVERY HOUSING PROGRAM HURRICANE IKE ROUND 2, PHASE 2 HOUSING GUIDELINES Revised: November 12, 2012 and March 22, 2013

2 TABLE OF CONTENTS INTRODUCTION... 1 PART A GENERAL PROGRAM GUIDELINES... 1 I. Program Objectives... 1 II. Definitions... 2 III. Evaluation of Data... 5 IV. Use of Prior Applications... 5 V. Targeting Communities... 6 VI. Program Requirements... 8 VII. Assistance Types VIII. Size of Unit IX. Housing Assistance Caps X. Affirmative Marketing Plan XI. Affirmative Marketing Plan for Multifamily Rental Program XII. Application Process XIII. Environmental Review XIV. Lead Based Paint XV. Reporting Requirements XVI. Records Retention XVII. Procurement Requirements XVIII. Site and Development Restrictions XVIX. Construction Standards XX. Construction Requirements for Repairs, Rehabilitation and Reconstruction XXI. Homeowner Responsibilities XXII. Building Contractor Responsibilities XXIII. Plans and Specifications XXIV. Rescheck Requirements XXV. Lien Waivers and Affidavits Page i

3 XXVI. Final Inspections XXVII. Manufactured and Modular Housing XXVIII. Accessibility XXIX. Conflict of Interest XXX. Dispute Resolution - Complaints XXXI. Dispute Resolution - Appeals XXXII. Changes, Waivers, and\or Conflicts PART B HOMEOWNER OPPORTUNITY PROGRAM INTRODUCTION I. Counseling made Available II. Programs must be made Available III. Use of External Professionals IV. Documentation of Program V. Acquisition of Property VI. Disposal of Property Appendix A Ike and Dolly Round 2 Housing Guideline Flowchart ATTACHMENT A HURRICANE IKE ROUND 2 SINGLE FAMILY PROGRAM INTRODUCTION I. Program Objectives II. Program Design III. Assisted Homeowner Eligibility Requirements IV. Property Eligibility Requirements V. Types of Assistance Offered VI. Types of Improvements VII. Supplemental Improvements VIII. Forms of Assistance IX. Construction Page ii

4 X. Contractor Selection and Procurement Requirements XI. Construction Agreement XII. Property Inspections and Final Payment XIII. Files and Reports XIV. Changes, Waivers, and\or Conflicts ATTACHMENT B HURRICANE IKE ROUND 2 HOMEBUYER ASSISTANCE PROGRAM INTRODUCTION I. Program Objectives II. Program Purpose III. Target Areas IV. Eligible Beneficiaries V. Amount of Assistance VI. Program Limitation VII. Property Type VIII. Types of Improvements IX. Inspection Standards X. Environmental Review XI. Uniform Relocation Act XII. Use of Funds XIII. Counseling Education Program XIV. Terms of Assistance XV. Loan Terms XVI. Files and Reports XV. Changes, Waivers, and\or Conflicts ATTACHMENT C HURRICANE IKE ROUND 2 RENTAL PROGRAM GUIDELINES INTRODUCTION Page iii

5 I. Program Objectives II. Program Purpose PART A MULTIFAMILY RENTAL PROGRAM I. Types and Amounts of Assistance II. Property Eligibility III. Participant Eligibility Requirements IV. Selection Criteria V. Program Requirements VI. Underwriting VII. Environmental Review VIII. Construction COMPLIANCE REQUIREMENTS IX. Labor Standards X. Relocation XI. Project Completion and Release of Retainage Procedures XII. Project Lease up Procedures XIII. Annual Monitoring Procedures XIV. Files and Reports XV. Changes, Waivers, and\or Conflicts PART B SINGLE FAMILY RENTAL PROGRAM I. Types and Amounts of Assistance II. Property Eligibility III. Participant Eligibility Requirements IV. Selection Criteria V. Program Requirements VI. Underwriting VII. Environmental Review Page iv

6 VIII. Construction IX. Compliance X. Land Use Restriction XI. Forgivable Loan Default XII. Relocation XIII. Landlord Requirements Appendix B Construction Standards, Specifications and GLO Requirements ATTACHMENT D H-GAC Subregional Disaster Recovery Housing Program Guidelines Section 3 Plan, Public Comment Period from August 6, 2012 through August 15, 2012 ATTACHMENT E Public Comment Period from July 8, 2012 through July 26, 2012 ATTACHMENT F - Homeowner Opportunity Program Guidelines, CDBG Disaster Recovery Program, Hurricanes Ike & Dolly, Round 2, 10/1/2012 ATTACHMENT G Duplication of Benefits Guidance, Federal Register 11/16/2011 and Texas General Land Office 01/05/2012 Page v

7 HOUSTON-GALVESTON AREA COUNCIL SUBREGIONAL DISASTER RECOVERY HOUSING PROGRAM HURRICANE IKE ROUND 2, PHASE 2 HOUSING GUIDELINES INTRODUCTION A. The Texas General Land Office (GLO) is administering a Community Development Block Grant (CDBG) Disaster Recovery Program ( Program ) funded by the U.S. Department of Housing and Urban Development (HUD) under Public Law GLO is responsible for the administration of disaster funds allocated to housing activities, and has contracted with the Houston-Galveston Area Council (H-GAC) to administer these funds to carry out eligible housing activities at the local level, within Austin, Brazoria, Chambers, Fort Bend, Matagorda, Montgomery, Walker and Waller Counties and all cities therein. B. The State of Texas developed Housing Guidelines to serve as the basis for Hurricanes Ike and Dolly Round 2 housing programs. The Housing Guidelines consist of General Guidelines developed to provide direction for issues that affect all of the housing programs. These General Guidelines are further divided into Part A: General Program Guidelines, and Part B: Homeowner Opportunity Program (HOP). Activity-specific guidelines for Homeowner Assistance, Homebuyer Assistance and Rental Activities are included in the Housing Guidelines as Attachment A, Attachment B, and Attachment C, respectively. Applicants who qualify for the HOP and elect to participate or decline to participate in the buyout of their original, storm-damaged property will be subject to either the Homebuyer Assistance Guidelines or the Homeowner Assistance Guidelines, depending upon their choice. These Round 2 Housing Guidelines do not replace or supersede the Guidelines developed under Round 1 funding, unless expressly stated. PART A GENERAL PROGRAM GUIDELINES I. PROGRAM OBJECTIVES A. The Houston-Galveston region is still in the recovery process for both its communities and residents, due to the impacts suffered by Hurricane Ike. The primary focus of this Program is to provide relief for those people impacted by Hurricane Ike, while addressing recognized impediments to affirmatively furthering fair housing as required under the Fair Housing Act. Assistance will be provided through a variety of housing activities, including the acquisition, rehabilitation, reconstruction, new construction, demolition, elevation, hazard mitigation, and storm hardening of homeowner and rental housing units. a. The primary objective of the Houston-Galveston Area Council (H-GAC) CDBG Hurricane Ike Disaster Recovery Program is to provide decent, safe, and sanitary housing in the hurricane-impacted areas through the provision of activities designed to mitigate storm damage that occurred as a result of Hurricane Ike. Page 1

8 b. A second objective is to ensure that the housing needs of persons of very low, low and moderate-income households are addressed in no less proportion than their proportion to the relative percentages of the overall populations that suffered housing damage within the communities being served. c. A third objective is to prioritize the provision of decent, safe and sanitary housing for elderly and disabled populations with an emphasis on housing choice and design to reduce maintenance and insurance costs as well as provide for the provision of independent living options. H-GAC will allow up to sixty (60) days for all required documentation to determine eligibility. If all documents are not provided, H-GAC will move forward to the next applicant in line. d. A fourth objective is that each subrecipient shall provide initial targeted outreach exclusively to persons located in FEMA High Risk areas (identified flood areas and storm surge areas), areas where the concentration of poverty is greater than 35% and areas where there are concentrations of racial or ethnic minorities greater than 65%. B. The Houston-Galveston Area Council (H-GAC) and the Texas General Land Office (GLO) have developed an action plan to support Hurricane Ike recovery efforts in Austin, Brazoria, Chambers, Fort Bend, Matagorda, Montgomery, Walker, and Waller Counties. The Disaster Recovery Program will make available $21.68 million in Community Development Block Grant (CDBG) funding which will be used to alleviate the unmet housing needs of homeowners of low to moderate income whose homes sustained damage as a result of the Hurricane; the CDBG funds will also be used for the repair or reconstruction of affordable single family and multi-family rental structures occupied by LMI households. Assistance will be available in form of an Unsecured Forgivable Promissory Note ( Note ). C. Jack Steele, Executive Director of H-GAC, (or his designee) shall be the official designated to administer the CDBG Disaster Recovery Program and to have authority to sign the contract between the GLO and H-GAC. Jack Steele (or his designee) shall have oversight of the program and shall be responsible for ensuring the completion of the contract in accordance with regulations stipulated within the contract, the Housing Guidelines, the GLO guidance, and all state and federal laws. Chuck Wemple, Economic Development Program Manager, has been designated as the Department Director for the CDBG Disaster Recovery Program and shall also be responsible for oversight of the program. Chuck Wemple reports to Jack Steele. II. DEFINITIONS Rehabilitation Repair or restoration of housing units in the hurricane-impacted areas to applicable construction codes and standards. Reconstruction Demolition and re-building of a stick-built or modular housing unit on the same lot in substantially the same footprint and manner. Reconstruction also includes replacing an existing substandard manufactured housing unit (MHU) with a new or standard MHU, or with a stick- built/modular housing unit. The number of units on the lot may not increase and the total square footage of the original, principal residence structure to be reconstructed may not be substantially exceeded; however, the number of rooms in a unit may be increased or decreased based upon household size at the time of application and available funds. New Construction A replacement home constructed on substantially the same footprint on the existing lot (if permitted) or the construction of a new home in a new location. Demolition Clearance and proper disposal of dilapidated buildings and improvements. Page 2

9 Homeowner Opportunity Program A Disaster Recovery Housing Program through which incomequalified applicants who live in FEMA-designated High Risk areas or areas of high minority and/or poverty concentration (as approved by GLO) may elect to rehabilitate or reconstruct their existing home or relocate to a safer and higher opportunity area. This program will involve relocation counseling and the provision of licensed real estate professionals to explain the options and choices available. (See Part B). Homeowner Assistance Activity The utilization of CDBG DR funding to rehabilitate or reconstruct hurricane-damaged homes in order for the applicant to remain in the original home at the original home site. The home to be assisted must have been owner-occupied at the time of the storm. This activity may be utilized by a HOP-eligible applicant who defers relocation and elects to repair and remain in the original home at the original home site. Homebuyer Assistance Activity The utilization of CDBG Disaster Recovery funding for up to 100% of the required down payment, reasonable closing costs, principal write-down assistance, subsidization of interest rates, and private mortgage insurance to facilitate the purchase of a new or existing home. The activity will be utilized in the relocation of a HOP participant or as assistance provided to a hurricane-impacted nonhomeowner. Limitations on HOP funding are detailed in Part B; the cap on homebuyer assistance for hurricane impacted non-homeowners is limited to $40,000. Acquisition The utilization of CDBG funds to acquire real property. Acquisition-only is typically not considered a complete activity in the Program and must be combined with another eligible use (i.e. new construction). Rental Activity Acquisition, rehabilitation, or construction of affordable rental housing resulting in structures where at least 51% of units are occupied by LMI persons. Income and rent restrictions apply to the rental units to be built or assisted with CDBG funds. Single Family Rental Seven or less rental units under common ownership. Units may be on contiguous or scattered lots. Davis Bacon wage requirements apply to construction on CDBG- funded rental housing with eight or more rental units in the same property (not necessarily the same building) which are commonly-owned and operated as one rental, cooperative or condominium project. Scattered site rentals (rental properties not on an undivided lot or on contiguous lots or parcels) may exceed seven units without wage requirements. Multifamily Rental Eight or more rental units in the property. Davis Bacon wage requirements apply to construction on CDBG-funded rental housing with eight or more rental units in a property. Program Design The selection and development of programs and activities based on a Needs Assessment. The Program Design includes a determination of the type of housing activities that will be offered by H-GAC, as well as a plan on how the Program will be marketed, how Fair Housing Objectives will be achieved, and how funding will be prioritized as determined through the Needs Assessment. Low to Moderate Income (LMI) National Objective Activities which benefit households whose total annual gross income does not exceed 80% of Area Median Income (AMI), adjusted for family size. Income eligibility will be determined and verified in accordance with 24 CFR Part 5 requirements using procedures as stated in the Technical Guide for Determining Income and Allowances, 3rd Edition (HUD-1780-CPD). H- GAC will use the most current income limits published by HUD to verify the income eligibility of each household applying for assistance at the time assistance is provided. Income limits vary by county within the H-GAC sub regional program and will be applied based on the location of the damaged home or rental unit(s). The LMI economic subcategories of very low, low and moderate for the CDBG Program correspond to the economic subcategories of extremely low, very low and low as identified in the Conciliation Agreement and are defined as follows: Very low: Household s annual income is up to 30% of the area median family income, as determined by HUD, adjusted for family size Page 3

10 Low: Household s annual income is between 31% and 50% of the area median family income, as determined by HUD, adjusted for family size Moderate: Household s annual income is between 51% and 80% of the area median family income, as determined by HUD, adjusted for family size Slum and Blight National Objective Activities which help to eliminate slums and blighted conditions. Use of this National Objective is limited due to its inability to contribute towards the State of Texas overall requirement for 55% of Ike and Dolly Round 2 funding to benefit low to moderate - income beneficiaries. This National Objective will not be used under the Hurricane Ike and Dolly Round 2 funding. Urgent Need National Objective An urgent need that exists because existing conditions pose serious & immediate threat to health/welfare of community, the existing conditions are recent or recently became urgent (typically within 18 months), and the subrecipient cannot finance the activities on its own because other funding sources are not available. Use of this National Objective is not anticipated to be permitted with Ike and Dolly Round 2 funding. Duplication of Benefits The Robert T. Stafford Disaster Assistance and Emergency Relief Act (Stafford Act) prohibits any person, business concern, or other entity from receiving financial assistance from CDBG Disaster Recovery funding with respect to any part of a loss resulting from a major disaster as to which he has already received financial assistance under any other program or from insurance or any other source. The state will allow for the most permissive current interpretation provided by HUD in determining Duplication of Benefit. Current guidance at the time of development of the H-GAC subregional disaster recovery housing program guidelines is included as Attachment G. Individual Mitigation Measures (IMM) Activities designed to mitigate and/or reduce risk beyond the predisaster condition of a housing unit when the activities are above and beyond federal, state, or local construction or code requirements The State anticipates accessing additional funds for disaster activities under the Disaster Recovery Enhancement Fund (DREF) that must be matched by funding provided for IMM. In accordance with HUD's guidance, repair and rehabilitation of housing units, and the payment of flood insurance are not IMM activities. Examples of IMM activities include elevation above the base flood elevation level, or the addition of storm shutters, hurricane proof windows, roof straps, etc. as long as those improvements are not required to comply with local code requirements and did not exist on the housing unit prior to the storm damage. Subrecipient Cities, Counties, Indian Tribes, local governmental agencies (including COGs), private nonprofits (including faith-based organizations), or a for-profit entity authorized under 24 CFR (o). The definition of subrecipient does not include procured contractors providing supplies, equipment, construction, or services, and may be further restricted by Program Rules or other guidance including applications. Family A household composed of two or more related persons. The term family also includes one or more eligible persons living with another person or persons who are determined to be important to their care or well being, and the surviving member or members of any family described in this definition who were living in a unit assisted under the HOPWA program with the person with AIDS at the time of his or her death. Household A household is defined as all persons occupying the same housing unit, regardless of their relationship to each other. The occupants could consist of a single family, two (2) or more families living together, or any other group of related or unrelated persons who share living arrangements. For housing activities, the test of meeting the low to moderate income objective is based on the LMI of households. Manufactured Housing Unit (MHU) A structure, transportable in one or more sections which, in the traveling mode is eight body-feet or more in width, or forty body-feet or more in length, or when erected on site, is at least 320 square feet, and which is built on a permanent chassis and is designed to be used as a Page 4

11 dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein. Modular Housing A home built in sections in a factory to meet state, local, or regional building codes. Once assembled, the modular unit becomes permanently fixed to one site. FEMA-Designated High Risk Area Areas designated by FEMA as vulnerable to significant wind and/or storm surge damage and areas located in 100-year flood zones. These areas will be identified during the environmental review process for each participating jurisdiction. Area of High Minority Concentration A census block group that consists of 65% or more of minorities. Minorities include all racial and ethnic population groups other than White, non- Hispanic (Anglo). Area of High Poverty Concentration A census block group that consists of 35% or more of the residents living in poverty. A household that meets the US Census Bureau s poverty threshold is considered to be at or below poverty level for the Disaster Recovery Program. III. EVALUATION OF DATA A. In order to develop the Program Design for all activities offered through Ike and Dolly Round 2 funding, H-GAC shall use qualified data, including HUD\FEMA data used to allocate the disaster funding, current FEMA data, data used to support the litigation involving FEMA undercounts in the Lower Rio Grande Valley, and other relevant data as approved) B. Qualified data shall be used to document the impact of the relevant storm on the economic LMI subcategories and to assist the H-GAC in developing the plan for targeting the use of those funds, in the appropriate levels, to the appropriate economic categories. C. The method of data evaluation utilized by the H-GAC (i.e., class distribution categories by income, raw number of homes impacted versus the aggregated dollar amounts impacting communities, etc.) shall be made available to the public for fifteen days on a publicly accessible website. Notice of the posting of the method of review shall be provided to GLO not later than the day the method is posted on a website. D. If any public comment is made, H-GAC shall address the comment in a public response. E. Once the method of interpretation of the data has been vetted publicly and adopted by the H-GAC, H- GAC shall program the use of the funds. The data evaluated shall provide targeted classes that will be used to develop the program and its marketing components. F. Persons with accessibility or other special needs adaptations shall also be analyzed as part of the process. IV. USE OF PRIOR APPLICATIONS A. Prior applications may be considered if they are within the designated targeted areas. As this program is not intended to be a first-come-first-served program, persons who have applied under Round 1 will not have a claim of priority to be included in the Round 2 program. Since an existing list of disaster victims may complement marketing efforts, H-GAC may use its list of Round 1 applicants, ensure targeted areas are addressed as per HOP Guidelines, and waiting lists compiled by eligible cities which have previously administered a recent (past two years) CDBG or similar program, and have successfully and affirmatively marketed the program to residents within the described service area. H- Page 5

12 GAC will administer its entire program based on its lists, and waiting lists will not be the sole source of applicants. a. Prior applications will need to be reviewed to ascertain that they qualify under the new program guidelines. As this program is not a continuation of Round 1 programs, applicants for Round 2 assistance shall be re-qualified. b. All applicants who are on an existing waiting list will be required to submit new application materials, updated income information, proof of ownership and will be screened anew for eligibility under Round 2 of the CDBG Disaster Recovery Fund program. V. TARGETING COMMUNITIES A. In reviewing the most impacted areas/income brackets, H-GAC shall set aside an amount of the funds necessary to provide an equitable distribution between the disaster-related damage suffered by households of the different socio-economic LMI subcategories and the CDBG funds received. H-GAC may allocate an additional amount of funds to households of the lowest income brackets as considered necessary. B. Once targeted areas are identified, H-GAC shall either conduct an analysis of impediments to fair housing or use the Phase 1 Analysis of Impediments (AI) to determine what impediments to fair housing choice exist in those areas. C. Based on the percentages of unmet need remaining for the LMI income subcategory populations as identified by the needs assessment and the specific impediments identified by the Phase 1 AI, recommended actions to overcome the impediments shall be developed into a program plan. D. As called for in Part A of the State s General Program Guidelines, an affirmative marketing plan to conduct outreach to the impacted communities is required in order to apply for the disaster recovery program. The outreach program, as part of the H-GAC Housing Guidelines, will be posted for 15 days for comment on and which are publically accessible websites. Notice that the plan has been made public will be provided to the General Land Office (GLO) the same day the information is added to the website. Public comments made will be addressed prior to utilization of the plan. E. The H-GAC Regional Needs Assessment specifies areas within the program service area with high concentrations of poverty and/or minority populations. Although individuals and households considered low to moderate income are not within a protected class, H-GAC will market heavily in areas with high poverty concentrations towards carrying out the HUD Benefit to Low Moderate Income (LMI) National Objective approved for the Disaster Recovery Single Family Homeowner Program under Round 2. Ensuring that the housing needs of very low, low and moderate-income households are assisted with housing in no less than the proportion to their relative percentages of the overall populations which suffered housing damage within the communities being served is also a State objective for the CDBG Single Family Homeowner Program. F. Table 1 shows that there are 34 areas within cities that have concentrated areas of poverty and minority populations. Of these, there are 26 areas with documented FEMA damage. While H-GAC will market the Housing Program activities throughout the six-county region, those areas displaying the highest concentrations of poverty, minority populations and hurricane damage will be the highest priority areas for the Affirmative Marketing plan activities listed in Section III. The areas which show moderate hurricane damage and high concentrations of poverty and minority populations will be the second highest priority target areas. The areas which show the highest concentrations of hurricane damage and little or no concentration of poverty or minority populations will be the third priority Page 6

13 target area. Finally, those areas with moderate hurricane damage and little or no concentration of poverty or minority populations will be the lowest priority for the marketing program. G. These targeted areas will also be compared with areas within the 100-yr floodplain to estimate the number of applicants living within the 100-yr floodplain that may be eligible for The Homeowner Opportunity Program. Page 7

14 Table 1 - Targeted Cities based on Poverty, Minority and Documented Damage Concentrations County Austin Cities with Poverty Areas Greater Than Or Equal to 35% Bellville, Industry Cities with Areas of Black/ African American Concentration Greater Than Or Equal to 60% Cities with Areas of Hispanic Concentration Greater Than Or Equal to 60% Cities with Two Concentrations Bellville n/a Bellville n/a Cities with all Three Concentrations Cities with High Concentration of Documented FEMA Damage Bellville, San Felipe, Sealy, Wallis Highest Priority Cities and Areas Bellville Brazoria Angleton, Bonney*, Brookside Village, Freeport, Hillcrest Village, Oyster Creek Alvin, Bonney Alvin, Bonney, Brookside Village, Clute, Freeport, Hillcrest Village, Iowa Colony Alvin, Brookside, Freeport, Hillcrest Village Bonney Alvin, Angleton, Freeport, Pearland, Rosharon Alvin, Angleton, Bonney, Freeport, Rosharon Chambers N/A N/A N/A N/A N/A Winnie, Anahuac, Hankamer, Bay Town Winnie, Anahuac, Hankamer, Bay Town Fort Bend Richmond, Rosenberg Arcola, Fresno, Kendleton, Missouri City, Rosenberg, Stafford, Sugarland Fresno, Missouri City, Richmond, Rosenberg, Stafford, Sugarland Missouri City, Richmond, Stafford, Sugar Land Rosenberg Missouri City, Sugar Land, Fresno, Fresno, Missouri City, Rosenberg Sugar Land, Matagorda Bay City, Palacios Bay City Bay Palacios City, Palacios Bay City Bay Sargeant City, Bay City Montgomery Conroe, Shenandoah Conroe, Montgomery, Shenandoah Conroe Conroe, Shenandoah Conroe Conroe, New Caney, Splendora, Magnolia Conroe. Shenandoah Walker Huntsville, Riverside Huntsville, New Waverly Huntsville n/a Huntsville Huntsville, New Waverly Huntsville, New Waverly Waller Hempstead, Prairie View Prairie View n/a Prairie View n/a Brookshire, Hempstead, Waller Hempstead, Prairie View, Summary *Unincorporated 34 Cities with areas of poverty, minority and/or hurricane damage concentrations VI. PROGRAM REQUIREMENTS A. All housing activities must meet the Low to Moderate Income (LMI) National Objective required under the authorizing Statute of the CDBG program B. H-GAC has completed its obligations under the Program as follows: Page 8

15 a. Conduct a Needs Assessment to determine the types of housing programs to offer. Utilize the Needs Assessment as the basis for Program Design and to determine the activities to be offered, the demographics to receive concentrated attention, and the target areas to be served. b. Prior to the completion of the Phase 1 Analysis of Impediments (disaster-area AI), conduct a local review of impediments sufficient to support the required demonstration that any project submitted for priority funding affirmatively furthers fair housing. c. Once the Phase 1 disaster area AI is complete, conduct whatever level of review and evaluation is necessary to apply the findings of the disaster area AI to their jurisdiction and design programs that affirmatively further fair housing in compliance with that AI and analysis. d. Incorporate existing Analysis of Impediments documents into the evaluation of how to use CDBG-DR funds to overcome impediments to fair housing in keeping with HUD s current Fair Housing guidance. e. Determine the proportions of funding that must be set aside to benefit each LMI economic group. Adjust the original FEMA data using data from other eligible sources. Factors applied in adjusting the original FEMA data shall come from local studies, HUD allocation formulas which add a challenge to recover factor to FEMA and SBA data, as well as from the data used to support litigation involving FEMA undercounts, where available. C. Within a period of twenty-four months months from the date of commencement of the Program (which is the effective date of the contract), H-GAC shall identify a sufficient number of eligible Program beneficiaries as to provide reasonable assurance that H-GAC will be able to expend all applicable funds within GLO-established benchmarks. D. All project sites shall undergo a complete environmental review prior to the commitment of any Disaster Recovery funds. The environmental review shall consist of a statutory checklist of required review items. Properties with environmental conditions will not be permitted to proceed with housing activities unless the condition is corrected. No work may commence on a project site until the environmental assessment is complete and the site has been given environmental clearance. E. Acceptable Evidence of Property Damage For a home to qualify for Disaster Recovery assistance, it must be demonstrated that the damage or destruction to the structure was a direct result of Hurricane Ike. Hurricane damage can be documented as follows: i. FEMA, SBA or Insurance award letters. ii. An inspection report (complete with photos of the damage and a written assessment of the damage) from a damage assessment conducted by a qualified inspector approved by H-GAC, which certifies that the damage occurred as a result of hurricane Ike. H-GAC may conduct the inspections and assist homeowners with documentation of damage if necessary. iii. Neighborhood-level media reports or documentation of damage by disaster response/relief organizations on a case-by-case basis to GLO for review and approval. iv. If an applicant was denied assistance by FEMA, assistance through the CDBG Disaster Recovery Program may still be available. H-GAC shall not refuse housing Page 9

16 F. Insurance Requirements assistance to an applicant solely on the basis that the applicant was denied assistance by FEMA. a. GLO requires an initial hazard, windstorm and flood insurance policy (where applicable) as prerequisites to occupancy of an assisted property. The fees for the initial hazard, windstorm and flood insurance premiums are an allowable expense under the Flood Disaster Protection act of H-GAC will utilize CDBG funds to cover the hazard, windstorm and flood insurance premiums for the first year of a disaster recovery home assistance project after which homeowner shall be responsible for maintaining insurance coverage. G. Note Agreement H. Lien a. A signed Unsecured Forgivable Promissory Note will notify homeowners and rental owners that it is their responsibility to maintain insurance coverage indefinitely beyond the first year. The failure to maintain hazard, windstorm insurance coverage for not less than the contract amount MAY prohibit future assistance to the homeowner. Failure to maintain flood insurance by applicants in the flood zone WILL prohibit the homeowner from receiving future disaster recovery assistance. b. The promissory note also requires the homeowner to certify that the assisted property will remain their principal place of residence and that they will occupy the property for at least the three (3) year term of the note agreement. If the property is sold prior to the expiration of the three year note period, a Due on Sale provision of the agreement requires the homeowner to pay the GLO the full balance owed at the time of the sale. Furthermore, a Subrogation provision assigns to the GLO all the borrowers future rights to reimbursement and all payments due under any policy of casualty replacement of the physical structure. c. GLO may refer the issue to the Inspector General s office for collection if GLO or H-GAC become aware that a homeowner has violated the due on sale provision of the Note. d. The promissory note will require rental owners to reserve at least 51% of their rental units as affordable housing to be occupied by LMI household for a period of ten (10) years after receiving assistance. a. H-GAC shall place a lien on every assisted property for the extent of the affordability period. The purpose of this lien is to ensure that property owners who receive CDBG funds perform all their obligations under the Disaster Recovery Program and avoid any inappropriate use or disposition of the assisted property. The lien shall be filed in the applicable County Records and shall be discharged upon the satisfactory completion of the affordability period. VII. ASSISTANCE TYPES All assistance under the Program will be provided in the form of an Unsecured Forgivable Promissory Note to Program Eligible Households which sustained damage as a result of Hurricane Ike. Housing assistance available under the CDBG Disaster Recovery Program are Repair, Rehabilitation, Reconstruction and New Construction. Where activities under this category are integral to the construction of a building or improvement on cleared property which is to be assisted with CDBG Disaster Recovery funds, the clearance activities may be treated as part of the construction costs and will not need to be qualified separately under the program. Page 10

17 A. Rehabilitation a. Rehabilitation as defined by H-GAC is the non-emergency repair or renovation of a limited specified area or portion of a housing structure. Upon completion, the rehabilitated portions of properties must meet the requirements of local building codes and the entire structure must comply with local health and safety codes and housing quality standards (HQS). b. Under the CDBG Disaster Recovery Program, the rehabilitation work performed on eligible participating housing must comply with local building codes standards, ordinances, Texas Windstorm Insurance Association requirements, FEMA and/or county floodplain elevation requirements, local health and safety codes; the entire structure must comply with The U. S. Department of Housing and Urban Development s Housing Quality Standards (HQS) Inspection criteria. The Damage Assessment/HQS Inspection Form will be completed and retained the in the Activity File. Rehabilitation shall be limited to stick-built structures that have been deemed feasible for rehabilitation. c. Maximum note award for rehabilitation is $90,000. This maximum amount does not however include the cost of elevation and ADA modifications. B. Reconstruction a. Reconstruction as defined by H-GAC is the demolition, removal, and disposal of an existing structure and the rebuilding of a structure on the same site, in substantially the same manner. Reconstruction is required when a structure is determined to be beyond economic repair. b. The replacement structure must be built in accordance with the Texas Government Code, local health and safety codes, Texas Minimum Construction Standards, International Residential Code, Texas Windstorm requirements, FEMA floodplain regulations, and REScheck standards for energy efficiency. Additional city requirements may apply. Homes eligible for reconstruction may be replaced with a stick-built structure or an industrialized home - whichever is deemed most economically feasible by the program manager or which conforms to city\county requirements. c. A reconstructed home need not contain the same number of rooms as the unit it replaces. The size of the reconstructed home will be determined by HUD Occupancy Standard Guidelines and the homeowner\renter s family composition. Reconstruction permits replacing an existing substandard unit of manufactured housing with a new manufactured housing unit. The homeowner may request the housing type of their choice (manufactured, modular, or stick built) subject, among other things, to funding limitations: however the final offer of housing type is at H-GAC s discretion. C. Minor Repair a. Minor repair as defined by H-GAC is the limited, necessary repair work completed to alleviate health and safety concerns, such as closure of the thermal environment, stopping water leaks, correcting unsafe plumbing conditions and electrical hazards. Minor repair involves securing a structure from further damage and degradation caused by exposure to the elements. Such repairs are not designed to bring the entire structure into conformance with any standards or codes except health and safety regulations. Example: a leaking roof creates health and safety issues and exposes the structure to further degradation. Replacing the roof will not require that additional insulation to be added or a heater repaired. b. The relevant building codes, standards and specifications will apply to all individual minor repair work, and all repairs should be considered permanent. Page 11

18 D. Elevation a. Elevation shall be defined as the raising of a structure to meet FEMA flood zone requirements for those structures located within the 100-year floodplain. Elevation includes the additional eligible improvement expenses such as the necessary installation of elevators and lifts. No rehabilitation can occur for a structure unless these elevation requirements can be achieved. E. Miscellaneous Requirements City Ordinances\ADA a. Additional requirements that may be imposed on a project location include improvements to driveways, utility system upgrades, ramps, railings, cooking\bathing facility adjustments, etc., as mandated by local ordinances or ADA requirements. F. Eligible Improvements and Expenses a. All property improvements, rehabilitation, and\or reconstruction must be for unmet housing needs resulting from Hurricane Ike damage. Non-Ike damage may only be addressed in conjunction with addressing Ike-related damage. Example: The Jones house received roof damage during Hurricane Ike. The home also has plumbing deficiencies which must be addressed before the house will comply with local health and safety codes. Because the home was damaged by Ike, both the roof and the plumbing repairs may be made using CDBG Disaster Recovery Program funding. However, if the home had no Ike-related damage, the plumbing deficiencies could not be repaired using CDBG Disaster Recovery Program funding. b. Air conditioners, heating systems and water heaters are eligible for replacement under the CDBG Disaster Recovery Program. G. In-eligible Improvements and Expenses a. CDBG Disaster Recovery Program funds may not be used for luxury items. Luxury items include, but are not limited to, swimming pools, fences (other than those required for security), television, satellite dishes, and dishwashers. Also, appliances and housing components that are not integral to the structure of the home such as washers, dryers, dishwashers, detached garages and carports are not eligible. VIII. SIZE OF UNIT Housing assistance available under the CDBG Disaster Recovery Program guidelines provide occupancy policies that allow for two persons per bedroom as reasonable. Exceptions to this standard are based on the following factors: A. No more than two persons are required to occupy a bedroom. B. Persons of different generations (i.e. grandparents, parents, children), persons of the opposite sex (other than spouses/couples), and unrelated adults are not required to share a bedroom. a. An adult is a person 18 years old or older. C. Couples living as spouses (whether or not legally married) must share the same bedroom for issuance size purposes. D. A live-in aide who is not a member of the family is not required to share a bedroom with another member of the household. Note: The need for a full time live-in aide must be documented. A waiver may be approved as outlined in the section on Issuance Size Exceptions. Page 12

19 E. Individual medical problems (e.g. chronic illness) sometimes require separate bedrooms for household members who would otherwise be required to share a bedroom. Documentation supporting the larger sized unit and related subsidy must be provided and verified as valid. A waiver may be approved as outlined in the section on Issuance Size Exceptions. F. In most instances, a bedroom will not be provided for a family member who will be absent most of the time, such as a member who is away in the military. If individual circumstances warrant special consideration, a waiver may be approved as outlined in the section on Issuance Size Exceptions. G. When determining family issuance size, include all children expected to reside in the unit in the next year as members of the household. Examples include, but are not limited to, the following: a. Pregnant women: Children expected to be born to pregnant women are included as members of the household. b. Adoption: Children who are in the process of being adopted are included as members of the household. c. Foster Children: Foster children residing in the unit along with families who are certified for foster care and are awaiting placement of children are included as members of the household. If children are anticipated to occupy the unit within a reasonable period of time, they must be considered when determining the issuance size. d. Joint/Shared Custody Arrangements: In most instances children in joint/shared custody arrangements should occupy the unit at least 50% of the time. However if individual circumstances merit special consideration, a waiver may be approved as outlined in the section on Issuance Size Exceptions. The custody arrangement may be verified by a divorce decree/legal documents or by self certification. e. Custody of Children in Process: Children whose custody is in the process of being obtained by an adult household member may be included as members of the household. Evidence that there is a reasonable likelihood that the child will be awarded to the adult (i.e. within three months) must be provided in order for such child to be included. f. Children Temporarily Absent from Household: H. Preferred Unit Sizes i. Children temporarily absent from the home due to placement in foster care may be included as members of the household. Evidence that there is a reasonable likelihood that the child will return to the household (i.e. within three months) must be provided in order for such child to be included. ii. Children who are away at school, but live with the family during school recesses are included as members of the household. a. 1 Bedroom No CDBG DR built home will have only 1 Bedroom. b. 2 Bedrooms i. Adult/couple ii. Adult/couple plus 1 child iii. Adult/couple plus 2 children of same sex Page 13

20 c. 3 Bedrooms d. 4 Bedrooms i. Adult/couple plus 2 children of opposite sex ii. Adult/couple plus 3 children iii. Adult/couple plus 4 children (2 boys and 2 girls) iv. Adult/couple with medical needs plus 1 child v. Adult/couple with medical needs plus 2 children of same sex i. Adult/couple plus 4 or 5 children (3 of same sex) ii. Adult/couple with medical needs plus 2 children of opposite sex iii. Adult/couple with medical needs plus 3 children e. Issuance Size Exceptions i. Waivers of Issuance size may be granted based on the following: 1. Chronic Illness An individual with an ongoing health problem who requires at least part-time assistance on a regular basis. 2. Pending Child Custody cases Includes, but is not limited to, children in foster care who may be returning home, foster children, pending adoptions, etc. 3. Parental Custody Situations children physically occupy the unit less than 50% of the time as documented by a divorce decree and/or self certification. 4. Waivers for other individual circumstances may be granted with preapproval by GLO. ii. The family must request a waiver in writing and explain the need and provide justification. iii. Waivers must be approved by the H-GAC. Page 14