County of Santa Clara. Owner-Occupied Residential Rehabilitation Program PROGRAM GUIDELINES

Transcription

1 County of Santa Clara Department of Planning and Development Office of Affordable Housing 2310 North First Street, Suite 100 San Jose, California (408) (408) fax County of Santa Clara Owner-Occupied Residential Rehabilitation Program PROGRAM GUIDELINES Program Purpose To provide financial assistance to homeowners who lack sufficient resources to make needed repairs to bring the property up to decent, safe, and sanitary, health, and safety code as defined in the Health and Safety Code Section and Section The County of Santa Clara Housing Rehabilitation Program is a Rehabilitation Program and not a remodeling Program. The Program is primarily intended to repair homes that are in poor or dilapidated condition, have numerous code deficiencies, and do not meet current building and or Housing Quality Standards (HQS) established by the U.S. Department of Housing and Urban Development (HUD) because of deferred maintenance, age, natural or accidental causes. The Program is not intended to remodel homes but to conserve and preserve the existing housing stock in the Urban County. These Guidelines are designed to encourage County residents and property owners to improve their properties by accessing below market interest rate loans for home improvement projects. Applications for the County s Housing Rehabilitation Loan Program can be obtained by calling the County Santa Clara at (408) , picked up at the Office of Affordable Housing, 2130 North First Street, Suite100, San Jose, CA 95131, or downloaded from There are several funding sources used by the County of Santa Clara in the Housing Rehabilitation Program including the Community Development Block Grant (CDBG), and CalHome programs. Due to variances in requirements for these funding sources, an exhibit for each specific funding source and its key program points has been included as Exhibit A. After receiving a completed application, County Housing staff will determine the program for which the applicant will be best qualified. Santa Clara County Page 1 of 15 Housing Rehabilitation Program Program Guidelines January 2011 Revised

2 Applicant Eligibility A. Conflict of Interest No County of Santa Clara official, employee, or agent who exercises policy, decisionmaking functions, or responsibilities in connection with the planning and implementation of the program shall directly or indirectly be eligible for this program, unless the application for assistance has been reviewed and approved according to applicable California Department of Housing and Community Development (HCD) guidelines and by the County Housing Loan Committee. A building contractor with a vested interest in the property may not bid on a rehabilitation job. B. Residency Requirement The property owner must use the dwelling as his or her principle residence and must be recorded on the Deed of Trust. If there is more than one person listed on the Deed of Trust all parties must be occupying the residence and agree to sign the Housing Rehabilitation Loan Documents. The property owner will be required to submit the following documents to the County at the time of application, and if approved for a loan, annually for the term of the loan: 1. Proof of occupancy in the form of a copy of a current utility bill. 2. Statement that the property is currently used as his or her primary residence. 3. Declaration that other titleholders do not reside on the premises. In the event the owner occupant sells, transfers title, or discontinues residency in the rehabilitated property for any reason, the loan is due and payable with the exception of: 1. Upon the death of the borrower the Housing Rehabilitation loan may be transferred to the heirs if the heirs are income eligible and will occupy the property as their primary residence. Any transfer may only occur with the approval of the County. 2. If the borrower dies and their heir is not income eligible, the loan is due and payable. C. Income To be eligible to participate in the Housing Rehabilitation Program, total household income may not exceed 80 percent (80%) of the median income for Santa Clara County, which is adjusted for family size and reported in the most current income guidelines published by the State Department of Housing and Community Development (HCD). Exhibit B lists the current income limits for Santa Clara County by family size and is updated annually as the information becomes available from HCD. The applicant s income combined with the income of all household members, related or non-related, age 18 or older cannot exceed the allowable income limits. Annual income Page 2 of 15

3 will be base on the 12-month period prior to the loan application date. Children who do not live at the property, do not deduct the property on their income taxes, and can document a different place of residence, can have their income excluded. D. Assets If the applicant s current assets total in excess of $25,000 that applicant is determined to have substantial resources and does not qualify for the Housing Rehabilitation Program loan. Assets include funds in checking and savings accounts. Interest or dividends earned from IRAs, CDs, stocks, bonds, mutual funds, or pension accounts. Assets also include the value of real estate (other than primary residence) and any other assets that can be easily liquidated without a penalty. Assets do not include pre-tax payroll deductions, deferred compensation accounts, 401Ks, health or dependent care allowances, two vehicles, the subject property, and furnishings and fixtures. E. Debt-to-Income Ratio The maximum debt-to-income ratio for the Housing Rehabilitation Program is 40% frontend and 45% back-end expressed as a ratio of 40/45 percent. The debt-to-income ratio (DTI) is the percentage of a consumer's monthly gross income that goes toward paying debts. The debt-to-income ratio often covers more than just debts. The ratios can include certain taxes, fees, and insurance premiums as well. There are two main kinds of DTIs. The first DTI, known as the front-end ratio, indicates the percentage of income that goes toward housing costs, which for homeowners is PITI (principal, interest, taxes and mortgage insurance). The maximum front-end-ratio for the Housing Rehabilitation Program is 40 percent. The second DTI, known as the back-end ratio, indicates the percentage of income that goes toward paying all recurring debt payments: including credit card payments; car loan payments; student loan payments; child support payments; alimony payments; and legal judgments. The maximum back-end-ratio for the Housing Rehabilitation Program is 45 percent. Example of a Debt-to-Income Ratio Calculation: Yearly Gross Income = $45,000 / Divided by 12 months = $3,750 per month income. $3,750 x.40% = $1,500 allowed for housing expense. (front end) $3,750 x.45% = $1,687 allowed for housing expense plus recurring debt. (back end) Page 3 of 15

4 In this example no more than $1,500 in monthly income may be used for housing payments and no more than $1,687 may be used for housing payments plus recurring monthly debt payments. D. Fair Housing The Program will be implemented in ways consistent with the County s commitment to fair housing. No person shall be excluded from participation in, denied the benefit of, or be subjected to discrimination under any program or activity funded in whole or in part with Community Development Block Grant (CDBG) funds. The Fair Housing Act prohibits discrimination in housing because of race or color, national origin, religion, gender, disability, familial status (including under the age of 18 living with parents or legal custodians, pregnant woman, and people securing custody of children under 18). E. Temporary Relocation CalHOME Loan: In the event, for any reason, the owner is displaced as a result of the owner s voluntary participation in the Program, any costs of relocation may be considered an eligible cost if initially made part of the CalHOME loan. CDBG Loan: In the event, for any reason, the owner is displaced as a result of the owner s voluntary participation in the Program, any costs of relocation will be the sole responsibility of the owner, and the County shall not be liable for any person being displaced as a result of voluntary participation in the Program. F. Preferences The County will establish a waiting list and will provide assistance on a first-come, firstserved basis. Properties that have been determined to be uninhabitable by the County Building Department, Code Enforcement, or Program Inspector may be given preference to correct a hazardous condition that impacts the neighborhood or the community. G. Owning other Properties The applicant may not own any rental properties or receive income from any rental properties. H. Race and Ethnicity Applicants will be requested to identify race and ethnicity at the time of application. Property Eligibility A. Type of Housing and Location To be eligible to participate in the Housing Rehabilitation Program, the property must be a single-family residence located within the Unincorporated Areas of the County (for a CalHome loan), the Unincorporated Areas of the County, the City of Saratoga, or the Town of Los Gatos for CDBG funded loans. Page 4 of 15

5 B. Conformity with Current Design and Land Use Standards To be eligible to participate in the Housing Rehabilitation Program, the property must be able to conform to current land use and density designations on the County s General Plan and to the applicable density, design standards specified in the Zoning Ordinance and the Building Code. Properties that do not conform to these standards at the time of application may be eligible if the County determines that the existing improvements were authorized by the County and building permits are issued for the improvements. If there are no records, the property must comply with current standards. If there are violations under the Enforcement Ordinance, the property owner must agree to correct any violations, demolish illegal structures, and cease any illegal activities prior to beginning the rehabilitation work. C. Rehabilitation Standards All repair work must meet Uniform Building Code standards. Additionally, all repair work must comply with any special design or construction standards established by the County or City to preserve historic buildings. Furthermore, rehabilitation work should incorporate energy efficiency/green building, and must eliminate health and safety hazards to occupants and the public. The property owner must agree to make improvements, to discourage the conduct of illegal activities. D. Title Applicants for Housing Rehabilitation Program must hold title to and occupy the property, as his or her primary residence, for which the loan is being made. All persons on the title must agree to sign a Deed of Trust, Promissory Note, and the Owner Participation Contract to secure the Housing Rehabilitation loan. Title may be held in any of the following ways: 1. Fee simple interest 2. Joint Tenancy 3. Tenancy in Common 4. Community Property 5. Interest of a shareholder in a cooperative agreement 6. Life Estates of Living Trusts Title may not be held in the following ways: 1. Any interest acquired on the execution of a purchase contract 2. A lease with or without an option to purchase; or 3. A remainder interest. E. Life Estates of Living Trusts Applicants who hold a Life Estate on a property or property with title held by a Trust are eligible to participate in the Housing Rehabilitation Program provided the following criteria are met: Page 5 of 15

6 1. The beneficiary of the Life Estate or Trust must occupy the property; 2. The beneficiary s household income must meet the income criteria for the Housing Rehabilitation Program; 3. Loan documents must be signed by the Trustee of the Trust and person(s) who hold the remainder interest in a Life Estate; 4. The beneficiary must agree to the condition that the rehabilitation loan is due and payable when any of the following occur: a. The property is sold or title is transferred to another person or entity; and/or b. The beneficiary s Life Estate terminates or is rescinded; and/or c. The County determines that the beneficiary is not complying with the terms of the Owner Participation Contract or the Promissory Note. F. Property Improvements 1. Eligible Costs and Allowable Improvements The goal of the Housing Rehabilitation Program is to remove deficiencies or health and safety hazards, improve energy efficiency, remediate lead based paint, and extend the useful life of the property. All improvements must be attached to the property and permanent in nature. Examples of eligible items are foundation construction and repair; electrical rewiring or repair; plumbing repair; roof replacement or repair; heating system installation or repair; window and door replacement; repair of structurally significant damaged wood; and floor coverings where they pose a hazard. Appliances such as refrigerators, stoves and dishwashers that are not built in may only be replaced only with Energy Star appliances under HUDs Energy Star program and must be of moderate quality. A list of eligible costs are attached as Exhibit C. 2. Ineligible Costs and Prohibited Use of Funds Luxury items are not permitted. Examples of luxury items are: swimming pools; patios and patio covers (restricted to CalHome loans only); room additions that are for leisure; landscaping upgrades (restricted to CalHome loans only); hot-tubs; custom cabinets; and high-end appliances. General property improvements may be eligible under some funding sources (not the CalHome Loan) up to 20% of the loan. General improvements include landscaping or items to improve the appearance of the property that are not health and safety items. G. Lead-Based Paint Program participants rehabilitating homes constructed prior to January 1, 1978, must be provided with the proper disclosure notification concerning lead-based paint (LBP) hazards. Whenever pre-1978 houses are rehabilitated under CDBG, a lead-based paint test must be given and a report generated. The costs associated with meeting these requirements are eligible to be paid for with CDBG funds, and should be considered during program design. Page 6 of 15

7 Application Procedure The County may elect to select an administrative subcontractor to conduct all or part of the County s responsibilities below. A. Application An application packet can be mailed or picked up at the Office of Affordable Housing, located at 2310 North. First Street, Suite 100, San Jose, Ca A complete application consists of: 1. Application and checklist requirements; 2. Verification of income from all sources for all household members aged 18 or older; 3. Tax returns and all attachments; 4. Title report; 5. Hazard (Homeowner s) insurance for property; and 6. Lead-Based Paint notification. B. Process 1. Application An application must be completed by all persons who hold title to the property. This includes listing all household members, their income and asset information. Household bills should include mortgages, utility payments, and revolving debts. A credit report and Preliminary Title report will be run at this time. The credit report will be used to determine outstanding debt and ability to repay a loan. The title report is used to determine the status of any loans, mortgages, and liens which may be levied against the property. An appraisal may be ordered if necessary. 2. Preliminary Approval County staff will evaluate the application and all supporting documentation to determine if the applicant meets the preliminary requirements for the Housing Rehabilitation Program. Preliminary eligibility will be based upon income, credit, the amount of outstanding liens on the property, and other criteria established by the County and funding source. 3. Work Write-Up If the applicant passes the preliminary approval stage a thorough property inspection, conducted by the County Rehabilitation Specialist, will be scheduled to determine which items are eligible under the Housing Rehabilitation Program. Eligible repairs will include removing deficiencies or health and safety items, lead based paint remediation, energy efficiency improvements, and repairs that will extend the useful Page 7 of 15

8 life of the property. All items will be listed on the scope-of-work including a cost estimate as determined by the Rehabilitation Specialist. The Rehabilitation Specialist bases the estimates on current industry prices of material and wages for the type of work being completed. 4. County Housing Loan Committee The County Housing Loan Committee (the Committee) was formed by the County Board of Supervisors. The County Executive is authorized by the Board of Supervisors to appoint Committee members. The application package including the completed application, credit and title reports, work write-up, appraisal, and analysis of outstanding loans and debt ratios, will be presented to the Committee. The Committee will make the final determination of the application. The applicant will be notified by County staff of the Committee s decision. 5. Construction Bids Based upon the final scope-of-work the homeowner will solicit at least three (3) bids from a list of County approved and qualified licensed general contractors. The homeowner may also solicit bids for their project from licensed contractors not on the County contractor list. 6. Bid Opening and Review Once the bids have been received by the homeowner, the Rehabilitation Specialist and homeowner will review the bids for reasonableness, competitiveness, and completeness. Upon reviewing the bids, the homeowner will compare the bids to the cost estimate. If the lowest bid exceeds 115% of the cost estimate, the County will reexamine the scope-of-work and may require new bids be submitted. Any bid received that is 15% above or below the Rehabilitation Specialist cost estimate will be automatically disqualified if other bids are within 15% higher or lower of the cost estimate. The homeowner will then choose a contractor and will enter into a contractual agreement with the contractor based upon their bid and the scope-of-work. C. Underwriting Considerations Grounds for denial of a loan request include, but are not limited to, the following items: 1. The County may deny a loan request if the applicant has any unexplained or unresolved delinquencies for any payments or amounts owed in the twelve months prior to applying for assistance. The County will consider all delinquencies in the evaluation, including delinquent payments to public or private utility service providers. 2. The County may deny a loan request if the loan-to-value (LTV) ratio will exceed eighty percent (80%). The loan to value ratio is based on either an appraisal or on Page 8 of 15

9 Financing comparables taking into consideration the rehabilitated value of the subject property and any other debt already secured by the property. The county also includes the rehabilitation loan amount when determining the LTV ratio. The after rehab LTV cannot exceed 100% of the County average area purchase price. 3. The after rehabilitation value may not exceed 100% the HUD established purchase price/value limits for Santa Clara County as published each year by HUD. In 2010, the current purchase price value limit is $729, The County may deny a loan request if the applicant has any bankruptcies in the past seven years or has filed bankruptcy prior to loan funding and recordation of the deed of trust. 5. The County may deny a loan request if the applicant has provided false or erroneous information, or failed to complete the application process, or if there are any unresolved clouds to the property s title at the time of applying for a loan from the County. Examples of clouds to title include, but are not limited to, persons named on title who have not signed the loan application, persons named on title that are deceased, judgments against the property for nonpayment of taxes of any kind, and mechanics liens filed against the property. A. Loan Limits The County has established a loan limit of one hundred thousand dollars ($100,000) for repairing an owner-occupied dwelling using CDBG funds. Loans approved with CalHome funds have a maximum $57,000 loan limit but may be combined with CDBG funds for a maximum loan amount of $100,000 per project. The County Housing loan Committee does have discretion to approve funds over the $100,000 limit if needed. The homeowner must agree to repair all items listed in the scope-of-work in accordance with applicable building codes. Total indebtedness against the property cannot exceed up to eighty percent (80%) loan to value (LTV), of the appraised value of the property and one hundred percent (100%) LTV including the after rehabilitation value of the property. The security for the loan is a Deed of Trust recorded against the property. These loans may be subordinate to a first or occasionally to a second loan. B. Types and Terms of Financing The County offers two types of loans for owner occupied residential properties, Amortized and Deferred. The interest rate is 3% simple interest for both loan types. The type of loan offered to an applicant is dependent upon the total amount of the applicant s fixed household expenses and the requirements of the funding source used for the loan. These expenses include any current mortgage payments, property taxes, hazard insurance, and utility expenses. If these expenses exceed thirty percent (30%) of the applicant s total income, then the qualified applicant will be eligible for a deferred loan. Page 9 of 15

10 1. Amortized Loan An amortized loan is a loan that requires monthly payments and those payments are divided out equally over the life of the loan. The amortized loan is three percent (3%) interest. The maximum loan term is between twenty and thirty (20-30) years depending on the funding source. If the borrower s housing costs mentioned above are less than thirty percent (30%) of the household s total income, the borrower will be eligible for an amortized loan. There are no prepayment penalties on this type of loan. Once the loan has been made, the County will not again review the borrower s income and housing costs unless the borrower s income decreases or their housing costs increase and the borrower requests a review in order to reduce or eliminate payments. These loans are secured by a Deed of Trust on the property and may be subordinated to other encumbrances against the property with County approval. 2. Deferred Loan To be qualified for a deferred loan indebtedness on the property cannot exceed eighty percent (80%) of the appraised value of the property including the after rehabilitation value. Qualified household expenses must exceed thirty percent (30%) of total household income in order to be eligible for a deferred loan, or in some cases the funding source may require all payments to be deferred for a specified period of time. All CalHome funded loans must be deferred payment loans. No loan payments of principal or interest are required during the period of deferral unless there is a default of the loan as described below in section IV.C.1 on page 10 of these Guidelines. This loan is secured by a Deed of Trust on the property and may be subordinated to other encumbrances against the property. Borrowers are encouraged to make payments on these loans whenever possible to offset the increase in the loan amount due to accruing interest. 3. Loan Conditions Ownership and Occupancy If the borrower does not continue to both occupy and own the rehabilitated property the loan will go into default and is immediately due and payable. Some typical events that would cause the loan to be in default are the following: a. The owner-occupant dies and there is no surviving spouse. b. The owner-occupant moves from the property. c. The property becomes a rental property. d. There is a sale or transfer of any portion of any interest in the property. e. The information used to obtain the loan on the application or other loan related documents was fraudulent. f. The Life Estate expires. g. The property is converted to a commercial or non-residential use. h. The borrower stops making payments or becomes seriously delinquent. Page 10 of 15

11 4. Maintenance of Condition of Property The borrower must maintain the property in satisfactory condition throughout the life of the loan. C. Loan Requirements and Documents 1. A Promissory Note and Deed of Trust secure all loans (mobile home loans require additional loan documents). 2. The property loan to value ratio, including the County Rehabilitation loan, shall not exceed 80% of post rehabilitation value. 3. Loans shall not be subject to prepayment penalties. 4. The County may agree to subordinate its security interest on a real estate loan when the following conditions have been met to the satisfaction of the Office of Affordable Housing s Director or his designee: a. After subordination, the total indebtedness evidenced by all liens against the property shall not exceed eighty percent (80%) of the appraised value of the property. b. The purpose of the loan to which the County loan is being subordinated must be to obtain a more favorable interest rate or to obtain funds to meet an unforeseeable emergency, as defined in the regulations for hardship withdrawals from a deferred compensation plan under Section 457 of the Internal Revenue code. c. The County shall have the right to review and approve all documents supporting the proposed subordination including, but not limited to, appraisals of the property. D. Loan Documents The following loan documents are made a part of the Residential Rehabilitation Loan Documents package and must be executed by the borrower(s) prior to the Notice to Proceed: a. Deed of Trust(s) b. Promissory Note(s) c. Truth in Lending Statement d. Notice of Right-to Cancel e. County Owner Participation Agreement and Contract f. Request for Notice of Default and Sale, if applicable g. Certification of Trustee, if applicable Page 11 of 15

12 Contractors A. Requirements The County will conduct affirmative marketing outreach efforts to notify Minority Business Enterprises and Women Business Enterprises of bidding and contract opportunities under the program, including publishing notices of rehabilitation information seminars in local newspapers in English and Spanish. The following criteria must be met in order to be an approved rehabilitation contractor: 1. The contractor must hold a current and valid State of California General Contractor s license. 2. The contractor must be in good standing with the State of California. 3. The contractor cannot be on the State or Federal Contractor s debarred list. 4. The contractor must have a business license. 5. The contractor must have current and valid General Liability and Workmen s Compensation Insurance not less than $1,000,000 combined single limit for bodily injury and property damage for each occurrence. 6. The contractor must follow all State and Federal regulations regarding prevailing wages, if applicable. 7. The contractor must be Lead-safe Certified and posses a Renovation, Repair, and Painting (RRP) Certification. 8. The Contractor must provide a one-year warranty for their work per State regulations. B. Construction Process After the contractor has been chosen, the homeowner and contractor enter into a construction contract which identifies the start and completion dates, description of work, contract amount, schedule of payments, bid, and other contractual items. The contractor will be responsible for making sure all required permits have been secured, depending on the type of work to be performed. C. Inspections During construction and prior to each contractor s request for progress payment, the homeowner must indicate their approval of the completed work by signing the progress payment request. Next, the County s designated inspector will review the completed work and either authorize or deny the payment request. The inspector will authorize payment if the work completed agrees with the work write-up. Ten percent (10%) of each progress payment is held by the County as retention. If the request is denied, the contractor must complete those items that have been determined to be incomplete, or unsatisfactory. Prior to issuing the retention construction payment, the inspector will do a final inspection to Page 12 of 15

13 ensure that all work is complete per the contract and the work write-up and a Notice of Completion (NOC) recorded. The retention payment will be released no earlier than 35 days after the NOC is recorded. If a residential rehabilitation property has lead based paint (LBP) issues, a certified LBP inspector will be utilized for any inspections involving the areas contaminated with LBP. D. Grievances Against Contractors Contracts signed by the contractor and the participant MUST include the following clause, which provides a procedure for the resolution of grievances: Insurance Any controversy arising out of or relating to this Contract, or the breach thereof, shall be submitted to binding arbitration in accordance with the provisions of the California Arbitration Law, Code of Civil Procedure 1280 et seq. The arbitrator shall have the final authority to order work performed, to order the payment from one party to another, and to order whom shall bear the costs of arbitration. Costs to initiate arbitration shall be paid by the party seeking arbitration. A. Fire Insurance Applicants for loans must agree to maintain hazard and fire insurance on the property for the term of the County s loan. The insurance must be an amount adequate to cover all encumbrances on the property. The insurer must identify the County as Loss Payee for the amount of the County s loan(s). The applicant must provide a copy of the insurance binder to the County. In the event a borrower fails to make the fire insurance premium payments in a timely fashion, the County of Santa Clara may make the payments to ensure continuous insurance coverage. If the borrower does not bring the policy current within 60 days from the expiration date of the policy, the County may declare its loan due and payable. The County may, at its option, extend this sixty (60) day period in special circumstances. If the County makes any payments and is not reimbursed within ninety (90) days from the date the County makes the payment, the County may add the amount of these payments to the principal amount of the rehabilitation loan. B. Flood Insurance In areas that are designated by the U.S. Department of Housing and Urban Development (HUD) as flood prone, the property owner is required to maintain flood insurance in an amount adequate to all loans on the property. The flood insurance policy must designate the County as Loss Payee. The flood insurance premium may be funded by the County s rehabilitation loan for up to one year after the date of the final inspection of the rehabilitation work. Page 13 of 15

14 Lead Bases Paint (LBP) If the residence you want to rehabilitate was constructed in or after 1978 it should not contain lead-based paint since lead-based paint was banned for use in residences in 1978; however, a home built before 1978 is likely to have surfaces painted with lead-based paint. If work is done on these painted surfaces, you can be exposed to lead. Even if the lead-based paint has been covered with new paint or another covering, cracked or chipped painted surfaces can expose the lead based paint, possibly creating a new hazard. The County of Santa Clara is required to follow the Federal LBP hazard regulations when implementing residential rehabilitation. The County is responsible for informing residents of the potentials of LBP hazards in their home, to evaluate the degree of LBP hazards, mitigate these LBP hazards (using the appropriate hazard reduction method), provide clearance that the LBP hazards have been appropriately mitigated( if necessary), and provide all appropriate noticing of these steps. The County Lead Based Paint Policy and Procedures are outlined in Exhibit E. Repair Callbacks The contractor may be called back to make corrections on rehabilitation work items that are not covered by the one year warranty, the County has the option to cover the costs through the remaining current CDBG construction loan and/or the Contractor s retention, or the owner may pay for the repairs. Default and Foreclosure If a borrower defaults on a loan, and foreclosure procedures are instituted, they shall be carried out by County Counsel in accordance with the State and Federal Foreclosure regulations. Request for Subordinations Requests for the County to subordinate its loan will be reviewed by a County representative to verify, among other things, that there will be no cash out, that no additional existing debts are being paid and that generally the loan is non-predatory. The following documents will be required for review: 1) Good Faith Estimate of closing costs; 2) Payoff Demand on existing mortgage; 3) Appraisal Report; 4) Preliminary Title Report, and any other document deemed necessary by the County to make a determination. Program Complaint and Appeal Procedure Complaints by County residents or property owners regarding the County s Single-family Housing Rehabilitation Program should be made to the Director of the Office of Affordable Housing, Department of Planning and Review. The Director or a designee will investigate the complaint, prepare an analysis and recommendation and will schedule a discussion of the complaint with the County Housing Loan Committee. If the matter is not resolved to the satisfaction of the person filing the complaint, this person may submit a written appeal addressed Page 14 of 15

15 to the County s Housing Loan Committee. The Committee will convene within 15 days from the date the appeal is received unless a longer period of time is requested by the appellant. Within ten working days from the date the appeal is heard by the Committee, the County will mail a written response of the Committee s decision to the appellant. If the loan was funded with federal funds, the borrower may appeal the County s decision to the State Housing and Community Development Office. The appeal to the State must be submitted to the State within one year after the County s denial or the recording of the Project Notice of Completion with the County Clerk-Recorder s Office. Amendments Amendments to these Guidelines may be made by the County whenever appropriate to improve program effectiveness and to resolve problems. As part of the amendment adoption process, the County will review the policies of federal, state and private funding sources to ensure continuing compliance with published policies. Exceptions Exceptions to these guidelines will require County Housing Loan Committee as well as County Counsel approval, if necessary. Exhibits The following documents are attached and form a part of these guidelines: A. Funding Source Summary B. Income Guidelines C. Eligible and Ineligible Costs D. County Loan Servicing Plan E. Lead Based Paint Policy and Procedures Page 15 of 15