HUD / CDBG Income Guidelines:

CDBG Income Limits

Effective March 2009
 

Extremely Low Income Household/Person: A household or member of a family having an income equal to or less than 30% of the Fitchburg-Leominster MSA Median Family Income.

Very Low Income Household/Person: A household or member of a family having an income equal to or less than the Section 8 very-low income limit established by HUD (or 31-50% of the Fitchburg-Leominster MSA Median Family Income).

Low/Moderate Income Household/Person: A household or member of a family having an income equal to or less than the Section 8 low-income limit and greater than the Section 8 very low-income limit established by HUD (or 51-80% of the Fitchburg-Leominster MSA Median Family Income).

Fitchburg-Leominster MSA Median Family Income: $69,100

information source: http://www.huduser.org

CITY OF LEOMINSTER HOUSING REHABILITATION PROGRAM

PROGRAM MANUAL

A. INTRODUCTION AND PURPOSE

The Leominster Housing Rehabilitation Program has been established by the City of Leominster under the auspices of the U. S. Department of Housing and Urban Development through the Housing and Community Development act of 1974.

The purpose of this program is to arrest deterioration in the local housing stock by making grants and loans available to homeowners for eligible home rehabilitation projects designed to bring substandard housing into compliance with various state and federal codes.

This manual contains a detailed description of the Leominster Housing Rehabilitation program and constitutes the guidelines for participation therein. Homeowners will be required to sign an agreement with the City of Leominster prior to their participation indicating their concurrence with all program requirements as contained herein. Signatories to this agreement will be legally bound by these terms and exceptions will not be made after signatures are affixed to the agreement.

Any person requiring assistance with the details of this program or with any aspect of its administration pursuant to an individual rehabilitation project should contact:

Joseph Cataldo, Rehab Specialist
Office of Planning and Development
City Hall – 25 West Street
Leominster, MA 01453
(978) 534-7526

Note: The Community development Block Grant Office reserves the right to change, modify or amend the program at any time to facilitate the administration of the program and to implement HUD notices and monitoring findings.

B. DEFINITIONS

Agency shall mean the Community Development Office whose responsibility it shall be to operate the program.

Codes shall mean that body of legislation and related regulations which relate directly to housing and includes all federal, state and local laws relating thereto.

Contractor shall mean any recognized and/or licensed person or firm capable of undertaking rehabilitation projects relative to the terms of the program.

Grantee shall mean any Leominster resident who becomes authorized for or receives a rehabilitation grant under the program.

Program shall mean the Leominster Housing Rehabilitation Program.

Property shall mean any structure to which program funds are being applied for the purpose of rehabilitation under the terms of the program.

Violation shall mean any departure from federal, state or local codes or laws presently in effect in the City of Leominster.

C. GENERAL PROGRAM DESCRIPTION

The Leominster Housing Rehabilitation program has been established to render financial assistance to Leominster residents of low/moderate income (as defined by HUD) for the rehabilitation of dwelling units (one to nine units). Ten units or more, Davis Bacon wages shall be applied. Applicants will be processed on a first come first served basis.

C.1. PROGRAM ELEMENTS

This rehabilitation program is composed of several elements designated to ameliorate specific substandard conditions. These are:

1. General rehabilitation
2. Energy conservation activities
3. Elimination of architectural barriers
4. Historic preservation

C.2. ELIGIBLE STRUCTURES

To be eligible for the program, structures must be substandard as determined by inspections made by program staff.

“Substandard” as defined for the purpose of this program is a structure exhibiting significant deviation from the Housing Quality standards of the section 8 Existing Program (882.109). The following criteria will be used to determine whether a structure will be eligible for assistance under the program. Based on section 8 standards, a substandard condition exists when:

a) There are serious deficiencies representing an immediate threat to the health or safety of the occupants.
b) Serious deterioration to individual components of the structure has occurred due to poor design, poor workmanship, or premature failure of materials.
c) Periodic maintenance to individual components of the structure, or the structure as a whole, has been deferred to the extent that if left further unattended, serious conditions will result.
d) The building systems (plumbing, heating, electrical) are antiquated to the extent that they are generally accepted to be no longer the standard and may constitute a health or safety hazard or an unrealistic financial hardship on the structure’s occupants.

If there are no conditions present that fall under the above mentioned criteria, the structure and therefore the property owner, is ineligible. Further, if otherwise eligible conditions exist but the cost of bringing these conditions up to acceptable standards is less than $750, the property owner is ineligible.

It is not the intention of the program to eliminate further maintenance costs to a property owner and/or making general property improvements to the structure. Property owners must recognize periodic maintenance as unavoidable.

The Community Development Director reserves the right to make case by case determinations regarding the eligibility of individuals and structures for the purpose of housing rehabilitation.

C.3. ELIGIBLE APPLICANTS

Eligibility for participation in this program requires that applicants:

1. Have clear title to the property
2. Have not received federal assistance for housing rehabilitation within the last 60 months from the date of application approval
3. Meet gross family income limits as established by HUD

a) very low income – long term deferred payment, no interest loan.
b) low income – 3% interest loan.
c) Moderate income 3% interest loan
d) elderly (age 62 or over) – long term deferred payment, no interest loan.

C.4. ELIGIBLE ACTIVITIES

Rehabilitation projects eligible under this program include a wide variety of items not all of which are included on the following list which is intended to be illustrative only:
1. Repair or replacement of water and sewerage systems and their components;

2. Repair or replacement of heating systems and their components;

3. Repair or replacement of electrical systems and their components;

4. Replacement of defective plumbing, including defective sinks, tubs and toilet facilities;

5. Eradication of all serious insect and rodent infestation;

6. Eradication of lead paint where chance of ingestation by children is likely;

7. Repair of all seriously deteriorated floors, walls and ceilings;

8. Repair or replacement of structurally defective porches, roofs, gutters, chimneys and foundations;

9. Installation of energy conservation items such as storm windows and doors, insulation, weather stripping, etc;

10. Repair of exterior walls so the structure may be kept water tight and free from chronic dampness, weather tight and in good repair. Depending on condition, this may include painting.

ELDERLY FAMILY

“Elderly family” means a family whose head or spouse or whose sole member is at least sixty-two years of age, or a disabled person as defined below or handicapped persons living together, or one or more such persons living with another person who is determined to be essential to his or her case as well being.

HANDICAPPED PERSON

“Handicapped Person” means a person having a physical or mental impairment which:

1. is expected to be of long- continued and indefinite duration
2. substantially impedes his or her ability to live independently; and
3. is of such a nature that such ability could be improved by more suitable housing conditions.

DISABLED PERSON

“Disabled Person” means a person who is under a disability as defined in section 102 (b) (5) of the developmental Disabilities services and facilities Construction amendments of 1970 (42 U.S.C. 60001 (7).” Section 223 of the social security act defines disability as:

A. Inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months; or

B. In the case of an individual who has attained the age of 55 and is blind (within the meaning of ‘blindness” as defined by section 416(I) (1) of this title, inability by reason of such blindness to engage in substantial gainful activity requiring skills or abilities comparable to those of any gainful activity in which he has previously engaged with some regularity and over a substantial period of time.

C.5. DETERMINATION OF GROSS FAMILY INCOME

The following sources of income are counted in computing annual family earnings under the Leominster Housing Rehabilitation Program:

1. gross amount, before payroll deductions, of wages and salaries, overtime pay, fees, commissions, tips and bonuses;

2. net income from operation of a business or profession or from rental of real property;

3. interest and dividends;

4. full amount of periodic payments received from social security, annuities, insurance policies, retirement fund, pensions, disability or death benefits, and other similar types of periodic receipts;

5. payments in lieu of earnings, such as unemployment and disability compensation and severance pay;

6. periodic and determinable allowances, such as alimony and child support payments, as well as regular contributions or gifts from persons not residing in the home;

7. public assistance payments (welfare, AFDC, etc.)

In computing gross family income deductions of $300 per minor (under the age of 18) as well as for “exceptional medical expenses” (exceed 25% of gross family income) will be allowed.

D. PROGRAM MANAGEMENT

D.1. COMMENCEMENT OF WORK

Before any rehabilitation work under this program is authorized to commence, certain procedures shall be followed. Thee are:

1. At least two (2) bids must be submitted by contractors for the work described in the work write-up. Single bids may be allowed if it can be documented that a reasonable attempt was made to secure more than one bid but more than one bid was not forthcoming. In this event single bids will be analyzed by program staff for consistency with the office estimate;

2. Upon selection of a contractor for the work proposed, the owner and the contractor must enter into an agreement containing standard terms and conditions established for this program; and

3. The owner and the City of Leominster shall enter into an agreement stating that both parties agree to the terms of the program as set forth in this manual, and that all aspects of the program shall be conducted accordingly.

When these three (3) conditions have been met, a “Notice to Proceed’ will be executed by the
Rehabilitation specialist authorizing work to begin forthwith.

D.2. BID REQUIREMENTS – CONTRACTOR SELECTION

The Rehabilitation specialist shall obtain, in conjunction with the applicant, a minimum of two (2) sealed bids from contractors for the work to be performed through this program. Bids may be solicited from the office list of contractors or from additional sources, including contractors requested by the applicant.

Selection of the contractor to perform the rehabilitation work will be the discretion of the applicant unless ample evidence exists to indicate that work proposed by that contractor would not be in the best interest of the owner and/or the program. This determination shall be made by program staff in consultation with the applicant. Agency approval of all bids shall be required before work financed under this program begins. It should be noted, however, that the amount of the grant received by the applicant shall be based on the low bid obtained and that any cost in excess of that amount shall be the responsibility of the applicant.

The program staff reserves the right to reject a contractor if he does not have or agree to obtain proper license or insurance, or if he has previously performed unsatisfactorily in the program, or if the Rehabilitation specialist feels that he has too many unfinished contracts.

D.3. PROJECT INSPECTIONS

Determinations of eligibility shall be made upon processing individual applications for funding under this program. Estimated project costs would then be determined through site inspections and work write-ups. The acceptance of a bid for rehabilitation work shall indicate the actual project cost and the program grant shall be based upon this amount plus approved amendments.
Progress payments may be made if requested by a contractor but shall be approved at the discretion of program staff only after an interim inspection has been conducted which indicates that the work covered by this progress payment has been adequately completed. Progress payments shall only be approved at 25% completion and/or 50% completion. Under normal circumstances the program portion will be approved for payment only upon completion and approval of the approved work. Under no circumstances will advance payments prior to the start of construction be authorized.

D.4. PROJECT INSPECTIONS

Over the duration of rehabilitation projects conducted under this program, at least three 93) project inspections will be made.

1. An initial inspection will be conducted upon submission of an application funding under this program. A work write-up and cost estimate will be developed following this inspection by project staff.

2. At least one interim or progress inspection will be conducted during the course of project construction to assure that proper materials are being used and that the quality of work is adequate.

3. One final inspection will be conducted upon project completion to verify completeness and ascertain the adequacy (quality) of workmanship.

Additional inspections may be conducted on any project at any time depending upon circumstances associated with each project. Payments for labor and/or materials will be made contingent on adequate work performed and materials used.

D.5. RETAINAGE

Upon completion of individual projects under this program, retainage in the amount of 15% of the total project cost will be withheld for a period of fifteen (150 days. The contractor will be remunerated for this amount after the stipulated time if during that period no defects in the work become evident, retainage shall be withheld until such time as adequate corrections are made.

E. GENERAL CONDITIONS

The following general conditions will apply uniformly over the duration of the program. However, the City of Leominster reserves the right to make program amendments as necessary to expedite the operation of the program.

E.1. RENTAL AND RESAVE OF REHABBED UNITS

Because the primary purpose of this program is to benefit low/moderate income residents while maintaining the existing housing stock, the use of this program strictly for capitol gains purposes is discouraged. Pursuant to this policy, adherence to certain guidelines will be required of all participants in this rehabilitation program. These are as follows:

1. The owner(s) of any rental units rehabilitated under this program shall agree not to raise rental rates for a period of 24 months from the date of signing the Agreement between owner and the Community development Office. This requirement may be waived by the Community Development Director where the owner(s) can show proof of an increase in costs which would justify the proposed increase other than the costs of rehabilitation. In any case, increases would not become effective while an existing lease if in force.

2. If a structure which has received assistance under this program is sold or the title transferred, or refinanced, the owner/seller shall refund to the City of Leominster 100% of the total amount of such program funding received.

E.2. REPAYMENT OF PROGRAM FUNDS

The owner understands and agrees that if the rehabbed building is sold, or the title transferred or refinanced, the total amount of the grant received shall be refunded to the City of Leominster. The owner understands and agrees that their property will be registered at the Registry of Deeds and a lien put on the property. This agreement shall be binding upon, insure to the benefit of the parties hereto, their heirs, successors and permitted assigns.

E.3. MULTIFAMILY DWELLINGS

GRANT INSURANCE

The owner understands and agrees that property insurance coverage for the total grant amount shall be purchased by the owner , whereas the City of Leominster shall be the beneficiary on the policy. This policy shall be maintained in place every year for the length of the contract. Failure to maintain coverage of such insurance shall be a violation of said contract and will result in “Repayment” of program funds. It shall be the responsibility of the owner to produce an updated policy to the City of Leominster yearly.

PROGRAM BENEFIT LIMITS

CDBG Housing Rehabilitation Program designed goal - $18,000 per unit per single family; $7,000 per unit for multi-families from one to nine. Ten or more units, Davis Bacon ages shall be applied.

Based on the availability of funds and the severity of the violations, the determination for dollar amount is left up to the City of Leominster.

EQUAL OPPORTUNITY

The owner is aware of state and Federal fair Housing Laws and will not discriminate against any person because of race, color, religion, national origin, sex, familial status (children in household) and mental or physically handicapped in the sale or rental of housing; or the provision of real estate brokerage services.