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HeRO Home Repair Opportunity Program

WELCOME!

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AGENDA

1. Welcome & Introduction2. Overview of MHDC3. General overview of the HeRO/DREAM

guidelines4. Detailed step by step guidance5. Forms6. Lead Overview7. Questions & Answers

WHO IS MHDC?

• State housing finance agency▫ Missouri’s Tax Credit program▫ Mortgage Revenue Bond program▫ HOME funds

• Governed by commissioners appointed by the governor

HOME ADMINISTRATION DEPARTMENT

• Provide funding to meet the growing need for home repair for low – to moderate – income homeowners.

• Monitor compliance with MHDC, HUD and IRS regulations.

• Provide support to partners: Participating Jurisdiction (PJ), Community Action Partnerships (CAP) and Regional Planning Commissions.

OUR MISSION…• Missouri Housing Development Commission is

dedicated to strengthening communities and the lives of Missourians through the financing, development and preservation of affordable housing.

OUR HOME FUNDED HOME REPAIRS PROGRAMS:

HeROHome Repair Opportunity

And

DREAMDowntown Revitalization & Economic Assistance for

Missouri

THE HeRO PROGRAM

• Home Repair Opportunity Program• Funded with federal dollars called HOME

money• Federal regulations will apply

HeRO/DREAMGENERAL ELIGIBILITY REQUIREMENTS

1. Owner must have occupied the property as their primary principal residence for the last three years.

2. The house must be at least three years old3. Total annual income must be less than 80% of

the area median income.

HeRO/DREAMGENERAL ELIGIBILITY REQUIREMENTS

4. No part of the property can located within a flood plain (flood zone A).

5. Must have paid insurance and taxes.

Harry S. Truman Community Development Corp.

TYPES OF ELIGIBLE ACTIVITIES

• Weatherization▫ Windows & doors▫ Heating/Cooling systems▫ Insulation

• Repair/Replacement▫ Electrical▫ Plumbing & septic▫ Roofing▫ Foundation repair

Economic Security Corp.

Delta Area Economic Opportunity Corp.

TYPES OF ELIGIBLE ACTIVITIES (CONT.)

• Accessibility▫ Stairs/Rails/Ramps▫ Door widening▫ Bathroom modifications

• Environmental▫ Mold reduction▫ Noise control

City of St. Joseph

Delta Area Economic Opportunity Corp.

TYPES OF ELIGIVLE ACTIVITIES (CONT.)

• Lead Risk Reduction▫ Windows▫ Siding▫ Painting

City of St. Joseph

TYPES OF INELIGIBLE ACTIVITIES

• Fences• Detached garages & sheds• Hot tubs, whirlpool tubs• Central vacuum systems• Updating bathrooms, kitchens &

appliances• Updating carpet & vinyl• Sidewalks • Finishing new construction projects

GENERAL PROGRAM OVERVIEWMaximum Limits

2011 Expenditure Limits:

• Minimum $1,000/Home• Maximum $20,000/Home

GENERAL PROGRAM OVERVIEWMaximum Limits

Note: Under HOME, both the cost of rehabilitating the house and related soft costs are eligible. These are considered the Project Cost.

Administration is not part of the project cost.

GENERAL PROGRAM OVERVIEWProject Costs1. Hard Costs• The actual cost of rehabilitating the house• Cost associated with repair or replacement of

major housing systems in danger of failure.

Example: Labor, lumber, sheet rock, nails, and other materials.

GENERAL PROGRAM OVERVIEWProject costs2. Soft Costs:• These include all reasonable and necessary

costs incurred with the financing or development for rehabilitation.

• Administrative costs of the agency may not be reimbursed as a soft costs.

Example: Building permits, inspections, recording costs, etc.

GENERAL PROGRAM OVERVIEWProject Costs• Administration Costs:

Agencies will not be reimbursed for the following out of the project cost:▫ Agency staff salaries▫ Inspections performed by agency staff▫ Mileage▫ Insurance▫ Office supplies & tools

This will come out of your 10% administration.

GENERAL PROGRAM OVERVIEWAdministration Paid• The participating

agency will be receive up to 10% of each project allotment

• Remember to include your administration when submitting your “Request for Funds Reimbursement”

GENERAL PROGRAM OVERVIEWAdministration Paid• Administration will be deducted from your total

allocation granted that year.

• The easiest way to track your administration:▫ Divide your allotment by 1.1.▫ Do not use an even 10% or it may calculate

incorrectly.

Example:Agency ABC received $100,000

$100,000/1.1= $90,909

= $90,909 for projects (reservation amount)= $ 9,091 for administration (not $10,000)

Project #1 $20,000 + $2,000 admin = $22,000Project #2 $20,000 + $2,000 admin = $22,000Project #3 $20,000 + $2,000 admin = $22,000Project #4 $20,000 + $2,000 admin = $22,000

Final Project $10,909 + $1,090.90 admin = $12,000

$90,909 + $ 9,090.90 admin = $100,000

GENERAL PROGRAM OVERVIEWForm of Financial AssistanceForgivable Loan:• Non interest-bearing• No payments• Forgiven after 3 years of occupancy• Land Use Restriction Agreement (LURA)

attached to deed

GENERAL PROGRAM OVERVIEWThe LURA

• Homeowners will be required to sign a LURA which must be filed with the recorder of deeds by the agency.

• This will outline the terms of the grant and acknowledge repayment to the sub-grantee should the HOME conditions not be met.

GENERAL PROGRAM OVERVIEWThe LURA

• Everyone noted on the Warranty Deed must sign.

• Are not subject to subordination.

• Refinancing, renting out or selling the homebefore 3 years will require full payment of the subsidy received.

QUESTIONS:1. The homeowner is being transferred and must sell the house. The LURA was

recorded 2 years and 11 months ago. They really need to sell the house now. What percentage, if any, will they have to repay?

2. A mother and her son are both listed on the warranty deed. The son is in prison in Mexico serving a one year sentence for lizard smuggling. She hasn’t spoken to her son in years. Does he need to sign the LURA?

3. The homeowners are excited about the improvements to their home. With the increased value of their home, they are now able to withdraw equity to pay off their high-interest credit cards that have been such a financial burden. The lender calls you for a subordination. What do you say?

4. The owner wants to put off construction for a few months until his son moves out. He hasn’t charged any rent and the warranty deed is in his name. He’s planning on moving in after the repairs have been made. Is this allowable?

5. You make accessibility improvements to a home. One year later, the owner’s daughter decides to move her in with her and sell the house. The house is worth $170,000 but she’s listed it for $155,000. There is no mortgage on the house. The daughter states that she shouldn’t have to pay back anything, as the cost of moving her mother is causing a “financial hardship” on her, plus it’s being sold below value. Is she correct?

THE PROPERTY

Billy Warren The City of Cape Girardeau

PROPERTY QUALIFICATIONS

• Must have been their primary principal residence for last three years.

• It must be at least three years old.• Cannot be unfinished construction—must

be livable.• No portion of the property may lie

within a floodplain (flood zone A).

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ELIGIBLE PROPERTY TYPES

• Single family –owned fee simple

• Manufactured on a permanent pored concrete foundation

Robert Black City of St. Joseph

INELIGIBLE PROPERTY TYPES• Duplexes• Condos & lofts• Cooperative units• Double-wide trailers with skirting• Single-wide trailers

INELIGIBLE PROPERTY TYPES

• Farms▫ Income producing properties such as ranches or

farms are not allowed▫ The home must be deeded on less than 10 acres

PROPERTY AFTER REHABILITATION VALUE• The value of the property after rehabilitation

must not exceed the maximum limits• It must be given an estimated after rehab. value

before reserving funds

(Calculation methods later in the presentation.)

THE HOMEOWNER

Shannon Lester East Mo Action Agency & The City of Cape Girardeau

THE HOMEOWNERTotal Number in the Household

• The total number in the household is the total number of persons who currently occupy the property as their full-time principal residence.

The Staley Family NECAC


• A dependent child may be counted as a member of the household if, per the divorce decree, each parent has physical custody at least 50% of the time.


• Foster children are NOT counted as members of the household.

• Un unborn child may NOT count as a dependent.

HOMEOWNER QUALIFICATIONS

To be eligible for HOME funding, the homeowners must:

1. Occupy the property as their principal residence for the last three years

2. Be in the U.S. legally and have a valid social security number

3. The total annual household income must be less than 80% of the area median for their county.

PROPERTY & HOMEOWNERQUESTIONS:1. The homeowner owns a double-wide. It has tie-downs acceptable for

FHA and the wheels have been removed. It is taxed as real property. Would this property qualify for the HeRO Program?

2. An applicant is married and lists his wife as a dependant on the application since her name isn’t on the W/D and she doesn’t work. She is not on his tax return. Her name is shown on the property tax and insurance receipts though. Should you ask for anything?

3. Your elderly applicants have their adult son, Bumkins, living with them. He has joint custody of his daughter but rarely pays his child support. His girlfriend and her son also reside here. What is your household #?

4. This couple also have a minor neighbor child that stays in the home. They do not have legal custody of the child but do provide financial assistance for him as his parents have kicked him out. What is the household #?

CALCULATING INCOME

CALCULATING INCOME

W 2 WagesOvertime/Bonus

Child SupportSocial Security

Income FromAll In Home

HouseholdIncome

CALCULATING INCOME

• Base earnings are projected forward for a full 12-month period.

• For overtime, bonuses, and commissions, the most recent 12-month average will be used (not calendar year).

• Last 12-month history may be required.

See back of handout for example.

CALCULATING INCOME:Using “Worse Case Scenario”• If a 12-month breakdown of overtime is not provided

by the employer, MHDC will accept totaling overtime for the current and previous year, divided by 12months.

Example: Their Verification of Employment shows $3000 in bonuses this year and $4000 in bonuses last year. We will assume the $3000 was a year-end bonuses and include the entire amount.

$3000 + $4000 = $7000/12 = $583 monthly OT

CALCULATING INCOME:Documentation

If using the worse case scenario puts them over the maximum, a break out from the employer will be necessary…

Breakout 7/1/07 to 12/31/07 for Homer J. Simpson:

Overtime = $1,000

End of Year Bonus = $500

Signed: Monte Burns, President

CALCULATING INCOME:

EXAMPLE:

Wages:$20/hr x 40 hrs. per week $800 x 52 = $41,600

Overtime & bonus avg. (worse case)last yr current yr

$4000 + $3500 = $ 7,500

Child support:$300/month = $ 3,600

Adult child: (over 18, not a full time student)

$1,000/month = $12,000

Annual Household Income: $64,700

CALCULATING INCOME:Full-Time Students

• If a member of the household is a full-time student and over the age of 18, you only need to include the first $480/month of their income.

• Include documentation showing full-time status (school transcripts, report cards, etc.)

• Will still include full amount of child support if received

CALCULATING INCOME:Self-Employed Persons

• Income listed on line 12 (net earnings) of the previous year’s 1040 is used

• Do not average income over several years

• Deductions are allowed, but all depreciation must be straight-line

CALCULATING INCOME:Seasonal Workers

• Use the exact amount received in the previous 12 month period

• If on the job less than 12 months, divide total income by months worked, then project forward to obtain 12 month income figure

CALCULATING INCOME:Seasonal Workers

Example:Paul just started working for “Cool Pools” this year as a pool cleaner.

From May 1 until September 30th, he has made $10,000.

$10,000 / 5 months = $2,000 monthly avg. $2,000 x 12 = $24,000

VERIFICATION OF EMPLOYMENT DOCUMENTATION

All income must be documented!

VERIFICATION OF EMPLOYMENT DOCUMENTATIONWages:• Verification of Employment (VOE)▫ Complete and signed by employer▫ Not over four months old▫ Blank VOE on website

• “Work Number for Everyone” ▫ Must use the FULL version

• Alternative Documentation▫ 30 days of pay stubs showing YTD▫ Previous year’s W-2 for that job (NOT tax returns)▫ Verification of their start date

VERIFICATION OF EMPLOYMENT DOCUMENTATION (Cont.)• Self Employment Income▫ Previous year’s tax returns▫ Profit and loss statement from accountant if they

just started

• Social Security & Pension Income▫ Annual award letters

• Interest & Annuity Income▫ Previous year’s tax returns▫ 1099 or earnings statement

VERIFICATION OF EMPLOYMENT DOCUMENTATION (Cont.)

• Child Support & Alimony Income▫ Divorce decree▫ Printout from court or Social Services showing

payment history ▫ “Certification of Zero Support for Children” (Form

#423) if nothing is received


NOTE: Even if child support is not received on a regular basis, it must be included.

Always include the Certification of Zero Income for Children (Form #423) if nothing is received.

CERTIFICATION OF ZERO INCOME FOR CHILDREN (To be signed by custodial parent or legal guardian)

I, _______________________________ hereby certify that I do not receive income from any of the following sources:

1. Child support (whether ordered or not ordered by the court); 2. Social Security payments; 3. Disability payments; 4. Public Assistance payments; 5. Any other source not named above;

For the following child(ren): _____________________________ _____________________________________ _____________________________ _____________________________________ _____________________________ _____________________________________ There is no imminent change expected in my income during the next 12 months. Under penalty of perjury, I certify that the information in this certification is true and accurate to the best of my knowledge. The undersigned further understands that providing false representations herein constitutes an act of fraud. ___________________________________ ___________________________ Signature Date State of ________________________) ) ss County of ______________________) Sworn to before me, this ______ day of _____________________, 20 ____________________________ Notary My Commission Expires: _______________________________

Form 423

DO NOT SEND IN THE FOLLOWING AS VERIFICATION:• Bank statements• Letters from the homeowner stating how much

they make• Letters from the agency or DFS stating how

much they make• W2s for jobs where they no longer work


• If an adult member of the household does notwork or plan to work within the next year, have them complete the Certification of Zero Income for Adults (Form #4.22)

CERTIFICATION OF ZERO INCOME (To be signed by adult household member only)

I, ___________________________________________ __________-________-____________, Name Social Security Number hereby certify that I do not receive income from any of the following sources:

1. Wages from employment (including commissions, tips, bonuses, fees, etc.); 2. Income from operations of a business; 3. Rental income from real or personal property; 4. Interest or dividends form assets; 5. Social Security payments, annuities, insurance policies, retirement funds, pensions, or death

benefits; 6. Unemployment or disability payments; 7. Public assistance payments; 8. Periodic allowances such as alimony, or gifts received from persons not living in my household; 9. Sales form self-employed resources; 10. Any other source not named above.

There is no imminent change expected in my income during the next 12 months. Under penalty of perjury, I certify that the information in this certification is true and accurate to the best of my knowledge. The undersigned further understands that providing false representations herein constitutes an act of fraud. _________________________________________________ ___________________________ Signature Date State of ________________________) ) ss County of ______________________) Sworn to before me, this ______ day of _____________________, 20

_______________________________________

Notary

Form 422

CALCULATING INCOME

• Layoffs Due to IllnessThe period of time that the homeowner was not at work due to an illness, injury, or maternity leave may NOT be included to achieve a 12-month history.

Divide the earnings by the actual period of time worked then project forward for 12 months.

CALCULATING INCOME• Quitting a job after

application...

If the homeowner quits a job after applying for the HeRO Program, the income from that job must be used for qualifying purposes.

THE HOMEOWNER MAY NOT QUIT A JOB IN ORDER TO QUALIFY.

CALCULATING INCOME• Show your work! Don’t forget to include the

Calculation Worksheet (Form #424) HeRO Program Calculation Worksheet Form#424

Owner Monthly Income

Co-Owner Monthly Income

Total Monthly Income

Gross Pay

Overtime

Part-time Employment

Commissions

Bonuses

Dividends

Interest

Royalties

Pensions

VA Compenation

Net Rental Income

Alimony

Child Support

Public Assistance

Sick Pay

Social Security Benefits

Unemployment Comp.

Income Received-Trusts

Income-Business Activity

Investment Income

Total Projected Monthly Gross Income:

TOTAL PROJECTED ANNUAL HOUSEHOLD INCOME:

X 12

$

Maximum income limit for ___________________ county for a household of ______ = $ ________________ Short explanation of how income was calculated:

Income close to the maximum?

Have an unusual situation?

Submit for prior approval!

Request for Prior Approval All items must be completed in order for MHDC to review your case. Please allow 4 days for response. Agency Name: _________________________ Contact Name: ________________________ Phone #: _________________________ Fax #: ______________________________

Homeowner’s Name: ________________________________________________________ Property Address:________________________________________________ MO __________ Street City Zip MHDC Reservation Number Proposed Completion Date ____________________ ___________________

Please review the following for prior approval on:

Flood Zone D Must include a letter from City or County Official, on letterhead, stating he or she can verify, without

hesitation, that the property did not flood in 1993, and has not flooded in the last 10 years. This must be done prior to project completion.

Income MUST complete the following:

1. Number of persons intending to occupy the residence: ______ 2. Include copy of current Loan Application. 3. Include copy of the MHDC Income Calculation Worksheet. 4. If overtime, commissions or bonuses or being used, the lender must set out details of exactly what

was used and a schedule of income form VOEs, pay stubs or other documentation used for arriving at the figures --show the method of calculation. Include this documentation.

Project Requiring Special Consideration Explain, in writing, the special circumstances surrounding the project and what exceptions you wish

to be made.

Other – Explain in writing exactly what you wish for MHDC to review. Include all documentation. ________________________________________________________________________________________________________________________________________________

For MHDC Use Only

Based upon the information you have submitted, MHDC has determined that the above Homeowner, DOES DOES NOT meet all criteria for this situation as noted above. If approved, should any information change prior to closing, it will be necessary to obtain a new prior approval. With Prior Approval of income, should the VOE documentation become more than months old prior to loan closing, it will be necessary for you to obtain new VOEs and new income data for purposes of determining eligibility for a first-time homebuyer loan. This loan will have to still meet all other regulations and rules of the HOME rehabilitation program. Any change in the Maximum Income Limitations before this loan closes could alter this approval.

Missouri Housing Development Commission _______________________________

COMPLETE THE FOLLOWING AND INCLUDE THIS FORM WITH THE LOAN PACKAGE!

_____ The documentation provided for this prior approval has not changed. _____ The documentation provided for this prior approval did not change before loan closing. Attached is the new documentation. Date: ____________ ___________________________________________________ Agency Authorized Signature

Form 403

QUESTIONS1. The VOE shows last year’s bonuses to be $2,000 and $1,000 as

of June this year. Can you divide this 18 month’s worth of income by 18 for your average?

2. The parents have a small child that is disabled. Would you include their child’s Social Security income?

3. A mother has just returned to work after being on maternity leave for 3 months. Her 12 month break out shows she’s made a total of $9,000 in the last 12 months. Can you use this amount?

4. The homeowner receives social security and a pension payment. It is directly deposited into her account and she brings you her bank statement. Can this be accepted as verification of employment?

CALCULATING INCOMELet’s try it on your own now!!

The Sub-GranteesThe Participating Agency

http://www.stjomo.com/home.aspx�

THE AGENCY

• Set your objects for your home repair program

• The program may address a number of goals▫ Neighborhood revitalization▫ Spot repair▫ Assistance to special populations (elderly, very

low-income, etc.)

THE AGENCYThe participating agency should familiarize themselves with the following: Grant Agreement HeRO Manual 24 CFR Part 35 —HUD’s lead-based paint regulations

24 CFR Part 58 —HUD’s Environmental Review

24 CFR Part 92 —Federal HOME Rule

Submission & Draw Package Requirements MHDC’s “In House” Check Sheet/Stacking Sheet

(Form #465)

THE AGENCY

• In addition to periodic monitoring of the project, the agency must establish and maintain sufficient record keeping

• These records must be maintained for Fiveyears after the LURA is released.

THE AGENCYRecordkeepingAt minimum, the following records must be

maintained:• Program & project records• Required MHDC forms & documentation• Financial / Accounting records• Contractor documentation & contracts• Correspondence regarding failed projects or

disputes

THE AGENCYRecordkeeping

There will be two files for each project:

Agency’s “In House” File

MHDCProject File

Reservation Package

Draw Request Package

THE AGENCYFile Submission

The Agency’s “In House” File:

• The In House Stacking Sheet (Form #465) lists, at minimum, what should be included in the file

• The file will remain with the agency• Used by MHDC for auditing purposed


MHDC Project File:

• The project file will consist of two separate packages that will be submitted to MHDC:▫ Reservation Package▫ Draw Package


• Incorrect or incompletepackages may be returned for correction before theproject can proceed.

Cape Girardeau East Mo. Action Agency

THE HeRO PROGRAM:Step by Step Guidance

PHASES & PROCEDURES Step 1 – Application Step 2 – Inspections Pre Inspections Lead Environmental

Step 3 – The Work Write-Up Step 4 – Solicit contractors Step 5 – Pre-rehab conference Step 6 – Reserving funds Reservation Package

Step 7 – Construction Step 8 – Close out phase Step 9 – Request for payment Reservation Package

STEP #1: APPLICATION

Step #1: The Application Phase

Upon initial contact by the applicant, the agency will:

• Briefly outline the program & its guidelines• Explain conditions of the LURA• Have homeowner complete the Application

(Form #400)• Determine basic eligibility• The house must first be brought up to code and

pass a lead clearance (wants vs. needs).

STEP #1: The Application Phase

EXAMPLE:

The homeowner wishes to repair a leaky sink in the kitchen. The inspection found a back-up of raw sewage in the basement.

The project will now be focused on the back-up problem despite the homeowner’s original repair request.

This would greatly effect the scope of work.


If the applicant appears eligible following this informal screening, additional information can be requested.

A walk through of the house will now be scheduled.


The Homeowner should be given a list of items to bring. This would include the following:

1. Proof of income for all members of the household (VOE may be requested)

2. Paid real estate tax receipts for previous year3. Insurance policy for the property4. Proof of ownership (Copy of W/D or an

Ownership and Encumbrances certification from a title company)


Proof of Ownership:• Recorded warranty deed• Ownership & encumbrance from title company• Beneficiary deeds are fine (must provide death

certificate or Quit Claim)• No Contracts for Deed!

Shirley Boyd NECAC


Couples noted on the Warranty Deed:• If they are listed on the W/D...they have ownership!• If they were never divorced...they are still married.▫ The estranged spouse must sign the LURA as they

have marital rights to the property.▫ Marital Waivers & Quit Claims not allowed.▫ The income of the estranged spouse not counted

provided the agency can verify their residence history (lease agreements, utility bills, etc.).

STEP #1: The Application Forms

The homeowner will complete:

1. The HOME Rehabilitation Application (Form #400) and,

2. The Homeowner’s Affidavit (Form #405) which explains the consequences of the program

Retain the originals and give the homeowner a copy.


Obtain important preliminary data:

• Age of the house• Number & age of occupants• Improvement concerns• Recent/current improvements• Animals on the property

Jane Michaelree Beyond Housing


NOTE: If the applicant is clearly ineligible, the Applicant Ineligibility Letter (Form #401) must be given to them.

QUESTIONS ON THE APPLICATION PROCESS: Example #1 in back of handout: Does Michael Clavin qualify? Example #2 in back of handout: Does William Stewart qualify?

Question #1:The applicant has a beneficiary deed showing that he, along with his sister, are beneficiaries to his Grandmother’s house. Does this qualify?

Question #2:A single mother brings in her warranty deed and a copy of her divorce decree. Her husband’s name is on the W/D but the divorce decree states that she gets the house. Does this qualify?

Question #3:A gentleman states that his wife left the house 20 years ago to buy cigarettes and never returned. She is still noted on the W/D. Can he still apply?

STEP #2:The Inspections

STEP #2: THE INSPECTIONSTwo major pre-inspections:1. Walk Through Inspection▫ See what the homeowner’s wants▫ Assess code violations▫ Assess paint conditions▫ Order other inspections (termite, structural,

etc.)▫ Is the project feasible?

2. Lead Inspection▫ For every pre-1978 house▫ For the entire house

STEP #2: THE INSPECTIONSThe Walk-ThroughAgency Inspector’s Responsibilities:• Should have knowledge of ▫ Local building codes▫ Minimum Building Code (24CFR Part 92.251)▫ HQS

• Will complete the checklist identifying all needed improvements and code violations▫ Can use Property Inspection Checklist Form #410▫ May use own software or forms

• Have him take before pictures

MISSOURI HOUSING DEVELOPMENT COMMISSION HOME Repair Program

HQS Property Inspection Checklist and Report

General Information Date of Inspection: _____________ Inspector: ___________________________________________ Property Street Address: _______________________________________________________________ County: _________________________ State: _________________ Zip: _____________________ Name of Family: __________________________________________________________________________

Summary of Condition P = Pass F = Fail A = Action Summary Decision Pass Fail

Living Room Code Description P F Action Living Room Present Electricity Electrical Hazards Security Window Condition Ceiling Condition Wall Condition Floor Condition Lead Paint Weatherstripping Other Other

Kitchen Code Description P F Action Kitchen Present Electricity Electrical Hazards Security Window Condition Ceiling Condition Wall Condition Floor Condition Floor Condition

Form 410

STEP #2: THE INSPECTIONSBefore & After Pictures - GOOD

Take before and after pictures of:

• all four sides of the house• major repairs to be made• items to be replaced such

as furnaces, water heaters, etc.

• capture windows and roof if being replaced

STEP #2: THE INSPECTIONSBefore & After Pictures -Not so good... Capture the entire front of the house

Good example when you have non-traditional repairs

STEP #2: THE INSPECTIONSBefore & After Pictures

•Pull a map before sending your inspector to the property.

•Take pictures of any applicable environmental hazards while they are in the area.

•Save for later projects!

STEP #2: THE INSPECTIONSThe Walk-Through

Homeowner participation:• Must be present so they better understand the

proposed project that is to be undertaken• Gives the agency specialist an opportunity to

point out and explain why improvements may be necessary to meet safety, code, and lead requirements.

• Can also solicit information regarding past repairs, deficiencies, etc.

STEP #2: THE INSPECTIONSThe Lead Inspection2. Lead Inspection▫ Rehab < $5,000

Visual Inspection▫ Rehab > $5,000

A lead assessment must be ordered using a qualified inspector or an outside certified lead-based inspector must be hired

The project looks feasible...now what?

Mr. Dill Ozark Action

THE ENVIRONMENTAL REVIEW INSPECTION

STEP #2: THE INSPECTIONSThe Environmental Review Process

1. Obtain the Section 106 Review – SHPO Letter from the State Housing Preservation Office. (See their attached submission instructions.)

2. Obtain a FEMA Flood Letter to document that the property is not located within a flood zone.

3. Complete MHDC’s Environmental Check Sheet (Form #415)

STEP #2: THE INSPECTIONSFEMA Flood LetterFEMA Flood Letter.• If the FEMA Flood Letter shows the flood

zone to be “D” or “None”, this means the area has not been mapped.A letter must be obtained from a city or government official stating, without hesitancy, that the property did not flood in 1993 or since then.

• Only areas located in “A” are unallowable.

STEP #2: THE INSPECTIONSFEMA Flood Letter

No portion of the property can lie within flood zone A.

New Cambria, KS 1993

STEP #2: THE INSPECTIONS The Environmental Review

The Environmental Review Report (Form #415) must be completed

• This is submitted in lieu of HUD’s form 4128• Information is used by MHDC’s compliance

officer to generate the Noise Analysis Evaluation• All projects where the rehab exceeds 50% of the

before rehab value will require a noise analysis

STEP #2: THE INSPECTIONS The Environmental Review

Example:

Current value of the home = $ 37,000Reservation minus soft costs = $ 19,000

$19,000/$37,000 = 51.35%

The money invested is over half the value of the house. A noise analysis will be required.

MISSOURI HOUSING DEVELOPMENT COMMISSION HOME Repair Program Environmental Report

INSTRUCTIONS This checklist is to be completed by the Sub-grantee and submitted in lieu of the HUD Form 4128 along with initial application for funding. MHDC encourages the use of maps and photographs to help show locations and conditions of items noted in the checklist. Feel free to mark up the maps as necessary and use more than one map if it keeps the information more legible. Different types of maps could be useful in describing the environmental factors that must be investigated, such as: location map showing major features and facilities in the vicinity, USGS topographic map, zoning map, and/or land use map. Many of the conditions observed can and should be recorded directly on a site plan. Distances to major features and facilities (e.g., schools, parks, police stations and fire stations) and a description of the surrounding area are examples. An aerial photo showing the site and community would be helpful. Location: Owner: __________________________________________________________________ Street: ___________________________City: ________________County: _____________ Field Inspection on: Date: _______________By_____________________________________________ ENVIRONMENTAL COMPLIANCE FACTORS Noise Analysis:

• NOTE: Show location on map of all the following elements: 1. Is the site within 1000 feet of a major street/road/highway/freeway? X Yes No (Show the location of all stop signs, stop lights, industrial parks, etc. on map)

If yes, must complete the following: Distance to Nearest Lane: ________________ Distance to Farthest Lane: ________________ Speed Limit: ________________

2. Is the site within 3000 feet of a railroad? X Yes No

If yes, must complete the following: Exact Distance to railroad tracks: ________________ Name of railroad that owns the tracks: ________________ What is the nearest Railroad crossing #? ________________ What is the nearest Mile Post Marker? ________________ Is the house located between the horn warning sections located near the crossing? Yes No 3. Is the site within 15 miles of a military or civil airfield? Yes No If yes, how far? ________________

Form 415

Is the site within 3000 feet of a railroad? X Yes No

If yes, must complete the following:Exact Distance to railroad tracks: 1885 ft.

Name of railroad that owns the tracks: BNSF RR

What is the nearest Railroad crossing #? 669871J

What is the nearest Mile Post Marker? 124.5

Is the house located between the horn warning sections located near the crossing? X Yes No

Let’s Take a Closer Look…

Mile Marker = 124.50

Rail Road Crossing Number = DOT BN 669871 J

Rail Road Name = BNSF Railway

Picture provided by Marvin Meeker.

Thanks Marvin!

WHERE DOES THIS INFORMATION COME FROM?

What is a “Horn Warning” area?In this example, our train is located ¼ mile from the crossing where it will “toot” it’s horn as a warning. As you can see, the property is located within the warning zone. Note this on the #415.

ERR EXAMPLE:

1. House is within 3,000’ of RR Note the name of the line Obtain the crossing & mile marker numbers The spur to the north has been removed, obtain pictures

2. House within 1,000’ of major highway Note any stop signs/stop lights

STEP #2: THE INSPECTIONSEnvironmental Review

NOTE:• Rarely will a project be a candidate for rejection

on noise alone.• If noise levels exceeding 75dB, the surrounding

land use will be evaluated• Support for housing in a high-impact noise

environment may not be practicable.

STEP #2: THE INSPECTIONSEnvironmental Review

LET’S TRY IT ON YOUR OWN!

See back of handout for examples.

EXERCISE #1

1. Note crossing #s for RR #12. Note crossing #s for RR#23. Measure distance to Hwy (You will measure 6’ in front of the house to the

middle of the hwy)4. Note Stop signs along the highway

EXERCISE #2

EXERCISE #2

EXERCISE #2

1. Note crossing numbers for left track2. Provide pictures showing the right track has been

removed. You could also obtain a letter from the RR or city.

EXERCISE #2

STEP #2: THE INSPECTIONSDetermining After Rehab. Value

Each home must have an after-rehabilitation value documented prior to beginning construction.

The value of the HOME-assisted property must not exceed 95% of the median purchase price for their area.


• The current maximum after rehab. value is $190,000.

• Houses that receive HOME assistance may not be valued at $190,000 or higher after completion.


When the current value is < $150,000:

1. Estimates - a value performed by a qualified appraiser, realtor, or the agency’s rehabilitation specialist.After Rehabilitation Verification (Form #411A)

2. Tax Assessments - for comparable properties, located in the same neighborhood, only if current and accurate.

3. Appraisal - by a licensed appraiser.


When the current value is > $150,000:

1. Appraisal- can be prepared by a licensed fee appraiser or by a staff appraiser of the Agency.The After Rehabilitation Verification(Form #411B)

The “In-house” file must document the appraised value and the appraisal approach used.

STEP #3:WORK WRITE UP &COST ESTIMATE

STEP #3: WORK WRITE UP & COST ESTIMATE

• After the property is found suitable for rehabilitation, the inspector executes the Work Write-Up/Cost Estimate (#420)

• This serves as the contract between the agency, the homeowner, and the contractor.


Work Write-Up/Cost Estimate Date: ___________ Owner: ______________________________ Agency: ________________________________ Property Address: ______________________________ Contractor: ________________________________

______________________________ Inspector: ________________________________

ITEM#

WORK DESCRIPTION PERFORMANCE STANDARD

REFERENCE # (See Manual Appendix)

MATERIAL COST

LABOR COST

TOTAL COST

List Soft Costs:

Pre/Post Inspections (to third party only): $ Lead Testing (if applicable): $ Recording Fees: $ List Other ______________________ : $

Total:

$

**If necessary, use more than one page. If the total exceeds the maximum allowed, indicate what items MHDC will be funding.

____________________________ ______________________________ __________________________ Signature of Inspector Signature of Contractor Signature of Homeowner

Form 420


Very Important!

Write-ups serve as instructions to potential contractors about work to be done and therefore, should be specific, clear and complete.


Every Work Write-Up must contain:

1. Property Standard- relates to the area of the home to be repaired.

2. Performance Standard – relates to the actual repair


Property Standard Example:

Roof: Roofs shall be structurally sound and maintained in a safe manner and have no defects which might admit rain or cause dampness in the walls or interior portion of the building.


Performance Standard Example:

Roof - Install new asphalt shingles over existing roof. Repair defective roof by installing new asphalt 3-tab strip shingles -235# per square using roofing nails only. Shingles to have a 25 year warranty and carry National Underwriter’s class “C” label. Work to include 8” aluminum drip edge, caulking with roof cement and replacing all flashing.

The Performance Standards and Specifications Codes: is a quick and easy reference tool used to identify both.

R = Repair/Replace13 = Any activity associated with a “roof”3 = Installation of new shingles


ITEM WORK PERFORMANCE STANDARD# DESCRIPTION REFERENCE NUMBER___

1 Repair defective roof R - 13.3

by installing new asphaltshingles over existing roof of northeast corner, front porch


Cost Estimates:• Estimates the cost for each item listed on the

Work Write-Up.▫ Aids in determining a budget▫ Assists in obtaining bids ▫ Verifies that bids received are reasonable and

customary with the market• Historical cost data from similar projects• R.S. Means Manual


Example of a good Work Write-Up:

Quantity:• Good – Install 25 sq ft of 2x 2 inch new bath tiles• Bad – Install new tiles as needed

Method:• Good – Re-plaster 1x1 ft damaged plaster on

northeast corner of rear bedroom• Bad – Repair damaged plaster in bedroom


• Soft Costs▫ All applicable soft costs (lab fees, permits, etc.)

should be noted in detail on the work write-up as well and included in the project cost/reservation amount.

▫ Don’t forget to include your recording fees for the LURA!


• The agency will then review the write-up with the homeowner so they understand what repairs will be made and the costs associated with those repairs.


• The homeowner will sign the Work Write-Upaccepting the repairs listed

• The acceptance of the repairs to be completed at the pre-bid stage will eliminate misunderstandings at a later date once the work has started.

WORK WRITE-UP REVIEW QUESTIONS:1. You will be replacing a roof. Material and labor will be

$10,000. Your agency’s inspector is paid $100 per walk through plus $50 for mileage. You also have $500 for lead testing, $50 Recording Fee, and $10 for your FEMA Flood Letter. What is your reservation amount going to be?

2. The project cannot be done for $20,000. The homeowner states that if you buy the roofing material, he will place the roof on himself. Is this allowed?

3. The homeowner has stated that the detached garage should be sided to match the house. The project is only at $10,000 so there is enough funds available. Is this allowable?

4. The homeowner does not own a refrigerator. She really needs something to keep milk in for her children. Is this an allowable expense?

STEP #4: CONTRACTORS

David DeVault with DeVault Construction Cape Girardeau

STEP #4: SOLICIT CONTRACTORS

• Solicit▫ Newspaper ads▫ Check list of local issued contractor licenses▫ See who neighboring agencies are using

• Choosing a contractor▫ Homeowner can select off agency’s pre-approved

list▫ Other contractors must obtain approval prior to

starting the project


• To be a qualified contractor▫ Must have general contractor’s license or other

applicable license▫ Proof of insurance (liability, workman’s comp.,

and auto)▫ Credit must be in good standing▫ Must be EPA certified as of 4/1/2010

STEP #4: SOLICIT CONTRACTORSSubmit to MHDC:

1. Application (Form #435)

2. Proof of Insurance • General liability of $150,000 or more• Worker’s compensation (if applicable)• Auto coverage

3. Applicable licenses4. Certification Regarding Debarment (Form #440)

completed by the agency. To see if a contractor is on the Federal Debarment List, go to www.epls.gov

The Contractor Check Sheet (Form #430) will list all documentation required and aide in package submission.

http://www.epls.gov/�


Check Sheet – For Agency’s Use Only

Date Initial

Contractor Application (Form #435) -Completed and signed by the applicant

Certification Regarding Debarment, Suspension,

Ineligibility, and Voluntary Exclusion Lower Tier Covered Transactions (Form #440) -Verified at http://epls.arnet.gov and signed by an Agency Representative

Copy of valid State General Contractor’s License,

City License, or other applicable Licenses.

Copy of current proof of insurance-

-includes General (must show $150,000 or more of coverage), Worker’s Compensation, and Applicable Auto Coverage

Copy of Credit Report

-MHDC may run this for you if need be

Proof of training in “Lead Safe Work Practices’, if

applicable.

Proof of Certification in Lead Abatement, if applicable.

Form 430


• NOTE: MHDC will run a credit report to verify the contractor is in good standing.


• MHDC will execute a Contractor Eligibility Verification (Form #425) stating the contractor has been approved.

Contractors must be approved before starting any project.


Contractor Eligibility Verification Form Agency Name: _____________________ Fax: ____________________

Contact Person: _________________________________ The contracting firm listed below has applied to be placed on the “List of Pre-Qualified Contractors” for the purpose of performing rehabilitation work in the Missouri Housing Development Commission HOME Rehabilitation Program. The contracting firm has provided the proper documentation and verification necessary to participate in the program. Contractor Name: ____________________________________________________ Address: ______________________________________________________

Documentation/Verification YES NO 1. “Contractor Application” completed and signed by applicant

2. Current, In-Force Certificate of Insurance with the following minimum coverage:

a. General Commercial Liability of $150,000 or more (Claims Made Policy – ok) b. Worker’s Compensation Missouri Statutory Limits c. Vehicle Liability Insurance 3. Electrical, Plumbing, and/or Heating License (as applicable) – Please List:

a. b. c. 4. Has contractor participated in a “Lead-Based Paint Renovator/Safe Work Practices”

Course?

5. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions

List any comments and/or information noted you feel should be highlighted.

WORK HISTORY (Comments) _____________________________________________ ____________________________________________________________________ CLIENT REFERENCES (Comments) _________________________________________ ____________________________________________________________________________________________________________________________________________ CREDIT HISTORY (Comments) ______________________________________________ ______________________________________________________________________

FOR MHDC USE ONLY

Recommendation: Approve Disapprove Made By: ______________________ Date: ____________________ Comments: ___________________________________________________________

Form 425

STEP #4: SOLICIT CONTRACTORSIneligible Contractors:• Contractor listed on the federal debarred list• Contractor has not paid material suppliers or has

excessive liens• Contractor has not completed projects within the

allotted time frame• Substantial complaints by homeowners or the

agency about the quality of work and performance

NOTE: The homeowner and contractor may not enter into any “side contracts”.

Sweat equity is not allowed. If a homeowner wishes to perform any work themselves, this work must be completed before the agency begins rehab.


NEW STARTING APRIL 1, 2010

• EPA’S RRP Rule (Renovation, Repair, and Painting) states that any contractor renovating for compensation in a house older than 1978, must be EPA certified.

STEP #5PRE-REHABILITATION CONFERENCE

Sherrie Still Beyond Housing

STEP #5:PRE-REHABILITATION CONFERENCE

• The homeowner, contractor, and agency rehabilitation specialist should all attend this meeting.

• This allows all parties to review their expectations, the work that will be performed, and the procedures that will be used.

STEP #5:PRE-REHABILITATION CONFERENCE• Provides the setting to sign all required

documentation▫ Work Write-Up (Form #420) – Review and

clarify. Serves as the contract and will become effective once all have signed.

▫ LURA – must be signed before the project can commence.

• Provide all required notifications including those related to lead-based paint issues.

STEP #5:PRE-REHABILITATION CONFERENCE

Educate the homeowner for a smoother project!

• The family must expect to be inconvenienced by the work and the presence of contractors.

• Projects may take longer than planned.• The family must abide lead safe work practices. • Threatening acts by the homeowners or related

parties to the contractor will void their contract.

STEP #6THE RESERVATION PHASE

STEP #6:THE RESERVATION STAGE

Everything is ready to go. It’s time to reserve your money!

Submit your Reservation Package to MHDC.


The Reservation Package will include the following:

1. The Application (Form #400) copy

2. Reservation of Funds (Form #445) copy

3. Work Write-Up (Form #420) original

4. Before Pictures5. The Environmental Review Report (Form #415)

including the FEMA flood & SHPO letter copy

6. Calculation Worksheet and all applicable verification used to calculate household income copy


After reviewing the file for compliance, MHDC will issue an approved Reservation of Funds and fax or email the confirmation to the contact person.


Reservation Request

HeRO Rural DREAM

Part A: Housing Provider Information Agency Name: ____________________________

Contact: _________________________________ Phone #: _________________________________ Fax #: ___________________________________ Email: ___________________________________

Estimated Completion Date: ______________

Total Estimated Project Cost: $ ____________

Total HOME funds requested from MHDC as reflected on the Work Write-Up:

(Include hard & soft costs only. Do not include admin.) $ _____________ Other Contributions If applicable : $ ____________

From: _______________________________

Home’s Current Value: $_____________ Est. of After Rehab. Value: $_____________

Part B: Homeowner(s) Information Name(s):_____________________________________________________________________________

Property Address:_______________________________________________________________________

City: ___________________________________ Zip Code: ____________ County:_________________

Household #: ______ Annual Gross Income: $ _________________ Part C: MHDC Only **Once approved, this signed request will be returned to you then the project may commence. MHDC Reservation #: ______________________________ Expiration Date: ________________ Approved By: __________________________________________ Date:_________________________

Part D: Change Order Request **Include Change Order if Applicable

Form 445

Send Package to: Missouri Housing Development Commission, 3435 Broadway, Kansas City, MO 64111

Mark Appropriate Box: Original Submission or, Change Order Request (Attach copy of signed, amended Work Write-up/Change Order) Extension Request

Cancellation

To Support This Request, We are Enclosing a Copy of Each of the Following: ● Copy of Application (Form #400) ● Original Work Write-Up/Cost Estimate (Form #420) ● “Before” Pictures ● All documentation used to calculate income (VOEs, Pay Stubs & W2’s, Social Security Letters, Child Support Documentation, Forms #422 or #423, etc.) ● Original Environmental Review (Form #415) Include a copy of the SHPO Letter & FEMA Flood Letter

Please change the following:

STEP #7CONSTRUCTION PHASE

Shannon Lester East MO Action Agency and City of Cape Girardeau


Time to start the project!

The rehab begins after the agency has confirmation of their reservation and they have given their approved contractor the notice to proceed.


• The agency should make on-site inspection of the work.

• The frequency of these inspections will depend on the experience of the contractor and the complexity of the project.

Harry S. Truman Community Development Corp.


Sometimes the unexpectedhappens.

• Change Orders▫ As long as the current reservation is under

$20,000 and funds are still available, a Change Order (Form #421) may be submitted to request an increase in the reservation

▫ This serves as an addendum to your contract so everyone must sign.

MISSOURI HOUSING DEVELOPMENT COMMISSION

HOME Repair Program Change Order

Property Owner: Dora and Diego Explorer Property Address: 888 Tree-Lined Road, Happytown, MO

Contract Date: 8/1/08 Change Order #: 1 Contractor: Bob the Builder

ITEM # CHANGE DESCRIPTION CHANGE COST

1 Tear down old sheetrock in south bathroom wall and replace due to old water damage. Prime and repaint entire bathroom to match. (Homeowner’s color choice.)

$ 1000

The contract will be increased/decreased to: $ 13,000 The contract time is extended X not extended by _____ calendar days New completion date is 1/01/2009 . This amendment is made part of the Contract and the parties have hereto set their signatures: Diego Explorer Dora Explorer __________________ Angie Agency Homeowner Contractor Rehabilitation Technician

Form 421

Part A: Housing Provider Information

Agency Name: MO Agency

Contact: Joe Smith_______ Phone #: 816-555-8888 Fax #: 816-555-8887

Estimated Completion Date: 1/01/2009

Total Estimated Project Cost: $18, 000 19,000

Total HOME funds requested from MHDC as reflected on the Work Write-Up:

(Include hard & soft costs only.

Do not include admin.) $ 12,000 $13,000 Other Contributions If applicable : $ 6,000

From: City of Happytown

Home’s Current Value: $50,000 Est. of After Rehab. Value: $70,000

Part B: Homeowner(s) Information

Name(s) : Dor a and Di ego Expl or er

Property Address: 888 Tr ee- l i ned Road

City: Happyt own Zip Code: MO County: Cl ay

Household #: 3 Monthly Gross Income: $ 32, 000 Part C: MHDC Only **Once approved, this signed request will be returned to you then the project may commence.

MHDC Reservation #: 680-08 Expiration Date: 02-05-09

Approved By: Lorenzo Rice Date: 12-05-08

Part D: Change Order Request **Include Change Order if Applicable

Please increase reservation by $1000 to cover water damage/mold.

Original Submission Or, x Change Order Request

-Attach copy of Amended Work Write-up/Change Order Extension Request

Cancellation

To Support This Request, We are Enclosing a Copy of Each of the Following: Copy of Application (Form #400)

Work Write-Up/Cost Estimate (Form #420) Environmental Review (Include a copy of the SHPO Clearance Letter & Flood Letter) All documentation used to calculate income (VOEs, Pay stubs & W2’s, Social Security Letters, Child Support Documentation,

STEP #8CLOSE-OUT PHASE


• The close-out phase begins when the contractor has completed all of the work and clean-up.

• The final walk through will be done by the agency’s inspector.

• Lead Clearance will be ordered (if applicable).


• Some cities have installed their own codes. A final codes inspection may be required by that city’s local code inspector.

• Always check with the city before and after a project to ensure all code regulations have been followed. Beyond Housing City of St. Louis Inspector


• In many instances, the “final inspection” does not turn out to be final.

• The Punch List (Form # 450) is a tool to track corrections that are needed. ▫ Itemized list of all items remaining to be

completed. ▫ Many agencies have their own form for this, which

is allowable.▫ Not a required document unless the contractor

has a history of poor quality work.


Punch List

Instructions: Check off completed items; if item is missing or unacceptable, do not check off location(s). ELECTRIC Location(s) ___ All outlets and switches work, correctly polarized. ___ GFCI Works ___ Plates are straight and level. ___ All outlet plates installed tight to drywall. ___ Panel Labeled for new circuits. ___ All lights have bulbs. _______________ ___ Batteries in smoke detectors. ___ Other ______________________________________ PLUMBING ___ All fixtures work; not chipped. ___ Fixtures are secure to wall or floor. ___ Tub is caulked. ___ Aerators/escutcheon plates installed. ___ All gas connections working. ___ Final permit inspection completed. ___ Other ______________________________________ ___ Other ______________________________________ HEATING - COOLING ___ System responds to thermostat. ___ Warranty and instructions provided. ___ Duct work free of debris. ___ Other _______________________________________ DOORS, WINDOWS __ All exterior doors weather-stripped. __ Doors checked for tightness, latch alignment and lock function. ___ Keys available. ___ Windows have locks that tightly close. ___ Window operates smoothly. ___ Screen in place. ___ Glass clean. ___ Other _______________________________________ FINISHES ___ Paint removed from hardware, glass. ___ Carpet tight


• Lead Risk Clearance

▫ Every house built before 1978 must pass a lead clearance test regardless of the work being performed!

▫ Must be performed by a certified risk assessor, paint inspector, or lead sampling tech.


• Should the clearance fail, the contractor must return to re-clean.

NOTE: The contractor will be responsible for the cost of any re-testing should the first test fail.


• Once the house has passed clearance, completion documentation will be signed by the homeowner:

▫ Certificate of Completion and Final Inspection (Form #455)

▫ Certificate of Release of Liens (Form #460)


Certificate of Completion and Final Inspection

Property Owner:____________________________________________________________________________ Property Address:___________________________________________________________________________ Final Inspection Date: _______________________ Total Amount of Contract:_______________________ Homeowner Certification: Construction work on my property has been satisfactorily completed in accordance with my contract with _____________________________________. Contractor Name __________________________________________________ __________________ Signature of Homeowner Date

Contractor Certification: Construction work has been satisfactorily completed and meets code and the rehabilitation work, including all change orders, and final cleaning that passed HUD lead clearance standards as outlined in the rehabilitation contract. I have obtained or prepared all Warranties or Release of Liens necessary for loan closing. I further certify that there are no unpaid claims for materials, supplies or equipment, and no claims of laborers or mechanics for unpaid wages in connection with the performance of this contract. _____________________________________________________ ___________________ Signature of Contractor Date

Certification of Final Inspection: Final inspection has been made of the property. The construction work has been satisfactorily completed in accordance with the contract including all (check applicable statement): The property rehabilitated meets all local codes, ordinances, zoning ordinances and rehabilitation standards. Local codes do not exist; therefore this property meets the Standard Housing Code The property was reconstructed and local codes do not exist; therefore the property meets the Standard Building

Code and the Model Energy Code. The entire house, if built before 1978, has passed a lead clearance test. Final Payment is authorized in the amount of $____________________. ________________________________________ __________________ Signature of Inspector / Agency Representative Date

Form 455


What if the homeowner refuses to sign the Certification of Completion?

Grievance Procedures:Disputes between the homeowner, agency and contractor can arise during the project.


• Grievance Procedures:▫ If the homeowner refuses to sign the final

acceptance, the agency may authorize full payment for those items which are undisputed and acceptable to all parties.

▫ A grievance by the homeowner or contractor must be filed with the agency in writing.

▫ Contact MHDC of the situation.▫ Arbitration may be required.▫ Make sure the LURA has been recorded!


• Once the project is completed, the property will have a three-year waiting period before the LURA can be released and they can apply for additional funds.

• They will have to re-apply and meet all qualifications.


It’s done!Now, the agency may request funds!

STEP #9REQUEST FOR PAYMENT --SUBMISSION OF THE DRAW PACKAGE


The Draw Request Package

• Include the following originals:▫ Certificate of Completion (Form #455)

▫ Certificate of Release of Liens & Warrant (Form #460)

▫ Draw Request (Form #465)▫ Agency Certification (Form #470)▫ After pictures of repairs

MISSOURI HOUSING DEVELOPMENT COMMISSION HOME Repair Program -- Draw Request

□ Partial Draw #___ □ Final Draw

Agency Name: _______________________________ Contact Person: _____________________________

Phone Number: ______________________________ Fax Number: _____________________________

Property Owner Name: ________________________ Total Project Cost: $_____________________________

Property Address: ____________________________________________________________________________

Activity Home Request Other Funds (if applicable)

Total Funds

1. Weatherization

$ $ $

Repair/Replacement

$ $ $

Environmental

$ $ $

Accessibility

$ $ $

Emergency Home Repair

$ $ $

Lead Risk Reduction

$ $ $

Soft Cost (Must equal amount on Work Write-Up)

$ $ $

2. Less Program Income, Less 10% retained for program

income administration: $___________ - _______ (10%) =

$ ( ) $ $

Subtotal $

3. Administration Actual costs as shown on Form #466 or,

10% of project cost - whichever is less.

$ $

4. Total this Request: (1 – 2) + 3=

$ Previously Requested:

$

Please Attach the Following: -Agency Certification (Form #470) -Certificate of Completion and Final Inspection (Form #455) -Release of Liens (Form #460) -After Pictures (these may be emailed in advance)

Wire the Requested Funds to: Name On Account: __________________________________ Bank Name: _______________________________________ Bank Location: _____________________________________ ABA Routing Number: ______________________________ Account Number: __________________________________ The Administrator certifies that they have verified this request for payment and that to the best of their knowledge and belief it is a true and accurate statement of the value of work performed and material supplied; that all work and material included in this request has been inspected by the Administrator and that such work has been performed or supplied in full, in accordance with the scope of work, the terms and conditions of the contract, and duly authorized deviations, submissions, alterations and additions all of which have been duly approved. The administration requested is a true reflection of approved administration costs including documented time and mileage reimbursements as reflected on the Administration Tracking Timesheet Form #466. The Administrator requests that MHDC disburse the amount indicated on Line 4. ______________________________________ _________________________________ Authorized Signature Date

Form 465

pp )

1. Weatherization

$ $ $

Repair/Replacement

$ 10,000 $ $ 10,000

Environmental

$ $ $

Accessibility

$ 5,000 $ $5,000


$ $ $

Lead Risk Reduction

$ 4,900 $ $4,900

Soft Cost $ 100 $ $ 100

2. Less Program Income

($ 0 ) ($ )

($ )

= Total Project Cost 3. AdministrationActual costs as shown on Form #466 or, 10% of project cost - whichever is less.

$ 20,000 $ $

$ 2,000

4. Total this Request (1-2) + 3

$ 22,000

Previously Requested

$ 0

Please attach the following: Agency Certification Certificate of Completion and Final Inspection Release of Liens After Pictures


ADMINISTRATION:Will be paid up to 10% of each project for

documented administration.

Allowable administration includes:• Salaries for documented hours spent on HOME• Mileage reimbursement• Supplies• HOME training & certifications


Administration Tracking (Form 466)

• Treat it as a “log in” sheet to track hours/mileage.

• Can by hand-written or typed to utilize the automatic calculation.

• Keep this in your “in house” file as it will be subject to audit.

• Use a new form each month for each project.• See back of handout for example.

Administration paid will be the lesser of: - 10% of the reserved project cost or - actual costs as reflected on item #4.

“Other costs”• Certain costs will have to be divided between the

total projects you complete during the current FY.

Example: A total of $500 was spent to attend the HeRO training (hotel, mileage, food). With this year’s allotment, you think you will complete 15 projects this year but will use a conservative “10”. Divide your $500 between the next 10 projects.


• If you’re already over your 10% allowed, don’t kill yourself documenting every penny!

• However, don’t “back” calculate.


All payments will be made by direct deposit.• All agencies will be signed up as an ACH Vendor.• Deposit agreements will be sent annually with

your Grant Agreements• Deposits will take approximately 3 full business

days.

QUESTIONS OVER FINAL STEPS:1. Your work write-up shows window replacement

for $3000. The homeowner decided later that they need a new furnace instead. The price is the same and it’s the same contractor. Is any action necessary?

2. Nothing tested “hot” on the lead assessment. Do you obtain a clearance once the project is completed?

3. You send in your final draw request and realize it’s $500 more than your original $20,000 reservation. What happens?

A REVIEW OF LEAD BASED PAINT RULES WHEN USING HOME FUNDS

LEAD BASED PAINT RULESWHEN USING HOME FUNDS:

• HUD’s Lead-Safe Regulations can be found in 24 CFR Part 35.

• This will contain:▫ Requirements for notification▫ Evaluations▫ Reduction and abatement regulations▫ “Final Rule” policies

LEAD BASED PAINT RULESWHEN USING HOME FUNDS:

Exemptions to 24 CFR 35:• Post – 1978 homes• Zero-bedroom units• Property certified as lead-based paint free and

the area will not be disturbed.• Property where lead-based paint was removed

(ie former abatement projects)• Disaster and accessibility only projects. Always

prior approve with MHDC first.

LEAD BASED PAINT:EVALUATION METHODS & QUALIFICATIONS


1. Visual Assessment: Consists of a visual search for cracking, scaling, peeling or chipping paint.This is only allowed on projects that will not exceed $5,000.

This assessment will not identify the presence of lead, only the danger. This may be performed by a certified risk assessor or HQS inspector trained in visual assessment.


2. Paint Testing:Entails testing surfaces with different pain history to determine if they contain lead-based paint, using methods such as an XRF analyzer or lab analysis.

Testing must be conducted by a state certified paint inspector or risk assessor.

3. Risk Assessment: (Most common)

a comprehensive investigation of a dwelling to identify lead-based paint hazards that include paint testing, dust and soil sampling, and a visual evaluation.

Risk assessment details are summarized in a written report with recommendations for actions.

A certified risk assessor must conduct this testing.


LEAD BASED PAINT:DOCUMENTATION& OVERVIEW

LEAD BASED PAINT:DOCUMENTATION

The following notifications to homeowners are required for all HOME funded projects:

1. “Protect Your Family from Lead in Your Home” and/or “Renovate Right” pamphlet

2. Notice of lead hazard assessment3. Notice of lead reduction activities4. Clearance report

*Retain copies in your “In House” files.

LEAD BASED PAINTPROCEDURAL OVERVIEW:

WHAT STEPS TO TAKE…

Mercer House Green Hills Community Action

LEAD BASED PAINT PROCEDURAL OVERVIEW:

Steps to Take:1. Find out when the house was built. Presume

lead in all pre-1978 houses.

Give homeowner:“Lead Hazard Information Pamphlet and Disclosure”


2. Lead-based paint testing/ assessment will be conducted by a qualified Agency Inspector or an outside certified lead-based trained inspector can be hired.

Give Homeowner:“Notice of Hazard Evaluation”


3. Determine the scope of work based on risk assessor’s recommendations.

Incorporate the lead repairs into your Work Write-Up.

Give Homeowner: “Notice of Lead Hazard Reduction Activity”


4. Establish contractor qualifications based on the work write up estimate.

If a lead paint hazard is found, and lead interim controls will be implemented into the project…


5. Supervise work so that “Safe Work Practices” are used:

Worksite is prepared/contained and occupants and their belongings are protected

Only allowable paint removal methods are used

Specialized cleaning is conducted to achieve clearance

LEAD BASED PAINT PROCEDURAL OVERVIEW:6. After the rehabilitation is completed, the

property must be inspected by a licensed lead paint inspector, risk assessor, or lead sampling technician.

The entire house must pass the lead clearance!

Give Homeowner: Copy of “Lead Clearance”


NOTE: The new EPA RRP rule will also apply but do not replace HUD’s Lead Safe Rule policies.


If Rehabilitation < $5,000Approach to Lead Hazard Do no harm.

Notification Yes

Lead Hazard Evaluation Visual Paint Testing of the entire house

Lead Hazard Reduction Repair surfaces disturbed during rehab.

-Safe Work Practices-Clearance Required

Ongoing Maintenance No

Options Presume lead-based paint. Use safe work practices on all surfaces.

Approach to Lead Hazard Identify and Control Lead Hazards

Notification Yes

Lead Hazard Evaluation Paint Testing & Risk Assessment on entire house

Lead Hazard Reduction Interim Controls

-Safe Work Practices Required-Clearance Required


Options Presume lead hazards. Use standard treatments.

If Rehabilitation $5,000 - $20,000


Approach to Lead Hazard Identify and Abate Lead Hazards

Notification Yes

Lead Hazard Evaluation Paint Testing & Risk Assessment on entire house

Lead Hazard Reduction Abatement Controls Only

-Safe Work Practices - Abatement Certified Contractors Required-Clearance Required


Options Presume lead hazards. Use standard treatments.

If Rehabilitation > $25,000



Abatement:• Be careful when combining programs!• Total federal funding (HOME funds, CDBG,

Rural Development Loans, Program Income, etc.) exceeding $25,000 will activate lead abatement requirements.


I am combining HOME with CDBG. How do I know when abatement has been

triggered?


Calculating level of rehabilitation assistance:

Lower of: 1. Total federal assistance or,(HOME, CDBG, RD, etc.)

2. Rehabilitation hard costs.(project cost less soft costs)


Relocation:• If the work site can not be contained and will create

a safety or health hazard, the agency may make the determination that relocation is required.

• Relocation is not required for persons 62 years or older or if the work can be detained.

• It is the homeowner’s responsibility to find a safe place in which to stay and be responsible for costs incurred—this will be their contribution to the project.

LEAD BASED PAINT:LEAD HAZARD REDUCTION METHODS

LEAD BASED PAINT:REDUCTION METHODS1. Paint stabilization - deteriorated paint on

exterior and interior surfaces must be stabilized through repairs, safe paint removal, and repainting.

Before and After ~ City of Cape Girardeau

LEAD BASED PAINT:REDUCTION METHODS

2. Treatment for friction or impact surfaces-conditions creating friction or impact with surfaced must be corrected Re-hanging doors Installing door stops Re-working windows


3. Treatment for chewable surfaces –If a child under six has chewed surfaces know to contain lead such as window sills, these surfaces must be enclosed or coated so they are impenetrable.


4. Lead-contaminated dust control –Horizontal surfaces that are rough or porous such as hardwood floors and stairs must be covered with a smooth, cleanable covering such as polyurethane.

Carpeting must be vacuumed using HEPA vacuums.

Kirksville Housing Authority


5. Lead-contaminated soil –interim controls include surface coverings

▫ Gravel▫ Bark▫ Sod

East Mo Action Agency


Abatement:Permanently removes lead-based paint and lead-based paint hazards by removing the paint and its dust.

Used for all projects that exceed $25,000 in federal funding.


• Abatement must be conducted by certified abatement workers who successfully completed a lead-based paint abatement worker course accredited by EPA.

LEAD BASED PAINT:REDUCTION METHODSIf deteriorated paint is present:

• Lead in dust (clearance and/or risk assessment) Floors < 40 micrograms/ft2 Interior window sills < 250 micrograms /ft2 Window Troughs < 400 micrograms /ft2

• Lead in soil (risk assessment) Play areas of bare soil < 400 parts per million (ppm) Other soils in yard < 1200 parts per million (ppm)


How big is a Microgram?• A penny weighs 2 grams. To get a microgram,

you would need to divide the penny into 2 million pieces.

• A microgram would be one of those two million pieces.

QUESTIONS ON LEAD.1. True or False: You will be putting a roof on a house built

in 1932. The couple is elderly and no projects take place inside the house. A clearance is not necessary.

2. True or False: You have a small job of installing a handicap toilet and widening two doorways in an 90-year old home. It’s only going to cost $2900. A clearance is not necessary.

3. The city received CDBG funds. You will be combing CDBG with HeRO funds for greater impact. You used $5,001 of CDBG but will use the entire $20,000 from HeRO. Will abatement be triggered?

4. The new EPA RRP rule allows certified renovators to perform a cleaning verification procedure which does not involve sampling and analysis. HUD has adopted this new policy as the EPA has more authority than them.

THEY SOLD THE HOUSE!!

SELLING BEFORE THE 3-YEAR ANNIVERSARY• Each project will have a LURA recorded with the

deed that will expire upon the 3-year anniversary.• Refinancing, renting out or selling the home

before the 3 years will require full payment of the subsidy received.

• LURAs are not subject to subordination and must remain in 2nd position.

Proceeds from loans are considered program income that is subject to additional federal regulations.

SELLING BEFORE THE 3-YEAR ANNIVERSARY• Recapture will come from the net proceeds of

the sale of the house.• Funds will be returned to the agency.▫ Must disburse these funds before additional

HOME funds can be disbursed.▫ Notify MHDC of payoff by submitting the

Certification of Payoff (Form #480).

▫ Payoff will be applied to your next draw.

Certification of Payoff Please forward the following to MHDC: 1. Certification of Payoff (Form #480) 2. Verification of Payoff (ie: copy of HUD1, copy of payoff check to agency, etc.) Agency Name: _ABC Action Agency of Missouri_ Contact Person: William Wonderful Homeowner Paying Off Subsidy: Name: Ima Homesellen Address: 123 Main Street, Yourtown, MO 65236 Payoff Amount (should equal subsidy received): $10,000 Homeowner Receiving Program Income: Please apply the above program income to the following project. Adjust the reservation accordingly. Homeowner Name: Rita Receiver HeRO Reservation Number: 730-09 Original Reserved Amount: $20,000 New Reservation Amount: $20,000 - $9,000 ($10,000 – $1,000) = $11,000 Original Reservation Amount Program Income – 10% for Admin. New Reservation Amount

** Remember to show these new amounts when submitting your next Draw Request.

□ Partial Draw x Final Draw Agency Name: _______________________________ Contact Person: _________________________

Phone Number: ______________________________ Fax Number: ________________________

Property Owner Name: ________________________ Total Project Cost: $________________________

Property Address: _______________________________________________________________________

Activity Home Request Other Funds (if applicable)

Total Funds

1. Weatherization

$ 10,000 $ $

Repair/Replacement

$ 10,000 $ $

Environmental

$ $ $

Accessibility

$ $ $


$ $ $

Lead Risk Reduction

$ $ $

Soft Cost (Must equal amount on Work Write-Up)

$ $ $

2. Less Program Income, Less 10% retained for program income

administration: $ 10,000 – 1,000 (10%) = 9,000

$ ( 9,000 ) $ 11,000 HOME

$ $

3. Administration (10%)

$ 1,100 $

4. Total this Request: (1 – 2) + 3=

$ 12,100 Previously Requested:

$ 0

Please Attach the Following: -Agency Certification -Certificate of Completion and Final Inspection -Release of Liens

Original Reservation $20,000

-Payoff $ 9,000

($10,000 – 10%)

= $11,000(New Reservation Amount)

SELLING BEFORE THE 3-YEAR ANNIVERSARY

NOTE:

• MHDC must track all program income and the individuals who pay off.

• Should these funds be returned a third time……it’s yours to keep!

Smith → Jones → AgencySells house Refinances. $$& proceeds are Funds aregiven to Jones given to agency.

AUDITING

AUDITING

On site visits will be:• Minimum of once annually• At least once per program year

Audits can also be based on:• Agency is new to program• Staff turnover• Excessive errors• Complaints

AUDITINGFile Review:• 20% of completed files• 10% for Environmental Compliance• Must comply with all HUD regulations• Notice will be given seven days prior to the audit

and will include a list of files that will be inspected.

• Files must be readily available and in order up on the inspector’s arrival

AUDITING• The files must include, at minimum,

everything noted on the In-House Stacking Sheet (Form #475)

Non-compliance may result in repayment of the HOME funds received.

AUDITING

• A copy of your annual Financial Audit Report must also be submitted▫ Can be emailed – [email protected]

• You may receive more than one request for this if your agency is participating in more than one MHDC program.▫ HeRO▫ CHDO▫ Trust Fund

IMPORTANT DATESMarch▫ 2010 FY Funds should be available▫ Sign and return Grant Agreement

June▫ FY 2011 NOFA & Application will be available on line

Mid October - November▫ Annual agency audits

September 10, 2010▫ Application for 2011 FY HeRO Funds Due

October 31, 2010▫ Any FY 2010 funds not reserved are subject to recapture.

Late December▫ Possible redistribution of recaptured funds▫ 2011 FY Allotments announced

CONTACT INFORMATIONSTAFF:Lorenzo Rice, Home Administrator• [email protected]• 816-759-6698

Tina Clavin Clubine, Sr. Housing Development Officer• [email protected]• 816-759-6816

WEBSITE:• www.mhdc.com

mailto:[email protected]�

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