HomeMy WebLinkAboutResolutions - 1994.03.23 - 24188-
PUBLIC SERVICES COMMITTEE
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March 24, 1994
MISCELLANEOUS RESOLUTION #94082
BY: PUBLIC SERVICES COMMITTEE, LAWRENCE A. OBRECHT, CHAIRPERSON
IN RE: COMMUNITY DEVELOPMENT DIVISION - HOME IMPROVEMENT PROGRAM
GUIDELINE CHANGES
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Mr. Chairperson, Ladies, and Gentlemen:
WHEREAS, the Community Development Division has administered the Home
Improvement Program since 1976 to rehabilitate single family owner occupied housing
for low and moderate income persons and improve our residential neighborhoods; and
WHEREAS, in Miscellaneous Resolutions #81237, #82233, and #90201, the
Oakland County Board of Commissioners approved guidelines for administering the
Home Improvement Program; and
WHEREAS, annual rates of inflation and rising construction costs have reduced
the purchasing power of the $9,000 (plus 10% contingency) maximum home
improvement loan amount set in 1990 and have eroded the Program's capacity to bring
a house to a decent, safe and sanitary condition as required by the U.S. Department of
Housing and Urban Development (HUD); and
WHEREAS, costs incurred to comply with additional federal and local
rehabilitation requirements have further reduced the scope of work that can be
accomplished under the current $9,000 (plus 10% contingency) maximum loan amount;
and
WHEREAS, the Community Development Division recommends that the current
maximum loan amount of $9,000 (plus 10% contingency) be increased to $11,000 (plus
10% contingency) as a means to offset negative economic and regulatory influences that
have eroded the program's housing rehabilitation capacity; and
WHEREAS, the Oakland County Community Development Citizens Advisory
Council has unanimoulsy approved by a 10-0 roll call vote raising the maximum loan
amount for each home improvement project from $9,000 (plus 10% contingency) to
$11,000 (plus 10% contingency).
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of
Commissioners approve the Home Improvement Program Guideline changes which
increase the maximum home improvement loan amount to $11,000 (plus 10%
contingency).
CHAIRPERSON, on behalf of the Public Services Committee, I move the
adoption of the foregoing resolution.
HIP.RES (kjf;2/18/94)
OAKLAND COUNTY COMMUNITY DEVELOPMENT
HOME IMPROVEMENT PROGRAM GUIDELINES
I. INTENT AND DEFINITIONS
The intent of the Home Improvement Program is to rehabilitate single family owner-
occupied housing for low and moderate income persons and improve residential
neighborhoods.
Standards of Rehabilitation
Housing rehabilitation standards must meet HUD Section 8 requirements that a home
be decent, safe and sanitary or meet minimum housing code standards.
Form of Assistance to Homeowners
Home Improvement Program funds are to be used to pay for the cost of improvements
for single family owner-occupied dwellings through an installment and/or deferred loan
program.
Installment Loan
A loan in which the principal and interest must be repaid on a scheduled monthly basis.
Deferred Loan
A loan in which the principal only is to be repaid at some future time. There are no
installment payments and no interest is charged on the principal.
II. ELIGIBILITY REQUIREMENTS
Any Oakland County homeowner, who lives in his/her home and resides within the
boundaries of a local jurisdiction that is participating with the County in the Community
Development Block Grant program is eligible to apply for a housing rehabilitation loan
subject to the following conditions:
A. Person(s) owning or buying their home under a mortgage or land sales contract
are considered to be eligible applicants.
B. The property to be rehabilitated must be the primary residence of the applicant.
Properties purchased for resale or rental purposes are not eligible.
C. Property taxes may not be more than one year delinquent.'
D. An applicant may secure only one load through this program in any five year
period.
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LOAN LIMITATIONS
The total property related indebtedness after improvement, shall not exceed the State
Equalized Value doubled or a market value appraisal. Total indebtedness is determined
as a sum of the existing property debt and that which is incurred by the installment and
deferred loan.
IV. APPLICATION PROCEDURE
A. Loan application forms are available at offices of local jurisdictions participating
with the County in Community Development activities and at the Oakland County
Community Development Division, 1200 North Telegraph Road, EOB Room 112,
Pontiac, Michigan 48341-0414.
B. Applicants must submit a completed loan application with required documents to
the Oakland County Community Development Division or to local communities that
have staff to provide rehabilitation services.
V. ELIGIBLE IMPROVEMENTS
Examples of rehabilitation work that can be financed with a rehabilitation loan may
include, but are not limited to, the following: plumbing, wells, septic systems, structural
repairs, electrical work, heating, replacement of roofs, masonry work, energy items and
to provide barrier-free access for handicapped and elderly.
VI. INELIGIBLE IMPROVEMENTS
Examples of rehabilitation work that cannot be financed with a rehabilitation loan may
include, but are not limited to, the following: special assessments, patios, fencing,
additions, accessory building, mobile home improvements, air conditioners and air
cleaners.
VII. INCOME ELIGIBILITY FOR INSTALLMENT AND DEFERRED LOANS
A. Gross income means the annual gross income from all sources of all residents
of a housing unit who are 18 years of age or older with the following exceptions:
1. Income of full-time students who are under 23 years of age.
2. Income of non-family member who is a roomer or boarder.
B. If any eligible family member has become unemployed or has resigned from
employment for a period of six months prior to the application of a loan, the gross
income of the family shall be computed at the rate of pay immediately prior to the
layoff or resignation period. The period of unemployment may be considered in
determining gross income of the applicant with the following exceptions:
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1. Applicant has permanently retired.
2. Applicant has received a permanent medical leave.
C. Income eligibility is determined by the 1993 HUD Section 8 income limits as
reflected in Table 1. This table is used to determine income eligibility for the
Home Improvement Program based on family size and gross household income.
Home Improvement Program income limits are periodically updated in accordance
with HUD revisions.
TABLE I
Family Size Maximum Gross Household Income
(HUD Section 8 Income Limits)
1 $26,150
2 29,900
3 33,600
4 37,350
5 40,350
6 43,350
7 46,350
8 49,300
HUD Section 8 Income Limits Revised 5/1/93
D. The Home Improvement Program provides 3% interest installment loans, 0%
interest deferred payment loans or a combination of the two. The proportion of
installment and deferred loan is based on the applicant's Adjusted Household
Income.
The adjusted Household Income is the amount determined by projecting all
income (including gross wages, salaries, dividends, rent, interest, public assistance
payments and pensions) of all eligible residents less $1,000 per family member.
Social Security benefits, aid to dependent children and child support payments
when received by the applicant for minor children is considered income and will
be used in determining eligibility for the applicant.
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E. The Adjusted Income Ranges presented in Table 2 are used to determine the
percent of the installment and/or deferred loan. These ranges are based on the
1993 HUD Section 8 income limits as adjusted for family size.
This table is adjusted periodically in accordance with HUD Section 8 income limit revisions.
Adjusted Income
Ranges
TABLE 2
Percent of
Installment Percent of
Loan Deferred Loan
$21,450 and under 0% 100%
21,451 to 23,450 50% 50%
23,451 to 25,450 60% 40%
25,451 to 27,450 70% 30%
27,451 to 29,450 80% 20%
29,451 to 31,450 90% 10%
31,451 and over 100% 0%
F. The maximum amount of a contract may not exceed $11,000. The maximum
amount of an Installment Loan, a Deferred Loan or combination shall not exceed
$11,000 plus a ten percent contingency.
G. A ten percent (10%) contingency of the contract amount is permitted, i.e. $1,100.
Contingency funds shall be used to fund additional work that is deemed to be
necessary through the rehabilitation process.
H. The loan will be secured by a mortgage.
VIII. TERMS OF AN INSTALLMENT LOAN
A. Homeowners who qualify for an Installment Loan will pay interest at a rate of 3%
per annum on the unpaid balance of the loan. Monthly payments are based on
a term of three (3) to a maximum of twenty (20) years, depending on the amount
of the loan and the homeowner's ability to pay.
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B. Minimum monthly payments will be $20.00 per month.
C. In the event that the applicant moves and/or rents the rehabilitated property, the
mortgage becomes due and payable at that time.
D. Upon death of a loan recipient, or the conveyance of any interest in the property,
the outstanding balance of the mortgage shall become due and payable on such
terms and conditions as the County shall designate.
IX. TERMS OF A DEFERRED LOAN
A. The principal sum of a "Deferred Loan" shall become due and payable under the
following terms and conditions:
1. The Mortgagor transfers any interest in the property.
2. The Mortgagor moves, rents or leases the property
3. The death of the Mortgagor.
4. Failure of the Mortgagor to maintain adequate fire and hazard insurance
to cover the debt insured by the loan and any pre-existing property debt.
B. Upon occurrence of any of the above conditions, the outstanding balance of the
mortgage shall become due and payable on such terms and conditions as the
County shall designate.
Adopted by the Oakland County Board of Commissioners, July 23, 1981. Revised August 5,
1982 and March 15, 1994.
HIPGUIDE (kjf 2/21/94)
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Resolution #94082 March 24, 1994
Moved by Obrecht supported by McPherson the resolution be adopted.
AYES: Huntoon, Jensen, Johnson, Kaczmar, Kingzett, Law, McPherson,
Miltner, Oaks, Obrecht, Palmer, Pernick, Powers, Schmid, Taub, Wolf, Aaron,
Crake, Dingeldey, Douglas, Garfield, Gosling. (22)
NAYS: None. (0)
A sufficient majority having voted therefor, the resolution was adopted.
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I HEREB,TROIVer E FOREGOING RESOLUTION
Date
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the
foregoing resolution is a true and accurate copy of a resolution adopted by the
Oakland County Board of Commissioners on March 24, 1994 with the original record
thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the
County of Oakland at Pontiac, Michigan this 24th day oeRbArch 1994.
LyiTE. Allen, CriWy-trItrik
L. Brooks Patt‘rsor% County Executive