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HomeMy WebLinkAboutResolutions - 1997.02.13 - 25021. February 13, 1997 MISCELLANEOUS RESOLUTION 197011 BY: PLANNING AND BUILDING COMMITTEE, CHARLES E. PALMER, 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 (HIP) since 1976 to rehabilitate single family owner occupied housing for low and moderate income persons and improve residential neighborhoods in those communities participating in the Oakland County Community Development Block Grant (CDBG) program; and WHEREAS in Miscellaneous Resolutions #8I237, #82233, #90201, #94082 and #96151 the Oakland County Board of Commissioners approved guidelines and amendments for administering the Home Improvement Program; and WHEREAS deferred and installment loans of up to $12,000 are made available to homeowners through the Home Improvement Program for necessary home improvements; and WHEREAS these loans are secured by executing a mortgage and placing a lien on the property; and WHEREAS the Community Development Division must determine that there is enough equity in the property to secure this mortgage; and WHEREAS the current method of determining if there is enough equity in the property is to identify the current market value of the property and deduct the existing mortgages and liens against the property; and WHEREAS the current method of determining the current market value of the property is to double the State Equalized Value (SEV) or request that the homeowner obtain a market value analysis of the property; and WHEREAS the Oakland County Equalization Division has indicated that there is a delay of approximately eighteen months to two years for the SEV to reflect current sales data; and WHEREAS doubling the SEV does not provide a reasonable assessment of the current value of the property and requesting a market value analysis is time consuming and may cost the homeowner a realtor's or appraiser's fee, and WHEREAS to establish a more reasonable property value and reduce the burden currently placed on homeowners to obtain a market value analysis, the Oakland County Community Development Division proposes to multiply the SEV by a factor determined by the Oakland County Equalization Division; and WHEREAS the factor is based on annual median sales and assessed values; and WHEREAS the factor will be obtained annually from the Oakland County Equalization Division; and WHEREAS if homeowners are not satisfied with determining the reasonable market value of their property by multiplying the SEV by the community's factor, they will be afforded the opportunity to obtain and submit a market value analysis to establish a reasonable value of their property; and WHEREAS the Oakland County Community Development Division Citizens Advisory Council by a vote of ten to two recommends that the existing Loan Limitations as outlined in the current Home Improvement Program Guidelines be changed to reflect multiplying the current SEV by the factor as determined by the Oakland County Equalization Division to annually establish a reasonable current market value as outlined in Attachment A. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners agrees to change the existing Oakland County Community Development Division Home Improvement Program Guidelines to reflect multiplying each homeowner's State Equalized Valuation by a factor established annually by the Oakland County Equalization Division to establish a reasonable fair market value for each homeowner's property. BE IT FURTHER RESOLVED that if homeowners do not accept this method of establishing a fair market value for their propertY, they will be afforded the opportunity of providing a market value analysis to the Oakland County Community Development Division. CHAIRPERSON, on behalf of the Planning and Building Committee, I move the adoption of the foregoing resolution. PLANNING AND BUILDING COMMITTEE /, clwpdocs\ resoluti\multfac.wpd ATTACHMENT A CURRENT III. 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. RECOMMENDED REVISIONS III. LOAN LIMITATIONS The total property related indebtedness after improvement, shall not exceed a market value analysis or the State Equalized Value (SEV) multiplied by a factor determined annually by the Oakland County Equalization Division. The factor is based on annual median sales and assessed values computed for each community. Total indebtedness is determined as a sum of the existing property debt and that which is incurred by the installment and/or deferred loan. 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 payment loan program. .Installment Loan A loan in which the principal and interest must be repaid on a scheduled monthly basis. Installment loan payments are calculated for 20 year repayments. 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 1 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 loan through this program in any five year period. III. LOAN LIMITATIONS The total property related indebtedness after improvement, shall not exceed a market value analysis or the State Equalized Value (SEV) multiplied by a factor determined annually by the Oakland County Equalization Division. The factor is based on annual median sales and assessed values computed for each community. Total indebtedness is determined as a sum of the existing property debt and that which is incurred by the installment and/or 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 2 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, mobil home improvements, air conditioners and air cleaners. Air conitioners and/or air cleaners may be installed if applicant provides documentation from a physician that these items would provide a medical benefit to a resident of the home. VII. INCOME ELIGIBILITY FOR INSTALLMENT AND DEFERRED LOANS A. Gross household income is the annual gross income from all sources of all residents of a housing unit who are 18 years of age or older. The gross household income is the - amount determined by projecting all income (including gross wages, salaries, dividends, rent,room and board, interest, public assistance payments and pensions) of all eligible residents. 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. Exceptions to the above are as follows: 1. Income of full-time students who are under 23 years of age. 2. Income of non-family member who is a roomer and 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 member 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: 3 1. Applicant has permanently retired. 2. Applicant has received a permanent medical leave. C. Income eligibility for the Home Improvement Program is determined by using the 1996 HUD Section 8 income limits as reflected in Table 1. This table is used to determine income eligibility based on family size and gross household income. Home Improvement Program income limits are periodically updated in accordance with HUD revisions. TABLE Maximum Gross Household Income Family Size (HUD Section 8 Income Limits) 1 $ 28,050 2 32,050 3 36,050 4 40,100 5 43,300 6 46,500 7 49,700 8 52,900 HUD Section 8 Income Limits Revised 1/29/96 D. The Home Improvement Program provides 3% interest installment loans, 0% interest deferred payment loans or a combination of the two. The attached table indicates by family size and income amount the proportion of the loan that is deferred and/or installment. For example, a family of four with a gross household income of $36,0b0 would have a loan that was 80 percent installment and 20 percent deferred. This table is adjusted periodically in accordance with HUD Section 8 income limit revisions. E. The maximum amount of a contract may not exceed $12,000. The maximum amount of an Installment Loan, a Deferred Loan or a combination shall not exceed $12,000 plus a ten percent (10 90 contingency. 4 OAKLAND COUNTY HOME IMPROVEMENT PROGRAM INSTALLMENT/DEFERRED LOAN REPAYMENT SCHEDULE (Installment Loan Payments are calculated for 20 year repayment. FAMILY VERY LOW Installment Installment Installment Installment Installment LOW SIZE (Maximum) 50% 60% 70% 80% 90% MAXIMUM NO PAYMENT 1 517,550 517,551 522,801 523,801 524,801 525,900 526,951 or to to to to to to Less 522,800 523,800 524,800 $25,900 $26,950 $28,050 2 520,050 520,051 $26,051 $27,251 S28.451 $29,651 L530,851 Or to to 10 to to to Less 526,050 $27,230 528,450 529,650 $30,850 $32,050 3 522,550 522,551 529,301 530,651 $32,001 $33,351 $34,701 1 or to to to to to to Less 529,300 530,650 $32,000 $31,350 $34,700 $36,050 4 525,050 $25.051 532,576 534,081 535,586 537,091 538,596 or to to to to to to Less $32,575 534,080 $35,585 $37,090 $38,595 $40,100 5 527,050 $27,051 $35,176 536,801 538,426 $440,051 541,676 or to to to to to to Less $35,115 536,800 538,425 540.050 $41,675 $43,300 6 $29,050 $29,051 S37,776 $39,521 541,266 $443,011 $44,756 Or to to to to 11/ to Less $37,775 539,520 $41,265 543,010 544,755 546,500 7 $31,050 $31,051 540,376 $42,241 $44,106 $445,971 $47,836 or to to to to to to Less S40.375 $42,240 $44,105 545,970 547,835 549,700 s 533,050 $333,051 $42,976 $44,961 $46,945 $48,931 550.916 or to to to to to to Less $42,975 $44,960 $46,945 548.930 $50,915 552,900 - 9 534,052 534,053 S45,097 S47,306 549,515 551,723 553,932 or to to to to to to Less 545,096 $47,305 $49,514 551,722 $53,931 $56,140 10 535,070 535,071 $47,210 $49,638 552,066 $54,493 • $56,921 or to to to to to to Less $47,209 $49,637 $52,065 $54,492 $56,920 $59,348 11 539,073 539,079 $50,021 552,209 554,397 - $56,585 $60,961 or to to to to to Less $,50,020 $52,208 $54,396 $56,584 $58,773 12 541,082 $41,083 $53,424 $55,892 $58,360 $60,829 563,297 Or to tO 10 JO to 10 Less $53,423 $55,891 $58,359 560,828 563,296 565,764 - 13 543,086 $43,087 $56,030 558,619 $61,207 563,796 $66,384 Or to to to to to to Less $56,029 $58,618 $61,206 $63,795 566,383 $68,972 14 545,090 545,091 558,636 $61,344 564,053 566,762 569,471 Or to tO 10 to to to Less $58,635 $61,344 $64,053 $66,762 $69,471 $72,180 5 F. A ten percent (10%) contingency of the contract amount is permitted, i.e. $1,200. Contingency funds shall be used to fund additional work that is deemed to be necessary through the rehabilitation process. G. 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 homeowners ability to pay. 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 6 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 May 1, 1994. Revised June 27, 1996. Revised December 27, 1996. GAL -MANUAL1 7 5 Itterson. rooks 04V41... D. Allen, County Clerk Resolution #97011 February 13, 1997 Moved by Garfield supported by Jensen the resolution be adopted. AYES: Huntoon, Jacobs, Jensen, Johnson, Kaczmar, Kingzett, Law, McPherson, Millard, Moffitt, Obrecht, Pernick, Powers, Taub, Wolf, Amos, Coleman, Devine, Dingeldey, Douglas, Garfield. (21) NAYS: None. (0) A sufficient majority having voted therefor, the resolution was adopted. HEREBY 49 FOREGOING RESOLUTION 4410.01nn c9. / 7 - 7 ounty Executive Date ,63,p adivo _ 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 February 13, 1997 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 13th day.of FebruAzy 1997.