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HomeMy WebLinkAboutResolutions - 2004.03.31 - 27392April 1, 2004 MISCELLANEOUS RESOLUTION #04083 BY: PLANNING AND BUILDING COMMITTEE, CHARLES E. PALMER, CHAIRPERSON IN RE: COMMUNITY AND HOME IMPROVEMENT DIVISION - 2004 HOME IMPROVEMENT PROGRAM GUIDELINE CHANGES TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Mr. Chairperson, Ladies and Gentlemen: WHEREAS the Community and Home Improvement Division has administered the Home Improvement Program since 1976 to improve approximately 250 single family owner occupied homes per year for low and moderate income persons in the 50 communities participating in the Oakland County Community Development Block Grant Program each year; and WHEREAS in Miscellaneous Resolutions #81237, #82233, #90201, #94082, #96151, #99122 and #00142 the Oakland County Board of Commissioners approved guidelines and amendments for administering the Home Improvement Program; and WHEREAS the current Home Improvement Program loan limitation guidelines require that the total property related indebtedness after improvement shall not exceed 100 per cent of the market value analysis obtained by the homeowner or market value as identified by the Oakland County Mortgage Application Acceleration Program (MAAP); and WHEREAS such market value analysis may exceed the actual sale price of a property and result in an over encumbrance thus jeopardizing Oakland County's Home Improvement lien; and WHEREAS the Community and Home Improvement Division recommends that the total property related indebtedness after improvement shall not exceed 95 percent of a) a market value as identified by the Oakland County MAAP or b) a current appraisal prepared by a Michigan licensed appraiser as provided by the homeowner ore) lowest value of a market analysis prepared by a licensed realtor as provided by the homeowner; and WHEREAS the current Oakland County Home Improvement eligibility requirements stipulate that property taxes can not be more than one year delinquent at the time of application; and WHEREAS changes in the State of Michigan property tax laws have reduced the maximum allowable delinquency period leading to tax foreclosure from 5 to 2 years; and WHEREAS this change has accelerated the foreclosure process and the potential for increasing the number of mortgage and tax foreclosures leading to the loss of program funds; and WHEREAS the Oakland County Community and Home Improvement Division recommends that property taxes shall be current at the time of application to better protect the homeowner and the program from tax or mortgage foreclosure situations; and WHEREAS the current scope of eligible home improvements preclude the installation of air conditioning and air purifying systems without a physician's medical justification; and WHEREAS the Oakland County Community and Home Improvement Division recommends that the scope of eligible home improvements be modified to include air conditioning and air purifying systems without formal medical justification; and WHEREAS the Oakland County Home Improvement Program prohibits homeowners from transferring ownership of their property to their spouse or children; and WHEREAS Oakland County Corporation Council has indicated that current Michigan and federal law enumerates that a transfer where the spouse or children of the borrower becomes an owner of the property by transfer or sale may not be prohibited; and WHEREAS the Oakland County Community and Home Improvement Citizens Advisory Council voted unanimously to approve the Home Improvement Program Guideline changes as reflected in Attachment A. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners approve the Home Improvement Program Guideline changes in Attachment A that decrease the total property related indebtedness after improvement from a maximum of 100% to a maximum of 95%; require property taxes to be current at the time of application; deem the installation of air conditioning and air purifying systems as eligible home improvements without formal medical justification and allows homeowners to convey ownership in their property to their spouse or children by transfer or sale in accordance with current federal and Michigan law. CHAIRPERSON, on behalf of the Planning & Building Committee, I move the adoption of the foregoing resolution. Planning & Building Committee Vote: Motion carried on unanimous roll call vote with Coleman absent OAKLAND COUNTY COMMUNITY AND HOME IMPROVEMENT DIVISION HOME IMPROVEMENT PROGRAM GUIDELINES AS OF MARCH 1, 2004 I. INTENT The intent of the Oakland County Home Improvement Program (OCHIP) is to improve single family owner occupied housing for low to moderate income persons and improve residential neighborhoods. This program is an equal opportunity program in accordance with federal regulations. Home Improvement Standards The Oakland County Home Improvement Program strives to meet HUD Section 8 requirements that a home be decent, safe, sanitary, meet minimum housing standards and be lead based paint safe as defined by the Michigan Department of Community Health. Form of Assistance to Homeowners Home Improvement Program funds pay for the cost of improvements for single family owner-occupied dwellings through an installment, deferred or combination loan program. II. APPLICATION PROCEDURE A. Loan applications are available at offices of local jurisdictions participating in the Oakland County CDBG program and at the Oakland County Community and Home Improvement Division, Bldg 38E, 1200 North Telegraph Road, Pontiac MI 48341-0414. Applications are also available on the Oakland County web site at: www . co . oakland.mi.us/chi B. Applicants must submit a completed loan application with required documents to the Oakland County Community and Home Improvement Division or to local communities that have staff to provide home improvement services. III. ELIGIBILITY REQUIREMENTS An 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 (CDBG) program is eligible to apply for a home improvement loan subject to the following conditions: 1 A. Eligible applicants are persons owning or buying their home under a mortgage or land contract. If buying under a land contract, the deed holder must authorize the lien against the property. B. The property to be improved must be the primary residence of the applicant. Properties purchased for resale or rental purposes are not eligible. C. Property taxes must be current. D. An applicant may secure only one loan through this program in any five-year period. IV. LOAN LIMITATIONS The total property related indebtedness after improvement shall not exceed 95 per cent of the: A. Market value as identified by the Oakland County Mortgage Application Acceleration Program (MAAP); or B. Current appraisal prepared by a Michigan licensed appraiser and provided by the homeowner; or C. Lowest value of a market analysis prepared by a licensed realtor and provided by the homeowner. Total indebtedness is determined as a sum of the existing property debt and that which is incurred by the installment and/or deferred loan. V. ELIGIBLE IMPROVEMENTS Examples of home improvement work that can be financed with a home improvement loan may include, but are not limited to, the following: wells, septic systems, structural repairs, plumbing, electrical, heating, roofs, masonry, energy saving items, siding, windows, doors and barrier free access. VI. INELIGIBLE IMPROVEMENTS Examples of work that cannot be financed include, but are not limited to: special assessments, patios, fencing, additions, accessory buildings, condominiums and mobile home improvements. VII. INCOME REQUIREMENTS The annual income is the gross amount of income of all adult (18 years of age or older) household members that is anticipated to be received during the coming 12- month period, as defined in HOME Regulation 24 CFR, Part 5 and the Technical Guide for Determining Income and Allowances for the HOME Program. 2 A. Income eligibility for the Home Improvement Program is determined by using the current HUD Section 8 income limits as reflected in Appendix I, Table 1. This table is used to determine income eligibility based on household size and gross household income. B. Home Improvement Program income limits will be periodically updated in accordance with HUD revisions. VIII. LOAN TERMS AND CONDITIONS The Home Improvement Program provides 3% interest installment loans, 0% interest deferred loans or a combination of the two. The proportion of the deferred and/or installment loan is based on household size, and adjusted income, as indicated in Appendix I, Table 2. This table is adjusted annually in accordance with HUD Section 8 income limit revisions. A. INSTALLMENT LOAN 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 a maximum of twenty (20) years, depending on the amount of the loan. Minimum monthly payments will be $20.00 per month. B. DEFERRED LOAN The principal sum of a Deferred Loan is to be repaid at a future time and shall become due and payable when the homeowner no longer lives on the premises. There are no payments or interest charged on the principal. C. DUE AND PAYABLE TERMS The Installment and the Deferred portions shall become due and payable under the following terms and conditions. 1. The Mortgagor transfers any interest in the property, except as prohibited by law. 2. The Mortgagor moves, rents, or leases the property. 3. Upon death of the Mortgagor/s. 4. Failure of the Mortgagor to maintain adequate fire and hazard insurance and flood plain insurance, where applicable, to cover the debt incurred by the loan and any pre-existing property debt. IX. INSPECTIONS AND SPECIFICATIONS Oakland County Community and Home Improvement staff complete comprehensive home inspections and specifications, monitor the construction through completion, recommend contractor payments and ensure that municipal, state and federal requirements are met. 3 X. BIDS A. Contractors qualified for the OCHIP Contractor List are permitted to bid projects through a formal bidding process. A minimum of three (3) contractors, including one woman or minority owned business enterprise (W/MBE), are invited to bid each contract on a rotating basis. The bid process meets or exceeds local and federal procurement requirements. B. Bids are awarded to the lowest responsible bidder. A homeowner may select a contractor whose bid is higher providing the homeowner pays the difference between the lowest bid and selected bid. XI. CONTRACTS A. Home Improvement contracts are between the homeowner and the contractor and must be signed by both parties prior to work being initiated. B. The contract may not exceed the maximum loan amount of $18,000. Exceptions may be granted based on extenuating circumstances determined by Oakland County Home Improvement Program staff. C. A $2,000 contingency amount is available for unforeseen problems and must be authorized by the homeowner and Oakland County Home Improvement Program staff. XII. MORTGAGE AND NOTE A. Home improvement loans are secured by a mortgage. A mortgage is a lien placed on the property to guarantee repayment of the loan. B. The mortgage is recorded with the Oakland County Clerk Register of Deeds. C. The note explains the repayment terms and conditions of the loan. 4 i / In Testimony Whereof, I have hereunto set my hand and affixed the seal, of the County of Oakland at Pontiac, Michigan this 1st day of April, 2004. G. William Caddell, County Clerk Resolution #04083 April 1, 2004 Moved by Potter supported by Zack the resolutions on the Consent Agenda, be adopted (with accompanying reports being accepted). Vote on resolutions on the Consent Agenda: AYES: Coulter, Crawford, Douglas, Hatchett, Jamian, Knollenberg, KowaII, Law, Long, McMillin, Middleton, Moffitt, Moss, Palmer, Patterson, Potter, Rogers, Scott, Suarez, Webster, Wilson, Zack, Bullard. (23) NAYS: None. (0) A sufficient majority having voted therefore, the resolutions on the Consent Agenda were adopted (with accompanying reports being accepted). STATE OF MICHIGAN) COUNTY OF OAKLAND) I, G. William Caddell, 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 April 1, 2004 with the original record thereof now remaining in my office.