HOME Investment Partnership Program 1 Martin O'Malley GOVERNOR Anthony G. Brown LT. GOVERNOR...

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HOME Investment

Partnership Program

Martin O'MalleyGOVERNOR

Anthony G. BrownLT. GOVERNOR

Raymond A. SkinnerSECRETARY

Clarence J. SnuggsDEPUTY SECRETARY

Presented by:

-Dale Quisgard, State of Maryland , DHCD HOME Program Manager-Susan Devlin, Habitat for Humanity Maryland, Executive Director-Robert Rommel, State of Maryland , DHCD HOME Program Rehabilitation Inspector

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The HOME program began in 1990 and has funded over

1 million units of affordable housing since inception

Objectives Provide decent affordable housing to lower-income households, Expand the capacity of nonprofit housing providers, Strengthen the ability of state and local governments to provide

housing, and Leverage private-sector participation.

Program Regulations The HOME Program regulation is at 24 CFR Part 92 Additional guidance, including notices can be found at

http://www.hud.gov/offices/cpd/affordablehousing/library/

HOME

Eligible Jurisdictions

Maryland offers HOME funds to applicants throughout the State with the exception of the following entitlement jurisdictions which have their own

HOME ProgramAnne Arundel County, Baltimore City, Baltimore County, Harford County, Howard County Montgomery County and Prince George’s County

Exceptions can be made on a case to case basis to fund projects within these jurisdictions.3

Each fall funds are awarded under the “HOME Initiatives”

competitive round. Sub-Recipients may apply for funding through this round to finance programs, projects and activities that fill a need not met by other DHCD housing programs.

Potential homebuyers seeking assistance , such as closing cost and/or down payment assistance, will access funds directly from Sub-Recipients who have been awarded funds through the HOME Initiative for this activity.

ACCESSING HOME FUNDS

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Applicants seeking homeowner rehabilitation will have

access to funding directly through a local sub-recipient in their jurisdiction or, if there are no sub-recipients in their jurisdiction, directly through DHCD Special Loan Programs.

Applicants seeking funds for housing development may apply for funding through DHCDs Multi-Family Yearly Funding Round(s)

ACCESSING HOME FUNDS (Continued)

Homebuyer Acquisition Assistance

Owner-Occupied Rehabilitation/Replacement Housing

Rental Housing

Tenant-Based Rental Assistance (TBRA)

Eligible HOME Activities

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Homebuyer Acquisition Assistance

Eligible Activities:

Down payment and closing cost assistance Interest Rate Buy downs

Owner Requirements:

Low income – Household Income

(<80% of AMI) Must occupy home as primary residence

Frederick County

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Homebuyer Acquisition Assistance (Continued)

Eligible Properties:

1-4 Unit dwelling, condominium, cooperative

or manufactured home Must meet property standards prior to closing Purchase price <95% of the area median purchase

price

Affordability Period:< $ 15,000 5 years

$ 15,000 - $ 40,000 10 years

>$ 40,000 15 years

Garrett County

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Homebuyer Acquisition Assistance (Continued)

Application Process:

Homebuyers will apply directly to a Sub-Recipient, who has been awarded funds from DHCD Home Initiatives and is administering a Homebuyer Assistance Program.

Sub-Recipient must obtain environmental review approval from State prior to homebuyer entering into any binding contracts/commitments. When a property has been identified, the environmental package is forwarded to DHCD for approval/sign off.

Upon environmental approval Sub-Recipient may continue to process application.

Cecil County

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OUR EXPIERENCE WITH THE STATE HOME

PROGRAM

Susan Devlin

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Our Mission

Habitat for Humanity Maryland is dedicated to enhancing the effectiveness of Maryland Habitat affiliates through advocacy, resource development, training and disaster services. Together

we increase our capacity to transform the lives and communities of our low-income neighbors using appropriate housing

solutions.

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Our Purpose

Fundraise on a large scale for 15 Maryland affiliates Advocate for affordable housing at the local, state and federal

level Provide training and technical assistance to affiliates Assist during times of disaster in areas in need across

Maryland

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Housing Solutions

New Construction – Ground up construction

of townhouses, single family houses, and

condos

Rehabilitation – Rehabilitation of vacant,

distressed properties

Weatherization/Repair – Painting, accessibility improvements, roof replacement, foundation

work, mold remediation and increasing energy

efficiency by adding insulation, storm doors, etc.

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History

Since 2009, Habitat for Humanity Maryland has received $225,000 in HOME Funds.

Funds have been used for

down payment and

closing cost assistance

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HOME Funds Used by 8 Habitat Affiliates

Habitat Montgomery Serving Montgomery County*

Habitat Frederick Serving Frederick County*

Habitat Choptank Serving Talbot* and Dorchester* Counties

Habitat Wicomico Serving Wicomico County*

Habitat Patuxent Serving St. Mary’s* and Calvert Counties

Habitat Chesapeake Serving Anne Arundel, Howard, Baltimore Counties and Baltimore City*

Sandtown Habitat Serving Baltimore City Neighborhood - Sandtown-Winchester*

Washington Habitat Serving Washington County

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Families Served

59 Habitat families have benefited from

HOME Funds since 2009 and An additional 12 families are expected to

benefit by the end of 2012.

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Application Process - Habitat for Humanity Maryland

Submits a joint application representing all interested and eligible affiliates

Provides guidance and oversight to participating affiliates Reviews all required documents prior to submitting to DHCD Manages all aspects of grant management for

Affiliates

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Application Process - Affiliates

Determine affiliate need Provide addresses of projects to be submitted with application Provide homeowner education Work with title company to have required documents at

closing Submit documents to Habitat Maryland for review and

submission

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Distribution of Funds Affiliates submit addresses that will close during the grant

period Estimate down payment/closing cost assistance needed Habitat Maryland distributes the awarded funds in an

equitable manner

Application Process:

If the homeowner lives in an area served by a participating Sub-Recipient then they will apply directly to that Sub-Recipient. If the homeowner is in an area where there is no Sub-Recipient then they will apply directly to DHCD’s Special Loans Program

DHCD Loan underwriter determines if the applicant and the home meet the program criteria

The Underwriter then assigns the case to a rehabilitation specialist who inspects home to determine the amount of work required and the estimated cost for such work.

Owner-Occupied Rehabilitation/Replacement Housing

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Application Process (Continued):

The loan underwriter continues to process case - continuing to collect any additional items needed. Once the estimated cost for work is received the underwriter will determine if funding is feasible.

As with all HOME/Federally funded programs an environmental review and approval must be received prior to entering into any binding agreement (i.e. Construction Contract, Loan Commitment)

Owner-Occupied Rehabilitation/Replacement Housing (Continued)

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Eligible Properties:

Property must be the owner’s principal residence 1-4 Unit dwelling, condominium, cooperative or

manufactured home. After rehabilitation value <95% of area median

purchase price for the area, as published by HUD Loan cannot exceed maximum subsidy requirements

determined by HUD Units must meet applicable property standards upon

completion of rehab

Owner-Occupied Rehabilitation/Replacement Housing (Continued)

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Owner-Occupied Rehabilitation/Replacement

Housing

Eligible Activities/Rehabilitation

Rehab of Existing Home to Code – which may include the following:

Essential ImprovementsEnergy related improvementsIncipient repairs and general property improvements of a non-

luxury natureFor pre-1978 properties, lead based paint rules @ 24 CFR part

35, Subpart J apply All code items must be addressed

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Owner-Occupied Rehabilitation/Replacement Housing (Continued)

Replacement HousingReplacement of existing home is permitted when existing home is

determined, by the State DHCD Inspector, to be beyond repair or too costly to repair. (As part of approval process for replacement homes all senior lien holders must provide written approval of the demolition of the existing house)

Eligible applicants must have owned and occupied the home as their primary residence for at least five years prior to applying.

The replacement housing will be of modest design and materials.

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Owner-Occupied Rehabilitation/Replacement Housing (Continued)

Replacement Housing

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Owner-Occupied Rehabilitation/Replacement Housing

The Rehabilitation/Replacement

Housing Inspection

Rob Rommel

Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

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WHY AM I HERE/WHAT AM I LOOKING FOR?Major code violations Structure issuesWeatherization issuesMinimum livable codesSanitization issuesHealth and SafetySlip trip and falls

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

THE INITIAL ASSESSMENT

In order to help with the initial assessment of the home and what repairs may be needed the homeowner is asked several questions

regarding their home:How old is your home and how long have you lived there?Have you done any major renovations?Age of roof and when were shingles last replaced? Heating source? How old is it? Is it serviced yearly? Any problems?Windows and Entrance Doors – Any problems with drafts or opening?

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

THE INITIAL ASSESSMENT(continued) Do you have breakers or fuses?Are there operable outlets in every room? Do you have a problem with

breakers or fuses blowing? Do you have Hot Water? Are all faucets operable ? LEAD ISSUES – Age of individuals living in home? Is anyone living

in home or are there future occupants within the target age group?Discuss the items that the homeowner wants. Are these allowable

under the program?

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

THE PROGRAM

Explanation of the program is provided which includes the steps that

will be followed, time frames for write up, bids , preconstruction meetings/contract, appraisal commitment letter, closing to start

Explain that they will need to begin looking for and finding contractors immediately so that they will have 45 to 60 days to obtain bids.

Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

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Code Violations:

With HOME funds the house must be bought up to code.Every home build before 2012 has some type of code

violation.Take into account the date the home was built and is it in

code compliance for that period. When code violations are found, if it is a hazard to

occupants, it must be replaced or repaired and when gutting an entire room that entire room must be bought up to code.

Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

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Code Violations:Minimum livable codes

Protects the public health, safety and welfare in residential structures and premises by establishing property maintenance standards.

Follow the 2012 International Property Maintenance Code (IPMC) effective September 17, 2012

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

THE PHYSICAL INSPECTION

Type and Style of Home:

In order to begin evaluating and correcting deficiencies you will need to know the type and style of the construction of the

home:

Type:

Balloon Platform Modular

Manufacture Log Post and Beam

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

Type and Style of Home:

Style - can be one, two or three story:

Colonial Victorian Contemporary

Historic Tudor Cape Code

Duplex/Multiplex Townhouse/Row Condominium

Modular Cottage or Log Cabin Chalet

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

THE PHYSICAL INSPECTIONStructure:

Look for structural issues: Sagging and bulging roof lines, plum lines of exterior walls, floors that are weak, have holes, are leaning and or have bulges or are sagging. Damage to foundation like deteriorated/leaning foundation walls, piers and girders. Gaps between walls and ceiling and/or floors. Doors and windows are binding, settlement.

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

Structure:

Grounds:Divert ground and runoff water away from house (a) Inadequate or negative drainage (b) Gutter and downspouts to control water. (c) Sump pumps, drain tile (d) Ideally you want the crawl space floor to be above the outside

ground.

.

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

THE PHYSICAL INSPECTION (continued)Roofing: TypeStyle: Gable, Hip, Mansard, Gambrel or ShedMaterial: asphalt/fiberglass, wood, roll, metal, slate or tile,Condition: sagging, bulge, irregular, exposed wood, visible rot

sheathing is weak and/or framing is bouncy Life expectancy; (Water infiltration and possible concealed damage

from deteriorated, curling, cracking, torn, missing, eroded, lifting, not sealing, nail pops, blistering, premature wear, exposed matrix, wind damage, crooked rows or slots, inadequate pitch and fungus)

.

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

Weatherization issues (ENERGY EFFICIENCY)

Siding

Age condition voids possible concealed damage, fungus issues, expose wood, water infiltration

Windows and Doors:Damage, Lead issues, operational issue, energy efficiency safety

issues,

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

Insulation:

Lack of or increase R-valueVapor barriers Sealants

Sanitization issues

Health and SafetyLead MoldSmoke detector/Carbon Monoxide Egress

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

Slip, trip and falls

Carpet/vinylDecks/patio/ StoopsRailings/barriers at decks, balcony and doors (Slider)Stairs/stepsSidewalks/ LandingsDriveway

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

Kitchens

Deteriorated Cabinetry: falling off the wall, frames falling apart, doors and drawers damaged , heavy wear

Substandard workmanship

throughout/IncompleteFixtures not operating properlySanitization issues

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

Bathrooms

Sanitization issuesHeavy wearWater Damage, leaksWeak floorsDrain and water supplySlip/trip hazardsFixture not operating properlyMold /Mildew

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

Electrical

Evaluate the systemCorrect deficiencies/replace hazards Upgrade if necessary

HVAC

Evaluate the systemDetermine age and remaining life expectancy of systemLook for hazard/leaks

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Owner-Occupied Rehabilitation/Replacement Housing

Site Inspections

Decks/Porches/Attic/Garage/Carports

Safety issuesSlip /trips/fallsProper operations of doorsStructural issuesWeatherization issues

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Rental Housing

Eligible Activities:

Sponsor Rental Projects 1-4 Units (through our Single Family Special Loan Program)

Multi-Family Projects Acquisition, new construction or

rehabilitation of affordable rental housing

Multi-Family Project St. Mary’s County

Owner Requirements:

The developers or owners of the rental housing may be small scale property owners, for-profit developers, nonprofit housing providers, CHDOs or the local government, redevelopment organizations or public housing authorities.

Rental Housing (Continued)

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Main Street Housing Annapolis Maryland

Eligible Properties:

HOME rental projects may be one or more buildings on a single site, or multiple sites that are under common ownership, management and financing.

The project includes all activities associated with the site or building.

Transitional as well as permanent housing, including group homes and SROs, are allowed.

There are no preferences for project or unit size or style.

Rental Housing (Continued)

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Property Standards:

Units must meet applicable property standards at occupancy or upon completion of rehab

Units must be maintained to property standards for affordability period

HOME property standards apply to the common areas and the building’s exterior, not only the HOME units.

Rental Housing (Continued)

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Rent/Occupancy Requirements: Incomes must be below 80% of AMI 90% of initial occupants must be below 60% of AMI Minimum 20% of units in projects with 5 or more

units must be at 50% or below of AMI. If combined with Tax Credits rents must conform to

both HOME and Tax Credit Limits

Rental Housing (Continued)

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Affordability Period:

HOME-assisted rental units carry rent and occupancy restrictions for varying lengths of time, depending upon the average amount of HOME funds invested per unit

Rental Housing (Continued)

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ACTIVITY AVERAGE PER-UNIT HOME $

MINIMUM AFFORDABILITY PERIOD

Rehabilitation or Acquisition of Existing Housing

<$15,000/unit$15,000-$40,000/unit >$40,000

5 years 10 years 15 years

Refinance of Rehabilitation Project

Any $ amount 15 years

New Construction or Acquisition of New Housing

Any $ amount 20 years

Long Term Compliance

In order to verify compliance with property standards and the information submitted by owners on tenants’ incomes, rents and other HOME rental requirements during a project’s period of affordability, HOME rules require on-site inspections of HOME properties as follows:

# of Units Inspection Required

1-4 every 3 years

5-25 every two years

26 or more annually

Not all units must be inspected in a large project, only a “sufficient” sample.

Rental Housing (Continued)

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Long Term Compliance (continued):

Tenant income must be recertified annually during affordability period

Rents must be reviewed annually for all HOME assisted units

Rental Housing (Continued)

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Tenant-Based Rental Assistance (TBRA)

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Tenant Based Rental Assistance (TBRA) is assistance that fills the gap between the amount a family can afford to pay for housing cost (rent and utilities) and the actual costs of

housing selected by the family

Application:

Sub-recipients may apply for funds to support TBRA programs through the DHCD HOME Initiatives Round.

Additional information on TBRA can be found at the HOME Website http://www.hud.gov/offices/cpd/affordablehousing/programs/home/topical/tenant.cfm

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Community Housing Development OrganizationsCHDOs

A Community Housing Development Organization (CHDO) is a private nonprofit, community-based service organization that has obtained or intends to obtain staff with the capacity to develop affordable housing for the community it serves.

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Community Housing Development Organizations

CHDOs

CHDO Benefits

15 percent of the States HOME allocations must be set aside for housing activities in which qualified CHDOs are the owners, developers and/or sponsors of the housing. Included within that amount, up to 10 percent of the 15% may be used for predevelopment costs for CHDOs.

Operating funds are available annually for active CHDOs.

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Environmental Review

Level of review depends upon the activity For rehabilitation and new construction (4 or fewer

units); categorically excluded subject to 58.5. All rehabilitation loans will require a Statutory Checklist completed in order to determine if project may become exempt.

New Construction (more than 5 units) subject to

environmental assessment.

Environmental Reviews

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HOME funds may not be used to

Pay delinquent taxes, fees or charges on properties to be assisted with HOME funds.

Provide non-federal matching contributions required under any other Federal program;

Life estates and land contracts/ contracts for deeds are not approved by HUD as eligible forms of ownership.

Prohibited

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Provide assistance to a project previously assisted with HOME funds during the period of affordability established by the participating jurisdiction.

However, additional HOME funds may be committed to a project up to one year after project completion, but the amount of HOME funds in the project may not exceed the maximum per-unit subsidy amount allowed.

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Prohibited (Continued)

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Four-Year Project Completion Deadline

Project must be completed and ready for occupancy within 4 years of the date the written agreement is executed. If not completed, these projects will be considered

‘involuntarily terminated before completion’ and the HOME investment must be repaid “Completion” means that all necessary construction

work has been completed and a certificate of occupancy has been issued

FY 2012 HUD Appropriations Law

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FY 2012 HUD Appropriations Law (Continued)

Deadline for Sale of Homebuyer Units

PJs must convert all homebuyer units that have not been sold to a homebuyer within 6 months of construction completion to HOME rental units, or repay the

HOME investment HUD has no exception authority

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FY 2012 HUD Appropriations Law (Continued)

Project Certification:

Before executing a legally binding written agreement, a PJ must :

a) conduct an underwriting review;b) assess developer’s capacity and fiscal

soundness;c) examine neighborhood market conditions to

ensure adequate need for project.–assessment of project underwriting, developer capacity, and market need

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FY 2012 HUD Appropriations Law (Continued)

CHDO Development Capacity:

A PJ may not reserve FY 2012 funds to a CHDO unless it has determined that the CHDO has staff with demonstrated development experience.

–Experience developing projects of same size, scope, and complexity

–HUD defines CHDO staff as paid employees responsible for day-to-day operations (volunteers, board members, and consultants are not staff)

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HOME Program Manager Dale Quisgard 410-514-7456

Quisgard@mdhousing.org

HOME Program Processor Catherine Spencer 410-514-7492

Spencer@mdhousing.org

HOME Rehabilitation Robert Rommel 410-514-7458

Inspector Rommel@mdhousing.org

Assistant Director, CDA David Klingler 410-514-7605

Special Loan Program Klingler@mdhousing.org

Contact List

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Maryland State Web Site: http://www.mdhousing.org/Website/Programs/hipp/Default.aspx

HUD/HOME Web Site: http://www.hud.gov/offices/cpd/affordablehousing/programs/home

HOME Environmental Site:http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/environment

Web Sites