2009 CDBG/CHIP Recipients’ Workshop

Community HOME Investment Program

CHIP

Page 22009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Congratulations to FFY 09 CHIP Recipients

• Ben Hill County

• City of Cartersville

• Dooly County

• City of Douglas

• Hall County

• City of LaGrange

• Lowndes County

• City of Marshallville

• City of McIntyre

• Randolph County

• City of Rockmart

• City of Rome

• City of Sandersville

• City of Tifton

Page 32009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Congratulations to FFY 09 CHIP Set-Aside Recipient

• City of Thomasville

Page 42009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Typical Hazards

• Not returning CHIP funds drawn within 7 days if unspent

• Spending less than $1,000 in total CHIP project funds

• Not returning “recaptured CHIP funds”

• Double Dipping

• Not reporting program income

• Not understanding the difference between “recaptured funds and program income”

Page 52009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Typical Hazards

• Not spending program income before drawing CHIP funds

• Spending CHIP funds on ineligible property or applicant

• Not seeking DCA guidance on conflicts of interest

• Not following HOME regulations including record retention

Page 62009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Your DCA Staff

• Michelle Lewis, Affordable Housing Programs Manager404 – 679 – 0659

• Kay Garrison, CHIP Consultant404 – 679 – 0573

• Rick Huber (Environmental, Other Federal Requirements)(404) 679 – 3174

• Pamela Truitt (HUD Debar Clearance)(404) 679 – 5240

Page 72009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Next Steps for State Recipients

1. Carefully study the general conditions and special conditions of the CHIP award

2. Execute the Statement of Award

3. Execute the General Conditions

4. Execute the Special Conditions

Page 82009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Next Steps for State Recipients

5. Set up separate non-interest-bearing CHIP accounts (one for each FY award)

6. Complete the Authorization Agreement for Automatic Deposits

7. Complete the Authorized Signature Card8. Return this package to DCA within 30

days of the date of the award along with a “VOIDED” CHECK from the CHIP account

Page 92009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Addressing the Special Conditions

• Affirmative Marketing Plan

• Minority and Women Business Outreach Plan

• Environmental Plan

• Sub-recipient Agreement if using a non-profit to administer all or part of the CHIP program

• Must be submitted to DCA and cleared prior to any draw down of funds

• Any other required special conditions

Page 102009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

New for FFY 09

• DCA Addendum to Administrative Services Contract

• DCA Provided Sub-Recipient Agreements

Page 112009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

What are These Agreements?

• Agreement must follow the listing of requirements in HOME regulations at 24 CFR 92.504

• Use of CHIP funds

• Affordability

• Program Income

• Uniform Administrative Requirements

• Project Requirements

Page 122009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Sub-Recipient Agreements (continued)

• Other Program Requirements

• Affirmative Marketing

• Requests for Disbursement of Funds

• Records and Reports

• Enforcement of Agreement

• Duration of the Agreement

Page 132009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Citizen Participation Requirements

• Within 60 days of award, hold public hearing

• Discuss the proposed activities and estimated funding for each activity

• Discuss plans to minimize displacement and assistance, if displacement occurs

• Discuss historic preservation

Page 142009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Develop Your Local CHIP Program Policies and Procedures

• Lead paragraph setting forth approved award (amount of award, activities, award date)

• Eligible Borrowers

• Eligible Activities

• Application In-take

• CHIP Loan Terms and Conditions

• Leverage Loan Requirements

Page 152009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Develop Local Program Policies and Procedures (continued)

• Minimum Property Standards• Written Rehabilitation Standards• General Property Improvements• Inspection, Work Write Up, Bidding Procedures• Contractor Qualifications• Loan Documentation and Loan Closings• Progress Payments, Change Orders, Close-Outs• Appeals and Complaints

Page 162009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

DCA Issues Grant Adjustment Notice Clearing Special

Conditions • Up to 25% of administrative funds may be drawn

as soon as all special conditions have been met and DCA issues the GAN clearing the special conditions

• Must have current billable expenses that equal or exceed maximum allowable

• No project expenditures may be incurred or any CHIP funds drawn down for any activity (other than for grant administration, design activities and other exempt activities) prior to receipt of an environmental clearance letter releasing funds. See Chapter 5 of the FFY 2009 CHIP Recipients’ Manual.

Page 172009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Before Getting Started on Your Program

• Review the “CHIP Homebuyer Guide”

• Review the “CHIP Rehabilitation Guide”

• Review CHIP Program Policy Memoranda

• Review the “CHIP Multifamily Guide”

Page 182009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Begin Program Marketing

• Implement the program marketing plan as set forth in the application

• All printed CHIP literature must have fair housing logo

Page 192009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

DCA’s First Monitoring Visit

• Within 30 – 60 days of grant award, DCA will meet with the local government officials and the award administrators

• See Appendix C, Phase I Program Monitoring

• Review Program Policies and Procedures and other items listed in Appendix C

Page 202009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Begin Application Processing

• Begin taking applications and follow the fair and equitable application in-take and process as set forth in your application

• Maintain applicant waiting list showing resolution of each application

Page 212009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Reporting and Monitoring Your Program’s Progress

• First quarterly report is due January 31, 2010 for the period of September 25, 2009 – December 31, 2009

• All other quarterly reports due within 30 days of the end of each subsequent quarter until all program activity has ended

• Final quarterly report due after all projects completed and closed out

Page 222009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Project Completion Reports

• Project Completion Reports due within 60 days of the final draw down of CHIP funds for each project

• DCA will not disburse the final twenty-five (25) percent administrative draw until all project completion reports have been received

Page 232009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Reporting Contractor Data

• See Form No. 5 in Manual

• Final draw request for each project cannot be processed unless accompanied by “Contracts and Subcontracts for Projects Completed Form”

Page 242009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Annual Assessments of Affirmative Marketing and Minority- and Women-Owned Business Outreach Plans

• DCA requires an annual assessment of how your community met the requirements

• First assessments due on September 25, 2010

Page 252009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Responsibilities of State Recipients

• Develop and adopt program policies and procedures

• Program marketing

• Application in-take

• Property inspections

• Bid document preparation

Page 262009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Responsibilities of State Recipients(continued)

• Contracts

• Loan approvals and denials

• Progress payment inspections

• Dispute resolution

• Compliance with all State and Federal laws and regulations

Page 272009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Responsibilities of State Recipients (continued)

• Requiring all CHIP borrowers to maintain hazard insurance naming State Recipient as mortgagee including flood insurance if in FEMA designated Flood Hazard Zone

• Builder’s Risk Policy by general contractor if residents have to vacate premises

Page 282009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Responsibilities of State Recipients (continued)

• If State Recipient or sub-recipient owns during development phase, they accept risk of loss

• Maximize the participation by the private sector

• Legal document and written agreement preparation and execution

Page 292009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Responsibilities of State Recipients (continued)

• Program income determination

• Compliance with HOME program requirements

• Evaluate each project in accordance with approved award application and adopted program policies and procedures

Page 302009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Responsibilities of State Recipients (continued)

• Subsidy layering review• Monitoring and reporting

performance• Retention and access of records• Prudent financial management

Page 312009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

The Seven Basic HOME (CHIP) Rules

• Definition of a Project

• Form and Amount of Subsidy

• Eligible Costs

• The Property

Page 322009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

The Seven Basic HOME (CHIP) Rules (continued)

• The Applicant or Beneficiary

• The Long-Term Affordability of Project

• Applicability of Other Federal Requirements

Page 332009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Activate Your CHIP Award

• Execute Statement of Award with General and Special Conditions

• Hold post award Public Hearing• Get DCA clearance of Special Conditions• Develop Local Policies and Procedures• Open separate, non-interest-bearing CHIP account• Disburse all funds within seven (7) days of receipt• Only a minimum of funds ($100) can be kept in account

beyond 7 days

Page 342009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Follow DCA Policy Memoranda

• Follow all DCA CHIP Policy Memoranda per Chapter 10 of the FFY 09 CHIP Recipients’ Manual

Page 352009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

What’s New for FFY 09

• Still need to use old project set up form, HUD form 40094, dated 2/2003 - Rental/Homebuyer/Homeowner Rehab Set-up Report, along with DCA addendum – Form # 10 in manual

Page 362009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

What’s New for FFY 09

• Still need to use old project completion report dated 2/2003, HUD form 40096 – Homebuyer/Homeowner Rehab Completion Report, along with DCA addendum – Form # 13 in manual

• Rental project completion report is 40097 dated 2/2003 at www.hud.gov – HUD forms

Page 372009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Remember

• Use “grant agreement” for homebuyer project delivery fee

• Use “grant agreement” for lead costs

• Use homebuyer loan agreement language if first mortgage is FHA insured

• See Chapter 10 memo dated 8/15/07

Page 382009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Contact Us

All CHIP forms are available on the DCA website at

http://www.dca.state.ga.us/communities/CDBG/

programs/CDBGforms.asp

Page 392009 CDBG/CHIP Recipients’ Workshop CHIP Next Steps

Challenges Ahead

• Credit Crunch

• Qualifying Applicants

• Soft Seconds

• Need Strong Counseling Component

• Long Lead Time to Prepare New Buyers

• Buyers May Need to Inject Own Funds

• Foreclosure Prevention

• Use Georgia Dream 1st Mortgage Program