Pre-Qualification Worksheet:
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I.       Given the need for expanded housing
         rehabilitation programs citywide due to
         the overall age of the housing stock of
         the city, staff has prepared a program
         utilizing Redevelopment Low/Mod
         Housing Funds to meet this need.
 
II.     The Agency Funded Residential Rehabilitation Loan Program will have four
        components, the first three cover the needs of owner occupied single
        family homes and the fourth component covers rental (multi-unit
        properties within the city):

        A. Emergency Loan Assistance - Provide assistance quickly to income
            qualified homeowners to make health and safety related repairs.
            Examples of such items include a water line or sewer line
            break, a broken water heater, or a vermin infestation problem.
   
       B. Substantial Rehabilitation Program - Provide assistance to those 
           property owners whose total improvement work cost exceeds 25% of
           the total pre-rehabilitation value of the property (ineligible by HUD).
  
       C. Self Help Housing Rehabilitation Program - Allows the owner of
            the property to be his or her own general contractor if the total job
            cost does not exceed $15,000.
    
       D. Rental Housing Rehabilitation Program - Allows a property owner
           of a rental property to make necessary interior and exterior repairs to
           bring the property in conformance with all existing building and 
           municipal codes governing housing within the jurisdiction of the City.
  

III.   General Requirements & Conditions:
  
       A. Program area eligibility is Citywide.
 
       B. The rate of interest for these loans shall be as follows:

           -- 2.0% interest - Single family owner occupied units in which the
              income of the household is between 81-100% of median income.
   
           -- 3.5% interest - Single family owner occupied units in which the
              income of the household is between 101%-120% of median
              income.
  
           -- 5.0% interest - Rental rehabilitation projects. 

             Single family rehabilitation loans, regardless of amount loaned or 
             interest rate charged, may be deferred, interest only or fully
             amortized monthly payments based upon the applicant's ability to
             repay and not create a hardship. All rental property rehabilitation
             loans will be fully amortized loans.
  
             Repayment of interest only or fully amortized loan begins at
             completion of project or 120 days from date of loan agreement,
             whichever comes first.

       C. Eligible Repairs:
  
           1. Equipment or Materials In Need of Repair or Replacement
 
               Examples of eligible repair include but are not limited to the following:
               Repair or replacement of roofs, broken or shifting foundations, dry rotted
               framing or sheathing members.
  
           2. Code Violations:
               Repairs that correct violations or deficiencies under applicable Building and
               Housing Codes, including incipient violations.
  
           3. Disabled Access:
               Removal of architectural barriers to ensure the independent functioning of
               a disabled household member, or repairs to make the housing unit
               accessible to the disabled household member.
  
           4. Overcrowding:
               Alteration of a housing unit to alleviate conditions of overcrowding of the 
               occupants within the existing zoning and building codes governing any 
               additions or modifications to the structure.
   
           5. General Property Improvements:
               Landscaping, repair of fencing, and painting for cosmetic effect may be 
               financed only if all substandard conditions, code violations and deficiencies
               are corrected.
 
               All fence-related work must be submitted to the Design Review Board per
               Alhambra Municipal Code requirements.
 
           6. Emergency Repairs:
               Includes roofing, plumbing, electrical, heating, structure and foundation,
               water and sewer lines, disabled access, etc.; health and safety problems 
               not covered by home owner's insurance and deemed emergencies or
               the existence of hazardous situations, such as loss of electricity,
               a recent disability or a broken sewer line.
   
           7. Rehabilitation loans can be given only to those property owners whose
               First Trust Deed lenders will comply with Health & Safety Code Section
               33334.14 (a)(4).
  
               To a lien, encumbrance, regulatory agreement of a lender other than the 
               Agency or from a bond issuance providing financing, refinancing, or other
               assistance of rental units or parcels where the Agency makes a finding
               that an economically feasible alternative method of financing,
               refinancing, or assisting the units or parcels on substantially comparable
               terms and conditions, but without subordination, is not reasonably 
               available, and where the Agency obtains written commitments
               reasonably designed to protect the Agency's investment in the event
               of default such as any of the following:

               (A) A right of the Agency to cure a default on the loan.
  
               (B) A right of the Agency to negotiate with the lender after notice of
                    default from the lender.
   
               (C) An agreement that if prior to foreclosure of the loan, the Agency
                    takes title to the property and cures the default on the loan, the
                    lender will not exercise any right it may have to accelerate the
                    loan by reason of the transfer of title to the Agency.

               (D) A right of the Agency to purchase property from the owner at any
                     time after a default on the loan.
  

IV.  Income Eligibility:
      A. To be eligible for the program owner occupied households cannot have
           incomes exceeding 120% of median income as established by the U.S.
           Department of Housing and Urban Development (HUD) (see chart below).
  
      B. 100% of all the rental units must be affordable to tenants who are at 
           moderate-income households. Each household must meet the income limits.

V.  Housing Costs Limits (Owner Occupied)
     In addition to qualifying by income, applicants must also meet housing cost 
     minimums and maximums. Under the ARA guidelines, housing costs
     (mortgage payment, insurance, utilities, maintenance costs, and property
     taxes) must be at least 28% of gross household income but not exceed
     monthly maximum based on number of bedrooms (shown below).

• 0-bedroom house, monthly housing payments may not exceed $1,260.88
• 1-bedroom house, monthly housing payments may not exceed $1,443.75
• 2-bedroom house, monthly housing payments may not exceed $1,623.42
• 3-bedroom house, monthly housing payments may not exceed $1,803.08
• 4-bedroom house, monthly housing payments may not exceed $1,947.46
• 5-bedroom house, monthly housing payments may not exceed $2,091.83
    

VI.  Housing Costs Limits (Rental)
      In addition to households qualifying by income, each unit must remain 
      affordable for 55 years. Below are the rent limits for the year 2006:

• Renting a 0 bedroom unit, monthly rents may not exceed $1,080.75
• Renting a 1 bedroom unit, monthly rents may not exceed $1,237.50
• Renting a 2 bedroom unit, monthly rents may not exceed $1,391.50
• Renting a 3 bedroom unit, monthly rents may not exceed $1,545.50
• Renting a 4 bedroom unit, monthly rents may not exceed $1,669.25
• Renting a 5 bedroom unit, monthly rents may not exceed $1,793.00
     

VII.  Each facet of the Agency Funded Rehabilitation Program will require recorded
      covenants of affordability for a term of 45 years for single family homes.
      The affordability term is 55 years for rental units. The covenants remain in 
      force even if the assisted property owner prepays the loan. As part of the
      agreement, the property owner agrees to an equity sharing arrangement
      according to the following schedule:

• First 5 years - 75% of the excess value accrued by the property from the date the project is completed.
• Years 6 thru 10 - 50% of the excess value accrued by the property from the date the project is completed.
• Years 11 thru 15 - 25% of the excess value accrued by the property from the date the project is completed.
• Years 16 thru 25 - 10% of the excess value accrued by the property from the date the project is completed.
• Years 26 thru 45 - 05% of the excess value accrued by the property from the date the project is completed.