Homeowners who fall within certain income guidelines may qualify for financial assistance through the City for home rehabilitation.

Sponsored by the City of Alhambra

Pre-Qualification Worksheet: 
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Single Family Owner-Occupied Rehabilitation
Due to the requirements of the federal HOME guidelines, this form of rehabilitation program is separated into two components:

• Moderate Rehabilitation - The total cost of construction and "soft costs" associated with the rehabilitation to the existing structure totals less than $25,000.
  
  
• Substantial Rehabilitation - The total development cost for the rehabilitation of the property exceeds $25,000.
  
  These two definitions are important for the purposes of implementing HOME funded rehabilitation programs in one respect only. It is this definition that determines what eligible improvements are included in the "Work Write Up" and, therefore, what level of rehabilitation will be the end result of this process.
  
  Moderate rehabilitation must meet Federal Section 8 Housing Quality Standards (HQS) after rehabilitation.
  
  Substantial rehabilitation above and beyond meeting the HQS must also, after completion of the project, meet:

- City of Alhambra Building and Safety Codes
- City of Alhambra Rehabilitation Codes
- City of Alhambra Zoning Ordinances
- Cost effective energy conservation and effectiveness standards

These rehabilitation program alternatives are a system of grants and loans based upon the nature of the rehabilitation work required and the income level of the homeowner. The following variations will be put into effect:

Moderate Rehabilitation Grant - Less than $5,000 in required rehabilitation cost and the income of the applicant is 60% or less of median income.

Moderate Rehabilitation Deferred Loan at 0% - Rehabilitation cost is more than $5,001 but does not exceed $25,000 and the income level of the applicant is less than 80% of median income.

Substantial Rehabilitation Deferred Loan at 0% - Rehabilitation project cost exceeds $25,001 and the income level of the applicant does not exceed 65% of median income.

Substantial Rehabilitation Loan at 0% - Rehabilitation cost exceeds $25,001 and the income level of the applicant is between 66% through 75% of median income. Repayment schedule is based upon an ability to repay determined by the housing payment for the existing mortgage(s) and the rehabilitation loan repayment does not exceed 30% of the applicant's Adjusted gross income. In the event that such repayment would exceed 30% of the applicant's housing payment, the minimum repayment to the City would be $10 per month until repaid or the property is sold, transferred or assigned to any persons not on the existing deed at the time the rehabilitation loan was approved.

Substantial Rehabilitation Loan at 3% - Rehabilitation cost exceeds $25,001 and the applicant income is between 76% but does not exceed 80% of median income. The repayment schedule is based upon the ability to repay based upon the same criteria noted in the Substantial Rehabilitation Loan at 0% guideline with only one differentiation. The applicant's repayment must be a minimum of $25 per month if the total housing payment for existing mortgage(s) and the rehabilitation loan repayment based upon a 20-year repayment schedule exceeds 30% of the applicant's payment.

General Policies and Procedures

ALL potential applicants will fill out "PRE-QUALIFICATION" forms determining:

1. Applicant (on Deed) is at or between applicable level of median income. Median income is the total income of all persons who live in the home (income is based on Adjusted Gross Income).
2. Household Size - Number of persons that are living in the home and relationship.
3. Applicants are citizens or legal residents of the United States.

Applications will be reviewed for eligibility and preliminary approval as to basic program qualifications. Then application forms will be separated according to household sizes.

Further participant review shall be based upon the following criteria:

1. Proof of household income (past 2 years);
2. A satisfactory credit report (satisfactory being defined as meeting the established underwriting standards of one of the financial institutions that will be a participating lender in the Rehabilitation Program);
3.  Household size of family to number of bedrooms.

Housing Division staff will be responsible for insuring the above criteria has been completed and all participants are in compliance with these program guidelines.

Housing Division staff assists applicant in preparing lender application package and lender required documents (e.g., Employers Certifications, etc.). Upon completion of lender's application, Housing staff will send file to city's Housing Manager along with "Certification of Applicant Eligibility" for review and approval.

NOTE: Verification of all required information will be requested and reviewed.

Rehabilitation Policies and Procedures

After preliminary approval that applicant meets program guidelines, Housing staff person will start file and keep all updated information contained within.

Housing person performs an inspection of the property to determine what proposed rehabilitation work is required to ensure that the property meets "Housing Quality Standards" and all applicable city zoning, building and safety codes, as well as any applicable State codes or regulations pertaining to single family housing (such as Historical Preservation requirements).

The Housing person shall also order a Pest Control Report from a certified State licensed Pest Control Company.

The intent and purpose of targeted rehabilitation work shall be basic in scope. It will address (in the following order of importance):

General Policies and Procedures
ALL potential applicants will fill out Pre-Qualifying Application forms determining:

1. Applicant (on deed) is at or between applicable level of median income. Median income is the total income of all persons who live in the home (income is based on Adjusted Gross Income).
2. Household Size - Number of persons that are living in the home and relationship.
3. Applicants are citizens or legal residents of the United States.

Applications will be reviewed for eligibility and preliminary approval as to basic program qualifications. Then application forms will be separated according to household sizes.

Further participant review shall be based upon the following criteria:

1. Proof of household income (past 2 years);
2. A satisfactory credit report (satisfactory being defined as meeting the established underwriting standards of one of the financial institutions that will be a participating lender in the Rehabilitation Program);
3. Ratio of household size to bedrooms (number of people per bedroom).

Housing Division Staff will be responsible for insuring the above criteria has been completed and all participants are in compliance with these program guidelines.

Housing Division Staff will assist the applicant in preparing the lender application package and lender required documents (e.g., Employers Certifications, etc.). Upon completion of the lender's application, Housing Staff will the file to City's Housing Manager along with Certification of Applicant Eligibility for review and approval.

NOTE: Verification of all required information will be requested and reviewed.

Rehabilitation Policies and Procedures
After preliminary approval identifying that applicant has met program guidelines, Housing staff person will start file and keep all updated information contained within.

Housing staff member will perform an inspection of the property to determine what proposed rehabilitation work is required to ensure that the property meets "Housing Quality Standards." This includes all applicable City zoning, building and safety codes, as well as any applicable State codes or regulations pertaining to single family housing (such as Historical Preservation requirements).

The Housing Person shall also order a Pest Control Report from a certified state licensed pest control company.

The intent and purpose of targeted rehabilitation work shall be basic in scope. It will address (in the following order of importance):

1. The correction of any code violations, the repair and/or replacement of any defective structural, mechanical, plumbing, electrical conditions existing and necessary termite control report remedial measures;
2. Deferred maintenance conditions such as condition of water heater, roof, paint, flooring, etc.;
3. Landscaping, security items and replacement of fixtures shall have the lowest priority and should be considered among the first items to be dropped if the expected total rehabilitation cost exceeds the loan amount approved by the lender.

In addition, the Housing person will initiate two separate toxic inspections:

1. Testing for lead-based paint and for removal and replacement of such materials;
2. Testing, if indicated, for removal, replacement and/or encapsulation of any asbestos materials existing at the property.

(NOTE: HUD REQUIRES THAT SPECIALIZED PERSONS OR FIRMS EXPERIENCED IN CONDUCTING THESE TYPES OF TOXIC MATERIALS TESTS PROVIDE THE INSPECTIONS AND A WRITTEN REPORT OF THE RESULTS.)

Upon receipt of toxic inspection results and own general inspection, Housing person will prepare a draft "Work Write Up" and preliminary cost estimates. (It is recommended that Housing Inspector utilize latest NATIONAL CONSTRUCTION ESTIMATOR PRICES ADJUSTED TO LOS ANGELES COUNTY MODIFIER). Housing person then will forward file for review by the Housing Manager.

The Housing Manager reviews "Work Write Up" according to the following criteria:

1. Toxic Inspection results are in file and any necessary corrective action has been incorporated into the "Work Write Up"
2. Estimated rehabilitation costs DO NOT EXCEED the loan amount approved by the lender.

The Housing person will meet with the applicant to review the final "Work Write Up." If the "Work Write Up" is modified, the Housing person must resubmit the entire file to the Housing Manager for review of changes in scope of work and revised rehabilitation costs.

A general construction firm shall be declared eligible for participation to bid and placed on a Contractors List when the firm has met and provided verification of the following items:

1. Completed "Contractor Questionnaire"
2. Copy of a current valid California State Contractor's License
3. Certificate of Liability Insurance in the minimum amount of $500,000.00.

All qualified contractors will receive a "Bid Package" consisting of the following information:

Notice to Receive Sealed Bids For Property Rehabilitation; Instructions to Bidders; specified date, time and procedure for open inspection of property prior to submission of sealed bid; copy of "Work Write Up," copies of Pest Control Report, Lead-Based Paint Report and Asbestos Report. BID Proposal Form shall contain each item of the scope of work having its own line cost and then a Total Price line. No prices are to be provided to the contractor in estimating costs. Housing staff may only clarify or further define work item specifications.

The Housing person, along with the Applicant, will review all bids and make recommendation to the Housing Manager of winning contractor bid. The criteria for making such recommendations are that the Contractor has been qualified per the process detailed above; the Contractor Total Price is within five percent (5%) of the Housing Inspector's estimated rehabilitation costs; that at least two of the submitted bids are within ten percent (10%) of the Housing Inspector's estimated rehabilitation costs; and that at least three bids have been received on each specific property. The property owner is NOT required to select the lowest bidder -- just a contractor who has complied with all provisions of the Bid process.

In the event these conditions are NOT fulfilled, the bids received will be declared Null and Void. The Housing Manager will then review the original cost estimates and re-estimate if necessary and/or send out new Bid Packages for contractors to once again submit sealed bids. Cost estimates are "IN-HOUSE" documents and are NEVER to be shared with the general public.

Upon determination of the successful bidder, the Housing person shall request that the contractor provide three references of previous jobs of similar scope of work. The Housing Inspector shall visit the sites of these job references and prepare for the purpose of the Rehabilitation File a report on the quality of the work done by the contractor and the experience of the owner of the property regarding the timeliness of the contractor in doing the work, ability and cooperation correcting any work completed which was not satisfactory to the owner originally, and finally if workers or the contractors suppliers ever complained about not being paid for their work or materials.

Completion of this report along with all bids will be submitted to the Housing Manager for review and approval. Upon approval the Housing Manager will authorize the Housing person to prepare necessary Contract, Progress Payment Schedule and "NOTICE TO PROCEED" documents. Before contracts are signed, the Housing person shall conduct one final "Walk-Through" with the contractor and property owner to review each and every item contained within the scope of work.

At the time of the Pre-Construction Conference, the Housing person will once again explain to the Contractor that "Change Orders" are highly discouraged and must be justified in writing by the Contractor, reviewed by the Housing person and approved by the Housing Manager. No change in the scope of work is eligible nor can work begin until this process has been completed and duly authorized.

The Housing Manager shall cause to be established an account with either the Finance Department or HUD's Cash Management System, depending upon source of rehabilitation loan funds, for the total contract amount and a contingency amount of ten percent (10%). The unused proceeds will be returned to the General HOME Program funds and credited to the homeowner's account if not utilized during the course of the rehabilitation work.

NOTE: The Housing person shall try to discourage the use of Contingency funds or "Change Orders" in the scope of work unless there is a compelling reason to do so. All such changes must be submitted to the Housing Manager for prior approval.

Progress Payments
Contractor submits Invoice, Labor and Material Lien Releases to the Housing Person, copies of appropriate Building and Safety permits and/or documentation that necessary inspections pertaining to the items submitted for payment have been approved.

Housing Person visits property site and checks off that item(s) requested for payment that are completed and satisfactory, according to the contract's "Scope of Work." Result of field site visit is noted in the Rehabilitation File and corrections or additional work, if necessary, are documented and a written copy is given to the Contractor. After any corrections or additional paperwork is provided by the Contractor, payment is then recommended by the Housing Person to the Housing Manager.

Housing Manager reviews file and all progress payment-related documents and approves "Authorization for Progress Payment." Ten percent (10%) of requested amount is withheld in the account for the purposes of "RETENTION."

Final Payment
The only differences in process between Progress Payments and Final Payment is that the Housing person must make sure before submitting authorization that all work is FULLY completed and all necessary inspections required by Building and Safety are final. The Housing Inspector at the site shall go over each item of the "Scope of Work" completed by the Contractor verifying that the project meets industry standards with regard to workmanship and materials used. Corrections are issued and must be completed before forwarding the file to Housing Manager for "Authorization for Final Payment."

The Housing Person also prepares and submits to Housing Manager a "NOTICE OF COMPLETION" that must be recorded with the Los Angeles County Recorder's Office.

Retention Payment
After thirty-five (35) days from the recordation date of the Notice of Completion, the Contractor shall submit an invoice for payment of the retention funds. Before authorizing release of these funds, the Housing Inspector must check the County Recorder's property files to ensure that no material and/or labor liens have been filed against the property. In the event that such a claim is made against the property, the Housing Person shall inform the Housing Manager, who in turn immediately contacts the City Attorney for further direction. Retention funds will NOT be released unless directed to do so by Legal Counsel for the City.

Closing Out Rehabilitation File
Upon receipt of recorded "NOTICE OF COMPLETION," Housing Person shall close out file.