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Harris County Community and Economic Development Department. HOME/ADDI Workshop. Service Area. Service Area. Unincorporated Harris County and its 15 cooperative cities. Bellaire Seabrook Deer Park Shoreacres Galena Park South Houston Humble Tomball

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service area1
Service Area

Unincorporated Harris County and its 15 cooperative cities.

Bellaire Seabrook

Deer Park Shoreacres

Galena Park South Houston

Humble Tomball

Jacinto City Waller

Katy Webster

LaPorte West University Place

Morgan’s Point

Houston, Baytown and Pasadena receive their own

community development funds and are not included

in the Harris County service area.

the consolidated plan
The Consolidated Plan
  • Five-year plan that addresses:
        • Housing;
        • Social services;
        • Infrastructure; and
        • Community revitalization

needs.

  • Specifies types of projects to be funded
  • Application for federal funds under HUD’s formula grant programs:
        • CDBG;
        • HOME / ADDI; and
        • ESG.
  • Basis for assessing performance
the consolidated plan aids decision makers in creating strategies to address the following
The Consolidated Plan aids decision makers in creating strategies to address the following.
  • Employment and employability
  • Affordable housing
  • Adequate streets
  • Water, sewage and drainage systems
  • Quality education and Workforce Development
  • Parks and green space
  • Community facilities
  • Quality health care
  • Crime awareness and public safety and
  • Safe, peaceful and productive neighborhoods for low- and moderate-income communities
request for proposals rfp
Request for Proposals (RFP)
  • Solicitation and acceptance of proposals
  • According to federal and state procurement laws and standards
  • Applicants must:
    • Be a non-profit organization or governmental agency or entity;
    • Expend funds within a 12-month period;
    • Have sufficient working capital;
    • Meet one Consolidated Plan Objective;
    • Meet one National Objective;
    • Benefit eligible residents in CEDD’s HUD Service Area.
  • Used to address objectives identified in Harris County’s Consolidated Plan
annual action plan aap
Annual Action Plan (AAP)
  • Detailed description of the allocations of Harris County HUD entitlement dollars (CDBG, HOME, and ESG).
  • Discusses how resources generated by tax dollars will be utilized for the upcoming program year.
agencies receive allocations
Agencies Receive Allocations
  • Contracts are developed between Harris County and agencies.
  • Funds are dispersed on a reimbursement basis.
  • Grants Management staff monitors all projects.
consolidated annual performance evaluation report caper
Consolidated Annual Performance & Evaluation Report (CAPER)
  • Describes progress.
  • Reports on and reviews county’s use of Entitlement funds.
  • Benchmark for projects to be funded.
  • Allows for self-assessment.
slide11

Overview

American Dream Downpayment Initiative (ADDI)

Home Investment Partnerships (HOME)

**Please note, this overview provides general guidelines and regulations as issued by HUD**

slide12

Purpose – ADDI

  • To increase the homeownership rate, especially among:
    • Lower income; and
    • Minority households.
  • To revitalize and stabilize communities
slide13

Purpose - HOME

  • To expand the supply of:
    • Decent, affordable housing;
    • Nonprofit housing providers.
  • To strengthen:
    • Ability of state and local governments to provide housing;
    • Public-private partnerships.
slide14

Eligible Applicants

  • For-profit developers
  • Non-profit housing providers
  • Community Housing Development Organizations (CHDOs)
  • Redevelopment organizations
  • Public Housing Authorities (PHAs)
slide15

Eligible Activities

  • Homebuyer Activities - HOME and ADDI
  • Homeowner Rehabilitation - HOME
  • Rental Housing (New Construction or Rehabilitation) - HOME
  • Tenant-Based Rental Assistance (TBRA) - HOME
definitions
Definitions
  • Income limits
  • Match, Eligible forms of match
  • Long-term affordability
  • Hard costs
  • Soft costs
income limits
Income Limits

HOME funds must assist people earning <=80% of the median family income (MFI). PY2005 MFI: $61,000 for a 4 person household.PY2005 Income Limits are in your packet

slide18

Match

  • 25% of the total HOME funds
  • Permanent contribution to affordable housing. It is not leveraging.
  • Match is not required for:
    • Administrative funds;
    • CHDO operating expenses; or
    • ADDI funds.
slide19

Eligible Forms of Match

  • Cash or cash equivalents from non-federal sources.
  • Value of waived taxes, fees or charges associated with the HOME project.
  • Value of donated land or real property.
  • Cost of infrastructure improvements associated with the HOME project.
  • A percentage of the proceeds of single- or multi-family housing bonds issued by state, or local government.
slide20

Eligible Forms of Matchcon’t.

  • Sweat equity
    • $10/hour for unskilled labor
    • Regular rate for skilled professionals
    • Must be part of regular program, not only for the specific project
  • Direct costs of supportive services to residents of HOME projects
  • Direct cost of homebuyer counseling to families purchasing homes with HOME assistance.
slide21

Long Term Affordability

To ensure affordable housing over the long

term, HOME imposes:

  • Rent requirements; and
  • Occupancy requirements.

The length of the affordability period depends on:

  • The amount of the HOME investment; and
  • The nature of the activity.
slide22

ACTIVITY

AVG. PER-UNIT HOME $

MINIMUM AFFORDABILITY PERIOD

Rehab 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 Rental Housing

Any $ amount

20 years

Long-Term Affordability

slide23

Hard Costs

  • Acquisition of land (for a specific project)
  • Site preparations or improvements, including demolition
  • Securing of buildings
  • Construction materials and labor
slide24

Soft Costs

  • Financing fees
  • Legal and accounting fees, including cost

certification

  • Appraisals
  • Architectural/engineering fees
  • Environmental reviews
  • Builders’ or developers’ fees
  • Affirmative marketing, initial leasing and

marketing costs

slide26

Eligible Activities - ADDI

Homebuyer Activities

  • ADDI funds may be used for:
    • Downpayment;
    • Closing costs; and
    • Rehabilitation in conjunction

with home purchase.

slide27

Types of Assistance - ADDI

Homebuyer Activities

Homebuyer Activities

  • Available to first-time homebuyers only
  • First-time homebuyers have not owned a home for three-years prior to purchase of a home with ADDI assistance.
  • The amount of assistance is the greater of:
    • $10,000; or
    • 6% of the purchase price of the home.
slide28

Homebuyer Activities

Eligible Costs - ADDI

  • Acquisition costs
  • Related reasonable and necessary soft costs
  • Development hard costs for related rehabilitation.(Including cost of reduction of lead paint hazards and the remediation of other home health hazards.)
slide29

Homebuyer Activities

Eligible Properties - ADDI

Eligible property types include:

  • Single-family home;
  • Two-to-four family home; and
  • Condominium unit.
slide30

Homebuyer Activities

Eligible Activities - HOME

  • HOME funds can be used for:
  • Acquisition
  • Rehabilitation
  • New construction
  • Lease-purchase if conveyed within:
      • 36 months of signing; or
      • 42 months of project

implementation.

slide31

Homebuyer Activities

Eligible Activities - HOME(cont’d)

Conversion of HOME rental units to homeowner units

  • If additional HOME funds --> affordability period is set by amount of direct assistance
  • If no additional funds --> minimum affordability of original rental units
slide32

Homebuyer Activities

Eligible Costs - HOME

Hard Costs

  • Acquisition
  • Site preparation or demolition
  • Construction
  • Soft Costs
  • Fees and

Appraisals

  • Homebuyer

Counseling

Relocation Costs

slide33

Homebuyer Activities

Eligible Properties - HOME

Eligible property types include:

  • Single-family home;
  • Two-to-four family home; and
  • Condominium unit.
slide34

Homebuyer Activities

Maximum Property Value – ADDI and HOME

  • Two things need to be <95% of the median area purchase price*:
    • After – rehab value of the property;
    • Acquisition only purchase price; or
  • Harris County has set the maximum purchase price at $115,000.

*$138,110

slide35

Homebuyer Activities

Property Standards

Acquisition

  • Must meet state/local housing standards and codes
    • If no state/local standards, then Section 8 HQS applies
  • House must be inspected
  • House must meet standards at time of occupancy
slide36

Homebuyer Activities

Property Standards

Acquisition and Rehab

Properties must:

  • Meet written rehab standards, and
  • Meet state/local code/standards
    • If no state/local code, meet a national code
  • Be inspected prior to occupancy
  • Present no health and safety defects
  • Meet applicable codes:
    • At project completion; and
    • Within 2 years of transfer.
slide37

Homebuyer Activities

Property Standards

New Construction

Properties must:

  • Meet state/local code and standards;
    • If no state/local code, meet a national code; and
  • Also meet Model Energy Code.
slide38

Homebuyer Activities

The Applicant*

  • Occupy property as principal residence for a minimum of five years
  • Must meet eligible low income requirements
    • At purchase for existing housing
    • At contract signature for new construction
    • At signing of lease-purchase agreement

*Applicant = individual or beneficiary

slide39

Homebuyer Activities

Income Eligibility

  • PJs can use one of the three income definitions to determine annual income:
    • Annual Gross Income under Part 5
    • Census Long Form
    • IRS Form 1040 adjusted gross income*
  • Review source documents
  • Project income for next 12 months

Income verification is good for six months.

*For more information – www.hud.gov

slide40

Homebuyer Activities

Recapture Provisions

  • Recapture most like a conventional loan
  • Buyer pays back direct subsidy
  • Direct subsidy is:
    • Assistance that reduced purchase price from fair market value; and
    • Direct assistance to the homebuyer (ex: downpayment or closing cost assistance).
  • May sell to any willing buyer
slide41

Homebuyer Activities

Recapture Provisions(continued)

  • Recapture all or part of subsidy
  • Development subsidies NOT subject to recapture
  • Use resale provisions when:
    • Development subsidy only; or
    • No $ subject to recapture.
slide42

Homebuyer Activities

Other Federal Requirements

Other Federal requirements may apply:

  • Fair Housing and equal opportunity;
  • Affirmative marketing;
  • Davis-Bacon labor standards;
  • Flood insurance;
  • Relocation; and
  • Lead-based paint.
slide44

Homeowner Rehabilitation Activities

Eligible Activities

  • Assists owner-occupants with:
  • Repairs
  • Rehabilitation
  • Reconstruction
slide45

Homeowner Rehabilitation Activities

Special Purpose Homeowner Repairs

  • Ineligible IF the property does not meet minimum property standards upon completion:
  • Weatherization;
  • Emergency repair; and
  • Handicapped accessibility.
slide46

Homeowner Rehabilitation Activities

Forms of Assistance

  • Most common:
  • Grants
  • Deferred payment loans
  • Interest or non-interest bearing loans

Can also use:

  • Loan guarantees
  • Interest subsidies
  • Other forms approved by HUD
slide47

Homeowner Rehabilitation Activities

Eligible Costs

  • Hard Costs:
    • Actual rehab
    • Accessibility improvements
    • Utility connections
  • Soft Costs
  • Relocation Costs
slide48

Homeowner Rehabilitation Activities

Eligible Property Types

  • To be eligible, housing must be:
    • Occupied by income-eligible family
    • The owners’ principal residence
  • Types of eligible housing include:
    • Single family housing;
    • Condo unit;
    • Co-op or mutual housing unit if

recognized by state law.

slide49

Homeowner Rehabilitation Activities

Maximum Property Value

  • The value after rehabilitation <95% of median purchase price for the area. ($138,110)
  • In Harris County, the value must not exceed $115,000.
slide50

Homeowner Rehabilitation Activities

Property Standards

  • All rehab projects must meet standards

and state/local codes

  • If no local code exists either:
    • Uniform Building Code, National Building Code;
    • Standard Building Code;
    • CABO One to Two Family code; or
    • FHA Minimum Property Standards.
slide51

Homeowner Rehabilitation Activities

Applicant Eligibility

  • Homeowners must:
    • Be low-income; and
    • Occupy the property as their

principal residence.

slide52

Homeowner Rehabilitation Activities

Determining Income

  • Use one of the three definitions:
    • Annual Gross Income under part 5
    • Census long form
    • IRS form 1040 adjusted gross income
  • Document the income
  • Complete documentation and qualification

before assistance

slide53

Homeowner Rehabilitation Activities

Definition of Ownership

  • Fee simple title
  • 99-year leasehold interest
  • Ownership in condominium
  • Ownership/membership in a co-op or mutual housing project
  • Other HUD approved form
slide54

Homeowner Rehabilitation Activities

Long-Term Affordability

No long-term affordability or

occupancy requirements

slide55

Homeowner Rehabilitation Activities

Other Federal Requirements

Other Federal requirements may

apply:

  • Employment/contracting;
  • Environmental reviews;
  • Flood insurance;
  • Relocation; and
  • Lead-based paint.
slide57

Rental Housing Activities

HOME funds may be used for:

  • Acquisition;
  • New construction; or
  • Rehabilitation of affordable rental housing.
rental housing activities
Rental Housing Activities

The developers or owners of the rental

housing may be:

  • Small-scale property owners;
  • For-profit developers;
  • Nonprofit housing providers;
  • CHDOs;
  • Local government;
  • Redevelopment organizations; or
  • Public housing authorities.
slide59

Rental Housing Activities

Eligible Rental Housing Costs

  • Hard Costs
  • Soft Costs
slide60

Rental Housing Activities

Maximum HOME Investment

Maximum amount of HOME funds to be expended per unit based on unit size (one bedroom, two bedrooms, etc.)

Example

A six-unit structure will be rehabilitated with HOME funds. The maximum per-unit HOME subsidy is $40,000. Thus, the HOME subsidy for this project cannot exceed $240,000 (6 X $40,000).

slide61

Rental Housing Activities

HOME-Assisted Units

  • HOME distinguishes between the HOME assisted units and non assisted units.
  • The HOME rent and occupancy rules apply only to HOME-assisted units.
  • The number of HOME-assisted units must be specified at project commitment.
slide62

Rental Housing Activities

HOME-Assisted Units

Example

Great Housing, Inc. is considering a request for HOME funds for a 20-unit building. The HOME-eligible development costs total $400,000, and the developer has requested $100,000 in HOME funds. Since the request equals 25% of the total eligible costs, Great Housing, Inc. must require the project to have at least five HOME-assisted units.

(20 x 25% = 5)

slide63

Rental Housing Activities

HOME-Assisted Units

Properties with both assisted and non-assisted units, must designate either:

  • Fixed units – Same units are HOME assisted throughout affordability period.
  • Floating units – Always have same # of HOME Assisted units, but, units may change over time.
slide64

Rental Housing Activities

Eligible Property Types

HOME rental projects may be:

  • One or more buildings on a single site; or
  • Multiple sites that are under common ownership, management or financing.
slide65

Rental Housing Activities

Rent and Occupancy Requirements

  • 5+ HOME-assisted units, 20% of the HOME-assisted units must be occupied by families who earn <=50% of the median income. (Median Family Incomes are in your packet.)
  • HOME-assisted units are subject to rent limits. These maximum rents are referred to as “HOME rents.”
  • HUD publishes the rent schedule each year. (www.hud.gov)
slide66

Rental Housing Activities

Rent and Occupancy Requirements (cont’d)

Two HOME rents are used.

High HOME Rents are the lesser of:

  • The Section 8 Fair Market Rents (FMRs) for existing housing; or
  • 30% of the adjusted income of a family whose income equals 65% of median income.
slide67

Rental Housing Activities

Rent and Occupancy Requirements (cont’d)

Low HOME Rents

5+ HOME-assisted units, 20% of HOME-assisted units must have rents no greater than:

  • 30% of the tenant’s monthly adjusted income, OR
  • 30% of the annual income of a family whose income is 50% of the median income.
slide68

0 BR

1 BR

2 BR

3 BR

4 BR

$569

$633

$768

$997

$1093

Rental Housing Activities

Rent and Occupancy Requirements (cont’d)

High HOME Rents for Harris County

(Fair Market Rents*)

* Source: U.S. Department of Housing and Urban Development, March 2007.

slide69

Rental Housing Activities

Inspections

Total Number of Units

Inspection Required

1 – 4

Every 3 years

5 – 25

Every 2 years

26 or more

Annually

On-site inspections are performed to verify:

  • Compliance with property standards;
  • Tenants’ incomes;
  • Rents; and
  • HOME rental requirements during the affordability period.
slide70

Rental Housing Activities

Other Federal Requirements

Other Federal requirements may apply:

  • Employment/contracting;
  • Environmental reviews;
  • Flood insurance;
  • Relocation;
  • Lead-based paint;
  • Site and neighborhood standards.
slide71

Rental Housing Activities

Site and Neighborhood Standards

All new construction projects must meet certain site and neighborhood standards*

Examples of these standards include:

  • Amenities available in HOME-assisted units;
  • Proximity to public facilities, schools, etc.;
  • Location outside of an area of minority concentration;
  • Location outside of areas with high concentration of LIHTC (tax credit) or other assisted housing projects;
  • Availability of transportation services;
  • Size of project adequate to accommodate the number and type of units proposed.

*In accordance to HUD regulations (24 CFR 983.6)

slide72

Tenant-Based Rental

Assistance (TBRA)

slide73

What is TBRA?

TBRA is a rental subsidy to help households afford housing costs such as:

  • Rent;
  • Utility costs;
  • Security deposits; and
  • Utility deposits.

Provided to very low- and low-income families. Households are subject to income recertification annually.

slide74

Tenant-Based Rental Assistance

TBRA:

  • Helps individual households.(Rather than subsidizing particular rental projects)
  • Moves with the tenant. (Household can take TBRA and move to another property)
  • Subsidy levels are varied.(Based on household income and the unit the household selects)
slide75

Tenant Based Rental Assistance

Eligible Applicants

  • Tenants who are <=80% of area median income.
  • 90% of the TBRA assisted families and the HOME-assisted households must be <=60% of area median income.
slide76

Tenant Based Rental Assistance

Minimum and Maximum Payment

Minimum tenant payment - Jurisdictions set minimum payment levels for the tenants.

Maximum TBRA payment – Difference between 30% of the household’s adjusted monthly income and the Fair Market Rent.

slide77

Tenant Based Rental Assistance

Property Standards

Inspections:

  • Verify compliance with Housing Quality Standards (HQS)
  • Verify Occupancy standards
  • Are completed at initial move-in and annually during the TBRA.
slide78

CHDO

Community Housing Development Organization

slide79

What is a CHDO?

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.

slide80

CHDO Set-Aside

  • 15% of the HOME allocation must go to housing owned, developed, or sponsored by CHDOs
  • Jurisdictions have 24 months to reserve funds for CHDOs
slide81

CHDO Qualifying Criteria

CHDOs must meet requirements pertaining to their:

  • Legal Status
  • Organizational structure
  • Capacity and experience
slide82

CHDO

Legal Status

To be eligible, organizations must:

  • Be organized under state and local law;
  • Have as its purpose to provide decent and affordable housing to low/mod income persons;
  • Provide no individual benefit;
  • Have a clearly defined service area; and
  • Have an IRS non-profit status.
slide83

CHDO

Organizational Structure

  • 1/3 of the board members must be from the low-income community
  • No more than 1/3 board members can be from the public sector
  • Balance is unrestricted except when sponsored/organized by a for-profit
free legal advice to chdos
Free Legal Advice to CHDOs

Francis Martinez

Staff Attorney

Texas C-Bar

712 Main St., Ste. 2700

Houston, Texas 77002

Ph: (713) 228-0735 ext. 153 or

(800) 369-9270 ext.2710

Fax: (512) 447-3940

slide85

For Harris County CHDO certification information, contact:

Lori Wilson-Reynolds

Program Analyst

(713) 578-2000, ext. 2108

lori_wilson-reynolds@hctx.net

recordkeeping monitoring
Recordkeeping & Monitoring

Overview

  • General recordkeeping requirements
  • Access to records
  • Retention of records
  • Monitoring
  • Reporting requirements
general recordkeeping requirements
General Recordkeeping Requirements

Records should be:

  • Accurate, complete, orderly; and
  • Maintained in order to:
    • Document all HOME funded activities; and
    • Demonstrate compliance with all applicable program and other requirements.*

* According to U.S. Department of Housing and Urban Development Department (HUD) 24 CFR Part 570 and Part 570.208.

general recordkeeping requirements1
General Recordkeeping Requirements

Every organization funded with HOME/ADDI funds is required to establish and maintain the following:

  • Program Records;
  • Administrative Records;
  • Financial Records; and
  • Project Files.
access to records
Access to Records

Records are used to create audits, examinations, excerpts and transcripts. The following have access to records of HOME funded organizations:

  • HCCEDD representatives;
  • HUD representatives;
  • Comptroller General’s Office of the United States;
  • Other authorized governmental agencies;
  • Citizens (24 CFR 570.508).
retention of records
Retention of Records
  • Retain records after annual project activities have been completed to avoid findings.
  • Retain records for five years from the date of submission of the CAPER in which activity is reported for the last time.

For all organizations (per 24 CFR 570.502(b)(3), 24 CFR 85.42, and OMB Circular A-110, Attachment C)

monitoring
Monitoring

The primary mission of monitoring is to ensure that organizations are:

  • In compliance with all regulations governing their administrative, financial, and programmatic operations; and
  • Achieving their performance objectives within the schedule and budget, as outlined in the Agreement.
monitoring1
Monitoring

Five steps in a monitoring visit

  • Notification letter
  • Entrance conference
  • Documentation, data acquisition and analysis
  • Exit conference
  • Monitoring letter
reporting requirements
Reporting Requirements
  • Reporting requirements are specified by the Grantee (HCCEDD) in the Subrecipient Agreement*.
  • Programmatic and Financial Reimbursement Request Reports are due monthly.
  • Quarterly and Annual reports may also apply.

* 24 CFR 570.503(b)(2)

questions
Questions?

Contact:

Shanna LeBrum

Program Analyst

(713) 578-2000, ext. 2051

shanna_lebrum@hctx.net

Or visit our website at:

www.cedd.hctx.net