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2010 DCA CDBG Applicants’ Workshop
CDBG Applicant’s WorkshopHousing Session
Page 22010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
CDBG Housing
• Types of Grants
▪ Single Activity: • Housing Activities Only
▪ Multi-Activity: • Housing PLUS Infrastructure Activities
Page 32010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
CDBG Housing
• Assessing NeedsWhat are the needs community wide?Are there concentrations of substandard housing?Determine the project area (TARGET AREA)
Page 42010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Single Activity
Only Addresses Housing Activities May Include Several Activities
RehabilitationReconstructionAcquisitionRelocationDemolition
Page 52010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Single Activity
Limit of $500,000. May be City/County Wide, Target
Area, Targeted to a Specific GroupElderlyHandicappedWorking Families with Children
Page 62010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Eligible Activities CDBG Single Activity HousingMaximum $500,000.
• Rehabilitation – Of substandard housing
• Reconstruction – Where Unfeasible to Rehab
Page 72010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Eligible Activities CDBG Single Activity HousingMaximum $500,000.
• Acquisition - of Real Property
• Disposition – Costs Incidental to Disposing of Property Acquired with CDBG Funds
• Code Enforcement
Page 82010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Eligible Activities CDBG Single Activity HousingMaximum $500,000.
• Clearance – Of Dilapidated Structures, out-buildings, and Other Items
• Interim Assistance • Relocation – Temporary or Permanent
• Removal of Architectural Barriers
Page 92010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Eligible Activities CDBG Single Activity HousingMaximum $500,000.
• Home Ownership Assistance▪ Down Payment▪ Closing costs
NOTE: DCA policy mandates use of fixed rate mortgages on all CDBG funded projects
Page 102010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Eligible Activities CDBG Single Activity HousingMaximum $500,000.
NOTE: New Construction is NOT eligible unless as “last resort”
OR approved Community Based
Development Organization is used.
Page 112010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Eligible ActivitiesRevitalization Area Strategy Maximum $800,000.
Officially adopt a local Redevelopment Plan in accordance with the Urban Redevelopment Act O.C.G.A. 36-61
Eligible area of Census Block Group(s) of 20% or greater poverty level.
Develop strong local partnerships focusing local resources within the Revitalization Area.
Submit application for designation to DCA. Must be designated by DCA through application
Page 122010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
CDBG HousingApplication Review Process
Application Read and Reviewed by the Housing Panel
Rank and Score based on:
Feasibility of ProjectStrategy ProposedImpact of Project
Page 132010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Feasibility Considerations
• Property Standards• Outside Services and Resources• Lead Based Paint• Funding Sources and Commitments• Operation Oversight• Maps and Overview• Selling Your Project• Costs
Page 142010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Minimum Property Standards
• Realistic Minimum Property Standards – you determine what standards you want in your community.
• Property Standards and Construction Standards.
• Code Violations and Incipient Violations.
• First priority should be given to Health, Safety, and ADA compliance.
Page 152010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Outside Services and Resources
• Identify service required and what service will be rendered.
• Establish estimated cost.
• Procure a FIRM commitment letter specifying on-going services on a cost-per-hour or per project basis.
Page 162010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Lead Based Paint (LBP)
• LBP evaluation is required on any structure built before 1978.
• Evaluation services must be performed by an inspector/risk assessor licensed and certified by the state.
• Lead hazard control work rules are changing – See the EPA Renovation and Remodeling Final Rule (EPA RRP Rule)
• Stay Tuned for EPD Presentation!!• Lead hazard control can be costly, budget 25% of
estimated rehab cost.• Be prepared to seek services outside your local area.
Consider travel and other expenses when preparing your estimate.
Page 172010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Funding, Partnerships, Other Resources.
• Obtain FIRM commitment letters from all parties.• Ensure that the commitment letters are issued and signed
by authorized individuals.• Pledges of support without commitment letters will not be
considered.• Indicate how each will be applied, at what point will these
funds be released.• Owner contributions if required.• General Property Improvements (GPI) are not funded by
CDBG. • Secure firm, convincing documentation of participation
from investor-owners.
Page 182010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Schedules and Time tables
• Who will provide oversight?
• Develop and show a schedule of start and completion dates. Indicate milestones and inspection points.
Page 192010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Contracting and Construction
• Very problematic area.• Qualifying contractors: guidelines and criteria.• “Pre-Bids” and “Scope of Work”.• Bidding process and bid acceptance protocol.• Contract negotiations.• Change Orders protocol.• Draw Request and approval process.
Page 202010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Maps and Photos
• DCA Form 12 spells out what is required on map.▪ Prefer map to be in common scale.▪ Show details: existing structures, street names, subject area(s),
schools, etc.▪ Must include key to photographs.▪ Indicate status of structure (e.g. occupied, vacant, absentee
owner/rental, non-targeted structure.▪ Indicate rehab or reconstruction.▪ INCLUDE FINANCIAL PLAN FORM (EXHIBIT H)
Page 212010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Page 222010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Maps and Photos (cont.)
• Photographs.
▪ Show all 4 elevations if possible.
▪ Interior photos should clearly represent condition of structure and problems described in narrative.
• Photographs of the owner, his or her family, children, in-laws, family pets, automobiles, etc. are not required.
Page 232010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Unit # 10 Roof Leak
Page 242010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Unit #10 Roof Leak Damage
Page 252010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Selling it to DCA
• Exactly WHAT this project will achieve.• Exactly WHY do you need this project.• Exactly WHO will the project impact.• Exactly HOW you will accomplish the project.• Exactly WHERE the target area(s) are located.• DATA, we love data!• BE SPECIFIC!
Page 262010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Feasibility Considerations(Lead Based Paint)
• Lead-Based Paint
Regulation Applies to all Housing Built Prior to 1978
Demonstrate understanding of regulation requirements
Page 272010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Feasibility Considerations
• Financing Technique(s) BE SPECIFIC
Deferred Payment LoansLeveraged Loans/Interest Buy DownsWho are your partners
• Include participation formula
• Know your community! Be realistic with participation formula
Page 282010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Feasibility Considerations
• Confirmation of proposed resources and partners
• Compliance with Applicable Laws
• Investor Owner EligibilityFinancing: 50%, DPL at full term.Rent Regulatory Agreement
• Timetable for proposed accomplishments
Page 292010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Feasibility Considerations
• Unit by unit analysis of proposed activity▪ Include per unit cost estimate▪ Include description of proposed work needed with
pictures illustrating problems (exterior and interior)▪ Complete “Financial Plan” Form (Appendix H)
• Descriptive map of all units targeted
Page 302010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Strategy Considerations
• Describe Severity of problems
• Demonstrate needs in narrative AND with Pictures
• Alternatives to Strategy
• Discuss other possible strategies and why the strategy proposed is best for problems described
Page 312010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Strategy Considerations
• Discuss plan to prevent re-occurrence of problems addressed in grant proposal
• Adoption of policies or ordinances• Code enforcement• Ongoing maintenance
Page 322010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Strategy Considerations
• Marketing of Program
▪ Who has expressed interest in Program?
▪ How will Interested be generated?
▪ Are residents supportive of the program?
▪ Document Commitment from Owner Occupants and Investor Owners!
Page 332010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Impact Considerations
• Impact Of Project▪ Document severity of need▪ Describe the effect the proposed
project will have on the identified needs as well as the community as a whole
▪ How many persons will benefit▪ Overall CDBG Cost per person
Page 342010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Successful Strategies
Owner Financial Participation
Percent of Rehab Cost:
• Required participation is fixed amount according to their income level:
“Participants below 30% AMI will be required to pay $500 towards of the cost of their rehab”
“Participants between 30% and 50% AMI will be required to pay $1000 towards of the cost of their rehab”
Page 352010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Successful StrategiesFinancial Participation
• Percent of Income:
• Required participation is fixed percentage of Annual Income
“Participants will be required to pay 8% of their annual income”
Annual Income = $9,000Required Participation = $720
Page 362010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Successful StrategiesFinancial Participation - Percent of Income
Percent of Income (cont.):
“Participants will be required to pay 8% of their annual income multiplied by the term of the DPL” Annual Income = $9,000 8% of Annual Income = $720 X 5 (length in years of DPL)=$3,600
Page 372010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Successful StrategiesFinancial Participation - Percent of Income
Add a sliding scale of income to percent of income…
Required participation is a fixed percentage of income based on income level:
“Participants whose income is below 30% of AMI are required to pay 3% of their annual income…”
Page 382010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Successful StrategiesFinancial Participation - Percent of Income
…for higher income level:
“…Participants whose income is between 30% and 50% of AMI are required to pay 6% of their annual income…”
Page 392010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Successful StrategiesFinancial Participation - Percent of Income
…for highest income level:
“…Participants whose income is between 50% and 80% of AMI are required to pay 9% of their income…”
Page 402010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Successful Strategies
• Mandatory Homebuyer Counseling
• Credit Counseling
• Employment training
• Holistic approach to neighborhood revitalization
• Address people problems along with housing/infrastructure problems
Page 412010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Compliance with Regulations
• Acquisition
▪ Easements for Public Facility Improvements
▪ Dilapidated Units
▪ Uniform Relocation Act (URA)
Page 422010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Compliance with Regulations
• Relocation – Permanent
▪ Uniform Relocation Act (42 months)Owner OR Tenant
▪ 104(d) “Barney Frank” (60 Months)Tenant Only (Rent to Rent)One for One Replacement
Page 432010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Compliance with Regulations
• Identify Available Resources▪ Comparable Units
• Provide Basis for Relocation▪ Current v. available rents
Page 442010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Compliance with Regulations
Reconstruction
▪ Replacement of Dilapidated Unit on SAME parcel when existing unit is not feasible for rehabilitation
▪ Owner Occupied ONLY
Page 452010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Compliance with Regulations
New Construction Eligibility
• Last Resort▪ No Available Resources Exist ▪ Cost exceeds allowable limits
• Application must provide credible evidence
• Cheaper to build (including parcel) than purchase
• Not-for-profit or for-profit developer▪ Approved Community-Based Development
Organization
Page 462010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Do’s
• Provide a Unit by Unit Analysis
▪ Keyed to Map
▪ Picture(s) of Units (Exterior and Interior)
▪ List of Deficiencies for Targeted Units
▪ Provide Cost Estimates
Page 472010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Do’s
Cost Estimates: Provide estimates based on
complete walk through Keep in Mind that Actual work may be 1
or 2 years away….Budget Appropriately Budget for Lead Hazard Control
Program will pay all LBP Costs
Page 482010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Do’s
• For Target Area’s:
▪ Provide Target Area Data:Total Number of UnitsTotal Number of SubstandardTotal Number of Dilapidated
Page 492010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Do’s
• For Target Area’s:
▪ Provide Target Area Data:Total Number of Owner OccupiedTotal Number of Renter OccupiedTotal Number of Vacant
Describe use where possible (rental, heir property, dilapidated, etc)
Page 502010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Do’s
• For City/County Wide Programs
▪ Describe how units were chosen in a fair and equitable manner
▪ Provide description of overall housing conditions jurisdiction wide• Overall assessment of need for Housing
improvements and justification for the chosen units
Page 512010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Do’s
• Provide Financial Plan!!!
▪ In narrative and form provided in
Appendix H of Applicant Manual
(Exhibit H in Guidelines for Residential Rehabilitation Programs)
• Explain formula for participation
Exhibit H
HousingUnit #
Name of
Owner
Name of Occupant(if rental property)
(indicate vacant if unoccupied)
Type of Unit(SB/Mod. or
MHU)
Income Activity(Rehab/Reco)
CDBG Cost *
Other Funds+
Total Cost
Lead Hazard Control (25% of Total
Cost) (Pre 1978 Rehab only)
Type of Assistance
1 Al
Jones
SB 5000 Rehab 18000 800 18800 4700 DPL
2Jim
Jones
SB 22000 Reco 32000 20000 52000 DPL
3Mike
Smith
MHU 7500 Rehab 4500 500 5000 DPL
4Pete
Peters
SB 19000 Rehab 25000 4000 29000 7250 DPL
* If application is joint CDBG and CHIP the funds should not be mixed in a single unit. Proposed CHIP dollars should be identified as CHIP.+ If client participation is based on cost of rehab, use cost of rehab only (without lead) to determine required participation amount.NOTE: Lead hazard control should be budgeted only for rehabilitation units constructed PRIOR to 1978 at 25% of total rehab cost.
REV 6/04
Page 532010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Don’ts
• Work in Previous CDBG Target Areas or Units
• Propose 100% Grants or 100% DPL’s
• Propose Assistance to Landlords that exceeds 50% of Rehab Cost (Not including Lead Hazard Control)
• Include Elected Officials or their family members without full disclosure in the application (Conflict of Interest)
Page 542010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Don’ts
• Exceed $5,000. TOTAL COST to Rehab a Manufactured Housing Unit without VERY strong justification
• Prepare grant request based on Maximum funds available rather than needs identified
Page 552010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Problems with Previous Applications
• Too Many 100% grants/DPL’s• Proposed Unit Deficiencies not
adequately described • Per Unit cost Estimates not Included• Flat Participation Amounts for All
Participants regardless of income or level of rehab
Page 562010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Problems with Previous Applications
• High Percentage of Rental Properties proposed without convincing commitment to participate
• Lack of consistency throughout application▪ Numbers do not add up or differ from one section to
another▪ DCA 8 does not reconcile with numbers projected in
DCA 5• Failure to present clear financial plan and participation
formula• Failure to describe who will play key roles in program
administration• Failure to address Lead Hazard Control
Page 572010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Problems with Previous Applications
• Failure to adequately describe need for project (Including alternatives to strategy)
• Failure to budget for all needed activities▪ Temporary relocation
▪ Easements/Acquisition
▪ Lead Hazard Control
• Failure to Disclose Conflict of Interest
Page 582010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Don’t Forget:
• Units keyed to map
• If rehab of vacant units is proposed, provide plausible explanation
• Provide Basis for Cost
• Provide clear understandable participation formula
Page 592010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Don’t Forget:
• Include House by House Analysis
• Units keyed to map
• Provide pictures (Exterior & Interior)
• Cost Estimate by Unit
• List of Deficiencies
• Feasibility Test Forms (for Reconstruction)
Page 602010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Don’t Forget:
• If Rental Rehab is Proposed, Include Convincing Commitment Documentation from Owners
• Include Map Identifying all Units, Condition and Proposed Activity
Page 612010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Statutory References
Uniform Act: 49 CFR, Part 24
Section 104(d) “Barney Frank”:
24 CFR, Part 42
Lead-Based Paint: 24 CFR, Part 35
Last Resort: 49 CFR, Part 24.404
e-CFR Website
http://ecfr.gpoaccess.gov/
Page 622010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
Hints
DISCUSS PROPOSED PROJECT
WITH DCA STAFFTom Spinks
404-679-3128
thomas.spinks@dca.ga.gov
Glenn Misner
404-679-3138
gmisner@dca.ga.gov
Page 632010 CDBG Applicants’ Workshop CDBG APP Housing Presentation
GOOD
LUCK
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