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Home My WebLink About20120825.tiff RESOLUTION RE: APPROVE THE ADOPTION OF THE CITY OF FORT LUPTON AND WELD COUNTY STANDARD OPERATING PROCEDURES FOR THE NEIGHBORHOOD STABILIZATION PROGRAMS III (3) GRANT WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to Colorado statute and the Weld County Home Rule Charter, is vested with the authority of administering the affairs of Weld County, Colorado, and WHEREAS, the Board sits as the Weld County Housing Authority Board, and WHEREAS, the Weld County Housing Authority is the administrator of Federal grant funds received from the Neighborhood Stabilization Programs III (NSP3), on behalf of the City of Fort Lupton Housing Authority, and WHEREAS, these policies and procedures are designed to ensure local compliance with the federal requirements of the NSP3, and WHEREAS, after review, the Board deems it advisable to adopt these policies and procedures, a copy of which is attached hereto and incorporated herein by reference. NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld County, Colorado, ex-officio Housing Authority Board, that the adoption of the City of Fort Lupton and Weld County Standard Operating Policies and Procedures for the Neighborhood Stabilization Programs III, be, and hereby are, approved. The above and foregoing Resolution was, on motion duly made and seconded, adopted by the following vote on the 26th day of March, A.D., 2012. BOARD OF COUNTY COMMISSIONERS WELD COUNTY, COLORADO ATTEST: Sean P. Con , Chair Weld County Clerk to the Board (7d / t ` EL IkNilljam F. Garcia, ro-T-m BY: ..") ' Deputy Cli to the Boar. ' ;� r� CG1/7 - �ssi - r a Kirkmeyer APPROVE? . O- avid E. Long Attorney EXCUSED Douglas Rademacher Date of signature: LI-/U- / 'c3- e,t 2012-0825 L} t- O- HA0030 City of Fort Lupton and Weld County STANDARD OPERATING POLICIES & PROCEDURES for the NEIGHBORHOOD STABILIZATION PROGRAMS III (NSP3) 2012-0825 Table of Contents A. Program Overview 3 I. Neighborhood Stabilization Program Background 3 2. Purpose of Policies and Procedures 3 3. Access to Information and Records 3 B. Property Acquisition 4 I. Target Neighborhood 4 2. Property Identification 4 3. Acquisition and Rehabilitation Procedures 4 C. Home Buyer Program 5 1. Long-Term Affordability 5 2. Establishing Listing and Sales Price 5 3. Home Buyer Selection 6 a. General Qualifications 6 b. Application Process 7 c. Purchase Procedures 8 4. Primary Residency Requirement 9 5. Affordability Instrument 9 6. Subsidy Types 9 7. Recapture Provisions 10 8. Loan terms 11 9. Right of Legal Remedy 12 10. Program Income, Recaptured Funds, Repaid Funds 13 D. Rental Program 14 1. Long-term Affordability 14 2. Determining rents 14 3. Household Selection 14 a. General Qualifications 14 b. Application Process 14 4. Affordability Instrument 14 5. Monitoring 15 Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 2 A. PROGRAM OVERVIEW 1. Neighborhood Stabilization Program Background In 2010,Congress appropriated a funds for the Neighborhood Stabilization Program(NSP3)funds under Section 1497 of the Wall Street Reform and Consumer Protection Act(Dodd-Frank Act)of 2010(Pub. L. 111-203,approved July 21, 2010). Weld County was a direct recipient of NSP3 grant funds. Through an intergovernmental agreement with Weld County,the Weld County Housing Authority(WCHA)and the City of Fort Lupton,the City of Fort Lupton will manage the rehabilitation of homes using NSP3 funds under the NSP3 program. Funds will be spent in a targeted neighborhood in Fort Lupton. NSP3 funding allocation was part of a national effort to address the housing crisis by restoration of homes and renewal of neighborhoods hardest hit by the crisis. According to the terms of the agreement,the Housing Authority will own the homes identified by the City of Fort Lupton for purchase using NSP3 funds,and Weld County will provide additional administrative support for the operation of the program. Using NSP3 funds, it is the intention of Fort Lupton to purchase and rehabilitate 5 homes and to purchase,demolish,and rebuild one home. Two of these homes will be transferred to the Fort Lupton Housing Authority to be used in their rental program. The remaining four homes will be sold to income eligible buyers. 2. Purpose of Policies and Procedures The purposes of the City of Fort Lupton Policy and Procedures with regard to affordability are to: • Provide a clear understanding to the citizens of Weld County and the City of Fort Lupton of the rules to be used in the administration of this program. • Ensure all federal, state,and local rules,regulations, and program requirements with regard to affordability are followed. [Federal policy with regard to NSP affordability can be found in Federal Register Vol. 73,No. 194, Section II(B)(3).Minimum standards defer to the HOME Investment Partnership Program: 24 CFR 92.254- homeownership affordability requirements;24 CFR 92.252-rental affordability requirements.] • Ensure adequate and appropriate policies and procedures are in place to legally enforce affordability requirements. • Ensure all homes sold through the NSP program are affordable for a long term,based on the direct subsidy to the homebuyers This policies and procedures manual is organized into several sections,including: • Property acquisition • Affordability policy: -For sale units -Rental project units. • Applicant Selection procedures In the event that that anything stated in these policies and procedures conflicts with program regulations,the regulations take precedence and the policies and procedures will be corrected. 3. Access to Information and Records All documents related to the administration of the NSP program by the City of Fort Lupton are available at: City of Fort Lupton 130 S. McKinley Avenue Fort Lupton,CO Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 3 B. PROPERTY ACQUISITION 1. Target Neighborhood Under the NSP program,properties to be acquired must be located within target areas that have been hardest hit in the community. In their application for NSP3 funds,the City of Fort Lupton designated a target area for the program that includes a neighborhood north and east of 91°Street and Pacific within the City of Fort Lupton. 2. Property Identification Properties to be purchased include homes in the target neighborhood that have been foreclosed on and are bank-owned (REO properties)or vacant or abandoned homes as defined by HUD. It is the intention of the City of Fort Lupton to purchase only home that have been vacant for period of time,but should any home be occupied at the time of purchase, relocation benefits would be available to occupants under certain circumstances. 3. Acquisition and Rehabilitation Procedures The City of Fort Lupton has issued a request for qualifications to identify real estate brokers and appraisers to assist in the acquisition of property. Steps in the purchase process will include: • Real estate broker will identify a list of homes available within the target neighborhood; • The city will view homes and develop an estimate of the work necessary to bring the home to habitable standards; • If the amount of rehab is achievable within the amount of funds available,the city will make an offer on the home; • It should be noted that,although the City of Fort Lupton has the power of eminent domain, such power will not be used in the acquisition of these properties and such notice will be delivered with the offer to purchase; • An appraisal of the property will be ordered from a qualified appraiser; • NSP regulations state that properties must be purchased for a maximum price of 1%below the appraised value of the property. The appraisal will be compared to the purchase price in the offer and adjusted if necessary to meet NSP requirements; • A property specific environmental review will be completed; • A detailed scope of work for the rehabilitation will be developed based upon the rehab standards included as Attachment B to this document; • After closing on the property, licensed contractors identified through a competitive process will be identified to complete any environmental mitigation on the property and to complete the necessary rehab work; • Upon completion,the WCHA will transfer the property to a homeowner or to the Fort Lupton Housing Authority; • The city will be required to monitor all properties to ensure continued compliance with NSP3 requirements. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 4 C. HOME BUYER PROGRAM The City of Fort Lupton will be selling four of the six homes that will be purchased and rehabbed. This section covers the policies and procedures to be used in determination of the period of affordability for each property,the sale price, selection of buyer, and the affordability requirements attached to the property. In addition,this section provides an overview of the documents the secure the NSP investment in the property. 1. Long-Term Affordability NSP imposes regulations that are designed to ensure assisted properties remain affordable to income-eligible occupants for a proscribed period of time. Regulation further provides for NSP grantees to use the HOME Investment Partnership Program(HOME)as the minimal affordability standard,which allows for either a resale or recapture provision(HOME- 24 CFR 92.252(a),(c),(e), and(f)and 92.254). Weld County will secure and ensure the long-term affordability for NSP units through the HOME recapture provision (described in Section IV). Recapture provides the mechanism for the County to recover all or a portion of the direct NSP assistance in the unit should the initial NSP-assisted homeowners decide to sell the house within the affordability period. The affordability period is based on the amount of direct NSP assistance that enables the homebuyer to purchase the property, as noted in the table that follows. Weld County will provide for direct subsidies to homebuyers in an amount not to exceed$14,999.00,thus the affordability period for NSP3 will be five years. The direct subsidy is discussed under Section V. Per Unit NSP Direct Assistance Minimum Affordability Period Under$15,000 5 years $15,000-$40,000 10 years Over$40,000 15 years New construction of rental housing 20 years Affordability requirements and recapture provisions will be articulated to potential purchasers at various stages in the process by the applicant's Realtor, listing Realtor,or the City to ensure that homebuyers are aware of these considerations and requirements. After the period of affordability ends,the direct subsidy loan and provisions of recapture will expire,and the indebtedness will cease to exist.Any recorded instruments securing the property will be released and all affordability requirements are complete.They homeowner then has no further obligation under the NSP program. 2. Establishing Listing and Sales Price ▪ Initial List Price—The initial list price(potential sales price)of a NSP-assisted home will be the value as determined by means of a Broker's Price Opinion(market analysis),and will include comparable sales prices for similar homes in the immediate vicinity of the home. (Immediate vicinity may include areas not typically thought of as"immediate"if needed to adequately find sales comparables.) Ideally,the list price will become the contract price.However,the initial list price is subject to additional NSP pricing restrictions and may change,thus the contract sales price and initial list price may differ. ▪ Sales Price—NSP regulations limit the maximum sales price for a home to the acquisition cost plus rehabilitation and/or redevelopment costs.None of the following may be included when calculating a maximum sales price: Carrying costs(such as lawn maintenance,snow removal,or utility payments),developer fees,administration costs.The sales prices may be further limited if the market value of the finished property is less than the cost of acquisition,rehab/redevelopment,and other eligible development costs. Because of the location,size,and type of housing acquired and rehabbed/redeveloped under the NSP, sales prices will not exceed a price affordable to a household earning 120%or less than the Area Median Income.The WCHA will ensure,however,that principal- interest-taxes-insurance(PITI)payments are affordable as directed in FHA guidelines to prospective buyers.(This issue is dealt with further in the Applicant Selection Criteria and Application Process Policies and Procedures.) ▪ Appraisals—Once under contract,the program applicant must secure a primary lender appraisal of the property. The appraisal must be completed by a licensed appraiser,be consistent with the Uniform Standards of Professional Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 5 Appraisal Practice,and conform to the appraisal requirements of the Uniform Relocation Act(URA)at 49 CFR 24.103.The appraisal cannot be more than 45 days old. The appraisal cost is will be paid for as part of the direct subsidy to the buyer(see Section V for discussion of direct subsidies). If the appraised value is lower than the contract price,the contract price will be adjusted to equal the appraised value of the property or to a loan-to-value that meets the primary lender's requirements.The appraisal will document the real market value of the property. • Household Restrictions—NSP units may not be sold to households earning more than 120%than the Area Median Income. Further restrictions also apply and are discussed in the Applicant Selection Criteria and Application Process Policies and Procedures. 3. Home Buyer Selection a. General Qualifications There are a number of general requirements to be met in order to be eligible to purchase a NSP3 home, including: • Applicant(s)must be a U. S. citizen or legal resident of the United States and of legal age for signing legal documents. • Applicant household must occupy the NSP unit as the household's primary residence for a minimum of five(5) years,or as set forth in the affordability policy. This program is for owner-occupants only. • A minimum of eight hours(by NSP regulation)of housing counseling as described under the Homebuyer Application Process must be completed prior to making an offer on a NSP property and certificates of completion provided to the WCHA.Once completed,the certificates will remain viable for a period of not to exceed six months,after which the counseling requirements must be repeated. • Applicant must be able to qualify for a traditional, 30-year,fixed rate conventional or government-insured first mortgage.No other type of first mortgage is allowed under this program. • Applicant must be able to secure hazard insurance on the property purchased and name the City as an additional insured. • Applicant must sign a Permission to Share Information form,so that the City can access any needed documentation from the first mortgage lender. In addition to these general requirements,the following requirements related to income and affordability must be met: • The applicant household can earn no more than 120%of the Area Median Income(AMI).AMI is determined and published annually by the U. S. Department of Housing and Urban Development. AMI charts will be provided to the listing Realtors for dissemination to interested applicants or Realtors.City staff must review and verify the income calculations prior to applicant approval. • Applicant must have an established credit history.(FHA credit guidelines will be followed,including allowing for non-traditional or insufficient credit histories in lieu of two lines of credit on a credit history.) • Applicant must meet the required debt to income ratios of 33/41 or the current published ratios of the Federal Housing Administration(FHA). (Principal-interest-taxes-insurance payment-PITI plus an estimate of utility costs- can be no more than 33%of the gross income;all debt can be no more than 41%of gross income.)Utility costs (electric,gas,water)will be estimated at$100. • The house being purchased must be affordable to the applicant, i.e.all housing costs(PITI and estimated utilities) cannot exceed 33%of the gross income of the household. • Applicant must provide the required down payment from personal funds. Gift funds will be considered on a case- by-case basis and in consultation with the primary lender. (The WCHA will accept third place in the mortgage tier for the forgivable loan under this program when necessary.) • No co-signers on the loan are allowed. Under NSP,no person may be on the title to the home who does not reside there. Those persons on the promissory note and deed of trust are to occupy the unit. • Applicant must incur no additional debt from point of application to closing on the purchase. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 6 b. Application Process The following steps lay out the process of applying to purchase a home: 1. Potential homebuyer(applicant)determines an interest in the Neighborhood Stabilization Programs(NSP)and enlists the services of a Realtor familiar with the NSP.A pre-offer meeting with the applicant and Realtor(and City staff if necessary)is required to review the program requirements under the homebuyer agreement. It is important that the applicant understand the obligations under this program from the beginning. 2. Applicant meets with a primary lender, is provided with information on the NSP,and is pre-qualified. (A pre- qualification letter must be received by City staff prior to its processing the application.)Pre-qualification is not a guarantee of complete approval,either by the primary lender or the City of Fort Lupton. Following the primary lender meeting,the City should be provided with the following documents(see also Checklist for Primary Lender). • Primary Lender's Certification of Compliance • Authorization to Share Information • Completed, signed,and dated FHA Form 1003 (URLA) • Completed signed and dated FHA Form(92900(Addendum to URLA) • Copy of credit report with credit scores for all borrowers • Primary lender's Good Faith Estimate and Truth-in-Lending Disclosure(signed and dated) 3. Applicant meets with City Staff to provide any signatures needed for Disclosures, Verifications,etc.,to complete the Homebuyer Pre-Qualification Checklist with staff, and provide other documentation as noted below: • Affidavit of Lawful Presence • Authorization to Share Information form(if not already completed with primary lender) • Eligibility Release Form • Homebuyer Statements form • The City will provide a Lead Paint Booklet(if applicable),Privacy Notice,and Settlement Statements Booklet • Photo identification(must be one of the types noted below) • Current Colorado Driver's License or Permit • Current Colorado Identification Card Issued by Department of Motor Vehicles • United States Military Card • United States Military Dependent Identification Card • United States Coast Guard Merchant Mariner Card • Native American Tribal Document • Proof of income to include the items listed below. Income verifications are good for six months,but if a property doesn't close within 60 days, income must be re-certified. Buyer(s)will be required to sign a statement prior to closing that there have been no changes to income since the original certification. Specific procedures to calculate household income are included as Attachment A. • Most current tax return(if applicant doesn't have a copy,he/she must also sign a"Request for Copy of Tax Form"for mailing to the IRS.This will prolong the process.) • Three months of current pay stubs • Verifications of Deposits(VOD) • Verifications of Employment(VOE)for all qualified wage earners(all wage earners over age 18 in the household must sign VOE and VOD forms for CITY OF FORT LUPTON to mail) • Other income verifications as are pertinent to applicant(s) 4. The Applicant must schedule and complete homebuyer counseling prior to closing on the property.An applicant must receive eight hours of HUD-approved housing counseling from an agency approved by the Weld County Housing Authority. The certificates of completion must be provided. 5. Applicant must then submit other required pre-approval information to the City(as noted below)to ensure applicant selection criteria have been met. Failure to provide all documents required within two weeks of receipt of the housing counseling certifications will result in placing the application at the bottom of the applicant pool. • Certificates of completion of housing counseling requirements(see Item 5-Documents Needed for Program and Loan Applications to be Complete) Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 7 • Pre-approval letter from first mortgagee(see Item 5-Homebuyer Application Process) • Meet with staff to review the NSP, loan documents,and City information packet. Provide applicant with Privacy Notice. • Applicant(s)review and sign Part 5 Annual Income Computation form. Upon receipt of all of the above,applications will be dated(including time of receipt)and a Contract to Buy/Sell Real Estate can be accepted(see#7). Applications will be processed on a first come,first served basis using the date and time of the application receipt and receipt of all needed information. Following receipt of the above noted items,the City will review and mail a notice of acceptance to the program,denial,or that additional information is required.The applicant(s)has two weeks from the date of application to provide all of the above noted information.Failure to provide the information will drop the applicant to the bottom of any list of program applicants. Applicant(s)will then continue with approval of first mortgage and the WCHA's second(or third)mortgage. c. Purchase Procedures Post Program Approval(Approval may be denied if there are material changes to any of the information submitted by the applicant(s)). 7. Once in receipt of the WCHA's acceptance letter, applicant makes final house choice and writes an offer for the list price of the property on the Colorado Contract to Buy and Sell Real Estate(Residential)form.Contract is submitted to the City, signed and dated, for acceptance and signature. 8. Also completed and submitted are other real estate purchase documents and disclosures,to include: • Closing Instructions • Lead Based Paint Disclosure and Booklet,as applicable • Square Footage Disclosure • Seller's Property Disclosure • Source of Water Addendum 9. Title commitment is ordered title company, an appraisal is ordered,and a property inspection completed(at buyer's discretion and expense). 10. Primary lender completes the processing of the first mortgagee, including obtaining a property appraisal. If the lender appraisal is less than the list price,the Weld County Housing Authority will lower the price to equal the appraisal. (Regulation states a property may not sell for more than the lesser of the total development cost or the appraised value.)Lender provides any of the documents noted under#3 not previously provided.An application is not complete until all required documents have been received. 11. Weld County must also receive a copy of the following prior to closing: • Flood certification • Proof of property insurance with the Weld County as a named insured • Title commitment 12. Weld County Housing Authority will draw up its loan documents and Homebuyer Agreement for closing. 13. The City or WCHA staff meets with applicant(s)to re-certify income 24-48 hours prior to closing. Recertification will consist of the borrower's signing the Certification of No Change in Income and Assets form. If a material change has occurred that makes the applicant(s)ineligible,closing cannot occur.(For example,the household decreased by a person causing the household to be over income.)Any warranty information, information pertinent to the property itself,and a packet of City information will be provided to the applicant(s)at that time. 14. Closing will be conducted by a title company.Documents will be recorded with the Weld County Clerk and Recorder.The homebuyer will be provided with a copy of the recorded documents. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 8 15. Weld County will,at a minimum, annually remind homeowners of their obligations under the NSP. Homeowners will be required to certify they are still the occupant of the purchased unit and that it is their primary residence. WCHA will follow its Loan Policies and Procedures with regard to providing the required loan forms to the applicant(s), i.e.Good Faith Estimate,Truth-in-Lending Disclosure, loan servicing, loan management, etc. 4. Primary Residency Requirement Any unit purchased through the NSP must be continuously occupied as the primary residence by the homeowner(s)for the full period of affordability.To ensure this requirement to the greatest extent possible,re-payment of the direct subsidy, forgivable loan is not allowed. WCHA will conduct annual re-certifications to verify continued owner occupancy. Failure to re-certify owner occupancy is a default against the loan and can cause the loan to become due and payable. 5. Affordability Instrument Long-term affordability will be secured through the use of a promissory note,deed of trust, and homebuyer agreement in favor of Weld County Housing Authority(second or third mortgage). The NSP deed of trust will be junior to any first deed of trust(and in some cases to a second deed of trust,as well)and will provide for the program's recapture provisions.A copy of the promissory note,deed of trust, and homebuyer agreement will be provided to the homebuyer upon completion of the recording of the deed of trust and homebuyer agreement. Sample of these documents are included as Attachment C to this document. All affordability restrictions will be released by Weld County Housing Authority upon resale or foreclosure and recapture of funds or completion of the affordability period,with a copy of the release provided to the homeowner. 6. Subsidy Types Two types of subsidies(development and direct)will be provided under NSP3, as defined below: • Development Subsidies—Development subsidies are the amount between the true cost of developing a property (total of acquisition,rehabilitation, soft costs, sales costs,etc.)and the appraised value. Development subsidies will be written off and no repayment will be required by the homeowner. Development subsidies occur because of high-quality rehabilitation,energy improvements,and environmental clean-up(lead,asbestos, methamphetamine,mold)completed on homes that are generally in poor condition and in a housing market(high foreclosures, serious decline in property values)that does not support a return on the improvements done. Because stabilization of neighborhoods is the purpose of the NSP,the regulations allow for and encourage these substantial improvements. Sales prices will be set according to regulation as the lesser of total development cost of a property or the appraised value. Because of the total costs associated with the NSP properties, it is fully expected that each property will sell at the appraised value and thus incorporate a development subsidy. If the appraised value exceeds the true development costs,the property will sell for the costs and no development subsidy will apply. Development subsidy example: True cost of unit development $180,000 Appraised value(sales price) 130,000 Development subsidy(no 50,000 repayment is required by the buyer) • Direct Subsidies—Direct subsidies will consist of an amount provided to each buyer sufficient to achieve long term affordability,not to exceed$14,999.00.Buyers may not decline this assistance,nor accept less than the full amount needed as determined by the WCHA. Weld County has opted to provide direct subsidies as loans,forgivable on a pro-rata basis over the period of affordability with 100%forgiveness possible if the original owner satisfies all terms of the recapture provisions. The affordability instruments noted in an earlier section of this document will be used to secure the loans. The Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 9 term of the direct subsidy loan shall be equal to the required minimum affordability period(five years).The loan term begins on the loan closing date and continues for a full five years following that date with 1/60 forgiven monthly. The following example illustrates how the direct subsidy is calculated: Development Cost for the house $180,000 Appraised value 130,000 Development subsidy 50,000 Homeowner does not repay Sales price 130,000 Home buyer assistance 3,900 Calculated to ensure long term affordability Direct Subsidy 3,900 This is the amount of the second mortgage.This amount is forgiven over a five year period. If the home is sold or ceases to be the primary residence during this five year period,pro-rated payment will be necessary. 7. Recapture Provisions Under the recapture provision: • The homeowner may sell the property to any willing buyer(no income restrictions)at any sales price(need not remain affordable),subject to the recapture provisions stated in these policies and the affordability instruments. • The sale of the property during the affordability period triggers recapture of the direct NSP subsidy received by the homeowner at the original purchase of the home and as specified in these recapture provisions. • Transfer,rental,non-occupancy,or failure to provide annual recertification of owner occupancy by the owner triggers repayment provisions because the unit can no longer be considered a NSP-assisted unit,and the City must recoup all or a portion of the NSP assistance.As noted in Section III,homeowners are required to occupy the purchased property as their primary residence and provide annual certification that this requirement is being met. • A sale(including short sale)or foreclosure ends all affordability and owner-occupancy requirements(discussed later in more detail). HOME regulations allow for one of the following four options to satisfy recapture requirements: • Recapture entire amount • Reduce the amount on a pro-rata basis for the time the homeowner has owned and occupied the house measured against the required affordability period.(Weld County has opted to use this option as its means of recapture.) • Share in net proceeds • Return owner investment first In the event that recapture provisions are triggered,recapture is limited to the net proceeds from the sale.Net proceeds are defined as the sales price minus non-HOME loan repayments and any closing costs. Unforgiven loan funds(direct subsidy)will be due to the Weld County Housing Authority in the event of any of the following occurrences prior to the expiration of the loan term/period of affordability subject to provisions discussed in more detail below: • Voluntary sale of unit,including short sale • Foreclosure • Title transfer(such as upon death of homeowner) • Unit is not continuously occupied by homeowner • Unit is rented Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 10 • Unit is refinanced during period of affordability(Refinance is not allowed under the terms of the recapture provisions during the period of affordability.If, for some reason, it occurs without the WCHA knowledge and This is subsequently discovered the event,recapture provisions are triggered.) • Failure to provide the required annual recertification of continuous owner-occupancy 8. Loan terms NSP loans will comply with Weld County Loan Policies and Procedures, included in a separate section of this document. Weld County will abide by all fair housing and fair lending laws.All provisions will be applied consistently and fairly to all homeowners. • Every household will receive an amount sufficient to ensure affordability(not to exceed$14,999.00)as a direct subsidy, all or part of which are subject to recapture on a pro-rata basis if affordability provisions are not met. The homebuyer may not decline nor reduce the amount of subsidy provided. • The direct subsidy is a five-year loan and may be in second or third position. • No interest will be charged and no payments will be accepted(no option for pre-payment). • As noted in Section V,the loan will be forgiven on a pro-rata basis at a rate of 1/60 each month that the homeowner continuously occupies the residence,beginning one month following the date of closing. When and if all affordability requirements are met,the loan will be 100%forgiven, and recorded instruments securing the loan (second mortgage)will be released at the end of the five year term/period of affordability. • No refinance of first mortgage will be allowed during the period of affordability. As noted above, if the first mortgage is refinanced without the WCHA's knowledge,the loan is in default and recapture provisions as stated in this document are triggered. • Homeowners will not be required to repay more than the original amount of the direct NSP subsidy,nor more than the net sales proceeds. (Net proceeds are defined as the sales price minus superior,non-HOME debt minus closing costs). • In any event funds must be returned to the Weld County Housing Authority,payment becomes due and payable immediately(or at closing in a sales situation). a. Recaptured funds— Voluntary sale prior to end of affordability period(including short sale or deed-in-lieu of foreclosure) • In the event the homeowner voluntarily sells the unit during the affordability period,recapture provisions are triggered. Recapture will be based on the unforgiven portion of the loan and net proceeds(as defined above). • If there are net proceeds greater than the remaining loan(direct subsidy),the WCHA will first recapture the remaining,unforgiven portion. Any remaining proceeds belong to the homeowner entirely and are considered to be the fair retum on the homeowner's investment. • If a sale results in fewer proceeds available than are required to meet the demands of all liens and owner investments,the amount to be recaptured will be based on the net proceeds available from the sale,rather than the entire remaining amount of direct subsidy.The WCHA will recapture any amount available from net proceeds up to the amount of the remaining loan and that amount will be considered full payment of obligations under the affordability/recapture agreement. In this case,fair retum to the homeowner is nothing,due to net proceeds being insufficient to satisfy the recapture fully. • If there are no net proceeds from the sale,repayment will not be required and the affordability period will be considered satisfied.Again,"fair return"will be nothing. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page I1 • The County has the option of approving of any short sale. Recapture in the case of a short sale will be based on net proceeds only,and follow the same provisions set forth above. Any amount(or no amount, if applicable) recaptured will be considered full payment against the affordability/recapture agreement. b. Recaptured funds—Default due to foreclosure • Affordability instruments,as discussed in Section IV, will apply to every NSP-assisted home,to ensure notice is provided to the County in the event of foreclosure,resale,or short sale. • Recapture,in the case of foreclosure,is based on net proceeds alone. If there are no net proceeds,the affordability restriction is terminated. c. Repaid funds—Default due to non-occupancy as primary residence or rental of unit • If,during the period of affordability the homebuyer ceases to occupy the property as the primary residence,default occurs,and the following steps will occur: • The Weld County Housing Authority will contact the homeowner,remind them of their obligations under the promissory note,deed of trust,and homebuyer agreement,and attempt to bring the unit into primary- residency compliance. • If re-occupancy doesn't occur,the un-forgiven portion of the loan(direct subsidy)amount will be due and payable by the homeowner. (24 CFR 92.254(a)(5)(ii)states: "Recapture provisions must ensure that the participating jurisdiction recoups all or a portion of the HOME assistance to the homebuyers, if the housing does not continue to be the principal residence of the family for the duration of the period of affordability. The amount to be repaid will be equal to the unforgiven portion of the loan. Repayment of that amount will satisfy both the homeowner's and the County's responsibility to HUD. • Due diligence, in addition to contacting the homebuyer with regard to the default and proving a chance for re-occupancy will include: • Annual reminders mailed to homeowners,thus trying to avoid a repayment situation. • Allowing for a lease term to expire and continuing with the affordability after expiration(in the case where a home has been rented and a tenant has a lease).The affordability period will thus be extended past five years by the length of any lease. • Setting up a payment schedule for repayment of the unforgiven portion of the loan with a term not to exceed the original term of the forgivable loan. • Turning over the file to County attorneys for collection by whatever means allowable under the law,the costs of which will be the responsibility of the homeowner(s). • Any amount the County is able to receive as repayment and return to HUD will satisfy the obligations of the homebuyer and Weld County and the City of Fort Lupton. Repaid funds—Default due to title transfer or buyer misrepresentation • Any unforgiven portion of the loan(direct subsidy)will be due and payable upon any title transfer or upon discovery of any misrepresentation by the homeowner.The same due diligence provisions noted above will apply. 9. Right of Legal Remedy In any event that the homeowner does not satisfy the full terms of affordability and recapture, Weld County Housing Authority and the City of Fort Lupton reserve the right to pursue any remedy allowable under HUD regulations,and the Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 12 law for full payment by any legal means necessary. Payment of legal or any other fees will be the responsibility of the homeowner. In cases where the Weld County Housing Authority is unable to collect even after due diligence,attorney costs will be paid for with NSP funds as an administrative cost. 10. Program Income, Recaptured Funds, Repaid Funds • Program income would occur if payments were being accepted against the loan(direct subsidy)amount. Since no payments will be accepted,program income will not be generated in this manner. • Recaptured funds may occur with sale, short sale,or foreclosure.Under NSP3,recaptured funds are program income(this is not the case under HOME regulations)and are treated as such. • Repaid funds occur when a homeowner defaults on the affordability agreement. Funds collected under defaults are returned directly to the U. S. Department of Housing and Urban Development(NSP3),or as otherwise instructed by HUD.No administration fees can be subtracted from repaid funds. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 13 D. RENTAL PROGRAM The WCHA plans to purchase two units of housing that will be renovated by the City of Fort Lupton and subsequently sold to the City of Fort Lupton Housing Authority for rental. Rental projects will follow the minimum affordability requirements of the HOME Investment Partnership Program;however because the two rental projects noted above were identified as helping meet the NSP requirement that 25%of grant funds be used to assist persons earning 50%or less than the Area Median Income(AMI),all beneficiaries(tenants)of these two properties must have incomes of no more than 50%of the AMI for the entire period of affordability. 1. Long-term Affordability To ensure long-term affordability,a Beneficiary and Use Covenant was executed at closing and then recorded against the corresponding property. The Beneficiary and Use Covenant covers a stated term of 20 years,as required by the minimum HOME requirements. 2. Determining rents Maximum rent shall not exceed the Fair Market Rents(FMR)for the Greeley Metropolitan Statistical Area(MSA)as published annually by the U. S. Department of Housing and Urban Development. If FMR exceeds the High HOME Rent, the lesser rent shall be used. Annual updates may also be found online at: httn://www.huduser.org/datasets/fmr.html. The agency must provide to WCHA a maximum monthly allowance for utilities and services(excluding telephone). Rents cannot exceed the maximum rent minus the monthly allowances for utilities and services. 3. Household Selection a. General Qualifications In order to be eligible for the rental program,the applicant(s)must be a U. S.citizen or legal resident of the United States and of legal age for signing legal documents. The applicant household can earn no more than 50%of the Area Median Income(AMI). AMI is determined and published annually by the U. S. Department of Housing and Urban Development. Income must be verified by the Part 5(Section 8)method. Sample forms are available from WCHA upon request. All files must contain documentation that the tenant meets the terms stated above.Additional information on Part 5 income verifications is included in Attachment A. The NSP permits income verification dated no earlier than six months prior to receipt of assistance;however, households must income qualify at occupancy. Thus Weld County will require both an initial verification of income and a recertification of income within 48 hours of the lease date. During recertification,the applicant is required to submit any new income information and to certify as to their current income. b. Application Process The Fort Lupton Housing Authority will be responsible for developing its own application process in accordance with NSP regulations. Prior to transfer of the properties,the City of Fort Lupton must be provided with a copy of the process for review and approval. The following data should be included as part of the application process: • Move-in date(date tenant has or will take occupancy of the unit) • Effective date(date of the income certification. For move in,this should be the move-in date.For annual recertification,the effective date should be no later than one year from the previous(re)certification. • Name of the NSP project • Address of units, including unit number, if applicable • Number of bedrooms in the unit 4. Affordability Instrument In order to ensure compliance with the affordability requirements, WCHA will require that the Fort Lupton Housing Authority sign a Beneficiary and Use Covenant to include the following: Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 14 • Income eligibility—All units must be affordable to households whose income is equal to or less than 50%of the current Area Median Income(updated annually by the U. S. Department of Housing and Urban Development) based on when the household initially occupies the unit.(If HUD ceases to publish AMI levels on an annual basis, an equivalent index designated by CDOH will apply.)See Attachment A for information on the calculation of income requirements that must be followed when renting an NSP house to a household. • Affordable rents—Rental units must have rents that are the lesser of the Section 8 Fair Market Rent,as periodically established by HUD, less the HUD-approved utility allowance for tenant paid utilities OR the HUD Area Median Income rents, less the HUD-approved utility allowances. • Long term affordability—The properties must remain affordable for a term of not less than 20 years,as required by HUD under the NSP3. • Termination—The covenant may terminate upon foreclosure or transfer in lieu of foreclosure unless the Owner of Record,before the foreclosure,or anyone with business or family ties to the Owner,obtains an ownership interest in the property through the foreclosure. • Change in use—If the properties are not used for housing the above described beneficiaries at the above described rents for 30 years following the date of project closeout,the Owner, its successors and assignees,heirs, grantees or lessees shall be required to repay the State the grant funds attributed to this property,unless the State authorizes the transfer or repaid funds to one or more public housing entities or private non-profit corporations. • Enforcement—The U. S. Department of Housing and Urban Development, Weld County, WCHA and the City of Fort Lupton or appropriate representatives thereof may enforce the Covenant. • Release—The Weld County Housing Authority will record a release of the Covenant upon satisfaction of the terms of the Covenant and the owner, its successors,assignees,heirs,grantees, and lessees will be no longer bound by the terms. To further ensure long-term affordability,the Weld County Housing Authority will enter into agreements with the Partnering Agency through an Agreement, Deed of Trust,and Promissory Note.(Both the Agreement and Deed of Trust will be recorded.)The agreement will describe, in part,the following: • Additional beneficiary requirements • Marketing requirements • Reporting requirements • Program income • Other responsibilities of the owners • Monitoring requirements for continued affordability,tenant selection,and housing quality standards 5. Monitoring Weld County Housing Authority will annually monitor the projects for compliance. Records and files must be maintained in a manner that provides for ease of monitoring. Monitoring will include inspection of property as required to ensure the housing quality standards are met,and a review of income recertification to be completed annually. The HOME Final Rule allows for one of three methods to recertify tenant incomes. • A review of source documentation,as done at initial occupancy • Written statement from the household indicating household size,annual income and including certification from the family that the information is correct and that source documents will be provided upon request. • Written statement from the administrator of another governmental program under which the household receives benefits and that examines the annual(gross)income of the household each year.The statement must indicate family size or provide the current income limit for the program and state that the household's income does not exceed the limit. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 15 With regard to the NSP program,Weld County will allow for recertification via the second method noted above.However, the agencies are required to review full source documentation every sixth year of the affordability period(20 years). Recertification should be conducted on the anniversary date of the lease. It is possible that rental projects can generate program income,depending upon the rents and expenses associated with the project. Should program income be earned for a rental project, such income must be returned to Weld County for return to HUD.Monthly income and expense information must be submitted to the WCHA for their review to determine if program income has been earned. County staff will work with the Housing Authority to determine the type and schedule of reporting required in order monitoring program income. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 16 ATTACHMENT A: VERIFICATION OF INCOME The NSP permits income verification dated no earlier than six months prior to receipt of assistance;however,households must income qualify at occupancy.Thus the Weld County Housing Authority requires both an initial verification of income and a recertification of income within 48 hours prior to closing.During recertification,the applicant is required to submit any new income information and to certify as to their current income. • For the types of income counted in the Part 5 definition,gross amounts(before any deductions have been taken)are used. • The Part 5 definition contains income"inclusions"(types of income to be counted)and"exclusions"(types of incomes that are not considered)for all adult members of a household. • Part 5 annual income is used to determine eligibility and the amount of Federal assistance a family can receive.Therefore,Weld County Housing Authority must use a household's expected ability to pay,not their past earnings,when estimating housing assistance needs.(That is, Weld County Housing Authority must look forward to see if anything would cause a family to go over income,such as a child graduating from college and moving out of the household.)Weld County Housing Authority will assume that the current circumstances will continue for the next 12 months unless there is verifiable evidence to the contrary. • Applicants will be asked if they know of any income change expected(for example an annual review with a known wage increase)and required to certify that there is or is not any known change.Misrepresentation of known changes is fraudulent,and could hold consequences for the applicant(s)/homebuyer(s). • When requesting a copy of a tax return,IRS Form 4506"Request for Copy of Tax Form"must be completed and signed and kept in the applicant's file.If receiving a copy of the tax return from a first mortgagee,they must include this form. Determining household size Because income limits are adjusted by household size,the Weld County Housing Authority must first determine the size of the applicant's household.For purposes of determining size,the following are not considered to be part of the"household"and their incomes are not considered: • Unborn children • Children being pursued for legal custody or adoption who are not currently living with the household • Foster children,foster adults • Live-in aides,children of live-in aides A child who is subject to a shared-custody agreement in which the child resides with the household at least 50 percent of the time can be counted as a member of the household. Applicants will be asked to name all household members and certify as to its accuracy. Whose income to count Under the Part 5 definition of annual income, income from certain groups of people requires special consideration when calculating a household's annual income,as noted below: • Minors(age 17 and under): Earned income of minors(age 17 and under)is not counted when calculating a household's Part 5 annual income. Unearned income attributable to a minor,however,is counted in a household's Part 5 annual income. Examples of unearned income attributable to a minor include child support,TANF payments,other benefits paid on behalf of a minor. • Live-in aides: If a household includes a paid live-in aide,the income of the live-in aide is not counted,regardless of the source of the income(whether the aide is paid by the family or by a social service program).Except under unusual circumstances,a related person cannot be considered a live-in aide. • Temporarily absent family member: The income of temporarily absent family members is counted in the Part 5 definition of annual income-regardless of the amount the absent member contributes to the household.For example,a construction worker employed at a temporary job on the other side of the state earns$600 per week.He/she keeps$200 per week for expenses and sends$400 per week home to his/her family.The entire amount($600 per week)is counted in the family's income. • Permanently absent family member: If a family member is permanently absent from the household(such as a spouse who is in a nursing home),the head of household has the choice of either counting that person as a member of the household(and including income attributable to that person as a household income,or specifying that the person is no longer a member of the household. • Adult students living away from home: If an adult student living away from home is counted as a member of a household when determining the household size,the first$480 of the student's income must be counted in the household's income.The Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 17 $480 limit does not apply to a student who is the head of household or a spouse.When this is the case,their full income must be counted. Third-party verification The City requires third-party verification of incomes(e.g.employer,Social Security Administration,public assistance agencies,banks). Prior to requesting verification,the applicant must provide written release authorizing the third party to release the required information. Verification may be received: Employment • In writing,via use of a Verification of Employment(VOE)form • Through conversation with the third party IF documented through a memo to the file that notes • Contact person and corresponding phone number • Information conveyed • Date of call Deposits • In writing,via use of a Verification of Deposit(VOD)form • If there is a charge for VODs,suitable documentation in lieu of the VOD includes bank statements,savings passbook,etc. • Beneficiaries cannot be required to provide verification information.Payment of any verification fee is an eligible administrative expense of the NSP. Income The following documents will be required to verify income: • Most recent three months of pay stubs • Most current tax return • Verification of employment/earnings for all household members(see Whose Income to Count) • Verification of deposits or three most current months of bank statements for all checking,savings,Certificates of Deposit for all household members • Copies of most recent three months of statements for any stocks,bonds,mutual funds,IRAs,401 Ks,retirement plans,etc. • Other as may be required for other types of assets Types of income to count There are very specific types of income to include and exclude under the Part 5 method of calculating income.HUD updates the list of inclusions and exclusions in the Federal Register at 24 CFR 5.609 whenever changes are made by Congress.The Weld County Housing Authority is expected to implement changes within 60 days of publication in the Federal Register. Welfare assistance(actual gross amount of assistance the household receives)is counted as income. The comprehensive list of inclusions and exclusions are attached to these policies and procedures and Exhibit A and Exhibit B. Asset calculation Part 5 definition of annual income requires special computations concerning assets.There is no asset limitation for participation in the NSP.Income from assets,however,is recognized as part of annual income.The income from assets must be counted even if the household elects not to receive it.(For example,if interest or dividends are received and reinvested, it is still the interest and dividends that are considered to be income.) In general,an asset is a cash or non-cash item that can be converted to cash.Exhibit C summarizes what are and are not to be considered assets.As with other types of income,Weld County Housing Authority must anticipate what will be received during the coming 12 months to determine income from assets. In addition to knowing what constitutes an asset,Weld County Housing Authority must compute the market and cash value of the assets and determine the income from the asset(to include in annual income).Market Value and Cash Value Assets have both a market value and a cash value.Only the cash value of an item is counted as an asset.If more than one person owns an asset,Weld County Housing Authority must prorate the asset according to the applicant's percentage of ownership.(If no percentage is specified or provided by state or local law,the asset is divided evenly among all owners.) • Market value—The dollar value on the open market,for example,the price of a share of stock quoted on the stock exchange on a particular day.The market value of a property is the amount it would sell for on the open market as calculated by comparing the property with similar,recently sold properties. • Cash value—Market value less reasonable expenses required to convert the asset to cash,including: Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 18 • Penalties or fees for converting financial holdings(for example,an early withdrawal penalty or a transaction fee for converting mutual funds). Income from assets Suggested methods for verifying the most common assets with income: • Savings accounts—Multiply the current balance by the current interest rate OR,if the value is not anticipated to change in the near future and the interest rate has been stable,request a copy of the IRS 1099 form for the most recent year. • Checking accounts—Average the monthly balance for six months as the cash value. There are special rules to address two circumstances: • If an asset produces little or no income,(for example,ownership of land that is not rented),and the applicant has total assets of more than$5,000,an"imputed"income must be calculated based the current Passbook Rate and applied to all this type of assets. Examples follow: • Applicant has$6,000(average balance over six months)in a non-interest-bearing checking account;current Passbook Rate is two percent(2%).Income for this asset would thus be$120. • Same applicant also has$5,500 in an interest bearing savings account,with a verified income on this asset of $150.The greater of the actual income from assets or the imputed income is used.(Imputed income-$11,500 x 2%=$230;actual income$150. Include in income calculations-$230.) • The Field Office establishes the Passbook Rate. Weld County Housing Authority must check for this rate prior to calculating this type of income. • If an asset was disposed of for less than the fair market value any time during the two years preceding the income determination,the asset must be considered still owned.Included as an asset is the difference between the cash value and the amount actually received.(If the value of all assets is greater than$5,000.)Examples follow: • Property valued at$75,000 and owned by the applicant sold for$30,000 with$3,000 in settlement costs on July 1,2011.$42,000 would be counted as an asset for any income determination until July 1,2013. Each applicant must certify whether an asset has been disposed of for less than fair market value.Not included are: • Assets disposed of for less than fair market value as a result of foreclosure or bankruptcy In the case of a disposition as part of a separation or divorce settlement,the disposition will not be considered to be less than fair market value if the applicant receives(or received)important consideration not measurable in dollar terms. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 19 EXHIBITS The following exhibits referenced in the Applicant Selection Criteria Policies and Procedures follow: • Exhibit A—24 CFR Part 5 Annual Income Inclusions • Exhibit B—24 CFR Part 5 Annual Income Exclusions • Exhibit C—24 CFR Part 5 Annual Income-Net Family Assets • Inclusions • Exclusions Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 20 Exhibit A-24 CFR Part 5 Annual Income Inclusions I. The full amount,before any payroll deductions,of wages and salaries,overtime pay,commissions,fees,tips and bonuses,and other compensation for personal services. 2. The net income from the operation of a business or profession.Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income.An allowance for depreciation of assets used in a business or profession may be deducted,based on straight-line depreciation,as provided in Internal Revenue Service regulations.Any withdrawal of cash or assets from the operation of a business or profession will be included in income,except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family. 3. Interest,dividends,and other net income of any kind from real or personal property.Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income.An allowance for depreciation is permitted only as authorized in number 2(above).Any withdrawal of cash or assets from an investment will be included in income except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of$5,000,annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate,as determined by HUD. 4. The full amount of periodic amounts received from Social Security,annuities,insurance policies,retirement funds,pensions, disability or death benefits,and other similar types of periodic receipts,including a lump-sum amount or prospective monthly amounts for the delayed start of a periodic amount(except for certain exclusions,listed in Exhibit 3.2,number 14). 5. Payments in lieu of earnings,such as unemployment and disability compensation,worker's compensation,and severance pay (except for certain exclusions,as listed in Exhibit 3.2,number 3). 6. Welfare Assistance.Welfare assistance payments made under the Temporary Assistance for Needy Families(TANF)program are included in annual income: • Qualify as assistance under the TANF program definition at 45 CFR 260.31;and • Are otherwise excluded from the calculation of annual income per 24 CFR 5.609(c). If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance in accordance with the actual cost of shelter and utilities,the amount of welfare assistance income to be included as income shall consist of: • The amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities;plus ▪ The maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities.If the family's welfare assistance is reduced from the standard of need by applying a percentage,the amount calculated under 24 CFR 5.609 shall be the amount resulting from one application of the percentage. 7. Periodic and determinable allowances,such as alimony and child support payments,and regular contributions or gifts received from organizations or from persons not residing in the dwelling. 8. All regular pay,special pay,and allowances of a member of the Armed Forces(except as provided in number 8 of Income Exclusions). Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 21 Exhibit B—24 CFR Part 5 Annual Income Exclusions 1. Income from employment of children(including maintenance,resident initiatives coordination,foster children)under the age of 18 years. 2. Payments received for the care of foster children or foster adults(usually persons with disabilities,unrelated to the tenant family,who are unable to live alone). 3. Lump-sum additions to family assets,such as inheritances,insurance payments(including payments under health and accident insurance and worker's compensation),capital gains,and settlement for personal or property losses.(except as provided in Exhibit 3.1,number 5 of Income Inclusions). 4. Amounts received by the family that are specifically for,or in reimbursement of,the cost of medical expenses for any family member. 5. Income of a live-in aide(as defined in 24 CFR 5.403). 6. Certain increases in income of a disabled member of qualified families residing in HOME-assisted housing or receiving HOME tenant-based rental assistance(24 CFR 5.671(a)). 7. The full amount of student financial assistance paid directly to the student or to the educational institution. 8. The special pay to a family member serving in the Armed Forces who is exposed to hostile fire. 9. (a) Amounts received under training programs funded by HUD. (b) Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency(PASS). (c) Amounts received by a participant in other publicly assisted programs that are specifically reimbursement of,out-of- pocket expenses incurred(special equipment,clothing,transportation,childcare,etc.)and which are made solely to allow participation in a specific program. (d) Amounts received under a resident service stipend.A resident service stipend is a modest amount(not to exceed$200 per month)received by a resident for performing a service for the PHA or owner,on a part-time basis,that enhances the quality of life in the development. Such services may include,but are not limited to,fire patrol,hall monitoring,lawn maintenance,resident initiatives coordination,and serving as a member of the PHA's governing board.No resident may receive more than one such stipend during the same period of time. (e) )Incremental earnings and benefits resulting to any family member from participation in qualifying state or local employment training programs(including training not affiliated with a local government)and training of a family member as resident management staff Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives,and are excluded only for the period during which the family member participates in the employment training program. 10. Temporary,nonrecurring,or sporadic income(including gifts). 11. Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era. 12. Earnings in excess of$480 for each full-time student 18 years old or older(excluding the head of household or spouse). 13. Adoption assistance payments in excess of$480 per adopted child. 14. Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in(b)prospective monthly amounts. 15. Amounts received by the family in the form of refunds or rebates under state or local law for property taxes paid on the dwelling unit. 16. Amounts paid by a state agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home. 17. Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(c)apply.A notice will be published in the Federal Register and.distributed to housing owners identifying the benefits that qualify for this exclusion. Updates will be published and distributed when,necessary.The following is a list of income sources that qualify for that exclusion: • The value of the allotment provided to an eligible household under the Food Stamp Act of 1977; • Payments to volunteers under the Domestic Volunteer Service Act of 1973,(employment through AmeriCorps,VISTA, Retired Senior Volunteer Program,Foster Grandparents Program,youthful offender incarceration alternatives,senior companions); Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 22 • Payments received under the Alaskan Native Claims Settlement Act; • Income derived from the disposition of funds to the Grand River Band of Ottawa Indians; • Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; • Payments or allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program; • Payments received under the Maine Indian the Claims Settlement Act of 1980(25 U.S.C1721); • The first$2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U.S. Claims Court and the interests of individual Indians in trust or restricted lands,including the first$2,000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands; • Amounts of scholarships funded under Title IV of the Higher Education Act of 1965,including awards under the Federal work- study program or under the Bureau of Indian Affairs student assistance programs; • Payments received from programs funded under Title V of the Older Americans Act of to 1985(Green Thumb,Senior Aides, Older American Community Service Employment Program); • Payments received on or after January 1 1989,from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in the In Re Agent Orange product liability litigation,M.D.L.No.381 (E.D.N.Y.); • Earned income tax credit refund payments received on or after January I, 1991 including advanced earned income credit payments; • The value of any child care provided or arranged(or any amount received as payment for such care or reimbursement for costs incurred for such care)under the Child Care and Development Block Grant Act of 1990; • Payments received under programs funded in whole or in part under the Job Training Partnership Act(employment and training programs for Native Americans and migrant and seasonal farm workers,Job Corps,veterans employment programs, state job training programs,and career intern programs,AmeriCorps); • Payments by the Indian Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation; • Allowances,earnings,and payments to AmeriCorps participants under the National and Community Service Act of 1990; • Any allowance paid under the provisions of 38 U.S.C. 1805 to a child suffering from spina bifida who is the child of a Vietnam veteran; • Any amount of crime victim compensation(under the Victims of Crime Act)received through crime victim assistance(or payment or reimbursement of the cost of such assistance)as determined under the Victims of Crime Act because of the commission of a crime against the applicant under the Victims of Crime Act; and • Allowances,earnings,and payments to individuals participating in programs under the Workforce Investment Act of 1998. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 23 Exhibit C—24 CFR Part 5 Annual Income-Net Family Asset Inclusions and Exclusions Inclusions: I. Cash held in savings accounts, checking accounts,safe deposit boxes,homes, etc. For savings accounts,use the current balance. For checking accounts,use the average 6-month balance. Assets held in foreign countries are considered assets. 2. Cash value of revocable trusts available to the applicant. 3. Equity in rental property or other capital investments.Equity is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and all reasonable costs(e.g.,broker fees)that would be incurred in selling the asset. Under HOME,equity in the family's primary residence is not considered in the calculation of assets for owner-occupied rehabilitation projects. 4. Cash value of stocks,bonds,Treasury bills,certificates of deposit,mutual funds,and money market accounts. 5. Individual retirement,401(K),and Keogh accounts(even though withdrawal would result in a penalty). 6. Retirement and pension funds. 7. Cash value of life insurance policies available to the individual before death(e.g.,surrender value of a whole life or universal life policy). 8. Personal property held as an investment such as gems,jewelry,coin collections,antique cars,etc. 9. Lump sum or one-time receipts, such as inheritances, capital gains, lottery winnings, victim's restitution,insurance settlements and other amounts not intended as periodic payments. 10. Mortgages or deeds of trust held by an applicant. Exclusions: I. Necessary personal property,except as noted in number 8 of Inclusions, such as clothing, furniture,cars,and vehicles specially equipped for persons with disabilities. 2. Interest in Indian trust lands. 3. Assets not effectively owned by the applicant. That is, when assets are held in an individual's name,but the assets and any income they earn accrue to the benefit of someone else who is not a member of the household and that other person is responsible for income taxes incurred on income generated by the asset. 4. Equity in cooperatives in which the family lives. 5. Assets not accessible to and that provide no income for the applicant. 6. Term life insurance policies(i.e.,where there is no cash value). 7. Assets that are part of an active business. "Business"does not include rental of properties that are held as an investment and not a main occupation. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 24 ATTACHMENT B: MINIMUM RESIDENTIAL and COMMERCIAL REHABILITATION STANDARDS APPLICABILITY The City of Fort Lupton administers the NSP3 program, funds that were awarded to Weld County by the Department of Housing and Urban Development,under which there are activities that must adhere to these rehabilitation standards. PURPOSE These standards are written as a guide and are intended to address the minimum standards for rehabilitation work (residential and commercial)and/or new construction of residential units;the standards are not intended to be all-inclusive to all rehabilitation requirements,nor are they intended to replace or to supersede the technical Descriptions of Work. Additionally,the existing locally adopted codes supersede these standards. The standards shall not be construed to replace or to conflict with the International Building Code and amendments as adopted by the City of Fort Lupton,but shall serve to reinforce such building codes. Purposes of these Rehabilitation Standards include,but are not limited to the following: • To establish a set of easily understood rules to address the rehabilitation of substandard housing • To ensure that a consistent and effective set of rehabilitation activities are undertaken • To clarify to participating contractor the expectations of the City of Fort Lupton regarding the actual rehabilitation work • To provide staff with a tool for use in identifying,prioritizing and correcting substandard conditions • To reduce the number of sub-standard housing units within the City of Fort Lupton o Substandard housing is defined as a residential housing unit that lacks any of the following: a permanent solid foundation; lack of structural integrity or weather tightness;minimal insulation; basic mechanical systems, such as inadequate capacity or unsafe to operate; in-door plumbing,private bathing facilities, or an appropriate sewer connection; a kitchen or the facilities required to prepare and store food; deferred maintenance to the degree that the structure becomes subject to increased decay, or may have been declared unfit for habitation by the City of Fort Lupton(or other local government, if applicable). When questions arise as to the applicability of a standard to a program or to a specific property,or to clarify a standard, contact a City of Fort Lupton Planning Department staff person. GENERAL Accessibility: Rehabilitation projects funded under the NSP3 program must meet the federal accessibility requirements of units covered by the Fair Housing Act and Section 504 as well as Fort Lupton Municipal Code standards required for all dwellings and commercial buildings. Applicable Codes: The Rehabilitation Standards established by the City of Fort Lupton are based on the International Residential Code for one-to two-family dwellings,HUD Section 8 Standards,and HUD Minimum Property Standards. Energy Efficiency Requirements(NSP 3 ONLY): For NSP3, HUD is requiring that all gut rehabilitation(re., general replacement of the interior of a building that may or may not include changes to structural elements such as flooring systems, columns or load bearing interior or exterior walls)or new construction of residential buildings up to three stories must be designed to meet the standard for Energy Star Qualified New Homes.All gut rehabilitation or new construction of mid-or high-rise multifamily housing must be designed to meet American Society of Heating, Refrigerating,and Air- Conditioning Engineers(ASHRAE) Standard 90.1-2004,Appendix G plus 20 percent(which is the Energy Star standard for multifamily buildings piloted by the Environmental Protection Agency and the Department of Energy). Other rehabilitation must meet these standards to the extent applicable to the rehabilitation work undertaken, e.g., replace older obsolete products and appliances(such as windows, doors, lighting,hot water heaters,furnaces,boilers,air conditioning units,refrigerators,clothes washers and dishwashers)with Energy Star-labeled products. Water efficient toilets, showers,and faucets,such as those with the Water Sense label,must be installed. Where relevant,the housing should be improved to mitigate the impact of disasters(e.g., earthquake,hurricane, flooding,and fires). Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 25 ELIGIBLE REHABILITATION COSTS Based upon existing conditions,unless otherwise noted,the City of Fort Lupton staff shall determine and classify the inspected items into Priority A, B,or C. To the maximum extent feasible,the staff will coordinate with the local code enforcement and/or building official(e.g.,the City of Fort Lupton Planning Department)before finalizing the development of Descriptions of Work and final inspections at the end of construction. Generally,eligible rehabilitation costs may include: • Improvements to meet minimum applicable codes, standards and ordinances or address essential building systems and appliances. • Costs to meet rehabilitation standards such as engineering,architectural design,environmental assessments,etc. • Energy-related improvements. • Environmental testing, abatement and clearance costs of building hazards such as lead-based paint,asbestos, methamphetamine removal • Accessibility improvements for disabled persons. • Demolition activities when part of the creation of affordable housing,related to accommodations for accessibility, and bedroom additions when required to accommodate excessive numbers of family members. Demolition costs are also eligible for the removal of accessory structures and dangerous buildings. • New construction and site improvements(i.e. building of garages, installation of basic landscaping as needed to comply with City codes and to conform to neighborhood standards, inspection and repair of water and/or sewer service lines). • Incipient repairs and general property improvements of a non-luxury nature(luxury items such as upgrades beyond "builder basic" items, are excluded.) REHABILITATION PRIORITIES Priority A: Health and Safety • Items relating to the health and safety of the occupants;the updating of major mechanical systems;and the repair or replacement of structural elements that pose an immediate threat to the integrity of the structure. Priority B: Incipient Violations and Energy Conservation • Items that will lengthen the useful life of the structure but are not yet an immediate threat to the occupants or the structure;and energy conservation measures. Priority C: General Property Improvements • Items that relate to the comfort of the occupants and any general property improvements not required to satisfy Priority A and Priority B Standards. REHABILITATION PROCESS AND OBLIGATIONS OF CITY OF FORT LUPTON,DEVELOPERS,AND/OR CONTRACTORS Inspections/Monitoring Work: City of Fort Lupton staff will perform initial,progress,and final inspections on all projects. In some cases it may be necessary to request assistance from the City of Fort Lupton building inspectors and/or qualified consultants. In cases where the rehabilitation or new construction is contracted for by a Developer or contractor,there are also inspection responsibilities.Those responsibilities will be outlined in the Development Agreement or Contractor's Agreement. Briefly,however, it is the contractor's/developer's responsibility to supervise the quality and progress of the work as well as the safety of its employees,subcontractors,volunteers,and the general public during construction. Additionally,the contractor is responsible for securing the site and protecting the surround areas from damage. Description of Work Specifications: City of Fort Lupton staff shall write project specifications for rehabilitations and/or new construction for which it is acting as program manager or general contractor based on the initial inspection report of the property to be rehabilitated. In all cases, initial inspection reports and work specifications must be in accordance with all standards referenced here. In cases where new construction or rehabilitation funds are being provided to a developer,the developer will be responsible for the above tasks. Bids: City of Fort Lupton staff will obtain bids based upon the work list specifications on rehabilitation and/or new construction for which it is acting as program manager or general contractor.The City of Fort Lupton will follow the HUD Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 26 approved Procurement Standards and those of Weld County when obtaining equipment,materials and supplies,as well as the awarding of contracts for services,repairs,and maintenance, for rehab contracts up to$100,000. In cases where new construction or rehabilitation funds are being provided to a developer,the developer will be responsible for obtaining bids based upon the work list specifications. When not required to follow the City of Fort Lupton,Weld County and HUD procurement policies(such as in the case of a developer),the developer must at a minimum follow a competitive bidding process. Contractors and Developer requirements: Contractors and developers must meet the following criteria: • All subcontractors must possess a license appropriate for their applicable trade; • All developers,contractors,and subcontractors participating in any project involving funds administered by Weld County must meet all county and City of Fort Lupton insurance requirements.The City of Fort Lupton and Weld County shall be named as an additional insured. • The ability to provide City of Fort Lupton with payment and performance bonds(may be required on projects over $50,000). • Utilize contractors who are authorized to conduct HUD's Lead Safe Work Practices or EPA's lead safe requirements. • If the value of any contract or subcontract,for work to be performed through this program, exceeds$100,000 and the project is federally assisted,then Section 3 regulations apply. Section 3 of the Housing and Urban Development Act of 1968,as amended, 12 U.S.C 1701u,requires that to the greatest extent feasible opportunities for training and employment be given to lower income residents of the project area and contracts for work in connection with the project be awarded to business concerns which are located in,or owned in substantial part by persons residing in the area of the project. • All contractors and subcontractors and their employees must adhere to immigration policy as outlined in Attachment C. Cost Estimates: CITY OF FORT LUPTON,City building inspectors,or CITY OF FORT LUPTON consultants will prepare rehabilitation and/or new construction cost estimates based on the Description of Work Specifications on rehabilitation and/or new construction for which it is acting as program manager or general contractor. The selected bid must be reasonable,consistent with the work specifications,and within 15%of the rehabilitation cost estimate. Bids under the cost estimate may be considered.The contractor selected to perform the work will be selected through CITY OF FORT LUPTON's procurement procedures. Developers awarded with funds administered by CITY OF FORT LUPTON must conduct a cost estimate on all new construction and rehabilitation jobs and maintain that estimate as a part of the activity file. Costs: All materials,labor, equipment,taxes,licenses,permits,and fees to complete the specified rehabilitation or repairs, shall be the responsibility of the contractor or developer unless otherwise specified in the bid. Permits: Permits are required to be purchased and posted on the job site during construction. All permits and final inspection certificates are the responsibility of the contractor or developer. CodesNariances/Zoning: All construction methods and materials used shall conform to the applicable codes,zoning laws, and variance provisions adopted by the City of Fort Lupton. Plans: Plans prepared for CITY OF FORT LUPTON or a developer must be reviewed and approved by the City of Fort Lupton Planning Department staff prior to bidding. Design, engineering,and approval of plans and specifications for changes proposed prior to,or after,the contract award shall be the responsibility of the contractor. Lien Waivers/Warranties: The developer or general contractor shall submit lien waivers,affidavits,and warranties for his/herself and all of his/her subcontractors. The developer or general Contractor shall obtain a lien waiver from any supplier issuing a notice of the right to lien. Change Orders: Developers or contractors encountering a change order situation shall contact City of Fort Lupton staff, submit prices, and get written approval by city staff prior to any work being performed or materials being purchased. Materials purchased and work done prior to receiving an approved written change order will be at the contractor's expense. Warranties: The contractor shall obtain and fill in necessary information on all warranties where applicable for manufactured products,materials,and/or labor used in connection with the work performed in the Contract. The contractor Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 27 shall deliver the original warranty to City of Fort Lupton,where appropriate copies will be made and the original will be delivered to the property owner.At a minimum,all labor and materials furnished by the contractor must be covered by a one-year warranty. In the case of a developer, it is the developer's responsibility to provide the property owner with a copy of any and all warranties. Quantities: The quantities listed in the specifications are approximate quantities.The developer,general contractor,and the subcontractors are responsible for taking their own measurements at the job site to determine the quantities needed to complete the project. Products/Colors: All products listed in the work list specifications are stated in terms"or equivalent." Products of equal quality and similar style may be used if CITY OF FORT LUPTON approves the selection via written addendum prior to submitting the bid. If a different product is bid,the developer or contractor must insert the manufacturers name and the style on the Description of Work Specifications. Where color, finish,or pattern involves choice,the developer or contractor shall provide the property owner with a full line of standard sample selections. Materials Allowances: Materials allowances may be provided for specific items for bidding purposes. Construction Submittals,Product Detail,and Closeout Documents: The Developer's and contractor's submittals will detail construction and product details such as materials,matching existing materials, final product appearance,and manufacturer specifications and product numbers selected. Closeout documents shall include as-built drawings,if substantial changes warrant, and(in the case of contractors)delivery of all warranties and operation manuals. Quality of Work: All work shall be executed by skilled craftsmen,experienced in their profession and in accordance with the provisions and intent of the applicable code. All materials shall be new and installation shall be of top quality and in accordance with standard engineering practices. "Green materials"requested may be of recycled or re-manufactured materials. PROPERTY IMPROVEMENTS AND CONDITIONS A. Site The developer and/or contractor shall maintain the site in a clean, safe and sanitary condition,free of hazards during the construction process and will remove all debris from the site after construction. The City of Fort Lupton staff shall insure that developers and contractors are advised accordingly and shall,when visiting the site,generally view the area and if appropriate,advise the developer or contractor to address any such conditions. 1. Drainage: Any deficiencies in proper grading or paving adjacent to the building shall be corrected to assure surface drainage away from foundation walls,the prevention of accumulation of stagnant water on the lot,and the prevention of soil saturation detrimental to structures and lot use. In jobs involving owner-occupied single-family rehabilitation,privately owned multi-family rehabilitation, and commercial rehabilitation this item becomes an "A" priority when the situation poses a definite threat to the health and safety of the occupants. 2. Site Improvements: • All exterior concrete surfaces shall be inspected and a judgment made as to their current condition. • All replaced or repaired concrete walks and slabs on grade shall slope away from buildings and appropriate expansion joints shall be installed. • All excessively cracked or crumbling concrete areas shall be replaced and any irregular or uneven concrete walk section shall be removed and replaced. • All new concrete surfaces shall be brush(broom)finished or finished to provide all-weather access to the building with no appreciable ponding of water on the concrete surface. • All cracked,crumbling or deteriorated concrete or wood steps that pose a threat to the occupants shall be replaced or repaired. • All exterior concrete steps shall be poured in place or pre-cast and installed on an appropriate footing. • All patched concrete surfaces will be level with the remaining existing surfaces. • All replaced sidewalk section widths will match the remaining existing sidewalk widths. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 28 • All new installations must be of appropriate design and installation,e.g., in accordance with local codes and ordinances and local industry standards. • All existing driveways and areas where automobiles are parked which are in disrepair or of materials contrary to local ordinance shall be replaced with concrete. In jobs involving owner-occupied single-family rehabilitation and privately owned multi-family rehabilitation this standard becomes an"A"priority when the situation poses a definite threat to the health and safety of the occupants/public or to the integrity of the structure.The issue(s)will be brought to the attention of the owner during the property inspection.Ultimately,the decision as to whether or not to repair belongs with the owner. See Item B9 for additional standards for driveways and sidewalks. B. Exterior As a result of work done and to the maximum extent possible under any of the above noted programs,building exteriors shall be in good repair, and be structurally sound and sanitary so as not to pose a threat to the health, safety or welfare of the public or of the occupants. Any work done on exteriors under any of the programs covered by these Standards shall meet the following standards: 1. Foundations and Piers: All footings and foundations will be inspected by City of Fort Lupton staff and/or the developer and be in accordance with the International Building Codes or subsequently adopted codes enforced under the jurisdiction of the City of Fort Lupton. All structural defects shall be corrected.All new or rebuilt foundation walls and piers shall be supported on continuous, solid,properly drained masonry or concrete footings of sufficient design to safely support loads and shall extend at least eight inches above grade when supporting wood construction. Where necessary,the interior or exterior of foundation walls shall be damp-proofed by bituminous coating and cement parging. Stability: The foundation must be stable and not sinking,vertically plumb(when possible), and prevent the entrance of water or moisture into the interior. Window openings must be level,and top of foundation at base of structure must be level. Reconstruction of foundations must adhere to the structural engineer's direction regarding foundation design including the installation of rebar. Lack of stability beyond a reasonable level will preclude rehabilitation and initiate deconstruction or redevelopment. Collapsed Sections: Collapsed sections of foundations must be reconstructed as prescribed by a licensed structural engineer's design and drawings acceptable to the City of Fort Lupton staff Consideration should be given to the degree to which the remaining foundation meets the minimum requirements of the International Building/Residential Code. Cracks: Inspectors should evaluate foundations to identify cracks,particularly at window areas. All cracks must be filled with epoxy-cement,and rubbed with appropriate cement materials. All cracks,with more than a 1/8th inch spread,must be investigated by a licensed engineer and have an appropriate treatment applied. All slabs shall be free of excessive cracking,movement and trip hazards. Inappropriate Construction: All foundations constructed of brick, improperly filled cement or cinder block, railroad ties, and other non-treated wood are unacceptable and will require replacement. Spalling Foundation: Spalling refers to the condition exemplified by crumbling gravel or rock,decaying concrete,collapse of foundations in sections that do not expose dirt on the outside,etc. When these conditions exist,foundations must be repaired or replaced following the recommendations of a certified structural engineer. Spalling of foundation surfaces of less than one inch in depth may be left untreated,but the consultation of a structural engineer and treatment is recommended. Waterproofing: All foundations evidencing leakage from the outside will require waterproofing.Cracks will be sealed as proposed above. Utilizing an appropriate waterproofing compound,leaking around foundation floors will be sealed. Leakage through foundation walls should be corrected by providing positive drainage, concrete aprons, and in severe cases by excavating around the foundation and damp proofing the foundation with an approved damp proofing material. Additionally, in those severe cases,the installation of a foundation drain is prudent. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 29 Poured Concrete Footers,Foundations,and Foundation Repair: New foundations and substantial repairs to existing foundations shall be done under the direction of a licensed structural engineer.At a minimum, concrete shall be Type II Cement with a 28-day compressive strength of 3000psi.Concrete reinforcement shall be by engineer's design.At a minimum, footer reinforcement shall consist of a least two,Grade 40,#5 Bars set 12"o.c.with vertical reinforcement extending into the foundation wall to a point equal to half the height and placed 36"o.c.All Bar splices or ends shall be lapped a minimum of 30 bar diameters.Corners shall be reinforced with three vertical bars and Tee intersections shall be reinforced with a minimum of two vertical bards. No concrete shall be placed on frozen ground or when the temperature is less than 32°degrees. When temperatures are expected to fall below 32°degrees,the contractor shall take adequate means to prevent the concrete from freezing. All frozen concrete shall be removed and replaced at the contractor's expense. 2. Exterior Wall Coverings: All exterior wall coverings shall be free of holes,cracks and broken or rotted finish materials which might admit rain or dampness into the interior portions of the walls or into the occupied spaces of the building. All exterior surface materials not previously weatherproofed(e.g.,pre-finished vinyl siding,architectural panels, etc.), including wood,composition,or metal siding, shall be maintained waterproof and shall be properly surface coated when required to prevent deterioration. Cost considerations: An eligible expense is the appropriate cleaning of the existing surface, whether or not painting or other decoration work is done. 3. Windows: Every habitable room of a residence(a space used for living,sleeping,eating,or cooking,or a legal combination thereof)shall have at least one window,meeting egress requirements,as needed. When window egress requirements are in question,the contractor or developer shall verify egress requirements with the International Building Code and/or with City of Fort Lupton staff on a case-by-case basis. All windows, including hardware,shall operate satisfactorily and give evidence of continuing acceptable service. Defective glass or locking mechanisms shall be replaced or corrected. All window glazing shall be weather tight,without cracks or holes, and windows shall be weather stripped so as to not allow the significant entry of air or water into the structure from around the glass, sashes,or window casings. All windows shall have insect screens in suitable condition to serve their intended purpose. New,energy efficient replacement windows are an acceptable alternative to repairing existing windows, so long as such replacement activity meets all code requirements relating to installation,egress, size,and operability. New windows are to be double pane,insulated, low-E,'/l'glazing with a U-factor of 0.35 or less. 4. Exterior Doors: All exterior doors, including the hardware,shall operate satisfactorily and give evidence of continuing acceptable service. Defective glass shall be replaced. In addition all replaced exterior doors shall be solid core"Energy Star"or equivalent(metal clad decorative doors may be acceptable). Commercial door replacement shall be in accordance with codes and ordinances and shall be selected accordingly by the Owner/Architect/Rehab Specialist. All exterior doors shall have locks that are in good repair and capable of tightly securing the door. However,all locks in required means of egress shall be readily openable from the inside without the use of keys. All exterior doors shall be weather-stripped so that there is no significant entry of air or water into the structure. 5. Porches,Decks and Balconies: All exterior porches,decks,balconies,etc., shall be safe and capable of supporting anticipated loads. All residential exterior porches,terraces,entrance landings,platforms,decks and balconies in deteriorated condition and which serve no useful purpose to their owner or which are not economically repairable,shall be removed with the owner's approval. All exterior porches,decks,balconies, etc.,that are 30 inches or move above grade shall have guardrails, and such guardrails shall be constructed so as to conform with the International Building Code as adopted by the City of Fort Lupton. 6. Roof: All major roof construction,replacement or repair work shall conform to the International Building Code as adopted by the City of Fort Lupton. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 30 All roofs shall be inspected and a judgment made as to current condition. To the maximum extent possible, both the interior and the exterior of the roof shall be inspected. In addition, an inspection shall be made to determine the effectiveness of the existing flashing,roof-to-wall intersections,roof-to-chimney intersections, roof valleys,pipe projections through the roof,curbs and cants,eaves and rakes,and parapets. All roofs shall have a watertight and reasonably durable covering free of holes,cracks, excessively worn surfaces or other defects that indicate a potential for the infiltration of rain or excessive moisture into the structure.A roof or a portion of a roof that is not expected to remain watertight for the next five years may be repaired or replaced. All caps,edges,and critical joints in the exterior roof construction shall be protected by appropriately installed sheet metal or other suitable flashing material. If there are two or more roof covering present,all roof coverings must be removed before a new roof is installed. Additionally,with regard to any roof replacement • Any damaged roof sheathing must be replaced; • A drip edge must be properly installed at entire perimeter; • The interior surface of the roof must be appropriately ventilated. • New roofs or replacement roofs must be shingled with 30-year dimensional shingles over a minimum of one layer of 15# felt underlayment. 7. Gutters and Downspouts: Structure shall have a controlled method for disposal of water from the roof where necessary to prevent damage to the property and to avoid causing unsightly staining of walls and windows. All deteriorated gutters, downspouts,soffits,fascia or other elements which may allow the entry of water or air into the structure shall be replaced. All downspouts shall have splash blocks in conjunction with proper site grading. In jobs involving owner-occupied single-family rehabilitation and privately owned multi-family rehabilitation, this standard becomes an "A" priority when the condition must be corrected to address site and foundation drainage problems or when replacement of gutters is in conjunction with roof replacement. The issue(s)will be brought to the attention of the owner during the property inspection. Ultimately,the decision as to whether or not to repair belongs with the owner. Connection of downspouts into sanitary sewer lines is strictly prohibited. 8. Garages and other accessory structures: Existing garage structures will be made safe and in compliance with current codes. Building of new garages will be examined on a case-by-case basis,primarily eligible under the NSP. Generally,work on other accessory structures will be considered on a case-by-case basis and most commonly,only under the NSP. It is recommended the developers or contractors consult further with CITY OF FORT LUPTON Rehab Specialists prior to doing any work on a garage or other accessory structure. 9. Walks and Driveways: All existing accesses to residential structures should have at a minimum a paved sidewalk that connects with other sidewalks or driveways to provide access to the house. All new entry walks shall be sized in accordance with Section 1005 of the International Building code but not less than 36"wide. Sidewalks from rear door entrances to garages,and around to the front are not required and need not be provided unless they are needed to control drainage conditions. Badly deteriorated essential paving will be replaced or partially replaced to result in at least a five-year useful life after rehab.Non- essential deteriorated paving may be removed. • Concrete installed shall be Type II with a 28-day compressive strength of 4000psi, alternate mix designs must be approved,by a structural engineer and the rehab specialist,prior to pour. • Concrete abutting buildings shall be doweled to the foundation with a#4 rebar placed 16"o.c. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 31 ▪ Flatwork shall be troweled to a dense,tight surface.All concrete shall be tooled round. ▪ New walks placed in the public right of way shall have control joints placed 5' o.c. with expansion joints placed at adjoining concrete where required. ▪ Control joints in either direction shall be placed 10' o.c. for 4"thick slab and 15' o.c. for a 6"thick slab. For alternate thicknesses,the spacing shall be determined by multiplying the thickness of the slab in inches by a factor of 2.5.The product of the two shall equal the distance, in feet,between control joints. ▪ Unless noted otherwise in the Description of Work Specifications, all exterior concrete flat work shall have a broom finish ▪ No concrete shall be placed on frozen ground or when the temperature is less than 32"degrees. When temperatures are expected to fall below 32"degrees,the contractor shall take adequate means to prevent the concrete from freezing. All frozen concrete shall be removed and replaced at the contractor's expense. 10. Storm Gutters,Driveway Approaches,and Public Sidewalks: Deteriorated gutters on streets that impede drainage or cause a safety hazard may be replaced.This also applies to driveway approaches,deteriorated approaches will be reinstalled and non-existent driveway approaches may be installed. Deteriorated or lifted public sidewalk panels may be replaced with new sidewalk panels matching the existing width. If more than 40%of the sidewalk is deteriorated,the entire walk may be replaced with a new 5' wide sidewalk. All concrete exposed to weather, installed within the public right of way, shall be of Type II Cement with a 28- day compressive strength of 4000psi. All materials and workmanship will conform to the City of Fort Lupton specifications. 11. Steps,Stairways and Porch Decks: these will be reasonably level,even,non-slip surfaces and have an expected useful life of five years or more after rehab. 12. Basement,Crawl Spaces and Cellars: Basement and crawl spaces shall not allow significant entry of ground water from the walls and floors. All serious defects in basement or crawl spaces walls shall be repaired and all cracks effectively sealed. All basement hatchways shall be sound, secure and maintained to prevent the entrance of rodents,rain and surface water into the structure. All crawl spaces shall be provided with a sufficient number of ventilation openings as required by code. Crawlspaces shall be damp-proofed unless otherwise specified in the Description of Work Specifications. Acceptable damp-proofing materials are karnak#83AF,a fibered solvent based coating applied at a rate of 4 gallons per 100 sqft. Prior to applying dampproofmg, all cracks,pinholes,joints, and transitions are to be filled with Karnak#86AF,a trowel applied fibered mastic. Acceptable waterproofing material for basements is Grace Bituthene membrane applied with compatible primer and mastics as per manufacturer's application instructions.New concrete foundations must be cured a minimum of seven(7)days before applying primer or waterproofing. Backfill should occur as soon as the waterproofing is in place. Care shall be taken not to damage the membrane during backfill. Acceptable damp-proofing materials for basements: BASF's Masterseal 550, a polymer-modified cermentitious coating. Existing concrete foundations may be either waterproofed with the Grace Bituthene membrane waterproofing system or damp proofed using BASF's Masterseal 550. Site conditions, water table, foundation condition will determine which system is required.All products shall be installed in accordance with the manufacturer's recommendations. New concrete must be cured a minimum of seven days before applying coatings and shall let the damp proofing cure a minimum of 48-hours before backfilling. Existing masonry foundations shall have a minimum of 3/8"Portland cement parging applied to the exterior side of the wall prior to damp-proofing. C. INTERIOR As a result of work done and to the maximum extent possible under any of the above noted programs,building interiors, systems, and appliances shall be in good repair, structurally sound,and sanitary so as not to pose a threat to Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 32 the health, safety or welfare of the public or of the occupants. Any work done on interiors under any of the programs covered by these Standards shall meet the following standards: 1. Interior Surfaces: All interior walls and ceilings shall be finished without noticeable irregularities,large cracks or holes,buckling or bulging;be free of exposed wiring,have a hard waterproof surface in areas subject to moisture(e.g.,ceramic tile,FRP board[Fiberglas reinforced panels],or other approved materials); not allow significant entry of air into the unit;and painted surfaces shall provide adequate resistance from weathering,protection of surfaces from moisture or corrosion and reasonable durability. All finished floors shall be appropriate to the use of the space,be in good condition,and provide reasonable ease of maintenance. The occupant shall,in all cases,be notified of the hazards of lead-based paint. When existing paint is presumed or determined to be lead-based,special attention shall be given to established corrective procedures. Habitable rooms other than the kitchen shall have wood flooring,resilient tile or sheet material,or carpeting over suitable underlayment. Kitchens and bathrooms shall have a durable easily maintainable,waterproof, non-absorptive material such as vinyl-plastic,rubber,ceramic tile,or sheet-vinyl floor covering over suitable underlayment. 2. Bathrooms: Complete bathing and sanitary facilities shall be provided within each dwelling unit,consisting of water closet,tub or shower, and a lavatory(separate from the kitchen sink). A supply of hot water shall be provided to every tub,shower and lavatory,and cold water shall be supplied to all fixtures.All bathrooms without operable windows shall be equipped with an exhaust fan or other appropriate ventilating equipment. Ventilating equipment shall be capable of exhausting air directly to the exterior and exchanging air at the appropriate rate as determined by the local codes. Every bathroom in a dwelling unit shall be arranged to ensure privacy for the occupant,and arrangement of all fixtures shall provide for the comfortable use of all fixtures and permit at least a ninety(90)degree door swing. In addition,wall space shall be available for a mirror or medicine cabinet and towel bars. Bathroom additions are permitted only when no facilities presently exist in the dwelling unit,when making accommodations for the disabled,or when bedroom additions are required to accommodate the size of the current occupant load. 3. Kitchens: Every dwelling unit shall have a specific kitchen area which contains a sink with hot and cold running water,counter work space, adequate space for installed cooking and refrigeration equipment and space for storage of cooking utensils. On a case-by-case basis under the single-family owner-occupied program,CITY OF FORT LUPTON will consider the purchase or replacement of stoves,refrigerators or other kitchen appliances with program funds providing the purchased appliances are"Energy Star"rated or the equivalent and the owner-occupant can demonstrate the ability to pay for the additional cost of appliances. Under the NSP and in the case of developer rehabilitations,all appliances may be replaced as part of the rehabilitation. Any appliances replaced will be"Energy Star"rated or the equivalent. 4. Stairs: All stairs shall provide for the safety of ascent and descent. Replacement of all treads and risers that are broken or that exhibit evidence of excessive wear or disrepair as code requires shall be made and all stairs shall be equipped with appropriate handrails, as code requires. 5. Laundry/Utility Areas. No utility areas with gas fired water heaters or furnaces shall be located in the bedroom,bathroom,clothes closet,storage closet,under any stairway,or in a confined space with access through any of the above locations. In addition,all plumbing and electrical standards as adopted by code shall apply. When existing water heaters or furnaces are located in the defined prohibited spaces and when there is no other acceptable space available to relocate the units,the units may be replaced with closed combustion, direct-vent appliances,or at last resort, an exception may be made,but ONLY after consultation with the Chief Building Official,and ONLY,with the written concurrence of the Chief Building Official. In all excepted cases,and with the concurrence of the Chief Building Official,all unenclosed conventional water heaters and furnaces shall be enclosed. All enclosures shall be covered with fireproof(FC-60)drywall,fitted with a louvered door access,provided with appropriate combustion air, and a light fixture. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 33 6. Attics: MI attic spaces shall be weather-tight,ventilated,and insulated,as described in H-1,below.At the same time the attic inspection is made for insulation and weatherization,an inspection of roof rafters and roof sheathing shall be conducted to insure,to the greatest extent possible,that they are in sound, serviceable condition. 7. Egress: A safe,continuous,and unobstructed means of egress shall be provided from the interior of the single-family dwelling unit to the exterior at a street or yard. All doors in the required means of egress shall be readily operable from the inside without the use of keys. D. STRUCTURAL SYSTEM As a result of work done and to the maximum extent possible under any of the above noted programs,structural system components,whether wood,masonry,or steel shall be in sound condition and considered serviceable for the expected useful life of the rehabilitated or newly constructed structure. Individual structural members which are in a seriously deteriorated condition shall be replaced and all loosely jointed structural members shall be restored to the original rigidity in all situations possible. In addition, any sagging floors or out of plumb chimneys,fireplaces,partitions, stairs and building exterior walls(whether masonry or wood)shall be restored,as near as practical,to an acceptable level or plumb position,or braced so as to prevent a reoccurrence of these conditions. This standard becomes an "A" priority when the situation poses a threat to the health and safety of the occupants or to the integrity of the structure. E. ELECTRICAL SYSTEM As a result of work done and to the maximum extent possible under any of the above noted programs,electrical systems will brought to a standard to meet current codes. The entire electrical system shall be inspected to the maxim extent possible and a judgment made as to its current condition. Hazards such as the following shall be eliminated,repaired,or corrected: broken wiring,non-insulated wiring,frayed wiring, lighting fixtures hanging from an electrical wire with no other means of support,missing cover plates on switches, outlets,and junction boxes,badly corroded outlets,exposed fuse box connections, improper fusing, inadequate service, overloaded circuits evidenced by frequently blown fuses,and insufficient outlets evidenced by multi-plug adapters or extension cords. In addition,any rewiring shall be done in-wall and without the use of conduit or other outer-wall protective casing,unless no other possibilities exist,and then only with prior approval by the property owner,CITY OF FORT LUPTON or the developer, and the local building official.(Approval by the local building official shall be in the form of an approved building permit or other document issued by the Building Department). All existing wiring and electrical equipment,where continued service is contemplated,shall not be a potential source of electrical hazard or ignition of combustible material. Where potential hazards are determined to be present, replacement of existing wiring and equipment shall be made and existing facilities that are inadequate to meet the present or anticipated demands shall be appropriately increased. All replacement of existing wiring and upgrade of electrical equipment shall be done in strict conformance with the National Electrical Code and all appropriate codes and ordinances adopted by the City of Fort Lupton. In addition,the following standards are to be addressed WHEN SUCH ELECTRICAL WORK IS REQUIRED DURING THE REHABILITATION OF THE DWELLING. 1. Service Entry: All Electrical Service entry points shall be secure and weather-tight. 2. Main Panel Box: All main panel boxes shall be property grounded and easily accessible to the occupants in the dwelling. A minimum of 150 ampere service shall be provided when the work requires a replacement of the panel box. All replaced main panel boxes shall be circuit breaker type only and shall be installed in strict accordance to all codes as so stated above. 3. Branch Circuits: Not less than two 15 amp and two 20 ampere circuits shall be provided for the dwelling unit,but in all cases,shall be adequate for the unit demand. 4. Receptacles: Every habitable space in the dwelling unit except the kitchen,shall contain receptacle outlets every twelve(12)linear feet with a minimum of two(2)separate receptacle outlets,and shall conform to the minimum code requirements. Every bathroom shall contain at least one(1)GFI(ground-fault circuit interrupter)receptacle and every kitchen shall contain at least two(2)GFI receptacles. All garage and Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 34 exterior receptacles shall be GFI. Laundry areas shall have at least(1)GFI receptacle and laundry areas with electrical dryers shall also have a 220 volt outlet. 5. Lighting Fixtures: Every hall,interior stairway,dwelling exit,water closet compartment,bathroom,kitchen, and furnace room shall contain at least one(1)lighting fixture. Other habitable rooms, such as bedrooms, may contain a switched outlet in lieu of a lighting fixture,but in all cases,all habitable rooms shall contain adequate means of illumination controlled via an appropriately installed electrical switch. 6. Smoke Detectors: In existing dwellings,not being re-wired,battery-operated smoke detectors shall be required in locations designed by the 2003 International Residential Code Section R313. In new construction or existing dwelling being re-wired,smoke detectors will be hard-wired and installed in accordance to the International Building/Residential Code and the 2008 National Electric Code. 7. Carbon Monoxide Detectors: Carbon monoxide detectors are required in all dwellings with a fuel-burning appliance. In existing dwellings,a battery-operated carbon monoxide detector shall be required within 15' of all sleeping rooms. In new construction and where practical in substantial rehabilitations,the CO detectors must be hard-wired according to the 2008 National Electric Code. All hard-wired CO detectors must have a battery backup. Multi-family units with a centralized alarm system may install a single alarm within 25' of the carbon monoxide source. 8. Low Voltage and Miscellaneous Systems • Existing phone, LAN,television cable, and antenna cable must be in good condition.Damaged cable may be repaired,replaced,or removed.New will include phone wiring for two phone jacks and two cable/antenna jacks(cable service or antenna not provided by Rehabilitation Program). ▪ Existing security systems must be in good condition and operable for the intended use. Nonfunctional systems may be removed. F. PLUMBING SYSTEMS As a result of work done and to the maximum extent possible under any of the above noted programs,the plumbing system, including the dwelling's sewer, shall operate free of fouling and clogging,and not have cross connections which permit contamination of the water supply or back-siphonage between fixtures. 1. Water Service Entry: All water service entry lines shall be properly connected to either a public water system or to an approved private water system. 2. Interior Water Distribution: All sinks, lavatories,bathtubs and showers shall be supplied with hot and cold running water. In addition,all water supply lines feeding sinks, lavatories,bathtubs, showers,toilets,water heaters and other plumbing fixtures shall be installed with accessible shut-off valves. Interior water distribution lines shall at all time supply water to the plumbing fixtures in sufficient volume and at pressure adequate to enable them to function satisfactorily. All interior water distribution lines in unheated areas shall be moved to heated areas or shall be insulated so as to prevent from freezing. 3. Drain,Waste and Vent Piping: Every sink, lavatory,bathtub,shower,toilet and other plumbing fixture shall be properly connected to either a public sewer system or to an approved private sewage disposal system and shall be properly vented. All sewer lines shall be equipped with an accessible clean-out fitting and shall be free of leaks or blockage that causes damage to other elements of the structure. All building waste water systems shall be appropriately vented through the roof and to the outside air to prevent the build-up of gases in the sewer lines and all drain lines from plumbing fixture shall have traps at the entrances to the waste water system to provide water seals which prevent the escape of sewer gases into living areas. Lead waste disposal lines/traps shall be replaced with no-lead material whenever possible. Replacement of water supply line from main supply source into structure and replacement of existing sewer from structures to sewer main line are allowable expenses for NSP funded projects. 4. Water Heater: Every dwelling unit shall have domestic hot water in quantities sufficient for the needs of the occupants and all existing water heating equipment shall be in good,serviceable condition. No water heaters shall be installed in rooms designed and used for sleeping and no conventional gas or oil fired water heaters or equipment shall be located in the bathroom,clothes closet,under any stairway,or in a confined space with access through any of the above locations. All fuel burning water heaters shall be connected to a legal vent and properly terminated at the exterior of the building. All venting equipment shall be free of cracks or holes Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 35 which allow fumes to be discharged;all fuel burning equipment shall be equipped with adequate combustion air in accordance with all local requirements. Water heater shall be equipped with a temperature/pressure relief valve with an overflow pipe.All water heaters shall have a shut off valve on the cold water supply line close to the heater. G. MECHANICAL EQUIPMENT As a result of work done and to the maximum extent possible under any of the above noted programs,all mechanical equipment in the structure shall provide for safety in operation,adequate capacity for the intended use,freedom from objectionable drafts,reasonable quietness of operation,and reasonable durability and economy of maintenance. In addition,all mechanical equipment shall be protected from excessive moisture,corrosion or other destructive elements. All existing mechanical equipment shall,to the greatest extent possible,be inspected for faulty operation,fire,and other hazards. Repair and/or replacement shall be made as needed and as necessary to eliminate the hazards. Fuel Supply: All gas piping shall be approved for such use and shall be free of leaks and all lines shall be free of corrosion that potentially could cause a gas leak. Soft copper and other non-rigid piping shall not be used in replacing and installing gas lines and all lines feeding individual gas fueled appliances shall have a shut-off valve. A maximum of three(3)feet of flexible pipe is permitted from the gas-stop to the appliance. Combustible material shall not be stored or located within close proximity to heating sources and flues. 1. Venting and Combustion Air: All fuel burning equipment shall be connected to an approved chimney,flue or vent, and shall not allow exhaust gases to enter the structure. All fuel burning equipment shall have an adequate supply of combustion air in accordance with local codes. Boilers shall be constructed in compliance with the appropriate American Society of Mechanical Engineers Construction Code and shall bear the ASME label.Gas fired heating and its installation shall conform to the appropriate ANSI listing and installation • requirements and the International Building Code as adapted by the City of Fort Lupton. 2. Distribution of Heat: Every heating system shall be capable of maintaining an interior temperature of at least 70 degrees F three feet above the floor within the kitchen,bedrooms,dining rooms, living and/or family rooms, and bathrooms of the dwelling when the outside temperature reaches 0 degrees F. All ductwork shall be properly sealed from the heat source to the register vent and from the return air supply to the heat source. 3. Air conditioning • Existing refrigeration units shall be serviced and certified in good working condition by a licensed mechanical contractor qualified as an air conditioning technician. When substantially rehabilitating a unit,the refrigeration unit shall be free of leaks and have a life expectancy of 5 years or more. Heavily corroded components and excessive energy usage are not acceptable and shall be repaired or replaced based on the largest ratio of cost/energy efficiency/life expectancy. • Refrigeration units under the drip line of roofs,or under rain gutters or canales shall be moved or protected from excessive run-off on the unit. • Condensate drain lines shall be properly drained to avoid damage to the property.Roof units shall be properly drained to avoid damage to the property. Roof units shall drain away from the roof in a manner that shall not damage the roof or structure. • Heat exchange fins shall be good condition. The compressor shall be free of excessive debris. The unit shall be free of excess debris,vegetation or any obstruction that prevents the free circulation of air around the unit. 4. Ventilation • Each bathroom shall be ventilated by the means of an operable window or an exhaust fan vented to the exterior of the dwelling and capable of providing 50 cfm of intermittent ventilation. • Kitchen cooking areas shall be provided ventilation via a ventilation hood capable of providing 100 cfm of intermittent ventilation.Unit may be equipped with listed ductless range hood re-circulating air through a charcoal filter or vented directly to the exterior of the dwelling. • Ventilation devices not in good operating condition shall be repaired or replaced. • Exhaust hoods or fans and filters must be in sanitary condition. 5. Evaporative Coolers Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 36 Evaporative coolers used as the only cooling source shall be capable of changing the air in a unit at a rate of once every two minutes.Existing coolers, in repairable condition but not capable of meeting this requirement, shall be replaced.Evaporate coolers may not be used in conjunction with dehumidifying type units. • When substantially rehabilitating an existing unit,the cooler shall be free of leaks and have a life expectancy of 5 years or more. Heavily corroded cabinets are not acceptable. • Each cooler cabinet shall have all pad-frames and a means of fastening pads in each frame securely enough to prevent sagging. • Each cooler shall be level and have a water distribution system capable of delivering enough water to each pad to create run-off along the bottom of the entire pad. Plugged distribution lines,or occluded water troughs shall be cleaned. The water distribution system shall be free of leaks, including the attachments at the pump. • All coolers shall have at a minimum a dedicated''A" PVC water line with a connection to the dwellings water supply located on the exterior of the dwelling. Water supply shall have its own separate shut-off and a self-regulating valve for maintaining the amount of water needed. • The pump shall be capable of providing a reserve of water in each of the water distribution troughs when the troughs are clean and functioning properly. • Fan belts, bearings, squirrel cage or blower shall be in good operating condition. • Blower shall be balanced and capable of quiet operation and contain a two-speed motor. • Cooler shall be controlled by thermostat centrally located within the unit. • Connected to new or existing duct system. • Every evaporate cooler shall be accessible for inspection,service,and replacement without removing any permanent construction. 6. Wood and Coal Stoves Existing wood stove installations will have safe clearances from combustible surfaces in accordance with the currently adopted International Building/Residential Code and the currently adopted International Mechanical Code and the current Colorado wood stove standards. Protective floor,wall,and ceiling coverings will be provided as necessary. Floor system must have structural capacity to support the stove and a hearth with a 4" minimum thickness. Flues will be safe,properly sized,and clean. Wood stoves not meeting these requirements shall be repaired or removed. All coal stoves shall be removed. 7. Fireplaces and Flues: Fireplaces and other construction or devices intended for similar use shall be stable, structurally safe and connected to an approved chimney as described in G-6,above. H. INSULATION AND WEATHERIZATION: Necessary corrective measures shall be required to ensure that all dwellings have the following minimal thermal protection: 1. Attic insulation may be provided over all habitable heated areas of at least R-38 value and adequacy of attic ventilation shall be assured. 2. Under-floor insulation shall be provided beneath all habitable heated areas over unheated spaces of at least R-13 value and insulation may be installed between or under floor joists. 3. Wall insulation shall be provided when or if possible of at least R-13 value. All thermal insulation shall be installed such as to fill all wall cavities or furring spaces without excessive compression and a vapor barrier shall be provided on the warm side of the cavity or furring space where insulation is added. 4. All doors and windows shall be adequately weather-stripped to reduce the infiltration of air into the living areas and any loose or brittle caulking around door and window frames shall be replaced or installed new where none is present. L ADDITIONAL REQUIREMENTS In addition to above requirements,projects developed with any program funds shall make a good faith effort to meet the following guidelines: 1.Minimum Unit Size: Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 37 1BDRM 2BDRM 3BDRM 4BDRM 650 sq.ft. 750 sq.ft. 950 sq.ft. 1,050 sq.ft. 2.Minimum Sound Barrier Requirements: Sound Transmission Limitations Standard Location of Partitions Transmission Class (STC) Living unit to living unit, corridor or 45 public space STC Location of Floor-Ceiling Standard Insulation Class Floor-ceiling separating living units from other living units,public space or 45 other areas 3. Other Needs/Requirements Other needs or requirements may be eligible if approved by the Community Development Director and are eligible under State and HUD guidelines. 4. Acoustical Control: General Living units shall be designed to provide an acoustically controlled environment in relation to exterior noises and noise from adjacent living units and public spaces. 5. Sound Transmission Limitations Mechanical equipment shall be located and installed to minimize transmission of objectionable sound. Sound Transmission Class(STC)shall be determined in accordance with ASTM E90 and ASTM E413. Living units shall be provided with acoustic separation in accordance with Section 1207 of the 2006* International Building Code. 6. Bedrooms Minimum Bedroom Sizes: the minimum size for a bedroom will be 7 feet by 10 feet,but larger sizes should be encouraged. When new construction is involved,minimum size will be 11 'A feet by 9 feet. Closets: All bedrooms must have access to closets for storage of clothing.On existing housing,closets in adjoining hall areas are acceptable. Windows: All bedrooms must have an egress window in addition to the door. Egress windows must be no more than 44 inches from the floor and permit at least 5.7 square feet of egress area. Windows must be operable,have locking mechanisms,and screens installed. If there are living accommodations in a basement, an egress window is required. Doors: All bedrooms must have a functional door that closes, which,preferably can be locked from the inside.The width must be at least 30 inches with 32"to 36"preferred.When new construction is undertaken, a 36-inch door should be considered.The door cannot have punctures or holes. 7. Floor Covering Requirements • All new carpet will be minimum 30 ounce per square yard with "A"#6 density polyurethane padding meeting FHA specifications. • Carpet will be selected by the owner from a maximum material allowance of$35.00 per square yard installed. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 38 • All new vinyl sheet flooring will be no-wax cushioned vinyl tile(VTC)meeting FHA specifications for residential use with minimum 10 mil thickness. • Vinyl sheet flooring with a minimum thickness of 10 mil upper layer will be selected by the owner from a maximum material allowance of$38.00 per square yard installed including underlayment and prep. • Carpet and vinyl tile is to be stretched to eliminate puckers,scallops, and ripples and installed to manufacturer's specifications. • All damaged and missing tack strips or metal edging must be replaced. • All doors are to operate properly after installation of flooring. • Color and pattern to be selected by owner from standard color charts. • Protect carpet and vinyl after installation. Location will be specified in the Description of Work Specifications. 8. Damaged Interior Walls Holes in drywall must be repaired and precautions taken to prevent future damage by installation of doorstops and other necessary measures. Water damaged drywall must be removed and replaced. In wet areas of bathrooms, 1/2"water-resistant drywall material or 1/2"cement backer board shall be utilized. Interior walls with decayed drywall must be repaired by installing new drywall,taping cracks to conceal all joints and fasteners,double tapping corners,texturing,and repainting. When drywall is removed,all exposed studs, insulation,electrical wiring and plumbing is to be inspected and all defects be repaired. When drywall is removed in a bathroom,2"x6" blocking must be installed between the studs at all grab bar locations. All drywall used must be produced exclusively in the United States. J. ARCHITECTURAL BARRIERS In recognition of the Americans with Disabilities Act,every effort should be taken to remove barriers to the handicapped or elderly. These efforts may include installation of handrails on staircases with more than three tiers, ensuing that the height of each step does not exceed eight inches in height and no less than ten inches in tread width. When pouring new sidewalks and stoops,ramping should be considered as an alternative to steps. Tripping situations caused by uplifting of sidewalks,tree roots,or other barriers should be removed. K. ENVIRONMENTAL AND OTHER REQUIREMENTS 1. Davis-Bacon Wage Rates Requirements Davis-Bacon wage rates are required on the rehabilitation of residential property containing eight(8)or more assisted units or if there are eight contiguous single-family units in an activity. All Davis-Bacon requirements shall be adhered to. The contractor is required to provide certified payrolls to the Rehab Specialist. 2. Environmental Review Requirements An environmental review is required in accordance with 24 CFR Part 58. If the assessment determines the project may significantly affect the quality of the human environment,the project will be declared ineligible. Completion of the environmental review process is mandatory before taking a physical action on a site,or making a commitment or expenditure of HUD or non-HUD funds for property acquisition,demolition, rehabilitation,conversion, lease,and repair or construction activities. No funds may be committed to an activity or project before the completion of the environmental review and approval of the Request for Release of Funds from the United States Department of Housing and Urban Development(HUD). 3. Historic Properties Section 106 of the National Historic Preservation Act,requires that the responsible entity receiving federal funds take into account the effect the proposed project may have on historic properties or sites. All work on such properties shall comply with the Secretary of the Interior's Standards for Historic Preservation Projects. CITY OF FORT LUPTON requires historic review by the State Historic Preservation office of all properties 50-years old or older unless covered under Programmatic Agreement. Properties 40 to 50 years old which will have any exterior alterations require local review. 4. Uniform Relocation Act By statue,all properties to be acquired using program funds shall be acquired through a voluntary process. A "Notice of Interest"will be sent to the current property owners and occupants notifying them of the City's interest in acquiring the property,and that while the City of Fort Lupton has Eminent Domain Powers,they will not be exercised for the acquisition of the property. The notice will also include language telling the Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 39 owners and occupants not to move out and that this notice in not an intent to acquire,but merely a preliminary statement of interest. Receiving a positive response from a willing seller,the property to be acquired shall be appraised to determine fair market value of the property. A qualified licensed appraisal firm shall appraise the property in accordance with 49 CRF 24.103. Upon determination of fair market value, a Summary Statement of Basis for the Offer of Just Compensation will be sent to the current owner giving a complete description of the property,a list of all buildings and improvements covered by the offer,and the determination of the market value. In response to the notice of interest,the property owner shall submit a current occupant list to CITY OF FORT LUPTON to estimate any applicable relocation expenses. Issuance of the Notice of Just Compensation will initiate negotiations for the sale of the property. At this time all tenants occupying the property to be displaced will receive a notice of eligibility for relocation assistance stating that if an agreement is reached on the sale of the property,after the transaction is completed,the occupants will be required to move out, following appropriate URA timelines,and those tenants displaced may be eligible for relocation assistance. Tenants not to be displaced will receive a Notice of Non-displacement stating that they will not be displaced by the project. Other tenants may need to be temporarily relocated to facilitate the renovation of the structure, in that instance,suitable temporary housing will be secured by CITY OF FORT LUPTON,and tenants will be notified 90 days in advance of the move. Tenants will be reimbursed for reasonable expenses associated with the move, utility connection(s),and adjustments in rent for the difference between the temporary unit and their old unit, if any. 5. Vicinity Hiring Requirement(NSP 3 ONLY): All NSP 3 projects shall,to the maximum extent feasible,provide for the hiring of employees who reside in the vicinity of the NSP 3 projects or contract with small businesses that are owned and operated by persons residing in the vicinity of these projects. For the purposes of administering this requirement, HUD has adopted the Section 3 applicability thresholds for community development assistance. This can be found at 24 CFR 135.3(a)(3)(ii). The NSP 3 local hiring requirement does not replace the responsibilities of grantees under Section 3 of the Housing and Urban Development Act of 1968. For the purposes of NSP3,HUD has defined "vicinity" as each neighborhood identified by the NSP 3 grantee as being the areas of greatest need. A small business must meet the criteria set forth in section 3(a)of the Small Business Act. For the full definition please see 42 U.S.C. 5302(a)(23). 6. Hazardous Materials Asbestos • All federally assisted properties except owner occupied rehab projects will require testing for asbestos by a State Certified Building Inspector,and samples will be analyzed by an accredited laboratory regardless of size of potential holes that may occur. Owner occupied rehab projects may be tested depending on scope of work. • The contractor and all tenants shall be notified as per HUD regulations regarding asbestos hazards. The contractor shall follow all local,state,and federal regulations in the proper removal,handling, and disposal of all asbestos containing materials • Asbestos containing materials(ACM)that are to be removed as a condition of the contract shall be removed and disposed of in a safe and proper manner by a State certified asbestos abatement contractor following the requirements of Regulation 8 from the State of Colorado, Department of Public Health and Environment,Air Quality Division under 5 CCR 1001-10. • Projects involving removal of ACM in excess of the trigger levels specified in Regulation 8 shall require a State issued abatement permit. • All ACM materials must be disposed of in a landfill certified to accept ACM. Contractor shall submit transportation manifest along with profile number. • Asbestos containing material must be dealt with in the most practicable and safe manner possible. • Exposed floor mastic containing asbestos must be encapsulated or removed in those areas where carpet is being installed. • Unsound tile containing asbestos must be removed prior to installation of a new layer of resilient flooring. • No asbestos containing materials shall be used for repair,replacement or new installation. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 40 Lead-Based Paint Projects undertaken in structures built prior to 1978 will be subject to testing by a certified lead based paint inspector or risk assessor prior to any work being done and to the cleaning regime required of lead abatement and/or lead safe work practices. The completed project will be subject to clearance wipe sampling conducted by a Certified Lead Based Paint Inspector or Risk Assessor. Clearance wipe samples will be analyzed in an NLLAP accredited laboratory. Wipe samples with a lead content above the following levels are not acceptable: • Floors-40µg/sqft • Window Sills—250µg/sqft • Window Troughs-400µg/sgft If the clearance sample results returned from the laboratory are above acceptable limits or the initial baseline results,then at contractor's expense,the contractor shall re-clean the work area or undertake additional work necessary to bring the lead level within acceptable limits. Re-testing will be done at the contractor's expense. The buyer and/or all tenants of housing units built prior to 1978 shall be notified by issuance of Renovate Right pamphlet of HUD regulations regarding lead based paint: • The property may contain lead based paint(LBP) • The hazards of lead based paint. • The symptoms and treatment of LBP Poisoning. • The precautions to take. • The advisability and availability of blood level screening for children under the age of seven. • The appropriate abatement procedures if LBP is found. • The buyer and/or tenant, if any,shall sign and receive a copy of the Lead Based Paint Information Notice and the memo to file. • Every unit constructed before 1978,which is or may become occupied by children under the age of seven,must be tested for the presence of lead based paint. • All lead based paint hazards must be mitigated using interim controls,enclosure,encapsulation, or abatement methods in accordance with federal regulations. A certified lead based paint risk assessor shall make the determination as to which preventative measure is appropriate on a project-by-project basis. Radon • Short-term radon testing will be conducted by a State certified radon measurement provider on all program assisted rehabilitation projects where deemed necessary. • Results from short-term tests greater than 4pCi/I will be followed up with a long-term radon test. • Radon mitigation construction efforts shall be included in the Description of Work Specification on properties with an average radon exposure exceeding 4pCi/l. Mold • All program assisted properties will be visually inspected for the presence of mold. An Industrial Hygienist certified by the American Council from Accredited Certification(ACAC), i.e.: Certified Microbial Consultant or equivalent,will be consulted on all properties with major plumbing leaks, roof leaks, sewer backups,strong odors, evidence of previous water instructions, or visible mold in a combined area greater than 10 sqft. • A Certified Industrial Hygienist or equivalent shall conduct all mold testing. • Based on the results of the testing and the recommendations of the Certified Microbial Consultant,or equivalent,mold mitigation efforts will be included in the Description of Work Specifications. Methamphetamine • All properties acquired with Federal Funds must be tested using,at minimum,a risk survey as defined by Colorado Statues 6CCR 1014-3 and conducted by an Industrial Hygienist as defined by the Colorado statutes 6CCR 1014-3. Meth screenings are not acceptable for the identification of methamphetamine contaminants. Owner occupied rehab projects may be tested if there appears to be evidence of a meth lab. Properties acquired for demolition may have this requirement waived. • If a property tests positive for any methamphetamine residue,a qualified industrial hygienist will develop or review the scope of work.The mitigation efforts will either be the responsibility of the owner,to be completed prior to acquisition and certified habitable according to regulations or will be Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 41 addressed in the Description of Work Specifications in accordance with Colorado statues 6CCR 4013-3.If the future CDPHE adopts new regulations or revises new standards,this Standard will adopt those changes. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 42 ATTACHMENT C: SAMPLE CLOSING DOCUMENTS Promissory Note Deed of Trust Homebuyer Agreement Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 43 IF THIS FORM IS USED INA CONSUMER CREDIT TRANSACTION, CONSULT LEGAL COUNSEL. THIS IS A LEGAL INSTRUMENT.IF NOT UNDERSTOOD,LEGAL, TAX OR OTHER COUNSEL SHOULD BE CONSULTED BEFORE SIGNING. PROMISSORY NOTE U.S. $ Fort Lupton, Colorado Date: 1. FOR VALUE RECEIVED,the undersigned Borrower(s) promise(s)to pay the Weld County Housing Authority the sum of without interest. The Principal shall be payable at the Weld County Housing Authority offices, located at 903 6th Street Greeley,CO or such other place as the WCHA may designate. There are no periodic payments due or permitted on this Promissory Note. The term of this Promissory Note is years from the date of this Promissory Note. The obligations of Borrower and the terms and conditions of repayment or forgiveness of this Promissory Note are set forth on the Homebuyer Affordability Agreement, a copy of which is attached hereto as Exhibit A. 2. If Borrower fails to comply with the obligations or requirements set forth on Exhibit A or if any default under any Deed of Trust securing this Note occurs,the entire principal amount shall at once become due and payable. The Weld County Housing Authority shall be entitled to collect all reasonable costs and expense of collection and/or suit, including, but not limited to reasonable attorneys' fees. 3. Borrower and all other makers, sureties, guarantors, and endorsers hereby waive presentment, notice of dishonor and protest, and they hereby agree to any extensions of time of payment and partial payments before, at, or after maturity. This Note shall be the joint and several obligation of Borrower and all other makers, sureties, guarantors and endorsers, and their successors and assigns. 4. Any notice to Borrower provided for in this Note shall be in writing and shall be given and be effective upon (a) delivery to Borrower or (b) by mailing such notice by first class U.S. mail, addressed to Borrower at Borrower's address stated below, or to such other address as Borrower may designate by notice to the Weld County Housing Authority. Any notice to the Weld County Housing Authority shall be in writing and shall be given and be effective upon (a) delivery to the Weld County Housing Authority or (b) by mailing such notice by first class U.S. mail, to the Weld County Housing Authority at the address stated in the first paragraph of this Note, or to such other address as the Weld County Housing Authority may designate by notice to Borrower. 5. The indebtedness evidenced by this Note is secured by a Deed of Trust dated and until released said Deed of Trust contains additional rights of the Weld County Housing Authority. Such rights may cause Acceleration of the indebtedness evidenced by this Note. Reference is made to said Deed of Trust for such additional terms. Said Deed of Trust grants rights in the following legally described property located in the County of Weld, State of Colorado: (insert legal description) Property Address: Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 44 Fort Lupton, Colorado 80631 (signature page follows) BORROWER: {Signature} {Printed} Borrower's address: (CAUTION: SIGN ORIGINAL NOTE ONLY/RETAIN COPY) KEEP THIS NOTE IN A SAFE PLACE. THE ORIGINAL OF THIS NOTE MUST BE EXHIBITED TO THE PUBLIC TRUSTEE IN ORDER TO RELEASE A DEED OF TRUST SECURING THIS NOTE. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 45 IF THIS FORM IS USED INA CONSUMER CREDIT TRANSACTION, CONSULT LEGAL COUNSEL. THIS ISA LEGAL INSTRUMENT. IF NOT UNDERSTOOD,LEGAL, TAX OR OTHER COUNSEL SHOULD BE CONSULTED BEFORE SIGNING. DEED OF TRUST (Due on Transfer-Strict) THIS DEED OF TRUST is made this day of , 20_, between: (Borrower), whose address is and the Public Trustee of the County in which the Property (see § 1) is situated (Trustee); for the benefit of the Weld County Housing Authority, whose address is: 903 6th Street Greeley, Colorado. Borrower and WELD COUNTY HOUSING AUTHORITY covenant and agree as follows: 1. Property in Trust. Borrower, in consideration of the indebtedness herein recited and the trust herein created, hereby grants and conveys to Trustee in trust, with power of sale, the following legally described property located in the City of Fort Lupton, County of Weld, State of Colorado: [insert legal description) Which has the address of , (Street) , Fort Lupton, Colorado 8063 , together with all its appurtenances (Property). 2. Note: Other Obligations Secured. This Deed of Trust is given to secure to The Weld County Housing Authority: 2.1. the repayment of the indebtedness evidenced by Borrower's note (Note) dated in the principal sum of Dollars (U.S. $ ), without interest. The term of the Note is years from the date of the Note. The terms and conditions of repayment or forgiveness of the Note are set forth on the Note and the Exhibit A attached to the Note. 2.2. the payment of all other sums, with interest thereon at 0%per annum, disbursed by WELD COUNTY HOUSING AUTHORITY in accordance with this Deed of Trust to protect the security of this Deed of Trust; and 2.3. the performance of the covenants and agreements of Borrower herein contained. 3. Title. Borrower covenants that Borrower owns and has the right to grant and convey the Property, and warrants title to the same, subject to general real estate taxes for the current year, easements of record or in existence, and recorded declarations, restrictions, reservations and covenants, if any, as of this date; and subject to 4. Payment of Principal. The obligations of Borrower and the terms and conditions of repayment or forgiveness of the Note are set forth on the Note and the Exhibit A attached thereto. Borrower shall comply with all of said obligations, terms and conditions. 5. Application of Payments. All payments received by WELD COUNTY HOUSING AUTHORITY under the terms hereof shall be applied by WELD COUNTY HOUSING AUTHORITY to amounts disbursed by WELD COUNTY HOUSING AUTHORITY pursuant to § 9 (Protection of WELD COUNTY HOUSING AUTHORITY's Security), and the balance in accordance with the terms and conditions of the Note. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 46 6. Prior Mortgages and Deeds of Trust; Charges; Liens. Borrower shall perform all of Borrower's obligations under any prior deed of trust and any other prior liens. Borrower shall pay all taxes, assessments and other charges, fines and impositions attributable to the Property which may have or attain a priority over this Deed of Trust, and leasehold payments or ground rents, if any, in the manner set out in §23 (Escrow Funds for Taxes and Insurance) or, if not required to be paid in such manner, by Borrower making payment when due, directly to the payee thereof. Despite the foregoing, Borrower shall not be required to make payments otherwise required by this section if Borrower, after notice to WELD COUNTY HOUSING AUTHORITY, shall in good faith contest such obligation by, or defend enforcement of such obligation in, legal proceedings which operate to prevent the enforcement of the obligation or forfeiture of the Property or any part thereof, only upon Borrower making all such contested payments and other payments as ordered by the court to the registry of the court in which such proceedings are filed. 7. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire or hazards included within the term "extended coverage" in an amount at least equal to the lesser of (a) the insurable value of the Property or (b) an amount sufficient to pay the sums secured by this Deed of Trust as well as any prior encumbrances on the Property. All of the foregoing shall be known as "Property Insurance." The insurance carrier providing the insurance shall be qualified to write Property Insurance in Colorado and shall be chosen by Borrower subject to WELD COUNTY HOUSING AUTHORITY's right to reject the chosen carrier for reasonable cause. All insurance policies and renewals thereof shall include a standard mortgage clause in favor of WELD COUNTY HOUSING AUTHORITY, and shall provide that the insurance carrier shall notify WELD COUNTY HOUSING AUTHORITY at least ten (10) days before cancellation, termination or any material change of coverage. Insurance policies shall be furnished to WELD COUNTY HOUSING AUTHORITY at or before closing. WELD COUNTY HOUSING AUTHORITY shall have the right to hold the policies and renewals thereof. In the event of loss, Borrower shall give prompt notice to the insurance carrier and WELD COUNTY HOUSING AUTHORITY. WELD COUNTY HOUSING AUTHORITY may make proof of loss if not made promptly by Borrower. Insurance proceeds shall be applied to restoration or repair of the Property damaged, provided said restoration or repair is economically feasible and the security of this Deed of Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the security of this Deed of Trust would be impaired, the insurance proceeds shall be applied to the sums secured by this Deed of Trust, with the excess, if any, paid to Borrower. If the Property is abandoned by Borrower, or if Borrower fails to respond to WELD COUNTY HOUSING AUTHORITY within 30 days from the date notice is given in accordance with § 16 (Notice) by WELD COUNTY HOUSING AUTHORITY to Borrower that the insurance carrier offers to settle a claim for insurance benefits, WELD COUNTY HOUSING AUTHORITY is authorized to collect and apply the insurance proceeds, at WELD COUNTY HOUSING AUTHORITY's option, either to restoration or repair of the Property or to the sums secured by this Deed of Trust. Any such application of proceeds to principal shall not extend or postpone the due date of the installments referred to in §§4 (Payment of Principal and Interest) and 23 (Escrow Funds for Taxes and Insurance) or change the amount of such installments. Notwithstanding anything herein to the contrary, if under § 18 (Acceleration; Foreclosure; Other Remedies) the Property is acquired by WELD COUNTY HOUSING AUTHORITY, all right, title and interest of Borrower in and to any insurance policies and in and to the proceeds thereof resulting from damage to the Property prior to the sale or acquisition shall pass to WELD COUNTY HOUSING AUTHORITY to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition. All of the rights of Borrower and WELD COUNTY HOUSING AUTHORITY hereunder with respect to insurance carriers, insurance policies and insurance proceeds are subject to the rights of any holder of a prior deed of trust with respect to said insurance carriers, policies and proceeds. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 47 8. Preservation and Maintenance of Property. Borrower shall keep the Property in good repair and shall not commit waste or permit impairment or deterioration of the Property and shall comply with the provisions of any lease if this Deed of Trust is on a leasehold. Borrower shall perform all of Borrower's obligations under any declarations, covenants, by-laws, rules, or other documents governing the use, ownership or occupancy of the Property. 9. Protection of WELD COUNTY HOUSING AUTHORITY's Security. Except when Borrower has exercised Borrower's rights under §6 above, if Borrower fails to perform the covenants and agreements contained in this Deed of Trust, or if a default occurs in a prior lien, or if any action or proceeding is commenced which materially affects WELD COUNTY HOUSING AUTHORITY's interest in the Property, then WELD COUNTY HOUSING AUTHORITY, at WELD COUNTY HOUSING AUTHORITY's option, with notice to Borrower if required by law, may make such appearances, disburse such sums and take such action as is necessary to protect WELD COUNTY HOUSING AUTHORITY's interest, including, but not limited to: 9.1. any general or special taxes or ditch or water assessments levied or accruing against the Property; 9.2. the premiums on any insurance necessary to protect any improvements comprising a part of the Property; 9.3. sums due on any prior lien or encumbrance on the Property; 9.4. if the Property is a leasehold or is subject to a lease, all sums due under such lease; 9.5. the reasonable costs and expenses of defending, protecting, and maintaining the Property and WELD COUNTY HOUSING AUTHORITY's interest in the Property, including repair and maintenance costs and expenses, costs and expenses of protecting and securing the Property, receiver's fees and expenses, inspection fees, appraisal fees, court costs, attorney fees and costs, and fees and costs of an attorney in the employment of WELD COUNTY HOUSING AUTHORITY or holder of the certificate of purchase; 9.6. all other costs and expenses allowable by the evidence of debt or this Deed of Trust; and 9.7. such other costs and expenses which may be authorized by a court of competent jurisdiction. Borrower hereby assigns to WELD COUNTY HOUSING AUTHORITY any right Borrower may have by reason of any prior encumbrance on the Property or by law or otherwise to cure any default under said prior encumbrance. Any amounts disbursed by WELD COUNTY HOUSING AUTHORITY pursuant to this §9, with interest thereon, shall become additional indebtedness of Borrower secured by this Deed of Trust. Such amounts shall be payable upon notice from WELD COUNTY HOUSING AUTHORITY to Borrower requesting payment thereof, and WELD COUNTY HOUSING AUTHORITY may bring suit to collect any amounts so disbursed plus interest specified in §2.2 (Note: Other Obligations Secured). Nothing contained in this §9 shall require WELD COUNTY HOUSING AUTHORITY to incur any expense or take any action hereunder. 10. Inspection. WELD COUNTY HOUSING AUTHORITY may make or cause to be made reasonable entries upon and inspection of the Property, provided that WELD COUNTY HOUSING AUTHORITY shall give Borrower notice prior to any such inspection specifying reasonable cause therefore related to WELD COUNTY HOUSING AUTHORITY's interest in the Property. 11. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of the Property, or part thereof, or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to WELD COUNTY HOUSING AUTHORITY as herein provided. However, all of the rights of Borrower and WELD COUNTY HOUSING AUTHORITY hereunder with respect to such proceeds are subject to the rights of any holder of a prior deed of trust. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 48 In the event of a total taking of the Property, the proceeds shall be applied to the sums secured by this Deed of Trust, with the excess, if any, paid to Borrower. In the event of a partial taking of the Property, the proceeds remaining after taking out any part of the award due any prior lien holder (net award) shall be divided between WELD COUNTY HOUSING AUTHORITY and Borrower, in the same ratio as the amount of the sums secured by this Deed of Trust immediately prior to the date of taking bears to Borrower's equity in the Property immediately prior to the date of taking. Borrower's equity in the Property means the fair market value of the Property less the amount of sums secured by both this Deed of Trust and all prior liens (except taxes) that are to receive any of the award, all at the value immediately prior to the date of taking. If the Property is abandoned by Borrower or if, after notice by WELD COUNTY HOUSING AUTHORITY to Borrower that the condemnor offers to make an award or settle a claim for damages, Borrower fails to respond to WELD COUNTY HOUSING AUTHORITY within 30 days after the date such notice is given, WELD COUNTY HOUSING AUTHORITY is authorized to collect and apply the proceeds, at WELD COUNTY HOUSING AUTHORITY's option, either to restoration or repair of the Property or to the sums secured by this Deed of Trust. Any such application of proceeds to principal shall not extend or postpone the due date of the installments referred to in §§ 4 (Payment of Principal and Interest) and 23 (Escrow Funds for Taxes and Insurance)nor change the amount of such installments. 12. Borrower not Released. Extension of the time for payment or modification of amortization of the sums secured by this Deed of Trust granted by WELD COUNTY HOUSING AUTHORITY to any successor in interest of Borrower shall not operate to release, in any manner, the liability of the original Borrower, nor Borrower's successors in interest, from the original terms of this Deed of Trust. WELD COUNTY HOUSING AUTHORITY shall not be required to commence proceedings against such successor or refuse to extend time for payment or otherwise modify amortization of the sums secured by this Deed of Trust by reason of any demand made by the original Borrower nor Borrower's successors in interest. 13. Forbearance by WELD COUNTY HOUSING AUTHORITY Not a Waiver. Any forbearance by WELD COUNTY HOUSING AUTHORITY in exercising any right or remedy hereunder, or otherwise afforded by law, shall not be a waiver or preclude the exercise of any such right or remedy. 14. Remedies Cumulative. Each remedy provided in the Note and this Deed of Trust is distinct from and cumulative to all other rights or remedies under the Note and this Deed of Trust or afforded by law or equity, and may be exercised concurrently, independently or successively. 15. Successors and Assigns Bound; Joint and Several Liability; Captions. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of WELD COUNTY HOUSING AUTHORITY and Borrower, subject to the provisions of § 24 (Transfer of the Property; Assumption). All covenants and agreements of Borrower shall be joint and several. The captions and headings of the sections in this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 16. Notice. Except for any notice required by law to be given in another manner, (a) any notice to Borrower provided for in this Deed of Trust shall be in writing and shall be given and be effective upon (1) delivery to Borrower or (2) mailing such notice by first class U.S. mail, addressed to Borrower at Borrower's address stated herein or at such other address as Borrower may designate by notice to WELD COUNTY HOUSING AUTHORITY as provided herein, and (b) any notice to WELD COUNTY HOUSING AUTHORITY shall be in writing and shall be given and be effective upon (1) delivery to WELD COUNTY HOUSING AUTHORITY or (2) mailing such notice by first class U.S. mail, to WELD COUNTY HOUSING AUTHORITY's address stated herein or to such other address as WELD COUNTY HOUSING AUTHORITY may designate by notice to Borrower as Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 49 provided herein. Any notice provided for in this Deed of Trust shall be deemed to have been given to Borrower or WELD COUNTY HOUSING AUTHORITY when given in any manner designated herein. 17. Governing Law; Severability. The Note and this Deed of Trust shall be governed by the law of Colorado. In the event that any provision or clause of this Deed of Trust or the Note conflicts with the law, such conflict shall not affect other provisions of this Deed of Trust or the Note which can be given effect without the conflicting provision, and to this end the provisions of the Deed of Trust and Note are declared to be severable. 18. Acceleration; Foreclosure; Other Remedies. Except as provided in § 24 (Transfer of the Property; Assumption), upon Borrower's breach of any covenant or agreement of Borrower in this Deed of Trust, or upon any default in a prior lien upon the Property, (unless Borrower has exercised Borrower's rights under §6 above), at WELD COUNTY HOUSING AUTHORITY's option, all of the sums secured by this Deed of Trust shall be immediately due and payable (Acceleration). To exercise this option, WELD COUNTY HOUSING AUTHORITY may invoke the power of sale and any other remedies permitted by law. WELD COUNTY HOUSING AUTHORITY shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this Deed of Trust, including, but not limited to, reasonable attorney's fees. If WELD COUNTY HOUSING AUTHORITY invokes the power of sale, WELD COUNTY HOUSING AUTHORITY shall give written notice to Trustee of such election. Trustee shall give such notice to Borrower of Borrower's rights as is provided by law. Trustee shall record a copy of such notice and shall cause publication of the legal notice as required by law in a legal newspaper of general circulation in each county in which the Property is situated, and shall mail copies of such notice of sale to Borrower and other persons as prescribed by law. After the lapse of such time as may be required by law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder for cash at the time and place (which may be on the Property or any part thereof as permitted by law) in one or more parcels as Trustee may think best and in such order as Trustee may determine. WELD COUNTY HOUSING AUTHORITY or WELD COUNTY HOUSING AUTHORITY's designee may purchase the Property at any sale. It shall not be obligatory upon the purchaser at any such sale to see to the application of the purchase money. Trustee shall apply the proceeds of the sale in the following order: (a) to all reasonable costs and expenses of the sale, including, but not limited to, reasonable Trustee's and attorney's fees and costs of title evidence; (b) to all sums secured by this Deed of Trust; and (c) the excess, if any, to the person or persons legally entitled thereto. 19. Borrower's Right to Cure Default. Whenever foreclosure is commenced for nonpayment of any sums due hereunder, the owners of the Property or parties liable hereon shall be entitled to cure said defaults by paying all delinquent principal and interest payments due as of the date of cure, costs, expenses, late charges, attorney's fees and other fees all in the manner provided by law. Upon such payment, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as though no Acceleration had occurred, and the foreclosure proceedings shall be discontinued. 20. Assignment of Rents; Appointment of Receiver; WELD COUNTY HOUSING AUTHORITY in Possession. As additional security hereunder, Borrower hereby assigns to WELD COUNTY HOUSING AUTHORITY the rents of the Property; however, Borrower shall, prior to Acceleration under § 18 (Acceleration; Foreclosure; Other Remedies) or abandonment of the Property, have the right to collect and retain such rents as they become due and payable. WELD COUNTY HOUSING AUTHORITY or the holder of the Trustee's certificate of purchase shall be entitled to a receiver for the Property after Acceleration under § 18 (Acceleration; Foreclosure; Other Remedies), and shall also be so entitled during the time covered by foreclosure Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 50 proceedings and the period of redemption, if any; and shall be entitled thereto as a matter of right without regard to the solvency or insolvency of Borrower or of the then owner of the Property, and without regard to the value thereof. Such receiver may be appointed by any Court of competent jurisdiction upon ex parte application and without notice; notice being hereby expressly waived. Upon Acceleration under § 18 (Acceleration; Foreclosure; Other Remedies) or abandonment of the Property, WELD COUNTY HOUSING AUTHORITY, in person, by agent or by judicially- appointed receiver, shall be entitled to enter upon, take possession of and manage the Property and to collect the rents of the Property including those past due. All rents collected by WELD COUNTY HOUSING AUTHORITY or the receiver shall be applied, first to payment of the costs of preservation and management of the Property, second to payments due upon prior liens, and then to the sums secured by this Deed of Trust. WELD COUNTY HOUSING AUTHORITY and the receiver shall be liable to account only for those rents actually received. 21. Release. Upon payment of all sums secured by this Deed of Trust, WELD COUNTY HOUSING AUTHORITY shall cause Trustee to release this Deed of Trust and shall produce for Trustee the Note. Borrower shall pay all costs of recordation and shall pay the statutory Trustee's fees. If WELD COUNTY HOUSING AUTHORITY shall not produce the Note as aforesaid, then WELD COUNTY HOUSING AUTHORITY, upon notice in accordance with § 16 (Notice) from Borrower to WELD COUNTY HOUSING AUTHORITY, shall obtain, at WELD COUNTY HOUSING AUTHORITY's expense, and file any lost instrument bond required by Trustee or pay the cost thereof to effect the release of this Deed of Trust. 22. Waiver of Exemptions. Borrower hereby waives all right of homestead and any other exemption in the Property under state or federal law presently existing or hereafter enacted. 23. Escrow Funds for Taxes and Insurance. This § 23 is not applicable if Funds, as defined below, are being paid pursuant to a prior encumbrance. Subject to applicable law, Borrower shall pay to WELD COUNTY HOUSING AUTHORITY, on each day installments of principal and interest are payable under the Note, until the Note is paid in full, a sum(herein referred to as "Funds") equal to NA of the yearly taxes and assessments which may attain priority over this Deed of Trust, plus NA of yearly premium installments for Property Insurance, all as reasonably estimated initially and from time to time by WELD COUNTY HOUSING AUTHORITY on the basis of assessments and bills and reasonable estimates thereof, taking into account any excess Funds not used or shortages. The principal of the Funds shall be held in a separate account by WELD COUNTY HOUSING AUTHORITY in trust for the benefit of Borrower and deposited in an institution, the deposits or accounts of which are insured or guaranteed by a federal or state agency. WELD COUNTY HOUSING AUTHORITY shall apply the Funds to pay said taxes, assessments and insurance premiums. WELD COUNTY HOUSING AUTHORITY may not charge for so holding and applying the Funds, analyzing said account or verifying and compiling said assessments and bills. WELD COUNTY HOUSING AUTHORITY shall not be required to pay Borrower any interest or earnings on the Funds. WELD COUNTY HOUSING AUTHORITY shall give to Borrower, without charge, an annual accounting of the Funds showing credits and debits to the Funds and the purpose for which each debit to the Funds was made. The Funds are pledged as additional security for the sums secured by this Deed of Trust. If the amount of the Funds held by WELD COUNTY HOUSING AUTHORITY shall not be sufficient to pay taxes, assessments and insurance premiums as they fall due, Borrower shall pay to WELD COUNTY HOUSING AUTHORITY any amount necessary to make up the deficiency within 30 days from the date notice is given in accordance with § 16 (Notice) by WELD COUNTY HOUSING AUTHORITY to Borrower requesting payment thereof. Provided however, if the loan secured by this Deed of Trust is subject to RESPA or other laws regulating Escrow Accounts, such deficiency, surplus or any other required adjustment shall be paid, credited or adjusted in compliance with such applicable laws. Neighborhood Stabilization Program-City of Fort Lupton,Weld County Policies and Procedures Page 51 Upon payment in full of all sums secured by this Deed of Trust, WELD COUNTY HOUSING AUTHORITY shall simultaneously refund to Borrower any Funds held by WELD COUNTY HOUSING AUTHORITY. If under § 18 (Acceleration; Foreclosure; Other Remedies) the Property is sold or the Property is otherwise acquired by WELD COUNTY HOUSING AUTHORITY, WELD COUNTY HOUSING AUTHORITY shall apply, no later than immediately prior to the sale of the Property or its acquisition by WELD COUNTY HOUSING AUTHORITY, whichever occurs first, any Funds held by WELD COUNTY HOUSING AUTHORITY at the time of application as a credit against the sums secured by this Deed of Trust. 24. Transfer of the Property; Assumption. The following events shall be referred to herein as a "Transfer": (i) a transfer or conveyance of title (or any portion thereof, legal or equitable) of the Property (or any part thereof or interest therein); (ii) the execution of a contract or agreement creating a right to title (or any portion thereof, legal or equitable) in the Property (or any part thereof or interest therein); (iii) or an agreement granting a possessory right in the Property (or any portion thereof), in excess of 3 years; (iv) a sale or transfer of, or the execution of a contract or agreement creating a right to acquire or receive, more than fifty percent (50%) of the controlling interest or more than fifty percent (50%) of the beneficial interest in Borrower and (v) the reorganization, liquidation or dissolution of Borrower. Not to be included as a Transfer are (x) the creation of a lien or encumbrance subordinate to this Deed of Trust; (y) the creation of a purchase money security interest for household appliances; or (z) a transfer by devise, descent or by operation of the law upon the death of a joint tenant. At the election of WELD COUNTY HOUSING AUTHORITY, in the event of each and every Transfer: 24.1. All sums secured by this Deed of Trust shall become immediately due and payable (Acceleration). 24.2. If a Transfer occurs and should WELD COUNTY HOUSING AUTHORITY not exercise WELD COUNTY HOUSING AUTHORITY's option pursuant to this §24 to Accelerate, Transferee shall be deemed to have assumed all of the obligations of Borrower under this Deed of Trust including all sums secured hereby whether or not the instrument evidencing such conveyance, contract or grant expressly so provides. This covenant shall run with the Property and remain in full force and effect until said sums are paid in full. WELD COUNTY HOUSING AUTHORITY may without notice to Borrower deal with Transferee in the same manner as with Borrower with reference to said sums including the payment or credit to Transferee of undisbursed reserve Funds on payment in full of said sums, without in any way altering or discharging Borrower's liability hereunder for the obligations hereby secured. 24.3. Should WELD COUNTY HOUSING AUTHORITY not elect to Accelerate upon the occurrence of such Transfer then, subject to § 24.2 above, the mere fact of a lapse of time or the acceptance of payment subsequent to any of such events, whether or not WELD COUNTY HOUSING AUTHORITY had actual or constructive notice of such Transfer, shall not be deemed a waiver of WELD COUNTY HOUSING AUTHORITY's right to make such election nor shall WELD COUNTY HOUSING AUTHORITY be estopped therefrom by virtue thereof. The issuance on behalf of WELD COUNTY HOUSING AUTHORITY of a routine statement showing the status of the loan, whether or not WELD COUNTY HOUSING AUTHORITY had actual or constructive notice of such Transfer, shall not be a waiver or estoppel of WELD COUNTY HOUSING AUTHORITY's said rights. 25. Borrower's Copy. Borrower acknowledges receipt of a copy of the Note and this Deed of Trust. EXECUTED BY BORROWER. {Signature} Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 52 {Printed} {see next page for Notary} State of Colorado ) ss County of Weld The foregoing instrument was acknowledged before me this day of , 20 , by Witness my hand and official seal. My commission expires: Notary Public State of Colorado ) ss County of Weld The foregoing instrument was acknowledged before me this day of , 20_, by Witness my hand and official seal. My commission expires: Notary Public Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 53 HOMEBUYER AFFORDABILITY AGREEMENT Neighborhood Stabilization Program EXHIBIT A TO PROMISSORY NOTE AND DEED OF TRUST Parties to the Agreement: The Weld County Housing Authority as agent for Weld County, per Intergovernmental Agreement dated June 1, 2011 (Neighborhood Stabilization Program 3, hereafter NSP3) NSP property applicant: Co-applicant: Whose address shall be: Date of Agreement: The above noted buyer(s) are purchasing a home that was acquired and rehabilitated(or reconstructed) with funds provided by the U. S.Department of Housing and Urban Development for the Neighborhood Stabilization Program I or Neighborhood Stabilization Program III. Purchasing one of the NSP properties carries with it certain requirements, as set forth in the NSP program regulations.Failure to comply with the requirements holds consequences to the homebuyer that may cause financial issues for the homebuyer. It is thus imperative that the homebuyer(s) fully understand their obligations under this program, and will so signify that the following statements have been explained satisfactorily and that they are understood by initialing each box preceding the statements. Anyone may request a full copy of CITY OF FORT LUPTON's Policy and Procedures with regard to Affordability and Loan Terms. DO NOT ENTER INTO THIS AGREEMENT OR INTO A CONTRACT TO PURCHASE A NSP PROPERTY IF YOU DO NOT UNDERSTAND WHAT YOUR OBLIGATIONS ARE! THIS FORM MAY ONLY BE DISCUSSED WITH A LICENSED MORTGAGE LOAN ORIGINATOR. Subsidies Homebuyers of properties purchased with funding from either the NSP1 or NSP3 will be provided with subsidies to ensure initial property affordability and to maintain long-term affordability, as required under program regulations. NSP1 and NSP3 are programs funded by the U. S. Department of Housing and Urban Development. Two types of subsidies are being provided and are further described below: Development subsidy and direct subsidy. El O Development subsidy-The property noted above, which is being purchased by the buyer (and co-buyer, as applicable), has a development subsidy of$ provided.This subsidy was calculated by total development costs in the property minus the appraised value, as noted below: Total Development Cost $ Minus Appraised Value - Development Subsidy $ The development subsidy is forgiven. The homebuyer(s) are not responsible for repayment of this subsidy. ❑ El Direct subsidy-Every buyer is provided with funds to pay for closing costs associated with the purchase of a NSP1 or NSP3 property up to a maximum assistance of$7,000.00.The address of the property specific to this agreement is noted above.This subsidy is provided as a loan,the terms of which are set forth below. This direct subsidy establishes an affordability period, in this case five (5)years, starting on the date of closing. Long-Term Affordability Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 54 NSP imposes regulations that are designed to ensure assisted properties remain affordable to income- eligible occupants for a proscribed period of time. Regulation further provides for NSP grantees to use the HOME Investment Partnership Program(HOME)as the minimal affordability standard,which allows for either a resale or recapture provision (HOME -24 CFR 92.252(a), (c), (e), and(f) and 92.254). ❑ ❑ The length of the NSP affordability period is based on the amount of NSP-funded direct subsidy to the homebuyer(s), as follows: Per Unit NSP Direct Assistance Minimum Affordability Period Under$15,000 5 years $15,000-$40,000 10 years Over$40,000 15 years New construction* 20 years Multi-family 30 years *State of Colorado requirements ❑ ❑ The period of affordability begins the day of closing and continues a full five years past that date. List/Sales Price ❑ 0 The sales price was established as the lesser of(1)the total cost of development OR(2)the appraised value(by NSP regulations.) Carrying costs (such as utilities, lawn care, and snow removal) are not a part of the total development cost. Primary Residency Requirement ❑ ❑ The property must remain owner-occupied for the full period of affordability. The homeowner will be notified by WELD COUNTY HOUSING AUTHORITY when the period of affordability expires. After that time,there are no further NSP restrictions on the property. ❑ ❑ The homeowner(s) must certify annually that they are an owner-occupant of the NSP property purchased. Failure to provide annual certification is to default on the loan and funds will be subject to repayment. Recapture/Repayment Provisions WELD COUNTY HOUSING AUTHORITY has initiated policies and procedures to ensure NSP regulations are met. To ensure affordability regulations are met, WELD COUNTY HOUSING AUTHORITY will recapture the direct subsidy loan funds in the units, as noted below: ❑ 0 If the homeowner(s)misrepresents any facts in this transaction or fails to occupy the property during the NSP period of affordability(including not maintaining it as the primary residence of the buyer, renting/leasing the property to another party(ies),transferring the property by other than sale, etc)or if they fail or refuse to provide an annual occupancy certification, the homeowner(s)is in non-compliance and must return to compliance by either moving back into the property or sale of the property. Failure of the homeowner(s)to comply with the requirements noted causes the loan to become due and payable immediately, so that WELD COUNTY HOUSING AUTHORITY may recapture the funds provided as a loan subject to the terms of the Promissory Note and Deed of Trust. Sale of this property during the period of affordability triggers repayment of the direct NSP subsidy loan received by the homeowner(s). In the event of sale,the following provisions apply: ❑ ❑ If there are net proceeds greater than the remaining loan(direct subsidy), WELD COUNTY HOUSING AUTHORITY will first recapture the remaining, unforgiven portion. Any remaining proceeds belong to the homeowner entirely and are considered to be the fair return on the homeowner's investment. Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 55 ❑ ❑ If a sale results in fewer proceeds available than are required to meet the demands of all liens and owner investments, the amount to be recaptured will be based on the net proceeds available from the sale,rather than the entire remaining amount of direct subsidy.WELD COUNTY HOUSING AUTHORITY will recapture any amount available from net proceeds up to the amount of the remaining loan and that amount will be considered full payment of obligations under the affordability/recapture agreement for both the homebuyer and WELD COUNTY HOUSING AUTHORITY. In this case,fair return to the homeowner is nothing, due to net proceeds being insufficient to satisfy the recapture fully. 0 0 If there are no net proceeds from the sale, repayment will not be required and the affordability period will be considered satisfied for both the homeowner and WELD COUNTY HOUSING AUTHORITY. Again, "fair return" will be nothing. ❑ ❑ In the case of a short sale, WELD COUNTY HOUSING AUTHORITY has the option of whether or not to approve the short sale. Recapture will be based on net proceeds only, and follow the same provisions set forth above. Any amount(or no amount, if applicable)recaptured will be considered full payment against the affordability/recapture agreement for both the homeowner and WELD COUNTY HOUSING AUTHORITY. ❑ ❑ In the case of foreclosure, WELD COUNTY HOUSING AUTHORITY will contact the homeowner(s) and provide information on counseling options and other guidance, as available. Recapture, in the case of foreclosure, is based on net proceeds alone. If there are no net proceeds, the affordability restriction is terminated and there is no further obligation to either the homeowner or WELD COUNTY HOUSING AUTHORITY. ❑ 0 "Net proceeds" are defined as the sales price minus superior, non-HOME debt minus closing costs. O ❑ A sale(including short sale) or foreclosure ends all affordability and owner-occupancy restrictions. Loan terms ❑ 0 The NSP assistance is provided as a loan in an amount equal to pay for the closing costs incurred in the purchase of the property noted above. The buyer may not accept less than the full amount to cover closing costs, up to a maximum of$7,000.00. ❑ ❑ The full term of the WELD COUNTY HOUSING AUTHORITY loan is the period of affordability, as defined above. If all requirements under this agreement are met in full(including that the property remain owner-occupied for the period of affordability),the loan is forgivable at 1/60 per month beginning the first full month following the date of closing and continuing through the affordability period. The loan is interest free. ❑ ❑ No payments will be accepted against the loan(no prepayment allowed). ❑ ❑ This Agreement and a Deed of Trust will be recorded against the property.The buyer(s)will also sign a Promissory Note.These instruments secure WELD COUNTY HOUSING AUTHORITY's interest in the property. ❑ 0 The WELD COUNTY HOUSING AUTHORITY forgivable direct subsidy loan will not allow for subordination to refinancing of the 1st Mortgage or the addition of any home equity loan.WELD COUNTY HOUSING AUTHORITY will accept no lower than third place in the tier of mortgages against the property. ❑ 0 The property may be sold to any willing buyer(no income restrictions) at any sales price the market will bear(need not remain "affordable"), subject to the recapture provisions earlier noted. ❑ ❑ The homeowner(s)is never required to repay more than the original amount of the direct subsidy loan, nor more than the net sales proceeds. WELD COUNTY HOUSING AUTHORITY's right to legal remedy Neighborhood Stabilization Program—City of Fort Lupton,Weld County Policies and Procedures Page 56 ❑ 0 In any event that the homeowner does not satisfy the full terms of affordability and recapture or misrepresents any material fact associated with this transaction,Weld County,the Weld County Housing Authority,and CITY OF FORT LUPTON reserve the right to pursue any remedy allowable under HUD regulations and the law for full payment by any legal means necessary. Payment of legal or any other fees will be the responsibility of the homeowner.Due diligence with regard to collection will include: • Annual reminders mailed to homeowners,thus trying to avoid a repayment situation. • Allowing for a lease term to expire and continuing with the affordability after expiration(in the case where a home has been rented and a tenant has a lease).The affordability period will thus be extended past five years by the length of any lease. • Setting up a payment schedule for repayment of the unforgiven portion of the loan with a term not to exceed the original term of the forgivable loan. • Turning over the file to WELD COUNTY HOUSING AUTHORITY's attorney for collection by whatever means allowable under the law. Other information for applicant O 0 The house being purchased has gone through a Housing Quality Standards inspection,either by a State of Colorado,Department of Local Affairs,Division of Housing staff member,or by a WELD COUNTY HOUSING AUTHORITY Rehabilitation Specialist.This document may be reviewed prior to the applicant submitting an offer upon request. O 0 The contractor completing the rehabilitation(or reconstruction)of the NSP property to be purchased provides a one-year warranty on any work completed by the contractor,beginning on the date of closing.All questions on warranties should be done through CITY OF FORT LUPTON staff. ❑ 0 All properties constructed prior to 1978 have had lead paint mitigation and clearance.Additional mitigation and clearance may have been completed for the following hazards: Methamphetamine,asbestos,mold. CITY OF FORT LUPTON will provide additional information to the listing Realtor.Information may also be requested by contacting a CITY OF FORT LUPTON Rehabilitation Specialist. ❑ 0 CITY OF FORT LUPTON adheres to all Fair Housing and Fair Lending laws, and will not discriminate against any protected class. I have read and understand the contents of this agreement.All questions I had were clarified at the time of signature. Homebuyer: Date: Co-buyer: Date: As the program administrator, all items above have been discussed with the noted applicant/homebuyer and all questions were answered. Weld County Housing Authority Staff.: Date: Neighborhood Stabilization Program-City of Fort Lupton,Weld County Policies and Procedures Page 57 Hello