Owner-Occupied Rehabilitation and Reconstruction Program - training (CDBG-DR) [ pdf , 3MB]

Owner-Occupied Rehabilitation and Reconstruction Program - training (CDBG-DR) [ pdf , 3MB] is sponsored by Kentucky Dept. for Local Government. Owner-Occupied Rehabilitation and Reconstruction Program Application (2021 and 2022) [ docx , 165KB]

Owner -Occupied Rehabilitation Program 2 2. Subrecipient Responsibilities 7. Homeowner Responsibilities 10.

Resources Owner -Occupied Rehabilitation This program will assist homeowners with repairs to their storm -damaged homes, support the rehabilitation of older and existing housing stock, and provide safe and decent housing opportunities for residents.

• Total Budget: $17,905,350 • Program processes and requirements: governments will apply to DLG as subrecipients with a preliminary list of eligible the role of the responsible entity to operate an owner - will then apply to the entity implementation partner for participation in the program. All projects will be monitored closeout.

Subrecipient Responsibilities Responsibilities of the subrecipient include but are not limited to the following: Duplication of Benefits Verification Homeowner award calculation Lead -Based Paint Requirements Green Building Requirements Homeowner contracting assistance Compliance with all applicable cross -cutting federal requirements > More detail on subrecipient responsibilities is provided throughout the policy manual.

## Subrecipient Responsibilities The State is committed to reducing barriers for vulnerable populations, homeowners still struggling to recover, and homeowners who have been unable to recover safely.

## Vulnerable Populations As part of the program design to ensure meaningful access to all, sub -recipients are required to: Provide language assistance services that result in timely, accurate, and effective communication at no cost to Limited English Proficiency clients and/or their beneficiaries. Reasonably accommodate persons with Designate a fair housing and equal opportunity coordinator to be the prime liaison with DLG.

Eligibility Low -Mod Housing (LMH): All program assistance and activity delivery costs provided to or on behalf of low - and moderate -income households.

Urgent Need: The program may use the Urgent Need national objective to assist eligible disaster - impacted homeowners with incomes greater than • HUD has identified the following MID areas for the 2021 KY disasters: • Kentucky has decided to expand the HUD -identified MID areas in ZIP codes 41339 and 42101 to include the entire counties of Breathitt and Warren. > Image Source: https://gisgeography.

com/kentucky -county -map/ In addition to HUD’s identified MIDs, Kentucky has identified the following counties as eligible for • Boyd County, Caldwell County, Christian County, Clark County, Clay County, Estill County, Floyd County, Fulton County, Greenup County, Hart County, Hickman County, Jackson County, Johnson County, Knott County, Laurel County, Lawrence County, Lee County, Leslie County, Letcher County, Lincoln County, Logan County, Lyon County, Madison County, Magoffin County, Marion County, Marshall County, Martin County, Morgan County, Muhlenburg County, Ohio County, Owsley County, Perry County, Powell County, Pulaski County, Rockcastle County, and Taylor County • May include a variety of eligible homeowner rehabilitation and reconstruction activities.

Subrecipients are to provide funds necessary to repair, reconstruct, or replace the damaged property as per program guidelines. • Only costs incurred after an award will be eligible for reimbursement.

Reimbursement of pre -award costs is not • Subrecipients are authorized to provide Optional Relocation Assistance to persons displaced by assisted > Optional Relocation Procedures available on the Disaster Website: Kentucky DLG -DRP Grants . • Funds may be provided to address site -specific accessibility needs, infrastructure repairs, site remediation, elevation, and resilience and mitigation measures.

• Properties located in an SFHA must be elevated with the lowest floor, including the basement, at least 2 feet above the 1% annual chance floodplain elevation (base flood elevation). Structures that are elevated will meet federal accessibility standards.

Foreclosed or seized homes Assistance for the rehabilitation or reconstruction of a house, if (1) the combined household income is greater than either 120% of AMI or the national median, (2) the property was located in a floodplain at the time of the disaster, and (3) the property owner did not obtain flood insurance on the damaged property, even when the property owner was not required to obtain and maintain Seasonal, short -term and vacation rental properties Portion of an applicant’s home used exclusively for non - Housing units located where federal assistance is not permitted by federal regulation, including floodways, or within runway clear zones of either a civil of military Recreational Vehicles and camper trailers used as a Houseboats used as a residence Garage, carports, sheds and outbuildings not attached to the main dwelling unit.

Improvements must be physically attached to the house and be permanent in The following activities are ineligible: Award Maximum Awards Subrecipients are eligible to receive an award up to $1,000,000 based on estimated costs. Each rehabilitated or reconstructed home is eligible for up to $200,000 of assistance.

For costs less than $50,000, assistance will be in the form of a grant assistance will be in the form of a > DLG will consider exceptions to the maximum award amounts when necessary and in compliance with federal regulations.

# Application Process Application Process For applications to be eligible Impact vulnerable communities Meet a National Objective Qualify as a CDBG -DR eligible activity Be located in a declared disaster -affect area • Subrecipients must download the CDBG -DR Housing Application located on the website Kentucky DLG - DRP Grants and submit it with • For specific application requirements please refer to Section 4. 3 of the policy manual.

• Once applications have been scored and an award is determined, subrecipients will be notified directly from DLG by a preliminary > Sample Program Application • Subrecipients will act as an agent on behalf of the homeowners to provide services related to this • Once eligibility has been established, homeowner application intake can begin • Information that needs to be included on all homeowner intake forms can be found in Section 4. 7.

1 ## Homeowner Application Intake • Subrecipients are responsible for collecting all documentation pertaining to duplication of benefits (DOB) that will be verified by DLG.

• Homeowners must report all assistance they have been awarded or available to repair/reconstruct their homes from third -party sources such as: Flood and homeowner’s insurance Increased Cost of Compliance (ICC) Federal Emergency Management Assistance (FEMA) Loans from the Small Business Administration (SBA) Any other assistance from other government or private non -profit sources ## Duplication of Benefits (DOB) > The Duplication of Benefits process is described in detail in Chapter 10 of the CDBG -DR subrecipient manual.

# Inspections 1. After award and before construction, a site inspection of the property must be conducted by the Subrecipient to determine the type and cost of work necessary. 2.

After inspection, the work that needs to be completed should be written down. A sample work -write up and cost estimate form are provided with Chapter 6 of the > Sample Work Write -up Form Subrecipients will act as an agent on behalf of the homeowners to provide services 1 An EA will be completed for the Program for the HUD and State MID counties.

2 Environmental Reviews will be conducted for each property that is being evaluated under the Will identify sites with specific environmental issues requiring a site visit or additional agency consultation and will be documented in an Environmental Review Record (ERR).

These reviews must be conducted by the subrecipient in a manner that satisfies the requirements of NEPA and HUD’s NEPA implementing regulations (24 CFR 58) • From the time of application through the completed environmental review, no work should be performed on eligible homes participating in the program. More detail on Environmental Review requirements is provided in Chapter 2 of the Subrecipient Manual.

All subrecipients must meet the Green and Resilient Building Standards: ## Green Building Requirements • For non -substantial rehabilitation: Subrecipients must follow the guidelines specified in the HUD CPD Green Building Retrofit Checklist (11 -2).

• For rehabilitation of substantially damaged properties and reconstruction: The Green and Resilient Building Standard requires that construction assisted with CDBG -DR funds meet an industry - recognized standard which has achieved Reference chapter 11 in the Subrecipient Manual for more information on the standards and the required form (11 -1) to submit to DLG about the selection of your chosen standard.

• All units in a project assisted with CDBG -DR funds must comply with 24 CFR Part 35 (Lead Safe • More information and required forms are provided in Chapter 2 of the Subrecipient Manual. The levels of assistance and applicable requirements are: Level of Assistance Applicable Requirements <$5,000 Paint testing of surfaces to be disturbed must be completed. Paint testing must be conducted by a certified paint inspector or risk assessor.

$5,000 -$25,000 A risk assessment must be performed of the entire unit. A risk assessment must be conducted by a certified risk assessor. >$25,000 A risk assessment must be performed of the entire unit.

A risk assessment must be conducted by a certified risk assessor. Homeowner Responsibilities • The subrecipient is required to develop a scope of work including an estimate for the repair, replacement, and/or mitigation of the housing structure to meet Program requirements. • Ineligible costs include: Luxury or non -standard items Labor time for sweat equity The Program will not allocate funding for payment of any upgrades.

If homeowners elect to modify or deviate from the designs or scope of work they must use their own personal funds to do so. ## Homeowner Grant Determination • All homeowners are required to sign a grant agreement to comply with Program requirements.

• The grant agreement should require the owner to certify Agree to subrogation requirements detailed in the DOB Chapter 10 of the Subrecipient Manual Deed restriction to maintain FEMA flood insurance for life of the property, where applicable.

Declaration of covenants and restrictions • A sample of a Homeowner Grant Agreement can be found on the disaster website: Kentucky DLG - DRP Grants > Sample Homeowner Grant Agreement • Assistance over $50,000 will be provided in the form of a forgivable loan. • The forgivable loan is instituted through the use of a Lien Agreement.

• Each year the owner retains ownership and resides in the home a certain percentage of the loan amount is forgiven as if it were a grant. • Should the property be sold, vacated or its use changed prior to the expiration of the note, the owner owes the subrecipient whatever balance remains on the note. • A Mortgage Agreement and Promissory Note Template can be found on the Disaster website: Kentucky DLG - DRP Grants .

## Homeowner Lien Agreement # Construction • Homeowners are able to hire registered/licensed and insured builders of their choice to perform the reconstruction or • Homeowners are precluded from acting as • The subrecipient will complete a thorough inspection of the property. • The homeowner will use the Work Write -up and Cost Estimate to solicit three quotes from different construction contractors.

Upon selection of contractor, the subrecipient will verify: Costs are reasonable and necessary Contractor is properly licensed Contractor is not on a debarred list or subcontract to entities on a debarred list Contractor has provided a project completion plan detailing work and • The subrecipient will facilitate an agreement between the homeowner and the contractor. • The subrecipient must hold a pre -construction conference.

• Contractors or subcontractors for all rehabilitation and reconstruction triggering Section 3 are required to comply with all regulation > For more detail please refer to the policy manual and Chapter 6 of the Subrecipient Manual. • Contractors must follow all applicable building codes listed in Chapter 6 of the Subrecipient • Once a contract is executed, the subrecipient shall issue a Notice to Proceed.

A sample Notice to Proceed (6 -19) is provided with Chapter 6 of the Subrecipient Manual. • Subrecipients are responsible for monitoring the progress of construction projects. > Sample Notice to Proceed • Payments are to be requested by the subrecipient from DLG and made directly to the • All change orders must: Be requested by the subrecipient and A sample Change Order Request is provided in Chapter 6 of the Subrecipient Manual.

Not exceed 20% of the original contract price • A ten percent retainage shall be withheld until > Sample Change Order Request # Closeout • The contractor must certify completion of work and submit final request for payment.

• Subrecipient must make the final inspection and prepare a written report prior to issuance of • Before making final payment the subrecipient should: Have the contractor sign an affidavit terminating the contract and releasing all liens; Have the contractor provide all warranty documents and subcontractor release of lien waivers prior • If the inspection is satisfactory, the subrecipient can then issue acceptance of work and final > More detail is provided in Chapter 6 of the Subrecipient Manual • Once the final Construction Closeout documentation has been submitted by the contractor, the Work with homeowners to collect all closeout documentation for their file: Collect evidence that the property is covered by flood insurance, if required; Continue to monitor DOB compliance; Hold a public hearing and submit a final report.

> More detail pertaining to Project Closeout can be found in Chapter 14 of the Subrecipient Manual. • Records must be kept to document compliance with program requirements, with federal, state, and local regulations, and to facilitate audit review by HUD and other designated auditors. • All records pertaining to the project must be maintained for 5 years from the date of project closeout.

• Subrecipients must maintain records for each household that received CDBG -DR assistance. All projects beneficiaries must be tracked by income, race and ethnicity as categorized by HUD, as well as by owner -occupied status, female -head of household (occupied by one or more children under the age of 18), elderly household (62 years of age or older), and disabled household.

Records should be maintained on each household related to any repairs, construction, or clean up of the • CDBG -DR records, including program documents, are subject to the Freedom of Information Act > For more detail on Records Management please refer to Chapter 1 of the Subrecipient Manual. 1. Link to policy on DLG website 2.

Link to subrecipient manual on website 3. Link to Action Plan on website Local Government Branch Manager