2015-2016 HOME GRANTEE WORKSHOP HOMEOWNER REHABILITATION PROJECTS Community Programs Division Tennessee Housing Development Agency June 21, 2016

Congratulations!!!

FY2015 – 2016 Application Round Rural Matrix: $7.8M available for program activities $14.2M in applications for program activities from 37 communities $7.6M awarded to 19 communities to improve 214 residences Urban Matrix $6M available for program activities $4.3M in applications for program activities from 11 communities $4.3M awarded to 11 communities for program activities

Now the real work begins…. The HOME Program is a performance contract…. THDA has a contract with HUD to perform…. Each local government has a contract with THDA to perform…. …those recipients that meet the terms of the THDA HOME program will receive funds to cover eligible costs that help to improve the housing stability of residents in your community.

Role of Local Government Ultimate responsibility for the grant lies with the Grantee A consultant is a grant management resource, not a substitute for the Grantee’s hands-on involvement with the project and full responsibility for oversight of the grant implementation Involving local officials, especially local code officials, may minimize problems if disputes occur

Role of Local Government Approves Policies and Procedures Hosts the public meeting Oversees the procurement process Issues Building Permits Authorizes Pay Requests If applicable, provides code inspections Oversees and monitors program implementation in accordance with program requirements Resolves/mediates disputes Ensures fairness and quality of work

Your Goal and Our Goal….

And more importantly….

Written Agreements Three year contracts : July 1, 2016 through June 30, 2019 Expenses or commitments incurred prior to July 1, 2016 will not be reimbursed Only 60 days after June 30, 2018 to submit final draws City or County Mayor signs BOTH copies and returns BOTH to THDA with the Start-up Forms. Written Agreements are due at THDA by Friday, July 15, 2016

Attachment A Provides detail of the activities funded by the HOME grant and other requirements Other requirements based on the application, i.e. participant contributions, submission of more recent audit Pay special attention to additional conditions

Attachment B Detailed implementation plan for carrying out HOME project GENERAL EXPECTATIONS: All Tier 1 environmental reviews will be completed by October 31, 2016 First units out to bid by April 2017 THDA expects that Administrators will balance implementation of their funded programs – both these and programs currently being administered. Administrators are expected to take the necessary steps to enhance capacity as necessary to undertake all activities.

Attachments C, D, E, and F Attachment C - HOME Project Budget Shows uses and sources of HOME and other funding No Attachment D – Not Applicable to non-CHDO contracts Attachment E - Federal Award Identification Worksheet No Attachment F

Attachment G & H Attachment G – Notice of Audit Report Attachment H – Parent Child Information Both documents must be completed and returned with signed agreement!

Start-up Forms Return these forms to THDA: Original ACH (Automated Clearing House Credits) Form completed and signed by bank official Attach an original voided CHECK W-9 – Request for Taxpayer Identification Number and Certification Must be Rev. 2014 Authorized Signature Form Building Codes Compliance Form Return to THDA with Written Agreement by July 15, 2016 Or As a Packet of Forms by July 22, 2016 – Do not send individually

Homeowner Rehabilitation

Homeowner Requirements The homeowner must have resided in the property for at least 1 year prior to receiving HOME-assistance. The property must be the homeowner’s principal residence. The household must qualify as low-income – 80% of AMI or less Income is determined at time of application Income must be re-verified if income verification at initial application was done more than 6 months prior to entering into rehab contract

Ownership Interest §92.254(c) Fee simple title to the property; OR 99-year leasehold; OR Inherited property with multiple owners not all residing in the housing; OR Life estate AND No restrictions or encumbrances that would unduly restrict the good and marketable nature of the ownership interest

Ownership Interest §92.254(c) Inherited Property with Multiple Owners The owner-occupant must be low income; Occupy the house as his or her principal residence; and Pays all the costs associated with ownership and maintenance of the housing. Note: All owners would have to be a party to the deed of trust

Ownership Interest §92.254(c) Life Estate The person with the life estate has the right to live in the housing for the remainder of his or her life and does not pay rent. The person holding the life estate must be low-income; and Occupies the housing as his or her principal residence.

Property Requirements HOME grantee determines eligible property types as part of their policies and procedures: Single Family Dwelling A condominium unit or townhouse The maximum after-rehabilitation value of the property cannot exceed 95% of the area median sales price. The after–rehabilitation value must be established prior to start of rehab work with documentation maintained in the project file.

Owner-Occupied Rehabilitation When rehabilitation work is complete, the entire structure must meet the building code in force for that location or the applicable State adopted edition of the International Code and THDA Design Standards for Rehabilitation

HOME Investment Per Unit For Pre-1978 Housing with No Lead and Units Built in 1978 or After: Must have a Minimum of $1,000 and Maximum of $40,000 for rehabilitation hard costs, excluding soft costs for: Inspection and work write-ups LBP inspections Energy-related inspections

HOME Investment Per Unit For Pre-1978 Housing with Lead : Must have a Minimum of $1,000 and Maximum of $40,000 for rehabilitation hard costs, excluding: Soft Costs for: Inspection and work write-ups LBP inspections and clearance testing Energy-related inspections Cost of LBP remediation

Owner-Occupied Rehabilitation Dilapidated structures which require reconstruction are not eligible for assistance in the 2015 - 2016 HOME Program. Including the replacement of substandard manufactured housing units. The rehabilitation of manufactured housing units is also not eligible in the 2015 - 2016 HOME Programs. Grantee must establish a Walk-Away Policy Where the costs to implement the scope of work required to bring the unit to code exceeds the funds permitted to assist the household to rehabilitate the home.

Eligible Costs Actual Construction Hard Costs To repair housing deficiencies that prohibit the unit from being code compliant To meet THDA Rehabilitation Standards and State adopted International Energy Conservation Code To remove deficiencies of major systems with less than 5 years of useful life To make the unit accessible to an individual with a physical disability

Eligible Costs Soft Costs (Project Delivery Costs) Costs to settle financing Preparation of plans, specs and work write-ups - Costs for work write-ups and inspections are a minimum of $500 and a maximum of $2,500. - Costs for energy audits Costs for lead-based paint risk assessments and clearance testing Costs for temporary relocation/storage Soft costs count towards HOME subsidy limit

Eligible Costs General Property Improvements Costs above required improvements but necessary to put the property in good repair Eligible as long as all required improvements are complete and improvements are reasonable and are not considered luxurious Policies and Procedures must define acceptable level permitted Not to exceed 40% of all other hard costs. May include work: To eliminate inefficient design To improve security lighting To reduce maintenance

Temporary Relocation Expenses HOME funds may pay for moving expenses and temporary living arrangements. Uniform Relocation Assistance (URA) is not applicable to households temporarily, but voluntarily, displaced during homeowner rehabilitation. This benefit must be available to all applicants and included in the Policies and Procedures. Actual receipts for rent or storage charges must be submitted for reimbursement as a project soft cost.

Program Requirements

Income Eligibility HOME funds must only benefit households at or below 80% of area median income as adjusted for household size See 2016 Income Limits applicable for your county www.thda.org -> Business partners -> Grant Administrators -> HOME Program -> Resource Links at the bottom of the page

Income Determination §92.203(2) THDA uses the Section 8 Rental Assistance definition of income in its HOME program Gross annual income anticipated to be received by all persons in the household during the next 12 months. Income includes assets See Chapter One of the HOME Manual for how to determine income

Income Determination §92.203(2) Income must be verified before assistance is provided Must examine 2 months of source documentation for all persons in the household. Documentation of income verification and how the income was calculated must be maintained in the project file Household income must be re-verified if HOME assistance is not provided within 6 months

Income Determination §92.203(2) Acceptable source documents may include: Wage statement for the past 2 months Interest statements Unemployment compensation statements 3rd party verification from employer, bank, etc. Self-certification is an acceptable form of income verification, if no other source(s) are possible

Compliance Period Assistance has a compliance period of five (5) years with a 20% annual forgiveness feature The compliance period is secured by a Grant Note and a recorded Deed of Trust If the homeowner dies during the compliance period and the property is inherited by heirs, the property may be rented without repaying the unforgiven portion of the HOME grant However, if the heirs sell the property, or if the property is sold with monetary gain by any actions of a court to settle outstanding claims or settle the estate, the unforgiven portion of the grant must be repaid to THDA

HOME Investment Per Unit Minimum HOME $ $1,000 $57,234 0-Bedroom $65,611 1-Bedroom Maximum HOME $ $79,782 2-Bedroom $103,212 3-Bedroom $113,295 4-Bedroom+ The combination of rehabilitation hard costs and project soft costs cannot exceed the maximum HOME investment per unit.

Quality Assurance Inspections THDA uses a third party inspector, The Inspection Group (TIG), to perform the quality assurance inspection TIG will perform on-site inspections to: Review the initial work write-up for conformance to THDA Design Standards for Rehabilitation Provide a progress inspection to assess the completion of the work to date Provide a final inspection to ensure compliance with THDA Design Standards for Rehabilitation

Inspection Billing Process $350 charge per inspection – totaling $1,050 per unit. THDA is billed directly by the Quality Assurance Inspector and this amount is deducted from the grantees program dollars on a per unit basis. If an extra inspection is necessary on top of the three required, there will be an additional $350 charge. A $200 charge from TIG to the Grantee will be assessed if: If the inspector arrives but cannot access the unit to perform the inspection OR If TIG arrives for the final inspection and the work is substantially incomplete. Therefore, it is very important to only contact the Quality Assurance Inspector when the Grantee is completely ready for the inspection to be conducted.

Other Federal Requirements

Lead-Based Paint For all units that are pre-1978, all families must receive a copy of LBP-1 (Protect Your Family from Lead in Your Home) The family must sign verifying that they did receive the information HUD designates three categories of rehabilitation based on the level of investment in the unit: Less than $5,000 $5,000 - $25,000 More than $25,000 Follow instructions in HOME Manual based on level of investment in the unit

ENVIRONMENTAL REVIEW The applicability of the Environmental Review requirements is based on the HOME project as a whole, not on the type of the cost paid for with HOME funds. HOME funds cannot be committed to a project prior to the completion of the environmental review and release of funds. The Grantee may not take any choice limiting actions prior to completion of the environmental review.

Levels of Environmental Review Exempt Categorically Excluded not subject to the authorities of the Statutory Checklist Categorically Excluded subject to the authorities of the Statutory Checklist Categorically Excluded activities converted to Exempt Environmental Assessment

Responsibility for the Environmental Review Local government grantees assume full responsibility for the completion of the Environmental Review. Completes the Tier One environmental review. Makes public notices and Request for Release of Funds to THDA Submits copy of the environmental review and published Notice to THDA. After the close of the public comment period and based on a favorable review of any comments received and the documentation provided by the Grantee, THDA issues the Release of Funds.

Unspecified Site or Tiered Strategy Some environmental factors can be considered on a county-wide or city-wide basis while others require a site-specific analysis With the Tiered strategy, these factors that are not site specific are evaluated as part of the Tier One Review. The public notice must include specific language. Once a site address has been determined, the Site Specific Checklist must be reviewed to cover the remaining site specific environmental factors. The Site Specific Checklist and supporting documentation must be submitted to THDA as part of the Project set-up

Flood Plains THDA generally does not permit the rehabilitation of housing located in the 100 year flood plain. In a few instances and with written permission from THDA, houses located in a flood plain may be assisted. The community must be participating in the National Flood Insurance Program and flood insurance must be obtained on the unit.

ER & Written Agreement with Homeowner The Site Specific Environmental Review Process must be completed prior to entering into the written agreement to provide assistance to the homeowner.

Fair Housing and Equal Opportunity FHEO laws are designed to protect individuals and groups against discrimination and to provide equal opportunities in housing, employment and contracting with federal funds. No person shall on the grounds of race, color, religion, sex, familial status, national origin or disability be excluded from participation, denied benefits or subjected to discrimination under any program funded in whole or in part by HOME.

Fair Housing Activities The Grantee must provide each applicant with a copy of Fair Housing: It’s Your Right brochure as part of the application process Maintain documentation in your files that all potential homeowners have received the brochure – Homeowner to acknowledge receipt

Fair Housing Activities The Grantee must take steps outlined in their Policies and Procedures to encourage the application for assistance of those who are least likely to apply for assistance To accomplish, the Grantee may advertise for assistance availability at: Churches Convenience stores Libraries Senior centers Local offices of the TN Department of Human Services

Limited English Proficiency Each Grantee must have policies and procedures to assist non- English speaking applicants Each Grantee must also have a process that notifies LEP persons of language assistance available (i.e. notices, signs) and that is accessible to individuals seeking assistance Grantee staff should be knowledgeable of all procedures and processes

Americans with Disabilities Act (ADA) Title II requires that State and local governments give people with disabilities an equal opportunity to benefit from all of their programs, services, and activities State and local governments must relocate programs or otherwise provide access in older buildings that are inaccessible and communicate effectively with people who have hearing, vision, or speech disabilities Grantees must take steps to promote the availability of HOME assistance at locations that are accessible to individuals with disabilities, including any web sites that are used to publicize the program

Promoting Fair Housing & ADA All program material must include the fair housing and ADA logos:

Conflict of Interest The HOME Conflict of Interest policy applies to any person who is an employee, agent, consultant, elected or appointed official of THDA , a State Recipient (Grantee) receiving HOME funds. No person listed above who exercise or have exercised any function or responsibility with respect to activities assisted with HOME Funds or are in a position to participate in a decision- making process or gain inside information may obtain a financial interest or benefit from any HOME activity or the proceeds of such activity either for themselves or for those who they have business or immediate family ties.

Conflict of Interest Covered familial relationships are limited to immediate family members: Immediate family ties include (whether by blood, marriage or adoption) the spouse (including a step-parent), child (including step-child), sister, brother (including step-brother or step- sister), grandparent, grandchild, and in-laws of a covered person

Appearance of a Conflict of Interest All Grantees must also take steps to avoid the appearance of a conflict of interest. Grantees must notify THDA of the Appearance of any Conflict of Interest before taking any action.

Procurement Any contract over $2,500 must be advertised for bid to insure an open and competitive process Maintain copies of bid advertisements in your files There must be at least 3 valid bids If less than 3 bids are received, the project must be re-bid Grantees may not negotiate with the lowest bidder If the scope of the project changes, all bidders must be given an opportunity to amend their bid

Section 3 All grantees with a contract of over $200,000 must take steps, to the greatest extent feasible, to provide employment and other economic opportunities to low and very low income individuals within the project area Also applies to all contracts and subcontracts over $100,000 A grantee is obligated to direct, to the greatest extent feasible, new hires and contracts to Section 3 businesses and residents. Section 3 applies to the entire project regardless if the project is fully or partially funded with HOME resources.

Section 3 Resident A Section 3 Resident is: A Public Housing Resident A resident of the metropolitan area or non-metro county in which the Section 3 covered assistance is expended and who qualifies as a low or very low income person.

Section 3 Business Concern 51% or More Owned by Section 3 Residents OR 30% of Employed Staff are Section 3 Residents 25% of subcontracts committed to Section 3 Businesses

Section 3 Qualifications A Section 3 Resident must meet the qualifications of the position to be filled A Section 3 Business Concern must have the ability and capacity to perform under the contract

Section 3 Responsibilities Provide a hiring preference to Section 3 Residents Provide an award preference to Section 3 Business Concerns Assist with achieving compliance among contractors

Section 3 Preference Section 3 is race and gender neutral Section 3 is not Minority Business Enterprise (MBE) or Woman Business Enterprise (WBE) Hiring preference is based on: Income (80% or less of AMI) And Location (project area)

Section 3 Responsibility Notify Section 3 residents and business concerns about hiring and contract bids Post job/contract notices at public housing sites Form partnerships with organizations working with low income job seekers Work with local trade unions to identify businesses that qualify as Section 3 business concerns Incorporate Section 3 clause into all contracts. - 24 CFR §135.38

Submitting Requests to THDA

EFT (Electronic File Transfer) Required method of sending documents to THDA: All work write-ups and estimates, pay requests, and ERRs We will send you copies of completed inspections Casey Wilson will set up one account for each organization If you forget or your password expires, contact Casey at cwilson@thda.org. https://edt.thda.org/EFTClient/Account/Login.htm

Requesting HOME Funds Prior to initiating solicitation of applications, THDA must have: Signed Working Agreement Tier One Environmental Review Completed ACH Form (FM-1) with voided check attached W-9 Form – Request for Taxpayer Identification Number and Certification (Rev. 2014) Authorized Signature Form (FM-2) Building Codes Compliance Form (FM-2A) Policies and Procedures Requirements specified in Attachment A Prior to first draw, THDA must have: Tier 2 Environmental Review Completed for Site Specific Address Work write-up completed and approved Initial and Progress Inspections Completed Project Set-up Form (FM-3)

Pay Requests – Interim Draws THDA requires draws to be placed into the Electronic File Transfer (EFT) system! Required documents: Request for Payment Form (FM-4) with two authorized signatures and back-up documentation Contract and Work Write-up Interim Draw (FM-5) certifying percentage of project completion Copies of change orders, if applicable Lead-based paint Risk Assessment, if applicable Copy of completed Quality Assurance progress inspection

Pay Requests – Final Draw Final draw for project funds must include: Request for Payment Form (FM-4) with two authorized signatures Certification of Completion and Final Inspection (FM-7) AND Certificate of Code Compliance issued by local community, if applicable, or by licensed, third party inspector Project Completion Report (FM-8) Recorded copy of Deed of Trust securing HOME investment Copy of completed final Quality Assurance inspection (and progress inspection if no interim draw)

Pay Requests – Administration Submit separately from project draws. Required documents: Request for Payment Form (FM-4) with two authorized signatures Invoice from Program Administrator Administrative funds must be drawn down in proportion to the expenditure of project funds.

Tell Your Community’s Story

Highlight Your Successes Tell the story of your program and the investment of federal resources into your community Take before and after photos of each unit assisted and submit to THDA Telling Your Story – Communications Guide Faces Behind the Funding Questionnaire and Photo Release

HOME Resources

HOME Resources HUD: Bookmark the HUD website: https://www.onecpd.info Sign up for email updates THDA: Bookmark the THDA HOME website: https://thda.org/business-partners/home

HOME Resources On the THDA Web Site: 2015 – 2016 HOME Program Description 2014 HOME Manual THDA Design Standards for Rehabilitation Forms Property Value Limits, Income Limits, Max Per Unit Subsidy Limits Telling Your Story – Communications Guide Faces Behind the Funding Questionnaire and Photo Release

2014 HOME Manual 2014 Manual is posted to the THDA website www.thda.org -> business partners -> grant administrators -> HOME Program -> scroll down to the bottom of the page under “Resource Links” READ the relevant chapters and print for easy reference. NOTE: THDA will be updating the manual over the next 6 months and will be issuing updates that will be effective as directed.

Contacts Community Programs Division – (615) 815-2032 Don Watt, Director, Community Programs Division dwatt@thda.org or (615)815-2032 Craig Stevens, Senior Housing Coordinator cstevens@thda.org or (615) 815-2035 Mia Billingsley, Senior Housing Coordinator – Compliance mbillingsley@thda.org or (615) 815-2033 Dwayne Hicks, Senior Housing Coordinator – Construction dhicks@thda.org or (615) 815-2044 Casey Wilson, Administrative Assistant cwilson@thda.org or (615) 815-xxxx

Remaining Questions