Scattered Site Housing Program
Table of Contents
GUIDELINES
Introduction...... 6
National Objectives...... 6
Eligible Recipeints for 2012
Distribution of Funds to the Lead Entity
Option to Opt Out of Funding Cycle
Option to Opt Out of SSH Program
Requirement to Design Program Using a Public Process
Award Amounts and Administration Costs
Grant Period
Matching Funds Requirement
Eligble Properties for Rehabilitation
Note and Deed of Trust Requirements (Bulletin 10-9)
Requirement of Beneficiaries and Alternates List in Application
Use of NC Licensed Professionals
Grant Limitations and Performance Expectations
Housing Distribution Plan
Housing Selection Committee and Minutes
Scattered Site Housing Financial Design Model
Local Option for Emergency Repairs
Lead-Based Paint Requirements
CI Lead Based Paint Requirements
Performance Measures
Clarification of Program Activity Terms (Bulletin 10-2)
Local Government Roles and Responsibilities
Use of an Experienced CDBG Administrator
Program Amendments, Budget Amendments and Budget Revisions
Evaluation Criteria and Threshold Requirements
Public Hearings
Compliance Requirements
Scattered Site Housing Program Contact
Application Process and Submission Requirements
Citizen Participation Plan (Sample Template)
Sample Resolution
APPLICATION
Scattered Site Housing APPLICATION CHECKLIST
Application Submission Requirements and Process Adherence
Required Attachments
Application Summary for Scattered Site Housing
Public Information for Scattered Site Housing
Public Information - continued
Federal Requirements and Certifications
Disclosure Report
Disclosure Report Instructions
State CDBG Program Regulations
Disclosure of Civil Rights Complaints/Lawsuits
Local Government Participation Certification
County Certification as Lead Agency
Municipality Certification
Certifications Regarding Debarment, Suspension and Other Responsibility Matters
Instructions for Debarment Certifications
Community Development Plan
Conflict of Interest Checklist
Housing Distribution Plan
Activities Implementation Schedule -Sample
Activities Implementation Schedule
Project Budget for C-1 Activities
Local Option Project Narrative
Project Budget for L-1 Activities
Activity Numbers and Codes
Activity Code Definitions
HUD IDIS: Accomplishments & Beneficiaries Form
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North Carolina CDBG Scattered Site Housing Program
Introduction
The Community Development Block Grant (CDBG) Program is administered by the North Carolina Department of Commerce, Community Investment (CI). The CDBG Program provides grants to non-entitlement local governments for projects that enhance the viability of communities by providing decent housing and suitable living environments and by expanding economic opportunities, principally for persons of low- and moderate-income. All programs developed using CDBG funds will promote the goals of the North Carolina Consolidated Plan. North Carolina expects to receive approximately $42,500,000 in CDBG funds for 2012. Of this amount, approximately $7.0 million will be made available for the Scattered Site Housing (SSH) Program.
The Scattered Site Housing (SSH) Program makes CDBGfunds available through non-competitive grants to each non-entitlement county every three years throughout North Carolina. The primary objective of the SSH program is for local governments to address the most critical housing needs of very low-income households by improving the housing conditions of very low-income households with incomes at or below 50% of area median income.
National Objectives
Since the SSH Program uses Community Development Block Grant (CDBG) funds, all project activities must meet at least one of three national objectives in order to be eligible. The three national objectives in the CDBG program are: (1) benefiting low-and-moderate income (LMI) persons; (2) preventing or eliminatingslums or blight; and (3) meeting other community development needs having a particular urgency because of existing conditions pose a serious and immediate threat to the health and welfare of the community, and other financial resources are not available to meet the need.
The SSHProgram activities will primarily focus on the LMI national objective. Benefit to LMI persons may be either area-wide or direct benefit. SSH activities must provide direct benefit whichis those activities that actually serve certain persons (e.g., housing rehabilitation).
Eligible Recipeints for 2012
In 2012, eligible recipients include31 counties and their interested non-entitlement counties:
Anson, Avery, Brunswick, Caldwell, Carteret, Catawba, Craven, Davidson, Duplin, Edgecombe, Forsyth, Graham, Granville, Greene, Hoke, Iredell, Jackson, Lenoir, Lincoln, Moore, Pamlico, Perquimans, Pitt, Randolph, Rutherford, Stanly, Tyrrell, Union, Watauga, Wilson, and Yadkin.
Distribution of Funds to the Lead Entity
The eligible county is thelead entity to receive funds and is required to work with all interested non-entitlement municipalities within the county. The county and interested municipalities are to determine how SSH funds are to be distributed within the county.
Option to Opt Out of Funding Cycle
Any county in the 2012 funding cycle may notify CI in writing if it wishes to not submit an application this program cycle. The letter must be on the county’s letterhead and signed by the Chief Elected Official.
Option to Opt Out of SSH Program
Additionally, if the county is not interested in participating in the SSH Program, they are to provide written notification to the other municipalities within their county of their intention. A non-entitlement municipality within the county can become the lead entity and receive funds. In becoming the applicant of record, the municipality will be responsible for implementation countywide.
Requirement to Design Program Using a Public Process
SSH grants will be available every three years to participating counties and their interested municipalities. Funding will be subject to successful performance in CDBG programs, completion of prior projects, and funding availability. The county, as the lead entity, must include as “full and active” partners all its municipalities interested in participating in the program. “Full and active” partner means the municipality is a member of the beneficiary selection committee and is involved in the planning and development of the funding distribution plan.
CI requires the lead entity and interested non-entitlement municipalities to complete a public process in designing the SSH Program. At a minimum, each local government is to adopt the SSH Program to be implemented in the county. If the local government is not participating in the program, a formal action by the governing body needs to be taken.
Award Amounts and Administration Costs
The maximum grant amount is approximately $225,000 per grantee including CDBG funded administration. The maximum administration amount is up to 10% of the total CDBG request of which $3,500 may be used for planning. The pre-award costs are also subject to following proper procurement regulations at 24 CFR 85.36. For eligible pre-award and administration costs, seeOMB Circular A-87.
Grant Period
The grant period for SSH is 30 months.
Matching Funds Requirement
SSH does not have a matching fund requirement.
Eligble Properties for Rehabilitation
The SSH Program is a rehabilitation program targeted towards very low-income owner occupied households; therefore, all activities must benefit persons with incomes at or below 50% of the area median income. Owner occupied units that are designated as real property whether stick built, manufactured after 1978 or modular housing may be rehabilitated in the Scattered Site Housing Program.
Note: Manufactured homes rehabilitated with CDBG funds must have been converted into real property (according to G.S. 105-273 paragraph 13) that is owned and occupied by the homeowner prior to selection. Although rehabilitation is the primary activity for the SSH Program, if the county determines that rehabilitation of the property is not feasible, then clearance and relocation is an option.
SSH Program can have two components to the project funding. The first component is C-1 which focuses on the core project activities. The other is L-1 also referred to as a local option project. Only L-1 funds can be used for urgent or emergency repairs.
Substantial rehabilitation projects are ones with rehabilitation costs above $40,000 per unit or $38 per square foot which would include the Lead Based Paint treatment costs and any other additional funds. Grantees are required to submit such projects to CI for prior approval.
Water and Sewer Connections: The connection of residences to public water or sewer lines is considered a rehabilitation activity. Such costs must be included on the rehabilitation line of the project budget.
Note and Deed of Trust Requirements (Bulletin 10-9)
PerBulletin 10-9, all CDBG housing rehabilitation, reconstruction, and relocation loans must be secured with a Note and Deed of Trust along with the completion of a professional title search prior to any work commencing on the unit. The Note and Deed of Trust must be signed by the owner(s) prior to or at same time as the rehabilitation contract is signedby the homeowner, contractor and grantee. Rehabilitation of the unit may begin on or after the date the Note and Deed of Trust is signed by the homeowner, contractor and grantee. The Deed of Trust must have recapture provisions on rehabilitation activities. Urgent and emergency repair units are not required to have a Note and Deed of Trust unless the repair costs paid for with CDBG funds exceeds $5,000.
Additionally, the granteeis responsible for ensuring that the Note and Deed of Trust is filed within five (5) business days of the date the Note and Deed of Trust is signed by the homeowner(s), contractor and grantee, and recorded with the Register of Deeds within sixty (60) calendar days of the filing date. In the event the Note and Deed of Trust is not recorded with the Register of Deeds within sixty (60) calendar days of the date the Note and Deed of Trust is filed, the grant funds will be frozen without further notice and the expended and encumbered funds for that specific dwelling may be consider a disallowed cost.
Requirement of Beneficiaries and Alternates List in Application
As of 2012, applicants are not required to include a list of all the units to be treated under the SSH grant with the application. After selection of beneficiaries, however, all must be qualified prior to and all title searches completed prior to starting any work on applicant’s house.
Grantee must complete an Income and Need Survey and verify that beneficiaries are income eligible with applicable documentation depending upon type of income received. In addition,the age of documentation should be no more than one year from the date the Chief Elected Official signed the application. CI staff will review this information during program monitoring.
Use of NC Licensed Professionals
While not mandatory, CIstrongly recommends the use of North Carolina licensed professionals on all SSH projects. This includes housing inspectors, electricians, HVAC installers and repairers, plumbers, and general contractors.
Grant Limitations and Performance Expectations
Local governments receiving 2012SSH funds arenot subject to the $1.25 million CDBG cap. However, previousSSHgrant progress is considered during the project review process.
Progress of the SSH 2012 grant will be tracked according to the performance based contract. Projects that are 100% completed at the 24-month period may be eligible to receive additional funds subject to funding availability.
Housing Distribution Plan
The Housing Distribution Plan is the major component in the application. The plan must detail how the lead local government and the interested municipalities will distribute Scattered Site Housing funds. All items are to be answered. The responses to these items constitutes the plan that will govern the SSH Program for the lead entity and participating municipalities.
Housing Selection Committee and Minutes
Minutes from each Selection Committee meeting must be recorded and maintained as part of the selection process. This should be incorporated as part of the Selection Committee By-Laws maintained by the local government. Additionally, any changes to the Committee’s approved beneficiaries and submitted as part of this application, require a formal decision to be reflected in the Selection Committee’s minutes. Applicants should review the Housing Selection Committee Guidance at for additional details.
Scattered Site Housing Financial Design Model
Applicants that use CDBG funds for housing rehabilitation must adopt and follow a written policy that includes a financial design. The financial design must be submitted for review by CI and available for monitoring. Only owner occupied unitsmay be rehabilitated or relocated in the SSH program. The CDBG financialassistance must be in the form of a loan, not a grant.
CDBG loans may be deferred, deferred forgivable, or amortized with low interest. A deferred loan is repaid when the house is sold or the recipient no longer occupies the home such as going into a nursing home or death during the recapture period. A deferred forgivable loan is proportionally forgiven over an applicable term of recapture. An amortized loan is repaid monthly during the term of the loan.
By signing the “State CDBG Program Regulations”, the applicant’s authorized official agrees that the applicant will adopt a financial design that meets the following minimum requirements:
- Low -income property owners that also occupy the house to be rehabilitated are not required but maycontribute to the cost of rehabilitation for the life of the grant.
- Grantees must review existing loan(s) on the property to determine whether or not the CDBG loan in conjunction with the existing loan(s) will not create a situation that causes the loans to equal or exceed the value of the unit. In instances where this occurs, the grantee must inform the loan recipient of the circumstances in writing.
- Programs, which propose amortized loans, should describe terms and interest rates for the loans. Terms should be selected that enable low and moderate-income owners to afford the monthly payments. Programs proposing deferred forgivable loans that become payable at the time the property is sold or the recipient owner no longer occupies the home must ensure that the loan recipient clearlyunderstands the terms of this type of loan.
- As the level of CDBG assistance increases, the recapture period must lengthen according to the following table:
CDBG AssistanceRecapture Period
Less than $12,0005 years
$12,001-16,0006 years
$16,001-$20,0007 years
$20,001 or more8 years
- After the rehabilitation, if other non-CDBG financial assistance for rehabilitation is obtained prior to the expiration of the CDBG recapture period or CDBG repayment period, the CDBG loan may be subordinated to the new rehabilitation loan.
- CDBG loans, regardless of the type of loan, may not be subordinated to any other type of loanother than a first mortgage that existed prior to the rehabilitation. All CDBG loans must be secured with a Note and Deed of Trust. The Deed of Trust must be filed with the Register of Deeds prior to or simultaneously with signing a contract for rehabilitation.
- A Notice of the Rightto Cancel and a Truth-in-Lending Statement must accompany every Deed of Trust and be provided to each owner at closing.
Local Option for Emergency Repairs
Applicants can use up to 10% (i.e., $22,500) of the total $225,000 grant for an urgent or emergency repair local option project. A local option project must meet the following criteria:
- Houses must be occupied by homeowners with incomes at or below 50% of area median income.
- Houses must be structures that can be rehabilitated.
- No more than $5,000of CDBG funds per house can be spent on emergency repairs.
- There must be a written policy and a process for selecting the homeowners, which must be attached to the application selected by the SSH Committee.
The applicant may design their policy based on other criteria as long as it does not conflict with the required criteria listed above. The L-1 project may target housing systems needing repair such as a roof, heating system, electrical, etc. Other potential criteria an applicant may want to consider include the following:
- A house may be eligible for scattered site rehabilitation but is on a waiting list and there are not sufficient funds in the current grant to undertake the rehabilitation; an emergency repair may prevent further deterioration of the structure.
- An emergency repair such as a new roof that will prevent further deterioration to the housing unit.
- Accessibility modifications such as wheel chair ramps, doorways and bathrooms.
Lead-Based Paint Requirements
Lead-Based Paint Regulations are found at 24 CFR Part 35 and N.C. General Statute §130A-453.01-453.11 – Lead-Based Paint Hazard Management Program. All CDBG grantees awarded funds to rehabilitate any houses constructed prior to 1978 are required to follow the regulations. Lead-based paint required activities depend on the lower per unit cost of either (1) the amount of rehabilitation “hard costs” per unit or (2) the amount of federal assistance per unit when there are other federal funds in the unit. “Hard costs” do not include such costs as administrative costs, relocation costs, environmental reviews, acquisition of the property, or the costs of lead hazard evaluation and reduction.
CILead Based Paint Requirements
- All units must have a risk assessment and paint inspection by a certified risk assessor;
- All units must be cleared by a certified inspector or risk assessor who must be a third party entity;
- Local governments must use contractors trained in Safe Work Practices;
- Local governments that undertake temporary relocation must develop, adopt and follow anOptional Temporary Relocation Policy.
- It is our policy when lead based paint is identified in a unit being rehabilitated, the lead based paint be abated whenever possible. Cost for abatement may be charged to the rehabilitation unit.
- Homeowners and occupants, when relocated, must be moved to a lead safe environment.
Performance Measures
The Government Performance and Results Act of 1993 (GPRA) mandates that federal programs improve their effectiveness and public accountability by focusing on results. The U.S. Department of Housing and Urban Development (HUD) has developed the CPD Performance Measurements System for recipients of HUD funds to use to fulfill the requirements of the Act. The Scattered Site Housing category will use the following measures for all scattered site housing activities except administration, which has no performance measures.