Assistance is for owner-occupied, low and moderate income households within the five core neighborhoods in the city of Cedar Rapids. Current assessed valuation of land and structure must be below $135,000 in order for the property to qualify for any kind of housing assistance. Only pre-1960 properties are eligible for assistance and the home must be entirely residential in usage, up to and including four dwelling units. Mobile homes are not eligible. The objective is to make the property safe, decent, sanitary, and to bring the property into compliance with:
• City Housing Code requirements
• City Building Code requirements
• Lead Based Paint requirements
• Section 8 Housing Quality Standards
• Secretary of Interior Standards if the property is determined to be historically significant
Improvements more closely perceived as remodeling which will principally add to resale value by providing items of comfort and convenience are not eligible. All proposed activities must be reviewed for compliance with HUD environmental requirements at 24 CFR 58.5.
Ownership and Occupancy
Applicants for rehabilitation assistance must own and occupy the property to be rehabilitated. There must be at least 10% equity in ownership based on the assessed valuation, real estate comparables, and/or purchase price. The household must also have occupied the property for at least one year from the date of purchase.
Property Taxes and Housing Payments
The applicant shall have no outstanding delinquent property taxes, housing payments and homeowners insurance coverage shall be current.
Eligible Work
All chipping and peeling paint must be addressed and is calculated as a soft cost. Repairs, upgrades, components, and equipment for structural, electrical, plumbing, heating, and roofing are eligible. Permanent siding is not eligible except when it is the only feasible and cost effective method of exterior treatment - as determined by the Housing Rehabilitation Staff.
Financial Assistance
Financial assistance is provided for all or part of the rehabilitation cost. The amount of assistance provided is dependent upon need and varies according to a household’s ability to pay. As income increases, the amount of financial assistance decreases.
Median family income is based on the income limits in the Federal Median Family Income Limits table in the appendix. Unless provided otherwise costs are proportional as follows:
|
Median
Family Income |
Assistance |
Household Pays |
|
0% to 50% |
100% |
0% |
|
51% to 70% |
90% |
10% |
|
70% to 80% |
80% |
20% |
To avoid placing a financial burden on the applicant when their pre-rehab monthly housing expense exceeds 35% of their monthly income, assistance will be at 100%. Housing expenses include mortgage or contract payments, insurance, property taxes, special assessments, and utilities that include only gas, electric, and water.
The maximum comprehensive assistance to be provided shall not exceed the lesser amount of $24,999 in hard costs or 100% of the pre-rehab assessed dwelling valuation for homes outside of the 100 year flood plain or 50% of the pre-rehab assessed dwelling valuation for homes within the 100 year flood plain. There is no cap on soft costs. Additional costs may be charged to the homeowner.
Contingency assistance is allowed for unforeseen or urgent situations which may arise after work has started at 10% of initial project costs. The rehabilitation specialist may use his/her discretion on a case by case situation where change orders may exceed 10%.
Property Lien
A property lien shall be recorded on the property for the hard costs of rehabilitation. Change orders will not require lien amendment. The hard cost assistance will be recaptured if the property is:
• Sold or ownership is transferred to another party
• Vacated making it no longer the principal residence of the owner
• Rented for tenant occupancy, except for that allowed when the financial assistance was provided
After ten years, the lien will be forgiven. The recapture schedule of the lien shall be as follows:
|
Year |
Repayment Amount |
|
1 |
100% |
|
2 |
90% |
|
3 |
80% |
|
4 |
70% |
|
5 |
60% |
|
6 |
50% |
|
7 |
40% |
|
8 |
30% |
|
9 |
20% |
|
10 |
10% |
|
After 10 years |
0% |
Subordination of a lien for refinancing will be done on a case by case basis provided there is sufficient equity to cover this lien. If lien release or lien subordination is required, a written request must be submitted ten (10) days prior. A $75 processing fee will be charged to release or subordinate a lien.