CITY OF CHINO
Home Improvement Program
Program Guidelines
City of Chino
Development Services Department
Housing Division
13220 Central Avenue
Chino, CA 91710
Phone: (909) 334-3272
Website: www.cityofchino.org
January 2023
CITY OF CHINO HOME IMPROVEMENT PROGRAM POLICY
TABLE OF CONTENTS
TABLE OF CONTENTS
I. BACKGROUND ................................ ................................ ................................ .............. 1 II. PROGRAM OBJECTIVES ................................ ................................ ............................... 1 III. APPROVAL OF PROGRAM AGREEMENTS ................................ ................................ .. 1 IV. HOME IMPROVEMENT PROGRAMS ................................ ................................ ............. 1 V. ELIGIBILITY CRITERIA ................................ ................................ ................................ .. 3 A. Homeowner Eligibility Requirements ..................................................................................................... 3 B. Property Eligibility Requirements .......................................................................................................... 5 VI. ELIGIBLE AND INELIGIBLE IMPROVEMENTS ................................ ............................. 7 A. General Requirements ............................................................................................................................ 7 B. Priority Improvements ............................................................................................................................ 7 C. Eligible Improvements ............................................................................................................................ 7 D. Ineligible Improvements ......................................................................................................................... 9 VII. ELIGIBLE/INELIGIBLE COSTS ................................ ................................ .....................10 A. Eligible Costs ....................................................................................................................................... 10 B. Ineligible Costs ..................................................................................................................................... 10 VIII. PROCUREMENT PROCEDURES AND REQUIREMENTS ................................ ............10 IX. TERMS AND CONDITIONS OF PROGRAM ASSISTANCE ................................ ..........10 A. Maintenance/Occupancy Requirements ............................................................................................... 10 B. Hazard Insurance ................................................................................................................................. 10 C. Nondiscrimination ................................................................................................................................ 10 D. Compliance with Program Policies and Procedures ........................................................................... 11 X. PROGRAM AMENDMENT PROCEDURES ................................ ................................ ...11
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I. BACKGROUND
The City of Chino administers home improvement programs to preserve and enhance the City’s housing stock and residential neighborhoods through utilization of federal, state, and local funding sources made available through the U.S. Department of Housing and Urban Development (HUD), Housing and Community Development (HCD), and the City’s Affordable Housing Funds.
The City’s Program is designed to provide financial assistance to eligible owner-occupied homeowners in need of repairs and improvements l ocated within the city limits . The Program provides assistance in the form of deferred payment loans and grants. Loans may be in a senior or subordinate lien position. The origination and servicing of the Home Improvement Program loans will be administered by the city.
II. PROGRAM OBJECTIVES
As part of its ongoing housing and community development efforts, the City has established a comprehensive Home Improvement Program. The goals and objectives are as follows:
A. Preserve and enhance the City’s existing housing stock; and B. Provide safe, properly maintained, affordable housing for persons/ families of very low, low- and moderate incomes.
III. APPROVAL OF PROGRAM AGREEMENTS
In adopting this Program Policy, and consistent with the provisions of Chapter 2.08.070 of the Chino Municipal Code, the City Council authorizes the City Manager to prepare and execute Program documents, including but not limited to grant and loan agreements, as needed to implement the Home Improvement Program and achieve the stated objectives of this Program Policy.
IV. HOME IMPROVEMENT PROGRAMS
The Home Improvement Program offers a variety of financing programs (e.g., grants and low-interest loans) designed to assist very low, low - and moderate-income homeowners with making needed repairs and improvements to their homes. Eligible homeowners may receive assistance under multiple programs. Participation in the City’s Home Improvement Programs is subject to the requirements of this Program Policy.
Funding: Grant and loan amount up to a maximum of $60,000 at the discretion of the City depending upon an assessment conducted by city and county inspections for health and safety issues, code violations and/or emergency circumstances. Programs are subject to the availability of funding and in some cases, funding source maximum loan guidelines.
Location: Citywide
Fees: None
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1. Home Improvement Grant Program-Single Family/Mobile Homes Target Income Group: 80% of area median family income (MFI) 120% of area median family Income (MFI), if
code referral
Security: None*
Funding Source: City Affordable Housing, CDBG
Availability: Once every three years. Exceptions are made at the discretion of the city to address health and safety
risks.
2. Healthy Homes Grant Program-Single Family/Mobile Homes Target Income Group: 80% of area median family income (MFI) Security: None*
Funding Source: CDBG
Availability: Once every three years. Exceptions are made at the discretion of the city t o address health and safety
risks.
Special Requirements: Seniors 62 years of age or older, or disabled persons regardless of age.
3. Low Interest Deferred Payment Loan Program-Single Family Homes Target Income Group: 80% of area median family income (MFI) 120% of area median family income (MFI)
Security: Deed of Trust/ Promissory Note
Funding Source: City Affordable Housing Funds or other federal or state funding.
Loan Rate and Term: 3% simple interest / ten (10) years or the amount of time remaining on the primary mortgage, whichever
is greater. Additional 5-year deferrals are available at the discretion of City if 1) the primary homeowner
is 62 years of age or older; or 2) the household’s
income is at or below 100% of the countywide
median family income.
Note: In some cases, different interest rates and/or
loan terms may apply depending on the regulations
established by the funding agency.
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Availability: Once every ten (10) years. However, the principal balance of all outstanding Home Improvement
Program loan s may not exceed the maximum
approved loan amount.
4. Low Interest Deferred Payment or Forgivable Loan Program -CalHome- Mobile Homes
Target Income Group: 80% of area median family income (MFI) Security: HCD Lien / Promissory Note
Funding Source: HCD CalHome Program
Loan Terms: For mobile homes, the Program offers 0% interest for a 20-year term, with the principal to be forgiven
annually at a rate of 10% per year beyond the 10th
year that the home is continuously occupied by the
borrower.
Note: In some cases, different loan limits, interest
rates and/or loan terms may apply depending on the
regulations established by the funding agency.
Availability: Once every 20 years. However, the principal balance of all outstanding Home Improvement
Program loans may not exceed the loan amount.
V. ELIGIBILITY CRITERIA
A. Homeowner Eligibility Requirements
To be eligible for consideration for assistance under the Home Improvement Program, the applicant must meet all the following eligibility criteria:
1. Household Income and Size
All applicants must certify that they meet the household income eligibility requirements for the Program and have their household income documented.
The income limits in place at the time of approval will apply when determining applicant income eligibility. All CalHome Loan, or CDBG funded applicants must have annual incomes at or below 80 percent of San Bernardino County’s area median income, adjusted for household size, as published by HUD and HCD each year (the links to the official sites, HCD maintain ed, income limits are:
www.hcd.ca.gov and www.hud.gov. Loans or grants may be approved for Applicants with incomes up to 120% of County Area Median if other funding is available for these qualified income levels. The following definitions will be used:
Household: One or more persons who occupy a housing unit.
Annual Income: The gross amount of income of all adult household members that is anticipated to be received during the coming 12 -month period. The
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household's projected income must be used, rather than past earnings, when calculating income. The income verification may not be more than six months old at the time of loan funding (not at the time of loan approval). If the applicant was previously qualified for the program and more than six months have lapsed, then the applicant must be re-qualified.
Household Size: Excludes household members who are foster children, unborn children, and children being pursued for legal custody or adoption who are not currently living with the household. 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.
2. Liquid Assets
Total household liquid assets may not exceed $25,000. Liquid assets include all funds held in savings, checking, money market, brokerage , and trust accounts.
Assets held in Individual Retirement Accounts (IRA’s), 401(k) and other qualified deferred compensation retirement accounts, and whole life and whole life derivative insurance policies shall not be considered liquid for the purposes of this program provided that no holder of said accounts is greater than sixty-two years of age. If one or more accoun t holders exce ed sixty-two years of age, assets held in the above-mentioned types of accounts would be considered liquid.
If one or more account holder exceeds sixty-two years of age and the gross household income (not adjusted for business losses) is less than or equal to 30% of the San Bernardino County median income adjusted for family size, the liquid asset limitation shall be $100,000.
1. For CalHome Program loan applicants when a household has household assets over $5,000 in gross income, gross income should include the greater of: Actual amount of income, if any, derived from all the household’s assets.
2. Two percent (Passbook rate) of the value of all such assets.
If the assets are less than $5,000, then no income is counted from assets. If the assets are $5,000 or greater, count the income from all assets. Note: It is income from the assets that is counted, not the value of the assets. If there is no regular income from the assets, the income is imputed to be 2.0%.
CalHome does not have a requirement to spend down the borrower’s assets to qualify for a CalHome funded loan. Nor does it set a maximum amount of reserve funds.
Household assets include checking, savings, and money market accounts, stocks, bonds, and other forms of capital investments. For checking accounts use the average 3-month balance. Retirement accounts are not counted as assets for income for CalHome Income verification, if they are not accessible to the applicant without retiring or terminating employment.
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The value of equity in real property, value of gems, art collections, etc. , is not considered to be in the asset base because the value fluctuates until sold.
However, income from property must be separately considered. The value of necessary items such as furniture and automobiles shall be excluded. A worksheet provided by the CalHome Program will be utilized for applicant loan files to document any exceptions or exclusions from the asset base.
3. Ownership of Real Property Other Than Primary Residence Ownership of residential rental property or other residential real estate holdings other than the household’s primary residence is prohibited.
B. Property Eligibility Requirements
Following determination of homeowner eligibility pursuant to the requirements of Section V.A., the owner must demonstrate property eligibility. To be eligible to receive Program assistance, the real property in question must meet each of the requirements set forth below:
1. Location and Type of Property
The property must be a single -family residence (e.g., condominium, townhouse, detached single-family home, or mobile home) located within the city limits of the City of Chino.
2. Condition
The property must need the following type of repairs: 1) correct existing nonconforming development standards, 2 ) correct existing nonconforming local and/or state code requirements, 3) correct existing local and/or state code violation, 4) protection of the structural integrity of the property, 5) refurbishment of exterior and/or interior improvements, or 6) aid for the mobility of the physically disabled and/or elderly. With the p receding met then, 7) promote neighborhood improvements and 8) energy efficiency improvements. All repairs must qualify as eligible improvements as defined in Section V of this Program Policy.
3. Ownership and Owner-Occupancy Requirements
Owner-Occupancy: All title information will be verified using the County of San Bernardino Tax Assessor website and other title company websites that are available to the Housing Division Staff. Annual Occupancy Standards are also verified by contacting the homeowner a nnually to verify and certify the housing unit continues to be owner-occupied. These occupancy loan terms are incorporated in the original note and deed of trust and in the City’s Loan Servicing Plan. The Housing Division Staff implements a n annual monitoring procedure that is discussed further in th e Loan Servicing Plan under loan monitoring and servicing.
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4. Maximum After Rehabilitation Property Value and Data Source The estimated value of the property, after rehabilitation, may not exceed ninety - five percent (95%) of the median purchase price for single -family homes in the City.
If approved by CalHome funding source, the after-rehabilitation value of the home assisted with a CalHome Program loan cannot exceed 100 percent of the current median sales price of a single-family home or mobile home in the county where it is located. The Housing Division Staff will utilize comparable sales data sources, including but not limited to data published on websites, such as California Association of Realtors, Chicago Title, and/or other recent and reliable real estate data to determine the est imated After -Rehab Value of the property. Each approved loan application file will include at least three (3) comparable sale prices of properties located in the immediate neighborhood (within about 1 mile of the subject property) of homes sold within the last 6 months (within 1 year of the CalHome Assistance date).
5. Equity
The total indebtedness or amount of credit (whichever is greater) of all recorded liens, including the City’s Home Improvement Program loan (s), may not exceed ninety-five percent (95%) of the fair market value of the home after rehabilitation.
The total indebtedness or amount of credit (whichever is greater) of all recorded liens of the home assisted with CalHome funds, including the City’s Home Improvement Program loan(s), may not exceed one hundred and five percent (105%) of the after-rehabilitation value.
6. Hazard Insurance
All properties must be insured with an all -risk property insurance policy in an amount equal to the full replacement value of all structures located on the property. Furthermore, all properties located within the 100 -year floodplain that receive assistanc e under the Low -Interest Loan Program must maintain flood insurance in the amount of the value of the improvements for the term of the loan.
If a property in need of repair does not have a current all-risk property insurance policy and is unable to secure such a policy due to the presence of one or more building code violations, the Housing Manager, at his/her discretion, may waive this insurance requirement provided that the required all -risk property insurance coverage is secured immediately following the rehabilitation project.
7. Property Tax/Income Tax Delinquency or Liens
All property tax bills and assessments must be current, and the property title must be free and clear of any recorded property tax or income tax liens.
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8. Outstanding Judgments and Obligations
All outstanding mortgages recorded against the subject property must be paid current. Furthermore, there cannot be any outstanding (e.g., non-current or unpaid) liens recorded against the title of the property to be rehabilitated.
9. Front and Back End Ratios
Loans may be approved based on back and front-end debt to income ratios at the discretion of the City or funding agency to determine the borrowers’ repayment ability.
VI. ELIGIBLE AND INELIGIBLE IMPROVEMENTS
A. General Requirements
The City of Chino Home Improvement Program is desi gned to provide for the repair and/or replacement of damaged, deteriorated properties.
The following requirements apply:
1. All rehabilitation work must be completed by qualified, licensed, and insured contractors selected in accordance with Program procedures.
2. All eligible improvements must be affixed to the property.
3. Improvements requiring the replacement of materials must be of equal to or like quality based on labor or cost effectiveness.
4. Eligible improvements are subject to procurement through a competitive bid process to ensure fair material and labor costs.
B. Priority Improvements
1. Repairs to alleviate conditions that present health and/or safety risks.
2. Correction of municipal code violations.
C. Eligible Improvements
1. Abatement of Code Violations: Demolition, construction, rehabilitation, and/or replacements needed to abate violations.
2. Accessibility Modifications: Handicapped ramps, grab bars, and accessible shower enclosures; the modification of doorways, hallways, and countertop elevations; and other adaptive measures.
3. Cabinetry/Counters: Repair or replace deteriorated materials based on cost effectiveness.
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4. Deadbolt locks: Deadbolts to be installed on entry doors.
5. Demolition of Unpermitted , Deteriorated and/or Unsafe Improvements:
Includes fencing, accessory structures such as detached sheds, patio covers, laundry rooms, and workshops, and unpermitted garage conversions.
6. Doors/Windows: Repair and /or replace damaged windows with energy efficient options.
7. Driveways/Walkways: Driveways and walkways may only be replaced with broom-finished concrete. The use of decorative stone is not permitted.
8. Drywall/Lath and Plaster : Repair, replacement , and finishing of damaged drywall/lath and plaster necessary to match the original finish.
9. Electrical: Repair and/or upgrade of electrical system including service panels, wiring, outlets, and switches.
10. Energy conservation : Weather stripping, water heater blankets, and attic insulation and fans.
11. Fencing/Block Walls: Repair or replacement of existing wood fencing or block walls. Chain link fences may be replaced using wood or vinyl materials. Property lines will be assessed.
12. Flooring: Replacement of damaged or deteriorated flooring.
13. Garage Doors : Repair or replacement of garage doors, including the replacement of inoperable garage door openers and broken springs.
14. Hazard/Flood Insurance: Payment for the first year of hazard insurance if the property is not deemed ineligible by the insurance company due to risk.
15. HVAC Systems and related testing: Installation and testing of HVAC system to repair or replace inoperative system components.
16. Kitchen Appliances: Repair or replacement of damaged or inoperable stoves, ovens, and dishwashers with energy efficient appliances.
17. Landscaping: Provide landscaping for deteriorated yards which will include installation of automated irrigation system s to help sustain Municipal Code requirements.
18. Overgrown/Dead Vegetation: Trimming and/or the removal of overgrown or dead vegetation and that with a root system that is resulting in structural damage.
19. Painting (exterior): Exterior painting to improve conditions is eligible.
20. Painting (interior): Complete painting of the interior of the home is eligible.
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21. Termite/Pest Control: Eradication of insect infestations and necessary repairs to correct damages.
22. Plastering, siding, and stucco: Repairs including patching, filling or localized replacement to damaged plaster, stucco or siding.
23. Plumbing/Sewer Pipes and Fixtures : Repair or replacement of leaking or damaged water/sewer pipes and related fixtures.
24. Property Clean -up: Removal of overgrown vegetation , trash, and debris located within public view or that deemed a fire hazard. May also include the removal of excessive debris/trash from the inside to assist a resident that is physically incapable of doing so themselves.
25. Rain Gutters: Repair or replacement of failing rain gutters.
26. Roofing: Complete repair or replacement of deteriorated or damaged roofing using materials of like quality, with the exception of wood shake in which case tile may be used.
27. Room Additions : Room additions/expansions to mitigate o vercrowded conditions.
28. Seismic Retrofitting (mobile homes only): Repair, modification, replacement, or installation of earthquake straps and/or other seismic retrofitting devices.
29. Smoke Detectors and Carbon Monoxide De tector: Installation of s moke detectors and carbon monoxide detectors per Code.
30. Structural Repairs/Modifications : Structural repairs/modifications are permitted to correct existing structural deficiencies and to provide accessibility.
31. Wallpaper/Wall Tile : Repair or replacement of damaged wallpaper and /or missing ceramic tiles.
32. Water Heaters: Repair or replacement of inoperable water heaters including safety and energy efficient measures per building code.
D. Ineligible Improvements
Ineligible improvements include the repair or replacement of any interior or exterior home furnishings or accessories not permanently affixed to the housing stock. Exceptions can be made at the discretion of the City’s Housing Division.
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VII. ELIGIBLE/INELIGIBLE COSTS
A. Eligible Costs
1. Labor and materials.
2. Building permits.
3. Professional service f ees including credit reports, property appraisals, title reports, recording fees and lead/asbestos testing and abatement.
4. Relocation/housing expenses when deemed n ecessary due to substandard conditions, pest extermination or hazardous materials abatement.
5. Replacement of appliances as deemed necessary for health, safety, and energy efficiency.
B. Ineligible Costs
1. Purchase, installation or repair of interior or exterior home furnishings.
2. Compensation/reimbursement of owner’s personal labor or purchase of materials, or any labor not performed by the licensed contractor.
VIII. PROCUREMENT PROCEDURES AND REQUIREMENTS
The City is not party to the construction contract (s) between participating homeowners and the contractors . However, the City ensures that all f inancing provided is used in a cost-effective manner by overseeing the procurement process through competitive pricing, bid selection and final bid approvals/selection of a licensed and insured contractor.
IX. TERMS AND CONDITIONS OF PROGRAM ASSISTANCE
A. Maintenance/Occupancy Requirements
Assisted properties shall be maintained in compliance with all City of Chino Municipal Codes, ordinances, and laws, remain owner-occupied, and maintain occupancy limitations.
B. Hazard Insurance
Loan recipients must maintain an all-risk property insurance policy naming the City of Chino as an additionally insured/loss payee.
C. Nondiscrimination
There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the selection of contractors or subcontractors to complete the
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rehabilitation work financed with Program assistance, or in the sale, leasing, transfer, use, occupancy, tenure, or enjoyment of assisted properties.
D. Compliance with Program Policies and Procedures
Program participants shall comply with all Program requirements and procedures as outlined in these Policies and Procedures, as required by the Housing Division Staff, and as outlined in Grant and Loan agreements.
X. PROGRAM AMENDMENT PROCEDURES
All amendments to the City of Chino Home Improvement Program Policy must be approved by the City of Chino City Council.