Staff Report — Simi Valley City Council, June 23, 2025

CIT

Y OF SIMI VALLEY

MEMORANDUM
June 23,
2025
TO: Cit
y Council
FR
OM: Department of Environmental Services
SUBJ
ECT: ADOPTION OF A RESOLUTION APPROVING THE SINGLE -FAMILY

HOME REHABILITATION PROGRAM GUIDELINES AND

AUTHORIZATION TO SUBMIT THE PROGRAM AND RELATED

DOCUMENTS TO THE DEPARTMENT OF HOUSING AND COMMUNITY

DEVELOPMENT FOR RE-CERTIFICATION AND AUTHORITY FOR THE

CITY MANAGER TO APPROVE BUDGET AMENDMENTS

STAFF RECOMMENDATION
It
is recommended that the City Council:

1. Adopt Re solution No. 2025-2 0 ( page 6) approving the S ingle-Family Home Rehabilitation Program Guidelines (page 8);

2. Authorize the Environmental Services Director to administratively update the Program Guidelines pursuant to applicable law, subject to City Attorney approval;

3. Authorize the City Manager to s ubmit the Pr ogram for re-c ertification to the Department of Housing and Community Development (HCD) and all related Program documents as needed to comply with grant requirements; and

4. Authorize the City Manager to approve budget am endments to allow for the expenditure of program income and recaptured funds.

BACKGROUND AND OVERVIEW
The
City has a long-standing Home Rehabilitation Program (Program) that provides low- interest deferred payment loans for income-eligible homeowners to make health and safety repairs to owner-occupied single-family residences. In the past ten (10) years, the City has provided seventy-five (75) rehabilitation loans totaling approximately $2.8 million.

The last P rogram update was in 2013. Since then, there have been several new state requirements and policy changes . As such, HCD is requiring the City to re-cer tify the Program before new loans can be issued.

As o
f June 1, 2025, amounts available to support the Single-Family Home Rehabilitation Program (hereinafter, Program Guidelines or Program) include CalHome funds of AGENDA ITEM NO.

9A
$594,937 and HOME funds of $1,571,955. There is also $60,000 budgeted in the Local Housing fund for a combined total of $2,226,892. Council-approved Program Guidelines are required to resume using HOME and Cal Home monies to fund rehabilitation loans .

To better align with the City’s Housing Element and evolving State requirements , the Program will shift its focus from limited home repairs to offering more substantial loan amounts that support comprehensive home rehabilitation. This strategic enhancement represents a renewed commitment to addressing the long- term housing needs of the community. Staff prepared and submitted guidelines to HCD for preliminary review and were notified on June 10, 2025, that the guidelines complied with state requirements.

FINDINGS AND ALTERNATIVES
T
he proposed Program Guidelines provide Deferred Payment Loans at two percent (2%) interest to eligible homeowners. The length of the loan will be determined by the number of years remaining on the primary loan. See Table 1 below:

Table 1
NUMBER OF YEARS REMAINING ON MORTGAGE:

No Mortgage 5 Years or Less Over 5 Years
15-Year Loan 15-Year Loan 30-Year Loan
I
f the repayment term specified above may cause undue hardship or burden to the Borrower, it may be extended on a case-by-case basis. Loans will have deferred interest for the first half of the loan term to incentivize Borrowers to repay early, which will assist the Borrower and the long-term financial sustainability of the Program . No repayment is required for up to thirty (30) years unless the Borrower sells, transfers the title , or no longer occupies the home as a primary residence. There is no prepayment penalty.

Applicant Outreach
To ensure broad community awareness and participation, City staff will proactively promote the Program through a comprehensive outreach strategy. Outreach efforts may include fliers, brochures, newspaper ads, articles, and public service announcements across the City’s various social media platforms. In addition, residents are encouraged to join the P rogram interest list available on the City’s website to receive P rogram information as it becomes available.

H
omeowners are offered the opportunity to qualify for assistance on a first -come, first- served basis in the order that completed applications are received.

Applicant Qualifications
To be eligible, the homeowner’s income must be at or below eighty percent (80%) of Ventura County’s Area Median Income (AMI), adjusted for household size, as published by HCD annually. Housing cost ratio and/or debt ratios are not considered, nor is a credit report required, as the funding provided creates no additional monthly financial obligation.

The applicant cannot have an outstanding City l oan or have been awarded a City loan within the past 15 years.
2 Property Qualifications
The home must be a single- family detached residence within Simi Valley City limits . It must be used as a primary residence and be owner-occupied throughout the term of the loan. Rehabilitation repairs need to address health and safety issues, code and regulation compliance, and meet local Building Code standards.

Eligible Construction Costs
Eligible costs include , but are not limited to, energy -related improvements, lead- based paint hazard evaluation and reduction activities, asbestos inspection and abatement, termite inspection and extermination, improvements for handicapped accessibility, and repair or replacement of major housing systems, including the repair or replacement of any component of the home affecting habitability if it is estimated as likely to fail within the next five (5) years.

P
er the federal HOME Regulations at 24 CFR Section 92.251(b), Major Systems are:
• Structural support
• Roofing
• Cladding and weatherproofing (e.g., windows, doors, siding, gutters) • Plumbing
• Electrical
• Heating, ventilation, and air conditioning
Loan Requirements
The existing mortgage, if applicable, must be a fixed- rate loan. Interest -only, reverse mortgages, and adjustable-rate loans are not allowed. The minimum loan amount for a rehabilitation loan is $15,000. The maximum loan amount for HOME-funded loans cannot exceed the Home Maximum Per-Unit Subsidy Limits for the State of California, adjusted for the number of bedrooms, as determined by the U.S. Department of Housing and Urban Development (HUD). For example, the 2024 published Home Maximum Per-Unit Subsidy Limit for a two-bedroom home is $252,994. The maximum loan amount for CalHome - funded loans is $200,000 for rehabilitation and $250,000 for reconstruction.

P
rior to awarding a loan, an estimate of the After-Rehab Value (ARV) will be determined by City staff using the “Estimates of Value” method, which is based on the sale prices of at least three (3) comparable properties (of similar size and period of construction), sold within the last six (6) months, and located within relative proximity of the subject property.

If three comparable properties cannot be found, or if there is any question regarding the ARV, it will be determined by a licensed appraiser . The ARV cannot exceed the limit for Ventura County, as determined by HUD. The 2024 maximum ARV for a single- family home in Ventura County is $704,000. In the past, HCD has provided opportunities to submit a homeownership value limit waiver request when the established limit does not reflect current market conditions for single-family homes within the area. These requests are subject to HCD approval. Staff will apply for this waiver when appropriate. The overall loan-to-value ratio, which is the combined loan balance to the ARV, cannot exceed eighty percent (80%).
3 If it is determined at the end of the loan term that repayment of the loan would cause a hardship, the City can opt to a mend the Note and Deed of Trust or other security instrument(s), one -time only, to defer repayment of the original principal and accrued interest at loan maturity for up to an additional thirty (30) years at zero- percent (0%) additional interest.

Loan Review Committee (LRC)
All applications submitted to the City will be screened by Housing staff in the Department of Environmental Services. Applications that are complete and program -eligible will be forwarded to the Loan Review Committee for review. The LRC will review and provide recommendations to the City Manager and the Environmental Services Director , and recommend decisions on the loans in accordance with the criteria outlined in the Program Guidelines. The LRC is comprised of three staff members appointed by the City Manager.

Contractor Selection and Payments
Prospective homes are inspected to determine the eligibility and acceptability of properties for participation in the Program. Rehabilitation costs will be estimated in conjunction with Building and Safety staff. Housing staff will prepare a scope of work, and bids may be solicited by the Borrower directly or in conjunction with City staff. Once bids are received, the contractor will be selected by the Borrower. Staff will assist the Borrower with the implementation of the construction contract, conduct field inspections, and process payments to the contractor.

C
ontractors must be licensed and bonded, hold a current Business Tax Certificate with the City of Simi Valley, and provide evidence of the required insurance. Down payments may be provided upon request. The Contractor is paid in the form of progress payments during construction for completion of work upon favorable inspections by City staff and the Borrower. Ten percent (10%) of the contract will be held for retention and released thirty-five (35) days after project completion and favorable final inspection.

Insurance Requirements
Property insurance will be required during the life of the loan . For homes in a Federal Emergency Management Agency (FEMA) identified high- risk flood zone, the owner is required to maintain a National Flood Insurance Program (NFIP) policy. All required insurance must be an amount adequate to cover all encumbrances on the property, identify the City as a loss payee, and evidence of insurance must be provided to the City.

For HOME-funded loans only, in the event the Borrower fails to maintain the necessary insurance, the City may take out force-placed insurance to cover the property while the Borrower puts a new insurance policy in place. All costs for installing the necessary insurance will be added to the loan balance at the time of installation of the Borrower’s new insurance, requiring a modified Promissory Note to increase the loan balance accordingly
Th
e following alternatives are available to the City Council:

1. A
dopt a resolution approving the Single- Family Home Rehabilitation Program Guidelines;
4 2. Authorize the Environmental Services Director to administratively update the Program Guidelines pursuant to applicable law, subject to City Attorney approval;

3. A
uthorize the City Manager to submit the Program for re- certification to the Department of Housing and Community Development (HCD) and all related Program documents as needed to comply with grant requirements; and

4. A
uthorize the City Manager to approve budget amendments to allow for the expenditure of program income and recaptured funds.

5. P
rovide staff with other direction.

S
taff recommends Alternative Nos. 1 through 4.

SUGGESTED CITY COUNCIL MOTION
I mov
e to adopt a resolution approving the Home Rehabilitation Program Guidelines ; authorize the Environmental Services Director to administratively update the Program Guidelines as required, subject to City Attorney approval; and authorize the City Manager to submit the P rogram to the Department of Housing and Community Development for re-certification and approve budget amendments and all related documents as needed to comply with grant requirements.

SUMMARY
T
he City has a long- standing Home Rehabilitation Program that provides low -interest deferred payment loans for income- eligible homeowners to make health and safety repairs to owner-occupied single-family residences. The Program has been dormant, and HCD requires Council-approved guidelines to resume using HOME and CalHome monies to fund rehabilitation loans. Therefore, it is recommended that the City Council adopt the attached resolution.
___
_________________________________
Stratis Perros
Environmental Services Director
P
repared by: Lindsey Scaringe, Management Analyst
INDEX Page
R
esolution No. 2025-20 ....................................................................................... 6 Exhibit A – HCD Pre-Approved Single-Family Home Rehabilitation Program Guidelines .......................................................................................... 8 5 RESOLUTION NO. 2025-20
A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

SIMI VALLEY ADOPTING GUIDELINES FOR THE SINGLE-

FAMILY HOME REHABILITATION PROGRAM
W
HEREAS, the City Council of the City of Simi Valley (City) has HOME , CalHome, and Local Housing funds available to support Single-Family Home Rehabilitation Assistance Programs; and
W
HEREAS, City has developed new Program Guidelines for the Single- Family Home Rehabilitation Program (Program Guidelines), which is attached hereto and incorporated herein by reference as Exhibit A to meet the requirements of the Department of Housing and Community Development for use of HOME and CalHome funding; and W
HEREAS, the Program Guidelines were developed for the purpose of providing assistance in the form of deferred payment loans used to finance the cost of necessary health and safety repairs to owner-occupied single-family dwellings within the City; and
W
HEREAS, the City Council finds and determines that adopting the Program Guidelines is in the best interest of the City of Simi Valley; and W
HEREAS, the City Council further finds adoption of the Program Guidelines help preserve the health, safety, and welfare of its residents, and is in accord with the public purposes and provisions of applicable state and local laws and requirements.

W, THEREFORE, THE CITY COUNCIL OF THE CITY OF SIMI VALLEY DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. The findings contained in the staff report dated June 23, 2025, are incorporated for reference herein.

SECTION 2 . The Guidelines for the Single -Family Home Rehabilitation Program are hereby approved as shown in Exhibit A attached hereto. Staff is directed to administer the program in accordance with the Program Guidelines and applicable law.

SECTION 3. The Environmental Services Director is hereby authorized, subject to City Attorney approval, to update the Program Guidelines as required to maintain compliance with the federal and state program requirements and as required by law.
6 SECTION 4. The City Manager is hereby authorized to execute all documents necessary for the implementation and operation of the Program Guidelines and approve budget amendments to allow for the expenditure of HOME, CalHome, and Local Housing funds, as needed to comply with grant requirements.

SECTION 5 The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the Office of the City Clerk.

PASSED
and ADOPTED this 23rd day of June 2025.

Atte
st:

Lucy Blanco, City Clerk Dee Dee Cavanaugh, Mayor of the City of Simi Valley, California
Appr
oved as to Form: Approved as to Content:

Algeria R. Ford, City Attorney Samantha C. Argabrite, City Manager Stratis Perros
Environmental Services Director
7 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 1 CITY OF SIMI VALLEY

SINGLE-FAMILY

HOME REHABILITATION

PROGRAM GUIDELINES
(HOME, CalHome)

PROGRAM DESIGN AND PROCESS
HCD Version August 9, 2024
HOME Approved (6/9/2025)

EXHIBIT A
8 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 2 CITY OF SIMI VALLEY

HOME REHABILITATION

PROGRAM GUIDELINES

TABLE OF CONTENTS

1.0. GENERAL .......................................................................................................... 55

1.1. PROGRAM OUTREACH AND MARKETING .................................................. 55

1.2. APPLICATION PROCESS AND SELECTION ................................................. 66

1.3. LOAN PROCESS ........................................................................................ 1111

1.4. CONFLICT OF INTEREST REQUIREMENTS ............................................ 1111

2.0. APPLICANT QUALIFICATIONS .................................................................... 1212

2.1. INCOME LIMITS ......................................................................................... 1212

2.2. INCOME QUALIFICATION CRITERIA ........................................................ 1313

2.3. HOMEOWNER ELIGIBILITY AND RESIDENCY REQUIREMENTS ........... 1414

3.0. PROPERTY ELIGIBILITY .............................................................................. 1515

3.1. CONDITIONS ............................................................................................. 1515

3.2. ANTI-DISPLACEMENT POLICY AND RELOCATION ASSISTANCE ......... 1616

3.3. NOTIFICATION AND DISCLOSURES (HOME FUNDED LOANS ONLY) ........... 1616

3.4. ENVIRONMENTAL REVIEW ...................................................................... 1616

4.0. THE PROGRAM LOAN ................................................................................. 1717

4.1. AMOUNT OF PROGRAM ASSISTANCE .................................................... 1717

4.2. AFFORDABILITY PARAMETERS FOR HOMEOWNERS........................... 1717

4.3. RATES AND TERMS .................................................................................. 1818

4.4. GRANTS ..................................................................................................... 1919

4.5. APPRAISAL ................................................................................................ 1919

4.6. INSURANCE ............................................................................................... 2020

4.7. LOAN SECURITY ....................................................................................... 2121

5.0. PROGRAM LOAN SERVICING AND MAINTENANCE ................................. 2121

5.1. PAYMENTS ARE VOLUNTARY ................................................................. 2121

5.2. RECEIVING LOAN REPAYMENTS ............................................................ 2121

5.3. LOAN SERVICING POLICIES AND PROCEDURES .................................. 2222

5.4. LOAN MONITORING PROCEDURES ........................................................ 2222

5.5. LOAN PAYOFFS ......................................................................................... 2222

5.6. DEFAULT AND FORECLOSURE ............................................................... 2222

5.7. SUBORDINATIONS .................................................................................... 2222

6.0. CONSTRUCTION ........................................................................................... 2323

6.1. STANDARDS .............................................................................................. 2323

6.2. ELIGIBLE CONSTRUCTION COSTS ......................................................... 2525

6.3. ELIGIBLE PROJECT COSTS ..................................................................... 2828

6.4. REPAIR CALLBACKS ................................................................................. 2828

6.5. CONTRACTOR PERFORMANCE .............................................................. 2828 9 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 3 7.0. EXCEPTIONS AND SPECIAL CIRCUMSTANCES ....................................... 2929

7.1. AMENDMENTS .......................................................................................... 2929

7.2. EXCEPTIONS ............................................................................................. 2929

7.3. PROCEDURES FOR EXCEPTIONAL CIRCUMSTANCES......................... 2929

8.0. DISPUTE RESOLUTION AND APPEALS PROCEDURES ........................... 2929

8.1. PROGRAM COMPLAINT AND APPEAL PROCEDURE ............................. 2929

8.2. GRIEVANCES BETWEEN PARTICIPANTS AND CONSTRUCTION
CONTRACTOR .......................................................................................... 3030

9.0. MISCELLANEOUS PROGRAM REQUIREMENTS ....................................... 3030

9.1. CONFIDENTIALITY OF RECORDS ............................................................ 3030

10 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 4 CITY OF SIMI VALLEY

HOME REHABILITATION

PROGRAM GUIDELINES

ATTACHMENTS

ATTACHMENT A: 24 CFR PART 5 ANNUAL INCOME INCLUSIONS AND EXCLUSIONS – FOR HOME
ATTACHMENT A-1: TITLE 25 SECTION 6914 GROSS INCOME INCLUSIONS – FOR

CALHOME
ATTACHMENT B: ANNUAL INCOME NET FAMILY ASSET INCLUSIONS AND EXCLUSIONS – FOR HOME
ATTACHMENT B-1: TITLE 25 SECTION 6914 GROSS INCOME EXCLUSIONS – FOR

CALHOME
ATTACHMENT C-1: HOME HOMEOWNERSHIP VALUE LIMITS; HOME MAXIMUM PER-UNIT SUBSIDY LIMITS; HOME INCOME LIMITS; BEDROOM
& BATHROOM ADDITION STANDARDS
ATTACHMENT C-2: CALHOME HOMEOWNERSHIP VALUE LIMITS; CALHOME PER- UNIT SUBSIDY LIMITS; CALHOME INCOME LIMITS; BEDROOM
& BATHROOM ADDITION STANDARDS
ATTACHMENT D: HOME REHABILITATION MARKETING PLAN
ATTACHMENT E: RESIDENTIAL ANTI-DISPLACEMENT AND TEMPORARY

RELOCATION PLAN
ATTACHMENT F: LOAN SERVICING POLICIES AND PROCEDURES
ATTACHMENT G: STATEMENT OF OCCUPANCY
ATTACHMENT H: LEAD-BASED PAINT VISUAL ASSESSMENT, NOTICE OF

PRESUMPTION, AND HAZARD REDUCTION FORM

11 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 5 CITY OF SIMI VALLEY

HOME REHABILITATION

PROGRAM GUIDELINES

Adopted date

1.0. GENERAL

The above-named entity, hereinafter referred to as the “City”, has entered into a contractual relationship with the California Department of Housing and Community Development (“HCD”) to administer one or more HCD-funded housing rehabilitation programs. The rehabilitation program described herein and hereinafter referred to as the “Program” is designed to provide assistance to eligible homeowners for correction of health and safety items, as well as code violations, located within the Program’s eligible area, as described in Section 3.0.

The Program provides this assistance in the form of deferred payment loans used to finance the cost of necessary repairs that will provide the homeowner with a healthy, safe, sanitary and code compliant home, referred to herein as “housing unit”. The Program will be administered by City’s Department of Environmental Services, hereinafter referred to as the “Program Operator”.

These Program Guidelines are for the sole purpose of providing guidance for the City’s administration of the Program. It is a guide only and shall not be deemed to create any mandatory duty under Government Code Section 815.6 or otherwise, nor shall any provision hereof be deemed to benefit any specific party nor shall any special relationship arise by virtue of the implementation or non- implementation of the policies and procedures herein.

1.1. PROGRAM OUTREACH AND MARKETING

All outreach efforts will be done in accordance with state and federal fair lending regulations to assure nondiscriminatory treatment, outreach and access to the Program. No person shall, on the grounds of age, ancestry, color, creed, physical or mental disability or handicap, marital or familial status, medical condition, national origin, race, religion, gender or sexual orientation, be excluded, denied benefits or subjected to discrimination under the Program. The City will ensure that all persons, including those qualified individuals with handicaps have access to the Program.

A. The Fair Housing Lender and Accessibility logos will be placed on all outreach materials. Fair housing marketing actions will be based upon a characteristic analysis comparison (census data may be used) of the Program’s eligible area compared to the ethnicity of the population served by the Program (includes, separately, all applications given out and those receiving assistance) and an explanation of any underserved segments of the population. This information is used to show that protected classes (age, gender, ethnicity, race, and disability) are not being excluded from the Program. A Fair Housing Marketing Plan can be found as Attachment 12 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 6 D. Flyers or other outreach materials, in English and Spanish, will be widely distributed in the Program-eligible area and will be provided to any local social service agencies. The Program may sponsor homeownership education classes to help educate homeowners about credit, budgeting, predatory lending, foreclosure prevention and home maintenance, as well as future responsibilities.

B. Section 504 of the Rehabilitation Act of 1973 prohibits the exclusion of an otherwise qualified individual, solely by reason of disability, from participation under any program receiving Federal funds. The City will take appropriate steps to ensure effective communication with disabled housing applicants, residents and members of the public.

1.2. APPLICATION PROCESS AND SELECTION

A. Waiting List/Interest List/Homeowner Contact

The City will utilize an interest list to provide interested homeowners with direct information regarding the Home Rehabilitation Program. In response to a homeowner’s request, the homeowner is placed on the interest list. As funding becomes available, the Program will be marketed in accordance with the City’s HOME Rehabilitation Marketing Plan, (see Attachment D) and the Program Operator will contact interested homeowners by the method provided (mail, email, and/or by telephone) to advise of funding availability.

The City will advertise an application period to begin accepting applications. Once a waiting list has been established, the Program Operator will contact the homeowner. Homeowners are offered the opportunity to qualify for assistance by waiting list priority based on when a completed application is received (on a first-come, first-served basis).

The homeowner has 30 days to complete and return any additional and/or supporting documentation requested by the Program Operator. Should a homeowner fail to respond to the initial contact for assistance or to provide any of the required documentation within the 30-day period, the homeowner’s name will be removed from the waiting list. If the homeowner desires assistance at a later time, he/she will be placed on the interest list to be notified of additional funding availability.

Should the waiting list be exhausted, the Program will again be marketed in accordance with the City’s Home Rehabilitation Marketing Plan. See Attachment D.

B. Application/Interview

An application packet is provided to the homeowner for completion and submittal to the Program Operator, along with supporting documentation.

13 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 7 Once the application is submitted, an initial review will be completed by the Program Operator to determine if the annual household income is within the applicable income limits and that the estimated property value after rehabilitation is within the limits established for the Program. If the initial review indicates that income limits are likely to be met, an interview is scheduled with the applicant. When income limits clearly cannot be met, the Program Operator will contact applicant to verify accuracy of application documentation prior to issuing a formal determination. At the interview, the Program is fully explained; application forms and documentation are reviewed. Verifications are obtained for income, assets, employment, benefits, and mortgage. Title report and appraisals are also obtained.

Meeting the minimum requirements outlined in this Manual does not guarantee loan approval. Approval is discretionary and subject to funding availability, and applicants may be required to submit additional information required by the Program’s Loan Review Committee before obtaining final loan approval.

If the Program Operator encounters material discrepancies and/or misrepresentations, and/or there are income, asset, household composition, or other important questions that can't be resolved, the City reserves the right to deny assistance to the household. In this case, the applicant may re-apply after six (6) months have elapsed from the time of written assistance denial.

C. Household Selection

Households selected for participation in the City’s Home Rehabilitation Program are those determined eligible upon completion of processes described in A and B. above.

D. Initial Inspection/Scope of Work/Estimate

Prospective units are inspected by the Program Operator to determine eligibility and acceptability of properties for participation in the Program.

The dwelling will be inspected to determine identifiable health and safety deficiencies that require correction and rehabilitation. The Program Operator will verify that repairs/improvements are not covered under homeowner’s insurance as an insurable event.

A termite report will be obtained, and all Section 1 items will be incorporated into the Scope of Work.

If the home is a pre-1978 unit, the initial inspection will also include paint testing by a certified Lead-Based Paint (LBP) inspector/assessor or presumption of LBP. Code deficiencies will be corrected and if presumption is used or lead hazards are found they will be properly

14 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 8 treated according to HUD regulations (Section 6.1.D) and cleared by a certified LBP inspector/assessor. Note: CalHome-funded projects do not require LBP compliance.

Measurements and observations are noted about the property, including special conditions with potential cost consequences (dilapidated outbuildings, absence of curb and gutter when required by code, etc.). A floor plan and site plan, as needed, are drawn for the home and property, including all appurtenances.

Findings are noted on an inspection form and later used by the Program Operator to prepare the Scope of Work. Estimated costs are determined by the Program Operator in conjunction with City Building and Safety staff, and in reviewing contractor bids and verifying cost with current industry estimates. The homeowner reviews the completed Scope of Work and cost estimate, and the approved Scope of Work is incorporated into the Program Operator’s estimate and must be used for contractor bid documents.

E. Bid Solicitation

A bid walk-through date and time are scheduled. The homeowner may choose to solicit bids from contractors of his/her choice by obtaining three (3) reasonable bids directly or request the Program Operator to solicit bids on their behalf. If assistance is requested, the Program Operator will facilitate the bid process by providing the homeowner contact information for all contractors with a current Business Tax Certificate for the City of Simi Valley and invitations to bid are sent to contractors in an effort to obtain three (3) reasonable bids, based on the Program Operator’s approved Scope of Work. Bid results will be provided to participating contractors after contract award, upon request. The City will regularly conduct community outreach to gain contractor participation.

Contractors must be licensed and bonded by the State of California Contractors Licensing Board and hold a current Business Tax Certificate with the City of Simi Valley. If the homeowner selects a contractor who does not have a current Business Tax Certificate with the City of Simi Valley, the Program Operator will work directly with the contractor to complete the steps necessary to obtain one. Contractors must also provide Program Operator with evidence of Workers’ Compensation Insurance and Comprehensive General Liability and Property Damage Insurance with Combined Single Limits of at least $1,000,000.

Cost reasonableness is determined by comparing the bids received with the cost estimate prepared by the Program Operator. Bids should be within ten-percent (10%) of the Program Operator’s cost estimate, otherwise an explanation must be provided to the file for any bid selected exceeding ten-percent (10%) of the estimate. The homeowner will select

15 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 9 the successful bidder and is encouraged to accept the lowest reasonable bid. If the homeowner selects a bid that is not the lowest, it may be approved at the discretion of the Program Operator.

The Program Operator determines eligibility of the contractor by contacting the State Contractors License Board and checking the Federal List of Debarred Contractors. The contractor is also required to provide a self-certification stating that he/she is not on the Federal debarred list.

Once determined eligible, the contractor is then notified of provisional award of bid (pending loan approval). Notices of non-award are sent to participating contractors. The preferred contractor selected must be able to begin the work in a timely manner, as determined by the Program Operator.

F. Loan Request/Approval

A report and loan request are prepared on behalf of the homeowner by the Program Operator. The loan request includes the cost of construction, a contingency fund, and other project costs (listed in Section 6.3.). Note: For HOME, the project costs listed in Section 6.3 are considered activity delivery costs to be paid by the City and may not be charged to the homeowner’s loan. The Loan Review Committee reviews the loan request.

Section 1.3 provides additional information on the loan approval process.

Once approved, loan documents are executed, and the loan is funded.

The homeowner has three (3) business days, or five (5) business days for 65 years of age or older, in which to cancel the loan contract per the federal Truth in Lending Act and the California Assembly Bill 2471.

G. Pre-Construction Conference

A pre-construction conference is scheduled with homeowner, contractor, and Program Operator. The Program Operator reviews the Owner- Contractor Construction Contract, including the Scope of Work, start date, pay schedule, and date of completion, with the homeowner and contractor. The construction contract and Notice to Proceed are executed.

The homeowner has three (3) business days, five (5) business days for 65 years of age or older, in which to cancel the construction contract or current requirements of California Civil Code 1689.5

Construction shall begin within twenty (20) days of the date following the right-to-cancel period. All parties shall diligently proceed to complete the rehabilitation within ninety (90) days of the date of the Agreement. The Program Operator may grant an extension of the above timeframes on a case-by-case basis.

H. Start-Up/Field Inspections

The Program Operator monitors date of start-up and performs field inspections on a regular basis. The Program Operator will visit the job site regularly in order to check the scope of work, inspect materials, and to 16 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 10 confirm the job is on schedule and within budget. The Program Operator ensures the work meets building codes, while not exceeding funding limits.

The Program Operator reviews the work status with the homeowner and with the contractor in order to remedy any developing problems quickly and to ensure that both are satisfied with the construction process. At the completion of each phase, the Program Operator inspects the work, and the homeowner authorizes contractor payments.

The Program Operator will refer back to original plans and specifications to verify the work was completed as contracted.

I. Change Orders

Written change orders are required when the homeowner requests any changes in the scope of work, such as eliminating an item completely, eliminating one item and substituting another, or adding items. The change order will state the change and dollar value for the change. The change order must be signed by both the contractor and the homeowner, and submitted to the Program Operator for approval before the change can be ordered and instituted. If the change order exceeds the approved financing, the homeowner will be asked to provide additional funds or a report and request for additional funds may be presented to the City’s Loan Review Committee for approval prior to Program Operator signing- off on the change order.

In case of an emergency where the home would be uninhabitable, the Program Operator may approve the change order over the telephone.

J. Progress Payments

Ninety-percent (90%) of the contract amount is distributed to the contractor in the form of progress payments during construction.

Depending on such factors as the contractor's previous work history, financial capabilities, and size of job to be performed, the Program Operator will decide the number and frequency of progress payments that will be made in individual cases. Contractors will be paid as work is completed. The contractor requests a progress payment from the homeowner and notifies the Program Operator that he/she has done so.

Upon favorable inspection by the homeowner and Program Operator, the payment authorization is signed by the homeowner and submitted for payment. All work requiring permits will be inspected by a Building & Safety Inspector and payment will be issued upon favorable inspections.

Upon request of contractor and consent of homeowner, a down payment up to the maximum amount allowed per California Business and Professionals Code Section 7159 may be provided.

17 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 11 K. Final Inspections/Notice of Completion/Final Payment

When the project is completed, the Program Operator inspects the work item by item with the homeowner and the contractor. Any corrections or deficiencies are noted and corrected by the contractor. All work requiring permits will be deemed complete by a Building & Safety Inspection. Upon favorable final inspections, a Notice of Completion is prepared, signed by the homeowner, and then recorded. The final ten-percent (10%) retention payment is released 35 days after the recording of the Notice of Completion.

1.3. LOAN PROCESS

The City’s Loan Review Committee must approve all loans.

The total financing cannot be more than eighty- percent (80%) of the combined loan to after-rehabilitation value.

For HOME-funded loans, the amount of assistance, including City’s claimed Activity Delivery Costs, cannot exceed the County HOME Maximum Per-Unit Subsidy Limits, and the after-rehabilitation value cannot exceed the HOME Homeownership Value Limits. See Attachment C-1 for current limits.

For CalHome-funded loans, the amount of assistance cannot exceed $200,000 for rehabilitation and $250,000 for reconstruction and the after-rehabilitation value cannot exceed the current local median sales price of a single-family home in Ventura County. See Attachment C-2 for current limits.

In order to obtain financing, applicants must meet all property and eligibility guidelines in effect at the time the application is considered. Homeowners will be provided written notification of approval or denial. Any reason for denial will be provided to the applicant in writing.

1.4. CONFLICT OF INTEREST REQUIREMENTS

When the City’s program contains Federal funds, the applicable Conflict of Interest requirements of 24 CFR section 92.356 of the HOME Final Rule shall be followed for HOME assistance, as follows:

(a) Conflicts prohibited. No persons described in paragraph (b) of this section who exercises or has exercised any functions or responsibilities with respect to activities assisted with HOME funds or who are in a position to participate in a decision making process or gain inside information with regard to these activities, may obtain a financial interest or benefit from a HOME-assisted activity, or have a financial interest in any contract, subcontract or agreement with respect to the HOME-assisted activity, or the proceeds from such activity, either for themselves or those with whom they have business or immediate family ties, during their tenure or for one year thereafter. Immediate family ties include (whether by blood, marriage or adoption) the spouse, parent (including stepparent), child 18 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 12 (including stepchild), brother, sister (including a stepbrother or stepsister), grandparent, grandchild and in-laws of a covered person.

(b) Persons covered. The conflict-of-interest provisions of paragraph (a) of this section apply to any person who is an employee, agent, consultant, officer, or elected official or appointed official of the participating jurisdiction, State recipient, or subrecipient which are receiving HOME funds.

(c) Exceptions: Threshold requirements. Upon the written request of the participating jurisdiction to HCD, HUD may grant an exception to the provisions of paragraph (a) of this section on a case-by-case basis when it determines that the exception will serve to further the purposes of the HOME Investment Partnerships Program and the effective and efficient administration of the participating jurisdiction's program or project. See 24 CFR section 92.356(d)(1-6) for details on the documentation needed in order to submit an exception request to HUD.

A contractor with a vested interest in the property cannot bid on a rehabilitation job. Such a contractor may act as owner/builder, subject to standard construction procedures. Owner/builders are reimbursed for materials purchased which are verified by invoice/receipt and used on the job. Reimbursement occurs after the installation is verified by the Program Operator to be part of the scope of work.

Owner/builders are not reimbursed for labor.

2.0. APPLICANT QUALIFICATIONS

2.1. INCOME LIMITS

All homeowners must certify that they meet the household income eligibility requirements for the applicable HCD program(s) and have their household income documented. The income limits in place at the time of loan approval will apply when determining applicant income eligibility. All applicants must have incomes at or below eighty-percent (80%) of the County’s area median income (AMI), adjusted for household size, as published by HCD each year. See Attachment C-1 and Attachment C-2 for current limits and link to HCD Limits webpage.

Household: means one or more persons who will occupy a housing unit. Unborn children are not included in family size determinations.

Annual Income: Generally, the gross amount of income of all adult household members that is anticipated to be received during the coming 12-month period.

2.1.1. OWNER-OCCUPIED REQUIREMENTS

To be eligible, household income must be equal to or less than the applicable HCD income limits. Owner will be required to provide income documentation Refer to Income Inclusions and Exclusions for further guidance to the types of incomes to be included or excluded when calculating gross annual income. See 19 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 13 Attachment A for HOME. See Attachment A-1 for CalHome. Refer to Asset Inclusions and Exclusions for further guidance to the types of assets to be included or excluded when calculating gross annual income. See Attachment B.

Owner-occupants housing and/or debt ratios are not considered, nor is a credit report required, as the funding provided creates no additional monthly financial obligation. If an owner-occupant has a mortgage, it is verified that all payments are current and that no late payments have been received in the past twelve months.

2.2. INCOME QUALIFICATION CRITERIA

Projected annual gross income of the applicant household will be used to determine whether they are above or below the published HCD income limits.

Income qualification criteria for HOME, as shown in the most recent HCD program-specific guidance at https://www.hcd.ca.gov/grants-and-funding/income- limits/income-calculation-and-determination-guide, subject to updates to the regulations it cites, will be followed to independently determine and certify the household’s annual gross income. Income will be verified by reviewing and documenting tax returns, copies of wage receipts, subsidy checks, bank statements and third-party verification of employment forms sent to employers.

Self-employed applicants must provide profit and loss statements for the current year that has been reviewed and approved by a tax consultant. All documentation shall be dated within six (6) months prior to loan closing and kept in the applicant file and held in strict confidence.

A. HOUSEHOLD INCOME DEFINITION:

Household income is the annual gross income of all adult household members that is projected to be received during the coming 12-month period and will be used to determine program eligibility. Refer to Income Inclusions and Exclusions for further guidance to the types of incomes to be included or excluded when calculating gross annual income. For those types of income counted, gross amounts (before any deductions have been taken) are used. Two types of income that are not considered would be income of minors and of live-in aides. Certain other household members living apart from the household also require special consideration. The household’s projected ability to pay must be used, rather than past earnings, when calculating income.

See Attachment A: HOME 24 CFR Part 5 Annual Income Inclusions and Exclusions and Attachment A-1: CalHome Title 25 Section 6914 Annual Income inclusions and Exclusions (State)

B. ASSETS:

There is no asset limitation for participation in the Program. Income from assets is, however, recognized as part of annual income under the Part 5 definition. An asset is a cash or non-cash item that can be converted to cash. The value of necessary items such as furniture and automobiles are 20 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 14 not included. (Note: it is the income earned – e.g. interest on a savings account – not the asset value, which is counted in annual income.)

An asset’s cash value is the market value less reasonable expenses required to convert the asset to cash, including: Penalties or fees for converting financial holdings and costs for selling real property. The cash value (rather than the market value) of an item is counted as an asset.

See Attachment B: Part 5 Annual Income Net Family Asset Inclusions and Exclusions

2.3. HOMEOWNER ELIGIBILITY AND RESIDENCY REQUIREMENTS

The City’s Home Rehabilitation Program allows for owner-occupied single-family detached properties to participate in the Program. Owner-occupied units must be the owner’s principal place of residence. A photocopy of a recent utility bill will verify proof of occupancy. No unit to be rehabilitated will receive financial assistance if it is currently occupied by an over-income household or does not meet the eligibility standards outlined in these guidelines. Any individual with an outstanding City loan is not eligible. Prior loan recipients are eligible after fifteen (15) years from prior loan issuance and after full repay of the prior loan.

2.3.1. OWNER-OCCUPIED STATUS

A. Continued residency is monitored annually per Attachment F for the term of the loan. Occupancy will be verified by the submission of the following:

1. Proof of occupancy in the form of a copy of two (2) current utility bills; and;

2. Completed Statement of Occupancy, Attachment G.

B. In the event that a homeowner sells, transfers title, or discontinues residence in the rehabilitated property for any reason, the loan becomes due and payable unless the following conditions are met:

The homeowner who received the loan dies and an eligible heir who wishes to assume the loan would be permitted to do so upon executing an assumption agreement with all applicable lenders pursuant to Garn- St. Germain Act and all other applicable laws.

C. If a homeowner converts the property to a rental unit, or any commercial or non-residential use, the loan is due and payable.

If the loan is funded with a CalHome Loan it is not transferable except under the following limited circumstances:

21 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 15 (a) The transfer of the Property to the surviving joint tenant by devise, descent or operation of the law, on the death of a joint tenant;

(b) A transfer, in which the transferee is a person who occupies or will occupy the property, which is:

1. A transfer of the Property where the spouse becomes an owner of the property;

2. A transfer of the Property resulting from a decree of dissolution of marriage, legal separation or from an
incidental property settlement agreement by which the
spouse becomes an owner of the Property; or

3. A transfer to an inter vivos trust in which the Borrower is and remains the beneficiary and occupant of the property.

3.0. PROPERTY ELIGIBILITY

3.1. CONDITIONS

A. No unit will be eligible if a household’s income exceeds the prescribed income limits listed in Attachment C-1 for HOME funded loans and Attachment C-2 for CalHome funded loans.

B. Units to be rehabilitated must be located within the incorporated areas of the City’s jurisdiction.

C. Property must contain a legal residential structure intended for continued residential occupancy.

D. All repair work will meet Local Building Code standards. At a minimum, health and safety hazards must be eliminated. City may also require elimination of code deficiencies. When HOME funds are used for home rehabilitation, the property must meet all applicable current codes, rehabilitation standards, ordinances, and zoning ordinances at the time of project completion. However, if certain components of the house are sound and were built to code prescribed at the time of installation, no repair or alteration will be made to those components unless a component of the home affecting habitability is estimated by the Program Operator to fail within the next five (5) years.

E. Any property located in a Homeowners Association (HOA) community will need HOA approval when applicable. The homeowner is solely responsible for knowing HOA rules and obtaining the appropriate approval prior to construction.

22 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 16 3.2. ANTI-DISPLACEMENT POLICY AND RELOCATION ASSISTANCE

Owner-occupants are not eligible for temporary relocation benefits, unless health and safety threats are determined to exist by the Program Operator. In cases where relocation is determined to be necessary by the Program Operator, assistance may be provided for actual costs incurred from the applicant’s loan proceeds. See section 4.4 for allowable grants.

Should a household have cohabitation with tenants, the tenants will be informed of their eligibility for temporary relocation benefits if occupancy during rehabilitation constitutes a danger to health and safety of occupants or public danger or is otherwise undesirable because of the nature of the project.

Relocated persons will receive increased housing costs, payment for moving and related expenses and appropriate advisory services, as detailed in the City's "Residential Anti-displacement and Relocation Plan" (Attachment E).

Note: Relocation benefits are not a requirement under CalHome, but are acceptable and may be covered by loan proceeds.

3.3. NOTIFICATION AND DISCLOSURES (HOME-funded loans only)

A. Occupants of units constructed prior to 1978 will receive proper notification of Lead-Based Paint (LBP) hazards as follows:

The Lead Hazard Information Pamphlet published by the
EPA/HUD/Consumer Product Safety Commission will be given to all owners regardless of the cost of rehabilitation or paint test findings. If lead-based paint is found through testing or if presumed, a Notice of Lead Hazard Evaluation or Presumption will also be supplied. When Lead hazards are present, a Notice of Lead Hazard Reduction Activity and a Lead-Based Paint Hazard Reduction Form will also be provided (Attachment H).

B. Tenants located in properties that will receive home rehabilitation will be provided a notice outlining their relocation rights and benefits (Attachment E).

3.4. ENVIRONMENTAL REVIEW

The Program Operator must conduct an environmental review in order to comply with 24 CFR section 92.352(a), which requires that the environmental effects of, and upon, each activity carried out with HOME funds be assessed in accordance with the provision of the National Environmental Policy Act of 1969 (NEPA) and the related authorities listed in HUD’s implementing HOME regulations at 24 CFR Part

58. The Program Operator must use the Categorically Excluded, Subject To 58.5 (“CEST”) format found on the HUD Environmental Review page at https://www.hudexchange.info/programs/environmental-review/, and City’s NEPA 23 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 17 Certifying Officer must sign the completed certification. City must also use applicable worksheets at https://www.hudexchange.info/programs/environmental- review/federal-related-laws-and-authorities/,for each CEST factor.

The City’s HOME Standard Agreement requires that HOME Program written approval of each project’s environmental review package is received, prior to committing funds to any rehabilitation project. HCD recommends that Program pre-approval of the environmental review package is obtained prior to the NEPA Certifying Officer signature.

The default NEPA Certifying Officer, until and unless delegated by an individual still in that position or by the governing body, is only the mayor, City Manager or City Administrator, County Administrative Officer or equivalent, or the Chair of the Board of Supervisors. NEPA Certifying Officer delegations must contain HUD- required language and must be separate from other signatory delegations.

Required language is available from the HOME Program.

4.0. THE PROGRAM LOAN

4.1. AMOUNT OF PROGRAM ASSISTANCE

An eligible homeowner may qualify for the full cost of rehabilitation/reconstruction work needed to comply with State and local codes and ordinances. The minimum assistance shall be $15,000. The maximum assistance shall not exceed the City’s County maximum Per-Unit Subsidy Limits in Attachment C-1 for HOME- funded loans and Attachment C-2 for CalHome- funded loans, which has a link to the HCD Limits webpage.

All applicants applying to the Program must show evidence that the existing mortgage is a fixed-rate loan. No interest-only or adjustable-rate loans are allowed. Only properties with no more than one existing loan are eligible.

4.2. AFFORDABILITY PARAMETERS FOR HOMEOWNERS

A. Total indebtedness against property shall not exceed eighty-percent (80%) of a combined loan to after-rehabilitation value as determined by “Estimates of value” or an appraisal. An estimate of after-rehab value will be made prior to making a commitment of funds using the method outlined in Section 4.5.

B. HOME-funded units’ after-rehabilitation values shall not exceed the HOME Homeownership Value Limits for City’s County as updated by HUD and published on the HCD Website. See Attachment C-1 for current limits, which may reflect temporary waivers not published on the HCD Website, and for a link to the HCD Limits webpage.

C. CalHome-funded units’ after-rehabilitation values shall not exceed the current local median sales price of a single-family home in Ventura County. See Attachment C-2 for current limits.

24 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 18 D. Costs may be supplemented with personal financing, or with other loan or grant programs, which are sources of leverage for the City, provided that all other program criteria is met.

E. Any bid within ten-percent (10%) of the Program Operator’s estimate may be selected, otherwise an explanation must be provided to the file and approved by the Program Operator for a bid selected exceeding ten- percent (10%) of the estimate.

4.3. RATES AND TERMS

A. Homeowners are eligible for Deferred Payment Loans (DPL), at two percent (2%) simple interest accrued only during the second half of the loan term, evidenced by a Promissory Note and secured by a Deed of Trust. The length of the loan will be determined by the number of years remaining on the primary loan (see chart below), with no payback required until the end of the loan term unless the borrower sells or transfers title.

Time Remaining on
Primary Mortgage
Rehabilitation Loan Term
No Mortgage 15 Year Loan
5 Years or Less 15 Year Loan
Over Five Years 30 Year Loan

This loan repayment schedule is intended to ensure the replenishment of resources for the long-term viability of the program. If the repayment term specified above may cause undue hardship or burden to the homeowner, it may be extended on a case-by-case basis upon approval of the Program Operator.

Payments may be made voluntarily on a DPL.

B. If the homeowner dies, and if the heir(s) to the property live(s) in the house and is/are income eligible, the heir(s) may be permitted, upon approval of the City, to assume the loan pursuant to Section 2.3.1.B.

C. If the homeowner dies and the heir(s) is/are not eligible per Section

2.3.1.B., the loan becomes all due and payable subject to applicable state, federal, and local laws.

D. If a homeowner converts the rehabilitated property to any commercial or non-residential use, the loan becomes all due and payable.

E. As specified in the Home Rehabilitation Loan Agreement, all applicants who participate in the Program must maintain the property at post- rehabilitation conditions for the term of the loan. Should the property not be maintained accordingly, the loan shall be considered in default and becomes all due and payable, and if necessary, foreclosure proceedings will be initiated. A method of inspection will be established by the City.

25 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 19 F. If it is determined by the City that repayment of a Program loan at the maturity date causes a hardship to the homeowner, the City may opt to amend the Note and Deed of Trust or other security instrument(s), one- time only, to defer repayment of the amount due at loan maturity, that is, the original principal and accrued interest, for up to an additional thirty (30) years at zero-percent (0%) additional interest.

4.4. GRANTS

A. HOME-funded projects provide grants for all actual costs of lead-based paint evaluation and reduction activities.

B. HOME-funded projects provide grants for relocation assistance of up to $3,000. See Relocation Assistance Plan, Attachment E.

C. Grants are not available in CalHome-funded programs.

4.5. APPRAISAL

A. The After-Rehab Value for rehabilitation projects is determined using the “Estimates of value” method. The Program Operator determines estimates of value based on the sale prices of at least three (3) comparable properties (of similar size and period of construction), sold within the last six (6) months (within one year of the assistance date, which is the date the promissory note is signed), and located within relative proximity of the subject property. The participants’ file will include the estimate of value and document the basis for the value estimates. The purpose of the “Estimates of value” is to determine that the After-Rehabilitation Value Limit of the housing unit will not exceed the permitted amount per Program regulations (See Attachment C-1 for HOME=funded loans and Attachment C-2 for CalHome-funded loans) . If three comparable properties cannot be found, or if there is any question regarding the After- Rehab Value, the ARV will be determined by a licensed appraiser, as described in Section 4.5.B. below.

B. A licensed appraiser determines the After-Rehab Value for rehabilitation projects, when the “Estimates of value” method cannot be used. For rehabilitation projects the appraiser determines the value of the unit with the rehabilitation building plans and specifications included. For HOME only, the cost of the appraisal will be paid by the City, not by the homeowner. The purpose of the appraisal is to determine that the after- rehabilitation value of the housing unit will not exceed the permitted amount per Program regulations (See Attachment C-1 for HOME funded loans and Attachment C-2 for CalHome funded loans), and that the combined loans will not exceed the maximum combined loan-to-value limit, as described in Section 4.2.A.

C. The After-Rehab Value for reconstruction projects is determined by a licensed appraiser. The After-Rehab Value for reconstruction projects is determined by an appraisal completed off the building plans and 26 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 20 specifications for the new home . For HOME only, the cost of the appraisal will be paid by the City, not by the homeowner. The purpose of the appraisal is to determine that the After-Rehabilitation Value Limit of the housing unit will not exceed the permitted amount per Program regulations (See Attachment C-1 for HOME funded loans and Attachment C-2 for CalHome funded loans).

4.6. INSURANCE

All program participants must provide evidence of insurance naming the City as Loss Payee at the time of funding. Insurance must be maintained for the duration of the loan. All program participants will be required to submit verification annually at the time of the City’s annual occupancy verification. If insurance is not maintained, the City may call the loan plus any interest immediately due and payable.

4.6.1. HAZARD INSURANCE

The homeowner shall maintain hazard insurance on the property for the duration of the Program loan(s). This insurance must be an amount adequate to cover all encumbrances on the property. The insurer must identify the City as Loss Payee for the amount of the Program loan(s). Evidence of this shall be provided to the City.

In the event the Borrower fails to maintain the necessary insurance, the City may take out force placed insurance to cover the property while the Borrower puts a new insurance policy in place. All costs for installing the necessary insurance will be added to the loan balance at time of installation of Borrower’s new insurance requiring a modified Promissory Note to increase the loan balance accordingly.

The Sponsor, at its option, may make such payments for a period not to exceed 60 days. The Sponsor may, in its discretion and upon the showing of special circumstances, make such premium payments for up to one year. Should the Sponsor make any payments, it may, in its sole discretion, add such payments to the principal amount that the applicant is obligated to repay the Sponsor under this Program. If HOME funds are used, they must be loaned, not granted. Note:

CalHome funds cannot be used to pay insurance at any time.

4.6.2. FLOOD INSURANCE

For homes in a 100-year flood zone, the owner is required to maintain National Flood Insurance Program (NFIP) flood insurance in an amount adequate to secure the Program loan and all other encumbrances. This policy must designate the Sponsor as Loss Payee, and a binder shall be provided to the Sponsor and maintained in the borrower’s file.

In the event the Borrower fails to maintain the necessary insurance, the City may take out force placed insurance to cover the property while the Borrower puts a new insurance policy in place. All costs for installing the necessary insurance will 27 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 21 be added to the loan balance at time of installation of Borrower’s new insurance requiring a modified Promissory Note to increase the loan balance accordingly.

CalHome funds cannot be used to pay insurance at any time.

4.7. LOAN SECURITY

A. Loan security for all owner-occupied rehabilitation stick-built homes will be secured by the real property and improvements, and will also include a Deed of Trust, Promissory Note/Loan Agreement in favor of the City.

B. Entering a subordinate lien is acceptable. However, the City will not subordinate a first lien position once established and will not accept a position lower than the second lien position at any time.

5.0. PROGRAM LOAN SERVICING AND MAINTENANCE

5.1. PAYMENTS ARE VOLUNTARY

Borrowers may begin making voluntary payments at any time.

5.2. RECEIVING LOAN REPAYMENTS

A. Prepayments are allowed, with payments applied to any accrued interest first. Program loan payments will be made to:

City of Simi Valley
Department of Environmental Services
Attn: Neighborhood Services Division
2929 Tapo Canyon Road
Simi Valley, CA 93063

B. The City will be the receiver of loan payments or recapture funds and will maintain a separate financial record-keeping system to record payments and file statements on payment status. Payments shall be deposited and accounted for in the City’s appropriate Program Income Account, as required by HCD programs. The Program City will accept loan payments from borrowers prepaying deferred loans and from borrowers making payments in full upon sale or transfer of the property. All loan payments are payable to the City. The City may at its discretion, enter into an agreement with a third party to collect and distribute payments and/or complete all loan servicing aspects of the Program.

28 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 22 5.3. LOAN SERVICING POLICIES AND PROCEDURES

See Attachment F for local loan servicing policies and procedures. While the attached policy outlines a system that can accommodate a crisis that restricts borrower repayment ability, it should in no way be misunderstood: The loan must be repaid. All legal means to ensure the repayment of a delinquent loan as outlined in the Loan Servicing Policies and Procedures will be pursued.

5.4. LOAN MONITORING PROCEDURES

Homeowners will be required to submit each of the following to the City at the time of annual occupancy verification per Attachment F:

 Proof of occupancy in the form of a copy of two (2) current utility bills;  Statement of Occupancy, Attachment G;
 Declaration that all title holders are on the loan;
 Verification that Property Taxes are current; and verification of current required insurance policies.

5.5. LOAN PAYOFFS

City staff will calculate the payoff amount upon receipt of a written Request for Demand. A copy of the Trust Deed and Note will be submitted to the requestor, along with a cover letter outlining the payoff amount. After payment is received, the Program Operator will create a Reconveyance and forward to the County for recording. The City Manager’s signature is required to reconvey any Trust Deed.

The Borrower may prepay all or any part of the balance outstanding hereunder at any time without penalty.

5.6. DEFAULT AND FORECLOSURE

If an owner defaults on a loan, and foreclosure procedures are instituted, they shall be carried out according to the Home Rehabilitation Program Loan Servicing Policies and Procedures adopted by the City, and attached to these guidelines as Attachment F.

5.7. SUBORDINATIONS

The City may approve a request to subordinate a loan, in order for the owner to refinance the property, under the following conditions:

A. The lien position of the City loan will remain the same or be advanced.

B. The new primary loan is no greater than the balance of the loan being refinanced, except the costs of refinancing the loan may be added to the principal balance. No cash out refinances will be approved for subordination.

C. The purpose of the new primary loan is to reduce the interest rate being 29 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 23 paid and reduce the owner's payment.

D. The refinancing terms must be acceptable to the City.

5.7.1 SUBORDINATION REQUESTS

If all conditions in Section 5.7 above are met, subordination requests can be submitted for review by the City’s Loan Review Committee once the following documentation is provided to the Program Operator:

A. A letter outlining the purpose of the refinance and the need for subordination rather than repayment of the City’s loan. Specifically, the letter should include how the refinance will improve the requestor’s overall financial position.

B. The requestor’s completed loan application showing an amortized fixed rate of interest loan payment schedule.

5.7.2 SUBORDINATION APPEAL

The Loan Review Committee’s decision to approve or deny a loan subordination request will be forwarded to the requestor in writing. Any requests for appeal must be submitted in writing and will be forwarded to the City Manager for final action.

6.0. CONSTRUCTION

6.1. STANDARDS

A. All repair work will meet Local Building Code standards. At a minimum, health and safety hazards must be eliminated. The City may also require elimination of code deficiencies. When HOME funds are used for home rehabilitation, the property must meet all applicable current codes, rehabilitation standards, ordinances, and zoning ordinances at the time of project completion. However, if certain components of the house are sound and were built to code prescribed at the time of installation, no repair or alteration will be made to those components unless a component of the home affecting habitability is estimated by the Program Operator as likely to fail within the next five (5) years.

B. Contracting Process

1. Contracting will be done on a competitive basis.

2. The homeowner will be the responsible agent, but the Program Operator will prepare the Scope of Work, prepare and advertise the bid package, and assist the owner in negotiating the construction contract.

3. The City does not warrant any construction work or provide insurance coverage.

30 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 24 C. Approved Contractors

1. Contractors are required to be licensed with the State of California, and be active and in good standing with the Contractors’ License Board.

2. Contractor must hold a current Business Tax Certificate with the City of Simi Valley.

3. Contractors will be checked against the list of federally debarred contractors. No award will be granted to a contractor on this list.

4. Contractors must have public liability and property damage insurance, and worker’s compensation, unemployment and disability insurance, to the extent required by State law.

5. Contractor must agree to comply with all federal and state regulations.

D. Build America, Buy America Act (the Act) was enacted on November 15, 2021, as part of the Infrastructure Investment and Jobs Act (IIJA). Pub. L. 117-58. The Act establishes a domestic content procurement preference, the Buy American Preference (BAP), for Federal programs that permit Federal financial assistance to be used for infrastructure projects. In Section 70912, the Act further defines a project to include “the construction, alteration, maintenance, or repair of infrastructure in the United States” and includes within the definition of infrastructure those items traditionally included along with buildings and real property. Awards of Federal financial assistance (FFA) from a program for infrastructure, and any of those funds obligated by the grantee, are covered under the Build America, Buy America (BABA) provisions of the Act, 41 U.S.C. 8301 note.

E. Occupants of homes constructed prior to 1978 will receive proper notification of Lead-Based Paint (LBP) hazards as identified in Section

3.3.A. Note: Projects funded solely with CalHome funds are not required to comply with LBP regulations.

F. Homes constructed prior to 1978 will also be inspected according to the following HUD regulations. Note: Projects funded solely with CalHome funds are not required to comply with LBP regulations.

1. If the total amount of Federal assistance or the total amount of rehabilitation hard cost is up to and including $5,000, the following is required:
(a) Paint testing or presume LBP;
(b) Clearance of disturbed work areas; and
(c) Notifications listed in Section 3.3.A.

2. If the amount of Federal assistance or the total amount of rehabilitation hard cost is more than $5,000 up to and including $25,000, the following is required:
(a) Paint testing or presume LBP;
(b) Risk assessment; and
(c) Clearance of unit.

31 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 25 If LBP hazards are identified, interim controls will be implemented. This level will also require a notice of “Abatement of Lead Hazards Notification” at least five (5) days prior to starting work.

3. If the amount of Federal assistance or the total amount of rehabilitation hard cost is more than $25,000, the following is required:
(a) Items (a), (b), and (c) of 2. above;
(b) Abatement of all LBP hazards identified or produced; (c) Use of interim controls on exterior surfaces not disrupted by rehab; and all notices listed above in Sections 3.3.A.

4. All paint tests that result in a negative finding of lead-based paint are exempt from any and all additional requirements. If defective paint surfaces are found, they will be properly treated or abated. A State- certified Inspector/Assessor will perform all paint testing, risk assessments, and clearances. A trained supervisor may oversee interim controls; however, a certified supervisor and workers will perform all abatement.

6.2. ELIGIBLE CONSTRUCTION COSTS

“Rehabilitation” means, in addition to the definition in Section 50096 of the Health and Safety Code, repairs and improvements to a manufactured home necessary to correct any condition causing the home to be substandard pursuant to Section 1704 of Title 25, California Code of Regulations. Rehabilitation also includes room additions to alleviate overcrowding. Rehabilitation also means repairs and improvements where necessary to meet any locally-adopted standards used in local rehabilitation programs. Rehabilitation does not include replacement of personal property.

Rehabilitation includes reconstruction. Federal law and policy allow the use of funds to demolish and reconstruct owner-occupied residential structures.

Reconstruction is defined as the demolition and construction of a structure. The Program Operator must document that the reconstruction costs are less than the cost to rehabilitate the existing substandard housing. This will be done using the State’s HOME Test for Reconstruction, for projects funded with HOME funds.

Additionally, the City must determine that the project’s value after reconstruction (housing and land combined) is less than the Homeownership Value Limits for Newly-Constructed housing, in the City’s jurisdiction ( see Attachment C-1 for HOME-funded loans and Attachment C-2 for CalHome-funded loans).

The residential structure to be reconstructed must be a structure with cooking, eating, sleeping, and sanitation facilities which has been legally occupied as a residence within the preceding 12 months. Fifth wheels or recreational vehicles, for example, are not considered dwellings and therefore are not eligible under this Program.

32 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 26 Like for like requires that the structure being demolished must be replaced with a like structure. However, additions may be approved by the HCD Program when required by Codes/Ordinances or to alleviate overcrowding (see Attachment C-1 for HOME-funded loans and Attachment C-2 for CalHome-funded loans).

Temporary relocation benefits must be planned for and budgeted into the total allowable subsidy for the project, but if required, would be in the form of a grant. *Not available for CalHome-funded loans

Depending on the outcome of the federal environmental review, a reconstructed project may require Authority from the State before funds are committed to the project. See Environmental Section 3.4.

Allowable rehabilitation\reconstruction costs include:

A. Cost of building permits and other related government fees.

B. Cost of architectural, engineering, and other consultant services which are directly related to the rehabilitation of the property.

C. Owner-occupied rehabilitation activity delivery fees, pursuant to Section 7733(f), as reimbursement to the City for the actual costs of services rendered to the homeowner that are incidentally but directly related to the rehabilitation work (e.g. planning, engineering, construction management, including inspections and scope of work).

D. Rehabilitation will address the following issues in the order listed. Eligible costs are included for each item.

1. Health and Safety Issues

Eligible costs include, but are not limited to, energy-related improvements, lead-based paint hazard evaluation and reduction activities, asbestos inspection and abatement, termite inspection and extermination, improvements for handicapped accessibility, and repair or replacement of major housing systems, including repair or replacement of any component of the home affecting habitability if it is estimated by the Program Operator as likely to fail within the next five (5) years.

Per the federal HOME Regulations at 24 CFR section 92.251(b), Major Systems are:
 structural support
 roofing
 cladding and weatherproofing (e.g., windows, doors, siding, gutters)  plumbing
 electrical
 heating, ventilation, and air conditioning.
33 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 27 Upon project completion, each of the major systems must have a remaining useful life for a minimum of five (5) years, so these systems must be rehabilitated or replaced as part of the rehabilitation work in order to achieve this requirement.

A driveway, concrete walks, and patio slabs may be considered part of rehabilitation if it is determined to be a health and safety issue.

2. Code and Regulation Compliance

Eligible costs include, but are not limited to, additional work required to rehabilitate and modernize a home to bring it into compliance with current building codes and regulations. Painting and weatherization are included.

3. Demolition

Eligible costs include, but are not limited to, the tear down and disposal of dilapidated structures when they are a part of the reconstruction of an affordable housing unit. If a garage or carport is detached, it may not be rehabilitated but may be demolished, if it is determined to be a health and safety issue. The demolition of any unpermitted structures or additions will be covered as an eligible expense but will not be replaced.

4. Upgrades (based on overcrowding)

Eligible costs include additional bedrooms and bathrooms if the need can be demonstrated per HUD’s or City’s overcrowding guidelines listed in Attachment C-1 for HOME-funded loans and Attachment C-2 for CalHome-funded loans . The Program will not fund additions to a home for a den or family room, or for any luxury items.

The CalHome Program’s requirement is that a bedroom or bathroom can be added to omit overcrowding, and this is up to the Recipient to decide what is overcrowding.

5. General Property Improvements

Eligible costs include but are not limited to: addition or replacement of an oven, stove, dishwasher, or fixtures; replacing floor coverings and counter tops; painting; and repair or installation of fencing.

All improvements must be physically attached to the property and permanent in nature. Non-code general property improvements (including fencing, landscaping, driveway, etc.) will be limited to fifteen- percent (15%) of the total contract amount unless these items would 34 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 28 trigger a code compliance order for property maintenance under the City’s Municipal Code. Any cash contribution by the property owner will be considered a general property improvement and be included in this percentage. Standard replacement will be based on material of similar quality unless comparable market/industry alternatives are more cost- effective or are needed to address a reasonable accommodation.

Luxury items are not permitted. Items such as stoves and dishwashers that are not built-in may be replaced due only to incipient failure or documented medical condition of the homeowner, and must be of moderate quality.

6. Rehabilitation Standards

All repair work related to health and safety conditions will meet Local Building Code standards. The priority will be the elimination of all health and safety hazards and code compliance, which is required for HOME-funded projects.

6.3. ELIGIBLE PROJECT COSTS

Examples of eligible project costs for all administrative expenses related to the paperwork for processing and insuring a loan application are listed below. For HOME, these costs are considered activity delivery costs and may not be charged to the homeowner’s loan.

 Appraisal
 Property Report/Title Insurance
 Building Plan
 Termite Report
 Land Survey
 Grading Plan
 Recording Fees

Costs are based on charges currently incurred by the City for these products and/or services. Except for HOME loans, any cost increases charged to the City for these products and/or services will be passed on to the homeowner and included in the loan. All fees are subject to change and are driven by the market.

6.4. REPAIR CALLBACKS

Contractors will comply with State law regarding all labor and material warranties.

All labor and material shall meet FHA minimum specifications.

6.5. CONTRACTOR PERFORMANCE

The homeowner shall have the option of dismissing and replacing a contractor for non-performance, or for work delays not caused by acts of God, acts of Government, or Union Labor disputes, with concurrence of the Program 35 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 29 Operator. Additional cause for dismissal is failure of the Contractor to perform work using construction materials of standard quality, free of defects, and failure to install materials in a good and workmanlike manner at the discretion of the Program Operator. Payment for all work completed that met the building standard will be paid.

7.0. EXCEPTIONS AND SPECIAL CIRCUMSTANCES

7.1. AMENDMENTS

The City may make amendments to these Participant Guidelines. Any substantive changes made shall be in accordance with federal and state regulations, shall be approved by the City’s Loan Review Committee and/or local governing body and submitted to HCD for approval, which exclude those made for administrative clarity made by the Program Operator.

7.2. EXCEPTIONS

Any case to which a standard policy or procedure, as stated in the guidelines, does not apply or an applicant treated differently from others of the same class would be an exception.

7.3 PROCEDURES FOR EXCEPTIONAL CIRCUMSTANCES

A. The Program Operator may initiate consideration of an exception and prepare a report. This report shall contain a narrative, including the Program Operator’s recommended course of action and any written or verbal information supplied by the applicant.

C. The City shall make a determination of the exception based on the recommendation of the Program Operator. The request can be presented to the City’s Loan Review Committee and/or governing body for decision.

8.0. DISPUTE RESOLUTION AND APPEALS PROCEDURES

8.1. PROGRAM COMPLAINT AND APPEAL PROCEDURE

Complaints concerning the City’s Home Rehabilitation Program should be made to the Program Operator first. If unresolved in this manner, the complaint or appeal shall be made in writing and filed with the City. The City will then schedule a meeting with the City’s Loan Review Committee. Its written response will be made within thirty (30) business days. If the applicant is not satisfied with the committee's decision, a request for an appeal may be filed with the local governing body. Final appeal may be filed in writing with HCD within one year after denial or the filing of the Project Notice of Completion.

36 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 30 8.2. GRIEVANCES BETWEEN PARTICIPANTS AND CONSTRUCTION

CONTRACTOR

Contracts signed by the contractor and the participant include the following clause, which provides a procedure for resolution of grievances:

Any controversy arising out of or relating to this Contract, or the breach thereof, shall be submitted to binding arbitration in accordance with the provisions of the California Arbitration Law, Code of Civil Procedure 1280 et seq., and the Rules of the American Arbitration Association. The arbitrator shall have the final authority to order work performed, to order the payment from one party to another, and to order who shall bear the costs of arbitration. Costs to initiate arbitration shall be paid by the party seeking arbitration. Notwithstanding, the party prevailing in any arbitration proceeding shall be entitled to recover from the other all attorney's fees and costs of arbitration.

9.0. MISCELLANEOUS PROGRAM REQUIREMENTS

9.1. CONFIDENTIALITY OF RECORDS

All information and materials contained in a homeowner's loan application file maintained by the Program Operator, including the evaluation of the applicant's credit worthiness, shall be held by the City as privileged and confidential information and not as public records, subject to applicable Federal, State, and local laws.

37 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 31 ATTACHMENT A

INCOME INCLUSIONS AND EXCLUSIONS

24 CFR Part 5 Annual Income Inclusions and Exclusions

5.609 Annual income.
(a) Annual income includes, with respect to the family:
(1) All amounts, not specifically excluded in paragraph (b) of this section, received from all sources by each member of the family who is 18 years of age or older or is the head of household or spouse of the head of household, plus unearned income by or on behalf of each dependent who is under 18 years of age, and (2) When the value of net family assets exceeds $50,000 (which amount HUD will adjust annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers) and the actual returns from a given asset cannot be calculated, imputed returns on the asset based on the current passbook savings rate, as determined by HUD.
(b) Annual income does not include the following:
(1) Any imputed return on an asset when net family assets total $50,000 or less (which amount HUD will adjust annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers) and no actual income from the net family assets can be determined.
(2) The following types of trust distributions:
(i) For an irrevocable trust or a revocable trust outside the control of the family or household excluded from the definition of net family assets under § 5.603(b):
(A) Distributions of the principal or corpus of the trust; and (B) Distributions of income from the trust when the distributions are used to pay the costs of health and medical care expenses for a minor. (ii) For a revocable trust under the control of the family or household, any distributions from the trust; except that any actual income earned by the trust, regardless of whether it is distributed, shall be considered income to the family at the time it is received by the trust.
(3) Earned income of children under 18 years of age.
(4) Payments received for the care of foster children or foster adults, or State or Tribal kinship or guardianship care payments.
38 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 32 (5) Insurance payments and settlements for personal or property losses, including but not limited to payments through health insurance, motor vehicle insurance, and workers' compensation.
(6) Amounts received by the family that are specifically for, or in reimbursement of, the cost of health and medical care expenses for any family member. (7) Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a member of the family becoming disabled. (8) Income of a live-in aide, foster child, or foster adult as defined in §§ 5.403 and

5.603, respectively.
(9)
(i) Any assistance that section 479B of the Higher Education Act of 1965, as amended (20 U.S.C. 1087uu), requires be excluded from a family's income; and (ii) Student financial assistance for tuition, books, and supplies (including supplies and equipment to support students with learning disabilities or other disabilities), room and board, and other fees required and charged to a student by an institution of higher education (as defined under Section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 )) and, for a student who is not the head of household or spouse, the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit. (A) Student financial assistance, for purposes of this paragraph (9)(ii), means a grant or scholarship received from—
(1) The Federal government;
(2) A State, Tribe, or local government;
(3) A private foundation registered as a nonprofit under 26 U.S.C. 501(c)(3); (4) A business entity (such as corporation, general partnership, limited liability company, limited partnership, joint venture, business trust, public benefit corporation, or nonprofit entity); or
(5) An institution of higher education.
(B) Student financial assistance, for purposes of this paragraph (9)(ii), does not include—
(1) Any assistance that is excluded pursuant to paragraph (b)(9)(i) of this section;
39 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 33 (2) Financial support provided to the student in the form of a fee for services performed ( e.g., a work study or teaching fellowship that is not excluded pursuant to paragraph (b)(9)(i) of this section);
(3) Gifts, including gifts from family or friends; or
(4) Any amount of the scholarship or grant that, either by itself or in combination with assistance excluded under this paragraph or paragraph (b)(9)(i), exceeds the actual covered costs of the student. The actual covered costs of the student are the actual costs of tuition, books and supplies (including supplies and equipment to support students with learning disabilities or other disabilities), room and board, or other fees required and charged to a student by the education institution, and, for a student who is not the head of household or spouse, the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit. This calculation is described further in paragraph (b)(9)(ii)(E) of this section. (C) Student financial assistance, for purposes of this paragraph (b)(9)(ii) must be:
(1) Expressly for tuition, books, room and board, or other fees required and charged to a student by the education institution;
(2) Expressly to assist a student with the costs of higher education; or (3) Expressly to assist a student who is not the head of household or spouse with the reasonable and actual costs of housing while attending the education institution and not residing in an assisted unit.
(D) Student financial assistance, for purposes of this paragraph (b)(9)(ii), may be paid directly to the student or to the educational institution on the student's behalf. Student financial assistance paid to the student must be verified by the responsible entity as student financial assistance consistent with this paragraph (b)(9)(ii).
(E) When the student is also receiving assistance excluded under paragraph (b)(9)(i) of this section, the amount of student financial assistance under this paragraph (b)(9)(ii) is determined as follows:
(1) If the amount of assistance excluded under paragraph (b)(9)(i) of this section is equal to or exceeds the actual covered costs under paragraph (b)(9)(ii)(B)(4) of this section, none of the assistance described in this paragraph (b)(9)(ii) of this section is considered student financial assistance excluded from income under this paragraph (b)(9)(ii)(E). (2) If the amount of assistance excluded under paragraph (b)(9)(i) of this section is less than the actual covered costs under paragraph (b)(9)(ii)(B)(4) of this section, the amount of assistance described in paragraph (b)(9)(ii) of this 40 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 34 section that is considered student financial assistance excluded under this paragraph is the lower of:
(i) the total amount of student financial assistance received under this paragraph (b)(9)(ii) of this section, or
(ii) the amount by which the actual covered costs under paragraph (b)(9)(ii)(B)(4) of this section exceeds the assistance excluded under paragraph (b)(9)(i) of this section.
(10) Income and distributions from any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986 or any qualified tuition program under section 529 of such Code; and income earned by government contributions to, and distributions from, “baby bond” accounts created, authorized, or funded by Federal, State, or local government.
(11) The special pay to a family member serving in the Armed Forces who is exposed to hostile fire.
(12)
(i) Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS); (ii) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred ( e.g., special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program;
(iii) Amounts received under a resident service stipend not to exceed $200 per month. A resident service stipend is a modest amount received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development.
(iv) Incremental earnings and benefits resulting to any family member from participation in training programs funded by HUD or in qualifying Federal, State, Tribal, or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives and are excluded only for the period during which the family member participates in the employment training program unless those amounts are excluded under paragraph (b)(9)(i) of this section.
(13) Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era.
41 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 35 (14) Earned income of dependent full-time students in excess of the amount of the deduction for a dependent in § 5.611.
(15) Adoption assistance payments for a child in excess of the amount of the deduction for a dependent in § 5.611.
(16) Deferred periodic amounts from Supplemental Security Income and Social Security benefits that are received in a lump sum amount or in prospective monthly amounts, or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or in prospective monthly amounts. (17) Payments related to aid and attendance under 38 U.S.C. 1521 to veterans in need of regular aid and attendance.
(18) Amounts received by the family in the form of refunds or rebates under State or local law for property taxes paid on the dwelling unit. (19) Payments made by or authorized by a State Medicaid agency (including through a managed care entity) or other State or Federal agency to a family to enable a family member who has a disability to reside in the family's assisted unit.

Authorized payments may include payments to a member of the assisted family through the State Medicaid agency (including through a managed care entity) or other State or Federal agency for caregiving services the family member provides to enable a family member who has a disability to reside in the family's assisted unit. (20) Loan proceeds (the net amount disbursed by a lender to or on behalf of a borrower, under the terms of a loan agreement) received by the family or a third party (e.g., proceeds received by the family from a private loan to enable attendance at an educational institution or to finance the purchase of a car). (21) Payments received by Tribal members as a result of claims relating to the mismanagement of assets held in trust by the United States, to the extent such payments are also excluded from gross income under the Internal Revenue Code or other Federal law.
(22) Amounts that HUD is required by Federal statute to exclude from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in paragraph (b) of this section apply. HUD will publish a notice in the Federal Register to identify the benefits that qualify for this exclusion. Updates will be published when necessary.
(23) Replacement housing “gap” payments made in accordance with 49 CFR part 24 that offset increased out of pocket costs of displaced persons that move from one federally subsidized housing unit to another Federally subsidized housing unit. Such replacement housing “gap” payments are not excluded from annual income if the increased cost of rent and utilities is subsequently reduced or eliminated, and the 42 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 36 displaced person retains or continues to receive the replacement housing “gap” payments.
(24) Nonrecurring income, which is income that will not be repeated in the coming year based on information provided by the family. Income received as an independent contractor, day laborer, or seasonal worker is not excluded from income under this paragraph, even if the source, date, or amount of the income varies. Nonrecurring income includes:
(i) Payments from the U.S. Census Bureau for employment (relating to decennial census or the American Community Survey) lasting no longer than 180 days and not culminating in permanent employment.
(ii) Direct Federal or State payments intended for economic stimulus or recovery. (iii) Amounts directly received by the family as a result of State refundable tax credits or State tax refunds at the time they are received. (iv) Amounts directly received by the family as a result of Federal refundable tax credits and Federal tax refunds at the time they are received. (v) Gifts for holidays, birthdays, or other significant life events or milestones ( e.g., wedding gifts, baby showers, anniversaries).
(vi) Non-monetary, in-kind donations, such as food, clothing, or toiletries, received from a food bank or similar organization.
(vii) Lump-sum additions to net family assets, including but not limited to lottery or other contest winnings.
(25) Civil rights settlements or judgments, including settlements or judgments for back pay.
(26) Income received from any account under a retirement plan recognized as such by the Internal Revenue Service, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals; except that any distribution of periodic payments from such accounts shall be income at the time they are received by the family. (27) Income earned on amounts placed in a family's Family Self Sufficiency Account. (28) Gross income a family member receives through self-employment or operation of a business; except that the following shall be considered income to a family member:
(i) Net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets 43 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 37 used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations; and (ii) Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family. [88 FR 9657, Feb. 14, 2023]
44 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 38 ATTACHMENT A-1

Title 25 Section 6914 Gross Income Inclusions – For CalHome activities

“Gross income” shall mean the anticipated income of a person or family for the twelve-month period following the date of determination of income.

“Income” shall consist of the following:

(a) Except as provided in subdivision (b), “Exclusions”, all payments from all sources received by the family head (even if temporarily absent) and each additional member of the family household who is not a minor shall be included in the annual income of a family. Income shall include, but not be limited to:

(1) The gross amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses;

(2) The net income from operation of a business or profession or from rental or real or personal property (for this purpose, expenditures for business expansion or amortization of capital indebtedness shall not be deducted to determine the net income from a business);

(3) Interest and dividends;

(4) The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts;

(5) Payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation and severance pay;

(6) Public Assistance. If the public assistance payment includes any amount specifically designated for shelter and utilities which is subject to adjustment by the public assistance agency in accordance with the actual cost of shelter and utilities, the amount of public assistance income to be included as income shall consist of:

(A) The amount of the allowance or grant exclusive of the amount specifically designated for shelter and utilities, plus

(B) The maximum amount which the public assistance agency could in fact allow for the family for shelter and utilities,

(7) Periodic and determinable allowances such as alimony and child support payments, and regular contributions or gifts from persons not residing in the dwelling;

All regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is head of the family or spouse. 45 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 39 ATTACHMENT B
Asset Inclusions and Exclusions
24 CFR Part 5 Asset Inclusions and Exclusions
ASSET INCLUSIONS (section 5.603):

5.603 Definitions:

Net family assets.
(1) Net family assets is the net cash value of all assets owned by the family, after deducting reasonable costs that would be incurred in disposing real property, savings, stocks, bonds, and other forms of capital investment. (2) In determining net family assets, PHAs or owners, as applicable, must include the value of any business or family assets disposed of by an applicant or tenant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the program or reexamination, as applicable, in excess of the consideration received therefor. In the case of a disposition as part of a separation or divorce settlement, the disposition will not be considered to be for less than fair market value if the applicant or tenant receives consideration not measurable in dollar terms. Negative equity in real property or other investments does not prohibit the owner from selling the property or other investments, so negative equity alone would not justify excluding the property or other investments from family assets. [88 FR 9656, Feb. 14, 2023; 88 FR 12560, Feb. 28, 2023] ASSET EXCLUSIONS:

From 24 CFR Section 5.603 (continued):
(3) Excluded from the calculation of net family assets are:
(i) The value of necessary items of personal property;
(ii) The combined value of all non-necessary items of personal property if the combined total value does not exceed $50,000 (which amount will be adjusted by HUD in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers);
(iii) The value of any account under a retirement plan recognized as such by the Internal Revenue Service, including individual retirement arrangements (IRAs), employer retirement plans, and retirement plans for self-employed individuals; 46 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 40 (iv) The value of real property that the family does not have the effective legal authority to sell in the jurisdiction in which the property is located; (v) Any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a family member arising out of law, that resulted in a family member being a person with a disability; (vi) The value of any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986, the value of any qualified tuition program under section 529 of such Code, the value of any Achieving a Better Life Experience (ABLE) account authorized under Section 529A of such Code, and the value of any “baby bond” account created, authorized, or funded by Federal, State, or local government.
(vii) Interests in Indian trust land;
(viii) Equity in a manufactured home where the family receives assistance under 24 CFR part 982;
(ix) Equity in property under the Homeownership Option for which a family receives assistance under 24 CFR part 982;
(x) Family Self-Sufficiency Accounts; and
(xi) Federal tax refunds or refundable tax credits for a period of 12 months after receipt by the family.
(4) In cases where a trust fund has been established and the trust is not revocable by, or under the control of, any member of the family or household, the trust fund is not a family asset and the value of the trust is not included in the calculation of net family assets, so long as the fund continues to be held in a trust that is not revocable by, or under the control of, any member of the family or household. [ 88 FR 9656, Feb. 14, 2023; 88 FR 12560, Feb. 28, 2023]

47 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 41 ATTACHMENT B-1
Title 25 Section 6914 Gross Income Inclusions – For CalHome activities

(b) The following items shall not be considered as income:
(1) Casual, sporadic or irregular gift items;
(2) Amounts which are specifically for or in reimbursement of the cost of medical expenses;
(3) Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker’s compensation), capital gains and settlement for personal or property losses;
(4) Amounts of educational scholarships paid directly to the student or to the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment. Any amounts of such scholarships, or payments to veterans not used for the above purposes of which are available for a subsistence are to be included in income;
(5) The special pay to a serviceman head of a family away from home and exposed to hostile fire;
(6) Relocation payments made pursuant to federal, state, or local relocation law; (7) Foster child care payments;
(8) The value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which is an excess of the amount actually charged the eligible household;
(9) Payments received pursuant to participation of the following volunteer programs under the ACTION Agency:
(A) National Volunteer Antipoverty Programs which include VISTA, Service Learning Programs and Special Volunteer Programs.
(B) National Older American Volunteer Program for persons aged 60 and over which include Retired Senior Volunteer Programs, Foster Grandparent Program, older American Community Services Program, and National Volunteer Program to Assist Small Business Experience, Service Corps of Retired Executive (SCORE) and Active Corps of Executives (ACE).

48 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 42 ATTACHMENT C-1

HOME FUNDED LOAN LIMITS

MAXIMUM AFTER-REHABILITATION VALUES FOR VENTURA COUNTY
(HOME Homeownership Value Limits as of 9/1/2024)

COUNTY NAME One-Family
VENTURA $704,000

MAXIMUM PER-UNIT SUBSIDY LIMITS FOR STATE OF CALIFORNIA (Limits are effective 2/13/2024)

O-BDR 1-BDR 2-BDR 3-BDR 4-BDR
$181,488 $208,049 $252,994 $327,293 $359,263

HOUSEHOLD INCOME LIMITS FOR VENTURA COUNTY*
(Limits are effective 6/1/2025)

Number of Persons in Household
1 2 3 4 5 6 7 8
80% of
AMI
$83,850 $95,800 $107,800 $119,750 $129,350 $138,950 $148,500 $158,100

City will insert the limits for Ventura county, and will update the income limits annually as HCD provides new information. The link to the official, HCD- maintained Value, Subsidy, and Income limits is: State and Federal Income, Rent, and Loan/Value Limits | California Department of Housing and Community Development . For HOME limits, choose “CDBG, HOME, and NHTF/HHC Article I - Income, Value, Subsidy, and Rent Limits.”

CITY STANDARDS FOR BEDROOM AND BATHROOM ADDITIONS TO

ALLEVIATE OVERCROWDING

Maximum No.
of Persons in
the Household
Number of
Bedrooms
Number of
Bathrooms
1 SRO 1
1 0-BR 1
2 1-BR 1
4 2-BR 2
6 3-BR 2
8 4-BR 3
10 5-BR 3
12 6-BR 4

 Opposite sex children under 6 years of age may share a bedroom, up to 2 children per bedroom.
 Opposite-sex children 6 years of age and older may have their own bedroom. 49 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 43  Children shall be permitted a separate bedroom from their parents.  Same-sex children of any age may share a bedroom, up to 2 children per bedroom.  Adults not in a partner relationship may have their own bedroom.  4 or more people – a second bathroom may be added.
 8 or more people – a third bathroom may be added.

The chart above is used as a guide to overcrowding.
50 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 44 ATTACHMENT C-2

CALHOME-FUNDED LOAN LIMITS

MAXIMUM AFTER-REHABILITATION VALUES FOR VENTURA COUNTY

All assisted units shall have After-Rehabilitation Values at or below the current local median sales price of a single-family home. Recipients may use the most recent median sales price, by county, posted at the California Association of Realtors website at https://www.car.org/en/marketdata/data/countysalesactivity. However, if there is a significant price discrepancy, the City may request HCD approval to use different limits based on a local calculation of median values.

LOCAL MEDIAN SALES PRICE OF EXISTING SINGLE-FAMILY HOMES (as of January 2025)
County Median Sales Price
Ventura $875,000

CALHOME MAXIMUM LOAN AMOUNT

Rehabilitation Reconstruction*
$200,000 $250,000

*Reconstruction is a form of rehabilitation defined as the demolition and construction of a structure on the same site in substantially the same manner. Reconstruction is needed when the reconstruction costs are less than the cost to rehabilitate the existing substandard housing.

HCD 2025 INCOME LIMITS FOR CALHOME

ADJUSTED FOR FAMILY SIZE FOR VENTURA COUNTY
(Limits are effective 4/23/2025)

Income
Level
Household Size
1 2 3 4 5 6 7 8
80% $83,520 $95,800 $107,800 $119,750 $129,350 $138,950 $148,500 $158,100

The link to the official, HCD-maintained Value, Subsidy, and Income limits is:

State and Federal Income, Rent, and Loan/Value Limits | California Department of Housing and Community Development . For CalHome income limits, choose “Official State Income Limits”.
51 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 45 CITY STANDARDS FOR BEDROOM AND BATHROOM ADDITIONS TO ALLEVIATE

OVERCROWDING

Maximum No.
of Persons in
the Household
Number of
Bedrooms
Number of
Bathrooms
1 SRO 1
1 0-BR 1
2 1-BR 1
4 2-BR 2
6 3-BR 2
8 4-BR 3
10 5-BR 3
12 6-BR 4

 Opposite sex children under 6 years of age may share a bedroom, up to 2 children per bedroom.
 Opposite-sex children 6 years of age and older may have their own bedroom.  Children shall be permitted a separate bedroom from their parents.  Same-sex children of any age may share a bedroom, up to 2 children per bedroom.  Adults not in a partner relationship may have their own bedroom.  4 or more people – a second bathroom may be added.
 8 or more people – a third bathroom may be added.
52 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 46 ATTACHMENT D

HOME REHABILITATION MARKETING PLAN

SUMMARY
The City will continue its efforts to market the Home Rehabilitation Program in a manner that will reach all community members.

All marketing related to the Home Rehabilitation Program is publicized in both English and Spanish. All marketing materials include information identifying the City’s commitment to fair housing laws and affirmative marketing policy, and are widely distributed. Equal opportunity is emphasized in written materials and oral presentations.

A record is maintained by the City identifying what marketing materials are used, and when and where they are distributed.

Forms of marketing may include fliers, brochures, newspaper ads, articles and public service announcements. Fliers and brochures are distributed at local government buildings, other public buildings and through the mail, as well as to businesses that assist those not likely to apply without special outreach. Advertisements and articles are published in newspapers that are widely circulated within the community.

Established working relationships with local lending agencies also aid in informing the public by facilitating the distribution of informational fliers to households seeking financial assistance for repairs that are unable to obtain conventional financing.

Informational meetings are offered to potential participants to explain Program requirements. Often, minimal formal outreach efforts are required as the need for assistance generally exceeds funds available. However, marketing measures are actively performed in order to maintain a healthy waiting list.

Characteristics on all applicants and participants are collected and compared with the City’s demographics. Should the City find that there are underserved segments of the population, a plan to better serve them will be developed and implemented.

MARKETING FORMS
Fliers
Brochures
Newspaper Ads and Articles
Public Service Announcements
Public Informational Meetings

MARKETING VENUES
Local Government Buildings
Local Public Services Buildings
Private Businesses
Lending Agencies
Real Estate Offices
Newspaper
Radio
Mail
53 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 47 ATTACHMENT E

RESIDENTIAL ANTI-DISPLACEMENT AND TEMPORARY RELOCATION PLAN Version 2

The Housing and Community Development Act of 1974, as amended, and the National Affordable Housing Act of 1990, require all grantees of Community Development Block Grant (CDBG) funds or Home Investment Partnership (HOME) funds to follow a written Residential Anti-displacement and Relocation Assistance Plan (Plan) for any activities which could lead to displacement of occupants whose property is receiving funds from these or other federal funding source. Having been developed in response to both aforesaid federal legislations, this Plan is intended to inform the public of the compliance of the CITY OF SIMI VALLEY (City) with the requirements of federal regulations 24 CFR section 570.606 under state recipient requirements and Section 104(d) of the Housing and Community Development Act of 1974 and 24 CFR 92 of the HOME federal regulations. The Plan will outline reasonable steps, which the City will take to minimize displacement and ensure compliance with all applicable federal and state relocation requirements. The City’s governing body has adopted this plan via a formal resolution.

This Plan will affect rehabilitation activities funded by the U.S. Department of Housing and Urban Development (HUD) under the following program titles: HOME, CDBG, Urban Development Action Grant (UDAG), Special Purpose Grants, Section 108 Loan Guarantee Program, and such other grants as HUD may designate as applicable, which take place within the City’s jurisdiction limits.

The City will provide permanent relocation benefits to all eligible “displaced” households in owner-occupied units which are permanently displaced by the home rehabilitation program (See Section E below.) . In addition, the City will replace all eligible occupied and vacant occupiable low-income group dwelling units demolished or converted to a use other than low-income group housing as a direct result of rehabilitation activities. This applies to all units assisted with funds provided under the Housing and Community Development Act of 1974, as amended, and as described in the Federal Regulations 24 CFR section 570.496(a), Relocation, Displacement and Acquisition: Final Rule dated July 18, 1990 (Section 104(d)) and 49 CFR Part 24, Uniform Relocation Assistance (URA) and Real Property Acquisition Regulations Final Rule and Notice (URA) dated March 2, 1989.

All City programs/projects will be implemented in ways consistent with the City’s commitment to Fair Housing. Participants will not be discriminated against on the basis of race, color, religion, age, ancestry, national origin, sex, familial status, or handicap. The City will provide equal relocation assistance available 1) to each targeted income group household displaced by the demolition or rehabilitation of housing or by the conversion of a targeted income group dwelling to another use as a direct result of assisted activities; and 2) to each separate class of targeted income group persons temporarily relocated as a direct result of activities funded by HUD programs.
54 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 48 A. Minimizing Permanent Displacement and Temporary Relocation Resulting from Home Rehabilitation or Reconstruction Activities
Consistent with the goals and objectives of activities assisted under the Act, the City will take the following steps to minimize the displacement of persons from their homes during home rehabilitation or reconstruction funded by HUD programs:

1. Provide proper notices with counseling and referral services to all tenants so that they understand their relocation rights and receive the proper benefits.

When necessary assist permanently displaced persons to find alternate housing in the neighborhood.

2. Stage rehabilitation of assisted households to allow owner-occupants and/or tenants to remain during minor rehabilitation.

3. Encourage owner investors to temporarily relocate tenants to other available safe and sanitary vacant units on the project site area during the course of rehabilitation or pay expenses on behalf of replaced tenants.

4. Work with area landlords, real estate brokers, and/or hotel/motel managements to locate vacancies for households facing temporary relocation.

5. When necessary, use public funds, such as CDBG funds, to pay moving costs and provide relocation/displacement payments to households permanently displaced by assisted activities.

B. Lead Based Paint Mitigation Which Causes Temporary Relocation:

On September 15, 2000, the Final Rule for Lead Based Paint Hazard Control went into effect. Among other things, it requires that federally-funded rehabilitation must use safe work practices so that occupants and workers can be protected from lead hazards. At no time should the tenant-occupant(s) be present in work areas or designated adjacent areas while LHC activities are taking place in any dwelling unit interior, common area, or exterior. As such, occupants may not be allowed to remain in their units during the time that lead-based paint hazards are being created or treated. Once work that causes lead hazards has been completed, and the unit passes clearance, the occupants can return. The tenant-occupants may not reoccupy a work area or adjacent area until post-lead hazard reduction clearance standards have been achieved and verified with laboratory results. The final rule allows for certain exceptions: programs:

1. The work will not disturb lead-based paint, or create dust-lead or soil-lead hazard; or

2. The work is on exterior only and openings are sealed to prevent dust from entering the home, the work area is cleaned after the work is completed, and 55 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 49 the residents have alternative lead free entry; or

3. The interior work will be completed in one period of less than 8-daytime hours and the work site is contained to prevent the release of dust into other areas of the home; or

4. The interior work will be completed within five (5) calendar days, the work site is contained to prevent the release of dust, the worksite and areas within 10 feet of the worksite are cleaned at the end of each day to remove any visible dust and debris, and the residents have safe access to kitchen and bath and bedrooms.

If temporary relocation benefits are not provided because the City believes that the project meets one of the above criteria, then proper documentation must be provided in the rehabilitation project file to show compliance. It is up to the City to ensure that the owner occupant or tenant in the project does not get impacted by lead paint mitigation efforts. In most cases where lead paint mitigation is taking place, occupants (tenants or owners) will be strongly encouraged to relocate even for just a few days until a final lead clearance can be issued by a certified lead based paint assessor. Occupants who are temporarily relocated because of lead based paint mitigation are entitled to the same relocation benefits as those who are relocated because of substantial rehabilitation or reconstruction activities.

C. Temporary Relocation of Owner-Occupants:

Owner occupants are not allowed to stay in units which are hazardous environments during lead-based paint mitigation. When their home is having lead based paint mitigation work done which will not make it safe to live in, then they are eligible for temporary relocation benefits up to $3,000, which will be provided as a grant. In the same way, a unit requiring substantial rehabilitation (with or without lead based paint mitigation) which will not allow the family to access a bath or kitchen facility, or if the unit is being demolished and reconstructed, then the family will be eligible for temporary relocation benefits up to $3,000, which will be provided as a grant. . In no case shall the grant for temporary relocation exceed $3,000 for any one owner-occupant.

Owner occupants will be encouraged to move in with family or friends during the course of rehabilitation, since they are voluntarily participating in the Program.

The home rehabilitation loan specialist and/or the rehabilitation construction specialist will complete a temporary relocation benefits form (See Appendix C) to document that the owner occupant understands that they must relocate during the course of construction and what benefits they wish to be reimbursed for as part of their relocation.

D. Temporary Relocation of Residential Tenants:

If continued occupancy during rehabilitation is judged to constitute a substantial danger to health and safety of the tenant or the public or is otherwise undesirable because of the nature of the project, the tenant may be required to relocate 56 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 50 temporarily. The contract administrator or rehabilitation specialist will make determination of the need for temporary relocation. The temporary relocation period will not exceed 180 days. All conditions of temporary relocation will be reasonable. Any tenant required to relocate temporarily will be helped to find another place to live which is safe, sanitary and of comparable value and they have the first right to move back into the original unit being rehabilitated at the same rent or lower. He or she may move in with family and friends and still receive full or partial temporary assistance based on eligible costs incurred. The home rehabilitation loan specialist and/or the rehabilitation specialist will ensure that each tenant-occupied unit under the Program will receive a General Information Notice (GIN) (as soon as possible after a loan application is received) and the tenant will receive a Notice of Non-displacement (after loan approval), and each tenant-occupied unit will have a temporary relocation benefits form completed for them. (See Appendix C). These notices will document that each tenant understands what their relocation rights are, and if they must relocate during the course of construction, that they receive the proper counseling and temporary relocation benefits.

A tenant receiving temporary relocation may receive the following:

1. Increased housing costs (e.g. rent increase, security deposits) and

2. Payment for moving and related expenses, as follows:

a. Transportation of the displaced persons and personal property within 50 miles, unless the grantee determines that farther relocation is justified;

b. Packing, crating, unpacking, and uncrating of personal property;

c. Storage of personal property, not to exceed 12 months, unless the grantee determines that a longer period is necessary;

d. Disconnection, dismantling, removing, reassembling, and reinstalling relocated household appliances and other personal property;

e. Insurance for the replacement value of personal property in connection with the move and necessary storage;

f. The replacement value of property lost, stolen or damaged in the process of moving (not through the fault of the displaced person, his or her agent, or employee) where insurance covering such loss, theft or damage is not reasonably available;

g. Reasonable and necessary costs of security deposits required to rent the replacement dwelling;

h. Any costs of credit checks required to rent the replacement dwelling;

57 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 51 i. Other moving-related expenses as the grantee determines to be reasonable and necessary, except the following ineligible expenses:
1) Interest on a loan to cover moving expenses; or
2) Personal injury; or
3) Any legal fee or other cost for preparing a claim for a relocation payment or for representing the claimant before the Grantee; or 4) Costs for storage of personal property on real property already owned or leased by the displaced person before the initiation of negotiations.

E. Rehabilitation Activities Requiring Permanent Displacement The City’s Home Rehabilitation Program will not typically trigger permanent displacement and permanent displacement activities fall outside of the scope of this plan. If a case of permanent displacement is encountered, then the staff responsible for the Home Rehabilitation Program will consult with City’s legal counsel to decide if they have the capacity to conduct the permanent displacement activity. If local staff does not have the capacity, then a professional relocation consultant will be hired to do the counseling and benefit determination and implementation. If local staff does wish to do the permanent displacement activity then they will consult and follow the HUD Relocation Handbook 1378.

F. Rehabilitation Which Triggers Replacement Housing
If the City’s Home Rehabilitation Program assists a property where one or more units are eliminated then under Section 104 (d) of the Housing and Community Act of 1974, as amended applies and the City is required to replace those lost units. An example of this would be a duplex unit which is converted into a single family unit. In all cases where rehabilitation activities will reduce the number of housing units in the jurisdiction, then the City must document that any lost units are replaced and any occupants of reduced units are given permanent relocation benefits. (This does not apply to reconstruction or replacement housing done under a rehabilitation program where the existing unit(s) is demolished and replaced with a structure equal in size without in loss number of units or bedrooms.)

Replacement housing will be provided within three years after the commencement of the demolition or conversion. Before entering into a contract committing the City to provide funds for an activity that will directly result in such demolition or conversion, the City will make this activity public (through a noticed public hearing and/or publication in a newspaper of general circulation) and submit to the California Department of Housing and Community Development or the appropriate federal authority the following information in writing:

1. A description of the proposed assisted activity;

2. The location on a map and the approximate number of dwelling units by size (number of bedrooms) that will be demolished or converted to a use other than as targeted income group dwelling units as a direct result of the 58 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 52 assisted activity;

3. A time schedule for the commencement and completion of the demolition or conversion;

4. The location on a map and the approximate number of dwelling units by size (number of bedrooms) that will be provided as replacement dwelling units;

5. The source of funding and a time schedule for the provision of the replacement dwelling units;

6. The basis for concluding that each replacement dwelling unit will remain a targeted income group dwelling unit for at least 10 years from the date of initial occupancy; and,

7. Information demonstrating that any proposed replacement of dwelling units with smaller dwelling units (e.g., a two-bedroom unit with two one- bedroom units) is consistent with the housing needs of targeted income group households in the jurisdiction.

The Program Operator for the City is responsible for tracking the replacement of housing and ensuring that it is provided within the required period. The City is responsible for ensuring requirements are met for notification and provision of relocation assistance, as described in Section 570.606, to any targeted income group displaced by the demolition of any dwelling unit or the conversion of a targeted income group dwelling unit to another use in connection with an assisted activity.

G. Record Keeping and Relocation Disclosures/Notifications The City will maintain records of occupants of federally funded rehabilitated, reconstructed or demolished property from the start to completion of the project to demonstrate compliance with section 104(d), URA and applicable program regulations. Each rehabilitation project, which dictates temporary or permanent or replacement activities, will have a project description and documentation of assistance provided. (See sample forms in HUD Relocation Handbook 1378, Chapter 1, Appendix 11, form HUD-40054)

Appropriate advisory services will include reasonable advance written notice of (a) the date and approximate duration of the temporary relocation; (b) the address of the suitable, decent, safe, and sanitary dwelling to be made available for the temporary period; (c) the terms and conditions under which the tenant may lease and occupy a suitable, decent, safe, and sanitary dwelling.

Notices shall be written in plain, understandable primary language of the persons involved. Persons who are unable to read and understand the notice (e.g. illiterate, foreign language, or impaired vision or other disability) will be provided with appropriate translation/communication. Each notice will indicate the name and 59 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 53 telephone number of a person who may be contacted for answers to questions or other needed help. The notices and process below is for only temporary relocation. If permanent relocation is involved then other sets of notice and noticing process and relocation benefits must be applied (See HUD relocation handbook 1378 for those forms and procedures). The Temporary Relocation Advisory Notices to be provided are as follows:

1. General Information Notice: As soon as feasible when an owner investor is applying for Federal financing for rehabilitation, reconstruction, or demolition, the tenant of a housing unit will be mailed or hand delivered a General Information Notice that the project has been proposed and that the tenant will be able to occupy his or her present house upon completion of rehabilitation.

The tenant will be informed that the rent after rehabilitation will not exceed current rent or 30 percent of his or her average monthly gross household income. The tenant will be informed that if he or she is required to move temporarily so that the rehabilitation can be completed, suitable housing will be made available and he or she will be reimbursed for all reasonable extra expenses. The tenant will be cautioned that he or she will not be provided relocation assistance if he or she decides to move for personal reasons. See Appendix A for sample notice to be delivered personally or by certified mail.

2. Notice of Non Displacement: As soon as feasible when the rehabilitation application has been approved, the tenant will be informed that they will not be permanently displaced and that they are eligible for temporary relocation benefits because of lead-based paint mitigation or substantial rehabilitation, or reconstruction of their unit. The tenant will also again be cautioned not to move for personal reasons during rehabilitation, or risk losing relocation assistance. See Appendix B for sample notice to be delivered personally or by certified mail.

3. Disclosure to Occupants of Temporary Relocation Benefits: This form is completed to document that the City is following its adopted temporary relocation plan for owner-occupants and tenants. See Appendix C for a copy of the disclosure form.

4. Other Relocation/Displacement Notices: The above three notices are required for temporary relocation. If the City is attempting to provide permanent displacement benefits, then there are a number of other forms which are required. Staff will consult HUD’s Relocation Handbook 1378 and ensure that all the proper notices are provided for persons who are permanently displaced as a result of home rehabilitation activities funded by federal programs.
60 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 54 APPENDIX A

Dear ,

On (date) , (property owner) submitted an application to the for financial assistance to rehabilitate the building which you occupy at (address) .

This notice is to inform you that, if the assistance is provided and the building is rehabilitated, you will not be displaced. Therefore, we urge you not to move anywhere at this time. (If you do elect to move for reasons of your choice, you will not be provided relocation assistance.)

If the application is approved and Federal assistance is provided for the rehabilitation, you will be able to lease and occupy your present apartment (or another suitable, decent, safe and sanitary apartment in the same building) upon completion of the rehabilitation. Of course, you must comply with standard lease terms and conditions.

After the rehabilitation, your initial rent, including the estimated average monthly utility costs, will not exceed the greater of (a) your current rent/average utility costs, or (b) 30 percent of your gross household income. If you must move temporarily so that the rehabilitation can be completed, suitable housing will be made available to you for the temporary period, and you will be reimbursed for all reasonable extra expenses, including all moving costs and any increase in housing costs.

Again, we urge you not to move. If the project is approved, you can be sure that we will make every effort to accommodate your needs. Because Federal assistance would be involved, you would be protected by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended.

This letter is important and should be retained. You will be contacted soon. In the meantime, if you have any questions about our plans, please contact (name) , (title) , at (telephone number),
(address) .

Sincerely,

(name)
(title)

61 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 55 APPENDIX B

(date)

Dear :

On (date) , we notified you that the owner of your building had applied for assistance to make extensive repairs to the building. On (date) , the owner's request was approved, and the repairs will begin soon.

This is a notice of non-displacement. You will not be required to move permanently as a result of the rehabilitation. This notice guarantees you the following:

1. You will be able to lease and occupy your present apartment [or another suitable, decent, safe and sanitary apartment in the same building/complex] upon completion of the rehabilitation. Your monthly rent will remain until after construction is completed. If increased after construction is done, your new rent and estimated average utility costs will not exceed local fair market rents for your community. Of course, you must comply with all the other reasonable terms and conditions of your lease.

2. If you must move temporarily so that the repairs can be completed, you will be reimbursed for all of your extra expenses, including the cost of moving to and from the temporarily occupied unit and any additional housing costs. The temporary unit will be decent, safe and sanitary, and all other conditions of the temporary move will be reasonable.

Since you will have the opportunity to occupy a newly rehabilitated apartment, I urge you not to move. (If you do elect to move for your own reasons, you will not receive any relocation assistance.) We will make every effort to accommodate your needs.

Because Federal assistance is involved, you are protected by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended.

If you have any questions, please contact (name) , (title), at (phone #) , (address) . Remember; do not move before we have a chance to discuss your eligibility for assistance. This letter is important to you and should be retained.

Sincerely,

(name and title)
62 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 56 APPENDIX C

DISCLOSURE TO OCCUPANT OF TEMPORARY RELOCATION BENEFITS Top to be completed at time of loan application submittal or Home Visit

Property Address:
__ Rental Unit __Owner-Occupied Unit

The rehabilitation loan specialist working on behalf of the City/County of has explained the temporary relocation services and benefits available under the current rehabilitation program relocation plan.

I/we have been advised that the City/County of rehabilitation construction specialist will inform me if I need to be temporarily relocated and will to assist me with scheduling any necessary moves and answer any questions about assistance as needed.

Acknowledged:

Occupant Signature Date Occupant Signature Date

Complete this at time of acceptance of Work Write Up with initials by occupant

The rehabilitation construction specialist for the City/County of has explained the Rehabilitation Scope of Work for our house and I/we agree that it will:
____ Not require I/we to be relocated. (If initialed then STOP here and sign bottom.) ____ Yes, I/we need to be temporarily relocated. (Complete rest of form if initialed.)

Start date and duration of relocation:
____ Starting on or about we will move for all or part of the rehabilitation project.

Approximate length of temporary relocation: Number of days.

For temporary relocation, I/We elect to (check all that apply):
____ Relocate with friends and family.
____ Relocate into a suitable temporary housing unit identified by rehab specialist. ____ Relocate furnishings only into a temporary storage unit.

____ I/We have been told what our relocation benefits are and elect Not to be reimbursed for any eligible relocation expenses.

____ I/We have been told what our relocation benefits are and want to be reimbursed for:

By signing, occupant(s) acknowledge receipt of copy of this form:

Occupant Signature Date Occupant Signature Date
63 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 57 ATTACHMENT F

LOAN SERVICING POLICIES AND PROCEDURES

FOR THE CITY OF SIMI VALLEY

The City of Simi Valley, hereafter called “City,” has adopted these policies and procedures in order to preserve its financial interest in properties, whose “Borrowers” have been assisted with public funds. The City will to the greatest extent possible follow these policies and procedures, but each loan will be evaluated and handled on a case-by-case basis. The City has formulated this document to comply with state and federal regulations regarding the use of these public funds and any property restrictions, which are associated with them.

The policies and procedures are broken down into the following areas: 1) underwriting criteria; 2) making voluntary payments on a loan’s principal and interest; 3) required payment of property taxes and insurance; 4) loan documentation; 5) construction contracts; 6) required Request for Notice of Default on all second mortgages; 7) loans with annual occupancy restrictions and certifications; 8) required noticing and limitations on any changes in title or use of property; 9) required noticing and process for requesting a subordination during a refinance; 10) processing of foreclosure in case of default on the loan.

Any loan under the program shall be a non-recourse loan, meaning that the loan is secured by the property being rehabbed as collateral, but if the Borrower defaults, the City cannot seize any other real or personal property of the borrower.

For all properties assisted, loans may be made that result in a combined loan-to- value ratio of up to 80%. Property value will be established by the Program Operator using estimates of value based on the sale prices of at least three (3) comparable properties (of similar size and period of construction), sold within the last six (6) months (within one year of the assistance date, which is the date the promissory note is signed), and located within relative proximity of the subject property. When the “Estimates of Value” method cannot be used, the Property value will be prepared by a State licensed or certified real estate appraiser.

1. Criteria

The following underwriting criteria will be used to evaluate each application:

 Loan applicants must be the legal owner of the real property and must have the authority to encumber the property.

 A preliminary title report shall be obtained for all real estate loans.

 Owner-occupants receiving deferred payment loans are exempt from the credit history requirements of this section. A consumer credit report will be obtained for all other loan applicants. Key factors to be considered in reviewing the credit 64 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 58 history are the borrower’s ability to manage financial affairs and budget for debt and necessities.

 At the discretion of the Loan Review Committee, a loan may be approved despite isolated instances of slow payments or even more significant past problems, based upon careful analysis of the contributing causes and circumstances. The owner’s demonstrated ability to reestablish a good credit standing, to maintain a good repayment pattern on housing-related debts, and to build equity in the property are all factors to be considered.

 Unreported income, outstanding judgments, unreported property liens and poor credit ratings indicate that an applicant is a poor risk for the loan program.

Unreported income is fraudulent and will result in denial of a loan.

 Property taxes must be current in order for an applicant to be considered for a loan and must be paid when due during the life of the loan.

 Property insurance, including hazard (and flood, if applicable), will be required during the life of the loan. If an applicant does not have sufficient insurance to cover the amount of the City’s loan and all senior liens or the value of the improvements whichever is less, or if the policy has lapsed, deficiencies must be corrected as a condition of loan approval. The City shall be named on all insurance policies as mortgagee/loss payee for the full term of the loan.

2. Loan Repayments:

Loans under the program shall be 15-year or 30-year deferred payment loans, with no interest accruing for the first half of the loan, and then interest will accrue as simple interest at the rate of 2% per annum. For Notes which are deferred payment loans, the City must accept voluntary payments on the loan. Loan payments will first be credited to accrued interest then principal. The Borrower may repay the loan balance at any time with no penalty.

Deferred-Payment Loan Collections

The borrower shall make full repayment of the loan when due directly to the City or loan servicing agent as specified by the Program Operator. A single loan set-up fee may be collected upon execution of the loan documents.

a. Recipients of deferred-payment loans will be allowed to make periodic prepayments directly to the City in order to reduce the amount of their indebtedness.

b. Loan Due and Payable in Full

Upon the following events, the loan may be due and payable in full (subject to any limitations provided by the Garn-St. Germain Depository Institutions Act of 1982 (12 65 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 59 U.S.C. § 1701j-3) (“Garn-St. Germain Act”):

 The Borrower dies, unless the rehabilitation loan is assumed by another eligible Borrower;
 The unit or any interest therein is sold, conveyed, or transferred;  Property taxes, mortgage, or space rent becomes delinquent;  The Borrower no longer occupies the unit as his or her principal residence for reasons other than medical treatment, disability, education, family matters or similar situations, subject to the prior written approval of the City. All such absences shall require demonstration of a temporary alternate residence;  The Borrower is in default on any other Home Rehabilitation Program requirement;
 Hazard, flood, and other insurance is not maintained with the City as loss payee; or
 Borrower fails to keep all registration fees, levies and/or taxes current.

3. Payment of Property Taxes and Insurance:

As part of keeping the loan from going into default, Borrower must maintain property (hazard/flood) insurance coverage naming the City as loss payee. If Borrower fails to maintain the necessary insurance, the City may take out force placed insurance to cover the property while the Borrower puts a new insurance policy in place. All costs for installing the necessary insurance will be added to the loan balance at time of installation of Borrower’s new insurance.

When a property is in a 100-year floodplain, the Borrower will be required to maintain National Flood Insurance Program (NFIP) flood insurance in an amount adequate to secure the Program loan and all other encumbrances.

This policy must designate the Sponsor as Loss Payee, and a binder shall be provided to the Sponsor and maintained in the borrower’s file.

Property taxes must be kept current during the term of the loan. If the Borrower fails to maintain payment of property taxes, then the City may pay the taxes current and add the balance of the tax payment plus any penalties to the balance of the loan (not permissible when funded with HOME).

Wherever possible, the City encourages Borrower to have impound accounts set up with their first mortgagee wherein they pay their taxes and insurance as part of their monthly mortgage payment.

4. Loan Documents

After selection of the contractor by the property owner, the Program Operator will prepare loan documents including the Fair Lending Notice, Promissory Note, Deed of Trust, Truth-in-Lending Disclosure, Notice of Right of Rescission and Request(s) for Notice of Default and Sale.

a. All legal owner-occupants of the real property shall execute all loan 66 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 60 documents (collectively, the “Borrower”).
b. Occupant spouses and registered domestic partners who are not listed as owner on title to the property shall sign the loan documents unless title is clearly held as the owner’s sole and separate property. c. Non-occupants who are listed on title to the property shall execute the Deed of Trust.

5. Construction Contract

The City will coordinate contracting for all work funded through the rehabilitation loan, manage the contracts, inspect the work, and approve and disburse payments.

a. The contract for the rehabilitation will be executed by the owner and the contractor. The Program Operator will provide the contract form. b. The Program Operator shall assist the owner in the control, supervision, and direction of the work to be performed under the contract. c. Changes to the services to be provided under the contract and amounts to be paid pursuant to the contract may be made only by written change order by and between the owner and the contractor and only upon written approval of the City.
d. During the period of performance of the contract, the Borrower shall not enter into any additional agreements with the contractor, whether written or verbal, without the written approval of the City.
e. City staff will inspect each project during construction to assure that work is progressing in a timely manner and that it is being carried out in accordance with the scope of work.
i. Phase inspections will be made by the Program Operator prior to the disbursement of payments to the contractor. Any work requiring a building or other permit must also have written approval by the State, County and/or city building inspector.
ii. The owner must accept all work before payment may be authorized, except payment awarded by arbitration or legal judgment. f. Upon satisfactory completion of all work called out in the contract, the property owner shall sign the Notice of Completion which shall be recorded with the Ventura County Recorder’s Office.

6. Required Request for Notice of Default:

When the Borrower’s loan is in second position behind an existing first mortgage, it is the City's policy to prepare and record a "Request for Notice of Default" for the senior lien in front of City’s loan. This document requires the senior lienholder listed in the notice to notify the City of initiation of a foreclosure action. The City will then have time to contact the Borrower and assist them in bringing the first loan current.

The City can also monitor the foreclosure process and go through the necessary analysis to determine if the loan can be made whole or preserved. The lowest lien position the City will hold is second position. Loans will not be granted by the City if there are already two lienholders.
67 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 61 7. Annual Occupancy Restrictions and Certifications:

On owner-occupant loans the City may require that Borrowers submit utility bills and/or other documentation annually to prove occupancy during the term of the loan.

These loan terms are incorporated in the original note and deed of trust. The annual occupancy verification will occur on an annual basis with noticing of the required submissions at least 45 calendar days prior to the submission deadline.

8. Required Noticing and Restrictions on Any Changes of Title or Occupancy:

In all cases where there is a change in title or occupancy or use, the Borrower must notify the City in writing of any change. City and Borrower will work together to ensure the property is kept in compliance with the original Program terms and conditions such that it remains available as an affordable home for low-income families. These types of changes are typical when Borrowers do estate planning (adding a relative to title) or if a Borrower dies and property is transferred to heirs or when the property is sold or transferred as part of a business transaction. In some cases the Borrower may move and turn the property into a rental unit without notifying the City. Changes in title or occupancy must be in keeping with the objective of benefit to low-income households (below eighty-percent (80%) of AMI).

Change from owner-occupant to owner-occupant occurs at a sale at which time the loan is due and payable.

If a transfer of the property occurs through inheritance, the heir may be provided the opportunity to assume the loan at an interest rate based on household size and household income, provided the heir is eligible pursuant to the Garn-St. Germain Act.

Change from owner-occupant to owner-investor occurs when an owner-occupant decides to move out and rent the assisted property, or if the property is sold to an investor. If the owner converts any assisted unit from owner-occupied to rental, the loan is due in full.

Conversion to use other than residential use is not allowable where the full use of the property is changed from residential to commercial or other. If the use of the property is converted to a fully non-residential use, the loan balance is due and payable. In some cases, Borrowers may request that the City allow for a partial conversion where some of the residence is used for a business but the household still resides in the property. Partial conversions can be allowed if it is reviewed and approved by any and all agencies required by local statute.

9. Requests for Subordinations:

When a Borrower wishes to refinance the property, they must request a subordination request to the City. The City will subordinate their loan only when 68 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 62 there is no “cash out” as part of the refinance. Cash out means there are no additional charges on the transaction above loan and escrow closing fees. There can be no third-party debt payoffs or additional encumbrance on the property above traditional refinance transaction costs. Furthermore, the refinance should lower the housing cost of the household with a lower interest rate and/or extension of payment term thereby lowering the payment and the total indebtedness on the property should not exceed the current market value.

Upon receiving the proper documentation from the refinance lender, the request will be considered by the Loan Review Committee for review and approval. Upon approval, the escrow company will be required to record the proper subordination documents and provide proof of recordation to the City.

10. Process for Loan Foreclosure:

Upon any condition of loan default: 1) non-payment; 2) lack of insurance or property tax payment; 3) change in title or use without approval; 4) the borrower no longer occupies the unit as their principal residence without the prior written approval of the City; 5) default on any of the terms of the Promissory Note, Deed of Trust, Mobile Home Security Agreement, or any other loan document; or 6) default on senior loans, the City will send out a letter to the Borrower notifying them of the default situation. If the default situation continues, the City may start a formal process of foreclosure.

The City may contract with a trust deed service company to carry out a Notice of Default and Sale on behalf of the City or may carry out the foreclosure process in- house.

When a senior lienholder starts a foreclosure process and the City is notified via a Request for Notice of Default, the City, who is the junior lienholder, may cancel the foreclosure proceedings by "reinstating" the senior lienholder. The reinstatement amount or payoff amount must be obtained by contacting the senior lienholder. This amount will include all delinquent payments, late charges and fees to date. City must confer with Borrower to determine if, upon paying the senior lienholder current, the Borrower can provide future payments. If this is the case, then the City may cure the foreclosure and add the costs to the balance of the loan with a Notice of Additional Advance on the existing note. HOME funds may not be used for this purpose, however.

If the City determines, based on information on the reinstatement amount and status of Borrower, that bringing the loan current will not preserve the loan, then staff must determine if it is cost effective to protect their position by paying off the senior lienholder in total and restructure the debt such that the unit is made affordable to the Borrower. If the City does not have sufficient funds to pay the senior lienholder in full, then they may choose to cure the senior lienholder and foreclose on the property themselves. As long as there is sufficient value in the property, the City can afford to pay for the foreclosure process and pay off the senior lienholder and retain 69 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 63 some or all of their investment.

If the City decides to reinstate, the senior lienholder will accept the amount to reinstate the loan up until five (5) days prior to the set "foreclosure sale date." This "foreclosure sale date" usually occurs about four (4) to six (6) months from the date of recording of the "Notice of Default." If the City fails to reinstate the senior lienholder before five (5) days prior to the foreclosure sale date, the senior lienholder would then require a full pay off of the balance, plus costs, to cancel foreclosure. If the City determines the reinstatement and maintenance of the property not to be cost effective and allows the senior lienholder to complete foreclosure, the City's lien may be eliminated due to insufficient sales proceeds.

a) City as Senior Lienholder

When the City is first position as a senior lienholder, active collection efforts will begin on any loan that is 31 or more days in arrears. Attempts will be made to assist the homeowner in bringing and keeping the loan current. These attempts will be conveyed in an increasingly urgent manner until loan payments have reached 90 days in arrears, at which time the City may consider foreclosure. City’s staff will consider the following factors before initiating foreclosure:

i) Can the loan be cured and can the rates and terms be adjusted to allow for affordable payments such that foreclosure is not necessary?

ii) Can the Borrower refinance with a private lender and pay off the City?

iii) Can the Borrower sell the property and pay off the City?

iv) Does the balance warrant foreclosure? (If the balance is under $5,000, the expense to foreclose may not be worth pursuing.)

v) Will the sales price of home "as is" cover the principal balance owing, necessary advances, (maintain hazard insurance, maintain or bring current delinquent property taxes, monthly yard maintenance, periodic inspections of property to prevent vandalism, etc.) foreclosure, and marketing costs?

If the balance is substantial and all of the above factors have been considered, the City may opt to initiate foreclosure. The Borrower must receive, by certified mail, a thirty-day notification of foreclosure initiation. This notification must include the exact amount of funds to be remitted to the City to prevent foreclosure (such as, funds to bring a delinquent BMIR current or pay off a DPL).

At the end of thirty days, the City should contact a reputable foreclosure service or local title company to prepare and record foreclosure documents and make all necessary notifications to the owner and junior lienholders. The service will advise the City of all required documentation to initiate foreclosure (Note and Deed of Trust usually) and funds required from the owner to cancel foreclosure proceedings. The 70 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 64 service will keep the City informed of the progress of the foreclosure proceedings.

When the process is completed, and the property has "reverted to the beneficiary" at the foreclosure sale, the City could sell the home themselves under a homebuyer program or use it for an affordable rental property managed by a local housing authority or use it for transitional housing facility or other eligible use. The City could contract with a local real estate broker to list and sell the home and use those funds for Program income-eligible uses.

b) City as Junior Lienholder

It is the City’s policy to prepare and record a “Request for Notice” on all junior liens (any lien after the first position) placed on properties financed by a loan.

This document requires any senior lienholder to notify the City of initiation (recordation of a “Notice of Default”) of a foreclosure only. This is to alert the junior lienholder that they are to monitor the foreclosure with the senior lienholder.

The junior lienholder may cancel the foreclosure proceedings by “reinstating” the senior lienholder. The reinstatement amount must be obtained by contacting the senior lienholder. This amount will include all delinquent payments, late charges, advances (hazard insurance premiums, property taxes, property protection costs, etc.), and foreclosure costs (fees for legal counsel, recordings, certified mail, etc.)

Once the City has the information on the reinstatement amount, staff must then determine if it is cost effective to protect their position by reinstating the senior lienholder, keeping them current by submitting a monthly payment thereafter, foreclosing on the property possibly resulting in owning the property at the end of foreclosure, protecting the property against vandalism, and paying marketing costs (readying the home for marketing, paying for yard maintenance, paying a real estate broker a sales commission).

If the City decides to reinstate, the senior lienholder will accept the amount to reinstate the loan up until five (5) days prior to the set “foreclosure sale date.” This “foreclosure sale date” usually occurs about four (4) to six (6) months from the date of recording of the “Notice of Default.” If the City fails to reinstate the senior lienholder before five (5) days prior to the foreclosure sale date, the senior lienholder would then require a full pay off of the balance, plus costs, to cancel foreclosure. If the City determines the reinstatement and maintenance of the property not to be cost effective and allows the senior lienholder to complete foreclosure, the City’s lien may be eliminated due to insufficient sales proceeds.
71 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 65 ATTACHMENT G

STATEMENT OF OCCUPANCY

CITY OF SIMI VALLEY

I/we declare as
follows:
(Please Print Occupant’s Name(s))

That I/we am/are currently occupying as my/our principal place of residence the real property commonly known as:

(Address)

(City, State, Zip code)

Daytime Phone Number:

Executed on______________________, 20____, at ___________________, CA (Date) (City)

I/we declare under penalty of perjury that the foregoing is true and correct.

Signature(s) of all occupants:

Occupant:
_______________________________________________________________

72 RES. NO. 2025-20
City of Simi Valley Home Rehabilitation Program Guidelines 66 ATTACHMENT H

LEAD-BASED PAINT

VISUAL ASSESSMENT, NOTICE OF PRESUMPTION, AND HAZARD REDUCTION FORM Section 1: Background Information
Property Address: No LBP found or LBP exempt 
Select one: Visual Assessment  Presumption  Hazard Reduction  Section 2: Visual Assessment. Fill out Sections 1, 2, and 6. If paint stabilization is performed, also fill out Sections 4 and 5 after the work is completed.

Visual Assessment Date: Report Date:

Check if no deteriorated paint found 
Attachment A: Summary where deteriorated paint was found. For multi-family housing, list at least the housing unit numbers and common areas and building components (including type of room or space, and the material underneath the paint).

Section 3: Notice of Presumption. Fill out Sections 1, 3, 5, and 6. Provide to occupant w/in 15 days of presumption.

Date of Presumption Notice:

Lead-based paint is presumed to be present  and/or Lead-based paint hazards are presumed to be present 
Attachment B: Summary of Presumption: For multi-family housing, list at least the housing unit numbers and common areas, bare soil locations, dust-lead location, and or building components (including type of room or space, and the materials underneath the paint) of lead-based paint and/or hazards presumed to be present.

Section 4: Notice of Lead-Based Paint Hazard Reduction Activity. Fill out Sections 1, 4, 5, and

6. Provide to occupant w/in 15 days of after work completed.

Date of Hazard Reduction Notice:

Initial Hazard Reduction Notice? Yes  No  Start & Completion Dates:

If “No”, dates of previous Hazard Reduction Activity Notices:

Attachment C: Activity locations and types. For multi-family housing, list at least the housing unit numbers and common areas (for multifamily housing), bare soil locations, dust–lead locations, and/or building components (including type of room or space, and the material underneath the paint), and the types of lead-based paint hazard reduction activities performed at the location listed.

Attachment D: Location of building components with lead-based paint remaining in the rooms, spaces or areas where activities were conducted.

Attachment E: Attach clearance report(s), using DHS form 8552 (and 8551 for abatement activities) Section 5: Resident Receipt of Notice for Presumption or Lead-Based Paint Hazard Reduction Activity and Acknowledgement of Receipt of pamphlet Protection Your Family from Lead in Your Home.

Printed Name: Signature: Date:

Section 6: Contact Information Organization:

Contact Name: Contact Signature:

Date: Address: Phone:

73 RES. NO. 2025-20

Simi Valley City CouncilJune 23, 2025

Simi Valley City Council
June 23, 2025