Yuba City City Council
September 20, 2022

If you need assistance in order to attend the City Council meeting, or if you require auxiliary aids or services, e.g., hearing aids or signing services to make a presentation to the City Council, the City is happy to assist you. Please contact City offices at (530) 822-4817 at least 72 hours in advance so such aids or services can be arranged. City Hall TTY: 530-822-4732 AGENDA
SEPTEMBER 20, 2022

REGULAR MEETING

CITY COUNCIL

CITY OF YUBA CITY
5:00 P.M. CLOSED SESSION

SUTTER ROOM/VIRTUAL
6:00 P.M. REGULAR MEETING

COUNCIL CHAMBERS/VIRTUAL
MAYOR ● Dave Shaw
VICE MAYOR ● Wade Kirchner
COUNCILMEMBER ● Marc Boomgaarden
COUNCILMEMBER ● Grace Espindola
COUNCILMEMBER ● Shon Harris
CITY MANAGER ● Diana Langley
CITY ATTORNEY ● Shannon L. Chaffin
1201 Civic Center Blvd
Yuba City CA 95993
Wheelchair Accessible


AGENDA

REGULAR MEETING

CITY COUNCIL - CITY OF YUBA CITY
SEPTEMBER 20, 2022
5:00 P.M. CLOSED SESSION

SUTTER ROOM/VIRTUAL
6:00 P.M. REGULAR MEETING

COUNCIL CHAMBERS/VIRTUAL
Materials related to an item on this Agenda submitted to the Council after distribution of the agenda packet are available for public inspection in the City Clerk’s office at 1201 Civic Center Blvd., Yuba City, during normal business hours. Such documents are also available on the City of Yuba City’s website at www.yubacity.net, subject to staff’s availability to post the documents before the meeting.

The Council Chambers will be open for public attendance and participation. The meeting will also be live streamed for public viewing, but not participation, at the following link:https://us06web.zoom.us/webinar/register/WN_zCj4NygxQhSRtpL-bGS34Q. Emailed comments sent to [email protected] at least 24 hours before the meeting will be distributed to the City Council prior to the meeting. Please identify the Agenda item(s) addressed by the comments.

Public Comment:

Any member of the public wishing to address the City Council on any item listed on the closed session agenda will have an opportunity to present testimony to the City Council in the Council Chamber prior to the City Council convening into closed session. Comments from the public will be limited to three minutes. No member of the public will be allowed to be present once the City Council convenes into closed session.

Closed Session
A. Conference with real property negotiator (Govt. Code § 54956.8) Property:

APN: 59-010-119, approximately 2 acres generally located at the northwest corner of Poole Boulevard and Civic Center Field, Yuba City, CA 95993 Negotiator: Diana Langley, City Manager
Negotiating parties: Robert Leal, Ron Scott and Holly Shackleford Under negotiation: Price and terms of payment

B. Conference with real property negotiator (Govt. Code § 54956.8) Properties:

APN: 51-62-026, 1.58 acres generally located on Providence Court, west of Clark Avenue and south of Kensington Way, Yuba City, CA 95991
APN: 51-660-084, 0.19 acres generally located on Providence Court, west of Clark Avenue and south of Kensington Way, Yuba City, CA 95991 APN: 57-150-001, 0.47 acres located at 217 S Walton Avenue, Yuba City, CA 95991 APN: 57-150-050, 1.0 acres located at 211 S Walton Avenue, Yuba City, CA 95991 APN: 57-220-065, 0.11 acres generally located on S Walton Avenue between 211 and 217 S Walton Avenue, Yuba City CA 95991
Negotiator: Diana Langley, City Manager
Negotiating parties: Habitat for Humanity
Under negotiation: Price and terms of payment
C. Public Employee Performance Evaluation (Pursuant to Government Code §54957(b)(1).) Position: City Attorney
Regular Meeting
Call to Order
Roll Call
__ Mayor Shaw
__ Vice Mayor Kirchner
__ Councilmember Boomgaarden
__ Councilmember Espindola
__ Councilmember Harris
Invocation/Inspiration
Pledge of Allegiance to the Flag
City Attorney's Report on Closed Session Items, City Attorney Shannon Chaffin Agenda Modifications/Approval of Agenda
Ceremonial Presentations

1. Paul Hatfield Retirement Proclamation

2. Senior Center Proclamation

3. Emergency Preparedness Proclamation

4. Kristel Martin, Downtown Business Association Certificate of Appreciation

5. SACOG Blueprint Project Presentation

6. Zonehaven - County Zach Hamill Presentation
Public Communication

7. Appearance of Interested Citizens
You are welcome and encouraged to participate in this meeting. Public comment is taken on action items appearing on the Consent Calendar or Business Items on the Agenda when they are called. Public comment on any other items within the scope of the City’s jurisdiction, including items not listed on the Agenda will be considered at this time. Public comment is limited to three minutes per speaker. Members of the public submitting written requests at least 24 hours prior to the meeting will be allotted five minutes to comment per speaker.

Repetitive comments may be limited, and large groups are encouraged to select representatives to express the opinions of the group.

Consent Calendar
All matters listed under Consent Calendar are considered to be routine and can be enacted in one motion. There will be no separate discussion of these items prior to the time that Council votes on the motion unless members of the City Council request specific items to be discussed or removed from the Consent Calendar for individual action.

8. Minutes from the September 2 and 6, 2022 meetings
Recommendation: Approve the September 2 and 6, 2022 meeting minutes

9. Acceptance of 2021 Assistance to Firefighter Grant
Recommendation: A. Adopt a Resolution authorizing the Fire Chief to accept the 2021 Assistance to Firefighters Grant in the amount of
$35,360.60
B. Authorize the Finance Director to make a supplemental budget appropriation for grant revenues to 100-43120 and grant expenditures to 2327-63404 in the amount of $35,360.60, and transfer the 10% match from unallocated general funds

10. Rezone 22-01 to remove the X8 District Overlay located East of the Intersection of Sutter and Market Street
Recommendation: Adopt an Ordinance of the City Council rezoning Accessor’s Parcel Numbers 51-550-029, -030, -040, -041, -042-and -043, located east of the intersection of Sutter and Market Street to remove the X8 District Overlay, and waive the second reading Business Items

11. City Housing Loan Programs Administration - Agreement with Habitat for Humanity
Recommendation: Adopt a Resolution authorizing the City Manager to enter into the Subrecipient Agreement with Habitat for Humanity
Yuba/Sutter for the administration of the City’s housing loan programs with the finding that entering into the Agreement is in the best interest of the City

12. 2021 CDBG - Consolidated Annual Performance and Evaluation Report Recommendation: A. Conduct a Public Hearing and after consideration; B. Adopt a Resolution approving the 2021 CAPER and

authorizing staff to submit all necessary documents to the U.S.

Department of Housing and Urban Development (HUD)

13. Emergency Operations Plan-Draft
Recommendation: Receive a presentation on the draft Emergency Operations Plan
Future Agenda Items

14. Future Agenda Items
- Councilmember Boomgaarden
- Councilmember Espindola
- Councilmember Harris
- Vice Mayor Kirchner
- Mayor Shaw
Reports and Communications
The following reports and communication items are provided for the Council’s information. No action can be taken on items under this section unless the Council agrees to include it on a subsequent agenda

15. City Manager's Report

16. City Council Reports
- Councilmember Boomgaarden
- Councilmember Harris
- Councilmember Espindola
- Vice Mayor Kirchner
- Mayor Shaw
Adjournment

Proclamation
of the City Council
Paul Hatfield
Police Sergeant
In Recognition of your Retirement
WHEREAS, Paul Hatfield was hired as a Reserve Police Officer by the City of Yuba City on August 11, 1990; and
WHEREAS, Paul has held the positions of Reserve Police Officer, Police Officer and Police Sergeant; and
WHEREAS, Paul has been recognized with numerous awards and commendations for his exemplary professional performance including over 40 letters of appreciation from the public, peers and supervisors; and
WHEREAS, Paul has served as an example of a leader, and a team player in his capacity as an employee of the City of Yuba City. Paul has received (5) Chief’s Unit of the Year Awards, (4) Police Unit Commendation Ribbons, and (7) Police Fitness Ribbons; and WHEREAS, Sergeant Paul Hatfield took an oath when he was hired to, “Preserve, Protect and Defend the Constitution,” an oath he never broke; and WHEREAS, Sergeant Hatfield kept faith with the public he so honorably served for more than 32 years.

NOW, THEREFORE BE IT RESOLVED, that I, Dave Shaw, Mayor of the City of Yuba City, on behalf of the entire Council and citizens we serve, do hereby congratulate Sergeant Paul Hatfield on the occasion of his honorable retirement, September 14, 2021. We wish Sergeant Hatfield, the very best in his future.

Done on this 20th day of September, 2022 in the City of Yuba City, County of Sutter, State of California.

Proclamation
of the City Council
National Senior Center Month
September 2022
WHEREAS, the month of September is devoted to celebrating Senior Centers and their contribution to improving the quality of life for older adults in our community; and WHEREAS, the Yuba City Senior Center strengthens community connection with fellowship and fun. The Yuba City Senior Center offers a variety of interactive activities such as Waffle Wednesdays, Friday night bingo, games and card groups, writers’ workshops, art programs such as pottery, painting and ceramics, and fitness programs such as yoga, line dancing and tai chi; and
WHEREAS, the Senior Center promotes health and wellness, improving physical and mental fitness of people who participate in the programs; and
WHEREAS, the Senior Center works with community partners to provide information and resources to seniors through the annual senior resource fair, and various educational seminars and workshops; and
WHEREAS, the Senior Center offers life enrichment and lifelong learning through day trips to various destinations such as the theatre, musicals, museums, art exhibits, as well as access to domestic and international travel experiences; exercising the mind and body and keeping adults engaged in the community, and there are many other activities designed to promote active lifestyles; and
WHEREAS, Senior Centers are valuable assets in communities and provide a space for older adults to connect with others, provide support for those in need of information and resources, and provide programs that help older adults continue to age well.

NOW, THEREFORE, BE IT RESOLVED, that I, Dave Shaw, Mayor of the City of Yuba City and on behalf of the entire City Council of the City of Yuba City do hereby proclaim September 2022 as National Senior Center Month and doing so, ask that the citizens of Yuba City commend the Senior Center for being such an outstanding community resource offered in our City.

Done this 20th day of September 2022, at the City of Yuba City, County of Sutter, State of California.

Proclamation
of the City Council
Emergency Preparedness Month
September 2022
WHEREAS, emergencies can happen unexpectedly in communities like ours, to people like you. It’s always good to have a plan in place to be prepared for emergencies; and WHEREAS, the entire Yuba City Community can take actions to become prepared to respond to and recover from any natural or manufactured disaster, no matter how big or small, the more people who prepare, the quicker our community will recover; and WHEREAS, Yuba City first responders may not always be able to reach you quickly in an emergency or disaster, and the most crucial step you can take in helping them is being able to take care of yourself and those in your care for at least a short period following an incident; and
WHEREAS, during National Preparedness Month, September 2022, community members are encouraged to take time to prepare themselves and those in their care for emergencies and disasters that can impact our neighborhoods for days at a time; and WHEREAS, all Yuba City residents and business owners are encouraged to be prepared, visit the Yuba City Fire Department website to sign up for emergency notifications with CodeRed, and to learn how to build a disaster supply kit, create evacuation plans, and general emergency preparedness; and
WHEREAS, Yuba City community members who prepare to meet emergencies or disasters can positively influence their neighbors by sharing their preparedness story and encouraging friends, family, and co-workers to be prepared.

NOW, THEREFORE BE IT RESOLVED that I, Dave Shaw, Mayor of the City of Yuba City, and on behalf of the entire City Council, do hereby proclaim September 2022 Emergency Preparedness Month and encourage the community to make sure that you and your family are prepared for an emergency.

Done on this 20th day of September 2022, City of Yuba City, Sutter County, and the State of California.

Sacramento Area Council of
Government
James Corless, Chief Executive Officer for the Sacramento Area Council of Governments will be presenting an overview of 2024 Blueprint.

Here is the link to the SACOG 2024 Blueprint
Background on SACOG
The Sacramento Area Council of Governments is where local government leaders across the region come together to advance the goals of economic prosperity, connected communities, and vibrant places. SACOG works with the 6 counties and 22 cities in the region to solve challenges that are too big for any one jurisdiction to solve on its own. SACOG plays a central role in transportation infrastructure planning and funding assistance for cities, counties, transit operators, and other entities responsible for providing for the mobility needs of the region’s residents. One of SACOG’s main roles as the state and federally recognized Metropolitan Planning Organization for the region, is to maintain the region’s long range, fiscally constrained, transportation plan and accompanying land use strategy. This plan must be updated every four years in coordination with local government agencies and demonstrate how the region is working to advance local, regional, state, and federal policy priorities. SACOG is currently undergoing an update of this plan, titled Blueprint, and anticipates adoption of the plan in 2024.

Background on Blueprint
The 2024 Blueprint will outline recommendations for public land use policy and transportation investment strategies for the Sacramento region for the next 30 years. This plan will lay out a set of strategies for an integrated, multimodal transportation system and a regional land use development pattern that can create a more thriving region that works for all residents. The plan aims to connect housing to jobs, education, goods and services, and recreational opportunities while protecting and enhancing our region’s natural and working landscapes.

Aside from this plan being a federal and state requirement, SACOG will use the 2024 Blueprint update to help local agencies coordinate and prioritize efforts to attract greater investment in the region through grants, private investment, and economic growth while protecting our region’s natural environment, existing economies, and improving quality of life for all residents.

At the Yuba City Council Meeting, James Corless from SACOG will provide a short presentation and answer any council questions on the 2024 Blueprint. The presentation will highlight how a Triple Bottom Line approach that strives to advance coequal goals in equity, economy, and environment is imperative to prepare the region to meet the complex growth and mobility challenges we all face in the coming decades. The presentation will also provide an overview of the opportunities SACOG is creating to allow for public and stakeholder involvement in the regional planning process and a glimpse into the many programs SACOG has available or is developing to support public agencies in the implementation of the region’s vision for the future.

SACOG
1415 L Street, Suite 300
Sacramento, CA 95814
916-321-9000

Sutter County
Zach Hamill, Emergency Operations Manager for Sutter County will be presenting an overview of Zonehaven.

Here is the link to the Office of Emergency Management
Sutter County
Emergency Management
1130 Civic Center Blvd
Yuba City, CA 95993
530-822-4575

Where would you go today to
find out about an evacuation in
Sutter County?

Zonehaven

Evacuation Zones
• Critical to evacuation process
• Communication to the public
• Pre-established zones help
prepare for, streamline, reduce
confusion

Find your zone
• Community.Zonehaven.com
• Search address
• Write your zone down

Zone Status

EVACUATION ORDER
Immediate threat to life. This is a lawful order to leave now. The area is lawfully closed to public access.

EVACUATION WARNING
Potential threat to life and/or property. Those who require additional time to evacuate, and those with pets and livestock should leave now.

SHELTER IN PLACE
Go indoors. Shut and lock doors and windows. Prepare to self-sustain until further notice and/or contacted by emergency personnel for additional direction.

ADVISORY Be on alert and follow county recommendations.

EVACUATION ORDER LIFTED It is now safe to return to your home. Be aware of your surroundings.

NORMAL No current knowledge of active public safety incidents affecting your area.

TRAINING
Emergency personnel training. No response necessary from residents. (Can also be used for virtual evacuations, such as when testing the Community Warning Systems.)

Value
• Keep your family safe
• Protect your property
• Keep your community
safe

County Evacuation Process
On scene first
responders call
for evacuation
Emergency
Notification
Zonehaven
AWARE
Emergency

Resident Response
Emergency
detected Reference zone Check Zonehaven
Resident evacuate
(go bag)
Check on neighbors

Are you ready to
accept the
challenge?
Help us improve the
evacuation process.

Photo Credits:
@CALFIRECZU

CITY OF YUBA CITY
Public Communication
Members of the public may address the City Council on items of interest that are within the City’s jurisdiction. Individuals addressing general comments are encouraged to limit their statements.

Procedure
You are welcome and encouraged to participate in this meeting. Complete a Speaker Card located in the lobby and give to the Clerk, public comment is taken on action items appearing on the Consent Calendar or Business Items on the Agenda when they are called. Public comment on any other items within the scope of the City’s jurisdiction, including items not listed on the Agenda, will be considered at this time.

When a matter is announced, wait to be recognized by the Mayor to provide your comments to the Council. Comments should begin by providing your name and place of residence. A three minute limit is requested when addressing Council.

Request for additional time to address Council
Members of the public submitting written requests at least 24 hours prior to the meeting will be allotted 5 minutes to comment per speaker. Repetitive comments may be limited, and large groups are encouraged to select representatives to express the opinions of the group.

Procedure
When requesting to comment, please indicate your name and the topic and mail to:

City of Yuba City
Attn: City Clerk
1201 Civic Center Blvd
Yuba City CA 95993
Or email to:

Jackie Sillman, City Clerk
[email protected]

Agenda Item 8

CITY OF YUBA CITY

STAFF REPORT
Date: September 20, 2022
To: Honorable Mayor & Members of the City Council;
From: Administration Department
Presentation By: Ciara Wakefield, City Clerk Administrator Summary
Subject: Minutes from the September 2 and 6, 2022 meetings Recommendation: Approve the September 2 and 6, 2022 meeting minutes Fiscal Impact: None
Attachments:

1. 09-02-22 Special Closed Session Minutes (DRAFT)

2. 09-06-22 - Regular Meeting Minutes (DRAFT)
Prepared By: Submitted By:

Ciara Wakefield
City Clerk Administrator
Diana Langley
City Manager

ATTACHMENT 1

MINUTES (DRAFT)

SPECIAL MEETING

CITY COUNCIL - CITY OF YUBA CITY
SEPTEMBER 2, 2022
9:00 A.M. CLOSED SESSION

COUNCIL CHAMBERS
Call to Order
Mayor Shaw called the Special Meeting of the City Council to order at 9:04 AM Roll Call

Present: Mayor Shaw and Councilmembers Boomgaarden, Espindola, Harris, and Kirchner

Absent: None
Closed Session
A. Conference With Legal Counsel—Anticipated Litigation Significant exposure to litigation pursuant to paragraph (2) of Government Code Section 54956.9(d): (One case)
Existing facts and circumstances for closed session consist of the receipt of oral threat(s) of litigation by Piara Johl on June 21, 2022, during public comment (video available for inspection), and Tej Maan to the City Attorney No public comment
Council moved into Closed Session
Adjournment
The Special Closed Session Meeting was adjourned by Mayor Shaw at 10:25 AM ____________________________
Dave Shaw, Mayor
ATTEST:
______________________________
Ciara Wakefield, Deputy City Clerk

ATTACHMENT 2

MINUTES (DRAFT)

CITY COUNCIL – CITY OF YUBA CITY
6:00 P.M. REGULAR MEETING

COUNCIL CHAMBERS/VIRTUAL
SEPTEMBER 6, 2022
Regular Meeting
The Regular Meeting of the City Council was called to order by Mayor Shaw at 6:00 PM Roll Call:

Present: Mayor Shaw, Councilmembers Boomgaarden, Harris, Espindola, and Kirchner

Absent: None
Invocation/Inspiration
Pastor Dan Callaghan - FBC Yuba City, Sutter County Sheriff Chaplain Pledge of Allegiance to the Flag
Councilmember Marc Boomgaarden
City Attorney’s Report on Closed Session
No reportable action
Agenda Modifications/Approval of Agenda
No changes were made
Ceremonial Presentations

1. Hunger Awareness and Action Month Proclamation
Mayor Shaw presented a proclamation to Naomi Cabral, Executive Director, Yuba Sutter Foodbank
Public Communication

2. Appearance of Interested Citizens
Piara Johl spoke
Heather Esemann spoke
Consent Calendar
No public comments were received for Consent Calendar items 3-6

Councilmember Espindola moved and Councilmember Boomgaarden seconded the motion to:

3. Minutes from the August 9, 11, Special Meetings and the August 16 Regular Meeting

Approve the minutes of August 9, 11 and 16, 2022

4. Presentation of Investment Report for Quarter Ended June 30, 2022 Note and File Quarterly Investment Report

5. Electrical Stand-by Bargaining Unit Side Letters
A. Adopt Resolution 22-131 approving Side Letters with the First Level Managers and Public Employees’ Union, Local 1/AFSCME 57 bargaining units which establish the terms and requirements for the Electrical Division employees to serve and be paid for Electrical stand-by shifts

B. Authorize the Finance Director to make budget adjustments as necessary

6. WWTF Lift Station No. 2 Rehabilitation Equipment Purchase

Adopt Resolution 22-132 awarding the purchase of three (3) Flygtbrand hard iron impeller pumps and associated parts to Shape, Incorporated of Pleasanton, CA in the amount of $256,000 for the Lift Station No. 2 Rehabilitation Project, with the finding that it is in the best interest of the City
The motion was passed with a unanimous vote
Business Items

7. Yuba City Lighting and Landscape Maintenance District No. 5, Zone of Benefit C_10 (Henson Ranch – Phase 1)
Mayor Shaw opened a Public Hearing
No public comment
Mayor Shaw closed the Public Hearing
Vice-Mayor Kirchner moved and Councilmember Harris seconded the motion to:

B. Adopt Resolution 22-133 confirming and ordering annexation of the parcel associated with the Henson Ranch – Phase 1 Development, APN 62-082-018 into the existing Yuba City Lighting and Landscape Maintenance District No. 5, Zone of Benefit C_10 and establishing a levy of assessments for the annexed territory The motion was passed with a unanimous vote

8. Yuba City Lighting and Landscape Maintenance District No. 6, Zone of Benefit B_15 (769 Garden Highway)
Mayor Shaw opened a Public Hearing
No public comment
Mayor Shaw closed the Public Hearing
Vice-Mayor Kirchner moved and Councilmember Boomgaarden seconded the motion to:

B. Adopt Resolution 22-134 confirming and ordering annexation of the parcel associated with the 769 Garden Highway Development, APN 53-400-080 into the existing Yuba City Lighting and Landscape Maintenance District No. 6, Zone of Benefit B_15 and establishing a levy of assessments for the annexed territory The motion was passed with a unanimous vote

9. Revised Lateral Police Officer and Lateral Dispatcher Recruiting Incentive Program
Councilmember Harris moved and Councilmember Boomgaarden seconded the motion to:

Adopt Resolution 22-135 authorizing a revised Lateral Officer and Lateral Dispatcher Recruiting Incentive Program
The motion was passed with a unanimous vote

10. Purchase of Lenco BearCat armored vehicle
Councilmember Espindola moved and Vice-Mayor Kirchner seconded the motion to:

A. Adopt Resolution 22-136 authorizing the purchase of one (1) Lenco Bearcat from Lenco Industries Inc. of Pittsfield, MA, in the amount of $326,584.63, with the finding that it is in the best interest of the City

B. Authorize the Finance Director to utilize Fiscal Year 22/23 Budget-approved one-time use funds from account 6610-69401 for the purchase of one (1) Lenco Bearcat in the amount of $155,000. Authorize the Finance Director to utilize COPS grant funds from account 2180-69401 in the amount of $171.848.63 for the remaining balance of the purchase price
The motion was passed with a unanimous vote

11. Donation and Facility Use Agreement between the City of Yuba City and Special Olympics Northern California, Inc.

Vice-Mayor Kirchner moved and Councilmember Harris seconded the motion to:

A. Adopt Resolution 22-137 which authorizes the City Manager to execute a Donation and Facility Use Agreement between the City of Yuba City and Special Olympics Northern California Inc
B. Adopt Resolution 22-138 approving the name of the proposed bocce ball courts, "Montna Bocce Ball Courts" per the Parks & Facilities Naming Policy for 20 years The motion was passed with a unanimous vote

12. Rezone 22-01 to remove the X8 District Overlay located East of the Intersection of Sutter and Market Street
Mayor Shaw opened a Public Hearing
No public comment
Mayor Shaw closed the Public Hearing
Councilmember Harris moved and Councilmember Espindola seconded the motion to:

B. Adopt 22-139 Resolution of the City Council to approve Environmental Assessment 22-02 by adopting an Initial Study and Negative Declaration prepared for Rezone 22-01, located east of the intersection of Sutter and Market Street; and

C. Introduce Ordinance 010-22 of the City Council rezoning Accessor’s Parcel Numbers 51-550-029, -030, -040, -041, -042and -043, located east of the intersection of Sutter and Market Street to remove the X8 District Overlay, and waive the first reading
The motion was passed with a unanimous vote
Future Agenda Items

13. Future Agenda Items
No suggestions
Reports and Communications

14. City Manager's Report

15. City Council Reports
- Councilmember Espindola
- Councilmember Harris
- Councilmember Boomgaarden
- Vice-Mayor Kirchner
- Mayor Shaw
Adjournment
Mayor Shaw adjourned the Regular Meeting of the City Council at 7:29 PM ____________________________
Dave Shaw, Mayor
ATTEST:

______________________________
Ciara Wakefield, Deputy City Clerk

Agenda Item 9

CITY OF YUBA CITY

STAFF REPORT
Date: September 20, 2022
To: Honorable Mayor & Members of the City Council;
From: Fire Department
Presentation By: Jesse Alexander, Fire Chief
Summary
Subject: Acceptance of 2021 Assistance to Firefighter Grant Recommendation: A. Adopt a Resolution authorizing the Fire Chief to accept the 2021 Assistance to Firefighters Grant in the amount of $35,360.60
B. Authorize the Finance Director to make a supplemental budget appropriation for grant revenues to 100-43120 and grant expenditures to 2327-63404 in the amount of $35,360.60, and transfer the 10% match from unallocated general funds
Fiscal Impact: $35,360.60 total. $32,146 in Federal funding, with the City providing a required 10% local match of $3,214.60 coming from unallocated general funds.

Purpose:

Protect the health and safety of the public and firefighting personnel against fire and fire-related hazards by purchasing new structure firefighting nozzles for fire apparatus.

Council's Strategic Goal:

This purchase addresses the City Council’s Public Safety Strategic Goal, by replacing old firefighter nozzles, in an effort to provide firefighter safety and increase operational effectiveness.

Background:

The Federal Department of Homeland Security has conducted its annual Assistance to Firefighters Grant (AFG) program since 2001. This program aims to enhance fire departments’ abilities with respect to fire and fire-related hazards. Under the current program, Federal funds cover 90% of projectrelated costs, with the individual agency required to provide a 10% local match.

The Yuba City Fire Department applied under the 2021 Assistance to Firefighters Grant cycle and was awarded $35,360.60 to purchase sixty-four nozzles of various sizes and thirteen shut-off valves.

Analysis:

The Yuba City Fire Department responds to various types of fires, including but not limited to residential, commercial, vehicle, flammable liquids/gases, and vegetation fires. To mitigate the hazards, fire apparatus pump water through hose lines to various nozzles, which vary depending on the complexity, size, or type of fire. A firefighter's nozzle is a primary tool for extinguishing fires.

Therefore, these firefighter nozzles must be adequately working to protect firefighters engaged in interior firefighting under Immmedialty Dangerous to Life or Health (IDLH) conditions.

The Fire Department requested funding from the Assistant to Firefighters Grant to purchase new nozzles to help us alleviate operational and maintenance problems we are currently experiencing with our nozzles. Despite our maintenance efforts, we are concerned that a nozzle failure at a fire scene will jeopardize the safety of our personnel or residents on-site, negatively impacting our suppression efforts and, unavoidably, increasing our liability exposure. In addition, these nozzles will allow us to standardize nozzles and training across all of our first-out apparatus. This will provide consistency with firefighter nozzle techniques and allow the correct nozzle for the right type of incident.

Fiscal Impact:
$35,360.60 total. $32,146 in Federal funding, with the City providing a required 10% local match of $3,214.60 coming from unallocated general funds. All grant-related purchases will comply with the City’s bidding and purchasing policy requirements.

Alternatives:

Do not adopt the Resolution accepting the award.

Recommendation:

A. Adopt a Resolution authorizing the Fire Chief to accept the 2021 Assistance to Firefighters Grant in the amount of $35,360.60
B. Authorize the Finance Director to make a supplemental budget appropriation for grant revenues to 100-43120 and grant expenditures to 2327-63404 in the amount of $35,360.60 and transfer the 10% match from unallocated general funds.

Attachments:

1. 2021 AFG Nozzles Grant Resolution
Prepared By: Submitted By:

Jesse Alexander
Fire Chief
Diana Langley
City Manager

ATTACHMENT 1

RESOLUTION NO. _________

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUBA CITY

AUTHORIZING RECEIPT, ALLOCATION AND EXPENDITURE, OF A GRANT FROM THE 2021 ASSISTANCE TO FIREFIGHTERS GRANT PROGRAM AND APPROVAL OF A

REVENUE ADJUSTMENT TO THE FIRE DEPARTMENT BUDGET
WHEREAS, the Federal Department of Homeland Security has conducted its annual Assistance to Firefighters Grant (AFG) program since 2001; and WHEREAS, the goal of this program is to enhance fire departments’ abilities with respect to fire and fire-related hazards; and
WHEREAS, under the current program, Federal funds cover 90% of project related costs, with the individual agency required to provide a 10% local match; and WHEREAS, the Yuba City Fire Department submitted an application under the 2021 Assistance to Firefighters Grant cycle and has been awarded $35,360.60 for the replacement of the Department’s firefighting nozzles; and
WHEREAS, the City Council desires to accept the grant, make the necessary budget adjustments to ensure the City’s matching funds, and authorize the Fire Chief to execute any necessary contracts or documents to effectuate the award of the grant funds.

NOW, THEREFORE, be it resolved by the City Council of the City of Yuba City as follows:

Section 1. The above recitals are true and correct, and are hereby incorporated herein by this reference.

Section 2. The City Council hereby accepts the award of the 2021 Assistance to Firefighters Grant of $35,360.60. The City Manager, or designee, is authorized to execute any contracts or other documents on behalf of Yuba City necessary to effectuate acceptance of the grant funds, subject to approval as to legal form by the City Attorney.

Section 3. The City Council approves a supplemental budget appropriation for grant revenues to 100-43120 and grant expenditures to 2327-63404 in the amount of $35,360.60, and transfer the 10% match from unallocated general funds.

The foregoing resolution was duly and regularly introduced, passed, and adopted by the City Council of the City of Yuba City at a regular meeting thereof held on the 20st day of September 2022.
*****

AYES:

NOES:

ABSENT:

Dave Shaw, Mayor
ATTEST:

Ciara Wakefield, Deputy City Clerk

APPROVED AS TO FORM

COUNSEL FOR YUBA CITY
Shannon L. Chaffin, City Attorney
Aleshire & Wynder, LLP

Agenda Item 10

CITY OF YUBA CITY

STAFF REPORT
Date: September 20, 2022
To: Honorable Mayor & Members of the City Council;
From: Development Services Department
Presentation By: Ben Moody, Public Works & Development Services Director Summary
Subject: Rezone 22-01 to remove the X8 District Overlay located East of the Intersection of Sutter and Market Street
Recommendation: Adopt an Ordinance of the City Council rezoning Accessor’s Parcel Numbers 51- 550-029, -030, -040, -041, -042-and -043, located east of the intersection of Sutter and Market Street to remove the X8 District Overlay, and waive the second reading
Fiscal Impact: The costs for processing the land use entitlements are funded by the project applicant.

Purpose:

To update the Zoning Code to remove the X8 District Overlay on the subject parcels to coincide with current policies.

Council’s Strategic Goals:

This item meets the City Council’s strategic goal of: business friendly. Removing the X District Overlay removes outdated requirements and aligns with current policies.

Background:

The applicant has filed an application to remove the X8 District Overlay from the existing Ampla Health site located at 935 Market Street. The X8 District Overlay zone required a roundabout at Market Street and Del Norte Ave, however, currently the Public Works Department and the new Traffic Study do not support a roundabout in that location.

The site is designated in the General Plan as Office & Office Park. Medical Offices are consistent with that designation. The property is within the Office Commercial District (C-O) with an X8 Combining District (C-O X8). The proposed zoning change is consistent with the General Plan designation and current use of the site.

The site is surrounded by single and multiple-family residences, an office park, commercial and industrial uses. The proposed removal of the X8 overlay does not negatively affect the neighbors in accordance with the Traffic Study. These lands were evaluated and approved for Office & Office Park

development as part of the adoption of the current General Plan.

On July 27, 2022, the Planning Commission considered the rezone application to remove the X8 District Overlay on the subject parcels and Environmental Assessment 22-02. By a vote of 4 to 0, the Planning Commission recommended that the City Council certify Environmental Assessment 22-02 prepared by adopting a Negative Declaration, and approve Rezone 22-01.

On September 6, 2022 the Ordinance was introduced at the regular City Council meeting, and a Resolution that adopted a Negative Declaration for the project was approved by a vote of 5-0.

Analysis:

The traffic study completed for the project concluded that a roundabout was not necessary at the location established by the overlay zone, and identified several improvements that may be implemented at the time of future development of the site in order to mitigate traffic related concerns. These recommended improvements have been reviewed by the Public Works Director, and will be considered for implementation at the time of future development on the site.

All City services, including water, sewer, and storm-water drainage (a combination of City and Sutter County Water Agency) are available to this site.

Rezone 22-01 Findings:

Based upon analysis of the Rezone application, staff recommends the City Council find that Rezoning 22-01 i) is consistent with the General Plan goals and policies; ii) is consistent with the purpose of the zoning ordinance to promote and protect the public's health, safety, peace, comfort, convenience and general welfare; and iii) the Project would provide open space, light, air, privacy, convenience of access, aesthetic values, protection of environmental values, and protection of public and private improvements. Among others:
a. The proposed project to remove the X8 Overlay District from the designated APNs in and of itself would not create a significant hazard to the public or the environment. b. The site is physically suited for the density of future development as the maximum Floor Area Ratio for Office & Office Park is 1.0.
c. The site is physically suited for the type of future development as the subject parcels are designated Office & Office Park. This classification includes neighborhood, community, and downtown offices as well as office development in a low-intensity, campus-like setting. Future development will expand the number of office buildings after the removal of the X8 Combining Zone. The alternative site that has been identified for the installation of a single-lane roundabout is suitable for the type of improvements necessary to accommodate traffic demand and vehicular movements associated with the planned expansion of the facility. d. The design of any future improvements related to the project is not likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat. e. The removal of the X8 Combining District is not likely to cause serious public health problems.

Future development will be connected to City water, wastewater and storm drainage systems. f. The removal of the roundabout designated by the X8 Combining District will not conflict with easements acquired by the public at large for access through or use of the intersection of Market Street and Del Norte Avenue.
g. The Project will allow for the creation of quality balanced neighborhoods that provide employment options for the City.
h. The Project will continue to provide a framework for maintaining the integrity of surrounding business and residential neighborhoods by providing connections where necessary and continuing development in a visually compatible manner. i. The Project is consistent with General Plan goals and policies including: 3.8-I-4, to ensure that

neighborhood retail centers and commercial service buildings are compatible with the surrounding neighborhood and with adjacent travel corridors; 5.2-G-7, to maximize the carrying capacity of arterial roadways by controlling the number of intersections and driveways, prohibiting residential access, and requiring sufficient off-street parking to meet the needs of each project; Chapter 4.4 Connections & Corridors, Neighborhood Connectivity, to connect neighborhoods to local shopping districts and activity centers, and to provide accessibility to major urban amenities, parks, open space, and Downtown, and to the regional highway system in accordance with the new street system and hierarchy discussed in Chapter 5, Transportation.

Fiscal Impact:

The costs for processing the land use entitlements are funded by the project applicant. There are no additional financial impacts on the City in relation to the removal of the X8 District Overlay. Traffic mitigation associated with future development will be required by the developer as determined for future impacts.

Alternatives:

1. Deny the application for Rezone 22-01

2. Provide staff with alternative direction
Recommended Action:

Adopt an Ordinance of the City Council Rezoning 22-01, located east of the intersection of Sutter and Market Street to remove the X8 District Overlay and waive the second reading.

Attachments:

1. Ordinance RZ 22-01
Prepared By: Submitted By:

Jaspreet Kaur
Associate Planner
Diana Langley
City Manager

ATTACHMENT 1

ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF YUBA CITY REZONE 22-01 FOR THE AMPLA HEATH SITE (LOCATED NORTH OF STATE ROUTE 20 ON PARCELS EAST OF THE INTERSECTION OF SUTTER STREET AND DEL NORTE AVENUE, APNS: 51-550-029, 51-550-030, 51-550- 040, 51-550-041, 51-550-042, and 51-550-043).

WHEREAS, Ampla Health, has filed to Rezone six parcels east of the intersection of Sutter Street and Del Norte Avenue that are zoned Office Commercial District with Combining District X8 to Office Commercial District, removing the Combining District X8; and WHEREAS, as a result the following entitlement is being considered for approval:
 Rezone 22-01; and
WHEREAS, pursuant to the authority and criteria contained in the California Environmental Quality Act of 1970 (“CEQA”), the City, as the Lead Agency, has analyzed the proposed Project and has prepared an Initial Study and Negative Declaration (Environmental Assessment 22-02) for the Project; and
WHEREAS, on July 27, 2022, the Planning Commission conducted a duly noticed public hearing on Rezone 22-01, at which time it received input from City Staff, the applicant; public comment portion was opened, and public testimony and evidence, both written and oral, was considered by the Planning Commission, after which public testimony was closed; and WHEREAS, the Planning Commission has reviewed all associated documents prepared for the project, including that related to Rezone 22-01, and all of the evidence received by the Planning Commission; and
WHEREAS, after deliberation and consideration of all relevant items, the Planning Commission desired to recommend the City Council adopt an ordinance approving Rezone 22- 01; and
WHEREAS, on September 6, 2022 the City Council conducted a duly noticed public hearing on the project, at which time it received input from City Staff and the developer; public comment portion was opened, and public testimony and evidence, both written and oral, was considered by the City Council, after which public testimony was closed and this ordinance introduced.

NOW, THEREFORE, the City Council of the City of Yuba City does ordain as follows:

1. Recitals. The City Council hereby specifically finds that all of the facts set forth in the recitals above are true and correct and incorporated herein.

2. CEQA Finding. An initial study was prepared for this project and the City Council approved a negative declaration on September 6, 2022. There have been no material changes in circumstances since that date. As such, this project has been fully assessed under the California Environmental Quality Act (CEQA), and no further analysis is required.

3. Rezoning Findings: The City Council finds that Rezoning 22-01 is consistent with the General Plan. The City Council finds that Rezoning 22-01 i) is consistent with the General Plan goals and policies as both are amended; ii) is consistent with the purpose of the zoning ordinance to promote and protect the public's health, safety, peace, comfort, convenience and general welfare; and iii) the Project would provide open space, light, air, privacy, convenience of access, aesthetic values, protection of environmental values, and protection of public and private improvements. Among others:
a. The proposed project to remove the X8 Overlay District from the designated APNs in and of itself would not create a significant hazard to the public or the environment. b. The site is physically suited for the density of future development as the maximum Floor Area Ratio for Office & Office Park is 1.0.
c. The site is physically suited for the type of future development as the subject parcels are designated Office & Office Park. This classification includes neighborhood, community, and downtown offices as well as office development in a low-intensity, campus-like setting. Future development will expand the number of office buildings after the removal of the X8 Combining Zone. The alternative site that has been identified for the installation of a single-lane roundabout is suitable for the type of improvements necessary to accommodate traffic demand and vehicular movements associated with the planned expansion of the facility.
d. The design of any future improvements related to the project is not likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat.
e. The removal of the X8 Combining District is not likely to cause serious public health problems. Future development will be connected to City water, wastewater and storm drainage systems.
f. The removal of the roundabout designated by the X8 Combining District will not conflict with easements acquired by the public at large for access through or use of the intersection of Market Street and Del Norte Avenue.
g. The Project will allow for the creation of quality balanced neighborhoods that provide employment options for the City.
h. The Project will continue to provide a framework for maintaining the integrity of surrounding business and residential neighborhoods by providing connections where necessary and continuing development in a visually compatible manner. i. The Project is consistent with General Plan goals and policies including: 3.8-I-4, to ensure that neighborhood retail centers and commercial service buildings are compatible with the surrounding neighborhood and with adjacent travel corridors; 5.2- G-7, to maximize the carrying capacity of arterial roadways by controlling the number of intersections and driveways, prohibiting residential access, and requiring sufficient off-street parking to meet the needs of each project; Chapter 4.4 Connections & Corridors, Neighborhood Connectivity, to connect neighborhoods to local shopping districts and activity centers, and to provide accessibility to major urban amenities, parks, open space, and Downtown, and to the regional highway system in accordance with the new street system and hierarchy discussed in Chapter 5, Transportation.

4. Approval of Rezoning 22-01: Based on the information provided above, the City Council of Yuba City adopts an uncodified ordinance approving Rezoning 22-01 and reclassify the zone district for those districts as depicted in Exhibit “A,” as shown on the zoning map of the City of Yuba City from Office Commercial (C-O) with Combining District X8 (C-O X8) to

Office-Commercial (C-O), and associated refinements of existing zoned district map boundaries as depicted in Exhibit “A.”

5. Severability. If any section, subsection, sentence, clause, phrase, or portion of this ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions thereof may be declared invalid or unconstitutional.

6. Publication. The City Clerk shall certify to the adoption of this Ordinance and cause it to be published, in accordance with Government Code, Section 36933, or as otherwise required by law.

7. Effective Date of Resolution. This ordinance shall take effect and be in full force and effect from and after thirty (30) days after its final passage andadoption.

I HEREBY CERTIFY that the foregoing Ordinance was introduced by the City Council after waiving reading, except by Title, at a regular meeting thereof held on the 6th day of September 2022, and adopted the Ordinance after the second reading at a regular meeting held on the 20th day of September 2022, by the following vote:

Ayes:

Noes:

Absent:

Recused:

CITY OF YUBA CITY
Dave Shaw, Mayor
ATTEST:

Ciara Wakefield, Deputy City Clerk
APPROVED AS TO FORM:
___________________________
Shannon L. Chaffin, City Attorney
Aleshire & Wynder, LLP

Exhibit A: Rezone 22-01
I, ______________________________, Deputy City Clerk of the City of Yuba City, California, DO HEREBY CERTIFY that the foregoing is a true and accurate copy of the Ordinance passed and adopted by the City Council of the City of Yuba City on the date and by the vote indicated herein.

EXHIBIT A

Agenda Item 11

CITY OF YUBA CITY

STAFF REPORT
Date: September 20, 2022
To: Honorable Mayor & Members of the City Council;
From: Development Services Department
Presentation By: Ben Moody, Public Works & Development Services Director Summary
Subject: City Housing Loan Programs Administration - Agreement with Habitat for Humanity
Recommendation: Adopt a Resolution authorizing the City Manager to enter into the Subrecipient Agreement with Habitat for Humanity Yuba/Sutter for the administration of the City’s housing loan programs with the finding that entering into the Agreement is in the best interest of the City
Fiscal Impact: $75/hour up to $12,500 to be used for general administration. A maximum of 21% of available program funds (depending on the loan fund) to be used for activity delivery costs. A total of $153,324 available for general administration and activity delivery costs, should all available funds be loaned out.

Purpose:

To authorize the City Manager to enter into a Subrecipient Agreement with Habitat for Humanity Yuba/Sutter for the administration of the City’s housing loan programs.

Council's Strategic Goal:

This item addresses Council’s goal of infrastructure in that it utilizes the existing loan funds that the City has obtained.

Background:

The City has been a recipient of HOME Investment Partnership Program (HOME), CalHome Funding, and Community Development Block Grant Program (CDBG) funding for several years. These funds have allowed the City to operate two housing loan programs for Yuba City residents; the First-Time Homebuyer (FTHB) loan program and Owner-Occupied Housing Rehabilitation (OOR) loans. These programs provide an option for income-qualified homebuyers and homeowners to obtain low-interest loans for purchasing or rehabilitating affordable permanent housing.

Historically, the Regional Housing Authority acted as the administrator for these City housing loan programs, however, in January 2022, the Regional Housing authority notified the City that they would no longer be providing housing loan program services. The City’s FTHB and OOR programs have been on hold since that change, while staff worked to find a new administrator for these programs.

With current housing market costs, specific state and federal guidelines, utilizing loan funds and identifying a new program administrator has proved difficult.

Analysis:

Habitat for Humanity Yuba/Sutter (Habitat) expressed interest in taking on the role as the new administrator of the City’s loan programs. Habitat currently acts as the administrator for several surrounding jurisdictions’ loan programs and has also hired staff that has experience and familiarity with the City’s housing loan programs.

Habitat has had discussions with City Staff and has drafted a Subrecipient Agreement that outlines the amount of funding available for program activity delivery, as well as general administration. These amounts are set by State and Federal regulations on how much of the program funding can be used for the administration of the loan programs. The administration of the City’s loan programs that Habitat would perform includes; marketing the loan programs, application intake and screening, inspections of units, ensuring loan and City program policy requirements are met, and the management of property owners and contractors.

The proposed Agreement term will expire on December 31, 2024, at which time, both parties have the option to extend the Agreement for an additional three (3) years with updated loan fund balances, with mutual agreement.

Fiscal Impact:

The Subrecipient Agreement outlines a total of approximately $922,000 in program funds available for housing loans with a maximum of $153,324 of those existing loan funds being available for reimbursement costs associated with the administration of the loan programs, (should all available funds be loaned out). These numbers are based on existing fund balances and the maximum percentages that State or Federal loan program regulations allow to be used for administration. Funds paid to Habitat will come directly from the loan program balances, with the applicable Activity Delivery funds only being reimbursable after the successful delivery of a loan.

The existing $12,500 for HOME general administration is the amount left for the term of that grant.

However, 10% of program income balances (beyond the grant term) can be used for general administration. This comes from loan payoffs and payments. Activity delivery costs can be reimbursed once staff time turns into a funded project. The City holds 3% of the total 24% allowable activity delivery funds to account for any failed applications.

CDBG allows for 17% of program income to be used for general administration and CalHOME Reuse funds allow 15% of program income to be used for activity delivery, but does not have general administration funds.

To summarize costs; $75/hour up to $12,500 can be used for general administration with a maximum of 21% for HOME loan program funds, 17% for CDBG, and/or 15% CalHOME loan program funds to be used for activity delivery costs, when staff time is used for a funded loan project, to be paid to Habitat for Humanity from existing loan balances.

Alternatives:

Do not authorize the City Manager to enter into the proposed Subrecipient Agreement with Habitat for Humanity Yuba/Sutter and provide directions for proceeding with the City’s housing loan program administration.

Recommendation:

Adopt a Resolution authorizing the City Manager to enter into the Subrecipient Agreement with Habitat for Humanity Yuba/Sutter for the administration of the City’s housing loan programs with the finding that entering into the Agreement is in the best interest of the City Attachments:

1. Attachment 1 - Subrecipient Agreement with Habitat for Humanity for City Housing Loan Program Administration

2. Attachment 2 - Resolution Authorizing the City Manager to Enter into Subrecipient Agreement with Habitat for Humanity Yuba/Sutter
Prepared By: Submitted By:

Shannon Jones
Administrative Analyst
Diana Langley
City Manager

Subrecipient Agreement
City of Yuba City and
Habitat for Humanity Yuba /Sutter Page 1 of 30

SUBRECIPIENT AGREEMENT BETWEEN THE

CITY OF YUBA CITY AND HABITAT FOR HUMANITY YUBA/SUTTER
This subrecipient agreement (the “Agreement”) is made and entered into as of the date of execution by both parties evidenced by the later of the dated signatures hereto, by and between the CITY OF YUBA CITY, a government instrumentality, whose address is 1201 Civic Center Blvd., Yuba City, CA 95993 (the “CITY”), and HABITAT FOR HUMANITY YUBA/SUTTER, a nonprofit corporation, having its principal office at 202 D Street, Marysville, CA 95901 (the “Program Operator”).

WHEREAS, the CITY has entered into a Standard Agreement No. 18-HOME-12598, referred to as STANDARD AGREEMENT, to receive funding from the HOME Investment Partnerships Program, referred to as HOME, from the State of California, Department of Housing and Community Development, referred to as HCD, to finance the City of Yuba City Housing Rehabilitation Program, referred to as PROGRAM; and
WHEREAS, the CITY also utilizes funds available through Community Development Block Grant (CDBG) Entitlement (Program Income funds available) and CalHome (Reuse funds available) to finance the PROGRAMS; and
WHEREAS, among the eligible uses of HOME, CDBG, and CalHOME is the provision of Owner-Occupied Housing Rehabilitation Assistance and/or Homeownership Assistance; and WHEREAS, the purpose of the HOME, CDBG, and CalHome Program Owner-Occupied Housing Rehabilitation Assistance is to increase the supply of decent, safe, sanitary, and affordable housing for households with combined incomes at or below 80% of the area median income adjusted per household size; and
WHEREAS, the CITY has entered into a contractual relationship with the California Department of Housing and Community Development (“HCD”) to administer one or more HCDfunded 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. 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 HABITAT FOR HUMANITY YUBA/SUTTER; and

Subrecipient Agreement
City of Yuba City and
Habitat for Humanity Yuba /Sutter Page 2 of 30
WHEREAS, the CITY has identified HABITAT FOR HUMANITY YUBA/SUTTER as an eligible “Program Operator” (as such term is defined in 24 CFR 92.2) capable of administering the Program on behalf of the CITY; and
WHEREAS, the CITY COUNCIL approved RESOLUTION_____ approving the Program Operator for the purpose of establishing and operating the Program; and NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and covenants set forth herein, the CITY and Program Operator do agree, for themselves and for their respective successors and assigns, as follows:

SECTION 1: GENERAL PROGRAM DESCRIPTION; ROLES & RESPONSIBILITIES

1.1 Program Description:

As further described herein and in the City of Yuba City’s Housing Rehabilitation Program Guidelines, 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. 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.

1.2 CITY Role & Responsibilities
The CITY is responsible for the operation of the Program and compliance with applicable federal requirements, including the HOME requirements outlined in 24 CFR part 92,. This will include, but not be limited to, the following:

1.2.1 Program Design
Furnishing the Program Operator with the Program Guidelines and any other Program requirements, including any future changes to HOME regulations or HOME Program guidance issued by HUD;

1.2.2 Environmental Review
Completing necessary environmental reviews and/or determinations pursuant to 24 CFR

92.352 and 24 CFR 58;

1.2.3 Reporting to HCD
Preparing and submitting reports to HCD including but not limited to Project Set-up and Completion, Quarterly Performance, Quarterly PI, Administrative Draw Down Requests, and Annual Performance Report;

Subrecipient Agreement
City of Yuba City and
Habitat for Humanity Yuba /Sutter Page 3 of 30

1.2.4 Program Operator Monitoring
Completing remote and on-site monitoring reviews of the Program Operator’s operation of the Program.

1.3 Program Operator Role & Responsibilities
In addition to the responsibilities listed in Exhibit A, Program Operator is responsible for the routine implementation of the Program, including interaction with applicants to the Program and Contractors. In all cases, Program Operator will implement the program in compliance with the CITY’s Program Guidelines and all applicable federal requirements. In no case will the Program Operator be considered the “responsible entity” for environmental reviews required under 24 CFR 58. In its role, Program Operator will:

1.3.1 Marketing
Market and advertise the Program pursuant to the CITY’s affirmative marketing plan, in accordance with the requirements in 24 CFR 92.351, including the requirementsto (i) identify those portions of the population of the CITY that are least likely to apply, (ii) establish specific marketing actions (e.g. advertising in specialty publications, native languages, etc.) intended to reach such populations, and (iii) maintain records of the results of such activities;

1.3.2 Application Intake
Develop needed application materials and establish and implement an application process in accordance with the CITY’s Program Guidelines;

1.3.3 Screening
Review individual applications, including income determinations, in accordance with the CITY’s Program Guidelines and the HOME requirements in 24 CFR part 92 to establish applicants’ eligibility for the Program and notify applicants of their status;

1.3.4 Inspections
In accordance with the CITY’s Program Guidelines, inspect units to ensure that such units meet the Program’s property standards, including but not limited to conducting visual assessments of potential lead-based paint hazards in any properties constructed prior to 1978 in accordance with 24 CFR part 35;

1.3.5 Program Policies
Apply the CITY’s Program Guidelines, including any updates thereto provided by the CITY pursuant to the notice provisions in Section 5.2 of this Agreement, ensuring that housing rehabilitation projects meet all HOME and Program requirements;

Subrecipient Agreement
City of Yuba City and
Habitat for Humanity Yuba /Sutter Page 4 of 30

1.3.6 Management of Contractors and Property Owners
During the term of a contract between Contractor and property owner, address questions, concerns, or disputes between Contractors and property owners, provide clarifications of Program Guidelines, federal, and HOME requirements, and otherwise work with Contractors and owners to ensure effective and compliant delivery of assistance.

SECTION 2: USE AND DISBURSEMENT OF HOME FUNDS

2.1 HOME, CDBG & CalHOME Budget
As part of this Agreement, the CITY is providing up to $429,250 in HOME funding for project expenses (i.e., direct costs of assisting homeowners), up to $12,500 in HOME funding for allowable administrative expenses, and $57,111 in HOME funding for activity delivery. The City is also providing $331,198 in CalHOME Reuse funds for project expenses with $49,679 available for activity delivery, and $162,071 in CDBG Program Income funds for project expenses with $34,034 available for activity delivery.

2.1.1 ITEMIZED BUDGET
The following line item budget is the basis for determining the amount of PROGRAM OPERATOR costs eligible for reimbursement by CITY. (See SCOPE OF WORK, Exhibit A, for a description of each reimbursable activity.)
Line Items
HOME
General
Admin
HOME
Activity
Delivery
CalHome
Activity
Delivery
CDBG
Activity
Delivery
Total
Budget
HOME Housing Rehabilitation Program
Mgmt. ($201,446 Activity Budget) $6,250 $42,304 N/A N/A $48,554 HOME Homeownership Assistance
Program Mgmt. ($227,804 Activity Budget) $6,250 $14,807 N/A N/A $21,057 CalHome 2006 & 2011 (Reuse funds) -
Housing Rehabilitation Program Mgmt.
($331,198 Activity Budget)
N/A N/A $49,679 N/A $49,679
CDBG (Program Income) - Housing
Rehabilitation Program Mgmt. ($162,071
Activity Budget)
N/A N/A N/A $34,034 $34,034
TOTAL $12,500 $57,111 $49,679 $34,034 $153,324
Total budget amounts for are based on a maximum 21% of the Housing Rehabilitation Activity Budget for HOME and CDBG, a maximum of 15% of the Housing Rehabilitation Activity Budget for CalHOME, $12,500 total Home General Administration expenses for Housing Rehabilitation and Homeownership Assistance, and a maximum 6.5% of the HOME Homeownership Assistance

Subrecipient Agreement
City of Yuba City and
Habitat for Humanity Yuba /Sutter Page 5 of 30
Activity Budget. HOME Loan Portfolio Management services will be billed at a cost of no more than $75 per hour and will be paid from General Administration.

HOME Program Income that is required to be expended prior to drawdown of open grant funds will be reimbursed by CITY to PROGRAM OPERATOR up to a maximum of 21% of the HOME Program Income loan amount.

Each invoice submitted to CITY by the PROGRAM OPERATOR must include the following:

1. Running total of expenditures to date by line item for HOME, CDBG, and CalHOME compensable services.

2. Documentation of services provided or expenditures, including copies of invoices, contracts, receipts, bills, time sheets, or other references documenting the charges billed to the CITY or incurred by PROGRAM OPERATOR.

2.1.2 BUDGET ADJUSTMENTS
A budget adjustment is defined as a change in value for reimbursable line items without a change in the dollar value for reimbursable services rendered by PROGRAM OPERATOR. CITY may consider PROGRAM OPERATOR budget adjustments after submittal of a formal proposal, including the following documentation:
a) Progress report outlining expenditures, milestones achieved to date and an outstanding balance;
b) Proposed budget outlining projected costs for the entire duration of the contract, highlighting where actual costs are expected to differ from the original budget;
c) Explanations and justifications for changes in each line item; and d) Plan outlining expected uses of additional funds received.

2.1.3 BUDGET AMENDMENTS
A budget amendment is defined as a change in value for reimbursable line items and a change in the dollar value for reimbursable services rendered by PROGRAM OPERATOR. CITY may consider PROGRAM OPERATOR budget amendments after submittal of a formal proposal, including the same documentation required for a budget adjustment as listed above; however, a budget amendment also requires a formal contract amendment approved in a resolution by the CITY.

2.1.4 CHARGE RATE SCHEDULE
PROGRAM OPERATOR will request reimbursement for this agreement based on an actual cost for actual work basis. Reasonableness, allowability and allocability of costs not to exceed the budget noted above.

Subrecipient Agreement
City of Yuba City and
Habitat for Humanity Yuba /Sutter Page 6 of 30

2.2 Term
This Agreement shall become effective upon the execution of this Agreement by the City of Yuba City and shall expire on December 31, 2024. The term of this Agreement may be extended up to an additional three years by mutual agreement of the City and Program Operator.

All HOME approved project funds must be expended by February 2, 2023, or by Housing and Community Development’s approved extension date. The Program Operator shall have until February 25, 2023 to make final requests for reimbursement. The deadline to submit all Drawdown Requests as defined by the STANDARD AGREEMENT (Exhibit C) between the City of Yuba City and Housing and Community Development is April 2, 2023, per Exhibit A , Section 5 of the Standard Agreement 18-HOME-12598.

2.3 Anticipated Production
The CITY and Program Operator anticipate at least 6 households will receive assistance from HOME Funds, 6 households from CalHOME Funds, and 3 households from CDBG Funds under this Agreement.

2.4 Project Completion Deadlines
The Program Operator must provide the CITY with all necessary project information. All HOME approved project funds must be expended by February 2, 2023. All CDBG and CalHOME funds must be expended by December 31, 2024.

2.5 Program Income
CITY and Program Operator acknowledge and agree that if any “Program Income,” as defined in 24 CFR 92.2, is received by the Program Operator, Program Operator will promptly remit Program Income to the CITY.

2.6 Disbursement of Funds
Program Operator must remit disbursement requests (or, in the case where no reimbursement is due, a report explaining inactivity) at least quarterly and may request payments no more than once per month. In all cases, Program Operator is prohibited from requesting HOME funds from the CITY until such funds are needed to pay HOME-eligible costs. Requests for disbursements are limited to the amount needed at the time of such request.

2.6.1 Reimbursement Basis
The CITY will provide HOME funds to the Program Operator for Program costs on a reimbursement basis only.

2.6.2 Project Costs

Subrecipient Agreement
City of Yuba City and
Habitat for Humanity Yuba /Sutter Page 7 of 30
Program Operator will submit a request for funds to the City for housing rehabilitation costs.

All requests for project-specific soft costs must be supported by (i) time-sheet documentation for any costs associated with Program Operator staff, (ii) invoices for any third-party costs, and/or (iii) other source documentation (e.g. receipts and mileage logs for travel expenses, etc.).

2.6.3 Administrative Costs
Requests for payment of eligible administrative costs must be supported by time-sheet documentation for any costs associated with Program Operator staff, invoices for any thirdparty costs, and/or other similar documentation.

2.6.4 Final Payment
Program Operator shall submit a final payment request by December 3, 2024.

SECTION 3: ADMINISTRATIVE AND PROGRAM REQUIREMENTS

3.1 Applicability of Uniform Administrative Requirements In performing under this Agreement, the requirements of 2 CFR part 200 apply to the Program Operator, except for the following provisions: §200.306, §200.307, §200.311 (except as provided in 24 CFR 92.257), §200.312, §200.329, §200.333, and §200.334. The provisions of 2 CFR 200.305 apply as modified by 24 CFR 92.502(c). If there is a conflict between definitions in 2 CFR 200 and 24 CFR part 92, the definitions in 24 CFR part 92 govern. While not intended to be an exhaustive list, Program Operator acknowledges that the requirements of 2 CFR 200 include, inter alia, compliance with:

3.1.1 Procurement
Standards and procedures consistent with 2 CFR 200.318 through 200.326 related to the procurement of property or services with HOME funds;

3.1.2 Audit
The requirement under 2 CFR 200.501 that the Program Operator must obtain a single- or program-specific audit if, during any given Program Operator fiscal year, Program Operator expends more than $750,000 in federal funds;

3.1.3 Cost Principles
The cost principles included in 2 CFR 200 Subpart F, including that any costs charged to HOME be supported by adequate documentation, allocable to the program, necessary, and reasonable.

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3.2 Administrative Funding
Within the funding limit provided in Section 2.1, Program Operator may use HOME funds for administrative expenses associated with operating the Program. Eligible administrative costs include costs associated with activities described in the general management oversight and coordination requirements at 24 CFR 92.207(a) to the extent that such activities are allowable under this Agreement. These include, but may not be limited to, costs associated with coordinating and overseeing the Program; advertising and promoting the Program, including affirmatively marketing the Program pursuant to the requirements of 24 CFR 92.351; maintaining appropriate Program records, including financial records, and submitting progress, financial, and other reporting to the CITY; taking applications, conducting intake interviews, and otherwise processing applications that do not proceed; and conducting required unit inspections.

3.2.1 Treatment of Income Determination and Inspection Costs Pursuant to 24 CFR 92.206, the Program Operator may also use HOME project funding for its project-specific soft costs associated with determining the income eligibility and completing property inspections of homes.

Alternatively, the costs associated with determining the income eligibility and completing property inspections of, may be charged as an administrative cost, provided that in no case may a single item of cost be charged both as an administrative expense and as a projectrelated soft cost as provided for herein.

3.3 Reversion of Assets
Upon receipt of the final payment by the CITY under this Agreement and after payment by the Program Operator of any final eligible costs under this Agreement, the Program Operator must transfer to the CITY any remaining HOME funds on hand and any accounts receivable attributable to the use of HOME funds to the CITY.

3.4 Compliance with Other Federal Requirements
Program Operator must comply with all applicable federal requirements, including those listed in 24 CFR part 92, Subpart H and 24 CFR part 5, Subpart A, and the nondiscrimination requirements of section 282 of the Act, as amended. This includes, but is not limited to, compliance with:

3.4.1 Equal Opportunity and Fair Housing
In accordance with 24 CFR 92.350 and 92.351, no person shall on the ground of race, color, religion, sex, disability, familial status, national origin, or age be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any Program activity funded in whole or in part from HOME funds. In addition, Program Operator shall develop

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and operate the Program in accordance with the requirement contained in 24 CFR 5.105, including but not limited to the following requirements:
a) The requirements of the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 24 CFR Part 100; Executive Order 11063, as amended by Executive Order 12259 (3 CFR 1958 B1963 Comp., P. 652 and 3 CFR 1980 Comp., P. 307) (Equal Opportunity in Housing) and implementing regulations at 24 CFR Part 107; and of the Civil Rights Act of 1964 (42 U.S. C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR Part 1;
b) The prohibition against discrimination on the basis of age under the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and implementing Regulations at 24 CFR Part 146, c) The requirements of Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR Part 8;
d) Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) and implementing regulations at 24 CFR part 135;
e) The requirements of Executive Order 11246, as amended by Executive Orders 11375, 11478, 12086, and 12107 (3 CFR 1964-65, Comp., p. 339) (Equal Employment Opportunity) and the implementing regulations issued at 41 CFR Chapter 60; f) The requirements of 24 CFR 92.351, 2 CFR 200.321, Executive Orders 11625, as amended, and 12432 (concerning Minority Business Enterprise), and 12138, as amended (concerning Women’s Business Enterprise); and
g) The requirements of 24 CFR 5.105(a)(2) requiring that HUD-assisted housing be made available without regard to actual or perceived sexual orientation, gender identity, or marital status and prohibiting Program Operators, owners, developers, or their agents from inquiring about the sexual orientation or gender identity of an applicant for, or occupant of, HUD-assisted housing for the purpose of determining eligibility for the housing or otherwise making such housing available. This prohibition on inquiries regarding sexual orientation or gender identity does not prohibit any individual from voluntarily self-identifying sexual orientation or gender identity.

3.4.2 Lobbying Disclosure Requirements
In accordance with the requirements of 24 CFR part 87, the Program Operator certifies, to the best of its knowledge and belief, that:

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a) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an PROGRAM OPERATOR, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement;
b) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any PROGRAM OPERATOR, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the Program Operatorshall complete and submit Standard FormLLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions; c) The Program Operator shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all such lower-tier parties shall certify and disclose accordingly; and
d) Program Operator acknowledges that this certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into.

Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

3.4.3 Drug-Free Workplace
The drug-free workplace requirements of 2 CFR part 2429;

3.4.4 Debarred or Suspended Entities
By signing this Agreement, Program Operator certifies that it is not presently listed by any federal PROGRAM OPERATOR as debarred, suspended, or proposed for debarment from any federal contract activity. If during the term of this Agreement this information changes, Program Operator shall notify CITY without delay. Such notice shall contain all relevant particulars of any debarment, suspension, or proposed debarment. Further, in carrying out its responsibilities hereunder, Program Operator will not employ, contract with, or otherwise make use of subcontractors, service providers, consultants, or any other party that is debarred, suspended, or proposed for debarment from any federal contract activity.

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3.4.5 Environmental Review
While the CITY is responsible for environmental reviews and determinations under this Agreement, Program Operator will cooperate and assist in documenting the environmental status of each assisted unit, including but not limited to the initial preparation of an Environmental Review for Activity/Project that is Exempt or Categorically Excluded Not Subject to Section 58.5 checklist. In no case will Program Operator request funding for a housing rehabilitation project with respect to a specific unit to be assisted without notification from the CITY that the project is either exempt from environmental review or that needed reviews have been completed.

3.4.6 Lead Based Paint
Program Operator will ensure that all assisted units in properties which were originally constructed prior to 1978 pass a visual assessment pursuant to the requirements of 24 CFR

35. 3.4.7 Conflict of Interest
Pursuant to 24 CFR 92.356, no employee, agent, consultant, officer, or elected official or appointed official of the CITY or the Program Operator, individually known as a “Covered Person,” that exercises or has exercised any functions or responsibilities with respect to HOME-assisted activities, or who are in a position to participate in a decision-making process or gain inside information with regard to HOME-assisted activities, is eligible to receive HOME assistance under the Program or to have a financial interest or financial benefit in any contract, subcontract, or other agreement with respect to the HOME-funded activities contemplated in this Agreement, or the proceeds from such activities. This provision shall apply to both Covered Persons and those with whom they have business or immediate family ties, during their tenure with the CITY or Program Operator or for one year thereafter.

Immediate family ties include (whether by blood, marriage or adoption) the spouse, parent (including a stepparent), child (including a stepchild), brother, sister (including a stepbrother or stepsister), grandparent, grandchild, and in-laws of a Covered Person. In the event a Covered Person, or a person with whom the Covered Person has business or family ties, is otherwise eligible and applies to the Program, Program Operator will immediately notify the CITY. CITY, in its sole discretion, may pursue an exception from HUD under the provisions of 24 CFR 92.356(d) to allow participation notwithstanding the conflict of interest. Only HUD may grant such an exception; neither the CITY nor the Program Operator may grant such an exception on its own. Moreover, the CITY and Program Operator shall comply with the conflict of interest requirements in 2 CFR 200.317 and 2 CFR 200.318 in the procurement of property and services.

3.4.8 Consultant Activities

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Program Operator will comply with the reasonable rate of compensation requirements in accordance with 24 CFR 92.358.

3.5 Recordkeeping
Program Operator shall maintain detailed records of all its activities under this Agreement, including records on all persons served pursuant to this Agreement. Representatives of the CITY will maintain administrative and financial records as required by 24 CFR 92.508, applicable to the activities to be carried out under this Agreement, including but not necessarily limited to:

3.5.1 General Administrative and Financial Records
a) Information about contractors, vendors, and other service providers to include, but not necessarily be limited to, verification of non-debarment and suspension, verification of qualifications and experience, legally binding contracts and agreements, invoices and payment records, and related correspondence (see 24 CFR Part 24 and 2 CFR part 2424); b) Financial information including, but not necessarily limited to, audits and related correspondence, accounting and financial records, indirect cost analyses, and internal controls and reconciliations;
c) Financial records identifying the source and use of funds for each person assisted under the Program pursuant to this Agreement, as well as well as underlying documentation (e.g. timesheet records, invoices/receipts, proof of payment, etc.) for all costs charged to HOME;
d) Records demonstrating compliance with the Uniform Administrative Requirements of 2 CFR 200, as applicable;

3.5.2 Program Recipient Records
Program recipient records in accordance with 24 CFR 92.508(a)(3) that demonstrate that each HOME-assisted project met the requirements of the HOME program including but not limited to:
a) Full descriptions of each household assisted with Program funds; b) Income determination proving eligibility and records to document the eligibility each household;
c) Records, consistent with the Program Guidelines, demonstrating that each Program assisted unit meets the Program’s property standards;

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d) Records demonstrating that each assisted household is income eligible in accordance with 24 CFR 5.603;
e) Copies of project documentation including construction contract and change orders;. f) Program Operator will return all records to the City upon project completion;

3.5.3 Records of Other Federal Requirements
Other records that include documentation of compliance with other federal requirements in accordance with 24 CFR 92.508 that includes the following requirements to the extent applicable to the Program:
a) Documentation of Program Operator’s efforts to affirmatively further fair housing, including both marketing efforts and records on the extent to which each racial and ethnic group and single-headed households (by gender of household head) applied for, participated in, or benefited from the Program;
b) Records concerning lead-based paint in accordance with 24 CFR Part 35; c) Records supporting any requests for exceptions to the conflict of interest provisions in accordance with 24 CFR 92.356.

3.6 Record Retention
All Program records will be returned to the City upon project completion and be maintained by the City for the lifetime of the loan. Notwithstanding, if there are litigation, claims, audits, negotiations or other actions that involve any of the records cited and that have commenced before the expiration of the retention periods outlined, such records must be retained until completion of the actions and resolution of all issues, or the expiration of the retention period, whichever occurs later.

3.7 Reporting Requirements
The Program Operator agrees to submit any and all reports required by the CITY or HCD within 30 days of the CITY or HCD’s request. The Program Operator will provide updates on Program implementation to the CITY on a quarterly basis. A quarterly report to City will include information on the marketing and startup of the Program, number of applications received, challenges or concerns about implementation, and estimates of the timing of upcoming commitments and expenditures of HOME funds.

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The CITY reserves the right to unilaterally alter, supplement, or otherwise modify the frequency, content, or form of delivery of required reports as needed to maintain adequate oversight of the Program, address changes to HOME regulations, or to address findings related to noncompliance by the Program Operator.

SECTION 4: DEFAULT AND TERMINATION

4.1 Default
The following are considered a default by the Program Operator under this Agreement:

1. Program Operator fails, in any manner, to fully perform and carry out any of the terms, covenants, and conditions of this Agreement;

2. Program Operator refuses or fails to proceed with the work and tasks contemplated in this Agreement in accordance with such diligence as will ensure their completion within the time fixed by the schedule set forth in this agreement;

3. Material noncompliance with any applicable HOME regulatory requirements in 24 CFR part 92 or any other applicable federal requirements; or any applicable State or local law, regulation, ordinance, or requirement related to the Program; and

4. Dissolution or other termination of existence; insolvency; forfeiture of right to do business in the State of California or business failure; appointment of a receiver of any part of the Program Operator’s property; the calling of any meetings of, or the assignment for the benefit of, creditors of the Program Operator; or the commencement of any proceedings under any bankruptcy or insolvency laws by or against the Program Operator which are not dismissed within 60 days.

4.2 Termination

4.2.1 Without Cause: CITY and PROGRAM OPERATOR will have the right to terminate this Agreement without cause by giving thirty (30) days prior written notice of intention to terminate pursuant to this provision, specifying the date of termination. CITY will pay to PROGRAM OPERATOR the compensation earned for work performed and not previously paid for to the date of termination. CITY will not pay lost anticipated profits or other economic loss. The payment of such compensation is subject to the restrictions on payment of compensation otherwise provided in this Agreement, and is conditioned upon receipt from PROGRAM OPERATOR of any and all plans, specifications and estimates, and other documents prepared by PROGRAM OPERATOR in accordance with this Agreement. No sanctions will be imposed.

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4.2.2 With Cause: This Agreement may be terminated by either party should the other party:
a) be adjudged a bankrupt, or
b) become insolvent or have a receiver appointed, or
c) make a general assignment for the benefit of creditors, or d) suffer any judgment which remains unsatisfied for thirty (30) days, and which would substantively impair the ability of the judgment debtor to perform under this Agreement, or e) materially breach this Agreement. Material breach includes but is not limited to PROGRAM OPERATOR failing to perform obligations under this Agreement, and PROGRAM OPERATOR failing to perform obligations in accordance with the PROGRAM’S time schedules set forth in STANDARD AGREEMENT.

For any of the occurrences except item v., termination may be effected upon written notice by the terminating party specifying the date of the termination. Upon a material breach, the Agreement may be terminated following the failure of the defaulting party to remedy the breach to the reasonable satisfaction of the non-defaulting party within thirty (30) days of the receipt of written notice specifying the breach. If the breach is not remedied within that thirty (30) day period, the non-defaulting party may terminate the agreement on further written notice specifying the date of termination. If the nature of the breach is such that it cannot be cured within a thirty (30) day period, the defaulting party may, submit a written proposal within that period which sets forth a specific means to resolve the default. If the nondefaulting party consents to that proposal in writing, which consent shall not be unreasonably withheld, the defaulting party shall immediately embark on its plan to cure. If the default is not cured within the time agreed, the non-defaulting party may terminate upon written notice specifying the date of termination. CITY will pay to PROGRAM OPERATOR the compensation earned for work performed and not previously paid for to the date of termination. CITY will not pay lost anticipated profits or other economic loss, nor will CITY pay compensation or make reimbursement to cure a breach arising out of or resulting from such termination.

4.2.3 Effects of Termination: Expiration or termination of this Agreement shall not terminate any obligations to indemnify, to maintain and make available any records pertaining to the Agreement, to cooperate with any audit, to be subject to offset, or to make any reports of pretermination contract activities.

4.2.4 Suspension of Performance: Independent of any right to terminate this Agreement, the authorized representative of CITY for which PROGRAM OPERATOR’S services are to be performed, may immediately suspend performance by PROGRAM OPERATOR, in whole or in part, in response

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to health, safety or financial emergency, or a failure or refusal by PROGRAM OPERATOR to comply with the provisions of this Agreement, until such time as the cause for suspension is resolved, or a notice of termination becomes effective.

SECTION 5: ADDITIONAL PROVISIONS

5.1 Fees to homeowners or members of households prohibited Program Operator is prohibited from charging application or other fees for the purpose of covering costs of administering the Program.

5.2 Notice
Except in the case of a notice of default, which must be delivered via mail or delivery service, the CITY may issue written notices as required or anticipated herein to the Program Operator via email, facsimile, mail, delivery service, or in person as may be appropriate. Notices delivered via electronic means or in person will be deemed delivered on the same day. Notices delivered via mail or delivery service shall be deemed delivered five (5) days after being placed in the United States mail or delivery service, postage pre-paid, addressed to the Program Operator as follows:

HABITAT FOR HUMANITY YUBA/SUTTER
ATTN: JOSEPH HALE, CEO
202 D STREET
MARYSVILLE, CA 95901
Notices due the CITY shall be in writing and may be delivered via email, facsimile, mail, delivery service, or in person as may be appropriate. Notwithstanding, a notice of default to the CITY must be delivered via certified mail with return receipt requested and shall be deemed delivered upon signature of a CITY representative. Notices to the CITY should be addressed as follows:

CITY OF YUBA CITY
ATTN: DIANA LANGLEY, CITY MANAGER
1201 CIVIC CENTER BLVD.

YUBA CITY, CA 95993

5.3 CITY Liability
The CITY shall have no liability except as specifically provided in this Agreement. The CITY, by execution of this Agreement, assumes no liability for damages caused to persons or property by reason of Program Operator providing goods or services herein or for injury to any employee, agent or subcontractor of the Program Operator performing under this Agreement.

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5.4 Indemnification
Program Operator shall indemnify and save and hold CITY, and its successors or assigns, harmless from and against any negligent claims, liabilities, losses and causes of action which may arise out of Program Operator’s activities under this Agreement, including all other acts or omissions to act on the part of Program Operator, including any person acting for or on its behalf, and, from and against any orders, judgments, or decrees which may be entered and from and against all costs, attorneys fees, expenses and liabilities incurred in the defense of any such claims, or in the investigation thereof. Program Operator’s indemnity shall not expire with the expiration or termination of this agreement but will continue indefinitely.

5.5 Insurance
See attached Exhibit B. Throughout the term of this Agreement, Program Operator must maintain general liability ($2,000,000 per occurrence and $2,000,000 aggregate) and automobile liability insurance ($1,000,000 per accident), and errors and omissions insurance ($1,000,000 per occurrence and $2,000,000 annual aggregate). The CITY must be listed as an additional insured party on each of the required insurance policies with at least 30 days’ notice prior to expiration.

Program Operator must also maintain workers compensation coverage in an amount specified by state law.

5.6 Independence of Program Operator
Nothing in this Agreement shall be deemed or construed to represent that Program Operator, or any of Program Operator’s employees or agents, are the agents, representatives, or employees of the CITY. Program Operator acknowledges that it is an independent contractor in its performance under this Agreement. Anything in this Agreement that provides the CITY with the right to direct Program Operator in its performance of its obligations under this Agreement is solely for purposes of compliance with local, state, and federal regulations.

5.7 Assignment
This Agreement is binding on the CITY and Program Operator, and their respective successors and assigns. Program Operator shall not assign or transfer its interest in this Agreement without the prior written approval of CITY which shall be in the CITY’s sole and exclusive discretion.

5.8 Amendments
This Agreement may be modified or amended only if the amendment is made in writing and is signed by both parties. Notwithstanding, in the event that (i) HUD imposes new or modified requirements in the HOME Program through regulation, administrative notice, publication, or other notice, or (ii) HUD specifically identifies violations of HOME program requirements pertaining to this Agreement or the Program undertaken hereunder, Program Operator agrees to comply with any new or modified requirements to ensure this Agreement and the activities hereunder remain in or are brought into compliance with such requirements. The CITY shall

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provide prompt notice to the Program Operator of any such modifications. Program Operator further agrees to execute an amendment to modify the terms of this Agreement in such manner as necessary to formally reflect and implement new HOME requirements or correct identified deficiencies.

5.9 Interpretation
This Agreement is the sole agreement between the two parties, and no prior or subsequent discussions, negotiations, or agreements, whether verbally or in writing, shall be merged with this Agreement. Any question or dispute regarding the interpretation of the terms of this Agreement shall be decided by the CITY. The CITY’s decision on any dispute under this Agreement, which shall be furnished in a manner of their choosing, shall be final and binding. In the event of a conflict between this Agreement, the Program Guidelines, and/or other regulatory requirements, the regulatory requirements control and the CITY reserves the right to resolve the conflict and determine the Program Operator’s compliance with such provisions.

5.10 Applicable Law
This Agreement shall be construed and interpreted in accordance with California law. In the event of legal action resulting from a dispute hereunder, the parties agree that the State and federal courts of the State of California shall have jurisdiction and that the proper forum for such action shall be in Sacramento, California.

5.11 Headings & Pronouns
The headings in this Agreement are for convenience only and do not affect the meanings or interpretation of the contents. Where appropriate, all personal pronouns used herein, whether used in the masculine, feminine, or neutral gender, shall include all other genders, and singular nouns used herein shall include the plural and vice versa.

5.12 Severability
If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.

IN WITNESS WHEREOF, the CITY and Program Operator have indicated their acceptance of the terms of this Agreement by their signatures below on the dates indicated.

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CITY OF YUBA CITY
______________________________
Diana Langley, City Manager
______________
Date
PROGRAM OPERATOR:

HABITAT FOR HUMANITY

YUBA/SUTTER
______________________________
Joseph Hale, Chief Executive Officer
______________
Date
ATTEST:

CITY CLERK, CITY OF YUBA CITY
______________________________
Jackie Sillman, City Clerk
______________
Date

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EXHIBIT “A(1)” – SCOPE OF WORK
City of Yuba City Housing Rehabilitation Program (PROGRAM) HOME, CDBG and CalHome Funds

PROGRAM OBJECTIVE
The purpose of the PROGRAM is to complete rehabilitation of eligible housing units located in the City of Yuba City. The units must be occupied by members of the Low to Moderate Income Group (LMI) as defined by the U.S. Department of Housing and Urban Development (HUD) and HCD.

PROGRAM GOALS
PROGRAM OPERATOR shall be held to the same goals, milestones, performance measurements, and requirements as entered into by CITY in STANDARD AGREEMENT and more thoroughly explained in the grant application. PROGRAM OPERATOR will assist CITY in the achievement of the following PROGRAM goals by the contract expiration date:

1. The CITY and Program Operator anticipate at least 3 households will receive assistance from HOME Funds, 6 households from CalHOME Funds, and 3 households from CDBG Funds under this Agreement.

PROGRAM SERVICES
COMPENSABLE SERVICES: PROGRAM OPERATOR will perform the following compensable services as outlined in the City-approved Program Guidelines (referred to as PROGRAM GUIDELINES) in implementation of PROGRAM activities, including administration and expenditure of HOME Program Income.
1) Refinement of housing rehabilitation program plans, procedures and forms: subject to review and approval by CITY, PROGRAM OPERATOR will establish, or make any necessary revisions to, the housing rehabilitation program design and procedures (including but not limited to the priorities among applicants and among rehabilitation measures, the limits and structure of financial assistance, and the recapture and affordability policies), as well as any other necessary forms, documents or sample contracts.
2) Outreach: PROGRAM OPERATOR will conduct sufficient advertisement of the housing rehabilitation program and other forms of outreach to ensure that enough eligible applicants participate in the program to meet the housing rehabilitation program goals. 3) Intake/assessment of eligibility: PROGRAM OPERATOR will assist property owners and residents in the completion of applications to permit eligibility determinations for rehabilitation assistance. PROGRAM OPERATOR will make provision for translation services to meet the needs of non-English-speaking applicants. In the event of applicants who have impaired mobility or

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other disabilities, PROGRAM OPERATOR will make provisions for completing the application at the applicant’s residence or other acceptable procedures for ensuring equal access to services.

Initial eligibility determination of households/structures will be made by the PROGRAM OPERATOR on the basis of satisfaction of income requirements, the apparent need for rehabilitation measures to correct relevant housing code or Housing Quality Standard (HQS) deficiencies, and any other pertinent criteria set forth in the approved program design. 4) Work write-ups: for each eligible unit to be assisted, PROGRAM OPERATOR will complete a detailed work write-up of the rehabilitation to be performed, including estimated costs of each activity, materials to be used, and industry or regulatory standards to be met. This write-up will be initialed and dated by the homeowner.
5) Solicitation and selection of contractors: PROGRAM OPERATOR will assist approved applicants in the identification, proper solicitation, and selection of contractors qualified to perform the authorized rehabilitation of eligible housing units. PROGRAM OPERATOR will provide forms and sample contract formats for the applicants to use in contracting with the contractors and will assist the applicant in ensuring that the description of the work contained in any contracts with contractors is accurate and complete.
6) Loan Review Committee: CITY will establish and maintain a loan review committee. The loan review committee will review all loan recommendations prepared by the PROGRAM OPERATOR.

No loan will be made under the housing rehabilitation program without the approval of a majority of the members of the loan review committee. Loan recommendations will be routed to loan committee members for consideration, or a loan committee meeting may be held virtually.
7) Loan closing: With the authorization of the City Loan Review Committee, the PROGRAM OPERATOR will execute all necessary documents and will coordinate with CITY the drawdown of funds as necessary to cover the expenses of approved applicants for activities authorized by executed loan agreements. The loan documents executed with applicants will include explicit provisions describing a) the occupancy requirements and other standards to maintain the eligibility of the HOME expenditures, and b) the conditions and procedures under which late payment penalties, default and/or foreclosure will occur. 8) Periodic and final inspections: PROGRAM OPERATOR will perform periodic site visits to ascertain that approved and contracted rehabilitation work is proceeding properly and satisfactorily, will authorize (with the owner’s written approval, including signature and date) appropriate change orders, and will mediate in the event of owner dissatisfaction with the work done by the contractor.
9) Approval of contractor payments: as rehabilitation progresses and as invoices are submitted by contractors, PROGRAM OPERATOR will verify that the expenses are reasonable and the work

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has been completed properly (including a sign-off by the owner), and will authorize drawdown of funds from CITY, and disbursement to the contractors. 10) Loan servicing/loan portfolio management: PROGRAM OPERATOR will assist CITY in managing the housing rehabilitation loan portfolio through the following tasks: reviewing loan status reports provided by CITY to determine loan clients in violation of the terms of their loan, corresponding with loan recipients who are in violation of the terms of their loan, suggesting remedies to both the CITY and loan recipient to correct any violations, and reviewing employment and income status at the request of CITY.
11) Maintenance of case files and other records: for each applicant, PROGRAM OPERATOR will maintain case files, including application and documentation of eligibility, work write-ups, the assistance agreement between the property owner and CITY (along with repayment provisions, documentation of liens and any other forms of security), contractor selection criteria, copy of contract between owner and contractors, documentation on all necessary licenses and permits, site visit/inspection reports (including final inspection), change orders, and approved contractor invoices for payment (with owner sign-off). PROGRAM OPERATOR will also maintain appropriate information on persons residing in the property, including a list or lists identifying persons in a project immediately before the project, after project completion, and those moving in during the project, as well as information on those displaced or temporarily relocated. PROGRAM OPERATOR will maintain these files until project completion when the original file will be returned to the City.

PROJECT SCHEDULE
Unless amended by mutual written agreement by PROGRAM OPERATOR and CITY, PROGRAM OPERATOR will perform the described housing rehabilitation tasks and complete the rehabilitation of eligible units in a timely manner.

OTHER PROGRAM REQUIREMENTS
1) Affordability provisions (Not Applicable for HOME): for activities benefiting low- and moderate-income persons, PROGRAM OPERATOR must adopt and make public the CITY’s standards for determining that for rental housing assisted under the program, the rents of units occupied by low- and moderate-income persons are ”affordable.” 2) Davis-Bacon requirements and other Labor Standards: these statutes require the payment of prevailing wages for HOME-assisted construction work, including construction or rehabilitation of residential property containing eight units or more, in excess of $2,000.

The Contract Work Hours and Safety Standards Act also applies to such activities. 3) Historic Preservation [16 U.S.C. 470 et seq. and 36 CFR Part 800]: these requirements mandate (a) consultation with specified agencies having responsibility for historic preservation to identify properties listed (or eligible for inclusion) in the National Register of

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Historic Places that may be subject to adverse effects by the proposed HOME activities, and (b) compliance with procedures or other requirements to avoid or mitigate such adverse effects.
4) National Flood Insurance Program: if a community has had notice for more than a year that an area has been identified by FEMA as having special flood hazards, HOME funds cannot be spent for acquisition or construction purposes within that area unless the community is participating in the National Flood Insurance Program and such insurance has been purchased for the properties in question.
5) Relocation, Real Property Acquisition, and One-For-One Housing Replacement: The acquisition of real property for a HOME-assisted project and the displacement of any person (family, individual, business, non-profit organization or farm) as a direct result of acquisition, rehabilitation, demolition or conversion for a HOME-assisted project must comply with 49 CFR part 24. PROGRAM OPERATOR must also conduct its HOME activities so as to minimize displacement, and if displacement occurs, the displaced persons or entities must be provided assistance consistent with the Uniform Relocation Act, as amended, or Section 104(d), as applicable. In addition, there must be a one-for-one replacement of any occupied (or vacant, occupiable) low- and moderate-income dwelling that is demolished or converted to another use in connection with a HOME-funded activity. 6) Lead-based Paint [24 CFR Part 35]: There is a general prohibition against the use of any lead-based paint in connection with any HOME activity involving the construction or rehabilitation of residential structures. If the structure was constructed prior to 1978, the tenants or purchasers must be notified of the hazards of lead-based paint poisoning; and, depending on the level of Federal assistance made available to the structure, paint inspection, risk assessment, treatment and/or abatement must be provided.

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EXHIBIT “A(2)” – SCOPE OF WORK
City of Yuba City Homeownership Assistance Program (PROGRAM) HOME and CalHome Funds

NATIONAL OBJECTIVE
The purpose of the PROGRAM is to provide low-interest loans to homebuyers purchasing a home located in the City of Yuba City. The homebuyer(s) must be members of the Low to Moderate Income Group (LMI) as defined by the U.S. Department of Housing and Urban Development (HUD) and HCD.

PROGRAM GOALS
PROGRAM OPERATOR shall be held to the same goals, milestones, performance measurements, and requirements as entered into by CITY in STANDARD AGREEMENT and more thoroughly explained in the grant application. PROGRAM OPERATOR will assist CITY in the achievement of the following PROGRAM goals by the contract expiration date:

1. Close on an estimated three (3) homeownership assistance loans as required to fully expend CITY’s homeownership assistance loan fund.

PROGRAM SERVICES
COMPENSABLE SERVICES: PROGRAM OPERATOR will perform the following compensable services as outlined in PROGRAM GUIDELINES in implementation of PROGRAM activities. 1) Refinement of homeownership assistance program plans, procedures and forms: subject to review and approval by CITY, PROGRAM OPERATOR will establish, or make any necessary revisions to, the homeownership assistance program design and procedures (including but not limited to the priorities among applicants, underwriting criteria, the limits and structure of financial assistance, and the recapture and affordability policies), as well as any other necessary forms, documents or sample contracts.
2) Outreach: PROGRAM OPERATOR will conduct sufficient advertisement of the homeownership assistance program and other forms of outreach to ensure that enough eligible applicants participate in the program to meet the homeownership assistance program goals. 3) Completion of loan applications; underwriting assessment: PROGRAM OPERATOR will assist homebuyers in completing loan applications, and will perform an assessment of each loan application to determine the HOME and/or CalHome eligibility of the loan. Initial eligibility determination of households will be made by the PROGRAM OPERATOR on the basis of satisfaction of income requirements, eligibility of the property being purchased, and any other pertinent criteria set forth in the approved program design.

PROGRAM OPERATOR will complete all work necessary to determine loan feasibility including obtaining appraisal, estimates of market value, credit reports and title reports, set up of lead risk

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assessment, if applicable, evaluating the financial condition of the applicant and summarizing any critical issues.
4) Loan Review Committee: CITY will establish and maintain a loan review committee. The loan review committee will review all loan recommendations presented to it by the PROGRAM OPERATOR. No loan will be made under the homeownership assistance loan program without the approval of a majority of the members of the loan review committee. 5) Loan closing: With the authorization of the City Loan Review Committee, the PROGRAM OPERATOR will execute all necessary documents and will coordinate with CITY the drawdown of funds as necessary to cover the expenses of approved applicants for activities authorized by executed loan agreements. The loan documents executed with applicants will include explicit provisions describing a) the occupancy requirements and other standards to maintain the eligibility of the HOME and/or CalHome expenditures, and b) the conditions and procedures under which late payment penalties, default and/or foreclosure will occur. 6) Loan servicing/loan portfolio management: PROGRAM OPERATOR will assist CITY in managing the homeownership assistance loan portfolio through the following tasks: reviewing loan status reports provided by CITY to determine loan clients in violation of the terms of their loan, suggesting remedies to the CITY to correct any violations, and reviewing employment and income status at the request of CITY.
7) Maintenance of case files and other records: for each applicant, PROGRAM OPERATOR will maintain case files, including application and documentation of applicant eligibility, property eligibility, the assistance agreement between the homebuyer and CITY (along with repayment provisions, documentation of liens and any other forms of security), and any other required documentation. PROGRAM OPERATOR will maintain these and other program and financial records in accordance with the general requirements for record keeping specified in Section 7. of this Agreement.

PROJECT SCHEDULE
Unless amended by mutual written agreement by PROGRAM OPERATOR and CITY, PROGRAM OPERATOR will perform the described homeownership assistance program tasks in a timely manner.

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EXHIBIT “B” – INSURANCE REQUIREMENTS
City of Yuba City Housing Rehabilitation Program (PROGRAM) PROGRAM OPERATOR shall procure and maintain for the duration of this Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the PROGRAM OPERATOR, his agents, representatives, or employees. PROGRAM OPERATOR shall maintain limits no less than:

1. Commercial General Liability, Including: $2,000,000 per occurrence and Premises and Operations $2,000,000 general aggregate
Contractual Liability
Personal Injury Liability
Independent Contractors
Bodily Injury, Property Damage

2. Automobile Liability: $1,000,000 per accident for
Owned, Non-Owned, bodily injury and property
and Hired Autos damage

3. Workers’ Compensation: As required by the State of California

4. Employer’s Liability: $1,000,000 per accident for bodily injury or disease

5. Professional Liability: $1,000,000 per claim and $2,000,000 annual aggregate
Any deductibles or self-insured retentions must be declared to and approved by the CITY. At the option of the CITY, either: insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the CITY, its officers, officials, employees and volunteers; or the PROGRAM OPERATOR shall provide a financial guarantee satisfactory to the CITY guaranteeing payment of losses and related investigations, claim administration and defense expenses.

The commercial general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions:

1. The CITY, its officers, officials, employees and volunteers are to be covered as insureds as respects: liability arising out of work or operations performed by or on behalf of the PROGRAM OPERATOR; or automobiles owned, leased, hired or borrowed by the PROGRAM OPERATOR.

2. For any claims related to this project, the PROGRAM OPERATOR’s insurance coverage shall be primary insurance as respects the CITY, its officers, officials, employees and volunteers.

Any insurance or self-insurance maintained by the CITY, its officers, officials, employees or

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volunteers shall be excess of the PROGRAM OPERATOR’s insurance and shall not contribute with it.

3. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled by either party, except after thirty (30) day’s prior written notice has been provided to the CITY.

If General Liability and Professional Liability coverages are written on a claims-made form:

1. The retroactive date must be shown and must be before the date of the contract or the beginning of contract work.

2. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.

3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a retroactive date prior to the contract effective date, the PROGRAM OPERATOR must purchase an extended period coverage for a minimum of five (5) years after completion of contract work.

4. A copy of the claims reporting requirements must be submitted to the PROGRAM OPERATOR for review.

Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the CITY. Exception may be made for the State Compensation Insurance Fund when not specifically rated.

Verification of Coverage
PROGRAM OPERATOR shall furnish the CITY with original certificates and amendatory endorsements effecting coverage required by this clause. The endorsements should be on forms provided by the CITY or on other than the CITY’s forms provided those endorsements conform to CITY requirements. All certificates and endorsements are to be received and approved by the CITY before work commences. However, failure to do so shall not operate as a waiver of these insurance requirements. The CITY reserves the right to require complete, certified copies of all required insurance policies, including endorsements effecting the coverage required by these specifications at any time.

Waiver of Subrogation
PROGRAM OPERATOR hereby agrees to waive subrogation which any insurer of consultant may acquire from vendor by virtue of the payment of any loss. PROGRAM OPERATOR agrees to obtain any endorsement that may be necessary to effect this waiver of subrogation.

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The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the CITY for all work performed by the consultant, its employees, agents and subcontractor.

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EXHIBIT “C” – STANDARD AGREEMENT
City of Yuba City Housing Rehabilitation and Homeownership Assistance Programs (PROGRAMS)

INSERT STANDARD AGREEMENT HERE

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EXHIBIT “D” – PROGRAM GUIDELINES
City of Yuba City Housing Rehabilitation and Homeownership Assistance Programs (PROGRAMS)

INSERT PROGRAM GUIDELINES HERE

City of Yuba City Housing Rehabilitation Program Guidelines 1 CITY OF YUBA CITY

SINGLE-FAMILY HOUSING

REHABILITATION

ASSISTANCE PROGRAMS
(HOME, CDBG, CalHome)

PROGRAM DESIGN AND PROCESS

HCD Version 07/2018
CalHome Approved (date)
CDBG Approved (date)
HOME Approved 8/18/2020

City of Yuba City Housing Rehabilitation Program Guidelines 2 CITY OF YUBA CITY

HOUSING REHABILITATION

PROGRAM GUIDELINES

TABLE OF CONTENTS

1.0. GENERAL

1.1. PROGRAM OUTREACH AND MARKETING

1.2. APPLICATION PROCESS AND SELECTION

1.3. LOAN PROCESS

1.4. CONFLICT OF INTEREST REQUIREMENTS

2.0. APPLICANT QUALIFICATIONS

2.1. INCOME LIMITS

2.2. INCOME QUALIFICATION CRITERIA

2.3. HOMEOWNER ELIGIBILITY & RESIDENCY REQUIREMENTS

3.0. PROPERTY ELIGIBLITY

3.1. CONDITIONS

3.2. ANTI-DISPLACEMENT POLICY AND RELOCATION ASSISTANCE

3.3. NOTIFICATIONS AND DISCLOSURES

4.0. THE PROGRAM LOAN

4.1. MAXIMUM AMOUNT OF PROGRAM ASSISTANCE

4.2. AFFORDABILITY PARAMETERS FOR HOMEOWNERS

4.3. RATES AND TERMS

4.4. GRANTS

4.5. APPRAISAL

4.6. INSURANCE

4.7. LOAN SECURITY

5.0. PROGRAM LOAN SERVICING AND MAINTENANCE

5.1. PAYMENTS ARE VOLUNTARY

5.2. RECEIVING LOAN REPAYMENTS

5.3. LOAN SERVICING POLICIES AND PROCEDURES

5.4. LOAN MONITORING PROCEDURES

5.5. DEFAULT AND FORECLOSURE

5.6. SUBORDINATIONS

6.0. CONSTRUCTION

6.1. STANDARDS

6.2. ELIGIBLE CONSTRUCTION COSTS

6.3. ELIGIBLE PROJECT COSTS

6.4. REPAIR CALLBACKS

7.0. EXCEPTIONS AND SPECIAL CIRCUMSTANCES

7.1. AMENDMENTS

7.2. EXCEPTIONS

8.0. DISPUTE RESOLUTION AND APPEALS PROCEDURES

8.1. PROGRAM COMPLAINT AND APPEAL PROCEDURE

8.2. GRIEVANCES BETWEEN PARTICIPANTS AND CONSTRUCTION

CONTRACTOR

City of Yuba City Housing Rehabilitation Program Guidelines 3 CITY OF YUBA CITY

HOUSING REHABILITATION

PROGRAM GUIDELINES

ATTACHMENTS TABLE OF CONTENTS
ATTACHMENT A: 24 CFR PART 5 ANNUAL INCOME INCLUSIONS AND EXCLUSIONS – FOR CDBG & HOME
ATTACHMENT A-1: TITLE 25 SECTION 6914 GROSS INCOME INCLUSIONS – FOR

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

CALHOME
ATTACHMENT C: MAXIMUM PURCHASE PRICE AFTER-REHAB VALUE LIMIT; HOME PER UNIT SUBSIDY LIMIT; CURRENT INCOME LIMITS;

BEDROOM & BATHROOM ADDITION STANDARDS
ATTACHMENT D: MARKETING PLAN
ATTACHMENT E: RESIDENTIAL ANTIDISPLACEMENT AND RELOCATION

ASSISTANCE PLAN
ATTACHMENT F: LOAN SERVICING POLICIES AND PROCEDURES
ATTACHMENT G: FORECLOSURE POLICY
ATTACHMENT H: CERTIFICATION OF OCCUPANCY
ATTACHMENT I: LEAD-BASED PAINT NOTICE OF PRESUMPTION AND HAZARD

REDUCTION FORM

City of Yuba City Housing Rehabilitation Program Guidelines 4 CITY OF YUBA CITY

HOUSING REHABILITATION

PROGRAM GUIDELINES
Adopted 10/2/2018

1.0. GENERAL
The above-named entity, hereinafter referred to as the “Sponsor”, has entered into a contractual relationship with the California Department of Housing and Community Development (“HCD”) and/or the U.S. Department of Housing and Urban Development (“HUD”) to administer one or more HCD- or HUD-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 or amortized 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 the “Program Operator” as designated by the Sponsor.

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 Sponsor 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 D. Flyers or other outreach materials, in English and any other language that is the primary language of a significant portion of the area residents, will be widely distributed in the Programeligible 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

City of Yuba City Housing Rehabilitation Program Guidelines 5 program receiving Federal funds. The Program Sponsor 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/Homeowner Contact
The Sponsor will utilize a waiting list. In response to a homeowner’s request, the homeowner is placed on the waiting list. Homeowners are offered the opportunity to qualify for assistance by waiting list priority (a first-come, first served basis).

The Program Operator will contact homeowners by mail and/or by telephone to advise of funding availability. The homeowner has 30 days to complete and return the loan application and supporting documentation. 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 waiting list at that time.

Should the waiting list be exhausted, the Program will be marketed in accordance with the Sponsor’s 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. An interview is scheduled with the applicant. 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.

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 Sponsor reserves the right to deny assistance to the household. In this case, the applicant may re-apply after six months have elapsed from the time of written assistance denial.

C. Household Selection
Households selected for participation in the Sponsor’s Housing Rehabilitation Program are those determined eligible upon completion of processes described in A. and B. above.

D. Initial Inspection/Work Write-Up/Estimate
Prospective units are inspected by the Program Operator, a certified housing inspector, or a Sponsor representative to determine eligibility and acceptability of

City of Yuba City Housing Rehabilitation Program Guidelines 6 properties for participation in the Program.

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 treated according to HUD regulations (Section 6.1.E & F) and cleared by a certified LBP inspector/assessor. Note: CalHome-funded projects do not require LBP compliance. CDBG projects shall refer to Chapter 20, Lead-Based Paint Requirements for guidance in the CDBG Grant Management Manual.

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 work write-up. Estimated costs are determined by the Program Operator who has years of experience in the building industry, and in reviewing contractor bids and verifying cost with materials suppliers. The homeowner reviews the completed work write-up and cost estimate, and the approved write-up is incorporated into bid documents.

E. Bid Solicitation
A bid walk-through date and time are scheduled. The homeowner may choose to solicit his/her own bids or request that the Program Operator solicit bids on his/her behalf. Invitations to bid are mailed to all eligible contractors on file in efforts to obtain three reasonable bids. Bid results will be provided to participating contractors.

Contractors must be licensed and bonded by the State of California Contractors Licensing Board. 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 10% of the Program Operator’s cost estimate, otherwise an explanation must be provided to the file for any bid selected exceeding 10% of the estimate. The homeowner is encouraged to accept the lowest reasonable bid.

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).

City of Yuba City Housing Rehabilitation Program Guidelines 7 Notices of non-award are mailed to participating contractors.

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 Sponsor and may not be charged to the homeowner’s loan. A Loan Review Committee meeting is scheduled to hear the loan request. The Loan Review Committee shall consist of at least 3 persons, including at least one city staff member. Section 1.3 provides additional information on the loan approval process. Once approved, loan documents are executed and the loan is funded.

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 work write-up, start date, pay schedule, and date of completion, with the homeowner and contractor. The construction contract and Notice to Proceed are executed.

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 confirm the job is on schedule and within budget. The Program Operator works with the Sponsor’s Building Inspector to ensure 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 write-up, 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. 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

City of Yuba City Housing Rehabilitation Program Guidelines 8 presented to the Sponsor’s Loan Review Committee for approval prior to Program Operator signing-off on the change order.

J. Progress Payments
Ninety percent (90%) of the contract amount is distributed to the contractor in the form of progress payments during construction. The final ten-percent (10%) of the contract amount is set aside as a retention payment. 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, Program Operator, and Sponsor or Sponsor’s Building Inspector, the payment authorization is signed by the homeowner and submitted for payment.

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, the contractor, and/or the Sponsor. The Sponsor’s Building Inspector performs a final inspection. Any corrections or deficiencies are noted and corrected by the contractor. 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 Sponsor’s Loan Review Committee must approve all loans and grants. The Loan Review Committee may approve assistance with CDBG financing exceeding 100 percent of after-rehabilitation value as needed in cases where no other financial resources are available to cover the cost of the repairs and where clear and convincing documentation exists, justifying why the exception is needed.

However, if the project is CalHome funded, the total financing cannot be more than 105 percent of the after- rehabilitation value. For HOME-funded loans, the total financing cannot be more than 100 percent of the after-rehabilitation value, unless per HOME Management Memorandum 13-01 at http://www.hcd.ca.gov/grants-funding/grantsmanagement-memos.shtml#home the entire HOME assistance amount is granted rather than loaned, due to a lack of any equity after rehabilitation, based on existing loans on the property and an after-rehabilitation value appraisal. In addition, the amount of HOME assistance, including Sponsor’s claimed Activity Delivery Costs, cannot exceed the Sponsor’s County maximum HOME Per Unit Subsidy Limit at http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml, and the after-rehabilitation value cannot exceed the HOME Maximum AfterRehabilitation Value. See Attachment C 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

City of Yuba City Housing Rehabilitation Program Guidelines 9 in writing.

1.4. CONFLICT OF INTEREST REQUIREMENTS
When the Sponsor’s program contains Federal funds, the applicable Conflict of Interest requirements of 24 CFR Section 570.611 shall be followed for CDBG assistance. 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 (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

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 or HUD program(s) and have their household income documented.

The income limits in place at the time of loan approval will apply when determining

City of Yuba City Housing Rehabilitation Program Guidelines 10 applicant income eligibility. All applicants must have incomes at or below 80% of the County’s area median income (AMI), adjusted for household size, as published by HCD/HUD each year. See Attachment C.

The link to the official HCD-maintained income limits for HOME- and CDBG-funded activities is: http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federalincome-limits.shtml (for HOME and CDBG, choose “State CDBG, HOME and NHTF – Income, Value and Rent Limits”; for CalHome-funded activities choose “Official State Income Limits”).

Household: means one or more persons who will occupy a housing unit. Unborn children will not be counted in family size determination.

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
Owner-Occupant - to be eligible, household income must be equal to or less than the applicable HCD/HUD 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 Attachment A for HOME and CDBG. 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.

2.1.2 OWNER-INVESTOR REQUIREMENTS - (eligible under only CDBG-funded programs)
Owner-Investor - There are no restrictions on the income of the owner-investor unless the owner-investor is a member of the Targeted Income Group (TIG) and is interested in qualifying for a Deferred Payment Loan (see Section 4.3.2.B.).

Owner-investor housing and debt ratios are considered, and a credit report is required, since the funding provided may create an additional monthly financial obligation. If an ownerinvestor has a mortgage on the property to be rehabilitated it is verified that all payments are current.

TENANT REQUIREMENTS (eligible under only CDBG-funded programs) Tenant - If a rental is currently occupied, the tenant's household income must be equal to, or less than, the applicable HCD/HUD income guidelines. Tenant will be asked to cooperate by providing income documentation and income will be projected for 12 months

City of Yuba City Housing Rehabilitation Program Guidelines 11 based on current income. See Attachments A and B.

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/HUD income limits. Income qualification criteria for HOME and CDBG, as shown in the most recent HCD programspecific guidance at http://www.hcd.ca.gov/grants-funding/income-limits/incomecalculation-and-determination-guide.shtml, 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. All documentation shall be dated within six 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 and CDBG 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 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

City of Yuba City Housing Rehabilitation Program Guidelines 12 Exclusions

2.3. HOMEOWNER ELIGIBILITY AND RESIDENCY REQUIREMENTS
The Sponsor’s Housing Rehabilitation Program allows for owner-occupied and ownerinvestor/tenant-occupied properties to participate in the Program. Owner-occupied units must be the owner’s principal place of residence. Note: Owner-investor/tenant-occupied properties are eligible under only CDBG funding, and must meet all requirements listed under section 2.3.2. 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.

2.3.1 OWNER-OCCUPIED
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 a current utility bill; and

2. Statement of unit's continued use as primary residence of the owner.

B. In the event that an 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 the heir to the property meets income requirements and intends to occupy the home as his/her principal residence.

Upon approval of the Sponsor, the heir may be permitted to assume the loan at the rate and terms the heir qualifies for under current participation guidelines. If the heir does not meet applicable eligibility requirements, the loan is due and payable.

Note: Loans provided by CalHome are not assumable.

C. If a homeowner converts the property to a rental unit, or any commercial or nonresidential use, the loan is due and payable, unless the loan was funded with CDBG and tenant and homeowner meet eligibility requirements as described in Section

2.3.2. below.

If the loan is funded with a CalHome Loan it is not transferable except under the following limited circumstances:
(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 of the Property where the spouse becomes an owner of the property;

City of Yuba City Housing Rehabilitation Program Guidelines 13 (c) 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
(d) A transfer to an inter vivos trust in which the Borrower is and remains the beneficiary and occupant of the property.

2.3.2. OWNER INVESTOR REQUIREMENTS (eligible only under CDBG-funded programs)
A. If the owner-investor sells or transfers title of the rehabilitated property for any reason, the loan is due and payable.

B. An owner-investor may convert a rental property to his or her personal residence if all conditions below exist:

1. He or she can prove that the previous tenant was not evicted without cause.

2. He or she is income eligible.

3. He or she requests approval from the Sponsor.

C. If an owner-investor converts the rental property to his or her personal residence, but is not income eligible, the loan is due and payable.

D. If the owner wants to convert the rehabilitated property to any commercial or nonresidential use, the loan is due and payable.

E. Over-income rental households occupying units in a project which will receive financial assistance for other eligible units will be allowed to stay in their respective units. To prevent owners from evicting ineligible tenants before applying for the Program, the owner must certify that no tenant has been forced to move without cause during the previous six months.

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.

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

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

City of Yuba City Housing Rehabilitation Program Guidelines 14 D. All repair work will meet Local Building Code standards. At a minimum, health and safety hazards must be eliminated. For CDBG the priority will be the elimination of health and safety hazards. Sponsor may also require elimination of code deficiencies. When HOME funds are used for housing 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.

Section 8 Housing Quality Standards may be required on rentals by Sponsor when CDBG funds are used.

3.1.1 MOBILE HOMES (CDBG only)
Only $50,000 of the total annual rehabilitation assistance portfolio per calendar year is to be used for mobile homes or manufactured homes not on a permanent foundation. The $50,000 is determined on a first-come, first-served basis.

3.2. ANTI-DISPLACEMENT POLICY AND RELOCATION ASSISTANCE 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 Sponsor's "Residential Anti-displacement and Relocation Assistance Plan" (Attachment E).

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 Sponsor/Program Operator, assistance may be provided for actual costs incurred from the applicant’s loan proceeds or as a grant (see Section 4.4. for allowable grants). HOME-funded projects will provide relocation assistance in the form of a grant, which shall be included in the maximum assistance amount.

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

3.3. NOTIFICATION AND DISCLOSURES - Not required by CalHome 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.

City of Yuba City Housing Rehabilitation Program Guidelines 15 When Lead hazards are present, a Notice of Lead Hazard Reduction Activity and a Lead Hazard Evaluation Report will also be provided (Attachment I).

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

4.0. THE PROGRAM LOAN

4.1. MAXIMUM 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. Maximum assistance shall not exceed $75,000 for CDBG-funded programs. For CalHome, the maximum loan amount is $60,000 and includes activity delivery. The maximum loan amount for mobile homes will be $10,000 (CDBG only). For HOME-funded programs, the maximum loan amount shall not exceed the Sponsor’s County maximum HOME Subsidy Limits Per Unit at http://www.hcd.ca.gov/grantsfunding/income-limits/state-and-federal-income-limits.shtml. See Attachment C for current limits.

4.2. AFFORDABILITY PARAMETERS FOR HOMEOWNERS
A. Except as allowed in Section 1.3, total indebtedness against property shall not exceed 100 percent of after-rehabilitation value as determined by “Estimates of Value” or by an appraisal, for CDBG or HOME projects. The exception for HOME loans is per HOME Management Memorandum 13-01 at
http://www.hcd.ca.gov/grants-funding/grants-management-memos.shtml#home wherein the entire HOME assistance amount is granted rather than loaned, due to a lack of any after-rehabilitation equity based on existing loans on the property. An estimate of after-rehab value will be made prior to making a commitment of funds using the method outlined in Section 4.5. Note: This does not apply to CalHome projects.

B. HOME-funded units’ after-rehabilitation values shall not exceed the HOME Program Maximum Purchase Price/After-Rehabilitation Value Limits for Sponsor’s County as updated by HUD and published on the HCD Website at http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml. See Attachment C for current limits.

C. Total indebtedness against property shall not exceed 105 percent of the afterrehabilitation value as determined by an appraisal for CalHome projects. An estimate of After-Rehab Value will be made prior to making a commitment of funds using the method outlined in Section 4.5. Note: This does not apply to HOME or CDBG projects.

D. Costs may be supplemented with personal financing or with other loan or grant programs which are sources of leverage for the Sponsor.

City of Yuba City Housing Rehabilitation Program Guidelines 16 E. Any bid within 10% of the Program Operator’s estimate may be selected, otherwise an explanation must be provided to the file for a bid selected exceeding 10% of the estimate.

4.3. RATES AND TERMS

4.3.1. OWNER-OCCUPANTS
A. Amortized Loans (CDBG only) – Amortized loans will bear a simple interest rate of three percent (3%) and will be secured by a deed of trust on the property unless otherwise approved by the Loan Review Committee. The term of all amortized loans will be for 30 years with no prepayment penalty. Amortized loans will be offered to homeowners whose housing costs do not exceed 30% of annual income.

A forty dollar ($40) minimum payment is required for a household to qualify for an amortized loan. Otherwise, a deferred payment loan will be offered.

B. Deferred Payment Loans – For loans funded with HOME or CalHome, homeowners are eligible for Deferred Payment Loans (DPL), at three percent (3%) simple interest. CDBG-funded loans may also be eligible for a DPL if the homeowner’s housing costs exceed 30% of annual income. Loans will be evidenced by a Promissory Note and secured by a Deed of Trust, with no payback required for 30 years unless the borrower sells or transfers title or discontinues residence in the dwelling. Payments may be made voluntarily on a DPL. Note: If it is determined by the Sponsor that repayment of a CalHome or CDBG Program loan at the maturity date causes a hardship to the homeowner, the Sponsor may opt the following:

1. Amend the note and deed of trust to defer repayment of the amount due at maturity, that is balance of the original principal plus the accrued interest, for up to an additional 30 years (at 3% additional interest). This may be offered one time;

2. Convert the debt at loan maturity; that is the balance of the original principal plus any accrued interest, to an amortized loan, repayable in 15 years at 3% additional interest.

C. 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 Sponsor, to assume the loan at the rate and terms the heir(s) qualifies for under current participation guidelines. Note: CalHome loans are not assumable.

D. If the homeowner dies and the heir(s) is/are not income eligible, the loan becomes all due and payable.

E. If a homeowner converts the rehabilitated property to any residential-rental, commercial or non-residential use, the loan becomes all due and payable, unless they meet requirements outlined in Section 2.3.1.

City of Yuba City Housing Rehabilitation Program Guidelines 17 F. As specified in the 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 Sponsor.

4.3.2. OWNER-INVESTORS (eligible under only CDBG-funded programs) The rate and terms for an owner-investor may vary depending on the owner’s financial situation below are the options available:

A. Amortized Loan – Below Market Interest Rate (BMIR) loan at 3 percent interest, secured by a deed of trust and with a maximum term of 15 years. In order to maintain maximum housing affordability and financial flexibility, the amortization period can be extended out to thirty (30) years, or monthly payments deferred or a portion thereof at the discretion of the Loan Review Committee.

B. DPL for a TIG owner-investor who agrees to comply with standard investor restrictions (i.e., Maintenance Agreement for minimum five years and recorded Rent Limitation Agreement for life of the loan), as outlined below. DPL terms are the same as those described in 4.3.2.B. above.

C. Rent Limitation Agreement (RLA) – An owner-investor who elects to rehabilitate a rental unit with CDBG financing must sign an RLA, which will be recorded. This agreement will specify:

1. In no instance shall rents exceed the U.S. Department of Housing and Urban Development (HUD) Fair Market Rent (FMR) schedule while the RLA is in effect.

2. Base Rent -- Vacant Unit
If the house is vacant, rent charges shall not exceed 30 percent of 80 percent of the Sponsor median income for the appropriate household size in that unit.

Owner-investor shall affirmatively seek TIG households. Where such efforts do not result in eligible TIG tenants, the owner-investor shall contact the Sponsor for guidance.

3. Base Rent -- Occupied Unit
If the house is occupied, rent charges shall not exceed 30 percent of the existing tenants' household income; or, where, before rehabilitation, rents already exceed 30 percent of the existing tenants' income, no rent increases shall be allowed which provide for rents plus utilities over 30 percent of the tenants' income.

4. Terms –BMIR finance will require rent limitation for a minimum of 5 years.

City of Yuba City Housing Rehabilitation Program Guidelines 18 DPL financing will require rent limitations for the full term of the loan.

5. Verification -- Each year during the term of the Agreement, the borrower shall provide the Sponsor with a written list of current occupants’ names and monthly rents. The Sponsor may verify this information with the occupant.

6. Compliance -- Failure to comply with these terms and conditions will result in the loan becoming due and payable. If necessary, foreclosure proceedings will be initiated.

D. Maintenance Agreement – As specified in the Rehabilitation Loan Agreement, an owner-investor who participates in the Program must maintain the property at postrehabilitation conditions for the term of the loan(s). In addition, if the property contains three (3) or more rental units, the owner-investor will be required to use a property manager to maintain those units. Should the property not be maintained accordingly, the loan will become due and payable, and if necessary, foreclosure proceedings will be initiated.

4.3.3 RATES AND TERMS FOR MOBILE HOMES (CDBG only)
For mobile homes or manufactured homes not on a permanent foundation, simple interest at a rate of zero percent (0%) will accrue from the date of recordation. The loan will be a deferred payment loan and will be fully due and payable upon sale of the unit, transfer of title, upon change in tenure from owner-occupant to rental, or upon relocation of the unit out of the city limits. After a period of five years from the date of recordation, the loan shall be forgiven.

4.3.4 FUNDING SOURCE METHODOLOGY
The Loan Review Committee will select the funding source that is most appropriate for the loan under consideration. When selecting a funding source, the Loan Review Committee will consider, among other factors, the amount of HOME, CDBG or CalHome funds available, whether or not the unit is owner-occupied, the total amount of the loan, any special circumstances, and the amount of program income on hand. HOME, CDBG and CalHome rules and regulations will also be taken into account when selecting a funding source for individual projects.

4.4. GRANTS
A. CDBG-funded programs may provide grants as follows:

A grant of up to $7,500 is available for any one of the following qualifying factors:

1. Senior Citizen - at least 62 years old; or

2. Handicapped – for only handicap modifications to a house with one or more physically handicapped occupants who would function more independently if

City of Yuba City Housing Rehabilitation Program Guidelines 19 such modifications were installed; or

3. Lowest Targeted Income Group – with gross annual income less than 50 percent of County median income; or

4. Equity maintenance – if financing rehabilitation entirely with a loan would cause indebtedness to exceed 100% of after-rehabilitation value.

B. HOME and CDBG provide grants for all actual costs of lead-based paint evaluation and reduction activities.

C. HOME and CDBG provide grants for relocation assistance. See Relocation Assistance Plan, Attachment E.

1. Owner-Occupant – Limit of $3,000.

2. Residential Tenant – Assistance will be provided at the level necessary to comply with the Uniform Relocation Act (URA) and Section 104(d) of the Housing and Community Development Act of 1974. Note: HOME funds cannot be used for tenant-occupied units.

D. 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 Sponsor or Program Operator determines estimates of value based on the sale prices of at least three (3) comparable properties, sold within the last six months (within one year of the assistance date, which is the date the promissory note is signed), and located within one mile 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 HCD/HUD Program regulations (See Attachment C). If three comparable properties cannot be found, or if there is any question regarding the AfterRehab 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 the HOME Program only, the cost of the appraisal will be paid by the Sponsor, and not included in the homeowner’s loan. The purpose of the appraisal is to determine that the after-rehabilitation value of the housing unit will not exceed the permitted amount per HCD/HUD Program regulations (See Attachment C), and that the combined loans will not exceed the maximum combined loan-to-value limit, as described in Section 4.2.A above.

City of Yuba City Housing Rehabilitation Program Guidelines 20 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 specifications for the new home. For the HOME Program only, the cost of the appraisal will be paid by the Sponsor, and not included in the homeowner’s loan. 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 HCD/HUD Program regulations (See Attachment C).

4.6. INSURANCE

4.6.1. FIRE INSURANCE
The homeowner shall maintain fire 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 Sponsor as Loss Payee for the amount of the Program loan(s). Evidence of this shall be provided to the Sponsor.

In the event the applicant fails to make the fire insurance premium payments in a timely fashion, 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 a longer period of time. 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. The premium may be paid by the Program loan for one year. Note: HOME and CDBG funds cannot be used to pay insurance cost beyond those identified as initial loan costs. 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 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 borrowers file. The premium may be paid by the Program loan for one year. Note: HOME funds cannot be used to pay insurance cost beyond those identified as initial loan costs. Note: 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 and Loan Agreement in favor of the Sponsor.

B. At the Sponsor’s discretion, a manufactured home in a mobile home park or on leased land that is not on a permanent foundation will be secured by an HCD 480.7 or an HCD 484 Statement of Lien, and will also include a Promissory Note and Loan Agreement.

City of Yuba City Housing Rehabilitation Program Guidelines 21 C. Entering a subordinate lien is acceptable. However, the Sponsor will not subordinate a first lien position once established.

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. Program loan payments will be made to:

City of Yuba City
Attn: Finance Division
1201 Civic Center Blvd.

Yuba City, CA 95993
B. The Sponsor will be the receiver of loan payments or recapture funds and will maintain a financial record-keeping system to record payments and file statements on payment status. Payments shall be deposited and accounted for in the Sponsor’s appropriate Program Income Account, as required by all three funding sources. The Program Sponsor will accept loan payments from borrowers prepaying deferred loans, from borrowers making payments in full upon sale or transfer of the property, and homeowners of tenant-occupied units. All loan payments are payable to the Sponsor. The Sponsor 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.

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 Sponsor at the time of annual occupancy verification per Attachment F:
• Proof of occupancy in the form of a copy of a current utility bill; • Statement of unit's continued use as a residence;

City of Yuba City Housing Rehabilitation Program Guidelines 22 • Declaration that other title holders do not reside on the premises; • Verification that Property Taxes are current; and
• Verification of current required insurance policies.

5.5. DEFAULT AND FORECLOSURE
If an owner defaults on a loan, and foreclosure procedures are instituted, they shall be carried out according to the Program Foreclosure Policy adopted by the Sponsor, and attached to these guidelines as Attachment G.

5.6. SUBORDINATIONS
The Sponsor 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 Sponsor 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.

C. The purpose of the new primary loan is to reduce the interest rate being paid and/or reduce the owner's payment.

D. The refinanced loan must have an impound account for taxes and insurances.

E. The refinancing terms must be acceptable to the Sponsor.

F. CDBG allows refinancing with CDBG funds in conjunction with only rehabilitation of the unit.

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. For CDBG the priority will be the elimination of health and safety hazards. Sponsor may also require elimination of code deficiencies. When HOME funds are used for housing 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. Section 8 Housing Quality Standards may be required on rentals by Sponsor when CDBG funds are used.

City of Yuba City Housing Rehabilitation Program Guidelines 23 B. Contracting Process

1. Contracting will be done on a competitive basis.

2. The homeowner will be the responsible agent, but the Sponsor and/or its Program Operator will prepare the work write-up, prepare and advertise the bid package, and assist the owner in negotiating the construction contract.

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

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. Contractors will be checked against HUD’s list of federally debarred contractors. No award will be granted to a contractor on this list.

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

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

D. Occupants of units constructed prior to 1978 will receive proper notification of Lead-Based Paint (LBP) hazards as identified in Section 3.3.A. Note: Units funded solely with CalHome funds are not required to comply with LBP regulations.

E. Units constructed prior to 1978 will also be inspected according to the following HUD regulations. Note: Units funded solely with CalHome funds are not required to comply with LBP regulations. For CDBG funded programs please refer to Chapter 20, Lead-Based Paint Requirements for guidance in the CDBG Grant Management Manual.

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.

City of Yuba City Housing Rehabilitation Program Guidelines 24 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 days prior to starting work.

3. If the amount of Federal assistance or the total amount of rehabilitation hard cost is more that $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. and 6.1.F.2.

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 allows the use of HOME funds to demolish and reconstruct owner-occupied residential structures. Reconstruction is defined as the demolition and construction of a structure. The Sponsor and/or 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 CDBG Test for Reconstruction, for projects funded with CDBG funds; or, using the State’s HOME Test for Reconstruction, for projects funded with HOME funds.

Additionally, the Sponsor must determine that the project’s value after reconstruction (housing and land combined) is less that the Maximum After-Rehabilitation Value for the Sponsor (see Attachment C, One-Family).

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.

Like for like requires that the structure being demolished must be replaced with a like structure (replace manufactured housing with manufactured housing, for example).

City of Yuba City Housing Rehabilitation Program Guidelines 25 However, additions may be approved by the HCD/HUD Program when required by Codes/Ordinances or to alleviate overcrowding. (See Attachment C) 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.

Depending on the outcome of the Statutory Worksheet (Environmental test), a reconstructed project may require Authority from the State before funds are committed to the project.

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. Rehabilitation or Replacement of a manufactured home not on a permanent foundation. Rehabilitation of a manufactured home may include the replacement of the unit with a used manufactured home and the cost to repair it, as long as the unit has been occupied and not used as a demonstration model. Should the unit meet the criteria for reconstruction a new manufactured home can be used for replacement and all cost associated with the purchase and transportation can be added to the loan.

D. Owner-occupied rehabilitation activity delivery fees, pursuant to Section 7733(f), as reimbursement to the Sponsor 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 work write-ups).

E. 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, improvements for handicapped accessibility, repair or replacement of major housing systems. A driveway 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, and bring it into compliance with current building codes and regulations. Painting and weatherization are included.

City of Yuba City Housing Rehabilitation Program Guidelines 26 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.

4. Upgrades
Eligible costs include additional bedrooms and bathrooms if the need can be demonstrated per HUD’s or Sponsor’s overcrowding guidelines listed in Attachment C. 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, installation of a stove or dishwasher; and repair or installation of fencing.

All improvements must be physically attached to the property and permanent in nature. Non-code property improvements (fencing, landscaping, driveway, etc.) will be limited to 15 percent of the rehabilitation loan amount. Any cash contribution by the property owner will be considered a general property improvement and be included in this percentage. 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 health and safety hazards and code compliance.

6.3. ELIGIBLE PROJECT COSTS
Examples of eligible project costs for all 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

City of Yuba City Housing Rehabilitation Program Guidelines 27 • Building Plan
• Termite Report
• Land Survey
• Grading Plan
• Recording Fees
• Fire/Course of Construction Insurance
• Flood Insurance, as applicable (not allowed with CalHome or HOME funds)
Costs are based on charges currently incurred by the Sponsor, or its Program Operator, for these products and/or services. Except for HOME loans, any cost increases charged to the Sponsor/Program Operator 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.

7.0. EXCEPTIONS AND SPECIAL CIRCUMSTANCES

7.1. AMENDMENTS
The Sponsor may make amendments to these Participant Guidelines. Any changes made shall be in accordance with federal and state regulations, shall be approved by the Sponsor’s Loan Committee and/or local governing body and submitted to HCD or HUD, as applicable, for approval.

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.

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

B. The Sponsor shall make a determination of the exception based on the recommendation of the Program Operator. The request can be presented to the Sponsor’s loan committee and/or governing body for decision.

City of Yuba City Housing Rehabilitation Program Guidelines 28 8.0. DISPUTE RESOLUTION AND APPEALS PROCEDURES

8.1. PROGRAM COMPLAINT AND APPEAL PROCEDURE
Complaints concerning the Sponsor’s 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 Sponsor. The Sponsor will then schedule a meeting with the Sponsor’s Loan Review Committee. Their written response will be made within thirty (30) working 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 or HUD, as applicable, within one year after denial or the filing of the Project Notice of Completion.

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.

City of Yuba City Housing Rehabilitation Program Guidelines 29 ATTACHMENT A
24 CFR Part 5 ANNUAL INCOME INCLUSIONS AND EXCLUSIONS
24 CFR Part 5 Annual Income Inclusions
§5.609 Annual income.
(a) Annual income means all amounts, monetary or not, which:
(1) Go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or
(2) Are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date; and (3) Which are not specifically excluded in paragraph (c) of this section. (4) Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access.
(b) Annual income includes, but is not limited to:
(1) The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services; (2) The 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 used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. 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;
(3) Interest, dividends, and other net income of any kind from real or personal property.

Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (b)(2) of this section. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD;
(4) The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a periodic amount (except as provided in paragraph (c)(14) of this section); (5) Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except as provided in paragraph (c)(3) of this section); (6) Welfare assistance payments.

City of Yuba City Housing Rehabilitation Program Guidelines 30 (i) Welfare assistance payments made under the Temporary Assistance for Needy Families (TANF) program are included in annual income only to the extent such payments:
(A) Qualify as assistance under the TANF program definition at 45 CFR 260.31; and
(B) Are not otherwise excluded under paragraph (c) of this section. (ii) If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare 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 or utilities; plus
(B) The maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under this paragraph shall be the amount resulting from one application of the percentage.
(7) Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling;
(8) All regular pay, special pay and allowances of a member of the Armed Forces (except as provided in paragraph (c)(7) of this section).
(9) For section 8 programs only and as provided in 24 CFR 5.612, any financial assistance, in excess of amounts received for tuition and any other required fees and charges, that an individual receives under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from private sources, or from an institution of higher education (as defined under the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered income to that individual, except that financial assistance described in this paragraph is not considered annual income for persons over the age of 23 with dependent children. For purposes of this paragraph, “financial assistance” does not include loan proceeds for the purpose of determining income.
24 CFR Part 5 Annual Income Exclusions
(c) Annual income does not include the following:
(1) Income from employment of children (including foster children) under the age of 18 years; (2) Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone); (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 (except as provided in paragraph (b)(5) of this section);

City of Yuba City Housing Rehabilitation Program Guidelines 31 (4) Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member;
(5) Income of a live-in aide, as defined in §5.403;
(6) Subject to paragraph (b)(9) of this section, the full amount of student financial assistance paid directly to the student or to the educational institution; (7) The special pay to a family member serving in the Armed Forces who is exposed to hostile fire;
(8) (i) Amounts received under training programs funded by HUD; (ii) 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); (iii) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program;
(iv) Amounts received under a resident service stipend. A resident service stipend is a modest amount (not to exceed $200 per month) 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. Such services may include, but are not limited to, fire patrol, hall monitoring, lawn maintenance, resident initiatives coordination, and serving as a member of the PHA's governing board. No resident may receive more than one such stipend during the same period of time;
(v) Incremental earnings and benefits resulting to any family member from participation in qualifying State 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;
(9) Temporary, nonrecurring or sporadic income (including gifts); (10) 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; (11) Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household and spouse);
(12) Adoption assistance payments in excess of $480 per adopted child; (13) [Reserved]
(14) 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

City of Yuba City Housing Rehabilitation Program Guidelines 32 Department of Veterans Affairs disability benefits that are received in a lump sum amount or in prospective monthly amounts.
(15) 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;
(16) Amounts paid by a State agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home; or
(17) Amounts specifically excluded by any other Federal statute 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 24 CFR 5.609(c) apply. A notice will be published in the FEDERAL REGISTER and distributed to PHAs and housing owners identifying the benefits that qualify for this exclusion. Updates will be published and distributed when necessary. [See https://www.federalregister.gov/documents/2014/05/20/2014- 11688/federally-mandated-exclusions-from-income-updated-listing for most recent notice] (d) Annualization of income. If it is not feasible to anticipate a level of income over a 12-month period (e.g., seasonal or cyclic income), or the PHA believes that past income is the best available indicator of expected future income, the PHA may annualize the income anticipated for a shorter period, subject to a redetermination at the end of the shorter period.

City of Yuba City Housing Rehabilitation Program Guidelines 33 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.

City of Yuba City Housing Rehabilitation Program Guidelines 34 ATTACHMENT B
PART 5 ANNUAL INCOME NET FAMILY ASSET INCLUSIONS AND EXCLUSIONS This table presents the Part 5 asset inclusions and exclusions as stated in the HUD Technical Guide for Determining Income and Allowances for HOME Program (Third Edition; January 2005).

Statements from 24 CFR Part 5 – Last Modified: January 2005 Inclusions

1. Cash held in savings accounts, checking accounts, safe deposit boxes, homes, etc. For savings accounts, use the current balance. For checking accounts, use the average 6-month balance. Assets held in foreign countries are considered assets.

2. Cash value of revocable trusts available to the applicant.

3. Equity in rental property or other capital investments. Equity is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and all reasonable costs (e.g., broker fees) that would be incurred in selling the asset. Under HOME, equity in the family's primary residence is not considered in the calculation of assets for owner-occupied rehabilitation projects.

4. Cash value of stocks, bonds, Treasury bills, certificates of deposit and money market accounts.

5. Individual retirement, 401(K), and Keogh accounts (even though withdrawal would result in a penalty).

6. Retirement and pension funds.

7. Cash value of life insurance policies available to the individual before death (e.g., surrender value of a whole life or universal life policy).

8. Personal property held as an investment such as gems, jewelry, coin collections, antique cars, etc.

9. Lump sum or one-time receipts, such as inheritances, capital gains, lottery winnings, victim's restitution, insurance settlements and other amounts not intended as periodic payments.

10. Mortgages or deeds of trust held by an applicant.

Exclusions

1. Necessary personal property, except as noted in number 8 of Inclusions, such as clothing, furniture, cars and vehicles specially equipped for persons with disabilities.

2. Interest in Indian trust lands.

3. Assets not effectively owned by the applicant. That is, when assets are held in an individual's name, but the assets and any income they earn accrue to the benefit of someone else who is not a member of the household and that other person is responsible for income taxes incurred on income generated by the asset.

4. Equity in cooperatives in which the family lives.

5. Assets not accessible to and that provide no income for the applicant.

6. Term life insurance policies (i.e., where there is no cash value).

7. Assets that are part of an active business. "Business" does not include rental of properties that are held as an investment and not a main occupation.

City of Yuba City Housing Rehabilitation Program Guidelines 35 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).

City of Yuba City Housing Rehabilitation Program Guidelines 36 ATTACHMENT C

MAXIMUM PURCHASE PRICE/AFTER-REHAB VALUE LIMIT FOR SUTTER COUNTY (HOME Value Limits as of 04/01/2018)
COUNTY NAME One-Family
SUTTER $242,000

HOME SUBSIDY LIMITS PER UNIT FOR SUTTER COUNTY
(Limits are effective 6/4/2018)
O-BDR 1-BDR 2-BDR 3-BDR 4-BDR
$147,074 $168,600 $205,017 $265,228 $291,136
HOUSEHOLD INCOME LIMITS FOR SUTTER COUNTY*
(Limits are effective 6/1/2018)
Number of Persons in Household
1 2 3 4 5 6 7 8
80% of
AMI
$33,600 $38,400 $43,200 $48,000 $51,850 $55,700 $59,550 $63,400 HCD 2018 INCOME LIMITS FOR CALHOME

ADJUSTED FOR FAMILY SIZE FOR SUTTER COUNTY
Income
Level
Household Size
1 2 3 4 5 6 7 8
80% $33,600 $38,400 $43,200 $48,000 $51,850 $55,700 $59,550 $63,400 Sponsor will insert the limits for the county in which the Program is located, and will update the income limits annually as HCD provides new information. The link to the official, HCDmaintained Value, Subsidy, and Income limits is: http://www.hcd.ca.gov/grantsfunding/income-limits/state-and-federal-income- limits.shtml (for HOME and CDBG limits, choose “State CDBG and HOME Income, Value and Rent Limits”; for CalHome income limits, choose “Official State Income Limits”).

SPONSOR 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

City of Yuba City Housing Rehabilitation Program Guidelines 37 • 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.
• Same rules apply to mobile home units.

The chart above is used as a guide to overcrowding.

City of Yuba City Housing Rehabilitation Program Guidelines 38 ATTACHMENT D

HOUSING REHABILITATION MARKETING PLAN

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

All marketing related to the Housing Rehabilitation Program is publicized in both English and Spanish. All marketing materials include information identifying the Sponsor’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 Sponsor 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 interest list.

Characteristics on all applicants and participants are collected and compared with the Sponsor’s demographics. Should the Sponsor 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

City of Yuba City Housing Rehabilitation Program Guidelines 39 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 YUBA CITY (Sponsor) with the requirements of federal regulations 24 CFR 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 Sponsor will take to minimize displacement and ensure compliance with all applicable federal and state relocation requirements. The Sponsor’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 Sponsor’s jurisdiction limits.

The Sponsor will provide permanent relocation benefits to all eligible “displaced” households either owneroccupied or renter-occupied units which are permanently displaced by the housing rehabilitation program (See Section E below.). In addition, the Sponsor 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 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 Sponsor programs/projects will be implemented in ways consistent with the Sponsor’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 Sponsor 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.

A. Minimizing Permanent Displacement and Temporary Relocation Resulting from Housing Rehabilitation or Reconstruction Activities
Consistent with the goals and objectives of activities assisted under the Act, the Sponsor will take the following steps to minimize the displacement of persons from their homes during housing rehabilitation or reconstruction funded by HUD programs:

City of Yuba City Housing Rehabilitation Program Guidelines 40 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 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 Sponsor 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 Sponsor to ensure that the owner occupant or tenant in the project does

City of Yuba City Housing Rehabilitation Program Guidelines 41 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 housing 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 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 cost incurred. The housing 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 shall 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

City of Yuba City Housing Rehabilitation Program Guidelines 42 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; 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 Sponsor’s 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 rehabilitation program will consult with Sponsor’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 Sponsor’s 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 Sponsor 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 Sponsor must document that any lost units are replaced and any occupants of

City of Yuba City Housing Rehabilitation Program Guidelines 43 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 Sponsor to provide funds for an activity that will directly result in such demolition or conversion, the Sponsor 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 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 Sponsor is responsible for tracking the replacement of housing and ensuring that it is provided within the required period. The Sponsor 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 Sponsor 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 HUD40054)

City of Yuba City Housing Rehabilitation Program Guidelines 44 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 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 Sponsor is following it’s 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 Sponsor 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 housing rehabilitation activities funded by CDBG or other federal programs.

City of Yuba City Housing Rehabilitation Program Guidelines 45 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)

City of Yuba City Housing Rehabilitation Program Guidelines 46 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)

City of Yuba City Housing Rehabilitation Program Guidelines 47 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

City of Yuba City Housing Rehabilitation Program Guidelines 48 ATTACHMENT F

LOAN SERVICING POLICIES AND PROCEDURES

FOR THE CITY OF YUBA CITY
The City of Yuba City, hereafter called “Sponsor,” has adopted these policies and procedures in order to preserve its financial interest in properties, whose “Borrowers” have been assisted with public funds. The Sponsor 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 Sponsor 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 follow areas: 1) making required monthly payments or voluntary payments on a loan’s principal and interest; 2) required payment of property taxes and insurance; 3) required Request for Notice of Default on all second mortgages; 4) loans with annual occupancy restrictions and certifications 5) required noticing and limitations on any changes in title or use of property; 6) required noticing and process for requesting a subordination during a refinance; 7) processing of foreclosure in case of default on the loan.

1. Loan Repayments:

The Sponsor will collect monthly payments from those borrowers who are obligated to do so under Notes which are amortized promissory notes. Late fees will be charged for payments received after the assigned monthly date.

For Notes which are deferred payment loans, the Sponsor must accept voluntary payments on the loan. Loan payments will be credited to principal. The Borrower may repay the loan balance at any time with no penalty.

2. Payment of Property Taxes and Insurance:

As part of keeping the loan from going into default, Borrower must maintain property insurance coverage naming the Sponsor as loss payee. Except for HOME-funded loans, if Borrower fails to maintain the necessary insurance, the Sponsor 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 located in a 100-year floodplain, the Borrower will be required to carry the necessary flood insurance. A certificate of insurance for flood and for standard property insurance naming the City as a lender loss payee will be required at close of escrow. The Sponsor will verify the insurance on an annual basis.

Property taxes must be kept current during the term of the loan. If the Borrower fails to maintain payment of property taxes then the Sponsor may pay the taxes current and add the

City of Yuba City Housing Rehabilitation Program Guidelines 49 balance of the tax payment plus any penalties to the balance of the loan (not permissible when funded with HOME). Wherever possible, the Sponsor 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.

3. Required Request for Notice of Default:

When the Borrower’s loan is in second position behind an existing first mortgage, it is the Sponsor's policy to prepare and record a "Request for Notice of Default" for each senior lien in front of Sponsor’s loan. This document requires any senior lienholder listed in the notice to notify the Sponsor of initiation of a foreclosure action. The Sponsor will then have time to contact the Borrower and assist them in bringing the first loan current. The Sponsor can also monitor the foreclosure process and go through the necessary analysis to determine if the loan can be made whole or preserved. When the Sponsor is in a third position and receives notification of foreclosure from only one senior lienholder, it is in their best interest to contact any other senior lienholders regarding the status of their loans.

4. Annual Occupancy Restrictions and Certifications:

On owner-occupant loans the Sponsor may require that Borrowers submit utility bills and/or other documentation annually to prove occupancy during the term of the loan. For CDBG, some loans may have income and housing cost evaluations, which require a household to document that they are not able to make repayments, typically every five years. These loan terms are incorporated in the original note and deed of trust. On HOME-funded loans, annual occupancy verification will occur within 45 days of the anniversary date of the loan.

5. 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 Sponsor in writing of any change. Sponsor 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 Sponsor. Changes in title or occupancy must be in keeping with the objective of benefit to lowincome households (below 80 percent of AMI).

Change from owner-occupant to owner-occupant occurs at a sale. When a new owner-occupant is not low-income, the loan is not assumable and the loan balance is immediately due and payable.

If the new owner-occupant qualifies as low-income, the purchaser may either pay the loan in full or assume all loan repayment obligations of the original owner-occupant, subject to the approval of the Sponsor’s Loan Committee (depends on the HCD program).

If a transfer of the property occurs through inheritance, the heir (as owner-occupant) may be provided the opportunity to assume the loan at an interest rate based on household size and

City of Yuba City Housing Rehabilitation Program Guidelines 50 household income, provided the heir is income eligible. If the heir intends to occupy the property and is not low-income, the balance of the loan is due and payable. If the heir intends to act as an owner-investor, the balance of the loan may be converted to an owner/investor interest rate and loan term and a rent limitation agreement is signed and recorded on title. All such changes are subject to the review and approval of the Sponsor’s Loan Committee.

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. In some cases, Borrowers may request that the Sponsor 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. If the use of the property is converted to a fully non-residential use, the loan balance is due and payable.

6. Requests for Subordinations:

When a Borrower wishes to refinance the property, they must request a subordination request to the Sponsor. The Sponsor will subordinate their loan only when 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 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 committee for review and approval. Upon approval, the escrow company will provide the proper subordination document for execution and recordation by the Sponsor.

7. 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; or 4) default on senior loans, the Sponsor will send out a letter to the Borrower notifying them of the default situation. If the default situation continues, the Sponsor may start a formal process of foreclosure.

When a senior lienholder starts a foreclosure process and the Sponsor is notified via a Request for Notice of Default, the Sponsor, 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. Sponsor 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 Sponsor may cure the foreclosure and add the costs to the balance of the loan with a Notice of Additional Advance on the existing note.

City of Yuba City Housing Rehabilitation Program Guidelines 51 If the Sponsor 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 Sponsor 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 Sponsor can afford to pay for the foreclosure process and pay off the senior lienholder and retain some or all of their investment.

If the Sponsor 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 Sponsor 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 Sponsor determines the reinstatement and maintenance of the property not to be cost effective and allows the senior lienholder to complete foreclosure, the Sponsor's lien may be eliminated due to insufficient sales proceeds.

Sponsor as Senior Lienholder
When the Sponsor 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 Sponsor may consider foreclosure. Sponsor’s staff will consider the following factors before initiating foreclosure:
1) Can the loan be cured and can the rates and terms be adjusted to allow for affordable payments such that foreclosure is not necessary?
2) Can the Borrower refinance with a private lender and pay off the Sponsor? 3) Can the Borrower sell the property and pay off the Sponsor? 4) Does the balance warrant foreclosure? (If the balance is under $5,000, the expense to foreclose may not be worth pursuing.)
5) Will the sales price of home "as is" cover the principal balance owing, necessary advances, (maintain fire 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 Sponsor 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 Sponsor to prevent foreclosure (such as, funds to bring a delinquent BMIR current or pay

City of Yuba City Housing Rehabilitation Program Guidelines 52 off a DPL).

At the end of thirty days, the Sponsor 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 Sponsor of all required documentation to initiate foreclosure (Note and Deed of Trust usually) and funds required from the owner to cancel foreclosure proceedings. The service will keep the Sponsor 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 Sponsor 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 Sponsor could contract with a local real estate broker to list and sell the home and use those funds for Program income-eligible uses.

City of Yuba City Housing Rehabilitation Program Guidelines 53 ATTACHMENT G

CITY OF YUBA CITY

FORECLOSURE POLICY
Sponsor As Junior Lienholder
It is the City of Yuba City’s (Sponsor’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 Sponsor 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. When the Sponsor is in a third position and receives notification of foreclosure from only one senior lienholder, it would be in their best interest to contact both senior lienholders regarding the status of their loans.

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 (fire insurance premiums, property taxes, property protection costs, etc.), and foreclosure costs (fees for legal counsel, recordings, certified mail, etc.)
Once the Sponsor 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 Sponsor 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 Sponsor 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 Sponsor determines the reinstatement and maintenance of the property not to be cost effective and allows the senior lienholder to complete foreclosure, the Sponsor's lien may be eliminated due to insufficient sales proceeds.

Sponsor As Senior Lienholder
When the Sponsor is in a first position, or the 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 Sponsor may

City of Yuba City Housing Rehabilitation Program Guidelines 54 consider foreclosure. Sponsor staff will consider the following factors before initiating foreclosure:
- Can the loan be cured (brought current or paid off) by the owner without foreclosure?
- Can the owner refinance with a commercial lender and pay off the Sponsor? - Can the owner sell the property and pay off the Sponsor? - Does the balance warrant foreclosure? (If the balance is under $5,000, the expense to foreclose may not be worth pursuing.)
- Will the sales price of home "as is" cover the principal balance owing, necessary advances, (maintain fire 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 Sponsor may opt to initiate foreclosure. The owner 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 Sponsor to prevent foreclosure (such as, funds to bring a delinquent BMIR current or pay off a DPL).

At the end of thirty days, the Sponsor 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 Sponsor of all required documentation to initiate foreclosure (Note and Deed of Trust usually) and funds required from the owner to cancel foreclosure proceedings. The service will keep the Sponsor 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 Sponsor would then contact a real estate broker to market the home.

City of Yuba City Housing Rehabilitation Program Guidelines 55 ATTACHMENT H

CERTIFICATION OF OCCUPANCY

CITY OF YUBA CITY
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: _______________________________________________________________ Occupant: _______________________________________________________________ Occupant: _______________________________________________________________ Occupant: _______________________________________________________________ Occupant: ___________________________________________________________

City of Yuba City Housing Rehabilitation Program Guidelines 56 ATTACHMENT I

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:

HCD Version 03/2018
City of Yuba City
Homebuyer
Program Guidelines

For:

HOME Investment Partnerships Program
CalHome Program
Serving the City of Yuba City
HOME Approved (8/18/2020)
CalHome Approved (date)

City of Yuba City Homebuyer Program Guidelines Page 2

HOMEBUYER PROGRAM GUIDELINES
Table of Contents

1.0. GENERAL

1.1. PROGRAM OUTREACH AND MARKETING

1.2. APPLICATION PROCESS AND SELECTION

1.3. THE HOME PURCHASE PROCESS

1.4. HOMEBUYER COSTS

1.5. HOMEBUYER EDUCATION

1.6. CONFLICT OF INTEREST REQUIREMENTS

1.7. NON-DISCRIMINATION REQUIREMENTS

2.0. APPLICANT QUALIFICATIONS

2.1. CURRENT INCOME LIMITS

2.2. INCOME QUALIFICATION CRITERIA

2.3. DEFINITION OF AN ELIGIBLE HOMEBUYER

3.0. HOUSING UNIT ELIGIBILITY

3.1. LOCATION AND CHARACTERISTICS

3.2. CONDITIONS

3.3. ANTI-DISPLACEMENT POLICY AND RELOCATION ASSISTANCE

3.4. PROPER NOTIFICATION AND DISCLOSURES

4.0. PURCHASE PRICE LIMITS

5.0. THE PRIMARY LOAN
A. QUALIFYING RATIOS
B. INTEREST RATE
C. LOAN TYPE AND TERM
D. IMPOUND ACCOUNT

6.0. THE PROGRAM LOAN
A. MAXIMUM AMOUNT OF PROGRAM ASSISTANCE
B. NON-RECURRING CLOSING COSTS
C. AFFORDABILITY PARAMETERS FOR HOMEBUYERS
D. RATES AND TERMS FOR PROGRAM LOANS
E. LOAN-TO-VALUE RATIO

7.0. PROGRAM LOAN REPAYMENT

7.1. PAYMENTS ARE VOLUNTARY

7.2. RECEIVING LOAN REPAYMENTS

7.3. DUE UPON SALE OR TRANSFER

7.4. LOAN SERVICING POLICIES AND PROCEDURES

7.5. LOAN MONITORING PROCEDURES

8.0. PROGRAM LOAN PROCESSING AND APPROVAL

8.1. COMPLETION OF UNDERWRITING AND APPROVAL OF PROGRAM LOAN

8.2. PRIMARY AND PROGRAM LOAN DOCUMENT SIGNING

8.3. ESCROW PROCEDURES

9.0. SUBORDINATE FINANCING

10.0. EXCEPTIONS AND SPECIAL CIRCUMSTANCES

10.1. DEFINITION OF EXCEPTION

10.2. PROCEDURES FOR EXCEPTIONAL CIRCUMSTANCES

11.0. DISPUTE RESOLUTION AND APPEALS PROCEDURE

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TABLE OF CONTENTS (CONTINUED)

ATTACHMENTS
ATTACHMENT A: 24 CFR PART 5 ANNUAL INCOME INCLUSIONS AND EXCLUSIONS ATTACHMENT B: ANNUAL INCOME NET FAMILY ASSET INCLUSIONS AND EXCLUSIONS ATTACHMENT C: MAXIMUM PURCHASE PRICE/AFTER-REHAB VALUE LIMITS; HOME PER UNIT SUBSIDY LIMITS PER UNIT; CURRENT INCOME LIMITS
ATTACHMENT D: LOAN SERVICING POLICIES AND PROCEDURES
ATTACHMENT E: SELLER'S LEAD-BASED PAINT DISCLOSURE
ATTACHMENT F: DISCLOSURE TO SELLER WITH VOLUNTARY, ARM'S LENGTH,

PURCHASE OFFER
ATTACHMENT G: INSTRUCTIONS TO HOMEBUYER
ATTACHMENT H: LEAD-BASED PAINT NOTICE OF PRESUMPTION AND HAZARD REDUCTION FORM
ATTACHMENT I: HOMEBUYER PROGRAM LEAD COMPLIANCE DOCUMENT CHECKLIST

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CITY OF YUBA CITY

HOMEBUYER PROGRAM GUIDELINES

1.0. GENERAL
The above–named entity, hereinafter referred to as the “Sponsor,” has entered into a contractual relationship with the California Department of Housing and Community Development (“HCD”) to administer one or more HCD-funded homebuyer programs. The homebuyer program described herein (the “Program”) is designed to provide assistance to eligible homebuyers in purchasing homes, also referred to herein as “housing units”, located within the Program’s eligible area, as described in Section 3.1.A. The Program provides this assistance in the form of deferred payment “silent” second priority loans as “Gap” financing toward the purchase price and closing costs of affordable housing units that will be occupied by the homebuyers as their primary residence. The Program will be administered by the “Program Operator” as designated by the Sponsor.

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 Sponsor 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. Flyers or other outreach materials, in English and any other language that is the primary language of a significant portion of the area residents, will be widely distributed in the Program-eligible area and will be provided to any local social service agencies. The Program may sponsor homebuyer classes to help educate homebuyers about the home buying process and future responsibilities. Persons who have participated in local homebuyer seminars will be notified about the Program.

B. The Program Operator will work with local real estate agents and primary lenders to explain the Program requirements for eligible housing units and homebuyers, and to review Program processes. Local real estate agents and primary lenders will also be encouraged to have their customers participate in the Program.

C. Section 504 of the Rehabilitation Act of 1973 prohibits the exclusion of an

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otherwise qualified individual, solely by reason of disability, from participation under any program receiving Federal funds. The Program Sponsor 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. The Sponsor maintains a waiting list of applicants. Each applicant is asked to complete an application form, which asks for sufficient information concerning income, employment, and credit history to establish preliminary eligibility for Program participation. Completed applications are processed on a first-comefirst-served basis. Priority can be given to residents who live or work in Yuba City. Applications are deemed complete only if all information is completed, the application is signed and dated, and a primary lender’s pre-qualification letter is attached to the application. Incomplete applications are returned to the applicant and will not be date/time stamped until complete.

B. Once the applicant’s name comes to the top of the waiting list, their Program eligibility is confirmed and they are invited to a briefing regarding participation in the Program. At the briefing the application is reviewed and the potential homebuyer is given a “Preliminary Eligibility Letter” for the Program along with the following forms: Program Brochure, Attachment (G) Instructions to Home Buyer, List of Participating Lenders, Attachment (E) Sellers Lead-Based Paint Disclosure and the EPA Booklet (Protect Your Family from Lead in Your Home) and (F) Notice to Seller.

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 Sponsor reserves the right to deny assistance to the household. In this case, the applicant may re-apply after six months have elapsed from the time of written assistance denial.

C. Each applicant must participate in individual Homebuyer Counseling provided by the Program Operator and receive a certificate of completion.

D. The potential homebuyer is given 90 days in order to find a qualified home and begin securing a primary loan for the housing unit. If during the 90-day time frame, the potential homebuyer is unable to purchase a home, an extension may be given. However, if it appears the potential homebuyer cannot participate in the Program, the reservation of funds expires and the next person on the waiting list is given an opportunity to participate in the Program.

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1.3. THE HOME PURCHASE PROCESS
A. The following is a simplified example of how a primary lender would analyze a homebuyer’s finances to determine how much the homebuyer could afford to borrow from the primary lender towards homeownership.

DEBT SERVICE
FOR A FAMILY OF FOUR EARNING $3,388 PER MONTH

HOUSING PAYMENTS TOTAL OVERALL PAYMENTS
Principal & Interest Payment $ 865 $1,180 Housing
Insurance 82 +200 Other Debt Service
Taxes 233 $1,380 Total Debt Service
Total Housing Expense $1,180 (Overall debt service per month is 41% of $3,388) (PITI is 35% of $3,388)

OTHER HOUSEHOLD DEBT SERVICE
Car Payment $ 150
Credit Card Payment 50
Total Other Debt $ 200
A $865 per month loan payment equates to borrowing $143,000 at 5.88% for a 30 year term.

SUBSIDY CALCULATION
FOR A FAMILY OF FOUR EARNING $3,388 PER MONTH
Purchase Price of Property $ 210,000
Less Primary loan amount 143,000
Less down payment of 3% 6,300

Equals “GAP” $ 60,700
Plus estimated allowable settlement charges 10,500
Equals Total Subsidy $ 71,200
B. The housing unit selection process will be conducted by the homebuyers. Prior to making an offer to purchase an eligible housing unit (see Section 3.0), homebuyer shall provide seller with a disclosure containing the following provisions:
1) Homebuyer has no power of eminent domain and, therefore, will not acquire

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the property if negotiations fail to result in an amicable agreement; 2) Homebuyer’s offer is an estimate of the fair market value of the housing unit, to be finally determined by a state-licensed appraiser; 3) The housing unit will be subject to inspection. The housing unit must comply with local codes at the time of construction and local health and safety standards;
4) All housing units built prior to January 1, 1978, will require a lead paint disclosure to be signed by both the homebuyer and Seller (Attachment E); 5) Since the purchase would be voluntary, the seller would not be eligible for relocation payments or other relocation assistance;
6) The seller understands that the housing unit must be either: currently owneroccupied, newly constructed, or vacant for three months prior to submission of the purchase offer;
7) If the seller is not provided with a statement of the above six provisions prior to the purchase offer, the seller may withdraw from the agreement after this information is provided.

C. Applicant submits executed standard form purchase and sale agreement and primary lender prequalification letter to Program Operator. The purchase and sale agreement will be contingent on the household and housing unit meeting Program eligibility requirements and receiving Program loan approval. Program Operator verifies applicant eligibility, housing unit and loan eligibility and amount of assistance to be provided consistent with these guidelines.

D. Program Operator, where Program Operator is not the Sponsor, submits recommendation to the Sponsor for approval or denial, including the reasons for the recommendation. Sponsor determines Applicant’s approval or denial, and instructs Program Operator to notify Applicant. Program Operator provides written notification to Applicant of approval or denial with reason and, if denied, a copy of the Program’s appeal procedures.

E. When Primary Lender requirements are met, Program funds are deposited into escrow, with required closing instructions and loan documents.

F. At the time of escrow closing, the Sponsor shall be named as an additional loss payee on fire, flood (if required), and extended coverage insurance for the length of the loan and in an amount sufficient to cover all encumbrances or full replacement cost of the housing unit. A policy of Title Insurance naming the Sponsor as insured is also required.

1.4. HOMEBUYER COSTS
A. Eligible households must document that they have the funds necessary for down payment and closing costs as required by the Primary Lender and the Sponsor. The Program’s down payment requirement (below) is in place even if the Primary Lender has a lower down payment requirement. If the Primary Lender has a higher

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down payment requirement, there is no additional down payment requirement required by the Program.

B. Homebuyer must contribute a minimum down payment of one percent (1%) of the purchase price, but may contribute more if desired. The City will allow gift funds to be used toward the down payment.

C. Sponsor will not provide a subsidy that is greater than the amount of the primary mortgage. The subsidy will write down the cost of the primary lender’s loan so that the payments of PITI are within approximately 25 to 35% of the gross household income. The Program Operator will determine the level of subsidy and affordability during underwriting of the Program’s loan to make sure that it conforms to the requirements of the HCD funding Program.

1.5. HOMEBUYER EDUCATION
Buying a home can be one of the most confusing and complicated transactions anyone can make. Providing the future homebuyer with informative homebuyer education training, can bring success to the Sponsor, Program Operator, the Program and most importantly, the homebuyer. It has been documented that first-time homebuyers that have had homebuyer education have the ability to handle problems that occur with homeownership.

All Program participants are required to complete a Sponsor-approved homebuyer education class. The homebuyer education class will cover such topics as the following:
preparing for homeownership; available financing; credit analysis; loan closing; homeownership responsibilities; home maintenance; impact of refinancing and loan servicing. Methods of homebuyer counseling and education may include, but are not limited to: one-on-one counseling between homebuyer, counselor and family/individual and/or group workshops and informational sessions. Tools of instruction may include fliers, brochures, power point presentations, worksheets, etc.

1.6. CONFLICT OF INTEREST REQUIREMENTS
When the Sponsor’s program contains Federal funds, 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 (including stepchild), brother, sister (including a stepbrother or stepsister), grandparent, grandchild and in-laws of a covered person.

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(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

92.356(d)(1-6) for details on the documentation needed in order to submit an exception request to HUD.

1.7. NON-DISCRIMINATION REQUIREMENTS
The Program will be implemented in ways consistent with the Sponsor’s commitment to non-discrimination. No person shall be excluded from participation in, denied the benefit of, or be subject to discrimination under any program or activity funded in whole or in part with State funds on the basis of his or her religion or religious affiliation, age, race, color, creed, gender, sexual orientation, marital status, familial status (children), physical or mental disability, national origin, or ancestry, or other arbitrary cause.

2.0 APPLICANT QUALIFICATIONS

2.1. CURRENT INCOME LIMITS FOR THE AREA, BY HOUSEHOLD SIZE All applicants 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 80% of the County’s area median income (AMI), adjusted for household size, as published by HCD. (See Attachment C for current income limits).

Household: Means one or more persons who will occupy a housing unit. Unborn children will not be counted in family size determination.

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.

2.2. 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, as shown in the most recent HCD program-specific guidance at http://www.hcd.ca.gov/grants-funding/income-limits/income-calculation-andPage 183 of 467 City of Yuba City Homebuyer Program Guidelines Page 10
determination-guide.shtml, will be followed to independently determine and certify the household’s annual gross income. Persons who are non-occupant co-borrowers, i.e., sign the Promissory Note but not the Deed of Trust and will not go on title, will not be required to submit income, and their income and that of their family will not be included in the final income determination.

The Program Operator should compare the applicant’s annual gross income to the income the Primary Lender used when qualifying the household. The Primary Lender is usually underwriting to FHA or conventional guidelines and may not calculate the household income or assets in the same way as required by the Program. 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. All documentation shall be dated within six 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 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: 24 CFR Part 5 Annual Income Inclusions and Exclusions B. ASSETS:

There is no asset limitation for participation in the Program. Income from assets, however, is 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 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, for example, 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

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2.3. DEFINITION OF AN ELIGIBLE HOMEBUYER
HOME and CalHome-funded Programs are required to use the following definition of an eligible homebuyer, which is a “first-time homebuyer” from 8201(l) Title 25 California Code of Regulations:
“First-time homebuyer” means an individual or individuals or an individual and his or her spouse who have not owned a home during the three-year period before the purchase of a home with subsidy assistance, except that the following individual or individuals may not be excluded from consideration as a first-time homebuyer under this definition:

1. a displaced homemaker who, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse. A displaced homemaker is an adult who has not, within the preceding two years, worked on a full-time basis as a member of the labor force for a consecutive twelve-month period and who has been unemployed or underemployed, experienced difficulty in obtaining or upgrading employment and worked primarily without remuneration to care for his or her home and family;

2. a single parent who, while married, owned a home with his or her spouse or resided in a home owned by the spouse. A single parent is an individual who is unmarried or legally separated from a spouse and has one or more minor children for whom the individual has custody or joint custody or is pregnant; or

3. an individual or individuals who owns or owned, as a principal residence during the three-year period before the purchase of a home with assistance, a dwelling unit whose structure is:
a. not permanently affixed to a permanent foundation in accordance with local or state regulations; or
b. not in compliance with state, local, or model building codes and cannot be brought into compliance with such codes for less than the cost of constructing a permanent structure.

3.0. HOUSING UNIT ELIGIBILITY

3.1. LOCATION AND CHARACTERISTICS
A. Housing units to be purchased must be located within the eligible area. The eligible area is described as follows: “Within the City of Yuba City.” B. Housing unit types eligible for the homebuyer Program are new or previously owned single-family residences; condominiums; or manufactured homes in mobilehome parks, in common-interest developments or on a single-family lot and

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placed on a permanent foundation system. HOME does not allow manufactured homes unless on a permanent foundation system.

C. All housing units must be in compliance with State and local codes and ordinances.

D. Housing units located within a 100-year flood zone will be required to provide proof of flood insurance with an endorsement naming the City as loss payee in order to close escrow.

3.2. CONDITIONS
A. Construction Inspection and Determining Need for Repairs.

Once the participating homebuyer has executed a purchase agreement for a housing unit, and prior to a commitment of Program funds, the following steps must be taken for the housing unit to be eligible for purchase under the Program:
1) When the Sponsor’s Program utilizes Federal funds and if the housing unit was constructed prior to 1978 then the lead-based paint requirements of Section 3.2.C will apply.
2) The Program Operator, a certified housing inspector, or a Sponsor representative will walk through the housing unit, determine if it is structurally sound, and identify any code related and health and safety deficiencies that need to be corrected. A list of code related repair items will be given to the homebuyers and their Realtor to be negotiated with the seller. Only new construction and homes built within the previous 12 months and not previously occupied are not subject to a home inspection.

If there are one or more health and safety deficiencies, and/or violations of applicable building codes noted in the written report, the Sponsor will approve the subsidy only if the buyer and seller agree to make necessary repairs to the dwelling unit prior to transfer of property ownership at their own expense.
3) Upon completion of all work required by the Program Operator, Sponsor, appraiser, pest inspector and/or certified housing inspector, a final inspection will be conducted prior to close of escrow. The inspector will sign off on all required construction work assuring that each housing unit receiving Program assistance is in compliance with local codes and health and safety requirements at the time of purchase and prior to occupancy.

B. Per Section 8208 of the State HOME regulations, no additional HOME assistance, including rehabilitation funds, may be provided during the period starting one year

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following the filing of the Project Completion Report through the end of the Affordability Period.

The HOME Affordability Period is as follows (amount does not include Activity Delivery Costs paid to the State Recipient by HCD):

Amount of HOME Assistance Period of Affordability in Years Under $15,000 5 years
$15,000 to $40,000 10 years
Over $40,000 15 years
C. Lead-Based Paint Hazards: All housing units built prior to 1978 for which HOME funding is anticipated are subject to the requirements of this section 3.2.C. Such homes must undergo a visual assessment by a person who has taken HUD’s online Visual Assessment course. Deteriorated paint must be stabilized using work safe methods. Clearance must be obtained after paint stabilization by a DHS certified LBP Risk Assessor/Inspector. HOME general administrative and activity delivery funds may be used to pay for lead-based paint visual assessments, and if lead mitigation and clearance costs are incurred, these programs may incorporate the costs into the calculation of Program assistance.

The following requirements must be met:
1) Notification: a) Prior to homebuyer’s obligation to purchase a pre-1978 home, the Buyer will be given the most recent copy of and asked to read the EPA pamphlet “Protect Your Family From Lead in Your Home” (EPA 747- K-94-001). A signed receipt of the pamphlet will be kept in the Sponsor’s homebuyer file; b) A notice to residents is required following a risk assessment/inspection using form DHS 8552, which is provided by the DHS-certified Risk Assessor/Inspector; c) a notice to residents is required following lead-based paint mitigation work using Visual Assessment and Lead-based Paint Notice of Presumption and Hazard Reduction form, LBP – 1 (Attachment H).
2) Disclosure: Prior to the homebuyer’s obligation to purchase a pre-1978 housing unit, the HUD disclosure (Attachment E), “Seller’s Lead-based Paint Disclosure” notice must be provided by the seller to the homebuyer. 3) Inspections: The Inspector shall conduct a “Visual Assessment” of all the dwelling unit’s painted surfaces in order to identify deteriorated paint. All deteriorated paint will be stabilized in accordance with CFR 35.1330 (a) and (b); and a Clearance shall be made in accordance with CFR 35.1340. 4) Mitigation: If stabilization is required, the contractor performing the mitigation work must use appropriately trained workers. Prior to the contractor starting mitigation work the Program Operator shall obtain copies of the contractor’s and workers’ appropriate proof of LBP training,