City of Gainesville | Housing Rehabilitation Program

Official Site of the City of Gainesville, Georgia

•	2006 CDBG Action Plan
•	Final HUD Consolidated Plan
•	CDBG End of Year Report
•	2007 CDBG Annual Action Plan
•	Links

HOUSING REHABILITATION LOAN PROGRAM (HRLP)

HRLP

ELIGIBILITY REQUIREMENTS

1.	Loans may be made only to owners/occupant's of record of the property to be rehabilitated.
2.	The property must be located within the city limits of Gainesville.
3.	The property must need rehabilitation to meet the requirements of State/local housing and building codes, or the State of Georgia Architectural Accessibility Standards.
4.	Household must earn less than the HUD income limits. Applies to all persons 18 and above.

DESCRIPTION OF FINANCING

The maximum and minimum loan and grant amounts available for the rehabilitation programs are different and are described below. Participants approved to receive these types of funds do not automatically qualify for the maximum amounts.

All loans and grants must be reviewed and approved by the Loan Review Committee (LRC). The Loan Review Committee (LRC) is composed of five (5) designees appointed by the City Council and Gainesville Non-Profit Development Foundation, Inc. Board and will meet as needed. The LRC determines the size of CDBG and/or CHIP loans based upon several criteria including, but not limited to, 1) the scope and cost of proposed work; 2) the projected after repair value of the house; 3) existing mortgage balances and payments; 4) housing expensetoincome and debt-to-income ratios; 5) credit worthiness; and 6) whether or not the owner can qualify for a loan from a bank.

General Conditions. The APPLICANT acknowledges that should he or she qualify for any of the programs listed below, the following appropriate terms will apply:

(a)	The total loan amount for owner-occupants from all sources shall not exceed the FHA Mortgage Limits (see Appendix B). Minimum owner participation will be 20% of total project cost unless monthly payments are greater than 30% of the applicant’ monthly gross income, then the minimum amount can go down to 12% of total project cost.
(b)	The loan repayments will begin within 30 days after completion of the rehabilitation work.
(c)	The amount of the loan should not increase the value of the Property beyond that of comparable properties in the area, which meet State/local building and housing codes. City of Gainesville shall have the authority to grant exceptions to this rule.
(d)	The loan-to-value ratio of the HRLP loans plus existing loans secured by the Property cannot exceed 100% of the after-rehabilitated appraised value of the Property for owner-occupied property.
(e)	All loans shall be evidenced by a mortgage note, and secured by mortgage lien, on forms provided by City of Gainesville. The City of Gainesville will accept any mortgage lien position, as long as it meets the loan-to-value ratio criteria.
(f)	The principal of the loan may be prepaid at any time, without penalty.

INELIGIBLE ACTIVITIES

A.	The acquisition of any real property that is not permanently affixed to the structure.
B.	The purchase of any and all appliances such as, but not limited to dishwashers and grills.
C.	The payment of taxes, liens, utilities or insurance.
D.	New construction or room additions that are not currently a part of the structure's existing floor plan.
E.	Landscaping for cosmetic appearance. However, landscaping or backfill around foundations to alleviate problems with surface water would be an allowable expense.
F.	Amenities unrelated to the provision of safe, decent, and sanitary housing such as, but not limited to 1) hot tubs/steam rooms 2) fireplaces and 3) skylights/roof windows.

REHABILITATION PROCESS

1	Applicants income verified
2	Title search ordered
3	Inspection, pictures and work write-up by Rehab Advisor
4	Owner(s) approve work write-up.
5	Invitation to Bid issued following City of Gainesville guidelines.
6	Contractors inspect property and submit bid by advertised deadline.
7	Loan application processed through private lending institution.
8	Rehab Advisor will review the bid and verify that the City or HUD has not debarred the contractor.
9	Rehabilitation Agreement between the City and the Owner and the Contract between the owner and the contractor must be signed within 28 days of the bid opening.
10	Pre-construction conference will be held with the owner, contractor, Rehab Advisor, and Program Administrator to discuss general conditions, and execute construction contract.
11	Loan documents signed and deeds recorded.
12	Notice to proceed issued.
13	The Contractor shall remain liable for one (1) year from the time of the work acceptance. Further, the Contractor will furnish the homeowner with all manufacturers' and suppliers' written guarantees and warranties covering materials and equipment furnished under this contract.