Owner-occupied_Rehabilitation_Guide by shuifanglj

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Owner-occupied
 Rehabilitation


GUIDE A Step-By-Step Guide to
 Rehabilitating Owner-occupied Homes
       Minnesota Small Cities Development Program




                                            Prepared by

        Department of Employment and Economic Development
               Business and Community Development Division
                                            March 2006

                               Minnesota Small Cities Program
                       Business and Community Development Division
                    Department of Employment and Economic Development

                            First National Bank Building, Suite E200
                                      332 Minnesota Street
                                   Saint Paul, MN 55101-1338

                                        651-297-1530
                                       1-800-657-3858
                                    TTY/TDD: 651-297-5353
                                   TTY/TDD: 1-800-366-2906
                                      Fax: 651-296-1290

                                      www.deed.state.mn.us




                            Written by Nancy Freeman and Associates, 1994.
            Updated by Minnesota Department of Employment and Economic Development, 2006.




2006 DEED                        Owner-occupied Rehabilitation Guide:
Preface
The three “Step-By-Step Guides” (Owner-occupied Rehabilitation Guide, Renter-occupied
Rehabilitation Guide, and Commercial Rehabilitation Guide) were developed to assist in the
implementation and management of Small Cities Development Program projects. Please modify
and customize the “example” forms, letters and project tracking worksheets to better suit the needs
of your particular project. If you have questions, contact your Small Cities Development Program
representative.




                                 Owner-occupied Rehabilitation Guide:                    2006 DEED
Contents
Preface
Step One: Getting Started Reviewing Policies and Procedures  .  .  .  .  .  .  .  .1
Develop Written Policies and Procedures to Cover the Following:  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .1
Get Environmental Clearance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .4


Step Two: Marketing Your Program  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .5
Marketing To Homeowners  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .5
Be Realistic When Construction Can Begin  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .5
Use Multiple Marketing Methods  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .5
Consider Equal Opportunity and Fair Housing Issues  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .6
Housing Rehabilitation ProgramFact Sheet .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 7

Marketing To Contractors  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .8
Contractor Application Form .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 9



Step Three: Taking Applications .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .11
Telephone Screening  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .13
Preliminary Applications  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .14
APPLICATION PROCESSING  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .15
Homeowner Telephone Inquiry  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 17
Preliminary Application MaterialsEnclosure Letter  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 18
PreliminaryApplication  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 19
ImportantPrivacy Notice  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 21
Release of Information .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 22
Verification of Social Security Income  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 23
Verification of Assistance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 24
Verification of Employment  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 25
Mortgage Verification  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 26
Checking/Savings Account VerificationOwner-occupied Housing Rehabilitation .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 27
Verification of Title, Current Taxes and Proof of Insurance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 28
Contract for Deed Vendor’s Pre-consent Form  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 29
Contract for Deed Vendor’s Responsibility  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 30
Life Estate Owner’s Pre-consent Form .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 31
Life Estate Owner’s Responsibility .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 32
Annual Income:24 CFR, Part 5 .609  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 33
Income Inclusions and Exclusions  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 35

Commonly Asked Questions About Calculating Income  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .36




2006 DEED                                                                          Owner-occupied Rehabilitation Guide:
Home Improvement Loan Denial of Assistance:Appeal Procedure  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 38
Income Computation Worksheet .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 39
Home Improvement Loan Application and Interview Notification  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 40
Home Improvement Loan Full Application .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 41
What To Expect and What Not To ExpectFrom The Home Improvement Program  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 45
Lead-Safe Housing RuleApplicability Form .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 46
Lead-safe Housing Rule Checklist For General Compliance Documentation  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 47
Lead-based Paint Statement  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 48
Fair Housing Certification  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 49
Application Tracking SystemOwner-occupied Housing Rehabilitation .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 50
Checklist for CompletenessOwner-occupied Housing Rehabilitation  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 51
Monthly RehabilitationProgress Report .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 53
Applicant andBeneficiary Report  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 54



Step Four: Inspecting The Property  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .55
Construction Management General Terms  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .56
Task One:  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .57
Task Two: Read The Client  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 59
Task Three:  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .59
Task Four: Prepare Work Write-Up and Estimate Costs  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 60
Task Five: Review Work Write-Up and Cost Estimates with owner  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 60
Project Definition Form  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 61
Inspection ReportCover Page  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 63

Task Six: Have the owner sign a permission statement for photographs of the property .  .  .  .  .  .  .  .  . 64
Task Seven: Perform Review for Historic Properties  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 64
SHPOReview and Comment  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 66
Historic Determination National Advisory Council  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 67

Task Eight: Perform Review for Floodplain Location  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 68
Task Nine: Consider Lead-based Paint Requirements  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 68
Summary Notice ofLead-based Paint Risk Assessment  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 69
Notice that Lead-based Paint or Lead-based Paint Hazardsare Presumed to be Present .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 70
Determining Thresholds for Training andLead Hazard Reduction Work Requirements  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 71



Step Five: Approving The Loan  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .73
Owner-occupied Housing Rehabilitation ProgramProject Presentation Form .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 74
Notice ofHome Improvement Loan Funding  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 76
Notice ofHome Improvement Loan Denied  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 77




                                                                                  Owner-occupied Rehabilitation Guide:                                                                                                     2006 DEED
Step Six: Preparing The Bid Package  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .79
What should a Work Write-up include?  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .80
Characteristics of an effective Work Write-up/Specification  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .80
Putting It Together: Example – Door Replacement  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .82
Home ImprovementsDetermination Letter  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 85
Rehabilitation StandardsCompliance Certification .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 86
Owner Sign-off Sheet  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 87
Work Write-upFor Bidding Contractors  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 89
Color Selection Chart .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 91
Some Things Owners Should ThinkAbout Before Selecting Contractors .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 92
The Bid PackageIncludes:  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 93
Work Write-upCover Sheet .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 94
Bid Package Letter  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 95
Instructions For PreparingBids and Contract Award Information .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 96
Contractor - Owner Contract  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 98



Step Seven: Selecting The Contractor  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .103
Contract Award Procedures  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 104
Bid TallySheet  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 105
BidSummary  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 106
Bid Award ToSuccessful Bidder  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 107
Notification To Unsuccessful Bidder  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 108
Self-help Loan Agreement  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 109



Step Eight: Packaging The Case  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .111
Time Out .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .111
Collaborative Funding Schedule .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 112
Rehabilitation FiscalTracking Spreadsheet  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 113
Notice ofRight of Rescission .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 114
Truth InLending Statement  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 115
Repayment Agreement  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 116
Deferred Loan Repayment AgreementContract-for-Deed  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 118
Rehabilitation ProgramInstallment Loan Note  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 121




2006 DEED                                                                             Owner-occupied Rehabilitation Guide:
Step Nine: Managing Construction  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .123
Staffing Needs For Rehabilitation Programs .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .123
Preconstruction Conferences  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .124
Interim Inspections  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .125
Progress Payments  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .126
Change Orders  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .126
PreconstructionConference Report  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 127
Relocation Screening Sheet for Occupant Protection from Lead Hazard Reduction Activities  .  .  .  .  .  .  .  .  .  .  .  .  .  . 128
Elderly Waiverfor Relocation  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 129
Notice ToProceed  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 130
ContractorPayment Request  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 131
Receipt and Waiver ofMechanic’s Lien Rights .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 132
Rehabilitation Field Inspection Report .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 133
ChangeOrder .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 134



Step Ten: Closing The Case .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .135
Sworn ConstructionStatement  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 136
Rehabilitation ProgramCompletion Certificate  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 137
Post ConstructionSafe Work Practices Certification  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 138
Summary Notice of Completion ofLead-based Paint Hazard Reduction Activity  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 139
Claim For TemporaryRelocation Expenses  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 140
Customer SatisfactionSurvey  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 142
Closeout Letter  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 143



Starting Over: Designing Your Program  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .145
Direct Grants  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .146
Deferred Payment Loans  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .147
Direct Amortized Loans  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .148
Leveraged Loans  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .149
Determining Terms and Conditions of Loans  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .150
Combining Deferred Loans with Repayable Loans  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .151
Using Equity in the Home as a Factor  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .151


Index of Example Forms, Letters, Tracking Devices  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .155




                                                                                      Owner-occupied Rehabilitation Guide:                                                                                                            2006 DEED
Step One: Getting Started Reviewing Policies and Procedures
Careful shifting between the time a program gets funded and when it begins to be implemented
is critical to getting a smooth start. Often volumes of information must be transferred from grant
writers to program administrators.

The transfer of information should include all the people who will have a role in working with the
program: the Program Manager, Construction Specialists, Fiscal Controllers, Intake and “paper-
trail” staff. Your policies and procedures will be used to provide all of the daily decisions until
close out.


                                              Please Note
The person who wrote the successful SCDP application may not be the same person who will administer
your program. Read the approved application carefully before reviewing the procedures manual and
do a “reality check.” Negotiate any changes with DEED that are needed before you start marketing the
program.


Develop Written Policies and Procedures to Cover the Following:

 Fair Housing and Equal Opportunity and Affirmative Action -

    Begin your policies with a clear statement of the community’s position about
    nondiscrimination. State that no one shall be denied assistance based upon race, color, creed,
    religion, national origin, sex, marital status, reliance on public assistance, age, disability, or
    familial status. In your marketing section you will have discussed outreach, but here’s where
    you’d also describe your efforts to reach under-served populations and to affirmatively market
    your program to owners and to local businesses, including contractors.

 Who is eligible for assistance -

    Your policies and procedures should outline such basics as any targeting of the community
    or neighborhood, the type of eligible property, how you will handle the issue of a Contract-
    for-Deed, the length and form of ownership that is acceptable, the income limits by family
    size, along with your definition of income. Eligibility criteria may vary from community to
    community.

    You need to think through what your policy will be if a property is too dilapidated to
    rehabilitate. All policies should contain a definition of “suitable for rehabilitation” to avoid
    “throwing good money after bad,” and to help make decisions about denying participation
    if necessary. If you have created a “materials only” option, describe how it will work and
    how you will expect owners to demonstrate capacity and how much time will be allowed for
    completion.




2006 DEED                     Owner-occupied Rehabilitation Guide: Step One                      Page 
 How information will be verified -

    Income and assets verification are crucial to meeting the required federal objective of benefit
    to low and moderate income persons. Your guide should clearly state the maximum allowable
    incomes. It is DEED’s policy that owner-occupants’ incomes must be verified by disinterested
    third parties and that income is calculated by projecting it forward over the coming 12 months.
    All sources of income should be verified. You must get a release of information from the
    applicant and have the source send the verification form directly to you as the administrator.

    Property ownership, the status of the mortgage, taxes and insurance will also need to be
    verified; your policies should cover these items.

 The maximum and minimum financial assistance, as well as terms, to be provided by the
  SCDP funds -

    If your program will leverage other sources, describe them. If you are providing grants,
    deferred loans, or direct loans, describe the terms and conditions. The financing plan should be
    clearly described.

 Eligible improvements -

    Policies should clearly indicate what improvements are eligible and which are not eligible;
    those improvements should be consistent with the community’s rehabilitation standards.
    Describe the standards that will be used in the program — HQS is the minimum standard.
    Describe what will be done, if anything, regarding refinancing of existing debt, assessments, or
    overcrowded conditions.

    If the property is in a flood plain or Historic District or has been determined to be historically
    significant, describe what has to be done.

 Lead Hazard Reduction -
    Policies should indicate steps involved in complying with HUD lead hazard reduction
    requirements including lead hazard assessments/inspections for buildings built before 1978,
    required notifications, relocation, trained supervisors/workers, and clearance.

 Marketing -

    Describe strategies the community proposes to make sure all citizens hear about the program
    and have an opportunity to participate. Whatever your planned efforts are to reach customers
    and contractors, describe what you will do.

 Applicant Selection -

    If you plan a first-come, first-served process, describe it. If you plan a “window” for
    applications and then will rank them, describe that process.



Page 2                        Owner-occupied Rehabilitation Guide: Step One                   2006 DEED
 Contracting Procedures -

   Describe the method that will be used to recruit and select contractors. Remember to include
   Women and Minority-owned businesses in your process. If your program will have contracts
   executed between rehab contractors and owners, describe how it will work and the agency’s
   role. If the lowest bid is required to be accepted, describe the consequences to the homeowner
   if they choose another bidder.

   Describe the desired time lines for events to occur and the schedule for interim inspections,
   pay-outs and required contractor documentation.

   When conflicts arise between the contractor and owner (a fact of life in the rehab business)
   describe the procedure you will follow in resolving them.

   Change order procedures need to be addressed. You need to describe the criteria for
   consideration, how they will be originated and approved.

   Termination of a contractor’s contract needs to be discussed. The factors that would be a basis
   for stopping work and payments need be put in a policy so there can be a standard method to
   refer to -if and when things get that bad.

 File documentation -

   Describe what you intend to track and refer to the documents by the name you have given them. At
   a minimum, you will need to track all eligibility determinations on the applicant and the property,
   the inspection, approval, work write-up, and bidding, construction management, and close out.

 Project approval and appeals process -

   The procedure for packaging and reviewing applications, including the amount of information
   released to the reviewing body, must be described. Include information on what will be in each
   package and the basis for approval and procedure for appeal.

 Conditions of assistance -

   If you intend to recapture assistance upon transfer or resale of the property, describe the
   triggering action and the process to be followed. If the loan requires regular repayment,
   describe the consequences of missing payments.

 Rehabilitation standards -

   DEED asks that every CDBG-funded rehabilitation program have written rehabilitation standards.
   Include your agency’s standards in the program’s policies and procedures. See the separate
   Rehabilitation Inspection Guide — part of the Step-by-Step series for guidance on applicable
   standards.

   You need to have a written policy regarding what is feasible and infeasible for rehabilitation


2006 DEED                    Owner-occupied Rehabilitation Guide: Step One                       Page 
    (“Suitable for Rehabilitation”). Some Grantees use a formula that takes the amount of
    funds needed to bring the property up to local standards and compares that figure against a
    specific dollar amount. For example, if the total rehab cost is $30,000, the property would be
    considered “not suitable for rehab.” If this is your policy, include the provision for an exception
    granted by the Director or local board.

 Appeal and complaint procedures -

    You should have a clear process for people to follow if they have concerns about decisions
    made or complaints about the quality of work, contractor actions or other issues. Including
    time lines for responses will help move the process along. Telephone numbers and addresses
    should also be provided.

 Amending Policies -

    You should have a method for amending the policies, if necessary, including process, approving
    entity, etc.

Get Environmental Clearance

Every SCDP grantee must conduct an environmental review on their project. The environmental
review consists of gathering information, making a determination on the impact of the project and
possibly, the publication of one or more notices. There is an SCDP staff assigned to clearing every
project’s environmental review before funds can be released. Special conditions may be attached to
your grant agreement that requires ongoing compliance with particular federal laws after funds are
released.

There are several levels of environmental review, and in general, the project activities and the
potential for environmental impact determines the level of review that will be required.

For a complete description of the environmental review process, please download the
Environmental Handbook from the web page: www.deed.state.mn.us/scdp/scdpmanu.html.




Page                         Owner-occupied Rehabilitation Guide: Step One                 2006 DEED
Step Two: Marketing Your Program
Marketing To Homeowners

When you think of successful marketing campaigns, they have three things in common:

•   They target the audience most likely to buy their product,

•   They make it easy for the customer to buy, and

•   They present their product in the most favorable light.

SCDP housing rehabilitation funds are also a product to be marketed. You want to reach the right
audience, make the process as painless as possible for all involved, and present the program as a
benefit to the community.

So how do you attract the right audience?

No doubt there has been a press release about the success of your application, and that generated
some calls, but that probably attracted two types of owners: the most sophisticated ones and the
most desperate ones. But they aren’t the only homeowners that your program was designed to
serve, so more effort is required.

You have a ready-made customer base with the group who participated in your survey completed as
part of the SCDP application process. Send them a letter announcing the success of the application
and remind them of their participation. Include information about the program, and enclose a pre-
application form.

Be Realistic When Construction Can Begin


                         Don’t raise unrealistic expectations from the public .
Given the timing of the SCDP announcements from DEED, the length of time for Environmental clearances
and program preparation, applicants may have to wait until the following construction season to have work
begin on their properties.


Use Multiple Marketing Methods

The following marketing tips are taken from other successful programs:

 Prepare a one-page description of your program in laymen’s terms. Just give the basics
  that will help eligible applicants realize that this is an opportunity for them and will weed out
  those clearly ineligible.




2006 DEED                      Owner-occupied Rehabilitation Guide: Step Two                        Page 
 Make it easy for the customer to “buy” your product. Consider having someone “flex”
  their time to provide later hours to accommodate the working applicants who can’t get to a
  telephone during the regular business day. If your program covers a large geographic area,
  consider taking applications at a convenient site on certain days.

 Explore inexpensive methods to directly reach the service area customers. Some agencies
  have used “door knockers” or pre-application packets to hang on the doors in target areas.

 Consider having the local school give students your program flyer to send home. You
  could ask art teachers if their students would like to design a poster for you to use in marketing
  your program.

 Grocery stores are a natural place to market your program. Have carry-out clerks put
  flyers in the bags of groceries.

 Make a poster to put in places where eligible applicants go: Laundromats, hardware stores,
  video stores, churches, fast food restaurants, clinics, banks, day care centers, social service
  offices.

 Ask for time on local radio stations and cable channels to talk about the program, who you
  are trying to reach and what you are trying to accomplish.

Capitalize On Indirect Marketing

 Rehab is contagious. There’s no advertisement like the sight of roofs being fixed, unsightly
  siding being repaired, and deteriorated windows being replaced. Before long, you will have all
  the applicants that your program can serve, even if you have leveraged additional resources.

 Word-of-mouth is the best advertising. Encourage satisfied property owners and contractors
  to spread the word that this is a program that works well. If you treat the applicants and
  contractors with respect and deliver what you promised, you will have pleased customers, a
  happy local council, and the support you need to operate your program.

Consider Equal Opportunity and Fair Housing Issues

Marketing efforts should consider those who have visual, hearing or other disabilities. You may
want to use various media, use large print, make home visits, etc. to ensure that all persons in the
community are informed about the program and have an opportunity to participate. Any public
meetings should be handicap accessible and, if necessary, you should provide for interpretation
services for those who speak a language other than English, use sign language or have other needs.
Marketing efforts should ensure that no one who is eligible to participate is excluded because they
did not or could not receive information about the program.




Page 6                        Owner-occupied Rehabilitation Guide: Step Two               2006 DEED
                                            Housing Rehabilitation Program
    Example                                          Fact Sheet


•    The city of __________ has received funding for homeowners interested in improving their
     homes from the Minnesota Department of Employment and Economic Development Small
     Cities Development Program (SCDP).

•    This assistance to homeowners is in the form of a ___ interest, ______ loan which must/must
     not be matched with other funds to complete the project. The match amount is ___ % of the
     total cost of the improvements. These funds can come from low-interest loans available from
     other federal or state sources or the owner’s contribution.

•    The maximum available through the SCDP is _____ per property.
•    The SCDP loan is repaid to the city when the property is sold, title is transferred, or the original
     borrower no longer lives in the home.

•    To qualify -

      You must live in the ____ part of the city.

      You must own the house, either free of debt, through a mortgage or a recorded Contract
       for Deed. If you are buying your house on a Contract for Deed, the holder of the contract
       must sign off on the loan.

      You must be able to meet the requirement for matching funds.

      Your gross annual income (including Social Security, wages and all regular sources) must
       be within the following limits:
         Family
         Size   1          2          3           4           5           6        7          8
         Annual
         Income $          $          $           $           $           $        $          $

The following improvements qualify under the SCDP: things that make your home more livable,
energy efficient, safe and accessible if you have handicapped occupants. These may include
replacing or repairing:
•    Defective plumbing, heating or electrical systems
•    Roofing, windows, and doors
•    Wall repairs, floor coverings, paint
•    Rotting siding, porches, steps
•    Ramps and bathroom accessibility conversions

To apply, call ________ between ____ at _____ or write to _____________.


2006 DEED                      Owner-occupied Rehabilitation Guide: Step Two                       Page 
Marketing To Contractors

You need contractors to participate in the program, but if they’ve been burned by slow-paying
public agencies before, you will need to sell your program before you will get the best contractors
to work with you.

Here are some ideas for recruiting and keeping good contractors:

•   Place an ad in the newspaper and post an ad in the local lumber yards.

•   Try an early-morning coffee and rolls meeting and send area contractors an invitation.
    Describe your program as it relates to their interest: the rehabilitation standards and
    specifications to be used, the role of the owner, pay-out procedures, the need for in-progress
    inspections, and how you will close projects. Be honest about what you expect from them and
    how long it will take to get paid.

    You can send notices to minority-owned newspapers, unions, technical schools and to those
    firms identified by the Minnesota Department of Transportation as woman-owned or minority-
    owned.

•   Use a “Contractor Application” process that enables your agency to identify those likely to
    bid so you can check references before problems occur.

     Tip: If you decide to issue a list of interested contractors to homeowners, identify
      contractors by location and trade so only contractors are contacted for jobs they are likely
      to bid. If the list is sorted by location and trade, owners also are not wasting their time
      wading through pages of names of contractors who never would consider bidding their job.

•   Make your bidding, award, and payment procedures as “user friendly” as possible.
    Evaluate every procedure and form with an eye toward streamlining it to make it easy for busy
    tradespeople to use — but remember that you have to keep adequate safeguards and records to
    support payments and actions.
•   Consider using a “customer satisfaction” survey. (An example is included in Step Ten.)
    Some agencies send owners a survey after work is complete to identify problems with the
    program or certain contractors. These surveys are useful in determining which contractors
    work best with certain types of clients and those who should not be continuing to work with
    your program.

•   Above all, write clear specifications and pay bills on time. These two actions will do more
    than anything else to attract and keep good contractors.




Page                         Owner-occupied Rehabilitation Guide: Step Two               2006 DEED
                                                             Contractor
    Example                                                Application Form

This form must be completed by each contractor who intends to bid for work that is assisted with Small Cities
Development Program funds. Satisfactory completion of this form puts you, as a contractor, on the list of “Available
Contractors” that our staff will distribute to successful applicants who are ready to invite bidders. Copies of a current
State of Minnesota Contractor’s Licenses and proof of insurance must be attached to this form.
I. General Information
                                                                Contractor
Name of Firm:                                                   License Number:
                                                                Social Security
Firm Owner:                                                     Number:
StreetAddress
of Firm:                                                        Office Phone:
City, State,
Zip Code:                                                       Office Hours:
Name of Person                                                  Owner’s
Writing Bids:                                                   Home Phone:
Are you a General Contractor?                                   Preferred Home
(You handle all phases of work) Yes        No                 Calling Hours:
When was your
firm established?

Are you a licensed lead supervisor? Yes        No     If yes, License Number:___________________

Are your workers trained on lead safe work practices? Yes        No 

Are you a woman-owned or minority-owned business? Yes             No 

Are you a Section 3* contractor? Yes  No 
* A Section 3 business is defined as either:
    1.) One that is at least 51 percent owned by a low or moderate income area resident or a Public Housing resident;
    2.) One where at least 30 percent of its current, permanent, full-time employees were low or moderate income area
        residents within the last three years; or
    3.) One that will subcontract at least 25 percent of its contract award funds to Section 3 businesses.

In which towns and areas would you be willing to work? _________________________________

How many contractors are part of your firm? (Other than subcontractors) ___________________

Can you handle more than one $5,000 job at a time? Yes          No 

•    Contractors must attach evidence of licenses that are required by the State of Minnesota. Our program also
     requires contractors to carry the following insurance coverage:
     (Attach proof of insurance and current Minnesota license to this form.)

     A. Comprehensive General Liability Insurance
        a. Bodily Injury $300,000 each person; $300,000 each occurrence
        b. Property Damage $100,000 each occurrence
     B. Comprehensive Automobile Liability
        a. Bodily Injury $300,000 each person and each accident
        b. Property Damage $50,000 property damage
     C. Do you carry Workers’ Compensation Insurance? Yes  No 
        NOTE: Self-employed workers and Partnerships may be exempt.

2006 DEED                           Owner-occupied Rehabilitation Guide: Step Two                                  Page 
                                                                  Contractor
 Example continued                                              Application Form

II. Areas of Expertise
Please check the type of work you are qualified to do and indication the years of experience you have in that area.
                                             Years                                                      Years
Type of Work                                 Experience        Type of Work                             Experience
General Carpentry                                              Floor Covering Replacement
Roofing                                                        Kitchen Cabinet Replacement
Structural Support Repair                                      Foundation Wall Repair
Window Replacement                                             Attic & Sidewall Insulations
Door Replacement                                               Chimney Repair
Siding                                                         Heating and Ventilation
Concrete Repair                                                Electrical
Plumbing                                                       Lead Hazard Reduction
Landscaping

List your three most recent jobs completed:
Name                                              Phone                       Type of Work
                                                  (    )
                                                  (    )
                                                  (    )


DO YOU GUARANTEE YOUR WORK FOR ONE YEAR? Yes                               No 


I authorize the SCDP program administrators to verify the above information and I certify that the above information is
true and complete:



                            Signature                                                     Date




Page 0                                 Owner-occupied Rehabilitation Guide: Step Two                        2006 DEED
Step Three: Taking Applications
             Activity:                                         Documents Involved:
Task One     Identify potentially-eligible applicants during   Telephone intake form and program guidelines
             telephone pre-screening.
             Discuss:
             A. Assistance available
             B. Eligible improvements
             C. Repayment requirements
             D. Application process
             E. Construction process
Task Two     Mail Preliminary Application package              Pre-application package:
                                                               A. Pre-application form
                                                               B. Release for Data Privacy
                                                               C. Releases for Verification of Income/
                                                                   Employment; Mortgage and Asset Verification
                                                                   Release and Credit Report if required
                                                               D. Program Guidelines from Policies and Procedures
                                                               E. Fair Housing brochure, “Protect Your Family
             Enter applicant and date in system                    from Lead in Your Home”
                                                               Application tracking system
Task Three Review Pre-application for eligibility of owner     Completed Pre-application form by owner; Signed
           and property; check for signed Releases             Releases
           Send out Requests for Verification of Income/       Request for Verification of income, Assets, request
           Employment, Mortgage and Assets; request            for credit report
           credit report if program requirements
           Send letter to ineligible applicants                Letter stating reasons for denial and appeal process
           Log dates of Pre-application receipt and letter     Application tracking system
           sent to ineligible applicants
Task Four    Call eligible applicants to notify them of        Verification forms completed by third party
             preliminary determination and set time for        Application package:
             intake interview
                                                               A. Confirmation of appointment
             Discuss what they need to bring (and why) to
             the interview                                     B. Full Application form
             Mail Application package                          C. List of items for Owner to bring
                                                                   • Proof of ownership
                                                                   • Proof of insurance
                                                                   • Evidence of current tax paid
                                                               D. “What to Expect and What Not to Expect ...”
             Log in date of contact, mailing                        flyer
                                                               Application Tracking System




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Three                           Page 
             Activity:                                            Documents Involved:
Task Five    Meet with applicant:                                 Intake package:
             A. Discuss their affordability, given program        A. Worksheets to calculate affordability given
                 guidelines                                           program guidelines
             B. Check for missing verifications, discuss          B. Verifications received versus statements in
                 any discrepancies                                    Pre-application
             C. Complete full application                         C. Full Application
             D. Cover Lead-Based Paint hazards, Risk              D. Proof of receipt of Lead Paint hazards
                 Assessment,Truth-in-Lending statements,
                 Fair Housing/Equal Opportunity
             E. Review next steps, set deadline for
                 owner’s part
             Enter date of meeting, track any missing             Application tracking system, applicant’s checklist
             documents from file checklist                        in file
Task Six     Assemble complete package for action by Local        Checklist in file
             Approval Committee or other approving official
             (as specified for your program.)
             Request to present case for review, enter date for   Application tracking system
             review in application tracking system
Task Seven Notify applicant of action by Local Approval           Letter to applicants
           Committee or approving official:
           A. If eligible, proceed to Property Inspection
           B. If ineligible, describe appeal process
           Update application tracking system                     Application tracking system
Task Eight Prepare file for assignment to property                File checklist, summary sheet if needed for property
           inspection staff                                       inspector
           Update application tracking system                     Application tracking system

The purpose of screening and taking pre-applications is to identify those applicants who are not
eligible for assistance or who are not serious about participating in the rehabilitation program.

There are three activities in this step of the rehabilitation process:

•   Telephone screening to provide initial information to potential applicants

•   Preliminary application (Pre-application) evaluation to identify the customers most likely to fit
    the eligibility criteria

•   Full application processing to gather complete information on the applicant




Page 2                          Owner-occupied Rehabilitation Guide: Step Three                          2006 DEED
Telephone Screening

As telephone screening is the first opportunity for the public to ask detailed questions about your
assistance, it is important that several things happen:

•   The applicant is given accurate information and courteous treatment

•   Follow-up action is timely and appropriate

•   People who are clearly ineligible are told at the earliest point so their time — and the staff’s
    time — are not wasted. It is common to talk with ten people on the telephone for every five
    Pre-applications sent out.

It would be a disaster to put someone inexperienced, tactless, or burned out in the role of being your
first representative whom the public encounters.

        If a “reality test” is needed to see how important this job is, call another public agency
        and ask for information. See how often you have to repeat your request or your call is
        misdirected or you are cut off. If the person you need to talk with is not available, see
        how your message is taken and when your call is returned.


                                  It may go without saying, but . . .
•   Make sure everyone answering the telephone knows who has responsibility for every step of the
    program.

•   Let everyone know what to say when they answer the phone.

•   They must know how to transfer calls without losing people.

•   Have a system for letting the receptionist know who is available to handle inquiries every day.

•   You must also plan for reaching those with disabilities. How will you enable those with hearing or
    sight impairments to apply?

•   Be sure you have contacted advocacy agencies for these people so they have an equal opportunity.
    Locate a TTY machine for those with hearing impairments so you can identify this telephone number
    in your literature, or be familiar with the use of the Minnesota Relay System.

•   Your customers may also include people with limited reading ability. Read over any of your marketing
    materials with an eye for keeping things clear and easily understood.

•   Are your offices accessible for those with limited mobility? Make arrangements for staff to make in-
    home interviews under special circumstances.




2006 DEED                      Owner-occupied Rehabilitation Guide: Step Three                        Page 
Preliminary Applications

The person who does the telephone screening interview is in the best position to send out Pre-
application packages to callers. The package could include such things as:

•   A Preliminary application form.

•   Releases for the owner to sign regarding the Minnesota Data Practices Act, necessary
    verification requests, and if your program requires it, a release for the Credit Bureau.

•   A self-addressed envelope.

•   A brief description of the program, including a definition of income. It could be the applicable
    portion of your Policies and Procedures Guidelines if your marketing materials are too general
    for this step.

In addition to the table, at the beginning of this Step, sample forms are included that provide good
tools for you to use at this stage. They include:

•   An application tracking format for the agency,

•   A sample letter to owners confirming their appointment for an Intake Interview,

•   A checklist of “Things to Bring With You to the Interview” for the homeowner

•   Releases for verification forms and credit checks, and

•   “What to expect and not to expect from the housing rehabilitation program.”

You will need to verify information stated in the Pre-application. A sample verification form is also
included for your adaptation.




Page                       Owner-occupied Rehabilitation Guide: Step Three                   2006 DEED
APPLICATION PROCESSING


                                   Tips From Veterans of Rehab Operations
I.    It takes about two weeks from the time a completed Preliminary Application is received until all the
      tasks in the following chart are completed and the file is assigned for an on-site evaluation of the
      property.

II.   Some agencies report that about 80% of those who appear eligible for assistance after a review of
      their Preliminary Application actually follow through with the entire process, so careful screening can
      save you time and money.

III. Be aware that if you have leveraged other funding sources besides SCDP funds, each lender
     (MHFA, for example) will have its own application forms that must be used. The other lender will also
     want your tracking process to identify the work done with their funds.

IV.   It will be easier for you and the applicant if all your forms are similar if you are combining sources
      of funds.



SCDP Policies Regarding Income Verifications:

DEED has adopted a policy that income, for purposes of eligibility determinations, will be
projected ahead over the next 12 months. While it is useful to look at income for the past 12
months as an indicator of what the applicant will probably receive, your verification process must
ask about anticipated changes to the applicant’s income.

Furthermore, no deductions are taken from the anticipated gross income for the eligibility
determination. This is the same method used for eligibility for the Section 8 program. It includes
all gross income from members of the household over the age of 18. The Implementation Manual
contains more information on income definitions and guidelines.

For income verification, DEED requires an independent third party written statement — sent to
your agency, not to the applicant. In the unlikely event that the income source is unwilling or
unable to produce this statement, then you could document the file and view (and copy) the last
check or paystub or completed tax statement for the last year with a statement from the applicant
to explain why the next twelve months will be the same or different. The last resort is a written
statement from the applicant that states the amount of income and source.




2006 DEED                        Owner-occupied Rehabilitation Guide: Step Three                          Page 
It is important to make the verification process move as quickly as possible while also assuring that
it is as “businesslike” as possible. The following examples include:

1.   An Application Tracking System that follows the general progress of multiple cases, useful to
     managers and staff,

2.   A Status Sheet that could be stapled to the outside of each file and serve as a tracking system
     for the staff people working on intake and then construction management to keep track of
     progress, and

3.   A Checklist useful to review each file for overall completeness.

4.   A Manager’s monthly status report suitable to track progress against goals and the amount of
     funds committed and those still available.


Because SCDP administrative funds are very limited, it is to the administrator’s benefit to move cases to
closure swiftly and efficiently.
Non-productive time spent on a case is money that could have been spent to meet your production goals.



What To Do About Applicants’ Assets:

Grantees may or may not impose an asset limitation, however, verification of assets is required
since income earned off assets must be counted. The net earnings declared to IRS are used for
determining self-employment and farm income.

Actual earnings from savings up to $5,000 are used and, for assets more than $5,000, the higher
amount is used: actual earnings or the interest rate for Treasury Bills.

There is no required SCDP asset limit, and it is a rare case where an applicant has sufficient assets
that earn interest or income that would put them over the program’s income limits.




Page 6                       Owner-occupied Rehabilitation Guide: Step Three                  2006 DEED
                                                         Homeowner
  Example                                             Telephone Inquiry


Date: _________________    Person Taking Call: _____________________________

Applicant Data

Name of Caller:

Name of Applicant:
How did they hear
about our program?
StreetAddress
of Applicant:                                                Office Phone:
City, State,
Zip Code:                                                    Home Phone:
Contact’s
Name:                                                        Message Phone:

Best time of day to reach applicant:_____________________

What is the Gross Annual Income for your household?_____________

Sources of Income? Wages       Self-employment     Social Security        Other 

Number of People in Household: ________


Property Data
Are requested improvements for your home? Yes      No            Rental Property? Yes      No 

Are you purchasing your home? (check one)   Mortgage       Contract for Deed     Paid in Full 

Amount of Monthly Payment:    $_______________

Mobile Home? Yes       No          If “yes,” do you own the land? Yes        No 


Eligibility:
Have you ever received a home improvement loan before from MHFA or another public agency? Yes  No 
If yes, explain:____________________________________________________________________________________

Based upon telephone screening, the applicant appears to be: Eligible/Ineligible

Date Preliminary Application package sent: ____________




2006 DEED                       Owner-occupied Rehabilitation Guide: Step Three                      Page 
                                         Preliminary Application Materials
 Example                                         Enclosure Letter


                                         (Agency Letterhead)

Date

Name and address of Applicant

Dear______,

You recently requested a Preliminary Application for a housing improvement loan. I am enclosing
a copy for you to complete and send to our office in the enclosed envelope. I am also sending you
a copy of our Housing Rehabilitation Policies and Procedures so you can read more about our
program and know what to expect if you choose to apply.

HUD provides the State of Minnesota with the funds for communities to operate programs. Federal
regulations require that we establish eligibility for home improvement assistance. Therefore, I am
sending you a number of things to sign so we can continue the application process. Please sign
them (in ink) where I have put a checkmark. They include:

    •     General release of information form(s); and/or

    •     Release of information form for your bank and if you have a mortgage or Contract-for-
          Deed, a release form that will authorize us to contact lenders

I have enclosed a Data Privacy statement that describes how your private information will be used
only to determine your eligibility and released to those persons who are required to review files.
Please read the Data Privacy statement carefully, sign it and return it with your Pre-Application and
releases.

We will verify your income from all sources after we have your written release statement.

Call me if you have questions about what I have sent you. I can be reached at ____________.

Sincerely,



Enclosures:      Preliminary Application
                 Data Privacy Statement
                 Releases for Verification




Page                        Owner-occupied Rehabilitation Guide: Step Three               2006 DEED
                                                                  Preliminary
  Example                                                         Application



Name of Applicant:
                         First                         Middle Initial    Last

Name of Co-Applicant:
                      First                            Middle Initial    Last
StreetAddress
of Applicant:                                                           Office Phone:
City, State,
Zip Code:                                                               Home Phone:

Names of Persons in Household and Ages:
Names                                                                           Birth Date   Social Security Number




This information is requested solely for the purpose of determining compliance with Federal civil rights law and your
response will not affect consideration of your application.
Gender of Applicant                                  Race/Ethnicity of Applicant (check one)        Hispanic Ethnicity
 Male                                                White                                         Yes  No
 Female                                              Black or African American
                                                      Asian
Does any member of the household                      American Indian/Alaskan Native
have disabilities?                                    Native Hawaiian/Other Pacific Islander
 Yes  No                                            American Indian/Alaskan Native & White
If “Yes,” describe the nature of the disabilities:    Asian & White
                                                      Black/African American & White
                                                      American Indian/Alaskan Native & Black/African American
                                                      Other Multi-Racial

Annual Gross Income
The annual gross income from all persons over age 18 in the household is: $_____________

Check the box next to all the sources of income of household members:
 Social Security or SSI                      Pension                           Wages
 AFDC                                        General Assistance                Self-Employment
 Child Support                               Rental Income                     Farm Income
 Payment from Contract-for-Deed              Interest from Savings             Other (Explain) __________________




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Three                             Page 
                                                                 Preliminary
 Example continued                                               Application


I currently:          Own my home free and clear
                      Am buying my house from a bank or mortgage company
                       (name of lender) _____________________________________________________________
                      Am buying my house on a Contract-for-Deed (C/D)
                       (name of person selling on C/D) _________________________________________________
                      Describe any other form of ownership such as a Life Estate:
                       ___________________________________________________________________________

My residence is a:    Single family house
                      2 to 4 unit property
                      Mobile home
                      Other:______________________________________________________________________

Date that my house was built: _________________________.


My/our current housing expense is:
                     $_________ Mortgage payment including principal and interest
                     $_________ Annual property taxes
                     $_________ Annual homeowner’s insurance
                     $_________ Average monthly utilities (include heat and lights)


My total monthly debt for loans, credit cards and other obligations is $_______________.


I believe I could afford to pay about $_________ a month to repay a home improvement loan.


The kinds of improvements I think are needed to my home are:
________________________________________________________________________________________________
________________________________________________________________________________________________


Have you ever had a home improvement loan from the Minnesota Housing Finance Agency or the Weatherization
program?  Yes  No
If yes, please state which program and when the assistance was provided:
________________________________________________________________________________________________

I/we certify that all statements on this pre-application are true and correct to the best of my/our knowledge.
I/we understand that any intentional misstatements will be grounds for disqualification.

Applicant: ___________________________________________________                 Date: ___________________
                                      (signature)


Co-Applicant: ________________________________________________                 Date: ___________________
                                      (signature)




Page 20                           Owner-occupied Rehabilitation Guide: Step Three                      2006 DEED
                                                              Important
 Example                                                    Privacy Notice


                                  Read Before Completing the Application Form

We are asking that you provide the information on the Rehabilitation Program application form to determine if you are
eligible to participate in the program.
Your name, address and the amount of assistance you receive are considered public data under the Minnesota Data
Practices Act. Other information that you provide to the housing rehabilitation program about you and your household
is considered private data.
We will use your private data only when it is required for administration and management of the program. Persons or
agencies with whom this information may be shared include:
    •   Staff and other persons involved in program administration.
    •   Local loan committee members who approve applications.
    •   Auditors who perform required audits of this program.
    •   Authorized personnel from the Minnesota Dept. of Employment and Economic Development, the U. S. Dept.
        of Housing and Urban Development or other local, state and federal agencies providing funding assistance for
        your loan.
    •   Members of the local governing board for the purpose of addressing/resolving applicant complaints (as
        addressed in the project’s policy and procedural manual).
    •   Those persons who you authorize to see it.
    • Law enforcement personnel in the case of suspected fraud or other enforcement authorities as required.
We cannot release private data to anyone else or use the private data in any other way unless you give us permission by
completing a consent form that we will provide. Please keep in mind, however, that data must be released if required by
court order, and, in addition, your private data may be released if Congress or the Minnesota Legislature passes a new
law that authorizes or requires such release of data.
Signature
of Applicant                                                                Date:
Signature
of Co-Applicant                                                             Date:

Minnesota law gives you important rights in regard to information maintained about you. These include:
    •   The right to see and obtain copies of the data maintained on you,
    •   Be told the contents and meaning of the data, and
    •   Challenge the accuracy and completeness of the data.


To learn more about these rights, contact: __________________________ at _________________________




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Three                              Page 2
                                                             Release of
 Example                                                    Information


                                                   Note:
            This single form could be used for all releases if other organizations will accept it.



                                            (Agency Letterhead)



This is your authorization to release information regarding my income, employment, bank
accounts, outstanding debts including mortgages, to order a consumer credit report and to
obtain other information about _________________ that is necessary to support my application
for a housing improvement loan from the ___________________ (administering agency).

You may make copies of this letter to distribute to any party with which I have a relationship and
that party may treat that copy as an original.

__________________________________________                           _______________
                   Signature of Applicant                                      Date




Page 22                            Owner-occupied Rehabilitation Guide: Step Three                   2006 DEED
                                                          Verification of
  Example                                             Social Security Income


                                        Note: Use only if appropriate
                   (On agency’s letterhead — send with self-addressed, stamped envelope)

Name of
Applicant:
Social Security                                                    Social Security
Number:                                                            Claim Number
StreetAddress
of Applicant:                                                      Date of Birth:
City, State,
Zip Code:                                                          Phone:

I hereby authorize the Social Security Administration to provide information regarding my monthly benefits to
the (agency name). I understand the information is private data and will be treated as such.

Signature:                                                         Date:

TO THE SOCIAL SECURITY ADMINISTRATION: Please provide the information requested below:
The current gross monthly amount of the Social Security benefit is: $
The amount deducted monthly for Medicare is:                       $
The net amount of the Social Security check each month is:         $
The above amount became effective on:

Please indicate any anticipated changes to the amount over the next 12 months:

The monthly amount of the Supplemental
Social Security check each month is:                               $
The above amount became effective on:

Please indicate any anticipated changes to the amount over the next 12 months:

Please include any other relevant information regarding this claimant on the reverse side of this form.
The SSA is unable to verify the requested information at this time because:
 Claim still pending
 No record based upon identifying information
 Other reasons given on the reverse side of this form.

Social Services
Signature                                                               Date:

Title:                                                                  Phone:

Please return this form to the attention of __________________________________ at (SCDP Agency)
If you have questions, please call __________________________________ at __________________.


2006 DEED                          Owner-occupied Rehabilitation Guide: Step Three                        Page 2
                                                                       Verification of
  Example                                                               Assistance


                                                Note: Use only if appropriate
                           (On agency’s letterhead — send with self-addressed, stamped envelope)

To: County Social Services


Part I: To be completed by the Applicant

I, ___________________________________________________________________________, living at
                      First Name                                           Last Name

__________________________________________________________________________________
         Street Address                                         City                              State, Zip Code
do hereby authorize the County Social Services staff to furnish the Small Cities Development Program with information
regarding the monthly payment made to me for AFDC, General Assistance or other direct payments.

This information is required for income verification for the Housing Rehabilitation Program. The information you
provide will be private and only used in establishing eligibility for this family.

__________________________________________________                          ____________________________
                                   Signature                                               Date



Part II: To be completed by the Social Services Agency

Type of Assistance Provided:__________________________________                         Monthly Amount: $___________

If the above recipient receives a Child Support Bonus Payment, please give the monthly amount: $ _______________

Is this payment?  Regular                 or  Sporadic

If it is sporadic, what was the total amount received for the past 12 months? $____________.

Is the same amount likely to be received in the next 12 months?  Yes  No

Does the recipient receive any other income to the best of your knowledge?  Yes  No
     If Yes, what is the source? ________________________________________________
                 and how much is received? $_________________

Social Services
Signature                                                                         Date:

Title:                                                                            Phone:

Please return this form to the attention of __________________________________ at (SCDP Agency)

If you have questions, please call _____________________________________.




Page 2                                        Owner-occupied Rehabilitation Guide: Step Three                      2006 DEED
                                                             Verification of
     Example                                                  Employment


                                          Note: Use only if appropriate
                     (On agency’s letterhead — send with self-addressed, stamped envelope)


Name of Employer: ________________________________________________________________________________
Address: ________________________________________________________________________________________
Employee: _______________________________________________________________________________________


The person named above has stated that he or she is now employed, or has been employed by your firm. Their
signature on the attached form provides you with permission to release the requested information.
This request for verification of employment and earnings is required to establish eligibility for participation
in our housing improvement loan program. The information you provide will be private and only used in
establishing eligibility for this family.

1.    Gross earnings during the past 12 months: $_____________
2.    Is this person currently an employee?  Yes  No
3.    If not, is this a temporary situation?    Yes  No
4.    If employment is seasonal or sporadic, please give lay-off periods: ______________________________________
5.    Original or re-hire date: ________________ Termination date: ________________
6.    Average number of hours per work week: Straight time _____ Overtime _____
7.    Current Gross pay rate: $ __________ per ________      Effective date of rate: ________________
8.    Overtime is paid at the rate of: $ __________ per _________
9.    Expected change in pay rate: $ __________     Date: ________________
10. Amount of bonus, incentive pay, commission or tips: $ __________ per ________
11. Does this person receive vacation with pay?  Yes  No              Sick leave with pay?  Yes  No
12. Amount deducted for health insurance: $ __________ per ________ (weekly, monthly, etc.)
13. Employee’s position or job title: _____________________________________________

Person completing
this form                                                                  Date:

Title:                                                                     Phone:




2006 DEED                             Owner-occupied Rehabilitation Guide: Step Three                       Page 2
                                                                   Mortgage
     Example                                                      Verification


                                         Note: Use only if appropriate
                    (On agency’s letterhead — send with self-addressed, stamped envelope)


Name of Mortgage Lender: _________________________________ Date of Request: ________________________
Applicant: ______________________________________________ Mtge. Number: _________________________

Signature of Applicant: ____________________________________

To the Lender named above, I hereby grant the release of information regarding my income and assets to (Name of
agency). I understand that this information will be treated as private data. This verification request is required to
establish my program eligibility and I would appreciate your prompt completion of the form.
Please return it to: _________________________________________________________________________________
                                            Name of SCDP contact, agency’s address


1.    Original Date of Mortgage:
2.    Type of Loan and Loan number:
3.    Original Amount:                 $
4.    Current Mortgage Balance:        $
5.    Monthly Mortgage Payment:        $                                             Interest Rate Paid:________
6.    Does this Payment Include an Escrow for Taxes?  Yes  No
7.    Is this mortgage current?    Yes  No
8.    How many times has this borrower paid more than 30 days late within the last 12 months? _________
Comments on this loan:




Person completing
this form                                                                            Date:

Title:                                                                               Phone:



Return this Form to: _______________________________________________________________________________
                                                          (Name of SCDP Contact, Address)




Page 26                            Owner-occupied Rehabilitation Guide: Step Three                                 2006 DEED
                                           Checking/Savings Account Verification
  Example                                  Owner-occupied Housing Rehabilitation


                                            (On agency’s letterhead)
                                  (Send with self-addressed, stamped envelope)


Name of Financial Institution: _______________________________ Date of Request: ________________________
Applicant: _______________________________________________ Social Security Number: __________________


To the Bank named above, I hereby grant the release of information regarding my income and assets to
     (Name of agency)        . I understand that this information will be treated as private data. This verification
request is required to establish my program eligibility and I would appreciate your prompt completion of the form.
Please return it to:                    (Name of SCDP Contact, Agency’s Address)


Signature of Applicant:_____________________________________________


Current Checking Account Balance:                  $                                 Interest Rate Paid:
Current Savings Account Balance:                   $                                 Interest Rate Paid:
Saving Certificates:                               $                                 Interest Rate Paid:
Saving Certificates:                               $                                 Interest Rate Paid:
Total interest earned during the last 12 months from all above:                      $
To the best of your knowledge, will there be a change in earnings during the next 12 months?




Person completing
this form                                                                  Date:

Title:                                                                     Phone:




2006 DEED                          Owner-occupied Rehabilitation Guide: Step Three                               Page 2
                                                    Verification of Title,
     Example                               Current Taxes and Proof of Insurance


      Note: If Title Company is used to verify mortgage, delete questions re . taxes and insurance .
                  • Place this in each applicant’s file.
                  • Attach copies of any documents that verify the following information.


Applicant: ____________________________________________ Project Number: ____________________________


On __________, 20___, I viewed and made copies of the following documents to verify the following:


I.    PROOF OF OWNERSHIP:
Legal description:


Owner(s) of Record (full names):


As shown by Document Number_________ of Book __________ of _____________ Page(s) _____________ in the
Office of the Register of Title or the County Recorder, _____________________ County, Minnesota.
What is the status of the mortgage?
    Free and clear
    Life estate
    Subject to mortgage
    Subject to Contract for Deed
          If Contract for Deed, name of Vendor: __________________________________________________________
          Date of Vendor’s sign-off, agreeing to work:__________________

II. Proof of Mortgage Being Current:



III. Proof of Current Taxes Paid:

Date paid: _________________ Amount paid: $______________

IV. Proof of Current Homeowner’s Insurance:

Insurance Company: ________________________________________ Policy Number: ________________________
Type of coverage:___________________________________________ Date paid: ___________________________


SCDP Agency staff signature: _________________________________




Page 2                            Owner-occupied Rehabilitation Guide: Step Three                   2006 DEED
                                                Contract for Deed Vendor’s
 Example                                            Pre-consent Form


                                       Note: Use only if appropriate .
                  (On agency’s letterhead — send with self-addressed, stamped envelope)


DATE:
TO: Contract for Deed Vendors
FROM:


RE: Pre-consent Form

PLEASE RETURN THE ORIGINAL OF THIS FORM TO:


As the Contract for Deed Vendor(s) of the property being purchased by _______________________, I/we are aware of
the proposed improvements intended for the property located at _________________________________________.


I have read and understood the information contained in the “Contract for Deed Vendor’s Responsibility” form.
Knowing and understanding this information I will sign the Mortgage and/or Repayment Agreements needed to secure
the loan from the agency listed above for the Small Cities Development Program.


Vendor’s Full Name: ______________________________________________________________________________
                                                         (please print)

Vendor’s Signature: _________________________________________             Date ________________________________

Vendor’s Spouse Full Name: ________________________________________________________________________
                                                         (please print)

Vendor’s Spouse Signature: ___________________________________            Date ________________________________

Address: ________________________________________________________________________________________

Phone: (_______)__________________



Vendor’s Full Name: ______________________________________________________________________________
                                                         (please print)

Vendor’s Signature: _________________________________________             Date ________________________________

Vendor’s Spouse Full Name: ________________________________________________________________________
                                                         (please print)

Vendor’s Spouse Signature: ___________________________________            Date ________________________________

Address: ________________________________________________________________________________________

Phone: (_______)__________________




2006 DEED                       Owner-occupied Rehabilitation Guide: Step Three                          Page 2
                                                    Contract for Deed Vendor’s
  Example                                                 Responsibility


                                        Note: Use only if appropriate .
                   (On agency’s letterhead — send with self-addressed, stamped envelope)


DATE:
TO: Vendors of Contract for Deed Property
FROM:


RE: Vendor’s Responsibility

When an applicant for a Rehabilitation Loan is purchasing the property to be improved by a Contract for Deed, the
Contract Vendor (Seller) is required to sign the Repayment Agreement and/or Mortgage along with the Contract
Vendees (the Buyers of the property). The reason for this requirement is that the Contract Vendor maintains legal
property ownership until the Contract for Deed is paid in full by the Buyer.


The Rehabilitation Loan Repayment Agreements and/or Mortgage will take a secondary position recorded behind the
Contract for Deed or any existing first Mortgage.


The sole purpose for requiring the signatures of the Vendors is to secure the interest of the funds loaned by the locality
for the improvements to the property. The interest in the property cannot be secured without all parties involved in
property ownership signing the securing instrument.


The Contract Vendor is not personally liable for misstatements on the Loan application, the use or misuse of Loan
Proceeds, occupancy requirements or repayments of the Loan. However, if the applicant defaults on the Loan, the Loan
will not be forgiven. The property owners listed on the title (which includes both the Contract Vendee and Contract
Vendor) would become liable for the Loan repayment from any proceeds obtained from the resale of the improved
property.


Arrangements for repayment of the Loan if the applicant defaults are made by the Loan funding agent. It is the loan
funding agent’s policy to make every attempt possible to collect from the applicant first.


If the terms of the Contract for Deed are properly fulfilled within the repayment term for the Rehabilitation Loan, and
the Contract Vendor files the proper conveyance documents to the Contract Vendee, the Vendor will no longer have an
interest in the property nor an obligation to satisfy any terms of the Rehabilitation Loan.




Page 0                            Owner-occupied Rehabilitation Guide: Step Three                             2006 DEED
                                                      Life Estate Owner’s
 Example                                               Pre-consent Form


                                       Note: Use only if appropriate .
                  (On agency’s letterhead — send with self-addressed, stamped envelope)


DATE:
To: Life Estate Owners
FROM:
Re: Pre-consent Form


PLEASE RETURN THE ORIGINAL OF THIS FORM TO:

As the owner(s) of the property being occupied by _________________________ under a Life Estate, I/we are aware
of the proposed improvements intended for the property located at _________________________________________.


I/we have read and understood the information contained in the “Life Estate Owner’s Responsibility” form. Knowing
and understanding this information I will sign the Mortgage and/or Repayment Agreements needed to secure the loan
from the agency listed above for the Small Cities Development Program.


Vendor’s Full Name: ______________________________________________________________________________
                                                          (please print)

Vendor’s Signature: _________________________________________               Date ________________________________

Vendor’s Spouse Full Name: ________________________________________________________________________
                                                          (please print)

Vendor’s Spouse Signature: ___________________________________              Date ________________________________

Address: ________________________________________________________________________________________

Phone: (_______)__________________



Vendor’s Full Name: ______________________________________________________________________________
                                                          (please print)

Vendor’s Signature: _________________________________________               Date ________________________________

Vendor’s Spouse Full Name: ________________________________________________________________________
                                                           (please print)

Vendor’s Spouse Signature: ___________________________________              Date ________________________________

Address: ________________________________________________________________________________________

Phone: (_______)__________________




2006 DEED                        Owner-occupied Rehabilitation Guide: Step Three                           Page 
                                                         Life Estate Owner’s
  Example                                                   Responsibility


                                        Note: Use only if appropriate .
                   (On agency’s letterhead — send with self-addressed, stamped envelope)


DATE:


TO: Owners of Life Estate Property


FROM:

RE: Owner’s Responsibility


When an applicant for a Rehabilitation Loan is occupying a property held under a Life Estate, the owner is required
to sign the Repayment Agreement and/or Mortgage along with the Holder of the Life Estate. The reason for this
requirement is that the Owner maintains legal property ownership until the terms of the Life Estate are met by the
Holder.


The Rehabilitation Loan Repayment Agreements and/or Mortgage will take a secondary position recorded behind any
existing first Mortgage.


The sole purpose for requiring the signatures of the Owners is to secure the interest of the funds loaned by the locality
for the improvements to the property. The interest in the property cannot be secured without all parties involved in
property ownership signing the securing instrument.


The Property Owner is not personally liable for misstatements on the Loan application, the use or misuse of Loan
Proceeds, occupancy requirements or repayments of the Loan. However, if the applicant defaults on the Loan, the Loan
will not be forgiven. The property owners listed on the title (which includes both the Holder of the Life Estate and
the Owner) would become liable for the Loan repayment from any proceeds obtained from the resale of the improved
property.


Arrangements for repayment of the Loan if the applicant defaults are made by the Loan funding agent. It is the loan
funding agent’s policy to make every attempt possible to collect from the applicant first.


If the terms of the Rehabilitation Loan are met before the terms of the Life Estate, the Small Cities Development
Program will no longer have an interest in the property and the lien on the property will be lifted.




Page 2                            Owner-occupied Rehabilitation Guide: Step Three                            2006 DEED
                                                           Annual Income:
 Example                                                  24 CFR, Part 5 .609
(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. 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:
        (i) The amount of the allowance or grant exclusive of the amount specifically designated for shelter or
             utilities; plus
        (ii) 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 (b)(6)(ii) 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).
(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);




2006 DEED                          Owner-occupied Rehabilitation Guide: Step Three                                Page 
                                                                          Annual Income:
 Example continued                                                       24 CFR, Part 5 .609
     (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);
     (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 Sec. 5.403;
     (6) 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.
     (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.
(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.

[61 FR 54498, Oct, 18, 1996, as amended at 65 FR 16716, Mar. 29, 2000]



Page                                   Owner-occupied Rehabilitation Guide: Step Three                        2006 DEED
                                                                Income
     Example                                           Inclusions and Exclusions


                                                       Note:
     Use this information in determining assets if your individual program guidelines establish an asset limit.



Assets
Assets Include:                                                Assets Do Not Include:
1.    Amounts in savings and checking accounts.                1    Necessary personal property associated with the
                                                                    home to be improved.
2.    Stocks, bonds, savings certificates, money market
      funds and other investment accounts.                     2.   Interest in Indian trust lands.
3.    Equity in real property or other capital investments,    3.   Assets that are part of an active business or farming
      other than the home occupied by the applicant for             operation.
      housing rehabilitation funds. Equity is defined as the
      estimated current market value of the asset less the          NOTE: Rental properties are considered personal
      unpaid balance on all loans secured by the asset and          assets held as an investment rather than business
      reasonable costs (such as broker fees) that would be          assets unless real estate is the applicant’s main
      incurred in selling the asset.                                occupation.

4.    The cash value of trusts that are available to the       4.   Assets not accessible to the family and which provide
      household.                                                    no income for the family.

5.    IRA, Keogh and similar retirement savings accounts,      5.   Equity in the home in which the family resides,
      even though withdrawal would result in a penalty.             including ten contiguous acres.

6.    Contributions to company retirement or pension
      funds that can be withdrawn without retiring or
      terminating employment.
7.    Assets which, although owned by more that one
      person, allow unrestricted access by the applicant.
8.    Lump sum receipts such as inheritances, capital
      gains, lottery winnings, insurance settlements, and
      other claims.
9.    Personal property held as an investment such as
      gems, jewelry, coin collections, antique cars, etc.
10. Cash value of insurance policies.
11. Assets disposed of for less than fair market value
    during two years preceding application for assistance.




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Three                               Page 
Commonly Asked Questions About Calculating Income

DEED has selected the Section 8 rental assistance program’s definition of income as the standard to be used
by Small Cities Development Program grantees. Since not all situations are clearly covered by the regulations,
(which are summarized on the previous pages) program administrators should develop local policies that
cover circumstances they are likely to encounter. Policies must be applied consistently to every household.
Q1: Should a grantee take deductions from annual income for dependents or elderly and disabled
    households when determining eligibility for a housing rehabilitation loan or grant?
A1: No, gross annual income is always used for determining income eligibility. However, a SCDP grantee
    may have policies that make certain deductions to determine affordability once an applicant has met
    the income eligibility requirements. Grantees also may have policies to take deductions to income
    when determining a tenant’s share of rent for a SCDP-assisted unit, but gross income is always used to
    determine if applicants and beneficiaries are low and moderate income families.

Q2: Are alimony and child support considered income?
A2: Yes, both sources are considered income, but the grantee should verify that payments are actually
    being made. If the court has ordered payment, but they are not being received by the family, the
    grantee should not include the income in making an eligibility determination.

Q3: If a family has life insurance with a cash value, does the cash value count as an asset?
A3: Yes, the total cash value is considered an asset, and the value should be treated as any other asset. If
    the cash value is less than $5,000, the grantee should establish if it is earning any interest and include
    the interest in the family’s gross annual income. If the value is greater than $5,000, the grantee should
    include the greater of the actual interest earned or the imputed earnings based upon the rate HUD
    establishes annually.

Q4: Is financial aid for a student considered income?
A4: No, payments made to the student or to the educational institution for tuition, books, fees, or living
    expenses are not included as income.

Q5: Are earned income tax credits considered income?
A5: No, they are not.

Q6: A family member quit a good paying job and is currently self-employed at considerably less income.
    How should their income be projected?
A6: If there is no clear pattern of income, the person must present a credible estimate of expected income
    from their current job and certify that it is “true and accurate to the best of their ability.”

Q7: How does a grantee project income if someone has only worked for a few months at a job?
A7: If the current situation is representative of what is likely to be earned in the next twelve months, the
    grantee should calculate the actual income to date on a monthly or quarterly basis and “annualize” it.
    For example, if someone has worked for two months in their current job, and their gross earnings are
    typically $600 a month, multiply $600 x 12 months: $7,200.

Page 6                         Owner-occupied Rehabilitation Guide: Step Three                    2006 DEED
Q8: What if someone has seasonal employment and regularly receives unemployment compensation
    during the off-season?
A8: The grantee should look at the pattern of past years and project the income over the next 12 months,
    taking into account any special circumstances. The previous year’s income should be verified by a
    third party (employer). For example, a construction worker is employed for 6 months a year and earns
    $600 a week x 24 weeks: $14,400, and is unemployed for 6 months and receives $1,000 a month:
    $6,000. Anticipated gross annual income would be $20,400.

Q9: How does a grantee calculate sporadic income, such as that earned from Avon sales?
A9: If the person has a history of this type of sales, the grantee may use the family’s income tax return
    and use net income from the business as entered on Tax Form 1040. If the person has little past
    experience, use the same procedure as described above in “A6.”

Q10: How does a grantee calculate income from someone who is self-employed, such as a farmer, and the
     person states that projections are impossible due to conditions beyond their control?
A10: If a grantee feels this is justified, they may use an average figure based on the past three years.
     Adjustments should be made for any anticipated special circumstances that may increase or decrease
     the amount for the next twelve months.

Q11: If a family has experienced a business loss during the past year and projected income is still expected
     to be a negative number, should a grantee use the negative number or zero in documentation for the
     file?
A11: Use “zero” on all forms. Since the purpose of verifying income is to establish eligibility for the
     program, a negative number is irrelevant.

Q12: How should a grantee handle depreciation for tax purposes?
A12: Section 8 regulations allow deductions from gross income for straight line depreciation of assets but
     do not allow deductions for expenditures to expand a business or retire debt.

Q13: Does a live-in aide’s income count in calculating a family’s gross annual income?
A13: No. A family member may qualify as a “live-in aide” if they are assisting someone who meets the
     Social Security definition of disabled and the relative would otherwise not be living there.

Q14: Does income for foster children count as family income?
A14: No, nor does income received for foster adult care.

Q15: Must a grantee include the income of an estranged spouse?
A15: No, if it is clear that the spouse is likely to remain absent permanently.




2006 DEED                       Owner-occupied Rehabilitation Guide: Step Three                           Page 
                                        Home Improvement Loan Denial of Assistance:
     Example                                        Appeal Procedure


                                             Note: Use only if appropriate .
                                                (On agency’s letterhead)


Date
Name and Address of Applicant


Dear ______________


You recently sent us a completed Preliminary Application for a home improvement loan. I am sorry that you do not
appear to be eligible for assistance based upon our program guidelines for the following reason(s):
      ___ You do not own your home.
      ___ The Contract for Deed holder will not agree to participate.
      ___ Your income is above the limits for the program.


The following are policies regarding the appeal process:
1.    The applicant may appeal the denial either orally or in writing to the Rehabilitation Specialist within 14 days of
      receipt of the denial.
2.    In the event that the applicant is not satisfied with the decision of the Rehabilitation Specialist, he/she may appeal
      to:    (Agency Director)
3.    Further appeal may be made to the (local loan or advisory committee) by appearing in person before the
      committee.
4.    Final appeal may be made to:
          Minnesota Department of Employment and Economic Development
          500 Metro Square
          121 East Seventh Place
          St. Paul, MN 55101-2146


Sincerely,




Page                               Owner-occupied Rehabilitation Guide: Step Three                             2006 DEED
                                                  Income Computation
 Example                                              Worksheet

Name of Applicant: _______________________________________________________________________________

Project Number: ___________________________________________        Date: ________________________________

Staff Person: _____________________________________________________________________________________



Name/ Relationship                   Source of Income                      Hrly/Weekly/or   Gross Annual
To Applicant                                                               Monthly Rate     Income




                                                                           Total Gross
                                                                           Annual Income
Maximum Income Limit For Hsehold Size: $___________________
Effective date of Income Limits used:_________________________
Type of SCDP Loan: ______________________________________
Other Funding Source:_____________________________________
Other Funding Amount: $________________

Agency Determination:
Applicant is:  Eligible for ______________________________________________________________________
                                                       (Type of Loan)
              Ineligible


        Comments: _______________________________________________________________________________
         ________________________________________________________________________________________
         ________________________________________________________________________________________




2006 DEED                      Owner-occupied Rehabilitation Guide: Step Three                      Page 
                                                  Home Improvement Loan
  Example                                   Application and Interview Notification


                                                      Note:
                                              (On agency’s letterhead)


Date
Name and Address of Applicant


Dear ______________

You recently sent in a completed Preliminary Application for a housing improvement loan. As you know from our
telephone conversation, you appear to be eligible for participation in our program.
I am now sending you two things: an information sheet entitled “What to Expect and What Not to Expect from
the Home Improvement Program” and a full Application form for you to read in preparation for your interview
with ________________ on ________________ at _______. Please come to our offices at ________________.
During our interview, I will help you complete the full application, and I also will answer any questions about how the
rehabilitation process works. Feel free to bring a family member with you who can be of assistance. Please bring the
following documents with you to our meeting:
1. Proof of property ownership. A legal description of the property should be included. This may include a copy of
     an original or any one of the items listed below:
     • Deed or Deed of Trust
     • Copy of a Mortgage
     • Homestead Exemption
2. Proof that you are current in your property taxes. One of these would be proof:
     • Property tax payment receipt from the city
     • Canceled check for property taxes to the city
     • Mortgage statement from your lender saying taxes were paid
3. Proof of identification and residency. This could include one of the following:
     • Driver’s license
     • Social Security or Pension Award Letters that show your address
     • Property Tax Bills — showing your address
     • Utility Bills — showing your address
4. Proof of income if you receive any of the following:
     • If self-employed or receive farm income, last three years of IRS form 1040
     • If you receive child support or alimony, the copy of the court award
We will verify other income from employers, Social Security, or Social Services from the release statement you sent
with your Preliminary Application. I look forward to meeting you and working with you in the weeks ahead. Call me
if you have questions before our meeting. I can be reached at _____________________________.

Sincerely,


Enclosures:   Full Application for Home Improvement Loan
              “What to Expect and What Not to Expect...”




Page 0                            Owner-occupied Rehabilitation Guide: Step Three                          2006 DEED
                                                     Home Improvement Loan
  Example                                               Full Application

Part I:
Name:                                                      Age        Social Security Number: Marital Status:
                                                                                                 Married,
Applicant:                                                                                       Separated, or
                                                                                                 Unmarried
                                                                                                   (includes widowed,
Co-Applicant:                                                                                      divorced, or single)



Street Address:                                                       How long have you lived here? ______________

City, State, Zip:                                                     Your Work Phone:

County:                                                               Your Home Phone:
Person to contact if we
cannot reach you:                                                     Relationship:

Street Address:                                                       Work Phone:

City, State, Zip                                                      Home Phone:


This information is requested solely for the purpose of determining compliance with Federal civil rights law and your
response will not affect consideration of your application.
Gender of Applicant                                  Race/Ethnicity of Applicant (check one)     Hispanic Ethinicity
 Male                                                White                                      Yes  No
 Female                                              Black or African American
                                                      Asian
Does any member of the household                      American Indian/Alaskan Native
have disabilities?                                    Native Hawaiian/Other Pacific Islander
 Yes  No                                            American Indian/Alaskan Native & White
If “Yes,” describe the nature of the disabilities:    Asian & White
                                                      Black/African American & White
                                                      American Indian/Alaskan Native & Black/African American
                                                      Other Multi-Racial




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Three                            Page 
                                                         Home Improvement Loan
    Example continued                                       Full Application

Part II: Household Information

How many people live permanently in your household? _____
List all household members, their monthly gross income and source of income including Social Security, Wages,
Pensions, AFDC, Child Support or Alimony, SSI, General Assistance, Self-employment, Farm income, and Rental
income: (For self-employed persons, farm and rental property income, use the appropriate line for “adjusted gross
income” from the 1040 IRS Income Tax Return.)
                                                        Monthly
Name                                         Birth Date Gross Income        Source of Income




Have you made all of your monthly payments (housing payments, utilities, loans, credit cards) in a timely manner?
 Yes  No If the answer is “no,” please explain:




From your last property tax statement:
•     What is the Estimated Market Value of your home?
•     What are your yearly property taxes?
•     Are your property taxes current?


What year was your home built (approximately)?

Is your home insured?  Yes  No
If so, with which insurance company?

Have you ever received a Minnesota Housing Finance Agency Loan or Grant?  Yes  No


Has your home ever been weatherized with Department of Energy funds?       Yes  No




Page 2                            Owner-occupied Rehabilitation Guide: Step Three                        2006 DEED
                                                          Home Improvement Loan
 Example continued                                           Full Application

Part III: Bank Accounts
Please list the name and address of your bank, savings and loan, or credit union:
Bank:                                                  Address:
 Checking Account and/or  Savings Account

Bank:                                                  Address:
 Checking Account and/or  Savings Account

 Check here if you have no bank accounts of any kind.


Part IV: Assets
Please list the name and value of your assets that would include, but not limited to, stocks, bonds, equity in property
other than your home, cash value of insurance or proceeds from inheritance, capital gains, insurance settlements, court
judgements, and other claims.
                                                                  $
                                                                  $
                                                                  $
                                                                  $
                                                                  $
                                                                  $
                                                                  $


Part V: Credit History
Please answer all questions. If the answer to any of them is “yes,” please attach a written explanation.
Are there any outstanding financial judgements or liens against you?        Yes  No
Have you declared Bankruptcy within the last 36 months?                     Yes  No
Have you lost any property through foreclosure or given title or deed to    Yes  No
anyone to avoid foreclosure?
Are you a co-signer on any note or loan?                                    Yes  No




2006 DEED                          Owner-occupied Rehabilitation Guide: Step Three                              Page 
                                                           Home Improvement Loan
 Example continued                                            Full Application


Part VI: Debts
Please list all current financial obligations, child support or alimony, installment accounts, charge accounts, debts to
banks, finance companies, and government agencies.
                                                        Year Loan Maximum                                          Is Debt
                     City and State                     Account Amount              Present        Monthly         Business
Creditor:            Location of Creditor:              Opened: Owed:               Balance:       Payments:       Related?
Mortgage
                                                                    $               $              $
company:
Contract-for-Deed
                                                                    $               $              $
holder:

                                                                    $               $              $

                                                                    $               $              $

                                                                    $               $              $

                                                                    $               $              $

                                                                    TOTALS:         $              $


Part VII: Certification

I certify that by signing this that the information stated above is true and correct to the best of my knowledge. I realize
that giving false information will result in disqualifying me from assistance in the Housing Rehabilitation Program.

I hereby authorize the Housing Rehabilitation staff to enter my home to identify rehabilitation necessary work items, to
take photographs, and to inspect work in progress while construction is occurring during regular business hours.




Signature of Applicant: ___________________________________________                Date: __________________________


Signature of Co-applicant: _________________________________________               Date: __________________________




Page                              Owner-occupied Rehabilitation Guide: Step Three                            2006 DEED
                                            What To Expect and What Not To Expect
     Example                                From The Home Improvement Program


                                                      Note:
                             Administrators should adapt this to fit their own programs.


Things That Homeowners Do in the Home Improvement Program
The housing program staff will help homeowners during the home improvement process, but homeowners are
responsible for making the choices and doing the work listed below.
1.    Homeowners provide the program staff with necessary information promptly.
2.    Homeowners, not the program staff, choose contractors to put together bids.
3.    Homeowners, not the program staff, select the contractor to do the work on the house.
4.    Homeowners sign home improvement contracts with the selected contractor.
5.    Homeowners request and approve payments to their contractors.
6.    Homeowners are part of inspecting and approving work performed by their contractors.
7.    Homeowners work with contractors to settle disagreements during the job.
8.    Homeowners contact their contractors to ask them to correct problems covered by contractor warranties during the
      first year after the job has been completed.


Things Owners Should Think About Before Taking out a Home Improvement Loan
1.    Not all the work that homeowners want to be done can always be done.
2.    Repairs will correct health and safety problems, but they may not solve all problems in your home.
3.    Don’t expect the house to be completely new after the work is done.
4.    Don’t expect all floors, walls, ceilings, doors, windows, etc. to be completely plumb, level, and square when work
      is done.
5.    It can be stressful living in a house while a contractor is performing the work.
6.    Very few times in life is anyone completely satisfied with things they buy or have repaired. Buying a house or
      having a house repaired is no different.
7.    Houses always need improvements. It would be a good idea to save $25 a month to help cover the cost of future
      repairs and maintenance.
8.    Finally, the program staff is not the contractor and cannot guarantee that homeowners will be satisfied with the
      work done by the contractors.




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Three                              Page 
                                                       Lead-Safe Housing Rule
  Example                                                Applicability Form

Name/Address of subject property: ___________________________________________________________________


Regulation Eligibility Statement (check all that apply):
    ___ Property is receiving Federal funds.
    ___ Unit was built prior to 1978.
          Note: If both Eligibility Statements above have been checked, continue with the Exemption Statements below.
          Otherwise, the regulation does not apply, sign and date the form.


Regulation Exemption Statements [24 CFR 35.115] (check all that apply):
    ___ Emergency repairs to the property are being performed to safeguard against imminent danger to human
        life, health or safety, or to protect the property from further structural damage due to natural disaster, fire or
        structural collapse. The exemption applies only to repairs necessary to respond to the emergency.
    ___ The property will not be used for human residential habitation. This does not apply to common areas such as
        hallways and stairways of residential and mixed-use properties.
    ___ Housing “exclusively” for the elderly or persons with disabilities, with the provision that children less than six
        years of age will not reside in the dwelling unit.
    ___ An inspection performed according to HUD standards found the property contained no lead-based paint.
    ___ According to documented methodologies, lead-based paint has been identified and removed; and the property
        has achieved clearance.
    ___ The rehabilitation will not disturb any painted surface.
    ___ The property has no bedrooms.
    ___ The property is currently vacant and will remain vacant until demolition.


If any of the above Exemption Statements have been checked, the Regulation does not apply.
In all cases, sign and date the form.


I, _____________________________________________, certify that the information listed above is true and accurate to
                     Printed Name
                                                  the best of my knowledge.


Signature: ___________________________________________________                   Date: ____________________________


Organization: ________________________________________________




Page 6                             Owner-occupied Rehabilitation Guide: Step Three                             2006 DEED
                                      Attachment A — Lead-safe Housing Rule Checklist For
    Example                                  General Compliance Documentation

(Program participants can use this checklist as a guide for determining whether or not they are proceeding in a manner
required by the LSHR and that they are maintaining documentation for each CPD-assisted project. Field Office
staff can use the checklist as a means for familiarizing themselves with the kinds of documentation that should be
maintained in order to demonstrate LSHR compliance. Compliance with the program-specific requirements may not be
substantiated solely by the documents included on this general checklist. Additional guidance provided as referenced in
the checklist.)
As appropriate, the following documents should be maintained in CPD-assisted project files for properties constructed
before January 1, 1978, in order to demonstrate general knowledge and compliance with basic LSHR requirements.
Standard forms are available in the Federal Register (FR), as indicated by the sources noted below. Citations from 24
CFR Part 35 are also provided as additional references.
      ___ Applicability Form [§35.115] – A copy of a statement indicating that the property is covered by or exempt
          from Lead Safe Housing Rule.1
           (Note: (A) If the property is exempt, the file should include the reason for the exemption and no further
           documentation is required; (B) if the property is covered by the Rule, the file should include the appropriate
           documentation to indicate basic compliance, as listed below.)
      ___ Summary Paint Testing Report or Presumption Notice [§35.930(a)] – A copy of any report to indicate the
          presence of lead-based paint (LBP) for projects receiving up to $5,000 per unit in rehabilitation assistance. If
          no testing was performed, then LBP is presumed to be on all disturbed surfaces.2
      ___ Risk Assessment Report [§35.930(c)(2)] – A copy of a report (in addition to the requirements of §35.930(a))
          to indicate any presence of lead-based paint hazards for projects receiving more than $5,000 per unit in
          rehabilitation assistance.4
           (Note: If the property receives more than $25,000 in assistance, more stringent requirements apply, including
           compliance with applicable state requirements, as appropriate. [See §35.930(d)].
      ___ Notice of Evaluation [§35.125(a)] – A copy of a notice demonstrating that an evaluation summary was
          provided to residents following a lead-based-paint inspection, risk assessment or paint testing.3 4
      ___ Clearance Report [§35.930(b)(3)] – A report indicating a “clearance examination” was performed of the work-
          site upon completion.
      ___ Notice of Hazard Reduction Completion [§35.125(b)] – Upon completion, a copy of a notice to show that a
          LBP remediation summary was provided to residents.5


________________________
Source: Federal Register (FR), 64 FR 50139-50231, published September 15, 1999 – Requirements for Notification, Evaluation and Reduction
of Lead-Based Paint Hazards in Federally Owned Residential Property and Housing Receiving Federal Assistance. The appendices are on
pages 50230-50231.
1
    LSHR Regulation Applicability Form (See Attachment to this memorandum)
2
    Appendix C—Sample Summary Presumption Notice Format
3
    Appendix A—Sample Summary Inspection Notice Format
4
    Appendix B—Sample Summary Risk Assessment Notice Format
5
    Appendix D—Sample Hazard Reduction Completion Notice Format




2006 DEED                                Owner-occupied Rehabilitation Guide: Step Three                                            Page 
                                                          Lead-based Paint
 Example                                                     Statement


                                                      Note:
                                              (On agency’s letterhead)


I hereby certify that I have received the publication entitled Protect Your Family from Lead in Your Home
(EPA 747-K-99-001) and that I have read and understood the information.




Signature of Owner/Renter: ___________________________________________               Date: ______________________


Witness: ___________________________________________________________                 Date: _______________________




Page                            Owner-occupied Rehabilitation Guide: Step Three                           2006 DEED
                                                             Fair Housing
 Example                                                     Certification


                                                      Note:
                                              (On agency’s letterhead)


I hereby certify that I have received information on the Fair Housing Act and that I have read and understood the
information.




Signature of Owner: _________________________________________________                Date: ______________________


Witness: ___________________________________________________________                 Date: _______________________




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Three                               Page 
                                                                                           Date       Eligibility/
                                                                                 Date      Pre-app    Ineligibility                     Date Full   Date      Date All
                                                  Applicants’ Names/Addresses/   Pre-app   and        Determination,                    App.        Verifi-   Verifi-    Date of     Date to   Approve or




Page 0
                                                  Initials of Staff Assigned     Package   Releases   Date of Letter Sources of Funds   Package     cations   cations    Intake      Loan      Disapprove File
                                                  Applicant                      Sent      Returned   or Call        to be Used         Sent        Sent      Received   Interview   Committee Letter Sent Forwarded
                                                                                                                                                                                                                                                   Example
                                                                                                                                                                                                                       Page _____ of _____




Owner-occupied Rehabilitation Guide: Step Three
                                                                                                                                                                                                                                                 Application Tracking System
                                                                                                                                                                                                                                             Owner-occupied Housing Rehabilitation




2006 DEED
                                           Checklist for Completeness
  Example                              Owner-occupied Housing Rehabilitation


Applicant Name:                                                 Total Project:
Project Number:                                                 SCDP Portion:
Street Address:                                                 Type of SCDP
                                                                Assistance:

City, State Zip:                                                Leveraging
                                                                Sources:
Home Phone:
Work Phone:                                                     Type of Leveraging
                                                                Assistance:

I. Application/Eligibility
                                                                                        Not
Does the file contain:                                              Yes          No   Applicable   Date
A. Completed, signed Pre-application form?                                             
B. Letter re. Ineligibility and reasons?                                               
C. Completed Full Application?                                                         
   is it signed and dated:  Yes  No
D. Data Privacy Notice and Release form?                                               
E. Signed Releases for Verifications?                                                  
F. Verifications?
         Ownership (Title Verification):                                               
         Taxes Paid:                                                                   
         Insurance:                                                                    
         Income Sources:                                                        
                                                                                
                                                                                
                                                                                
         Bank:                                                                         
                                                                                       
        Other Assets:                                                                  
G. Evidence that household is below Income Limits?                                     
        Family size:      _____________
        Annual income: _____________
        Section 8 limit: _____________
H. Initial Approval Letter?                                                            
I. Lead-Based Paint warning receipt?                                            
J. Priority Rating (if applicable):                                                    
K. Truth in Lending/Right of Rescission?                                        
L. Copy of Policies and Procedures to Owner?                                    
M. Photo Release (if applicable):                                                      
N. Historic Preservation Release from SHPO?                                            
O. Flood plain determination (if applicable):                                          
P. Approval/Authorization of Project?                                           
Q. Notification of approval/denial?                                             

2006 DEED                      Owner-occupied Rehabilitation Guide: Step Three                       Page 
                                                  Checklist for Completeness
 Example continued                            Owner-occupied Housing Rehabilitation

Applicant Name:

II. Inspections/Contracts
                                                                                           Not
Does the file contain:                                                 Yes          No   Applicable    Date
A. Lead Paint Risk Assessment:                                                            
B. Inspection report: Date of initial inspection:                                  
C. Work write-ups/cost estimates: Date to owner:                                   
D. Notice of Lead-based Paint Risk Assessment:                                     
E. Owner Review:                                                                   
F. Pictures of property:                                                           
G. SHPO release? Date received:                                                    
H. Funding sources identified:                                                     
I. Loan Committee action: Date of action:                                          
J. Applicant notified: Date of letter:                                             
K. Bid package given to owner: Date:                                               
L. Bid results form: (Include date(s) bids opened):                                
M. Scope of work determined:                                                       
N. Determine threshold for training and lead hazard reduction:                     
O. Contractor selection: Date:                                                     
P. Letters to contractors:                                                         
Q. Contractor/owner contract: Date:                                                
R. Loan closing: Date of repayment agreement:                                      
S. Pre-construction conference: Date:                                              
T. Relocation screening for occupant protection:                                   
U. Elderly waiver for relocation:                                                  
V. Contractor Notice to Proceed: Date:                                             
W. Change orders documented (if applicable):                                              
X. Lead paint clearance test:                                                      
X. Interim inspections: Dates:                                                     
Y. Final inspection: Date:                                                         
Z. Contractor payment record:                                                      
AA. Claim for temporary relocation:                                                

III. Completion/Close-out
                                                                                           Not
Does the file contain:                                                 Yes          No   Applicable    Date
A.   Signed completion certificate:                                                
B.   Lien waivers:                                                                 
C.   Sworn construction statement:                                                 
D.   Notice of Completion of Lead Hazard Reduction:                                
E.   Safe Work Practices Certification:                                            
F.   Copy of recorded repayment/mortgage:                                          
G.   Close-out package to owner:                                                          
H.   Statement that completed unit meets program rehab standards:                         


Page 2                           Owner-occupied Rehabilitation Guide: Step Three                     2006 DEED
                                                      Monthly Rehabilitation
 Example                                                Progress Report

Month:                                 Prepared by:


                                 Owner-occupied             Rental Properties          Commercial Properties
                                 This Month   Last Month    This Month    Last Month   This Month   Last Month
Application Goal:
Applications Received:
Applications Made Inactive:
Applications Remaining Active:
Committee Approval:
Under Construction:
Projects Completed:
SCDP Dollars Committed:
Leverage Committed
Total Committed
Total Disbursed


                                 Owner-occupied             Rental Properties          Commercial Properties
                                 SCDP Funds Other Funds     SCDP Funds Other Funds     SCDP Funds Other Funds
Budgeted:
Committed:
Uncommitted Balance:
Percent SCDP Committed:
Amount SCDP Expended:
Target SCDP Project Size:
Average SCDP Project Size:
Target Leverage Amount:
Average Leverage Amount:
Target/Current Leverage Ratio:




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Three                       Page 
                                                                                                                   Note:
                                                  Records should be kept of applicants (those who applied, not necessarily selected ) and beneficiaries (total number of people




Page 
                                                  who actually benefitted from the rehabilitation project.) For more information, review instructions for tracking on DEED Semiannual
                                                  Progress Report.                                                                                                                                                              Example
                                                  Check One:
                                                   Owner-occupied Housing Rehabilitation                 Commercial Property Rehabilitation    Rental Rehabilitation

                                                  Date of Report: ____________________              Prepared by: _______________________________________________
                                                                                                                    Number Number                                 Amount
                                                                                                      Number Number Elderly Handi-      Female                      of
                                                  Applicant           Approved       Annual Number in   of     of    Persons capped/ Head of     Race Hispanic SCDP                                              Status of
                                                  I.D. Number         Yes No         Income Household Males Females (over 62) Disabled Household Code* Ethinicity Funds                                            Case

                                                                          


                                                                          


                                                                          


                                                                          


                                                                          
                                                                                                                                                                                                                               Applicant and
                                                                                                                                                                                                                             Beneficiary Report




Owner-occupied Rehabilitation Guide: Step Three
                                                                          


                                                                          


                                                                          


                                                                          

                                                  *Race Code:  = White; 2 = Black or African American;  = Asian;  = American Indian/Alaskan Native;  = Native Hawaiian/Other Pacific Islander;
                                                   6 = American Indian/Alaskan Native & White;  = Asian & White;  = Black/African American & White;  = American Indian/Alaskan Native & Black/African American;




2006 DEED
                                                   0 = Other Multi-Racial
Step Four: Inspecting The Property
            Activity:                                         Documents Involved:
Task One    Review applicable property standards              See companion Inspection Guide for assistance,
                                                              (standards include HQS, MN Energy Standards,
                                                              Secretary of Interior for historic properties, and
                                                              others)
Task Two    Contact Owner for appointment                     Application file for phone numbers, persons to be
                                                              contacted for assistance, including anyone identified
                                                              as assisting applicant with process
            “Read the Client”                                 No written guidance, “people skills” and experience
                                                              are needed
Task Three Identify property deficiencies in walk through     Inspection Report form
           and discuss with applicant
           Order Lead Risk Assessment if appropriate          Lead Risk Assessment Report
           (pre-1978)
           Enter the date of initial inspection in tracking   Case Tracking System
           system
           Send Notice of Lead-based Paint Risk Assessment    Example Notices
           (or Presumption Notice)
Task Four   Prepare Work Write-Up/Spec (incorporating         Inspection report forms, Property Standards,
            findings from Lead Risk Assessment)               Rehabilitation Standards, Lead Risk Assessment
            Determine training and lead hazard reduction      Complete “Determining Thresholds for Training and
            work requirements                                 Lead Hazard Reduction Work Requirements” form
            Prepare cover sheet (called “Project Definition   Project Definition Form
            Form) for Work Write-Up
            Estimate cost to do items in Work Write-Up        Local data base of costs of materials and labor for
                                                              each item
Task Five   Review Work Write-Up and Cost Estimates           Inspection report, Work Write-Up, Cost Estimates
            with the owner
            Make changes as needed to Work Write-up/Spec      Revised Work Write-up, Cost Estimate
            Enter the date in Case Tracking system            Case Tracking system
Task Six    Have owner sign permission statement for          Owner permission form (or an application form)
            taking pictures of property (recommended)
            Take exterior and interior pictures of property   Working camera with instructions and adequate
            A. May be needed for SHPO review                  supply of unexposed film
            B. Useful for local loan committee
            C. Essential for recalling “before” and “after”
                 conditions
            Complete Historic Review                          SCDP Environmental Handbook
                                                              SHPO guidelines, releases
Task Seven Complete Floodplain Location Review                SCDP Environmental Handbook
           Create Map showing location of property            Property Location Map
Task Eight Send Notice of Lead-based Paint Risk               “Summary Notice of Lead-based Paint Risk
           Assessment results                                 Assessment”
           Calculate Rehab Assistance                         Determining Thresholds form



2006 DEED                        Owner-occupied Rehabilitation Guide: Step Four                              Page 
Construction Management General Terms

Commonly-used Names:                                   What They Mean:
Deficiency or Inspection report                        A list which identifies the deficiencies to be corrected in
                                                       order for a property to achieve the standards set by the
                                                       program.
Property Standard or Rehabilitation Standard           Local, State or Federal standards or codes, such as the
                                                       Section 8 HQS, or BOCA National Property Maintenance
                                                       Code. Used to assess the conditions of buildings and define
                                                       what is required.
Program Standard                                       Used to define what is eligible, and what is ineligible to be
                                                       corrected in a specific rehabilitation program.
Technical Specification (“Tech Spec”) or               A description of technical details concerning the quality,
Performance Standard or Performance Manual             workmanship, durability, capacity and other characteristics
                                                       of the rehabilitation work and materials. Often included by
                                                       reference into work write-ups and contracts.
Work Write-up, sometimes called the “Spec”             A specific description of what is to be done to the property
                                                       by the contractor with detailed specifications of materials,
                                                       quantities, and methods.
Cost Estimating System                                 A local data base that uses current information on the costs
                                                       of both labor and materials (including overhead and profit)
                                                       for work to be done, based upon local prices and customary
                                                       charges.
Risk Assessment Report                                 An anlysis of lead-based paint (LBP) hazards in the home,
                                                       including paint inspection byXRFor paint chips of surfaces.
XRF                                                    An X-ray fluorescence spectrum analyzer that reads lead
                                                       levels in paint coatings, while being non-destructive to the
                                                       paint.


Words to the Wise

Experienced rehab administrators have found the following practices to be valuable:

•     Written Rehabilitation Standards and Technical Specifications which define repair methods and
      materials to be used to meet the set standards.

•     Work Write-ups which are clearly written and precise to define exactly what work is required.

•     A Cost Estimate for the work which is a “professionally derived estimate of reasonable cost.”




Page 6                           Owner-occupied Rehabilitation Guide: Step Four                          2006 DEED
Task One:


Identify applicable property standards — These will include rehabilitation standards,
program standards, and technical specifications (sometimes called “performance
standards .”)

What is a Rehabilitation Standard?

A Rehabilitation Standard is a basic statement of what work must, can, and cannot be performed
with program funds. These Standards could reference a number of other documents such as the
Section 8 Housing Quality Standards, the Secretary of Interior’s Historic Property Standards,
Floodplain Requirements, etc. They usually include a clear, simple statement of what the program
will and will not allow. Your Policies and Procedures Guidelines (see “Getting Started: Step One”)
should include a description of your Rehabilitation Standards that will be used.

For example, a Standard might state that “only items required to meet Housing Quality
Standards” may be improved by the program and a list of things (such as central air conditioning,
landscaping, etc.) that may not be provided. Because these things can still be subject to debate and
interpretation, many rehab standards include explanations of what is meant. They may include
statements about when something may be replaced as opposed to repaired.

    Example of a Rehabilitation Standard
    Sidewalks and Driveways:
    Sidewalks, driveways and similar areas shall be maintained free from hazardous conditions. (BOCA Property
    Maintenance Standard, 1993; PM 303.3)


What is a Program Standard?

Program standards define what is eligible for treatment with funds from a certain program. For
example, MHFA’s rehabilitation program standards would allow their funds to be used to treat a
broader number of property deficiencies than DOE’s Weatherization program standards would allow.

    Example of a Program Standard
    Sidewalks and Driveways:
    Reconstruction of sidewalks and driveways is allowed only on private property and only if existing conditions are
    a clear and imminent safety hazard. (Taken from the MHFA Rehabilitation Loan Program Procedural Manual,
    Section 6.11)


Why are Rehabilitation Standards important?

•   Homeowners need to know what is and what is not allowed.

•   Contractors need broad definitions of what the limits are.

•   Program staff need to set funding limits that are realistic.


2006 DEED                         Owner-occupied Rehabilitation Guide: Step Four                               Page 
What are Technical Specifications? (a.k.a. “Performance Standards”)

Performance specifications describe the technical details concerning:

    Quantity - e.g., Replace Basement Stairs: Stairs shall be made with three (3) foot stringers,
    nominal 2” x 10” treads and open risers. Minimum width of treads shall be 2 feet. Stringers
    shall be securely fastened to open framing and rest on nominal 2” bottom bearing secured to
    basement floor. Rise shall not exceed 7 ½” and run shall not be less than 10” except as noted
    in UBC.

    Capacity - e.g., Install Gas Heating System: Furnish and install new properly sized natural
    gas/propane forced air heating system that is 81% AFUE (energy efficiency rating) minimum.
    Unit to be of proper size and output to meet heating code requirements. Install warm air
    runs to every room in living space with cold air returns of adequate size to meet heating code
    requirements. Install warm supply and return for basement. Install dampening grilles on
    all warm air outlets. Damper and balance heat runs. Include all necessary piping, controls,
    thermostats, wiring, connections and valves for a complete job to include removal of existing
    heating unit and abandoning excess gas piping. Specify size and brand name. Install per
    manufacturer’s recommendations. Instruct owner on operation and leave all warranty and
    operation manuals with same. Dispose of old unit off-site.

    Quality - e.g., Install Combination Windows: Provide and install solid core combination
    wood, vinyl covered or aluminum covered windows on existing openings. Units to be inside
    removable, two track and self-storing by Radford, Winterseal, Solar Seal or equal. Owner’s
    choice of style and color. Triple track for porch enclosure.

    Durability - e.g., Floors - Linoleum: Installation shall include 1/4” AC fir plywood
    underlayment stapled in place. Install new Armstrong Sundial no wax linoleum or equal as per
    manufacturer’s specifications. Material costs not to exceed $25.00 per yard. Style and color
    selection by owner. Installation shall include new vinyl or rubber base and all necessary metal
    accessories.

    Other characteristics of the rehabilitation work - e.g., Painting or Varnishing Interior Trim:
    Prime, paint or stain and varnish all new wood. New items shall have one coat primer or
    sealer and one coat enamel or one coat stain and one coat varnish. In door openings where
    only a new door and hardware are installed, contractor shall prime and enamel or stain and
    varnish door after fitting. Balance of the opening shall not be finished by the contractor unless
    specified in write-up. material to be completely free of all lead and/or lead compounds.




Page                       Owner-occupied Rehabilitation Guide: Step Four                2006 DEED
Task Two: Read The Client

What does it mean to “read the client”? It means to be attuned to the applicant’s behavior,
attitude, health, and experience in working with other public agencies.
    More Words To The Wise

    •   If the owner is inexperienced, it may be essential to enlist a trusted family member or
        friend to help the applicant deal with the rehab process.
    •   If you suspect medication or chemical dependency problems, you may also want to get
        another person involved who can help avoid conflict and delays.
    •   It is very desirable to strike a balance between over-involvement and under-involvement if
        relatives or friends assist the owner. If a third party in needed, involve that person in early
        meetings where the Work Write-Up is discussed — as well as expectations are spelled out.

How do experienced administrators deal with difficult customers?
•   Some contractors may have more skill and patience with certain clients. As you provide lists of
    available qualified contractors, take this into consideration.
•   Some property improvements interfere less with the livability of a home. Try to structure the
    Work Write-Up to minimize inconvenience. Counsel the owners: “It’s going to get worse
    before it gets better” so they are prepared. Review the “What To Expect and Not Expect...”
    flyer that you gave them earlier.
•   Bring in someone who the owner can relate to who has lived through the rehab process. If
    communication becomes extremely strained between the agency and the owner, bring in a local
    official to “run interference.”

Task Three:

Conduct On-Site Inspection
•   Use inspection report form appropriate to type of property and standards.
•   Make sure the form is signed, dated and has a cover sheet (“Project Definition Form”).

Order or conduct a Lead Risk Assessment
•   If the house was built before 1978, a Lead Risk Assessment with inspections must be
    conducted on the property.
•   The Notice of Lead Paint Risk Assessment Findings must be sent to the property owner.
•   The Lead Risk Assessment report should be included in the rehab file.
•   The results of the report, including recommendations for corrections, should be incorporated
    into the work write-up.

2006 DEED                    Owner-occupied Rehabilitation Guide: Step Four                     Page 
Task Four: Prepare Work Write-Up and Estimate Costs

Why are Cost Estimating Systems important?

•   Owners need to know how much the job will cost and make decisions about what they can
    afford.

•   Program administrators need to know if a project is feasible given available resources.

•   DEED and HUD monitors will look for documentation to assess “cost reasonableness” in your
    program.

What is needed for a good system?

•   Current information

•   A method for periodically updating the information

•   Accurate information about customary mark-ups and profit margins

•   An experienced staff person (or access to someone) who is familiar with local practices and
    prices

•   Line item estimates

•   Measurable quantities

•   Enough information so substitutes and change orders can be priced



Task Five: Review Work Write-Up and Cost Estimates with owner

•   Owners need to understand the relationship between deficiencies they have identified and
    deficiencies that the program can correct with SCDP funds.

          This is a critical spot in the rehab process because owners will balk if they perceive that
          they are not getting what they really wanted — and they are financially responsible for
          work that they are neutral about completing. If the project proceeds — and this is often
          the point where owners drop out — the project will be a difficult one.

•   If a risk assessment is required (on all homes built before 1978), the findings from the risk
    assessment must be incorporated in the work write-up.

•   Once the owner signs off on the Work Write-Up, the project can proceed.




Page 60                        Owner-occupied Rehabilitation Guide: Step Four               2006 DEED
                                                       Project Definition
  Example                                                    Form


                     Note: Name, Address and Telephone Number of Administering Agency

                                                                  Project I.D.
Applicant Name:                                                   Number:
Best Time To Call:                                                Office Phone:
                                                                  Home Phone:
If needed, another                                                Contact’s
Contact Name:                                                     Phone:

Address of                                                 Directions
Property                                                   to
to Be                                                      Property:
Inspected:

                                                                Inspector
Name and                                                        Assigned:
Address of
Property                                                        Date:
Owner                                                           Phone:
(If different
from above):


Property is Located in Target Area?                       Yes  No  Not Applicable
Property is Located in Designated Slum/Blight Area?       Yes  No  Not Applicable
Project Triggers Davis-Bacon Prevailing Rates?            Yes  No  Not Applicable

Type of Property:                          Building Hieght:                      Year Built:
   Single Family Detached                    1-Story                           ____________
   Duplex                                    1½-Story
   Multi-Family (# of Units ______)          2-Story
   Commercial                                3-Story
   Mixed Use                                 4-Story
   Mobile Home                               More Than 4 Stories

Type of SCDP Project:
 Owner-Occupied                        Renter-Occupied                          Commercial Property
Number of Bedrooms:                    Number of Units:                          Use Group:
Number of Baths:                       Number of Bedrooms/Unit:                  Construction Type:
Total Number of Rooms:                 Construction Type:
Construction Type:                                                               Number of Occupants:
                                                                                 Type of Business:
Basement:                Yes  No
Number of Persons:                                                               Number of Employees:




2006 DEED                        Owner-occupied Rehabilitation Guide: Step Four                          Page 6
                                                            Project Definition
 Example continued                                                Form
Applicable Standards:
   Adopted Community Rehabilitation Standards
   HQS
   MHFA
   Property Maintenance Code
   Energy Efficiency Standards

  Floodplain Construction Standards:
   Describe: ____________________________________________________________________________________
   Contact Person: ___________________________________________    Phone: (_____) __________________

  Secretary of Interior Standards for Historic Preservation:
   Describe Briefly: ______________________________________________________________________________
   Contact Person: ___________________________________________      Phone: (_____) __________________

  Accessibility Requirements:   504     ADA  Resident Needs
   Describe: ____________________________________________________________________________________
   Contact Person: ___________________________________________    Phone: (_____) __________________

  Asbestos Requirements:     Yes  No  Not Applicable
   Describe: ____________________________________________________________________________________
   Contact Person: ___________________________________________    Phone: (_____) __________________
Lead Based Paint Considerations:
  Age of Building:      Built Pre-1978?  Yes  No
  Children six years and under, Pregnant Woman In Home:  Yes  No
  Risk Assessment with Inspection Conducted:  Yes  No
   By: Name: ______________________________________________
         Date:__________________________

Photograph Attached:  Yes  No
    By: Name ________________________________________________

Other Pertinent Information:
          ________________________________________________________________________________________
          ________________________________________________________________________________________
          ________________________________________________________________________________________


Completed By: _______________________________________________                Date: __________________________
Phone: (_____) _________________




Page 62                            Owner-occupied Rehabilitation Guide: Step Four                 2006 DEED
                                                   Inspection Report
 Example                                              Cover Page


                                                Note:
                       (To be completed by inspector before/at On-Site Inspection)


                           Name, Address, Telephone Number of Administering Agent



Project Number: ______________________________________________
Applicant Name: _____________________________________________
Strret Address:________________________________________________
           ____________________________________________________
City, State, Zip: _______________________________________________


Township: ___________________________________________________            County: ________________________


Directions to Property:
          ________________________________________________________________________________________
          ________________________________________________________________________________________


Date of Inspection:_____________________________  Time of Inspection:________________________________
Accompanied By or Also Present During Inspection:
          ________________________________________________________________________________________


Signature of Inspector: _________________________________________        Date: __________________________




                                                    Note:
Inspection reports will not be accepted without the signature of the inspector. Complete the inspection
report thoroughly. Do not leave any item uninspected. Provide detailed notes where appropriate.




2006 DEED                      Owner-occupied Rehabilitation Guide: Step Four                       Page 6
Task Six: Have the owner sign a permission statement for photographs of the property

•   The program will need pictures of the exterior and interior of the property for three very
    important reasons:
    1.    If the property has historic significance, the Environmental Review Record must document
          it for the SHPO review.
    2.    Pictures of the property are very useful when the package is being reviewed for approval or
          disapproval.
    3.    If a dispute between the owner, the contractor, or another interested party arises after
          rehabilitation has started, pictures can provide documentation to support actions. Once
          rehabilitation is complete, pictures can be invaluable in resolving disputes.

Task Seven: Perform Review for Historic Properties

The historic review requirements are outlined in the Minnesota Small Cities Development Program
Environmental Handbook and the Minnesota Small Cities Implementation Manual. These manuals
will assist you in obtaining environmental clearance from DEED. You can also call the Review and
Compliance Section at the SHPO (612-296-5462) with questions.

There are two stages to the historic review:
    Prior to applications — See Step One: Getting Started for additional guidance during the
    Environmental Review.
    After properties are selected — After a property has been identified and a work write-up
    has been prepared, you must send the SHPO a photograph of the property, some information
    about when it was built and any known background of its history — or any other information
    pertinent to your area that the SHPO requests — (e.g. did a famous battle on its front yard
    contribute to its dilapidated condition? ) The SHPO will perform an evaluation of the location
    of properties in the service area. The evaluation is to assess if selected houses are close to —
    or part of — a historic district that is — or could be — on the National Register of Historic Places.
    If the properties you will be rehabilitating are in a historic district, each property will need
    further review after the Work Write-Up is determined. The SHPO will first review the package
    that defines the Work Write-Up, will make a finding — hopefully — that the proposed work is
    consistent with the Secretary of Interior’s Standards for Rehabilitation and will have no adverse
    effect on properties eligible for listing on the Register of Historic Places. If there will be adverse
    effects, the Advisory Council on Historic Preservation must be invited to join the consultation to
    help the parties reach resolution. The Advisory Council on Historic Preservation in Washington
    must then be notified once you have the SHPO “go-ahead” letter. Their telephone number is
    202-606-8503 and their Internet address is www.achp.gov. They are located at:
          Advisory Council on Historic Preservation
          The Old Post Office Building
          1100 Pennsylvania Avenue NW, #809
          Washington, DC 20004


Page 6                       Owner-occupied Rehabilitation Guide: Step Four                   2006 DEED
Experienced rehab administrators who operate in historic districts have developed a non-varying
routine in meeting these requirements. The following example of a submission to the SHPO and
the Advisory Council has proven successful.


                                                     Caution
You cannot begin work on properties until you have received the clearance from the historic preservation
offices. If your service area is not in a historic district and properties are not historically significant, the
SHPO has a turn-around time of about 30 days after you send in property photographs and relevant
information.

If your service area is in a historic district or if a property has historic significance, the SHPO review may
take longer. If it is determined that the work to be done will have an adverse effect, the negotiation process
with SHPO and the Advisory Council will probably take longer as well.




2006 DEED                        Owner-occupied Rehabilitation Guide: Step Four                            Page 6
                                                             SHPO
  Example                                             Review and Comment



To: Dennis A. Gimmestad, SHPO                                  Date of Request: ______________________________
    First National Bank Building, Suite E200
    332 Minnesota Street                                       Re: MHS Referral File No. ______________________
    Saint Paul, MN 55101-1338

Small Cities Development Grant
Grantee: __________________________________________________________________________

Grant Number: ___________________________

Dear Mr. Gimmestad:


The attached information is provided
pursuant to MHS’s review of properties,
as required by the Historic Preservation
Act of 1966, 36 CFR Part 800, etc..                              PLACE PHOTO OF
We hereby request clearance of the
                                                                 PROPERTY HERE
proposed work according to this
summary.

Sincerely,




Location: (If in a municipality) Street Address:_____________________________ City: ______________________
(If in a township) Township:____________________________________ Quarter-Quarter Section: _______________


Estimated date of construction of building: __________________________


The following is the known background of the history of the building:




Brief description of the proposed work:




Page 66                            Owner-occupied Rehabilitation Guide: Step Four                   2006 DEED
                                                        Historic Determination
     Example                                           National Advisory Council


                               Note: To be used if SHPO directs this level of review
                                             (0n Agency Letterhead)


Date:


Advisory Council on Historic Preservation
Old Post Office Building
1100 Pennsylvania Avenue, NW Suite 809
Washington, DC 20004

RE: (property address and name of building)


This letter is meant to inform the Advisory Council that the Minnesota State Historic Preservation Office, pursuant to
36 CFR 800.9 (c)2, has determined this project will have no adverse effect on properties eligible for or listed on the
National Register of Historic Places.


As required by 36 CFR 800.5 (d) and outlined in 36 CFR 800.8 (a), the following documentation is provided:
1.    A Description of the Undertaking. A Work Write-Up, photographs, and maps of the project are enclosed.
2.    A Description of Historic Properties that may be affected. This building, located at ________________ is part
      of the ______________ Historic District. This District is eligible for listing on the National Register of Historic
      Places as a Historic District.
3.    A Description of efforts used to identify historic properties. Consultation with the Minnesota State Historic
      Preservation Office has determined that the site is located within the _____________ Historic District and is
      eligible for National Register designation (see enclosed map).
4.    A Statement of how and why the criteria of adverse effect were found inapplicable. Adverse effect will be
      avoided because the project meets the Secretary of Interior’s “Standards for Rehabilitation and Guidelines for
      Rehabilitating Historic Buildings.”
5.    The views of the State Historic Preservation Officer. A letter from the Minnesota State Historic Preservation
      Office is enclosed.


Sincerely,


Enclosures: picture of building, Work Write-Up, map, and SHPO letter




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Four                                 Page 6
Task Eight: Perform Review for Floodplain Location

Before any rehabilitation begins, the location of the property to be rehabilitated should be reviewed
in relationship to existing floodplains. A map of the area with the location of the property clearly
marked is good documentation of review. If the community has decided to rehabilitate a home in
a floodplain, rehabilitation work must be in compliance with floodplain construction requirements
and the local floodplain ordinance. Communities should contact the Department of Natural
Resources (DNR) for more information about construction in a floodplain.


Task Nine: Consider Lead-based Paint Requirements

For homes built before 1978, the owners should be sent the Summary Notice of Lead-based
Paint Risk Assessment. Although paint can be presumed to contain lead, it is not recommended.
Assuming lead-based paint could result in unnecessary work and does not provide the owners with
specific information about where lead-based paint is located in the home. For projects that exceed
$25,000 in federal financial assistance, it may be possible to remove the lead hazard reduction costs
according to the formula on the “Determining Thresholds for Training and
Lead Hazard Reduction Work Requirements” formula, and use interim controls instead of
permanent abatement methods and contractors.




Page 6                      Owner-occupied Rehabilitation Guide: Step Four                2006 DEED
                                                     Summary Notice of
 Example                                      Lead-based Paint Risk Assessment


           From Federal Register Vol. 6, No.  / Wednesday, September ,  / Rules and Regulations

Address/location of property or structure(s) this Summary notice applies to:
         ____________________________________________________
         ____________________________________________________
         ____________________________________________________


Lead-based Paint risk assessment description:
    Date(s) of risk assessment: __________________________________
    Summary of risk assessment results (check all that apply):
      (a) No lead-based paint hazards were found.
      (b) Lead-based paint hazards were found.
      (c) A brief summary of the findings of the risk assessment is provided below
           (required if any lead-based paint hazards were found).
         Summary of types and locations of Lead-based paint hazards. 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 types of lead-based paint hazards found:
          ________________________________________________________________________________________
          ________________________________________________________________________________________
          ________________________________________________________________________________________
          ________________________________________________________________________________________
          ________________________________________________________________________________________


Contact person for more information about the risk assessment:
   Printed name: ____________________________________________
   Organization: ____________________________________________
   Street: __________________________________________________
   City/State/Zip: ____________________________________________
   Phone number: (_____) _________________


Person who prepared this summary notice:
    Printed name: ____________________________________________
    Signature: _______________________________________________
    Date: ___________________________________________________
    Organization: ____________________________________________
    Street: __________________________________________________
    City/State/Zip: ____________________________________________
    Phone number: (_____) _________________



2006 DEED                          Owner-occupied Rehabilitation Guide: Step Four                               Page 6
                              Notice that Lead-based Paint or Lead-based Paint Hazards
  Example                                    are Presumed to be Present


            From Federal Register Vol. 6, No.  / Wednesday, September ,  / Rules and Regulations

Address/location of property or structure(s) this notice of presumption applies to:
         ____________________________________________________
         ____________________________________________________
         ____________________________________________________


Type of presumption (check all that apply):
      (a) Lead-based paint is presumed to be present.
      (b) Lead-based paint hazard(s) is(are) presumed to be present.
          Summary of presumption. 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 types of lead-based paint hazards presumed to be present:
           ________________________________________________________________________________________
           ________________________________________________________________________________________
           ________________________________________________________________________________________
           ________________________________________________________________________________________
           ________________________________________________________________________________________


Contact person for more information about the risk assessment:
   Printed name: ____________________________________________
   Organization: ____________________________________________
   Street: __________________________________________________
   City/State/Zip: ____________________________________________
   Phone number: (_____) _________________


Person who prepared this summary notice:
    Printed name: ____________________________________________
    Signature: _______________________________________________
    Date: ___________________________________________________
    Organization: ____________________________________________
    Street: __________________________________________________
    City/State/Zip: ____________________________________________
    Phone number: (_____) _________________




Page 0                             Owner-occupied Rehabilitation Guide: Step Four                         2006 DEED
                                           Determining Thresholds for Training and
     Example                              Lead Hazard Reduction Work Requirements



1.    Estimated Hard Costs of Rehabilitation                                               Total: $
      Hard Costs are defined as the physical development costs for Housing from all
      Federal dollars only, except Weatherization is not considered “housing assistance”
      for this purpose
      Out of the Estimated Hard Costs, You can Subtract
      a) Hazard Evaluation                                           $
          (Costs such as risk assessment if not charged as
          project admin)
      b) Hazard Reduction Activities                                 $
          (Costs of lead hazard reduction work can be subtracted
          from the total cost of a project UNLESS the rehab work
          was included in the work write up and would have been
          done anyway, e.g., replacing deteriorated windows, etc.)

2) Net Subject to 24 CFR, Part 35.930: *See Categories Below                               Total: $
      If this amount is $5,000 or less per housing unit, then:
      • Provide Pamphlet
      • Conduct Paint Testing
      • Implement Safe Work Practices
      • Perform Clearance
      • Notice to Occupants
      If this amount is between $5,000 and $25,000 per housing unit, then:
      • Provide Pamphlet
      • Perform Risk Assessment
      • Perform Interim Controls, Lead Safe Work Practices (with trained workers)
      • Perform Clearance
      • Notice to Occupants
      If this amount is greater than $25,000 per housing unit, then:
      • Provide Pamphlet
      • Perform Risk Assessment Abate hazards, except interim controls are acceptable on exterior surfaces not
           disturbed by rehab, Lead Safe Work Practices (Must have licensed supervisors and workers)
      • Perform Clearance
      • Notice to Occupants


                                               REMEMBER
$5,000-$25,000 per housing unit: Use lead-safe work practices for Lead-Based Paint (LBP) hazard
reduction designated as Interim Controls; Licensed Supervisors and Workers who work for licensed
contractor for LBP hazard reduction designated as Abatement. Grantees make these designations based
on Risk Assessments. Also remember that work proposed and specified in the work write up is not eligible
for exclusion from hard costs.




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Four                          Page 
Page 2   Owner-occupied Rehabilitation Guide: Step Four   2006 DEED
  Step Five: Approving The Loan
              Activity:                                        Documents Involved:
  Task One    Identify sources of funds and assign             Work Write-Up with cost estimates
              improvements to each source                      Approved applications from other public sources or
                                                               lending institution
                                                               Evidence of owner’s own funds if savings is
                                                               contributed as match
  Task Two    Check file for completeness, consistency         Owner-occupied Housing Rehabilitation Checklist
              with application                                 for Completeness (see example in Step Three
                                                               documents)
                                                               Third-party verifications against application, owner’s
                                                               statements
  Task Three Schedule meeting with local                       File with documentation of eligibility of applicant
             Loan Approval Committee                           and property
             (if one exists) for review                        Documentation of date of loan approval
             and action
                                                               Work Write-Up with cost estimates and sources of
                                                               funds identified
  Task Four   Notify applicant of outcome                      Meeting minutes documenting action taken
                                                               Approval letter, followed by contact to set up
                                                               meeting re. bidding the package, or
                                                               Denial letter with appeal procedures included or
                                                               attached
              Enter date of Board/Committee                    Application and Case Tracking systems
              action in tracking systems




2006 DEED                       Owner-occupied Rehabilitation Guide: Step Five                            Page 
                                       Owner-occupied Housing Rehabilitation Program
     Example                                    Project Presentation Form


Application Number:___________________________                 Date/time Received: __________________


The Owner-occupant Household is Income Eligible:
1.    Applicable income limit for household size:      $
2.    The owner-occupant household size is:
3.    Verified household income is:                    $


The Property Meets The Following Criteria:
1.    The property is located within the approved project boundaries in accordance with attached map.
2.    The property is an owner-occupied residential structure.
3.    The property to be improved is a permanent structure, or the property is a mobile home
      which is permanently affixed to real property by means of a foundation of pier footings,
      and the real property meets the ownership requirements as listed in the Procedural Guide.
4.    Total improvements to bring the structure up to a “STANDARD” condition are placed at:           $
      The estimated fair market value of the structure, as determined by the County Assessor is:      $
5.    Pursuant to the inspection conducted on _____________________, the property has been
      determined suitable for rehabilitation under the local definition. The following is a list of
      anticipated improvements:




6.    The property will meet the program’s housing quality standards inclusive of the Minnesota
      Energy Efficiency Standards upon completion of anticipated improvements.
7.    The property is not located within a flood plain area.
8.    The real estate taxes on the subject property are current.
9.    The subject property is currently insured.


Comments:




     Page                              Owner-occupied Rehabilitation Guide: Step Five                   2006 DEED
                                          Owner Occupied Housing Rehabilitation Program
      Example continued                               Project Presentation Form



  10. The property owner has been determined eligible for the following SCDP rehabilitation financial assistance:
        Type of Loan: __________________________________________ Estimated Project Cost: $

  11. The property owner has been determined eligible for the following other non-SCDP finance assistance:
                                                                         Estimated Amount
     MHFA Rehabilitation/Home Improvement/Energy Programs:              $
         CAA’s Weatherization Program:                                   $
         Local Lending Institution:_____________________________ $
         Other:_____________________________________________ $

  12. SIGNATURE BLOCK: This application is approved for further processing pursuant to the city of _____________,
      Small Cities Development Program Procedural Guide.
        Agency Representative:                                            Date:
        Agency Representative:                                            Date:
        Agency Representative:                                            Date:


  Approved By (Board) on:




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Five                             Page 
                                                        Notice of
  Example                                     Home Improvement Loan Funding


                                                     Note:
                                             (On Agency Letterhead)


Date:


Applicant name and address:


Project number:



Dear :


I am pleased to notify you that your application for a Home Improvement Loan funded with $____________ in
Small Cities Development Program was approved by the local loan committee on ____________________. I will be
contacting you within the next ________ days to set up a meeting to go over the bidding procedure. In the meantime, if
you have any questions, please call me at _____________________.


Sincerely,




   Page 6                           Owner-occupied Rehabilitation Guide: Step Five                         2006 DEED
                                                           Notice of
      Example                                    Home Improvement Loan Denied


                                                        Note:
                                                (On Agency Letterhead)


  Date:


  Name and Address of Applicant:


  Project Number:



  Dear :


  Your recent application for housing rehabilitation funding under the Small Cities Development Program has been
  denied by our local Loan Committee for the following reason(s):


        You did not meet the income eligibility requirements.


        You do not own the dwelling.


        Other (specify): ____________________________________________________________________________
          ________________________________________________________________________________________


  If you do not agree with the reasons for denial listed above, you may submit additional information within the next
  fourteen days which you believe will warrant a favorable determination.


  With or without additional information, you shall have the opportunity to appeal the denial of assistance. After review
  of the denial of assistance, you will receive a notice in writing of the final decision.


  Denial determined and notification sent by:        (name of person and title)


  Sincerely,



  (Attach appeal procedure. See Step Three for example letter that includes an appeal procedure.)




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Five                               Page 
Page    Owner-occupied Rehabilitation Guide: Step Five   2006 DEED
Step Six: Preparing The Bid Package


            Activity:                                         Documents Involved:
Task One    Write detailed Work Write-up, and                 Inspection Report, Work Write Up
            Risk Assessment (if building is pre-1978)         Risk Assessment Report
                                                              Cost estimates
                                                              “Tech Spec” (if separate from Work Write-up)
                                                              Documentation of approval of Loan
Task Two    Meet with Owner to review Work Write-up           Detailed Work Write-up incorporateing findings from
            and get approval                                  Risk Assessment
            Define items that Owner will do under             Information for Self-Help Loan Agreement
            Self-Help if program allows
            Complete form for file re. Rehabilitation         Rehabilitation Standards Compliance
            Standards Compliance Certification                Certification form
Task Three Prepare bid package                                Contractor bid package
                                                              A. Work Write-up Cover Sheet
                                                              B. Instructions to bidders
                                                              C. Work Write-up
                                                              D. Contractor/Owner Contract
Task Four   Meet with Owner:                                  Sign-off sheet with contractor bid package
            A. Review bid package                             (see example)
            B. Review contracting procedures                  Policies and Procedures Guide
            C. Discuss bid package and set deadline
                for bid opening                               List of available contractors
            Enter date owner approved Work Write-up           “Things to Think About Before Selecting a
            and date bids are due                             Contractor” information sheet
                                                              Application/case tracking system




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Six                            Page 
What should a Work Write-up include?

The Work Write-up should include a detailed description of the installation and workmanship
standards and forms the basis for contractors’ bids. In other words, it tells the owner and contractors
who are bidding the job exactly what will be fixed or replaced, how it will be done, and what
materials will be used. If a risk assessment was required (as it is on all houses built before 1978),
the findings/recommendations from that assessment must be incorporated into the risk assessment.


It should answer the following questions:

1.   What work will be done?

2.   How will it be done?

3.   Where will it be installed?

4.   What material will be used?

5.   How much material will be installed?

6.   What standards of workmanship will be used?


Characteristics of an effective Work Write-up/Specification


Quantity

It always includes quantities (square feet, numbers, etc.) as opposed to phrases such as “as needed.”

     Good: Install 25 ft. of 2” x 2” new bath tiles
     Bad: Install new bath tiles as needed

Dimensions

Specifications of size are essential; if the doors are to be 7’6” x 3’6,” say so.

     Good: Replaster 3’ x 5’ section in center of north wall of living room as indicated on sketch
     Bad: Replaster living room walls as needed


Location

Be specific.

     Good: Scrape and repaint floor and columns of front porch
     Bad: Scrape and repaint porch as needed


Page 0                         Owner-occupied Rehabilitation Guide: Step Six               2006 DEED
Quality

If the new wall to wall carpet is supposed to be first-quality acrylic pile of 15 denier or coarser, and
not wool or of a lesser density, say so.

Method

There are usually many ways to fix something and how it is done makes a difference — in cost,
time and aesthetics.

    Good: Replaster 1’ x 1’ damaged plaster on northeast corner of rear bedroom
    Bad: Repair damaged plaster in rear bedroom

Use “repair” or “replace,” but not together .

There are major differences in cost, quality and expectations. When using “repair,” also specify the
construction method.

    Good: Repair tub in front bath by ... (method)
    Good: Replace tub in front bath with ... (tech spec)
    Bad: Repair or replace tub in front bath

Use “and” or “or” but never together .

    Good: Repair sashes on two north windows of front bedroom and replace two east windows with...
    Bad: Repair and/or replace defective windows

Find the active, imperative voice .

The active, imperative voice (command) is clearest, strongest and requires the least amount of words.

    Good: Install ceiling light fixture. Owner shall furnish fixture.
    Bad: The contractor will install the ceiling fixture which will be provided by the owner.

Avoid using:

“etc.,” “standard size,” “approximately,” “as needed,” “all missing or damaged,” “any.”

Use formats appropriate to the trade .
Trade by trade is most helpful to general contractors and their sub-contractors who need to have a
sense of the total job they are bidding. Code inspectors prefer this also.
Room by room is easiest to prepare and easiest for the owner to understand. It also is easiest for
HQS and rehab inspectors to use when inspecting for payments.


2006 DEED                      Owner-occupied Rehabilitation Guide: Step Six                     Page 
Putting It Together: Example – Door Replacement


Property Standard:

103.11 Exterior Doors

103.11.1. Every exterior door, basement or cellar door or hatchway shall be substantially weather
tight, watertight, and rodent-proof, and shall operate satisfactorily, including their hardware and
give evidence of continuing acceptable service. Defective glass shall be replaced; in addition, all
replaced exterior doors shall be solid-core.

103.11.2. All exterior doors shall have locks that are in good repair and capable of tightly securing
the door. However, all locks in the required means of egress shall be able to be opened from the
inside without using a key.

103.12 Exterior Door Frames

103.12.1 All exterior doors shall be weatherstripped so there is no significant entry of air or water
into the structure when the door is closed.

103.12.2 Exterior door jambs, stops, headers and moldings shall be securely attached to the
structure, maintained in good condition without splitting or deterioration that would minimize the
strength and security of the door in a closed position.


Inspection Report:

Item:   Front Door                        Location:   Front of Property
Refer to Property Standard:     Install   Repair      Replace Quantity Comments
#103 - exterior doors                                 X       1           Panels missing; frame is okay;
                                                                          peeling paint




Page 2                        Owner-occupied Rehabilitation Guide: Step Six                      2006 DEED
Work Write-up #1: Developed from initial HQS (local standards) inspection

Item:                                          Quantity:   Unit Price:       Total Price:      Bid:
Replace exterior front door                    1          $                 $                $
Install 6-panel wood door with mail slot, peep hole, sweep, weatherstripping. Owner will supply entry lock.
Reuse existing dead bolt.
Technical Specification:
Doors - 15.02 Exterior doors shall be 1 3/4” thick, solid core, constructed of Ponderosa Pine, Douglas Fir
or insulated steel. All exterior doors shall be hung on three 4” by 4” butt hinges and shall be provided with a
“key in knob” lock set. All new locks shall be keyed alike. Doors shall be prime painted immediately following
installation, then painted two coats as per Painting Specifications.


                                                  Note:
Work Write-ups prepared by staff should include cost estimate for specific work items. The copy given to
contractors should not include the program’s estimated cost.




                                        A Pointer from the Veterans:

There are two methods for using Technical Specifications in Work Write-ups.
Method #1: Incorporate them directly into the Work Write-up. The preceding “Putting It Together” uses this
method.
Method #2: Many well-operated agencies prepare their own “Contractor Handbooks” that is given
to all contractors who are interested in participating in the program. The Handbooks contain the
program requirements relating to insurance, licensing, bidding, payment procedures, and the Technical
Specifications for work adopted by the agency. The Tech Spec has all items identified by number so the
Work Write-up included in the Bid Package references the Spec number and can therefore be less lengthy
than otherwise.




2006 DEED                        Owner-occupied Rehabilitation Guide: Step Six                          Page 
Work Write-up #2: Developed after Risk Assessment conducted


General Condition: All shaded areas are surfaces that were identified as containing lead. Method of site
preparation work practices and site cleaning must be attached to bid when submitted. All methods must
comply with MN Rules 4761.1170-1190.

Item:                                          Quantity:   Unit Price:       Total Price:      Bid:
Replace exterior front door:                   1          $                 $                $
Install 6-panel wood door with mail slot, peep hole, sweep, weatherstripping. Owner will supply entry lock.
Reuse existing dead bolt.
Technical Specification:
Doors - 15.02 Exterior doors shall be 1 3/4” thick, solid core, constructed of Ponderosa Pine, Douglas Fir
or insulated steel. All exterior doors shall be hung on three 4” by 4” butt hinges and shall be provided with a
“key in knob” lock set. All new locks shall be keyed alike. Doors shall be prime painted immediately following
installation, then painted two coats as per Painting Specifications.



                                                 Note:
Work Write-ups prepared for bidding should incorporate findings from Risk Assessments (required for all
residential properties built prior to 1978).




Page                           Owner-occupied Rehabilitation Guide: Step Six                        2006 DEED
                                                        Home Improvements
  Example                                               Determination Letter


                                                       Note:
                                               (On Agency Letterhead)


Date


Dear

Enclosed please find your copy of a list of improvements (in the form of a Work Write-up) determined necessary from
the inspection on your home. Funding is dependent upon your acceptance of the improvements. Review the list of
improvements thoroughly, and if you agree with them, please sign the enclosed Acceptance Notice.

At least two competitive bids are required. We strongly suggest you select at least five contractors to bid so that your
project will not be slowed down for lack of bids. It’s your responsibility to choose who will bid on your project, and to
assist you with that, we have enclosed a list of contractors who may be willing to provide you a bid. You may know of
other contractors you would like to contact so they can also bid on your rehabilitation work. Please let us know who on
this list you want to bid. If you have a contractor in mind who is not on this list, include the name(s) and addresses on
the space provided on the form.

It is your responsibility to arrange for contractors to come to your home to they can prepare a bid. Interested bidders
should contact our office and we will provide copies of the bid package.

The bids will be returned to the Rehabilitation office. You will be asked to open them with our Rehabilitation staff.
We will discuss the bidding outcome and you will be asked to select a contractor. If a loan is required to complete the
project, (for projects less than 100% covered by our funds) you will be required to secure those funds prior to start of
work on the project.

Upon return of the Acceptance of Work Notice and the Contractors’ List, your project will be ready to put out to bid. If
you have any questions, please feel free to contact our office.


Sincerely,



(Rehabilitation Staff)


Enclosures: Acceptance of Work Notice
            Lead Paint Notification
            Lead Paint pamphlet
            Work Write-up
            Contractors’ List




2006 DEED                           Owner-occupied Rehabilitation Guide: Step Six                                Page 
                                                    Rehabilitation Standards
 Example                                            Compliance Certification


                                                      Note:
                                             (On Agency Letterhead)
                             This form links the Work Write-up with the SCDP goals.




Owner Name: ________________________________________________                 Project Number: ____________________
Address: ____________________________________________________
         ____________________________________________________



The property listed above does not currently meet the SCDP minimum property standards. The signature of the
Rehabilitation staff is a certification that the repairs enumerated within this Work Write-up will be sufficient upon
completion to bring this building up to the program’s standards. The signature of the owner(s) on this form is witness
and agreement to this certification.



Housing Rehabilitation Advisor:__________________________________            Date: _____________________________


Owner:    ____________________________________________________               Date: _____________________________


Owner:    ____________________________________________________               Date: _____________________________




Page 6                             Owner-occupied Rehabilitation Guide: Step Six                           2006 DEED
                                                                 Owner
  Example                                                     Sign-off Sheet


                                                        Note:
                                                (On Agency Letterhead)




Owner Name: ________________________________________________                    Project Number: ____________________
Address: ____________________________________________________
         ____________________________________________________



The undersigned property owner(s) has reviewed and accepted the Work Write-up as prepared by the Rehabilitation
staff for the property identified above.


The owner(s) understand that the work contemplated is only that as outlined in the Work Write-up and that any changes
in the scope of work must be approved by the issuance of a Change Order executed by the Rehabilitation office, the
Contractor, and agreed to by the owners.


I/we certify that, should a contract be signed for this project, no verbal or written changes in the work or negotiations
regarding the work shall be carried out without the written approval of the Housing Rehabilitation office.



Owner:    ____________________________________________________                  Date: _____________________________


Owner:    ____________________________________________________                  Date: _____________________________


Signature witness:


Housing Rehabilitation Advisor:__________________________________               Date: _____________________________




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Six                                 Page 
The following example of a Work Write-up format has a number of good features to note:

•   It identifies each page number clearly (e.g., “3 of 4 pages”).

•   It separates the costs of labor and materials.

•   Each page has a place for the owner and contractor to sign.

•   The agency has put its standard work items on a word processor and keeps an index of the
    items. The Rehab staff person writing the Work Write-up can look up each reference in the
    automated system and incorporate the specificationin the Work Write-up.

•   It identifies work items by the Code number.

As the owner has choices to make in selecting colors and finishes, many agencies have owners
initial the paint chip sample and note the room for which it has been selected and staple it to a paper
in the file. If you are more comfortable with a more formal tracking method, a example form that
identifies all colors of paint and materials is included for your consideration.




Page                         Owner-occupied Rehabilitation Guide: Step Six                2006 DEED
                                                            Work Write-up
  Example                                              For Bidding Contractors
                                                                                                               Page 1 of 2



For improvements on property owned by ___________________________________________ located
at _______________________________ in the city/county of__________________________________.


I approve of the improvements to my property as listed in the following pages in a Work Write-up.

Property Owner’s Signature: _____________________________________                 Date: _____________________________


                               Instructions: Contractor signs below when submitting bid.

Grand Total of Bid: $ ________________ (to be entered by Contractor)

I (Contractor) will furnish all materials, labor, equipment, and other items of expense (including clean up and removal
of all refuse) necessary to complete all Specifications itemized in the following pages for the individual and total costs
shown. I agree that, with respect to said Improvements/Specifications, there shall be no deviations or alternations for
which I may expect compensation beyond costs stated above, except where such changes in Proposal are authorized in
writing by both the Property Owner and the Housing Rehabilitation Program.

Contractor: __________________________________________________                    Phone: (_____) _____________________

Authorized Signature: __________________________________________                  Date: _____________________________

(NOTE: This bid may be withdrawn by Contractor if not accepted within _____ days.)


                         Instructions: Owner signs below to indicate selection of successful bid.

I (Owner) ACCEPT the above Contractor’s proposal price pertaining to improvements to my property, and give
my consent (subject to approval by the Housing Rehabilitation Program) to the Contractor to enter my property for
purposes of completing those improvements. It is my understanding that the above improvements must be financed as
follows:

$________________ (leveraged funds from MHFA etc.)

$________________ SCDP Loan

$________________ Private Rehabilitation Loan via ____________________________________________________
                                                                        (Lending Institution)

I further understand that all deviations or alterations to the following Work Write-up must be authorized in writing by
me and the Housing Rehabilitation office, and that I have the authority to stop work at any time I am not satisfied with
the quality or workmanship or materials.

Property Owner’s Signature: ____________________________________Phone: (_____) _______________________
Date: ____________________________




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Six                                 Page 
                                                                   Work Write-up
 Example continued                                            For Bidding Contractors
                                                                                                                   Page 2 of 2



For improvements on property owned by ___________________________________________ located
at _______________________________ in the city/county of__________________________________.
I. Exterior
A. Roofing - # 51
    1.    Remove existing roofing coverings on roof and porch down to the existing sheathing. Remove all deteriorated
          sheathing, wood rafters, fascia board, boxing and moldings. Haul away from the premises to landfill.
    2.    Replace deteriorated roof boards with ½” exboard or ½” PBX plywood.
    3.  Furnish and install the following materials: See Rehab Spec #11.05, #11.06
        a. Pre-formed valley tin
        b. 4 R-61 plastic roof vents
        c. 15 lb starter felt
        d. 240 lb, 3-tab asphalt shingles, homeowner’s choice of color
    Cost of Material: $ _____________ Cost of Labor $ _____________ Total: $ _____________


B. Exterior Painting - # 31
    1.    Power wash all surfaces, then scrape, spot prime and paint 2 coats latex on all siding, trim and exterior window sash.
          a. Tint oil base primer to match finish color
          b. Homeowner’s choice of color of paint; Sherwin-Williams paint — allowance of $20 per gallon on
             latex paint, $20 per gallon on primer.
    2.  All surfaces shall include:
        a. All window trim and sash, to include all basement units
        b. All exterior door units/casings
        c. All soffit, fascia and porch/floor and ceiling
        d. Replace any rotted/damaged siding and putty any sash where putty is missing.
    Cost of Material: $ _____________        Cost of Labor $ _____________ Total: $ _____________

Total This Page: $ _____________



The Contractor hereby acknowledges that statements on page one of this proposal also apply to this page.

Contractor’s Signature: _________________________________________


Note: All shaded areas are either lead hazard reduction or are surfaces that were identified as containing lead. Methods
of site preparation, work practices and site cleaning must be attached to bid when submitted.


The Owner hereby acknowledges that statements on page one of this proposal also apply to this page.

Owner’s Signature (only on successful bid): ____________________________________________________________




Page 0                               Owner-occupied Rehabilitation Guide: Step Six                                2006 DEED
                                                     Color Selection
  Example                                                 Chart


                                                 Note:
                                         (On Agency Letterhead)


Property Owner: __________________________________________________________________________________
Project Address: __________________________________________________________________________________


Exterior Colors:
Siding:                                                Trim:
Doors:                                                 Other:

Interior Colors:
Room(s):
           Walls:                                      Trim:
Room(s):
           Walls:                                      Trim:
Room(s):
           Walls:                                      Trim:
Room(s):
           Walls:                                      Trim:

Floor Finishing:
Carpet: Living area:
        Bedroom 1:
        Bedroom 2:
        Other:
Vinyl:    Kitchen:
          Bathroom 1:
          Bathroom 2:
          Other:
Wood Stain:

Cabinet Stain or paint color:
Kitchen:
Bathroom 1:
Bathroom 2:
Other:


Property Owner Signature: ______________________________________       Date: _____________________________


2006 DEED                       Owner-occupied Rehabilitation Guide: Step Six                      Page 
                                                Some Things Owners Should Think
     Example                                    About Before Selecting Contractors


                                                          Note:
                               (Modify to reflect your program guidelines and policies.)


1.    Get bids from at least three contractors.
      Although it is not a requirement, we urge you to try to get three different contractors to bid. Competition will
      increase the likelihood of getting the best price for the same work.


2.    You can request any contractor you know to bid on the job but our agency will want to check their
      references before the contract is signed.
      While you are the person selecting the contractor and signing the contract, our agency requires that all participating
      contractors provide proof of insurance and licensing and that they have enough experience to finish the work to
      everyone’s satisfaction.


3.    Rehabilitation contractors must have appropriate licenses and adequate insurance.
      As of January of 1993, the State of Minnesota requires licensed contractors. We require insurance to cover
      property damage and injury protection while they work on your project. If lead-based paint hazards are found on
      your property, contractors who perform work must be properly licensed and/or trained and use lead safe work
      practices including occupant and worker protection.


4.    Don’t discriminate when asking contractors to bid.
      Property owners getting Small Cities Development Programs funds cannot discriminate on the basis race, color,
      creed, religion, sex, national origin, age, handicap, or otherwise, as provided by applicable law in the selection of
      contractors to submit bids.


5.    Property owners — or the Rehabilitation staff — hand out bid packets to the contractors.
      We will prepare packets that will contain everything contractors need to bid, but you can contact them to schedule
      a time to look at your property to be improved. Interested bidders can either pick up the bid packets at our office or
      we will mail them to them.


6.    Bids are opened by the owner, and the Rehabilitation staff (or whichever option applies).
      You will meet with the Rehabilitation staff to open the sealed bids and discuss them with the staff person before
      selecting the successful bidder.


7.    Do not sign any contracts before your loan has been closed at our agency’s office.




Page 2                               Owner-occupied Rehabilitation Guide: Step Six                             2006 DEED
                                                        The Bid Package
 Example                                                   Includes:


A. Work Write-up Cover Sheet for Contractor to use when submitting the bid. It identifies the owner’s name and
   the project number
B. Instructions to Bidders
    •   These should include a review of requirements to participate in your program:
    •   Adequate insurance, current Licenses, appropriate training, Labor Standards requirements, and a completed
        Application for Contractor form (if not previously submitted) on file with the agency.
    •   Instructions should provide information on:
         The required format to be used for bidding
         Deadline for receipt of bids and where bids should be sent
         How long bids are considered valid
         How bids will be awarded — who selects and on what basis
         Who will be executing the contract for work
         The necessity for a Pre-construction Conference
         The requirement for a Proceed Order before beginning work
    •   General conditions may be attached to the Work Write-up to provide owners specific guidance about
        such matters as:
         Who is responsible for securing permits
         How to handle change orders
         Who removes debris
C. Work Write-up — The format varies among agencies. Use the preceding list entitled “What a Work Write-up
   Should Include” when preparing or evaluating your own format.
D. Contractor-Owner Contract — includes the Conditions to Project. Some agencies make this a separate
   document but including in the contract reduces the number of related documents that might discourage good
   contractors from participation.
E. Contractor/Owner Warranty — This is important so the bidders understand what it is they will be guaranteeing
   — and for how long. This is also included in the Contractor-Owner Contract in the following example.


It is a good idea to have contractors who are NOT interested in bidding the project sign a statement to that
effect and return it to the homeowner or the SCDP office. It can be used to demonstrate attempts to get
multiple bids from various contractors if there is only one responsive bid received.




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Six                             Page 
                                                                 Work Write-up
  Example                                                        Cover Sheet


Contractor: __________________________________________________              Phone: ___________________________

Address: ____________________________________________________

          ____________________________________________________


for the Rehabilitation of the Residential Property located at:

Owner:    ____________________________________________________              Phone: ___________________________

Address: ____________________________________________________

          ____________________________________________________



Work Write-up prepared by: _____________________________________            Phone: ____________________________



Please return this packet to the agency in the envelope provided by:________________________________
                                                                                     (deadline for bids)




Page                               Owner-occupied Rehabilitation Guide: Step Six                         2006 DEED
                                                               Bid Package
  Example                                                         Letter


                                                          Note:
                                                  (On Agency Letterhead)


Date:


RE: Bid Package
Owner: ____________________________________________________
Address: ____________________________________________________

Dear Contractor:


Enclosed is the Work Write-up for work to be performed on the above referenced rehabilitation project. If you
are interested in bidding on the work, please return your completed bid in the enclosed envelope to our office
by ______________________.

All contractors working on properties assisted by the Small Cities Development Program must have a Contractor
Application form on file at _______________________________. State of Minnesota required licenses must be
current and insurance must provide adequate coverage.

Please bid on the Work Write-up only as written. If you feel additional work is needed, list those items with costs
on a separate sheet of paper or your letterhead stationery. All additional items will be considered separately from
the base bid. If lead hazard reduction work is required, methods of site preparation, work practices and site cleaning
must be attached to bid.

All bids will be reviewed jointly by the property owner and the Rehabilitation staff. Bids must include all requested
work items, conform to the program’s specifications, and be cost reasonable. The owner of the property will select a
contractor to perform the work and the and the contract will be executed between the owner and the winning contractor.

A Pre-construction Conference will be held prior to the Proceed to Work Order in which the Rehabilitation staff and the
owner will meet with the selected contractor to go over the approved Work Write-up. No changes to the approved Work
Write-up can be approved before the owner and the Rehabilitation office have concurred and no work can begin until
the contractor is issued a Proceed to Work Order from the owner, along with the signed contract.

If you are NOT interested in bidding on the project, please sign on the line below and return this letter in the enclosed
envelope.




I am not interested in bidding on this project.


Signature of Contractor: ________________________________________              Date:




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Six                                 Page 
                                                    Instructions For Preparing
     Example                                   Bids and Contract Award Information


General Requirements:
1.    The Contractor must meet all State of Minnesota licensing and/or training requirements as well as any additional
      licensing requirements of the county, municipality or program in which the work is to be performed. This also
      requires adequate liability insurance and workers’ compensation coverage, if applicable, will be maintained.
2.    If lead hazards have been identified in the Work Write-up, contractors and workers must have at least received
      lead-safe work practices training and all work must be conducted in accordance with lead-safe work practices,
      if project cost is less than $25,000. For project cost greater than $25,000, work must be completed by licensed
      supervisors and licenced workers.
3.    All bidders must have a Contractor Application Form on record with the agency.
4.    All workmanship and materials must conform to the program’s guidelines as stated in the Work Write-up and
      Technical Specification.
5.    The contractor must secure all necessary building, plumbing and electrical permits.
6.    Contractors are to remove debris resulting from their work and broom sweep on a daily basis.
7.    Bids are good for 90 days.
8.    All material used must be code approved.
9.    Any sewer, water or electrical connection charges must be included in the bid.


Documents to be Used:
1.    The Work Write-up as prepared by the Rehabilitation Program staff. It identifies eligible work items to be bid upon
      and any floor plans are diagrammatic only.
2.    The Bid form. It includes a signature area for the Contractor and an area for the separate break-out of the cost of
      labor and the cost of materials.
3.    Technical Specifications. They define materials and workmanship quality in detail as they will be required for the
      program. (It may be a separate document or incorporated in the Work Write-up.)


Instructions:
1.    Use the enclosed Work Write-up for preparing bids. Fill in all required information. Total the costs to the nearest
      dollar. Keep a copy. SIGN AND DATE WHERE INDICATED.
2.    Size, quantities and measurements indicated are close approximations. The Contractor is responsible for
      determining all needs to complete the repair work as identified in Work Write-up.
3.    Unless otherwise specified in the contract, each Contractor is responsible for all cutting, patching, finishing,
      painting, and staining incidental to accomplishing the work.
4.    Interpretations of items in the Work Write-ups shall be requested from the SCDP Rehabilitation Specialist, NOT
      THE OWNER. The contract for work will be between the owner and the contractor, not the Small Cities program.
5.    If in the Contractor’s opinion, additional work is needed, list those items with costs on a separate sheet of paper
      or letterhead and submit with bid. All additional items are considered separate from the base bid. Bid the Work
      Write-up only as written. Any work that you do which is not on the bid forms or which you do at the owner’s
      request will not be funded by the rehabilitation program.




Page 6                               Owner-occupied Rehabilitation Guide: Step Six                              2006 DEED
                                                       Instructions For Preparing
 Example continued                                Bids and Contract Award Information



6.   If any corrections are made on the Work Write-up, please date and initial those changes.
7.   Notify _______________________________ of any subcontractors who will provide work on the project on
     Contractor’s List of Subcontractor/material Suppliers List.
8.   All bids are to be made in ink, not pencil. Pencilled bids will not be accepted.
9.   Return the bid form to the ____________________________________ in the enclosed envelope. . RETURN
     ENVELOPES SHOULD BE SEALED AND READ “BID — DO NOT OPEN.” Bids cannot be accepted after the
     deadline without approval. Notify the Rehabilitation Specialist if you wish to be present at bid opening.

Contract Award:
1.   The job will be awarded to the lowest responsible base bid. All contractors will be notified of bid results.
2.   The Owner reserves the right to reject any or all bids for work to be performed with program funds. Contractors
     may have their bids rejected or may be declared ineligible to bid on further projects if past performance does not
     meet the standards of performance identified in the guidelines. Failure to comply with the instructions for bidding
     may be a basis for bid rejections.
3.   No work will begin until the Contractor receives a “Proceed to Work Order” from the _________________, signed
     by the ______________.
4.   All bids are good for 90 days.




2006 DEED                             Owner-occupied Rehabilitation Guide: Step Six                                 Page 
                                                            Contractor - Owner
     Example                                                     Contract


CONTRACTOR CONDITIONS:


WHEREAS, the Contractor has submitted bid(s) for work to be performed in connection with the Small Cities
Community Development Rehabilitation Loan Program, on premises located at _______________________ and
owned by ____________________________;


NOW, THEREFORE, in consideration of acceptance of said bid(s) by the Owner, the Contractor agrees as follows:
1.    Hold Harmless
      Contractor shall defend, indemnify, and hold harmless the Owner, and employees of the Department of Housing
      & Urban Development, Minnesota Department of Employment and Economic Development (DEED), and (name
      of SCDP agency) hereinafter _______ from all liability and claims for damages arising from bodily injury, death,
      property damage, sickness, disease, or loss of expense resulting from or alleged to result from Contractor’s
      operations under this contract.
2. Independent Contractor
      For the purpose of this Agreement, the Contractor shall be deemed to be an independent Contractor, and not an
      employee of _____________________. Any and all employees of the Contractor or other persons, while engaged
      in the performance of any work or services required to be performed under this Agreement, shall not be considered
      employees of ___________________________ and any and all claims that may or might arise on behalf of
      said employees or other persons as a consequence of any act or omission on the part of said employees or the
      Contractor shall in no way be the obligation or responsibility of ____________________________.
3.    Insurance
      Before commencing work, Contractor shall furnish with certificates the following insurance is in force. Policies
      shall be submitted for approval of the _______________________ and shall be endorsed to provide that the
      policies will not be canceled or changed until ten days after written notice of change or cancellation has been
      delivered to ______________________________. Coverage shall be at least as follows:
      Class of Coverage:                        Bodily Injury:      Property Damage:
      (1) Manufacturer’s & Contractor’s          $300,000          $100,000
      (2) Product Incl. Compl Operations         $300,000          $100,000
      (3) Auto Owned, Hired or Leased            $300,000          $100,000
      (3) Auto Owned, Hired or Leased            As Required
      If any such insurance is due to expire during the construction period, the Contractor shall not permit the coverage
      to lapse and new certificates shall be furnished to __________________________.
4. Lien Waivers
      Contractor shall protect, defend and indemnify Owner from any claims of unpaid work, labor, or material.
      Payment shall not be due until the Contractor has delivered to the Owner complete release of all liens arising out of
      the contract or receipt in full covering all labor and materials for which a lien could be filed, or a bond satisfactory
      to the Owner indemnifying him against any lien.




Page                                Owner-occupied Rehabilitation Guide: Step Six                              2006 DEED
                                                               Contractor - Owner
 Example continued                                                 Contract



5.   Subcontractors and Assignments
     No subcontract or assignment of this contract shall be made without the written consent of the Owner
     and ___________________________. Contractor shall furnish subcontractor lien waiver(s) upon payment.
6.   Permits and Codes
     Contractor shall secure all necessary permits and licenses required to perform the work called for by this contract,
     and all such work shall be in compliance with all building code regulations and ordinances whether or not covered
     by the specifications and drawings for the work.
7.   Equal Employment Opportunity
     (a) The Contractor shall provide equal opportunity to all persons, without discrimination as to race, color, creed,
         religion, national origin, sex, marital status, age and status with regard to public assistance or disability.
     (b) The Contractor will take affirmative action to ensure that applicants are employed, and that employees are
         treated during employment without regard to their race, color, creed, sex, or national origin.
     (c) The Contractor shall provide, to the greatest extent feasible, opportunities for training and employment to
         lower income residents of the area and that contracts be awarded to small businesses located within the area or
         owned in substantial part by area residents.
8.   Unacceptable Risk
     Contractor certifies that he/she is not listed on the “unacceptable risk determination” list of the U.S. Department of
     Housing and Urban Development or the U.S. Farmer’s Home Administration, nor excluded from participating in
     federally funded projects.
9.   Proceed to Work and Completion of Work
     Upon acceptance of this bid and submission of evidence of satisfactory insurance coverage, the work will be
     started within seven calendar days ONLY AFTER A NOTICE TO PROCEED TO WORK ORDER is received by
     the Contractor. The contract work shall be fully and satisfactorily completed within _____ working days of the
     Proceed to Work Order date. A working day will be considered to be all days except Saturdays, Sundays, and legal
     holidays.
     Any modification of the above shall be set forth in Article 15 below.
10. Payments
     Contractor shall be paid in full after the work is satisfactorily completed unless prior arrangements have been made
     for progress payments. Progress payments shall be limited to two, and shall be subject to twenty percent (20%)
     retainage until final satisfactory completion. Final payment of the Contract amount will be made only after final
     inspection _______ and acceptance by the Owner of all work performed by the Contractor.
11. Warranty As to Workmanship and Materials
     The Contractor shall remedy any defect due to faulty material or workmanship and pay for any damage to other
     work resulting therefrom which shall appear within the period of one year of final payment. Further, Contractor
     will furnish Owner with all manufacturer’s and supplier’s written guarantees and warranties covering materials and
     equipment furnished under this contract.
     This warranty does not cover defects caused by or related to:
     (a) Abuse, misuse, negligence or accident by parties other than the Contractor; or
     (b) Normal deterioration due to wear or exposure.


2006 DEED                            Owner-occupied Rehabilitation Guide: Step Six                                 Page 
                                                              Contractor - Owner
 Example continued                                                 Contract


12. Debris and Materials
    The Contractor agrees that during the course of work the premises shall be kept as clean and orderly as is
    reasonable under the circumstances and shall remove all debris resulting from the contract work from the premises
    each day and upon completion of the contract. All materials and equipment which are replaced and/or removed in
    the course of work shall become the property of the Contractor unless otherwise specified.
13. Lead Base Paint
    The Contractor agrees that no lead base paints shall be used in the course of performance under this Agreement.
    Where lead-based paint is involved, all work will be conducted in accordance with lead-safe work practices by
    appropriately trained supervisors and/or workers, and that appropriate occupant and worker protection activities
    will be planned and undertaken.
    Contractor Signature: _______________________________________ Date: _____________________________

14. Access to Records
    The ___________________________ shall have full access to all records relating to work performed under this
    Agreement.
15. Modification
    Any alteration, variation, modification, or waiver of the provisions of this Agreement shall be valid only after
    it has been reduced to writing, approved and signed by the _____________ and attached to the original of this
    Agreement.
16. Other Remedies:
    The above conditions and warranties are in addition to, and not in limitation of, any and all other rights and
    remedies to which the Owner, or subsequent Owners, may be entitled, at law or in equity, and shall survive
    the conveyance of title, and shall be binding on the undersigned not withstanding any provision to the contrary
    contained in any instrument heretofore or hereafter executed by the Owner.
17. Termination of Contract:
    If either party wishes to terminate this contract for any cause, they shall provide the other party with ten days notice
    and the contractor shall be duly compensated for any work satisfactorily completed at the point of termination.
18. Notice to Contractor:
    You are required by a 1982 Minnesota Statute, Section 270.66, to provide your Federal or MN Tax Identification
    Number or your Social Security Number if you do business with a public body. This information may be used in
    the enforcement of federal and state tax laws. Supplying these numbers could result in action to require you to file
    state tax returns and pay required taxes. This contract will not be approved unless these numbers are provided.

    MN Tax ID: ________________         Federal Tax ID: ________________         Social Security No.: ________________

19. This contract consists of the bid and proposal, the general conditions as outlined above, and the description of the
    work to be completed as shown on attached Work Write-up.




Page 00                            Owner-occupied Rehabilitation Guide: Step Six                              2006 DEED
                                                             Contractor - Owner
 Example continued                                                Contract


BID AND PROPOSAL
For the consideration named herein, the undersigned Contractor proposes to furnish all work, material and labor to
complete the work in accordance with the attached work write-up (Specifications) and the General Conditions outlined
above for the sum of $_________________.

OWNER CONDITIONS:
1.   The Owner certifies that the Small Cities Development Loan Funds shall be used for eligible improvements, and
     shall not be applied toward any work begun or completed before the date of the Proceed to Work Order.
2. The Owner shall permit the Contractor to use, at no cost, existing utilities such as light, heat, power and water
   necessary to the carrying out and completion of the work. Further, Owner will cooperate with the Contractor to
   facilitate the performance of the work, including the removal and replacement of rugs, coverings and furniture as
   necessary.
3.   Materials and equipment that have been removed and/or replaced as part of the work shall belong to the Contractor
     unless otherwise specified.
4.   The Owner understands and agrees that at any and all disputes, of whatever kind or nature, in conjunction with this
     Agreement, are solely the disputes of the Owner and Contractor to resolve without legal involvement, whether by
     lawsuit or otherwise. Any acts are solely in furtherance of its interest as a lender and administrator of the Small
     Cities Development Program and Owner shall have no recourse against the ____________________________ for
     any breach by Contractor of this or any related agreement.
5.   The Owner certifies receipt of the HUD/EPA form entitled, “Protect Your Family from Lead in Your Home.”
6.   The Owner is responsible for normal maintenance of all improvements. If a problem occurs which the Owner
     believes is covered by the warranty, the Owner shall contact the Contractor in writing, giving the Contractor
     sufficient information to enable him to resolve the matter.
7.   The Owner understands and agrees with the attached work write-up and agrees to permit Contractor access to the
     premises to improved to the extent necessary to complete the improvements specified.
8.   The Owner agrees that the improvements specified in the attached work write-up shall be inspected
     by _______________________________ before funds are disbursed.


Acceptance By Contractor                                     Acceptance By Owner


Signature of Authorized Representative                       Name of Owner(s) (Print)

Date                                                         Date

Title                                                        Address of Owner

Firm Name                                                    Signature of Owner

Firm Address                                                 Signature of Owner

Any person who makes a false statement or misrepresentation in connection with the application for or use of a
Small Cities Development Program loan may be subject to federal criminal offense penalties.


2006 DEED                           Owner-occupied Rehabilitation Guide: Step Six                              Page 0
Page 02   Owner-occupied Rehabilitation Guide: Step Six   2006 DEED
Step Seven: Selecting The Contractor



            Activity:                                         Documents Involved:
Task One    Recruit available contractors to bid              List of Available Contractors
            (owner takes the lead, if possible)               Work Write-up
                                                              Contract Award Procedures
            Open Sealed Bids with Owner                       Opened Bids, arranged by trade
            Evaluate responses for accuracy, reasonableness   Bid Tally Sheet
            Rank bids                                         Bid Summary
Task Two    Owner selects contractor                          Letters to successful and unsuccessful bidders
            Owner signs Contractor - Owner Contract           Contractor - Owner Contract
            Owner signs Self-Help Loan Agreement if           Self-Help Agreement
            applicable
            Enter dates in Case tracking system               Case Tracking System




                        Two Tips From Scarred Veterans Of Past Rehab Programs:

Tip #1: Hold a preconstruction conference and the owner prior to issuing a Notice to Proceed.
While a preconstruction conference for homeowner rehab programs is not required, it is a rare veteran of
past programs who doesn’t routinely hold them. An hour or two spent on the front end with the contractor
and owner will assuredly save hours of work and hard feelings later.
Tip #2: Be wary of Self-Help arrangements.
Owner self-help arrangements are a mine field. It is commonplace for work to be shoddy or take far too
long. Before you make it this a program option, be sure the performer has the capacity and the time to do
the work as you want it done.




2006 DEED                        Owner-occupied Rehabilitation Guide: Step Seven                          Page 0
                                                              Contract Award
     Example                                                    Procedures


                                                      Note:
                                 Each community should adapt this for their program.



1.    The contract for the proposed work will be awarded by the Owner to the lowest responsible bidder complying with
      all program requirements provided such a bid is reasonable and in the best interest of the Owner.
2.    The Owner has the right to select any bidder to do the work proposed provided the Owner agrees to pay into an
      escrow account the difference between that bidder and the lowest responsible bidder.
3.    The Rehabilitation Specialist will review all bids received for compliance with program requirements.
4.    The Owner and the Rehabilitation Specialist reserve the right to reject any or all bids or any portion thereof and
      waive any and all irregularities.
5.    All bidders will be notified of the results of the bid by letter indicating whether the bid was accepted or not
      accepted. If Contractor’s bid was not accepted, the letter will indicate which bidder received the award.
6.    Contractors may have their bids rejected or may be declared ineligible to bid on further projects if past
      performance does not meet the standards of performance identified in the guidelines. Failure to comply with the
      instructions for bidding may be a basis for bid rejections.
7.    No work will begin until the Contractor receives a “Proceed to Work Order” from the Rehabilitation Specialist,
      signed by the Community Development Director.
8.    All questions regarding the bidding and contract award procedures must be directed to the Rehabilitation
      Specialist at __________________________________.




Page 0                             Owner-occupied Rehabilitation Guide: Step Seven                             2006 DEED
                                                                                                                       Rehab
                                                  Owner:                                                               Specialist:




2006 DEED
                                                                                                                                                    Example

                                                  Project Address:                                                     Program:

                                                                                                                       Bid Opening
                                                                                                                       Time and Date:




                                                  Trade                        Contractor                Base Bid             Alternates   Notes
                                                                                                                                                    Sheet
                                                                                                                                                   Bid Tally




Owner-occupied Rehabilitation Guide: Step Seven
                                                                                  Total Accepted Bids:



                                                  Date notification letters sent Contractors: _____________________________




Page 0
                                                                           Bid
     Example                                                             Summary


Propety Owner: _______________________________________________                            Project Number: ____________________
Address: ____________________________________________________
         ____________________________________________________


Bidders:                                                                   Unsuccessful Bid Amount: Succesful Bid Amount:




Contract Awarded to:                                                       Total Project Cost:         Funding Source Amount:
1.                                                                         $                           SCDP: $
2.                                                                                                     Other: $
3.


Contractor Information:        Provide for each contractor
Female Owned:                   Yes  No
Race Code*:                    ____________
Hispanic Ethnicity:             Yes  No


*     Race Code:  = White; 2 = Black or African American;  = Asian;  = American Indian/Alaskan Native;
       = Native Hawaiian/Other Pacific Islander; 6 = American Indian/Alaskan Native & White;  = Asian & White;
       = Black/African American & White;  = American Indian/Alaskan Native & Black/African American; 0 = Other Multi-Racial




Page 06                                Owner-occupied Rehabilitation Guide: Step Seven                                     2006 DEED
                                                            Bid Award To
  Example                                                 Successful Bidder


                                                       Note:
                                               (On Agency Letterhead)




Date


Contractor Name and Address



RE: Notice of Contractor Selection


Property Owner: _____________________
Address: _______________________________



Base Bid Amount: ________________________


This is to inform you that yours was the successful in your bid for work at the above named property. There
were ______ bidders and your bid was ______ percent of the highest bid. Please stop by our office at your earliest
convenience to sign the contract.


You may begin this project after a preconstruction conference with our staff and the homeowner and a Notice to
Proceed is issued. I cannot issue a Notice to Proceed until I receive a copy of all applicable permits. I am looking
forward to working with you on this project.




Sincerely,




2006 DEED                          Owner-occupied Rehabilitation Guide: Step Seven                              Page 0
                                                           Notification To
  Example                                                Unsuccessful Bidder


                                                        Note:
                                                (On Agency Letterhead)




Date

Contractor Name and Address



RE: Property Owner: _____________________
Address: _______________________________



Base Bid Amount: ________________________


This is to inform you that you were unsuccessful in your bid for work at this subject property. Thank you very much
for taking the time to prepare a bid and I trust you will continue to participate in our program as an active contractor.


Bids were awarded to:


Contractor: ____________________________________
Base Bid: _____________________________________


If you want to discuss this further, please feel free to call me at ________________.


Sincerely,




Page 0                            Owner-occupied Rehabilitation Guide: Step Seven                            2006 DEED
                                                              Self-help Loan
     Example                                                   Agreement
                                                                                                                Page 1 of 2




Borrower: ___________________________________________________                   Program Funds: _____________________
                                   (Print or type Name)                                                 (SCDP, etc.)

Completion Date: __________________________               Approximate Inspection Date: __________________________


Attach a material list which includes costs from suppliers. Only permanent improvements are eligible for
payment. Tools, sandpaper, etc. are not eligible expenses.


The Property Owner agrees to complete the work with the materials listed below without labor reimbursement.
Payment will be made from materials from loan proceeds only after the materials have been properly installed in a
workmanlike manner.
A. Performer has the ability and skills to perform the work specified below. Removing any lead-based paint hazards
   requires a minimum of lead-safe work practices training.
B. Performer will secure all necessary permits and comply with all applicable building codes, regulations and
   ordinances.
C. Performer will bear the responsibility for making all arrangements to obtain necessary materials and supplies. The
   cost of these items will not exceed the Total Cost set forth in the List of Improvements.
D. Performer will complete all work by the completion date listed above and will allow entry by Housing
   Rehabilitation staff to inspect the work.
E. Performer has agreed to supply his/her services to improve the property without influence or duress from the
   Housing Rehabilitation staff, and it is fully understood that this work is not a precondition to getting other housing
   rehabilitation work done.
F.    Performer shall defend, indemnify and hold harmless the officers, members, and employees of ________________
      from any and all damages resulting from personal injury and property damage, including consequential damages,
      arising or in any way resulting from his/her performance under this agreement.
G. Bills or invoices from material suppliers must itemize and properly identify the materials purchased.
H. Payment will be made from original invoices only.
I.    Checks will be made payable to both owner and material supplier unless invoices are marked “paid.”
J.    If the work is not completed properly or is unduly delayed, material cost and any labor cost will be paid for out
      of actual material fund allowance, and funds remaining upon closeout of the escrow account, and funds for a
      contingency allowance, if any.
K. Work shall be started within _____ days after the Proceed to Work Order has been issued.


Signature of Performer of Work:__________________________________               Date: _____________________________

Signature of Borrower
if different from Performer: ______________________________________             Date: _____________________________




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Seven                                   Page 0
                                                               Self-help Loan
 Example continued                                              Agreement
                                                                                                         Page 2 of 2




Work Schedule And Materials List
                                                                           Anticipated           Anticipated
Improvement:                           1st Price         2nd Price         Beginning Date        Completion Date




The Administrator authorizes the Borrower to order materials or supplies based on this work schedule.


SCDP Authorization: __________________________________________              Date: _____________________________




Page 0                          Owner-occupied Rehabilitation Guide: Step Seven                       2006 DEED
Step Eight: Packaging The Case



            Activity:                                        Documents Involved:
Task One    Review file                                      Checklist for Completeness — Owner-occupied
                                                             Housing Rehabilitation
            Assign work items to funding sources             Fiscal Tracking Spreadsheet
Task Two    Prepare Loan Repayment Agreement                 Repayment Agreement
                                                             (examples represent the various types of repayment
                                                             agreements that agencies may choose for their
                                                             program.)
Task Three Hold Closing                                      Truth in Lending form
                                                             Right of Rescission form



Time Out

It is very important that your rehabilitation program have built-in “checks and balances” to catch
procedural or factual errors. The first activity in this Step, “review file,” should use your system to
double-check the following:

1.   Is all the necessary paperwork present and complete?

2.   Does the file clearly demonstrate the eligibility of the applicant, given our program guidelines?

3.   Does the file have all the pieces in place regarding the eligibility of the property?

4.   If other funding sources are to be included, is there evidence of commitments that these funds
     will be available when needed?

When there has been a thorough review of the case and both parties are comfortable with the
results, the closing can be scheduled and the case will move forward.




2006 DEED                       Owner-occupied Rehabilitation Guide: Step Eight                         Page 
                                                            Collaborative
 Example                                                  Funding Schedule


Contractor: __________________________________________________              Phone: ___________________________

Application Number: __________________________________________ Total Funding Package: $ _____________


                               SCDP Funds: $
           Other Funds (specify)
                                              $
                                              $
                                              $
                                              $
                               Total Funds: $



                                   Contractor        Contractor       Contractor         Contractor
Source and Uses of Funds         ____________      ____________     ____________       ____________   Total

Source:                          $                 $                $                  $              $
                       Uses:


Source:                          $                 $                $                  $              $
                       Uses:


Source:                          $                 $                $                  $              $
                       Uses:


Source:                          $                 $                $                  $              $
                       Uses:


Source:                          $                 $                $                  $              $
                       Uses:


Source:                          $                 $                $                  $              $
                       Uses:


                      Total:     $                 $                $                  $              $




Page 2                             Owner-occupied Rehabilitation Guide: Step Eight                      2006 DEED
                                                 Rehabilitation Fiscal
 Example                                        Tracking Spreadsheet

Report as of: ____________________________
    Number Balance
    Voucher
    Amount Date
    Paid   Paid
          Contractor
Amount

Source
Each   Funding
Amount Source
Total
Bid Rehab
    Staff
    Number
    Project
          Household Name




2006 DEED                     Owner-occupied Rehabilitation Guide: Step Eight   Page 
                                                                Notice of
     Example                                               Right of Rescission


Customer(s) Name: ____________________________________________                         SCDP Project Number: _______________
Address ____________________________________________________
        ____________________________________________________


Your Right to Cancel

You are entering into a transaction that will result in a lien on your home. You have a legal right under Minnesota State
law to cancel this transaction, without cost, within three business days from whichever of the following events occurs last:
1.    The date of the transaction, which is ______________________; or
2.    The date you received your Truth in Lending disclosures; or
3.    The date you received this notice of your Right to Cancel.

If you cancel this transaction, the lien is also canceled. Within 20 calendar days after we receive your notice, we must
take the steps necessary to reflect the fact that the lien on your home has been canceled, and we must return to you any
money or property you have given to us or to anyone else in connection with this transaction.


How To Cancel
If you decide to cancel this transaction, you may do so by notifying us in writing, at:\

           ________________________________________________________________________________________
                                                       (Creditor’s Name and Business Address)


You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use
this notice by dating and signing below. Keep one copy of the notice because it contains important information about
your rights.


If you cancel by mail or telegram, you must send the notice no later than midnight of           (date)        , (or
midnight of the third business day following the latest of the three events listed above). If you send or deliver your
written notice to cancel some other way, it must be delivered to the above address no later than that time.


I/We Wish To Cancel:
Consumer’s Signature: _________________________________________                        Date: _____________________________

Consumer’s Signature: _________________________________________                        Date: _____________________________




Page                             Owner-occupied Rehabilitation Guide: Step Eight                             2006 DEED
                                                             Truth In
  Example                                               Lending Statement


Borrower(s): _________________________________________________
         ____________________________________________________
         ____________________________________________________


Annual Percentage Rate        Finance Charge                Amount Financed               Total of Payments
The cost of your credit as    The dollar amount the         The amount of credit          The amount you will have
yearly rate.                  credit will cost you.         provided to you or on your    paid after you have made
                                                            behalf.                       all payments as scheduled.
                              $                             $                             $


Your payment schedule will be:


Number of Payments            Amount of Payments            When Payments are Due         Monthly Starting

                              $


Security:   You are giving a security interest in the roperty to improve.
Prepayment: If you pay off early, you will not have to pay a penalty.
Assumption: Someone buying your house cannot assume the remainder of the mortgage on the original terms.


See your contract documents for any additional information about non-payment, default, any required prepayment in
full before the scheduled date, and prepayment refunds and penalties.


Itemization of the Amount Financed of $__________________


The makers, guarantors, endorsers and any other parties to this Note hereby waive presentment, demand, protest and
notice of dishonor and protest and hereby agree that an extension or extensions of the time of payment of this Note
or any installment or part hereof may be made before, at or after maturity by agreement with any one or more of the
parties hereto without notice to and without releasing the liability of any other party to this Note.


By executing this Note, the undersigned acknowledge receipt of a copy thereof prior to execution.


Borrower: ___________________________________________________               Date: _____________________________


Borrower: ___________________________________________________               Date: _____________________________




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Eight                             Page 
                                                                 Repayment
     Example                                                     Agreement


       Note: Repayment Agreement terms and conditions will vary depending on community decisions.


THIS AGREEMENT, made and entered into this ___________________ by and between ______________________
(hereinafter referred to as “Owner”), and the ________________________having its principal office at ____________
___________________, Minnesota (hereinafter referred to as “__________”).


WHEREAS, on ___________________________, the Grantor agreed to grant to Owner a rehabilitation Deferred
Payment Loan (hereinafter referred as “Deferred Loan,” relating to the real estate hereinafter described, in the amount
of ______________________________________ dollars (_____________________), but only on condition that
Owner executes this Agreement.

NOW THEREFORE, in consideration of the said Deferred Loan, the parties do hereby agree as follows:
1.    Owner covenants and agrees with the City that if the real estate hereinafter described is sold, transferred or
      otherwise conveyed, voluntarily or involuntarily, either while the Owner is living or by reason of the death of the
      Owner:
      (a) within a period of three (3) years after the date of the Deferred Loan to wit: __________________________
          (date), Owner shall repay to the City a sum equal to the full amount of the Deferred Loan as set forth above;
      (b) within the fourth year after the date of the Deferred Loan, Owner shall repay to the City a sum to seventy-five
          percent (75%) of the amount of the Deferred Loan;
      (c) within the fifth year after the date of the Deferred Loan, Owner shall repay to the City a sum equal to fifty
          percent (50%) of the amount of the Deferred Loan;
      (d) within the sixth year after the date of the Deferred Loan, Owner shall repay to the City a sum equal to twenty-
          five percent (25%) of the amount of the Deferred Loan;
      (e) within the seventh year after the date of the Deferred Loan, or at any time thereafter, Owner shall have no
          obligation to repay the Deferred Loan or any portion thereof.
      Any such repayment shall be made to the City no later than the 30th day following such sale, transfer or other
      conveyance, or on such later date or dates as City, in its sole discretion, may designate.
2.    As security for Owner’s obligation of repayment, and subject to the terms and conditions of this Agreement, Owner
      hereby grants and City shall and hereby does have, a lien on the real estate hereinafter described as the full amount
      necessary to satisfy said repayment obligation and the cost including reasonable attorney’s fees, of collecting the
      same. The real estate subject to said lien is situated in _______________________, Minnesota, and is legally
      described as:
3.    Promptly after the date of any sale, transfer or other conveyance of the above-described real estate (or, in the event
      of a sale by contract or deed at least ten (10) days prior to such date of sale), Owner or his/her heirs, executors, or
      representatives, shall give the City notice thereof.
4.    In the event Owner or his/her heirs, executors or representatives shall fail or refuse to make a required repayment
      within said limited period, the City may, with or without notice of Owner, foreclose said lien in the same manner as
      an action for the foreclosure of mortgages upon said real estate, as by statute provided.
5.    Said lien shall terminate and shall be of no further force or effect in the event the City has not, on or
      before _________________________ commenced an action in the aforesaid manner to foreclose the same.




Page 6                             Owner-occupied Rehabilitation Guide: Step Eight                             2006 DEED
                                                                    Repayment
 Example continued                                                  Agreement

6.   This Agreement shall run with the aforesaid real estate and shall inure to the benefit of and be binding upon the
     parties hereto and their respective heirs, executors, representatives, successors, and assigns.
7.   If this Agreement is executed by a contract for deed vendor or a mortgagee of the property, as one of the Owners,
     such execution shall be deemed for the purpose of establishing and continuing the existence of the indebtedness
     described herein and the lien granted herein. However, in the event of default of the terms hereof, neither the City
     of __________________ nor its assigns shall take any action against such contract for deed vendor except such as
     may be necessary in order to subject to the satisfaction of said indebtedness the property described herein.



IN TESTIMONY WHEREOF, the parties have executed this Agreement as of the day and year first written above.


_______________________________________________               By: ____________________________________________
                                                                                (Grant Administrator)
STATE OF MINNESOTA
(                    )
COUNTY OF (             )


On this __________ day of ___________________, 200___, before me, a Notary Public within and for said County,
_________________________________________ personally appeared to me known to be the person(s) described in
and who executed the foregoing instrument and acknowledging that __he executed the same as ____________ free act
and deed.

_______________________________________________
                    Notary Public




Tax statements for the real property described in this instrument should be sent to the
city of ______________________________________________________.




2006 DEED                           Owner-occupied Rehabilitation Guide: Step Eight                              Page 
                                                Deferred Loan Repayment Agreement
     Example                                              Contract-for-Deed


           Note: Repayment Agreement terms and conditions will vary depending on community decisions.


THIS AGREEMENT, made and entered into this______ day of ______________________, 20___ by and
between _____________________________________ hereinafter referred to as “BORROWER,” and the
City of ________________________, having its principal office at __________________________, hereinafter
referred to as “LENDER.”

WHEREAS, on _________________, the Lender agreed to provide to the Borrower financial assistance to be used in
pursuit of the rehabilitation of certain real property hereafter described; and

WHEREAS, a percentage of said financial assistance was to be provided in the form of a Forgiveness Loan, hereinafter
referred to as “LOAN,” with said Loan being in the amount of ______________________dollars ($_______________),
subject to the condition that the Borrower executes this Agreement.

NOW THEREFORE, in consideration of the said Loan and in accordance with the provisions of Minnesota Statutes,
the parties do hereby agree as follows:
1.    The Borrower covenants and agrees with the Lender that if the real estate hereinafter described is sold, transferred
      or otherwise conveyed, voluntarily or involuntarily, either while the Borrower is living or by reason of the death of
      a single remaining Borrower or both Borrowers, or if the property shall cease to be the Borrower’s principal place
      of residency, to-wit:
      a.     within a period of one (1) year after the date of this Agreement, the Borrower shall repay to the Lender a sum
             equal to the full amount, one hundred percent (100%), of the loan as set forth above;
      b.     within the second year after the date of this Agreement, the Borrower shall repay to the Lender a sum equal to
             ninety percent (90%) of the loan;
      c.     within the third year after the date of this Agreement, the Borrower shall repay to the lender a sum equal to
             eighty percent (80%) of the loan;
      d.     within the fourth year after the date of this Agreement, the Borrower shall repay to the Lender a sum equal to
             seventy percent (70%) of the loan;
      e.     within the fifth year after the date of this Agreement, the Borrower shall repay to the Lender a sum equal to
             sixty percent (60%) of the loan;
      f.     within the sixth year after the date of this Agreement, the Borrower shall repay to the lender a sum equal to
             fifty percent (50%) of the loan;
      g.     within the seventh year after the date of this Agreement, the Borrower shall repay to the Lender a sum equal to
             forty percent (40%) of the loan;
      h.     within the eighth year after the date of this Agreement, the Borrower shall repay to the Lender a sum equal to
             thirty percent (30%) of the loan;
      i.     within the ninth year after the date of this Agreement, the Borrower shall repay to the Lender a sum equal to
             twenty percent (20%) of the loan;
      j.     within the tenth year after the date of this Agreement, the Borrower shall repay to the lender a sum equal to ten
             percent (10%) of the loan;
      k.     within the eleventh year after the date of this Agreement, or at any time thereafter, the Borrower shall have no
             obligation to repay the loan or any portion thereof to the Lender.



Page                                Owner-occupied Rehabilitation Guide: Step Eight                           2006 DEED
                                                   Deferred Loan Repayment Agreement
 Example continued                                           Contract-for-Deed

2.   Any such repayment as required above shall be made to the Lender no later than thirty (30) days following the
     action that requires the repayment.
3.   At the determination of the Lender, the remaining portion of the money utilized by participating eligible Borrowers
     and designated as a forgiveness loan, may be forgiven repayment if either of the two (2) living Borrowers should
     die or any single or both Borrowers should require verified extended out-of-home care because of illness, injury or
     enfeeblement.
4.   As security of Borrower’s obligation of repayment, and subject to the terms and conditions of this Agreement, the
     Borrower grants, and the Lender shall and hereby does have, a lien on the real estate hereinafter described in the
     full amount necessary to satisfy said repayment obligation and the cost, including reasonable attorney’s fees, of
     collecting the same. The real estate subject to said lien is legally described as:
5.   Promptly after the date of any sale, transfer or other conveyance of the above described property, or in the event of
     a sale by contract for deed, at least ten (10) days prior to the date of such sale; or if the property shall cease to be
     the Borrower’s principal place of residency, the Borrower or his/her heirs, executors, or representatives shall give
     the Lender notice thereof.
6.   In the event the Borrower or his/her heirs, executors, or representatives shall fail or refuse to make a required
     repayment within said limited period, the Lender may, with or without notice to the Borrower, foreclose said lien in
     the same manner as an action for the foreclosure of mortgages upon said real estate, as provided by State Statute.
7.   Said lien shall terminate and shall be of no further force or effect in the event the Lender has not, on or before
     _______________________________,
     (I) commenced an action in the aforesaid manner to foreclose the same and
     (ii) filed for record a notice of said action, or a lien pending referring to the same, in the office of the County
          Recorder of and for _______________ County.
     The Lender may, in its sole discretion, extend said termination date of said lien by filing for record, on or before
     said termination date, an agreement with Borrower or his/her heirs, executors, or representatives evidencing such
     extension.
8.   In the event that the property described above is subject, as of the date of this Agreement, to one or more contracts
     for deed (hereinafter collectively referred to as a “Contract for Deed”), Borrower specifically covenants that the
     vender or vendors, as the case may be, of the Contract for Deed (hereinafter collectively referred to as the Contract
     Vendor”), has executed this Agreement at the place provided below. The execution of this Agreement by the
     Contract Vendor shall and hereby is deemed to be for the purpose of establishing and continuing the existence
     of the indebtedness described herein and the lien granted herein. Accordingly, it is specifically agreed that the
     Contract Vendor shall not be personally liable by reason of any default which may occur in the performance or by
     reason of the nonperformance of any of the terms of this Agreement to be performed by the Borrower; and that the
     Lender shall not seek or be entitled to any personal judgement against the Contract Vendor by reason of any default
     hereunder, and that the sole remedies of the Lender in the event of any default as against the Contract Vendor shall
     be to proceed against the real estate described herein in the manner provided in this Agreement in order to subject
     it to the repayment of the Loan.
     Notwithstanding anything to the contrary contained in this Agreement, in the event that the property described
     above is subject to the Contract for Deed, it is further agreed by the parties hereto as follows:
     (I) The conveyance of fee title by the Contract Vendor to Borrower upon fulfillment of the terms and conditions of
         the Contract for Deed, and the sale or conveyance by Contract Vendor of the vendor’s interest in said Contract
         for deed, shall not be events giving rise to repayment of the Loan under this Agreement.




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Eight                                Page 
                                                  Deferred Loan Repayment Agreement
 Example continued                                          Contract-for-Deed

     (ii) In the event Borrower desires to obtain first mortgage financing to meet Borrower’s obligations under the
          Contract for Deed referred to in this paragraph 8, Lender hereby agrees to subordinate the lien created by
          this Agreement for its benefit to said refinancing first mortgage lien, and to execute any and all instruments
          reasonably required to effectuate said subordination.
     (iii) This Agreement constitutes an amendment to the Contract for Deed referred to in this paragraph 8, to the
           extent that it subordinates said Contract for Deed to the lien of the mortgage herein created and granted, and
           the parties hereto agree that any conveyance by Contract Vendor of the premises described above shall be
           subject to said mortgage for so long as the Loan is unpaid and outstanding.
9.   This Agreement shall run with the aforesaid real estate and shall inure to the benefit of and be binding upon the
     parties hereto and their respective heirs, executors, representatives, successors and assigns.

IN WITNESS WHEREOF, the Borrower has executed this Forgiveness Loan Repayment Agreement.


Borrower: ___________________________________________________


Borrower: ___________________________________________________



_______________________________________________                   _____________________________________________
                             Contract Vendor                                                  Contract Vendor


_______________________________________________                   _____________________________________________
                             Contract Vendor                                                  Contract Vendor




Page 20                             Owner-occupied Rehabilitation Guide: Step Eight                            2006 DEED
                                                       Rehabilitation Program
  Example                                              Installment Loan Note


Names(s): ______________________________________                 _____________________________________________


_______________________________________________                  ____________________________________ Minnesota


Date:___________________________, 20____



FOR VALUE RECEIVED, the undersigned (hereinafter collectively referred to as “The Borrower”) jointly and
severally promises to pay to the order of the ________________________________, a public body corporate of the
State of Minnesota at its office, the sum of _______________________________ Dollars ($_____________), with
interest on the unpaid principal amount until paid, computed from the day, which is thirty (30) days prior to the date for
payment of the first installment hereof as set forth below, at the rate of __________________ per annum.


Payment is to be made in _______ consecutive monthly installments of $____________________ each, the first
installment to be paid on ______________________________ and subsequent installments on the same day of each
month thereafter until the entire indebtedness evidenced hereby is fully paid, except that any remaining installments, if
not sooner paid, shall be due and payable on the _______________ day of _________________________, 20___.


All payments received by the holder on account of this Note shall be applied first to accrued interest and the balance to
reduction of principal.


In the event that any monthly installment due under this Note is not paid when due, or in the event that the Borrower
shall be in default or in violation of any of the covenants, certifications, terms or conditions of the instrument securing
the indebtedness evidenced hereby, then the entire principal amount outstanding hereunder and accrued interest, thereon
shall at once become due and payable at the option of the Note holder, without notice or demand. Failure to exercise
such option upon default shall not constitute a waiver of the right to exercise such option upon any subsequent default.


In the event of any default on the payment of this Note, and if suit is brought hereon, the Note holder shall be entitled
to collect in such proceeding all reasonable costs and expenses of suit including but not limited to reasonable attorney’s
fees.


Borrower may prepay this Note in whole or in part at any time without penalty. Any partial prepayment shall be
applied against the principal amount outstanding and shall not postpone the due date of any subsequent monthly
installments or change the amount of such installments, unless the Note holder shall otherwise agree in writing.


This Note is secured by a Mortgage of even date herewith on certain property described therein, and represents money
actually used for improvement to said property.




2006 DEED                          Owner-occupied Rehabilitation Guide: Step Eight                               Page 2
                                                          Rehabilitation Program
 Example continued                                        Installment Loan Note


Borrower(s): _________________________________________________
         ____________________________________________________
         ____________________________________________________


Annual Percentage Rate        Finance Charge                Amount Financed               Total of Payments
The cost of your credit as    The dollar amount the         The amount of credit          The amount you will have
yearly rate.                  credit will cost you.         provided to you or on your    paid after you have made
                                                            behalf.                       all payments as scheduled.
                              $                             $                             $


Your payment schedule will be:


Number of Payments            Amount of Payments            When Payments are Due         Monthly Starting

                              $


Security:   You are giving a security interest in the roperty to improve.
Prepayment: If you pay off early, you will not have to pay a penalty.
Assumption: Someone buying your house cannot assume the remainder of the mortgage on the original terms.


See your contract documents for any additional information about non-payment, default, any required prepayment in
full before the scheduled date, and prepayment refunds and penalties.


Itemization of the Amount Financed of $__________________
$_____________________________ Amount Given to you directly.


The makers, guarantors, endorsers and any other parties to this Note hereby waive presentment, demand, protest and
notice of dishonor and protest and hereby agree that an extension or extensions of the time of payment of this Note
or any installment or part hereof may be made before, at or after maturity by agreement with any one or more of the
parties hereto without notice to and without releasing the liability of any other party to this Note.


By executing this Note, the undersigned acknowledge receipt of a copy thereof prior to execution.


Borrower: ___________________________________________________


Borrower: ___________________________________________________


Guarantor(s): _________________________________________________




Page 22                          Owner-occupied Rehabilitation Guide: Step Eight                         2006 DEED
Step Nine: Managing Construction


            Activity:                                        Documents Involved:
Task One    Hold Preconstruction Conference with             Preconstruction Conference Report signed by
            Contractor and Homeowner                         all parties
Task Two    Agency or Owner signs Proceed to Work Order      Proceed to Work Order
            Contractor gets Contract Packet                  Packet for contractor containing:
            Owner notifies Rehab Advisor when                A. Signed Contractor/Owner Contract
            work begins                                      B. Payment Request forms
                                                             C. Lien Waivers
                                                             D. Sworn Construction Statement
                                                             E. Completion Certificate
            Enter dates of Preconstruction Conference,       Case Tracking system
            Proceed Order, and beginning of construction
            in Case Tracking System
Task Three Staff performs interim inspections                Documentation of inspections for file
Task Four   Process Change Orders if applicable              Change Order forms
            Process Payment Requests as agreed               Contractor Payment Request forms
            Document Case Tracking and                       Case Tracking and Fiscal Tracking Spreadsheet
            Fiscal Tracking Systems



Staffing Needs For Rehabilitation Programs

In 1991, HUD published Productivity Guidelines for Community Development Rehabilitation
Programs (CPD Notice 91-22). It examined 777 CDBG programs and established norms of
production for both multifamily and single family programs. These standards are broken into five
categories, depending upon total CDBG dollars spent of rehab each year.

Category II includes those programs which spend between $250,000 and $500,000 per year the
size of a typical SCDP program in Minnesota. For single family programs in this category, the
productivity guideline is 16 completions per year for each full-time staff person charging their
administrative time to the program.

How do you compare?

A high-producing experienced SCDP agency reports that a “freshman” Rehab Auditor (their
term for Construction Analyst or Rehab Inspector) typically handles 10 to 15 cases at a time. A
“veteran” handles as many as 35 cases in their active workload. This does not include the other
staff charging administrative time to the rehab budget, of course. From start to finish, they report
an average time to complete a case of 6 to 8 months, depending on the complexity of the work, the
cooperation of the client and contractor, and of course, because this is Minnesota.... the weather.




2006 DEED                        Owner-occupied Rehabilitation Guide: Step Nine                        Page 2
Preconstruction Conferences

While not required for rehabilitation projects that are not subject to Davis-Bacon regulations,
experienced administrations routinely hold preconstruction conferences for everyone. The
following recommendations are based upon the “war stories” from the Veterans of Past Rehab
Programs:

•   If possible, hold the conference on-site in the owner’s property. It allows a walk-through to go
    over the Work Write-up item by item and discuss what is to be done — and not done — with
    everyone involved present. Some agencies hold separate meetings with the owner (especially
    if they are elderly) and the contractor so they can cover — in detail — what owners can expect
    during construction without wasting the contractor’s time.

•   Have a written agenda so you are certain to cover all relevant points.

•   Take notes and put them in the case file. They may be very important later.

•   Discuss the owner’s role in monitoring progress and the contractor’s obligation to let Rehab
    staff know when he/she has reached critical points in the construction process where an
    inspection is appropriate.

•   Discuss occupant protection and relocation issues with owners and contractors. Complete
    the “Relocation Screening Sheet for Occupant Protection” as documentation that appropriate
    occupant protection steps were taken. If appropriate, a waiver of relocation may be obtained
    from elderly.

•   Review the fact that if work items are not on the approved Work Write-up, they will not be paid
    for with program funds. Cover the Change Order process. Discourage “side deals.”

•   Remind everyone that questions of interpretation of the Work Write-up are to be taken to the
    Rehab Specialist, the owner is not supposed to try and interpret.

•   Discuss payment requests and leave a supply of forms with the contractor.

•   Discuss how disputes should be resolved: first, between the owner and contractor and then,
    only as a fall-back, bring the Rehab staff into the conflict.

•   Cover the close-out procedures — what each of the documents will be and what they mean.

•   Finally, review the work schedule so all understand when work is expected to begin, how it
    will proceed, and when it is expected to be completed. If the owner is doing any items as “self-
    help,” cover this schedule also so the contractor is aware of what is to be happening.

The example Preconstruction Conference Report is used by some programs to document who
attended and what was covered.




Page 2                     Owner-occupied Rehabilitation Guide: Step Nine               2006 DEED
Interim Inspections

DEED requires a minimum of three inspections: one initial, one interim and one final during the
course of construction. Inspections should be completed before contractor payments are made.


                                 Cautions from Veterans of Rehab Programs

Create a separate “field file” that staff uses during on-site inspections. It should contain a copy of the
necessary documents — including the Work Write-up and the Owner-Contractor Contract — so disputes
can be resolved and work can be accurately evaluated.
Veteran staff keep all their active “field files” with them when they are out of the office. It is very time
consuming to have to trek back to an office if a call comes in for an unexpected inspection.
Staff should make their notes as soon as they get back in their vehicle. It is amazing how quickly cases
can blur together if staff counts on remembering what they saw and said on the site.
During the initial inspection the staff “read the client.” Now they should plan the number and timing of
interim inspections based upon that reading. There are essentially three factors to consider in deciding
how often to inspect:
      • The complexity of the job
      • The capability of the owner
      • The knowledge and experience of the contractor




There is more than one acceptable way to document inspections.

•    DEED recommends using the actual Work Write-up and dating and initialing each item as it is
     inspected.

•    Some agencies use a Field Inspection Report as another way to document what the Rehab
     Specialist found and it can serve as a “punch list” if items need to be corrected before
     completion.

•    Those entities using certain electronic tracking systems (such as Community Development
     Manager) are able to pull specific work that is completed from the specifications into a report
     which becomes the item for which payment is made and inspection documented.




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Nine                           Page 2
Progress Payments

If your program allows for progress payments, there are certain documents that must support that
draw on the account.

•   Payment Request form signed by the Contractor, the Owner and the Rehabilitation Specialist
    working on the case.

•   Lien waivers from the Contractor for the work covered by the payment request.

•   A Completion Certificate signed by the parties involved: the contractor, owner and staff
    person that documents the payments to date and the balance on the contract. (See an example
    in Step Ten.)

•   If payment is requested for lead hazard work completed, a clearance must be obtained.

Remember: Payment should only be made for completed work that has been inspected.



Change Orders

Nobody likes them. Experienced administrators do everything possible to write the Scope of Work
so they are unlikely to happen, but when a call comes from an owner or contractor, you need to
have a policy to deal with them.

•   Some programs only allow them if unforeseen events occur: e.g. a wall collapsed, wood that
    appeared to be sound was actually rotten, materials became unavailable due to events beyond
    any reasonable person’s control.

•   Contractor error in estimating the project or doing the work is not typically allowed as a change
    order in increasing the cost of the job.

•   Have a process for review of each Change Order by the program manager so they are not
    perceived as “routine” by contractors.

•   They must be agreed to by all parties in writing.

•   They must be reviewed for cost, etc., and marked as such.

•   Other records that are affected by the Change Orders, such as contract and repayment
    agreements or mortgages, must also be adjusted as needed.

Now you can see why they are the universally-dreaded part of rehab.




Page 26                     Owner-occupied Rehabilitation Guide: Step Nine               2006 DEED
                                                           Preconstruction
  Example                                                 Conference Report


READ CAREFULLY BEFORE SIGNING


Project # ______________________


I (We), the undersigned, have on this date at ______________________________ participated in a Preconstruction
Conference prior to the beginning of rehabilitation on my (our) property. I (We) acknowledge the terms of the
Contractor/Owner Contract, the explanation of work to be done, the roles of the Rehabilitation staff, and our
responsibilities during the construction phase. I (We) further understand that the Housing Rehabilitation program
assumes no responsibilities for the work performed and does not warrant any work performed.

Signature of Property Owner: ____________________________________                  Date: __________________________


Signature of Property Owner: ____________________________________                  Date: __________________________



I, the undersigned, hereby certify that the Preconstruction Conference was held on this date between the property
owner(s), the Housing Rehabilitation staff, and myself. I understand the procedures to e followed for change orders
and request for payment and inspections. I understand and agree that the work performed must meet the standards of
performance set by the program and established by the program specifications and work write-up.


Signature of Contractor: ________________________________________              Date: _____________________________
        Title: ________________________________________________



I, the undersigned, hereby certify that I participated in a Preconstruction Conference on this date.


Signature of Rehabilitation Advisor: ______________________________            Date: _____________________________




2006 DEED                           Owner-occupied Rehabilitation Guide: Step Nine                          Page 2
                                   Relocation Screening Sheet for Occupant Protection
  Example                                from Lead Hazard Reduction Activities


Property Address: __________________________________               Owner: _____________________________________


Relocation for this project is: (check one)
      Required (All items listed in Section A will be performed and appropriate documents will be attached.)
      Not required due to circumstances listed in Section B.

Note: If circumstances change, relocation may be required.
A. Relocation of occupants is required and the following activities will occur for occupant protection:
    •    Occupants will not be permitted to enter the worksite during hazard reduction activities.
    •    Occupants will be temporarily relocated to a lead-safe unit before and during hazard reduction
    •    Dwelling unit and worksite will be secured against unauthorized entry, including pets.
    •    Occupants’ belongings in a containment area will be relocated to a secure area outside the containment area or
         covered with appropriate materials.


B. Relocation of occupants is not required due to the following circumstances:
    •    Work will not disturb lead-based paint, or involve any lead dust hazard reduction activities.
    •    Work in the interior of the unit will be completed within one period in eight daytime hours, the site will be
         contained, and the work will not create other safety, health, or environmental hazards.
    •    Only the building’s exterior will be treated, the windows, doors, ventilation intakes, and other openings near
         the worksite will be sealed during hazard reduction activities and cleaned afterward; and a leadfree entry will
         be provided.
    •    Treatment will be completed within five calendar days; the work area will be sealed; at the end of each day,
         the area within 10 feet of the containment area will be cleared of debris and cleaned; at the end of each day,
         occupants will have safe access to sleeping areas, bathroom, and kitchen facilities; and treatment will not
         create other safety, health, or environmental hazards.
    •    Occupants are elderly and have signed an Elderly Waiver for Relocation (attached).



Signature of Owner: ___________________________________________                Date: ____________________________


City of ________Representative: _________________________________              Date: _____________________________




Page 2                            Owner-occupied Rehabilitation Guide: Step Nine                            2006 DEED
                                                               Elderly Waiver
 Example                                                       for Relocation


                                                     Note:
                                           (On Agency Letterhead)
The following example certification reflects policies that could he adopled for an elderly waiver provision.
No policy should be adopted without consideration by legal counsel.




I, _____________________________, the undersigned,
      choose to remain in my home while rehabilitation work by {the City of _____________} is being performed.
      choose to relocate to another unit while the work is being performed.

I have made this choice having read and understood the following:
    1.    I am at least 62 years old.
    2.    My home was built before 1978.
    3.    1 have received the pamphlet “Protecting Your Family from Lead in Your Home” and I am aware of the health
          hazards that are posed by lead-based paint.
    4.    1 have been given a description of work that will be done in my home and understand that during the course
          of the work, lead hazards may be created in the work area. These hazards will be fixed before the job is
          considered complete.
    5.    1 may stay in my home but I may not enter the work area while work is being performed.
    6.    1 certify that no children under age six or women of childbearing age currently live in the unit or spend,
          significant amounts of time in the unit.
    7.    1 understand that allowing children under age six or women of childbearing age to visit my home while work
          is being done may pose a risk to their health.
    8.    1 waive rights to all damages. I agree to hold harmless the {the City of _____________} for any damages due
          to lead poisoning that occur on these premises during the course of the work.


Signed:


    Name: ___________________________________________________                  Date: _____________________________

    Name ___________________________________________________                   Date: _____________________________




2006 DEED                               Owner-occupied Rehabilitation Guide: Step Nine                           Page 2
                                                               Notice To
 Example                                                       Proceed


I, the undersigned, hereby authorize the contractor to proceed with work on the property known as
________________________________ within ______ days of the execution of this document. The
property will be available to the contractor to perform the work stated in the Contractor/Owner Contract
between ____ a.m. and ____ p.m., Monday through Friday, unless otherwise specified by the owner. If the
contractor does not begin work within the specified time, the owner may upon proper notification, consider
the property improvement contract to be in default.


 I elect to withhold authorization to proceed until a later date at which time a separate Notice to Proceed
  will be issued.

Signature of Property Owner: ____________________________________            Date: _____________________________


Signature of Agency Staff: ______________________________________            Date: _____________________________




Page 0                           Owner-occupied Rehabilitation Guide: Step Nine                            2006 DEED
                                                              Contractor
  Example                                                  Payment Request


Owner:    ____________________________________________________                  Date: _____________________________

Address: ____________________________________________________                   Contract Amount: ___________________


Contractor: __________________________________________________

Address: ____________________________________________________
         ____________________________________________________

Type of Payment:        Progress         Final

To be completed by Contractor:
I hereby request an inspection to receive payment #________ for the amount of $______________. I certify that
I have satisfactorily completed the necessary work to justify this request and the all bills incurred for labor used and
materials furnished in making said repairs and improvements have been paid in full to this date. See attached cost
breakdown.

Contractor’s Signature: _________________________________________               Date: _____________________________


To be completed by Owner:
I/We hereby agree that the work stated by the contractor has been completed and approve payment to the contractor
in accordance with the Warranty and conditional upon inspection and approval by the Rehabilitation Program. It is
understood that the actual amount disbursed will be based on the findings of that inspection.

Owner’s Signature: ____________________________________________                 Date: _____________________________


To be completed by Rehabilitation Staff:
I hereby certify that all work is completed as indicated on the contractor’s payment request. I hereby request approval
of the payment to the contractor in the amount of $______________.

Rehabilitation Staff Signature: ___________________________________             Date: _____________________________


To be completed by Housing Rehabilitation Program Manager:
I hereby approve payment to the contractor in the amount of $______________.

Manager’s Signature: __________________________________________                 Date: _____________________________




2006 DEED                           Owner-occupied Rehabilitation Guide: Step Nine                                Page 
                                                      Receipt and Waiver of
  Example                                             Mechanic’s Lien Rights


Dated: ______________________, 20_____


The undersigned hereby acknowledges receipt of the sum of $________________


Check One Box Only:

       As partial payment for labor, skill and material furnished and for value received waives all rights which may
        have been acquired by the undersigned to file or record mechanic’s liens against said premises (only for the
        amount paid).

       As payment for all labor, skill and material furnished or to be furnished (except for the sum of
        $____________ retainage or holdback.) and for value received waives all rights which may have been
        acquired by the undersigned to file or record mechanic’s liens against said premises (except for retainage).

       As full and final payment for all labor, skill and material furnished to the following described real property:
        (legal description, street and city address, or project name)
         ________________________________________________________________________________________



The undersigned affirms that all materials furnished have been paid for and all subcontractors paid in full, EXCEPT:
         ________________________________________________________________________________________
         ________________________________________________________________________________________
         ________________________________________________________________________________________


NOTE: If this instrument is executed by a corporation, it must be signed by an officer, and if executed by a partnership,
it must be signed by a partner.


Signature: ___________________________________________________

Name:      ____________________________________________________

Title:     ____________________________________________________

Address: ____________________________________________________

           ____________________________________________________




Page 2                           Owner-occupied Rehabilitation Guide: Step Nine                            2006 DEED
                                                           Rehabilitation
  Example                                             Field Inspection Report


                                                  Note:
A preferred method of demonstrating inspections is to sign and date each item on the Work Write Up as it
is inspected.


Name Of Owner: ______________________________________________                 Project Number: ____________________
Address: ____________________________________________________                 Phone: ____________________________
         ____________________________________________________


Contractor: __________________________________________________                Contract Amount: ___________________


 Interim Inspection     Final Inspection
Inspection #:_________________


Type Of Construction:______________________________________________________________________________
Trades Involved: __________________________________________________________________________________
          ________________________________________________________________________________________


Notes re. corrections required and statement of inspection:




Rehabilitation Advisor: _________________________________________

I hereby certify that I have reviewed the work completed to date with the Rehabilitation Advisor and find it accepted as
described in the approved Work Write-up. The contractor may/may not be paid for: $___________________

Owner:    ____________________________________________________                Date: _____________________________
Owner:    ____________________________________________________                Date: _____________________________



2006 DEED                          Owner-occupied Rehabilitation Guide: Step Nine                              Page 
                                                                  Change
    Example                                                        Order


Name of Owner: ______________________________________________              Project Number: ____________________
Address: ____________________________________________________              Phone: ____________________________
         ____________________________________________________


Contractor: __________________________________________________             Change Order Number: _______________

Description of Change and Justification for Request:




Cost Increase:   $____________     Items:

Cost Decrease:   $____________     Items:

Net Cost Of Change: $____________

Signature of Contractor: ________________________________________          Date: _____________________________

Signature of Rehab Staff: _______________________________________          Date: _____________________________

Signature of Owner(s): _________________________________________           Date: _____________________________


                                For Office Use Only
Original Contract Amount: $                     Sources:




Approved Amendments:                 Total Approved Amendments: $
#          $                         Current Contract Subtotal:     $
#          $                         This Amendment:                $
#          $                         Total with this Amendment:     $

 Approved         Denied

Project Director Signature: ______________________________________         Date: _____________________________
Documents Affected:




Date Changes Made: _______________________



Page                           Owner-occupied Rehabilitation Guide: Step Nine                    2006 DEED
Step Ten: Closing The Case

            Activity:                                         Documents Involved:
Task One    Contractor requests Final Inspection              Field Inspection Report form
            Lead Paint Clearance Test (if applicable)         Lead Paint Clearance Test
Task Two    Contractor signs Payment Request                  Contractor signs:
                                                              • Signed Lien Waiver
                                                              • Sworn Construction Statement
                                                              • Executed Completion Certificatet
                                                              • Contractor Payment Request
            Owner signs off on Payment Request                Owner signs:
                                                              • Completion Certificate
                                                              • Final Payment Request
Task Three Contractor signs a statement regarding             Post-Construction Safe Work Practices
           lead-safe work practices (if appropriate)          Certification form
           Send Hazard Reduction Completion Notice            Hazard Reduction Completion Notice
           (if applicable)                                    Final Inspection documentation
           Final Inspection occurs, payment                   Contractor Payment Request
           withheld if appropriate
Task Four   Pay or reimburse occupants for temporary          Claim for Temporary Relocation Expenses
            relocation expenses
Task Five   Pay contractor from appropriate funding source    Fiscal Tracking Spreadsheet
Task Six    File Lien on Property                             Repayment Agreement or other documents as
            Send owner Close-out Package                      required by program
                                                              Close-out Package:
                                                              • Completion Certificate
                                                              • Copy of Filed Repayment Agreement
                                                              • Customer Satisfaction Survey



The activities and documents listed above are self-explanatory with one exception. Make certain
you have held back enough for the final payment to the contractor until you are satisfied the work
is complete and up to the program specifications. Traditionally, agencies withhold a portion of the
final payment until the Completion Certificate is signed and all items are resolved.




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Ten                         Page 
                                                        Sworn Construction
  Example                                                   Statement


To be signed by all contractors prior to release of the final balance of loan proceeds by Administrators to
contractors.


State of Minnesota

County of:

The undersigned, hereinafter called “Contractor,” being first duly sworn, as Contractor improving the property having
the address of__________________________________________, city of _________________________________,
State of Minnesota, deposes and says that the following are the names of all parties who had or currently have contracts
or subcontracts with the Contractor, for specific portions of the work on said property and building; or had or currently
have contracts or subcontracts with the Contractor for material or who have contributed materials at the Contractor’s
request entering into the construction thereof; and that the items set forth below include all labor and materials
contracted by or obtained at the request of the Contractor required to complete the work according to the Specifications
and drawings of the Contract; that there are no other contracts outstanding entered into by the Contractor or the
Contractor’s subcontractors.
                                                             Furnished by Laborers, Materialmen, or Subcontractors
Items:                                                       retained by the Contractor Identified below:




Subscribed and sworn to before me this _____ day of ______________, 200__.


Notary Public: ________________________________________________


Contractor Name: _____________________________________________

               By: _____________________________________________

               Its: _____________________________________________


Note: Administrators must have obtained lien waivers evidencing payment in full from the contractor,
material providers, and subcontractors set forth above as a condition to releasing the final balance of the
loan proceeds.




Page 6                            Owner-occupied Rehabilitation Guide: Step Ten                            2006 DEED
                                                     Rehabilitation Program
 Example                                             Completion Certificate


Property Owner: ______________________________________________             Project: ___________________________


Address: ____________________________________________________               Progress Payment
         ____________________________________________________               Final Payment


Change Order Summary (if applicable)
Description of Change:                 Original Contract Amount:       $
 Add Dollars                          Change Order Amount:            $
 Subtract Dollars                     Contract Amount to date:
                                       Previous Partial Payments:
                                       Date 1.                         $
                                       Date 2.                         $


Net Change by Change Order:            Amount of Request for Payment: $
$ _____________                        Less Retainage (20%)            $
                                       Total of this Payment:          $
                                       Remaining on Contract:          $


The undersigned hereby certify that the specified improvements pertaining to the above SCDP loan for work covered
under this request for payment have been completed in accordance with the terms of the contract, conform with the
contractor’s warranties set forth in the Contractor/Owner Contract, and have been inspected. The undersigned Owner
further hereby authorizes the Rehabilitation Program to disburse funds in the following amount: $ _____________ on
his/her/their behalf to the Contractor for services for the approved improvements.

Contractor signature:___________________________________________           Date: _____________________________


Owner signature: ______________________________________________            Date: _____________________________


Rehabilitation Staff signature: ___________________________________        Date: _____________________________




2006 DEED                         Owner-occupied Rehabilitation Guide: Step Ten                           Page 
                                                     Post Construction
 Example                                      Safe Work Practices Certification


I, _____________________________, an employee of _____________________________________, certify
             (name)                                                    (contractor or organization)
that we followed safe work practices on ___________________________________________________.
                                                          (address of property)
Items 1A-1D were adhered to, in compliance with Federal, state and local regulations, except in cases where the
work was exempt from safe work practice requirements as described in Item 2.


Check Number 1 or 2


  1.   The following safe work practices were applied as appropriate.
    A. The prohibited work methods listed below were not used.
       • Open flame burning or torching.
       • Machine sanding or grinding without a high-efficiency particulate air (HEPA) local exhaust control.
       • Abrasive blasting or sandblasting without HEPA local exhaust control.
       • Heat guns operating above 1,100 degrees Fahrenheit, or those that that operate high enough to char the
           paint.
       • Dry sanding or dry scraping. (For exceptions to this rule see 24CFR 35.140 (e).)
       • Paint stripping in a poorly ventilated space using a volatile stripper that is a hazardous substance in
           accordance with regulations of the Consumer Product Safety Commission at 16 CFR 1500.3, and/or a
           hazardous chemical in accordance with the Occupational Safety and Health Administration at
           29 CFR 1010. 1200 or 1926.59, as applicable to the work.
    B. Protection of occupants and preparation of the worksite as described below.
       • Occupant Protection
            Occupants were not permitted to enter the worksite during hazard reduction activities until final
                clearance was achieved.
            Occupants were temporarily relocated before and during hazard reduction activities if necessary.
            Dwelling unit and worksite were secured against unauthorized entry, and occupants’ belongings were
                protected from contamination by dust-lead hazards and debris during hazard reduction activities.
            Occupants’ belongings in a containment area were relocated to a secure area outside the containment
                area or covered with appropriate materials.
       • Worksite Preparation
            Worksite was prepared to prevent release of leaded dust and contained lead-based paint chips and
                other debris from hazard reduction activities within the worksite.
            A warning sign was posted at each entry to rooms where hazard reduction activities were conducted
                when occupants were present.
    C. Specialized cleaning after hazard reduction activities including:
       • Used HEPA vacuum cleaners; or other method of equivalent efficacy-, and
       • Lead-specific detergents or equivalents.
    D. Clearance of unit achieved before reoccupancy was permitted.

  2.   Safe work practices and clearance were not required. Activities did not disturb painted surfaces below
        the de minimis thresholds defined below.
        • The maintenance or rehab hazard reduction activities did not disturb painted surfaces that totaled more than:
              20 square feet on exterior surfaces;
              2 square feet in any one interior room or space; or
              10 percent of the total surface area on an interior or exterior type of component with a small surface
                 area (such as windowsills, baseboards, and trim).


Page                            Owner-occupied Rehabilitation Guide: Step Ten                           2006 DEED
                                               Summary Notice of Completion of
  Example                                  Lead-based Paint Hazard Reduction Activity


                  From Federal Register Vol. 64, No. 178 / Wednesday, September 15, 1999 / Rules and Regulations



Address/location of property or structure(s) this notice of presumption applies to:
         ____________________________________________________
         ____________________________________________________
         ____________________________________________________
Summary of the hazard reduction activity:
Start and completion date(s): _________________________________
     _______
Activity locations and types. 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 types of hazard reduction activities performed at the locations listed:




Date(s) of clearance testing and/or soil analyses:: _________________
_______________________
Location of building components with lead-based paint remaining in the rooms, spaces or areas where activities were
conducted:




Summary of results of clearance testing and soil analyses:
 (a) No clearance testing was performed.
 (b) Clearance testing showed clearance was achieved.
 (c) Clearance testing showed clearance was not achieved.

Contact person for more information about the hazard reduction:
Printed Name:
Organization:                                                                  Phone: (          )
Street:
City/State/ZIP:

Person who prepared this summary notice:
Printed Name:
Signature:                                                                     Date:
Organization:                                                                  Phone: (          )
Street:
City/State/ZIP:




2006 DEED                              Owner-occupied Rehabilitation Guide: Step Ten                               Page 
                                                       Claim For Temporary
  Example                                              Relocation Expenses

                                                                  Project Name
Claimant:                                                         or Number:

StreetAddress:                                                    Date of Request:
                                                                  Request
                                                                  Number:
City, State,                                                      Current
Zip Code:                                                         Phone Number:

Have all members of the household moved to the same address? Yes         No 
If “no,” list the other names and addresses:



Address of property you moved from:                        Amount and type of utilities tenant is responsible for paying:
                                                           Gas:
                                                           Electricity:
                                                           Cable TV:
                                                           Water/sewer:
Rent amount tenant is responsible for paying:              Garbage service:
Amount of increased rent agency will pay:                  Other:

Moving Expenses Being Claimed (Itemize and attach receipts or bills)
Moving Costs:                        Payable to:




          Sub-Total $
Storage Costs:                           Payable to:



               Sub-Total $

Housing Costs Being Claimed (Itemize and attach receipts or bills)
Deposits:                              Payable to:



Increased Rent:                          Payable to:

Increased Utilities:                     Payable to:




               Sub-Total $


Page 0                           Owner-occupied Rehabilitation Guide: Step Ten                             2006 DEED
                                                             Claim For Temporary
 Example continued                                           Relocation Expenses

Other Costs Being Claimed If Allowed (Itemize)
Per diem for unit without cooking facilities: Other:
  $_________ per adult                        (attach
  $_________ per child under age 12            explanation)

                 Sub-Total $                                                              Sub-Total $

Comments




Total Claimed:     $                     Signature of Claiment:




                                            TO BE COMPLETED BY AGENCY
                                          Amount          Amount          Date
                 Item:                    Claimed:       Approved:        Paid                Payable To:




                         Total Paid:

 Recommended for Payment by: __________________________________                  Date:___________________________

 Recommended for Payment by: __________________________________                  Date:___________________________




2006 DEED                              Owner-occupied Rehabilitation Guide: Step Ten                        Page 
                                                          Customer Satisfaction
     Example                                                    Survey

You received assistance from our agency during the recent improvements made to your property. We are trying to
provide our residents with the best service possible.
Please complete this survey and return it in the enclosed envelope to: ____________________________________.
Circle the answer the best describes your satisfaction:
1.    How would you rate the accuracy and promptness of information given by our staff before you applied for a
      rehabilitation loan?
           Excellent     Good      Adequate      Poor

2.    How do you rate the service provided by staff during the processing of your application?
           Excellent     Good      Adequate      Poor
      Are there any improvements we should make?



3.    How would you rate the work the contractors did on your property?
           Excellent     Good      Adequate      Poor
      Who was your contractor?
      Would your recommend his/her work to others?         Yes  No      If not, why not?


4.    How would you rate the materials used in your property?
           Excellent     Good      Adequate      Poor

5.    Overall, how do you feel about the rental rehabilitation program?
           Excellent     Good      Adequate      Poor



Comments:




Signature (optional): ___________________________________________




Page 2                             Owner-occupied Rehabilitation Guide: Step Ten                        2006 DEED
                                                                  Closeout
  Example                                                          Letter


                                                        Note:
                                                (On Agency Letterhead)




Date:__________________


Dear:


This letter serves as the official closing statement for your rehabilitation program loan.

The final inspection has been made. The work has been done according to specifications and final payment has been
made. Copies of the Completion Certificate and the Repayment Agreement are enclosed with this letter. A lien waiver
has been received for all disbursements and is on file at ___________________.


Your loan is in the amount of $________________. The money was disbursed to rehabilitate your rental property at:
___________________________.


Please remember that you are required to notify the ____________________________if this property changes owners.
Repayment of the loan is required within 90 days after the property ceases to be owned by the original borrower.


Satisfaction for the work is guaranteed for one year. Please contact me if any problems arise. I can be reached
at __________________________.


Thank you for your participation in the _________________ Rehabilitation program.


Sincerely,



Rehabilitation Administrator




2006 DEED                            Owner-occupied Rehabilitation Guide: Step Ten                            Page 
Page    Owner-occupied Rehabilitation Guide: Step Ten   2006 DEED
Starting Over: Designing Your Program
The liveliest discussions among rehab professionals center on which is best: repayable loans,
deferred loans, or grants? Is there a right answer? Well, it depends on...

Repayable loans? Even elderly widows have some ability to pay, don’t they? Or are the single and
two-parent families most in need of grant funds?

Deferred loans? Will it be a “deal killer” if there is a lien on a property that requires payback when
the title to property passes to heirs?

Grants? It’s easy to give away money, but have you missed an opportunity to assist future frail
widows, or families because you have no program income?

Planning your program design must occur at some point prior to launching the program. Planning
will include four things as part of program design decisions; these are the four things “it depends
on”:

1.   What is your program trying to accomplish?

     What is the condition of the housing stock in the service area? Is your program targeted to
     a special population in need? Are you doing only emergency repairs or using a higher rehab
     standard? Are you trying to assist a whole jurisdiction or just one neighborhood?

2.   What are your sources of funds?

     Do you have access to other funds that can be used for leverage of your Small Cities grant: the
     Minnesota Housing Finance Agency programs, USDA Rural Development and Weatherization
     funds? Do you have local lenders willing to provide funds and/or servicing of loans to low-
     income residents?

3.   What are the needs of your customers?

     Do they have any ability to repay a loan? Are they so conservative that any government
     assistance will be hard to sell? Are they so concerned about leaving their children a debt-free
     house that any lien on the property will be a “deal killer”?

4.   What is the capacity of your staff?

     It’s easiest to write rehab grants, and if you have a two-person operation, you may not have the
     opportunity to anything but a direct grant.




2006 DEED                   Owner-occupied Rehabilitation Guide: Starting Over                Page 
Direct Grants


Public funds are used to make outright grants to property owners to cover the full costs of needed
rehabilitation work. The owner is not required to repay the grant; no lien in attached to the rehabilitated
property.



                   Advantages:                                             Disadvantages:
1    Ease of marketing. You can reach very low           1.   Funds are never recovered.
     income households, particularly elderly,
                                                         2.   The number of households that can be
     without fear of reducing their legacy.
                                                              served is less than if funds were repaid,
2.   Ease of administration. No one needs to                  leveraged, or recovered when property
     service the loan or take action when title is            transferred ownership.
     transferred.
                                                         3.   Some may take advantage and sell the
     If you have a single purpose SCDP grant                  property soon after rehabilitation is
     and there is no on-going administrative                  complete and realize a windfall profit.
     capacity after the program is closed, this
     may be the best option.




Page 6                       Owner-occupied Rehabilitation Guide: Starting Over                   2006 DEED
Deferred Payment Loans


Public funds are used to make deferred payment loans to property owners to cover the full or partial costs
of needed rehabilitation work. No monthly payments are collected, but interest may accrue.
A lien is filed on the property which is usually due and payable upon sale or transfer of the property. A
portion, or all of the loan, may be “forgiven” on an annual basis. For example, a ten year period with 10%
being forgiven each year. Other programs may have a shorter term while others call for a permanent lien,
due and payable whenever the property is sold or title is transferred.

                   Advantages:                                           Disadvantages:
1.   Some funds get repaid that can be used to         1.   There may be no repaid funds if every
     assist other eligible owners.                          owner stays in their property the required
                                                            length of time.
2.   Windfall profits from quick sale of property
     are avoided.                                      2.   If there is repayment, there must be on-
                                                            going staff capacity to handle the proceeds.
3.   Ease of administration. There is no on-going
     servicing responsibilities after lien is filed.   3.   Elderly owners, in particular, may be
                                                            unwilling to participate if they fear it will
4.   SCDP and MHFA funds would be                           jeopardize their primary asset to leave their
     consistently administered.                             children.




2006 DEED                    Owner-occupied Rehabilitation Guide: Starting Over                    Page 
Direct Amortized Loans


Public funds are used to make installment loans to property owners to cover the full or partial cost of
needed rehabilitation. The owner pays a monthly payment that may include interest at a less-than-market
rate. Loans may be serviced by the locality or a lending institution that is participating in the revitalization
effort of the community.
Liens are filed against the property and default on the loan could result in calling the loan.



                    Advantages:                                              Disadvantages:
1.   Funds “revolve” to assist other eligible             1.   Underwriting a loan requires training and
     owners rehabilitate their properties.                     experience to do it well.

2.   It provides on-going sources of                      2.   Servicing responsibilities can be
     administrative funds to pay staff.                        considerable if clients cannot or do not
                                                               repay on time. There needs to be staff
3.   It creates a perception to some that the                  ready and willing to take action to collect
     program is not just a “give-away” and may                 the loan. If word spreads that no one
     have more local support, depending on the                 follows up when payments are missed, the
     community.                                                program will flounder and die.
4.   There is no opportunity for windfall profits         3.   There are some owners with such limited
     from recipients of funds; the obligation                  ability to repay that it is not worth the effort
     may either be assumed if the new owner is                 to set up the package and try to service it.
     eligible, or repaid if the program requires it
     upon transfer or sale.                               4.   It may be difficult to market. Owners will
                                                               participate if it is perceived as a “good
                                                               deal.” When bank interest rates are low, 0%
                                                               loans may be the only attractive option for
                                                               the public agency. When interest rates are
                                                               higher, 1-3% loans from the public sector
                                                               may be attractive to borrowers.




Page                        Owner-occupied Rehabilitation Guide: Starting Over                     2006 DEED
Leveraged Loans


Leveraged loans use a combination of funds, either from a private lending institution, or from other
public sources such as MHFA or Weatherization, to stretch SCDP rehabilitation dollars. SCDP are
used to fund specific eligible improvements and the other sources are used to fund other needed
improvements.
Private funds are usually borrowed at the most favorable market interest rate the agency can
negotiate and repaid by the borrower concurrently with the SCDP loan at a no-interest or lower-
interest rate.
MHFA funds are repaid monthly at the going rate to the servicer (if the program calls for regular
repayment) and the SCDP funds are repaid separately to the administering agency or collected at
time of sale or transfer of the property.


                  Advantages:                                           Disadvantages:
1.   Packages can be structured to fit the needs      1.   It is challenging to secure other sources
     of the owner and SCDP funds can be                    of funds from either the private or public
     stretched to serve more households.                   sector.

2.   On-going income supports other loans and         2.   It will take time and ability to put packages
     staff.                                                together and track the sources and uses to
                                                           the satisfaction of all the funding providers.
3.   Public perception may be that the program
     operates in a “business-like” fashion.           3.   A borrower may default on one loan and not
     Partners, whether public or private, are              the other, causing difficult decisions to be
     sharing in the task of preserving the                 made regarding the remedies.
     community’s housing stock and assisting
     residents.




2006 DEED                   Owner-occupied Rehabilitation Guide: Starting Over                   Page 
Determining Terms and Conditions of Loans

If your agency decided they had the capacity to make and service direct loans that were repaid on a
regular basis, all three applicants described in the Introduction to this Guide could be loaned all or a
portion of their rehabilitation assistance. Things to look at in making this decision are:

•    The amount of funds needs to accomplish your program’s goals,

•    The on-going debts that the family must pay in addition to housing costs,

•    Their credit history, and

•    Their willingness to borrow funds to rehab their home.

Both interest rates and the length of the term have an impact on the amount of monthly payments
the borrower will make. You have the option to make both the interest rate and the term flexible
with SCDP funds to best fit the needs of your customers.

                                              Monthly Payments per $1,000 Borrowed
                    Interest Rate             10 Year Term            15 Year Term            20 Year Term
                    0%                        $8.33                   $5.56                   $4.17
                    1%                        $8.76                   $5.98                   $4.60
                    2%                        $9.20                   $6.44                   $5.06
                    3%                        $9.66                   $6.91                   $5.55
                    4%                        $10.12                  $7.40                   $6.06
                    5%                        $10.61                  $7.91                   $6.60
                    6%                        $11.10                  $8.44                   $7.16
                    Source: HUD Direct Loan Model for Owner-Occupied Rehabilitation in HOME Program



Many experienced rehab administering agencies across the country offer the maximum term of twenty years to eligible
borrowers and adjust the interest rate depending on the income of the borrower. For example, they might provide the
following direct loans:
                    Annual Income                 Monthly Payment              Interest Rate          Term
                    < 30% of median               < $25.00                     0%                     20 years
                    31-50% of median              $50.00                       3%                     20 years
                    51-80% of median              $66.00                       5%                     20 years


You can see from the previous example that many families could borrow up to $10,000, provided their other debts were
not excessive. In looking at credit liabilities, most underwriters use a maximum of 40 percent debt-to income ratio of
total long-term debt, including housing principle, interest, taxes and insurance on the property.




Page 0                           Owner-occupied Rehabilitation Guide: Starting Over                            2006 DEED
Combining Deferred Loans with Repayable Loans

Some Minnesota experienced administrators, along with the localities they serve, have made the
decision to use SCDP funds as a deferred loan and leverage it with other sources that require
repayment, such as MHFA funds.

Some programs use SCDP funds for direct loans with interest for borrowers with the ability to
repay, as well as Deferred Loans with no repayment until the property changes hands. Some have
used a three-level sliding scale based upon family size which is roughly equivalent to 30% of
median, 50% of median and 80% of median. SCDP funds and repayment are adjusted:

•   For the lowest-income families, SCDP Deferred Loans are offered for 90% of the project’s bid
    cost and the family must provide 10% match through private or other public sources.

•   For the next level, SCDP Deferred Loans are offered for 70% of the project’s bid cost; a direct
    loan is offered for 20% of the cost, and the family must have a 10% match from other sources.

•   The top income group can get 50% as a SCDP Deferred Loan, a direct loan of 40% and 10% is
    required as a match from other sources.


Using Equity in the Home as a Factor

Some Grantees uses the equity in the owner’s home as a guide in assessing the maximum deferred
loan. The theory is that everyone is helped, but there will never be so much public investment put
in the property that — if the lien were enforced — there would not be enough money to repay the
SCDP and other liens against the home.

•   In some cases, deferred loans are based on the homeowner’s equity in the property. Equity is
    determined by deducting what is owed on a mortgage or contract for deed from the Estimated
    Market Value (EMV). The EMV is set by the County Assessor’s records, but if the Tax
    Assessor’s figures do not support the loan, an appraisal or letter from a qualified realtor could
    be used.




2006 DEED                   Owner-occupied Rehabilitation Guide: Starting Over                 Page 
Why have private lenders involved?

1.   They can stretch your public rehab funds.

2.   They can provide loan servicing.

3.   They can help with intake and referral.

4.   They can help market your program.

5.   Preserving the community is not just a public sector responsibility.


Why would lenders want to be involved?

1.   There’s money to be made in making loans to low-income households.

2.   There’s local goodwill to be earned through partnerships and publicity.

3.   There’s CRA credits to be earned.


Things to ask lenders:

1.   What is the minimum and maximum loan they will make?

2.   Will they agree to underwriting criteria that fit your objectives?

3.   What fees will they charge and waive?

4.   What is the lowest interest rate they can charge?




Page 2                     Owner-occupied Rehabilitation Guide: Starting Over   2006 DEED
                                               CAUTION
Applicants will take whatever they see is the “best deal around” that meets their needs. If your
program is the first or only source of rehab funds available to low-income residents, it will be the
“best deal around.”
If yours or another agency once offered rehab grants, be aware that you will have a tougher time
selling loans or even deferred loans.
Once you select a program design, be prepared to live with it until close-out.



So what’s the “right design” for your program?

Look back at those four factors that influence the likely success of your design: the goals of the
program, the needs of your customers, the availability of other funds, and your staff capacity.

You must do a windshield or other survey prior to submission to DEED. Look at these surveys
again and keep the condition of the properties and likely program goals in mind as you think about
the next three factors.

Look at any census data for the area your program will serve and talk to people familiar with the
economic conditions of the community. Assess the willingness of the target population to borrow
money to fix their homes.

Call MHFA, the Community Action Agency working in your area, and the Farmers Home office.
Nail down any other funds from the public sector and contact lenders to discuss their role in your
program.

Think about the staff that will operate your program. If you cannot add employees, there may be
someone on the local approval committee with underwriting experience that can train you or help
out.

Once you have assessed these factors, you are in a position to write your next SCDP application.
Good Luck!




2006 DEED                   Owner-occupied Rehabilitation Guide: Starting Over                 Page 
Page    Owner-occupied Rehabilitation Guide: Starting Over   2006 DEED
Index of Example Forms, Letters, Tracking Devices

Example Forms and Letters
Annual Income: 24 CFR, Part 5 .609 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                               33
Bid Award To Successful Bidder .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Seven 107
Bid Package Letter  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Six   95
Bid Summary  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Seven 106
Bid Tally Sheet  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Seven 105
Change Order  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Nine 134
Checking/Savings Account Verification Owner-occupied Housing Rehabilitation  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                                                                                          27
Claim For Temporary Relocation Expenses .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Ten 140
Closeout Letter  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Ten 143
Collaborative Funding Schedule .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Eight 112
Color Selection Chart .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Six       91
Contract Award Procedures  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Seven 104
Contract for Deed Vendor’s Pre-consent Form  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                                   29
Contract for Deed Vendor’s Responsibility  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                            30
Contractor - Owner Contract  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Six                  98
Contractor Application Form .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Two                       9
Contractor Payment Request  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Nine 131
Customer Satisfaction Survey  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Ten 142
Deferred Loan Repayment Agreement Contract-for-Deed  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Eight 118
Determining Thresholds for Training and Lead Hazard Reduction Work Requirements  .  .  .  .  .  .  .  .  .  . Step Four                                                                                                                  71
Elderly Waiverfor Relocation  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Nine 129
Fair Housing Certification  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                 49
Historic Determination National Advisory Council  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Four                                                       67
Home Improvement Loan Application and Interview Notification  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                                                               40
Home Improvement Loan Denial of Assistance: Appeal Procedure  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                                                                     38
Home Improvement Loan Full Application .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                             41
Home ImprovementsDetermination Letter  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Six                                         85
Homeowner Telephone Inquiry  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                            17
Housing Rehabilitation Program Fact Sheet  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Two                                               7
Important Privacy Notice  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                21
Income Computation Worksheet .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                               39
Income Inclusions and Exclusions  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                35
Inspection Report Cover Page  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Four                           63
Instructions For Preparing Bids and Contract Award Information  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Six                                                                            96
Lead-based Paint Statement  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                       48
Lead-safe Housing Rule Checklist For General Compliance Documentation  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                                                                                    47
Lead-Safe Housing Rule Applicability Form  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                               46
Life Estate Owner’s Pre-consent Form .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                      31
Life Estate Owner’s Responsibility .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                               32
Mortgage Verification  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three          26


2006 DEED                                                     Owner-occupied Rehabilitation Guide: Index of Examples                                                                                                           Page 
Example Forms and Letters (continued)
Notice of Home Improvement Loan Denied  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Five                                         77
Notice of Home Improvement Loan Funding  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Five                                           76
Notice of Right of Rescission  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Eight 114
Notice that Lead-based Paint or Lead-based Paint Hazardsare Presumed to be Present .  .  .  .  .  .  .  .  . Step Four                                                                                                               70
Notice To Proceed .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Nine 130
Notification To Unsuccessful Bidder  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Seven 108
Owner-occupied Housing Rehabilitation Program Project Presentation Form  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Five                                                                                               74
Owner Sign-off Sheet  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Six   87
Post Construction Safe Work Practices Certification  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Ten 138
Preconstruction Conference Report .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Nine 127
Preliminary Application  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three          19
Preliminary Application Materials Enclosure Letter  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                                    18
Project Definition Form  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Four          61
Receipt and Waiver of Mechanic’s Lien Rights  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Nine 132
Rehabilitation Field Inspection Report .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Nine 133
Rehabilitation Program Completion Certificate .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Ten 137
Rehabilitation Program Installment Loan Note  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Eight 121
Rehabilitation Standards Compliance Certification  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Six                                                 86
Release of Information .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three         22
Relocation Screening Sheet for Occupant Protection from Lead Hazard Reduction Activities  .  .  .  . Step Nine 128
Repayment Agreement  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Eight 116
Self-help Loan Agreement  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Seven 109
SHPO Review and Comment  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Four                      66
Some Things Owners Should Think About Before Selecting Contractors  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Six                                                                                      92
Summary Notice of Completion of Lead-based Paint Hazard Reduction Activity  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Ten 139
Summary Notice of Lead-based Paint Risk Assessment  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Four                                                                69
Sworn Construction Statement .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Ten 136
The Bid Package Includes:  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Six             93
Truth In Lending Statement  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Eight 115
Verification of Assistance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three             24
Verification of Employment  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                25
Verification of Social Security Income  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                               23
Verification of Title, Current Taxes and Proof of Insurance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                                             28
What To Expect and What Not To Expect From The Home Improvement Program .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                                                                                        45
Work Write-up Cover Sheet  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Six             94
Work Write-up For Bidding Contractors  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Six                               89



Example Tracking Devices
Applicant and Beneficiary Report .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                          54
Application Tracking System Owner-occupied Housing Rehabilitation  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                                                                     50
Checklist for Completeness Owner-occupied Housing Rehabilitation  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three                                                                                   51
Monthly Rehabilitation Progress Report  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . Step Eight                                    53
Rehabilitation Fiscal Tracking Spreadsheet .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .Step Three 113


Page 6                                                     Owner-occupied Rehabilitation Guide: Index of Examples                                                                                                  2006 DEED

								
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