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HomeMy WebLinkAboutNeighborImpact - So Co Financial AsstcCommunity Development Department Planning Division Building Safety Division Environmental Health Division 117 NW Lafayette Avenue Bend Oregon 97701-1925 (541)388-6575 FAX (541)385-1764 http://www.co.deschutes.or.us/cdd/ MEMORANDUM DATE: May 26, 2010 TO: Board of County Commissioners FROM Tom Anderson, Director Laurie Craghead, Assistant Legal Counsel SUBJECT: Proposed Contract with Neighborlmpact for South County Septic Upgrade Financial Assistance Background: Deschutes County ordinance 2008-019 requires that nitrogen reducing septic systems be installed in southern Deschutes County for all new construction, major home expansions, or in situations where the existing septic system has failed. Currently, financial assistance is available through the USDA and Neighborlmpact (NI) to qualifying low and moderate income households to install these systems in the latter case. However, certain households do not qualify for this assistance in certain circumstances, including situations where the property owner is behind on mortgage payments or county tax payments, or in situations of minimal or negative home equity. The Board has previously indicated that they would like to assist this group of property owners through a contract with NI, whereby the county would provide funds for "non -conforming" loans through the regular NI rehabilitation loan program. CDD staff and legal counsel have been working with NI to develop the scope of services associated with this contract, and prior to finalization and final approval, would like to discuss it with the Board to ensure that it covers what is intended and satisfies the Boards direction. Discussion Points: The draft scope of services is attached. Major points include: • $60,000 is obligated to NI to fund the subject loans. Language is included outlining a process for the request of additional funds if needed. • County shall have sign off authority for each loan proposed. • Loan recipients shall be required to attend a workshop on foreclosure prevention and meet with a foreclosure counselor. • An emergency loan review/application process where a system is failing and requires immediate repair. • Quarterly reports to the county on loan activity. • Commitment from NI for matching funds for two years. • A 10% administrative fee paid to NI for each awarded loan. Additional Policy Questions: 1) Should loan recipients also be eligible for the $3,750 loan rebate program for successful installation of nitrogen reducing systems? 2) Should the program be made retroactive to assist property owners who have already installed nitrogen reducing systems through private financing, especially those who may have been disqualified from NI assistance because they may not have been aware that the NI program required loan approval prior to commencement of work? Staff is aware of at least one situation where this occurred where the property owner's system was failing and they felt it was imperative to fix the system immediately. Requested Board Action: Provide feedback on proposed scope of services and direction on policy questions. DRAFT #4 DESCHUTES COUNTY REHABILITATION LOAN - SCOPE OF SERVICES EXHIBIT 1 STATEMENT OF WORK & COMPENSATION PAYMENT TERMS AND SCHEDULE 1. Contractor shall perform the following work: a. Contractor shall provide loans to Clients who have residential mortgages encumbering their primary dwellings and who would not otherwise qualify for Contractor's existing loan program ("Nonconforming Loans"). b. "Client" means any person who owns and resides in a dwelling, as his or her primary residence, located in the areas designated in Exhibit 7, attached and incorporated by reference herein. c. Contractor shall accept and review all applications from Clients, provide funding for those Nonconforming Loans approved by Contractor, and service all Nonconforming Loans. d. Contractor shall pay for the Nonconforming Loans from the grant described in Paragraph 2 below. e. Contractor shall provide clients with Nonconforming Loans to only aid Clients in paying to upgrade existing onsite wastewater treatment systems to nitrogen -reducing systems as required by County ("Upgrade"). f. Contractor shall require any Client who applies for a Nonconforming Loan to provide Contractor documentation of the estimated cost for an Upgrade. g. Except as provided in Paragraph 1.h. below, Contractor shall not provide a Nonconforming Loan for more than the Client's estimated cost for an Upgrade and its installation. h. Contractor may provide a Nonconforming Loan for more than the Client's estimated cost for an Upgra ie and its installation if: 1) Physical characteristics of the Client's property will result in additional cost for installation of the Upgrade; 2) The installation contractor provides written documentation of physical characteristics of the Client property and the estimated additional cost; and 3) Contractor provides County with a copy of the written documentation described in Paragraph 1.h.2), i. Contractor shall not provide a Nonconforming Loan of more than $25,000 per Client. j. Contractor shall apply Contractor's existing Home Rehabilitation Loan Program ("Conforming Loan") rules, attached as Exhibit 8 and incorporated by reference herein, in determining whether a Client shall be awarded a Nonconforming Loan, with the following exceptions: 1) Contractor will consider for approval of a Nonconforming Loan application from Clients who failed to make one or more timely mortgage payment; 2) Contractor will consider for approval Nonconforming Loan applications from Clients whose home equity is insufficient to secure the Nonconforming Loan; 3) For all Clients under Paragraph 1.i.2), Contractor shall not consider any loan to value criteria; 4) Contractor shall require all Clients who apply for a Nonconforming Loan to attend Contractor's Foreclosure Prevention Workshop and to meet with one of Contractor's foreclosure counselors before considering the Nonconforming Loan application for approval; 5) Contractor shall not require a certified general contractor; and 6) The Client may have existing judgment liens attached to the Client's real property. k. Contractor shall expedite the application review and approval upon written notice from County that ar emergency exists for the installation of a Client's upgrade. 1) To the expedite application and review and approval by Contractor, Contractor shall require from client only proof of income and proof that the property on which the Upgrade is to be installed is tie Client's primary residence. 2) Contractor shall complete the expedited review and approval or denial of the application within th -ee (3) days of the Client's submission of the documentation required in Paragraph 1.k.1). 3) If the Client's loan application is approved under this expedited application review and approval, Contractor may provide the loan to the Client from the Nonconforming Loan funds provided by th County in Paragraph 2. 4) Contractor shall require the Client to complete the application for a Conforming Loan as a condition of receiving the expedited approval of the application. 5) If the Client qualifies for the Conforming Loan after installation of the Upgrade, Contractor shall replace the County's Nonconforming Loan funds with funds from the Conforming Loan program. I. Contractor shall provide approximately two to eight Nonconforming Loans during the period of this contract. m. Contractor shall provide a quarterly accounting to the County of all loan applications being reviewed, loans funded and Upgrades installed. n. If the $60, 000 in grant funds described in Paragraph 2.a. are fully utilized before the two-year term of this contract expires, Contractor may request additional grant funds from County. o. Contractor will provide additional Contractor funds to fund loans only for Upgrades to Clients who qua ify for Contractor's existing Conforming Loan program. p. Contractor will provide funds in the amount of up to $60,000 from its Revolving Loan Fund for the Conforming Loans. q. Contractor will provide the Conforming Loan matching funds for two years. 2. County service. County shall provide Contractor, at County's expense, with material and services described as follows: a. County shall provide Contractor with Grant Funds in the amount of $60,000 for Contractor to provide Nonconforming Loans. b. County shall provide Contractor with the completed loan authorization form, attached as Exhibit 9 and incorporated by reference herein, for each Client approved by County for any Nonconforming Loan approval recommended to County by Contractor. c. County may refer to Contractor Clients who may be eligible for either the Nonconforming Loans or Conforming Loans. d. If the $60, 000 in grant funds from the County described in Paragraph 2.a. are fully utilized by Contractor prior to expiration of this contract and Contractor requests additional grant funds, this contract may be amended upon written agreement of Contractor and County to add additional funds for the Nonconforming Loan program. e. When approving an Upgrade installation permit, County will follow all state and county regulations for requiring Upgrade installation contractor certification 3. Consideration. a. County shall pay Contractor a service delivery fee of ten percent (10%) of the Nonconforming Loan amount per Nonconforming Loan awarded to a Client. b. Contractor may deduct the service delivery fee in Paragraph 3.a. from the $60,000 County grant funs described in Paragraph 2.a. c. Contractor shall be entitled to reimbursement for expenses as set forth in Exhibit 5 0 YES C✓[ NO [Check one] 4. The maximum compensation. a. The maximum compensation under this contract, including allowable expenses, is $60,000.00. b. Contractor shall not submit invoices for, and County shall not pay for any amount in excess of the maximum compensation amount set forth above. 1) If this maximum compensation amount is increased by amendment of this contract, the amendment shall be fully effective before contractor performs work subject to the amendment. 2) Contractor shall notify County in writing of the impending expiration of this Contract thirty (30) calendar days prior to the expiration date. 5. Schedule of Performance or Delivery. a. County's obligation to pay depends upon Contractor's delivery or performance in accordance wi°h the schedule listed in Exhibit 1, Paragraph 1. b. County will only pay for completed work that conforms to the terms of the Contract.