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HomeMy WebLinkAboutRES 2023-29RESOLUTION NO. 2023-29 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR APPROVING UPDATED PROGRAM POLICIES FOR THE HOME IMPROVEMENT PROGRAM. WHEREAS, the City of Diamond Bar Home Improvement Program ("HIP") was originally established in 2003 to preserve and enhance residential neighborhoods throughout the City by providing interest -free, deferred loans to eligible owner -occupants of single family detached dwellings for the following purposes: the preservation of safe, decent and sanitary housing; to correct hazardous structural conditions; to make reasonable accommodations for persons with disabilities; to improve the overall exterior appearance of the home; to eliminate an appearance of blight; to provide energy -efficient upgrades; and to correct exterior code violations; WHEREAS, the City desires to update the HIP Program Policies to allow both Community Development Block Grant ("CDBG") and Permanent Local Housing Allocation ("PLHA") monies to be used as funding sources for HIP loans, thereby enabling the City to offer loans to more households and income categories than would otherwise be possible with CDBG monies as the sole funding source; WHEREAS, the City desires to expand the HIP by providing interest -free, deferred loans to eligible owner -occupants of condominium dwellings; WHEREAS, the City desires to increase the maximum loan amount for the Single - Family Home Improvement Program ("SHIP"), inclusive of all fees, from $20,000 to $30,000; and WHEREAS, the City desires to set the maximum loan amount for the Condominium Home Improvement Program ("CHIP"), inclusive of all fees, at $20,000. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Diamond Bar as follows: Section 1. That the updated HIP Program Policies are hereby adopted as shown in Exhibit "A" attached hereto, and supersedes all previous Program Policies. Section 2. That the City Council determines that the proposed action does not constitute a project under the California Environmental Quality Act ("CEQA"), based on Section 15061(b)(3) of the CEQA Guidelines. Section 3. The City Clerk shall attest and certify to the passage and adoption of this Resolution and enter it into the book of original resolutions, and it shall become effective immediately upon its approval. Resolution No. 2023-29 PASSED, APPROVED, AND ADOPTED this 18t" day of July, 2023. CITY OF NIAMOND BAR And ATTEST: Mayor I, Kristina Santana, City Clerk of the City of Diamond Bar, California do hereby certify that the foregoing Resolution was duly and regularly passed, approved and adopted by the City Council of the City of Diamond Bar, California, at its regular meeting held on the 18t" Jay of July, 2023, by the following vote, to wit: AYES: COUNCILMEMBERS: Low, Teng, Tye, MPT/Liu, M/Chou NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None ABSTAIN: COUNCILMEMBERS: None Kristina Santana, City Clerk �a PROGRAM PROGRAM POLICIES CITY OF DIAMOND BAR DEPARTMENT OF COMMUNITY DEVELOPMENT 21825 EAST COPLEY DRIVE DIAMOND BAR, CA 91765 REVISED DRAFT DECEMBER 29, 2008 City of Diamond Bar Community Development Department 21810 Copley Drive Diamond Bar, CA 91765          Program Policies Home Improvement Program ADOPTED BY THE CITY COUNCIL: Resolution No. 2023-29 July 18, 2023 Exhibit “A” Home Improvement Program Policies | July 18, 2023 Page 1 of 17 I. INTRODUCTION AND OVERVIEW A. Purpose and Goal The purpose of the City of Diamond Bar Home Improvement Program (HIP) is to preserve and enhance residential neighborhoods throughout the City by providing interest-free loans to eligible owners of single family detached and attached dwellings for the following purposes: the preservation of safe, decent and sanitary housing; to correct hazardous structural conditions; to make reasonable accommodations for persons with disabilities; to improve the overall exterior appearance of the home; to eliminate an appearance of blight; improve energy efficiency; and to correct exterior code violations. The HIP encompasses two loan categories: 1. The Single-Family Home Improvement Program (SHIP) offers interest-free, deferred loans to income-eligible, owner-occupants of detached, single-family homes, where the owner is responsible for the maintenance of both the exterior and interior of the structure. 2. The Condominium Home Improvement Program (CHIP) offers interest-free, deferred loans to income-eligible, owner-occupants of condominiums, where a homeowners association (HOA) is primarily responsible for exterior structure maintenance. B. Program Objectives Interest-free, deferred loans may be provided to eligible low- and moderate- income households of owner-occupied residences to cover the cost of housing repairs in accordance with the criteria outlined within this program. A loan shall be repaid in full upon the sale or transfer of the home; when the loan recipients no longer occupy the property; when the property is refinanced; or when the loan recipients become owners of any other real property. C. Source of Funds Funds for the Home Improvement Program are administered by the Los Angeles County Development Authority (LACDA) through a subrecipient agreement with the City of Diamond Bar. LACDA acts as an agent for, and receives HIP funding from the following sources: 1. Community Development Block Grant (CDBG) funds made available by the U.S. Department of Housing and Urban Development (HUD). These funds are specifically targeted to benefit households earning no more than the Los Angeles County CDBG Moderate Income limits published by HUD. Home Improvement Program Policies | July 18, 2023 Page 2 of 17 2. Permanent Local Housing Allocation (PLHA) funds collected through State Property Transfer Fees. These funds may be used to benefit households earning up to 150% of the Los Angeles County Area Median Income (AMI) published by the California Department of Housing and Community Development (HCD). PLHA funds allow for a much broader scope of home improvement types and household income categories than CDBG funds. The following restrictions in the use of CDBG funds must be taken into account when determining which funding source to use for a loan:  CDBG funds cannot be used to fund CHIP loans.  CDBG funds cannot be used when issuing loans to households earning more than the CDBG Moderate Income limits. Although CDBG and PLHA funds may be pooled to fund a SHIP loan for a household earning up to the CDBG Moderate Income limit, commingling of funding sources should be avoided to minimize the risk of future accounting errors and audit findings, and in most cases should be unnecessary. D. Denied Applications Applicants who are denied authorization to participate in the City of Diamond Bar’s Home Improvement Program for any reason other than failure to submit a complete application may not reapply for assistance within the following two (2) years after the date of the denial of the application. II. SINGLE-FAMILY HOME IMPROVEMENT LOANS Eligible homeowners may utilize assistance under the deferred loan program. Repeat assistance will be allowed for loans once every five (5) years provided that the balance of all outstanding loans does not exceed the amounts specified below. The City will offer the following home improvement programs to assist low- and moderate-income households with necessary improvements to their residences. Participation in the Single-Family Home Improvement Program is subject to the additional requirements described in Sections IV through VII of these Program Guidelines. Household Income Limit: 80% or 150% of AMI, depending on funding source (see Section I.c above). Minimum Loan Amount: $5,000 Maximum Loan Amount: $30,000 (inclusive of all fees, including hazardous material abatement). Loan Amount Amendment: Applicants who initially elect to obtain a deferred loan in an amount less than the allowable maximum may amend the amount of the loan not to exceed the allowable maximum if such amendment is approved by the Community Development Director. Eligible Properties: Owner-occupied single-family detached residences throughout the City. Home Improvement Program Policies | July 18, 2023 Page 3 of 17 Security: Recorded Trust Deed / Promissory Note. Loan Rate and Term: 0% interest deferred loan payable upon sale, transfer of title or refinancing of any loan in prior position to that of the City; when the loan recipients no longer occupy the property; or when the loan recipients become owners of any other real property. Fees: All Fees associated with the loan such as PIRT Policy and recordation fees shall be added to loan principal. The combined total of the loan and fee amounts shall not exceed the Maximum Loan Amount. Repeat Assistance: Owner Occupied Single-Family Properties – Repeat assistance may be allowed for loans once every five (5) years provided that the balance of all outstanding deferred loans does not exceed $40,000. Equity The total indebtedness or all recorded liens may not exceed ninety-five (95%) of the fair market value of the home after rehabilitation. Special Requirements: Home Improvement Program loans must be recorded against the property in first or second position only. Exceptions will be reviewed on a case by case basis. Eligible Improvements: Correction of hazardous structural conditions; modifications necessary to provide reasonable accommodations for persons with disabilities; improvements to the overall exterior appearance of the home; elimination of an appearance of blight; correction of exterior code violations; energy-efficient fixtures and system upgrades; and other eligible exterior and interior improvements. See Section V for a more detailed explanation of eligible and noneligible improvements, as well as the order of priority for eligible improvements. III. CONDOMINIUM HOME IMPROVEMENT LOANS Eligible condominium owners may utilize assistance under the deferred loan program. Repeat assistance will be allowed for loans once every five (5) years provided that the balance of all outstanding loans may not exceed $30,000, subject to the availability of PLHA funds. The City will offer the following home improvement programs to assist low- and moderate-income households with necessary improvements to their residences. Participation in the Condominium Home Improvement Program is subject to the additional requirements described in Sections IV through VII of these Program Guidelines. Household Income Limit: 150% of area median household income. Minimum Loan Amount: $5,000 Maximum Loan Amount: $20,000 (inclusive of all fees, including hazardous material abatement). Home Improvement Program Policies | July 18, 2023 Page 4 of 17 Loan Amount Amendment: Applicants who initially elect to obtain a deferred loan in an amount less than the allowable maximum may amend the amount of the loan not to exceed the allowable maximum if such amendment is approved by the Community Development Director. Eligible Properties: Owner-occupied condominium residences throughout the City. Security: Recorded Trust Deed / Promissory Note. Loan Rate and Term: 0% interest deferred loan payable upon sale, transfer of title or refinancing of any loan in prior position to that of the City; when the loan recipients no longer occupy the property; or when the loan recipients become owners of any other real property. Fees: All Fees associated with the loan such as PIRT Policy and recordation fees shall be added to loan principal. The combined total of the loan and fee amounts shall not exceed the Maximum Loan Amount. Repeat Assistance: Repeat assistance may be allowed for loans once every five (5) years provided that the balance of all outstanding deferred loans does not exceed $30,000, subject to the availability of PLHA funds. Equity The total indebtedness or all recorded liens may not exceed ninety-five (95%) of the fair market value of the home after rehabilitation. Special Requirements: Home Improvement Program loans must be recorded against the property in first or second position only. Exceptions will be reviewed on a case-by-case basis. Eligible Improvements: Interior modifications necessary to provide reasonable accommodations for persons with disabilities; electrical, plumbing and mechanical system repairs and replacement that are not the responsibility of the HOA; window replacements; energy-efficient fixtures and system upgrades; and other interior improvements that are not the responsibility of the HOA. See Section VI for a more detailed explanation of eligible and noneligible improvements, as well as the order of priority for eligible improvements. IV. APPLICATION SUBMITTAL PROCESS A. Pre-Screening Prior to preparing a Home Improvement Program deferred loan application, prospective applicants are encouraged to first contact the City of Diamond Bar Community Development Department to determine, to the extent possible, if they meet basic eligibility requirements. Home Improvement Program Policies | July 18, 2023 Page 5 of 17 B. Interest List The City will maintain a list of potential applicants interested in participation in the HIP program. The interest list order shall be based on the chronological date and time of initial contact, and shall be served on a first-come, first-served basis. C. Application The Home Improvement Program Administrator will contact potential applicants on the interest list in order as funding becomes available. After verifying that the homeowner still meets the basic eligibility requirements, the HIP Program Administrator will forward an application. The application will include the following materials: 1. General Qualifications and Conditions Form 2. Items Required for Submission List 3. Program Application 4. Lead Based Paint Pamphlet 5. Lead Based Paint Notification 6. Hazardous Materials Inspection Notice 7. Asbestos in Your Home Pamphlet 8. Confirmation of Receipt (Hazardous Materials Transmittals) Completed applications and required supporting documents should be submitted directly to the Community Development Department located at Diamond Bar City Hall. Applications will be reviewed in the order in which they are received. V. ELIGIBILITY CRITERIA A. Applicant Eligibility Requirements For CDBG-funded loans, applicant eligibility is established by Federal Law set forth in the Code of Federal Regulations 24CFR Part 5 and as interpreted by LACDA. For PLHA-funded loans, applicant eligibility is established by the California Department of Housing and Community Development (HCD) PLHA Guidelines. The City will require documentation of both household size and household income information in order to determine applicant eligibility. 1. Household Income a. CDBG-Funded Loans: Adjusted gross annual household income may not exceed the Los Angeles County CDBG Moderate Income limits published by HUD. b. PLHA-Funded Loans: Adjusted gross annual household income may not exceed 150% of Los Angeles County AMI adjusted for family size as provided by HCD. This income limit is based on HCD’s determination that the HIP promotes the rehabilitation and preservation of ownership housing’s Home Improvement Program Policies | July 18, 2023 Page 6 of 17 classification as an Eligible Activity pursuant to HCD’s 2019 PLHA Final Guidelines.1 c. Definition of Household: For the purposes of determining Program eligibility, “household” means a person or persons occupying a dwelling unit as the principal place of residence. d. Definition of Annual Income: For the purposes of determining Program eligibility, annual income shall be defined as the total household income received from all sources by an individual or family, including the head of household, spouse, and each additional adult member of the household who has earned or received income during a 12-month period prior to their application for services. 2. Income Subject to Review Income determinations are subject to the submission and verification requirements of the City of Diamond Bar, and are subject to changes based on the programmatic requirements of LACDA and the CDBG Program. The City of Diamond Bar will make the final decision in situations where the classification of income is disputed. Failure to disclose or adequately document all sources of income will result in an automatic denial of the application for assistance. Reported income must include, but not be limited to, the following: a. Personal Service Income, including the full amount of all earnings, before any payroll deductions of wages and/or salaries, overtime pay, commissions, fees, tips, bonuses, and other compensation for personal services. b. Business or Professional Service Income, including net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness must not be used as deductions in determining net income. Any withdrawal of cash or assets from the operation of a business or profession will be considered income, except to the extent the withdrawal is a reimbursement of cash or assets invested in the operation by the family. 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. c. Interest and Dividend Income, including 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 a deduction in determining net income. An allowance for depreciation is permitted only as authorized in Section 2, above. Any withdrawal of cash or assets from 1 Section 301(a)(2) of HCD’s 2019 PLHA Final Guidelines states that Eligible Activities include “(t)he predevelopment, development, acquisition, rehabilitation, and preservation of Affordable rental and ownership housing…that meets the needs of a growing workforce earning up to 120 percent of AMI, or 150 percent of AMI in high-cost areas.” Home Improvement Program Policies | July 18, 2023 Page 7 of 17 an investment will be included as part of net 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 rates as determined by HUD. d. Payments in Lieu of Earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except for lump-sum payments described in Income Exempt from Review - Section 2, [Income Exempt from Review] below). e. Periodic Payments, including the full amount of periodic payments received from social security, annuities, insurance policies, retirement, pensions, disability or death benefits and other similar types of periodic receipts, including a lump-sum payment for the delayed start of a periodic payment. f. Periodic and Determinable Allowance, such as alimony and child support payments, and regular contributions of gifts received from persons not residing in the dwelling. g. Welfare Assistance, including the amount of welfare allowance or grant, but excluding any funds specifically designed for shelter and utilities that are subject to adjustment by the welfare assistance agency (in accordance with the actual cost of shelter and utilities). h. Armed Forces Income, including all regular pay, special pay and allowances of a member of the Armed Forces (but exempting armed forces special pay described in Income Exempt from Review - Section 6, [Income Exempt from Review] below). i. Tax Credits, including any earned income tax credit to the extent it exceeds income tax liability. 3. Income Exempt from Review The calculation of annual income shall not include the following: a. Income from Children, including income from the employment of children (including foster children) under the age of 18 years, or payments received for the care of foster children. b. Lump-Sum Payments, including additions to family assets, such as inheritances, insurance payments (e.g., health and accident insurance, and worker's compensation), capital gains and settlement for personal or property losses (see Income Eligible for Review - Sections 4 and 5, [Income Eligible for Review] above, for income that should be included). c. Reimbursement for Medical Costs, including all payments received by the family that are specifically for or in reimbursement of medical expenses for any family member. d. Live-in Aide Income, including the income of a live-in aide employed because of a medical condition of a family member. Home Improvement Program Policies | July 18, 2023 Page 8 of 17 e. Education Payments, including educational scholarships paid directly to the student or to the educational institution, and Government funds paid to a veteran for tuition fees, books, equipment, materials, supplies, transportation and miscellaneous personal expenses of the student. Any amount of such scholarship or payment to a veteran not used for the above purposes that is available for subsistence is to be included in income. f. Armed Forces (Special Pay), special pay to a family member serving in the Armed Forces, exposed to hostile fire. g. Government Program Payments, including the following: (1) HUD Funded: Amounts received under training programs funded by HUD. (2) Disabled Person Income: Amounts received by a disabled person that are disregarded for a limited time for purposes of Supplemental Security Income (SSI) eligibility and benefits, because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS). (3) Public Program Assistance: Amount 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 made solely to allow participation in a specific program. (4) Federal Statue Exempt Income: Amounts specifically excluded by any other Federal statue from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under the U.S. Housing Act of 1937. h. Temporary Income, considered temporary, nonrecurring or sporadic in nature (including gifts). 4. Ownership of Real Property other than Primary Residence Ownership of rental property or other real estate holdings other than the owner’s primary residence is prohibited and will result in the rejection of an application for assistance. B. Property Eligibility Requirements In accordance with the requirements of Section IV.A. (Applicant Eligibility Requirements) above, following determination of homeowner eligibility, the owner must demonstrate property eligibility. To be eligible to receive program assistance, real property will be evaluated and must meet each of the requirements set forth below: 1. Location and Type of Property The property must be located within the corporate boundaries of the City of Diamond Bar, and consist of one of the following two development types: a. A legally-recorded parcel with one detached single-family dwelling. Home Improvement Program Policies | July 18, 2023 Page 9 of 17 b. A condominium unit located within a common-interest subdivision. 2. Condition a. Single-Family Detached dwellings: The property must be in need of repairs to (i) correct existing nonconforming development standards, (ii) correct existing nonconforming local and/or state code requirements, (iii) correct existing local and/or state code violations, (iv) protect the structural integrity of the dwelling, (v) promote neighborhood preservation and safety, (vi) refurbish exterior and/or eligible interior improvements (necessary for health and safety), or (vii) aid the mobility of the physically disabled and/or elderly. All repairs must qualify as eligible repairs as defined in Section V and as may be approved by LACDA. b. Condominiums: Eligible repairs to the dwelling unit, including its attached garage, are limited to those that fall within the sole maintenance responsibilities of its owner, and are necessary for health, safety and decent living conditions. Repairs or maintenance to portions of the structure that are the responsibility of the HOA (e.g., roofing, stucco, exterior stairs, centralized water heating, etc.) do not qualify for CHIP funding. Note: Existing City code violations that represent health and safety or hazardous conditions may be resolved using Home Improvement Program (HIP) funds. Any noneligible code violation must be resolved by the homeowner. 3. Ownership and Owner-Occupancy Requirements The income eligible homeowner(s) must hold record fee simple title to the property, and must occupy the property as a principal residence. The City will not approve home improvement projects for homes listed for sale. 4. Length of Ownership The income eligible homeowner(s) must have owned the eligible property for a minimum of one (1) year at the time of application. 5. Equity The total indebtedness of all recorded liens, including the City’s Home Improvement Program loan, may not exceed ninety-five percent (95%) of the fair market value of the home after rehabilitation. For the purposes of this calculation, encumbrances must include the proposed principal amount of the Program loan requested by the eligible owner. 6. Hazard Insurance All properties must be insured with an all-risk property insurance policy in an amount equal to the full replacement value of all structures located on the property. Furthermore, all properties located within the 100-year floodplain that receive assistance under the Program must maintain flood insurance in the amount of the improvements for the term of the loan. For condominiums, this requirement may be satisfied by a combination of individual and HOA insurance policies. Home Improvement Program Policies | July 18, 2023 Page 10 of 17 7. Property/Income Tax Delinquency or Liens All property taxes and assessments must be paid current, and the property must not have any recorded property or income tax liens. 8. Outstanding Judgments and Obligations All outstanding mortgages recorded against the subject property must be current. Furthermore, outstanding tax liens, mechanics liens and/or judgments recorded against the property to be rehabilitated must be paid prior to participating in the program unless waived by the Home Improvement Screening Committee. 9. HOA Approval For improvements requiring HOA approval (such as window and door replacements), the homeowner shall apply for and obtain such approval, and provide the City with proof of approval prior to Screening Committee review. VI. ELIGIBLE & NONELIGIBLE IMPROVEMENTS A. Order of Priorities for Eligible Improvements The following order of priorities will apply to all eligible improvements made using the City’s Home Improvement Program funds. All improvements listed within any given priority category must be addressed prior to the inclusion of items identified as having a lower priority. 1. Mandatory Improvements: Mandatory improvements including those needed to alleviate conditions that present an immediate threat to the health and safety of the property’s occupants and those needed to correct existing hazardous building, zoning and public nuisance code violations. 2. Exterior Improvements: Improvements needed to repair or replace hazardous, broken, damaged and/or deteriorated elements of the main dwelling. 3. Lead Based Paint Improvements: Lead based paint improvements as required by the U.S. Department of Housing and Urban Development. B. Eligible Improvements All eligible improvements must be physically located on the subject property or be permanently attached to the subject dwelling unit. Following an inspection of the subject property in accordance with Program requirements, the City’s Screening Committee must approve: 1) applicant eligibility; and 2) the scope, type and nature of the proposed improvements. All eligible rehabilitation work must be accomplished by qualified, licensed, and insured contractors selected in accordance with Program Implementation Procedures. Home Improvement Program Policies | July 18, 2023 Page 11 of 17 The City’s Home Improvement Program is designed to provide for the repair, and if necessary, the replacement of hazardous, damaged, deteriorated or failing items located on an eligible property. In the event that the replacement of damaged, deteriorated or failing items is necessary, the replacement items shall be in-kind or like-priced material. Luxury quality items will not be used in making necessary repairs. The program is not designed to provide for the upgrade of dwellings. Some eligible improvements are subject to material allowances. A description of all applicable cost allowances will be provided to the applicant if requested. A listing and description of all eligible improvements, including item-specific restrictions (if applicable) is provided below: 1. Abatement of Code Violations: All work including but not limited to demolition, construction, rehabilitation, replacement (subject to program restrictions), and installation needed to abate hazardous violations of the City codes. 2. Accessibility Modifications: All modifications, alterations, or additions necessary to facilitate access and use of the dwelling by disabled persons are permitted. These may include the installation of handicap ramps, grab bars, and accessible shower enclosures; the modification of doorways, hallways, countertop elevations; and other adaptive measures. 3. Deadbolt Locks: Installation of single cylinder deadbolt locks is required on all entry doors. 4. Doors/Windows/Screens: Repair and replacement of worn or damaged exterior doors, windows, or screens is permitted with those of similar type and/or quality. Enlargement of door/window openings is permitted only where the existing door/window area is non-compliant with current building codes, and only to the extent needed to achieve building code compliance. 5. Electrical: Repair and upgrading of electrical system, if required by the current adopted Electrical Code, including service panels, wiring, outlets, and switches. 6. Energy Conservation: Installation or replacement of insulation, weather stripping, water heater, and attic ventilators. Installation of energy efficient doors and windows is allowable provided that the conditions outlined under Doors/Windows are met. Other energy conservation measures or equipment as may be approved by the LACDA may be installed. 7. Garage Doors: The repair or replacement of garage doors, including the replacement of inoperable garage door openers and broken springs is eligible, provided that the repair is incidental to the overall cost of rehabilitation to the property. 8. HVAC Systems: Repair or replacement of failed, failing, damaged or inoperative existing integral HVAC system components including furnaces, air conditioning compressors, forced air units, heat pumps, ducts and vents is permitted. The installation of new air conditioning equipment is not permitted except in cases where medically necessary as prescribed by a doctor. The installation or repair of window air conditioners is not permitted. Home Improvement Program Policies | July 18, 2023 Page 12 of 17 9. Rear or Side-Yard Slope Landscaping (as a hazardous soil erosion mitigation measure): The replacement of dead sod, trees, shrubs and ground cover (other than sod) is permitted on rear and side-yard slopes having an incline of at least 10:1. The subject yard areas must be adjacent to or visible from public rights-of-way. The scope and nature of the permitted slope landscaping will be only that necessary to eliminate the hazard and meet minimum municipal code requirements provided that the cost for such improvements does not exceed $500. 10. Overgrown/Dead Vegetation: Only the trimming of overgrown vegetation and the removal of dead vegetation that is documented as a hazardous condition or an impediment to the rehabilitation activity is permitted. Dead vegetation, other than sod, that is removed may not be replaced. 11. Painting (exterior): Exterior painting is eligible and must be undertaken if the current condition represents a violation of adopted Codes as determined by the City. All painting must comply with the Lead Based Paint requirements of the U.S. Department of Housing and Urban Development. 12. Termite/Pest Control: Eradication of insect infestations and repairs to elements of the dwelling damaged by insect infestation is permitted. 13. Plastering, siding, and stucco: Repairs (e.g. patching, filling or localized replacement) to damaged plaster, stucco or siding is permitted. 14. Plumbing/Sewer Pipes and Fixtures: Repair or replacement of leaking or damaged water/sewer pipes and fixtures (including toilets, bathtubs, shower enclosures, faucets and garbage disposals) is permitted only to the extent necessary to address health and safety considerations. 15. Property Clean-up: The removal of overgrown vegetation, trash and debris located on the subject property is permitted only when necessary to eliminate documented hazardous or health and safety conditions, or when incidentally required for the performance of other rehabilitation activities. Removal of excessive debris and trash from the inside of the home is permitted only where the homeowner(s) is/are physically incapable of completing such work and when necessary to eliminate hazardous conditions. Appropriate documentation of these circumstances must be maintained in the project file. Applicants shall sell, donate, or arrange for removal by a licensed and bonded salvage company, any inoperative vehicle that is not stored within an enclosed garage. 16. Roofing: Complete repair or replacement of deteriorated or damaged roofing of the main dwelling is permitted. Materials of the same type and quality as the existing roof must be used (i.e. composition shingle must be replaced by composition shingle) except where 1) different roofing materials are needed to match the type and quality of roofs found on a majority of homes in the immediate neighborhood, or 2) if the existing roof is made of wood shake a light weight tile roof may be installed to meet code requirements. Roof replacements that require an engineering survey or engineered structural modifications are not permitted. The repair or replacement of patio roofs is not permitted. Home Improvement Program Policies | July 18, 2023 Page 13 of 17 17. Smoke Detectors: Smoke detectors must be installed throughout the home as required by adopted building codes. 18. Ground-Fault Circuit-Interrupter Protection (GFCI): GFCIs must be installed in all locations as required under the California Electrical Code. 19. Structural Repairs/Modifications: Structural repairs/modifications are permitted to the extent that such repairs/modifications 1) correct existing structural deficiencies as defined by the California Building Code; and/or 2) provide accessibility for disabled persons. 20. Water Heaters: Repair or replacement of deteriorated or inoperable water heaters including the repair or installation of enclosures, insulation blankets, earthquake strapping and/or pressure release valves is permitted. 21. Lead Based Paint (LBP) Testing and Treatment/Abatement: The performance of required LBP testing and clearance, and the treatment and/or abatement of lead based paint are permitted. 22. Asbestos Testing and Abatement: The performance of required Asbestos testing, and the abatement of asbestos hazards is permitted. C. Noneligible Improvements 1. Common-Interest Portions of Buildings: Structural, mechanical, electrical and plumbing systems, including those listed in Section V.B. above, that fall within the repair and maintenance responsibilities of the HOA are noneligible for funding. 2. Accessory Buildings and Structures: Rehabilitation to areas not considered in the square footage of a housing unit is generally considered a noneligible HIP rehabilitation activity. Rehabilitation of accessory buildings and structures including but not limited to: patios, enclosed patios, decks, porches, sheds, greenhouses, barbecue pits, outdoor fireplaces, bathhouses, swimming pools, saunas, hot tubs, and similar buildings or structures is a noneligible activity. However, if a hazardous condition exists in one of the aforementioned areas, the City may use HIP funds to demolish the structure. Such hazardous condition must be remedied prior to the commencement of any eligible rehabilitation work. 3. Accessory Dwelling Units (ADUs): The HIP program shall not be used to rehabilitate ADUs of any type, including, but not limited to, attached ADUs, detached ADUs and Junior ADUs (i.e., ADUs located within the walls of the main dwelling, garage or accessory structure). 4. Non-Permanent Attachments: The removal, replacement or rehabilitation of valances, cornice boards, drapes, blinds, and indoor or outdoor furnishings is a noneligible activity; 5. Unauthorized Improvements: Any rehabilitation activity not approved by the City is noneligible. Home Improvement Program Policies | July 18, 2023 Page 14 of 17 VII. ELIGIBLE & NONELIGIBLE COSTS A. Eligible Costs. Home Improvement Program funds may only be used for the actual reasonable cost of materials and services necessary to complete all rehabilitation work approved by the City as set forth in the approved Scope of Work, and additional costs, as follows: 1. Permits: Building permits and inspection and other related fees necessary for the completion of the approved rehabilitation work; 2. Processing Costs: Costs of loan processing, including without limitation, credit reports, property appraisals, and if necessary, preliminary title reports and recording fees. B. Noneligible Costs. Specific costs not eligible for payment under the Home Improvement Program include, but are not limited to the following: 1. Luxury Materials: Materials, fixtures, or equipment of a type or quality that exceeds that customarily used in properties of the same general use as the property to be rehabilitated; 2. Furnishings: Purchase, installation or repair of interior or exterior home furnishings; 3. Personal Labor Costs: Compensation/reimbursement of owner’s personal labor; 4. Unauthorized Costs: Compensation/reimbursement for noneligible improvements or any work not included and authorized in the City approved Contractor Agreement or subsequent City approved change orders. 5. Prior Work Costs: Any repair work not listed as eligible in this Program and any work contractually entered into prior to approval by the City. VIII. TERMS AND CONDITIONS OF PROGRAM ASSISTANCE A. Maintenance/Occupancy Requirements Assisted properties shall be maintained in compliance with all City of Diamond Bar Municipal Codes and ordinances. Assisted properties shall maintain occupancy not to exceed the maximum occupancy limits as established by HUD. Property owners shall not permit criminal activities to occur on the property; permit property improvements to suffer deterioration or decline; or maintain, cause or permit to be maintained, any public nuisance on the subject property. Failure to adhere to these terms and conditions shall be grounds for the City to demand immediate repayment of the HIP loan. B. Hazard Insurance Home Improvement Program Policies | July 18, 2023 Page 15 of 17 Property owners receiving HIP Program loan assistance shall maintain, throughout the term of the loan, an all-risk property insurance policy, including flood insurance if the property is located in a flood zone, insuring the property in an amount equal to the full replacement value of the structures on the property. The insurance policy or policies shall name the City of Diamond Bar as an additionally insured/loss payee. Documentation shall be provided in a manner approved by the City Attorney. C. Nondiscrimination There shall be no discrimination against or segregation of any person or group of persons in accordance with Executive Order 11246, Title VI of the Civil Rights Act of 1964, Section 109, Title I of the Housing and Community Development Act of 1974, Age Discrimination Act of 1975, and Section 504 of the Rehabilitation Act of 1973, in the selection of contractors or subcontractors to complete the rehabilitation work financed with Program assistance, or in the sale, leasing, transferring, use, occupancy, tenure, or enjoyment of assisted properties. D. Compliance with Program Policies and Procedures Throughout the applicable term of Program assistance, Program participants shall comply with all Program requirements and procedures as set forth in these Policies and Procedures and as required by the City and as set forth in Grant and Loan agreements and related attachments. Any misstatements, omissions, misrepresentations, deletions, falsifications, or other willful actions taken by a Program participant to wrongfully obtain a CHIP or SHIP loan will result in the immediate cancellation of the Program participant’s application, and cause any disbursed funds to become immediately due and payable, plus the interest that would have accrued from the date that the funds were disbursed, at the market mortgage interest rate in effect on the date that the funds were disbursed, and may cause further legal action to be taken, and permanently disqualify the Program participant from the Diamond Bar Home Improvement Program. IX. GUIDELINE & COST AMENDMENT PROCEDURES A. Amendment - Program Guidelines. The Diamond Bar City Council must approve all amendments to these Home Improvement Program Guidelines. B. Emergency Project Funding Modification. 1. Health & Safety Discoveries: After the rehabilitation construction work has commenced and the contractor discovers health and safety problems, as defined by the California Building Codes, that were not included in the initial Scope of Work the following procedures shall be implemented: a. The property owner may request that the Deferred Loan be increased to cover the cost of the correction of health and safety issues only; and b. The contractor shall prepare a written Change Order Request specifying the scope, nature and cost of the work necessary to correct the unforeseen health and safety issues. In no event shall the Change Order Request be Home Improvement Program Policies | July 18, 2023 Page 16 of 17 of an amount that would cause the total Deferred Loan to exceed the maximum amounts set forth in Sections II and III. c. The written Change Order Request shall be submitted to the property owner for review and approval. d. Upon receiving property owner approval, the City Project Coordinator shall review the cost reasonableness of the proposed changes. The City Project Coordinator must review the original Scope of Work to determine if it can be modified in order to provide the funds necessary to cover the cost of the remediation of the newly discovered health and safety issues. If costs are deemed reasonable and if sufficient funding can be provided via modification to existing contracted improvements, a formal contract change order will be prepared and the required signatures of the contractor and property owner shall be obtained. e. If in the judgment of the City Project Coordinator the newly identified health and safety issues are critical to maintaining the habitability of the subject residence and the original Scope of Work cannot be adequately modified to make available the funds needed to cover the cost of the expanded scope of work, a recommendation to increase the amount of the Deferred Loan may be submitted to the City’s Home Improvement Screening Committee for consideration. The total Deferred Loan amount, with the Change Order added in, shall not exceed the maximum amounts set forth in Sections II and III. 2. Screening Committee Review & Recommendation: The City of Diamond Bar Home Improvement Screening Committee shall review all facts relating to the property owner’s request for an increase in the amount of the Deferred Loan. If in the judgment of the Screening Committee an increase in the Deferred Loan is warranted, it may recommend to the City Manager that the maximum amount of the Deferred Loan be increased by an amount not to exceed $5,000 provided that it finds that all of the following circumstances apply: a. Additional work is essential to return the subject rehabilitated residence to a habitable condition and the original Scope of Work cannot be modified to provide the funds needed to pay for the cost of the newly identified health and safety issues; and b. The property owner has or is willing to execute the necessary documents to increase the amount of the Deferred Loan; and c. The required additional work is the result of unforeseen circumstances not apparent during the preparation of the initial Scope of Work; and d. The required additional work is required to address health and safety issues; and e. The property owner has provided written acknowledgement that he or she shall assume the responsibility to pay for the cost of work that exceeds the amount of rehabilitation assistance provided by the City. X. AUTHORITY TO ADMINISTER Home Improvement Program Policies | July 18, 2023 Page 17 of 17 The City Manager or their designee shall have the authority to administer this Home Improvement Program inclusive of the establishment, maintenance and modification of appropriate implementation procedures. All program legal documents shall be approved as to form by the City Attorney prior to use.