Development In Bangor

Community Development: Residential Rehab Loans
 

RESIDENTAL REHABILITATION LOAN PROGRAM

This program is designed to (1) provide low interest financial assistance for necessary improvements to residential property owned or occupied by low/moderate income persons, (2) eliminate code violations in existing housing resulting in safe and sanitary living conditions, (3) implement and encourage energy efficient improvements, (4) ELIMINATE LEAD BASED PAINT HAZARDS, and (5) prevent the decline and deterioration of older neighborhoods.  Such decline results in an erosion of the tax base, a loss of investment equity by owners, and requires more extensive and expensive future remedial action on the part of the homeowner. The preservation of housing stock is one of the primary objectives of citizens, City Council, and staff professionals who believe that the quality of housing is a primary source of neighborhood stability.

Construction project management is done by the Rehabilitation Specialist; however, this may be done in conjunction with the owner if he/she is technically capable.  Progress payments from the Community Development Escrow account are typically released at each 25% of completed work, less a 10% retainer until the project is completed.  All contractors must be approved by the Rehabilitation Specialist and must show evidence of insurance, certification of State of Maine approved training in “Lead Safe Work Practices,"  and the competence necessary to complete the specified work in a professional and timely manner.

For owners who would like to accomplish some or all of the actual work themselves (self-help), the Rehabilitation Specialist will evaluate whether the owner has the time to complete the work and the financial and technical ability to do the work.  As with contracted work, self-help work will only be paid for from the escrow account after the work has been completed and only for the materials used.

 RENT  REGULATION  AGREEMENT

In structures containing rental units not receiving HUD Section 8 rental assistance, the borrower must enter into a Rent Regulatory Agreement pertaining to those units assisted under the program.  The Rent Regulatory Agreement assures the low/moderate income tenant of an affordable rent for a period of four years, thus avoiding displacement due to the cost of property improvements.  Following are some key provisions of the Agreement:

 1.  The unit rent shall not increase for one year after loan  closing.

 2.  After the first year, an annual increase of a maximum of 5% of the monthly contract  rent is permitted. Then, in addition to the 5% increase, rents may be increased for the following reasons: (a) additional debt service incurred as a result of improvements to the property, and (b) increases in property taxes and owner-paid utility costs.  Any increase in rent for (a) and (b) above shall be pro-rated between all of the units.

The Rent Regulatory Agreement is meant to prevent tenants from having to move due to excessive rent increases while allowing reasonable increases for the owners to recover their operating costs.  The Fair Market Rents for the Bangor area, as published in the Federal Register by HUD, are used as rental comparisons.  The owners retain all other rights under Maine law pertaining to landlord/tenant relations.  This Rent Regulatory Agreement is effective for four years.

LEAD BASED PAINT HAZARDS

In accordance with the HUD Lead-Based Paint Regulation (24 CFR Part 35), housing built before 1978 that is financially assisted by the Federal government is subject to requirements that will control lead-based paint hazards.  This does not necessarily mean complete removal of lead based paint.  At the very least, we will stabilize any deteriorated paint, including correction of moisture leaks or other obvious causes of paint deterioration, and conduct a clearance examination following such stabilization activities to ensure that the work has been completed, that dust, paint chips and other debris have been satisfactorily cleaned up, and that settled dust has low levels of lead.  As necessary, we will conduct a risk assessment to identify lead-based paint hazards, perform interim control measures to eliminate any hazards that are identified, or, in lieu of a risk assessment, perform standard treatments throughout a unit.  A clearance examination will follow all such activities.

Occupant Protection and Temporary Relocation During Lead Hazard Reduction

In most jobs that require lead hazard reduction, the City requires appropriate actions to be taken to protect occupants from lead-based paint hazards if the units will not be vacant during the rehab project.  In those cases, occupants may not enter the worksite during the lead hazard reduction activities.  Re-entry is permitted only after such activities are completed and the unit has passed a clearance examination.  Occupants of the unit do not have to be relocated if: rehab work will not disturb lead-based paint or create lead-contaminated dust; hazard reduction activities can be completed within one 8 hour daytime period and the worksite is contained to prevent safety, health, or environmental hazards; exterior-only work is being performed where the windows, doors, ventilation intakes, and other openings near the worksite are sealed during hazard reduction activities and cleaned afterward, allowing for a lead-free entry to be maintained; hazard reduction activities will be completed within 5 calendar days and the work area is sealed, the area within 10 feet of the containment area is cleaned each day, occupants have safe access to sleeping areas, bathroom, and kitchen facilities; and occupants are not permitted into the worksites until after clearance has been achieved. 

If occupied units undergo more extensive lead hazard reduction activities, the occupants must be temporarily relocated.  Most often, furniture and occupant belongings can be covered and sealed with protective plastic sheeting, although storage of major furniture and removal of all small furnishings during the hazardous materials reduction work may sometimes be necessary.  The owners are responsible for carefully packing all breakables; removing all clothing from closets, etc.  During the hazard reduction work, only workers trained in lead hazard reduction may enter the work site.  This means that neither owners nor occupants are permitted to return to the work site during the day or at night.  If you have special needs to re-enter the site, please contact the rehab specialist.  Only when the unit has been cleaned to the federally-mandated standards and passed a clearance examination is it safe and permissible to return to your home.  The rehab specialist will notify you with an Authorization for Re-Occupancy.  Sometimes the jobs are completed in stages, with the lead hazard reduction work occurring first and the normal renovation work following.  In these cases, interim lead dust clearance must be obtained prior to re-occupancy by the owners or occupants and other non-lead related rehabilitation workers.  Final lead dust clearance must be repeated following the rehabilitation work to verify that the residence is free of lead hazards.  (Note: HUD has advised that relocation of elderly occupants is not typically required, so long as complete disclosure of the nature of the work is provided and informed consent of the elderly occupant(s) is obtained before commencing the work.)

Contracts that involve lead hazard reduction may require relocation of the occupants once the structure is turned over to the control of the contractor.  While vacant structures are more efficient to rehabilitate, relocation carries significant daily costs.  Therefore, the contractor must use his/her utmost efforts to complete the lead hazard reduction activities as indicated by a successful clearance examination within the allocated time period.  All relocation costs will be paid for by the City.

The contractor is responsible for cleaning the work site in accordance with the lead hazard reduction scope of work.  Cleaning includes removal of visible debris and dust by a HEPA vacuuming and wet cleaning as recommended in the HUD guidelines.  Attaining clearance dust lead levels as demonstrated by laboratory analysis, and reporting that the work site has been cleaned of lead hazards to a level below the thresholds of 40 µg/ft² on floors; 250 µg/ft² on interior sills, and 800 µg/ft² on exterior wells or troughs.  The contractor is responsible for all additional cleaning operations required to attain the mandated clearance thresholds as well as any additional cost assessed by the clearance technician for repeated dust testing and laboratory fees.

For further information, technical assistance, or sample documents, contact the Community Development Division, City of Bangor, at 992-4200, ext. 4241, or E-mail kaleena.nakowicz@bangormaine.gov.  Further information on the Residential Rehabilitation Loan Program is available by linking to the Community Development page at the City of Bangor website: http://www.bangormaine.gov/

THIS PROGRAM DOES NOT DISCRIMINATE ON THE BASIS OF RACE, COLOR,NATIONAL ORIGIN, SEX, AGE, RELIGION, FAMILIAL STATUS, PHYSICAL OR MENTAL DISABILITY.