Community HOME Investment Program CHIP

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Community HOME Investment ProgramCHIP
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Congratulations to FFY 09 CHIP Recipients

• City of LaGrange
• Lowndes County
• City of Marshallville
• City of McIntyre
• Randolph County

• City of Rockmart
• City of Rome
• City of Sandersville
• City of Tifton

• Ben Hill County
• City of Cartersville
• Dooly County
• City of Douglas
• Hall County

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Congratulations to FFY 09 CHIP Set-Aside
Recipient

• City of Thomasville

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Typical Hazards

• Not returning CHIP funds drawn within 7 days if
  unspent
• Spending less than 1,000 in total CHIP project
  funds
• Not returning recaptured CHIP funds
• Double Dipping
• Not reporting program income
• Not understanding the difference between
  recaptured funds and program income

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Typical Hazards

• Not spending program income before drawing CHIP
  funds
• Spending CHIP funds on ineligible property or
  applicant
• Not seeking DCA guidance on conflicts of interest
• Not following HOME regulations including record
  retention

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Your DCA Staff

• Michelle Lewis, Affordable Housing Programs
  Manager
• 404 679 0659
• Kay Garrison, CHIP Consultant
• 404 679 0573

• Rick Huber (Environmental, Other Federal
  Requirements)
• (404) 679 3174
• Pamela Truitt (HUD Debar Clearance)
• (404) 679 5240

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Next Steps for State Recipients

• Carefully study the general conditions and
  special conditions of the CHIP award
• Execute the Statement of Award
• Execute the General Conditions
• Execute the Special Conditions

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Next Steps for State Recipients

• Set up separate non-interest-bearing CHIP
  accounts (one for each FY award)
• Complete the Authorization Agreement for
  Automatic Deposits
• Complete the Authorized Signature Card
• Return this package to DCA within 30 days of the
  date of the award along with a VOIDED CHECK
  from the CHIP account

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Addressing the Special Conditions

• Affirmative Marketing Plan
• Minority and Women Business Outreach Plan
• Environmental Plan
• Sub-recipient Agreement if using a non-profit to
  administer all or part of the CHIP program
• Must be submitted to DCA and cleared prior to any
  draw down of funds
• Any other required special conditions

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New for FFY 09

• DCA Addendum to Administrative Services Contract
• DCA Provided Sub-Recipient Agreements

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What are These Agreements?

• Agreement must follow the listing of requirements
  in HOME regulations at 24 CFR 92.504
• Use of CHIP funds
• Affordability
• Program Income
• Uniform Administrative Requirements
• Project Requirements

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Sub-Recipient Agreements (continued)

• Other Program Requirements
• Affirmative Marketing
• Requests for Disbursement of Funds
• Records and Reports
• Enforcement of Agreement
• Duration of the Agreement

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Citizen Participation Requirements

• Within 60 days of award, hold public hearing
• Discuss the proposed activities and estimated
  funding for each activity
• Discuss plans to minimize displacement and
  assistance, if displacement occurs
• Discuss historic preservation

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Develop Your Local CHIP Program Policies and
Procedures

• Lead paragraph setting forth approved award
  (amount of award, activities, award date)
• Eligible Borrowers
• Eligible Activities
• Application In-take
• CHIP Loan Terms and Conditions
• Leverage Loan Requirements

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Develop Local Program Policies and Procedures
(continued)

• Minimum Property Standards
• Written Rehabilitation Standards
• General Property Improvements
• Inspection, Work Write Up, Bidding Procedures
• Contractor Qualifications
• Loan Documentation and Loan Closings
• Progress Payments, Change Orders, Close-Outs
• Appeals and Complaints

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DCA Issues Grant Adjustment Notice Clearing
Special Conditions

• Up to 25 of administrative funds may be drawn as
  soon as all special conditions have been met and
  DCA issues the GAN clearing the special
  conditions
• Must have current billable expenses that equal or
  exceed maximum allowable
• No project expenditures may be incurred or any
  CHIP funds drawn down for any activity (other
  than for grant administration, design activities
  and other exempt activities) prior to receipt of
  an environmental clearance letter releasing
  funds. See Chapter 5 of the FFY 2009 CHIP
  Recipients Manual.

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Before Getting Started on Your Program

• Review the CHIP Homebuyer Guide
• Review the CHIP Rehabilitation Guide
• Review CHIP Program Policy Memoranda
• Review the CHIP Multifamily Guide

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Begin Program Marketing

• Implement the program marketing plan as set forth
  in the application
• All printed CHIP literature must have fair
  housing logo

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DCAs First Monitoring Visit

• Within 30 60 days of grant award, DCA will
  meet with the local government officials and the
  award administrators
• See Appendix C, Phase I Program Monitoring
• Review Program Policies and Procedures and other
  items listed in Appendix C

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Begin Application Processing

• Begin taking applications and follow the fair and
  equitable application in-take and process as set
  forth in your application
• Maintain applicant waiting list showing
  resolution of each application

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Reporting and Monitoring Your Programs Progress

• First quarterly report is due January 31, 2010
  for the period of September 25, 2009 December
  31, 2009
• All other quarterly reports due within 30 days of
  the end of each subsequent quarter until all
  program activity has ended
• Final quarterly report due after all projects
  completed and closed out

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Project Completion Reports

• Project Completion Reports due within 60 days of
  the final draw down of CHIP funds for each
  project
• DCA will not disburse the final twenty-five (25)
  percent administrative draw until all project
  completion reports have been received

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Reporting Contractor Data

• See Form No. 5 in Manual
• Final draw request for each project cannot be
  processed unless accompanied by Contracts and
  Subcontracts for Projects Completed Form

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Annual Assessments of Affirmative Marketing and
Minority- and Women-Owned Business Outreach Plans

• DCA requires an annual assessment of how your
  community met the requirements
• First assessments due on September 25, 2010

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Responsibilities of State Recipients

• Develop and adopt program policies and procedures
• Program marketing
• Application in-take
• Property inspections
• Bid document preparation

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Responsibilities of State Recipients(continued)

• Contracts
• Loan approvals and denials
• Progress payment inspections
• Dispute resolution
• Compliance with all State and Federal laws and
  regulations

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Responsibilities of State Recipients (continued)

• Requiring all CHIP borrowers to maintain hazard
  insurance naming State Recipient as mortgagee
  including flood insurance if in FEMA designated
  Flood Hazard Zone
• Builders Risk Policy by general contractor if
  residents have to vacate premises

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Responsibilities of State Recipients (continued)

• If State Recipient or sub-recipient owns during
  development phase, they accept risk of loss
• Maximize the participation by the private sector
• Legal document and written agreement preparation
  and execution

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Responsibilities of State Recipients (continued)

• Program income determination
• Compliance with HOME program requirements
• Evaluate each project in accordance with approved
  award application and adopted program policies
  and procedures

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Responsibilities of State Recipients (continued)

• Subsidy layering review
• Monitoring and reporting performance
• Retention and access of records
• Prudent financial management

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The Seven Basic HOME (CHIP) Rules

• Definition of a Project
• Form and Amount of Subsidy
• Eligible Costs
• The Property

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The Seven Basic HOME (CHIP) Rules (continued)

• The Applicant or Beneficiary
• The Long-Term Affordability of Project
• Applicability of Other Federal Requirements

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Activate Your CHIP Award

• Execute Statement of Award with General and
  Special Conditions
• Hold post award Public Hearing
• Get DCA clearance of Special Conditions
• Develop Local Policies and Procedures
• Open separate, non-interest-bearing CHIP account
• Disburse all funds within seven (7) days of
  receipt
• Only a minimum of funds (100) can be kept in
  account beyond 7 days

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Follow DCA Policy Memoranda

• Follow all DCA CHIP Policy Memoranda per Chapter
  10 of the FFY 09 CHIP Recipients Manual

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Whats New for FFY 09

• Still need to use old project set up form, HUD
  form 40094, dated 2/2003 - Rental/Homebuyer/Homeo
  wner Rehab Set-up Report, along with DCA addendum
  Form 10 in manual

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Whats New for FFY 09

• Still need to use old project completion report
  dated 2/2003, HUD form 40096 Homebuyer/Homeowner
  Rehab Completion Report, along with DCA addendum
  Form 13 in manual
• Rental project completion report is 40097 dated
  2/2003 at www.hud.gov HUD forms

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Remember

• Use grant agreement for homebuyer project
  delivery fee
• Use grant agreement for lead costs
• Use homebuyer loan agreement language if first
  mortgage is FHA insured
• See Chapter 10 memo dated 8/15/07

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Contact Us

• All CHIP forms are available on the DCA website
  at
• http//www.dca.state.ga.us/communities/CDBG/
• programs/CDBGforms.asp

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Challenges Ahead

• Credit Crunch
• Qualifying Applicants
• Soft Seconds
• Need Strong Counseling Component
• Long Lead Time to Prepare New Buyers
• Buyers May Need to Inject Own Funds
• Foreclosure Prevention
• Use Georgia Dream 1st Mortgage Program