9. 10. 11. under Truth-in-Lending procedure. (See Chapter 9 of this Handbook for After the three-day waiting period required by Truth-in-Lending procedure: a. b. If the borrower exercises the right of rescission, the loan is cancelled, the applicant fee is refunded, and follow-up If the borrower decides to proceed, the Rehabilitation Loan Completion of Rehabilitation Work. During the time that the rehabilitation work is being performed, compliance inspections of the property will be made, as necessary. Upon completion of the rehabilitation work, the Rehabilitation Division staff will arrange for a joint final inspection by the Rehabilitation Supervisor and the Area Housing Code Enforcement Officer. When the rehabilitation work has been fully and satisfactorily completed, the Rehabilitation Supervisor will prepare a closeout report and order final payment to be made to the contractor. (See also Chapter 8, Sections 9-12 of this Handbook.) Loan Closeout. After the rehabilitation of the property has been fully and satisfactorily completed, the Rehabilitation Loan Officer will complete the Disposition of Rehabilitation Funds form (Form HRSP-6246) for signature by the borrower and the Rehabilitation Supervisor. After the required signatures have been obtained, the Rehabilitation Loan Officer will send a closeout letter to the borrower. The closeout letter will include: a. b. c. Certificate of Completion; Copy of Disposition of Rehabilitation Escrow Funds form; and A reminder of where and when loan payments must be made. A post-completion inspection will be made by the Rehabilitation Supervisor not more than days after issuance of the Certificate of Final Inspection Cancellation of a Housing Rehabilitation Loan. a. An applicant for a housing rehabilitation loan may withdraw the loan application at any time before the application has been approved by the Housing Finance Committee. An applicant who elects to withdraw a loan application may, on request, continue to be provided with technical assistance under the Housing Rehabilitation Services Program. 86-085 77 pt. 2 24 b. C. d. e. The Rehabilitation Division staff may discontinue work on an application for a housing rehabilitation loan for any of the following reasons: (4) The applicant gives false or misleading statements in (5) The applicant does not permit the property for which the loan is sought to be inspected by the Building Inspection Division and/or the Rehabilitation Division of the Department of Housing and Community Development. (6) The rehabilitation of the property is not feasible due (7) The applicant withdraws the application. After a housing rehabilitation loan has been approved by the Housing Finance Committee, the applicant may cancel the loan within a three-day period after loan settlement by exercising the right of rescission provided by Truth-in-Lending procedure. Cancellation and termination of a housing rehabilitation loan may be effected by the City of Madison by sending a written notice of cancellation to the borrower at his mailing address as set forth in the application if, in connection with a loan in the amount of $1,000 or more, a prior adverse lien has been recorded against the property before the mortgage securing the loan has been recorded, which would necessitate cancellation of the loan. Cancellation and termination of a housing rehabilitation loan may also be effected by the City of Madison by sending a written notice of cancellation to the borrower at his mailing address as set forth in the application if, for a period of sixty days from the date of execution of the security instrument, the borrower shall have failed or refused to cause the commencement of physical rehabilitation work on his property, or if the borrower shall have failed to complete such rehabilitation work in a reasonable time. Upon authorization of such action by the Housing Finance Committee, all funds for that particular loan will immediately be cancelled and any funds expended -25 by the borrower will be immediately due and payable to the City. The failure of the City to exercise this right shall not be deemed a waiver thereof, as long as the rehabilitation work remains uncompleted. CHAPTER 6 DETERMINING WORK TO BE DONE WITH A HOUSING REHABILITATION LOAN This chapter sets forth the responsibilities of the Department of Housing and Community Development for determining the rehabilitation work necessary to bring a property into compliance with the City of Madison Minimum Housing and Property Maintenance Code and other applicable property rehabilitation standards, as well as the additional rehabilitation work needed, if any, to put the property into sound and readily maintainable condition, and for providing assistance in the rehabilitation of the property. In carrying out these responsibilities, the staff of the Rehabilitation Division of the Department of Housing and Community Development shall: a. Inspect the property; b. C. Make a preliminary work write-up and cost estimate of the Consult with and advise the owner concerning the rehabilita- 1. Property Inspection. The Area Housing Code Enforcement Officer and the 2. Work Write-Up and Cost Estimate. The Rehabilitation Division staff of the Department of Housing and Community Development shall prepare a preliminary work write-up that itemizes all the rehabilitation work needed to be done on the property. The preliminary work write-up shall also include a reasonable estimate of the cost of each work item. Each item of work and its estimated cost shall be identified in the preliminary work write-up as being either necessary to correct Minimum Housing and Property Maintenance Code deficiencies, deficiencies in other applicable property rehabilitation standards, or for other purposes for which a housing rehabilitation loan may be used. If the total estimated cost of the work shown on the preliminary work write-up exceeds the amount of the housing rehabilitation loan that the applicant could receive, or exceeds the applicant's financial ability to do all the work, the Rehabilitation Division staff shall eliminate or modify items in the preliminary work write-up as necessary to reduce the estimated costs; however the items of work necessary to correct Minimum Housing and Property Code deficiencies shall not be eliminated. The preliminary work write-up and cost estimate shall be discussed in detail with the applicant at the feasibility meeting. 3. 4. Consultation with Applicant. As soon as practicable after inspection of the property, the Rehabilitation Division staff shall consult with the applicant concerning the preliminary work write-up and cost estimate. The Rehabilitation Division staff shall advise the applicant as to which items of work are required to correct Minimum Housing and Property Maintenance Code deficiencies, which are required to meet other applicable property rehabilitation standards, and which items of work, if any, are not required, but may be financed with a housing rehabilitation loan. The Rehabilitation Division staff shall advise the applicant as to both the technical and financial assistance available to assist the applicant in completing the required rehabilitation work. The applicant will be encouraged to undertake as much of the other rehabilitation work as he can reasonably afford. As a result of the consultation and agreement reached between the Rehabilitation Division staff and the applicant concerning the rehabilitation work to be done, the Rehabilitation Division staff shall prepare the final work write-up and cost estimate. The applicant shall indicate his acceptance by signing the final work write-up and making formal application for a housing rehabilitation loan. Assurances that Rehabilitation Work will be Completed. In some instances, the applicant for a housing rehabilitation loan may need or want to do more rehabilitation work than can be financed by a housing rehabilitation loan. In such instances, the housing rehabilitation loan may be conditionally approved by the Housing Finance Committee subject to the condition that the applicant shall present to the Department of Housing and Community Development, prior to the loan settlement, a bona fide written commitment from a recognized lending institution or other funding source stating that the funds are available for the applicant's use, and shall deposit the additional funds needed to cover the cost of the additional rehabilitation work in the Rehabilitation Escrow Account at the time of loan settlement. The source and amount of the additional funds; the terms and conditions under which the additional funds must be repaid, if borrowed; and the applicant's demonstrated financial capacity to make all of the required payments on a continuing and regular basis, shall be verified by the Rehabilitation Loan Officer before the applicant/ borrower signs a Contract for Rehabilitation Work which includes rehabilitation work not covered by the housing rehabilitation loan. |