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HomeMy WebLinkAboutOrd 3147 10/06/1981 244B - 10/1/81 - DCN ORDINANCE NO 3147 AN ORDINANCE ESTABLISHING A HOUSING REHABILITATION LOAN PROGRAM AND STANDARDS AND PROCEDURES IN CONNECTION THEREWITH IN THE VILLAGE OF MOUNT PROSPECT, ILLINOIS. WHEREAS, Section 6(a) of Article VII of the 1970 Constitution of Illinois provides that any municipality which has a population of 25,000 is a home rule unit and may exercise any power and perform any function pertaining to its government and affairs including; but not limited to, the power to tax and to incur debts; and ~EREAS; the Village of Mount Prospect, Cook County, Illinois has a population in excess of 25,000 and is therefore a home rule unit and may exercise any of the aforementioned powers to perform any of the aforementioned functions pertaining to its government and affairs; and WHEREAS, the U.S..Department of Housing and Urban Development (HUD) has available Federal funds under the Community .Development Block Grant Program for use in municipalities in establishing and administering direct rehabilitation loans or grants to property ~wners to restore and rehabilitate deteriorated property within the municipality; and W-HEREAS, it is deemed to be necessary and in the best interest of the Village of Mount Prospect to establish a Housing Rehabilitation Loan Program within the Village using Federal grant funds from the Community Development Block Grant Program in order to provide for and promote the public health, safety and welfare; to encourage the rehabilitation of deteriorating dwelling structures within the Community; to promote the elimination and prevention of urban blight, and to preserve and increase residential property values within the Village; and WHEREAS, it is the determination of this Village that such financial assistance be made available, in the form.of deferred payment, non-interest bearing loans, t? ~ow and moderate''i~0me homeowners to effectuate the rehabilitation of dwelling units within the Village in accordance with the standards and procedures herein- after set forth; and WHEREAS, it is further proposed, by this Village, that such ~ousing Rehabilitation Loan Program be administered by lending institutions within the Village; and WHEREAS, this Village proposes to make application for Community Development Block Grant funds from time to time for the purpose of funding such Housing Rehabilitation Loan Program as hereinafter provided. NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT OF THE BOARD OF TRUSTEES IN THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS, AS FOLLOWS: SECTION ONE: Housing Rehabilitation Loan Program Established. There is hereby established within the Village of Mount Prospect a financial assistance program which shall be known as the "Housing Rehabilitation Loan Program". SECTION ~0: Definitions. For purposes of this Ordinance the following words and terms shall have the following meaning: (A) "Village" shall mean the Village of Mount Prospect (B) "Owner" shall mean any person who owns and occupies a dwelling unit within the Village of Mount Prospect (either single family, or townhouse, or duplex - provided that the other unit of a duplex, if rented, is rented to persons within the median income guidelines established by the U.S. Department of - 2 - ousing and Urban DeveloPment ~6r Persons in Cook County, Illinois). (C) "Income" shall mean the earnings of the owner's household earned by the household head and spouse, if anyj together with regular Contributions from other adult members; and such income (in regard to the household head and spouse) shall include earnings from wages and tips, pensions, alimony (but not child support), interest~ dividends, net rental income, public assistance and social security. (D) "Income Limits" shall mean that limit of income established by the U.S. Department of Housing and Urban Development (80% of the SMSA Medium for persons in Cook County, Illinois) which income limit shall serve as the determination point for eligibility to participate in the Housing Rehabilitation Loan Program. (E) "Lending Institution" shall mean a State or Federally chartered bank. (F) "Housing Rehabilitation Loan" shall mean a loan made by the Village of money received from Federal funds under the Community Development Block Grant Program for the purpose of rehabilitating damaged or deteriorated dwellin9 structures within the Village so as to bring the same into compliance with applicable building codes. (G) "Applicable Building Codes" shall mean and collectively refer to the combination of the U.S. Department o'f Housing and Urban Development - Section 8 Housing Quality Standards, Boca One and Two Family Dwelling Code, Mount Prospect Property Maintenance Code~ and applicable building provisions of the Village Code of Mount Prospect. SECTION THREE: Purpose of the Housing Rehabilitation Loan program. The purpose of the Housing Rehabilitation Loan Program is to make available to low and moderate income households a deferred payment, non-interest bearing loan for use in correcting a eteroriated or damaged condition to the dwelling structure to bring the same into compliance with existing applicable building codes. SECTION FOUR: Eligibility for Housing Rehabilitation Loan .Program. (A) Person eligible for loan. Any person whose total household income in the calendar year preceding the date of loan application is within the income limits provided for herein, and who owns and occupies a single family or townhouse dwelling unit within the Village, or who owns and occupies a duplex dwelling unit within the Village in which the other unit is rented to a person with a total household income falling within the same income limits, shall be eligible for a Housing Rehabilitation Loan. (B) Structure eligible for loan. Any single family, townhouse or duplex dwelling unit owned and occupied by a person eligible for a Housing Rehabilitation Loan which structure as a result of dilapidation, deterioration, damage, age, or inadequate maintenance, fails to comply with current applicable building codes, or, in the absence of immediate corrective action, will fall below minimal applicable building code standards in the Village, and which can be rehabilitated and restored to full compliance with existing applicable building codes at an improvement cost not exceeding $15,000, shall be eligible for improvement pursuant to a Housing Rehabilitation Loan. Said structure must have been owned and occupied for at least one year prior to the date of filing a loan application by the person eligible to obtain such loan. SECTION FIVE: Loan. Procedures for Obtaining a Housing Rehabilitation (A) An application for a Housing Rehabilitation Loan shall be filed, on such application forms as may be furnished by the - 4 - illage for such purpose, with the Village's Department of Community Development, and shall contain the name, address and telephone number of the applicant; information regarding the applicant's household income for the year preceding the application filing date; and information regarding the applicant's employment, credit references, household status and property ownership. In addition the application shall contain a statement indicating the nature and extent of improvement necessary to restore the household to applicable building code standards. It is recommended that a preliminary discussion be held between the Applicant and the Department of Community Development for the purpose of explaining the application process, prior to filing the application. (B) The Director of Con%munity Development shall review and approve the application within thirty (30) days after it is filed and if the information and statements submitted on the application are insufficient or incomplete the Director is authorized to require such further information, statements or supporting documents from the Applicant as he deems to be necessary. The loan application and all information and statements submitted therein shall be confidential and shall be accessible only to the Director of the Department of Community Development and his staff and to the lending institution administering the Loan Program, and such information shall not be open to public inspection. (C) Following the review of the application and tentative approval as to the Applicant's eligibility, the Department of Con~munity Development shall make a preliminary inspection of the dwelling structure and shall determine whether or not the same is in a condition that will render it eligible .and feasible for rehabilitation pursuant to a Housing Rehabilitation Loan. Such determination shall be rendered in writing and shall include a list of all existing or anticipated violations of applicable - 5 - uilding codes and deviations from minimum housing standards. The Department of Community Development will next prepare a detailed work specification and cost estimate regarding the items listed in the written inspection report to support the determination as to the eligibility and feasibility of the dwelling structure for rehabilitation pursua'nt to a Housing Rehabilitation Loan. (D) Upon a determination that the Applicant and the building sought to be rehabilitated are eligible for a Housing Rehabilitation Loan, the Applicant shall obtain three itemized contractors estimates for accomplishing the work set forth in the detailed work specifications, and shall submit such estimates to the Director of Community Development for a comparison with the Department's own cost estimate. A contractor whose estimate is within the cost estimate of the Department of Community Development will be chosen by agreement between the Department and the Applicant and a contract, in a contract form furnished by the Department, shall be entered into between the Applicant and the contractor for accomplishment of the rehabilitation work. (E) Following execution of the contract for accomplishment of the rehabilitation work, the Applicant will execute a loan agreement with the Village and a promissory note with regard to the Housing Rehabilitation Loan in an amount not exceeding $15,000; said loan agreement and promissory note-to be on forms submitted by the Village. In addition the Applicant shall execute a mortgage to the Village on the household property in question (which will be either a first or second mortgage) to secure the subject loan; said mortgage to be on a form submitted by the Village. The processing of these loan documents shall be undertaken by a lending institution designated by the Village, and the Village shall establish an account and deposit the necessary funds for disbursement of the loan proceeds with the lending institution which shall undertake the necessary mechanic lien waiver examinations and shall disburse the loan proceeds - 6 - ursuant to the contract. The Applicant shall, in addition to the disbursement of loan proceeds covering the rehabilitation contract, be charged an additional amount by the lending institution, as set forth in the loan agreement, for the costs of administering the Loan Program, which charge shall be added to the loan amount and shall be disbursed by the lending institution from loan proceed funds deposited by the Village for this purpose. SECTION SIX: Rehabilitation Loan Terms. Housing rehabilitation loans provided for herein shall be disbursed in a maximum amount of $15,000, and the amount thereof must be used for correcting all existing applicable building code violations, or all anticipated code violations. Up to 10% of the total amount of the loan may be used for additional general home improvements, upon prior consultation with and approval of the Department of Community Development of the Village. No loan shall be approved herein unless such amount will be adequate to completel, y rehabilitate the structure in question and bring it into compliance with all applicable building codes. The loan shall be a deferred payment, non-interest bearing loan and shall be payable, in full, to the Village, at such time as the title to or interest in the real estate, which is the subject of said loan, shall be transferred, by sale, assignment, or by operation of law upon the death of the Owner, or upon the expiration of a term of twenty years from the date of the loan agreement, whichever occurs first. The loan may be prepaid in full or in part at any time, provided that prepayment will be made only once during any calendar year. Notwithstanding the foregoing provisions, if title or interest in the subject real estate is transferred by sale or assignment of the Owner within three years from the date of execution of the loan agreement, there shall be paid to the Village in addition to the entire loan balance due, and amount equal to 10% - 7 - f the loan amount, which payment may be waived by the Village, in its discretion, in cases of extenuating circumstances. SECTION SEVEN: Effective Date. This Ordinance shall be in full force and effect upon its passage, approval and publication in pamphlet form in accordance with law. Passed this 6 day of October , 1981. AYES: Arthur, Farley, Floros, Miller, Murauskis, Wattenberg NAYS: None ABSENT: None Approved this 6 day of October , 1981. Viltlage President ATTEST: Village Clerk