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HomeMy WebLinkAboutResolution - 3838 - Implementation Grant - HUD - HOPE 3 Homeownership Program - 03_26_1992Resolution No. 3838 March 26, 1992 Item # 10 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a HOPE III Imple- mentation Grant Application for the year 1992 and related documents; and THAT the City Council of the City of Lubbock hereby authorizes said Implementation Grant Application to contain local matching funds that consist of personal property in the form of houses severed from the land which are currently owned by the City, for use in the HOPE III Homeownership Program equaling the predetermined sum of not less than $280,000.00. Said application is attached herewith and shall be spread upon the minutes of the Council and shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 26th ATTEST: nette ecretary APPROVED AS TO CONTENT: Sandy Og e r , ok#4nity Development Administrator APPROV AS TO FORM: Dennis W. McGi A torney DWM:js/H0PEIII.RES/D1-Agenda day of March , 1992. r ` . C. McMINN, MAYOR Resolution No. 3838 March 26, 1992 Item #10 U.S. Department of Housing and Urban Development Office of Community Planning and Development i r IN OMB Approval No. 2506-0119 (exp. 04130/9: Application for Implementation Grant for HOPE for Homeownership of Single Family Homes (HOPE 3) form HUD-40086 (1/92) Hope for Homeownership of Single Family Homes Program (HOPE 3) Implementation Grant Acknowledgement of Application Receipt To Be Completed by the Applicant: Provide applicant name and address in the box below in orderfor HUD to acknowledge receipt of the application by the application deadline: City of Lubbock P. 0. Box 2000 1625 13th Street Lubbock, Texas 79457 To Be Completed by HUD: Your application was received by the appropriate HUD Field Office by the application deadline and will be considered for funding under HOPE 3. In accordance with Section 103 of the Department of Housing and Urban Development Reform Actof 1989, no information will be released by HUD regardingthe relative standing of any application untiltunding announce- ments are made. However, you may be contacted by HUD after initial screening of your application to permit you to correct incomplete items, inconsistencies, or incorrect computations, as permitted by Section 415(c) of the program guidelines. Your application was not received by HUD by the application deadline; therefore, your application will not receive further consideration under this funding round for HOPE 3 grants. Your application is enclosed. Date of Receipt I Processors Name (Please print) I HOPE 3 Program Number (Please refer to this program number in any further correspondence with HUD about this grant application.) Page form HUD40086 Table of Contents Applicant Name: City of Lubbock (Insert appropriate page number in blanks below) Page: 1 Standard Form 424 2 Table of Contents 3 Applicant Certifications 4 Certification of Consistency with the CHAS 5 Certification of Compliance with Replacement Housing Requirements 6 Section 1: Homeownership Program Information r 7-1i Exhibit 1: Description of Homeownership Program 12-39 Exhibit 2: Applicant Characteristics 40-44 Exhibit 3: Property Related Activities 45 Exhibit 4: Counseling and Training 46 Exhibit 5: Economic Development Activities 47 Exhibit 6: Relocation Assistance 48-49 Exhibit 7: All Other Proposed Activities Funded with HOPE 3 Funds 50-52 Exhibit 8: Affordability Analysis 53 Exhibit 9: Program Schedule - 54 Section II: Financial Information 55 Exhibit 10: Program Budget 56 Exhibit 11: Matching and Other Contributions 57 Exhibit 12: Sales and Resales Proceeds 58 Section III: Other Selection Factor information: 59 Exhibit 13: Local Support 60 Exhibit 14: Long Term Affordability Plan 61 Exhibit 15: Relationship to CHAS 62 Exhibit 16: Minority Business EnterpriseMomen-Owned Business Enterprise 63 Exhibit 17: Fair Housing Choice Page ii form HUD4008o OMB Approval No. 034E-00a3 APPLIGATIUN FUR 2 DATE SUBMITTED Applicant Identifier FEDERAL ASSISTANCE 3-31-92 N/A 1. TYPE OF SUBMISSION: 1 DATE RECEIVED BY STATE State Application Identifier Application Preapplication N/A Construction (] Construction 1. DATE RECEIVED BV FEDERAL AGENCY Federal Identifier (� Nonl onstruction Non -Construction N/A S. APPLICANT INFORMATION Legal Name Organizational Unit City of Lubbock Co munity Development Department Address (give city, county. state, and zip code) Name and telephone number of the person to be contacted on matters involving this application (give area code) P. 0. Box 2000 1625 13th St. Mr. Juan A. Reyes (Tony) Lubbock, TX 79457 (806) 67-2294 i. EMPLOYER ICENTiFICATION NUMBER (FIN): 7. TYPE OF APPLICANT: (enter appropriate letter in bdx) LCJ " e A. State H Independent School Dist. 7 5 6 0 0 0 5 9 0 B County I. State Controlled Institution of Higher Learning C Municipal J Private University 8. TYPE OF APPLICATION: D. Township K. IndiaA Tribe �] New Continuation O Revision E. Interstate L Individual F. Intermunicipal M Profit Organization It Revision. enter appropriate letters) in boa(es) El 11 G Special District N. Other (Specify) A Increase Award B Decrease Award C Increase Duration O Decrease Duration Other (specify)- s. NAME OF FEDERAL AGENCY: Department of Housing & Urban Development it CATALOG OF FEDERAL DOMESTIC ASSISTANCE NUMBER: 1 4 2 4 0 11. DESCRIPTIVE TITLE OF APPLICANT'S PROJECT: The City of Lubbock HOPE III Homeownership Program TITLE HOPE III Program will increase homeownership opportunities for per— sons of low to Troderate income. Federally repossessed u AREAS AFFECTED BY PROJECT (cities. counties. states. etc.): and vacant houses will be purchased & sold to City of Lubbock potential homeowners at affordable prices. Houses will be donated by the City for use in the Program. 13- PROPOSED PROJECT: 14. CONGRESSIONAL DISTRICTS OF: Start Date Ending Date a Applicant : b Project June 1992 May 1995 19th 19th 1S. ESTIMATED FUNDING: 16. IS APPLICATION SUBJECT TO REVIEW BY STATE EXECUTIVE ORDER t2272 PROCESS? a. YES. THIS PREAPPLICATIONiAPPLICATION WAS MADE AVAILABLE TO THE a Federal j 00 1,000,000 STATE EXECUTIVE ORDER 12372 PROCESS FOR REVIEW ON r DATE b Applicant j .00 c State f .00 b NO © PROGRAM IS NOT COVERED BY E.O. 12372 d Local f. 00 345,205 �. OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW e Other j 00 I Program Income j .00 17. IS THE APPLICANT DELINOUENT ON ANY FEDERAL DEBT? yes It -Yes.' attach an explanation. ® No q TOTAL S 00 1,345,205 I{. TO THE BEST OF MY KNOWLEDGE AND BELIEF. ALL DATA IN THIS APPLICATION PREAPPLICATION ARE TRUE AND CORRECT, THE DOCUMENT HAS BEEN DULY AUTHORIZED BY THE GOVERNING BODY OF THE APPLICANT AND THE APPLICANT WILL COMPLY WITH THE ATTACHED ASSURANCES IF THE ASSISTANCE IS AWARDED a 'Yped Name of Authorized Representative b Trtle c Telephone number B. C. McMinn Mayor (806) 767-3000 d Sigr ature of Authorized Representative a Date Signed C rch 26, 1992 rri^wus tdtlidn5 ni0t Usaoie - Stanoar Form 424 ,AEV 4-88) APPROVED AS TO CO Prescnb DY OMB A-W2 AS TO 01 Authorized for Local Reproduction ZROConmuTity De A strator 1 i Tria ey IMPLEMENTATION GRANT FOR HOPE III TABLE OF CONTENTS Standard Form 424 1 Table of Contents 2-2a Applicant Certifications 3 Certification of Consistency with the CHAS 4 Certification of Compliance with Replacement Housing Requirements (N/A) 5 SECTION I: H014EOWNERSHIP PROGRAM INFORMATION 6 Exhibit 1: Description of Homeownership Program 7-11 Exhibit 2: Applicant Characteristics 12-17 Exhibit 2A: GESC Board of Directors 18 Exhibit 2B: Federal Financial Assistance Program Single Audit Report 19-33 Exhibit 2C: Memo of Understanding 34-35 Exhibit 2D: Non -Profit Certification 36 Exhibit 2E: GESC-Letters from IRS 37-39 Exhibit 3: Property Related Activities 40-41 Exhibit 3A: Map -Minority Impacted Areas 42 Exhibit 3B: HOPE III Target Area -City Wide 43 Exhibit 3C: 1990 Ethnic Breakdown 44 Exhibit 4: Counseling and Training 45 Exhibit 5: Economic Development Activities 46 Exhibit 6: Relocation Assistance 47 Exhibit 7: Proposed Activities 48-49 Exhibit 8: Affordability Analysis 50-52 Exhibit 9: Program Schedule 53 SECTION II: FINANCIAL INFORMATION 54 Exhibit 10: HOPE 3 Program Budget 55 Exhibit 11: Matching and Other Contributions 56 Exhibit 12: Sales and Resales Proceeds 57 OA n T n L� "n SECTION III: OTHER SELECTION FACTOR INFORMATION 58 Exhibit 13: Local Support 59 Exhibit 14: Long Term Affordability Plan 60 Exhibit 15: Relationship to CHAS 61 Exhibit 16: Minority Business Enterprse/Women-Owned Business Enterprise 62 Exhibit 17: Fair Housing Code 63 2a Applicant Certifications Assurances and certifications are hereby provided that: 1. The applicant will comply with the requirements of the Flood Dis- aster Protection Act of 1973 (42 U.S.C. 4001-4128) and the Coastal Barrier Resources Act (16 U.S.C. 3601). 2. The applicant will comply with the environmental laws and authorities at 24 CFR 50.4 and will (i) supply HUD with information necessary for it to perform any necessary environmental review of each property; (ii) carry out mitigating measures required by HUD or select alternate eligible property; and (iii) not acquire or otherwise carry out any program activities with respect to any eligible property until HUD approval is received. 3. The applicant will comply with the requirements of the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 24 CFR Part 100, Part 109, and Part 110; Executive Order 11063 (Equal Opportunity in Housing) and implementing regulations at 24 CFR Part 107; and Title VI of the Civil Rights Actof 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implement- ing regulations issued at 24 CFR Part 1, and will affirmatively further fair housing. Indian tribes and IHA's wil! comply with the requirements of the Indian Civil Rights Act (25 U.S.C. 1301 et seq.) when applicable. This Act applies to tribes when they exercise their powers of self-government and is applicable in all cases when an Indian Housing Authority (IHA) has been established by exercise of such powers. In the case of Indian tribes and IHAs, the applicant will comply with the require- ments of the Indian Self -Determination and Education Assistance Act (see 25 U.S.C. 450e(b); 55 FR 24752-53 and 24755 (June 18, 1990), revising 24 CFR 905.165(a) and (b) and 905.360). 4. The applicant will comply with the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and implementing regulations at 24 CFR Part 146, which prohibit discrimination because of age in programs and activities receiving Federal financial assistance. 5. The applicant will comply with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, and with implementing regulations at 24 CFR Part 8, which prohibit discrimination based on handicap in Federally -assisted and conducted programs and activi- ties. 6. The applicant will comply with Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701 u) (Employment Opportunities for Lower Income Persons in Connection With As- sisted Projects), and with implementing regulations at 24 CFR 135. 7. The applicant will comply with the requirements of Executive Order 11246 (Equal Employment Opportunity) and the regulations issued under the Order at 41 CFR Chapter 60. 8. The applicant will comply with Executive Orders 11625, 12432, and 12138, which state that program participants shall take affirma- tive action to encourage participation by minority- and women - owned business enterorises. 9. As applicable, the applicant will comply with the policies, guide- lines, and requirements of OMB Circular Nos. A-87 (Cost Principles Applicable to Grants, Contracts and Other Agreements with State and Local Governments), 24 CFR Part 85 (Administrative Require- ments for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments), A-110 (Grants and Cooperative Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations), A-122 (Cost Prin- ciples Applicable to Grants, Contracts and Other Agreements with Nonprofit Institutions), and audit requirements described in OMB Circular A-128 implemented at 24 CFR Part 44 and OMB Circular A-133 (Audits of Institutions of Higher Learning and Other Nonprofit Institutions). 10. The applicant will provide drug -free workplaces in accordance with the Drug -Free Workplace Act of 1988 and HUD's implementing regulations at 24 CFR Part 24, Subpart F. 11. The applicant will comply with the requirements of the Lead - Based Paint Poisoning Prevention Act (42 U.S.C. 4821, etseq.) and implementing regulations at 24 CFR Part 35. 12. The applicant will ensure that no person has been or will be displaced f rom his or her dwelling as a direct result of the homeown- ership program described in this application. This does not preclude termination of tenancy for violation of the terms of occupancy of a unit. 13. The applicant will ensure that no Federally appropriated funds have been paid or will be paid, by or on behalf of the undersigned, for lobbying the Executive or Legislative Branches of the Federal Government. (Referto the government -wide common rule governing the restrictions on lobbying, published as an interim rule on February 26,1990 (55 FR 6736) and supplemented by a Notice published June 15, 1990 (55 FR 24540). For HUD, the interim rule is codified at 24 CFR Part 87.) 14. The applicant and its principals (a) are not presently debarred, suspended, proposed for debarment, declared ineligible, or involun- tarily excluded from covered transactions (see 24 CFR 24.110) by any Federal department or agency; (b) have not within a three-year period preceding this application been convicted of or had a civil judgment rendered against them for commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statement or receiving stolen property; (c) are not presently indicted for or otherwise criminally or civilly charged by agovemmen- tal entity (Federal, State or local) with commission of any of the offenses enumerated in (b) of this certification; and (d) have not within athree year period preceding this application had one or more public transactions (Federal, State or local) terminated for cause or default. Where the applicant is unable to certify to any of the statements in this certification, such applicant shall attach an expla- nation behind this page. 15. The applicant shail ensure that it has not and will not receive assistance from the Federal government, a State, or a unit of general local government, or any agency or instrumentality thereof, for activities for which funding is requested in the application. 16. The applicant will comply with conflict of interest provisions re- ferred to in Section 530 of the Notice of Amended Program Guide- lines, dated January 14, 1992. 17. The applicant shall comply with all applicable program require- ments described in the Notice of Amended Program Guidelines, dated January 14, 1992, and any amendments hereafter and final regulations for the program. of Legacy HesponsVe Applicant Off. Mayor B! C. McMinn I March 26, 1992 Page HU D-40086 CERTIFICATION OF CONSISTENCY WITH COMPREHENSIVE HOUSING AFFORDABILITY STRATEGY I, B. C. McMinn, Mayor of the City of Lubbock, Texas, authorized to act on behalf of the City of Lubbock, do certify that the activities proposed by the City of Lubbock are consistent with the Comprehensive Housing Affordability Strategy approved by the Department of Housing and Urban Development on February 6, 1992. B. C. McMinn,'Mayor, City of Lubbock (Name and Title) 0& 7 . C. McMinn, Mayor APPROVED AS TO CONTENT: Sandy Ogl ee CommCom unityLbevelopment Administrator March 26, 1992 Date Civil Trial Attorney 4 (NOT APPLICABLE) CERTIFICATION OF COMPLIANCE WITH REPLACEMENT HOUSING REQUIREMENTS Applicable only if using public or Indian housing units The certification below must be signed by the authorized official of the Public Housing Agency or Indian Housing Authority where public or Indian housing units are proposed for use`in the HOPE program. Recommended form of certification: The undersigned hereby certifies that (insert name of PHA or IHA) is in compliance with its replacement housing plan under Section of the USHA of 1937, and all other applicable requirements of the USHA of 1937, HUD regulations, and any other terms and conditions required by HUD, with respect to the units owned by this agency and to be include din the HOPE 3 program proposed by the HOPE 3 application of which this certification is a part. Signature of Authorized Official, PHA or IHA 5 SECTION Homeownership Program Information EXHIBIT I DESCRIPTION OF HOMEOWNERSHIP PROGRAM A. Summary Our HOPE III Program is a program for providing affordable first time Homeownership opportunities to families with incomes at or below 800 of the median. Special preference and consideration will be given to displaced homeowners as well as to single parent heads of households, as prescribed in the regulations. The program will provide mortgage and interest subsidies if needed in order to make the housing affordable and to comply with the provisions on affordability in the regulations. Down payment assistance is provided in instances where mortgage financing is being secured from a lending institution and where the family applying qualifies under the low to moderate income criteria. The number of homebuyers to be assisted will be forty-five, twenty financed through HOPE III, ten with down payment assistance, ten units which are being donated by the City for use in the HOPE III Homeownership program, four RTC donated properties and one RTC purchased by a homeowner under the Affordable Housing Program. The program will be carried out City wide. The majority of the City of Lubbock HOPE III program would consist of the purchase and resale of houses to qualified applicants. This component will work similar to our Urban Homesteading Program and for the purposes of clarity it is called the Urban Homestead Component. The houses under this component will be sold as -is. The rehabilitation of the property will be done by the eligible buyer utilizing the existing C.D.B.G. Below Market Interest Rate Loan /No Interest Deferred Payment Rehabilitation Loan. All health and safety repairs would have to be completed prior to move - in. Before Rehab. or at intial sale all properties would be advertised in the Avalanche Journal( a newspaper of local circulation) The availability of property will be announced and the program criteria for homebuyer selection. Applications will be taken on a first -come first -served basis. However, awarding of HOPE III houses will be done based on the greatest need. All applications will be rated and scored, with the highest applicant receiving the first home. 7 NP The second component of the City's program will involve the granting of down payment assistance to applicants for mortgages from private lending institutions. Selection of families under this component of our program will be on a first -come first -served basis. The third and final component is the utilization of ten houses which will be donated by the City for use in the program. These houses were acquired with City funds for the expansion of Indiana Avenue from 34th to 50th Streets. The houses will be moved from the right-of-way to affordable housing neighborhoods in our city and rehabilitated for resale. The ten houses to be donated by the City will be rehabbed after setting them on a lot with HOPE`III funds. The proposal is to assist ten families with the downpayment assistance component of our program, the estimated cost is $20,000.00. We have budgeted Replacement Reserves at $25,000.00, Counselling and Training at $10,000.00 and Applicant Training at $3,000.00. The HOPE III sale of properties component will assist twenty families and the estimated cost for 20 houses will be approximately $510,000.00 or $25,500.00 a piece. The twenty properties acquired for resale with HOPE III funds will be rehabbed through the Community Development Block Grant Rehabilitation Program. It is also anticipated that to complete these program activities we would need 1 Rehabilitation Coordinator, 1 Loan Processor, 1 Loan Officer, and 3 Rehabilitation Inspectors. Eligible Families Plan After properties are acquired with HOPE III funds a notice of availability of these properties for sale shall be published in a newspaper of local circulation. In addition, special outreach through bilingual newspapers and Spanish radio shall be utilized to inform potential applicants for the property among persons least likely to apply. The following Fair Housing Marketing Strategy will be utilized. Potential homeowners from all racial and ethnic groups will be informed of the availability of affordable housing units for homeownership. In particular, those persons who might be considered least likely to apply for this housing without special outreach, will be informed through various means about the program. Our program will promote the concept of fair housing and help to eliminate U. discrimination in housing due to age, sex, race, religion or handicap. All for sale units along with the qualifications will be advertised in local newspapers and exhibit the equal housing opportunity logo. All yard signs used to attract homebuyers shall exhibit the Equal Housing Opportunity Logo. The units will be advertised in Minority Newspapers and in publications which may be free to the public and available at grocery stores, convenient stores, community centers and neighborhood churches. Potential homeowners will be recruited from the available Housing Authority list of tenants paying rents°at amounts that might facilitate for them a home purchase. However, tenants applying for homeownership but owing tenant contribution to the Housing Authority must resolve those deficiencies before their application for homeownership under our HOPE III program could be considered. Special preference shall be given first to qualified current residents of the property and a second preference to eligible families who have completed participation in an economic self-sufficiency program. Those families selected shall be notified in writing immediately after their selection and those rejected shall also be notified with the grounds or reasons for any such rejection. Families selected shall be required to certify that they intend to occupy the unit as their principal place of residence. In addition, each selected family shall certify that it will not lease or otherwise make the property available for other occupancy during a 15 year period from the date it acquires ownership interest in the unit. The exception being that the family is required to move outside of Lubbock due to a change in employment or an emergency situation. A family will be required to pay back the amount due under the promissory note if they violate the provisions above stated regarding leasing prohibition. The composition of the residents and potential eligible families may be 12 White, 15 Black and 18 Hispanic families. The average family size will be 5 in the family and it is anticipated that at least 7 will be single parent households. The income of these families is projected to fall well below the 80% of median. C. Resale Restrictions A promissory note will be executed any time there is a difference between the Fair Market Value of the property and the actual sales price of a property purchased by a homebuyer under HOPE III. The FMV will be determined by an appraisal and the promissory note shall bear no interest, shall not be amortized, is non -recourse and must be secured by a mortgage. To the extent proceeds from an eventual sale remain after all other debt is repaid, taxes and closing costs are paid, and equity earned by homebuyer is paid. The distribution of sale proceeds is as follows: 1. Payment of other debt. 2. Closing costs. 3. Equity due to initial homebuyer. 4. Payment of HOPE III Promissory note. (a) 0 through 6 years -full amount of promissory note must be repaid. (b) 7 through end of year 20-amount of promissory note that must be repaid is reduced by 1/168 for each month the family owns the property. 5. Excess proceeds. (a) sale from year 0 through year 6-500 of excess proceeds retained by HOPE III Grant recipient, 50% of proceeds returned to HUD (b) sale from start of year 7 through end of year 20- all excess proceeds retained by initial homebuyer. D. No Sweat Equity Claimed E. Housing Quality Plan After a property is acquired and before it is sold to a HOPE III applicant, the property manager will inspect the property and make a written assessment of its condition. A health and safety inspection of the property will be made and steps will be taken to correct all health and safety deficiencies. This will insure that each unit will, prior to transfer of an ownership interest to an eligible HOPE III homebuyer, be free from any defect posing an imminent threat to life, health or safety. Within the purchase agreement and conveyance documents signed by each HOPE III homebuyer, specific requirements will be outlined which will include that within two years of transfer of a HOPE III property, each unit will meet local housing code standards. 10 F. Management Entity The management of properties will be done in-house. G. Desegregation Order The City of Lubbock is not currently under a desegregation order and none is contemplated. H. Rental Housing Impact The HOPE III Homeownership Program will not reduce the affordable single-family rental housing units in this area by more than 10%. 11 EXHIBIT 2 APPLICANT CHARACTERISTICS A. Applicant Identification The City of Lubbock Community Development Program Staff will administer the HOPE III Homeownership Program and Guadalupe Economic Services Inc. will perform as the non-profit. GESC has been involved with housing activities in one way or another since the 1970 tornado devastated the Guadalupe Neighborhood. GESC has been concerned with reditalizing the neighborhood since then, enticing many former residents to move back to the neighborhood and making it a model affordable housing area sensitive to the needs of low to middle income minority families. Today, the Guadalupe Neighborhood in Lubbock is recognized as a leading proponent of affordable housing and revitalization strategies. GESC, under the direction of Richard Lopez, has been the mechanism through which many of these strategies were successfully introduced and implemented. GESC has also been concerned with the housing situation of migrant and seasonal farmworkers. Since the early 1980's, GESC has assisted in providing temporary and permanent housing arrangements to seasonal farmworkers who live and work in the South Plains area and to the thousands of migrant farmworkers who migrate to this region every year to assist with the crop harvesting and processing. In 1986, the state as well as the South Plains area was characterized by significant economic dislocations in the oil and gas industry as well as continuing dislocations in the agricultural industry. A large number of plant closings and subsequent layoffs left many families jobless and eventually homeless. GESC responded to this need by obtaining emergency shelter accommodations for such families on short notice. In May of 1986, GESC applied and received initial funding from the U.S. Department of Housing and Urban Development to initiate a housing counseling program for those who were in danger of losing their homes. The agency has received subsequent funding from HUD then and has been able to assist over 4,000 families with this type of housing and credit counseling in the Lubbock and E1 Paso regions of the state. In the area of Fair Housing, GESC has been the administrator of the Community Housing Resources Board (CHRB) and has 12 worked to implement the Voluntary Affirmative Action Marketing Agreement (VAMA) in Lubbock. It has worked jointed with the West Texas Home Builders Association, the Lubbock Board of Realtors, the Lubbock Housing Finance Corporation, the City of Lubbock, and other community groups and private sector entities to diminish and eradicate discrimination in the acquisition of housing for low income and minority populations. GESC continues to promote fair housing strategies through the techniques it has used over the last decade. These include: (1) media campaigns (TV and radio in Lubbock, Amarillo, Midland, Odessa, Big Spring, E1 Paso and the surrounding rural counties both in English and Spanish. (2) use of local and regional bilingual newspapers to reach large minority audiences; (3) distribution of pamphlets throughout the community and within the loan institutions and banks in the entire West Texas area; (4) distribution of 800 number including postings in stores, laundries, etc. within the low income and minority communities; (5) distribution of Fair Housing posters in area offices and Citibusses; (6) work with local banks to ensure that the Community Reinvestment Act is adhered to in low income and minority communities, and that suspected "red lining" is eliminated in these communities; (7) organized and implemented a National Housing Conference in Lubbock, Texas; (8) continue to provide fair housing activities through its HUD counseling program; this includes assistance in foreclosure, pre -purchasing and post purchase assistance. GESC has been one of the leaders in providing emergency and transitional housing to the homeless in the Lubbock area. In 1987, the City of Lubbock, in conjunction with local agencies dedicated to serving the homeless, created a coalition named the Comprehensive Homeless Assistance Program (CHAPS). The CHAPS is designed to improve coordination and promote networking among the agencies serving the homeless. Since that time, GESC established the most comprehensive homeless assistance housing program in 13 Lubbock. In addition to three shelters owned and operated by GESC which can house upwards to 100 persons per night, GESC is also working with HUD to provide transitional and permanent housing to the homeless through its HUD Lease/Purchase Program. GESC's holistic approach includes the implementation of an on -site clinic to serve the homeless, a comprehensive case management system which assists clients with identified needs, such as food, clothing, transportation, job counseling, job training, and job placement. Part of this assistance includes life skills counseling of which housing and financial counseling are an integral part.' In 1990, GESC served approximately 43,000 families through all aspects of its social services programs. GESC also has extensive networking capabilities within the City of Lubbock and strong support from local elected officials. In fact GESC has formalized agreements with the City of Lubbock Health Department and various local state agencies (Texas Department of Human Services). This added dimension multiplies GESC's ability to assist low income families. In terms of financial assistance from state and federal agencies to provide housing services, the following selected funding sources demonstrate GESC's ability to draw on other resources to operate and maintain its Housing Programs: HUD Counseling Program: Funded since 1986; currently refunded for FY 91 for $71,000; CHRB funded under subcontract 1987-1991; HUD Lease/Purchase Program (18 homes under contact to HUD to provide transitional and permanent housing for homeless) Texas Veterans Land Board: Funded in 1987-88 Resolution Trust Corporation: GESC is under contract to act as an RTC counseling agency and as an RTC Technical Assistance Advisor for FY 1991-92 in West Texas Texas Department of Community Affairs: Funded three straight years shelter to homeless (1989, funded at $80,000; to provide emergency 1990, 1991). Currently 14 Funded Emergency Homeless Program to supplement other programs funded locally to assist homeless families with housing Farmers Home Administration: Funded in 1988-89 to assist with housing repairs in outlying rural areas in West Texas Certifications and Memberships: Certified HUD Housing Counseling Agency: Currently three members are certified as housing counseling counselors; RTC Certified Agency: GESC has been designated as a certified RTC counseling agency and Technical Assistance Advisor. Currently contracting with RTC to assist in the West Texas Auction in both capacities; Member, Lubbock Homeless Coalition Member, E1 Paso Homeless Coalition Member, Lubbock Community Housing Resource Board Associate, Housing Assistance Council GESC Board Chairman serves on City of Lubbock Housing and Community Development Board, Chairman of the Lubbock CHRB and was involved in the review process of the City of Lubbock's CHAS plan. The administrative staff that will carry out the HOPE III Homeownership Program will be one and the same as the Community Development Staff of the City of Lubbock. There will be an Administrator, a Rehabilitation Coordinator, three'Housing Inspectors, one Loan Officer and one Loan Processor. B. Qualification and Experience of Applicant The Administrative Staff of the Community Development Department of the City has extensive experience in handling financial resources. For example, the staff has administered a Housing Rehabilitation Program for almost twenty years. Grants as well as below market interest rate loans have been made. Also, the C.D. staff has been an 15 active participant in the HUD Section 312 Loan Program, having participated in it for almost fifteen years. We have administered three years of Urban Homestead and have successfully acquired and disposed of 34 properties with no defaults in that period. In addition, we currently implement a Joint Venture for Affordable Housing Program. The local HUD Federal Housing Administration Office, the Local Homebuilders Association and the City of Lubbock are in partnership to construct affordable housing. The City makes the lots available and takes preliminary application profiles from potential mortgage loan applicants, FHA insures loans and local lending institutions make the loans and the homebuilders are committed to building affordable housing (between $28,000 and $35,000) in virtually untried low income areas of the city. The Financial Control Procedures involve at the minimum four cross checks when funds are requested and distributed. A Rehabilitation Inspector normally initiates a Request for Payment and the Rehabilitation Coordinator reviews and checks the request. The Rehabilitation Coordinator submits the request to the C.D. Bookkeeping section and the Bookkeeper reviews and checks the request before passing it to the Administrator for approval. The Administrator reviews and checks the request and it is sent to the Purchasing Department for payment. The Purchasing Department reviews and checks the request and cuts a check that goes back to the Bookkeeping Section. The Bookkeeper checks the check for accuracy and records the check and the inspector that initiated the request receives the check and signs for receipt of the check. The C.D. Staff administers two separate Homeownership programs currently. The Joint Venture for Affordable Housing Program is a new construction program that utilizes no federal funding whatsoever. Families wanting to buy a home, usually first time homebuyers apply to have a profile of their eligibility for a mortgage loan to our office. Their employment is verified, their recurring expenses are verified and credit history is looked at. After all income and living expenses have been verified, underwriting ratios are looked at. This information enables us to determine the size and cost of house the family would be eligible for. After the size and cost of house is determined, the family is provided with a list of new construction contractors and they shop for the best deal they can get. Once a builder and lot is determined, the family is provided with their Mortgage Profile File that they and their builder can present to the Mortgage Lender of their choice. The 16 eligibility is based on FHA Mortgage Insurance guidelines and the lenders utilize our information to fund the loan. Since the inception of our Affordable Housing Program, an estimated 45 new Affordable Houses have been built. This program has generated over $2 Million in new construction activity. Our second Homeownership Program has been Urban Homestead. Under this homeownership program, 34 properties have been acquired and disposed of to eligible homesteaders. All 34 properties were rehabilitated utilizing the Section 312 Loan Program. This first group of homesteaders are two years away from receiving unconditional ownership to their properties. In order to insure that our Homesteaders have every advantage of becoming successful homeowners, we set up a series of Homeownership Nurturing Classes which we feel are very beneficial to new homeowners. We require that all Homesteaders attend 4 of 7 two-hour classes. This years Nurturing Classes will include: filing income tax returns as homeowners, wills - what can happen without one, insurance policies - How to file a claim, crime prevention in your neighborhood, code violations and code enforcement, consumer credit counseling - good money management, mortgage and foreclosure - how to save your house. Our Homeownership Programs have not had any major audit findings in the last five years or since their inception. (See attached audit report). C. Private Non -Profit Organization 17 -f �J- EXHIBIT 2A GUADALUPE G E S C ECONOMIC SERVICES CORPORATION * ELECTED ** APPOINTED POSITION TERM I* 3 YRS 5/88 II* 2 YRS 5/88 III* 1 YR 9/91 LIST OF BOARD OF DIRECTORS AS OF SEPTEMBER, 1991 OFFICE NAME SEC VARGAS,JOSE J. CASTELLANO, HENRY CHAVEZ, ANDREW IV* 3 YRS PRES AGUILAR, BENNY 3/88 V* 2 YRS VP/TRES HEREDIA, MARIO 5/88 VI** 1 YR ANDERSON,KENNETH 9/91 VII** 1 YR AGUILAR,JOHN 9/91 VIII** 2 YRS CARRILLO, JULIA 8/89 IX** 3 YRS. SHEPPARD, HAROLD ADDRESS & PHONE 108 N. AVE. M H. 765-6131 304 N. AVE 0 H. 763-3219 5234 95TH ST H. 794-1735 W. 765-2323 221 N. AVE. M H. 763-6295 114 N. AVE. M H. 762-2182 3421 59TH ST W. 793-3078 1219 AVE. A W. 763-9363 120 N. AVE. H. 762-9064 7912 LOUISVILLE H. 797-5644 18 1416 First Street • Lubbock, 'texas 79401 • (806) 744-4416 Equal Opportunity Employer EXHIBIT 2B 1_ 1 f f� FEDERAL FINANCIAL ASSISTANCE PROGRAM j� SINGLE AUDIT REPORT j SEPTEMBER 30, 1990 1 L L L L L ., �19 CITY OF LUBBOCK FEDERAL FINANCIAL ASSISTANCE PROGRAM (SINGLE AUDIT) September 30, 1990 ITABLE OF CONTENTS i Report on Supplementary Information - Schedule of Federal Financial Assistance 7 1 Schedule of Federal/State Financial Assistance - Modified Accrual Basis 9 l Texas Department of Community Affairs - 13 Notes to Schedule of Federal/State Financial Assistance 17 Compliance Report Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards 21 Single Audit Opinion on Compliance with Specific Requirements LSingle Applicable to Major Federal Financial Assistance Programs 23 Audit Report on Compliance with the General Requirements Applicable to Major Federal Financial ( Assistance Programs 25 L Single Audit Report on Compliance with Requirements Applicable to Nonmajor Federal Financial Assistance Program Transactions 27 Report on the Internal Control Structure in Accordance with Government Auditing Standards 31 Report on the Internal Controls (Accounting and Administrative) - Based on a Study and Evaluation Made as a part of an Audit of the General Purpose or Basis Financial Statements and the Additional Tests Required by the Single Audit Act 33 L L L � 20 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE ( Coopers &Lybrand i certified public accountants REPORT ON SUPPLEMENTARY INFORMATION - SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE INDEPENDENT AUDITOR'S REPORT The Honorable B. C. McMinn Mayor of Lubbock Members of City Council City of Lubbock, Texas We have audited the general purpose financial statements of the City of Lubbock, Texas, for the year ended September 30, 1990, and have issued our report thereon dated January 7, 1991. These general purpose financial statements are the responsibility of the City of Lubbock, Texas management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government _ Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit was made for the purpose of forming an opinion on the general purpose financial statements of the City of Lubbock, Texas, taken as a whole. The accompanying schedules of federal financial assistance, Community Service Block Grant Contract #610048, Energy Crisis Program Contract #590048, Weatherization Assistance for Low -Income Persons Contract #560048 and the Emergency Homeless Contract, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. The information in those schedules has been subjected to the auditing procedures applied in the audit of the general purpose financial fstatements and, in our opinion, is fairly presented in all material respects in relation to the general L purpose financial statements taken as a whole. February 22, 1991 Lubbock, Texas L � 22 COMPLIANCE WITH PROGRAM REQUIREMENTS SINGLE AUDIT 23 � Coopers &Lybrand I fi certified public accountants COMPLIANCE REPORT BASED ON AN AUDIT OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUD177NG STANDARDS The Honorable B. C. McMinn Mayor of Lubbock Members of City Council City of Lubbock, Texas We have audited the general purpose financial statements of the City of Lubbock, Texas as of and for the year ended September 30, 1990, and have issued our report thereon dated January 7, 1991. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. Compliance with laws, regulations, contracts, and grants applicable to the City of Lubbock, Texas is the responsibility of the City of Lubbock's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the City of Lubbock's compliance with certain provisions of laws, regulations, contracts, and grants. However, our objective was not to provide an opinion on overall compliance with such provisions. The results of our tests indicate that, with respect to the items tested, the City of Lubbock, Texas complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Lubbock, Texas had not complied, in all material respects, with those provisions. We reviewed prior year recommendations for implementation and have determined that there are no significant uncorrected recommendations. CThis report is intended for the information of management and the City Council. This restriction is not intended to limit the distribution of this report, which is a matter of public record. February 22, 1991 Lubbock, Texas L 24 I r I I I L Coopers &Lybrand certified public accountants SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENT'S APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS The Honorable B. C. McMinn Mayor of Lubbock Members of City Council City of Lubbock, Texas We have audited the City of Lubbock, Texas compliance with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort, or earmarking; reporting; use of airport revenue; applicability of environmental reviews for Community Development Block Grants; claims for advances and reimbursements; and amounts claimed or used for matching that are applicable to each of its major federal financial assistance programs, which are identified in the accompanying schedule of federal financial assistance, for the year ended September 30, 1990. The management'of the City of Lubbock is responsible for the City's compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States, and Office of Management and Budget Circular A-128, "Audits of State and Local Governments." Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the City of Lubbock, Texas complied, in all material respects, with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort, or earmarking; reporting; use of airport revenue; applicability of environmental reviews for Community Development Block Grants; claims for advances and reimbursements; and amounts claimed or used for matching that are applicable to each of its major federal financial assistance programs for the year ended September 30, 1990. February 22, 1991 j Lubbock, Texas L L 25 I I I I Coopers &Lybrand certified public accountants SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS The Honorable B. C. McMinn Mayor of Lubbock Members of City Council City of Lubbock, Texas We have applied procedures to test the City of Lubbock, Texas compliance with the following requirements applicable to each of its major federal financial assistance programs, which are identified in the schedule of federal financial assistance, for the year ended September 30, 1990: Political Activity, Davis -Bacon Act, Civil Rights, Cash Management, Relocation Assistance and Real Property Acquisition, Federal Financial Reports, Allowable Costs/Cost Principles, Drug -Free Workplace Act, and Administrative Requirements. Our procedures were limited to the applicable procedures described in the Office of Management and Budget's Compliance Supplement for Single Audits of State and Local Governments. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the City of Lubbock, Texas compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the first paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Lubbock, Texas had not complied, in all material respects, with those requirements. This report is intended for the information of management and the City Council. This restriction is not intended to limit the distribution of this report, which is a matter of public record. L February 22, 1991 Lubbock, Texas I L L 26 COOp��� Y certified public accountants &L brand SINGLE AUDIT REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS The Honorable B. C. McMinn ' Mayor of Lubbock Members of City Council City of Lubbock, Texas In connection with our audit of the 1990 general purpose financial statements of the City of Lubbock, Texas and with our study and evaluation of the City's internal control systems used to administer federal financial assistance programs, as required by Office of Management and Budget Circular A-128, "Audits of State and Local Governments," we selected certain transactions applicable to certain nonmajor federal financial assistance programs for the year ended September 30, 1990. As required by Circular A-128, we have performed auditing procedures to test compliance with the requirements governing types of services allowed or unallowed and eligibility that are applicable to those transactions. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the City's compliance with these requirements. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Lubbock had not complied, in all material respects, with those requirements. This report is intended for the information of management and the City Council. This restriction is not intended to limit the distribution of this report, which is a matter of public record. February 22, 1991 Lubbock, Texas L L 27 INTERNAL CONTROL 28 Coopers Y &L brand certified public accountants REPORT ON THE INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUD177NG STANDARDS The Honorable B. C. McMinn Mayor of Lubbock Members of City Council City of Lubbock, Texas We have audited the general purpose financial statements of the City of Lubbock, Texas as of and for the year ended September 30, 1990, and have issued our report thereon dated January 7, 1991. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. In planning and performing our audit of the general purpose financial statements of the City of Lubbock, Texas for the year ended September 30, 1990, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our -opinion on the general purpose financial statements and not to provide assurance on the internal control structure. The management of the City of Lubbock, Texas is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. 29 AL I For the purpose of this report, we have classified the significant internal control structure policies and procedures in the following categories: Cash Receipts/Revenue Cash Disbursements/Purchases Payroll For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a`reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. However, we noted certain matters involving the internal control structure and its operation that we have reported to the management of the City of Lubbock, Texas in a separate letter dated February 8, 1991. We reviewed prior year recommendations for implementation and have determined that there are no significant uncorrected recommendations. This report is intended for the information of management and the City Council. This restriction is not intended to limit the distribution of this report, which is a matter of public record. February 22, 1991 Lubbock, Texas 30 Cooyppers certdied public accountants &L brand REPORT ON THE INTERNAL CONTROLS (ACCOUNTING AND ADMINISTRATIVE) - BASED ON A STUDY AND EVALUATION MADE AS A PART OF AN AUDIT OF THE GENERAL PURPOSE OR BASIC FINANCIAL STATEMENTS AND THE ADDITIONAL TESTS REQUIRED BY THE SINGLE AUDIT ACT The Honorable B. C. McMinn Mayor of Lubbock Members of City Council City of Lubbock, Texas We have audited the general purpose financial statements of the City of Lubbock, Texas for the year ended September 30, 1990, and have issued our report thereon dated January 7, 1991. As part of our audit, we made a study and evaluation of the internal control systems, including applicable internal administrative controls, used in administering federal financial assistance programs to the extent we considered necessary to evaluate the systems as required by generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States, the Single Audit Act of 1984, and the provisions of Office of Management and Budget Circular A-128, "Audits of State and Local Governments." For the purpose of this report, we have classified the significant internal accounting and administrative controls used in administering federal financial assistance programs in the following categories: Internal Accounting Controls: Cash Receipts/Revenue Cash Disburse ments/Purchases Payroll Internal Administrative Controls: General Requirements: .. Political activity .. Davis -Bacon Act .. Civil Rights .. Cash management .. Relocation assistance and real property acquisition .. Federal financial reports .. Indirect cost allocation .. Drug -Free Workplace Act 31 Specific Requirements: .. Types of services allowed or unallowed .. Eligibility .. Matching, level of effort, or earmarking .. Reporting .. Cost allocation .. Use of airport revenue .. Applicability of environmental reviews Grants for Community Development Block The management of the City of Lubbock, Texas is responsible for establishing and maintaining internal control systems used in administering federal financial assistance programs. In fulfilling that responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control systems used in administering federal financial assistance programs are to provide management with reasonable, but not absolute, assurance that, with respect to federal financial assistance programs, resource use is consistent with laws, regulations, and policies; resources are safeguarded against waste, loss, and misuse; and reliable data are obtained, maintained, and fairly disclosed in reports. Because of inherent limitations in any system of internal accounting and administrative controls used in administering federal financial assistance programs, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the systems to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. Our study included all of the applicable control categories listed above. During the year ended September 30, 1990, the City of Lubbock, Texas expended 85 percent of its total federal financial assistance under major federal financial assistance programs. With respect to internal control systems used in administering major federal financial assistance programs, our study and evaluation included considering the types of errors and irregularities that could occur, determining the internal control procedures that should prevent or detect such errors and irregularities, determining whether the necessary procedures are prescribed and are being followed satisfactorily, and evaluating any weaknesses. With respect to the internal control systems used solely in administering the nonmajor federal financial assistance programs of the City of Lubbock, Texas, our study and evaluation was limited to a preliminary review of the systems to obtain an understanding of the control environment and the flow of transactions through the accounting system. Our study and evaluation of the internal control systems used solely in administering the nonmajor federal financial assistance programs of the City of Lubbock, Texas did not extend beyond this preliminary review phase. Our study and evaluation was more limited than would be necessary to express an opinion on the internal control systems used in administering the federal financial assistance programs of the City of Lubbock, Texas. Accordingly, we do not express an opinion on the internal control systems used in administering the federal financial assistance programs of the City of Lubbock, Texas. Further, we do not express an opinion on the internal control systems used in administering the major federal financial assistance programs of the City of Lubbock, Texas. 32 Also, our audit, made in accordance with the standards mentioned above, would not necessarily disclose material weaknesses in the internal control systems used solely in administering nonmajor federal financial assistance programs. However, our study and evaluation and our audit disclosed no condition that we believe to be a material weakness in relation to a federal financial assistance program of the City of Lubbock, Texas. We did note certain matters involving the internal control structure and its operation that we have reported to the management of the City of Lubbock, Texas in a separate letter dated February 8, 1991. We reviewed prior year recommendations for implementation and have determined that there are no significant uncorrected recommendations. This report is intended solely for the use of management and the City Council and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report, which, upon acceptance by the City of Lubbock, Texas, is a matter of public record. February 22, 1991 Lubbock, Texas Ca�;� f ,1f.6��' 33 EXHIBIT 2C HOPE HOMEOWNERSHIP PROGRAM CITY OF LUBBOCK/GUADALUPE ECONOMIC SERVICES INC. MEMORANDUM OF UNDERSTANDING March 14, 1992 Organizational Structure Community Development Administrator Sandy Ogletree Guadalupe Economic Services Inc. Richard Lopez Regular Meetings Bi-Monthly line staff meetings to coordinate on -going activities. Bi-Yearly meetings with Directors from the City of Lubbock (hereinafter called the LEAD organiza- tion) and Guadalupe Economic Services Inc. Directors (hereinafter called the Non -Profit) to resolve or estab- lish policy. Responsibilities of the Non -Profit The Non -Profit will perform duties related to monitor- ing of HOPE III purchasers. This monitor will involve home visits to the purchaser at least every quarter and written reports back to the representative of the LEAD organization. These monitors are to comply with the oc- cupancy and resale requirements and restrictions of the HOPE III Homeownership Program. The Non -Profit will also make recommendations to the LEAD organization on the use of Replacement Reserve Funds on any homeowner. This request for use of Re- placement Reserve funds shall be in writing to the LEAD organization and should detail the need for and the items to be replaced together with a cost estimate of anticipated expenditures. The Non -Profit shall perform all counseling and train- ing for the new HOPE homeowners. Homeowners shall attend a minimum of four homeowner training sessions prior to taking ownership to a HOPE property and a minimum of four training sessions after they receive title to the property. It shall be the responsibility of the Non -Profit to design the training curriculum and submit it for approval by the LEAD organization. It 34 shall also be the responsibility of the Non -Profit to assure the LEAD organization that the homeowners are complying with the training requirements. The non-pro- fit is required to achieve a 90% success rate in its performance of the counseling and training component. Responsibilities of the LEAD Organization It shall be the responsibility of the LEAD organization to compensate the Non -Profit for its work under this Memorandum of Understanding at a rate not to exceed $10,000.00. It is understood that this compensation will come directly out of the City's HOPE III:Grant and that should said application not be approved,`this agreement is null and void. Sanc y Ogllevelopment ee Community Administrator Richard Lopez Executive Director Guadalupe Economic Services 35 EXHIBIT 2D CERTIFICATION HOPE III NON-PROFIT Guadalupe Economic Services, Inc. certifies that the members of its Board of Directors serve in a voluntary capacity and receive no compensation, other than reimbursement for expenses, for their services and the non-profit organization operates in a manner so that no part of its net earnings inures to the benefit of any individual, corporation, or other entity. Richard Lopez, Exedut4e Director Guadalupe Economic Ser ices, Inc. 2--2 92- Date 36 �-- EXHIBIT 2E GUADALUPE -K \G E S C ECONOMIC SERVICES ,-, June CORPORATION 9, 1986 Internal Revenue Services 1100 Commerce Street Dallas, TX 75242 Re: Case #756107009E0 Gentlemen: On April 7, 1986 the Board of Directors of Lubbock Guadalupe Neighborhood Association and Guadalupe Neighborhood Council merged to form one Corporation. Due to the geographic service area the Board felt it best to drop the "Lubbock" from the name and elected to take on the name of Guadalupe Economic Services Corporation. We are therefore,requesting that our 501(c)(3) classification be changed to reflect the name change to Guadalupe Economic Services Corporation. Attached is approval from the of further assistance please the number noted below. Sincerely, Richard Lopez Executive Director RL/yj Secretary of State. If we may be do not hesitate to contact me at 37 1416 First Street • Lubbock, Texas 79401 • (806) 744-4416 Internal Revenue Service Department of the Treasury District Director Date: APR 0 9 1987 RECEIVED APR 1 0 1981 p Guadalupe Economic Services Corporation 1416 First St. Lubbock, TX 79401 Date of Exemption: March 6, 1984 Internal Revenue Code Section: 501(c)(3) Gentlemen: Thank you for submitting the information shown below. We have made it a part of your file. The changes indicated do not adversely affect your exempt status and the exemption letter issued to you continues in effect. Please let us know about any future change in the character, purpose, method of operation, name or address of your organization. This is a requirement for retaining your exempt status. Thank you for your cooperation. Item Changed Articles of Incorporation amended April 22, 1986. Articles of Incorporation amended September 19, 1986. dip 1100 Commerce St., Dallas, Texas 75242 38 Sincerely /yours, Glenn Cag e District Director From To Letter 976 (DO) (7-77) d Department of the Treasury Internal Revenue Service AUSTIK, TX 73301 GUADALUPE ECONOMIC SERVICES CORPORATION 1416 FIRST ST LUBBOCK TX 79401-1312 Dear Sirs: In reply refer to: 18160514 AUG. 03, 1988 LTR 139C 75-1867465 0000 00 000 03039 We are sorry, but we assigned you more than one employer identification number. Your correct employer identification number is 75-1867465. Do not use the employer identification number 75-1957603 assigned to you previously; it is incorrect. We will transfer any payments or returns filed under this number to your account under your correct employer identification number. If you have any questions, please write to us at the address shown on this letter. If you prefer, you may call the IRS telephone number listed in your local directory. An IRS employee there may be able to help you, but the office at the address shown on this letter is most familiar with your case. If you write to us, please provide your telephone number and the most convenient time for us to call in case we need more information. Attach this letter to any correspondence to help us identify your case. Keep the copy for your records. Thank you for your cooperation. Enclosure: Copy of this letter Sincerely yours, Ronald Goodwin Chief, Processing Division 39 Exhibit 3: Property Related Activities (If additional space is needed for any answer, please attach it to this exhibit.) Units to be Used In the Homeownership Program. While in many cases the specific properties to be acquired or donated will not be known, a review of currently available properties of the type, size, and in the neighborhood(s) being proposed should provide sufficient information to complete this exhibit. (Section 405 (b)(2) and 415 (b)(6)) 1. Estimate the total number of eligible units available for purchase or donation in the area selected for this program or available for direct purchase by the homebuyer with assistance from the grantee. Total units: 45 2. (a) Provide the approximate number of units estimated to be actually used in the homeownership program from each source listed below: (Section 425 (a)(7)(i)) Source of Property Number to be Acquired by Grantee (A) Number to be Donated from Eligible source (B) Number to be Purchased directly by Homebuyer" (C) Total Number (D) Federal, PHAAHA Properties 1. HUD 12 10 22 2. VA 4 0 4 3. RTC 4 4 1 9 4. FmHA 0 5. PHA/IHA' 6. Subtotal (gems 1 through 5) 20 4 11 35 State & Local Properties 7. State 0 0 8. Local 1.0 10 9. Subtotal (items 7 and 8) 1 20 10 10 10.Total items 6 and 9 20 14 11 45 1 Only scattered site, single family public or Indian housing properties are eligible for use in the HOPE 3 program. Properties owned or held by a PHA/IHA which are not assisted under the U.S. Housing Act of 1937 should be included as State or local properties in line 7 or 8 above. Number of units where grantee is f acilitating the homebuyer's direct purchase from an eligible source and the grantae is not first acquiring the unit or using donated properties. (b) Seethe Notice entitled "Guidance for Applicants Proposing the Use of PHA/lHA Units for HOPE V There are special requirements for documentation that must be included in this application if units in a publicor Indian housing development assisted under the United States Housing Act of 1937 are to be included in the HOPE 3 program. (c) Estimate the number of vacant and occupied units, and the percentage, to be used in the homeownership program. (Section 425 (a)(7)(ii)) units % vacant 45 100 occupied 0 0 Total 45 100% 3. Attach an 81/2" x 11" map(s) indicating the boundaries of the neighborhood(s) in which the program is proposed, and a list of census tracts included in each neighborhood. See attached. Target Area is City—wide. Map contains Census Tracts. 4. Describe the racial and ethnic characteristics of residents of the neighborhoods indicated in # 3 above. (Section 415 (b)(6)(iv)) See attached map. Map contains racial and ethnic characteristics of Target Area. Page [►0 form HU0 40086 5. (a) Estimate the average purchase price to the applicant of the units to be acquired under the program. (Section 415 (b)(13)) (Do not complete if the program proposes only facilitation of direct homebuyer purchase from eligible sources.) Type of Unit Estimated per Unit Purchase Price to Applicant Efficiency $ 1 bedroom $ 10,000.00 2 bedrooms $ 15,000.00 3 bedrooms $ 20, 000.00 4 bedrooms $ 25,000.00 5 or more bedrooms $ 30,000.00 Note: Total of grant and match funds used for combined acqui- sition and rehabilitation costs per unit may not exceed 80%of the FHA 203(b) limits. A list of the 203(b) limits is included in the application packet. Funds otherthan grantor match contri- butions may be used without this limitation. (b) Provide assumptions for the estimated purchase price above, including the basis of the estimate and terms (if any). Our emphasis under this program will be on families needing three bedroom.houses. Our past experience under the Urban Homesteading Program dictates that three bedroom houses in our area willsell for around $20,000. bur Chart on the Initial Affordability section of this application is based on a $15,000 selling price. We would hold the other $5,000 on a promissory note. The term will be either 10, 15 or 20 years payout at 3 or 6% interest. 6. For condominium/cooperative units: (a) Is the applicant proposing to acquire any condominium or cooperative units? 0 Yes X® No (b) Is the applicant proposing to convert any existing units to either cooperative or condominium status for disposition to homebuy- ers under the program? Yes E No if yes, how many units? (c) If the answer to (a) or (b) is yes, describe specifically what is proposed. N/A 7. For all units to be rehabilitated: (a) What is the estimated average rehabilitation cost per unit? $ 20,000 (b) Describe below the assumptions being made in developing this estimate. (Note: HOPE 3 grant funds and match contributions combined for rehabilitation cannot exceed $33,500 per unit.) The rehabilitation of the units will be done by the homeowner utilizing a combination loan/grant from CDBG. It is anticipated that the cost of moving and rehabilitating the houses to be donated by the City for use in the program will elevate the average rehabilitation cost to $20,000 per unit. Our purchase price plus rehabilitation falls well below our mortgage value limits. 8. What are the anticipated sources that will be used to finance rehabilitation? An amount has been budgeted out of HOPE III funds for rehab as well as using CDBG money. Page form HUD40086 10302 RURAL 103 01 MINORITY IMPACTED AREAS CENSUS TRACTS WHERE HISPANIC OR BLACK POPULATION EXCEEDS THEIR, CITY WIDE AVERAGE PERCENT . 4.05 I I I 1 14T. 5 :... r y 404 4021 1 S f 177 1 7911 nrn 4.031 16,1]5) 5 11,59 7 sr n 16.507) 93.548) ) 7 1 7B 71 (4,565) 1706 1702 1601 1602 15 -------Rr—L.7s ' 15.9911 11.6871 11.7781 1601 it 1901 20 1 (3,9841 • 1703 r n 1706 16.4S9 ( (5.617) (6,4211 I5.519)It (7.127) ' 1603 1903 _ 21AI 22.01 rl 11,5.511E ! 15 t51 "lj4 4 71 (2,870) (2.467)17.9 1804 2102 2202 r I 1 I 15,171) 12,6671 (1.001) 17,7601 I 1 10403 10502 C604 *505 10506 I I I 10404 t T, sr "NISL ) 1�---Mr—�AfL-- ---� 05.07 I 1 RURAL 10401 301 (4.938) 6.03• (3245) 6.04 (1,661) gg05 (1,702) 606 (1,192) PIRA. Moe ESTIMATED POPULATION BY CENSUS TRACT CITY OF LUBBOCK POPULATION IN PARENTHESIS PREPARED DECEMBER 1989 CITY OF LUBBOCK PLANNING DEPARTMENT TOTAL POPULATION 194.148 r'— EXHIBIT 3B /Y,m Ow ft W� S ' - !� L 102 i I I I _. , - ram'• _ ';_�_� 4-05 .11 v - 03 nwL. 104_07"r : .fit "''� 0 e '-.171Q2• i60Y 1¢02 11, 14 13 , " 02 U¢ , 18.O1r 1� O1 2Q 23 i7'O3 104.01. 17.98 urw ' 19*. �C�'l �.02- N _ .r- .n.,,,• l; -,L�. L � •Q�$_� lbl$�iti2 5IQ5'� e�Q�r05 010 105.07 s 105.08 104.01 - 1990 CENSUS TRACT i� +bax CENSUS TRACT BOUNDARY O- O t Hope III Target Area (City Wide) 43 1990 Ethnic Breakdown by Percentage Asian/Indian rn Ang10 „ 0 Total Population - 186,206 Panic 9 ,1) African American 8.7 Exhibit 4: Counseling and Training This exhibit Is required for all applicants. Describe the plan for counseling and training homebuyers. (Refer to Section 415 (b)(5)(iv)) Include a description of the topics to be covered, the number of homebuyers estimated to be assisted, the schedule for providing such assistance (for example, each homebuyer will receive X training sessions of X hours before title is transferred, and X hours of followup counseling after transfer), and the provider(s) of these services, if known. Counseling and training for all new homeowners will be provided by the non-profit, Guadalupe Economic Services. Homeowners shall -attend a minimum of four one -hour training sessions prior to taking title to the property and a minimum of four one -hour training sessions after taking possession to the property for a total of 8 hours of training. An estimated 35 families or individuals will be aissisted under this program. Applicants will be processed through training in groups. The non-profit will offer training sessions in a time frame necessary to allow applicants to complete the required pre- occupancy sessions in a timely manner, ideally, one to two sessions per week. The after -occupancy sessions will be held once per month. A minimum of six pre -occupancy and six after -occupancy sessions will be offered. The sessions will be held at a time homeowners most likely will be able to attend. Examples of the classes to be offered are: Money Management, Mortgage & Foreclosure, Code Violations, Crime Prevention, Filing Income Tax Returns, Wills - What Can Happen Without A Will, Insurance Policies - How to File a Claim, Home Maintenance and Repair, etc. A 90% success rate on attendance by homeowners will be required of the non-profit. Page form HUD-40086 Exhibit 5: Economic Development Activities Complete only If HOPE 3 funds or matching contributions are being proposed for this activity. Describe the plan for the economic development activities to be provided to the homebuyers, if any. Include the number of homebuyers estimated to be assisted, the duration of the program, and the approximate numberof hoursof training to be provided. If the applicant is not directly providing these services, include a letterof agreement between the applicant and the provider speci- fying the services to be provided and estimating the number of homebuyers to be assisted. The plan must also include (a) a clear statement of how the proposed economic development activities directly relate to achiev- ing the goals of the proposed homeownership program and (b) how the proposed economic development activities will promote the self-sufficiency of homebuyers. (Refer to Section 405 (b)(12) and 415 (b)(19)) N/A Page 46 form HUD40086 Exhibit 6: Relocation Assistance Complete only If any occupied units will be used In the program. Describe the relocation assistance plan for families that includes (1) the approximate numberof families and individuals who are expected to choose to move; (2) the number of families and individuals who will be temporarily relocated during rehabilitation; (3) the estimated costs; (4) the source of funding; and (5) the organization that will carry out the relocation if different than the applicant. (Refer to Section 415 (b)(5)(ii)) N/A Page 4 7 forth HUD-40086 EXHIBIT 7 PROPOSED ACTIVITIES Downpayment Assistance will be provided to low and moderate income applicants under our New Construction Affordable Housing Program. This is a Joint Venture For Affordable Housing Program which includes the participation of our local FHA office, the West Texas Homebuilders Association and the City of Lubbock. The FHA office reviews applicants referred by the City for an FHA Loan Guarantee, the West Texas Homebuilders have agreed to participate by building houses in low to moderate income areas at prices that are affordable (between $28,000 and $35`,000) and the City provides the residential lots and takes preliminary applications for mortgage financing to be referred to FHA. Often, in dealing with persons of low -to moderate -income families the downpayment is the deterrent in being able to put people in their own house. The downpayment assistance under HOPE III will work in conjunction with our Joint Venture for Affordable Housing Program. It will be utilized in instances where, but for the downpayment, the family would otherwise qualify for a mortgage loan. Administrative costs representing 70 of the total HOPE III Grant is being proposed. The foreseen increased workload of the HOPE and HOME programs make this a necessity. The existing Community Development staff will be increased by one Planner and a Loan Processor. Legal Fees are being included to offset the cost of developing papers incidental to the purchase and sale of properties. It is our intent to retain outside legal services for the sale of the ten properties that will be donated for use in the program. During the development and implementation of our program we envision the need for staff training in the area of Homeowner Counseling and Nurturing. In addition, we hope to be able to train our staff in the area of energy efficiency and homeowner insurance. A minimum of three staff members would receive this training and this training will be ongoing. The money that we have budgeted for Replacement Reserves is vital to the success of the program in its objective of maintaining the long term affordability of the housing provided. Our experience in Rehabilitation has been that low to moderate income families oftentimes let maintenance go in favor of budgeting in other subsistent areas such as food, utilities and medicine. We have found that we can rehab a house this year, but if next year their central heating system goes out, oftentimes they can't afford to 48 fix it. The same thing happens with water heaters, evaporative coolers, doors, windows, etc. The Replacement Reserve Fund is excellent to assist families in keeping up with the house maintenance without rendering the housing unit no longer affordable to them. We propose $25,000.00 for the Replacement Reserve Fund, to be maintained by the City's accounting department. Remaining funds after the program year will be rolled over to next years program Replacement Reserve or used to make up part of the budget in the ensuing years program. Other activities would include appraisals, cost of moving structures to be rehabilitated and sold, cost of loan servicing, cost of managing escrow accounts, property management costs. 49 Exhibit 8: Affordability Analysis (If additional space is needed for any answer, please attach it to this exhibit) A. Type of Ownership 1. Check the type of ownership interest(s) that the homebuyers will acquire under the program. (Section 415 (b)(14)(i)): ® (a) fee simple ownership (except condom inum ownership) Q (d) lease/purchase Q (b) condominum ownership Q (e) other forms of ownership (specify type and describe below) Q (c) cooperative ownership (specify if limited equity cooperative) Note: Other forms must be approved by HUD. 2. Lease/Purchase: H applicant proposes to enter into an interim lease/purchase agreement on any or all of the properties to be used by the program, describe specific terms of lease and purchase agreement. (Section 715 (b)(1) (ii)) N/A B. Financing 1. Are units to be sold at fair market value? Yes Q NoFR 2. What is the anticipated source of the homebuyer's downpayment? Downpayments under our program will be very minimal (0 to 6% of the purchase price). The requirement for .a downpayment under the program will be used as a gauge to determine the seriousness of the homeownership applicant. Except in the case of ten newly constructed.affordable housing units,the applicants will be responsible for the downpayment. 3. What are the anticipated sources that will be used to finance the homebuyer's purchase of the unit, other than for the downpay- ment? (Section 415 (b)(11)(i)(B)(2)) The financing for the purchase of homes will be done in—house (by the City). Flexible mortgages will be used to fit the home to the families ability to pay. Paybacks will be collected and returned to the HOPE III program. We have deter— mined that the price of these homes cannot esceed $20,000. The average sales price will be $15,000 with a Promissory Note for $5,000. 4. Have any commitments for financing the homebuyers purchase been provided to the applicant? Yes Q No ON U Yes, describe source.(Section 415(b)(11)) (Note: Financing commitments are not required at time of program application.) S. For programs proposing to utilize FHA insurance, identify the entity, if any, that is expected to provide a loan to the horrebuyer for downpayment. (Section 110 (f) and 415 (b)(14)(iv)) In the case of newly constructed units under the Affordable,Housing program, FHA insurance is used. This is essentially new construction custom built houses. The downpayment, in instances involving new construction where the family is found to meet low to moderate income guidelines and where but for the downpay— ment the family could receive bank financing, the downpayment will be paid by CDBG out of HOPE III funds. Page 5 p form HUD-40086 C. Initial Affordability 1., Describe in detail all techniques proposed for use in this homehownership program which are designed to ensure the homebuyers initial monthly principal, interest, taxes, and insurance payments (PITI) do not exceed 30 percent of and are not less than 20 percent of the adjusted income of the family. Include all techniques to be used, such as downpayment assistance, sales price reduction, below market interest rate (BMIR) loans, temporary or permanent mortgage buydown assistance, and FHA mortgage insurance. (Section 415 (b)(12)(i)) The Homeownership Program will be geared to making single family properties affordable for purchase by low income families and individuals. Initial affordability will be insured as the Community Development Department of the City of Lubbock will make available to eligible applicants a mortgage subsidy through a low interest mortgage loan. These loans will be processed and serviced through the Community Development Department. They will be settled at a title company. Settlement costs will be eligible expenses to be included in the loan. Minimal downpayments will be required, thus eliminating expensive up front costs to applicants, which in many cases is what keeps a person or family from being able to afford to buy a home. The low interest loan will make homeownership, through, -low monthly payments, within reach of many low income families. The interest rates will be 3% and 6% with terms at 10, 15, and 20 years. A grant subsidy may also be used to lower the sales price of homes as needed to make the loan affordable for potential homeowners. By this, we may in some cases, sell the properties for less than we pay for them and that difference will be a grant subsidy. The rehabilitation of the properties will be done through a loan/grant from CDBG. The maximum that can be spent on a house is $15,000 with the maximum loan being one-half of $15,000. The rehabilitation loans are at 3% interest with a 7-year term. (continued on other side) 2. What is the anticipated average sales price to the homebuyer? (Section 415 (b)(14)) $ 15,000.00 3. What is the anticipated average downpayment, if any, that will be required of the homebuyer? $ 300.00 or 2 % 4. Provide a typical example of a homebuyers anticipated monthly expenditures under this program below: nomeouyer income pram zf: I 22 `� I (Note: PIT] identified in Item 3 must be no less than 20% but not more than 30 % of Line 2) Page 5 1 form HUD -40086 If the combination rehabilitation loan and mortgage loan payments plus taxes and insurance would exceed 300 of the applicants gross income, the rehab grant, through a formula calculation, could be increased to bring the housing expense within 300 of the applicants gross monthly income. The Community Development Department is equipped to service the mortgage loan as the department is already set-up with a special computer program to service the Below Market Rate Rehabilitation Loan. 52 Exhibit 9: Program Schedule Major Milestones. Provide the schedule for implementing the proposed homeownership program, including expenditures on all proposed activities (e.g. acquisition, rehabilitation, sale of properties, counseling, etc.). Indicate the month expenditures for each proposed activitiy is planned to begin and be completed. Properties must be acquired within 1 year of HUD's execution of the grant agreement. Properties must be transferred to eligible families within 2 years of HUD's execution of the grant agreement. If a longer period is needed for transferring ownership interests, submit a roquest and justification with this exhibit. (Section 715) All activities must be completed within a 48 month timeframe unless the applicant justifies a longer period and HUD approves. (Section 705) (Section 415 (b)(4)) Activity Use Time Line to indicate start month and finish month of each major activity 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 PURCHASE HOUSES PHASE I MOVE DONATED HOUSES — PHASE I FAMILY SELECTION PHASE I COUNSELING & TRAINING — PHASE I-- — MOVE HOUSES PHASE II PURCHASE HOUSES PHASE II FAMILY SELECTIO PHASE II COUNSELING & TRAINING — PHASE PROPERTY MGMT. ALL PROPERTIES M Ln Page = form HUD-40086 SECTION 11 FINANCIAL INFORMATION 54 Exhibit 10: HOPE 3 Program Budget (Applicant must submit this form as part of the application) Enter the amount of HOPE 3 funds and all other funds proposed forthe activities listed below. See Section 405 (b) fora description of the HOPE 3 eligible activities and Section 410 (b) for eligible matching contributions. Other contributions necessary to accomplish the homeownership program, but not included in the HOPE 3 funds (column A) or Matching Contributions (columns B and C), should be entered in column D. (A) (B) (C) (D) (E) Uses of Funds (See Eligible Activities) HOPE Funds Cash Matching iIn-lendContributions Matching Other Funds or Total Program Contributions Contributions 1. Acquisition by Applicant or Donation of Eligible Properties to Applicant 2. Closing Costs on Properties Acquired by Applicant 3. Financial Assistance to Homebuyers for Acquisition (a) Interest Rate Reductions (b) Down Payment Assistance (c) Homebuyer Closing Costs (d) (Other - soecifv) $5109000 $ $280,000 $ $ 510,000 $ 30,000 $ $ $ $ 30,000 $ $ Is $ $ 73 T 20,000 $ $ $ $ 20 000 $ 30,000 $ $ $ $ 30,00 4. Rehabilitation of Eligible Properties $ $ $ $ $ (sum of Col. A, B, and C cannot 300,000 300,000 ' exceed $33,500 per unit) 5. Architectural & Engineering $ 0 $ $ $ $ 0 6. Relocation of Eligible Families who $ 0 $ $ $ $ Elect to Move 0 7. Temporary Relocation of Homebuyers $ $ $ $ $ During Rehabilitation 0 0 8. Legal Fees (excluding closing costs) $ 3,500 $ $ $ $ 3,500 9. Replacement Reserve $ 25,000 $ $ $ $ 25,000 10. Counseling & Training of Homebuyers $ 10,000 $ $ $ $ 10,000 11. Applicant Training $ 3000 $ $ $ $ 3,00012. Economic Development (sum of Col. A + B $ $ $ $ $ + C plus amount received under planning grant cannot exceed $250,000) 13.Other Activities $ $ $ $ Requiring HUD Approval 14.0ther Matching Contributions (a) Waived, foregone or deferred taxes, fees, and other charges $ $ > $ : $ $ $ (b) On -site and off -site Infrastructure $ (c) Debt forgiveness $ (d) Other Donated !abor S (e) Other in -kind matching contributions $ 280,000 15.Activities funded from other contributions $ $ not included above (non -HOPE and non -matching ) 16.Subtotal (Lines 1 through 15) $ 931,500 $ $ 280,000 $ . $ 1,211,500 17.Administrative Costs (Col. A + B + C must $ $ $ $ $ not exceed 15%ofline l6A;sum ofCol. B 69,863 65,205 135,068 and C must not exceed 7% of line 16A) 18.TotalProgram Costs Sum of Column 18B + 18C must equal or $ 1,001,363 J$ $ 345,205 $ $ 1,346,568 exceed 33% of tine 18A. Page 5 5 form HUD40086 Exhibit 11: Matching and Other Contributions The City of Lubbock has acquired over 30 houses along the West side of Indiana Avenue as Right -of -Way for the expansion of the avenue. No Federal funds were used to acquire these properties, rather Local Bond Revenue Funds. -Almost 1000 of the houses were standard at -the time of acquisition and their Fair Market Value As -Is for most of the houses would be estimated at over $28,000.00. The properties are presently owned by the City of Lubbock and at least 10 of those are being proposed to be used as the City's Local hatch for this HOPE III Grant. The total Fair Market Value being estimated for these properties for the purposes of Local Match is $280,000.00. The properties will be donated by the City for use in its local HOPE III Homeownership Program. In addition to the properties acquired along Indiana Avenue, the City currently has other habitable houses in its inventory which could easily be used for this program. A second source of habitable properties has been identified through the Lubbock Central Appraisal District. The District has many properties which it has taken over for taxes and we are in contact with them for the possibility of having some of these properties used for the HOPE Homeownership Program. A contribution or Local Match of 7% for Administrative Costs as allowed by Federal Regulations is being contributed as Local Match out of CDBG funds by the City of Lubbock. The total allowed in administrative costs from local funds being contributed is $65,205.00. 56 Exhibit 12: Sales and Resales Proceeds A. Those applicants proposing to acquire or receive donations of properties for sale to eligible families must provide a plan for use of proceeds from such sales. All applicants must also provide a plan for use of proceeds families may not retain upon resale. Include (1) an estimate of property sale proceeds from initial homebuyers, (2) an estimate of sale proceeds that homebuyers may not retain upon resale to a subsequent homebuyer, and (3) all anticipated uses of the sales proceeds and resale proceeds that homebuyers may not retain as described in Sections 720 (d) and 725. (Section 415 (b)(18)) B. Identify who will be responsible for ensuring that (1) the sales and resales proceeds are collected, (2) they are used for approved purposes after grant closeout, and (3) amounts due HUD are repaid. Give name and title, full address and telephone number for the grantee official who will be responsible for each of these tasks. The Plan of the City of Lubbock for the use of sales proceeds to eli- gible families and amount families may not retain upon resale is simply to reinvest those proceeds in the purchase of additional eligible housing resources to continue providing affordable homeowner- ship opportunities to those in need of housing. Any other program income will likely be so invested. Our past experience in the Urban Homesteading program has shown us that families who are afforded homeownership opportunities are very stable. Out of 34 homes we have awarded in the Urban Homesteading Program, no houses have turned over either to foreclosure or resale. We are very hopeful that this trend will continue in the HOPE III Homeownership Program. A Sales Proceeds Plan has been developed as follows: 1. Sales proceeds will be carefully tracked to clearly distin- guish these funds from other types of program funds. 2. Assuming'a twelve month period for 30 property sales at an average monthly payment of $125.00, the estimate of property sale proceeds would be $45,000. 3. Assuming that three of those properties were sold and the proceeds not retained by the homeowner and further assuming that the sales price to the initial homebuyer was $20,000, the estimate of sale proceeds that the homeowner may not re- tain upon resale to a subsequent buyer is $60,000. No other program income is anticipated. The total estimated and uncommitted sales proceeds would be $105,000. These or any such proceeds will be spent to purchase additional houses before additional grant amounts are drawn down. The person responsible for insuring that the program income is col- lected, used for approved purposes after grant close-out and amounts due HUD are repaid is: Juan Antonio Reyes Rehabilitation & Redevelopment Coordinator 1625 13th Street, Room 107 Lubbock, Texas 79401 (806) 767-2294 Page = form HUD-40OW SECTION III OTHER SELECTION FACTOR INFORMATION 58 Exhibit 13: Local Support A. Describe any evidence of commitment from the local government to support the program not previously listed, such as the provision of supportive services (including counseling and training), rehabilitation loans or grants, etc. (Section 425 (a)(2)()) B. Describe any evidence of commitment of the local community to the program (including churches, banks, neighborhood or community organizations) not previously listed. (Section 425 (a)(2)(ii)) If commitments have been obtained from either the local government or the local community, attach any available evidence of the commitment(s) (if not provided elsewhere with this application). The City will support the HOPE III Homeownership Program by providing services that are key to the success of the Program. For example, through its Community Development Program, the City of Lubbock will provide funds to do the rehabilitation of some of the houses acquired for the Program: In addition, the City will provide the funds necessary to carry out all appropriate property management activities. In addition, local community based organizations have lent their support to the Program. The Local League of United Latin American Citizens, Catholic Family Services, Guadalupe Economic Services, Inc. and the American G.I. Forum are all familiar with the endeavors of the City in putting together this application and they are supportive -of our efforts. Page S 9 form HUD40086 Exhibit 14: Long Term Affordability Plan Describe what measures will betaken to ensure the continued affordability by the homebuyers of their properties.The plan should take into account the costs of operating and maintaining the property after the homebuyer's purchase. If energy conservation improvements are to be provided, include a description of these improvements here.(Section 415 (b)(12)(ii) and Section 425 (a)(3)(i)) Long term affordability will be insured by the low interest mortgage loans which will make the payments affordable from the inception of the loan. Also, the grant/loan rehab will bring the house to the City of Lubbock's Minimum dousing Code thus eliminating major problems and expenses during the first several years of homeownership. Since the grant/loan rehab is part grant and part a low interest loan (30), this will also insure long term affordability. Items addressed in the rehab will be cost energy measures, such as the installation of storm windows, storm doors, insulation, caulking, etc., thus making utility costs more affordable. The Replacement Reserve will also be available for homeowners to tap into if necessary for any major repairs which they may not be able to afford. Nurturing classes will be offered that will acquaint the homeowners with ways to save energy and maintenance, thus cutting down on utility and maintenance costs. Some taxes will be saved when the homeowners file for homestead exemption and elderly or disabled exemptions, if applicable. We will make sure the homeowners are aware of these exemptions. Page 6 form HUD-40086 0 Exhibit 15: Relationship to Comprehensive Housing Affordability Strategy (CHAS) Not applicable to Indian tribes or IHAs Provide a statement as to whether the proposed homeownership program has been included as one of the general priorities in Section II, Part 3, of the appropriate jurisdiction's CHAS, pursuant to Section 105(b)(7) of the National Affordable Housing Ad. If the proposed program would be carried out in more than one jurisdiction, include a statement regarding each applicable jurisdiction. (Section 425 (a)(4)) The proposed homeownership program has been included at level three as one of the general priorities in the City of Lubbock's approved CHAS. Due to the compressed timeframe for the development of the CHAS, the priorities 'and strategies are conservative, but the five year proposal is to provide 125 units of new construction of owner occupied housing and 125 units of new homeownership opportunities. The City of Lubbock's focus will continue to be towards the preservation and utilization of existing housing. Additionally, infill development of affordable housing will continue to be a priority. Page 61 form HUD-40086 Exhibit 16: Minority Business Enterprise and Women -Owned Business Enterprise Describe the applicant's commitment to promoting the use of minority business enterprises and women owned businesses. Indicate whether the applicant has used such businesses in the past, and/or describe specific affirmative steps it will take to en- sure that such businesses have an equal opportunity to compete and obtain contracts. (Section 425 (a)(6)) For Indian tribes or IHAs, describe the applicant's commitment to promote the use of minority business enterprises and women - owned businesses consistent with, but not in derogation, of the Indian Self -Determination and Education Assistance Act. The City of Lubbock has Affirmative Fair Contracting Policies in effect and has continually done a better than average job of utilizing Minority Business Enterprises and Women Businesses. In the Community Development Rehabilitation and Affordable Housing Redevelopment Programs, 50% of the contractors are Minority Business Enterprises. In 1989 the City of Lubbock was recognized by the Office of Community Planning and Development of the U.S. Department of Housing and Urban Development for Outstanding Performance in Minority Business Enterprise. The City has worked closely with the local Hispanic Chamber of Commerce in promoting Minority Business Enterprise. A recent COMA Chamber Newsletter (the Hispanic Chamber) reported that the City has spent over one million dollars with minority businesses. The City works actively with COMA in getting minority businesses certified to qualify to bid on specialized jobs. Page form HUD-40088 Exhibit 17: Fair Housing Choice Not applicable to applications submitted by Indian tribes or IHA's HUD will assess the degree to which the applicant's proposal furthers fair housing choice. Fair housing choice means the ability of persons regardless of race, color, religion, sex, handicap, familial status or national origin of similar income levels, to have available to them the same housing choices and opportunities to buy in a variety of neighborhoods. Describe how the program will further fair housing choice in the community through (a) the affirmative fair housing marketing strategy, submitted as part of Exhibit 1 (B) of the application, and/or (b) the selection of the neighborhood(s) in which the program will be carried out. (Section 415 (i)(B) and Section 425 (a)(9)) The City of Lubbock promotes Fair Housing and Equal Opportunity in all of its endeavors. In 1990 the City's efforts in promoting Fair Housing and Equal Opportunity were cited in a HUD monitoring letter. The City's effort in reaching those least likely to apply for homeownership programs for the low income are continual. To give you an example of the Equal Opportunity and Fair Housing work done by the Community Development Department, under the Urban Homesteading Program 34 houses were awarded, nineteen, or 56%, went to Hispanics who make up roughly 24% of the population. Five, or 15%, went to Blacks who make up roughly 8% of the population, nine houses, or 26% went to Anglo Saxons, -and one, ox 3% went to Asian Americans. Page 6 3 forth HUD40086 Page I of 8 ATTACHMENT 2 GRANT PROPOSAL EVALUATION FORM COVER SHEET GRANT NAME: GRANT AGENCY: GRANT FISCAL PERIOD: MONTH/DATE/YEAR TO MONTH/DATE/YEAR CITY DEPARTMENT/INDIVIDUAL PREPARING GRANT: (Whom to contact in case f qu stions) APPROVALS: 424-h-, DEPARTMENT JOAT DIVISION DIRECTOR K ANT CITY MANAGER OR CHIEF OF POLICE BUDGET & RESEARCH DIRECTOR DEPUTY CITY MANAGER Upon completion of approvals, return to: 40 DATE DATE DATE 3 - 2y -q -?- DATE 3 0 1 2' DAT NDIV UAL CITY DEPARTMENT OR SECTION DEADLINE DATE (IF APPLICABLE) A25-1 Page 2 of 8 CITY OF LUBBOCK GRANT PROPOSAL EVALUATION FORM INSTRUCTIONS: This form must be completed and signed by the appropriate individuals in order for a grant application to be evaluated and approved by the City Manager. 1. State, as clearly as possible, the goals and objectives of the proposed project for which a grant is being sought. To increase the supply of affordable owner occupied homes in Lubbock. A. Is this the fulfillment of an identifiable community (Lubbock) goal? If so, list the source of the identified goal. Yes. Comprehensive Housing Affordability Strategy identified homeownership opportunities and preservation of existing housing stock as top priorities. B. Is this the fulfillment of an identifiable community (Lubbock) need? If so, please provide quantifiable data (studies, etc.) that illustrate the community need and how this grant will meet that need: Yes A25-2 Page 3 of 8 2. List at least three measures by which City Staff and City Council might be able to evaluate the program in order to determine that it has reached the goals and objectives described in Question 1. # of households assisted # of houses rehabilitated # of houses constructed 3. Will this program benefit the Lubbock community as a whole? If not, please provide a detailed profile of the individuals or groups that will benefit from the program. Yes 4. Are other agencies (other than the City of Lubbock) available to administer this program? If so, list the agencies: No A25-3 Page 4 of 8 5. Are other agencies administering similar programs? If so, list the other agencies. If not, why not? No 6. Is the program or activity provided by this grant required by state or federal law or required as a condition of other ongoing state or federal programs? Please explain: No 7. Does the grant require a local match? If so, in what amount? Is the match in the form of cash or an in -kind contribution? Yes. 33% match to be provided by market value of City owned structures donated to the program and administrative costs. A25-4 Page 5 of 8 8. Is the grant for capital or operating programs? Please describe specifically what the funds will be used for (personnel, supplies, services, capital outlay, capital project, etc.). 67,000 — operating expenses 1,000,000 — rehabilitation of properties A. If the grant is for capital outlay or a capital project, will it result in ongoing City operational costs? If so, explain in detail. M B. If the grant is for an operating program or programs, is it a one-time grant which will result in ongoing City expenses, if the program is to be continued in the future? -- It should continue in future years. A25-5 Page 6 of 8 C. Does the grant require continuation of the program, at City expense, after grant funding has expired? If so, how long will the City be obligated to expend local funds, and in what areas? Be specific. W 9. Is the grant a one-time grant, a one-time grant with an option to renew the grant, or an on -going grant? If the grant is ongoing, how many years has the grant been provided to the City, and what year does the upcoming period represent (2nd year, 5th year, etc.). If the grant has an option to renew, how often can it be renewed, and what are the terms of renewal? Please explain. it should continue in the future 10. Are indirect costs reimbursed by the grant? IMO A25-6 Page 7 of 8 11. Are grant audit costs reimbursed by the grant? No 12. What is the immediate (twelve-month) impact of the grant program on City employee allocation and utilization? How will this affect their work hours, productivity, etc. on City programs and activities? We are proposing the addition of one staff member to handle the increased workload associated with the program. 13. What is the long-term (five-year) financial and manpower impact of the grant program both on the community and on the City organization? limited. A25-7 Page 8 of 8 14. Provide, in as much detail as possible, a 5-year Revenue and Expenditure Projection for the grant related program beginning with the current year or the first year this grant will be in effect. Show any on -going costs to the City, even if the grant is only for one year. If the grant is renewable or ongoing, show the estimated revenues and expenditures for future years that you intend to renew/continue the grant (up to five years). Be sure to fully explain the source and type of revenues (in -kind contribution, reimbursement of expenses, etc.) and fully explain the specific types of expenditures (payroll for 1/2 time clerk, purchase desk, capital project construction, etc.). Attach additional sheets if necessary. FOR GRANT FISCAL YEAR (From to ): 1992-93 19 19 19 19 Revenues Federal Grant 1,000,000 State Grant Local Match 330,000 Other Total Revenues 1,330,000 FOR GRANT FISCAL YEAR (From to ): 19 19 19 19 19 Expenditures Personnel 67,000 Supplies Maintenance Other Charges Capital Outlay Capital Project 1,263,000 Total Expenditures 1,330,000 A25-8