There is herewith created a Rehabilitation Assistance Program (RAP) in the city. The purpose of this RAP is to improve the condition of housing and the quality of life in Tulare by providing a means through which property owners in designated neighborhood conservation areas in Tulare, which are deteriorating, may obtain financial assistance to rehabilitate their property. It shall be the policy of the RAP to encourage the existence of low and moderate income housing and to preserve the residential character of designated areas. The methods to be used consist of concentrated code enforcement, low cost long term loans for property rehabilitation and public improvements necessary to insure the success of rehabilitation areas.

(1995 Code, § 11.04.010) (Ord. 97-1800, passed - -1997)

   Unless the context otherwise requires, the following definitions govern this title.

   CITY. The City of Tulare.

   CODE ENFORCEMENT AREA. The same meaning as “neighborhood conservation area.”

   DEFERRED/SHARED APPRECIATION LOAN. A loan made to a low-income owner-occupant of a property requiring residential rehabilitation made pursuant to Chapter 11.28 of this title.

   DESIGNATED AREA. The same meaning as NEIGHBORHOOD CONSERVATION AREA.

   FINANCING. The lending of money for the purpose of residential rehabilitation to a property which is subject to residential rehabilitation.

   GENERAL PROPERTY IMPROVEMENTS. Those items of residential rehabilitation which are not necessary to remedy existing violation of city codes relating to the physical condition of structures or incipient violations thereof.

   HOUSING ADVISORY APPEALS BOARD. A board established by the Housing Code of the city as adopted by § 4.20.010 of the City Code of Tulare, California.

   INCIPIENT CODE VIOLATION. A physical condition which can be expected to deteriorate into a violation of a rehabilitation standard within two years.

   LOAN COMMITTEE. The Committee established in accordance with this title.

   NEIGHBORHOOD CONSERVATION AREA. The geographical area designated by the City Council, including approved redevelopment project areas, for inclusion in a comprehensive residential rehabilitation financing program pursuant to the provisions of this title. It may also be referred to as the “designated area,” “redevelopment project area,” “code enforcement area” or “residential rehabilitation area.”

   PARTICIPATING PARTY. Any persons, company, corporation, partnership, firm or other entity or group of entities requiring financing for residential rehabilitation pursuant to the provisions of this title.

   PROGRAM. The Rehabilitation Assistance Program described in this title and includes, but is not limited to, the provisions for code enforcement, rehabilitation financing and installation of public improvements in neighborhood conservation areas.

   REHABILITATION ASSISTANCE PROGRAM or RAP. The same meaning as program.

   REHABILITATION STANDARDS. The standards of the city’s Housing Code, approved redevelopment plans or standards adopted thereto and other applicable city codes relating to the physical condition of structures.

   RESIDENCE. Any residential dwelling unit which is located in a neighborhood conservation area.

   RESIDENTIAL REHABILITATION. The construction, reconstruction, renovation, replacement, extension, repair, betterment, equipping, development, embellishing or otherwise improving residences consistent with the standards of strength, effectiveness, fire resistance, durability and safety so that such structures are satisfactory and safe to occupy for residential purposes and are not conducive to ill health, transmission of disease or infant mortality.

   RESIDENTIAL REHABILITATION LOAN FUND. The fund established with federal, state or local funds allocated by the City Council; loan repayments; and funds from gifts and other sources.

   REVENUES. All amounts received as payment of principal, shared appreciation and all other charges received for and all other income and receipts derived by the City of Tulare from the financing of residential rehabilitation, including such other monies as the City Council may, in its discretion, make available therefor.

   STANDARD RAP LOAN. Any residential rehabilitation loan made pursuant to the provisions of this title which is not a deferred/shared appreciation loan.

(1995 Code, § 11.04.020) (Ord. 97-1810, passed - -1997; Ord. 97-1800, passed - -1997)

   (A)   Unless otherwise indicated, all public officials and public agencies named in this title are officials and agencies of the city.

   (B)   Whenever a city official is referred to in this title, the reference includes that official and his or her designee or designees.

   (C)   All references to the Charter, code or to title are references to the Charter or code of the city.

(1995 Code, § 11.04.010) (Ord. 97-1800, passed - -1997)

   The City Council may, subject to budgetary and fiscal limitations, appropriate monies to implement the program including, but not limited to, principal, interest and shared appreciation payments made to the city by property owners in repayment of loans made by the city pursuant to the provisions of this program.

(1995 Code, § 11.08.010) (Ord. 97-1800, passed - -1997)

   The area within the Alpine Redevelopment Project, including Amendment No. 2 to the Alpine Redevelopment Plan and the West Tulare Redevelopment Project, shall be deemed designated as neighborhood conservation areas.

(1995 Code, § 11.08.020) (Ord. 99-1847, passed - -1999)

   The City Manager shall be responsible for the administration of all aspects of the RAP except those for which responsibility is specifically retained by the City Council. The City Manager shall have such authority as may be reasonably necessary to carry out these responsibilities.

(1995 Code, § 11.12.010) (Ord. 97-1800, passed - -1997)

   The City Manager may establish fees and special charges which he or she deems appropriate which shall be levied against participating parties in order to carry out the intended purposes of this title.

(1995 Code, § 11.12.020) (Ord. 97-1800, passed - -1997)

   Fees and charges for financing residential rehabilitation may be revised from time to time by the City Manager. The revisions may reflect changes in loan fund availability, losses due to defaults and bona fide changes in loan servicing charges related to the administration of the program under the provisions of this title.

(1995 Code, § 11.12.030) (Ord. 97-1800, passed - -1997)

   There shall be a Loan Committee appointed by the Council consisting of five members as follows:

   (A)   At least one member shall be the Redevelopment Director of the City of Tulare. The Redevelopment Project Manager shall be the alternate to the Redevelopment Director.

   (B)   At least one member shall be from a neighborhood conservation area who shall be nominated by the Project Area Committee or other citizen group for the area.

   (C)   One or more member shall be qualified in the field of real estate lending and financing.

(1995 Code, § 11.16.010) (Ord. 06-2019, passed 6-6-2006; Ord. 03-1915, passed - -2003; Ord. 99-1847, passed - -1999)

   The functions of the Loan Committee are as follows:

   (A)   The Loan Committee shall review periodically the rules, regulations, procedures and standards for the granting of residential rehabilitation loans and shall recommend changes when desirable to the City Manager.

   (B)   The Loan Committee shall review and approve or disapprove all loan applications.

(1995 Code, § 11.16.020) (Ord. 97-1800, passed - -1997)

   Decisions of the Loan Committee may be appealed to the City Manager who may modify such decisions as he or she deems appropriate.

(1995 Code, § 11.16.030) (Ord. 97-1800, passed - -1997)

   Outstanding loans on the property to be rehabilitated, including the amount of the loan for rehabilitation, shall not exceed 95% of the anticipated after-rehabilitation fair market value of the property to be rehabilitated, as determined by the City Manager, except that the Loan Committee may authorize loans of up to 110% of the anticipated after-rehabilitation fair market value of the property if:

   (A)   There is demonstrated need for such higher limit; and

   (B)   There is a high probability that the value of the property will not be impaired during the term of the loan.

(1995 Code, § 11.20.010) (Ord. 99-1847, passed - -1999)

   The maximum amount loaned for rehabilitation for each residential dwelling unit within the meaning of the term as defined in this title shall be $75,000.

(1995 Code, § 11.20.020) (Ord. 06-2005, passed 2-21-2006; Ord. 99-1847, passed - -1999)

   No more than 20% of any loan for residential rehabilitation shall be used for general property improvements, except that in the case of owner-occupied, one-to-four residential dwelling unit properties, up to 40% of the loan may be used for general property improvements.

(1995 Code, § 11.20.030) (Ord. 97-1800, passed - -1997)

   A RAP loan may include necessary and reasonable costs incidental to obtaining fee title to the property to be rehabilitated. Such costs may include costs of assuming an existing obligation on the property or the necessary and reasonable costs of obtaining a new loan.

(1995 Code, § 11.20.040) (Ord. 97-1800, passed - -1997)

   Prior to the granting of any loan under this title, a qualified rehabilitation inspector will certify in writing that the estimated cost of the recommended work as detailed in the job specifications is reasonable. Prior to the payment of the last installment due under the contract, the rehabilitation inspector will make an on-premises inspection and sign a certificate of completion and conformance certifying that the work as outlined in the job specifications has been completed satisfactorily.

(1995 Code, § 11.20.050) (Ord. 97-1800, passed - -1997)

   Each owner of property located within a neighborhood conservation area is eligible for a standard RAP loan, subject to loan fund availability, provided the owner demonstrates to the satisfaction of the Loan Committee the ability to repay such a loan, applies for the loan within a time period to be designated by the City Manager and meets the other requirements of this title. A standard RAP loan may be made to investor/owners and owner-occupants having an income above 80% of median income for Tulare County. The property owner shall agree to all conditions of the loan agreement as a prerequisite to obtaining a loan. No elective officer of the state or any of its subdivisions shall be eligible to receive a loan under the provisions of this title.

(1995 Code, § 11.24.010) (Ord. 97-1800, passed - -1997)

   The maximum repayment period shall be 20 years.

(1995 Code, § 11.24.020) (Ord. 97-1800, passed - -1997)

   The interest rate for the standard RAP loan is established at 3% simple per annum.

(1995 Code, § 11.24.030) (Ord. 97-1800, passed - -1997)

   There shall be no penalty assessed for prepayment of any standard loan.

(1995 Code, § 11.24.040) (Ord. 97-1800, passed - -1997)

   Each RAP loan shall be secured by a deed of trust, which may be other than a first deed of trust, naming the city as beneficiary of the trust.

(1995 Code, § 11.24.050) (Ord. 97-1800, passed - -1997)

   All RAP loan agreements shall provide that so long as the loan or any portion of it is outstanding, the owner of the property subject to the loan shall carry adequate property insurance and provide duplicate copies of insurance policies to the city. The City Manager shall establish standards for determining what amount of property insurance is adequate.

(1995 Code, § 11.24.060) (Ord. 97-1800, passed - -1997)

   If the City Manager deems it desirable and necessary to effectuate the purposes of the program that an impound account be required to assure timely payment of taxes, insurance or a maintenance reserve, he or she may, unless precluded from doing so by state or federal law, include such a requirement in any RAP loan agreement.

(1995 Code, § 11.24.070) (Ord. 97-1800, passed - -1997)

   The unpaid balance of a standard RAP loan shall be declared due and payable upon sale or transfer of the ownership of the property, except in the case where a single-family dwelling unit is sold to a low-income purchaser who will be the owner-occupant, then the loan may convert to a deferred/shared appreciation loan in accordance with the terms and eligibility requirements of Chapter 11.28 of this title. In the event of the death of one or more of the mortgagors, transfer of the loan may be made to a spouse or heir who occupied the property at the time of mortgagor’s death and is otherwise eligible for a standard RAP loan.

(1995 Code, § 11.24.080) (Ord. 97-1810, passed - -1997; Ord. 97-1800, passed - -1997)

   Loan charges for RAP loans shall be established pursuant to the provisions of this title and may include amounts to cover the cost of servicing loan accounts and penalties for late payments.

(1995 Code, § 11.24.090) (Ord. 97-1800, passed - -1997)

   The RAP program shall be carried out in a nondiscriminatory manner, in compliance with Civil Rights Act provisions in effect and Executive Order No. 11063 pertaining to equal opportunity in housing.

(1995 Code, § 11.24.100) (Ord. 97-1800, passed - -1997)

   The provisions of this title as they relate to enforcement of nondiscrimination on the basis of race, age, sex, marital status, color, religion, national origin or ancestry are enforceable by the city. Violation of the loan agreement provisions required by this title may result in any outstanding financing obtained pursuant to the loan agreement becoming immediately due and payable.

(1995 Code, § 11.24.110) (Ord. 97-1800, passed - -1997)

   Deferred/shared appreciation loans are hereby established as a part of the rehabilitation assistance program. The purpose of a deferred/shared appreciation loan shall be to provide financial assistance in the form of a deferred principal loan to low-income owner-occupants of property subject to residential rehabilitation having an income of 80% of median income, or below, for Tulare County.

(1995 Code, § 11.28.010) (Ord. 97-1810, passed - -1997; Ord. 97-1800, passed - -1997)

   A deferred/shared appreciation loan of up to $75,000 may be made to a low-income applicant who is the owner-occupant of a one-to-four unit residential dwelling unit building.

(1995 Code, § 11.28.020) (Ord. 06-2005, passed 2-21-2006; Ord. 99-1847, passed - -1999)

   A deferred/shared appreciation loan shall be for a maximum term of 75 years and shall be due and payable upon transfer of the property unless the property is transferred to another party who is eligible for such a loan pursuant to this title and accepts the assignment of the rights and obligations of the deferred/shared appreciation loan.

(1995 Code, § 11.28.030) (Ord. 97-1810, passed - -1997; Ord. 97-1800, passed - -1997)

   Upon transfer of property subject to a deferred/shared appreciation loan, or an interest therein, to a spouse or heir who occupied the property at the time of mortgagor’s death and who is otherwise eligible for a deferred/shared appreciation loan, if the surviving spouse or heir so chooses and occupies the property, the deferred/shared appreciation loan may be transferred to the spouse or heir. A deferred/shared appreciation loan may not be transferred more than once.

(1995 Code, § 11.28.040) (Ord. 97-1810, passed - -1997; Ord. 97-1800, passed - -1997)

   The deferred/shared appreciation loan shall, however, be forgiven at the end of 15 years if the property is still occupied the property owner or his or her rightful spouse or heir in accordance with this chapter.

(1995 Code, § 11.28.050) (Ord. 97-1810, passed - -1997)

   If the owner sells the property at a bonafide sale for fair market value (FMV), the total amount due the city shall be determined based upon the following formula:

   (A)    The original value of the deferred/shared appreciation loan be divided by the FMV after rehabilitation of the property as determined by a qualified appraiser at the time of rehabilitation. This ratio shall be known as the Shared Appreciation Value Ratio (SAVR).

   (B)    The amount due the city shall be lesser of:

      (1)   The SAVR multiplied by the sales price of the property; and

      (2)   The amount calculated by taking the sales price of the property and subtracting from it the amounts paid out upon sale of the property to satisfy debts owed on the property which were in a secured position superior to that of the deferred/shared appreciation loan and the costs of any capital improvements paid for by the property owner and the amount of all closing costs paid by the owner. By way of example only, the following two alternatives demonstrate the methodology for calculating the amount to be paid back to the city upon sale of the property.

 

 

(1995 Code, § 11.28.060) (Ord. 97-1810, passed - -1997; Ord. 97-1800, passed - -1997)

   Deferred/shared appreciation loans shall be secured by a deed of trust, which may be other than a first deed of trust, naming the city as beneficiary of the trust.

(1995 Code, § 11.28.070) (Ord. 97-1800, passed - -1997)

   Notwithstanding the provisions of this chapter, each provision required to be contained in a standard RAP loan agreement pursuant to this title shall also be contained in each deferred/shared appreciation loan agreement.

(1995 Code, § 11.28.080) (Ord. 97-1800, passed - -1997)

   Any funds given to or received by the city specifically for the purpose of providing deferred/shared appreciation loans may be accepted by the City Manager for that purpose.

(1995 Code, § 11.28.090) (Ord. 97-1800, passed - -1997)

   In addition to moving costs, a tenant displaced because of rehabilitation of the dwelling unit or building in which the tenant lives may be eligible for other relocation assistance. The city shall be responsible for the relocation of tenants in residential units displaced due to the program, subject to the availability of funds for this purpose. All reasonable efforts shall be made to minimize or avoid displacement of tenants.

(1995 Code, § 11.32.010) (Ord. 97-1800, passed - -1997)

   In the event that funds for rehabilitation loans become available through a state or federal program on equal or more favorable terms than standard RAP loans or deferred/shared appreciation loans, every effort shall be made to convert to the use of such loans in existing neighborhood conservation areas.

(1995 Code, § 11.32.020) (Ord. 97-1800, passed - -1997)

   The provisions of this title, being necessary for the welfare of the city and its inhabitants, shall be liberally construed to effect its purposes.

(1995 Code, § 11.32.030) (Ord. 97-1800, passed - -1997)

   If any provision of this title, or the application thereof to any person or circumstance, is held invalid, the validity of the remainder of the title and the applicability of such provisions to other persons and circumstances shall not be affected thereby.

(1995 Code, § 11.32.040) (Ord. 97-1800, passed - -1997)