18-62 Approval of Grant for CDBG- Disaster Relief II Funds

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The Recipient must ensure that a lien is executed and recorded on every property that receives assistance through the Project. The Recipient must execute a lien and restrictive covenant prepared by IHCDA. The affordability period for a property starts at the time that the Recipient submits its completion reports for that property to IHCDA and these reports are approved. Therefore,it is in the homeowner's best interest for the Recipient to submit the completion reports to IHCDA as • soon,as possible. RECAPTURE OF ASSISTANCE Recapture Event, if any of the following events occurs,IHCDA will recapture the amount of amount of eligible CDBGD funding associated with the rehabilitation including,ER,Lead and Program Delivery. A. the homeowner transfers or conveys the property by deed,land contract,or otherwise; • B. foreclosure proceedings are commenced against the property; • C. the Real property is transferred by an instrument in lieu of foreclosure;or D. the title to the property is transferred from the homeowner through any other involuntary means. However,if the property is transferred or conveyed to a new owner,who meets the income requirements associated with the Project[income documentation must be approved by IHCDA],agrees to execute a lien and restrictive covenant prepared by IHCDA and use the property as his or her principle residence for the remainder of the affordability period,no recapture of CDBG-D funds are required. If the homeowner passes away during the affordability period,the lien still must be paid off like any other mortgage or lien, however if the property is sold to another low income family who is willing to maintain a lien on the property for the remainder of the affordability period and use the property as his or her principle residence,no recapture of funds is required. Once the homeowner dies the lien will not be forgiven past that date. AMOUNT OF RECAPTURE The amount to be recaptured shall be shall be reduced on a pro rata basis,by dividing the amount of time the homeowner(s) has used the housing for a principal residence during the Affordability Period by the total amount of time in the affordability period If there are not any proceeds,there is no amount to recapture.The net proceeds are the total sales price minus all loan and/or lien repayments. The forgiveness ratio is the ratio that calculates the amount of the subsidy that is forgiven. This ratio shall be calculated at the time of a Recapture Event,by dividing the number of full months that owner occupies the property as its principal residence by the total of number of months in the affordability period. The Recipient is ultimately responsible for repaying IHCDA for any CDBG-D funds utilized for any housing rehabilitated,or repaired that does not remain affordable for the entire affordability period. NON-COMPLIANCE. Non-compliance occurs during the affordability period when any of the following occur: 1) the homeowner no longer occupies the property as his or her principal residence(i.e.,the property is rented or vacant),or 2)the property was sold during the affordability period and the recapture provisions were not enforced and/or neither IHCDA nor the Recipient received notice. In the event of noncompliance,the owner must repay the entire amount of the CDBG-D funds that were invested into the property. Net Proceeds("as defined above")and the forgiveness are not applicable when there is a non- compliance. THEREFORE,IT IS IMPERATIVE THAT TNF OWNER DOES NOT ABANDON OR LEASE THE PROPERTY DURING THE AFFORDABILITY PERIOD. FORM OF ASSISTANCE The Recipient must provide this award as a recoverable grant,amortized loan,or deferred loan directly to the beneficiary. • • LEVERAGING FUNDS There is a ten percent(10%)leveraging requirement for the Award. Proposed leveraging funds should be expended on a pro rata basis with CDBG-D funds to the greatest extent possible. Documentation of eligible leveraging funds expenditure must be submitted to IHCDA with completion reports. In the event an award, considered as eligible CDBG-D leverage, is not made to the housing activity,the Recipient must • provide verification of an alternate source of CDBG-D leverage funding. In the event an eligible source of funding is not secured,all funds under this Agreement will be recaptured by IHCDA. CDBG-D CITY OF SOUTH BEND DR2OR 018-003 Recapture Page 12 of 24 •