CDBG Housing Rehabilitation Program

Housing Rehabilitation


The following description is provided for informational purposes. If you have any further questions about this program, please call the Housing Rehabilitation office at (336) 222-5070.

**We are currently NOT ACCEPTING any more applications for the 2017-2018 fiscal year.  Please check the website at a later date for information on the 2018-2019 fiscal year.**

GENERAL INFORMATION


CDBG & HOME Loan Program


The CDBG and HOME Loan Programs use federal funds to assist low and moderate income homeowners to rehabilitate their home within the City of Burlington and Alamance County.   Assistance for rehabilitation is available as a deferred loan.  Applicants will be denied if the rehab loan amount is not enough to bring the property up to code. To be considered for assistance,an applicant must meet the following criteria: 

REGULAR LOAN

  1. Owner-occupants only(evidence of property deed in applicant's name), 
  2. all loans shall be secured by a Deed of Trust,
  3. applicant(s) must be current on all taxes(County and City at the time of application, and for the life of the loan),
  4. applicant(s) must have current homeowner's insurance policy (at the time of application, and for the life of the loan),
  5. applicant(s) must not have any liens or judgments against them (including bankruptcy--must be discharged), 
  6. applicant(s) total household income does not exceed 80% of the area median income, the "moderate income" limits published in the Department of Housing and Urban Development (HUD) limits for Burlington, North Carolina area,
  7. payments begin the 1st of the month after the rehab has been completed.  Interest accrues at 3%,
  8. no more than one current mortgage allowed on property.  Reverse mortgages are not allowed,
  9. applicant's debt-to-income ratio must not exceed 43%,
  10. trailers must be on a permanent foundation and the applicant(s) must own the land the trailer is located on,
  11. during the repayment period, if the property is sold, the loan becomes due and payable in the total amount outstanding, and
  12. the after-rehab value of the home cannot exceed 95% of HUD's Maximum Housing Value for Alamance County.  The 2017-2018 maximum after-rehab value is $143,450.00.

DEFERRED LOAN
  1. Owner-occupants only(evidence of property deed in applicant's name),
  2. all loans shall be secured by a Deed of Trust,
  3. applicant(s) must be current on all taxes (County and City at the time of application and for the life of the loan),
  4. applicant(s) must have current homeowner's insurance policy (at the time of application and for the life of the loan),
  5. applicant(s) must not have any liens or judgments against them (including bankruptcy -- must be discharged), 
  6. applicant(s) total household income does not exceed 50% of the area median income, the "very low income" limits published in the Department of Housing and Urban Development (HUD) limits for Burlington, North Carolina area,
  7. payment is deferred for up to 10 years with no accrued interest, and may be deferred for a second 10 year term with 3% interest accruing,
  8. no more than one current mortgage allowed on property.  Reverse mortgages are not allowed,
  9. applicant's debt-to-income ratio must not exceed 43%,
  10. trailers must be on a permanent foundation and the applicant(s) must own the land the trailer is located on,
  11. during the deferral period, if the property is sold, the loan becomes due and payable in the total amount outstanding, and
  12. the after-rehab value of the home cannot exceed 95% of HUD's Maximum Housing Value for Alamance County.  The 2017-2018 maximum after-rehab value is $143,450.00.

LOAN ASSUMPTION 
Regardless of the future disposition of the property, the property shall always be occupied by the owner-occupant as long as an obligation exists to the City of Burlington. A family member or buyer cannot assume a CDBG rehabilitation loan and rent out the property. Whenever the property ceases to be owner-occupied, the obligation to the City of Burlington shall be due and payable immediately. A family member or buyer desiring to assume a CDBG loan will be considered under the following conditions and requirements:
  1. All loan assumptions are subject to approval by the City of Burlington,
  2. Deferred Loan Assumption will be considered as follows:
    1. If a family member desires to assume an existing deferred loan, that family member must meet the requirements, terms and conditions of the deferred loan and occupy or plan to occupy the property;
    2. a buyer may assume the remaining total obligation at 3% interest in making the remaining monthly payments, provided the total household income is within the  limits specified by HUD, and the buyer will occupy the property; and,
    3. a family member or buyer that does not qualify for a loan assumption must pay off the remaining outstanding balance prior to title transfer.
  3. Regular Loan Assumption will be considered as follows:
    1. a family member or buyer may assume the total obligation on the remaining monthly payments if the family member's or buyer's total household income is within the limits specified by HUD, and the family member or buyer will occupy the property,
    2. a family member or buyer that does not qualify for a loan assumption must pay off the remaining outstanding balance prior to title transfer.
GENERAL
  1. The HUD  income limits referred to herein are those limits prepared by HUD according to the United States Housing Act of 1937.These limits are revised annually. Our program will use the latest limits available at loan approval.
  2. Special consideration will be given to handicapped or disabled applicants as follows:
    1. A handicapped or disabled applicant will be considered for a deferred loan providing their income is within the "low income" limits specified in HUD Section 8 income limits for Burlington, North Carolina, and
    2. if the status of a handicapped or disabled applicant changes later and the applicant is determined to be a competent wage earner,the deferred loan will be changed to a regular pay loan.
  3. **Total loan amounts include the Rehab Hard Costs, plus Legal Fees (Title Opinion, Note and Deed Preparation, and Recording Fee) and Credit Report Fees.**

INCOME LIMITS

 (80% Limits)
Effective June 2017
  • 1 person household: $29,650    
  • 2 person household: $33,850
  • 3 person household: $38,100
  • 4 person household: $42,300
  • 5 person household: $45,700


APPLICATION PROCESS:


Step 1
To request an application please call 336-222-5070   

Step 2:
Upon receipt of the completed application your name will be placed on the Housing Rehabilitation Waiting List. Waiting list time differs depending on the current number of homeowners on the list. Please allow a minimum of 30 business days to process applications in order to determine eligibility.