The Housing Improvement Program currently provides paint grants for single family homeowners with household incomes at or below 80% of area median income. The program also provides emergency repair grants to fund critical health and safety repairs. The current guidelines allow a maximum grant limit of $2,000 for paint grants for individuals over the age of sixty or disabled individuals and $450 for material reimbursement for those individuals under the age of sixty; and $5,000 for emergency grants to households with incomes at or below 50% of area median income.

The Housing Improvement Program currently provides paint grants to single family homeowners with household incomes at or below 80% of area median income. The program also provides emergency repair grants to address critical health and safety issues. The current guidelines, provide a maximum grant limit of $2,000 for paint grants for individuals over the age of sixty or disabled individuals and $450 for material reimbursement for those individuals under the age of sixty; and $5,000 for emergency grants to households with incomes at or below 50% of area median income.

The U.S. Department of Housing Urban Development (HUD) now requires that all housing projects built prior to 1978 and funded with Community Development Block Grant (CDBG) or HOME funds must test, remove and/or abate all high concentrations of lead-based paint that are found. Staff has completed a review of the extensive procedural steps that are required by HUD for compliance with lead-based paint regulations. Compliance will increase costs per project for labor, testing, abatement when necessary, clearance testing and temporary relocation. Unit cost maximums are inadequate to implement the program and comply with the regulations.

The Housing and Community Revitalization Sub-Element Policy states:

C.2.a Continue to offer technical assistance to homeowners to aid them in maintaining, upgrading and improving their property.

C.11 Identify and remediate lead-base paint hazards.

The current grant limits are inadequate to achieve the program objectives and meet the more stringent HUD lead-based paint regulations. Testing and abatement of lead-based paint is costly work. This is now required on all CDBG and HOME funded projects of pre-1978 structures.

Each year the Housing Improvement Program funds approximately 20 paint grants and emergency repairs with a budget of $40,000. Staff has budgeted funding equal to approximately 10% of the total projected income of the revolving loan fund. The funding is from CDBG. Both programs have been very popular with Sunnyvale residents. There are currently 13 households requesting assistance from the paint program.

Staff recommends converting both the paint grant and emergency grant to 3% deferred loans; establish the loan limit for the Paint Program at $4,000, and increase the total reimbursement cost for materials to $1000 (to remain a grant and to include testing as required); and maintain the Emergency Repair loan limit at $5,000. The conversion from a grant to a deferred loan would provide for reuse and recycling of repayments to the Housing Improvement Programs revolving loan fund. The anticipated increases in project costs justify the increased staff time required for the preparation and recordation of loan documents for these projects. A deferred loan, due on sale or transfer of the property, at a low interest rate, should not deter homeowners from seeking assistance.