table of contents chapter 7: project activities7-1

TABLE OF CONTENTS

CHAPTER 7: PROJECT ACTIVITIES.....................................................7-1

I. OVERVIEW ............................................................................................ 7-1 II. GENERAL REQUIREMENTS................................................................. 7-1

A. MAXIMUM AND MINIMUM ASSISTANCE .................................. 7-1 B. PROPERTY STANDARDS .......................................................... 7-1 C. PERIOD OF AFFORDABILITY .................................................... 7-3 D. MANUFACTURED HOUSING (excluding Modular Housing) ....... 7-4 E. SPECIAL NEEDS......................................................................... 7-4 F. DOCUMENTATION AND CERTIFICATION ................................ 7-5 G. CONFLICT OF INTEREST .......................................................... 7-6

III. SPECIFIC REQUIREMENTS ................................................................. 7-6

A. NEW CONSTRUCTION............................................................... 7-6 B. TENANT-BASED RENTAL ASSISTANCE................................... 7-7 C. REHABILITATION...................................................................... 7-12

1. General Requirements .................................................... 7-12 2. Rental Housing Rehabilitation ......................................... 7-13 3. Owner-Occupied Rehabilitation....................................... 7-17

D. ACQUISITION............................................................................ 7-19 E. HOMEBUYER ASSISTANCE .................................................... 7-20

1. Resale/Recapture Restrictions and Long-Term Affordability...................................................................... 7-22

2. Special Considerations for Single-Family Properties with More Than One Unit................................................. 7-28

3. Lease-Purchase .............................................................. 7-28 4. Enforcing Homebuyer Provisions .................................... 7-29 5. Documentation and Certification ..................................... 7-30 6. Converting Rental Units to Homeownership Units for

Existing Tenants.............................................................. 7-30 EXHIBITS ........................................................................................................ 7-31

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce May 2007

CHAPTER 7

PROJECT ACTIVITIES

I. OVERVIEW This Chapter provides more detailed information and guidance related to the eligible HOME activities each Grantee could conduct to provide decent, safe, and sanitary housing for low- and very low-income persons. Eligible project activities include acquisition of rental housing, land, manufactured housing and assistance to homebuyers, new construction of homeowner and rental housing, reconstruction, or moderate or substantial rehabilitation of rental and owner-occupied housing and tenant-based rental assistance, including security deposits. Secondary eligible activities include relocation, site improvements, and demolition. Section II, GENERAL REQUIREMENTS, covers broad topics that apply to most project activities. Section III, SPECIFIC REQUIREMENTS, provides information on requirements specifically related to each project activity type.

II. GENERAL REQUIREMENTS A. MAXIMUM AND MINIMUM ASSISTANCE Part I of Exhibit 7-A (Maximum Per Unit Subsidy Limits) lists maximum HOME subsidy limits that apply to all rental housing and homeownership projects. These are the maximum amounts of HOME funds that can be invested in HOME-assisted units. The minimum amount of HOME funds that must be invested in a project involving rental housing or homeownership is $1,000 times the number of HOME-assisted units in the project. For tenant-based rental assistance, the minimum limitation does not apply. However, the maximum subsidy for tenant-based rental assistance may not exceed the difference between the monthly area rent standard and thirty percent of the tenant’s adjusted monthly income. B. PROPERTY STANDARDS 1. Housing that is constructed or rehabilitated with HOME funds must meet all

applicable local codes, rehabilitation standards, and zoning ordinances.

In the absence of a local code for new construction or rehabilitation, one of the following codes must be used: Uniform Building Code (ICBO), National Building Code (BOCA), Standard Building Code (SBCCI); or the Council of American Building Officials (CABO) one or two family code. Newly constructed housing must meet the current edition of the Model Energy Code published by the Council of American Building Officials.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce May 2007 7-1

All other HOME-assisted housing must meet Section 8 Housing Quality Standards and lead-based paint requirements. To aid in meeting lead-based paint and HQS requirements, the HOME Program has developed a “Housing Inspection Form” (Exhibit 7-B). The form can be used for the initial and final inspection for owner-occupied housing rehabilitation projects and the pre-inspection for homebuyer assistance. The form is NOT a replacement or substitute for the required appraisal form.

All housing occupied by tenants receiving HOME tenant-based rental assistance (TBRA) must meet the housing quality standards in 24 CFR 982.401.

Housing must meet the accessibility requirements specified in the Fair Housing Act and Section 504 of the Rehabilitation Act of 1973.

2. Additional property standard requirements apply to housing for homeownership to

be rehabilitated after transfer of ownership interest. Before transfer of the homeownership interest, the Grantee must:

inspect the housing for any defects that pose a danger to health;

notify the prospective purchaser of the work needed to cure the defects and

the time by which defects must be corrected and applicable property standards met;

ensure the housing is free from all noted health and safety defects before

occupancy and not later than 6 months after the transfer; and

ensure the housing will meet applicable property standards in paragraph B.1 of this section not later than 2 years after transfer of the ownership interest.

1. Provisions of the Fire Administration Authorization Act of 1992 (PL 102-522) require

that all housing units assisted with federal funds be equipped with a hard-wired or battery-operated smoke detector that includes appropriate wiring that makes it possible to install visual and/or sensory alarm systems if the need arises. This requirement applies to all new construction, reconstruction, and rehabilitation projects on any multi-family or single-family housing assisted with HOME funds. Further, where alarms already exist in common areas, visual and sensory alarms should be provided also, as a reasonable accommodation to persons with disabilities. The Act also levies additional requirements on newly constructed and rehabilitated multifamily properties of four or more stories1. If your project involves a property of four or more stories, contact your HOME Program Officer immediately.

1 For detailed guidance on fire alarms and automatic sprinklers, contact the HOME Program for the Guide for the Implementation of PL 102-522 for Fire Alarms and Automatic Sprinkler Installations, prepared for HUD by the National Institute of Standards and Technology (NIST) HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce May 2007 7-2

4. Each HOME Grantee must provide written standards for rehabilitation projects. The

Grantee must meet, at a minimum, the applicable property standards documents referenced earlier. Grantees are strongly encouraged to adopt the documents as part of their Management Plan.

5. The Grantee’s project files must contain documentation that housing meets property

standards of 24 CFR §92.251 and the lead-based paint requirements of 24 CFR §92.355 upon project completion.

6. Records must also show that owners of rental housing assisted with HOME funds

maintain the housing in compliance with the property standards for the duration of the affordability period.

All HOME-assisted housing must meet Accessibility requirements of 24 CFR 5.105(a), including the Fair Housing Act and Section 504.

SUMMARY OF MINIMUM PROPERTY STANDARDS REQUIREMENTS, BY PROJECT TYPE

Rehabilitation New

Construction Acquisition

only Acquisition when Rehab is required TBRA

HQS X X X Local Codes If no local codes, then must follow: UBC, BDCA, SBCC or CABO or MPS

For all health and safety deficiencies in the property

X Those applicable at time of initial construction

Free from health & safety defect not later than 6 months after transfer

Local Ordinances X X

Local Zoning X X Rehab Standards X

Must meet relevant standards no later than 2 yrs after transfer of ownership

Model Energy Code X X Site and Neighborhood Standards (24 CFR §92.202) apply only to New Construction Rental Housing Projects. (See page 7-7 of this chapter for more details.) C. PERIOD OF AFFORDABILITY The term "affordability" relates to the cost of housing both at initial occupancy and over established timeframes. Affordability requirements vary depending on the HOME activity and the amount of HOME dollars invested per unit. 1. For new construction or acquisition of newly constructed housing, the

minimum period of affordability is 20 years. 2. For rehabilitation, acquisition of existing housing or homebuyer assistance,

the period of affordability depends upon the amount of HOME funds invested:


If under $15,000 of HOME funds are spent per unit, the minimum period of

affordability is 5 years; If $15,000 to $40,000 of HOME funds are spent per unit, the minimum period of

affordability is 10 years; and

If over $40,000 of HOME funds is spent per unit, the minimum period of affordability is 15 years.

3. There is no period of affordability attached to Tenant-Based Rental Assistance. The

assistance can be provided for up to two years (see Specific Requirements of this chapter.) Limiting the maximum subsidy to the applicable fair market rents for Montana ensures affordability.

Affordability is discussed further in the SPECIFIC REQUIREMENTS section of this chapter. D. MANUFACTURED HOUSING (excluding Modular Housing) For HOME purposes, HUD has a specific definition for manufactured homes as well as specific requirements in order to be eligible for assistance with HOME funds. Experience has shown that frequent problems have arisen when attempts have been made to rehabilitate mobile homes. Similarly, significant problems have arisen when families are relocated to older mobile homes. The HOME Program encourages extra care and analysis when contemplating applications involving manufactured homes. Consideration of other alternatives, such as relocation to a conventional “stick-built” home in standard condition, purchase of modular housing, as well as down payment assistance, should be carefully evaluated. These alternatives may prove to be far more cost-effective in the end. HOME funds may be used to purchase and/or rehabilitate a manufactured housing unit, or purchase the land upon which a manufactured housing unit is located. At the time of project completion, manufactured housing that is rehabilitated with HOME funds must:

be connected to permanent utility hook-ups; be located on land that is owned by the manufactured housing unit owner or on

land for which the manufactured housing owner has a lease for a period at least equal to the applicable period of affordability; and

be on a foundation that meets local and State standards for this type of unit. E. SPECIAL NEEDS Permanent housing for disabled homeless persons, group or transitional housing and single-room occupancy housing are included as eligible project activities in the Montana HOME Program. Some distinguishing characteristics are discussed below. 1. Group housing is housing occupied by two or more single persons or families

consisting of common space and/or facilities for group use by the occupants of the units, and (except in the case of shared one bedroom units) separate private space


for each family. It also includes group housing for elderly or disabled persons. These structures are usually large single-family units that are being used for this purpose. Grantees may choose to consider the housing unit as a single unit for HOME assistance purposes or, depending upon their size, choose to classify them as single room occupancy (SRO) units. The maximum HOME subsidy amount will differ according to whether the housing unit is classified as a group home or an SRO.

A group home is considered a one-unit project. A one-unit project consists of separate bedrooms, which may be shared, and shared kitchen, dining, sanitary and/or other common area facilities. All occupants of single-unit HOME-assisted projects, except supportive service providers, must be low-income.

The entire project is considered a single unit for determination of the maximum HOME subsidy limit. The subsidy limit is based on the number of bedrooms in the unit (See Part I of Exhibit 7-A). Bedrooms occupied by resident supportive service providers are counted as eligible bedrooms for subsidy purposes.

Depending on the size of the project, Grantees may wish to meet the standards for a SRO project by the installation of either or both sanitary or food preparation facilities. Doing this would create individual units, thereby increasing the number of units that may be assisted with HOME funds.

2. Single room occupancy (SRO) is housing consisting of single room dwelling units

that are the primary residence of the occupant or occupants. The unit is required to contain either food preparation or sanitary facilities (it may contain both) only if the project consists of new construction, conversion of non-residential space, or reconstruction. For acquisition or rehabilitation of an existing residential structure, neither food preparation nor sanitary facilities are required to be in the unit. If the units do not contain sanitary facilities, the building must contain sanitary facilities that are shared by tenants. Supportive services may be provided. SROs do not include facilities for students. All occupants of HOME-assisted units must be low-income. Rents and income targeting are discussed later in the chapter.

In no event may the maximum subsidy exceed the actual development cost of the HOME-assisted units based upon their proportionate share of the total development cost. Common area rehabilitation costs may be covered in the same proportion or percentage as HOME-assisted units in the project. For example, if five out of ten units in the structure(s) are HOME-assisted, HOME funds may be used to cover one-half the common area rehabilitation costs. F. DOCUMENTATION AND CERTIFICATION Project and Program files must be maintained by the Grantee and will be monitored by HOME Program staff. Files will include major documents that pertain to the entire program. The Grantee's Management Plan for administering its HOME program will be in this file, along with applications for HOME assistance. The Project files will include documents pertaining to each family or unit assisted. Each file will include the agreement between the


Grantee and the assisted family, and copies of all work write-ups, contracts, permits, and inspection reports. G. CONFLICT OF INTEREST HOME Program participants may have possible conflicts of interest, either individually or in connection with a family member or relative, that precludes them from participating in the program. A local governing body may request an exception to a conflict of interest, but only after complete disclosure of the nature of the conflict at an advertised public hearing held for that purpose. HUD may grant an exception on a case-by-case basis after the Grantee’s attorney has issued an opinion that the interest for which the exception is sought would not violate federal, state, or local law. HUD will review the information concerning disclosure, public hearing, and attorney’s(s’) opinion(s). Please note, this approval process may be very slow. Grantees who believe they may have a potential conflict of interest must contact their HOME Program Officer for further guidance.

III. SPECIFIC REQUIREMENTS A. NEW CONSTRUCTION New construction will lead to the creation of rental housing or homeowner housing. Newly constructed housing units must meet applicable new construction standards of the area and the Model Energy Code (published by the Council of American Building Officials), and local laws and standards. When constructing 12 or more units in a project, federal labor standards including Davis-Bacon wage requirements also apply (see Chapter 4 for additional information). The purchase price, and a certified appraised value of the homeowner-assisted property (after new construction), must not exceed the FHA 203(b) limit for the area for the HOME-assisted property. (See Part II of Exhibit 7-A, Maximum Mortgage Limits). With regard to site and neighborhood standards, proposed sites for new rental construction units must be suitable from the standpoint of facilitating and furthering full compliance with applicable provisions of Title VI of the Civil Rights Act of 1964, Title VIII of the Civil Rights Act of 1968 (the Fair Housing Act), and Executive Order 11063 (discrimination prevention). Proposed sites for new rental construction units must promote greater choice of housing opportunities for low- and very low-income persons. Proposed new rental construction sites must not be located in an area of minority concentration, and sites must not be located in a racially mixed area if the project will cause a significant increase in the proportion of minority to non-minority residents in the area. Refer to the Management Plan Template (Exhibit 14 of the HOME Application Guidelines) for additional requirements related to New Construction and Rental Projects.


B. TENANT-BASED RENTAL ASSISTANCE HOME rental assistance must be tenant-based, not project based. Like the Section 8 Housing Choice Voucher Program, tenants must be free to use their assistance in any eligible unit. The tenant-based rental assistance may be provided through an assistance contract to the owner who leases a unit to an assisted family, or directly to the family. Grantees may require that tenants use their tenant-based assistance only within their area of jurisdiction, or they may authorize tenants to use the assistance outside the Grantee's jurisdiction. Grantees must select families in accordance with written selection policies and criteria that are consistent with the following: 1. TENANT SELECTION

Written tenant selection policies and criteria must include:

Policy that TBRA may only be provided to low- and very low-income families Local preference for individuals with Special Needs (optional) Family does not need to meet the written tenant selection policy and criteria, if

the family currently resides in a unit that is designated for rehabilitation or acquisition under the HOME Program (optional)

2. INCOME DETERMINATION

HOME funds used for tenant-based rental assistance must meet the following requirements regarding income targeting and tenant eligibility:

at least 90% of the families assisted must have an annual income that does not

exceed 60% of area median income; the remaining 10% of HOME funds can be used to assist families that are above

60% but no higher than 80% (low income), of area median income. 3. INCOME ELIGIBILITY/VERIFICATION

The Grantee must determine the income and eligibility of all proposed beneficiaries before the TBRA contract is signed.

Grantees will utilize the Section 8 definition of income for income eligibility purposes. Contact your HOME Program Officer for the Technical Guide for Determining Income and Allowances for the HOME Program.

Exhibit 7-D, (HUD HOME Income Limits), includes income limits for various sizes of families earning very low income (50% of area median) and low-income (80% of area median) for the different cities and counties in Montana. HUD revises the


income limits annually; contact your HOME Program Officer to determine if you have the latest income limits for the HOME program.

The incomes of tenants receiving rental assistance must be recertified at least annually, with certification documents maintained in the Grantee's files. Each assisted family will constitute a separate project for certification and documentation purposes. If a participating tenant's income goes above HOME Program income limits at recertification, assistance must be terminated.

4. ELIGIBLE UNITS

The Grantee must establish occupancy standards that will be used to determine the unit size (i.e., number of bedrooms) that TBRA families of various sizes and composition will be permitted to occupy. At the time a family is approved for TBRA, they should be counseled regarding the size of the unit for which approved, whether they will be permitted to select a unit that is larger or smaller than the approved unit size, and what the consequences of such a decision will be with respect to their monthly contribution toward rent. The Grantee may refer the TBRA family to suitable units; however, the Grantee must inform the family that it is not obligated to select a referral unit.

Rental units are selected by the tenant and:

may be owned by the Grantee, a Public Housing Authority or another public entity or be privately owned housing;

may include units developed or rehabilitated with HOME assistance;

may be transitional housing units, if the lease terms meet the minimum lease requirements;

must not be units receiving public or Tribally-Designated Housing Entity (TDHE) assistance, any Section 8 rent subsidies, or any other Federal, State or local subsidy that provides a duplicate subsidy to the HOME TBRA recipient or the unit which they propose to rent; and

if part of a cooperative, must be rented from the owner of the cooperative unit. HOME TBRA cannot be used to pay cooperative shares if the cooperative membership is considered ownership under HOME.

In conjunction with the annual reexamination of income, the Grantee must reexamine the TBRA family’s size and composition to determine whether its circumstances have changed. Depending upon the occupancy requirements established by the Grantee, a family whose size or composition has changed might be required to find a unit that is suitable to its current circumstances.

Housing occupied by a family receiving TBRA must meet Section 8 Housing Quality Standards (HQS). The Grantee must inspect units selected by families receiving TBRA to determine whether they meet HQS before authorizing their initial rental and, thereafter, must inspect the units annually. The owner must maintain the


premises in compliance with all applicable housing quality standards and local code requirements throughout the period of the TBRA family’s occupancy.

5. MAXIMUM SUBSIDY

The amount of the monthly assistance that a Grantee may pay to, or on behalf of, a family may not exceed the difference between a rent standard for the unit size for the area and 30 percent of the family’s monthly adjusted income.

A minimum tenant contribution for rent must be established.

The rent standard for a unit size must be based on local market conditions.

The TBRA units must rent for a reasonable amount, compared to rents charged

for comparable unassisted units. Maximum subsidy amounts under the HOME Grantee's program are found in Exhibit 7-E, HOME Program Rents. The maximum subsidy allowed is the Fair Market Rent (FMR) applicable to the area for the number of bedrooms. (If using Fair Market Rents as the rent standard, please contact the HOME Program for the applicable FMRs).

Two sample forms are provided (see Exhibit 7-F, Part I, Summary of Family Income Data and Part II, Calculating Adjusted Income), which outline an example of how to calculate tenant contributions for rent. HUD has now included an Income & Allowances Calculator on their website that can be used. The calculator is an interactive tool that simplifies the determination of income eligibility and assistance amounts for applicants to HUD programs. The address for this site is: http://www.hud.gov/offices/cpd/affordablehousing/training/calculator/calculator.cfm

Rent subsidy contracts cannot exceed 24 months, but they may be renewed, subject to the availability of HOME funds. Rent contracts are subject to the following conditions regarding start-up and termination:

The term of the rental assistance contract must begin on the first day of the

term of the lease; For a rental assistance contract between a Grantee and an owner (landlord),

the term of the contract must terminate on termination of the lease; For a rental assistance contract between a Grantee and a family, the term of

the contract need not end on termination of the lease, but no payments may be made after termination of the lease until a family enters into a new lease.

a. Security Deposits. Grantees may use HOME funds provided for tenant-based

rental assistance to provide loans or grants to low- and very low-income families for security deposits for rental of dwelling units, whether or not the Grantee provides any other tenant-based rental assistance. The amount of HOME funds that may be provided for a security deposit may not exceed the equivalent of two month's rent for the unit. Only the prospective tenant may


http://www.hud.gov/offices/cpd/affordablehousing/training/calculator/calculator.cfm

apply for HOME security deposit assistance, although the Grantee may pay the funds directly to the tenant or to the landlord.

b. Protection for Tenants. When the HOME rental assistance contract expires,

tenants selected from the Public Housing Authority's Waiting List must be returned to that List at the position from which they were taken so that they qualify for the same tenant selection preferences as when they were selected for HOME assistance.

Grantees must use a lease or rental agreement consistent with the following tenant and participant protections:

The lease cannot be less than one year (unless mutually agreed).

Prohibited Lease Terms – The lease may not contain the following

provisions:

a) Agreement to be sued (tenant agrees to be sued, admits guilt, etc. prior to any judgment or lawsuit brought by the rental owner);

b) Treatment of property (tenant cannot agree to have personal property sold without notice; does not concern disposition of personal property left behind in unit after tenant moves out);

c) Agreement that tenant will not hold owner legally responsible for anything;

d) Agreement of tenant that owner may institute lawsuit without notifying tenant;

e) Agreement that tenant waives legal proceedings if unlawfully evicted; f) Agreement by tenant to waive right to a trial by jury; g) Agreement by tenant to waive right to appeal a court decision in

connection to the lease; or h) Agreement by tenant to pay attorney fees or legal costs even if tenant

wins a legal proceeding.

A Grantee may not terminate tenancy or refuse to renew lease except for:

a) serious or repeated violation of terms and conditions of lease b) violation of applicable Federal, State, or local law; c) completion of transitional housing tenancy period; or d) for other good cause.

Written notice specifying the grounds for termination or refusal to renew lease must be provided to the tenant a minimum of 30 days before such action is taken.


Exhibit 7-G depicts a model lease agreement form used in the Section 8 Housing Choice Voucher Program, the Tenancy Addendum to the model lease, and a Lease Addendum for Tenant Based Rental Assistance (TBRA). These documents contain prohibited lease provisions, as well as other legal provisions and information that might be useful in administering the lease portion of a tenant-based rental assistance project.

c. Documentation and Certifications. The documentation and certification items

described below must be maintained by the Grantee in accordance with the guidance found in Chapter 1, PROGRAM START-UP, Section B.5, Establishing HOME Files.

Project files for tenant-based rental assistance will include all documents

that pertain to individual tenants. Each assisted family will require a separate project file because each family will represent a separate project.

The Grantee must maintain a copy of the income certification worksheet

that was used to determine the applicant's income eligibility, and eligibility as a family, at the time the applicant receives the rental assistance contract. Certification worksheets are maintained in the Grantee's file. (See Exhibit 7-J, Final Income Certification.)

The Grantee will file copies of documents used to determine reasonable

rents, and the calculation of HOME subsidy for each tenant assisted.

The Grantee must execute a contract or written agreement between the Grantee and the tenant (for direct payments), or between the Grantee and the landlord/owner (payments on behalf of the tenant). This contract will incorporate the major provisions and rules governing the HOME tenant-based rental assistance program, including but not limited to: family and income eligibility, recertification requirements, length of assistance, property standards, maximum subsidy limits, lease provisions and tenant protections. This contract is maintained in the Grantee's file.

The Grantee must obtain and keep copies of any lease agreements

between participating tenants and landlords/owners. The lease must not contain any prohibited lease terms, and the terms of the lease must be within the applicable subsidy and time frame parameters. These are maintained in the Grantee's file.

The Grantee will maintain copies of annual recertification, whereby family

income, size, and composition are re-examined for each tenant. These are also maintained in the Grantee's file.


Refer to the Management Plan Template (Exhibit 14 of the HOME Application Guidelines) for an outline of specific requirements related to Tenant-Based Rental Assistance.

C. REHABILITATION 1. General Requirements

Rehabilitation projects will involve rental housing or owner-occupied homes or, in some cases, an owner-occupied rental structure. Rehabilitation can be combined with other project activities. For example, a Grantee may rehabilitate a home and include homebuyer assistance. Rehabilitation includes:

reconstruction, or building a new structure on the foundation of a previous

structure; and

conversion, or changing the use of an existing structure from an alternative use to affordable residential housing.

a. Period of Affordability. The applicable period of affordability in a rehabilitation

project is linked to the amount of HOME funds invested per unit. The time and dollar parameters for rehabilitation are:

If under $15,000 of HOME funds are spent per unit, the minimum period

of affordability is 5 years;

If $15,000 to $40,000 of HOME funds are spent per unit, the minimum period of affordability is 10 years;

If over $40,000 of HOME funds is spent per unit, the minimum period of affordability is 15 years.

The period of affordability only applies to the rehabilitation of housing units for rental purposes.

b. Eligible Rehabilitation Costs. Development hard costs, or the actual costs of

rehabilitation, include:

costs of labor and materials necessary to meet Section 8 Housing Quality Standards;

costs to meet rehabilitation standards;

essential improvements;

energy-related improvements;

lead-based paint hazards reduction;

improvements for persons with a disability;


repair or replacement of major housing systems; (e.g., plumbing, heating,

and wiring)

incipient repairs and general property improvements of a non-luxury nature;

demolition costs, when these are a part of a rehabilitation project;

site improvements and utility connections; and

related soft costs.

c. Property Standards. Each Grantee must adopt or prepare written rehabilitation standards before HOME funds can be used in any rehabilitation activity. After rehabilitation, the property, at a minimum, must meet local codes, rehabilitation standards, ordinances, and zoning ordinances.

HOME funds may not be provided to primarily religious organizations for any activity, including secular activities. HOME funds also cannot be used for an emergency repair program.

Refer to the Management Plan Template (Exhibit 14 of the HOME Application Guidelines) for an outline of specific requirements related to rehabilitation for single-family and multi-family units, respectively.

2. Rental Housing Rehabilitation

The HOME Program allows investment in affordable rental housing rehabilitation to be occupied by low- and very low-income tenants. Project activities involving rental housing might include new construction, rehabilitation of existing structures, or acquisition of existing structures or property. Property standards apply as described under Section II, GENERAL REQUIREMENTS.

Prohibited lease provisions apply, as described in Section III of this chapter under TENANT-BASED RENTAL ASSISTANCE.

a. Projects. Eligible projects for rental rehabilitation may include:

properties scattered on more than one site, are under common

ownership, management and financing, and receive HOME assistance as part of a single undertaking (in rural areas, carved out of similar size blocks from the nearest town); or

one or more buildings on a single site that are under common ownership, management and financing.

There is no limitation on the number of units eligible per project, and housing units are not subject to preferences for unit size or style. Each project is entered separately into the Integrated Distribution and Information System


(IDIS). Rental housing units can be either privately or publicly owned. Under rental rehabilitation projects, HOME funds may not be used for:

projects assisted under Title VI of the National Affordable Housing Act

(prepayment of mortgages insured under the National Affordable Housing Act);

Public Housing projects; or Rental Rehabilitation Program funded projects.

b. Affordability. All occupants of HOME-assisted rental housing must have a

gross annual income equal to or below 80 percent of the area median income. To qualify as "affordable housing" under the HOME program, rental housing units must meet two target criteria.

Tenant income: At initial occupancy, at least 90 percent of the dwelling

units assisted must be occupied by families with annual incomes at or below 60 percent of the median income for the area. Thus, a maximum of 10 percent of the units may be occupied by families with annual incomes from 60 percent to 80 percent of area median income.

Rent target: For on-going occupancy of rental units in projects of five or

more units, no less than 20 percent of HOME-assisted units in each project must be occupied by very low-income tenants (households with incomes at or below 50 percent of the median).

What these requirements mean for HOME rental housing programs is simply that units must be occupied by very low-income families (those who are Section 8 eligible). Only a few renters with incomes approaching 60 percent of the median, and even fewer with incomes up to 80 percent of the median can reside in rental housing assisted with HOME program funds.

Long-term controls on rent and occupancy begin upon completion of the HOME rental rehabilitation project, and continue during an affordability period that may be as short as 5 years or as long as 15 years. The period of affordability is based upon the average amount of HOME funds invested per unit.

c. Allowable Rent Costs. In determining the monthly rent that may be charged

for a project, Grantees must use the standard High and Low HOME Rent (not to exceed the Fair Market Rent or FMR). If low home rents do not work for your project, contact your Home Program Officer. Both High and Low HOME Rents are established by the Department of Housing and Urban Development (HUD) and can be found in Exhibit 7-E, Home Program Rents. An adjustment must be made for utility allowances for cases where the utilities and other housing services (garbage collection) are not included in the rent and are instead the responsibility of the family. Grantees must use the Montana Department of Commerce Utility Allowances for Section 8


Programs for their region (see Exhibit 7-J), which are updated annually in October.

Keep the HOME income-targeting requirement in mind when figuring out rents for a project. At least 90 percent of the rental units must benefit families whose incomes do not exceed 60 percent of the area median.

Whether a Grantee is using High and Low HOME program rents or if they are determining monthly rent based on the Annual Income of each tenant, the maximum after-rehabilitation/acquisition/construction rents cannot exceed the Fair Market Rent (FMR) established by HUD and found in Exhibit 7-E. The Fair Market Rent Schedule may be increased only according to changes in HUD established rents.

d. Tenants: Rent Schedule and Utility Allowances - The Grantee must review

and approve rents proposed by the rental owner for units with "flat rents" (units carrying rents that are the maximum allowed as either a high or low HOME rent). The Grantee must review and approve the monthly allowances, proposed by the rental owner, for utilities and services to be paid by the tenant. The rental owner (or Grantee, depending on the particular project) must reexamine the income of each tenant household living in low- income units at least annually. The maximum monthly rent must be recalculated by the owner and reviewed and approved by the Grantee and MDOC, as changes in the applicable gross rent amounts, the income adjustments, or the monthly allowance for utilities and services warrant.

Enforceable agreements are required in the HOME Program under rental rehabilitation. Table 7-1 lists some special provisions that should be included in enforceable agreements between Grantees and owners or between owners and tenants. After rehabilitation (or new construction) of a rental property, landlords are not free to charge rents according to what the market will bear. They will face ceilings on rent levels, and will be required to screen tenants for family income. Landlords will also be required to report annually to Grantee project management officials on both rents and tenants. These requirements are formalized by creating a legally binding agreement in the form of a deed restriction. See Exhibit 7-H for an example of a land use Deed Restriction Agreement for rental properties.

The provisions of the Uniform Relocation Act provide protection for existing tenants. Tenants must be notified of the possible use of HOME funds in the rental project and of any changes in the project at the time the owner applies for the HOME funds. Care must be taken to insure that this notice does not insinuate that the tenant might be asked to move. Grantees must notify their assigned HOME Program Officer before notice is given so that the tenant does not become a "displaced person". Further notice to tenants is required when funds are actually committed to a project. When funds are committed,


tenants must be informed of either their right to remain in the property or apply for relocation assistance. See Chapter 6, ACQUISITION / RELOCATION, for additional information.

Table 7-1

HOME Rental Housing Enforceable Agreements

ITEM PARTIES TO AGREEMENT DOCUMENT

Rent controls Owner—Grantee Deed restriction or covenant running with the land

Occupancy controls Owner—Grantee Deed restriction or covenant running with the land

Annual income certification Owner—Grantee Written agreement with owner requiring recertification

Annual certification to MDOC that incomes have been checked and meet program requirements

Annual rent reviews Owner—Grantee Written agreement with owner Annual certification by Grantee to

MDOC that rents are within limits Fair housing Owner—Grantee Written agreement with owner Housing quality standards

reviews Owner—Grantee Written agreement with owner

Income reviews Owner—Tenant Lease Affirmative marketing Owner—Grantee Written agreement with owner

e. Tenant Selection. An owner of rental housing assisted with HOME funds

must adopt written tenant selection policies and criteria that:

are consistent with the purpose of providing housing for low- and very low-income families;

are reasonably related to program eligibility and the applicants' ability to perform the obligations of the lease;

give reasonable consideration to the housing needs of families that qualify for federal selection preferences; and

provide for the selection of tenants from a written waiting list in the chronological order of their application, insofar as practicable, and the prompt written notification to any rejected applicant of the grounds for any rejection.

f. Increases in Tenant Income. Tenants who no longer qualify as low-income

families must pay as rent the lesser of the amount payable by the tenant under state or local law or 30 percent of the family's adjusted monthly income, as recertified annually. As unqualified tenants vacate their units, the owner must replace them with low- or very low-income tenants.


g. Documentation and Certification requirements for rental housing parallel the

requirements for tenant-based rental assistance, with some important additions. The following should be included (as applicable) in the Grantee's file:

Property Standards: Documents demonstrating that the rental property

meets required property standards of 24 CFR §92.251 and the lead-based paint requirements in 24 CFR §92.355 upon project completion.

On-Site Inspections: During the period of affordability, the HOME

Program must perform on-site inspections of HOME-assisted rental housing to determine compliance with the property standards of 24 CFR §92.251 and to verify the information submitted by the owners in accordance with the requirements of 24 CFR §92.252 no less than:

Every three (3) years for projects containing 1 to 4 units; Every two (2) years for projects containing 5 to 25 units; and Every year for projects containing 26 or more units.

Inspections must be based on a sufficient sample of units.

Documents showing the annual recertification of tenant income

Annual review of rent and utility allowances

Documents demonstrating that the rental project meets affordability and

tenant income benchmark for each family assisted; and

Records demonstrating compliance with the Lead-Based Paint Poisoning Prevention Act (as applicable).

Grantee files will include, as applicable, the agreement between the Grantee and the assisted family, and copies of any work write-ups, bids, contracts, permits, and inspection reports. Tenant files must be kept on-site at the property unless there is no on-site manager. Refer to the Management Plan Template (Exhibit 14 of the HOME Application Guidelines) for an outline of specific requirements related to Multi-Family Rentals.

3. Owner-Occupied Rehabilitation

Owner-occupied rehabilitation projects are similar in some respects to rental rehabilitation projects, and significantly different in others. Owner occupied rehabilitation is not subject to a period of affordability. However, the intent of the HOME program is to have housing remain affordable. Grantees are encouraged to


impose affordability restrictions regarding the sale or rental of property that has been rehabilitated under the HOME Program. Rehabilitation of single family, owner-occupied housing must meet the requirements outlined below:

a. Income. To be considered eligible to participate in HOME owner-occupied

rehabilitation, a homeowner must have annual gross income that does not exceed 80 percent of the area's median income. When determining family income, the Grantee will use the definition of “annual income” as defined under the Section 8 Housing Assistance Payments programs (except when determining the income of a homeowner for an owner-occupied rehabilitation project, the value of the homeowner's principal residence may be excluded from the calculation of Net Family Assets).

b. Property Ownership. The homeowner must own the property and must

occupy the property as his or her principal residence. A family or individuals own the property if they:

have fee simple title; or maintain a 99-year leasehold interest; or have ownership or membership in a cooperative; and do not have any restrictions or encumbrances that would unduly restrict

the good and marketable nature of the ownership interest.

Properties considered for owner-occupied rehabilitation must qualify as single-family properties. HOME guidelines define single-family properties as:

a one- to four-unit property; a condominium unit; a combination of manufactured housing and lot; or a cooperative unit.

c. Amount of Assistance. The amount of HOME assistance needed will be

guided by the applicable rehabilitation standards and the ability of homeowners to repay the rehabilitation loans (as applicable). The income of individual homeowners and the total monthly payment they can afford will guide the levels of assistance provided. Both interest rates and repayment terms have a significant impact on affordability. Conventional home improvement loans generally do not allow for adjustments in interest rates and have short terms (typically 5 to 10 years). By adjusting either the term or the interest rate of loans, HOME rehabilitation projects can accommodate a wider range of homeowners. Small changes in the loan's term provide more affordability than small changes in its interest rate.


Under the HOME Program, Grantees may choose to customize their loan products to meet the individual needs of borrowers. Adjustment to terms and interest rates may be customized to individual homeowners or established by category to meet the needs of anyone within a particular income range.

d. Property Value. The value of the HOME assisted property after rehabilitation

must not exceed 95% of the median purchase price for the area (see Part II of Exhibit 7-A, Montana's Mortgage Limits).

e. Minimum Investment. The minimum amount of HOME funds used for

homeowner rehabilitation is $1,000 per unit assisted. It is possible that due to leveraging of public or private monies, a project will have a high rehabilitation cost but a low HOME investment. For example, if a $5,000 single-family rehabilitation project included $950 of HOME funds and $4,050 in funds from other sources, the minimum per unit HOME investment requirement would not be met.

f. Maximum per unit subsidies. The maximum per-unit subsidy of HOME funds

permitted per unit for a single-family rehabilitation is the maximum subsidy amount set for all HOME assisted activities (see Part I of Exhibit 7-A, Maximum Per Unit Subsidy Limits).

g. Period of Affordability. Homeowner rehabilitation does not require a period of

affordability; however, the HOME Program does promote affordability restrictions set by the Grantee regarding resale or rental provisions attached to the Homeowner/Grantee Loan Agreement.

Refer to the Management Plan Template (Exhibit 14 of the HOME Application Guidelines), or the Single-Family Pilot Program Qualification Package (available on the HOME website) for an outline of the requirements related to Homeowner Rehabilitation.

D. ACQUISITION HOME funds may be used for the acquisition of improved or unimproved real property. HOME acquisition activities can be directed to:

vacant land, in relation to a particular housing project intended to provide

affordable housing and for which funds for construction have been committed; any combination of a manufactured home and a lot on which a manufactured

home will be placed; existing housing structures or structures that will be converted to housing after

rehabilitation; new construction, provided the housing has received an initial certificate of

occupancy or equivalent document within a one-year period before HOME funds are committed to the project.


a. Property Standards

Acquisition Only. The housing must meet all applicable local housing quality standards and code requirements and if there are no such standards or code requirements, the housing must meet the housing quality standards in 24 CFR 982.401.

Acquisition and Rehabilitation. The housing must be free from any defects that could pose a danger to the health or safety of occupants before it is transferred to a homeowner (within 6 months of transfer of ownership). The housing must meet the property standards in 24 CFR §92.251 no later than two (2) years after transfer of the ownership interest.

Rehabilitation. The housing must meet accessibility requirements of the Fair Housing Act and Section 504 as well as: local housing codes, ordinances, rehabilitation standards, and zoning ordinances. If no local standards exist, Uniform Building Code (ICBO), National Building Code (BOCA), Standard Building Code (SBCCI), Council of American Building Officials One to Two Family Code (CABO) or FHA Minimum Property Standards (MPS) must be met.

If this is a rental unit, it must meet Section 8 Housing Quality Standards.

Refer to the Management Plan Template (Exhibit 14 of the HOME Application Guidelines) for an outline of specific requirements related to Single-Family and Multi-family Acquisition. E. HOMEBUYER ASSISTANCE Homebuyer Assistance is considered part of Acquisition. Homebuyer projects may supply downpayment and closing cost assistance through a deferred payment loan, partially or fully forgivable, and with or without an interest rate mechanism. The HOME Program requires a recorded Deed Restriction on each house to ensure resale restrictions are enforced. Contact your HOME Program Officer for additional information regarding a recorded deed of trust.

a. Eligibility Criteria. The prospective purchaser household must meet two requirements in order to participate in the Homebuyer program.

The purchasing household must be low income at either the time the household

initially occupies the property, or at the time HOME funds are invested, whichever is later. The HOME Program recommends that homebuyers spend approximately 30 percent of their monthly income for housing expenses including principle, interest, taxes, and insurance. Verification of income eligibility is good for a period of 6 months. See Exhibit 7-I for final income verification.


The purchaser household must use the property as its principal residence. To guarantee adherence to this criteria, the deed should incorporate this residency requirement. The loan documents (such as a promissory note between the purchaser and the Grantee) should also incorporate this requirement. Temporary subleases are not allowed.

b. Eligible Property Types. Property can be privately or publicly held before its sale to a

homebuyer; however, it must be free from encumbrances. The property can be an existing structure or one that is newly constructed. It must serve as the purchaser's principal residence. Eligible property types include:

a single family property (one unit); a two- to four-unit property (rent controls will apply to the second through fourth

units); a condominium unit; a manufactured home (all types of non-motorized manufactured housing units,

including mobile homes with permanent foundations and hook-ups to sewer and water); and

a cooperative unit.

c. Form of Ownership. For purposes of the HOME Program, homeownership means ownership in fee simple title, a 99-year leasehold interest in a one- to four-unit dwelling or condominium unit, ownership or membership in a cooperative, or an equivalent form of ownership approved by MDOC. The ownership interest may be subject only to the following:

mortgages, deeds of trust or other debt instruments approved by MDOC; HOME Program restrictions on resale that insure affordability or other program

requirements; any other encumbrances or restrictions that do not impair the marketability of the

ownership interest; homeownership under a lease-purchase agreement must occur within thirty-six

(36) months.

Any forms of ownership not clearly specified above must be approved by MDOC (with HUD approval).

d. Property Value. The purchase price of a HOME-assisted property for a homebuyer

(at the time of acquisition, with or without rehabilitation) must not exceed the FHA 203(b) mortgage limit for the area for the type of housing being purchased (single family, condominium; duplex, 4-plex, etc.). This means that it cannot exceed 95% of the area median purchase price for the type of housing being purchased. The current maximum mortgage limits are contained in Part II of Exhibit 7-A.


Some projects may feature acquisition and rehabilitation of homes for homebuyers. Where rehabilitation is required to bring the housing up to all applicable local codes, rehabilitation standards, ordinances, and zoning ordinances or rental property up to Section 8 Housing Quality Standards, the purchase price of the property after rehabilitation cannot exceed the applicable Mortgage Value Limits found in Part II of Exhibit 7-A. The after-rehab value estimates should be completed before occupancy or investment of HOME funds. The appraisal of fair market value, if performed by a third party, is an eligible soft cost. HOME regulations do not prescribe a minimal acceptable appraisal format. Unofficial estimates of value performed by the local government agency or non-profit would not be acceptable. However, drive-by appraisals which include a property description and the sale prices of at least 3 comparable properties performed by a licensed appraiser, title company or other qualified entity will be acceptable. NOTE: Inspections, including inspections using the form in Exhibit B, do NOT substitute for an appraisal. 1. Resale/Recapture Restrictions and Long-Term Affordability

Proceeds from the sale of a HOME-assisted property sold within the affordability period must be distributed according to a resale or recapture option according to 24 CFR 92.254(a)(5) and described in this section. It is the intent of MDOC to recover the HOME investment under all circumstances unless the net proceeds from the sale of a home, whose owner has been assisted with the HOME funds, is not sufficient to recapture the full HOME investment. The Grantee will have to choose one of the options, either recapture or resale, to use in their program and remain consistent in its use with all assisted persons. If the funds from the sale of a property are insufficient to cover repayment of all HOME funds, neither the MDOC nor Grantee are required to make up this deficiency. However, any HOME funds that are recaptured will be used to assist other HOME-eligible activities.

Resale: The purpose of this option is to ensure that the assisted housing unit will

remain affordable to the subsequent homebuyer.

The resale provisions of 24 CFR §92.254(a)(5) will be applied, requiring program participants to use the following provisions: a. Affordability. Housing is affordable if the purchaser's monthly payments of

principal, interest, taxes, and insurance do not exceed 30 percent of the gross income of a family with an income equal to 80 percent of median income for the area, as determined by HUD, with adjustments for smaller and larger families.

Housing purchased through the Homebuyer Assistance Program that is subsequently sold within the HOME-required period of affordability will be sold to


another low-income family who must use the property as their principal residence. The Grantee may select a period of affordability greater than that established by HOME. Subsequent buyers who purchase the property within the affordability period will start a new period of affordability if an infusion of new HOME funds is required to make the unit affordable. Affordability to the subsequent homebuyer will be assured through a shared allocation of funds from the resale, according to the policies and procedures proposed by the Grantee in their Program Income Plan and approved by the HOME Program. To make the resale unit affordable, the Grantee will apply funds in the following order: 1) Funds returned to the Grantee from the sale, reimbursing HOME-funded

down payment and closing cost assistance; then 2) Funds returned to the Grantee from the sale as the share of appreciation.

The allocated amount of appreciation is to be determined by the Grantee and is subject to HOME Program approval; then

3) The Grantee may use new HOME funds to make it affordable.

The Grantee will ensure that the housing will remain affordable, pursuant to deed restrictions, covenants running with the land or a similar mechanism to ensure affordability, to a reasonable range of low-income homebuyers. The affordability restrictions must terminate upon occurrence of any of the following termination events: foreclosure, transfer in lieu of foreclosure or assignment of a FHA insured mortgage to HUD. The Grantee may exercise purchase options, rights of first refusal or other preemptive rights to purchase the housing before foreclosure to preserve affordability. The affordability restrictions shall be revived according to the original terms if, during the original affordability period, the owner of record before the termination event, or any entity that includes the former owner or those with whom the former owner has or had family or business ties, obtains an ownership interest in the project or property. b. Proceeds. If the Grantee's share of appreciation and reimbursement of HOME

down payment and closing cost funds accomplishes affordability for the homebuyer during the period of affordability, any excess funds left after affordability has been accomplished shall be used for other HOME-eligible activities.

Fair return to the seller will be accomplished within the net proceeds from sale as follows: 1) Any outstanding loan balances from the first and/or second mortgages will be

repaid; then


2) HOME financed down payment and closing cost amounts will be returned to

the Grantee; then 3) Any remaining funds are divided between the Grantee and the seller

according to the policies adopted by the Grantee in their Program Income Plan and approved by the HOME Program.

Recapture: The purpose of this option is to recapture the full HOME investment out

of the net proceeds available (sale price minus closing costs and any non-HOME loan repayments) if the HOME-assisted house is sold or transferred within the affordability period, and to assist other HOME-eligible projects, except as provided below. The Grantee may modify or design its own recapture policy, subject to approval by the HOME program. The policy adopted by the Grantee must be applied consistently to all participants receiving HOME assistance under the Grantee’s HBA program.

a. Affordability: The persons assisted under the Homebuyers Assistance Program

with HOME funds obtained through the recapture of a HOME investment or through the initial investment of HOME funds will be subject to all the requirements and restrictions set out in 24 CFR Part 92.

b. Recapture Requirements: The recapture provisions provided in the contract

between the Grantee and the assisted homeowner will ensure recapture of the HOME investment subject to repayment. The HOME investment subject to repayment is the HOME subsidy that directly enabled the homebuyer to purchase an eligible property, plus any deferred interest (if the Grantee provides HOME funds as an interest-bearing loan) but excluding any forgiven HOME investment. Recapture is required if the assisted house is sold or transferred within the required affordability period. The grantee may set an affordability period greater than that required by HOME.

� Grantees must set their recapture policies based on net proceeds available.

HUD has determined that, in the event of a foreclosure, Grantees that have not set their recapture policies based on net proceeds available must repay the HOME investment back to the U.S. Treasury. Setting recapture policies based on net proceeds available will allow a Grantee to collect as much of the HOME investment as is available, while preventing repayment by the Grantee in the event of foreclosure.

The Grantee must develop a policy for treatment of excess proceeds. Excess proceeds are any net proceeds remaining after recapture of the HOME investment and coverage of the homeowner’s investment (down payment, and eligible capital improvements made since purchase). The Grantee may allow the homeowner to retain all of the excess proceeds or they may be shared between the homeowner and the Grantee according to an Equity Share policy approved by the HOME Program.


c. Optional Recapture Provisions: The following options for recapture requirements

are acceptable to the HOME Program. The grantee may modify or design its own recapture policy, subject to approval by the HOME program. The policy adopted by the Grantee must be applied consistently to all participants receiving HOME assistance under the Grantee’s HBA program.

1) Equity Share: The Grantee may develop an equity share policy, subject to

approval by the HOME program, to address the treatment of excess proceeds from the sale of an assisted house. Excess proceeds are any net proceeds remaining after recapture of the HOME investment and coverage of the homeowner’s investment (down payment and eligible capital improvements made since purchase). The Grantee should consider that, in some cases, such as a brief period of ownership or limited homeowner investment, the Grantee may be justified in capturing most or all of the excess proceeds. The Grantee might also design its equity share policy to allow homeowners to keep excess proceeds from the sale of an assisted house when the excess proceeds do not surpass a pre-determined threshold. Some options for an equity share formula include: Sharing equity according to the ratio of HOME investment to initial

purchase price, or according to the following formula presented below under Number 2, Insufficient Proceeds;

Tying the formula to an economic index, cost-of-living, interest rates, or some other market factor;

Sharing equity as a fixed amount or percentage of the property’s appreciation.

2) Insufficient proceeds: The Grantee may choose to adopt one of the following

two options for the treatment of net proceeds in the event they are insufficient to repay the entire HOME investment and the homebuyer’s investment (downpayment, principal payments, and eligible capital improvement investments made by the owner since purchase). The Grantee may opt for one of these options in response to market conditions and the needs of potential purchasers to allow homeowners to recover some of their investment. If the Grantee chooses to include one of these options in its recapture policy, it must be applied consistently to all participants receiving HOME assistance under the Grantee’s HBA program.


Option #1: Net proceeds may be divided proportionally as set forth in the following formula:

HOME investment HOME investment +

homeowner investment x Net

Proceeds = GRANTEE SHARE

homeowner investment

HOME investment + homeowner investment

x Net Proceeds = HOMEOWNER

SHARE

Example: A homeowner receives $10,000 in HOME downpayment/closing cost assistance. She invests $5,000 in her home ($3,000 in downpayment and $2,000 in eligible capital improvements made on the home). When she sells the house, there is $11,000 in net proceeds. The amount of HOME investment to be recaptured equals:

GRANTEE SHARE = $10,000

$10,000 + $5,000 x $11,000 = $7,333

The seller receives the balance of the proceeds, or $3,667 ($11,000 - $7,333). Option #2: The homebuyer’s investment (down payment and any capital improvement investments made by the owner since purchase) may be repaid in full before any HOME investment is recaptured. The HOME subsidy is then repaid to the extent that proceeds are available. Example: From the $11,000 net proceeds, the homeowner receives her entire $5,000 investment and the Grantee receives the balance, or $6,000 of the initial $10,000 HOME investment.

3) Forgiveness: Much, if not all, of the potential problem of insufficient net proceeds may be eliminated if the Grantee elects to forgive all or a portion of the HOME investment. However, the decision to forgive should be made at the program design stage to consider local housing market conditions and the needs of potential purchasers. The following two options are acceptable to the HOME Program:

Option #1: The Grantee may choose to forgive the HOME investment if a homeowner owns and occupies the unit for the required affordability period, but require repayment in full if the home is sold before the affordability period has expired. Example: A homebuyer receives $10,000 in HOME downpayment assistance, triggering a 5 year affordability period. If she decides to sell at any time during the affordability period, the HOME investment must be repaid. If she sells after year five, the HOME investment is forgiven.


Option #2: Alternatively, the HOME investment amount may be forgiven on a pro rata basis according to the time the homeowner has owned and occupied the unit measured against the required affordability period: Example: If the homebuyer decides to sell after year two, two-fifths, or $4,000, of her deferred payment loan is forgiven. Her HOME loan balance subject to recapture is $6,000, to be repaid from the net proceeds of the sale.

4) Capital Improvements: The calculation of the homeowner’s investment shall be adjusted to include the cost of eligible capital improvements made by the owner since purchase. The Grantee will establish its capital improvements policy to meet one of the following two options and to include the eligible capital improvements that follow. The Grantee may modify or design its own capital improvements policy, subject to approval by the HOME program.

Option #1: The Grantee may determine the homeowner’s capital improvement investment based upon the actual cost of the improvements. Assisted homeowners that want to receive credit for eligible improvements must notify the Grantee prior to initiating the work, and provide to the Grantee copies of all documentation to support the cost of the improvement (receipts for materials, or contractor invoices and receipts of payment). For improvements installed by the homeowner, the cost of eligible capital improvements will exclude labor. When the improvement is completed, the Grantee and assisted homeowner must agree to the final cost of the improvement. The agreed upon amount will determine, along with the cost of other eligible capital improvements documented by the Grantee, the homeowner’s investment at time of sale. Option #2: The Grantee may determine the homeowner’s capital improvement investment based upon the appraised value, or such amount as may be agreed upon by the Grantee and homeowner, of eligible capital improvements at the time of sale. Assisted homeowners that want to receive credit for eligible improvements must still notify the Grantee prior to initiating the work. At the homeowner’s expense, the value of capital improvements will be determined by a mutually acceptable and duly licensed Appraiser. Grantees must ensure assisted homeowners are aware of what capital improvements will be eligible, how the improvement will be priced, and what obligations the homeowner has for notifying the Grantee in advance of initiating work. The Grantee must have the assisted homeowner sign a statement of acknowledgment accepting the capital improvements policy. Eligible capital improvements may be determined by the Grantee with the approval of the HOME Program, but at minimum must include the following:


Any addition of livable interior space or building component. Such capital improvements include a building addition; finishing a basement; finishing attic space; installing central air conditioning; adding or expanding a porch or deck; adding a garage or carport; and converting an existing carport into an enclosed garage. Improvements necessary to correct code deficiencies or improve energy conservation. Such capital improvements include replacing or modifying noncompliant components, such as wiring or plumbing, to meet current code; increasing insulation (in new units, insulation must exceed current Montana Energy Code standards to qualify); and replacing windows and heating systems with Energy Star-rated units.

2. Special Considerations for Single-Family Properties with More Than One Unit

If the HOME funds are only used to assist a low-income homebuyer to acquire one unit in single-family housing containing more than one unit and the assisted unit will be the principal residence of the homebuyer, the affordability requirements of this section apply only to the assisted unit.

If HOME funds are also used to assist the low-income homebuyer to acquire one or more of the rental units in the single-family housing, the affordability requirements of 24 CFR §92.252 (Rental Housing) apply to assisted rental units, except that MDOC may impose resale or recapture restrictions on all assisted units (owner-occupied and rental units) in the single family housing.

If resale restrictions are used, the affordability requirements on all assisted units continue for the period of affordability. If recapture restrictions are used, the affordability requirements on the assisted rental units may be terminated, at the discretion of MDOC, upon recapture of the HOME investment. (If HOME funds are used to assist only the rental units in such a property then the requirements of Rental Housing would apply and the owner-occupied unit would not be subject to the income targeting or affordability provisions of 24 CFR §92.254.)

3. Lease-Purchase

HOME funds may be used to assist homebuyers through lease-purchase programs. A homebuyer must purchase the housing within 36 months of signing the lease-purchase agreement. The homebuyer must qualify as a low-income family at the time the lease-purchase agreement is signed and at the time the housing is transferred if more than six months have elapsed since the grantee determined that the family was income eligible.

If HOME funds are used to acquire housing that will be resold to a homebuyer through a lease-purchase program, the HOME affordability requirements for rental housing in 24 CFR §92.252 (Rental Housing) shall apply if the housing is not transferred to a homebuyer within forty-two months after project completion.


The affordability period will be suspended upon foreclosure by a lender or other transfer in lieu of foreclosure, if the foreclosure by a lender or other transfer in lieu of foreclosure recognizes any contractual or legal rights of public agencies, nonprofit sponsors, or others to take actions that would avoid termination of low-income affordability.

After the period of affordability, the property may be sold at any price to any new homebuyer, without consideration of the purchaser's income.

4. Enforcing Homebuyer Provisions

There are two provisions related to homebuyer programs that will require a means of enforcement:

use as a principal residence; and

resale/recapture restrictions.

A deed or mortgage covenant, deed restriction, covenant running with the land, lien, or other similar mechanism, must be used to ensure that the homebuyer criteria are enforced. In addition, the Grantee should consider using the following options as a means of assuring compliance with the principal residence and resale provisions:

First Right of Purchase. Should the homebuyer wish to sell the property, the

Grantee retains the right to purchase the property based upon a formula. The right of purchase can be included as a deed covenant, or it can be executed and recorded as a separate document.

Right of First Refusal. The Grantee can exercise the right to purchase the homebuyer's property or it can waive the right to purchase. This can also be executed as a deed covenant or as a separate recorded document.

Subsidy Mechanisms. The Grantee can structure the HOME investment as a due-on-sale deferred loan (fully repayable or fully or partially forgivable) or as an amortized loan. The Grantee may provide HOME funds as an interest-bearing loan, or at zero interest.

Equity Sharing. The Grantee in effect becomes a co-owner of the property. Direct involvement in subsequent transfer of the property is thus assured, permitting the Grantee to comply with resale provisions and recover an appropriate share of the appreciated value of an assisted house.

5. Documentation and Certification

The items listed below represent the minimum documentation and certification requirements for inclusion in each homebuyer project.

Documents certifying each purchaser's eligibility as a qualified homebuyer.


Documentation that each homebuyer has completed the HOME Program-

approved home ownership training course.

For subsequent purchasers, records demonstrating that affordability requirements are met for each homebuyer assisted.

Records certifying that the property meets required property standards.

As applicable, documents demonstrating compliance with the provisions of the Lead-Based Paint Poisoning and Prevention Act.

Copies of any documents used to secure resale and affordability provisions (i.e., deed covenant, deed restriction, covenants running with the land, etc.).

Records of appraisals and computations used to determine property value for each homebuyer assisted.

Separate files for each unit assisted. Each file will include the contract between the Grantee and the assisted family, and copies of all work write-ups, contracts, permits, and inspection reports.

A copy of the agreement for the acquisition of the property (buy-sell). 6. Converting Rental Units to Homeownership Units for Existing Tenants

The grantee may permit the owner of HOME-assisted rental units to convert the rental units to homeownership units by selling, donating, or otherwise conveying the units to the existing tenants to enable the tenants to become homeowners in accordance with the requirements of 24 CFR §92.254. If no additional HOME funds are used to enable the tenants to become homeowners, the homeownership units are subject to a minimum period of affordability equal to the remaining affordable period if the units continued as rental units. If additional HOME funds are used to directly assist the tenants to become homeowners, the minimum period of affordability is the affordability period under 24 CFR §92.254(a)(4), based on the amount of direct homeownership assistance provided. Refer to the Management Plan Template (Exhibit 14 of the HOME Application Guidelines), or the Single-Family Pilot Program Qualification Package (available on the HOME website) for an outline of specific requirements related to Homebuyer Assistance.


EXHIBITS 7-A Part I: Maximum Per Unit Subsidy Limits for Rental New Construction and

Rehabilitation Projects Part II: Maximum Mortgage Limits for Rehabilitation and Homeownership

Programs 7-B Housing Inspection Form 7-C Reserved 7-D Adjusted Income Limits Table 7-E HOME Program Rents 7-F Part I: Summary of Family Income Data

Part II: Calculating Adjusted Income 7-G Model Lease for Housing Choice Voucher

Tenancy Addendum Section 8 Tenant Based Housing Choice Voucher Program Lease Addendum HOME Program Tenant Based Rental Assistance

7-H Deed Restriction Agreement 7-I Final Income Certification 7-J Utility Allowances


EXHIBIT 7-A

Part I

MONTANA MAXIMUM PER UNIT SUBSIDY LIMITS

Section 221(d)(3) of the National Housing Act (Effective January 1, 2011)

(Federal Register / Vol. 76, No.37 / February 24, 2011)

Beaverhead, Broadwater, Deer Lodge, Granite, Jefferson, Lewis & Clark, Madison, Powell, Silver Bow Counties

0 Bedrooms Subsidy Limit $ 100,742 1 Bedroom Subsidy Limit $ 115,484 2 Bedrooms Subsidy Limit $ 140,429 3 Bedrooms Subsidy Limit $ 181,668 4+ Bedrooms Subsidy Limit $ 199,417

Big Horn, Blaine, Carbon, Carter, Cascade, Chouteau, Custer, Daniels, Dawson, Fallon, Fergus, Flathead, Gallatin, Garfield, Glacier, Golden Valley, Hill, Judith Basin, Lake, Liberty, Lincoln, McCone, Meagher, Mineral, Missoula, Musselshell, Park, Petroleum, Phillips, Pondera, Powder River, Prairie, Ravalli, Richland, Roosevelt, Rosebud, Sanders, Sheridan, Stillwater, Sweet Grass, Sheridan, Teton, Toole, Treasure, Valley, Wheatland, Wibaux, Yellowstone Counties

0 Bedrooms Subsidy Limit $ 103,366

1 Bedroom Subsidy Limit $ 118,492



4+ Bedrooms Subsidy Limit $ 204,610

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7A-1 January 2012

EXHIBIT 7-A

Part II

MAXIMUM PURCHASE PRICE (FOR HOMEBUYER ASSISTANCE) AND

AFTER-REHABILITATION VALUE (FOR HOMEOWNER REHABILITATION)

FHA 203(b) Limits (pre-Economic Stimulus Act) (Effective January 1, 2011)

Counties * 1-UNIT 2-UNITS 3-UNITS 4-UNITS

Gallatin $251,750 $283,550 $344,500 $397,500Flathead $227,905 $256,693 $311,870 $384,936Missoula $220,875 $256,248 $309,744 $384,936

Montana State (all other Counties) $200,160 $256,248 $309,744 $384,936 This is the maximum allowable for the purchase price of a home in homebuyer assistance projects and for after-rehab value of homes in rehabilitation projects. The number of bedrooms in the unit does not matter. These limits MUST be used for ALL homebuyer assistance and homeowner rehabilitation projects until HUD issues new regulations regarding these limits.

∗ Can be used for individual townhouses and condominiums if land is included and the units are appraised separately.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7A-2 January 2012

Inspection Form OMB Approval No. 2577-0169 (exp. 4/30/2014)

Housing Choice Voucher Program

U.S. Department of Housing and Urban Development

Office of Public and Indian Housing

Public reporting burden for this collection of information is estimated to average 0. 25 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. This agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless that collection displays a valid OMB control number.

Privacy Act Statement. The Department of Housing and Urban Development (HUD) is authorized to collect the information required on this form by Section 8 of the U.S. Housing Act of 1937 (42 U.S.C. 1437f). Collection of the name and address of both the family and the owner is mandatory. The information is used to determine if a unit meets the housing quality standards of the section 8 rental assistance program. HUD may disclose this information to Federal, State and local agencies when relevant to civil, criminal, or regulatory investigations and prosecutions. It will not be otherwise disclosed or released outside of HUD, except as permitted or required by law. Failure to provide any of the information may result in delay or rejection of family participation.

Assurances of confidentiality are not provided under this collection. This collection of information is authorized under Section 8 of the U.S. Housing Act of l937 (42 U.S.C. 1437f). The information is used to determine if a unit meets the housing quality standards of the section 8 rental assistance program.

PHA Tenant ID Number Date of Request (mm/dd/yyyy)

Inspector Date Last Inspection (mm/dd/yyyy) Date of Inspection (mm/dd/yyyy)

Type of Inspection Project Number Neighborhood/Census Tract

Initial Special ReinspectionA. General Information Street Address of Inspected Unit

City County State Zip

Name of Family Current Telephone of Family

Current Street Address of Family

City County State Zip

Number of Children in Family Under 6

Name of Owner or Agent Authorized to Lease Unit Inspected Telephone of Owner or Agent

Address of Owner or Agent

Housing Type (check as appropriate)

Single Family Detached

Duplex or Two Family Row

House or Town House

Low Rise: 3,4 Stories, Including Garden Apartment High Rise; 5 or More Stories

Manufactured Home

Congregate

Cooperative Independent Group Residence

Single Room Occupancy

Shared Housing

Other:(Specify)

ref Handbook 7420.8 form HUD52580A (9/00) Page 1 of 21

EXHIBIT 7-B1

HOME Investment Partnerships ProgramMontana Department of Commerce HOME Administration Manual

1/2014

B. Summary Decision on the Unit(to be completed after the form has been filled in)

Housing Quality Standard Pass or Fail 1. Fail If there are any checks under the column headed “Fail” the unit

fails the minimum housing quality standards. Discuss with the owner the repairs noted that would be necessary to bring the unit up to the standard.

2. Inconclusive If there are no checks under the column headed“Fail”

and there are checks under the column headed “Inconclusive,” obtain additional information necessary for a decision (question owner or tenant as indicated in t he i tem i nstructions gi ven in this c hecklist). Once additional information is obtained, change the rating for the item and record the date of verification at the far right of the form.

3. Pass If neither ( 1) nor ( 2) above is checked, the unit passes the minimum housing quality standards. Any additional conditions described in the right hand column of the form should serve to (a) establish the precondition of the unit, (b) indicate possible additional areas to negotiate with the owner,(c) aid in assessing the reasonableness of the rent of the uni t, and ( d) aid the tenant in deciding among possible units to be rented. The tenant is responsible for deciding whether he or she finds these conditions acceptable.

Unit Size: Count the number of bedrooms for purposes of the FMR or Payment Standard. Record in the box provided.

Year Constructed: Enter from Line 5 of the Request for Tenancy Approval form. Record in the box provided.

Number of Sleeping Rooms: Count the number of rooms whichcould be used for sleeping, as identified on the checklist. Record in the box provided. C. How to Fill Out This Checklist Complete the checklist on the unit to be occupied (or currently occupied) by the tenant. Proceed through the inspection as follows: Area Checklist Category

room by room 1. Living Room2. Kitchen3. Bathroom4. All Other Rooms Used for Living5. All Secondary Rooms Not Used for Living

basement or utility room 6. Heating & Plumbingoutside 7. Building Exterioroverall 8. General Health & Safety

Each part of the checklist will be accompanied by an explanation of the item to be inspected.

Important: For each item numbered on the checklist, check one box only (e.g., check one box only for item 1.4 "Security ”in the Living Room.)

In the space to the right of the description of the item, if the decision on the item is: “Fail” write what repairs are necessary; If “Inconclusive” write in details.Also, if ”Pass” but there are some conditions present that need to be brought to the attention of the owner or the tenant, write these in the space to the right.If it is an annual inspection, record to the right of the form any repairs made since the last inspection. If possible, record reason for repair (e.g., ordinary maintenance, tenant damage).

If it is a complaint inspection, fill out only those checklist items for which complaint is lodged. Determine, if possible, tenant or owner cause.

Once the checklist has been completed, return to Part B (Summary Decision on the Unit).

1. Living Room

1.1 Living Room Present Note: If the unit is an efficiency apartment, consider the living room present. 1.2 Electricity In order to qualify, the outlets must be present and properly installed in the baseboard, wall or floor of the room. Do not count a single duplex receptacle as two out lets, i.e., there must be two of these in the room, or one of these plus a permanently installed ceiling or wall light fixture. Both the outlets and/or the light must be working. Usually, a room will have sufficient lights or electrical appliances plugged into outlets to determine workability. Be sure light fixture does not f ail just because the bulb is burned out. Do not count any of the following items or fixtures as outlets/fixtures: Table or floor lamps (these are not permanent light fixtures); ceiling lamps plugged into socket; extension cords. If the electric service to the unit has been temporarily turned of f check ‘’Inconclusive.’’ Contact owner or manager after inspection to verify that electricity functions properly when service is turned on. Record this information on the checklist. 1.3 Electrical Hazards Examples of what this means: broken wiring; non-insulated wiring; frayed wiring; improper types of wiring, connections or insulation; wires lying in or located near standing water or other unsafe places; light fixture hanging from electric wiring without other firm support or fixture; missing cover plates on switches or out lets; badly cracked outlets; exposed fuse box connections; overloaded circuits evidenced by frequently ‘’blown’’ fuses (ask the tenant). Check “Inconclusive’’ if you are uncertain about severity of the problem and seek expert advice. 1. 4 Security “Accessible to outside” m eans: doors open to the outside or to a common public hall; windows accessible from the outside (e.g. basement and first floor); windows or doors leading onto a fire escape, porch or other outside place that can be reached from the ground. “Lockable” means: the window or door has a properly working lock, or i s nailed shut, or t he w indow i s not designed to be opened. A storm window lock that is working properly is acceptable. Windows that are nailed shut are acceptable only if these windows are not needed for ventilation or as an alternate exit in case of fire. 1.5 Window Condition Rate the windows in the room (including windows in doors). “Severe det erioration” means t hat t he w indow no l onger has t he capacity to keep out the wind and the rain or is a cutting hazard. Examples are: missing or broken-out pan es; dan gerously loose cracked pan es; windows that will not close; windows that, when closed, do not form a reasonably tight seal. If more than one window in the room is in this condition, give details in the space provided on the right of the form. If there is only “moderate d eterioration” of the windows the item should "Pass." "Moderate deterioration” means windows which are reasonably weather-tight, but show evidence of some aging, abuse, or lack of repair. Signs of deterioration are: minor crack in window pane; splintered sill; signs of some minor rotting in the window frame or the window itself; window panes loose because of missing window putty. Also for deteriorated and peeling paint see 1.9. If more than one window is in this condition, give details in the space provided on the right of the form.

ref Handbook 7420.8 form HUD52580A (9/00) Page 2 of 21

EXHIBIT 7-B1

HOME Investment Partnerships ProgramMontana Department of Commerce

HOME Administration Manual1/2014

1.6 Ceiling Condition “Unsound or hazardous” means the presence of such serious de-fects that either a potential exists for structural collapse or that large cracks or holes allow significant drafts to enter the unit. The condition includes: severe bulging or buckling; large holes; missing parts; falling or in danger of falling loose s urface materials ( other than paper or paint). Pass ceilings that are basically sound but have some nonhazardous defects, including: small holes or cracks; missing or broken ceiling tiles; water stains; soiled surfaces; un painted surfaces; peeling paint (for peeling paint see item 1.9). 1.7 Wall Condition “Unsound or hazardous” includes: serious de fects such that t he structural safety of the building is threatened, such as severe buckling, bulging or leaning; damaged or loose structural members; large holes; air infiltration. Pass walls that are basically sound but have some non hazardous defects, including: small or shallow holes; cracks; loose or missing parts; unpainted surfaces; peeling paint (for peeling paint see item 1.9). 1.8 Floor Condition “Unsound or hazardous” means the presence of such serious defects that a potential exists for structural collapse or other threats to safety (e.g., st ripping) or large cracks or hol es al low substantial dr afts f rom below t he f loor. The c ondition includes: severe buckling or major movements under walking stress; damaged or missing parts. Pass floors that are basically sound but have some nonhazardous defects, including: heavily worn or damaged floor surface (for ex-ample, scratches or gouges in surface, missing por tions of tile or linoleum, previous water damage). If there is a floor covering, also note the condition, especially i f badly worn or soiled. If there is a f loor covering, including paint or sealant, al so note the conditions, specially if badly worn, soiled or peeling (for peeling paint, see 1.9).

1.9 Lead-Based PaintHousing Choice Voucher Units If the unit was built January 1,1978, or after, no child under age six will occupy or currently occupies it, is a 0-BR, elderly or handicapped unit with no children under age six on the lease or expected, has been certified lead-based paint free by a certified lead-based paint inspector (no lead-based paint present or no lead-based paint present after removal of lead-based paint.), check NA and do not inspect painted surfaces.

This requirement applies to all painted surfaces (building components) within the unit. (Do not include tenant belongings). Surfaces to receive a visual assessment for deteriorated paint include walls, floors, ceilings, built in cabinets (sink bases), baseboards, doors, door frames, windows systems including mullions, sills, or frames and any other painted building component within the unit. Deteriorated paint includes any painted surface that is peeling, chipping, chalking, cracking, damaged or otherwise separated from the substrate.

All deteriorated paint surfaces more than 2 sq. ft. in any one interior room or space, or more than 10% of the total surface area of an interior type of component with a small surface area (i.e., window sills, baseboards, and trim) must be stabilized (corrected) in accordance with all safe work practice requirements and clearance is required. If the deteriorated painted surface is less than 2 sq. ft. or less than 10% of the component, only stabilization is required. Clearance testing is not required. Stabilization means removal of deteriorated paint, repair of the substrate, and application of a new protective coating or paint. Lead-Based Paint Owner Certification is required following stabilization activities, except for de minimis level repairs.

Previous editions are obsolete Page 3 of 21 ref Handbook 7420.8 form HUD-52580-A (9/00)

EXHIBIT 7-B1



1. Living Room For each numbered item, check one box only.

Item DescriptionDecision

If Fail or

Pas

s

Inco

nclu

sive

No.

Fail If Fail, what repairs are necessary? Inconclusive,

If Inconclusive, give details. date (mm/dd/yyyy)

Yes

, No, If Pass with comments, give details. of final approval

1.1 Living Room Present

Is there a living room? 1.2 Electricity Are there at least two working outlets or one working outlet and one working light fixture?

1.3 Electrical Hazards Is the room free from electrical hazards?

1.4 Security Are all windows and doors that are accessible from the outside lockable? 1.5 Window Condition Is there at least one window, and are all windows free of signs of severe deterioration or missing or broken out panes?

1.6 Ceiling Condition Is the ceiling sound and free from hazardous defects?

1.7 Wall Condition Are the walls sound and free from hazardous defects?

1.8 Floor Condition Is the floor sound and free from hazardous defects?

1.9 Lead-Based Paint Are all painted surfaces free of deteriorated paint?

If no, does deteriorated surfaces exceed two square Not Applicable feet and/or more than 10% of a component?

Additional Comments: (Give Item Number)

Comments continued on a separate page Yes No


EXHIBIT 7-B1



2. Kitchen 2.1 Kitchen Area Present Note: A kitchen is an area used for preparation of meals. It may be either a separate room or an area of a larger room (for example, a kitchen area in an efficiency apartment). 2.2 - 2.9 Explanation for these items is the same as that pro-

vided for “Living Room’’ with the following modifications:

2.2 ElectricityNote: The requirement is that at least one outlet and one permanent light fixture are present and working.2.5 Window ConditionNote: The absence of a window does not fail this item in the kitchen. If there is no window, check “Pass.”

2.10 Stove or Range with Oven Both an oven and a stove ( or range) w ith t op burners must be present and working. If either Is missing and you know that the owner is responsible for supplying these appliances, check “Fail.’’ Put check in ‘ ’Inconclusive’’ column i f the tenant is responsible for supplying the a ppliances and he or she has not yet moved i n. Contact tenant or prospective tenant to gain verification that facility will be supplied and is in working condition. Hot plates are no t acceptable substitutes for these facilities. An oven is not working if it will not heat up. To be working a s tove or range must have all burners working and knobs to turn them off and on. Under “ working condition,” also look for hazardous ga s hook- ups evidenced by s trong gas smells; these should f ail. ( Be sure that this condition is not confused with an unlit pilot light a condition that should be noted, but does not fail.) If both an oven and a stove or range are present, but the gas or electricity are turned off, check “ Inconclusive.” Contact owner or manager to get verification that fcility w orks w hen gas i s turned on. If both an oven and a stove or range are present and working, but defects ex ist, check " Pass" and note these to t he r ight of t he form. Possible defects are marked, dented, or scratched surfaces; cracked burner ring; limited size relative to family needs. A microwave oven may be substituted for a tenant-supplied oven and stove (or range). A microwave oven may be substituted for an owner-supplied oven and stove (or range) if the tenant agrees and microwave ovens are furnished instead of ovens and stoves ( or ranges) to both subsidized and unsubsidized tenants in the building or premises.

2.11 Refrigerator If no refrigerator is present, use the same criteria for marking either “Fail” or “Inconclusive” as were used for the oven and stove or range. A refrigerator is not working if it will not maintain a temperature low enough to keep food from spoiling over a reasonable period of time. If the el ectricity is turned of f, mark ‘ ’Inconclusive.’’ Contact owner (or tenant if unit is occupied) to get verification of working condition. If the refrigerator is present and working but defects exist, note these to the right of the form. Possible minor defects include: broken or missing interior shelving; dented or scratched interior or exterior surfaces; minor deterioration of door seal; loose door handle. 2.12 Sink If a permanently attached kitchen sink is not present in the kitchen or kitchen area, mark ‘ ’Fail.’’ A sink in a bat hroom or a portable basin will not satisfy this requirement. A sink is not working unless it has running hot and cold water from the faucets and a pr operly c onnected and properly working drain ( with a "gas trap”). In a vac ant apartment, t he hot w ater may have been turned off and there w ill be no hot w ater. Mark this “Inconclusive.” Check with owner or manager to verify that hot water is available when service is turned on. If a working sink has defects, note this to the right of the item. Possible minor defects include: dripping faucet; marked, dented, or scratched surface; slow drain; missing or broken drain stopper. 2.13 Space for Storage, Preparation, and Serving of Food Some s pace must be available for the storage, pr eparation, and serving of f ood. If there i s no bui lt-in s pace for food storage and preparation, a table used for food preparation and aportable storage cabinet will satisfy the requirement. If there is no built-in space, and no room for a table and portable cabinet, check “Inconclusive” and discuss w ith the tenant. The tenant makes t he final determination as to whether or not this space is acceptable. If there are some minor defects, check "Pass" and make notes to the r ight. P ossible def ects i nclude: marked, dented, or scratched surfaces; broken shelving or cabinet doors; broken drawers or cabinet hardware; limited size relative to family needs.


EXHIBIT 7-B1



2. Kitchen For each numbered item, check one box only.Decision

Item Description

Pas

s

Inco

nclu

siv e

No. Fail

If Fail, what repairs are necessary? If Inconclusive, give details.

Yes, No

Yes, N

o,

If Pass with comments, give details. 2.1 Kitchen Area Present Is there a kitchen?

2.2 Electricity Are there at least one working outlet and one work-ing, permanently installed light fixture? 2.3 Electrical Hazards Is the kitchen free from electrical hazards? 2.4 Security Are all windows and doors that are accessible from the outside lockable? 2.5 Window Condition Are all windows free of signs of deterioration or missing or broken out panes? 2.6 Ceiling Condition Is the ceiling sound and free from hazardous defects?


2.8 Floor Condition Is the floor sound and free from hazardous defects? 2.9 Lead-Based Paint Are all painted surfaces free of deteriorated paint? If no, does deteriorated surfaces exceed two square

Not Applicable feet and/or less than 10% of a component? 2.10 Stove or Range with Oven Is there a working oven, and a stove (or range) with top burners that work? If no oven and stove (or range) are present, is there

a microwave oven and, if microwave is owner-sup-

plied, do other tenants have microwaves instead of an oven and stove (or range)? 2.11 Refrigerator Is there a refrigerator that works and maintains atemperature low enough so that food does not spoil over a reasonable period of time? 2.12 Sink Is there a kitchen sink that works with hot and cold running water? 2.13 Space for Storage, Preparation, and Servingof Food Is there space to store, prepare, and serve food? Additional Comments: (Give Item Number)(Use an additional page if necessary)


If Fail or Inconclusive, date (mm/dd/yyyy) of final approval


EXHIBIT 7-B1



3. Bathroom 3.1 Bathroom Present Most units have easily identifiable bathrooms (i.e., a separate room with toilet, washbasin and t ub or shower). In some cases, however, you w ill encounter units with scattered bathroom facilities (i.e., toilet. washbasin and tub or shower located in separate parts of the unit). At a minimum, there m ust be an enclosure ar ound t he t oilet. In t his c ase, count t he enclosure around the toilet as the bathroom and proceed with 3.2-3.9 below, with respect to this enclosure. If there is more than one bathroom that is normally used, rate the one that is in best condition for Part 3. If there is a second bathroom that is also used, complete Part 4 of the checklist for this room. (See Inspection Manual for additional notes on rating the second bathroom.) 3.2 - 3.9 Explanation for these items is the same as that

provided for “Living Room’’ with the following modifications:

3.2 ElectricityNote: The requirement is that at least one permanent light fixture is present and working3.3 Electrical HazardsNote: In addition to the previously mentioned hazards, outlets that are located where water might splash or collect are considered an electrical hazard.3.5 Window ConditionNote: The absence of a window does not fail this item in the bathroom (see item 3.13, Ventilation, for relevance of window with respect to ventilation). If there is no window, but a working vent system is present, check “Pass.”3.7 Wall ConditionNote: Include under nonhazardous defects (that would pass, but should be noted) the following: broken or loose tile; deteriorated gr outing at t ub/wall an d t ub/floor joints, or tiled surfaces; water stains.3.8 Floor ConditionNote: Include under nonhazardous defects (that would pass, but should be noted) the following: missing floor tiles; water stains.

3.10 Flush Toilet in Enclosed Room in Unit The toilet must be contained within the unit, be in proper operating condition, and be available for the exclusive use of the occupants of the unit ( i.e., outhouses or facilities shared by occupants o f ot her units are not acceptable). It must allow for privacy. Not working means: the toilet is not connected to a water supply; it is not connected to a sewer drain; it is clogged; it does not have a trap; the c onnections, vents or traps are faulty to the extent that severe leakage of w ater or escape of gases oc curs; the flushing mechanism does not function properly. If the water to the unit has been turned off, check " Inconclusive.’’ O btain verification f rom ow ner or m anager t hat facility works properly when water is turned on. Comment to the right of the form if the toilet is “present, exclusive, and working,” but has the following types of defects: constant running; chipped or broken porcelain; slow draining. If dr ain b lockage i s more s erious and occurs f urther in t he s ewer line, causing backup, check item 7.6, “Fail,” under the plumbing and heating par t of t he c hecklist. A s ign o f s erious s ewer bl ockage is the presence of numerous backed-up drains.

3.11 Fixed Wash Basin or Lavatory in Unit The wash basin must be permanently installed ( i.e., a p ortable wash basin does not satisfy the requirement). Also, a kitchen sink used to pass the requirements under Part 2 of the checklist (kitchen facilities) cannot also serve as the bathroom wash basin. The wash basin may be located separate from the other bathroom facilities (e.g., in a hallway). Not working means: t he wash basin is not connected to a system that will deliver hot and cold running water; it is not connected to a properly oper ating drain; t he connectors (or vents or traps) are faulty to the extent that severe leakage of water or escape of sewer gases occurs. If the water to the unit or the hot water unit has been turned off, check "Inconclusive." Obtain verification from owner or manager that the system is in working condition. Comment to the right of the form if the wash basin is “present and working,” but has the following types of minor defects: insufficient water pressure; dripping faucets; minor leaks; cracked or chipped porcelain; slow drain (see discussion above under 3.10). 3.12 Tub or Shower in Unit Not present means that neither a tub nor shower is present in the unit. Again, these facilities need not be in the same room with the rest of the bathroom facilities. They must, however, be private. Not working covers the same requirements detailed above for wash basin (3.11). Comment to the right of the form if the tub or shower is present and working, but has the following types of defects: dripping faucet; minor leaks; cracked porcelain; slow drain (see discussion under 3.10); absent or broken support rod for shower curtain. 3.13 Ventilation Working vent systems include: ventilation shafts (nonmechanical vents) and electric fans. Electric vent fans must function when switch is turned on. (Make sure that any malfunctions are not due to the fan not being plugged in). I f electric current to the unit has not been t urned on (and there is no operable window), check “Inconclusive.” Obtain verification from owner or m anager that system works. Note: exhaust vents must be vented to the outside, attic, or crawlspace.


EXHIBIT 7-B1



3. Bathroom For each numbered item, check one box only.Decision

Item Description

Pas

s

Inco

nclu

sive

If Fail or No. Fa

il If Fail, what repairs are necessary? Inconclusive,


Yes, No

Yes, N

o,

If Pass with comments, give details. of final approval 3.1 Bathroom Present (See description) Is there a bathroom?

3.2 Electricity Is there at least one permanently installed light fixture?

3.3 Electrical Hazards Is the bathroom free from electrical hazards? 3.4 Security Are all windows and doors that are accessible from the outside lockable? 3.5 Window Condition Are all windows free of signs of deterioration or missing or broken out panes? 3.6 Ceiling Condition Is the ceiling sound and free from hazardous defects?



3.9 Lead-Based Paint Are all painted surfaces free of deteriorated paint? If no, does deteriorated surfaces exceed two square

Not Applicable feet and/or more than 10% of a component? 3.10 Flush Toilet in Enclosed Room in Unit Is there a working toilet in the unit for the exclusive private use of the tenant?

3.11 Fixed Wash Basin or Lavatory in Unit Is there a working, permanently installed wash basinwith hot and cold running water in the unit?

3.12 Tub or Shower Is there a working tub or shower with hot and cold running water in the unit? 3.13 Ventilation

Are there operable windows or a working vent sys-

tem? Additional Comments: (Give Item Number)(Use an additional page if necessary)



EXHIBIT 7-B1



4. Other Room Used for Living and Halls Complete an “Other Room” checklist for as many “other rooms used for living” as are present in the unit and not already noted in Parts l, 2, and 3 of the checklist. S ee t he discussion be low for definition of ‘’Used for living.’’ Also complete an ‘’Other Room” checklist for all entrance halls, corridors, and staircases that ar e located within the unit and are part of the area used for living. If a hall, entry and/ or stairway are contiguous, rate them as a whole (i.e., as part of one space). Additional forms for rating “Other Rooms” are provided in the check-list. Definition of “Used for l iving." Rooms "Used for living” are areas of the unit that are walked through or lived in on a regular basis. Do not i nclude r ooms or o ther areas t hat have been permanently, or near permanently, closed off or areas that are infrequently entered. For example, do not include a utility room, attached shed, attached closed-in porch, basement, or garage if they are closed off from the main living area or are infrequently ent ered. D o include any of these areas if they are frequently used (e.g., a finished basement/play-room, a closed-in porch that is used as a bedroom during summer months). Occasional use of a washer or dryer in an otherwise unused room does not constitute regular use. If the unit is vacant and you do not know the eventual use of a particular room, complete an ‘’Other Room’’ checklist if there is any chance that the room will be used on a regular basis. If there is no chance that the room will be used on a regular basis, do not include it (e.g., an unfinished basement) since it will be checked under Part 5, All Secondary Rooms (Rooms not used for living). 4.1 Room Code and Room Location Enter the appropriate room code given below: Room Codes: 1 = B edroom or any other room us ed f or sleeping ( regardless of

type of room) 2 = Dining Room or Dining Area 3 = Second Living Room, Family Room, Den, Playroom, TV Room 4 = Entrance Halls, Corridors, Halls, Staircases 5 = A dditional B athroom ( also check presence of sink trap and

clogged toilet) 6 = Other Room Location: Write on the line provided the location of the room with respect to the unit’s width, length and floor level as if you were standing outside the unit facing the entrance to the unit: right/left/center: record whether the room is situated to the right, left, or center of the unit. front/rear/center: record whether the room is situated to the back, front or center of the unit. floor level: identify the floor level on which the room is located. If t he unit is vacant, you m ay hav e some difficulty pr edicting t he eventual use of a room. Before giving any room a code of 1 (bedroom), the room must meet all of the requirements for a ‘’Room used for sleeping’’ (see items 4. 2 and 4.5).

4.2 - 4.9 Explanations of these items are the same as those provided for "Living Room’’ with the following modifications:

4.2 Electricity/IlluminationIf the room code is not a "1," the room must have a means of natural or artificial i llumination such as a permanent light fixture, wall outlet present, or light from a window in the room or near the room. If any required item is missing, check “Fail." If the electricity is turned off, check “Inconclusive."4.5 Window ConditionAny room used for sleeping must have at least one window. If the windows in sleeping rooms are designed to be opened, at least one window must be operable. The minimum standards do not require a window in “other rooms.” Therefore, if there is no w indow i n ano ther room not us ed f or s leeping, c heck “Pass,” and note “no window” in the area for comments.4.6 Smoke DetectorsAt least one battery- operated or hard-wired smoke detector must be present and working on each level of the unit, including the basement, but not the crawl spaces and unfinished attic.Smoke detectors must be i nstalled in accordance with and m eet the requirements of the National F ire Protection A ssociation Standard (NFPA) 74 (or its successor standards).If the dwelling unit is occupied by any hear ing-impaired per-son, smoke detectors must have an alarm system designed for hearing-impaired per sons as specified in N FPA 74 ( or successor standards).If the uni t w as under H AP contract pr ior t o A pril 2 4, 1 993, owners who installed battery -operated or hard-wired smoke detectors in compliance with HUD’s smoke detector requirements, including the regulations published on July 30, 1992 ( 57 F R 33846), will not be required subsequently t o comply with any additional requirements mandated by NFPA 74 ( i.e. the owner would not be required to install a s moke detector in a basement not used for living purposes, nor would t he ow ner be required to change the location of the smoke detectors that have already been installed on the other f loors of the unit). In this case, check “Pass” and note under comments.

Additional Notes For staircases, the adequacy of light and condition of the stair rails and railings is covered under Part 8 of the checklist (General Health and Safety)


EXHIBIT 7-B1



4. Other Rooms Used for Living and Halls For each numbered item, check one box only.

4.1 Room Location Room Code ______ right/left/center: the room is situated to the right, left,

1 = Bedroom or Any Other Room Used for Sleeping (regardless of

or center of the unit.

type of room) ______ front/rear/center: the room is situated to the back, front 2 = Dining Room or Dining Area


3 = Second Living Room, Family Room, Den, Playroom, TV Room ______ floor level: the floor level on which the room is 4 = Entrance Halls, Corridors, Halls, Staircases

located.

5 = Additional Bathroom (also check presence of sink trap and clogged toilet)

6 = Other:


If Fail or

Pas

s

Inco

nclu

sive

No.



Yes, No

Yes, N

o,

If Pass with comments, give details. of final approval 4.2 Electricity/Illumination If Room Code i s a 1, are there at least two working outlets or one working out let and one working, permanently installed light fixture? If Room Code is not a 1, is there a means of illumination?


4.4 Security Are all windows and doors that are accessible from the outside lockable? 4.5 Window Condition If Room Code is a 1, is there at least one window? And, regardless of Room Code, are all windows free of signs of s evere d eterioration or missing or broken-out panes? 4.6 Ceiling Condition Is the ceiling sound and free from hazardous defects?



4.9 Lead-Based Paint Are all painted surfaces free of deteriorated paint? If no, does deteriorated surfaces exceed two square

Not Applicable feet and/or more than 10% of a component? 4.10 Smoke Detectors Is there a working smoke detector on each level? Do the smoke detectors meet the requirements ofNFPA 74? In units occupied by the hearing impaired, is there analarm system connected to the smoke detector? Additional Comments: (Give Item Number)(Use an additional page if necessary)



EXHIBIT 7-B1



4. Supplemental for Other Rooms Used for Living and Halls For each numbered item, check one box only.

4.1 Room Location Room Code______ right/left/center: the room is situated to the right, left,



type of room)______ front/rear/center: the room is situated to the back, front 2 = Dining Room or Dining Area


3 = Second Living Room, Family Room, Den, Playroom, TV Room______ floor level: the floor level on which the room is 4 = Entrance Halls, Corridors, Halls, Staircases

located.


6 = Other:


If Fail, what repairs are necessary? If Fail or

Pas

s

Inco

nclu

sive

No.

Fail If Inconclusive, give details. Inconclusive,

If Pass with comments, give details. date of final

Yes, No

Yes, N

o,

approval

4.2 Electricity/Illumination If Room Code i s a 1, are t here at least two working outlets or one working out let and one working, permanently installed light fixture? If Room Code is not a 1, is there a means of illumination?


4.4 Security Are all windows and doors that are accessible from the outside lockable?

4.5 Window Condition If Room Code is a 1, is there at least one window? And, regardless of Room Code, are all windows free of signs of s evere d eterioration or missing or broken-out panes? 4.6 Ceiling Condition Is the ceiling sound and free from hazardous defects?

4.7 Wall ConditionAre the walls sound and free from hazardous defects?

4.8 Floor Condition Is the floor sound and free from hazardous defects? 4.9 Lead-Based PaintAre all painted surfaces free of deteriorated paint?If no, does deteriorated surfaces exceed two square

Not Applicablefeet and/or more than 10% of a component?4.10 Smoke DetectorsIs there a working smoke detector on each level?Do the smoke detectors meet the requirements ofNFPA 74?In units occupied by the hearing impaired, is there analarm system connected to the smoke detector?

Additional Comments: (Give Item Number)(Use an additional page if necessary)



EXHIBIT 7-B1




4.1 Room Location Room Code ______ right/left/center: the room is situated to the right, left,



type of room) ______ front/rear/center: the room is situated to the back, front 2 = Dining Room or Dining Area


3 = Second Living Room, Family Room, Den, Playroom, TV Room ______ floor level: the floor level on which the room is 4 = Entrance Halls, Corridors, Halls, Staircases

located.


6 = Other:

Decision Item Description

Pas

s

Inco

nclu

sive

If Fail or No.



Yes, No,

Yes, N

o,

If Pass with comments, give details. of final approval 4.2 Electricity/Illumination If Room Code i s a 1, are there at least two working outlets or one working out let and one working, permanently installed light fixture? If Room Code is not a 1, is there a means of illumination?


4.4 Security Are all windows and doors that are accessible from the outside lockable? 4.5 Window Condition If Room Code is a 1, is there at least one window? And, regardless of Room Code, are all windows free of s igns of severe d eterioration or missing or broken-out panes? 4.6 Ceiling Condition Is the ceiling sound and free from hazardous defects?



Not Applicablefeet and/or more than 10% of a component?4.10 Smoke DetectorsIs there a working smoke detector on each level?Do the smoke detectors meet the requirements ofNFPA 74?In units occupied by the hearing impaired, is there analarm system connected to the smoke detector? Additional Comments: (Give Item Number)(Use an additional page if necessary)



EXHIBIT 7-B1




4.1 Room Location Room Code______ right/left/center: the room is situated to the right, left,



type of room)______ front/rear/center: the room is situated to the back, front 2 = Dining Room or Dining Area


3 = Second Living Room, Family Room, Den, Playroom, TV Room______ floor level: the floor level on which the room is 4 = Entrance Halls, Corridors, Halls, Staircases

located.


6 = Other:


If Fail or

Pas

s

Inco

nclu

sive

No.



Yes, No

Yes, N

o,

If Pass with comments, give details. of final approval

4.2 Electricity/Illumination If Room Code is a 1, are there at least two working outlets or one working out let and one working, permanently installed light fixture? If Room Code is not a 1, is there a means of illumination?


4.4 Security Are all windows and doors that are accessible from the outside lockable? 4.5 Window Condition If Room Code is a 1, is there at least one window? And, regardless of Room Code, are all windows free of signs of severe deterioration or missing or broken-out panes? 4.6 Ceiling Condition Is the ceiling sound and free from hazardous defects?



Not Applicablefeet and/or more than 10% of a component?4.10 Smoke DetectorsIs there a working smoke detector on each level?Do the smoke detectors meet the requirements ofNFPA 74?In units occupied by the hearing impaired, is there analarm system connected to the smoke detector?




EXHIBIT 7-B1



5. All Secondary Rooms (Rooms not used for living) 5. Secondary Rooms (Rooms not used for living) If any room in the unit did not meet the requirements for “Other room used for living" in Part 4, it is to be considered a “Secondary room (not used for living),” Rate all of these rooms together (i.e., a single Part 5 checklist for all secondary rooms in the unit). Inspection is r equired of t he following two items since hazardous defects under these items could jeopardize the rest of the unit, even if present in rooms not used for living: 5. 2 S ecurity, 5. 3 Electrical Hazards. Also, be observant of any other potentially hazardous features in these rooms and record under 5.4 5.1 None If there are no “Secondary Rooms (rooms not used for living),” check "None" and go on to Part 6.5.2 - 5.4 Explanations of these items is the same as those

provided for ‘’Living Room’’Additional Note In recording “Other potentially hazardous features,” note ( in the space provided) the means of access to the room with the hazard and check the box under ‘ ’Inconclusive.” Discuss t he hazard w ith the HA inspection supervisor to determine ‘’Pass’’ or ‘’Fail.’’ Include defects like: large holes in floor, walls or ceilings; evidence of structural collapse; windows in condition of severe deterioration; and deteriorated paint surfaces.

6. Building Exterior 6.1 Condition of Foundation ‘’Unsound or hazardous’’ means foundations with severe structural defects indicating the potential for structural collapse; or foundations that allow significant entry of ground water ( for example, evidenced by flooding of basement). 6.2 Condition of Stairs, Rails, and Porches "Unsound or hazardous" means: stairs, porches, balconies, or decks w ith s evere structural defects; broken, rotting, or missing steps; ab sence of a han drail when t here are extended lengths o f steps ( generally four or more consecutive s teps); ab sence of or insecure railings around a porch or balcony which is approximately 30 inches or more above the ground. 6.3 Condition of Roof and Gutters “Unsound and hazardous” m eans: The roof has s erious defects such as serious buckling or sagging, indicating the poteetial of structural collapse; large holes or other defects that would result in significant air or water i nfiltration ( in most cases s evere exterior defects will be reflected in equally serious surface defects within the unit, e. g., buckling, water damage). T he gutters, downspouts and soffits ( area under tee eaves) shows serious decay and have allowed the entry of significant air or water into the interior of the structure. Gutters an d dow nspouts are, however, not required t o pass. If the roof is not observable and there is no sign of interior water damage, check “Pass.”

6.4 Condition of Exterior Surfaces See definition above for roof, item 6.3. 6.5 Condition of Chimney The chimney should not be seriously leaning or showing evidence of significant disintegration (i.e., many missing bricks). 6.6 Lead-Based Paint: Exterior SurfacesHousing Choice Voucher Units If the unit was built January 1,1978 or after, no child under age six will occupy or currentlyoccupies, is a 0-BR, elderly or handicapped unit with no children under age six on the lease or expected, has been certified lead-based paint free by a certified lead-based paint inspector (no lead-based paint present or no lead -based paint present after removal of lead), check NA and do not inspect painted surfaces . Visual assessment for deteriorated paint applies to all exterior painted surfaces (building components) associated with the assisted unit including windows, window sills, exterior walls, floors, porches, railings, doors, decks, stairs, play areas, garages, fences or other areas if frequented by children under age six. All deteriorated paint surfaces more than 20 sq. ft. on exterior surfaces must be stabilized (corrected) in accordance with all safe work practice requirements. If the painted surface is less than 20 sq. ft., only stabilization is required. Clearance testing is not required. Stabilization means removal of deteriorated paint, repair of the substrate, and application of a new protective coating or paint. Lead-Based Paint Owner Certification is required following stabilization activities except for de minimis level repairs.

6.7 Manufactured Homes: Tie Downs Manufactured homes must be placed on a site in a stable manner and be free from hazards such as sliding and wind damage. Manufactured homes must be s ecurely anchored by a tie dow n device which distributes and transfers the loads imposed by the unit to appropriate ground anchors so as to resist wind overturning and sliding, unless a variation has been approved by the HUD Field Office.


EXHIBIT 7-B1



5. All Secondary Rooms (Rooms not used for living) For each numbered item, check one box only.Decision

Item Description

Pas

s

inco

nclu

sive

If Fail or No.



Yes, No

Yes, N

o,

If Pass with comments, give details. of final approval

5.1 None Go to Part 6

5.2 Security Are all windows and doors that are accessible from the outside lockable? 5.3 Electrical Hazards Are all these rooms free from electrical hazards?

5.4 Other Potentially Hazardous Features Are all of these rooms free of any other potentially hazardous features? For each room with an "other potentially hazardous feature," explain the hazard and the means of control of interior access to the room.

6.0 Building Exterior

6.1 Condition of Foundation Is the foundation sound and free from hazards?

6.2 Condition of Stairs, Rails, and Porches Are all the exterior stairs, rails, and porches sound and free from hazards?

6.3 Condition of Roof and Gutters Are the roof, gutters, and downspouts sound and free from hazards?

6.4 Condition of Exterior Surfaces Are exterior surfaces sound and free from hazards?

6.5 Condition of Chimney Is the chimney sound and free from hazards?

6.6 Lead-Based Paint: Exterior Surfaces Are all painted surfaces free of deteriorated paint? If no, does deteriorated surfaces exceed 20 sq. ft. of

Not Applicable total exterior surface area? 6.7 Manufactured Homes: Tie Downs If the unit is a manufactured home, is it properly placed and tied down? If not a manufactured home, check

Not Applicable "Not Applicable."




EXHIBIT 7-B1



7. Heating and Plumbing 7.1 Adequacy of Heating Equipment “Adequate heat” means that the heating system is capable of delivering enough heat to assure a healthy environment in the unit (appropriate to the climate). The HA is responsible for defining what constitutes a healthy living environment in the area of the country in which it operates. Local codes (city or state codes) should be instructive in arriving at a r easonable local definition. For example, for heat adequacy, local codes often require that the unit’s heating facility be capable of maintaining a given temperature level during a designated time period. Portable electric room heaters or kitchen stoves or r anges w ith a bu ilt-in heat un it a re not acceptable as a primary s ource of heat f or units located in ar eas w here c limate conditions require regular heating. “Directly or indirectly to all rooms used for living” means:

“Directly” means that each room used for living has a heat source (e.g., working radiator; working hot air register; baseboard heat)‘’Indirectly’’ means that, i f there is no heat source present in the room, heat can enter the room easily from a heated adjacent room ( e.g a dining room may not have a radiator, but would receive heat from the heated living room through a large open archway).

If the heating system in the unit works, but there is some question whether a room without a heat source would receive adequate indirect heat, check “Inconclusive” and verify adequacy from tenant or owner (e.g., unheated bedroom at the end of a long hallway).

How to determine the capability of the heating system: If the unit is occupied, usually the quickest way to determine the capability of the heating system over time is to question the tenant. If the unit is not oc cupied, or the tenant has not lived in the unit during the months when heat would be needed, check “Inclusive.” It will be necessary to question the owner on this point af ter the inspection has been completed and, if possible, to question other tenants (if it is a muIti-unit structure) about the adequacy of heat provided. Under some circumstances, the adequacy of heat can be deter-mined by a simple comparison of the size of the heating system to the area to be heated. For example, a small permanently installed space h eater in a living o oom i s probably i nadequate for heat ing anything larger than a relatively small apartment. 7.2 Safety of Heating Equipment Examples of “unvented fuel burning space heaters” are: portable kerosene units; unvented open flame portable units.‘’Other unsafe conditions’’ Include: breakage or damage to heating system such that there is a potential for fire or other threats to safety; improper connection of flues al lowing exhaust gases to enter the living area; improper installation of equipment (e.g., proximity of f uel tank to hwat s ource, absence of safety d evices); indications of improper use of equipment (e.g., ev idence of heavy build-up of soot, creosote, or other substance in the chimney); disintegrating equipment; combustible materials near heat source or flue. See Inspection Manual for a more detailed discussion of the inspection of safety aspects of the heating systems. If you are unable to gain access to the pr imary heat ing system in the unit check ‘ ’Inconclusive." Contact the owner or manager f or verification of safety of the s ystem. If t he s ystem has passed a recent local inspection, check ‘ ’Pass.” This apppies especially to units in which heat is pr ovided by a large s cale, c omplex central heating system that s erves multiple units ( e.g., a boiler in the basement of a large apa rtment bu ilding). In most cases, a large scale heating system for a multi-unit bui lding will be subject to periodic safety inspections by a local public agency. Check with the owner or manager to determine the date and outcome of the last such inspection, or look for an inspection certificate posted on the heating system.

7.3 Ventilation and Adequacy of Cooling If the tenant is present and has occupied the unit during the summer months, inquire about the adequacy of air flow. If the tenant is not present or has not occupied the unit during the summer months, test a sample of windows to see that they open (see Inspection Manual for instruction). “Working cooling equipment’’ includes: central (fan) ventilation system; evaporative cooling system; room or central air conditioning. Check “ Inconclusive” if there ar e no operable w indows and i t is impossible, or inappropriate, to test whether a cooling system works. Check w ith ot her tenants in the building ( in a muIti-unit structure) a nd w ith the ow ner or manager for verification of the adequacy of ventilation and cooling. 7.4 Water Heater "Location presents hazard’’ means that the gas or oil water heater is located in living areas or closets where safety hazards may exist (e.g., water heater located in very cluttered closet with cloth and paper items stacked against it). Gas water heaters in bedrooms or other living areas must have safety dividers or shields. Water heaters must have a temperature-pressure relief valve and discharge line ( directed toward the floor or out side of the living area) as a safeguard against build up of steam if the water heater malfunctions. If not, they are not properly equipped and shall fail. To pass, gas or oil fired w ater heaters must be vented into a properly installed chimney or flue leading outside. E lectric w ater heaters do not require venting. If it is impossible to view the water heater, check “Inconclusive.” Obtain verification of safety of system from owner or manager.Check "Pass" if the water heater has passed a local inspection. This applies primarily to hot water that is supplied by a large scale complex water heating system that serves multiple units (e.g., water heat ing s ystem in large apar tment building). Check in the same manner described for heating system safety, item 7.2, above. 7.5 Water Supply If the structure is connected to a city or town water system, check ‘’Pass.” If the structure has a private water supply ( usually in rural areas) inquire into the nature of the supply (probably from the owner) and whether it is approvable by an appropriate public agency. General note: If items 7.5, 7.6, or 7,7 are checked “Inconclusive,” check with owner or manager for verification of adequacy.7.6 Plumbing “Major l eaks” m eans t hat main w ater dr ain and f eed pi pes ( often located i n t he basement) are s eriously l eaking. ( Leaks pr esent at specific facilities have already been evaluated under the checklist items for “Bathroom” and “Kitchen.”) “Corrosion” ( causing serious and persistent levels of rust or contamination in the drinking water) can be determined by observing the color of the dr inking water at ssveral t aps. B adly corroded pipes will produce noticeably brownish water. If the tenant is currently occupying the unit, he or she should be able to provide information about the persistence of this condition. (Make sure that the “rusty water” is not a temporary condition caused by city or town maintenance of main water lines.) See general note under 7.5. 7.7 Sewer Connection If the structure is connected to the city or town sewer system, check “Pass.” If the structure has its own pr ivate disposal system ( e.g., septic ffeld), inquire into the nature of the system and determine whether this type of system can meet appropriate health and safety regulations. The following conditions constitute “Evidence of sewer back up”: strong sewer gas smell in the basement or outside of unit; numerous clogged or very slow drains; marshy areas outside of unit above septic field. See general note under 7.5.


EXHIBIT 7-B1



7. Heating and Plumbing For each numbered item, check one box only.Decision

Item Description

Pas

s

Inco

nclu

sive

If Fail or No.



Yes, No

Yes, N

o,

If Pass with comments, give details. of final approval 7.1 Adequacy of Heating Equipment

Is the heating equipment capable of providing ad-

equate heat (either directly or indirectly) to all rooms used for living?

7.2 Safety of Heating Equipment

Is the unit free from unvented fuel burning space heat-

ers or any other types of unsafe heating conditions? 7.3 Ventilation and Adequacy of Cooling Does t he uni t hav e adequat e v entilation and cooling by means of openable windows or a working cooling system?

7.4 Water Heater Is the water heater located, equipped, and installed in a safe manner? 7.5 Water Supply Is the unit served by an approvable public or private sanitary water supply? 7.6 Plumbing Is plumbing free from major leaks or corrosion that causes serious and persistent levels of rust or con-tamination of the drinking water? 7.7 Sewer Connection Is plumbing connected to an approvable public or private disposal system, and is it free from sewer back-up? Additional Comments: (Give Item Number)



EXHIBIT 7-B1



8. General Health and Safety

8.1 Access to Unit “Through another unit” means that access to the unit Is only possible by means of passage through another dwelling unit. 8.2 Exits “Acceptable fire exit” means that the building must have an alterna-tive means of exit that meets local or S tate regulations in case of fire; this could include:

An openable window if the unit is on the first floor or second floor or easily accessible to the ground.

A back door opening on to a porch with a stairway leading to the ground.

Fire escape, fire ladder, or fire stairs.“Blocked” means that the exit is not useable due to conditions such as debris, storage, door or window nailed shut, broken lock.Important note: The HA has the final responsibility for deciding whether the type of emergency exit is acceptable, although te tenant should assist in making the decision. 8.3 Evidence of Infestation “Presence of rats, or severe infestation by mice or vermin” (such as roaches) is evidenced by: rat holes; droppings; rat runs; numerous settings of rat poison. If the unit is occupied, ask the tenant, 8.4 Garbage and Debris “Heavy accumulation” means large piles of trash and ga rbage, discarded furniture, and other debr is (not temporarily stored awaiting removal) that might harbor rodents, This may occur inside the unit, i n common areas, or outside. I t usually means a level of accumula-tion beyond the capacity of an individual to pick up within an hour or two. 8.5 Refuse Disposal “Adequate covered facilities" Includes: trash cans with covers, gar-bage chutes, “Dumpsters” (i.e., large scale refuse boxes with lids); trash bags ( if approvable by l ocal public agency). “ ApprovabIe by local public agency” means t hat t he local Health and S anitation Department ( city, town or c ounty) ap proves t he type of f acility i n use. Note: During the period when the HA is setting up its inspection program, it will check with the local health and sanitation department to determine w hich t ypes of facilities ar e acceptable and include this in the inspection requirements. If the unit is vacant and there are no adequate covered facilities present, check “ Inconclusive.” Contact t he ow ner or m anager f or verification of facilities provided when the unit is occupied. 8.6 Interior Stairs and Common Halls ‘’Loose, broken, or missing steps’’ should fail if they present a serious risk of tripping or falling. A handrail is required on extended sections of stairs (generally four or more consecutive steps). A railing is required on unprotected heights such as around stairwells. “Other hazards” would be conditions such as bare electrical wires and tripping hazards. Housing Choice Voucher Units If the unit was built January 1, 1978, or after, no child under six will occupy or currently occupies it, is a 0-BR, elderly or handicapped unit with no children under six on the lease or expected, has been certified lead-based paint free by a certified lead-based paint inspector (no lead-based paint present or no lead-based paint present after removal of lead-based paint.), check NA and do not inspect painted surfaces.

This requirement applies to all painted surfaces (building compo-nents) within the unit. (Do not include tenant belongings). Surfaces to receive a visual assessment for deteriorated paint include walls, floors, ceilings, built in cabinets (sink bases), baseboards, doors, door frames, windows systems including

mullions, sills, or frames and any other painted building compo-nent within the unit. Deteriorated paint includes any painted surface that is peeling, chipping, chalking, cracking, damaged or otherwise separated from the substrate.

All deteriorated paint surfaces more than 2 sq. ft. in any one interior room or space, or more than 10% of the total surface area of an interior type of component with a small surface area (i.e., window sills, baseboards, and trim) must be stabi-lized (corrected) in accordance with all safe work practice requirements and clearance is required. If the deteriorated painted surface is less than 2 sq. ft. or less than 10% of the component, only stabilization is required. Clearance testing is not required. Stabilization means removal of deteriorated paint, repair of the substrate, and application of a new protective coating or paint. Lead-Based Paint Owner Certification is required following stabilization activities, except for de minimis level repairs.

8.7 Other Interior Hazards Examples of other hazards might be: a broken bathroom f ixture with a sharp edge in a location where it represents a hazard; a protruding nail in a doorway. 8.8 Elevators Note: At the time the HA is setting up its inspection program, it will determine local licensing practices for elevators. lnspectors should then be aware of these practices in evaluating this item (e.g., check inspection date). If no elevator check “Not Applicable.” 8.9 Interior Air Quality If the inspector has any questions about whether an existing poor air quality condition should be considered dangerous, he or she should ceck wth the local Health and Safety Department ( city, town or county). 8.10 Site and Neighborhood Conditions Examples of conditions that would “seriously and continuously endanger the health or safety of the residents” are:

other buildings on, or near the property, that pose serious hazards ( e.g., di lapidated s hed or gar age w ith pot ential f or structural collapse),evidence of flooding or major drainage problems,evidence of mud slides or large land settlement or collapse, proximity to open sewage,unprotected heights (cliffs, quarries, mines, sandpits), fire hazards,abnormal air pollution or smoke which continues throughout the year and is determined to seriously endanger health, andcontinuous or excessive vibration of vehicular traffic (if the unit is occupied, ask the tenant).

8.11 Lead-Based Paint: Owner Certification If the owner is required to correct any lead- based paint hazards at the property including deteriorated paint or other hazards identi-fied by a visual assessor, a certified lead-based paint risk asses-sor, or certified lead -based paint inspector, the PHA must obtain certification that the work has been done in accordance with all applicable requirements of 24 CFR Part 35. The Lead -Based Paint Owner Certification must be received by the PHA before the execution of the HAP contract or within the time period stated by the PHA in the owner HQS violation notice. Receipt of the completed and signed Lead-Based Paint Owner Certification signifies that all HQS lead-based paint requirements have been met and no re-inspection by the HQS inspector is required.


EXHIBIT 7-B1



8. General Health and Safety For each numbered item, check one box only.


Pas

s

Inco

nclu

siv e

No.

Fail If Fail, what repairs are necessary?

If Inconclusive, give details.

Yes, No

Yes, N

o,

If Pass with comments, give details. 8.1 Access to Unit Can the unit be entered without having to go through another unit? 8.2 Exits Is there an acceptable fire exit from this building that is not blocked? 8.3 Evidence of Infestation Is the unit free from rats or severe infestation by mice or vermin? 8.4 Garbage and Debris Is the unit free from heavy accumulation of garbage or debris inside and outside? 8.5 Refuse Disposal Are there adequate covered facilities for temporary storage and disposal of food wastes, and are they approvable by a local agency? 8.6 Interior Stairs and Common Halls Are interior stairs and common halls free from haz-ards to the occupant because of loose, broken, or missing steps on stairways; absent or insecure rail-ings; inadequate lighting; or other hazards? 8.7 Other Interior Hazards Is the interior of the unit free from any other hazard not specifically identified previously? 8.8 Elevators Where local practice requires, do all elevators have a current inspection certificate? If local practice

Not Applicable does not require this, are they working and safe? 8.9 Interior Air Quality Is the unit free from abnormally high levels of airpollution from vehicular exhaust, sewer gas, fuel gas, dust, or other pollutants? 8.10 Site and Neighborhood Conditions Are the site and immediate neighborhood free from conditions which would seriously and continuously endanger the health or safety of the residents? 8.11 Lead-Based Paint: Owner Certification If the owner of the unit is required to correct any deteriorated paint or lead-based paint hazards at the property, has the Lead-Based Paint Owner’s Certification been completed, and received by the PHA? If the owner was not required to correct

Not Applicable

any deteriorated paint or lead-based paint haz-

ards, check NA. Additional Comments: (Give Item Number)


If Fail or Inconclusive, date (mm/dd/yyyy) of final approval


EXHIBIT 7-B1



ref Handbook 7420.8 form HUD-52580-A (9/00)Page 20 of 21Previous editions are obsolete

3. Other Rooms Used for Living

High quality floors or wall coverings

Working fireplace or stove

Balcony, patio, deck, porch

Special windows or doors

Exceptional size relative to needs of family

Other: (Specify)

5. Overall Characteristics

Storm windows and doors

Other forms of weatherization (e.g., insulation, weather stripping)

Screen doors or windows

Good upkeep of grounds (i.e., site cleanliness, landscaping,

condition of lawn)

Garage or parking facilities

Driveway

Large yard

Good maintenance of building exterior

Other: (Specify)

6. Disabled Accessibility

Unit is accessible to a particular disability. Yes No

Disability _______________________________

D. Questions to ask the Tenant (Optional)1. Does the owner make repairs when asked? Yes No

2. How many people live there? _____________

3. How much money do you pay to the owner/agent for rent? $ ___________

4. Do you pay for anything else? (specify) _________________________________________________________________________________________

5. Who owns the range and refrigerator? (insert O = Owner or T = Tenant) Range ______ Refrigerator _______ Microwave _________

6. Is there anything else you want to tell us? (specify) ________________________________________________________________________________

Special Amenities (Optional)This Section is for optional use of the HA. It is designed to collect additional information about other positive features of the unit that may bepresent. Although the features listed below are not included in the Housing Quality Standards, the tenant and HA may wish to take them intoconsideration in decisions about renting the unit and the reasonableness of the rent.Check/list any positive features found in relation to the unit.

1. Living Room


Working fireplace or stove

Balcony, patio, deck, porch

Special windows or doors


Other: (Specify)

4. Bath

Special feature shower head

Built-in heat lamp

Large mirrors

Glass door on shower/tub

Separate dressing room

Double sink or special lavatory


Other: (Specify)2. Kitchen

Dishwasher

Separate freezer

Garbage disposal

Eating counter/breakfast nook

Pantry or abundant shelving or cabinets

Double oven/self cleaning oven, microwave

Double sink

High quality cabinets

Abundant counter-top space

Modern appliance(s)


Other: (Specify)



ref Handbook 7420.8 form HUD-52580-A (9/00)Page 21 of 21Previous editions are obsolete

Inspection Summary (Optional)Provide a summary description of each item which resulted in a rating of Fail or Pass with Comments.Tenant ID No. Inspector Date of Inspection Address of Inspected Unit

Type of Inspection Initial Special Reinspection

Item Number Reason for "Fail" or "Pass with Comments" Rating


EXHIBIT 7-B1



Previous editions are obsolete Page 1 of 8 form HUD-52580 (3/2001)ref Handbook 7420.8

Inspection Checklist OMB Approval No. 2577-0169(Exp. 04/30/2014)Housing Choice Voucher Program


Office of Public and Indian Housing

Public reporting burden for this collection of information is estimated to average 0.50 hours per response, including the time for reviewing instructions,searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. This agency may notconduct or sponsor, and a person is not required to respond to, a collection of information unless that collection displays a valid OMB control number .

Assurances of confidentiality are not provided under this collection.

This collection of information is authorized under Section 8 of the U.S. Housing Act of l937 (42 U.S.C. 1437f). The information is used to determineif a unit meets the housing quality standards of the section 8 rental assistance program.

Privacy Act Statement. The Department of Housing and Urban Development (HUD) is authorized to collect the information required on this form by

Section 8 of the U.S. Housing Act of 1937 (42 U.S.C. 1437f). Collection of the name and address of both family and the owner is mandatory. The

information is used to determine if a unit meets the housing quality standards of the Section 8 rental assistance program. HUD may disclose this information

to Federal, State and local agencies when relevant to civil, criminal, or regulatory investigations and prosecutions. It will not be otherwise disclosed or

released outside of HUD, except as permitted or required by law. Failure to provide any of the information may result in delay or rejection of family participation.

Name of Family Tenant ID Number Date of Request (mm/dd/yyyy)

Inspector Neighborhood/Census Tract Date of Inspection (mm/dd/yyyy)

Type of Inspection

Initial Special Reinspection

Date of Last Inspection (mm/dd/yyyy) PHA

A. General Information

Inspected Unit Year Constructed (yyyy) Housing Type (check as appropriate)

Single Family Detached

Duplex or Two Family

Row House or Town House

Low Rise: 3, 4 Stories,

Including Garden Apartment

High Rise; 5 or More Stories

Manufactured Home

Congregate

Cooperative

Independent GroupResidence

Single Room Occupancy

Shared Housing

Other

Full Address (including Street, City, County, State, Zip)

Number of Children in Family Under 6

Owner

Name of Owner or Agent Authorized to Lease Unit Inspected Phone Number

Address of Owner or Agent

B. Summary Decision On Unit (To be completed after form has been filled out

Pass

FailInconclusive

Number of Bedrooms for Purposes

of the FMR or Payment Standard

Number of Sleeping Rooms

Inspection Checklist

ItemNo. 1. Living Room

YesPass

NoFail

In-Conc. Comment

Final ApprovalDate (mm/dd/yyyy)

1.1 Living Room Present

1.2 Electricity

1.3 Electrical Hazards

1.4 Security

1.5 Window Condition

1.6 Ceiling Condition

1.7 Wall Condition

1.8 Floor Condition

EXHIBIT 7-B

HOME Investment Partnership ProgramMontana Department of Commerce HOME Administrative Manual

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* Room Codes: 1 = Bedroom or Any Other Room Used for Sleeping (regardless of type of room); 2 = Dining Room or Dining Area;3 = Second Living Room, Family Room, Den, Playroom, TV Room; 4 = Entrance Halls, Corridors, Halls, Staircases; 5 = Additional Bathroom; 6 = Other

Item

No.1. Living Room (Continued) Yes

Pas

No

Fail

In-

Conc. Comment

Final Approval

Date (mm/dd/yyyy)

1.9 Lead-Based Paint

Are all painted surfaces free of deterioratedpaint?If not, do deteriorated surfaces exceed twosquare feet per room and/or is more than10% of a component?

Not Applicable

2. Ki tchen

2.1 Kitchen Area Present

2.2 Electricity


2.4 Security



2.7 Wall Condition

2.8 Floor Condition


Are all painted surfaces free of deteriorated

paint?If not, do deteriorated surfaces exceed twosquare feet per room and/or is more than10% of a component?

Not Applicable

2.10 Stove or Range with Oven

2.11 Refrigerator

2.12 Sink

2.13 Space for Storage, Preparation, and Servingof Food

3. Bathroom

3.1 Bathroom Present

3.2 Electricity


3.4 Security



3.7 Wall Condition

3.8 Floor Condition

Flush Toilet in Enclosed Room in Unit

3.11 Fixed Wash Basin or Lavatory in Unit

3.12 Tub or Shower in Unit

3.13 Ventilation

Lead-Based Paint

Are all painted surfaces free of deterioratedpaint?If not, do deteriorated surfaces exceed twosquare feet per room and/or is more than10% of a component?

Not Applicable

3.9

3.10

HOME Investment Partnership ProgramMontana Department of Commerce HOME Administrative Manual

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EXHIBIT 7-B

Item No. 4. Other Rooms Used For Living and HallsComment


4..1 Room Code* and (Circle One) (Circle One)

Room Location Right/Center/Left Front/Center/Rear ____Floor Level

4.2 Electricity/Illumination


4.4 Security



4.7 Wall Condition

4.8 Floor Condition



paint?

If not, do deteriorated surfaces exceed twosquare feet per room and/or is more than10% of a component?

4.10 Smoke Detectors

4.1 Room Code* and (Circle One) (Circle One)




paint?



4.1 Room Code* andRoom Location



4.4 Security



4.7 Wall Condition

4.8 Floor Condition



paint?


In-Conc.

YesPass

NoFail

Right/Center/Left Front/Center/Rear ____Floor Level(Circle One) (Circle One)

Not Applicable

Not Applicable



4.4 Security



4.7 Wall Condition

4.8 Floor Condition

Not Applicable

Previous editions are obsolete Page 3 of 8 form HUD52580 (3/2001)ref Handbook 7420.8

HOME Administrative Manual1/2014

HOME Investment Partnership ProgramMontana Department of Commerce

EXHIBIT 7-B


ItemNo.

4. Other Rooms Used For Living and Halls YesPass

NoFail

In-Conc. Comment


4.1 (Circle One) (Circle One)

Right/Center/Left Front/Center/Rear____Floor Level



4.4 Security



4.7 Wall Condition

4.8 Floor Condition



paint?


Not Applicable


4.1 Room Code* and (Circle One) (Circle One)




4.4 Security



4.7 Wall Condition

4.8 Floor Condition



paint?


Not Applicable


5. All Secondary Rooms(Rooms not used for living)

5.1 None Go to Part 6

5.2 Security


5.4 Other Potentially HazardousFeatures in these Rooms

Room Code *and Room Location



EXHIBIT 7-B


Item 6. Building ExteriorNo.

6.1 Condition of Foundation

6.2 Condition of Stairs, Rails, and Porches

6.3 Condition of Roof/Gutters

6.4 Condition of Exterior Surfaces

6.5 Condition of Chimney

6.6 Lead Paint: Exterior Surfaces

Are all painted surfaces free of deterioratedpaint?

If not, do deteriorated surfaces exceed 20square feet of total exterior surface area?

Not Applicable

6.7 Manufactured Home: Tie Downs

7. Heating and Plumbing

7.1 Adequacy of Heating Equipment

7.2 Safety of Heating Equipment

7.3 Ventilation/Cooling

7.4 Water Heater

7.5 Approvable Water Supply

7.6 Plumbing

7.7 Sewer Connection

8. General Health and Safety

8.4 Garbage and Debris

8.5 Refuse Disposal

8.6 Interior Stairs and Commom Halls

8.7 Other Interior Hazards

8.8 Elevators

8.9 Interior Air Quality

8.10 Site and Neighborhood Conditions

8.11 Lead-Based Paint: Owner's Certification Not Applicable

If the owner is required to correct any lead-based paint hazards at the property including deteriorated paint or other hazards identified by avisual assessor, a certified lead-based paint risk assessor, or certified lead-based paint inspector, the PHA must obtain certification that thework has been done in accordance with all applicable requirements of 24 CFR Part 35. The Lead -Based Paint Owner Certification must bereceived by the PHA before the execution of the HAP contract or within the time period stated by the PHA in the owner HQS violation notice.Receipt of the completed and signed Lead-Based Paint Owner Certification signifies that all HQS lead-based paint requirements have beenmet and no re-inspection by the HQS inspector is required.

Comment

Yes

Pass

No

Fail

In -

Conc.Final Approval

Date (mm/dd/yyyy)

8.1 Access to Unit

8.2 Fire Exits

8.3 Evidence of Infestation



EXHIBIT 7-B

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C. Special Amenities (Optional)

This Section is for optional use of the HA. It is designed to collect additional information about other positive features of the unit that may be present.Although the features listed below are not included in the Housing Quality Standards, the tenant and HA may wish to take them into consideration indecisions about renting the unit and the reasonableness of the rent.Check/list any positive features found in relation to the unit.

D. Questions to ask the Tenant (Optional)1. Living Room

High quality floors or wall coveringsWorking fireplace or stove Balcony,patio, deck, porch Special windowsor doors


Other: (Specify)

4. Bath

Special feature shower head

Built-in heat lamp

Large mirrors

Glass door on shower/tub

Separate dressing roomDouble sink or special lavatoryExceptional size relative to needs of family

Other: (Specify)

2. KitchenDishwasher

Separate freezerGarbage disposalEating counter/breakfast nookPantry or abundant shelving or cabinetsDouble oven/self cleaning oven, microwaveDouble sink

High quality cabinetsAbundant counter-top space

Modern appliance(s)Exceptional size relative to needs of family

Other: (Specify)

5. Overall Characteristics

Storm windows and doors

Other forms of weatherization (e.g., insulation, weather

stripping) Screen doors or windows

Good upkeep of grounds (i.e., site cleanliness, landscaping,

condition of lawn)

Garage or parking facilitiesDriveway

Large yard

Good maintenance of building exteriorOther: (Specify)

3. Other Rooms Used for Living


Working fireplace or stove Balcony,

patio, deck, porch Special windows

or doors


Other: (Specify)

6. Disabled Accessibility

Unit is accessible to a particular disability.

Disability

NoYes



EXHIBIT 7-B


1. Does the owner make repairs when asked? Yes No 2. How many people live there? _____

3. How much money do you pay to the owner/agent for rent? $ ____________

4. Do you pay for anything else? (specify) __________________________________________________________________

5. Who owns the range and refrigerator? (insert O = Owner or T = Tenant) Range ______ Refrigerator _____ Microwave __

6. Is there anything else you want to tell us? (specify) Yes No



EXHIBIT 7-B


E. Inspection Summary/Comments (Optional)Provide a summary description of each item which resulted in a rating of "Fail" or "Pass with Comments."

Tenant ID Number Inspector Date of Inspection (mm/dd/yyyy) Address of Inspected Unit

Type of Inspection Initial Special Reinspection

Item Number Reason for "Fail" or "Pass with Comments" Rating

Continued on additional page Yes No



EXHIBIT 7-B

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EXHIBIT 7-C

OWNER-OCCUPIED HOUSING REHABILITATION STANDARDS

HOME Investment Partnerships (HOME) Program Montana Department of Commerce

EFFECTIVE: Date

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C March 2010

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C March 2010

TABLE OF CONTENTS

Page Chapter/Section Contents Number Introduction iii Chapter One Administration ................................................................................................... 1-1

1.1 Intent of the OHRS and Rehabilitation .............................................................. 1-1 1.2 Scope of the OHRS ............................................................................................ 1-1 1.3 Authority ............................................................................................................ 1-1 1.4 Enforcement ....................................................................................................... 1-3 1.5 Effective Date .................................................................................................... 1-3 1.6 Revisions ............................................................................................................ 1-3 1.7 Classifications of Measures ............................................................................... 1-3 1.8 Completion of Rehabilitation Measures ............................................................ 1-4 1.9 Qualifications and Workmanship ...................................................................... 1-5 1.10 Material Standards ............................................................................................. 1-5

Chapter Two Building Structure .............................................................................................. 2-1

2.1 Foundations, Basements, Crawlspaces, and Cellars .......................................... 2-1 2.2 Floor Construction and Floor Coverings ........................................................... 2-3 2.3 Wall Construction and Wall Coverings ............................................................. 2-3 2.4 Windows ............................................................................................................ 2-5 2.5 Doors .................................................................................................................. 2-6 2.6 Roof and Ceiling Construction .......................................................................... 2-7 2.7 Roof Coverings .................................................................................................. 2-7 2.8 Building Insulation and Energy Conservation ................................................... 2-8 2.9 Attached Structures and Unhabitable Additions .............................................. 2-10 2.10 Interior and Exterior Stairs .............................................................................. 2-11 2.11 New Construction ............................................................................................ 2-11

Chapter Three Heating, Venting and Cooling Systems ............................................................. 3-1

3.1 Chimneys and Fireplaces (Solid Fuels) ............................................................. 3-1 3.2 Chimneys and Vents (Natural Gas, Propane, Oil) ............................................. 3-1 3.3 Heating Equipment (All Fuels) .......................................................................... 3-2 3.4 Cooling Equipment (Air Conditioning) ............................................................. 3-5 3.5 Heating and Cooling Distribution System ......................................................... 3-6 3.6 Water Heating Equipment (All Fuels) ............................................................... 3-7 3.7 Fuel Gas Piping ................................................................................................ 3-10

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: i March 2010

Chapter Four Electrical Systems .............................................................................................. 4-1 4.1 General Requirements ....................................................................................... 4-1 4.2 Service Equipment - Main Panel/Distribution Center ....................................... 4-5 4.3 Premises Wiring ................................................................................................. 4-8 4.4 Receptacles ........................................................................................................ 4-9 4.5 Lighting Fixtures ............................................................................................. 4-11

Chapter Five Plumbing Systems ............................................................................................. 5-1

5.1 General Requirements ....................................................................................... 5-1 5.2 Supply ................................................................................................................ 5-2 5.3 Fixtures .............................................................................................................. 5-5 5.4 Sanitary Drainage .............................................................................................. 5-6

Chapter Six Environment ...................................................................................................... 6-1

6.1 Premises Condition ............................................................................................ 6-1 6.2 Lighting and Ventilation .................................................................................... 6-3 6.3 Habitable Spaces ................................................................................................ 6-4 6.4 Occupiable Spaces ............................................................................................. 6-5 6.5 Accessibility ...................................................................................................... 6-6 6.6 Fire Safety .......................................................................................................... 6-7 6.7 Occupant Health ................................................................................................ 6-8 6.8 Historic Preservation ....................................................................................... 6-10 6.9 Floodplain Management .................................................................................. 6-11

Appendix A Guidelines for Calculating Heating Load .......................................................... A-1 Appendix B Guidelines for Comparing Heating Equipment Operating Costs ...................... B-1 Appendix C Tables of Acceptable Flue Gas Measurements .................................................. C-1 Appendix D Calculations for Determining Seasonal Heat Loss and Payback ....................... D-1 Appendix E Guidelines for Sizing Water Heating and Calculating Pay-back ....................... E-1 Appendix F Summary of Electrical Requirements ................................................................ F-1 Appendix G Guidelines for Sizing Plumbing Supply Lines .................................................. G-1 Appendix H Summary of Inspection and Testing Requirements ........................................... H-1 Appendix I Abbreviations ...................................................................................................... I-1 Appendix J Definitions .......................................................................................................... J-1 Appendix K Code References and Bibliography ................................................................... K-1

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: ii March 2010

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: iii March 2010

INTRODUCTION

BACKGROUND The HOME Program developed these Owner-Occupied Housing Rehabilitation Standards (OHRS) as the primary document for identifying and correcting substandard conditions in owner-occupied dwellings being rehabilitated by Grantees participating in the Montana Department of Commerce HOME Program. The OHRS, which combines the HOME Program’s rehabilitation policy with the codes and standards adopted by the State of Montana, is intended to clarify the HOME Program’s expectations for rehabilitation while promoting safe, healthy, durable, energy efficient, affordable and habitable housing rehabilitated through HOME assistance.

READER ADVISORY

The HOME Program advises Grantees that the OHRS cannot be viewed as the only resource necessary for rehabilitation work. The OHRS is not detailed enough to describe all of the codes, standards and practices which apply to rehabilitation. In addition, the ability to produce quality rehabilitation work presumes an acceptable level of knowledge and experience. Therefore, the HOME Program expects Grantees to have copies of the various codes and standards referenced in the OHRS and a working knowledge of how to meet them. Furthermore, the HOME Program expects that those responsible for doing rehabilitation work are qualified and competent so that the desired results are achieved.

The HOME Program encourages the reproduction and distribution of the OHRS so that local program administrators, staff, contractors, local code officials and other parties actively involved in rehabilitation have copies. Personnel who have questions about the OHRS should seek clarification from the HOME Program or further research the codes and standards referenced in the OHRS. As mentioned above, the OHRS does not provide sufficient detail to describe the techniques and materials needed to meet the standards or provide a standard for every deficiency a dwelling can have. In some cases, Grantees will need to apply other standards or use their own judgment based on practical experience and a sound interpretation of the OHRS.

CHAPTER ONE

ADMINISTRATION 1.1 INTENT OF THE OHRS AND REHABILITATION 1.1.1 The HOME Program intends for the OHRS is to establish specific standards and

requirements to which each rehabilitated dwelling must comply. However, the HOME Program acknowledges that other documents, including local codes and the codes referenced within the OHRS, should be applied to rehabilitation projects.

1.1.2 The intent of HOME Program-funded rehabilitation is to correct substandard conditions in

housing units receiving HOME assistance so that these units are safer, healthier, more durable, more affordable, more energy efficient and more habitable. This broad objective requires a thorough inspection of the dwelling’s structural and mechanical systems, an assessment of the occupant’s critical needs and, in some cases, an assessment of the dwelling’s visual impact on the neighborhood.

1.2 SCOPE OF THE OHRS 1.2.1 Grantees operating housing rehabilitation programs in jurisdictions that have not adopted

housing or building codes shall comply with the provisions of the OHRS. Grantees operating housing rehabilitation programs in jurisdictions that have adopted housing or building codes shall comply with those provisions of the OHRS that are more rigorous than the adopted codes. The OHRS shall supersede those provisions of the local codes that are less safe, less effective or less comprehensive than the OHRS.

1.2.2 The OHRS is not intended to identify all of the standards to which a dwelling must comply.

Grantees may apply alternative standards or practices provided the alternative standards or practices are recognized as safe, effective and no less rigorous than those identified in the OHRS. Where the OHRS fails to adequately address something that, in the judgment of the Grantee, constitutes a real problem to be corrected, the HOME Program encourages Grantees to apply another recognized code or standard.

1.3 AUTHORITY 1.3.1 Grantees shall ensure that the provisions of the OHRS are applied to each dwelling that is

rehabilitated with financial assistance provided in whole or in part from the HOME Program. Grantees shall not waive any provision of the OHRS without prior written approval from the HOME Program. However, as provided by Chapter 1, Section 1.8.2, Grantees may apply alternative approaches to compliance in order to complete a project within the cost limitations of the program.

Primary responsibility for ensuring compliance with the OHRS rests with the Grantee. The

HOME Program expects each Grantee to apply the OHRS to the best of their ability on each rehabilitation project. Because the OHRS is the HOME Program’s housing rehabilitation standard, the OHRS applies to all rehabilitation projects receiving financial assistance from

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: 1-1 March 2010

the HOME Program and Grantees cannot unilaterally decide which provisions of the OHRS they will not adopt.

However, if a Grantee cannot apply a specific provision of the OHRS to any of its

rehabilitation projects, a blanket waiver of that provision can be requested from the HOME Program. The written request must be submitted to the HOME Program in advance and detail the legal and/or factual basis for the waiver. For example, a waiver may be sought if a community has an ordinance prohibiting something that the OHRS requires.

While only the HOME Program can provide a blanket waiver, Section 1.8.2 provides

Grantees with the authority to determine the scope of the rehabilitation work needed on the specific homes. The HOME Program realizes that Grantees must be able to take into consideration the relative seriousness of the conditions and, the cost of the repairs in order to decide what is necessary and feasible. The HOME Program also realizes that Grantees often must consider the owners input. However, owner input cannot be allowed to prevent compliance with the OHRS. In other words, owners cannot refuse measures that would be required for the dwelling to comply with the OHRS.

1.3.2 Grantees shall ensure that any required rehabilitation measure is installed by an owner,

occupant or other agency or program, is completed in a manner consistent with the OHRS and is completed prior to considering the rehabilitation project finished.

Occasionally, materials are installed by the homeowners themselves or some items on the

rehabilitation work specifications are completed in coordination with another agency or program (e.g. insulation to be installed by another federally-funded program). While the HOME Program encourages coordination with other programs and the homeowners, the HOME Program still expects the entire rehabilitation project to comply with the OHRS when it is completed. This means that the work must be properly done and that it must be finished before the rehabilitation project is considered complete. A promise or referral with the intent to do work is not acceptable. Instead, the HOME Program expects Grantees to inspect the work to ensure that it was done and done right. Otherwise, there is no assurance that the housing unit receiving HOME assistance meets OHRS requirements.

1.3.3 Dwellings that cannot be made to comply with the provisions of the OHRS within the

parameters of the Grantee’s “walk-away” policy shall not be rehabilitated. The HOME Program requires each Grantee to establish a “walk-away” policy. The purpose

of the “walk-away” policy is to prevent investment in a home that is so deteriorated that compliance with the OHRS cannot be achieved within the Grantee’s limits of financial assistance. While it may be difficult to declare a home a “walk-away”, it is sometimes necessary. If the cost of the HOME Program-funded work exceeds the Grantee’s limits, and no supplemental sources of financial assistance are available, rehabilitation should not be attempted.

1.3.4 Grantees operating housing rehabilitation programs in jurisdictions that have housing code

inspection officials shall, to the extent practicable, coordinate the pre-rehabilitation


inspection, the preparation of the work specifications and the post rehabilitation inspection with the local housing code inspection officials.

Coordinating with code officials is a good way to add authority and expertise to the

rehabilitation process. Code officials who are experienced in overseeing electrical, plumbing and HVAC work can detect deficiencies with system design and workmanship.

1.4 ENFORCEMENT

Grantees are contractually obligated to comply with the provisions of the OHRS. Because compliance with the OHRS is stipulated in the grant contract between the MDOC HOME Program and the Grantee, the HOME Program reserves the right to enforce compliance through the terms and conditions of the grant contract. Grantees should know that the HOME Program can require them to return to a project and correct deficiencies or require other actions to enforce compliance. Repeated non-compliance can result in the HOME Program evoking those clauses of the grant contract that allow the HOME Program to restrict the Grantee’s program operation or funding.

1.5 EFFECTIVE DATE The latest edition of the OHRS shall become effective for Grantees with a HOME grant

awarded on or after the effective date noted on the OHRS title page. This means that dwellings being rehabilitated under grants awarded on or after the effective date must comply with the latest edition of the OHRS. The HOME Program believes that linking the effective date and the grant award date is the fairest way for jurisdictions to implement changes contained in revised editions. Dwellings being rehabilitated under grants awarded before the effective date are not retroactively subject to the latest edition of the OHRS. However, the HOME Program encourages Grantees to apply the latest edition of the OHRS to dwellings being rehabilitated under existing grants if the Grantee determines that it is feasible to do so.

1.6 REVISIONS The OHRS may be revised to reflect changes in state or federal program policies and

regulations, changes to the codes referenced in the OHRS or changes in rehabilitation techniques and materials. Revisions due to changes in state or federal program regulations or significant changes to the referenced codes shall become effective immediately upon written notification from the HOME Program.

1.7 CLASSIFICATIONS OF MEASURES 1.7.1 REHABILITATION MEASURES A rehabilitation measure is a measure that corrects or eliminates a substandard condition. A

substandard condition is an existing or incipient defect in the dwelling’s structural system, mechanical systems, site, design or environmental condition as noted in the OHRS, or a violation of a section of code referenced in the OHRS, or a violation of a section of a locally adopted code.


Sub-standard conditions are conditions that fail to meet the standards outlined in the OHRS. These are the conditions that the HOME Program-funded rehabilitation is intended to correct. The most obvious and pressing substandard conditions are imminent health and safety hazards or serious structural deterioration. However, some substandard conditions are less obvious and judgment is needed to determine their adverse impact on the homeowner and/or the occupant and to prioritize the need for their correction. For example, some substandard conditions are incipient problems like an antiquated electrical system or old corroded water supply lines, which will become serious problems sooner or later even though functional and installed according to the code in effect at the time. Other substandard conditions are deficiencies like no insulation or an old inefficient heating system which, though not code violations or safety hazards, are nevertheless problems that make a home less comfortable and affordable. The HOME Program expects rehabilitation to remedy a variety of substandard conditions in addition to health and safety hazards.

1.7.2 AMENITY An amenity is an unnecessary item or measure intended solely for convenience or increasing

property value that does not directly relate to or result from correcting a substandard condition. Unlike a measure that corrects a substandard condition, an amenity is an alteration or a remodeling which does not eliminate a hazard or remedy a problem. In the context of rehabilitation, amenities are unnecessary improvements made for their own sake rather than as a result of doing purposeful rehabilitation work.

However, sometimes measures that ordinarily would be considered an amenity may be acceptable if they are part of doing real rehabilitation work. For example, in the course of replacing substandard plumbing and structural systems in a bathroom, moving the plumbing fixtures to more efficiently use a limited space is acceptable; or, in the course of upgrading an electrical system, adding receptacles to increase convenience is acceptable.

1.7.3 COSMETIC IMPROVEMENT A cosmetic improvement is an unnecessary item or measure intended to solely enhance

visual appearance or perceived value. A cosmetic improvement is also an unnecessary enhancement to an existing adequate condition, or an item that unnecessarily exceeds the standard specification for correcting a substandard condition.

1.8 COMPLETION OF REHABILITATION MEASURES 1.8.1 In order to control costs and meet the intent of the rehabilitation program, Grantees shall

limit rehabilitation measures to those that correct substandard conditions. Amenities and cosmetic improvements, defined in 1.7.2 and 1.7.3 above, shall not be paid for from funds provided by the HOME Program.

The HOME Program expects Grantees to focus rehabilitation on correcting substandard

conditions and to avoid doing work that is classified as amenities and cosmetic improvements. As a general policy, this means that the HOME funds can only be used to



correct substandard conditions. The HOME Program recognizes that clear distinctions between the three classifications of measures cannot always be drawn and that Grantees must sometimes carefully consider and justify some measures. The HOME Program encourages Grantees to establish policies to help ensure that rehabilitation, not remodeling and re-decorating, is the result of the program. The HOME Program also encourages Grantees to educate owners and occupants about the intent of the rehabilitation program.

1.8.2 Grantees shall make every effort to complete the rehabilitation measures, which are

necessary for the dwelling to comply with the OHRS and meet the intent of the rehabilitation program. Where expenditure limits prevent the correction of every substandard condition, alternative approaches may be used to achieve compliance and complete the project. At a minimum, all substandard conditions that threaten the health and safety of the occupant, the durability of the structure, and the safety and adequacy of the electrical, plumbing and HVAC systems shall be corrected.

1.9 QUALIFICATIONS AND WORKMANSHIP 1.9.1 Grantees shall ensure that all persons involved in applying provisions of the OHRS to a

rehabilitation project shall be qualified for their tasks. If an owner or an occupant performs rehabilitation work, the Grantee shall ensure that the person is qualified. If the nature of the work requires personnel to be licensed or otherwise certified to perform the work, the Grantee shall ensure that the personnel meet the requirements.

1.9.2 Grantees shall ensure that the mechanical execution of the rehabilitation work is performed

in a manner consistent with the material manufacturer’s installation instructions, applicable codes and current accepted industry practice.

Employing qualified and experienced people is critical to the success of a rehabilitation

project. The HOME Program expects Grantees to have a procedure to ensure that the people responsible for inspecting the homes, preparing work specifications and actually doing the rehabilitation work are qualified and experienced. This is particularly important for work in the electrical, plumbing and HVAC trades. The HOME Program recommends that technically demanding work be done by people who demonstrate competency in that type of work. In addition, work involving some types of materials, such as those containing lead-based paint and asbestos, generally requires licensed personnel.

1.10 MATERIAL STANDARDS 1.10.1 New material shall meet the requirements identified in the OHRS or meet the specifications

established by the nationally recognized authority for the type of material installed. 1.10.2 Used material shall not be installed unless the material is sound, safe, effective and original

to the dwelling being rehabilitated. Material taken from dwellings other than the one being rehabilitated shall not be installed.

CHAPTER TWO

BUILDING STRUCTURE 2.1 FOUNDATIONS, BASEMENTS, CRAWLSPACES, AND CELLARS

The HOME Program recognizes that many foundations are, to some extent, deteriorated or otherwise sub-standard. The HOME Program does not expect that all problems (or the causes for the problems) can be corrected. However, serious deterioration or other observable structural defects that threaten the structural integrity of the foundation and the durability of the dwelling must be corrected. Examples of defects that must be corrected include; collapsed or severely leaning sections of the foundation wall, missing bricks, stones or blocks, rotted wooden supports, large cracks or holes through the foundation wall, severely eroded mortar joints, etc. Repairs shall be sufficient to eliminate the defect and stabilize the foundation.

2.1.1 CONCRETE OR MASONRY FOUNDATION WALLS Concrete or masonry walls shall be structurally sound and without missing or deteriorated

masonry, lintels or mortar joints that weaken the foundation’s ability to safely support the load.

2.1.2 PIERS AND COLUMNS Piers and columns shall be structurally sound, without missing or broken supports, and

without supports that are deteriorated or otherwise unable to safely support the load. Supports shall be of sufficient number, size, construction and location to safely support the load.

2.1.3 WOOD FOUNDATIONS Wood foundations shall be structurally sound, without missing or broken supports, and

without supports that are decayed, deteriorated or otherwise unable to safely support the load. 2.1.4 FOUNDATION WINDOWS AND ACCESS DOORS Openings through foundation walls (e.g. windows, doors and accesses) that are necessary for

egress or ventilation shall be functional, weather tight and structurally sound. Exposed bare wood or other exposed materials that are subject to weathering shall be primed and painted or covered with a durable weather-resistant material.

Unsealed openings in foundation walls are pathways for air infiltration and vermin.

Unlockable windows and doors are a security problem. Repairs to remedy these defects include replacing missing or broken glazing, sealing gaps between the framing and the foundation, weather-stripping openable windows and doors and installing latches/locks on openable windows and doors. Unnecessary openings may be permanently sealed.


2.1.5 FOUNDATION DRAINAGE AND MOISTURE CONTROL Grading shall be sloped away from the foundation and without depressions or other

conditions that allow water to pool or drain towards the foundation. If possible, earth shall be a minimum of 6 inches away from wood framing members. Where feasible, site drainage adjacent to the foundation shall conform to IRC Section R401.3.

The HOME Program does not expect that moisture problems will be eliminated so that

basements or enclosed crawlspaces are made completely dry. However, where severe moisture problems exist in basements, cellars or crawlspaces, measures shall be used to mitigate the problems. For example; damp-proofing walls, installing a foundation drainage system, sump pump, gutters and downspouts, and diverting run-off from entering openings in the foundation.

2.1.6 ENCLOSED CRAWLSPACE VENTILATION, ACCESS AND MOISTURE CONTROL Enclosed crawlspaces shall be ventilated, accessible, free of excessive rubbish accumulation,

and where appropriate the ground shall be covered with an approved moisture vapor barrier. A moisture vapor barrier can be an important strategy to help reduce the amount of soil produced moisture that may accumulate in crawlspaces. Prior to installing a vapor barrier, rubbish should be removed to help ensure complete coverage and to reduce the amount of moisture trapping items. Crawlspace ventilation is not a recommended moisture control strategy for heated (i.e. conditioned) crawlspaces or crawlspaces with insulated walls. If crawlspace vents are installed, they should be closeable. Where feasible, access shall conform to IRC Section R408.4.

EXCEPTION: Enclosed crawlspaces that do not have sufficient height (i.e. 24 inches or less

of continuous clearance) to allow for the installation of a vapor barrier or access are not required to have a ground vapor barrier or an access. However, where feasible, efforts to increase the clearance to achieve the standard should be made.

2.1.7 BASEMENT AND CELLAR FLOORS Floors in basements or cellars that are regularly used by the occupant shall be without serious

deterioration or conditions that present falling or tripping hazards to the occupant. Dirt floors in cellars or basements which are not regularly used by the occupant, should to the extent practicable, be covered with an approved moisture vapor barrier.

Where a concrete floor already exists, problems such as large cracks or missing and uneven

sections should be repaired so that the floor is not a hazard to the occupant. Where a bare dirt floor exists and the area is regularly used by the occupant for laundry, storage, etc., the HOME Program recommends that a concrete floor should be installed. Though the new floor is not required to cover the entire basement area, it should cover the area used by the occupant. Where feasible, replacement concrete floors shall conform to IRC Section R506.

Covering exposed dirt floors will decrease the level of humidity and the amount of moist air

entering the house. In homes with dirt floors (not covered by concrete), an approved ground vapor barrier is recommended. However, the HOME Program understands that conditions


such as severe water seepage or low clearances may prevent a ground vapor barrier from being installed.

2.2 FLOOR CONSTRUCTION AND FLOOR COVERINGS 2.2.1 FLOOR FRAMING AND SUB-FLOORS Floors (including framing, sheathing and underlayment) shall be structurally sound and

without decay or deterioration weaken the floor’s ability to safely support the load. Floors shall provide a reasonably flat and horizontal surface to the interior of the dwelling.

The HOME Program does not expect floors to be made completely level. However, severely

sloped or uneven floors should be repaired so that hazardous conditions are eliminated. Defects in the floor framing such as; rotted, broken or missing joists, header joists, bridging, girders and girder support columns, etc. shall be corrected. Repairs shall be sufficient to eliminate the defects and restore structural stability to the framing system. Where feasible, repairs shall conform to IRC Section R502.

Defects in the sub-floor such as deteriorated, loose or weak sheeting or underlayment shall be

corrected. Where feasible, new sheathing installations shall conform to IRC Section R503 or the manufacturer’s installation instructions.

2.2.2 FLOOR COVERINGS Floor covering materials shall be appropriate to the use of the space and without defects that

present tripping or other safety hazards to the occupants. New floor coverings should only be installed because the existing covering is a hazard,

obviously ineffective, or because the sub-flooring has been replaced. Floor coverings that are merely dirty or slightly worn (but still effective and safe) should not be replaced. The HOME Program recommends that replacement floor covering materials should be selected for durability, safety and ease of maintenance. In addition, the HOME Program recommends that replacement floor covering materials for kitchens, bathrooms, above grade laundry/utility rooms and other rooms with plumbing fixtures should be impervious to water. The HOME Program expects that new floor covering materials shall be installed according to the manufacturer’s installation instructions.

2.3 WALL CONSTRUCTION AND WALL COVERINGS 2.3.1 FRAME AND MASONRY WALL CONSTRUCTION Wall framing shall be structurally sound and without missing, broken, decayed or

deteriorated framing members that weaken the wall’s ability to safely support the load. Masonry walls shall be structurally sound and without missing sections, deteriorated mortar joints or other defects, which weaken the wall’s ability to safely support the load.

In general, a dwelling that requires extensive structural wall repairs may be unsuitable for

rehabilitation assistance. However, a dwelling may have just a wall section that requires


repair due to water damage for example. Where feasible, repairs to wood framed walls shall conform to IRC Section R602 and repairs to masonry walls shall conform to IRC Sections R606, R607, R608 and R609.

2.3.2 EXTERIOR WALL COVERINGS Exterior wall coverings shall be structurally sound, secure and weather tight without broken,

missing or deteriorated surfaces. Exposed bare wood or other exposed wall covering and trim materials (including the window and door trim, eaves, soffits, rake board, etc.) which are subject to decay, shall be primed and painted or covered with a durable weather- resistant material.

The exterior wall covering is important because it is the barrier that protects the interior

support components and interior surfaces from weather damage. Exterior wall coverings also impact the visual appearance of the home, and on the homes where exterior wall coverings can be re-covered, there may be a tendency to do so. The HOME Program expects Grantees to carefully consider the reasons for installing new wall coverings. Wall covering materials that are in adequate condition (and do not present a lead-based paint hazard) should not be re-covered. When minor deterioration exists, the HOME Program prefers that Grantees repair only the deteriorated areas rather than replacing the entire exterior wall covering. When spot repair is appropriate, the repair materials shall be compatible in composition and appearance to the surrounding wall covering materials. When re-siding is appropriate, wall covering materials should be durable, easy to maintain and architecturally compatible with the structure. Where feasible, replacement wall covering materials shall be installed to conform to IRC Section R703 or the manufacturer’s installation instructions.

Wood exterior wall covering materials and trim must be adequately protected from damage

caused by moisture and ultraviolet (UV) radiation. Where paint or stain is used as the protective coating, it must be applied as directed by the manufacturer. A good paint job depends upon quality paint, thorough surface preparation and proper weather conditions.

Only quality coatings that have a high resin to pigment ratio should be used. The HOME

Program recommends the use of gloss or semi-gloss paints and, if staining is required, non-solid body stains because flat paints and solid body stains have less moisture and UV resistance than high resin content paints and stains.

When re-painting existing surfaces, care must be taken to thoroughly prepare the surface to

ensure good adhesion to the substrate. Paint that has peeled, checked, blistered, alligatored or otherwise failed must be removed and the conditions which caused the failure should be corrected. Dirt, chalk and mildew must also be removed. The substrate must be dry and stable, and bare wood should be primed prior to applying the top coat(s). New wood should be primed on all six sides prior to installation and top coated as soon as possible.

Lastly, weather and temperature conditions must be appropriate. Painting when rain is likely

or when the air temperature falls below 50 degrees F during the curing process must be avoided. During cold or wet weather, pre-primed materials should be used and finish coating should be postponed until warmer and dryer conditions return.


2.3.3 INTERIOR WALL AND CEILING COVERINGS Interior wall and ceiling coverings shall form a continuous durable surface without large

holes or cracks penetrating through the covering, without severe deterioration and without missing sections of window, door and floor casing or trim.

Raw plaster, wallboard and joint compound shall be primed or sealed to protect the surface.

Wall and ceiling surfaces that have been replaced in high moisture areas, such as bathrooms containing bathing/shower spaces, shall be smooth and non-absorbent.

The HOME Program does not expect interior wall and ceiling surfaces to be free from all

cracks, holes or other imperfections. Plaster or wallboard surfaces in older homes often have defects and it is not reasonable for a rehabilitation program to make these surfaces appear like new. Surface cracks, uneven surfaces and other minor defects on otherwise solid walls and ceilings do not need to be repaired. However, large cracks or holes (i.e. penetrating through the wall covering material or exposing wall construction materials or cavities) must be repaired. In addition, sagging or loose wall and ceiling covering materials must be repaired or replaced. Repair materials shall be compatible in composition and finished appearance to the original surrounding materials. Where feasible, new interior wall and ceiling covering materials shall be installed to conform to IRC Section R702 or the manufacturer’s installation instructions.

2.4 WINDOWS 2.4.1 Each habitable room that contains a window shall have at least one window that is openable,

in operating condition, and capable of being held in open position by the window hardware. Openable windows shall have functioning security hardware and insect screens.

All windows shall be structurally sound, secure and weather tight without deteriorated

components (e.g. sashes, jambs; sills, trim, etc.) and without missing, broken or severely cracked glazing. Exposed bare wood and other exposed materials that are subject to decay shall be primed and painted or covered with a durable weather-resistant material.

The condition of the windows can have a significant effect on the appearance of the home,

and owners may routinely expect windows to be replaced. Consequently, the desire to improve the home’s appearance and satisfy the owner’s expectations may create a tendency to replace older windows. The HOME Program expects Grantees to carefully consider the reasons for replacing windows. In general, windows that are sound and functional should not be replaced. If minor repairs are needed, repairing or replacing only the deteriorated or defective parts (including installing exterior mounted triple-track storms to protect sound and functional prime windows and to provide insect screens), is preferred over replacing the entire window unit unless replacing the entire window unit is justified as more cost-effective. When determining cost-effectiveness, the primary criterion should be the cost of the replacement window versus the cost to repair the window and how long the repair will last. Under most circumstances, energy efficiency alone is not a cost-effective criterion because the cost of the new window greatly exceeds the value of the savings. However, when windows are replaced, the HOME Program expects that the new windows to have a lower U-value and lower air infiltration rate than the old windows.


Accordingly, storm windows shall not be installed over replacement window units. The

HOME Program expects that replacement window units shall be installed according to the manufacturer’s installation instructions.

Bedroom or sleeping room windows that are intended to serve as emergency egress shall

meet the egress requirements of OHRS Section 6.6.1. 2.5 DOORS 2.5.1 EXTERIOR DOORS Passageways between the interior conditioned spaces of the dwelling and the outside shall

have an exterior-rated door. All exterior doors shall be structurally sound, easily operable, weather tight and fitted with functioning hardware that tightly latches and securely locks the door. Locks shall not require a key for exiting from the interior. Exposed bare wood and other exposed materials that are subject to decay shall be primed and painted.

As with windows, exterior doors can have a significant affect on the appearance of the home

and on the homeowner’s expectation of the rehabilitation program. The desire to improve the home’s appearance and meet the owner’s expectations may create a tendency to replace exterior doors. The HOME Program expects Grantees to carefully consider the reasons for replacing doors.

In general, doors that are sound and functional should not be replaced. If minor repairs are

needed, repairing or replacing only the defective parts is preferred over replacing the entire door, unless replacing the entire door is justified as more cost-effective. The HOME Program expects that replacement doors shall be installed according to the manufacturer’s installation instructions.

2.5.2 INTERIOR DOORS Bathrooms, bedrooms, utility rooms/enclosures which contain fuel-burning non-direct vent

space heating or water heating equipment, and passageways leading to unconditioned spaces within the dwelling (e.g. attics, basements, enclosed porches, etc.) shall have a door. All interior doors shall be structurally sound, easily operable and fitted with functioning hardware that tightly latches the door. Doors to unconditioned spaces shall be weather-stripped. Newly installed doors shall be finished in a manner compatible with the existing doors.

A door to a bedroom and a bathroom is necessary for privacy. A door to utility

room/enclosure containing non-direct vent combustion equipment is necessary to separate the equipment from the living space while providing an access for maintenance and repairs. Otherwise, the area around the .equipment may become used for storage thus creating a potential fire hazard or potentially restricting the supply of combustion air. Weather-stripping doors that lead to unconditioned spaces will help reduce the air movement between heated and unheated areas.


2.6 ROOF AND CEILING CONSTRUCTION 2.6.1 ROOF AND CEILING FRAMING

The roof/ceiling structural system shall safely support the load. Framing members and sheathing shall be structurally sound, properly fastened together and secured to the walls, and form a sound base for attaching the roof covering material. The roof/ceiling structural system shall be configured so that drainage slopes towards a perimeter edge of the dwelling into a controlled water collection and discharge system.

The structural integrity of the roof/ceiling framing system is critical to the long-term

durability and habitability of the structure. Therefore, it must be inspected to determine if repairs are necessary. Problems such as deteriorated, missing or loose framing or sheathing shall be corrected. Roof structures incapable of safely supporting the load or providing adequately sloped drainage shall be repaired or replaced. Where feasible, repairs and replacements shall conform to IRC Sections R802, R803 and R804.

2.6.2 ATTIC VENTILATION Ventilation in attic spaces (including enclosed attics, enclosed attic rafter cavities and

insulated attics), where feasible and where determined necessary by the Grantee, shall conform to IRC Section R806.

While providing air circulation is a strategy to help protect the roof/ceiling framing members

(and the roof covering materials) from heat and moisture damage, proper air sealing to prevent warm moist air from entering the attic space in the first place should be the primary strategy (see OHRS Section 2.8.1). To ensure the free flow of air from eave or cornice vents, baffles or other blocking shall be installed to prevent insulation from covering the vent openings.

2.6.3 ATTIC ACCESS Attic spaces that exceed 30 square feet and have a vertical height of 30 or more inches shall

be provided with an access measuring at least 22 inches by 30 inches in compliance with IRC Section R807.

Entrance to attic spaces is necessary for completing various rehabilitation measures and for

inspecting those measures. Accesses should be constructed so that entry is from the interior of the dwelling, however, access through a removable gable end vent or other openable means is an acceptable alternative.

2.7 ROOF COVERINGS 2.7.1 Roof coverings shall provide a waterproof barrier protecting the roof/ceiling structural

system and the interior building surfaces from moisture damage. Roof coverings, including valley flashing and flashing against walls, chimneys, stacks and pipes shall be watertight, durable and free from excessive wear and obvious defeats in materials and workmanship.


The ability of the roof covering materials to shed water is critical to the long-term durability and habitability of the dwelling. Therefore, the roofing materials must be thoroughly inspected to determine if repair or replacement is needed. Problems such as: evidence of severe deterioration (e.g. curled/cracked asphalt shingles, rusted metal or moss growth), missing, loose or ineffective or inappropriate materials must be corrected.

In lieu of observable criteria for determining the need to replace a roof, the HOME Program

recommends that Grantees establish other criteria such as; the estimated useful life remaining for the materials or a comparison of the cost to repair the roof versus the cost to replace it. The HOME Program expects roof covering repairs and replacements to conform to the manufacturer’s installation instructions and, where feasible, to IRC Chapter 9. In addition, when the roof covering materials are replaced, the HOME Program recommends the following materials and practices:

a. Metal flashing material should be not less that 28 gauge galvanized corrosion

resistant sheet metal. Flashing against side-walls should be stepped and flashing against chimneys should be stepped and kerfed into sealed mortar joints.

b. Metal drip edge should be installed along all eaves and rakes.

c. Where necessary, multiple layer underlayment or other specialty materials should be used to protect against ice and water damage.

2.8 BUILDING INSULATION AND ENERGY CONSERVATION Thermal boundary of the dwelling shall be insulated where practical and cost-effective, and

the pathways that exchange conditioned and unconditioned air shall be sealed. Insulating the areas that buffer the inside from the outside and sealing up the pathways that

allow warm air to escape or cold air to enter are the most effective ways for the occupant to have a comfortable environment at a reasonable cost. In addition to increasing occupant comfort and decreasing fuel consumption, building shell energy efficiency measures (including heating system efficiency measures) will improve the building’s durability by preventing warm moist air from entering unconditioned areas where it will condense onto structural members. For these reasons, the HOME Program has established standards for controlling air movement and for insulating thermal boundary of the dwelling.

However, while adding insulation to uninsulated areas is almost always cost-effective, there

are circumstances when the cost-effectiveness of adding insulation is not clear. Examples of such circumstances include; when some insulation already exists, when the cost to install the insulation is extremely high, when the area to be insulated is extremely small or when the cost of heating the space is extremely low. In cases where installing insulation is not clearly cost-effective, the factors that affect the balance between cost and savings should be examined. Methodology to calculate cost-effectiveness based on simple payback is provided in OHRS Appendix D. For determining a reasonable payback period, the HOME Program recommends a period of three to five years. In other words, a measure that produces a savings equal to its cost within a three to five year period is appropriate. Measures that have


a “payback” over a period longer than 5 years should be critically examined before they are selected.

2.8.1 AIR MOVEMENT Holes, gaps, chase ways and other paths connecting the conditioned spaces of the dwelling

and its unconditioned spades or to the outside shall be sealed in order to reduce the uncontrolled movement of air into and out of the conditioned spaces. Dryer exhaust fans and range hoods shall conform to IMC Sections 504 and 505. Bathroom mechanical ventilation systems shall conform to IRC Section R303.3.

Controlling air movement and reducing convective heat loss is an important factor in

increasing the occupant’s comfort level, reducing the dwelling’s energy consumption and improving the dwelling’s durability. Therefore, the dwelling must be thoroughly inspected to locate the air leakage sites. The HOME Program recommends that the inspection include blower door tests and pressure measurement tests to locate the leakage sites, quantify the problem and determine the extent of the air-sealing needed to reduce the leakage to an acceptable level relative to the home’s volume and number of occupants. Where feasible, post-rehabilitation air movement ventilation rates should not be less than the ASHRAE standard of 15 CFM per person or .035 air changes per hour.

AIR LEAKAGE: Priority shall be given to sealing air leakage sites that present the greatest

potential for heat loss and moisture migration due to natural and mechanically driven air pressure differentials. Priority air leakage sealing sites are often those that are located low and high on the building’s elevation or that connect areas within the building that are low and high on the building’s elevation, and thus significantly contribute to “stack effect” air movement. Materials used for air sealing must be durable and air impermeable, such as; quality caulks, foam sealants, mastics and plastic or spun polymer sheeting. In lieu of blower door directed air-sealing, the HOME Program recommends the following routine air leakage measures:

a. Sealing holes, gaps and cracks through the exterior building shell that connect to the

dwelling’s interior; for example, sealing gaps in and around utility lines, coal chutes, foundation materials, sill plates, windows and doors. For specific standards on windows and doors, see OHRS Sections 2.4 and 2.5.

b. Sealing holes and open pathways inside of the building that connect conditioned areas

to unconditioned areas or to the outside such as; plumbing, HVAC, electrical and chimney chase ways, undampered fireplaces, open chimney flues or clean-outs, open partition walls, open top and sill plates, joist cavities under kneewalls, etc. Air leakage sites that are located in areas that contain insulation or that shall contain insulation should be sealed.

c. Sealing holes, gaps and cracks in and around interior wall and ceiling surfaces

particularly between conditioned and unconditioned areas, in high moisture areas and in ceilings above drop ceiling panels. For example, sealing gaps around attic accesses and ceiling exhaust fans, and covering holes in the plaster or drywall above drop


ceilings. If electrical, HVAC or plumbing work creates new holes or chase ways, air leakage sealing is required after the mechanical systems work is completed.

MECHANICAL VENTILATION DEVICES: Providing a means for controlled ventilation

can be an important strategy for reducing interior humidity and improving indoor air quality. For specific room ventilation requirements, see OHRS Section 6.2.2. If an openable window exists, mechanical ventilation is not required for kitchens or bathrooms. However, ducting clothes drying appliances is required. Existing kitchen, bath and dryer exhaust fans that are undampered shall be fitted with a damper (or replaced with a dampered exhaust fan) so that the exhaust opening is closed when the fan is not operating. Kitchen range and clothes dryer exhaust fans shall be connected to smooth-walled non- combustible duct running the shortest feasible route through the structure directly to the outside air. Ducts made of combustible material, ribbed ducts, sagging ducts or ducts that terminate in the vicinity of a roof or crawlspace vent are not acceptable. Exhaust duct sections shall be securely fastened together (without screws) and securely supported to prevent disconnection, and sealed to prevent air leakage. Bathroom exhaust fans shall be connected to an approved duct running the shortest feasible route through the structure directly to the outside. Sagging ducts or ducts that terminate in, an attic or in the vicinity of a roof vent are not acceptable. Exhaust duct sections shall be securely fastened together and securely supported to prevent disconnection, and sealed to prevent air leakage.

2.8.2 INSULATION Ceilings, foundations, exterior walls, and floors shall be insulated as close as feasible to the

standards set forth in IECC 2006. The HOME Program expects insulation to be installed according to the manufacturer’s

installation instructions and to provide complete and uniform coverage. Voids or gaps in the insulation (particularly in batt insulation) or areas with shallow amounts of insulation are not acceptable. Gaps in the coverage of existing insulation shall be filled so that the area achieves a uniform thermal value.

The HOME Program understands that not all spaces can be insulated or have insulation

added to them. For example, some spaces may not be of adequate volume for insulation, or access necessary to add the insulation may be inadequate. In some circumstances, its cost-effectiveness is doubtful. To determine cost-effectiveness, the HOME Program recommends using the methodology outlined in OHRS Appendix D.

2.9 ATTACHED STRUCTURES AND UNHABITABLE ADDITIONS Foundations, walls, floors and roofs of attached porches, balconies and unhabitable additions

shall meet the requirements of the appropriate section of the OHRS. Porches, balconies or raised floors located more than 36 inches above the floor or grade shall

have guardrails. Where feasible, new guardrail details and size shall conform to IRC Section R312.


EXCEPTION #1: To control costs, Grantees need not correct all of the substandard conditions providing no condition presenting a threat to the safety of the occupants or the durability of the dwelling remains uncorrected.

EXCEPTION #2: To control costs, Grantees may demolish a severely deteriorated attached

structure rather than rehabilitate it provided the structure is not critical to the occupant’s use of the dwelling and that demolition does not violate the historical or architectural integrity of the dwelling. Prior to demolition, Grantees shall obtain written permission from the owner and, if necessary, from the appropriate state/local authority having jurisdiction over historical or architectural matters. A copy of each written permission shall be maintained in the case file.

The HOME Program expects attached structures such as; porches, balconies, utility rooms,

garages, etc. to be safe and reasonably sound. For example, existing electrical service to such areas shall meet the requirements of the OHRS and the structural components of the addition must be free of obvious hazards and deteriorating conditions.

However, as noted in Exception #1, the HOME Program recognizes that unhabitable areas do

not need to rehabilitated to the same degree as habitable areas. The HOME Program also recognizes in Exception #2, that, in some cases, it may be more cost- effective to remove an unused and severely deteriorated addition than to rehabilitate it. If an addition is removed, the areas of the dwelling or site to which the demolished structure was attached or located shall be repaired to the extent required by the appropriate section of the OHRS. For example, exterior wall framing exposed by removing a dilapidated shed shall be covered with siding compatible with the surrounding siding material.

2.10 INTERIOR AND EXTERIOR STAIRS All stairs shall be safe and structurally sound. Handrails shall be provided on at least one side

of each continuous run of treads or flight with four or more risers. Stairways with open portions more than 30 inches above the floor or grade below shall conform to the requirements of IRC Section R312. These requirements apply to all existing stairs. Where feasible, new stairs shall conform to IRC Sections 311 and 312 for headroom, slope, width, maximum riser height, minimum tread width, etc.

2.11 NEW CONSTRUCTION New room additions or new dwellings constructed on the site shall conform to the

requirements of all applicable chapters and sections of the IRC. Occasionally the need arises to construct a new room addition to relieve overcrowding or to

provide a necessary facility such as an indoor bathroom or furnace utility room. In addition, though rarely, it may be necessary to construct an entirely new dwelling on the site to replace one that cannot be rehabilitated. Because such structures are entirely new without the limitation caused by working within an existing structure, the HOME Program expects that they will be planned and built to conform to all applicable CABO requirements.



2.12 FACTORY-BUILT HOUSING Factory-built housing units that are brought from a factory and assembled or installed on a foundation on the site must meet the requirements of the agency certifying the standards for modular or manufactured homes. The HOME Program expects that factory-built housing units will bear a certification insignia of the Montana Department of Labor and Industry (for modular units) or a certification meeting the Manufactured Home Construction Standards of June 15, 1976 as established by HUD (for manufactured housing units). New factory-built housing will be considered by the HOME Program to have met the structural, HVAC, electrical and plumbing requirements of the OHRS. Factory-built housing receiving assistance through the MDOC HOME Program must meet the requirements of IRC Appendix E for installation, including location, utility hook-ups, foundation, and anchorage. A copy of IRC Appendix E is available from the HOME Program upon request.

CHAPTER THREE

HEATING, VENTING AND COOLING SYSTEMS 3.1 CHIMNEYS AND FIREPLACES (SOLID FUELS) All active solid fuel-burning (i.e. wood or coal burning) equipment shall be connected to a

safe chimney. Masonry and factory-built chimneys connected to active fireplaces, pellet stoves, or fireplace stoves shall be structurally sound and form an unobstructed and continuous flue to safely conduct flame, heat, combustion gases and smoke to the outside. Chimney flues venting solid fuel burning equipment shall not also vent gas or liquid fuel burning equipment. Factory-built chimneys shall conform to the conditions of their listing and the manufacturer’s installation instructions. Chimneys connected to active solid fuel fireplaces, pellet stoves, or fireplace stoves shall be free of creosote accumulation.

Active masonry and factory-built fireplaces, pellet stoves, and fireplace stoves shall be

structurally sound, capable of safely combusting the appropriate fuel and connected to a safe chimney. Factory-built fireplaces, pellet stoves, and fireplace stoves shall conform to the conditions of their listing and manufacturer’s installation instructions.

The safe operation of an active (i.e. used by the occupant) solid fuel fireplace and chimney is

an important health and safety concern. Therefore, a careful inspection of the solid fuel burning equipment and the chimney to which it is connected is needed to determine if repair or replacement is necessary.

Active masonry or factory-built chimneys should be inspected for flue blockages, creosote

build-up, inappropriate or unsafe materials, loose, missing or cracked sections, improper flue linings and improper installation and listing. Problems noted as a result of the inspection must be corrected. Where feasible, repairs and replacements should conform to IRC Sections R1003 and R1005 or the manufacturer’s installation instructions.

Active masonry fireplaces, factory-built fireplaces, pellet stoves, or fireplace stoves should

be inspected for creosote build-up, inappropriate or unsafe materials, loose, missing or cracked sections and improper installation and listing. Problems noted as a result of the inspection must be corrected. Where feasible, repairs and replacements shall conform to IRC Sections R1001 masonry fireplaces), R1004 (factory built fireplaces), IMC 904 (pellet stoves), 905 (fireplace stoves) or the manufacturer’s installation instructions.

The HOME Program recommends that active solid fuel-burning fireplaces and fireplace

stoves that cannot be made safe or that cannot be connected to a safe chimney should be removed and the chimney vent connection should be permanently sealed. If no other primary heat source is present, an alternative heating system and fuel source shall be installed.

3.2 CHIMNEYS AND VENTS (NATURAL GAS, PROPANE, OIL) All gas or oil burning heating equipment shall be connected to a safe chimney or vent.

Masonry chimneys, factory-built chimneys and all vent system components, including; draft hoods, vent dampers, draft regulators, vent connectors and vents shall be structurally sound


and properly connected to form an unobstructed continuous flue to safely conduct combustion gases and heat to the outside.

The safe operation of chimneys and vents is an important health and safety concern.

Therefore, a careful inspection of the vent and/or chimney exhausting the flue gases is needed to determine if repair or replacement is necessary. The HOME Program recommends that chimneys and vents be inspected for missing, cracked, constricted, disconnected or loose components. In addition, vent system components, including mechanical and automatic vent dampering devices should be inspected to ensure that they are properly installed and functioning as designed. Problems noted as a result of the inspection must be corrected. Where feasible, repairs and replacements shall conform to IMC Sections 801, 802, 803, and 804 or the manufacturer’s installation instructions.

In addition, the HOME Program recommends that masonry chimneys and factory-built

chimneys should be inspected to ensure that they conform to the conditions of their listing, are properly installed and properly sized for the number or type of heating appliance(s) connected to them. Where feasible, chimney repairs, replacements and sizing shall conform to IMC Section 805 or the manufacturer’s installation instructions.

3.3 HEATING EQUIPMENT (ALL FUELS) Heating equipment shall meet the following conditions:

a. The heating system shall be capable of meeting the requirements of IRC Section R303.8. The equipment shall be inspected to ensure safe and efficient operation.

b. The equipment shall be designed and listed for the type of fuel to which it is

connected. c. The equipment shall be designed and listed for the location in which it is installed.

d. The equipment shall be accessible for inspection, service, repair and replacement without removal of permanent construction.

e. The equipment shall be properly clear from combustible materials. Where feasible,

clearances shall conform to IMC Section 306 or the manufacturer’s installation instructions.

f. The HOME Program recommends that replacement heating equipment be sized in

accordance with the ASHRAE Handbook of Fundamentals or other recognized methodology. At a minimum, heating load calculations must be consistent with the steps outlined in OHRS Appendix A. Data for heat load/loss calculations shall be based on post-rehabilitation conditions.

g. Replacement heating equipment shall be installed to conform to IMC Chapters 7, 8,

9, 10, 12, and 13 or NEC Articles 422 and 424, as appropriate to the fuel source, or the manufacturer’s installation instructions.


h. Equipment located in enclosed rooms, attics and crawlspaces shall have a permanent electrical receptacle and lighting fixture provided near the equipment that shall be controlled by a switch located at the passageway entrance.

i. Fuel-burning equipment shall be properly connected to a safe chimney or vent.

Unvented fuel-burning primary heating equipment (e.g. unvented gas or oil space heater) shall not be permitted.

EXCEPTION: For the purpose of this section, decorative heating equipment such as unvented gas logs shall not be considered as primary heating equipment.

j. Fuel-burning equipment shall be provided with sufficient combustion air drawn from

proper locations in conformance to IMC Chapter 7 and the manufacturer’s installation instructions.

k. Fuel-burning equipment shall combust fuel safely and operate as close to the

designed Annual Fuel Utilization Efficiency (AFUE) as possible. Flue gases (oxygen and carbon monoxide), stack temperature and smoke shall be within acceptable limits.

The safe and efficient operation of heating equipment is no only an important health and

safety concern but it is also an important factor bearing on affordability because fuel consumption can significantly contribute to the operating costs of the home. Therefore, the existing heating equipment that is not to be replaced shall be carefully inspected to determine operating safety and efficiency. Problems noted as a result of the inspection must be corrected by repairing or replacing the equipment. The HOME Program expects that-gas fuel-burning heating equipment shall be inspected according to the recommended procedures contained in IMC Section 107. The HOME Program also expects that, regardless of fuel type, the heating equipment inspection shall answer the following questions:

a. Are fuel supply lines deteriorated, leaking or improperly installed and is electrical

wiring loose, frayed, or improperly installed? If so, the fuel supply lines and electrical wiring shall be repaired or replaced. Repairs and replacement of fuel supply lines shall conform to UPC Chapter 12 and IMC Chapter 13. Repairs and replacement of electrical circuitry shall conform to the appropriate sections of the NEC.

b. Do gas or oil supply line pressures and electrical line voltages conform to the

equipment manufacturer’s installation instructions? If not, proper pressures and voltages shall be restored.

c. Do clearances from combustible materials conform to IMC Section 306 or the

manufacturer’s installation instructions? If not, proper clearances shall be created.

d. Are fuel and temperature control devices (e.g. fan controls, high limit controls, thermostat, heat anticipator, boiler safety controls, etc.) missing, non-functional or improperly adjusted. If so, the devices shall be repaired or replaced. Repairs and replacements shall conform to IMC Section 309 and the manufacturer’s installation instructions.


e. Do the results of the combustion efficiency test fall outside of the standard

manufacturer design ranges (See OHRS Appendix C, Table C-1)? If so, and if the heating equipment is not to be replaced, repairs and adjustments shall be made to improve the combustion efficiency.

In addition to “tuning-up” the equipment, installing devices to improve operational efficiency; such as intermittent ignition devices and flame retention burners (oil) may be cost-effective improvements to replacing an otherwise safe heating appliance. If devices to improve efficiency are installed, they shall be installed to conform to the manufacturer’s installation instructions. If other efficiency modifications, such as automatic vent dampers and devices to reduce vent connector size are installed, they shall be installed to conform to IMC Section 803.6 and the manufacturer’s installation instructions.

Replacing existing heating equipment that is unsafe, inefficient or likely to fail in the near

future is a frequent occurrence in rehabilitation. The HOME Program recommends replacing heating equipment when any of the following conditions are present:

a. The equipment is unsafe and/or non-repairable. For example, the heat exchanger is

cracked or the problems are too numerous to justify the repair expense.

b. The equipment is located in an area inappropriate to its listing and cannot be moved to an appropriate area.

c. The equipment combusts fuel very inefficiently. For example, the HOME Program

recommends replacing gas-fired heating equipment that has a verified Steady-State Efficiency (SSE) of 60% or less.

d. The primary heating equipment is an unvented fuel-burning space heater.

Replacement space heaters shall be vented. Installing the right size and model of replacement heating equipment is very important for

ensuring comfort and affordability. In order to properly size the equipment, the heating load of the home must be calculated. The HOME Program requires that heating equipment be sized and recommends the use of accepted methods such as the ASHRAE Handbook of Fundamentals or other recognized methodology. At a minimum, heating load calculations must be consistent with the steps outlined in OHRS Appendix A.

The equipment should not only be sized properly to meet the heat load requirements of the

HOME Program but it should also be an energy efficient model. The HOME Program recommends a cost-benefit approach to selecting replacement heating equipment. In other words, the “cost” of the equipment should consider not only its installation cost but also its long-term operating cost. Often the incremental increase in the cost of high AFUE-rated equipment is off-set within a few years by the fuel cost savings achieved over low AFUE-rated equipment. Methodology for comparing the cost of various equipment models is outlined in OHRS Appendix B. However, for rehabilitation, other costs (or savings) associated with equipment replacement should be considered. For example, if both the space


and water heating equipment vent into one chimney, the net savings gained by installing a high AFUE-rated direct vent model may be off-set by the cost of re-venting the water heater left connected to a flue that has now become too large i.e., an “orphaned” water heater).

If replacing the heating equipment involves changing the heating distribution system (e.g.

replacing space heaters with a ducted warm-air system) or changing fuel sources (e.g. switching from oil to electricity), the HOME Program recommends a cost benefit approach to select the most cost-effective system and fuel (see OHRS Appendix B).

A sufficient supply of combustion and draft dilution, air is critical to the efficient operation

of non-direct vent fuel-burning heating equipment and to the health and safety of the occupants. If the building is tightly constructed or if the heating equipment is located in a confined room or space, additional combustion air and draft dilution air must be provided. A confined room or space is defined as having less than 50 cubic feet of space per 1,000 BTU/hr input for each fuel-burning furnace and water heater in the space. Additional air may be provided from inside the building, outside the building or in combination, as described in IMC Sections 702, 703, 704, and 705.

3.4 COOLING EQUIPMENT (AIR CONDITIONING) Cooling equipment newly installed by the rehabilitation program shall operate safely and

efficiently, and shall be properly sized according to the ASHRAE Handbook of Fundamentals or other recognized methodology.

The installation of new cooling equipment is not required and should not be installed unless

specifically required for the health of the occupant(s) by a licensed physician. Documentation, signed by the physician, must be maintained in the case file. Existing cooling equipment may be repaired at the Grantee’s option. However, if cooling equipment exists and a licensed physician requires it to be operational for the health of the occupant, then it must be inspected and repaired or replaced as needed. The HOME Program recommends that the inspection answer following questions:

a. Are there any refrigerant leaks? If so, the leaks shall be repaired. The HOME

Program expects the repairs and re-fills to be performed by an EPA-certified technician.

b. Is the electrical wiring frayed, loose, or improperly installed? Is the equipment

connected to an electrical circuit shared with other appliances or with improper overcurrent protection? If so, the problems shall be corrected. Repairs to wiring, circuitry and overcurrent protection shall conform to the appropriate section of the NEC.

c. Do clearances conform to the manufacturer’s installation instructions? If not, proper

clearances shall be created.

d. Are cooling fans dirty or clogged? If so, the fins shall be cleaned.


e. Are condensate drain lines obstructed, leaking or improperly installed? If so, the lines shall be repaired or replaced.

f. Are control devices (e.g. blower motors, fans, filters, thermostats, etc.) missing, non-

functional or improperly adjusted? If so, the devices shall be repaired or replaced. Repairs shall conform to the manufacturer’s installation instructions.

If cooling equipment is installed, it shall be installed to conform to IMC Section 908 and the manufacturer’s installation instructions. The HOME Program recommends considering long-term operating costs when selecting the model of cooling equipment to be installed. This should include comparing the long-term fuel cost savings of high Seasonal Energy Efficiency Ratio (SEER) or high Energy Efficiency Ratio (EER) rated equipment over low SEER or EER rated equipment.

3.5 HEATING AND COOLING DISTRIBUTION SYSTEM The distribution system shall be appropriate for the type of heating equipment to which it is

connected, shall provide an adequate supply of heat to each habitable room and provide an adequate return to the heating equipment. Ducted (gravity or forced air) and piped (hydronic) distribution systems shall be adequately sized, located, sealed, secured, protected, and insulated to provide for the efficient unobstructed flow of supply and return heat.

Safe and efficient heating/cooling equipment that is connected to a defective distribution

system cannot create an environment that is both comfortable and affordable to the occupant. Therefore, the distribution system must be inspected to determine if it is operating effectively. The HOME Program recommends that the inspection answer the following questions:

a. Are any flow controllers (e.g. blower motors, fans, belts and pulleys, pumps, valves,

etc.) missing, non-functional or improperly adjusted? If so, the defective components must be repaired or replaced. The HOME Program expects the repairs and replacements to conform to the manufacturer’s installation instructions.

b. Are any distribution system components (including filters) missing, disconnected,

blocked, constricted, loose, leaking or ineffective? If so, the components must be repaired or replaced. The HOME Program expects the repairs and replacements to conform to the manufacturer’s installation instructions and, where feasible, to conform to IMC Chapters 6 and 12.

The HOME Program also expects that ducted warm-air supply and return distribution system components shall be mechanically fastened (e.g. screwed) together to prevent disconnection, securely supported to prevent damage and effectively sealed at all joints and seams to maintain pressure and prevent air leakage. Sealing materials shall be specialty tapes and mastics designed to adhere to dusty warm surfaces. Gray plastic or cloth-backed tape, commonly called “duct tape”, shall not be used.


c. Are there any inappropriate or unsafe distribution system materials? If so, they shall be replaced with appropriate materials. Replacement distribution system materials shall conform to IMC Sections 603 and 1202.

d. Are any parts of the distribution system (supply and return) located in unsafe or

inappropriate locations? If so, they shall be moved to appropriate and safe locations. Return air shall not be drawn from sources bathrooms, kitchens, garages or from unconditioned basements, crawlspaces, or other areas outside of the conditioned space of the dwelling.

e. Are there any uninsulated ducts and hydronic pipes located in unconditioned areas? If

so, they shall be insulated to conform to IMC 604 or IMC 1204 (which outlines hydronic pipe insulation material requirements).

f. Are any distribution system components undersized or oversized and is the

distribution system unbalanced? If so, the system shall be corrected to adequate size or balance. The HOME Program expects that, to the extent practicable, ducted distribution systems shall conform to IMC or other recognized methodology and that new hydronic piping shall be sized according for the demand of the system. NOTE: To help determine if a forced- air system, is adequately balanced, the HOME Program recommends measuring the temperature rise by inserting a thermometer in the supply and return ducts within 12 inches of the plenums while the furnace is operating. If the temperature difference between the supply air and the return air is between 40F and 70F, the system should be adequately balanced. In addition, the unobstructed area of the return air and the supply air ducts should meet the size requirements of IMC. In general, there should not be less than 2 square inches of return and supply for each 1,000 BTU/hr input rating of the furnace or, if air conditioning is present, no less than 6 square inches of return and supply for each 1,000 BTU/hr input rating of the furnace. However, the location of the supply and return ducts is also an important consideration. For example, rooms with tight fitting closed doors and no return register may cause forced-air systems to be unbalanced. To restore balance (and reduce room over-pressurization) doors may need to be under-cut or grilles, which connect the room with the rest of the house, may need to be installed.

3.6 WATER HEATING EQUIPMENT (ALL FUELS) Water heating and storage equipment shall meet the following conditions:

a. The equipment shall be capable of meeting the requirements of IMC Section 1002 and UPC Chapter 5. Water heating and storage equipment that is not an obvious candidate for replacement shall be inspected to ensure safe and efficient operation.

b. The equipment shall be designed and listed for the location in which it is installed.

c. The equipment shall be accessible for inspection, service, repair and replacement without removal of permanent construction.


d. The equipment shall be properly connected to the hot and cold water supply lines, including a shut-off valve on the cold water supply as required in UPC Section 605.5.

e. The equipment shall have an approved (rated & stamped) pressure and temperature

relief valve as required in UPC Section 608.3 and 608.4 and installed in accordance to UPC Section 505.6 or the manufacturer’s installation instructions. The relief valve setting shall not exceed the tank’s rated working pressure. The equipment shall be equipped with a safety discharge pipe of ¾ inch rigid pressure and temperature approved pipe, which terminates with an air gap and comes to within no less than 6 inches of the floor, or empties into a plumbing fixture, floor drain or some other approved point of discharge as required in IMC Section 608.5.

f. Replacement water heaters shall be properly sized to the needs of the household.

Sizing calculations shall, at a minimum, conform to UPC Table 5.1 or another approved method of water heater sizing.

g. Water heating equipment shall be properly clear from combustible materials. Where

feasible, clearances shall conform to UPC Section 505.3 or the manufacturer’s installation instructions.

h. Water heating equipment shall be safely connected to an approved venting device

directly to outside air. Vents shall be free of obstructions, cracks and holes, and provide sufficient draft to safely exhaust heat and combustion gases to the outside. Vents and chimneys shall be properly sized to the number and type of heating appliances. Where feasible, repairs or replacements to venting system components shall conform to UPC Sections 510, 511, 512, and UPC Chapter 5, Part II or the manufacturer’s installation instructions.

i. Water heating equipment shall be provided with an adequate supply of combustion

air in accordance with UPC Section 507.

j. Water heating equipment shall combust fuel safely and efficiently. Flue gases (oxygen and carbon monoxide), stack temperatures and smoke shall be within acceptable limits.

Safe and properly installed water heating equipment and an adequate supply of hot water are

critical to a healthy habitable environment. To provide an adequate supply of hot water, the water heating equipment must be capable of

heating water to such a temperature as to permit an adequate amount of water to be drawn at every required sink, lavatory basin, bathtub, shower, and laundry facility or other similar unit, at a temperature of not less than 110 degrees Fahrenheit at any time needed under normal usage.

To ensure that the existing water heating equipment that is not to be replaced is installed

properly and operating safely, the equipment must be thoroughly inspected. The HOME Program expects that the water heating equipment inspection shall answer at minimum the following questions:


a. Is the tank leaking or severely corroded? If so, the equipment shall be replaced. Is a

cold water supply shut-off valve present and functioning? If not, a functioning shut-off valve shall be installed. Are the water supply line connections leaking or severely corroded? If so, the lines shall be repaired. Repairs and replacements of water supply lines shall conform to OHRS Chapter 5. In addition, a dielectric union or non-conductive connector must be used when dissimilar metals are joined.

b. Are fuel supply lines deteriorated, leaking or improperly installed and is the electrical

wiring loose, frayed or improperly installed? If so, the fuel supply lines and electrical wiring shall be repaired or replaced. If the water heater is electric, is it connected to a dedicated circuit with proper over-current protection? If not, it must be connected to a dedicated circuit with proper over-current protection. Repairs and replacements of fuel supply lines shall conform to UPC Chapter 12. Repairs and replacements of electrical circuitry shall conform to the appropriate sections of NEC.

c. Do gas or oil supply line pressures and electrical line voltages conform to the

equipment manufacturer’s installation instructions? If not, proper pressures and voltages shall be restored.

d. Do clearances from combustible materials conform to UPC 505.3? If not, proper

clearances shall be created. In addition to maintaining proper clearances from combustible materials, the HOME Program expects that fuel-fired water heater equipment located in garages shall be placed a minimum of 18 Inches above the floor and be protected from damage by vehicles as noted UPC Section 508.14.

e. Are temperature and pressure control devices missing, non- functional, defective or

improperly installed? If so, the devices shall be repaired or replaced. Repairs and replacements shall conform to UPC Section 608.3 and 608.4 505.6 and the manufacturer’s installation instructions.

f. Do the results of the combustion efficiency test fall outside of the standard

manufacturer design ranges (see OHRS Appendix C, Table C-2)? If so, and the equipment is not to be replaced, repairs and adjustments shall be made to improve the combustion efficiency.

g. Is the location of the equipment in compliance with UPC Sections 505, 507, 508 and

509? If not, the equipment shall be moved to an approved space, or the space shall be made into an approved space or the equipment shall be replaced with an approved model.

In general, fuel-burning water heaters shall not be located in storage closets, bedrooms, bathrooms or other occupied rooms usually kept closed, unless in a sealed enclosure which prevents combustion air from being taken from the living space or the equipment is a direct-vent model.

The HOME Program recommends the replacement of water heating equipment that has a

leaking or severely corroded tank, that is unrepairable or that is located in a prohibited area



and cannot be made to conform. Installing the right size and model water heater is important for ensuring that the occupants receive an adequate supply of hot water at a reasonable operating cost. The HOME Program recommends a cost-benefit approach to selecting replacement water heaters.

In other words, the “cost” of the equipment should consider not only its installation cost but

also its long-term operating cost. Often the incremental increase in the cost high Energy Factor (EF) rated equipment is off-set within a few years by the fuel savings achieved over low EF rated equipment. Methodology for selecting properly sized water heaters and for comparing the cost-effectiveness of various equipment models is outlined in OHRS Appendix E. Another approved method may also be used.

3.7 FUEL GAS PIPING The fuel-gas piping system shall be free of leaks, properly sized for all of the appliances

connected to it and properly installed using approved materials. For the purposes of the OHRS, the fuel-gas system includes all fittings and valves between

the outlet of the gas meter (or in the case of LPG systems, from the outlet of the first stage pressure regulator) and the equipment that they operate.

A properly installed fuel-gas piping system is essential for ensuring the safety of the

occupants and the proper operation of the fuel-gas burning equipment. Therefore, all existing fuel-gas piping shall be inspected visually for defects in materials and installation and tested for leaks by means of a pressure test in accordance with UPC Section 1214 or with a combustible gas leak detector.

All leaks found as a result of the inspection shall be repaired and a second test shall be done

to assure that no other leaks exist. All other defects in materials, sizing and installation shall be corrected to ensure the following conditions:

a. Each fuel-gas operated appliance shall have a shut-off valve within six feet of the

appliance (and must be in same room as appliance), as required in UPC Section 1212.4.

b. All fuel gas piping shall be properly supported, as required in UPC Section 1211.2.6.

c. The fuel-gas piping shall be properly sized for all of the appliances connected to it, as

required in UPC Section 1211.16.

All gas piping and fittings used in any new installations or repairs shall be of approved type, and all work shall conform to the appropriate section of UPC Chapter 12. When feasible, old unused and disconnected fuel-gas piping located in accessible areas (e.g. basements) should be removed.

CHAPTER FOUR

ELECTRICAL SYSTEM 4.1 GENERAL REQUIREMENTS All electrical systems shall be inspected by qualified personnel to evaluate the safety of the

service; grounding protection; condition of existing wiring, fixtures, and equipment to determine potential electrical hazards; the capacity of the service to meet the anticipated usage demand and convenience needs of the occupants (refer to System inspection in OHRS Appendix F).

Electricity is a potent force that can result in fire, shock, property damage, serious personal

injury and even death, therefore, the safety, capacity and convenience of the wiring system are of primary concerns. The HOME Program requires a thorough inspection of the existing electrical system which clearly evaluates the safety of the exterior, service entrance, the service equipment/distribution panel, premises wiring, fixtures, receptacles, switches, equipment grounding and the occupant’s needs. In particular, health, safety and lifestyle issues should be addressed. There are three primary considerations during the evaluation and alteration of any electrical system.

SAFETY: Safety is the fundamental and essential aspect of any adequate wiring installation.

The National Electric Code (NEC) points out that the purpose of the code is for “the practical safeguarding of persons and property from hazards arising from the use of electricity.” Fire and electric shock hazards must be minimized. The NEC contains provisions considered necessary for safe operation and installation; however, as with most codes, it states minimum requirements. Providing a safe electrical installation and minimizing hazards can be done by following the manufacturer’s instructions, fully complying with any limitations placed on the use of equipment and permitting only qualified persons to perform electrical installations. Inspections conducted by a qualified inspector to ensure “proper mechanical execution of work” are strongly recommended.

CAPACITY: Capacity is the second aspect to consider in the electrical system. Compliance

with the NEC and proper system maintenance will result in an installation essentially free from hazard, but not necessarily in an efficient, convenient, or adequate service if future electrical needs are not considered. Unsafe conditions often occur because the initial wiring system was not properly planned and outlets added later overload the existing circuits. Adequate capacity reduces hazards such as overloaded circuits, conserves energy and contributes to a safer electrical system. The system shall be designed to permit expansion without overloading the circuits and to meet post-rehabilitation needs.

CONVENIENCE: Convenience is the third electrical system consideration. There should be

enough switches, fixtures and receptacles and they should be located so that the occupants will not have to walk in the dark or use extension cords. Remember that the NEC is a minimum code and can be exceeded, particularly to address health, safety and lifestyle issues. For example, electrical system design should consider the placement of switches for handicapped occupants, the relocation of service equipment for ready access by the


elderly/disabled and the number of bathroom receptacles needed by a family. Do not skimp on the number of branch circuits or number of receptacles.

Remember most updating could have been avoided by more liberal planning when the

system was originally designed and installed. 4.1.1 REPLACEMENT, ALTERATION OR REPAIR TO ELECTRICAL SYSTEM When an electrical system is replaced, altered or repaired, the portion of the system that has

been replaced, altered or repaired shall conform to NEC standards and shall be completed by qualified persons using accepted engineering practice and good workmanship. The standards and installation methods of the NEC shall be followed for all re-wiring, repairing and upgrading. Installations shall be neat and closely adhere to those methods detailed in NEC Article 110.12, which covers the “mechanical execution of work”.

If existing electrical service and fixtures are in good and safe condition, they may not need to

be replaced. Existing portions of the electrical system that are safe, adequate and functional and consequently are not being re-wired, repaired or upgraded do not have to comply with the current NEC codes. However, all portions of the electrical system, including wiring, boxes and fixtures shall be attached in a secure and tidy manner for both safety and aesthetic reasons. Fixtures shall be securely fastened to the framing members by mechanical means, such as bolts, screws, rivets or approved clips. No fixture or socket may hang from a base by unsupported wiring. Switches located in wet locations shall be weatherproof and the wiring shall be run in boxes, conduit, and fittings listed for wet locations as required by NEC Article 404.4.

In order to meet safety, capacity and convenience needs, the HOME Program requires that installations to the electrical system including rewiring, repairing and updating of the existing electrical system shall be performed by a “qualified person”. This should be an electrical contractor, or electrician, whose primary occupation is residential electrical wiring; particularly if the installation is extensive. However, at a minimum, it must be a person who is familiar with proper residential wiring techniques including the operation of the equipment, the hazards involved, all applicable codes and which results in an installation meeting the OHRS and mechanical execution of work. These standards apply to the rehabilitation work performed on the electrical system.

4.1.2 EXISTING WIRING AND FIXTURES Existing wiring and equipment shall be in proper operating condition free of taped splices,

loose connections, missing insulation, short circuits or unapproved grounds. Service conductors shall not be frayed, worn or bare. The service conductors, including the service drop, service lateral and service entrance shall be out of reach or properly buried, properly connected and anchored to the home.

Service conductors are high amperage and proper precautions must be taken to ensure that

contact with them is avoided. Where feasible, clearances shall conform to NEC Articles 230.9 and 230.24. Existing wiring must be made free of hazards and improper installations that may become hazards. For example, circuit extensions made with flexible cord wiring


(e.g. lamp cord/zip cord) in lieu of permanent wiring shall be eliminated and replaced with properly sized wire for the intended circuit.

4.1.3 STRUCTURAL INTEGRITY Where feasible, drilling and notching of joists should not exceed 1/3 of the width of the joist.

Holes should not be located within 2 inches of the top and 2 inches of the bottom third of the joist width.

In no case shall the structural integrity of the structural member be compromised. New

wiring shall be installed in a neat and workmanlike manner with all wiring run inside the walls or if wall or ceiling cavities are not accessible in properly sized and rated raceway or wire mold, secured along the sides or through joists with proper fasteners flush to the surface; straight and securely attached in the wall or ceiling.

4.1.4 MATERIAL AND EQUIPMENT INSTALLATION All material and equipment used in electrical installations shall be listed or labeled by a

qualified electrical products testing laboratory such as “UL” as defined by NEC Article 90.7. Listed materials shall be installed per the intended use and location and per the manufacturer’s instructions as required by NEC Article 110.3(b). All terminations shall be made in accordance with the manufacturer’s instructions provided on the equipment. Equipment located in wet or damp areas shall be listed for wet locations and installed in a weatherproof enclosure.

Equipment includes materials, devices, fittings, fixtures, appliances, and apparatus that are

used as part of, or in connection with an electrical installation. The HOME Program requires that installation of electrical equipment be done in a neat and workmanlike manner.

4.1.5 GROUNDING AND SYSTEM PROTECTION All electrical systems shall consist of a single phase three wire grounded neutral service and

shall provide system grounding and equipment grounding protection. The service panel shall be connected to the grounding electrode system and the panel shall meet the bonding requirements per NEC Article 250.

Grounding of the electric system must comply with NEC Article 250. For example, the

service panel is to be bonded by a neutral metal strip and grounded by a bare copper wire connected to an 8’ galvanized or copper clad steel ground rod and a second grounding electrode. The ground wires from the service entrance, branch circuits, and house ground are joined by this strip. The goal of system grounding is to tie all non-current carrying conductors together and place them at earth ground potential (0 volts) so that any stray current flows to the earth instead of through the wires and fixtures of the unit reducing electric shock and other hazards. This is done using the incoming neutral wire from the service and the neutral wire of the branch circuits. This grounding method places the panel at ground potential of 0 volts so that it can never become a conductor if a hot wire touches it. This is especially important because all equipment grounding wires from every receptacle and every appliance, as well as the neutral wires, connect to the panel.


The non-current carrying metal parts of electrical equipment and raceways that are metal (but

should not carry a current) such as metal boxes, washing machine frames and other appliances often become hazardous due to bad connections and can cause serious shock when touched. The three-pronged plug or cheater plugs may not provide adequate equipment grounding. The NEC recognizes that pre-1978 grounding methods may be inadequate due to replacement of metal water pipes with plastic and that water pipe, in some cases, is no longer a reliable grounding electrode.

Where present, metal water pipes shall be bonded to the grounding electrode as a means of grounding the plumbing system to prevent the piping and/or fixtures from becoming energized and hazardous. The NEC requires that the grounding be bonded together to form a “grounding electrode system”, therefore water piping that is not metal where it goes below ground must be supplemented by an additional electrode such as reinforcing rod, metal frame of the building, or a grounding ring. For additional guidance, see NEC Article 250-81. Ungrounded household equipment and wiring is a serious hazard to the occupants; therefore, wiring and equipment shall conform to the grounding requirements of the NEC.

4.1.6 MINIMUM SERVICE SIZE AND LOAD CALCULATION The minimum service for a dwelling (usage or load) shall be 100 amperes with a three wire,

120/240 volt, single-phase with a grounded neutral service. The nominal size wire used with 100 amp service is to be No. 4 copper or No. 2 aluminum; for a 200 amp service 2/0 copper or 4/0 aluminum wire is the nominal size.

The service shall have the same rating (amperage) as the meter base and the service

equipment. Larger cable has lower resistance and will result in energy efficiency and should be considered when designing the service. For cable size and allowable amperage requirements, see NEC Ampacity Table 310.16. To determine the size of the service (which determines the entrance cable size) a calculation of usage or load within the unit must be completed. Sizing the service is based on the electrical needs within the home, the demand on the service, code requirements for individual circuits as well as liberal planning for future expansion. These needs are determined by calculating usage or load, based on factors such as square footage of the unit, determining the number of circuits needed based on appliances present and anticipated for future use. The utility will provide the correct meter base for the rating based on this calculation.

NEC Article 220 shall be used to calculate the load. The service shall be properly sized for

after rehabilitation capacity. A floor plan drawing, chart, or room by room specifications noting electric outlets/fixtures shall accompany the specifications or deficiency list prepared for each unit inspected.

The HOME Program advises Grantees to check the nameplate rating of all fastened-in-place

small appliances such as; ranges, ovens, cooking units, clothes dryers and water heaters for actual volt-amps (VA) rating. Remember to allow room for each permanently connected appliance rated at 1,000 VA or more (e.g. a bathroom heater). If the calculation falls at or near 100 amps, increase the service to the next common size available such as 200 amps. Homes equipped with all electric appliances such as: electric water heater, electric range,


electric clothes dryer, central air conditioning, and electric heat shall be equipped with no less than a 200 amp service.

To meet safety, capacity and convenience needs remember that the code states the minimum

requirements and that it is less expensive to install a service with greater capacity than currently needed when altering or upgrading the system than it is to increase capacity later.

4.1.7 SMOKE DETECTORS Each dwelling shall have at least one smoke detector installed in the immediate vicinity of

each sleeping area and one on each additional story, including basements and cellars, but excluding unoccupied attics or crawl spaces.

4.1.8 GFCI PROTECTION Receptacles located within six feet of a sink, located in a bathroom, at kitchen counter top

space, garage, unfinished basement, or located outside shall be GFCI protected as required by NEC Article 210.8(a).

GFCI receptacles provide additional shock protection in areas where the risk of electrical

shock is increased due to the presence of moisture. The HOME Program recommends that each dwelling should have two (2)weather protected exterior GFCI receptacles installed, one located at the front and one located at the rear of the unit for convenience and safety, particularly if the occupants use power tools outside or decorate with exterior lights. See OHRS Appendix F for a summary of required locations.

4.2 SERVICE EQUIPMENT - MAIN PANEL/DISTRIBUTION CENTER All service panels shall have a minimum rating of 100 amperes with circuit breaker type

overcurrent protection. The panel shall be in proper working condition with no evidence of overheating, arcing, corrosion or failure. The panel must bear the UL label and must be marked as suitable for service equipment.

The number of circuits installed shall not exceed the rating on the panel and the HOME

Program recommends selection of a panel with room for future circuit expansion. Full size single pole or double pole breakers are recommended. Tandem breakers are permissible only in panels designed for such and installed per the NEC.

For example, the use of tandem breakers in order to exceed the 16 circuits permitted on a 100

amp panel is prohibited. Panels with evidence of malfunction or deterioration shall be replaced. The HOME Program recommends replacing obsolete panels, such as pushomatic, when feasible.

4.2.1. SERVICE PANEL ATTACHMENT AND CONNECTIONS All existing or new service panels shall be securely fastened to the dwelling. All panel boxes

shall be enclosed in 16 gauge or code sheet steel cabinets with doors and catches. All panel


circuits shall be clearly and permanently labeled with tags provided and all unused openings shall be properly plugged, capped or sealed with listed material.

Conductors entering the service shall have proper connectors and shall be securely attached

at terminals. All connections shall be torqued to required specifications. A safe and secure service panel, with firmly secured conductors and labeled circuits is very

important for the safety and convenience of the occupant. Proper installation shall include following the manufacturers installation instructions or other instructions as required by NEC Article 110.3(b). The wires shall be properly connected to terminals with no nicks in the insulation and shall be properly bonded. Consider the design and location of the service panel when replacement is necessary. Locating the panel near the meter may eliminate the need for an additional disconnect as well as reducing the amount of service entrance cable needed. A good panel is designed with enough work space to connect wires to the hot buses and neutral/grounding buses without creating a bird’s nest of wires.

4.2.2 SUB- PANELS (ADD-ONS) Sub-panels, add-on boxes or disconnects to existing services for additional circuits, shall be

allowed only if the existing service equipment is listed and designed for such extension and the installation is in compliance with the NEC.

Sometimes known as sub-panels, these boxes are added-on to the existing panel rather than

replacing the existing panel and installing a new and higher rated panel. For example, an add-on panel may be considered when an existing service panel has adequate capacity but no available expansion slots.

4.2.3 SERVICE DISCONNECT Each occupant shall have ready access to the disconnect serving the dwelling unit in which

they reside. The disconnect shall be clearly marked as a service disconnect and shall be installed at a readily accessible location either outside the building or inside at the nearest point of entrance of the service conductors as required by NEC Article 230.70.

The main disconnect in the panel most often serves as the service disconnect. However, the

NEC permits up to 6 main circuit breakers to protect the installation as a whole. Service equipment containing only one main breaker is highly recommended when altering the electrical service equipment.

All split bus systems with disconnects in fuse panels are to be replaced with breaker

overcurrent protection in the form of a main disconnect.


4.2.4 BRANCH CIRCUITS No less than one dedicated 20 amp circuit shall be present for the bathroom, one for the

laundry room and no less than two small appliance branch circuits serving the kitchen. A dedicated circuit shall serve no other outlets.

The number of small appliances used by the occupants; such as hair dryers, curling irons,

portable heaters, coffee makers, toasters, etc. should be taken into consideration when planning the circuit loads and placement of the outlets to avoid overloading the circuit and to eliminate the use of extension cords or multiplex outlets (additional circuits are permitted).

In addition to the required branch and small appliance circuits, the individual appliances

listed below draw enough current to warrant an individual dedicated circuit. When planning the scope of electrical rehabilitation work to be undertaken, serious consideration should be given to the capacity of the circuits and load demand. Allowing for dedicated circuits for the following appliances will minimize hazards of overloaded circuits, increase efficiency, and ensure future capacity for installation of additional convenience outlets:

Range 50 amp circuit

Laundry 20 amp circuit Clothes dryer 30 amp circuit Water heater 30 amp circuit Garbage disposal 20 amp circuit Furnace 15 amp circuit Microwave oven 20 amp circuit Air conditioner Varies Dishwasher 20 amp circuit Water & sump pumps 20 amp circuit Septic aerators 20 amp circuit

All nominal 240 volt appliances or equipment, except individual baseboard heating units,

shall be on separate circuits. Each 240 volt circuit shall be sized to match the needs of the appliance for which it is intended.

4.2.5 CIRCUIT LOAD DISTRIBUTION All circuit wiring shall be properly sized to serve the load. The loads shall be evenly divided

among various circuits to attain a close balance of probable or calculated load as per NEC Article 220.4(d).

Balancing circuits as well as the load reduces the strain on the electric system. Alternating

connections of the hot wires to the hot buses in an effort to evenly distribute the circuits within the panel results in less heat build up in the wire terminals and allows more load in the panel. In addition, circuits of the same rating, put on opposite hot legs will cancel out to 0 amps in neutral creating a balance and providing efficiency. A good way to lower energy costs, reduce strain on the system, and reduce voltage drop, is to exceed code requirements by using bigger wire (e.g. use of #12 wire with 20 amp circuits though code permits use of #14 wire with a 15 amp circuit) so that equipment and appliances operate nearer to the rated


voltage. Remember that the farther a wire is run, the greater the voltage drop which causes power loss and wastes electricity.

4.2.6 OVERCURRENT PROTECTION DEVICES (CIRCUIT BREAKERS) Overcurrent devices shall be properly sized in accordance with NEC Article 240. All existing

circuits shall be load tested for tripping. Service equipment containing fuse overcurrent protection devices shall be replaced with properly rated circuit breaker type overcurrent protection devices. In some instances, it may be permissible not to replace a fuse panel with circuit breakers. If the panel is rated at 100 amps, has no evidence of overheating, arcing, overloaded circuits and meets other service panel requirements, installation of “S”-type fuses is permissible.

Breakers and fuses do not protect an occupant from shock. Overcurrent devices protect

circuit wiring from overheating due to excessive current. Proper sizing of the circuit breaker is critical because the amperage rating of a circuit depends on the rating of the breaker protecting the wire, not the wire size in the circuit. If not properly rated the circuit may never trip even when wires overheat and many potential hazards may go undetected until too late.

4.3 PREMISES WIRING 4.3.1 UNUSED SWITCHES, RECEPTACLES, FIXTURES AND CONDUCTORS All unused switches, receptacles, fixtures and conductors shall be removed.

Switches or receptacles that do not provide power must be removed so that there is no confusion about whether they are malfunctioning. At a minimum, the opening of the box shall be covered with an approved cover plate. Where feasible, the wiring to the unused fixtures, receptacles and switches shall also be removed. Any accessible wiring that is no longer in service should be removed.

4.3.2 UNUSED OPENINGS

Any unused openings in outlet, device, pull and junction boxes, conduit bodies and fittings, raceways, cabinets, auxiliary gutters, equipment cases or housings shall be effectively closed with knockout seals.

Openings left in boxes may allow for rodents, building materials, etc. to come into contact with wire connections and cause shorts. In addition, they present a safety hazard in locations where they are accessible for people to stick their fingers (or other conductive probes) into the openings.

4.3.3 WIRE SPLICES

All splices shall be placed in accessible, approved junction boxes that are properly covered as required by NEC Article 370.


Accessibility means that it can be reasonably gotten to without altering the structure. For example, an attic with plenty of crawl room would be considered accessible.

4.3.4 KNOB AND TUBE WIRING

All frayed or damaged knob-and-tube wiring located in open cavities (e.g. open joist attics, basements) shall be replaced.

Where feasible, the HOME Program recommends removing all knob and tube wiring (KTW) and installing grounded conductors, which enable installation of grounded receptacles. Another option is disabling the KTW within the wall cavity and fishing THW wire for installation of a grounded receptacle nearby and removing the ungrounded outlet, or in some circumstances, the use of surface mounted wire is acceptable.

4.3.5 EXTERIOR WIRING

All wiring that supplies power to outside post lights, detached garages, etc. shall be sunlight resistant UF or installed in approved conduit.

Exterior wiring that is exposed to sunlight must be protected from deterioration caused by Ultraviolet (UV) radiation as well as from moisture and physical damage; therefore, it shall be properly rated and contained in an approved protective weatherproof conduit.

4.3.6 CONSTRUCTION PROTECTION

All connections of electrical cables, raceways and equipment shall comply with rules pertaining to grounding continuity and shall provide for protection against physical damage of exposed electrical equipment during and after construction.

4.4 RECEPTACLES 4.4.1 REPLACEMENT AND INSTALLATION All replacement receptacles shall be listed or labeled by a qualified electrical products testing

lab and installed per the manufacturer’s instruction. All boxes shall be specifically designed for the purpose, properly sized, mechanically secure and have attached cover plates installed. Receptacles located in damp or wet areas shall be weatherproof and the wiring shall be run in boxes, conduit and fittings listed for wet locations as required by NEC Article 312.2(a).

All existing non-grounding type receptacles shall be replaced with new non-grounding type

receptacles (the new receptacles are designed with the wider slot for polarity which limits the way the cords are plugged and protects people from shock hazards), or replaced with GFCI protected receptacles, or the circuit shall be GFCI protected.

If existing electrical receptacles are in a good and safe condition, replacement may be

unnecessary. However, all portions of the electrical system, including wiring, boxes and receptacles shall be attached in a firm and tidy manner for both safety and aesthetic reasons. NEC Article 370.16 provides the requirements for determining the minimum size of box


necessary for the number of conductors to be contained in it, so when adding conductors to existing boxes there is adequate space for the additional wires.

All receptacles located in the floor shall be either installed in an approved box listed and

labeled for such use or shall be moved to the wall. Metal plates, or another safe method or material shall be used to cover the floor opening.

Receptacles located in the floor are potential hazards and therefore need to be placed in

approved floor mounted boxes or, where feasible, relocated to an adjacent wall. Receptacles shall not be installed above electric baseboard heaters, unless provided for by the

exception noted in NEC Article 210.52(a). Baseboard heaters get hot and having receptacles above them creates a fire hazard where

cords might drape over the heater. 4.4.2 RECEPTACLE LOCATION All habitable spaces, occupiable spaces, laundry rooms and basements shall have receptacles. In each family room, dining room, living room, parlor, library, den, sun room, bedroom,

recreation room, or similar room or area, receptacle outlets shall be installed so that that no point along the perimeter of the floor is more than 6 feet from a receptacle per NEC Article 210.52(a)(1), unless impracticable. Otherwise, the HOME Program requires that in habitable spaces each wall space (as defined by NEC Article 210.52(a)(2)) has at a minimum one receptacle.

An adequate number of receptacles is critical for convenience and can be an important safety

factor by eliminating the use of extension cords to power the various appliances found in today’s homes. The HOME Program expects dwellings to have an adequate number of receptacles so that extension cords and multi-plug adapters are not required on a permanent basis. This is especially important in rooms that are used frequently.

The bathroom shall be required to have at least one receptacle and it shall be a GFCI

protected receptacle outlet, per NEC Article 210.8(a)(1). The HOME Program recommends that kitchens have receptacles installed at each wall

counter space every 48 inches, so that no point along the counter line is more than 24 inches from a receptacle outlet. The kitchen shall have at least one GFCI protected receptacle at the kitchen counter space as a minimum.

The kitchen shall be provided with a receptacle for the refrigerator that should be located

within 6 feet of the specific appliance. Exterior outlets shall be GFCI weather protected per NEC Article 210.52. The HOME

Program recommends that each dwelling should have 2 weather-protected GFCI receptacles installed, one located at the front and one located at the rear of the unit for convenience and safety, particularly if the occupants use power tools outside or decorate with exterior lights.


The improper use of extension cords that are not rated for wet locations is a common hazard noted. When the electric system is altered or replaced, the installation of exterior receptacles would not significantly increase the cost and would greatly increase the convenience and safety for the resident.

4.4.3 AMPERE RATINGS OF RECEPTACLES Receptacles installed on a branch circuit shall have the same ampere rating as the branch

circuit itself. All newly installed l5 amp and 20 amp 120 volt receptacles shall be of the grounding type as required by NEC Article 210.7(a). To ensure safe operation of the overcurrent protection system, receptacle amperage must match the breaker amperage. For example, install a 15 amp receptacle for a 15 amp breaker and a 20 amp receptacle for 20 amp breaker.

4.5 LIGHTING FIXTURES All replacement fixtures shall be listed or labeled by a qualified electrical products testing lab

installed per the manufactured instructions. If existing fixtures are in good and safe condition securely and tidily attached, they may not

have to be replaced. However, fixtures shall be securely fastened to the framing members by mechanical means, such as bolts, screws, rivets or approved clips. No fixture or socket may hang from a base by unsupported wiring.

4.5.1 FIXTURE AND SWITCH LOCATION A permanently installed lighting fixture controlled by a wall switch shall be required to be

located in each bathroom, kitchen, laundry room, furnace room, basement, at all exterior doors, common hallways, common stairways, and attached and detached garages with existing electric power. In other habitable rooms including living rooms and bedrooms, permanent lighting fixtures that are wall switch controlled, or wall switch controlled receptacle outlets shall be installed.

Care should be taken when replacing existing fixtures. Prior to 1984, wire installed in homes

was rated for 60 degrees centigrade, many present incandescent fixtures are marked as requiring 75 or 90 degree centigrade supply conductors, and therefore, if not replacing the wiring, care must be taken in the selection of a replacement fixture.

Switches shall not be installed in tub or shower areas. New switches shall not be located

behind the door swing. All new wall switches shall be located for convenient and readily accessible use.

Proper lighting is matter of safety and convenience. As a particular safety concern, locations

where people may come into contact with water and electricity are especially hazardous and should be avoided.

The HOME Program recommends that fixtures and lamps (bulbs) installed in areas lighted

for long periods (e.g. several hours per day) be selected for energy efficiency. For example,



fixtures that accommodate electronic ballast compact fluorescent lamps (CFL) should be considered for kitchens, hallways and stairways. In addition, CFL fixtures that are photo-cell controlled should be considered for outside porch and door lighting. When a CFL fixture is installed, a lamp must be provided and the occupant must be educated about the long term cost saving benefits of energy-efficient fixtures. For additional information on electric lighting standards, see OHRS Section 6.2.1 and OHRS Appendix F.

All light fixtures installed in closets shall be surface mounted or recessed incandescent with

all lamps completely enclosed, or a surface mounted or recessed fluorescent fixture with enclosed lamps and be installed on the wall 6 inches away from any storage as required by NEC Article 410.8.

Due to the potential fire hazard in a closet, where flammable materials may come into

contact with a hot light bulb, the HOME Program recommends the removal or replacement of existing closet light fixtures to meet the above standard.

CHAPTER FIVE

PLUMBING SYSTEMS 5.1 GENERAL REQUIREMENTS The plumbing system shall provide for a safe, adequate supply of potable water to the

premises and provide for a safe, sanitary method of disposing of liquid and solid waste. Sanitary and safe conditions in occupied buildings are dependent upon certain basic

plumbing principles. Fumes from sewer gases can be toxic and leaks or improper disposal of sewage can create unsanitary conditions and lead to deterioration of other building components.

The plumbing system includes water supply lines; drain, waste, and vent pipes; plumbing

fixtures such as faucets, hot water heaters, sinks, lavatories, toilets, bathtubs, showers and any devices which are permanently or temporarily connected to the water distribution system of the premises and demand a supply of water or discharge waste water, liquid-borne waste materials or sewage either directly or indirectly to the drainage system of the premises, or which require either a water supply connection or a connection to the drainage system of the premises. All piping, fittings, devices, faucets, vessels, containers and receptacles that are used to supply, distribute, receive or transport potable water or liquid or solid wastes are considered as plumbing.

5.1.1 REPLACEMENT OR REPAIR OF PLUMBING SYSTEM When a plumbing system is replaced or partially replaced, the system used for the

replacement portion shall be designed, constructed and installed in conformity with the version of the Uniform Plumbing Code (UPC) currently adopted by the State of Montana using accepted engineering practice and workmanship.

Older houses may make use of materials and methods that differ in certain ways from those

in common use today. Yet current methods of good workmanship and new standards should apply to any new work that is being done. (It may be permissible for example to leave galvanized piping as supply piping in a house if it is in good shape and is functioning well. However, when replacing supply lines copper is a better choice). You should consider reviewing your plumbing plan with your local plumbing inspector before starting work. Also, remember that UPC and most other codes are minimum standards and many good plumbing installations will exceed these standards in design, workmanship and selection of materials. Another consideration when dealing with supply lines and fixtures is their lead content. Lead is a safety hazard and the HOME Program recommends the use of lead-free solder; and piping, fittings and fixtures with as low lead content as possible.

5.1.2 STRUCTURAL INTEGRITY Supply, drain, waste, and vent lines shall not run through structural members in such a way

that will interfere with their ability to sustain the imposed loads. Drilling and notching of structural members shall conform to IRC Sections R502.8 and R602.6.


When in the process of installing or repairing any part of the plumbing and drainage system,

the finished floors, walls, ceilings, tile work and/or any other part of the building or premises must be changed or replaced, it shall be left in a safe structural condition.

5.1.3 INSPECTION GUIDELINES Prior to choosing a contractor to undertake rehabilitation and as a part of the process of

determining the extent of rehabilitation work, a thorough inspection shall be done to determine the scope of the plumbing that is not in compliance with the OHRS.

To the extent feasible, all parts of the plumbing system shall be inspected to ascertain

whether they are functioning properly and adequately, are free of leaks and are otherwise following the guidelines set out in the OHRS and the principles listed in UPC Chapter 3. When problems are found, other tests may need to be done (for example, if a faucet appears to have low pressure, pressure tests and/or supply line calculations may need to be done to determine the extent and cause of the problem). Plumbing inspections and all plumbing work shall be done by qualified people who are experienced in working on plumbing systems and knowledgeable in the field. Clear and detailed work specifications shall be written for all work to be completed and given to contractors prior to submission of bids.

5.2 SUPPLY 5.2.1 WATER SOURCE All water service entry lines shall be properly connected to either a public water supply

system or an approved private water supply system. When connected to a private system, an analysis of water by the local health department, or other qualified entity shall be done to determine the bacterial content for safety and appropriate corrective measures implemented.

Supply systems shall provide for the delivery of an adequate supply of potable water through

a safe system of piping, free from leaks and defects, connected to an approved water source and not subject to the hazards of back flow. The desired qualities for water are as follows: free of pathogenic organisms; free of toxic chemicals; relatively free of odor, taste, color, and turbidity; free of excessive minerals; relatively noncorrosive; adequate in quantity and pressure; and economical.

In some cases, it may be recommended to have further tests completed by a lab to determine

the presence of toxic chemicals, mineral levels, etc. See also OHRS Section 6.7.4. Well water is often acidic or corrosive and piping systems for wells may last only one quarter to one half as long as they do on public water systems. In the event that water quality is substandard corrective measures to improve water quality such as water filtering, softening and/or conditioning equipment may be needed.

5.2.2 PIPE PROTECTION Montana’s climate allows pipes and other water distribution equipment to freeze if left

exposed to the elements. Proper precautions must be taken to avoid frozen pipe damage.


All water lines shall enter and exit the building below grade and shall not be exposed to the outside. To the extent feasible, all interior water distribution lines in unheated areas or in exterior walls shall be moved to heated areas or insulated to avoid freezing.

5.2.3 FROST PROTECTION OF HOSE BIBS All hose bibs (water faucets) in unheated or exterior locations shall be frost proof and

designed so that they extend into a heated area through the building insulation or the water line to the hose bib shall be equipped with an accessible shut-off valve located within a heated area.

If the shut-off valve approach is used, the occupants shall be educated to shut off the water

supply to the hose bib with the valve and to drain the line prior to cold weather. 5.2.4 QUANTITY AND PRESSURE Supply lines and fixtures shall be capable of performing the function for which they are

designated. Interior water distribution lines shall at all time supply water to the plumbing fixtures in sufficient volume and at a pressure adequate to enable them to function satisfactorily. New water supply lines shall be sized and installed according to accepted engineering practice (see OHRS Appendix G or UPC Table 6.4E for supply piping size guidelines).

Water volume and pressure can change over time as pipes, fittings, and fixtures corrode and

become constricted. In addition, the design of the system, the amount of water pressure and volume supplied by the main line coming into the building and other factors affect the pressure at each fixture. See OHRS Appendix G, Table G1 for recommended pressures for satisfactory functioning of fixtures.

The HOME Program recommends that the minimum average static pressure at the building

entrance should no greater than 80 psi and meet the requirements of UPC Section 608. If pressure exceeds 80 psi, an approved pressure reducing valve should be installed in accordance with UPC Section 608.2. This will help to prevent fixtures from becoming ruined due to high pressure. If pressure is less than 15 psi then the system should be evaluated to determine reasons for low pressure and corrective measures taken as outlined in UPS Section 608.1.

5.2.5 VALVES 5.2.5.1 SERVICE VALVE All main water lines shall have a service shut-off valve located near the entrance of the water

service into the house that meets the requirements of UPC Section 605. A main service shut-off valve is necessary to provide for shutting off water in case of an

emergency or a leak in the system. It should be located inside the building in a convenient location as close as reasonably possible to where the water supply line enters the house to prevent leaks from occurring in the line ahead of the valve.


If the supply entrance to the building is not in a convenient location, a second valve may

need to be installed at the first easily accessible location to ensure that the water can be quickly shut off. These valves should not be of a type that will restrict the flow of water when fully open. Existing valves shall be tested to ensure that they function properly.

5.2.5.2 FIXTURE SHUT-OFF VALVES All hot and cold water supply lines feeding, sinks, lavatories, bathtubs, showers, toilets,

water heaters and other plumbing fixtures shall be equipped with functional and accessible shut-off valves as feasible.

Valves at each fixture make it possible for occupants to turn off the water to an individual

fixture quickly and without turning off all water in the event of problems with a fixture. It also makes the changing of fixtures an easier, less expensive task. The HOME Program recognizes that there may be exceptional cases where it is not feasible to install shut-off valves and allows for that exception in those rare instances.

5.2.6 AIR GAPS A vertical air gap is required between the flood rim of a fixture and the lowest end of a water

supply outlet in conformity with UPC Section 603.2.1. Air gaps are necessary to prevent contamination of the water supply by back flow or

siphonage of wastewater or other contaminants. 5.2.6.1 HOSE BIBS Exterior hose bibs (water faucets) shall meet the requirements of UPC Section 603.4.7. The vacuum breaker prevents siphonage or back flow when an air gap is not continually in

existence. An example of a problem that might occur would be if you had a hose attached to your faucet and laid the other end in a puddle of antifreeze or oil from your car or even in a mud puddle with a high bacteria count. There would be potential for the hose to siphon the contaminants out of the puddle and into your water supply system. Air gaps and vacuum breakers are designed to prevent this. Be aware that this possibility can exist at other places where no air gaps exist such as laundry tubs or sinks with hoses. Where no exterior hose bib exists, the HOME Program recommends installing one if the occupants need it.

5.2.7 SUPPORT OF PIPING All supply lines shall be properly supported and meet the requirements of UPC Section 314. All supply lines must be supported to prevent sagging. Attention shall be given also to noise

reduction through proper support, insulation, and design techniques. New piping shall be installed in a neat and efficient manner.


5.2.8 JOINTS BETWEEN DISSIMILAR METALS

All joints between dissimilar metal pipes shall be made with dielectric fittings. Dielectric fittings help to prevent joint deterioration due to electrolysis. Plumbing system components shall be carefully inspected to determine the extent of corrosion and the integrity of joints, fittings, and other system components. Where defects are found, corrective action shall be taken. An example of a common location for dielectric fittings would be where copper supply lines attach to a hot water heater.

5.3 FIXTURES All plumbing fixtures shall be made of materials that are impervious to water, easily

cleanable, and shall not have leaks or defects which interfere with their function and shall meet the requirements of UPC Chapter 4.

Plumbing fixtures include water closets (toilets), urinals, bidets, faucets, lavatories, sinks,

showers, bathtubs, floor drains and drinking fountains. A separate class of plumbing fixtures known as plumbing appliances include washing machines, dishwashers, water heaters, garbage disposals; water softeners, water purifiers and hot water dispensers.

5.3.1 INSTALLATION OF FIXTURES Fixtures shall conform to the following guidelines in terms of how they are constructed and

installed:

a. All replacement plumbing fixtures shall comply with the ASSE/ANSI standards listed in UPC Table 14.1.

b. All replacement water closets shall be water conserving low consumption (not to

exceed 1.6 gallons per flush) in compliance with UPC Section 402.2.

c. All replacement bathtub and shower fixtures shall use anti-scald control valves. The control valves of the pressure balancing, thermo-static mixing or the combination pressure balancing/ thermostatic mixing valve types shall be controlled and designed to limit water temperature change to a maximum setting of 120 degrees in compliance with UPC Section 420. Where feasible, access panels shall be provided to these valves.

d. All fixtures shall be rigidly supported and securely attached in a manner consistent

with normal installation procedures and meet the requirements of UPC Section 408.

e. All replacement faucets shall have the hot water connected to the left side of the faucet being installed. (The HOME Program recommends changing existing supply lines that are reversed).

f. All plumbing fixtures other than toilets shall be provided with approved strainers in

conformity with UPC Section 405.1.


g. If a garbage disposal is present, it must be in good working order. If not, it shall be removed or repaired.

h. Water softener equipment, if present, shall be in operable condition and free from

leaks or possible contamination through back flow of sewer or other sources. If not, it shall be removed, repaired or replaced. New equipment shall be installed in accordance with the manufacturer’s instructions.

i. All plumbing fixtures and plumbing appliances shall be free of leaks or shall be

repaired or removed. It is the responsibility of the owner to maintain their appliances in working order.

j. Water heaters shall be in good functional condition and properly installed. See OHRS

Section 3.6.

Conserving water is in the best financial interests of the occupants over the long run as well as in the interest of society and the environment as a whole. Therefore, the HOME Program encourages the use of water and energy conserving fixtures and equipment whenever it is practical. While fixtures may not need to be new to be adequate, they shall be in good usable condition. All new fixtures shall be installed using good workmanship and care shall be taken to adequately seal or caulk carefully wherever appropriate to provide protection from water damage.

5.4 SANITARY DRAINAGE

All fixtures shall be connected to an approved sewage disposal system. The sanitary drainage system consists of the pipes designed to provide adequate circulation of air, exhaust of foul odors, prevent loss of water seals in the traps and assist with the flow of waste out of the building into an approved sewage disposal system. All private septic systems shall be tested to ensure that they are properly and adequately functioning. Unapproved private systems would include pit privies, cesspools, ponds, lakes, streams and rivers. See also OHRS Section 6.7.5. If problems are found, they shall be corrected. New sewage disposal systems shall comply with UPC Chapter 7 and local health department regulations.

5.4.1 INSTALLATION DETAILS All new installations of drainage systems or repairs shall meet all applicable UPC codes and

all preexisting drainage systems shall conform to the following:

a. All drainage system repairs or replacements shall be done with approved fittings that conform to the pipe being used and are in conformity with UPC Section 701 and provide for a smooth drainage flow.

b. All drainage systems shall provide a free flowing waterway and maintain a

continuous slope in accordance with UPC Section 708.

c. All plastic DWV (drain/waste/vent) pipes shall be Schedule #40 ABS-DWV or Schedule #40 PVC-DWV. All other materials shall comply with UPC Section 701.



d. For existing drainage systems, the HOME Program recommends the installation of

cleanouts as stipulated in UPC Section 707 and 719 when feasible. Building drainage systems shall be properly installed, connected & maintained in working

order, free flowing, and free from leakage of water or sewer gases. Some of the causes of leakage are corrosion, poorly made connections, defective materials, settling or moving of the ground, temperature changes, and freezing.

Sizing of drainage systems may be accomplished using UPC Chapter 7. The HOME Program

recommends replacing existing plumbing that has a hodgepodge of different types of piping or fittings or that is ran in an inefficient manner. Waterways should also have smooth interiors and maintain a ¼ inch per foot slope, where feasible.

5.4.2 TRAPS All fixtures shall be trapped and all traps shall conform to the following specifications:

a. All waste outlets shall be separately trapped by a water seal trap as near to the fixture as possible, but in no case more than 24 inches from the fixture in compliance with UPC Section 90.5 and 1001.4.

b. Per UPC Section 1005, all plumbing fixtures must be trapped with a water seal not

less than 2 inches or more than 4 inches and all traps shall be set level with respect to their water seals and shall be protected from frost and freezing weather.

c. Traps shall be of standard design and self-cleaning per UPC Section 1003. Bell traps,

“S” traps and Drum traps are prohibited as noted in UPC Section 1004.

d. Fixture trap size shall be sufficient to drain the fixture rapidly and in no case less than nor more than one (1) pipe size larger than given in UPC Table 7-3. The trap shall be the same size as the trap arm to which it is connected.

The purpose of traps is to prevent sewer gases from entering the house. This is accomplished

by a water seal in the traps through which the sewer gases cannot pass. 5.4.3 VENTS Plumbing systems shall be designed with vents to protect against siphonage and backpressure

and to allow waste to adequately drain into an approved sewer system. All new installations of vents shall meet the requirements of UPC Chapter 9. Existing plumbing systems should be made to comply with UPC Chapter 9 whenever possible.

The HOME Program does not recommend the use of air admittance valves due to their

potential to wear out and allow toxic sewer gases into the residence. The HOME Program recommends that all existing vent extensions through the roof be enlarged to 3” or greater to prevent freezing.

CHAPTER SIX

ENVIRONMENT 6.1 PREMISES CONDITION Each inhabited building and the property on which it is located shall provide a safe, sanitary

and satisfactory environment for the occupant(s) and the neighborhood. Although rehabilitation must focus on correcting the dwelling’s substandard conditions, the

opportunity for eliminating the unsanitary, unsafe and unsightly conditions on the property surrounding the dwelling should not be overlooked. The condition of the property should be considered as part of a comprehensive approach to rehabilitation. Property left in poor condition can, decrease the effectiveness of the rehabilitation work done to the home and reduce the impact of the rehabilitation on the neighborhood. For example, improper site drainage can continue to cause erosion and moisture damage to the home and excessive rubbish can continue to stifle neighborhood revitalization.

However, because rehabilitation funds are limited, the HOME Program recognizes that not all

substandard premises conditions can be eliminated. Therefore, Grantees should prioritize the correction of substandard premises conditions to those that most directly affect the health and safety of the occupants and the structural integrity of the dwelling. For example, a decayed tree leaning over the home should be removed while a deteriorated patch of the driveway may be ignored.

The HOME Program encourages Grantees to establish policies regarding owner responsibilities

to remove blighted conditions prior to rehabilitation and to maintain the premises in a blight-free condition after rehabilitation. For example, depending upon the owner’s ability, Grantees may require owners to clear the property of accumulated rubbish, motor vehicles and other unsanitary or unsightly conditions prior to receiving financial assistance.

6.1.1 UNATTACHED GARAGES Unattached garages shall be free of hazards to the occupant’s health and safety. Existing

electrical wiring, fixtures and receptacles shall be safely and properly installed. Accessory structures cannot be rehabilitated to the same extent as dwellings. However,

conditions that are hazardous to the health and safety of the occupants shall be corrected. For example, electrical wiring existing in a garage that is hazardous shall be repaired to conform to the appropriate section of NEC, or the unsafe wiring shall be removed.

Unattached garages that significantly detract from the overall appearance of the property or

neighborhood may be repaired, provided the repairs are minimal in cost and incidental to the rehabilitation of the dwelling.

If repairs to correct deteriorated structural conditions are done, the repairs shall be minimal but

sufficient to restore adequate structural integrity and appearance. Grantees may demolish unsafe and non-repairable accessory structures if deemed necessary by the Grantee.


6.1.2 DRAINAGE Where feasible, the premises shall be free from large or deep depressions that routinely collect

stagnant water and free from improper grading that causes erosion. This section addresses grading and drainage that is not adjacent to the dwelling foundation. Foundation area drainage is addressed in OHRS Section 2.1.5.

6.1.3 PAVED SURFACES Sidewalks, driveways, patios and other paved surfaces on the premises shall be free from

hazards that can cause tripping and falling. Paved surfaces adjacent to the foundation shall not slope towards the structure so that water collects or drains towards the foundation.

Paved surfaces may be repaired, provided that the repairs are minimal in cost and incidental to

the rehabilitation of the dwelling. The repairs should be sufficient to remedy the problem. Paved surfaces that are deteriorated but do not present a hazard or a drainage problem should not be repaired.

6.1.4 RUBBISH AND GARBAGE The premises and the dwelling shall be free from excessive accumulations of garbage that

present health and safety hazards to the occupant or to the persons employed by the rehabilitation program.

An excessive accumulation of garbage is a clear health and safety problem. It is a problem not

only for the occupant (and perhaps the neighborhood), but also for the rehabilitation program. A cluttered premises can make inspect ions and rehabilitation work more difficult and dangerous. The HOME Program recommends that accumulations of rubbish and garbage be removed from the exterior premises and from the interior of the dwelling prior to rehabilitation.

If the owner has the ability to remove the rubbish, Grantees may require the removal of the

accumulated rubbish as a condition for participating in the rehabilitation program. In addition, Grantees should inform the owner of the need to maintain safe and sanitary premises.

6.1.5 EXTERMINATION OF VERMIN AND INSECTS The premises shall be free from infestations of vermin and/or wood-boring insects. Inspections

shall be performed by qualified persons prior to rehabilitation. Untreated infestations can have serious long term adverse affects on the rehabilitation

investment in the home. Not only is the habitability of the home threatened, but, as is the case with wood-boring insects, such as termites, the structural integrity of the home can also be at risk. Therefore, an inspection should be conducted and, if there is evidence of an infestation, professional treatment must be performed. After extermination, proper precautions should be taken to prevent reinfestation.

6.1.6 TREES AND SHRUBS The premises shall be free from trees and shrubs that are damaging the dwelling.


Trees or shrubs that are growing up against the dwelling or its foundation can cause

considerable damage. Roots can split and crack foundation materials and branches can wear on siding, roofing and gutter materials. When damage is evident, the cause should be removed. This may mean simply removing the part of the tree that is contacting the home or, in more severe instances, removing the tree altogether. When the potential for damage exists, such as when a large dead tree branch is leaning over the home, Grantees may remove the potential hazard at their option.

6.2 LIGHTING AND VENTILATION 6.2.1 ARTIFICIAL LIGHTING (ELECTRIC LIGHTING) All habitable rooms (i.e. rooms for living, sleeping, eating or cooking), all occupiable spaces

(including; bathrooms, toilet rooms, stairways, hallways, storage and utility rooms, and spaces containing appliances or equipment requiring safe operation and maintenance), and all exterior entrances shall be provided with electric light. Illumination shall be appropriate to the purpose of the room and sufficient to meet the needs of the occupant. Interior and exterior stairway illumination shall comply with IRC Section R303.6.

Although many rooms have windows, natural light is not sufficient by itself. In order to provide

sufficient light for routine household tasks and for safe movement within the home, the HOME Program is requiring electric light sources in all spaces that are routinely used by the occupant and that contain equipment that must be maintained. This means that electric light must be provided to living rooms, bathrooms, kitchens, bedrooms, hallways, stairways, exterior entrances, utility rooms, laundry rooms, storage rooms, and spaces such as basements, crawlspaces and attics that contain furnaces, water heaters and other equipment. For specific electrical wiring and fixture requirements, see OHRS Sections 4.3, 4.5 and OHRS Appendix F.

The placement of light fixtures and the amount of light each fixture provides is important,

however, except for interior and exterior stairways, the HOME Program has not set specific illumination standards. Instead, the light source should be located and provide enough illumination so that the occupant can perform tasks and move about safely. In areas where illumination is required for long periods of time, such as outdoor security lights, hallways and stairways, the HOME Program recommends installing energy efficient hard-wired fixtures and lamps (e.g. compact fluorescent type lighting). For exterior installations, the HOME Program recommends energy efficient lamps and photo-electrically controlled fixtures.

6.2.2 VENTILATION When windows are to be replaced in any habitable rooms (i.e., rooms for living, sleeping,

eating or cooking) during rehabilitation, such room shall have an aggregate glazing area after rehabilitation of not less than 8 percent of the floor area of the room and shall have at least one openable window. The minimum openable area shall not be less than 4% of the floor area. All bathrooms and toilet rooms shall be provided with a means for natural or mechanical ventilation. The HOME Program recommends housing units to be rehabilitated be brought to compliance with IRC Section R303 whenever feasible.


Adequate and controlled movement of air between habitable rooms and the outside is important in order to maintain a healthy environment. In most cases, this can be achieved naturally through opening windows in rooms where people spend the majority of their time. However, in kitchens and bathrooms, where cooking and bathing create excessive amounts of moisture, mechanical ventilation (i.e. a ducted power vent fan) may be a necessary alternative.

For specific standards on windows, see OHRS Section 2.4. For specific standards on

mechanical ventilation devices, see OHRS Section 2.8.1 and OHRS Appendix F. 6.3 HABITABLE SPACES 6.3.1 KITCHENS Each dwelling shall have adequate space for food preparation and storage, including space for a

refrigerator, a range/stove/oven, a sink plumbed with hot and cold water, an adequate number of cabinets and an adequate amount of counter top surface. Cooking equipment must be safe and properly connected to the fuel supply.

At a minimum, kitchen spaces must be functional and adequate for the purpose of storing food

and utensils and for preparing meals. This means that each kitchen space must have a fully plumbed sink, enough cabinets and counter top to store items and prepare meals, space for refrigeration and space for cooking equipment.

Cooking equipment, especially gas-fired ranges and stove tops, must be installed properly. To

improve indoor air quality, the HOME Program recommends installing a power vent fan (ducted directly to the outside) above gas-fired ranges and stove tops. In addition, the condition of the sink, cabinets, counter tops, floor, wall and ceiling surfaces must be functional, structurally sound and able to be maintained in a sanitary manner. Repairing deteriorated, but otherwise functional, cabinets is preferred over replacement.

The HOME Program has not set standards regarding the placement of appliances, the minimum

number of cabinets or the minimum amount of counter top area. The HOME Program expects Grantees to determine the adequacy of a kitchen’s design and function based on the existing conditions and the characteristics of the household. However, as a guideline, the HOME Program recommends the following: 40 sq. ft. of cabinet shelving, 10 sq. ft. of drawer space and 15 sq. ft. of counter top space per kitchen. For specific standards on interior floor, wall and ceiling coverings, see OHRS Sections 2.22 and 2.33. For specific standards on electrical systems, see OHRS Chapter 4 and OHRS Appendix F. For specific standards on plumbing systems, see OHRS Chapter 5.

6.3.2 BEDROOMS Each dwelling unit shall have the number of bedrooms (i.e. sleeping rooms) sufficient to

provide the occupants with privacy. When feasible, bedrooms shall be arranged so that persons do not have to pass through one bedroom to enter another bedroom or another habitable space. Kitchens and unhabitable spaces shall not be used as bedrooms. Each bedroom or sleeping area shall have a means of emergency egress as required in OHRS Section 6.6.1.


Private and safe sleeping rooms are Important for the physical health and psychological well-being of the occupants. Therefore, bedrooms must be located in safe habitable areas and there should be enough bedrooms with separate entrances to provide adequate privacy to the occupants. Safety and comfort are critical concerns where bedrooms are located below grade or in basements. Therefore, each below grade or basement bedroom must meet the requirements of the appropriate structural, electrical and environmental sections of the OHRS. For example, the bedroom must have adequate heat, headroom and ventilation, and be free from excessive moisture. If fuel burning equipment is also located in the basement, the equipment shall be located and installed to conform to the appropriate section of OHRS Chapter 3.

The HOME Program has not set a standard for the number of bedrooms required per number of

occupants. Instead, the HOME Program recommends that Grantees use, where feasible, the standard of one bedrooms for every two persons.

6.3.3 LIVING ROOMS, DINING ROOMS AND OTHER HABITABLE SPACES Rooms routinely used for living shall meet the appropriate standards outlined in the structural,

electrical and environmental sections of the OHRS. Although most dwellings have space designated for more than cooking and sleeping, the

HOME Program has not established a standard for the number or type of habitable spaces required for each dwelling unit.

In other words, the HOME Program is not requiring that dwellings have living rooms and

dining rooms, etc. Existing homes have the number of habitable rooms they have and the HOME Program is not requiring additional habitable rooms. Instead, the appropriate structural, electrical and environmental standards shall apply for those rooms the occupants normally inhabit for the purpose of living in the unit.

6.4 OCCUPIABLE SPACES 6.4.1 BATHROOM/TOILET ROOM Each dwelling shall contain adequate and private space designated for bathing and for the

elimination of bodily wastes. Each space designated for bathing shall contain a safe functional bathtub, shower or combination bathtub/shower plumbing fixture. Each space designated for waste elimination shall contain a safe and functional water closet and lavatory plumbing fixture. Where feasible, bathrooms shall not be located so as to provide the only passageway to a hall, other space or to the exterior.

Safe, functional and private bathing and toilet facilities are required. In most single-family

dwellings, the bathroom and the toilet room are combined so that the bathing, plumbing fixtures and the toilet plumbing fixtures are contained in the same room.

However, where they are separate, a lavatory (for hand washing) must be located in or adjacent

to the room containing the toilet. Exterior located toilet rooms (i.e. outhouses) are unacceptable and must be replaced with plumbing facilities located within the dwelling.


The size and number of bathrooms/toilet rooms and the configuration of the plumbing fixtures should be adequate to the needs of the household. Fixtures should be placed so that they can be used safely and be maintained in a sanitary manner. When an occupant is handicapped or disabled, the location and configuration of the bathroom/toilet room and its plumbing fixtures should comply with the applicable construction standards in the Uniform Federal Accessibility Standards. When an occupant is elderly and/or frail, the HOME Program recommends installing grab bars (properly secured to reinforced wall supports), easily operable faucets (i.e. faucets that do not require tight grasping, pinching or twisting of the wrist) and plumbing fixtures designed to accommodate accessibility.

For standards regarding bathroom/toilet room floor wall and ceiling surfaces and coverings, see

OHRS Sections 2.2.2 and 2.3.3. For standards regarding electrical fixtures and receptacles, see OHRS Sections 4.4 and 4.5 and OHRS Appendix F. For standards regarding plumbing lines and fixtures, see OHRS Chapter 5.

6.4.2 STORAGE AND UTILITY ROOMS Storage and utility rooms shall meet the appropriate standards outlined in the structural,

electrical and environmental sections of the OHRS. Because most dwellings have adequate space designated for storage (e.g. cabinets, closets,

basement, attic, etc.), the HOME Program has not established a standard for the amount of storage space a dwelling should contain.

However, in cases where the amount of storage space is clearly inadequate and problematic for

the household, adding storage space within the existing dwelling (e.g. installing shelves, adding cabinets, constructing a closet, etc.) is acceptable rehabilitation practice. Regarding rehabilitation of existing closets and utility rooms, the standards outlined in the OHRS for the electrical system and for the structural system, including wall, ceiling and floor coverings apply. However, as noted in OHRS Section 1.8, minor substandard conditions, which do not present a problem, may be left uncorrected.

6.5 ACCESSIBILITY Rehabilitation measures specifically intended to improve accessibility shall meet the

construction requirements outlined in the applicable sections of the Uniform Federal Accessibility Standards (UFAS).

Making a home safer and more accessible for handicapped or disabled persons is a desirable

benefit of rehabilitation. UFAS does not apply to privately-owned homes, even when the purchase or rehabilitation of such a home is federally-funded. However, the HOME Program has cited the UFAS for the purpose of establishing the construction standard for specific accessibility measures that may be needed in a specific dwelling. For example, if an entrance ramp is needed, UFAS Section 4.8 describes the most appropriate construction standards for such a project.


6.6 FIRE SAFETY 6.6.1 EGRESS All dwellings shall provide a safe, continuous and unobstructed exit from the interior directly to

the outside. The exit path shall not pass through other dwellings or rooms within the dwelling that are likely to be locked, such as bathrooms, toilet rooms or bedrooms. Egress doors shall be easily openable from the inside without the need for keys. Each bedroom or sleeping area shall have a means of emergency egress provided by a window or a door. If provided by a window, at least one window shall be openable, large enough to allow passage and without security bars or grilles which must be unlocked with keys or removed from the exterior. Emergency escape exits shall be provided for bedrooms or sleeping areas located in basements as required by IRC Section R310.

6.6.2 SMOKE DETECTORS Each dwelling shall have smoke detection devices located and installed as required in OHRS

Section 4.1.7. All smoke detectors shall be approved and listed by a recognized independent testing laboratory and placed as directed by the manufacturer.

Smoke detectors provide an effective early warning of a fire and therefore greatly improve the

chances of escape. Accordingly, the HOME Program is requiring functioning smoke detectors in each rehabilitated dwelling. At a minimum, the following is required: 1) at least one smoke detector must be located outside and in the immediate vicinity of bedrooms or sleeping areas; 2) at least one smoke detector must be located on each additional story, except for crawlspaces and uninhabitable attics; and 3) all smoke detectors must be connected to the dwelling electrical wiring system and be installed without disconnecting switches (other than standard over-current protection devices).

Locating hard-wired smoke detectors near sleeping areas and on each additional floor should

provide adequate warning in most instances. However, if protection that is more thorough is needed, the HOME Program recommends the following additional practices: 1) install one smoke detector inside each bedroom or sleeping area; 2) wire the detectors in series; and 3) connect the detector circuit into to a circuit, which if tripped, will be noticed immediately by the occupants. These three additional steps should be considered if the occupant’s lifestyle suggests a greater potential for fire (e.g. smoking, use of open flames) or if the egress from the dwelling is difficult.

6.6.3 STORED FLAMMABLE MATERIALS Flammable materials (e.g. paint, solvent fluids, paper, rags, etc.) shall not be stored or

accumulated in an unsafe or unapproved manner while the rehabilitation is in progress. Safe housekeeping practices for flammable materials, particularly volatile combustible liquids,

are an important fire prevention strategy. If such materials are stored inside the dwelling, they must not be stored near ranges, stoves, fireplaces or fuel-fired furnaces and water heaters. Because this standard may not be adhered to by the occupant after the rehabilitation is completed, the HOME Program encourages Grantees to educate occupants about the hazards of improperly stored flammable materials.


6.6.4 FOAM PLASTIC, FLAME SPREAD AND SMOKE DENSITY Foam plastic materials, wall and ceiling finish materials and insulation materials that are

installed with financial assistance from the rehabilitation program shall meet the requirements of IRC Sections 314, 318, and 702.

IRC Section R315, which cites the requirements for ignition, flame spread and smoke

generation of new materials, applies only to the materials installed by the rehabilitation program. It does not apply to foam plastics, interior finishes and insulation that exist in the home prior to rehabilitation and remain in the home after rehabilitation.

6.7 OCCUPANT HEALTH 6.7.1 LEAD-BASED PAINT HAZARDS All rehabilitation projects shall comply with applicable current federal, state and local

regulations and laws. Reducing lead contamination levels, especially in the homes occupied by people most at risk of

poisoning (i.e. households with children aged 6 or younger and/or pregnant women), will significantly improve the occupant’s environment and health. Where a lead hazard or a lead poisoning case is known to exist or where otherwise required by federal, state and local regulation or law, the rehabilitation work must include measures and strategies to reduce the hazards.

In such cases, the hazard reduction portion of the rehabilitation work must follow the

requirements presented in Chapter 2 of the HOME Administration Manual. Where no known lead hazard exists, the HOME Program and HUD requires that rehabilitation

work, which disturbs suspected lead-based paint surfaces in a home built before 1978 and is occupied by at risk persons, should be performed in a “lead-safe” manner and clearance tested following the rehabilitation, as described in Chapter 2 of the HOME Administration Manual. If a home built before 1978 is inspected by an EPA-certified Lead Inspector or Risk Assessor and found free of lead-based paint, the rehabilitation is not required to comply with “lead-safe” work practices or pass a clearance test following rehabilitation.

6.7.2 ASBESTOS All work to remove, contain or encapsulate asbestos shall comply with applicable federal, state

and local regulations and laws.

Asbestos abatement may not be required for a homeowner-occupied rehabilitation if the asbestos containing material is nonfriable (cannot be crumbled, pulverized or reduced to a powder by hand pressure) or will not be disturbed during rehabilitation. However, if nonfriable asbestos containing material is disturbed during rehabilitation, it must be abated. For example, rehabilitation work could include replacing warm-air heating ducts or hydronic heating pipes wrapped in asbestos containing materials. In such cases, the removal of the asbestos containing material must be done properly by a trained asbestos contractor and in accordance with


applicable regulations and law. In cases where the asbestos containing material is not to be disturbed by rehabilitation, the HOME Program recommends that it be left alone. If the rehabilitation involves any type of asbestos abatement, contact the Montana Department of Environmental Quality Asbestos Control Program for further guidance.

6.7.3 INDOOR AIR QUALITY The dwelling shall be free of known pollutants that exist at levels that threaten the health of the

occupants. Any home (old or new) can have indoor air quality problems. Though diagnosing an air quality

problem can be difficult, the health benefits gained from correcting it can be substantial. Therefore, when an air quality problem is suspected, the cause must be investigated so that measures designed to correct or mitigate the problem can be built into the rehabilitation scope of work. At a minimum, the HOME Program recommends that further actions be taken where any of the following conditions exist:

a. Where the condition, type or location of the fuel-burning equipment or the vent system

can allow carbon monoxide (CO) and other combustion by-products to enter the home. Examples of such conditions include; use of unvented appliances, a cracked heat exchanger, leaks in the vent system, a plugged vent or chimney flue, back-drafting due to inadequate draft or competition between appliances located in confined spaces.

b. Where unsealed forced-air heating system return ducts pass through areas that may

draw moisture, CO or other pollutants into the home.

c. Where excessive moisture, mold or mildew is present.

d. Where the lack of plumbing vents or traps allow sewer gas to enter the home.

However, some conditions are less obvious. In fact, some conditions may not become problems until after the rehabilitation is completed. Rehabilitation can exacerbate a latent air quality problem because the balance between the structure, the mechanical systems and the occupant’s use of the home was changed. For example, a home can develop a moisture problem (and mold growth) because the amount of uncontrolled air movement has been significantly reduced but the source of the moisture problem was not identified and corrected.

Some air quality problems can result from the materials installed during rehabilitation. For

example, new floor coverings, paint, adhesives, etc. will “out-gas” volatile organic compounds (VOCs). Though the air quality should only be temporary effected, some occupants may suffer adverse symptoms.

Some air quality problems can result from the occupant’s behavior. For example, occupants

may not use the ventilation fans when bathing or cooking, or they may-have behaviors that produce high levels of airborne pollutants (e.g. smoking, using portable kerosene heaters, etc.). The HOME Program recommends that Grantees educate occupants about the air quality problems their behavior may cause. In addition, to provide an early warning against CO poisoning, the HOME Program recommends the installation of CO detectors. CO detectors shall be approved by an independent laboratory, receive their primary power from the


building’s electrical wiring (e.g. plug into a receptacle) and installed according to the manufacturer’s installation instructions.

6.7.4 WATER SUPPLY

All dwellings shall have adequate, safe and potable water supplied through a safe plumbing system to all fixtures. Water drawn from private sources (privately owned wells) shall be tested by a local health department, or other qualified source, to determine the bacterial content prior to beginning the rehabilitation work.

A safe and adequate supply of potable water for drinking, cooking and bathing is essential to occupant health. This includes having both hot and cold water available at sufficient pressure at all sinks, lavatories, bath tubs and showers. To ensure that a private water supply system is safe, it must be tested for bacterial contamination, preferably by a local health department. If the water is unsafe and the occupants use the water in ways that threaten their health, a safe supply of water must be available before the rehabilitation can begin. For water supply system standards, see OHRS Section 5.2.

6.7.5 SANITARY DRAINAGE

All plumbing fixtures (e.g. sink lavatory, bathtub, shower, toilet, etc.) and all other plumbing appliances (e.g. dishwasher, clothes washing machine, etc.) shall be properly connected either to a public sanitary drainage system or to an approved private sanitary drainage system. Private sanitary drainage systems shall be inspected to ensure that they are properly and adequately functioning.

Safe disposal of household liquid and solid waste is critical to a healthy environment. A sanitary drainage system that leaks waste or sewer gas into the home or that discharges untreated waste directly into the environment is a source of disease and illness. Therefore, a close inspection of the sanitary drainage system is very important.

At a minimum, an inspection should look for leaks, improperly installed materials, improperly connected materials, improper repairs, improper venting, missing traps, missing cleanouts and improper supports. For sanitary drainage system standards, see OHRS Section 5.4.

6.8 HISTORIC PRESERVATION

The rehabilitation of dwellings subject to the Section 106 Review Process of 36 CFR Part 800 shall comply with the findings and recommendations issued by the Montana State Historic Preservation Office (SHPO).

Rehabilitating older dwellings that may have historic or architectural significance requires special coordination with the SHPO. As a result, the SHPO may require the rehabilitation scope of the work to preserve or protect the historic character of the structure. In such cases, the HOME Program expects Grantees to follow the guidelines that the SHPO may require. For guidance on what materials and measures are and are not recommended, see the U.S. Department of the Interior’s “Standards for Rehabilitation” and “Guidelines for Rehabilitating Historic Buildings” (on the web at: http://www.cr.nps.gov/hps/tps/tax/rhb/stand.htm) and contact the Montana SHPO.



6.9 FLOODPLAIN MANAGEMENT The rehabilitation of dwellings located on a floodplain shall comply with applicable federal,

state and local regulations and laws. The rehabilitation of dwellings located on a floodplain in jurisdictions participating in the Flood Protection Management System shall comply with the applicable Federal Emergency Management Agency regulations.

The proximity of a dwelling to rivers and streams that are known to periodically flood can have

a significant impact on the extent and the type of rehabilitation work that can be done. Therefore, Grantees must determine if a dwelling is at risk and follow the appropriate guidelines.

The floodplain management guidelines may, on the one hand, limit the type of work that may

be done and, on the other hand, specify certain floodproofing items that must be done. Rehabilitating dwellings in jurisdictions participating in the Flood Protection Management

System requires using special materials and methods not normally employed in areas not prone to flooding. Adherence to the additional construction standards is important to protect the dwelling against flood damage and to maintain the community’s eligibility to participate in the National Flood Insurance Program.

Examples of special construction standards include: anchoring structures to prevent movement,

raising utility services and mechanical system equipment above flood levels, protecting water and sewer systems against contamination and using water impermeable materials when possible.

Where floodproofing an existing home is not economically or physically possible,

consideration should be given to alternative housing assistance such as relocating the household to an appropriate site or constructing a new approved structure on the site.

For information regarding floodplain management requirements, the HOME Program

recommends contacting the Montana Department of Natural Resources and Conservation and/or the Federal Emergency Management Agency.

APPENDIX A

GUIDELINES FOR CALCULATING HEATING LOAD Selecting the proper size heating equipment can be an important factor to help minimize fuel usage and to ensure a comfortable environment. The first step in the selection process is calculating the home’s heating load. The heating load calculations will determine the output or “size” requirement for the equipment. There are several methodologies for calculating load. Some are more sophisticated and exact than others. The HOME Program recommends using the ASHRAE Handbook of Fundamentals or another recognized valid method. At a minimum, heating load calculations must be consistent with the steps outlined in this guideline. The following information must be known and collected in order to complete the steps: 1. The R-value (measurement of heat flow resistance) of the materials comprising the building

shell component -walls, windows, ceilings and floors, etc. Note: R- values must be based on post-rehabilitation conditions. In other words, if insulation is planned, then the increased R-value must be used.

2. The U-value (measurement of heat flow) of the materials comprising the building shell

component. U-value is the reciprocal of R-value and represents the number of BTUs per hour per square foot flowing through the material.

3. The square foot area for each building shell component 4. The design temperature for the locality. Design temperature is that temperature equaled or

exceeded 97.5% of the time during December, January and February. 5. The amount of air moving through the building, or the general condition of the building and

number of people living there. STEP 1: Calculating Heat Load by Transmission

Complete the formula: U x A x T = q

Where: U = the U-value of the building component (BTUs/hr/sq.ft.)

A = the Area of the building component (sq.ft.) T = the Temperature difference (65 F minus the design temp.) q = the total amount of transmission heat load (BTUs/hr)

a. For a building shell component, multiply its U-value times its total surface area times

the temperature difference (i.e. difference between 65 F and outside design temperature). The result is the number of BTUs per hour per square foot flowing through that component.

b. Repeat the calculation for each component.

c. Add the results to find the total number of BTUs per hour per square foot flowing through all components.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: A-1 March 2010

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: A-2 March 2010

STEP 2: Calculating Heat Load by Air Movement

Complete the formula: 0.018 x F x T = q Where: 0.018 = the air heating capacity in BTUs/cu. ft./1 degree F (This is a constant)

F = the number of cu.ft. of air flowing per hour T = the temperature difference (65 f minus the design temperature) q = the total amount of air exchange heat load (BTUs/hr)

a. Measure or estimate the number of cubic feet of air that moves through the building per hour. This can be measured by a blower door; however, most heating load calculation forms estimate this based on the construction and condition of the home. The minimum air exchange rate should meet ASHRAE’s standard of 15 cubic feet per minute (or 900 cfm/hr) per occupant or 0.35 air changes per hour.

b. Multiply the air flow rate times 0.018. This is the heat capacity of air (0.018 BTUs per

cubic foot per 1 degree F). c. Multiply the result by temperature difference as in Step 1. The result is the total number

of BTUs per hour flowing through the building by air movement.

STEP 3: Calculating Heating Equipment Output and Input

a. Add the results of Step 1 and Step 2. Combining the transmission load and the air exchange load provides the total heating load for the building. This is the number of BTUs/hr that required to heat the building to the design temperature for the climate in which it is located. This is also the output rating required for the heating equipment. In other words, the heating equipment selected to heat the building must provide (output) at least that many BTUs/hr of heat to the distribution system.

b. Divide the output rating by the heating equipment AFUE %. The result is the input rating for the heating equipment. This is the “size” of the equipment required to provide the required amount of heat to the building. In other words, the selected heating equipment must be able to produce (input) that amount of BTUs/hr and, based on its AFUE (output), provide the required amount of BTUs/hr to heat the building. Note that the higher the AFUE, the more efficiently the equipment converts the heat that is generated by combustion into heat that is delivered to the distribution system.

APPENDIX B

GUIDELINES FOR COMPARING HEATING EQUIPMENT OPERATING COSTS AND CALCULATING PAYBACK

Once the right “size” heating equipment is determined, the next important step towards ensuring efficiency and affordability is selecting a cost effective model. This guideline, which is based on the procedure outlined in the GAMA Consumer’s Directory of Certified Energy Ratings, is intended to help in the selection process. It is useful in comparing the fuel consumption operating costs of models using the same type of fuel or a different type of fuel. In order to complete the steps, several things must be known: 1. The Design Heating Requirement (DHR). This is the BTU/hr heating load for the building (as

calculated in Appendix A). 2. The Heating Load Hours (HLH). This is the number of hours per year that the equipment is

expected to operate. For most of Montana, there are 2,500 HLH. Parts of extreme northern Montana have 3,000 HLH.

3. The BTU/hr input rating and the AFUE of the various equipment models to be compared. This

is published by GAMA for those manufacturers participating in the certification program. 4. The BTU content of the fuel. The BTU content of the following fuels is:

Natural gas 1,000 BTUs per cu./ft. or 1,000,000 BTUs per therm Propane 92,000 BTUs per gal Fuel Oil 139,000 BTUs per gal Electricity 3,413 BTUs per kwh

5. The cost of the fuel. This should be readily available from the utility or fuel supplier. STEP 1: Calculating the Equipment Operating Hours Complete the formula: .77 x HLH x DHR/1,000 x A = Operating Hours Where: 77 = the adjustment factor constant recommended by the US DOE

HLH = the Heating Load Hours for the locality DHR/1000 = the Design Heating Requirement divided by 1,000 A = 100,000 divided by the result of multiplying the equipment’s BTU/hr input rating by the equipment’s AFUE %.

STEP 2: Calculating the Estimated Annual Energy Consumption (EAEC) Multiply the equipment’s BTU/hr input rating times the number of operating hours from Step

1.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: C-1 March 2010


STEP 3: Calculating the Estimated Annual Operating Cost (EAOC) Complete the formula: EAEC x (1/fuel BTU content) x fuel cost = EAOC

Where: EAEC = the result of Step 2 BTU content = the number of BTUs per unit of fuel (gal., therm, kwh, etc.) Fuel cost = dollars or cents per unit of fuel (dollars per gal., cents per therm, etc.)

STEP 4: Repeat the above three steps for each model or fuel type for the heating equipment

being considered. After the EAOC for each model or fuel type has been calculated, the results can be compared to determine which is the most cost-effective.

STEP 5: Calculating Payback

a. Subtract the additional cost of installing the higher AFUE equipment from the cost of installing the lower AFUE equipment. This is the amount of additional cost required to buy and install the more efficient equipment.

b. Subtract the EAOC of the higher AFUE equipment from the EAOC of the lower AFUE

equipment. This is amount of money the higher AFUE will save each year of operation over the cost of the lower AFUE equipment.

c. Divide the annual savings (from 5b) into the additional cost (from 5a). The result is the

number of years before the savings generated by the higher AFUE equipment will off-get the increased cost of installing the higher AFUE equipment. After that time, the savings will accrue to the owner.

APPENDIX C

TABLES FOR ACCEPTABLE FLUE GAS MEASUREMENTS

Measuring the flue gas for content and temperature is a direct means of determining the equipment’s combustion performance. Measurements that are within the ranges listed below indicate that the equipment is operating acceptably per industry standards as accepted by ANSI. Measurements that are outside of these ranges indicate that combustion is less than optimal and that adjustments are needed.

FLUE GAS MEASUREMENTS FOR SPACE HEATING EQUIPMENT

Heating Equipment Type Oxygen (O2) Net Stack

Temperature Smoke

Test

Carbon Monoxide (CO) max

ppm Gas Atmospheric 4% - 9% 300F – 600F N/A 100 ppm Gas Fan Assisted 4% - 9% 300F – 480F N/A 100 ppm

Space Heater 5% - 15% 300F – 650F N/A 100 ppm Gas Power Burner 4% - 9% 275F – 550F N/A 100 ppm

Oil Standard Burner 4% - 9% 325F – 600F 1 or less 100 ppm Oil Flame Retention 4% - 7%, or CO2 11% + 325F – 600F 1 or less 100 ppm

ppm = parts per million As with space heating equipment, measuring the flue gas content and temperature of water heaters is a means of determining the equipment’s combustion performance. Measurements that are within the ranges listed below indicate acceptable performance per industry standards as accepted by ANSI. Measurements that are outside of these ranges indicate that combustion is less than optimal and that adjustments are needed.

FLUE GAS MEASUREMENTS FOR WATER HEATING EQUIPMENT

DHW Unit Type Oxygen (O2) Net Stack

Temperature Smoke

Test

Carbon Monoxide (CO) max

ppm Gas (natural gas, propane,

atmospheric) 4% - 9% 300F – 600F N/A 100 ppm

Fan Assisted 4% - 9% 300F – 480F N/A 100 ppm Oil Standard Burner 4% - 9% 325F – 600F 1 or less 100 ppm Oil Flame Retention 4% - 7% 325F – 600F 1 or less 100 ppm

ppm = parts per million


APPENDIX D

CALCULATIONS FOR DETERMINING SEASONAL HEAT LOSS AND PAYBACK

This appendix is intended to provide a mechanism for determining the cost-effectiveness of installing insulation in cases when there is doubt. In most cases, insulation is cost-effective and the OHRS has set standards for attic, wall and floor R-values. However, there may be instances when the cost-effectiveness of adding insulation is not clear; for example, there may be a question whether adding more insulation to an already insulated space is economically worthwhile, or the same doubt may exist when any one of a number of factors exist, such as: low fuel cost, high installation cost, small area, etc. Several things must be known before the calculation can be completed: 1. The R-value (measurement of heat flow resistance) of the materials in the area in question; 2. The U-value (measurement of heat flow) of the materials in the area in question. U-value is the

reciprocal of R-value and represents the number of BTUs/hr/sq. ft. flowing through the material;

3. The Heating Degree Days (HDD) for the locality. HDDs represent the number days the outdoor

temperature is below 65 F times the number of degrees difference, between 65 F and the actual outdoor temperature. HDDs are generally averaged, over 30 years and are available for large cities. For Montana, Billings has approximately 7,164 HDDs, Glasgow approximately 8,745 HDDs, Great Falls approximately 7,741 HDDs, Helena approximately 8,031 HDDS, Kalispell approximately 8,378 HDDs and Missoula approximately 7,792 HDDs;

4. The size (square foot area) of the area in question; and 5. The cost of the fuel per unit (dollars per gal, cents per therm, cents per kwh, etc.) STEP 1: Calculating Seasonal Heat Loss Without Insulation Complete the formula: U x A x T x 24 = Q Where: U = the U-value of the building materials (BTUs/hr/sq.ft.)

A = the surface area of the building materials (sq.ft.) T = HDDs 24 = the number of hours in one day

Q = the total annual amount of heat loss (Million BTUs or therms) STEP 2: Calculating Seasonal Heat Loss With Insulation Repeat the formula in Step 1 using the U-value that would exist assuming the building

component is insulated.

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STEP 3: Calculating Energy Savings and Dollar Savings

a. Subtract the amount of annual heat loss calculated after insulation (the result of Step 2) from the amount of annual heat loss calculated before insulation (result of Step 1). The result is the amount of energy that will be saved each year (Million BTUs or therms).

b. Multiply the amount of energy saved by its cost. The result is the amount of money that

will be saved each year. STEP 4: Calculating Payback and Annual Return

a. Multiply the cost to install one square foot of insulation by the total number of square feet of area to be insulated. The result is the total cost of the insulation work.

b. Divide the amount of money saved (the result of Step 3, b) into the total cost of the

insulation work (the result of Step 4, a). The result is the number of years it will take for the annual savings achieved by the insulation to off-set the additional cost to install it. After that time, the savings will accrue to the owner.

c. For the annual rate of return, divide the cost of the insulation work by the money saved.

APPENDIX E

GUIDELINES FOR SIZING WATER HEATERS AND CALCULATING PAYBACK

This appendix is offered as a guide for selecting an appliance that will meet the needs of the household efficiently and economically. Two approaches are offered. One approach is to simply use Table 3301.2 in CABO Chapter 33. Table 3301.2 provides recommended water heater storage capacity, BTU/hr input, draw and recovery rates based on the number of bathrooms and bedrooms present in the home A sample portion of the information found in Table 3301.2 is provided below:

DWELLINGS WITH 1 TO 1.5 BATHROOMS Type of Fuel Gas Electric Oil Gas Electric Oil

Number of Bedrooms 2 2 2 3 3 3 Storage (gallons) 30 30 30 30 40 30

Input (BTU/hr or kw) 36,000 3.5 70,000 36,000 4.5 70,000 Draw (gph) 60 44 89 60 58 89

Recovery (gph) 30 14 59 30 18 59 gph = gallons per hour

DWELLINGS WITH 2 TO 2.5 BATHROOMS

Type of Fuel Gas Electric Oil Gas Electric Oil Number of Bedrooms 3 3 3 4 4 4

Storage (gallons) 40 50 30 40 50 30 Input (BTU/hr or kw) 36,000 5.5 70,000 36,000 5.5 70,000

Draw (gph) 70 72 89 72 72 89 Recovery (gph) 30 22 59 32 22 59

gph = gallons per hour Another approach is to use the procedure outlined in the GAMA Consumer’s Directory of Certified Energy Ratings. This approach is more exact in that it considers estimated water usage to determine the right “size” equipment. In addition, it includes methodology for estimating and comparing the operating costs of equipment in order to select the most cost-effective appliance. Before completing the steps, there are several things that must be known: 1. The number of plumbing fixtures in the dwelling 2. The number of occupants in the household and their general use patterns. This is critical in

order to establish the time of day and the frequency that hot water is used. For example, when are baths or showers taken, clothes washed and dishes washed? The purpose of this is to establish the peak demand for the first hour of usage.

3. The Energy Factor (EF) of the models of water heaters being considered for installation. This

information is available in the GAMA directory for those manufacturers participating in the certification program.

4. The cost to install the models of water heaters being considered.

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STEP 1: Estimating Peak Hour Demand (Sizing the Water Heater)

a. Multiply the number of activities using hot water during the busiest hour of the day times the estimated average number of gallons used per activity. Some activities and estimated average usages are: bath/shower, 20 gallons; shaving, 2 gallons; hand/face washing, 4 gallons; shampooing, 4 gallons, hand dishwashing, 4 gallons and automatic clothes washing, 32 gallons.

b. Add the estimated average usages for the first hour. The result is the household’s peak

first hour demand.

c. Select models of water heaters that have a peak first hour demand rating that is close (give or take 2 gallons/hr) to the peak first hour demand for the household. This information is available in the GAMA directory.

STEP 2: Calculating Payback

a. Determine the water heater’s estimated annual operating cost by using the chart provided in the GAMA directory. Find the chart for the appliance’s fuel. Find the column for the appliance’s EF. Find the row for the appropriate fuel cost. Follow the row across to the intersection of the EF column. The result is the appliance’s estimated annual fuel operating cost. Repeat for each model to be considered.

b. Subtract the installation cost of the higher EF model from the installation cost of the

lower EF model. This is the amount of additional costs required to buy and install the higher EF model.

c. Subtract the annual estimated operating cost of the higher EF model from the estimated

annual operating cost of the lower EF model. This is the amount of money the higher EF model will save each year of operation over the lower EF model.

d. Divide the annual savings (from Step 2c) Into the additional costs (from Step 2b). The

result is the number of years before the savings generated by the higher EF model will off-set the increased cost of installing the higher EF model. After that time, the savings will accrue to the owner.

APPENDIX F

SUMMARY OF ELECTRICAL REQUIREMENTS

This appendix is provided as a quick reference for fixture and receptacle location, GFCI receptacle location, mechanical execution of work requirements and a general description of what constitutes the electrical system. It is provided only as a supplement to the requirements outlined in the OHRS, CABO and the NEC. The HOME Program advises Grantees to refer to the codes for a detailed description of the requirements.

ELECTRICAL SYSTEM COMPONENTS

ELECTRIC SERVICE An electric service is required for all buildings containing an electrical system and receiving electrical energy from a utility company. The main electrical power line to your house is called the service. EXTERIOR SERVICE AND METER: From the transformer, the power company brings electricity into a home via overhead wires or underground cables. In most localities the exterior service from the pole to the meter, including the meter and base, belongs to the power company and is maintained by the power company. The overhead wiring that swings from the utility pole to the house is called the service drop or triplex (three wires splice into the service cable). The power company and local inspectors will have specific requirements for the location and placement of the service drop and the point of attachment, therefore, coordination and preplanning will be required to meet these requirements. SERVICE ENTRANCE: The utility’s wires are spliced to the service entrance wires, which are usually encased in metal tubing called conduit, or combined in a thick insulated wire called service entrance (SE) cable. In an overhead service entrance, the utility’s wires may be attached directly to the house with nonconductive insulators (porcelain) or to an approved mast, which is a galvanized pipe that rises above the roof and continues downward to the meter. There should be a weather head/goose neck or service headland loosely draped wires (drip loop). In both types of installation the entrance head is higher than the incoming wires to prevent water from draining into the electrical system. From the service head, the wires pass through the meter, which records the electricity usage, and into the main service panel. The service entrance always ends at the service panel. SERVICE PANEL: The panel board or load center is the distribution point for all electrical power brought into the house. The service panel is also known as the fuse box, circuit breaker panel, main, or service equipment. Branch circuits in the service panel provide power for three types of circuits-20 amp general lighting circuits, 20 amp small appliance circuits, and 20-70 amps for individual appliances or special circuits. Branch circuits are designed to carry only a certain level of amperage. Each circuit is protected at the service panel by an overcurrent protection device, either a fuse or a circuit breaker, which stops the flow of current by tripping or blowing when this rating is exceeded. All new installations of service panels or modifications to existing panels shall conform to NEC Article 230. PREMISES WIRING SYSTEM: The premises wiring system begins at the load end of the service drop (drip loop or service head) or the load end of the underground service lateral and ends at the outlet. This includes interior and exterior wiring, outside branch circuits and feeders installed on or

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between buildings that supply energy to motors, lighting and controls, and signal circuit wiring that are combined or used with any hardware, fittings, and wiring devices that may be temporarily or permanently installed.

SYSTEM INSPECTION RS requires that each electrical system be inspected and evaluated to determine the safety, capacity and convenience needs of the electrical system. In order to determine the scope of work for the written specifications so that the system complies with the NEC and the OHRS, a thorough evaluation must be conducted. The following is a series of questions and statements to guide you in conducting an assessment. These items are meant to serve as a minimum when assessing the condition of housing unit’s electrical system and to determine the need for a complete service upgrade, a total replacement of all interior wiring versus modernizing the system by adding new circuits and outlets to the existing equipment. The HOME Program recommends beginning with an assessment of the exterior wiring and power supply sources because most often the interior wiring has been altered, but the service has not. The assessment of the exterior wiring should answer the following questions: a. Is the service drop a 3-wire system and are the wires properly rated for the location? If not, the

service drop shall be replaced. The service drop shall be a 3-wire system with two insulated hot wires twisted around a bare, stranded, grounded neutral wire. The service conductors shall have adequate mechanical strength and be sized to carry the load without an increase in temperature rise. The wire shall be rated for wet locations such as; TW, RHW, THW or any type wire suitable for a wet location. Two-wire systems which fail to meet grounding requirements, improperly rated service drop wire and services which pass through another building or structure shall be priorities for replacement.

b. Is the service drop clear of traffic, obstructions and hazards? If not, proper clearances should be

created. The service drop should be a minimum of 10 ft. over pedestrian areas, 12 ft. over driveways and/or 18 ft. clearance over public streets. In addition, the wires should be free from obstructions and hazards such as tree limbs.

c. Is the location where the service entrance wires connect to the unit (point of attachment) secure

and weatherproof? If not, the connection shall be made secure and weatherproof. The service entrance wires should be connected to a porcelain insulator that is securely bolted to a solid material, and the cable should be physically protected from the weather (i.e. insulated exterior rated wire, installed in conduit or pipe).

d. Is the service entrance securely attached to the house and properly clear of windows, doorways,

and walkways? If not, the service entrance shall be made secure and clear of hazardous locations. The service entrance should be securely attached 2-3 ft. above the service head with a drip loop, goose neck or mast in a manner to permit water to drain off the service head and not into it. It should be clamped and have a 3 ft. clearance from the sides of doors, porches, decks, balconies and the bottom of windows that open.

e. Is the meter base properly secured and connected to a hub with a watertight connector? Are the

service entrance (SE) cable and the meter base ratings the same amperage? Remember, the


rating of the SE cable, the meter base and the service panel must all match. If not, the meter base shall be made secure, weather tight and of consistent amperage.

f. Is the system properly grounded by a bare copper or green insulated copper ground wire

connected at the panel to a ground rod? Is the grounding connection made to the same grounded conductor at the transformer that supplies the system? If not, the system shall be properly grounded. The electrical system shall be grounded to a metal water pipe, well casing or an 8 metal grounding rod.

The building should be bonded to form a grounding electrode system which 1s two or more

grounding electrodes effectively bonded together such as the service panel and a grounding rod, or a reinforcing rod or a grounding ring. For grounding requirements, see NEC Article 250-81.

g. If an exterior mounted service panel is present, is the panel rated for exterior use and is the

panel weather tight? If not, the service shall be replaced with an exterior rated panel (Type 3-R) or moved to an interior location. Where feasible, the HOME Program recommends relocating exterior mounted service panels to an interior location such as a utility room, enclosed porch or basement.

h. Is exterior wiring properly installed, properly rated and free from hazards? If not, the wiring

shall be made safe. All exposed exterior wiring shall be rated UF sunlight resistance. All exterior receptacles shall be GFCI protected and installed in exterior rated boxes with weather tight covers. Wiring which serves garages and structures attached to the dwelling shall be free from hazards.

After an inspection of the exterior wiring has been conducted and noted, an assessment of the service equipment and related wiring must be done. The HOME Program recommends beginning at the service panel, which is also known as the breaker panel, fuse box, or main. The following items are to be thoroughly noted to assess the safety, capacity and convenience of the system as well as determining the need for replacement of or addition to the existing panel. The assessment of the service equipment should answer the following questions: i. Does the service panel have overcurrent protection devices and a main disconnect? If no main

disconnect exists, there shall be no more than 6 switches or circuit breakers used as disconnecting means. The panel shall be marked “service equipment” with the name of the manufacturer, panel rating and label or listing clearly visible; and shall have circuit breaker or fuse overcurrent protection devices with a clearly marked main disconnect. If not, the panel shall be replaced.

j. Is the service panel rated not to the proper amperage and are all available spaces filled with

fuses or circuit breakers? If so, the panel shall be replaced. Service panels shall be rated at least 100 amps and 120/240 volt single phase with a grounded neutral, and for the same amperage as the meter base and the SE cable. Additional spaces should be available for future expansion.

k. Is the panel in a proper location with adequate clearance and light? If not, the panel shall be

moved or otherwise provided with proper clearance and light. Panels shall be located in dry areas with adequate artificial lighting and at least a 3 ft deep, 30 inch wide and 6 3 ft high working space with room to fully open the panel door. Panels located in bathrooms or in closets


shall be relocated. Panels located on the exterior shall be rated Type 3-R; however, relocation for convenience of the resident is encouraged.

l. Is the panel in good condition, securely attached to the dwelling, and free of obstructions? If

not, the panel shall be properly secured and obstructions removed. Panels shall be securely attached to a wood backing, such as plywood, or recessed between stud wall framing with a cover that securely latches.

The panel shall be free of missing knock out plates and all open slots or spaces shall be

properly sealed. Materials such as paint, plaster, cleaners or abrasives shall not be stored on or in the panel. The space above the panel should be reserved only for related wiring and be free of heating ducts and other obstacles.

m. Are there an adequate number of properly sized and labeled circuits with at least 4 available

full size spaces? If not, the proper number of labeled circuits shall be provided and the panel shall have the capacity for installation of additional circuits for future expansion. The system shall contain at least two 20 amp small appliance circuits, and at least one 15 amp lighting circuit, for each 500 square feet of floor space within the unit. The bathroom and laundry shall each be on a separate 20 amp circuit. Major appliances such as the water heater, range and clothes dryer shall be on an individual dedicated circuit.

n. Does the panel contain overcurrent protection devices that exceed the circuit capacity? For

example, does a 15 amp rated circuit have a 20 amp fuse, or have full size breakers been replaced with tandem (half-size or do all breakers and do these replacements exceed the panel rating? If so, the improper overcurrent protection devices shall be replaced.

o. Are the circuits properly sized to carry the load they serve? If not, the circuits shall be made to

carry the proper load (i.e. #12 wire for a 20 amp circuit, #10 wire for 30 amp circuit, etc.). The wire shall have insulation suitable for the voltage, temperature and location (wet, etc). The wire ampacity rating shall be sufficient to avoid voltage drop over 3% of the branch circuit rating, as noted in NEC Tables 310-16 through 310-19. Circuits, which serve appliances or fixtures for longer than three hour periods, shall not have a load that exceeds 80% of the rated circuit capacity.

p. Is there any evidence of overheating, arcing or failure indicating short-circuits, overloads and

potential for fire (e.g. black marks, scorching, etc. Are the terminals in deteriorated condition or corroded? If so, the source of mal-function, hazard or deterioration shall be corrected and the panel replaced as needed.

q. Is the panel and service properly grounded? If not, proper grounding shall be created. The

ground wire, either bare copper or green insulated copper, shall be connected to the panel’s neutral bus bar. If applicable, the service shall be grounded by a bare copper wire connected to an underground metal cold water pipe or well casing; or to the street side of the meter bonding with a jumper wire clamped on both sides of the meter. Remember, the panel is the “bull’s eye” of grounding and must be properly grounded in an approved manner to complete the circuit and return to ground.

The condition of the interior wiring, as well as the installation methods, is the third step in the

assessment of the electrical system.


If the panel terminals and circuits have been overloaded for long periods of time and wires are

in deteriorated condition with loose connections, chances are the insulation on the concealed wiring might also be deteriorated and unsafe. Inspecting the interior wiring, particularly in attic areas and basements, should give a good indication of the condition of the wiring concealed within the walls, and will permit viewing the installation methods and mechanical execution of work. This should note if non-professional installation is prevalent and assist with assessment of potential hazards. The assessment of the interior wiring should answer the following questions:

r. Is the insulation on the accessible ends of the old wiring brittle? Have cables been improperly

spliced to old knob and tube wiring? Have circuit extensions been made with flexible or zip cord in lieu of permanent wiring?

Has improper splicing (such as without junction boxes) been made in existing cables? If so, the

hazards shall be corrected and wiring should be replaced throughout the unit. Existing premises wiring that has aluminum conductors shall be replaced.

s. Are other non-professional installations or alterations present, such as loose, hanging or

drooping sections of wire (not stapled to joists or run through drilled holes); fixtures hanging by wire rather than being securely connected to walls or ceilings, or joists) wire with cracked or missing insulation (particularly exposed knob and tube wire near loose insulation)’; and wires laying on hot water pipes. Are closet light fixtures open lamp style located in close proximity to flammable materials? If so, the hazards shall be corrected. If there is a lot of non-professional work present, a total re-wiring of the house (rather than repairing the numerous problems) may be the best solution.

t. If the existing wiring is in proper condition (e.g. good insulation and properly spliced), the

chances are it can be left in service, especially if recently added appliances can be disconnected from existing circuits and reconnected to new circuits installed for that purpose. Additional circuits should be added for both 240 volt and 120 volt appliances for which no wiring was originally provided. However, additional receptacles can be safely added to some existing circuits without overloading the circuits when no additional load will be imposed where they are for convenience only and will be used for the same existing portable appliances.

u. Are switches and receptacle outlets safe and securely fastened to the walls? Are switches

located behind the door or receptacles located in tub/shower areas or other damp or wet locations? Are switches or receptacle outlets loose or and missing plate covers? If so, the appropriate repairs shall be made. Floor outlets shall be installed in an approved box listed and labeled for floor receptacle use or they shall be removed. All receptacles shall be tested for grounding and if the wiring is a 2-wire ungrounded type, replacement of the two-wire ungrounded wiring with three-wire grounded wiring is recommended to enable installation of grounded receptacles.

v. Are the number of receptacles in the bathroom and kitchen adequate and are outlets GFCI-

protected, as required? If not, additional receptacles shall be added and GFCI-protected receptacles shall be installed where required.


w. Is each receptacle rated to match the circuit breaker and wire size? Are they properly sized, not overloaded and are any 3-wire grounded receptacles installed on the old 2-wire ungrounded system? If so, the proper replacements shall be made, including replacing old 2-wire ungrounded receptacles with new 2 wire ungrounded receptacles.

x. Have the holes bored through studs and joists for wiring runs, weakened the structural integrity

of the framing members? Are there an excessive number of wires bundled in the holes so that heat friction could cause possible fire hazards?

If so, the framing members shall be reinforced and the number of wires bundled in the spaces shall be reduced. New holes bored through floor joist shall conform to CABO Sections 502.6 and 502.7 and new holes bored through wall studs shall conform to CABO Section 602.5.

MECHANICAL EXECUTION OF WORK

Section 110-12 of the NEC covers the “Mechanical Execution of Work” and requires a neat and workmanlike installation of all electric equipment. “Equipment includes materials, fittings, devices, appliances, fixtures, apparatus, and the like used as part of, or in connection with an electrical installation”. Some examples of mechanical execution of work include the following: 1. Effective closing of unused openings in outlet, device, pull and junction boxes, conduit bodies

and fittings, raceways, auxiliary gutters, cabinets, equipment cases or housings. Note: Any unused opening must be effectively closed with knockout seals or other materials

that will provide substantial protection that is equivalent to that of the wall of a box or piece of equipment, for example.

2. Conductor insulation not damaged, including nicked wires at the ends of their terminations. 3. Cable assemblies not kinked or with excessive bends that are sharper than the permitted radius.

Note: Bends in cable assemblies must not have a radius that is less than five times the diameter of the cable. See NEC Sections 338-8 and 336.14.

4. Staples used to secure cables assemblies not driven too tightly. In some cases insulate types of

staples may provide better protection against damage. 5. All terminations made in accordance with the manufacturers instructions provided on the

equipment. 6. Use of proper tools for bending raceways. 7. Making sure all equipment is cleaned both inside and outside before it is energized. 8. Verifying that connections of all metal electrical cables, raceways, and equipment will result in

compliance with rules pertaining to grounding continuity. 9. Protection against physical damage for exposed electrical equipment during and after

construction.


Note: NEC Section 110-12C requires that electrical equipment be protected from damage by other trades during construction.

FIXTURE AND RECEPTACLE LOCATION REQUIREMENTS

KITCHEN: 1. All kitchen receptacles shall be on a three wire grounded 20 amp circuit and shall be GFCI

protected unless for a dedicated appliance on a dedicated circuit (see NEC Article 210-8(a) (5) (b)

2. Receptacle outlets shall be installed at each kitchen wall counter space 12 inches or wider and

shall be installed so that no point along the counter line is more than 24 inches from a receptacle outlet in that space (see NEC Article 210-52)

3. Two 20 amp small appliance branch circuits serving only the kitchen are required. The number

of small appliances shall be taken into consideration when planning the circuit loads and placement of the outlets to avoid overloading and the use of extension cords or temporary multiplex outlets.

4. A permanently installed overhead lighting fixture controlled by a wall switch is required. 5. Appliance outlets installed for a specific appliance, such as a refrigerator, must be installed

within 6 feet of the specific appliance. BATHROOM: 1. The bathroom shall be required to have at least one receptacle outlet, which shall be GFCI

protected, and shall be located at least thirty (30) inches and not more than 48 inches above the floor adjacent to the lavatory and not more than four feet from the lavatory and at least twelve inches from the outer rim of any bathtub or shower opening.

2. A permanently mounted switch controlled ceiling or wall lighting fixture is required which is

not to be power from the dedicated bathroom 20 amp circuit. No hanging fixture or lighting track can be located over the tub unless it is over 8 feet and cannot be located within 3 feet of the outside of tub.

3. Exhaust fans shall include a closure device that seals the duct when the fan is not operating.

Ducts shall lead directly to the outside air (see ducting requirements noted in OHRS Section 2.8.1.

A fan/light combo shall operate independently of each other, each having a separate grounded control switch. New exhaust fans shall be properly sized to change the volume of air in the bathroom every 12 minutes. Exhaust fans should be certified to operate at a Cubic Feet per Minute (CFM) capacity to sone rating of no lower than 10 CFM per sone.


LAUNDRY ROOM/AREA: 1. Every laundry room or laundry area shall have a receptacle outlet on a separate 20 amp circuit

(see NEC Article 220-4c). Note that the clothes dryer is not considered part of the laundry circuit. The dryer requires an independent appliance circuit.

2. The laundry room/area shall have a lighting fixture controlled by a wall switch. UNFINISHED BASEMENT AND GARAGE: 1. Outlets installed in unfinished basements and or crawl spaces shall be GFCI protected (see

NEC Article 210-8 (a) (4).

EXCEPTION: a receptacle located in a dedicated space for an appliance, such as a washing machine, or receptacles not readily accessible. A GFCI receptacle is required in the unfinished basement in addition to the laundry outlet.

2. Every basement shall have at least one switch controlled light fixture and one general purpose

outlet. When installing a new light fixture safety should be a prime consideration, and the fixture should provide a means of protection for the bulb.

3. Every attached garage (and detached garages with power), shall have at least one receptacle

outlet which is to be GFCI protected. Existing wiring in garages shall be free of Electrical hazards. Placement of outlets in garages at least 48” above floor is recommended.

ATTIC AND CRAWLSPACE: A permanent electric light fixture and outlet shall be installed when access to equipment, such as furnaces, is needed. The light shall be controlled by a switch located at the passageway opening. EQUIPMENT: 1. Furnaces and Air Conditioning equipment should have their own electrical disconnects which

are within sight of and readily accessible from equipment for which it is intended and are of correct amperage and installed in accordance with all relevant NEC provisions. Thermostats for heating and cooling equipment shall be operable and properly wired to equipment with all wires properly concealed. Wiring for room air conditioners shall conform to NEC Article 440-60 thru 64.

2. A permanent electrical receptacle and lighting fixture shall be provided near all heating

appliances located in enclosed rooms, attics and crawlspaces. 3. Electrical circuits for well pumps (jet pumps or submersible pumps), sump pumps, and septic

aerators shall be in accordance with NEC requirements. GFCI PROTECTION: All 15 amp and 20 amp receptacles installed in the locations specified below shall have ground-fault circuit interrupter (GFCI) protection.



1. Bathrooms 2. Garages, except inaccessible receptacles such as door openers or dedicated space for appliance

that in normal use is not easily moved such as a freezer or refrigerator. 3. Unfinished Basements, except inaccessible receptacles, and a single or duplex receptacle for

two appliances located within dedicated space for each appliance that in normal use is not easily moved from one place to another, and that is cord and plug connected in accordance with Article 400-7 (a)(6), (a)(7), or (a)(8).

Receptacles installed under exceptions to Section 210-8 (5) shall not be considered as meeting

the requirements of Section 210-52 (9) which states that at least one receptacle outlet, in addition to any provided for laundry equipment, shall be installed in each basement and in each attached garage, and in each detached garage with power.

4. Outdoor receptacles. 5. Crawlspaces at or below grade level. 6. Kitchens. Receptacles installed to serve counter top surfaces. 7. Wet bar sinks.

APPENDIX G

GUIDELINES FOR SIZING PLUMBING SUPPLY LINES

Following is a simplified procedure for helping to determine the adequacy of existing water supply lines and in the sizing of new water supply lines. For this method to be reasonably accurate the water pressure at the main shut-off valve where the water comes into the building must be within the range specified in 5.2.2.1 (40-80 psi) and the elevation of the highest fixture above the service valve must be less than 25 feet. For more detailed, more accurate methodology or for systems outside the above parameters the following references might be useful: OPC Appendix E, CABO Appendix C; Practical Plumbing Engineering by Cyril M. Harris, and Do-It-Yourself Plumbing by Max Alth (see the bibliography for complete listings). Other variables such as age of piping, number and type of fittings, and design of fixtures also affect the pressure. For this reason no formula or procedure can account for all variables and be fully relied upon to fit every situation, but must be augmented with actual field testing and experience. However, this procedure can serve as a basic guideline for proper sizing of water supply piping. Following are the steps in the process: 1. For each pipe interval, determine the fixture load that it carries using the guidelines set out

below. a. Only count hose bibs at 50% when adding to the total load. b. When combining three or more fixtures (not fixture groups), multiply by 0.9 c. When combining one or more fixtures with a fixture group, multiply by 9: d. When combining two fixture groups multiply by 8.

e. When combining three or more fixture groups or two or more fixture groups plus one or more fixtures multiply by 7.

f. Use fixture groups when possible.

WATER DEMAND OF FIXTURES AND FIXTURE GROUPS IN GALLONS PER MINUTE Fixture Type or Group Total Hot Cold Lavatory Faucet 2 1.5 1.5 Bathtub Faucet or Shower Head 5 4 3.5 Toilet Tank 3 3 Kitchen Sink 4 3 3 Dishwasher 4 4 Laundry Tub 5 3.25 3.25 Washing Machine 5 3.5 4 Hose Bib 5 5 Kitchen Group (Sink and Dishwasher) 7 5.5 3 Laundry Group (Washing Machine and Laundry Tub) 8 6 6.5 1/2 Bath Group (Lavatory and Toilet) 4.5 1.5 4 Full Bath Group (Lavatory, Toilet, and Tub/Shower) 8 5.5 7 1 1/2 Bath Group 9.5 7 7.5

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Fixture Type or Group Total Hot Cold 2 Bath Group 12 9.5 8.5 2 ½ Bath Group 13 10 9 3 Bath Group 15 11.5 10

2. Determine the type of piping that was or is to be used. 3. Use the table below to determine the size of the piping necessary to carry the amount of

demand from the calculations above.

PIPE SIZING BASED ON VELOCITY LIMITATION1 Flow of pipe in gallons per minute2

Nominal Pipe Size (Inches)

Copper Water Tube3 CPVC4 or Polyethylene5

Steel Pipe6 Type K Type L Type M

1/2 5.4 5.8 6.3 7.6 7.6 3/4 10.9 12.1 12.9 13.3 13.3 1 19.4 20.6 21.8 21.5 21.5

1 1/4 30.3 31.3 32.6 37.3 37.3

1 Pipe sizing based on velocities of 8 feet per second to avoid excessive noise in system; shock

damage to pipe, fittings, and equipment; and accelerated corrosion. 2 Actual flow also depends on the roughness of the pipe and the amount of mineral deposition inside

the pipes, which will vary with the age of the pipe and the water quality, especially with galvanized pipe.

3 Flow rates are based on copper water tube which conforms to ASTM B 88. 4 Flow rates are based on chlorinated polyvinyl chloride pipe, schedule 40, which conforms to ASTM

F 441. 5 Flow rates based on polyethylene pipe, schedule 40, which conforms to ASTM D 2447. 6 Flow rates based on galvanized steel pipe, schedule 40, which conforms to ASTM A 53.

APPENDIX H

SUMMARY OF INSPECTION AND TESTING REQUIREMENTS

This appendix lists eight specialized, but routine, inspections and tests that the OHRS requires. This list is provided as a reference and it is not intended to outline all of the inspections that may be needed to thoroughly assess a rehabilitation project. 1. Wood-boring Insect Infestation and Damage Each building shall be inspected for evidence of wood-boring insect infestation and damage. 2. Well Water Quality If potable water is supplied by a private well located on the premises, the quality of the water

must be tested by the local health department or other qualified source. At a minimum, the test must determine if the bacterial content of the water is within safe limits.

3. Private Septic System If sewage is treated by a private septic system located on the premises, the septic system must

be inspected by the local health department or other qualified source. The inspection must determine if the system is adequate, functional and properly treating the discharged waste.

4. Plumbing system The plumbing system (including the water supply lines and the drain, waste and vent lines)

shall be inspected for evidence of leaks, hazardous conditions, improper materials, improper installations, inadequate service and other existing or incipient conditions needing repair or improvement. The inspection must also assess the condition and adequacy of the plumbing fixtures and plumbing appliances.

5. Electrical System The electrical system (including the exterior service, service entrance, service panel and

premises wiring) shall be inspected for evidence of hazardous conditions, improper materials, improper installations, inadequate service and other existing or incipient conditions needing repair or improvement. The inspection must include a load calculation and determine the number of circuits required.

6. Space Heating Equipment The space equipment, including the fuel/power source, the venting system and the heat

distribution system, shall be inspected for evidence of hazardous conditions, improper materials, improper installations and other conditions or problems needing repair or improvement. If the equipment is to be replaced, the inspection must include a heat load calculation to size the new equipment. If fuel-fired equipment is not to be replaced, the inspection must include flue gas measurement and stack temperature tests to determine combustion safety and efficiency.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: H-1 March 2010

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: H-2 March 2010

7. Water Heating Equipment

The water heating equipment, including the venting system, shall be inspected for evidence of hazardous conditions, improper materials, improper installations and other conditions or problems needing repair or improvement. If equipment is to be replaced, the inspection must include a calculation to size the new equipment. If fuel-fired equipment is not to be replaced, the inspection must include flue gas measurement and stack temperature tests to determine combustion safety and efficiency.

8. Fuel-gas Piping If fuel-gas (i.e. natural gas or LPG) is used, the lines shall be inspected for evidence of

hazardous conditions, improper materials and improper installations. In addition, the lines shall be tested for leaks.

APPENDIX I

ABBREVIATIONS

ANSI

American National Standards Institute

ASHRAE

American Society of Heating, Refrigeration & Air Conditioning Engineers

ASSE

American Society of Safety Engineers

ASTM

American Society for Testing and Materials

EPA

Environmental Protection Agency

FEMA

Federal Emergency Management Agency

GAMA

Gas Appliance Manufacturers Association

HUD


IECC International Energy Conservation Code

IRC International Residential Code

IMC International Mechanical Code

MDOC

Montana Department of Commerce

NEC National Electrical Code

OSHA

Occupational Safety & Health Administration

SHPO

Montana State Historic Preservation Office

UFAS

Uniform Federal Accessibility Standards

UL

Underwriter’s Laboratory

UPC Uniform Plumbing Code

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: I-1 March 2010

APPENDIX J

DEFINITIONS

Attic That portion of a building that is between the roof and the ceiling of the top floor. In 1 ½ story buildings, the attic includes the area behind the kneewall.

Basement That portion of a building that is partly or completely below grade. Basements are enclosed by the foundation walls and may be habitable or unhabitable. In general, basements have sufficient headroom to enter and move about.

Bathroom A room containing plumbing fixtures including a bathtub, shower or combination bathtub/shower. In most single-family residential dwellings, the bathroom will also contain a toilet (water closet) and a lavatory. However, in the context of the OHRS, a room containing a toilet and a lavatory (i.e. a “toilet room”) shall also be considered a bathroom.

Bedroom A room designated for sleeping. In most single family residential dwellings, bedrooms are separate rooms used exclusively for sleeping. However, in the context of the OHRS, other habitable rooms (e.g. living room, dining room, parlor, den, etc.) which are used for sleeping shall be considered bedrooms.

Blower Door A calibrated device: consisting of a high velocity fan, pressure sensitive gauges and a simple computer used to pressurize (or de- pressurize) a dwelling and therefore quantify and locate air movement.

Building The structure containing the dwelling or dwellings and the common areas within the structure.

Building Shell The building’s wall, ceiling and floor assemblies that make up the exterior boundaries. Regarding energy efficiency measures, the building shell refers to the boundaries between the conditioned and unconditioned spaces (i.e. thermal boundaries).

Cellar A basement space that is unfinished and unhabitable. In many cases, cellars have dirt, stone or brick floors.

Combustion Equipment

Equipment or appliances that produce heat by the on-site burning of gaseous, liquid or solid fuel. Examples of combustion equipment include; furnaces, space heaters, fireplaces, water heaters, ranges, cook top stoves and clothes dryers. Combustion equipment may also be referred to as fuel-burning equipment.

Conditioned Those portions of a building in which the air is heated (or cooled) to maintain comfort for the occupant and/or to protect the building’s systems, such as protecting water lines from freezing. In the context of the OHRS, conditioned spaces are generally spaces that are intentionally heated (or cooled) and therefore are within the building’s thermal boundary. Spaces which are unintentionally conditioned, such as a furnace room or a basement with ducts running through it, shall be considered unconditioned.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: J-1 March 2010

Crawlspace The space between the floor of the building and the grade below. Crawlspaces may be enclosed by the foundation walls or open the outside.

Direct vent Equipment

High energy efficient space and water heating equipment that, with Equipment the aid of draft inducing fans, receive combustion air directly from the outside, burn fuel within a sealed combustion chamber and vent combustion by-products horizontally through the sidewall.

Dwelling or Dwelling Unit

A single unit providing complete independent living facilities for Dwelling Unit one or more persons including permanent provisions for living, sleeping, eating, cooking and sanitation.

Electrical System

In the context of the OHRS, the electrical system shall include System all components of the dwelling and premises wiring system, from the load end of the service drop (or underground lateral) to the receptacle or fixture. This includes the service entrance, the service panel and over-current protection devices, the wiring circuitry and the fixtures.

Functional In the context of the OHRS, functional means that a thing operates or fulfills the purpose for which it was designed and intended. Functional implies that the thing is in good repair and works without problems.

Fuel-burning Equipment

See “combustion equipment”. Generally refers to furnaces and water Equipment heaters.

Habitable Space

Space within a dwelling designated for living, sleeping, eating or cooking. Bathrooms, toilet rooms, closets, storage or utility rooms, halls, and similar spaces are not considered habitable spaces.

Heating Distribution System

The ducts or piping which conduct the heated air or fluid from the Distribution heating equipment to the space and back to the heating equipment. System Warm-air distribution systems include the plenum, supply and return ducts, connectors, the fan and air handler components, registers and dampers. Hydronic distribution systems include supply and return piping, connectors, pumps, valves, expansion tanks and radiators.

Heating Equipment

In the context of the OHRS, heating equipment refers to Equipment appliances designed and used exclusively for heating the space within the dwelling. Examples include furnaces, space heaters, boilers and baseboard heaters. Heating equipment may be fuel-burning or electric and stationary or portable. Other appliances that produce heat, but are not designed for space heating, such as kitchen ranges and cooktop stoves, are not considered heating equipment.

Hydronic System

Hot water or steam heating equipment and distribution system.



Kitchen A room designated for preparing food. In most single-family residences, a kitchen is a separate room or distinct part of a room used exclusively for cooking. In the context of the OHRS, a kitchen must have adequate space for a cooking appliance and a refrigerator, a sink and adequate storage and counter top space.

Kneewall A short stud wall connecting the floor and the roof framing members that separates a room from an attic area.

Occupiable Space

Space within a dwelling other than that designated for living, sleeping, eating or cooking. Occupiable spaces include areas such as bathrooms, toilet rooms, closets, halls, storage and utility rooms.

Primary Heating Equipment

Heating equipment used as the main source for space heating. Generally, primary heating equipment is permanent and stationary. Portable space heaters are generally secondary heat sources used as back up or in emergencies.

Plumbing System

In the context of the OHRS, the plumbing system shall include all components of the water supply and sanitary disposal system in the dwelling unit and on the premises. The water supply system includes the supply (if a well is present), supply piping, connectors, water heater, valves and fixtures. The sanitary disposal system includes the drain, waste and vent pipes, traps, sewer connections and septic (if present).

Qualified Person

Person demonstrating the knowledge, skill and experience required to perform the work in accordance with the OHRS or referenced code. Regarding electrical, plumbing and HVAC work, qualified may also mean a person who is certified or licensed, or whose primary occupation is in those residential trades.

Unconditioned Space

Those portions of a building that are not heated (or not cooled). In the context of the OHRS, these areas are generally those which are intentionally not heated (or cooled).

Unhabitable Space

The spaces in a building or a structure on the premises that are not designed or built for habitation and therefore are inappropriate for residential living. Generally, unhabitable spaces are outside of the dwelling’s thermal boundaries. Examples of unhabitable spaces include; unfinished attics, basements, crawlspaces, garages, porches, sheds and other out-buildings.

Vapor Barrier A material that retards the passage of water vapor. Vapor barriers must have a permanence rated at not greater than 1 perm. Commonly used vapor barriers include, 6 mil polyethylene sheeting and specialty paints.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7C: K-1 March 2010

APPENDIX K

CODE REFERENCES

The State of Montana has amended and adopted these codes by Administrative Rules of Montana (ARM) Title 24, Chapter 301, which can be found at: http://mt.gov/dli/bsd/bc/rules.asp. A listing of the current adopted codes and effectives dates can be found at: http://mt.gov/dli/bsd/bc/current_codes.asp

International Energy Conservation Code (IECC), 2003 Edition – Effective September 3, 20047 International Mechanical Code (IMC), 2006 Edition – Effective January 26, 2007

International Residential Code (IRC), 2006 Edition – Effective January 26, 2007

National Electrical Code (NEC), 2005 Edition – Effective February 24, 2006

Uniform Plumbing Code (UPC), 2006 Edition – Effective January 26, 2007

7 On June 25, 2009, the Montana Building Code Council voted to adopt the 2009 IECC with amendments. As for an effective date for the new regulations, the Administrative Rules of Montana (ARM) requires the process to be completed within six months of the filing date with the Secretary of State. A public hearing on the proposed amendment was held on November 30, 2009. When adopted, all HOME grantees will be required to follow and certify they are meeting the requirements of IECC 2009.

EXHIBIT 7-D U.S. DEPARTMENT OF HUD 06/28/2011 Effective 7/13/2011 STATE: MONTANA --------------------- 2011 ADJUSTED HOME INCOME LIMITS --------------------- PROGRAM 1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 PERSON 6 PERSON 7 PERSON 8 PERSON Billings, MT MSA 30% LIMITS 13400 15300 17200 19100 20650 22200 23700 25250 VERY LOW INCOME 22300 25500 28700 31850 34400 36950 39500 42050 60% LIMITS 26760 30600 34440 38220 41280 44340 47400 50460 LOW INCOME 35700 40800 45900 50950 55050 59150 63200 67300 Great Falls, MT MSA 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Missoula, MT MSA 30% LIMITS 12450 14200 16000 17750 19200 20600 22050 23450 VERY LOW INCOME 20700 23650 26600 29550 31950 34300 36650 39050 60% LIMITS 24840 28380 31920 35460 38340 41160 43980 46860 LOW INCOME 33150 37850 42600 47300 51100 54900 58700 62450 Beaverhead County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Big Horn County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Blaine County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Broadwater County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050

HOME INVESTMENT PARTNERSHIPS PROGRAM HOME Administration Manual Montana Department of Commerce Page 1 of 8 June 2011; Updated July 12, 2011

EXHIBIT 7-D U.S. DEPARTMENT OF HUD 06/28/2011 STATE: MONTANA --------------------- 2011 ADJUSTED HOME INCOME LIMITS --------------------- PROGRAM 1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 PERSON 6 PERSON 7 PERSON 8 PERSON Carter County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Chouteau County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Custer County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Daniels County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Dawson County, MT 30% LIMITS 11950 13650 15350 17050 18450 19800 21150 22550 VERY LOW INCOME 19950 22800 25650 28450 30750 33050 35300 37600 60% LIMITS 23940 27360 30780 34140 36900 39660 42360 45120 LOW INCOME 31850 36400 40950 45500 49150 52800 56450 60100 Deer Lodge County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Fallon County, MT 30% LIMITS 11950 13650 15350 17050 18450 19800 21150 22550 VERY LOW INCOME 19950 22800 25650 28450 30750 33050 35300 37600 60% LIMITS 23940 27360 30780 34140 36900 39660 42360 45120 LOW INCOME 31850 36400 40950 45500 49150 52800 56450 60100


EXHIBIT 7-D U.S. DEPARTMENT OF HUD 06/28/2011 STATE: MONTANA --------------------- 2011 ADJUSTED HOME INCOME LIMITS --------------------- PROGRAM 1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 PERSON 6 PERSON 7 PERSON 8 PERSON Fergus County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Flathead County, MT 30% LIMITS 12050 13750 15450 17150 18550 19900 21300 22650 VERY LOW INCOME 20000 22850 25700 28550 30850 33150 35450 37700 60% LIMITS 24000 27420 30840 34260 37020 39780 42540 45240 LOW INCOME 32000 36600 41150 45700 49400 53050 56700 60350 Gallatin County, MT 30% LIMITS 14000 16000 18000 20000 21600 23200 24800 26400 VERY LOW INCOME 23350 26700 30050 33350 36050 38700 41400 44050 60% LIMITS 28020 32040 36060 40020 43260 46440 49680 52860 LOW INCOME 37350 42700 48050 53350 57650 61900 66200 70450 Garfield County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Glacier County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Golden Valley County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Granite County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050


EXHIBIT 7-D U.S. DEPARTMENT OF HUD 06/28/2011 STATE: MONTANA --------------------- 2011 ADJUSTED HOME INCOME LIMITS --------------------- PROGRAM 1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 PERSON 6 PERSON 7 PERSON 8 PERSON Hill County, MT 30% LIMITS 11950 13650 15350 17050 18450 19800 21150 22550 VERY LOW INCOME 19950 22800 25650 28450 30750 33050 35300 37600 60% LIMITS 23940 27360 30780 34140 36900 39660 42360 45120 LOW INCOME 31850 36400 40950 45500 49150 52800 56450 60100 Jefferson County, MT 30% LIMITS 14350 16400 18450 20450 22100 23750 25400 27000 VERY LOW INCOME 23850 27250 30650 34050 36800 39500 42250 44950 60% LIMITS 28620 32700 36780 40860 44160 47400 50700 53940 LOW INCOME 38150 43600 49050 54500 58900 63250 67600 71950 Judith Basin County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Lake County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Lewis and Clark County, MT 30% LIMITS 14500 16550 18600 20650 22350 24000 25650 27300 VERY LOW INCOME 24100 27550 31000 34400 37200 39950 42700 45450 60% LIMITS 28920 33060 37200 41280 44640 47940 51240 54540 LOW INCOME 38550 44050 49550 55050 59500 63900 68300 72700 Liberty County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Lincoln County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050


EXHIBIT 7-D U.S. DEPARTMENT OF HUD 06/28/2011 STATE: MONTANA --------------------- 2011 ADJUSTED HOME INCOME LIMITS --------------------- PROGRAM 1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 PERSON 6 PERSON 7 PERSON 8 PERSON McCone County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Madison County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Meagher County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Mineral County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Musselshell County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Park County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Petroleum County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050


EXHIBIT 7-D U.S. DEPARTMENT OF HUD 06/28/2011 STATE: MONTANA --------------------- 2011 ADJUSTED HOME INCOME LIMITS --------------------- PROGRAM 1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 PERSON 6 PERSON 7 PERSON 8 PERSON Phillips County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Pondera County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Powder River County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Powell County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Prairie County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Ravalli County, MT 30% LIMITS 11800 13450 15150 16800 18150 19500 20850 22200 VERY LOW INCOME 19600 22400 25200 28000 30250 32500 34750 37000 60% LIMITS 23520 26880 30240 33600 36300 39000 41700 44400 LOW INCOME 31400 35850 40350 44800 48400 52000 55600 59150 Richland County, MT 30% LIMITS 11800 13500 15200 16850 18200 19550 20900 22250 VERY LOW INCOME 19650 22450 25250 28050 30300 32550 34800 37050 60% LIMITS 23580 26940 30300 33660 36360 39060 41760 44460 LOW INCOME 31450 35950 40450 44900 48500 52100 55700 59300


EXHIBIT 7-D U.S. DEPARTMENT OF HUD 06/28/2011 STATE: MONTANA --------------------- 2011 ADJUSTED HOME INCOME LIMITS --------------------- PROGRAM 1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 PERSON 6 PERSON 7 PERSON 8 PERSON Roosevelt County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Rosebud County, MT 30% LIMITS 11900 13600 15300 16950 18350 19700 21050 22400 VERY LOW INCOME 19800 22600 25450 28250 30550 32800 35050 37300 60% LIMITS 23760 27120 30540 33900 36660 39360 42060 44760 LOW INCOME 31650 36200 40700 45200 48850 52450 56050 59700 Sanders County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Sheridan County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Silver Bow County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Stillwater County, MT 30% LIMITS 13850 15800 17800 19750 21350 22950 24500 26100 VERY LOW INCOME 23100 26400 29700 32950 35600 38250 40900 43500 60% LIMITS 27720 31680 35640 39540 42720 45900 49080 52200 LOW INCOME 36900 42200 47450 52700 56950 61150 65350 69600 Sweet Grass County, MT 30% LIMITS 11950 13650 15350 17050 18450 19800 21150 22550 VERY LOW INCOME 19950 22800 25650 28450 30750 33050 35300 37600 60% LIMITS 23940 27360 30780 34140 36900 39660 42360 45120 LOW INCOME 31850 36400 40950 45500 49150 52800 56450 60100


EXHIBIT 7-D U.S. DEPARTMENT OF HUD 06/28/2011 STATE: MONTANA --------------------- 2011 ADJUSTED HOME INCOME LIMITS --------------------- PROGRAM 1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 PERSON 6 PERSON 7 PERSON 8 PERSON Teton County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Toole County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Treasure County, MT 30% LIMITS 11850 13550 15250 16900 18300 19650 21000 22350 VERY LOW INCOME 19750 22600 25400 28200 30500 32750 35000 37250 60% LIMITS 23700 27120 30480 33840 36600 39300 42000 44700 LOW INCOME 31600 36100 40600 45100 48750 52350 55950 59550 Valley County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Wheatland County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050 Wibaux County, MT 30% LIMITS 11750 13400 15100 16750 18100 19450 20800 22150 VERY LOW INCOME 19600 22400 25200 27950 30200 32450 34700 36900 60% LIMITS 23520 26880 30240 33540 36240 38940 41640 44280 LOW INCOME 31300 35800 40250 44700 48300 51900 55450 59050


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U.S. DEPARTMENT OF HUD 11/16/2011STATE:MONTANA --------------------- 2012 ADJUSTED HOME INCOME LIMITS ---------------------

PROGRAM 1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 PERSON 6 PERSON 7 PERSON 8 PERSON

Billings, MT MSA30% LIMITS 13600 15550 17500 19400 21000 22550 24100 25650VERY LOW INCOME 22650 25850 29100 32300 34900 37500 40100 4265060% LIMITS 27180 31020 34920 38760 41880 45000 48120 51180LOW INCOME 36200 41400 46550 51700 55850 60000 64150 68250

Great Falls, MT MSA30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Missoula, MT MSA30% LIMITS 12600 14400 16200 17950 19400 20850 22300 23700VERY LOW INCOME 21000 24000 27000 29950 32350 34750 37150 3955060% LIMITS 25200 28800 32400 35940 38820 41700 44580 47460LOW INCOME 33550 38350 43150 47900 51750 55600 59400 63250

Beaverhead County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Big Horn County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Blaine County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Broadwater County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

EXHBIT 7-D EFFECTIVE DATE: February 9, 2012

HOME INVESTMENT PARTNERSHIPS PROGRAM Montana Department of Commerce

January 2012

HOME Administration Manual

cc5049

Typewritten Text

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Carter County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Chouteau County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Custer County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Daniels County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Dawson County, MT30% LIMITS 12550 14350 16150 17900 19350 20800 22200 23650VERY LOW INCOME 20900 23900 26900 29850 32250 34650 37050 3945060% LIMITS 25080 28680 32280 35820 38700 41580 44460 47340LOW INCOME 33450 38200 43000 47750 51600 55400 59250 63050

Deer Lodge County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Fallon County, MT30% LIMITS 12550 14350 16150 17900 19350 20800 22200 23650VERY LOW INCOME 20900 23900 26900 29850 32250 34650 37050 3945060% LIMITS 25080 28680 32280 35820 38700 41580 44460 47340LOW INCOME 33450 38200 43000 47750 51600 55400 59250 63050



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Fergus County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Flathead County, MT30% LIMITS 12150 13900 15650 17350 18750 20150 21550 22950VERY LOW INCOME 20250 23150 26050 28900 31250 33550 35850 3815060% LIMITS 24300 27780 31260 34680 37500 40260 43020 45780LOW INCOME 32400 37000 41650 46250 49950 53650 57350 61050

Gallatin County, MT30% LIMITS 14250 16250 18300 20300 21950 23550 25200 26800VERY LOW INCOME 23700 27050 30450 33800 36550 39250 41950 4465060% LIMITS 28440 32460 36540 40560 43860 47100 50340 53580LOW INCOME 37900 43300 48700 54100 58450 62800 67100 71450

Garfield County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Glacier County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Golden Valley County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Granite County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800



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Hill County, MT30% LIMITS 12550 14350 16150 17900 19350 20800 22200 23650VERY LOW INCOME 20900 23900 26900 29850 32250 34650 37050 3945060% LIMITS 25080 28680 32280 35820 38700 41580 44460 47340LOW INCOME 33450 38200 43000 47750 51600 55400 59250 63050

Jefferson County, MT30% LIMITS 14500 16600 18650 20700 22400 24050 25700 27350VERY LOW INCOME 24150 27600 31050 34500 37300 40050 42800 4555060% LIMITS 28980 33120 37260 41400 44760 48060 51360 54660LOW INCOME 38650 44200 49700 55200 59650 64050 68450 72900

Judith Basin County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Lake County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Lewis and Clark County, MT30% LIMITS 14800 16900 19000 21100 22800 24500 26200 27900VERY LOW INCOME 24650 28150 31650 35150 38000 40800 43600 4640060% LIMITS 29580 33780 37980 42180 45600 48960 52320 55680LOW INCOME 39400 45000 50650 56250 60750 65250 69750 74250

Liberty County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Lincoln County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800



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McCone County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Madison County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Meagher County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Mineral County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Musselshell County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Park County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Petroleum County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800



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Phillips County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Pondera County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Powder River County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Powell County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Prairie County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Ravalli County, MT30% LIMITS 11950 13650 15350 17050 18450 19800 21150 22550VERY LOW INCOME 19900 22750 25600 28400 30700 32950 35250 3750060% LIMITS 23880 27300 30720 34080 36840 39540 42300 45000LOW INCOME 31850 36400 40950 45450 49100 52750 56400 60000

Richland County, MT30% LIMITS 11950 13650 15350 17050 18450 19800 21150 22550VERY LOW INCOME 19900 22750 25600 28400 30700 32950 35250 3750060% LIMITS 23880 27300 30720 34080 36840 39540 42300 45000LOW INCOME 31850 36400 40950 45450 49100 52750 56400 60000



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Roosevelt County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Rosebud County, MT30% LIMITS 12050 13750 15450 17150 18550 19900 21300 22650VERY LOW INCOME 20050 22900 25750 28600 30900 33200 35500 3780060% LIMITS 24060 27480 30900 34320 37080 39840 42600 45360LOW INCOME 32050 36600 41200 45750 49450 53100 56750 60400

Sanders County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Sheridan County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Silver Bow County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Stillwater County, MT30% LIMITS 14550 16600 18700 20750 22450 24100 25750 27400VERY LOW INCOME 24200 27650 31100 34550 37350 40100 42850 4565060% LIMITS 29040 33180 37320 41460 44820 48120 51420 54780LOW INCOME 38750 44250 49800 55300 59750 64150 68600 73000

Sweet Grass County, MT30% LIMITS 12550 14350 16150 17900 19350 20800 22200 23650VERY LOW INCOME 20900 23900 26900 29850 32250 34650 37050 3945060% LIMITS 25080 28680 32280 35820 38700 41580 44460 47340LOW INCOME 33450 38200 43000 47750 51600 55400 59250 63050



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Teton County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Toole County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Treasure County, MT30% LIMITS 12050 13750 15450 17150 18550 19900 21300 22650VERY LOW INCOME 20000 22850 25700 28550 30850 33150 35450 3770060% LIMITS 24000 27420 30840 34260 37020 39780 42540 45240LOW INCOME 32000 36600 41150 45700 49400 53050 56700 60350

Valley County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Wheatland County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800

Wibaux County, MT30% LIMITS 11900 13600 15300 17000 18400 19750 21100 22450VERY LOW INCOME 19850 22650 25500 28300 30600 32850 35100 3740060% LIMITS 23820 27180 30600 33960 36720 39420 42120 44880LOW INCOME 31750 36250 40800 45300 48950 52550 56200 59800



January 2012


EXHIBIT 7-E U.S. DEPARTMENT OF HUD 06/28/2011 Effective 7/13/2011 STATE: MONTANA ---------------- 2011 HOME PROGRAM RENTS ---------------------- PROGRAM EFFICIENCY 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR Billings, MT MSA LOW HOME RENT LIMIT 451 536 693 828 923 1019 1114 HIGH HOME RENT LIMIT 451 536 693 935 1125 1243 1343 For Information Only: FAIR MARKET RENT 451 536 693 935 1125 1294 1463 50% RENT LIMIT 557 597 717 828 923 1019 1114 65% RENT LIMIT 705 757 911 1043 1144 1243 1343 Great Falls, MT MSA LOW HOME RENT LIMIT 411 495 630 726 811 895 978 HIGH HOME RENT LIMIT 411 495 635 859 998 1082 1166 For Information Only: FAIR MARKET RENT 411 495 635 859 1034 1189 1344 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Missoula, MT MSA LOW HOME RENT LIMIT 517 572* 691* 798* 891* 983* 1074* HIGH HOME RENT LIMIT 533 614 775 965 1100* 1196* 1291* For Information Only: FAIR MARKET RENT 533 614 775 1004 1202 1382 1563 50% RENT LIMIT 517 554 665 768 857 946 1034 65% RENT LIMIT 653 701 843 965 1056 1147 1238 Beaverhead County, MT LOW HOME RENT LIMIT 490 525 630 726 811 895 978 HIGH HOME RENT LIMIT 498 581 763 912 998 1082 1166 For Information Only: FAIR MARKET RENT 498 581 763 987 1196 1375 1555 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Big Horn County, MT LOW HOME RENT LIMIT 445 462 596 726 787 895 978 HIGH HOME RENT LIMIT 445 462 596 738 787 905 1023 For Information Only: FAIR MARKET RENT 445 462 596 738 787 905 1023 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Blaine County, MT LOW HOME RENT LIMIT 403 481 609 726 811 895 978 HIGH HOME RENT LIMIT 403 481 609 812 927 1066 1166 For Information Only: FAIR MARKET RENT 403 481 609 812 927 1066 1205 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 * HOME Program Rent held at last year's level. For all HOME projects, the maximum allowable rent is the HUD calculated High HOME Rent Limit and/or Low HOME Rent Limit.

NOTE: Any increase in rents for HOME-Assisted units is subject to the provisions of outstanding leases, and in any event, the owner must provide tenants of those units not less than 30 days prior written notice before implementing any increase in rents. In addition, any changes in rent levels/schedules must be submitted to the HOME Program for approval prior to implementation.


EXHIBIT 7-E U.S. DEPARTMENT OF HUD 06/28/2011 Effective 7/13/2011 STATE: MONTANA ---------------- 2011 HOME PROGRAM RENTS ---------------------- PROGRAM EFFICIENCY 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR Broadwater County, MT LOW HOME RENT LIMIT 445 510 630 726 811 895 978 HIGH HOME RENT LIMIT 445 510 648 876 941 1082 1166 For Information Only: FAIR MARKET RENT 445 510 648 876 941 1082 1223 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Carter County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Chouteau County, MT LOW HOME RENT LIMIT 403 481 609 726 811 895 978 HIGH HOME RENT LIMIT 403 481 609 812 927 1066 1166 For Information Only: FAIR MARKET RENT 403 481 609 812 927 1066 1205 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Custer County, MT LOW HOME RENT LIMIT 389 525 596 726 811 895 978 HIGH HOME RENT LIMIT 389 539 596 868 898 1033 1166 For Information Only:


FAIR MARKET RENT 389 539 596 868 898 1033 1167 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Daniels County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Dawson County, MT LOW HOME RENT LIMIT 484 502 596 740 826 911 995 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 498 534 641 740 826 911 995 65% RENT LIMIT 628 674 811 929 1016 1102 1189 * HOME Program Rent held at last year's level. For all HOME projects, the maximum allowable rent is the HUD calculated High HOME Rent Limit and/or Low HOME Rent Limit.

HOME INVESTMENT PARTNERSHIPS PROGRAM HOME Administration Manual

Montana Department of Commerce Page 2 of 10 June 2011; Updated July 12, 2011

EXHIBIT 7-E U.S. DEPARTMENT OF HUD 06/28/2011 Effective 7/13/2011 STATE: MONTANA ---------------- 2011 HOME PROGRAM RENTS ---------------------- PROGRAM EFFICIENCY 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR Deer Lodge County, MT LOW HOME RENT LIMIT 445 510 630 726 811 895 978 HIGH HOME RENT LIMIT 445 510 648 876 941 1082 1166 For Information Only: FAIR MARKET RENT 445 510 648 876 941 1082 1223 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Fallon County, MT LOW HOME RENT LIMIT 484 502 596 740 826 911 995 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 498 534 641 740 826 911 995 65% RENT LIMIT 628 674 811 929 1016 1102 1189 Fergus County, MT LOW HOME RENT LIMIT 434 453 596 722 769 884 978 HIGH HOME RENT LIMIT 434 453 596 722 769 884 1000 For Information Only: FAIR MARKET RENT 434 453 596 722 769 884 1000 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Flathead County, MT LOW HOME RENT LIMIT 449 535 642 742 828 914 999 HIGH HOME RENT LIMIT 449 552 693 931 1019 1106 1193 For Information Only: FAIR MARKET RENT 449 552 693 980 1202 1382 1563 50% RENT LIMIT 500 535 642 742 828 914 999 65% RENT LIMIT 630 676 813 931 1019 1106 1193 Gallatin County, MT LOW HOME RENT LIMIT 508 604 751 867 967 1068 1167 HIGH HOME RENT LIMIT 508 604 786 1049 1200 1306 1411 For Information Only: FAIR MARKET RENT 508 604 786 1049 1377 1584 1790 50% RENT LIMIT 583 625 751 867 967 1068 1167 65% RENT LIMIT 739 793 954 1094 1200 1306 1411 Garfield County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 * HOME Program Rent held at last year's level.


For all HOME projects, the maximum allowable rent is the HUD calculated High HOME Rent Limit and/or Low HOME Rent Limit.


EXHIBIT 7-E U.S. DEPARTMENT OF HUD 06/28/2011 Effective 7/13/2011 STATE: MONTANA ---------------- 2011 HOME PROGRAM RENTS ---------------------- PROGRAM EFFICIENCY 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR Glacier County, MT LOW HOME RENT LIMIT 403 481 609 726 811 895 978 HIGH HOME RENT LIMIT 403 481 609 812 927 1066 1166 For Information Only: FAIR MARKET RENT 403 481 609 812 927 1066 1205 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Golden Valley County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Granite County, MT LOW HOME RENT LIMIT 445 510 630 726 811 895 978 HIGH HOME RENT LIMIT 445 510 648 876 941 1082 1166 For Information Only: FAIR MARKET RENT 445 510 648 876 941 1082 1223 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Hill County, MT LOW HOME RENT LIMIT 387 477 596 740 826 911 995 HIGH HOME RENT LIMIT 387 477 596 859 912 1049 1186 For Information Only:


FAIR MARKET RENT 387 477 596 859 912 1049 1186 50% RENT LIMIT 498 534 641 740 826 911 995 65% RENT LIMIT 628 674 811 929 1016 1102 1189 Jefferson County, MT LOW HOME RENT LIMIT 445 510 648 876 941 1082 1191 HIGH HOME RENT LIMIT 445 510 648 876 941 1082 1223 For Information Only: FAIR MARKET RENT 445 510 648 876 941 1082 1223 50% RENT LIMIT 596 638 766 885 987 1090 1191 65% RENT LIMIT 755 810 974 1117 1226 1335 1443 Judith Basin County, MT LOW HOME RENT LIMIT 403 481 609 726 811 895 978 HIGH HOME RENT LIMIT 403 481 609 812 927 1066 1166 For Information Only: FAIR MARKET RENT 403 481 609 812 927 1066 1205 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 * HOME Program Rent held at last year's level. For all HOME projects, the maximum allowable rent is the HUD calculated High HOME Rent Limit and/or Low HOME Rent Limit.


EXHIBIT 7-E U.S. DEPARTMENT OF HUD 06/28/2011 Effective 7/13/2011 STATE: MONTANA ---------------- 2011 HOME PROGRAM RENTS ---------------------- PROGRAM EFFICIENCY 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR Lake County, MT LOW HOME RENT LIMIT 490 525 630 726 811 895 978 HIGH HOME RENT LIMIT 529 531 644 868 935 1075 1166 For Information Only: FAIR MARKET RENT 529 531 644 868 935 1075 1216 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Lewis and Clark County, MT LOW HOME RENT LIMIT 479 548 684 895 998 1101 1204 HIGH HOME RENT LIMIT 479 548 684 993 1025 1179 1333 For Information Only: FAIR MARKET RENT 479 548 684 993 1025 1179 1333 50% RENT LIMIT 602 645 775 895 998 1101 1204 65% RENT LIMIT 763 819 984 1129 1240 1349 1459 Liberty County, MT LOW HOME RENT LIMIT 403 481 609 726 811 895 978 HIGH HOME RENT LIMIT 403 481 609 812 927 1066 1166 For Information Only: FAIR MARKET RENT 403 481 609 812 927 1066 1205 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Lincoln County, MT LOW HOME RENT LIMIT 430 525 630 726 811 895 978 HIGH HOME RENT LIMIT 430 528 660 912 998 1082 1166 For Information Only: FAIR MARKET RENT 430 528 660 913 1024 1178 1331 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 McCone County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Madison County, MT LOW HOME RENT LIMIT 490 525 630 726 811 895 978 HIGH HOME RENT LIMIT 498 581 763 912 998 1082 1166 For Information Only: FAIR MARKET RENT 498 581 763 987 1196 1375 1555 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166


* HOME Program Rent held at last year's level. For all HOME projects, the maximum allowable rent is the HUD calculated High HOME Rent Limit and/or Low HOME Rent Limit.



EXHIBIT 7-E U.S. DEPARTMENT OF HUD 06/28/2011 Effective 7/13/2011 STATE: MONTANA ---------------- 2011 HOME PROGRAM RENTS ---------------------- PROGRAM EFFICIENCY 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR Meagher County, MT LOW HOME RENT LIMIT 490 525 630 726 811 895 978 HIGH HOME RENT LIMIT 498 581 763 912 998 1082 1166 For Information Only: FAIR MARKET RENT 498 581 763 987 1196 1375 1555 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Mineral County, MT LOW HOME RENT LIMIT 490 525 630 726 811 895 978 HIGH HOME RENT LIMIT 533 603 757 912 998 1082 1166 For Information Only: FAIR MARKET RENT 533 603 757 970 1161 1335 1509 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Musselshell County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Park County, MT LOW HOME RENT LIMIT 475 525 633* 732* 817* 901* 985* HIGH HOME RENT LIMIT 475 554 728 871 1005* 1090* 1175* For Information Only:


FAIR MARKET RENT 475 554 728 871 1151 1324 1496 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Petroleum County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Phillips County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166




EXHIBIT 7-E U.S. DEPARTMENT OF HUD 06/28/2011 Effective 7/13/2011 STATE: MONTANA ---------------- 2011 HOME PROGRAM RENTS ---------------------- PROGRAM EFFICIENCY 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR Pondera County, MT LOW HOME RENT LIMIT 403 481 609 726 811 895 978 HIGH HOME RENT LIMIT 403 481 609 812 927 1066 1166 For Information Only: FAIR MARKET RENT 403 481 609 812 927 1066 1205 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Powder River County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Powell County, MT LOW HOME RENT LIMIT 445 510 630 726 811 895 978 HIGH HOME RENT LIMIT 445 510 648 876 941 1082 1166 For Information Only: FAIR MARKET RENT 445 510 648 876 941 1082 1223 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Prairie County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Ravalli County, MT LOW HOME RENT LIMIT 490 525 630 728 812 896 980 HIGH HOME RENT LIMIT 505 550 706 913 999 1083 1168 For Information Only: FAIR MARKET RENT 505 550 706 925 1094 1258 1422 50% RENT LIMIT 490 525 630 728 812 896 980 65% RENT LIMIT 618 663 798 913 999 1083 1168 Richland County, MT LOW HOME RENT LIMIT 484 502 596 729 813 898 981 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 491 526 631 729 813 898 981 65% RENT LIMIT 619 664 799 914 1000 1085 1170





EXHIBIT 7-E U.S. DEPARTMENT OF HUD 06/28/2011 Effective 7/13/2011 STATE: MONTANA ---------------- 2011 HOME PROGRAM RENTS ---------------------- PROGRAM EFFICIENCY 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR Roosevelt County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Rosebud County, MT LOW HOME RENT LIMIT 443 460 596 735 784 902 1005* HIGH HOME RENT LIMIT 443 460 596 735 784 902 1019 For Information Only: FAIR MARKET RENT 443 460 596 735 784 902 1019 50% RENT LIMIT 495 530 636 735 820 904 988 65% RENT LIMIT 624 669 806 922 1009 1095 1180 Sanders County, MT LOW HOME RENT LIMIT 430 525 630 726 811 895 978 HIGH HOME RENT LIMIT 430 528 660 912 998 1082 1166 For Information Only: FAIR MARKET RENT 430 528 660 913 1024 1178 1331 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Sheridan County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only:


FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Silver Bow County, MT LOW HOME RENT LIMIT 436 469 603 726 811 895 978 HIGH HOME RENT LIMIT 436 469 603 788 862 991 1121 For Information Only: FAIR MARKET RENT 436 469 603 788 862 991 1121 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Stillwater County, MT LOW HOME RENT LIMIT 484 502 596 803 855 983 1112 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 577 618 742 856 956 1055 1153 65% RENT LIMIT 730 783 942 1079 1184 1288 1392 * HOME Program Rent held at last year's level. For all HOME projects, the maximum allowable rent is the HUD calculated High HOME Rent Limit and/or Low HOME Rent Limit.


EXHIBIT 7-E U.S. DEPARTMENT OF HUD 06/28/2011 Effective 7/13/2011 STATE: MONTANA ---------------- 2011 HOME PROGRAM RENTS ---------------------- PROGRAM EFFICIENCY 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR Sweet Grass County, MT LOW HOME RENT LIMIT 484 502 596 740 826 911 995 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 498 534 641 740 826 911 995 65% RENT LIMIT 628 674 811 929 1016 1102 1189 Teton County, MT LOW HOME RENT LIMIT 403 481 609 726 811 895 978 HIGH HOME RENT LIMIT 403 481 609 812 927 1066 1166 For Information Only: FAIR MARKET RENT 403 481 609 812 927 1066 1205 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Toole County, MT LOW HOME RENT LIMIT 403 481 609 726 811 895 978 HIGH HOME RENT LIMIT 403 481 609 812 927 1066 1166 For Information Only: FAIR MARKET RENT 403 481 609 812 927 1066 1205 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Treasure County, MT LOW HOME RENT LIMIT 484 502 596 733 818 903 987 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 493 529 635 733 818 903 987 65% RENT LIMIT 623 668 803 919 1006 1091 1177 Valley County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166 Wheatland County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166





EXHIBIT 7-E U.S. DEPARTMENT OF HUD 06/28/2011 Effective 7/13/2011 STATE: MONTANA ---------------- 2011 HOME PROGRAM RENTS ---------------------- PROGRAM EFFICIENCY 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR Wibaux County, MT LOW HOME RENT LIMIT 484 502 596 726 811 895 978 HIGH HOME RENT LIMIT 484 502 596 803 855 983 1112 For Information Only: FAIR MARKET RENT 484 502 596 803 855 983 1112 50% RENT LIMIT 490 525 630 726 811 895 978 65% RENT LIMIT 616 662 797 912 998 1082 1166




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U.S. DEPARTMENT OF HUD 11/16/2011STATE:MONTANA ---------------- 2012 HOME PROGRAM RENTS ----------------------

PROGRAM EFFICIENCY 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR

Billings, MT MSALOW HOME RENT LIMIT 464 551 713 840 937 1034 1130HIGH HOME RENT LIMIT 464 551 713 962 1158 1262 1364For Information Only:FAIR MARKET RENT 464 551 713 962 1158 1332 150550% RENT LIMIT 566 606 727 840 937 1034 113065% RENT LIMIT 715 768 923 1059 1161 1262 1364

Great Falls, MT MSALOW HOME RENT LIMIT 411 495 635 736 821 906 990HIGH HOME RENT LIMIT 411* 495* 635* 859* 1008 1096 1182For Information Only:FAIR MARKET RENT 401 483 619 837 1008 1159 131050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Missoula, MT MSALOW HOME RENT LIMIT 525 572* 691* 798* 891* 983* 1074*HIGH HOME RENT LIMIT 533* 614* 775* 973 1100* 1196* 1291*For Information Only:FAIR MARKET RENT 517 595 751 973 1165 1340 151550% RENT LIMIT 525 562 675 778 868 958 104865% RENT LIMIT 663 711 856 979 1073 1165 1257

Beaverhead County, MTLOW HOME RENT LIMIT 496 531 637 736 821 906 990HIGH HOME RENT LIMIT 498* 581* 763* 912* 998* 1082* 1182For Information Only:FAIR MARKET RENT 383 446 586 758 919 1057 119550% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Big Horn County, MTLOW HOME RENT LIMIT 445 462 596 736 787 905 990HIGH HOME RENT LIMIT 445* 462* 596* 738* 787* 905* 1023*For Information Only:FAIR MARKET RENT 428 445 574 711 758 872 98550% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Blaine County, MTLOW HOME RENT LIMIT 403 481 609 736 821 906 990HIGH HOME RENT LIMIT 403* 481* 609* 812* 927* 1066* 1166*For Information Only:FAIR MARKET RENT 379 453 574 765 874 1005 113650% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

* HOME Program Rent held at last year's level.For all HOME projects, the maximum allowable rent is the HUD calculated High HOME Rent Limit and/or Low HOME Rent Limit.

EXHIBIT 7-E EFFECTIVE DATE: February 9, 2012


January 2012


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NOTE: Any increase in rents for HOME-Assisted units is subject to the provisions of outstanding leases, and in any event, the owner must provide tenants of those units not less than 30 days prior written notice before implementing any change in rents. In addition, any changes in rent levels/schedules must be submitted to the HOME Program in writing at least 30 days in advance of tenant notification for approval.

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Broadwater County, MTLOW HOME RENT LIMIT 445 510 637 736 821 906 990HIGH HOME RENT LIMIT 445* 510* 648* 876* 941* 1082* 1166*For Information Only:FAIR MARKET RENT 394 452 574 776 833 958 108350% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Carter County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Chouteau County, MTLOW HOME RENT LIMIT 403 481 609 736 821 906 990HIGH HOME RENT LIMIT 403* 481* 609* 812* 927* 1066* 1166*For Information Only:FAIR MARKET RENT 379 453 574 765 874 1005 113650% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Custer County, MTLOW HOME RENT LIMIT 389 531 596 736 821 906 990HIGH HOME RENT LIMIT 389* 539* 596* 868* 898* 1033* 1166*For Information Only:FAIR MARKET RENT 374 519 574 836 864 994 112350% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Daniels County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Dawson County, MTLOW HOME RENT LIMIT 484 502 596 776 855 956 1044HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 522 560 672 776 866 956 104465% RENT LIMIT 660 708 852 975 1069 1161 1252




January 2012


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Deer Lodge County, MTLOW HOME RENT LIMIT 445 510 637 736 821 906 990HIGH HOME RENT LIMIT 445* 510* 648* 876* 941* 1082* 1166*For Information Only:FAIR MARKET RENT 394 452 574 776 833 958 108350% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Fallon County, MTLOW HOME RENT LIMIT 484 502 596 776 855 956 1044HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 522 560 672 776 866 956 104465% RENT LIMIT 660 708 852 975 1069 1161 1252

Fergus County, MTLOW HOME RENT LIMIT 434 453 596 722 769 884 990HIGH HOME RENT LIMIT 434* 453* 596* 722* 769* 884* 1000*For Information Only:FAIR MARKET RENT 418 436 574 695 740 851 96250% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Flathead County, MTLOW HOME RENT LIMIT 449 542 651 751 838 925 1011HIGH HOME RENT LIMIT 449* 552* 693* 931* 1033 1121 1208For Information Only:FAIR MARKET RENT 417 513 644 911 1117 1285 145250% RENT LIMIT 506 542 651 751 838 925 101165% RENT LIMIT 638 684 823 943 1033 1121 1208

Gallatin County, MTLOW HOME RENT LIMIT 508 604 761 879 981 1082 1183HIGH HOME RENT LIMIT 508* 604* 786* 1049* 1218 1325 1432For Information Only:FAIR MARKET RENT 466 555 722 964 1265 1455 164550% RENT LIMIT 592 634 761 879 981 1082 118365% RENT LIMIT 750 805 968 1109 1218 1325 1432

Garfield County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182




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Glacier County, MTLOW HOME RENT LIMIT 403 481 609 736 821 906 990HIGH HOME RENT LIMIT 403* 481* 609* 812* 927* 1066* 1166*For Information Only:FAIR MARKET RENT 379 453 574 765 874 1005 113650% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Golden Valley County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Granite County, MTLOW HOME RENT LIMIT 445 510 637 736 821 906 990HIGH HOME RENT LIMIT 445* 510* 648* 876* 941* 1082* 1174For Information Only:FAIR MARKET RENT 427 490 622 841 903 1038 117450% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Hill County, MTLOW HOME RENT LIMIT 387 477 596 776 866 956 1044HIGH HOME RENT LIMIT 387* 477* 596* 859* 912* 1049* 1186*For Information Only:FAIR MARKET RENT 373 460 574 828 879 1011 114350% RENT LIMIT 522 560 672 776 866 956 104465% RENT LIMIT 660 708 852 975 1069 1161 1252

Jefferson County, MTLOW HOME RENT LIMIT 445 510 648 876 941 1082 1207HIGH HOME RENT LIMIT 445* 510* 648* 876* 941* 1082* 1223*For Information Only:FAIR MARKET RENT 394 452 574 776 833 958 108350% RENT LIMIT 603 646 776 897 1001 1104 120765% RENT LIMIT 765 821 988 1132 1244 1354 1464

Judith Basin County, MTLOW HOME RENT LIMIT 403 481 609 736 821 906 990HIGH HOME RENT LIMIT 403* 481* 609* 812* 927* 1066* 1166*For Information Only:FAIR MARKET RENT 379 453 574 765 874 1005 113650% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182




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Lake County, MTLOW HOME RENT LIMIT 496 531 637 736 821 906 990HIGH HOME RENT LIMIT 529* 531* 644* 868* 935* 1075* 1166*For Information Only:FAIR MARKET RENT 471 474 574 774 833 958 108350% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Lewis and Clark County, MTLOW HOME RENT LIMIT 479 548 684 914 1020 1125 1230HIGH HOME RENT LIMIT 479* 548* 684* 993* 1025* 1179* 1333*For Information Only:FAIR MARKET RENT 451 516 644 935 965 1110 125550% RENT LIMIT 616 660 791 914 1020 1125 123065% RENT LIMIT 780 838 1007 1155 1269 1381 1494

Liberty County, MTLOW HOME RENT LIMIT 403 481 609 736 821 906 990HIGH HOME RENT LIMIT 403* 481* 609* 812* 927* 1066* 1166*For Information Only:FAIR MARKET RENT 379 453 574 765 874 1005 113650% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Lincoln County, MTLOW HOME RENT LIMIT 430 528 637 736 821 906 990HIGH HOME RENT LIMIT 430* 528* 660* 912* 998* 1082* 1166*For Information Only:FAIR MARKET RENT 374 459 574 794 890 1024 115750% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

McCone County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Madison County, MTLOW HOME RENT LIMIT 496 531 637 736 821 906 990HIGH HOME RENT LIMIT 498* 581* 763* 912* 998* 1096 1182For Information Only:FAIR MARKET RENT 409 477 627 811 983 1130 127850% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182




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Meagher County, MTLOW HOME RENT LIMIT 496 531 637 736 821 906 990HIGH HOME RENT LIMIT 498* 581* 763* 912* 998* 1082* 1170For Information Only:FAIR MARKET RENT 375 437 574 743 900 1035 117050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Mineral County, MTLOW HOME RENT LIMIT 496 531 637 736 821 906 990HIGH HOME RENT LIMIT 533* 603* 757* 912* 998* 1082* 1166*For Information Only:FAIR MARKET RENT 404 457 574 736 881 1013 114550% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Musselshell County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Park County, MTLOW HOME RENT LIMIT 475 531 637 736 821 906 990HIGH HOME RENT LIMIT 475* 554* 728* 871* 1010 1096 1182For Information Only:FAIR MARKET RENT 424 495 650 777 1028 1182 133650% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Petroleum County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 479 497 590 795 846 973 110050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Phillips County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182




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Pondera County, MTLOW HOME RENT LIMIT 403 481 609 736 821 906 990HIGH HOME RENT LIMIT 403* 481* 609* 812* 927* 1066* 1166*For Information Only:FAIR MARKET RENT 379 453 574 765 874 1005 113650% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Powder River County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Powell County, MTLOW HOME RENT LIMIT 445 510 637 736 821 906 990HIGH HOME RENT LIMIT 445* 510* 648* 876* 941* 1082* 1166*For Information Only:FAIR MARKET RENT 394 452 574 776 833 958 108350% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Prairie County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 479 497 590 795 846 973 110050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Ravalli County, MTLOW HOME RENT LIMIT 497 533 640 738 823 909 994HIGH HOME RENT LIMIT 505* 550* 706* 913* 1014 1100 1186For Information Only:FAIR MARKET RENT 478 521 669 876 1037 1193 134850% RENT LIMIT 497 533 640 738 823 909 99465% RENT LIMIT 626 673 809 926 1014 1100 1186

Richland County, MTLOW HOME RENT LIMIT 484 502 596 738 823 909 994HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 497 533 640 738 823 909 99465% RENT LIMIT 626 673 809 926 1014 1100 1186




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Roosevelt County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Rosebud County, MTLOW HOME RENT LIMIT 443 460 596 735 784 902 1005*HIGH HOME RENT LIMIT 443* 460* 596* 735* 784* 902* 1019*For Information Only:FAIR MARKET RENT 426 443 574 708 755 868 98250% RENT LIMIT 501 536 643 743 830 916 100165% RENT LIMIT 631 678 816 934 1023 1109 1196

Sanders County, MTLOW HOME RENT LIMIT 430 528 637 736 821 906 990HIGH HOME RENT LIMIT 430* 528* 660* 912* 998* 1082* 1166*For Information Only:FAIR MARKET RENT 374 459 574 794 890 1024 115750% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Sheridan County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Silver Bow County, MTLOW HOME RENT LIMIT 436 469 603 736 821 906 990HIGH HOME RENT LIMIT 436* 469* 603* 788* 862* 991* 1121*For Information Only:FAIR MARKET RENT 415 446 574 750 821 944 106750% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Stillwater County, MTLOW HOME RENT LIMIT 484 502 596 803 855 983 1112HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 605 648 777 898 1002 1106 120965% RENT LIMIT 766 823 989 1134 1245 1356 1466




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Sweet Grass County, MTLOW HOME RENT LIMIT 484 502 596 776 855 956 1044HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 469 486 577 778 827 951 107550% RENT LIMIT 522 560 672 776 866 956 104465% RENT LIMIT 660 708 852 975 1069 1161 1252

Teton County, MTLOW HOME RENT LIMIT 403 481 609 736 821 906 990HIGH HOME RENT LIMIT 403* 481* 609* 812* 927* 1066* 1166*For Information Only:FAIR MARKET RENT 379 453 574 765 874 1005 113650% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Toole County, MTLOW HOME RENT LIMIT 403 481 609 736 821 906 990HIGH HOME RENT LIMIT 403* 481* 609* 812* 927* 1066* 1166*For Information Only:FAIR MARKET RENT 379 453 574 765 874 1005 113650% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Treasure County, MTLOW HOME RENT LIMIT 484 502 596 742 828 914 999HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 500 535 642 742 828 914 99965% RENT LIMIT 630 676 813 931 1019 1106 1193

Valley County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182

Wheatland County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 479 497 590 795 846 973 110050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182




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Wibaux County, MTLOW HOME RENT LIMIT 484 502 596 736 821 906 990HIGH HOME RENT LIMIT 484* 502* 596* 803* 855* 983* 1112*For Information Only:FAIR MARKET RENT 466 483 574 774 823 946 107050% RENT LIMIT 496 531 637 736 821 906 99065% RENT LIMIT 625 671 807 923 1010 1096 1182




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EXHIBIT 7-F

PART 1. SUMMARY OF FAMILY INCOME DATA

1. Name 2. Identification

ASSETS

Family Member

Asset Description

Current Cash Value

Income from Assets

3. Total Net Family Assets 3.

4. Total Actual Asset Income................................................................................. 4.

5. If line 3 is greater than $5,000, multiply line 3 by ____ (Passbook Rate) and enter result here; otherwise leave blank. 5.

ANTICIPATED ANNUAL INCOME

Family Member

a. Wages / Salaries

b. Benefits / Pensions

c. Public Assistance

d. Other Income

e. Asset Income

Enter the

greater of

line 4 or 5

from above

in e (below).

6. Totals a. b. c. d. e.

7. Enter total of items from 6a through 6e. This is Annual Income ............................ 7.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7F-i May 2007

EXHIBIT 7-F (CONTINUED)

PART II: CALCULATING ADJUSTED INCOME

8. Annual income (from line 7) 8.

9. Number of family members (except head or spouse) under 18, disabled, handicapped, or full-time students.

9.

10. Multiply line 9 by 480 10.

11. Child care deduction (reasonable expenses for children age 12 and under)

11.

(If family has Handicap Assistance Expense or qualifies as an elderly family, proceed to line 12; otherwise, skip to line 20).

12. Enter Handicap Assistance Expense. 12.

13. Multiply line 8 by 0.03. 13.

14. Subtract line 13 from line 12; if negative, enter 0. 14.

15. Enter amount earned by family member enabled to work as a result of Handicap Assistance Expense.

15.

16. Enter the lesser of lines 14 or 15. This is the Handicap Assistance Allowance

16.

* * * FILL IN LINES 17 THROUGH 19 FOR ELDERLY FAMILY ONLY * * *

17. Enter total medical expenses. 17.

18. Allowable medical expenses: If the household reported no expenses in line 12, enter line

17 minus line 13.

If the household reported expenses in line 12, but line 14 is zero, enter line 17 minus (line 13 minus 12)

If the household reported expenses in line 12, and line 14 is greater than zero, enter total from line 17.

18.

19. Enter $400. 19. $ 400.00

20. Add lines 10, 11, 16, 18 and 19. 20.

21. Subtract line 20 from line 8. This is Adjusted Income. 21.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7F-ii May 2007


7G-i

EXHIBIT 7-G

Model Lease for Housing Choice Voucher – PART A (24 CFR 982.308)

To be used if owner does not have a standard written lease agreement which includes all listed items.

Part A of Lease: Contract Information 1. Contents of Lease. This lease consists of:

Part A: Contract information Part B: Tenancy addendum (lease language required by HUD) Part C: The following additional provisions (as required by the

owner): (Specify any additional provisions, e.g., by designating any exhibits or attachments to the lease.)

2. Parties to Lease

Tenant

Owner

3. Name of Housing Agency (HA)

4. Unit Rented. This is a lease for the following dwelling unit:

Address

Apartment

City State Zip

5. Members of Household. The following persons may reside in the unit. No other persons may reside in the unit without prior written approval by the owner and the HA.

6. Term of the Lease (1 year minimum term) The initial lease term begins on

The initial lease term ends on

Renewal Provisions After the initial lease term, the lease term shall renew automatically as follows:

Month-to-month tenancy:

Other:

7. Rent to Owner The initial rent to owner is ______________. The amount of rent to owner is subject to change by MDOC during the lease term in accordance with HUD Regulations, the tenancy addendum, and HAP Contract.

8. Utilities and Appliances The owner shall provide the utilities and appliances as indicated below by an “O” without any additional charge to the tenant. The tenant shall provide the utilities and appliances as indicated below by a “T”.

Item Paid by Heating Natural gas Bottle gas Oil/Electric Coal/Other Cooking Natural gas Bottle gas Oil/Electric Coal/Other Other Electric Air Conditioning Water Heating Natural gas Bottle gas Oil/Electric Coal/Other Water Sewer Trash Collection

Range/Microwave Refrigerator Other (specify)

9. Security Deposit The security deposit is The tenant has paid the security deposit to the owner.

10. Other Owner Charges

(Insert description of any other charges that may be assessed for items not included in rent to owner.)

Signatures:

Owner:

Tenant:


7G-ii

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form HUD-52641-A (3/2000)ref Handbook 7420.8Previous editions are obsolete Page 1 of 3

1. Section 8 Voucher Programa. The owner is leasing the contract unit to the tenant for

occupancy by the tenant’s family with assistance for atenancy under the Section 8 housing choice voucher pro-gram (voucher program) of the United States Departmentof Housing and Urban Development (HUD).

b. The owner has entered into a Housing Assistance PaymentsContract (HAP contract) with the PHA under the voucherprogram. Under the HAP contract, the PHA will makehousing assistance payments to the owner to assist thetenant in leasing the unit from the owner.

2. Leasea. The owner has given the PHA a copy of the lease, including

any revisions agreed by the owner and the tenant. Theowner certifies that the terms of the lease are in accordancewith all provisions of the HAP contract and that the leaseincludes the tenancy addendum.

b. The tenant shall have the right to enforce the tenancyaddendum against the owner. If there is any conflictbetween the tenancy addendum and any other provisions ofthe lease, the language of the tenancy addendum shallcontrol.

3. Use of Contract Unita. During the lease term, the family will reside in the contract

unit with assistance under the voucher program.

b. The composition of the household must be approved by thePHA. The family must promptly inform the PHA of thebirth, adoption or court-awarded custody of a child. Otherpersons may not be added to the household without priorwritten approval of the owner and the PHA.

c. The contract unit may only be used for residence by thePHA-approved household members. The unit must be thefamily’s only residence. Members of the household mayengage in legal profitmaking activities incidental to pri-mary use of the unit for residence by members of the family.

d. The tenant may not sublease or let the unit.

e. The tenant may not assign the lease or transfer the unit.

4. Rent to Ownera. The initial rent to owner may not exceed the amount

approved by the PHA in accordance with HUD require-ments.

b. Changes in the rent to owner shall be determined by theprovisions of the lease. However, the owner may not raisethe rent during the initial term of the lease.

c. During the term of the lease (including the initial term of thelease and any extension term), the rent to owner may at notime exceed:(1) The reasonable rent for the unit as most recently

determined or redetermined by the PHA in accordancewith HUD requirements, or

(2) Rent charged by the owner for comparable unassistedunits in the premises.

5. Family Payment to Ownera. The family is responsible for paying the owner any portion

of the rent to owner that is not covered by the PHA housingassistance payment.

b. Each month, the PHA will make a housing assistancepayment to the owner on behalf of the family in accordancewith the HAP contract. The amount of the monthly housingassistance payment will be determined by the PHA inaccordance with HUD requirements for a tenancy under theSection 8 voucher program.

c. The monthly housing assistance payment shall be creditedagainst the monthly rent to owner for the contract unit.

d. The tenant is not responsible for paying the portion of rentto owner covered by the PHA housing assistance paymentunder the HAP contract between the owner and the PHA. APHA failure to pay the housing assistance payment to theowner is not a violation of the lease. The owner may notterminate the tenancy for nonpayment of the PHA housingassistance payment.

e. The owner may not charge or accept, from the family orfrom any other source, any payment for rent of the unit inaddition to the rent to owner. Rent to owner includes allhousing services, maintenance, utilities and appliances tobe provided and paid by the owner in accordance with thelease.

f. The owner must immediately return any excess rent pay-ment to the tenant.

6. Other Fees and Chargesa. Rent to owner does not include cost of any meals or

supportive services or furniture which may be provided bythe owner.

b. The owner may not require the tenant or family members topay charges for any meals or supportive services or furni-ture which may be provided by the owner. Nonpayment ofany such charges is not grounds for termination of tenancy.

c. The owner may not charge the tenant extra amounts foritems customarily included in rent to owner in the locality,or provided at no additional cost to unsubsidized tenants inthe premises.

7. Maintenance, Utilities, and Other Servicesa. Maintenance

(1) The owner must maintain the unit and premises inaccordance with the HQS.

(2) Maintenance and replacement (including redecora-tion) must be in accordance with the standard practicefor the building concerned as established by the owner.

b. Utilities and appliances(1) The owner must provide all utilities needed to comply

with the HQS.

(2) The owner is not responsible for a breach of the HQScaused by the tenant’s failure to:

Tenancy AddendumSection 8 Tenant-Based AssistanceHousing Choice Voucher Program

(To be attached to Tenant Lease)

U.S. Department of Housingand Urban DevelopmentOffice of Public and Indian Housing

EXHIBIT 7-G


HOME Administration ManualMay 2007


(a) Pay for any utilities that are to be paid by thetenant.

(b) Provide and maintain any appliances that are to beprovided by the tenant.

c. Family damage. The owner is not responsible for a breachof the HQS because of damages beyond normal wear andtear caused by any member of the household or by a guest.

d. Housing services. The owner must provide all housingservices as agreed to in the lease.

8. Termination of Tenancy by Ownera. Requirements. The owner may only terminate the tenancy

in accordance with the lease and HUD requirements.

b. Grounds. During the term of the lease (the initial term ofthe lease or any extension term), the owner may onlyterminate the tenancy because of:

(1) Serious or repeated violation of the lease;(2) Violation of Federal, State, or local law that imposes

obligations on the tenant in connection with the occu-pancy or use of the unit and the premises;

(3) Criminal activity or alcohol abuse (as provided inparagraph c); or

(4) Other good cause (as provided in paragraph d).c. Criminal activity or alcohol abuse.

(1) The owner may terminate the tenancy during the termof the lease if any member of the household, a guest oranother person under a resident’s control commits anyof the following types of criminal activity:

(a) Any criminal activity that threatens the health orsafety of, or the right to peaceful enjoyment of thepremises by, other residents (including propertymanagement staff residing on the premises);

(b) Any criminal activity that threatens the health orsafety of, or the right to peaceful enjoyment oftheir residences by, persons residing in the imme-diate vicinity of the premises;

(c) Any violent criminal activity on or near the pre-mises; or

(d) Any drug-related criminal activity on or near thepremises.

(2) The owner may terminate the tenancy during the termof the lease if any member of the household is:

(a) Fleeing to avoid prosecution, or custody or con-finement after conviction, for a crime, or attemptto commit a crime, that is a felony under the lawsof the place from which the individual flees, orthat, in the case of the State of New Jersey, is a highmisdemeanor; or

(b) Violating a condition of probation or parole underFederal or State law.

(3) The owner may terminate the tenancy for criminalactivity by a household member in accordance withthis section if the owner determines that the householdmember has committed the criminal activity, regard-less of whether the household member has been ar-rested or convicted for such activity.

(4) The owner may terminate the tenancy during the term ofthe lease if any member of the household has engaged inabuse of alcohol that threatens the health, safety or rightto peaceful enjoyment of the premises by other residents.

d. Other good cause for termination of tenancy(1) During the initial lease term, other good cause for

termination of tenancy must be something the familydid or failed to do.

(2) During the initial lease term or during any extensionterm, other good cause includes:

(a) Disturbance of neighbors,

(b) Destruction of property, or

(c) Living or housekeeping habits that cause damageto the unit or premises.

(3) After the initial lease term, such good cause includes:(a) The tenant’s failure to accept the owner’s offer of

a new lease or revision;

(b) The owner’s desire to use the unit for personal orfamily use or for a purpose other than use as aresidential rental unit; or

(c) A business or economic reason for termination ofthe tenancy (such as sale of the property, renova-tion of the unit, the owner’s desire to rent the unitfor a higher rent).

e. Eviction by court action. The owner may only evict thetenant by a court action.

f. Owner notice of grounds(1) At or before the beginning of a court action to evict the

tenant, the owner must give the tenant a notice thatspecifies the grounds for termination of tenancy. Thenotice may be included in or combined with any ownereviction notice.

(2) The owner must give the PHA a copy of any ownereviction notice at the same time the owner notifies thetenant.

(3) Eviction notice means a notice to vacate, or a complaintor other initial pleading used to begin an eviction actionunder State or local law.

9. Lease: Relation to HAP ContractIf the HAP contract terminates for any reason, the lease termi-nates automatically.

10. PHA Termination of AssistanceThe PHA may terminate program assistance for the family forany grounds authorized in accordance with HUD requirements.If the PHA terminates program assistance for the family, thelease terminates automatically.

11. Family Move OutThe tenant must notify the PHA and the owner before thefamily moves out of the unit.

12. Security Deposita. The owner may collect a security deposit from the tenant.

(However, the PHA may prohibit the owner from collectinga security deposit in excess of private market practice, or inexcess of amounts charged by the owner to unassistedtenants. Any such PHA-required restriction must be speci-fied in the HAP contract.)

EXHIBIT 7-G




b. When the family moves out of the contract unit, the owner,subject to State and local law, may use the security deposit,including any interest on the deposit, as reimbursement forany unpaid rent payable by the tenant, any damages to theunit or any other amounts that the tenant owes under thelease.

c. The owner must give the tenant a list of all items chargedagainst the security deposit, and the amount of each item.After deducting the amount, if any, used to reimburse theowner, the owner must promptly refund the full amount ofthe unused balance to the tenant.

d. If the security deposit is not sufficient to cover amounts thetenant owes under the lease, the owner may collect thebalance from the tenant.

13. Prohibition of DiscriminationIn accordance with applicable equal opportunity statutes, Ex-ecutive Orders, and regulations, the owner must not discrimi-nate against any person because of race, color, religion, sex,national origin, age, familial status or disability in connectionwith the lease.

14. Conflict with Other Provisions of Leasea. The terms of the tenancy addendum are prescribed by HUD

in accordance with Federal law and regulation, as a condi-tion for Federal assistance to the tenant and tenant’s familyunder the Section 8 voucher program.

b. In case of any conflict between the provisions of the tenancyaddendum as required by HUD, and any other provisions ofthe lease or any other agreement between the owner and thetenant, the requirements of the HUD-required tenancyaddendum shall control.

15. Changes in Lease or Renta. The tenant and the owner may not make any change in the

tenancy addendum. However, if the tenant and the owneragree to any other changes in the lease, such changes must bein writing, and the owner must immediately give the PHA acopy of such changes. The lease, including any changes,must be in accordance with the requirements of the tenancyaddendum.

b. In the following cases, tenant-based assistance shall not becontinued unless the PHA has approved a new tenancy inaccordance with program requirements and has executed anew HAP contract with the owner:

(1) If there are any changes in lease requirements governingtenant or owner responsibilities for utilities or appli-ances;

(2) If there are any changes in lease provisions governingthe term of the lease;

(3) If the family moves to a new unit, even if the unit is in thesame building or complex.

c. PHA approval of the tenancy, and execution of a new HAPcontract, are not required for agreed changes in the leaseother than as specified in paragraph b.

d. The owner must notify the PHA of any changes in the amountof the rent to owner at least sixty days before any suchchanges go into effect, and the amount of the rent to ownerfollowing any such agreed change may not exceed the reason-able rent for the unit as most recently determined or redeter-mined by the PHA in accordance with HUD requirements.

16. NoticesAny notice under the lease by the tenant to the owner or by theowner to the tenant must be in writing.

17. DefinitionsContract unit . The housing unit rented by the tenant with assistanceunder the program.Family. The persons who may reside in the unit with assistanceunder the program.

HAP contract. The housing assistance payments contract betweenthe PHA and the owner. The PHA pays housing assistance paymentsto the owner in accordance with the HAP contract.

Household. The persons who may reside in the contract unit. Thehousehold consists of the family and any PHA-approved live-in aide.(A live-in aide is a person who resides in the unit to provide necessarysupportive services for a member of the family who is a person withdisabilities.)

Housing quality standards (HQS). The HUD minimum qualitystandards for housing assisted under the Section 8 tenant-basedprograms.

HUD. The U.S. Department of Housing and Urban Development.

HUD requirements. HUD requirements for the Section 8 program.HUD requirements are issued by HUD headquarters, as regulations,Federal Register notices or other binding program directives.

Lease. The written agreement between the owner and the tenant forthe lease of the contract unit to the tenant. The lease includes thetenancy addendum prescribed by HUD.

PHA. Public Housing Agency.Premises. The building or complex in which the contract unit islocated, including common areas and grounds.

Program. The Section 8 housing choice voucher program.Rent to owner. The total monthly rent payable to the owner for thecontract unit. The rent to owner is the sum of the portion of rentpayable by the tenant plus the PHA housing assistance payment tothe owner.

Section 8. Section 8 of the United States Housing Act of 1937 (42United States Code 1437f).Tenant. The family member (or members) who leases the unit fromthe owner.

Voucher program. The Section 8 housing choice voucher program.Under this program, HUD provides funds to an PHA for rent subsidyon behalf of eligible families. The tenancy under the lease will beassisted with rent subsidy for a tenancy under the voucher program.

EXHIBIT 7-G



EXHIBIT 7-G

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7G-vi

EXHIBIT 7-G



HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce MAY 2007

7G-vii

EXHIBIT 7-G

LEASE ADDENDUM

TENANT

LANDLORD UNIT NO. & ADDRESS

This lease addendum adds the following paragraphs to the Lease between the Tenant and Landlord referred to above.

A. Purpose of the Addendum. The lease for the above-referenced unit is being

amended to include the provisions of this addendum because the Tenant has been approved to receive rental assistance under the [program administrator’s] HOME Rental Assistance Program. Under the Rental Assistance Program, the [program administrator] will make monthly payments to the Landlord on behalf of the Tenant. The Lease has been signed by the parties on the condition that the [program administrator] and Landlord will promptly execute a HOME Rental Assistance Contract. This Lease shall not become effective unless the Contract has been executed by both the Landlord and the [program administrator], effective the first day of the term of the Lease.

B. Conflict with Other Provisions of the Lease. In case of any conflict between the provisions of this Addendum and other sections of the Lease, the provisions of this Addendum shall prevail.

C. Terms of the Lease. The term shall begin on and shall continue until: (1) the Lease is terminated by the Landlord in accordance with applicable state and local Tenant/Landlord laws; (2) the Lease is terminated by the Tenant in accordance with the Lease or by mutual agreement during the term of the Lease; or (3) termination of the HOME Rental Assistance Program Contract by the [program administrator].

D. Rental Assistance Payment. Each month the [program administrator] will make a rental assistance payment to the Landlord on behalf of the Tenant. This payment shall be credited by the Landlord toward the monthly rent payable by the Tenant. The balance of the monthly rent shall be paid by the Tenant.

E. Security Deposit (1) The (Tenant/[program administrator]) has deposited $____________ with the

Landlord as a Security Deposit. The Landlord will hold this security deposit


7G-viii

during the period the Tenant occupies the dwelling unit under the Lease. The Landlord shall comply with state and local laws regarding interest payments on security deposits.

(2) After the Tenant has moved from the dwelling unit, the Landlord may, subject to state and local laws, use the security deposit, including any interest on the deposit, as reimbursement for rent or any other amounts payable by the tenant under the Lease. The Landlord will give the Tenant a written list of all items charged against the security deposit and the amount of each item. After deducting the amount used as reimbursement to the Landlord, the Landlord shall promptly refund the full amount of the balance to the (Tenant/[program administrator]).

F. Utilities and Appliances. The utilities and appliances listed in Column 1 are

provided by the Landlord and included in the rent. The utilities and appliances listed in Column 2 below are not included in the rent and are paid separately by the Tenant.

UTILITY/APPLIANCE Included in

Rent Tenant

Paid

Garbage Collection

Water/Sewer

Heating Fuel (specify)

Lights, electric

Cooking Fuel (specify)

Other (specify)

Refrigerator

Stove/Range

G. Household Members. Household members authorized to live in this unit are listed below. The Tenant may not permit other persons to join the Household without notifying the [program administrator] and obtaining the Landlord's permission. Household members: ____________________________________

H. Housing Quality Standards. The Landlord shall maintain the dwelling unit, common areas, equipment, facilities and appliances in decent, safe, and sanitary condition (as determined by Section 8 Housing Quality Standards).

I. Termination of Tenancy. The Landlord may evict the Tenant following applicable state and local laws. The landlord must provide the Tenant with at least 30 days' written notice of the termination. The Landlord must notify the [program administrator] in writing when eviction proceedings are begun. This


7G-ix

may be done by providing the [program administrator] with a copy of the required notice to the Tenant.

J. Prohibited Lease Provision. Any provision of the Lease which falls within the classifications below shall not apply and not be enforced by the Landlord. (1) Confession of Judgment. Consent by the Tenant to be sued, to admit guilt, or

to a judgment in favor of the landlord in a lawsuit brought in connection with the Lease.

(2) Treatment of Property. Agreement by the Tenant that the Landlord may take or hold the Tenant's property, or may sell such property without notice to the Tenant and a court decision on the rights of the parties.

(3) Excusing the Landlord from Responsibility. Agreement by the Tenant not to hold the Landlord or Landlord's agent legally responsible for any action or failure to act, whether intentional or negligent.

(4) Waiver of Legal Notice. Agreement by the Tenant that the Landlord may institute a lawsuit without notice to the Tenant.

(5) Waiver of Court Proceedings for Eviction. Agreement by the Tenant that the Landlord may evict the Tenant Family (i) without instituting a civil court proceedings in which the Family has the opportunity to present a defense, or (ii) before a decision by the court on the rights of the parties.

(6) Waiver of Jury Trial. Authorization to the Landlord to waive the Tenant's right to a trial by jury.

(7) Waiver of Right to Appeal Court Decision. Authorization to the Landlord to waive the Tenant's right to appeal a court decision or waive the Tenant's right to sue to prevent a judgment from being put into effect.

(8) Tenant Chargeable with Cost of Legal Actions Regardless of Outcome of the Lawsuit. Agreement by the Tenant to pay lawyer's fees or other legal costs whenever the Landlord decides to sue, whether or not the Tenant wins.

K. Nondiscrimination. The Landlord shall not discriminate against the Tenant in

the provision of services, or in any other manner, on the grounds of age, race, color, creed, religion, sex, handicap, national origin, or familial status.


7G-x

TENANT SIGNATURES LANDLORD SIGNATURES

By: (Type or Print Name of Tenant Representative)

LANDLORD NAME:

(Signature/Date)

By: (Type or Print Name of Landlord Representative)

By: (Type or Print Name of Tenant Representative)

(Signature/Date)

(Signature/Date)

EXHIBIT 7-H

DEED RESTRICTION AGREEMENT HOME Investment Partnerships Program

by and between

(name of grantee)

and

________________________________, Owner,

________________________________, Property A. PURPOSE

This Land Use Restriction agreement ("Agreement") is made and entered into this ______ day of ________________, 2____, by and between (name of grantee) and ________________________________________________________________ Whereas the (Grantee) has loaned to the Owner HOME funds in the amount of ___________________________________ dollars for the purpose of rehabilitating a unit rental housing project commonly known and addressed as _____________________________________________________ (said land and improvements are hereinafter collectively referred to as the "Property") and legally described in Attachment "A".

And, whereas, each unit for which the HOME funds is used will hereafter be considered an Assisted Unit; and in the Property, there will be _____ assisted units.

And, whereas, the Owner must agree to continuously comply with certain occupancy and rent restrictions for each Assisted Unit for the Term of this Agreement; and the parties hereto have entered into this Agreement to evidence Owner's agreement to comply with such restriction.

Now therefore, in consideration of the loan and other good and valuable consideration, the parties hereto do hereby agree as follows. B. DEFINITIONS

1. Agreement means this Land Use Restriction Agreement, as it may from time to time be amended.

2. Assisted Unit means any unit for which HOME funds is used for rehabilitation.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7H-i May 2007

3. Grantee means (the legal name of the Grantee)

4. HOME means HOME Investment Partnerships Program.

5. Low Income Families means families and individuals whose Annual Income

do not exceed 80 percent of area median income in the area in which the Property is located, as determined by the Secretary of Housing and Urban Development.

6. Owner means _____________as set forth at the beginning of this

agreement, or any successor in title to the property.

7. Qualified Tenant means a family or individual tenant of a qualifying unit who satisfies the requirements of Section C Part 2 of this Agreement with respect to such Qualifying Unit.

8. Qualifying Unit means a Unit that:

a. is rented to either a Low Income Family or Very Low Income Family

and b. is used in complying with the Very Low Income and Low Income

occupancy requirements of Section C Part 3.

9. Term means a period commencing on the date hereof and continuing until the earliest to occur of the following:

a. ______ years, beginning after the completion of rehabilitation as

evidenced by the Certification of Completion;

10. Very Low-Income Families means families and individuals whose annual incomes do not exceed 50% of median income for the area in which the Property is located, as determined by the Secretary of Housing and Urban Development.

C. USE AND OCCUPANCY OF THE PROPERTY

1. It is agreed that during the Term, the Owner will maintain the Property as rental housing and will rent or hold available for rental each Assisted Unit on a continuous basis.

2. The Owner will make continuously available for occupancy by Low Income

Families as Qualifying Units, not less than _____ Units, and not less than _____ Units shall be made available for occupancy by Very Low Income Families.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7H-ii May 2007

a. The determination of whether the Annual Income of a family or individual occupying or seeking to occupy a Qualifying Unit meets the applicable income limit shall be made prior to admission to occupancy of such family or individual in a Qualifying Unit. Thereafter such determinations shall be made at least annually on the basis of an examination or reexamination of the current income of the family or individual.

b. If the Annual Income of a Qualified Tenant which is a Very Low-

Income Family, shall be determined upon reexamination to exceed the applicable income limit for Very Low-Income Families, but not the applicable income limit for Low Income Families, the Unit shall be counted as occupied by a Qualified Tenant, which is a Low Income Family other than a Very Low-Income Family during such family's or individual's continuing occupancy of such Unit.

Owner shall be required to make the next available Qualifying Unit available for occupancy in accordance with clause (3) below.

3. If upon reexamination, neither the required occupancy by Very Low-Income

Families nor the required occupancy by Low Income Families is met, preference must be given to Very Low-Income Families in the renting of each Assisted Unit which becomes available until the required occupancy is met.

4. Anything to the contrary in the foregoing notwithstanding, Owner will not

terminate the occupancy of any tenants in occupancy on the date hereof that are not Low Income Families or Very Low-Income Families for purposes of meeting the requirements of this Section.

D. RENT LIMITATIONS FOR QUALIFIED TENANTS

1. Rents charged:

a. The rent charged by Owner for Qualifying Units occupied by Very Low Income Families shall not exceed the maximum rent for Qualified Tenants who are Very Low Income Families for units of the applicable size in the area. Such maximum rent shall be not greater than 30% of the adjusted income of a family whose income equals 50% of the area median income, with adjustment for family size based upon unit type.

b. The rent charged by Owner for Qualifying Units occupied by Low

Income Families other than Very Low-Income Families shall not exceed the maximum rent for Qualified Tenants who are Low Income Families other than Very Low-Income Families for units of the applicable size in the area. Such maximum rent shall be not greater than 30% of the adjusted income of a family whose income equals 65% of area median income, with adjustment for family size based upon unit type.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7H-iii May 2007

2. Owner may make a written request to the Grantee for the schedule of

maximum rents applicable to the Property as of the date hereof, and the Grantee shall provide such schedule within thirty days of the date that the Grantee receives such request. Such rents shall be subject to annual adjustment upon publication by the U.S. Department of Housing and Urban Development of revised income limits for area Low Income and very low-income families, which adjustment shall be based upon changes in the applicable area median income limits.

E. LEASE PROVISIONS

1. Lease provisions. All tenant leases entered into with Qualified Tenants during the Term shall contain provisions wherein each individual lessee

a. certifies the accuracy of the information provided in connection with

the examination or reexamination of Annual Income of the household of such lessee, and

b. agrees that the Annual Income and other eligibility requirements shall

be deemed substantial and material obligations of his or her tenancy, that he or she will comply promptly with all requests for information with respect thereto from Owner or the Grantee and that his or her failure to provide accurate information regarding such requirements (regardless of whether such inaccuracy is intentional or unintentional) or refusal to comply with a request for information with respect thereto shall be deemed a violation of a substantial obligation of his or her tenancy and constitute cause for immediate termination thereof.

2. Examination and Reexamination of Incomes

a. Owner shall be responsible for determination of the Annual Income

and family composition of Qualified Tenants, and for reexamination of Annual Income and family composition of Qualified tenants at least annually in accordance with procedures prescribed by the Grantee.

b. As a condition of admission to occupancy of a qualifying Unit, Owner

shall require household head, and other such household members as it designates, to execute an approved release and consent authorizing any depository or private source of income, or any Federal, State or local agency, to furnish or release to Owner and to the Grantee such information as Owner or the Grantee determines to be necessary. The use of disclosure of information obtained from a household or from another source pursuant to this release and consent shall be limited to purposes directly connected with administration of this Agreement.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7H-iv May 2007

c. Owner shall not be deemed to be in violation of this Agreement if, in determining Annual Income and Family composition of a Qualified Tenant, 1) Owner has relied in good-faith upon information which is

supplied to Owner by the Tenant, 2) Owner has no reason to believe such information is false, and 3) Owner has complied with all requirements with respect to

verification of household income and family composition.

3. Certification by Owner. During the term, on each anniversary of the date upon which this Agreement was first recorded in the land records of the jurisdiction in which the Property is located, or upon such other annual date as established, Owner shall submit to the Grantee a certification in a form prescribed by the Grantee, as to Owner's compliance with all of the terms and provisions of this Agreement.

4. Maintenance of Documents. All tenant lists, applications, leases, waiting lists,

income examinations and reexaminations relating to the Property shall at all times be kept separate and identifiable from any other business of Owner which is unrelated to the Property, and shall be maintained, in a reasonable condition for proper audit and subject to examination and photocopying during business hours by representatives of the City.

5. Compliance Review. The Grantee periodically will monitor Owner's

compliance with the requirements of this Agreement. In conducting its compliance review, the Grantee will rely primarily on information obtained from Owner's records and reports, findings from on-site monitoring, and audit reports. The Grantee may also consider relevant information gained from other sources, including litigation and citizens complaints.

6. Inspections.

a. During the Term, beginning after completion of rehabilitation, the

Grantee or its representative, shall inspect the Property annually to document the property continues to comply with Section 8 Housing Quality Standards.

b. If at any time during the Term the property is found to be in

noncompliance with Section 8 Housing Quality Standards, Owner agrees 1) to complete the repairs necessary to bring the property into

compliance within 30 days of notification by the Grantee; 2) notify the Grantee that the repairs have been completed; and 3) ask for reinspection.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7H-v May 2007

7. Releases. The Grantee shall execute such documents as may be required to evidence release of the Property from the covenants and restrictions set forth in this Agreement based upon the expiration of the Term as provided.

F. REPRESENTATIONS AND WARRANTIES OF OWNER

1. a. Owner represents and warrants that he has validly executed this Agreement and the same constitutes the binding obligation of Owner. Owner has full power, authority and capacity to enter into this Agreement, to carry out Owner's obligations as described in this Agreement and to assume responsibility for compliance with all applicable federal rules and regulations.

b. To the best of Owner's knowledge, the making of this Agreement and

Owner's obligations hereunder 1) will not violate any contractual covenants or restrictions

between the Owner or any third party affecting the Property; 2) will not conflict with any of the instruments that create or

establish Owner's authority; 3) will not conflict with any applicable public or private restriction; 4) do not require any consent or approval or any public or private

authority which has not already been obtained; and 5) are not threatened with invalidity or unenforceability by any

action, proceeding or investigation pending or threatened, by or against the Owner, without regard to capacity, any person with whom Owner may be jointly or severally liable, or the Property or any part thereof.

c. No litigation or proceedings are pending or to the best of owner's

knowledge, threatened against Owner which if adversely determined could individually or in the aggregate have an adverse effect on title to or the use and enjoyment or value of the Property, or any portion thereof, or which could in any way interfere with the consummation of this Agreement.

2. Owner agrees to indemnify and hold harmless the Grantee from and against

all liabilities, losses, claims, damages, judgments, costs and expenses (including, without limitation, reasonable attorney's fees) incurred by the Grantee as a result of any material inaccuracy in any of the representations and warranties contained in Sections C & D.

G. ENFORCEMENT AND REMEDIES.

1. If the Owner defaults in the performance of any of its obligations under this Agreement or breaches any covenant, agreement or restriction set forth herein, and if such default remains uncured for a period of sixty (60) days

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7H-vi May 2007

after notice thereof shall have been given by the Grantee (or for any extended period approved in writing by the Grantee if the default or breach stated in such notice can be corrected, but not within such 60 day period, unless Owner does not commence such correction or commences such correction with such 60 day period but thereafter does not diligently pursue the same to completion within such extended period), the Grantee shall be entitled to apply to any court having jurisdiction of the subject matter for specific performance of this Agreement, for an injunction against any violation of this Agreement, or for such other relief as may be appropriately compensated by monetary damages in the event of Owner's default. The Grantee shall be entitled to its reasonable attorneys' fees in any such judicial action in which the Grantee shall prevail.

2. Each right, power and remedy of the Grantee provided for in this Agreement

now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Grantee of any one or more of the rights, powers or remedies provided for in this Agreement or now or hereafter existing at law or in equity or by statute of otherwise shall not preclude the simultaneous or later exercise by the Grantee of any or all such other rights, powers or remedies.

H. MISCELLANEOUS

1. Notices. All notices required or permitted to be given under this Agreement must be in writing and will be deemed to have been duly given if delivered personally or mailed, postage prepaid, by registered or certified United States mail, return receipt requested, addressed to the parties at the following address:

FOR THE GRANTEE: FOR THE OWNER: (Grantee Address) ________________________ ________________________ ________________________

2. Binding Effect; Covenants Running with the Land. During the Term, this

Agreement and the covenants, reservations and restrictions contained herein shall be deemed covenants running with the land for the benefit of the Grantee and its successors, and shall pass to and be binding upon Owner’s heirs, assigns and successors in title to the Property, or if the property shall not include title to land, but shall include a leasehold interest in land, this Agreement and the covenants, reservations et al shall bind the leasehold interest as well as the Property and shall pass to and be binding upon all heirs, assigns and successors to such interests; provided, however, that upon expiration of the Term in accordance with the terms hereof said

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7H-vii May 2007

covenants, reservations and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instruments. If a portion or portions of the Property are conveyed, all of such covenants, reservations and restrictions shall run to each portion of the Property. The Grantee at Owners cost and expense, shall cause this Agreement to be duly recorded or filed and re-recorded or refiled in such places, and Owner shall pay or cause to be paid all recording, filing, or other taxes, fees and charges, and shall comply with all such statutes and regulations as may be required by law, in the opinion of qualified counsel, in order to establish, preserve and protect the ability of the grantee to enforce this Agreement.

In Witness whereof, the undersigned have hereunto affixed their signatures and seals as of the date first above written.

(Name of Grantee)

By ATTEST: APPROVED AS TO FORM

OWNER

The foregoing instrument was acknowledged before me in the State of Montana this day of

, 20 , by ____________ .

Witness my hand and official seal. My commission expires:

Notary Public

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7H-viii May 2007

EXHIBIT 7-I

FINAL INCOME VERIFICATION FOR HOMEOWNERSHIP ASSISTANCE PROJECTS

(For use when a period of 6 months has transpired

between the time of application and purchase)

Completion of this form is required to ensure HOME-assisted homebuyers qualify as income eligible before HOME funds are provided. I/we, ___________________________________, as a HOME-assisted buyer certify that my family’s annual income of $___________ has not changed from the last amount reported and verified by (Grantee) , for purposes of determining homeownership assistance. (Signature of Homebuyer) (Date) (Signature of Homebuyer) (Date) (Signature of Witness) (Date) HOME Project Activity Number: Type of documentation provided for income verification. Payroll Stub

Savings Account

Pension

Social Security

Other

Other

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7-I May 2007

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7K-1 April 2010

EXHIBIT 7-K

OWNER-OCCUPIED HOUSING REHABILITATION STANDARDS PART 1: Pre-Rehab Code Inspection Certification

Name of Owner: _____________________ Address:

24 CFR 92.251 - PROPERTY STANDARDS: Housing that is…rehabilitated with HOME funds must meet all applicable local codes, rehabilitation standards, ordinances, and zoning ordinances at the time of project completion...The participating jurisdiction (i.e., MDOC HOME Program) must have written standards for rehabilitation (i.e., OHRS1) that ensure that HOME-assisted housing is decent, safe, and sanitary. In the absence of a local code…rehabilitation, HOME-assisted…rehabilitation must meet, as applicable: one of three model codes (Uniform Building Code (ICBO), National Building Code (BOCA), Standard (Southern) Building Code (SBCCI); or the Council of American Building Officials (CABO) one or two family code… The HOME Program cautions Grantees that the OHRS is not the only resource for rehabilitation work. The OHRS is not detailed enough to describe all of the codes, standards, and practices that apply to rehabilitation. The HOME Program expects Grantees to maintain copies of the various codes and standards referenced in the OHRS and possess a working knowledge of how to meet them. Furthermore, the HOME Program expects that those responsible for conducting the inspection are qualified and competent and those doing rehabilitation work are qualified, competent and able to achieve the desired results. I certify that, except for the deficiencies identified in the attached Scope of Work, the residence identified above meets the HOME Program Owner-Occupied Rehabilitation Standards and 24 CFR 92.251 Name of Inspector Title Signature of Inspector Date Signature of Grantee Date

1 HOME Investment Partnerships (HOME) Program Owner-Occupied Housing Rehabilitation Standards (OHRS); in Chapter 7 of the HOME Admin Manual available online at http://housing.mt.gov/Hous_HM_AdminCh07.asp

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7K-2 April 2010

OWNER-OCCUPIED HOUSING REHABILITATION STANDARDS PART II: Post-Rehab Code Inspection Certification

Name of Owner:_____________________ Address:

24 CFR 92.251 - PROPERTY STANDARDS: Housing that is…rehabilitated with HOME funds must meet all applicable local codes, rehabilitation standards, ordinances, and zoning ordinances at the time of project completion...The participating jurisdiction (i.e., MDOC HOME Program) must have written standards for rehabilitation (i.e., OHRS2) that ensure that HOME-assisted housing is decent, safe, and sanitary. In the absence of a local code…rehabilitation, HOME-assisted…rehabilitation must meet, as applicable: one of three model codes (Uniform Building Code (ICBO), National Building Code (BOCA), Standard (Southern) Building Code (SBCCI); or the Council of American Building Officials (CABO) one or two family code… The HOME Program cautions Grantees that the OHRS is not the only resource for rehabilitation work. The OHRS is not detailed enough to describe all of the codes, standards, and practices that apply to rehabilitation. The HOME Program expects Grantees to maintain copies of the various codes and standards referenced in the OHRS and possess a working knowledge of how to meet them. Furthermore, the HOME Program expects that those responsible for conducting the inspection are qualified and competent and those doing rehabilitation work are qualified, competent and able to achieve the desired results. I certify that the deficiencies identified in the Scope of Work have been rectified according to the HOME Program Owner-Occupied Rehabilitation Standards and 24 CFR 92.251 and the residence identified above has been brought up to standards. Name of Inspector Title Signature of Inspector Date Signature of Grantee Date

2 HOME Investment Partnerships (HOME) Program Owner-Occupied Housing Rehabilitation Standards (OHRS); in Chapter 7 of the HOME Admin Manual available online at http://housing.mt.gov/Hous_HM_AdminCh07.asp

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7L- i January 2014

EXHIBIT 7-L RENT SCHEDULE FORM

Project Name and Address: ____________________________________________ ____________________________________________________________________ Name of HOME Grantee:_______________________________________________ Name of Owner:______________________________________________________ Effective Date of Proposed Schedule:

Name and Phone Number of Schedule Preparer

Utility Allowances:

Do tenants pay for utilities at the project? Yes No

If Yes, attach Section 8 Utility Schedule identifying the tenant paid utilities

HOME Unit Mix: Indicate the number of total HOME-assisted units by bedroom size for the project. For projects with 5 or more HOME units, at least 20% of the units by each bedroom size must be designated as Low-HOME units.

0 Bed 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed 6 Bed

Total Number of HOME Units

Number of Low-HOME Units

Maximum HOME Rent Limits Provide the HOME Program rent limits for your project area using the table below

Effective Date of HOME Rent Schedule:______________________

HOME Rent Limits HOME 0 Bed 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed 6 Bed

Low HOME Rent

High HOME Rent

Does this property receive project based assistance? Yes No

****Skip this section if you do not have Project Based units in your project **** Through which Program does your project receive assistance:

RD Section 515 RD Section 538 Project Based Section 8 Other (please specify): ________________________

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7L- ii January 2014

Attach a copy of the letter or rent schedule you received from Rural Development or HUD with the approved rent rates and effective dates for this property. Maximum Low Income Housing Tax Credit Rent Limits (if applicable)

**** Skip this section if you do not have LIHTC units in your project ****

Provide the Low Income Housing Tax Credit rent limits for your project area:

Effective Date of LIHTC rent schedule: ________________________ LIHTC Rent Limits

LIHTC 0 Bed 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed 6 Bed

30%

40%

50%

60%

Rent Structure Provide the final rent structure for your property

Rent Structure for [NAME OF PROJECT]

0 Bed 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed 6 Bed

ACCEPTED BY: Grantee Chief Executive Officer or Elected Official Date Property Manager/Owner (If Applicable) Date APPROVED BY: HOME Program Officer Date

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7L-iii January 2014

EXHIBIT 7-L RENT SCHEDULE FORM INSTRUCTIONS

Utilities Allowances: If tenants pay for utilities, attach the Section 8 Utility Schedule identifying which utilities the tenant pays for. The HUD-published HOME rent limits include utilities. This means that when a tenant pays directly for utilities, the owner/manager must subtract the utility allowance from the applicable HUD-published HOME rent limit, in order to calculate the maximum rent that can be charged for that HOME-assisted unit.i HOME Unit Mix List the total number of HOME-assisted units in the project by bedroom size. For projects with five or more HOME-assisted, at least 20 percent of each bedroom size must be designated as Low HOME Rent units Example: The Sunny Fields Apartments in Sunshine County, Montana, has 20 HOME and LIHTC units with 4 one-bedroom, 10 two-bedroom and 6 three bedroom units.

4 one-bed units X 20% = 0.8 units which is rounded to 1 unit 10 two-bed units X 20% = 2 units 6 three-bed units X 20% = 1.2 units which is rounded to 2 units

Low HOME Rent units must be occupied by tenants whose incomes are at or below 50% of the HUD published area median income. High HOME Rent units must be occupied by tenants whose incomes do not exceed 80% of the HUD-published area median income. Maximum Allowable HOME Rents HUD publishes two annual HOME rent limits: the High HOME rent limits and the Low HOME rent limits by bedroom sizes for each metropolitan service area or county. These are the maximum rents that owners can charge tenants that reside in HOME-assisted units. Use the schedule provided at the link below to enter the High and Low HOME rent limits:

http://www.hud.gov/offices/cpd/affordablehousing/programs/home/limits/rent/ Example: The Sunny Fields Apartments have 20 HOME and LIHTC units with a mix of one, two and three bedroom units. The property manger uses the link provided to pull down the 2012 HOME rent limits for Sunshine County and completes the table for their relevant units:

0 BR 1 BR 2 BR 3 BR 4 BR 5 BR 6 BR Total Number of HOME Units 4 10 6 Number of Low-HOME Units 1 2 2

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7L-iv January 2014

Effective Date of published HOME Rent Schedule: February 9, 2012 HOME Rent Limits

HOME 0 Bed 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed 6 Bed Low-HOME Rent 525 650 700 High-HOME Rent 525 675 800

Be sure to provide the effective date of the HUD published HOME rent schedule used. USDA Rural Development Assistance or Project Based Section 8 Assistance *****Only complete this section if you have RD or PBS8 units in your project**** Indicate which program your project receives assistance through and attach a copy of the most current letter or rent schedule you received from RD or HUD with the approved rents for the property, including the effective date. Low Income Housing Tax Credit Rents *****Complete this section if you have LIHTC units in your project**** Use the website provided at the link below to enter the LIHTC rent limits for your units. http://housing.mt.gov/About/MF/incomeandrentlimits.mcpx If the income level targeted by your project is not listed, use the blank lines at the bottom of the table to provide the targeted percentages and the appropriate rent limits. Example: The Sunny Fields Apartments have 20 HOME and LIHTC units with a mix of one, two and three bedroom units. The LIHTC unit rents are targeted for tenants who are at 40%, 50% and 60% AMI. Using the information from the provided link, the property manager completes the table below for the relevant unit sizes, targeted incomes and location.

Effective Date of LIHTC Rent Schedule: 12/18/2013

LIHTC Rent Limits LIHTC 0 Bed 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed 6 Bed

30% 40% 455 546 630 50% 568 682 788 60% 682 819 945

Be sure to provide the effective date of the LIHTC rent schedule used. Rent Schedule Complete rent schedule for the next twelve months. For units that have both tax credit and HOME-assisted units, compare the rents between the two programs and use the lesser of the HUD-published HOME rent limit or the LIHTC rent limit for that unit.ii Rents may be below the maximum published rent limits.

HOME Investment Partnerships Program HOME Administration Manual Montana Department of Commerce 7L-v January 2014

Example: The Property Manager of the Sunny Fields Apartments enters the rent schedule for the project by comparing both LIHTC and HOME rent limits and uses the lesser rent limits.

Proposed Rent Schedule for Sunny Fields Apartments

0 Bed 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed 6 Bed 40% 455 546 630 50% 525 650 700 60% 525 675 800

Signatures The rent schedule should be signed by Grantee’s Executive Director (if the original HOME Grantee was a CHDO and PHAs) or Chief Elected Official (if the original HOME Grantee was a Local Government) and the Property Manager/Owner, if applicable. i Compliance in HOME Rental Projects: A Guide for Property Owners, pg 89 http://www.hud.gov/offices/cpd/affordablehousing/library/modelguides/2009/2009homerentalpo.pdf ii Compliance in HOME Rental Projects: A Guide for Property Owners, pg 59

After recording send to: _____________________________________________________________________

DEED OF TRUST

MAXIMUM LIEN. The total principal indebtedness that may be outstanding at any given time which is secured by this Deed of Trust is $ . THIS DEED OF TRUST is dated , among , whose address is , MT (“Grantor”); whose address is (referred to below sometimes as “Lender” and sometimes as “Beneficiary”); and (referred to below as “Trustee”). CONVEYANCE AND GRANT. For valuable consideration, Grantor conveys to Trustee for the benefit of Lender as Beneficiary all of Grantor’s right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights of way, and appurtenances; all water, water rights and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil. Gas, geothermal and similar matters, (the “Real Property”) located in County, State of Montana. ENTER LEGAL DESCRIPTION The Real Property or its address is commonly known as , MT. Grantor presently assigns to Lender (also known as the Beneficiary in this Deed of Trust) all of Grantor’s right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THIS DEED OF TRUST. THIS DEED OF TRUST IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust, Grantor shall pay to Lender all amounts secured by this Deed of Trust as they become due, and shall strictly and in a timely manner perform all of Grantor’s obligations under the Note, this Deed of Trust, and the Related Documents. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor’s possession and use of the Property shall be governed by the following provisions:

Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. The following provisions relate to the use of the Property or to other limitations on the Property. The Real Property does not exceed forty (40) acres, and this instrument is a Trust Indenture executed in conformity with the Small Tract Financing Act of Montana.

DEED OF TRUST (Continued)

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Duty to Maintain. Grantor shall maintain the Property in good condition and promptly

perform all repairs, replacements, and maintenance necessary to preserve its value.

Hazardous Substances. Grantor represents and warrants that the Property never has been, and never will be so long as this Deed of Trust remains a lien on the Property, used for the generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance in violation of any Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspection and tests as Lender may deem appropriate to determine compliance of the Property with this section of the Deed of Trust. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims and losses resulting from a breach of this paragraph of the Deed of Trust. This obligation to indemnify and defend shall survive the payment of the indebtedness and the satisfaction of this Deed of Trust.

TAXES AND LIENS. The following provision relating to the taxes and liens on the Property are part of this Deed of Trust:

Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, special taxes, assessments, charges (including water and sewer), fines and impositions levied against or on accounts of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of all liens having priority over or equal to the interest of Lender under this Deed of Trust, except for the lien of taxes and assessments not due, except for the Existing Indebtedness referred to below, and except as otherwise provided in this Deed of Trust.

PROPERTY DAMAGE INSURANCE. The following provision relating to insuring the Property are a part of this Deed of Trust.

Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a fair value basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender, together with such other hazard and liability insurance as Lender may reasonably require. Policies shall be written in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan.

LENDER’S EXPENDITURES. If Grantor fails (A) to keep the Property free of all taxes, liens, security interests, encumbrances, and other claims, (B) to provide any required insurance on the Property, or (C) to make repairs to the Property then Lender may do so. If any action or proceeding is commenced that would materially affect Lender’s interests in the Property, then Lender on Grantor’s behalf may, but is not required to, take any action that Lender believes to be appropriate to protect Lender’s interests. All expenses incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note’s maturity.


Page 3

WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Deed of Trust:

Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Deed of Trust, and (b) Grantor has the full right, power, and authority to execute and deliver this Deed of Trust to Lender. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons.

EVENTS OF DEFAULT. At Lender’s option, Grantor will be in default under this Deed of Trust if any of the following happen:

Payment Default. Grantor fails to make any payment when due under the Indebtedness.

Break Other Promises. Grantor breaks any promise made to Lender or fails to perform promptly at the time and strictly in the manner provided in this Deed of Trust or in any agreement related to this Deed of Trust. Compliance Default. Failure to comply with any other term, obligation, covenant or condition contained in this Deed of Trust, the Note or in any of the Related Documents. Default on Other Payments. Failure of Grantor within the time required by this Deed of Trust to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Death or Insolvency. The death of Grantor, the insolvency of Grantor, the appointment of a receiver for any part of Grantor’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.

RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default under any indebtedness, or should Grantor fail to comply with any of Grantor’s obligations under this Deed of Trust, Trustee or Lender may exercise any one or more of the following rights and remedies:

Election of Remedies. All of Lender’s rights and remedies will be cumulative and may be exercised lone or together. An election by Lender to choose any one remedy will not bar Lender from using any other remedy. If Lender decides to spend money or to perform any of Grantor’s obligations under this Deed of Trust, after Grantor’s failure to do so, that decision by Lender will not affect Lender’s right to declare Grantor in default and to exercise Lender’s remedies. Accelerate Indebtedness. Lender shall have the right at its option without notice to Grantor to declare the entire Indebtedness immediately due and payable, including any prepayment penalty which Grantor would be required to pay. Foreclosure. With respect to all or any part of the Real Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law. Other Remedies. Trustee or Lender shall have any other right or remedy provided in this Deed of Trust or the Note or available at law or in equity.


Page 4

Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives

any and all rights to have the Property marshaled. In exercising its rights and remedies, the Trustee or Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Attorneys’ Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Deed of Trust, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys’ fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender’s opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there is a lawsuit, including attorneys’ fees, paralegal fees, and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors’ reports, and appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Deed of Trust:

Governing Law. This Deed of Trust will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Montana without regard to its conflicts of law provisions. This Deed of Trust has been accepted by Lender in the State of Montana. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender’s request to submit to the jurisdiction of the courts of County, State of Montana. Time is of the Essence. Time is of the essence in the performance of this Deed of Trust. Waiver of Homestead Exemption. Grantor hereby releases and waives all rights and benefits of the homestead exemption laws of the State of Montana as to all Indebtedness secured by this Deed of Trust.

DEFINITIONS. The following words shall have the following meanings when used in this Deed of Trust:

Beneficiary. The word “Beneficiary” means , and its successors and assigns.

Borrower. The word “Borrower” means and includes all co-signers and co-makers signing the Note and all their successors and assigns. Deed of Trust. The words “Deed of Trust” mean this Deed of Trust among Grantor, Lender, and Trustee, and includes without limitation all assignment and security interest provisions relating to the Personal Property and Rents. This Deed of Trust is intended to be a trust indenture as provided for in the Small Tract Financing Act of Montana. Environmental Laws. The words “Environmental Laws” mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.(“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.


Page 5

Event of Default. The words “Event of Default” mean any of the events of default set

forth in this Deed of Trust in the events of default section of this Deed of Trust. Existing Indebtedness. The words “Existing Indebtedness” mean the indebtedness described in the Existing Liens provision of this Deed of Trust. Grantor. The word “Grantor” means . Guaranty. The word “Guaranty” means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without limitation a guaranty of all or part of the Note. Improvements. The word “Improvements” means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word “Indebtedness” means all principal, interest, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modification of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor’s obligations or expenses incurred by Trustee or Lender to enforce Grantor’s obligations under this Deed of Trust, together with interest on such amounts as provided in this Deed of Trust. Lender. The word “Lender” means , its successors and assigns. The words “successors or assigns” mean any person or company that acquires any interest in the Note. Note. The word “Note” means the promissory note dated , in the original principal amount of $ from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancing of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words “Personal Property” mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word “Property” means collectively the Real Property and the Personal Property. Real Property. The words “Real Property” mean the real property, interests and rights, as further described in this Deed of Trust. Related Documents. The words “related Documents” mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word “Rents” means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST, AND GRANTOR AGREES TO ITS TERMS. GRANTOR: GRANTOR: X X


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INDIVIDUAL ACKNOWLEDGMENT

STATE OF MONTANA )

) SS COUNTY OF_____________________ ) This instrument was acknowledged before me on , 20 by .

(Seal)

[Type or Print Name] Notary Public for the State of Montana Residing at My commission expires

REQUEST FOR FULL RECONVEYANCE (To be used only when obligations have been paid in full)

To: __________________________________, Trustee The undersigned is the legal owner and holder of all Indebtedness secured by this Deed of Trust. All sums secured by this Deed of Trust have been fully paid and satisfied. You are hereby directed, upon payment to you of any sums owing to you under the terms of this Deed of Trust or pursuant to any applicable statute, to cancel the Note secured by this Deed of Trust (which is delivered to you together with this Deed of Trust), and to reconvey, without warranty, to the parties designated by the terms of this Deed of Trust, the estate now held by you under this Deed of Trust. Please mail the reconveyance and Related Documents to: _____________________________________________________. Date: _____________________________ Beneficiary: __________________

By: __________________ Its: __________________

After recording send to:

DEED RESTRICTION AGREEMENT

HOME Investment Partnerships Program By and between

(enter Grantee Name & Address)

herein after referred to as (enter Grantee Name)

and (borrower's name)

herein after referred to as the “Property Owner” regarding the purchase of the following property:

(enter complete address of property

said land and improvements are hereinafter collectively referred to as the “Property”,

1. PURPOSE This Deed Restriction Agreement is made and entered into this day of (enter date), by and between (enter name of entity) and the Property Owner. Whereas (enter name of entity) has loaned to the Property Owner HOME Investment Partnerships Program funds via recapture provision in the amount of (enter amount of HOME loan, spelled out and numerical amount. e.g. Fifteen Thousand Dollards and No Cents) ($ ) for the purpose of providing assistance for down payment and closing costs for the property located at the above named address and legally described as follows:

(enter complete legal description or property)

Now therefore, in consideration of the loan and other good and valuable consideration, the parties hereto do agree as follows: 2. DEFINITIONS

a. Agreements means this Deed Restriction Agreement, as it may from time to time be amended.

b. (enter entity's short name) means the (enter entity's legal name) dba (entery entity's dba, if applicable).

c. HOME means HOME Investment Partnerships Program.

d. Principal Residence means Property Owner will maintain the Property as their principal residence and not move out and leave the Property vacant or move out and rent the Property.

e. Net Proceeds means the sales price of the Property, minus any outstanding debt senior to this loan, and minus closing costs required to be paid by Property Owner upon sale of the Property.

f. Property Owner means the owner(s) as set forth at the beginning of this Agreement, or any successor in title to the property.

g. Term means the period of affordability commencing on the date hereof and continuing until the earliest to occur of the following: 1) (enter term, spelled out and numerically, e.g. Fifteen (15) ( ) years beginning after the

transfer of property to the Property Owner as evidenced by the Mortgage Agreement; 2) The date upon which a transfer of ownership of the property and repayment of any funds subject to

recapture occurs; 2. USE AND OCCUPANCY OF THE PROPERTY

a. It is agreed that during the Term, the Property Owner will maintain the Property as his/her principal residence.

b. It is agreed that during the Term, the Property Owner will maintain the Property in accordance to the

minimum standards set forth in the (enter name of entity) Policies and Procedures for their Home Buyer Program defined as U.S. Department of Housing and Urban Development Section 8 Housing Quality Standards.

4. RECAPTURE PROVISIONS FOR HOMEBUYER PROGRAM a. Term.

The term of this agreement and the HOME recapture provisions will be (enter term, spelled out and numerically, e.g. Fifteen (15) ( ) years for each assisted activity beginning after the transfer of the property to the property owner as evidenced by the Mortgage Agreement.

b. Loan Repayment.

Repayment of the HOME loan amount noted in Section 1 will be deferred for the term of the recapture provisions, provided that the Property Owner is in full compliance with this agreement. At the time of sale of the property at any time during the term, the full amount of the loan will become due in full. The loan will become due in full should the Property Owner fail to maintain the Property as his/her/their primary residence.

c. Amount to be Recaptured.

In the event that the Property Owner sells the Property during the term of the recapture provisions, the full amount of the (enter name of entity) HOME investment will be due and payable to the extent that net proceeds are available to repay the Property Owner’s loan. If the net proceeds are not sufficient to recapture the full HOME investment, (enter name of entity) will accept the available net proceeds as full payment. The Property Owner’s down payment, principal payments, and any capital improvement investment made in the property after the HOME assistance has been provided will be returned to the Property Owner at closing after (enter name of entity) HOME assistance has been recaptured from the net proceeds as described above. The Property Owner also will retain the value of the appreciation in the property after (enter name of entity) HOME assistance has been recaptured. An agreement detailing the recapture provisions will be secured through a trust indenture recorded against the property at the time of assistance. These recapture provisions may terminate upon occurrence of the following: 1) Foreclosure, transfer in lieu of foreclosure, or assignment of an FHA insured mortgage to HUD.

(enter name of entity) may use purchase options, rights of first refusal or other preemptive rights to purchase the housing before foreclosure to preserve affordability. The recapture provisions will be revived according to the original terms if during the original affordability period, the owner of record before the termination event, or any entity that includes the former owner or those with whom the former owner has or had family or business ties, obtains an ownership interest in the project or property.

5. REPRESENTATIONS AND WARRANTIES OF PROPERTY OWNER a. The Property Owner represents and warrants that he/she has validly executed this Agreement and the

same constitute the binding obligation of the Property Owner. The Property Owner has full power, authority, and capacity to enter into the Agreement, to carry out the Property Owner’s obligations as described in this Agreement, and to assume responsibility for compliance with all applicable federal rules and regulations

b. To the best of the Property Owner’s knowledge, the making of this Agreement and the Property

Owner’s obligations hereunder:

1) Will not violate any contractual covenants or restrictions between the Property Owner or any third party affecting the Property;

2) Will not conflict with any of the instruments that create or establish the Property Owner’s authority; 3) Will not conflict with any applicable public or private restriction; 4) Do not require any consent or approval or any public or private authority which has not already

been obtained; and 5) Are not threatened with invalidity or unenforceability by any action, proceeding, or investigation

pending or threatened, by or against the Property Owner, without regard to capacity, any person with whom the Property Owner may be jointly or severally liable, or the Property or any part thereof.

c. No litigation or proceedings are pending or to the best of the owner’s knowledge, threatened against

the Property Owner which if adversely determined could individually or in the aggregate have an

adverse effect on the title to or the use and enjoyment or value of the Property, or any portion thereof, or which could in any way interfere with the consummation of this Agreement.

d. The Property Owner agrees to indemnify and hold harmless (enter name of entity) from and against all

liabilities, losses, claims, damages, judgments, costs, and expenses (including, without limitation, reasonable attorney’s fees) incurred by (enter name of entity) as a result of any material inaccuracy in any of the representations and warranties contained in this Agreement.

6. MISCELLANEOUS

a. Notices. All notices required or permitted to be given under this Agreement must be in writing and will be deemed to have been duly given if delivered personally or mailed, postage prepaid, by registered or certified United States mail, return receipt requested, addressed to the parties at the following address: FOR (enter name of entity)

(enter Address

FOR THE PROPERTY OWNER (enter address)

b. Binding Effect: Covenants Running with the Land. During the Term, this Agreement and the covenants, reservations, and restrictions contained herein shall be deemed covenants running with the land for the benefit of (enter name of entity) and its successors, and shall pass to and be binding upon the Property Owner’s heirs, assigns, and successors in title to the Property, or if the property shall not include title to land, but shall include a leasehold interest in land, this Agreement and the covenants, reservations et. al. shall bind the leasehold interest as well as the Property and shall pass to and be binding upon all heirs, assigns and successors to such interest; provided, however, that upon expiration of the Term in accordance with the terms hereof said covenants, reservations and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof shall conclusively be held to have been executed, delivered, and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instruments. If a portion or portions of the Property are conveyed, all of such covenants, reservations, and restrictions shall run to each portion of the Property. (enter name of entity), at the Property Owner’s cost and expense, shall cause this Agreement to be duly recorded or filed and re-recorded or re-filed in such places, and the Property Owner shall pay or cause to be paid all recording, filing, or other taxes, fees and charges, and shall comply with all such statutes and regulations as may be required by law, in the opinion of qualified counsel, in order to establish, preserve and protect the ability of (enter name of entity) to enforce this Agreement.

In Witness whereof, the undersigned have hereunto affixed their signatures and seals as the date first above written. (enter legal name of borrower) (enter legal name of borrower) (full name and signature of borrower) (full name and signature of borrower) STATE OF MONTANA, (name of city): County of (name of county): Signed and sworn to before me on this (enter day) day of (enter month), 20(enter last two digits of year) a Notary Public for the state of Montana, personally appeared (Borrower's Name), known to me to be the person(s), that executed the within instrument, and acknowledged to me that (he/she/they) executed the same.

[Type or Print Name] Notary Public for the State of Montana

(Seal) Residing at

My commission expires

OCCUPANCY AGREEMENT

HOME Funds Loaned: Loan Date: Maturity Date: $

BORROWER: LENDER:(Grantee))

The undersigned Borrower(s) of the above-captioned property understand that one of the conditions of the HOME Investment Partnerships loan is the Borrower(s) occupy the subject property and the Borrower(s) do hereby certify as follows:

1. Borrower intends to occupy the property as Borrower’s primary residence and will not sublease the property.

2. If Borrower’s intention changes prior to the loan closing, Borrower agrees to notify Lender immediately of that fact.

3. Borrower understands that Lender may not make the loan in connection with subject property without this Occupancy Agreement

4. Borrower acknowledges Lender has relied upon Borrower’s representation of occupancy in securing sais loan, the interest rate, or funding said loan.

THE UNDERSIGNED BORROWER(S) ACKNOWLEDGES AND AGREES THAT:

1. ANY MISREPRESENTATION OF OCCUPANCY BY BORROWER(S);

2. BORROWER(S) FAILURE TO OCCUPY THE PROPERTY AS THE PRIMARY RESIDENCE (i.e., OWNER-OCCUPIED)

SHALL CONSTITUTE A DEFAULT UNDER THE NOTE AND SECURITY INSTRUMENT EXECUTED IN CONNECTION WITH SAID LOAN AND, UPON OCCURRENCE OF SAID DEFAULT, THE WHOLE SUM OF PRINCIPLE AND INTEREST PAYABLE PURSUANT TO SAID NOTE PLUS COSTS AND FEES SHALL BECOME IMMEDIATELY DUE AND PAYABLE. Borrower(s) understand that it is a Federal Crime punishable by fine or imprisonment or both to knowingly make false statement concerning any of the above facts, as applicable under the provisions of Title 18 U.S.C., Sec. 1014. I declare that the forgoing Agreement is true and correct and agree to said terms of Agreement allowing Lender discretion to call the loan due based upon any misrepresentation of occupancy. Borrower Date Borrower Date Attested:

PROMISSORY NOTE

BORROWER: LENDER:

Principal Amount: $ Interest Rate: % Date of Note: PURPOSE OF LOAN. The purpose of the loan is to provide assistance to the Borrower, a person of low or moderate income, using the HOME Investment Partnerships Program Funds who is a "first time homebuyer" (defined as someone who has not owned a home in the last 3 years, a single parent with dependent children or family which includes a disabled family member) of the property located at the Borrower Address listed at the top of this Promissory Note. PROMISE TO PAY. I ("Borrower") promise to pay to (enter Lender's name) ("Lender"), or order, in lawful money of the United States of America, the principal amount of (enter amount of HOME loan, spelled our and numeric amount. e.g. Fifteen THousand Dollards and No Cents ($15,000) Dollars ($ ). DELETE or IF INTEREST IS CHARGED, FILL IN APPLICABLE INFORMATION PAYMENT. I will pay this loan in one principal payment of $(enter amount) on (enter date). This payment due on (enter date), will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; and then to any late charges. I will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. INTEREST CALCULATION METHOD. N/A or FILL IN IF APPLICABLE PREPAYMENT. N/A or FILL IN IF APPLICABLE MATURITY DATE. No interest will be charged on the loan prior to default. The amount of the loan will be calculated using the requirements contained within the Deed Restriction Agreement and Trust Indenture of the total assistance provided by the Lender to/the Borrower. Said sum shall be in proper form of assignment without interest, effective only upon occurrence of the following events: A. Upon the first sale or transfer of the Property to occur after the date of this Note. For purposes of this Note, a sale or transfer shall be defined as any sale, assignment, exchange or transfer, voluntary or involuntary, and including any transfer by gift, devise, or inheritance, of any interest in the Property, including but not limited to, (i) a fee simple interest whether in its entirety or a fractional interest; (ii) a joint tenancy interest; (iii) a life estate; (iv) a leasehold interest of any nature without (enter name of entity)'s (or its designee's) express prior written consent; (v) creation of a trust with any interest in the Property acting as the corpus of the trust; (vi) or an interest evidenced by a land contract by which possession of the Property is transferred and Borrower retains legal title for security purposes, EXCEPTING (i) a transfer by gift, devise, or inheritance to a present spouse or surviving joint tenant; (ii) a transfer to a spouse as part of a dissolution proceeding or in connection with a marriage; provided that with respect to each excepted transaction described in clause (i) and (ii), prior to or simultaneously with the transfer, the transferee agree to assume the obligations of Borrower in a manner that is acceptable to (enter name of entity); B. Upon a default or breach under this Note or Deed of Trust securing this Note, or any Declaration of Restrictions, Declaration of Unit of Ownership, Bylaws or other recorded documents of record pertaining to the property, or upon any default in any superior lien secured by the Property; C. Upon the Borrower's refinancing of a lien superior to that created by the Deed of Trust securing this Note for any amount greater than the amount owed on account of such superior lien immediately prior to such refinancing; D. Upon the Borrower's vacation of the Property or Borrower's cessation of use as Borrower's sole residence. E. Upon full repayment of the first mortgage. F. Extension of Maturity Date: If none of the aforementioned events occur, then the principal balance of the note shall be due and payable (enter the year, spelled out and numeric e.g. Fifteen years (15) ( ) years from the date of the initial disbursement. If at the end of the (enter the year, spelled out and numeric e.g. Fifteen years (15) ( ) years, and none of the aforementioned events have occurred, ENTER APPROVED MANAGEMENT PLAN OPTION. Upon occurrence of the Maturity Date as stated above, the Borrower shall pay to Lender the Principal sum and all other amounts∙ owing under the Note.

PROMISSORY NOTE (Continued) Page 2 Recapture or Resale Provisions: N/A or FILL IN IF APPLICABLE LATE CHARGE. N/A or FILL IN IF APPLICABLE INTEREST AFTER DEFAULT. N/A or FILL IN IF APPLICABLE DEFAULT. I will be in default under this Note if any of the following happen:

Payment Default. I fail to make any payment when due under this Note. Break Other Promises. I break any promise made to Lender or fail to perform promptly at the time and strictly in the manner provided in this Note or in any agreement related to this Note, or in any other agreement or loan I have with Lender. False Statements. Any representation or statement made or furnished to Lender by me or on my behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished. Death or Insolvency. Any Borrower dies or becomes insolvent; a receiver is appointed for any part of my property; I make an assignment for the benefit of creditors; or any proceeding is commenced either by me or against me under any bankruptcy or insolvency laws. Taking of the Property. Any creditor or governmental agency tries to take any of the property or any other of my property in which Lender has a lien. This includes taking of, garnishing of or levying on my accounts with Lender. However, if I dispute in good faith whether the claim on which the taking of the property is based is valid or reasonable, and if I give Lender written notice of the claim and furnish Lender with monies or a surety bond satisfactory to Lender to satisfy the claim, then this default provision will not apply. Defective Collateralization. This Note or any of the related documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Collateral Damage or Loss. Any collateral securing this Note is lost, stolen, substantially damaged or destroyed and the loss, theft, substantial damage or destruction is not covered by insurance. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, and then I will pay that amount. LENDER CONSENT OF TRANSFER OR ASSIGN. The Borrower shall transfer or assign the property described in the Deed of Trust, only with the written consent of Lender. Such consent shall not be unreasonably withheld, provided the Lender's security interest herein is adequately protected. Lender, may, at its option, declare immediately due and payable all sums secured by the Deed of Trust I Mortgage upon the sale or transfer of all or part of the real property as described in the Deed of Trust or Mortgage without the Borrower's prior knowledge and written consent. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if I do not pay. I will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, paralegal fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, I also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Montana without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Montana. CHOICE OF VENUE. If there is a lawsuit, I agree upon Lender's request to submit to the jurisdiction of the courts of (enter county) County, State of Montana. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon me, and upon my heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. NOTICES. Any notice required to be given under this Note shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the address shown near the beginning of this Note. Any person may change his or her address for notices under this Note by giving formal written notice to the other person or persons, specifying that the purpose of the notice is to change the person's address. For notice purposes, I agree to keep Lender informed at all times of my

PROMISSORY NOTE (Continued) Page 3 current address. Unless otherwise provided or required by law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers. It will be my responsibility to tell the others of the notice from the Lender. NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. I may notify Lender if Lender reports any inaccurate information about my account(s) to a consumer reporting agency. My written notice describing the specific inaccuracy(ies) should be sent to Lender at the following address: (enter entity and address). USE, OCCUPANCY AND RECAPTURE RESTRICTIONS. The undersigned shall at all times comply with the use, occupancy and recapture restrictions affecting the property as set forth in that certain Deed Restriction Agreement and Deed Of Trust securing this Note, dated this day, between the Borrower and the Lender. If the undersigned shall fail or refuse to comply with such use, occupancy and recapture restrictions, the Lender may, at its option and with notice as provided in such Deed Restriction Agreement and Deed of Trust, declare the entire unpaid balance of this Note immediately due and payable and may invoke any remedies provided in such Deed Restriction Agreement, Deed of Trust, or applicable law in the event of default. GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. I do not agree or intend to pay, and Lender does not agree or intend to contract for, charge, collect, take, reserve or receive (collectively referred to herein as "charge or collect"), any amount in the nature of interest or in the nature of a fee for this loan, which would in any way or event (including demand, prepayment, or acceleration) cause Lender to charge or collect more for this loan than the maximum Lender would be permitted to charge or collect by federal law or the law of the State of Montana (as applicable). Any such excess interest or unauthorized fee shall, instead of anything stated to the contrary, be applied first to reduce the principal balance of this loan, and when the principal has been paid in full, be refunded to me. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. I and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. This means that the words "I", "me", and "my" mean each and all of the persons signing below. PRIOR TO SIGNING THIS NOTE, I READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. I AGREE TO THE TERMS OF THE NOTE. I ACKNOWLEDGE RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. BORROWER: BORROWER: X X