STATE OF MARYLAND

CDBG PROGRAM DRAFT Town of Hurlock – Habitat Choptank

APPLICATION SFY 17

Lawrence J. Hogan, Governor

Boyd K. Rutherford, Lt. Governor

Kenneth C. Holt, Secretary Ellington Churchill, Jr, Deputy Secretary

Maryland Department of Housing and Community Development

Division of Neighborhood Revitalization 7800 Harkins Road Lanham, MD 20706

301/429-7525 TTY/RELAY 711 or 1/800-735-2258

TO BE COMPLETED BY TOWN OF HURLOCK

2

MARYLAND COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM

APPLICATION SFY 17 1. Name of Jurisdiction:

Hurlock, Maryland 2. County (Municipal applicants only):

Dorchester

3. Address: 311 Charles Street P.O. 327 Hurlock, MD 21643

4. Subrecipient, Developer or Business, if applicable and their DUNS Number: Habitat for Humanity Choptank – DUNS 945965168

5. FID Number:

DUNS Number:

6. Name & phone number of jurisdiction’s contact person for this application (include email address and Fax #):

7. Project title, brief description & location (Full street address(es) and zip code of Project is required): Home Ownership for Hurlock (200-202 Jackson Street, Hurlock, MD 21643) This project will create three shovel-ready lots for new construction, durable and energy efficient single family homes. As a result, three low-income qualifying households will have the opportunity to purchase homes using an affordable mortgage with minimum 30-year term. With education and support from Habitat Choptank’s established home ownership program, these buyers will be empowered to build the stability, security and self-reliance that comes from buying a home with a monthly cost they can afford. The homes will be built on infill property on Jackson Street in the Town of Hurlock which will put the occupants within walking distance to jobs, and community services. The increased property tax revenue from this project will benefit the community-at-large. 8. Project type:

X Housing Public Facilities Infrastructure Economic Development Other Public Services

9. National objective(s): X Low and moderate income benefit Elimination of slum/blight

10. CDBG request: $ 131,343 Local funds $ 83,267 Other funds $ 294,056 Total costs $ 508,666

11. U.S. Congressional District No.1 State District No. 37 / 37 A (List State legislators for entire district):

Senator Adelaide Eckartd Delegate Chris Adams Delegate John Mautz

12. Date Public Hearing held: (Attach minutes and hearing notice to application)

13. Required Resolution attached? X Yes No

14. Is Citizens Participation Plan current? Yes No Dated: If not, did you attach new plan? Yes No

15. Is Anti-Displacement Plan current? Yes No Dated: If not, did you attach new plan? Yes No

16. If applicable, did you complete Debarment Check on application subrecipient, developer or business? Yes No

17. Digital Photos and CD included? X Yes No (each must be labeled)

18. Date:

CDBG application revised 4/2016

PART A PROJECT DESCRIPTION: Describe the proposed project. Include location and specific activities to be undertaken. This project will create three shovel-ready lots for new construction single family homes in the Town of Hurlock which is an established community in rural Dorchester County. CDBG funding is requested to cover the pre-construction site costs such as clearing and sediment controls, grading, sewer/water installation, and installing driveways. As a result of this project, three low-income qualifying households will have the opportunity to purchase homes using an affordable mortgage with a minimum 30-year term. With education and support from Habitat for Humanity Choptank’s established home ownership program, home buyers will work alongside volunteers to build their future homes. Through this partnership, Habitat, the home buyer and the community work together to eliminate barriers to better, healthier and more financially stable lives. The houses constructed through this project will incorporate Habitat Choptank’s whole house design approach to building durable, affordable, energy efficient homes. The affiliate is able to maximize every dollar invested in energy efficiency upgrades because these upgrades are combined with careful design, experienced project management, and established partnerships with national vendors to provide additional energy efficient appliances and materials. Single family homes will be designed to meet the Energy Star 3.0 guidelines of a minimum of 20% savings over the 2009 IECC code house (and meet the 2012 IECC). The homes will be built on infill property on Jackson Street which Habitat Choptank purchased in 2011 using grant funding from a local foundation in Dorchester County, the Nathan Foundation. The location of these properties will put the future occupants within walking distance to jobs and community services. This project will when complete add three more owner-occupied homes within the priority funding area to county and town tax rolls which will benefit the community-at-large. Each buyer will be required to completed Habitat Choptank’s home ownership program in terms of sweat equity, savings, education (of 8 hours or more) and debt elimination. These are buyers who cannot qualify for conventional financing but if given the kind of education, support and relationships that Habitat Choptank provides could become successful property owners. Presently, Habitat Choptank commits to providing its buyers with a total monthly mortgage cost that is not more than 26% of their income (Habitat International requires affiliates sell homes for now more than 30% of income). In this way, Habitat Choptank promotes the stability, security and self-reliance that comes from selling a home with a right sized mortgage to a prepared low-income home buyer. It is worth noting, that while Habitat Choptank sells its homes to mostly first-time and even first generation home buyers, the nonprofit continues to maintain a less than 2% foreclosure rate with only one foreclosure over its 24 year history. By partnering with its local community for projects such as this, Habitat Choptank effectively works to literally meet people where they live and partner with them to improve their housing. The quality, affordable housing they achieve means stability and the potential for a brighter future. As new and rehabbed homes are clustered together, more stable neighborhoods are created. This in turn enhances property values which benefits everyone in the community.

Continued…

CDBG funding for this project will help to create more opportunities for hardworking local people to build a better future for themselves through home ownership. When you think about creating change in a community, there are a lot of different avenues. But ultimately, if people don’t feel secure where they live, it may be impossible to promote any long term change or improvement. Building or rehabbing a house in partnership with Habitat Choptank can tear down the walls of worry and limitation. Freed from the burden and want of challenging living conditions, families can plan for and act on a better tomorrow.

PART B

PROJECT NEED/IMPACT: Describe the need for the proposed project. Include statistics and other documentation supporting the described need. How will the project make an impact on the described need? This project will support key goals and objectives identified by the Town of Hurlock in its Comprehensive Plan relating to the overall future vision for the community, and housing in particular, in a way that is suitable and sustainable for a rural Eastern Shore community. As noted in the plan, one-third of the Town’s population lives in rental housing with only a very small vacancy rate (4.1%). Meanwhile, census data for Hurlock, indicates that 67% of occupied rental units have a monthly cost of $750 or more a month (median rent $889). There are five complexes formally identified as affordable housing options in Hurlock, three of which utilized low-income housing tax credits. Of these according, to Affordable Housing online, none provide Federal rent subsidies for reducing total tenant payments to 30% of adjusted income. If the tenant qualifies and if available, a project based section 8 voucher could help reduce the housing cost. Otherwise, renters are required to pay the full rent even if it is excess of their income making those households who can least afford it cost burdened. With regard to owner occupied housing, the data indicates that 33% are cost-burdened paying a mortgage that represents more than 30% of their income. Considering the overall housing stock in Hurlock, 36% of the inventory is 35 years or older. This can pose a unique set of challenges for local government and for low-income and often first home buyers who may not be able to secure financing for these properties and/or may not be prepared to assume responsibility for pressing maintenance issues. As an employment anchor, Hurlock provides jobs that help support an economic base that extends outward above 15 miles to influence surrounding towns such as Preston, East New Market, Secretary, Federalsburg, Cambridge and Easton. While there is a large and diverse workforce within commuting distance, the information above indicates a gap between the availability of affordable housing for existing town residents and for employees who would like to both work and live there. Habitat Choptank will partner with the Town and its citizens toward creating affordable home ownership opportunities for low-income households. Buyers who qualify with Habitat Choptank can demonstrate income between 35-60% of area median income. After saving $4,500 for costs at settlement completing 300-400 hours of sweat equity, attending education classes, and eliminating any outstanding collectible debt, individuals and families are able to buy a quality, durable and energy efficient home with an affordable mortgage. Presently, Habitat Choptank commits to providing its buyers with a total monthly mortgage cost that is not more than 26% of their income. Buyers of recently completed homes in nearby Cambridge, which are expected to have comparable fair market values, are assuming monthly mortgage costs below the median rent referenced above.

Adding Hurlock as a partner community has been several years in the making for Habitat Choptank. The Town, through both citizens and local government representatives, has been very welcoming. Last year, with the launch of its FY16-19 Strategic Plan, the Habitat Choptank Board officially voted to expand into Hurlock. This decision was made after careful planning with the consensus that the organization could sustain its existing Dorchester program in Cambridge while also growing to include Hurlock in the north part of the county.

Continued…

The evolution of Habitat’s efforts in Cambridge will likely serve as a model for Hurlock. Construction on the first home in the City began in 2005. Work continued at a steady pace of one home per year for the first 8-9 years with now three homes underway concurrently. To date, 12 homes have been completed in Cambridge. Over time, the base of volunteer and donor support has grown along with the home buyer applicant pool to make multiple builds possible.

A buyer has been approved already for the first home in Hurlock with a second buyer close behind and several other applicants under consideration. This consistent pace with gradual growth as supported locally is intended to engage the community, be responsive to opportunities and issues as they arise, produce homes that are in keeping with the character of the community, and help deliver on citizen-supported goals of the Town’s Comprehensive Plan.

PART B WORKSHEET

NOTE: First time applicants must provide a copy of the most recent audit and copy of the most recent single audit.

1. As CDBG funds are “Gap” financing, did you pursue appropriate other funds

from state, federal agencies and/or private sources? What other funding sources did you pursue for this project? What is the status of those requests?

Habitat Choptank has a proven track record of working with the community to raise money to fund home construction costs for individual projects. However, sites requiring substantial preconstruction and development costs present a challenge. There is a gap in funding this part of the project due to limited funding resources on the Eastern Shore of Maryland. Local foundations do not have the capacity to fund projects of this size, donors and business sponsors give to the direct construction costs on a per house basis, and local governments simply do not have the financial capacity to address additional infrastructure projects. Habitat Choptank has diversified its approach to increasing revenue through development of the ReStore and leveraging assets as described below, but these activities are directed to annual budget costs. This approach allows a greater percentage of grant funding and fundraising to be designated to direct construction costs. However, the gap in funding land development and preconstruction activities remains.

These significant preconstruction costs cannot be recaptured in the subsequent home sales and as such, are ultimately an equity subsidy to the low-income buyers. Because Habitat Choptank builds in areas in need of revitalization where property values are lower, Habitat Choptank does not recapture these costs through the home buyer’s mortgage, even at a discounted or 0% rate. As shown in the attached annual report, Habitat Choptank's income covers a range both in sources and amounts, but these monies were all required to fund ongoing budgeted costs related to homes currently in progress, or scheduled to begin on shovel-ready lots. These resources do not provide the needed funding to pay for the site work and development costs in advance for a multiple home project such as the one planned for Hurlock.

Continued…

Since 1992 and under the direction of a dedicated Board of Directors, Habitat Choptank has worked to strategically improve and progressively expand its program in ways that both meet local needs and are sustainable. Key to this has been increasing capacity for fundraising and grant writing/grants administration while also diversifying the affiliate’s overall income strategy. Expanded income strategies include: ReStore – In 2010 Habitat Choptank opened a resale shop through which donated home

improvement items and furniture are sold to the public to raise money for the affiliate. Net proceeds from the ReStore (~$120,000/year) are designated to cover annual administrative costs for Habitat Choptank which are difficult to fund through grants and fundraising. Mortgage Leveraging - Over the past eight years, the affiliate has leveraged its mortgages for

short-term access to capital when there was an established repayment plan. For instance, in 2011, Habitat Choptank participated in Habitat International’s Flexible Capital Access Program in order to be able to use reimbursable grants without depleting funds for operations. The FlexCAP loan was paid off in December 2013 in advance of the seven-year term when local bank partner The Talbot Bank offered a better rate. Subsequently, the balance on the Talbot Bank loan was paid using proceeds from Habitat Choptank’s first mortgage sale. The mortgage sale was completed with PNC Bank in 2015 as a strategy for converting future mortgage cash flows into accessible capital. Mortgages financed by Habitat Choptank must be 0% interest. Zero percent interest mortgages lose value due to inflation. While the bank purchases the notes at a discount, leveraging recovers more of the value that mortgages would otherwise lose. The proceeds from this first mortgage sale were a crucial part to the Board’s financial forecast developed with the FY16-19 Strategic Plan. These funds have been targeted to cover the additional direct home building costs resulting from increasing the number of homes in production, and the associated increase in programmatic costs including the costs of staff, which are typically not encouraged by grant funders. USDA 502 mortgage program – For its first 23 years, Habitat Choptank operated as a traditional

Habitat affiliate serving as both the builder and bank for all of its homes. Thus, at settlement rather than being paid like a traditional builder, the affiliate simply took back a 0% interest note at settlement with the promise to repay in principal-only payments over 30 years. Given generally low appraisals in the older neighborhoods where it builds, the affiliate often must also subsidize these home purchases with gifted equity when the fair market value at the time of sale is below the total project cost.

Following the lead of other rural US Habitat affiliates, Habitat Choptank has formed a partnership with its state USDA office. Effective 2015, USDA 502 mortgages are the mortgage of first resort for Habitat Choptank buyers. A traditional 0% interest Habitat mortgage is provided to the low-income buyers who do not qualify with USDA. Of the three homes sold this fiscal year to date, one was completed with a USDA 502 loan. This new approach to lending is integral to Habitat Choptank’s FY16-19 Strategic Plan. The goal is for 50% of loans to be closed with USDA loans. The resulting funds are already targeted for expanded construction and programmatic costs, including staff, resulting from the four-year goals for increased home production with home building expanded across four communities.

In summary, while Habitat Choptank has demonstrated the ability year over year to raise the funding for its ongoing low-income home ownership program in a way that engages the community in its work, there is a gap in funding sources for the significant investment of upfront capital required for pre-construction costs on previously unimproved properties such as this project. Maryland CDBG funding will be leveraged with local private resources and other public funds in a manner that meets CDBG objectives and responds to identified local needs.

Continued…

2. Please provide copies of award and rejection letters.

Habitat Choptank maintains an open line of credit for $100,000 with The Talbot Bank to be secured by a mortgage. The finance committee renewed this line in April 2016 and it is available to assist with cash flow for this project. The bank has also expressed a willingness to work with Habitat Choptank if additional access to short-term capital is needed for this project. (see attachments) The PNC mortgage sale letter is also included as an attachment. The funds from this transaction are already designated for home construction and programmatic costs in the financial forecasting with Habitat Choptank’s FY16-FY19 Strategic Plan.

3. Please provide financial information for the applicant and, if applicable, the proposed subrecipient or developer. Specifically, provide the annual budget for the current year including all existing debt.

Sub recipient – Habitat for Humanity Choptank Habitat for Humanity Choptank is a named affiliate of Habitat International and an independent federally designated 501(c)(3) nonprofit organization. Initially founded as Habitat for Humanity Talbot County in 1992, the affiliate expanded to include Dorchester County in 2009 after a group of concerned citizens began organizing in Cambridge around the issues of disproportionate rental housing rates and the lack of quality, affordable housing. The name Habitat for Humanity Choptank was subsequently adopted to reflect the two-county service area. For FY15, Habitat Choptank’s audited financial show sources of gross income as follows: Sources of Income Amount % of Total Funds Contributions (individuals, businesses, churches, etc.) $457,271 31% Special Events $71,493 5% Grants $647,688 44% ReStore $267,863 18% Investments $18,419 1% Other $2,210 0%

TOTAL $1,464,944 In FY15, grants represented a higher percentage of the total funds than usually recommended in general nonprofit budgeting. This is primarily due to the Neighborhood Conservation Initiative grant from Maryland Department of Housing and Community Development, which was a one-time grant award. These funds were strategically leveraged with local support over three years in order grow Habitat Choptank’s capacity and set up the affiliate’s FY16-FY19 Strategic Plan for growth. Also, during FY15, Habitat Choptank grossed $172,004 in principal-only mortgage payments. All mortgages in Habitat’s portfolio are traditional Habitat loans provided at 0% interest. Annual mortgage receipts are known as the ‘Fund for Humanity’ and a designated source of funding used for building more homes in the affiliate’s annual budget. Habitat Choptank’s FY16 budget projected total expenses for construction and land acquisition along with program, administrative and fundraising costs totaling $1,705,980. Projected sources of income mirror the above performance from the prior year, with grants remaining higher than the norm due to the successful spend down on the abovementioned NCI grant. For the PNC mortgage leverage discussed above, Habitat Choptank has pledged 10 mortgages from its portfolio of 54 loans. Beyond this program, there is no existing debt.

PART C

COMMUNITY SUPPORT AND INVOLVEMENT: Describe community involvement with developing this project and application. Attach current letters of support for this project and the CDBG funding. NOTE: This is activity that is separate from the public hearing(s).

Since its founding in 1992, Habitat Choptank has completed 69 homes in Maryland’s rural Dorchester and Talbot Counties. This success is made possible by a unique partnership of individuals, businesses, foundations, government agencies, community groups, and faith-based organizations. To date, well over 6,500 participants/supporters have contributed financial and social capital toward this construction and the revitalization of distressed neighborhoods in the two-county region.

Delivering on the Habitat mission relies on a unique partnership of hardworking home buyers, generous donors and funders, and committed volunteers. Volunteer involvement is key to the organization’s ongoing productivity and success. For fiscal year 2015, 524 volunteers in construction, office work, committee and Board service and at the ReStore logged over 25,757 hours of service which is modestly valued at $609,153 (Independent Sector: $23.56 http://www.independentsector.org).

While the most recognized way of volunteering with Habitat Choptank is in construction, the nonprofit also uses a dynamic committee structure through which Board members and other concerned community members serve on ten standing committees. These teams meet monthly to deliver on the mission:

Building Partnership Mortgage Servicing Finance Site Selection Home Owner Support Neighborhood Revitalization Family Selection Faith Relations Resource Development

Habitat Choptank’s outreach is ongoing. Affiliate representatives give numerous community presentations a year to area service clubs, professional organizations, neighborhood groups and businesses, and at Chamber of Commerce meetings. Community members and neighbors are also invited to attend every home dedication, which is a celebration following settlement when a new home owner receives the keys to the house s/he helped to build. This constant outreach is critical to engaging more volunteers, developing new partnerships, recruiting more prospective home buyers, and raising additional funding. Staff and volunteers also represent Habitat Choptank at weekend events and resource fairs throughout the year.

Specific to Hurlock, the affiliate has conducted additional outreach. Over the last year, the affiliate has made several presentations starting with a Town Council meeting. In partnership with the local elementary school, Habitat Choptank hosted a home buyer recruitment event this spring. And the nonprofit’s faith relations committee for its annual prayer breakfast chose to forego separate Talbot-Dorchester events for one central breakfast in Hurlock. Hurlock United Methodist Church generously provided their facilities and catered the meal. Most recently, the community was invited to celebrate the start of the first home with a ground breaking program. All of these events were announced through press releases, social media, flyers around town and general household mailings so as to engage a wide cross section of the community. Construction on Habitat’s first house in Hurlock is at 408A Charles Street. The parcel came from Dorchester County’s surplus property inventory. The Town purchased the lot from the county and then generously donated it to Habitat Choptank. The Jackson Street property was purchased in 2010 with a grant. The Nathan Foundation wished to invest in north Dorchester County. They approached Habitat Choptank with funding to buy land there for future program expansion. After a few years of planning including a strategic plan for FY16-19, Habitat’s Board decided last year that the organization was ready to sustain its programs with existing partner communities and add the Town of Hurlock.

The weekly construction schedule in Hurlock is Tuesdays and Saturdays and with advance planning on other days. Volunteers age 16 and older, come from all walks of life, and include regular weekday construction crew members, periodic individual and group volunteers, visiting work teams, and the future home buyers, their family members, and friends. Groups from Cambridge have already requested shifts on this house in order to be part of the first Habitat home in Hurlock.

PART D LOCAL PLANNING/GROWTH MANAGEMENT: Answer the following questions: 1. Describe how the proposed project conforms to revitalization strategies, marketing

studies, economic development strategies, capital improvement plans or a comprehensive plan. Do not submit copies of the entire plan(s), but reference the name and date of the plan, the section and the page. You should attach a copy of the REFERENCED portion behind this page of the application.

2. For economic development projects discuss any feasibility studies, economic conditions survey, financial analysis, economic impact assessment or market analysis completed in relation to the proposed activity. Provide the dates those items were completed and information on who prepared them.

3. Is your project located in a Priority Funding Area? _X_ Yes ____ No

ATTACH MAP(S) OF PROJECT AREA

List Census Tract(s) and Block Groups for all projects: 1. The Town of Hurlock, in its 2009 Comprehensive Plan, recognizes housing as critical to its

future vision for the town and its residents. Overall goals & objectives include “directing growth into the downtown community within the existing Town boundaries, either as infill growth or where vacancies exist”; and “ensuring a variety of housing alternatives for all residents of Hurlock.” The desire to promote economic revival is balanced with an intention of “improving the way of life in a manner that is sustainable for generations to come” and in keeping with the character of the community. (page 13-14) The plan includes six housing goals. The project proposed in this application directly supports four of these goals (page 85):

Continued…

GOALS & OBJECTIVES Housing Section pg. 85

PROJECT IMPACT

Create new and affordable housing units and preserve existing affordable housing units

Construction is now underway on the first Habitat home in Hurlock. This project will fund site development costs in order to continue that momentum. With the creation of three shovel-ready lots, three new durable, energy efficient and affordable home ownership opportunities will subsequently be created. Habitat Choptank focuses on infill development in incorporated communities in order to place buyers close to employment, shopping, and other services. Typically, this work takes place around the downtown putting families in walking distance to the town center.

Address affordability needs through mandates placed on new residential development.

Through partnership with Habitat Choptank, no mandates are required. Habitat Choptank’s home ownership program creates opportunities for low-income buyers who cannot qualify for conventional financing. Mortgages resulting from these home sales use recognized practices such as right of first refusal and subsidy recapture to preserve affordability in event of sale by the original buyer.

Recognize the need to address lower income households (below 50% of the median) without creating neighborhoods or pockets of poverty within the Town.

Habitat Choptank’s housing program focuses on infill development within established residential areas where the housing stock has evolved over time versus a cluster development on a large parcel of land requiring annexation. Qualifying buyers have incomes between 35-60% of AMI.

Provide outreach programs with citizens in order to address NIMBY issues

A broad base of community support is key to Habitat Choptank’s mission. Through volunteers, donors, faith and government partners alongside home buyers and owners, Habitat Choptank unites people around the pressing need for affordable housing and a shared belief that quality and affordable home ownership is empowering for the people who live in it as well as the neighbors who benefit from increased stability and improved property values.

2. n/a

3. PFA Map Attached; maps indicating LMI concentration also attached.

Census Tract 9702 (24019970200) and Block Group 3

Low/Mod Concentration in this tract is 73%

PART E NATIONAL OBJECTIVE: 1. Using the attached “National Objective” chart, determine which national objective

will be met by the proposed project. 2. Next, fill out the appropriate worksheet (A, B, C, D or E). Insert that page behind

this one in your application. 3. In the space below, describe in narrative form how the project will meet at least

ONE of the national objectives. X 1. Benefit to Low and Moderate Income Persons: Area Benefit (LMA) % Determined by survey or census (Attach Survey Approval Ltr) X Housing (LMH) X Single Family Multi-Family Rental Owner Occupied Water and Sewer Connections Limited Clientele (LMC) Presumed 51% of clientele are persons whose family is LMI Nature and location conclude area is primarily LMI Removal of architectural barriers Jobs (LMJ) Job Creation Job Retention Total estimated # of beneficiaries ___9___ CDBG $ per beneficiary $ 14,768 Total estimated # of LMI beneficiaries___9___ CDBG $ per LMI beneficiary $ 14,768 % of LMI beneficiaries to total _100__%

2. Elimination of Slum and Blight: Area Basis Spot Basis Of the 3 new construction, durable and energy efficient homes that will be built on Jackson Street in the Town of Hurlock as the result of CDBG-funded lot development, 100% will be sold to low-income households. Qualifying home buyers will have a total household income between 35-60% of area median income. The proposed project combined with home construction costs will benefit an estimated 3 adults and 6 children. CDBG funding will only represent 26% of total project costs versus the 100% occupancy rate by low-income households.

NATIONAL OBJECTIVE CHART Nat. Objective Subcategory Definition Test Examples

Low/Moderate Income Persons

Area Benefit (LMA)

Activity benefits all residents in an area where at least 51% of the residents are LMI

* Census - 51% of persons residing in the service area are LMI, determined by using the most recent data provided by State about cities or towns * Survey - applicant may do a survey of residents in the service area. The results must meet statistical reliability standards and be approved by DHCD.

* water and sewer lines * neighborhood facilities * roadway improvements

Low/Moderate Income Persons

Limited Clientele (LMC)

Activity that benefits a limited number of people as long as at least 51% of those served are LMI

Activity must qualify under one of the following: * Presumed Clientele - benefit to a group presumed to be principally LMI: abused children, battered spouses, elderly persons, severely disabled adults, homeless persons, illiterate adults, persons living with AIDS and migrant workers; or * Require documentation on family size and income in order to show that at least 51% of the clientele are LMI; or * Income eligibility requirements limiting activity to LMI persons only; or * Be of such a nature and in such a location that it can be concluded that clients are primarily LMI

* construction of senior center * public services for the homeless * meals on wheels for the elderly * construction of job training facilities for the disabled

Low/Moderate Income Persons

Housing Activities (LMH)

Activity that is undertaken for the purpose of providing or improving permanent residential structures which, upon completion, will be occupied by LMI persons

* Structures with one unit must be occupied by LMI persons * If structure contains more than 1 unit, at least 51% must be LMI occupied * 2-unit structures must have at least one unit occupied by a LMI household * Rental buildings under common ownership and management located on the same or contiguous properties may be considered as a single structure

* property acquisition or rehab for permanent housing * conversion of non-residential structures into permanent housing * infrastructure for new housing

Slum/Blight Area Basis (SMA)

Activity that aids in the prevention or elimination of slums or blight in a designated area

* Delineated area in which the activity occurs must meet definition of slum, blighted, deteriorated or deteriorating area under state or local law; and * Substantial number of deteriorated or deteriorating buildings or public improvements in the area, and the activity must address one or more of the conditions which contributed to the deterioration of the area; and * Documentation must be maintained by recipient on the boundaries of the area and the conditions that qualified the area at the time of its designation

* public facilities or improvements * elimination of safety hazards

Slum/Blight Spot Basis (SBS)

Activity that eliminates specific conditions of blight or physical decay on a spot basis not located in a slum or blighted area

* Only acquisition, clearance, relocation, historic preservation and building rehabilitation activities qualify for this national objective * Rehabilitation is limited to the extent necessary to eliminate a specific condition detrimental to public health and safety

* elimination of faulty wiring, or other similar conditions that are detrimental to all potential occupants * demolition of vacant, deteriorating building

Low/Moderate Income Persons

Jobs (LMJ)

Activity that results in the creation and/or retention of jobs

* At least 51% of jobs must be taken by or held by LMI persons * At least 51% of jobs must be retained by LMI persons * Permanent, full-time jobs only * LMI status is determined by income of the family

* acquisition of land to construct a distribution center * extension of water and sewer service to land to be developed for an industrial park * acquisition of equipment

Low/Moderate Income Benefit Worksheet C

Housing (LMH)

If you have determined that the proposed project will meet the national objective of benefit to low and moderate income (LMI) by providing, constructing or improving permanent residential housing (LMH), please fill out this form and attach it to Part E of your application.

1. Estimated Total Beneficiaries Count __3___ Units AND __9___ Persons 2. For new construction of rental units, how many total units will be constructed? ______ n/a

Of these, how many are to be occupied by LMI persons? ______

3. For new construction of homeownership units, how many total units will be constructed? __3___ Of these, how many are to be occupied by LMI persons? _3__

4. For housing rehabilitation, how many total units will be rehabilitated? _____ n/a 5. For housing rehabilitation, how many total units will receive emergency repairs? _____ n/a 6. Will requested funds be targeted to an area of minority concentration or a specific geographical

area? Y X N If yes, provide specific explanation of why this area was targeted.

7. Will program income be generated by this activity? Y X N If yes, provide Re-Use Plan as an attachment to this application. Previously approved Re-Use Plans will not be accepted

Based on guidance from area real estate professionals, it is estimated that Habitat homes in Hurlock will appraise similar to recent single-family projects in Cambridge ($120,000). As such, Habitat Choptank will only be able to capture in the home sale amount the costs for property acquisition, subdivision and site plans, construction, and supervision. An estimated $120,000 purchase price for each home is based on the Habitat Choptank Board’s Sale of Housing Units policy which specifies that the affiliate will not sell a home for more than the property’s fair market value. The Jackson Street homes will be sold with either low-interest equivalent USDA 502 mortgages or no-interest Habitat mortgages. If the former, the sale price may be further subsidized to provide a zero-equivalent monthly mortgage payment for the low-income qualifying buyer. Given the current limitations of the market, it is highly unlikely the costs of site development funded by CDBG will be recaptured in the sale price. If financed with a 30-year Habitat mortgage, this gifted equity will be protected with a soft second mortgage (a.k.a. a deferred subordinate mortgage). The second exists for the lifetime of the first mortgage; no payments are required on the second unless the buyer sells or refinances prior to pay off on the first. Habitat Choptank mortgages also include a right of first refusal / buy back provision in the event of sale. If financed by USDA with a 33-year mortgage, the homes will be subject to, in the event that title transfers, subsidy recapture calculated according the buyer’s interest rate subsidy and payable to USDA in consideration of the discounted interest rate if any.

PART F

SOURCES AND USES OF FUNDS: List each specific project activity separately (please break down the costs as far as possible). Type in the actual sources of other funding. Indicate whether funds are “L” for loan or “G” for grant. INDICATE STATUS OF FUNDS using “P” for pending, “C” for committed, “R” for received, “N” for no action. Attach commitment letters and cost estimates directly behind this page of the application. For administrative costs, indicate what portion of local contribution is cash and what portion is in-kind. ALL PROJECTS MUST INCLUDE ADMINISTRATIVE COSTS FOR THE APPLICANT.

ACTIVITY

SOURCES OF FUNDS TOTALS BY ACTIVITY

STATUS

CDBG: APPLICANT OTHER : OTHER: OTHER:

Acquisition – complete $26,156 $26,256 R- Nathan Foundation(G)

Site Engineering - complete $11,532 $11,532 R – General Fundraising

Sewer/Water Connection Fees $30,000 $30,000 C – Waived by Town

Site Work: Clearing Demo, Sediment Control, Grading

$43,000 $43,000

P – CDBG Application (G)

Site Work: Driveways $17,475 $17,475

Site Work: Service Installation $50,198 $50,198

Site Work: Geotechnical Testing and Surveying

$8,730 $8,730

Site Work: 10% Contingency $11,940 $11,940

New Construction $267,900 P – General Fundraising; PNC

Mortgage Sale; USDA 502 mortgage program

Project Admin. (Cash)

Project Admin. (In-Kind) $53,267 $53,267

General Admin. (Cash)

General Admin. (In-Kind)

TOTALS BY SOURCES OF FUNDS $131,343 $53,267 $30,000 $294,056 $508,666

PART G STAFFING AND PROJECT MANAGEMENT: This section will discuss the capacity of the applicant to administer the project and how CDBG funds will be used for project administration costs. Project costs for engineering, architectural services and inspections are to be identified as separate line items in Part F.

1. Identify the primary person who will administer this project. Discuss their experience with CDBG regulations and requirements and past grant and project implementation.

Grants administration will be handled by Habitat Choptank’s Executive Director, Nancy Andrew. Andrew has over 15 of proven experience in nonprofit management, program development, and grant writing and administration. During her seven years with Habitat Choptank, the nonprofit has completed home builds using a variety of public and private funding sources. State funding sources have included Maryland Energy Administration, Maryland Affordable Housing Trust, Neighborhood Conservation Initiative (DHCD), and Community Investment Tax Credits (DHCD). The affiliate received its first CDBG sub recipient award in 2013 through a successful application with the Town of Easton. That grant covered site development costs for a five-home development on Port Street in Easton. All of those funds have been used for the project as planned.

2. Identify others who will assist in the administration of this CDBG project.

Wayne Suggs is currently leading the Jackson Street project through engineering and review with the Town of Hurlock and will continue to do so through bidding and completion of site development work. Suggs is Habitat Choptank’s Director of Construction, a new position added in 2015 as part of the nonprofit’s strategic plan for growth. Suggs brings almost 20 years of experience in both residential and commercial construction overseeing projects of up to $10.5 million. He has a proven record in all phases of construction including management of general contractor labor force, coordination of subcontractors, and project scheduling. Habitat Choptank’s construction site supervisors report to the Director of Construction.

3. Amount of funds requested for Project Administration, if any: $0 4. If Project Administration funds requested for staffing, please identify the following:

Person # Hours Anticipated to Work on Project

Hourly Wage Total Funds

n/a 5. If planning to use Project Administration funds for other expenses other than staffing, identify those expenses and estimated costs.

Expenses Estimated Costs

n/a

PART H PROJECT SCHEDULE: Using the anticipated month of grant award as the start of the activities, list all project activities and the anticipated dates for the start and end of specific activities. A CDBG grant agreement provides a 24-month implementation period so all activities to be paid for with CDBG funds must occur within this timeframe. If an activity is completed prior to application or award, indicate the actual dates. EXAMPLE: CDBG funds are being requested for site acquisition and construction; local government is paying for engineering. The applicant provided the following schedule: Activity Begin Completion Grant Award July 2016 Environmental Review July 2016 September 2016 Preliminary Engineering Completed Site Acquisition September 2016 October 2016 Engineering September 2016 October 2016 Bidding/Contractor Selection November 2016 December 2016 Meeting 180 Day Expenditure Requirement January 2017 January 2017 Construction January 2016 October 2017 NOTE: An Environmental Review is the first step for every funded grant after award date

CDBG Project ACTIVITY

BEGIN COMPLETION RESPONSIBLE PERSON

GRANT AWARD July 2016 Applicant ENVIRONMENTAL REVIEW July 2016 September 2016 Applicant Subcontractor Bid / Selection September 2016 November 2016 Sub recipient 180-Day Expenditure Requirement November 2016 December 2016 Sub recipient Site Work December 2016 March 2017 Sub recipient Grant Reports Due in January & July Applicant

The following project activities have been completed in advance of this application

• Site Acquisition • Subdivision • Site Engineering • Approvals Secured for: storm water management plan; forest delineation, sediment and

erosion control • House Floor Plans

With these activities completed, Habitat Choptank can bid site development work within 90 days of a CDBG award notice. Site work can begin within 30 days of completing bidding and selection. Habitat Choptank is prepared to meet the 5% spending goal within 180 days.

Continued…

Community support and involvement are fundamental to the Habitat mission. Direct volunteer engagement, working alongside and in partnership with the future home owners, is critically important to raising funds, creating partnerships, and engaging advocates. While volunteers assist throughout the organization, the participation of volunteers in construction is essential to connecting current and new supporters to local housing needs and to Habitat Choptank’s mission and program as a proven strategy for addressing these needs. This is especially important for the affiliate in a new service community like Hurlock. Most of the labor for a Habitat Choptank house is provided by volunteers – generally ~4,000 volunteer hours/ house. In advance of this project, Habitat Choptank has made moves toward accelerating its build schedule while still engaging volunteers. Mostly significantly, the affiliate has reorganized and expanded its construction staff team (including the July 2015 addition of a new Director of Construction position) and is recruiting more volunteers for additional build days. The house construction schedule below is realistic for Habitat Choptank and maximizes community participation and support for the mission with hands on opportunities to build alongside the future home buyers as the affiliate expands into north Dorchester County.

Construction BEGIN COMPLETION RESPONSIBLE PERSON

Permitting for Construction January 2017 February 2017 Sub recipient Construction House 1 March 2017 January 2018 Sub recipient Construction House 2 February 2018 December 2018 Sub recipient Construction House 3 January 2019 November 2019 Sub recipient

PART I DAVIS BACON: 1. Do Davis-Bacon wage rates apply to the project? Yes X No 2. If yes, do cost estimates reflect use of Davis-Bacon rates? Yes X No 3. Use the space below to:

a. Discuss Davis-Bacon rates and their impact on the project; and b. Explain how you calculated the rates into your cost estimates.

a.

In preparing this application, Habitat Choptank developed cost estimates with and without Davis Bacon wage rates. This application is submitted based on guidance that Davis Bacon does not apply. However, it should be noted that if that guidance changes, the Davis Bacon requirement would add a 25% cost increase where those wage rates are used.

b.

n/a

PART J ACQUISITION / RELOCATION: 1. Has site control been secured? X Yes No If yes, explain how: Habitat Choptank purchased the Jackson Street properties in 2011 in preparation for its future expansion into north Dorchester County. The larger of the two parcels was subsequently approved for subdivision by the county into two single family lots. 2. Has an option been secured? Yes No If yes, explain how: n/a 3. Estimated cost of acquisition: $ 25,000

4. Sources of funds for acquisition: The Nathan Foundation grant

5. Number of parcels to be acquired: Residential: n/a Business

6. Will acquisition be done with eminent domain if needed?

Yes No n/a 7. Is acquisition of easements required? Yes X No If yes, did applicant include costs associated with the Uniform Act? Yes No 8. Has anyone been forced to move from the site within the three months prior to

the initial application for funds? Yes X No Unknown If yes, explain: 9. Estimated cost of relocation: $ n/a

10. Sources of funds for relocation: n/a

# Units in Property(s)

Number of Units Occupied at time of application

Number of

Number of Occupants to Remain

________ Owner

Tenant

Occupants to be Displaced

Total

Temporarily Relocated

Residential

Business

10. Do the activities of this project trigger the one-for-one replacement housing requirements? Yes X No If yes, discuss how you plan to meet these requirements.

PART K PROCUREMENT: 1. Describe any major procurement anticipated to be undertaken with CDBG funds for

this project. 2. Describe the method that will be utilized by the applicant in procuring the goods

and services described above. (i.e., competitive sealed bids, competitive negotiation, etc.)

3. If contractors to be paid with CDBG funds are on retainer to the grantee, subrecipient, developer or business, describe how and when they were initially procured.

1. Major procurement for Home Ownership for Hurlock will be subcontracting for the

following: site clearing including grubbing of trees and brush, sediment control, sewer/water installation, new underground electrical, and installation of driveways.

2. Habitat Choptank will seek multiple bids using a competitive negotiation process to

select the primary subcontractor for the site work on this project. Each contract will be awarded to the firm that provides the best value and is the most responsive. The firm must be evaluated for the affiliate’s approved vendor/subcontractor list in order for their proposal to be accepted. For individual service costs below $10,000 (e.g. if surveying is needed during construction), a minimum of three written bids will be obtained; these will be evaluated on the same criteria as the competitive negotiated bids.

3. Habitat Choptank does not have subcontractors on retainer.

PART L FAIR HOUSING/EQUAL OPPORTUNITY: Applicants certify that a grant will be conducted and administered in conformity with Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq.) and that the jurisdiction will affirmatively further fair housing. Complete the following to show what steps have been taken by the jurisdiction in these areas.

1. Does the jurisdiction have written employment and personnel policies and practices with

equal opportunity guidelines? Yes No 2. In the past three years, have any complaints of discrimination in employment been filed

against the jurisdiction by employees or applicants regarding employment? Yes No If yes, please explain:

3. Has the jurisdiction adopted a fair housing ordinance? Yes No 4. Has the jurisdiction taken any actions to affirmatively further fair housing through

activities such as land development, zoning, site selection policies or programming or needs assessment? Yes No If yes, please describe:

5. Are there fair housing advocates or agencies that work in your county? If yes, who are

they? Have they informed you of either public or private issues or complaints regarding discrimination?

PART M ENVIRONMENTAL IMPACT: Please complete the following information related to your overall project to the best of your knowledge. Please provide copies of any letters or other information received to date from state and/or federal agencies about your project.

1. If your project located in a floodplain per the current or proposed FEMA maps?

Yes X No 2. Is your project located in tidal or non-tidal wetlands? Yes X No

3. Will your project involve the renovation or rehabilitation of a building that is at least 50

years old or is located in a national historic register district? Yes X No 4. Will your project involve or impact an archaeological site? Yes X No

5. Will your project impact any wildlife that is threatened or endangered? Yes X No

6. Will your project involve the abatement or removal of asbestos from a building? Yes X No

7. Will your project involved the abatement or removal of lead paint from a building? Yes X No

If you answered YES to any of the above questions, please ensure that your schedule and budget take any mitigation or corrective actions into account. If you are already aware of required mitigation or corrective actions that will have to be taken, please describe below:

n/a

STATEMENT OF ASSURANCES AND CERTIFICATIONS The applicant hereby assures and certifies that it: 1. has adopted and maintains a written Citizen Participation Plan in accordance with

the citizen participation requirements for the Community Development Block Grant (CDBG) Program at the Code of Federal Regulations 24 Part 570.486; and

2. held a public hearing and provided appropriate notice to ensure participation of citizens in the development the project and of this application for CDBG funding; and

3. assures that all reasonable steps have been taken to minimize the displacement of

persons as a result of CDBG assisted activities identified in this application; and

4. in the event that our project does trigger displacement of persons, we will comply with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and implementing regulations at 49CFR Part 24 and it has in effect and is following a Residential Anti-Displacement and Relocation Assistance Plan required under Section 104(d) of the Housing and Community Development Act of 1974, 42 U.S.C. § 5304(d), as amended, in connection with any activity assisted with funding under the CDBG Program; and

5. will not attempt to recover any capital costs of public improvements assisted with

CDBG funds, by assessing any amount against properties owned and occupied by persons of low- and moderate-income, including any fee charged or assessment made as a condition of obtaining access to such public improvements. However, if CDBG funds are used to pay the proportion of a fee or assessment attributable to the capital costs of public improvements (assisted in part with CDBG funds) financed from other revenue sources, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than with CDBG funds. In addition, with respect to properties owned and occupied by moderate-income (but not low-income) families, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than CDBG funds if the State certifies that it lacks CDBG funds to cover the assessment; and

6. will conduct and administer grant in conformity with title VI of the Civil Rights Act of

1964 (42 U.S.C. 2000d) and the Fair Housing Act (42 U.S.C. 3601-3619) and implementing regulations and agrees to take action to affirmatively further fair housing; and

7. has adopted and is enforcing:

a) a policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individuals engaged in non-violent civil rights demonstrations; and

b) a policy of enforcing applicable State and local laws against physically barring entrance to or exit from a facility or location that is the subject of such non-violent civil rights demonstrations within its jurisdiction.

8. will certify, to the best of the certifying official's knowledge and belief, that:

a) no Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement; and

b) if any funds other than Federal funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress with this Federal contract, grant, loan or cooperative agreement, it will complete and submit Standard Form- LLL, Disclosure Form to Report lobbying in accordance with its instructions; and

c) it will require that the language of paragraphs (a) and (b) of this certification be included in the award documents for all sub-awards at all tiers (including subcontracts, subgrants and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.

9. will adhere to federal and state Code of Conduct standards relative to conflict of

interest restrictions and financial disclosure requirements for local elected officials and candidates; and

10. will prevent fraud, waste and abuse of federal funds and ensure that funds are expended on activities that are reasonable and necessary; and

11. will comply with the provisions of Title I of the Housing and Community Development

Act of 1974, 42 U.S.C. § 5301 et seq., as amended, Title 24 CFR Part 570, and with other applicable State and Federal laws if awarded this grant.

I declare that I am duly authorized to make these certifications on behalf of the applicant and certify that the above actions have or will be taken. __________________________ ______________________________ _______ Typed Name and Title Signature Date Chief Elected Official

Maryland Community Development Block Grant Program Application Checklist

Attachment Required

Submission ?

Included

?

1 Anti-Displacement Plan Only if new plan Town 2 Citizen Participation Plan Only if new plan Town 3 Copy of Applicant’s audit Only if new applicant Town Clearinghouse Submission Yes Town 5 Copy - Commitment letters from other funding

sources Yes

Copy - Rejection letters from other funding sources Yes n/a 7 Copy – Relevant sections of plans as required under

Part D Yes

Copy - Survey Approval Letter If Applicable n/a 9 Cost Estimates Yes Debarment Check Only if issues Town Fair Market Rent Policy Only if application for

rental housing n/a

Form - Status of Revolving Loan Fund Program and/or Housing Revolving Fund Program

Only if jurisdiction has program(s)

n/a

13 Local Resolution Yes Town 14 Map Yes 15 Map of the area showing areas of minority

concentration, LMI concentration and other assisted housing in the area

Only if application for new housing

National Objective Worksheet(s) Yes 17 Photographs and CD of Photographs Yes 18 Program Income Re-Use Plan If applicable n/a Public Hearing Minutes Yes Town 20 Public Hearing Notice Yes Town Rental Housing Loan Terms and Requirements Only if application for

rental housing n/a

Statement of Assurances and Certifications Yes Town Letters Related to Environmental Issues/Concerns Yes n/a 24 Support Letters (See attached list) Yes 25 Copy of 501(c)3 status If applicable

Original Application and 4 copies (2 for Special) Yes Town