THE HOUSING REHABILITATION PROGRAM
Pioneer Valley Planning Commission
60 Congress Street, Floor 1
Springfield, Massachusetts 01104
Welcome to the housing rehabilitation program. Your city/town has received state and
federal government funds to help its citizens repair their homes. The city/town can now
make deferred payment loans to single and multi-family property owners to help cover
these repair costs. If you have received this handbook, your housing rehabilitation or
septic system repair application has been determined to be income eligible. The next two
steps will determine if your application will be approved. These are:
> To determine if the items in need of repair on your property are eligible activities
in accordance with the state and federal policies and regulations that guide the
use of these funds.
> Your willingness to accept the terms of your deferred payment loan (DPL),
including all federal, state, and local policies, procedures, and regulations that
are conditions of the DPL.
This handbook has been designed to explain the policies, procedures, and regulations
that guide the program, as well as explain the roles and responsibilities of all the parties
who will carry out the rehabilitation project on your property. The format of the handbook
is a series of questions and answers.
Please review the handbook thoroughly. If you need any assistance or have any
questions, our staff is available to review the program with you. You may contact the
Program Administrator, the Pioneer Valley Planning Commission (PVPC), at (413) 781-
Is this a loan or grant?
A deferred payment loan (DPL) is a no-interest loan that is similar to a second mortgage
on your home, with a few important differences:
> No payments are made during the lifetime of the loan.
> No payment is required at the end of the loan.
> Payment of the loan is made only if the property is sold or transferred during the
lifetime of the loan or when the conditions of the loan agreement are not met.
The loan funds have been made available to your city/town through the Massachusetts
Department of Housing and Community Development’s (DHCD) Community
Development Block Grant Program, which is a federally funded, competitive grant
program designed to help small cities and towns meet a broad range of community needs.
The length of the loan is fifteen years, however, the maximum loan amount varies by
city/town. A loan agreement is made between you and the city/town administering the
funds. The loan agreement outlines the terms of the loan, such as payment, insurance
requirements, and regulatory requirements of the funding source.
An attachment to the agreement is an assignment of proceeds, a document that allows
the program to record a lien on your property in the amount of the loan. If at any time it is
determined that income levels have been falsified payment of the loan will be due
immediately and a permanent lien will remain on the property until the loan amount is paid
The loan agreement requires property owners to maintain homeowners insurance and
floodplain insurance if the property is located within the 100-year floodplain. If your
property requires floodplain insurance, the DPL requires that you maintain floodplain
insurance for the lifetime of the loan. The program will pay for the first year of floodplain
All clients are evaluated for a financial contribution to the project. Depending on your
income level and debt burden, you may be asked to contribute up to 10% of the total
project cost. If your property requires repairs and improvements over a certain dollar
amount, you may not qualify for a loan. However, we may be able to help you find money
from other private or public sources to complete your rehabilitation project.
Investor-owners will be eligible to receive a maximum of 75% of the total project cost per
dwelling unit. Investors will be required to provide matching financing at a rate of $1 in
private and/or other financing to each $1 of program funds. Investor-owners will have to
agree to some rent restrictions for fifteen (15) years from the date of the completion of the
program. Investor-owners will be required to sign the rent stabilization agreement within
the loan contract as well as an Affordable Housing Restriction. The purpose of these two
documents is to assure that the premises will be retained as affordable housing for
occupancy by low and moderate income persons of families. In addition, these documents
specify the limits of monthly rental increases over the 15-year duration of the Affordable
Housing Restriction This information will be included in your loan agreement.
When private funds are being used, the owner contribution will be the first funds used
toward the payment. The owner will issue a payment in the form of a certified check,
banker’s check, or money order. No personal checks are allowed.
There are rare exceptions to the loan limit. If extraordinary conditions exist and no other
funding can be found, a waiver of the maximum loan limit may be sought from the
city/town, and when necessary, from the Massachusetts DHCD. Waivers of the loan limit
are only permitted on an exception basis for extraordinary circumstances.
A DPL may be used for repairs and improvements including but not limited to the
correction of building code violations, health or sanitation concerns, or the replacement
of failed mechanical or structural systems. The following is a list of some of the types of
> lead paint abatement,
> electrical repairs and improvements,
> plumbing repairs and improvements,
> heating systems and hot water tanks,
> roof repair or replacement,
> masonry repairs to chimney or foundation,
> replacement of windows and storm windows,
> septic system repair or replacement, and
> accessibility modifications.
Aging in Place: If you are receiving assistance through the Aging in Place program,
there is no DPL. Owners who qualify for the Aging in Place program will receive this
assistance in the form of a grant. All other terms outlined in this document are consistent
with both programs.
What are the roles and responsibilities of the City/Town and PVPC?
Your city/town has received public funds from the Commonwealth of Massachusetts
and/or the United States Department of Agriculture to establish a loan program for private
property rehabilitation for eligible residents. It is the responsibility of the city/town to
comply with all federal and state regulations regarding the use of these funds. In order to
do this, the city/town has hired the PVPC to administer and coordinate its loan program.
The PVPC is responsible for processing loan applications and making recommendations
to the city/town for housing rehabilitation and/or septic system repair loans. In addition,
the PVPC coordinates the use of the loan funds in order to comply with various federal
and state policies and regulations.
What is the rehabilitation process? What are my responsibilities?
The first part of the rehabilitation process consists of a series of inspections of your
> For housing rehabilitation projects, the housing rehabilitation specialist will inspect
the property for code violations and general property conditions.
> For properties that may require lead paint removal, a lead paint inspector will
review the property to determine the location of lead paint on the exterior and
interior of the house.
> For septic repair projects, a septic designer will conduct an inspection of your
current septic system.
> Through a site visit or photograph, the historic preservation planner will determine
if the house is considered historically significant.
The inspections for lead paint and septic system repair are conducted on a consulting
basis. The fee for these services will be included in your DPL. The Program Administrator
maintains a list of qualified lead paint inspectors and septic designers will be determined
based on the city/town where the property is located.
During each inspection, it is your responsibility to assist the inspector in identifying items
in need of repair. The inspector will determine the extent of the condition or problem.
Some of the inspectors will photograph your property. These photographs will become
part of the inspection report. Each inspector will create an initial inspection report. These
reports will be in written format and will be signed and dated. It is your responsibility to
review these reports and assure yourself that your property has been accurately
described. All inspection reports are for the use of program staff only and will not be used
for any other purpose. It does not take the place of any inspections that may be required
for necessary permits.
The results of the inspection report will be the basis for the project work specifications. If
the house is historically significant, the project specifications must be in compliance with
historic preservation standards. The scope of work for the rehabilitation project or septic
repair must be for eligible construction items as per the program guidelines for the CDF
or HPG programs. The housing rehabilitation specialist or the septic designer will prepare
the project specifications in a Work Write Up (WWU), noting items to be rehabilitated,
estimated cost, and justification or reason for the rehabilitation. The WWU will be signed
and dated by the housing rehabilitation specialist or septic designer.
It is your responsibility to:
> Review the WWU to make certain that the project specifications address the
needs as identified in the initial inspection reports of your property.
> Approve the work to be performed on your property.
You must approve the specifications by signing the first page of the WWU. Once the
specifications are approved, the Program Administrator will prepare the loan agreement
between you and the city/town and send it to you for signature, along with the assignment
Hiring the Contractor
General contractors and septic installers are hired through a bidding process conducted
by the CDO on your behalf. The Program Administrator mails an invitation to bid to all
approved contractors for the city/town where the property is located. Contractors are
invited to attend a project walk-through and submit bids for the project. All bids will be
reviewed by the Program Administrator and you will receive a Bid Comparison Form to
select a contractor to perform the work.
While the contractor submitting the lowest bid is usually chosen, you may choose any
contractor who submits a bid. The program, however, will not finance a loan for an amount
other than the lowest bid that is qualified and approved by the staff, with the balance to
be financed from other sources by the owner. If the bid price is over the loan limit, the
project may be able to proceed under the following circumstances:
> You may make a contribution to the cost of the project for the amount over the loan
> The specifications may be revised and the project may be re-bid; or
> Depending on the amount and need, a waiver may be sought from the
If the bid price is still higher than the total amount of funds available for the project, and
no other options are available, it may be determined that your project is outside the scope
of the program.
Once the award has been made, a contract between the owner and the contractor will be
signed. All the contract forms are prepared by the Program Administrator.
During construction, the housing rehabilitation specialist or the septic designer makes
periodic inspections to ensure the work performed complies with the approved
specifications. The housing rehabilitation specialist or the septic designer makes
recommendations for approval of payment requests based on their inspections. A
progress payment request is made and must be agreed to by the owner, contractor,
housing rehabilitation specialist or septic designer, and community development staff.
Progress payments will only be made for completed items from the specifications.
Housing rehabilitation progress payments generally are made at 33%, 66%, and 100%
intervals and the release of retainage (30 days after completion). Payments for the septic
repair program are often made at the completion of the project and the release of
retainage. The contractor must provide the Program Administrator with signed copies of
permits or a certificate of compliance from the building inspector with their request for the
final payment. The program holds back 10% for retainage, except for Aging in Place
projects, in which case no retainage is held back.
It is your responsibility to be present at the progress inspections and to be certain that
when you authorize payment you are satisfied with the quality of the workmanship and
the materials used. The Program Administrator is responsible for ensuring that the work
is in compliance with the project specifications. If you have a concern or issue with the
work being performed on your property, it is your responsibility to notify PVPC
directly or through the housing rehabilitation specialist.
To disburse funds, the owner will be required to approve, in written form, all work that has
been completed and the payment for same. Once this approval for payment has been
made, a check in the approved amount will be made directly to the contractor. If during
the application process a determination for an owner contribution was made, the owner
contribution will be the first funds used toward the payment. The owner will issue a
payment in the form of a certified check, banker’s check or money order. No personal
checks will be accepted. The owner must submit a copy of their check to the CDO.
The final inspection is conducted to confirm that all work has been properly completed
and that all code violations have been corrected. This documentation, as prepared by the
Program Administrator, will consist of a final report and/or statement noting that all work
as specified has been completed and all items are functional with photographic
documentation of the same. For historic housing rehabilitation projects, the report must
also contain the final historic inspection conducted by the historic preservation planner.
This must be agreed to by the owner, contractor, housing rehabilitation specialist or septic
designer, the CDO, and when applicable, the historic preservation planner. Usually there
are a few items that need to be completed. The housing rehabilitation specialist creates
a punch-list of these remaining items for the contractor to complete during the retainage
period (usually 30 days).
At the release of retainage inspection, you will be asked to sign the owner’s statement of
completion. As part of the release of retainage, the contractor should provide the property
owner with all applicable material and equipment warranty information.
Who provides utilities during construction?
The owner provides the contractor with all necessary utilities, including water and power,
at no charge during the construction period. This also includes access to a telephone for
receipt of messages and the placing of local calls.
Who gets the permits for the construction?
The contractor is responsible for obtaining all permits for construction. Payments may be
withheld during construction if permits are not obtained. The retainage payment may not
be issued unless all required local permits have been obtained and approved.
How do I get ready for construction? What kind of things should I
expect during construction?
> Start planning ahead. Plan adequate storage space for contractor tools,
equipment, and materials.
> Make arrangements for the contractor to get into your property if you or your
tenants will not be home during the day.
> Prepare your property and furnishings for remodeling. Put away all breakables and
valuable items that may be in the way of the workers.
> When the work starts, keep your copy of the contract handy and refer to it often.
CHECK WITH THE REHABILITATION SPECIALIST or the septic designer if there
is anything you do not understand once the work has started.
> Try to stay out of the construction area, this is especially true for children. This will
help prevent injuries and allow the workers room to work.
> Expect the unexpected— unforeseen problems may be uncovered during the
course of the work which may require a plan change. Be prepared if this should
happen and discuss changes with the rehabilitation specialist. Changes must be
approved by you and the contractor and be authorized by the CDO in writing.
> Stop problems before they start – if something isn’t going the way you feel it should,
or if you don’t understand it, SPEAK TO THE CONTRACTOR FIRST. IF THE
PROBLEM CANNOT BE RESOLVED, CALL THE REHABILITATION
SPECIALIST and get an acceptable explanation or correction before it progresses
Can I do any of the work myself?
In certain cases, the program may allow for self-help to complete a rehabilitation project.
You may perform some or all of the tasks required to rehabilitate the property, as long as
you have the degree of skill required to perform the work involved.
Self-help is usually appropriate for the accomplishment of tasks of an unskilled nature
such as general cleanup; demolition of a small building on the property; removal, cartage,
and disposal of debris; and for work that involves minimal use of expensive material and
equipment. Work of a skilled nature is appropriate if it is established that you have the
necessary ability and experience to do the work. Under the self-help program, you are
expected to perform the work in a workman-like and expeditious manner.
The housing rehabilitation specialist will prepare a detailed work write-up and you will
prepare an itemized material cost estimate. This cost estimate must be accompanied by
a quote from the suppliers.
Materials must be installed before a payment will be issued. No power tools, hand tools,
or equipment will be paid for with program funds. Labor performed by you, or a member
of your immediate family is not considered an eligible cost. Receipts from other sources
must be approved and will be paid on final inspections. Invoices made out by you will not
be paid. Finance charges will not be paid. No substitutes or changes will be made without
the written consent and approval of the housing rehabilitation specialist in the form of a
change order. All checks will be made payable to the supplier and you.
All work must be conducted and completed in an expeditious manner. If there are any
delays, you must notify the housing rehabilitation specialist. If at any time the housing
rehabilitation specialist finds the material is not being installed correctly and in a good
workman-like manner, or you have stopped the work, or are not making reasonable
progress, a determination will be made whether or not you will be allowed to continue or
if the remainder of the work will be contracted out or the project canceled.
You are responsible for getting all applicable permits when the work is not covered by
contractors’ permits. You are encouraged to take out adequate liability insurance.
What if my house needs to be vacated during construction?
In the case of construction that includes the removal of lead paint or asbestos, it may be
necessary for the property residents to be temporarily relocated. Housing rehabilitation
program staff will be available to help residents coordinate their temporary relocation. The
following policies guide the relocation process:
Tenants will be eligible to receive relocation assistance. The type of assistance
offered to tenants includes reasonable moving expenses, reasonable lodging,
meals at a rate not to exceed $25.00 per person per day, transportation (per
approval only) and moving and/or storage expenses, and advisory services
needed to help in relocating. Only pre-approved expenses will be reimbursed.
PROPERTY OWNER’S HANDBOOK – FY21 Page 8 of 10
Receipts for expenses must be submitted to the housing program manager or
representative for reimbursement.
> Tenants may opt to stay with relatives or friends or otherwise provide for their
relocation needs while they are temporarily relocated. This choice does not
preclude her/his receipt of other relocation payments or assistance.
> Under certain circumstances, owner occupants may also receive some assistance
if financial hardship can be demonstrated.
What if my house needs more work than the work listed in the
During construction, a situation may be uncovered which requires a change in the
specifications. The housing rehabilitation specialist or the septic designer will inspect the
suspect area and make a determination of the need for a change order. If the program
makes a determination for a change order, that change order must be agreed to in writing
by you, the contractor, the housing rehabilitation specialist or the septic designer, the
CDO, and when appropriate the historic preservation planner. (NOTE: Emergency
circumstances may require verbal authorization followed by written confirmation.)
What if the rehabilitation costs are too high?
In some cases, the rehabilitation costs are beyond the scope of the Housing
Rehabilitation Program and therefore the project cannot move forward. However, for
projects which are proceeding, yet exceed $35,000 in cost, prior approval from the
Massachusetts DHCD, is required. Projects involving lead, barrier removal, septic,
asbestos, and historic preservation can go up to $40,000 without prior state authorization.
All projects that fall within this category of higher cost, must be able to demonstrate need,
cost reasonableness, and compliance with applicable state and federal requirements to
be considered for construction approval.
What should I do if I am not satisfied with the work or have questions
or concerns during construction?
If you have a question or concern regarding the work being done at your property, use
the following sequence to determine who to contact:
> If you have a question or concern about the work being done, speak to the
contractor first. Remember that you have a contract with the contractor. Feel free
to ask questions or voice any concerns.
> If your concerns are not addressed by the contractor, please contact the housing
rehabilitation specialist who is overseeing the contractor’s work.
> If your questions or concerns cannot be answered by the contractor or
rehabilitation specialist, or if you feel that you need to speak to someone in the
PVPC office regarding the housing rehabilitation program, please contact the
PVPC Director of Community Development.
> If you remain unsatisfied with the decision of the PVPC, you may be able to pursue
the matter further by filing a formal grievance.
What kind of warranties do I have on the construction?
The contract between you and the contractor provides a one-year warranty on all work
and materials from the date of 100% completion. Should any problems arise please
contact the contractor directly. The contractor should provide you with all material and
equipment warranties for work performed on your house. If you need assistance, please
If I own a multi-family house, how do I make sure I am still complying
with the terms of my housing rehabilitation loan after construction is
The rent stabilization agreement and Affordable Housing Restriction are both in effect for
fifteen (15) years after the date of the 100% completion. The purpose of this agreement
is to maintain affordable housing for low and moderate income tenants.
The rental agreement includes a unit’s base rent, allowable rent increases, the dates rent
increases can occur, the effective date of the agreement, a sign-off by the tenant, and the
procedure by which the tenant(s) will be notified of the rental agreement.
The agreement also contains a stipulation that you are responsible for reporting
vacancies to the appropriate housing agencies. If the unit is vacant and then occupied
after rehabilitation, it must be rented according to the fair market rent. If you need any
assistance with establishing or setting a rent increase, please call the CDO.
The CDO will monitor the property owner for compliance with the rental agreement.
Tenants will be notified in writing of the agreement, its effective date, the present agreed
upon rent, and their rights in the event of a violation of the agreement. If violations of the
agreement occur, the method of recourse will be a notification of violation from either the
chief elected official (CEO) of the lead community or the CDO for the respective grant
program. The CEO will be empowered to order compliance with the rental agreement
and, failing compliance, immediate repayment of the DPL.
If you have vacant units, please contact the local housing authority and HAP, Inc. in
Springfield to notify them of the vacancy. These agencies maintain waiting lists of income
eligible households in need of housing. Or, if you identify potential tenants, you may ask
the Program Administrator to determine if they are income eligible.
What if I want to refinance my property after construction is
Property owners may seek refinancing of their property after construction completion.
Your financing institution may require that the lien held by the city/town for the
rehabilitation project be subordinated to their mortgage. The property owner should
contact the CDO at the PVPC to get instructions on how to proceed.
When do I pay off the loan?
The DPL is a no interest and no payment loan for the lifetime of the loan, as long as you
occupy the property or property rents are within the terms of the rental stabilization
agreement and are occupied by low and moderate income households.
The requirement to repay the loan is triggered if the property is sold or transferred to
another party during the loan period or if there is a departure from the agreed upon rent
restrictions. A permanent lien on the property will require repayment of the amount to the
city/town whenever the property is transferred.
What should I do if I have an emergency before my loan is approved?
An emergency is defined as a threat to the health and safety of the house’s occupants as
determined in writing by your city/town’s officials. Examples of emergency conditions
include failed septic system, a failed heating system during the winter months, a failed
well, etc. If an emergency occurs you should call the PVPC. The PVPC will need a letter
or document from the local official confirming your emergency. If emergency conditions
are confirmed by the program, the emergency condition ONLY will be addressed. All other
program conditions and qualifications must still be met. Any other required non-emergency
rehabilitation work may occur once your name comes up on the wait list. At
that time, you will go through the normal qualification process.