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CHAPTER 4. REHABILITATION

4-1. GENERAL. All instructions of this Handbook apply to rehabilitation

projects unless modified by this Chapter.

4-2. DEFINITIONS.

A. Substantial Rehabilitation. Required repairs, replacements,

and improvements:

1\. Involve the replacement of two or more major building

components or,

2\. Cost of which exceeds either:

a\. 15 percent (exclusive of any soft costs) of the

property\'s replacement cost (fair market value)

after completion of all required repairs,

replacements, and improvements.

or

b\. \$6,500 per dwelling unit (adjusted by the Field

Office\'s authorized high cost percentage)

Note: Estates for determining the cost for

substantial must include general requirements

and fees for builder\'s general overhead and

profit, design architect and supervisory

architect. However, these estimated costs are

not applied when determining the eligibility

of Section 223(f) projects. (See Chapter 5 for

instructions).

B. Major Building Component. Roof structures; wall or floor

structures; foundations; and plumbing, central heating and air

conditioning, or electrical systems.

1\. Major refers to the importance of the component and the

extent of replacement.

a\. The element must be significant to the building

and its use, normally expected to last the

useful life of the building, and not minor or

cosmetic.

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(4-2) Examples: Major - roof sheathing, rafters,

trusses.

Minor - shingles, built-up roofing.

b\. Total replacement is not required, but the

greater part (at least 50 percent) must be

replaced.

2\. The term provides a great deal of latitude and,

therefore, good judgement is necessary and expected.

3\. Architectural staff will make the determination.

4-3. ARCHITECTURAL PROCESSING. Rehabilitation processing consists of
three

stages: Feasibility, Conditional Commitment, and Firm Commitment.

The Field Office may allow the sponsor to combine one or more stages.

A. Feasibility. Upon notification of the receipt of an

application, the Production Branch Chief will assign a staff

member as Design Representative for the project.

1\. Feasibility exhibits for architectural processing are:

a\. Application.

b\. Project location map.

c\. Survey or site plan.

d\. Drawings or sketches of the existing

building(s).

e\. Description of the proposed rehabilitation

(work write- up), including any post-

rehabilitation sketches.

f\. LBP test report for projects constructed

prior to 1978. (See paragraph 1-40).

2\. Make a joint inspection of the project and modify the

sponsor\'s work write-up as needed.

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(4-3) B. Conditional Commitment. The Design Representative provides

liaison with the sponsor\'s architect during preparation of

rehabilitation architectural exhibits if professional design

service is required.

(See paragraph 4-5.).

1\. Review architectural exhibits to assure compliance

with the work write-up.

2\. Provide architectural conditions for the conditional

commitment.

3\. Review the Owner-Architect Agreement.

4\. If an abnormal amount of time has elapsed since the

joint inspection, or if property damage may have

occurred, reinspect the property to determine current

physical condition and provide any necessary

additional conditions for the conditional commitment.

C. Firm Commitment. The Design Representative provides liaison

with the sponsor\'s architect during exhibit development if

professional design service is required.

1\. Assure compliance with the work write-up and any

conditions of the conditional commitment.

2\. If any condition in C-1 above exists, reinspect and

require work as may be necessary to be included in the

exhibits.

3\. Review Owner-Architect Agreement if not previously

submitted.

4\. Review the final rehabilitation contract documents

prior to issuance of the firm commitment.

4-4. STANDARDS. Rehabilitation must comply with applicable local codes
and

ordinances. All new construction or additions that enlarge existing

buildings are not rehabilitation and must meet applicable codes and

MPS for new construction.

A. Rehabilitation projects are subject to environmental

requirements in [24 CFR Part
50](http://www.gpoaccess.gov/cfr/index.html) and 55 and the statutes,

Executive Orders, and HUD standards and criteria (24 CFR Part

[51](http://www.gpoaccess.gov/cfr/index.html)) cited in 24 CFR Part
50.4.

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(4-4) Compliance shall be documented on Form HUD-4128.1, Format for

Categorically Excluded Projects.

B. Projects that include historic structures or effect historic

structures or districts are subject to the requirements of 24

CFR Part 50.4 and compliance with Section 106 of the National

Historic Preservation Act and the Secretary of the Interior,

Standards for Rehabilitating Historic Buildings.

C. Projects that involve/include, additions (new construction),

demolition of buildings containing primary uses served by the

project, conversion of non-residential use (hotels, offices,

stores, lofts, etc.,) to residential, or unit density is

increased more than 20 percent require a full HUD-4128,

Environmental Assessment, (24 CFR Part 50.20).

4-5. REQUIRED PROFESSIONAL SERVICES. The services of an architect,

engineer or designer, licensed or registered to practice architecture

in the State in which the project is located, will be required for

design and construction of a rehabilitation project when:

A. Working drawings and specifications are necessary to properly

define the scope and concept of the rehabilitation,

B. Change of building use is proposed, existing spaces are to be

altered, or structural changes are necessary, or

C. An addition is proposed to the existing building.

4-6. JOINT INSPECTION. As soon as possible after receiving the
feasibility

application, schedule an on-site inspection with the sponsor.

A. Team Members.

1\. Must include architectural, cost and valuation staff

and the sponsor\'s architect or representative. A

representative of the local building department should

be present. If not, the team must have a copy of the

latest official inspection for compliance with local

codes and ordinances.

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(4-6) 2. May include other HUD specialists and any consultants

the sponsor may wish.

B. Purpose.

1\. Determine the project\'s condition, particularly

concerning major defects, deterioration, and

obsolescence.

2\. Determine type and extent of work that would:

a\. Appropriately rehabilitate the project for the

intended occupants.

b\. Result in reasonable operating costs.

c\. Ensure continued marketability after

rehabilitation.

3\. Determine project eligibility.

a\. Assure project is substantial rehabilitation

under the definition. (See paragraph 4-2.)

b\. Additions are eligible provided:

1\) Work proposed for existing portion of

the property constitutes substantial

rehabilitation.

2\) Addition or extension will not be more

than 50 percent of the total area of

the building.

C. Scope. Since the joint inspection is the basis for the work

write-up, cost estimate, commitment conditions and required

exhibits, the inspection must be thorough and include:

1\. All features of the project site; buildings and

improvement utilities, roads and parking, underground

storage tanks and surroundings.

2\. Sufficient living units to ascertain all necessary

rehabilitation. This may range from selected typical

units to all units depending on physical conditions

encountered.

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4-7. ENGINEERING REPORTS. Surveys or special technical reports may be

required of the sponsor for proper evaluation of the project.

A. Notify the sponsor by letter immediately after the joint

inspection of any requirement for such report.

B. Clearly state the exact nature of the engineering or technical

investigation and the items to be covered.

C. Specify any special tests, such as pressure or flow tests of

plumbing or cutting of piping for examination.

D. Specify seismic resistance for substantial rehabilitation

projects and existing projects pursuant to Section 223(f).

Structures in seismic zones 2, 3 and 4 must be capable of

resisting three fourths (3/4) of the seismic forces contained

in the American Society of Civil Engineers (ASCE) Minimum

Design Loads for Buildings and Other Structures. ASCE 7-88.

(Formerly ANSI ASS. 1-1982)

1\. A seismic hazard analysis of the building(s) should be

conducted by a registered engineer familiar with

lateral force design, where applicable code

requirements at the time of construction did not

equal or exceed the referenced seismic standards.

2\. The analysis should include an examination of the

structure for continuity, ductility, and resistance

to lateral forces.

3\. Structural elements and connections between elements

should be strengthened and retrofitted as required, if

the existing structure does not provide three fourths

(3/4) of the seismic force level resistance required.

The objective is to prevent major failures, collapse

or loss of life due to earthquake forces.

E. Work write-up cannot be completed until all required

engineering reports are analyzed by the Design Representative

and a determination made in regard to the need for additional

rehabilitation requirements.

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4-8. WORK WRITE-UP. The sponsor or its architect prepares the work
write-

up reflecting the work agreed to at the joint inspection, or the
sponsor\'s

architect may prepare drawings and/or specifications that describe
clearly the

work agreed to in lieu of a work write-up.

A. The work write-up must describe in narrative form the required

rehabilitation. Divide as follows:

1\. General Requirements. Include work items applicable

to all elements in the project, for example: site work;

exterior work; painting and decorating; rehabilitation

of kitchens, bathrooms, roofs, mechanical systems,

electrical systems, interior walls, floors, windows

and doors, etc.

2\. Special Requirements. Describe work for a specific

item, room, space, unit, or building. For example:

general requirement would state, \"Sand and refinish

all wood floors,\" but a special requirement would be,

\"Sand and refinish the living room floor in apartment

201.\"

B. All requirements must be specific and state the location, type

and amount of work to be done. Do not use general phrases

such as, \"repair or replace\" or \"as required.\"

C. In cases of \"gut\" rehabilitation, where only the structure

will remain and the drawings and specifications will be as

detailed as for new construction, the work write-up need only

be detailed enough to be a basis for the cost estimate and

serve as a memorandum of understanding between the Field

Office and sponsor.

D. Historic requirements including State Historic Preservation

Office (SHPO) review, etc.

4-9. CONTRACT DOCUMENTS. Because the nature and extent of rehabilitation

may vary widely among individual projects, the requirements for

specific contract documents cannot be determined until the joint

inspection and work write-up are complete.

A. Drawings. When required, drawings must clearly define the

concept and detail of the rehabilitation, any demolition or

removal, and repairs and replacements.

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(4-9) 1. Require complete drawings and details similar to those

for new construction if the structure will be gutted,

or there will be structural modification or addition

to the existing structure.

2\. For projects with minor changes in space arrangement,

structural or mechanical systems require only drawings

sufficient to show existing conditions and proposed

work.

3\. Do not require drawings if the rehabilitation can be

clearly and completely described in specification

format.

B. Specifications. Work write-up/specifications are always

required and must clearly define the scope of the

rehabilitation, establish the quality of materials and

workmanship, and the conditions of construction.

4-10. INSPECTION. Follow instructions in Chapter 3.

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