November 1999 ----- -------------Volume 9, Issue 5


 Table of Contents

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New Federal and City Lead Regulations Take Effect

New guidelines for the way landlords, contractors and tenants deal with lead hazards have taken effect at both the federal and city levels. The following is a summary of these new guidelines:

EPA Lead Paint Notification
New renovation guidelines by the EPA took effect on June 1st, 1999, and apply to all owners and managers of buildings built before 1978. Under these guidelines, residents must be notified when apartments or common areas are being renovated. If the owner or his/her representative does the work, then the owner is responsible for notifying the tenants. If a contractor is hired, then the contractor must provide notification. The EPA defines renovation as “any work which disturbs more than two square feet of any painted surface.”

Tenants must be informed of the nature, location and timing of the repair work, and they must be given a copy of the pamphlet, “Protect Your Family from Lead in Your Home.” This pamphlet may be sent by certified mail or be hand-delivered, in which case a signed receipt should be obtained. If a receipt cannot be obtained, the renovator or owner can certify the attempt. Notification should be no less than 7 days and no more 60 days prior to the commencement of work. The only exception to the notification regulation is if the work is considered an emergency.

City Local Law 38
Taking effect November 12, 1999, this law primarily affects buildings in New York City with 3 or more units built before 1960. The first part of the law requires landlords to inquire about the presence of children under 6 living in the apartments through annual notices (distributed between January 1 and January 16 each year). The notices can be mailed, hand-delivered, or distributed with either the rent bill or the window guard notice. Forms must be returned by March 1st.

If a tenant with a child under six moves in during the year, the new tenant must notify the owner of the child’s presence. The landlord is also required to give a notice asking if children under six live in the apartment. These new occupants are to be given a lead paint pamphlet to be designed by the Department of Health.

The second part of the law requires annual visual inspections for lead based paint in those apartments with children under six. The law does not give a definition of a visual inspection.

The law applies to pre-1960 buildings with 3 or more apartments because they are presumed to contain lead based paint. This presumption can be voided if the landlord produces testing or sampling evidence that the paint does not meet the law’s definition of lead, along with affidavits from the tester and the owner. Lead paint is considered a hazard if it is peeling or is on a deteriorated subsurface.

If a tenant with a child under six years of age in one of these buildings complains to HPD about peeling paint in their apartment, HPD will inspect within 10 days during the non-heat season (June through September) and within 15 days during the heat season. If a hazard is found, HPD issues a Class C violation notice and delivers it to the landlord within 20 days of the inspection. The violation must be corrected within 21 days of the notice being hand delivered, or 24 days of mail delivery. If the violation is not corrected by the deadline, the law allows an additional 15 days for the correction, but requires the use of DOH’s alternative correction method at that point. The owner can get an additional 45 days to correct the violation if he/she can show proof of technical difficulties or the inability to obtain necessary funds, materials or access that prevented the correction.

A certification of correction of the violation must be sent to HPD, and HPD will then send a copy of the certification to the tenant within the next 12 days. HPD is also required to reinspect within 30 days after receiving the certification. Failure to comply with the notice and inspection requirements will result in fines of $50-150 for each violation plus $125 per day until corrected.

For any additional information on either the federal or city lead regulations, please contact UNHP at (718) 933-3101, email us at mail@unhp.org

Look for HUD’s NEW LEAD REGULATIONS (which go into effect September 15, 2000) in the next edition of Notes.

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CRA Compromised by Historic Legislation

After numerous failed attempts in years past and a long battle through banking and conference committees--not to mention veto threats by the President--our nation’s government passed “Financial Modernization” legislation that frees up banks, securities and financial holdings companies to cross over into each others’ business. This repealing of depression-era banking laws comes at a price, however, and the Community Reinvestment Act (CRA) is paying most of it.

CRA was established in 1977 to encourage investment and financial services in underserved and economically depressed areas throughout our country. CRA has leveraged over $1 trillion from banks in the last 22 years, and is credited with revitalizing many urban and rural neighborhoods. A number of GOP lawmakers, led by Senate Banking Committee Chairman Phil Gramm (R-TX), tried to steamroll CRA in the financial modernization legislation. CRA advocates and veto threats by President Clinton slowed Gramm’s attack, but CRA did suffer a few blows in the final bill:

  • Small banks (urban and rural) with assets under $250 million will only be subject to CRA exams once every four or five years, as opposed to every two years as it is now.
  • The Sunshine Provision, which requires banks and community groups involved in CRA agreements (both grants and loans) to report these agreements to Federal agencies, is retained in the final bill. However, these Federal agencies will be unable to monitor those same CRA agreements to ensure their actualization.
  • The requirement that financial holdings companies must maintain at least a Satisfactory CRA rating in order to continue providing insurance and securities products is weakened in the final version of the bill. If a financial holdings company failed their CRA exam, they would no longer be subject to the penalties mentioned in the House’s original version of the bill (H.R. 10), which included the possibility of divesting or ceasing the activities of the insurance and security company subsidiaries). Rather, the company would only have to submit a plan to regulatory agencies for improving their failing CRA rating, while continuing to engage in new activities .
  • Large bank mergers would no longer require public hearings for community groups to express their (dis)satisfaction with the banks involved.
  • Non-depository affiliates of financial holding companies would not be subject to CRA. This failure to “modernize” CRA means that banks could transfer some lending and other traditional banking activities to these affiliates in order to escape CRA requirements.

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 Credit and Immigration New Areas of Fannie Mae's Focus

While UNHP continues its partnership with Fannie Mae promoting home ownership in the Bronx, “the nation’s largest creator of home mortgage products” has brought two new mortgage products to New York City. The New Immigrants Initiative, which tailors mortgages to fit the needs of immigrants’ credit, income and cash on hand situations, has already been tested in a number of other cities across the U.S. (including Miami and Chicago) and is now being introduced in here in the metropolitan area. The Timely Payment Rewards mortgage product is an entirely new pilot program which aims to assist potential home buyers with less than “Grade A” credit achieve their goal of homeownership without having to deal with traditional sub-prime lenders and risk an encounter with a predatory lender.

New Immigrants Initiative
This new mortgage product is designed to make homeownership more accessible to immigrant families by making flexible certain criteria related to “lower down payments for working employment-authorized, pending permanent residents (including refugees, asylees, visa lottery winners, and family sponsored immigrants).” While this program has been made available in other U.S. cities, the New York New Immigrants Initiative differs by taking into account the unique characteristics of the New York housing market. Some of the key features to the program include:

  • Fannie Mae will not require the applicant to have a permanent resident card (“green card”), but they must have applied for one. Other restrictions apply, however.
  • 3% Down payments on one-family homes, condominiums and PUDs
  • 5% Down payments on two-family homes and co-ops
  • Boarder income from relatives living in the same household is permitted
  • Greater flexibility for borrowers with cash-on-hand

Timely Payment Rewards
Many potential homebuyers have certain credit problems which limit their chances of obtaining a mortgage through a traditional lender (a bank), and these mortgage seekers have at times turned to the sub-prime market where they are subject to skyrocketing interest rates and astronomical fees. Fannie Mae combats these predatory practices by offering an alternative in their Timely Payment Rewards product. Through this program, borrowers with problems on their credit report may still qualify for a mortgage at a slightly higher (an additional 1.75 to 2%) rate than a borrower with “A” credit would receive.

If the borrower makes 24 consecutive monthly payments on time, the interest rate would automatically drop 1% without any refinancing or fees. A nontraditional sub-prime lender may charge upwards of 4% above the going “A” rate, in addition to extraordinarily high fees.

Other restrictions apply to the mortgage and there are still certain credit requirements. For more information and a list of participating lenders, call 1-800-7-FANNIE.

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Homeownership Accomplishments Update

Since April University Neighborhood has worked in conjunction with Fannie Mae, Neighborhood Housing Services of the South Bronx (NHS), and Bank of New York (BNY) to reach out to 116 families through eight home buyer workshops. These families include 76 English speaking and 40 Spanish speaking. Our accomplishments thus far include:

  • 40 families have been pre-qualified for mortgages
  • 13 families have attended the NHS Fastrack counseling program in a group or individual setting
  • 4 families are currently enrolled in the NHS Homebuyers Club for extra help with credit issues
  • 4 families have already completed the Homebuyers Club
  • 5 additional families have received pre-approval for a mortgage with BNY
  • 3 of these families are currently looking for a home
  • 2 of these families is in contract and near closing
  • 2 additional families are already homeowners

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Rent Regulation Battle to Begin at City Level
Rent Regulations will expire March 31, 2000 unless the City Council and the Mayor vote to renew them. Tenants’ rights took a beating two years ago when state rent laws were barely “saved” in Albany. Now the battle moves to the City level where a tenant campaign will be challenged by a strong landlord lobby. Among the millions protected by these regulations are those living in rent controlled or rent stabilized apartments and hotels, rooming houses, and SROs. The regulations include protection from rent overcharges, harassment and arbitrary evictions.

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Providers United Update

It has been just over a year since family daycare providers in the Fordham Bedford neighborhood organized and formed the network, Providers United. The initial objectives defined by the providers at the group’s inception--to improve their child care skills, increase the financial viability of their business and work towards a formal network--have all been met.

After obtaining the funding to formalize itself, the network was able to hire a coordinator, Anania Almonte. Each of the homes where children would be cared for was inspected and upgraded with safety and educational equipment. In addition, the majority of providers have increased the number of children in their care. An ESL program began this month for the providers, and classes are tailored to cover topics concerning their work with children and their experiences as business women.

The providers continue to meet monthly as a group to discuss new issues facing them as family daycare providers. The October meeting focused on a new obstacle many of them are facing with BEGIN, the program which governs child care for welfare recipients. Under workfare, parents report to a BEGIN center where they get a work assignment and a voucher to pay for childcare. As a result of a meeting with BEGIN last year, the providers were placed on BEGIN’s childcare list. Since then, many of these providers have cared for children of the BEGIN program’s participants. However, the majority of the providers have reported that BEGIN has been late with payments--up to three months in some cases.

Many times, Human Resource Administration (HRA) does not inform the provider when families are sanctioned from certain welfare benefits, including childcare vouchers. As a result, the provider continues caring for the child without receiving payment for her work. These nonpayments and late payments amount to thousands of dollars in losses to providers who often have no other source of income.

Martha Smith, a member of Providers United, said, “I think it’s ironic that we’re providing childcare for children of parents on welfare who are mandated to workfare by BEGIN and need providers to care for their children. Soon we’ll be on public assistance because we are working and not getting paid by the very same program.”

Providers United met with Kevin McGuire, the Bronx BEGIN Regional Director on November 17 to discuss this issue. The providers presented their individual cases to Mr. McGuire and proposed practical solutions for the payment problems. Mr. McGuire agreed to consider their recommendations and work to resolve each provider’s payment issue. A follow-up meeting has been scheduled for December.

A solution for the nonpayment problem may come from the $65.6 million in new money available from the City to spend on childcare before the end of this fiscal year. The New York Times reported that these additional dollars remain in city coffers while the Administration for Children’s Services and the Human Resources Administration work out details on how to spend it. At the same time, the Agency for Child Development (ACD) has a list of 40,000 children waiting to receive daycare while HRA estimates that the total number will reach 65,000 this year. In addition, the City plans to require homeless families to work, adding at least another 5,000 children to the list.

The City now has to decide where to devote these new resources. Licensed providers like those in Providers United who have attended trainings, had their homes inspected for safety and health requirements, bought equipment, books, educational games and toys know what the City should do -- cut the red tape and start spending some of that $65.6 million by filling the open slots in existing providers’ homes.

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60,000 New Section 8 Certificates for Y2K
Both the House and the Senate left out new Section 8 Certificates in their original drafts of HUD’s FY2000 budget, but the Conference Committee managed to add 60,000 new certificates for the coming year. This improvement comes despite Congress’s self-imposed budget caps of 1996. Many other programs’ funding increased, including Community Development Block Grants (CDBG) and Homeless Assistance. The one major downside is that $4.2 billion of this year’s allocation came out of next year’s budget! This means housing advocates are already campaigning for HUD money in FY2001 to avoid a real pitfall.

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