New Homes & Rebuilds in Ocean, Monmouth & Atlantic County

Dream Homes Blog 8 – 17 – 13 – Rebuilding after Sandy – Is RREM Really RFAM? Ready..Fire..Aim..Missed! Grants – Good, Bad & Ugly II

                Dream Homes Blog 8 – 17 – 13 – Rebuilding after Sandy

                    Is RREM Really RFAM? Ready..Fire..Aim..Missed!

                           More on the Grants – Good, Bad & Ugly II

                   Bureaucratic Lunacy (Bad) & Reimbursement (Good)

 8-17-13

Greetings NJ –

Hope this post finds you doing well and enjoying your summer. There’s so much to talk about and I have been deficient in sharing it with you lately…The last few weeks have been extremely busy – and being informative and humorous actually takes effort, believe it or not. I should blog every other day, but I wait and then binge and write too much at one time. Such is life – I’m not perfect.

Much of this post discusses the RREM & HMGP grants, since they affect many people. If you are really lucky, you are working with ICC money and the HMGP grant and moving right along in your efforts. If you have applied and are working with RREM, well, keep on keepin’ on. Something will happen eventually. 

Important Sobering Note: In the DCA Bulletin of 7/30/13 concerning Reimbursement (see second to last paragraph below), the last line states: “Due to limited federal funding, it is unlikely even with an additional allocation that every RREM applicant who was placed on the wait list will receive an award….those who are waitlisted should be guided by that fact as they choose whether or not to begin to repair or reconstruct their Sandy – managed home.”

 

IE: If you haven’t applied for the RREM, you are probably not going to get it in the future. Wait and hope at your own risk.

 

Unfortunately grant discussions and commentary will probably be a miserable recurring theme for a while. Keep tuned for more developments in this area. I’m just getting warmed up.

Before I get started carping and complaining about RREM, I want to mention our next Free Rebuilding Seminar, which will be held at the Holiday Inn on Rt.72 in Manahawkin on September 17, 2013 at 6 pm. We’re also introducing a new guest speaker and excellent trade partner, Andrew Baumgartner from Baumgartner House Lifting, who will be joining us. If you haven’t been to one of our seminars yet (or even if you have), you should try and make this one. No one walks out without getting great information and having specific questions answered. The rest of our panel of professionals includes Scott Lepley, architect, Steve Brasslett from Ivy First Mortgage, Tracey Giery, realtor, and Kathy Dotoli & Sandra Gauge, attorneys. I will be moderating and it’ll be an open forum for discussion to get your specific questions answered. Remember to bring your surveys and flood elevation certificates. Seating is limited and refreshments will be served. Call 732 300 5619 to reserve your space.

Is RREM Really RFAM??         Ready…Fire…Aim… Missed!!

Good, Bad & Ugly – Part II

Bad: The RREM time frame is being grossly misrepresented.

Recently, I’ve come to the conclusion that the RREM Grant actually was misnamed. It should be called RFAM for Ready…Fire…Aim…Missed!! It’s another well intentioned federal/state program, which is so cumbersome in structure and implementation that the stated goals of the program will probably be off by over an order of magnitude (1000%).

What does that mean? Try this – the next time you are writing a $6,000 tax check to the state of NJ, write it for $600, and write in the memo field “Actual tax paid was adjusted based on existing unpleasant conditions to a degree to be determined by the tax payer”. Let me know how that works out for you.

If I told you I was raising your house for $55,000 and billed you $550,000, would you notice? Probably.

If RREM is supposed to spend $600,000,000 in 6 months and spends $120,000,000 in 12 months, isn’t that unconscionable? That is an error factor over one order of magnitude (1,000%!!!) in a prediction. I think anyone rational would and should think it was absurd to accept that and unacceptable for the NJ DCA to share that information. (This is why I get no party invitations. Very few people like discussing reality since it can be sobering.)

      In other words, on a macro level, “NJ, FEMA, HUD – Why are you telling us that the grant money will be disbursed 10 times faster than it actually is?”

      Why not just make reasonable time predictions (Answer: that would cause a public uproar) or change the structure of the grant?

       I sincerely hope I am wrong, but as of this time, there is no indication that I will be materially incorrect in my predictions.

A Really Good Thing – HMGP: The $30,000 HMGP Grant can be a better option in the event that you don’t have a need for the entire $150,000, or have started your renovation already (thus disqualifying you from eligibility for RREM grant), or if you only need to raise your house. This grant is designed to bridge the gap between the $30,000 you get from your insurance company for ICC (increased cost of compliance) money and the average cost of a lift. As much as I rail and bitch about government inefficiency, this grant was well designed and is helping many homeowners.   The only shortcoming is the restriction allowing only primary homeowners. To repeat, you can choose any licensed insured contractor and must be lifting their primary residence. The great news is that with $60,000 (as opposed to just the $30,000 from ICC) the majority of lifts are now within budget. We have been doing house lifts ranging from $45,000 – $90,000, depending on the size of the house, the height of the lift, whether parking is created and the type of foundation system.

A Continued, Huge Bad Thing about the RREM Grant: Not Being Able to Pick Our Own Contractors!!!!

That is Uber Stupid.  Why would any rational being restrict activity to government employees with no vested interest in the outcome?

       To further clarify and repeat an excellent suggestion, since I don’t think one should bitch unless offering a better solution, “Why not let each homeowners administer their own grant money?”

       That solution and implementation are relatively simple: Get rid of 75% of the people administering the process. Let every homeowner hire whoever they wish, (as long as they are licensed and insured in NJ) draw their own plans, lift or build their own houses and oversee the whole process. Life is fraught with risk – we’ll manage.

       There’s little chance of scam, scandal or taking the money and moving – when new work is in place and all contractors are paid, an inspection is called for and funds are disbursed in 2 party checks to the homeowner & contractor/builder.

        Simple. Quick. Rational. Elegant. Did I say simple?

        Unfortunately, the situation is what it is right now. No one from Gov. Christie’s office has recently asked my opinion, so we all soldier on every day and do the best we can.

Repeat: Governor Christie – we’re big boys and girls here in NJ – we can pick our own professionals, hire our own contractors and decide what we want to build. It’s in our best interest to expect and demand the best value we can from the market – isn’t that an inherently efficient system? Does the government really want builders building, or doing paralegal and administrative work?

Stop “helping” us by tying us up in red tape, NJ. If you want things to move, let individual homeowners dictate the speed of the process – not the process dictating the speed of the work.

       Good – Reimbursement was recently authorized under RREM:  This is an excellent (potential) change in the program! On July 30, 2013, the DCA sent out an info bulletin. True, it doesn’t make one definitive statement in 2 pages, but the feelings and intentions sound really nice! You may now be eligible for reimbursement for money you spent prior to applying for a grant. You will probably not be eligible for reimbursement of any funds you spend after you applied (which ironically is causing activity to cease in many areas…while people are waiting…and waiting…).  Still, it is a positive development.

 

       The Reality – Dealing with the FEMA process:

      Anyway, if you’re stuck in RREM hell, just hang in there. Like Winston Churchill said, “When you’re going through hell, keep going.”

      Ahhh…back to RREM (RFAM)…After your initial 8 or 9 hours of consultation with a FEMA representative, expect a kind, little old lady from FEMA to show up at your house and survey it. She will be of no use, having no construction expertise, but she will determine if you qualify for RREM, HMGP, or wherever else you fall and she will probably be really nice. She will report back to the FEMA Mothership and they will send someone else. The next person will be young, come from Miami, work for HUD (The Dept. of Housing & Urban Development is a federal agencyand administers the RREM grant.) He will also be relatively useless and incompetent and achieve little, but eventually, your info will filter back to someone who can make a decision. Several weeks later you will receive the next clue to move through the maze.

Downright Ugly: If you are on a slab, you will have to demolish to get the RREM:     Next unpleasant surprise – if you are on a slab and need to lift, HUD (remember – they administer the RREM Grant) will deem your house irreparable and authorize you to demolish and rebuild. That decision is made completely outside the scope of your preferences. Regardless of the fact that you are quite content with your home and can economically elevate it, your home is considered worthless and if you want to get the grant, you will have to demo and rebuild. To make matters even less palatable, you will have to choose among 9 authorized model homes, with no deviation. Good luck with that FEMA & NJ. In Kansas, people may be really well behaved. In NJ, people are (mostly) barely behaved well enough. I want to hear those conversations telling NJ residents that changes in architecture are not permitted and you have to build the state plans.

      The FEMA hotline is 855 726 3946 . Call to register for either grant or go on their website at www.renewjerseystronger.org.

       Hope this information helped you today. As always, if you have question, comments or just need some assistance, please don’t hesitate to call me directly at 732 300 5619.  

       On another note, we have been actively purchasing building lots and existing properties and have done so for many years. If you have property to sell, give me a call and I will evaluate it for you.

Stay well NJ. Keep up!

 Vincent

 Dream Homes, Ltd.

Atlantic Northeast Construction LLC

Rebuild, Renovate, Raise or Repair Your Home from Storm Sandy

Rebuilding NJ One Home at a Time…

Residential Construction & Development for over 20 years in NJ

314 Rt.9, Forked River, NJ 08731 Mailing: PO Box 627, Forked River, NJ 08731

609 693 8881 x 102 Fax: 609 693 3802 Cell: 732 300 5619

vince@dreamhomesltd.com  www.dreamhomesltd.com

http://blog.foxmoorhomes.com

New Home Builder License # 045894

HIC License # 13VH07489000

New Homes & Rebuilds in Ocean, Monmouth & Atlantic County

Dream Homes Blog 8-3-13 – Rebuilding after Sandy – RREM & HMGP Grants – The Good, the Bad and the Ugly – Pilings, Elevations, Parking

8-3-13

Greetings NJ –

Hope today’s blog finds you well and enjoying your summer at the shore.  It’s been a few weeks since my last blog and there have been many new developments and delays in construction activity, as well as excitement (often premature and unwarranted) and frustration caused by the new RREM & HMGP grants.

As always, here is more good information to help our rebuilding efforts. We’ll talk about parking under your house, diagonal bracing for pilings, and elevation levels.

 

RREM & HMGP Grants: The Good, the Bad and the Ugly:  The Good: The RREM Grant is $600 million at $150,000 per home which will go to help about 4000 people rebuild, with another 2 financing rounds of $600 million each following closely behind, but only after the Round 1 money is spent.

 

The Even Better Good: The $30,000 HMGP Grant can be a better option in the event that you don’t have a need for the entire $150,000, or have started your renovation already (thus disqualifying you from eligibility for RREM grant), or if you only need to raise your house. This grant is designed to bridge the gap between the $30,000 you get from your insurance company for ICC (increased cost of compliance) money and the average cost of a lift.

In fairness to NJ, this grant was well designed and will definitely help many homeowners.     

      The homeowner can choose any licensed insured contractor and must be lifting their primary residence. The great news is that with $60,000 (as opposed to just the $30,000 from ICC) the majority of lifts are now within budget. We have been doing house lifts ranging from $45,000 – $90,000, depending on the size of the house, the height of the lift, whether parking is created and the type of foundation system.

      The FEMA hotline is 855 726 3946 . Call to register for either grant or go on their website at www.renewjerseystronger.org.

 The Bad about RREM: That’s a huge restriction – not releasing Rounds 2 & 3 until Round 1 is fully expended. The funding structure currently in place is inherently flawed and not cognizant of current conditions in NJ, and will only serve to delay the 2nd & 3rd funding rounds. These are completely unnecessary delays. We need the money now. 4000 people is a good start but 30,000 were affected.

The goal is to disburse all the funds by the end of this year, which sounds absurd to just about anyone who has ever even seen a hammer. This author predicts that that estimate is off by at least 6-9 months – unless the grant structure is changed immediately.

It’s an old story – if you want movement and progress, get government out of the way and let the market serve its own needs. There is no historical example that can be cited of any governmental entity performing a function better than private citizens were able to.

Governor Christie – we’re big boys and girls here in NJ – we can pick our own professionals, hire our own contractors and decide what we want to build. It’s in our best interest to expect and demand the best value we can from the market – isn’t that an efficient system? Why are 6 additional layers of unnecessary complexity being used to achieve a simple outcome? Does the government want builders building, or doing paralegal and administrative work?

More Bad: So, in a well intentioned effort to avoid Katrina like situations (where homeowners received grant money and vamoosed out of the state), NJ has made the funding guidelines for the RREM grant very onerous. Instead of empowering the homeowner to decide on both the contractor as well as the scope of their rebuild, each home has to be separately inspected by an RREM inspector and evaluated. A specific scope of work is then prepared and it is sent out to no less than 3 contractors, who must be chosen from a rather small pool of approved contractors. This doesn’t sound that bad, but there are currently 19 contractors (though more should be added), to administer 4000 rebuilding projects.

Is that ridiculous or what? Go ahead and try to get a demolition permit for a home, starting tomorrow. Unless you walk on water in your off hours, it will be almost a month before you even submit the permit. How are we doing 4000 separate individual projects in the next 5 months? Maybe I’m missing something.

The simple solution is the same one used by every commercial lender since the Phoenicians – a house or renovation is built in accordance with plans, the homeowner inspects it, all contractors are paid, a request for an inspection is made from the lender or government agency (or architect or engineer, which is then submitted to the lender), and a funding draw is received for work that has been completed. If you don’t use the grant money to rebuild within a certain time, you don’t get it. Simple. Most people aren’t going anywhere anyway – they want to be here.

Stop “helping” us by tying us up in red tape, NJ. If you want things to move, let individual homeowners dictate the speed of the process – not the process dictating the speed of the work.

The Ugly: So there is waiting and delay…and more waiting…and then after you’ve been approved and correctly submitted all paperwork…there’s more waiting for an inspector….waiting for a scope of work….waiting for estimates…waiting for contracts to be prepared…and being warned seriously along the way to stop all progress prior to the process being concluded. Bizarre. The RREM Grant has actually caused a short term cessation of 30% of the activity at the shore which had been scheduled for the next 30 – 90 days. How does that make any sense?

Keep tuned for more developments on this item NJ. I’m just getting started.

New FEMA zones and the Working Flood Maps:  Up and down NJ throughout the affected areas, we’ve been working with the new FEMA working maps for the last 6 weeks, and it has come to feel like the norm. There is an unstated understanding that this is how the flood zones will remain, and an unexpressed worry that the FEMA maps will change again. Both thoughts are valid –  most places will probably stay the same and there are certain places that may change and become slightly more restrictive in the future as the rest of the data and homeowner data are evaluated.

Let me stress: it is in your best interests to have the option of using the current base flood elevations (as opposed to the generally more restrictive older ones) when deciding how high you want to go (since you can choose to raise to a lower elevation).  

Pilings & diagonal bracing: Occasionally you will see diagonal bracing between pilings, in what may appear to be a haphazard random pattern. For clarification, diagonal bracing does not have anything to do with the structural integrity of a piling foundation – it is primarily addressing movement in the house and comfort of the occupants. As one way to save costs, this bracing (which is expensive and unsightly), can be eliminated especially if the house is one story and not over 1500 – 2000 square feet. It is unnecessary – we don’t often experience hurricane force winds and the sway of the house is very minimal. Diagonal bracing is also generally unnecessary if the piles extend less than 5’ above grade.

 

Elevations: How High to Go?: I do not recommend construction at less than BFE + 4 to finished floor in A or AE zones, regardless of the minimum elevation requirements in your flood zone. If you are unsure, consult with a professional when moving or siting your house on your lot, elevating or otherwise bringing your home into compliance with FEMA codes. A meeting with an architect, builder, or engineer is invaluable for discussing your options.

Remember that in a Coastal A (AE) zone, building to V zone standards is not only often a good idea but recommended as best practice by FEMA. Barring stair considerations,usually a little extra height is better.

In an A or an AE zone, elevation is measured to the finished floor, not the lowest structural girder. This means you can generally raise the house 2’ – 4’ less than you would be able to in a V zone.

 

New Parking & Storage Underneath Your House: In order to create parking or a garage, you will generally need to raise your house a minimum of 8’, as opposed to the 4’ – 5’ minimum generally needed to comply with FEMA in your zone. A lower move to a minimum increased elevation is a much easier process generally, and the changes in access will affect your life much less. However, the advantages you are creating are limited to proactive asset protection/preservation, which does not necessarily add value to your home, but simply maintains it.

Lifting your house high enough to create usable storage and perhaps parking adds a definable utility and usability to your real estate, which translates into immediate and future value. So you have more stairs to climb – that’s good for your health. Ramps, chair lifts and elevators are also viable options to address the access issue.

Hope this information helped you today. As always, if you have question, comments or just need some assistance, please don’t hesitate to call me directly at 732 300 5619.

On another note, we have been actively purchasing building lots and existing properties and have done so for many years. If you have property to sell, give me a call and I will evaluate it for you.

Stay well NJ. Keep up!

Vincent

Dream Homes, Ltd.

Atlantic Northeast Construction LLC

Rebuild, Renovate, Raise or Repair Your Home from Storm Sandy

Rebuilding NJ One Home at a Time…

Residential Construction & Development for over 20 years in NJ

314 Rt.9, Forked River, NJ 08731 Mailing: PO Box 627, Forked River, NJ 08731

609 693 8881 x 102 Fax: 609 693 3802 Cell: 732 300 5619

vince@dreamhomesltd.com  www.dreamhomesltd.com

http://blog.foxmoorhomes.com

New Home Builder License # 045894

HIC License # 13VH07489000