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Construction

After signing a grant award with the RREM Program, homeowners meet with their RREM Project Manager to review requirements for the remaining construction of their home and receive an overview of the payment process to receive their remaining grant award funding.   The RREM Project Manager is a valuable resource for homeowners to utilize throughout the pre-construction and construction phases of repairing or rebuilding their homes. The RREM Project Manager is available to provide technical assistance in meeting required local, state, and federal construction standards, review requests for payment, and conduct the final inspection upon completion of construction.

This meeting with the RREM Project Manager (referred to as Step 5 on the RREM Program Step-by-Step guide) provides homeowners the resources they need to manage the construction process and finish their construction according to federal rules. In order to give homeowners more control over the construction process for their home, the RREM Program allows homeowners to select and manage their own contractor to complete remaining work. As managers of the construction process, homeowners are encouraged to review the materials on this webpage concerning the applicable federal, state, and the RREM Program construction standards.

The RREM Program has also developed several helpful tip sheets regarding specific construction-related topics. Please go to the RREM Homeowner Documents Library to read through our RREM Tip Sheets.

ESTIMATED COST TO REPAIR/SCOPE OF WORK

At the time of Initial Site Inspection, the RREM Project Manager develops a document called the Estimated Cost of Repair (ECR) to assess damages to the homeowner’s property and determine the scope of construction work and cost of making the needed repairs. The ECR is a critical document within the RREM Program because:

  • The ECR is the basis of the grant award for homeowners rehabilitating and/or elevating their existing home;
  • The ECR lists the specific scope of work needed to meet the RREM Program’s construction requirements; and
  • The ECR will inform homeowners on what construction costs are eligible for payment by the RREM grant award.

The ECR reflects the minimum requirements needed to repair a property to a safe and livable standard. It is extremely important for homeowners to complete all scope items listed on the ECR, or risk potential negative impacts to their grant award amount and/or obstacles passing the RREM Program’s final inspection.

Please note that the ECR is an estimated cost and that actual costs can vary. Any requested updates, adjustments or other changes to the ECR are limited by the following policies:

  • Homeowners who encounter unforeseen costs that must be completed should contact their RREM Project Manager with supporting documentation so that the ECR can be updated to account for these items.
  • Homeowners who want to install enhancements that are above the minimum standard listed on their ECR may do so; however, the program cannot provide additional funding for this.
  • There are certain items that are not eligible for payment under the RREM Program. These items are considered not reasonable or necessary under federal requirements. To view a list of common ineligible construction costs, please click the following link: Ineligible Costs Handout

Homeowners who choose to reconstruct (demolish their old house and build a new one) do not follow a specific ECR/scope of work provided by the program. However, they are required to follow federal guidelines and the terms of their environmental clearance, such as staying within three hundred (300) square feet of their existing footprint and building the structure to Energy Star standards.

CONTRACTOR VALIDATION

It is important for a homeowner to understand his or her role and responsibilities regarding contractor selection and the validation process. A requirement of the RREM Program is to ensure contractors have the appropriate state licenses and are in good standing with the State of New Jersey and the federal government, i.e. not debarred. Program procedures regarding contractor selection and the contractor validation processes depend on the homeowner’s determined construction project pathway.  Homeowners who have signed a grant award agreement after July 1, 2014 will be required to utilize a contractor of their choice (Homeowner-Selected Contractor – PathwayB). Prior to July 1, 2014, homeowners had the option to select their own contractor (see Homeowner-Selected Contractor), or choose a Program Assigned Contractor (Program Assigned Contractor).

Program Assigned Contractor (Pathway C)

Under Pathway C, there is a pool of pre-qualified general contractors that have been pre-validated through a formal RREM Program process. (Since homeowners, included in this pathway, do not need to select a contractor for their construction project, they are, therefore, not required to obtain contractor validation.) All rehabilitation or reconstruction work will need to be completed by an approved RREM Program contractor. The RREM Project Manager assigns a contractor for a homeowner’s construction project.  During the assignment process, the RREM Project Manager will assess the scope of work involved and the contractor’s financial and technical capacity to perform construction project.  The RREM Project Manager will work together with the contractor and homeowner on construction management tasks, supporting forward movement of project and compliance with federal, state and RREM Program guidelines.  To view the program assigned contractor pool, please visit: Pathway C Qualified Builders.

Homeowner-Selected Contractor (Pathway B):

The RREM Program does not provide a list of pre-qualified general contractors for Pathway B. Homeowners who participate in Pathway B are responsible for locating and hiring their own contractor for their project. Homeowners are allowed to choose any contractor that is licensed for the type of construction they are performing, and who are not currently listed on state or federal government debarment lists. It is highly encouraged that a homeowner be prudent and conduct adequate research, interviewing several contractors, before making a final decision. This process may take some time; however, it is well worth the effort towards increasing positive project outcomes.

Once a homeowner has chosen a contractor, they need to notify their RREM Project Manager of their contractor selection. The RREM Project Manager will verify that the contractor has the proper licenses and registration and is not debarred. It is highly recommended that the homeowner complete this validation process prior to starting construction. Should the homeowner proceed with construction work prior to contractor validation, the homeowner is putting themselves at risk of forfeiting payment due to working with a contractor who may not be RREM Program eligible.

This process will include the homeowner completing a Contractor Validation & Construction Advance Payment Form. The first section of this form is used to verify the contractor’s licenses and the second section is used by the homeowner to request a construction advance payment.  Upon the successful validation of a selected contractor, a homeowner may request a construction advance of fifty percent (50%) of their remaining grant award. The homeowner is also required to provide a copy of a legally executed contract between the homeowner and contractor and an executed RREM Program Contractor Addendum by contractor, ensuring awareness of program construction requirements, prior to requesting a construction advance payment.

Special Situations/Exceptions:

There are certain circumstances that fall outside the RREM Program standard processes that homeowners should be aware of regarding contractor validation requirements:

Pathway Switches. Homeowners, who have obtained an approval from the RREM Program regarding a change from Pathway C to Pathway B, are permitted to continue working with their program-selected contractor (Pathway C). If a homeowner continues on with their Pathway C contractor, they are not required to obtain contractor validation. If a homeowner chooses to select their own contractor after the pathway switch, then the homeowner must follow the normal Pathway B contractor validation process of their chosen contractor.

Homeowner Acting as Own General Contractor under Pathway B only. Homeowners are allowed to act as their own general contractor for their construction project. Homeowners will be required, however, to validate at least one (1) subcontractor and provide a copy of the signed construction contract with the subcontractor; contractor addendum is not required.  Please note, the RREM Program will pay for all program eligible costs, except labor costs for work performed by a homeowner.

Additional Resources:

For tips on selecting a contractor, please view the RREM Program Tip Sheets Managing Your Project, Insurance and Bonding and Selecting and Working with a Contractor.

Homeowners are encouraged to read the New Jersey Division of Consumer Affairs Brief entitled: “Hiring Home Improvement Contractors” which has helpful tips to follow when hiring Home Improvement Contractors.  The brief can be viewed by clicking here.

Homeowners who are demolishing their existing homes and rebuilding new homes are encouraged to visit the New Jersey Department of Community Affairs New Home Buyer’s webpage. Here you will find information on the State of New Jersey’s New Home Warranty Program, as well as useful links to construction industry standards and other issues important to new home buyers in New Jersey.

For a list of debarred contractors in the State of New Jersey, please visit: State of New Jersey Department of Labor and Workforce Development at website.

 

MINIMUM HOUSING REHABILITATION STANDARDS

For any home that is being rehabilitated using funds from the RREM Program, there are a minimum set of standards for single family homes that must be met to close your project out of the Program. These standards apply to all nine affected counties, but do not act exclusive to local, township, county or state building or housing codes, standards or ordinances that may also apply. To learn what local codes and standards may apply, please contact your local construction office. Furthermore, this standard does not address applicant funded upgrades, which would be considered above and beyond this standard.

The goal of the Minimum Housing Rehabilitation Standards is to maintain consistency among contractors, define the extent of work that the program requires when a home is rehabilitated and ensure that the work completed meets governing codes and quality standards. For more information, please download the Minimum Housing Rehabilitation Standards.

CONTRACTOR ADDENDUM

The Contractor Addendum is a required form used to protect homeowners by ensuring that they use a contractor who has agreed to complete their remaining construction compliant to the rules of the RREM Program. The Addendum captures all the requirements the contractor must follow to ensure remaining construction meets RREM standards. Homeowners must have their selected general contractor sign this Addendum. For homeowners who are not using a general contractor, but rather managing multiple contractors for individual components of their construction, the Contractor Addendum is recommended, but not required.

CERTIFICATION OF CONSTRUCTION REQUIREMENTS

Once homeowners sign a grant, they will meet with their RREM Project Manager to review their scope of work and the relevant federal requirements that apply to their remaining construction. These requirements are summarized on a form known as the Certification of Construction Requirements. All homeowners must sign this form, acknowledging they agree to and understand the conditions that must be met as they perform their remaining construction.

LEAD

Lead is a naturally occurring element that was commonly used in household paint until 1978. For homes that contain lead-based paint, renovation, repair or painting activities can create toxic lead dust when these surfaces are disturbed or demolished. Homeowners who are repairing or rehabilitating an existing home that contains lead paint must ensure the proper lead safe work practices are followed. Depending on whether the lead paint in your home is exposed and hazardous, homeowners may be required to use a New Jersey State-Certified Lead Abatement Contractor to remove lead paint hazards. If your home contains lead paint, but it is in good condition and not a hazard, homeowners are required to use a certified renovation, repair and painting (RRP) firm when performing all renovations to their home. Upon completion of construction, a lead paint clearance test must be performed which documents that the property is lead-safe. Additional information can be found by visiting:

For homeowners interested in more information on lead, please view the Lead-Based Paint Requirements Tip Sheet.

GREEN BUILDING STANDARDS

As part of the RREM Program’s construction requirements, the program must comply with U.S. Department of Housing and Urban Development (HUD) requirements for energy efficiency. Based on HUD guidelines, the RREM Program requires homeowners to comply with Green Building and Energy Star standards.

ENERGY STAR

For homes being reconstructed (i.e. new house being built), the federal government requires that certain energy efficiency standards must be met. Energy Star standards do not apply to rehabilitation projects.

If Energy Star applies to your project, you may use the ENERGY STAR Plan Review Checklist Version 3.0 as your resource to show compliance with this requirement.

General information on Energy Star standards can be found by visiting www.energystar.gov.

GREEN BUILDING

For homes being rehabilitated, the HUD Green Building Retrofit Checklist (Homeowners HUD Green Building Retrofit Checklist Certification) is a federal construction standard requiring that work performed when receiving federal funds must meet certain energy efficiency and indoor air quality standards. The HUD Green Building Retrofit Checklist standard does not apply to reconstruction projects.

To determine what standards apply to your reconstruction or rehabilitation project, please reference the information below:

ENERGY STAR

Reconstruction Under contract prior to RREM grant signing Does not apply
Not under contract prior to RREM grant signing Applies
Rehabilitation Does not apply

GREEN BUILDING
RETROFIT CHECKLIST

Reconstruction Does not apply
Rehabilitation Started repairs or under contract prior to RREM grant signing Does not apply
Did not start repairs and not under contract prior to RREM grant signing Applies

For more information regarding energy efficiency and RREM Program requirements, please view the Energy Star Tip Sheet and the Green Building Tip Sheet

FINAL INSPECTION

As part of the close out process of the RREM Program, the RREM Project Manager will conduct a final inspection of the homeowner’s project. When the homeowner is ready for a final inspection, they must contact their RREM Project Manager to schedule the inspection. A RREM Project Manager will not schedule a final inspection if the homeowner does not have key documentation ready for their project.

Key documentation the homeowner should have ready before their final inspection includes:

  • A Certificate of Occupancy from their municipality;
  • A Final Elevation Certificate (if applicable);
  • A Lead Paint Clearance Report (if applicable);
  • An Asbestos Manifest showing asbestos was properly removed from the property (if applicable);
  • A completed Energy Star Plan Review Checklist (if applicable), if the home was a reconstruction project;
  • A completed HUD Green Building Checklist (if applicable), if the home was a rehabilitation project; and
  • Most importantly, a comparison of the homeowner’s Estimated Cost to Repair (ECR) to their contractor’s actual scope of work to ensure they did all the work the RREM Program required.

If the homeowner believes they are ready for their final inspection, they should contact their RREM Project Manager to learn what documentation the project manager will require. For even more information, please view the Preparing for Final Inspection Tip Sheet.

RETAINAGE

Effective October 13, 2014, the RREM Program will reserve a portion of the homeowner’s grant award as retainage. The RREM Program will withhold this portion of the homeowner’s grant until construction is complete, the home has passed final inspection, and the program verifies whether the homeowner has received any additional insurance or other benefits that may impact the RREM grant amount. Homeowners who signed a grant prior to October 13, 2014, or who have completed all construction prior to the date their Initial Site Inspection is performed are exempt from this rule.

DESIGN COSTS

For homeowners who sign a grant on or after October 13, 2014, the RREM Program provides an allowance of $15,000 as a design services fund in addition to the homeowner’s total grant award amount. This design services fund assists applicants with anticipated costs required for design and engineering services, such as elevation surveys, geotechnical reports, foundation designs, architectural plans, etc. Funds for design services are paid out to homeowners based on the lesser of bills and invoices or program-determined allowances.

SUBMITTING A PAYMENT REQUEST

Upon completion of eligible work, the homeowner contacts their RREM Project Manager with a payment request from their grant award. Before the RREM Project Manager can submit the homeowner’s request for more of their grant award, the RREM Project Manager will need to see proof of work completed. This may include bills, invoices, and pictures of construction progressing. Once the RREM Project Manager has reviewed the proper documentation, the payment request is submitted. The homeowner receives these payments in no more than two installments in addition to the Advance Payment Request. With the Advance Payment Request, which occurs at the grant award signing, homeowners can request half of their grant award up front to pay for costs such as permits, design plans and construction deposits. Homeowners will need to provide at the time of the grant award signing an executed contract between the homeowner and the selected contractor.

To view a more detailed outline of the payment request process, please view the Submitting a Payment Request Tip Sheet. For Homeowners ready to request a payment for their construction award, please view the

FORM 7 – VERIFICATION OF DISABILITY AND MOBILITY MODIFICATION LIST

To ensure that the RREM Program is able to assist homeowners with disabilities, the program has created the Form 7 – Verification of Disability. As mandated by the Social Security Act, the Americans With Disabilities Act of 1990 and U.S. Department of Housing and Urban Development (HUD) regulations, the RREM Program will need verification from a licensed medical professional that a homeowner would benefit from housing modifications to improve accessibility.

If you are participating in the RREM Program, and have not already informed the program that you would benefit from mobility modifications, please print and complete the Form 7 – Verification of Disability. Once the form has been completed, please return it to your Housing Advisor as soon as possible. The program needs this information to make the proper adjustments to your file.

MOBILITY MODIFICATION LIST

This form allows homeowners to select modifications to their home to assist them with their disability. To approve certain modifications, the RREM Program will need the Form 7 – Verification of Disability document completed.
See the Mobility Modification List.