Chapter 15: Replacement Housing

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Section 1: Eligibility

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Overview

Eligible displacees may be provided a payment for decent, safe, and sanitary (DSS) replacement housing under the following provisions.

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Eligibility Requirements

To qualify for a replacement housing supplement, a displaced person must be a citizen, a national, or an alien lawfully present in the United States (except under certain hardship conditions).

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  • If the displaced person is a citizen or a national, no further steps are required.
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  • If the displaced person is an alien lawfully present, he must provide documentation supporting his status. Evaluate this documentation in accordance with revised 49CFR §24.208, and in coordination with ROW Division HQ for statewide consistency. All relocation claim forms must be accompanied by a certification regarding citizenship status that must be signed by the displaced person.

To comply with 49CFR §24.208, all relocation notices will include the following statement: “Any person or entity who is an Alien not lawfully present in the United States is ineligible for relocation advisory services and relocation payments, unless such ineligibility would result in exceptional and extremely unusual hardship to a qualifying spouse, parent or child.” A hardship case is not automatic when an eligible dependent is involved.

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Time Period

To qualify for a replacement housing supplement, a displacee must purchase and occupy or rent and occupy a DSS replacement dwelling within the applicable time period described in Determination of Eligibility or Eligibility - 90-Day Tenant-Occupants and Less Than 90-Day Owner Occupants.

A displacee is not required to purchase or rent “comparable” housing to qualify for a supplement. Comparability is used merely as a standard to determine the upper limit of a replacement housing payment to which the displacee may be entitled.

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Owner of Displacement Dwelling

A displacee is considered to have met the requirement for ownership of a displacement dwelling if the person holds any of the following interests in real property acquired:

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  • Fee title, a life estate, a land contract, a 99-year lease, or a lease with at least 50 years to run from the date of acquisition, including any options for extension.
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  • An interest in a cooperative housing project that includes the right to occupy the displacement dwelling.
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  • A contract to purchase any of the interests or estates described immediately above.
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  • Any other interest, including a partial interest, which, in the judgment of TxDOT, warrants consideration as ownership.
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Purchase of Replacement Dwelling

A displaced person meets the requirement to purchase a replacement dwelling, if the person does any of the following:

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  • Purchases a DSS dwelling.
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  • Purchases and renovates a substandard dwelling.
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  • Relocates the displacement dwelling.
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  • Constructs a dwelling or contracts for the purchase or construction of a dwelling on a site provided by a builder, or on a site the person owns or purchases.
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  • Currently owns a previously purchased dwelling and site, the valuation of which will be on the basis of fair market value.
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Occupancy

A displaced tenant or owner “occupies” a replacement dwelling only if the dwelling is his permanent place of residence, and he meets eligibility requirements for supplemental housing payment.

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Delay in Occupancy After the Purchase of Replacement Dwelling

If a displaced person initially occupies a replacement dwelling after the date by which occupancy is required, but the delay beyond this date is caused by reasons beyond the displaced person’s control, as determined by TxDOT, the occupancy requirement is satisfied.

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Payment Eligibility in Special Circumstances

No person will be denied eligibility for a replacement housing payment solely because he is unable to meet the occupancy requirements described in this Section due to a disaster, an emergency, or an imminent threat to the public health or welfare, as determined by the President, FHWA or TxDOT.

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Conversion of Payment

A displaced person who initially rents a replacement dwelling and receives a rental assistance payment under provisions of Entitlements for 90-Day Tenant-Occupants and Less than 90-Day Owner-Occupants is eligible to receive a payment for purchase of a replacement dwelling if he applies for the payment and meets eligibility criteria, including purchase and occupancy within the prescribed one-year period. Any portion of the rental assistance payment that was disbursed will be deducted from the purchase payment that the displacee may receive under the provisions of Entitlements for 90-Day Tenant-Occupants and Less than 90-Day Owner-Occupants.

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Change in Occupancy

If a displacee receives a relocation payment under provisions of Entitlements for 90-Day Owner-Occupants and Entitlements for 90-Day Tenant-Occupants and Less than 90-Day Owner-Occupants for the purchase or rent of a DSS replacement dwelling that costs less to purchase or rent than the comparable dwelling on which his approved housing or rent supplement was based, then the displacee is entitled to a payment for the unused balance of the approved housing or rent supplement if he applies for the payment and meets eligibility criteria.

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Payment After Death

A replacement housing supplement is personal to the displacee. Upon his death, the undisbursed portion of this supplement will not be paid to the heirs or assigns, except for the following:

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  • 1/42nd of the approved rental supplement will be paid for each month the displacee occupied the replacement dwelling.
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  • The full payment will be disbursed when a member of a displaced family dies and the other family member(s) continue to occupy a DSS replacement dwelling selected according to this Volume.
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  • Any portion of a replacement housing supplement necessary to satisfy the legal obligation of an estate, in connection with selection of a replacement dwelling by or on behalf of a deceased person, will be disbursed to the estate.
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Non-Occupancy

A displaced person, who has entered into a contract for the construction or rehabilitation of a replacement dwelling and, for reasons beyond his reasonable control, cannot occupy the replacement dwelling within the one-year period prescribed in Entitlements for 90-Day Owner-Occupants is considered to have purchased and occupied the dwelling as of the contract date. Replacement housing payments under these conditions will be deferred until actual occupancy is accomplished and an inspection has been performed establishing the dwelling as DSS. Document the reason for the delay in the parcel file.

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DSS Dwelling

A displacee may relocate to a DSS dwelling of his choice, including one used to compute his supplement. However, the payment, if any, is limited to the amount of the applicable housing payment authorized by Entitlements for 90-Day Owner-Occupants and Entitlements for 90-Day Tenant-Occupants and Less than 90-Day Owner-Occupants.

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Number of Units

Only one replacement housing payment will be made for each dwelling unit acquired, except when more than one family occupies a single-family dwelling unit.

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Statement to Lending Agencies

When a displacee qualifies for a replacement housing payment, but has not yet rented or purchased and occupied a suitable replacement dwelling, TxDOT, after inspecting the displacee’s choice for a replacement dwelling and finding it meets standards for DSS housing, will, upon the displacee’s request, state to any interested party, financial institution or lending agency that the displacee is eligible for payment of a specified sum contingent upon the displacee purchasing or renting (as applicable) and occupying the inspected dwelling by the required date.

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Eminent Domain Action

Do not process parcels for condemnation action until current replacement housing supplements receive ROW Division HQ approval and are formally offered to the owner. Requests to acquire by eminent domain will contain one of the following declarations:

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Supplement Revisions

Re-compute an approved replacement housing or rent supplement when:

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  • the sale or rent price of the selected comparable changes, or comparable housing is no longer available at or below the original established price and the displacee is required to vacate the needed ROW or is actively looking for a replacement home; or
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  • the subject’s value changes due to reappraisal; or
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  • the value offered by an LPA exceeds TxDOT’s approved value; or
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  • the amount of just compensation payable for a parcel is increased or decreased by a Special Commissioners’ Award, a final court judgment, or an administrative settlement. Handle a revision based on this situation according to procedures for replacement housing payments in eminent domain cases, unless an administrative settlement establishes specific values.

Do not adjust supplements downward for situations cited in the first diamond above if the displacee is offered the currently approved amount. To revise an approved supplement, submit a revised form ROW-R-107, Supplemental Payment Estimate - Replacement Housing, with supporting information to ROW Division HQ.

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Ownership of Replacement Dwelling Before Displacement

Any person who has obtained legal ownership of a replacement dwelling or land upon which his replacement dwelling is constructed, either before or after displacement, and occupies the replacement dwelling after being displaced, but within the time limit specified for 90-day owner-occupants and 90-day tenant-occupants, is eligible for a replacement housing payment if the replacement dwelling meets requirements for DSS housing.

Use the fair market value of the replacement land or dwelling to determine the replacement housing payment. The fair market value of land and improvements located on a parcel remainder will be the same as values established for properties in the approved appraisal for the parcel. The fair market value for dwellings and lands previously acquired by a county or city will be the same as those established for the properties by the County Appraisal District, or by a written appraisal report provided by the property owner. These appraisal reports must be prepared according to recognized professional appraisal standards and must conform to the requirements described in TxDOT’s Appraisal and Review Manual. TxDOT review appraisers will review all appraisal reports to determine compliance with these standards. Costs associated with preparing this appraisal will be the displacee’s responsibility.

When a County Appraisal District value is used for a payment determination, conduct an “on-site” inspection of the real property to verify that the County appraisal covers the same land, dwelling and exterior attributes that are being claimed as the replacement residential property for the relocation assistance payment. Document the parcel file with a copy of the County property evaluation as it appears in the County Appraisal District’s records, or with the approved appraisal provided by the displacee. Document the control dates in the R/W-PD files as established in Determination of Eligibility or Eligibility - 90-Day Tenant-Occupants and Less than 90-day Owner-Occupants in the parcel files.

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Multiple Occupancy of Same Dwelling

If two or more legal occupants (families or individuals) of the displacement dwelling move to separate replacement dwellings, each occupant is entitled to a reasonable prorated share of relocation payments, as determined by TxDOT. The actual replacement-housing payment to each family or individual will be based on increased housing costs in excess of their share of costs at the displacement dwelling (or financial means if applicable), with total family or individual payments not to exceed the approved replacement-housing supplement.

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Multiple Ownership of Subject Dwelling

When a single-family dwelling is owned by several persons, and occupied by only some of the owners, compute the replacement housing supplement in the normal way. The payment, however, will be the lesser of:

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  • the difference between the owner-occupant’s share of the acquisition cost of the acquired dwelling and the actual cost of the replacement dwelling purchased by the displacees; or
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  • the difference between the total acquisition cost of the acquired dwelling and the amount determined by the State as necessary to purchase a comparable dwelling (the approved supplement).

If a displacee(s) holds a life estate interest in the TxDOT-acquired property, use an annuity table (recognized by the courts) to determine the value of displacee’s share of the parcel acquisition cost. Coordinate these situations with ROW Division HQ before informing the displacee of the specific amount of his replacement housing entitlement.

Displaced owner-occupants who do not or cannot purchase and occupy a DSS dwelling will be entitled to receive a rent supplement payment if they rent and occupy a DSS dwelling.

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