[Title 24 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2017 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]

          

         
         Title 24

Housing and Urban Development


________________________

Parts 0 to 199

                         Revised as of April 1, 2017

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2017
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 24:
          SUBTITLE A--Office of the Secretary, Department of 
          Housing and Urban Development                              3
    SUBTITLE B--Regulations Relating to Housing and Urban 
      Development 
          Chapter I--Office of Assistant Secretary for Equal 
          Opportunity, Department of Housing and Urban 
          Development                                              663
  Finding Aids:
      Table of CFR Titles and Chapters........................     783
      Alphabetical List of Agencies Appearing in the CFR......     803
      List of CFR Sections Affected...........................     813

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                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 24 CFR 0.1 refers to 
                       title 24, part 0, section 
                       1.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
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into 50 titles which represent broad areas subject to Federal 
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parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

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HOW TO USE THE CODE OF FEDERAL REGULATIONS

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[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
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[[Page vii]]

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    Director,
    Office of the Federal Register.
    April 1, 2017.







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                               THIS TITLE

    Title 24--Housing and Urban Development is composed of five volumes. 
The first four volumes containing parts 0-199, parts 200-499, parts 500-
699, parts 700-1699, represent the regulations of the Department of 
Housing and Urban Development. The fifth volume, containing part 1700 to 
end, continues with regulations of the Department of Housing and Urban 
Development and also includes regulations of the Board of Directors of 
the Hope for Homeowners Program, and the Neighborhood Reinvestment 
Corporation. The contents of these volumes represent all current 
regulations codified under this title of the CFR as of April 1, 2017.

    For this volume, Robert J. Sheehan, III was Chief Editor. The Code 
of Federal Regulations publication program is under the direction of 
John Hyrum Martinez, assisted by Stephen J. Frattini.

[[Page 1]]



                 TITLE 24--HOUSING AND URBAN DEVELOPMENT




                   (This book contains parts 0 to 199)

  --------------------------------------------------------------------
                                                                    Part

SUBTITLE A--Office of the Secretary, Department of Housing 
  and Urban Development.....................................           0

    SUBTITLE B--Regulations Relating to Housing and Urban Development

chapter i--Office of Assistant Secretary for Equal 
  Opportunity, Department of Housing and Urban Development..         100

[[Page 3]]

  Subtitle A--Office of the Secretary, Department of Housing and Urban 
                               Development

  --------------------------------------------------------------------



  Editorial Note: Nomenclature changes to chapter I appear at 59 FR 
14092, Mar. 25, 1994.
Part                                                                Page
0               Standards of conduct........................           7
1               Nondiscrimination in federally assisted 
                    programs of the Department of Housing 
                    and Urban Development--effectuation of 
                    Title VI of the Civil Rights Act of 1964           7
3               Nondiscrimination on the basis of sex in 
                    education programs or activities 
                    receiving Federal financial assistance..          14
4               HUD Reform Act..............................          31
5               General HUD program requirements; waivers...          38
6               Nondiscrimination in programs and activities 
                    receiving assistance under Title I of 
                    the Housing and Community Development 
                    Act of 1974.............................         132
8               Nondiscrimination based on handicap in 
                    federally assisted programs and 
                    activities of the Department of Housing 
                    and Urban Development...................         139
9               Enforcement of nondiscrimination on the 
                    basis of disability in programs or 
                    activities conducted by the Department 
                    of Housing and Urban Development........         160
10              Rulemaking: Policy and procedures...........         171
13              Use of penalty mail in the location and 
                    recovery of missing children............         174
14              Implementation of the Equal Access to 
                    Justice Act in administrative 
                    proceedings.............................         175

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15              Public access to HUD records under the 
                    Freedom of Information Act and testimony 
                    and production of information by HUD 
                    employees...............................         182
16              Implementation of the Privacy Act of 1974...         201
17              Administrative claims.......................         214
18              Indemnification of HUD employees............         230
20              Office of Hearings and Appeals..............         231
24              Governmentwide debarment and suspension 
                    (nonprocurement)........................         232
25              Mortgagee Review Board......................         232
26              Hearing procedures..........................         239
27              Nonjudicial foreclosure of multifamily and 
                    single family mortgages.................         261
28              Implementation of the Program Fraud Civil 
                    Remedies Act of 1986....................         270
30              Civil money penalties: certain prohibited 
                    conduct.................................         274
35              Lead-based paint poisoning prevention in 
                    certain residential structures..........         283
40              Accessibility standards for design, 
                    construction, and alteration of publicly 
                    owned residential structures............         333
41              Policies and procedures for the enforcement 
                    of standards and requirements for 
                    accessibility by the physically 
                    handicapped.............................         335
42              Displacement, relocation assistance, and 
                    real property acquisition for HUD and 
                    HUD-assisted programs...................         337
43-45

[Reserved]

50              Protection and enhancement of environmental 
                    quality.................................         342
51              Environmental criteria and standards........         351
52              Intergovernmental review of Department of 
                    Housing and Urban Development programs 
                    and activities..........................         368
55              Floodplain management and protection of 
                    wetlands................................         371
58              Environmental review procedures for entities 
                    assuming HUD environmental 
                    responsibilities........................         384
60              Protection of human subjects (Eff. until 1-
                    19-18)..................................         404
60              Protection of human subjects (Eff. 1-19-18).         404
70              Use of volunteers on projects subject to 
                    Davis-Bacon and HUD-determined wage 
                    rates...................................         418
81              The Secretary of HUD's regulation of the 
                    Federal National Mortgage Association 
                    (Fannie Mae) and the Federal Home Loan 
                    Mortgage Corporation (Freddie Mac)......         421

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84              Uniform administrative requirements for 
                    grants and agreements with institutions 
                    of higher education, hospitals, and 
                    other non-profit organizations..........         466
85              Administrative requirements for grants and 
                    cooperative agreements to State, local 
                    and federally recognized Indian tribal 
                    governments.............................         466
87              New restrictions on lobbying................         466
91              Consolidated submissions for community 
                    planning and development programs.......         478
92              Home Investment Partnerships Program........         530
93              Housing trust fund..........................         615
94-99

[Reserved]



Appendixes A-C to Subtitle A [Reserved]

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PART 0_STANDARDS OF CONDUCT--Table of Contents





Sec.  0.1  Cross-reference to employees ethical conduct standards and
financial disclosure regulations.

    Employees of the Department of Housing and Urban Development 
(Department) are subject to the executive branch-wide standards of 
ethical conduct at 5 CFR part 2635, the Department's regulation at 5 CFR 
part 7501 which supplements the executive branch-wide standards, and the 
executive branch-wide financial disclosure regulation at 5 CFR part 
2634.

5 U.S.C. 301, 7301; 42 U.S.C. 3535(d)

[61 FR 36251, July 9, 1996]



 PART 1_NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS OF THE DEPARTMENT
 OF HOUSING AND URBAN DEVELOPMENT_EFFECTUATION OF TITLE VI OF THE CIVIL
 RIGHTS ACT OF 1964--Table of Contents



Sec.
1.1 Purpose.
1.2 Definitions.
1.3 Application of part 1.
1.4 Discrimination prohibited.
1.5 Assurances required.
1.6 Compliance information.
1.7 Conduct of investigations.
1.8 Procedure for effecting compliance.
1.9 Hearings.
1.10 Effect on other regulations; forms and instructions.

    Authority: 42 U.S.C. 2000d-1 and 3535(d).

    Source: 38 FR 17949, July 5, 1973, unless otherwise noted.



Sec.  1.1  Purpose.

    The purpose of this part 1 is to effectuate the provisions of title 
VI of the Civil Rights Act of 1964 (hereafter referred to as the Act) to 
the end that no person in the United States shall, on the ground of 
race, color, or national origin, be excluded from participation in, be 
denied the benefits of, or be otherwise subjected to discrimination 
under any program or activity receiving Federal financial assistance 
from the Department of Housing and Urban Development.



Sec.  1.2  Definitions.

    As used in this part 1--
    (a) The term Department means the Department of Housing and Urban 
Development.
    (b) The term Secretary means the Secretary of Housing and Urban 
Development.
    (c) The term responsible Department official means the Secretary or, 
to the extent of any delegation of authority by the Secretary to act 
under this part 1, any other Department official to whom the Secretary 
may hereafter delegate such authority.
    (d) The term United States means the States of the United States, 
the District of Columbia, Puerto Rico, the Virgin Islands, American 
Samoa, Guam, Wake Island, the Canal Zone, and the territories and 
possessions of the United States, and the term State means any one of 
the foregoing.
    (e) The term Federal financial assistance includes: (1) Grants, 
loans, and advances of Federal funds, (2) the grant or donation of 
Federal property and interests in property, (3) the detail of Federal 
personnel, (4) the sale and lease of, and the permission to use (on 
other than a casual or transient basis), Federal property or any 
interest in such property without consideration or at a nominal 
consideration, or at a consideration which is reduced for the purpose of 
assisting the recipient, or in recognition of the public interest to be 
served by such sale or lease to the recipient, and (5) any Federal 
agreement, arrangement, or other contract which has as one of its 
purposes the provision of assistance. The term Federal financial 
assistance does not include a contract of insurance or guaranty.
    (f) The term recipient means any State, political subdivision of any 
State, or instrumentality of any State or political subdivision, any 
public or private agency, institution, organization, or other entity, or 
any individual, in any State, to whom Federal financial assistance is 
extended, directly or through another recipient, for any program or 
activity, or who otherwise participates in carrying out such program or 
activity (such as a redeveloper in the Urban Renewal Program), including 
any successor, assign, or transferee thereof, but such term does not 
include

[[Page 8]]

any ultimate beneficiary under any such program or activity.
    (g) The term applicant means one who submits an application, 
contract, request, or plan requiring Department approval as a condition 
to eligibility for Federal financial assistance, and the term 
application means such an application, contract, request, or plan.



Sec.  1.3  Application of part 1.

    This part 1 applies to any program or activity for which Federal 
financial assistance is authorized under a law administered by the 
Department, including any program or activity assisted under the 
statutes listed in appendix A of this part 1. It applies to money paid, 
property transferred, or other Federal financial assistance extended to 
any such program or activity on or after January 3, 1965. This part 1 
does not apply to: (a) Any Federal financial assistance by way of 
insurance or guaranty contracts, (b) money paid, property transferred, 
or other assistance extended to any such program or activity before 
January 3, 1965, (c) any assistance to any person who is the ultimate 
beneficiary under any such program or activity, or (d) any employment 
practice, under any such program or activity, of any employer, 
employment agency, or labor organization, except to the extent described 
in Sec.  1.4(c). The fact that certain financial assistance is not 
listed in appendix A shall not mean, if title VI of the Act is otherwise 
applicable, that such financial assistance is not covered. Other 
financial assistance under statutes now in force or hereinafter enacted 
may be added to this list by notice published in the Federal Register.



Sec.  1.4  Discrimination prohibited.

    (a) General. No person in the United States shall, on the ground of 
race, color, or national origin, be excluded from participation in, be 
denied the benefits of, or be otherwise subjected to discrimination 
under any program or activity to which this part 1 applies.
    (b) Specific discriminatory actions prohibited. (1) A recipient 
under any program or activity to which this part 1 applies may not, 
directly or through contractual or other arrangements, on the ground of 
race, color, or national origin:
    (i) Deny a person any housing, accommodations, facilities, services, 
financial aid, or other benefits provided under the program or activity;
    (ii) Provide any housing, accommodations, facilities, services, 
financial aid, or other benefits to a person which are different, or are 
provided in a different manner, from those provided to others under the 
program or activity;
    (iii) Subject a person to segregation or separate treatment in any 
matter related to his receipt of housing, accommodations, facilities, 
services, financial aid, or other benefits under the program or 
activity;
    (iv) Restrict a person in any way in access to such housing, 
accommodations, facilities, services, financial aid, or other benefits, 
or in the enjoyment of any advantage or privilege enjoyed by others in 
connection with such housing, accommodations, facilities, services, 
financial aid, or other benefits under the program or activity;
    (v) Treat a person differently from others in determining whether he 
satisfies any occupancy, admission, enrollment, eligibility, membership, 
or other requirement or condition which persons must meet in order to be 
provided any housing, accommodations, facilities, services, financial 
aid, or other benefits provided under the program or activity;
    (vi) Deny a person opportunity to participate in the program or 
activity through the provision of services or otherwise, or afford him 
an opportunity to do so which is different from that afforded others 
under the program or activity (including the opportunity to participate 
in the program or activity as an employee but only to the extent set 
forth in paragraph (c) of this section).
    (vii) Deny a person the opportunity to participate as a member of a 
planning or advisory body which is an integral part of the program.
    (2)(i) A recipient, in determining the types of housing, 
accommodations, facilities, services, financial aid, or other benefits 
which will be provided under any such program or activity, or the

[[Page 9]]

class of persons to whom, or the situations in which, such housing, 
accommodations, facilities, services, financial aid, or other benefits 
will be provided under any such program or activity, or the class of 
persons to be afforded an opportunity to participate in any such program 
or activity, may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration which have 
the effect of subjecting persons to discrimination because of their 
race, color, or national origin, or have the effect of defeating or 
substantially impairing accomplishment of the objectives of the program 
or activity as respect to persons of a particular race, color, or 
national origin.
    (ii) A recipient, in operating low-rent housing with Federal 
financial assistance under the United States Housing Act of 1937, as 
amended (42 U.S.C. 1401 et seq.), shall assign eligible applicants to 
dwelling units in accordance with a plan, duly adopted by the recipient 
and approved by the responsible Department official, providing for 
assignment on a community-wide basis in sequence based upon the date and 
time the application is received, the size or type of unit suitable, and 
factors affecting preference or priority established by the recipient's 
regulations, which are not inconsistent with the objectives of title VI 
of the Civil Rights Act of 1964 and this part 1. The plan may allow an 
applicant to refuse a tendered vacancy for good cause without losing his 
standing on the list but shall limit the number of refusals without 
cause as prescribed by the responsible Department official.
    (iii) The responsible Department official is authorized to prescribe 
and promulgate plans, exceptions, procedures, and requirements for the 
assignment and reassignment of eligible applicants and tenants 
consistent with the purpose of paragraph (b)(2)(ii) of this section, 
this part 1, and title VI of the Civil Rights Act of 1964, in order to 
effectuate and insure compliance with the requirements imposed 
thereunder.
    (3) In determining the site or location of housing, accommodations, 
or facilities, an applicant or recipient may not make selections with 
the purpose or effect of excluding individuals from, denying them the 
benefits of, or subjecting them to discrimination under any program to 
which this part 1 applies, on the ground of race, color, or national 
origin; or with the purpose or effect of defeating or substantially 
impairing the accomplishment of the objectives of the Act or this part 
1.
    (4) As used in this part 1 the housing, accommodations, facilities, 
services, financial aid, or other benefits provided under a program or 
activity receiving Federal financial assistance shall be deemed to 
include any housing, accommodations, facilities, services, financial 
aid, or other benefits provided in or through a facility provided with 
the aid of Federal financial assistance.
    (5) The enumeration of specific forms of prohibited discrimination 
in paragraphs (b) and (c) of this section does not limit the generality 
of the prohibition in paragraph (a) of this section.
    (6)(i) In administering a program regarding which the recipient has 
previously discriminated against persons on the ground of race, color, 
or national origin, the recipient must take affirmative action to 
overcome the effects of prior discrimination.
    (ii) Even in the absence of such prior discrimination, a recipient 
in administering a program should take affirmative action to overcome 
the effects of conditions which resulted in limiting participation by 
persons of a particular race, color, or national origin.

Where previous discriminatory practice or usage tends, on the ground of 
race, color, or national origin, to exclude individuals from 
participation in, to deny them the benefits of, or to subject them to 
discrimination under any program or activity to which this part 1 
applies, the applicant or recipient has an obligation to take reasonable 
action to remove or overcome the consequences of the prior 
discriminatory practice or usage, and to accomplish the purpose of the 
Act.
    (c) Employment practices. (1) Where a primary objective of the 
Federal financial assistance to a program or activity to which this part 
1 applies is to provide employment, a recipient may not, directly or 
through contractual or other arrangements, subject a person to 
discrimination on the ground of race, color, or national origin in its

[[Page 10]]

employment practices under such program or activity (including 
recruitment or recruitment advertising, employment, layoff, termination, 
upgrading, demotion, transfer, rates of pay or other forms of 
compensation and use of facilities). The requirements applicable to 
construction employment under such program or activity shall be those 
specified in or pursuant to part III of Executive Order 11246 or any 
executive order which supersedes or amends it.
    (2) Where a primary objective of the Federal financial assistance is 
not to provide employment, but discrimination on the ground of race, 
color, or national origin in the employment practices of the recipient 
or other persons subject to this part 1 tends, on the ground of race, 
color, or national origin, to exclude individuals from participation in, 
to deny them the benefits of, or to subject them to discrimination under 
any program to which this part 1 applies, the provisions of this 
paragraph (c) shall apply to the employment practices of the recipient 
or other persons subject to this part 1 to the extent necessary to 
assure equality of opportunity to, and nondiscriminatory treatment of, 
beneficiaries.



Sec.  1.5  Assurances required.

    (a) General. (1) Every contract for Federal financial assistance to 
carry out a program or activity to which this part 1 applies, executed 
on or after January 3, 1965, and every application for such Federal 
financial assistance submitted on or after January 3, 1965, shall, as a 
condition to its approval and the extension of any Federal financial 
assistance pursuant to such contract or application, contain or be 
accompanied by an assurance that the program or activity will be 
conducted and the housing, accommodations, facilities, services, 
financial aid, or other benefits to be provided will be operated and 
administered in compliance with all requirements imposed by or pursuant 
to this part 1. In the case of a contract or application where the 
Federal financial assistance is to provide or is in the form of personal 
property or real property or interest therein or structures thereon, the 
assurance shall obligate the recipient or, in the case of a subsequent 
transfer, the transferee, for the period during which the property is 
used for a purpose for which the Federal financial assistance is 
extended or for another purpose involving the provision of similar 
services or benefits, or for as long as the recipient retains ownership 
or possession of the property, whichever is longer. In all other cases 
the assurance shall obligate the recipient for the period during which 
Federal financial assistance is extended pursuant to the contract or 
application. The responsible Department official shall specify the form 
of the foregoing assurance for such program or activity, and the extent 
to which like assurances will be required of subgrantees, contractors 
and subcontractors, transferees, successors in interest, and other 
participants in the program or activity. Any such assurance shall 
include provisions which give the United States a right to seek its 
judicial enforcement.
    (2) In the case of real property, structures or improvements 
thereon, or interests therein, acquired through a program of Federal 
financial assistance the instrument effecting any disposition by the 
recipient of such real property, structures or improvements thereon, or 
interests therein, shall contain a covenant running with the land 
assuring nondiscrimination for the period during which the real property 
is used for a purpose for which the Federal financial assistance is 
extended or for another purpose involving the provision of similar 
services or benefits. In the case where Federal financial assistance is 
provided in the form of a transfer of real property or interests therein 
from the Federal Government, the instrument effecting or recording the 
transfer shall contain such a covenant.
    (3) In program receiving Federal financial assistance in the form, 
or for the acquisition, of real property or an interest in real 
property, to the extent that rights to space on, over, or under any such 
property are included as part of the program receiving such assistance, 
the nondiscrimination requirements of this part 1 shall extend to any 
facility located wholly or in part in such space.
    (b) Preexisting contracts--funds not disbursed. In any case where a 
contract for Federal financial assistance, to carry

[[Page 11]]

out a program or activity to which this part 1 applies, has been 
executed prior to January 3, 1965, and the funds have not been fully 
disbursed by the Department, the responsible Department official shall, 
where necessary to effectuate the purposes of this part 1, require an 
assurance similar to that provided in paragraph (a) of this section as a 
condition to the disbursement of further funds.
    (c) Preexisting contracts--periodic payments. In any case where a 
contract for Federal financial assistance, to carry out a program or 
activity to which this part 1 applies, has been executed prior to 
January 3, 1965, and provides for periodic payments for the continuation 
of the program or activity, the recipient shall, in connection with the 
first application for such periodic payments on or after January 3, 
1965: (1) Submit a statement that the program or activity is being 
conducted in compliance with all requirements imposed by or pursuant to 
this part 1 and (2) provide such methods of administration for the 
program or activity as are found by the responsible Department official 
to give reasonable assurance that the recipient will comply with all 
requirements imposed by or pursuant to this part 1.
    (d) Assurances from institutions. (1) In the case of any application 
for Federal financial assistance to an institution of higher education, 
the assurance required by this section shall extend to admission 
practices and to all other practices relating to the treatment of 
students.
    (2) The assurance required with respect to an institution of higher 
education, hospital, or any other institution, insofar as the assurance 
relates to the institution's practices with respect to admission or 
other treatment of persons as students, patients, or clients of the 
institution or to the opportunity to participate in the provision of 
services or other benefits to such persons, shall be applicable to the 
entire institution unless the applicant establishes, to the satisfaction 
of the responsible Department official, that the institution's practices 
in designated parts or programs of the institution will in no way affect 
its practices in the program of the institution for which Federal 
financial assistance is sought, or the beneficiaries of or participants 
in such program. If in any such case the assistance sought is for the 
construction of a facility or part of a facility, the assurance shall in 
any event extend to the entire facility and to facilities operated in 
connection therewith.
    (e) Elementary and secondary schools. The requirements of this 
section with respect to any elementary or secondary school or school 
system shall be deemed to be satisfied if such school or school system 
(1) is subject to a final order of a court of the United States for the 
desegregation of such school or school system, and provides an assurance 
that it will comply with such order, including any future modification 
of such order, or (2) submits a plan for the desegregation of such 
school or school system which the responsible official of the Department 
of Health and Human Services determines is adequate to accomplish the 
purposes of the Act and this part 1 within the earliest practicable 
time, and provides reasonable assurance that it will carry out such 
plan.

[38 FR 17949, July 5, 1973, as amended at 50 FR 9269, Mar. 7, 1985]



Sec.  1.6  Compliance information.

    (a) Cooperation and assistance. The responsible Department official 
and each Department official who by law or delegation has the principal 
responsibility within the Department for the administration of any law 
extending financial assistance subject to this part 1 shall to the 
fullest extent practicable seek the cooperation of recipients in 
obtaining compliance with this part 1 and shall provide assistance and 
guidance to recipients to help them comply voluntarily with this part 1.
    (b) Compliance reports. Each recipient shall keep such records and 
submit to the responsible Department official or his designee timely, 
complete, and accurate compliance reports at such times, and in such 
form and containing such information, as the responsible Department 
official or his designee may determine to be necessary to enable him to 
ascertain whether the recipient has complied or is complying with this 
part 1. In general, recipients should have available for the department 
racial and ethnic data showing

[[Page 12]]

the extent to which members of minority groups are beneficiaries of 
federally assisted programs.
    (c) Access to sources of information. Each recipient shall permit 
access by the responsible Department official or his designee during 
normal business hours to such of its books, records, accounts, and other 
sources of information, and its facilities as may be pertinent to 
ascertain compliance with this part 1. Where any information required of 
a recipient is in the exclusive possession of any other agency, 
institution, or person and this agency, institution, or person shall 
fail or refuse to furnish this information, the recipient shall so 
certify in its report and shall set forth what efforts it has made to 
obtain the information.
    (d) Information to beneficiaries and participants. Each recipient 
shall make available to participants, beneficiaries, and other 
interested persons such information regarding the provisions of this 
part 1 and its applicability to the program or activity under which the 
recipient receives Federal financial assistance, and make such 
information available to them in such manner, as the responsible 
Department official finds necessary to apprise such persons of the 
protections against discrimination assured them by the Act and this part 
1.



Sec.  1.7  Conduct of investigations.

    (a) Periodic compliance reviews. The responsible Department official 
or his designee shall from time to time review the practices of 
recipients to determine whether they are complying with this part 1.
    (b) Complaints. Any person who believes himself or any specific 
class of persons to be subjected to discrimination prohibited by this 
part 1 may by himself or by a representative file with the responsible 
Department official or his designee a written complaint. A complaint 
must be filed not later than 180 days from the date of the alleged 
discrimination, unless the time for filing is extended by the 
responsible Department official or his designee.
    (c) Investigations. The responsible Department official or his 
designee shall make a prompt investigation whenever a compliance review, 
report, complaint, or any other information indicates a possible failure 
to comply with this part 1. The investigation should include, where 
appropriate, a review of the pertinent practices and policies of the 
recipient, the circumstances under which the possible noncompliance with 
this part 1 occurred, and other factors relevant to a determination as 
to whether the recipient has failed to comply with this part .
    (d) Resolution of matters. (1) If an investigation pursuant to 
paragraph (c) of this section indicates a failure to comply with this 
part 1, the responsible Department official or his designee will so 
inform the recipient and the matter will be resolved by informal means 
whenever possible. If it has been determined that the matter cannot be 
resolved by informal means, action will be taken as provided for in 
Sec.  1.8.
    (2) If an investigation does not warrant action pursuant to 
paragraph (d)(1) of this section the responsible Department official or 
his designee will so inform the recipient and the complainant, if any, 
in writing.
    (e) Intimidatory or retaliatory acts prohibited. No recipient or 
other person shall intimidate, threaten, coerce, or discriminate against 
any person for the purpose of interfering with any right or privilege 
secured by title VI of the Act or this part 1, or because he has made a 
complaint, testified, assisted, or participated in any manner in an 
investigation, proceeding, or hearing under this part. The identity of 
complainants shall be kept confidential except to the extent necessary 
to carry out the purposes of this part, including the conduct of any 
investigation, hearing, or judicial proceeding arising thereunder.



Sec.  1.8  Procedure for effecting compliance.

    (a) General. If there appears to be a failure or threatened failure 
to comply with this part 1, and if the noncompliance or threatened 
noncompliance cannot be corrected by informal means, compliance with 
this part 1 may be effected by the suspension or termination of or 
refusal to grant or to continue Federal financial assistance, or by any 
other means authorized by law. Such other means may include, but are not 
limited to: (1) A reference to the

[[Page 13]]

Department of Justice with a recommendation that appropriate proceedings 
be brought to enforce any rights of the United States under any law of 
the United States (including other titles of the Act), or any assurance 
or other contractual undertaking, and (2) any applicable proceeding 
under State or local law.
    (b) Noncompliance with Sec.  1.5. If an applicant fails or refuses 
to furnish an assurance required under Sec.  1.5 or otherwise fails or 
refuses to comply with the requirement imposed by or pursuant to that 
section, Federal financial assistance may be refused in accordance with 
the procedures of paragraph (c) of this section. The Department shall 
not be required to provide assistance in such a case during the pendency 
of the administrative proceedings under such paragraph, except that the 
Department shall continue assistance during the pendency of such 
proceedings where such assistance is due and payable pursuant to a 
contract therefor approved prior to January 3, 1965.
    (c) Termination of or refusal to grant or to continue Federal 
financial assistance. No order suspending, terminating, or refusing to 
grant or continue Federal financial assistance shall become effective 
until (1) the responsible Department official has advised the applicant 
or recipient of his failure to comply and has determined that compliance 
cannot be secured by voluntary means, (2) there has been an express 
finding on the record, after opportunity for hearing, of a failure by 
the applicant or recipient to comply with a requirement imposed by or 
pursuant to this part 1, (3) the action has been approved by the 
Secretary, and (4) the expiration of 30 days after the Secretary has 
filed with the committees of the House and Senate having legislative 
jurisdiction over the program or activity involved a full written report 
of the circumstances and the grounds for such action. Any action to 
suspend or terminate or to refuse to grant or to continue Federal 
financial assistance shall be limited to the particular political 
entity, or part thereof, or other recipient as to whom such a finding 
has been made and shall be limited in its effect to the particular 
program, or part thereof, in which such noncompliance has been so found.
    (d) Other means authorized by law. No action to effect compliance by 
any other means authorized by law shall be taken until (1) the 
responsible Department official has determined that compliance cannot be 
secured by voluntary means, (2) the recipient or other person has been 
notified of its failure to comply and of the action to be taken to 
effect compliance, and (3) the expiration of at least 10 days from the 
mailing of such notice to the applicant or recipient. During this period 
of at least 10 days additional efforts shall be made to persuade the 
applicant or recipient to comply with this part 1 and to take such 
corrective action as may be appropriate.



Sec.  1.9  Hearings.

    (a) Opportunity for hearing. Whenever an opportunity for a hearing 
is required by Sec.  1.8(c), reasonable notice shall be given by 
registered or certified mail, return receipt requested, to the affected 
applicant or recipient. This notice shall advise the applicant or 
recipient of the action proposed to be taken, the specific provision 
under which the proposed action against it is to be taken, and the 
matters of fact or law asserted as the basis for this action, and 
either:
    (1) Fix a date not less than 20 days after the date of such notice 
within which the applicant or recipient may request of the responsible 
Department official that the matter be scheduled for hearing, or (2) 
advise the applicant or recipient that the matter in question has been 
set down for hearing at a stated time and place. The time and place so 
fixed shall be reasonable and shall be subject to change for cause. The 
complainant, if any, shall be advised of the time and place of the 
hearing. An applicant or recipient may waive a hearing and submit 
written information and argument for the record. The failure of an 
applicant or recipient to request a hearing under this paragraph (a) or 
to appear at a hearing for which a date has been set shall be deemed to 
be a waiver of the right to a hearing under section 602 of the Act and 
Sec.  1.8(c) and consent to the making

[[Page 14]]

of a decision on the basis of such information as is available.
    (b) Hearing procedures. Hearings shall be conducted in accordance 
with 24 CFR part 180.

[38 FR 17949, July 5, 1973, as amended at 61 FR 52217, Oct. 4, 1996]



Sec.  1.10  Effect on other regulations; forms and instructions.

    (a) Effect on other regulations. All regulations, orders, or like 
directions heretofore issued by any officer of the Department which 
impose requirements designed to prohibit any discrimination against 
persons on the ground of race, color, or national origin under any 
program or activity to which this part applies, and which authorize the 
suspension or termination of or refusal to grant or to continue Federal 
financial assistance to any applicant or recipient for failure to comply 
with such requirements, are hereby superseded to the extent that such 
discrimination is prohibited by this part, except that nothing in this 
part shall be deemed to relieve any person of any obligation assumed or 
imposed under any such superseded regulation, order, instruction, or 
like direction prior to January 3, 1965. Nothing in this part, however, 
shall be deemed to supersede any of the following (including future 
amendments thereof):
    (1) Executive Orders 11246 and 11375 and regulations issued 
thereunder, or
    (2) Executive Order 11063 and regulations issued thereunder, or any 
other order, regulations or instructions, insofar as such order, 
regulations, or instructions, prohibit discrimination on the ground of 
race, color, or national origin in any program or activity or situation 
to which this part is inapplicable, or prohibit discrimination on any 
other ground.
    (b) Forms and instructions. The responsible Department official 
shall assure that forms and detailed instructions and procedures for 
effectuating this part are issued and promptly made available to 
interested persons.
    (c) Supervision and coordination. The Secretary may from time to 
time assign to officials of the Department, or to officials of other 
departments or agencies of the Government with the consent of such 
department or agency, responsibilities in connection with the 
effectuation of the purposes of title VI of the Act and this part (other 
than responsibility for final decision as provided in Sec.  1.10), 
including the achievement of effective coordination and maximum 
uniformity within the Department and within the Executive Branch of the 
Government in the application of title VI and this part to similar 
programs or activities and in similar situations. Any action taken, 
determination made, or requirement imposed by an official of another 
department or agency acting pursuant to an assignment of responsibility 
under this paragraph shall have the same effect as though such action 
had been taken by the responsible official of this Department.

[38 FR 17949, July 5, 1973. Redesignated at 61 FR 52217, Oct. 4, 1996]



PART 3_NONDISCRIMINATION ON THE BASIS OF SEX IN EDUCATION PROGRAMS OR 
ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE--Table of Contents



                         Subpart A_Introduction

Sec.
3.100 Purpose and effective date.
3.105 Definitions.
3.110 Remedial and affirmative action and self-evaluation.
3.115 Assurance required.
3.120 Transfers of property.
3.125 Effect of other requirements.
3.130 Effect of employment opportunities.
3.135 Designation of responsible employee and adoption of grievance 
          procedures.
3.140 Dissemination of policy.

                           Subpart B_Coverage

3.200 Application.
3.205 Educational institutions and other entities controlled by 
          religious organizations.
3.210 Military and merchant marine educational institutions.
3.215 Membership practices of certain organizations.
3.220 Admissions.
3.225 Educational institutions eligible to submit transition plans.
3.230 Transition plans.

[[Page 15]]

3.235 Statutory amendments.

     Subpart C_Discrimination on the Basis of Sex in Admission and 
                         Recruitment Prohibited

3.300 Admission.
3.305 Preference in admission.
3.310 Recruitment.

 Subpart D_Discrimination on the Basis of Sex in Education Programs or 
                          Activities Prohibited

3.400 Education programs or activities.
3.405 Housing.
3.410 Comparable facilities.
3.415 Access to course offerings.
3.420 Access to schools operated by LEAs.
3.425 Counseling and use of appraisal and counseling materials.
3.430 Financial assistance.
3.435 Employment assistance to students.
3.440 Health and insurance benefits and services.
3.445 Marital or parental status.
3.450 Athletics.
3.455 Textbooks and curricular material.

Subpart E_Discrimination on the Basis of Sex in Employment in Education 
                    Programs or Activities Prohibited

3.500 Employment.
3.505 Employment criteria.
3.510 Recruitment.
3.515 Compensation.
3.520 Job classification and structure.
3.525 Fringe benefits.
3.530 Marital or parental status.
3.535 Effect of state or local law or other requirements.
3.540 Advertising.
3.545 Pre-employment inquiries.
3.550 Sex as a bona fide occupational qualification.

                          Subpart F_Procedures

3.600 Notice of covered programs.
3.605 Enforcement procedures.

    Authority: 20 U.S.C. 1681, 1682, 1683, 1685, 1686, 1687, 1688.

    Source: 65 FR 52865, 52879, Aug. 30, 2000, unless otherwise noted.



                         Subpart A_Introduction



Sec.  3.100  Purpose and effective date.

    The purpose of these Title IX regulations is to effectuate Title IX 
of the Education Amendments of 1972, as amended (except sections 904 and 
906 of those Amendments) (20 U.S.C. 1681, 1682, 1683, 1685, 1686, 1687, 
1688), which is designed to eliminate (with certain exceptions) 
discrimination on the basis of sex in any education program or activity 
receiving Federal financial assistance, whether or not such program or 
activity is offered or sponsored by an educational institution as 
defined in these Title IX regulations. The effective date of these Title 
IX regulations shall be September 29, 2000.



Sec.  3.105  Definitions.

    As used in these Title IX regulations, the term:
    Administratively separate unit means a school, department, or 
college of an educational institution (other than a local educational 
agency) admission to which is independent of admission to any other 
component of such institution.
    Admission means selection for part-time, full-time, special, 
associate, transfer, exchange, or any other enrollment, membership, or 
matriculation in or at an education program or activity operated by a 
recipient.
    Applicant means one who submits an application, request, or plan 
required to be approved by an official of the Federal agency that awards 
Federal financial assistance, or by a recipient, as a condition to 
becoming a recipient.
    Designated agency official means Assistant Secretary for Fair 
Housing and Equal Opportunity.
    Educational institution means a local educational agency (LEA) as 
defined by 20 U.S.C. 8801(18), a preschool, a private elementary or 
secondary school, or an applicant or recipient that is an institution of 
graduate higher education, an institution of undergraduate higher 
education, an institution of professional education, or an institution 
of vocational education, as defined in this section.
    Federal financial assistance means any of the following, when 
authorized or extended under a law administered by the Federal agency 
that awards such assistance:
    (1) A grant or loan of Federal financial assistance, including funds 
made available for:
    (i) The acquisition, construction, renovation, restoration, or 
repair of a building or facility or any portion thereof; and

[[Page 16]]

    (ii) Scholarships, loans, grants, wages, or other funds extended to 
any entity for payment to or on behalf of students admitted to that 
entity, or extended directly to such students for payment to that 
entity.
    (2) A grant of Federal real or personal property or any interest 
therein, including surplus property, and the proceeds of the sale or 
transfer of such property, if the Federal share of the fair market value 
of the property is not, upon such sale or transfer, properly accounted 
for to the Federal Government.
    (3) Provision of the services of Federal personnel.
    (4) Sale or lease of Federal property or any interest therein at 
nominal consideration, or at consideration reduced for the purpose of 
assisting the recipient or in recognition of public interest to be 
served thereby, or permission to use Federal property or any interest 
therein without consideration.
    (5) Any other contract, agreement, or arrangement that has as one of 
its purposes the provision of assistance to any education program or 
activity, except a contract of insurance or guaranty.
    Institution of graduate higher education means an institution that:
    (1) Offers academic study beyond the bachelor of arts or bachelor of 
science degree, whether or not leading to a certificate of any higher 
degree in the liberal arts and sciences;
    (2) Awards any degree in a professional field beyond the first 
professional degree (regardless of whether the first professional degree 
in such field is awarded by an institution of undergraduate higher 
education or professional education); or
    (3) Awards no degree and offers no further academic study, but 
operates ordinarily for the purpose of facilitating research by persons 
who have received the highest graduate degree in any field of study.
    Institution of professional education means an institution (except 
any institution of undergraduate higher education) that offers a program 
of academic study that leads to a first professional degree in a field 
for which there is a national specialized accrediting agency recognized 
by the Secretary of Education.
    Institution of undergraduate higher education means:
    (1) An institution offering at least two but less than four years of 
college-level study beyond the high school level, leading to a diploma 
or an associate degree, or wholly or principally creditable toward a 
baccalaureate degree; or
    (2) An institution offering academic study leading to a 
baccalaureate degree; or
    (3) An agency or body that certifies credentials or offers degrees, 
but that may or may not offer academic study.
    Institution of vocational education means a school or institution 
(except an institution of professional or graduate or undergraduate 
higher education) that has as its primary purpose preparation of 
students to pursue a technical, skilled, or semiskilled occupation or 
trade, or to pursue study in a technical field, whether or not the 
school or institution offers certificates, diplomas, or degrees and 
whether or not it offers full-time study.
    Recipient means any State or political subdivision thereof, or any 
instrumentality of a State or political subdivision thereof, any public 
or private agency, institution, or organization, or other entity, or any 
person, to whom Federal financial assistance is extended directly or 
through another recipient and that operates an education program or 
activity that receives such assistance, including any subunit, 
successor, assignee, or transferee thereof.
    Student means a person who has gained admission.
    Title IX means Title IX of the Education Amendments of 1972, Public 
Law 92-318, 86 Stat. 235, 373 (codified as amended at 20 U.S.C. 1681-
1688) (except sections 904 and 906 thereof), as amended by section 3 of 
Public Law 93-568, 88 Stat. 1855, by section 412 of the Education 
Amendments of 1976, Public Law 94-482, 90 Stat. 2234, and by Section 3 
of Public Law 100-259, 102 Stat. 28, 28-29 (20 U.S.C. 1681, 1682, 1683, 
1685, 1686, 1687, 1688).
    Title IX regulations means the provisions set forth at Sec. Sec.  
3.100 through 3.605.
    Transition plan means a plan subject to the approval of the 
Secretary of Education pursuant to section 901(a)(2) of the Education 
Amendments of 1972,

[[Page 17]]

20 U.S.C. 1681(a)(2), under which an educational institution operates in 
making the transition from being an educational institution that admits 
only students of one sex to being one that admits students of both sexes 
without discrimination.

[65 FR 52865, 52879, Aug. 30, 2000, as amended at 65 FR 52880, Aug. 30, 
2000]



Sec.  3.110  Remedial and affirmative action and self-evaluation.

    (a) Remedial action. If the designated agency official finds that a 
recipient has discriminated against persons on the basis of sex in an 
education program or activity, such recipient shall take such remedial 
action as the designated agency official deems necessary to overcome the 
effects of such discrimination.
    (b) Affirmative action. In the absence of a finding of 
discrimination on the basis of sex in an education program or activity, 
a recipient may take affirmative action consistent with law to overcome 
the effects of conditions that resulted in limited participation therein 
by persons of a particular sex. Nothing in these Title IX regulations 
shall be interpreted to alter any affirmative action obligations that a 
recipient may have under Executive Order 11246, 3 CFR, 1964-1965 Comp., 
p. 339; as amended by Executive Order 11375, 3 CFR, 1966-1970 Comp., p. 
684; as amended by Executive Order 11478, 3 CFR, 1966-1970 Comp., p. 
803; as amended by Executive Order 12086, 3 CFR, 1978 Comp., p. 230; as 
amended by Executive Order 12107, 3 CFR, 1978 Comp., p. 264.
    (c) Self-evaluation. Each recipient education institution shall, 
within one year of September 29, 2000:
    (1) Evaluate, in terms of the requirements of these Title IX 
regulations, its current policies and practices and the effects thereof 
concerning admission of students, treatment of students, and employment 
of both academic and non-academic personnel working in connection with 
the recipient's education program or activity;
    (2) Modify any of these policies and practices that do not or may 
not meet the requirements of these Title IX regulations; and
    (3) Take appropriate remedial steps to eliminate the effects of any 
discrimination that resulted or may have resulted from adherence to 
these policies and practices.
    (d) Availability of self-evaluation and related materials. 
Recipients shall maintain on file for at least three years following 
completion of the evaluation required under paragraph (c) of this 
section, and shall provide to the designated agency official upon 
request, a description of any modifications made pursuant to paragraph 
(c)(2) of this section and of any remedial steps taken pursuant to 
paragraph (c)(3) of this section.



Sec.  3.115  Assurance required.

    (a) General. Either at the application stage or the award stage, 
Federal agencies must ensure that applications for Federal financial 
assistance or awards of Federal financial assistance contain, be 
accompanied by, or be covered by a specifically identified assurance 
from the applicant or recipient, satisfactory to the designated agency 
official, that each education program or activity operated by the 
applicant or recipient and to which these Title IX regulations apply 
will be operated in compliance with these Title IX regulations. An 
assurance of compliance with these Title IX regulations shall not be 
satisfactory to the designated agency official if the applicant or 
recipient to whom such assurance applies fails to commit itself to take 
whatever remedial action is necessary in accordance with Sec.  3.110(a) 
to eliminate existing discrimination on the basis of sex or to eliminate 
the effects of past discrimination whether occurring prior to or 
subsequent to the submission to the designated agency official of such 
assurance.
    (b) Duration of obligation. (1) In the case of Federal financial 
assistance extended to provide real property or structures thereon, such 
assurance shall obligate the recipient or, in the case of a subsequent 
transfer, the transferee, for the period during which the real property 
or structures are used to provide an education program or activity.
    (2) In the case of Federal financial assistance extended to provide 
personal property, such assurance shall obligate the recipient for the 
period during

[[Page 18]]

which it retains ownership or possession of the property.
    (3) In all other cases such assurance shall obligate the recipient 
for the period during which Federal financial assistance is extended.
    (c) Form. (1) The assurances required by paragraph (a) of this 
section, which may be included as part of a document that addresses 
other assurances or obligations, shall include that the applicant or 
recipient will comply with all applicable Federal statutes relating to 
nondiscrimination. These include but are not limited to: Title IX of the 
Education Amendments of 1972, as amended (20 U.S.C. 1681-1683, 1685-
1688).
    (2) The designated agency official will specify the extent to which 
such assurances will be required of the applicant's or recipient's 
subgrantees, contractors, subcontractors, transferees, or successors in 
interest.



Sec.  3.120  Transfers of property.

    If a recipient sells or otherwise transfers property financed in 
whole or in part with Federal financial assistance to a transferee that 
operates any education program or activity, and the Federal share of the 
fair market value of the property is not upon such sale or transfer 
properly accounted for to the Federal Government, both the transferor 
and the transferee shall be deemed to be recipients, subject to the 
provisions of Sec. Sec.  3.205 through 3.235(a).



Sec.  3.125  Effect of other requirements.

    (a) Effect of other Federal provisions. The obligations imposed by 
these Title IX regulations are independent of, and do not alter, 
obligations not to discriminate on the basis of sex imposed by Executive 
Order 11246, 3 CFR, 1964-1965 Comp., p. 339; as amended by Executive 
Order 11375, 3 CFR, 1966-1970 Comp., p. 684; as amended by Executive 
Order 11478, 3 CFR, 1966-1970 Comp., p. 803; as amended by Executive 
Order 12087, 3 CFR, 1978 Comp., p. 230; as amended by Executive Order 
12107, 3 CFR, 1978 Comp., p. 264; sections 704 and 855 of the Public 
Health Service Act (42 U.S.C. 295m, 298b-2); Title VII of the Civil 
Rights Act of 1964 (42 U.S.C. 2000e et seq.); the Equal Pay Act of 1963 
(29 U.S.C. 206); and any other Act of Congress or Federal regulation.
    (b) Effect of State or local law or other requirements. The 
obligation to comply with these Title IX regulations is not obviated or 
alleviated by any State or local law or other requirement that would 
render any applicant or student ineligible, or limit the eligibility of 
any applicant or student, on the basis of sex, to practice any 
occupation or profession.
    (c) Effect of rules or regulations of private organizations. The 
obligation to comply with these Title IX regulations is not obviated or 
alleviated by any rule or regulation of any organization, club, athletic 
or other league, or association that would render any applicant or 
student ineligible to participate or limit the eligibility or 
participation of any applicant or student, on the basis of sex, in any 
education program or activity operated by a recipient and that receives 
Federal financial assistance.



Sec.  3.130  Effect of employment opportunities.

    The obligation to comply with these Title IX regulations is not 
obviated or alleviated because employment opportunities in any 
occupation or profession are or may be more limited for members of one 
sex than for members of the other sex.



Sec.  3.135  Designation of responsible employee and adoption of 
grievance procedures.

    (a) Designation of responsible employee. Each recipient shall 
designate at least one employee to coordinate its efforts to comply with 
and carry out its responsibilities under these Title IX regulations, 
including any investigation of any complaint communicated to such 
recipient alleging its noncompliance with these Title IX regulations or 
alleging any actions that would be prohibited by these Title IX 
regulations. The recipient shall notify all its students and employees 
of the name, office address, and telephone number of the employee or 
employees appointed pursuant to this paragraph.
    (b) Complaint procedure of recipient. A recipient shall adopt and 
publish grievance procedures providing for prompt and equitable 
resolution of student and

[[Page 19]]

employee complaints alleging any action that would be prohibited by 
these Title IX regulations.



Sec.  3.140  Dissemination of policy.

    (a) Notification of policy. (1) Each recipient shall implement 
specific and continuing steps to notify applicants for admission and 
employment, students and parents of elementary and secondary school 
students, employees, sources of referral of applicants for admission and 
employment, and all unions or professional organizations holding 
collective bargaining or professional agreements with the recipient, 
that it does not discriminate on the basis of sex in the educational 
programs or activities that it operates, and that it is required by 
Title IX and these Title IX regulations not to discriminate in such a 
manner. Such notification shall contain such information, and be made in 
such manner, as the designated agency official finds necessary to 
apprise such persons of the protections against discrimination assured 
them by Title IX and these Title IX regulations, but shall state at 
least that the requirement not to discriminate in education programs or 
activities extends to employment therein, and to admission thereto 
unless Sec. Sec.  3.300 through 3.310 do not apply to the recipient, and 
that inquiries concerning the application of Title IX and these Title IX 
regulations to such recipient may be referred to the employee designated 
pursuant to Sec.  3.135, or to the designated agency official.
    (2) Each recipient shall make the initial notification required by 
paragraph (a)(1) of this section within 90 days of September 29, 2000 or 
of the date these Title IX regulations first apply to such recipient, 
whichever comes later, which notification shall include publication in:
    (i) Newspapers and magazines operated by such recipient or by 
student, alumnae, or alumni groups for or in connection with such 
recipient; and
    (ii) Memoranda or other written communications distributed to every 
student and employee of such recipient.
    (b) Publications. (1) Each recipient shall prominently include a 
statement of the policy described in paragraph (a) of this section in 
each announcement, bulletin, catalog, or application form that it makes 
available to any person of a type, described in paragraph (a) of this 
section, or which is otherwise used in connection with the recruitment 
of students or employees.
    (2) A recipient shall not use or distribute a publication of the 
type described in paragraph (b)(1) of this section that suggests, by 
text or illustration, that such recipient treats applicants, students, 
or employees differently on the basis of sex except as such treatment is 
permitted by these Title IX regulations.
    (c) Distribution. Each recipient shall distribute without 
discrimination on the basis of sex each publication described in 
paragraph (b)(1) of this section, and shall apprise each of its 
admission and employment recruitment representatives of the policy of 
nondiscrimination described in paragraph (a) of this section, and shall 
require such representatives to adhere to such policy.



                           Subpart B_Coverage



Sec.  3.200  Application.

    Except as provided in Sec. Sec.  3.205 through 3.235(a), these Title 
IX regulations apply to every recipient and to each education program or 
activity operated by such recipient that receives Federal financial 
assistance.



Sec.  3.205  Educational institutions and other entities controlled
by religious organizations.

    (a) Exemption. These Title IX regulations do not apply to any 
operation of an educational institution or other entity that is 
controlled by a religious organization to the extent that application of 
these Title IX regulations would not be consistent with the religious 
tenets of such organization.
    (b) Exemption claims. An educational institution or other entity 
that wishes to claim the exemption set forth in paragraph (a) of this 
section shall do so by submitting in writing to the designated agency 
official a statement by the highest-ranking official of the institution, 
identifying the provisions of these Title IX regulations that conflict 
with a specific tenet of the religious organization.

[[Page 20]]



Sec.  3.210  Military and merchant marine educational institutions.

    These Title IX regulations do not apply to an educational 
institution whose primary purpose is the training of individuals for a 
military service of the United States or for the merchant marine.



Sec.  3.215  Membership practices of certain organizations.

    (a) Social fraternities and sororities. These Title IX regulations 
do not apply to the membership practices of social fraternities and 
sororities that are exempt from taxation under section 501(a) of the 
Internal Revenue Code of 1954, 26 U.S.C. 501(a), the active membership 
of which consists primarily of students in attendance at institutions of 
higher education.
    (b) YMCA, YWCA, Girl Scouts, Boy Scouts, and Camp Fire Girls. These 
Title IX regulations do not apply to the membership practices of the 
Young Men's Christian Association (YMCA), the Young Women's Christian 
Association (YWCA), the Girl Scouts, the Boy Scouts, and Camp Fire 
Girls.
    (c) Voluntary youth service organizations. These Title IX 
regulations do not apply to the membership practices of a voluntary 
youth service organization that is exempt from taxation under section 
501(a) of the Internal Revenue Code of 1954, 26 U.S.C. 501(a), and the 
membership of which has been traditionally limited to members of one sex 
and principally to persons of less than nineteen years of age.



Sec.  3.220  Admissions.

    (a) Admissions to educational institutions prior to June 24, 1973, 
are not covered by these Title IX regulations.
    (b) Administratively separate units. For the purposes only of this 
section, Sec. Sec.  3.225 and 3.230, and Sec. Sec.  3.300 through 3.310, 
each administratively separate unit shall be deemed to be an educational 
institution.
    (c) Application of Sec. Sec.  3.300 through 3.310. Except as 
provided in paragraphs (d) and (e) of this section, Sec. Sec.  3.300 
through 3.310 apply to each recipient. A recipient to which Sec. Sec.  
3.300 through 3.310 apply shall not discriminate on the basis of sex in 
admission or recruitment in violation of Sec. Sec.  3.300 through 3.310.
    (d) Educational institutions. Except as provided in paragraph (e) of 
this section as to recipients that are educational institutions, 
Sec. Sec.  3.300 through 3.310 apply only to institutions of vocational 
education, professional education, graduate higher education, and public 
institutions of undergraduate higher education.
    (e) Public institutions of undergraduate higher education. 
Sec. Sec.  3.300 through 3.310 do not apply to any public institution of 
undergraduate higher education that traditionally and continually from 
its establishment has had a policy of admitting students of only one 
sex.



Sec.  3.225  Educational institutions eligible to submit transition plans.

    (a) Application. This section applies to each educational 
institution to which Sec. Sec.  3.300 through 3.310 apply that:
    (1) Admitted students of only one sex as regular students as of June 
23, 1972; or
    (2) Admitted students of only one sex as regular students as of June 
23, 1965, but thereafter admitted, as regular students, students of the 
sex not admitted prior to June 23, 1965.
    (b) Provision for transition plans. An educational institution to 
which this section applies shall not discriminate on the basis of sex in 
admission or recruitment in violation of Sec. Sec.  3.300 through 3.310.



Sec.  3.230  Transition plans.

    (a) Submission of plans. An institution to which Sec.  3.225 applies 
and that is composed of more than one administratively separate unit may 
submit either a single transition plan applicable to all such units, or 
a separate transition plan applicable to each such unit.
    (b) Content of plans. In order to be approved by the Secretary of 
Education, a transition plan shall:
    (1) State the name, address, and Federal Interagency Committee on 
Education Code of the educational institution submitting such plan, the 
administratively separate units to which the plan is applicable, and the 
name, address, and telephone number of the person to whom questions 
concerning the plan may be addressed. The person who

[[Page 21]]

submits the plan shall be the chief administrator or president of the 
institution, or another individual legally authorized to bind the 
institution to all actions set forth in the plan.
    (2) State whether the educational institution or administratively 
separate unit admits students of both sexes as regular students and, if 
so, when it began to do so.
    (3) Identify and describe with respect to the educational 
institution or administratively separate unit any obstacles to admitting 
students without discrimination on the basis of sex.
    (4) Describe in detail the steps necessary to eliminate as soon as 
practicable each obstacle so identified and indicate the schedule for 
taking these steps and the individual directly responsible for their 
implementation.
    (5) Include estimates of the number of students, by sex, expected to 
apply for, be admitted to, and enter each class during the period 
covered by the plan.
    (c) Nondiscrimination. No policy or practice of a recipient to which 
Sec.  3.225 applies shall result in treatment of applicants to or 
students of such recipient in violation of Sec. Sec.  3.300 through 
3.310 unless such treatment is necessitated by an obstacle identified in 
paragraph (b)(3) of this section and a schedule for eliminating that 
obstacle has been provided as required by paragraph (b)(4) of this 
section.
    (d) Effects of past exclusion. To overcome the effects of past 
exclusion of students on the basis of sex, each educational institution 
to which Sec.  3.225 applies shall include in its transition plan, and 
shall implement, specific steps designed to encourage individuals of the 
previously excluded sex to apply for admission to such institution. Such 
steps shall include instituting recruitment programs that emphasize the 
institution's commitment to enrolling students of the sex previously 
excluded.



Sec.  3.235  Statutory amendments.

    (a) This section, which applies to all provisions of these Title IX 
regulations, addresses statutory amendments to Title IX.
    (b) These Title IX regulations shall not apply to or preclude:
    (1) Any program or activity of the American Legion undertaken in 
connection with the organization or operation of any Boys State 
conference, Boys Nation conference, Girls State conference, or Girls 
Nation conference;
    (2) Any program or activity of a secondary school or educational 
institution specifically for:
    (i) The promotion of any Boys State conference, Boys Nation 
conference, Girls State conference, or Girls Nation conference; or
    (ii) The selection of students to attend any such conference;
    (3) Father-son or mother-daughter activities at an educational 
institution or in an education program or activity, but if such 
activities are provided for students of one sex, opportunities for 
reasonably comparable activities shall be provided to students of the 
other sex;
    (4) Any scholarship or other financial assistance awarded by an 
institution of higher education to an individual because such individual 
has received such award in a single-sex pageant based upon a combination 
of factors related to the individual's personal appearance, poise, and 
talent. The pageant, however, must comply with other nondiscrimination 
provisions of Federal law.
    (c) Program or activity or program means:
    (1) All of the operations of any entity described in paragraphs 
(c)(1)(i) through (iv) of this section, any part of which is extended 
Federal financial assistance:
    (i)(A) A department, agency, special purpose district, or other 
instrumentality of a State or of a local government; or
    (B) The entity of such State or local government that distributes 
such assistance and each such department or agency (and each other State 
or local government entity) to which the assistance is extended, in the 
case of assistance to a State or local government;
    (ii)(A) A college, university, or other postsecondary institution, 
or a public system of higher education; or
    (B) A local educational agency (as defined in section 8801 of title 
20), system

[[Page 22]]

of vocational education, or other school system;
    (iii)(A) An entire corporation, partnership, or other private 
organization, or an entire sole proprietorship--
    (1) If assistance is extended to such corporation, partnership, 
private organization, or sole proprietorship as a whole; or
    (2) Which is principally engaged in the business of providing 
education, health care, housing, social services, or parks and 
recreation; or
    (B) The entire plant or other comparable, geographically separate 
facility to which Federal financial assistance is extended, in the case 
of any other corporation, partnership, private organization, or sole 
proprietorship; or
    (iv) Any other entity that is established by two or more of the 
entities described in paragraphs (c)(1)(i), (ii), or (iii) of this 
section.
    (2)(i) Program or activity does not include any operation of an 
entity that is controlled by a religious organization if the application 
of 20 U.S.C. 1681 to such operation would not be consistent with the 
religious tenets of such organization.
    (ii) For example, all of the operations of a college, university, or 
other postsecondary institution, including but not limited to 
traditional educational operations, faculty and student housing, campus 
shuttle bus service, campus restaurants, the bookstore, and other 
commercial activities are part of a ``program or activity'' subject to 
these Title IX regulations if the college, university, or other 
institution receives Federal financial assistance.
    (d)(1) Nothing in these Title IX regulations shall be construed to 
require or prohibit any person, or public or private entity, to provide 
or pay for any benefit or service, including the use of facilities, 
related to an abortion. Medical procedures, benefits, services, and the 
use of facilities, necessary to save the life of a pregnant woman or to 
address complications related to an abortion are not subject to this 
section.
    (2) Nothing in this section shall be construed to permit a penalty 
to be imposed on any person or individual because such person or 
individual is seeking or has received any benefit or service related to 
a legal abortion. Accordingly, subject to paragraph (d)(1) of this 
section, no person shall be excluded from participation in, be denied 
the benefits of, or be subjected to discrimination under any academic, 
extracurricular, research, occupational training, employment, or other 
educational program or activity operated by a recipient that receives 
Federal financial assistance because such individual has sought or 
received, or is seeking, a legal abortion, or any benefit or service 
related to a legal abortion.



     Subpart C_Discrimination on the Basis of Sex in Admission and 
                         Recruitment Prohibited



Sec.  3.300  Admission.

    (a) General. No person shall, on the basis of sex, be denied 
admission, or be subjected to discrimination in admission, by any 
recipient to which Sec. Sec.  3.300 through 3.310 apply, except as 
provided in Sec. Sec.  3.225 and 3.230.
    (b) Specific prohibitions. (1) In determining whether a person 
satisfies any policy or criterion for admission, or in making any offer 
of admission, a recipient to which Sec. Sec.  3.300 through 3.310 apply 
shall not:
    (i) Give preference to one person over another on the basis of sex, 
by ranking applicants separately on such basis, or otherwise;
    (ii) Apply numerical limitations upon the number or proportion of 
persons of either sex who may be admitted; or
    (iii) Otherwise treat one individual differently from another on the 
basis of sex.
    (2) A recipient shall not administer or operate any test or other 
criterion for admission that has a disproportionately adverse effect on 
persons on the basis of sex unless the use of such test or criterion is 
shown to predict validly success in the education program or activity in 
question and alternative tests or criteria that do not have such a 
disproportionately adverse effect are shown to be unavailable.
    (c) Prohibitions relating to marital or parental status. In 
determining whether a person satisfies any policy or criterion for 
admission, or in making any offer of admission, a recipient to which 
Sec. Sec.  3.300 through 3.310 apply:

[[Page 23]]

    (1) Shall not apply any rule concerning the actual or potential 
parental, family, or marital status of a student or applicant that 
treats persons differently on the basis of sex;
    (2) Shall not discriminate against or exclude any person on the 
basis of pregnancy, childbirth, termination of pregnancy, or recovery 
therefrom, or establish or follow any rule or practice that so 
discriminates or excludes;
    (3) Subject to Sec.  3.235(d), shall treat disabilities related to 
pregnancy, childbirth, termination of pregnancy, or recovery therefrom 
in the same manner and under the same policies as any other temporary 
disability or physical condition; and
    (4) Shall not make pre-admission inquiry as to the marital status of 
an applicant for admission, including whether such applicant is ``Miss'' 
or ``Mrs.'' A recipient may make pre-admission inquiry as to the sex of 
an applicant for admission, but only if such inquiry is made equally of 
such applicants of both sexes and if the results of such inquiry are not 
used in connection with discrimination prohibited by these Title IX 
regulations.



Sec.  3.305  Preference in admission.

    A recipient to which Sec. Sec.  3.300 through 3.310 apply shall not 
give preference to applicants for admission, on the basis of attendance 
at any educational institution or other school or entity that admits as 
students only or predominantly members of one sex, if the giving of such 
preference has the effect of discriminating on the basis of sex in 
violation of Sec. Sec.  3.300 through 3.310.



Sec.  3.310  Recruitment.

    (a) Nondiscriminatory recruitment. A recipient to which Sec. Sec.  
3.300 through 3.310 apply shall not discriminate on the basis of sex in 
the recruitment and admission of students. A recipient may be required 
to undertake additional recruitment efforts for one sex as remedial 
action pursuant to Sec.  3.110(a), and may choose to undertake such 
efforts as affirmative action pursuant to Sec.  3.110(b).
    (b) Recruitment at certain institutions. A recipient to which 
Sec. Sec.  3.300 through 3.310 apply shall not recruit primarily or 
exclusively at educational institutions, schools, or entities that admit 
as students only or predominantly members of one sex, if such actions 
have the effect of discriminating on the basis of sex in violation of 
Sec. Sec.  3.300 through 3.310.



 Subpart D_Discrimination on the Basis of Sex in Education Programs or 
                          Activities Prohibited



Sec.  3.400  Education programs or activities.

    (a) General. Except as provided elsewhere in these Title IX 
regulations, no person shall, on the basis of sex, be excluded from 
participation in, be denied the benefits of, or be subjected to 
discrimination under any academic, extracurricular, research, 
occupational training, or other education program or activity operated 
by a recipient that receives Federal financial assistance. Sections 
3.400 through 3.455 do not apply to actions of a recipient in connection 
with admission of its students to an education program or activity of a 
recipient to which Sec. Sec.  3.300 through 3.310 do not apply, or an 
entity, not a recipient, to which Sec. Sec.  3.300 through 3.310 would 
not apply if the entity were a recipient.
    (b) Specific prohibitions. Except as provided in Sec. Sec.  3.400 
through 3.455, in providing any aid, benefit, or service to a student, a 
recipient shall not, on the basis of sex:
    (1) Treat one person differently from another in determining whether 
such person satisfies any requirement or condition for the provision of 
such aid, benefit, or service;
    (2) Provide different aid, benefits, or services or provide aid, 
benefits, or services in a different manner;
    (3) Deny any person any such aid, benefit, or service;
    (4) Subject any person to separate or different rules of behavior, 
sanctions, or other treatment;
    (5) Apply any rule concerning the domicile or residence of a student 
or applicant, including eligibility for in-state fees and tuition;
    (6) Aid or perpetuate discrimination against any person by providing 
significant assistance to any agency, organization, or person that 
discriminates on the basis of sex in providing

[[Page 24]]

any aid, benefit, or service to students or employees;
    (7) Otherwise limit any person in the enjoyment of any right, 
privilege, advantage, or opportunity.
    (c) Assistance administered by a recipient educational institution 
to study at a foreign institution. A recipient educational institution 
may administer or assist in the administration of scholarships, 
fellowships, or other awards established by foreign or domestic wills, 
trusts, or similar legal instruments, or by acts of foreign governments 
and restricted to members of one sex, that are designed to provide 
opportunities to study abroad, and that are awarded to students who are 
already matriculating at or who are graduates of the recipient 
institution; Provided, that a recipient educational institution that 
administers or assists in the administration of such scholarships, 
fellowships, or other awards that are restricted to members of one sex 
provides, or otherwise makes available, reasonable opportunities for 
similar studies for members of the other sex. Such opportunities may be 
derived from either domestic or foreign sources.
    (d) Aids, benefits or services not provided by recipient. (1) This 
paragraph (d) applies to any recipient that requires participation by 
any applicant, student, or employee in any education program or activity 
not operated wholly by such recipient, or that facilitates, permits, or 
considers such participation as part of or equivalent to an education 
program or activity operated by such recipient, including participation 
in educational consortia and cooperative employment and student-teaching 
assignments.
    (2) Such recipient:
    (i) Shall develop and implement a procedure designed to assure 
itself that the operator or sponsor of such other education program or 
activity takes no action affecting any applicant, student, or employee 
of such recipient that these Title IX regulations would prohibit such 
recipient from taking; and
    (ii) Shall not facilitate, require, permit, or consider such 
participation if such action occurs.



Sec.  3.405  Housing.

    (a) Generally. A recipient shall not, on the basis of sex, apply 
different rules or regulations, impose different fees or requirements, 
or offer different services or benefits related to housing, except as 
provided in this section (including housing provided only to married 
students).
    (b) Housing provided by recipient. (1) A recipient may provide 
separate housing on the basis of sex.
    (2) Housing provided by a recipient to students of one sex, when 
compared to that provided to students of the other sex, shall be as a 
whole:
    (i) Proportionate in quantity to the number of students of that sex 
applying for such housing; and
    (ii) Comparable in quality and cost to the student.
    (c) Other housing. (1) A recipient shall not, on the basis of sex, 
administer different policies or practices concerning occupancy by its 
students of housing other than that provided by such recipient.
    (2)(i) A recipient which, through solicitation, listing, approval of 
housing, or otherwise, assists any agency, organization, or person in 
making housing available to any of its students, shall take such 
reasonable action as may be necessary to assure itself that such housing 
as is provided to students of one sex, when compared to that provided to 
students of the other sex, is as a whole:
    (A) Proportionate in quantity; and
    (B) Comparable in quality and cost to the student.
    (ii) A recipient may render such assistance to any agency, 
organization, or person that provides all or part of such housing to 
students of only one sex.



Sec.  3.410  Comparable facilities.

    A recipient may provide separate toilet, locker room, and shower 
facilities on the basis of sex, but such facilities provided for 
students of one sex shall be comparable to such facilities provided for 
students of the other sex.



Sec.  3.415  Access to course offerings.

    (a) A recipient shall not provide any course or otherwise carry out 
any of its

[[Page 25]]

education program or activity separately on the basis of sex, or require 
or refuse participation therein by any of its students on such basis, 
including health, physical education, industrial, business, vocational, 
technical, home economics, music, and adult education courses.
    (b)(1) With respect to classes and activities in physical education 
at the elementary school level, the recipient shall comply fully with 
this section as expeditiously as possible but in no event later than one 
year from September 29, 2000. With respect to physical education classes 
and activities at the secondary and post-secondary levels, the recipient 
shall comply fully with this section as expeditiously as possible but in 
no event later than three years from September 29, 2000.
    (2) This section does not prohibit grouping of students in physical 
education classes and activities by ability as assessed by objective 
standards of individual performance developed and applied without regard 
to sex.
    (3) This section does not prohibit separation of students by sex 
within physical education classes or activities during participation in 
wrestling, boxing, rugby, ice hockey, football, basketball, and other 
sports the purpose or major activity of which involves bodily contact.
    (4) Where use of a single standard of measuring skill or progress in 
a physical education class has an adverse effect on members of one sex, 
the recipient shall use appropriate standards that do not have such 
effect.
    (5) Portions of classes in elementary and secondary schools, or 
portions of education programs or activities, that deal exclusively with 
human sexuality may be conducted in separate sessions for boys and 
girls.
    (6) Recipients may make requirements based on vocal range or quality 
that may result in a chorus or choruses of one or predominantly one sex.



Sec.  3.420  Access to schools operated by LEAs.

    A recipient that is a local educational agency shall not, on the 
basis of sex, exclude any person from admission to:
    (a) Any institution of vocational education operated by such 
recipient; or
    (b) Any other school or educational unit operated by such recipient, 
unless such recipient otherwise makes available to such person, pursuant 
to the same policies and criteria of admission, courses, services, and 
facilities comparable to each course, service, and facility offered in 
or through such schools.



Sec.  3.425  Counseling and use of appraisal and counseling materials.

    (a) Counseling. A recipient shall not discriminate against any 
person on the basis of sex in the counseling or guidance of students or 
applicants for admission.
    (b) Use of appraisal and counseling materials. A recipient that uses 
testing or other materials for appraising or counseling students shall 
not use different materials for students on the basis of their sex or 
use materials that permit or require different treatment of students on 
such basis unless such different materials cover the same occupations 
and interest areas and the use of such different materials is shown to 
be essential to eliminate sex bias. Recipients shall develop and use 
internal procedures for ensuring that such materials do not discriminate 
on the basis of sex. Where the use of a counseling test or other 
instrument results in a substantially disproportionate number of members 
of one sex in any particular course of study or classification, the 
recipient shall take such action as is necessary to assure itself that 
such disproportion is not the result of discrimination in the instrument 
or its application.
    (c) Disproportion in classes. Where a recipient finds that a 
particular class contains a substantially disproportionate number of 
individuals of one sex, the recipient shall take such action as is 
necessary to assure itself that such disproportion is not the result of 
discrimination on the basis of sex in counseling or appraisal materials 
or by counselors.



Sec.  3.430  Financial assistance.

    (a) General. Except as provided in paragraphs (b) and (c) of this 
section,

[[Page 26]]

in providing financial assistance to any of its students, a recipient 
shall not:
    (1) On the basis of sex, provide different amounts or types of such 
assistance, limit eligibility for such assistance that is of any 
particular type or source, apply different criteria, or otherwise 
discriminate;
    (2) Through solicitation, listing, approval, provision of 
facilities, or other services, assist any foundation, trust, agency, 
organization, or person that provides assistance to any of such 
recipient's students in a manner that discriminates on the basis of sex; 
or
    (3) Apply any rule or assist in application of any rule concerning 
eligibility for such assistance that treats persons of one sex 
differently from persons of the other sex with regard to marital or 
parental status.
    (b) Financial aid established by certain legal instruments. (1) A 
recipient may administer or assist in the administration of 
scholarships, fellowships, or other forms of financial assistance 
established pursuant to domestic or foreign wills, trusts, bequests, or 
similar legal instruments or by acts of a foreign government that 
require that awards be made to members of a particular sex specified 
therein; Provided, that the overall effect of the award of such sex-
restricted scholarships, fellowships, and other forms of financial 
assistance does not discriminate on the basis of sex.
    (2) To ensure nondiscriminatory awards of assistance as required in 
paragraph (b)(1) of this section, recipients shall develop and use 
procedures under which:
    (i) Students are selected for award of financial assistance on the 
basis of nondiscriminatory criteria and not on the basis of availability 
of funds restricted to members of a particular sex;
    (ii) An appropriate sex-restricted scholarship, fellowship, or other 
form of financial assistance is allocated to each student selected under 
paragraph (b)(2)(i) of this section; and
    (iii) No student is denied the award for which he or she was 
selected under paragraph (b)(2)(i) of this section because of the 
absence of a scholarship, fellowship, or other form of financial 
assistance designated for a member of that student's sex.
    (c) Athletic scholarships. (1) To the extent that a recipient awards 
athletic scholarships or grants-in-aid, it must provide reasonable 
opportunities for such awards for members of each sex in proportion to 
the number of students of each sex participating in interscholastic or 
intercollegiate athletics.
    (2) A recipient may provide separate athletic scholarships or 
grants-in-aid for members of each sex as part of separate athletic teams 
for members of each sex to the extent consistent with this paragraph (c) 
and Sec.  3.450.



Sec.  3.435  Employment assistance to students.

    (a) Assistance by recipient in making available outside employment. 
A recipient that assists any agency, organization, or person in making 
employment available to any of its students:
    (1) Shall assure itself that such employment is made available 
without discrimination on the basis of sex; and
    (2) Shall not render such services to any agency, organization, or 
person that discriminates on the basis of sex in its employment 
practices.
    (b) Employment of students by recipients. A recipient that employs 
any of its students shall not do so in a manner that violates Sec. Sec.  
3.500 through 3.550.



Sec.  3.440  Health and insurance benefits and services.

    Subject to Sec.  3.235(d), in providing a medical, hospital, 
accident, or life insurance benefit, service, policy, or plan to any of 
its students, a recipient shall not discriminate on the basis of sex, or 
provide such benefit, service, policy, or plan in a manner that would 
violate Sec. Sec.  3.500 through 3.550 if it were provided to employees 
of the recipient. This section shall not prohibit a recipient from 
providing any benefit or service that may be used by a different 
proportion of students of one sex than of the other, including family 
planning services. However, any recipient that provides full coverage 
health service shall provide gynecological care.



Sec.  3.445  Marital or parental status.

    (a) Status generally. A recipient shall not apply any rule 
concerning a student's actual or potential parental,

[[Page 27]]

family, or marital status that treats students differently on the basis 
of sex.
    (b) Pregnancy and related conditions. (1) A recipient shall not 
discriminate against any student, or exclude any student from its 
education program or activity, including any class or extracurricular 
activity, on the basis of such student's pregnancy, childbirth, false 
pregnancy, termination of pregnancy, or recovery therefrom, unless the 
student requests voluntarily to participate in a separate portion of the 
program or activity of the recipient.
    (2) A recipient may require such a student to obtain the 
certification of a physician that the student is physically and 
emotionally able to continue participation as long as such a 
certification is required of all students for other physical or 
emotional conditions requiring the attention of a physician.
    (3) A recipient that operates a portion of its education program or 
activity separately for pregnant students, admittance to which is 
completely voluntary on the part of the student as provided in paragraph 
(b)(1) of this section, shall ensure that the separate portion is 
comparable to that offered to non-pregnant students.
    (4) Subject to Sec.  3.235(d), a recipient shall treat pregnancy, 
childbirth, false pregnancy, termination of pregnancy and recovery 
therefrom in the same manner and under the same policies as any other 
temporary disability with respect to any medical or hospital benefit, 
service, plan, or policy that such recipient administers, operates, 
offers, or participates in with respect to students admitted to the 
recipient's educational program or activity.
    (5) In the case of a recipient that does not maintain a leave policy 
for its students, or in the case of a student who does not otherwise 
qualify for leave under such a policy, a recipient shall treat 
pregnancy, childbirth, false pregnancy, termination of pregnancy, and 
recovery therefrom as a justification for a leave of absence for as long 
a period of time as is deemed medically necessary by the student's 
physician, at the conclusion of which the student shall be reinstated to 
the status that she held when the leave began.



Sec.  3.450  Athletics.

    (a) General. No person shall, on the basis of sex, be excluded from 
participation in, be denied the benefits of, be treated differently from 
another person, or otherwise be discriminated against in any 
interscholastic, intercollegiate, club, or intramural athletics offered 
by a recipient, and no recipient shall provide any such athletics 
separately on such basis.
    (b) Separate teams. Notwithstanding the requirements of paragraph 
(a) of this section, a recipient may operate or sponsor separate teams 
for members of each sex where selection for such teams is based upon 
competitive skill or the activity involved is a contact sport. However, 
where a recipient operates or sponsors a team in a particular sport for 
members of one sex but operates or sponsors no such team for members of 
the other sex, and athletic opportunities for members of that sex have 
previously been limited, members of the excluded sex must be allowed to 
try out for the team offered unless the sport involved is a contact 
sport. For the purposes of these Title IX regulations, contact sports 
include boxing, wrestling, rugby, ice hockey, football, basketball, and 
other sports the purpose or major activity of which involves bodily 
contact.
    (c) Equal opportunity. (1) A recipient that operates or sponsors 
interscholastic, intercollegiate, club, or intramural athletics shall 
provide equal athletic opportunity for members of both sexes. In 
determining whether equal opportunities are available, the designated 
agency official will consider, among other factors:
    (i) Whether the selection of sports and levels of competition 
effectively accommodate the interests and abilities of members of both 
sexes;
    (ii) The provision of equipment and supplies;
    (iii) Scheduling of games and practice time;
    (iv) Travel and per diem allowance;
    (v) Opportunity to receive coaching and academic tutoring;
    (vi) Assignment and compensation of coaches and tutors;
    (vii) Provision of locker rooms, practice, and competitive 
facilities;

[[Page 28]]

    (viii) Provision of medical and training facilities and services;
    (ix) Provision of housing and dining facilities and services;
    (x) Publicity.
    (2) For purposes of paragraph (c)(1) of this section, unequal 
aggregate expenditures for members of each sex or unequal expenditures 
for male and female teams if a recipient operates or sponsors separate 
teams will not constitute noncompliance with this section, but the 
designated agency official may consider the failure to provide necessary 
funds for teams for one sex in assessing equality of opportunity for 
members of each sex.
    (d) Adjustment period. A recipient that operates or sponsors 
interscholastic, intercollegiate, club, or intramural athletics at the 
elementary school level shall comply fully with this section as 
expeditiously as possible but in no event later than one year from 
September 29, 2000. A recipient that operates or sponsors 
interscholastic, intercollegiate, club, or intramural athletics at the 
secondary or postsecondary school level shall comply fully with this 
section as expeditiously as possible but in no event later than three 
years from September 29, 2000.



Sec.  3.455  Textbooks and curricular material.

    Nothing in these Title IX regulations shall be interpreted as 
requiring or prohibiting or abridging in any way the use of particular 
textbooks or curricular materials.



Subpart E_Discrimination on the Basis of Sex in Employment in Education 
                    Programs or Activities Prohibited



Sec.  3.500  Employment.

    (a) General. (1) No person shall, on the basis of sex, be excluded 
from participation in, be denied the benefits of, or be subjected to 
discrimination in employment, or recruitment, consideration, or 
selection therefor, whether full-time or part-time, under any education 
program or activity operated by a recipient that receives Federal 
financial assistance.
    (2) A recipient shall make all employment decisions in any education 
program or activity operated by such recipient in a nondiscriminatory 
manner and shall not limit, segregate, or classify applicants or 
employees in any way that could adversely affect any applicant's or 
employee's employment opportunities or status because of sex.
    (3) A recipient shall not enter into any contractual or other 
relationship which directly or indirectly has the effect of subjecting 
employees or students to discrimination prohibited by Sec. Sec.  3.500 
through 3.550, including relationships with employment and referral 
agencies, with labor unions, and with organizations providing or 
administering fringe benefits to employees of the recipient.
    (4) A recipient shall not grant preferences to applicants for 
employment on the basis of attendance at any educational institution or 
entity that admits as students only or predominantly members of one sex, 
if the giving of such preferences has the effect of discriminating on 
the basis of sex in violation of these Title IX regulations.
    (b) Application. The provisions of Sec. Sec.  3.500 through 3.550 
apply to:
    (1) Recruitment, advertising, and the process of application for 
employment;
    (2) Hiring, upgrading, promotion, consideration for and award of 
tenure, demotion, transfer, layoff, termination, application of nepotism 
policies, right of return from layoff, and rehiring;
    (3) Rates of pay or any other form of compensation, and changes in 
compensation;
    (4) Job assignments, classifications, and structure, including 
position descriptions, lines of progression, and seniority lists;
    (5) The terms of any collective bargaining agreement;
    (6) Granting and return from leaves of absence, leave for pregnancy, 
childbirth, false pregnancy, termination of pregnancy, leave for persons 
of either sex to care for children or dependents, or any other leave;
    (7) Fringe benefits available by virtue of employment, whether or 
not administered by the recipient;
    (8) Selection and financial support for training, including 
apprenticeship, professional meetings, conferences, and other related 
activities, selection for

[[Page 29]]

tuition assistance, selection for sabbaticals and leaves of absence to 
pursue training;
    (9) Employer-sponsored activities, including social or recreational 
programs; and
    (10) Any other term, condition, or privilege of employment.



Sec.  3.505  Employment criteria.

    A recipient shall not administer or operate any test or other 
criterion for any employment opportunity that has a disproportionately 
adverse effect on persons on the basis of sex unless:
    (a) Use of such test or other criterion is shown to predict validly 
successful performance in the position in question; and
    (b) Alternative tests or criteria for such purpose, which do not 
have such disproportionately adverse effect, are shown to be 
unavailable.



Sec.  3.510  Recruitment.

    (a) Nondiscriminatory recruitment and hiring. A recipient shall not 
discriminate on the basis of sex in the recruitment and hiring of 
employees. Where a recipient has been found to be presently 
discriminating on the basis of sex in the recruitment or hiring of 
employees, or has been found to have so discriminated in the past, the 
recipient shall recruit members of the sex so discriminated against so 
as to overcome the effects of such past or present discrimination.
    (b) Recruitment patterns. A recipient shall not recruit primarily or 
exclusively at entities that furnish as applicants only or predominantly 
members of one sex if such actions have the effect of discriminating on 
the basis of sex in violation of Sec. Sec.  3.500 through 3.550.



Sec.  3.515  Compensation.

    A recipient shall not make or enforce any policy or practice that, 
on the basis of sex:
    (a) Makes distinctions in rates of pay or other compensation;
    (b) Results in the payment of wages to employees of one sex at a 
rate less than that paid to employees of the opposite sex for equal work 
on jobs the performance of which requires equal skill, effort, and 
responsibility, and that are performed under similar working conditions.



Sec.  3.520  Job classification and structure.

    A recipient shall not:
    (a) Classify a job as being for males or for females;
    (b) Maintain or establish separate lines of progression, seniority 
lists, career ladders, or tenure systems based on sex; or
    (c) Maintain or establish separate lines of progression, seniority 
systems, career ladders, or tenure systems for similar jobs, position 
descriptions, or job requirements that classify persons on the basis of 
sex, unless sex is a bona fide occupational qualification for the 
positions in question as set forth in Sec.  3.550.



Sec.  3.525  Fringe benefits.

    (a) ``Fringe benefits'' defined. For purposes of these Title IX 
regulations, fringe benefits means: Any medical, hospital, accident, 
life insurance, or retirement benefit, service, policy or plan, any 
profit-sharing or bonus plan, leave, and any other benefit or service of 
employment not subject to the provision of Sec.  3.515.
    (b) Prohibitions. A recipient shall not:
    (1) Discriminate on the basis of sex with regard to making fringe 
benefits available to employees or make fringe benefits available to 
spouses, families, or dependents of employees differently upon the basis 
of the employee's sex;
    (2) Administer, operate, offer, or participate in a fringe benefit 
plan that does not provide for equal periodic benefits for members of 
each sex and for equal contributions to the plan by such recipient for 
members of each sex; or
    (3) Administer, operate, offer, or participate in a pension or 
retirement plan that establishes different optional or compulsory 
retirement ages based on sex or that otherwise discriminates in benefits 
on the basis of sex.



Sec.  3.530  Marital or parental status.

    (a) General. A recipient shall not apply any policy or take any 
employment action:
    (1) Concerning the potential marital, parental, or family status of 
an employee or applicant for employment

[[Page 30]]

that treats persons differently on the basis of sex; or
    (2) Which is based upon whether an employee or applicant for 
employment is the head of household or principal wage earner in such 
employee's or applicant's family unit.
    (b) Pregnancy. A recipient shall not discriminate against or exclude 
from employment any employee or applicant for employment on the basis of 
pregnancy, childbirth, false pregnancy, termination of pregnancy, or 
recovery therefrom.
    (c) Pregnancy as a temporary disability. Subject to Sec.  3.235(d), 
a recipient shall treat pregnancy, childbirth, false pregnancy, 
termination of pregnancy, recovery therefrom, and any temporary 
disability resulting therefrom as any other temporary disability for all 
job-related purposes, including commencement, duration, and extensions 
of leave, payment of disability income, accrual of seniority and any 
other benefit or service, and reinstatement, and under any fringe 
benefit offered to employees by virtue of employment.
    (d) Pregnancy leave. In the case of a recipient that does not 
maintain a leave policy for its employees, or in the case of an employee 
with insufficient leave or accrued employment time to qualify for leave 
under such a policy, a recipient shall treat pregnancy, childbirth, 
false pregnancy, termination of pregnancy, and recovery therefrom as a 
justification for a leave of absence without pay for a reasonable period 
of time, at the conclusion of which the employee shall be reinstated to 
the status that she held when the leave began or to a comparable 
position, without decrease in rate of compensation or loss of 
promotional opportunities, or any other right or privilege of 
employment.



Sec.  3.535  Effect of state or local law or other requirements.

    (a) Prohibitory requirements. The obligation to comply with 
Sec. Sec.  3.500 through 3.550 is not obviated or alleviated by the 
existence of any State or local law or other requirement that imposes 
prohibitions or limits upon employment of members of one sex that are 
not imposed upon members of the other sex.
    (b) Benefits. A recipient that provides any compensation, service, 
or benefit to members of one sex pursuant to a State or local law or 
other requirement shall provide the same compensation, service, or 
benefit to members of the other sex.



Sec.  3.540  Advertising.

    A recipient shall not in any advertising related to employment 
indicate preference, limitation, specification, or discrimination based 
on sex unless sex is a bona fide occupational qualification for the 
particular job in question.



Sec.  3.545  Pre-employment inquiries.

    (a) Marital status. A recipient shall not make pre-employment 
inquiry as to the marital status of an applicant for employment, 
including whether such applicant is ``Miss'' or ``Mrs.''
    (b) Sex. A recipient may make pre-employment inquiry as to the sex 
of an applicant for employment, but only if such inquiry is made equally 
of such applicants of both sexes and if the results of such inquiry are 
not used in connection with discrimination prohibited by these Title IX 
regulations.



Sec.  3.550  Sex as a bona fide occupational qualification.

    A recipient may take action otherwise prohibited by Sec. Sec.  3.500 
through 3.550 provided it is shown that sex is a bona fide occupational 
qualification for that action, such that consideration of sex with 
regard to such action is essential to successful operation of the 
employment function concerned. A recipient shall not take action 
pursuant to this section that is based upon alleged comparative 
employment characteristics or stereotyped characterizations of one or 
the other sex, or upon preference based on sex of the recipient, 
employees, students, or other persons, but nothing contained in this 
section shall prevent a recipient from considering an employee's sex in 
relation to employment in a locker room or toilet facility used only by 
members of one sex.

[[Page 31]]



                          Subpart F_Procedures



Sec.  3.600  Notice of covered programs.

    Within 60 days of September 29, 2000, each Federal agency that 
awards Federal financial assistance shall publish in the Federal 
Register a notice of the programs covered by these Title IX regulations. 
Each such Federal agency shall periodically republish the notice of 
covered programs to reflect changes in covered programs. Copies of this 
notice also shall be made available upon request to the Federal agency's 
office that enforces Title IX.



Sec.  3.605  Enforcement procedures.

    The investigative, compliance, and enforcement procedural provisions 
of Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (``Title 
VI'') are hereby adopted and applied to these Title IX regulations. 
These procedures may be found at 24 CFR part 1.

[65 FR 52880, Aug. 30, 2000]



PART 4_HUD REFORM ACT--Table of Contents



       Subpart A_Accountability in the Provision of HUD Assistance

Sec.
4.1 Purpose.
4.3 Definitions.
4.5 Notice and documentation of assistance subject to section 102(a).
4.7 Notice of funding decisions.
4.9 Disclosure requirements for assistance subject to section 102(b).
4.11 Updating of disclosure.
4.13 Limitation of assistance subject to section 102(d).

    Subpart B_Prohibition of Advance Disclosure of Funding Decisions

4.20 Purpose.
4.22 Definitions.
4.24 Scope.
4.26 Permissible and impermissible disclosures.
4.28 Civil penalties.
4.30 Procedure upon discovery of a violation.
4.32 Investigation by Office of Inspector General.
4.34 Review of Inspector General's report by the Ethics Law Division.
4.36 Action by the Ethics Law Division.
4.38 Administrative remedies.

    Authority: 42 U.S.C. 3535(d), 3537a, 3545.

    Source: 61 FR 14449, Apr. 1, 1996, unless otherwise noted.



       Subpart A_Accountability in the Provision of HUD Assistance



Sec.  4.1  Purpose.

    The provisions of this subpart A are authorized under section 102 of 
the Department of Housing and Urban Development Reform Act of 1989 (Pub. 
L. 101-235, approved December 15, 1989) (42 U.S.C. 3537a) (hereinafter, 
Section 102). Both the provisions of Section 102 and this subpart A 
apply for the purposes of Section 102. Section 102 contains a number of 
provisions designed to ensure greater accountability and integrity in 
the way in which the Department makes assistance available under certain 
of its programs.



Sec.  4.3  Definitions.

    Applicant includes a person whose application for assistance must be 
submitted to HUD for any purpose including approval, environmental 
review, or rent determination.
    Assistance under any program or discretionary fund administered by 
the Secretary is subject to Section 102(a), and means any assistance, 
under any program administered by the Department, that provides by 
statute, regulation or otherwise for the competitive distribution of 
funding.
    Assistance within the jurisdiction of the Department is subject to 
Section 102(b), and means any contract, grant, loan, cooperative 
agreement, or other form of assistance, including the insurance or 
guarantee of a loan or mortgage, that is provided with respect to a 
specific project or activity under a program administered by the 
Department, whether or not it is awarded through a competitive process.
    Assistance within the jurisdiction of the Department to any housing 
project is subject to Section 102(d), and means:
    (1) Assistance which is provided directly by HUD to any person or 
entity, but not to subrecipients. It includes assistance for the 
acquisition, rehabilitation, operation conversion, modernization, 
renovation, or demolition of any property containing five or more 
dwelling units that is to be used primarily

[[Page 32]]

for residential purposes. It includes assistance to independent group 
residences, board and care facilities, group homes and transitional 
housing but does not include primarily nonresidential facilities such as 
intermediate care facilities, nursing homes and hospitals. It also 
includes any change requested by a recipient in the amount of assistance 
previously provided, except changes resulting from annual adjustments in 
Section 8 rents under Section 8(c)(2)(A) of the United States Housing 
Act of 1937 (42 U.S.C. 1437f);
    (2) Assistance to residential rental property receiving a tax credit 
under Federal, State or local law.
    (3) For purposes of this definition, assistance includes assistance 
resulting from annual adjustments in Section 8 rents under Section 
8(c)(2)(A) of the United States Housing Act of 1937, unless the initial 
assistance was made available before April 15, 1991, and no other 
assistance subject to this subpart A was made available on or after that 
date.
    Housing project means: (1) Property containing five or more dwelling 
units that is to be used for primarily residential purposes, including 
(but not limited to) living arrangements such as independent group 
residences, board and care facilities, group homes, and transitional 
housing, but excluding facilities that provide primarily non-residential 
services, such as intermediate care facilities, nursing homes, and 
hospitals.
    (2) Residential rental property receiving a tax credit under 
Federal, State, or local law.
    Interested party means any person involved in the application for 
assistance, or in the planning, development or implementation of the 
project or activity for which assistance is sought and any other person 
who has a pecuniary interest exceeding the lower of $50,000 or 10 
percent in the project or activity for which assistance is sought.
    Selection criteria includes, in addition to any objective measures 
of housing and other need, project merit, or efficient use of resources, 
the weight or relative importance of each published selection criterion 
as well as any other factors that may affect the selection of 
recipients.



Sec.  4.5  Notice and documentation of assistance subject to section 102(a).

    (a) Notice. Before the Department solicits an application for 
assistance subject to Section 102(a), it will post a notice describing 
application procedures and selection criteria not less than 30 calendar 
days before the deadline by which applications must be submitted.
    (b) Documentation of decisions. HUD will make available for public 
inspection, for at least five (5) years, and beginning not less than 30 
calendars days after it provides the assistance, all documentation and 
other information regarding the basis for the funding decision with 
respect to each application submitted to HUD for assistance. HUD will 
also make available any written indication of support that it received 
from any applicant. Recipients of HUD assistance must ensure, in 
accordance with HUD guidance, the public availability of similar 
information submitted by subrecipients of HUD assistance.

[61 FR 14449, Apr. 1, 1996, as amended at 80 FR 75934, Dec. 7, 2015]



Sec.  4.7  Notice of funding decisions.

    HUD will publish a Notice in the Federal Register at least quarterly 
to notify the public of all decisions made by the Department to provide:
    (a) Assistance subject to Section 102(a); and
    (b) Assistance that is provided through grants or cooperative 
agreements on a discretionary (non-formula, non-demand) basis, but that 
is not provided on the basis of a competition.



Sec.  4.9  Disclosure requirements for assistance subject to section 102(b).

    (a) Receipt and reasonable expectation of receipt. (1) In 
determining the threshold of applicability of Section 102(b), an 
applicant will be deemed to have received or to have a reasonable 
expectation of receiving:
    (i) The total amount of assistance received during the Federal 
fiscal year during which the application was submitted;
    (ii) The total amount of assistance requested for the fiscal year in 
which any pending application, including the

[[Page 33]]

current application, was submitted; and
    (iii) For the fiscal year described in paragraph (a)(1)(ii) of this 
section, the total amount of assistance from the Department or any other 
entity that is likely to be made available on a formula basis or in the 
form of program income as defined in 2 CFR 200.80.
    (2) In the case of assistance that will be provided pursuant to 
contract over a period of time (such as project-based assistance under 
Section 8 of the United States Housing Act of 1937), all amounts that 
are to be provided over the term of the contract, irrespective of when 
they are to be received.
    (b) Content of disclosure. Applicants that receive or can reasonably 
be expected to receive, as defined in paragraph (a) of this section, an 
aggregate amount of assistance that is in excess of $200,000 must 
disclose the following information:
    (1) Other governmental assistance that is or is expected to be made 
available, based upon a reasonable assessment of the circumstances, with 
respect to the project or activities for which the assistance is sought;
    (2) The name and pecuniary interest of any interested party; and
    (3) A report of the expected sources and uses of funds for the 
project or activity which is the subject of the application, including 
governmental and non-governmental sources of funds and private capital 
resulting from tax benefits.
    (c) In the case of mortgage insurance under 24 CFR subtitle B, 
chapter II, the mortgagor is responsible for making the disclosures 
required under Section 102(b) and this section, and the mortgagee is 
responsible for furnishing the mortgagor's disclosures to the 
Department.

(Approved by the Office of Management and Budget under control number 
2510-0011)

[61 FR 14449, Apr. 1, 1996, as amended at 80 FR 75934, Dec. 7, 2015]



Sec.  4.11  Updating of disclosure.

    (a) During the period in which an application for assistance covered 
under Section 102(b) is pending, or in which such assistance is being 
provided, the applicant must report to the Department, or to the State 
or unit of general local government, as appropriate:
    (1) Any information referred to in Section 102(b) that the applicant 
should have disclosed with respect to the application, but did not 
disclose;
    (2) Any information referred to in Section 102(b) that initially 
arose after the time for making disclosures under that subsection, 
including the name and pecuniary interest of any person who did not have 
a pecuniary interest in the project or activity that exceeded the 
threshold in Section 102(b) at the time of the application, but that 
subsequently exceeded the threshold.
    (b) With regard to changes in information that was disclosed under 
Sections 102(b) or 102(c):
    (1) For programs administered by the Assistant Secretary for 
Community Planning and Development:
    (i) Any change in other government assistance covered by Section 
102(b) that exceeds the amount of all assistance that was previously 
disclosed by the lesser of $250,000 or 10 percent of the assistance;
    (ii) Any change in the expected sources or uses of funds that exceed 
the amount of all previously disclosed sources or uses by the lesser of 
$250,000 or 10 percent of previously disclosed sources;
    (2) For all other programs:
    (i) Any change in other government assistance under Section 
102(b)(1) that exceeds the amount of assistance that was previously 
disclosed;
    (ii) Any change in the pecuniary interest of any person under 
Section 102(b)(2) that exceeds the amount of all previously disclosed 
interests by the lesser of $50,000 or 10 percent of such interest;
    (iii) For all projects receiving a tax credit under Federal, Sate or 
local law, any change in the expected sources or uses of funds that were 
previously disclosed;
    (iv) For all other projects:
    (A) Any change in the expected source of funds from a single source 
that exceeds the lesser of the amount previously disclosed for that 
source of funds by $250,000 or 10 percent of the funds previously 
disclosed for that source;

[[Page 34]]

    (B) Any change in the expected sources of funds from all sources 
previously disclosed that exceeds the lesser of $250,000 or 10 percent 
of the amounts previously disclosed from all sources of funds;
    (C) Any change in a single expected use of funds that exceeds the 
lesser of $250,000 or 10 percent of the previously disclosed use;
    (D) Any change in the use of all funds that exceeds the lesser of 
$250,000 or 10 percent of the previously disclosed uses for all funds.
    (c) Period of coverage. For purposes of updating of Section 102(c), 
an application for assistance will be considered to be pending from the 
time the application is submitted until the Department communicates its 
decision with respect to the selection of the applicant.

(Approved by the Office of Management and Budget under control number 
2510-0011)



Sec.  4.13  Limitation of assistance subject to section 102(d).

    (a) In making the certification for assistance subject to Section 
102(d), the Secretary will consider the aggregate amount of assistance 
from the Department and from other sources that is necessary to ensure 
the feasibility of the assisted activity. The Secretary will take into 
account all factors relevant to feasibility, which may include, but are 
not limited to, past rates of returns for owners, sponsors, and 
investors; the long-term needs of the project and its tenants; and the 
usual and customary fees charged in carrying out the assisted activity.
    (b) If the Department determines that the aggregate of assistance 
within the jurisdiction of the Department to a housing project from the 
Department and from other governmental sources exceeds the amount that 
the Secretary determines is necessary to make the assisted activity 
feasible, the Department will consider all options available to enable 
it to make the required certification, including reductions in the 
amount of Section 8 subsidies. The Department also may impose a dollar-
for-dollar, or equivalent, reduction in the amount of HUD assistance to 
offset the amount of other government assistance. In grant programs, 
this could result in a reduction of any grant amounts not yet drawn 
down. The Department may make these adjustments immediately, or in 
conjunction with servicing actions anticipated to occur in the near 
future (e.g., in conjunction with the next annual adjustment of Section 
8 rents).
    (c) If an applicant does not meet the $200,000 disclosure 
requirement in Sec.  4.7(b), an applicant must certify whether there is, 
or is expected to be made, available with respect to the housing project 
any other governmental assistance. The Department may also require any 
applicant subject to this subpart A to submit such a certification in 
conjunction with the Department's processing of any subsequent servicing 
action on that project. If there is other government assistance for 
purposes of the two preceding sentences, the applicant must submit such 
information as the Department deems necessary to make the certification 
and subsequent adjustments under Section 102(d).
    (d) The certification under Section 102(d) shall be retained in the 
official file for the housing project.



    Subpart B_Prohibition of Advance Disclosure of Funding Decisions



Sec.  4.20  Purpose.

    The provisions of this subpart B are authorized under section 103 of 
the Department of Housing and Urban Development Reform Act of 1989 (Pub. 
L. 101-235, approved December 15, 1989) (42 U.S.C. 3537a) (hereinafter, 
Section 103). Both the provisions of Section 103 and this subpart B 
apply for the purposes of Section 103. Section 103 proscribes direct or 
indirect communication of certain information during the selection 
process by HUD employees to persons within or outside of the Department 
who are not authorized to receive that information. The purpose of the 
proscription is to preclude giving an unfair advantage to applicants who 
would receive information not available to other applicants or to the 
public. Section 103 also authorizes the Department to impose a civil 
money penalty on a HUD employee who knowingly discloses protected 
information, if such a violation of Section 103 is material, and 
authorizes the Department to

[[Page 35]]

sanction the person who received information improperly by, among other 
things, denying assistance to that person.



Sec.  4.22  Definitions.

    Application means a written request for assistance regardless of 
whether the request is in proper form or format.
    Assistance does not include any contract (e.g., a procurement 
contract) that is subject to the Federal Acquisition Regulation (FAR) 
(48 CFR ch. 1).
    Disclose means providing information directly or indirectly to a 
person through any means of communication.
    Employee includes persons employed on a full-time, part-time, or 
temporary basis, and special government employees as defined in 18 
U.S.C. 202. The term applies whether or not the employee is denoted as 
an officer of the Department. ``Employee'' is to be construed broadly to 
include persons who are retained on a contractual or consultative basis 
under an Office of Human Resources appointment. However, ``employee'' 
does not include an independent contractor, e.g., a firm or individual 
working under the authority of a procurement contract.
    Material or materially means in some influential or substantial 
respect or having to do more with substance than with form.
    Person means an individual, corporation, company, association, 
authority, firm, partnership, society, State, local government, or any 
other organization or group of people.
    Selection process means the period with respect to a selection for 
assistance that begins when the HUD official responsible for awarding 
the assistance involved, or his or her designee, makes a written request 
(which includes the selection criteria to be used in providing the 
assistance) to the Office of General Counsel (OGC) to prepare the NOFA, 
solicitation, or request for applications for assistance for publication 
in the Federal Register. The period includes the evaluation of 
applications, and concludes with the announcement of the selection of 
recipients of assistance.



Sec.  4.24  Scope.

    (a) Coverage. The prohibitions against improper disclosure of 
covered selection information apply to any person who is an employee of 
the Department. In addition, the Department will require any other 
person who participates at the invitation of the Department in the 
selection process to sign a certification that he or she will be bound 
by the provisions of this part.
    (b) Applicability. The prohibitions contained in this part apply to 
conduct occurring on or after June 12, 1991.



Sec.  4.26  Permissible and impermissible disclosures.

    (a) Notwithstanding the provisions of Section 103, an employee is 
permitted to disclose information during the selection process with 
respect to:
    (1) The requirements of a HUD program or programs, including 
unpublished policy statements and the provision of technical assistance 
concerning program requirements, provided that the requirements or 
statements are disclosed on a uniform basis to any applicant or 
potential applicant. For purposes of this part, the term ``technical 
assistance'' includes such activities as explaining and responding to 
questions about program regulations, defining terms in an application 
package, and providing other forms of technical guidance that may be 
described in a NOFA. The term ``technical assistance'' also includes 
identification of those parts of an application that need substantive 
improvement, but this term does not include advising the applicant how 
to make those improvements.
    (2) The dates by which particular decisions in the selection process 
will be made;
    (3) Any information which has been published in the Federal Register 
in a NOFA or otherwise;
    (4) Any information which has been made public through means other 
than the Federal Register;
    (5) An official audit, inquiry or investigation, if the disclosure 
is made to an auditor or investigator authorized by the HUD Inspector 
General to conduct the audit or investigation;

[[Page 36]]

    (6) Legal activities, including litigation, if the disclosure is 
made to an attorney who is representing or is otherwise responsible to 
the Department in connection with the activities; or
    (7) Procedures that are required to be performed to process an 
application, e.g., environmental or budget reviews, and technical 
assistance from experts in fields who are regularly employed by other 
government agencies, provided that the agency with which the expert is 
employed or associated is not an applicant for HUD assistance during the 
pending funding cycle.
    (b) An authorized employee, during the selection process, may 
contact an applicant for the purpose of:
    (1) Communication of the applicant's failure to qualify, after a 
preliminary review for eligibility and completeness with respect to his 
or her application, and the reasons for the failure to qualify, or the 
fact of the applicant's failure to be determined to be technically 
acceptable after a full review; or
    (2) Clarification of the terms of the applicant's application. A 
clarification, for the purpose of this paragraph (b), may include a 
request for additional information consistent with regulatory 
requirements.
    (c) Prohibition of advance disclosure of funding decisions. During 
the selection process an employee shall not knowingly disclose any 
covered selection information regarding the selection process to any 
person other than an employee authorized to receive that information.
    (1) The following disclosures of information are, at any time during 
the selection process, a violation of Section 103:
    (i) Information regarding any applicant's relative standing;
    (ii) The amount of assistance requested by any applicant;
    (iii) Any information contained in an application;
    (2) The following disclosures of information, before the deadline 
for the submission of applications, shall be a violation of Section 103:
    (i) The identity of any applicant; and
    (ii) The number of applicants.



Sec.  4.28  Civil penalties.

    Whenever any employee knowingly and materially violates the 
prohibition in Section 103, the Department may impose a civil money 
penalty on the employee in accordance with the provisions of 24 CFR part 
30.



Sec.  4.30  Procedure upon discovery of a violation.

    (a) In general. When an alleged violation of Section 103 or this 
subpart B comes to the attention of any person, including an employee, 
he or she may either:
    (1) Contact the HUD Ethics Law Division to provide information about 
the alleged violation; or
    (2) Contact the HUD Office of Inspector General to request an 
inquiry or investigation into the matter.
    (b) Ethics Law Division. When the Ethics Law Division receives 
information concerning an alleged violation of Section 103, it shall 
refer the matter to the Inspector General stating the facts of the 
alleged violation and requesting that the Inspector General make an 
inquiry or investigation into the matter.
    (c) Inspector General. When the Inspector General receives 
information concerning an alleged violation of Section 103 or this 
subpart B, he or she shall notify the Ethics Law Division when the 
Inspector General begins an inquiry or investigation into the matter.
    (d) Protection of employee complainants. (1) No official of the 
Ethics Law Division, after receipt of information from an employee 
stating the facts of an alleged violation of this part, shall disclose 
the identity of the employee without the consent of that employee. The 
Inspector General, after receipt of information stating the facts of an 
alleged violation of this part, shall not disclose the identity of the 
employee who provided the information without the consent of that 
employee, unless the Inspector General determines that disclosure of the 
employee's identity is unavoidable during the course of an 
investigation. However, any employee who knowingly reports a false 
alleged violation of this part is not so protected and may be subject to 
disciplinary action.

[[Page 37]]

    (2) Any employee who has authority to take, direct others to take, 
recommend or approve a personnel action is prohibited from threatening, 
taking, failing to take, recommending, or approving any personnel action 
as reprisal against another employee for providing information to 
investigating officials.



Sec.  4.32  Investigation by Office of Inspector General.

    The Office of Inspector General shall review every alleged violation 
of Section 103. If after a review the Office of Inspector General 
determines that further investigation is not warranted, it shall notify 
the Ethics Law Division of that determination. If, after a review, the 
Office of Inspector General determines that additional investigation is 
warranted, it shall conduct the investigation and upon completion issue 
a report of the investigation to the Ethics Law Division as to each 
alleged violation.



Sec.  4.34  Review of Inspector General's report by the Ethics Law Division.

    After receipt of the Inspector General's report, the Ethics Law 
Division shall review the facts and circumstances of the alleged 
violations. In addition, the Ethics Law Division may:
    (a) Return the report to the Inspector General with a request for 
further investigation;
    (b) Discuss the violation with the employee alleged to have 
committed the violation; or
    (c) Interview any other person, including employees who it believes 
will be helpful in furnishing information relevant to the inquiry.



Sec.  4.36  Action by the Ethics Law Division.

    (a) After review of the Inspector General's report, the Ethics Law 
Division shall determine whether or not there is sufficient information 
providing a reasonable basis to believe that a violation of Section 103 
or this subpart B has occurred.
    (b) If the Ethics Law Division determines that there is no 
reasonable basis to believe that a violation of Section 103 or this 
subpart B has occurred, it shall close the matter and send its 
determination to the Office of Inspector General.
    (c) If the Ethics Law Division determines that there is sufficient 
information to provide a reasonable basis to believe that a violation of 
Section 103 or this subpart B has occurred, it shall:
    (1) Send its determination to the Office of Inspector General; and
    (2) Refer the matter to the appropriate official for review as to 
whether to impose a civil money penalty in accordance with 24 CFR part 
30; provided, however, that the Ethics Law Division shall not make a 
civil money penalty recommendation unless it finds the violation to have 
been knowing and material. The decision to impose a civil money penalty 
in a particular matter may be made only upon referral from the Ethics 
Law Division.
    (d) In determining whether a violation is material, the Ethics Law 
Division shall consider the following factors, as applicable:
    (1) The content of the disclosure and its significance to the person 
to whom the disclosure was made;
    (2) The time during the selection process when the disclosure was 
made;
    (3) The person to whom the disclosure was made;
    (4) The dollar amount of assistance requested by the person to whom 
the disclosure was made;
    (5) The dollar amount of assistance available for a given 
competition or program;
    (6) The benefit, if any, received or expected by the employee, the 
employee's relatives or friends, or any other person with whom the 
employee is affiliated;
    (7) The potential injury to the Department.
    (e) If the Ethics Law Division determines that there is sufficient 
information to provide a reasonable basis to believe that a violation of 
Section 103 or this subpart B has occurred, it may, in addition to 
referring the matter under 24 CFR part 30, refer the matter to an 
appropriate HUD official for consideration of any other available 
disciplinary action. Any referral authorized by this paragraph (e) shall 
be reported to the Inspector General and

[[Page 38]]

may be reported to the employee's supervisor.



Sec.  4.38  Administrative remedies.

    (a) If the Department receives or obtains information providing a 
reasonable basis to believe that a violation of Section 103 has 
occurred, the Department may impose a sanction, as determined to be 
appropriate, upon an applicant for or a recipient of assistance who has 
received covered selection information.
    (b) In determining whether a sanction is appropriate and if so which 
sanction or sanctions should be sought, the Secretary shall give 
consideration to the applicant's conduct with respect to the violation. 
In so doing, the Secretary shall consider the factors listed at Sec.  
4.36(d), as well as any history of prior violations in any HUD program, 
the benefits received or expected, deterrence of future violations and 
the extent of any complicity in the violation.
    (c) The Secretary may impose a sanction authorized by this section 
whether or not the Ethics Law Division refers a case under 24 CFR part 
30, and whether or not a civil money penalty is imposed.



PART 5_GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS--Table of Contents



  Subpart A_Generally Applicable Definitions and Requirements; Waivers

Sec.
5.100 Definitions.
5.105 Other Federal requirements.
5.106 Equal access in accordance with the individual's gender identity 
          in community planning and development programs.
5.107 Audit requirements for non-profit organizations.
5.109 Equal Participation of Religious Organizations in HUD Programs and 
          Activities.
5.110 Waivers.
5.111 Housing counseling.

                  Affirmatively Furthering Fair Housing

5.150 Affirmatively Furthering Fair Housing: Purpose.
5.151 Affirmatively Furthering Fair Housing: Implementation.
5.152 Definitions.
5.154 Assessment of Fair Housing (AFH).
5.156 Joint and Regional AFHs.
5.158 Community participation, consultation, and coordination.
5.160 Submission requirements.
5.162 Review of AFH.
5.164 Revising an accepted AFH.
5.166 AFFH certification.
5.168 Recordkeeping.
5.167-5.180 [Reserved]

  Subpart B_Disclosure and Verification of Social Security Numbers and 
    Employer Identification Numbers; Procedures for Obtaining Income 
                               Information

5.210 Purpose, applicability, and Federal preemption.
5.212 Compliance with the Privacy Act and other requirements.
5.214 Definitions.

  Disclosure and Verification of Social Security Numbers and Employer 
 Identification Numbers for Applicants and Participants in Certain HUD 
                                Programs

5.216 Disclosure and verification of Social Security and Employer 
          Identification Numbers.
5.218 Penalties for failing to disclose and verify Social Security and 
          Employer Identification Numbers.

    Procedures for Obtaining Income Information About Applicants and 
                              Participants

5.230 Consent by assistance applicants and participants.
5.232 Penalties for failing to sign consent forms.
5.233 Mandated use of HUD's Enterprise Income Verification (EIV) System.
5.234 Requests for information from SWICAs and Federal agencies; 
          restrictions on use.
5.236 Procedures for termination, denial, suspension, or reduction of 
          assistance based on information obtained from a SWICA or 
          Federal agency.
5.238 Criminal and civil penalties.
5.240 Family disclosure of income information to the responsible entity 
          and verification.

  Subpart C_Pet Ownership for the Elderly or Persons With Disabilities

                          General Requirements

5.300 Purpose.
5.303 Exclusion for animals that assist, support, or provide service to 
          persons with disabilities.
5.306 Definitions.
5.309 Prohibition against discrimination.
5.312 Notice to tenants.
5.315 Content of pet rules: General requirements.
5.318 Discretionary pet rules.

[[Page 39]]

5.321 Lease provisions.
5.324 Implementation of lease provisions.
5.327 Nuisance or threat to health or safety.

             Pet Ownership Requirements for Housing Programs

5.350 Mandatory pet rules for housing programs.
5.353 Housing programs: Procedure for development of pet rules.
5.356 Housing programs: Pet rule violation procedures.
5.359 Housing programs: Rejection of units by applicants for tenancy.
5.360 Housing programs: Additional lease provisions.
5.363 Housing programs: Protection of the pet.

         Pet Ownership Requirements for Public Housing Programs

5.380 Public housing programs: Procedure for development of pet rules.

Subpart D_Definitions for Section 8 and Public Housing Assistance Under 
                  the United States Housing Act of 1937

5.400 Applicability.
5.403 Definitions.

           Subpart E_Restrictions on Assistance to Noncitizens

5.500 Applicability.
5.502 Requirements concerning documents.
5.504 Definitions.
5.506 General provisions.
5.508 Submission of evidence of citizenship or eligible immigration 
          status.
5.510 Documents of eligible immigration status.
5.512 Verification of eligible immigration status.
5.514 Delay, denial, reduction or termination of assistance.
5.516 Availability of preservation assistance to mixed families and 
          other families.
5.518 Types of preservation assistance available to mixed families and 
          other families.
5.520 Proration of assistance.
5.522 Prohibition of assistance to noncitizen students.
5.524 Compliance with nondiscrimination requirements.
5.526 Protection from liability for responsible entities and State and 
          local government agencies and officials.
5.528 Liability of ineligible tenants for reimbursement of benefits.

 Subpart F_Section 8 and Public Housing, and Other HUD Assisted Housing 
  Serving Persons with Disabilities: Family Income and Family Payment; 
      Occupancy Requirements for Section 8 Project-Based Assistance

5.601 Purpose and applicability.
5.603 Definitions.

                              Family Income

5.609 Annual income.
5.611 Adjusted income.
5.612 Restrictions on assistance to students enrolled in an institution 
          of higher education.
5.613 Public housing program and Section 8 tenant-based assistance 
          program: PHA cooperation with welfare agency.
5.615 Public housing program and Section 8 tenant-based assistance 
          program: How welfare benefit reduction affects family income.
5.617 Self-sufficiency incentives for persons with disabilities--
          Disallowance of increase in annual income.

                             Family Payment

5.628 Total tenant payment.
5.630 Minimum rent.
5.632 Utility reimbursements.
5.634 Tenant rent.

       Section 8 Project-Based Assistance: Occupancy Requirements

5.653 Section 8 project-based assistance programs: Admission--Income-
          eligibility and income-targeting.
5.655 Section 8 project-based assistance programs: Owner preferences in 
          selection for a project or unit.
5.657 Section 8 project-based assistance programs: Reexamination of 
          family income and composition.
5.659 Family information and verification.
5.661 Section 8 project-based assistance programs: Approval for police 
          or other security personnel to live in project.

   Subpart G_Physical Condition Standards and Inspection Requirements

5.701 Applicability.
5.703 Physical condition standards for HUD housing that is decent, safe, 
          sanitary and in good repair (DSS/GR).
5.705 Uniform physical inspection requirements.

[[Page 40]]

             Subpart H_Uniform Financial Reporting Standards

5.801 Uniform financial reporting standards.

    Subpart I_Preventing Crime in Federally Assisted Housing_Denying 
Admission and Terminating Tenancy for Criminal Activity or Alcohol Abuse

                                 General

5.850 Which subsidized housing is covered by this subpart?
5.851 What authority do I have to screen applicants and evict tenants?
5.852 What discretion do I have in screening and eviction actions?
5.853 Definitions.

                           Denying Admissions

5.854 When must I prohibit admission of individuals who have engaged in 
          drug-related criminal activity?
5.855 When am I specifically authorized to prohibit admission of 
          individuals who have engaged in criminal activity?
5.856 When must I prohibit admission of sex offenders?
5.857 When must I prohibit admission of alcohol abusers?

                           Terminating Tenancy

5.858 When authority do I have to evict drug criminals?
5.859 When am I specifically authorized to evict other criminals?
5.860 When am I specifically authorized to evict alcohol abusers?
5.861 What evidence of criminal activity must I have to evict?

          Subpart J_Access to Criminal Records and Information

5.901 To what criminal records and searches does this subpart apply?
5.902 Definitions.
5.903 What special authority is there to obtain access to criminal 
          records?
5.905 What special authority is there to obtain access to sex offender 
          registration information?

    Subpart K_Application, Registration, and Submission Requirements

5.1001 Applicability.
5.1003 Use of a universal identifier for organizations applying for HUD 
          grants.
5.1004 System of award management.
5.1005 Electronic submission of applications for grants and other 
          financial assistance.

Subpart L_Protection for Victims of Domestic Violence, Dating Violence, 
                       Sexual Assault, or Stalking

5.2001 Applicability.
5.2003 Definitions.
5.2005 VAWA protections.
5.2007 Documenting the occurrence of domestic violence, dating violence, 
          sexual assault, or stalking.
5.2009 Remedies available to victims of domestic violence, dating 
          violence, sexual assault, or stalking.
5.2011 Effect on other laws.

    Authority: 12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 
1437n, 3535(d); Sec. 327, Pub. L. 109-115, 119 Stat. 2936; Sec. 607, 
Pub. L. 109-162, 119 Stat. 3051 (42 U.S.C. 14043e et seq.); E.O. 13279, 
67 FR 77141, 3 CFR, 2002 Comp., p. 258; and E.O. 13559, 75 FR 71319, 3 
CFR, 2010 Comp., p. 273.

    Source: 61 FR 5202, Feb. 9, 1996, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 5 appear at 65 FR 
16715, Mar. 29, 2000.



  Subpart A_Generally Applicable Definitions and Requirements; Waivers

    Authority: 29 U.S.C. 794, 42 U.S.C. 1437a, 1437c, 1437c-1(d), 1437d, 
1437f, 1437n, 3535(d), and Sec. 327, Pub. L. 109-115, 119 Stat. 2936; 42 
U.S.C. 3600-3620; 42 U.S.C. 5304(b); 42 U.S.C. 12101 et seq.; 42 U.S.C. 
12704-12708; E.O. 11063, 27 FR 11527, 3 CFR, 1958-1963 Comp., p. 652; 
E.O. 12892, 59 FR 2939, 3 CFR, 1994 Comp., p. 849.



Sec.  5.100  Definitions.

    The following definitions apply to this part and also in other 
regulations, as noted:
    1937 Act means the United States Housing Act of 1937 (42 U.S.C. 1437 
et seq.)
    ADA means the Americans with Disabilities Act of 1990 (42 U.S.C. 
12101 et seq.).
    ALJ means an administrative law judge appointed to HUD pursuant to 5 
U.S.C. 3105 or detailed to HUD pursuant to 5 U.S.C. 3344.
    Broadband infrastructure means cables, fiber optics, wiring, or 
other permanent (integral to the structure) infrastructure, including 
wireless infrastructure, that is capable of providing

[[Page 41]]

access to Internet connections in individual housing units, and that 
meets the definition of ``advanced telecommunications capability'' 
determined by the Federal Communications Commission under section 706 of 
the Telecommunications Act of 1996 (47 U.S.C. 1302).
    Covered person, for purposes of 24 CFR 5, subpart I, and parts 966 
and 982, means a tenant, any member of the tenant's household, a guest 
or another person under the tenant's control.
    Department means the Department of Housing and Urban Development.
    Drug means a controlled substance as defined in section 102 of the 
Controlled Substances Act (21 U.S.C. 802).
    Drug-related criminal activity means the illegal manufacture, sale, 
distribution, or use of a drug, or the possession of a drug with intent 
to manufacture, sell, distribute or use the drug.
    Elderly Person means an individual who is at least 62 years of age.
    Fair Housing Act means title VIII of the Civil Rights Act of 1968, 
as amended by the Fair Housing Amendments Act of 1988 (42 U.S.C. 3601 et 
seq.).
    Fair Market Rent (FMR) means the rent that would be required to be 
paid in the particular housing market area in order to obtain privately 
owned, decent, safe and sanitary rental housing of modest (non-luxury) 
nature with suitable amenities. This Fair Market Rent includes utilities 
(except telephone). Separate Fair Market Rents will be established by 
HUD for dwelling units of varying sizes (number of bedrooms) and will be 
published in the Federal Register in accordance with part 888 of this 
title.
    Family has the meaning provided this term in Sec.  5.403, and 
applies to all HUD programs unless otherwise provided in the regulations 
for a specific HUD program.
    Federally assisted housing (for purposes of subparts I and J of this 
part) means housing assisted under any of the following programs:
    (1) Public housing;
    (2) Housing receiving project-based or tenant-based assistance under 
Section 8 of the U.S. Housing Act of 1937 (42 U.S.C. 1437f);
    (3) Housing that is assisted under section 202 of the Housing Act of 
1959, as amended by section 801 of the National Affordable Housing Act 
(12 U.S.C. 1701q);
    (4) Housing that is assisted under section 202 of the Housing Act of 
1959, as such section existed before the enactment of the National 
Affordable Housing Act;
    (5) Housing that is assisted under section 811 of the National 
Affordable Housing Act (42 U.S.C. 8013);
    (6) Housing financed by a loan or mortgage insured under section 
221(d)(3) of the National Housing Act (12 U.S.C. 1715l(d)(3)) that bears 
interest at a rate determined under the proviso of section 221(d)(5) of 
such Act (12 U.S.C. 1715l(d)(5));
    (7) Housing insured, assisted, or held by HUD or by a State or local 
agency under section 236 of the National Housing Act (12 U.S.C. 1715z-
1); or
    (8) Housing assisted by the Rural Development Administration under 
section 514 or section 515 of the Housing Act of 1949 (42 U.S.C. 1483, 
1484).
    Gender identity means the gender with which a person identifies, 
regardless of the sex assigned to that person at birth and regardless of 
the person's perceived gender identity. Perceived gender identity means 
the gender with which a person is perceived to identify based on that 
person's appearance, behavior, expression, other gender related 
characteristics, or sex assigned to the individual at birth or 
identified in documents.
    General Counsel means the General Counsel of HUD.
    Grantee means the person or legal entity to which a grant is awarded 
and that is accountable for the use of the funds provided.
    Guest, only for purposes of 24 CFR part 5, subparts A and I, and 
parts 882, 960, 966, and 982, means a person temporarily staying in the 
unit with the consent of a tenant or other member of the household who 
has express or implied authority to so consent on behalf of the tenant. 
The requirements of parts 966 and 982 apply to a guest as so defined.
    Homeownership counseling means housing counseling related to 
homeownership and residential mortgage loans when provided in connection 
with HUD's Housing Counseling Program, or

[[Page 42]]

required by or provided in connection with HUD Programs as defined in 
Sec.  5.111. Homeownership counseling is housing counseling that covers 
the decision to purchase a home, the selection and purchase of a home, 
issues arising during or affecting the period of ownership of a home 
(including financing, refinancing, default, and foreclosure, and other 
financial decisions) and the sale or other disposition of a home.
    Household, for purposes of 24 CFR part 5, subpart I, and parts, 960, 
966, 882, and 982, means the family and PHA-approved live-in aide.
    Housing counseling is independent, expert advice customized to the 
need of the consumer to address the consumer's housing barriers and to 
help achieve their housing goals and must include the following 
processes: Intake; financial and housing affordability analysis; an 
action plan, except for reverse mortgage counseling; and a reasonable 
effort to have follow-up communication with the client when possible. 
The content and process of housing counseling must meet the standards 
outlined in 24 CFR part 214. Homeownership counseling and rental 
counseling are types of housing counseling.
    HUD means the same as Department.
    MSA means a metropolitan statistical area.
    NAHA means the Cranston-Gonzalez National Affordable Housing Act (42 
U.S.C. 12701 et seq.).
    NEPA means the National Environmental Policy Act of 1969 (42 U.S.C. 
4321).
    NOFA means Notice of Funding Availability.
    OMB means the Office of Management and Budget.
    Organizational Unit means the jurisdictional area of each Assistant 
Secretary, and each office head or field administrator reporting 
directly to the Secretary.
    Other person under the tenant's control, for the purposes of the 
definition of covered person and for parts 5, 882, 966, and 982 means 
that the person, although not staying as a guest (as defined in this 
section) in the unit, is, or was at the time of the activity in 
question, on the premises (as premises is defined in this section) 
because of an invitation from the tenant or other member of the 
household who has express or implied authority to so consent on behalf 
of the tenant. Absent evidence to the contrary, a person temporarily and 
infrequently on the premises solely for legitimate commercial purposes 
is not under the tenant's control.
    Premises, for purposes of 24 CFR part 5, subpart I, and parts 960 
and 966, means the building or complex or development in which the 
public or assisted housing dwelling unit is located, including common 
areas and grounds.
    Public housing means housing assisted under the 1937 Act, other than 
under Section 8. ``Public housing'' includes dwelling units in a mixed 
finance project that are assisted by a PHA with capital or operating 
assistance.
    Public Housing Agency (PHA) means any State, county, municipality, 
or other governmental entity or public body, or agency or 
instrumentality of these entities, that is authorized to engage or 
assist in the development or operation of low-income housing under the 
1937 Act.
    Rental housing counseling means counseling related to the rental of 
residential property, which may include counseling regarding future 
homeownership opportunities when provided in connection with HUD's 
Housing Counseling Program, or required under or provided in connection 
with HUD Programs as defined in Sec.  5.111. Rental housing counseling 
may also include the decision to rent, responsibilities of tenancy, 
affordability of renting and eviction prevention.
    Responsible entity means:
    (1) For the public housing program, the Section 8 tenant-based 
assistance program (part 982 of this title), and the Section 8 project-
based certificate or voucher programs (part 983 of this title), and the 
Section 8 moderate rehabilitation program (part 882 of this title), 
responsible entity means the PHA administering the program under an ACC 
with HUD;
    (2) For all other Section 8 programs, responsible entity means the 
Section 8 project owner.
    Section 8 means section 8 of the United States Housing Act of 1937 
(42 U.S.C. 1437f).

[[Page 43]]

    Secretary means the Secretary of Housing and Urban Development.
    Sexual orientation means one's emotional or physical attraction to 
the same and/or opposite sex (e.g., homosexuality, heterosexuality, or 
bisexuality).
    Substantial rehabilitation, for the purposes of determining when 
installation of broadband infrastructure is required as part of 
substantial rehabilitation of multifamily rental housing, unless 
otherwise defined by a program, means work that involves:
    (1) Significant work on the electrical system of the multifamily 
rental housing. ``Significant work'' means complete replacement of the 
electrical system or other work for which the pre-construction cost 
estimate is equal to or greater than 75 percent of the cost of replacing 
the entire electrical system. In the case of multifamily rental housing 
with multiple buildings with more than 4 units, ``entire system'' refers 
to the electrical system of the building undergoing rehabilitation; or
    (2) Rehabilitation of the multifamily rental housing in which the 
pre-construction estimated cost of the rehabilitation is equal to or 
greater than 75 percent of the total estimated cost of replacing the 
multifamily rental housing after the rehabilitation is complete. In the 
case of multifamily rental housing with multiple buildings with more 
than 4 units, the replacement cost must be the replacement cost of the 
building undergoing rehabilitation.
    URA means the Uniform Relocation Assistance and Real Property 
Acquisition Policies Act of 1970 (42 U.S.C. 4201-4655).
    Violent criminal activity means any criminal activity that has as 
one of its elements the use, attempted use, or threatened use of 
physical force substantial enough to cause, or be reasonably likely to 
cause, serious bodily injury or property damage.

[61 FR 5202, Feb. 9, 1996, as amended at 63 FR 23853, Apr. 30, 1998; 65 
FR 16715, Mar. 29, 2000; 66 FR 28791, May 24, 2001; 77 FR 5674, Feb. 3, 
2012; 81 FR 64782, Sept. 21, 2016; 81 FR 90657, Dec. 14, 2016; 81 FR 
92635, Dec. 20, 2016]



Sec.  5.105  Other Federal requirements.

    The requirements set forth in this section apply to all HUD 
programs, except as may be otherwise noted in the respective program 
regulations in title 24 of the CFR, or unless inconsistent with statutes 
authorizing certain HUD programs:
    (a) Nondiscrimination and equal opportunity. (1) The Fair Housing 
Act (42 U.S.C. 3601-19) and implementing regulations at 24 CFR part 100 
et seq.; Executive Order 11063, as amended by Executive Order 12259 (3 
CFR, 1959-1963 Comp., p. 652 and 3 CFR, 1980 Comp., p. 307) (Equal 
Opportunity in Housing Programs) and implementing regulations at 24 CFR 
part 107; title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-
2000d-4) (Nondiscrimination in Federally Assisted Programs) and 
implementing regulations at 24 CFR part 1; the Age Discrimination Act of 
1975 (42 U.S.C. 6101-6107) and implementing regulations at 24 CFR part 
146; section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and 
implementing regulations at part 8 of this title; title II of the 
Americans with Disabilities Act, 42 U.S.C. 12101 et seq.; 24 CFR part 8; 
section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 
1701u) and implementing regulations at 24 CFR part 135; Executive Order 
11246, as amended by Executive Orders 11375, 11478, 12086, and 12107 (3 
CFR, 1964-1965 Comp., p. 339; 3 CFR, 1966-1970 Comp., p. 684; 3 CFR, 
1966-1970 Comp., p. 803; 3 CFR, 1978 Comp., p. 230; and 3 CFR, 1978 
Comp., p. 264, respectively) (Equal Employment Opportunity Programs) and 
implementing regulations at 41 CFR chapter 60; Executive Order 11625, as 
amended by Executive Order 12007 (3 CFR, 1971-1975 Comp., p. 616 and 3 
CFR, 1977 Comp., p. 139) (Minority Business Enterprises); Executive 
Order 12432 (3 CFR, 1983 Comp., p. 198) (Minority Business Enterprise 
Development); and Executive Order 12138, as amended by Executive Order 
12608 (3 CFR, 1977 Comp., p. 393 and 3 CFR, 1987 Comp., p. 245) (Women's 
Business Enterprise).
    (2) Equal access to HUD-assisted or -insured housing. A 
determination of eligibility for housing that is assisted by HUD or 
subject to a mortgage insured by HUD shall be made in accordance with 
the eligibility requirements provided for such program by HUD, and such 
housing shall be made available without regard to actual or perceived

[[Page 44]]

sexual orientation, gender identity, or marital status.
    (b) Disclosure requirements. The disclosure requirements and 
prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 CFR 
part 87; and the requirements for funding competitions established by 
the Department of Housing and Urban Development Reform Act of 1989 (42 
U.S.C. 3531 et seq.).
    (c) Debarred, suspended, or ineligible contractors and participants. 
The prohibitions at 2 CFR part 2424 on the use of debarred, suspended, 
or ineligible contractors and participants.
    (d) Drug-free workplace. The Drug-Free Workplace Act of 1988 (41 
U.S.C. 701, et seq.) and HUD's implementing regulations at 2 CFR part 
2429.

[61 FR 5202, Feb. 9, 1996, as amended at 65 FR 16715, Mar. 29, 2000; 72 
FR 73491, Dec. 27, 2007; 76 FR 45167, July 28, 2011; 77 FR 5674, Feb. 3, 
2012; 81 FR 64782, Sept. 21, 2016; 81 FR 80993, Nov. 17, 2016]



Sec.  5.106  Equal access in accordance with the individual's gender
identity in community planning and development programs.

    (a) Applicability. This section applies to assistance provided under 
Community Planning and Development (CPD) programs, including assistance 
under the following CPD programs: HOME Investment Partnerships program 
(24 CFR part 92), Housing Trust Fund program (24 CFR part 93), Community 
Development Block Grant program (24 CFR part 570), Housing Opportunities 
for Persons With AIDS program (24 CFR part 574), Emergency Solutions 
Grants program (24 CFR part 576), Continuum of Care program (24 CFR part 
578), or Rural Housing Stability Assistance Program (24 CFR part 579). 
The requirements of this section apply to recipients and subrecipients, 
as well as to owners, operators, and managers of shelters and other 
buildings and facilities and providers of services funded in whole or in 
part by any CPD program.
    (b) Equal access in accordance with gender identity. The admissions, 
occupancy, and operating policies and procedures of recipients, 
subrecipients, owners, operators, managers, and providers identified in 
paragraph (a) of this section, including policies and procedures to 
protect privacy, health, safety, and security, shall be established or 
amended, as necessary, and administered in a nondiscriminatory manner to 
ensure that:
    (1) Equal access to CPD programs, shelters, other buildings and 
facilities, benefits, services, and accommodations is provided to an 
individual in accordance with the individual's gender identity, and in a 
manner that affords equal access to the individual's family;
    (2) An individual is placed, served, and accommodated in accordance 
with the gender identity of the individual;
    (3) An individual is not subjected to intrusive questioning or asked 
to provide anatomical information or documentary, physical, or medical 
evidence of the individual's gender identity; and
    (4) Eligibility determinations are made and assisted housing is made 
available in CPD programs as required by Sec.  5.105(a)(2).
    (c) Placement and accommodation in temporary, emergency shelters and 
other buildings and facilities with shared sleeping quarters or shared 
bathing facilities--(1) Placement and accommodation. Placement and 
accommodation of an individual in temporary, emergency shelters and 
other buildings and facilities with physical limitations or 
configurations that require and are permitted to have shared sleeping 
quarters or shared bathing facilities shall be made in accordance with 
the individual's gender identity.
    (2) Post-admission accommodations. A recipient, subrecipient, owner, 
operator, manager, or provider must take nondiscriminatory steps that 
may be necessary and appropriate to address privacy concerns raised by 
residents or occupants and, as needed, update its admissions, occupancy, 
and operating policies and procedures in accordance with paragraph (b) 
of this section.
    (d) Documentation and record retention. Providers shall document and 
maintain records of compliance with the requirements in paragraph (b) of 
this section for a period of 5 years.

[81 FR 64782, Sept. 21, 2016]



Sec.  5.107  Audit requirements for non-profit organizations.

    Non-profit organizations subject to regulations in the part 200 and 
part 800

[[Page 45]]

series of title 24 of the CFR shall comply with the audit requirements 
of 2 CFR part 200, subpart F. For HUD programs, a non-profit 
organization is the mortgagor or owner (as these terms are defined in 
the regulations in the part 200 and part 800 series) and not a related 
or affiliated organization or entity.

[62 FR 61617, Nov. 18, 1997, as amended at 80 FR 75934, Dec. 7, 2015]



Sec.  5.109  Equal participation of faith-based organizations in HUD
programs and activities.

    (a) Purpose. Consistent with Executive Order 13279 (issued on 
December 12, 2002, 67 FR 77141), entitled ``Equal Protection of the Laws 
for Faith-Based and Community Organizations,'' as amended by Executive 
Order 13559 (issued on November 17, 2010, 75 FR 71319), entitled 
``Fundamental Principles and Policymaking Criteria for Partnerships With 
Faith-Based and Other Neighborhood Organizations,'' this section 
describes requirements for ensuring the equal participation of faith-
based organizations in HUD programs and activities. These requirements 
apply to all HUD programs and activities, including all of HUD's Native 
American Programs, except as may be otherwise noted in the respective 
program regulations in title 24 of the Code of Federal Regulations 
(CFR), or unless inconsistent with certain HUD program authorizing 
statutes.
    (b) Definitions. The following definitions apply to this section:
    Direct Federal financial assistance means Federal financial 
assistance provided when a Federal Government agency or an intermediary, 
as defined in this section, selects the provider and either purchases 
services from that provider (i.e., via a contract) or awards funds to 
that provider to carry out an activity (e.g., via grant, sub-grant, sub-
award, or cooperative agreement). The recipients of sub-grants or sub-
awards that receive Federal financial assistance through State-
administered programs (e.g., flow-through programs) are considered 
recipients of direct Federal financial assistance. In general, Federal 
financial assistance shall be treated as direct, unless it meets the 
definition of indirect Federal financial assistance.
    Federal financial assistance means assistance that non-Federal 
entities receive or administer in the forms of grants, contracts, loans, 
loan guarantees, property, cooperative agreements, food commodities, 
direct appropriations, or other assistance, but does not include a tax 
credit, deduction, or exemption.
    Indirect Federal financial assistance means Federal financial 
assistance provided when the choice of the provider is placed in the 
hands of the beneficiary, and the cost of that service is paid through a 
voucher, certificate, or other similar means of Government-funded 
payment. Federal financial assistance provided to an organization is 
considered indirect when the Government program through which the 
beneficiary receives the voucher, certificate, or other similar means of 
Government-funded payment is neutral toward religion; the organization 
receives the assistance as a result of a decision of the beneficiary, 
not a decision of the Government; and the beneficiary has at least one 
adequate secular option for the use of the voucher, certificate, or 
other similar means of Government-funded payment.
    Intermediary means an entity, including a nongovernmental 
organization, acting under a contract, grant, or other agreement with 
the Federal Government or with a State, tribal or local government that 
accepts Federal financial assistance and distributes that assistance to 
other entities that, in turn, carry out activities under HUD programs.
    (c) Equal participation of faith-based organizations in HUD programs 
and activities. Faith-based organizations are eligible, on the same 
basis as any other organization, to participate in HUD programs and 
activities. Neither the Federal Government, nor a State, tribal or local 
government, nor any other entity that administers any HUD program or 
activity, shall discriminate against an organization on the basis of the 
organization's religious character or affiliation, or lack thereof. In 
addition, decisions about awards of Federal financial assistance must be 
free from

[[Page 46]]

political interference or even the appearance of such interference and 
must be made on the basis of merit, not based on the religious character 
or affiliation, or lack thereof, of an organization.
    (d) Separation of explicitly religious activities from direct 
Federal financial assistance. (1) A faith-based organization that 
applies for, or participates in, a HUD program or activity supported 
with Federal financial assistance retains its independence and may 
continue to carry out its mission, including the definition, 
development, practice, and expression of its religious beliefs, provided 
that it does not use direct Federal financial assistance that it 
receives (e.g., via contract, grant, sub-grant, sub-award or cooperative 
agreement) to support or engage in any explicitly religious activities 
(including activities that involve overt religious content such as 
worship, religious instruction, or proselytization), or in any other 
manner prohibited by law.
    (2) A faith-based organization that receives direct Federal 
financial assistance may use space (including a sanctuary, chapel, 
prayer hall, or other space) in its facilities (including a temple, 
synagogue, church, mosque, or other place of worship) to carry out 
activities under a HUD program without removing religious art, icons, 
scriptures, or other religious symbols. In addition, a faith-based 
organization participating in a HUD program or activity retains its 
authority over its internal governance, and may retain religious terms 
in its organization's name, select its board members on a religious 
basis, and include religious references in its organization's mission 
statements and other governing documents.
    (e) Explicitly religious activities. If an organization engages in 
explicitly religious activities (including activities that involve overt 
religious content such as worship, religious instruction, or 
proselytization), the explicitly religious activities must be offered 
separately, in time or location, from the programs or activities 
supported by direct Federal financial assistance and participation must 
be voluntary for the beneficiaries of the programs or activities that 
receive direct Federal financial assistance.
    (f) Intermediary responsibilities to ensure equal participation of 
faith-based organizations in HUD programs. If an intermediary--acting 
under a contract, grant, or other agreement with the Federal Government 
or with a State, tribal or local government that is administering a 
program supported by Federal financial assistance--is given the 
authority to select a nongovernmental organization to receive Federal 
financial assistance under a contract, grant, sub-grant, sub-award, or 
cooperative agreement, the intermediary must ensure that such 
organization complies with the requirements of this section. If the 
intermediary is a nongovernmental organization, it retains all other 
rights of a nongovernmental organization under the program's statutory 
and regulatory provisions.
    (g) Beneficiary protections. Faith-based organizations that carry 
out programs or activities with direct Federal financial assistance from 
HUD must give written notice to beneficiaries and prospective 
beneficiaries of the programs or activities describing certain 
protections available to them, as provided in this subsection. In 
addition, if a beneficiary or prospective beneficiary objects to the 
religious character of the organization carrying out the programs or 
activities, that organization must promptly undertake reasonable efforts 
to identify and refer the beneficiary or prospective beneficiary to an 
alternative provider to which the beneficiary or prospective beneficiary 
has no such objection.
    (1) Written notice. The written notice must state that:
    (i) The organization may not discriminate against a beneficiary or 
prospective beneficiary on the basis of religion, religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice;
    (ii) The organization may not require beneficiaries to attend or 
participate in any explicitly religious activities that are offered by 
the organization, and any participation by beneficiaries in such 
activities must be purely voluntary;

[[Page 47]]

    (iii) The organization must separate, in time or location, any 
privately funded explicitly religious activities from activities 
supported by direct Federal financial assistance;
    (iv) If a beneficiary objects to the religious character of the 
organization, the organization must undertake reasonable efforts to 
identify and refer the beneficiary to an alternative provider to which 
the beneficiary has no such objection; and
    (v) Beneficiaries or prospective beneficiaries may report an 
organization's violation of these protections, including any denial of 
services or benefits by an organization, by contacting or filing a 
written complaint to HUD or the intermediary, if applicable.
    (2) Timing of notice. The written notice must be given to 
prospective beneficiaries before they enroll in any HUD program or 
activity. When the nature of the program or activity or exigent 
circumstances make it impracticable to provide the written notice in 
advance, the organization must provide written notice to beneficiaries 
of their protections at the earliest available opportunity.
    (3) Referral requirements. (i) If a beneficiary or prospective 
beneficiary of a program or activity that receives direct Federal 
financial assistance from HUD objects to the religious character of an 
organization that carries out the program or activity, that organization 
must promptly undertake reasonable efforts to identify and refer the 
beneficiary or prospective beneficiary to an alternative provider to 
which the beneficiary or prospective beneficiary has no such objection.
    (ii) A referral may be made to another faith-based organization, if 
the beneficiary or prospective beneficiary has no objection to that 
provider based on the provider's religious character. But if the 
beneficiary or prospective beneficiary requests a secular provider, and 
a secular provider is available, then a referral must be made to that 
provider.
    (iii) Except for activities carried out by telephone, Internet, or 
similar means, the referral must be to an alternative provider that is 
in reasonable geographic proximity to the organization making the 
referral and that carries out activities that are similar in substance 
and quality to those offered by the organization. The alternative 
provider also must have the capacity to accept additional beneficiaries.
    (iv) If the organization determines that it is unable to identify an 
alternative provider, the organization shall promptly notify the 
intermediary or, if there is no intermediary, HUD. If HUD or an 
intermediary is notified that an organization is unable to identify an 
alternative provider, HUD or the intermediary, as appropriate, shall 
promptly determine whether there is any other suitable alternative 
provider to which the beneficiary or prospective beneficiary may be 
referred. An intermediary that receives a request for assistance in 
identifying an alternative provider may request assistance from HUD.
    (4) Recordkeeping. A faith-based organization providing a referral 
under paragraph (g)(3) of this section must document a beneficiary or 
prospective beneficiary's request for a referral, whether the 
beneficiary or prospective beneficiary was referred to another provider, 
to which provider the beneficiary or prospective beneficiary was 
referred, and if the beneficiary or prospective beneficiary contacted 
the alternative provider, unless the beneficiary or prospective 
beneficiary requests no follow up.
    (h) Nondiscrimination requirements. Any organization that receives 
Federal financial assistance under a HUD program or activity shall not, 
in providing services or carrying out activities with such assistance, 
discriminate against a beneficiary or prospective beneficiary on the 
basis of religion, religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious practice. 
However, this section does not require any organization that only 
receives indirect Federal financial assistance to modify its program or 
activities to accommodate a beneficiary that selects the organization to 
receive indirect aid.
    (i) Exemption from Title VII employment discrimination requirements. 
A religious organization's exemption from the Federal prohibition on 
employment discrimination on the basis of religion, set forth in section 
702(a) of the Civil

[[Page 48]]

Rights Act of 1964 (42 U.S.C. 2000e-1), is not forfeited when the 
organization participates in a HUD program. Some HUD programs, however, 
contain independent statutory provisions that impose certain 
nondiscrimination requirements on all grantees. Accordingly, grantees 
should consult with the appropriate HUD program office to determine the 
scope of applicable requirements.
    (j) Acquisition, construction, and rehabilitation of structures. 
Direct Federal financial assistance may be used for the acquisition, 
construction, or rehabilitation of structures only to the extent that 
those structures are used for conducting eligible activities under a HUD 
program or activity. Where a structure is used for both eligible and 
explicitly religious activities (including activities that involve overt 
religious content such as worship, religious instruction, or 
proselytization), direct Federal financial assistance may not exceed the 
cost of the share of acquisition, construction, or rehabilitation 
attributable to eligible activities in accordance with the cost 
accounting requirements applicable to the HUD program or activity. 
However, acquisition, construction, or rehabilitation of sanctuaries, 
chapels, or other rooms that a HUD-funded faith-based organization uses 
as its principal place of worship, may not be paid with direct Federal 
financial assistance. Disposition of real property by a faith-based 
organization after its use for an authorized purpose, or any change in 
use of the property from an authorized purpose, is subject to 
Government-wide regulations governing real property disposition (2 CFR 
part 200, subpart D) and the HUD program regulations, as directed by 
HUD.
    (k) Commingling of Federal and State, tribal, and local funds. If a 
State, tribal, or local government voluntarily contributes its own funds 
to supplement direct Federal financial assistance for an activity, the 
State, tribal or local government has the option to segregate those 
funds or commingle them with the direct Federal financial assistance. 
However, if the funds are commingled, the requirements of this section 
apply to all of the commingled funds. Further, if a State, tribal, or 
local government is required to contribute matching funds to supplement 
direct Federal financial assistance for an activity, the matching funds 
are considered commingled with the direct Federal financial assistance 
and, therefore, subject to the requirements of this section. Some HUD 
programs' requirements govern any activity assisted under those 
programs. Accordingly, recipients should consult with the appropriate 
HUD program office to determine the scope of applicable requirements.

[69 FR 41717, July 9, 2004, as amended at 80 FR 75934, Dec. 7, 2015; 81 
FR 19416, Apr. 4, 2016]



Sec.  5.110  Waivers.

    Upon determination of good cause, the Secretary may, subject to 
statutory limitations, waive any provision of this title and delegate 
this authority in accordance with section 106 of the Department of 
Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3535(q)).



Sec.  5.111  Housing counseling.

    (a) Any housing counseling, including homeownership counseling or 
rental housing counseling, as defined in Sec.  5.100, required under or 
provided in connection with any program administered by HUD shall be 
provided only by organizations and counselors certified by the Secretary 
under 24 CFR part 214 to provide housing counseling, consistent with 12 
U.S.C. 1701x.
    (b) For purposes of this section, required under or provided in 
connection with any program administered by HUD means:
    (1) Housing counseling required by statute, regulation, Notice of 
Funding Availability (NOFA), or otherwise required by HUD;
    (2) Housing counseling that is funded under a HUD program;
    (3) Housing counseling that is required by a grantee or subgrantee 
of a HUD program as a condition of receiving assistance under the HUD 
program; or
    (4) Housing counseling to which a family assisted under a HUD 
program is referred, by a grantee or subgrantee of the HUD program.

[81 FR 90657, Dec. 14, 2016]

[[Page 49]]

                  Affirmatively Furthering Fair Housing

    Source: Sections 5.150 through 5.180 appear at 80 FR 42352, July 16, 
2015, unless otherwise noted.



Sec.  5.150  Affirmatively Furthering Fair Housing: Purpose.

    Pursuant to the affirmatively furthering fair housing mandate in 
section 808(e)(5) of the Fair Housing Act, and in subsequent legislative 
enactments, the purpose of the Affirmatively Furthering Fair Housing 
(AFFH) regulations in Sec. Sec.  5.150 through 5.180 is to provide 
program participants with an effective planning approach to aid program 
participants in taking meaningful actions to overcome historic patterns 
of segregation, promote fair housing choice, and foster inclusive 
communities that are free from discrimination. The regulations establish 
specific requirements for the development and submission of an 
Assessment of Fair Housing (AFH) by program participants (including 
local governments, States, and public housing agencies (PHAs)), and the 
incorporation and implementation of that AFH into subsequent 
consolidated plans and PHA Plans in a manner that connects housing and 
community development policy and investment planning with meaningful 
actions that affirmatively further fair housing. A program participant's 
strategies and actions must affirmatively further fair housing and may 
include various activities, such as developing affordable housing, and 
removing barriers to the development of such housing, in areas of high 
opportunity; strategically enhancing access to opportunity, including 
through: Targeted investment in neighborhood revitalization or 
stabilization; preservation or rehabilitation of existing affordable 
housing; promoting greater housing choice within or outside of areas of 
concentrated poverty and greater access to areas of high opportunity; 
and improving community assets such as quality schools, employment, and 
transportation.



Sec.  5.151  Affirmatively Furthering Fair Housing: Implementation.

    Section 5.160 of the AFH regulations provides the date by which 
program participants must submit their first AFH. A program 
participant's AFH submission date is the date by which the program 
participant must comply with the regulations in Sec. Sec.  5.150 through 
5.180. Until such time, the program participant shall continue to 
conduct an analysis of impediments, as required of the program 
participant under one or more of the HUD programs listed in Sec.  5.154, 
in accordance with requirements in effect prior to August 17, 2015.



Sec.  5.152  Definitions.

    For purposes of Sec. Sec.  5.150 through 5.180, the terms 
``consolidated plan,'' ``consortium,'' ``unit of general local 
government,'' ``jurisdiction,'' and ``State'' are defined in 24 CFR part 
91. For PHAs, ``jurisdiction'' is defined in 24 CFR 982.4. The following 
additional definitions are provided solely for purposes of Sec. Sec.  
5.150 through 5.180 and related amendments in 24 CFR parts 91, 92, 570, 
574, 576, and 903:
    Affirmatively furthering fair housing means taking meaningful 
actions, in addition to combating discrimination, that overcome patterns 
of segregation and foster inclusive communities free from barriers that 
restrict access to opportunity based on protected characteristics. 
Specifically, affirmatively furthering fair housing means taking 
meaningful actions that, taken together, address significant disparities 
in housing needs and in access to opportunity, replacing segregated 
living patterns with truly integrated and balanced living patterns, 
transforming racially and ethnically concentrated areas of poverty into 
areas of opportunity, and fostering and maintaining compliance with 
civil rights and fair housing laws. The duty to affirmatively further 
fair housing extends to all of a program participant's activities and 
programs relating to housing and urban development.
    Assessment of Fair Housing (assessment or AFH) means the analysis 
undertaken pursuant to Sec.  5.154 that includes an analysis of fair 
housing data, an assessment of fair housing issues and contributing 
factors, and an identification

[[Page 50]]

of fair housing priorities and goals, and is conducted and submitted to 
HUD using the Assessment Tool. The AFH may be conducted and submitted by 
an individual program participant (individual AFH), or may be a single 
AFH conducted and submitted by two or more program participants (joint 
AFH) or two or more program participants, where at least two of which 
are consolidated plan program participants (regional AFH).
    Assessment Tool refers collectively to any forms or templates and 
the accompanying instructions provided by HUD that program participants 
must use to conduct and submit an AFH pursuant to Sec.  5.154. HUD may 
provide different Assessment Tools for different types of program 
participants. In accordance with the Paperwork Reduction Act (44 U.S.C. 
Chapter 35) (PRA), the Assessment Tool will be subject to periodic 
notice and opportunity to comment in order to maintain the approval of 
the Assessment Tool as granted by the Office of Management and Budget 
(OMB) under the PRA.
    Community participation, as required in Sec.  5.158, means a 
solicitation of views and recommendations from members of the community 
and other interested parties, a consideration of the views and 
recommendations received, and a process for incorporating such views and 
recommendations into decisions and outcomes. For HUD regulations 
implementing the Housing and Community Development Act of 1974, the 
statutory term for ``community participation'' is ``citizen 
participation,'' and, therefore, the regulations in 24 CFR parts 91, 92, 
570, 574, and 576 use this term.
    Consolidated plan program participant means any entity specified in 
Sec.  5.154(b)(1).
    Contributing factor. See definition of ``fair housing contributing 
factor'' in this section.
    Data. The term ``data'' refers collectively to the sources of data 
provided in paragraphs (1) and (2) of this definition. When 
identification of the specific source of data in paragraph (1) or (2) is 
necessary, the specific source (HUD-provided data or local data) will be 
stated.
    (1) HUD-provided data. As more fully addressed in the Assessment 
Tool, the term ``HUD-provided data'' refers to HUD-provided metrics, 
statistics, and other quantified information required to be used with 
the Assessment Tool. HUD-provided data will not only be provided to 
program participants but will be posted on HUD's Web site for 
availability to all of the public;
    (2) Local data. As more fully addressed in the Assessment Tool, the 
term ``local data'' refers to metrics, statistics, and other quantified 
information, subject to a determination of statistical validity by HUD, 
relevant to the program participant's geographic areas of analysis, that 
can be found through a reasonable amount of search, are readily 
available at little or no cost, and are necessary for the completion of 
the AFH using the Assessment Tool.
    Disability. (1) The term ``disability'' means, with respect to an 
individual:
    (i) A physical or mental impairment that substantially limits one or 
more major life activities of such individual;
    (ii) A record of such an impairment; or
    (iii) Being regarded as having such an impairment.
    (2) The term ``disability'' as used herein shall be interpreted 
consistent with the definition of such term under section 504 of the 
Rehabilitation Act of 1973, as amended by the ADA Amendments Act of 
2008. This definition does not change the definition of ``disability'' 
or ``disabled person'' adopted pursuant to a HUD program statute for 
purposes of determining an individual's eligibility to participate in a 
housing program that serves a specified population.
    Disproportionate housing needs refers to a condition in which there 
are significant disparities in the proportion of members of a protected 
class experiencing a category of housing need when compared to the 
proportion of members of any other relevant groups or the total 
population experiencing that category of housing need in the applicable 
geographic area. For purposes of this definition, categories of housing 
need are based on such factors as cost burden, severe cost burden, 
overcrowding, and substandard housing conditions, as

[[Page 51]]

those terms are applied in the Assessment Tool.
    Fair housing choice means that individuals and families have the 
information, opportunity, and options to live where they choose without 
unlawful discrimination and other barriers related to race, color, 
religion, sex, familial status, national origin, or disability. Fair 
housing choice encompasses:
    (1) Actual choice, which means the existence of realistic housing 
options;
    (2) Protected choice, which means housing that can be accessed 
without discrimination; and
    (3) Enabled choice, which means realistic access to sufficient 
information regarding options so that any choice is informed. For 
persons with disabilities, fair housing choice and access to opportunity 
include access to accessible housing and housing in the most integrated 
setting appropriate to an individual's needs as required under Federal 
civil rights law, including disability-related services that an 
individual needs to live in such housing.
    Fair housing contributing factor (or contributing factor) means a 
factor that creates, contributes to, perpetuates, or increases the 
severity of one or more fair housing issues. Goals in an AFH are 
designed to overcome one or more contributing factors and related fair 
housing issues, as provided in Sec.  5.154.
    Fair housing issue means a condition in a program participant's 
geographic area of analysis that restricts fair housing choice or access 
to opportunity, and includes such conditions as ongoing local or 
regional segregation or lack of integration, racially or ethnically 
concentrated areas of poverty, significant disparities in access to 
opportunity, disproportionate housing needs, and evidence of 
discrimination or violations of civil rights law or regulations related 
to housing. Participation in ``housing programs serving specified 
populations,'' as defined in this section, does not present a fair 
housing issue of segregation, provided that such programs are 
administered by program participants so that the programs comply with 
title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-4) 
(Nondiscrimination in Federally Assisted Programs); the Fair Housing Act 
(42 U.S.C. 3601-19), including the duty to affirmatively further fair 
housing; section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); 
the Americans with Disabilities Act (42 U.S.C. 12101, et seq.); and 
other Federal civil rights statutes and regulations.
    Fair housing enforcement and fair housing outreach capacity means 
the ability of a jurisdiction, and organizations located in the 
jurisdiction, to accept complaints of violations of fair housing laws, 
investigate such complaints, obtain remedies, engage in fair housing 
testing, and educate community members about fair housing laws and 
rights. This definition covers any State or local agency that enforces a 
law substantially equivalent to the Fair Housing Act (see 24 CFR part 
115) and any organization participating in the Fair Housing Initiative 
Programs (see 24 CFR part 125).
    Geographic area means a jurisdiction, region, State, Core-Based 
Statistical Area (CBSA), or another applicable area (e.g., census tract, 
neighborhood, Zip code, block group, housing development, or portion 
thereof) relevant to the analysis required to complete the assessment of 
fair housing, as specified in the Assessment Tool.
    Housing programs serving specified populations. Housing programs 
serving specified populations are HUD and Federal housing programs, 
including designations in the programs, as applicable, such as HUD's 
Supportive Housing for the Elderly, Supportive Housing for Persons with 
Disabilities, homeless assistance programs under the McKinney-Vento 
Homeless Assistance Act (42 U.S.C. 11301 et seq.), and housing 
designated under section 7 of the United States Housing Act of 1937 (42 
U.S.C. 1437e), that:
    (1) Serve specific identified populations; and
    (2) Comply with title VI of the Civil Rights Act of 1964 (42 U.S.C. 
2000d-2000d-4) (Nondiscrimination in Federally Assisted Programs); the 
Fair Housing Act (42 U.S.C. 3601-19), including the duty to 
affirmatively further fair housing; section 504 of the Rehabilitation 
Act of 1973 (29 U.S.C. 794); the Americans with Disabilities Act (42 
U.S.C. 12101, et seq.); and other Federal civil rights statutes and 
regulations.

[[Page 52]]

    Insular area has the same meaning as provided in Sec.  570.405.
    Integration means a condition, within the program participant's 
geographic area of analysis, as guided by the Assessment Tool, in which 
there is not a high concentration of persons of a particular race, 
color, religion, sex, familial status, national origin, or having a 
disability or a particular type of disability when compared to a broader 
geographic area. For individuals with disabilities, integration also 
means that such individuals are able to access housing and services in 
the most integrated setting appropriate to the individual's needs. The 
most integrated setting is one that enables individuals with 
disabilities to interact with persons without disabilities to the 
fullest extent possible, consistent with the requirements of the 
Americans with Disabilities Act (42 U.S.C. 12101 et seq.) and section 
504 of the Rehabilitation Act of 1973 (29 U.S.C. 794). See 28 CFR part 
35, appendix B (addressing 28 CFR 35.130 and providing guidance on the 
American with Disabilities Act regulation on nondiscrimination on the 
basis of disability in State and local government services).
    Joint participants refers to two or more program participants 
conducting and submitting a single AFH (a joint AFH), in accordance with 
Sec.  5.156 and 24 CFR 903.15(a)(1) and (2), as applicable.
    Local knowledge. As more fully addressed in the Assessment Tool, 
local knowledge means information to be provided by the program 
participant that relates to the participant's geographic areas of 
analysis and that is relevant to the program participant's AFH, is known 
or becomes known to the program participant, and is necessary for the 
completion of the AFH using the Assessment Tool.
    Meaningful actions means significant actions that are designed and 
can be reasonably expected to achieve a material positive change that 
affirmatively furthers fair housing by, for example, increasing fair 
housing choice or decreasing disparities in access to opportunity.
    Program participants means any entities specified in Sec.  5.154(b).
    Protected characteristics are race, color, religion, sex, familial 
status, national origin, having a disability, and having a type of 
disability.
    Protected class means a group of persons who have the same protected 
characteristic; e.g., a group of persons who are of the same race are a 
protected class. Similarly, a person who has a mobility disability is a 
member of the protected class of persons with disabilities and a member 
of the protected class of persons with mobility disabilities.
    Qualified public housing agency (Qualified PHA). Refers to a PHA:
    (1) For which the sum of:
    (i) The number of public housing dwelling units administered by the 
PHA; and
    (ii) The number of vouchers under section 8(o) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(o)) administered by the PHA is 550 
or fewer; and
    (2) That is not designated under section 6(j)(2) of the United 
States Housing Act of 1937 as a troubled PHA, and does not have a 
failing score under the Section 8 Management Assessment Program (SEMAP) 
during the prior 12 months.
    Racially or ethnically concentrated area of poverty means a 
geographic area with significant concentrations of poverty and minority 
populations.
    Regionally collaborating participants refers to joint participants, 
at least two of which are consolidated plan program participants. A PHA 
may participate in a regional assessment in accordance with PHA Plan 
participation requirements under 24 CFR 903.15(a)(1). Regionally 
collaborating participants conduct and submit a single AFH (regional 
AFH) in accordance with Sec.  5.156.
    Segregation means a condition, within the program participant's 
geographic area of analysis, as guided by the Assessment Tool, in which 
there is a high concentration of persons of a particular race, color, 
religion, sex, familial status, national origin, or having a disability 
or a type of disability in a particular geographic area when compared to 
a broader geographic area. For persons with disabilities, segregation 
includes a condition in which the housing or services are not in the 
most integrated setting appropriate to an individual's needs in 
accordance with the

[[Page 53]]

requirements of the Americans with Disabilities Act (42 U.S.C. 12101, et 
seq.), and section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 
794). (See 28 CFR part 35, appendix B, addressing 25 CFR 35.130.) 
Participation in ``housing programs serving specified populations'' as 
defined in this section does not present a fair housing issue of 
segregation, provided that such programs are administered to comply with 
title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-4) 
(Nondiscrimination in Federally Assisted Programs): The Fair Housing Act 
(42 U.S.C. 3601-19), including the duty to affirmatively further fair 
housing: section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); 
the Americans with Disabilities Act (42 U.S.C. 12101, et seq.); and 
other Federal civil rights statutes and regulations.
    Significant disparities in access to opportunity means substantial 
and measurable differences in access to educational, transportation, 
economic, and other important opportunities in a community, based on 
protected class related to housing.



Sec.  5.154  Assessment of Fair Housing (AFH).

    (a) General. To develop a successful affirmatively furthering fair 
housing strategy, it is central to assess the elements and factors that 
cause, increase, contribute to, maintain, or perpetuate segregation, 
racially or ethnically concentrated areas of poverty, significant 
disparities in access to opportunity, and disproportionate housing 
needs. For HUD program participants already required to develop plans 
for effective uses of HUD funds consistent with the statutory 
requirements and goals governing such funds, an AFH will be integrated 
into such plans.
    (b) Requirement to submit an AFH. In furtherance of the statutory 
obligation to affirmatively further fair housing, an AFH must be 
developed following the AFH consultation, content, and submission 
requirements described in Sec. Sec.  5.150 through 5.180, and submitted 
in a manner and form prescribed by HUD by the following entities:
    (1) Jurisdictions and Insular Areas that are required to submit 
consolidated plans for the following programs:
    (i) The Community Development Block Grant (CDBG) program (see 24 CFR 
part 570, subparts D and I);
    (ii) The Emergency Solutions Grants (ESG) program (see 24 CFR part 
576);
    (iii) The HOME Investment Partnerships (HOME) program (see 24 CFR 
part 92); and
    (iv) The Housing Opportunities for Persons With AIDS (HOPWA) program 
(see 24 CFR part 574).
    (2) Public housing agencies (PHAs) receiving assistance under 
sections 8 or 9 of the United States Housing Act of 1937 (42 U.S.C. 
1437f or 42 U.S.C.1437g).
    (c) Fair housing data. Program participants will use HUD-provided 
data, as defined within the definition of ``data'' in Sec.  5.152, and 
supplement the HUD-provided data, as needed, with local data and local 
knowledge, as guided by the Assessment Tool.
    (d) Content. Using the Assessment Tool prescribed by HUD, each 
program participant shall conduct an AFH for the purpose of examining 
its programs, jurisdiction, and region, and identifying goals to 
affirmatively further fair housing and to inform fair housing strategies 
in the consolidated plan, annual action plan, the PHA Plan and any other 
plan incorporated therein, and community plans including, but not 
limited to, education, transportation, or environmental related plans. 
The AFH's analysis, goals, and priorities will address integration and 
segregation; racially or ethnically concentrated areas of poverty; 
disparities in access to opportunity; and disproportionate housing needs 
based on race, color, religion, sex, familial status, national origin, 
and disability. The AFH will assess the jurisdiction's fair housing 
enforcement and fair housing outreach capacity. At a minimum, the AFH 
will include the following elements:
    (1) Summary of fair housing issues and capacity. The AFH must 
include a summary of fair housing issues in the jurisdiction, including 
any findings, lawsuits, enforcement actions, settlements, or judgments 
related to fair housing or other civil rights laws, an assessment of 
compliance with existing fair housing laws and regulations, and an 
assessment of the jurisdiction's fair

[[Page 54]]

housing enforcement and fair housing outreach capacity.
    (2) Analysis of data. Using HUD-provided data, local data, local 
knowledge, including information gained through community participation, 
and the Assessment Tool, the program participant will undertake the 
analysis required by this section. This analysis will address the 
following to the extent the data or local knowledge are informative of 
the following:
    (i) Identification of integration and segregation patterns and 
trends based on race, color, religion, sex, familial status, national 
origin, and disability within the jurisdiction and region;
    (ii) Identification of racially or ethnically concentrated areas of 
poverty within the jurisdiction and region;
    (iii) Identification of significant disparities in access to 
opportunity for any protected class within the jurisdiction and region; 
and
    (iv) Identification of disproportionate housing needs for any 
protected class within the jurisdiction and region.
    (3) Assessment of fair housing issues. Using the Assessment Tool 
provided by HUD, the AFH will identify the contributing factors for 
segregation, racially or ethnically concentrated areas of poverty, 
disparities in access to opportunity, and disproportionate housing needs 
as identified under paragraph (d)(2) of this section.
    (4) Identification of fair housing priorities and goals. Consistent 
with the identification of fair housing issues, and the analysis and 
assessment conducted under paragraphs (d)(1) through (3) of this 
section, the AFH must:
    (i) Identify and discuss the fair housing issues arising from the 
assessment; and
    (ii) Identify significant contributing factors, prioritize such 
factors, and justify the prioritization of the contributing factors that 
will be addressed in the program participant's fair housing goals. In 
prioritizing contributing factors, program participants shall give 
highest priority to those factors that limit or deny fair housing choice 
or access to opportunity, or negatively impact fair housing or civil 
rights compliance; and
    (iii) Set goals for overcoming the effects of contributing factors 
as prioritized in accordance with paragraph (d)(4)(ii) of this section. 
For each goal, a program participant must identify one or more 
contributing factors that the goal is designed to address, describe how 
the goal relates to overcoming the identified contributing factor(s) and 
related fair housing issue(s), and identify the metrics and milestones 
for determining what fair housing results will be achieved. For 
instance, where segregation in a development or geographic area is 
determined to be a fair housing issue, with at least one significant 
contributing factor, HUD would expect the AFH to include one or more 
goals to reduce the segregation.
    (5) Strategies and actions. To implement goals and priorities in an 
AFH, strategies and actions shall be included in program participants' 
consolidated plans, Annual Action Plans, and PHA Plans (including any 
plans incorporated therein), and need not be reflected in their AFH. 
Strategies and actions must affirmatively further fair housing and may 
include, but are not limited to, enhancing mobility strategies and 
encouraging development of new affordable housing in areas of 
opportunity, as well as place-based strategies to encourage community 
revitalization, including preservation of existing affordable housing, 
including HUD-assisted housing.
    (6) Summary of community participation. The AFH must include a 
concise summary of the community participation process, public comments, 
and efforts made to broaden community participation in the development 
of the AFH; a summary of the comments, views, and recommendations, 
received in writing, or orally at public hearings, during the community 
participation process; and a summary of any comments, views, and 
recommendations not accepted by the program participant and the reasons 
for nonacceptance.
    (7) Review of progress achieved since submission of prior AFH. For 
each AFH submitted after the first AFH submission, the program 
participant will provide a summary of progress achieved in meeting the 
goals and associated metrics and milestones of the prior AFH, and 
identify any barriers that

[[Page 55]]

impeded or prevented achievement of goals.



Sec.  5.156  Joint and Regional AFHs.

    (a) General. For the purposes of sharing resources and addressing 
fair housing issues from a broader perspective, program participants are 
encouraged to collaborate to conduct and submit a single AFH, either a 
joint AFH or regional AFH (as defined in Sec.  5.152), for the purpose 
of evaluating fair housing issues and contributing factors.
    (1) Collaborating program participants, whether joint participants 
or regionally collaborating participants, need not be located in 
contiguous jurisdictions and may cross State boundaries, provided that 
the collaborating program participants are located within the same Core 
Based Statistical Area (CBSA), as defined by the United States Office of 
Management and Budget (OMB) at the time of submission of the joint or 
regional AFH.
    (2) Program participants, whether contiguous or noncontiguous, that 
are either not located within the same CBSA or that are not located 
within the same State and seek to collaborate on an AFH, must submit a 
written request to HUD for approval of the collaboration, stating why 
the collaboration is appropriate. The collaboration may proceed upon 
approval by HUD.
    (3) Collaborating program participants must designate, through 
express written consent, one participant as the lead entity to oversee 
the submission of the joint or regional AFH on behalf of all 
collaborating program participants. When collaborating to submit a joint 
or regional AFH, program participants may divide work as they choose, 
but all program participants are accountable for the analysis and any 
joint goals and priorities, and each collaborating program participant 
must sign the AFH submitted to HUD. Collaborating program participants 
are also accountable for their individual analysis, goals, and 
priorities to be included in the collaborative AFH.
    (4) Program participants that intend to prepare either a joint or 
regional AFH shall promptly notify HUD of such intention and provide HUD 
with a copy of their written agreement.
    (b) Coordinating program years and submission deadlines. (1) To the 
extent practicable, all collaborating program participants must be on 
the same program year and fiscal year (as applicable) before submission 
of the joint AFH or regional AFH. (See Sec.  5.160 and 24 CFR 91.10 and 
903.5.) The applicable procedures for changing consolidated plan program 
participant program year start dates, if necessary, are described in 24 
CFR 91.10. The applicable procedures for changing PHA fiscal year 
beginning dates, if necessary, are described in 24 CFR part 903.
    (2) If alignment of a program year or fiscal year is not 
practicable, the submission deadline for a joint AFH or regional AFH 
must be based on the designated lead entity's program year start date or 
fiscal year beginning date (as applicable), as provided in Sec.  
5.160(c). Within 12 months after the date of AFH acceptance, each 
collaborating program participant that has a program year start date, or 
fiscal year beginning date, earlier than the designated lead entity must 
make appropriate revisions to its full consolidated plan (as described 
in Sec.  91.15(b)(2) of this chapter), or PHA Plan and any plan 
incorporated therein, to incorporate strategies and proposed actions 
consistent with the fair housing goals, issues, and other elements 
identified in the joint AFH or regional AFH.
    (c) Procedures for withdrawal from a joint or regional 
collaboration. A program participant that, for any reason, decides to 
withdraw from a previously arranged collaborative AFH must promptly 
notify HUD of the withdrawal. HUD will work with the withdrawing program 
participant, as well as the remaining collaborative participants, to 
determine whether a new submission date is needed for the withdrawing 
participant or the remaining participants. If a new submission date is 
needed for the withdrawing participant or the remaining participants, 
HUD will establish a submission date that is as close as feasible to the 
originally intended submission date and is no later than the original 
joint or regional submission date unless good cause for an extension is 
shown.
    (d) Community participation. Collaborating program participants must 
have

[[Page 56]]

a plan for community participation that complies with the requirements 
of Sec. Sec.  5.150 through 5.180. The community participation process 
must include residents, and other interested members of the public, in 
the jurisdictions of each collaborating program participant, and not 
just those of the lead entity. In addition, the community participation 
process must be conducted in a manner sufficient for each consolidated 
plan program participant collaborating in a joint AFH or regional AFH to 
certify that it is following its applicable citizen participation plan, 
and for each PHA, collaborating in a joint AFH or regional AFH, to 
satisfy the notice and comment requirements in 24 CFR part 903. To the 
extent that public notice and comment periods provided in Sec. Sec.  
5.150 through 5.180 or in the consolidated plan or PHA plan regulations 
differ, the longer period shall apply. A material change that requires 
any collaborating program participant to revise its AFH pursuant to 
Sec.  5.164(a)(1) will trigger a requirement to revise the joint or 
regional AFH.
    (e) Content of the joint or regional AFH. A joint or regional AFH 
must include the elements required under Sec.  5.154(d). A joint or 
regional AFH does not relieve each collaborating program participant 
from its obligation to analyze and address local and regional fair 
housing issues and contributing factors that affect housing choice, and 
to set priorities and goals for its geographic area to overcome the 
effects of contributing factors and related fair housing issues.



Sec.  5.158  Community participation, consultation, and coordination.

    (a) General. To ensure that the AFH is informed by meaningful 
community participation, program participants must give the public 
reasonable opportunities for involvement in the development of the AFH 
and in the incorporation of the AFH into the consolidated plan, PHA 
Plan, and other required planning documents. To ensure that the AFH, the 
consolidated plan, and the PHA Plan and any plan incorporated therein 
are informed by meaningful community participation, program participants 
should employ communications means designed to reach the broadest 
audience. Such communications may be met, as appropriate, by publishing 
a summary of each document in one or more newspapers of general 
circulation, and by making copies of each document available on the 
Internet, on the program participant's official government Web site, and 
as well at libraries, government offices, and public places. Program 
participants shall ensure that all aspects of community participation 
are conducted in accordance with fair housing and civil rights laws, 
including title VI of the Civil Rights Act of 1964 and the regulations 
at 24 CFR part 1; section 504 of the Rehabilitation Act of 1973 and the 
regulations at 24 CFR part 8; and the Americans with Disabilities Act 
and the regulations at 28 CFR parts 35 and 36, as applicable. At a 
minimum, whether a program participant is preparing an AFH individually 
or in combination with other program participants, AFH community 
participation must include the following for consolidated plan program 
participants and PHAs (as applicable):
    (1) Consolidated plan program participants. The consolidated plan 
program participant must follow the policies and procedures described in 
its applicable citizen participation plan, adopted pursuant to 24 CFR 
part 91 (see 24 CFR 91.105, 91.115, and 91.401), in the process of 
developing the AFH, obtaining community feedback, and addressing 
complaints. The jurisdiction must consult with the agencies and 
organizations identified in consultation requirements at 24 CFR part 91 
(see 24 CFR 91.100, 91.110, and 91.235).
    (2) PHAs. PHAs must follow the policies and procedures described in 
24 CFR 903.13, 903.15, 903.17, and 903.19 in the process of developing 
the AFH, obtaining Resident Advisory Board and community feedback, and 
addressing complaints.
    (b) Coordination. (1) As described in 903.15, a PHA may fulfill its 
responsibility to conduct an AFH by:
    (i) Participating with a consolidated plan program participant, 
including State jurisdictions; or
    (ii) Participating with one or more PHAs in the planning, and 
preparation of the AFH; or
    (iii) Preparing its own AFH.

[[Page 57]]

    (2) When working with other program participants, PHAs are 
encouraged to enter into Memorandums of Understanding (MOUs) to clearly 
define the functions, level of member participation, method of dispute 
resolution, and decisionmaking process of the program participants, in 
the creation of the AFH.



Sec.  5.160  Submission requirements.

    (a) First AFH--(1) Submission deadline for program participants. (i) 
For each program participant listed in this paragraph (a)(1)(i), the 
first AFH shall be submitted no later than 270 calendar days prior to 
the start of:
    (A) For consolidated plan participants not covered in paragraph 
(a)(1)(i)(B) or (C) of this section, the program year that begins on or 
after January 1, 2017 for which a new consolidated plan is due, as 
provided in 24 CFR 91.15(b)(2); and
    (B) For consolidated plan participants whose fiscal year (FY) 2015 
CDBG grant is $500,000 or less, the program year that begins on or after 
January 1, 2018 for which a new consolidated plan is due, as provided in 
24 CFR 91.15(b)(2); and
    (C) For consolidated plan participants that are Insular Areas or 
States, the program year that begins on or after January 1, 2018 for 
which a new consolidated plan is due, as provided in 24 CFR 91.15(b)(2); 
and
    (D) For PHAs, except for qualified PHAs, the PHA's fiscal year that 
begins on or after January 1, 2018 for which a new 5-year plan is due, 
as provided in 24 CFR 903.5; and
    (E) For qualified PHAs, the PHA's fiscal year that begins on or 
after January 1, 2019 for which a new 5-year plan is due, as provided in 
24 CFR 903.5; and
    (F) For joint or regional program participants, the date provided 
under this paragraph (a)(1) or under paragraph (a)(2) of this section, 
dependent upon the program participant that is selected to be the lead 
entity, as provided in Sec.  5.156(b)(2).
    (ii) If the time frame specified in this paragraph (a)(1) would 
result in a first AFH submission date that is less than 9 months after 
the date of publication of the Assessment Tool that is applicable to the 
program participant or lead entity, the participant(s)' submission 
deadline will be extended as specified in that Assessment Tool 
publication to a date that will not be less than 9 months from the date 
of publication of the Assessment Tool.
    (2) Exceptions to the first submission deadline for recently 
completed Regional Analysis of Impediments (RAI). An entitlement 
jurisdiction subject to the submission deadline in paragraph (a)(1) of 
this section is not required to submit an AFH by the deadline specified 
in such paragraph if the entitlement jurisdiction has completed a HUD-
approved RAI in accordance with a grant awarded under HUD's FY 2010 or 
2011 Sustainable Communities Competition and submitted the RAI within 30 
months prior to the date when the program participant's AFH is due as 
provided under this section.
    (3) Compliance with existing requirements until first AFH 
submission. Except as provided in paragraph (a)(4) of this section, 
until such time as program participants are required to submit an AFH, 
the program participant shall continue to conduct an analysis of 
impediments, as required of the program participant by one or more of 
the HUD programs listed in Sec.  5.154, in accordance with requirements 
in effect prior to August 17, 2015.
    (4) New program participants. For a new program participant that has 
not submitted a consolidated plan or PHA plan as of August 17, 2015, HUD 
will provide the new program participant with a deadline for submission 
of its first AFH and the strategies and actions to implement an accepted 
AFH, which shall be incorporated into the program participant's 
consolidated plan or PHA plan, as applicable, within 18 months of the 
start date of its first program year or fiscal year, as applicable.
    (b) Second and subsequent AFHs. After the first AFH, for all program 
participants, subsequent AFHs are due 195 calendar days before the start 
of the first year of the next 3 to 5-year cycle (as applicable), as 
described in paragraph (a)(1) of this section; that is, the subsequent 
AFH is to precede the next strategic plan under 24 CFR 91.15(b)(2) or 5-
year plan under 24 CFR 903.5.

[[Page 58]]

    (c) Collaborative AFHs. All collaborative program participants, 
whether joint participants or regionally collaborating participants, 
will select a lead entity and submit the AFH according to that entity's 
schedule.
    (d) Frequency. All program participants shall submit an AFH no less 
frequently than once every 5 years, or at such time agreed upon in 
writing by HUD and the program participant, in order to coordinate the 
AFH submission with time frames used for consolidated plans, 
participation in a regional AFH, cooperation agreements, PHA Plans, or 
other plans. (See 24 CFR 91.15(b)(2) and 903.15.)
    (e) Certification. Each program participant, including program 
participants submitting a joint or regional AFH, must certify that it 
will take meaningful actions to further the goals identified in its AFH 
conducted in accordance with the requirements in Sec. Sec.  5.150 
through 5.180 and 24 CFR 91.225(a)(1), 91.325(a)(1), 91.425(a)(1), 
570.487(b)(1), 570.601, 903.7(o), and 903.15(d), as applicable. The 
certification will be required at the time a program participant submits 
its first AFH and for each AFH thereafter. If a PHA Plan, consolidated 
plan, Action Plan, or other submission requiring a civil rights-related 
certification is due prior to the time of submission of the AFH, the 
participant will complete a certification, in a form provided by HUD, 
that it will affirmatively further fair housing, or complete such other 
certification that HUD may require in accordance with applicable program 
regulations in effect before August 17, 2015.

[80 FR 42352, July 16, 2015; 80 FR 46487, Aug. 5, 2015]



Sec.  5.162  Review of AFH.

    (a) Review and acceptance of AFH--(1) General. HUD's review of an 
AFH is to determine whether the program participant has met the 
requirements for providing its analysis, assessment, and goal setting, 
as set forth in Sec.  5.154(d). The AFH will be deemed accepted after 60 
calendar days after the date that HUD receives the AFH, unless on or 
before that date, HUD has provided notification that HUD does not accept 
the AFH. In its notification, HUD will inform the program participant in 
writing of the reasons why HUD has not accepted the AFH and the actions 
that the program participant may take to resolve the nonacceptance.
    (2) Meaning of ``acceptance''. HUD's acceptance of an AFH means only 
that, for purposes of administering HUD program funding, HUD has 
determined that the program participant has provided an AFH that meets 
the required elements, as set forth in Sec.  5.154(d). Acceptance does 
not mean that the program participant has complied with its obligation 
to affirmatively further fair housing under the Fair Housing Act; has 
complied with other provisions of the Fair Housing Act; or has complied 
with other civil rights laws and regulations.
    (b) Nonacceptance of an AFH. (1) HUD will not accept an AFH if HUD 
finds that the AFH or a portion of the AFH is inconsistent with fair 
housing or civil rights requirements or is substantially incomplete. In 
connection with a regional or joint AFH, HUD's determination to not 
accept the AFH with respect to one program participant does not 
necessarily affect the acceptance of the AFH with respect to another 
program participant.
    (i) The following are examples of an AFH that is inconsistent with 
fair housing and civil rights requirements:
    (A) HUD determines that the analysis of fair housing issues, fair 
housing contributing factors, goals, or priorities contained in the AFH 
would result in policies or practices that would operate to discriminate 
in violation of the Fair Housing Act or other civil rights laws;
    (B) The AFH does not identify policies or practices as fair housing 
contributing factors, even though they result in the exclusion of a 
protected class from areas of opportunity.
    (ii) The following are examples of an AFH that is substantially 
incomplete:
    (A) The AFH was developed without the required community 
participation or the required consultation;
    (B) The AFH fails to satisfy a required element in Sec. Sec.  5.150 
through 5.180. Failure to satisfy a required element includes an 
assessment in which priorities or goals are materially inconsistent with 
the data or other evidence available to the program participant or

[[Page 59]]

in which priorities or goals are not designed to overcome the effects of 
contributing factors and related fair housing issues.
    (2) HUD will provide written notification to the program 
participant, including each program participant involved in a 
collaborative AFH (joint or regional AFH), of HUD's nonacceptance of the 
AFH and the written notification will specify the reasons why the AFH 
was not accepted and will provide guidance on how the AFH should be 
revised in order to be accepted.
    (c) Revisions and resubmission. HUD will provide a program 
participant, including each program participant involved in a 
collaborative AFH, with a time period to revise and resubmit the AFH, 
which shall be no less than 45 calendar days after the date on which HUD 
provides written notification that it does not accept the AFH. The 
revised AFH will be deemed accepted after 30 calendar days of the date 
by which HUD receives the revised AFH, unless on or before that date HUD 
has provided notification that HUD does not accept the revised AFH.
    (d) Accepted AFH as requirement for consolidated plan and PHA Plan 
approval. If a program participant does not have an accepted AFH, HUD 
will disapprove a consolidated plan (see 24 CFR 91.500) or a PHA Plan 
(see 24 CFR 903.23) except where delayed submission is otherwise 
permitted under Sec.  5.156 or Sec.  5.160.
    (1) If a consolidated plan program participant fails to submit an 
AFH as required by Sec.  5.160, HUD may establish an alternative date 
for the jurisdiction to submit its consolidated plan, but in no event 
past the August 16 deadline provided in 24 CFR 91.15. Failure to submit 
a consolidated plan by August 16 of the Federal fiscal year for which 
funds are appropriated will automatically result in the loss of the CDBG 
funds to which the jurisdiction would otherwise be entitled.
    (2) If a PHA fails to submit the AFH in accordance with Sec.  5.160, 
the PHA must have an accepted AFH no later than 75 calendar days before 
the commencement of the PHA's fiscal year to avoid any potential impacts 
on funding.



Sec.  5.164  Revising an accepted AFH.

    (a) General--(1) Minimum criteria for revising the AFH. An AFH 
previously accepted by HUD must be revised and submitted to HUD for 
review under the following circumstances:
    (i) A material change occurs. A material change is a change in 
circumstances in the jurisdiction of a program participant that affects 
the information on which the AFH is based to the extent that the 
analysis, the fair housing contributing factors, or the priorities and 
goals of the AFH no longer reflect actual circumstances. Examples 
include Presidentially declared disasters, under title IV of the Robert 
T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 
et seq.), in the program participant's area that are of such a nature as 
to significantly impact the steps a program participant may need to take 
to affirmatively further fair housing; significant demographic changes; 
new significant contributing factors in the participant's jurisdiction; 
and civil rights findings, determinations, settlements (including 
Voluntary Compliance Agreements), or court orders; or
    (ii) Upon HUD's written notification specifying a material change 
that requires the revision.
    (2) Criteria for revising the AFH. The criteria that will be used in 
determining when revisions to the AFH are appropriate must be specified 
in the citizen participation plan adopted under the consolidated plan 
pursuant to 24 CFR part 91, and the public participation procedures and 
significant amendment process required under 24 CFR part 903. Such 
criteria must include, at a minimum, the circumstances described in 
paragraph (a)(1) of this section.
    (3) Revised AFH. A revision pursuant to paragraph (a)(1) of this 
section consists of preparing and submitting amended analyses, 
assessments, priorities, and goals that take into account the material 
change, including any new fair housing issues and contributing factors 
that may arise as a result of the material change. A revision may not 
necessarily require the submission of an entirely new AFH. The revision 
need only focus on the material change and appropriate adjustments to 
the

[[Page 60]]

analyses, assessments, priorities, or goals.
    (b) Timeframe for revision. (1) Where a revision is required under 
paragraph (a)(1)(i) of this section, such revision shall be submitted 
within 12 months of the onset of the material change, or at such later 
date as HUD may provide. Where the material change is the result of a 
Presidentially declared disaster, such time shall be automatically 
extended to the date that is 2 years after the date upon which the 
disaster declaration is made, and HUD may extend such deadline, upon 
request, for good cause shown.
    (2)(i) Where a revision is required under paragraph (a)(1)(ii) of 
this section, HUD will specify a date by which the program participant 
must submit the revision of the AFH to HUD, taking into account the 
material change, the program participant's capacity, and the need for a 
valid AFH to guide planning activities. HUD may extend the due date upon 
written request by the program participant that describes the reasons 
the program participant is unable to make the deadline.
    (ii) On or before 30 calendar days following the date of HUD's 
written notification under paragraph (a)(1)(ii) of this section, the 
program participant may advise HUD in writing of its belief that a 
revision to the AFH is not required. The program participant must state 
with specificity the reasons for its belief that a revision is not 
required. HUD will respond on or before 30 calendar days following the 
date of the receipt of the program participant's correspondence and will 
advise the program participant in writing whether HUD agrees or 
disagrees with the program participant. If HUD disagrees, the program 
participant must proceed with the revision. HUD may establish a new due 
date that is later than the date specified in its original notification.
    (c) Community participation. Revisions to an AFH, as described in 
this section, are subject to community participation. The jurisdiction 
must follow the notice and comment process applicable to consolidated 
plan substantial amendments under the jurisdiction's citizen 
participation plan adopted pursuant to 24 CFR part 91 (see 24 CFR 
91.105, 91.115, and 91.401). A consortium must follow the participation 
process applicable to consolidated plan substantial amendments under the 
consortium's citizen participation plan adopted pursuant to 24 CFR 
91.401. Insular areas submitting an abbreviated consolidated plan shall 
follow the citizen participation requirements of 24 CFR 570.441. The PHA 
must follow the notice and comment process applicable to significant 
amendments or modifications pursuant to 24 CFR 903.13, 903.15, 903.17, 
and 903.21.
    (d) Submission to HUD of the revised AFH. Upon completion, any 
revision to the AFH must be made public and submitted to HUD at the time 
of the revision.
    (e) PHAs. Upon any revision to the AFH pursuant to Sec. Sec.  5.150 
through 5.180, PHAs must revise their PHA Plan within 12 months, 
consistent with the AFH revision, and pursuant to 24 CFR 903.15(c).



Sec.  5.166  AFFH certification.

    (a) Certifications. Program participants must certify that they will 
affirmatively further fair housing when required by statutes and 
regulations governing HUD programs. Such certifications are made in 
accordance with applicable program regulations. Consolidated plan 
program participants are subject to the certification requirements in 24 
CFR part 91, and PHA Plan program participants are subject to the 
certification requirements in 24 CFR part 903.
    (b) Procedure for challenging the validity of an AFFH certification. 
(1) For consolidated plan program participants, HUD's challenge to the 
validity of an AFFH certification will be based on procedures and 
standards specified in 24 CFR part 91.
    (2) For PHA Plan program participants, HUD's challenge to the 
validity of an AFFH certification will be based on procedures and 
standards specified in 24 CFR part 903.



Sec.  5.168  Recordkeeping.

    (a) General. Each program participant must establish and maintain 
sufficient records to enable HUD to determine whether the program 
participant has met the requirements of this subpart.

[[Page 61]]

A PHA not preparing its own AFH in accordance with 24 CFR 903.15(a)(3) 
must maintain a copy of the applicable AFH and records reflecting 
actions to affirmatively further fair housing as described in 24 CFR 
903.7(o). All program participants shall make these records available 
for HUD inspection. At a minimum, the following records are needed for 
each consolidated plan program participant and each PHA that prepares 
its own AFH:
    (1) Information and records relating to the program participant's 
AFH and any significant revisions to the AFH, including, but not limited 
to, statistical data, studies, and other diagnostic tools used by the 
jurisdiction; and any policies, procedures, or other documents relating 
to the analysis or preparation of the AFH;
    (2) Records demonstrating compliance with the consultation and 
community participation requirements of Sec. Sec.  5.150 through 5.180 
and applicable program regulations, including the names of organizations 
involved in the development of the AFH, summaries or transcripts of 
public meetings or hearings, written public comments, public notices and 
other correspondence, distribution lists, surveys, or interviews (as 
applicable);
    (3) Records demonstrating the actions the program participant has 
taken to affirmatively further fair housing, including activities 
carried out in furtherance of the assessment; the program participant's 
AFFH goals and strategies set forth in its AFH, consolidated plan, or 
PHA Plan, and any plan incorporated therein; and the actions the program 
participant has carried out to promote or support the goals identified 
in accordance with Sec.  5.154 during the preceding 5 years;
    (4) Where courts or an agency of the United States Government or of 
a State government has found that the program participant has violated 
any applicable nondiscrimination and equal opportunity requirements set 
forth in Sec.  5.105(a) or any applicable civil rights-related program 
requirement, documentation related to the underlying judicial or 
administrative finding and affirmative measures that the program 
participant has taken in response.
    (5) Documentation relating to the program participant's efforts to 
ensure that housing and community development activities (including 
those assisted under programs administered by HUD) are in compliance 
with applicable nondiscrimination and equal opportunity requirements set 
forth in Sec.  5.105(a) and applicable civil rights related program 
requirements;
    (6) Records demonstrating that consortium members, units of general 
local government receiving allocations from a State, or units of general 
local government participating in an urban county have conducted their 
own or contributed to the jurisdiction's assessment (as applicable) and 
documents demonstrating their actions to affirmatively further fair 
housing; and
    (7) Any other evidence relied upon by the program participant to 
support its affirmatively furthering fair housing certification.
    (b) Retention period. All records must be retained for such period 
as may be specified in the applicable program regulations.



Sec. Sec.  5.167-5.180  [Reserved]



  Subpart B_Disclosure and Verification of Social Security Numbers and 
    Employer Identification Numbers; Procedures for Obtaining Income 
                               Information

    Authority: 42 U.S.C. 3535(d), 3543, 3544, and 11901 et seq.

    Source: 61 FR 11113, Mar. 18, 1996, unless otherwise noted.



Sec.  5.210  Purpose, applicability, and Federal preemption.

    (a) Purpose. This subpart B requires applicants for and participants 
in covered HUD programs to disclose, and submit documentation to verify, 
their Social Security Numbers (SSNs). This subpart B also enables HUD 
and PHAs to obtain income information about applicants and participants 
in the covered programs through computer matches with State Wage 
Information Collection Agencies (SWICAs) and Federal agencies, in order 
to verify an applicant's or participant's eligibility for

[[Page 62]]

or level of assistance. The purpose of this subpart B is to enable HUD 
to decrease the incidence of fraud, waste, and abuse in the covered 
programs.
    (b) Applicability. (1) This subpart B applies to mortgage and loan 
insurance and coinsurance and housing assistance programs contained in 
chapter II, subchapter B, and chapters VIII and IX of this title.
    (2) The information covered by consent forms described in this 
subpart involves income information from SWICAs, and wages, net earnings 
from self-employment, payments of retirement income, and unearned income 
as referenced at 26 U.S.C. 6103. In addition, consent forms may 
authorize the collection of other information from applicants and 
participants to determine eligibility or level of benefits.
    (c) Federal preemption. This subpart B preempts any State law, 
including restrictions and penalties, that governs the collection and 
use of income information to the extent State law is inconsistent with 
this subpart.

[61 FR 11113, Mar. 18, 1996, as amended at 65 FR 16715, Mar. 29, 2000]



Sec.  5.212  Compliance with the Privacy Act and other requirements.

    (a) Compliance with the Privacy Act. The collection, maintenance, 
use, and dissemination of SSNs, EINs, any information derived from SSNs 
and Employer Identification Numbers (EINs), and income information under 
this subpart shall be conducted, to the extent applicable, in compliance 
with the Privacy Act (5 U.S.C. 552a) and all other provisions of 
Federal, State, and local law.
    (b) Privacy Act notice. All assistance applicants shall be provided 
with a Privacy Act notice at the time of application. All participants 
shall be provided with a Privacy Act notice at each annual income 
recertification.



Sec.  5.214  Definitions.

    In addition to the definitions in Sec.  5.100, the following 
definitions apply to this subpart B:
    Assistance applicant. Except as excluded pursuant to 42 U.S.C. 
3543(b) and 3544(a)(2), this term means the following:
    (1) For any program under 24 CFR parts 215, 221, 236, 290, or 891, 
or any program under Section 8 of the 1937 Act: A family or individual 
that seeks rental assistance under the program.
    (2) For the public housing program: A family or individual that 
seeks admission to the program.
    (3) For any program under 24 CFR part 235: A homeowner or 
cooperative member seeking homeownership assistance (including where the 
individual seeks to assume an existing mortgage).
    Computer match means the automated comparison of data bases 
containing records about individuals.
    Computer matching agreement means the agreement that describes the 
responsibilities and obligations of the parties participating in a 
computer match.
    Consent form means any consent form approved by HUD to be signed by 
assistance applicants and participants for the purpose of obtaining 
income information from employers and SWICAs; return information from 
the Social Security Administration (including wages, net earnings from 
self-employment, and payments of retirement income), as referenced at 26 
U.S.C. 6103(l)(7)(A); and return information for unearned income from 
the Internal Revenue Service, as referenced at 26 U.S.C. 6103(l)(7)(B). 
The consent forms expire after a certain time and may authorize the 
collection of other information from assistance applicants or 
participants to determine eligibility or level of benefits as provided 
in Sec. Sec.  813.109, 913.109, and 950.315 of this title.
    Employer Identification Number (EIN) means the nine-digit taxpayer 
identifying number that is assigned to an individual, trust, estate, 
partnership, association, company, or corporation pursuant to sections 
6011(b), or corresponding provisions of prior law, or 6109 of the 
Internal Revenue Code.
    Entity applicant. (1) Except as excluded pursuant to 42 U.S.C. 
3543(b), 3544(a)(2), and paragraph (2) of this definition, this term 
means a partnership, corporation, or any other association or entity, 
other than an individual owner applicant, that seeks to participate as a 
private owner in any of the following:

[[Page 63]]

    (i) The project-based assistance programs under Section 8 of the 
1937 Act;
    (ii) The programs in 24 CFR parts 215, 221, or 236; or
    (iii) The other mortgage and loan insurance programs in 24 CFR parts 
201 through 267, except that the term ``entity applicant'' does not 
include a mortgagee or lender.
    (2) The term does not include a public entity, such as a PHA, IHA, 
or State Housing Finance Agency.
    Federal agency means a department of the executive branch of the 
Federal Government.
    Income information means information relating to an individual's 
income, including:
    (1) All employment income information known to current or previous 
employers or other income sources that HUD or the processing entity 
determines is necessary for purposes of determining an assistance 
applicant's or participant's eligibility for, or level of assistance in, 
a covered program;
    (2) All information about wages, as defined in the State's 
unemployment compensation law, including any Social Security Number; 
name of the employee; quarterly wages of the employee; and the name, 
full address, telephone number, and, when known, Employer Identification 
Number of an employer reporting wages under a State unemployment 
compensation law;
    (3) With respect to unemployment compensation:
    (i) Whether an individual is receiving, has received, or has applied 
for unemployment compensation;
    (ii) The amount of unemployment compensation the individual is 
receiving or is entitled to receive; and
    (iii) The period with respect to which the individual actually 
received such compensation;
    (4) Unearned IRS income and self-employment, wages and retirement 
income as described in the Internal Revenue Code, 26 U.S.C. 6103(l)(7); 
and
    (5) Wage, social security (Title II), and supplemental security 
income (Title XVI) data obtained from the Social Security 
Administration.
    Individual owner applicant. Except as excluded pursuant to 42 U.S.C. 
3543(b), 3544(a)(2), or paragraph (2) of this definition, this term 
means:
    (1) An individual who seeks to participate as a private owner in any 
of:
    (i) The project-based assistance programs under Section 8 of the 
1937 Act; or
    (ii) The programs in 24 CFR parts 215, 221, 235 (without 
homeownership assistance), or 236, including where the individual seeks 
to assume an existing mortgage; or
    (2) An individual who:
    (i) Either: (A) Applies for a mortgage or loan insured or coinsured 
under any of the programs referred to in paragraph (1)(iii) of the 
definition of ``entity applicant'' in this section; or
    (B) Seeks to assume an existing mortgage or loan; and
    (ii) Intends to hold the mortgaged property in his or her individual 
right.
    IRS means the Internal Revenue Service.
    Owner means the person or entity (or employee of an owner) that 
leases an assisted dwelling unit to an eligible family and includes, 
when applicable, a mortgagee.
    Participant. Except as excluded pursuant to 42 U.S.C. 3543(b) and 
3544(a)(2), this term has the following meaning:
    (1) For any program under 24 CFR part 891, or Section 8 of the 1937 
Act: A family receiving rental assistance under the program;
    (2) For the public housing program: A family or individual that is 
assisted under the program;
    (3) For 24 CFR parts 215, 221, 236, and 290: A tenant or qualified 
tenant under any of the programs; and
    (4) For 24 CFR part 235: A homeowner or a cooperative member 
receiving homeownership assistance.
    Processing entity means the person or entity that, under any of the 
programs covered under this subpart B, is responsible for making 
eligibility and related determinations and an income reexamination. (In 
the Section 8 and public housing programs, the ``processing entity'' is 
the ``responsible entity'' as defined in Sec.  5.100.)
    Social Security Number (SSN) means the nine-digit number that is 
assigned to a person by the Social Security Administration and that 
identifies the

[[Page 64]]

record of the person's earnings reported to the Social Security 
Administration. The term does not include a number with a letter as a 
suffix that is used to identify an auxiliary beneficiary.
    SSA means the Social Security Administration.
    State Wage Information Collection Agency (SWICA) means the State 
agency, including any Indian tribal agency, receiving quarterly wage 
reports from employers in the State, or an alternative system that has 
been determined by the Secretary of Labor to be as effective and timely 
in providing employment-related income and eligibility information.

[61 FR 11113, Mar. 18, 1996, as amended at 63 FR 23853, Apr. 30, 1998; 
65 FR 16715, Mar. 29, 2000]

  Disclosure and Verification of Social Security Numbers and Employer 
 Identification Numbers for Applicants and Participants in Certain HUD 
                                Programs



Sec.  5.216  Disclosure and verification of Social Security and 
Employer Identification Numbers.

    (a) General. The requirements of this section apply to applicants 
and participants as described in this section, except that this section 
is inapplicable to individuals who do not contend eligible immigration 
status under subpart E of this part (see Sec.  5.508).
    (b) Disclosure required of assistance applicants. Each assistance 
applicant must submit the following information to the processing entity 
when the assistance applicant's eligibility under the program involved 
is being determined.
    (1) The complete and accurate SSN assigned to the assistance 
applicant and to each member of the assistance applicant's household; 
and
    (2) The documentation referred to in paragraph (g)(1) of this 
section to verify each such SSN.
    (c) Disclosure required of individual owner applicants. Each 
individual owner applicant must submit the following information to the 
processing entity when the individual owner applicant's eligibility 
under the program involved is being determined:
    (1) The complete and accurate SSN assigned to the individual owner 
applicant and to each member of the individual owner applicant's 
household who will be obligated to pay the debt evidenced by the 
mortgage or loan documents; and
    (2) The documentation referred to in paragraph (g)(1) of this 
section to verify each such SSN.
    (d) Disclosure required of certain officials of entity applicants. 
Each officer, director, principal stockholder, or other official of an 
entity applicant must submit the following information to the processing 
entity when the entity applicant's eligibility under the program 
involved is being determined:
    (1) The complete and accurate SSN assigned to each such individual; 
and
    (2) The documentation referred to in paragraph (g)(1) of this 
section to verify each SSN.
    (e) Disclosure required of participants--(1) Initial disclosure. (i) 
Each participant, except those age 62 or older as of January 31, 2010, 
whose initial determination of eligibility was begun before January 31, 
2010, must submit the information described in paragraph (e)(1)(ii) of 
this section, if the participant has:
    (A) Not previously disclosed a SSN;
    (B) Previously disclosed a SSN that HUD or the SSA determined was 
invalid; or
    (C) Been issued a new SSN.
    (ii) Each participant subject to the disclosure requirements under 
paragraph (e)(1)(i) of this section must submit the following 
information to the processing entity at the next interim or regularly 
scheduled reexamination or recertification of family composition or 
income, or other reexamination or recertification for the program 
involved:
    (A) The complete and accurate SSN assigned to the participant and to 
each member of the participant's household; and
    (B) The documentation referred to in paragraph (g)(1) of this 
section to verify each such SSN.
    (2) Subsequent disclosure. Once a participant has disclosed and the 
processing entity has verified each SSN, the following rules apply:

[[Page 65]]

    (i) Addition of new household member who is at least 6 years of age 
or under the age of 6 and has an assigned SSN. When the participant 
requests to add a new household member who is at least 6 years of age, 
or is under the age of 6 and has an assigned SSN, the participant must 
provide the following to the processing entity at the time of the 
request, or at the time of processing the interim reexamination or 
recertification of family composition that includes the new member(s):
    (A) The complete and accurate SSN assigned to each new member; and
    (B) The documentation referred to in paragraph (g)(1) of this 
section to verify the SSN for each new member.
    (ii) Addition of new household member who is under the age of 6 and 
has no assigned SSN. (A) When a participant requests to add a new 
household member who is under the age of 6 and has not been assigned a 
SSN, the participant shall be required to provide the complete and 
accurate SSN assigned to each new child and the documentation referred 
to in paragraph (g)(1) of this section to verify the SSN for each new 
child within 90 calendar days of the child being added to the household.
    (B) The processing entity shall grant an extension of one additional 
90-day period if the processing entity, in its discretion, determines 
that the participant's failure to comply was due to circumstances that 
could not have reasonably been foreseen and were outside the control of 
the participant. During the period that the processing entity is 
awaiting documentation of a SSN, the processing entity shall include the 
child as part of the assisted household and the child shall be entitled 
to all the benefits of being a household member. If, upon expiration of 
the provided time period, the participant fails to produce a SSN, the 
processing entity shall follow the provisions of Sec.  5.218.
    (iii) Assignment of new SSN. If the participant or any member of the 
participant's household has been assigned a new SSN, the participant 
must submit the following to the processing entity at either the time of 
receipt of the new SSN; at the next interim or regularly scheduled 
reexamination or recertification of family composition or income, or 
other reexamination or recertification; or at such earlier time 
specified by the processing entity:
    (A) The complete and accurate SSN assigned to the participant or 
household member involved; and
    (B) The documentation referred to in paragraph (g)(1) of this 
section to verify the SSN of each individual.
    (f) Disclosure required of entity applicants. Each entity applicant 
must submit the following information to the processing entity when the 
entity applicant's eligibility under the program involved is being 
determined:
    (1) Any complete and accurate EIN assigned to the entity applicant; 
and
    (2) The documentation referred to in paragraph (g)(2) of this 
section to verify the EIN.
    (g) Required documentation--(1) SSN. The documentation necessary to 
verify the SSN of an individual who is required to disclose his or her 
SSN under paragraphs (a) through (e) of this section is:
    (i) A valid SSN card issued by the SSA;
    (ii) An original document issued by a federal or state government 
agency, which contains the name of the individual and the SSN of the 
individual, along with other identifying information of the individual; 
or
    (iii) Such other evidence of the SSN as HUD may prescribe in 
administrative instructions.
    (2) EIN. The documentation necessary to verify an EIN of an entity 
applicant that is required to disclose its EIN under paragraph (f) of 
this section is the official, written communication from the Internal 
Revenue Service (IRS) assigning the EIN to the entity applicant, or such 
other evidence of the EIN as HUD may prescribe in administrative 
instructions.
    (h) Effect on assistance applicants. (1) Except as provided in 
paragraphs (h)(2) and (3) of this section, if the processing entity 
determines that the assistance applicant is otherwise eligible to 
participate in a program, the assistance applicant may retain its place 
on the waiting list for the program but cannot become a participant 
until it can provide the documentation referred to in paragraph (g)(1) 
of this section to verify the SSN of each member of the household.

[[Page 66]]

    (2) For applicants to the Section 8 Moderate Rehabilitation Single 
Room Occupancy (SRO) Program for Homeless Individuals under 24 CFR part 
882, subpart H, the documentation required in paragraph (g)(1) of this 
section must be provided to the processing entity within 90 calendar 
days from the date of admission into the program. The processing entity 
shall grant an extension of one additional 90-day period if the 
processing entity, in its discretion, determines that the applicant's 
failure to comply was due to circumstances that could not have 
reasonably been foreseen and were outside the control of the applicant. 
If, upon expiration of the provided time period, the individual fails to 
produce a SSN, the processing entity shall follow the provisions of 
Sec.  5.218.
    (3) If a child under the age of 6 years was added to the assistance 
applicant household within the 6-month period prior to the household's 
date of admission (or, for the HCV program, the date of voucher 
issuance), the assistance applicant may become a participant, so long as 
the documentation required in paragraph (g)(1) of this section is 
provided to the processing entity within 90 calendar days from the date 
of admission into the program (or, for the HCV program, the effective 
date of the Housing Assistance Payment contract). The processing entity 
must grant an extension of one additional 90-day period if the 
processing entity determines that, in its discretion, the assistance 
applicant's failure to comply was due to circumstances that could not 
reasonably have been foreseen and were outside the control of the 
assistance applicant. If the applicant family fails to produce the 
documentation required in paragraph (g)(1) of this section within the 
required time period, the processing entity must follow the provisions 
of Sec.  5.218.
    (i) Rejection of documentation. The processing entity must not 
reject documentation referred to in paragraph (g) of this section, 
except as HUD may otherwise prescribe through publicly issued notice.

[74 FR 68932, Dec. 29, 2009, as amended at 81 FR 12369, Mar. 8, 2016]



Sec.  5.218  Penalties for failing to disclose and verify Social 
Security and Employer Identification Numbers.

    (a) Denial of eligibility of assistance applicants and individual 
owner applicants. The processing entity must deny the eligibility of an 
assistance applicant or individual owner applicant in accordance with 
the provisions governing the program involved, if the assistance or 
individual owner applicant does not meet the applicable SSN disclosure, 
documentation, and verification requirements as specified in Sec.  
5.216.
    (b) Denial of eligibility of entity applicants. The processing 
entity must deny the eligibility of an entity applicant in accordance 
with the provisions governing the program involved; if:
    (1) The entity applicant does not meet the EIN disclosure, 
documentation, and verification requirements specified in Sec.  5.216; 
or
    (2) Any of the officials of the entity applicant referred to in 
Sec.  5.216(d) does not meet the applicable SSN disclosure, and 
documentation and verification requirements specified in Sec.  5.216.
    (c) Termination of assistance or termination of tenancy of 
participants. (1) The processing entity must terminate the assistance or 
terminate the tenancy, or both, of a participant and the participant's 
household, in accordance with the provisions governing the program 
involved, if the participant does not meet the applicable SSN 
disclosure, documentation, and verification requirements specified in 
Sec.  5.216.
    (2) The processing entity may defer termination and provide the 
participant with an additional 90 calendar days to disclose a SSN, but 
only if the processing entity, in its discretion, determines that:
    (i) The failure to meet these requirements was due to circumstances 
that could not have reasonably been foreseen and were outside the 
control of the participant; and
    (ii) There is a reasonable likelihood that the participant will be 
able to disclose a SSN by the deadline.
    (3) Failure of the participant to disclose a SSN by the deadline 
specified in paragraph (c)(2) of this section will result in termination 
of the assistance or

[[Page 67]]

tenancy, or both, of the participant and the participant's household.
    (d) Cross reference. Individuals should consult the regulations and 
administrative instructions for the programs covered under this subpart 
B for further information on the use of SSNs and EINs in determinations 
regarding eligibility.

[61 FR 11113, Mar. 18, 1996, as amended at 74 FR 4840, Jan. 27, 2009; 74 
FR 68933, Dec. 29, 2009]

    Procedures for Obtaining Income Information About Applicants and 
                              Participants



Sec.  5.230  Consent by assistance applicants and participants.

    (a) Required consent by assistance applicants and participants. Each 
member of the family of an assistance applicant or participant who is at 
least 18 years of age, and each family head and spouse regardless of 
age, shall sign one or more consent forms.
    (b) Consent authorization--(1) To whom and when. The assistance 
applicant shall submit the signed consent forms to the processing entity 
when eligibility under a covered program is being determined. A 
participant shall sign and submit consent forms at the next regularly 
scheduled income reexamination. Assistance applicants and participants 
shall be responsible for the signing and submitting of consent forms by 
each applicable family member.
    (2) Subsequent consent forms--special cases. Participants are 
required to sign and submit consent forms at the next interim or 
regularly scheduled income reexamination under the following 
circumstances:
    (i) When any person 18 years or older becomes a member of the 
family;
    (ii) When a member of the family turns 18 years of age; and
    (iii) As required by HUD or the PHA in administrative instructions.
    (c) Consent form--contents. The consent form required by this 
section shall contain, at a minimum, the following:
    (1) A provision authorizing HUD and PHAs to obtain from SWICAs any 
information or materials necessary to complete or verify the application 
for participation and to maintain continued assistance under a covered 
program; and
    (2) A provision authorizing HUD, PHAs, or the owner responsible for 
determining eligibility for or the level of assistance to verify with 
previous or current employers income information pertinent to the 
assistance applicant's or participant's eligibility for or level of 
assistance under a covered program;
    (3) A provision authorizing HUD to request income return information 
from the IRS and the SSA for the sole purpose of verifying income 
information pertinent to the assistance applicant's or participant's 
eligibility or level of benefits; and
    (4) A statement that the authorization to release the information 
requested by the consent form expires 15 months after the date the 
consent form is signed.



Sec.  5.232  Penalties for failing to sign consent forms.

    (a) Denial or termination of benefits. In accordance with the 
provisions governing the program involved, if the assistance applicant 
or participant, or any member of the assistance applicant's or 
participant's family, does not sign and submit the consent form as 
required in Sec.  5.230, then:
    (1) The processing entity shall deny assistance to and admission of 
an assistance applicant;
    (2) Assistance to, and the tenancy of, a participant may be 
terminated.
    (b) Cross references. Individuals should consult the regulations and 
administrative instructions for the programs covered under this subpart 
B for further information on the use of income information in 
determinations regarding eligibility.



Sec.  5.233  Mandated use of HUD's Enterprise Income Verification
(EIV) System.

    (a) Programs subject to this section and requirements. (1) The 
requirements of this section apply to entities administering assistance 
under the:
    (i) Public Housing program under 24 CFR part 960;
    (ii) Section 8 Housing Choice Voucher (HCV) program under 24 CFR 
part 982;
    (iii) Moderate Rehabilitation program under 24 CFR part 882;

[[Page 68]]

    (iv) Project-based Voucher program under 24 CFR part 983;
    (v) Project-based Section 8 programs under 24 CFR parts 880, 881, 
883, 884, 886, and 891;
    (vi) Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q);
    (vii) Section 811 of the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 8013);
    (viii) Sections 221(d)(3) and 236 of the National Housing Act (12 
U.S.C. 1715l(d)(3) and 1715z-1); and
    (ix) Rent Supplement program under section 101 of the Housing and 
Urban Development Act of 1965 (12 U.S.C. 1701s).
    (2) Processing entities must use HUD's EIV system in its entirety:
    (i) As a third party source to verify tenant employment and income 
information during mandatory reexaminations or recertifications of 
family composition and income, in accordance with Sec.  5.236, and 
administrative guidance issued by HUD; and
    (ii) To reduce administrative and subsidy payment errors in 
accordance with HUD administrative guidance.
    (b) Penalties for noncompliance. Failure to use the EIV system in 
its entirety may result in the imposition of sanctions and/or the 
assessment of disallowed costs associated with any resulting incorrect 
subsidy or tenant rent calculations, or both.

[74 FR 68934, Dec. 29, 2009]



Sec.  5.234  Requests for information from SWICAs and Federal agencies;
restrictions on use.

    (a) Information available from SWICAs and Federal agencies--to whom 
and what. Income information will generally be obtained through computer 
matching agreements between HUD and a SWICA or Federal agency, or 
between a PHA and a SWICA, as described in paragraph (c) of this 
section. Certification that the applicable assistance applicants and 
participants have signed appropriate consent forms and have received the 
necessary Privacy Act notice is required, as follows:
    (1) When HUD requests the computer match, the processing entity 
shall certify to HUD; and
    (2) When the PHA requests the computer match, the PHA shall certify 
to the SWICA.
    (b) Restrictions on use of information. The restrictions of 42 
U.S.C. 3544(c)(2)(A) apply to the use by HUD or a PHA of income 
information obtained from a SWICA. The restrictions of 42 U.S.C. 
3544(c)(2)(A) and of 26 U.S.C. 6103(l)(7) apply to the use by HUD or a 
PHA of income information obtained from the IRS or SSA.
    (c) Computer matching agreements. Computer matching agreements shall 
specify the purpose and the legal authority for the match, and shall 
include a description of the records to be matched, a statement 
regarding disposition of information generated through the match, a 
description of the administrative and technical safeguards to be used in 
protecting the information obtained through the match, a description of 
the use of records, the restrictions on duplication and redisclosure, a 
certification, and the amount that will be charged for processing a 
request.

(Approved by the Office of Management and Budget under control number 
2508-0008)



Sec.  5.236  Procedures for termination, denial, suspension, or reduction
of assistance based on information obtained from a SWICA or Federal agency.

    (a) Termination, denial, suspension, or reduction of assistance. The 
provisions of 42 U.S.C. 3544(c)(2)(B) and (C) shall govern the 
termination, denial, suspension, or reduction of benefits for an 
assistance applicant or participant based on income information obtained 
from a SWICA or a Federal agency. Procedures necessary to comply with 
these provisions are provided in paragraph (b) of this section.
    (b) Procedures for independent verification. (1) Any determination 
or redetermination of family income verified in accordance with this 
paragraph must be carried out in accordance with the requirements and 
procedures applicable to the individual covered program. Independent 
verification of information obtained from a SWICA or a Federal agency 
may be:
    (i) By HUD;

[[Page 69]]

    (ii) In the case of the public housing program, by a PHA; or
    (iii) In the case of any Section 8 program, by a PHA acting as 
contract administrator under an ACC.
    (2) Upon receiving income information from a SWICA or a Federal 
agency, HUD or, when applicable, the PHA shall compare the information 
with the information about a family's income that was:
    (i) Provided by the assistance applicant or participant to the PHA; 
or
    (ii) Obtained by the owner (or mortgagee, as applicable) from the 
assistance applicant or participant or from his or her employer.
    (3) When the income information reveals an employer or other income 
source that was not disclosed by the assistance applicant or 
participant, or when the income information differs substantially from 
the information received from the assistance applicant or participant or 
from his or her employer:
    (i) HUD or, as applicable or directed by HUD, the PHA shall request 
the undisclosed employer or other income source to furnish any 
information necessary to establish an assistance applicant's or 
participant's eligibility for or level of assistance in a covered 
program. This information shall be furnished in writing, as directed to:
    (A) HUD, with respect to programs under parts 221, 235, 236, or 290 
of this title;
    (B) The responsible entity (as defined in Sec.  5.100) in the case 
of the public housing program or any Section 8 program.
    (C) The owner or mortgagee, as applicable, with respect to the rent 
supplement, Section 221(d)(3) BMIR, Section 235 homeownership 
assistance, or Section 236 programs.
    (ii) HUD or the PHA may verify the income information directly with 
an assistance applicant or participant. Such verification procedures 
shall not include any disclosure of income information prohibited under 
paragraph (b)(6) of this section.
    (4) HUD and the PHA shall not be required to pursue these 
verification procedures when the sums of money at issue are too small to 
raise an inference of fraud or justify the expense of independent 
verification and the procedures related to termination, denial, 
suspension, or reduction of assistance.
    (5) Based on the income information received from a SWICA or Federal 
agency, HUD or the PHA, as appropriate, may inform an owner (or 
mortgagee) that an assistance applicant's or participant's eligibility 
for or level of assistance is uncertain and needs to be verified. The 
owner (or mortgagee) shall then confirm the assistance applicant's or 
participant's income information by checking the accuracy of the 
information with the employer or other income source, or directly with 
the family.
    (6) Nondisclosure of Income information. Neither HUD nor the PHA may 
disclose income information obtained from a SWICA directly to an owner 
(unless a PHA is the owner). Disclosure of income information obtained 
from the SSA or IRS is restricted under 26 U.S.C. Sec.  6103(l)(7) and 
42 U.S.C. 3544.
    (c) Opportunity to contest. HUD, the PHA, or the owner (or 
mortgagee, as applicable) shall promptly notify any assistance applicant 
or participant in writing of any adverse findings made on the basis of 
the information verified in accordance with paragraph (b) of this 
section. The assistance applicant or participant may contest the 
findings in the same manner as applies to other information and findings 
relating to eligibility factors under the applicable program. 
Termination, denial, suspension, or reduction of assistance shall be 
carried out in accordance with requirements and procedures applicable to 
the individual covered program, and shall not occur until the expiration 
of any notice period provided by the statute or regulations governing 
the program.

[61 FR 11113, Mar. 18, 1996, as amended at 65 FR 16715, Mar. 29, 2000; 
74 FR 68934, Dec. 29, 2009]



Sec.  5.238  Criminal and civil penalties.

    Persons who violate the provisions of 42 U.S.C. 3544 or 26 U.S.C. 
6103(l)(7) with respect to the use and disclosure of income information 
may be subject to civil or criminal penalties under 42 U.S.C. 
3544(c)(3), 26 U.S.C. 7213(a), or 18 U.S.C. 1905.

[[Page 70]]



Sec.  5.240  Family disclosure of income information to the responsible
entity and verification.

    (a) This section applies to families that reside in dwelling units 
with assistance under the public housing program, the Section 8 tenant-
based assistance programs, or for which project-based assistance is 
provided under the Section 8, Section 202, or Section 811 program.
    (b) The family must promptly furnish to the responsible entity any 
letter or other notice by HUD to a member of the family that provides 
information concerning the amount or verification of family income.
    (c) The responsible entity must verify the accuracy of the income 
information received from the family, and change the amount of the total 
tenant payment, tenant rent or Section 8 housing assistance payment, or 
terminate assistance, as appropriate, based on such information.

[65 FR 16715, Mar. 29, 2000]



  Subpart C_Pet Ownership for the Elderly or Persons With Disabilities

    Authority: 42 U.S.C. 1701r-1 and 3535(d).

                          General Requirements



Sec.  5.300  Purpose.

    (a) This subpart implements section 227 of the Housing and Urban-
Rural Recovery Act of 1983 (12 U.S.C. 1701r-1) as it pertains to 
projects for the elderly or persons with disabilities under:
    (1) The housing programs administered by the Assistant Secretary for 
Housing-Federal Housing Commissioner;
    (2) Projects assisted under the programs contained in chapter VIII 
of this title 24; and
    (3) The public housing program.
    (b) [Reserved]

[61 FR 5202, Feb. 9, 1996, as amended at 65 FR 16715, Mar. 29, 2000]



Sec.  5.303  Exclusion for animals that assist, support, or provide
service to persons with disabilities.

    (a) This subpart C does not apply to animals that are used to 
assist, support, or provide service to persons with disabilities. 
Project owners and PHAs may not apply or enforce any policies 
established under this subpart against animals that are necessary as a 
reasonable accommodation to assist, support, or provide service to 
persons with disabilities. This exclusion applies to animals that reside 
in projects for the elderly or persons with disabilities, as well as to 
animals that visit these projects.
    (b) Nothing in this subpart C:
    (1) Limits or impairs the rights of persons with disabilities;
    (2) Authorizes project owners or PHAs to limit or impair the rights 
of persons with disabilities; or
    (3) Affects any authority that project owners or PHAs may have to 
regulate animals that assist, support, or provide service to persons 
with disabilities, under federal, state, or local law.

[73 FR 63838, Oct. 27, 2008]



Sec.  5.306  Definitions.

    Common household pet means:
    (1) For purposes of Housing programs: A domesticated animal, such as 
a dog, cat, bird, rodent (including a rabbit), fish, or turtle, that is 
traditionally kept in the home for pleasure rather than for commercial 
purposes. Common household pet does not include reptiles (except 
turtles). If this definition conflicts with any applicable State or 
local law or regulation defining the pets that may be owned or kept in 
dwelling accommodations, the State or local law or regulation shall 
apply. This definition shall not include animals that are used to assist 
persons with disabilities.
    (2) For purposes of Public Housing programs: PHAs may define the 
term ``common household pet'' under Sec.  5.318.
    Elderly or disabled family means:
    (1) For purposes of Housing programs: An elderly person, a person 
with a disability, or an elderly or disabled family for purposes of the 
program under which a project for the elderly or persons with 
disabilities is assisted or has its mortgage insured.
    (2) For purposes of Public Housing programs: (i) An elderly person, 
a person with a disability, or an elderly or disabled family as defined 
in Sec.  5.403 in subpart A of this part.
    (ii) [Reserved]

[[Page 71]]

    Housing programs means:
    (1) The housing programs administered by the Assistant Secretary for 
Housing-Federal Housing Commissioner; and
    (2) The programs contained in chapter VIII of this title 24 that 
assist rental projects that meet the definition of project for the 
elderly or persons with disabilities in this subpart C.
    Project for the elderly or persons with disabilities means:
    (1) For purposes of Housing programs: (i) A specific rental or 
cooperative multifamily property that, unless currently owned by HUD, is 
subject to a first mortgage, and:
    (A) That is assisted under statutory authority identified by HUD 
through notice;
    (B) That was designated for occupancy by elderly or disabled 
families when funds for the project were reserved, or when the 
commitment to insure the mortgage was issued or, of not then so 
designated, that is designated for such occupancy in an effective 
amendment to the regulatory agreement covering the project, made 
pursuant to the project owner's request, and that is assisted or insured 
under one of the programs identified by HUD through notice; or
    (C) For which preference in tenant selection is given for all units 
in the project to elderly or disabled families and that is owned by HUD 
or assisted under one of the programs identified by HUD through notice.
    (ii) This term does not include health and care facilities that have 
mortgage insurance under the National Housing Act. This term also does 
not include any of the project owner's other property that does not meet 
the criteria contained in any one of paragraphs (1)(i)(A) through (C) of 
this definition, even if the property is adjacent to or under joint or 
common management with such specific property.
    (2) For purposes of Public Housing programs: Any project assisted 
under title I of the United States Housing Act of 1937 (other than under 
section 8 or 17 of the Act), including any building within a mixed-use 
project, that was designated for occupancy by the elderly or persons 
with disabilities at its inception or, although not so designated, for 
which the PHA gives preference in tenant selection (with HUD approval) 
for all units in the project (or for a building within a mixed-use 
project) to elderly or disabled families. For purposes of this part, 
this term does not include projects assisted the Low-Rent Housing 
Homeownership Opportunity program or under title II of the United States 
Housing Act of 1937.
    Project owner means an owner (including HUD, where HUD is the owner) 
or manager of a project for the elderly or persons with disabilities, or 
an agent authorized to act for an owner or manager of such housing.
    Public Housing Agency (PHA) is defined in Sec.  5.100.

[61 FR 5202, Feb. 9, 1996, as amended at 65 FR 16715, Mar. 29, 2000]



Sec.  5.309  Prohibition against discrimination.

    Except as otherwise specifically authorized under this subpart no 
project owner or PHA that owns or manages a project for the elderly or 
persons with disabilities may:
    (a) As a condition of tenancy or otherwise, prohibit or prevent any 
tenant of such housing from owning common household pets or having such 
pets living in the tenant's dwelling unit; or
    (b) Restrict or discriminate against any person in connection with 
admission to, or continued occupancy of, such housing by reason of the 
person's ownership of common household pets or the presence of such pets 
in the person's dwelling unit.



Sec.  5.312  Notice to tenants.

    (a) During the development of pet rules as described in Sec. Sec.  
5.353 or 5.380, the project owner or PHA shall serve written notice on 
all tenants of projects for the elderly or persons with disabilities in 
occupancy at the time of service, stating that:
    (1) Tenants are permitted to own and keep common household pets in 
their dwelling units, in accordance with the pet rules (if any) 
promulgated under this subpart C;
    (2) Animals that are used to assist persons with disabilities are 
excluded from the requirements of this subpart C, as provided in Sec.  
5.303;

[[Page 72]]

    (3) Tenants may, at any time, request a copy of any current pet rule 
developed under this subpart C (as well as any current proposed rule or 
proposed amendment to an existing rule); and
    (4) Tenants may request that their leases be amended under Sec.  
5.321 to permit common household pets.
    (b) The project owner or PHA shall provide to each applicant for 
tenancy when he or she is offered a dwelling unit in a project for the 
elderly or persons with disabilities, the written notice specified in 
paragraphs (a) (1), (2), and (3) of this section.
    (c) If a PHA chooses not to promulgate pet rules, the notice shall 
be served within 60 days of the effective date of this part. PHAs shall 
serve notice under this section in accordance with their normal service 
of notice procedures.



Sec.  5.315  Content of pet rules: General requirements.

    (a) Housing programs. The project owner shall prescribe reasonable 
rules to govern the keeping of common household pets. The pet rules must 
include the mandatory rules described in Sec.  5.350 and may, unless 
otherwise noted in this subpart C, include other discretionary 
provisions as provided in Sec.  5.318.
    (b) Public Housing programs. (1) PHAs may choose not to promulgate 
rules governing the keeping of common household pets or may include 
rules as provided in Sec.  5.318. PHAs may elect to include provisions 
based on those in Sec.  5.350. If they so choose, the PHAs may modify 
the provisions in Sec.  5.350 in any manner consistent with this subpart 
C.
    (2) If PHAs choose to promulgate pet rules, tenants must be 
permitted to own and keep pets in their units in accordance with the 
terms and conditions of their leases, the provisions of this subpart C, 
and any applicable State or local law or regulation governing the owning 
or keeping of pets in dwelling accommodations.
    (3) PHAs that choose not to promulgate pet rules, shall not impose, 
by lease modification or otherwise, any requirement that is inconsistent 
with the provisions of this subpart C.
    (c) Use of discretion. (1) This subpart C does not define with 
specificity the limits of the project owners' or PHAs' discretion to 
promulgate pet rules. Where a project owner or PHA has discretion to 
prescribe pet rules under this subpart C, the pet rules should be:
    (i) Reasonably related to furthering a legitimate interest of the 
project owner or PHA, such as the owner's or PHA's interest in providing 
a decent, safe, and sanitary living environment for existing and 
prospective tenants and in protecting and preserving the physical 
condition of the project and the owner's or PHA's financial interest in 
it; and
    (ii) Drawn narrowly to achieve the owner's or PHA's legitimate 
interests, without imposing unnecessary burdens and restrictions on pet 
owners and prospective pet owners.
    (2) Where a project owner or PHA has discretion to prescribe pet 
rules under this subpart C, the owner or PHA may vary the rules' content 
among projects and within individual projects, based on factors such as 
the size, type, location, and occupancy of the project or its units, 
provided that the applicable rules are reasonable and do not conflict 
with any applicable State or local law or regulation governing the 
owning or keeping of pets in dwelling accommodations.
    (d) Conflict with State or local law. The pet rules adopted by the 
project owner or PHA shall not conflict with applicable State or local 
law or regulations. If such a conflict may exist, the State and local 
law or regulations shall apply.



Sec.  5.318  Discretionary pet rules.

    Pet rules promulgated by project owners and PHAs may include, but 
are not limited to, consideration of the following factors:
    (a) Definitions of ``common household pet''--(1) For Public Housing 
programs. The pet rules established by a PHA may contain a reasonable 
definition of a common household pet.
    (2) For Housing programs. Project owners wishing to define ``common 
household pet'' in their pet rules must use the Housing programs 
definition of the term in Sec.  5.306.
    (b) Density of tenants and pets. (1)(i) The pet rules established 
under this section may take into account tenant

[[Page 73]]

and pet density. The pet rules may place reasonable limitations on the 
number of common household pets that may be allowed in each dwelling 
unit. In the case of group homes, the pet rules may place reasonable 
limitations on the number of common household pets that may be allowed 
in each home.
    (ii) For Housing programs. Under these rules, project owners may 
limit the number of four-legged, warm-blooded pets to one pet in each 
dwelling unit or group home.
    (iii) Other than the limitations described in this paragraph (b)(1), 
the pet rules may not limit the total number of pets allowed in the 
project.
    (2) As used in paragraph (b)(1) of this section, the term ``group 
home'' means:
    (i) For purposes of Housing programs. A small, communal living 
arrangement designed specifically for individuals who are chronically 
mentally ill, developmentally disabled, or physically disabled who 
require a planned program of continual supportive services or 
supervision (other than continual nursing, medical or psychiatric care).
    (ii) For purposes of Public Housing programs. A dwelling or dwelling 
unit for the exclusive residential use of elderly persons or persons 
with disabilities who are not capable of living completely independently 
and who require a planned program of continual supportive services or 
supervision (other than continual nursing, medical or psychiatric care).
    (c) Pet size and pet type. The pet rules may place reasonable 
limitations on the size, weight, and type of common household pets 
allowed in the project.
    (d) Potential financial obligations of tenants--(1) Pet deposits. 
The pet rules may require tenants who own or keep pets in their units to 
pay a refundable pet deposit. In the case of project owners, this pet 
deposit shall be limited to those tenants who own or keep cats or dogs 
in their units. This deposit is in addition to any other financial 
obligation generally imposed on tenants of the project. The project 
owner or PHA may use the pet deposit only to pay reasonable expenses 
directly attributable to the presence of the pet in the project, 
including (but not limited to) the cost of repairs and replacements to, 
and fumigation of, the tenant's dwelling unit and, for project owners, 
the cost of animal care facilities under Sec.  5.363. The project owner 
or PHA shall refund the unused portion of the pet deposit to the tenant 
within a reasonable time after the tenant moves from the project or no 
longer owns or keeps a pet (or a cat or dog in the case of project 
owners) in the dwelling unit.
    (2) Housing programs: Maximum pet deposit. (i) Pet deposits for the 
following tenants shall not exceed an amount periodically fixed by HUD 
through notice.
    (A) Tenants whose rents are subsidized (including tenants of a HUD-
owned project, whose rents were subsidized before HUD acquired it) under 
one of the programs identified by HUD through notice.
    (B) Tenants who live in a project assisted (including tenants who 
live in a HUD-owned project that was assisted before HUD acquired it) 
under one of the programs identified by HUD through notice.
    (C) For all other tenants of projects for the elderly or persons 
with disabilities, the pet deposit shall not exceed one month's rent at 
the time the pet is brought onto the premises.
    (ii) In establishing the maximum amount of pet deposit under 
paragraph (d)(2)(i) of this section, HUD will consider factors such as:
    (A) Projected, estimated expenses directly attributable to the 
presence of pets in the project;
    (B) The ability of project owners to offset such expenses by use of 
security deposits or HUD-reimbursable expenses; and
    (C) The low income status of tenants of projects for the elderly or 
persons with disabilities.
    (iii) For pet deposits subject to paragraph (d)(2)(i)(A) of this 
section, the pet rules shall provide for gradual accumulation of the 
deposit by the pet owner through an initial payment not to exceed $50 
when the pet is brought onto the premises, and subsequent monthly 
payments not to exceed $10 per month until the amount of the deposit is 
reached.
    (iv) For pet deposits subject to paragraphs (d)(2)(i)(B) and (C) of 
this section, the pet rules may provide for

[[Page 74]]

gradual accumulation of the deposit by the pet owner.
    (v) The project owner may (subject to the HUD-prescribed limits) 
increase the amount of the pet deposit by amending the house pet rules 
in accordance with Sec.  5.353.
    (A) For pet deposits subject to paragraph (d)(2)(i)(A) of this 
section, the house pet rules shall provide for gradual accumulation of 
any such increase not to exceed $10 per month for all deposit amounts 
that are being accumulated.
    (B) [Reserved]
    (vi) Any pet deposit that is established within the parameters set 
forth by paragraph (d)(2) of this section shall be deemed reasonable for 
purposes of this subpart C.
    (3) Public Housing programs: Maximum pet deposit. The maximum amount 
of pet deposit that may be charged by the PHA, on a per dwelling unit 
basis, shall not exceed the higher of the Total Tenant Payment (as 
defined in 24 CFR 913.102) or such reasonable fixed amount as the PHA 
may require. The pet rules may permit gradual accumulation of the pet 
deposit by the pet owner.
    (4) Housing programs: Waste removal charge. The pet rules may permit 
the project owner to impose a separate waste removal charge of up to 
five dollars ($5) per occurrence on pet owners that fail to remove pet 
waste in accordance with the prescribed pet rules. Any pet waste removal 
charge that is within this five dollar ($5) limitation shall be deemed 
to be a reasonable amount for the purposes of this subpart C.
    (5) The pet deposit (for Housing and Public Housing programs) and 
waste removal charge (for Housing programs) are not part of the rent 
payable by the tenant. Except as provided in paragraph (d) of this 
section for Housing programs and, paragraph (d) of this section and 24 
CFR 966.4(b) for Public Housing programs, project owners or PHAs may not 
prescribe pet rules that impose additional financial obligations on pet 
owners that are designed to compensate the project owner or PHA for 
costs associated with the presence of pets in the project, including 
(but not limited to) requiring pet owners:
    (i) To obtain liability or other insurance to cover damage caused by 
the pet;
    (ii) To agree to be strictly liable for all damages caused by the 
pet where this liability is not otherwise imposed by State or local law, 
or
    (iii) To indemnify the project owner for pet-related litigation and 
attorney's fees.
    (e) Standards of pet care. The pet rules may prescribe standards of 
pet care and handling, but must be limited to those necessary to protect 
the condition of the tenant's unit and the general condition of the 
project premises, or to protect the health or safety of present tenants, 
project employees, and the public. The pet rules may not require pet 
owners to have any pet's vocal cords removed. Permitted rules may:
    (1) Bar pets from specified common areas (such as lobbies, laundry 
rooms, and social rooms), unless the exclusion will deny a pet 
reasonable ingress and egress to the project or building.
    (2) Require the pet owner to control noise and odor caused by a pet.
    (3) Housing programs: Project owners may also:
    (i) Require pet owners to have their dogs and cats spayed or 
neutered; and
    (ii) Limit the length of time that a pet may be left unattended in a 
dwelling unit.
    (f) Pet licensing. The pet rules may require pet owners to license 
their pets in accordance with applicable State and local laws and 
regulations. (Failure of the pet rules to contain this requirement does 
not relieve the pet owner of responsibility for complying with 
applicable State and local pet licensing requirements.)
    (g) Public Housing programs: Designated pet areas. (1) PHAs may 
designate buildings, floors of buildings, or sections of buildings as 
no-pet areas where pets generally may not be permitted. Similarly, the 
pet rules may designate buildings, floors of buildings, or sections of 
buildings for residency generally by pet-owning tenants. The PHA may 
direct such initial tenant moves as may be necessary to establish pet 
and no-pet areas. The PHA may not refuse to admit (or delay admission 
of) an applicant for tenancy on the

[[Page 75]]

grounds that the applicant's admission would violate a pet or no-pet 
area. The PHA may adjust the pet and no-pet areas or may direct such 
additional moves as may be necessary (or both) to accommodate such 
applicants for tenancy or to meet the changing needs of existing 
tenants.
    (2) Project owners may not designate pet areas in buildings in their 
pet rules.
    (h) Pets temporarily on the premises. The pet rules may exclude from 
the project pets not owned by a tenant that are to be kept temporarily 
on the project premises. For the purposes of paragraph (h) of this 
section, pets are to be kept ``temporarily'' if they are to be kept in 
the tenant's dwelling accommodations for a period of less than 14 
consecutive days and nights. HUD, however, encourages project owners and 
PHAs to permit the use of a visiting pet program sponsored by a humane 
society, or other nonprofit organization.



Sec.  5.321  Lease provisions.

    (a) Lease provisions. (1) PHAs which have established pet rules and 
project owners shall ensure that the leases for all tenants of projects 
for the elderly or persons with disabilities:
    (i) State that tenants are permitted to keep common household pets 
in their dwelling units (subject to the provisions of this subpart and 
the pet rules);
    (ii) Shall incorporate by reference the pet rules promulgated by the 
project owner or PHA;
    (iii) Shall provide that the tenant agrees to comply with these 
rules; and
    (iv) Shall state that violation of these rules may be grounds for 
removal of the pet or termination of the pet owner's tenancy (or both), 
in accordance with the provisions of this subpart and applicable 
regulations and State or local law.
    (2) [Reserved]
    (b) Where a PHA has not established pet rules, the leases of all 
tenants of such projects shall not contain any provisions prohibiting 
the owning or keeping of common household pets, and shall state that 
owning and keeping of such pets will be subject to the general 
obligations imposed on the PHA and tenants in the lease and any 
applicable State or local law or regulation governing the owning or 
keeping of pets in dwelling accommodations.



Sec.  5.324  Implementation of lease provisions.

    The lease for each tenant of a project for the elderly or persons 
with disabilities who is admitted on or after the date on which this 
subpart C is implemented shall contain the lease provisions described in 
Sec.  5.321 and, if applicable, Sec.  5.360. The lease for each tenant 
who occupies a unit in such a project under lease on the date of 
implementation of this part shall be amended to include the provisions 
described in Sec.  5.321 and, if applicable, Sec.  5.360:
    (a) For Housing programs:
    (1) Upon renewal of the lease and in accordance with any applicable 
regulation; and
    (2) When a Housing program tenant registers a common household pet 
under Sec.  5.350
    (b) For Public Housing programs:
    (1) Upon annual reexamination of tenant income in accordance with 
any applicable regulation; and
    (2) When a Public Housing program tenant wishes to own or keep a 
common household pet in his or her unit.



Sec.  5.327  Nuisance or threat to health or safety.

    Nothing in this subpart C prohibits a project owner, PHA, or an 
appropriate community authority from requiring the removal of any pet 
from a project, if the pet's conduct or condition is duly determined to 
constitute, under the provisions of State or local law, a nuisance or a 
threat to the health or safety of other occupants of the project or of 
other persons in the community where the project is located.

             Pet Ownership Requirements for Housing Programs



Sec.  5.350  Mandatory pet rules for housing programs.

    Mandatory rules. The project owner must prescribe the following pet 
rules:
    (a) Inoculations. The pet rules shall require pet owners to have 
their pets inoculated in accordance with State and local laws.

[[Page 76]]

    (b) Sanitary standards. (1) The pet rules shall prescribe sanitary 
standards to govern the disposal of pet waste. These rules may:
    (i) Designate areas on the project premises for pet exercise and the 
deposit of pet waste;
    (ii) Forbid pet owners from exercising their pets or permitting 
their pets to deposit waste on the project premises outside the 
designated areas;
    (iii) Require pet owners to remove and properly dispose of all 
removable pet waste; and
    (iv) Require pet owners to remove pets from the premises to permit 
the pet to exercise or deposit waste, if no area in the project is 
designated for such purposes.
    (2) In the case of cats and other pets using litter boxes, the pet 
rules may require the pet owner to change the litter (but not more than 
twice each week), may require pet owners to separate pet waste from 
litter (but not more than once each day), and may prescribe methods for 
the disposal of pet waste and used litter.
    (c) Pet restraint. The pet rules shall require that all cats and 
dogs be appropriately and effectively restrained and under the control 
of a responsible individual while on the common areas of the project.
    (d) Registration. (1) The pet rules shall require pet owners to 
register their pets with the project owner. The pet owner must register 
the pet before it is brought onto the project premises, and must update 
the registration at least annually. The project owner may coordinate the 
annual update with the annual reexamination of tenant income, if 
applicable. The registration must include:
    (i) A certificate signed by a licensed veterinarian or a State or 
local authority empowered to inoculate animals (or designated agent of 
such an authority) stating that the pet has received all inoculations 
required by applicable State and local law;
    (ii) Information sufficient to identify the pet and to demonstrate 
that it is a common household pet; and
    (iii) The name, address, and phone number of one or more responsible 
parties who will care for the pet if the pet owner dies, is 
incapacitated, or is otherwise unable to care for the pet.
    (2) The project owner may require the pet owner to provide 
additional information necessary to ensure compliance with any 
discretionary rules prescribed under Sec.  5.318, and shall require the 
pet owner to sign a statement indicating that he or she has read the pet 
rules and agrees to comply with them.
    (3) The pet rules shall permit the project owner to refuse to 
register a pet if:
    (i) The pet is not a common household pet;
    (ii) The keeping of the pet would violate any applicable house pet 
rule;
    (iii) The pet owner fails to provide complete pet registration 
information or fails annually to update the pet registration; or
    (iv) The project owner reasonably determines, based on the pet 
owner's habits and practices, that the pet owner will be unable to keep 
the pet in compliance with the pet rules and other lease obligations. 
The pet's temperament may be considered as a factor in determining the 
prospective pet owner's ability to comply with the pet rules and other 
lease obligations.
    (4) The project owner may not refuse to register a pet based on a 
determination that the pet owner is financially unable to care for the 
pet or that the pet is inappropriate, based on the therapeutic value to 
the pet owner or the interests of the property or existing tenants.
    (5) The pet rules shall require the project owner to notify the pet 
owner if the project owner refuses to register a pet. The notice shall 
state the basis for the project owner's action and shall be served on 
the pet owner in accordance with the requirements of Sec.  
5.353(f)(1)(i) or (ii). The notice of refusal to register a pet may be 
combined with a notice of pet violation as required in Sec.  5.356.



Sec.  5.353  Housing programs: Procedure for development of pet rules.

    (a) General. Project owners shall use the procedures specified in 
this section to promulgate the pet rules referred to in Sec. Sec.  5.318 
and 5.350.
    (b) Development and notice of proposed pet rules. Project owners 
shall develop proposed rules to govern the owning or

[[Page 77]]

keeping of common household pets in projects for the elderly or persons 
with disabilities. Notice of the proposed pet rules shall be served on 
each tenant of the project as provided in paragraph (f) of this section. 
The notice shall:
    (1) Include the text of the proposed rules;
    (2) State that tenants or tenant representatives may submit written 
comments on the rules; and
    (3) State that all comments must be submitted to the project owner 
no later than 30 days from the effective date of the notice of the 
proposed rules.
    (4) The notice may also announce the date, time, and place for a 
meeting to discuss the proposed rules (as provided in paragraph (c) of 
this section).
    (c) Tenant consultation. Tenants or tenant representatives may 
submit written comments on the proposed pet rules to the project owner 
by the date specified in the notice of proposed rules. In addition, the 
owner may schedule one or more meetings with tenants during the comment 
period to discuss the proposed rules. Tenants and tenant representatives 
may make oral comments on the proposed rules at these meetings. The 
project owner must consider comments made at these meetings only if they 
are summarized, reduced to writing, and submitted to the project owner 
before the end of the comment period.
    (d) Development and notice of final pet rules. The project owner 
shall develop the final rules after reviewing tenants' written comments 
and written summaries of any owner-tenant meetings. The project owner 
may meet with tenants and tenant representatives to attempt to resolve 
issues raised by the comments. Subject to this subpart C, the content of 
the final pet rules, however, is within the sole discretion of the 
project owner. The project owner shall serve on each tenant of the 
project, a notice of the final pet rules as provided in paragraph (f) of 
this section. The notice must include the text of the final pet rules 
and must specify the effective date of the final pet rules.
    (e) Amendment of pet rules. The project owner may amend the pet 
rules at any time by following the procedure for the development of pet 
rules specified in paragraphs (b) through (d) of this section.
    (f) Service of notice. (1) The project owner must serve the notice 
required under this section by:
    (i) Sending a letter by first class mail, properly stamped and 
addressed to the tenant at the dwelling unit, with a proper return 
address; or
    (ii) Serving a copy of the notice on any adult answering the door at 
the tenant's leased dwelling unit, or if no adult responds, by placing 
the notice under or through the door, if possible, or else by attaching 
the notice to the door; or
    (iii) For service of notice to tenants of a high-rise building, 
posting the notice in at least three conspicuous places within the 
building and maintaining the posted notices intact and in legible form 
for 30 days. For purposes of paragraph (f) of this section, a high-rise 
building is a structure that is equipped with an elevator and has a 
common lobby.
    (2) For purposes of computing time periods following service of the 
notice, service is effective on the day that all notices are delivered 
or mailed, or in the case of service by posting, on the day that all 
notices are initially posted.



Sec.  5.356  Housing programs: Pet rule violation procedures.

    (a) Notice of pet rule violation. If a project owner determines on 
the basis of objective facts, supported by written statements, that a 
pet owner has violated a rule governing the owning or keeping of pets; 
the project owner may serve a written notice of pet rule violation on 
the pet owner in accordance with Sec.  5.353(f)(1)(i) or (ii). The 
notice of pet rule violation must:
    (1) Contain a brief statement of the factual basis for the 
determination and the pet rule or rules alleged to be violated;
    (2) State that the pet owner has 10 days from the effective date of 
service of the notice to correct the violation (including, in 
appropriate circumstances, removal of the pet) or to make a written 
request for a meeting to discuss the violation;

[[Page 78]]

    (3) State that the pet owner is entitled to be accompanied by 
another person of his or her choice at the meeting; and
    (4) State that the pet owner's failure to correct the violation, to 
request a meeting, or to appear at a requested meeting may result in 
initiation of procedures to terminate the pet owner's tenancy.
    (b)(1) Pet rule violation meeting. If the pet owner makes a timely 
request for a meeting to discuss an alleged pet rule violation, the 
project owner shall establish a mutually agreeable time and place for 
the meeting but no later than 15 days from the effective date of service 
of the notice of pet rule violation (unless the project owner agrees to 
a later date). At the pet rule violation meeting, the pet owner and 
project owner shall discuss any alleged pet rule violation and attempt 
to correct it. The project owner may, as a result of the meeting, give 
the pet owner additional time to correct the violation.
    (2) Notice for pet removal. If the pet owner and project owner are 
unable to resolve the pet rule violation at the pet rule violation 
meeting, or if the project owner determines that the pet owner has 
failed to correct the pet rule violation within any additional time 
provided for this purpose under paragraph (b)(1) of this section, the 
project owner may serve a written notice on the pet owner in accordance 
with Sec.  5.353(f)(1) (i) or (ii) (or at the meeting, if appropriate), 
requiring the pet owner to remove the pet. The notice must:
    (i) Contain a brief statement of the factual basis for the 
determination and the pet rule or rules that have been violated;
    (ii) State that the pet owner must remove the pet within 10 days of 
the effective date of service of the notice of pet removal (or the 
meeting, if notice is served at the meeting); and
    (iii) State that failure to remove the pet may result in initiation 
of procedures to terminate the pet owner's tenancy.
    (c) Initiation of procedures to remove a pet or terminate the pet 
owner's tenancy. (1) The project owner may not initiate procedures to 
terminate a pet owner's tenancy based on a pet rule violation, unless:
    (i) The pet owner has failed to remove the pet or correct a pet rule 
violation within the applicable time period specified in this section 
(including any additional time permitted by the owner); and
    (ii) The pet rule violation is sufficient to begin procedures to 
terminate the pet owner's tenancy under the terms of the lease and 
applicable regulations.
    (2) The project owner may initiate procedures to remove a pet under 
Sec.  5.327 at any time, in accordance with the provisions of applicable 
State or local law.



Sec.  5.359  Housing programs: Rejection of units by applicants for tenancy.

    (a) An applicant for tenancy in a project for the elderly or persons 
with disabilities may reject a unit offered by a project owner if the 
unit is in close proximity to a dwelling unit in which an existing 
tenant of the project owns or keeps a common household pet. An 
applicant's rejection of a unit under this section shall not adversely 
affect his or her application for tenancy in the project, including (but 
not limited to) his or her position on the project waiting list or 
qualification for any tenant selection preference.
    (b) Nothing in this subpart C imposes a duty on project owners to 
provide alternate dwelling units to existing or prospective tenants 
because of the proximity of common household pets to a particular unit 
or the presence of such pets in the project.



Sec.  5.360  Housing programs: Additional lease provisions.

    (a) Inspections. In addition to other inspections permitted under 
the lease, the leases for all Housing program tenants of projects for 
the elderly or persons with disabilities may state that the project 
owner may, after reasonable notice to the tenant and during reasonable 
hours, enter and inspect the premises. The lease shall permit entry and 
inspection only if the project owner has received a signed, written 
complaint alleging (or the project owner has reasonable grounds to 
believe) that the conduct or condition of a pet in the dwelling unit 
constitutes, under applicable State or local law, a

[[Page 79]]

nuisance or a threat to the health or safety of the occupants of the 
project or other persons in the community where the project is located.
    (b) Emergencies. (1) If there is no State or local authority (or 
designated agent of such an authority) authorized under applicable State 
or local law to remove a pet that becomes vicious, displays symptoms of 
severe illness, or demonstrates other behavior that constitutes an 
immediate threat to the health or safety of the tenancy as a whole, the 
project owner may place a provision in tenant leases permitting the 
project owner to enter the premises (if necessary), remove the pet, and 
take such action with respect to the pet as may be permissible under 
State and local law, which may include placing it in a facility that 
will provide care and shelter for a period not to exceed 30 days.
    (2) The lease shall permit the project owner to enter the premises 
and remove the pet or take such other permissible action only if the 
project owner requests the pet owner to remove the pet from the project 
immediately, and the pet owner refuses to do so, or if the project owner 
is unable to contact the pet owner to make a removal request. The lease 
may not contain a provision relieving the project owner from liability 
for wrongful removal of a pet. The cost of the animal care facility 
shall be paid as provided in Sec.  5.363.
    (3) The project owner may place a provision in tenant leases 
permitting the project owner to enter the premises, remove the pet, and 
place the pet in a facility that will provide care and shelter, in 
accordance with the provisions of Sec.  5.363. The lease may not contain 
a provision relieving the project owner from liability for wrongful 
removal of a pet.



Sec.  5.363  Housing programs: Protection of the pet.

    (a) If the health or safety of a pet is threatened by the death or 
incapacity of the pet owner, or by other factors that render the pet 
owner unable to care for the pet, the project owner may contact the 
responsible party or parties listed in the pet registration required 
under Sec.  5.350(d)(1)(iii).
    (b) If the responsible party or parties are unwilling or unable to 
care for the pet, or the project owner, despite reasonable efforts, has 
been unable to contact the responsible party or parties, the project 
owner may contact the appropriate State or local authority (or 
designated agent of such an authority) and request the removal of the 
pet.
    (c) If there is no State or local authority (or designated agent of 
such an authority) authorized to remove a pet under these circumstances 
and the project owner has placed a provision in the lease agreement (as 
described in Sec.  5.360(c)(2)), the project owner may enter the pet 
owner's unit, remove the pet, and place the pet in a facility that will 
provide care and shelter until the pet owner or a representative of the 
pet owner is able to assume responsibility for the pet, but not longer 
than 30 days.
    (d) The cost of the animal care facility provided under this section 
shall be borne by the pet owner. If the pet owner (or the pet owner's 
estate) is unable or unwilling to pay, the cost of the animal care 
facility may be paid from the pet deposit, if imposed under the pet 
rules.

         Pet Ownership Requirements for Public Housing Programs



Sec.  5.380  Public housing programs: Procedure for development of pet rules.

    PHAs that choose to promulgate pet rules shall consult with tenants 
of projects for the elderly or persons with disabilities administered by 
them with respect to their promulgation and subsequent amendment. PHAs 
shall develop the specific procedures governing tenant consultation, but 
these procedures must be designed to give tenants (or, if appropriate, 
tenant councils) adequate opportunity to review and comment upon the pet 
rules before they are issued for effect. PHAs are solely responsible for 
the content of final pet rules, but must give consideration to tenant 
comments. PHAs shall send to the responsible HUD field office, copies of 
the final (or amended) pet rules, as well as summaries or copies of all 
tenant comments received in the course of the tenant consultation.

[[Page 80]]



Subpart D_Definitions for Section 8 and Public Housing Assistance Under 
                  the United States Housing Act of 1937

    Authority: 42 U.S.C. 1437a and 3535(d).

    Source: 61 FR 5665, Feb. 13, 1996, unless otherwise noted.



Sec.  5.400  Applicability.

    This part applies to public housing and Section 8 programs.

[61 FR 5665, Feb. 13, 1996, as amended at 65 FR 16715, Mar. 29, 2000]



Sec.  5.403  Definitions.

    Annual contributions contract (ACC) means the written contract 
between HUD and a PHA under which HUD agrees to provide funding for a 
program under the 1937 Act, and the PHA agrees to comply with HUD 
requirements for the program.
    Applicant means a person or a family that has applied for housing 
assistance.
    Disabled family means a family whose head (including co-head), 
spouse, or sole member is a person with a disability. It may include two 
or more persons with disabilities living together, or one or more 
persons with disabilities living with one or more live-in aides.
    Displaced family means a family in which each member, or whose sole 
member, is a person displaced by governmental action, or a person whose 
dwelling has been extensively damaged or destroyed as a result of a 
disaster declared or otherwise formally recognized pursuant to Federal 
disaster relief
    Elderly family means a family whose head (including co-head), 
spouse, or sole member is a person who is at least 62 years of age. It 
may include two or more persons who are at least 62 years of age living 
together, or one or more persons who are at least 62 years of age living 
with one or more live-in aides.
    Family includes, but is not limited to, the following, regardless of 
actual or perceived sexual orientation, gender identity, or marital 
status:
    (1) A single person, who may be an elderly person, displaced person, 
disabled person, near-elderly person, or any other single person; or
    (2) A group of persons residing together, and such group includes, 
but is not limited to:
    (i) A family with or without children (a child who is temporarily 
away from the home because of placement in foster care is considered a 
member of the family);
    (ii) An elderly family;
    (iii) A near-elderly family;
    (iv) A disabled family;
    (v) A displaced family; and
    (vi) The remaining member of a tenant family.
    Live-in aide means a person who resides with one or more elderly 
persons, or near-elderly persons, or persons with disabilities, and who:
    (1) Is determined to be essential to the care and well-being of the 
persons;
    (2) Is not obligated for the support of the persons; and
    (3) Would not be living in the unit except to provide the necessary 
supportive services.
    Near-elderly family means a family whose head (including co-head), 
spouse, or sole member is a person who is at least 50 years of age but 
below the age of 62; or two or more persons, who are at least 50 years 
of age but below the age of 62, living together; or one or more persons 
who are at least 50 years of age but below the age of 62, living with 
one or more live-in aides.
    Person with disabilities:
    (1) Means a person who:
    (i) Has a disability, as defined in 42 U.S.C. 423;
    (ii) Is determined, pursuant to HUD regulations, to have a physical, 
mental, or emotional impairment that:
    (A) Is expected to be of long-continued and indefinite duration;
    (B) Substantially impedes his or her ability to live independently, 
and
    (C) Is of such a nature that the ability to live independently could 
be improved by more suitable housing conditions; or
    (iii) Has a developmental disability as defined in 42 U.S.C. 6001.
    (2) Does not exclude persons who have the disease of acquired 
immunodeficiency syndrome or any conditions arising from the etiologic 
agent for acquired immunodeficiency syndrome;

[[Page 81]]

    (3) For purposes of qualifying for low-income housing, does not 
include a person whose disability is based solely on any drug or alcohol 
dependence; and
    (4) Means ``individual with handicaps'', as defined in Sec.  8.3 of 
this title, for purposes of reasonable accommodation and program 
accessibility for persons with disabilities.

[61 FR 5665, Feb. 13, 1996, as amended at 63 FR 23853, Apr. 30, 1998; 65 
FR 16715, Mar. 29, 2000; 77 FR 5674, Feb. 3, 2012]



           Subpart E_Restrictions on Assistance to Noncitizens

    Authority: 42 U.S.C. 1436a and 3535(d).



Sec.  5.500  Applicability.

    (a) Covered programs/assistance. This subpart E implements Section 
214 of the Housing and Community Development Act of 1980, as amended (42 
U.S.C. 1436a). Section 214 prohibits HUD from making financial 
assistance available to persons who are not in eligible status with 
respect to citizenship or noncitizen immigration status. This subpart E 
is applicable to financial assistance provided under:
    (1) Section 235 of the National Housing Act (12 U.S.C. 1715z) (the 
Section 235 Program);
    (2) Section 236 of the National Housing Act (12 U.S.C. 1715z-1) 
(tenants paying below market rent only) (the Section 236 Program);
    (3) Section 101 of the Housing and Urban Development Act of 1965 (12 
U.S.C. 1701s) (the Rent Supplement Program); and
    (4) The United States Housing Act of 1937 (42 U.S. C. 1437 et seq.) 
which covers:
    (i) HUD's Public Housing Programs;
    (ii) The Section 8 Housing Assistance Programs; and
    (iii) The Housing Development Grant Programs (with respect to low 
income units only).
    (b) Covered individuals and entities--(1) Covered individuals/
persons and families. The provisions of this subpart E apply to both 
applicants for assistance and persons already receiving assistance 
covered under this subpart E.
    (2) Covered entities. The provisions of this subpart E apply to 
Public Housing Agencies (PHAs), project (or housing) owners, and 
mortgagees under the Section 235 Program. The term ``responsible 
entity'' is used in this subpart E to refer collectively to these 
entities, and is further defined in Sec.  5.504.



Sec.  5.502  Requirements concerning documents.

    For any notice or document (decision, declaration, consent form, 
etc.) that this subpart E requires the responsible entity to provide to 
an individual, or requires the responsible entity to obtain the 
signature of an individual, the responsible entity, where feasible, must 
arrange for the notice or document to be provided to the individual in a 
language that is understood by the individual if the individual is not 
proficient in English. (See 24 CFR 8.6 of HUD's regulations for 
requirements concerning communications with persons with disabilities.)



Sec.  5.504  Definitions.

    (a) The definitions 1937 Act, HUD, Public Housing Agency (PHA), and 
Section 8 are defined in subpart A of this part.
    (b) As used in this subpart E:
    Child means a member of the family other than the family head or 
spouse who is under 18 years of age.
    Citizen means a citizen or national of the United States.
    Evidence of citizenship or eligible status means the documents which 
must be submitted to evidence citizenship or eligible immigration 
status. (See Sec.  5.508(b).)
    Family has the same meaning as provided in the program regulations 
of the relevant Section 214 covered program.
    Head of household means the adult member of the family who is the 
head of the household for purposes of determining income eligibility and 
rent.
    Housing covered programs means the following programs administered 
by the Assistant Secretary for Housing:
    (1) Section 235 of the National Housing Act (12 U.S.C. 1715z) (the 
Section 235 Program);
    (2) Section 236 of the National Housing Act (12 U.S.C. 1715z-1) 
(tenants paying below market rent only) (the Section 236 Program); and

[[Page 82]]

    (3) Section 101 of the Housing and Urban Development Act of 1965 (12 
U.S.C. 1701s) (the Rent Supplement Program).
    INS means the U.S. Immigration and Naturalization Service.
    Mixed family means a family whose members include those with 
citizenship or eligible immigration status, and those without 
citizenship or eligible immigration status.
    National means a person who owes permanent allegiance to the United 
States, for example, as a result of birth in a United States territory 
or possession.
    Noncitizen means a person who is neither a citizen nor national of 
the United States.
    Project owner means the person or entity that owns the housing 
project containing the assisted dwelling unit.
    Public Housing covered programs means the public housing programs 
administered by the Assistant Secretary for Public and Indian Housing 
under title I of the 1937 Act. This definition does not encompass HUD's 
Indian Housing programs administered under title II of the 1937 Act. 
Further, this term does not include those programs providing assistance 
under section 8 of the 1937 Act. (See definition of ``Section 8 Covered 
Programs'' in this section.)
    Responsible entity means the person or entity responsible for 
administering the restrictions on providing assistance to noncitizens 
with ineligible immigrations status. The entity responsible for 
administering the restrictions on providing assistance to noncitizens 
with ineligible immigration status under the various covered programs is 
as follows:
    (1) For the Section 235 Program, the mortgagee.
    (2) For Public Housing, the Section 8 Rental Certificate, the 
Section 8 Rental Voucher, and the Section 8 Moderate Rehabilitation 
programs, the PHA administering the program under an ACC with HUD.
    (3) For all other Section 8 programs, the Section 236 Program, and 
the Rent Supplement Program, the owner.
    Section 8 covered programs means all HUD programs which assist 
housing under Section 8 of the 1937 Act, including Section 8-assisted 
housing for which loans are made under section 202 of the Housing Act of 
1959.
    Section 214 means section 214 of the Housing and Community 
Development Act of 1980, as amended (42 U.S.C. 1436a).
    Section 214 covered programs is the collective term for the HUD 
programs to which the restrictions imposed by Section 214 apply. These 
programs are set forth in Sec.  5.500.
    Tenant means an individual or a family renting or occupying an 
assisted dwelling unit. For purposes of this subpart E, the term tenant 
will also be used to include a homebuyer, where appropriate.



Sec.  5.506  General provisions.

    (a) Restrictions on assistance. Financial assistance under a Section 
214 covered program is restricted to:
    (1) Citizens; or
    (2) Noncitizens who have eligible immigration status under one of 
the categories set forth in Section 214 (see 42 U.S.C. 1436a(a)).
    (b) Family eligibility for assistance. (1) A family shall not be 
eligible for assistance unless every member of the family residing in 
the unit is determined to have eligible status, as described in 
paragraph (a) of this section, or unless the family meets the conditions 
set forth in paragraph (b)(2) of this section.
    (2) Despite the ineligibility of one or more family members, a mixed 
family may be eligible for one of the three types of assistance provided 
in Sec. Sec.  5.516 and 5.518. A family without any eligible members and 
receiving assistance on June 19, 1995 may be eligible for temporary 
deferral of termination of assistance as provided in Sec. Sec.  5.516 
and 5.518.
    (c) Preferences. Citizens of the Republic of Marshall Islands, the 
Federated States of Micronesia, and the Republic of Palau who are 
eligible for assistance under paragraph (a)(2) of this section are 
entitled to receive local preferences for housing assistance, except 
that, within Guam, such citizens who have such local preference will not 
be entitled to housing assistance in preference

[[Page 83]]

to any United States citizen or national resident therein who is 
otherwise eligible for such assistance.

[61 FR 5202, Feb. 9, 1996, as amended at 67 FR 65273, Oct. 23, 2002]



Sec.  5.508  Submission of evidence of citizenship or eligible 
immigration status.

    (a) General. Eligibility for assistance or continued assistance 
under a Section 214 covered program is contingent upon a family's 
submission to the responsible entity of the documents described in 
paragraph (b) of this section for each family member. If one or more 
family members do not have citizenship or eligible immigration status, 
the family members may exercise the election not to contend to have 
eligible immigration status as provided in paragraph (e) of this 
section, and the provisions of Sec. Sec.  5.516 and 5.518 shall apply.
    (b) Evidence of citizenship or eligible immigration status. Each 
family member, regardless of age, must submit the following evidence to 
the responsible entity.
    (1) For U.S. citizens or U.S. nationals, the evidence consists of a 
signed declaration of U.S. citizenship or U.S. nationality. The 
responsible entity may request verification of the declaration by 
requiring presentation of a United States passport or other appropriate 
documentation, as specified in HUD guidance.
    (2) For noncitizens who are 62 years of age or older or who will be 
62 years of age or older and receiving assistance under a Section 214 
covered program on September 30, 1996 or applying for assistance on or 
after that date, the evidence consists of:
    (i) A signed declaration of eligible immigration status; and
    (ii) Proof of age document.
    (3) For all other noncitizens, the evidence consists of:
    (i) A signed declaration of eligible immigration status;
    (ii) One of the INS documents referred to in Sec.  5.510; and
    (iii) A signed verification consent form.
    (c) Declaration. (1) For each family member who contends that he or 
she is a U.S. citizen or a noncitizen with eligible immigration status, 
the family must submit to the responsible entity a written declaration, 
signed under penalty of perjury, by which the family member declares 
whether he or she is a U.S. citizen or a noncitizen with eligible 
immigration status.
    (i) For each adult, the declaration must be signed by the adult.
    (ii) For each child, the declaration must be signed by an adult 
residing in the assisted dwelling unit who is responsible for the child.
    (2) For Housing covered programs: The written declaration may be 
incorporated as part of the application for housing assistance or may 
constitute a separate document.
    (d) Verification consent form--(1) Who signs. Each noncitizen who 
declares eligible immigration status (except certain noncitizens who are 
62 years of age or older as described in paragraph (b)(2) of this 
section) must sign a verification consent form as follows.
    (i) For each adult, the form must be signed by the adult.
    (ii) For each child, the form must be signed by an adult residing in 
the assisted dwelling unit who is responsible for the child.
    (2) Notice of release of evidence by responsible entity. The 
verification consent form shall provide that evidence of eligible 
immigration status may be released by the responsible entity without 
responsibility for the further use or transmission of the evidence by 
the entity receiving it, to:
    (i) HUD, as required by HUD; and
    (ii) The INS for purposes of verification of the immigration status 
of the individual.
    (3) Notice of release of evidence by HUD. The verification consent 
form also shall notify the individual of the possible release of 
evidence of eligible immigration status by HUD. Evidence of eligible 
immigration status shall only be released to the INS for purposes of 
establishing eligibility for financial assistance and not for any other 
purpose. HUD is not responsible for the further use or transmission of 
the evidence or other information by the INS.
    (e) Individuals who do not contend that they have eligible status. 
If one or more

[[Page 84]]

members of a family elect not to contend that they have eligible 
immigration status, and other members of the family establish their 
citizenship or eligible immigration status, the family may be eligible 
for assistance under Sec. Sec.  5.516 and 5.518, or Sec.  5.520, despite 
the fact that no declaration or documentation of eligible status is 
submitted for one or more members of the family. The family, however, 
must identify in writing to the responsible entity, the family member 
(or members) who will elect not to contend that he or she has eligible 
immigration status.
    (f) Notification of requirements of Section 214--(1) When notice is 
to be issued. Notification of the requirement to submit evidence of 
citizenship or eligible immigration status, as required by this section, 
or to elect not to contend that one has eligible status as provided by 
paragraph (e) of this section, shall be given by the responsible entity 
as follows:
    (i) Applicant's notice. The notification described in paragraph 
(f)(1) of this section shall be given to each applicant at the time of 
application for assistance. Applicants whose applications are pending on 
June 19, 1995, shall be notified of the requirement to submit evidence 
of eligible status as soon as possible after June 19, 1995.
    (ii) Notice to tenants. The notification described in paragraph 
(f)(1) of this section shall be given to each tenant at the time of, and 
together with, the responsible entity's notice of regular reexamination 
of income, but not later than one year following June 19, 1995.
    (iii) Timing of mortgagor's notice. A mortgagor receiving Section 
235 assistance must be provided the notification described in paragraph 
(f)(1) of this section and any additional requirements imposed under the 
Section 235 Program.
    (2) Form and content of notice. The notice shall:
    (i) State that financial assistance is contingent upon the 
submission and verification, as appropriate, of evidence of citizenship 
or eligible immigration status as required by paragraph (a) of this 
section;
    (ii) Describe the type of evidence that must be submitted, and state 
the time period in which that evidence must be submitted (see paragraph 
(g) of this section concerning when evidence must be submitted); and
    (iii) State that assistance will be prorated, denied or terminated, 
as appropriate, upon a final determination of ineligibility after all 
appeals have been exhausted (see Sec.  5.514 concerning INS appeal, and 
informal hearing process) or, if appeals are not pursued, at a time to 
be specified in accordance with HUD requirements. Tenants also shall be 
informed of how to obtain assistance under the preservation of families 
provisions of Sec. Sec.  5.516 and 5.518.
    (g) When evidence of eligible status is required to be submitted. 
The responsible entity shall require evidence of eligible status to be 
submitted at the times specified in paragraph (g) of this section, 
subject to any extension granted in accordance with paragraph (h) of 
this section.
    (1) Applicants. For applicants, responsible entities must ensure 
that evidence of eligible status is submitted not later than the date 
the responsible entity anticipates or has knowledge that verification of 
other aspects of eligibility for assistance will occur (see Sec.  
5.512(a)).
    (2) Tenants. For tenants, evidence of eligible status is required to 
be submitted as follows:
    (i) For financial assistance under a Section 214 covered program, 
with the exception of Section 235 assistance payments, the required 
evidence shall be submitted at the first regular reexamination after 
June 19, 1995, in accordance with program requirements.
    (ii) For financial assistance in the form of Section 235 assistance 
payments, the mortgagor shall submit the required evidence in accordance 
with requirements imposed under the Section 235 Program.
    (3) New occupants of assisted units. For any new occupant of an 
assisted unit (e.g., a new family member comes to reside in the assisted 
unit), the required evidence shall be submitted at the first interim or 
regular reexamination following the person's occupancy.
    (4) Changing participation in a HUD program. Whenever a family 
applies for admission to a Section 214 covered program, evidence of 
eligible status is required to be submitted in accordance

[[Page 85]]

with the requirements of this subpart unless the family already has 
submitted the evidence to the responsible entity for a Section 214 
covered program.
    (5) One-time evidence requirement for continuous occupancy. For each 
family member, the family is required to submit evidence of eligible 
status only one time during continuously assisted occupancy under any 
Section 214 covered program.
    (h) Extensions of time to submit evidence of eligible status--(1) 
When extension must be granted. The responsible entity shall extend the 
time, provided in paragraph (g) of this section, to submit evidence of 
eligible immigration status if the family member:
    (i) Submits the declaration required under Sec.  5.508(a) certifying 
that any person for whom required evidence has not been submitted is a 
noncitizen with eligible immigration status; and
    (ii) Certifies that the evidence needed to support a claim of 
eligible immigration status is temporarily unavailable, additional time 
is needed to obtain and submit the evidence, and prompt and diligent 
efforts will be undertaken to obtain the evidence.
    (2) Thirty-day extension period. Any extension of time, if granted, 
shall not exceed thirty (30) days. The additional time provided should 
be sufficient to allow the individual the time to obtain the evidence 
needed. The responsible entity's determination of the length of the 
extension needed shall be based on the circumstances of the individual 
case.
    (3) Grant or denial of extension to be in writing. The responsible 
entity's decision to grant or deny an extension as provided in paragraph 
(h)(1) of this section shall be issued to the family by written notice. 
If the extension is granted, the notice shall specify the extension 
period granted (which shall not exceed thirty (30) days). If the 
extension is denied, the notice shall explain the reasons for denial of 
the extension.
    (i) Failure to submit evidence or to establish eligible status. If 
the family fails to submit required evidence of eligible immigration 
status within the time period specified in the notice, or any extension 
granted in accordance with paragraph (h) of this section, or if the 
evidence is timely submitted but fails to establish eligible immigration 
status, the responsible entity shall proceed to deny, prorate or 
terminate assistance, or provide continued assistance or temporary 
deferral of termination of assistance, as appropriate, in accordance 
with the provisions of Sec. Sec.  5.514, 5.516, and 5.518.
    (ii) [Reserved]

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60538, Nov. 29, 1996; 
64 FR 25731, May 12, 1999]



Sec.  5.510  Documents of eligible immigration status.

    (a) General. A responsible entity shall request and review original 
documents of eligible immigration status. The responsible entity shall 
retain photocopies of the documents for its own records and return the 
original documents to the family.
    (b) Acceptable evidence of eligible immigration status. Acceptable 
evidence of eligible immigration status shall be the original of a 
document designated by INS as acceptable evidence of immigration status 
in one of the six categories mentioned in Sec.  5.506(a) for the 
specific immigration status claimed by the individual.

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996; 
64 FR 25731, May 12, 1999]



Sec.  5.512  Verification of eligible immigration status.

    (a) General. Except as described in paragraph (b) of this section 
and Sec.  5.514, no individual or family applying for assistance may 
receive such assistance prior to the verification of the eligibility of 
at least the individual or one family member. Verification of 
eligibility consistent with Sec.  5.514 occurs when the individual or 
family members have submitted documentation to the responsible entity in 
accordance with Sec.  5.508.
    (b) PHA election to provide assistance before verification. A PHA 
that is a responsible entity under this subpart may elect to provide 
assistance to a family before the verification of the eligibility of the 
individual or one family member.
    (c) Primary verification--(1) Automated verification system. Primary 
verification

[[Page 86]]

of the immigration status of the person is conducted by the responsible 
entity through the INS automated system (INS Systematic Alien 
Verification for Entitlements (SAVE)). The INS SAVE system provides 
access to names, file numbers and admission numbers of noncitizens.
    (2) Failure of primary verification to confirm eligible immigration 
status. If the INS SAVE system does not verify eligible immigration 
status, secondary verification must be performed.
    (d) Secondary verification--(1) Manual search of INS records. 
Secondary verification is a manual search by the INS of its records to 
determine an individual's immigration status. The responsible entity 
must request secondary verification, within 10 days of receiving the 
results of the primary verification, if the primary verification system 
does not confirm eligible immigration status, or if the primary 
verification system verifies immigration status that is ineligible for 
assistance under a Section 214 covered program.
    (2) Secondary verification initiated by responsible entity. 
Secondary verification is initiated by the responsible entity forwarding 
photocopies of the original INS documents required for the immigration 
status declared (front and back), attached to the INS document 
verification request form G-845S (Document Verification Request), or 
such other form specified by the INS to a designated INS office for 
review. (Form G-845S is available from the local INS Office.)
    (3) Failure of secondary verification to confirm eligible 
immigration status. If the secondary verification does not confirm 
eligible immigration status, the responsible entity shall issue to the 
family the notice described in Sec.  5.514(d), which includes 
notification of the right to appeal to the INS of the INS finding on 
immigration status (see Sec.  5.514(d)(4)).
    (e) Exemption from liability for INS verification. The responsible 
entity shall not be liable for any action, delay, or failure of the INS 
in conducting the automated or manual verification.

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996; 
64 FR 25731, May 12, 1999]



Sec.  5.514  Delay, denial, reduction or termination of assistance.

    (a) General. Assistance to a family may not be delayed, denied, 
reduced or terminated because of the immigration status of a family 
member except as provided in this section.
    (b) Restrictions on delay, denial, reduction or termination of 
assistance--(1) Restrictions on reduction, denial or termination of 
assistance for applicants and tenants. Assistance to an applicant or 
tenant shall not be delayed, denied, reduced, or terminated, on the 
basis of ineligible immigration status of a family member if:
    (i) The primary and secondary verification of any immigration 
documents that were timely submitted has not been completed;
    (ii) The family member for whom required evidence has not been 
submitted has moved from the assisted dwelling unit;
    (iii) The family member who is determined not to be in an eligible 
immigration status following INS verification has moved from the 
assisted dwelling unit;
    (iv) The INS appeals process under Sec.  5.514(e) has not been 
concluded;
    (v) Assistance is prorated in accordance with Sec.  5.520; or
    (vi) Assistance for a mixed family is continued in accordance with 
Sec. Sec.  5.516 and 5.518; or
    (vii) Deferral of termination of assistance is granted in accordance 
with Sec. Sec.  5.516 and 5.518.
    (2) Restrictions on delay, denial, reduction or termination of 
assistance pending fair hearing for tenants. In addition to the factors 
listed in paragraph (b)(1) of this section, assistance to a tenant 
cannot be delayed, denied, reduced or terminated until the completion of 
the informal hearing described in paragraph (f) of this section.
    (c) Events causing denial or termination of assistance--(1) General. 
Assistance to an applicant shall be denied, and a tenant's assistance 
shall be terminated, in accordance with the procedures of this section, 
upon the occurrence of any of the following events:
    (i) Evidence of citizenship (i.e., the declaration) and eligible 
immigration status is not submitted by the date

[[Page 87]]

specified in Sec.  5.508(g) or by the expiration of any extension 
granted in accordance with Sec.  5.508(h);
    (ii) Evidence of citizenship and eligible immigration status is 
timely submitted, but INS primary and secondary verification does not 
verify eligible immigration status of a family member; and
    (A) The family does not pursue INS appeal or informal hearing rights 
as provided in this section; or
    (B) INS appeal and informal hearing rights are pursued, but the 
final appeal or hearing decisions are decided against the family member; 
or
    (iii) The responsible entity determines that a family member has 
knowingly permitted another individual who is not eligible for 
assistance to reside (on a permanent basis) in the public or assisted 
housing unit of the family member. Such termination shall be for a 
period of not less than 24 months. This provision does not apply to a 
family if the ineligibility of the ineligible individual was considered 
in calculating any proration of assistance provided for the family.
    (2) Termination of assisted occupancy. For termination of assisted 
occupancy, see paragraph (i) of this section.
    (d) Notice of denial or termination of assistance. The notice of 
denial or termination of assistance shall advise the family:
    (1) That financial assistance will be denied or terminated, and 
provide a brief explanation of the reasons for the proposed denial or 
termination of assistance;
    (2) That the family may be eligible for proration of assistance as 
provided under Sec.  5.520;
    (3) In the case of a tenant, the criteria and procedures for 
obtaining relief under the provisions for preservation of families in 
Sec. Sec.  5.514 and 5.518;
    (4) That the family has a right to request an appeal to the INS of 
the results of secondary verification of immigration status and to 
submit additional documentation or a written explanation in support of 
the appeal in accordance with the procedures of paragraph (e) of this 
section;
    (5) That the family has a right to request an informal hearing with 
the responsible entity either upon completion of the INS appeal or in 
lieu of the INS appeal as provided in paragraph (f) of this section;
    (6) For applicants, the notice shall advise that assistance may not 
be delayed until the conclusion of the INS appeal process, but 
assistance may be delayed during the pendency of the informal hearing 
process.
    (e) Appeal to the INS--(1) Submission of request for appeal. Upon 
receipt of notification by the responsible entity that INS secondary 
verification failed to confirm eligible immigration status, the 
responsible entity shall notify the family of the results of the INS 
verification, and the family shall have 30 days from the date of the 
responsible entity's notification, to request an appeal of the INS 
results. The request for appeal shall be made by the family 
communicating that request in writing directly to the INS. The family 
must provide the responsible entity with a copy of the written request 
for appeal and proof of mailing.
    (2) Documentation to be submitted as part of appeal to INS. The 
family shall forward to the designated INS office any additional 
documentation or written explanation in support of the appeal. This 
material must include a copy of the INS document verification request 
form G-845S (used to process the secondary verification request) or such 
other form specified by the INS, and a cover letter indicating that the 
family is requesting an appeal of the INS immigration status 
verification results.
    (3) Decision by INS--(i) When decision will be issued. The INS will 
issue to the family, with a copy to the responsible entity, a decision 
within 30 days of its receipt of documentation concerning the family's 
appeal of the verification of immigration status. If, for any reason, 
the INS is unable to issue a decision within the 30 day time period, the 
INS will inform the family and responsible entity of the reasons for the 
delay.
    (ii) Notification of INS decision and of informal hearing 
procedures. When the responsible entity receives a copy of the INS 
decision, the responsible entity shall notify the family of its right to

[[Page 88]]

request an informal hearing on the responsible entity's ineligibility 
determination in accordance with the procedures of paragraph (f) of this 
section.
    (4) No delay, denial, reduction, or termination of assistance until 
completion of INS appeal process; direct appeal to INS. Pending the 
completion of the INS appeal under this section, assistance may not be 
delayed, denied, reduced or terminated on the basis of immigration 
status.
    (f) Informal hearing--(1) When request for hearing is to be made. 
After notification of the INS decision on appeal, or in lieu of request 
of appeal to the INS, the family may request that the responsible entity 
provide a hearing. This request must be made either within 30 days of 
receipt of the notice described in paragraph (d) of this section, or 
within 30 days of receipt of the INS appeal decision issued in 
accordance with paragraph (e) of this section.
    (2) Informal hearing procedures--(i) Tenants assisted under a 
Section 8 covered program: For tenants assisted under a Section 8 
covered program, the procedures for the hearing before the responsible 
entity are set forth in:
    (A) For Section 8 Moderate Rehabilitation assistance: 24 CFR part 
882;
    (B) For Section 8 tenant-based assistance: 24 CFR part 982; or
    (C) For Section 8 project-based certificate program: 24 CFR part 
983.
    (ii) Tenants assisted under any other Section 8 covered program or a 
Public Housing covered program: For tenants assisted under a Section 8 
covered program not listed in paragraph (f)(3)(i) of this section or a 
Public Housing covered program, the procedures for the hearing before 
the responsible entity are set forth in 24 CFR part 966.
    (iii) Families under Housing covered programs and applicants for 
assistance under all covered programs. For all families under Housing 
covered programs (applicants as well as tenants already receiving 
assistance) and for applicants for assistance under all covered 
programs, the procedures for the informal hearing before the responsible 
entity are as follows:
    (A) Hearing before an impartial individual. The family shall be 
provided a hearing before any person(s) designated by the responsible 
entity (including an officer or employee of the responsible entity), 
other than a person who made or approved the decision under review, and 
other than a person who is a subordinate of the person who made or 
approved the decision;
    (B) Examination of evidence. The family shall be provided the 
opportunity to examine and copy at the individual's expense, at a 
reasonable time in advance of the hearing, any documents in the 
possession of the responsible entity pertaining to the family's 
eligibility status, or in the possession of the INS (as permitted by INS 
requirements), including any records and regulations that may be 
relevant to the hearing;
    (C) Presentation of evidence and arguments in support of eligible 
status. The family shall be provided the opportunity to present evidence 
and arguments in support of eligible status. Evidence may be considered 
without regard to admissibility under the rules of evidence applicable 
to judicial proceedings;
    (D) Controverting evidence of the responsible entity. The family 
shall be provided the opportunity to controvert evidence relied upon by 
the responsible entity and to confront and cross-examine all witnesses 
on whose testimony or information the responsible entity relies;
    (E) Representation. The family shall be entitled to be represented 
by an attorney, or other designee, at the family's expense, and to have 
such person make statements on the family's behalf;
    (F) Interpretive services. The family shall be entitled to arrange 
for an interpreter to attend the hearing, at the expense of the family, 
or responsible entity, as may be agreed upon by the two parties to the 
proceeding; and
    (G) Hearing to be recorded. The family shall be entitled to have the 
hearing recorded by audiotape (a transcript of the hearing may, but is 
not required to, be provided by the responsible entity).
    (3) Hearing decision. The responsible entity shall provide the 
family with a written final decision, based solely on the facts 
presented at the hearing, within 14 days of the date of the informal 
hearing. The decision shall state the basis for the decision.

[[Page 89]]

    (g) Judicial relief. A decision against a family member, issued in 
accordance with paragraphs (e) or (f) of this section, does not preclude 
the family from exercising the right, that may otherwise be available, 
to seek redress directly through judicial procedures.
    (h) Retention of documents. The responsible entity shall retain for 
a minimum of 5 years the following documents that may have been 
submitted to the responsible entity by the family, or provided to the 
responsible entity as part of the INS appeal or the informal hearing 
process:
    (1) The application for financial assistance;
    (2) The form completed by the family for income reexamination;
    (3) Photocopies of any original documents (front and back), 
including original INS documents;
    (4) The signed verification consent form;
    (5) The INS verification results;
    (6) The request for an INS appeal;
    (7) The final INS determination;
    (8) The request for an informal hearing; and
    (9) The final informal hearing decision.
    (i) Termination of assisted occupancy. (1) Under Housing covered 
programs, and in the Section 8 covered programs other than the Section 8 
Rental Certificate, Rental Voucher, and Moderate Rehabilitation 
programs, assisted occupancy is terminated by:
    (i) If permitted under the lease, the responsible entity notifying 
the tenant that because of the termination of assisted occupancy the 
tenant is required to pay the HUD-approved market rent for the dwelling 
unit.
    (ii) The responsible entity and tenant entering into a new lease 
without financial assistance.
    (iii) The responsible entity evicting the tenant. While the tenant 
continues in occupancy of the unit, the responsible entity may continue 
to receive assistance payments if action to terminate the tenancy under 
an assisted lease is promptly initiated and diligently pursued, in 
accordance with the terms of the lease, and if eviction of the tenant is 
undertaken by judicial action pursuant to State and local law. Action by 
the responsible entity to terminate the tenancy and to evict the tenant 
must be in accordance with applicable HUD regulations and other HUD 
requirements. For any jurisdiction, HUD may prescribe a maximum period 
during which assistance payments may be continued during eviction 
proceedings and may prescribe other standards of reasonable diligence 
for the prosecution of eviction proceedings.
    (2) In the Section 8 Rental Certificate, Rental Voucher, and 
Moderate Rehabilitation programs, assisted occupancy is terminated by 
terminating assistance payments. (See provisions of this section 
concerning termination of assistance.) The PHA shall not make any 
additional assistance payments to the owner after the required 
procedures specified in this section have been completed. In addition, 
the PHA shall not approve a lease, enter into an assistance contract, or 
process a portability move for the family after those procedures have 
been completed.

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996; 
64 FR 25731, May 12, 1999]



Sec.  5.516  Availability of preservation assistance to mixed families
and other families.

    (a) Assistance available for tenant mixed families--(1) General. 
Preservation assistance is available to tenant mixed families, following 
completion of the appeals and informal hearing procedures provided in 
Sec.  5.514. There are three types of preservation assistance:
    (i) Continued assistance (see paragraph (a) of Sec.  5.518);
    (ii) Temporary deferral of termination of assistance (see paragraph 
(b) of Sec.  5.518); or
    (iii) Prorated assistance (see Sec.  5.520, a mixed family must be 
provided prorated assistance if the family so requests).
    (2) Availability of assistance--(i) For Housing covered programs: 
One of the three types of assistance described is available to tenant 
mixed families assisted under a National Housing Act or 1965 HUD Act 
covered program, depending upon the family's eligibility for such 
assistance. Continued assistance must be provided to a mixed family

[[Page 90]]

that meets the conditions for eligibility for continued assistance.
    (ii) For Section 8 or Public Housing covered programs. One of the 
three types of assistance described may be available to tenant mixed 
families assisted under a Section 8 or Public Housing covered program.
    (b) Assistance available for applicant mixed families. Prorated 
assistance is also available for mixed families applying for assistance 
as provided in Sec.  5.520.
    (c) Assistance available to other families in occupancy. Temporary 
deferral of termination of assistance may be available to families 
receiving assistance under a Section 214 covered program on June 19, 
1995, and who have no members with eligible immigration status, as set 
forth in paragraphs (c)(1) and (2) of this section.
    (1) For Housing covered programs: Temporary deferral of termination 
of assistance is available to families assisted under a Housing covered 
program.
    (2) For Section 8 or Public Housing covered programs: The 
responsible entity may make temporary deferral of termination of 
assistance to families assisted under a Section 8 or Public Housing 
covered program.
    (d) Section 8 covered programs: Discretion afforded to provide 
certain family preservation assistance--(1) Project owners. With respect 
to assistance under a Section 8 Act covered program administered by a 
project owner, HUD has the discretion to determine under what 
circumstances families are to be provided one of the two statutory forms 
of assistance for preservation of the family (continued assistance or 
temporary deferral of assistance). HUD is exercising its discretion by 
specifying the standards in this section under which a project owner 
must provide one of these two types of assistance to a family. However, 
project owners and PHAs must offer prorated assistance to eligible mixed 
families.
    (2) PHAs. The PHA, rather than HUD, has the discretion to determine 
the circumstances under which a family will be offered one of the two 
statutory forms of assistance (continued assistance or temporary 
deferral of termination of assistance). The PHA must establish its own 
policy and criteria to follow in making its decision. In establishing 
the criteria for granting continued assistance or temporary deferral of 
termination of assistance, the PHA must incorporate the statutory 
criteria, which are set forth in paragraphs (a) and (b) of Sec.  5.518. 
However, the PHA must offer prorated assistance to eligible families.

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996; 
64 FR 25732, May 12, 1999]



Sec.  5.518  Types of preservation assistance available to mixed 
families and other families.

    (a) Continued assistance--(1) General. A mixed family may receive 
continued housing assistance if all of the following conditions are met 
(a mixed family assisted under a Housing covered program must be 
provided continued assistance if the family meets the following 
conditions):
    (i) The family was receiving assistance under a Section 214 covered 
program on June 19, 1995;
    (ii) The family's head of household or spouse has eligible 
immigration status as described in Sec.  5.506; and
    (iii) The family does not include any person (who does not have 
eligible immigration status) other than the head of household, any 
spouse of the head of household, any parents of the head of household, 
any parents of the spouse, or any children of the head of household or 
spouse.
    (2) Proration of continued assistance. A family entitled to 
continued assistance before November 29, 1996 is entitled to continued 
assistance as described in paragraph (a) of this section. A family 
entitled to continued assistance after November 29, 1996 shall receive 
prorated assistance as described in Sec.  5.520.
    (b) Temporary deferral of termination of assistance--(1) Eligibility 
for this type of assistance. If a mixed family qualifies for prorated 
assistance (and does not qualify for continued assistance), but decides 
not to accept prorated assistance, or if a family has no members with 
eligible immigration status, the family may be eligible for temporary 
deferral of termination of assistance if necessary to permit the family 
additional time for the orderly transition

[[Page 91]]

of those family members with ineligible status, and any other family 
members involved, to other affordable housing. Other affordable housing 
is used in the context of transition of an ineligible family from a rent 
level that reflects HUD assistance to a rent level that is unassisted; 
the term refers to housing that is not substandard, that is of 
appropriate size for the family and that can be rented for an amount not 
exceeding the amount that the family pays for rent, including utilities, 
plus 25 percent.
    (2) Housing covered programs: Conditions for granting temporary 
deferral of termination of assistance. The responsible entity shall 
grant a temporary deferral of termination of assistance to a mixed 
family if the family is assisted under a Housing covered program and one 
of the following conditions is met:
    (i) The family demonstrates that reasonable efforts to find other 
affordable housing of appropriate size have been unsuccessful (for 
purposes of this section, reasonable efforts include seeking information 
from, and pursuing leads obtained from the State housing agency, the 
city government, local newspapers, rental agencies and the owner);
    (ii) The vacancy rate for affordable housing of appropriate size is 
below five percent in the housing market for the area in which the 
project is located; or
    (iii) The consolidated plan, as described in 24 CFR part 91 and if 
applicable to the covered program, indicates that the local 
jurisdiction's housing market lacks sufficient affordable housing 
opportunities for households having a size and income similar to the 
family seeking the deferral.
    (3) Time limit on deferral period. If temporary deferral of 
termination of assistance is granted, the deferral period shall be for 
an initial period not to exceed six months. The initial period may be 
renewed for additional periods of six months, but the aggregate deferral 
period for deferrals provided after November 29, 1996 shall not exceed a 
period of eighteen months. The aggregate deferral period for deferrals 
granted prior to November 29, 1996 shall not exceed 3 years. These time 
periods do not apply to a family which includes a refugee under section 
207 of the Immigration and Nationality Act or an individual seeking 
asylum under section 208 of that Act.
    (4) Notification requirements for beginning of each deferral period. 
At the beginning of each deferral period, the responsible entity must 
inform the family of its ineligibility for financial assistance and 
offer the family information concerning, and referrals to assist in 
finding, other affordable housing.
    (5) Determination of availability of affordable housing at end of 
each deferral period. (i) Before the end of each deferral period, the 
responsible entity must satisfy the applicable requirements of either 
paragraph (b)(5)(i)(A) or (B) of this section. Specifically, the 
responsible entity must:
    (A) For Housing covered programs: Make a determination that one of 
the two conditions specified in paragraph (b)(2) of this section 
continues to be met (note: affordable housing will be determined to be 
available if the vacancy rate is five percent or greater), the owner's 
knowledge and the tenant's evidence indicate that other affordable 
housing is available; or
    (B) For Section 8 or Public Housing covered programs: Make a 
determination of the availability of affordable housing of appropriate 
size based on evidence of conditions which when taken together will 
demonstrate an inadequate supply of affordable housing for the area in 
which the project is located, the consolidated plan (if applicable, as 
described in 24 CFR part 91), the responsible entity's own knowledge of 
the availability of affordable housing, and on evidence of the tenant 
family's efforts to locate such housing.
    (ii) The responsible entity must also:
    (A) Notify the tenant family in writing, at least 60 days in advance 
of the expiration of the deferral period, that termination will be 
deferred again (provided that the granting of another deferral will not 
result in aggregate deferral periods that exceeds the maximum deferral 
period). This time period does not apply to a family which includes a 
refugee under section 207 of the Immigration and Nationality Act or an 
individual seeking asylum under section 208 of that Act, and a 
determination was made that other affordable housing is not available; 
or

[[Page 92]]

    (B) Notify the tenant family in writing, at least 60 days in advance 
of the expiration of the deferral period, that termination of financial 
assistance will not be deferred because either granting another deferral 
will result in aggregate deferral periods that exceed the maximum 
deferral period (unless the family includes a refugee under section 207 
of the Immigration and Nationality Act or an individual seeking asylum 
under section 208 of that Act), or a determination has been made that 
other affordable housing is available.
    (c) Option to select proration of assistance at end of deferral 
period. A family who is eligible for, and receives temporary deferral of 
termination of assistance, may request, and the responsible entity shall 
provide proration of assistance at the end of the deferral period if the 
family has made a good faith effort during the deferral period to locate 
other affordable housing.
    (d) Notification of decision on family preservation assistance. A 
responsible entity shall notify the family of its decision concerning 
the family's qualification for family preservation assistance. If the 
family is ineligible for family preservation assistance, the 
notification shall state the reasons, which must be based on relevant 
factors. For tenant families, the notice also shall inform the family of 
any applicable appeal rights.

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996; 
64 FR 25732, May 12, 1999]



Sec.  5.520  Proration of assistance.

    (a) Applicability. This section applies to a mixed family other than 
a family receiving continued assistance, or other than a family who is 
eligible for and requests and receives temporary deferral of termination 
of assistance. An eligible mixed family who requests prorated assistance 
must be provided prorated assistance.
    (b) Method of prorating assistance for Housing covered programs--(1) 
Proration under Rent Supplement Program. If the household participates 
in the Rent Supplement Program, the rent supplement paid on the 
household's behalf shall be the rent supplement the household would 
otherwise be entitled to, multiplied by a fraction, the denominator of 
which is the number of people in the household and the numerator of 
which is the number of eligible persons in the household;
    (2) Proration under Section 235 Program. If the household 
participates in the Section 235 Program, the interest reduction payments 
paid on the household's behalf shall be the payments the household would 
otherwise be entitled to, multiplied by a fraction the denominator of 
which is the number of people in the household and the numerator of 
which is the number of eligible persons in the household;
    (3) Proration under Section 236 Program without the benefit of 
additional assistance. If the household participates in the Section 236 
Program without the benefit of any additional assistance, the 
household's rent shall be increased above the rent the household would 
otherwise pay by an amount equal to the difference between the market 
rate rent for the unit and the rent the household would otherwise pay 
multiplied by a fraction the denominator of which is the number of 
people in the household and the numerator of which is the number of 
ineligible persons in the household;
    (4) Proration under Section 236 Program with the benefit of 
additional assistance. If the household participates in the Section 236 
Program with the benefit of additional assistance under the rent 
supplement, rental assistance payment or Section 8 programs, the 
household's rent shall be increased above the rent the household would 
otherwise pay by:
    (i) An amount equal to the difference between the market rate rent 
for the unit and the basic rent for the unit multiplied by a fraction, 
the denominator of which is the number of people in the household, and 
the numerator of which is the number of ineligible persons in the 
household, plus;
    (ii) An amount equal to the rent supplement, housing assistance 
payment or rental assistance payment the household would otherwise be 
entitled to multiplied by a fraction, the denominator of which is the 
number of people in the household and the numerator of which is the 
number of ineligible persons in the household.
    (c) Method of prorating assistance for Section 8 covered programs--
(1) Section 8

[[Page 93]]

assistance other than assistance provided for a tenancy under the 
Section 8 Housing Choice Voucher Program. For Section 8 assistance other 
than assistance for a tenancy under the voucher program, the PHA must 
prorate the family's assistance as follows:
    (i) Step 1. Determine gross rent for the unit. (Gross rent is 
contract rent plus any allowance for tenant paid utilities).
    (ii) Step 2. Determine total tenant payment in accordance with 
section 5.613(a). (Annual income includes income of all family members, 
including any family member who has not established eligible immigration 
status.)
    (iii) Step 3. Subtract amount determined in paragraph (c)(1)(ii), 
(Step 2), from amount determined in paragraph (c)(1)(i), (Step 1).
    (iv) Step 4. Multiply the amount determined in paragraph 
(c)(1)(iii), (Step 3) by a fraction for which:
    (A) The numerator is the number of family members who have 
established eligible immigration status; and
    (B) The denominator is the total number of family members.
    (v) Prorated housing assistance. The amount determined in paragraph 
(c)(1)(iv) (Step 4) is the prorated housing assistance payment for a 
mixed family.
    (vi) No effect on contract rent. Proration of the housing assistance 
payment does not affect contract rent to the owner. The family must pay 
as rent the portion of contract rent not covered by the prorated housing 
assistance payment.
    (2) Assistance for a Section 8 voucher tenancy. For a tenancy under 
the voucher program, the PHA must prorate the family's assistance as 
follows:
    (i) Step 1. Determine the amount of the pre-proration housing 
assistance payment. (Annual income includes income of all family 
members, including any family member who has not established eligible 
immigration status.)
    (ii) Step 2. Multiply the amount determined in paragraph (c)(2)(i) 
(Step 1) by a fraction for which:
    (A) The numerator is the number of family members who have 
established eligible immigration status; and
    (B) The denominator is the total number of family members.
    (iii) Prorated housing assistance. The amount determined in 
paragraph (c)(2)(ii) (Step 2) is the prorated housing assistance payment 
for a mixed family.
    (iv) No effect on rent to owner. Proration of the housing assistance 
payment does not affect rent to owner. The family must pay the portion 
of rent to owner not covered by the prorated housing assistance payment.
    (d) Method of prorating assistance for Public Housing covered 
programs. (1) The PHA must prorate the family's assistance as follows:
    (i) Step 1. Determine the total tenant payment in accordance with 
section 5.628. (Annual income includes income of all family members, 
including any family member who has not established eligible immigration 
status.)
    (ii) Step 2. Subtract the total tenant payment from the PHA-
established flat rent applicable to the unit. The result is the maximum 
subsidy for which the family could qualify if all members were eligible 
(``family maximum subsidy'').
    (iii) Step 3. Divide the family maximum subsidy by the number of 
persons in the family (all persons) to determine the maximum subsidy per 
each family member who has citizenship or eligible immigration status 
(``eligible family member''). The subsidy per eligible family member is 
the ``member maximum subsidy.''
    (iv) Step 4. Multiply the member maximum subsidy by the number of 
family members who have citizenship or eligible immigration status 
(``eligible family members'').
    (2) The product of steps 1 through 4 of paragraphs (d)(1)(i) through 
(iv) of this section is the amount of subsidy for which the family is 
eligible (``eligible subsidy''). The family's rent is the PHA-
established flat rent minus the amount of the eligible subsidy.
    (e) Method of prorating assistance when the mixed family's total 
tenant payment (TTP) is greater than the public housing flat rent. When 
the mixed family's TTP is greater than the flat rent, the PHA must use 
the TTP as the mixed family TTP. The PHA subtracts from the

[[Page 94]]

mixed family TTP any established utility allowance, and the sum becomes 
the mixed family rent.

[61 FR 5202, Feb. 9, 1996, as amended at 63 FR 23853, Apr. 30, 1998; 64 
FR 13056, Mar. 16, 1999; 81 FR 12370, Mar. 8, 2016]



Sec.  5.522  Prohibition of assistance to noncitizen students.

    (a) General. The provisions of Sec. Sec.  5.516 and 5.518 permitting 
continued assistance or temporary deferral of termination of assistance 
for certain families do not apply to any person who is determined to be 
a noncitizen student as in paragraph (c)(2)(A) of Section 214 (42 U.S.C. 
1436a(c)(2)(A)). The family of a noncitizen student may be eligible for 
prorated assistance, as provided in paragraph (b)(2) of this section.
    (b) Family of noncitizen students. (1) The prohibition on providing 
assistance to a noncitizen student as described in paragraph (a) of this 
section extends to the noncitizen spouse of the noncitizen student and 
minor children accompanying the student or following to join the 
student.
    (2) The prohibition on providing assistance to a noncitizen student 
does not extend to the citizen spouse of the noncitizen student and the 
children of the citizen spouse and noncitizen student.



Sec.  5.524  Compliance with nondiscrimination requirements.

    The responsible entity shall administer the restrictions on use of 
assisted housing by noncitizens with ineligible immigration status 
imposed by this part in conformity with all applicable nondiscrimination 
and equal opportunity requirements, including, but not limited to, title 
VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-5) and the 
implementing regulations in 24 CFR part 1, section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794) and the implementing 
regulations in 24 CFR part 8, the Fair Housing Act (42 U.S.C. 3601-3619) 
and the implementing regulations in 24 CFR part 100.



Sec.  5.526  Protection from liability for responsible entities and
State and local government agencies and officials.

    (a) Protection from liability for responsible entities. Responsible 
entities are protected from liability as set forth in Section 214(e) (42 
U.S.C 1436a(e)).
    (b) Protection from liability for State and local government 
agencies and officials. State and local government agencies and 
officials shall not be liable for the design or implementation of the 
verification system described in Sec.  5.512, as long as the 
implementation by the State and local government agency or official is 
in accordance with prescribed HUD rules and requirements.

[64 FR 25732, May 12, 1999]



Sec.  5.528  Liability of ineligible tenants for reimbursement of benefits.

    Where a tenant has received the benefit of HUD financial assistance 
to which the tenant was not entitled because the tenant intentionally 
misrepresented eligible status, the ineligible tenant is responsible for 
reimbursing HUD for the assistance improperly paid. If the amount of the 
assistance is substantial, the responsible entity is encouraged to refer 
the case to the HUD Inspector General's office for further 
investigation. Possible criminal prosecution may follow based on the 
False Statements Act (18 U.S.C. 1001 and 1010).



 Subpart F_Section 8 and Public Housing, and Other HUD Assisted Housing 
  Serving Persons with Disabilities: Family Income and Family Payment; 
      Occupancy Requirements for Section 8 Project-Based Assistance

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n, and 3535(d).

    Source: 61 FR 54498, Oct. 18, 1996, unless otherwise noted.



Sec.  5.601  Purpose and applicability.

    This subpart states HUD requirements on the following subjects:

[[Page 95]]

    (a) Determining annual and adjusted income of families who apply for 
or receive assistance in the Section 8 (tenant-based and project-based) 
and public housing programs;
    (b) Determining payments by and utility reimbursements to families 
assisted in these programs;
    (c) Additional occupancy requirements that apply to the Section 8 
project-based assistance programs. These additional requirements 
concern:
    (1) Income-eligibility and income-targeting when a Section 8 owner 
admits families to a Section 8 project or unit;
    (2) Owner selection preferences; and
    (3) Owner reexamination of family income and composition;
    (d) Determining adjusted income, as provided in Sec.  5.611(a) and 
(b), for families who apply for or receive assistance under the 
following programs: HOME Investment Partnerships Program (24 CFR part 
92); Rent Supplement Payments Program (24 CFR part 200, subpart W); 
Rental Assistance Payments Program (24 CFR part 236, subpart D); Housing 
Opportunities for Persons with AIDS (24 CFR part 574); Shelter Plus Care 
Program (24 CFR part 582); Supportive Housing Program (McKinney Act 
Homeless Assistance) (24 CFR part 583); Section 202 Supportive Housing 
Program for the Elderly (24 CFR 891, subpart B); Section 202 Direct 
Loans for Housing for the Elderly and Persons with Disabilities (24 CFR 
part 891, subpart E) and the Section 811 Supportive Housing for Persons 
with Disabilities (24 CFR part 891, subpart C). Unless specified in the 
regulations for each of the programs listed in paragraph (d) of this 
section or in another regulatory section of this part 5, subpart F, the 
regulations in part 5, subpart F, generally are not applicable to these 
programs; and
    (e) Determining earned income disregard for persons with 
disabilities, as provided in Sec.  5.617, for the following programs: 
HOME Investment Partnerships Program (24 CFR part 92); Housing 
Opportunities for Persons with AIDS (24 CFR part 574); Supportive 
Housing Program (McKinney Act Homeless Assistance) (24 CFR part 583); 
and the Housing Choice Voucher Program (24 CFR part 982).

[66 FR 6222, Jan. 19, 2001]



Sec.  5.603  Definitions.

    As used in this subpart:
    (a) Terms found elsewhere in part 5--(1) Subpart A. The terms 1937 
Act, elderly person, public housing, public housing agency (PHA), 
responsible entity and Section 8 are defined in Sec.  5.100.
    (2) Subpart D. The terms ``disabled family'', ``elderly family'', 
``family'', ``live-in aide'', and ``person with disabilities'' are 
defined in Sec.  5.403.
    (b) The following terms shall have the meanings set forth below:
    Adjusted income. See Sec.  5.611.
    Annual income. See Sec.  5.609.
    Child care expenses. Amounts anticipated to be paid by the family 
for the care of children under 13 years of age during the period for 
which annual income is computed, but only where such care is necessary 
to enable a family member to actively seek employment, be gainfully 
employed, or to further his or her education and only to the extent such 
amounts are not reimbursed. The amount deducted shall reflect reasonable 
charges for child care. In the case of child care necessary to permit 
employment, the amount deducted shall not exceed the amount of 
employment income that is included in annual income.
    Dependent. A member of the family (except foster children and foster 
adults) other than the family head or spouse, who is under 18 years of 
age, or is a person with a disability, or is a full-time student.
    Disability assistance expenses. Reasonable expenses that are 
anticipated, during the period for which annual income is computed, for 
attendant care and auxiliary apparatus for a disabled family member and 
that are necessary to enable a family member (including the disabled 
member) to be employed, provided that the expenses are neither paid to a 
member of the family nor reimbursed by an outside source.
    Economic self-sufficiency program. Any program designed to 
encourage, assist, train, or facilitate the economic independence of 
HUD-assisted families or to provide work for such families. These 
programs include programs for

[[Page 96]]

job training, employment counseling, work placement, basic skills 
training, education, English proficiency, workfare, financial or 
household management, apprenticeship, and any program necessary to ready 
a participant for work (including a substance abuse or mental health 
treatment program), or other work activities.
    Extremely low-income family. A very low-income family whose annual 
income does not exceed the higher of:
    (1) The poverty guidelines established by the Department of Health 
and Human Services applicable to the family of the size involved (except 
in the case of families living in Puerto Rico or any other territory or 
possession of the United States); or
    (2) Thirty (30) percent of the median income for the area, as 
determined by HUD, with adjustments for smaller and larger families, 
except that HUD may establish income ceilings higher or lower than 30 
percent of the area median income for the area if HUD finds that such 
variations are necessary because of unusually high or low family 
incomes.
    Full-time student. A person who is attending school or vocational 
training on a full-time basis.
    Imputed welfare income. See Sec.  5.615.
    Low income family. A family whose annual income does not exceed 80 
percent of the median income for the area, as determined by HUD with 
adjustments for smaller and larger families, except that HUD may 
establish income ceilings higher or lower than 80 percent of the median 
income for the area on the basis of HUD's findings that such variations 
are necessary because of unusually high or low family incomes.
    Medical expenses. Medical expenses, including medical insurance 
premiums, that are anticipated during the period for which annual income 
is computed, and that are not covered by insurance.
    Monthly adjusted income. One twelfth of adjusted income.
    Monthly income. One twelfth of annual income.
    Net family assets. (1) Net cash value after deducting reasonable 
costs that would be incurred in disposing of real property, savings, 
stocks, bonds, and other forms of capital investment, excluding 
interests in Indian trust land and excluding equity accounts in HUD 
homeownership programs. The value of necessary items of personal 
property such as furniture and automobiles shall be excluded.
    (2) In cases where a trust fund has been established and the trust 
is not revocable by, or under the control of, any member of the family 
or household, the value of the trust fund will not be considered an 
asset so long as the fund continues to be held in trust. Any income 
distributed from the trust fund shall be counted when determining annual 
income under Sec.  5.609.
    (3) In determining net family assets, PHAs or owners, as applicable, 
shall include the value of any business or family assets disposed of by 
an applicant or tenant for less than fair market value (including a 
disposition in trust, but not in a foreclosure or bankruptcy sale) 
during the two years preceding the date of application for the program 
or reexamination, as applicable, in excess of the consideration received 
therefor. In the case of a disposition as part of a separation or 
divorce settlement, the disposition will not be considered to be for 
less than fair market value if the applicant or tenant receives 
important consideration not measurable in dollar terms.
    (4) For purposes of determining annual income under Sec.  5.609, the 
term ``net family assets'' does not include the value of a home 
currently being purchased with assistance under part 982, subpart M of 
this title. This exclusion is limited to the first 10 years after the 
purchase date of the home.
    Owner has the meaning provided in the relevant program regulations. 
As used in this subpart, where appropriate, the term ``owner'' shall 
also include a ``borrower'' as defined in part 891 of this title.
    Responsible entity. For Sec.  5.611, in addition to the definition 
of ``responsible entity'' in Sec.  5.100, and for Sec.  5.617, in 
addition to only that part of the definition of ``responsible entity'' 
in Sec.  5.100 which addresses the Section 8 program covered by Sec.  
5.617 (public housing is not covered by Sec.  5.617), ``responsible 
entity'' means:
    (1) For the HOME Investment Partnerships Program, the participating 
jurisdiction, as defined in 24 CFR 92.2;

[[Page 97]]

    (2) For the Rent Supplement Payments Program, the owner of the 
multifamily project;
    (3) For the Rental Assistance Payments Program, the owner of the 
Section 236 project;
    (4) For the Housing Opportunities for Persons with AIDS (HOPWA) 
program, the applicable ``State'' or ``unit of general local 
government'' or ``nonprofit organization'' as these terms are defined in 
24 CFR 574.3, that administers the HOPWA Program;
    (5) For the Shelter Plus Care Program, the ``Recipient'' as defined 
in 24 CFR 582.5;
    (6) For the Supportive Housing Program, the ``recipient'' as defined 
in 24 CFR 583.5;
    (7) For the Section 202 Supportive Housing Program for the Elderly, 
the ``Owner'' as defined in 24 CFR 891.205;
    (8) For the Section 202 Direct Loans for Housing for the Elderly and 
Persons with Disabilities), the ``Borrower'' as defined in 24 CFR 
891.505; and
    (9) For the Section 811 Supportive Housing Program for Persons with 
Disabilities, the ``owner'' as defined in 24 CFR 891.305.
    Tenant rent. The amount payable monthly by the family as rent to the 
unit owner (Section 8 owner or PHA in public housing). (This term is not 
used in the Section 8 voucher program.)
    Total tenant payment. See Sec.  5.628.
    Utility allowance. If the cost of utilities (except telephone) and 
other housing services for an assisted unit is not included in the 
tenant rent but is the responsibility of the family occupying the unit, 
an amount equal to the estimate made or approved by a PHA or HUD of the 
monthly cost of a reasonable consumption of such utilities and other 
services for the unit by an energy-conservative household of modest 
circumstances consistent with the requirements of a safe, sanitary, and 
healthful living environment.
    Utility reimbursement. The amount, if any, by which the utility 
allowance for a unit, if applicable, exceeds the total tenant payment 
for the family occupying the unit. (This definition is not used in the 
Section 8 voucher program, or for a public housing family that is paying 
a flat rent.)
    Very low income family. A family whose annual income does not exceed 
50 percent of the median family income for the area, as determined by 
HUD with adjustments for smaller and larger families, except that HUD 
may establish income ceilings higher or lower than 50 percent of the 
median income for the area if HUD finds that such variations are 
necessary because of unusually high or low family incomes.
    Welfare assistance. Welfare or other payments to families or 
individuals, based on need, that are made under programs funded, 
separately or jointly, by Federal, State or local governments (including 
assistance provided under the Temporary Assistance for Needy Families 
(TANF) program, as that term is defined under the implementing 
regulations issued by the Department of Health and Human Services at 45 
CFR 260.31).
    Work activities. See definition at section 407(d) of the Social 
Security Act (42 U.S.C. 607(d)).

[61 FR 54498, Oct. 18, 1996, as amended at 65 FR 16716, Mar. 29, 2000; 
65 FR 55161, Sept. 12, 2000; 66 FR 6223, Jan. 19, 2001; 67 FR 47432, 
July 18, 2002; 81 FR 12370, Mar. 8, 2016]

                              Family Income



Sec.  5.609  Annual income.

    (a) Annual income means all amounts, monetary or not, which:
    (1) Go to, or on behalf of, the family head or spouse (even if 
temporarily absent) or to any other family member; or
    (2) Are anticipated to be received from a source outside the family 
during the 12-month period following admission or annual reexamination 
effective date; and
    (3) Which are not specifically excluded in paragraph (c) of this 
section.
    (4) Annual income also means amounts derived (during the 12-month 
period) from assets to which any member of the family has access.
    (b) Annual income includes, but is not limited to:
    (1) The full amount, before any payroll deductions, of wages and 
salaries, overtime pay, commissions, fees, tips and bonuses, and other 
compensation for personal services;

[[Page 98]]

    (2) The net income from the operation of a business or profession. 
Expenditures for business expansion or amortization of capital 
indebtedness shall not be used as deductions in determining net income. 
An allowance for depreciation of assets used in a business or profession 
may be deducted, based on straight line depreciation, as provided in 
Internal Revenue Service regulations. Any withdrawal of cash or assets 
from the operation of a business or profession will be included in 
income, except to the extent the withdrawal is reimbursement of cash or 
assets invested in the operation by the family;
    (3) Interest, dividends, and other net income of any kind from real 
or personal property. Expenditures for amortization of capital 
indebtedness shall not be used as deductions in determining net income. 
An allowance for depreciation is permitted only as authorized in 
paragraph (b)(2) of this section. Any withdrawal of cash or assets from 
an investment will be included in income, except to the extent the 
withdrawal is reimbursement of cash or assets invested by the family. 
Where the family has net family assets in excess of $5,000, annual 
income shall include the greater of the actual income derived from all 
net family assets or a percentage of the value of such assets based on 
the current passbook savings rate, as determined by HUD;
    (4) The full amount of periodic amounts received from Social 
Security, annuities, insurance policies, retirement funds, pensions, 
disability or death benefits, and other similar types of periodic 
receipts, including a lump-sum amount or prospective monthly amounts for 
the delayed start of a periodic amount (except as provided in paragraph 
(c)(14) of this section);
    (5) Payments in lieu of earnings, such as unemployment and 
disability compensation, worker's compensation and severance pay (except 
as provided in paragraph (c)(3) of this section);
    (6) Welfare assistance payments. (i) Welfare assistance payments 
made under the Temporary Assistance for Needy Families (TANF) program 
are included in annual income only to the extent such payments:
    (A) Qualify as assistance under the TANF program definition at 45 
CFR 260.31; and
    (B) Are not otherwise excluded under paragraph (c) of this section.
    (ii) If the welfare assistance payment includes an amount 
specifically designated for shelter and utilities that is subject to 
adjustment by the welfare assistance agency in accordance with the 
actual cost of shelter and utilities, the amount of welfare assistance 
income to be included as income shall consist of:
    (A) The amount of the allowance or grant exclusive of the amount 
specifically designated for shelter or utilities; plus
    (B) The maximum amount that the welfare assistance agency could in 
fact allow the family for shelter and utilities. If the family's welfare 
assistance is ratably reduced from the standard of need by applying a 
percentage, the amount calculated under this paragraph shall be the 
amount resulting from one application of the percentage.
    (7) Periodic and determinable allowances, such as alimony and child 
support payments, and regular contributions or gifts received from 
organizations or from persons not residing in the dwelling;
    (8) All regular pay, special pay and allowances of a member of the 
Armed Forces (except as provided in paragraph (c)(7) of this section).
    (9) For section 8 programs only and as provided in 24 CFR 5.612, any 
financial assistance, in excess of amounts received for tuition and any 
other required fees and charges, that an individual receives under the 
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from private 
sources, or from an institution of higher education (as defined under 
the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered 
income to that individual, except that financial assistance described in 
this paragraph is not considered annual income for persons over the age 
of 23 with dependent children. For purposes of this paragraph, 
``financial assistance'' does not include loan proceeds for the purpose 
of determining income.
    (c) Annual income does not include the following:

[[Page 99]]

    (1) Income from employment of children (including foster children) 
under the age of 18 years;
    (2) Payments received for the care of foster children or foster 
adults (usually persons with disabilities, unrelated to the tenant 
family, who are unable to live alone);
    (3) Lump-sum additions to family assets, such as inheritances, 
insurance payments (including payments under health and accident 
insurance and worker's compensation), capital gains and settlement for 
personal or property losses (except as provided in paragraph (b)(5) of 
this section);
    (4) Amounts received by the family that are specifically for, or in 
reimbursement of, the cost of medical expenses for any family member;
    (5) Income of a live-in aide, as defined in Sec.  5.403;
    (6) Subject to paragraph (b)(9) of this section, the full amount of 
student financial assistance paid directly to the student or to the 
educational institution;
    (7) The special pay to a family member serving in the Armed Forces 
who is exposed to hostile fire;
    (8)(i) Amounts received under training programs funded by HUD;
    (ii) Amounts received by a person with a disability that are 
disregarded for a limited time for purposes of Supplemental Security 
Income eligibility and benefits because they are set aside for use under 
a Plan to Attain Self-Sufficiency (PASS);
    (iii) Amounts received by a participant in other publicly assisted 
programs which are specifically for or in reimbursement of out-of-pocket 
expenses incurred (special equipment, clothing, transportation, child 
care, etc.) and which are made solely to allow participation in a 
specific program;
    (iv) Amounts received under a resident service stipend. A resident 
service stipend is a modest amount (not to exceed $200 per month) 
received by a resident for performing a service for the PHA or owner, on 
a part-time basis, that enhances the quality of life in the development. 
Such services may include, but are not limited to, fire patrol, hall 
monitoring, lawn maintenance, resident initiatives coordination, and 
serving as a member of the PHA's governing board. No resident may 
receive more than one such stipend during the same period of time;
    (v) Incremental earnings and benefits resulting to any family member 
from participation in qualifying State or local employment training 
programs (including training programs not affiliated with a local 
government) and training of a family member as resident management 
staff. Amounts excluded by this provision must be received under 
employment training programs with clearly defined goals and objectives, 
and are excluded only for the period during which the family member 
participates in the employment training program;
    (9) Temporary, nonrecurring or sporadic income (including gifts);
    (10) Reparation payments paid by a foreign government pursuant to 
claims filed under the laws of that government by persons who were 
persecuted during the Nazi era;
    (11) Earnings in excess of $480 for each full-time student 18 years 
old or older (excluding the head of household and spouse);
    (12) Adoption assistance payments in excess of $480 per adopted 
child;
    (13) [Reserved]
    (14) Deferred periodic amounts from supplemental security income and 
Social Security benefits that are received in a lump sum amount or in 
prospective monthly amounts, or any deferred Department of Veterans 
Affairs disability benefits that are received in a lump sum amount or in 
prospective monthly amounts.
    (15) Amounts received by the family in the form of refunds or 
rebates under State or local law for property taxes paid on the dwelling 
unit;
    (16) Amounts paid by a State agency to a family with a member who 
has a developmental disability and is living at home to offset the cost 
of services and equipment needed to keep the developmentally disabled 
family member at home; or
    (17) Amounts specifically excluded by any other Federal statute from 
consideration as income for purposes of determining eligibility or 
benefits under a category of assistance programs that includes 
assistance under any program

[[Page 100]]

to which the exclusions set forth in 24 CFR 5.609(c) apply. A notice 
will be published in the Federal Register and distributed to PHAs and 
housing owners identifying the benefits that qualify for this exclusion. 
Updates will be published and distributed when necessary.
    (d) Annualization of income. If it is not feasible to anticipate a 
level of income over a 12-month period (e.g., seasonal or cyclic 
income), or the PHA believes that past income is the best available 
indicator of expected future income, the PHA may annualize the income 
anticipated for a shorter period, subject to a redetermination at the 
end of the shorter period.

[61 FR 54498, Oct. 18, 1996, as amended at 65 FR 16716, Mar. 29, 2000; 
67 FR 47432, July 18, 2002; 70 FR 77743, Dec. 30, 2005; 79 FR 36164, 
June 25, 2014; 81 FR 12370, Mar. 8, 2016]



Sec.  5.611  Adjusted income.

    Adjusted income means annual income (as determined by the 
responsible entity, defined in Sec.  5.100 and Sec.  5.603) of the 
members of the family residing or intending to reside in the dwelling 
unit, after making the following deductions:
    (a) Mandatory deductions. In determining adjusted income, the 
responsible entity must deduct the following amounts from annual income:
    (1) $480 for each dependent;
    (2) $400 for any elderly family or disabled family;
    (3) The sum of the following, to the extent the sum exceeds three 
percent of annual income:
    (i) Unreimbursed medical expenses of any elderly family or disabled 
family; and
    (ii) Unreimbursed reasonable attendant care and auxiliary apparatus 
expenses for each member of the family who is a person with 
disabilities, to the extent necessary to enable any member of the family 
(including the member who is a person with disabilities) to be employed. 
This deduction may not exceed the earned income received by family 
members who are 18 years of age or older and who are able to work 
because of such attendant care or auxiliary apparatus; and
    (4) Any reasonable child care expenses necessary to enable a member 
of the family to be employed or to further his or her education.
    (b) Additional deductions. (1) For public housing, a PHA may adopt 
additional deductions from annual income. The PHA must establish a 
written policy for such deductions.
    (2) For the HUD programs listed in Sec.  5.601(d), the responsible 
entity shall calculate such other deductions as required and permitted 
by the applicable program regulations.

[66 FR 6223, Jan. 19, 2001]



Sec.  5.612  Restrictions on assistance to students enrolled in an
institution of higher education.

    No assistance shall be provided under section 8 of the 1937 Act to 
any individual who:
    (a) Is enrolled as a student at an institution of higher education, 
as defined under section 102 of the Higher Education Act of 1965 (20 
U.S.C. 1002);
    (b) Is under 24 years of age;
    (c) Is not a veteran of the United States military;
    (d) Is unmarried;
    (e) Does not have a dependent child;
    (f) Is not a person with disabilities, as such term is defined in 
section 3(b)(3)(E) of the 1937 Act and was not receiving assistance 
under section 8 of the 1937 Act as of November 30, 2005; and
    (g) Is not otherwise individually eligible, or has parents who, 
individually or jointly, are not eligible on the basis of income to 
receive assistance under section 8 of the 1937 Act.

[70 FR 77743, Dec. 30, 2005, as amended at 73 FR 49333, Aug. 21, 2008]



Sec.  5.613  Public housing program and Section 8 tenant-based assistance
program: PHA cooperation with welfare agency.

    (a) This section applies to the public housing program and the 
Section 8 tenant-based assistance program.
    (b) The PHA must make best efforts to enter into cooperation 
agreements with welfare agencies under which such agencies agree:
    (1) To target public assistance, benefits and services to families 
receiving assistance in the public housing program and the Section 8 
tenant-based

[[Page 101]]

assistance program to achieve self-sufficiency;
    (2) To provide written verification to the PHA concerning welfare 
benefits for families applying for or receiving assistance in these 
housing assistance programs.

[65 FR 16717, Mar. 29, 2000]



Sec.  5.615  Public housing program and Section 8 tenant-based assistance
program: How welfare benefit reduction affects family income.

    (a) Applicability. This section applies to covered families who 
reside in public housing (part 960 of this title) or receive Section 8 
tenant-based assistance (part 982 of this title).
    (b) Definitions. The following definitions apply for purposes of 
this section:
    Covered families. Families who receive welfare assistance or other 
public assistance benefits (``welfare benefits'') from a State or other 
public agency (``welfare agency'') under a program for which Federal, 
State, or local law requires that a member of the family must 
participate in an economic self-sufficiency program as a condition for 
such assistance.
    Economic self-sufficiency program. See definition at Sec.  5.603.
    Imputed welfare income. The amount of annual income not actually 
received by a family, as a result of a specified welfare benefit 
reduction, that is nonetheless included in the family's annual income 
for purposes of determining rent.
    Specified welfare benefit reduction.
    (1) A reduction of welfare benefits by the welfare agency, in whole 
or in part, for a family member, as determined by the welfare agency, 
because of fraud by a family member in connection with the welfare 
program; or because of welfare agency sanction against a family member 
for noncompliance with a welfare agency requirement to participate in an 
economic self-sufficiency program.
    (2) ``Specified welfare benefit reduction'' does not include a 
reduction or termination of welfare benefits by the welfare agency:
    (i) at expiration of a lifetime or other time limit on the payment 
of welfare benefits;
    (ii) because a family member is not able to obtain employment, even 
though the family member has complied with welfare agency economic self-
sufficiency or work activities requirements; or
    (iii) because a family member has not complied with other welfare 
agency requirements.
    (c) Imputed welfare income. (1) A family's annual income includes 
the amount of imputed welfare income (because of a specified welfare 
benefits reduction, as specified in notice to the PHA by the welfare 
agency), plus the total amount of other annual income as determined in 
accordance with Sec.  5.609.
    (2) At the request of the PHA, the welfare agency will inform the 
PHA in writing of the amount and term of any specified welfare benefit 
reduction for a family member, and the reason for such reduction, and 
will also inform the PHA of any subsequent changes in the term or amount 
of such specified welfare benefit reduction. The PHA will use this 
information to determine the amount of imputed welfare income for a 
family.
    (3) A family's annual income includes imputed welfare income in 
family annual income, as determined at the PHA's interim or regular 
reexamination of family income and composition, during the term of the 
welfare benefits reduction (as specified in information provided to the 
PHA by the welfare agency).
    (4) The amount of the imputed welfare income is offset by the amount 
of additional income a family receives that commences after the time the 
sanction was imposed. When such additional income from other sources is 
at least equal to the imputed welfare income, the imputed welfare income 
is reduced to zero.
    (5) The PHA may not include imputed welfare income in annual income 
if the family was not an assisted resident at the time of sanction.
    (d) Review of PHA decision--(1) Public housing. If a public housing 
tenant claims that the PHA has not correctly calculated the amount of 
imputed welfare income in accordance with HUD requirements, and if the 
PHA denies the family's request to modify such

[[Page 102]]

amount, the PHA shall give the tenant written notice of such denial, 
with a brief explanation of the basis for the PHA determination of the 
amount of imputed welfare income. The PHA notice shall also state that 
if the tenant does not agree with the PHA determination, the tenant may 
request a grievance hearing in accordance with part 966, subpart B of 
this title to review the PHA determination. The tenant is not required 
to pay an escrow deposit pursuant to Sec.  966.55(e) for the portion of 
tenant rent attributable to the imputed welfare income in order to 
obtain a grievance hearing on the PHA determination.
    (2) Section 8 participant. A participant in the Section 8 tenant-
based assistance program may request an informal hearing, in accordance 
with Sec.  982.555 of this title, to review the PHA determination of the 
amount of imputed welfare income that must be included in the family's 
annual income in accordance with this section. If the family claims that 
such amount is not correctly calculated in accordance with HUD 
requirements, and if the PHA denies the family's request to modify such 
amount, the PHA shall give the family written notice of such denial, 
with a brief explanation of the basis for the PHA determination of the 
amount of imputed welfare income. Such notice shall also state that if 
the family does not agree with the PHA determination, the family may 
request an informal hearing on the determination under the PHA hearing 
procedure.
    (e) PHA relation with welfare agency. (1) The PHA must ask welfare 
agencies to inform the PHA of any specified welfare benefits reduction 
for a family member, the reason for such reduction, the term of any such 
reduction, and any subsequent welfare agency determination affecting the 
amount or term of a specified welfare benefits reduction. If the welfare 
agency determines a specified welfare benefits reduction for a family 
member, and gives the PHA written notice of such reduction, the family's 
annual incomes shall include the imputed welfare income because of the 
specified welfare benefits reduction.
    (2) The PHA is responsible for determining the amount of imputed 
welfare income that is included in the family's annual income as a 
result of a specified welfare benefits reduction as determined by the 
welfare agency, and specified in the notice by the welfare agency to the 
PHA. However, the PHA is not responsible for determining whether a 
reduction of welfare benefits by the welfare agency was correctly 
determined by the welfare agency in accordance with welfare program 
requirements and procedures, nor for providing the opportunity for 
review or hearing on such welfare agency determinations.
    (3) Such welfare agency determinations are the responsibility of the 
welfare agency, and the family may seek appeal of such determinations 
through the welfare agency's normal due process procedures. The PHA 
shall be entitled to rely on the welfare agency notice to the PHA of the 
welfare agency's determination of a specified welfare benefits 
reduction.

[65 FR 16717, Mar. 29, 2000]



Sec.  5.617  Self-sufficiency incentives for persons with disabilities
--Disallowance of increase in annual income.

    (a) Applicable programs. The disallowance of earned income provided 
by this section is applicable only to the following programs: HOME 
Investment Partnerships Program (24 CFR part 92); Housing Opportunities 
for Persons with AIDS (24 CFR part 574); Supportive Housing Program (24 
CFR part 583); and the Housing Choice Voucher Program (24 CFR part 982).
    (b) Definitions. The following definitions apply for purposes of 
this section.
    Baseline income. The annual income immediately prior to 
implementation of the disallowance described in paragraph (c)(1) of this 
section of a person with disabilities (who is a member of a qualified 
family).
    Disallowance. Exclusion from annual income.
    Previously unemployed includes a person with disabilities who has 
earned, in the twelve months previous to employment, no more than would 
be received for 10 hours of work per week for 50 weeks at the 
established minimum wage.

[[Page 103]]

    Qualified family. A family residing in housing assisted under one of 
the programs listed in paragraph (a) of this section or receiving 
tenant-based rental assistance under one of the programs listed in 
paragraph (a) of this section.
    (1) Whose annual income increases as a result of employment of a 
family member who is a person with disabilities and who was previously 
unemployed for one or more years prior to employment;
    (2) Whose annual income increases as a result of increased earnings 
by a family member who is a person with disabilities during 
participation in any economic self-sufficiency or other job training 
program; or
    (3) Whose annual income increases, as a result of new employment or 
increased earnings of a family member who is a person with disabilities, 
during or within six months after receiving assistance, benefits or 
services under any state program for temporary assistance for needy 
families funded under Part A of Title IV of the Social Security Act, as 
determined by the responsible entity in consultation with the local 
agencies administering temporary assistance for needy families (TANF) 
and Welfare-to-Work (WTW) programs. The TANF program is not limited to 
monthly income maintenance, but also includes such benefits and services 
as one-time payments, wage subsidies and transportation assistance--
provided that the total amount over a six-month period is at least $500.
    (c) Disallowance of increase in annual income--(1) Initial 12-month 
exclusion. During the 12-month period beginning on the date a member who 
is a person with disabilities of a qualified family is first employed or 
the family first experiences an increase in annual income attributable 
to employment, the responsible entity must exclude from annual income 
(as defined in the regulations governing the applicable program listed 
in paragraph (a) of this section) of a qualified family any increase in 
income of the family member who is a person with disabilities as a 
result of employment over prior income of that family member.
    (2) Second 12-month exclusion and phase-in. Upon the expiration of 
the 12-month period defined in paragraph (c)(1) of this section and for 
the subsequent 12-month period, the responsible entity must exclude from 
annual income of a qualified family at least 50 percent of any increase 
in income of such family member as a result of employment over the 
family member's baseline income.
    (3) Maximum 2-year disallowance. The disallowance of increased 
income of an individual family member who is a person with disabilities 
as provided in paragraph (c)(1) or (c)(2) of this section is limited to 
a lifetime 24-month period. The disallowance applies for a maximum of 12 
months for disallowance under paragraph (c)(1) of this section and a 
maximum of 12 months for disallowance under paragraph (c)(2) of this 
section, during the 24- month period starting from the initial exclusion 
under paragraph (c)(1) of this section.
    (4) Effect of changes on currently participating families. Families 
eligible for and participating in the disallowance of earned income 
under this section prior to May 9, 2016 will continue to be governed by 
this section in effect as it existed immediately prior to that date (see 
24 CFR parts 0 to 199, revised as of April 1, 2016).
    (d) Inapplicability to admission. The disallowance of increases in 
income as a result of employment of persons with disabilities under this 
section does not apply for purposes of admission to the program 
(including the determination of income eligibility or any income 
targeting that may be applicable).

[66 FR 6223, Jan. 19, 2001, as amended at 67 FR 6820, Feb. 13, 2002; 81 
FR 12370, Mar. 8, 2016]

                             Family Payment



Sec.  5.628  Total tenant payment.

    (a) Determining total tenant payment (TTP). Total tenant payment is 
the highest of the following amounts, rounded to the nearest dollar:
    (1) 30 percent of the family's monthly adjusted income;
    (2) 10 percent of the family's monthly income;
    (3) If the family is receiving payments for welfare assistance from 
a public agency and a part of those payments, adjusted in accordance 
with the

[[Page 104]]

family's actual housing costs, is specifically designated by such agency 
to meet the family's housing costs, the portion of those payments which 
is so designated; or
    (4) The minimum rent, as determined in accordance with Sec.  5.630.
    (b) Determining TTP if family's welfare assistance is ratably 
reduced. If the family's welfare assistance is ratably reduced from the 
standard of need by applying a percentage, the amount calculated under 
paragraph (a)(3) of this section is the amount resulting from one 
application of the percentage.

[65 FR 16718, Mar. 29, 2000]



Sec.  5.630  Minimum rent.

    (a) Minimum rent. (1) The PHA must charge a family no less than a 
minimum monthly rent established by the responsible entity, except as 
described in paragraph (b) of this section.
    (2) For the public housing program and the section 8 moderate 
rehabilitation, and certificate or voucher programs, the PHA may 
establish a minimum rent of up to $50.
    (3) For other section 8 programs, the minimum rent is $25.
    (b) Financial hardship exemption from minimum rent--(1) When is 
family exempt from minimum rent? The responsible entity must grant an 
exemption from payment of minimum rent if the family is unable to pay 
the minimum rent because of financial hardship, as described in the 
responsible entity's written policies. Financial hardship includes these 
situations:
    (i) When the family has lost eligibility for or is awaiting an 
eligibility determination for a Federal, State, or local assistance 
program, including a family that includes a member who is a noncitizen 
lawfully admitted for permanent residence under the Immigration and 
Nationality Act who would be entitled to public benefits but for title 
IV of the Personal Responsibility and Work Opportunity Act of 1996;
    (ii) When the family would be evicted because it is unable to pay 
the minimum rent;
    (iii) When the income of the family has decreased because of changed 
circumstances, including loss of employment;
    (iv) When a death has occurred in the family; and
    (v) Other circumstances determined by the responsible entity or HUD.
    (2) What happens if family requests a hardship exemption? (i) Public 
housing. (A) If a family requests a financial hardship exemption, the 
PHA must suspend the minimum rent requirement beginning the month 
following the family's request for a hardship exemption, and continuing 
until the PHA determines whether there is a qualifying financial 
hardship and whether it is temporary or long term.
    (B) The PHA must promptly determine whether a qualifying hardship 
exists and whether it is temporary or long term.
    (C) The PHA may not evict the family for nonpayment of minimum rent 
during the 90-day period beginning the month following the family's 
request for a hardship exemption.
    (D) If the PHA determines that a qualifying financial hardship is 
temporary, the PHA must reinstate the minimum rent from the beginning of 
the suspension of the minimum rent. The PHA must offer the family a 
reasonable repayment agreement, on terms and conditions established by 
the PHA, for the amount of back minimum rent owed by the family.
    (ii) All section 8 programs. (A) If a family requests a financial 
hardship exemption, the responsible entity must suspend the minimum rent 
requirement beginning the month following the family's request for a 
hardship exemption until the responsible entity determines whether there 
is a qualifying financial hardship, and whether such hardship is 
temporary or long term.
    (B) The responsible entity must promptly determine whether a 
qualifying hardship exists and whether it is temporary or long term.
    (C) If the responsible entity determines that a qualifying financial 
hardship is temporary, the PHA must not impose the minimum rent during 
the 90-day period beginning the month following the date of the family's 
request for a hardship exemption. At the end of the 90-day suspension 
period, the responsible entity must reinstate the minimum rent from the 
beginning of

[[Page 105]]

the suspension. The family must be offered a reasonable repayment 
agreement, on terms and conditions established by the responsible 
entity, for the amount of back rent owed by the family.
    (iii) All programs. (A) If the responsible entity determines there 
is no qualifying financial hardship exemption, the responsible entity 
must reinstate the minimum rent, including back rent owed from the 
beginning of the suspension. The family must pay the back rent on terms 
and conditions established by the responsible entity.
    (B) If the responsible entity determines a qualifying financial 
hardship is long term, the responsible entity must exempt the family 
from the minimum rent requirements so long as such hardship continues. 
Such exemption shall apply from the beginning of the month following the 
family's request for a hardship exemption until the end of the 
qualifying financial hardship.
    (C) The financial hardship exemption only applies to payment of the 
minimum rent (as determined pursuant to Sec.  5.628(a)(4) and Sec.  
5.630), and not to the other elements used to calculate the total tenant 
payment (as determined pursuant to Sec.  5.628(a)(1), (a)(2) and 
(a)(3)).
    (3) Public housing: Grievance hearing concerning PHA denial of 
request for hardship exemption. If a public housing family requests a 
hearing under the PHA grievance procedure, to review the PHA's 
determination denying or limiting the family's claim to a financial 
hardship exemption, the family is not required to pay any escrow deposit 
in order to obtain a grievance hearing on such issues.

[65 FR 16718, Mar. 29, 2000]



Sec.  5.632  Utility reimbursements.

    (a) Applicability. This section is applicable to:
    (1) The Section 8 programs other than the Section 8 voucher program 
(for distribution of a voucher housing assistance payment that exceeds 
rent to owner, see Sec.  982.514(b) of this title);
    (2) A public housing family paying an income-based rent (see Sec.  
960.253 of this title). (Utility reimbursement is not paid for a public 
housing family that is paying a flat rent.)
    (b) Payment of utility reimbursement. (1) The responsible entity 
pays a utility reimbursement if the utility allowance (for tenant-paid 
utilities) exceeds the amount of the total tenant payment.
    (2) In the public housing program (where the family is paying an 
income-based rent), the Section 8 moderate rehabilitation program and 
the Section 8 certificate or voucher program, the PHA may pay the 
utility reimbursement either to the family or directly to the utility 
supplier to pay the utility bill on behalf of the family. If the PHA 
elects to pay the utility supplier, the PHA must notify the family of 
the amount paid to the utility supplier.
    (3) In the other Section 8 programs, the owner must pay the utility 
reimbursement either:
    (i) To the family, or
    (ii) With consent of the family, to the utility supplier to pay the 
utility bill on behalf of the family.

[65 FR 16719, Mar. 29, 2000]



Sec.  5.634  Tenant rent.

    (a) Section 8 programs. For Section 8 programs other than the 
Section 8 voucher program, tenant rent is total tenant payment minus any 
utility allowance.
    (b) Public housing. See Sec.  960.253 of this title for the 
determination of tenant rent.

[65 FR 16719, Mar. 29, 2000]

       Section 8 Project-Based Assistance: Occupancy Requirements



Sec.  5.653  Section 8 project-based assistance programs: Admission
--Income-eligibility and income-targeting.

    (a) Applicability. This section describes requirements concerning 
income-eligibility and income-targeting that apply to the Section 8 
project-based assistance programs, except for the moderate 
rehabilitation and the project-based certificate or voucher programs.
    (b) Who is eligible?--(1) Basic eligibility. An applicant must meet 
all eligibility requirements in order to receive housing assistance. At 
a minimum, the applicant must be a family, as defined in

[[Page 106]]

Sec.  5.403, and must be income-eligible, as described in this section. 
Such eligible applicants include single persons.
    (2) Low income limit. No family other than a low income family is 
eligible for admission to the Section 8 project-based assistance 
programs. (This paragraph (b) does not apply to the Section 8 project-
based voucher program under part 983 of this title.)
    (c) Targeting to extremely low income families. For each project 
assisted under a contract for project-based assistance, of the dwelling 
units that become available for occupancy in any fiscal year that are 
assisted under the contract, not less than 40 percent shall be available 
for leasing only by families that are extremely low income families at 
the time of admission.
    (d) Limitation on admission of non-very low income families--(1) 
Admission to units available before October 1, 1981. Not more than 25 
percent of the Section 8 project-based dwelling units that were 
available for occupancy under Section 8 Housing Assistance Payments 
Contracts effective before October 1, 1981 and that are leased on or 
after that date shall be available for leasing by low income families 
other than very low income families. HUD reserves the right to limit the 
admission of low income families other than very low income families to 
these units.
    (2) Admission to units available on or after October 1, 1981. Not 
more than 15 percent of the Section 8 project-based dwelling units that 
initially become available for occupancy under Section 8 Housing 
Assistance Payments (HAP) Contracts on or after October 1, 1981 shall be 
available for leasing by low income families other than families that 
are very low income families at the time of admission to the Section 8 
program. Except with the prior approval of HUD under paragraphs (d)(3) 
and (d)(4) of this section, the owner may only lease such units to very 
low income families.
    (3) Request for exception. A request by an owner for approval of 
admission of low income families other than very low income families to 
section 8 project-based units must state the basis for requesting the 
exception and provide supporting data. Bases for exceptions that may be 
considered include the following:
    (i) Need for admission of a broader range of tenants to preserve the 
financial or management viability of a project because there is an 
insufficient number of potential applicants who are very low income 
families;
    (ii) Commitment of an owner to attaining occupancy by families with 
a broad range of incomes;
    (iii) Project supervision by a State Housing Finance Agency having a 
policy of occupancy by families with a broad range of incomes supported 
by evidence that the Agency is pursuing this goal throughout its 
assisted projects in the community, or a project with financing through 
Section 11(b) of the 1937 Act (42 U.S.C. 1437i) or under Section 103 of 
the Internal Revenue Code (26 U.S.C. 103); and
    (iv) Low-income families that otherwise would be displaced from a 
Section 8 project.
    (4) Action on request for exception. Whether to grant any request 
for exception is a matter committed by law to HUD's discretion, and no 
implication is intended to be created that HUD will seek to grant 
approvals up to the maximum limits permitted by statute, nor is any 
presumption of an entitlement to an exception created by the 
specification of certain grounds for exception that HUD may consider. 
HUD will review exceptions granted to owners at regular intervals. HUD 
may withdraw permission to exercise those exceptions for program 
applicants at any time that exceptions are not being used or after a 
periodic review, based on the findings of the review.
    (e) Income used for eligibility and targeting. Family annual income 
(see Sec.  5.609) is used both for determination of income-eligibility 
and for income-targeting under this section.
    (f) Reporting. The Section 8 owner must comply with HUD-prescribed 
reporting requirements, including income reporting requirements that 
will permit HUD to maintain the data necessary to monitor compliance 
with income-eligibility and income-targeting requirements.

[65 FR 16719, Mar. 29, 2000]

[[Page 107]]



Sec.  5.655  Section 8 project-based assistance programs: Owner 
preferences in selection for a project or unit.

    (a) Applicability. This section applies to the section 8 project-
based assistance programs. The section describes requirements concerning 
the Section 8 owner's selection of residents to occupy a project or 
unit, except for the moderate rehabilitation and the project-based 
certificate or voucher programs.
    (b) Selection--(1) Selection for owner's project or unit. Selection 
for occupancy of a project or unit is the function of the Section 8 
owner. However, selection is subject to the income-eligibility and 
income-targeting requirements in Sec.  5.653.
    (2) Tenant selection plan. The owner must adopt a written tenant 
selection plan in accordance with HUD requirements.
    (3) Amount of income. The owner may not select a family for 
occupancy of a project or unit in an order different from the order on 
the owner's waiting list for the purpose of selecting a relatively 
higher income family. However, an owner may select a family for 
occupancy of a project or unit based on its income in order to satisfy 
the targeting requirements of Sec.  5.653(c).
    (4) Selection for particular unit. In selecting a family to occupy a 
particular unit, the owner may match family characteristics with the 
type of unit available, for example, number of bedrooms. If a unit has 
special accessibility features for persons with disabilities, the owner 
must first offer the unit to families which include persons with 
disabilities who require such features (see Sec. Sec.  8.27 and 100.202 
of this title).
    (5) Housing assistance limitation for single persons. A single 
person who is not an elderly or displaced person, a person with 
disabilities, or the remaining member of a resident family may not be 
provided a housing unit with two or more bedrooms.
    (c) Particular owner preferences. The owner must inform all 
applicants about available preferences and must give applicants an 
opportunity to show that they qualify for available preferences.
    (1) Residency requirements or preferences. (i) Residency 
requirements are prohibited. Although the owner is not prohibited from 
adopting a residency preference, the owner may only adopt or implement 
residency preferences in accordance with non-discrimination and equal 
opportunity requirements listed at Sec.  5.105(a).
    (ii) A residency preference is a preference for admission of persons 
who reside in a specified geographic area (``residency preference 
area'').
    (iii) An owner's residency preference must be approved by HUD in one 
of the following methods:
    (A) Prior approval of the housing market area in the Affirmative 
Fair Housing Marketing plan (in accordance with Sec.  108.25 of this 
title) as a residency preference area;
    (B) Prior approval of the residency preference area in the PHA plan 
of the jurisdiction in which the project is located;
    (C) Modification of the Affirmative Fair Housing Marketing Plan, in 
accordance with Sec.  108.25 of this title,
    (iv) Use of a residency preference may not have the purpose or 
effect of delaying or otherwise denying admission to a project or unit 
based on the race, color, ethnic origin, gender, religion, disability, 
or age of any member of an applicant family.
    (v) A residency preference must not be based on how long an 
applicant has resided or worked in a residency preference area.
    (vi) Applicants who are working or who have been notified that they 
are hired to work in a residency preference area must be treated as 
residents of the residency preference area. The owner may treat 
graduates of, or active participants in, education and training programs 
in a residency preference area as residents of the residency preference 
area if the education or training program is designed to prepare 
individuals for the job market.
    (2) Preference for working families. (i) The owner may adopt a 
preference for admission of working families (families where the head, 
spouse or sole member is employed). However, an applicant shall be given 
the benefit of the working family preference if the head and spouse, or 
sole member, is age 62 or older, or is a person with disabilities.

[[Page 108]]

    (ii) If the owner adopts a preference for admission of working 
families, the owner must not give a preference based on the amount of 
earned income.
    (3) Preference for person with disabilities. The owner may adopt a 
preference for admission of families that include a person with 
disabilities. However, the owner may not adopt a preference for 
admission of persons with a specific disability.
    (4) Preference for victims of domestic violence. The owner should 
consider whether to adopt a preference for admission of families that 
include victims of domestic violence.
    (5) Preference for single persons who are elderly, displaced, 
homeless or persons with disabilities over other single persons. The 
owner may adopt a preference for admission of single persons who are age 
62 or older, displaced, homeless, or persons with disabilities over 
other single persons.

[65 FR 16720, Mar. 29, 2000]



Sec.  5.657  Section 8 project-based assistance programs: Reexamination
of family income and composition.

    (a) Applicability. This section states requirements for 
reexamination of family income and composition in the Section 8 project-
based assistance programs, except for the moderate rehabilitation and 
the project-based certificate or voucher programs.
    (b) Regular reexamination. The owner must conduct a reexamination 
and redetermination of family income and composition at least annually.
    (c) Interim reexaminations. A family may request an interim 
reexamination of family income because of any changes since the last 
examination. The owner must make the interim reexamination within a 
reasonable time after the family request. The owner may adopt policies 
prescribing when and under what conditions the family must report a 
change in family income or composition.
    (d) Streamlined income determination. For any family member with a 
fixed source of income, an owner may elect to determine that family 
member's income, as required by paragraph (b) of this section, by means 
of a streamlined income determination. A streamlined income 
determination must be conducted by applying, for each fixed-income 
source, the verified cost of living adjustment (COLA) or current rate of 
interest to the previously verified or adjusted income amount.
    (1) ``Family member with a fixed source of income'' is defined as a 
family member whose income includes periodic payments at reasonably 
predictable levels from one or more of the following sources:
    (i) Social Security, Supplemental Security Income, Supplemental 
Disability Insurance;
    (ii) Federal, state, local, or private pension plans;
    (iii) Annuities or other retirement benefit programs, insurance 
policies, disability or death benefits, or other similar types of 
periodic receipts; or
    (iv) Any other source of income subject to adjustment by a 
verifiable COLA or current rate of interest.
    (2) An owner must use a COLA or current rate of interest specific to 
the fixed source of income in order to adjust the income amount. The 
owner must verify the appropriate COLA or current rate of interest from 
a public source or through tenant-provided, third party-generated 
documentation. If no such verification is available, then the owner must 
obtain third-party verification of income amounts in order to calculate 
the change in income for the source.
    (3) For any family member whose income is determined pursuant to a 
streamlined income determination, an owner must obtain third-party 
verification of all fixed-income amounts every 3 years. Other income for 
each family member must be determined pursuant to paragraph (b) of this 
section.

[65 FR 16720, Mar. 29, 2000, as amended at 81 FR 12371, Mar. 8, 2016]



Sec.  5.659  Family information and verification.

    (a) Applicability. This section states requirements for 
reexamination of family income and composition in the Section 8 project-
based assistance programs, except for the moderate rehabilitation 
program and the project-based certificate or voucher programs.

[[Page 109]]

    (b) Family obligation to supply information. (1) The family must 
supply any information that HUD or the owner determines is necessary in 
administration of the Section 8 program, including submission of 
required evidence of citizenship or eligible immigration status (as 
provided by part 5, subpart E of this title). ``Information'' includes 
any requested certification, release or other documentation.
    (2) The family must supply any information requested by the owner or 
HUD for use in a regularly scheduled reexamination or an interim 
reexamination of family income and composition in accordance with HUD 
requirements.
    (3) For requirements concerning the following, see part 5, subpart B 
of this title:
    (i) Family verification and disclosure of social security numbers;
    (ii) Family execution and submission of consent forms for obtaining 
wage and claim information from State Wage Information Collection 
Agencies (SWICAs).
    (4) Any information supplied by the family must be true and 
complete.
    (c) Family release and consent. (1) As a condition of admission to 
or continued occupancy of a unit with Section 8 assistance, the owner 
must require the family head, and such other family members as the owner 
designates, to execute a HUD-approved release and consent form 
(including any release and consent as required under Sec.  5.230 of this 
title) authorizing any depository or private source of income, or any 
Federal, State or local agency, to furnish or release to the owner or 
HUD such information as the owner or HUD determines to be necessary.
    (2) The use or disclosure of information obtained from a family or 
from another source pursuant to this release and consent shall be 
limited to purposes directly connected with administration of the 
Section 8 program.
    (d) Owner responsibility for verification. The owner must obtain and 
document in the family file third party verification of the following 
factors, or must document in the file why third party verification was 
not available:
    (1) Reported family annual income;
    (2) The value of assets;
    (3) Expenses related to deductions from annual income; and
    (4) Other factors that affect the determination of adjusted income.

[65 FR 16721, Mar. 29, 2000]



Sec.  5.661  Section 8 project-based assistance programs: Approval
for police or other security personnel to live in project.

    (a) Applicability. This section describes when a Section 8 owner may 
lease a Section 8 unit to police or other security personnel with 
continued Section 8 assistance for the unit. This section applies to the 
Section 8 project-based assistance programs.
    (b) Terms. (1) Security personnel means:
    (i) A police officer, or
    (ii) A qualified security professional, with adequate training and 
experience to provide security services for project residents.
    (2) Police officer means a person employed on a full-time basis as a 
duly licensed professional police officer by a Federal, State or local 
government or by any agency of these governments.
    (3) Security includes the protection of project residents, including 
resident project management from criminal or other activity that is a 
threat to person or property, or that arouses fears of such threat.
    (c) Owner application. (1) The owner may submit a written 
application to the contract administrator (PHA or HUD) for approval to 
lease an available unit in a Section 8 project to security personnel who 
would not otherwise be eligible for Section 8 assistance, for the 
purpose of increasing security for Section 8 families residing in the 
project.
    (2) The owner's application must include the following information:
    (i) A description of criminal activities in the project and the 
surrounding community, and the effect of criminal activity on the 
security of project residents.
    (ii) Qualifications of security personnel who will reside in the 
project, and the period of residence by such personnel. How owner 
proposes to check backgrounds and qualifications of any security 
personnel who will reside in the project.

[[Page 110]]

    (iii) Full disclosure of any family relationship between the owner 
and any security personnel. For this purpose, ``owner'' includes a 
principal or other interested party.
    (iv) How residence by security personnel in a project unit will 
increase security for Section 8 assisted families residing in the 
project.
    (v) The amount payable monthly as rent to the unit owner by security 
personnel residing in the project (including a description of how this 
amount is determined), and the amount of any other compensation by the 
owner to such resident security personnel.
    (vi) The terms of occupancy by such security personnel. The lease by 
owner to the approved security personnel may provide that occupancy of 
the unit is authorized only while the security personnel is 
satisfactorily performing any agreed responsibilities and functions for 
project security.
    (vii) Other information as requested by the contract administrator.
    (d) Action by contract administrator. (1) The contract administrator 
shall have discretion to approve or disapprove owner's application, and 
to impose conditions for approval of occupancy by security personnel in 
a section 8 project unit.
    (2) Notice of approval by the contract administrator shall specify 
the term of such approved occupancy. Such approval may be withdrawn at 
the discretion of the contract administrator, for example, if the 
contract administrator determines that such occupancy is not providing 
adequate security benefits as proposed in the owner's application; or 
that security benefits from such occupancy are not a sufficient return 
for program costs.
    (e) Housing assistance payment and rent. (1) During approved 
occupancy by security personnel as provided in this section, the amount 
of the monthly housing assistance payment to the owner shall be equal to 
the contract rent (as determined in accordance with the HAP contract and 
HUD requirements) minus the amount (as approved by the contract 
administrator) of rent payable monthly as rent to the unit owner by such 
security personnel. The owner shall bear the risk of collecting such 
rent from such security personnel, and the amount of the housing 
assistance payment shall not be increased because of non-payment by such 
security personnel. The owner shall not be entitled to receive any 
vacancy payment for the period following occupancy by such security 
personnel.
    (2) In approving the amount of monthly rent payable by security 
personnel for occupancy of a contract unit, the contract administrator 
may consider whether security services to be performed are an adequate 
return for housing assistance payments on the unit, or whether the cost 
of security services should be borne by the owner from other project 
income.

[65 FR 16721, Mar. 29, 2000]

    Effective Date Note: At 65 FR 16721, Mar. 29, 2000, Sec.  5.661 was 
added. This section contains information collection and recordkeeping 
requirements and will not become effective until approval has been given 
by the Office of Management and Budget.



   Subpart G_Physical Condition Standards and Inspection Requirements

    Source: 63 FR 46577, Sept. 1, 1998, unless otherwise noted.



Sec.  5.701  Applicability.

    (a) This subpart applies to housing assisted under the HUD programs 
listed in 24 CFR 200.853(a).
    (b) This subpart applies to housing with mortgages insured or held 
by HUD, or housing that is receiving assistance from HUD, under the 
programs listed in 24 CFR 200.853(b).
    (c) This subpart also applies to Public Housing (housing receiving 
assistance under the U.S. Housing Act of 1937, other than under section 
8 of the Act).
    (d) For purposes of this subpart, the term ``HUD housing'' means the 
types of housing listed in paragraphs (a), (b), and (c) of this section.

[63 FR 46577, Sept. 1, 1998, as amended at 65 FR 77240, Dec. 8, 2000]

[[Page 111]]



Sec.  5.703  Physical condition standards for HUD housing that is decent,
safe, sanitary and in good repair (DSS/GR).

    HUD housing must be decent, safe, sanitary and in good repair. 
Owners of housing described in Sec.  5.701(a), mortgagors of housing 
described in Sec.  5.701(b), and PHAs and other entities approved by HUD 
owning housing described in Sec.  5.701(c), must maintain such housing 
in a manner that meets the physical condition standards set forth in 
this section in order to be considered decent, safe, sanitary and in 
good repair. These standards address the major areas of the HUD housing: 
the site; the building exterior; the building systems; the dwelling 
units; the common areas; and health and safety considerations.
    (a) Site. The site components, such as fencing and retaining walls, 
grounds, lighting, mailboxes/project signs, parking lots/driveways, play 
areas and equipment, refuse disposal, roads, storm drainage and walkways 
must be free of health and safety hazards and be in good repair. The 
site must not be subject to material adverse conditions, such as 
abandoned vehicles, dangerous walks or steps, poor drainage, septic tank 
back-ups, sewer hazards, excess accumulations of trash, vermin or rodent 
infestation or fire hazards.
    (b) Building exterior. Each building on the site must be 
structurally sound, secure, habitable, and in good repair. Each 
building's doors, fire escapes, foundations, lighting, roofs, walls, and 
windows, where applicable, must be free of health and safety hazards, 
operable, and in good repair.
    (c) Building systems. Each building's domestic water, electrical 
system, elevators, emergency power, fire protection, HVAC, and sanitary 
system must be free of health and safety hazards, functionally adequate, 
operable, and in good repair.
    (d) Dwelling units. (1) Each dwelling unit within a building must be 
structurally sound, habitable, and in good repair. All areas and aspects 
of the dwelling unit (for example, the unit's bathroom, call-for-aid (if 
applicable), ceiling, doors, electrical systems, floors, hot water 
heater, HVAC (where individual units are provided), kitchen, lighting, 
outlets/switches, patio/porch/balcony, smoke detectors, stairs, walls, 
and windows) must be free of health and safety hazards, functionally 
adequate, operable, and in good repair.
    (2) Where applicable, the dwelling unit must have hot and cold 
running water, including an adequate source of potable water (note for 
example that single room occupancy units need not contain water 
facilities).
    (3) If the dwelling unit includes its own sanitary facility, it must 
be in proper operating condition, usable in privacy, and adequate for 
personal hygiene and the disposal of human waste.
    (4) The dwelling unit must include at least one battery-operated or 
hard-wired smoke detector, in proper working condition, on each level of 
the unit.
    (e) Common areas. The common areas must be structurally sound, 
secure, and functionally adequate for the purposes intended. The 
basement/garage/carport, restrooms, closets, utility, mechanical, 
community rooms, day care, halls/corridors, stairs, kitchens, laundry 
rooms, office, porch, patio, balcony, and trash collection areas, if 
applicable, must be free of health and safety hazards, operable, and in 
good repair. All common area ceilings, doors, floors, HVAC, lighting, 
outlets/switches, smoke detectors, stairs, walls, and windows, to the 
extent applicable, must be free of health and safety hazards, operable, 
and in good repair. These standards for common areas apply, to a varying 
extent, to all HUD housing, but will be particularly relevant to 
congregate housing, independent group homes/residences, and single room 
occupancy units, in which the individual dwelling units (sleeping areas) 
do not contain kitchen and/or bathroom facilities.
    (f) Health and safety concerns. All areas and components of the 
housing must be free of health and safety hazards. These areas include, 
but are not limited to, air quality, electrical hazards, elevators, 
emergency/fire exits, flammable materials, garbage and debris, handrail 
hazards, infestation, and lead-based paint. For example, the buildings 
must have fire exits that are not blocked and have hand rails that are 
undamaged and have no other observable deficiencies. The housing must 
have no evidence of infestation by rats, mice, or other vermin, or of

[[Page 112]]

garbage and debris. The housing must have no evidence of electrical 
hazards, natural hazards, or fire hazards. The dwelling units and common 
areas must have proper ventilation and be free of mold, odor (e.g., 
propane, natural gas, methane gas), or other observable deficiencies. 
The housing must comply with all requirements related to the evaluation 
and reduction of lead-based paint hazards and have available proper 
certifications of such (see 24 CFR part 35).
    (g) Compliance with State and local codes. The physical condition 
standards in this section do not supersede or preempt State and local 
codes for building and maintenance with which HUD housing must comply. 
HUD housing must continue to adhere to these codes.



Sec.  5.705  Uniform physical inspection requirements.

    Any entity responsible for conducting a physical inspection of HUD 
housing, to determine compliance with this subpart, must inspect such 
HUD housing annually in accordance with HUD-prescribed physical 
inspection procedures. The inspection must be conducted annually unless 
the program regulations governing the housing provide otherwise or 
unless HUD has provided otherwise by notice.

[65 FR 77240, Dec. 8, 2000]



             Subpart H_Uniform Financial Reporting Standards



Sec.  5.801  Uniform financial reporting standards.

    (a) Applicability. This subpart H implements uniform financial 
reporting standards for:
    (1) Public housing agencies (PHAs) receiving assistance under 
sections 5, 9, or 14 of the 1937 Act (42 U.S.C. 1437c, 1437g, and 1437l) 
(Public Housing);
    (2) PHAs as contract administrators for any Section 8 project-based 
or tenant-based housing assistance payments program, which includes 
assistance under the following programs:
    (i) Section 8 project-based housing assistance payments programs, 
including, but not limited to, the Section 8 New Construction, 
Substantial Rehabilitation, Loan Management Set-Aside, Property 
Disposition, and Moderate Rehabilitation (including the Single Room 
Occupancy program for homeless individuals);
    (ii) Section 8 Project-Based Certificate programs;
    (iii) Any program providing Section 8 project-based renewal 
contracts; and
    (iv) Section 8 tenant-based assistance under the Section 8 
Certificate and Voucher program.
    (3) Owners of housing assisted under any Section 8 project-based 
housing assistance payments program:
    (i) Including, but not limited to, the Section 8 New Construction, 
Substantial Rehabilitation, Loan Management Set-Aside, and Property 
Disposition programs;
    (ii) Excluding the Section 8 Moderate Rehabilitation Program (which 
includes the Single Room Occupancy program for homeless individuals) and 
the Section 8 Project-Based Certificate Program;
    (4) Owners of multifamily projects receiving direct or indirect 
assistance from HUD, or with mortgages insured, coinsured, or held by 
HUD, including but not limited to housing under the following HUD 
programs:
    (i) Section 202 Program of Supportive Housing for the Elderly;
    (ii) Section 811 Program of Supportive Housing for Persons with 
Disabilities;
    (iii) Section 202 loan program for projects for the elderly and 
handicapped (including 202/8 projects and 202/162 projects);
    (iv) Section 207 of the National Housing Act (NHA) (12 U.S.C. 1701 
et seq.) (Rental Housing Insurance);
    (v) Section 213 of the NHA (Cooperative Housing Insurance);
    (vi) Section 220 of the NHA (Rehabilitation and Neighborhood 
Conservation Housing Insurance);
    (vii) Section 221(d) (3) and (5) of the NHA (Housing for Moderate 
Income and Displaced Families);
    (viii) Section 221(d)(4) of the NHA (Housing for Moderate Income and 
Displaced Families);
    (ix) Section 231 of the NHA (Housing for Elderly Persons);

[[Page 113]]

    (x) Section 232 of the NHA (Mortgage Insurance for Nursing Homes, 
Intermediate Care Facilities, Board and Care Homes);
    (xi) Section 234(d) of the NHA (Rental) (Mortgage Insurance for 
Condominiums);
    (xii) Section 236 of the NHA (Rental and Cooperative Housing for 
Lower Income Families);
    (xiii) Section 241 of the NHA (Supplemental Loans for Multifamily 
Projects); and
    (5) HUD-approved Title I and Title II supervised and nonsupervised 
lenders and mortgagees.
    (6) Operators of projects with mortgages insured or held by HUD 
under section 232 of the Act (Mortgage Insurance for Nursing Homes, 
Intermediate Care Facilities, Board and Care Homes).
    (b) Submission of financial information. Entities (or individuals) 
to which this subpart is applicable must provide to HUD such financial 
information as required by HUD. Such information must be provided on an 
annual basis, except as required more frequently under paragraph (c)(4) 
of this section. This information must be:
    (1) Prepared in accordance with Generally Accepted Accounting 
Principles as further defined by HUD in supplementary guidance;
    (2) Submitted electronically to HUD through the internet, or in such 
other electronic format designated by HUD, or in such non-electronic 
format as HUD may allow if the burden or cost of electronic reporting is 
determined by HUD to be excessive; and
    (3) Submitted in such form and substance as prescribed by HUD.
    (4) With respect to financial reports relating to properties insured 
under section 232 of the Act, concurrently with submitting the 
information to HUD, submitted to the mortgagee in a format and manner 
prescribed and/or approved by HUD.
    (c) Filing of financial reports. (1) For entities listed in 
paragraphs (a)(1) and (2) of this section, the financial information to 
be submitted to HUD in accordance with paragraph (b) of this section, 
must be submitted to HUD annually, no later than 60 days after the end 
of the fiscal year of the reporting period, and as otherwise provided by 
law (for public housing agencies, see also 24 CFR 903.33).
    (2) For entities listed in paragraphs (a)(3) and (4) of this 
section, the financial information to be submitted to HUD in accordance 
with paragraph (b) of this section, must be submitted to HUD annually, 
no later than 90 days after the end of the fiscal year of the reporting 
period, and as otherwise provided by law.
    (3) For those entities listed in paragraph (a)(5) of this section, 
the financial information to be submitted to HUD in accordance with 
paragraph (b) of this section must be submitted to HUD annually, no 
later than 90 days after the end of the fiscal year (or within an 
extended time if an extension is granted at the sole discretion of the 
Secretary). An extension request must be received no earlier than 45 
days and no later than 15 days prior to the submission deadline.
    (4) For entities listed in paragraph (a)(6) of this section, the 
financial information to be submitted to HUD in accordance with 
paragraph (b) of this section must be submitted to HUD on a quarterly 
and fiscal-year-to-date basis, within 60 calendar days of the end of 
each quarterly reporting period deadline, except that the final fiscal-
year-end quarter and fiscal-year-to-date reports must be submitted to 
HUD within 90 calendar days of the end of the fiscal-year-end quarter, 
or within such additional time as may be provided by the Commissioner 
for good cause shown. HUD may direct that such forms be submitted to the 
lender or another third party in addition to or in lieu of submission to 
HUD.
    (i) The financial statements submitted by entities listed in 
paragraph (a)(6) of this section may, at the operator's option, be 
operator-certified rather than audited, provided, however, if the 
operator is also the borrower, then that entity's obligation to submit 
an annual audited financial statement (in addition to its obligation as 
an operator to submit financial information on a quarterly and year-to-
date basis) remains and is not obviated.
    (ii) If HUD has reason to believe that a particular operator's 
operator-certified statements may be unreliable

[[Page 114]]

(for example, indicate a likely prohibited use of project funds), or are 
presented in a manner that is inconsistent with Generally Accepted 
Accounting Principles, HUD may, on a case-by-case basis, require audited 
financial statements from the operator. With respect to facilities with 
FHA-insured or HUD-held Section 232 mortgages, HUD may request more 
frequent financial statements from the borrower and/or the operator on a 
case-by-case basis when the circumstances warrant. Nothing in this 
section limits HUD's ability to obtain further or more frequent 
information when appropriate pursuant to the applicable regulatory 
agreement.
    (d) Reporting compliance dates. Entities (or individuals) that are 
subject to the reporting requirements in this section must commence 
compliance with these requirements as follows:
    (1) For PHAs listed in paragraphs (a)(1) and (a)(2) of this section, 
the requirements of this section will begin with those PHAs with fiscal 
years ending September 30, 1999 and later. Unaudited financial 
statements will be required 60 days after the PHA's fiscal year end, and 
audited financial statements will then be required no later than 9 
months after the PHA's fiscal year end, in accordance with the Single 
Audit Act and 2 CFR part 200, subpart F. A PHA with a fiscal year ending 
September 30, 1999 that elects to submit its unaudited financial report 
earlier than the due date of November 30, 1999 must submit its report as 
required in this section. On or after September 30, 1998, but prior to 
November 30, 1999 (except for a PHA with its fiscal year ending 
September 30, 1999), PHAs may submit their financial reports in 
accordance with this section.
    (2) For entities listed in paragraphs (a)(3) and (a)(4) of this 
section, the requirements of this section will begin with those entities 
with fiscal years ending December 31, 1998 and later. Entities listed in 
paragraphs (a)(3) and (a)(4) of this section with fiscal years ending 
December 31, 1998 that elect to submit their reports earlier than the 
due date must submit their financial reports as required in this 
section. On or after September 30, 1998 but prior to January 1, 1999, 
these entities may submit their financial reports in accordance with 
this section.
    (3) The requirements of this section apply to the entities listed in 
paragraph (a)(5) of this section with fiscal years ending on or after 
September 30, 2002. Audited financial statements submitted by lenders 
with fiscal years ending before September 30, 2002, may either be 
submitted in paper or electronically at the lenders' option. Audited 
financial statements submitted by lenders with fiscal years ending on or 
after September 30, 2002, must be submitted electronically.
    (4) Entities described in paragraph (a)(6) of this section must 
comply with the requirements of this section with respect to fiscal 
years commencing on or after the date that is 60 calendar days after the 
date on which HUD announces, through Federal Register notice, that it 
has issued guidance on the manner in which these reports will be 
transmitted to HUD.
    (e) Limitation on changing fiscal years. To allow for a period of 
consistent assessment of the financial reports submitted to HUD under 
this subpart part, PHAs listed in paragraphs (a)(1) and (a)(2) of this 
section will not be allowed to change their fiscal years for their first 
three full fiscal years following October 1, 1998.
    (f) Responsibility for submission of financial report. The 
responsibility for submission of the financial report due to HUD under 
this section rests with the individuals and entities listed in paragraph 
(a) of this section.

[63 FR 46591, Sept. 1, 1998, as amended at 64 FR 1505, Jan. 11, 1999; 64 
FR 33755, June 24, 1999; 65 FR 16295, Mar. 27, 2000; 67 FR 53451, Aug. 
15, 2002; 77 FR 55134, Sept. 7, 2012; 78 FR 57060, Sept. 17, 2013; 79 FR 
55362, Sept. 16, 2014; 80 FR 75934, Dec. 7, 2015]



    Subpart I_Preventing Crime in Federally Assisted Housing_Denying 
Admission and Terminating Tenancy for Criminal Activity or Alcohol Abuse

    Source: 66 FR 28792, May 24, 2001, unless otherwise noted.

[[Page 115]]

                                 General



Sec.  5.850  Which subsidized housing is covered by this subpart?

    (a) If you are the owner of federally assisted housing, your 
federally assisted housing is covered, except as provided in paragraph 
(b) or (c) of this section.
    (b) If you are operating public housing, this subpart does not 
apply, but similar provisions applicable to public housing units are 
found in parts 960 and 966 of this title. If you administer tenant-based 
assistance under Section 8 or you are the owner of housing assisted with 
tenant-based assistance under Section 8, this subpart does not apply to 
you, but similar provisions that do apply are located in part 982 of 
this title.
    (c) If you own or administer housing assisted by the Rural Housing 
Administration under section 514 or section 515 of the Housing Act of 
1949, this subpart does not apply to you.



Sec.  5.851  What authority do I have to screen applicants and to
evict tenants?

    (a) Screening applicants. You are authorized to screen applicants 
for the programs covered by this part. The provisions of this subpart 
implement statutory directives that either require or permit you to take 
action to deny admission to applicants under certain circumstances in 
accordance with established standards, as described in this subpart. The 
provisions of this subpart do not constrain your authority to screen out 
applicants who you determined are unsuitable under your standards for 
admission.
    (b) Terminating tenancy. You are authorized to terminate tenancy of 
tenants, in accordance with your leases and landlord-tenant law for the 
programs covered by this part. The provisions of this subpart implement 
statutory directives that either require or permit you to terminate 
tenancy under certain circumstances, as provided in 42 U.S.C. 1437f, 
1437n, and 13662, in accordance with established standards, as described 
in this subpart. You retain authority to terminate tenancy on any basis 
that is otherwise authorized.



Sec.  5.852  What discretion do I have in screening and eviction actions?

    (a) General. If the law and regulation permit you to take an action 
but do not require action to be taken, you may take or not take the 
action in accordance with your standards for admission and eviction. 
Consistent with the application of your admission and eviction 
standards, you may consider all of the circumstances relevant to a 
particular admission or eviction case, such as:
    (1) The seriousness of the offending action;
    (2) The effect on the community of denial or termination or the 
failure of the responsible entity to take such action;
    (3) The extent of participation by the leaseholder in the offending 
action;
    (4) The effect of denial of admission or termination of tenancy on 
household members not involved in the offending action;
    (5) The demand for assisted housing by families who will adhere to 
lease responsibilities;
    (6) The extent to which the leaseholder has shown personal 
responsibility and taken all reasonable steps to prevent or mitigate the 
offending action; and
    (7) The effect of the responsible entity's action on the integrity 
of the program.
    (b) Exclusion of culpable household member. You may require an 
applicant (or tenant) to exclude a household member in order to be 
admitted to the housing program (or continue to reside in the assisted 
unit), where that household member has participated in or been culpable 
for action or failure to act that warrants denial (or termination).
    (c) Consideration of rehabilitation. (1) In determining whether to 
deny admission or terminate tenancy for illegal use of drugs or alcohol 
abuse by a household member who is no longer engaged in such behavior, 
you may consider whether such household member is participating in or 
has successfully completed a supervised drug or alcohol rehabilitation 
program, or has otherwise been rehabilitated successfully (42 U.S.C. 
13661). For this purpose, you may require the applicant or tenant to

[[Page 116]]

submit evidence of the household member's current participation in, or 
successful completion of, a supervised drug or alcohol rehabilitation 
program or evidence of otherwise having been rehabilitated successfully.
    (2) If rehabilitation is not an element of the eligibility 
determination (see Sec.  5.854(a)(1) for the case where it must be 
considered), you may choose not to consider whether the person has been 
rehabilitated.
    (d) Length of period of mandatory prohibition on admission. If a 
statute requires that you prohibit admission of persons for a prescribed 
period of time after some disqualifying behavior or event, you may apply 
that prohibition for a longer period of time.
    (e) Nondiscrimination limitation. Your admission and eviction 
actions must be consistent with fair housing and equal opportunity 
provisions of Sec.  5.105.



Sec.  5.853  Definitions.

    (a) Terms found elsewhere. The following terms are defined in 
subpart A of this part: 1937 Act, covered person, drug, drug-related 
criminal activity, federally assisted housing, guest, household, HUD, 
other person under the tenant's control, premises, public housing, 
public housing agency (PHA), Section 8, violent criminal activity.
    (b) Additional terms used in this part are as follows.
    Currently engaging in. With respect to behavior such as illegal use 
of a drug, other drug-related criminal activity, or other criminal 
activity, currently engaging in means that the individual has engaged in 
the behavior recently enough to justify a reasonable belief that the 
individual's behavior is current.
    Owner. The owner of federally assisted housing.
    Responsible entity. For the Section 8 project-based certificate or 
project-based voucher program (part 983 of this title) and the Section 8 
moderate rehabilitation program (part 882 of this title), responsible 
entity means the PHA administering the program under an Annual 
Contributions Contract with HUD. For all other federally assisted 
housing, the responsible entity means the owner of the housing.

                           Denying Admissions



Sec.  5.854  When must I prohibit admission of individuals who
have engaged in drug-related criminal activity?

    (a) You must prohibit admission to your federally assisted housing 
of an applicant for three years from the date of eviction if any 
household member has been evicted from federally assisted housing for 
drug-related criminal activity. However, you may admit the household if:
    (1) The evicted household member who engaged in drug-related 
criminal activity has successfully completed an approved supervised drug 
rehabilitation program; or
    (2) The circumstances leading to the eviction no longer exist (for 
example, the criminal household member has died or is imprisoned).
    (b) You must establish standards that prohibit admission of a 
household to federally assisted housing if:
    (1) You determine that any household member is currently engaging in 
illegal use of a drug; or
    (2) You determine that you have reasonable cause to believe that a 
household member's illegal use or a pattern of illegal use of a drug may 
interfere with the health, safety, or right to peaceful enjoyment of the 
premises by other residents.



Sec.  5.855  When am I specifically authorized to prohibit admission
of individuals who have engaged in criminal activity?

    (a) You may prohibit admission of a household to federally assisted 
housing under your standards if you determine that any household member 
is currently engaging in, or has engaged in during a reasonable time 
before the admission decision:
    (1) Drug-related criminal activity;
    (2) Violent criminal activity;
    (3) Other criminal activity that would threaten the health, safety, 
or right to peaceful enjoyment of the premises by other residents; or
    (4) Other criminal activity that would threaten the health or safety 
of the PHA or owner or any employee, contractor, subcontractor or agent 
of the PHA or owner who is involved in the housing operations.

[[Page 117]]

    (b) You may establish a period before the admission decision during 
which an applicant must not have engaged in the activities specified in 
paragraph (a) of this section (reasonable time).
    (c) If you previously denied admission to an applicant because of a 
determination concerning a member of the household under paragraph (a) 
of this section, you may reconsider the applicant if you have sufficient 
evidence that the members of the household are not currently engaged in, 
and have not engaged in, such criminal activity during a reasonable 
period, determined by you, before the admission decision.
    (1) You would have sufficient evidence if the household member 
submitted a certification that she or he is not currently engaged in and 
has not engaged in such criminal activity during the specified period 
and provided supporting information from such sources as a probation 
officer, a landlord, neighbors, social service agency workers and 
criminal records, which you verified. (See subpart J of this part for 
one method of checking criminal records.)
    (2) For purposes of this section, a household member is currently 
engaged in the criminal activity if the person has engaged in the 
behavior recently enough to justify a reasonable belief that the 
behavior is current.



Sec.  5.856  When must I prohibit admission of sex offenders?

    You must establish standards that prohibit admission to federally 
assisted housing if any member of the household is subject to a lifetime 
registration requirement under a State sex offender registration 
program. In the screening of applicants, you must perform necessary 
criminal history background checks in the State where the housing is 
located and in other States where the household members are known to 
have resided. (See Sec.  5.905.)



Sec.  5.857  When must I prohibit admission of alcohol abusers?

    You must establish standards that prohibit admission to federally 
assisted housing if you determine you have reasonable cause to believe 
that a household member's abuse or pattern of abuse of alcohol 
interferes with the health, safety, or right to peaceful enjoyment of 
the premises by other residents.

                           Terminating Tenancy



Sec.  5.858  What authority do I have to evict drug criminals?

    The lease must provide that drug-related criminal activity engaged 
in on or near the premises by any tenant, household member, or guest, 
and any such activity engaged in on the premises by any other person 
under the tenant's control, is grounds for you to terminate tenancy. In 
addition, the lease must allow you to evict a family when you determine 
that a household member is illegally using a drug or when you determine 
that a pattern of illegal use of a drug interferes with the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents.



Sec.  5.859  When am I specifically authorized to evict other criminals?

    (a) Threat to other residents. The lease must provide that the owner 
may terminate tenancy for any of the following types of criminal 
activity by a covered person:
    (1) Any criminal activity that threatens the health, safety, or 
right to peaceful enjoyment of the premises by other residents 
(including property management staff residing on the premises); or
    (2) Any criminal activity that threatens the health, safety, or 
right to peaceful enjoyment of their residences by persons residing in 
the immediate vicinity of the premises.
    (b) Fugitive felon or parole violator. The lease must provide that 
you may terminate the tenancy during the term of the lease if a tenant 
is:
    (1) Fleeing to avoid prosecution, or custody or confinement after 
conviction, for a crime, or attempt to commit a crime, that is a felony 
under the laws of the place from which the individual flees, or that, in 
the case of the State of New Jersey, is a high misdemeanor; or
    (2) Violating a condition of probation or parole imposed under 
Federal or State law.

[[Page 118]]



Sec.  5.860  When am I specifically authorized to evict alcohol abusers?

    The lease must provide that you may terminate the tenancy if you 
determine that a household member's abuse or pattern of abuse of alcohol 
threatens the health, safety, or right to peaceful enjoyment of the 
premises by other residents.



Sec.  5.861  What evidence of criminal activity must I have to evict?

    You may terminate tenancy and evict the tenant through judicial 
action for criminal activity by a covered person in accordance with this 
subpart if you determine that the covered person has engaged in the 
criminal activity, regardless of whether the covered person has been 
arrested or convicted for such activity and without satisfying a 
criminal conviction standard of proof of the activity.



          Subpart J_Access to Criminal Records and Information

    Source: 66 FR 28794, May 24, 2001, unless otherwise noted.



Sec.  5.901  To what criminal records and searches does this subpart apply?

    (a) General criminal records searches. This subpart applies to 
criminal conviction background checks by PHAs that administer the 
Section 8 and public housing programs when they obtain criminal 
conviction records, under the authority of section 6(q) of the 1937 Act 
(42 U.S.C. 1437d(q)), from a law enforcement agency to prevent admission 
of criminals to public housing and Section 8 housing and to assist in 
lease enforcement and eviction.
    (b) Sex offender registration records searches. This subpart applies 
to PHAs that administer the Section 8 and public housing programs when 
they obtain sex offender registration information from State and local 
agencies, under the authority of 42 U.S.C. 13663, to prevent admission 
of dangerous sex offenders to federally assisted housing.
    (c) Excluded records searches. The provisions of this subpart do not 
apply to criminal conviction information or sex offender information 
searches by a PHA or others of information from law enforcement agencies 
or other sources other than as provided under this subpart.



Sec.  5.902  Definitions.

    (a) Terms found elsewhere. The following terms used in this subpart 
are defined in subpart A of this part: 1937 Act, drug, federally 
assisted housing, household, HUD, public housing, public housing agency 
(PHA), Section 8.
    (b) Additional terms used in this subpart are as follows:
    Adult. A person who is 18 years of age or older, or who has been 
convicted of a crime as an adult under any Federal, State, or tribal 
law.
    Covered housing. Public housing, project-based assistance under 
section 8 (including new construction and substantial rehabilitation 
projects), and tenant-based assistance under section 8.
    Law enforcement agency. The National Crime Information Center 
(NCIC), police departments and other law enforcement agencies that hold 
criminal conviction records.
    Owner. The owner of federally assisted housing.
    Responsible entity. For the public housing program, the Section 8 
tenant-based assistance program (part 982 of this title), the Section 8 
project-based certificate or project-based voucher program (part 983 of 
this title), and the Section 8 moderate rehabilitation program (part 882 
of this title), responsible entity means the PHA administering the 
program under an Annual Contributions Contract with HUD. For all other 
Section 8 programs, responsible entity means the Section 8 owner.



Sec.  5.903  What special authority is there to obtain access to
criminal records?

    (a) Authority. If you are a PHA that administers the Section 8 
program and/or the public housing program, this section authorizes you 
to obtain criminal conviction records from a law enforcement agency, as 
defined in Sec.  5.902. You may use the criminal conviction records that 
you obtain from a law enforcement agency under the authority of this 
section to screen applicants for admission to covered housing programs 
and for lease enforcement or eviction

[[Page 119]]

of families residing in public housing or receiving Section 8 project-
based assistance.
    (b) Consent for release of criminal conviction records. (1) In order 
to obtain access to records under this section, as a responsible entity 
you must require every applicant family to submit a consent form signed 
by each adult household member.
    (2) By execution of the consent form, an adult household member 
consents that:
    (i) Any law enforcement agency may release criminal conviction 
records concerning the household member to a PHA in accordance with this 
section;
    (ii) The PHA may receive the criminal conviction records from a law 
enforcement agency, and may use the records in accordance with this 
section.
    (c) Procedure for PHA. (1) When the law enforcement agency receives 
your request, the law enforcement agency must promptly release to you a 
certified copy of any criminal conviction records concerning the 
household member in the possession or control of the law enforcement 
agency. NCIC records must be provided in accordance with NCIC 
procedures.
    (2) The law enforcement agency may charge you a reasonable fee for 
releasing criminal conviction records.
    (d) Owner access to criminal records--(1) General. (i) If an owner 
submits a request to the PHA for criminal records concerning an adult 
member of an applicant or resident household, in accordance with the 
provisions of paragraph (d) of this section, the PHA must request the 
criminal conviction records from the appropriate law enforcement agency 
or agencies, as determined by the PHA.
    (ii) If the PHA receives criminal conviction records requested by an 
owner, the PHA must determine whether criminal action by a household 
member, as shown by such criminal conviction records, may be a basis for 
applicant screening, lease enforcement or eviction, as applicable in 
accordance with HUD regulations and the owner criteria.
    (iii) The PHA must notify the owner whether the PHA has received 
criminal conviction records concerning the household member, and of its 
determination whether such criminal conviction records may be a basis 
for applicant screening, lease enforcement or eviction. However, except 
as provided in paragraph (e)(2)(ii) of this section, the PHA must not 
disclose the household member's criminal conviction record or the 
content of that record to the owner.
    (2) Screening. If you are an owner of covered housing, you may 
request that the PHA in the jurisdiction of the property obtain criminal 
conviction records of an adult household member from a law enforcement 
agency on your behalf for the purpose of screening applicants.
    (i) Your request must include a copy of the consent form, signed by 
the household member.
    (ii) Your request must include your standards for prohibiting 
admission of drug criminals in accordance with Sec.  5.854, and for 
prohibiting admission of other criminals in accordance with Sec.  5.855.
    (3) Eviction or lease enforcement. If you are an owner of a unit 
with Section 8 project-based assistance, you may request that the PHA in 
the location of the project obtain criminal conviction records of a 
household member from an appropriate law enforcement agency on your 
behalf in connection with lease enforcement or eviction.
    (i) Your request must include a copy of the consent form, signed by 
the household member.
    (ii) If you intend to use the PHA determination regarding any such 
criminal conviction records in connection with eviction, your request 
must include your standards for evicting drug criminals in accordance 
with Sec.  5.857, and for evicting other criminals in accordance with 
Sec.  5.858.
    (iii) If you intend to use the PHA determination regarding any such 
criminal conviction records for lease enforcement other than eviction, 
your request must include your standards for lease enforcement because 
of criminal activity by members of a household.
    (4) Fees. If an owner requests a PHA to obtain criminal conviction 
records in accordance with this section, the PHA may charge the owner 
reasonable fees for making the request on behalf

[[Page 120]]

of the owner and for taking other actions for the owner. The PHA may 
require the owner to reimburse costs incurred by the PHA, including 
reimbursement of any fees charged to the PHA by the law enforcement 
agency, the PHA's own related staff and administrative costs. The owner 
may not pass along to the applicant or tenant the costs of a criminal 
records check.
    (e) Permitted use and disclosure of criminal conviction records 
received by PHA--(1) Use of records. Criminal conviction records 
received by a PHA from a law enforcement agency in accordance with this 
section may only be used for the following purposes:
    (i) Applicant screening. (A) PHA screening of applicants for 
admission to public housing (part 960 of this title);
    (B) PHA screening of applicants for admission to the Housing Choice 
Voucher Program (section 8 tenant-based assistance) (part 982 of this 
title);
    (C) PHA screening of applicants for admission to the Section 8 
moderate rehabilitation program (part 882 of this title); or the Section 
8 project-based certificate or project-based voucher program (part 983 
of this title); or
    (D) PHA screening concerning criminal conviction of applicants for 
admission to Section 8 project-based assistance, at the request of the 
owner. (For requirements governing use of criminal conviction records 
obtained by a PHA at the request of a Section 8 owner under this 
section, see paragraph (d) of this section.)
    (ii) Lease enforcement and eviction. (A) PHA enforcement of public 
housing leases and PHA eviction of public housing residents;
    (B) Enforcement of leases by a Section 8 project owner and eviction 
of residents by a Section 8 project owner. (However, criminal conviction 
records received by a PHA from a law enforcement agency under this 
section may not be used for lease enforcement or eviction of residents 
receiving Section 8 tenant-based assistance.)
    (2) PHA disclosure of records. (i) A PHA may disclose the criminal 
conviction records which the PHA receives from a law enforcement agency 
only as follows:
    (A) To officers or employees of the PHA, or to authorized 
representatives of the PHA who have a job-related need to have access to 
the information. For example, if the PHA is seeking to evict a public 
housing tenant on the basis of criminal activity as shown in criminal 
conviction records provided by a law enforcement agency, the records may 
be disclosed to PHA employees performing functions related to the 
eviction, or to a PHA hearing officer conducting an administrative 
grievance hearing concerning the proposed eviction.
    (B) To the owner for use in connection with judicial eviction 
proceedings by the owner to the extent necessary in connection with a 
judicial eviction proceeding. For example, criminal conviction records 
may be included in pleadings or other papers filed in an eviction 
action, may be disclosed to parties to the action or the court, and may 
be filed in court or offered as evidence.
    (ii) This disclosure may be made only if the following conditions 
are satisfied:
    (A) If the PHA has determined that criminal activity by the 
household member as shown by such records received from a law 
enforcement agency may be a basis for eviction from a Section 8 unit; 
and
    (B) If the owner certifies in writing that it will use the criminal 
conviction records only for the purpose and only to the extent necessary 
to seek eviction in a judicial proceeding of a Section 8 tenant based on 
the criminal activity by the household member that is described in the 
criminal conviction records.
    (iii) The PHA may rely on an owner's certification that the criminal 
record is necessary to proceed with a judicial eviction to evict the 
tenant based on criminal activity of the identified household member, as 
shown in the criminal conviction record.
    (iv) Upon disclosure as necessary in connection with judicial 
eviction proceedings, the PHA is not responsible for controlling access 
to or knowledge of such records after such disclosure.
    (f) Opportunity to dispute. If a PHA obtains criminal record 
information from a State or local agency under this

[[Page 121]]

section showing that a household member has been convicted of a crime 
relevant to applicant screening, lease enforcement or eviction, the PHA 
must notify the household of the proposed action to be based on the 
information and must provide the subject of the record and the applicant 
or tenant a copy of such information, and an opportunity to dispute the 
accuracy and relevance of the information. This opportunity must be 
provided before a denial of admission, eviction or lease enforcement 
action on the basis of such information.
    (g) Records management. Consistent with the limitations on 
disclosure of records in paragraph (e) of this section, the PHA must 
establish and implement a system of records management that ensures that 
any criminal record received by the PHA from a law enforcement agency 
is:
    (1) Maintained confidentially;
    (2) Not misused or improperly disseminated; and
    (3) Destroyed, once the purpose(s) for which the record was 
requested has been accomplished, including expiration of the period for 
filing a challenge to the PHA action without institution of a challenge 
or final disposition of any such litigation.
    (h) Penalties for improper release of information--(1) Criminal 
penalty. Conviction for a misdemeanor and imposition of a penalty of not 
more than $5,000 is the potential for:
    (i) Any person, including an officer, employee, or authorized 
representative of any PHA or of any project owner, who knowingly and 
willfully requests or obtains any information concerning an applicant 
for, or tenant of, covered housing assistance under the authority of 
this section under false pretenses; or
    (ii) Any person, including an officer, employee, or authorized 
representative of any PHA or a project owner, who knowingly and 
willfully discloses any such information in any manner to any individual 
not entitled under any law to receive the information.
    (2) Civil liability. (i) A PHA may be held liable to any applicant 
for, or tenant of, covered housing assistance affected by either of the 
following:
    (A) A negligent or knowing disclosure of criminal records 
information obtained under the authority of this section about such 
person by an officer, employee, or authorized representative of the PHA 
if the disclosure is not authorized by this section; or
    (B) Any other negligent or knowing action that is inconsistent with 
this section.
    (ii) An applicant for, or tenant of, covered housing assistance may 
seek relief against a PHA in these circumstances by bringing a civil 
action for damages and such other relief as may be appropriate against 
the PHA responsible for such unauthorized action. The United States 
district court in which the affected applicant or tenant resides, in 
which the unauthorized action occurred, or in which the officer, 
employee, or representative alleged to be responsible resides, has 
jurisdiction. Appropriate relief may include reasonable attorney's fees 
and other litigation costs.



Sec.  5.905  What special authority is there to obtain access to sex
offender registration information?

    (a) PHA obligation to obtain sex offender registration information. 
(1) A PHA that administers a Section 8 or public housing program under 
an Annual Contributions Contract with HUD must carry out background 
checks necessary to determine whether a member of a household applying 
for admission to any federally assisted housing program is subject to a 
lifetime sex offender registration requirement under a State sex 
offender registration program. This check must be carried out with 
respect to the State in which the housing is located and with respect to 
States where members of the applicant household are known to have 
resided.
    (2) If the PHA requests such information from any State or local 
agency responsible for the collection or maintenance of such 
information, the State or local agency must promptly provide the PHA 
such information in its possession or control.
    (3) The State or local agency may charge a reasonable fee for 
providing the information.
    (b) Owner's request for sex offender registration information--(1) 
General. An owner of federally assisted housing that is located in the 
jurisdiction of a

[[Page 122]]

PHA that administers a Section 8 or public housing program under an 
Annual Contributions Contract with HUD may request that the PHA obtain 
information necessary to determine whether a household member is subject 
to a lifetime registration requirement under a State sex offender 
registration requirement.
    (2) Procedure. If the request is made in accordance with the 
provisions of paragraph (b) of this section:
    (i) The PHA must request the information from a State or local 
agency;
    (ii) The State or local agency must promptly provide the PHA such 
information in its possession or control;
    (iii) The PHA must determine whether such information may be a basis 
for applicant screening, lease enforcement or eviction, based on the 
criteria used by the owner as specified in the owner's request, and 
inform the owner of the determination.
    (iv) The PHA must notify the owner of its determination whether sex 
offender registration information received by the PHA under this section 
concerning a household member may be a basis for applicant screening, 
lease enforcement or eviction in accordance with HUD requirements and 
the criteria used by the owner.
    (3) Contents of request. As the owner, your request must specify 
whether you are asking the PHA to obtain the sex offender registration 
information concerning the household member for applicant screening, for 
lease enforcement, or for eviction and include the following 
information:
    (i) Addresses or other information about where members of the 
household are known to have lived.
    (ii) If you intend to use the PHA determination regarding any such 
sex offender registration information for applicant screening, your 
request must include your standards in accordance with Sec.  5.855(c) 
for prohibiting admission of persons subject to a lifetime sex offender 
registration requirement.
    (iii) If you intend to use the PHA determination regarding any such 
sex offender registration information for eviction, your request must 
include your standards for evicting persons subject to a lifetime 
registration requirement in accordance with Sec.  5.858.
    (iv) If you intend to use the PHA determination regarding any such 
sex offender registration information for lease enforcement other than 
eviction, your request must include your standards for lease enforcement 
because of criminal activity by members of a household.
    (4) PHA disclosure of records. The PHA must not disclose to the 
owner any sex offender registration information obtained by the PHA 
under this section.
    (5) Fees. If an owner asks a PHA to obtain sex offender registration 
information concerning a household member in accordance with this 
section, the PHA may charge the owner reasonable fees for making the 
request on behalf of the owner and for taking other actions for the 
owner. The PHA may require the owner to reimburse costs incurred by the 
PHA, including reimbursement of any fees charged to the PHA by a State 
or local agency for releasing the information, the PHA's own related 
staff and administrative costs. The owner may not pass along to the 
applicant or tenant the costs of a sex offender registration records 
check.
    (c) Records management. (1) The PHA must establish and implement a 
system of records management that ensures that any sex offender 
registration information record received by the PHA from a State or 
local agency under this section is:
    (i) Maintained confidentially;
    (ii) Not misused or improperly disseminated; and
    (iii) Destroyed, once the purpose for which the record was requested 
has been accomplished, including expiration of the period for filing a 
challenge to the PHA action without institution of a challenge or final 
disposition of any such litigation.
    (2) The records management requirements do not apply to information 
that is public information, or is obtained by a PHA other than under 
this section.
    (d) Opportunity to dispute. If a PHA obtains sex offender 
registration information from a State or local agency under paragraph 
(a) of this section showing that a household member is subject to a 
lifetime sex offender registration requirement, the PHA must notify the 
household of the proposed action to be based on the information

[[Page 123]]

and must provide the subject of the record, and the applicant or tenant, 
with a copy of such information, and an opportunity to dispute the 
accuracy and relevance of the information. This opportunity must be 
provided before a denial of admission, eviction or lease enforcement 
action on the basis of such information.



    Subpart K_Application, Registration, and Submission Requirements

    Source: 69 FR 15673, Mar. 26, 2004, unless otherwise noted.



Sec.  5.1001  Applicability.

    This subpart applies to all applicants for HUD grants, cooperative 
agreements, capital fund or operating fund subsidy, capital advance, or 
other assistance under HUD programs, including grant programs that are 
classified by OMB as including formula grant programs or activities, but 
excluding FHA insurance and loan guarantees that are not associated with 
a grant program or grant award.



Sec.  5.1003  Use of a universal identifier for organizations applying
for HUD grants.

    (a) Every application for a new or renewal of a grant, cooperative 
agreement, capital fund or operating fund subsidy, capital advance, or 
other assistance, including an application or plan under a grant program 
that is classified by OMB as including formula grant programs, must 
include a unique entity identifier number for the applicant.
    (b)(1) Applicants or groups of applicants under a consortium 
arrangement must have a unique entity identifier for the organization 
that is submitting the application for federal assistance as the lead 
applicant on behalf of the other applicants. If each organization is 
submitting a separate application as part of a group of applications, 
then each organization must include its unique entity identifier with 
its application submission.
    (2) If an organization is submitting an application as a sponsor or 
on behalf of other applicants, and the other entities will be receiving 
funds directly from HUD, then the applicant or sponsor must submit an 
application for funding that includes the unique entity identifier of 
each applicant that would receive funds directly from HUD.
    (3) If an organization is managing funds for a group of 
organizations, a unique entity identifier must be submitted for the 
managing organization, if it is drawing down funds directly from HUD.
    (4) If an organization is drawing down funds directly from HUD and 
subsequently turning the funds over to a management organization, then 
the management organization must obtain a unique entity identifier and 
submit the number to HUD.
    (c) Individuals who would personally receive a grant or other 
assistance from HUD, independent from any business or nonprofit 
organization with which they may operate or participate, are exempt from 
this requirement.
    (d) In cases where individuals apply for funding, but the funding 
will be awarded to an institution or other entity on the individual's 
behalf, the institution or entity must obtain a unique entity identifier 
and the individual must submit the institution's unique entity 
identifier number with the application.
    (e) Unless an exemption is granted by OMB, HUD will not consider an 
application as complete until a valid unique entity identifier is 
provided by the applicant. For classes of grants and grantees subject to 
this part, exceptions to this rule must be submitted to OMB for approval 
in accordance with procedures prescribed by the Department.

[69 FR 15673, Mar. 26, 2004, as amended at 80 FR 75934, Dec. 7, 2015]



Sec.  5.1004  System of award management.

    Applicants for HUD financial assistance that are subject to this 
subpart are required to register with the System of Award Management 
(SAM) and have an active registration in SAM in accordance with 2 CFR 
part 25, appendix A in order for HUD to obligate funds and for an 
awardee to receive an award of funds from HUD.

[75 FR 41089, July 15, 2010, as amended at 80 FR 75934, Dec. 7, 2015]

[[Page 124]]



Sec.  5.1005  Electronic submission of applications for grants and
other financial assistance.

    Applicants described under 24 CFR 5.1001 are required to submit 
electronic applications or plans for grants and other financial 
assistance in response to any application that HUD has placed on the 
www.grants.gov/Apply Web site or its successor. The HUD Assistant 
Secretary, General Deputy Assistant Secretary or, the individual 
authorized to perform duties and responsibilities of these positions, 
with authority over the specific program for which the waiver is sought, 
may in writing, waive the electronic submission requirement for an 
applicant on the basis of good cause.

[70 FR 77294, Dec. 29, 2005]



Subpart L_Protection for Victims of Domestic Violence, Dating Violence, 
                       Sexual Assault, or Stalking

    Source: 81 FR 80798, Nov. 16, 2016, unless otherwise noted.



Sec.  5.2001  Applicability.

    (a) This subpart addresses the protections for victims of domestic 
violence, dating violence, sexual assault, or stalking who are applying 
for, or are the beneficiaries of, assistance under a HUD program covered 
by the Violence Against Women Act (VAWA), as amended (42 U.S.C. 13925 
and 42 U.S.C. 14043e et seq.) (``covered housing program,'' as defined 
in Sec.  5.2003). Notwithstanding the title of the statute, protections 
are not limited to women but cover victims of domestic violence, dating 
violence, sexual assault, and stalking, regardless of sex, gender 
identity, or sexual orientation. Consistent with the nondiscrimination 
and equal opportunity requirements at 24 CFR 5.105(a), victims cannot be 
discriminated against on the basis of any protected characteristic, 
including race, color, national origin, religion, sex, familial status, 
disability, or age. HUD programs must also be operated consistently with 
HUD's Equal Access Rule at Sec.  5.105(a)(2), which requires that HUD-
assisted and HUD-insured housing are made available to all otherwise 
eligible individuals and families regardless of actual or perceived 
sexual orientation, gender identity, or marital status.
    (b)(1) The applicable assistance provided under a covered housing 
program generally consists of two types of assistance (one or both may 
be provided): Tenant-based rental assistance, which is rental assistance 
that is provided to the tenant; and project-based assistance, which is 
assistance that attaches to the unit in which the tenant resides. For 
project-based assistance, the assistance may consist of such assistance 
as operating assistance, development assistance, and mortgage interest 
rate subsidy.
    (2) The regulations in this subpart are supplemented by the specific 
regulations for the HUD-covered housing programs listed in Sec.  5.2003. 
The program-specific regulations address how certain VAWA requirements 
are to be implemented and whether they can be implemented (for example, 
reasonable time to establish eligibility for assistance as provided in 
Sec.  5.2009(b)) for the applicable covered housing program, given the 
statutory and regulatory framework for the program. When there is 
conflict between the regulations of this subpart and the program-
specific regulations, the program-specific regulations govern. Where 
assistance is provided under more than one covered housing program and 
there is a conflict between VAWA protections or remedies under those 
programs, the individual seeking the VAWA protections or remedies may 
choose to use the protections or remedies under any or all of those 
programs, as long as the protections or remedies would be feasible and 
permissible under each of the program statutes.



Sec.  5.2003  Definitions.

    The definitions of PHA, HUD, household, and other person under the 
tenant's control are defined in subpart A of this part. As used in this 
subpart L:
    Actual and imminent threat refers to a physical danger that is real, 
would occur within an immediate time frame, and could result in death or 
serious bodily harm. In determining whether an individual would pose an 
actual and

[[Page 125]]

imminent threat, the factors to be considered include: The duration of 
the risk, the nature and severity of the potential harm, the likelihood 
that the potential harm will occur, and the length of time before the 
potential harm would occur.
    Affiliated individual, with respect to an individual, means:
    (1) A spouse, parent, brother, sister, or child of that individual, 
or a person to whom that individual stands in the place of a parent or 
guardian (for example, the affiliated individual is a person in the 
care, custody, or control of that individual); or
    (2) Any individual, tenant, or lawful occupant living in the 
household of that individual.
    Bifurcate means to divide a lease as a matter of law, subject to the 
permissibility of such process under the requirements of the applicable 
HUD-covered program and State or local law, such that certain tenants or 
lawful occupants can be evicted or removed and the remaining tenants or 
lawful occupants can continue to reside in the unit under the same lease 
requirements or as may be revised depending upon the eligibility for 
continued occupancy of the remaining tenants and lawful occupants.
    Covered housing program consists of the following HUD programs:
    (1) Section 202 Supportive Housing for the Elderly (12 U.S.C. 
1701q), with implementing regulations at 24 CFR part 891.
    (2) Section 811 Supportive Housing for Persons with Disabilities (42 
U.S.C. 8013), with implementing regulations at 24 CFR part 891.
    (3) Housing Opportunities for Persons With AIDS (HOPWA) program (42 
U.S.C. 12901 et seq.), with implementing regulations at 24 CFR part 574.
    (4) HOME Investment Partnerships (HOME) program (42 U.S.C. 12741 et 
seq.), with implementing regulations at 24 CFR part 92.
    (5) Homeless programs under title IV of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11360 et seq.), including the Emergency 
Solutions Grants program (with implementing regulations at 24 CFR part 
576), the Continuum of Care program (with implementing regulations at 24 
CFR part 578), and the Rural Housing Stability Assistance program (with 
regulations forthcoming).
    (6) Multifamily rental housing under section 221(d)(3) of the 
National Housing Act (12 U.S.C. 17151(d)) with a below-market interest 
rate (BMIR) pursuant to section 221(d)(5), with implementing regulations 
at 24 CFR part 221.
    (7) Multifamily rental housing under section 236 of the National 
Housing Act (12 U.S.C. 1715z-1), with implementing regulations at 24 CFR 
part 236.
    (8) HUD programs assisted under the United States Housing Act of 
1937 (42 U.S.C. 1437 et seq.); specifically, public housing under 
section 6 of the 1937 Act (42 U.S.C. 1437d) (with regulations at 24 CFR 
Chapter IX), tenant-based and project-based rental assistance under 
section 8 of the 1937 Act (42 U.S.C. 1437f) (with regulations at 24 CFR 
chapters VIII and IX), and the Section 8 Moderate Rehabilitation Single 
Room Occupancy (with implementing regulations at 24 CFR part 882, 
subpart H).
    (9) The Housing Trust Fund (12 U.S.C. 4568) (with implementing 
regulations at 24 CFR part 93).
    Covered housing provider refers to the individual or entity under a 
covered housing program that has responsibility for the administration 
and/or oversight of VAWA protections and includes PHAs, sponsors, 
owners, mortgagors, managers, State and local governments or agencies 
thereof, nonprofit or for-profit organizations or entities. The program-
specific regulations for the covered housing programs identify the 
individual or entity that carries out the duties and responsibilities of 
the covered housing provider as set forth in part 5, subpart L. For any 
of the covered housing programs, it is possible that there may be more 
than one covered housing provider; that is, depending upon the VAWA duty 
or responsibility to be performed by a covered housing provider, the 
covered housing provider may not always be the same individual or 
entity.
    Dating violence means violence committed by a person:
    (1) Who is or has been in a social relationship of a romantic or 
intimate nature with the victim; and

[[Page 126]]

    (2) Where the existence of such a relationship shall be determined 
based on a consideration of the following factors:
    (i) The length of the relationship;
    (ii) The type of relationship; and
    (iii) The frequency of interaction between the persons involved in 
the relationship.
    Domestic violence includes felony or misdemeanor crimes of violence 
committed by a current or former spouse or intimate partner of the 
victim, by a person with whom the victim shares a child in common, by a 
person who is cohabitating with or has cohabitated with the victim as a 
spouse or intimate partner, by a person similarly situated to a spouse 
of the victim under the domestic or family violence laws of the 
jurisdiction receiving grant monies, or by any other person against an 
adult or youth victim who is protected from that person's acts under the 
domestic or family violence laws of the jurisdiction. The term ``spouse 
or intimate partner of the victim'' includes a person who is or has been 
in a social relationship of a romantic or intimate nature with the 
victim, as determined by the length of the relationship, the type of the 
relationship, and the frequency of interaction between the persons 
involved in the relationship.
    Sexual assault means any nonconsensual sexual act proscribed by 
Federal, tribal, or State law, including when the victim lacks capacity 
to consent.
    Stalking means engaging in a course of conduct directed at a 
specific person that would cause a reasonable person to:
    (1) Fear for the person's individual safety or the safety of others; 
or
    (2) Suffer substantial emotional distress.
    VAWA means the Violence Against Women Act of 1994, as amended (42 
U.S.C. 13925 and 42 U.S.C. 14043e et seq.).



Sec.  5.2005  VAWA protections.

    (a) Notification of occupancy rights under VAWA, and certification 
form. (1) A covered housing provider must provide to each of its 
applicants and to each of its tenants the notice of occupancy rights and 
the certification form as described in this section:
    (i) A ``Notice of Occupancy Rights under the Violence Against Women 
Act,'' as prescribed and in accordance with directions provided by HUD, 
that explains the VAWA protections under this subpart, including the 
right to confidentiality, and any limitations on those protections; and
    (ii) A certification form, in a form approved by HUD, to be 
completed by the victim to document an incident of domestic violence, 
dating violence, sexual assault or stalking, and that:
    (A) States that the applicant or tenant is a victim of domestic 
violence, dating violence, sexual assault, or stalking;
    (B) States that the incident of domestic violence, dating violence, 
sexual assault, or stalking that is the ground for protection under this 
subpart meets the applicable definition for such incident under Sec.  
5.2003; and
    (C) Includes the name of the individual who committed the domestic 
violence, dating violence, sexual assault, or stalking, if the name is 
known and safe to provide.
    (2) The notice required by paragraph (a)(1)(i) of this section and 
certification form required by paragraph (a)(1)(ii) of this section must 
be provided to an applicant or tenant no later than at each of the 
following times:
    (i) At the time the applicant is denied assistance or admission 
under a covered housing program;
    (ii) At the time the individual is provided assistance or admission 
under the covered housing program;
    (iii) With any notification of eviction or notification of 
termination of assistance; and
    (iv) During the 12-month period following December 16, 2016, either 
during the annual recertification or lease renewal process, whichever is 
applicable, or, if there will be no recertification or lease renewal for 
a tenant during the first year after the rule takes effect, through 
other means.
    (3) The notice required by paragraph (a)(1)(i) of this section and 
the certification form required by paragraph (a)(1)(ii) of this section 
must be made available in multiple languages, consistent with guidance 
issued by HUD in accordance with Executive Order 13166

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(Improving Access to Services for Persons with Limited English 
Proficiency, signed August 11, 2000, and published in the Federal 
Register on August 16, 2000 (at 65 FR 50121).
    (4) For the Housing Choice Voucher program under 24 CFR part 982, 
the project-based voucher program under 24 CFR part 983, the public 
housing admission and occupancy requirements under 24 CFR part 960, and 
renewed funding or leases of the Section 8 project-based program under 
24 CFR parts 880, 882, 883, 884, 886, as well as project-based section 8 
provided in connection with housing under part 891, the HUD-required 
lease, lease addendum, or tenancy addendum, as applicable, must include 
a description of specific protections afforded to the victims of 
domestic violence, dating violence, sexual assault, or stalking, as 
provided in this subpart.
    (b) Prohibited basis for denial or termination of assistance or 
eviction--(1) General. An applicant for assistance or tenant assisted 
under a covered housing program may not be denied admission to, denied 
assistance under, terminated from participation in, or evicted from the 
housing on the basis or as a direct result of the fact that the 
applicant or tenant is or has been a victim of domestic violence, dating 
violence, sexual assault, or stalking, if the applicant or tenant 
otherwise qualifies for admission, assistance, participation, or 
occupancy.
    (2) Termination on the basis of criminal activity. A tenant in a 
covered housing program may not be denied tenancy or occupancy rights 
solely on the basis of criminal activity directly relating to domestic 
violence, dating violence, sexual assault, or stalking if:
    (i) The criminal activity is engaged in by a member of the household 
of the tenant or any guest or other person under the control of the 
tenant, and
    (ii) The tenant or an affiliated individual of the tenant is the 
victim or threatened victim of such domestic violence, dating violence, 
sexual assault or stalking.
    (c) Construction of lease terms and terms of assistance. An incident 
of actual or threatened domestic violence, dating violence, sexual 
assault, or stalking shall not be construed as:
    (1) A serious or repeated violation of a lease executed under a 
covered housing program by the victim or threatened victim of such 
incident; or
    (2) Good cause for terminating the assistance, tenancy, or occupancy 
rights under a covered housing program of the victim or threatened 
victim of such incident.
    (d) Limitations of VAWA protections. (1) Nothing in this section 
limits the authority of a covered housing provider, when notified of a 
court order, to comply with a court order with respect to:
    (i) The rights of access or control of property, including civil 
protection orders issued to protect a victim of domestic violence, 
dating violence, sexual assault, or stalking; or
    (ii) The distribution or possession of property among members of a 
household.
    (2) Nothing in this section limits any available authority of a 
covered housing provider to evict or terminate assistance to a tenant 
for any violation not premised on an act of domestic violence, dating 
violence, sexual assault, or stalking that is in question against the 
tenant or an affiliated individual of the tenant. However, the covered 
housing provider must not subject the tenant, who is or has been a 
victim of domestic violence, dating violence, sexual assault, or 
stalking, or is affiliated with an individual who is or has been a 
victim of domestic violence, dating violence, sexual assault or 
stalking, to a more demanding standard than other tenants in determining 
whether to evict or terminate assistance.
    (3) Nothing in this section limits the authority of a covered 
housing provider to terminate assistance to or evict a tenant under a 
covered housing program if the covered housing provider can demonstrate 
an actual and imminent threat to other tenants or those employed at or 
providing service to property of the covered housing provider would be 
present if that tenant or lawful occupant is not evicted or terminated 
from assistance. In this context, words, gestures, actions, or other 
indicators will be considered an ``actual and imminent threat'' if they

[[Page 128]]

meet the standards provided in the definition of ``actual and imminent 
threat'' in Sec.  5.2003.
    (4) Any eviction or termination of assistance, as provided in 
paragraph (d)(3) of this section should be utilized by a covered housing 
provider only when there are no other actions that could be taken to 
reduce or eliminate the threat, including, but not limited to, 
transferring the victim to a different unit, barring the perpetrator 
from the property, contacting law enforcement to increase police 
presence or develop other plans to keep the property safe, or seeking 
other legal remedies to prevent the perpetrator from acting on a threat. 
Restrictions predicated on public safety cannot be based on stereotypes, 
but must be tailored to particularized concerns about individual 
residents.
    (e) Emergency transfer plan. Each covered housing provider, as 
identified in the program-specific regulations for the covered housing 
program, shall adopt an emergency transfer plan, no later than June 14, 
2017 based on HUD's model emergency transfer plan, in accordance with 
the following:
    (1) For purposes of this section, the following definitions apply:
    (i) Internal emergency transfer refers to an emergency relocation of 
a tenant to another unit where the tenant would not be categorized as a 
new applicant; that is, the tenant may reside in the new unit without 
having to undergo an application process.
    (ii) External emergency transfer refers to an emergency relocation 
of a tenant to another unit where the tenant would be categorized as a 
new applicant; that is the tenant must undergo an application process in 
order to reside in the new unit.
    (iii) Safe unit refers to a unit that the victim of domestic 
violence, dating violence, sexual assault, or stalking believes is safe.
    (2) The emergency transfer plan must provide that a tenant receiving 
rental assistance through, or residing in a unit subsidized under, a 
covered housing program who is a victim of domestic violence, dating 
violence, sexual assault, or stalking qualifies for an emergency 
transfer if:
    (i) The tenant expressly requests the transfer; and
    (ii)(A) The tenant reasonably believes there is a threat of imminent 
harm from further violence if the tenant remains within the same 
dwelling unit that the tenant is currently occupying; or
    (B) In the case of a tenant who is a victim of sexual assault, 
either the tenant reasonably believes there is a threat of imminent harm 
from further violence if the tenant remains within the same dwelling 
unit that the tenant is currently occupying, or the sexual assault 
occurred on the premises during the 90-calendar-day period preceding the 
date of the request for transfer.
    (3) The emergency transfer plan must detail the measure of any 
priority given to tenants who qualify for an emergency transfer under 
VAWA in relation to other categories of tenants seeking transfers and 
individuals seeking placement on waiting lists.
    (4) The emergency transfer plan must incorporate strict 
confidentiality measures to ensure that the covered housing provider 
does not disclose the location of the dwelling unit of the tenant to a 
person who committed or threatened to commit an act of domestic 
violence, dating violence, sexual assault, or stalking against the 
tenant.
    (5) The emergency transfer plan must allow a tenant to make an 
internal emergency transfer under VAWA when a safe unit is immediately 
available.
    (6) The emergency transfer plan must describe policies for assisting 
a tenant in making an internal emergency transfer under VAWA when a safe 
unit is not immediately available, and these policies must ensure that 
requests for internal emergency transfers under VAWA receive, at a 
minimum, any applicable additional priority that housing providers may 
already provide to other types of emergency transfer requests.
    (7) The emergency transfer plan must describe reasonable efforts the 
covered housing provider will take to assist a tenant who wishes to make 
an external emergency transfer when a safe unit is not immediately 
available. The plan must include policies for assisting a tenant who is 
seeking an external

[[Page 129]]

emergency transfer under VAWA out of the covered housing provider's 
program or project, and a tenant who is seeking an external emergency 
transfer under VAWA into the covered housing provider's program or 
project. These policies may include:
    (i) Arrangements, including memoranda of understanding, with other 
covered housing providers to facilitate moves; and
    (ii) Outreach activities to organizations that assist or provide 
resources to victims of domestic violence, dating violence, sexual 
assault, or stalking.
    (8) Nothing may preclude a tenant from seeking an internal emergency 
transfer and an external emergency transfer concurrently if a safe unit 
is not immediately available.
    (9) Where applicable, the emergency transfer plan must describe 
policies for a tenant who has tenant-based rental assistance and who 
meets the requirements of paragraph (e)(2) of this section to move 
quickly with that assistance.
    (10) The emergency transfer plan may require documentation from a 
tenant seeking an emergency transfer, provided that:
    (i) The tenant's submission of a written request to the covered 
housing provider, where the tenant certifies that they meet the criteria 
in paragraph (e)(2)(ii) of this section, shall be sufficient 
documentation of the requirements in paragraph (e)(2) of this section;
    (ii) The covered housing provider may, at its discretion, ask an 
individual seeking an emergency transfer to document the occurrence of 
domestic violence, dating violence, sexual assault, or stalking, in 
accordance with Sec.  5.2007, for which the individual is seeking the 
emergency transfer, if the individual has not already provided 
documentation of that occurrence; and
    (iii) No other documentation is required to qualify the tenant for 
an emergency transfer.
    (11) The covered housing provider must make its emergency transfer 
plan available upon request and, when feasible, must make its plan 
publicly available.
    (12) The covered housing provider must keep a record of all 
emergency transfers requested under its emergency transfer plan, and the 
outcomes of such requests, and retain these records for a period of 
three years, or for a period of time as specified in program 
regulations. Requests and outcomes of such requests must be reported to 
HUD annually.
    (13) Nothing in this paragraph (e) may be construed to supersede any 
eligibility or other occupancy requirements that may apply under a 
covered housing program.



Sec.  5.2007  Documenting the occurrence of domestic violence, dating
violence, sexual assault, or stalking.

    (a) Request for documentation. (1) Under a covered housing program, 
if an applicant or tenant represents to the covered housing provider 
that the individual is a victim of domestic violence, dating violence, 
sexual assault, or stalking entitled to the protections under Sec.  
5.2005, or remedies under Sec.  5.2009, the covered housing provider may 
request, in writing, that the applicant or tenant submit to the covered 
housing provider the documentation specified in paragraph (b)(1) of this 
section.
    (2)(i) If an applicant or tenant does not provide the documentation 
requested under paragraph (a)(1) of this section within 14 business days 
after the date that the tenant receives a request in writing for such 
documentation from the covered housing provider, nothing in Sec.  5.2005 
or Sec.  5.2009, which addresses the protections of VAWA, may be 
construed to limit the authority of the covered housing provider to:
    (A) Deny admission by the applicant or tenant to the covered housing 
program;
    (B) Deny assistance under the covered housing program to the 
applicant or tenant;
    (C) Terminate the participation of the tenant in the covered housing 
program; or
    (D) Evict the tenant, or a lawful occupant that commits a violation 
of a lease.
    (ii) A covered housing provider may, at its discretion, extend the 
14-business-day deadline under paragraph (a)(2)(i) of this section.

[[Page 130]]

    (b) Permissible documentation and submission requirements. (1) In 
response to a written request to the applicant or tenant from the 
covered housing provider, as provided in paragraph (a) of this section, 
the applicant or tenant may submit, as documentation of the occurrence 
of domestic violence, dating violence, sexual assault, or stalking, any 
one of the following forms of documentation, where it is at the 
discretion of the tenant or applicant which one of the following forms 
of documentation to submit:
    (i) The certification form described in Sec.  5.2005(a)(1)(ii); or
    (ii) A document:
    (A) Signed by an employee, agent, or volunteer of a victim service 
provider, an attorney, or medical professional, or a mental health 
professional (collectively, ``professional'') from whom the victim has 
sought assistance relating to domestic violence, dating violence, sexual 
assault, or stalking, or the effects of abuse;
    (B) Signed by the applicant or tenant; and
    (C) That specifies, under penalty of perjury, that the professional 
believes in the occurrence of the incident of domestic violence, dating 
violence, sexual assault, or stalking that is the ground for protection 
and remedies under this subpart, and that the incident meets the 
applicable definition of domestic violence, dating violence, sexual 
assault, or stalking under Sec.  5.2003; or
    (iii) A record of a Federal, State, tribal, territorial or local law 
enforcement agency, court, or administrative agency; or
    (iv) At the discretion of a covered housing provider, a statement or 
other evidence provided by the applicant or tenant.
    (2) If a covered housing provider receives documentation under 
paragraph (b)(1) of this section that contains conflicting information 
(including certification forms from two or more members of a household 
each claiming to be a victim and naming one or more of the other 
petitioning household members as the perpetrator), the covered housing 
provider may require an applicant or tenant to submit third-party 
documentation, as described in paragraphs (b)(1)(ii), (b)(1)(iii), or 
(b)(1)(iv) of this section, within 30 calendar days of the date of the 
request for the third-party documentation.
    (3) Nothing in this paragraph (b) shall be construed to require a 
covered housing provider to request that an individual submit 
documentation of the status of the individual as a victim of domestic 
violence, dating violence, sexual assault, or stalking.
    (c) Confidentiality. Any information submitted to a covered housing 
provider under this section, including the fact that an individual is a 
victim of domestic violence, dating violence, sexual assault, or 
stalking (confidential information), shall be maintained in strict 
confidence by the covered housing provider.
    (1) The covered housing provider shall not allow any individual 
administering assistance on behalf of the covered housing provider or 
any persons within their employ (e.g., contractors) or in the employ of 
the covered housing provider to have access to confidential information 
unless explicitly authorized by the covered housing provider for reasons 
that specifically call for these individuals to have access to this 
information under applicable Federal, State, or local law.
    (2) The covered housing provider shall not enter confidential 
information described in paragraph (c) of this section into any shared 
database or disclose such information to any other entity or individual, 
except to the extent that the disclosure is:
    (i) Requested or consented to in writing by the individual in a 
time-limited release
    (ii) Required for use in an eviction proceeding or hearing regarding 
termination of assistance from the covered program; or
    (iii) Otherwise required by applicable law.
    (d) A covered housing provider's compliance with the protections of 
Sec. Sec.  5.2005 and 5.2009, based on documentation received under this 
section shall not be sufficient to constitute evidence of an 
unreasonable act or omission by the covered housing provider. However, 
nothing in this paragraph (d) of this section shall be construed to 
limit the liability of a covered housing provider

[[Page 131]]

for failure to comply with Sec. Sec.  5.2005 and 5.2009.



Sec.  5.2009  Remedies available to victims of domestic violence,
dating violence, sexual assault, or stalking.

    (a) Lease bifurcation. (1) A covered housing provider may in 
accordance with paragraph (a)(2) of this section, bifurcate a lease, or 
remove a household member from a lease in order to evict, remove, 
terminate occupancy rights, or terminate assistance to such member who 
engages in criminal activity directly relating to domestic violence, 
dating violence, sexual assault, or stalking against an affiliated 
individual or other individual:
    (i) Without regard to whether the household member is a signatory to 
the lease; and
    (ii) Without evicting, removing, terminating assistance to, or 
otherwise penalizing a victim of such criminal activity who is also a 
tenant or lawful occupant.
    (2) A lease bifurcation, as provided in paragraph (a)(1) of this 
section, shall be carried out in accordance with any requirements or 
procedures as may be prescribed by Federal, State, or local law for 
termination of assistance or leases and in accordance with any 
requirements under the relevant covered housing program.
    (b) Reasonable time to establish eligibility for assistance or find 
alternative housing following bifurcation of a lease--(1) Applicability. 
The reasonable time to establish eligibility under a covered housing 
program or find alternative housing is specified in paragraph (b) of 
this section, or alternatively in the program-specific regulations 
governing the applicable covered housing program. Some covered housing 
programs may provide different time frames than are specified in this 
paragraph (b), and in such cases, the program-specific regulations 
govern.
    (2) Reasonable time to establish eligibility assistance or find 
alternative housing. (i) If a covered housing provider exercises the 
option to bifurcate a lease as provided in paragraph (a) of this 
section, and the individual who was evicted or for whom assistance was 
terminated was the eligible tenant under the covered housing program, 
the covered housing provider shall provide to any remaining tenant or 
tenants that were not already eligible a period of 90 calendar days from 
the date of bifurcation of the lease to:
    (A) Establish eligibility for the same covered housing program under 
which the evicted or terminated tenant was the recipient of assistance 
at the time of bifurcation of the lease; or
    (B) Establish eligibility under another covered housing program; or
    (C) Find alternative housing.
    (ii) The 90-calendar-day period provided by paragraph (b)(2) of this 
section will not be available to a remaining household member if the 
statutory requirements for the covered housing program prohibit it. The 
90-day calendar period also will not apply beyond the expiration of a 
lease, unless this is permitted by program regulations. The 90-calendar-
day period is the total period provided to a remaining tenant to 
establish eligibility under the three options provided in paragraphs 
(b)(2)(i)(A), (B), and (C) of this section.
    (iii) The covered housing provider may extend the 90-calendar-day 
period in paragraph (b)(2) of this section up to an additional 60 
calendar days, unless prohibited from doing so by statutory requirements 
of the covered program or unless the time period would extend beyond 
expiration of the lease.
    (c) Efforts to promote housing stability for victims of domestic 
violence, dating violence, sexual assault, or stalking. Covered housing 
providers are encouraged to undertake whatever actions permissible and 
feasible under their respective programs to assist individuals residing 
in their units who are victims of domestic violence, dating violence, 
sexual assault, or stalking to remain in their units or other units 
under the covered housing program or other covered housing providers, 
and for the covered housing provider to bear the costs of any transfer, 
where permissible.



Sec.  5.2011  Effect on other laws.

    (a) Nothing in this subpart shall be construed to supersede any 
provision of any Federal, State, or local law that provides greater 
protection than this section for victims of domestic violence, dating 
violence, sexual assault, or stalking.

[[Page 132]]

    (b) All applicable fair housing and civil rights statutes and 
requirements apply in the implementation of VAWA requirements. See Sec.  
5.105(a).



PART 6_NONDISCRIMINATION IN PROGRAMS AND ACTIVITIES RECEIVING ASSISTANCE
UNDER TITLE I OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974
--Table of Contents



                      Subpart A_General Provisions

Sec.
6.1 Purpose.
6.2 Applicability.
6.3 Definitions.
6.4 Discrimination prohibited.
6.5 Discrimination prohibited--employment.
6.6 Records to be maintained.

                          Subpart B_Enforcement

6.10 Compliance information.
6.11 Conduct of investigations.
6.12 Procedure for effecting compliance.
6.13 Hearings and appeals.

    Authority: 42 U.S.C. 3535(d) 42 U.S.C. 5309.

    Source: 64 FR 3797, Jan. 25, 1999, unless otherwise noted.



                      Subpart A_General Provisions



Sec.  6.1  Purpose.

    The purpose of this part is to implement the provisions of section 
109 of title I of the Housing and Community Development Act of 1974 
(Title I) (42 U.S.C. 5309). Section 109 provides that no person in the 
United States shall, on the ground of race, color, national origin, 
religion, or sex, be excluded from participation in, be denied the 
benefits of, or be subjected to discrimination under any program or 
activity funded in whole or in part with Federal financial assistance. 
Section 109 does not directly prohibit discrimination on the bases of 
age or disability, and the regulations in this part 6 do not apply to 
age or disability discrimination in Title I programs. Instead, section 
109 directs that the prohibitions against discrimination on the basis of 
age under the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) (Age 
Discrimination Act) and the prohibitions against discrimination on the 
basis of disability under section 504 of the Rehabilitation Act of 1973 
(29 U.S.C. 794) (Section 504) apply to programs or activities funded in 
whole or in part with Federal financial assistance. Thus, the 
regulations of 24 CFR part 8, which implement Section 504 for HUD 
programs, and the regulations of 24 CFR part 146, which implement the 
Age Discrimination Act for HUD programs, apply to disability and age 
discrimination in Title I programs.



Sec.  6.2  Applicability.

    (a) This part applies to any program or activity funded in whole or 
in part with funds under title I of the Housing and Community 
Development Act of 1974, including Community Development Block Grants--
Entitlement, State and HUD-Administered Small Cities, and Section 108 
Loan Guarantees; Urban Development Action Grants; Economic Development 
Initiative Grants; and Special Purpose Grants.
    (b) The provisions of this part and sections 104(b)(2) and 109 of 
Title I that relate to discrimination on the basis of race shall not 
apply to the provision of Federal financial assistance by grantees under 
this title to the Hawaiian Homelands (42 U.S.C. 5309).
    (c) The provisions of this part and sections 104(b)(2) and 109 of 
Title I that relate to discrimination on the basis of race and national 
origin shall not apply to the provision of Federal financial assistance 
to grant recipients under the Native American Housing Assistance and 
Self-Determination Act (25 U.S.C. 4101). See also, 24 CFR 1003.601(a).



Sec.  6.3  Definitions.

    The terms Department, HUD, and Secretary are defined in 24 CFR part 
5. Other terms used in this part 6 are defined as follows:
    Act means the Housing and Community Development Act of 1974, as 
amended (42 U.S.C. 5301-5320).
    Assistant Secretary means the Assistant Secretary for Fair Housing 
and Equal Opportunity.
    Award Official means the HUD official who has been delegated the 
Secretary's authority to implement a

[[Page 133]]

Title I funded program and to make grants under that program.
    Complete complaint means a written statement that contains the 
complainant's name and address, identifies the Recipient against which 
the complaint is made, and describes the Recipient's alleged 
discriminatory action in sufficient detail to inform HUD of the nature 
and date of the alleged violation of section 109. It shall be signed by 
the complainant or by someone authorized to do so on his or her behalf. 
Complaints filed on behalf of classes or third parties shall describe or 
identify (by name, if possible) the alleged victims of discrimination.
    Federal financial assistance means: (1) Any assistance made 
available under title I of the Housing and Community Development Act of 
1974, as amended, and includes income generated from such assistance, 
and any grant, loan, contract, or any other arrangement, in the form of:
    (i) Funds;
    (ii) Services of Federal personnel; or
    (iii) Real or personal property or any interest in or use of such 
property, including:
    (A) Transfers or leases of the property for less than fair market 
value or for reduced consideration; and
    (B) Proceeds from a subsequent transfer or lease of the property if 
the Federal share of its fair market value is not returned to the 
Federal Government.
    (2) Any assistance in the form of proceeds from loans guaranteed 
under section 108 of the Act, but does not include assistance made 
available through direct Federal procurement contracts or any other 
contract of insurance or guaranty.
    Program or activity (funded in whole or in part) means all of the 
operations of--
    (1)(i) A department, agency, special purpose district, or other 
instrumentality of a State or local government; or
    (ii) The entity of a State or local government that distributes 
Federal financial assistance, and each department or agency (and each 
State or local government entity) to which the assistance is extended, 
in the case of assistance to a State or local government;
    (2)(i) A college, university, or other post-secondary institution, 
or a public system of higher education; or
    (ii) A local educational agency (as defined in section 198(a)(10) of 
the Elementary and Secondary Education Act of 1965), system of 
vocational education or other school system;
    (3)(i) An entire corporation, partnership, or other private 
organization, or an entire sole proprietorship--
    (A) If assistance is extended to the corporation, partnership, 
private organization, or sole proprietorship as a whole; or
    (B) Which is principally engaged in the business of providing 
education, health care, housing, social services, or parks and 
recreation; or
    (ii) The entire plant or other comparable, geographically separate 
facility to which Federal financial assistance is extended, in the case 
of any other corporation, partnership, private organization, or sole 
proprietorship; or
    (4) Any other entity that is described in paragraphs (1), (2), or 
(3) of this definition, any part of which is extended Federal financial 
assistance.
    Recipient means any State, political subdivision of any State, or 
instrumentality of any State or political subdivision; any public or 
private agency, institution, organization, or other entity; or any 
individual, in any State, to whom Federal financial assistance is 
extended, directly or through another Recipient, for any program or 
activity, or who otherwise participates in carrying out such program or 
activity, including any successor, assign, or transferee thereof. 
Recipient does not include any ultimate beneficiary under any program or 
activity.
    Responsible Official means the Assistant Secretary for Fair Housing 
and Equal Opportunity or his or her designee.
    Section 109 means section 109 of the Housing and Community 
Development Act of 1974, as amended.
    Title I means title I of the Housing and Community Development Act 
of 1974 (42 U.S.C. 5301-5321).



Sec.  6.4  Discrimination prohibited.

    (a) Section 109 requires that no person in the United States shall 
be excluded from participation in, be denied

[[Page 134]]

the benefits of, or be subjected to discrimination under any program or 
activity funded in whole or in part with Federal financial assistance, 
on the grounds of race, color, national origin, religion, or sex.
    (1) A Recipient under any program or activity to which this part 
applies may not, directly or through contractual, licensing, or other 
arrangements, take any of the following actions on the grounds of race, 
color, national origin, religion, or sex:
    (i) Deny any individual any facilities, services, financial aid, or 
other benefits provided under the program or activity;
    (ii) Provide any facilities, services, financial aid, or other 
benefits that are different, or are provided in a different form, from 
that provided to others under the program or activity;
    (iii) Subject an individual to segregated or separate treatment in 
any facility, or in any matter of process related to the receipt of any 
service or benefit under the program or activity;
    (iv) Restrict an individual's access to, or enjoyment of, any 
advantage or privilege enjoyed by others in connection with facilities, 
services, financial aid or other benefits under the program or activity;
    (v) Treat an individual differently from others in determining 
whether the individual satisfies any admission, enrollment, eligibility, 
membership, or other requirements or conditions that the individual must 
meet in order to be provided any facilities, services, or other benefit 
provided under the program or activity;
    (vi) Deny an individual an opportunity to participate in a program 
or activity as an employee;
    (vii) Aid or otherwise perpetuate discrimination against an 
individual by providing Federal financial assistance to an agency, 
organization, or person that discriminates in providing any housing, 
aid, benefit, or service;
    (viii) Otherwise limit an individual in the enjoyment of any right, 
privilege, advantage, or opportunity enjoyed by other individuals 
receiving the housing, aid, benefit, or service;
    (ix) Use criteria or methods of administration that have the effect 
of subjecting persons to discrimination or have the effect of defeating 
or substantially impairing accomplishment of the objectives of the 
program or activity with respect to persons of a particular race, color, 
national origin, religion, or sex; or
    (x) Deny a person the opportunity to participate as a member of 
planning or advisory boards.
    (2) In determining the site or location of housing, accommodations, 
or facilities, a Recipient may not make selections that have the effect 
of excluding persons from, denying them the benefits of, or subjecting 
them to discrimination on the ground of race, color, national origin, 
religion, or sex. The Recipient may not make selections that have the 
purpose or effect of defeating or substantially impairing the 
accomplishment of the objectives of section 109 and of this part 6.
    (3)(i) In administering a program or activity in which the Recipient 
has discriminated on the grounds of race, color, national origin, 
religion or sex, the Recipient must take any necessary steps to overcome 
the effects of prior discrimination.
    (ii) In the absence of discrimination, a Recipient, in administering 
a program or activity, may take any steps necessary to overcome the 
effects of conditions that resulted in limiting participation by persons 
of a particular race, color, national origin, religion, or sex.
    (iii) After a finding of noncompliance, or after a Recipient has 
reasonable cause to believe that discrimination has occurred, a 
Recipient shall not be prohibited by this section from taking any action 
eligible under subpart C of 24 CFR part 570 to ameliorate an imbalance 
in benefits, services or facilities provided to any geographic area or 
specific group of persons within its jurisdiction, where the purpose of 
such action is to remedy discriminatory practices or usage.
    (iv)(A) Notwithstanding anything to the contrary in this part, 
nothing contained in this section shall be construed to prohibit any 
Recipient from maintaining or constructing separate living facilities or 
restroom facilities for the different sexes in order to protect personal 
privacy or modesty concerns. Furthermore, selectivity on the

[[Page 135]]

basis of sex is not prohibited when institutional or custodial services 
can, in the interest of personal privacy or modesty, only be performed 
by a member of the same sex as those receiving the services.
    (B) Section 109 of the Act does not directly prohibit discrimination 
on the basis of age or disability, but directs that the prohibitions 
against discrimination on the basis of age under the Age Discrimination 
Act and the prohibitions against discrimination on the basis of 
disability under Section 504 apply to Title I programs and activities. 
Accordingly, for programs or activities receiving Federal financial 
assistance, the regulations in this part 6 apply to discrimination on 
the bases of race, color, national origin, religion, or sex; the 
regulations at 24 CFR part 8 apply to discrimination on the basis of 
disability; and the regulations at 24 CFR part 146 apply to 
discrimination on the basis of age.
    (b) [Reserved]



Sec.  6.5  Discrimination prohibited--employment.

    (a) General. A Recipient may not, under any program or activity 
funded in whole or in part with Federal financial assistance, directly 
or through contractual agents or other arrangements including contracts 
and consultants, subject a person to discrimination in the terms and 
conditions of employment. Terms and conditions of employment include 
advertising, interviewing, selection, promotion, demotion, transfer, 
recruitment and advertising, layoff or termination, pay or other 
compensation, including benefits, and selection for training.
    (b) Determination of compliance status. The Assistant Secretary will 
follow the procedures set forth in this part and 29 CFR part 1691 and 
look to the substantive guidelines and policy of the Equal Employment 
Opportunity Commission when reviewing employment practices under Section 
109.



Sec.  6.6  Records to be maintained.

    (a) General. Recipients shall maintain records and data as required 
by 24 CFR 91.105, 91.115, 570.490, and 570.506.
    (b) Employment. Recipients shall maintain records and data as 
required by the Equal Employment Opportunity Commission at 29 CFR part 
1600.
    (c) Recipients shall make available such records and any supporting 
documentation upon request of the Responsible Official.

(Approved by the Office of Management and Budget under control numbers 
2506-0117 and 2506-0077)



                          Subpart B_Enforcement



Sec.  6.10  Compliance information.

    (a) Cooperation and assistance. The Responsible Official and the 
Award Official will provide assistance and guidance to Recipients to 
help them comply voluntarily with this part.
    (b) Access to data and other sources of information. Each Recipient 
shall permit access by authorized representatives of HUD to its 
facilities, books, records, accounts, minutes and audio tapes of 
meetings, personnel, computer disks and tapes, and other sources of 
information as may be pertinent to a determination of whether the 
Recipient is complying with this part. Where information required of a 
Recipient is in the exclusive possession of any other agency, 
institution, or person, and that agency, institution, or person fails or 
refuses to furnish this information, the Recipient shall so certify in 
any requested report and shall set forth what efforts it has made to 
obtain the information. Failure or refusal to furnish pertinent 
information (whether maintained by the Recipient or some other agency, 
institution, or person) without a credible reason for the failure or 
refusal will be considered to be noncompliance under this part.
    (c) Compliance data. Each Recipient shall keep records and submit to 
the Responsible Official, timely, complete, and accurate data at such 
times and in such form as the Responsible Official may determine to be 
necessary to ascertain whether the Recipient has complied or is 
complying with this part.
    (d) Notification to employees, beneficiaries, and participants. Each 
Recipient shall make available to employees, participants, 
beneficiaries, and other interested persons information regarding the 
provisions of this part and its applicability to the program or activity 
under which the Recipient receives

[[Page 136]]

Federal financial assistance and make such information available to them 
in such manner as the Responsible Official finds necessary to apprise 
such persons of the protections against discrimination assured them by 
Section 109 and this part.



Sec.  6.11  Conduct of investigations.

    (a) Filing a complaint--(1) Who may file. Any person who believes 
that he or she has been subjected to discrimination prohibited by this 
part may file, or may have an authorized representative file on his or 
her behalf, a complaint with the Responsible Official. Any person who 
believes that any specific class of persons has been subjected to 
discrimination prohibited by this part and who is a member of that class 
or who is the authorized representative of a member of that class may 
file a complaint with the Responsible Official.
    (2) Confidentiality. Generally, the Responsible Official shall hold 
in confidence the identity of any person submitting a complaint, unless 
the person submits written authorization otherwise. However, an 
exception to maintaining confidentiality of the identity of the person 
may be required to carry out the purposes of this part, including the 
conduct of any investigation, hearing, or proceeding under this part.
    (3) When to file. Complaints shall be filed within 180 days of the 
alleged act of discrimination, unless the Responsible Official waives 
this time limit for good cause. For purposes of determining when a 
complaint is filed under this part, a complaint mailed to the 
Responsible Official via the U.S. Postal Service will be deemed filed on 
the date it is postmarked. A complaint delivered to the Responsible 
Official in any other manner will be deemed filed on the date it is 
received by the Responsible Official.
    (4) Where to file complaints. Complaints must be in writing, signed, 
addressed to the Responsible Official, and filed with (mailed to or 
otherwise delivered to) the Office of Fair Housing and Equal Opportunity 
at any HUD Office.
    (5) Content of complaints. Each complaint should contain the 
complainant's name, address, and phone number; a description or name, if 
available, of the Recipient alleged to have violated this part; an 
address where the violation occurred; and a description of the 
Recipient's alleged discriminatory action in sufficient detail to inform 
the Responsible Official of the nature and date of the alleged violation 
of this part.
    (6) Amendments to complaints. Amendments to complaints, such as 
clarification and amplification of allegations in a complaint or the 
addition of other Recipients, may be made by the complainant or the 
complainant's authorized representative at any time while the complaint 
is being considered, and any amendment shall be deemed to be made as of 
the original filing date.
    (7) Notification. To the extent practicable, the Responsible 
Official will notify the complainant and the Recipient of the 
Responsible Official's receipt of a complaint within 10 calendar days of 
receipt of a complete complaint. If the Responsible Official receives a 
complaint that is not complete, the Responsible Official will notify the 
complainant and specify the additional information that is needed to 
make the complaint complete. If the complainant fails to complete the 
complaint, the Responsible Official will close the complaint without 
prejudice and notify the complainant. When a complete complaint has been 
received, the Responsible Official, or his or her designee, will assess 
the complaint for acceptance, rejection, or referral to an appropriate 
Federal agency within 20 calendar days.
    (8) Resolution of complaints. After the acceptance of a complete 
complaint, the Responsible Official will investigate the complaint, 
attempt informal resolution, and, if resolution is not achieved, the 
Responsible Official will notify the Recipient and complainant, to the 
extent practicable within 180 days of the receipt of the complete 
complaint, of the results of the investigation in a letter of findings 
sent by certified mail, return receipt requested, containing the 
following:
    (i) Findings of fact and a finding of compliance or noncompliance;
    (ii) A description of an appropriate remedy for each violation 
believed to exist; and

[[Page 137]]

    (iii) A notice of the right of the Recipient and the complainant to 
request a review of the letter of findings by the Responsible Official. 
A copy of the final investigative report will be made available upon 
request.
    (b) Compliance reviews--(1) Periodic compliance reviews. The 
Responsible Official may periodically review the practices of Recipients 
to determine whether they are complying with this part and may conduct 
on-site reviews. The Responsible Official will initiate an on-site 
review by sending to the Recipient a letter advising the Recipient of 
the practices to be reviewed; the programs affected by the review; and 
the opportunity, at any time before a final determination, to submit 
information that explains, validates, or otherwise addresses the 
practices under review. In addition, the Award Official will include, in 
normal program compliance reviews and monitoring procedures, appropriate 
actions to review and monitor compliance with general or specific 
program requirements designed to implement the requirements of this 
part.
    (2) Time period of the review. (i) For the Entitlement program, 
compliance reviews will cover the three years before the date of the 
review.
    (ii) For the Urban Development Action Grant (UDAG) program, the 
compliance review is applicable only to UDAG loan repayments or other 
payments or revenues classified as program income. UDAG repayments or 
other payments or revenues classified as miscellaneous revenue are not 
subject to compliance review under this part. (See 24 CFR 570.500(a).) 
The compliance review will cover the time period that program income is 
being repaid.
    (iii) For the State and HUD-Administered Small Cities programs, the 
compliance review will cover the four years before the date of the 
review.
    (iv) For all other programs, the time period covered by the review 
will be four years before the date of the review.
    (v) On a case-by-case basis, at the discretion of the Responsible 
Official, the above time frames for review can be expanded where facts 
or allegations warrant further investigation.
    (3) Early compliance resolution. On the last day of the on-site 
visit, after the compliance review, the Recipient will be given an 
opportunity to supplement the record. Additionally, a prefinding 
conference may be held and a summary of the proposed findings may be 
presented to the Recipient. In those instances where the issue(s) cannot 
be resolved at a prefinding conference or with the supplemental 
information, a meeting will be scheduled to attempt a voluntary 
settlement.
    (4) Notification of findings. (i) The Assistant Secretary will 
notify the Recipient of Federal financial assistance of the results of 
the compliance review in a letter of findings sent by certified mail, 
return receipt requested.
    (ii) Letter of findings. The letter of findings will include the 
findings of fact and the conclusions of law; a description of a remedy 
for each violation found; and a notice that a copy of HUD's final report 
concerning its compliance review will be made available, upon request, 
to the Recipient.
    (c) Right to a review of the letter of findings. (1) Within 30 days 
of receipt of the letter of findings, any party may request that a 
review be made of the letter of findings, by mailing or delivering to 
the Responsible Official, Room 5100, Office of Fair Housing and Equal 
Opportunity, HUD, Washington, DC 20410, a written statement of the 
reasons why the letter of findings should be modified.
    (2) The Responsible Official will send by certified mail, return 
receipt requested, a copy of the request for review to all parties. 
Parties other than the party requesting review and HUD shall have 20 
days from receipt to respond to the request for review.
    (3) The Responsible Official will either sustain or modify the 
letter of findings or require that further investigation be conducted, 
within 60 days of the request for review. The Responsible Official's 
decision shall constitute the formal determination of compliance or 
noncompliance.
    (4) If no party requests that the letter of findings be reviewed, 
the Responsible Official, within 14 calendar days of the expiration of 
the time period in paragraph (a)(9)(i) of this section, will send a 
formal written determination of

[[Page 138]]

compliance or noncompliance to all parties.
    (d) Voluntary compliance time limits. The Recipient will have 10 
calendar days from receipt of the letter of findings of noncompliance, 
or such other reasonable time as specified in the letter, within which 
to agree, in writing, to come into voluntary compliance or to contact 
the Responsible Official for settlement discussions. If the Recipient 
fails to meet this deadline, HUD will proceed in accordance with 
Sec. Sec.  6.12 and 6.13.
    (e) Informal resolution/voluntary compliance--(1) General. It is the 
policy of HUD to encourage the informal resolution of matters. A 
complaint or a compliance review may be resolved by informal means at 
any time. If a letter of findings is issued, and the letter makes a 
finding of noncompliance, the Responsible Official will attempt to 
resolve the matter through a voluntary compliance agreement.
    (2) Objectives of informal resolution/voluntary compliance. In 
attempting informal resolution, the Responsible Official will attempt to 
achieve a just resolution of the matter and to obtain assurances, where 
appropriate, that the Recipient will satisfactorily remedy any 
violations of the rights of any complainant, and will take such action 
as will assure the elimination of any violation of this part or the 
prevention of the occurrence of such violation in the future. If a 
finding of noncompliance has been made, the terms of such an informal 
resolution shall be reduced to a written voluntary compliance agreement, 
signed by the Recipient and the Responsible Official, and be made part 
of the file. Such voluntary compliance agreements shall seek to protect 
the interests of the complainant (if any), other persons similarly 
situated, and the public.
    (3) Right to file a private civil action. At any time in the 
process, the complainant has the right to file a private civil action. 
If the complainant does so, the Responsible Official has the discretion 
to administratively close the investigation or continue the 
investigation, if he or she decides that it is in the best interests of 
the Department to do so. If the Responsible Official makes a finding of 
noncompliance and an agreement to voluntarily comply is not obtained 
from the Recipient, the procedures at Sec. Sec.  6.12 and 6.13 for 
effecting compliance shall be followed.
    (f) Intimidatory or retaliatory acts prohibited. No Recipient or 
other person shall intimidate, threaten, coerce, or discriminate against 
any person for the purpose of interfering with any right or privilege 
secured by this part, or because he or she has made a complaint, 
testified, assisted, or participated in any manner in an investigation, 
compliance review, proceeding, or hearing under this part.



Sec.  6.12  Procedure for effecting compliance.

    (a) Whenever the Assistant Secretary determines that a Recipient of 
Federal financial assistance has failed to comply with Section 109(a) or 
this part and voluntary compliance efforts have failed, the Secretary 
will notify the Governor of the State or the Chief Executive Officer of 
the unit of general local government of the findings of noncompliance 
and will request that the Governor or the Chief Executive Officer secure 
compliance. If within a reasonable period of time, not to exceed 60 
days, the Governor or the Chief Executive Officer fails or refuses to 
secure compliance, the Secretary will:
    (1) Refer the matter to the Attorney General with a recommendation 
that an appropriate civil action be instituted;
    (2) Exercise the powers and functions provided by Title VI;
    (3) Terminate or reduce payments under Title I, or limit the 
availability of payments under Title I to programs or activities not 
affected by the failure to comply; or
    (4) Take such other actions as may be provided by law, including, 
but not limited to, the initiation of proceedings under 2 CFR part 2424 
or any applicable proceeding under State or local law.
    (b) Termination, reduction, or limitation of the availability of 
Title I payments. No order terminating, reducing, or limiting the 
availability of Title I payments under this part shall become effective 
until:

[[Page 139]]

    (1) The Secretary has notified the Governor of the State or the 
Chief Executive Officer of the unit of general local government of the 
Recipient's failure to comply in accordance with paragraph (a) of this 
section and of the termination, reduction or limitation of the 
availability of Title I payments to be taken;
    (2) The Secretary has determined that compliance cannot be secured 
by voluntary means;
    (3) The Recipient has been extended an opportunity for a hearing in 
accordance with Sec.  6.13(a); and
    (4) A final agency notice or decision has been rendered in 
accordance with paragraph (c) of this section or 24 CFR part 180.
    (c) If a Recipient does not respond to the notice of opportunity for 
a hearing or does not elect to proceed with a hearing within 20 days of 
the issuance of the Secretary's actions listed in paragraphs (b)(1), (2) 
and (3) of this section, then the Secretary's approval of the 
termination, reduction or limitation of the availability of Title I 
payments is considered a final agency notice and the Recipient may seek 
judicial review in accordance with section 111(c) of the Act.

[64 FR 3797, Jan. 25, 1999, as amended at 72 FR 73491, Dec. 27, 2007]



Sec.  6.13  Hearings and appeals.

    (a) When a Recipient requests an opportunity for a hearing, in 
accordance with Sec.  6.12(b)(3), the General Counsel will follow the 
notification procedures set forth in 24 CFR 180.415. The hearing, and 
any petition for review, will be conducted in accordance with the 
procedures set forth in 24 CFR part 180.
    (b) After a hearing is held and a final agency decision is rendered 
under 24 CFR part 180, the Recipient may seek judicial review in 
accordance with section 111(c) of the Act.



PART 8_NONDISCRIMINATION BASED ON HANDICAP IN FEDERALLY ASSISTED 
PROGRAMS AND ACTIVITIES OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
--Table of Contents



                      Subpart A_General Provisions

Sec.
8.1 Purpose.
8.2 Applicability.
8.3 Definitions.
8.4 Discrimination prohibited.
8.5 [Reserved]
8.6 Communications.

                          Subpart B_Employment

8.10 General prohibitions against employment discrimination.
8.11 Reasonable accommodation.
8.12 Employment criteria.
8.13 Preemployment inquiries.

                     Subpart C_Program Accessibility

8.20 General requirement concerning program accessibility.
8.21 Non-housing facilities.
8.22 New construction--housing facilities.
8.23 Alterations of existing housing facilities.
8.24 Existing housing programs.
8.25 Public housing and multi-family Indian housing.
8.26 Distribution of accessible dwelling units.
8.27 Occupancy of accessible dwelling units.
8.28 Housing certificate and housing voucher programs.
8.29 Homeownership programs (sections 235(i) and 235(j), Turnkey III and 
          Indian housing mutual self-help programs).
8.30 Rental rehabilitation program.
8.31 Historic properties.
8.32 Accessibility standards.
8.33 Housing adjustments.

                          Subpart D_Enforcement

8.50 Assurances required.
8.51 Self-evaluation.
8.52 Remedial and affirmative action.
8.53 Designation of responsible employee and adoption of grievance 
          procedures.
8.54 Notice.
8.55 Compliance information.
8.56 Conduct of investigations.
8.57 Procedure for effecting compliance.
8.58 Hearings.

    Authority: 29 U.S.C. 794; 42 U.S.C. 3535(d) and 5309.

    Source: 53 FR 20233, June 2, 1988, unless otherwise noted.

[[Page 140]]



                      Subpart A_General Provisions



Sec.  8.1  Purpose.

    (a) The purpose of this part is to effectuate section 504 of the 
Rehabilitation Act of 1973, as amended (29 U.S.C 794), to the end that 
no otherwise qualified individual with handicaps in the United States 
shall, solely by reason of his or her handicap, be excluded from the 
participation in, be denied the benefits of, or be subjected to 
discrimination under any program or activity receiving Federal financial 
assistance from the Department of Housing and Urban Development. This 
part also implements section 109 of the Housing and Community 
Development Act of 1974, as amended (42 U.S.C. 5309). This part does not 
effectuate section 504 as it applies to any program or activity 
conducted by the Department. Compliance with this part does not assure 
compliance with requirements for accessibility by physically-handicapped 
persons imposed under the Architectural Barriers Act of 1968 (42 U.S.C. 
4151-4157; 24 CFR part 40).
    (b) The policies and standards for compliance established by this 
part are established in contemplation of, and with a view to enforcement 
through, the Department's administration of programs or activities 
receiving Federal financial assistance and the administrative procedures 
described in subparts D and E (including, without limitation, judicial 
enforcement under Sec.  8.57(a)).



Sec.  8.2  Applicability.

    This part applies to all applicants for, and recipients of, HUD 
assistance in the operation of programs or activities receiving such 
assistance. Such assistance includes, but is not limited to, that which 
is listed in appendix A of this part.



Sec.  8.3  Definitions.

    As used in this part:
    Accessible, when used with respect to the design, construction, or 
alteration of a facility or a portion of a facility other than an 
individual dwelling unit, means that the facility or portion of the 
facility when designed, constructed or altered, can be approached, 
entered, and used by individuals with physical handicaps. The phrase 
accessible to and usable by is synonomous with accessible.
    Accessible, when used with respect to the design, construction, or 
alteration of an individual dwelling unit, means that the unit is 
located on an accessible route and when designed, constructed, altered 
or adapted can be approached, entered, and used by individuals with 
physical handicaps. A unit that is on an accessible route and is 
adaptable and otherwise in compliance with the standards set forth in 
Sec.  8.32 is accessible within the meaning of this paragraph. When a 
unit in an existing facility which is being made accessible as a result 
of alterations is intended for use by a specific qualified individual 
with handicaps (e.g., a current occupant of such unit or of another unit 
under the control of the same recipient, or an applicant on a waiting 
list), the unit will be deemed accessible if it meets the requirements 
of applicable standards that address the particular disability or 
impairment of such person.
    Accessible route means a continuous unobstructed path connecting 
accessible elements and spaces in a building or facility that complies 
with the space and reach requirements of applicable standards prescribed 
by Sec.  8.32. An accessible route that serves only accessible units 
occupied by persons with hearing or vision impairments need not comply 
with those requirements intended to effect accessibility for persons 
with mobility impairments.
    Adaptability means the ability of certain elements of a dwelling 
unit, such as kitchen counters, sinks, and grab bars, to be added to, 
raised, lowered, or otherwise altered, to accommodate the needs of 
persons with or without handicaps, or to accommodate the needs of 
persons with different types or degrees of disability. For example, in a 
unit adaptable for a hearing-impaired person, the wiring for visible 
emergency alarms may be installed but the alarms need not be installed 
until such time as the unit is made ready for occupancy by a hearing-
impaired person.
    Alteration means any change in a facility or its permanent fixtures 
or

[[Page 141]]

equipment. It includes, but is not limited to, remodeling, renovation, 
rehabilitation, reconstruction, changes or rearrangements in structural 
parts and extraordinary repairs. It does not include normal maintenance 
or repairs, reroofing, interior decoration, or changes to mechanical 
systems.
    Applicant for assistance means one who submits an application, 
request, plan, or statement required to be approved by a Department 
official or by a primary recipient as a condition of eligibility for 
Federal financial assistance. An application means such a request, plan 
or statement.
    Auxiliary aids means services or devices that enable persons with 
impaired sensory, manual, or speaking skills to have an equal 
opportunity to participate in, and enjoy the benefits of, programs or 
activities receiving Federal financial assistance. For example, 
auxiliary aids for persons with impaired vision may include readers, 
Brailled materials, audio recordings, and other similar services and 
devices. Auxiliary aids for persons with impaired hearing may include 
telephone handset amplifiers, telephones compatible with hearing aids, 
telecommunication devices for deaf persons (TDD's), interpreters, 
notetakers, written materials, and other similar services and devices.
    Department or HUD means the Department of Housing and Urban 
Development.
    Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, rolling stock or other real or 
personal property or interest in the property.
    Federal financial assistance means any assistance provided or 
otherwise made available by the Department through any grant, loan, 
contract or any other arrangement, in the form of:
    (a) Funds;
    (b) Services of Federal personnel; or
    (c) Real or personal property or any interest in or use of such 
property, including:
    (1) Transfers or leases of the property for less than fair market 
value or for reduced consideration; and
    (2) Proceeds from a subsequent transfer or lease of the property if 
the Federal share of its fair market value is not returned to the 
Federal Government.
    Federal financial assistance includes community development funds in 
the form of proceeds from loans guaranteed under section 108 of the 
Housing and Community Development Act of 1974, as amended, but does not 
include assistance made available through direct Federal procurement 
contracts or payments made under these contracts or any other contract 
of insurance or guaranty.
    Handicap means any condition or characteristic that renders a person 
an individual with handicaps.
    Historic preservation programs or activities means programs or 
activities receiving Federal financial assistance that have preservation 
of historic properties as a primary purpose.
    Historic properties means those properties that are listed or are 
eligible for listing in the National Register of Historic Places, or 
such properties designated as historic under a statute of the 
appropriate State or local government body.
    Individual with handicaps means any person who has a physical or 
mental impairment that substantially limits one or more major life 
activities; has a record of such an impairment; or is regarded as having 
such an impairment. For purposes of employment, this term does not 
include: Any individual who is an alcoholic or drug abuser whose current 
use of alcohol or drugs prevents the individual from performing the 
duties of the job in question, or whose employment, by reason of current 
alcohol or drug abuse, would constitute a direct threat to property or 
the safety of others; or any individual who has a currently contagious 
disease or infection and who, by reason of such disease or infection, 
would constitute a direct threat to the health or safety of other 
individuals or who, by reason of the currently contagious disease or 
infection, is unable to perform the duties of the job. For purposes of 
other programs and activities, the term does not include any individual 
who is an alcoholic or drug abuser whose current use of alcohol or drugs 
prevents the individual from participating in the program or activity in 
question, or whose

[[Page 142]]

participation, by reason of such current alcohol or drug abuse, would 
constitute a direct threat to property or the safety of others. As used 
in this definition, the phrase:
    (a) Physical or mental impairment includes:
    (1) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genito-urinary; hemic and lymphatic; skin; and endocrine; or
    (2) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities. The term physical or mental impairment 
includes, but is not limited to, such diseases and conditions as 
orthopedic, visual, speech and hearing impairments, cerebral palsy, 
autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart 
disease, diabetes, mental retardation, emotional illness, drug addiction 
and alcoholism.
    (b) Major life activities means functions such as caring for one's 
self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning and working.
    (c) Has a record of such an impairment means has a history of, or 
has been misclassified as having, a mental or physical impairment that 
substantially limits one or more major life activities.
    (d) Is regarded as having an impairment means:
    (1) Has a physical or mental impairment that does not substantially 
limit one or more major life activities but that is treated by a 
recipient as constituting such a limitation;
    (2) Has a physical or mental impairment that substantially limits 
one or more major life activities only as a result of the attitudes of 
others toward such impairment; or
    (3) Has none of the impairments defined in paragraph (a) of this 
section but is treated by a recipient as having such an impairment.
    Multifamily housing project means a project containing five or more 
dwelling units.
    Primary recipient means a person, group, organization, State or 
local unit of government that is authorized or required to extend 
Federal financial assistance to another recipient for the purpose of 
carrying out a program or activity.
    Program or activity means all of the operations of:
    (a)(1) A department, agency, special purpose district, or other 
instrumentality of a State or of a local government; or
    (2) The entity of such State or local government that distributes 
such assistance and each such department or agency (and each other State 
or local government entity) to which the assistance is extended, in the 
case of assistance to a State or local government;
    (b)(1) A college, university, or other post-secondary institution, 
or a public system of higher education; or
    (2) A local educational agency (as defined in section 198(a)(10) of 
the Elementary and Secondary Education Act of 1965), system of 
vocational education, or other school system;
    (c)(1) An entire corporation, partnership, or other private 
organization, or an entire sole proprietorship--
    (i) If assistance is extended to such corporation, partnership, 
private organization, or sole proprietorship as a whole; or
    (ii) Which is principally engaged in the business of providing 
education, health care, housing, social services, or parks and 
recreation; or
    (2) The entire plant or other comparable, geographically separate 
facility to which Federal financial assistance is extended, in the case 
of any other corporation, partnership, private organization, or sole 
proprietorship; or
    (d) Any other entity which is established by two or more of the 
entities described in paragraphs (a), (b), or (c) of this section;

any part of which is extended Federal financial assistance.
    Project means the whole of one or more residential structures and 
appurtenant structures, equipment, roads, walks, and parking lots which 
are covered by a single contract for Federal financial assistance or 
application for assistance, or are treated as a whole

[[Page 143]]

for processing purposes, whether or not located on a common site.
    Qualified individual with handicaps means:
    (a) With respect to employment, an individual with handicaps who, 
with reasonable accommodation, can perform the essential functions of 
the job in question; and
    (b) With respect to any non-employment program or activity which 
requires a person to perform services or to achieve a level of 
accomplishment, an individual with handicaps who meets the essential 
eligibility requirements and who can achieve the purpose of the program 
or activity without modifications in the program or activity that the 
recipient can demonstrate would result in a fundamental alteration in 
its nature; or
    (c) With respect to any other non-employment program or activity, an 
individual with handicaps who meets the essential eligibility 
requirements for participation in, or receipt of benefits from, that 
program or activity. Essential eligibility requirements include stated 
eligibility requirements such as income as well as other explicit or 
implicit requirements inherent in the nature of the program or activity, 
such as requirements that an occupant of multifamily housing be capable 
of meeting the recipient's selection criteria and be capable of 
complying with all obligations of occupancy with or without supportive 
services provided by persons other than the recipient. For example, a 
chronically mentally ill person whose particular condition poses a 
significant risk of substantial interference with the safety or 
enjoyment of others or with his or her own health or safety in the 
absence of necessary supportive services may be qualified for occupancy 
in a project where such supportive services are provided by the 
recipient as part of the assisted program. The person may not be 
qualified for a project lacking such services.
    Recipient means any State or its political subdivision, any 
instrumentality of a State or its political subdivision, any public or 
private agency, institution, organization, or other entity, or any 
person to which Federal financial assistance is extended for any program 
or activity directly or through another recipient, including any 
successor, assignee, or transferee of a recipient, but excluding the 
ultimate beneficiary of the assistance. An entity or person receiving 
housing assistance payments from a recipient on behalf of eligible 
families under a housing assistance payments program or a voucher 
program is not a recipient or subrecipient merely by virtue of receipt 
of such payments.
    Replacement cost of the completed facility means the current cost of 
construction and equipment for a newly constructed housing facility of 
the size and type being altered. Construction and equipment costs do not 
include the cost of land, demolition, site improvements, non-dwelling 
facilities and administrative costs for project development activities.
    Secretary means the Secretary of Housing and Urban Development.
    Section 504 means section 504 of the Rehabilitation Act of 1973, as 
amended, 29 U.S.C. 794, as it applies to programs or activities 
receiving Federal financial assistance.
    Substantial impairment means a significant loss of the integrity of 
finished materials, design quality, or special character resulting from 
a permanent alteration.

[53 FR 20233, June 2, 1988; 54 FR 8188, Feb. 27, 1989]



Sec.  8.4  Discrimination prohibited.

    (a) No qualified individual with handicaps shall, solely on the 
basis of handicap, be excluded from participation in, be denied the 
benefits of, or otherwise be subjected to discrimination under any 
program or activity that receives Federal financial assistance from the 
Department.
    (b)(1) A recipient, in providing any housing, aid, benefit, or 
service in a program or activity that receives Federal financial 
assistance from the Department may not, directly or through contractual, 
licensing, or other arrangements, solely on the basis of handicap:
    (i) Deny a qualified individual with handicaps the opportunity to 
participate in, or benefit from, the housing, aid, benefit, or service;

[[Page 144]]

    (ii) Afford a qualified individual with handicaps an opportunity to 
participate in, or benefit from, the housing, aid, benefit, or service 
that is not equal to that afforded to others;
    (iii) Provide a qualified individual with handicaps with any 
housing, aid, benefit, or service that is not as effective in affording 
the individual an equal opportunity to obtain the same result, to gain 
the same benefit, or to reach the same level of achievement as that 
provided to others;
    (iv) Provide different or separate housing, aid, benefits, or 
services to individuals with handicaps or to any class of individuals 
with handicaps from that provided to others unless such action is 
necessary to provide qualified individuals with handicaps with housing, 
aid, benefits, or services that are as effective as those provided to 
others.
    (v) Aid or perpetuate discrimination against a qualified individual 
with handicaps by providing significant assistance to an agency, 
organization, or person that discriminates on the basis of handicap in 
providing any housing, aid, benefit, or service to beneficiaries in the 
recipient's federally assisted program or activity;
    (vi) Deny a qualified individual with handicaps the opportunity to 
participate as a member of planning or advisory boards;
    (vii) Deny a dwelling to an otherwise qualified buyer or renter 
because of a handicap of that buyer or renter or a person residing in or 
intending and eligible to reside in that dwelling after it is sold, 
rented or made available; or
    (viii) Otherwise limit a qualified individual with handicaps in the 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
other qualified individuals receiving the housing, aid, benefit, or 
service.
    (2) For purposes of this part, housing, aids, benefits, and 
services, to be equally effective, are not required to produce the 
identical result or level of achievement for individuals with handicaps 
and non-handicapped persons, but must afford individuals with handicaps 
equal opportunity to obtain the same result, to gain the same benefit, 
or to reach the same level of achievement.
    (3) A recipient may not deny a qualified individual with handicaps 
the opportunity to participate in any federally assisted program or 
activity that is not separate or different despite the existence of 
permissibly separate or different programs or activities.
    (4) In any program or activity receiving Federal financial 
assistance from the Department, a recipient may not, directly or through 
contractual or other arrangements, utilize criteria or methods of 
administration the purpose or effect of which would:
    (i) Subject qualified individuals with handicaps to discrimination 
solely on the basis of handicap;
    (ii) Defeat or substantially impair the accomplishment of the 
objectives of the recipient's federally assisted program or activity for 
qualified individuals with a particular handicap involved in the program 
or activity, unless the recipient can demonstrate that the criteria or 
methods of administration are manifestly related to the accomplishment 
of an objective of a program or activity; or
    (iii) Perpetuate the discrimination of another recipient if both 
recipients are subject to common administrative control or are agencies 
of the same State.
    (5) In determining the site or location of a federally assisted 
facility, an applicant for assistance or a recipient may not make 
selections the purpose or effect of which would:
    (i) Exclude qualified individuals with handicaps from, deny them the 
benefits of, or otherwise subject them to discrimination under, any 
program or activity that receives Federal financial assistance from the 
Department, or
    (ii) Defeat or substantially impair the accomplishment of the 
objectives of the program or activity with respect to qualified 
individuals with handicaps.
    (6) As used in this section, the housing, aid, benefit, or service 
provided under a program or activity receiving Federal financial 
assistance includes any housing, aid, benefit, or service provided in or 
through a facility that has been constructed, altered, leased or rented, 
or otherwise acquired, in whole or in part, with Federal financial 
assistance.

[[Page 145]]

    (c)(1) Non-handicapped persons may be excluded from the benefits of 
a program if the program is limited by Federal statute or executive 
order to individuals with handicaps. A specific class of individuals 
with handicaps may be excluded from a program if the program is limited 
by Federal statute or Executive order to a different class of 
individuals.
    (2) Certain Department programs operate under statutory definitions 
of handicapped person that are more restrictive than the definition of 
individual with handicaps contained in Sec.  8.3 (see appendix B). Those 
definitions are not superseded or otherwise affected by this regulation.
    (d) Recipients shall administer programs and activities receiving 
Federal financial assistance in the most integrated setting appropriate 
to the needs of qualified individuals with handicaps.
    (e) The obligation to comply with this part is not obviated or 
alleviated by any State or local law or other requirement that, based on 
handicap, imposes inconsistent or contradictory prohibitions or limits 
upon the eligibility of qualified individuals with handicaps to receive 
services or to practice any occupation or profession.
    (f) The enumeration of specific forms of prohibited discrimination 
in paragraphs (b) through (e) of this section does not limit the general 
prohibition in paragraph (a) of this section.

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988]



Sec.  8.5  [Reserved]



Sec.  8.6  Communications.

    (a) The recipient shall take appropriate steps to ensure effective 
communication with applicants, beneficiaries, and members of the public.
    (1) The recipient shall furnish appropriate auxiliary aids where 
necessary to afford an individual with handicaps an equal opportunity to 
participate in, and enjoy the benefits of, a program or activity 
receiving Federal financial assistance.
    (i) In determining what auxiliary aids are necessary, the recipient 
shall give primary consideration to the requests of the individual with 
handicaps.
    (ii) The recipient is not required to provide individually 
prescribed devices, readers for personal use or study, or other devices 
of a personal nature.
    (2) Where a recipient communicates with applicants and beneficiaries 
by telephone, telecommunication devices for deaf persons (TDD's) or 
equally effective communication systems shall be used.
    (b) The recipient shall adopt and implement procedures to ensure 
that interested persons (including persons with impaired vision or 
hearing) can obtain information concerning the existence and location of 
accessible services, activities, and facilities.
    (c) This section does not require a recipient to take any action 
that the recipient can demonstrate would result in a fundamental 
alteration in the nature of a program or activity or in undue financial 
and administrative burdens. If an action would result in such an 
alteration or burdens, the recipient shall take any other action that 
would not result in such an alteration or such burdens but would 
nevertheless ensure that, to the maximum extent possible, individuals 
with handicaps receive the benefits and services of the program or 
activity receiving HUD assistance.



                          Subpart B_Employment



Sec.  8.10  General prohibitions against employment discrimination.

    (a) No qualified individual with handicaps shall, solely on the 
basis of handicap, be subjected to discrimination in employment under 
any program or activity that receives Federal financial assistance from 
the Department.
    (b) A recipient may not limit, segregate, or classify applicants or 
employees in any way that adversely affects their opportunities or 
status because of handicap.
    (c) The prohibition against discrimination in employment applies to 
the following activities:
    (1) Recruitment, advertising, and the processing of applications for 
employment;
    (2) Hiring, upgrading, promotion, award of tenure, demotion, 
transfer, layoff, termination, right of return

[[Page 146]]

from layoff, injury or illness, and rehiring;
    (3) Rates of pay or any other form of compensation and changes in 
compensation;
    (4) Job assignments, job classifications, organizational structures, 
position descriptions, lines of progression, and seniority lists;
    (5) Leaves of absence, sick leave, or any other leave;
    (6) Fringe benefits available by virtue of employment, whether or 
not administered by the recipient;
    (7) Selection and financial support for training, including 
apprenticeship, professional meetings, conferences, and other related 
activities, and selection for leaves of absence for training;
    (8) Employer sponsored activities, including social or recreational 
programs; and
    (9) Any other term, condition, or privilege of employment.
    (d) A recipient may not participate in a contractual or other 
relationship that has the effect of subjecting qualified applicants with 
handicaps or employees with handicaps to discrimination prohibited by 
this subpart. The relationships referred to in this paragraph (d) 
include relationships with employment and referral agencies, labor 
unions, organizations providing or administering fringe benefits to 
employees of the recipient, and organizations providing training and 
apprenticeship programs.



Sec.  8.11  Reasonable accommodation.

    (a) A recipient shall make reasonable accommodation to the known 
physical or mental limitations of an otherwise qualified applicant with 
handicaps or employee with handicaps, unless the recipient can 
demonstrate that the accommodation would impose an undue hardship on the 
operation of its program.
    (b) Reasonable accommodation may include:
    (1) Making facilities used by employees accessible to and usable by 
individuals with handicaps and
    (2) Job restructuring, job relocation, part-time or modified work 
schedules, acquisitions or modification of equipment or devices, the 
provision of readers or interpreters, and other similar actions.
    (c) In determining, under paragraph (a) of this section, whether an 
accommodation would impose an undue hardship on the operation of a 
recipient's program, factors to be considered include:
    (1) The overall size of the recipient's program with respect to 
number of employees, number and type of facilities, and size of budget;
    (2) The type of the recipient's operation, including the composition 
and structure of the recipient's workforce; and
    (3) The nature and cost of the accommodation needed.
    (d) A recipient may not deny any employment opportunity to a 
qualified handicapped employee or applicant if the basis for the denial 
is the need to make reasonable accommodation to the physical or mental 
limitations of the employee or applicant.



Sec.  8.12  Employment criteria.

    (a) A recipient may not use any employment test or other selection 
criterion that screens out or tends to screen out individuals with 
handicaps or any class of individuals with handicaps unless:
    (1) The recipient demonstrates that the test score or other 
selection criterion, as used by the recipient, is job-related for the 
position in question; and
    (2) The appropriate HUD official demonstrates that alternative job-
related tests or criteria that tend to screen out fewer individuals with 
handicaps are unavailable.
    (b) A recipient shall select and administer tests concerning 
employment to ensure that, when administered to an applicant or employee 
who has a handicap that impairs sensory, manual, or speaking skills, the 
test results accurately reflect the applicant's or employee's job 
skills, aptitude, or whatever other factor the test purports to measure, 
rather than the applicant's or employee's impaired sensory, manual, or 
speaking skills (except where those skills are the factors that the test 
purports to measure).

[[Page 147]]



Sec.  8.13  Preemployment inquiries.

    (a) Except as provided in paragraphs (b) and (c) of this section, a 
recipient may not make a preemployment inquiry or conduct a 
preemployment medical examination of an applicant to determine whether 
the applicant is an individual with handicaps or the nature or severity 
of a handicap. A recipient may, however, make preemployment inquiry into 
an applicant's ability to perform job-related functions.
    (b) When a recipient is undertaking affirmative action efforts, 
voluntary or otherwise, the recipient may invite applicants for 
employment to indicate whether and to what extent they are handicapped, 
if the following conditions are met:
    (1) The recipient states clearly on any written questionnaire used 
for this purpose, or makes clear orally if no written questionnaire is 
used, that the information requested is intended for use solely in 
connection with its remedial action obligations, or its voluntary or 
affirmative action efforts; and
    (2) The recipient states clearly that the information is being 
requested on a voluntary basis, that it will be kept confidential (as 
provided in paragraph (d) of this section), that refusal to provide the 
information will not subject the applicant or employee to any adverse 
treatment, and that the information will be used only in accordance with 
this part.
    (c) Nothing in this section shall prohibit a recipient from 
conditioning an offer of employment on the results of a medical 
examination conducted before the employee's entrance on duty if all 
entering employees in that category of job classification must take such 
an examination regardless of handicap, and the results of such 
examination are used only in accordance with the requirements of this 
part.
    (d) Information obtained under this section concerning the medical 
condition or history of the applicant is to be collected and maintained 
on separate forms that are accorded confidentiality as medical records, 
except that:
    (1) Supervisors and managers may be informed of restrictions on the 
work or duties of individuals with handicaps and informed of necessary 
accommodations;
    (2) First aid and safety personnel may be informed if the condition 
might require emergency treatment; and
    (3) Government officials investigating compliance with section 504 
shall be provided relevant information upon request.



                     Subpart C_Program Accessibility



Sec.  8.20  General requirement concerning program accessibility.

    Except as otherwise provided in Sec. Sec.  8.21(c)(1), 8.24(a), 
8.25, and 8.31, no qualified individual with handicaps shall, because a 
recipient's facilities are inaccessible to or unusable by individuals 
with handicaps, be denied the benefits of, be excluded from 
participation in, or otherwise be subjected to discrimination under any 
program or activity that receives Federal financial assistance.



Sec.  8.21  Non-housing facilities.

    (a) New construction. New non-housing facilities shall be designed 
and constructed to be readily accessible to and usable by individuals 
with handicaps.
    (b) Alterations to facilities. Alterations to existing non-housing 
facilities shall, to the maximum extent feasible, be made to be readily 
accessible to and usable by individuals with handicaps. For purposes of 
this paragraph, the phrase to the maximum extent feasible shall not be 
interpreted as requiring that a recipient make a non-housing facility, 
or element thereof, accessible if doing so would impose undue financial 
and administrative burdens on the operation of the recipient's program 
or activity.
    (c) Existing non-housing facilities--(1) General. A recipient shall 
operate each non-housing program or activity receiving Federal financial 
assistance so that the program or activity, when viewed in its entirety, 
is readily accessible to and usable by individuals with handicaps. This 
paragraph does not--
    (i) Necessarily require a recipient to make each of its existing 
non-housing facilities accessible to and usable by individuals with 
handicaps;
    (ii) In the case of historic preservation programs or activities, 
require the recipient to take any action that would

[[Page 148]]

result in a substantial impairment of significant historic features of 
an historic property; or
    (iii) Require a recipient to take any action that it can demonstrate 
would result in a fundamental alteration in the nature of its program or 
activity or in undue financial and administrative burdens. If an action 
would result in such an alteration or such burdens, the recipient shall 
take any action that would not result in such an alteration or such 
burdens but would nevertheless ensure that individuals with handicaps 
receive the benefits and services of the program or activity.
    (2) Methods--(i) General. A recipient may comply with the 
requirements of this section in its programs and activities receiving 
Federal financial assistance through such means as location of programs 
or services to accessible facilities or accessible portions of 
facilities, assignment of aides to beneficiaries, home visits, the 
addition or redesign of equipment (e.g., appliances or furnishings) 
changes in management policies or procedures, acquisition or 
construction of additional facilities, or alterations to existing 
facilities on a selective basis, or any other methods that result in 
making its program or activity accessible to individuals with handicaps. 
A recipient is not required to make structural changes in existing 
facilities where other methods are effective in achieving compliance 
with this section. In choosing among available methods for meeting the 
requirements of this section, the recipient shall give priority to those 
methods that offer programs and activities to qualified individuals with 
handicaps in the most integrated setting appropriate.
    (ii) Historic preservation programs or activities. In meeting the 
requirements of Sec.  8.21(c) in historic preservation programs or 
activities, a recipient shall give priority to methods that provide 
physical access to individuals with handicaps. In cases where a physical 
alteration to an historic property is not required because of Sec.  
8.21(c)(1)(ii) or (iii), alternative methods of achieving program 
accessibility include using audio-visual materials and devices to depict 
those portions of an historic property that cannot otherwise be made 
accessible; assigning persons to guide individuals with handicaps into 
or through portions of historic properties that cannot otherwise be made 
accessible; or adopting other innovative methods.
    (3) Time period for compliance. The recipient shall comply with the 
obligations established under this section within sixty days of July 11, 
1988, except that where structural changes in facilities are undertaken, 
such changes shall be made within three years of July 11, 1988, but in 
any event as expeditiously as possible.
    (4) Transition plan. If structural changes to non-housing facilities 
will be undertaken to achieve program accessibility, a recipient shall 
develop, within six months of July 11, 1988, a transition plan setting 
forth the steps necessary to complete such changes. The plan shall be 
developed with the assistance of interested persons, including 
individuals with handicaps or organizations representing individuals 
with handicaps. A copy of the transition plan shall be made available 
for public inspection. The plan shall, at a minimum--
    (i) Identify physical obstacles in the recipient's facilities that 
limit the accessibility of its programs or activities to individuals 
with handicaps;
    (ii) Describe in details the methods that will be used to make the 
facilities accessible;
    (iii) Specify the schedule for taking the steps necessary to achieve 
compliance with this section and, if the time period of the transition 
plan is longer than one year, identify steps that will be taken during 
each year of the transition period;
    (iv) Indicate the official responsible for implementation of the 
plan; and
    (v) Identify the persons or groups with whose assistance the plan 
was prepared.

(Approved by the Office of Management and Budget under control number 
2529-0034)

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988, as amended at 54 
FR 37645, Sept. 12, 1989]



Sec.  8.22  New construction--housing facilities.

    (a) New multifamily housing projects (including public housing and 
Indian

[[Page 149]]

housing projects as required by Sec.  8.25) shall be designed and 
constructed to be readily accessible to and usable by individuals with 
handicaps.
    (b) Subject to paragraph (c) of this section, a minimum of five 
percent of the total dwelling units or at least one unit in a 
multifamily housing project, whichever is greater, shall be made 
accessible for persons with mobility impairments. A unit that is on an 
accessible route and is adaptable and otherwise in compliance with the 
standards set forth in Sec.  8.32 is accessible for purposes of this 
section. An additional two percent of the units (but not less than one 
unit) in such a project shall be accessible for persons with hearing or 
vision impairments.
    (c) HUD may prescribe a higher percentage or number than that 
prescribed in paragraph (b) of this section for any area upon request 
therefor by any affected recipient or by any State or local government 
or agency thereof based upon demonstration to the reasonable 
satisfaction of HUD of a need for a higher percentage or number, based 
on census data or other available current data (including a currently 
effective Housing Assistance Plan or Comprehensive Homeless Assistance 
Plan), or in response to evidence of a need for a higher percentage or 
number received in any other manner. In reviewing such request or 
otherwise assessing the existence of such needs, HUD shall take into 
account the expected needs of eligible persons with and without 
handicaps.

[53 FR 20233, June 2, 1988, as amended at 56 FR 920, Jan. 9, 1991]



Sec.  8.23  Alterations of existing housing facilities.

    (a) Substantial alteration. If alterations are undertaken to a 
project (including a public housing project as required by Sec.  
8.25(a)(2)) that has 15 or more units and the cost of the alterations is 
75 percent or more of the replacement cost of the completed facility, 
then the provisions of Sec.  8.22 shall apply.
    (b) Other alterations. (1) Subject to paragraph (b)(2) of this 
section, alterations to dwelling units in a multifamily housing project 
(including public housing) shall, to the maximum extent feasible, be 
made to be readily accessible to and usable by individuals with 
handicaps. If alterations of single elements or spaces of a dwelling 
unit, when considered together, amount to an alteration of a dwelling 
unit, the entire dwelling unit shall be made accessible. Once five 
percent of the dwelling units in a project are readily accessible to and 
usable by individuals with mobility impairments, then no additional 
elements of dwelling units, or entire dwelling units, are required to be 
accessible under this paragraph. Alterations to common areas or parts of 
facilities that affect accessibility of existing housing facilities 
shall, to the maximum extent feasible, be made to be accessible to and 
usable by individuals with handicaps. For purposes of this paragraph, 
the phrase to the maximum extent feasible shall not be interpreted as 
requiring that a recipient (including a PHA) make a dwelling unit, 
common area, facility or element thereof accessible if doing so would 
impose undue financial and administrative burdens on the operation of 
the multifamily housing project.
    (2) HUD may prescribe a higher percentage or number than that 
prescribed in paragraph (b)(1) of this section for any area upon request 
therefor by any affected recipient or by any State or local government 
or agency thereof based upon demonstration to the reasonable 
satisfaction of HUD of a need for a higher percentage or number, based 
on census data or other available current data (including a currently 
effective Housing Assistance Plan or Comprehensive Homeless Assistance 
Plan), or in response to evidence of a need for a higher percentage or 
number received in any other manner. In reviewing such request or 
otherwise assessing the existence of such needs, HUD shall take into 
account the expected needs of eligible persons with and without 
handicaps.



Sec.  8.24  Existing housing programs.

    (a) General. A recipient shall operate each existing housing program 
or activity receiving Federal financial assistance so that the program 
or activity, when viewed in its entirety, is

[[Page 150]]

readily accessible to and usable by individuals with handicaps. This 
paragraph does not--
    (1) Necessarily require a recipient to make each of its existing 
facilities accessible to and usable by individuals with handicaps;
    (2) Require a recipient to take any action that it can demonstrate 
would result in a fundamental alteration in the nature of its program or 
activity or in undue financial and administrative burdens. If an action 
would result in such an alteration or such burdens, the recipient shall 
take any action that would not result in such an alteration or such 
burdens but would nevertheless ensure that individuals with handicaps 
receive the benefits and services of the program or activity.
    (b) Methods. A recipient may comply with the requirements of this 
section through such means as reassignment of services to accessible 
buildings, assignment of aides to beneficiaries, provision of housing or 
related services at alternate accessible sites, alteration of existing 
facilities and construction of new facilities, or any other methods that 
result in making its programs or activities readily accessible to and 
usable by individuals with handicaps. A recipient is not required to 
make structural changes in existing housing facilities where other 
methods are effective in achieving compliance with this section or to 
provide supportive services that are not part of the program. In 
choosing among available methods for meeting the requirements of this 
section, the recipient shall give priority to those methods that offer 
programs and activities to qualified individuals with handicaps in the 
most integrated setting appropriate.
    (c) Time period for compliance. The recipient shall comply with the 
obligations established under this section within sixty days of July 11, 
1988 except that--
    (1) In a public housing program where structural changes in 
facilities are undertaken, such changes shall be made within the 
timeframes established in Sec.  8.25(c).
    (2) In other housing programs, where structural changes in 
facilities are undertaken, such changes shall be made within three years 
of July 11, 1988, but in any event as expeditiously as possible.
    (d) Transition plan and time period for structural changes. Except 
as provided in Sec.  8.25(c), in the event that structural changes to 
facilities will be undertaken to achieve program accessibility, a 
recipient shall develop, within six months of July 11, 1988, a 
transition plan setting forth the steps necessary to complete such 
changes. The plan shall be developed with the assistance of interested 
persons, including individuals with handicaps or organizations 
representing individuals with handicaps. A copy of the transition plan 
shall be made available for public inspection. The plan shall, at a 
minimum--
    (1) Identify physical obstacles in the recipient's facilities that 
limit the accessibility of its programs or activities to individuals 
with handicaps;
    (2) Describe in detail the methods that will be used to make the 
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve 
compliance with this section and, if the time period of the transition 
plan is longer than one year, identify steps that will be taken during 
each year of the transition period;
    (4) Indicate the official responsible for implementation of the 
plan; and
    (5) Identify the persons or groups with whose assistance the plan 
was prepared.

(Approved by the Office of Management and Budget under control number 
2529-0034)

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988, as amended at 54 
FR 37645, Sept. 12, 1989]



Sec.  8.25  Public housing and multi-family Indian housing.

    (a) Development and alteration of public housing and multi-family 
Indian housing. (1) The requirements of Sec.  8.22 shall apply to all 
newly constructed public housing and multi-family Indian housing.
    (2) The requirements of Sec.  8.23 shall apply to public housing and 
multi-family Indian housing developed through rehabilitation and to the 
alteration of public housing and multi-family Indian housing.

[[Page 151]]

    (3) In developing public housing and multi-family Indian housing 
through the purchase of existing properties PHAs and IHAs shall give 
priority to facilities which are readily accessible to and usable by 
individuals with handicaps.
    (b) Existing public housing and multi-family Indian housing--
general. The requirements of Sec.  8.24(a) shall apply to public housing 
and multi-family Indian housing programs.
    (c) Existing public housing and multi-family Indian housing--needs 
assessment and transition plan. As soon as possible, each PHA (for the 
purpose of this paragraph, this includes an Indian Housing Authority) 
shall assess, on a PHA-wide basis, the needs of current tenants and 
applicants on its waiting list for accessible units and the extent to 
which such needs have not been met or cannot reasonably be met within 
four years through development, alterations otherwise contemplated, or 
other programs administered by the PHA (e.g., Section 8 Moderate 
Rehabilitation or Section 8 Existing Housing or Housing Vouchers). If 
the PHA currently has no accessible units or if the PHA or HUD 
determines that information regarding the availability of accessible 
units has not been communicated sufficiently so that, as a result, the 
number of eligible qualified individuals with handicaps on the waiting 
list is not fairly representative of the number of such persons in the 
area, the PHA's assessment shall include the needs of eligible qualified 
individuals with handicaps in the area. If the PHA determines, on the 
basis of such assessment, that there is no need for additional 
accessible dwelling units or that the need is being or will be met 
within four years through other means, such as new construction, Section 
8 or alterations otherwise contemplated, no further action is required 
by the PHA under this paragraph. If the PHA determines, on the basis of 
its needs assessment, that alterations to make additional units 
accessible must be made so that the needs of eligible qualified 
individuals with handicaps may be accommodated proportionally to the 
needs of non-handicapped individuals in the same categories, then the 
PHA shall develop a transition plan to achieve program accessibility. 
The PHA shall complete the needs assessment and transition plan, if one 
is necessary, as expeditiously as possible, but in any event no later 
than two years after July 11, 1988. The PHA shall complete structural 
changes necessary to achieve program accessibility as soon as possible 
but in any event no later than four years after July 11, 1988. The 
Assistant Secretary for Fair Housing and Equal Opportunity and the 
Assistant Secretary for Public and Indian Housing may extend the four 
year period for a period not to exceed two years, on a case-by-case 
determination that compliance within that period would impose undue 
financial and administrative burdens on the operation of the recipient's 
public housing and multi-family Indian housing program. The Secretary or 
the Undersecretary may further extend this time period in extraordinary 
circumstances, for a period not to exceed one year. The plan shall be 
developed with the assistance of interested persons including 
individuals with handicaps or organizations representing individuals 
with handicaps. A copy of the needs assessment and transition plan shall 
be made available for public inspection. The transition plan shall, at a 
minimum--
    (1) Identify physical obstacles in the PHA's facilities (e.g., 
dwelling units and common areas) that limit the accessibility of its 
programs or activities to individuals with handicaps;
    (2) Describe in detail the methods that will be used to make the 
PHA's facilities accessible. A PHA may, if necessary, provide in its 
plan that it will seek HUD approval, under 24 CFR part 968, of a 
comprehensive modernization program to meet the needs of eligible 
individuals with handicaps;
    (3) Specify the schedule for taking the steps necessary to achieve 
compliance with this section and, if the time of the transition plan is 
longer than one year, identify steps that will be taken during each year 
of the transition period;
    (4) Indicate the official responsible for implementation of the 
plan; and

[[Page 152]]

    (5) Identify the persons or groups with whose assistance the plan 
was prepared.

(Approved by the Office of Management and Budget under control number 
2529-0034)

[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989; 
56 FR 920, Jan. 9, 1991]



Sec.  8.26  Distribution of accessible dwelling units.

    Accessible dwelling units required by Sec.  8.22, 8.23, 8.24 or 8.25 
shall, to the maximum extent feasible and subject to reasonable health 
and safety requirements, be distributed throughout projects and sites 
and shall be available in a sufficient range of sizes and amenities so 
that a qualified individual with handicaps' choice of living 
arrangements is, as a whole, comparable to that of other persons 
eligible for housing assistance under the same program. This provision 
shall not be construed to require provision of an elevator in any 
multifamily housing project solely for the purpose of permitting 
location of accessible units above or below the accessible grade level.



Sec.  8.27  Occupancy of accessible dwelling units.

    (a) Owners and managers of multifamily housing projects having 
accessible units shall adopt suitable means to assure that information 
regarding the availability of accessible units reaches eligible 
individuals with handicaps, and shall take reasonable nondiscriminatory 
steps to maximize the utilization of such units by eligible individuals 
whose disability requires the accessibility features of the particular 
unit. To this end, when an accessible unit becomes vacant, the owner or 
manager before offering such units to a non-handicapped applicant shall 
offer such unit:
    (1) First, to a current occupant of another unit of the same 
project, or comparable projects under common control, having handicaps 
requiring the accessibility features of the vacant unit and occupying a 
unit not having such features, or, if no such occupant exists, then
    (2) Second, to an eligible qualified applicant on the waiting list 
having a handicap requiring the accessibility features of the vacant 
unit.
    (b) When offering an accessible unit to an applicant not having 
handicaps requiring the accessibility features of the unit, the owner or 
manager may require the applicant to agree (and may incorporate this 
agreement in the lease) to move to a non-accessible unit when available.



Sec.  8.28  Housing certificate and housing voucher programs.

    (a) In carrying out the requirements of this subpart, a recipient 
administering a Section 8 Existing Housing Certificate program or a 
housing voucher program shall:
    (1) In providing notice of the availability and nature of housing 
assistance for low-income families under program requirements, adopt 
suitable means to assure that the notice reaches eligible individuals 
with handicaps;
    (2) In its activities to encourage participation by owners, include 
encouragement of participation by owners having accessible units;
    (3) When issuing a Housing Certificate or Housing Voucher to a 
family which includes an individual with handicaps include a current 
listing of available accessible units known to the PHA and, if 
necessary, otherwise assist the family in locating an available 
accessible dwelling unit;
    (4) Take into account the special problem of ability to locate an 
accessible unit when considering requests by eligible individuals with 
handicaps for extensions of Housing Certificates or Housing Vouchers; 
and
    (5) If necessary as a reasonable accommodation for a person with 
disabilities, approve a family request for an exception rent under Sec.  
982.504(b)(2) for a regular tenancy under the Section 8 certificate 
program so that the program is readily accessible to and usable by 
persons with disabilities.
    (b) In order to ensure that participating owners do not discriminate 
in the recipient's federally assisted program, a recipient shall enter 
into a

[[Page 153]]

HUD-approved contract with participating owners, which contract shall 
include necessary assurances of nondiscrimination.

[53 FR 20233, June 2, 1988, as amended at 63 FR 23853, Apr. 30, 1998]



Sec.  8.29  Homeownership programs (sections 235(i) and 235(j),
Turnkey III and Indian housing mutual self-help programs).

    Any housing units newly constructed or rehabilitated for purchase or 
single family (including semi-attached and attached) units to be 
constructed or rehabilitated in a program or activity receiving Federal 
financial assistance shall be made accessible upon request of the 
prospective buyer if the nature of the handicap of an expected occupant 
so requires. In such case, the buyer shall consult with the seller or 
builder/sponsor regarding the specific design features to be provided. 
If accessibility features selected at the option of the homebuyer are 
ones covered by the standards prescribed by Sec.  8.32, those features 
shall comply with the standards prescribed in Sec.  8.32. The buyer 
shall be permitted to depart from particular specifications of these 
standards in order to accommodate his or her specific handicap. The cost 
of making a facility accessible under this paragraph may be included in 
the mortgage amount within the allowable mortgage limits, where 
applicable. To the extent such costs exceed allowable mortgage limits, 
they may be passed on to the prospective homebuyer, subject to maximum 
sales price limitations (see 24 CFR 235.320.)



Sec.  8.30  Rental rehabilitation program.

    Each grantee or state recipient in the rental rehabilitation program 
shall, subject to the priority in 24 CFR 511.10(l) and in accordance 
with other requirements in 24 CFR part 511, give priority to the 
selection of projects that will result in dwelling units being made 
readily accessible to and usable by individuals with handicaps.

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988]



Sec.  8.31  Historic properties.

    If historic properties become subject to alterations to which this 
part applies the requirements of Sec.  4.1.7 of the standards of Sec.  
8.32 of this part shall apply, except in the case of the Urban 
Development Action Grant (UDAG) program. In the UDAG program the 
requirements of 36 CFR part 801 shall apply. Accessibility to historic 
properties subject to alterations need not be provided if such 
accessibility would substantially impair the significant historic 
features of the property or result in undue financial and administrative 
burdens.



Sec.  8.32  Accessibility standards.

    (a) Effective as of July 11, 1988, design, construction, or 
alteration of buildings in conformance with sections 3-8 of the Uniform 
Federal Accessibility Standards (UFAS) shall be deemed to comply with 
the requirements of Sec. Sec.  8.21, 8.22, 8.23, and 8.25 with respect 
to those buildings. Departures from particular technical and scoping 
requirements of the UFAS by the use of other methods are permitted where 
substantially equivalent or greater access to and usability of the 
building is provided. The alteration of housing facilities shall also be 
in conformance with additional scoping requirements contained in this 
part. Persons interested in obtaining a copy of the UFAS are directed to 
Sec.  40.7 of this title.
    (b) For purposes of this section, section 4.1.6(1)(g) of UFAS shall 
be interpreted to exempt from the requirements of UFAS only mechanical 
rooms and other spaces that, because of their intended use, will not 
require accessibility to the public or beneficiaries or result in the 
employment or residence therein of individuals with physical handicaps.
    (c) This section does not require recipients to make building 
alterations that have little likelihood of being accomplished without 
removing or altering a load-bearing structural member.
    (d) For purposes of this section, section 4.1.4(11) of UFAS may not 
be used to waive or lower the minimum of five percent accessible units 
required by Sec.  8.22(b) or to apply the minimum only to projects of 15 
or more dwelling units.
    (e) Except as otherwise provided in this paragraph, the provisions 
of Sec. Sec.  8.21 (a) and (b), 8.22 (a) and (b), 8.23, 8.25(a)

[[Page 154]]

(1) and (2), and 8.29 shall apply to facilities that are designed, 
constructed or altered after July 11, 1988. If the design of a facility 
was commenced before July 11, 1988, the provisions shall be followed to 
the maximum extent practicable, as determined by the Department. For 
purposes of this paragraph, the date a facility is constructed or 
altered shall be deemed to be the date bids for the construction or 
alteration of the facility are solicited. For purposes of the Urban 
Development Action Grant (UDAG) program, the provisions shall apply to 
the construction or alteration of facilities that are funded under 
applications submitted after July 11, 1988. If the UDAG application was 
submitted before July 11, 1988, the provisions shall apply, to the 
maximum extent practicable, as determined by the Department.

[53 FR 20233, June 2, 1988, as amended at 61 FR 5203, Feb. 9, 1996]



Sec.  8.33  Housing adjustments.

    A recipient shall modify its housing policies and practices to 
ensure that these policies and practices do not discriminate, on the 
basis of handicap, against a qualified individual with handicaps. The 
recipient may not impose upon individuals with handicaps other policies, 
such as the prohibition of assistive devices, auxiliary alarms, or 
guides in housing facilities, that have the effect of limiting the 
participation of tenants with handicaps in the recipient's federally 
assisted housing program or activity in violation of this part. Housing 
policies that the recipient can demonstrate are essential to the housing 
program or activity will not be regarded as discriminatory within the 
meaning of this section if modifications to them would result in a 
fundamental alteration in the nature of the program or activity or undue 
financial and administrative burdens.



                          Subpart D_Enforcement



Sec.  8.50  Assurances required.

    (a) Assurances. An applicant for Federal financial assistance for a 
program or activity to which this part applies shall submit an assurance 
to HUD, or in the case of a subrecipient to a primary recipient, on a 
form specified by the responsible civil rights official, that the 
program or activity will be operated in compliance with this part. An 
applicant may incorporate these assurances by reference in subsequent 
applications to the Department.
    (b) Duration of obligation. (1) In the case of Federal financial 
assistance extended in the form of real property or to provide real 
property or structures on the property, the assurance will obligate the 
recipient or, in the case of a subsequent transfer, the transferee, for 
the period during which the real property or structures are used for the 
purpose for which Federal financial assistance is extended or for 
another purpose involving the provision of similar services or benefits.
    (2) In the case of Federal financial assistance extended to provide 
personal property, the assurance will obligate the recipient for the 
period during which it retains ownership or possession of the property.
    (3) In all other cases the assurance will obligate the recipient for 
the period during which Federal financial assistance is extended.
    (c) Covenants. (1) Where Federal financial assistance is provided in 
the form of real property or interest in the property from the 
Department, the instrument effecting or recording this transfer shall 
contain a covenant running with the land to assure nondiscrimination for 
the period during which the real property is used for a purpose for 
which the Federal financial assistance is extended or for another 
purpose involving the provision of similar services or benefits.
    (2) Where no transfer of property is involved but property is 
purchased or improved with Federal financial assistance, the recipient 
shall agree to include the covenant described in paragraph (b)(2) of 
this section in the instrument effecting or recording any subsequent 
transfer of the property.
    (3) Where Federal financial assistance is provided in the form of 
real property or interest in the property from the Department, the 
covenant shall also include a condition coupled

[[Page 155]]

with a right to be reserved by the Department to revert title to the 
property in the event of a breach of the covenant. If a transferee of 
real property proposes to mortgage or otherwise encumber the real 
property as security for financing construction of new, or improvement 
of existing, facilities on the property for the purposes for which the 
property was transferred, the Secretary may, upon request of the 
transferee and if necessary to accomplish such financing and upon such 
conditions as he or she deems appropriate, agree to forbear the exercise 
of such right to revert title for so long as the lien of such mortgage 
or other encumbrance remains effective.



Sec.  8.51  Self-evaluation.

    (a) Each recipient shall, within one year of July 11, 1988, and 
after consultation with interested persons, including individuals with 
handicaps or organizations representing individuals with handicaps:
    (1) Evaluate its current policies and practices to determine 
whether, in whole or in part, they do not or may not meet the 
requirements of this part;
    (2) Modify any policies and practices that do not meet the 
requirements of this part; and
    (3) Take appropriate corrective steps to remedy the discrimination 
revealed by the self-evaluation.
    (b) A recipient that employs fifteen or more persons shall, for at 
least three years following completion of the evaluation required under 
paragraph (a)(1) of this section, maintain on file, make available for 
public inspection, and provide to the responsible civil rights official, 
upon request: (1) A list of the interested persons consulted; (2) a 
description of areas examined and any problems identified; and (3) a 
description of any modifications made and of any remedial steps taken.

(Approved by the Office of Management and Budget under control number 
2529-0034)

[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989]



Sec.  8.52  Remedial and affirmative action.

    (a) Remedial action. (1) If the responsible civil rights official 
finds that a recipient has discriminated against persons on the basis of 
handicap in violation of section 504 or this part, the recipient shall 
take such remedial action as the responsible civil rights official deems 
necessary to overcome the effects of the discrimination.
    (2) The responsible civil rights official may, where necessary to 
overcome the effects of discrimination in violation of section 504 or 
this part, require a recipient to take remedial action--
    (i) With respect to individuals with handicaps who are no longer 
participants in the program but who were participants in the program 
when such discrimination occurred or
    (ii) With respect to individuals with handicaps who would have been 
participants in the program had the discrimination not occurred.
    (b) Voluntary action. A recipient may take nondiscriminatory steps, 
in addition to any action that is required by this part, to overcome the 
effects of conditions that resulted in limited participation in the 
recipient's program or activity by qualified individuals with handicaps.



Sec.  8.53  Designation of responsible employee and adoption of grievance
procedures.

    (a) Designation of responsible employee. A recipient that employs 
fifteen or more persons shall designate at least one person to 
coordinate its efforts to comply with this part.
    (b) Adoption of grievance procedures. A recipient that employees 
fifteen or more persons shall adopt grievance procedures that 
incorporate appropriate due process standards and that provide for the 
prompt and equitable resolution of complaints alleging any action 
prohibited by this part. Such procedures need not be established with 
respect to complaints from applicants for employment or from applicants 
for admission to housing covered by this part.



Sec.  8.54  Notice.

    (a) A recipient that employs fifteen or more persons shall take 
appropriate initial and continuing steps to notify participants, 
beneficiaries, applicants, and employees, including those with impaired 
vision or hearing, and unions or professional organizations holding

[[Page 156]]

collective bargaining or professional agreements with the recipient that 
it does not discriminate on the basis of handicap in violation of this 
part. The notification shall state, where appropriate, that the 
recipient does not discriminate in admission or access to, or treatment 
or employment in, its federally assisted programs and activities. The 
notification shall also include an identification of the responsible 
employee designated pursuant to Sec.  8.53. A recipient shall make the 
initial notification required by this paragraph within 90 days of July 
11, 1988. Methods of initial and continuing notification may include the 
posting of notices, publication in newspapers and magazines, placement 
of notices in recipients' publications, and distribution of memoranda or 
other written communications.
    (b) If a recipient publishes or uses recruitment materials or 
publications containing general information that it makes available to 
participants, beneficiaries, applicants, or employees, it shall include 
in those materials or publications a statement of the policy described 
in paragraph (a) of this section. A recipient may meet the requirement 
of this paragraph either by including appropriate inserts in existing 
materials and publications or by revising and reprinting the materials 
and publications.
    (c) The recipient shall ensure that members of the population 
eligible to be served or likely to be affected directly by a federally 
assisted program who have visual or hearing impairments are provided 
with the information necessary to understand and participate in the 
program. Methods for ensuring participation include, but are not limited 
to, qualified sign language and oral interpreters, readers, or the use 
of taped and Braille materials.



Sec.  8.55  Compliance information.

    (a) Cooperation and assistance. The responsible civil rights 
official and the award official shall, to the fullest extent 
practicable, seek the cooperation of recipients in obtaining compliance 
with this part and shall provide assistance and guidance to recipients 
to help them comply voluntarily with this part.
    (b) Compliance reports. Each recipient shall keep such records and 
submit to the responsible civil rights official or his or her designee 
timely, complete, and accurate compliance reports at such times, and in 
such form and containing such information, as the responsible civil 
rights official or his or her designee may determine to be necessary to 
enable him or her to ascertain whether the recipient has complied or is 
complying with this part. In general, recipients should have available 
for the Department data showing the extent to which individuals with 
handicaps are beneficiaries of federally assisted programs.
    (c) Access to sources of information. Each recipient shall permit 
access by the responsible civil rights official during normal business 
hours to such of its books, records, accounts, and other sources of 
information, and its facilities, as may be pertinent to ascertain 
compliance with this part. Where any information required of a recipient 
is in the exclusive possession of any other agency, institution, or 
person and this agency, institution, or person shall fail or refuse to 
furnish this information, the recipient shall so certify in its report 
and shall set forth what efforts it has made to obtain the information.
    (d) Information to beneficiaries and participants. Each recipient 
shall make available to participants, beneficiaries, and other 
interested persons such information regarding the provisions of this 
part and its applicability to the program or activity under which the 
recipient receives Federal financial assistance, and make such 
information available to them in such manner as the responsible civil 
rights official finds necessary to apprise such persons of the 
protections against discrimination assured them by this part.

(Approved by the Office of Management and Budget under control number 
2529-0034)

[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989]



Sec.  8.56  Conduct of investigations.

    (a) Periodic compliance reviews. The responsible civil rights 
official or designee may periodically review the practices of recipients 
to determine whether they are complying with this part and where he or 
she has a reasonable

[[Page 157]]

basis to do so may conduct on-site reviews. Such basis may include any 
evidence that a problem exists or that programmatic matters exist that 
justify on-site investigation in selected circumstances. The responsible 
civil rights official shall initiate an on-site review by sending to the 
recipient a letter advising the recipient of the practices to be 
reviewed; the programs affected by the review; and the opportunity, at 
any time prior to receipt of a final determination, to make a 
documentary or other submission that explains, validates, or otherwise 
addresses the practices under review. In addition, each award official 
shall include in normal program compliance reviews and monitoring 
procedures appropriate actions to review and monitor compliance with 
general or specific program requirements designed to effectuate the 
requirements of this part.
    (b) Investigations. The responsible civil rights official shall make 
a prompt investigation whenever a compliance review, report, complaint 
or any other information indicates a possible failure to comply with 
this part.
    (c) Filing a complaint--(1) Who may file. Any person who believes 
that he or she has been subjected to discrimination prohibited by this 
part may by himself or herself or by his or her authorized 
representative file a complaint with the responsible civil rights 
official. Any person who believes that any specific class of persons has 
been subjected to discrimination prohibited by this part and who is a 
member of that class or who is the authorized representative of a member 
of that class may file a complaint with the responsible civil rights 
official.
    (2) Confidentiality. The responsible civil rights official shall 
hold in confidence the identity of any person submitting a complaint, 
unless the person submits written authorization otherwise, and except to 
the extent necessary to carry out the purposes of this part, including 
the conduct of any investigation, hearing, or proceeding under this 
part.
    (3) When to file. Complaints shall be filed within 180 days of the 
alleged act of discrimination, unless the responsible civil rights 
official waives this time limit for good cause shown. For purposes of 
determining when a complaint is filed under this paragraph, a complaint 
mailed to the Department shall be deemed filed on the date it is 
postmarked. Any other complaint shall be deemed filed on the date it is 
received by the Department.
    (4) Where to file complaints. Complaints may be filed by mail with 
the Office of Fair Housing and Equal Opportunity, Department of Housing 
and Urban Development, Washington, DC 20410, or any Regional or Field 
Office of the Department.
    (5) Contents of complaints. Each complaint should contain the 
complainant's name and address, the name and address of the recipient 
alleged to have violated this part, and a description of the recipient's 
alleged discriminatory action in sufficient detail to inform the 
Department of the nature and date of the alleged violation of this part.
    (6) Amendments of complaints. Complaints may be reasonably and 
fairly amended at any time. Amendments to complaints such as 
clarification and amplification of allegations in a complaint or the 
addition of other recipients may be made at any time during the pendency 
of the complaint and any amendment shall be deemed to be made as of the 
original filing date.
    (d) Notification. The responsible civil rights official will notify 
the complainant and the recipient of the agency's receipt of the 
complaint within ten (10) calendar days.
    (e) Complaint processing procedures. After acknowledging receipt of 
a complaint, the responsible civil rights official will immediately 
initiate complaint processing procedures.
    (1) Preliminary investigation.
    (i) Within twenty (20) calendar days of acknowledgement of the 
complaint, the responsible civil rights official will review the 
complaint for acceptance, rejection, or referral to the appropriate 
Federal agency.

[[Page 158]]

    (ii) If the complaint is accepted, the responsible civil rights 
official will notify the complainant and the award official. The 
responsible civil righs official will also notify the applicant or 
recipient complained against of the allegations and give the applicant 
or recipient an opportunity to make a written submission responding to, 
rebutting, or denying the allegations raised in the complaint.
    (iii) The party complained against may send the responsible civil 
rights official a response to the notice of complaint within thirty (30) 
calendar days of receiving it. With leave of the responsible civil 
rights official, an answer may be amended at any time. The responsible 
civil rights official will permit answers to be amended for good cause 
shown.
    (2) Informal resolution. In accordance with paragraph (j) of this 
section, the responsible civil rights official shall attempt to resolve 
complaints informally whenever possible.
    (f) Dismissal of complaint. If the investigation reveals no 
violation of this part, the responsible civil rights official will 
dismiss the complaint and notify the complainant and recipient.
    (g) Letter of findings. If an informal resolution of the complaint 
is not reached the responsible civil rights official or his or her 
designee shall, within 180 days of receipt of the complaint, notify the 
recipient and the complainant (if any) of the results of the 
investigation in a letter sent by certified mail, return receipt 
requested, containing the following:
    (1) Preliminary findings of fact and a preliminary finding of 
compliance or noncompliance;
    (2) A description of an appropriate remedy for each violation 
believed to exist;
    (3) A notice that a copy of the Final Investigative Report of the 
Department will be made available, upon request, to the recipient and 
the complainant (if any); and
    (4) A notice of the right of the recipient and the complainant (if 
any) to request a review of the letter of findings by the reviewing 
civil rights official.
    (h) Right to review of the letter of findings. (1) A complainant or 
recipient may request that a complete review be made of the letter of 
findings within 30 days of receipt, by mailing or delivering to the 
reviewing civil rights official, Office of Fair Housing and Equal 
Opportunity, Washington, DC 20410, a written statement of the reasons 
why the letter of findings should be modified in light of supplementary 
information.
    (2) The reviewing civil rights official shall send by certified 
mail, return receipt requested, a copy of the request for review to the 
other party, if any. Such other party shall have 20 days to respond to 
the request for review.
    (3) The reviewing civil rights official shall either sustain or 
modify the letter of findings within 60 days of the request for review. 
The reviewing civil rights official's decision shall constitute the 
formal determination.
    (4) If neither party requests that the letter of findings be 
reviewed, the responsible civil rights official shall, within fourteen 
(14) calendar days of the expiration of the time period in paragraph 
(h)(1) of this section, send a formal written determination of 
compliance or noncompliance to the recipient and copies to the award 
official.
    (i) Voluntary compliance time limits. The recipient will have ten 
(10) calendar days from receipt of the formal determination of 
noncompliance within which to come into voluntary compliance. If the 
recipient fails to meet this deadline, HUD shall proceed under Sec.  
8.57.
    (j) Informal resolution/voluntary compliance--(1) General. It is the 
policy of the Department to encourage the informal resolution of 
matters. The responsible civil rights official may attempt to resolve a 
matter through informal means at any stage of processing. A matter may 
be resolved by informal means at any time. If a letter of findings 
making a preliminary finding of noncompliance is issued, the responsible 
civil rights official shall attempt to resolve the matter by informal 
means.
    (2) Objectives of informal resolution/voluntary compliance. In 
attempting informal resolution, the responsible civil rights official 
shall attempt to achieve a just resolution of the matter and to obtain 
assurances where appropriate, that the recipient will satisfactorily

[[Page 159]]

remedy any violations of the rights of any complainant and will take 
such action as will assure the elimination of any violation of this part 
or the prevention of the occurrence of such violation in the future. The 
terms of such an informal resolution shall be reduced to a written 
voluntary compliance agreement, signed by the recipient and the 
responsible civil rights official, and be made part of the file for the 
matter. Such voluntary compliance agreements shall seek to protect the 
interests of the complainant (if any), other persons similarly situated, 
and the public interest.
    (k) Intimidatory or retaliatory acts prohibited. No recipient or 
other person shall intimidate, threaten, coerce, or discriminate against 
any person for the purpose of interfering with any right or privilege 
secured by this part, or because he or she has made a complaint, 
testified, assisted, or participated in any manner in an investigation, 
proceeding, or hearing under this part. The identity of complainants 
shall be kept confidential except to the extent necessary to carry out 
the purposes of this part, including the conduct of investigation, 
hearing or judicial proceeding arising thereunder.

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988; 53 FR 34634, 
Sept. 7, 1988]



Sec.  8.57  Procedure for effecting compliance.

    (a) General. If there appears to be a failure or threatened failure 
to comply with this part and if the noncompliance or threatened 
noncompliance cannot be corrected by informal means, compliance with 
this part may be effected by the suspension or termination of or refusal 
to grant or to continue Federal financial assistance, or by other means 
authorized by law. Such other means may include, but are not limited to:
    (1) A referral to the Department of Justice with a recommendation 
that appropriate proceedings be brought to enforce any rights of the 
United States under any law of the United States, or any assurance or 
other contractual undertaking;
    (2) The initiation of debarment proceedings pursuant to 2 CFR part 
2424; and
    (3) Any applicable proceeding under State or local law.
    (b) Noncompliance with Sec.  8.50. If an applicant or a recipient of 
assistance under a contract which is extended or amended on or after 
July 11, 1988, fails or refuses to furnish an assurance required under 
Sec.  8.50 or otherwise fails or refuses to comply with the requirements 
imposed by that section, Federal financial assistance may be refused 
under paragraph (c) of this section. The Department is not required to 
provide assistance during the pendency of the administrative proceeding 
under such paragraph (c), except where the assistance is due and payable 
under a contract approved before July 11, 1988.
    (c) Termination of or refusal to grant or to continue Federal 
financial assistance. No order suspending, terminating, or refusing to 
grant or continue Federal financial assistance shall become effective 
until:
    (1) The responsible civil rights official has advised the applicant 
or recipient of its failure to comply and has determined that compliance 
cannot be secured by voluntary means;
    (2) There has been an express finding on the record, after 
opportunity for hearing, of a failure by the applicant or recipient to 
comply with a requirement imposed under this part;
    (3) The action has been approved by the Secretary; and
    (4) The expiration of 30 days after the Secretary has filed with the 
committees of the House and Senate having legislative jurisdiction over 
the program or activity involved a full written report of the 
circumstances and the grounds for such action. Any action to suspend or 
terminate, or to refuse to grant or to continue Federal financial 
assistance shall be limited to the particular political entity, or part 
thereof, or other applicant or recipient as to whom such a finding has 
been made and shall be limited in its effect to the particular program, 
or part thereof, in which such noncompliance has been so found.
    (d) Notice to State or local government. Whenever the Secretary 
determines that a State or unit of general local government which is a 
recipient of Federal financial assistance under title

[[Page 160]]

I of the Housing and Community Development Act of 1974, as amended (42 
U.S.C. 5301-5318) has failed to comply with a requirement of this part 
with respect to a program or activity funded in whole or in part with 
such assistance, the Secretary shall notify the Governor of the State or 
the chief executive officer of the unit of general local government of 
the noncompliance and shall request the Governor or the chief executive 
officer to secure compliance. The notice shall be given at least sixty 
days before:
    (1) An order suspending, terminating, or refusing to grant or 
continue Federal financial assistance becomes effective under paragraph 
(c) of this section; or
    (2) Any action to effect compliance by any other means authorized by 
law is taken under paragraph (a) of this section.
    (e) Other means authorized by law. No action to effect compliance by 
any other means authorized by law shall be taken until:
    (1) The responsible civil rights official has determined that 
compliance cannot be secured by voluntary means;
    (2) The recipient or other person has been notified of its failure 
to comply and of the action to be taken to effect compliance; and
    (3) At least 10 days have elapsed since the mailing of such notice 
to the applicant or recipient. During this period, additional efforts 
shall be made to persuade the applicant or recipient to comply with this 
part and to take such corrective action as may be appropriate.

However, this paragraph shall not be construed to prevent an award 
official from utilizing appropriate procedures and sanctions established 
under the program to assure or secure compliance with a specific 
requirement of the program designed to effectuate the objectives of this 
part.

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988, as amended at 72 
FR 73491, Dec. 27, 2007]



Sec.  8.58  Hearings.

    (a) Opportunity for hearing. Whenever an opportunity for a hearing 
is required by Sec.  8.57(c), reasonable notice shall be given by 
registered or certified mail, return receipt requested, to the affected 
applicant or recipient. This notice shall advise the applicant or 
recipient of the action proposed to be taken, the specific provision 
under which the proposed action against it is to be taken, and the 
matters of fact or law asserted as the basis for this action. The notice 
shall:
    (1) Fix a date not less than 20 days after the date of the notice 
for the applicant or recipient to request the administrative law judge 
to schedule a hearing, or
    (2) Advise the applicant or recipient that the matter has been 
scheduled for hearing at a stated time and place. The time and place so 
fixed shall be reasonable and shall be subject to change for cause. The 
complainant, if any, shall be advised of the time and place of the 
hearing. An applicant or recipient may waive a hearing and submit 
written information and argument for the record. The failure of an 
applicant or recipient to request a hearing under this paragraph or to 
appear at a hearing for which a date has been set is a waiver of the 
right to a hearing under Sec.  8.57(c) and consent to the making of a 
decision on the basis of available information.
    (b) Hearing procedures. Hearings shall be conducted in accordance 
with 24 CFR part 180.

[53 FR 20233, June 2, 1988, as amended at 61 FR 52218, Oct. 4, 1996]



PART 9_ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF DISABILITY IN
PROGRAMS OR ACTIVITIES CONDUCTED BY THE DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT--Table of Contents



Sec.
9.101 Purpose.
9.102 Applicability.
9.103 Definitions.
9.110 Self-evaluation.
9.111 Notice.
9.112-9.129 [Reserved]
9.130 General prohibitions against discrimination.
9.131 Direct threat.
9.132-9.139 [Reserved]
9.140 Employment.
9.141-9.148 [Reserved]
9.149 Program accessibility: discrimination prohibited.

[[Page 161]]

9.150 Program accessibility: existing facilities.
9.151 Program accessibility: new construction and alterations.
9.152 Program accessibility: alterations of Property Disposition Program 
          multifamily housing facilities.
9.153 Distribution of accessible dwelling units.
9.154 Occupancy of accessible dwelling units.
9.155 Housing adjustments.
9.160 Communications.
9.170 Compliance procedures.

    Authority: 29 U.S.C. 794; 42 U.S.C. 3535(d).

    Source: 59 FR 31047, June 16, 1994, unless otherwise noted.



Sec.  9.101  Purpose.

    The purpose of this part is to effectuate section 119 of the 
Rehabilitation, Comprehensive Services, and Developmental Disabilities 
Amendments of 1978, which amended section 504 of the Rehabilitation Act 
of 1973 to prohibit discrimination on the basis of disability in 
programs or activities conducted by Executive agencies or the United 
States Postal Service.



Sec.  9.102  Applicability.

    This part applies to all programs or activities conducted by the 
agency, except for programs or activities conducted outside the United 
States that do not involve individuals with disabilities in the United 
States.



Sec.  9.103  Definitions.

    For purposes of this part:
    Accessible: (1) When used with respect to the design, construction, 
or alteration of a facility or a portion of a facility other than an 
individual dwelling unit, means that the facility or portion of the 
facility when designed, constructed or altered, complies with applicable 
accessibility standards and can be approached, entered, and used by 
individuals with physical disabilities. The phrase ``accessible to and 
usable by'' is synonymous with accessible.
    (2) When used with respect to the design, construction, or 
alteration of an individual dwelling unit, means that the unit is 
located on an accessible route and, when designed, constructed, altered 
or adapted, complies with applicable accessibility standards, and can be 
approached, entered, and used by individuals with physical disabilities. 
A unit that is on an accessible route and is adaptable and otherwise in 
compliance with the standards set forth in Sec.  9.151 is ``accessible'' 
within the meaning of this definition. When a unit in an existing 
facility which is being made accessible as a result of alterations is 
intended for use by a specific qualified individual with disabilities 
(e.g., a current occupant of such unit or of another unit under the 
control of the same agency, or an applicant on a waiting list), the unit 
will be deemed accessible if it meets the requirements of applicable 
standards that address the particular disability or impairment of such 
person.
    Accessible route means a continuous unobstructed path connecting 
accessible elements and spaces of a building or facility. Interior 
accessible routes may include corridors, floors, ramps, elevators, 
lifts, and clear floor space at fixtures. Exterior accessible routes may 
include parking access aisles, curb ramps, crosswalks at vehicular ways, 
walks, ramps and lifts.
    ADA means the Americans with Disabilities Act of 1990 (42 U.S.C. 
12101 through 12213)
    ADA Accessibility Guidelines (ADAAG) means the Accessibility 
Guidelines issued under the ADA, and which are codified in the Appendix 
to 39 CFR part 1191.
    Adaptability means the ability of certain building, spaces and 
elements, such as kitchen counters, sinks, and grab bars, to be added or 
altered, to accommodate the needs of persons with or without 
disabilities, or to accommodate the needs of persons with different 
types or degrees of disability. For example, in a unit adaptable for a 
person with impaired hearing, the wiring for visible emergency alarms 
may be installed but the alarms need not be installed until such time as 
the unit is made ready for occupancy by a person with impaired hearing.
    Agency means the Department of Housing and Urban Development.
    Alteration means a change to a building or facility or its permanent 
fixtures or equipment that affects or

[[Page 162]]

could affect the usability of the building or facility or part thereof. 
Alterations include, but are not limited to, remodeling, renovation, 
rehabilitation, reconstruction, historic restoration, changes or 
rearrangements of the structural parts and changes or rearrangements in 
the plan configuration of walls and full-height partitions. Normal 
maintenance, re-roofing, painting, or wallpapering or changes to 
mechanical and electrical systems are not alterations unless they affect 
the usability of the building or facility.
    Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, United States Department of Justice.
    Assistant Secretary means the Assistant Secretary of Housing and 
Urban Development for Fair Housing and Equal Opportunity.
    Auxiliary aids means services or devices that enable persons with 
impaired sensory, manual, or communication skills to have an equal 
opportunity to participate in, and enjoy the benefits of, programs or 
activities conducted by the agency. For example, auxiliary aids useful 
for persons with impaired vision include readers, Brailled materials, 
audio recordings, and other similar services and devices. Auxiliary aids 
useful for persons with impaired hearing include telephone handset 
amplifiers, telephones compatible with hearing aids, telecommunication 
devices for deaf persons (TDD's), interpreters, note takers, written 
materials, and other similar services and devices.
    Complete complaint means a written statement that contains the 
complainant's name and address and describes the agency's alleged 
discriminatory action in sufficient detail to inform the agency of the 
nature and date of the alleged violation of section 504. It shall be 
signed by the complainant or by someone authorized to do so on his or 
her behalf. Complaints filed on behalf of classes or third parties shall 
describe or identify (by name, if possible) the alleged victims of 
discrimination.
    Current illegal use of drugs means illegal use of drugs that 
occurred recently enough to justify a reasonable belief that a person's 
drug use is current or that continuing use is a real and ongoing 
problem.
    Drug means a controlled substance, as defined in schedules I through 
V of section 202 of the Controlled Substances Act (21 U.S.C. 812).
    Facility means all or any portion of buildings, structures, site 
improvements, complexes, equipment, roads, walks, passageways, parking 
lots, rolling stock or other conveyances, or other real or personal 
property located on a site.
    Historic properties means those properties that are listed or are 
eligible for listing in the National Register of Historic Places, or 
such properties designated as historic under a statute of the 
appropriate State or local government body.
    Illegal use of drugs means the use of one or more drugs, the 
possession or distribution of which is unlawful under the Controlled 
Substances Act (21 U.S.C. 812). The term ``illegal use of drugs'' does 
not include the use of a drug taken under supervision by a licensed 
health care professional, or other uses authorized by the Controlled 
Substances Act or other provisions of Federal law.
    Individual with disabilities means any person who has a physical or 
mental impairment that substantially limits one or more major life 
activities, has a record of such an impairment, or is regarded as having 
such an impairment. As used in this definition, the phrase:
    (1) ``Physical or mental impairment'' includes:
    (i) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genito-urinary; hemic and lymphatic; skin; and endocrine; or
    (ii) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities. The term ``physical or mental 
impairment'' includes, but is not limited to, such diseases and 
conditions as orthopedic, visual, speech, and hearing impairments, 
cerebral palsy, autism, epilepsy, muscular dystrophy,

[[Page 163]]

multiple sclerosis, cancer, heart disease, diabetes, Human 
Immunodeficiency Virus disease (symptomatic or asymptomatic), mental 
retardation, emotional illness, drug addiction and alcoholism.
    (2) The term ``individual with disabilities'' does not include:
    (i) An individual who is currently engaging in the illegal use of 
drugs, when the agency acts on the basis of such use. This exclusion, 
however, does not exclude an individual with disabilities who--
    (A) Has successfully completed a supervised drug rehabilitation 
program, and is no longer engaging in the illegal use of drugs, or has 
otherwise been rehabilitated successfully, and is no longer engaging in 
such use;
    (B) Is participating in a supervised rehabilitation program, and is 
no longer engaging in such use; or
    (C) Is erroneously regarded as engaging in such use, but is not 
engaging in such use.
    (ii) Except that it shall not violate this part for the agency to 
adopt or administer reasonable policies and procedures, including but 
not limited to drug testing, designed to ensure than an individual 
described in paragraphs (2)(i) (A) and (B) of this definition is no 
longer engaging in the illegal use of drugs.
    (iii) Nothing in paragraph (2) of this definition shall be construed 
to encourage, prohibit, restrict or authorize the conduct of testing for 
illegal use of drugs.
    (iv) The agency shall not deny health services provided under titles 
I, II and III of the Rehabilitation Act of 1973 (29 U.S.C. 701 through 
777f) to an individual with disabilities on the basis of that 
individual's current illegal use of drugs, if the individual is 
otherwise entitled to such services.
    (3) For purposes of employment, the term ``individual with 
disabilities'' does not include:
    (i) An individual who has a currently contagious disease or 
infection and who, by reason of such disease or infection--
    (A) Has been determined, in accordance with the provisions of Sec.  
9.131, to pose a direct threat to the health or safety of other 
individuals, which threat cannot be eliminated or reduced by reasonable 
accommodation, or
    (B) Is unable to perform the essential duties of the job, with or 
without reasonable accommodation; or
    (ii) An individual who is an alcoholic and whose current use of 
alcohol prevents him or her from performing the duties of the job in 
question or whose employment would constitute a direct threat to the 
property or the safety of others by reason of his or her current alcohol 
abuse.
    (4) ``Major life activities'' means functions such as caring for 
one's self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, and working.
    (5) ``Has a record of such an impairment'' means has a history of, 
or has been misclassified as having, a mental or physical impairment 
that substantially limits one or more major life activities.
    (6) ``Is regarded as having an impairment'' means--
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but is treated by the agency as constituting 
such a limitation;
    (ii) Has a physical or mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (1) of this 
definition but is treated by the agency as having such an impairment.
    Multifamily housing project means a project containing five or more 
dwelling units.
    Official or Responsible Official means the Assistant Secretary of 
HUD for Fair Housing and Equal Opportunity.
    PDP housing facility means a housing facility administered under 
HUD's Property Disposition Program.
    Project means the whole of one or more residential structures and 
appurtenant structures, equipment, roads, walks, and parking lots which 
are covered by a single mortgage or contract or otherwise treated as a 
whole by the agency for processing purposes, whether or not located on a 
common site.

[[Page 164]]

    Property Disposition Program (PDP) means the HUD program which 
administers the housing facilities that are either owned by the 
Secretary or where, even though the Secretary has not obtained title, 
the Secretary is mortgagee-in-possession. Such properties are deemed to 
be in the possession or control of the agency.
    Qualified individual with disabilities means:
    (1) With respect to any agency non-employment program or activity 
under which a person is required to perform services or to achieve a 
level of accomplishment, an individual with disabilities who meets the 
essential eligibility requirements and who can achieve the purpose of 
the program or activity without modifications in the program or activity 
that the agency can demonstrate would result in a fundamental alteration 
in its nature; or
    (2) With respect to any other agency non-employment program or 
activity, an individual with disabilities who meets the essential 
eligibility requirements for participation in, or receipt of benefits 
from, that program or activity.
    (3) ``Essential eligibility requirements'' include stated 
eligibility requirements such as income, as well as other explicit or 
implicit requirements inherent in the nature of the program or activity, 
such as requirements that an occupant of a PDP multifamily housing 
facility be capable of meeting selection criteria and be capable of 
complying with all obligations of occupancy with or without supportive 
services provided by persons other than the agency.
    (4) ``Qualified person with disabilities'' as that term is defined 
for purposes of employment in 29 CFR 1613.702(f), which is made 
applicable to this part by Sec.  9.140.
    Replacement cost of the completed facility means the current cost of 
construction and equipment for a newly constructed housing facility of 
the size and type being altered. Construction and equipment costs do not 
include the cost of land, demolition, site improvements, non-dwelling 
facilities and administrative costs for project development activities.
    Secretary means the Secretary of Housing and Urban Development.
    Section 504 means section 504 of the Rehabilitation Act of 1973, as 
amended (29 U.S.C. 794). As used in this part, section 504 applies only 
to programs or activities conducted by the agency and not to federally 
assisted programs.
    Substantial impairment means a significant loss of the integrity of 
finished materials, design quality, or special character resulting from 
a permanent alteration.
    UFAS means the Uniform Federal Accessibility Standards, which 
implement the accessibility standards required by the Architectural 
Barriers Act (42 U.S.C. 4151 through 4157), and which are established at 
24 CFR part 40, appendix A for residential structures, and 41 CFR 101-
19.600 through 101-19.607, and appendix A to these sections, for non-
residential structures.



Sec.  9.110  Self-evaluation.

    (a) The agency shall, within one year of the effective date of this 
part, evaluate its current policies and practices, and the effects of 
those policies and practices, including regulations, handbooks, notices 
and other written guidance, that do not or may not meet the requirements 
of this part. To the extent modification of any such policies is 
required, the agency shall take the necessary corrective actions.
    (b) The agency shall provide an opportunity to interested persons, 
including individuals with disabilities or organizations representing 
individuals with disabilities, to participate in the self-evaluation 
process by submitting comments (both oral and written).
    (c) The agency shall, for at least three years following the 
completion of the self-evaluation, maintain on file and make available 
for public inspection:
    (1) A list of interested persons;
    (2) A description of the areas examined and any problems identified; 
and
    (3) A description of any modifications made or to be made.



Sec.  9.111  Notice.

    The agency shall make available to employees, applicants, 
participants,

[[Page 165]]

beneficiaries, and other interested persons information regarding the 
provisions of this part and its applicability to the programs or 
activities conducted by the agency. The agency shall make such 
information available to such persons in such manner as the Secretary 
finds necessary to apprise them of the protections against 
discrimination assured them by section 504 and this part. All 
publications and recruitment materials distributed to participants, 
beneficiaries, applicants or employees shall include a statement that 
the agency does not discriminate on the basis of disability. The notice 
shall include the name of the person or office responsible for the 
implementation of section 504.



Sec. Sec.  9.112-9.129  [Reserved]



Sec.  9.130  General prohibitions against discrimination.

    (a) No qualified individual with disabilities shall, on the basis of 
disability, be excluded from participation in, be denied the benefits 
of, or otherwise be subjected to discrimination under any program or 
activity conducted by the agency.
    (b)(1) The agency, in providing any housing, aid, benefit, or 
service, may not, directly or through contractual, licensing, or other 
arrangements, on the basis of disability--
    (i) Deny a qualified individual with disabilities the opportunity to 
participate in or benefit from the housing, aid, benefit, or service;
    (ii) Afford a qualified individual with disabilities an opportunity 
to participate in or benefit from the housing, aid, benefit, or service 
that is not equal to that afforded others;
    (iii) Provide a qualified individual with disabilities with any 
housing, aid, benefit, or service that is not as effective in affording 
equal opportunity to obtain the same result, to gain the same benefit, 
or to reach the same level of achievement as that provided to others;
    (iv) Provide different or separate housing, aid, benefits, or 
services to individuals with disabilities or to any class of individuals 
with disabilities than is provided to others unless such action is 
necessary to provide qualified individuals with disabilities with 
housing, aid, benefits, or services that are as effective as those 
provided to others;
    (v) Deny a qualified individual with disabilities the opportunity to 
participate as a member of planning or advisory boards;
    (vi) Deny a dwelling to an otherwise qualified buyer or renter 
because of a disability of that buyer or renter or a person residing in 
or intending to reside in that dwelling after it is sold, rented or made 
available; or
    (vii) Otherwise limit a qualified individual with disabilities in 
the enjoyment of any right, privilege, advantage, or opportunity enjoyed 
by others receiving the housing, aid, benefit, or service.
    (2) For purposes of this part, housing, aids, benefits, and 
services, to be equally effective, are not required to produce the 
identical result or level of achievement for individuals with 
disabilities and for persons without disabilities, but must afford 
individuals with disabilities equal opportunity to obtain the same 
result, to gain the same benefit, or to reach the same level of 
achievement.
    (3) The agency may not deny a qualified individual with disabilities 
the opportunity to participate in programs or activities that are not 
separate or different, despite the existence of programs or activities 
that are permissibly separate or different for persons with 
disabilities.
    (4) The agency may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration the purpose 
or effect of which would:
    (i) Subject qualified individuals with disabilities to 
discrimination on the basis of disability; or
    (ii) Defeat or substantially impair accomplishment of the objectives 
of a program or activity with respect to individuals with disabilities.
    (5) The agency may not, in determining the site or location of a 
facility, make selections the purpose or effect of which would:
    (i) Exclude individuals with disabilities from, deny them the 
benefits of, or otherwise subject them to discrimination under any 
program or activity conducted by the agency; or

[[Page 166]]

    (ii) Defeat or substantially impair the accomplishment of the 
objectives of a program or activity with respect to individuals with 
disabilities.
    (6) The agency, in the selection of procurement contractors, may not 
use criteria that subject qualified individuals with disabilities to 
discrimination on the basis of disability.
    (7) The agency may not administer a licensing or certification 
program in a manner that subjects qualified individuals with 
disabilities to discrimination on the basis of disability, nor may the 
agency establish requirements for the programs or activities of 
licensees or certified entities that subject qualified individuals with 
disabilities to discrimination on the basis of disability. However, the 
programs or activities of entities that are licensed or certified by the 
agency are not, themselves, covered by this part.
    (c)(1) Notwithstanding any other provision of this part, persons 
without disabilities may be excluded from the benefits of a program if 
the program is limited by Federal statute or Executive order to 
individuals with disabilities. A specific class of individuals with 
disabilities may be excluded from a program if the program is limited by 
Federal statute or Executive order to a different class of individuals.
    (2) Certain agency programs operate under statutory definitions of 
``persons with disabilities'' that are more restrictive than the 
definition of ``individual with disabilities'' contained in Sec.  9.103. 
Those definitions are not superseded or otherwise affected by this 
regulation.
    (d) The agency shall administer programs and activities in the most 
integrated setting appropriate to the needs of qualified individuals 
with disabilities.
    (e) The obligation to comply with this part is not obviated or 
alleviated by any State or local law or other requirement that, based on 
disability, imposes inconsistent or contradictory prohibitions or limits 
upon the eligibility of qualified individuals with disabilities to 
receive services or to practice any occupation or profession.
    (f) The enumeration of specific forms of prohibited discrimination 
in paragraphs (b) and (d) of this section does not limit the general 
prohibition in paragraph (a) of this section.



Sec.  9.131  Direct threat.

    (a) This part does not require the agency to permit an individual to 
participate in, or benefit from the goods, services, facilities, 
privileges, advantages and accommodations of that agency when that 
individual poses a direct threat to the health or safety of others.
    (b) ``Direct threat'' means a significant risk to the health or 
safety of others that cannot be eliminated by a modification of 
policies, practices, or procedures, or by the provision of auxiliary 
aids or services.
    (c) In determining whether an individual poses a direct threat to 
the health or safety of others, the agency must make an individualized 
assessment, based on reasonable judgment that relies on current medical 
knowledge or on the best available objective evidence to ascertain: the 
nature, duration, and severity of the risk; the probability that the 
potential injury will actually occur; and whether reasonable 
modifications of policies, practices, or procedures will mitigate the 
risk.



Sec. Sec.  9.132-9.139  [Reserved]



Sec.  9.140  Employment.

    No qualified individual with disabilities shall, on the basis of 
disability, be subjected to discrimination in employment under any 
program or activity conducted by the agency. The definitions, 
requirements, and procedures of section 501 of the Rehabilitation Act of 
1973 (29 U.S.C. 791), as established by the Equal Employment Opportunity 
Commission in 29 CFR part 1613 (subpart G), shall apply to employment in 
federally conducted programs or activities.



Sec. Sec.  9.141-9.148  [Reserved]



Sec.  9.149  Program accessibility: discrimination prohibited.

    Except as otherwise provided in Sec.  9.150, no qualified individual 
with disabilities shall, because the agency's facilities are 
inaccessible to or unusable by individuals with disabilities, be denied 
the benefits of, be excluded from

[[Page 167]]

participation in, or otherwise be subjected to discrimination under any 
program or activity conducted by the agency.



Sec.  9.150  Program accessibility: existing facilities.

    (a) General. Except as otherwise provided in paragraph (e) of this 
section, the agency shall operate each program or activity so that the 
program or activity, when viewed in its entirety, is readily accessible 
to and usable by individuals with disabilities. This section does not--
    (1) Necessarily require the agency to make each of its existing 
facilities accessible to and usable by individuals with disabilities;
    (2) In the case of historic properties, require the agency to take 
any action that would result in a substantial impairment of significant 
historic features of an historic property; or
    (3) Require the agency to take any action that it can demonstrate 
would result in a fundamental alteration in the nature of a program or 
activity or in undue financial and administrative burdens. In those 
circumstances where agency personnel believe that the proposed action 
would fundamentally alter the program or activity or would result in 
undue financial and administrative burdens, the agency has the burden of 
proving that compliance with Sec.  9.150(a) would result in such 
alteration or burdens. The decision that compliance would result in such 
alteration or burdens must be made by the Secretary or his or her 
designee after considering all agency resources available for use in the 
funding and operation of the conducted program or activity, and must be 
accompanied by a written statement of the reasons for reaching that 
conclusion. If an action would result in such an alteration or such 
burdens, the agency shall take any other action that would not result in 
such an alteration or such burdens but would nevertheless ensure that 
individuals with disabilities receive the benefits and services of the 
program or activity.
    (b) Methods. The agency may comply with the requirements of this 
section through such means as redesign of equipment, reassignment of 
services to accessible buildings, assignment of aides to beneficiaries, 
home visits, delivery of services at alternate accessible sites, 
alteration of existing facilities and construction of new facilities, 
use of accessible rolling stock, or any other methods that result in 
making its programs or activities readily accessible to and usable by 
individuals with disabilities. The agency is not required to make 
structural changes in existing facilities where other methods are 
effective in achieving compliance with this section. The agency, in 
making alterations to existing buildings, also shall meet accessibility 
requirements to the extent compelled by the Architectural Barriers Act 
of 1968, as amended (42 U.S.C. 4151 through 4157), and any regulations 
implementing it. In choosing among available methods for meeting the 
requirements of this section, the agency shall give priority to those 
methods that offer programs and activities to qualified individuals with 
disabilities in the most integrated setting appropriate.
    (c) Time period for compliance. The agency shall comply with the 
obligations established under this section within sixty days of July 18, 
1994 except that where structural changes in facilities are undertaken, 
such changes shall be made within three years of July 18, 1994, but in 
any event as expeditiously as possible.
    (d) Transition plan. In the event that structural changes to 
facilities will be undertaken to achieve program accessibility, the 
agency shall develop, within six months of July 18, 1994, a transition 
plan setting forth the steps necessary to complete such changes. The 
agency shall provide an opportunity to interested persons, including 
individuals with disabilities or organizations representing individuals 
with disabilities, to participate in the development of the transition 
plan by submitting comments (both oral and written). A copy of the 
transition plan shall be made available for public inspection. The plan 
shall, at a minimum--
    (1) Identify physical obstacles in the agency's facilities that 
limit the accessibility of its programs or activities to individuals 
with disabilities;

[[Page 168]]

    (2) Describe in detail the methods that will be used to make the 
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve 
compliance with this section and, if the time period of the transition 
plan is longer than one year, identify steps that will be taken during 
each year of the transition period; and
    (4) Indicate the official responsible for implementation of the 
plan.
    (e) The requirements of paragraphs (a), (b), and (c) of this section 
shall apply to the Property Disposition Programs. However, this section 
does not require HUD to make alterations to existing facilities that are 
part of the Property Disposition Programs unless such alterations are 
necessary to meet the needs of a current or prospective tenant during 
the time when HUD expects to retain legal possession of the facilities, 
and there is no alternative method to meet the needs of that current or 
prospective tenant. Nothing in this section shall be construed to 
require alterations to make facilities accessible to persons with 
disabilities who are expected to occupy the facilities only after HUD 
relinquishes legal possession.



Sec.  9.151  Program accessibility: new construction and alterations.

    Each building or part of a building that is constructed or altered 
by, on behalf of, or for the use of the agency shall be designed, 
constructed, or altered and provide emergency egress so as to be readily 
accessible to and usable by individuals with disabilities. The 
definitions, requirements, and accessibility standards that apply to 
buildings covered by this section are those contained in the UFAS, 
except where the ADAAG provides for greater accessibility for the type 
of construction or alteration being undertaken, and in this case, the 
definitions, requirements and standards of the ADAAG shall apply.



Sec.  9.152  Program accessibility: alterations of Property Disposition
Program multifamily housing facilities.

    (a) Substantial alteration. If the agency undertakes alterations to 
a PDP multifamily housing project that has 15 or more units and the cost 
of the alterations is 75 percent or more of the replacement cost of the 
completed facility, then the project shall be designed and altered to be 
readily accessible to and usable by individuals with disabilities. 
Subject to paragraph (c) of this section, a minimum of five percent of 
the total dwelling units, or at least one unit, whichever is greater, 
shall be made accessible for persons with mobility impairments. A unit 
that is on an accessible route and is adaptable and otherwise in 
compliance with the standards set forth in paragraph (d) of this section 
is accessible for purposes of this section. An additional two percent of 
the units (but not less that one unit) in such a project shall be 
accessible for persons with hearing or vision impairments. If state or 
local requirements for alterations require greater action than this 
paragraph, those requirements shall prevail.
    (b) Other alteration. (1) Subject to paragraph (c) of this section, 
alterations to dwelling units in a PDP multifamily housing project 
shall, to the maximum extent feasible, be made to be readily accessible 
to and usable by individuals with disabilities. If alterations of single 
elements or spaces of a dwelling unit, when considered together, amount 
to an alteration of a dwelling unit, the entire dwelling unit shall be 
made accessible. Once five percent of the dwelling units in a project 
are readily accessible to and usable by individuals with mobility 
impairments, then no additional elements of dwelling units, or entire 
dwelling units, are required to be accessible under this paragraph. Once 
two percent of the dwelling units in a project are readily accessible to 
or usable by individuals with hearing or vision impairments, then no 
additional elements of dwelling units, or entire dwelling units, are 
required to be accessible under this paragraph.
    (2) Alterations to common areas or parts of facilities that affect 
accessibility of existing housing facilities, shall, to the maximum 
extent feasible, be made to be accessible to and usable by individuals 
with disabilities.
    (c) The agency may establish a higher percentage or number of 
accessible

[[Page 169]]

units than that prescribed in paragraphs (a) or (b) of this section if 
the agency determines that there is a need for a higher percentage or 
number, based on census data or other available current data. In making 
such a determination, HUD shall take into account the expected needs of 
eligible persons with and without disabilities.
    (d) The definitions, requirements, and accessibility standards that 
apply to PDP multifamily housing projects covered by this section are 
those contained in the UFAS, except where the ADAAG provides for greater 
accessibility for the type of alteration being undertaken, and, in this 
case, the definitions, requirements and standards of the ADAAG shall 
apply.
    (e) With respect to multifamily housing projects operated by HUD, 
but in which HUD does not have an ownership interest, alterations under 
this section need not be made if doing so would impose undue financial 
and administrative burdens on the operation of the multifamily housing 
project.



Sec.  9.153  Distribution of accessible dwelling units.

    Accessible dwelling units required by Sec.  9.152 shall, to the 
maximum extent feasible, be distributed throughout projects and sites 
and shall be available in a sufficient range of sizes and amenities so 
that a qualified individual with disabilities' choice of living 
arrangements is, as a whole, comparable to that of other persons 
eligible for housing assistance under the same agency conducted program. 
This provision shall not be construed to require (but does allow) the 
provision of an elevator in any multifamily housing project solely for 
the purpose of permitting location of accessible units above or below 
the accessible grade level.



Sec.  9.154  Occupancy of accessible dwelling units.

    (a) The agency shall adopt suitable means to assure that information 
regarding the availability of accessible units in PDP housing facilities 
reaches eligible individuals with disabilities, and shall take 
reasonable nondiscriminatory steps to maximize the utilization of such 
units by eligible individuals whose disability requires the 
accessibility features of the particular unit. To this end, when an 
accessible unit becomes vacant, the agency (or its management agent) 
before offering such units to an applicant without disabilities shall 
offer such unit:
    (1) First, to a current occupant of another unit of the same 
project, or comparable projects under common control, having 
disabilities requiring the accessibility features of the vacant unit and 
occupying a unit not having such features, or, if no such occupant 
exists, then
    (2) Second, to an eligible qualified applicant on the waiting list 
having a disability requiring the accessibility features of the vacant 
unit.
    (b) When offering an accessible unit to an applicant not having 
disabilities requiring the accessibility features of the unit, the 
agency may require the applicant to agree (and may incorporate this 
agreement in the lease) to move to a non-accessible unit when available.



Sec.  9.155  Housing adjustments.

    (a) The agency shall modify its housing policies and practices as 
they relate to PDP housing facilities to ensure that these policies and 
practices do not discriminate, on the basis of disability, against a 
qualified individual with disabilities. The agency may not impose upon 
individuals with disabilities other policies, such as the prohibition of 
assistive devices, auxiliary aids, alarms, or guides in housing 
facilities, that have the effect of limiting the participation of 
tenants with disabilities in any agency conducted housing program or 
activity in violation of this part. Housing policies that the agency can 
demonstrate are essential to the housing program or activity will not be 
regarded as discriminatory within the meaning of this section if 
modifications would result in a fundamental alteration in the nature of 
the program or activity or undue financial and administrative burdens.
    (b) The decision that compliance would result in such alteration or 
burdens must be made by the Secretary or his or her designee after 
considering all agency resources available for use in

[[Page 170]]

the funding and operation of the conducted program or activity, and must 
be accompanied by a written statement of the reasons for reaching that 
conclusion. If an action required to comply with this section would 
result in such an alteration or such burdens, the agency shall take any 
other action that would not result in such an alteration or such burdens 
but would nevertheless ensure that, to the maximum extent possible, 
individuals with disabilities receive the benefits and services of the 
program or activity.



Sec.  9.160  Communications.

    (a) The agency shall take appropriate steps to ensure effective 
communication with applicants, participants, personnel of other Federal 
entities, and members of the public.
    (1) The agency shall furnish appropriate auxiliary aids where 
necessary to afford an individual with disabilities an equal opportunity 
to participate in, and enjoy the benefits of, a program or activity 
conducted by the agency.
    (i) In determining what type of auxiliary aid is necessary, the 
agency shall give primary consideration to the requests of the 
individual with disabilities.
    (ii) The agency need not provide individually prescribed devices, 
readers for personal use or study, or other devices of a personal 
nature.
    (2) Where the agency communicates with applicants and beneficiaries 
or members of the public by telephone, telecommunication devices for 
deaf persons (TDD's) or equally effective telecommunication systems 
shall be used to communicate with persons with impaired hearing.
    (b) The agency shall ensure that interested persons, including 
persons with impaired vision or hearing, can obtain information as to 
the existence and location of accessible services, activities, and 
facilities.
    (c) The agency shall provide signage at a primary entrance to each 
of its inaccessible facilities, directing users to a location at which 
they can obtain information about accessible facilities. The 
international symbol for accessibility shall be used at each primary 
entrance of an accessible facility.
    (d) This section does not require the agency to take any action that 
it can demonstrate would result in a fundamental alteration in the 
nature of a program or activity or in undue financial and administrative 
burdens. In those circumstances where agency personnel believe that the 
proposed action would fundamentally alter the program or activity or 
would result in undue financial and administrative burdens, the agency 
has the burden of proving that compliance with this section would result 
in such alteration or burdens. The decision that compliance would result 
in such alteration or burdens must be made by the Secretary or his or 
her designee after considering all agency resources available for use in 
the funding and operation of the conducted program or activity and must 
be accompanied by a written statement of the reasons for reaching that 
conclusion. If an action required to comply with Sec.  9.160 would 
result in such an alteration or such burdens, the agency shall take any 
other action that would not result in such an alteration or such burdens 
but would nevertheless ensure that, to the maximum extent possible, 
individuals with disabilities receive the benefits and services of the 
program or activity.



Sec.  9.170  Compliance procedures.

    (a) Except as provided in paragraph (b) of this section, this 
section applies to all allegations of discrimination on the basis of 
disability in programs or activities conducted by the agency.
    (b) The agency shall process complaints alleging violations of 
section 504 with respect to employment according to the procedures 
established by the Equal Employment Opportunity Commission in 29 CFR 
part 1613 under section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 
791).
    (c) The Responsible Official shall coordinate implementation of this 
section.
    (d) Persons may submit complete complaints to the Assistant 
Secretary for Fair Housing and Equal Opportunity, 451 Seventh St., SW., 
Washington, DC 20410, or to any HUD Area Office. The agency shall accept 
and investigate all complete complaints for which the agency has 
jurisdiction. All

[[Page 171]]

complete complaints shall be filed within 180 days of the alleged act of 
discrimination. The agency may extend this time period for good cause. 
For purposes of determining when a complaint is filed, a complaint 
mailed to the agency shall be deemed filed on the date it is postmarked. 
Any other complaint shall be deemed filed on the date it is received by 
the agency. The agency shall acknowledge all complaints, in writing, 
within ten (10) working days of receipt of the complaint.
    (e) If the agency receives a complaint over which it does not have 
jurisdiction, it shall promptly notify the complainant and shall make 
reasonable efforts to refer the complaint to the appropriate Government 
entity.
    (f) The agency shall notify the Architectural and Transportation 
Barriers Compliance Board upon receipt of any complaint alleging that a 
building or facility that is subject to the Architectural Barriers Act 
of 1968, as amended (42 U.S.C. 4151 through 4157), is not readily 
accessible to and usable by individuals with disabilities. The agency 
shall delete the identity of the complainant from the copy of the 
complaint.
    (g)(1) Within 180 days of the receipt of a complete complaint for 
which it has jurisdiction, the Office of Fair Housing and Equal 
Opportunity shall complete the investigation of the complaint, attempt 
informal resolution, and if no informal resolution is achieved, issue a 
letter of findings. If a complaint is filed against the Office of Fair 
Housing and Equal Opportunity, the Secretary or a designee of the 
Secretary shall investigate and resolve the complaint through informal 
agreement or letter of findings.
    (2) If a complaint is resolved informally, the terms of the 
agreement shall be reduced to writing and made part of the complaint 
file, with a copy of the agreement provided to the complainant and the 
agency. The written agreement may include a finding on the issue of 
discrimination and shall describe any corrective action to which the 
complainant and the respondent have agreed.
    (3) If a complaint is not resolved informally, the Office of Fair 
Housing and Equal Opportunity or a person designated under this 
paragraph shall notify the complainant of the results of the 
investigation in a letter containing--
    (i) Findings of fact and conclusions of law;
    (ii) A description of a remedy for each violation found;
    (iii) A notice of the right to appeal to the Secretary;
    (h)(1) Appeals of the findings of fact and conclusions of law or 
remedies must be filed by the complainant within 90 days of receipt from 
the agency of the letter required by Sec.  9.170(g). The Assistant 
Secretary or the person designated by the Secretary to decide an appeal 
of a complaint filed against the Office of Fair Housing and Equal 
Opportunity may extend this time for good cause.
    (2) Timely appeals shall be accepted and processed by the Assistant 
Secretary. Decisions on an appeal shall not be issued by the person who 
made the initial determination.
    (i) The Assistant Secretary or the person designated by the 
Secretary to decide an appeal of a complaint filed against the Office of 
Fair Housing and Equal Opportunity shall notify the complainant of the 
results of the appeal within 60 days of the receipt of the request. If 
the agency determines that it needs additional information from the 
complainant, it shall have 60 days from the date it receives the 
additional information to make its determination on the appeal.
    (j) The time limits cited in paragraphs (g) and (i) of this section 
may be extended with the permission of the Assistant Attorney General.
    (k) The agency may delegate its authority for conducting complaint 
investigations to other Federal agencies, except that the authority for 
making the final determination may not be delegated to another agency.



PART 10_RULEMAKING: POLICY AND PROCEDURES--Table of Contents



                            Subpart A_General

Sec.
10.1 Policy.
10.2 Definitions.
10.3 Applicability.
10.4 Rules docket.

[[Page 172]]

                          Subpart B_Procedures

10.6 Initiation of rulemaking.
10.7 Advance Notice of Proposed Rulemaking.
10.8 Notice of proposed rulemaking.
10.10 Participation by interested persons.
10.12 Additional rulemaking proceedings.
10.14 Hearings.
10.16 Adoption of a final rule.
10.18 Petitions for reconsideration.
10.20 Petition for rulemaking.

    Authority: 42 U.S.C. 3535(d).

    Source: 44 FR 1606, Jan. 5, 1979, unless otherwise noted.



                            Subpart A_General



Sec.  10.1  Policy.

    It is the policy of the Department of Housing and Urban Development 
to provide for public participation in rulemaking with respect to all 
HUD programs and functions, including matters that relate to public 
property, loans, grants, benefits, or contracts even though such matters 
would not otherwise be subject to rulemaking by law or Executive policy. 
The Department therefore publishes notices of proposed rulemaking in the 
Federal Register and gives interested persons an opportunity to 
participate in the rulemaking through submission of written data, views, 
and arguments with or without opportunity for oral presentation. It is 
the policy of the Department that its notices of proposed rulemaking are 
to afford the public not less than sixty days for submission of 
comments. For some rules the Secretary will employ additional methods of 
inviting public participation. These methods include, but are not 
limited to, publishing Advance Notices of Proposed Rulemaking (ANPR), 
conducting public surveys, and convening public forums or panels. An 
ANPR will be used to solicit public comment early in the rulemaking 
process for significant rules unless the Secretary grants an exception 
based upon legitimate and pressing time constraints. Unless required by 
statute, notice and public procedure will be omitted if the Department 
determines in a particular case or class of cases that notice and public 
procedure are impracticable, unnecessary or contrary to the public 
interest. In a particular case, the reasons for the determination shall 
be stated in the rulemaking document. Notice and public procedure may 
also be omitted with respect to statements of policy, interpretative 
rules, rules governing the Department's organization or its own internal 
practices or procedures, or if a statute expressly so authorizes. A 
final substantive rule will be published not less than 30 days before 
its effective date, unless it grants or recognizes an exemption or 
relieves a restriction or unless the rule itself states good cause for 
taking effect upon publication or less than 30 days thereafter. 
Statements of policy and interpretative rules will usually be made 
effective on the date of publication.

[44 FR 1606, Jan. 5, 1979, as amended at 47 FR 56625, Dec. 20, 1982]



Sec.  10.2  Definitions.

    (a) Rule or Regulation means all or part of any Departmental 
statement of general or particular applicability and future effect 
designed to: (1) Implement, interpret, or prescribe law or policy, or 
(2) describe the Department's organization, or its procedure or practice 
requirements. The term regulation is sometimes applied to a rule which 
has been published in the Code of Federal Regulations.
    (b) Rulemaking means the Departmental process for considering and 
formulating the issuance, modification, or repeal of a rule.
    (c) Secretary means the Secretary or the Under Secretary of Housing 
and Urban Development, or an official to whom the Secretary has 
expressly delegated authority to issue rules.



Sec.  10.3  Applicability.

    (a) This part prescribes general rulemaking procedures for the 
issuance, amendment, or repeal of rules in which participation by 
interested persons is required by 5 U.S.C. or by Department policy.
    (b) The authority to issue rules, delegated by the Secretary, may 
not be redelegated unless expressly permitted.
    (c) This part is not applicable to a determination by HUD under 24 
CFR part 966 (public housing) or 24 CFR part 950 (Indian housing) that 
the law of a jurisdiction requires that, prior to eviction, a tenant be 
given a hearing in court

[[Page 173]]

which provides the basic elements of due process (``due process 
determination'').

[44 FR 1606, Jan. 5, 1979, as amended at 61 FR 13273, Mar. 26, 1996]



Sec.  10.4  Rules docket.

    (a) All documents relating to rulemaking procedures including but 
not limited to advance notices of proposed rulemaking, notices of 
proposed rulemaking, written comments received in response to notices, 
withdrawals or terminations of proposed rulemaking, petitions for 
rulemaking, requests for oral argument in public participation cases, 
requests for extension of time, grants or denials of petitions or 
requests, transcripts or minutes of informal hearings, final rules and 
general notices are maintained in the Rules Docket Room (Room 5218), 
Department of Housing and Urban Development, 451 7th Street, SW., 
Washington, DC 20410. All public rulemaking comments should refer to the 
docket number which appears in the heading of the rule and should be 
addressed to the Rules Docket Clerk, Room 5218, Department of Housing 
and Urban Development, 451 7th Street, SW., Washington, DC 20410.
    (b) Documents relating to rulemaking proceedings are public records. 
After a docket is established, any person may examine docketed material 
at any time during regular business hours, and may obtain a copy of any 
docketed material upon payment of the prescribed fee. (See part 15 of 
this title).



                          Subpart B_Procedures



Sec.  10.6  Initiation of rulemaking.

    Rulemaking proceedings may be initiated on the Secretary's motion, 
or on the recommendation of a Federal, State, or local government or 
government agency, or on the petition of any interested person.



Sec.  10.7  Advance Notice of Proposed Rulemaking.

    An Advance Notice of Proposed Rulemaking issued in accordance with 
Sec.  10.1 of this part is published in the Federal Register and briefly 
outlines:
    (a) The proposed new program or program changes, and why they are 
needed;
    (b) The major policy issues involved;
    (c) A request for comments, both specific and general, as to the 
need for the proposed rule and the provisions that the rule might 
include;
    (d) If appropriate, a list of questions about the proposal that will 
elicit detailed comments;
    (e) If known, an estimate of the reporting or recordkeeping 
requirements, if any, that the rule would impose; and
    (f) Where comments should be addressed and the time within which 
they must be submitted.



Sec.  10.8  Notice of proposed rulemaking.

    Each notice of proposed rulemaking required by statute or by Sec.  
10.1 is published in the Federal Register and includes:
    (a) The substance or terms of the proposed rule or a description of 
the subject matter and issues involved;
    (b) A statement of how and to what extent interested persons may 
participate in the proceeding;
    (c) Where participation is limited to written comments, a statement 
of the time within which such comments must be submitted;
    (d) A reference to the legal authority under which the proposal is 
issued; and
    (e) In a proceeding which has provided Advance Notice of Proposed 
Rulemaking, an analysis of the principal issues and recommendations 
raised by the comments, and the manner in which they have been addressed 
in the proposed rulemaking.



Sec.  10.10  Participation by interested persons.

    (a) Unless the notice otherwise provides, any interested person may 
participate in rulemaking proceedings by submitting written data, views 
or arguments within the comment time stated in the notice. In addition, 
the Secretary may permit the filing of comments in response to original 
comments.
    (b) In appropriate cases, the Secretary may provide for oral 
presentation of views in additional proceedings described in Sec.  
10.12.

[[Page 174]]



Sec.  10.12  Additional rulemaking proceedings.

    The Secretary may invite interested persons to present oral 
arguments, appear at informal hearings, or participate in any other 
procedure affording opportunity for oral presentation of views. The 
transcript or minutes of such meetings, as appropriate, will be kept and 
filed in the Rules Docket.



Sec.  10.14  Hearings.

    (a) The provisions of 5 U.S.C. 556 and 557, which govern formal 
hearings in adjudicatory proceedings, do not apply to informal rule 
making proceedings described in this part. When opportunity is afforded 
for oral presentation, such informal hearing is a nonadversary, fact-
finding proceeding. Any rule issued in a proceeding under this part in 
which a hearing is held is not based exclusively on the record of such 
hearing.
    (b) When a hearing is provided, the Secretary will designate a 
representative to conduct the hearing, and if the presence of a legal 
officer is desirable, the General Counsel will designate a staff 
attorney to serve as the officer.



Sec.  10.16  Adoption of a final rule.

    All timely comments are considered in taking final action on a 
proposed rule. Each preamble to a final rule will contain a short 
analysis and evaluation of the relevant significant issues set forth in 
the comments submitted, and a clear concise statement of the basis and 
purpose of the rule.



Sec.  10.18  Petitions for reconsideration.

    Petitions for reconsideration of a final rule will not be 
considered. Such petitions, if filed, will be treated as petitions for 
rulemaking in accordance with Sec.  10.20.



Sec.  10.20  Petition for rulemaking.

    (a) Any interested person may petition the Secretary for the 
issuance, amendment, or repeal of a rule. Each petition shall:
    (1) Be submitted to the Rules Docket Clerk, Room 5218, Department of 
Housing and Urban Development, Washington, DC 20410;
    (2) Set forth the text of substance of the rule or amendment 
proposed or specify the rule sought to be repealed;
    (3) Explain the interest of the petitioner in the action sought; and
    (4) Set forth all data and arguments available to the petitioner in 
support of the action sought.
    (b) No public procedures will be held directly on the petition 
before its disposition. If the Secretary finds that the petition 
contains adequate justification, a rulemaking proceeding will be 
initiated or a final rule will be issued as appropriate. If the 
Secretary finds that the petition does not contain adequate 
justification, the petition will be denied by letter or other notice, 
with a brief statement of the ground for denial. The Secretary may 
consider new evidence at any time; however, repetitious petitions for 
rulemaking will not be considered.



PART 13_USE OF PENALTY MAIL IN THE LOCATION AND RECOVERY OF MISSING
CHILDREN--Table of Contents



Sec.
13.1 Purpose.
13.2 Procedures for obtaining and disseminating data.
13.3 Withdrawal of data.
13.4 Reports.

    Authority: 39 U.S.C. 3220(a)(2); 5 U.S.C. 301.

    Source: 51 FR 19830, June 3, 1986, unless otherwise noted.



Sec.  13.1  Purpose.

    To support the national effort to locate and recover missing 
children, the Department of Housing and Urban Development (HUD) joins 
other executive departments and independent establishments of the 
Government of the United States in using penalty mail to disseminate 
photographs and biographical information on hundreds of missing 
children.

[51 FR 19830, June 3, 1986; 51 FR 43608, Dec. 3, 1986]



Sec.  13.2  Procedures for obtaining and disseminating data.

    (a) HUD shall insert, manually and via automated inserts, pictures 
and biographical data related to missing children in domestic penalty 
mail directed

[[Page 175]]

to members of the public in the United States, its territories and 
possessions. These include:
    (1) Standard letter-size envelopes (4\1/2\ x 9\1/
2\);
    (2) Document-size envelopes (9\1/2\ x 12, 9\1/
2\ x 11\1/2\, 10 x 13); and
    (3) Other envelopes (miscellaneous size).
    (b) Missing children information shall not be placed on the Penalty 
Indicia, OCR Read Area, Bar Code Read Area, and Return Address areas of 
letter-size envelopes.
    (c) Posters containing pictures and biographical data shall be 
placed on bulletin boards in Headquarters and Field offices.
    (d) HUD shall accept camera-ready and other photographic and 
biographical materials solely from the National Center for Missing and 
Exploited Children (National Center). Photographs that were reasonably 
current as of the time of the child's disappearance shall be the only 
acceptable form of visual media or pictorial likeness used in penalty 
mail or posters.



Sec.  13.3  Withdrawal of data.

    HUD shall remove all printed penalty mail envelopes and other 
materials from circulation or other use within a three month period from 
the date the National Center receives information or notice that a 
child, whose picture and biographical information have been made 
available to HUD, has been recovered or that the parent or guardian's 
permission to use the child's photograph and biographical information 
has been withdrawn. The HUD contact person shall be notified immediately 
and in writing by the National Center of the need to withdraw from 
circulation penalty mail envelopes and other materials related to a 
particular child.



Sec.  13.4  Reports.

    HUD shall compile and submit to Office of Juvenile Justice and 
Deliquency Prevention (OJJDP), by June 30, 1987, a consolidated report 
on its experience in implementing S. 1195 Official Mail Use in the 
Location and Recovery of Missing Children along with recommendations for 
future Departmental action.



PART 14_IMPLEMENTATION OF THE EQUAL ACCESS TO JUSTICE ACT IN ADMINISTRATIVE 
PROCEEDINGS--Table of Contents



                      Subpart A_General Provisions

Sec.
14.50 Definitions.
14.100 Time computation.
14.105 Purpose of these rules.
14.110 When the Act applies.
14.115 Proceedings covered.
14.120 Eligibility of applicants.
14.125 Standards for awards.
14.130 Allowable fees and expenses.
14.135 Rulemaking on maximum rates for attorney fees.
14.140 Awards against other agencies.

             Subpart B_Information Required From Applicants

14.200 Contents of application.
14.205 Net worth exhibit.
14.210 Documentation of fees and expenses.
14.215 When an application may be filed.

            Subpart C_Procedures for Considering Applications

14.300 Jurisdiction of adjudicative officer.
14.305 Filing and service of documents.
14.310 Answer to application.
14.315 Comments by other parties.
14.320 Settlement.
14.325 Extensions of time and further proceedings.
14.330 Decision.
14.335 Departmental review.
14.340 Judicial review.
14.345 Payment of award.

    Authority: 5 U.S.C. 504(c)(1); 42 U.S.C. 3535(d).

    Source: 52 FR 27126, July 17, 1987, unless otherwise noted.



                      Subpart A_General Provisions



Sec.  14.50  Definitions.

    Act. The Equal Access to Justice Act, 5 U.S.C. 504, title II of Pub. 
L. 96-481, as amended by Pub. L. 99-80.
    Adjudicative officer. The hearing examiner, administrative law 
judge, administrative judge of the HUD Office of Appeals, or other 
officer designated by the Secretary or other responsible Department 
official, who presided at the adversary adjudication.
    Adversary adjudication. (a) An adjudication under 5 U.S.C. 554 in 
which the

[[Page 176]]

position of the United States is represented by counsel or otherwise, 
but not including an adjudication for the purpose of establishing or 
fixing a rate or for the purpose of granting or renewing a license; and
    (b) Appeals of decisions of contracting officers made pursuant to 
section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 605) before 
agency boards of contract appeals as provided in section 8 of that Act 
(41 U.S.C. 607).
    Agency counsel (a) When the position of the Department is being 
represented, the attorney or attorneys designated by the Department's 
General Counsel to represent the Department in a proceeding covered by 
this part, and
    (b) When the position of another agency of the United States is 
being represented, the representative as designated by that agency.
    Department. The Department of Housing and Urban Development, or the 
organizational unit within the Department responsible for conducting an 
adversary adjudication subject to this part.
    Proceeding. An adversary adjudication as defined above.
    Secretary. The Secretary of Housing and Urban Development.

[52 FR 27126, July 17, 1987, as amended at 72 FR 53877, Sept. 20, 2007]



Sec.  14.100  Time computation.

    Time periods stated in this part shall be computed in accordance 
with the Department's rules with respect to computation of time which 
apply to the underlying proceeding.



Sec.  14.105  Purpose of these rules.

    The Act provides for the award of attorney fees and other expenses 
to eligible individuals and entities who are parties to certain 
administrative proceedings (adversary adjudications) before the 
Department. An eligible party may receive an award when it prevails over 
an agency, unless the agency's position was substantially justified or 
special circumstances make an award unjust. The rules in this part 
described the parties eligible for awards and the proceedings that are 
covered. They also explain how to apply for awards and the procedures 
and standards that the Department will use to make them.



Sec.  14.110  When the Act applies.

    The Act applies to any adversary adjudication pending or commenced 
before this Department on or after August 5, 1985. It also applies to 
any adversary adjudication commenced on or after October 1, 1984, and 
finally disposed of before August 5, 1985, provided that an application 
for fees and expenses, as described in subpart B of these rules, has 
been filed with the Department no later than 30 days after August 5, 
1985, and to any adversary adjudication pending on or commenced on or 
after October 1, 1981, in which an application for fees and other 
expenses was timely filed and was dismissed for lack of jurisdiction.



Sec.  14.115  Proceedings covered.

    (a) The proceedings to which this part applies are adversary 
adjudications conducted by the Department under:
    (1) The Interstate Land Sales Full Disclosure Act, as amended, 15 
U.S.C. 1701 et seq., pursuant to 15 U.S.C. 1715 and 24 CFR part 1720;
    (2) Section 602 of the Civil Rights Act of 1964, 42 U.S.C. 2000d-1, 
and 24 CFR parts 1 and 2;
    (3) Section 505(a) of the Rehabilitation Act of 1973, as amended, 29 
U.S.C. 794a, 28 CFR part 41, and any applicable HUD regulations;
    (4) Section 305(a) of the Age Discrimination Act of 1975, 42 U.S.C. 
6104(a), 45 CFR part 90 and any applicable HUD regulations;
    (5) Section 3 of the HUD Act of 1968, 12 U.S.C. 170lu (Employment 
Opportunities for Business and Lower Income Persons in Connection with 
Assisted Projected), and 24 CFR part 135;
    (6) Debt Collection Act of 1982 (Salary Offset), 5 U.S.C. 5514, and 
24 CFR 17.125-.140;
    (7) Manufactured Home Construction and Safety Standards Act of 1974, 
42 U.S.C. 5401 et seq., and 24 CFR part 3280;
    (8) Section 111 of title I of the Housing and Community Development 
Act of 1974, 42 U.S.C. 5311, and 24 CFR 570.913;
    (9) Appeals of decisions of contracting officers made pursuant to 
section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 605) before 
the HUD Board of Contract Appeals as provided

[[Page 177]]

in section 8 of that Act (41 U.S.C. 607); or
    (10) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3600-
3620) and 24 CFR part 104.
    (b) The Department's failure to identify a type of proceeding as an 
adversary adjudication shall not preclude the filing of an application 
by a party who believes the proceeding is covered by the Act; whether 
the proceeding is covered will then be an issue for resolution in 
proceedings on the application.
    (c) If a proceeding includes both matters covered by the Act and 
matters specifically excluded from coverage, any award made will include 
only fees and expenses related to covered issues.

[52 FR 27126, July 17, 1987, as amended at 54 FR 3283, Jan. 23, 1989]



Sec.  14.120  Eligibility of applicants.

    (a) To be eligible for an award of attorney fees and other expenses 
under the Act, the applicant must be a party to the adversary 
adjudication for which it seeks an award. The term party is defined in 5 
U.S.C. 551(3). The applicant must show that it meets all conditions of 
eligibility set out in this subpart and in subpart B.
    (b) The types of eligible applicants are as follows:
    (1) An individual with a net worth of not more than $2 million;
    (2) The sole owner of an unincorporated business who has a net worth 
of not more than $7 million, including both personal and business 
interests, and not more than 500 employees;
    (3) A charitable or other tax-exempt organization described in 
section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501(c)(3), 
with not more than 500 employees;
    (4) A cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act, 12 U.S.C. 1141j(a), with not more than 500 
employees; or
    (5) Any other partnership, corporation, association, unit of local 
government, or organization with a net worth of not more than $7 million 
and not more than 500 employees.
    (c) For the purpose of eligibility, the net worth and number of 
employees of an applicant shall be determined as of the date the 
proceeding was initiated. For the purpose of eligibility of applicants 
before the HUD Board of Contract Appeals, the net worth and number of 
employees of an applicant shall be determined as of the date the 
applicant filed its appeal under 41 U.S.C. 606.
    (d) An applicant who owns an unincorporated business will be 
considered as an individual rather than a sole owner of an 
unincorporated business if the issues on which the application prevails 
are related primarily to personal interests rather than to business 
interests.
    (e) The employees of an applicant include all persons who regularly 
perform services for remuneration for the applicant, under the 
applicant's direction and control. Part-time employees shall be included 
on a proportional basis.
    (f) The net worth and number of employees of the applicant and all 
of its affiliates shall be aggregated to determine eligibility. Any 
individual, corporation or other entity that directly or indirectly 
controls or owns a majority of the voting shares or other interests of 
the applicant, or any corporation or other entity of which the applicant 
directly or indirectly owns or controls a majority of the voting shares 
or other interest, will be considered an affiliate for purposes of this 
part, unless the adjudicative officer determines that such treatment 
would be unjust and contrary to the purposes of the Act in light of the 
actual relationship between the affiliated entities. In addition, the 
adjudicative officer may determine that financial relationships of the 
applicant other than those described in this paragraph constitute 
special circumstances that would make an award unjust.
    (g) An applicant that participates in a proceeding primarily on 
behalf of one or more other persons or entities that would be ineligible 
is not itself eligible for an award.



Sec.  14.125  Standards for awards.

    (a) A prevailing applicant may receive an award for fees and 
expenses incurred in connection with a proceeding, or in a significant 
and discrete substantive portion of the proceeding, unless the position 
of the agency over which the applicant has prevailed was substantially 
justified. The position of

[[Page 178]]

the agency includes, in addition to the position taken by the agency in 
the adversary adjudication, the action or failure to act by the agency 
upon which the adversary adjudication is based. The burden of proof that 
an award should not be made to an ineligible prevailing applicant 
because the agency's position was substantially justified is on the 
agency counsel, who may avoid an award by showing that its position was 
reasonable in law and fact.
    (b) An award will be reduced or denied if the applicant has unduly 
or unreasonably protracted the proceeding, if the applicant has 
falsified the application (including documentation) or net worth exhibit 
or if special circumstances make the award sought unjust.



Sec.  14.130  Allowable fees and expenses.

    (a) No award for the fee of an attorney or agent under these rules 
may exceed $75.00 per hour. However, an award may also include the 
reasonable expenses of the attorney, agent or witness as a separate 
item, if the attorney, agent or witness ordinarily charges clients 
separately for such expenses.
    (b) In determining the reasonableness of the fee sought for an 
attorney, agent or expert witness, the adjudicative officer shall 
consider the following:
    (1) If the attorney, agent or witness is in private practice, his or 
her customary fee for similar services, or, if an employee of the 
applicant, the fully allocated cost of the services;
    (2) The prevailing rate for the kind and quality of services 
furnished in the community in which the attorney, agent or witness 
ordinarily performs services;
    (3) The time actually spent in the representation of the applicant;
    (4) The time reasonably spent in the light of the difficulty or 
complexity of the issues in the proceeding; and
    (5) Such other factors as may bear on the value of the services 
provided.
    (c) The reasonable cost of any study, analysis, engineering report, 
test, project, or similar matter prepared on behalf of a party may be 
awarded, to the extent that the charge for the services does not exceed 
the prevailing rate for similar services, and the study or other matter 
was necessary for preparation of the applicant's case.



Sec.  14.135  Rulemaking on maximum rates for attorney fees.

    Any person may file with the Department a petition for rulemaking to 
increase the maximum rate for attorney fees as provided in 5 U.S.C. 
504(b)(1)(A)(ii), in accordance with 24 CFR part 10. The petition should 
identify the rate the petitioner believes the Department should 
establish and the types of proceedings in which the rate should be used. 
It should also explain fully the reasons why the higher rate is 
warranted. The Department will respond to the petition in accordance 
with 24 CFR 10.20(b).



Sec.  14.140  Awards against other agencies.

    If an applicant is entitled to an award because it prevails over 
another agency of the United States that participates in a proceeding 
before the Department and takes a position that is not substantially 
justified, the award or an appropriate portion of the award shall be 
made against that agency.



             Subpart B_Information Required From Applicants



Sec.  14.200  Contents of application.

    (a) An application for an award of fees and expenses under the Act 
shall identify the applicant and the proceeding for which an award is 
sought. The application shall show that the applicant has prevailed and 
identify the position of the Department or other agencies that the 
applicant alleges was not substantially justified. Unless the applicant 
is an individual, the application shall also state the number of 
employees of the applicant and describe briefly the type and purpose of 
its organization or business.
    (b) The application shall also include a statement that the 
applicant's net worth does not exceed $2 million (if an individual) or 
$7 million (for all other applicants, including their affiliates). 
However, an applicant may omit this statement if:
    (1) It attaches a copy of a ruling by the Internal Revenue Service 
that it qualifies as an organization described

[[Page 179]]

in section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501(c)(3), 
or, in the case of a tax-exempt organization not required to obtain a 
ruling from the Internal Revenue Service on its exempt status, a 
statement that describes the basis for the applicant's belief that it 
qualifies under such section; or
    (2) It states that it is a cooperative association as defined in 
section 15(a) of the Agricultural Marketing Act, 12 U.S.C. 1141j(a).
    (c) If the applicant is a partnership, corporation, association, or 
organization, or a sole owner of an unincorporated business, the 
applicant shall state that it did not have more than 500 employees at 
the time the proceeding was initiated, giving the number of its 
employees and describing briefly the type and purpose of its 
organization or business.
    (d) The application shall also itemize the amount of fees and 
expenses for which an award is sought.
    (e) The application also may include any other matters that the 
applicant wishes the Department to consider in determining whether and 
in what amount an award should be made.
    (f) The application shall be signed by the applicant or an 
authorized officer with respect to the eligibility of the applicant and 
by the attorney of the applicant with respect to fees and expenses 
sought. The application shall contain or be accompanied by a written 
verification under oath or affirmation under penalty of perjury that the 
information provided in the application and all accompanying material is 
true and complete to the best of the applicant's or authorized officer's 
information and belief.

(Approved by the Office of Management and Budget under control number 
2510-0001)



Sec.  14.205  Net worth exhibit.

    (a) Each applicant except a qualified tax-exempt organization or a 
qualified cooperative association must submit with its application a 
detailed exhibit showing the net worth of the applicant and any 
affiliates (as defined in Sec.  14.120(f) of this part) when the 
proceeding was initiated. The exhibit may be in any form convenient to 
the applicant that provides full disclosure of the applicant's and its 
affiliates' assets and liabilities, and is sufficient to determine 
whether the applicant qualifies under the standards of the Act and this 
part. The adjudicative officer may require an applicant to file 
additional information to determine its eligibility for an award.
    (b) The net worth exhibit shall describe any transfers of assets 
from, or obligations incurred by, the applicant or any affiliate, 
occurring in the one-year period before the date on which the proceeding 
was initiated, that reduced the net worth of the applicant and its 
affiliates below the applicable net worth ceiling. If there were no such 
transactions, the applicant shall so state.
    (c) Ordinarily, the net worth exhibit will be included in the public 
record of the proceeding. However, an applicant that objects to public 
disclosure of information in any portion of the exhibit and believes 
there are legal grounds for withholding it from disclosure may submit 
that portion of the exhibit directly to the adjudicative officer in a 
sealed envelope labeled ``Confidential Financial Information,'' 
accompanied by a motion to withhold the information from public 
disclosure. The motion shall describe the information sought to be 
withheld and explain, in detail, why it falls within one or more of the 
specific exemptions from mandatory disclosure under the Freedom of 
Information Act (5 U.S.C. 552(b) (1)-(9)), why public disclosure of the 
information would adversely affect the applicant, and why disclosure is 
not required in the public interest. The material in question shall be 
served on counsel representing the agency against which the applicant 
seeks an award, but need not be served on any other party to the 
proceeding. If the adjudicative officer finds that the information 
should not be withheld from disclosure, it shall be placed in the public 
record of the proceeding. Otherwise, any request to inspect or copy the 
exhibit shall be disposed of in accordance with the Department's 
established procedures under the Freedom of Information Act, 24 CFR part 
15. In either case, disclosure shall be subject to the provisions of the 
Privacy Act of

[[Page 180]]

1974, 5 U.S.C. 552a, and the Department's procedures implementing the 
Privacy Act of 1974 at 24 CFR part 16.

(Approved by the Office of Management and Budget under control number 
2510-0001)



Sec.  14.210  Documentation of fees and expenses.

    (a) The application shall be accompanied by full and itemized 
documentation of the fees and expenses, including the cost of any study, 
analysis, engineering report, test, project or similar matter, for which 
an award is sought.
    (b) The documentation shall include an affidavit from any attorney, 
agent or expert witness representing or appearing in behalf of the 
party, stating the actual time expended and the rate at which fees and 
other expenses were computed and describing the specific services 
performed.
    (c) The documentation shall also include a description of any 
expenses for which reimbursement is sought and a statement of the 
amounts paid and payable by the applicant or by any other person or 
entity for the services provided. Vouchers, receipts, logs, or other 
substantiation for any expenses paid or payable shall be provided.
    (d) The adjudicative officer may require the applicant to provide 
additional substantiation for any expenses claimed.

(Approved by the Office of Management and Budget under control number 
2510-0001)



Sec.  14.215  When an application may be filed.

    (a) An application may be filed whenever the applicant has prevailed 
in the proceeding or in a significant and discrete substantive portion 
of the proceeding, but in no case later than 30 days after the 
Department's final disposition of the proceeding.
    (b) For purposes of this rule, final disposition means the date on 
which a decision or order disposing of the merits of the proceeding or 
any other complete resolution of the proceeding, such as a settlement of 
voluntary dismissal, become final and unappealable, both within the 
Department and to the courts.
    (c) If review or reconsideration (under HUD Board of Contract 
Appeals Rule 29, 24 CFR 20.10) is sought or taken of a decision as to 
which an applicant believes it has prevailed, proceedings for the award 
of fees shall be stayed pending final disposition of the underlying 
controversy. When the United States appeals the underlying merits of an 
adversary adjudication to a court, no decision on an application for 
fees and other expenses in connection with that adversary adjudication 
shall be made until a final and unreviewable decision is rendered by the 
court on the appeal or until the underlying merits of the case have been 
finally determined pursuant to the appeal.



            Subpart C_Procedures for Considering Applications



Sec.  14.300  Jurisdiction of adjudicative officer.

    Any provision in the Department's rules and regulations other than 
this part which limits or terminates the jurisdiction of an adjudicative 
officer upon the effective date of his or her decision in the underlying 
proceeding shall not in any way affect his or her jurisdiction to render 
a decision under this part.



Sec.  14.305  Filing and service of documents.

    Any application for an award or other pleading or document related 
to an application shall be filed and served on all parties to the 
proceeding in the same manner as other pleadings in the proceeding, 
except as provided in Sec.  14.205(c) for confidential financial 
information.



Sec.  14.310  Answer to application.

    (a) Within 30 days after service of an application, agency counsel 
may file an answer to the application. Agency counsel may request an 
extension of time for filing. If agency counsel fails to answer or 
otherwise fails to contest or settle the application, the adjudicative 
officer, upon a satisfactory showing of entitlement by the applicant, 
may make an award for the applicant's fees and other expenses under the 
Act.
    (b) If agency counsel and the applicant believe that the issues in 
the fee application can be settled, they may jointly file a statement of 
their intent

[[Page 181]]

to negotiate a settlement. The filing of this statement shall extend the 
time for filing an answer for an additional 30 days, and further 
extensions may be granted by the adjudicative officer upon request by 
agency counsel and the applicant.
    (c) The answer shall explain in detail any objections to the award 
requested and identify the facts relied on in support of agency 
counsel's position. If the answer is based on any alleged facts not 
already in the record of the proceeding, agency counsel shall include 
with the answer either supporting affidavits or a request for further 
proceedings under Sec.  14.325.



Sec.  14.315  Comments by other parties.

    Any party to a proceeding other than the applicant and agency 
counsel may file comments on an application within 30 days after it is 
served, or on an answer within 15 days after it is served. A commenting 
party may not participate further in proceedings on the application 
unless the adjudicative officer determines that the public interest 
requires such participation in order to permit full exploration of 
matters raised in the comments.



Sec.  14.320  Settlement.

    The applicant and agency counsel may agree on a proposed settlement 
of the award before final action on the application, either in 
connection with a settlement of the underlying proceeding, or after the 
underlying proceeding has been concluded, in accordance with the 
settlement procedure applicable to the underlying proceeding. If a 
prevailing party and agency counsel agree on a proposed settlement of an 
award before an application has been filed, the application shall be 
filed with the proposed settlement.



Sec.  14.325  Extensions of time and further proceedings.

    (a) The adjudicative officer on motion and for good cause shown may 
grant extensions of time other than for filing an application for fees 
and expenses after final disposition in the adversary adjudication.
    (b) Ordinarily, the determination of an award will be made on the 
basis of the written record. However, on request of either the applicant 
or agency counsel, or on his or her own initiative, the adjudicative 
officer may order further proceedings, such as an informal conference, 
oral argument, additional written submissions, or as to issues other 
than substantial justification (such as the applicant's eligibility or 
substantiation of fees and expenses), pertinent discovery or an 
evidentiary hearing. Such further proceedings shall be held only when 
necessary for full and fair resolution of the issues arising from the 
application, and shall be conducted as promptly as possible. Whether or 
not the position of the agency was substantially justified shall be 
determined on the basis of the administrative record, as a whole, which 
is made in the adversary adjudication for which fees and other expenses 
are sought.
    (c) A request that the adjudicative officer order further 
proceedings under this section shall specifically identify the 
information sought or the disputed issues and shall explain why the 
additional proceedings are necessary to resolve the issues.



Sec.  14.330  Decision.

    The adjudicative officer shall issue an initial decision on the 
application within 30 days after completion of proceedings on the 
application. The decision shall include written findings and conclusions 
on such of the following as are relevant to the decision:
    (a) The applicant's status as a prevailing party;
    (b) The applicant's qualification as a party under 5 U.S.C. 
504(b)(1)(B);
    (c) Whether the agency's position was substantially justified;
    (d) Whether special circumstances make an award unjust;
    (e) Whether the applicant during the course of the proceedings 
engaged in conduct that unduly and unreasonably protracted the final 
resolution of the matter in controversy; and
    (f) The amounts, if any, awarded for fees and other expenses, with 
reasons for any difference between the amount requested and the amount 
awarded.

If the applicant has sought an award against more than one agency, the 
decision shall allocate responsibility for payment of any award made 
among the

[[Page 182]]

agencies, and shall explain the reasons for the allocation made.



Sec.  14.335  Departmental review.

    (a) Either the applicant or agency counsel may seek review of the 
initial decision on the fee application, or the Secretary (or his or her 
delegate, if any) may decide to review the decision on his or her own 
initiative, in accordance with the Department's review or appeals 
procedures applicable to the underlying proceeding. If neither the 
applicant nor agency counsel seeks review and the Secretary (or his or 
her delegate, if any) does not take review on his or her own initiative, 
the initial decision on the application shall become a final decision of 
the Department in the same manner as a decision in the underlying 
proceeding becomes final. Whether to review a decision is a matter 
within the discretion of the Secretary (or his or her delegate, if any). 
If review is taken, the Department will issue a final decision on the 
application or remand the application to the adjudicative officer for 
further proceedings.
    (b) Either party may seek reconsideration of the decision on the fee 
application in accordance with Rule 29, 24 CFR 20.10.



Sec.  14.340  Judicial review.

    Judicial review of final departmental decisions on awards may be 
sought as provided in 5 U.S.C. 504(c)(2).



Sec.  14.345  Payment of award.

    An applicant seeking payment of an award shall submit a copy of the 
final decision granting the award to: Director, Office of Finance and 
Accounting, Room 2202, Department of Housing and Urban Development, 
Washington, DC 20410, with a copy to: Associate General Counsel for 
Equal Opportunity and Administrative Law, Room 10244, Department of 
Housing and Urban Development, Washington, DC 20410. A statement that 
review of the underlying decision is not being sought in the United 
States courts, or that the process for seeking review of the award, if 
initiated, has been completed, must also be included. The agency will 
pay the amount awarded to the applicant within 60 days, unless judicial 
review of the award or of the underlying decision of the adversary 
adjudication has been sought by the applicant or any other party to the 
proceeding.



PART 15_PUBLIC ACCESS TO HUD RECORDS UNDER THE FREEDOM OF INFORMATION
ACT AND TESTIMONY AND PRODUCTION OF INFORMATION BY HUD EMPLOYEES
--Table of Contents



                      Subpart A_General Provisions

Sec.
15.1 General provisions.
15.2 Definitions.

      Subpart B_Procedures for Disclosure of Records Under the FOIA

15.101 Proactive disclosures of department records.
15.102 Requirements for making requests for records.
15.103 Timing of responses to requests.
15.104 Procedures for processing FOIA requests.
15.105 Responses to requests.
15.106 Fees.
15.107 Documents generally protected from disclosure.
15.108 Business information.
15.109 Appeals.
15.110 HUD response to appeals.

 Subpart C_Production of Material or Provision of Testimony in Response 
         to Demands in Legal Proceedings Among Private Litigants

15.201 Purpose and scope.
15.202 Production of material or provision of testimony prohibited 
          unless approved.
15.203 Making a demand for production of material or provision of 
          testimony.
15.204 Consideration of demands for production of material or provision 
          of testimony.
15.205 Method of production of material or provision of testimony.
15.206 Procedure in the event of an adverse ruling regarding production 
          of material or provision of testimony.

 Subpart D_Production of Material or Provision of Testimony in Response 
  to Demands in Legal Proceedings in Which the United States Is a Party

15.301 Purpose and scope.
15.302 Production of material or provision of testimony prohibited 
          unless approved.

[[Page 183]]

15.303 Procedure for review of demands for production of material or 
          provision of testimony in any legal proceeding in which the 
          United States is a party.
15.304 Consideration of demands for production of material or provision 
          of testimony.
15.305 Method of production of material or provision of testimony.

Appendix A to Part 15--Location Information for HUD FOIA Reading Rooms 
          and Contact Information for Regional Counsel

    Authority: 42 U.S.C. 3535(d), 5 U.S.C. 552.



                      Subpart A_General Provisions

    Source: 80 FR 49144, Aug. 17, 2015, unless otherwise noted.



Sec.  15.1  General provisions.

    (a) Scope. Requests for material from HUD will be processed as set 
forth in this part. The Federal Housing Administration and the 
Government National Mortgage Association are components of HUD and are 
also covered by this part.
    (b) Subpart B. Subpart B of this part contains the rules that HUD 
follows in processing requests for records under the Freedom of 
Information Act (FOIA) (5 U.S.C. 552). These rules should be read 
together with the FOIA, which provides additional information about 
access to records maintained by HUD. Information routinely provided to 
the public as part of a regular Department activity may be provided to 
the public without following this subpart.
    (c) Subpart C. Subpart C of this part describes the procedures to be 
followed and standards to be applied in processing demands for the 
production of material or provision of testimony in legal proceedings 
among private litigants.
    (d) Subpart D. Subpart D of this part describes the procedures to be 
followed and standards to be applied in processing demands for the 
production of material or provision of testimony in legal proceedings in 
which the United States is a party.
    (e) Inspector General. Subparts B and C of this part do not apply to 
the Office of Inspector General. The procedures that apply to the Office 
of Inspector General are described in parts 2002 and 2004 of this title.



Sec.  15.2  Definitions.

    (a) The following definitions apply to this part.
    Agency record means any documentary material that is either created 
or obtained by an agency in the transaction of agency business and is 
under agency control. ``Agency record'' does not include records that 
are not already in existence and which would have to be created 
specifically to meet a request.
    Business information means commercial or financial information 
provided to HUD by a submitter that arguably is protected from 
disclosure under Exemption 4 (42 U.S.C. 552(b)(4)) of the FOIA.
    FOIA means the Freedom of Information Act (5 U.S.C. 552).
    HUD means the Department of Housing and Urban Development.
    Review means the examination of a record located in response to a 
request in order to determine whether any portion of it is exempt from 
disclosure. Review time includes processing any record for disclosure 
(for example, doing all that is necessary to redact it and prepare it 
for disclosure). Review costs are recoverable even if a record 
ultimately is not disclosed. Review time includes time spent considering 
any formal objection to disclosure, made by a business submitter under 
Sec.  15.108, but does not include time spent resolving general legal or 
policy issues regarding the application of exemptions.
    Search means the process of looking for and retrieving records or 
information responsive to a request. It includes page-by-page or line-
by-line identification of information within records and also includes 
reasonable efforts to locate and retrieve information from records 
maintained in electronic form or format.
    Secretary means the Secretary of Housing and Urban Development.
    Submitter means any person or entity that provides business 
information, directly or indirectly, to HUD. The term includes, but is 
not limited to, corporations, State governments, and foreign 
governments.
    (b) The following definitions apply to subparts C and D of this 
part.

[[Page 184]]

    Appropriate Associate General Counsel means the Associate General 
Counsel for Litigation or the Associate General Counsel for HUD 
Headquarters employees in those programs for which the Associate General 
Counsel provides legal advice.
    Appropriate Regional Counsel means the Regional Counsel for the 
regional office having delegated authority over the project or activity 
with respect to which the information is sought. For assistance in 
identifying the Appropriate Regional Counsel, see appendix A to this 
part.
    Authorized Approving Official means the Secretary, General Counsel, 
Appropriate Associate General Counsel, or Appropriate Regional Counsel.
    Demand means a subpoena, order, or other demand of a court or other 
authority that is issued in a legal proceeding and any accompanying 
submissions.
    Employee of the Department means a current or former officer or 
employee of the United States appointed by or subject to the supervision 
of the Secretary, but does not include an officer or employee covered by 
part 2004 of this title.
    Good cause means necessary to prevent a miscarriage of justice or to 
promote a significant interest of the Department.
    Legal proceeding includes any proceeding before a court of law or 
other authority; e.g., an administrative board or commission, a hearing 
officer, an arbitrator, or other body conducting a quasi-judicial or 
legislative proceeding.
    Legal proceeding among private litigants means any legal proceeding 
in which the United States is not a party.
    Legal proceeding in which the United States is a party means any 
legal proceeding including as a named party the United States, the 
Department of Housing and Urban Development, any other Federal executive 
or administrative agency or department, or any official thereof in his 
official capacity.
    Material means either documents or information contained in, or 
relating to contents of, the files of the Department, or documents or 
information acquired by any person, while such person was an employee of 
the Department, as a part of the performance of his or her official 
duties or because of his or her official status.
    Production means to produce material by any means other than through 
the provision of oral testimony.
    Testimony means any oral or written statements made in litigation 
under oath or penalty of perjury.
    United States means the Federal Government of the United States 
(including the Department), the Secretary, and any employees of the 
Department in their official capacities.



      Subpart B_Procedures for Disclosure of Records Under the FOIA

    Source: 80 FR 49145, Aug. 17, 2015, unless otherwise noted.



Sec.  15.101  Proactive disclosures of department records.

    (a) In General. Records that are required to be made available for 
public inspection in an electronic format are accessible on the 
Department's Web site at http://www.hud.gov/FOIA. Published agency 
records, whether or not they are available for purchase, are made 
available for examination. Each HUD office (headquarters and field) has 
a FOIA Public Liaison that can assist individuals in locating records. A 
list of the Department's FOIA Public Liaisons is available at http://
www.hud.gov/FOIA.
    (b) Electronic FOIA reading room. As required by 5 U.S.C. 552(a)(2), 
HUD makes records created on or after November 1, 1996, available 
through its electronic FOIA Reading Room, located on HUD's FOIA Web site 
at http://www.hud.gov/FOIA. These records include:
    (1) Final opinions and orders.
    (2) Public access to high-value, machine readable datasets via 
http://www/data/gov.
    (3) Statements of policy and interpretation, including:
    (i) HUD's Client and Information Policy Systems (HUDCLIPS);
    (ii) Housing policy;
    (iii) Public and Indian Housing policy and regulations;
    (iv) Public and Indian Housing policy and guidance (PHA Plans); and

[[Page 185]]

    (v) Community Planning and Development policy and guidance.
    (4) Administrative staff manuals.
    (5) HUD's online library.
    (6) Fair housing information.
    (7) Copies of all records, regardless of form or format that have 
been released to any person under Sec.  15.105; and
    (i) Because of the nature of their subject matter, the agency 
determines that the records have become or are likely to become the 
subject of subsequent requests for substantially the same records; or
    (ii) Have been requested three or more times.
    (8) Report for the preceding fiscal year submitted to the U.S. 
Attorney General and the Director of the Office of Government 
Information Services (OGIS) as required by 5 U.S.C. 552(e) and the raw 
statistical data used in each report. This report will be made 
available:
    (i) Without charge, license, or registration requirement;
    (ii) In an aggregated, searchable format; and
    (iii) In a format that may be downloaded in bulk.
    (c) Frequently requested materials. HUD also makes frequently 
requested materials available on its FOIA Web site at http://
www.hud.gov/FOIA. These frequently requested materials include 
information related to:
    (1) Highest-scoring funding grant applications.
    (2) Purchase charge cardholders.
    (3) FHA refunds.
    (4) FHA-approved lenders.
    (5) Homes for sale.
    (6) How to buy a HUD home.
    (7) How to apply for public housing and Section 8 housing.
    (8) Housing for the elderly.
    (9) Housing for individuals with disabilities.
    (10) HUD contracting home page.
    (11) FHA mortgage insurance programs.
    (12) HUD handbooks.
    (13) HUD programs.
    (14) HUD telephone directory.
    (15) HUD homes listing.
    (16) HUD's organization.
    (17) Multifamily housing data.
    (18) Public housing authority contact information.
    (19) Weekly listing of multifamily properties for sale.
    (20) Catalog of Federal Domestic Assistance (CFDA) materials.
    (21) Grants.
    (22) FOIA request logs.

[80 FR 49145, Aug. 17, 2015, as amended at 82 FR 3622, Jan. 12, 2017]



Sec.  15.102  Requirements for making requests for records.

    (a) In general. Any request for HUD records must be made in writing 
and submitted to the FOIA Public Liaison in the HUD field office where 
the records are located or to the Office of the Executive Secretariat in 
HUD Headquarters if the request is for records located in HUD 
Headquarters.
    (b) HUD field office records. Requests for records located in a HUD 
field office may be submitted by mail (including courier or delivery 
service), email, or facsimile to the FOIA Public Liaison at the field 
office.
    (c) HUD headquarters records. Requests for records located in HUD 
Headquarters may be submitted via an electronic request form on HUD's 
FOIA Web site at http://www.hud.gov/FOIA. Requests can also be submitted 
in person or by mail (including courier or delivery service), email, or 
facsimile to the Office of the Executive Secretariat in HUD 
Headquarters.
    (d) Form of requests. FOIA requests should:
    (1) Be in writing and clearly identifiable as a FOIA request. To 
facilitate identification, the requester should place the phrase ``FOIA 
Request'' on the front of the envelope or on the cover sheet or other 
transmittal document used when submitting the request in person or by 
mail, email, facsimile, or electronic request form;
    (2) Include, whenever possible, detailed and specific information 
about each record sought, such as the date, title or name, author, 
recipient, and subject matter of the record. The more specific the FOIA 
request for records, the more likely HUD officials will be able to 
locate the records requested. Requests for categories of information 
should be for specific and well-defined categories. Insufficient 
descriptions may lead HUD officials to contact the

[[Page 186]]

requester to seek additional information for their record search;
    (3) Indicate the form or format in which the requester would like 
the record made available, if the requester has a preference;
    (4) Specify the fee amount the requester is willing to pay. In 
general, HUD provides records at no cost up to $25. Requesters are 
required to agree to pay for any costs that exceed $25. Requesters may 
also request a dollar amount above which HUD should consult with them 
before they agree to pay the fee. If a requester seeks a fee waiver or 
reduction, the requester should include this request with the FOIA 
disclosure request and should describe, consistent with Sec.  15.106(k), 
how the disclosure of the requested information is likely to contribute 
significantly to public understanding of the operations or activities of 
the government and is not primarily in the commercial interest of the 
requester;
    (5) Indicate the fee category that the requester believes applies to 
each of his or her requests (fee categories are defined in Sec.  
15.106(b));
    (6) Include verification information of the requester's identity, if 
the requester requests agency records pertaining to the requester, a 
minor, or an individual who is legally incompetent. Information about 
what constitutes acceptable verification information can be found in 
HUD's Privacy Act regulations in 24 CFR part 16;
    (7) Contain signed authorization from the other person, if the 
requester makes a request on another person's behalf for information 
about that person. If necessary, HUD will inform the requester of the 
authorization needed from the other person and give the requester an 
opportunity to provide such authorization. Requests for information 
about another person should be accompanied by either written, notarized 
authorization or proof that the individual is deceased (for example, a 
copy of a death certificate or an obituary), or the request will be 
deemed insufficient; and
    (8) Contain a detailed explanation of the basis for the request, if 
the requester makes a request for expedited processing as provided by 
Sec.  15.104(c). The requester should also include a statement 
certifying the truth of the circumstances alleged or other evidence, 
acceptable to HUD, of the requester's compelling need.



Sec.  15.103  Timing of responses to requests.

    (a) In general. HUD will generally make a determination whether to 
comply with a FOIA request within 20 working days, depending on the size 
of the request. The 20-day period will begin on the day the request is 
received by the appropriate component of HUD, but in any event not later 
than 10 working days after the request is received by any component of 
HUD designated to receive FOIA requests.
    (b) Tolling the 20-day time period. Under the OPEN Government Act of 
2007, HUD may toll the 20-day period:
    (1) One time to make a reasonable request for additional information 
from the requester; or
    (2) As many times as necessary to clarify issues regarding fee 
assessment with the requester. The agency's receipt of the requester's 
response to the agency's request for information or resolution of all 
fee assessment issues ends the tolling period.
    (c) Extension of time periods for processing a request. In unusual 
circumstances, as defined in this paragraph, HUD may extend the time 
period for processing a FOIA request. In such circumstances, HUD will 
provide the requester with written notice setting forth the unusual 
circumstances for the extension and the date on which a determination is 
expected to be dispatched. If processing a request would require more 
than 10 working days beyond the general time limit established in 
paragraph (a) of this section, HUD will offer the requester an 
opportunity to limit the scope of the request so that HUD may process it 
within the extra 10-day working period or arrange an alternative time 
period within which the FOIA request will be processed. To aid the 
requester, HUD shall make available its FOIA Public Liaison, who shall 
assist in the resolution of any disputes between the requester and HUD, 
and notify the requester of the right of the requester to seek dispute 
resolution services from the Office of Government Information Services.

[[Page 187]]

For purposes of this section, unusual circumstances include:
    (1) The need to search for and collect records not located in the 
office processing the request;
    (2) The need to search for, collect, and appropriately examine a 
voluminous amount of separate and distinct records; or
    (3) The need to consult with another agency or two or more HUD 
components having a substantial interest in the determination of the 
FOIA request.
    (d) Aggregating multiple requests. (1) HUD may aggregate multiple 
requests in cases where unusual circumstances exist and HUD determines 
that:
    (i) Certain requests from the same requester or from a group of 
requesters acting in concert actually constitute a single request; and
    (ii) The requests involve clearly related matters.
    (2) Aggregation of requests for this purpose will be conducted 
independent of aggregation of requests for fee purposes under Sec.  
15.106(h).

[80 FR 49145, Aug. 17, 2015, as amended at 82 FR 3622, Jan. 12, 2017]



Sec.  15.104  Procedures for processing FOIA requests.

    (a) In general. HUD will ordinarily respond to FOIA requests 
according to their order of receipt.
    (b) Tracking number. FOIA requests will be logged in the order that 
they are received and be assigned a tracking number. A requester should 
use the tracking number to identify his or her request when contacting 
the FOIA office for any reason.
    (c) Expedited processing. (1) Requests and appeals will be taken out 
of order and given expedited treatment whenever it is determined that 
they involve:
    (i) Circumstances in which the lack of expedited treatment could 
reasonably be expected to pose an imminent threat to the life or 
physical safety of an individual;
    (ii) An urgency to inform the public about an actual or alleged 
Federal Government activity, if made by a person primarily engaged in 
disseminating information; or
    (iii) The loss of substantial due process rights.
    (2) A request for expedited processing may be made at the time of 
the initial request for records or at any later time. For a prompt 
determination, a request for expedited processing should be received by 
the proper office designated to receive FOIA requests as provided in 
Sec.  15.102.
    (3) A requester who seeks expedited processing should submit a 
statement, certified to be true and correct to the best of that person's 
knowledge and belief, explaining in detail the basis for requesting 
expedited processing. For example, a requester who makes a request under 
paragraph (c)(1)(ii) of this section, if not a full-time member of the 
news media, should establish that he or she is a person primarily 
engaged in disseminating information, though it need not be his or her 
sole occupation. A requester making a request under paragraph (c)(1)(ii) 
of this section also should establish a particular urgency to inform the 
public about the government activity involved in the request, beyond the 
public's right to know about government activity generally. The 
formality of certification may be waived as a matter of administrative 
discretion.
    (4) HUD will make a determination within 10 calendar days of receipt 
by the appropriate component of HUD, as provided in Sec.  15.103, 
whether to grant or deny a request for expedited processing and notify 
the requester of HUD's determination. FOIA requests accepted for 
expedited processing will be processed as soon as practicable and on a 
priority basis.
    (d) Multitrack processing. (1) For requests that do not qualify for 
expedited processing, HUD may use two or more processing tracks by 
distinguishing between simple and complex FOIA requests based on the 
following: The time and work necessary to process the FOIA request and 
the volume of agency records responsive to the FOIA request.
    (2) When HUD uses multitrack processing, it may provide requesters 
in its slower track an opportunity to limit the scope of their requests 
in order to qualify for faster processing within the specified limits of 
HUD's faster track. When HUD chooses to provide this option, HUD will 
contact the requester

[[Page 188]]

by telephone, letter, or email, whichever is more efficient in each 
case.

[80 FR 49145, Aug. 17, 2015, as amended at 82 FR 3622, Jan. 12, 2017]



Sec.  15.105  Responses to requests.

    (a) Acknowledgements of requests. The FOIA office in the Office of 
the Executive Secretariat in HUD Headquarters and FOIA Public Liaison in 
each HUD field office will ordinarily send an acknowledgement letter to 
the requester that will confirm receipt of the request by the 
appropriate HUD office and provide an assigned tracking number, as 
provided by Sec.  15.104(b), for further reference.
    (b) Consultations, coordination, and referrals. When HUD receives a 
request for a record in its possession, it shall determine whether 
another agency of the Federal Government is better able to determine 
whether the record is exempt from disclosure under the FOIA or whether 
it should be disclosed as a matter of administrative discretion. If HUD 
determines that it is best able to determine whether the record is 
exempt from disclosure, then it shall do so. If HUD determines that it 
is not best able to make that determination, then it shall either:
    (1) Respond to the request regarding that record, after consulting 
with the agency best able to determine whether to disclose it and with 
any other agency that has a substantial interest in it; or
    (2) Refer the responsibility for responding to the request regarding 
that record to the agency that originated the record, but only if that 
agency is subject to the FOIA. Ordinarily, the agency with which the 
record originated will be presumed to be best able to determine whether 
to disclose it.
    (c) Fee estimates. HUD will notify the requester if HUD's estimate 
of the fee is more than the requester has agreed to pay. Consistent with 
Sec.  15.106(e), the requester shall have 15 working days to agree to 
pay the higher fee.
    (d) Forms of response. Once HUD makes a determination regarding 
whether to comply with a request pursuant to time limits established in 
Sec.  15.103(a), HUD shall immediately notify the requester of such 
determination and the reasons therefor, and the requester's right to 
seek assistance from the FOIA Public Liaison.
    (1) Granting requests in whole or in part. If HUD makes a 
determination to grant a request in whole or in part, it will notify the 
requester in writing. HUD will make a record available in the form or 
format requested, if the record is readily reproducible in that format. 
HUD will inform the requester in the notice of any fee charged under 
Sec.  15.106 and disclose records to the requester promptly upon payment 
of any applicable fee. Records disclosed in part will be marked or 
annotated to show the amount of information deleted and the exemption(s) 
under which each deletion is made, unless doing so would harm an 
interest protected by an applicable FOIA exemption. The location of the 
information deleted and the exemption(s) under which the deletion is 
made will be indicated directly on the record itself, if technically 
feasible.
    (2) Adverse determination of requests. If a determination is made to 
deny a request in any respect, HUD shall notify the requester of that 
determination in writing. Adverse determinations, or denials of 
requests, include: A determination to withhold any requested record, in 
whole or in part; a determination that a requested record does not 
exist, cannot be located, or has not been retained; a determination that 
a record is not readily reproducible in the form or format sought by the 
requester; a determination that what has been requested is not a record 
subject to the FOIA; a determination on any disputed fee matter, 
including a denial of a request for a fee waiver or reduction; and a 
denial of a request for expedited treatment. The denial letter shall be 
signed by the Director of the Office of the Executive Secretariat, or a 
designee of the Director, in HUD Headquarters or the FOIA Public Liaison 
for the HUD field office where the adverse determination was made, and 
shall include:
    (i) The name and title or position of the person responsible for the 
denial;
    (ii) A brief statement of the reason(s) for the denial, including 
any FOIA exemption applied by HUD in denying the request;
    (iii) An estimate of the volume of records or information withheld, 
when

[[Page 189]]

appropriate, in number of pages or in some other reasonable form of 
estimation. This estimate does not need to be provided if the volume is 
otherwise indicated through deletions on records disclosed in part, or 
if providing an estimate would harm an interest protected by an 
applicable exemption; and
    (iv) Notice of the right of the requester to appeal to the head of 
the agency, within a period determined by the head of the agency that is 
not less than 90 days after the date of such adverse determination; and
    (v) Notice of the right of the requester to seek dispute resolution 
services from the FOIA Public Liaison of the agency or the Office of 
Government Information Services; and
    (vi) A statement that the denial may be appealed as provided by 
Sec.  15.109 and a description of the requirements for appeal.

[80 FR 49145, Aug. 17, 2015, as amended at 82 FR 3622, Jan. 12, 2017]



Sec.  15.106  Fees.

    (a) In general. HUD will charge for processing requests under the 
FOIA in accordance with paragraph (c) of this section, except where fees 
are limited under paragraph (d) of this section or where a waiver or 
reduction of fees is granted under paragraph (k) of this section. HUD 
shall collect all applicable fees before sending copies of requested 
records to a requester. In order to resolve any fee issues that arise 
under this section, HUD may contact a requester for additional 
information. Requesters shall pay fees by check or money order made 
payable to the United States Treasury.
    (b) Definitions. For purposes of this section:
    Commercial use means a request from or on behalf of a person who 
seeks information for a use or purpose that furthers his or her 
commercial, trade, or profit interests, which can include furthering 
those interests through litigation. HUD shall determine, whenever 
reasonably possible, the use to which a requester will put the requested 
records. When it appears that the requester will put the records to a 
commercial use, either because of the nature of the request itself or 
because HUD has reasonable cause to doubt a requester's stated use, HUD 
shall provide the requester a reasonable opportunity to submit further 
clarification.
    Direct costs means those expenses that HUD actually incurs in 
searching for and duplicating and, in the case of commercial use 
requests, reviewing records to respond to a FOIA request. Direct costs 
include, for example, the salary of the employee performing the work and 
the cost of operating computers and other electronic equipment, such as 
for mainframe computer run time. Not included in direct costs are 
overhead expenses such as the costs of space and heating or lighting a 
facility.
    Duplication means the process of making a copy of a document 
necessary to respond to a FOIA request. Such copies can take the form of 
paper copy, audiovisual materials, or machine readable documentation 
(e.g., diskette), among others. HUD shall honor a requester's specified 
preference of form or format of disclosure if the record is readily 
reproducible with reasonable efforts in the requested form or format by 
the office responding to the request.
    Educational institution means:
    (i)(A) A preschool;
    (B) A public or private elementary or secondary school;
    (C) An institution of graduate higher education;
    (D) An institution of undergraduate higher education;
    (E) An institution of professional education; or
    (F) An institution of vocational education, that primarily (or 
solely) operates a program or programs of scholarly research.
    (ii) To be in this category, a requester should show that the 
request is authorized by, and is made under the auspices of, a 
qualifying institution and that the records are not sought for a 
commercial use but are sought to further scholarly research. Records 
requested for the intention of fulfilling credit requirements are not 
considered to be sought for a scholarly purpose.
    Other requester means any requester that does not fall within the 
categories of requesters described in this section.

[[Page 190]]

    Noncommercial scientific institution means an institution that is 
not operated on a ``commercial'' basis, as defined in this section, and 
that is operated solely for the purpose of conducting scientific 
research the results of which are not intended to promote any particular 
product or industry. To be in this category, a requester should show 
that the request is authorized by, and is made under the auspices of, a 
qualifying institution and that the records are not sought for a 
commercial use but are sought to further scientific research.
    Representative of the news media, or news media requester, means any 
person actively gathering news for an entity that is organized and 
operated to publish or broadcast news to the public, uses its editorial 
skills to turn the raw materials into a distinct work, and distributes 
that work to an audience. The term news means information that is about 
current events or that would be of current interest to the public. 
Examples of news media entities include television or radio stations 
broadcasting to the public at large and publishers of periodicals that 
disseminate news and make their products available to the general public 
through a variety of means. For freelance journalists to be regarded as 
working for a news media entity, they should demonstrate a solid basis 
for expecting publication through a news media entity. A publication 
contract would be the clearest proof, but HUD will also look to the past 
publication record of a requester in making this determination. To be in 
this category a requester should not be seeking the requested records 
for a commercial use. However, a request for records supporting the news 
dissemination function of the requester shall not be considered to be 
for a commercial use.
    (c) Fees--(1) Schedule. In responding to FOIA requests, HUD will use 
the fee schedule set out in the following table, unless a waiver or 
reduction of fees has been granted under paragraph (k) of this section.

                                                FOIA Fee Schedule
----------------------------------------------------------------------------------------------------------------
                                                                              News media,
                                                                              educational
                                                                            institution, or
            Activity                     Rate           Commercial use       noncommercial      Other requester
                                                           requester          scientific
                                                                              institution
                                                                               requester
----------------------------------------------------------------------------------------------------------------
(i) Professional search.........  $13 per quarter     Applies...........  Does not apply....  Applies. No charge
                                   hour.                                                       for first 2 hours
                                                                                               of cumulative
                                                                                               search time.
(ii) Professional review........  $13 per quarter     Applies...........  Does not apply....  Does not apply.
                                   hour.
(iii) Clerical search...........  $6 per quarter      Applies...........  Does not apply....  Applies. No charge
                                   hour.                                                       for first 2 hours
                                                                                               of cumulative
                                                                                               search time.
(iv) Clerical review............  $6 per quarter      Applies...........  Does not apply....  Does not apply.
                                   hour.
(v) Programming services          Direct costs        Applies...........  Does not apply....  Applies.
 required.                         associated with
                                   search.
(vi) Duplication costs..........  $0.10 per page....  Applies...........  Applies. No charge  Applies. No charge
                                                                           for first 100       for first 100
                                                                           pages.              pages.
(vii) Duplication costs--tape,    Actual cost.......  Applies...........  Applies...........  Applies.
 CD ROM or diskette.
----------------------------------------------------------------------------------------------------------------

    (2) Search. (i) Search fees will be charged for all requests other 
than requests made by educational institutions, noncommercial scientific 
institutions, or representatives of the news media, subject to the 
limitations of paragraph (d) of this section. HUD may charge for time 
spent searching even if HUD does not locate any responsive record or if 
HUD withholds the record(s) located as entirely exempt from disclosure.
    (ii) For each hour spent by personnel searching for requested 
records, including electronic searches that do not require new 
programming, the fees will be $13 per quarter hour for professional 
personnel and $6 per quarter hour for clerical personnel.
    (iii) Requesters will be charged the direct costs associated with 
conducting

[[Page 191]]

any search that requires the creation of a new program to locate the 
requested records.
    (iv) For requests requiring the retrieval of records from any 
Federal records center, certain additional costs may be incurred in 
accordance with the Transactional Billing Rate Schedule established by 
the National Archives and Records Administration.
    (3) Duplication. Duplication fees will be charged to all requesters, 
subject to the limitations of paragraph (d) of this section. For a paper 
photocopy of a record (no more than one copy of which need be supplied), 
the fee will be $0.10 per page. For copies in digital format, HUD will 
charge the direct costs, including operator time, of producing the copy. 
Where paper documents must be scanned in order to comply with a 
requester's preference to receive the records in an electronic format, 
the requester shall pay the direct costs associated with scanning those 
materials. For other forms of duplication, HUD will charge the direct 
costs.
    (4) Review. Review fees will be charged to requesters who make a 
commercial use request. Review fees will be charged only for the initial 
record review (the review done where HUD determines whether an exemption 
applies to a particular record or record portion, at the initial request 
level). No charge will be made for review at the administrative appeal 
level for an exemption already applied. However, records or portions of 
records withheld under an exemption that is subsequently determined not 
to apply may be reviewed again to determine whether any other exemption 
not previously considered applies. The cost of that review is chargeable 
where it is made necessary by such a change of circumstances. Fees for 
the review time will be $13 per quarter hour for professional personnel 
and $6 per quarter hour for clerical personnel.
    (d) Restrictions on charging fees. (1) No search fee will be charged 
for requests by educational institutions, noncommercial scientific 
institutions, or representatives of the news media. In addition, except 
as provided in paragraphs (d)(5), (d)(6), and (d)(7) of this section, 
HUD shall not assess any search fees (or, for requesters that are 
educational institutions, noncommercial scientific institutions or 
representatives of the news media requesting records not sought for 
commercial use, duplication fees) if HUD has failed to comply with any 
time limit described in Sec.  15.103.
    (2) Search and review fees will be charged in quarter-hour 
increments. HUD will round up a quarter hour when professional and 
clerical search and review time exceeds a quarter-hour increment.
    (3) Except for requesters seeking records for a commercial use, HUD 
will provide without charge:
    (i) The first 100 pages of duplication (or the cost equivalent); and
    (ii) The first 2 hours of search (or the cost equivalent).
    (4) No fee will be charged whenever a total fee calculated under 
paragraph (c) of this section is less than HUD's cost to process the 
payment. Currently, whenever a total fee calculated is $25 or less, no 
fee will be charged.
    (5) If HUD determines that unusual circumstances apply and HUD 
provides timely written notice to the requester pursuant to requirements 
provided in Sec.  15.103(c), a failure to comply with any time limit as 
described in Sec.  15.103 is excused for an additional 10 days. If HUD 
fails to comply with the extended time limit, HUD may not assess any 
search fees (or for requesters that are educational or noncommercial 
scientific institutions or representatives of the news media requesting 
records not sought for commercial use, duplication fees).
    (6) If unusual circumstances apply and more than 5000 pages are 
necessary to respond to the request, HUD may charge search fees or, for 
requesters that are educational or noncommercial scientific institutions 
or representatives of the news media requesting records not sought for 
commercial use, duplication fees, if timely written notice has been made 
to the requester pursuant to requirements provided in Sec.  15.103(c) 
and HUD has discussed with the requester through written mail, 
electronic mail, or telephone (or made not less than 3 good-faith 
attempts to do so) how the requester could effectively limit the scope 
of the request as stipulated in Sec.  15.103(c).

[[Page 192]]

    (7)(i) If a court has determined that exceptional circumstances 
exist, a failure to comply with any time limit as described in Sec.  
15.103 shall be excused for the length of time provided by the court 
order.
    (ii) For purposes of this section, the term ``exceptional 
circumstances'' does not include a delay that results from a predictable 
workload of requests, unless HUD demonstrates reasonable progress in 
reducing its backlog of pending requests. However, refusal by the 
requester to reasonably modify the scope of a request or arrange an 
alternative time frame for processing a request (or a modified request) 
after HUD gives them an opportunity to do so shall be considered a 
factor in determining whether exceptional circumstances exist.
    (e) Notice of anticipated fees in excess of $25. When HUD determines 
or estimates that the fees to be charged under this section will amount 
to more than $25, HUD will notify the requester of the actual or 
estimated amount of the fees, unless the requester has indicated a 
willingness to pay fees as high as the amount anticipated. If only a 
portion of the fee can be readily estimated, HUD shall advise the 
requester that the estimated fee may be only a portion of the total fee. 
In cases in which a requester has been notified that actual or estimated 
fees amount to more than $25, the request will be held in abeyance for 
15 working days. Further work will not be done on that request until the 
requester has either made a firm commitment to pay the anticipated total 
fee, or has made payment in advance if the total fee exceeds $250. Any 
such agreement should be memorialized by the requester in writing, 
should indicate a given dollar amount, and should be received by HUD 
within the time period specified by HUD in its notice to the requester. 
If the requester does not provide a firm commitment to pay the 
anticipated fee within the time period specified by HUD, the request 
will be closed. A notice under this paragraph will offer the requester 
an opportunity to discuss the matter of fees with HUD personnel in order 
to reformulate the request to meet the requester's needs at a lower 
cost. HUD is not required to accept payments in installments.
    (f) Charges for other services. Although not required to provide 
special services, if HUD chooses to do so as a matter of administrative 
discretion, HUD will charge the direct costs of providing these 
services. Examples of such services include certifying that records are 
true copies, providing multiple copies of the same document, or sending 
documents by means other than ordinary mail.
    (g) Charging interest. HUD may charge interest on any unpaid bill 
starting on the 31st day following the date of billing the requester. 
Interest charges will be assessed at the rate provided in 31 U.S.C. 3717 
and will accrue from the date of the billing until payment is received 
by HUD. HUD will follow the provisions of the Debt Collection Act of 
1982 (Pub. L. 97-365, 96 Stat. 1749), as amended, and its administrative 
procedures, including the use of consumer reporting agencies, collection 
agencies, and offset.
    (h) Aggregating requests. If HUD reasonably believes that a 
requester or a group of requesters acting together is attempting to 
divide a request into a series of requests for the purpose of avoiding 
fees, HUD may aggregate those requests and charge accordingly. HUD may 
presume that multiple requests of this type made within a 30-day period 
have been made in order to avoid fees. Where requests are separated by a 
longer period, HUD will aggregate them only where there is a reasonable 
basis for determining that aggregation is warranted under all the 
circumstances involved. Multiple requests involving unrelated matters 
will not be aggregated. Aggregation of requests for fee purposes under 
this paragraph will be conducted independent of aggregation of requests 
under Sec.  15.103(d).
    (i) Advance payments. (1) For requests other than those described in 
paragraphs (i)(2) and (3) of this section, HUD will not require the 
requester to make an advance payment before work is begun or continued 
on a request. Payment owed for work already completed, such as 
prepayment before copies are sent to a requester, is not an advance 
payment.

[[Page 193]]

    (2) If HUD determines or estimates that a total fee to be charged 
under this section will be more than $250, it may require the requester 
to make an advance payment of an amount up to the amount of the entire 
anticipated fee before beginning to process the request, except where it 
receives a satisfactory assurance of full payment from a requester who 
has a history of prompt payment.
    (3) If a requester has previously failed to pay a properly charged 
FOIA fee to HUD within 30 days of the date of billing, before HUD begins 
to process a new request or continues to process a pending request from 
that requester, HUD will require the requester to pay the full amount 
due, plus any applicable interest, and to make an advance payment of the 
full amount of any anticipated fee. If HUD has a reasonable basis to 
believe that a requester has misrepresented his or her identity in order 
to avoid paying outstanding fees, HUD may require that the requester 
provide proof of identity.
    (4) When HUD requires advance payment, the request will be held in 
abeyance for 15 working days to allow the requester an opportunity to 
make payment in advance and/or modify the scope of the request. If the 
requester does not pay the advance payment or modify the scope of the 
request within the allotted time frame, the request will be closed.
    (j) Other statutes specifically providing for fees. The fee schedule 
in this section does not apply to fees charged under any statute that 
specifically requires an agency to set and collect fees for particular 
types of records. Where records responsive to requests are maintained 
for distribution by agencies operating such statutorily based fee 
schedule programs, HUD will inform requesters of the contact information 
for that source.
    (k) Requirements for waiver or reduction of fees. (1) Records 
responsive to a request will be furnished without charge or at a charge 
reduced below that established under paragraph (c) of this section if 
HUD determines, based on all available information, that the requester 
has demonstrated the following:
    (i) Disclosure of the requested information is in the public 
interest because it is likely to contribute significantly to public 
understanding of the operations or activities of the government; and
    (ii) Disclosure of the information is not primarily in the 
commercial interest of the requester.
    (2) To determine whether the first fee waiver requirement is met, 
HUD will consider the following factors:
    (i) The subject of the requested records should concern identifiable 
operations or activities of the Federal Government, with a connection 
that is direct and clear, not remote or attenuated.
    (ii) The disclosable portions of the requested records should be 
meaningfully informative about government operations or activities and 
``likely to contribute'' to an increased public understanding of those 
operations or activities. The disclosure of information that already is 
in the public domain, in either a duplicative or a substantially 
identical form, would not be as likely to contribute to such increased 
understanding, where nothing new would be added to the public's 
understanding.
    (iii) The disclosure should contribute to the understanding of a 
reasonably broad audience of persons interested in the subject, as 
opposed to the individual understanding of the requester. A requester's 
expertise in the subject area and ability and intention to effectively 
convey information to the public will be considered. It will be presumed 
that a representative of the news media will satisfy this consideration.
    (iv) The public's understanding of the subject in question, as 
compared to the level of public understanding existing prior to the 
disclosure, should be enhanced by the disclosure to a significant 
extent. However, HUD will not make value judgments about whether 
information at issue is ``important'' enough to be made public.
    (3) To determine whether the second fee waiver requirement is met, 
HUD will consider the following factors:
    (i) HUD will identify any commercial interest of the requester as 
defined in paragraph (b) of this section, or of any person on whose 
behalf the requester may be acting, that would be furthered

[[Page 194]]

by the requested disclosure. Requesters shall be given an opportunity in 
the administrative process to provide explanatory information regarding 
this consideration.
    (ii) A fee waiver or reduction is justified where the public 
interest standard is satisfied and that public interest is greater than 
that of any identified commercial interest in disclosure. HUD ordinarily 
will presume that where a news media requester has satisfied the public 
interest standard, the public interest will be the interest primarily 
served by disclosure to that requester. Disclosure to data brokers or 
others who merely compile and market government information for direct 
economic return will not be presumed to primarily serve the public 
interest.
    (4) Where only some of the records to be released satisfy the 
requirements for a waiver of fees, a waiver will be granted for those 
records.
    (5) Requests for the waiver or reduction of fees should address the 
factors listed in paragraphs (k)(2) and (3) of this section, insofar as 
they apply to each request. In deciding to grant waivers or reductions 
of fees, HUD will exercise its discretion to consider the cost 
effectiveness of its investment of administrative resources.

[80 FR 49145, Aug. 17, 2015, as amended at 82 FR 3622, Jan. 12, 2017]



Sec.  15.107  Documents generally protected from disclosure.

    (a) Classified documents. Exemption 1 (5 U.S.C. 552(b)(1)) protects 
classified national defense and foreign relations information. HUD 
seldom relies on this exception to withhold documents. However, where 
applicable, HUD will refer a request for records classified under 
Executive Order 13526 and the pertinent records to the originating 
agency for processing. HUD may refuse to confirm or deny the existence 
of the requested information if the originating agency determines that 
the fact of the existence of the information itself is classified.
    (b) The FOIA contains nine exemptions (5 U.S.C. 552(b)) that 
authorize agencies to withhold various records from disclosure. With 
regard to certain types of records, HUD generally applies the exemptions 
as follows:
    (1) Information prohibited from disclosure by another statute. 
Exemption 3 (5 U.S.C. 552(b)(3)) protects information that is prohibited 
from disclosure by another Federal law. HUD generally will not disclose 
competitive proposals prior to contract award, competitive proposals 
that are not set forth or incorporated by reference into the awarded 
contract, (see 41 U.S.C. 4702), or, during the selection process, any 
covered selection information regarding such selection, either directly 
or indirectly (see 42 U.S.C. 3537a).
    (2) Commercial or financial information. Exemption 4 (5 U.S.C. 
552(b)(4)) protects trade secrets and commercial or financial 
information obtained from a person that is privileged and confidential. 
HUD will handle this type of information as provided by Sec.  15.108.
    (3) Certain interagency or intra-agency communications. Exemption 5 
(5 U.S.C. 552(b)(5)) protects interagency or intra-agency communications 
that are protected by legal privileges, such as the attorney-client 
privilege, attorney work-product privilege, or communications reflecting 
the agency's deliberative process.
    (4) Personal privacy. Exemption 6 (5 U.S.C. 552(b)(6)) protects 
information involving matters of personal privacy. This information may 
include personnel, medical, and similar files the disclosure of which 
would constitute a clearly unwarranted invasion of personal privacy. 
Names, addresses, telephone numbers, and email addresses of persons 
residing in public or assisted housing or of borrowers in FHA-insured 
single family mortgage transactions generally will not be disclosed.
    (5) Certain interagency or intra-agency communications. Exemption 5 
(5 U.S.C. 552(b)(5)) protects interagency or intra-agency communications 
that are protected by legal privileges, such as the attorney-client 
privilege, attorney work-product privilege, or communications reflecting 
the agency's deliberative process. The deliberative process privilege 
shall not apply to records created 25 years or more before the date on 
which the records were requested.
    (6) Supervision of financial institutions. Exemption 8 (5 U.S.C. 
552(b)(8)) protects information relating to the supervision of financial 
institutions. For

[[Page 195]]

purposes of Exemption 8, HUD is an ``agency responsible for the 
regulation and supervision of financial institutions'' for purposes of 
monitoring fair housing compliance.
    (7) Wells. Exemption 9 (5 U.S.C. 552(b)(9)) protects geological 
information on wells.

[80 FR 49145, Aug. 17, 2015, as amended at 82 FR 3623, Jan. 12, 2017]



Sec.  15.108  Business information.

    (a) In general. Business information obtained by HUD from a 
submitter will be disclosed under the FOIA only under this section. In 
making final confidentiality determinations under this section, HUD 
relies to a large extent upon the information furnished by the affected 
business to substantiate its claim of confidentiality. HUD may be unable 
to verify the accuracy of much of the information submitted by the 
affected business. HUD will comply with Executive Order 12600 and follow 
the procedure in this section by giving notice to the affected business 
and an opportunity for the business to present evidence of its 
confidentiality claim. If HUD is sued by a requester under the FOIA for 
nondisclosure of confidential business information, HUD expects the 
affected business to cooperate to the fullest extent possible in 
defending such a decision.
    (b) Designation of business information. A submitter of business 
information will use good faith efforts to designate, by appropriate 
markings, either at the time of submission or at a reasonable time 
thereafter, any portions of its submission that it considers to be 
protected from disclosure under Exemption 4. These designations will 
expire 10 years after the date of the submission unless the submitter 
requests, and provides justification for, a longer designation period.
    (c) Notice to submitters. HUD will provide a submitter with prompt 
written notice of a FOIA request or administrative appeal that seeks 
business information, wherever required under paragraph (d) of this 
section, in order to give the submitter an opportunity to object to 
disclosure of any specified portion of that information under paragraph 
(e) of this section. The notice will either describe the business 
information requested or include copies of the requested records or 
portions of records containing the information. When notification of a 
voluminous number of submitters is required, notification may be made by 
posting or publishing the notice in a place reasonably likely to 
accomplish notification.
    (d) Where notice is required. Notice will be given to a submitter 
wherever:
    (1) The information has been designated in good faith by the 
submitter as information considered protected from disclosure under 
Exemption 4; or
    (2) HUD has reason to believe that the information may be protected 
from disclosure under Exemption 4.
    (e) Opportunity to object to disclosure. HUD will allow a submitter 
a reasonable time to respond to the notice described in paragraph (c) of 
this section and will specify that time period within the notice. If a 
submitter has any objection to disclosure, the submitter should submit a 
detailed written statement specifying the grounds for withholding any 
portion of the information under any exemption of the FOIA and, in the 
case of Exemption 4, the submitter should show why the information is a 
trade secret or commercial or financial information that is privileged 
or confidential. HUD generally will not consider conclusory statements 
that particular information would be useful to competitors or would 
impair sales, or other similar statements, sufficient to justify 
confidential treatment. In the event that a submitter fails to respond 
to the notice within the time specified, the submitter will be 
considered to have no objection to the disclosure of the information. 
Information provided by the submitter that is not received until after 
the disclosure decision has been made will not be considered by HUD. 
Information provided by a submitter under this paragraph may itself be 
subject to disclosure under the FOIA.
    (f) Notice of intent to disclose. HUD will consider a submitter's 
objections and specific grounds for nondisclosure in deciding whether to 
disclose business information. Whenever HUD decides to disclose business 
information over the objection of a submitter, HUD will give the 
submitter written notice, which will include:

[[Page 196]]

    (1) A statement of the reason(s) why each of the submitter's 
disclosure objections was not sustained;
    (2) A description of the business information to be disclosed; and
    (3) A specified disclosure date, which shall be a reasonable time 
subsequent to the notice.
    (g) Exceptions to notice requirements. The notice requirements of 
paragraphs (c) and (f) of this section will not apply if:
    (1) HUD determines that the information should not be disclosed;
    (2) The information lawfully has been published or has been 
officially made available to the public; or
    (3) Disclosure of the information is required by statute (other than 
the FOIA) or by a regulation issued in accordance with the requirements 
of Executive Order 12600.
    (h) Notice of a FOIA lawsuit. Whenever a requester files a lawsuit 
seeking to compel the disclosure of business information, HUD will 
promptly notify the submitter.
    (i) Corresponding notice to requesters. Whenever HUD provides a 
submitter with notice and an opportunity to object to disclosure under 
paragraph (f) of this section, HUD will also notify the requester(s). 
Whenever a submitter files a lawsuit seeking to prevent the disclosure 
of business information, HUD will notify the requester(s).



Sec.  15.109  Appeals.

    (a) In general. A requester may appeal an adverse determination 
denying a request, in any respect, in writing. The letter of appeal 
should clearly identify the determination that is being appealed and the 
assigned tracking number. The appeal letter and envelope should be 
marked ``Freedom of Information Act Appeal'' for the quickest possible 
handling. If mailed, the requester's letter of appeal must be postmarked 
within 30 calendar days of the date of HUD's letter of determination. If 
the letter of appeal is transmitted electronically or by a means other 
than the United States Postal Service, it must be received in the 
appropriate office by the close of business on the 30th calendar day 
after the date of HUD's letter of determination.
    (b) Time frames--(1) Expedited processing. HUD will decide an appeal 
of a denial of a request to expedite processing of a FOIA request within 
10 working days of receipt of the appeal.
    (2) All other appeals. HUD will make a determination on appeals 
within 20 working days of receipt, unless unusual circumstances require 
HUD to extend the time for an additional 10 working days.
    (3) Exceptions. An appeal ordinarily will not be acted upon if the 
subject of the appeal is simultaneously being litigated in an applicable 
Federal court.
    (c) Content of appeals. An appeal letter should include the 
following:
    (1) A copy of the original request;
    (2) A copy of the adverse determination;
    (3) A statement of facts and legal arguments supporting the appeal; 
and
    (4) Any additional information the appellant wishes to include.
    (d) When appeal is required. Before seeking a court review of HUD's 
adverse determination, a requester generally must have exhausted their 
administrative remedies.



Sec.  15.110  HUD response to appeals.

    (a) In general. (1) The appellate official will conduct a de novo 
review of the entire record and applicable law when making a decision.
    (2) The decision on the appeal will be made in writing and will be 
considered the final action of HUD.
    (i) A decision affirming an adverse determination, in whole or in 
part, will contain a statement of the reason(s) for the affirmation, 
including any FOIA exemption(s) applied, and will inform the appellant 
of the FOIA provisions for potential court review of the decision.
    (ii) If the adverse determination is modified on appeal, in whole or 
in part, a written decision will be sent to the appellant and the FOIA 
request will be reprocessed in accordance with the appeal decision.
    (iii) Adverse decisions will include the name and contact 
information of dispute resolution services that offer mediation services 
to resolve disputes between FOIA requesters and Federal agencies as a 
nonexclusive alternative to litigation.

[[Page 197]]

    (b) Appeal of a denial of record request. Upon appeal of a denial of 
a record request, the appellate official will issue a decision that 
either:
    (1) Overturns the adverse determination, in whole or in part, and 
remands the request to the appropriate office. The requester will be 
notified of the rationale for the determination in writing. The original 
office will then reprocess the request in accordance with the appeal 
determination and respond directly to the requester; or
    (2) Affirms the adverse determination and declines to provide the 
requested records to the appellant.
    (c) Appeal of a fee determination. Upon appeal of a fee 
determination, the appellate official will issue a decision that either:
    (1) Waives the fee or charges the fee that the appellant requested;
    (2) Modifies the original fee charged and explains why the modified 
fee is appropriate; or
    (3) Advises the appellant that the original fee charged was 
appropriate and gives the reason behind this determination.
    (d) Appeal of a denial of expedited processing. Upon appeal of a 
denial of an expedited processing request, the appellate official will 
issue a decision that either:
    (1) Overturns the adverse determination and grants the expedited 
processing request; or
    (2) Affirms the decision to deny expedited processing.



 Subpart C_Production of Material or Provision of Testimony in Response 
         to Demands in Legal Proceedings Among Private Litigants

    Source: 72 FR 8582, Feb. 26, 2007, unless otherwise noted.



Sec.  15.201  Purpose and scope.

    (a) This subpart contains the regulations of the Department 
concerning the procedures to be followed and standards to be applied 
when demand is issued in a legal proceeding among private litigants for 
the production or disclosure of any material, whether provided through 
production of material or provision of testimony.
    (b) This subpart does not apply to demands, which are covered by 
part 2004 of this title, for production of material in the files of the 
Office of Inspector General or provision of testimony by employees 
within the Office of Inspector General.
    (c) This subpart also provides guidance to persons engaged in 
private litigation, to which the United States is not a party, on the 
procedures to be followed when making a demand for documents or 
testimony on the Department of Housing and Urban Development. This 
subpart does not, and may not be relied upon to, create any affirmative 
right or benefit, substantive or procedural, enforceable against HUD.

[72 FR 8582, Feb. 26, 2007, as amended at 73 FR 72205, Nov. 26, 2008]



Sec.  15.202  Production of material or provision of testimony prohibited
unless approved.

    Neither the Department nor any employee of the Department shall 
comply with any demand for production of material or provision of 
testimony in a legal proceeding among private litigants, unless the 
prior approval of the Authorized Approving Official has been obtained in 
accordance with this subpart. This rule does not apply to any legal 
proceeding in which an employee may be called to participate, either 
through the production of documents or the provision of testimony, not 
on official time, as to facts or opinions that are in no way related to 
material described in Sec.  15.201.

[73 FR 72205, Nov. 26, 2008]



Sec.  15.203  Making a demand for production of material or provision
of testimony.

    (a) Any demand made to the Department or an employee of the 
Department to produce any material or provide any testimony in a legal 
proceeding among private litigants must:
    (1) Be submitted in writing to the Department or employee of the 
Department, with a copy to the Appropriate Associate General Counsel or 
Appropriate Regional Counsel, no later than

[[Page 198]]

30 days before the date the material or testimony is required;
    (2) State, with particularity, the material or testimony sought;
    (3) If testimony is requested, state:
    (i) The intended use of the testimony, and
    (ii) Whether expert or opinion testimony will be sought from the 
employee;
    (4) State whether the production of such material or provision of 
such testimony could reveal classified, confidential, or privileged 
material;
    (5) Summarize the need for and relevance of the material or 
testimony sought in the legal proceeding and include a copy of the 
complaint, if available;
    (6) State whether the material or testimony is available from any 
other source and, if so, state all such other sources;
    (7) State why no document[s], or declaration[s] or affidavit[s], 
could be used in lieu of oral testimony that is being sought;
    (8) Estimate the amount of time the employee will need in order to 
prepare for, travel to, and attend the legal proceeding, as appropriate;
    (9) State why the production of the material or provision of the 
testimony is appropriate under the rules of procedure governing the 
legal proceeding for which it is sought (e.g., not be unduly burdensome 
or otherwise inappropriate under the relevant rules governing 
discovery); and
    (10) Describe how producing such material or providing such 
testimony would affect the interests of the United States.
    (b) If the Department determines that the requestor has failed to 
provide the information required by paragraph (a) of this section, or 
that the information provided is insufficient to consider the demand in 
accordance with Sec.  15.204, the Department may require that additional 
information be provided by the requestor before the demand is 
considered.
    (c) Whenever a demand is made upon the Department or an employee of 
the Department for the production of material or provision of testimony, 
the employee shall immediately notify the Appropriate Associate General 
Counsel or Appropriate Regional Counsel.

[73 FR 72205, Nov. 26, 2008]



Sec.  15.204  Consideration of demands for production of material
or provision of testimony.

    (a) The Authorized Approving Official shall determine what material 
is to be produced or what testimony is to be provided, based upon the 
following standards:
    (1) Expert or opinion material or testimony. In any legal proceeding 
among private litigants, no employee of the Department may produce 
material or provide testimony as described in Sec.  15.201(a) that is of 
an expert or opinion nature, unless specifically authorized by the 
Authorized Approving Official for good cause shown.
    (2) Factual material or testimony. In any legal proceeding among 
private litigants, no employee of the Department may produce material or 
provide testimony as described in Sec.  15.201(a) that is of a factual 
nature, unless specifically authorized by the Authorized Approving 
Official. The Authorized Approving Official shall determine whether any 
of the following factors are applicable. Such a demand may either be 
denied, or conditionally granted in accordance with Sec.  15.204(c), if 
any such factors are applicable:
    (i) Producing such material or providing such testimony would 
violate a statute or regulation;
    (ii) Producing such material or providing such testimony would 
reveal classified, confidential, or privileged material;
    (iii) Such material or testimony would be irrelevant to the legal 
proceeding;
    (iv) Such material or testimony could be obtained from any other 
source;
    (v) One or more documents, or a declaration or affidavit, could 
reasonably be provided in lieu of oral testimony;
    (vi) The amount of employees' time necessary to comply with the 
demand would be unreasonable;
    (vii) Production of the material or provision of the testimony would 
not be required under the rules of procedure governing the legal 
proceeding for

[[Page 199]]

which it is sought (e.g., unduly burdensome or otherwise inappropriate 
under the relevant rules governing discovery);
    (viii) Producing such material or providing such testimony would 
impede a significant interest of the United States; or
    (ix) The Department has any other legally cognizable objection to 
the release of such information or testimony in response to a demand.
    (b) Once a determination has been made, the requester will be 
notified of the determination. If the demand is denied, the requestor 
shall be notified of the reasons for the denial. If the demand is 
conditionally approved, the requestor shall be notified of the 
conditions that have been imposed upon the production of the material or 
provision of the testimony demanded, and the reasons for the conditional 
approval of the demand.
    (c) The Authorized Approving Official may impose conditions or 
restrictions on the production of any material or provision of any 
testimony. Such conditions or restrictions may include the following:
    (1) A requirement that the parties to the legal proceeding obtain a 
protective order or execute a confidentiality agreement to limit access 
to, and limit any further disclosure of, material or testimony;
    (2) A requirement that the requester accept examination of 
documentary material on HUD premises in lieu of production of copies;
    (3) A limitation on the subject areas of testimony permitted;
    (4) A requirement that testimony of a HUD employee be provided by 
deposition at a location prescribed by HUD or by written declaration;
    (5) A requirement that the parties to the legal proceeding agree 
that a transcript of the permitted testimony be kept under seal or will 
only be used or only made available in the particular legal proceeding 
for which testimony was demanded;
    (6) A requirement that the requester purchase an extra copy of the 
transcript of the employee's testimony from the court reporter and 
provide the Department with a copy at the requester's expense; or
    (7) Any other condition or restriction deemed to be in the best 
interests of the United States, including reimbursement of costs to the 
Department.
    (d) The determination made with respect to the production of 
material or provision of testimony pursuant to this subpart is within 
the sole discretion of the Authorized Approving Official and shall 
constitute final agency action from which no administrative appeal is 
available.

[73 FR 72205, Nov. 26, 2008]



Sec.  15.205  Method of production of material or provision of testimony.

    (a) Where the Authorized Approving Official has authorized the 
production of material or provision of testimony, the Department shall 
produce such material or provide such testimony in accordance with this 
section and any conditions imposed upon production of material or 
provision of testimony pursuant to Sec.  15.204(c).
    (b) In any legal proceeding where the Authorized Approving Official 
has authorized the production of documents, the Department shall respond 
by producing authenticated copies of the documents, to which the seal of 
the Department has been affixed, in accordance with its authentication 
procedures. The authentication shall be evidence that the documents are 
true copies of documents in the Department's files and shall be 
sufficient for the purposes of Rules 803(8) and 902 of the Federal Rules 
of Evidence and Rule 44(a)(1) of the Federal Rules of Civil Procedure.
    (c) If response to a demand is required before the determination 
from the Authorized Approving Official is received, the U.S. Attorney, 
Department of Justice Attorney, or such other attorney as may be 
designated for the purpose will appear or make such filings as are 
necessary to furnish the court or other authority with a copy of the 
regulations contained in this subpart and will inform the court or other 
authority that the demand has been, or is being, as the case may be, 
referred for prompt consideration. The court or other authority shall be 
requested respectfully to stay the demand pending receipt of the 
requested determination

[[Page 200]]

from the Authorized Approving Official.

[73 FR 72206, Nov. 26, 2008]



Sec.  15.206  Procedure in the event of an adverse ruling regarding
production of material or provision of testimony.

    If the court or other authority declines to stay the demand made in 
accordance with Sec.  15.205(c) pending receipt of the determination 
from the Authorized Approving Official, or if the court or other 
authority rules that the demand must be complied with irrespective of 
the determination by the Authorized Approving Official not to produce 
the material or provide the testimony demanded or to produce subject to 
conditions or restrictions, the employee upon whom the demand has been 
made shall, if so directed by an attorney representing the Department, 
respectfully decline to comply with the demand. (United States ex rel. 
Touhy v. Ragen, 340 U.S. 462 (1951)).

[73 FR 72206, Nov. 26, 2008]



 Subpart D_Production of Material or Provision of Testimony in Response 
  to Demands in Legal Proceedings in Which the United States Is a Party

    Source: 72 FR 8583, Feb. 26, 2007, unless otherwise noted.



Sec.  15.301  Purpose and scope.

    (a) This subpart contains the regulations of the Department 
concerning the procedures to be followed and standards to be applied 
when demand is issued in a legal proceeding in which the United States 
is a party for the production or disclosure of any material, whether 
provided through production of material or provision of testimony.
    (b) This subpart does not apply to demands, which are covered by 
part 2004 of this title, for production of material in the files of the 
Office of Inspector General or provision of testimony by employees 
within the Office of Inspector General.



Sec.  15.302  Production of material or provision of testimony
prohibited unless approved.

    Neither the Department nor any employee of the Department shall 
comply with any demand for production of material or provision of 
testimony in a legal proceeding in which the United States is a party, 
unless the prior approval of the attorney representing the United States 
has been obtained in accordance with this subpart. This rule does not 
apply to any legal proceeding in which an employee may be called to 
participate, either through the production of documents or the provision 
of testimony, not on official time, as to facts or opinions that are in 
no way related to material described in Sec.  15.301.

[73 FR 72206, Nov. 26, 2008]



Sec.  15.303  Procedure for review of demands for production of
material or provision of testimony in any legal proceeding in which
the United States is a party.

    Whenever a demand is made upon the Department or an employee of the 
Department for the production of material or provision of testimony, the 
employee shall immediately notify the Appropriate Associate General 
Counsel or Appropriate Regional Counsel.

[73 FR 72207, Nov. 26, 2008]



Sec.  15.304  Consideration of demands for production of material
or provision of testimony.

    Consideration of demands shall be within the province of the 
attorney representing the United States, who may raise any valid 
objection to the production of material or provision of testimony in 
response to the demand.

[73 FR 72207, Nov. 26, 2008]



Sec.  15.305  Method of production of material or provision of testimony.

    If the production of material or provision of testimony has been 
authorized, the Department may respond by producing authenticated copies 
of the documents, to which the seal of the Department has been affixed 
in accordance with its authentication procedures. The authentication 
shall be evidence that the documents are true copies of documents in the 
Department's

[[Page 201]]

files and shall be sufficient for the purposes of Rules 803(8) and 902 
of the Federal Rules of Evidence and Rule 44(a)(1) of the Federal Rules 
of Civil Procedure.

[73 FR 72207, Nov. 26, 2008]



 Sec. Appendix A to Part 15--Location Information for HUD FOIA Reading 
           Rooms and Contact Information for Regional Counsel

    The Department maintains a reading room in Headquarters and in each 
of the Secretary's Representative's Offices. In addition, each of the 
Secretary's Representative's Offices has a Regional Counsel. The 
location and contact information for HUD's FOIA Reading Rooms and for 
the Regional Counsel can be found in HUD's Local Office Directory, on 
HUD's Internet site at http://www.hud.gov.

[73 FR 72207, Nov. 26, 2008]



PART 16_IMPLEMENTATION OF THE PRIVACY ACT OF 1974--Table of Contents



Sec.
16.1 Purpose and statement of policy.
16.2 Definitions.
16.3 Procedures for inquiries.
16.4 Requests for access; requirements.
16.5 Disclosure of requested information to individuals.
16.6 Initial denial of access.
16.7 Administrative review of initial denial of access.
16.8 Request for correction or amendment to record.
16.9 Agency procedures upon request for correction or amendment of 
          record.
16.10 Appeal of initial adverse agency determination on correction or 
          amendment.
16.11 Disclosure of record to person other than the individual to whom 
          it pertains.
16.12 Fees.
16.13 Penalties.
16.14 General exemptions.
16.15 Specific exemptions.

    Authority: 5 U.S.C. 552(a); 42 U.S.C. 3535(d).

    Source: 40 FR 39729, Aug. 28, 1975, unless otherwise noted.



Sec.  16.1  Purpose and statement of policy.

    (a) The purpose of this part is to establish policies and procedures 
for implementing the Privacy Act of 1974 (Pub. L. 93-579), 5 U.S.C. 
552(a). The main objectives are to facilitate full exercise of rights 
conferred on individuals under the Act and to insure the protection of 
privacy as to individuals about whom the Department maintains records in 
systems of records under the Act. The Department accepts the 
responsibility to act promptly and in accordance with the Act upon 
receipt of any inquiry, request or appeal from a citizen of the United 
States or an alien lawfully admitted for permanent residence into the 
United States, regardless of the age of the individual.
    (b) Further, the Department accepts the obligations to maintain only 
such information on individuals as is relevant and necessary to the 
performance of its lawful functions, to maintain that information with 
such accuracy, relevancy, timeliness and completeness as is reasonably 
necessary to assure fairness in determinations made by the Department 
about the individual, to obtain information from the individual to the 
extent practicable, and to take every reasonable step to protect that 
information from unwarranted disclosure. The Department will maintain no 
record describing how an individual exercises rights guaranteed by the 
First Amendment unless expressly authorized by statute or by the 
individual about whom the record is maintained or unless pertinent to 
and within the scope of an authorized law enforcement activity.
    (c) This part applies to all organizational components in the 
Department in order to assure the maximum amount of uniformity and 
consistency within the Department in its implementation of the Act.
    (d) The Assistant Secretary for Administration shall be responsible 
for carrying out the requirements of this part, for issuing such orders 
and directives internal to the Department as are necessary for full 
compliance with the Act, and for effecting publication of all required 
notices concerning systems of records.
    (e) Requests involving information pertaining to an individual which 
is in a record or file but not within the scope of a System of Records 
Notice published in the Federal Register are outside the scope of this 
part. Requests for departmental records will be considered to determine 
whether processing under this part, part 15, or both is most 
appropriate, notwithstanding

[[Page 202]]

the requester's characterization of the request, as follows:
    (1) A Privacy Act request from an individual for records about that 
individual and not contained in a Privacy Act Records System shall be 
considered a Freedom of Information Act request and processed under HUD 
Freedom of Information Act regulations (24 CFR part 15) to the extent 
that the requester has provided the Department a reasonable description 
of the documents requested. When a request for records is so considered 
as a Freedom of Information Act request, the Privacy Act Officer shall 
promptly refer it to the head of the appropriate organizational unit in 
accordance with HUD FOIA Regulations and shall advise the requester that 
time of receipt for processing purposes will be the time when it is 
received by the appropriate official.
    (2) A Freedom of Information Act request from an individual for 
records about that individual contained in a Privacy Act Records System 
shall be processed as follows:
    (i) If the request in whole or in part contains a reasonable 
description of any HUD document, processing shall be carried out 
pursuant to HUD FOIA Regulations.
    (ii) If the request in whole or in part does not contain a 
reasonable description of any HUD document, but does provide sufficient 
information under HUD Privacy Act Regulations to undertake a Privacy Act 
Records System search, the Department will provide full access under HUD 
Privacy Act Regulations. In this situation, the Department will comply 
with the deadlines for response set forth in the Privacy Act and HUD 
implementing regulations. In that event, an explanation will be provided 
to the requester advising that the request did not contain a reasonable 
description of a particular document as required under the FOIA and 
offering to process the request under FOIA procedures upon receipt of 
additional information sufficient to constitute a reasonable 
description.
    (3) A Freedom of Information Act request from an individual for 
records about another individual contained in a Privacy Act Records 
System shall be processed as follows: When an exemption under subsection 
(b) of FOIA is available, the Privacy Act governs the public interest 
determination under HUD FOIA Regulations (24 CFR 15.21) and compels the 
withholding of such documents unless: (i) The subject of those records 
consents to their release or (ii) disclosure comes within one of the 
subsections of 5 U.S.C. Sec.  552a(b).
    (4) A Privacy Act request from an individual for records about 
another individual shall be processed as follows: Except as expressly 
permitted in this part, requests by persons who are not the subject of a 
record contained in a Privacy Act Records System shall be outside the 
scope of this part. If the request satisfies the Freedom of Information 
Act requirement that requested records be reasonably described, the 
Privacy Act Officer shall consider the requests as a Freedom of 
Information Act request and shall proceed as in Sec.  16.1(e)(1) of this 
section.

[40 FR 39729, Aug. 28, 1975, as amended at 41 FR 13917, Apr. 1, 1976]



Sec.  16.2  Definitions.

    (a) The definitions of 5 U.S.C. 552a apply in this part.
    (b) As used in this part:
    (1) Act means the Privacy Act of 1974, Pub. L. 93-579.
    (2) Privacy Act Officer means those officials, identified in 
Appendix A to this part, or their designees, who are authorized to 
receive and act upon inquiries, requests for access, and requests for 
correction or amendment.
    (3) Privacy Appeals Officer means the General Counsel.
    (4) Inquiry means a request by an individual that the Department 
determine whether it has any record in a system of records which 
pertains to that individual.
    (5) Request for access means a request by an individual or guardian 
to inspect and/or copy and/or obtain a copy of a record which is in a 
particular system of records and which pertains to that individual.
    (6) Request for correction or amendment means the request by an 
individual or guardian that the Department change (either by correction, 
addition or deletion) a particular record in a system of records which 
pertains to that individual.

[[Page 203]]

    (7) Appeal means the request by an individual that an initial denial 
of a request for access or correction or amendment by that individual be 
reviewed and reversed.

[40 FR 39729, Aug. 28, 1975, as amended at 41 FR 13917, Apr. 1, 1976; 61 
FR 5204, Feb. 9, 1996]



Sec.  16.3  Procedures for inquiries.

    (a) Any individual, regardless of age, may submit an inquiry to the 
Department. The inquiry should be made either in person at the office 
of, or by mail addressed to, the appropriate Privacy Act Officer. 
Although oral requests may be honored, a requester may be asked to 
submit his request in writing. The envelope containing the request and 
the letter itself should both clearly indicate that the subject is a 
``PRIVACY ACT INQUIRY''. If an individual believes the Department 
maintains a record pertaining to that individual but does not know which 
system of records might contain such a record and/or which 
organizational component of the Department maintains the system of 
records, assistance in person or by mail will be provided at the first 
address listed in Appendix A to this part.
    (b)(1) An inquiry should contain the following information:
    (i) Name, address and telephone number of the individual making the 
request;
    (ii) Name, address and telephone number of the individual to whom 
the record pertains, if the requesting individual is either the parent 
of a minor or the legal guardian of the individual to whom the record 
pertains;
    (iii) A certified or authenticated copy of documents establishing 
parentage or guardianship;
    (iv) Whether the individual to whom the record pertains is a citizen 
of the United States or an alien lawfully admitted for permanent 
residence in to the United States;
    (v) Name of the system of records, as published in the Federal 
Register;
    (vi) Location of the system of records, as published in the Federal 
Register;
    (vii) Such additional information as the individual knows will or 
believes might assist the Department in responding to the inquiry (for 
example, the individual's past or present relationship with the 
Department, e.g. mortgagor, contractor, employee, including relevant 
dates) and in verifying the individual's identity (for example, date of 
birth, place of birth, names of parents, place of work, dates of 
employment, position title, etc.);
    (viii) Date of inquiry; and,
    (ix) Individual's signature.

The Department reserves the right to require compliance with the 
identification procedures appearing at Sec.  16.4(d) where circumstances 
warrant.
    (2) In compliance with 5 U.S.C. 552a (e)(3) each individual 
supplying the information in accordance with paragraph (b)(1) of this 
section hereby is informed that:
    (i) The authority authorizing solicitation of the information is 5 
U.S.C. 552a, disclosure is voluntary, and no penalty is attached for 
failure to respond;
    (ii) The principal purpose for which the information is intended to 
be used is processing the inquiry under the Act;
    (iii) The routine uses which may be made of the information are the 
routine uses appearing as a prefatory statement to the Department's 
notice of systems of records published in the Federal Register; and,
    (iv) The effects of not providing all or any part of the information 
may delay, or in some cases make impossible, the Department's processing 
of the action on the request under the Act.
    (3) If, having been made aware of the contents of paragraph (b)(2) 
of this section, an individual submits the information listed in 
paragraph (b)(1) of this section, he or she will be deemed to have made 
the submission on a purely voluntary and consensual basis.
    (c) When an inquiry is misdirected by the requester, or not 
addressed as specified in paragraph (a) of this section, the Department 
official receiving same shall make reasonable effort to identify, and 
promptly refer it to, the appropriate Privacy Act Officer and the time 
of receipt for processing purposes will be the time when it is received 
by the Privacy Act Officer.
    (d) When an inquiry fails to provide necessary information as set 
forth in

[[Page 204]]

paragraph (b) of this section, the requester shall be advised that the 
time of receipt for processing purposes will be the time when the 
additional necessary information is received by the Privacy Act Officer.
    (e) Each inquiry received shall be acted upon promptly by the 
responsible Privacy Act Officer. Every effort will be made to respond 
within ten days (excluding Saturdays, Sundays and holidays) of the date 
of receipt. If a response cannot be made within ten days, the Privacy 
Act Officer shall send an acknowledgement during that period providing 
information on the status of the inquiry. The Privacy Act Officer may 
indicate that additional information would facilitate processing or that 
further information is necessary to process the inquiry.



Sec.  16.4  Requests for access; requirements.

    (a) Any individual, regardless of age, may submit to the Department 
a request for access to records of the Department. The request should be 
made either in person at the Office of, or by mail addressed to, the 
responsible Privacy Act Officer identified in Appendix A to this part. 
Although oral requests may be honored, a requester may be asked to 
submit his request in writing. The envelope containing the request and 
the letter itself should both clearly indicate that the subject is a 
PRIVACY ACT REQUEST FOR ACCESS TO RECORDS.
    (b) When a request for access to records is misdirected by the 
requester, or not addressed as specified in paragraph (a) of this 
section, the Department official receiving same shall promptly refer it 
to the appropriate Privacy Act Officer and the time of receipt for 
processing purposes will be the time when it is received by that 
official.
    (c) When a request for access to records fails to provide necessary 
information as set forth in paragraph (b) of this section the requester 
shall be advised that the time of receipt for processing purposes will 
be the time when the additional necessary information is received by the 
appropriate official.
    (d) The requirements for identification of individuals seeking 
access to records are as follows:
    (1) In person. Each individual making a request in person shall be 
required to present satisfactory proof of identity. The means of proof, 
in the order of preference and priority, are:
    (i) A document bearing the individual's photograph (for example, 
passport or military or civilian identification card);
    (ii) A document bearing the individual's signature (for example, 
driver's license, social security card, unemployment insurance book, 
employer's identification card, national credit card and professional, 
craft or union membership card); and
    (iii) A document bearing neither the photograph nor the signature of 
the individual (for example, a Medicaid card). In the event the 
individual can provide no suitable documentation of identity, the 
Department will require a signed statement asserting the individual's 
identity and stipulating that the individual understands the penalty 
provision of 5 U.S.C. 552a(i)(3). That penalty provision also appears at 
Sec.  16.13(a). In order to avoid any unwarranted disclosure of an 
individual's records, the Department reserves the right to determine to 
its satisfaction whether proof of identity offered by any individual is 
adequate.
    (2) Not in person. If the individual making a request does not 
appear in person before a Privacy Act Officer, the information set forth 
in Sec.  16.3(b)(1) and a certificate of a notary public or equivalent 
officer empowered to administer oaths must accompany the request. The 
certificate within or attached to the letter must be substantially in 
accord with the following text:

City of --------------------
County of --------------------:

    ss -------------------- (name of individual), who affixed (his) 
(her) signature below in my presence, came before me, a ---------------- 
(title), in and for the aforesaid County and State, this ------------ 
day of ------------, 19--, and established (his) (her) identity to my 
satisfaction.

    My commission expires --------------------.

------------------------------------

[[Page 205]]

 (signature)


If the request follows inquiry under Sec.  16.3, this should be 
indicated in the request for access in order to facilitate processing.
    (3) Parents of minors and legal guardians. An individual acting as 
the parent of a minor or the legal guardian of the individual to whom a 
record pertains shall establish his or her personal identity in the same 
manner prescribed in either paragraph (d) (1) or (2) of this section. In 
addition, such other individual shall establish his or her 
representative capacity of parent or legal guardian. In the case of the 
parent of a minor, the proof of identity shall be a certified or 
authenticated copy of the minor's birth certificate. In the case of a 
legal guardian of an individual who has been declared incompetent due to 
physical or mental incapacity or age by a court of competent 
jurisdiction, the proof of identity shall be a certified or 
authenticated copy of the court's order. A parent or legal guardian may 
act only for a living individual, not for a decedent. A parent or legal 
guardian may be accompanied during personal access to a record by 
another individual, provided the provisions of Sec.  16.5(e) are 
satisfied.
    (e) When the provisions of this part are alleged to have the effect 
of impeding an individual in exercising his or her right to access, the 
Department will consider alternative suggestions from an individual 
making a request, regarding proof of identity and access to records.
    (f) An individual shall not be required to state a reason or 
otherwise justify his or her request for access to a record.



Sec.  16.5  Disclosure of requested information to individuals.

    (a) Each request received shall be acted upon promptly by the 
responsible Privacy Act Officer. Every effort will be made to respond 
within ten days (excluding Saturdays, Sundays and holidays) of the date 
of receipt. If a response cannot be made within ten days due to unusual 
circumstances, the Privacy Act Officer shall send an acknowledgement 
during that period providing information on the status of the request 
and asking for such further information as may be necessary to process 
the request. Unusual circumstances shall include circumstances where a 
search for and collection of requested records from inactive storage, 
field facilities or other establishments are required, cases where a 
voluminous amount of data is involved, instances where information on 
other individuals must be separated or expunged from the particular 
record, and cases where consultations with other agencies having a 
substantial interest in the determination of the request are necessary.
    (b) Grant of access--(1) Notification. An individual shall be 
granted access to a record pertaining to him or her, except where the 
provisions of Sec.  16.6 apply. The Privacy Act Officer shall notify the 
individual of such determination and provide the following information:
    (i) The methods of access, as set forth in paragraph (b)(2) of this 
section;
    (ii) The place at which the record may be inspected;
    (iii) The earliest date on which the record may be inspected and the 
period of time that the records will remain available for inspection 
and/or the estimated date by which a copy of the record could be mailed 
and the estimate of fees pursuant to Sec.  16.12;
    (iv) The fact that the individual, if he or she wishes, may be 
accompanied by another individual during personal access, subject to 
procedures set forth in paragraph (e) of this section; and
    (v) Any additional requirements needed to grant access to a specific 
record.
    (2) Methods of access. The following methods of access to records by 
an individual may be available depending on the circumstances of a given 
situation:
    (i) Inspection in person may be had in the office specified by the 
Privacy Act Officer granting access during hours indicated by the 
Privacy Act Officer;
    (ii) Transfer of records to a Federal facility more convenient to 
the individual may be arranged, but only if the Privacy Act Officer 
determines that a suitable facility is available, that the individual's 
access can be properly supervised at the facility, and that transmittal 
of the records to that facility will not unduly interfere with 
operations of the Department or involve

[[Page 206]]

unreasonable costs, in terms of both money and manpower; and
    (iii) Copies may be mailed at the request of the individual, subject 
to payment of the fees prescribed in Sec.  16.12. The Department, at its 
own initiative, may elect to provide a copy by mail, in which case no 
fee will be charged the individual.
    (c) The Department shall supply such other information and 
assistance at the time of access as to make the record intelligible to 
the individual.
    (d) The Department reserves the right to limit access to copies and 
abstracts of original records, rather than the original records. This 
election would be appropriate, for example, when the record is in an 
automated data media such as tape or disc, when the record contains 
information on other individuals, and when deletion of information is 
permissible under exemptions (for example, 5 U.S.C. 552a(k)(2)). In no 
event shall original records of the Department be made available to the 
individual except under the immediate supervision of the Privacy Act 
Officer or his designee. It is a crime to conceal, mutilate, obliterate, 
or destroy any record filed in a public office, or to attempt to do any 
of the foregoing, Title 18, United States Code, 2701(a).
    (e) Any individual who requests access to a record pertaining to 
that individual may be accompanied by another individual of his or her 
choice. Accompanied includes discussion of the record in the presence of 
the other individual. The individual to whom the record pertains shall 
authorize the presence of the other individual by a signed and dated 
document which includes the name of the other individual and 
specifically describes the record to which access is sought. The other 
individual shall sign the authorization in the presence of the Privacy 
Act Officer. An individual shall not be required to state a reason or 
otherwise justify his or her decision to be accompanied by another 
individual during personal access to a record.



Sec.  16.6  Initial denial of access.

    (a) Grounds. Access by an individual to a record which pertains to 
that individual will be denied only upon a determination by the Privacy 
Act Officer that:
    (1) The record is subject to an exemption under Sec.  16.14, Sec.  
16.15 or to an exemption determined by another agency noticing the 
system of records;
    (2) The record is information compiled in reasonable anticipation of 
a civil action or proceeding; or
    (3) The individual unreasonably has failed to comply with the 
procedural requirements of this part.
    (b) Notification. The Privacy Act Officer shall give notice of 
denial of access to records to the individual in writing and shall 
include the following information:
    (1) The Privacy Act Officer's name and title or position;
    (2) The date of the denial;
    (3) The reasons for the denial, including citation to the 
appropriate section of the Act and/or this part;
    (4) The individual's opportunities, if any, for further 
administrative consideration, including the identity and address of the 
appropriate Privacy Appeals Officer. If no further administrative 
consideration within the Department is available, the notice shall state 
that the denial is administratively final; and,
    (5) If stated to be administratively final; and, within the 
Department, the individual's right to judicial review under 5 U.S.C. 
552a(g)(1), as amended by 5 U.S.C. 552a(g)(5).

[40 FR 39729, Aug. 28, 1975, as amended at 42 FR 20297, Apr. 19, 1977]



Sec.  16.7  Administrative review of initial denial of access.

    (a) Review shall be available only from a written denial of a 
request for access issued under Sec.  16.6(a) (2) or (3) and only if a 
written request for review is filed within thirty calendar days after 
the issuance of the written denial.
    (b) A request for review shall be addressed to the Privacy Appeals 
Officer identified in the initial denial, which official is authorized 
to make final determinations. The envelope containing the request for 
review and the letter itself should both clearly indicate that the 
subject is a PRIVACY ACT REQUEST FOR REVIEW.

[[Page 207]]

    (c) When a request for review is misdirected by the requester, or 
not addressed as specified in paragraph (b) of this section, the 
Department official receiving same shall promptly refer it to the 
Privacy Appeals Officer and the time of receipt for processing purposes 
will be the time when it is received by the appropriate official.
    (d) When a request for review fails to provide necessary information 
as set forth in paragraph (e) of this section, the requester shall be 
given reasonable opportunity to amend the request and shall be advised 
that the time of receipt for processing purposes will be the time when 
the additional necessary information is received by the appropriate 
official.
    (e) The filing of a request for review may be accomplished by 
mailing to the Privacy Appeals Officer a copy of the request for access, 
if in writing; a copy of the written denial issued under Sec.  16.6; and 
a statement of the reasons why the initial denial is believed to be in 
error. The appeal shall be signed by the individual.
    (f) No hearing will be allowed in connection with administrative 
review of an initial denial of access.
    (g) The Privacy Appeals Officer shall act upon the appeal and issue 
a final determination in writing not later than thirty days (excluding 
Saturdays, Sundays and holidays) from the date on which the appeal is 
received; provided, that the Privacy Appeals officer may extend the 
thirty days upon deciding that a fair and equitable review cannot be 
made within that period, but only if the individual is advised in 
writing of the reason for the extension and the estimated date by which 
a final determination will issue, which estimated date should not be 
later than the sixtieth day (excluding Saturdays, Sundays and holidays) 
after receipt of the appeal unless there exist unusual circumstances, as 
described in Sec.  16.5(a).
    (h) The decision after review will be in writing, will constitute 
final action of the Department on a request for access, and, if the 
denial of the request is in whole or part upheld, the Department shall 
notify the person making the request of his right to judicial review 
under 5 U.S.C. 552a(g)(1), as amended by 5 U.S.C. 552a(g)(5).



Sec.  16.8  Request for correction or amendment to record.

    (a) Any individual, regardless of age, may submit to the Department 
a request for correction or amendment of a record pertaining to that 
individual. The request should be made either in person at the office 
of, or by mail addressed to, the Privacy Act Officer who processed the 
individual's request for access to the record. Although an oral request 
may be honored, a requester may be asked to submit his or her request in 
writing. The envelope containing the request and the letter itself 
should both clearly indicate that the subject is a PRIVACY ACT REQUEST 
FOR CORRECTION OR AMENDMENT.
    (b) When a request for correction or amendment is misdirected by the 
requester, or not addressed as specified in paragraph (a) of this 
section, the Department official receiving same shall make reasonable 
effort to identify, and promptly refer it to, the appropriate Privacy 
Act Officer and the time of receipt for processing purposes will be the 
time when it is received by the appropriate official.
    (c) When a request for correction or amendment fails to provide 
necessary information as set forth in paragraph (e) of this section, the 
requester shall be given reasonable opportunity to answer the request 
and shall be advised that the time of receipt for processing purposes 
will be the time when the additional necessary information is received 
by the appropriate official.
    (d) Since the request, in all cases, will follow a request for 
access under Sec.  16.4, the individual's identity will be established 
by his or her signature on the request.
    (e) A request for correction or amendment should include the 
following:
    (1) A specific identification of the record sought to be corrected 
or amended (for example, description, title, date, paragraph, sentence, 
line and words);
    (2) The specific wording to be deleted, if any;
    (3) The specific wording to be inserted or added, if any, and the 
exact place at which it is to be inserted or added; and

[[Page 208]]

    (4) A statement of the basis for the requested correction or 
amendment, with all available supporting documents and materials which 
substantiate the statement.
    (f) The provisions of Sec.  16.3(b) (2) and (3) apply to the 
information obtained under paragraph (e) of this section.



Sec.  16.9  Agency procedures upon request for correction or 
amendment of record.

    (a)(1) Not later than ten days (excluding Saturdays, Sundays and 
holidays) after receipt of a request to correct or amend a record, the 
Privacy Act Officer shall send an acknowledgment providing an estimate 
of time within which action will be taken on the request and asking for 
such further information as may be necessary to process the request. The 
estimate of time may take into account unusual circumstances as 
described in Sec.  16.5(a). No acknowledgment will be sent if the 
request can be reviewed, processed, and the individual notified of the 
results of review (either compliance or denial) within the ten days. 
Requests filed in person will be acknowledged at the time submitted.
    (2) Promptly after acknowledging receipt of a request, or after 
receiving such further information as might have been requested, or 
after arriving at a decision within the time prescribed in Sec.  
16.9(a)(1), the Privacy Act Officer shall either:
    (i) Make the requested correction or amendment and advise the 
individual in writing of such action, providing either a copy of the 
corrected or amended record or a statement as to the means whereby the 
correction or amendment was effected in cases where a copy cannot be 
provided; or,
    (ii) Inform the individual in writing that his or her request is 
denied and provide the following information:
    (A) The Privacy Act Officer's name and title and position;
    (B) The date of the denial;
    (C) The reasons for the denial, including citation to the 
appropriate sections of the Act and this part; and,
    (D) The procedures for appeal of the denial as set forth in Sec.  
16.10, including the name and address of the Privacy Appeals Officer. 
The term promptly in this Sec.  16.9 means within thirty days (excluding 
Saturdays, Sundays and holidays). If the Privacy Act Officer cannot make 
the determination within thirty days, the individual will be advised in 
writing of the reason therefor and of the estimated date by which the 
determination will be made.
    (b) Whenever an individual's record is corrected or amended pursuant 
to a request by that individual, the Privacy Act Officer shall see to 
the notification of all persons and agencies to which the corrected or 
amended portion of the record had been disclosed prior to its correction 
or amendment, if an accounting of such disclosure was made as required 
by the Act. The notification shall require a recipient agency 
maintaining the record to acknowledge receipt of the notification, to 
correct or amend the record and to appraise any agency or person to 
which it had disclosed the record of the substance of the correction or 
amendment.
    (c) The following criteria will be considered by the Privacy Act 
Officer in reviewing a request for correction or amendment:
    (1) The sufficiency of the evidence submitted by the individual;
    (2) The factual accuracy of the information;
    (3) The relevance and necessity of the information in terms of the 
purpose for which it was collected;
    (4) The timeliness and currency of the information in terms of the 
purpose for which it was collected:
    (5) The completeness of the information in terms of the purpose for 
which it was collected:
    (6) The possibility that denial of the request could unfairly result 
in determinations adverse to the individual;
    (7) The character of the record sought to be corrected or amended; 
and
    (8) The propriety and feasibility of complying with the specific 
means of correction or amendment requested by the individual.
    (d) The Department will not undertake to gather evidence for the 
individual, but does reserve the right to verify the evidence which the 
individual submits.
    (e) Correction or amendment of a record requested by an individual 
will

[[Page 209]]

be denied only upon a determination by the Privacy Act Officer that:
    (1) There has been a failure to establish, by the evidence 
presented, the propriety of the correction or amendment in light of the 
criteria set forth in paragraph (c) of this section;
    (2) The record sought to be corrected or amended was compiled in a 
terminated judicial, quasi-judicial, legislative or quasi-legislative 
proceeding to which the individual was a party or participant;
    (3) The information in the record sought to be corrected or amended, 
or the record sought to be corrected or amended, is the subject of a 
pending judicial, quasi-judicial or quasi-legislative proceeding to 
which the individual is a party or participant;
    (4) The correction or amendment would violate a duly enacted statute 
or promulgated regulation; or,
    (5) The individual unreasonably has failed to comply with the 
procedural requirements of this part.
    (f) If a request is partially granted and partially denied, the 
Privacy Act Officer shall follow the appropriate procedures of this 
section as to the records within the grant and the records within the 
denial.



Sec.  16.10  Appeal of initial adverse agency determination on 
correction or amendment.

    (a) Appeal shall be available only from a written denial of a 
request for correction or amendment of a record issued under Sec.  16.9, 
and only if a written appeal is filed within thirty calendar days after 
the issuance of the written denial.
    (b) Each appeal shall be addressed to the Privacy Appeals Officer 
identified in the written denial. The envelope containing the appeal and 
the letter itself should both clearly indicate that the subject is 
PRIVACY ACT APPEAL.
    (c) When an appeal is misdirected by the requester, or not addressed 
as specified in paragraph (b) of this section, the Department official 
receiving same shall promptly refer it to the appropriate Privacy 
Appeals Officer and the time of receipt for processing purposes will be 
the time when it is received by the appropriate official.
    (d) When an appeal fails to provide the necessary information as set 
forth in paragraph (e) of this section, the requester shall be advised 
that the time for receipt for processing purposes will be the time when 
the additional necessary information is received by the appropriate 
official.
    (e) The individual's appeal papers shall include the following: A 
copy of the original request for correction or amendment; a copy of the 
initial denial; and a statement of the reasons why the initial denial is 
believed to be in error. The appeal shall be signed by the individual. 
The record which the individual requests be corrected or amended will be 
supplied by the Privacy Act Officer who issued the initial denial. While 
the foregoing normally will comprise the entire record on appeal, the 
Privacy Appeals Officer may seek additional information necessary to 
assure that the final determination is fair and equitable and, in such 
instances, the additional information will be disclosed to the 
individual to the greatest extent possible and an opportunity provided 
for comment thereon.
    (f) No hearing on appeal will be allowed.
    (g) The Privacy Appeals Officer shall act upon the appeal and issue 
a final Department determination in writing not later than thirty days 
(excluding Saturdays, Sundays and holidays) from the date on which the 
appeal is received; provided, that the Privacy Appeals Officer may 
extend the thirty days upon deciding that a fair and equitable review 
cannot be made within that period, but only if the individual is advised 
in writing of the reason for the extension and the estimated date by 
which a final determination will issue (which estimated date should not 
be later than the sixtieth day (excluding Saturdays, Sundays and 
holidays) after receipt of the appeal unless unusual circumstances, as 
described in Sec.  16.5(a), are met).
    (h) If the appeal is determined in favor of the individual, the 
final determination shall include the specific corrections or amendments 
to be made and a copy thereof shall be transmitted promptly both to the 
individual and to the Privacy Act Officer who issued the

[[Page 210]]

initial denial. Upon receipt of such final determination, the Privacy 
Act Officer promptly shall take the actions set forth in Sec.  
16.9(a)(2)(i) and Sec.  16.9(b).
    (i) If the appeal is denied, the final determination shall be 
transmitted promptly to the individual and shall state the reasons for 
the denial. The notice of final determination also shall inform the 
individual of the following information:
    (1) The right of the individual to file a concise statement of 
reasons for disagreeing with the final determination. The statement 
ordinarily should not exceed one page and the Department reserves the 
right to reject a statement of excessive length. Such a statement shall 
be filed with the Privacy Appeals Officer. It should identify the date 
of the final determination and be signed by the individual. The Privacy 
Appeals Officer shall acknowledge receipt of such statement and inform 
the individual of the date on which it was received;
    (2) The fact that any such disagreement statement filed by the 
individual will be noted in the disputed record and that a copy of the 
statement will be provided to persons and agencies to which the record 
is disclosed subsequent to the date of receipt of such statement;
    (3) The fact that prior recipients of the disputed record will be 
provided a copy of any statement of the dispute to the extent that an 
accounting of disclosures, as required by the Act, was made;
    (4) The fact that the Department will append to any such 
disagreement statement filed by the individual, a copy of the final 
determination or summary thereof which also will be provided to persons 
and agencies to which the disagreement statement is disclosed; and,
    (5) The right of the individual to judicial review of the final 
determination under 5 U.S.C. 552a(g)(1)(A), as limited by 5 U.S.C. 
552a(g)(5).
    (j) In making the final determination, the Privacy Appeals Officer 
shall employ the criteria set forth in paragraph 16.9(c) and shall deny 
an appeal only on the grounds set forth in Sec.  16.9(e).
    (k) If an appeal is partially granted and partially denied, the 
Privacy Appeals Officer shall follow the appropriate procedures of this 
section as to the records within the grant and the records within the 
denial.
    (l) Although a copy of the final determination or a summary thereof 
will be treated as part of the individual's record for purposes of 
disclosure in instances where the individual has filed a disagreement 
statement, it will not be subject to correction or amendment by the 
individual.
    (m) The provisions of Sec.  16.3(b) (2) and (3) apply to the 
information obtained under paragraphs (e) and (i)(1) of this section.



Sec.  16.11  Disclosure of record to person other than the individual
to whom it pertains.

    (a) The Department may disclose a record pertaining to an individual 
to a person other than the individual only in the following instances:
    (1) Upon written request by the individual, including authorization 
under Sec.  16.5(e);
    (2) With the prior written consent of the individual;
    (3) To a parent or legal guardian under 5 U.S.C. 552a(h); and,
    (4) When required by the Act and not covered explicitly by the 
provisions of 5 U.S.C. 552a(b); and,
    (5) When permitted under 5 U.S.C. 552a(b) (1) through (11), which 
read as follows:

    (1) To those officers and employees of the agency which maintains 
the record who have a need for the record in the performance of their 
duties;
    (2) Required under section 552 of this title;
    (3) For a routine use as defined in subsection (a)(7) of this 
section and described under subsection (e)(4)(D) of this section;
    (4) To the Bureau of the Census for purposes of planning or carrying 
out a census or survey or related activity pursuant to the provisions of 
title 13;
    (5) To a recipient who has provided the agency with advance adequate 
written assurance that the record will be used solely as a statistical 
research or reporting record, and the record is to be transferred in a 
form that is not individually identifiable;
    (6) To the National Archives of the United States as a record which 
has sufficient historical or other value to warrant its continued 
preservation by the United States Government, or for evaluation by the 
Administrator of General Services or his designee to

[[Page 211]]

determine whether the record has such value;
    (7) To another agency or to an instrumentality of any governmental 
jurisdiction within or under the control of the United States for a 
civil or criminal law enforcement activity if the activity is authorized 
by law, and if the head of the agency or instrumentality has made a 
written request to the agency which maintains the record specifying the 
particular portion desired and the law enforcement activity for which 
the record is sought;
    (8) To a person pursuant to a showing of compelling circumstances 
affecting the health or safety of an individual if upon such disclosure 
notification is transmitted to the last known address of such 
individual;
    (9) To either House of Congress, or, to the extent of matter within 
its jurisdiction, any committee or subcommittee thereof, any joint 
committee of Congress or subcommittee of any such joint committee;
    (10) To the Comptroller General, or any of his authorized 
representatives, in the course of the performance of the duties of the 
General Accounting Office; or
    (11) Pursuant to the order of a court of competent jurisdiction.

    (b) The situations referred to in paragraph (a)(4) of this section 
include the following:
    (1) 5 U.S.C. 552a(c)(4) requires dissemination of a corrected or 
amended record or notation of a disagreement statement by the Department 
in certain circumstances:
    (2) 5 U.S.C. 552(a)(g) authorizes civil action by an individual and 
requires disclosure by the Department or the court;
    (3) Section 5(e)(2) of the Act authorizes release of any records or 
information by the Department to the Privacy Protection Study Commission 
upon request of the Chairman; and
    (4) Section 6 of the Act authorizes the Office of Management and 
Budget to provide the Department with continuing oversight and 
assistance in implementation of the Act.
    (c) The Department shall make an accounting of each disclosure of 
any record contained in a system of records in accordance with 5 U.S.C. 
552a(c) (1) and (2). Except for a disclosure made under 5 U.S.C. 
552a(b)(7), the Privacy Act Officer shall make such accounting available 
to any individual, insofar as it pertains to that individual, on request 
submitted in accordance with Sec.  16.4. The Privacy Act Officer shall 
make reasonable efforts to notify any individual when any record in a 
system of records is disclosed to any person under compulsory legal 
process, promptly upon being informed that such process has become a 
matter of public record.



Sec.  16.12  Fees.

    (a) The only fees to be charged to or collected from an individual 
under the provisions of this part are for copying records at the request 
of the individual.
    (1) No fees shall be charged or collected for the following: Search 
for and retrieval of the records; review of the records; copying at the 
initiative of the Department without a request from the individual; 
transportation of records and personnel; and first class postage.
    (2) It is the policy of the Department to provide an individual with 
one copy of each record corrected or amended pursuant to his or her 
request without charge as evidence of the correction or amendment.
    (3) As requested by the United States Civil Service Commission in 
its published regulations implementing the Act, the Department will 
charge no fee to an individual who requests copies of a personnel record 
covered by that Commission's Government-wide published notice of systems 
of records. However, when such records are voluminous and the cost of 
copying would be in excess of five dollars ($5) the Department may, in 
its discretion, charge a fee.
    (b) The copying fees prescribed by paragraph (a) of this section 
are:

$0.10 Each copy of each page, up to 8\1/2\ x 14 
made by photocopy or similar process.
$0.20 Each page of computer printout without regard to the number of 
carbon copies concurrently printed.

    (c) Payment of fees under this section shall be made in cash, or 
preferably by check or money order payable to the ``Treasurer of the 
United States.'' Payment shall be delivered or sent to the office stated 
in the billing notice or, if none is stated, to the Privacy Act Officer 
processing the request. Payment may be required in the form of a 
certified check in appropriate circumstances. Postage stamps will not be 
accepted.

[[Page 212]]

    (d) A copying fee totaling $1 or less shall be waived, but the 
copying fees for contemporaneous requests by the same individual shall 
be aggregated to determine the total fee. A copying fee shall not be 
charged or collected, or alternatively, it may be reduced when such 
action is determined by the Privacy Act Officer to be in the public 
interest.
    (e) Special and additional services provided at the request of the 
individual, such as certification or authentication, postal insurance 
and special mailing arrangement costs, will be charged to the individual 
in accordance with other published regulations of the Department 
pursuant to statute (for example, 31 U.S.C. 433a).
    (f) This section applies only to individuals making requests under 
this part. All other persons shall remain subject to fees and charges 
prescribed by other and appropriate authorities.

[40 FR 39729, Aug. 28, 1975, as amended at 42 FR 29479, June 9, 1977]



Sec.  16.13  Penalties.

    (a) The Act provides, in pertinent part:

    Any person who knowingly and willfully requests or obtains any 
record concerning an individual from an agency under false pretences 
shall be guilty of a misdemeanor and fined not more than $5,000. (5 
U.S.C. 552a(i)(3))

    (b) A person who falsely or fraudulently attempts to obtain records 
under the Act may also be subject to prosecution under such other 
criminal statutes as 18 U.S.C. 494, 495 and 1001.



Sec.  16.14  General exemptions.

    (a) Individuals may not have access to records maintained by the 
Department but which were provided by another agency which has 
determined by regulation that such information is subject to general 
exemption under 5 U.S.C. 552a(j). If such exempt records are within a 
request for access, the Department will advise the individual of their 
existence and of the name and address of the source agency. For any 
further information concerning the record and the exemption, the 
individual must contact that source agency.
    (b) The Secretary of Housing and Urban Development has determined 
that the Office of the Assistant Inspector General for Investigation 
performs, as its principal function, activities pertaining to the 
enforcement of criminal laws. The records maintained by that office in a 
system identified as ``HUD/DEPT-24, Investigation Files,'' primarily 
consist of information compiled for the purpose of criminal 
investigations and are associated with identifiable individuals. 
Therefore, the Secretary has determined that this system of records 
shall be exempt, consistent with 5 U.S.C. 552a(j)(2), from all 
requirements of the Privacy Act except 5 U.S.C. 552a (b), (c) (1) and 
(2), (e)(4) (A) through (F), (e) (6), (7), (9), (10), and (11), and (i) 
unless elsewhere exempted.

[40 FR 39729, Aug. 28, 1975, as amended at 49 FR 20486, May 15, 1984]



Sec.  16.15  Specific exemptions.

    Whenever the Secretary of Housing and Urban Development determines 
it to be necessary and proper, with respect to any system of records 
maintained by the Department, to exercise the right to promulgate rules 
to exempt such systems in accordance with the provisions of 5 U.S.C. 
552a(k), each specific exemption, including the parts of each system to 
be exempted, the provisions of the Act from which they are exempted, and 
the justification for each exemption shall be published in the Federal 
Register as part of the Department's Notice of Systems of Records.
    (a) Exempt under 5 U.S.C. 552a(k)(2) from the requirements of 5 
U.S.C. 552a (c)(3), (d), (e)(1), (e)(4) (G), (H), (I), and (f). This 
exemption allows the Department to withhold records compiled for law 
enforcement purposes. The reasons for adopting this exemption are to 
prevent individuals, who are the subjects of investigation, from 
frustrating the investigatory process, to ensure the integrity of the 
investigatory process, to ensure the integrity of law enforcement 
activities, to prevent disclosure of investigative techniques, and to 
protect the confidentiality of sources of information. The names of 
systems correspond to those published in the

[[Page 213]]

Federal Register as part of the Department's Notice of Systems of 
Records.
    (1) HUD/DEPT-15. Equal Opportunity Housing Complaints.
    (2) HUD/DEPT-24. Investigation Files in the Office of the Inspector 
General.
    (3) HUD/DEPT-25. Legal Action Files.
    (b) Exempt under 5 U.S.C. 552(k)(5) from the requirements of 5 
U.S.C. 552a (c)(3), (d), (e)(1), (e)(4), (G), (H), and (I), and (f). 
This exemption allows the Department to withhold records compiled solely 
for the purpose of determining suitability, eligibility, or 
qualifications for Federal contracts, or access to classified material. 
The reasons for adopting this exemption are to insure the proper 
functioning of the investigatory process, to insure effective 
determination of suitability, eligibility and qualification for 
employment and to protect the confidentiality of sources of information. 
The names of systems correspond to those published in the Federal 
Register as part of the Department's Notice of Systems of Records.
    (1) HUD/DEPT-24. Investigation Files in the Office of the Inspector 
General.
    (2) HUD/DEPT-25. Legal Action Files.
    (c) The system of records entitled ``HUD/PIH-1. Tenant Eligibility 
Verification Files'' consists in part of investigatory material compiled 
for law enforcement purposes. Relevant records will be used by 
appropriate Federal, state or local agencies charged with the 
responsibility for investigating or prosecuting violations of law. 
Therefore, to the extent that information in the system falls within the 
coverage of subsection (k)(2) of the Privacy Act, 5 U.S.C. 552a(k)(2), 
the system is exempt from the requirements of the following subsections 
of the Privacy Act, for the reasons stated below.
    (1) From subsection (c)(3) because release of an accounting of 
disclosures to an individual who may be the subject of an investigation 
could reveal the nature and scope of the investigation and could result 
in the altering or destruction of evidence, improper influencing of 
witnesses, and other evasive actions that could impede or compromise the 
investigation.
    (2) From subsection (d)(1) because release of the records to an 
individual who may become or has become the subject of an investigation 
could interfere with pending or prospective law enforcement proceedings, 
constitute an unwarranted invasion of the personal privacy of third 
parties, reveal the identity of confidential sources, or reveal 
sensitive investigative techniques and procedures.
    (3) From subsection (d)(2) because amendment or correction of the 
records could interfere with pending or prospective law enforcement 
proceedings, or could impose an impossible administrative and 
investigative burden by requiring the office that maintains the records 
to continuously retrograde its verifications of tenant eligibility 
attempting to resolve questions of accuracy, relevance, timeliness and 
completeness.
    (4) From subsection (e)(1) because it is often impossible to 
determine relevance or necessity of information in pre-investigative 
early stages. The value of such information is a question of judgment 
and timing; what appears relevant and necessary when collected may 
ultimately be evaluated and viewed as irrelevant and unnecessary to an 
investigation. In addition, the Assistant Secretary for Public and 
Indian Housing, or investigators, may obtain information concerning the 
violation of laws other than those within the scope of its jurisdiction. 
In the interest of effective law enforcement, the Assistant Secretary 
for Public and Indian Housing, or investigators, should retain this 
information because it may aid in establishing patterns of unlawful 
activity and provide leads for other law enforcement agencies. Further, 
in obtaining the evidence, information may be provided which relates to 
matters incidental to the main purpose of the inquiry or investigation 
but which may be pertinent to the investigative jurisdiction of another 
agency. Such information cannot readily be identified.
    (d) The system of records entitled ``HUD/PIH-1. Tenant Eligibility 
Verification Files'' consists in part of

[[Page 214]]

material that may be used for the purpose of determining suitability, 
eligibility, or qualifications for Federal civilian employment or 
Federal contracts, the release of which would reveal the identity of a 
source who furnished information to the Government under an express 
promise that the identity of the source would be held in confidence. 
Therefore, to the extent that information in this system falls within 
the coverage of subsection (k)(5) of the Privacy Act, 5 U.S.C. 
552a(k)(5), the system is exempt from the requirements of the following 
subsection of the Privacy Act, for the reasons stated below.
    (1) From subsection (d)(1) because release would reveal the identity 
of a source who furnished information to the Government under an express 
promise of confidentiality. Revealing the identity of a confidential 
source could impede future cooperation by sources, and could result in 
harassment or harm to such sources.

[42 FR 49810, Sept. 28, 1977, as amended at 59 FR 9407, Feb. 28, 1994]



PART 17_ADMINISTRATIVE CLAIMS--Table of Contents



    Subpart A_Claims Against Government Under Federal Tort Claims Act

                           General Provisions

Sec.
17.1 Scope; definitions.

                               Procedures

17.2 Administrative claim; when presented; appropriate HUD office.
17.3 Administrative claim; who may file.
17.4 Administrative claim; evidence and information to be submitted.
17.5 Investigations.
17.6 Claims investigation.
17.7 Authority to adjust, determine, compromise, and settle claims.
17.8 Limitations on authority.
17.9 Referral to Department of Justice.
17.11 Final denial of claim.
17.12 Action on approved claim.

  Subpart B_Claims Under the Military Personnel and Civilian Employees 
                           Claims Act of 1964

17.40 Scope and purpose.
17.41 Claimants.
17.42 Time limitations.
17.43 Allowable claims.
17.44 Restrictions on certain claims.
17.45 Unallowable claims.
17.46 Claims involving carriers or insurers.
17.47 Settlement of claims.
17.48 Computation of amount of award.
17.49 Attorney's fees.
17.50 Claims procedures.

   Subpart C_Procedures for the Collection of Claims by the Government

                           General Provisions

17.61 Purpose and scope.
17.63 Definitions.

                 Administrative Offset and Other Actions

17.65 Demand and notice of intent to collect.
17.67 Review of departmental records related to the debt.
17.69 Review within HUD of a determination that an amount is past due 
          and legally enforceable.
17.71 Request for hearing.
17.73 Determination of the HUD Office of Appeals.
17.75 Postponements, withdrawals, and extensions of time.
17.77 Stay of referral for offset.
17.79 Administrative actions for nonpayment of debt.

                     Administrative Wage Garnishment

17.81 Administrative wage garnishment.

                              Salary Offset

17.83 Scope and definitions.
17.85 Coordinating offset with another Federal agency.
17.87 Determination of indebtedness.
17.89 Notice requirements before offset.
17.91 Request for a hearing.
17.93 Result if employee fails to meet deadlines.
17.95 Written decision following a hearing.
17.97 Review of departmental records related to the debt.
17.99 Written agreement to repay debt as an alternative to salary 
          offset.
17.101 Procedures for salary offset: when deductions may begin.
17.103 Procedures for salary offset: types of collection.
17.105 Procedures for salary offset: methods of collection.
17.107 Procedures for salary offset: imposition of interest.
17.109 Nonwaiver of rights.
17.111 Refunds.
17.113 Miscellaneous provisions: correspondence with the Department.

    Authority: 28 U.S.C. 2672; 31 U.S.C. 3711, 3716-18, 3721, and 5 
U.S.C. 5514; 42 U.S.C. 3535(d).

[[Page 215]]



    Subpart A_Claims Against Government Under Federal Tort Claims Act

    Authority: 5 U.S.C. 5514; 28 U.S.C. 2672; 31 U.S.C. 3711, 3716-3718, 
3721; 42 U.S.C. 3535(d).

    Source: 36 FR 24427, Dec. 22, 1971, unless otherwise noted.

                           General Provisions



Sec.  17.1  Scope; definitions.

    (a) This subpart applies to claims asserted under the Federal Tort 
Claims Act, as amended, accruing on or after January 18, 1967, for money 
damages against the United States for injury to or loss of property or 
personal injury or death caused by the negligent or wrongful act or 
omission of an officer or employee of the Department while acting within 
the scope of his office or employment.
    (b) This subpart is issued subject to and consistent with applicable 
regulations on administrative claims under the Federal Tort Claims Act 
issued by the Attorney General (31 FR 16616; 28 CFR part 14).
    (c) The terms Department and Organizational unit are defined in 24 
CFR part 5.

[36 FR 24427, Dec. 22, 1971, as amended at 61 FR 5204, Feb. 9, 1996]

                               Procedures



Sec.  17.2  Administrative claim; when presented; appropriate HUD office.

    (a) For purposes of this subpart, a claim shall be deemed to have 
been presented when the Department receives, at a place designated in 
paragraph (b) of this section, an executed Claim for Damages or Injury, 
Standard Form 95, or other written notification of an incident, 
accompanied by a claim for money damages in a sum certain for injury to 
or loss of property, for personal injury, or for death alleged to have 
occurred by reason of the incident. A claim which should have been 
presented to the Department, but which was mistakenly addressed to or 
filed with another Federal agency, is deemed to be presented to the 
Department as of the date that the claim is received by the Department. 
If a claim is mistakenly addressed to or filed with the Department, the 
Department shall forthwith transfer it to the appropriate Federal 
agency, if ascertainable, or return it to the claimant.
    (b) A claimant shall mail or deliver his claim to the office of 
employment of the Department employee or employees whose negligent or 
wrongful act or omission is alleged to have caused the loss or injury 
complained of. Where such office of employment is the Department Central 
Office in Washington, or is not reasonably known and not reasonably 
ascertainable, claimant shall file his claim with the Assistant 
Secretary for Administration, Department of Housing and Urban 
Development, 451 Seventh Street SW., Washington, DC 20410. In all other 
cases, claimant shall address his claim to the head of the appropriate 
office, the address of which will generally be found listed in the local 
telephone directory.



Sec.  17.3  Administrative claim; who may file.

    (a) A claim for injury to or loss of property may be presented by 
the owner of the property, his duly authorized agent, or his legal 
representative.
    (b) A claim for personal injury may be presented by the injured 
person, his duly authorized agent, or his legal representative.
    (c) A claim based on death may be presented by the executor or 
administrator of the decedent's estate, or by any other person legally 
entitled to assert such a claim in accordance with applicable State law.
    (d) A claim for loss wholly compensated by an insurer with the 
rights of a subrogee may be presented by the insurer. A claim for loss 
partially compensated by an insurer with the rights of a subrogee may be 
presented by the insurer or the insured individually, as their 
respective interests appear, or jointly. Whenever an insurer presents a 
claim asserting the rights of a subrogee, he shall present with his 
claim appropriate evidence that he has the rights of a subrogee.
    (e) A claim presented by an agent or legal representative shall be 
presented in the name of the claimant, be signed by the agent or legal 
representative,

[[Page 216]]

show the title or legal capacity of the person signing, and be 
accompanied by evidence of his authority to present a claim on behalf of 
the claimant as agent, executor, administrator, parent, guardian, or 
other representative.



Sec.  17.4  Administrative claim; evidence and information to be submitted.

    (a) Personal injury. In support of a claim for personal injury, 
including pain and suffering, the claimant may be required to submit the 
following evidence or information:
    (1) A written report by his attending physician or dentist setting 
forth the nature and extent of the injury, nature and extent of 
treatment, any degree of temporary or permanent disability, the 
prognosis, period of hospitalization, and any diminished earning 
capacity. In addition, the claimant may be required to submit to a 
physical or mental examination by a physician employed or designated by 
the Department or another Federal agency. A copy of the report of the 
examining physician shall be made available to the claimant upon the 
claimant's written request provided that he has, upon request, furnished 
the report referred to in the first sentence of this subparagraph and 
has made or agrees to make available to the Department any other 
physician's report previously or thereafter made of the physical or 
mental condition which is the subject matter of his claim;
    (2) Itemized bills for medical, dental, and hospital expenses 
incurred, or itemized receipts of payment for such expenses;
    (3) If the prognosis reveals the necessity for future treatment, a 
statement of expected expenses for such treatment;
    (4) If a claim is made for loss of time from employment, a written 
statement from his employer showing actual time lost from employment, 
whether he is a full- or part-time employee, and wages or salary 
actually lost;
    (5) If a claim is made for loss of income and the claimant is self-
employed, documentary evidence showing the amount of earnings actually 
lost;
    (6) Any other evidence or information which may have a bearing on 
either the responsibility of the United States for the personal injury 
or the damages claimed.
    (b) Death. In support of a claim based on death, the claimant may be 
required to submit the following evidence or information:
    (1) An authenticated death certificate or other competent evidence 
showing cause of death, date of death, and age of the decedent;
    (2) Decedent's employment or occupation at time of death, including 
his monthly or yearly salary or earnings (if any), and the duration of 
his last employment or occupation;
    (3) Full names, addresses, birth dates, kinship, and marital status 
of the decedent's survivors, including identification of those survivors 
who were dependent for support upon the decedent at the time of his 
death;
    (4) Degree of support afforded by the decedent to each survivor 
dependent upon him for support at the time of his death;
    (5) Decedent's general physical and mental condition before death;
    (6) Itemized bills for medical and burial expenses incurred by 
reason of the incident causing death, or itemized receipts of payment 
for such expenses;
    (7) If damages for pain and suffering prior to death are claimed, a 
physician's detailed statement specifying the injuries suffered, 
duration of pain and suffering, any drugs administered for pain, and the 
decedent's physical condition in the interval between injury and death;
    (8) Any other evidence or information which may have a bearing on 
either the responsibility of the United States for the death or the 
damages claimed.
    (c) Property damage. In support of a claim for injury to or loss of 
property, real or personal, the claimant may be required to submit the 
following evidence or information:
    (1) Proof of ownership;
    (2) A detailed statement of the amount claimed with respect to each 
item of property;
    (3) An itemized receipt of payment for necessary repairs or itemized 
written estimates of the cost of such repairs;
    (4) A statement listing date of purchase, purchase price, and 
salvage value where repair is not economical;

[[Page 217]]

    (5) Any other evidence or information which may have a bearing on 
either the responsibility of the United States for the injury to or loss 
of property or the damages claimed.



Sec.  17.5  Investigations.

    The Department may investigate, or may request any other Federal 
agency to investigate, a claim filed under this subpart.



Sec.  17.6  Claims investigation.

    (a) When a claim has been filed with the Department, the head of the 
organizational unit concerned or his designee shall designate one 
employee in that unit who shall act as, and who shall be referred to 
herein as, the Claims Investigating Officer for that particular claim. 
When a claim is received by the head of an organizational unit to which 
this subpart applies, it shall be forwarded with or without comment to 
the designated Claims Investigating Officer, who shall:
    (1) Investigate as completely as is practicable the nature and 
circumstances of the occurrence causing the loss or damage of the 
claimant's property;
    (2) Ascertain the extent of loss or damage to the claimant's 
property;
    (3) Assemble the necessary forms with required data contained 
therein;
    (4) Prepare a brief statement setting forth the facts relative to 
the claim, a statement whether the claim satisfies the requirements of 
this subpart, and a recommendation as to the amount to be paid in 
settlement of the claim;
    (5) Submit such forms, statements, and all necessary supporting 
papers to the head of the organizational unit having jurisdiction over 
the employee involved, who will be responsible for assuring that all 
necessary data has been obtained for the file. The head of the 
organizational unit will transmit the entire file to the General 
Counsel.



Sec.  17.7  Authority to adjust, determine, compromise, and settle claims.

    The General Counsel, the Deputy General Counsel, and such employees 
of the Office of the General Counsel as may be designated by the General 
Counsel, are authorized to consider, ascertain, adjust, determine, 
compromise, and settle claims pursuant to the Federal Tort Claims Act, 
28 U.S.C. 2671, and the regulations contained in 28 CFR part 14 and in 
this subpart.



Sec.  17.8  Limitations on authority.

    (a) An award, compromise, or settlement of a claim under section 
2672 of Title 28, United States Code, and this subpart in excess of 
$25,000 may be effected only with the prior written approval of the 
Attorney General or his designee. For the purpose of this paragraph, a 
principal claim and any derivative or subrogated claim shall be treated 
as a single claim.
    (b) An administrative claim may be adjusted, determined, 
compromised, or settled only after consultation with the Department of 
Justice when, in the opinion of the General Counsel or his designee:
    (1) A new precedent or a new point of law is involved; or
    (2) A question of policy is or may be involved; or
    (3) The United States is or may be entitled to indemnity or 
contribution from a third party, and the Department is unable to adjust 
the third party claim; or
    (4) The compromise of a particular claim, as a practical matter, 
will or may control the disposition of a related claim in which the 
amount to be paid may exceed $25,000.
    (c) An administrative claim may be adjusted, determined, 
compromised, or settled only after consultation with the Department of 
Justice when the Department is informed or is otherwise aware that the 
United States or an officer, employee, agent, or cost-type contractor of 
the United States is involved in litigation based on a claim arising out 
of the same incident or transaction.



Sec.  17.9  Referral to Department of Justice.

    When Department of Justice approval or consultation is required 
under Sec.  17.8, the referral or request shall be transmitted to the 
Department of Justice by the General Counsel of the Department or his 
designee.

[[Page 218]]



Sec.  17.11  Final denial of claim.

    Final denial of an administrative claim shall be in writing, and 
notification of denial shall be sent to the claimant, his attorney, or 
legal representative by certified or registered mail. The notification 
of final denial may include a statement of the reasons for the denial 
and shall include a statement that, if the claimant is dissatisfied with 
the Department action, he may file suit in an appropriate U.S. District 
Court not later than 6 months after the date of mailing of the 
notification.



Sec.  17.12  Action on approved claim.

    (a) Payment of a claim approved under this subpart is contingent on 
claimant's execution of: (1) A Claim for Damage or Injury, Standard Form 
95; (2) a claims settlement agreement; and (3) a Voucher for Payment, 
Standard Form 1145, as appropriate. When a claimant is represented by an 
attorney, the voucher for payment shall designate both the claimant and 
his attorney as payees, and the check shall be delivered to the 
attorney, whose address shall appear on the voucher.
    (b) Acceptance by the claimant, his agent, or legal representative 
of an award, compromise, or settlement made under section 2672 or 2677 
of Title 28, United States Code, is final and conclusive on the 
claimant, his agent or legal representative, and any other person on 
whose behalf or for whose benefit the claim has been presented, and 
constitutes a complete release of any claim against the United States 
and against any officer or employee of the Government whose act or 
omission gave rise to the claim, by reason of the same subject matter.



  Subpart B_Claims Under the Military Personnel and Civilian Employees 
                           Claims Act of 1964

    Authority: Sec. 3, 78 Stat. 767 (31 U.S.C. 3721).

    Source: 36 FR 24427, Dec. 22, 1971, unless otherwise noted.



Sec.  17.40  Scope and purpose.

    (a) This subpart applies to all claims filed by or on behalf of 
employees of the Department of Housing and Urban Development for loss of 
or damage to personal property which occurs incident to their service 
with HUD under the Military Personnel and Civilian Employees' Claims Act 
of 1964. A claim must be substantiated and the possession of the 
property determined to be reasonable, useful, or proper. The maximum 
amount that can be paid under any claim under the Act is $25,000 and 
property may be replaced in kind at the option of the Government. 
Nothing in this subpart shall be construed to bar claims payable under 
statutory authority.
    (b) HUD is not an insurer and does not underwrite all personal 
property losses that an employee may sustain. Employees are encouraged 
to carry private insurance to the maximum extent practicable to avoid 
large losses or losses which may not be recoverable from HUD. The 
procedures set forth in this section are designed to enable the claimant 
to obtain the maximum amount of compensation for his loss or damage. 
Failure of the claimant to comply with these procedures may reduce or 
preclude payment of his claim under this subpart.

[36 FR 24427, Dec. 22, 1971, as amended at 48 FR 6536, Feb. 14, 1983]



Sec.  17.41  Claimants.

    (a) A claim pursuant to this subpart may only be made by:
    (1) An employee of HUD.
    (2) A former employee of HUD whose claim arises out of an incident 
occurring before his separation from HUD.
    (3) Survivors of a person named in paragraph (a) (1) or (2) of this 
section, in the following order of precedence:
    (i) Spouse.
    (ii) Children.
    (iii) Father or mother, or both.
    (iv) Brothers or sisters, or both.
    (4) The authorized agent or legal representative of a person named 
in paragraphs (a) (1), (2), and (3) of this section.

[[Page 219]]

    (b) A claim may not be presented by or for the benefit of a 
subrogee, assignee, conditional vendor, or other third party.



Sec.  17.42  Time limitations.

    A claim under this part may be allowed only if:
    (a) Except as provided in paragraph (b) of this section, it is filed 
in writing within 2 years after accrual. For purposes of this part, a 
claim accrues at the time of the accident or incident causing the loss 
or damage, or at such time as the loss or damage should have been 
discovered by the claimant by the exercise of due diligence.
    (b) It cannot be filed within the time limits of paragraph (a) of 
this section, because it accrues in time of war or in time of armed 
conflict in which any armed force of the United States is engaged or if 
such a war or armed conflict intervenes within 2 years after it accrues, 
and if good cause is shown, and if it is filed not later than 2 years 
after that cause ceases to exist, or 2 years after the war or armed 
conflict is terminated, whichever is earlier.



Sec.  17.43  Allowable claims.

    (a) A claim may be allowed only if:
    (1) The damage or loss was not caused wholly or partly by the 
negligent or wrongful act of the claimant, his agent, the members of his 
family, or his private employee (the standard to be applied is that of 
reasonable care under the circumstances); and
    (2) The possession of the property lost or damaged and the quantity 
possessed is determined to have been reasonable, useful, or proper under 
the circumstances; and
    (3) The claim is substantiated by proper and convincing evidence.
    (b) Claims which are otherwise allowable under this part shall not 
be disallowed solely because the property was not in the possession of 
the claimant at the time of the damage or loss, or solely because the 
claimant was not the legal owner of the property for which the claim is 
made. For example, borrowed property may be the subject of a claim.
    (c) Subject to the conditions in paragraph (a) of this section, and 
the other provisions of this subpart, any claim for damage to, or loss 
of, personal property incident to service with HUD may be considered and 
allowed. The following are examples of the principal types of claims 
which may be allowed, but these examples are not exclusive and other 
types of claims may be allowed, unless excluded by Sec. Sec.  17.44 and 
17.45:
    (1) Property loss or damage in quarters or other authorized places. 
Claims may be allowed for damage to, or loss of, property arising from 
fire, flood, hurricane, other natural disaster, theft, or other unusual 
occurrence, while such property is located at:
    (i) Quarters within the 50 States or the District of Columbia that 
were assigned to the claimant or otherwise provided in kind by the 
United States;
    (ii) Quarters outside the 50 States and the District of Columbia 
that were occupied by the claimant, whether or not they were assigned or 
otherwise provided in kind by the United States, except when the 
claimant is a civilian employee who is a local inhabitant; or
    (iii) Any warehouse, office, working area, or other place (except 
quarters) authorized or apparently authorized for the reception or 
storage of property.
    (2) Transportation or travel losses. Claims may be allowed for 
damage to, or loss of, property incident to transportation or storage 
pursuant to orders, or in connection with travel under orders, including 
property in the custody of a carrier, an agent or agency of the 
Government, or the claimant.
    (3) Manufactured homes. Claims may be allowed for damage to, or loss 
of, manufactured homes and their contents under the provisions of 
paragraph (c)(2) of this section. Claims for structural damage to 
manufactured homes, other than that caused by collision, and damage to 
contents of manufactured homes resulting from such structural damage, 
must contain conclusive evidence that the damage was not caused by 
structural deficiency of the manufactured home and that it was not 
overloaded. Claims for damage to, or loss of, tires mounted on 
manufactured homes will not be allowed, except in cases of collision, 
theft, or vandalism.
    (4) Enemy action or public service. Claims may be allowed for damage 
to,

[[Page 220]]

or loss of, property as a direct consequence of:
    (i) Enemy action or threat thereof, or combat, guerrilla, 
brigandage, or other belligerent activity, or unjust confiscation by a 
foreign power or its nationals;
    (ii) Action by the claimant to quiet a civil disturbance or to 
alleviate a public disaster; or
    (iii) Efforts by the claimant to save human life or Government 
property.
    (5) Property used for benefit of the Government. Claims may be 
allowed for damage to, or loss of, property when used for the benefit of 
the Government at the request of, or with the knowledge and consent of, 
superior authority.
    (6) Clothing and accessories. Claims may be allowed for damage to, 
or loss of, clothing or accessories customarily worn on the person, such 
as eyeglasses, hearing aids, or dentures.

[36 FR 24427, Dec. 22, 1971, as amended at 50 FR 9268, Mar. 7, 1985]



Sec.  17.44  Restrictions on certain claims.

    Claims of the type described in this section are only allowable 
subject to the restrictions noted:
    (a) Money or currency. Claims may be allowed for loss of money or 
currency only when lost incident to fire, flood, hurricane, other 
natural disaster, or by theft from quarters (as limited by paragraph (a) 
of Sec.  17.45). In instances of theft from quarters, it must be 
conclusively shown that the quarters were locked at the time of the 
theft. Reimbursement for loss of money or currency is limited to an 
amount which is determined to have been reasonable for the claimant to 
have had in his possession at the time of the loss.
    (b) Government property. Claims may only be allowed for property 
owned by the United States for which the claimant is financially 
responsible to any agency of the Government other than HUD.
    (c) Estimate fees. Claims may include fees paid to obtain estimates 
of repair only when it is clear that an estimate could not have been 
obtained without paying a fee. In that case, the fee may be allowed only 
in an amount determined to be reasonable in relation to the value of the 
property or the cost of the repairs.
    (d) Automobiles and other motor vehicles. Claims may only be allowed 
for damage to, or loss of, automobiles and other motor vehicles if:
    (1) Such motor vehicles were required to be used for official 
Government business (official Government business, as used here, does 
not include travel, or parking incident thereto, between quarters and 
office, or use of vehicles for the convenience of the owner. However, it 
does include travel, and parking incident thereto, between quarters and 
assigned place of duty specifically authorized by the employee's 
supervisor as being more advantageous to the Government); or
    (2) Shipment of such motor vehicles was being furnished or provided 
by the Government, subject to the provisions of Sec.  17.46.



Sec.  17.45  Unallowable claims.

    Claims are not allowable for the following:
    (a) Unassigned quarters in United States. Property loss or damage in 
quarters occupied by the claimant within the 50 States or the District 
of Columbia that were not assigned to him or otherwise provided in kind 
by the United States.
    (b) Business property. Property used for business or profit.
    (c) Unserviceable property. Wornout or unserviceable property.
    (d) Illegal possession. Property acquired, possessed, or transported 
in violation of law or in violation of applicable regulations or 
directives.
    (e) Articles of extraordinary value. Valuable articles, such as 
cameras, watches, jewelry, furs, or other articles of extraordinary 
value, when shipped with household goods or as unaccompanied baggage 
(shipment includes storage). This prohibition does not apply to articles 
in the personal custody of the claimant or articles properly checked, 
provided that reasonable protection or security measures have been taken 
by claimant.
    (f) Minimum amount. Loss or damage amounting to less than $10.

[[Page 221]]



Sec.  17.46  Claims involving carriers or insurers.

    In the event the property which is the subject of a claim was lost 
or damaged while in the possession of a carrier or was insured, the 
following procedures will apply:
    (a) Whenever property is damaged, lost, or destroyed while being 
shipped pursuant to authorized travel orders, the owner must file a 
written claim for reimbursement with the last commercial carrier known 
or believed to have handled the goods, or the carrier known to be in 
possession of the property when the damage or loss occurred, according 
to the terms of its bill of lading or contract, before submitting a 
claim against the Government under this subpart.
    (1) If more than one bill of lading or contract was issued, a 
separate demand should be made against the last carrier on each such 
document.
    (2) The demand should be made within 9 months of the date that 
delivery was made, or within 9 months of the date that delivery should 
ordinarily have been made.
    (3) If it is apparent that the damage or loss is attributable to 
packing, storage, or unpacking while in the custody of the Government, 
no demand need be made against the carrier.
    (b) Whenever property which is damaged, lost, or destroyed incident 
to the claimant's service is insured in whole or in part, the claimant 
must make demand in writing against the insurer for reimbursement under 
the terms and conditions of the insurance coverage, prior to the filing 
of the concurrent claim against the Government.
    (c) Failure to make a demand on a carrier or insurer or to make all 
reasonable efforts to protect and prosecute rights available against a 
carrier or insurer and to collect the amount recoverable from the 
carrier or insurer may result in reducing the amount recoverable from 
the Government by the maximum amount which would have been recoverable 
from the carrier or insurer, had the claim been timely or diligently 
prosecuted. However, no deduction will be made where the circumstances 
of the claimant's service preclude reasonable filing of such a claim or 
diligent prosecution, or the evidence indicates a demand was 
impracticable or would have been unavailing.
    (d) Following the submission of the claim against the carrier or 
insurer, the claimant may immediately submit his claim against the 
Government in accordance with the provisions of this subpart, without 
waiting until either final approval or denial of his claim is made by 
the carrier or insurer.
    (1) Upon submitting his claim, he will certify in his claim that he 
has or has not gained any recovery from a carrier or insurer, and 
enclose all correspondence pertinent thereto.
    (2) If final action has not been taken by the carrier or insurer on 
his claim, he will immediately notify them to address all correspondence 
in regard to his claim to him, in care of the General Counsel of HUD.
    (3) The claimant shall advise the General Counsel of any action 
taken by the carrier or insurer on his claim and upon request shall 
furnish all correspondence documents, and other evidence pertinent to 
the matter.
    (e) The claimant will assign to the United States to the extent of 
any payment on his claim accepted by him, all his right, title and 
interest in any claim he may have against any carrier, insurer, or other 
party arising out of the incident on which the claim against the United 
States is based. After payment of his claim by the United States, the 
claimant will, upon receipt of any payment from a carrier or insurer, 
pay the proceeds to the United States to the extent of the payment 
received by him from the United States.
    (f) Where a claimant recovers for the loss from the carrier or 
insurer before his claim under this subpart is settled, the amount or 
recovery shall be applied to his claim as follows:
    (1) When the amount recovered from a carrier, insurer, or other 
third party is greater than or equal to the claimant's total loss as 
determined under this part, no compensation is allowable under this 
part.
    (2) When the amount recovered is less than such total loss, the 
allowable amount is determined by deducting the recovery from the amount 
of such total loss.

[[Page 222]]

    (3) For the purpose of this paragraph (f) the claimant's total loss 
is to be determined without regard to the $6,500 maximum set forth 
above. However, if the resulting amount, after making this deduction, 
exceeds $6,500, the claimant will be allowed only $6,500.



Sec.  17.47  Settlement of claims.

    (a) The General Counsel, HUD, is authorized to settle (consider, 
ascertain, adjust, determine, and dispose of, whether by full or partial 
allowance or disallowance) any claim under this subpart.
    (b) The General Counsel may formulate such procedures and make such 
redelegations as may be required to fulfill the objectives of this 
subpart.
    (c) The General Counsel shall conduct such investigation as may be 
appropriate in order to determine the validity of a claim.
    (d) The General Counsel shall notify a claimant in writing of action 
taken on his claim, and if partial or full disallowance is made, the 
reasons therefor.
    (e) In the event a claim submitted against a carrier under Sec.  
17.46 has not been settled before settlement of the claim against the 
Government pursuant to this subpart, the General Counsel shall notify 
such carrier or insurer to pay the proceeds of the claim to HUD to the 
extent HUD has paid such to claimant in settlement.



Sec.  17.48  Computation of amount of award.

    (a) The amount allowed for damage to or loss of any item of property 
may not exceed the cost of the item (either the price paid in cash or 
property, or the value at the time of acquisition if not acquired by 
purchase or exchange); and there will be no allowance for replacement 
cost or for appreciation in the value of the property. Subject to these 
limitations, the amount allowable is either:
    (1) The depreciated value, immediately prior to the loss or damage, 
of property lost or damaged beyond economical repair, less any salvage 
value; or
    (2) The reasonable cost of repairs, when property is economically 
repairable, provided that the cost of repairs does not exceed the amount 
allowable under paragraph (a)(1) of this section.
    (b) Depreciation in value is determined by considering the type of 
article involved, its cost, its condition when damaged or lost, and the 
time elapsed between the date of acquisition and the date of damage or 
loss.
    (c) Replacement of lost or damaged property may be made in kind 
whenever appropriate.



Sec.  17.49  Attorney's fees.

    No more than 10 per centum of the amount paid in settlement of each 
individual claim submitted and settled under this subpart shall be paid 
or delivered to or received by any agent or attorney on account of 
services rendered in connection with that claim.



Sec.  17.50  Claims procedures.

    (a) Claims by, or on behalf of, employees of field offices shall be 
filed in writing with the appropriate Regional Counsel. Claims by, or on 
behalf of, employees of Department Headquarters shall be filed in 
writing with the General Counsel, Department of Housing and Urban 
Development, 451 7th Street, SW., Washington, DC 20410.
    (b) Each written claim shall contain, as a minimum:
    (1) Name, address, place of employment of claimant.
    (2) Place and date of loss or damage.
    (3) A brief statement of the facts and circumstances surrounding 
loss or damage.
    (4) Cost, date, and place of acquisition of each piece of property 
lost or damaged.
    (5) Two itemized repair estimates, or value estimates, whichever is 
applicable.
    (6) Copies of police reports, if applicable.
    (7) With respect to claims involving thefts or losses in quarters or 
other places where the property was reasonably kept, a statement as to 
what security precautions were taken to protect the property involved.
    (8) With respect to claims involving property being used for the 
benefit of the Government, a statement by the employee's supervisor 
evidencing that the claimant was required to provide

[[Page 223]]

such property or that his providing it was in the interest of the 
Government.
    (9) Other evidence as may be required by the General Counsel.

[36 FR 24427, Dec. 22, 1971, as amended at 48 FR 6536, Feb. 14, 1983]



   Subpart C_Procedures for the Collection of Claims by the Government

    Source: 76 FR 69045, Nov. 7, 2011, unless otherwise noted.

                           General Provisions



Sec.  17.61  Purpose and scope.

    (a) In general. HUD will undertake debt collection pursuant to this 
subpart in accordance with the Debt Collection Improvement Act of 1996, 
codified in scattered sections of 31 U.S.C. chapter 37; the revised 
Federal Claims Collection Standards, codified at 31 CFR parts 900 
through 904; the Treasury debt collection regulations set forth in 31 
CFR part 285; and such additional provisions as provided in this 
subpart.
    (b) Applicability of other statutes and regulations. (1) Nothing in 
this subpart precludes the authority under statutes and regulations 
other than those described in this subpart to collect, settle, 
compromise, or close claims, including, but not limited to:
    (i) Debts incurred by contractors under contracts for supplies and 
services awarded by HUD under the authority of subpart 32.6 of the 
Federal Acquisition Regulation (FAR);
    (ii) Debts arising out of the business operations of the Government 
National Mortgage Association; and
    (iii) Debts arising under Title I or section 204(g) of Title II of 
the National Housing Act (12 U.S.C. 1701 et seq.).
    (2) This subpart is not applicable to tax debts or to any debt for 
which there is an indication of fraud or misrepresentation, unless the 
debt is returned by the Department of Justice to HUD for handling.
    (c) Scope. Sections 17.65 through 17.79, under the heading 
Administrative Offset and Other Actions, includes the procedures that 
apply when HUD seeks satisfaction of debts owed to HUD by administrative 
offset of payments by the Federal Government other than Federal salary 
payments, and when HUD takes other administrative actions for nonpayment 
of debt. Section 17.81, under the heading Administrative Wage 
Garnishment, includes the procedures that apply when HUD seeks to 
satisfy a debt owed to HUD out of the debtor's compensation from an 
employer other than the Federal Government. Sections 17.83 through 
17.113, under the heading Salary Offset, include procedures that apply 
when HUD or another Federal agency seeks to satisfy a debt owed to it 
through offset of the salary of a current Federal employee.



Sec.  17.63  Definitions.

    As used in this subpart:
    Department or HUD means the Department of Housing and Urban 
Development, and includes a person authorized to act for HUD.
    Office means the organization of each Assistant Secretary of HUD or 
other HUD official at the Assistant Secretary level, and each Field 
Office.
    Office of Appeals or OA means the HUD Office of Appeals within the 
HUD Office of Hearings and Appeals.
    Secretary means the Secretary of HUD.
    Treasury means the Department of the Treasury.
    United States includes an agency of the United States.

                 Administrative Offset and Other Actions



Sec.  17.65  Demand and notice of intent to offset.

    HUD will make written demand upon the debtor pursuant to the 
requirements of 31 CFR 901.2 and send written notice of intent to offset 
to the debtor pursuant to the requirements of 31 CFR 901.3 and 31 CFR 
part 285, subpart A. The Secretary shall mail the demand and notice of 
intent to offset to the debtor, at the most current address that is 
available to the Secretary. HUD may refer the debt to the Treasury for 
collection and shall request that the amount of the debt be offset 
against any amount payable by the Treasury as a Federal payment, at any 
time

[[Page 224]]

after 60 days from the date such notice is sent to the debtor.



Sec.  17.67  Review of departmental records related to the debt.

    (a) Notification by the debtor. A debtor who intends to inspect or 
copy departmental records related to the debt pursuant to 31 CFR 901.3 
must, within 20 calendar days after the date of the notice in Sec.  
17.65, send a letter to HUD, at the address indicated in the notice of 
intent to offset, stating his or her intention. A debtor may also 
request, within 20 calendar days from the date of such notice, that HUD 
provide the debtor with a copy of departmental records related to the 
debt.
    (b) HUD's response. In response to a timely notification by the 
debtor as described in paragraph (a) of this section, HUD shall notify 
the debtor of the location and the time when the debtor may inspect or 
copy departmental records related to the debt. If the debtor requests 
that HUD provide a copy of departmental records related to the debt, HUD 
shall send the records to the debtor within 10 calendar days from the 
date that HUD receives the debtor's request. HUD may charge the debtor a 
reasonable fee to compensate for the cost of providing a copy of the 
departmental records related to the debt.



Sec.  17.69  Review within HUD of a determination that an amount is
past due and legally enforceable.

    (a) Notification by the debtor. A debtor who receives notice of 
intent to offset pursuant to Sec.  17.65 has the right to a review of 
the case and to present evidence that all or part of the debt is not 
past due or not legally enforceable. The debtor may send a copy of the 
notice with a letter notifying the Office of Appeals of his or her 
intention to present evidence. Failure to give this notice shall not 
jeopardize the debtor's right to present evidence within the 60 calendar 
days provided for in paragraph (b) of this section. If the Office of 
Appeals has additional procedures governing the review process, a copy 
of the procedures shall be mailed to the debtor after the request for 
review is received and docketed by the Office of Appeals.
    (b) Submission of evidence. If the debtor wishes to submit evidence 
showing that all or part of the debt is not past due or not legally 
enforceable, the debtor must submit such evidence to the Office of 
Appeals within 60 calendar days after the date of the notice of intent 
to offset. Failure to submit evidence will result in a dismissal of the 
request for review by the OA.
    (c) Review of the record. After timely submission of evidence by the 
debtor, the OA will review the evidence submitted by the Department that 
shows that all or part of the debt is past due and legally enforceable. 
The decision of an administrative judge of the OA will be based on a 
preponderance of the evidence as to whether there is a debt that is past 
due and whether it is legally enforceable. The administrative judge of 
the OA shall make a determination based upon a review of the evidence 
that comprises the written record, except that the OA may order an oral 
hearing if the administrative judge of the OA finds that:
    (1) An applicable statute authorizes or requires the Department to 
consider a waiver of the indebtedness and the waiver determination turns 
on credibility or veracity; or
    (2) The question of indebtedness cannot be resolved by review of the 
documentary evidence.
    (d) Previous decision by an administrative judge of the Office of 
Appeals. The debtor is not entitled to a review of the Department's 
intent to offset if an administrative judge of the OA has previously 
issued a decision on the merits that the debt is past due and legally 
enforceable, except when the debt has become legally unenforceable since 
the issuance of that decision, or the debtor can submit newly discovered 
material evidence that the debt is presently not legally enforceable.



Sec.  17.71  Request for hearing.

    The debtor shall file a request for a hearing with the OA at the 
address specified in the notice or at such other address as the OA may 
direct in writing to the debtor.

[[Page 225]]



Sec.  17.73  Determination of the HUD Office of Appeals.

    (a) Determination. An administrative judge of the OA shall issue a 
written decision that includes the supporting rationale for the 
decision. The decision of the administrative judge of the OA concerning 
whether a debt or part of a debt is past due and legally enforceable is 
the final agency decision with respect to the past due status and 
enforceability of the debt.
    (b) Copies. Copies of the decision of the administrative judge of 
the OA shall be distributed to HUD's General Counsel, HUD's Chief 
Financial Officer (CFO), or other appropriate HUD program official, the 
debtor, and the debtor's attorney or other representative, if any.
    (c) Notification to the Department of the Treasury. If the decision 
of the administrative judge of the OA affirms that all or part of the 
debt is past due and legally enforceable, HUD shall notify the Treasury 
after the date that the determination of the OA has been issued under 
paragraph (a) of this section and a copy of the determination has been 
received by HUD's CFO or other appropriate HUD program official. No 
referral shall be made to the Treasury if the review of the debt by an 
administrative judge of the OA subsequently determines that the debt is 
not past due or not legally enforceable.



Sec.  17.75  Postponements, withdrawals, and extensions of time.

    (a) Postponements and withdrawals. HUD may, for good cause, postpone 
or withdraw referral of the debt to the Treasury.
    (b) Extensions of time. At the discretion of an administrative judge 
of the OA, time limitations required in these procedures may be extended 
in appropriate circumstances for good cause.



Sec.  17.77  Stay of referral for offset.

    If the debtor timely submits evidence in accordance with Sec.  
17.69(b), the referral to the Treasury in Sec.  17.65 shall be stayed 
until the date of the issuance of a written decision by an 
administrative judge of the OA that determines that a debt or part of a 
debt is past due and legally enforceable.



Sec.  17.79  Administrative actions for nonpayment of debt.

    (a) Referrals for nonpayment of debt. When a contractor, grantee, or 
other participant in a program sponsored by HUD, fails to pay its debt 
to HUD within a reasonable time after demand, HUD shall take such 
measures to:
    (1) Refer such contractor, grantee, or other participant to the 
Office of General Counsel for investigation of the matter and possible 
suspension or debarment pursuant to 2 CFR part 2424, 2 CFR 180.800, and 
48 CFR subpart 9.4 of the Federal Acquisition Regulation (FAR); and
    (2) In the case of matters involving fraud or suspected fraud, refer 
such contractor, grantee, or other participant to the Office of 
Inspector General for investigation. However, the failure to pay HUD 
within a reasonable time after demand is not a prerequisite for referral 
for fraud or suspected fraud.
    (b) Excluded Parties List System (EPLS). Depending upon the outcome 
of the referral in paragraph (a) of this section, HUD shall take such 
measures to insure that the contractor, grantee, or other participant is 
placed on the EPLS.
    (c) Report to the Treasury. The failure of any surety to honor its 
obligations in accordance with 31 U.S.C. 9304 shall be reported to the 
Chief Financial Officer, who shall inform the Treasury.

                     Administrative Wage Garnishment



Sec.  17.81  Administrative wage garnishment.

    (a) In general. HUD may collect a debt by using administrative wage 
garnishment pursuant to 31 CFR 285.11. To the extent that situations 
arise that are not covered by 31 CFR 285.11, those situations shall be 
governed by 24 CFR part 26, subpart A.
    (b) Hearing official. Any hearing required to establish HUD's right 
to collect a debt through administrative wage garnishment shall be 
conducted by an administrative judge of the OA under 24 CFR part 26, 
subpart A of part 26.

[[Page 226]]

                              Salary Offset



Sec.  17.83  Scope and definitions.

    (a) The provisions set forth in Sec. Sec.  17.83 through 17.113 are 
the Department's procedures for the collection of delinquent nontax 
debts by salary offset of a Federal employee's pay to satisfy certain 
debts owed the government, including centralized salary offsets in 
accordance with 31 CFR part 285.
    (b)(1) This section and Sec. Sec.  17.85 through 17.99 apply to 
collections by the Secretary through salary offset from current 
employees of the Department and other agencies who owe debts to the 
Department; and
    (2) This section, Sec.  17.85, and Sec. Sec.  17.101 through 17.113 
apply to HUD's offset of pay to current employees of the Department and 
of other agencies who owe debts to HUD or other agencies under 
noncentralized salary offset procedures, in accordance with 5 CFR 
550.1109.
    (c) These regulations do not apply to debts or claims arising under 
the Internal Revenue Code of 1954 (26 U.S.C. 1-9602), the Social 
Security Act (42 U.S.C. 301-1397f), the tariff laws of the United 
States, or to any case where collection of a debt by salary offset is 
explicitly provided for or prohibited by another statute.
    (d) These regulations identify the types of salary offset available 
to the Department, as well as certain rights provided to the employee, 
which include a written notice before deductions begin, the opportunity 
to petition for a hearing, receiving a written decision if a hearing is 
granted, and the opportunity to propose a repayment agreement in lieu of 
offset. These employee rights do not apply to any adjustment to pay 
arising out of an employee's election of coverage or a change in 
coverage under a Federal benefits program requiring periodic deductions 
from pay, if the amount to be recovered was accumulated over four pay 
periods or less.
    (e) Nothing in these regulations precludes the compromise, 
suspension, or termination of collection actions where appropriate under 
the Department's regulations contained elsewhere in this subpart (see 24 
CFR 17.61 through 17.79).
    (f) As used in the salary offset provisions at Sec. Sec.  17.83 
through 17.113:
    Agency means:
    (i) An Executive department, military department, Government 
corporation, or independent establishment as defined in 5 U.S.C. 101, 
102, 103, or 104, respectively;
    (ii) The United States Postal Service; or
    (iii) The Postal Regulatory Commission.
    Debt means an amount owed to the United States and past due, from 
sources which include loans insured or guaranteed by the United States 
and all other amounts due the United States from assigned mortgages or 
deeds of trust, direct loans, advances, repurchase demands, fees, 
leases, rents, royalties, services, sale of real or personal property, 
overpayments, penalties, damages, interest, fines and forfeitures 
(except those arising under the Uniform Code of Military Justice), and 
all other similar sources.
    Determination means the point at which the Secretary or his designee 
decides that the debt is valid.
    Disposable pay means that part of current basic pay, special pay, 
incentive pay, retired pay, retainer pay, or in the case of an employee 
not entitled to basic pay, other authorized pay remaining after 
deductions required by law. Deductions from pay include:
    (i) Amounts owed by the individual to the United States;
    (ii) Amounts withheld for Federal employment taxes;
    (iii) Amounts properly withheld for Federal, state, or local income 
tax purposes, if the withholding of the amount is authorized or required 
by law and if amounts withheld are not greater than would be the case if 
the individual claimed all dependents to which he or she were entitled. 
The withholding of additional amounts under 26 U.S.C. 3402(i) may be 
permitted only when the individual presents evidence of tax obligation 
that supports the additional withholding;
    (iv) Amounts deducted as health insurance premiums, including, but 
not limited to, amounts deducted from civil service annuities for 
Medicare where such deductions are requested by

[[Page 227]]

the Health Care Financing Administration;
    (v) Amounts deducted as normal retirement contributions, not 
including amounts deducted for supplementary coverage. Amounts withheld 
as Survivor Benefit Plan or Retired Serviceman's Family Protection Plan 
payments are considered to be normal retirement contributions. Amounts 
voluntarily contributed toward additional civil service annuity benefits 
are considered to be supplementary;
    (vi) Amounts deducted as normal life insurance premiums from salary 
or other remuneration for employment, not including amounts deducted for 
supplementary coverage. Both Servicemembers' Group Life Insurance and 
``Basic Life'' Federal Employees' Group Life Insurance premiums are 
considered to be normal life insurance premiums; all optional Federal 
Employees' Group Life Insurance premiums and life insurance premiums 
paid for by allotment, such as National Service Life Insurance, are 
considered to be supplementary;
    (vii) Amounts withheld from benefits payable under title II of the 
Social Security Act where the withholding is required by law;
    (viii) Amounts mandatorily withheld for the U.S. Soldiers' and 
Airmen's Home; and
    (ix) Fines and forfeitures ordered by a court-martial or by a 
commanding officer.
    Employee means a current employee of a Federal agency, including a 
current member of the Armed Forces or Reserve of the Armed Forces of the 
United States.
    Pay means basic pay, special pay, income pay, retired pay, retainer 
pay, or, in the case of an employee not entitled to basic pay, other 
authorized pay.
    Salary offset means a deduction from the pay of an employee without 
his or her consent to satisfy a debt. Salary offset is one type of 
administrative offset that may be used by the Department in the 
collection of claims.
    Waiver means the cancellation, remission, forgiveness, or 
nonrecovery of a debt allegedly owed by an employee of an agency as 
permitted or required by 5 U.S.C. 5584, 10 U.S.C. 2774, 32 U.S.C. 716, 
or 5 U.S.C. 8346(b), or any other law.



Sec.  17.85  Coordinating offset with another Federal agency.

    (a) When HUD is owed the debt. When the Department is owed a debt by 
an employee of another agency, the other agency shall not initiate the 
requested offset until the Department provides the agency with a written 
certification that the debtor owes the Department a debt (including the 
amount and basis of the debt and the due date of the payment) and that 
the Department has complied with these regulations.
    (b) When another agency is owed the debt. The Department may use 
salary offset against one of its employees who is indebted to another 
agency if requested to do so by that agency. Such a request must be 
accompanied by a certification by the requesting agency that the person 
owes the debt (including the amount) and that the employee has been 
given the procedural rights required by 5 U.S.C. 5514 and 5 CFR part 
550, subpart K.



Sec.  17.87  Determination of indebtedness.

    In determining that an employee is indebted to HUD, the Secretary 
will review the debt to make sure that it is valid and past due.



Sec.  17.89  Notice requirements before offset.

    Except as provided in Sec.  17.83(d), deductions will not be made 
unless the Secretary first provides the employee with a minimum of 30 
calendar days written notice. This Notice of Intent to Offset Salary 
(Notice of Intent) will state:
    (a) That the Secretary has reviewed the records relating to the 
claim and has determined that a debt is owed, the amount of the debt, 
and the facts giving rise to the debt;
    (b) The Secretary's intention to collect the debt by means of 
deduction from the employee's current disposable pay account until the 
debt and all accumulated interest are paid in full;
    (c) The amount, frequency, approximate beginning date, and duration 
of the intended deductions;

[[Page 228]]

    (d) An explanation of the Department's requirements concerning 
interest, penalties, and administrative costs, including a statement 
that such assessments must be made unless excused in accordance with the 
Federal Claims Collection Standards as provided in 31 CFR 901.9 
(although this information may alternatively be provided in the demand 
notice pursuant to 24 CFR 17.65);
    (e) The employee's right to inspect and copy Department records 
relating to the debt or, if the employee or his or her representative 
cannot personally inspect the records, to request and receive a copy of 
such records;
    (f) The employee's right to enter into a written agreement with the 
Secretary for a repayment schedule differing from that proposed by the 
Secretary, so long as the terms of the repayment schedule proposed by 
the employee are agreeable to the Secretary;
    (g) The right to a hearing, conducted in accordance with subpart A 
of part 26 of this chapter by an administrative law judge of the 
Department or a hearing official of another agency, on the Secretary's 
determination of the debt, the amount of the debt, or percentage of 
disposable pay to be deducted each pay period, so long as a petition is 
filed by the employee as prescribed by the Secretary;
    (h) That the timely filing of a petition for hearing will stay the 
collection proceedings (See Sec.  17.91);
    (i) That a final decision on the hearing will be issued at the 
earliest practical date, but not later than 60 calendar days after the 
filing of the petition requesting the hearing, unless the employee 
requests and the hearing officer grants a delay in the proceedings;
    (j) That any knowingly false or frivolous statements, 
representations, or evidence may subject the employee to:
    (1) Disciplinary procedures appropriate under 5 U.S.C. Ch. 75, 5 CFR 
part 752, or any other applicable statutes or regulations;
    (2) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or 
any other applicable statutory authority; or
    (3) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002 or 
any other applicable statutory authority.
    (k) Any other rights and remedies available to the employee under 
statutes or regulations governing the program for which the collection 
is being made;
    (l) Unless there are applicable contractual or statutory provisions 
to the contrary, that amounts paid on or deducted for the debt which are 
later waived or found not owed to the United States will be promptly 
refunded to the employee; and
    (m) The method and time period for requesting a hearing, including 
the address of the Office of Appeals to which the request must be sent.



Sec.  17.91  Request for a hearing.

    (a) Except as provided in paragraph (d) of this section, an employee 
must file a petition for a hearing that is received by the Office of 
Appeals not later than 20 calendar days from the date of the 
Department's notice described in Sec.  17.89 if an employee wants a 
hearing concerning--
    (1) The existence or amount of the debt; or
    (2) The Secretary's proposed offset schedule.
    (b) The petition must be signed by the employee, must include a copy 
of HUD's Notice of Intent to Offset Salary, and should admit or deny the 
existence of or the amount of the debt, or any part of the debt, briefly 
setting forth any basis for a denial. If the employee objects to the 
percentage of disposable pay to be deducted from each check, the 
petition should state the objection and the reasons for it. The petition 
should identify and explain with reasonable specificity and brevity the 
facts, evidence, and witnesses that the employee believes support his or 
her position.
    (c) Upon receipt of the petition, the Office of Appeals will send 
the employee a copy of the Salary Offset Hearing Procedures Manual of 
the Department of Housing and Urban Development.
    (d) If the employee files a petition for hearing later than the 20 
calendar days as described in paragraph (a) of this section, the hearing 
officer may accept the request if the employee can show that the delay 
was because of circumstances beyond his or her control

[[Page 229]]

or because of failure to receive notice of the filing deadline (unless 
the employee has actual notice of the filing deadline).



Sec.  17.93  Result if employee fails to meet deadlines.

    An employee waives the right to a hearing, and will have his or her 
disposable pay offset in accordance with the Secretary's offset 
schedule, if the employee:
    (a) Fails to file a petition for a hearing as prescribed in Sec.  
17.91; or
    (b) Is scheduled to appear and fails to appear at the hearing.



Sec.  17.95  Written decision following a hearing.

    Written decisions provided after a request for a hearing will 
include:
    (a) A statement of the facts presented to support the nature and 
origin of the alleged debt;
    (b) The hearing officer's analysis, findings, and conclusions, in 
light of the hearing, concerning the employee's or the Department's 
grounds;
    (c) The amount and validity of the alleged debt; and
    (d) The repayment schedule, if applicable.



Sec.  17.97  Review of departmental records related to the debt.

    (a) Notification by employee. An employee who intends to inspect or 
copy departmental records related to the debt must send a letter to the 
Secretary stating his or her intention. The letter must be received by 
the Secretary within 20 calendar days of the date of the Notice of 
Intent.
    (b) Secretary's response. In response to timely notice submitted by 
the debtor as described in paragraph (a) of this section, the Secretary 
will notify the employee of the location and time when the employee may 
inspect and copy Department records related to the debt.



Sec.  17.99  Written agreement to repay debt as alternative to salary offset.

    (a) Notification by employee. The employee may propose, in response 
to a Notice of Intent, a written agreement to repay the debt as an 
alternative to salary offset. Any employee who wishes to do this must 
submit a proposed written agreement to repay the debt, which is received 
by the Secretary within 20 calendar days of the date of the Notice of 
Intent.
    (b) Secretary's response. In response to timely notice by the debtor 
as described in paragraph (a) of this section, the Secretary will notify 
the employee whether the employee's proposed written agreement for 
repayment is acceptable. It is within the Secretary's discretion to 
accept a repayment agreement instead of proceeding by offset. In making 
this determination, the Secretary will balance the Department's interest 
in collecting the debt against hardship to the employee. If the debt is 
delinquent and the employee has not disputed its existence or amount, 
the Secretary will accept a repayment agreement instead of offset only 
if the employee is able to establish that offset would result in undue 
financial hardship or would be against equity and good conscience.



Sec.  17.101  Procedures for salary offset: when deductions may begin.

    (a) Deductions to liquidate an employee's debt will be by the method 
and in the amount stated in the Secretary's Notice of Intent to collect 
from the employee's current pay.
    (b) If the employee filed a petition for hearing with the Secretary 
before the expiration of the period provided for in Sec.  17.91, then 
deductions will begin after:
    (1) The hearing officer has provided the employee with a hearing; 
and
    (2) The hearing officer has issued a final written decision in favor 
of the Secretary.
    (c) If an employee retires or resigns before collection of the 
amount of the indebtedness is completed, the remaining indebtedness will 
be collected according to the procedures for the collection of claims 
under Sec. Sec.  17.61 through 17.79.



Sec.  17.103  Procedures for salary offset: types of collection.

    A debt will be collected in a lump sum or in installments. 
Collection will be by lump-sum collection unless the debt is for other 
than travel advances

[[Page 230]]

and training expenses, and the employee is financially unable to pay in 
one lump sum, or the amount of the debt exceeds 15 percent of disposable 
pay. In these cases, deduction will be by installments.



Sec.  17.105  Procedures for salary offset: methods of collection.

    (a) General. A debt will be collected by deductions at officially 
established pay intervals from an employee's current pay account, unless 
the employee and the Secretary agree to alternative arrangements for 
repayment. The alternative arrangement must be in writing, signed by 
both the employee and the Secretary.
    (b) Installment deductions. Installment deductions will be made over 
a period not greater than the anticipated period of employment. The size 
and frequency of installment deductions will bear a reasonable relation 
to the size of the debt and the employee's ability to pay. However, the 
amount deducted for any period will not exceed 15 percent of the 
disposable pay from which the deduction is made, unless the employee has 
agreed in writing to the deduction of a greater amount. If possible, the 
installment payment will be sufficient in size and frequency to 
liquidate the debt in 3 years. Installment payments of less than $25 per 
pay period or $50 a month will be accepted only in the most unusual 
circumstances.
    (c) Sources of deductions. The Department will make deductions only 
from basic pay, special pay, incentive pay, retired pay, retainer pay, 
or, in the case of an employee not entitled to basic pay, other 
authorized pay.



Sec.  17.107  Procedures for salary offset: imposition of interest.

    Interest will be charged in accordance with the Federal Claims 
Collection Standards as provided in 31 CFR 901.9.



Sec.  17.109  Nonwaiver of rights.

    So long as there are no statutory or contractual provisions to the 
contrary, no employee involuntary payment (of all or a portion of a 
debt) collected under these regulations will be interpreted as a waiver 
of any rights that the employee may have under 5 U.S.C. 5514 or any 
other provision of contract or law.



Sec.  17.111  Refunds.

    The Department will refund promptly to the appropriate individual 
amounts offset under these regulations when:
    (a) A debt is waived or otherwise found not owing the United States 
(unless expressly prohibited by statute or regulation); or
    (b) The Department is directed by an administrative or judicial 
order to refund amounts deducted from the employee's current pay.



Sec.  17.113  Miscellaneous provisions: correspondence with the Department.

    The employee shall file a request for a hearing with the Clerk, OA, 
409 3rd Street SW., 2nd Floor, Washington, DC 20024, on official work 
days between the hours of 8:45 a.m. and 5:15 p.m. (or such other address 
as HUD may provide by notice from time to time). All other 
correspondence shall be submitted to the Departmental Claims Officer, 
Office of the Chief Financial Officer, Department of Housing and Urban 
Development, 451 Seventh Street SW., Washington, DC 20410 (or such other 
officer or address as HUD may provide by notice from time to time). 
Documents may be filed by personal delivery or mail.



PART 18_INDEMNIFICATION OF HUD EMPLOYEES--Table of Contents



    Authority: 5 U.S.C. 301; 42 U.S.C. 3535(d).

    Source: 62 FR 6096, Feb. 10, 1997, unless otherwise noted.



Sec.  18.1  Policy.

    (a) The Department of Housing and Urban Development may indemnify, 
in whole or in part, a Department employee (which for the purpose of 
this part includes a former Department employee) for any verdict, 
judgment or other monetary award which is rendered against any such 
employee, provided the Secretary or his or her designee determines that:
    (1) The conduct giving rise to the verdict, judgment or award was 
taken

[[Page 231]]

within the scope of his or her employment with the Department; and
    (2) Such indemnification is in the interest of the United States.
    (b) The Department of Housing and Urban Development may settle or 
compromise a personal damage claim against a Department employee by the 
payment of available funds, at any time, provided the Secretary or his 
or her designee determines that:
    (1) The alleged conduct giving rise to the personal damage claim was 
taken within the scope of employment; and
    (2) That such settlement or compromise is in the interest of the 
United States.
    (c) Absent exceptional circumstances, as determined by the Secretary 
or his or her designee, the Department will not entertain a request 
either to agree to indemnify or to settle a personal damage claim before 
entry of an adverse verdict, judgment or monetary award.
    (d) When an employee of the Department becomes aware that an action 
has been filed against the employee in his or her individual capacity as 
a result of conduct taken within the scope of his or her employment, the 
employee should immediately notify his or her supervisor that such an 
action is pending. The supervisor shall promptly notify the head of his 
or her operating component and the Associate General Counsel for 
Litigation and Fair Housing Enforcement, if the supervisor is located at 
headquarters, or Field Assistant General Counsel--who shall promptly 
notify the Associate General Counsel for Litigation and Fair Housing 
Enforcement--if the supervisor is located in the field. As used in this 
section, the term ``principal operating component'' means an office in 
the Department headed by an Assistant Secretary, the General Counsel, 
the Inspector General, or an equivalent departmental officer who reports 
directly to the Secretary. Questions regarding representation of the 
employee will be determined by the Department of Justice pursuant to 28 
CFR 50.15 (Representation of Federal officials and employees by 
Department of Justice attorneys or by private counsel furnished by the 
Department in civil, criminal, and congressional proceedings in which 
Federal employees are sued, subpoenaed, or charged in their individual 
capacities).
    (e) The employee may, thereafter, request indemnification to satisfy 
a verdict, judgment or monetary award entered against the employee or to 
compromise a claim pending against the employee. The employee shall 
submit a written request, with appropriate documentation including a 
copy of the verdict, judgment, award or other order or settlement 
proposal, in a timely manner to the head of the employee's principal 
operating component. The head of the employee's principal operating 
component shall submit the written request and accompanying 
documentation, together with a recommended disposition of the request, 
in a timely manner to the General Counsel.
    (f) The General Counsel shall seek the views of the Department of 
Justice on the request. Where the Department of Justice has rendered a 
decision denying representation of the employee pursuant to 28 CFR 
50.15, the General Counsel shall seek the concurrence of the Department 
of Justice on the request. If the Department of Justice does not concur 
in the request, the General Counsel shall so advise the employee and no 
further action on the employee's request shall be taken.
    (g) In all instances except those where the Department of Justice 
has non-concurred in the request, the General Counsel shall forward for 
decision to the Secretary or his or her designee the employee's request, 
the recommendation of the head of the employee's principal operating 
component, the views of the Department of Justice, and the General 
Counsel's recommendation.
    (h) Any payment under this part, either to indemnify a Department 
employee or to settle a personal damage claim, is contingent upon the 
availability of appropriated funds of the Department that are permitted 
by law to be utilized for this purpose.



PART 20_OFFICE OF HEARINGS AND APPEALS--Table of Contents



Sec.
20.1 Establishment of the Office of Hearings and Appeals.

[[Page 232]]

20.3 Location, organization, and officer qualifications.
20.5 Jurisdiction of Office of Appeals.

    Authority: 42 U.S.C. 3535(d).

    Source: 72 FR 53878, Sept. 20, 2007, unless otherwise noted.



Sec.  20.1  Establishment of the Office of Hearings and Appeals.

    There is established in the Office of the Secretary the Office of 
Hearings and Appeals.



Sec.  20.3  Location, organization, and officer qualifications.

    (a) Mailing address. The Office of Hearings and Appeals is located 
at the U.S. Department of Housing and Urban Development, 451 7th Street, 
SW., Room B-133, Washington, DC 20410.
    (b) Location. For deliveries, the Office of Hearings and Appeals is 
physically located at 409 Third Street, SW., Suite 201, Washington, DC 
20024. The telephone number of the Office of Hearings and Appeals is 
202-254-0000. Hearing- or speech-impaired individuals may access this 
number via TTY by calling the toll-free Federal Information Relay 
Service at 800-877-8339. The facsimile number is 202-619-7304.
    (c) Organization. The Office of Hearings and Appeals consists of two 
divisions: the Office of Administrative Law Judges and the Office of 
Appeals. Its administrative activities are supervised by the Director of 
the Office of Hearings and Appeals.
    (d) Officer qualifications. The Director, Administrative Judges, and 
Administrative Law Judges of the Office of Hearings and Appeals shall be 
attorneys at law duly licensed by any state, commonwealth, territory, or 
the District of Columbia.

[72 FR 53878, Sept. 20, 2007, as amended at 74 FR 4635, Jan. 26, 2009]



Sec.  20.5  Jurisdiction of Office of Appeals.

    The Office of Appeals shall, consistent with statute and regulation, 
have jurisdiction over matters assigned to it by the Secretary or 
designee. Determinations shall have the finality provided by the 
applicable statute, regulation, or agreement.



PART 24_GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
--Table of Contents



    Authority: 42 U.S.C. 3535(d).



Sec.  24.1  Debarment and Suspension (Nonprocurement).

    The policies, procedures, and requirements for debarment, 
suspension, and limited denial of participation are set forth in 2 CFR 
part 2424.

[72 FR 73491, Dec. 27, 2007]



PART 25_MORTGAGEE REVIEW BOARD--Table of Contents



Sec.
25.1 Scope of rules in this part.
25.2 Establishment and authority of Board.
25.3 Definitions.
25.4 Operation of the Mortgagee Review Board.
25.5 Administrative actions.
25.6 Violations creating grounds for administrative action.
25.7 Notice of violation.
25.8 Factors considered in taking administrative action.
25.9 Notice of administrative action.
25.10 Hearings and hearing request.
25.11 Modification of Board orders.
25.12 Public access to information; publication of actions.
25.13 Notifying GNMA of withdrawal actions.
25.15 Retroactive application of Board regulations.
25.17 [Reserved]

    Authority: 12 U.S.C. 1708(c), 1708(d), 1709(s), 1715b and 1735(f)-
14; 42 U.S.C. 3535(d).

    Source: 57 FR 31051, July 13, 1992, unless otherwise noted.



Sec.  25.1  Scope of rules in this part.

    The rules in this part are applicable to the operation of the 
Mortgagee Review Board and to proceedings arising from administrative 
actions of the Mortgagee Review Board.



Sec.  25.2  Establishment and authority of Board.

    (a) Establishment of the Board. The Mortgagee Review Board (Board) 
was established in the Federal Housing Administration, which is in the 
Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, by section 202(c)(1) of the National Housing

[[Page 233]]

Act (12 U.S.C. 1708(c)(1)), as added by section 142 of the Department of 
Housing and Urban Development Reform Act of 1989 (Pub. L. 101-235, 
approved December 15, 1989).
    (b) Authority of the Board. The Board has the authority to initiate 
administrative actions against mortgagees and lenders under 12 U.S.C. 
1708(c) and shall exercise all of the functions of the Secretary with 
respect to administrative actions against mortgagees and lenders and 
such other functions as are provided in this part. The Board shall have 
all powers necessary and incident to the performance of these functions 
and such other functions as are provided in this part, except as limited 
by this part.
    (1) Administrative Actions. The Board has the authority to take any 
administrative action against mortgagees and lenders as provided in 12 
U.S.C. 1708(c). The Board may delegate its authority to take all 
nondiscretionary acts.
    (2) Civil Money Penalties. The Board is authorized pursuant to 
section 536 of the National Housing Act (12 U.S.C. 1735(f)-14) to impose 
civil money penalties upon mortgagees and lenders, as set forth in 24 
CFR part 30. The violations for which a civil money penalty may be 
imposed are listed in subpart B (Violations) of 24 CFR part 30. Hearings 
to challenge the imposition of civil money penalties shall be conducted 
according to the applicable rules of 24 CFR part 30.
    (3) Authorization for other administrative actions. The Board may, 
in its discretion, approve the initiation of a suspension or debarment 
action against a mortgagee or lender by any Suspending or Debarring 
Official under 24 CFR part 24.

[73 FR 60540, Oct. 10, 2008]



Sec.  25.3  Definitions.

    Adequate evidence. Information sufficient to support the reasonable 
belief that a particular act or omission has occurred.
    Board. The Mortgagee Review Board.
    Lender. A financial institution as defined in paragraphs (a) and (b) 
of the definition of lender in Sec.  202.2 of this title.
    Mortgagee. For purposes of this part, the term ``mortgagee'' 
includes:
    (1) The original lender under the mortgage, as that term is defined 
at sections 201(a) and 207(a)(1) of the National Housing Act (12 U.S.C. 
1707(a), 1713(a)(1));
    (2) A lender, as defined in this section;
    (3) A branch office or subsidiary of the mortgagee or lender; or
    (4) Successors and assigns of the mortgagee or lender, as are 
approved by the Commissioner.
    Person. Any individual, corporation, partnership, association, unit 
of government or legal entity, however organized.
    Secretary. The Secretary of the Department of Housing and Urban 
Development or a person designated by the Secretary.

[57 FR 31051, July 13, 1992; 57 FR 37085, Aug. 18, 1992, as amended at 
60 FR 13835, Mar. 14, 1995; 60 FR 39237, Aug. 1, 1995; 61 FR 685, Jan. 
9, 1996; 62 FR 20081, Apr. 24, 1997; 72 FR 53878, Sept. 20, 2007; 73 FR 
60540, Oct. 10, 2008; 77 FR 51467, Aug. 24, 2012]



Sec.  25.4  Operation of the Mortgagee Review Board.

    (a) Members. The Board consists of the following HUD officials 
designated to serve on the Board by section 202(c)(2) of the National 
Housing Act (12 U.S.C. 1708(c)(2)):
    (1) The Assistant Secretary of Housing-Federal Housing Commissioner;
    (2) The General Counsel of the Department;
    (3) The President of the Government National Mortgage Association 
(GNMA);
    (4) The Assistant Secretary for Administration;
    (5) The Assistant Secretary for Fair Housing and Equal Opportunity 
(in cases involving violations of nondiscrimination requirements);
    (6) The Chief Financial Officer of the Department; and
    (7) The Director of the Enforcement Center; or their designees.
    (b) Advisors. The Inspector General or his or her designee, and the 
Director of the Office of Lender Activities and Program Compliance (or 
such other position as may be assigned such duties), and such other 
persons as the Board may appoint, shall serve as nonvoting advisors to 
the Board.

[[Page 234]]

    (c) Quorum. Four members of the Board or their designees shall 
constitute a quorum.
    (d) Determination by the Board. Any administrative action taken by 
the Board shall be determined by a majority vote of the quorum.

[57 FR 31051, July 13, 1992; 57 FR 37085, Aug. 18, 1992, as amended at 
73 FR 60540, Oct. 10, 2008]



Sec.  25.5  Administrative actions.

    (a) General. The Board is authorized to take administrative actions 
in accordance with 12 U.S.C. 1708(c), including, but not limited to, the 
following: issue a letter of reprimand, probation, suspension, or 
withdrawal; or enter into a settlement agreement.
    (b) Letter of reprimand. A letter of reprimand shall be effective 
upon receipt of the letter by the mortgagee. Failure to comply with a 
directive in the letter of reprimand may result in any other 
administrative action that the Board finds appropriate as provided by 12 
U.S.C. 1708(c).
    (c) Probation. Probation shall be effective upon receipt of the 
notice of probation by the mortgagee. Failure to comply with the terms 
of probation may result in any other administrative action that the 
Board finds appropriate as provided by 12 U.S.C. 1708(c).
    (d) Suspension--(1) Effect of suspension. (i) During the period of 
suspension, HUD will not endorse any mortgage originated by the 
suspended mortgagee under the Title II program unless prior to the date 
of suspension:
    (A) A firm commitment has been issued relating to any such mortgage; 
or
    (B) A Direct Endorsement underwriter has approved the mortgagor for 
any such mortgage.
    (ii) During the period of suspension, a lender may not originate new 
Title I loans under its Title I Contract of Insurance or apply for a new 
Contract of Insurance.
    (2) Effective date of suspension. A suspension issued pursuant to 
Sec.  25.7(d) is effective upon issuance. Any other suspension is 
effective upon receipt of the notice of suspension by the mortgagee.
    (e) Withdrawal--(1) Effect of withdrawal. (i) During the period of 
withdrawal, HUD will not endorse any mortgage originated by the 
withdrawn mortgagee under the Title II program, unless prior to the date 
of withdrawal:
    (A) A firm commitment has been issued relating to any such mortgage; 
or
    (B) A Direct Endorsement underwriter has approved the mortgagor for 
any such mortgage.
    (ii) During the period of withdrawal, a lender may not originate new 
Title I loans under its Title I Contract of Insurance or apply for a new 
Contract of Insurance. The Board may limit the geographical extent of 
the withdrawal, or limit its scope (e.g., to either the single family or 
multifamily activities of a withdrawn mortgagee). Upon the expiration of 
the period of withdrawal, the mortgagee may file a new application for 
approval under 24 CFR part 202.
    (2) Effective date of withdrawal. (i) If the Board determines that 
immediate action is in the public interest or in the best interests of 
the Department, then withdrawal shall be effective upon receipt of the 
Board's notice of withdrawal.
    (ii) If the Board does not determine that immediate action is 
necessary according to paragraph (e)(2)(i) of this section, then 
withdrawal shall be effective either:
    (A) Upon the expiration of the 30-day period specified in Sec.  
25.10, if the mortgagee has not requested a hearing; or
    (B) Upon receipt of the Board's decision under Sec.  25.10, if the 
mortgagee requests a hearing.

[73 FR 60540, Oct. 10, 2008, as amended at 77 FR 51467, Aug. 24, 2012]



Sec.  25.6  Violations creating grounds for administrative action.

    Any administrative action imposed under 12 U.S.C. 1708(c) shall be 
based upon one or more of the following violations:
    (a) The transfer of an insured mortgage to non-approved mortgagee, 
except pursuant to 24 CFR 203.433 or 203.435;
    (b) The failure of a mortgagee to segregate all escrow funds 
received from mortgagors on account of ground rents, taxes, assessments 
and insurance premiums, or failure to deposit these

[[Page 235]]

funds with one or more financial institutions in a special account or 
accounts that are fully insured by the Federal Deposit Insurance 
Corporation or by the National Credit Union Administration except as 
otherwise provided in writing by the Assistant Secretary for Housing--
Federal Housing Commissioner;
    (c) The use of escrow funds for any purpose other than that for 
which they are received;
    (d) The termination of a mortgagee's supervision by a governmental 
agency;
    (e) The failure of a nonsupervised mortgagee to submit the required 
annual audit report of its financial condition prepared in accordance 
with instructions issued by the Secretary within 90 days of the close of 
its fiscal year, or such longer period as the Assistant Secretary of 
Housing--Federal Housing Commissioner may authorize in writing prior to 
the expiration of 90 days;
    (f) The payment by a mortgagee of a referral fee to any person or 
organization; or payment of any thing of value, directly or indirectly, 
in connection with any insured mortgage transaction or transactions to 
any person, including but not limited to an attorney, escrow agent, 
title company, consultant, mortgage broker, seller, builder or real 
estate agent, if that person has received any other compensation from 
the mortgagor, the seller, the builder or any other person for services 
related to such transactions or from or related to the purchase or sale 
of the mortgaged property, except compensation paid for the actual 
performance of such services as may be approved by the Assistant 
Secretary for Housing--Federal Housing Commissioner;
    (g) Failure to comply with any agreement, certification, 
undertaking, or condition of approval listed on, or applicable to, 
either a mortgagee's application for approval or an approved mortgagee's 
branch office notification;
    (h) Failure of an approved mortgagee to meet or maintain the 
applicable net worth, liquidity or warehouse line of credit requirements 
of 24 CFR part 202 pertaining to net worth, liquid assets, and warehouse 
line of credit or other acceptable funding plan;
    (i) Failure or refusal of an approved mortgagee to comply with an 
order of the Board, the Secretary, the hearing official, hearing officer 
or other independent official to whom matters are referred under Sec.  
25.8(d)(2).
    (j) Violation of the requirements of any contract or agreement with 
the Department, or violation of the requirements set forth in any 
statute, regulation, handbook, mortgagee letter, or other written rule 
or instruction;
    (k) Submission of false information to HUD in connection with any 
HUD/FHA insured mortgage transaction;
    (l) Failure of a mortgagee to respond to inquiries from the Board;
    (m) Indictment or conviction of a mortgagee or any of its officers, 
directors, principals or employees for an offense which reflects upon 
the responsibility, integrity, or ability of the mortgagee to 
participate in HUD/FHA programs as an approved mortgagee;
    (n) Employing or retaining:
    (1) An officer, partner, director, or principal at such time when 
such person was suspended, debarred, ineligible, or subject to a limited 
denial of participation under 2 CFR part 2424 or otherwise prohibited 
from participation in HUD programs, where the mortgagee knew or should 
have known of the prohibition;
    (2) An employee who is not an officer, partner, director, or 
principal and who is or will be working on HUD/FHA program matters at a 
time when such person was suspended, debarred, ineligible, or subject to 
a limited denial of participation under 2 CFR part 2424 or otherwise 
prohibited from participation in HUD programs, where the mortgagee knew 
or should have known of the prohibition;
    (o) Violation by an approved mortgagee of the nondiscrimination 
requirements of the Equal Credit Opportunity Act (15 U.S.C. 1691-1691f), 
Fair Housing Act (42 U.S.C. 3601-3619), Executive Order 11063 (27 FR 
11527), and all regulations issued pursuant thereto;
    (p) Business practices which do not conform to generally accepted 
practices of prudent mortgagees or which demonstrate irresponsibility;

[[Page 236]]

    (q) Failure to cooperate with an audit or investigation by the 
Department's Office of Inspector General or an inquiry by HUD/FHA into 
the conduct of the mortgagee's HUD/FHA insured business or any other 
failure to provide information to the Secretary or a representative 
related to the conduct of the mortgagee's HUD/FHA business;
    (r) Violation by an approved mortgagee of the requirements or 
prohibitions of the Real Estate Settlement Procedures Act (12 U.S.C. 
2601-2617);
    (s) Without regard to the date of the insurance of the mortgage, 
failure to service an insured mortgage in accordance with the 
regulations and any other requirements of the Secretary which are in 
effect at the time the act or omission occurs;
    (t) Failure to administer properly an assistance payment contract 
under section 235 of the National Housing Act (12 U.S.C. 1715z);
    (u) Failure to pay the application and annual fees required by 24 
CFR part 202;
    (v) The failure of a coinsuring mortgagee:
    (1) To properly perform underwriting, servicing or property 
disposition functions in accordance with instructions and standards 
issued by the Commissioner;
    (2) To make full payment to an investing mortgagee as required by 24 
CFR part 204;
    (3) To discharge responsibilities under a contract for coinsurance;
    (4) To comply with restrictions concerning the transfer of a 
coinsured mortgage to an agency not approved under 24 CFR part 250;
    (5) To maintain additional net worth requirements, as applicable;
    (w) Failure to remit, or timely remit, mortgage insurance premiums, 
loan insurance charges, late charges, or interest penalties to the 
Department;
    (x) Failure to submit a report required under 24 CFR 202.12(c) 
within the time determined by the Commissioner, or to commence or 
complete a plan for corrective action under that section within the time 
agreed upon with the Commissioner.
    (y) Failure to properly perform underwriting functions in accordance 
with instructions and standards issued by the Department;
    (z) Failure to fund mortgage loans or any other misuse of mortgage 
loan proceeds;
    (aa) Permitting the use of strawbuyer mortgagors in an insured 
mortgage transaction where the mortgagee knew or should have known of 
such use of strawbuyers;
    (bb) Breach by the mortgagee of a fiduciary duty owed by it to any 
person as defined in Sec.  25.3, including GNMA and the holder of any 
mortgage-backed security guaranteed by GNMA, with respect to an insured 
loan or mortgage transaction.
    (cc) Violation by a Title I lender of any of the applicable 
provisions of this section or 24 CFR 202.11(a)(2).
    (dd) Failure to pay any civil money penalty, but only after all 
administrative appeals requested by the mortgagee have been exhausted.
    (ee) Submitting, or causing to be submitted, with an application for 
FHA mortgage insurance an appraisal, valuation condition sheet, or any 
other documentation relating to an appraisal that does not satisfy FHA 
requirements.
    (ff) Any other violation of Federal Housing Administration 
requirements that the Board or the Secretary determines to be so serious 
as to justify an administrative sanction.

(Approved by the Office of Management and Budget under Control Number 
2502-0450)

[57 FR 31051, July 13, 1992; 57 FR 37085, Aug. 18, 1992, as amended at 
57 FR 58339, Dec. 9, 1992; 60 FR 13836, Mar. 14, 1995; 60 FR 39238, Aug. 
1, 1995; 61 FR 685, Jan. 9, 1996; 62 FR 20081, Apr. 24, 1997; 69 FR 
43509, July 20, 2004; 72 FR 73492, Dec. 27, 2007. Redesignated and 
amended at 73 FR 60541, Oct. 10, 2008; 77 FR 51467, Aug. 24, 2012]



Sec.  25.7  Notice of violation.

    (a) General. The Chairperson of the Board, or the Chairperson's 
designee, shall issue a written notice to the mortgagee at the 
mortgagee's address of record at least 30 days prior to taking any 
action under 12 U.S.C. 1708(c) against the mortgagee. Proof of delivery 
to the mortgagee's address of record shall establish the mortgagee's 
receipt of the notice. The notice shall state the specific violations 
that have

[[Page 237]]

been alleged, and shall direct the mortgagee to reply in writing to the 
Board within 30 days after receipt of the notice by the mortgagee. The 
notice shall also provide the address to which the response shall be 
sent. If the mortgagee fails to reply during such time period, the Board 
may make a determination without considering any comments of the 
mortgagee.
    (b) Mortgagee's response. The mortgagee's response to the Board 
shall be in a format prescribed by the Secretary and shall not exceed 15 
double-spaced typewritten pages. The response shall include an executive 
summary, a statement of the facts surrounding the matter, an argument, 
and a conclusion. Such response shall also address the factors listed in 
Sec.  25.8. A more lengthy submission, including documents and other 
exhibits, may be simultaneously submitted to Board staff for review.
    (c) Exception for letter of reprimand. Whenever information comes 
before the Board that discloses a basis for the issuance of a letter of 
reprimand, the Board may issue the letter without having previously 
issued a notice of violation.
    (d) Exception for immediate suspension. If the Board determines that 
there exists adequate evidence that immediate action is required to 
protect the financial interests of the Department or the public, the 
Board may take a suspension action without having previously issued a 
notice of violation.

[73 FR 60541, Oct. 10, 2008]



Sec.  25.8  Factors considered in taking administrative action.

    In determining which administrative action under 12 U.S.C. 1708(c), 
if any, should be taken, the Board will consider, among other factors, 
the seriousness and extent of the violations, the degree of mortgagee 
responsibility for the occurrences, and any other mitigating or 
aggravating facts. Where the Board is considering a withdrawal action, 
the Board will also consider whether the violations were egregious or 
willful, in order to determine whether a permanent withdrawal is 
mandated by 12 U.S.C. 1708(c).

[73 FR 60541, Oct. 10, 2008]



Sec.  25.9  Notice of administrative action.

    (a) Whenever the Board decides to take an action in accordance with 
12 U.S.C. 1708(c)(3), the Chairperson of the Board, or the Chairperson's 
designee, shall issue a written notice of the action to the mortgagee at 
the mortgagee's address of record of the determination. Proof of 
delivery to the mortgagee's address of record shall establish the 
mortgagee's receipt of the notice.
    (b) In actions for probation, suspension, or withdrawal, the notice 
shall describe the nature and duration of the administrative action, and 
shall specifically state the reasons for the action. In actions for 
probation, suspension, or withdrawal, the notice shall inform the 
mortgagee of its right to a hearing regarding the administrative action 
and of the manner and time in which to request a hearing.

[73 FR 60541, Oct. 10, 2008]



Sec.  25.10  Hearings and hearing request.

    (a) Hearing request. A mortgagee subject to any administrative 
action under 12 U.S.C. 1708(c), except for a letter of reprimand, may 
request a hearing, which shall be held on the record before an 
administrative law judge. The mortgagee shall submit its request for a 
hearing within 30 days of receiving the Board's notice of administrative 
action. The request shall be addressed to the Mortgagee Review Board 
Docket Clerk, Department of Housing and Urban Development, 451 7th 
Street, SW., Washington, DC 20410. The request shall specifically 
respond to the violations set forth in the notice of administrative 
action. If the mortgagee fails to request a hearing within 30 days after 
receiving the notice of administrative action, the Board's action shall 
become final.
    (b) Hearing by Administrative Law Judge. Hearings are to be 
conducted by an Administrative Law Judge (ALJ), as set forth in this 
part. The ALJ shall commence a de novo hearing within 30 days of HUD's 
receipt of the mortgagee's request, unless the mortgagee moves for an 
extension of time. The ALJ may extend this time period for good cause.

[[Page 238]]

    (c) Procedural rules. The hearing shall be conducted in accordance 
with the applicable provisions of 24 CFR part 26, with the following 
modifications:
    (1) The mortgagee or its representative shall be afforded an 
opportunity to appear, submit documentary evidence, present witnesses, 
and confront any witness the agency presents, except that the parties 
shall not be allowed to present members of the Board as witnesses.
    (2) Discovery of information and/or documents that do not pertain to 
the appealing mortgagee, including, but not limited to, reviews or 
audits by the Department or administrative actions by the Board against 
mortgagees other than the appealing mortgagee, shall not be permitted. 
Members of the Board shall not be subject to deposition.
    (3) The hearing shall generally be held in Washington, DC. However, 
upon a showing of undue hardship or other cause, the ALJ may, in his or 
her discretion, order the hearing to be held in a location other than 
Washington, DC.

[73 FR 60542, Oct. 10, 2008]



Sec.  25.11  Modification of Board orders.

    No order of an ALJ before whom proceedings are conducted under Sec.  
25.10 may modify or otherwise disturb in any way an order or notice by 
the Board, unless the order of the ALJ becomes final agency action in 
accordance with subpart B of part 26 of this title.

[73 FR 60542, Oct. 10, 2008]



Sec.  25.12  Public access to information; publication of actions.

    (a) Where a notice of administrative action does not result in a 
hearing and in any cases in which a settlement is entered into by the 
Board and a mortgagee, all non-privileged information regarding the 
nature of the violation and the resolution of the action shall be 
available to the public.
    (b) Publication in the Federal Register. The Secretary shall 
publish, in the Federal Register, a description of and the cause for 
each administrative action taken by the Board against a mortgagee.
    (c) Notification of other agencies. Whenever the Board has taken any 
discretionary action to suspend and/or withdraw the approval of a 
mortgagee, the Secretary shall provide prompt notice of the action and a 
statement of the reasons for the action to the Secretary of Veterans 
Affairs; the chief executive officer of the Federal National Mortgage 
Association; the chief executive officer of the Federal Home Loan 
Mortgage Corporation; the Administrator of the Rural Housing Service 
(formerly the Farmers Home Administration); the Comptroller of the 
Currency, if the mortgagee is a National Bank or District Bank or 
subsidiary or affiliate of such a bank; the Board of Governors of the 
Federal Reserve System, if the mortgagee is a state bank that is a 
member of the Federal Reserve System or a subsidiary or affiliate of 
such a bank, or a bank holding company or a subsidiary or affiliate of 
such a company; the Board of Directors of the Federal Deposit Insurance 
Corporation, if the mortgagee is a state bank that is not a member of 
the Federal Reserve System, or is a subsidiary or affiliate of such a 
bank; and the Director of the Office of Thrift Supervision, if the 
mortgagee is a federal or state savings association or a subsidiary or 
affiliate of a savings association.
    (d) Notification to GNMA of withdrawal actions. Whenever the Board 
issues a notice of violation that could lead to withdrawal of a 
mortgagee's approval, or is notified by GNMA of an action that could 
lead to withdrawal of GNMA approval, the Board shall proceed in 
accordance with 12 U.S.C. 1708(d).

[73 FR 60542, Oct. 10, 2008]



Sec.  25.13  Notifying GNMA of withdrawal actions.

    When the Board issues a notice of violation that could lead to 
withdrawal of a mortgagee's approval, or is notified by GNMA of an 
action that could lead to withdrawal of GNMA approval, the Board shall 
proceed in accordance with 12 U.S.C. 1708(d).

(Approved by the Office of Management and Budget under Control Number 
2502-0450)

[61 FR 685, Jan. 9, 1996]

[[Page 239]]



Sec.  25.15  Retroactive application of Board regulations.

    Limitations on participation in HUD mortgage insurance programs 
proposed or imposed prior to August 12, 1992, under an ancillary 
procedure shall not be affected by this part. This part shall apply to 
sanctions initiated after the effective date of the Department of 
Housing and Urban Development Reform Act of 1989 (December 15, 1989) 
regardless of the date of the cause giving rise to the sanction.

[57 FR 31051, July 13, 1992. Redesignated at 61 FR 685, Jan. 9, 1996]



Sec.  25.17  [Reserved]



PART 26_HEARING PROCEDURES--Table of Contents



               Subpart A_Hearings Before Hearing Officers

Sec.
26.1 Purpose and scope.

                             Hearing Officer

26.2 Hearing officer, powers, and duties.
26.3 Ex parte communications.
26.4 Sanctions.
26.5 Disqualification of hearing officer.

                      Representation of the Parties

26.6 Department representative.
26.7 Respondent's representative.
26.8 Standards of practice.

                          Pleadings and Motions

26.9 Form and filing requirements.
26.10 Service.
26.11 Time computation.
26.12 Notice of administrative action.
26.13 Complaint.
26.14 Answer.
26.15 Amendments and supplemental pleadings.
26.16 Motions.

                                Discovery

26.17 Prehearing conference.
26.18 Discovery.
26.19 Request for production of documents.
26.20 Depositions.
26.21 Written interrogatories.
26.22 Requests for admissions.

                                Hearings

26.23 Public nature and timing of hearings; transcripts.
26.24 Rules of evidence.
26.25 Hearing officer's determination and order.

                           Secretarial Review

26.26 Review of determination of hearing officers.
26.27 Interlocutory rulings.

     Subpart B_Hearings Pursuant to the Administrative Procedure Act

26.28 Purpose and scope.
26.29 Definitions.
26.30 Service and filing.
26.31 Time computations.

                        Administrative Law Judge

26.32 Powers and duties of the Administrative Law Judge (ALJ).
26.33 Ex parte communications.
26.34 Sanctions.
26.35 Disqualification of ALJ.

                                 Parties

26.36 Parties to the hearing.
26.37 Separation of functions.

                          Prehearing Procedures

26.38 Commencement of action.
26.39 Prehearing conferences.
26.40 Motions.
26.41 Default.

                                Discovery

26.42 Discovery.
26.43 Subpoenas.
26.44 Protective orders.

                                Hearings

26.45 General.
26.46 Witnesses.
26.47 Evidence.
26.48 Posthearing briefs.
26.49 The record.
26.50 Initial decision.
26.51 Interlocutory rulings.
26.52 Appeal to the Secretary.
26.53 Exhaustion of administrative remedies.
26.54 Judicial review.
26.55 Collection of civil penalties and assessments.
26.56 Right to administrative offset.

    Authority: 42 U.S.C. 3535(d).

    Source: 73 FR 76833, Dec. 17, 2008, unless otherwise noted.



               Subpart A_Hearings Before Hearing Officers



Sec.  26.1  Purpose and scope.

    This part sets forth rules of procedure in certain proceedings of 
the Department of Housing and Urban Development presided over by a 
hearing officer. These rules of procedure apply to

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administrative sanction hearings pursuant to 2 CFR part 2424 and to 
hearings with respect to determinations by the Multifamily Participation 
Review Committee pursuant to 24 CFR part 200, subpart H, to the extent 
that these regulations are not inconsistent and unless these regulations 
provide otherwise. They also apply in any other case where a hearing is 
required by statute or regulation, to the extent that rules adopted 
under such statute or regulation are not inconsistent.

                             Hearing Officer



Sec.  26.2  Hearing officer, powers, and duties.

    (a) Hearing officer. Proceedings conducted under these rules shall 
be presided over by a hearing officer who shall be an Administrative Law 
Judge or Office of Appeals Administrative Judge authorized by the 
Secretary or designee to conduct proceedings under this part.
    (b) Time and place of hearing. The hearing officer shall set the 
time and place of any hearing and shall give reasonable notice to the 
parties.
    (c) Powers of hearing officers. The hearing officer shall conduct a 
fair and impartial hearing and take all action necessary to avoid delay 
in the disposition of proceedings and to maintain order. The hearing 
officer shall have all powers necessary to those ends, including, but 
not limited to, the power:
    (1) To administer oaths and affirmations;
    (2) To cause subpoenas to be issued as authorized by law;
    (3) To rule upon offers of proof and receive evidence;
    (4) To order or limit discovery as the interests of justice may 
require;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold conferences for the settlement or simplification of the 
issues by consent of the parties;
    (7) To consider and rule upon all procedural and other motions 
appropriate in adjudicative proceedings;
    (8) To take notice of any material fact not appearing in evidence in 
the record that is properly a matter of judicial notice;
    (9) To make and file determinations; and
    (10) To exercise such other authority as is necessary to carry out 
the responsibilities of the hearing officer under subpart A of this 
part.



Sec.  26.3  Ex parte communications.

    (a) Definition. An ex parte communication is any communication with 
a hearing officer, direct or indirect, oral or written, concerning the 
merits or procedures of any pending proceeding that is made by a party 
in the absence of any other party.
    (b) Prohibition of ex parte communications. Ex parte communications 
are prohibited except where:
    (1) The purpose and content of the communication have been disclosed 
in advance or simultaneously to all parties; or
    (2) The communication is a request for information concerning the 
status of the case.
    (c) Procedure after receipt of ex parte communication. Any hearing 
officer who receives an ex parte communication that the hearing officer 
knows or has reason to believe is unauthorized shall promptly place the 
communication, or its substance, in all files and shall furnish copies 
to all parties. Unauthorized ex parte communications shall not be taken 
into consideration in deciding any matter in issue.



Sec.  26.4  Sanctions.

    (a) The hearing officer may sanction a person, including any party 
or representative, for failing to comply with an order, rule, or 
procedure governing the proceeding; failing to prosecute or defend an 
action; or engaging in other misconduct that interferes with the speedy, 
orderly, or fair conduct of the hearing.
    (b) Any sanction, including, but not limited to, those listed in 
paragraphs (c), (d), and (e) of this section, shall reasonably relate to 
the severity and nature of the failure or misconduct.
    (c) If a party refuses or fails to comply with an order of the 
hearing officer, including an order compelling discovery, the hearing 
officer may enter any appropriate order necessary to the disposition of 
the hearing including a

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determination against the noncomplying party, including but not limited 
to, the following:
    (1) Draw an inference in favor of the requesting party with regard 
to the information sought;
    (2) In the case of requests for admission, regard each matter about 
which an admission is requested to be admitted;
    (3) Prohibit the party failing to comply with the order from 
introducing evidence concerning, or otherwise relying upon, testimony 
relating to the information sought; or
    (4) Strike any part of the pleadings or other submissions of the 
party failing to comply with the order.
    (d) If a party fails to prosecute or defend an action brought under 
subpart A of this part, the hearing officer may dismiss the action or 
may issue an initial decision against the non-prosecuting or defending 
party.
    (e) The hearing officer may refuse to consider any motion, request, 
response, brief, or other document that is not filed in a timely 
fashion.



Sec.  26.5  Disqualification of hearing officer.

    (a) When a hearing officer believes there is a basis for 
disqualification in a particular proceeding, the hearing officer shall 
withdraw by notice on the record and shall notify the Secretary and the 
official initiating the action under appeal.
    (b) Whenever any party believes that the hearing officer should be 
disqualified from presiding in a particular proceeding, the party may 
file a motion with the hearing officer requesting the hearing officer to 
withdraw from presiding over the proceedings. This motion shall be 
supported by affidavits setting forth the alleged grounds for 
disqualification.
    (c) Upon the filing of a motion and affidavit, the hearing officer 
shall proceed no further in the case until the matter of 
disqualification is resolved.
    (d) If the hearing officer does not withdraw, a written statement of 
his or her reasons shall be incorporated in the record and the hearing 
shall proceed, unless the decision is appealed in accordance with the 
procedures set forth in Sec.  26.27.

                      Representation of the Parties



Sec.  26.6  Department representative.

    In each case heard before a hearing officer under this part, the 
Department shall be represented by attorneys from the Office of General 
Counsel.



Sec.  26.7  Respondent's representative.

    The party against whom the administrative action is taken may be 
represented at hearing, as follows:
    (a) Individuals may appear on their own behalf;
    (b) A member of a partnership or joint venture may appear on behalf 
of the partnership or joint venture;
    (c) A bona fide officer may appear on behalf of a corporation or 
association upon a showing of adequate authorization;
    (d) An attorney who files a notice of appearance with the hearing 
officer may represent any party. For purposes of this paragraph, an 
attorney is defined as a member of the bar of a federal court or of the 
highest court of any state or territory of the United States; or
    (e) An individual not included within paragraphs (a) through (d) of 
this section may represent the respondent upon an adequate showing, as 
determined by the hearing officer, that the individual possesses the 
legal, technical, or other qualifications necessary to advise and assist 
in the presentation of the case.



Sec.  26.8  Standards of practice.

    Attorneys shall conform to the standards of professional and ethical 
conduct required of practitioners in the courts of the United States and 
by the bars of which the attorneys are members. Any attorney may be 
prohibited by the hearing officer from representing a party if the 
attorney is not qualified under Sec.  26.7 or if such action is 
necessary to maintain order in or the integrity of the pending 
proceeding.

                          Pleadings and Motions



Sec.  26.9  Form and filing requirements.

    (a) Filing. Unless otherwise provided by statute, rule, or 
regulation:

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    (1) Requests for hearings shall be filed with the Office of General 
Counsel's Docket Clerk, Department of Housing and Urban Development, 451 
7th Street, SW., Washington, DC 20410. The OGC Docket Clerk shall assign 
the docket number and forward the case to HUD's Office of Appeals.
    (2) All other pleadings, submissions, and documents should be filed 
directly with the appropriate hearing officer.
    (3) Filing may be made by first class mail, delivery, facsimile 
transmission, or electronic means; however, the hearing officer may 
place reasonable limits on filing by facsimile or electronic means. 
Duplicate copies are not required unless so ordered by the hearing 
officer. A document is considered timely filed if postmarked on or 
before the date due or delivered to the appropriate person by the date 
due.
    (b) Title. Documents shall show clearly the title of the action and 
the docket number assigned by the Docket Clerk.
    (c) Form. To the fullest extent possible, all documents shall be 
printed or typewritten in clear, legible form.



Sec.  26.10  Service.

    (a) Method of Service. One copy of all pleadings, motions, and other 
documents required or permitted under these rules shall be served upon 
all parties by the person filing them and shall be accompanied by a 
certificate of service stating how and when such service has been made. 
Whenever these rules require or permit service to be made upon a party 
represented by an attorney, the service shall be made upon the attorney, 
unless service upon the party is ordered by the hearing officer. Service 
shall be made by delivery, by first class mail or overnight delivery to 
that person's last known address, by facsimile transmission, or by 
electronic means; however, the hearing officer may place reasonable 
limits on service by facsimile transmission or electronic means. 
Delivery of a copy within this rule means: handing it to the person to 
be served; or leaving it at that person's office with a clerk or other 
person in charge; or, if there is no one in charge, leaving it in a 
conspicuous place in the office; or, if the office is closed or the 
person to be served has no office, leaving it at that person's residence 
or usual place of abode with some person of suitable age and discretion 
who resides there. Service by mail, overnight delivery, facsimile 
transmission, or electronic means is complete upon deposit in a mail 
box, or upon posting, or upon electronic transmission.
    (b) Proof of Service. Proof of service shall not be required unless 
the fact of service is put in issue by appropriate motion or objection 
on the part of the person allegedly served. In these cases, service may 
be established by written receipt signed by or on behalf of the person 
to be served, or may be established prima facie by affidavit, 
certificate of service of mailing, or electronic receipt of sending.



Sec.  26.11  Time computation.

    (a) Generally. Computation of any period of time prescribed or 
allowed by this part shall begin with the first business day following 
the day on which the act, event, development, or default initiating the 
period of time occurred. When the last day of the period computed is a 
Saturday, Sunday, national holiday, or other day on which the Department 
of Housing and Urban Development is closed, the period shall run until 
the end of the next following business day. When any prescribed or 
allowed period of time is 7 days or less, each of the Saturdays, 
Sundays, and national holidays shall be excluded from the computation of 
the prescribed or allowed period.
    (b) Entry of orders. In computing any time period involving the date 
of the issuance of an order or decision by a hearing officer, the date 
of the issuance is the date the order or decision is served on the 
parties by the hearing officer or Docket Clerk.
    (c) Service by mail. If a document is served by mail, 3 days shall 
be added to the time permitted for a response.
    (d) Extensions of time periods. Except where mandated by statute, 
the hearing officer (or in the case of a review under Sec. Sec.  26.26 
and 26.27, the Secretary or designee) may upon motion enlarge the time 
within which any act required by these rules must be performed where 
necessary to avoid prejudicing the public interest or the rights of the 
parties.

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Sec.  26.12  Notice of administrative action.

    In every case, there shall be a notice of administrative action. The 
notice shall be in writing and inform the party of the nature of that 
administrative action. The notice shall state the reasons for the 
proposed or imposed action, except where general terms are permitted by 
2 CFR part 2424, and shall inform the party of any right to a hearing to 
challenge the administrative action, and the manner and time in which to 
request such hearing. A supplemental notice may be issued in the 
discretion of the initiating official to add to or modify the reasons 
for the action.



Sec.  26.13  Complaint.

    (a) Respondent. A complaint shall be served upon the party against 
whom an administrative action is taken, who shall be called the 
respondent.
    (b) Grounds. The complaint shall state the legal and factual grounds 
upon which the administrative action is based. The grounds set forth in 
the complaint may not contain allegations beyond the scope of the notice 
of administrative action or any amendment thereto.
    (c) Notice of administrative action as complaint. A notice of 
administrative action may serve as a complaint provided the notice 
states it is also a complaint and complies with paragraph (b) of this 
section.
    (d) Timing. When the notice does not serve as a complaint, the 
complaint shall be served on or before the 30th day after the referral 
to a hearing officer or a request for hearing is made, or within any 
other time period designated by the hearing officer.



Sec.  26.14  Answer.

    (a) Respondent shall file an answer within 30 days of receipt of the 
complaint, unless otherwise specified in this title or ordered by the 
hearing officer.
    (b) The answer shall:
    (1) Respond specifically to each factual allegation contained in the 
complaint;
    (2) Specifically plead any affirmative defense; and
    (3) Set forth any mitigating factors or extenuating circumstances.
    (c) A general denial shall not be permitted. Allegations are 
admitted when not specifically denied in respondent's answer.



Sec.  26.15  Amendments and supplemental pleadings.

    (a) Amendments. (1) By right: The Department may amend its complaint 
without leave at any time within 30 days of the date the complaint is 
filed or at any time before respondent's responsive pleading is filed, 
whichever is later. Respondent may amend its answer without leave at any 
time within 30 days of filing of its answer. A party shall plead in 
response to an amended pleading within 15 days of receipt of the amended 
pleading.
    (2) By leave: Upon conditions as are necessary to avoid prejudicing 
the public interest and the rights of the parties, the hearing officer 
may allow amendments to pleadings upon motion of any party.
    (3) Conformance to evidence: When issues not raised by the 
pleadings, but reasonably within the scope of the proceeding initiated 
by the complaint, are tried by express or implied consent to the 
parties, they shall be treated in all respects as if they had been 
raised in the pleadings, and amendments of the pleadings necessary to 
make them conform to the evidence shall be allowed at any time.
    (b) Supplemental pleadings. The hearing officer may, upon reasonable 
notice, permit service of a supplemental pleading concerning 
transactions, occurrences, or events that have happened or been 
discovered since the date of prior pleadings.



Sec.  26.16  Motions.

    (a) Motions. Requests for rulings or actions to be taken by the 
hearing officer should be made, wherever appropriate, in the form of a 
motion. All motions from the commencement of the action until the 
issuance of a decision shall be addressed to the hearing officer, and 
shall be served upon all parties to the proceeding.
    (b) Content. All written motions shall state the particular order, 
ruling, or action desired and the grounds for granting the motion. The 
parties may

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submit a proposed order with any motion.
    (c) Responses to motions. Within 10 days after receipt of any 
written motion, or within any other period as may be designated by the 
hearing officer, the opposing party shall respond to the motion and set 
forth any objections to the motion. Failure to file a timely response to 
the motion may constitute a party's consent to the granting of the 
motion. The moving party shall have no right to reply, except as 
permitted by the hearing officer.
    (d) Motions for extensions of time. Either party may file a motion 
for extension. At the discretion of the hearing officer, a motion for an 
extension of time may be granted for good cause at any time, 
notwithstanding an objection or any reply to the motion consistent with 
the provisions of Sec.  26.2(c)(5) and (7). The hearing officer may 
waive the requirements of this section as to motions for extensions of 
time.
    (e) Oral argument. The hearing officer may order oral argument on 
any motion.
    (f) Motions for summary judgment. (1) A party claiming relief or a 
party against whom relief is sought may timely move, with or without 
supporting affidavits, for summary judgment on all or part of the claim.
    (2) Objections in the consideration of summary judgment motions or 
answers thereto based upon a failure to strictly comply with the 
provisions of Rule 56 of the Federal Rules of Civil Procedure may, at 
the discretion of the hearing officer, be overruled.
    (g) Motions for dismissal. When a motion to dismiss the proceeding 
is granted, the hearing officer shall issue a determination and order in 
accordance with the provisions of Sec.  26.25.

                                Discovery



Sec.  26.17  Prehearing conference.

    (a) Prehearing conference. The hearing officer may, sua sponte or at 
the request of any party, direct counsel for all parties to confer with 
the hearing officer before the hearing for the purpose of considering:
    (1) Simplification and clarification of the issues;
    (2) Stipulations and admissions of fact and of the contents and 
authenticity of documents;
    (3) The disclosure of the names of witnesses;
    (4) Matters of which official notice will be taken;
    (5) Other matters as may aid in the orderly disposition of the 
proceeding, including disclosure of the documents or other physical 
exhibits that will be introduced into evidence in the course of the 
proceeding.
    (b) Recordation of prehearing conference. The prehearing conference 
shall, at the request of any party, be recorded or transcribed.
    (c) Order on prehearing conference. The hearing officer shall enter 
in the record an order that states the rulings upon matters considered 
during the conference, together with appropriate directions to the 
parties. The order shall control the subsequent course of the 
proceeding, subject to modifications upon good cause shown.



Sec.  26.18  Discovery.

    (a) General. The parties are encouraged to engage in voluntary 
discovery procedures, which may commence at any time after an answer has 
been filed. Parties may obtain discovery regarding any matter, not 
privileged, that is relevant to the claim or defense of any party, 
including the existence, description, nature, custody, condition, and 
location of any books, documents, or other tangible things and the 
identity and location of persons having knowledge of any discoverable 
matter. For good cause, the hearing officer may order discovery of any 
matter relevant to the subject matter involved in the action. To be 
relevant, information need not be admissible at the hearing, if the 
discovery appears reasonably calculated to lead to the discovery of 
admissible evidence. Each party shall bear its own expenses associated 
with discovery. Discovery may include:
    (1) Requests for production of documents as set forth in Sec.  
26.19;
    (2) Depositions as set forth in Sec.  26.20;
    (3) Written interrogatories as set forth in Sec.  26.21; and
    (4) Requests for admissions as set forth in Sec.  26.22.

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    (b) Supplementation of responses. A party who has responded to a 
request for discovery with a response is under a duty to timely amend a 
prior response to an interrogatory, request for production, or request 
for admission if so ordered by the hearing officer, or if the party 
learns that the response is in some material respect incomplete or 
incorrect and if the additional or corrective information has not 
otherwise been made known to the other parties during the discovery 
process or in writing.
    (c) Requesting an order. In connection with any discovery procedure, 
by motion addressed to the hearing officer and upon a showing of a good 
faith attempt to resolve the issue without the hearing officer's 
intervention, either party may:
    (1) Request an order compelling a response with respect to any 
objection to or other failure to respond to the discovery requested or 
any part thereof, or any failure to respond as specifically requested, 
or
    (2) Request a protective order limiting the scope, methods, time and 
place for discovery, and provisions for protecting privileged 
information or documents.
    (d) Limitations. (1) By order, the hearing officer may set or alter 
limits on the number of document requests, depositions, and 
interrogatories, or the length of depositions.
    (2) Orders compelling discovery shall be issued only where such 
discovery will not compel the disclosure of privileged information, 
unduly delay the hearing, or result in prejudice to the public interest 
or the rights of the parties, and upon a showing of good cause.
    (3) Protective orders may be issued by a hearing officer if the 
hearing officer determines such an order is necessary to protect a party 
or other person from annoyance, embarrassment, oppression, or undue 
burden or expense because:
    (i) The discovery sought is unreasonably cumulative or duplicative, 
or is obtainable from some other source that is more convenient, less 
burdensome, or less expensive;
    (ii) The party seeking discovery has had ample opportunity by 
discovery in the action to obtain the information sought; or
    (iii) The burden or expense of the proposed discovery outweighs its 
likely benefit, taking into account the needs of the case, the amount in 
controversy, the parties' resources, the importance of the issues at 
stake in the litigation, and the importance of the proposed discovery in 
resolving the issues.
    (4) A party need not provide discovery of electronically stored 
information from sources that the party identifies as not reasonably 
accessible because of undue burden or cost. On motion to compel 
discovery or for a protective order, the party from whom discovery is 
sought must show that the information is not reasonably accessible 
because of undue burden or cost. If that showing is made, the hearing 
officer may nonetheless order discovery from such sources if the 
requesting party shows good cause or, when the party's refusal to 
provide the information sought is solely due to undue expense, if the 
party seeking the discovery agrees to bear the expense associated with 
the request.
    (e) Refusal to honor discovery order. When a party refuses to honor 
a discovery order, the hearing officer may issue such orders in regard 
to the refusal as justice shall require.



Sec.  26.19  Request for production of documents.

    (a) Request to produce. Any party may serve upon any other party a 
written request to produce, and permit the party making the request, or 
someone acting on the requestor's behalf, to inspect, copy, test, or 
sample any designated documents--including writings, drawings, graphs, 
charts, photographs, sound recordings, images, and other data or data 
compilations stored in any medium from which information can be 
obtained--translated, if necessary, by the respondent into reasonably 
usable form, or to inspect, copy, test, or sample any designated 
tangible things that constitute or contain matters within the scope of 
Sec.  26.18(a) and which are in the possession, custody, or control of 
the party upon whom the request is served.
    (b) Procedure. The request shall set forth, either by individual 
item or by

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category, the items to be inspected, and describe each with reasonable 
particularity. The request shall specify a reasonable time, place, and 
manner of making the inspection and performing the related acts. The 
request may specify the form or forms in which electronically stored 
information is to be produced.
    (c) Response to request to produce. The party upon whom the request 
is served shall serve a written response within 20 days after service of 
the request. A shorter or longer time may be directed by the hearing 
officer, or in the absence of such an order, agreed to by the parties in 
a written document that shall be timely submitted to the hearing 
officer. The response shall state, with respect to each item or 
category, whether inspection and related activities will be permitted as 
requested. If there are any objections to any requests, including 
objections to the requested form or forms for producing electronically 
stored information, the response shall state the reasons for such 
objections. If objection is made to part of an item or category, the 
part shall be specified and inspection of the remaining parts shall be 
permitted. If objection is made to the requested format or forms for 
producing electronically stored information--or if no form was specified 
in the request--the responding party must state the form or forms it 
intends to use. The party submitting the request may move for an order 
under Sec.  26.18(c)(1) with respect to any objection to or other 
failure to respond to the request or any part thereof, or any failure to 
permit inspection as requested.
    (d) Form of production. Unless the parties otherwise agree, or the 
hearing officer otherwise orders:
    (1) A party who produces documents for inspection shall produce them 
as they are kept in the usual course of business or shall organize and 
label them to correspond with the categories in the request;
    (2) If a request does not specify the format or forms for producing 
electronically stored information, a responding party must produce the 
information in a form or forms in which it is ordinarily maintained or 
in a form or forms that are reasonably usable; and
    (3) A party need not produce the same electronically stored 
information in more than one form.



Sec.  26.20  Depositions.

    (a) Taking oral deposition. A party may take the oral deposition of 
any person. Reasonable written notice of deposition shall be served upon 
the opposing party and the deponent. The attendance of a deponent may be 
compelled by subpoena where authorized by law or by other order of the 
hearing officer.
    (b) Testifying on oral deposition. Each person testifying on oral 
deposition shall be placed under oath by the person before whom the 
deposition is taken. The deponent may be examined and cross-examined. 
The questions and the answers, together with all objections made, shall 
be recorded by the person before whom the deposition is to be taken, or 
under that person's direction.
    (c) Objections. Objection may be made to questions or answers for 
any reason that would require the exclusion of the testimony under Sec.  
26.24 as if the witness were present and testifying at hearing. 
Objections shall be in short form, stating every ground for objection. 
Failure to object to any question or answer shall be considered a waiver 
of objection, unless the parties agree otherwise. Rulings on any 
objections shall be made by the hearing officer at hearing, or at such 
other time requested by motion. The examination shall proceed, with the 
testimony being taken subject to the objections; the deponent may be 
instructed not to answer only when necessary to preserve a privilege, to 
enforce a limitation directed by the hearing officer, or to present a 
motion for a protective order under Sec.  26.18(c)(2).
    (d) Submission to deponent. A transcript of the deposition shall be 
submitted to the deponent for examination and signature, unless 
submission is waived by the deponent and the parties. Any changes in 
form or substance that the deponent desires to make shall be entered 
upon the transcript by the person before whom the deposition was taken, 
with a statement of reasons given by the deponent for making

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them. The transcript shall then be signed by the deponent, unless the 
parties by stipulation waive the signing or the deponent is ill, cannot 
be found, or refuses to sign. If the transcript is not signed, the 
person before whom the deposition was taken shall sign it and state on 
the record the reason that it is not signed.
    (e) Certification and filing. The person before whom the deposition 
was taken shall make a certification on the transcript as to its 
accuracy. Interested parties shall make their own arrangements with the 
person recording the testimony for copies of the testimony and the 
exhibits.
    (f) Deposition as evidence. Subject to appropriate rulings by the 
hearing officer on objections, the deposition or any part may be 
introduced into evidence for any purpose if the deponent is unavailable. 
Only that part of a deposition that is received in evidence at a hearing 
shall constitute a part of the record in the proceeding upon which a 
decision may be based. Nothing in this rule is intended to limit the use 
of a deposition for impeachment purposes.
    (g) Payment of fees. Fees shall be paid by the person upon whose 
application the deposition is taken.



Sec.  26.21  Written interrogatories.

    (a) Service of interrogatories. Any party may serve upon any other 
party written interrogatories, not to exceed 25 in number, including all 
discrete subparts, unless additional interrogatories are agreed to by 
the parties or leave to serve additional interrogatories is granted by 
the hearing officer.
    (b) Response to interrogatories. Within 20 days after service of the 
request, the party upon whom the interrogatories are served shall serve 
a written response, unless the parties agree in a written document 
submitted to the hearing officer or the hearing officer determines that 
a shorter or longer period is appropriate under the circumstances. The 
response shall specifically answer each interrogatory, separately and 
fully in writing, unless it is objected to, in which event the objecting 
party shall state the reasons for any objections with specificity. Any 
ground not stated in a timely objection is waived unless the party's 
failure to object is excused by the hearing officer for good cause 
shown. If objection is made to only part of an interrogatory, the 
objectionable part shall be specified and the party shall answer to the 
extent that the interrogatory is not objectionable.
    (c) Option to produce business records. Where the answer to an 
interrogatory may be derived or ascertained from the business records, 
including electronically stored information, of the party upon whom the 
interrogatory has been served or from an examination, audit, or 
inspection of such business records, including a compilation, abstract, 
or summary thereof, and the burden of deriving or ascertaining the 
answer is substantially the same for the party serving the interrogatory 
as for the party served, it is a sufficient answer to such interrogatory 
to specify the records from which the answer may be derived or 
ascertained and to afford to the party serving the interrogatory 
reasonable opportunity to examine, audit, or inspect such records and to 
make copies, compilations, abstracts, or summaries. A specification 
shall be in sufficient detail to permit the interrogating party to 
locate and to identify, as readily as can by the party served, the 
records from which the answer may be ascertained.



Sec.  26.22  Requests for admissions.

    (a) Any party may serve upon any other party a written request for 
the admission of the genuineness of any relevant documents described in 
the request or of the truth of any relevant matters of fact. Copies of 
documents shall be delivered with the request unless copies have already 
been furnished. Each requested admission shall be considered admitted, 
unless within 30 days after service of the request, or within such other 
time as the parties may agree, or the hearing officer determines, the 
party from whom the admission is sought serves upon the party making the 
request either:
    (1) A statement that:
    (i) Denies specifically the relevant matters for which an admission 
is requested, or sets forth in detail the reasons why the party can 
neither truthfully admit nor deny them;

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    (ii) Fairly meets the substance of the requested admission and, when 
good faith requires that a party qualify an answer or deny only a part 
of the matter of which an admission is requested, specifies as much of 
it as is true and qualifies or denies the remainder; and
    (iii) Does not assert lack of information or knowledge as a reason 
for failure to admit or deny, unless the party states that the party has 
made reasonable inquiry, and that the information known or readily 
obtainable by the party is insufficient to enable the party to admit or 
deny; or
    (2) Written objections to a requested admission that:
    (i) State the grounds for the objection; and
    (ii) Object to a requested admission, if necessary, either in whole 
or in part, on the basis of privilege or relevance.
    (b) Responses to the request for admission on matters to which 
objections have been made may be deferred until the objection is ruled 
upon, but if written objections are made only to a part of a request, a 
response to the remainder of the request shall be provided.
    (c) Any matter admitted under this rule is conclusively established 
unless the hearing officer, on motion, permits withdrawal or amendment 
of the admission. Admissions obtained pursuant to this procedure may be 
used in evidence only for the purposes of the pending action. The use of 
obtained admissions as evidence is permitted to the same extent and 
subject to the same objections as other evidence.

                                Hearings



Sec.  26.23  Public nature and timing of hearings; transcripts.

    (a) Public hearings. All hearings in adjudicative proceedings shall 
be public.
    (b) Conduct of hearing. Hearings shall proceed with all reasonable 
speed. The hearing officer may order recesses for good cause, stated on 
the record. The hearing officer may, for convenience of the parties or 
witnesses, or in the interests of justice, order that hearings be 
conducted outside of Washington, DC, and, if necessary, in more than one 
location.
    (c) Transcripts. Hearings shall be recorded and transcribed only by 
a reporter designated by the Department under the supervision of the 
hearing officer. The original transcript shall be a part of the record 
and shall constitute the sole official transcript. Any party or a member 
of the public, at his own expense, may obtain copies of transcripts from 
the reporter.



Sec.  26.24  Rules of evidence.

    (a) Evidence. Every party shall have the right to present its case 
or defense by oral and documentary evidence, unless otherwise limited by 
law or regulation, to conduct such cross-examination and to submit 
rebuttal evidence as may be required for a full and true disclosure of 
the facts. Irrelevant, immaterial, privileged, or unduly repetitious 
evidence shall be excluded. Unless otherwise provided for in this part, 
the Federal Rules of Evidence shall provide guidance to the hearing 
officer in the conduct of proceedings under this part, but shall not be 
binding. Parties may object to clearly irrelevant material, but 
technical and hearsay objections to testimony as used in a court of law 
will not be sustained.
    (b) Testimony under oath or affirmation. All witnesses shall testify 
under oath or affirmation.
    (c) Objections. Objections to the admission or exclusion of evidence 
shall be in short form, stating the grounds of objections. Rulings on 
objections shall be a part of the transcript. Failure to object to 
admission or exclusion of evidence or to any evidentiary ruling shall be 
considered a waiver of objection, but no exception to a ruling on an 
objection is necessary in order to preserve it for appeal.
    (d) Authenticity of documents. Unless specifically challenged, it 
shall be presumed that all relevant documents are authentic. An 
objection to the authenticity of a document shall not be sustained 
merely on the basis that it is not the original.
    (e) Stipulations. The parties may stipulate as to any relevant 
matters of fact. Stipulations may be received in evidence at a hearing, 
and when received shall be binding on the parties with respect to the 
matters stipulated. The parties are encouraged to enter into 
stipulations of fact whenever possible.

[[Page 249]]

    (f) Official notice. All matters officially noticed by the hearing 
officer shall appear on the record.
    (g) Burden of proof. The burden of proof shall be upon the proponent 
of an action or affirmative defense, including, where applicable, 
mitigating factors, unless otherwise provided by law or regulation.



Sec.  26.25  Hearing officer's determination and order.

    (a) Scope of review. The hearing officer shall conduct a de novo 
review of the administrative action to determine whether it is supported 
by a preponderance of the evidence, unless a different standard of proof 
is required by law or regulation. Each and every charge alleged by the 
Department need not be proven to support the administrative action. The 
hearing officer may modify or vacate the administrative action under 
review only upon a particularized finding of facts that justifies a 
deviation from the administrative action.
    (b) Closing of hearing. At the discretion of the hearing officer, 
the closing of the record may be postponed in order to permit the 
admission of other evidence into the record. In the event further 
evidence is admitted, each party shall be given an opportunity to 
respond to such evidence.
    (c) Briefs. Upon conclusion of the hearing, the hearing officer may 
request the parties to file proposed findings of fact and legal briefs. 
The hearing officer shall make a written determination and order based 
upon evidence and arguments presented by the parties. The determination 
shall be founded upon reliable and probative evidence. This 
determination and order shall be served upon all parties.
    (d) Bench decisions. Where the parties agree and where appropriate 
in the judgment of the hearing officer, a bench decision will be issued.
    (e) Time period for issuance of decision. The hearing officer shall 
endeavor to issue a determination within 60 days from the date of the 
closing of the record.
    (f) Finality of determination. The determination and order shall be 
final unless a party timely appeals the determination in accordance with 
Sec.  26.26. The determination shall inform the parties that, if 
provided for and consistent with Departmental regulations, any party may 
request, in writing, Secretarial review of the determination within 30 
days after the hearing officer issues the determination, in accordance 
with Sec.  26.26 of this part. The determination shall include the 
mailing address, facsimile number, and electronic submission information 
to which the request for Secretarial review should be sent. A request 
for Secretarial review may be made by mail, delivery, facsimile, or 
electronic submission.

                           Secretarial Review



Sec.  26.26  Review of determination of hearing officers.

    (a) Except in matters arising under 2 CFR part 2424, any party may 
file with the Secretary an appeal within 30 days after the date that the 
hearing officer issues a determination or order. The Secretary or 
designee may extend the 30-day period, in the Secretary's sole 
discretion, for good cause.
    (b) Brief in support of appeal. The appeal shall be accompanied by a 
written brief, not to exceed 15 pages, setting forth the party's 
specific objections to the determination or order of the hearing officer 
and the party's supporting reasons for any objections. The appealing 
party may request leave to file a brief in excess of 15 pages for good 
cause shown. Alternative proposed findings and conclusions, if any, may 
be appended as an exhibit.
    (c) Briefs in opposition. Any opposing party may submit a brief in 
opposition to the appeal, not to exceed 15 pages, within 20 days of 
receiving a copy of the appeal and accompanying brief. The opposing 
party may request leave to file a brief in excess of 15 pages for good 
cause shown. The brief in opposition shall specifically state the 
opposing party's reasons for supporting the hearing officer's 
determination, or for objecting to any part of the hearing officer's 
determination.
    (d) Service. The appeal and all briefs shall be served on all 
parties and on the Docket Clerk.
    (e) Forwarding of the record. Upon request by the Office of the 
Secretary, the hearing officer shall forward the

[[Page 250]]

record of the proceeding to the Secretary or the Secretary's designee.
    (f) Time extensions. The Secretary, or designee, in his or her sole 
discretion, may extend the deadlines or page limitations set forth in 
paragraphs (b) and (c) of this section. The Secretary or designee may 
also permit the filing of additional briefs, in his or her sole 
discretion.
    (g) Personal appearance. There is no right to appear personally 
before the Secretary or designee.
    (h) Interlocutory rulings. There is no right to appeal any 
interlocutory ruling by the hearing officer, except as provided for in 
Sec.  26.27.
    (i) Objection not raised before hearing officer. In reviewing the 
determination or order, the Secretary, or designee, shall not consider 
any objection that was not raised before the hearing officer unless a 
demonstration is made of extraordinary circumstances causing the failure 
to raise the objection.
    (j) Evidence in the record. The Secretary or designee shall consider 
only evidence contained in the record forwarded by the hearing officer. 
However, if any party demonstrates to the satisfaction of the Secretary 
or designee that additional evidence not presented at the hearing is 
material, and that there were reasonable grounds for the failure to 
present such evidence at the hearing, the Secretary or designee shall 
remand the matter to the hearing officer for reconsideration in light of 
the additional evidence.
    (k) Ex parte communications. The prohibitions of ex parte 
communications in Sec.  26.3 shall apply to contacts with the Secretary 
or the Secretary's designee.
    (l) Determination. The Secretary or designee may affirm, modify, 
reverse, remand, reduce, compromise, or settle any determination made or 
action ordered in the initial determination or order. The Secretary or 
designee shall consider, and include in any final determination, such 
factors as may be set forth in applicable statutes or regulations.
    (m) Written determination. Where a request for Secretarial review 
has been timely made, the Secretary, or designee, shall issue a written 
determination within 30 days after receipt of the request for review, 
and shall serve it upon the parties to the hearing and the hearing 
officer. The Secretary, or designee, may extend the time in which a 
written determination must be issued by an additional 60 days for good 
cause shown in a written justification issued to the parties. The 
written determination of the Secretary shall be final. If the Secretary, 
or designee, does not act upon the request for review of a determination 
within 90 days of service of the request, then the initial determination 
shall be the final agency action.



Sec.  26.27  Interlocutory rulings.

    (a) Interlocutory rulings by the hearing officer. A party seeking 
review of an interlocutory ruling shall file a motion with the hearing 
officer within 10 days of the ruling requesting certification of the 
ruling for review by the Secretary, or in cases arising under 2 CFR part 
2424, with the Debarring Official. Certification may be granted if the 
hearing officer believes that:
    (1) It involves an important issue of law or policy as to which 
there is substantial ground for difference of opinion; and
    (2) An immediate appeal from the order may materially advance the 
ultimate termination of the litigation.
    (b) Petition for review. Any party may file a petition for review of 
an interlocutory ruling within 10 days of the hearing officer's 
determination regarding certification.
    (c) Secretarial review. The Secretary, or designee, or Debarring 
Official shall review a certified ruling. The Secretary, designee, or 
Debarring Official has the discretion to grant or deny a petition for 
review from an uncertified ruling.
    (d) Continuation of hearing. Unless otherwise ordered by the hearing 
officer or the Secretary, designee, or Debarring Official, the hearing 
shall proceed pending the determination of any interlocutory appeal, and 
the order or ruling of the hearing officer shall be effective pending 
review.

[[Page 251]]



     Subpart B_Hearings Pursuant to the Administrative Procedure Act



Sec.  26.28  Purpose and scope.

    Unless otherwise specified in this title, the rules in this subpart 
B of this part apply to hearings that HUD is required by statute to 
conduct pursuant to the Administrative Procedure Act (5 U.S.C. 554 et 
seq.)



Sec.  26.29  Definitions.

    The following definitions apply to subpart B of this part:
    Complaint means the notice from HUD alleging violations of a HUD 
statute and/or regulation, citing the legal authority upon which it is 
issued, stating the relief HUD seeks, and informing a respondent of his 
or her right to submit a response to a designated office and to request 
an opportunity for a hearing before an Administrative Law Judge.
    Docket Clerk means the Docket Clerk of the Office of Administrative 
Law Judges, located at the following address--409 Third Street, SW., 
Second Floor, Washington, DC 20024; mailing address is 451 7th Street, 
SW., Room B-133, Washington, DC 20410.
    Respondent, unless otherwise identified by other governing statute, 
rule, or regulation, is the party against whom the administrative action 
is taken.
    Response means the written response to a complaint, admitting or 
denying the allegations in the complaint and setting forth any 
affirmative defense and any mitigating factors or extenuating 
circumstances. The response shall be submitted to the division of the 
Office of General Counsel that initiates the complaint or to such other 
office as may be designated in the complaint. A response is deemed a 
request for a hearing.



Sec.  26.30  Service and filing.

    (a) Filing. Unless otherwise provided by statute, rule, or 
regulation, all documents shall be filed with the Docket Clerk. Filing 
may be by delivery, first-class mail, overnight delivery, facsimile 
transmission, or electronic means; however, the ALJ may place reasonable 
limits on filing by facsimile transmission or electronic means. All 
documents shall clearly designate the docket number and title of the 
proceeding. Duplicate copies are not required unless ordered by the ALJ.
    (b) Service. One copy of all documents filed with the Docket Clerk 
shall be served upon each party by the persons filing them and shall be 
accompanied by a certificate of service stating how and when such 
service has been made. Service may be made by delivery, first-class 
mail, overnight delivery, facsimile transmission, or electronic means; 
however, the ALJ may place reasonable limits on service by facsimile 
transmission or electronic means. Documents shall be served upon a 
party's address of residence or principal place of business, or, if the 
party is represented by counsel, upon counsel of record at the address 
of counsel. Service is complete when handed to the person or delivered 
to the person's office or residence and deposited in a conspicuous 
place. If service is by first-class mail, overnight delivery, facsimile 
transmission, or electronic means, service is complete upon deposit in 
the mail or upon electronic transmission.



Sec.  26.31  Time computations.

    (a) General. In computing any period of time under subpart B of this 
part, the time period begins the day following the act, event, or 
default, and includes the last day of the period, unless the last day is 
a Saturday, Sunday, or legal holiday observed by the Federal Government, 
in which case the time period includes the next business day. When the 
prescribed time period is 7 days or less, intermediate Saturdays, 
Sundays, and legal holidays shall be excluded from the computation.
    (b) Entry of orders. In computing any time period involving the date 
of the issuance of an order or decision by an Administrative Law Judge, 
the date of issuance is the date the order or decision is served by the 
Docket Clerk.
    (c) Service by mail. If a document is served by mail, 3 days shall 
be added to the time permitted for a response.

[[Page 252]]

                        Administrative Law Judge



Sec.  26.32  Powers and duties of the Administrative Law Judge (ALJ).

    The ALJ shall conduct a fair and impartial hearing, avoid delay, 
maintain order, and ensure that a record of the proceeding is made. The 
ALJ is authorized to:
    (a) Set and change the date, time, and place of the hearing upon 
reasonable notice to the parties;
    (b) Continue or recess the hearing, in whole or in part, for a 
reasonable period of time;
    (c) Hold conferences to identify or simplify the issues, or to 
consider other matters that may aid in the expeditious disposition of 
the proceeding;
    (d) Administer oaths and affirmations;
    (e) Issue subpoenas requiring the attendance of witnesses and the 
production of documents at depositions or at hearings;
    (f) Rule on motions and other procedural matters;
    (g) Regulate the scope and timing of discovery;
    (h) Regulate the course of the hearing and the conduct of 
representatives and parties;
    (i) Examine witnesses;
    (j) Receive, rule on, exclude, or limit evidence;
    (k) Upon motion of a party, take official notice of facts;
    (l) Upon motion of a party, decide cases, in whole or in part, by 
summary judgment where there is no disputed issue of material fact;
    (m) Conduct any conference, argument, or hearing on motions in 
person or by telephone;
    (n) Upon motion, except where mandated by statute, extend the time 
within which any act required by these rules must be performed where 
necessary to avoid prejudicing the public interest or the rights of the 
parties, or upon showing of good cause; and
    (o) Exercise such other authority as is necessary to carry out the 
responsibilities of the ALJ under subpart B of this part.



Sec.  26.33  Ex parte communications.

    No party or person (except employees of the ALJ's office) shall 
communicate in any way with the ALJ on any matter at issue in a case, 
unless on notice and opportunity for all parties to participate. This 
provision does not prohibit a person or party from inquiring about the 
status of a case or asking routine questions concerning administrative 
functions or procedures.



Sec.  26.34  Sanctions.

    (a) The ALJ may sanction a person, including any party or 
representative, for failing to comply with an order, rule, or procedure 
governing the proceeding; failing to prosecute or defend an action; or 
engaging in other misconduct that interferes with the speedy, orderly, 
or fair conduct of the hearing.
    (b) Any sanction, including, but not limited to, those listed in 
paragraphs (c), (d), and (e) of this section, shall reasonably relate to 
the severity and nature of the failure or misconduct.
    (c) When a party fails to comply with an order, including an order 
compelling discovery, the ALJ may impose an appropriate sanction for 
such noncompliance, including, but not limited to, the following:
    (1) Drawing an inference in favor of the requesting party with 
regard to the information sought;
    (2) In the case of requests for admission, deeming any matter about 
which an admission is requested to be admitted;
    (3) Prohibiting the party failing to comply with the order from 
introducing evidence concerning, or otherwise relying upon, testimony 
relating to the information sought; or
    (4) Striking any part of the pleadings or other submissions of the 
party failing to comply with the order.
    (d) If a party fails to prosecute or defend an action brought under 
subpart B of this part, the ALJ may dismiss the action or may issue a 
decision against the non-prosecuting or defending party. Such decision 
of the ALJ shall constitute final agency action and shall not be 
appealable to the Secretary under Sec.  26.52 of this part.
    (e) The ALJ may refuse to consider any motion, request, response, 
brief, or other document that is not filed in a timely fashion.

[[Page 253]]



Sec.  26.35  Disqualification of ALJ.

    (a) An ALJ in a particular case may disqualify himself or herself.
    (b) A party may file with the ALJ a motion for the ALJ's 
disqualification. The motion shall be accompanied by an affidavit 
alleging the grounds for disqualification.
    (c) Upon the filing of a motion and affidavit, the ALJ shall proceed 
no further in the case until the matter of disqualification is resolved.
    (d) If the ALJ does not withdraw from the proceedings, a written 
statement of his or her reasons for electing not to withdraw shall be 
incorporated into the record and the hearing shall proceed.

                                 Parties



Sec.  26.36  Parties to the hearing.

    (a) General. The parties to the hearing shall be the respondent and 
HUD.
    (b) Rights of parties. Except as otherwise limited by subpart B of 
this part, all parties may:
    (1) Be accompanied, represented, and advised by a representative;
    (2) Participate in any conference held by the ALJ;
    (3) Conduct discovery;
    (4) Agree to stipulations of fact or law, which shall be made part 
of the record;
    (5) Present evidence relevant to the issues at the hearing;
    (6) Present and cross-examine witnesses;
    (7) Present oral arguments at the hearing as permitted by the ALJ; 
and
    (8) Submit written briefs and proposed findings of fact and 
conclusions of law after the hearing, as permitted by the ALJ.



Sec.  26.37  Separation of functions.

    No officer, employee, or agent of the Federal Government engaged in 
the performance of investigative, conciliatory, or prosecutorial 
functions in connection with the proceeding shall, in that proceeding or 
any factually related proceeding under subpart B of this part, 
participate or advise in the decision of the Administrative Law Judge, 
except as a witness or counsel during the proceeding, or in its 
appellate review.

                          Prehearing Procedures



Sec.  26.38  Commencement of action.

    Proceedings under subpart B of this part shall commence with the 
Government's filing of a complaint, as that term is defined in Sec.  
26.29, with the Docket Clerk. The respondent's response to the complaint 
shall be timely filed with the Docket Clerk and served upon the 
Government in accordance with the procedures set forth in the complaint. 
If the respondent fails to submit a response to the Docket Clerk, then 
the Government may file a motion for a default judgment in accordance 
with Sec.  26.41.



Sec.  26.39  Prehearing conferences.

    (a) The ALJ may schedule prehearing conferences as appropriate.
    (b) Upon the motion of any party or sua sponte, the ALJ may schedule 
a prehearing conference at a reasonable time in advance of the hearing.
    (c) The ALJ may consider the following at a prehearing conference:
    (1) Simplification of the issues;
    (2) Stipulations of fact and of the authenticity, accuracy, and 
admissibility of documents;
    (3) Submission of the case on briefs in lieu of an oral hearing;
    (4) Limitation of the number of witnesses;
    (5) The exchange of witness lists and of proposed exhibits;
    (6) Discovery;
    (7) The time and place for the hearing; and
    (8) Such other matters as may tend to expedite the fair and just 
disposition of the proceedings.



Sec.  26.40  Motions.

    (a) General. All motions shall state the specific relief requested 
and the basis therefore and, except during a conference or the hearing, 
shall be in writing. Written motions shall be filed and served in 
accordance with Sec.  26.30. Either party may submit a proposed order 
with any motion.
    (b) Response to motions. Unless otherwise ordered by the ALJ, a 
response to a written motion may be filed within 10 days after service 
of the motion. A party failing to respond timely to a motion may be 
deemed to have waived

[[Page 254]]

any objection to the granting of the motion.
    (c) Motions for extensions. Either party may file a motion for 
extension. At the discretion of the ALJ, a motion for an extension of 
time may be granted for good cause at any time, notwithstanding an 
objection or any reply to the motion, consistent with Sec.  26.32(f). 
The ALJ may waive the requirements of this section as to motions for 
extensions of time or any page limits.
    (d) Right to reply. The moving party shall have no right to reply, 
except as permitted by the ALJ.
    (e) Oral Argument. Either party may request oral argument on any 
motion, but such argument shall be available at the sole discretion of 
the ALJ.
    (f) Motions for summary judgment. (1) A party claiming relief or a 
party against whom relief is sought may timely move, with or without 
supporting affidavits, for summary judgment on all or part of the claim.
    (2) Objections in the consideration of summary judgment motions or 
answers thereto based upon a failure to strictly comply with the 
provisions of Rule 56 of the Federal Rules of Civil Procedure may, at 
the discretion of the ALJ, be overruled.
    (g) Motions for dismissal. When a motion to dismiss the proceeding 
is granted, the ALJ shall make and file a determination and order in 
accordance with the provisions of Sec.  26.50.



Sec.  26.41  Default.

    (a) General. The respondent may be found in default, upon motion, 
for failure to file a timely response to the Government's complaint. The 
motion shall include a copy of the complaint and a proposed default 
order, and shall be served upon all parties. The respondent shall have 
10 days from such service to respond to the motion.
    (b) Default order. The ALJ shall issue a decision on the motion 
within 15 days after the expiration of the time for filing a response to 
the default motion. If a default order is issued, it shall constitute 
the final agency action.
    (c) Effect of default. A default shall constitute an admission of 
all facts alleged in the Government's complaint and a waiver of 
respondent's right to a hearing on such allegations. The penalty 
proposed in the complaint shall be set forth in the default order and 
shall be immediately due and payable by respondent without further 
proceedings.

                                Discovery



Sec.  26.42  Discovery.

    (a) General. The parties are encouraged to engage in voluntary 
discovery procedures, which may commence at any time after an answer has 
been filed. Parties may obtain discovery regarding any matter, not 
privileged, that is relevant to the claim or defense of any party, 
including the existence, description, nature, custody, condition, and 
location of any books, documents, or other tangible things and the 
identity and location of persons having knowledge of any discoverable 
matter. For good cause, the ALJ may order discovery of any matter 
relevant to the subject matter of the action. To be relevant, 
information need not be admissible at the hearing, if the discovery 
appears reasonably calculated to lead to the discovery of admissible 
evidence. Each party shall bear its own expenses associated with 
discovery.
    (b) Discovery in Program Fraud Civil Remedies Actions. (1) Upon 
receipt of a complaint, the defendant may, upon written request to the 
Office of General Counsel, review any relevant and material 
nonprivileged documents, including any exculpatory documents, that 
relate to the allegations set out in the complaint. Exculpatory 
information that is contained in a privileged document must be 
disclosed; however, the privileged document need not be provided.
    (2) With the exception of the limited discovery permitted under 
paragraph (b)(1) of this section, unless agreed to by the parties, 
discovery shall be available only as ordered by the ALJ. The ALJ shall 
order only that discovery that he or she determines is necessary for the 
expeditious, fair, and reasonable consideration of the issues, is not 
unduly costly or burdensome, and will not unduly delay the proceeding. 
Discovery of privileged information shall not be permitted. The request 
for approval sent to the Attorney General from the General Counsel or 
designee, as described in 31 U.S.C. Sec.  3803(a)(2), is

[[Page 255]]

not discoverable under any circumstances. The ALJ may grant discovery 
subject to a protective order under Sec.  26.44.
    (c) Authorized discovery. The following types of discovery are 
authorized:
    (1) Requests for production of documents. (i) Any party may serve 
upon any other party a written request to produce and permit the party 
making the request, or someone acting on the requestor's behalf, to 
inspect, copy, test, or sample any designated documents or 
electronically stored information--including writings, drawings, graphs, 
charts, photographs, sound recordings, images, and other data or data 
compilations stored in any medium from which information can be 
obtained--translated, if necessary, by the respondent into reasonably 
usable form, or to inspect, copy, test, or sample any designated 
tangible things that constitute or contain matters within the scope of 
Sec.  26.42(a) and which are in the possession, custody, or control of 
the party upon whom the request is served.
    (ii) The request shall set forth, either by individual item or by 
category, the items to be inspected, and describe each with reasonable 
particularity. The request shall specify a reasonable time, place, and 
manner of making the inspection and performing the related acts. The 
request may specify the form or forms in which electronically stored 
information is to be produced.
    (iii) The party upon whom the request is served shall serve a 
written response within 20 days after the service of the request. A 
shorter or longer time may be directed by the ALJ or, in the absence of 
such an order, agreed to in a written document by the parties, which 
shall be submitted to the ALJ in a timely manner. The response shall 
state, with respect to each item or category, whether inspection and 
related activities will be permitted as requested. If there are any 
objections to any requests, including objections to the requested form 
or forms for producing electronically stored information, the response 
shall state the reasons for such objections. If objection is made to 
part of an item or category, the part shall be specified and inspection 
permitted of the remaining parts. If objection is made to the requested 
format for producing electronically stored information--or if no format 
was specified in the request--the responding party must state the format 
it intends to use. The party submitting the request may move for an 
order under paragraph (e) of this section with respect to any objection 
to or other failure to respond to the request or any part thereof, or 
any failure to permit inspection as requested.
    (iv) Unless the parties otherwise agree, or the ALJ otherwise 
orders:
    (A) A party who produces documents for inspection shall produce them 
as they are kept in the usual course of business or shall organize and 
label them to correspond with the categories in the request;
    (B) If a request does not specify the form or forms for producing 
electronically stored information, a responding party must produce the 
information in a format in which it is ordinarily maintained or in a 
format that is reasonably usable; and
    (C) A party need not produce the same electronically stored 
information in more than one form.
    (2) Requests for admissions. Any party may serve upon any other 
party a written request for the admission of the genuineness of any 
documents described in the request or of the truth of any relevant 
matters of fact. Copies of documents shall be delivered with the request 
unless copies have already been furnished. Each requested admission 
shall be considered admitted, unless, within 30 days after service of 
the request, or within such other time as the parties may agree to or 
the ALJ determines, the party from whom the admission is sought serves 
upon the party making the request either:
    (i) A statement, which:
    (A) Denies specifically the relevant matters for which an admission 
is requested, or sets forth in detail the reasons why the party can 
neither truthfully admit nor deny them;
    (B) Fairly meets the substance of the requested admission, and when 
good faith requires that a party qualify an answer or deny only a part 
of the matter of which an admission is requested, the party specifies as 
much of it as is

[[Page 256]]

true and qualifies or denies the remainder; and
    (C) Does not assert lack of information or knowledge as a reason for 
failure to admit or deny, unless the party states that the party has 
made reasonable inquiry, and that the information known or readily 
obtainable by the party is insufficient to enable the party to admit or 
deny; or
    (ii) Written objections to a requested admission, which state the 
grounds for the objection and which object to a requested admission, if 
necessary, either in whole or in part, on the basis of privilege or 
relevance. Responses to the request for admission on matters to which 
objections have been made may be deferred until each objection is ruled 
upon, but if written objections are made only to a part of a request, a 
response to the remainder of the request shall be provided.
    (iii) Any matter admitted under this rule is conclusively 
established unless the ALJ, on motion, permits withdrawal or amendment 
of the admission. Admissions obtained pursuant to this procedure may be 
used in evidence only for the purposes of the pending action. The use of 
obtained admissions as evidence is permitted to the same extent and 
subject to the same objections as other evidence.
    (3) Written interrogatories--(i) Service of written interrogatories. 
Any party may serve upon any other party written interrogatories, not 
exceeding 25 in number, including all discrete subparts, unless 
additional interrogatories are agreed to by the parties or leave to 
serve additional interrogatories is granted by the ALJ.
    (ii) Response to interrogatories. Within 20 days after service of 
the request, the party upon whom the interrogatories are served shall 
serve a written response, unless the parties agree in a written document 
submitted to the ALJ or the ALJ determines that a shorter or longer 
period is appropriate under the circumstances. The response shall 
specifically answer each interrogatory separately and fully in writing, 
unless it is objected to, in which event the objecting party shall state 
the reasons for objection with specificity. Any ground not stated in a 
timely objection is waived unless the party's failure to object is 
excused by the ALJ for good cause shown. If objection is made to only 
part of an interrogatory, the objectionable part shall be specified and 
the party shall answer to the extent the interrogatory is not 
objectionable.
    (iii) Option to produce business records. Where the answer to an 
interrogatory may be derived or ascertained from the business records, 
including electronically stored information, of the party upon whom the 
interrogatory has been served or from an examination, audit, or 
inspection of such business records, including a compilation, abstract, 
or summary thereof, and the burden of deriving or ascertaining the 
answer is substantially the same for the party serving the interrogatory 
as for the party served, it is a sufficient answer to such interrogatory 
to specify the records from which the answer may be derived or 
ascertained and to afford to the party serving the interrogatory 
reasonable opportunity to examine, audit, or inspect such records and to 
make copies, compilations, abstracts, or summaries. A specification 
shall be in sufficient detail to permit the interrogating party to 
locate and to identify, as readily as can the party served, the records 
from which the answer may be ascertained.
    (4) Depositions. (i) A party may take the oral deposition of any 
person. Reasonable written notice of deposition shall be served upon the 
opposing party and the deponent. The attendance of a deponent may be 
compelled by subpoena where authorized by law or other order by the ALJ.
    (ii) Each person testifying on oral deposition shall be placed under 
oath by the person before whom the deposition is taken. The deponent may 
be examined and cross-examined. The questions and the answers, together 
with all objections made, shall be recorded by the person before whom 
the deposition is to be taken or under that person's direction.
    (iii) Objections. Objection may be made to questions or answers for 
any reason that would require the exclusion of the testimony under Sec.  
26.47 as if the witness were present and testifying at hearing. 
Objections shall be in short form, stating every ground for objection. 
Failure to object to any question

[[Page 257]]

or answer shall be considered a waiver of objection, unless the parties 
agree otherwise. Rulings on any objections shall be made by the ALJ at 
hearing, or at such other time as is requested by motion. The 
examination shall proceed, with the testimony being taken subject to the 
objections; a person may instruct a deponent not to answer only when 
necessary to preserve a privilege, to enforce a limitation directed by 
the ALJ, or to present a motion under Sec.  26.44.
    (iv) Submission to deponent. A transcript of the deposition shall be 
submitted to the deponent for examination and signature, unless 
submission is waived by the deponent and the parties. Any changes in 
form or substance that the deponent desires to make shall be entered 
upon the transcript by the person before whom the deposition was taken, 
with a statement of reasons given by the deponent for making them. The 
transcript shall then be signed by the deponent, unless the parties by 
stipulation waive the signing or the deponent is ill, cannot be found, 
or refuses to sign. If the transcript is not signed, the person before 
whom the deposition was taken shall sign it and state on the record the 
reason that it is not signed by the deponent.
    (v) Certification and filing. The person before whom the deposition 
was taken shall make a certification on the transcript as to its 
accuracy. Interested parties shall make their own arrangements with the 
person recording the testimony for copies of the testimony and the 
exhibits.
    (vi) Deposition as evidence. Subject to appropriate rulings by the 
ALJ on objections, the deposition or any part may be introduced into 
evidence for any purpose if the deponent is unavailable. Only that part 
of a deposition that is received in evidence at hearing shall constitute 
a part of the record in the proceeding upon which a decision may be 
based. Nothing in this rule is intended to limit the use of a deposition 
for impeachment purposes.
    (vii) Payment of fees. Fees shall be paid by the person upon whose 
application the deposition is taken.
    (d) Supplementation of responses. A party who has responded to a 
request for discovery by providing a response is under a duty to timely 
amend any prior response to an interrogatory, request for production, or 
request for admission if so ordered by the ALJ, or if the party learns 
that the response is in some material respect incomplete or incorrect 
and if the additional or corrective information has not otherwise been 
made known to all other parties during the discovery process or in 
writing.
    (e) Motions to compel. (1) In connection with any discovery 
procedure, by motion addressed to the ALJ and upon a showing of a good 
faith attempt to resolve the issue without the ALJ's intervention, 
either party may file a motion to compel a response with respect to any 
objection or other failure to respond to the discovery requested or to 
any part thereof, or any failure to respond as specifically requested. 
An evasive or incomplete answer to a request for discovery is treated as 
a failure to answer.
    (2) The motion shall describe the information sought, cite the 
opposing party's objection, and provide arguments supporting the motion.
    (3) The opposing party may file a response to the motion, including 
a request for a protective order in accordance with Sec.  26.44.
    (4) Orders compelling discovery shall be issued only where such 
discovery will not compel the disclosure of privileged information, 
unduly delay the hearing, or result in prejudice to the public interest 
or the rights of the parties, and upon a showing of good cause.
    (5) A party need not provide discovery of electronically stored 
information from sources that the party identifies as not reasonably 
accessible because of undue burden or cost. On motion to compel 
discovery, the party from whom discovery is sought must show that the 
information is not reasonably accessible because of undue burden or 
cost. If that showing is made, the ALJ may nonetheless order discovery 
from such sources if the requesting party shows good cause or, when the 
party's refusal to provide the information sought is solely due to undue 
expense, the party seeking the discovery agrees to bear the expense 
associated with the request.

[[Page 258]]

    (f) Refusal to honor discovery order. When a party refuses to honor 
a discovery order, the ALJ may issue such orders in regard to the 
refusal as justice shall require, including the imposition of sanctions 
pursuant to Sec.  26.34.



Sec.  26.43  Subpoenas.

    (a) General. Upon written request of a party, the ALJ may issue a 
subpoena requiring the attendance of a witness at a deposition or 
hearing, and/or the production of documents. The request shall specify 
any documents to be produced and shall list the names and addresses of 
the witnesses.
    (b) Time of request. A request for a subpoena in aid of discovery 
shall be filed in time to permit the conclusion of discovery 15 days 
before the date fixed for the hearing. A request for a subpoena to 
testify at the hearing shall be filed at least 3 days prior to the 
hearing, unless otherwise allowed by the ALJ for good cause shown.
    (c) Content. The subpoena shall specify the time and place at which 
the witness is to appear and any documents the witness is to produce.
    (d) Service and fees. Subpoenas shall be served, and fees and costs 
paid to subpoenaed witnesses, in accordance with Rule 45(b)(1) of the 
Federal Rules of Civil Procedure.
    (e) Motion to quash. The individual to whom the subpoena is directed 
or a party may file a motion to quash the subpoena within 10 days after 
service, or on or before the time specified in the subpoena for 
compliance if it is less than 10 days after service.



Sec.  26.44  Protective orders.

    (a) A party, a prospective witness, or a deponent may file a motion 
for a protective order with respect to discovery sought by an opposing 
party or with respect to the hearing, seeking to limit the availability 
or disclosure of evidence.
    (b) Protective orders may be issued by an ALJ if the ALJ determines 
such an order is necessary to protect a party or other person from 
annoyance, embarrassment, oppression, or undue burden or expense 
because:
    (1) The discovery sought is unreasonably cumulative or duplicative, 
or is obtainable from some other source that is more convenient, less 
burdensome, or less expensive;
    (2) The party seeking discovery has had ample opportunity by 
discovery in the action to obtain the information sought; or
    (3) The burden or expense of the proposed discovery outweighs its 
likely benefit, taking into account the needs of the case, the amount in 
controversy, the parties' resources, the importance of the issues at 
stake in the litigation, and the importance of the proposed discovery in 
resolving the issues.

                                Hearings



Sec.  26.45  General.

    (a) Time of hearing. The hearing shall commence not later than 90 
days following the date of the Government's filing of the complaint and 
response with the Docket Clerk under Sec.  26.38, unless the time is 
extended for good cause. The ALJ shall provide written notice to all 
parties of the reasons for any extension of time.
    (b) Location of hearing. The hearing shall be held in a place most 
convenient for the respondent and witnesses, or in such other place as 
may be agreed upon by the parties and the ALJ.
    (c) Notice of hearing. The ALJ shall issue a notice of hearing to 
all parties specifying the time and location of the hearing, the matters 
of fact and law to be heard, the legal authority under which the hearing 
is to be held, a description of the procedures for the conduct of the 
hearing, and such other matters as the ALJ determines to be appropriate.
    (d) Exceptions for Program Fraud Civil Remedies Act matters. For 
Program Fraud Civil Remedies actions, the hearing is commenced by the 
issuance of a notice of hearing and order by the ALJ, as set forth in 31 
U.S.C. 3803(d)(2)(B). Hearings for Program Fraud Civil Remedies Act 
matters shall be located in accordance with 31 U.S.C. 3803(g)(4).
    (e) Burden and standard of proof. HUD shall prove the respondent's 
liability and any aggravating factors by a preponderance of the 
evidence. Respondent shall prove any affirmative defenses and any 
mitigating factors by a preponderance of the evidence.

[[Page 259]]

    (f) Public hearings. Unless otherwise ordered by the ALJ for good 
cause shown, the hearing shall be open to the public.



Sec.  26.46  Witnesses.

    (a) Except as provided in paragraph (b) of this section, testimony 
at the hearing shall be given orally by witnesses under oath or 
affirmation.
    (b) At the discretion of the ALJ, testimony may be admitted in the 
form of a written statement or deposition. In order to be admissible, 
any written statement must be provided to all other parties along with 
the last known address of the witness, in a manner that allows 
sufficient time for other parties to subpoena the witness for cross-
examination at the hearing.



Sec.  26.47  Evidence.

    The ALJ shall admit any relevant oral or documentary evidence that 
is not privileged. Unless otherwise provided for in this part, the 
Federal Rules of Evidence shall provide guidance to the ALJ's 
evidentiary ruling, but shall not be binding. Parties may object to 
clearly irrelevant material, but technical and hearsay objections to 
testimony as used in a court of law will not be sustained. The ALJ may, 
however, exclude evidence if its probative value is substantially 
outweighed by confusion of the issues, or by considerations of undue 
delay, waste of time, or needless presentation of cumulative evidence.



Sec.  26.48  Posthearing briefs.

    Posthearing briefs shall be filed only upon order by the ALJ.



Sec.  26.49  The record.

    The hearing will be recorded and transcribed by a reporter 
designated by the Department under the supervision of the ALJ. The 
parties and the public, at their own expense, may obtain copies of 
transcripts from the reporter. A copy of the transcript shall be made 
available at cost to the parties upon request. The transcript of 
testimony, exhibits, and other evidence admitted at the hearing and all 
papers and requests filed in the proceeding constitute the record for 
the decision by the ALJ and the Secretary or designee.



Sec.  26.50  Initial decision.

    (a) The ALJ shall issue an initial decision based only on the 
record, which shall contain findings of fact, conclusions of law, and 
the relief granted. The ALJ's initial decision shall not become 
effective unless it becomes or is incorporated into final agency action 
in accordance with Sec.  26.50(c) or Sec.  26.52(l).
    (b) The ALJ shall serve the initial decision on all parties within 
60 days after either the close of the record or the expiration of time 
permitted for submission of posthearing briefs, whichever is later. The 
ALJ may extend the 60-day period for serving the initial decision in 
writing for good cause. The initial decision shall inform the parties 
that, if provided for and consistent with Departmental regulations, any 
party may request, in writing, Secretarial review of the determination 
within 30 days after the ALJ issues the initial decision, in accordance 
with Sec.  26.52 of this part. The determination shall include the 
mailing address, facsimile number, and electronic submission information 
to which the request for Secretarial review should be sent. A request 
for Secretarial review may be made by mail, delivery, facsimile, or 
electronic submission.
    (c) If no appeal is timely filed with the Secretary or designee, the 
initial decision shall become the final agency action.



Sec.  26.51  Interlocutory rulings.

    (a) Interlocutory rulings by the ALJ. A party seeking review of an 
interlocutory ruling shall file a motion with the ALJ within 10 days of 
the ruling requesting certification of the ruling for review by the 
Secretary. Certification may be granted if the ALJ believes that:
    (1) It involves an important issue of law or policy as to which 
there is substantial ground for difference of opinion; and
    (2) An immediate appeal from the order may materially advance the 
ultimate termination of the litigation.
    (b) Petition for review. Any party may file a petition for review of 
an interlocutory ruling within 10 days of the ALJ's determination 
regarding certification.

[[Page 260]]

    (c) Secretarial review. The Secretary, or designee, shall review a 
certified ruling. The Secretary, or designee, has the discretion to 
grant or deny a petition for review from an uncertified ruling.
    (d) Continuation of hearing. Unless otherwise ordered by the ALJ or 
the Secretary, or designee, the hearing shall proceed pending the 
determination of any interlocutory appeal, and the order or ruling of 
the ALJ shall be effective pending review.



Sec.  26.52  Appeal to the Secretary.

    (a) General. Either party may file with the Secretary an appeal 
within 30 days after the date that the ALJ issues an initial decision. 
The Secretary or the Secretary's designee may extend the 30-day period 
in his or her sole discretion, for good cause.
    (b) Brief in support of appeal. The appeal shall be accompanied by a 
written brief, not to exceed 15 pages, specifically identifying the 
party's objections to the initial decision or order of the ALJ and the 
party's supporting reasons for any objections. The appealing party may 
request leave to file a brief in excess of 15 pages for good cause 
shown. Alternative proposed findings and conclusions, if any, may be 
appended as an exhibit.
    (c) Briefs in opposition. Any opposing party may submit a brief in 
opposition to the appeal, not to exceed 15 pages, within 20 days of the 
date a copy of the appeal and accompanying brief were received. The 
opposing party may request leave to file a brief in excess of 15 pages 
for good cause shown. The brief in opposition shall specifically state 
the opposing party's reasons for supporting the ALJ's determination or 
taking exceptions to any part of the ALJ's determination.
    (d) Extensions and additional briefs. The Secretary or Secretary's 
designee may extend the deadlines or page limitations set forth in 
paragraphs (b), (c), and (d) of this section, in his or her sole 
discretion. The Secretary may also permit the filing of additional 
briefs, in his or her sole discretion.
    (e) Forwarding of the record. Upon request by the Office of the 
Secretary, the ALJ shall forward the record of the proceeding to the 
Secretary or designee.
    (f) Personal appearance. There is no right to appear personally 
before the Secretary or designee.
    (g) ALJ decisions upon failure to prosecute or defend. There is no 
right to appeal any decision issued by an ALJ in accordance with Sec.  
26.37(d) of this part.
    (h) Objections not raised before ALJ. In reviewing the initial 
decision, the Secretary or designee shall not consider any objection 
that was not raised before the ALJ, unless a demonstration is made of 
extraordinary circumstances causing the failure to raise the objection.
    (i) Evidence considered. The Secretary or designee shall consider 
only evidence contained in the record forwarded by the ALJ. However, if 
any party demonstrates to the satisfaction of the Secretary or designee 
that additional evidence not presented at the hearing is material and 
that there were reasonable grounds for the failure to present such 
evidence at the hearing, the Secretary or designee shall remand the 
matter to the ALJ for reconsideration in light of the additional 
evidence.
    (j) Ex parte communications. The prohibitions of ex parte 
communications in Sec.  26.33 shall apply to contacts with the Secretary 
or designee.
    (k) Relief. The Secretary or designee may affirm, modify, reduce, 
reverse, compromise, remand, or settle any relief granted in the initial 
decision. The Secretary or designee shall consider, and include in any 
final determination, such factors as may be set forth in applicable 
statutes or regulations.
    (l) Decision--(1) Generally. Where a Secretarial appeal has been 
timely made, the Secretary, or designee, shall issue a written 
determination within 30 days after receipt of the brief in opposition, 
if any, and shall serve it upon the parties to the hearing. The 
Secretary, or designee, may extend the time in which a written 
determination must be issued by an additional 60 days for good cause 
shown in a written justification issued to the parties. The written 
decision of the Secretary shall be the final agency action. If the 
Secretary, or designee, does not act upon the appeal of an initial 
decision within 90 days of

[[Page 261]]

service of the appeal, then the initial determination shall be the final 
agency action.
    (2) Exception for cases brought under the Program Fraud Civil 
Remedies Act. Where a Secretarial appeal has been timely made in a case 
brought under the Program Fraud Civil Remedies Act, the Secretary, or 
designee, shall issue a written determination within 30 days after 
receipt of appeal and shall serve it upon the parties to the hearing. 
The written decision of the Secretary shall be the final agency action. 
If the Secretary, or designee, does not act upon the appeal of an 
initial decision within 30 days of service of the appeal, the initial 
decision shall become final and the Respondent will be served with a 
statement describing the right to seek judicial review, if any.



Sec.  26.53  Exhaustion of administrative remedies.

    In order to fulfill the requirement of exhausting administrative 
remedies, a party must seek Secretarial review under Sec.  26.52 prior 
to seeking judicial review of any initial decision issued under subpart 
B of this part.



Sec.  26.54  Judicial review.

    Judicial review shall be available in accordance with applicable 
statutory procedures and the procedures of the appropriate federal 
court.



Sec.  26.55  Collection of civil penalties and assessments.

    Collection of civil penalties and assessments shall be in accordance 
with applicable statutory provisions.



Sec.  26.56  Right to administrative offset.

    The amount of any penalty or assessment that has become final under 
Sec.  26.50 or Sec.  26.52, or for which a judgment has been entered 
after action under Sec.  26.54 or Sec.  26.55, or agreed upon in a 
compromise or settlement among the parties, may be collected by 
administrative offset under 31 U.S.C. 3716 or other applicable law. In 
Program Fraud Civil Remedies Act matters, an administrative offset may 
not be collected against a refund of an overpayment of federal taxes 
then or later owing by the United States to the Respondent.



PART 27_NONJUDICIAL FORECLOSURE OF MULTIFAMILY AND SINGLE FAMILY 
MORTGAGES--Table of Contents



       Subpart A_Nonjudicial Foreclosure of Multifamily Mortgages

Sec.
27.1 Purpose.
27.2 Scope and applicability.
27.3 Definitions.
27.5 Prerequisites to foreclosure.
27.10 Designation of a foreclosure commissioner.
27.15 Notice of default and foreclosure sale.
27.20 Conditions of foreclosure sale.
27.25 Termination or adjournment of foreclosure sale.
27.30 Conduct of the sale.
27.35 Foreclosure costs.
27.40 Disposition of sale proceeds.
27.45 Transfer of title and possession.
27.50 Management and disposition by the Secretary.

      Subpart B_Nonjudicial Foreclosure of Single Family Mortgages

27.100 Purpose, scope and applicability.
27.101 Definitions.
27.102 Designation of foreclosure commissioner and substitute 
          commissioner.
27.103 Notice of default and foreclosure sale.
27.105 Service of Notice of Default and Foreclosure Sale.
27.107 Presale reinstatement.
27.109 Conduct of sale.
27.111 Adjournment or cancellation of sale.
27.113 Foreclosure costs.
27.115 Disposition of sales proceeds.
27.117 Transfer of title and possession.
27.119 Redemption rights.
27.121 Record of foreclosure and sale.
27.123 Deficiency judgment.

    Authority: 12 U.S.C. 1715b, 3701-3717, 3751-3768; 42 U.S.C. 1452b, 
3535(d).

    Source: 61 FR 48548, Sept. 13, 1996, unless otherwise noted.



       Subpart A_Nonjudicial Foreclosure of Multifamily Mortgages



Sec.  27.1  Purpose.

    The purpose of this subpart is to implement requirements for the 
administration of the Multifamily Mortgage Foreclosure Act of 1981 (the 
Act) (12 U.S.C. 3701-3717), that clarify, or are in addition to, the 
requirements contained in the Act, which are not republished here and 
must be consulted in conjunction with the requirements of

[[Page 262]]

this subpart. The Act creates a uniform Federal remedy for foreclosure 
of multifamily mortgages. Under a delegation of authority published on 
February 5, 1982 (47 FR 5468), the Secretary has delegated to the HUD 
General Counsel his powers under the Act to appoint a foreclosure 
commissioner or commissioners and to substitute therefor, to fix the 
compensation of commissioners, and to promulgate implementing 
regulations.



Sec.  27.2  Scope and applicability.

    (a) Under the Act and this subpart, the Secretary may foreclose on 
any defaulted Secretary-held multifamily mortgage encumbering real 
estate in any State. The Secretary may use the provisions of these 
regulations to foreclose on any multifamily mortgage regardless of when 
the mortgage was executed.
    (b) The Secretary may, at the Secretary's option, use other 
procedures to foreclose defaulted multifamily mortgages, including 
judicial foreclosure in Federal court and nonjudicial foreclosure under 
State law. This subpart applies only to foreclosure procedures 
authorized by the Act and not to any other foreclosure procedures the 
Secretary may use.



Sec.  27.3  Definitions.

    The definitions contained in the Act (at 12 U.S.C. 3702) shall apply 
to this subpart, in addition to and as further clarified by the 
following definitions. As used in this subpart:
    General Counsel means the General Counsel of the Department of 
Housing and Urban Development;
    Multifamily mortgage does not include a mortgage covering a property 
on which there is located a one- to four-family residence, except when 
the one- to four-family residence is subject to a mortgage pursuant to 
section 202 of the Housing Act of 1959 (12 U.S.C. 1701q), or section 811 
(42 U.S.C. 8013) of the National Affordable Housing Act. The definition 
of multifamily mortgage also includes a mortgage taken by the Secretary 
in connection with the previous sale of the project by the Secretary 
(purchase money mortgage).



Sec.  27.5  Prerequisites to foreclosure.

    Before commencement of a foreclosure under the Act and this subpart, 
HUD will provide to the mortgagor an opportunity informally to present 
reasons why the mortgage should not be foreclosed. Such opportunity may 
be provided before or after the designation of the foreclosure 
commissioner but before service of the notice of default and 
foreclosure.



Sec.  27.10  Designation of a foreclosure commissioner.

    (a) When the Secretary determines that a multifamily mortgage should 
be foreclosed under the Act and this subpart, the General Counsel will 
select and designate one or more foreclosure commissioners to conduct 
the foreclosure and sale. The method of selection and determination of 
the qualifications of the foreclosure commissioner shall be at the 
discretion of the General Counsel, and the execution of a designation 
pursuant to paragraph (b) of this section shall be conclusive evidence 
that the commissioner selected has been determined to be qualified by 
the General Counsel.
    (b) After selection of a foreclosure commissioner, the General 
Counsel shall designate the commissioner in writing to conduct the 
foreclosure and sale of the particular multifamily mortgage. The written 
designation shall be duly acknowledged and shall state the name and 
business or residential address of the commissioner and any other 
information the General Counsel deems necessary. The designation shall 
be effective upon execution by the General Counsel or his designate. 
Upon receipt of the designation, the commissioner shall demonstrate 
acceptance by signing the designation and returning a signed copy to the 
General Counsel.
    (c) The General Counsel may at any time, with or without cause, 
designate a substitute commissioner to replace a previously designated 
commissioner. Designation of a substitute commissioner shall be in 
writing and shall contain the same information and be made effective in 
the same manner as the designation of the original commissioner. Upon 
designation of a substitute commissioner, the substitute

[[Page 263]]

commissioner shall serve a copy of the written notice of designation 
upon the persons listed at sections 369(1) (A) through (C) of the Act 
(12 U.S.C. 3708(1) (A) through (C)) either by mail, in accordance with 
section 369(1) of the Act (12 U.S.C. 3708(1)), except that the time 
limitations in that section will not apply, or by any other manner which 
in the substitute commissioner's discretion is conducive to giving 
timely notice of substitution.



Sec.  27.15  Notice of default and foreclosure sale.

    (a) Within 45 days after accepting his or her designation to act as 
commissioner, the commissioner shall commence the foreclosure by serving 
a Notice of Default and Foreclosure Sale.
    (b) The Notice of Default and Foreclosure Sale shall contain the 
following information:
    (1) The Notice shall state that all deposits and the balance of the 
purchase price shall be paid by certified or cashier's check. The Notice 
shall state that no deposit will be required of the Secretary when the 
Secretary bids at the foreclosure sale.
    (2) Any terms and conditions to which the purchaser at the 
foreclosure sale must agree under Sec.  27.20. The Notice need not 
describe at length each and every pertinent term and condition, 
including any required use agreements and deed covenants, if it 
describes these terms and conditions in a general way and if it states 
that the precise terms will be available from the commissioner upon 
request.
    (c) The Notice need not be mailed to mortgagors who have been 
released from all obligations under the mortgage.
    (d) In deciding which newspaper or newspapers to select as general 
circulation newspapers for purposes of publication of the required 
notice, the commissioner need not select the newspaper with the largest 
circulation.
    (e) In addition to Notice posting requirements included in the Act, 
the Notice shall also be posted in the project office and in such other 
appropriate conspicuous places as the commissioner deems appropriate for 
providing notice to all tenants. Posting shall not be required if the 
commissioner in his or her discretion finds that the act of posting is 
likely to lead to a breach of the peace or may result in the increased 
risk of vandalism or damage to the property. Any such finding will be 
made in writing. Entry on the premises by the commissioner for the 
purpose of posting shall be privileged as against all other persons.
    (f) When service of the Notice of Default and Foreclosure Sale is 
made by mail, the commissioner shall at the same time and in the same 
manner serve a copy of the instrument by which the General Counsel, 
under Sec.  27.10(b), has designated him or her to act as commissioner.
    (g) At least 7 days before the foreclosure sale, the commissioner 
will record both the instrument designating him or her to act as 
commissioner and the Notice of Default and Foreclosure Sale in the same 
office or offices in which the mortgage was recorded.



Sec.  27.20  Conditions of foreclosure sale.

    (a) The requirements of section 367(b)(2)(A) of the Act (12 U.S.C. 
3706(b)(2)(A)) apply if a majority of the residential units in a 
property subject to foreclosure sale pursuant to the Act and this 
subpart are occupied by residential tenants either on the date of the 
foreclosure sale or on the date on which the General Counsel designates 
the foreclosure commissioner.
    (b) Terms which the Secretary may find appropriate to require 
pursuant to section 367(b) of the Act (12 U.S.C. 3706(b)), and such 
other provisions of law as may be applicable, may include provisions 
relating to use and ownership of the project property, tenant admission 
standards and procedures, rent schedules and increases, and project 
operation and maintenance. In determining terms which may be appropriate 
to require, the Secretary shall consider:
    (1) The history of the project, including the purposes of the 
program under which the mortgage insurance or assistance was provided, 
and any other program of HUD under which the project was developed or 
otherwise assisted and the probable causes of project failure resulting 
in its default;

[[Page 264]]

    (2) A financial analysis of the project, including an appraisal of 
the fair market value of the property for its highest and best use;
    (3) A physical analysis of the project, including the condition of 
the structure and grounds, the need for rehabilitation or repairs, and 
the estimated costs of any such rehabilitation or repairs;
    (4) The income levels of the occupants of the project;
    (5) Characteristics, including rental levels, of comparable housing 
in the area, with particular reference to whether current conditions and 
discernible trends in the area fairly indicate a likelihood that, for 
the foreseeable future after foreclosure and sale, the project will 
continue to provide rental or cooperative housing and market rentals 
obtainable in the project will be affordable by low- or moderate-income 
persons;
    (6) The availability of or need for rental housing for low- and 
moderate-income persons in the area, including actions being taken or 
projected to be taken to address such needs and the impact of such 
actions on the project;
    (7) An assessment of the number of occupants who might be displaced 
as a result of the manner of disposition;
    (8) The eligibility of the occupants of the property for rental 
assistance under any program administered by HUD and the availability of 
funding for such assistance if necessary in order that the units 
occupied by such occupants will remain available to and affordable by 
such persons, or if necessary in order to assure the financial 
feasibility of the project after foreclosure and sale subject to the 
terms to be required by the Secretary; and
    (9) Such other factors relating to the project as the Secretary 
shall consider appropriate.
    (c) Terms which the Secretary may require to be agreed to by the 
purchaser pursuant to section 367(b) of the Act (12 U.S.C. 3706(b)) 
shall generally not be more restrictive, or binding for a longer 
duration, than the terms by which the mortgagor was bound prior to the 
foreclosure. For example: If the mortgage being foreclosed was held by 
the Secretary under section 312 of the Housing Act of 1964 (42 U.S.C. 
1452b), any terms required by the Secretary pursuant to this section 
shall be in effect no longer than five years after the completion of the 
rehabilitation work funded by the section 312 loan. No terms shall be 
required pursuant to this section if the foreclosure sale occurs more 
than five years after the completion of such rehabilitation work 
(signified by the due date for commencement of amortization payments in 
the section 312 loan note).
    (d) The limitation contained in paragraph (c) of this section 
applies only to such terms as the Secretary may require the purchaser to 
agree to, as a condition and term of the sale, under paragraph (a) of 
this section. Nothing contained in paragraph (c) of this section shall 
prevent the Secretary and the purchaser from entering into a subsidy 
agreement under any program administered by the Secretary containing 
terms binding upon either party which are longer in duration than would 
be permitted to be required by paragraph (c) of this section.
    (e) Any terms required by the Secretary to be agreed to by the 
purchaser as a condition and term of sale under this section and section 
367(b) of the Act (12 U.S.C. 3706(b)) shall be embodied in a use 
agreement to be executed by the Secretary and the purchaser. Such terms 
also may be included, or referred to, in appropriate covenants contained 
in the deed to be delivered by the foreclosure commissioner under Sec.  
27.45. Terms required by the Secretary pursuant to this section shall be 
stated or described in the Notice of Default and Foreclosure Sale under 
Sec.  27.15.
    (f) The defaulting mortgagor, or any principal, successor, 
affiliate, or assignee thereof, on the multifamily mortgage being 
foreclosed, shall not be eligible to bid on, or otherwise acquire, the 
property being foreclosed by the Department under this subpart or any 
other provision of law. A ``principal'' and an ``affiliate'' are defined 
as provided at 24 CFR 24.105.

[61 FR 48548, Sept. 13, 1996, as amended at 66 FR 35847, July 9, 2001]

[[Page 265]]



Sec.  27.25  Termination or adjournment of foreclosure sale.

    (a) Before withdrawing the security property from foreclosure under 
section 369A(a) of the Act (12 U.S.C. 3709(a)), the commissioner shall 
notify the Secretary of the proposed withdrawal by telephone or telegram 
and shall provide the Secretary with a written statement of the reasons 
for the proposed withdrawal along with all documents submitted by the 
mortgagor in support of the proposed withdrawal. Upon receipt of this 
statement, the Secretary shall have 10 days within which to demonstrate 
orally or in writing why the security property should not be withdrawn 
from foreclosure. The Secretary shall provide the mortgagor with a copy 
of any statement prepared by the Secretary in opposition to the proposed 
withdrawal at the same time the statement is submitted to the 
commissioner. If the Secretary receives the commissioner's written 
statement less than 10 days before the scheduled foreclosure sale, the 
sale shall automatically be postponed for 14 days. Under these 
circumstances, notice of the rescheduled sale shall be served as 
described in section 369B(c) of the Act (12 U.S.C. 3710(c)).
    (b) The commissioner may not withdraw the security property from 
foreclosure under section 369A(a) of the Act (12 U.S.C. 3709(a)) more 
than once unless the Secretary consents in writing to such withdrawal.
    (c) The commissioner shall, in the case of a sale adjourned to a 
later date, mail a copy of the revised Notice of Default and Foreclosure 
Sale to the Secretary at least seven days before the date to which the 
sale has been adjourned.
    (d) If upon application by the mortgagor, the commissioner refuses 
to withdraw the property from foreclosure under section 369A(a) of the 
Act (12 U.S.C. 3709(a)), the commissioner shall provide the mortgagor 
and the Secretary with a written statement of the reasons for the 
refusal.



Sec.  27.30  Conduct of the sale.

    (a) The commissioner shall accept written one-price sealed bids from 
any party including the Secretary so long as those bids conform to the 
requirements described in the Notice of Default and Foreclosure Sale. 
The commissioner shall announce the name of each such bidder and the 
amount of the bid. The commissioner shall accept oral bids from any 
party, including parties who submitted one-price sealed bids, if those 
oral bids conform to the requirements described in the Notice of Default 
and Foreclosure Sale. The commissioner will announce the amount of the 
high bid and the name of the successful bidder before the close of the 
sale.
    (b) Relatives of the commissioner who may not bid at the foreclosure 
sale include parents, siblings, spouses and children. Related business 
entities which may not bid include entities or concerns whose 
relationship with the commissioner at the time the commissioner is 
designated is such that, directly or indirectly, one concern or 
individual formulates, directs, or controls the other concern; or has 
the power to formulate, direct, or control the other concern; or has the 
responsibility and authority either to prevent in the first instance, or 
promptly to correct, the offensive conduct of the other concern. 
Business concerns are also affiliates of each other when a third party 
is similarly situated with respect to both concerns.
    (c) If the commissioner employs an auctioneer to conduct the 
foreclosure sale, the auctioneer must be a licensed auctioneer, an 
officer of State or local government, or any other person who commonly 
conducts foreclosure sales in the area in which the security property is 
located.



Sec.  27.35  Foreclosure costs.

    Pursuant to section 369C(5) of the Act (12 U.S.C. 3711(5)), a 
commission to the foreclosure commissioner for the conduct of the 
foreclosure will be paid in an amount to be determined by the General 
Counsel. A commission may be allowed to the commissioner notwithstanding 
termination of the sale or appointment of a substitute commissioner 
before the sale takes place.



Sec.  27.40  Disposition of sale proceeds.

    (a) The priority of the Secretary's lien shall be determined by the 
Federal first-in-time first-in-right rule. State

[[Page 266]]

laws affording priority to liens recorded after the mortgage are 
preempted.
    (b) If there is more than one party holding a lien or assessment 
payable from sales proceeds, the claim of each party holding the same 
kind of lien or assessment will be given the relative priority to which 
it would be entitled under the law of the State in which the security 
property is located.
    (c) The commissioner will keep such records as will permit the 
Secretary to verify the costs claimed under section 369C of the Act (12 
U.S.C. 3711), and otherwise to audit the commissioner's disposition of 
the sale proceeds.



Sec.  27.45  Transfer of title and possession.

    (a) If the Secretary is the successful bidder, the foreclosure 
commissioner shall issue a deed to the Secretary upon receipt of the 
amount needed to pay the costs listed in sections 369D (1) through (3) 
of the Act (12 U.S.C. 3712(1) through (3)). If the Secretary is not the 
successful bidder, the foreclosure commissioner shall issue a deed to 
the purchaser upon receipt of the entire purchase price and execution by 
the Secretary and the purchaser of any use agreement referred to in 
Sec.  27.20(e). Any covenants reflecting terms required by Sec.  27.20 
shall be contained in the commissioner's deed.
    (b) Subject to any terms required to be agreed to by Sec.  27.20, 
any commercial tenant and any residential tenant remaining in possession 
after the expiration of his or her lease or after the passage of one 
year, whichever event occurs first, shall be deemed a tenant at 
sufferance and may be evicted in accordance with applicable State or 
local law.



Sec.  27.50  Management and disposition by the Secretary.

    When the Secretary is the purchaser of the security property, the 
Secretary shall manage and dispose of it in accordance with section 203 
of the Housing and Community Development Amendments of 1978, as amended, 
12 U.S.C. 1701z-11, and in accordance with 24 CFR part 290.



      Subpart B_Nonjudicial Foreclosure of Single Family Mortgages



Sec.  27.100  Purpose, scope and applicability.

    (a) Purpose. The purpose of this subpart is to implement 
requirements for the administration of the Single Family Mortgage 
Foreclosure Act of 1994 (the Statute), 12 U.S.C. 3751-3768, that 
clarify, or are in addition to, the requirements contained in the 
Statute, which are not republished here and must be consulted in 
conjunction with the requirements of this subpart.
    (b) Scope. The Secretary may foreclose on any defaulted single 
family mortgage described in the Statute regardless of when the mortgage 
was executed.
    (c) Applicability. The Secretary may, at the Secretary's option, use 
other procedures to foreclose defaulted single family mortgages, 
including judicial foreclosure in State or Federal Court, and 
nonjudicial foreclosures under State law or any other Federal law. This 
subpart applies only to foreclosure procedures authorized by the Statute 
and not to any other foreclosure procedures the Secretary may use.



Sec.  27.101  Definitions.

    The definitions contained in the Statute (at 12 U.S.C. 3752) shall 
apply to this subpart, in addition to and as further clarified by the 
following definitions. As used in this subpart:
    County means a political subdivision of a State or Territory of the 
United States, created to aid in the administration of State law for the 
purpose of local self government, and includes a parish or any other 
equivalent subdivision.
    Mortgage is as defined in the Statute except that the reference to 
property as ``(real, personal or mixed)'' means ``any property (real or 
mixed real and personal).''
    Mortgage agreement is as defined in the Statute, and also means any 
other similar instrument or instruments creating the security interest 
in the real estate for the repayment of the note or debt instrument.

[[Page 267]]

    Mortgagor is as defined in the Statute, except that the reference to 
``trustee'' means ``trustor.''
    Record; Recorded means to enter or entered in public land record 
systems established under State statutes for the purpose of imparting 
constructive notice to purchasers of real property for value and without 
knowledge, and includes ``register'' and ``registered'' in the instance 
of registered land, and ``file'' and its variants in the context of 
entering documents in public land records.
    Secretary means the Secretary of Housing and Urban Development, 
acting by and through any authorized designee exclusive of the 
foreclosure commissioner.
    Security Property is as defined in the statute except that the 
reference to property as ``(real, personal or mixed)'' means ``any 
property (real or mixed real and personal).''



Sec.  27.102  Designation of foreclosure commissioner and substitute 
commissioner.

    (a) The Secretary may designate foreclosure commissioners, including 
substitute commissioners, as set forth in the Statute.
    (b) The method of selection and determination of the qualifications 
of the foreclosure commissioner shall be at the discretion of the 
Secretary. The execution of a designation pursuant to this section shall 
be conclusive evidence that the commissioner selected has been 
determined to be qualified by the Secretary. The designation is 
effective upon execution.



Sec.  27.103  Notice of default and foreclosure sale.

    (a) The foreclosure commissioner shall commence the foreclosure 
under the procedures set forth in the Statute.
    (b) The Notice of Default and Foreclosure Sale (Notice) shall 
include, in addition to the provisions as required by the Statute:
    (1) The foreclosure commissioner's telephone number;
    (2) A description of the security property sufficient to identify 
the property to be sold;
    (3) The date the mortgage was recorded;
    (4) Identification of the failure to make payment, including the 
entire amount delinquent as of a date specified, a statement generally 
describing the other costs that must be paid if the mortgage is to be 
reinstated, the due date of the earliest principal installment payment 
remaining wholly unpaid as of the date on which the notice is issued 
upon which the foreclosure is based, or a description of any other 
default or defaults upon which foreclosure is based, and the 
acceleration of the secured indebtedness; and
    (5) The bidding and payment requirements for the foreclosure sale, 
including the time and method of payment of the balance of the 
foreclosure purchase price, that all deposits and the balance of the 
purchase price shall be paid by certified or cashier's check, and that 
no deposit will be required of the Secretary when the Secretary bids at 
the foreclosure sale.



Sec.  27.105  Service of Notice of Default and Foreclosure Sale.

    (a) The Notice of Default and Foreclosure Sale shall be served in 
accordance with the provisions of the Statute. When notice is sent by 
mail, multiple mailings are not required to be sent to any party with 
multiple capacities, e.g., an original mortgagor who is the security 
property owner and lives in one of the units. The date of the receipt 
for the postage paid for the mailing may serve as proof of the date of 
mailing of the notice.
    (b) Notice need not be mailed to any mortgagors who have been 
released from all obligations under the mortgage.



Sec.  27.107  Presale reinstatement.

    (a) The foreclosure commissioner shall withdraw the security 
property from foreclosure and cancel the foreclosure sale only in 
accordance with the provisions of the Statute and as more fully provided 
in paragraphs (b) and (c) of this section in regard to presale 
reinstatements.
    (b) To obtain a presale reinstatement in cases involving a monetary 
default, there must be tendered to the foreclosure commissioner before 
public auction is completed all amounts

[[Page 268]]

which would be due under the mortgage agreement if payments under the 
mortgage had not been accelerated and all costs of foreclosure incurred 
for which payment from the proceeds of foreclosure is provided in the 
Statute, and the foreclosure commissioner must find that there are no 
nonmonetary defaults; provided, however, that the Secretary may refuse 
to cancel a foreclosure sale pursuant to this subparagraph if the 
current mortgagor or owner of record has, on one or more previous 
occasions, caused a foreclosure of the mortgage, commenced pursuant to 
the Statute and this subpart or otherwise, to be canceled by curing a 
default.
    (c) To obtain a presale reinstatement in cases involving a 
nonmonetary default:
    (1) The foreclosure commissioner, upon application of the mortgagor 
before the date of foreclosure sale, must find that all nonmonetary 
defaults are cured and that there are no monetary defaults; and
    (2) There must be tendered to the foreclosure commissioner before 
public auction is completed all amounts due under the mortgage agreement 
(excluding all amounts which would be due under the mortgage agreement 
if the mortgage payments had been accelerated), including all amounts of 
expenditures secured by the mortgage and all costs of foreclosure 
incurred for which payment would be made from the proceeds of 
foreclosure as provided in the Statute.
    (d) Before withdrawing the security property from foreclosure, the 
foreclosure commissioner shall notify the Secretary of the proposed 
withdrawal by telephone or other telecommunication device and shall also 
provide the Secretary with a written statement of the reasons for the 
proposed withdrawal along with all documents submitted by the mortgagor 
in support of the proposed withdrawal. Upon receipt of this statement, 
the Secretary shall have ten (10) days in which to demonstrate why the 
security property should not be withdrawn from foreclosure, and if the 
Secretary makes this demonstration, the property shall not be withdrawn 
from foreclosure. The Secretary shall provide the mortgagor with a copy 
of any statement prepared by the Secretary in opposition to the proposed 
withdrawal at the same time the statement is submitted to the 
foreclosure commissioner. If the Secretary receives the foreclosure 
commissioner's written statement less than 10 days before the scheduled 
foreclosure sale, the sale shall automatically be adjourned for 14 days, 
during which time it may be cancelled. Notice of the re-scheduled sale, 
if any, shall be served as described in Sec.  27.111.



Sec.  27.109  Conduct of sale.

    (a) The foreclosure sale shall be conducted in a manner and at a 
time and place as identified in the Notice of Default and Foreclosure 
Sale and in accordance with the provisions of the Statute.
    (b) In addition to bids made in person at the sale, the foreclosure 
commissioner shall accept written one-price sealed bids from any party, 
including the Secretary, for entry by announcement at the sale so long 
as those bids conform to the requirements described in the Notice of 
Default and Foreclosure Sale. The foreclosure commissioner shall 
announce the name of each such bidder and the amount of the bid. The 
commissioner shall accept oral bids from any party, including parties 
who submitted one-price sealed bids, if those oral bids conform to the 
requirements in the Notice of Default and Foreclosure Sale. Before the 
close of the sale the commissioner shall announce the amount of the high 
bid and the name of the successful bidder. If the successful bidder 
fails to comply with the terms of the sale, the HUD Field Office 
representative will provide instructions to the commissioner about 
offering the property to the second highest bidder, or having a new 
sale, or other instruction at the discretion of the HUD representative.
    (c) Prohibited participants. Relatives of the foreclosure 
commissioner who may not bid include parents, siblings, spouses and 
children. A related business entity that may not bid or whose employees 
may not bid is one whose relationship (at the time the foreclosure 
commissioner is designated and during

[[Page 269]]

the term of service as foreclosure commissioner) with the entity of the 
foreclosure commissioner is such that, directly or indirectly, one 
entity formulates, directs, or controls the other entity; or has the 
power to formulate, direct, or control the other entity; or has the 
responsibility and authority to prevent, or promptly to correct, the 
offensive conduct of the other entity.
    (d) Auctioneers. If the commissioner employs an auctioneer to 
conduct the foreclosure sale, the auctioneer must be a licensed 
auctioneer, an officer of State or local government, or any other person 
who commonly conducts foreclosure sales in the area in which the 
security property is located.



Sec.  27.111  Adjournment or cancellation of sale.

    (a) The foreclosure commissioner may, before or at the time of the 
foreclosure sale, adjourn or cancel the foreclosure sale in accordance 
with the provisions of the Statute. The publication of the Notice of 
Default and Foreclosure Sale, revised pursuant to the Statute, may be 
made on any of three separate days before the revised date of 
foreclosure sale. If there is no newspaper of general circulation that 
would permit publication on any of three separate days before the 
revised date of foreclosure sale, the Notice of Default and Foreclosure 
Sale must be posted, not less than nine days before the date to which 
the sale has been adjourned, at the courthouse of any county or counties 
in which the property is located, and at the place where the sale is to 
be held. The commissioner must also, in the case of a sale adjourned to 
a later date, mail a copy of the revised Notice of Default and 
Foreclosure Sale to the Secretary at least seven days before the date to 
which the sale has been adjourned.
    (b) When a substitute commissioner is designated by the Secretary to 
replace a previously designated foreclosure commissioner, the sale shall 
continue without prejudice unless the substitute commissioner finds, in 
that commissioner's sole discretion, that continuation of the 
foreclosure sale will unfairly affect the interests of the mortgagor. 
Any such finding shall be in writing. If the substitute commissioner 
makes such a finding, the substitute commissioner shall cancel or 
adjourn the sale.



Sec.  27.113  Foreclosure costs.

    A commission may be allowed to the foreclosure commissioner 
notwithstanding termination of the sale or appointment of a substitute 
commissioner before the sale takes place.



Sec.  27.115  Disposition of sales proceeds.

    The foreclosure commissioner will keep such records as will permit 
the Secretary to verify the costs claimed, and otherwise to enable the 
Secretary to audit the foreclosure commissioner's disposition of the 
sale proceeds.



Sec.  27.117  Transfer of title and possession.

    (a) If the Secretary is the successful bidder, the foreclosure 
commissioner shall issue a deed to the Secretary upon receipt of the 
amount needed to pay the costs of tax liens and prior liens, as set 
forth in 12 U.S.C. 3762(a)(2) and (a)(3). If the Secretary is not the 
successful bidder, the foreclosure commissioner shall issue a deed to 
the purchaser or purchasers upon receipt of the entire purchase price in 
accordance with the terms of the sale as provided in the Notice of 
Default and Foreclosure Sale.
    (b) The register of deeds or other appropriate official in the 
county where the property is located shall, upon tendering of the 
customary recording fees, accept all instruments pertaining to the 
foreclosure which are submitted by the foreclosure commissioner for 
recordation. The instruments to be accepted shall include, but not be 
limited to, the foreclosure commissioner's deed. If the foreclosure 
commissioner elects to include the recitations required under the 
Statute (12 U.S.C. 3764) in an affidavit or an addendum to the deed, the 
affidavit or addendum shall be accepted along with the deed for 
recordation. The Clerk of the Court or other appropriate official shall 
cancel all liens as requested by the foreclosure commissioner.

[[Page 270]]



Sec.  27.119  Redemption rights.

    Only for purposes of redemption rights under the Statute, a 
foreclosure shall be considered completed upon the date and at the time 
of the foreclosure sale.



Sec.  27.121  Record of foreclosure and sale.

    The statements regarding the foreclosed mortgage required to 
establish a sufficient record shall include the date the mortgage was 
recorded. The statements regarding the service of the Notice of Default 
and Foreclosure Sale shall include the names and addresses of the 
persons to whom the Notice was mailed and the date on which the Notice 
was mailed, the name of the newspaper in which the Notice was published 
and the dates of publication, and the date on which service by posting, 
if required, was accomplished.



Sec.  27.123  Deficiency judgment.

    If the price at which the security property is sold at the 
foreclosure sale is less than the unpaid balance of the debt secured by 
such property after disposition of sale proceeds in accordance with the 
order of priority provided under the Statute, the Secretary may refer 
the matter to the Attorney General who may commence an action or actions 
against any and all debtors to recover the deficiency, unless such an 
action is specifically prohibited by the mortgage.



PART 28_IMPLEMENTATION OF THE PROGRAM FRAUD CIVIL REMEDIES ACT OF 1986
--Table of Contents



Sec.
28.1 Purpose.
28.5 Definitions.
28.10 Basis for civil penalties and assessments.
28.15 Investigation.
28.20 Request for approval by the Department of Justice.
28.25 Complaint.
28.30 Response.
28.35 Statute of limitations.
28.40 Hearings.
28.45 Settlements.

    Authority: 28 U.S.C. 2461 note; 31 U.S.C. 3801-3812; 42 U.S.C. 
3535(d).

    Source: 61 FR 50213, Sept. 24, 1996, unless otherwise noted.



Sec.  28.1  Purpose.

    This part:
    (a) Establishes administrative procedures for imposing civil 
penalties and assessments against persons who make, submit, or present, 
or cause to be made, submitted, or presented, false, fictitious, or 
fraudulent claims or written statements to Federal authorities or to 
their agents; and
    (b) Specifies the hearing and appeal rights of persons subject to 
allegations of liability for such penalties and assessments. Hearings 
under this part shall be conducted in accordance with the Administrative 
Procedure Act pursuant to part 26, subpart B, of this chapter.

[61 FR 50213, Sept. 24, 1996, as amended at 73 FR 76831, Dec. 17, 2008]



Sec.  28.5  Definitions.

    (a) The terms ALJ and HUD are defined in 24 CFR part 5.
    (b) The terms Claim, Knows or has reason to know, Person, Reviewing 
Official, and Statement have the same meanings as defined in 31 U.S.C. 
3801.
    (c) Ability to pay is determined based on an assessment of the 
respondent's resources available both presently and prospectively from 
which the Department could ultimately recover the total award, which may 
be predicted based on historical evidence.
    (d) Benefit means anything of value, including, but not limited to, 
any advantage, preference, privilege, license, permit, favorable 
decision, ruling, status, or loan insurance or guarantee.
    (e) Respondent means any person alleged to be liable for a civil 
penalty or assessment under Sec.  28.25.
    (f) The reasonable prospect of collecting an appropriate amount of 
penalties and assessments is determined based on a generalized 
assessment made by a Reviewing Official based on the limited information 
available in the Report of Investigation for purposes of determining 
whether the allocation of HUD's resources to any particular action is 
appropriate. This assessment is not the same as the assessment made when 
determining ability to pay, nor is the reasonable prospect of collecting 
a

[[Page 271]]

factor to be considered in determining the amount of any penalty or 
assessment in any particular case.
    (g) Report of Investigation means a report containing the findings 
and conclusions of a Program Fraud Civil Remedies Act investigation by 
the Inspector General or his or her designee, as described in Sec.  
28.15.

[73 FR 76831, Dec. 17, 2008]



Sec.  28.10  Basis for civil penalties and assessments.

    (a) Claims. (1) A civil penalty of not more than $10,781 may be 
imposed upon any person who makes, presents, or submits, or causes to be 
made, presented, or submitted, a claim that the person knows or has 
reason to know:
    (i) Is false, fictitious, or fraudulent;
    (ii) Includes or is supported by a written statement which asserts a 
material fact which is false, fictitious, or fraudulent;
    (iii) Includes or is supported by any written statement that:
    (A) Omits a material fact;
    (B) Is false, fictitious, or fraudulent as a result of the omission; 
and
    (C) Is a statement in which the person making, presenting, or 
submitting such statement has a duty to include such material fact; or
    (iv) Is for payment for the provision of property or services which 
the person has not provided as claimed.
    (2) Each voucher, invoice, claim form, or other individual request 
or demand for property, services, or money constitutes a separate claim.
    (3) A claim shall be considered made to HUD, to a recipient, or to a 
party when the claim actually is made to an agent, fiscal intermediary, 
or other entity, including any State or political subdivision of a 
State, acting for or on behalf of HUD, the recipient, or the party.
    (4) Each claim for property, services, or money is subject to a 
civil penalty without regard to whether the property, services, or money 
actually is delivered or paid.
    (5) Liability under this part shall not lie if the amount of money 
or value of property or services claimed exceeds $150,000 as to each 
claim that a person submits. For purposes of paragraph (a) of this 
section, a group of claims submitted simultaneously as part of a single 
transaction shall be considered a single claim.
    (6) If the Government has made any payment, transferred property, or 
provided services on a claim, then the Government may assess a person 
found liable up to twice the amount of the claim or portion of the claim 
that is determined to be in violation of paragraph (a)(1) of this 
section.
    (b) Statements. (1) A civil penalty of not more than $10,781 may be 
imposed upon any person who makes, presents, or submits, or causes to be 
made, presented, or submitted, a written statement that:
    (i) The person knows or has reason to know:
    (A) Asserts a material fact which is false, fictitious, or 
fraudulent; or
    (B)(1) Omits a material fact; and
    (2) Is false, fictitious, or fraudulent as a result of such 
omission;
    (ii) In the case of a statement described in (b)(1)(A)(ii) of this 
section, is a statement in which the person making, presenting, or 
submitting such statement has a duty to include such material fact; and
    (iii) Contains or is accompanied by an express certification or 
affirmation of the truthfulness and accuracy of the contents of the 
statement.
    (2) Each written representation, certification, or affirmation 
constitutes a separate statement.
    (3) A statement shall be considered made to HUD when the statement 
is actually made to an agent, fiscal intermediary, or other entity, 
including any State or political subdivision of a State, acting for or 
on behalf of HUD.
    (c) Limit on liability. If the claim or statement relates to low-
income housing benefits or housing benefits for the elderly or 
handicapped, then a person may be held liable only if he or she has made 
or caused to be made the claim or statement in the course of applying 
for such benefits, with respect to his or her eligibility, or family's 
eligibility, to receive such benefits. For purposes of paragraph (c) of 
this section, ``housing benefits'' means any instance wherein funds 
administered by the Secretary directly or indirectly permit low-income 
families or elderly or handicapped persons to reside in housing

[[Page 272]]

that otherwise would not be available to them.
    (d) Specific intent. No proof of specific intent to defraud is 
required to establish liability under this section.
    (e) Joint and several liability. A civil penalty or assessment may 
be imposed jointly and severally if more than one person is determined 
to be liable.

[61 FR 50213, Sept. 24, 1996, as amended at 68 FR 12787, Mar. 17, 2003; 
72 FR 5588, Feb. 6, 2007; 73 FR 76831, Dec. 17, 2008; 78 FR 4059, Jan. 
18, 2013; 81 FR 38935, June 15, 2016]



Sec.  28.15  Investigation.

    (a) General. HUD may initiate a Program Fraud Civil Remedies Act (31 
U.S.C. 3801) case against a respondent only upon an investigation by the 
Inspector General or his or her designee.
    (b) Subpoena. Pursuant to 31 U.S.C. 3804(a), the Inspector General 
or designee may require by subpoena the production of records and other 
documents. The subpoena shall state the authority under which it is 
issued, identify the records sought, and name the person designated to 
receive the records. The recipient of the subpoena shall provide a 
certification that the documents sought have been produced, that the 
documents are not available and the reasons they are not available, or 
that the documents, suitably identified, have been withheld based upon 
the assertion of an identified privilege.
    (c) Investigation report. If the Inspector General or designee 
concludes that an action under the Program Fraud Civil Remedies Act may 
be warranted, her or she shall submit a report containing the findings 
and conclusions of the investigation to the General Counsel or his or 
her designee.
    (d) The Inspector General may refer allegations directly to the 
Department of Justice for suit under the False Claims Act (31 U.S.C. 
3730) or for other civil relief, or may postpone submitting a report to 
the General Counsel to avoid interference with a criminal investigation 
or prosecution. The Inspector General shall report violations of 
criminal law to the Attorney General.



Sec.  28.20  Request for approval by the Department of Justice.

    (a) If the General Counsel or designee determines that the Report of 
Investigation supports an action under this part, he or she must submit 
a written request to the Department of Justice for approval to issue a 
complaint under Sec.  28.25.
    (b) The request shall include a description of the claims or 
statements at issue; the evidence supporting the allegations; an 
estimate of the amount of money or the value of property, services, or 
other benefits requested or demanded in violation of Sec.  28.10; any 
exculpatory or mitigating circumstances that may relate to the claims or 
statements; and a statement that there is a reasonable prospect of 
collecting an appropriate amount of penalties and assessments.

[73 FR 76831, Dec. 17, 2008]



Sec.  28.25  Complaint.

    (a) General. Upon obtaining approval from the Department of Justice, 
the General Counsel or designee may issue a complaint to the respondent. 
The complaint shall be mailed, by registered or certified mail, or shall 
be delivered through such other means by which delivery may be 
confirmed. The complaint shall also be filed simultaneously with the 
Office of Administrative Law Judges in accordance with Sec.  26.30(a) of 
this chapter.
    (b) Complaint. The complaint shall include:
    (1) The allegations of liability against the respondent, including 
the statutory basis for liability, the claims or statements at issue, 
and the reasons why liability arises from those claims or statements;
    (2) A statement that the required approval to issue the complaint 
was received from the Department of Justice as required by 24 CFR 28.20;
    (3) The amount of penalties and assessments for which the respondent 
may be held liable;
    (4) A statement that the respondent may request a hearing by 
submitting a written response to the complaint;
    (5) The addresses to which a response must be sent in accordance 
with Sec.  26.38 of this title; and
    (6) A statement that failure to submit an answer within 30 days of 
receipt of the complaint may result in the imposition of the maximum 
amount of

[[Page 273]]

penalties and assessments sought without right of appeal.
    (c) Parts 26 and 28. A copy of this part 28 and part 26, subpart B 
of this chapter, shall be included with the complaint.
    (d) Obligation to preserve documents. Upon receipt of the complaint, 
the respondent is required to preserve and maintain all documents and 
data, including electronically stored data, within their possession or 
control that may relate to the allegations in the complaint. The 
Department shall also preserve such documents or data upon the issuance 
of the complaint.

[73 FR 76832, Dec. 17, 2008]



Sec.  28.30  Response.

    (a) The respondent may file a written response to the complaint, in 
accordance with Sec.  26.30 of this title, within 30 days of service of 
the complaint. The response shall be deemed to be a request for a 
hearing. The response must include the admission or denial of each 
allegation of liability made in the complaint; any defense on which the 
respondent intends to rely; any reasons why the penalties and 
assessments should be less than the amount set forth in the complaint; 
and the name, address, and telephone number of the person who will act 
as the respondent's representative, if any.
    (b) Failure to respond. If no response is submitted, HUD may file a 
motion for default judgment in accordance with Sec.  26.41 of this 
chapter.

[73 FR 76832, Dec. 17, 2008]



Sec.  28.35  Statute of limitations.

    The statute of limitations for commencing hearings under this part 
shall be tolled:
    (a) If the hearing is commenced in accordance with 31 U.S.C. 
3803(d)(2)(B) within 6 years after the date on which the claim or 
statement is made; or
    (b) If the parties agree to such tolling.

[73 FR 76832, Dec. 17, 2008]



Sec.  28.40  Hearings.

    (a) General. Hearings under this part shall be conducted in 
accordance with the procedures in part 26, subpart B, of this chapter, 
governing actions in accordance with the Administrative Procedure Act.
    (b) Factors to consider in determining amount of penalties and 
assessments. In determining an appropriate amount of civil penalties and 
assessments, the ALJ and, upon appeal, the Secretary or designee, shall 
consider and state in his or her opinion any mitigating or aggravating 
circumstances. Because of the intangible costs of fraud, the expense of 
investigating fraudulent conduct, and the need for deterrence, 
ordinarily twice the amount of the claim as alleged by the government, 
and a significant civil penalty, should be imposed. The amount of 
penalties and assessments imposed shall be based on the ALJ's and the 
Secretary's or designee's consideration of evidence in support of one or 
more of the following factors:
    (1) The number of false, fictitious, or fraudulent claims or 
statements;
    (2) The time period over which such claims or statements were made;
    (3) The degree of the respondent's culpability with respect to the 
misconduct;
    (4) The amount of money or the value of the property, services, or 
benefit falsely claimed;
    (5) The value of the Government's actual loss as a result of the 
misconduct, including foreseeable consequential damages and the cost of 
investigation;
    (6) The relationship of the civil penalties to the amount of the 
Government's loss;
    (7) The potential or actual impact of the misconduct upon national 
defense, public health or safety, or public confidence in the management 
of Government programs and operations, including particularly the impact 
on the intended beneficiaries of such programs;
    (8) Whether the respondent has engaged in a pattern of the same or 
similar misconduct;
    (9) Whether the respondent attempted to conceal the misconduct;
    (10) The degree to which the respondent has involved others in the 
misconduct or in concealing it;
    (11) If the misconduct of employees or agents is imputed to the 
respondent, the extent to which the respondent's practices fostered or 
attempted to preclude the misconduct;

[[Page 274]]

    (12) Whether the respondent cooperated in or obstructed an 
investigation of the misconduct;
    (13) Whether the respondent assisted in identifying and prosecuting 
other wrongdoers;
    (14) The complexity of the program or transaction, and the degree of 
the respondent's sophistication with respect to it, including the extent 
of the respondent's prior participation in the program or in similar 
transactions;
    (15) Whether the respondent has been found, in any criminal, civil, 
or administrative proceeding, to have engaged in similar misconduct or 
to have dealt dishonestly with the Government of the United States or of 
a State, directly or indirectly;
    (16) The need to deter the respondent and others from engaging in 
the same or similar misconduct; and
    (17) The respondent's ability to pay, and
    (18) Any other factors that in any given case may mitigate or 
aggravate the seriousness of the false claim or statement.
    (c) Stays ordered by the Department of Justice. If at any time the 
Attorney General of the United States or an Assistant Attorney General 
designated by the Attorney General notifies the Secretary in writing 
that continuation of HUD's case may adversely affect any pending or 
potential criminal or civil action related to the claim or statement at 
issue, the ALJ or the Secretary shall stay the process immediately. The 
case may be resumed only upon receipt of the written authorization of 
the Attorney General.

[61 FR 50213, Sept. 24, 1996, as amended at 73 FR 76832, Dec. 17, 2008]



Sec.  28.45  Settlements.

    (a) HUD and the respondent may enter into a settlement agreement at 
any time prior to the issuing of a notice of final determination under 
Sec.  26.50 of this title.
    (b) Failure of the respondent to comply with a settlement agreement 
shall be sufficient cause for resuming an action under this part, or for 
any other judicial or administrative action.



PART 30_CIVIL MONEY PENALTIES: CERTAIN PROHIBITED CONDUCT
--Table of Contents



                            Subpart A_General

Sec.
30.1 Purpose and scope.
30.5 Effective dates.
30.10 Definitions.
30.15 Application of other remedies.

                          Subpart B_Violations

30.20 Ethical violations by HUD employees.
30.25 Violations by applicants for assistance.
30.35 Mortgagees and lenders.
30.36 Dealers or sponsored third-party originators.
30.40 Loan guarantees for Indian housing.
30.45 Multifamily and section 202 or 811 mortgagors.
30.50 GNMA issuers and custodians.
30.60 Dealers or sponsored third-party originators.
30.65 Failure to disclose lead-based paint hazards.
30.68 Section 8 owners.

                          Subpart C_Procedures

30.70 Prepenalty notice.
30.75 Response to prepenalty notice.
30.80 Factors in determining amount of civil money penalty.
30.85 Complaint.
30.90 Response to the complaint.
30.95 Hearings.
30.100 Settlement of a civil money penalty action.

    Authority: 12 U.S.C. 1701q-1, 1703, 1723i, 1735f-14, and 1735f-15; 
15 U.S.C. 1717a; 28 U.S.C. 1 note and 2461 note; 42 U.S.C. 1437z-1 and 
3535(d).

    Source: 61 FR 50215, Sept. 24, 1996, unless otherwise noted.



                            Subpart A_General



Sec.  30.1  Purpose and scope.

    Unless provided for elsewhere in this title or under separate 
authority, this part implements HUD's civil money penalty provisions. 
The procedural rules for hearings under this part are those applicable 
to hearings in accordance with the Administrative Procedure Act, as set 
forth in 24 CFR part 26.

[74 FR 2751, Jan. 15, 2009]

[[Page 275]]



Sec.  30.5  Effective dates.

    (a) Under Sec.  30.20, a civil money penalty may be imposed for 
violations occurring on or after May 22, 1991.
    (b) Under Sec. Sec.  30.25, 30.35, 30.45, 30.50, 30.55, and 30.60, a 
civil money penalty may be imposed for any violations that occur on or 
after December 15, 1989.
    (c) Under Sec.  30.30, a civil money penalty may be imposed with 
respect to any property transferred for use under section 810 of the 
Housing and Community Development Act of 1974, as amended (12 U.S.C. 
1706e), after January 1, 1981, to a state, a unit of general local 
government, or a public agency or qualified community organization 
designated by a unit of general local government, or a transferee of any 
such entity.
    (d) Under Sec.  30.40, concerning loan guarantees for Indian 
housing, a civil money penalty may be imposed for violations occurring 
on or after October 28, 1992.
    (e) Under Sec.  30.65, a civil money penalty may be imposed for 
violations occurring on or after the following dates:
    (1) September 6, 1996, for owners of more than four residential 
dwellings; or
    (2) December 6, 1996, for owners of one to four residential 
dwellings.
    (f) Under Sec.  30.68, a civil money penalty may be imposed for 
violations, or for those parts of continuing violations, occurring on or 
after January 7, 2002.

[61 FR 50215, Sept. 24, 1996, as amended at 66 FR 63441, Dec. 6, 2001]



Sec.  30.10  Definitions.

    Since this part is primarily procedural, terms not defined in this 
section shall have the meanings given them in relevant program 
regulations. Comprehensive definitions are in 24 CFR part 4 (HUD Reform 
Act). The terms ALJ, Department, HUD, and Secretary are defined in 24 
CFR part 5.
    Ability to pay. Determined based on an assessment of the 
respondent's resources available both presently and prospectively from 
which the Department could ultimately recover the total award, which may 
be predicted based on historical evidence.
    Agent. Any person, including an officer, director, partner, or 
trustee, who acts on behalf of another person.
    Dealer. A seller, contractor or supplier of goods or services having 
a direct or indirect financial interest in the transaction between the 
borrower and the lender, and who assists the borrower in preparing the 
credit application or otherwise assists the borrower in obtaining the 
loan from the lender.
    Knowing or Knowingly. Having actual knowledge of or acting with 
deliberate ignorance of or reckless disregard for the prohibitions under 
subpart B of this part or under 24 CFR part 4.
    Material or Materially. Having the natural tendency or potential to 
influence, or when considering the totality of the circumstances, in 
some significant respect or to some significant degree.
    Person. An individual, corporation, company, association, authority, 
firm, partnership, society, State, local government or agency thereof, 
or any other organization or group of people.
    Respondent. A person against whom a civil money penalty action is 
initiated.
    Sponsored third-party originator. A sponsored third-party originator 
as defined at Sec.  202.8 of this title.

[61 FR 50215, Sept. 24, 1996, as amended at 74 FR 2751, Jan. 15, 2009; 
77 FR 51468, Aug. 24, 2012]



Sec.  30.15  Application of other remedies.

    A civil money penalty may be imposed in addition to other 
administrative sanctions or any other civil remedy or criminal penalty.



                          Subpart B_Violations



Sec.  30.20  Ethical violations by HUD employees.

    (a) General. The General Counsel, or his or her designee, may 
initiate a civil money penalty action against HUD employees who 
improperly disclose information pursuant to section 103 of the HUD 
Reform Act of 1989 (42 U.S.C. 3537a(c)) and 24 CFR part 4, subpart B.
    (b) Maximum penalty. The maximum penalty is $18,936 for each 
violation.

[61 FR 50215, Sept. 24, 1996, as amended at 72 FR 5588, Feb. 6, 2007; 81 
FR 38935, June 15, 2016]

[[Page 276]]



Sec.  30.25  Violations by applicants for assistance.

    (a) General. The General Counsel, or his or her designee, may 
initiate a civil money penalty action against applicants for assistance, 
as defined in 24 CFR part 4, subpart A, who knowingly and materially 
violate the provisions of subsections (b) or (c) of section 102 of the 
HUD Reform Act of 1989 (42 U.S.C. 3545).
    (b) Maximum penalty. The maximum penalty is $18,936 for each 
violation.

[61 FR 50215, Sept. 24, 1996, as amended at 72 FR 5588, Feb. 6, 2007; 81 
FR 38935, June 15, 2016]



Sec.  30.35  Mortgagees and lenders.

    (a) General. The Mortgagee Review Board may initiate a civil money 
penalty action against any mortgagee or lender who knowingly and 
materially:
    (1) Violates the provisions listed in 12 U.S.C. 1735f-14(b);
    (2) Fails to comply with the requirements of Sec.  201.27(a) of this 
title regarding approval and supervision of dealers;
    (3) Approves a dealer that has been suspended, debarred, or 
otherwise denied participation in HUD's programs;
    (4) Makes a payment that is prohibited under Sec.  202.5(l).
    (5) Fails to remit, or timely remit, mortgage insurance premiums, 
loan insurance charges, or late charges or interest penalties;
    (6) Permits loan documents for an FHA insured loan to be signed in 
blank by its agents or any other party to the loan transaction unless 
expressly approved by the Secretary;
    (7) Fails to follow the mortgage assignment procedures set forth in 
Sec. Sec.  203.650 through 203.664 of this title or in Sec. Sec.  
207.255 through 207.258b of this title.
    (8) Fails to timely submit documents that are complete and accurate 
in connection with a conveyance of property or a claim for insurance 
benefits, in accordance with Sec. Sec.  203.365, 203.366, or 203.368 of 
this title;
    (9) Fails to:
    (i) Process requests for formal release of liability under an FHA 
insured mortgage;
    (ii) Obtain a credit report, issued not more than 90 days prior to 
approval of a person as a borrower, as to the person's creditworthiness 
to assume an FHA insured mortgage;
    (iii) Timely submit proper notification of a change in mortgagor or 
mortgagee as required by Sec.  203.431 of this title;
    (iv) Timely submit proper notification of mortgage insurance 
termination as required by Sec.  203.318 of this title;
    (v) Timely submit proper notification of a change in mortgage 
servicing as required by Sec.  203.502 of this title; or
    (vi) Report all delinquent mortgages to HUD, as required by Sec.  
203.330 of this title;
    (10) Fails to service FHA insured mortgages, in accordance with the 
requirements of 24 CFR parts 201, 203, and 235;
    (11) Fails to fund loans that it originated, or otherwise misuses 
loan proceeds;
    (12) Fails to comply with the conditions relating to the assignment 
or pledge of mortgages;
    (13) Fails to comply with the provisions of the Real Estate 
Settlement Procedures Act (12 U.S.C. 2601 et seq.), the Equal Credit 
Opportunity Act (15 U.S.C. 1691 et seq.), or the Fair Housing Act (42 
U.S.C. 3601 et seq.);
    (14) Fails to engage in loss mitigation as provided in Sec.  203.605 
of this title.
    (b) Continuing violation. Each day that a violation continues shall 
constitute a separate violation.
    (c)(1) Amount of penalty. The maximum penalty is $9,468 for each 
violation, up to a limit of $1,893,610 for all violations committed 
during any one-year period. Each violation shall constitute a separate 
violation as to each mortgage or loan application.
    (2) Maximum penalty for failing to engage in loss mitigation. The 
penalty for a violation of paragraph (a)(14) of this section shall be 
three times the amount of the total mortgage insurance benefits claimed 
by the mortgagee with respect to any mortgage for which the mortgagee 
failed to engage in such loss mitigation actions.

[61 FR 50215, Sept. 24, 1996, as amended at 63 FR 9742, Feb. 26, 1998; 
68 FR 12788, Mar. 17, 2003; 70 FR 21578, Apr. 26, 2005; 72 FR 5588, Feb. 
6, 2007; 74 FR 2751, Jan. 15, 2009; 74 FR 14725, Apr. 1, 2009; 78 FR 
4059, Jan. 18, 2013; 81 FR 38935, June 15, 2016]

[[Page 277]]


    Effective Date Note: At 82 FR 7117, Jan. 19, 2017, Sec.  30.35 was 
amended by revising paragraph (a)(8) and (10), effective Sept. 19, 2017. 
For the convenience of the user, the revised text is set forth as 
follows:



Sec.  30.35  Mortgagees and lenders.

    (a) * * *
    (8) Fails to timely submit documents that are complete and accurate 
in connection with a conveyance of a property or a claim for insurance 
benefits, in accordance with Sec. Sec.  203.365, 203.366, or 203.368, or 
a claim for insurance benefits in accordance with Sec.  206.127 of this 
title;

                                * * * * *

    (10) Fails to service FHA insured mortgages, in accordance with the 
requirements of 24 CFR parts 201, 203, 206, and 235;

                                * * * * *



Sec.  30.36  Other participants in FHA programs.

    (a) General. The Assistant Secretary for Housing-Federal Housing 
Commissioner (or his/her designee) may initiate a civil money penalty 
action against any principal, officer, or employee of a mortgagee or 
lender, or other participants in either a mortgage insured under the 
National Housing Act or any loan that is covered by a contract of 
insurance under title I of the National Housing Act, or a provider of 
assistance to the borrower in connection with any such mortgage or loan, 
including:
    (1) Sellers;
    (2) Borrowers;
    (3) Closing agents;
    (4) Title companies;
    (5) Real estate agents;
    (6) Mortgage brokers;
    (7) Appraisers;
    (8) Sponsored third-party originators;
    (9) Dealers;
    (10) Consultants;
    (11) Contractors;
    (12) Subcontractors; and
    (13) Inspectors.
    (b) Knowing and material violations. The Assistant Secretary for 
Housing-Federal Housing Commissioner or his/her designee may impose a 
civil penalty on any person or entity identified in paragraph (a) of 
this section who knowingly and materially:
    (1) Submits false information to the Secretary in connection with 
any mortgage insured under the National Housing Act (12 U.S.C. 1701 et 
seq.), or any loan that is covered by a contract of insurance under 
title I of the National Housing Act;
    (2) Falsely certifies to the Secretary or submits a false 
certification by another person or entity to the Secretary in connection 
with any mortgage insured under the National Housing Act or any loan 
that is covered by a contract of insurance under title I of the National 
Housing Act; or
    (3) Is a loan dealer or correspondent and fails to submit to the 
Secretary information which is required by regulations or directives in 
connection with any loan that is covered by a contract of insurance 
under title I of the National Housing Act.
    (c) Amount of penalty. The maximum penalty is $9,468 for each 
violation, up to a limit of $1,893,610 for all violations committed 
during any one-year period. Each violation shall constitute a separate 
violation as to each mortgage or loan application.

[65 FR 9087, Feb. 23, 2000, as amended at 72 FR 5588, Feb. 6, 2007; 77 
FR 51468, Aug. 24, 2012; 78 FR 4059, Jan. 18, 2013; 81 FR 38935, June 
15, 2016]



Sec.  30.40  Loan guarantees for Indian housing.

    (a) General. The Assistant Secretary for Public and Indian Housing 
(or his/her designee) may initiate a civil money penalty action against 
any mortgagee or holder of a guarantee certificate who knowingly and 
materially violates the provisions of 12 U.S.C. 1715z-13a(g)(2) 
concerning loan guarantees for Indian housing.
    (b) Continuing violation. Each day that a violation continues shall 
constitute a separate violation.
    (c) Amount of penalty. The maximum penalty is $9,468 for each 
violation, up to a limit of $1,893,610 for all violations committed 
during any one-year period. Each violation shall constitute a separate 
violation as to each mortgage or loan application.

[61 FR 50215, Sept. 24, 1996, as amended at 65 FR 9087, Feb. 23, 2000; 
68 FR 12788, Mar. 17, 2003; 72 FR 5588, Feb. 6, 2007; 78 FR 4059, Jan. 
18, 2013; 81 FR 38935, June 15, 2016]

[[Page 278]]



Sec.  30.45  Multifamily and section 202 or 811 mortgagors.

    (a) Definitions. The following definitions apply to this section 
only:
    (1) Agent employed to manage the property that has an identity of 
interest and identity of interest agent. An entity:
    (i) That has management responsibility for a project;
    (ii) In which the ownership entity, including its general partner or 
partners (if applicable) and its officers or directors (if applicable), 
has an ownership interest; and
    (iii) Over which the ownership entity exerts effective control.
    (2) Effective control. The ability to direct, alter, supervise, or 
otherwise influence the actions, policies, decisions, duties, 
employment, or personnel of the management agent.
    (3) Entity. An individual corporation; company; association; 
partnership; authority; firm; society; trust; state, local government or 
agency thereof; or any other organization or group of people.
    (4) Multifamily property. Property that includes 5 or more living 
units and that has a mortgage insured, co-insured, or held pursuant to 
the National Housing Act (12 U.S.C. 1702 et seq.).
    (5) Ownership interest. Any direct or indirect interest in the 
stock, partnership interests, beneficial interests (for a trust) or 
other medium of equity participation. An indirect interest includes 
equity participation in any entity that holds a management interest 
(e.g. general partner, managing member of an LLC, majority stockholder, 
trustee) or minimum equity interest (e.g., a 25% or more limited 
partner, 10% or more stockholder) in the ownership entity of the 
management agent.
    (6) Section 202 or 811 property. Property that includes 5 or more 
living units and that has a mortgage held pursuant to a direct loan or 
capital advances under section 202 of the Housing Act of 1959 (12 U.S.C. 
1701q) or capital advances under section 811 of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 8013).
    (b) Violation of agreement--(1) General. The Assistant Secretary for 
Housing-Federal Housing Commissioner, or his or her designee, may 
initiate a civil money penalty action against a mortgagor of a section 
202 or 811 property or a mortgagor, general partner of a partnership 
mortgagor, or any officer or director of a corporate mortgagor of a 
multifamily property who:
    (i) Has agreed in writing, as a condition of a transfer of physical 
assets, a flexible subsidy loan, a capital improvement loan, a 
modification of the mortgage terms, or a workout agreement, to use 
nonproject income to make cash contributions for payments due under the 
note and mortgage, for payments to the reserve for replacements, to 
restore the project to good physical condition, or to pay other project 
liabilities; and
    (ii) Knowingly and materially fails to comply with any of the 
commitments listed in paragraph (b)(1)(i) of this section.
    (2) Maximum penalty. The maximum penalty for each violation under 
paragraph (b) of this section is the amount of loss that the Secretary 
would experience at a foreclosure sale, or a sale after foreclosure, of 
the property involved.
    (c) Other violations. The Assistant Secretary for Housing-Federal 
Housing Commissioner, or his or her designee, may initiate a civil money 
penalty action against any of the following who knowingly and materially 
take any of the actions listed in 12 U.S.C. 1735f-15(c)(1)(B):
    (1) Any mortgagor of a multifamily property;
    (2) Any general partner of a partnership mortgagor of such property;
    (3) Any officer or director of a corporate mortgagor;
    (4) Any agent employed to manage the property that has an identity 
of interest with the mortgagor, with the general partner of a 
partnership mortgagor, or with any officer or director of a corporate 
mortgagor of such property; or
    (5) Any member of a limited liability company that is the mortgagor 
of such property or is the general partner of a limited partnership 
mortgagor or is a partner of a general partnership mortgagor.
    (d) Acceptable management. For purposes of this rule, management 
acceptable to the Secretary under 12 U.S.C. 1735f-15(c)(1)(B)(xiv) shall 
include:

[[Page 279]]

    (1) Fiscal management in accordance with HUD regulations and 
requirements;
    (2) Handling of vacancies and tenanting in accordance with HUD 
regulations and requirements;
    (3) Handling of rent collection in accordance with HUD regulations 
and requirements;
    (4) Maintenance in accordance with HUD regulations and requirements;
    (5) Compliance with HUD regulations and requirements on tenant 
organization; and
    (6) Any other matters that pertain to proper management in 
accordance with HUD regulations and requirements.
    (e) Civil money penalty. A consistent pattern of violations of HUD 
program requirements, or a single violation that causes serious injury 
to the public or tenants, can be a basis for an action to assess a civil 
money penalty.
    (f) Section 202 or 811 projects. The Assistant Secretary for 
Housing-Federal Housing Commissioner, or his or her designee, may 
initiate a civil money penalty action against any mortgagor of a section 
202 or 811 property who knowingly and materially takes any of the 
actions listed in 12 U.S.C. 1701q-1(c)(1).
    (g) Maximum penalty. The maximum penalty for each violation under 
paragraphs (c) and (f) of this section is $47,340.
    (h) Payment of penalty. No payment of a civil money penalty levied 
under this section shall be payable out of project income.
    (i) Exceptions. The Secretary may not impose penalties under this 
section for a violation, if a material cause of the violation is the 
failure of the Secretary, an agent of the Secretary, or a public housing 
agency to comply with an existing agreement.

[66 FR 63441, Dec. 6, 2001, as amended at 68 FR 12788, Mar. 17, 2003; 72 
FR 5588, Feb. 6, 2007; 74 FR 2751, Jan. 15, 2009; 78 FR 4059, Jan. 18, 
2013; 81 FR 38935, June 15, 2016]



Sec.  30.50  GNMA issuers and custodians.

    (a) General. The President of GNMA, or his or her designee, may 
initiate a civil money penalty action against a GNMA issuer or custodian 
that knowingly and materially violates any provision of 12 U.S.C. 
1723i(b), title III of the National Housing Act, or any implementing 
regulation, handbook, guaranty agreement, or contractual agreement, or 
participant letter issued by GNMA, or fails to comply with the terms of 
a settlement agreement with GNMA.
    (b) Continuing violation. Each day that a violation continues shall 
constitute a separate violation.
    (c) Amount of penalty. The maximum penalty is $9,468 for each 
violation, up to a limit of $1,893,610 during any one-year period. Each 
violation shall constitute a separate violation with respect to each 
pool of mortgages.

[61 FR 50215, Sept. 24, 1996, as amended at 68 FR 12788, Mar. 17, 2003; 
72 FR 5588, Feb. 6, 2007; 78 FR 4059, Jan. 18, 2013; 81 FR 38935, June 
15, 2016]



Sec.  30.60  Dealers or sponsored third-party originators.

    (a) General. The Assistant Secretary for Housing-Federal Housing 
Commissioner, or his or her designee, may initiate a civil money penalty 
action against any dealer or sponsored third-party originator that 
violates section 2(b)(7) of the National Housing Act (12 U.S.C. 1703). 
Such violations include, but are not limited to:
    (1) Falsifying information on an application for dealer approval or 
reapproval submitted to a lender;
    (2) Falsifying statements on a HUD credit application, improvement 
contract, note, security instrument, completion certificate, or other 
loan document;
    (3) Failing to sign a credit application if the dealer or sponsored 
third-party originator assisted the borrower in completing the 
application;
    (4) Falsely certifying to a lender that the loan proceeds have been 
or will be spent on eligible improvements;
    (5) Falsely certifying to a lender that the property improvements 
have been completed;
    (6) Falsely certifying that a borrower has not been given or 
promised any cash payment, rebate, cash bonus, or anything of more than 
nominal value as an inducement to enter into a loan transaction;

[[Page 280]]

    (7) Making a false representation to a lender with respect to the 
creditworthiness of a borrower or the eligibility of the improvements 
for which a loan is sought.
    (b) Continuing violation. Each day that a violation continues shall 
constitute a separate violation.
    (c) Amount of penalty. The maximum penalty is $9,468 for each 
violation, up to a limit for any particular person of $1,893,610 during 
any one-year period.

[61 FR 50215, Sept. 24, 1996, as amended at 68 FR 12788, Mar. 17, 2003; 
72 FR 5588, Feb. 6, 2007; 77 FR 51467, Aug. 24, 2012; 78 FR 4059, Jan. 
18, 2013; 81 FR 38935, June 15, 2016]



Sec.  30.65  Failure to disclose lead-based paint hazards.

    (a) General. The Director of the Office of Lead Hazard Control and 
Healthy Homes, or his or her designee, may initiate a civil money 
penalty action against any person who knowingly violates 42 U.S.C. 
4852d.
    (b) Amount of penalty. The maximum penalty is $16,773 for each 
violation.

[65 FR 50593, Aug. 18, 2000, as amended at 76 FR 36851, June 22, 2011; 
79 FR 35042, June 19, 2014; 81 FR 38935, June 15, 2016]



Sec.  30.68  Section 8 owners.

    (a) Definitions. The following definitions apply to this section 
only:
    Agent employed to manage the property that has an identity of 
interest and identity of interest agent. An entity:
    (1) That has management responsibility for a project;
    (2) In which the ownership entity, including its general partner or 
partners (if applicable), has an ownership interest; and
    (3) Over which the ownership entity exerts effective control.
    Effective control. The ability to direct, alter, supervise, or 
otherwise influence the actions, policies, decisions, duties, 
employment, or personnel of the management agent.
    Entity. An individual corporation; company; association; 
partnership; authority; firm; society; trust; state, local government or 
agency thereof; or any other organization or group of people.
    Ownership interest. Any direct or indirect interest in the stock, 
partnership interests, beneficial interests (for a trust) or other 
medium of equity participation. An indirect interest includes equity 
participation in any entity that holds a management interest (e.g. 
general partner, managing member of an LLC, majority stockholder, 
trustee) or minimum equity interest (e.g., a 25% or more limited 
partner, 10% or more stockholder) in the ownership entity of the 
management agent.
    (b) General. The Assistant Secretary for Housing--Federal Housing 
Commissioner, or his or her designee, or the Assistant Secretary for 
Public and Indian Housing, or his or her designee, may initiate a civil 
money penalty against any owner, any general partner of a partnership 
owner, or any agent employed to manage the property that has an identity 
of interest with the owner or the general partner of a partnership owner 
of a property receiving project-based assistance under section 8 of the 
United States Housing Act of 1937 (42 U.S.C. 1437f) for a knowing and 
material breach of a housing assistance payments contract. Examples of 
covered violations include, but are not limited to, the following:
    (1) Failure to provide decent, safe, and sanitary housing pursuant 
to section 8 of the United States Housing Act of 1937 and 24 CFR 5.703; 
or
    (2) Knowing or willful submission of false, fictitious, or 
fraudulent statements or requests for housing assistance payments to the 
Secretary or to any department or agency of the United States.
    (c) Maximum penalty. The maximum penalty for each violation under 
this section is $36,794.
    (d) Payment of penalty. No payment of a civil money penalty levied 
under this section shall be payable out of project income.
    (e) Exceptions. The Secretary may not impose penalties under this 
section for a violation, if a material cause of the violation is the 
failure of the Secretary, an agent of the Secretary, or a public housing 
agency to comply with an existing agreement.

[66 FR 63442, Dec. 6, 2001, as amended at 74 FR 2751, Jan. 15, 2009; 78 
FR 4059, Jan. 18, 2013; 81 FR 38935, June 15, 2016]

[[Page 281]]



                          Subpart C_Procedures



Sec.  30.70  Prepenalty notice.

    (a) Prior to determining whether to issue a complaint under Sec.  
30.85, the official designated in subpart B of this part, or his or her 
designee (or the chairperson of the Mortgagee Review Board, or his or 
her designee, in actions under Sec.  30.35), shall issue a written 
notice to the respondent. This prepenalty notice shall include the 
following:
    (1) That HUD is considering seeking a civil money penalty;
    (2) The specific violations alleged;
    (3) The maximum civil money penalty that may be imposed;
    (4) The opportunity to reply in writing to the designated program 
official within 30 days after receipt of the notice;
    (5) That failure to respond within the 30-day period may result in 
issuance of a complaint under Sec.  30.85 without consideration of any 
information that the respondent may wish to provide; and
    (6) That if a complaint is issued under Sec.  30.85, the respondent 
may request a hearing before an administrative law judge in accordance 
with Sec.  30.95.
    (b) Obligation to preserve documents. Upon receipt of the prepenalty 
notice, the respondent is required to preserve and maintain all 
documents or data, including electronically stored data, within his or 
her possession or control that may relate to the violations alleged in 
the prepenalty notice. The Department shall also preserve such documents 
or data upon the issuance of the prepenalty notice.

[74 FR 2751, Jan. 15, 2009]



Sec.  30.75  Response to prepenalty notice.

    (a) The response shall be in a format prescribed in the prepenalty 
notice. The response shall address the factors set forth in Sec.  30.80 
and include any arguments opposing the imposition of a civil money 
penalty that the respondent may wish to present.
    (b) In any case where respondent seeks to raise ability to pay as an 
affirmative defense or argument in mitigation, the respondent shall 
provide documentary evidence as part of its response.

[74 FR 2751, Jan. 15, 2009]



Sec.  30.80  Factors in determining amount of civil money penalty.

    After determining that a respondent has committed a violation as 
described in subpart B of this part that subjects the respondent to 
liability under this part, the officials designated in subpart B of this 
part shall consider the following factors to determine the amount of 
penalty to seek against a respondent, if any:
    (a) The gravity of the offense;
    (b) Any history of prior offenses;
    (c) The ability to pay the penalty, which ability shall be presumed 
unless specifically raised as an affirmative defense or mitigating 
factor by the respondent;
    (d) The injury to the public;
    (e) Any benefits received by the violator;
    (f) The extent of potential benefit to other persons;
    (g) Deterrence of future violations;
    (h) The degree of the violator's culpability;
    (i) With respect to Urban Homestead violations under Sec.  30.30, 
the expenditures made by the violator in connection with any gross 
profit derived; and
    (j) Such other matters as justice may require.
    (k) In addition to the above factors, with respect to violations 
under Sec. Sec.  30.45, 30.55, 30.60, and 30.68, the Assistant Secretary 
for Housing--Federal Housing Commissioner, or his or her designee, or 
the Assistant Secretary for Public and Indian Housing, or his or her 
designee, shall also consider:
    (1) Any injury to tenants; and/or
    (2) Any injury to lot owners.
    (l) HUD may consider the factors listed in paragraphs (a) through 
(k) of this section to determine the appropriateness of imposing a 
penalty under Sec.  30.35(c)(2); however, HUD cannot change the amount 
of the penalty under Sec.  30.35(c)(2).

[74 FR 2751, Jan. 15, 2009]



Sec.  30.85  Complaint.

    (a) General. Upon the expiration of the period for the respondent to 
submit

[[Page 282]]

a response to the prepenalty notice, the official designated in subpart 
B of this part, or his or her designee (or the Mortgagee Review Board in 
actions under Sec.  30.35) shall determine whether to seek a civil money 
penalty. Such determination shall be based upon a review of the 
prepenalty notice, the response, if any, and the factors listed at Sec.  
30.80. A determination by the Mortgagee Review Board to seek a civil 
money penalty shall be by a majority vote of the Board.
    (b) If a determination is made to seek a civil money penalty, 
government counsel shall issue a complaint to the respondent on behalf 
of the officials listed at subpart B of this part or the Mortgagee 
Review Board for violations under Sec.  30.35. The complaint shall be 
served upon respondent and simultaneously filed with the Office of 
Administrative Law Judges, and shall state the following:
    (1) The factual basis for the decision to seek a penalty;
    (2) The applicable civil money penalty statute;
    (3) The amount of penalty sought;
    (4) The right to submit a response in writing, within 15 days of 
receipt of the complaint, requesting a hearing on any material fact in 
the complaint, or on the appropriateness of the penalty sought;
    (5) The address to which a response must be sent;
    (6) That the failure to submit a response may result in the 
imposition of the penalty in the amount sought.
    (c) A copy of this part and of 24 CFR part 26, subpart B, shall be 
included with the complaint.
    (d) Service of the complaint. The complaint shall be served on the 
respondent by first class mail, personal delivery, or other means.
    (e) Before taking an action under Sec. Sec.  30.35 for violation of 
12 U.S.C. Sec.  1735f-14(b)(1)(D) or (F), 30.36, or 30.50 for violation 
of 12 U.S.C. 1723i(b)(1)(G) or (I), the Secretary shall inform the 
Attorney General of the United States, which may be accomplished by 
providing a copy of the complaint. The Secretary shall include in the 
body of the complaint a statement confirming that this action was taken.

[61 FR 50215, Sept. 24, 1996, as amended at 74 FR 2752, Jan. 15, 2009]



Sec.  30.90  Response to the complaint.

    (a) Request for a hearing. If the respondent desires a hearing 
before an administrative law judge, the respondent shall submit a 
request for a hearing to HUD and the Office of Administrative Law Judges 
no later than 15 days following receipt of the complaint, as required by 
statute. This mandated period cannot be extended.
    (b) Answer. In any case in which the respondent has requested a 
hearing, the respondent shall serve upon HUD and file with the Office of 
Administrative Law Judges a written answer to the complaint within 30 
days of receipt of the complaint, unless such time is extended by the 
administrative law judge for good cause. The answer shall include the 
admission or denial of each allegation of liability made in the 
complaint; any defense on which the respondent intends to rely; any 
reasons why the civil money penalty should be less than the amount 
sought in the complaint, based on the factors listed at Sec.  30.80; and 
the name, address, and telephone number of the person who will act as 
the respondent's representative, if any.
    (c) Filing with the administrative law judges. HUD shall file the 
complaint and response with the Docket Clerk, Office of Administrative 
Law Judges, in accordance with Sec.  26.38 of this chapter. If no 
response is submitted, then HUD may file a motion for default judgment, 
together with a copy of the complaint, in accordance with Sec.  26.41 of 
this title.

[61 FR 50215, Sept. 24, 1996, as amended at 74 FR 2752, Jan. 15, 2009; 
74 FR 7313, Feb. 17, 2009; 74 FR 4635, Jan. 26, 2009; 78 FR 4060, Jan. 
18, 2013]



Sec.  30.95  Hearings.

    Hearings under this part shall be conducted in accordance with the 
procedures applicable to hearings in accordance with the Administrative 
Procedure Act, set forth in 24 CFR part 26.

[74 FR 2752, Jan. 15, 2009]

[[Page 283]]



Sec.  30.100  Settlement of a civil money penalty action.

    The officials listed at subpart B of this part, or their designees 
(or the Mortgagee Review Board, or designee, for violations under Sec.  
30.35), are authorized to enter into settlement agreements resolving 
civil money penalty actions that may be brought under part 30.

[74 FR 2752, Jan. 15, 2009]



PART 35_LEAD-BASED PAINT POISONING PREVENTION IN CERTAIN RESIDENTIAL
STRUCTURES--Table of Contents



  Subpart A_Disclosure of Known Lead-Based Paint Hazards Upon Sale or 
                      Lease of Residential Property

Sec.
35.80 Purpose.
35.82 Scope and applicability.
35.84 Effective dates.
35.86 Definitions.
35.88 Disclosure requirements for sellers and lessors.
35.90 Opportunity to conduct an evaluation.
35.92 Certification and acknowledgment of disclosure.
35.94 Agent responsibilities.
35.96 Enforcement.
35.98 Impact on State and local requirements.

Subpart B_General Lead-Based Paint Requirements and Definitions for All 
                                Programs

35.100 Purpose and applicability.
35.105 [Reserved]
35.106 Information collection requirements.
35.110 Definitions.
35.115 Exemptions.
35.120 Options.
35.125 Notice of evaluation and hazard reduction activities.
35.130 Lead hazard information pamphlet.
35.135 Use of paint containing lead.
35.140 Prohibited methods of paint removal.
35.145 Compliance with Federal laws and authorities.
35.150 Compliance with other State, tribal, and local laws.
35.155 Minimum requirements.
35.160 Waivers.
35.165 Prior evaluation or hazard reduction.
35.170 Noncompliance with the requirements of subparts B through R.
35.175 Records.

Subpart C_Disposition of Residential Property Owned by a Federal Agency 
                             Other Than HUD

35.200 Purpose and applicability.
35.205 Definitions and other general requirements.
35.210 Disposition of residential property constructed before 1960.
35.215 Disposition of residential property constructed after 1959 and 
          before 1978.

 Subpart D_Project-Based Assistance Provided by a Federal Agency Other 
                                Than HUD

35.300 Purpose and applicability.
35.305 Definitions and other general requirements.
35.310 Notices and pamphlet.
35.315 Risk assessments.
35.320 Hazard reduction.
35.325 Child with an elevated blood lead level.

Subpart E [Reserved]

               Subpart F_HUD-Owned Single Family Property

35.500 Purpose and applicability.
35.505 Definitions and other general requirements.
35.510 Required procedures.

                Subpart G_Multifamily Mortgage Insurance

35.600 Purpose and applicability.
35.605 Definitions and other general requirements.
35.610 Exemption.
35.615 Notices and pamphlet.
35.620 Multifamily insured property constructed before 1960.
35.625 Multifamily Insured Property constructed after 1959 and before 
          1978.
35.630 Conversions and Major Rehabilitations.

                   Subpart H_Project-Based Assistance

35.700 Purpose and applicability.
35.705 Definitions and other general requirements.
35.710 Notices and pamphlet.
35.715 Multifamily properties receiving more than $5,000 per unit.
35.720 Multifamily properties receiving up to $5,000 per unit, and 
          single-family properties.
35.725 Section 8 rent adjustments.
35.730 Child with an elevated blood lead level.

[[Page 284]]

  Subpart I_HUD-Owned and Mortgagee-in-Possession Multifamily Property.

35.800 Purpose and applicability.
35.805 Definitions and other general requirements.
35.810 Notices and pamphlet.
35.815 Evaluation.
35.820 Interim controls.
35.825 Ongoing lead-based paint maintenance and reevaluation.
35.830 Child with an elevated blood lead level.

                        Subpart J_Rehabilitation

35.900 Purpose and applicability.
35.905 Definitions and other general requirements.
35.910 Notices and pamphlet.
35.915 Calculating Federal rehabilitation assistance.
35.920 [Reserved]
35.925 Examples of determining applicable requirements.
35.930 Evaluation and hazard reduction requirements.
35.935 Ongoing lead-based paint maintenance activities.
35.940 Special requirements for insular areas.

     Subpart K_Acquisition, Leasing, Support Services, or Operation.

35.1000 Purpose and applicability.
35.1005 Definitions and other general requirements.
35.1010 Notices and pamphlet.
35.1015 Visual assessment, paint stabilization, and maintenance.
35.1020 Funding for evaluation and hazard reduction.

                    Subpart L_Public Housing Programs

35.1100 Purpose and applicability.
35.1105 Definitions and other general requirements.
35.1110 Notices and pamphlet.
35.1115 Evaluation.
35.1120 Hazard reduction.
35.1125 Evaluation and hazard reduction before acquisition and 
          development.
35.1130 Child with an elevated blood lead level.
35.1135 Eligible costs.
35.1140 Insurance coverage.

                Subpart M_Tenant-Based Rental Assistance

35.1200 Purpose and applicability.
35.1205 Definitions and other general requirements.
35.1210 Notices and pamphlet.
35.1215 Activities at initial and periodic inspections.
35.1220 Ongoing lead-based paint maintenance activities.
35.1225 Child with an elevated blood lead level.

Subparts N-Q [Reserved]

 Subpart R_Methods and Standards for Lead-Based Paint Hazard Evaluation 
                    and Hazard Reduction Activities.

35.1300 Purpose and applicability.
35.1305 Definitions and other general requirements.
35.1310 References.
35.1315 Collection and laboratory analysis of samples.
35.1320 Lead-based paint inspections, paint testing, risk assessments, 
          lead-hazard screens, and reevaluations.
35.1325 Abatement.
35.1330 Interim controls.
35.1335 Standard treatments.
35.1340 Clearance.
35.1345 Occupant protection and worksite preparation.
35.1350 Safe work practices.
35.1355 Ongoing lead-based paint maintenance and reevaluation 
          activities.

    Authority: 42 U.S.C. 3535(d), 4821, and 4851.



 Subpart A_Disclosure of Known Lead-Based Paint and/or Lead-Based Paint 
           Hazards Upon Sale or Lease of Residential Property

    Source: 61 FR 9082, Mar. 6, 1996, unless otherwise noted. 
Redesignated at 64 FR 50201, Sept. 15, 1999.



Sec.  35.80  Purpose.

    This subpart implements the provisions of 42 U.S.C. 4852d, which 
impose certain requirements on the sale or lease of target housing. 
Under this subpart, a seller or lessor of target housing shall disclose 
to the purchaser or lessee the presence of any known lead-based paint 
and/or lead-based paint hazards; provide available records and reports; 
provide the purchaser or lessee with a lead hazard information pamphlet; 
give purchasers a 10-day opportunity to conduct a risk assessment or 
inspection; and attach specific disclosure and warning language to the 
sales or leasing contract before the purchaser or lessee is obligated 
under a contract to purchase or lease target housing.

[[Page 285]]



Sec.  35.82  Scope and applicability.

    This subpart applies to all transactions to sell or lease target 
housing, including subleases, with the exception of the following:
    (a) Sales of target housing at foreclosure.
    (b) Leases of target housing that have been found to be lead-based 
paint free by an inspector certified under the Federal certification 
program or under a federally accredited State or tribal certification 
program. Until a Federal certification program or federally accredited 
State certification program is in place within the State, inspectors 
shall be considered qualified to conduct an inspection for this purpose 
if they have received certification under any existing State or tribal 
inspector certification program. The lessor has the option of using the 
results of additional test(s) by a certified inspector to confirm or 
refute a prior finding.
    (c) Short-term leases of 100 days or less, where no lease renewal or 
extension can occur.
    (d) Renewals of existing leases in target housing in which the 
lessor has previously disclosed all information required under Sec.  
35.88 and where no new information described in Sec.  35.88 has come 
into the possession of the lessor. For the purposes of this paragraph, 
renewal shall include both renegotiation of existing lease terms and/or 
ratification of a new lease.



Sec.  35.84  Effective dates.

    The requirements in this subpart take effect in the following 
manner:
    (a) For owners of more than four residential dwellings, the 
requirements shall take effect on September 6, 1996.
    (b) For owners of one to four residential dwellings, the 
requirements shall take effect on December 6, 1996.



Sec.  35.86  Definitions.

    The following definitions apply to this subpart.
    The Act means the Residential Lead-Based Paint Hazard Reduction Act 
of 1992, 42 U.S.C. 4852d.
    Agent means any party who enters into a contract with a seller or 
lessor, including any party who enters into a contract with a 
representative of the seller or lessor, for the purpose of selling or 
leasing target housing. This term does not apply to purchasers or any 
purchaser's representative who receives all compensation from the 
purchaser.
    Available means in the possession of or reasonably obtainable by the 
seller or lessor at the time of the disclosure.
    Common area means a portion of a building generally accessible to 
all residents/users including, but not limited to, hallways, stairways, 
laundry and recreational rooms, playgrounds, community centers, and 
boundary fences.
    Contract for the purchase and sale of residential real property 
means any contract or agreement in which one party agrees to purchase an 
interest in real property on which there is situated one or more 
residential dwellings used or occupied, or intended to be used or 
occupied, in whole or in part, as the home or residence of one or more 
persons.
    EPA means the Environmental Protection Agency.
    Evaluation means a risk assessment and/or inspection.
    Foreclosure means any of the various methods, statutory or 
otherwise, known in different jurisdictions, of enforcing payment of a 
debt, by the taking and selling of real property.
    Housing for the elderly means retirement communities or similar 
types of housing reserved for households composed of one or more persons 
62 years of age or more at the time of initial occupancy.
    Inspection means:
    (1) A surface-by-surface investigation to determine the presence of 
lead-based paint as provided in section 302(c) of the Lead-Based Paint 
Poisoning and Prevention Act [42 U.S.C. 4822], and
    (2) The provision of a report explaining the results of the 
investigation.
    Lead-based paint means paint or other surface coatings that contain 
lead equal to or in excess of 1.0 milligram per square centimeter or 0.5 
percent by weight.
    Lead-based paint free housing means target housing that has been 
found to be free of paint or other surface coatings that contain lead 
equal to or in excess of 1.0 milligram per square centimeter or 0.5 
percent by weight.

[[Page 286]]

    Lead-based paint hazard means any condition that causes exposure to 
lead from lead-contaminated dust, lead-contaminated soil, or lead-
contaminated paint that is deteriorated or present in accessible 
surfaces, friction surfaces, or impact surfaces that would result in 
adverse human health effects as established by the appropriate Federal 
agency.
    Lessee means any entity that enters into an agreement to lease, 
rent, or sublease target housing, including but not limited to 
individuals, partnerships, corporations, trusts, government agencies, 
housing agencies, Indian tribes, and nonprofit organizations.
    Lessor means any entity that offers target housing for lease, rent, 
or sublease, including but not limited to individuals, partnerships, 
corporations, trusts, government agencies, housing agencies, Indian 
tribes, and nonprofit organizations.
    Owner means any entity that has legal title to target housing, 
including but not limited to individuals, partnerships, corporations, 
trusts, government agencies, housing agencies, Indian tribes, and 
nonprofit organizations, except where a mortgagee holds legal title to 
property serving as collateral for a mortgage loan, in which case the 
owner would be the mortgagor.
    Purchaser means an entity that enters into an agreement to purchase 
an interest in target housing, including but not limited to individuals, 
partnerships, corporations, trusts, government agencies, housing 
agencies, Indian tribes, and nonprofit organizations.
    Reduction means measures designed to reduce or eliminate human 
exposure to lead-based paint hazards through methods including interim 
controls and abatement.
    Residential dwelling means:
    (1) A single-family dwelling, including attached structures such as 
porches and stoops; or
    (2) A single-family dwelling unit in a structure that contains more 
than one separate residential dwelling unit, and in which each such unit 
is used or occupied, or intended to be used or occupied, in whole or in 
part, as the residence of one or more persons.
    Risk assessment means an on-site investigation to determine and 
report the existence, nature, severity, and location of lead-based paint 
hazards in residential dwellings, including:
    (1) Information gathering regarding the age and history of the 
housing and occupancy by children under age 6;
    (2) Visual inspection;
    (3) Limited wipe sampling or other environmental sampling 
techniques;
    (4) Other activity as may be appropriate; and
    (5) Provision of a report explaining the results of the 
investigation.
    Seller means any entity that transfers legal title to target 
housing, in whole or in part, in return for consideration, including but 
not limited to individuals, partnerships, corporations, trusts, 
government agencies, housing agencies, Indian tribes, and nonprofit 
organizations. The term ``seller'' also includes:
    (1) An entity that transfers shares in a cooperatively owned 
project, in return for consideration; and
    (2) An entity that transfers its interest in a leasehold, in 
jurisdictions or circumstances where it is legally permissible to 
separate the fee title from the title to the improvement, in return for 
consideration.
    Target housing means any housing constructed prior to 1978, except 
housing for the elderly or persons with disabilities (unless any child 
who is less than 6 years of age resides or is expected to reside in such 
housing) or any 0-bedroom dwelling.
    TSCA means the Toxic Substances Control Act, 15 U.S.C. 2601.
    0-bedroom dwelling means any residential dwelling in which the 
living area is not separated from the sleeping area. The term includes 
efficiencies, studio apartments, dormitory housing, military barracks, 
and rentals of individual rooms in residential dwellings.



Sec.  35.88  Disclosure requirements for sellers and lessors.

    (a) The following activities shall be completed before the purchaser 
or lessee is obligated under any contract to purchase or lease target 
housing that is not otherwise an exempt transaction pursuant to Sec.  
35.82. Nothing in this section implies a positive obligation on the 
seller or lessor to conduct any evaluation or reduction activities.

[[Page 287]]

    (1) The seller or lessor shall provide the purchaser or lessee with 
an EPA-approved lead hazard information pamphlet. Such pamphlets include 
the EPA document entitled Protect Your Family From Lead in Your Home 
(EPA -747-K-94-001) or an equivalent pamphlet that has been approved for 
use in that State by EPA.
    (2) The seller or lessor shall disclose to the purchaser or lessee 
the presence of any known lead-based paint and/or lead-based paint 
hazards in the target housing being sold or leased. The seller or lessor 
shall also disclose any additional information available concerning the 
known lead-based paint and/or lead-based paint hazards, such as the 
basis for the determination that lead-based paint and/or lead-based 
paint hazards exist, the location of the lead-based paint and/or lead-
based paint hazards, and the condition of the painted surfaces.
    (3) The seller or lessor shall disclose to each agent the presence 
of any known lead-based paint and/or lead-based paint hazards in the 
target housing being sold or leased and the existence of any available 
records or reports pertaining to lead-based paint and/or lead-based 
paint hazards. The seller or lessor shall also disclose any additional 
information available concerning the known lead-based paint and/or lead-
based paint hazards, such as the basis for the determination that lead-
based paint and/or lead-based paint hazards exist, the location of the 
lead-based paint and/or lead-based paint hazards, and the condition of 
the painted surfaces.
    (4) The seller or lessor shall provide the purchaser or lessee with 
any records or reports available to the seller or lessor pertaining to 
lead-based paint and/or lead-based paint hazards in the target housing 
being sold or leased. This requirement includes records and reports 
regarding common areas. This requirement also includes records and 
reports regarding other residential dwellings in multifamily target 
housing, provided that such information is part of an evaluation or 
reduction of lead-based paint and/or lead-based paint hazards in the 
target housing as a whole.
    (b) If any of the disclosure activities identified in paragraph (a) 
of this section occurs after the purchaser or lessee has provided an 
offer to purchase or lease the housing, the seller or lessor shall 
complete the required disclosure activities prior to accepting the 
purchaser's or lessee's offer and allow the purchaser or lessee an 
opportunity to review the information and possibly amend the offer.

(Approved by the Office of Management and Budget under control number 
2070-0151)

[61 FR 9082, Mar. 6, 1996, as amended at 64 FR 14382, Mar. 25, 1999]



Sec.  35.90  Opportunity to conduct an evaluation.

    (a) Before a purchaser is obligated under any contract to purchase 
target housing, the seller shall permit the purchaser a 10-day period 
(unless the parties mutually agree, in writing, upon a different period 
of time) to conduct a risk assessment or inspection for the presence of 
lead-based paint and/or lead-based paint hazards.
    (b) Notwithstanding paragraph (a) of this section, a purchaser may 
waive the opportunity to conduct the risk assessment or inspection by so 
indicating in writing.

(Approved by the Office of Management and Budget under control number 
2070-0151)

[61 FR 9082, Mar. 6, 1996, as amended at 64 FR 14382, Mar. 25, 1999]



Sec.  35.92  Certification and acknowledgment of disclosure.

    (a) Seller requirements. Each contract to sell target housing shall 
include an attachment containing the following elements, in the language 
of the contract (e.g., English, Spanish):
    (1) A Lead Warning Statement consisting of the following language:

    Every purchaser of any interest in residential real property on 
which a residential dwelling was built prior to 1978 is notified that 
such property may present exposure to lead from lead-based paint that 
may place young children at risk of developing lead poisoning. Lead 
poisoning in young children may produce permanent neurological damage, 
including learning disabilities, reduced intelligence quotient, 
behavioral problems, and impaired memory. Lead poisoning also poses a 
particular risk to pregnant women. The seller of any interest in 
residential real

[[Page 288]]

property is required to provide the buyer with any information on lead-
based paint hazards from risk assessments or inspections in the seller's 
possession and notify the buyer of any known lead-based paint hazards. A 
risk assessment or inspection for possible lead-based paint hazards is 
recommended prior to purchase.

    (2) A statement by the seller disclosing the presence of known lead-
based paint and/or lead-based paint hazards in the target housing being 
sold or indicating no knowledge of the presence of lead-based paint and/
or lead-based paint hazards. The seller shall also provide any 
additional information available concerning the known lead-based paint 
and/or lead-based paint hazards, such as the basis for the determination 
that lead-based paint and/or lead-based paint hazards exist, the 
location of the lead-based paint and/or lead-based paint hazards, and 
the condition of the painted surfaces.
    (3) A list of any records or reports available to the seller 
pertaining to lead-based paint and/or lead-based paint hazards in the 
housing that have been provided to the purchaser. If no such records or 
reports are available, the seller shall so indicate.
    (4) A statement by the purchaser affirming receipt of the 
information set out in paragraphs (a)(2) and (a)(3) of this section and 
the lead hazard information pamphlet required under section 15 U.S.C. 
2696.
    (5) A statement by the purchaser that he/she has either:
    (i) Received the opportunity to conduct the risk assessment or 
inspection required by Sec.  35.90(a); or
    (ii) Waived the opportunity.
    (6) When any agent is involved in the transaction to sell target 
housing on behalf of the seller, a statement that:
    (i) The agent has informed the seller of the seller's obligations 
under 42 U.S.C. 4852d; and
    (ii) The agent is aware of his/her duty to ensure compliance with 
the requirements of this subpart.
    (7) The signatures of the sellers, agents, and purchasers, 
certifying to the accuracy of their statements, to the best of their 
knowledge, along with the dates of signature.
    (b) Lessor requirements. Each contract to lease target housing shall 
include, as an attachment or within the contract, the following 
elements, in the language of the contract (e.g., English, Spanish):
    (1) A Lead Warning Statement with the following language:

    Housing built before 1978 may contain lead-based paint. Lead from 
paint, paint chips, and dust can pose health hazards if not managed 
properly. Lead exposure is especially harmful to young children and 
pregnant women. Before renting pre-1978 housing, lessors must disclose 
the presence of lead-based paint and/or lead-based paint hazards in the 
dwelling. Lessees must also receive a federally approved pamphlet on 
lead poisoning prevention.

    (2) A statement by the lessor disclosing the presence of known lead-
based paint and/or lead-based paint hazards in the target housing being 
leased or indicating no knowledge of the presence of lead-based paint 
and/or lead-based paint hazards. The lessor shall also disclose any 
additional information available concerning the known lead-based paint 
and/or lead-based paint hazards, such as the basis for the determination 
that lead-based paint and/or lead-based paint hazards exist in the 
housing, the location of the lead-based paint and/or lead-based paint 
hazards, and the condition of the painted surfaces.
    (3) A list of any records or reports available to the lessor 
pertaining to lead-based paint and/or lead-based paint hazards in the 
housing that have been provided to the lessee. If no such records or 
reports are available, the lessor shall so indicate.
    (4) A statement by the lessee affirming receipt of the information 
set out in paragraphs (b)(2) and (b)(3) of this section and the lead 
hazard information pamphlet required under 15 U.S.C. 2696.
    (5) When any agent is involved in the transaction to lease target 
housing on behalf of the lessor, a statement that:
    (i) The agent has informed the lessor of the lessor's obligations 
under 42 U.S.C. 4852d; and
    (ii) The agent is aware of his/her duty to ensure compliance with 
the requirements of this subpart.
    (6) The signatures of the lessors, agents, and lessees certifying to 
the accuracy of their statements to the best

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of their knowledge, along with the dates of signature.
    (c) Retention of certification and acknowledgment information. (1) 
The seller, and any agent, shall retain a copy of the completed 
attachment required under paragraph (a) of this section for no less than 
3 years from the completion date of the sale. The lessor, and any agent, 
shall retain a copy of the completed attachment or lease contract 
containing the information required under paragraph (b) of this section 
for no less than 3 years from the commencement of the leasing period.
    (2) This recordkeeping requirement is not intended to place any 
limitations on civil suits under the Act, or to otherwise affect a 
lessee's or purchaser's rights under the civil penalty provisions of 42 
U.S.C. 4852d(b)(3).
    (d) The seller, lessor, or agent shall not be responsible for the 
failure of a purchaser's or lessee's legal representative (where such 
representative receives all compensation from the purchaser or lessee) 
to transmit disclosure materials to the purchaser or lessee, provided 
that all required parties have completed and signed the necessary 
certification and acknowledgment language required under paragraphs (a) 
and (b) of this section.

(Approved by the Office of Management and Budget under control number 
2070-0151)

[61 FR 9082, Mar. 6, 1996, as amended at 64 FR 14382, Mar. 25, 1999]



Sec.  35.94  Agent responsibilities.

    (a) Each agent shall ensure compliance with all requirements of this 
subpart. To ensure compliance, the agent shall:
    (1) Inform the seller or lessor of his/her obligations under 
Sec. Sec.  35.88, 35.90, and 35.92.
    (2) Ensure that the seller or lessor has performed all activities 
required under Sec. Sec.  35.88, 35.90, and 35.92, or personally ensure 
compliance with the requirements of Sec. Sec.  35.88, 35.90, and 35.92.
    (b) If the agent has complied with paragraph (a)(1) of this section, 
the agent shall not be liable for the failure to disclose to a purchaser 
or lessee the presence of lead-based paint and/or lead-based paint 
hazards known by a seller or lessor but not disclosed to the agent.

(Approved by the Office of Management and Budget under control number 
2070-0151)

[61 FR 9082, Mar. 6, 1996, as amended at 64 FR 14382, Mar. 25, 1999]



Sec.  35.96  Enforcement.

    (a) Any person who knowingly fails to comply with any provision of 
this subpart shall be subject to civil monetary penalties in accordance 
with the provisions of 42 U.S.C. 3545 and 24 CFR part 30.
    (b) The Secretary is authorized to take such action as may be 
necessary to enjoin any violation of this subpart in the appropriate 
Federal district court.
    (c) Any person who knowingly violates the provisions of this subpart 
shall be jointly and severally liable to the purchaser or lessee in an 
amount equal to 3 times the amount of damages incurred by such 
individual.
    (d) In any civil action brought for damages pursuant to 42 U.S.C. 
4852d(b)(3), the appropriate court may award court costs to the party 
commencing such action, together with reasonable attorney fees and any 
expert witness fees, if that party prevails.
    (e) Failure or refusal to comply with Sec. Sec.  35.88 (disclosure 
requirements for sellers and lessors), Sec.  35.90 (opportunity to 
conduct an evaluation), Sec.  35.92 (certification and acknowledgment of 
disclosure), or Sec.  35.94 (agent responsibilities) is a violation of 
42 U.S.C. 4852d(b)(5) and of TSCA section 409 (15 U.S.C. 2689).
    (f) Violators may be subject to civil and criminal sanctions 
pursuant to TSCA section 16 (15 U.S.C. 2615) for each violation. For 
purposes of enforcing this subpart, the penalty for each violation 
applicable under 15 U.S.C. 2615 shall be not more than $10,000.



Sec.  35.98  Impact on State and local requirements.

    Nothing in this subpart shall relieve a seller, lessor, or agent 
from any responsibility for compliance with State or local laws, 
ordinances, codes, or regulations governing notice or disclosure of 
known lead-based paint and/or lead-based paint hazards. Neither HUD nor

[[Page 290]]

EPA assumes any responsibility for ensuring compliance with such State 
or local requirements.



Subpart B_General Lead-Based Paint Requirements and Definitions for All 
                                Programs.

    Source: 64 FR 50202, Sept. 15, 1999, unless otherwise noted.



Sec.  35.100  Purpose and applicability.

    (a) Purpose. The requirements of subparts B through R of this part 
are promulgated to implement the Lead-Based Paint Poisoning Prevention 
Act, as amended (42 U.S.C. 4821 et seq.), and the Residential Lead-Based 
Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851 et seq.).
    (b) Applicability--(1) This subpart. This subpart applies to all 
target housing that is federally owned and target housing receiving 
Federal assistance to which subparts C, D, F through M, and R of this 
part apply, except where indicated.
    (2) Other subparts--(i) General. Subparts C, D, and F through M of 
this part each set forth requirements for a specific type of Federal 
housing activity or assistance, such as multifamily mortgage insurance, 
project-based rental assistance, rehabilitation, or tenant-based rental 
assistance. Subpart R of this part provides standards and methods for 
activities required in subparts B, C, D, and F through M of this part.
    (ii) Application to programs. Most HUD housing programs are covered 
by only one subpart of this part, but some programs can be used for more 
than one type of assistance and therefore are covered by more than one 
subpart of this part. A current list of programs covered by each subpart 
of this part is available on the internet at www.hud.gov, or by mail 
from the National Lead Information Center at 1-800-424-LEAD. Examples of 
flexible programs that can provide more than one type of assistance are 
the HOME Investment Partnerships program, the Community Development 
Block Grant program, and the Indian Housing Block Grant Program. 
Grantees, participating jurisdictions, Indian tribes and other entities 
administering such flexible programs must decide which subpart applies 
to the type of assistance being provided to a particular dwelling unit 
or residential property.
    (iii) Application to dwelling units. In some cases, more than one 
type of assistance may be provided to the same dwelling unit. In such 
cases, the subpart or section with the most protective initial hazard 
reduction requirements applies. Paragraph (c) of this section provides a 
table that lists the subparts and sections of this part in order from 
the most protective to the least protective. (This list is based only on 
the requirements for initial hazard reduction. The summary of 
requirements on this list is not a complete list of requirements. It is 
necessary to refer to the applicable subparts and sections to determine 
all applicable requirements.)
    (iv) Example. A multifamily building has 100 dwelling units and was 
built in 1965. The property is financed with HUD multifamily mortgage 
insurance. This building is covered by subpart G of this part (see Sec.  
35.625--Multifamily mortgage insurance for properties constructed after 
1959), which is at protectiveness level 5 in the table set forth in 
paragraph (c) of this section. In the same building, however, 50 of the 
100 dwelling units are receiving project-based assistance, and the 
average annual assistance per assisted unit is $5,500. Those 50 units, 
and common areas servicing those units, are covered by the requirements 
of subpart H of this part (see Sec.  35.715--Project-based assistance 
for multifamily properties receiving more than $5,000 per unit), which 
are at protectiveness level 3. Therefore, because level 3 is a higher 
level of protectiveness than level 5, the units receiving project-based 
assistance, and common areas servicing those units, must comply at level 
3, while the rest of the building can be operated at level 5. The owner 
may choose to operate the entire building at level 3 for simplicity.
    (c) Table One. The following table lists the subparts and sections 
of this part applying to HUD programs in order from most protective to 
least protective hazard reduction requirements. The summary of hazard 
reduction requirements in this table is not

[[Page 291]]

complete. Readers must refer to relevant subpart for complete 
requirements.

------------------------------------------------------------------------
  Level of                                              Hazard reduction
 protection   Subpart, section, and type of assistance    requirements
------------------------------------------------------------------------
1...........  Subpart L, Public housing. Subpart G,     Full abatement
               Sec.   35.630, Multifamily mortgage       of lead-based
               insurance for conversions and major       paint.
               rehabilitations.
2...........  Subpart J, Sec.   35.930(d), Properties   Abatement of
               receiving more than $25,000 per unit in   lead-based
               rehabilitation assistance.                paint hazards.
3...........  Subpart G, Sec.   35.620, Multifamily     Interim
               mortgage insurance for properties         controls.
               constructed before 1960, other than
               conversions and major rehabilitations.
               Subpart H, Sec.   35.715, Project-based
               assistance for multifamily properties
               receiving more than $5,000 per unit.
               Subpart I, HUD-owned multifamily
               property. Subpart J, Sec.   35.930(c),
               Properties receiving more than $5,000
               and up to $25,000 per unit in
               rehabilitation assistance.
4...........  Subpart F, HUD-owned single family        Paint
               properties. Subpart H, Sec.   35.720,     stabilization.
               Project-based rental assistance for
               multifamily properties receiving up to
               $5,000 per unit and single family
               properties. Subpart K, Acquisition,
               leasing, support services, or
               operation. Subpart M, Tenant-based
               rental assistance.
5...........  Subpart G, Sec.   35.625, Multifamily     Ongoing lead-
               mortgage insurance for properties         based paint
               constructed after 1959.                   maintenance.
6...........  Subpart J, Sec.   35.930(b), Properties   Safe work
               receiving up to and including $5,000 in   practices
               rehabilitation assistance.                during
                                                         rehabilitation.
------------------------------------------------------------------------



Sec.  35.105  [Reserved]



Sec.  35.106  Information collection requirements.

    The information collection requirements contained in this part have 
been approved by the Office of Management and Budget (OMB) in accordance 
with the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 
2501-3520), and have been assigned OMB control number 2539-0009. An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless the collection displays a 
valid control number.



Sec.  35.110  Definitions.

    Abatement means any set of measures designed to permanently 
eliminate lead-based paint or lead-based paint hazards (see definition 
of ``permanent''). Abatement includes:
    (1) The removal of lead-based paint and dust-lead hazards, the 
permanent enclosure or encapsulation of lead-based paint, the 
replacement of components or fixtures painted with lead-based paint, and 
the removal or permanent covering of soil-lead hazards; and
    (2) All preparation, cleanup, disposal, and post abatement clearance 
testing activities associated with such measures.
    Act means the Lead-Based Paint Poisoning Prevention Act, as amended, 
42 U.S.C. 4822 et seq.
    Bare soil means soil or sand not covered by grass, sod, other live 
ground covers, wood chips, gravel, artificial turf, or similar covering.
    Certified means certified to perform such activities as risk 
assessment, lead-based paint inspection, abatement supervision, or 
renovation, either by a State or Indian tribe with a lead-based paint 
certification program authorized by the Environmental Protection Agency 
(EPA), in accordance with 40 CFR part 745, subpart Q, or by the EPA, in 
accordance with 40 CFR part 745, subparts E or L.
    Chewable surface means an interior or exterior surface painted with 
lead-based paint that a young child can mouth or chew. A chewable 
surface is the same as an ``accessible surface'' as defined in 42 U.S.C. 
4851b(2)). Hard metal substrates and other materials that cannot be 
dented by the bite of a young child are not considered chewable.
    Clearance examination means an activity conducted following lead-
based paint hazard reduction activities to determine that the hazard 
reduction activities are complete and that no soil-lead hazards or 
settled dust-lead hazards, as defined in this part, exist in the 
dwelling unit or worksite. The clearance process includes a visual 
assessment and collection and analysis of environmental samples. Dust-
lead

[[Page 292]]

standards for clearance are found at Sec.  35.1320.
    Common area means a portion of a residential property that is 
available for use by occupants of more than one dwelling unit. Such an 
area may include, but is not limited to, hallways, stairways, laundry 
and recreational rooms, playgrounds, community centers, on-site day care 
facilities, garages and boundary fences.
    Component means an architectural element of a dwelling unit or 
common area identified by type and location, such as a bedroom wall, an 
exterior window sill, a baseboard in a living room, a kitchen floor, an 
interior window sill in a bathroom, a porch floor, stair treads in a 
common stairwell, or an exterior wall.
    Composite sample means a collection of more than one sample of the 
same medium (e.g., dust, soil or paint) from the same type of surface 
(e.g., floor, interior window sill, or window trough), such that 
multiple samples can be analyzed as a single sample.
    Containment means the physical measures taken to ensure that dust 
and debris created or released during lead-based paint hazard reduction 
are not spread, blown or tracked from inside to outside of the worksite.
    Designated party means a Federal agency, grantee, subrecipient, 
participating jurisdiction, housing agency, Indian Tribe, tribally 
designated housing entity (TDHE), sponsor, or property owner responsible 
for complying with applicable requirements.
    Deteriorated paint means any interior or exterior paint or other 
coating that is peeling, chipping, chalking or cracking, or any paint or 
coating located on an interior or exterior surface or fixture that is 
otherwise damaged or separated from the substrate.
    Dry sanding means sanding without moisture and includes both hand 
and machine sanding.
    Dust-lead hazard means surface dust that contains a dust-lead 
loading (area concentration of lead) equal to or exceeding the levels 
promulgated by the EPA at 40 CFR 745.65 or, if such levels are not in 
effect, the standards for dust-lead hazards in Sec.  35.1320.
    Dwelling unit means a:
    (1) Single-family dwelling, including attached structures such as 
porches and stoops; or
    (2) Housing unit in a structure that contains more than 1 separate 
housing unit, and in which each such unit is used or occupied, or 
intended to be used or occupied, in whole or in part, as the home or 
separate living quarters of 1 or more persons.
    Elevated blood lead level means a confirmed concentration of lead in 
whole blood of a child under age 6 equal to or greater than the 
concentration in the most recent guidance published by the U.S. 
Department of Health and Human Services (HHS) on recommending that an 
environmental intervention be conducted. (When HHS changes the value, 
HUD will publish a notice in the Federal Register, with the opportunity 
for public comment, on its intent to apply the changed value to this 
part, and, after considering comments, publish a notice on its applying 
the changed value to this part.)
    Encapsulation means the application of a covering or coating that 
acts as a barrier between the lead-based paint and the environment and 
that relies for its durability on adhesion between the encapsulant and 
the painted surface, and on the integrity of the existing bonds between 
paint layers and between the paint and the substrate. Encapsulation may 
be used as a method of abatement if it is designed and performed so as 
to be permanent (see definition of ``permanent'').
    Enclosure means the use of rigid, durable construction materials 
that are mechanically fastened to the substrate in order to act as a 
barrier between lead-based paint and the environment. Enclosure may be 
used as a method of abatement if it is designed to be permanent (see 
definition of ``permanent'').
    Environmental investigation means the process of determining the 
source of lead exposure for a child under age 6 with an elevated blood 
lead level, consisting of administration of a questionnaire, 
comprehensive environmental sampling, case management, and other 
measures, in accordance with chapter 16 of the HUD Guidelines for the 
Evaluation and Control of Lead-Based

[[Page 293]]

Paint Hazards in Housing (``Guidelines'').
    Evaluation means a risk assessment, a lead hazard screen, a lead-
based paint inspection, paint testing, or a combination of these to 
determine the presence of lead-based paint hazards or lead-based paint, 
or an environmental investigation.
    Expected to reside means there is actual knowledge that a child will 
reside in a dwelling unit reserved or designated exclusively for the 
elderly or reserved or designated exclusively for persons with 
disabilities. If a resident woman is known to be pregnant, there is 
actual knowledge that a child will reside in the dwelling unit.
    Federal agency means the United States or any executive department, 
independent establishment, administrative agency and instrumentality of 
the United States, including a corporation in which all or a substantial 
amount of the stock is beneficially owned by the United States or by any 
of these entities. The term ``Federal agency'' includes, but is not 
limited to, Rural Housing Service (formerly Rural Housing and Community 
Development Service that was formerly Farmer's Home Administration), 
Resolution Trust Corporation, General Services Administration, 
Department of Defense, Department of Veterans Affairs, Department of the 
Interior, and Department of Transportation.
    Federally owned property means residential property owned or managed 
by a Federal agency, or for which a Federal agency is a trustee or 
conservator.
    Firm commitment means a valid commitment issued by HUD or the 
Federal Housing Commissioner setting forth the terms and conditions upon 
which a mortgage will be insured or guaranteed.
    Friction surface means an interior or exterior surface that is 
subject to abrasion or friction, including, but not limited to, certain 
window, floor, and stair surfaces.
    g means gram, mg means milligram (thousandth of a gram), and 
[micro]g means microgram (millionth of a gram).
    Grantee means any state or local government, Indian Tribe, IHBG 
recipient, insular area or nonprofit organization that has been 
designated by HUD to administer Federal housing assistance under a 
program covered by subparts J and K of this part, except the HOME 
program.
    Hard costs of rehabilitation means:
    (1) Costs to correct substandard conditions or to meet applicable 
local rehabilitation standards;
    (2) Costs to make essential improvements, including energy-related 
repairs, and those necessary to permit use by persons with disabilities; 
and costs to repair or replace major housing systems in danger of 
failure; and
    (3) Costs of non-essential improvements, including additions and 
alterations to an existing structure; but
    (4) Hard costs do not include administrative costs (e.g., overhead 
for administering a rehabilitation program, processing fees, etc.).
    Hazard reduction means measures designed to reduce or eliminate 
human exposure to lead-based paint hazards through methods including 
interim controls or abatement or a combination of the two.
    HEPA vacuum means a vacuum cleaner device with an included high-
efficiency particulate air (HEPA) filter through which the contaminated 
air flows, operated in accordance with the instructions of its 
manufacturer. A HEPA filter is one that captures at least 99.97 percent 
of airborne particles of at least 0.3 micrometers in diameter.
    Housing for the elderly means retirement communities or similar 
types of housing reserved for households composed of one or more persons 
62 years of age or more, or other age if recognized as elderly by a 
specific Federal housing assistance program.
    Housing receiving Federal assistance means housing which is covered 
by an application for HUD mortgage insurance, receives housing 
assistance payments under a program administered by HUD, or otherwise 
receives more than $5,000 in project-based assistance under a Federal 
housing program administered by an agency other than HUD.
    HUD means the United States Department of Housing and Urban 
Development.
    HUD-owned property means residential property owned or managed by

[[Page 294]]

HUD, or for which HUD is a trustee or conservator.
    Impact surface means an interior or exterior surface that is subject 
to damage by repeated sudden force, such as certain parts of door 
frames.
    Indian Housing Block Grant (IHBG) recipient means a tribe or a 
tribally designated housing entity (TDHE) receiving IHBG funds.
    Indian tribe means a tribe as defined in the Native American Housing 
Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 et seq.)
    Inspection (See Lead-based paint inspection).
    Insular areas means Guam, the Northern Mariana Islands, the United 
States Virgin Islands and American Samoa.
    Interim controls means a set of measures designed to reduce 
temporarily human exposure or likely exposure to lead-based paint 
hazards. Interim controls include, but are not limited to, repairs, 
painting, temporary containment, specialized cleaning, clearance, 
ongoing lead-based paint maintenance activities, and the establishment 
and operation of management and resident education programs.
    Interior window sill means the portion of the horizontal window 
ledge that protrudes into the interior of the room, adjacent to the 
window sash when the window is closed. The interior window sill is 
sometimes referred to as the window stool.
    Lead-based paint means paint or other surface coatings that contain 
lead equal to or exceeding 1.0 milligram per square centimeter or 0.5 
percent by weight or 5,000 parts per million (ppm) by weight.
    Lead-based paint hazard means any condition that causes exposure to 
lead from dust-lead hazards, soil-lead hazards, or lead-based paint that 
is deteriorated or present in chewable surfaces, friction surfaces, or 
impact surfaces, and that would result in adverse human health effects.
    Lead-based paint inspection means a surface-by-surface investigation 
to determine the presence of lead-based paint and the provision of a 
report explaining the results of the investigation.
    Lead hazard screen means a limited risk assessment activity that 
involves paint testing and dust sampling and analysis as described in 40 
CFR 745.227(c) and soil sampling and analysis as described in 40 CFR 
745.227(d).
    Mortgagee means a lender of a mortgage loan.
    Mortgagor means a borrower of a mortgage loan.
    Multifamily property means a residential property containing five or 
more dwelling units.
    Occupant means a person who inhabits a dwelling unit.
    Owner means a person, firm, corporation, nonprofit organization, 
partnership, government, guardian, conservator, receiver, trustee, 
executor, or other judicial officer, or other entity which, alone or 
with others, owns, holds, or controls the freehold or leasehold title or 
part of the title to property, with or without actually possessing it. 
The definition includes a vendee who possesses the title, but does not 
include a mortgagee or an owner of a reversionary interest under a 
ground rent lease.
    Paint stabilization means repairing any physical defect in the 
substrate of a painted surface that is causing paint deterioration, 
removing loose paint and other material from the surface to be treated, 
and applying a new protective coating or paint.
    Paint testing means the process of determining, by a certified lead-
based paint inspector or risk assessor, the presence or the absence of 
lead-based paint on deteriorated paint surfaces or painted surfaces to 
be disturbed or replaced.
    Paint removal means a method of abatement that permanently 
eliminates lead-based paint from surfaces.
    Painted surface to be disturbed means a paint surface that is to be 
scraped, sanded, cut, penetrated or otherwise affected by rehabilitation 
work in a manner that could potentially create a lead-based paint hazard 
by generating dust, fumes, or paint chips.
    Participating jurisdiction means any State or local government that 
has been designated by HUD to administer a HOME program grant.
    Permanent means an expected design life of at least 20 years.
    Play area means an area of frequent soil contact by children of less 
than 6

[[Page 295]]

years of age, as indicated by the presence of play equipment (e.g. 
sandboxes, swing sets, sliding boards, etc.) or toys or other children's 
possessions, observations of play patterns, or information provided by 
parents, residents or property owners.
    Project-based rental assistance means Federal rental assistance that 
is tied to a residential property with a specific location and remains 
with that particular location throughout the term of the assistance.
    Public health department means a State, tribal, county or municipal 
public health department or the Indian Health Service.
    Public housing development means a residential property assisted 
under the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.), 
but not including housing assisted under section 8 of the 1937 Act.
    Reevaluation means a visual assessment of painted surfaces and 
limited dust and soil sampling conducted periodically following lead-
based paint hazard reduction where lead-based paint is still present.
    Rehabilitation means the improvement of an existing structure 
through alterations, incidental additions or enhancements. 
Rehabilitation includes repairs necessary to correct the results of 
deferred maintenance, the replacement of principal fixtures and 
components, improvements to increase the efficient use of energy, and 
installation of security devices.
    Replacement means a strategy of abatement that entails the removal 
of building components that have surfaces coated with lead-based paint 
and the installation of new components free of lead-based paint.
    Residential property means a dwelling unit, common areas, building 
exterior surfaces, and any surrounding land, including outbuildings, 
fences and play equipment affixed to the land, belonging to an owner and 
available for use by residents, but not including land used for 
agricultural, commercial, industrial or other non-residential purposes, 
and not including paint on the pavement of parking lots, garages, or 
roadways.
    Risk assessment means:
    (1) An on-site investigation to determine the existence, nature, 
severity, and location of lead-based paint hazards; and
    (2) The provision of a report by the individual or firm conducting 
the risk assessment explaining the results of the investigation and 
options for reducing lead-based paint hazards.
    Single family property means a residential property containing one 
through four dwelling units.
    Single room occupancy (SRO) housing means housing consisting of 
zero-bedroom dwelling units that may contain food preparation or 
sanitary facilities or both (see Zero-bedroom dwelling).
    Soil-lead hazard means bare soil on residential property that 
contains lead equal to or exceeding levels promulgated by the EPA at 40 
CFR 745.65 or, if such levels are not in effect, the standards for soil-
lead hazards in Sec.  35.1320.
    Sponsor means mortgagor (borrower).
    Subrecipient means any nonprofit organization selected by the 
grantee or participating jurisdiction to administer all or a portion of 
the Federal rehabilitation assistance or other non-rehabilitation 
assistance, or any such organization selected by a subrecipient of the 
grantee or participating jurisdiction. An owner or developer receiving 
Federal rehabilitation assistance or other assistance for a residential 
property is not considered a subrecipient for the purposes of carrying 
out that project.
    Standard treatments means a series of hazard reduction measures 
designed to reduce all lead-based paint hazards in a dwelling unit 
without the benefit of a risk assessment or other evaluation.
    Substrate means the material directly beneath the painted surface 
out of which the components are constructed, including wood, drywall, 
plaster, concrete, brick or metal.
    Target housing means any housing constructed prior to 1978, except 
housing for the elderly or persons with disabilities (unless a child of 
less than 6 years of age resides or is expected to reside in such 
housing for the elderly or persons with disabilities) or any zero-
bedroom dwelling. In the case of jurisdictions which banned the sale or

[[Page 296]]

use of lead-based paint prior to 1978, HUD may designate an earlier 
date.
    Tenant means the individual named as the lessee in a lease, rental 
agreement or occupancy agreement for a dwelling unit.
    A visual assessment alone is not considered an evaluation for the 
purposes of this part. Visual assessment means looking for, as 
applicable:
    (1) Deteriorated paint;
    (2) Visible surface dust, debris, and residue as part of a risk 
assessment or clearance examination; or
    (3) The completion or failure of a hazard reduction measure.
    Wet sanding or wet scraping means a process of removing loose paint 
in which the painted surface to be sanded or scraped is kept wet to 
minimize the dispersal of paint chips and airborne dust.
    Window trough means the area between the interior window sill 
(stool) and the storm window frame. If there is no storm window, the 
window trough is the area that receives both the upper and lower window 
sashes when they are both lowered.
    Worksite means an interior or exterior area where lead-based paint 
hazard reduction activity takes place. There may be more than one 
worksite in a dwelling unit or at a residential property.
    Zero-bedroom dwelling means any residential dwelling in which the 
living areas are not separated from the sleeping area. The term includes 
efficiencies, studio apartments, dormitory or single room occupancy 
housing, military barracks, and rentals of individual rooms in 
residential dwellings (see Single room occupancy (SRO)).

[64 FR 50202, Sept. 15, 1999, as amended at 69 FR 34271, June 21, 2004; 
69 FR 40474, July 2, 2004; 82 FR 4166, Jan. 13, 2017]



Sec.  35.115  Exemptions.

    (a) Subparts B through R of this part do not apply to the following:
    (1) A residential property for which construction was completed on 
or after January 1, 1978, or, in the case of jurisdictions which banned 
the sale or residential use of lead-containing paint prior to 1978, an 
earlier date as HUD may designate (see Sec.  35.160).
    (2) A zero-bedroom dwelling unit, including a single room occupancy 
(SRO) dwelling unit.
    (3) Housing for the elderly, or a residential property designated 
exclusively for persons with disabilities; except this exemption shall 
not apply if a child less than age 6 resides or is expected to reside in 
the dwelling unit (see definitions of ``housing for the elderly'' and 
``expected to reside'' in Sec.  35.110).
    (4) Residential property found not to have lead-based paint by a 
lead-based paint inspection conducted in accordance with Sec.  
35.1320(a) (for more information regarding inspection procedures consult 
the 1997 edition of Chapter 7 of the HUD Guidelines). Results of 
additional test(s) by a certified lead-based paint inspector may be used 
to confirm or refute a prior finding.
    (5) Residential property in which all lead-based paint has been 
identified, removed, and clearance has been achieved in accordance with 
40 CFR 745.227(b)(e) before September 15, 2000, or in accordance with 
Sec. Sec.  35.1320, 35.1325 and 35.1340 on or after September 15, 2000. 
This exemption does not apply to residential property where enclosure or 
encapsulation has been used as a method of abatement.
    (6) An unoccupied dwelling unit or residential property that is to 
be demolished, provided the dwelling unit or property will remain 
unoccupied until demolition.
    (7) A property or part of a property that is not used and will not 
be used for human residential habitation, except that spaces such as 
entryways, hallways, corridors, passageways or stairways serving both 
residential and nonresidential uses in a mixed-use property shall not be 
exempt.
    (8) Any rehabilitation that does not disturb a painted surface.
    (9) For emergency actions immediately necessary to safeguard against 
imminent danger to human life, health or safety, or to protect property 
from further structural damage (such as when a property has been damaged 
by a natural disaster, fire, or structural collapse), occupants shall be 
protected from exposure to lead in dust and debris generated by such 
emergency actions to the extent practicable, and the

[[Page 297]]

requirements of subparts B through R of this part shall not apply. This 
exemption applies only to repairs necessary to respond to the emergency. 
The requirements of subparts B through R of this part shall apply to any 
work undertaken subsequent to, or above and beyond, such emergency 
actions.
    (10) If a Federal law enforcement agency has seized a residential 
property and owns the property for less than 270 days, Sec. Sec.  35.210 
and 35.215 shall not apply to the property.
    (11) The requirements of subpart K of this part do not apply if the 
assistance being provided is emergency rental assistance or foreclosure 
prevention assistance, provided that this exemption shall expire for a 
dwelling unit no later than 100 days after the initial payment or 
assistance.
    (12) Performance of an evaluation or lead-based paint hazard 
reduction or lead-based paint abatement on an exterior painted surface 
as required under this part may be delayed for a reasonable time during 
a period when weather conditions are unsuitable for conventional 
construction activities.
    (13) Where abatement of lead-based paint hazards or lead-based paint 
is required by this part and the property is listed or has been 
determined to be eligible for listing in the National Register of 
Historic Places or contributing to a National Register Historic 
District, the designated party may, if requested by the State Historic 
Preservation Office, conduct interim controls in accordance with Sec.  
35.1330 instead of abatement. If interim controls are conducted, ongoing 
lead-based paint maintenance and reevaluation shall be conducted as 
required by the applicable subpart of this part in accordance with Sec.  
35.1355.
    (b) For the purposes of subpart C of this part, each Federal agency 
other than HUD will determine whether appropriations are sufficient to 
implement this rule. If appropriations are not sufficient, subpart C of 
this part shall not apply to that Federal agency. If appropriations are 
sufficient, subpart C of this part shall apply.



Sec.  35.120  Options.

    (a) Standard treatments. Where interim controls are required by this 
part, the designated party has the option to presume that lead-based 
paint or lead-based paint hazards or both are present throughout the 
residential property. In such a case, evaluation is not required. 
Standard treatments shall then be conducted in accordance with Sec.  
35.1335 on all applicable surfaces, including soil. Standard treatments 
are completed only when clearance is achieved in accordance with Sec.  
35.1340.
    (b) Abatement. Where abatement is required by this part, the 
designated party may presume that lead-based paint or lead-based paint 
hazards or both are present throughout the residential property. In such 
a case, evaluation is not required. Abatement shall then be conducted on 
all applicable surfaces, including soil, in accordance with Sec.  
35.1325, and completed when clearance is achieved in accordance with 
Sec.  35.1340. This option is not available in public housing, where 
inspection is required.
    (c) Lead hazard screen. Where a risk assessment is required, the 
designated party may choose first to conduct a lead hazard screen in 
accordance with Sec.  35.1320(b). If the results of the lead hazard 
screen indicate the need for a full risk assessment (e.g., if the 
environmental measurements exceed levels established for lead hazard 
screens in Sec.  35.1320(b)(2)), a complete risk assessment shall be 
conducted. Environmental samples collected for the lead hazard screen 
may be used in the risk assessment. If the results of the lead hazard 
screen do not indicate the need for a follow-up risk assessment, a risk 
assessment is not required.
    (d) Paint testing. Where paint stabilization or interim controls of 
deteriorated paint surfaces are required by this rule, the designated 
party has the option to conduct paint testing of all surfaces with non-
intact paint. If paint testing indicates the absence of lead-based paint 
on a specific surface, paint stabilization or interim controls are not 
required on that surface.

[[Page 298]]



Sec.  35.125  Notice of evaluation and hazard reduction activities.

    The following activities shall be conducted if notice is required by 
subparts D and F through M of this part.
    (a) Notice of evaluation or presumption. When evaluation is 
undertaken and lead-based paint or lead-based paint hazards are found to 
be present, or if a presumption is made that lead-based paint or lead-
based paint hazards are present in accordance with the options described 
in Sec.  35.120, the designated party shall provide a notice to 
occupants within 15 calendar days of the date when the designated party 
receives the report or makes the presumption. A visual assessment alone 
is not considered an evaluation for the purposes of this part. If only a 
visual assessment alone is required by this part, and no evaluation is 
performed, a notice of evaluation or presumption is not required.
    (1) The notice of the evaluation shall include:
    (i) A summary of the nature, dates, scope, and results of the 
evaluation;
    (ii) A contact name, address and telephone number for more 
information, and to obtain access to the actual evaluation report; and
    (iii) The date of the notice.
    (2) The notice of presumption shall include:
    (i) The nature and scope of the presumption;
    (ii) A contact name, address and telephone number for more 
information; and
    (iii) The date of the notice.
    (b) Notice of hazard reduction activity. When hazard reduction 
activities are undertaken, each designated party shall:
    (1) Provide a notice to occupants not more than 15 calendar days 
after the hazard reduction activities (including paint stabilization) 
have been completed. Notice of hazard reduction shall include, but not 
be limited to:
    (i) A summary of the nature, dates, scope, and results (including 
clearance) of the hazard reduction activities;
    (ii) A contact name, address, and telephone number for more 
information;
    (iii) Available information on the location of any remaining lead-
based paint in the rooms, spaces, or areas where hazard reduction 
activities were conducted, on a surface-by-surface basis; and
    (iv) The date of the notice.
    (2) Update the notice, based on reevaluation of the residential 
property and as any additional hazard reduction work is conducted.
    (3) Provision of a notice of hazard reduction is not required if a 
clearance examination is not required.
    (c) Availability of notices of evaluation, presumption, and hazard 
reduction activities. (1) The notices of evaluation, presumption, and 
hazard reduction shall be of a size and type that is easily read by 
occupants.
    (2) To the extent practicable, each notice shall be made available, 
upon request, in a format accessible to persons with disabilities (e.g., 
Braille, large type, computer disk, audio tape).
    (3) Each notice shall be provided in the occupants' primary language 
or in the language of the occupants' contract or lease.
    (4) The designated party shall provide each notice to the occupants 
by:
    (i) Posting and maintaining it in centrally located common areas and 
distributing it to any dwelling unit if necessary because the head of 
household is a person with a known disability; or
    (ii) Distributing it to each occupied dwelling unit affected by the 
evaluation, presumption, or hazard reduction activity or serviced by 
common areas in which an evaluation, presumption or hazard reduction has 
taken place.
    (iii) However, for the protection of the privacy of the child and 
the child's family or guardians, no notice of environmental 
investigation shall be posted to any centrally located common area.

[64 FR 50202, Sept. 15, 1999, as amended at 69 FR 34271, June 21, 2004; 
82 FR 4167, Jan. 13, 2017]



Sec.  35.130  Lead hazard information pamphlet.

    If provision of a lead hazard information pamphlet is required in 
subparts D and F through M of this part, the designated party shall 
provide to each occupied dwelling unit to which subparts D and F through 
M of this part apply, the lead hazard information pamphlet

[[Page 299]]

developed by EPA, HUD and the Consumer Product Safety Commission 
pursuant to section 406 of the Toxic Substances Control Act (15 U.S.C. 
2686), or an EPA-approved alternative; except that the designated party 
need not provide a lead hazard information pamphlet if the designated 
party can demonstrate that the pamphlet has already been provided in 
accordance with the lead-based paint notification and disclosure 
requirements at Sec.  35.88(a)(1), or 40 CFR 745.107(a)(1) or in 
accordance with the requirements for hazard education before renovation 
at 40 CFR part 745, subpart E.



Sec.  35.135  Use of paint containing lead.

    (a) New use prohibition. The use of paint containing more than 0.06 
percent dry weight of lead on any interior or exterior surface in 
federally owned housing or housing receiving Federal assistance is 
prohibited. As appropriate, each Federal agency shall include the 
prohibition in contracts, grants, cooperative agreements, insurance 
agreements, guaranty agreements, trust agreements, or other similar 
documents.
    (b) Pre-1978 prohibition. In the case of a jurisdiction which banned 
the sale or residential use of lead-containing paint before 1978, HUD 
may designate an earlier date for certain provisions of subparts D and F 
through M of this part.



Sec.  35.140  Prohibited methods of paint removal.

    The following methods shall not be used to remove paint that is, or 
may be, lead-based paint:
    (a) Open flame burning or torching.
    (b) Machine sanding or grinding without a high-efficiency 
particulate air (HEPA) local exhaust control.
    (c) Abrasive blasting or sandblasting without HEPA local exhaust 
control.
    (d) Heat guns operating above 1100 degrees Fahrenheit or charring 
the paint.
    (e) Dry sanding or dry scraping, except dry scraping in conjunction 
with heat guns or within 1.0 ft. (0.30 m.) of electrical outlets, or 
when treating defective paint spots totaling no more than 2 sq. ft. (0.2 
sq. m.) in any one interior room or space, or totaling no more than 20 
sq. ft. (2.0 sq. m.) on exterior surfaces.
    (f) Paint stripping in a poorly ventilated space using a volatile 
stripper that is a hazardous substance in accordance with regulations of 
the Consumer Product Safety Commission at 16 CFR 1500.3, and/or a 
hazardous chemical in accordance with the Occupational Safety and Health 
Administration regulations at 29 CFR 1910.1200 or 1926.59, as applicable 
to the work.



Sec.  35.145  Compliance with Federal laws and authorities.

    All lead-based paint activities, including waste disposal, performed 
under this part shall be performed in accordance with applicable Federal 
laws and authorities. For example, such activities are subject to the 
applicable environmental review requirements of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), the Toxic 
Substances Control Act, Title IV (15 U.S.C. 2860 et seq.), and other 
environmental laws and authorities (see, e.g., laws and authorities 
listed in Sec.  50.4 of this title).



Sec.  35.150  Compliance with other State, tribal, and local laws.

    (a) HUD responsibility. If HUD determines that a State, tribal or 
local law, ordinance, code or regulation provides for evaluation or 
hazard reduction in a manner that provides a comparable level of 
protection from the hazards of lead-based paint poisoning to that 
provided by the requirements of subparts B, C, D, F through M and R of 
this part and that adherence to the requirements of subparts B, C, D, F 
through M, and R of this part, would be duplicative or otherwise cause 
inefficiencies, HUD may modify or waive some or all of the requirements 
of the subparts in a manner that will promote efficiency while ensuring 
a comparable level of protection.
    (b) Participant responsibility. Nothing in this part is intended to 
relieve any participant in a program covered by this subpart of any 
responsibility for compliance with State, tribal or local laws, 
ordinances, codes or regulations governing evaluation and hazard 
reduction. If a State, tribal or local law, ordinance, code or 
regulation defines

[[Page 300]]

lead-based paint differently than the Federal definition, the more 
protective definition (i.e., the lower level) shall be followed in that 
State, tribal or local jurisdiction.



Sec.  35.155  Minimum requirements.

    (a) Nothing in subparts B, C, D, F through M, and R of this part is 
intended to preclude a designated party or owner from conducting 
additional evaluation or hazard reduction measures beyond the minimum 
requirements established for each program in this regulation. For 
example, if the applicable subpart requires visual assessment, the 
designated party may choose to perform a risk assessment in accordance 
with Sec.  35.1320. Similarly, if the applicable subpart requires 
interim controls, a designated party or owner may choose to implement 
abatement in accordance with Sec.  35.1325.
    (b) To the extent that assistance from any of the programs covered 
by subparts B, C, D, and F through M of this part is used in conjunction 
with other HUD program assistance, the most protective requirements 
prevail.

[64 FR 50202, Sept. 15, 1999, as amended at 82 FR 4167, Jan. 13, 2017]



Sec.  35.160  Waivers.

    In accordance with Sec.  5.110 of this title, on a case-by-case 
basis and upon determination of good cause, HUD may, subject to 
statutory limitations, waive any provision of subparts B, C, D, F 
through M, and R of this part.



Sec.  35.165  Prior evaluation or hazard reduction.

    If an evaluation or hazard reduction was conducted at a residential 
property or dwelling unit before the property or dwelling unit became 
subject to the requirements of subparts B, C, D, F through M, and R of 
this part, such an evaluation, hazard reduction or abatement meets the 
requirements of subparts B, C, D, F through M, and R of this part and 
need not be repeated under the following conditions:
    (a) Lead-based paint inspection. (1) A lead-based paint inspection 
conducted before March 1, 2000, meets the requirements of this part if:
    (i) At the time of the inspection the lead-based paint inspector was 
approved by a State or Indian tribe to perform lead-based paint 
inspections. It is not necessary that the State or tribal approval 
program had EPA authorization at the time of the inspection.
    (ii) Notwithstanding paragraph (a)(1)(i) of this section, the 
inspection was conducted and accepted as valid by a housing agency in 
fulfillment of the lead-based paint inspection requirement of the public 
and Indian housing program.
    (2) A lead-based paint inspection conducted on or after March 1, 
2000, must have been conducted by a certified lead-based paint 
inspector.
    (b) Risk assessment. (1) A risk assessment must be no more than 12 
months old to be considered current.
    (2) A risk assessment conducted before March 1, 2000, meets the 
requirements of this part if, at the time of the risk assessment, the 
risk assessor was approved by a state or Indian Tribe to perform risk 
assessments. It is not necessary that the state or tribal approval 
program had EPA authorization at the time of the risk assessment.
    (3) A risk assessment conducted on or after March 1, 2000, must have 
been conducted by a certified risk assessor.
    (4) Paragraph (b) of this section does not apply in a case where a 
risk assessment is required in response to the identification of a child 
with an elevated blood lead level. In such a case, the requirements in 
the applicable subpart for responding to a child with an elevated blood 
lead level shall apply.
    (c) Interim controls. If a residential property is under a program 
of interim controls and ongoing lead-based paint maintenance and 
reevaluation activities established pursuant to a risk assessment 
conducted in accordance with paragraph (b) of this section, the interim 
controls that have been conducted meet the requirements of this part if 
clearance was achieved after such controls were implemented. In such a 
case, the program of interim controls and ongoing activities shall be 
continued in accordance with the requirements of this part.
    (d) Abatement. (1) An abatement conducted before March 1, 2000, 
meets the requirements of this part if:

[[Page 301]]

    (i) At the time of the abatement the abatement supervisor was 
approved by a State or Indian tribe to perform lead-based paint 
abatement. It is not necessary that the State or tribal approval program 
had EPA authorization at the time of the abatement.
    (ii) Notwithstanding paragraph (d)(1)(i) of this section, it was 
conducted and accepted by a housing agency in fulfillment of the lead-
based paint abatement requirement of the public housing program or by an 
Indian housing authority (as formerly defined under the U.S. Housing Act 
of 1937) in fulfillment of the lead-based paint requirement of the 
Indian housing program formerly funded under the U.S. Housing Act of 
1937.
    (2) An abatement conducted on or after March 1, 2000, must have been 
conducted under the supervision of a certified lead-based paint 
abatement supervisor.

[64 FR 50202, Sept. 15, 1999; 65 FR 3387, Jan. 21, 2000, as amended at 
69 FR 34272, June 21, 2004; 82 FR 4167, Jan. 13, 2017]



Sec.  35.170  Noncompliance with the requirements of subparts B 
through R of this part.

    (a) Monitoring and enforcement. A designated party who fails to 
comply with any requirement of subparts B, C, D, F through M, and R of 
this part shall be subject to the sanctions available under the relevant 
Federal housing assistance or ownership program and may be subject to 
other penalties authorized by law.
    (b) A property owner who informs a potential purchaser or occupant 
of lead-based paint or possible lead-based paint hazards in a 
residential property or dwelling unit, in accordance with subpart A of 
this part, is not relieved of the requirements to evaluate and reduce 
lead-based paint hazards in accordance with subparts B through R of this 
part as applicable.



Sec.  35.175  Records.

    The designated party, as specified in subparts C, D, and F through M 
of this part, shall keep a copy of each notice, evaluation, and 
clearance or abatement report required by subparts C, D, and F through M 
of this part for at least three years. Those records applicable to a 
portion of a residential property for which ongoing lead-based paint 
maintenance and/or reevaluation activities are required shall be kept 
and made available for the Department's review, until at least three 
years after such activities are no longer required.



Subpart C_Disposition of Residential Property Owned by a Federal Agency 
                             Other Than HUD

    Source: 64 FR 50208, Sept. 15, 1999, unless otherwise noted.



Sec.  35.200  Purpose and applicability.

    The purpose of this subpart C is to establish procedures to 
eliminate as far as practicable lead-based paint hazards prior to the 
sale of a residential property that is owned by a Federal agency other 
than HUD. The requirements of this subpart apply to any residential 
property offered for sale on or after September 15, 2000.



Sec.  35.205  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.



Sec.  35.210  Disposition of residential property constructed before 1960.

    (a) Evaluation. The Federal agency shall conduct a risk assessment 
and a lead-based paint inspection in accordance with 40 CFR 745.227 
before the closing of the sale.
    (b) Abatement of lead-based paint hazards. The risk assessment used 
for the identification of hazards to be abated shall have been performed 
no more than 12 months before the beginning of the abatement. The 
Federal agency shall abate all identified lead-based paint hazards in 
accordance with 40 CFR 745.227. Abatement is completed when clearance is 
achieved in accordance with 40 CFR 745.227. Where abatement of lead-
based paint hazards is not completed before the closing of the sale, the 
Federal agency shall be responsible for assuring that abatement is 
carried out by the purchaser before occupancy of the property as target 
housing and in accordance with 40 CFR 745.227.

[[Page 302]]



Sec.  35.215  Disposition of residential property constructed after
1959 and before 1978.

    The Federal agency shall conduct a risk assessment and a lead-based 
paint inspection in accordance with 40 CFR 745.227. Evaluation shall be 
completed before closing of the sale according to a schedule determined 
by the Federal agency. The results of the risk assessment and lead-based 
paint inspection shall be made available to prospective purchasers as 
required in subpart A of this part.



 Subpart D_Project-Based Assistance Provided by a Federal Agency Other 
                                Than HUD

    Source: 64 FR 50209, Sept. 15, 1999, unless otherwise noted.



Sec.  35.300  Purpose and applicability.

    The purpose of this subpart D is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in a 
residential property that receives more than $5,000 annually per project 
in project-based assistance on or after September 15, 2000, under a 
program administered by a Federal agency other than HUD.



Sec.  35.305  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.



Sec.  35.310  Notices and pamphlet.

    (a) Notice. A notice of evaluation or hazard reduction shall be 
provided to the occupants in accordance with Sec.  35.125.
    (b) Lead hazard information pamphlet. The owner shall provide the 
lead hazard information pamphlet in accordance with Sec.  35.130.



Sec.  35.315  Risk assessment.

    Each owner shall complete a risk assessment in accordance with 40 
CFR 745.227(d). Each risk assessment shall be completed in accordance 
with the schedule established by the Federal agency.



Sec.  35.320  Hazard reduction.

    Each owner shall conduct interim controls consistent with the 
findings of the risk assessment report. Hazard reduction shall be 
conducted in accordance with subpart R of this part.



Sec.  35.325  Child with an elevated blood lead level.

    (a) If a child less than 6 years of age living in a federally 
assisted dwelling unit has an elevated blood lead level, the owner shall 
immediately conduct an environmental investigation. Interim controls of 
identified lead-based paint hazards shall be conducted in accordance 
with Sec.  35.1330.
    (b) Other assisted dwelling units in the property. (1) If the 
environmental investigation conducted under paragraph (a) of this 
section identifies lead-based paint hazards, the owner shall conduct a 
risk assessment for other assisted dwelling units covered by this 
subpart in which a child under age 6 resides or is expected to reside on 
the date interim controls are complete, and for the common areas 
servicing those units. The risk assessments shall be conducted within 30 
calendar days after receipt of the environmental investigation report on 
the index unit if there are 20 or fewer such units, or 60 calendar days 
for risk assessments if there are more than 20 such units. If the risk 
assessment identifies lead-based paint hazards, the owner shall control 
identified hazards in accordance with Sec.  35.1325 or Sec.  35.1330 in 
those units and common areas within 30 calendar days, or within 90 
calendar days if more than 20 units have lead-based paint hazards such 
that the control work would disturb painted surfaces that total more 
than the de minimis threshold of Sec.  35.1350(d).
    (2) The requirements for other assisted dwelling units covered by 
paragraph (b)(1) of this section do not apply if:
    (i) The owner both conducted a risk assessment of the other assisted 
dwelling units covered by paragraph (b)(1), and the common areas 
servicing those units, and conducted reduction of identified lead-based 
paint hazards in accordance with Sec.  35.1325 or Sec.  35.1330 between 
the date the child's blood was

[[Page 303]]

last sampled and the date the owner received the notification of the 
elevated blood lead level; or
    (ii) The owner provides the Federal agency documentation of 
compliance with evaluation, notification, lead disclosure, ongoing lead-
based paint maintenance, and lead-based paint management requirements 
under this part throughout the 12 months preceding the date the owner 
received the environmental investigation report.
    (c) Interim controls are complete when clearance is achieved in 
accordance with Sec.  35.1340.
    (d) The Federal agency shall establish a timetable for completing, 
and providing documentation to the agency on the environmental 
investigation, risk assessments, and lead-based paint hazard reduction 
when a child is identified as having an elevated blood lead level.

[82 FR 4167, Jan. 13, 2017]

Subpart E [Reserved]



               Subpart F_HUD-Owned Single Family Property

    Source: 64 FR 50209, Sept. 15, 1999, unless otherwise noted.



Sec.  35.500  Purpose and applicability.

    The purpose of this subpart F is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in HUD-owned 
single family properties that have been built before 1978 and are sold 
with mortgages insured under a program administered by HUD. The 
requirements of this subpart apply to any such residential properties 
offered for sale on or after September 15, 2000.



Sec.  35.505  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.



Sec.  35.510  Required procedures.

    (a) The following activities shall be conducted for all properties 
to which this subpart is applicable:
    (1) A visual assessment of all painted surfaces in order to identify 
deteriorated paint;
    (2) Paint stabilization of all deteriorated paint in accordance with 
Sec.  35.1330(a) and (b); and
    (3) Clearance in accordance with Sec.  35.1340.
    (b) Occupancy shall not be permitted until all required paint 
stabilization is complete and clearance is achieved.
    (c) If paint stabilization and clearance are not completed before 
the closing of the sale, the Department shall assure that paint 
stabilization and clearance are carried out pursuant to subpart R of 
this part by the purchaser before occupancy.



                Subpart G_Multifamily Mortgage Insurance

    Source: 64 FR 50209, Sept. 15, 1999, unless otherwise noted.



Sec.  35.600  Purpose and applicability.

    The purpose of this subpart G is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in a 
multifamily residential property for which HUD is the owner of the 
mortgage or the owner receives mortgage insurance, under a program 
administered by HUD.



Sec.  35.605  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.



Sec.  35.610  Exemption.

    An application for insurance in connection with a refinancing 
transaction where an appraisal is not required under the applicable 
procedures established by HUD is excluded from the coverage of this 
subpart.



Sec.  35.615  Notices and pamphlet.

    (a) Notice. If evaluation or hazard reduction is undertaken, the 
sponsor shall provide a notice to occupants in accordance with Sec.  
35.125. A visual assessment alone is not considered an evaluation for 
the purposes of this part.

[[Page 304]]

    (b) Lead hazard information pamphlet. The sponsor shall provide the 
lead hazard information pamphlet in accordance with Sec.  35.130.

[64 FR 50209, Sept. 15, 1999, as amended at 69 FR 34272, June 21, 2004]



Sec.  35.620  Multifamily insured property constructed before 1960.

    Except as provided in Sec.  35.630, the following requirements apply 
to multifamily insured property constructed before 1960:
    (a) Risk assessment. Before the issuance of a firm commitment the 
sponsor shall conduct a risk assessment in accordance with Sec.  
35.1320(b).
    (b) Interim controls. (1) The sponsor shall conduct interim controls 
in accordance with Sec.  35.1330 to treat the lead-based paint hazards 
identified in the risk assessment. Interim controls are considered 
completed when clearance is achieved in accordance with Sec.  35.1340.
    (2) The sponsor shall complete interim controls before the issuance 
of the firm commitment or interim controls may be made a condition of 
the Federal Housing Administration (FHA) firm commitment, with 
sufficient repair or rehabilitation funds escrowed at initial 
endorsement of the FHA insured loan.
    (c) Ongoing lead-based paint maintenance activities. Before the 
issuance of the firm commitment, the sponsor shall agree to incorporate 
ongoing lead-based paint maintenance into regular building operations 
and maintenance activities in accordance with Sec.  35.1355(a).



Sec.  35.625  Multifamily insured property constructed after 1959
and before 1978.

    Except as provided in Sec.  35.630, before the issuance of the firm 
commitment, the sponsor shall agree to incorporate ongoing lead-based 
paint maintenance practices into regular building operations, in 
accordance with Sec.  35.1355(a).



Sec.  35.630  Conversions and major rehabilitations.

    The procedures and requirements of this section apply when a 
nonresidential property constructed before 1978 is to be converted to 
residential use, or a residential property constructed before 1978 is to 
undergo rehabilitation that is estimated to cost more than 50 percent of 
the estimated replacement cost after rehabilitation.
    (a) Lead-based paint inspection. Before issuance of a firm FHA 
commitment, the sponsor shall conduct a lead-based paint inspection in 
accordance with Sec.  35.1320(a).
    (b) Abatement. Prior to occupancy, the sponsor shall conduct 
abatement of all lead-based paint on the property in accordance with 
Sec.  35.1325. Whenever practicable, abatement shall be achieved through 
the methods of paint removal or component replacement. If paint removal 
or component replacement are not practicable, that is if such methods 
would damage substrate material considered architecturally significant, 
permanent encapsulation or enclosure may be used as methods of 
abatement. Abatement is considered complete when clearance is achieved 
in accordance with Sec.  35.1340. If encapsulation or enclosure is used, 
the sponsor shall incorporate ongoing lead-based paint maintenance into 
regular building operations maintenance activities in accordance with 
Sec.  35.1355.
    (c) Historic properties. Section 35.115(a)(13) applies to this 
section.



                   Subpart H_Project-Based Assistance

    Source: 64 FR 50210, Sept. 15, 1999, unless otherwise noted.



Sec.  35.700  Purpose and applicability.

    (a) This subpart H establishes procedures to eliminate as far as 
practicable lead-based paint hazards in residential properties receiving 
project-based assistance under a HUD program. The requirements of this 
subpart apply only to the assisted dwelling units in a covered property 
and any common areas servicing those dwelling units. This subpart does 
not apply to housing receiving rehabilitation assistance or to public 
housing, which are covered by subparts J and M of this part, 
respectively.

[[Page 305]]

    (b) For the purposes of competitively awarded grants under the 
Housing Opportunities for Persons with AIDS Program (HOPWA), the 
Supportive Housing Program (42 U.S.C. 11381-11389) and the Shelter Plus 
Care Program project-based rental assistance and sponsor-based rental 
assistance components (42 U.S.C. 11402-11407), the requirements of this 
subpart shall apply to grants awarded pursuant to Notices of Funding 
Availability published on or after October 1, 1999. For the purposes of 
formula grants awarded under the Housing Opportunities for Persons with 
AIDS Program (HOPWA) (42 U.S.C. 12901 et seq.), the requirements of this 
subpart shall apply to activities for which program funds are first 
obligated on or after September 15, 2000.



Sec.  35.705  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.



Sec.  35.710  Notices and pamphlet.

    (a) Notice. If evaluation or hazard reduction is undertaken, each 
owner shall provide a notice to occupants in accordance with Sec.  
35.125. A visual assessment alone is not considered an evaluation for 
the purposes of this part.
    (b) Lead hazard information pamphlet. The owner shall provide the 
lead hazard information pamphlet in accordance with Sec.  35.130.

[64 FR 50210, Sept. 15, 1999, as amended at 69 FR 34272, June 21, 2004]



Sec.  35.715  Multifamily properties receiving more than $5,000 per unit.

    The requirements of this section shall apply to a multifamily 
residential property that is receiving an average of more than $5,000 
per assisted dwelling unit annually in project-based assistance.
    (a) Risk assessment. Each owner shall complete a risk assessment in 
accordance with Sec.  35.1320(b). A risk assessment is considered 
complete when the owner receives the risk assessment report. Until the 
owner conducts a risk assessment as required by this section, the 
requirements of paragraph (d) of this section shall apply. After the 
risk assessment has been conducted the requirements of paragraphs (b) 
and (c) of this section shall apply. Each risk assessment shall be 
completed no later than the following schedule or a schedule otherwise 
determined by HUD:
    (1) Risk assessments shall be completed on or before September 17, 
2001, in a multifamily residential property constructed before 1960.
    (2) Risk assessments shall be completed on or before September 15, 
2003, in a multifamily residential property constructed after 1959 and 
before 1978.
    (b) Interim controls. Each owner shall conduct interim controls in 
accordance with Sec.  35.1330 to treat the lead-based paint hazards 
identified in the risk assessment. Interim controls are considered 
completed when clearance is achieved in accordance with Sec.  35.1340. 
Interim controls shall be completed no later than the following 
schedule:
    (1) In units occupied by families with children of less than 6 years 
of age and in common areas servicing those units, interim controls shall 
be completed no later than 90 days after the completion of the risk 
assessment. In units in which a child of less than 6 years of age moves 
in after the completion of the risk assessment, interim controls shall 
be completed no later than 90 days after the move-in.
    (2) In all other dwelling units, common areas, and the remaining 
portions of the residential property, interim controls shall be 
completed no later than 12 months after completion of the risk 
assessment for those units.
    (c) Ongoing lead-based paint maintenance and reevaluation 
activities. Effective immediately after completion of the risk 
assessment required in Sec.  35.715(a), the owner shall incorporate 
ongoing lead-based paint maintenance and reevaluation into the regular 
building operations in accordance with Sec.  35.1355, unless all lead-
based paint has been removed. If the reevaluation identifies new lead-
based paint hazards, the owner shall conduct interim controls in 
accordance with Sec.  35.1330.
    (d) Transitional requirements--(1) Effective date. The requirements 
of this paragraph shall apply effective September 15, 2000, and 
continuing until the applicable date specified in Sec.  35.715(a) (1) or 
(2) or until the owner

[[Page 306]]

conducts a risk assessment, whichever is first.
    (2) Definitions and other general requirements that apply to this 
paragraph are found in subpart B of this part.
    (3) Ongoing lead-based paint maintenance. The owner shall 
incorporate ongoing lead-based paint maintenance activities into regular 
building operations, in accordance with Sec.  35.1355(a), except that 
clearance is not required.
    (e) Child with an elevated blood lead level. If a child of less than 
6 years of age living in a dwelling unit covered by this paragraph has 
an elevated blood lead level, the owner shall comply with the 
requirements of Sec.  35.730.

[64 FR 50210, Sept. 15, 1999, as amended at 82 FR 4167, Jan. 13, 2017]



Sec.  35.720  Multifamily properties receiving up to $5,000 per unit,
and single family properties.

    Effective September 15, 2000, the requirements of this section shall 
apply to a multifamily residential property that is receiving an average 
of up to and including $5,000 per assisted dwelling unit annually in 
project-based assistance and to a single family residential property 
that is receiving project-based assistance through the Section 8 
Moderate Rehabilitation program, the Project-Based Certificate program, 
or any other HUD program providing project-based assistance.
    (a) Activities at initial and periodic inspection--(1) Visual 
assessment. During the initial and periodic inspections, an inspector 
trained in visual assessment for deteriorated paint surfaces in 
accordance with procedures established by HUD shall conduct a visual 
assessment of all painted surfaces in order to identify any deteriorated 
paint.
    (2) Paint stabilization. The owner shall stabilize each deteriorated 
paint surface in accordance with Sec.  35.1330(a) and Sec.  35.1330(b) 
before occupancy of a vacant dwelling unit or, where a unit is occupied, 
within 30 days of notification of the results of the visual assessment. 
Paint stabilization is considered complete when clearance is achieved in 
accordance with Sec.  35.1340.
    (3) Notice. The owner shall provide a notice to occupants in 
accordance with Sec. Sec.  35.125(b) (1) and (c) describing the results 
of the clearance examination.
    (b) Ongoing lead-based paint maintenance activities. The owner shall 
incorporate ongoing lead-based paint maintenance activities into regular 
building operations in accordance with Sec.  35.1355(a), unless all 
lead-based paint has been removed.
    (c) Child with an elevated blood lead level. If a child of less than 
6 years of age living in a dwelling unit covered by this section has an 
elevated blood lead level, the owner shall comply with the requirements 
of Sec.  35.730.

[64 FR 50210, Sept. 15, 1999, as amended at 82 FR 4167, Jan. 13, 2017]



Sec.  35.725  Section 8 Rent adjustments.

    HUD may, subject to the availability of appropriations for Section 8 
contract amendments, on a project by project basis for projects 
receiving Section 8 project-based assistance, provide adjustments to the 
maximum monthly rents to cover the costs of evaluation for and reduction 
of lead-based paint hazards, as defined in section 1004 of the 
Residential Lead-Based Paint Hazard Reduction Act of 1992.



Sec.  35.730  Child with an elevated blood lead level.

    (a) Environmental investigation. Within 15 calendar days after being 
notified by a public health department or other medical health care 
provider that a child of less than 6 years of age living in a dwelling 
unit to which this subpart applies has been identified as having an 
elevated blood lead level, the owner shall complete an environmental 
investigation of the dwelling unit in which the child lived at the time 
the blood was last sampled and of common areas servicing the dwelling 
unit. The requirements of this paragraph apply regardless of whether the 
child is or is not still living in the unit when the owner receives the 
notification of the elevated blood lead level. The requirements of this 
paragraph shall not apply if the owner conducted an environmental 
investigation of the unit and common areas servicing the unit between 
the date the child's blood was last sampled and the date when the owner 
received the notification of the elevated blood lead level. If the owner

[[Page 307]]

conducted a risk assessment of the unit and common areas servicing the 
unit during that period, the owner need not conduct another risk 
assessment there but shall conduct the elements of an environmental 
investigation not already conducted during the risk assessment. If a 
public health department has already conducted an evaluation of the 
dwelling unit in regard to the child's elevated blood lead level case, 
the requirements of this paragraph shall not apply.
    (b) Verification. After receiving information from a person who is 
not a medical health care provider that a child of less than 6 years of 
age living in a dwelling unit covered by this subpart may have an 
elevated blood lead level, the owner shall immediately verify the 
information with the public health department or other medical health 
care provider. If the public health department or provider denies the 
request, such as because it does not have the capacity to verify that 
information, the owner shall send documentation of the denial to the HUD 
rental assistance program manager, who shall make an effort to verify 
the information. If the public health department or provider verifies 
that the child has an elevated blood lead level, such verification shall 
constitute notification, and the owner shall take the action required in 
paragraphs (a) and (c) of this section.
    (c) Lead-based paint hazard reduction. Within 30 calendar days after 
receiving the report of the environmental investigation conducted 
pursuant to paragraph (a) of this section or the evaluation from the 
public health department, the owner shall complete the reduction of 
identified lead-based paint hazards in accordance with Sec.  35.1325 or 
Sec.  35.1330. Lead-based paint hazard reduction is considered complete 
when clearance is achieved in accordance with Sec.  35.1340 and the 
clearance report states that all lead-based paint hazards identified in 
the environmental investigation have been treated with interim controls 
or abatement or the public health department certifies that the lead-
based paint hazard reduction is complete. The requirements of this 
paragraph do not apply if the owner, between the date the child's blood 
was last sampled and the date the owner received the notification of the 
elevated blood lead level, already conducted an environmental 
investigation of the unit and common areas servicing the unit and 
completed reduction of identified lead-based paint hazards. If the owner 
conducted a risk assessment of the unit and common areas servicing the 
unit during that period, the owner is not required to conduct another 
risk assessment there but shall conduct the elements of an environmental 
investigation not already conducted during the risk assessment.
    (d) If an environmental investigation or lead-based paint hazard 
evaluation or reduction is undertaken, each owner shall provide notice 
to occupants in accordance with Sec.  35.125.
    (e) Reporting requirement. (1) The owner shall report the name and 
address of a child identified as having an elevated blood lead level to 
the public health department within 5 business days of being so notified 
by any other medical health care professional.
    (2) The owner shall also report each confirmed case of a child with 
an elevated blood lead level to the HUD field office and HUD Office of 
Lead Hazard Control and Healthy Homes within 5 business days of being so 
notified.
    (3) The owner shall provide to the HUD field office documentation 
that the designated party has conducted the activities of paragraphs (a) 
through (d) of this section, within 10 business days of the deadline for 
each activity.
    (f) Other assisted dwelling units in the property. (1) If the 
environmental investigation conducted pursuant to paragraph (a) of this 
section identifies lead-based paint hazards, the owner shall, for other 
assisted dwelling units covered by this part in which a child under age 
6 resides or is expected to reside on the date lead-based paint hazard 
reduction under paragraph (c) of this section is complete, and for the 
common areas servicing those units, conduct a risk assessment within 30 
calendar days after receipt of the environmental investigation report if 
there are 20 or fewer such other units, or 60 calendar days if there are 
more than 20 such other units.
    (2) Control measures. If the risk assessment conducted under 
paragraph

[[Page 308]]

(f)(1) of this section identifies lead-based paint hazards, the owner 
shall complete the reduction of identified lead-based paint hazards in 
accordance with Sec.  35.1325 or Sec.  35.1330 in those units and common 
areas within 30 calendar days, or within 90 calendar days if more than 
20 units have lead-based paint hazards such that the control work would 
disturb painted surfaces that total more than the de minimis threshold 
of Sec.  35.1350(d). Lead-based paint hazard reduction is considered 
complete when clearance is achieved in accordance with Sec.  35.1340 and 
the clearance report states that all lead-based paint hazards identified 
in the risk assessment have been treated with interim controls or 
abatement.
    (3) The owner shall provide to the HUD field office documentation 
that the designated party has conducted the activities of paragraph 
(f)(1) and (f)(2) of this section, within 10 business days of the 
deadline for each activity.
    (4) The requirements of this paragraph (f) do not apply if:
    (i) The owner both conducted a risk assessment of the other assisted 
dwelling units covered by paragraph (f)(1) of this section and the 
common areas servicing those units, and conducted reduction of 
identified lead-based paint hazards in accordance with Sec.  35.1325 or 
Sec.  35.1330 between the date the child's blood was last sampled and 
the date the owner received the notification of the elevated blood lead 
level; or
    (ii) The owner has documentation of compliance with evaluation, 
notification, lead disclosure, ongoing lead-based paint maintenance, and 
lead-based paint management requirements under this part throughout the 
12 months preceding the date the owner received the environmental 
investigation report pursuant to paragraph (a) of this section; and
    (iii) In either case, the owner provides to the HUD field office 
documentation that it has conducted the activities of paragraphs 
(f)(4)(i) and (ii) of this section, within 10 business days of the 
deadline for each activity.

[82 FR 4167, Jan. 13, 2017]



  Subpart I_HUD-Owned and Mortgagee-in-Possession Multifamily Property

    Source: 64 FR 50211, Sept. 15, 1999, unless otherwise noted.



Sec.  35.800  Purpose and applicability.

    The purpose of this subpart I is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in a HUD-owned 
multifamily residential property or a multifamily residential property 
for which HUD is identified as mortgagee-in-possession. The requirements 
of this subpart apply to any such property that is offered for sale or 
held or managed on or after September 15, 2000.



Sec.  35.805  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.



Sec.  35.810  Notices and pamphlet.

    (a) Notices. When evaluation or hazard reduction is undertaken, the 
Department shall provide a notice to occupants in accordance with Sec.  
35.125. A visual assessment alone is not considered an evaluation for 
the purposes of this part.
    (b) Lead hazard information pamphlet. HUD shall provide the lead 
hazard information pamphlet in accordance with Sec.  35.130.

[64 FR 50211, Sept. 15, 1999, as amended at 69 FR 34272, June 21, 2004]



Sec.  35.815  Evaluation.

    HUD shall conduct a risk assessment and a lead-based paint 
inspection in accordance with Sec.  35.1320(a) and (b). For properties 
to which this subpart applies on September 15, 2000, the lead-based 
paint inspection and risk assessment shall be conducted no later than 
December 15, 2000, or before publicly advertising the property for sale, 
whichever is sooner. For properties to which this subpart becomes 
applicable after September 15, 2000, the lead-based paint inspection and 
risk assessment shall be conducted no later than 90

[[Page 309]]

days after this subpart becomes applicable or before publicly 
advertising the property for sale, whichever is sooner.



Sec.  35.820  Interim controls.

    HUD shall conduct interim controls in accordance with Sec.  35.1330 
to treat the lead-based paint hazards identified in the evaluation 
conducted in accordance with Sec.  35.815. Interim controls are 
considered completed when clearance is achieved in accordance with Sec.  
35.1340. Interim controls of all lead-based paint hazards shall be 
completed no later than the following schedule:
    (a) In units occupied by families with children of less than 6 years 
of age and in common areas servicing those units, interim controls shall 
be completed no later than 90 days after the completion of the risk 
assessment. In units in which a child of less than 6 years of age moves 
in after the completion of the risk assessment, interim controls shall 
be completed no later than 90 days after the move-in.
    (b) In all other dwelling units, common areas, and the remaining 
portions of the residential property, interim controls shall be 
completed no later than 12 months after completion of the risk 
assessment for those units.
    (c) If conveyance of the title by HUD at a sale of a HUD-owned 
property or a foreclosure sale caused by HUD when HUD is mortgagee-in-
possession occurs before the schedule in paragraphs (a) and (b) of this 
section, HUD shall complete interim controls before conveyance or 
foreclosure, or HUD shall be responsible for assuring that interim 
controls are carried out by the purchaser. If interim controls are made 
a condition of sale, such controls shall be completed according to the 
following schedule:
    (1) In units occupied by families with children of less than 6 years 
of age and in common areas servicing those units, interim controls shall 
be completed no later than 90 days after the date of the closing of the 
sale. In units in which a child of less than 6 years of age moves in 
after the closing of the sale, interim controls shall be completed no 
later than 90 days after the move-in.
    (2) In all other dwelling units, in common areas servicing those 
units, and in the remaining portions of the residential property, 
interim controls shall be completed no later than 180 days after the 
closing of the sale.



Sec.  35.825  Ongoing lead-based paint maintenance and reevaluation.

    HUD shall incorporate ongoing lead-based paint maintenance and 
reevaluation, in accordance with Sec.  35.1355, into regular building 
operations if HUD retains ownership of the residential property for more 
than 12 months.



Sec.  35.830  Child with an elevated blood lead level.

    (a) Environmental investigation. Within 15 calendar days after being 
notified by a public health department or other medical health care 
provider that a child of less than 6 years of age living in a dwelling 
unit owned by HUD (or where HUD is mortgagee-in-possession) has been 
identified as having an elevated blood lead level, HUD shall complete an 
environmental investigation of the dwelling unit in which the child 
lived at the time the blood was last sampled and of common areas 
servicing the dwelling unit. The requirements of this paragraph apply 
regardless of whether the child is or is not still living in the unit 
when HUD receives the notification of the elevated blood lead level. The 
requirements of this paragraph shall not apply if HUD conducted an 
environmental investigation of the unit and common areas servicing the 
unit between the date the child's blood was last sampled and the date 
when HUD received the notification of the elevated blood lead level. If 
HUD conducted a risk assessment of the unit and common areas servicing 
the unit during that period, HUD is not required to conduct another risk 
assessment there but it shall conduct the elements of an environmental 
investigation not already conducted during the risk assessment. If a 
public health department has already conducted an evaluation of the 
dwelling unit in regard to the child's elevated blood lead level case, 
the requirements of this paragraph shall not apply.
    (b) Verification. After receiving information from a person who is 
not a medical health care provider that a child of less than 6 years of 
age living

[[Page 310]]

in a dwelling unit covered by this subpart may have an elevated blood 
lead level, HUD shall immediately verify the information with the public 
health department or other medical health care provider. If the public 
health department or provider denies the request, such as because it 
does not have the capacity to verify that information, the HUD Realty 
Specialist assigned to that property shall send documentation of the 
denial to the HUD Office of Lead Hazard Control and Healthy Homes, which 
shall make an effort to verify the information. If the public health 
department or provider verifies that the child has an elevated blood 
lead level, such verification shall constitute notification, and HUD 
shall take the action required in paragraphs (a) and (c) of this 
section.
    (c) Lead-based paint hazard reduction. Within 30 calendar days after 
receiving the report of the environmental investigation conducted 
pursuant to paragraph (a) of this section or the evaluation from the 
public health department, HUD shall complete the reduction of identified 
lead-based paint hazards in accordance with Sec.  35.1325 or Sec.  
35.1330. Lead-based paint hazard reduction is considered complete when 
clearance is achieved in accordance with Sec.  35.1340 and the clearance 
report states that all lead-based paint hazards identified in the 
environmental investigation have been treated with interim controls or 
abatement or the public health department certifies that the lead-based 
paint hazard reduction is complete. The requirements of this paragraph 
do not apply if HUD, between the date the child's blood was last sampled 
and the date HUD received the notification of the elevated blood lead 
level, already conducted an environmental investigation of the unit and 
common areas servicing the unit and completed reduction of identified 
lead-based paint hazards. If HUD conducted a risk assessment of the unit 
and common areas servicing the unit during that period, it is not 
required to conduct another risk assessment there but it shall conduct 
the elements of an environmental investigation not already conducted 
during the risk assessment.
    (d) Notice. If lead-based paint hazard evaluation or reduction is 
undertaken, each owner shall provide a notice to occupants in accordance 
with Sec.  35.125.
    (e) Reporting requirement. (1) HUD shall report the name and address 
of a child identified as having an elevated blood lead level to the 
public health department within 5 business days of being so notified by 
any other medical health care professional.
    (2) HUD shall also report each confirmed case of a child with an 
elevated blood lead level to the HUD Office of Lead Hazard Control and 
Healthy Homes within 5 business days of being so notified.
    (3) HUD shall provide to the HUD Office of Lead Hazard Control and 
Healthy Homes documentation that it has conducted the activities of 
paragraphs (a) through (d) of this section, within 10 business days of 
the deadline for each activity.
    (f) Other assisted dwelling units in the property. (1) If the 
environmental investigation conducted pursuant to paragraph (a) of this 
section identifies lead-based paint hazards, HUD shall, for other 
assisted dwelling units covered by this part in which a child under age 
6 resides or is expected to reside on the date lead-based paint hazard 
reduction under paragraph (c) of this section, and the common areas 
servicing those units, is complete, conduct a risk assessment in 
accordance with Sec.  35.815 within 30 calendar days after receipt of 
the environmental investigation report if there are 20 or fewer such 
other units, or 60 calendar days if there are more than 20 such other 
units.
    (2) If the risk assessment conducted under paragraph (f)(1) of this 
section identifies lead-based paint hazards, HUD shall complete the 
reduction of identified lead-based paint hazards in accordance with 
Sec.  35.1325 or Sec.  35.1330 in those units and common areas within 30 
calendar days, or within 90 calendar days if more than 20 units have 
lead-based paint hazards such that the control work would disturb 
painted surfaces that total more than the de minimis threshold of Sec.  
35.1350(d). Lead-based paint hazard reduction is considered complete 
when clearance is achieved in accordance with Sec.  35.1340 and the 
clearance report states that all lead-based

[[Page 311]]

paint hazards identified in the risk assessment have been treated with 
interim controls or abatement.
    (3) The requirements of this paragraph (f) do not apply if:
    (i) HUD, between the date the child's blood was last sampled and the 
date HUD received the notification of the elevated blood lead level, 
both conducted a risk assessment in the other assisted dwelling units 
covered by paragraph (f)(1) of this section and the common areas 
servicing those units, and conducted interim controls of identified 
lead-based paint hazards in accordance with Sec.  35.820; or
    (ii) HUD has documentation of compliance with evaluation, 
notification, lead disclosure, ongoing lead-based paint maintenance, and 
lead-based paint management requirements under this part throughout the 
12 months preceding the date HUD received the environmental 
investigation report pursuant to paragraph (a) of this section.
    (4) HUD shall provide to the HUD Office of Lead Hazard Control and 
Healthy Homes documentation that it has conducted the activities of 
paragraph (f)(1) through (2) of this section, or that it has complied 
with the requirements in paragraph (f)(3) of this section, within 10 
business days of the deadline for each activity.
    (g) Closing. If the closing of a sale is scheduled during the period 
when HUD is responding to a case of a child with an elevated blood lead 
level, HUD may arrange for the completion of the procedures required by 
paragraphs (a) through (d) of this section by the purchaser within a 
reasonable period of time.
    (h) Extensions. The Assistant Secretary for Housing-Federal Housing 
Commissioner or designee may consider and approve a request for an 
extension of deadlines established by this section for lead-based paint 
inspection, risk assessment, environmental investigation, lead-based 
paint hazard reduction, clearance, and reporting. Such a request may be 
considered, however, only during the first six months during which HUD 
is owner or mortgagee-in-possession of a multifamily property.

[82 FR 4168, Jan. 13, 2017]



                        Subpart J_Rehabilitation

    Source: 64 FR 50212, Sept. 15, 1999, unless otherwise noted.



Sec.  35.900  Purpose and applicability.

    (a) Purpose and applicability. (1) The purpose of this subpart J is 
to establish procedures to eliminate as far as practicable lead-based 
paint hazards in a residential property that receives Federal 
rehabilitation assistance under a program administered by HUD. 
Rehabilitation assistance does not include project-based rental 
assistance, rehabilitation mortgage insurance or assistance to public 
housing.
    (2) The requirements of this subpart shall not apply to HOME funds 
which are committed to a specific project in accordance with Sec.  92.2 
of this title before September 15, 2000. Such projects shall be subject 
to the requirements of Sec.  92.355 of this title that were in effect at 
the time of project commitment or the requirements of this subpart.
    (3) For the purposes of the Indian Housing Block Grant program and 
the CDBG Entitlement program, the requirements of this subpart shall 
apply to all residential rehabilitation activities (except those 
otherwise exempted) for which funds are first obligated on or after 
September 15, 2000. For the purposes of the State, HUD-Administered 
Small Cities, and Insular Areas CDBG programs, the requirements of this 
subpart shall apply to all covered activities (except those otherwise 
exempted) for which grant funding is awarded to the unit of local 
government by the State or HUD, as applicable, on or after September 15, 
2000. For the purposes of the Emergency Shelter Grant Program (42 U.S.C. 
11371-11378) and the formula grants awarded under the Housing 
Opportunities for Persons with AIDS Program (HOPWA) (42 U.S.C. 12901 et. 
seq.), the requirements of this subpart shall apply to activities for 
which program funds are first obligated on or after September 15, 2000.
    (4) For the purposes of competitively awarded grants under the HOPWA 
Program and the Supportive Housing Program (42 U.S.C. 11481-11389), the 
requirements of this subpart shall apply to grants awarded under Notices 
of

[[Page 312]]

Funding Availability published on or after September 15, 2000.
    (5) For the purposes of the Indian CDBG program (Sec.  1003.607 of 
this title), the requirements of this subpart shall not apply to funds 
whose notice of funding availability is announced or funding letter is 
sent before September 15, 2000. Such project grantees shall be subject 
to the regulations in effect at the time of announcement or funding 
letter.
    (b) The grantee or participating jurisdiction may assign to a 
subrecipient or other entity the responsibilities set forth in this 
subpart.



Sec.  35.905  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.



Sec.  35.910  Notices and pamphlet.

    (a) Notices. In cases where evaluation or hazard reduction or both 
are undertaken as part of federally funded rehabilitation, the grantee 
or participating jurisdiction shall provide a notice to occupants in 
accordance with Sec.  35.125. A visual assessment alone is not 
considered an evaluation for the purposes of this part.
    (b) Lead hazard information pamphlet. The grantee or participating 
jurisdiction shall provide the lead hazard information pamphlet in 
accordance with Sec.  35.130.

[69 FR 34272, June 21, 2004]



Sec.  35.915  Calculating Federal rehabilitation assistance.

    (a) Applicability. This section applies to recipients of Federal 
rehabilitation assistance.
    (b) Rehabilitation assistance. (1) Lead-based paint requirements for 
rehabilitation fall into three categories that depend on the amount of 
Federal rehabilitation assistance provided. The three categories are:
    (i) Assistance of up to and including $5,000 per unit;
    (ii) Assistance of more than $5,000 per unit up to and including 
$25,000 per unit; and
    (iii) Assistance of more than $25,000 per unit.
    (2) For purposes of implementing Sec. Sec.  35.930 and 35.935, the 
amount of rehabilitation assistance is the lesser of two amounts: the 
average Federal assistance per assisted dwelling unit and the average 
per unit hard costs of rehabilitation. Federal assistance includes all 
Federal funds assisting the project, regardless of the use of the funds. 
Federal funds being used for acquisition of the property are to be 
included as well as funds for construction, permits, fees, and other 
project costs. The hard costs of rehabilitation include all hard costs, 
regardless of source, except that the costs of lead-based paint hazard 
evaluation and hazard reduction activities are not to be included. Costs 
of site preparation, occupant protection, relocation, interim controls, 
abatement, clearance, and waste handling attributable to compliance with 
the requirements of this part are not to be included in the hard costs 
of rehabilitation. All other hard costs are to be included, regardless 
of whether the source of funds is Federal or non-Federal, public or 
private.
    (c) Calculating rehabilitation assistance in properties with both 
assisted and unassisted dwelling units. For a residential property that 
includes both federally assisted and non-assisted units, the 
rehabilitation costs and Federal assistance associated with non-assisted 
units are not included in the calculations of the average per unit hard 
costs of rehabilitation and the average Federal assistance per unit.
    (1) The average per unit hard costs of rehabilitation for the 
assisted units is calculated using the following formula:

Per Unit Hard Costs of Rehabilitation $ = (a/c) + (b/d)

Where:

a = Rehabilitation hard costs for all assisted units (not including 
          common areas and exterior surfaces)
b = Rehabilitation hard costs for common areas and exterior painted 
          surfaces
c = Number of federally assisted units
d = Total number of units

    (2) The average Federal assistance per assisted dwelling unit is 
calculated using the following formula:

Per unit Federal assistance = e/c

Where:


[[Page 313]]


e = Total Federal assistance for the project
c = Number of federally assisted units

[69 FR 34272, June 21, 2004]



Sec.  35.920  [Reserved]



Sec.  35.925  Examples of determining applicable requirements.

    The following examples illustrate how to determine whether the 
requirements of Sec. Sec.  35.930(b), (c), or (d) apply to a dwelling 
unit receiving Federal rehabilitation assistance (dollar amounts are on 
a per unit basis):
    (a) If the total amount of Federal assistance for a dwelling is 
$2,000, and the hard costs of rehabilitation are $10,000, the lead-based 
paint requirements would be those described in Sec.  35.930(b), because 
Federal rehabilitation assistance is up to and including $5,000.
    (b) If the total amount of Federal assistance for a dwelling unit is 
$6,000, and the hard costs of rehabilitation are $2,000, the lead-based 
paint requirements would be those described in Sec.  35.930(b). Although 
the total amount of Federal dollars is more than $5,000, only the $2,000 
of that total can be applied to rehabilitation. Therefore, the Federal 
rehabilitation assistance is $2,000 which is not more than $5,000.
    (c) If the total amount of Federal assistance for a unit is $6,000, 
and the hard costs of rehabilitation are $6,000, the lead-based paint 
requirements are those described in Sec.  35.930(c), because the amount 
of Federal rehabilitation assistance is more than $5,000 but not more 
than $25,000.
    (d) If eight dwelling units in a residential property receive 
Federal rehabilitation assistance [symbol c in Sec.  35.915(c)(2)] out 
of a total of 10 dwelling units [d], the total Federal assistance for 
the rehabilitation project is $300,000 [e], the total hard costs of 
rehabilitation for the dwelling units are $160,000 [a], and the total 
hard costs of rehabilitation for the common areas and exterior surfaces 
are $20,000 [b], then the lead-based paint requirements would be those 
described in Sec.  35.930(c), because the level of Federal 
rehabilitation assistance is $22,000, which is not greater than $25,000. 
This is calculated as follows: The total Federal assistance per assisted 
unit is $37,500 (e/c = $300,000/8), the per unit hard costs of 
rehabilitation is $22,000 (a/c + b/d = $160,000/8 + $20,000/10), and the 
level of Federal rehabilitation assistance is the lesser of $37,500 and 
$22,000.

[64 FR 50212, Sept. 15, 1999, as amended at 69 FR 34272, June 21, 2004]



Sec.  35.930  Evaluation and hazard reduction requirements.

    (a) Paint testing. The grantee or participating jurisdiction shall 
either perform paint testing on the painted surfaces to be disturbed or 
replaced during rehabilitation activities, or presume that all these 
painted surfaces are coated with lead-based paint.
    (b) Residential property receiving an average of up to and including 
$5,000 per unit in Federal rehabilitation assistance. Each grantee or 
participating jurisdiction shall:
    (1) Conduct paint testing or presume the presence of lead-based 
paint, in accordance with paragraph (a) of this section. If paint 
testing indicates that the painted surfaces are not coated with lead-
based paint, safe work practices and clearance are not required.
    (2) Implement safe work practices during rehabilitation work in 
accordance with Sec.  35.1350 and repair any paint that is disturbed.
    (3) After completion of any rehabilitation disturbing painted 
surfaces, perform a clearance examination of the worksite(s) in 
accordance with Sec.  35.1340. Clearance is not required if 
rehabilitation did not disturb painted surfaces of a total area more 
than that set forth in Sec.  35.1350(d).
    (c) Residential property receiving an average of more than $5,000 
and up to and including $25,000 per unit in Federal rehabilitation 
assistance. Each grantee or participating jurisdiction shall:
    (1) Conduct paint testing or presume the presence of lead-based 
paint, in accordance with paragraph (a) of this section.
    (2) Perform a risk assessment in the dwelling units receiving 
Federal assistance, in common areas servicing those units, and exterior 
painted surfaces, in accordance with Sec.  35.1320(b), before 
rehabilitation begins.
    (3) Perform interim controls in accordance with Sec.  35.1330 of all 
lead-based paint hazards identified pursuant to

[[Page 314]]

paragraphs (c)(1) and (c)(2) of this section.
    (4) Implement safe work practices during rehabilitation work in 
accordance with Sec.  35.1350 and repair any paint that is disturbed and 
is known or presumed to be lead-based paint.
    (d) Residential property receiving an average of more than $25,000 
per unit in Federal rehabilitation assistance. Each grantee or 
participating jurisdiction shall:
    (1) Conduct paint testing or presume the presence of lead-based 
paint in accordance with paragraph (a) of this section.
    (2) Perform a risk assessment in the dwelling units receiving 
Federal assistance and in associated common areas and exterior painted 
surfaces in accordance with Sec.  35.1320(b) before rehabilitation 
begins.
    (3) Abate all lead-based paint hazards identified by the paint 
testing or risk assessment conducted pursuant to paragraphs (d)(1) and 
(d)(2) of this section, in accordance with Sec.  35.1325, except that 
interim controls are acceptable on exterior surfaces that are not 
disturbed by rehabilitation and on paint-lead hazards that have an area 
smaller than the de minimis limits of Sec.  35.1350(d). If abatement of 
a paint-lead hazard is required, it is necessary to abate only the 
surface area with hazardous conditions.
    (4) Implement safe work practices during rehabilitation work in 
accordance with Sec.  35.1350 and repair any paint that is disturbed and 
is known or presumed to be lead-based paint.

[64 FR 50214, Sept. 15, 1999; 65 FR 3387, Jan. 21, 2000, as amended at 
69 FR 34273, June 21, 2004]



Sec.  35.935  Ongoing lead-based paint maintenance activities.

    In the case of a rental property receiving Federal rehabilitation 
assistance under the HOME program, the grantee or participating 
jurisdiction shall require the property owner to incorporate ongoing 
lead-based paint maintenance activities in regular building operations, 
in accordance with Sec.  35.1355(a).

[69 FR 34273, June 21, 2004]



Sec.  35.940  Special requirements for insular areas.

    If a dwelling unit receiving Federal assistance under a program 
covered by this subpart is located in an insular area, the requirements 
of this section shall apply and the requirements of Sec.  35.930 shall 
not apply. All other sections of this subpart J shall apply. The insular 
area shall conduct the following activities for the dwelling unit, 
common areas servicing the dwelling unit, and the exterior surfaces of 
the building in which the dwelling unit is located:
    (a) Residential property receiving an average of up to and including 
$5,000 per unit in Federal rehabilitation assistance. (1) Implement safe 
work practices during rehabilitation work in accordance with Sec.  
35.1350 and repair any paint that is disturbed by rehabilitation.
    (2) After completion of any rehabilitation disturbing painted 
surfaces, perform a clearance examination of the worksite(s) in 
accordance with Sec.  35.1340. Clearance shall be achieved before 
residents are allowed to occupy the worksite(s). Clearance is not 
required if rehabilitation did not disturb painted surfaces of a total 
area more than that set forth in Sec.  35.1350(b).
    (b) Residential property receiving an average of more than $5,000 
per unit in Federal rehabilitation assistance. (1) Before beginning 
rehabilitation, perform a visual assessment of all painted surfaces in 
order to identify deteriorated paint.
    (2) Perform paint stabilization of each deteriorated paint surface 
and each painted surface being disturbed by rehabilitation, in 
accordance with Sec. Sec.  35.1330(a) and (b).
    (3) After completion of all paint stabilization, perform a clearance 
examination of the affected dwelling units and common areas in 
accordance with Sec.  35.1340. Clearance shall be achieved before 
residents are allowed to occupy rooms or spaces in which paint 
stabilization has been performed.



     Subpart K_Acquisition, Leasing, Support Services, or Operation

    Source: 64 FR 50214, Sept. 15, 1999, unless otherwise noted.

[[Page 315]]



Sec.  35.1000  Purpose and applicability.

    (a) The purpose of this subpart K is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in a 
residential property that receives Federal assistance under certain HUD 
programs for acquisition, leasing, support services, or operation. 
Acquisition, leasing, support services, and operation do not include 
mortgage insurance, sale of federally-owned housing, project-based or 
tenant-based rental assistance, rehabilitation assistance, or assistance 
to public housing. For requirements pertaining to those activities or 
types of assistance, see the applicable subpart of this part.
    (b) The grantee or participating jurisdiction may assign to a 
subrecipient or other entity the responsibilities set forth in this 
subpart.
    (c)(1) The requirements of this subpart shall not apply to HOME 
funds which are committed to a specific project in accordance with Sec.  
92.2 of this title before September 15, 2000. Such projects shall be 
subject to the requirements of Sec.  92.355 of this title that were in 
effect at the time of project commitment, or the requirements of this 
subpart.
    (2) For purposes of the CDBG Entitlement program and the Indian 
Housing Block Grant program, the requirements of this subpart shall 
apply to activities (except those otherwise exempted) for which funds 
are first obligated on or after September 15, 2000. For the purposes of 
the State, HUD-Administered Small Cities, and Insular Areas CDBG 
programs, the requirements of this subpart shall apply to all covered 
activities (except those otherwise exempted) for which grant funding is 
awarded to the unit of local government by the State or HUD, as 
applicable, on or after September 15, 2000. For the purposes of the 
Emergency Shelter Grant Program (42 U.S.C. 11371-11378) and the formula 
grants awarded under the Housing Opportunities for Persons with AIDS 
Program (HOPWA) (42 U.S.C. 12901 et. seq.), the requirements of this 
subpart shall apply to activities for which program funds are first 
obligated on or after September 15, 2000.
    (3) For the purposes of competitively awarded grants under the HOPWA 
Program and the Supportive Housing Program (42 U.S.C. 11481-11389), the 
requirements of this subpart shall apply to grants awarded under Notices 
of Funding Availability published on or after September 15, 2000.
    (4) For the purposes of the Indian CDBG program (Sec.  1003.607 of 
this title), the requirements of this subpart shall not apply to funds 
whose notice of funding availability is announced or funding letter is 
sent before September 15, 2000. Such project grantees shall be subject 
to the regulations in effect at the time of announcement or funding 
letter.

[64 FR 50213, Sept. 15, 1999; 65 FR 3387, Jan. 21, 2000]



Sec.  35.1005  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.



Sec.  35.1010  Notices and pamphlet.

    (a) Notice. In cases where evaluation or hazard reduction, including 
paint stabilization, is undertaken, each grantee or participating 
jurisdiction shall provide a notice to residents in accordance with 
Sec.  35.125. A visual assessment is not considered an evaluation for 
purposes of this part.
    (b) Lead hazard information pamphlet. The grantee or participating 
jurisdiction shall provide the lead hazard information pamphlet in 
accordance with Sec.  35.130.



Sec.  35.1015  Visual assessment, paint stabilization, and maintenance.

    If a dwelling unit receives Federal assistance under a program 
covered by this subpart, each grantee or participating jurisdiction 
shall conduct the following activities for the dwelling unit, common 
areas servicing the dwelling unit, and the exterior surfaces of the 
building in which the dwelling unit is located:
    (a) A visual assessment of all painted surfaces in order to identify 
deteriorated paint;
    (b) Paint stabilization of each deteriorated paint surface, and 
clearance, in accordance with Sec. Sec.  35.1330(a) and (b), before 
occupancy of a vacant dwelling

[[Page 316]]

unit or, where a unit is occupied, immediately after receipt of Federal 
assistance; and
    (c) The grantee or participating jurisdiction shall require the 
incorporation of ongoing lead-based paint maintenance activities into 
regular building operations, in accordance with Sec.  35.1355(a), if the 
dwelling unit has a continuing, active financial relationship with a 
Federal housing assistance program, except that mortgage insurance or 
loan guarantees are not considered to constitute an active programmatic 
relationship for the purposes of this part.
    (d) The grantee or participating jurisdiction shall provide a notice 
to occupants in accordance with Sec. Sec.  35.125(b)(1) and (c), 
describing the results of the clearance examination.

[64 FR 50214, Sept. 15, 1999, as amended at 69 FR 34273, June 21, 2004]



Sec.  35.1020  Funding for evaluation and hazard reduction.

    The grantee or participating jurisdiction shall determine whether 
the cost of evaluation and hazard reduction is to be borne by the owner/
developer, the grantee or a combination of the owner/developer and the 
grantee, based on program requirements and local program design.



                    Subpart L_Public Housing Programs

    Source: 64 FR 50215, Sept. 15, 1999, unless otherwise noted.



Sec.  35.1100  Purpose and applicability.

    The purpose of this subpart L is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in residential 
property assisted under the U.S. Housing Act of 1937 (42 U.S.C. 1437 et 
seq.) but not including housing assisted under section 8 of the 1937 
Act.



Sec.  35.1105  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.



Sec.  35.1110  Notices and pamphlet.

    (a) Notice. In cases where evaluation or hazard reduction is 
undertaken, each public housing agency (PHA) shall provide a notice to 
residents in accordance with Sec.  35.125. A visual assessment alone is 
not considered an evaluation for purposes of this part.
    (b) Lead hazard information pamphlet. The PHA shall provide the lead 
hazard information pamphlet in accordance with Sec.  35.130.

[64 FR 50215, Sept. 15, 1999, as amended at 69 FR 34273, June 21, 2004]



Sec.  35.1115  Evaluation.

    (a) A lead-based paint inspection shall be conducted in all public 
housing unless a lead-based paint inspection that meets the conditions 
of Sec.  35.165(a) has already been completed. If a lead-based paint 
inspection was conducted by a lead-based paint inspector who was not 
certified, the PHA shall review the quality of the inspection, in 
accordance with quality control procedures established by HUD, to 
determine whether the lead-based paint inspection has been properly 
performed and the results are reliable. Lead-based paint inspections of 
all housing to which this subpart applies shall be completed no later 
than September 15, 2000. Revisions or augmentations of prior inspections 
found to be of insufficient quality shall be completed no later than 
September 17, 2001.
    (b) If a lead-based paint inspection has found the presence of lead-
based paint, or if no lead-based paint inspection has been conducted, 
the PHA shall conduct a risk assessment according to the following 
schedule, unless a risk assessment that meets the conditions of Sec.  
35.165(b) has already been completed:
    (1) Risk assessments shall be completed on or before March 15, 2001, 
in a multifamily residential property constructed before 1960.
    (2) Risk assessments shall be completed on or before March 15, 2002, 
in a multifamily residential property constructed after 1959 and before 
1978.
    (c) A PHA that advertises a construction contract (including 
architecture/engineering contracts) for bid or award or plans to start 
force account work

[[Page 317]]

shall not execute such contract until a lead-based paint inspection and, 
if required, a risk assessment, has taken place and any necessary 
abatement is included in the modernization budget, except for contracts 
solely for emergency work in accordance with Sec.  35.115(a)(9).
    (d) The five-year funding request plan for CIAP and CGP shall be 
amended to include the schedule and funding for lead-based paint 
activities.



Sec.  35.1120  Hazard reduction.

    (a) Each PHA shall, in accordance with Sec.  35.1325, abate all 
lead-based paint and lead-based paint hazards identified in the 
evaluations conducted pursuant to Sec.  35.1115. The PHA shall abate 
lead-based paint and lead-based paint hazards in accordance with Sec.  
35.1325 during the course of physical improvements conducted under the 
modernization.
    (b) In all housing where abatement of all lead-based paint and lead-
based paint hazards required in paragraph (a) of this section has not 
yet occurred, each PHA shall conduct interim controls, in accordance 
with Sec.  35.1330, of the lead-based paint hazards identified in the 
most recent risk assessment.
    (1) Interim controls of dwelling units in which any child who is 
less than 6 years of age resides and common areas servicing those 
dwelling units shall be completed within 90 days of the evaluation under 
Sec.  35.1330. If a unit becomes newly occupied by a family with a child 
of less than 6 years of age or such child moves into a unit, interim 
controls shall be completed within 90 days after the new occupancy or 
move-in if they have not already been completed.
    (2) Interim controls in dwelling units not occupied by families with 
one or more children of less than 6 years of age, common areas servicing 
those units, and the remaining portions of the residential property 
shall be completed no later than 12 months after completion of the 
evaluation conducted under Sec.  35.1115.
    (c) The PHA shall incorporate ongoing lead-based paint maintenance 
and reevaluation activities into regular building operations in 
accordance with Sec.  35.1355. In accordance with Sec.  35.115(a) (6) 
and (7), this requirement does not apply to a development or part 
thereof if it is to be demolished or disposed of in accordance with 
disposition requirements in part 970 of this title, provided the 
dwelling unit will remain unoccupied until demolition, or if it is not 
used and will not be used for human habitation.



Sec.  35.1125  Evaluation and hazard reduction before acquisition
and development.

    (a) For each residential property constructed before 1978 and 
proposed to be acquired for a family project (whether or not it will 
need rehabilitation) a lead-based paint inspection and risk assessment 
for lead-based paint hazards shall be conducted in accordance with Sec.  
35.1320.
    (b) If lead-based paint is found in a residential property to be 
acquired, the cost of evaluation and abatement shall be considered when 
making the cost comparison to justify new construction, as well as when 
meeting maximum total development cost limitations.
    (c) If lead-based paint is found, compliance with this subpart is 
required, and abatement of lead-based paint and lead-based paint hazards 
shall be completed in accordance with Sec.  35.1325 before occupancy.



Sec.  35.1130  Child with an elevated blood lead level.

    (a) Environmental investigation. Within 15 calendar days after being 
notified by a public health department or other medical health care 
provider that a child of less than 6 years of age living in a dwelling 
unit to which this subpart applies has been identified as having an 
elevated blood lead level, the PHA shall complete an environmental 
investigation of the dwelling unit in which the child lived at the time 
the blood was last sampled and of common areas servicing the dwelling 
unit. The environmental investigation is considered complete when the 
PHA receives the environmental investigation report. The requirements of 
this paragraph apply regardless of whether the child is or is not still 
living in the unit when the PHA receives the notification of the 
elevated blood lead level. The requirements of this paragraph shall not

[[Page 318]]

apply if the PHA conducted an environmental investigation of the unit 
and common areas servicing the unit between the date the child's blood 
was last sampled and the date when the PHA received the notification of 
the elevated blood lead level. If the PHA conducted a risk assessment of 
the unit and common areas servicing the unit during that period, the PHA 
need not conduct another risk assessment there but shall conduct the 
elements of an environmental investigation not already conducted during 
the risk assessment. If a public health department has already conducted 
an evaluation of the dwelling unit in regard to the child's elevated 
blood lead level case, the requirements of this paragraph shall not 
apply.
    (b) Verification. After receiving information from a person who is 
not a medical health care provider that a child of less than 6 years of 
age living in a dwelling unit covered by this subpart may have an 
elevated blood lead level, the PHA shall immediately verify the 
information with the public health department or other medical health 
care provider. If that department or provider denies the request, such 
as because it does not have the capacity to verify that information, the 
PHA shall send documentation of the denial to its HUD field office, who 
shall make an effort to verify the information. If that department or 
provider verifies that the child has an elevated blood lead level, such 
verification shall constitute notification, and the housing agency shall 
take the action required in paragraphs (a) and (c) of this section.
    (c) Lead-based paint hazard reduction. Within 30 calendar days after 
receiving the report of the environmental investigation conducted 
pursuant to paragraph (a) of this section or the evaluation from the 
public health department, the PHA shall complete the reduction of 
identified lead-based paint hazards in accordance with Sec.  35.1325 or 
Sec.  35.1330. Lead-based paint hazard reduction is considered complete 
when clearance is achieved in accordance with Sec.  35.1340 and the 
clearance report states that all lead-based paint hazards identified in 
the environmental investigation have been treated with interim controls 
or abatement or the local or State health department certifies that the 
lead-based paint hazard reduction is complete. The requirements of this 
paragraph do not apply if the PHA, between the date the child's blood 
was last sampled and the date the PHA received the notification of the 
elevated blood lead level, already conducted an environmental 
investigation of the unit and common areas servicing the unit and 
completed reduction of identified lead-based paint hazards. If the PHA 
conducted a risk assessment of the unit and common areas servicing the 
unit during that period, it is not required to conduct another risk 
assessment there but it shall conduct the elements of an environmental 
investigation not already conducted during the risk assessment. If the 
PHA does not complete the lead-based paint hazard reduction required by 
this section, the dwelling unit is in violation of the standards of 24 
CFR 965.601, which incorporates the uniform physical condition standards 
of Sec.  5.703(f), including that it be free of lead-based paint 
hazards.
    (d) Notice of lead-based paint hazard evaluation and reduction. The 
PHA shall notify building residents of any lead-based paint hazard 
evaluation or reduction activities in accordance with Sec.  35.125.
    (e) Reporting requirement. (1) The PHA shall report the name and 
address of a child identified as having an elevated blood lead level to 
the public health department within 5 business days of being so notified 
by any other medical health care professional.
    (2) The PHA shall report each confirmed case of a child with an 
elevated blood lead level to the HUD field office and the HUD Office of 
Lead Hazard Control and Healthy Homes within 5 business days of being so 
notified.
    (3) The PHA shall provide to the HUD field office documentation that 
it has conducted the activities of paragraphs (a) through (d) of this 
section, within 10 business days of the deadline for each activity.
    (f) Other units in the property. (1) If the environmental 
investigation conducted pursuant to paragraph (a) of this section 
identifies lead-based paint hazards, the PHA shall conduct a risk

[[Page 319]]

assessment of other units of the building in which a child under age 6 
resides or is expected to reside on the date lead-based paint hazard 
reduction under paragraph (c) of this section is complete, and the 
common areas servicing those units within 30 calendar days after receipt 
of the environmental investigation report if there are 20 or fewer such 
other units, or 60 calendar days if there are more such units.
    (2) If the risk assessment conducted under paragraph (f)(1) of this 
section identifies lead-based paint hazards, the PHA shall control the 
hazards, in accordance with Sec. 35.1325 or Sec.  35.1330, in those 
units and common areas within 30 calendar days, or within 90 calendar 
days if more than 20 units have lead-based paint hazards such that the 
control work would disturb painted surfaces that total more than the de 
minimis threshold of Sec.  35.1350(d). Lead-based paint hazard reduction 
is considered complete when clearance is achieved in accordance with 
Sec.  35.1340 and the clearance report states that all lead-based paint 
hazards identified in the risk assessment have been treated with interim 
controls or abatement.
    (3) The PHA shall provide to the HUD field office documentation that 
it has conducted the activities of paragraphs (f)(1) and (2) of this 
section, within 10 business days of the deadline for each activity.
    (4) The requirements of this paragraph (f) of this section do not 
apply if:
    (i) The PHA, between the date the child's blood was last sampled and 
the date the PHA received the notification of the elevated blood lead 
level, both conducted a risk assessment of the other assisted dwelling 
units covered by paragraph (f)(1) of this section and the common areas 
servicing those units, and conducted interim controls of identified 
hazards in accordance with Sec.  35.1120(b); or
    (ii) If the PHA has documentation of compliance with evaluation, 
notification, lead disclosure, ongoing lead-based paint maintenance, and 
lead-based paint management requirements under this part throughout the 
12 months preceding the date the PHA received the environmental 
investigation report pursuant to paragraph (a) of this section; and,
    (iii) In either case, the PHA provided the HUD field office, within 
10 business days after receiving the notification of the elevated blood 
lead level, documentation that it has conducted the activities described 
in this paragraph (f)(4) of this section.

[82 FR 4169, Jan. 13, 2017]



Sec.  35.1135  Eligible costs.

    A PHA may use financial assistance received under the modernization 
program (CIAP or CGP) for the notice, evaluation and reduction of lead-
based paint hazards in accordance with Sec.  968.112 of this title. 
Eligible costs include:
    (a) Evaluation and insurance costs. Evaluation and hazard reduction 
activities, and costs for insurance coverage associated with these 
activities.
    (b) Planning costs. Planning costs are costs that are incurred 
before HUD approval of the CGP or CIAP application and that are related 
to developing the CIAP application or carrying out eligible 
modernization planning, such as planning for abatement, detailed design 
work, preparation of solicitations, and evaluation. Planning costs may 
be funded as a single work item. Planning costs shall not exceed 5 
percent of the CIAP funds available to a HUD Field Office in a 
particular fiscal year.
    (c) Architectural/engineering and consultant fees. Eligible costs 
include fees for planning, identification of needs, detailed design 
work, preparation of construction and bid documents and other required 
documents, evaluation, planning and design for abatement, and inspection 
of work in progress.
    (d) Elevated blood lead level response costs. The PHA may use its 
operating reserves and, when necessary, may request reimbursement from 
the current fiscal year CIAP funds, or request the reprogramming of 
previously approved CIAP funds to cover the costs of evaluation and 
hazard reduction.

[64 FR 50215, Sept. 15, 1999, as amended at 82 FR 4170, Jan. 13, 2017]



Sec.  35.1140  Insurance coverage.

    For the requirements concerning the obligation of a PHA to obtain 
reasonable insurance coverage with respect to the hazards associated 
with evaluation

[[Page 320]]

and hazard reduction activities, see Sec.  965.215 of this title.



                Subpart M_Tenant-Based Rental Assistance

    Source: 64 FR 50216, Sept. 15, 1999, unless otherwise noted.



Sec.  35.1200  Purpose and applicability.

    (a) Purpose. The purpose of this subpart M is to establish 
procedures to eliminate as far as practicable lead-based paint hazards 
in housing occupied by families receiving tenant-based rental 
assistance. Such assistance includes tenant-based rental assistance 
under the Section 8 certificate program, the Section 8 voucher program, 
the HOME program, the Shelter Plus Care program, the Housing 
Opportunities for Persons With AIDS (HOPWA) program, and the Indian 
Housing Block Grant program. Tenant-based rental assistance means rental 
assistance that is not attached to the structure.
    (b) Applicability. (1) This subpart applies only to dwelling units 
occupied or to be occupied by families or households that have one or 
more children of less than 6 years of age, common areas servicing such 
dwelling units, and exterior painted surfaces associated with such 
dwelling units or common areas. Common areas servicing a dwelling unit 
include those areas through which residents pass to gain access to the 
unit and other areas frequented by resident children of less than 6 
years of age, including on-site play areas and child care facilities.
    (2) For the purposes of the Section 8 tenant-based certificate 
program and the Section 8 voucher program:
    (i) The requirements of this subpart are applicable where an initial 
or periodic inspection occurs on or after September 15, 2000; and
    (ii) The PHA shall be the designated party.
    (3) For the purposes of formula grants awarded under the Housing 
Opportunities for Persons with AIDS Program (HOPWA) (42 U.S.C. 12901 et 
seq.):
    (i) The requirements of this subpart shall apply to activities for 
which program funds are first obligated on or after September 15, 2000; 
and
    (ii) The grantee shall be the designated party.
    (4) For the purposes of competitively awarded grants under the HOPWA 
Program and the Shelter Plus Care program (42 U.S.C. 11402-11407) 
tenant-based rental assistance component:
    (i) The requirements of this subpart shall apply to grants awarded 
pursuant to Notices of Funding Availability published on or after 
September 15, 2000; and
    (ii) The grantee shall be the designated party.
    (5) For the purposes of the HOME program:
    (i) The requirements of this subpart shall not apply to funds which 
are committed in accordance with Sec.  92.2 of this title before 
September 15, 2000; and
    (ii) The participating jurisdiction shall be the designated party.
    (6) For the purposes of the Indian Housing Block Grant program:
    (i) The requirements of this subpart shall apply to activities for 
which funds are first obligated on or after September 15, 2000; and
    (ii) The IHBG recipient shall be the designated party.
    (7) The housing agency, grantee, participating jurisdiction, or IHBG 
recipient may assign to a subrecipient or other entity the 
responsibilities of the designated party in this subpart.

[64 FR 50216, Sept. 15, 1999; 65 FR 3387, Jan. 21, 2000]



Sec.  35.1205  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.



Sec.  35.1210  Notices and pamphlet.

    (a) Notice. In cases where evaluation or paint stabilization is 
undertaken, the owner shall provide a notice to residents in accordance 
with Sec.  35.125. A visual assessment alone is not considered an 
evaluation for purposes of this part.
    (b) Lead hazard information pamphlet. The owner shall provide the 
lead hazard information pamphlet in accordance with Sec.  35.130.

[64 FR 50216, Sept. 15, 1999, as amended at 69 FR 34273, June 21, 2004]

[[Page 321]]



Sec.  35.1215  Activities at initial and periodic inspection.

    (a) (1) During the initial and periodic inspections, an inspector 
acting on behalf of the designated party and trained in visual 
assessment for deteriorated paint surfaces in accordance with procedures 
established by HUD shall conduct a visual assessment of all painted 
surfaces in order to identify any deteriorated paint.
    (2) For tenant-based rental assistance provided under the HOME 
program, visual assessment shall be conducted as part of the initial and 
periodic inspections required under Sec.  92.209(i) of this title.
    (b) The owner shall stabilize each deteriorated paint surface in 
accordance with Sec. Sec.  35.1330(a) and (b) before commencement of 
assisted occupancy. If assisted occupancy has commenced prior to a 
periodic inspection, such paint stabilization must be completed within 
30 days of notification of the owner of the results of the visual 
assessment. Paint stabilization is considered complete when clearance is 
achieved in accordance with Sec.  35.1340. If the owner does not 
complete the hazard reduction required by this section, the dwelling 
unit is in violation of Housing Quality Standards (HQS) until the hazard 
reduction is completed or the unit is no longer covered by this subpart 
because the unit is no longer under a housing assistance payment (HAP) 
contract with the housing agency. For the unit subsequently to come 
under a HAP contract with the housing agency for occupancy by a family 
with a child under age 6, paint stabilization must be completed, 
including clearance being achieved in accordance with Sec.  35.1340.
    (c) The owner shall provide a notice to occupants in accordance with 
Sec.  35.125(b)(1) and (c) describing the results of the clearance 
examination.
    (d) The designated party may grant the owner an extension of time to 
complete paint stabilization and clearance for reasonable cause, but 
such an extension shall not extend beyond 90 days after the date of 
notification to the owner of the results of the visual assessment.

[64 FR 50216, Sept. 15, 1999, as amended at 69 FR 34273, June 21, 2004; 
82 FR 4170, Jan. 13, 2017]



Sec.  35.1220  Ongoing lead-based paint maintenance activities.

    Notwithstanding the designation of the PHA, grantee, participating 
jurisdiction, or Indian Housing Block Grant (IHBG) recipient as the 
designated party for this subpart, the owner shall incorporate ongoing 
lead-based paint maintenance activities into regular building operations 
in accordance with Sec.  35.1355(a).

[69 FR 34273, June 21, 2004]



Sec.  35.1225  Child with an elevated blood lead level.

    (a) Within 15 calendar days after being notified by a public health 
department or other medical health care provider that a child of less 
than 6 years of age living in a dwelling unit to which this subpart 
applies has been identified as having an elevated blood lead level, the 
designated party shall complete an environmental investigation of the 
dwelling unit in which the child lived at the time the blood was last 
sampled and of common areas servicing the dwelling unit. When the 
environmental investigation is complete, the designated party shall 
immediately provide the report of the environmental investigation to the 
owner of the dwelling unit. If the child identified as having an 
elevated blood lead level is no longer living in the unit when the 
designated party receives notification from the public health department 
or other medical health care provider, but another household receiving 
tenant-based rental assistance is living in the unit or is planning to 
live there, the requirements of this section apply just as they do if 
the child still lives in the unit. If a public health department has 
already conducted an evaluation of the dwelling unit in regard to the 
child's elevated blood lead level case, or the designated party 
conducted an environmental investigation of the unit and common areas 
servicing the unit between the date the child's blood was last sampled 
and the date when the designated party received the

[[Page 322]]

notification of the elevated blood lead level, the requirements of this 
paragraph shall not apply. If the designated party or the owner 
conducted a risk assessment of the unit and common areas servicing the 
unit during that period, the designated party need not conduct another 
risk assessment there but shall conduct the elements of an environmental 
investigation not already conducted during the risk assessment.
    (b) Verification. After receiving information from a person who is 
not a medical health care provider that a child of less than 6 years of 
age living in a dwelling unit covered by this subpart may have an 
elevated blood lead level, the designated party shall immediately verify 
the information with the public health department or other medical 
health care provider. If the public health department or provider denies 
the request, such as because it does not have the capacity to verify 
that information, the designated party shall send documentation of the 
denial to the HUD rental assistance program manager, who shall make an 
effort to verify the information. If that department or provider 
verifies that the child has an elevated blood lead level, such 
verification shall constitute notification, and the designated party 
shall take the action required in paragraphs (a) and (c) of this 
section.
    (c) Lead-based paint hazard reduction. Within 30 calendar days after 
receiving the report of the environmental investigation from the 
designated party or the evaluation from the public health department, 
the owner shall complete the reduction of identified lead-based paint 
hazards in accordance with Sec.  35.1325 or Sec.  35.1330. Lead-based 
paint hazard reduction is considered complete when clearance is achieved 
in accordance with Sec.  35.1340 and the clearance report states that 
all lead-based paint hazards identified in the environmental 
investigation have been treated with interim controls or abatement or 
the public health department certifies that the lead-based paint hazard 
reduction is complete. The requirements of this paragraph do not apply 
if the designated party or the owner, between the date the child's blood 
was last sampled and the date the designated party received the 
notification of the elevated blood lead level, already conducted an 
environmental investigation of the unit and common areas servicing the 
unit and the owner completed reduction of identified lead-based paint 
hazards. If the owner does not complete the lead-based paint hazard 
reduction required by this section, the dwelling unit is in violation of 
the standards of 24 CFR 982.401.
    (d) Notice of lead-based paint hazard evaluation and reduction. The 
owner shall notify building residents of any lead-based paint hazard 
evaluation or reduction activities in accordance with Sec.  35.125.
    (e) Reporting requirement. (1) The owner shall report the name and 
address of a child identified as having an elevated blood lead level to 
the public health department within 5 business days of being so notified 
by any other medical health care professional.
    (2) The owner shall also report each confirmed case of a child with 
an elevated blood lead level to the HUD field office and the HUD Office 
of Lead Hazard Control and Healthy Homes within 5 business days of being 
so notified.
    (3) The owner shall provide to the HUD field office documentation 
that it has conducted the activities of paragraphs (a) through (d) of 
this section, within 10 business days of the deadline for each activity.
    (f) Other assisted dwelling units in the property. (1) If the 
environmental investigation conducted pursuant to paragraph (a) of this 
section identifies lead-based paint hazards, the designated party or the 
owner shall, for other assisted dwelling units covered by this part in 
which a child under age 6 resides or is expected to reside on the date 
lead-based paint hazard reduction under paragraph (c) of this section is 
complete, and the common areas servicing those units, conduct a risk 
assessment in accordance with Sec.  35.1320(b) within 30 calendar days 
after receipt of the environmental investigation report if there are 20 
or fewer such units, or 60 calendar days if there are more such units.
    (2) If the risk assessment conducted under paragraph (f)(1) of this 
section identifies lead-based paint hazards, the owner shall complete 
the reduction of

[[Page 323]]

the lead-based paint hazards in accordance with Sec.  35.1325 or Sec.  
35.1330 within 30 calendar days, or within 90 calendar days if more than 
20 units have lead-based paint hazards such that the control work would 
disturb painted surfaces that total more than the de minimis threshold 
of Sec.  35.1350(d). Lead-based paint hazard reduction is considered 
complete when clearance is achieved in accordance with Sec.  35.1340 and 
the clearance report states that all lead-based paint hazards identified 
in the risk assessment have been treated with interim controls or 
abatement.
    (3) The requirements of this paragraph (f) of this section do not 
apply if:
    (i) The designated party or the owner, between the date the child's 
blood was last sampled and the date the owner received the notification 
of the elevated blood lead level, both conducted a risk assessment of 
the other assisted dwelling units covered by paragraph (f)(1) of this 
section and the common areas servicing those units, and the owner 
conducted interim controls of identified lead-based paint hazards in 
accordance with Sec.  35.1225(c); or
    (ii) The owner has documentation of compliance with evaluation, 
notification, lead disclosure, ongoing lead-based paint maintenance, and 
lead-based paint management requirements under this part throughout the 
12 months preceding the date the owner received the environmental 
investigation report pursuant to paragraph (a) of this section; and,
    (iii) In either case, the owner provided the HUD field office, 
within 10 business days after receiving the notification of the elevated 
blood lead level, documentation that it has conducted the activities 
described in this paragraph (f)(3).
    (g) Data collection and record keeping responsibilities. At least 
quarterly, the designated party shall attempt to obtain from the public 
health department(s) with area(s) of jurisdiction similar to that of the 
designated party the names and/or addresses of children of less than 6 
years of age with an identified elevated blood lead level. At least 
quarterly, the designated party shall also report an updated list of the 
addresses of units receiving assistance under a tenant-based rental 
assistance program to the same public health department(s), except that 
the report(s) to the public health department(s) is not required if the 
health department states that it does not wish to receive such report. 
If it obtains names and addresses of elevated blood lead level children 
from the public health department(s), the designated party shall match 
information on cases of elevated blood lead levels with the names and 
addresses of families receiving tenant-based rental assistance, unless 
the public health department performs such a matching procedure.
    If a match occurs, the designated party shall carry out the 
requirements of this section.

[82 FR 4171, Jan. 13, 2017]

Subparts N-Q [Reserved]



  Subpart R_Methods and Standards for Lead-Paint Hazard Evaluation and 
                       Hazard Reduction Activities

    Source: 64 FR 50218, Sept. 15, 1999, unless otherwise noted.



Sec.  35.1300  Purpose and applicability.

    The purpose of this subpart R is to provide standards and methods 
for evaluation and hazard reduction activities required in subparts B, 
C, D, and F through M of this part.



Sec.  35.1305  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.



Sec.  35.1310  References.

    Further guidance information regarding evaluation and hazard 
reduction activities described in this subpart is found in the 
following:
    (a) The HUD Guidelines for the Evaluation and Control of Lead-Based 
Paint Hazards in Housing (Guidelines);
    (b) The EPA Guidance on Residential Lead-Based Paint, Lead-
Contaminated Dust, and Lead Contaminated Soil;
    (c) Guidance, methods or protocols issued by States and Indian 
tribes that have been authorized by EPA under 40

[[Page 324]]

CFR 745.324 to administer and enforce lead-based paint programs.



Sec.  35.1315  Collection and laboratory analysis of samples.

    All paint chip, dust, or soil samples shall be collected and 
analyzed in accordance with standards established either by a State or 
Indian tribe under a program authorized by EPA in accordance with 40 CFR 
part 745, subpart Q, or by the EPA in accordance with 40 CFR 745.227, 
and as further provided in this subpart.



Sec.  35.1320  Lead-based paint inspections, paint testing, risk 
assessments, lead-hazard screens, and reevaluations.

    (a) Lead-based paint inspections and paint testing. Lead-based paint 
inspections shall be performed in accordance with methods and standards 
established either by a State or Tribal program authorized by the EPA 
under 40 CFR 745.324, or by the EPA at 40 CFR 745.227(b) and (h). Paint 
testing to determine the presence or absence of lead-based paint on 
deteriorated paint surfaces or surfaces to be disturbed or replaced 
shall be performed by a certified lead-based paint inspector or risk 
assessor.
    (b) Risk assessments, lead-hazard screens and reevaluations. (1) 
Risk assessments and lead-hazard screens shall be performed in 
accordance with methods and standards established either by a state or 
tribal program authorized by the EPA, or by the EPA at 40 CFR 
745.227(c), (d), and (h) and paragraph (b)(2) of this section. 
Reevaluations shall be performed by a certified risk assessor in 
accordance with Sec.  35.1355(b) and paragraph (b)(2) of this section.
    (2) Risk assessors shall use standards for determining dust-lead 
hazards and soil-lead hazards that are at least as protective as those 
promulgated by the EPA at 40 CFR 745.227(h) or, if such standards are 
not in effect, the following levels for dust or soil:
    (i) Dust. A dust-lead hazard is surface dust that contains a mass-
per-area concentration (loading) of lead, based on wipe samples, equal 
to or exceeding the applicable level in the following table:

                           Dust Lead Standards
------------------------------------------------------------------------
                                                 Surface
                               -----------------------------------------
                                             Interior
                                  Floors,     window
       Evaluation method         [micro]g/    sills,     Window troughs,
                                ft \2\ (mg/  [micro]g/   [micro]g/ft \2\
                                  m \2\)    ft \2\ (mg/    (mg/m \2\)
                                              m \2\)
------------------------------------------------------------------------
Risk Assessment...............   40 (0.43)   250 (2.7)  Not Applicable.
Lead Hazard Screen............   25 (0.27)   125 (1.4)  Not Applicable.
Reevaluation..................   40 (0.43)   250 (2.7)  Not Applicable.
Clearance.....................   40 (0.43)   250 (2.7)  400 (4.3).
------------------------------------------------------------------------
Note 1: ``Floors'' includes carpeted and uncarpeted interior floors.
Note 2: A dust-lead hazard is present or clearance fails when the
  weighted arithmetic mean lead loading for all single-surface or
  composite samples is equal to or greater than the applicable standard.
  For composite samples of two to four subsamples, the standard is
  determined by dividing the standard in the table by one half the
  number of subsamples. See EPA regulations at 40 CFR 745.63 and
  745.227(h)(3)(i).

    (ii) Soil. (A) A soil-lead hazard for play areas frequented by 
children under six years of age is bare soil with lead equal to or 
exceeding 400 parts per million (micrograms per gram).
    (B) For the rest of the yard, a soil-lead hazard is bare soil that 
totals more than 9 square feet (0.8 square meters) per property with 
lead equal to or exceeding an average of 1,200 parts per million 
(micrograms per gram).
    (3) Lead-hazard screens shall be performed in accordance with the 
methods and standards established either by a state or Tribal program 
authorized by the EPA, or by the EPA at 40 CFR 745.227(c), and 
paragraphs (b)(1) and (b)(2) of this section. If the lead-hazard screen 
indicates the need for a follow-up risk assessment (e.g., if dust-lead 
measurements exceed the levels established for lead-hazard screens in 
paragraph (b)(2)(i) of this section), a risk assessment shall be 
conducted in accordance with paragraphs (b)(1) and (b)(2) of this 
section. Dust, soil, and paint samples collected for the lead-hazard 
screen may be used in the risk assessment. If the lead hazard screen 
does not indicate the need for a follow-up risk assessment, no further 
risk assessment is required.
    (c) It is strongly recommended, but not required, that lead-based 
paint inspectors, risk assessors, and sampling technicians provide a 
plain-language summary of the results suitable for posting or 
distribution to occupants in compliance with Sec.  35.125.

[69 FR 34273, June 21, 2004]

[[Page 325]]



Sec.  35.1325  Abatement.

    Abatement shall be performed in accordance with methods and 
standards established either by a State or Indian tribe under a program 
authorized by EPA, or by EPA at 40 CFR 745.227(e), and shall be 
completed by achieving clearance in accordance with Sec.  35.1340. If 
encapsulation or enclosure is used as a method of abatement, ongoing 
lead-based paint maintenance activities shall be performed as required 
by the applicable subpart of this part in accordance with Sec.  35.1355. 
Abatement of an intact, factory-applied prime coating on metal surfaces 
is not required unless the surface is a friction surface.



Sec.  35.1330  Interim controls.

    Interim controls of lead-based paint hazards identified in a risk 
assessment shall be conducted in accordance with the provisions of this 
section. Interim control measures include paint stabilization of 
deteriorated paint, treatments for friction and impact surfaces where 
levels of lead dust are above the levels specified in Sec.  35.1320, 
dust control, and lead-contaminated soil control. As provided by Sec.  
35.155, interim controls may be performed in combination with, or be 
replaced by, abatement methods.
    (a) General requirements. (1) Only those interim control methods 
identified as acceptable methods in a current risk assessment report 
shall be used to control identified hazards, except that, if only paint 
stabilization is required in accordance with subparts F, H, K or M of 
this part, it shall not be necessary to have conducted a risk 
assessment.
    (2) Occupants of dwelling units where interim controls are being 
performed shall be protected during the course of the work in accordance 
with Sec.  35.1345.
    (3) Clearance testing shall be performed at the conclusion of 
interim control activities in accordance with Sec.  35.1340.
    (4) A person performing interim controls must be trained in 
accordance with the hazard communication standard for the construction 
industry issued by the Occupational Safety and Health Administration of 
the U.S. Department of Labor at 29 CFR 1926.59, and either be supervised 
by an individual certified as a lead-based paint abatement supervisor or 
have completed successfully one of the following lead-safe work 
practices courses, except that this supervision or lead-safe work 
practices training requirement does not apply to work that disturbs 
painted surfaces less than the de minimis limits of Sec.  35.1350(d):
    (i) A lead-based paint abatement supervisor course accredited in 
accordance with 40 CFR 745.225;
    (ii) A lead-based paint abatement worker course accredited in 
accordance with 40 CFR 745.225; or
    (iii) A renovator course accredited in accordance with 40 CFR 
745.225.
    (iv) ``The Remodeler's and Renovator's Lead-Based Paint Training 
Program,'' prepared by HUD and the National Association of the 
Remodeling Industry; or
    (v) Another course approved by HUD for this purpose after 
consultation with EPA.
    (b) Paint stabilization. (1) Interim control treatments used to 
stabilize deteriorated lead-based paint shall be performed in accordance 
with the requirements of this section. Interim control treatments of 
intact, factory applied prime coatings on metal surfaces are not 
required. Finish coatings on such surfaces shall be treated by interim 
controls if those coatings contain lead-based paint.
    (2) Any physical defect in the substrate of a painted surface or 
component that is causing deterioration of the surface or component 
shall be repaired before treating the surface or component. Examples of 
defective substrate conditions include dry-rot, rust, moisture-related 
defects, crumbling plaster, and missing siding or other components that 
are not securely fastened.
    (3) Before applying new paint, all loose paint and other loose 
material shall be removed from the surface to be treated. Acceptable 
methods for preparing the surface to be treated include wet scraping, 
wet sanding, and power sanding performed in conjunction with a HEPA 
filtered local exhaust attachment operated according to the 
manufacturer's instructions.
    (4) Dry sanding or dry scraping is permitted only in accordance with

[[Page 326]]

Sec.  35.140(e) (i.e., for electrical safety reasons or for specified 
minor amounts of work).
    (5) Paint stabilization shall include the application of a new 
protective coating or paint. The surface substrate shall be dry and 
protected from future moisture damage before applying a new protective 
coating or paint. All protective coatings and paints shall be applied in 
accordance with the manufacturer's recommendations.
    (6) Paint stabilization shall incorporate the use of safe work 
practices in accordance with Sec.  35.1350.
    (c) Friction and impact surfaces. (1) Friction surfaces are required 
to be treated only if:
    (i) Lead dust levels on the nearest horizontal surface underneath 
the friction surface (e.g., the window sill, window trough, or floor) 
are equal to or greater than the standards specified in 35.1320(b);
    (ii) There is evidence that the paint surface is subject to 
abrasion; and
    (iii) Lead-based paint is known or presumed to be present on the 
friction surface.
    (2) Impact surfaces are required to be treated only if:
    (i) Paint on an impact surface is damaged or otherwise deteriorated;
    (ii) The damaged paint is caused by impact from a related building 
component (such as a door knob that knocks into a wall, or a door that 
knocks against its door frame); and
    (iii) Lead-based paint is known or presumed to be present on the 
impact surface.
    (3) Examples of building components that may contain friction or 
impact surfaces include the following:
    (i) Window systems;
    (ii) Doors;
    (iii) Stair treads and risers;
    (iv) Baseboards;
    (v) Drawers and cabinets; and
    (vi) Porches, decks, interior floors, and any other painted surfaces 
that are abraded, rubbed, or impacted.
    (4) Interim control treatments for friction surfaces shall eliminate 
friction points or treat the friction surface so that paint is not 
subject to abrasion. Examples of acceptable treatments include rehanging 
and/or planing doors so that the door does not rub against the door 
frame, and installing window channel guides that reduce or eliminate 
abrasion of painted surfaces. Paint on stair treads and floors shall be 
protected with a durable cover or coating that will prevent abrasion of 
the painted surfaces. Examples of acceptable materials include 
carpeting, tile, and sheet flooring.
    (5) Interim control treatments for impact surfaces shall protect the 
paint from impact. Examples of acceptable treatments include treatments 
that eliminate impact with the paint surface, such as a door stop to 
prevent a door from striking a wall or baseboard.
    (6) Interim control for impact or friction surfaces does not include 
covering such a surface with a coating or other treatment, such as 
painting over the surface, that does not protect lead-based paint from 
impact or abrasion.
    (d) Chewable surfaces. (1) Chewable surfaces are required to be 
treated only if there is evidence of teeth marks, indicating that a 
child of less than six years of age has chewed on the painted surface, 
and lead-based paint is known or presumed to be present on the surface.
    (2) Interim control treatments for chewable surfaces shall make the 
lead-based paint inaccessible for chewing by children of less than 6 
years of age. Examples include enclosures or coatings that cannot be 
penetrated by the teeth of such children.
    (e) Dust-lead hazard control. (1) Interim control treatments used to 
control dust-lead hazards shall be performed in accordance with the 
requirements of this section. Additional information on dust removal is 
found in the HUD Guidelines, particularly Chapter 11 (see Sec.  
35.1310).
    (2) Dust control shall involve a thorough cleaning of all horizontal 
surfaces, such as interior window sills, window troughs, floors, and 
stairs, but excluding ceilings. All horizontal surfaces, such as floors, 
stairs, window sills and window troughs, that are rough, pitted, or 
porous shall be covered with a smooth, cleanable covering or coating, 
such as metal coil stock, plastic, polyurethane, or linoleum.
    (3) Surfaces covered by a rug or carpeting shall be cleaned as 
follows:

[[Page 327]]

    (i) The floor surface under a rug or carpeting shall be cleaned 
where feasible, including upon removal of the rug or carpeting, with a 
HEPA vacuum or other method of equivalent efficacy.
    (ii) An unattached rug or an attached carpet that is to be removed, 
and padding associated with such rug or carpet, located in an area of 
the dwelling unit with dust-lead hazards on the floor, shall be 
thoroughly vacuumed with a HEPA vacuum or other method of equivalent 
efficacy. Protective measures shall be used to prevent the spread of 
dust during removal of a rug, carpet or padding from the dwelling. For 
example, it shall be misted to reduce dust generation during removal. 
The item(s) being removed shall be wrapped or otherwise sealed before 
removal from the worksite.
    (iii) An attached carpet located in an area of the dwelling unit 
with dust-lead hazards on the floor shall be thoroughly vacuumed with a 
HEPA vacuum or other method of equivalent efficacy if it is not to be 
removed.
    (f) Soil-lead hazards. (1) Interim control treatments used to 
control soil-lead hazards shall be performed in accordance with this 
section.
    (2) Soil with a lead concentration equal to or greater than 5,000 
[micro]g/g of lead shall be abated in accordance with 40 CFR 745.227(e).
    (3) Acceptable interim control methods for soil lead are impermanent 
surface coverings and land use controls.
    (i) Impermanent surface coverings may be used to treat lead-
contaminated soil if applied in accordance with the following 
requirements. Examples of acceptable impermanent coverings include 
gravel, bark, sod, and artificial turf.
    (A) Impermanent surface coverings selected shall be designed to 
withstand the reasonably-expected traffic. For example, if the area to 
be treated is heavily traveled, neither grass or sod shall be used.
    (B) When loose impermanent surface coverings such as bark or gravel 
are used, they shall be applied in a thickness not less than six inches 
deep.
    (C) The impermanent surface covering material shall not contain more 
than 400 [micro]g/g of lead.
    (D) Adequate controls to prevent erosion shall be used in 
conjunction with impermanent surface coverings.
    (ii) Land use controls may be used to reduce exposure to soil-lead 
hazards only if they effectively control access to areas with soil-lead 
hazards. Examples of land use controls include: fencing, warning signs, 
and landscaping.
    (A) Land use controls shall be implemented only if residents have 
reasonable alternatives to using the area to be controlled.
    (B) If land use controls are used for a soil area that is subject to 
erosion, measures shall be taken to contain the soil and control 
dispersion of lead.

[64 FR 50218, Sept. 15, 1999, as amended at 69 FR 34274, June 21, 2004; 
79 FR 35043, June 19, 2014; 82 FR 4172, Jan. 13, 2017]



Sec.  35.1335  Standard treatments.

    Standard treatments shall be conducted in accordance with this 
section.
    (a) Paint stabilization. All deteriorated paint on exterior and 
interior surfaces located on the residential property shall be 
stabilized in accordance with Sec.  35.1330(a)(b), or abated in 
accordance with Sec.  35.1325.
    (b) Smooth and cleanable horizontal surfaces. All horizontal 
surfaces, such as uncarpeted floors, stairs, interior window sills and 
window troughs, that are rough, pitted, or porous, shall be covered with 
a smooth, cleanable covering or coating, such as metal coil stock, 
plastic, polyurethane, or linoleum.
    (c) Correcting dust-generating conditions. Conditions causing 
friction or impact of painted surfaces shall be corrected in accordance 
with Sec.  35.1330(c)(4)-(6).
    (d) Bare residential soil. Bare soil shall be treated in accordance 
with the requirements of Sec.  35.1330, unless it is found not to be a 
soil-lead hazard in accordance with Sec.  35.1320(b).
    (e) Safe work practices. All standard treatments described in 
paragraphs (a) through (d) of this section shall incorporate the use of 
safe work practices in accordance with Sec.  35.1350.
    (f) Clearance. A clearance examination shall be performed in 
accordance with Sec.  35.1340 at the conclusion of any lead hazard 
reduction activities.

[[Page 328]]

    (g) Qualifications. An individual performing standard treatments 
must meet the training and/or supervision requirements of Sec.  
35.1330(a)(4).



Sec.  35.1340  Clearance.

    Clearance examinations required under subparts B, C, D, F through M, 
and R, of this part shall be performed in accordance with the provisions 
of this section.
    (a) Clearance following abatement. Clearance examinations performed 
following abatement of lead-based paint or lead-based paint hazards 
shall be performed in accordance with 40 CFR 745.227(e) and paragraphs 
(c)-(f) of this section. Such clearances shall be performed by a person 
certified to perform risk assessments or lead-based paint inspections.
    (b) Clearance following activities other than abatement. Clearance 
examinations performed following interim controls, paint stabilization, 
standard treatments, ongoing lead-based paint maintenance, or 
rehabilitation shall be performed in accordance with the requirements of 
this paragraph (b) and paragraphs (c) through (g) of this section. 
Clearance is not required if the work being cleared does not disturb 
painted surfaces of a total area more than that set forth in Sec.  
35.1350(d).
    (1) Qualified personnel. Clearance examinations shall be performed 
by:
    (i) A certified risk assessor;
    (ii) A certified lead-based paint inspector;
    (iii) A person who has successfully completed a training course for 
sampling technicians (or a discipline of similar purpose and title) that 
is developed or accepted by EPA or a State or tribal program authorized 
by EPA pursuant to 40 CFR part 745, subpart Q, and that is given by a 
training provider accredited by EPA or a State or Indian Tribe for 
training in lead-based paint inspection or risk assessment, provided a 
certified risk assessor or a certified lead-based paint inspector 
approves the work of the sampling technician and signs the report of the 
clearance examination; or
    (iv) A technician licensed or certified by EPA or a State or Indian 
Tribe to perform clearance examinations without the approval of a 
certified risk assessor or certified lead-based paint inspector, 
provided that a clearance examination by such a licensed or certified 
technician shall be performed only for a single-family property or 
individual dwelling units and associated common areas in a multi-unit 
property, and provided further that a clearance examination by such a 
licensed or certified sampling technician shall not be performed using 
random sampling of dwelling units or common areas in multifamily 
properties, except that a clearance examination performed by such a 
licensed or certified sampling technician is acceptable for any 
residential property if the clearance examination is approved and the 
report signed by a certified risk assessor or a certified lead-based 
paint inspector.
    (2) Required activities. (i) Clearance examinations shall include a 
visual assessment, dust sampling, submission of samples for analysis for 
lead in dust, interpretation of sampling results, and preparation of a 
report. Soil sampling is not required. Clearance examinations shall be 
performed in dwelling units, common areas, and exterior areas in 
accordance with this section and the steps set forth at 40 CFR 
745.227(e)(8). If clearance is being performed after lead-based paint 
hazard reduction, paint stabilization, maintenance, or rehabilitation 
that affected exterior surfaces but did not disturb interior painted 
surfaces or involve elimination of an interior dust-lead hazard, 
interior clearance is not required if window, door, ventilation, and 
other openings are sealed during the exterior work. If clearance is 
being performed for more than 10 dwelling units of similar construction 
and maintenance, as in a multifamily property, random sampling for the 
purpose of clearance may be conducted in accordance with 40 CFR 
745.227(e)(9).
    (ii) The visual assessment shall be performed to determine if 
deteriorated paint surfaces and/or visible amounts of dust, debris, 
paint chips or other residue are still present. Both exterior and 
interior painted surfaces shall be examined for the presence of 
deteriorated paint. If deteriorated paint or visible dust, debris or 
residue are present in areas subject to dust sampling, they must be 
eliminated prior to

[[Page 329]]

the continuation of the clearance examination, except elimination of 
deteriorated paint is not required if it has been determined, through 
paint testing or a lead-based paint inspection, that the deteriorated 
paint is not lead-based paint. If exterior painted surfaces have been 
disturbed by the hazard reduction, maintenance or rehabilitation 
activity, the visual assessment shall include an assessment of the 
ground and any outdoor living areas close to the affected exterior 
painted surfaces. Visible dust or debris in living areas shall be 
cleaned up and visible paint chips on the ground shall be removed.
    (iii) Dust samples shall be wipe samples and shall be taken on 
floors and, where practicable, interior window sills and window troughs. 
Dust samples shall be collected and analyzed in accordance with Sec.  
35.1315 of this part.
    (iv) Clearance reports shall be prepared in accordance with 
paragraph (c) of this section.
    (c) Clearance report. When clearance is required, the designated 
party shall ensure that a clearance report is prepared that provides 
documentation of the hazard reduction or maintenance activity as well as 
the clearance examination. When abatement is performed, the report shall 
be an abatement report in accordance with 40 CFR 745.227(e)(10). When 
another hazard reduction or maintenance activity requiring a clearance 
report is performed, the report shall include the following information:
    (1) The address of the residential property and, if only part of a 
multifamily property is affected, the specific dwelling units and common 
areas affected.
    (2) The following information on the clearance examination:
    (i) The date(s) of the clearance examination;
    (ii) The name, address, and signature of each person performing the 
clearance examination, including certification number;
    (iii) The results of the visual assessment for the presence of 
deteriorated paint and visible dust, debris, residue or paint chips;
    (iv) The results of the analysis of dust samples, in [micro]g/
sq.ft., by location of sample; and
    (v) The name and address of each laboratory that conducted the 
analysis of the dust samples, including the identification number for 
each such laboratory recognized by EPA under section 405(b) of the Toxic 
Substances Control Act (15 U.S.C. 2685(b)).
    (3) The following information on the hazard reduction or maintenance 
activity for which clearance was performed:
    (i) The start and completion dates of the hazard reduction or 
maintenance activity;
    (ii) The name and address of each firm or organization conducting 
the hazard reduction or maintenance activity and the name of each 
supervisor assigned;
    (iii) A detailed written description of the hazard reduction or 
maintenance activity, including the methods used, locations of exterior 
surfaces, interior rooms, common areas, and/or components where the 
hazard reduction activity occurred, and any suggested monitoring of 
encapsulants or enclosures; and
    (iv) If soil hazards were reduced, a detailed description of the 
location(s) of the hazard reduction activity and the method(s) used.
    (d) Standards. The clearance standards in Sec.  35.1320(b)(2) shall 
apply. If test results equal or exceed the standards, the dwelling unit, 
worksite, or common area represented by the sample fails the clearance 
examination.
    (e) Clearance failure. All surfaces represented by a failed 
clearance sample shall be recleaned or treated by hazard reduction, and 
retested, until the applicable clearance level in Sec.  35.1320(b)(2) is 
met.
    (f) Independence. Clearance examinations shall be performed by 
persons or entities independent of those performing hazard reduction or 
maintenance activities, unless the designated party uses qualified in-
house employees to conduct clearance. An in-house employee shall not 
conduct both a hazard reduction or maintenance activity and its 
clearance examination.
    (g) Worksite clearance. Clearance of only the worksite is permitted 
after work covered by Sec. Sec.  35.930, 35.1330, 35.1335, or 35.1355, 
when containment is used to ensure that dust and debris generated by the 
work is kept within

[[Page 330]]

the worksite. Otherwise, clearance must be of the entire dwelling unit, 
common area, or outbuilding, as applicable. When clearance is of an 
interior worksite that is not an entire dwelling unit, common area, or 
outbuilding, dust samples shall be taken for paragraph (b) of this 
section as follows:
    (1) Sample, from each of at least four rooms, hallways, stairwells, 
or common areas within the dust containment area:
    (i) The floor (one sample); and
    (ii) Windows (one interior sill sample and one trough sample, if 
present); and
    (2) Sample the floor in a room, hallway, stairwell, or common area 
connected to the dust containment area, within five feet outside the 
area (one sample).

[64 FR 50218, Sept. 15, 1999, as amended at 69 FR 34274, June 21, 2004]



Sec.  35.1345  Occupant protection and worksite preparation.

    This section establishes procedures for protecting dwelling unit 
occupants and the environment from contamination from lead-contaminated 
or lead-containing materials during hazard reduction activities.
    (a) Occupant protection. (1) Occupants shall not be permitted to 
enter the worksite during hazard reduction activities (unless they are 
employed in the conduct of these activities at the worksite), until 
after hazard reduction work has been completed and clearance, if 
required, has been achieved.
    (2) Occupants shall be temporarily relocated before and during 
hazard reduction activities to a suitable, decent, safe, and similarly 
accessible dwelling unit that does not have lead-based paint hazards, 
except if:
    (i) Treatment will not disturb lead-based paint, dust-lead hazards 
or soil-lead hazards;
    (ii) Only the exterior of the dwelling unit is treated, and windows, 
doors, ventilation intakes and other openings in or near the worksite 
are sealed during hazard control work and cleaned afterward, and entry 
free of dust-lead hazards, soil-lead hazards, and debris is provided;
    (iii) Treatment of the interior will be completed within one period 
of 8-daytime hours, the worksite is contained so as to prevent the 
release of leaded dust and debris into other areas, and treatment does 
not create other safety, health or environmental hazards (e.g., exposed 
live electrical wiring, release of toxic fumes, or on-site disposal of 
hazardous waste); or
    (iv) Treatment of the interior will be completed within 5 calendar 
days, the worksite is contained so as to prevent the release of leaded 
dust and debris into other areas, treatment does not create other 
safety, health or environmental hazards; and, at the end of work on each 
day, the worksite and the area within at least 10 feet (3 meters) of the 
containment area is cleaned to remove any visible dust or debris, and 
occupants have safe access to sleeping areas, and bathroom and kitchen 
facilities.
    (3) The dwelling unit and the worksite shall be secured against 
unauthorized entry, and occupants' belongings protected from 
contamination by dust-lead hazards and debris during hazard reduction 
activities. Occupants' belongings in the containment area shall be 
relocated to a safe and secure area outside the containment area, or 
covered with an impermeable covering with all seams and edges taped or 
otherwise sealed.
    (b) Worksite preparation. (1) The worksite shall be prepared to 
prevent the release of leaded dust, and contain lead-based paint chips 
and other debris from hazard reduction activities within the worksite 
until they can be safely removed. Practices that minimize the spread of 
leaded dust, paint chips, soil and debris shall be used during worksite 
preparation.
    (2) A warning sign shall be posted at each entry to a room where 
hazard reduction activities are conducted when occupants are present; or 
at each main and secondary entryway to a building from which occupants 
have been relocated; or, for an exterior hazard reduction activity, 
where it is easily read 20 feet (6 meters) from the edge of the hazard 
reduction activity worksite. Each warning sign shall be as described in 
29 CFR 1926.62(m), except that it shall be posted irrespective of 
employees' lead exposure and, to the extent practicable, provided in the 
occupants' primary language.

[[Page 331]]



Sec.  35.1350  Safe work practices.

    (a) Prohibited methods. Methods of paint removal listed in Sec.  
35.140 shall not be used.
    (b) Occupant protection and worksite preparation. Occupants and 
their belongings shall be protected, and the worksite prepared, in 
accordance with Sec.  35.1345. A person performing this work shall be 
trained on hazards and either be supervised or have completed 
successfully one of the specified courses, in accordance with Sec.  
35.1330(a)(4).
    (c) Specialized cleaning. After hazard reduction activities have 
been completed, the worksite shall be cleaned using cleaning methods, 
products, and devices that are successful in cleaning up dust-lead 
hazards, such as a HEPA vacuum or other method of equivalent efficacy, 
and lead-specific detergents or equivalent.
    (d) De minimis levels. Safe work practices are not required when 
maintenance or hazard reduction activities do not disturb painted 
surfaces that total more than:
    (1) 20 square feet (2 square meters) on exterior surfaces;
    (2) 2 square feet (0.2 square meters) in any one interior room or 
space; or
    (3) 10 percent of the total surface area on an interior or exterior 
type of component with a small surface area. Examples include window 
sills, baseboards, and trim.

[64 FR 50218, Sept. 15, 1999, as amended at 69 FR 34275, June 21, 2004]



Sec.  35.1355  Ongoing lead-based paint maintenance and reevaluation activities.

    (a) Maintenance. Maintenance activities shall be conducted in 
accordance with paragraphs (a)(2)-(6) of this section, except as 
provided in paragraph (a)(1) of this section.
    (1) Maintenance activities need not be conducted in accordance with 
this section if a lead-based paint inspection indicates that no lead-
based paint is present in the dwelling units, common areas, and on 
exterior surfaces, or a clearance report prepared in accordance with 
Sec.  35.1340(a) indicates that all lead-based paint has been removed.
    (2) A visual assessment for deteriorated paint, bare soil, and the 
failure of any hazard reduction measures shall be performed at unit 
turnover and every twelve months.
    (3) (i) Deteriorated paint. All deteriorated paint on interior and 
exterior surfaces located on the residential property shall be 
stabilized in accordance with Sec.  35.1330(a)(b), except for any paint 
that an evaluation has found is not lead-based paint.
    (ii) Bare soil. All bare soil shall be treated with standard 
treatments in accordance with Sec.  35.1335(d) through (g), or interim 
controls in accordance with Sec.  35.1330(a) and (f); except for any 
bare soil that a current evaluation has found is not a soil-lead hazard.
    (4) Safe work practices, in accordance with sec. 35.1350, shall be 
used when performing any maintenance or renovation work that disturbs 
paint that may be lead-based paint.
    (5) Any encapsulation or enclosure of lead-based paint or lead-based 
paint hazards which has failed to maintain its effectiveness shall be 
repaired, or abatement or interim controls shall be performed in 
accordance with Sec. Sec.  35.1325 or 35.1330, respectively.
    (6) Clearance testing of the worksite shall be performed at the 
conclusion of repair, abatement or interim controls in accordance with 
Sec.  35.1340.
    (7) Each dwelling unit shall be provided with written notice asking 
occupants to report deteriorated paint and, if applicable, failure of 
encapsulation or enclosure, along with the name, address and telephone 
number of the person whom occupants should contact. The language of the 
notice shall be in accordance with Sec.  35.125(c)(3). The designated 
party shall respond to such report and stabilize the deteriorated paint 
or repair the encapsulation or enclosure within 30 days.
    (b) Reevaluation. Reevaluation shall be conducted in accordance with 
this paragraph (b), and the designated party shall conduct interim 
controls of lead-based paint hazards found in the reevaluation.
    (1) Reevaluation shall be conducted if hazard reduction has been 
conducted to reduce lead-based paint hazards found in a risk assessment 
or if standard treatments have been conducted, except that reevaluation 
is not required if any of the following cases are met:

[[Page 332]]

    (i) An initial risk assessment found no lead-based paint hazards;
    (ii) A lead-based paint inspection found no lead-based paint; or
    (iii) All lead-based paint was abated in accordance with Sec.  
35.1325, provided that no failures of encapsulations or enclosures have 
been found during visual assessments conducted in accordance with Sec.  
35.1355(a)(2) or during other observations by maintenance and repair 
workers in accordance with Sec.  35.1355(a)(5) since the encapsulations 
or enclosures were performed.
    (2) Reevaluation shall be conducted to identify:
    (i) Deteriorated paint surfaces with known or suspected lead-based 
paint;
    (ii) Deteriorated or failed interim controls of lead-based paint 
hazards or encapsulation or enclosure treatments;
    (iii) Dust-lead hazards; and
    (iv) Soil that is newly bare with lead levels equal to or above the 
standards in Sec.  35.1320(b)(2).
    (3) Each reevaluation shall be performed by a certified risk 
assessor.
    (4) Each reevaluation shall be conducted in accordance with the 
following schedule if a risk assessment or other evaluation has found 
deteriorated lead-based paint in the residential property, a soil-lead 
hazard, or a dust-lead hazard on a floor or interior window sill. 
(Window troughs are not sampled during reevaluation). The first 
reevaluation shall be conducted no later than two years from completion 
of hazard reduction. Subsequent reevaluation shall be conducted at 
intervals of two years, plus or minus 60 days. To be exempt from 
additional reevaluation, at least two consecutive reevaluations 
conducted at such two-year intervals must be conducted without finding 
lead-based paint hazards or a failure of an encapsulation or enclosure. 
If, however, a reevaluation finds lead-based paint hazards or a failure, 
at least two more consecutive reevaluations conducted at such two year 
intervals must be conducted without finding lead-based paint hazards or 
a failure.
    (5) Each reevaluation shall be performed as follows:
    (i) Dwelling units and common areas shall be selected and 
reevaluated in accordance with Sec.  35.1320(b).
    (ii) The worksites of previous hazard reduction activities that are 
similar on the basis of their original lead-based paint hazard and type 
of treatment shall be grouped. Worksites within such groups shall be 
selected and reevaluated in accordance with Sec.  35.1320(b).
    (6) Each reevaluation shall include reviewing available information, 
conducting selected visual assessment, recommending responses to hazard 
reduction omissions or failures, performing selected evaluation of 
paint, soil and dust, and recommending response to newly-found lead-
based paint hazards.
    (i) Review of available information. The risk assessor shall review 
any available past evaluation, hazard reduction and clearance reports, 
and any other available information describing hazard reduction 
measures, ongoing maintenance activities, and relevant building 
operations.
    (ii) Visual assessment. The risk assessor shall:
    (A) Visually evaluate all lead-based paint hazard reduction 
treatments, any known or suspected lead-based paint, any deteriorated 
paint, and each exterior site, and shall identify any new areas of bare 
soil;
    (B) Determine acceptable options for controlling the hazard; and
    (C) Await the correction of any hazard reduction omission or failure 
and the reduction of any lead-based paint hazard before sampling any 
dust or soil the risk assessor determines may reasonably be associated 
with such hazard.
    (iii) Reaction to hazard reduction omission or failure. If any 
hazard reduction control has not been implemented or is failing (e.g., 
an encapsulant is peeling away from the wall, a paint-stabilized surface 
is no longer intact, or gravel covering an area of bare soil has worn 
away), or deteriorated lead-based paint is present, the risk assessor 
shall:
    (A) Determine acceptable options for controlling the hazard; and
    (B) Await the correction of any hazard reduction omission or failure 
and the reduction of any lead-based paint hazard before sampling any 
dust or soil

[[Page 333]]

the risk assessor determines may reasonably be associated with such 
hazard.
    (iv) Selected paint, soil and dust evaluation. (A) The risk assessor 
shall sample deteriorated paint surfaces identified during the visual 
assessment and have the samples analyzed, in accordance with 40 CFR 
745.227(b)(3)(4), but only if reliable information about lead content is 
unavailable.
    (B) The risk assessor shall evaluate new areas of bare soil 
identified during the visual assessment. Soil samples shall be collected 
and analyzed in accordance with 40 CFR 745.227(d)(8)-(11), but only if 
the soil lead levels have not been previously measured.
    (C) The risk assessor shall take selected dust samples and have them 
analyzed. Dust samples shall be collected and analyzed in accordance 
with Sec.  35.1320(b). At least two composite samples, one from floors 
and the other from interior window sills, shall be taken in each 
dwelling unit and common area selected. Each composite sample shall 
consist of four individual samples, each collected from a different room 
or area. If the dwelling unit contains both carpeted and uncarpeted 
living areas, separate floor samples are required from the carpeted and 
uncarpeted areas. Equivalent single-surface sampling may be used instead 
of composite sampling.
    (7) The risk assessor shall provide the designated party with a 
written report documenting the presence or absence of lead-based paint 
hazards, the current status of any hazard reduction and standard 
treatment measures used previously and any newly-conducted evaluation 
and hazard reduction activities. The report shall include the 
information in 40 CFR 745.227(d)(11), and shall:
    (i) Identify any lead-based paint hazards previously detected and 
discuss the effectiveness of any hazard reduction or standard treatment 
measures used, and list those for which no measures have been used.
    (ii) Describe any new hazards found and present the owner with 
acceptable control options and their accompanying reevaluation 
schedules.
    (iii) Identify when the next reevaluation, if any, must occur, in 
accordance with the requirements of paragraph (b)(4) of this section.
    (c) Response to the reevaluation--(1) Hazard reduction omission or 
failure found by a reevaluation. The designated party shall respond in 
accordance with paragraph (b)(6)(iii)(A) of this section to a report by 
the risk assessor of a hazard reduction control that has not been 
implemented or is failing, or that deteriorated lead-based paint is 
present.
    (2) Newly-identified lead-based paint hazard found by a 
reevaluation. The designated party shall treat each:
    (i) Dust-lead hazard or paint lead hazard by cleaning or hazard 
reduction measures, which are considered completed when clearance is 
achieved in accordance with Sec.  35.1340.
    (ii) Soil-lead hazard by hazard reduction measures, which are 
considered completed when clearance is achieved in accordance with Sec.  
35.1340.

[64 FR 50218, Sept. 15, 1999, as amended at 69 FR 34275, June 21, 2004]



PART 40_ACCESSIBILITY STANDARDS FOR DESIGN, CONSTRUCTION, AND ALTERATION
OF PUBLICLY OWNED RESIDENTIAL STRUCTURES--Table of Contents



Sec.
40.1 Purpose.
40.2 Definition of ``residential structure''.
40.3 Applicability.
40.4 Standards.
40.5 [Reserved]
40.6 Records.
40.7 Availability of Accessibility Standards.

    Authority: 42 U.S.C. 3535(d), 4153.

    Source: 36 FR 24437, Dec. 22, 1971, unless otherwise noted.



Sec.  40.1  Purpose.

    This part prescribes standards for the design, construction, and 
alteration of publicly owned residential structures to insure that 
physically handicapped persons will have ready access to, and use of, 
such structures.



Sec.  40.2  Definition of ``residential structure''.

    (a) As used in this part, the term residential structure means a 
residential structure (other than a privately

[[Page 334]]

owned residential structure and a residential structure on a military 
reservation):
    (1) Constructed or altered by or on behalf of the United States;
    (2) Leased in whole or in part by the United States after August 12, 
1968, if constructed or altered in accordance with plans and 
specifications of the United States; or
    (3) Financed in whole or in part by a grant or loan made by the 
United States after August 12, 1968, if such residential structure is 
subject to standards for design, construction, or alteration issued 
under authority of the law authorizing such grant or loan.
    (b) As used in this part, residential structure includes the 
following:
    (1) Any residential structure which, in whole or in part, is 
intended for occupancy by the physically handicapped or designed for 
occupancy by the elderly;
    (2) All elevator residential structures;
    (3) Any residential structure that contains 15 or more housing 
units, unless otherwise specifically prescribed by the Uniform Federal 
Accessibility Standards contained in appendix A to this part.
    (4) Nonresidential structures appurtenant to a residential structure 
covered under this part.

[36 FR 24437, Dec. 22, 1971, as amended at 49 FR 31620, Aug. 7, 1984]



Sec.  40.3  Applicability.

    (a) The standards prescribed in Sec.  40.4 are applicable to 
residential structures designed after the effective date of this part. 
If the design of a structure commenced prior to that date, the standards 
shall be made applicable to the maximum extent practicable, as 
determined by the head of the department, agency, or instrumentality of 
the United States concerned. If no design stage is involved in the 
construction or alteration of a residential structure, the standards of 
Sec.  40.4 shall be applicable to construction or alteration for which 
bids are solicited after the effective date of this part.
    (b) The standards prescribed in Sec.  40.4 are not applicable to:
    (1) Any portion of a residential structure or its grounds which need 
not, because of its intended use, be made accessible to, or usable by, 
the public or by physically handicapped persons;
    (2) The alteration of an existing residential structure to the 
extent that the alteration does not involve work which is related to the 
standards of this part; or
    (3) The alteration of an existing building, or of such portions 
thereof, to which application of the standards is not structurally 
feasible.



Sec.  40.4  Standards.

    Residential structures subject to this part shall be designed, 
constructed or altered to ensure that physically handicapped persons 
have access to, and use of, these structures. This requirement is 
satisfied by using the specifications contained in appendix A to this 
part, the Uniform Federal Accessibility Standards (UFAS).

[49 FR 31621, Aug. 7, 1984]



Sec.  40.5  [Reserved]



Sec.  40.6  Records.

    The administering agency's file on each contract, grant, or loan 
involving the design, construction, or alteration of a residential 
structure shall include appropriate documentation indicating: (a) That 
the standards prescribed in Sec.  40.4 are applicable to and have been 
or will be incorporated in the residential structure, or (b) that the 
grant or loan has been or will be made subject to the requirement that 
the standards are applicable and will be incorporated in the residential 
structure. The file should also indicate any modification or waiver of 
the standards which has been issued by the Secretary of HUD.



Sec.  40.7  Availability of Accessibility Standards.

    Copies of the Uniform Federal Accessibility Standards are available 
from the Office of Fair Housing and Equal Opportunity, U.S. Department 
of Housing and Urban Development, Room 5230, 451 Seventh Street, SW., 
Washington, DC 20410, telephone (202) 755-5404 (this is not a toll-free 
number). Hearing or speech-impaired individuals may call HUD's TDD 
number (202) 708-0113 or 1-800-877-8399 (Federal Information Relay 
Service TDD). (Other than

[[Page 335]]

the ``800'' number, these are not toll-free numbers.)

[61 FR 5204, Feb. 9, 1996]



PART 41_POLICIES AND PROCEDURES FOR THE ENFORCEMENT OF STANDARDS 
AND REQUIREMENTS FOR ACCESSIBILITY BY THE PHYSICALLY HANDICAPPED
--Table of Contents



Sec.
41.1 Applicability.
41.2 Definitions.
41.3 Assurance and declaration required.
41.4 Waiver or modification of standards.
41.5 Achieving compliance.
41.6 Matters involving the Architectural and Transportation Barriers 
          Compliance Board.

    Authority: Architectural Barriers Act of 1968, as amended by Pub. L. 
90-480, 42 U.S.C. 4151 et seq.

    Source: 44 FR 62806, Oct. 31, 1979, unless otherwise noted.



Sec.  41.1  Applicability.

    This part sets forth policies and procedures for the enforcement of 
standards and requirements for accessibility by the physically 
handicapped imposed:
    (a) For nonresidential buildings or facilities by regulations issued 
by the General Services Administration at subchapter D of the Federal 
Property Management Regulations, subpart 101-19.6--Accommodations for 
the Physically Handicapped, or
    (b) By regulation or contract under any other program of the 
Department, except a program subject only to standards or requirements 
at 24 CFR part 8 imposed pursuant to section 504 of the Rehabilitation 
Act of 1973.

The policies and procedures of this part shall apply after the effective 
date of these regulations to all complaints received, and/or findings of 
noncompliance made, regarding buildings or facilities subject to such 
regulatory or contractural requirements.



Sec.  41.2  Definitions.

    As used in this part, the term Secretary means the Secretary of 
Housing and Urban Development, or to the extent of any delegation of 
authority by the Secretary to act under this part, any other Department 
Official to whom authority has been delegated.



Sec.  41.3  Assurance and declaration required.

    (a) Each Assistant Secretary shall, as a condition for approval of 
any contract or application for assistance under a program imposing 
standards and/or requirements for accessibility which are subject to 
this part, require an assurance of compliance with those standards and 
requirements. Such assurance shall be in a form acceptable to the 
Secretary.
    (b) For each project covered under this part, except a project 
subject to Departmental examinations and inspections as set forth in 
Sec.  41.5(a), the responsible Assistant Secretary shall require a 
declaration as to project drawings, specifications, and other 
construction documents. The declaration shall be signed by the licensed, 
or registered, architect or engineer, or by such other responsible 
official as designated by HUD, who has prepared such construction 
documents. The declaration shall affirm that the proposed project, to 
the best knowledge and belief of the declarer, conforms to applicable 
accessibility design standards and requirements. The declaration 
statement shall be in a form acceptable to the Secretary.



Sec.  41.4  Waiver or modification of standards.

    (a) The applicability of standards and requirements for 
accessibility by the physically handicapped may be waived or modified on 
a case-by-case basis upon a written request from a recipient of a 
Departmental grant or loan or from a Departmental agency leasing a 
building or facility.
    (b) For residential buildings or facilities, a waiver or 
modification may be granted only by the Secretary.
    (c) Upon the recommendation of an Assistant Secretary, a waiver or 
modification for nonresidential buildings or facilities may be granted 
only by the Administrator, General Services Administration.

[[Page 336]]

    (d) No request for a waiver or modification shall be recommended for 
approval by an Assistant Secretary or approved by the Secretary unless 
the following criteria obtain:
    (1) The granting of the waiver or modification is based upon 
findings of fact, and is not inconsistent with the provisions of the 
Architectural Barriers Act, and
    (2) Application of the requirement or standard would adversely 
affect the purposes of the Departmental program under which the loan or 
grant is being provided or for which the building or facility is being 
leased.
    (e) Requests for a waiver or modification shall be submitted to the 
appropriate Assistant Secretary for review. Each request shall include:
    (1) The name and address of the requestor.
    (2) The name and location of the involved building or facility.
    (3) Any applicable plans, drawings, specifications or other 
descriptions of the building or facility.
    (4) The standard provision or requirement from which the requestor 
seeks a waiver or modification.
    (5) A description of the building or facility as to its 
accessibility for the physically handicapped and how the waiving or 
modification of a standard or requirement would affect that 
accessibility.
    (6) A statement of the facts which establish that the criteria of 
paragraph (d) of this section would be satisfied.
    (7) A description of the steps taken, or to be taken, to comply with 
standards and requirements for which a waiver or modification is not 
being requested.
    (8) Such other information as the requestor or the responsible 
Assistant Secretary deems appropriate or necessary.
    (f) If the responsible Assistant Secretary finds that the criteria 
of paragraph (d) of this section are satisfied, then he or she shall 
submit the request along with his or her recommendations to the 
Secretary for action or for referral to the Administrator, General 
Services Administration for action. In reviewing request for waiver and 
modifications, the Secretary shall assure consistent Department policy 
regarding the removal of architectural barriers and accessibility by 
physically handicapped persons.
    (g) All waivers and modifications granted pursuant to this part 
shall have only future effect on; and are limited to cases for which the 
request is made.



Sec.  41.5  Achieving compliance.

    (a) Examinations and inspections. If, for any project, an Assistant 
Secretary requires Departmental architectural and engineering 
examinations of drawings and specifications or other construction 
documents or requires Departmental architectural and engineering 
inspections during or upon completion of construction, those 
examinations and inspections shall include a determination of compliance 
with standards and requirements for accessibility referenced in this 
part.
    (b) Periodic compliance reviews. The Secretary, in consultation with 
the appropriate Assistant Secretary, shall conduct surveys and 
investigations as deemed appropriate to achieve compliance with 
standards or requirements subject to this part.
    (c) Complaints. Any interested person who has reason to believe that 
there has been noncompliance with standards or requirements subject to 
this part, may, by himself or herself, or by a representative, file a 
written complaint with the responsible Department Official or with the 
Architectural and Transportation Barriers Compliance Board, Washington, 
DC 20201.
    (d) Investigations. The Secretary shall, after consultation with the 
appropriate Assistant Secretary, make a prompt investigation whenever a 
compliance review, report, complaint, or any other information indicates 
a possible failure to comply with standards or requirements subject to 
this part. The investigation should include a determination of the 
authority under which the standards or requirements were imposed and, 
where appropriate, a review of the records kept pursuant to 24 CFR 40.6; 
the circumstances under which the building of facility was designed, 
constructed or altered; and other factors relevant to a determination as 
to whether there has been noncompliance with this part.

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    (e) Resolution of matters. (1) If any examination, inspection, 
periodic compliance review, complaint, or investigation pursuant to this 
section indicates a failure to comply with the applicable standards or 
requirements, the Secretary shall attempt to gain voluntary compliance 
whenever possible.
    (2) If it has been determined that voluntary compliance cannot be 
achieved, the Secretary shall refer the matter to the appropriate 
Assistant Secretary for action pursuant to his or her program authority 
regarding the residential structure or other building or facility under 
investigation, to achieve compliance with the requirements subject to 
this part. The Assistant Secretary shall report to the Secretary within 
30 days of the date of such referral regarding the action taken and the 
schedule and means of achieving compliance, except that the Secretary 
may specify a shorter or longer reporting period, as deeded appropriate.
    (f) Disposition of unresolved complaints. Unresolved complaints 
shall be referred to the Architectural and Transportation Barriers 
Compliance Board to be processed in accordance with 36 CFR part 1150. A 
complaint shall be deemed unresolved if it is not resolved within 90 
days of the date of the filing of the complaint with the Department.
    (g) Compliance action by other individuals. Individuals other than 
the Secretary may receive complaints and undertake other appropriate 
actions to achieve compliance with requirements subject to this part, so 
long as initial notification of such complaints or proposed actions is 
given both to the Secretary and the appropriate Assistant Secretary.



Sec.  41.6  Matters involving the Architectural and Transportation
Barriers Compliance Board.

    (a) Complaints. With respect to any complaint referred to the 
responsible Department Official by the Architectural and Transportation 
Barriers Compliance Board (A&TBCB), the procedures set forth in this 
part shall apply. In such a case, the Secretary shall coordinate all 
investigations and/or other compliance actions to assure that the 
Department resolves any architectural barriers deficiencies so as to 
respond to the A&TBCB within its required 60-day period set forth at 36 
CFR 1150.41 for the informal resolution of complaints.
    (b) Citations. The Office of General Counsel shall, with the 
assistance of the appropriate Assistant Secretary, respond to any 
citation issued by the A&TBCB to the Department alleging noncompliance 
with the standards issued pursuant to the Architectural Barriers Act of 
1968, as amended. The applicable procedures regarding such a citation 
are set forth at 36 CFR part 1150.



PART 42_DISPLACEMENT, RELOCATION ASSISTANCE, AND REAL PROPERTY ACQUISITION 
FOR HUD AND HUD-ASSISTED PROGRAMS--Table of Contents



                            Subpart A_General

Sec.
42.1 Applicable rules.

Subpart B [Reserved]

  Subpart C_Requirements Under Section 104(d) of Housing and Community 
                         Development Act of 1974

42.301 Applicability.
42.305 Definitions.
42.325 Residential antidisplacement and relocation assistance plan.
42.350 Relocation assistance for displaced persons.
42.375 One-for-one replacement of lower-income dwelling units.
42.390 Appeals.

    Authority: 42 U.S.C. 3535(d), 4601, 5304, and 12705(b).

    Source: 61 FR 51757, Oct. 3, 1996, unless otherwise noted.



                            Subpart A_General



Sec.  42.1  Applicable rules.

    (a) URA. HUD-assisted programs and projects are subject to the 
Uniform Relocation Assistance and Real Property Acquisition Policies Act 
of 1970, 42 U.S.C. 4601 (URA) (42 U.S.C. 4601), and implementing 
regulations issued by the Department of Transportation at 49 CFR part 
24.
    (b) Section 104(d). In addition to the URA, the Community 
Development

[[Page 338]]

Block Grant (CDBG), Urban Development Action Grant (UDAG), and HOME 
Investment Partnerships (HOME) programs are also subject to section 
104(d) of the Housing and Community Development Act of 1974 (42 U.S.C. 
5304(d)). The provisions applicable to these programs are set out in 
subpart C of this part.
    (c) Additional requirements. Applicable program regulations may 
contain additional relocation provisions.

Subpart B [Reserved]



  Subpart C_Requirements Under Section 104(d) of Housing and Community 
                         Development Act of 1974



Sec.  42.301  Applicability.

    This subpart applies only to CDBG grants under 24 CFR part 570, 
subparts D, F, and I (Entitlement grants, HUD-Administered Small Cities, 
and State programs); grants under 24 CFR part 570, subpart G (Urban 
Development Action Grants), and Loan Guarantees under 24 CFR part 570, 
subpart M; and assistance to State and local governments under 24 CFR 
part 92 (HOME program).



Sec.  42.305  Definitions.

    The terms Fair Market Rent (FMR), HUD, Section 8, and Uniform 
Relocation Act (URA) are defined in part 5 of this title. Otherwise, as 
used in this subpart:
    Comparable replacement dwelling unit means a dwelling unit that:
    (1) Meets the criteria of 49 CFR 24.2(d)(1) through (6); and
    (2) Is available at a monthly cost for rent plus estimated average 
monthly utility costs that does not exceed the ``Total Tenant Payment'' 
determined under Sec.  813.107 of this title, after taking into account 
any rental assistance the household would receive.
    Conversion. (1) This term means altering a housing unit so that it 
is:
    (i) Used for nonhousing purposes;
    (ii) Used for housing purposes, but no longer meets the definition 
of lower-income dwelling unit; or
    (iii) Used as an emergency shelter.
    (2) A housing unit that continues to be used for housing after 
completion of the project is not considered a ``conversion'' if, upon 
completion of the project, the unit is owned and occupied by a person 
who owned and occupied the unit before the project.
    Displaced person means a lower-income person who, in connection with 
an activity assisted under any program subject to this subpart, 
permanently moves from real property or permanently moves personal 
property from real property as a direct result of the demolition or 
conversion of a lower-income dwelling. For purposes of this definition, 
a permanent move includes a move made permanently and:
    (1) After notice by the grantee to move from the property following 
initial submission to HUD of the consolidated plan required of 
entitlement grantees pursuant to Sec.  570.302; of an application for 
assistance pursuant to Sec. Sec.  570.426, 570.430, or 570.465 that is 
thereafter approved; or an application for loan assistance under Sec.  
570.701 that is thereafter approved;
    (2) After notice by the property owner to move from the property, 
following the submission of a request for financial assistance by the 
property owner (or other person in control of the site) that is 
thereafter approved; or
    (3) Before the dates described in this definition, if HUD or the 
grantee determine that the displacement was a direct result of 
conversion or demolition in connection with an activity subject to this 
subpart for which financial assistance has been requested and is 
thereafter approved.
    HCD Act of 1974 means the Housing and Community Development Act of 
1974 (42 U.S.C. 5301 et seq.).
    Lower-income dwelling unit means a dwelling unit with a market rent 
(including utility costs) that does not exceed the applicable Fair 
Market Rent (FMR) for existing housing established under 24 CFR part 
888.
    Lower-income person means, as appropriate, a ``low and moderate 
income person'' as that term is defined in Sec.  570.3 of this title, or 
a ``low-income family'' as that term is defined in Sec.  92.2 of this 
title.

[[Page 339]]

    Recipient means CDBG grantee, UDAG grantee, or the HOME 
participating jurisdiction.
    Standard condition and substandard condition suitable for 
rehabilitation have the meaning the recipient has established for those 
terms in its HUD-approved consolidated plan pursuant to 24 CFR part 91. 
In the case of a unit of general local government funded by a State, 
either the State's definitions for those terms or the definitions 
adopted by the unit of general local government for this purpose shall 
apply.
    Vacant occupiable dwelling unit means a vacant dwelling unit that is 
in a standard condition; a vacant dwelling unit that is in a substandard 
condition, but is suitable for rehabilitation; or a dwelling unit in any 
condition that has been occupied (except by a squatter) at any time 
within the period beginning 3 months before the date of execution of the 
agreement by the recipient covering the rehabilitation or demolition.



Sec.  42.325  Residential antidisplacement and relocation assistance plan.

    (a) Certification. (1) As part of its consolidated plan under 24 CFR 
part 91, the recipient must certify that it has in effect and is 
following a residential antidisplacement and relocation assistance plan.
    (2) A unit of general local government receiving funds from the 
State must certify to the State that it has in effect and is following a 
residential antidisplacement and relocation assistance plan, and that it 
will minimize displacement of persons as a result of assisted 
activities. The State may require the unit of general local government 
to follow the State's plan or permit it to develop its own plan. A unit 
of general local government that develops its own plan must adopt the 
plan and make it public.
    (b) Plan contents. (1) The plan shall indicate the steps that will 
be taken consistent with other goals and objectives of the program, as 
provided in parts 92 and 570 of this title, to minimize the displacement 
of families and individuals from their homes and neighborhoods as a 
result of any assisted activities.
    (2) The plan shall provide for relocation assistance in accordance 
with Sec.  42.350.
    (3) The plan shall provide one-for-one replacement units to the 
extent required by Sec.  42.375.



Sec.  42.350  Relocation assistance for displaced persons.

    A displaced person may choose to receive either assistance under the 
URA and implementing regulations at 49 CFR part 24 or assistance under 
section 104(d) of the HCD Act of 1974, including:
    (a) Advisory services. Advisory services at the levels described in 
49 CFR part 24. A displaced person must be advised of his or her rights 
under the Fair Housing Act (42 U.S.C. 3601-19). If the comparable 
replacement dwelling to be provided to a minority person is located in 
an area of minority concentration, as defined in the recipient's 
consolidated plan, if applicable, the minority person must also be 
given, if possible, referrals to comparable and suitable decent, safe, 
and sanitary replacement dwellings not located in such areas.
    (b) Moving expenses. Payment for moving expenses at the levels 
described in 49 CFR part 24.
    (c) Security deposits and credit checks. The reasonable and 
necessary cost of any security deposit required to rent the replacement 
dwelling unit, and for credit checks required to rent or purchase the 
replacement dwelling unit.
    (d) Interim living costs. The recipient shall reimburse a person for 
actual reasonable out-of-pocket costs incurred in connection with a 
displacement, including moving expenses and increased housing costs, if:
    (1) The person must relocate temporarily because continued occupancy 
of the dwelling unit constitutes a substantial danger to the health or 
safety of the person or the public; or
    (2) The person is displaced from a ``lower-income dwelling unit,'' 
none of the comparable replacement dwelling units to which the person 
has been referred qualifies as a lower-income dwelling unit, and a 
suitable lower-income dwelling unit is scheduled to become available in 
accordance with Sec.  42.375.

[[Page 340]]

    (e) Replacement housing assistance. Persons are eligible to receive 
one of the following two forms of replacement housing assistance:
    (1) Each person must be offered rental assistance equal to 60 times 
the amount necessary to reduce the monthly rent and estimated average 
monthly cost of utilities for a replacement dwelling (comparable 
replacement dwelling or decent, safe, and sanitary replacement dwelling 
to which the person relocates, whichever costs less) to the ``Total 
Tenant Payment,'' as determined under part 813 of this title. All or a 
portion of this assistance may be offered through a certificate or 
voucher for rental assistance (if available) provided under Section 8. 
If a Section 8 certificate or voucher is provided to a person, the 
recipient must provide referrals to comparable replacement dwelling 
units where the owner is willing to participate in the Section 8 Tenant-
Based Assistance Existing Housing Program (see part 982 of this title). 
When provided, cash assistance will generally be in installments, in 
accordance with 42 U.S.C. 3537c; or
    (2) If the person purchases an interest in a housing cooperative or 
mutual housing association and occupies a decent, safe, and sanitary 
dwelling in the cooperative or association, the person may elect to 
receive a payment equal to the capitalized value of 60 times the amount 
that is obtained by subtracting the ``Total Tenant Payment,'' as 
determined under part 813 of this title, from the monthly rent and 
estimated average monthly cost of utilities at a comparable replacement 
dwelling unit. To compute the capitalized value, the installments shall 
be discounted at the rate of interest paid on passbook savings deposits 
by a federally insured financial institution conducting business within 
the recipient's jurisdiction. To the extent necessary to minimize 
hardship to the household, the recipient shall, subject to appropriate 
safeguards, issue a payment in advance of the purchase of the interest 
in the housing cooperative or mutual housing association.



Sec.  42.375  One-for-one replacement of lower-income dwelling units.

    (a) Units that must be replaced. All occupied and vacant occupiable 
lower-income dwelling units that are demolished or converted to a use 
other than as lower-income dwelling units in connection with an assisted 
activity must be replaced with comparable lower-income dwelling units.
    (b) Acceptable replacement units. Replacement lower-income dwelling 
units may be provided by any government agency or private developer and 
must meet the following requirements:
    (1) The units must be located within the recipient's jurisdiction. 
To the extent feasible and consistent with other statutory priorities, 
the units shall be located within the same neighborhood as the units 
replaced.
    (2) The units must be sufficient in number and size to house no 
fewer than the number of occupants who could have been housed in the 
units that are demolished or converted. The number of occupants who 
could have been housed in units shall be determined in accordance with 
applicable local housing occupancy codes. The recipient may not replace 
those units with smaller units (e.g., a 2-bedroom unit with two 1-
bedroom units), unless the recipient has provided the information 
required under paragraph (c)(7) of this section.
    (3) The units must be provided in standard condition. Replacement 
lower-income dwelling units may include units that have been raised to 
standard from substandard condition if:
    (i) No person was displaced from the unit (see definition of 
``displaced person'' in Sec.  42.305); and
    (ii) The unit was vacant for at least 3 months before execution of 
the agreement between the recipient and the property owner.
    (4) The units must initially be made available for occupancy at any 
time during the period beginning 1 year before the recipient makes 
public the information required under paragraph (d) of this section and 
ending 3 years after the commencement of the demolition or 
rehabilitation related to the conversion.

[[Page 341]]

    (5) The units must be designed to remain lower-income dwelling units 
for at least 10 years from the date of initial occupancy. Replacement 
lower-income dwelling units may include, but are not limited to, public 
housing or existing housing receiving Section 8 project-based 
assistance.
    (c) Preliminary information to be made public. Before the recipient 
enters into a contract committing it to provide funds under programs 
covered by this subpart for any activity that will directly result in 
the demolition of lower-income dwelling units or the conversion of 
lower-income dwelling units to another use, the recipient must make 
public, and submit in writing to the HUD field office (or State, in the 
case of a unit of general local government funded by the State), the 
following information:
    (1) A description of the proposed assisted activity;
    (2) The location on a map and number of dwelling units by size 
(number of bedrooms) that will be demolished or converted to a use other 
than for lower-income dwelling units as a direct result of the assisted 
activity;
    (3) A time schedule for the commencement and completion of the 
demolition or conversion;
    (4) The location on a map and the number of dwelling units by size 
(number of bedrooms) that will be provided as replacement dwelling 
units. If such data are not available at the time of the general 
submission, the submission shall identify the general location on an 
area map and the approximate number of dwelling units by size, and 
information identifying the specific location and number of dwelling 
units by size shall be submitted and disclosed to the public as soon as 
it is available;
    (5) The source of funding and a time schedule for the provision of 
replacement dwelling units;
    (6) The basis for concluding that each replacement dwelling unit 
will remain a lower-income dwelling unit for at least 10 years from the 
date of initial occupancy; and
    (7) Information demonstrating that any proposed replacement of 
dwelling units with smaller dwelling units (e.g., a 2-bedroom unit with 
two 1-bedroom units) is consistent with the needs assessment contained 
in its HUD-approved consolidated plan. A unit of general local 
government funded by the State that is not required to submit a 
consolidated plan to HUD must make public information demonstrating that 
the proposed replacement is consistent with the housing needs of lower-
income households in the jurisdiction.
    (d) Replacement not required. (1) In accordance with 42 U.S.C. 
5304(d)(3), the one-for-one replacement requirement of this section does 
not apply to the extent the HUD field office determines, based upon 
objective data, that there is an adequate supply of vacant lower-income 
dwelling units in standard condition available on a nondiscriminatory 
basis within the area.
    (2) The recipient must submit directly to the HUD field office the 
request for determination that the one-for-one replacement requirement 
does not apply. Simultaneously with the submission of the request, the 
recipient must make the submission public and inform interested persons 
that they have 30 days from the date of submission to provide to HUD 
additional information supporting or opposing the request.
    (3) A unit of general local government funded by the State must 
submit the request for determination under this paragraph to the State. 
Simultaneously with the submission of the request, the unit of general 
local government must make the submission public and inform interested 
persons that they have 30 days from the date of submission to provide to 
the State additional information supporting or opposing the request. If 
the State, after considering the submission and the additional data, 
agrees with the request, the State must provide its recommendation with 
supporting information to the field office.



Sec.  42.390  Appeals.

    A person who disagrees with the recipient's determination concerning 
whether the person qualifies as a ``displaced person,'' or with the 
amount of relocation assistance for which the person is eligible, may 
file a written appeal of that determination with the recipient. A person 
who is dissatisfied with the recipient's determination on

[[Page 342]]

his or her appeal may submit a written request for review of that 
determination to the HUD field office (or to the State in the case of a 
unit of general local government funded by the State). If the full 
relief is not granted, the recipient shall advise the person of his or 
her right to seek judicial review.

                         PARTS 43	45 [RESERVED]



PART 50_PROTECTION AND ENHANCEMENT OF ENVIRONMENTAL QUALITY
--Table of Contents



             Subpart A_General: Federal Laws and Authorities

Sec.
50.1 Purpose, authority, and applicability.
50.2 Terms and abbreviations.
50.3 Environmental policy.
50.4 Related Federal laws and authorities.

     Subpart B_General Policy: Responsibilities and Program Coverage

50.10 Basic environmental responsibility.
50.11 Responsibility of the HUD approving official.

                Subpart C_General Policy: Decision Points

50.16 Decision points for policy actions.
50.17 Decision points for projects.

        Subpart D_General Policy: Environmental Review Procedures

50.18 General.
50.19 Categorical exclusions not subject to the Federal laws and 
          authorities cited in Sec.  50.4.
50.20 Categorical exclusions subject to the Federal laws and authorities 
          cited in Sec.  50.4.
50.21 Aggregation.
50.22 Environmental management and monitoring.
50.23 Public participation.
50.24 HUD review of another agency's EIS.

         Subpart E_Environmental Assessments and Related Reviews

50.31 The EA.
50.32 Responsibility for environmental processing.
50.33 Action resulting from the assessment.
50.34 Time delays for exceptional circumstances.
50.35 Use of prior environmental assessments.
50.36 Updating of environmental reviews.

                Subpart F_Environmental Impact Statements

50.41 EIS policy.
50.42 Cases when an EIS is required.
50.43 Emergencies.

    Authority: 42 U.S.C. 3535(d) and 4321-4335; and Executive Order 
11991, 3 CFR, 1977 Comp., p. 123.

    Source: 61 FR 50916, Sept. 27, 1996, unless otherwise noted.



             Subpart A_General: Federal Laws and Authorities



Sec.  50.1  Purpose, authority, and applicability.

    (a) This part implements the policies of the National Environmental 
Policy Act (NEPA) and other environmental requirements (as specified in 
Sec.  50.4).
    (b) NEPA (42 U.S.C. 4321 et seq.), establishes national policy, 
goals and procedures for protecting, restoring and enhancing 
environmental quality. NEPA is implemented by Executive Order 11514 of 
March 5, 1970, (3 CFR, 1966-1970 Comp., p. 902) as amended by Executive 
Order 11991 of May 24, 1977, (3 CFR, 1977 Comp., p. 123) and by the 
Council on Environmental Quality (CEQ) Regulations, 40 CFR parts 1500-
1508.
    (c) The regulations issued by CEQ at 40 CFR parts 1500-1508 
establish the basic procedural requirements for compliance with NEPA. 
These procedures are to be followed by all Federal agencies and are 
incorporated by reference into this part. This part, therefore, provides 
supplemental instructions to reflect the particular nature of HUD 
programs, and is to be used in tandem with 40 CFR parts 1500-1508 and 
regulations that implement authorities cited at Sec.  50.4.
    (d) These regulations apply to all HUD policy actions (as defined in 
Sec.  50.16), and to all HUD project actions (see Sec.  50.2(a)(2)). 
Also, they apply to projects and activities carried out by recipients 
subject to environmental policy and procedures of 24 CFR part 58, when 
the recipient that is regulated under 24 CFR part 58 claims the lack of 
legal capacity to assume the Secretary's environmental review 
responsibilities and the claim is approved by

[[Page 343]]

HUD or when HUD determines to conduct an environmental review itself in 
place of a nonrecipient responsible entity. For programs, activities or 
actions not specifically identified or when there are questions 
regarding the applicability of this part, the Assistant Secretary for 
Community Planning and Development shall be consulted.



Sec.  50.2  Terms and abbreviations.

    (a) The definitions for most of the key terms or phrases contained 
in this part appear in 40 CFR part 1508 and in the authorities cited in 
Sec.  50.4.
    The following definitions also apply to this part:
    Environmental review means a process for complying with NEPA 
(through an EA or EIS) and/or with the laws and authorities cited in 
Sec.  50.4.
    HUD approving official means the HUD official authorized to make the 
approval decision for any proposed policy or project subject to this 
part.
    Project means an activity, or a group of integrally-related 
activities, undertaken directly by HUD or proposed for HUD assistance or 
insurance.
    (b) The following abbreviations are used throughout this part:
    AS/CPD--Assistant Secretary for Community Planning and Development.
    CEQ--Council on Environmental Quality
    EA--Environmental Assessment
    EIS--Environmental Impact Statement
    FONSI--Finding of No Significant Impact
    HUD--Department of Housing and Urban Development
    NEPA--National Environmental Policy Act
    NOI/EIS--Notice of Intent to Prepare an Environmental Impact 
Statement



Sec.  50.3  Environmental policy.

    (a) It is the policy of the Department to reject proposals which 
have significant adverse environmental impacts and to encourage the 
modification of projects in order to enhance environmental quality and 
minimize environmental harm.
    (b) The HUD approving official shall consider environmental and 
other Departmental objectives in the decisionmaking process.
    (c) When EA's or EIS's or reviews under Sec.  50.4 reveal conditions 
or safeguards that should be implemented once a proposal is approved in 
order to protect and enhance environmental quality or minimize adverse 
environmental impacts, such conditions or safeguards must be included in 
agreements or other relevant documents.
    (d) A systematic, interdisciplinary approach shall be used to assure 
the integrated use of the natural and social sciences and the 
environmental design arts in making decisions.
    (e) Environmental impacts shall be evaluated on as comprehensive a 
scale as is practicable.
    (f) HUD offices shall begin the environmental review process at the 
earliest possible time so that potential conflicts between program 
procedures and environmental requirements are identified at an early 
stage.
    (g) Applicants for HUD assistance shall be advised of environmental 
requirements and consultation with governmental agencies and individuals 
shall take place at the earliest time feasible.
    (h) For HUD grant programs in which the funding approval for an 
applicant's program must occur before the applicant's selection of 
properties, the application shall contain an assurance that the 
applicant agrees to assist HUD to comply with this part and that the 
applicant shall:
    (1) Supply HUD with all available, relevant information necessary 
for HUD to perform for each property any environmental review required 
by this part;
    (2) Carry out mitigating measures required by HUD or select 
alternate eligible property; and
    (3) Not acquire, rehabilitate, convert, lease, repair or construct 
property, nor commit or expend HUD or local funds for these program 
activities with respect to any eligible property, until HUD approval of 
the property is received.
    (i)(1) It is HUD policy that all property proposed for use in HUD 
programs be free of hazardous materials, contamination, toxic chemicals 
and gasses, and radioactive substances, where

[[Page 344]]

a hazard could affect the health and safety of occupants or conflict 
with the intended utilization of the property.
    (2) HUD environmental review of multifamily and non-residential 
properties shall include evaluation of previous uses of the site and 
other evidence of contamination on or near the site, to assure that 
occupants of proposed sites are not adversely affected by the hazards 
listed in paragraph (i)(1) of this section.
    (3) Particular attention should be given to any proposed site on or 
in the general proximity of such areas as dumps, landfills, industrial 
sites or other locations that contain hazardous wastes.
    (4) HUD shall require the use of current techniques by qualified 
professionals to undertake investigations determined necessary.



Sec.  50.4  Related Federal laws and authorities.

    HUD and/or applicants must comply, where applicable, with all 
environmental requirements, guidelines and statutory obligations under 
the following authorities and HUD standards:
    (a) Historic properties. (1) The National Historic Preservation Act 
of 1966 (16 U.S.C. 470 et seq.), as amended.
    (2) Executive Order 11593, Protection and Enhancement of the 
Cultural Environment, May 13, 1971 (3 CFR, 1971-1975 Comp., p. 559).
    (3) The Archaeological and Historic Preservation Act of 1974, which 
amends the Reservoir Salvage Act of 1960 (16 U.S.C. 469 et seq.).
    (4) Procedures for the Protection of Historic and Cultural 
Properties (Advisory Council on Historic Preservation--36 CFR part 800).
    (b) Flood insurance, floodplain management and wetland protection. 
(1) Flood Disaster Protection Act of 1973 (42 U.S.C. 4001-4128) and the 
National Flood Insurance Reform Act of 1994 (Pub.L. 103-325, 108 Stat. 
2160).
    (2) HUD procedure for the implementation of Executive Order 11988 
(Floodplain Management), (3 CFR, 1977 Comp., p. 117)--24 CFR part 55, 
Floodplain Management and Protection of Wetlands.
    (3) HUD procedure for the implementation of Executive Order 11990 
(Protection of Wetlands), (3 CFR, 1977 Comp., p. 121)--24 CFR part 55, 
Floodplain Management and Protection of Wetlands.
    (c) Coastal areas protection and management. (1) The Coastal Barrier 
Resources Act, as amended by the Coastal Barrier Improvement Act of 1990 
(16 U.S.C. 3501 et seq.).
    (2) The Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et 
seq.), as amended.
    (d) Sole source aquifers. The Safe Drinking Water Act of 1974 (42 
U.S.C. 201, 300 et seq., and 21 U.S.C. 349), as amended. (See 40 CFR 
part 149.)
    (e) Endangered species. The Endangered Species Act of 1973 (16 
U.S.C. 1531 et seq.), as amended. (See 50 CFR part 402.)
    (f) Wild and scenic rivers. The Wild and Scenic Rivers Act (16 U.S.C 
1271 et seq.), as amended.
    (g) Water quality. The Federal Water Pollution Control Act, as 
amended by the Federal Water Pollution Control Act Amendments of 1972 
(33 U.S.C. 1251 et seq.), and later enactments.
    (h) Air quality. The Clean Air Act (42 U.S.C. 7401 et seq.), as 
amended. (See 40 CFR parts 6, 51, and 93.)
    (i) Solid waste management. (1) The Solid Waste Disposal Act, as 
amended by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. 
6901 et seq.), and later enactments.
    (2) The Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980 (42 U.S.C. 9601 et seq.), as amended.
    (j) Farmlands protection. The Farmland Protection Policy Act of 1981 
(7 U.S.C. 4201 et seq.), as amended. (See 7 CFR part 658.)
    (k) HUD environmental standards. Applicable criteria and standards 
specified in HUD environmental regulations (24 CFR part 51).
    (l) Environmental justice. Executive Order 12898--Federal Actions to 
Address Environmental Justice in Minority Populations and Low-Income 
Populations (3 CFR, 1994 Comp., p. 859).

[61 FR 50916, Sept. 27, 1996, as amended at 78 FR 68728, Nov. 15, 2013]

[[Page 345]]



     Subpart B_General Policy: Responsibilities and Program Coverage



Sec.  50.10  Basic environmental responsibility.

    (a) It is the responsibility of all Assistant Secretaries, the 
General Counsel, and the HUD approving official to assure that the 
requirements of this part are implemented.
    (b) The Assistant Secretary for Community Planning and Development 
(A/S CPD), represented by the Office of Community Viability, whose 
Director shall serve as the Departmental Environmental Clearance Officer 
(DECO), is assigned the overall Departmental responsibility for 
environmental policies and procedures for compliance with NEPA and the 
related laws and authorities. To the extent permitted by applicable laws 
and the CEQ regulations, the A/S CPD shall approve waivers and 
exceptions or establish criteria for exceptions from the requirements of 
this part.



Sec.  50.11  Responsibility of the HUD approving official.

    (a) The HUD approving official shall make an independent evaluation 
of the environmental issues, take responsibility for the scope and 
content of the compliance finding, EA or EIS, and make the environmental 
finding, where applicable. (Also, see Sec.  50.32.)
    (b) Copies of environmental reviews and findings shall be maintained 
in the project file for projects, in the rules docket files for Federal 
Register publications, and in program files for non-Federal Register 
policy documents.



                Subpart C_General Policy: Decision Points



Sec.  50.16  Decision points for policy actions.

    Either an EA and FONSI or an EIS on all policy actions not meeting 
the criteria of Sec.  50.19 shall be completed prior to the approval 
action. Policy actions include all proposed Federal Register policy 
documents and other policy-related Federal actions (40 CFR 1508.18). The 
decision as to whether a proposed policy action is categorically 
excluded from an EA shall be made by the Program Environmental Clearance 
Officer (PECO) in Headquarters as early as possible. Where the PECO has 
any doubt as to whether a proposed action qualifies for exclusion, the 
PECO shall request a determination by the AS/CPD. The EA and FONSI may 
be combined into a single document.



Sec.  50.17  Decision points for projects.

    Either an EA and FONSI or an EIS for individual projects shall be 
completed before the applicable program decision points below for 
projects not meeting the criteria of Sec.  50.20. Compliance with 
applicable authorities cited in Sec.  50.4 shall be completed before the 
applicable program decision points below unless the project meets the 
criteria for exclusion under Sec.  50.19.
    (a) New Construction. (1) Project mortgage insurance or other 
financial assistance for multifamily housing projects (including 
sections 202 and 811), nursing homes, hospitals, group practice 
facilities and manufactured home parks: Issuance of Site Appraisal and 
Market Analysis (SAMA) Letter or initial equivalent indication of HUD 
approval of a specific site;
    (2) Public Housing: HUD approval of the proposal.
    (3) Loan Guarantee Recovery Fund Program (24 CFR part 573). HUD 
issuance of a letter of commitment or initial equivalent indication of 
HUD approval.
    (b) Rehabilitation projects. Use the decision points under ``new 
construction'' for HUD programs cited in paragraph (a) of this section; 
otherwise the decision point is the HUD project approval.
    (c) Public housing modernization programs. HUD approval of the 
modernization grants.
    (d) Property Disposition. Multifamily structures, college housing, 
nursing homes, manufactured homes and parks, group practice facilities, 
vacant land and one to four family structures: HUD approval of the 
Disposition Program.
    (e) HUD programs subject to 24 CFR part 58. For cases in which HUD 
exercises environmental responsibility under this part where a recipient 
lacks legal capacity to do so or HUD determines to do so in place of a 
nonrecipient responsible entity under 24 CFR part 58 (see Sec.  
50.1(d)), the decision

[[Page 346]]

point is: HUD's execution of an agreement or contract, whichever comes 
first, or in the case of Section 8 Project-Based Certificate Assistance 
and Moderate Rehabilitation, HUD notification to the Public Housing 
Agency to proceed with execution of an Agreement to Enter into Housing 
Assistance Payments (HAP) Contract.
    (f) Section 50.3(h). Notwithstanding the other paragraphs of this 
section, the decision point for grant programs in which HUD approval of 
funding for an applicant's program must occur before the applicant's 
selection of properties for use in its program is: HUD approval of 
specific properties.
    (g) Stewart B. McKinney Homeless Assistance Act Programs. Where the 
recipients are nonprofit organizations or governmental entities with 
special or limited purpose powers, the decision point is: HUD project 
approval.
    (h) Programs not specifically covered in this section. Consult with 
the AS/CPD for decision points.



        Subpart D_General Policy: Environmental Review Procedures



Sec.  50.18  General.

    (a) The Departmental Environmental Clearance Officer (DECO) shall 
establish a prescribed format to be used to document compliance with 
NEPA and the Federal laws and authorities cited in Sec.  50.4. The DECO 
may prescribe alternative formats as necessary to meet specific program 
needs.
    (b) HUD may, from time to time, complete programmatic reviews that 
further avoid the necessity of complying with the laws and authorities 
in Sec.  50.4 on a property-by-property basis.

[61 FR 50916, Sept. 27, 1996, as amended at 79 FR 49228, Aug. 20, 2014]



Sec.  50.19  Categorical exclusions not subject to the Federal laws 
and authorities cited in Sec.  50.4.

    (a) General. The activities and related approvals of policy 
documents listed in paragraphs (b) and (c) of this section are not 
subject to the individual compliance requirements of the Federal laws 
and authorities cited in Sec.  50.4, unless otherwise indicated below. 
These activities and approvals of policy documents are also 
categorically excluded from the EA required by NEPA except in 
extraordinary circumstances (Sec.  50.20(b)). HUD approval or 
implementation of these categories of activities and policy documents 
does not require environmental review, because they do not alter 
physical conditions in a manner or to an extent that would require 
review under NEPA or the other laws and authorities cited at Sec.  50.4.
    (b) Activities. (1) Environmental and other studies, resource 
identification and the development of plans and strategies.
    (2) Information and financial advisory services.
    (3) Administrative and management expenses.
    (4) Public services that will not have a physical impact or result 
in any physical changes, including but not limited to services concerned 
with employment, crime prevention, child care, health, drug abuse, 
education, counseling, energy conservation and welfare or recreational 
needs.
    (5) Inspections and testing of properties for hazards or defects.
    (6) Purchase of insurance.
    (7) Purchase of tools.
    (8) Engineering or design costs.
    (9) Technical assistance and training.
    (10) Assistance for temporary or permanent improvements that do not 
alter environmental conditions and are limited to protection, repair or 
restoration activities necessary only to control or arrest the effects 
from disasters or imminent threats to public safety including those 
resulting from physical deterioration.
    (11) Tenant-based rental assistance.
    (12) Supportive services including, but not limited to, health care, 
housing services, permanent housing placement, day care, nutritional 
services, short-term payments for rent/mortgage/utility costs, and 
assistance in gaining access to local, State, and Federal government 
benefits and services.
    (13) Operating costs including maintenance, security, operation, 
utilities, furnishings, equipment, supplies, staff training and 
recruitment and other incidental costs; however, in the case of 
equipment, compliance with Sec.  50.4(b)(1) is required.
    (14) Economic development activities, including but not limited to,

[[Page 347]]

equipment purchase, inventory financing, interest subsidy, operating 
expenses and similar costs not associated with construction or physical 
expansion of existing facilities; however, in the case of equipment 
purchase, compliance with Sec.  50.4(b)(1) is required.
    (15) Activities to assist homebuyers to purchase existing dwelling 
units or dwelling units under construction, including closing costs and 
downpayment assistance, interest buydowns, and similar activities that 
result in the transfer of title.
    (16) Housing pre-development costs including legal, consulting, 
developer and other costs related to site options, project financing, 
administrative costs and fees for loan commitments, zoning approvals, 
and other related activities which do not have a physical impact.
    (17) HUD's insurance of one-to-four family mortgages under the 
Direct Endorsement program, the insurance of one-to-four family 
mortgages under the Lender Insurance program, and HUD's guarantee of 
loans for one-to-four family dwellings under the Direct Guarantee 
procedure for the Indian Housing loan guarantee program, without any HUD 
review or approval before the completion of construction or 
rehabilitation and the loan closing; and HUD's acceptance for insurance 
of loans insured under Title I of the National Housing Act; however, 
compliance with Sec. Sec.  50.4(b)(1) and (c)(1) and 24 CFR 51.303(a)(3) 
is required.
    (18) HUD's endorsement of one-to-four family mortgage insurance for 
proposed construction under Improved Area processing; however, the 
Appraiser/Review Appraiser Checksheet (Form HUD-54891) must be 
completed.
    (19) Activities of the Government National Mortgage Association 
under Title III of the National Housing Act (12 U.S.C. 1716 et seq.).
    (20) Activities under the Interstate Land Sales Full Disclosure Act 
(15 U.S.C. 1701 et seq.).
    (21) Refinancing of HUD-insured mortgages that will not allow new 
construction or rehabilitation, nor result in any physical impacts or 
changes except for routine maintenance; however, compliance with Sec.  
50.4(b)(1) is required.
    (22) Approval of the sale of a HUD-held mortgage.
    (23) Approval of the foreclosure sale of a property with a HUD-held 
mortgage; however, appropriate restrictions will be imposed to protect 
historic properties.
    (24) HUD guarantees under the Loan Guarantee Recovery Fund Program 
(24 CFR part 573) of loans that refinance existing loans and mortgages, 
where any new construction or rehabilitation financed by the existing 
loan or mortgage has been completed prior to the filing of an 
application under the program, and the refinancing will not allow 
further construction or rehabilitation, nor result in any physical 
impacts or changes except for routine maintenance; however, compliance 
with Sec. Sec.  50.4 (b)(1) and (c)(1) and 51.303(a) is required.
    (c) Approval of policy documents. (1) Approval of rules and notices 
proposed for publication in the Federal Register or other policy 
documents that do not:
    (i) Direct, provide for assistance or loan and mortgage insurance 
for, or otherwise govern or regulate, real property acquisition, 
disposition, leasing (other than tenant-based rental assistance), 
rehabilitation, alteration, demolition, or new construction; or
    (ii) Establish, revise, or provide for standards for construction or 
construction materials, manufactured housing, or occupancy.
    (2) Approval of policy documents that amend an existing document 
where the existing document as a whole would not fall within an 
exclusion in this paragraph (c) but the amendment by itself would do so;
    (3) Approval of policy documents that set out fair housing or 
nondiscrimination standards or enforcement procedures or provide for 
assistance in promoting or enforcing fair housing or nondiscrimination;
    (4) Approval of handbooks, notices and other documents that provide 
operating instructions and procedures in connection with activities 
under a Federal Register document that has previously been subject to a 
required environmental review.
    (5) Approval of a Notice of Funding Availability (NOFA) that 
provides funding under, and does not alter any

[[Page 348]]

environmental requirements of, a regulation or program guideline that 
was previously published in the Federal Register, provided that
    (i) The NOFA specifically refers to the environmental review 
provisions of the regulation or guideline; or
    (ii) The regulation or guideline contains no environmental review 
provisions because it concerns only activities listed in paragraph (b) 
of this section.
    (6) Statutorily required and/or discretionary establishment and 
review of interest rates, loan limits, building cost limits, prototype 
costs, fair market rent schedules, HUD-determined prevailing wage rates, 
income limits and exclusions with regard to eligibility for or 
calculation of HUD housing assistance or rental assistance, and similar 
rate and cost determinations and related external administrative or 
fiscal requirements or procedures which do not constitute a development 
decision that affects the physical condition of specific project areas 
or building sites.

[61 FR 50916, Sept. 27, 1996, as amended at 62 FR 15802, Apr. 2, 1997; 
63 FR 48990, Sept. 11, 1998; 68 FR 56127, Sept. 29, 2003]



Sec.  50.20  Categorical exclusions subject to the Federal laws and
authorities cited in Sec.  50.4.

    (a) The following actions, activities, and programs are 
categorically excluded from the NEPA requirements for further review in 
an Environmental Assessment or an Environmental Impact Statement as set 
forth in this part. They are not excluded from individual compliance 
requirements of other environmental statutes, Executive orders, and HUD 
standards cited in Sec.  50.4, where appropriate. Where the responsible 
official determines that any proposed action identified below may have 
an environmental effect because of extraordinary circumstances (40 CFR 
1508.4), the requirements for further review under NEPA shall apply (see 
paragraph (b) of this section).
    (1) Special projects directed to the removal of material and 
architectural barriers that restrict the mobility of and accessibility 
to elderly and persons with disabilities.
    (2) Rehabilitation of buildings and improvements when the following 
conditions are met:
    (i) In the case of a building for residential use (with one to four 
units), the density is not increased beyond four units, the land use is 
not changed, and the footprint of the building is not increased in a 
floodplain or in a wetland;
    (ii) In the case of multifamily residential buildings:
    (A) Unit density is not changed more than 20 percent;
    (B) The project does not involve changes in land use from 
residential to non-residential; and
    (C) The estimated cost of rehabilitation is less than 75 percent of 
the total estimated cost of replacement after rehabilitation.
    (iii) In the case of non-residential structures, including 
commercial, industrial, and public buildings:
    (A) The facilities and improvements are in place and will not be 
changed in size nor capacity by more than 20 percent; and
    (B) The activity does not involve a change in land use, such as from 
non-residential to residential, commercial to industrial, or from one 
industrial use to another.
    (3)(i) An individual action on up to four dwelling units where there 
is a maximum of four units on any one site. The units can be four one-
unit buildings or one four-unit building or any combination in between; 
or
    (ii) An individual action on a project of five or more housing units 
developed on scattered sites when the sites are more than 2,000 feet 
apart and there are not more than four housing units on any one site.
    (iii) Paragraphs (a)(3)(i) and (ii) of this section do not apply to 
rehabilitation of a building for residential use (with one to four 
units) (see paragraph (a)(2)(i) of this section).
    (4) Acquisition (including leasing) or disposition of, or equity 
loans on an existing structure, or acquisition (including leasing) of 
vacant land provided that the structure or land acquired, financed, or 
disposed of will be retained for the same use.
    (5) Purchased or refinanced housing and medical facilities under 
section

[[Page 349]]

223(f) of the National Housing Act (12 U.S.C. 1715n).
    (6) Mortgage prepayments or plans of action (including incentives) 
under 24 CFR part 248.
    (b) For categorical exclusions having the potential for significant 
impact because of extraordinary circumstances, HUD must prepare an EA in 
accordance with subpart E. If it is evident without preparing an EA that 
an EIS is required pursuant to Sec.  50.42, HUD should proceed directly 
to the preparation of an EIS in accordance with subpart F.

[61 FR 50916, Sept. 27, 1996, as amended at 68 FR 56127, Sept. 29, 2003; 
79 FR 49229, Aug. 20, 2014]



Sec.  50.21  Aggregation.

    Activities which are geographically related and are logical parts of 
a composite of contemplated HUD projects shall be evaluated together.



Sec.  50.22  Environmental management and monitoring.

    An Environmental Management and Monitoring Program shall be 
established prior to project approval when it is deemed necessary by the 
HUD approving official. The program shall be part of the approval 
document and must:
    (a) Be concurred in by the Field Environmental Clearance Officer 
(FECO) (in the absence of a FECO, by the Program Environmental Clearance 
Officer in Headquarters) and any cooperating agencies;
    (b) Contain specific standards, safeguards and commitments to be 
completed during project implementation;
    (c) Identify the staff who will be responsible for the post-approval 
inspection; and
    (d) Specify the time periods for conducting the evaluation and 
monitoring the applicant's compliance with the project agreements.



Sec.  50.23  Public participation.

    HUD shall inform the affected public about NEPA-related hearings, 
public meetings, and the availability of environmental documents (see 40 
CFR 1506.6(b)) in accordance with this section. Where project actions 
result in a FONSI, the FONSI will be available in the project file. The 
local HUD field office may be contacted by persons who wish to review 
the FONSI. In all cases, HUD shall mail notices to those who have 
requested them. Additional efforts for involving the public in specific 
notice or compliance requirements shall be made in accord with the 
implementing procedures of the laws and authorities cited in Sec.  50.4. 
Notices pertaining to an EIS or an amendment to an EIS or a FONSI 
subject to Sec.  50.34 shall be given to the public in accordance with 
paragraphs (a) through (d) of this section.
    (a) A NOI/EIS shall be forwarded to the AS/CPD to the attention of 
the Departmental Environmental Clearance Officer for publication in the 
Federal Register.
    (b) Notices will be bilingual if the affected public includes a 
significant portion of non-English speaking persons and will identify a 
date when the official public involvement element of the proposed action 
is to be completed and HUD internal processing is to continue.
    (c) All required notices shall be published in an appropriate local 
printed news medium, and sent to individuals and groups known to be 
interested in the proposed action.
    (d) All notices shall inform the public where additional information 
may be obtained.



Sec.  50.24  HUD review of another agency's EIS.

    Where another agency's EIS is referred to the HUD Field Office in 
whose jurisdiction the project is located, the Field Environmental 
Clearance Officer shall determine whether HUD has an interest in the EIS 
and, if so, will review and comment. Any EIS received from another 
Federal agency requesting comment on legislative proposals, regulations, 
or other policy documents shall be sent to the AS/CPD for comment, and 
the AS/CPD shall provide the General Counsel the opportunity for 
comment.



         Subpart E_Environmental Assessments and Related Reviews



Sec.  50.31  The EA.

    (a) The Departmental Environmental Clearance Officer (DECO) shall 
establish a prescribed format used for the

[[Page 350]]

environmental analysis and documentation of projects and activities 
under subpart E. The DECO may prescribe alternative formats as necessary 
to meet specific program needs.
    (b) The program representative shall obtain interdisciplinary 
assistance from professional experts and other HUD staff as needed. 
Additional information may also be requested of the sponsor/applicant. 
HUD is responsible for assessing and documenting the extent of the 
environmental impact.

[61 FR 50916, Sept. 27, 1996, as amended at 79 FR 49229, Aug. 20, 2014]



Sec.  50.32  Responsibility for environmental processing.

    The program staff in the HUD office responsible for processing the 
project application or recommending a policy action is responsible for 
conducting the compliance finding, EA, or EIS. The collection of data 
and studies as part of the information contained in the environmental 
review may be done by an applicant or the applicant's contractor. The 
HUD program staff may use any information supplied by the applicant or 
contractor, provided HUD independently evaluates the information, will 
be responsible for its accuracy, supplements the information, if 
necessary, to conform to the requirements of this part, and prepares the 
environmental finding. Assessments for projects over 200 lots/dwelling 
units or beds shall be sent to the Field Environmental Clearance Officer 
(FECO) or, in the absence of a FECO, to the Program Environmental 
Clearance Officer in Headquarters for review and comment.



Sec.  50.33  Action resulting from the assessment.

    (a) A proposal may be accepted without modifications if the EA 
indicates that the proposal will not significantly (see 40 CFR 1508.27) 
affect the quality of the human environment and a FONSI is prepared.
    (b) A proposal may be accepted with modifications provided that:
    (1) Changes have been made that would reduce adverse environmental 
impact to acceptable and insignificant levels; and
    (2) An Environmental Management and Monitoring Program is developed 
in accordance with Sec.  50.22 when it is deemed necessary by the HUD 
approving official.
    (c) A proposal should be rejected if significant and unavoidable 
adverse environmental impacts would still exist after modifications have 
been made to the proposal and an EIS is not prepared.
    (d) A proposal (if not rejected) shall require an EIS if the EA 
indicates that significant environmental impacts would result.



Sec.  50.34  Time delays for exceptional circumstances.

    (a) Under the circumstances described in this section, the FONSI 
must be made available for public review for 30 calendar days before a 
final decision is made whether to prepare an EIS and before the HUD 
action is taken. The circumstances are:
    (1) When the proposed action is, or is closely similar to, one which 
normally requires the preparation of an EIS pursuant to Sec.  50.42(b) 
but it is determined, as a result of an EA or in the course of 
preparation of a draft EIS, that the proposed action will not have a 
significant impact on the human environment; or
    (2) When the nature of the proposed action is without precedent and 
does not appear to require more than an assessment.
    (b) In such cases, the FONSI must be concurred in by the AS/CPD and 
the Program Environmental Clearance Officer. Notice of the availability 
of the FONSI shall be given to the public in accordance with paragraphs 
(a) through (d) of Sec.  50.23.



Sec.  50.35  Use of prior environmental assessments.

    When other Federal, State, or local agencies have prepared an EA or 
other environmental analysis for a proposed HUD project, these documents 
should be requested and used to the extent possible. HUD must, however, 
conduct the environmental analysis and prepare the EA and be responsible 
for the required environmental finding.

[[Page 351]]



Sec.  50.36  Updating of environmental reviews.

    The environmental review must be re-evaluated and updated when the 
basis for the original environmental or compliance findings is affected 
by a major change requiring HUD approval in the nature, magnitude or 
extent of a project and the project is not yet complete. A change only 
in the amount of financing or mortgage insurance involved does not 
normally require the environmental review to be re-evaluated or updated.



                Subpart F_Environmental Impact Statements



Sec.  50.41  EIS policy.

    EIS's will be prepared and considered in program determinations 
pursuant to the general environmental policy stated in Sec.  50.3 and 40 
CFR 1505.2 (b) and (c).



Sec.  50.42  Cases when an EIS is required.

    (a) An EIS is required if the proposal is determined to have a 
significant impact on the human environment pursuant to subpart E.
    (b) An EIS will normally be required if the proposal:
    (1) Would provide a site or sites for hospitals or nursing homes 
containing a total of 2,500 or more beds; or
    (2) Would remove, demolish, convert, or substantially rehabilitate 
2,500 or more existing housing units (but not including rehabilitation 
projects categorically excluded under Sec.  50.20), or which would 
result in the construction or installation of 2,500 or more housing 
units, or which would provide sites for 2,500 or more housing units.
    (c) When the environmental concerns of one or more Federal 
authorities cited in Sec.  50.4 will be affected by the proposal, the 
cumulative impact of all such effects should be assessed to determine 
whether an EIS is required. Where all of the affected authorities 
provide alternative procedures for resolution, those procedures should 
be used in lieu of an EIS.



Sec.  50.43  Emergencies.

    In cases of national emergency and disasters or cases of imminent 
threat to health and safety or other emergency which require the taking 
of an action with significant environmental impact, the provisions of 40 
CFR 1506.11 and of any applicable Sec.  50.4 authorities which provide 
for emergencies shall apply.



PART 51_ENVIRONMENTAL CRITERIA AND STANDARDS--Table of Contents



                      Subpart A_General Provisions

Sec.
51.1 Purpose.
51.2 Authority.
51.3 Responsibilities.
51.4 Program coverage.

                  Subpart B_Noise Abatement and Control

51.100 Purpose and authority.
51.101 General policy.
51.102 Responsibilities.
51.103 Criteria and standards.
51.104 Special requirements.
51.105 Exceptions.
51.106 Implementation.

Appendix I to Subpart B of Part 51--Definition of Acoustical Quantities

  Subpart C_Siting of HUD-Assisted Projects Near Hazardous Operations 
 Handling Conventional Fuels or Chemicals of an Explosive or Flammable 
                                 Nature

51.200 Purpose.
51.201 Definitions.
51.202 Approval of HUD-assisted projects.
51.203 Safety standards.
51.204 HUD-assisted hazardous facilities.
51.205 Mitigating measures.
51.206 Implementation.
51.207 Special circumstances.
51.208 Reservation of administrative and legal rights.

Appendix I to Subpart C of Part 51--Specific Hazardous Substances
Appendix II to Subpart C of Part 51--Development of Standards; 
          Calculation Methods

Subpart D_Siting of HUD Assisted Projects in Runway Clear Zones at Civil 
   Airports and Clear Zones and Accident Potential Zones at Military 
                                Airfields

51.300 Purpose.
51.301 Definitions.
51.302 Coverage.
51.303 General policy.
51.304 Responsibilities.
51.305 Implementation.

    Authority: 42 U.S.C. 3535(d), unless otherwise noted.

[[Page 352]]


    Source: 44 FR 40861, July 12, 1979, unless otherwise noted.



                      Subpart A_General Provisions



Sec.  51.1  Purpose.

    The Department of Housing and Urban Development is providing program 
Assistant Secretaries and administrators and field offices with 
environmental standards, criteria and guidelines for determining project 
acceptability and necessary mitigating measures to insure that 
activities assisted by the Department achieve the goal of a suitable 
living environment.



Sec.  51.2  Authority.

    This part implements the Department's responsibilities under: The 
National Housing Act (12 U.S.C. 1701 et seq.); sec. 2 of the Housing Act 
of 1949 (42 U.S.C. 1441); secs. 2 and 7(d) of the Department of Housing 
and Urban Development Act (42 U.S.C. 3531 and 3535(d)); the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321); and the other 
statutes that are referred to in this part.

[61 FR 13333, Mar. 26, 1996]



Sec.  51.3  Responsibilities.

    The Assistant Secretary for Community Planning and Development is 
responsible for administering HUD's environmental criteria and standards 
as set forth in this part. The Assistant Secretary for Community 
Planning and Development may be assisted by HUD officials in 
implementing the responsibilities established by this part. HUD will 
identify these HUD officials and their specific responsibilities through 
Federal Register notice.

[61 FR 13333, Mar. 26, 1996]



Sec.  51.4  Program coverage.

    Environmental standards shall apply to all HUD actions except where 
special provisions and exemptions are contained in each subpart.



                  Subpart B_Noise Abatement and Control



Sec.  51.100  Purpose and authority.

    (a) It is the purpose of this subpart B to:
    (1) Call attention to the threat of noise pollution;
    (2) Encourage the control of noise at its source in cooperation with 
other Federal departments and agencies;
    (3) Encourage land use patterns for housing and other noise 
sensitive urban needs that will provide a suitable separation between 
them and major noise sources;
    (4) Generally prohibit HUD support for new construction of noise 
sensitive uses on sites having unacceptable noise exposure;
    (5) Provide policy on the use of structural and other noise 
attenuation measures where needed; and
    (6) Provide policy to guide implementation of various HUD programs.
    (b) Authority. Specific authorities for noise abatement and control 
are contained in the Noise Control Act of 1972, as amended (42 U.S.C. 
4901 et seq.); and the General Services Administration, Federal 
Management Circular 75-2; Compatible Land Uses at Federal Airfields.

[44 FR 40861, July 12, 1979, as amended at 61 FR 13333, Mar. 26, 1996]



Sec.  51.101  General policy.

    (a) It is HUD's general policy to provide minimum national standards 
applicable to HUD programs to protect citizens against excessive noise 
in their communities and places of residence.
    (1) Planning assistance. HUD requires that grantees give adequate 
consideration to noise exposures and sources of noise as an integral 
part of the urban environment when HUD assistance is provided for 
planning purposes, as follows:
    (i) Particular emphasis shall be placed on the importance of 
compatible land use planning in relation to airports, highways and other 
sources of high noise.
    (ii) Applicants shall take into consideration HUD environmental 
standards impacting the use of land.

[[Page 353]]

    (2) Activities subject to 24 CFR part 58. (i) Responsible entities 
under 24 CFR part 58 must take into consideration the noise criteria and 
standards in the environmental review process and consider ameliorative 
actions when noise sensitive land development is proposed in noise 
exposed areas. Responsible entities shall address deviations from the 
standards in their environmental reviews as required in 24 CFR part 58.
    (ii) Where activities are planned in a noisy area, and HUD 
assistance is contemplated later for housing and/or other noise 
sensitive activities, the responsible entity risks denial of the HUD 
assistance unless the HUD standards are met.
    (3) HUD support for new construction. HUD assistance for the 
construction of new noise sensitive uses is prohibited generally for 
projects with unacceptable noise exposures and is discouraged for 
projects with normally unacceptable noise exposure. (Standards of 
acceptability are contained in Sec.  51.103(c).) This policy applies to 
all HUD programs providing assistance, subsidy or insurance for housing, 
manufactured home parks, nursing homes, hospitals, and all programs 
providing assistance or insurance for land development, redevelopment or 
any other provision of facilities and services which are directed to 
making land available for housing or noise sensitive development. The 
policy does not apply to research demonstration projects which do not 
result in new construction or reconstruction, flood insurance, 
interstate land sales egistration, or any action or emergency assistance 
under disaster assistance provisions or appropriations which are 
provided to save lives, protect property, protect public health and 
safety, remove debris and wreckage, or assistance that has the effect of 
restoring facilities substantially as they existed prior to the 
disaster.
    (4) HUD support for existing construction. Noise exposure by itself 
will not result in the denial of HUD support for the resale and purchase 
of otherwise acceptable existing buildings. However, environmental noise 
is a marketability factor which HUD will consider in determining the 
amount of insurance or other assistance that may be given.
    (5) HUD support of modernization and rehabilitation. For 
modernization projects located in all noise exposed areas, HUD shall 
encourage noise attenuation features in alterations. For major or 
substantial rehabilitation projects in the Normally Unacceptable and 
Unacceptable noise zones, HUD actively shall seek to have project 
sponsors incorporate noise attenuation features, given the extent and 
nature of the rehabilitation being undertaken and the level or exterior 
noise exposure. In Unacceptable noise zones, HUD shall strongly 
encourage conversion of noise-exposed sites to land uses compatible with 
the high noise levels.
    (6) Research, guidance and publications. HUD shall maintain a 
continuing program designed to provide new knowledge of noise abatement 
and control to public and private bodies, to develop improved methods 
for anticipating noise encroachment, to develop noise abatement measures 
through land use and building construction practices, and to foster 
better understanding of the consequences of noise. It shall be HUD's 
policy to issue guidance documents periodically to assist HUD personnel 
in assigning an acceptability category to projects in accordance with 
noise exposure standards, in evaluating noise attenuation measures, and 
in advising local agencies about noise abatement strategies. The 
guidance documents shall be updated periodically in accordance with 
advances in the state-of-the-art.
    (7) Construction equipment, building equipment and appliances. HUD 
shall encourage the use of quieter construction equipment and methods in 
population centers, the use of quieter equipment and appliances in 
buildings, and the use of appropriate noise abatement techniques in the 
design of residential structures with potential noise problems.
    (8) Exterior noise goals. It is a HUD goal that exterior noise 
levels do not exceed a day-night average sound level of 55 decibels. 
This level is recommended by the Environmental Protection Agency as a 
goal for outdoors in residential areas. The levels recommended by EPA 
are not standards and do not take into account cost or feasibility. For 
the purposes of this

[[Page 354]]

regulation and to meet other program objectives, sites with a day-night 
average sound level of 65 and below are acceptable and are allowable 
(see Standards in Sec.  51.103(c)).
    (9) Interior noise goals. It is a HUD goal that the interior 
auditory environment shall not exceed a day-night average sound level of 
45 decibels. Attenuation measures to meet these interior goals shall be 
employed where feasible. Emphasis shall be given to noise sensitive 
interior spaces such as bedrooms. Minimum attenuation requirements are 
prescribed in Sec.  51.104(a).
    (10) Acoustical privacy in multifamily buildings. HUD shall require 
the use of building design and acoustical treatment to afford acoustical 
privacy in multifamily buildings pursuant to requirements of the Minimum 
Property Standards.

[44 FR 40861, July 12, 1979, as amended at 50 FR 9268, Mar. 7, 1985; 61 
FR 13333, Mar. 26, 1996]



Sec.  51.102  Responsibilities.

    (a) Surveillance of noise problem areas. Appropriate field staff 
shall maintain surveillance of potential noise problem areas and advise 
local officials, developers, and planning groups of the unacceptability 
of sites because of noise exposure at the earliest possible time in the 
decision process. Every attempt shall be made to insure that applicants' 
site choices are consistent with the policy and standards contained 
herein.
    (b) Notice to applicants. At the earliest possible stage, HUD 
program staff shall:
    (1) Determine the suitability of the acoustical environment of 
proposed projects;
    (2) Notify applicants of any adverse or questionable situations; and
    (3) Assure that prospective applicants are apprised of the standards 
contained herein so that future site choices will be consistent with 
these standards.
    (c) Interdepartmental coordination. HUD shall foster appropriate 
coordination between field offices and other departments and agencies, 
particularly the Environmental Protection Agency, the Department of 
Transportation, Department of Defense representatives, and the 
Department of Veterans Affairs. HUD staff shall utilize the 
acceptability standards in commenting on the prospective impacts of 
transportation facilities and other noise generators in the 
Environmental Impact Statement review process.

[44 FR 40861, July 12, 1979, as amended at 54 FR 39525, Sept. 27, 1989; 
61 FR 13333, Mar. 26, 1996]



Sec.  51.103  Criteria and standards.

    These standards apply to all programs as indicated in Sec.  51.101.
    (a) Measure of external noise environments. The magnitude of the 
external noise environment at a site is determined by the value of the 
day-night average sound level produced as the result of the accumulation 
of noise from all sources contributing to the external noise environment 
at the site. Day-night average sound level, abbreviated as DNL and 
symbolized as Ldn, is the 24-hour average sound level, in 
decibels, obtained after addition of 10 decibels to sound levels in the 
night from 10 p.m. to 7 a.m. Mathematical expressions for average sound 
level and day-night average sound level are stated in the Appendix I to 
this subpart.
    (b) Loud impulsive sounds. On an interim basis, when loud impulsive 
sounds, such as explosions or sonic booms, are experienced at a site, 
the day-night average sound level produced by the loud impulsive sounds 
alone shall have 8 decibels added to it in assessing the acceptability 
of the site (see appendix I to this subpart). Alternatively, the C-
weighted day-night average sound level (LCdn) may be used 
without the 8 decibel addition, as indicated in Sec.  51.106(a)(3). 
Methods for assessing the contribution of loud impulsive sounds to day-
night average sound level at a site and mathematical expressions for 
determining whether a sound is classed as ``loud impulsive'' are 
provided in the appendix I to this subpart.
    (c) Exterior standards. (1) The degree of acceptability of the noise 
environment at a site is determined by the sound levels external to 
buildings or other facilities containing noise sensitive uses. The 
standards shall usually apply at a location 2 meters (6.5 feet) from the 
building housing noise sensitive activities in the direction of the

[[Page 355]]

predominant noise source. Where the building location is undetermined, 
the standards shall apply 2 meters (6.5 feet) from the building setback 
line nearest to the predominant noise source. The standards shall also 
apply at other locations where it is determined that quiet outdoor space 
is required in an area ancillary to the principal use on the site.
    (2) The noise environment inside a building is considered acceptable 
if: (i) The noise environment external to the building complies with 
these standards, and (ii) the building is constructed in a manner common 
to the area or, if of uncommon construction, has at least the equivalent 
noise attenuation characteristics.

                      Site Acceptability Standards
------------------------------------------------------------------------
                                 Day-night average
                                  sound level (in      Special approvals
                                     decibels)         and requirements
------------------------------------------------------------------------
Acceptable...................  Not exceeding 65       None.
                                dB(1).
Normally Unacceptable........  Above 65 dB but not    Special Approvals
                                exceeding 75 dB.       (2)
                                                      Environmental
                                                       Review (3).
                                                      Attenuation (4).
Unacceptable.................  Above 75 dB..........  Special Approvals
                                                       (2).
                                                      Environmental
                                                       Review (3).
                                                      Attenuation (5).
------------------------------------------------------------------------
Notes: (1) Acceptable threshold may be shifted to 70 dB in special
  circumstances pursuant to Sec.   51.105(a).
(2) See Sec.   51.104(b) for requirements.
(3) See Sec.   51.104(b) for requirements.
(4) 5 dB additional attenuation required for sites above 65 dB but not
  exceeding 70 dB and 10 dB additional attenuation required for sites
  above 70 dB but not exceeding 75 dB. (See Sec.   51.104(a).)
(5) Attenuation measures to be submitted to the Assistant Secretary for
  CPD for approval on a case-by-case basis.


[44 FR 40861, July 12, 1979, as amended at 49 FR 12214, Mar. 29, 1984]



Sec.  51.104  Special requirements.

    (a)(1) Noise attenuation. Noise attenuation measures are those 
required in addition to attenuation provided by buildings as commonly 
constructed in the area, and requiring open windows for ventilation. 
Measures that reduce external noise at a site shall be used wherever 
practicable in preference to the incorporation of additional noise 
attenuation in buildings. Building designs and construction techniques 
that provide more noise attenuation than typical construction may be 
employed also to meet the noise attenuation requirements.
    (2) Normally unacceptable noise zones and unacceptable noise zones. 
Approvals in Normally Unacceptable Noise Zones require a minimum of 5 
decibels additional sound attenuation for buildings having noise-
sensitive uses if the day-night average sound level is greater than 65 
decibels but does not exceed 70 decibels, or a minimum of 10 decibels of 
additional sound attenuation if the day-night average sound level is 
greater than 70 decibels but does not exceed 75 decibels. Noise 
attenuation measures in Unacceptable Noise Zones require the approval of 
the Assistant Secretary for Community Planning and Development, or the 
Certifying Officer for activities subject to 24 CFR part 58. (See Sec.  
51.104(b)(2).)
    (b) Environmental review requirements. Environmental reviews shall 
be conducted pursuant to the requirements of 24 CFR parts 50 and 58, as 
applicable, or other environmental regulations issued by the Department. 
These requirements are hereby modified for all projects proposed in the 
Normally Unacceptable and Unacceptable noise exposure zones as follows:
    (1) Normally unacceptable noise zone. (i) All projects located in 
the Normally Unacceptable Noise Zone require a Special Environmental 
Clearance except an EIS is required for a proposed project located in a 
largely undeveloped area, or where the HUD action is likely to encourage 
the establishment of incompatible land use in this noise zone.
    (ii) When an EIS is required, the concurrence of the Program 
Assistant Secretary is also required before a project can be approved. 
For the purposes of this paragraph, an area will be considered as 
largely undeveloped unless the area within a 2-mile radius of the

[[Page 356]]

project boundary is more than 50 percent developed for urban uses and 
infrastructure (particularly water and sewers) is available and has 
capacity to serve the project.
    (iii) All other projects in the Normally Unacceptable zone require a 
Special Environmental Clearance, except where an EIS is required for 
other reasons pursuant to HUD environmental policies.
    (2) Unacceptable noise zone. An EIS is required prior to the 
approval of projects with unacceptable noise exposure. Projects in or 
partially in an Unacceptable Noise Zone shall be submitted to the 
Assistant Secretary for Community Planning and Development, or the 
Certifying Officer for activities subject to 24 CFR part 58, for 
approval. The Assistant Secretary or the Certifying Officer may waive 
the EIS requirement in cases where noise is the only environmental issue 
and no outdoor noise sensitive activity will take place on the site. In 
such cases, an environmental review shall be made pursuant to the 
requirements of 24 CFR parts 50 or 58, as appropriate.

[44 FR 40861, July 12, 1979, as amended at 61 FR 13333, Mar. 26, 1996]



Sec.  51.105  Exceptions.

    (a) Flexibility for non-acoustic benefits. Where it is determined 
that program objectives cannot be achieved on sites meeting the 
acceptability standard of 65 decibels, the Acceptable Zone may be 
shifted to Ldn 70 on a case-by-case basis if all the 
following conditions are satisfied:
    (1) The project does not require an Environmental Impact Statement 
under provisions of Sec.  51.104(b)(1) and noise is the only 
environmental issue.
    (2) The project has received a Special Environmental Clearance and 
has received the concurrence of the Environmental Clearance Officer.
    (3) The project meets other program goals to provide housing in 
proximity to employment, public facilities and transportation.
    (4) The project is in conformance with local goals and maintains the 
character of the neighborhood.
    (5) The project sponsor has set forth reasons, acceptable to HUD, as 
to why the noise attenuation measures that would normally be required 
for new construction in the Ldn 65 to Ldn 70 zone 
cannot be met.
    (6) Other sites which are not exposed to noise above Ldn 
65 and which meet program objectives are generally not available.

The above factors shall be documented and made part of the project file.

[44 FR 40861, July 12, 1979, as amended at 61 FR 13334, Mar. 26, 1996]



Sec.  51.106  Implementation.

    (a) Use of available data. HUD field staff shall make maximum use of 
noise data prepared by others when such data are determined to be 
current and adequately projected into the future and are in terms of the 
following:
    (1) Sites in the vicinity of airports. The noise environment around 
airports is described sometimes in terms of Noise Exposure Forecasts, 
abbreviated as NEF or, in the State of California, as Community Noise 
Equivalent Level, abbreviated as CNEL. The noise environment for sites 
in the vicinity of airports for which day-night average sound level data 
are not available may be evaluated from NEF or CNEL analyses using the 
following conversions to DNL:

DNL [ap] NEF + 35
DNL [ap] CNEL

    (2) Sites in the vicinity of highways. Highway projects receiving 
Federal aid are subject to noise analyses under the procedures of the 
Federal Highway Administration. Where such analyses are available they 
may be used to assess sites subject to the requirements of this 
standard. The Federal Highway Administration employs two alternate sound 
level descriptors: (i) The A-weighted sound level not exceeded more than 
10 percent of the time for the highway design hour traffic flow, 
symbolized as L10; or (ii) the equivalent sound level for the 
design hour, symbolized as Leq. The day-night average sound 
level may be estimated from the design hour L10 or 
Leq values by the following relationships, provided heavy 
trucks do not exceed 10 percent of the total traffic flow in vehicles 
per 24 hours and the traffic flow between 10

[[Page 357]]

p.m. and 7 a.m. does not exceed 15 percent of the average daily traffic 
flow in vehicles per 24 hours:

DNL [ap] L10 (design hour)--3 decibels
DNL [ap] Leq (design hour) decibels


Where the auto/truck mix and time of day relationships as stated in this 
section do not exist, the HUD Noise Assessment Guidelines or other noise 
analysis shall be used.
    (3) Sites in the vicinity of installations producing loud impulsive 
sounds. Certain Department of Defense installations produce loud 
impulsive sounds from artillery firing and bombing practice ranges. 
Noise analyses for these facilities sometimes encompass sites that may 
be subject to the requirements of this standard. Where such analyses are 
available they may be used on an interim basis to establish the 
acceptability of sites under this standard. The Department of Defense 
uses day-night average sound level based on C-weighted sound level, 
symbolized LCdn, for the analysis of loud impulsive sounds. 
Where such analyses are provided, the 8 decibel addition specified in 
Sec.  51.103(b), is not required, and the same numerical values of day-
night average sound level used on an interim basis to determine site 
suitability for non-impulsive sounds apply to the LCdn.
    (4) Use of areawide acoustical data. HUD encourages the preparation 
and use of areawide acoustical information, such as noise contours for 
airports. Where such new or revised contours become available for 
airports (civil or military) and military installations they shall first 
be referred to the HUD State Office (Environmental Officer) for review, 
evaluation and decision on appropriateness for use by HUD. The HUD State 
Office shall submit revised contours to the Assistant Secretary for 
Community Planning and Development for review, evaluation and decision 
whenever the area affected is changed by 20 percent or more, or whenever 
it is determined that the new contours will have a significant effect on 
HUD programs, or whenever the contours are not provided in a methodology 
acceptable under Sec.  51.106(a)(1) or in other cases where the HUD 
State Office determines that Headquarters review is warranted. For other 
areawide acoustical data, review is required only where existing 
areawide data are being utilized and where such data have been changed 
to reflect changes in the measurement methodology or underlying noise 
source assumptions. Requests for determination on usage of new or 
revised areawide data shall include the following:
    (i) Maps showing old, if applicable, and new noise contours, along 
with brief description of data source and methodology.
    (ii) Impact on existing and prospective urbanized areas and on 
development activity.
    (iii) Impact on HUD-assisted projects currently in processing.
    (iv) Impact on future HUD program activity. Where a field office has 
determined that immediate approval of new areawide data is necessary and 
warranted in limited geographic areas, the request for approval should 
state the circumstances warranting such approval. Actions on proposed 
projects shall not be undertaken while new areawide noise data are being 
considered for HUD use except where the proposed location is affected in 
the same manner under both the old and new noise data.
    (b) Site assessments. Compliance with the standards contained in 
Sec.  51.103(c) shall, where necessary, be determined using noise 
assessment guidelines, handbooks, technical documents and procedures 
issued by the Department.
    (c) Variations in site noise levels. In many instances the noise 
environment will vary across a site, with portions of the site being in 
an Acceptable noise environment and other portions in a Normally 
Unacceptable noise environment. The standards in Sec.  51.103(c) shall 
apply to the portions of a building or buildings used for residential 
purposes and for ancillary noise sensitive open spaces.
    (d) Noise measurements. Where noise assessments result in a finding 
that the site is borderline or questionable, or is controversial, noise 
measurements may be performed. Where it is determined that noise 
measurements are required, such measurements will be conducted in 
accordance with methods and measurement criteria established by the 
Department. Locations for noise

[[Page 358]]

measurements will depend on the location of noise sensitive uses that 
are nearest to the predominant noise source (see Sec.  51.103(c)).
    (e) Projections of noise exposure. In addition to assessing existing 
exposure, future conditions should be projected. To the extent possible, 
noise exposure shall be projected to be representative of conditions 
that are expected to exist at a time at least 10 years beyond the date 
of the project or action under review.
    (f) Reduction of site noise by use of berms and/or barriers. If it 
is determined by adequate analysis that a berm and/or barrier will 
reduce noise at a housing site, and if the barrier is existing or there 
are assurances that it will be in place prior to occupancy, the 
environmental noise analysis for the site may reflect the benefits 
afforded by the berm and/or barrier. In the environmental review process 
under Sec.  51.104(b), the location height and design of the berm and/or 
barrier shall be evaluated to determine its effectiveness, and impact on 
design and aesthetic quality, circulation and other environmental 
factors.

[44 FR 40861, July 12, 1979, as amended at 61 FR 13334, Mar. 26, 1996]



   Sec. Appendix I to Subpart B of Part 51--Definition of Acoustical 
                               Quantities

    1. Sound Level. The quantity in decibels measured with an instrument 
satisfying requirements of American National Standard Specification for 
Type 1 Sound Level Meters S1.4-1971. Fast time-averaging and A-frequency 
weighting are to be used, unless others are specified. The sound level 
meter with the A-weighting is progressively less sensitive to sounds of 
frequency below 1,000 hertz (cycles per second), somewhat as is the ear. 
With fast time averaging the sound level meter responds particularly to 
recent sounds almost as quickly as does the ear in judging the loudness 
of a sound.
    2. Average Sound Level. Average sound level, in decibels, is the 
level of the mean-square A-weighted sound pressure during the stated 
time period, with reference to the square of the standard reference 
sound pressure of 20 micropascals.
    Day-night average sound level, abbreviated as DNL, and symbolized 
mathematically as Ldn is defined as:
[GRAPHIC] [TIFF OMITTED] TC12OC91.000

    Time t is in seconds, so the limits shown in hours and minutes are 
actually interpreted in seconds. LA(t) is the time varying 
value of A-weighted sound level, the quantity in decibels measured by an 
instrument satisfying requirements of American National Standard 
Specification for Type 1 Sound Level Meters S1.4-1971.
    3. Loud Impulsive Sounds. When loud impulsive sounds such as sonic 
booms or explosions are anticipated contributors to the noise 
environment at a site, the contribution to day-night average sound level 
produced by the loud impulsive sounds shall have 8 decibels added to it 
in assessing the acceptability of a site.
    A loud impulsive sound is defined for the purpose of this regulation 
as one for which:
    (i) The sound is definable as a discrete event wherein the sound 
level increases to a maximum and then decreases in a total time interval 
of approximately one second or less to the ambient background level that 
exists without the sound; and
    (ii) The maximum sound level (obtained with slow averaging time and 
A-weighting of a Type 1 sound level meter whose characteristics comply 
with ANSI S1.4-1971) exceeds the sound level prior to the onset of the 
event by at least 6 decibels; and
    (iii) The maximum sound level obtained with fast averaging time of a 
sound level meter exceeds the maximum value obtained with slow averaging 
time by at least 4 decibels.

[44 FR 40861, July 12, 1979; 49 FR 10253, Mar. 20, 1984; 49 FR 12214, 
Mar. 29, 1984]

[[Page 359]]



  Subpart C_Siting of HUD-Assisted Projects Near Hazardous Operations 
 Handling Conventional Fuels or Chemicals of an Explosive or Flammable 
                                 Nature

    Authority: 42 U.S.C. 3535(d).

    Source: 49 FR 5103, Feb. 10, 1984, unless otherwise noted.



Sec.  51.200  Purpose.

    The purpose of this subpart C is to:
    (a) Establish safety standards which can be used as a basis for 
calculating acceptable separation distances (ASD) for HUD-assisted 
projects from specific, stationary, hazardous operations which store, 
handle, or process hazardous substances;
    (b) Alert those responsible for the siting of HUD-assisted projects 
to the inherent potential dangers when such projects are located in the 
vicinity of such hazardous operations;
    (c) Provide guidance for identifying those hazardous operations 
which are most prevalent;
    (d) Provide the technical guidance required to evaluate the degree 
of danger anticipated from explosion and thermal radiation (fire); and
    (e) Provide technical guidance required to determine acceptable 
separation distances from such hazards.

[49 FR 5103, Feb. 10, 1984, as amended at 61 FR 13334, Mar. 26, 1996]



Sec.  51.201  Definitions.

    The terms Department and Secretary are defined in 24 CFR part 5.
    Acceptable separation distance (ASD)--means the distance beyond 
which the explosion or combustion of a hazard is not likely to cause 
structures or individuals to be subjected to blast overpressure or 
thermal radiation flux levels in excess of the safety standards in Sec.  
51.203. The ASD is determined by applying the safety standards 
established by this subpart C to the guidance set forth in HUD 
Guidebook, ``Siting of HUD-Assisted Projects Near Hazardous 
Facilities.''
    Blast overpressure--means the pressure, in pounds per square inch, 
in excess of normal atmospheric pressure on the surrounding medium 
caused by an explosion.
    Danger zone--means the land area circumscribed by the radius which 
delineates the ASD of a given hazard.
    Hazard--means any stationary container which stores, handles or 
processes hazardous substances of an explosive or fire prone nature. The 
term ``hazard'' does not include pipelines for the transmission of 
hazardous substances, if such pipelines are located underground or 
comply with applicable Federal, State and local safety standards. Also 
excepted are: (1) Containers with a capacity of 100 gallons or less when 
they contain common liquid industrial fuels, such as gasoline, fuel oil, 
kerosene and crude oil since they generally would pose no danger in 
terms of thermal radiation of blast overpressure to a project; and (2) 
facilities which are shielded from a proposed HUD-assisted project by 
the topography, because these topographic features effectively provide a 
mitigating measure already in place.
    Hazardous substances--means petroleum products (petrochemicals) and 
chemicals that can produce blast overpressure or thermal radiation 
levels in excess of the standards set forth in Sec.  51.203. A specific 
list of hazardous substance is found in appendix I to this subpart.
    HUD-assisted project--the development, construction, rehabilitation, 
modernization or conversion with HUD subsidy, grant assistance, loan, 
loan guarantee, or mortgage insurance, of any project which is intended 
for residential, institutional, recreational, commercial or industrial 
use. For purposes of this subpart the terms ``rehabilitation'' and 
``modernization'' refer only to such repairs and renovation of a 
building or buildings as will result in an increased number of people 
being exposed to hazardous operations by increasing residential 
densities, converting the type of use of a building to habitation, or 
making a vacant building habitable.

[[Page 360]]

    Thermal radiation level--means the emission and propagation of heat 
energy through space or a material medium, expressed in BTU per square 
foot per hour (BTU/ft.\2\ hr.).

[49 FR 5103, Feb. 10, 1984, as amended at 61 FR 5204, Feb. 9, 1996; 61 
FR 13334, Mar. 26, 1996]



Sec.  51.202  Approval of HUD-assisted projects.

    (a) The Department will not approve an application for assistance 
for a proposed project located at less than the acceptable separation 
distance from a hazard, as defined in Sec.  51.201, unless appropriate 
mitigating measures, as defined in Sec.  51.205, are implemented, or 
unless mitigating measures are already in place.
    (b) In the case of all applications for proposed HUD-assisted 
projects, the Department shall evaluate projected development plans in 
the vicinity of these projects to determine whether there are plans to 
install a hazardous operation in close proximity to the proposed 
project. If the evaluation shows that such a plan exists, the Department 
shall not approve assistance for the project unless the Department 
obtains satisfactory assurances that adequate mitigating measures will 
be taken when the hazardous operation is installed.

[49 FR 5103, Feb. 10, 1984, as amended at 61 FR 13334, Mar. 26, 1996]



Sec.  51.203  Safety standards.

    The following standards shall be used in determining the acceptable 
separation distance of a proposed HUD-assisted project from a hazard:
    (a) Thermal Radiation Safety Standard. Projects shall be located so 
that:
    (1) The allowable thermal radiation flux level at the building shall 
not exceed 10,000 BTU/sq. ft. per hr.;
    (2) The allowable thermal radiation flux level for outdoor, 
unprotected facilities or areas of congregation shall not exceed 450 
BTU/sq. ft. per hour.
    (b) Blast Overpressure Safety Standard. Projects shall be located so 
that the maximum allowable blast overpressure at both buildings and 
outdoor, unprotected facilities or areas shall not exceed 0.5 psi.
    (c) If a hazardous substance constitutes both a thermal radiation 
and blast overpressure hazard, the ASD for each hazard shall be 
calculated, and the larger of the two ASDs shall be used to determine 
compliance with this subpart.
    (d) Background information on the standards and the logarithmic 
thermal radiation and blast overpressure charts that provide assistance 
in determining acceptable separation distances are contained in appendix 
II to this subpart C.

[49 FR 5103, Feb. 10, 1984, as amended at 61 FR 13334, Mar. 26, 1996]



Sec.  51.204  HUD-assisted hazardous facilities.

    In reviewing applications for proposed HUD-assisted projects 
involving the installation of hazardous facilities, the Department shall 
ensure that such hazardous facilities are located at an acceptable 
separation distance from residences and from any other facility or area 
where people may congregate or be present. The mitigating measures 
listed in Sec.  51.205 may be taken into account in determining 
compliance with this section.



Sec.  51.205  Mitigating measures.

    Application of the standards for determining an Acceptable 
Separation Distance (ASD) for a HUD-assisted project from a potential 
hazard of an explosion or fire prone nature is predicated on level 
topography with no intervening object(s) between the hazard and the 
project. Application of the standards can be eliminated or modified if:
    (a) The nature of the topography shields the proposed project from 
the hazard.
    (b) An existing permanent fire resistant structure of adequate size 
and strength will shield the proposed project from the hazard.
    (c) A barrier is constructed surrounding the hazard, at the site of 
the project, or in between the potential hazard and the proposed 
project.
    (d) The structure and outdoor areas used by people are designed to 
withstand blast overpressure and thermal

[[Page 361]]

radiation anticipated from the potential hazard (e.g., the project is of 
masonry and steel or reinforced concrete and steel construction).



Sec.  51.206  Implementation.

    This subpart C shall be implemented for each proposed HUD-assisted 
project by the HUD approving official or responsible entity responsible 
for review of the project. The implementation procedure will be part of 
the environmental review process in accordance with the procedures set 
forth in 24 CFR parts 50 and 58.

[61 FR 13334, Mar. 26, 1996]



Sec.  51.207  Special circumstances.

    The Secretary or the Secretary's designee may, on a case-by-case 
basis, when circumstances warrant, require the application of this 
subpart C with respect to a substance not listed in appendix I to this 
subpart C that would create thermal or overpressure effect in excess of 
that listed in Sec.  51.203.

[61 FR 13334, Mar. 26, 1996]



Sec.  51.208  Reservation of administrative and legal rights.

    Publication of these standards does not constitute a waiver of any 
right: (a) Of HUD to disapprove a project proposal if the siting is too 
close to a potential hazard not covered by this subpart, and (b) of HUD 
or any person or other entity to seek to abate or to collect damages 
occasioned by a nuisance, whether or not covered by the subpart.



 Sec. Appendix I to Subpart C of Part 51--Specific Hazardous Substances

    The following is a list of specific petroleum products and chemicals 
defined to be hazardous substances under Sec.  51.201.

                            Hazardous Liquids

Acetic Acid
Acetic Anhydride
Acetone
Acrylonitrile
Amyl Acetate
Amyl Alcohol
Benzene
Butyl Acetate
Butyl Acrylate
Butyl Alcohol
Carbon Bisulfide
Carbon Disulfide
Cellosolve
Cresols
Crude Oil (Petroleum)
Cumene
Cyclohexane
No. 2 Diesel Fuel
Ethyl Acetate
Ethyl Acrylate
Ethyl Alcohol
Ethyl Benzene
Ethyl Dichloride
Ethyl Ether
Gasoline
Heptane
Hexane
Isobutyl Acetate
Isobutyl Alcohol
Isopropyl Acetate
Isopropyl Alcohol
Jet Fuel and Kerosene
Methyl Alcohol
Methyl Amyl Alcohol
Methyl Cellosolve
Methyl Ethyl Ketone
Naptha
Pentane
Propylene Oxide
Toluene
Vinyl Acetate
Xylene

                             Hazardous Gases

Acetaldehyde
Butadiene
Butane
Ethene
Ethylene
Ethylene Oxide
Hydrogen
Liquefied Natural Gas (LNG)
Liquefied Petroleum Gas (LPG)
Propane
Propylene
Vinyl Chloride

(Primary Source: ``Urban Development Siting with respect to Hazardous 
Commercial/Industrial Facilities,'' by Rolf Jensen and Associates, Inc., 
April 1982)

[49 FR 5105, Feb. 10, 1984; 49 FR 12214, Mar. 29, 1984]



  Sec. Appendix II to Subpart C of Part 51--Development of Standards; 
                           Calculation Methods

           I. Background Information Concerning the Standards

    (a) Thermal Radiation:
    (1) Introduction. Flammable products stored in above ground 
containers represent a definite, potential threat to human life and 
structures in the event of fire. The resulting fireball emits thermal 
radiation which is absorbed by the surroundings. Combustible structures, 
such as wooden houses, may be ignited by the thermal radiation being 
emitted. The radiation can cause severe burn, injuries and even death to 
exposed persons some distance away from the site of the fire.
    (2) Criteria for Acceptable Separation Distance (ASD). Wooden 
buildings, window drapes and trees generally ignite spontaneously when 
exposed for a relatively long period of time to thermal radiation levels 
of approximately 10,000 Btu/hr. sq. ft. It will take 15 to 20 minutes 
for a building to ignite at that degree of thermal intensity. Since the 
reasonable response time for fire fighting units in urbanized areas is 
approximately five to ten minutes, a standard of 10,000 BTU/hr. sq. ft. 
is considered an acceptable level of thermal radiation for buildings.
    People in outdoor areas exposed to a thermal radiation flux level of 
approximately 1,500 Btu/ft\2\ hr will suffer intolerable pain after 15 
seconds. Longer exposure causes blistering, permanent skin damage, and 
even death. Since it is assumed that children and the elderly could not 
take refuge behind walls or run away from the thermal effect of

[[Page 362]]

the fire within the 15 seconds before skin blistering occurs, 
unprotected (outdoor) areas, such as playgrounds, parks, yards, school 
grounds, etc., must be placed at such a distance from potential fire 
locations so that the radiation flux level is well below 1500 Btu/ft\2\ 
hr. An acceptable flux level, particularly for elderly people and 
children, is 450 Btu/ft\2\ hr. The skin can be exposed to this degree of 
thermal radiation for 3 minutes or longer with no serious detrimental 
effect. The result would be the same as a bad sunburn. Therefore, the 
standard for areas in which there will be exposed people, e.g. outdoor 
recreation areas such as playgrounds and parks, is set at 450 Btu/hr. 
sq. ft. Areas covered also include open space ancillary to residential 
structures, such as yard areas and vehicle parking areas.
    (3) Acceptable Separation Distance From a Potential Fire Hazard. 
This is the actual setback required for the safety of occupied buildings 
and their inhabitants, and people in open spaces (exposed areas) from a 
potential fire hazard. The specific distance required for safety from 
such a hazard depends upon the nature and the volume of the substance. 
The Technical Guidebook entitled ``Urban Development Siting With Respect 
to Hazardous/Commercial Industrial Facilities,'' which supplements this 
regulation, contains the technical guidance required to compute 
Acceptable Separation Distances (ASD) for those flammable substances 
most often encountered.
    (b) Blast Overpressure: The Acceptable Separation Distance (ASD) for 
people and structures from materials prone to explosion is dependent 
upon the resultant blast measured in pounds per square inch (psi) 
overpressure. It has been determined by the military and corroborated by 
two independent studies conducted for the Department of Housing and 
Urban Development that 0.5 psi is the acceptable level of blast 
overpressure for both buildings and occupants, because a frame structure 
can normally withstand that level of external exertion with no serious 
structural damage, and it is unlikely that human beings inside the 
building would normally suffer any serious injury. Using this as the 
safety standard for blast overpressure, nomographs have been developed 
from which an ASD can be determined for a given quantify of hazardous 
substance. These nomographs are contained in the handbook with detailed 
instructions on their use.
    (c) Hazard evaluation: The Acceptable Separation Distances for 
buildings, which are determined for thermal radiation and blast 
overpressure, delineate separate identifiable danger zones for each 
potential accident source. For some materials the fire danger zone will 
have the greatest radius and cover the largest area, while for others 
the explosion danger zone will be the greatest. For example, 
conventional petroleum fuel products stored in unpressurized tanks do 
not emit blast overpressure of dangerous levels when ignited. In most 
cases, hazardous substances will be stored in pressurized containers. 
The resulting blast overpressure will be experienced at a greater 
distance than the resulting thermal radiation for the standards set in 
Section 51.203. In any event the hazard requiring the greatest 
separation distance will prevail in determining the location of HUD-
assisted projects.
    The standards developed for the protection of people and property 
are given in the following table.

------------------------------------------------------------------------
                                                              Blast
                                    Thermal radiation     overpressure
------------------------------------------------------------------------
Amount of acceptable exposure      10,000 BTU/ft\2\ hr  0.5 psi.
 allowed for building structures.
Amount of acceptable exposure      450 BTU/ft\2\ hr...  0.5 psi.
 allowed for people in open areas.
------------------------------------------------------------------------

                             Problem Example

    The following example is given as a guide to assist in understanding 
how the procedures are used to determine an acceptable separation 
distance. The technical data are found in the HUD Guidebook. Liquid 
propane is used in the example since it is both an explosion and a fire 
hazard.
    In this hypothetical case a proposed housing project is to be 
located 850 feet from a 30,000 gallon liquid propane (LPG) tank. The 
objective is to determine the acceptable separation distance from the 
LPG tank. Since propane is both explosive and fire prone it will be 
necessary to determine the ASD for both explosion and for fire. The 
greatest of the two will govern. There is no dike around the tank in 
this example.
    Nomographs from the technical Guidebook have been reproduced to 
facilitate the solving of the problem.

                            ASD For Explosion

    Use Figure 1 to determine the acceptable separation distance for 
explosion.
    The graph depicted on Figure 1 is predicated on a blast overpressure 
of 0.5 psi.
    The ASD in feet can be determined by applying the quantity of the 
hazard (in gallons) to the graph.
    In this case locate the 30,000 gallon point on the horizontal axis 
and draw a vertical line from that point to the intersection with the 
straight line curve. Then draw a horizontal line from the point where 
the lines cross to the left vertical axis where the ACCEPTABLE 
SEPARATION DISTANCE of 660 feet is found.
    Therefore the ASD for explosion is 660 feet
    Since the proposed project site is located 850 feet from the tank it 
is located at a safe distance with regards to blast overpressure.

[[Page 363]]

[GRAPHIC] [TIFF OMITTED] TC12OC91.001

                              ASD For Fire

    To determine the ASD for fire it will be necessary to first find the 
fire width (diameter of the fireball) on Figure 2. Then apply this to 
Figure 3 to determine the ASD.
    Since there are two safety standards for fire: (a) 10,000 BTU/ft\2\ 
hr. for buildings; and (b) 450 BTU/ft\2\ hr. for people in exposed 
areas, it will be necessary to determine an ASD for each.
    To determine the fire width locate the 30,000 gallon point on the 
horizontal axis on Figure 2 and draw a vertical line to the straight 
line curve. Then draw a horizontal line from the point where the lines 
cross to the left vertical axis where the FIRE WIDTH is found to be 350 
feet.

[[Page 364]]

    Now locate the 350 ft. point on the horizontal axis of Figure 3 and 
draw a vertical line from that point to curves 1 and 2. Then draw 
horizontal lines from the points where the lines cross to the left 
vertical axis where the ACCEPTABLE SEPARATION DISTANCES of 240 feet for 
buildings and 1,150 feet for exposure to people is found.
    Based on this the proposed project site is located at a safe 
distance from a potential fireball. However, exposed playgrounds or 
other exposed areas of congregation must be at least 1,150 feet from the 
tank, or be appropriately shielded from a potential fireball.

(Source: HUD Handbook, ``Urban Development Siting With Respect to 
Hazardous Commercial/Industrial Facilities.'')
[GRAPHIC] [TIFF OMITTED] TC12OC91.002


[[Page 365]]


[GRAPHIC] [TIFF OMITTED] TC12OC91.003


[49 FR 5105, Feb. 10, 1984; 49 FR 12214, Mar. 29, 1984]

[[Page 366]]



Subpart D_Siting of HUD Assisted Projects in Runway Clear Zones at Civil 
   Airports and Clear Zones and Accident Potential Zones at Military 
                                Airfields

    Authority: Sec. 2, Housing Act of 1949, as amended, 42 U.S.C. 1441, 
affirmed by sec. 2, HUD Act of 1969, Pub. L. 90-448; sec. 7(d), HUD Act 
of 1965, 42 U.S.C. 3535(d); OMB, Fed'l Mgmt. Cir. 75-2: Compatible Land 
Uses At Federal Airfields.

    Source: 49 FR 880, Jan. 6, 1984, unless otherwise noted.



Sec.  51.300  Purpose.

    It is the purpose of this subpart to promote compatible land uses 
around civil airports and military airfields by identifying suitable 
land uses for Runway Clear Zones at civil airports and Clear Zones and 
Accident Potential Zones at military airfields and by establishing them 
as standards for providing HUD assistance, subsidy or insurance.

[49 FR 880, Jan. 6, 1984, as amended at 61 FR 13334, Mar. 26, 1996]



Sec.  51.301  Definitions.

    For the purposes of this regulation, the following definitions 
apply:
    (a) Accident Potential Zone. An area at military airfields which is 
beyond the Clear Zone. The standards for the Accident Potential Zones 
are set out in Department of Defense Instruction 4165.57, ``Air 
Installations Compatible Use Zones,'' November 8, 1977, 32 CFR part 256. 
There are no Accident Potential Zones at civil airports.
    (b) Airport Operator. The civilian or military agency, group or 
individual which exercises control over the operations of the civil 
airport or military airfield.
    (c) Civil Airport. An existing commercial service airport as 
designated in the National Plan of Integrated Airport Systems prepared 
by the Federal Aviation Administration in accordance with section 504 of 
the Airport and Airway Improvement Act of 1982.
    (d) Runway Clear Zones and Clear Zones. Areas immediately beyond the 
ends of a runway. The standards for Runway Clear Zones for civil 
airports are established by FAA regulation 14 CFR part 152. The 
standards for Clear Zones for military airfields are established by DOD 
Instruction 4165.57, 32 CFR part 256.



Sec.  51.302  Coverage.

    (a) These policies apply to HUD programs which provide assistance, 
subsidy or insurance for construction, land development, community 
development or redevelopment or any other provision of facilities and 
services which are designed to make land available for construction. 
When the HUD assistance, subsidy or insurance is used to make land 
available for construction rather than for the actual construction, the 
provision of the HUD assistance, subsidy or insurance shall be dependent 
upon whether the facility to be built is itself acceptable in accordance 
with the standards in Sec.  51.303.
    (b) These policies apply not only to new construction but also to 
substantial or major modernization and rehabilitation and to any other 
program which significantly prolongs the physical or economic life of 
existing facilities or which, in the case of Accident Potential Zones:
    (1) Changes the use of the facility so that it becomes one which is 
no longer acceptable in accordance with the standards contained in Sec.  
51.303(b);
    (2) Significantly increases the density or number of people at the 
site; or
    (3) Introduces explosive, flammable or toxic materials to the area.
    (c) Except as noted in Sec.  51.303(a)(3), these policies do not 
apply to HUD programs where the action only involves the purchase, sale 
or rental of an existing property without significantly prolonging the 
physical or economic life of the property.
    (d) The policies do not apply to research or demonstration projects 
which do not result in new construction or reconstruction, to interstate 
land sales registration, or to any action or emergency assistance which 
is provided to save lives, protect property, protect public health and 
safety, or remove debris and wreckage.

[49 FR 880, Jan. 6, 1984, as amended at 61 FR 13334, Mar. 26, 1996]

[[Page 367]]



Sec.  51.303  General policy.

    It is HUD's general policy to apply standards to prevent 
incompatible development around civil airports and military airfields.
    (a) HUD policy for actions in Runway Clear Zones and Clear Zones.
    (1) HUD policy is not to provide any assistance, subsidy or 
insurance for projects and actions covered by this part except as stated 
in Sec.  51.303(a)(2) below.
    (2) If a project proposed for HUD assistance, subsidy or insurance 
is one which will not be frequently used or occupied by people, HUD 
policy is to provide assistance, subsidy or insurance only when written 
assurances are provided to HUD by the airport operator to the effect 
that there are no plans to purchase the land involved with such 
facilities as part of a Runway Clear Zone or Clear Zone acquisition 
program.
    (3) Special notification requirements for Runway Clear Zones and 
Clear Zones. In all cases involving HUD assistance, subsidy, or 
insurance for the purchase or sale of an existing property in a Runway 
Clear Zone or Clear Zone, HUD (or the responsible entity or recipient 
under 24 CFR part 58) shall advise the buyer that the property is in a 
Runway Clear Zone or Clear Zone, what the implications of such a 
location are, and that there is a possibility that the property may, at 
a later date, be acquired by the airport operator. The buyer must sign a 
statement acknowledging receipt of this information.
    (b) HUD policy for actions in Accident Potential Zones at Military 
Airfields. HUD policy is to discourage the provision of any assistance, 
subsidy or insurance for projects and actions in the Accident Potential 
Zones. To be approved, projects must be generally consistent with the 
recommendations in the Land Use Compatibility Guidelines For Accident 
Potential Zones chart contained in DOD Instruction 4165.57, 32 CFR part 
256.

[49 FR 880, Jan. 6, 1984, as amended at 61 FR 13334, Mar. 26, 1996]



Sec.  51.304  Responsibilities.

    (a) The following persons have the authority to approve actions in 
Accident Potential Zones:
    (1) For programs subject to environmental review under 24 CFR part 
58: the Certifying Officer of the responsible entity as defined in 24 
CFR part 58.
    (2) For all other HUD programs: the HUD approving official having 
approval authority for the project.
    (b) The following persons have the authority to approve actions in 
Runway Clear Zones and Clear Zones:
    (1) For programs subject to environmental review under 24 CFR part 
58: The Certifying Officer of the responsible entity as defined in 24 
CFR part 58.
    (2) For all other HUD programs: the Program Assistant Secretary.

[61 FR 13335, Mar. 26, 1996]



Sec.  51.305  Implementation.

    (a) Projects already approved for assistance. This regulation does 
not apply to any project approved for assistance prior to the effective 
date of the regulation whether the project was actually under 
construction at that date or not.
    (b) Acceptable data on Runway Clear Zones, Clear Zones and Accident 
Potential Zones. The only Runway Clear Zones, Clear Zones and Accident 
Potential Zones which will be recognized in applying this part are those 
provided by the airport operators and which for civil airports are 
defined in accordance with FAA regulations 14 CFR part 152 or for 
military airfields, DOD Instruction 4165.57, 32 CFR part 256. All data, 
including changes, related to the dimensions of Runway Clear Zones for 
civil airports shall be verified with the nearest FAA Airports District 
Office before use by HUD.
    (c) Changes in Runway Clear Zones, Clear Zones, and Accident 
Potential Zones. If changes in the Runway Clear Zones, Clear Zones or 
Accident Potential Zones are made, the field offices shall immediately 
adopt these revised zones for use in reviewing proposed projects.
    (d) The decision to approve projects in the Runway Clear Zones, 
Clear

[[Page 368]]

Zones and Accident Potential Zones must be documented as part of the 
enviornmental assessment or, when no assessment is required, as part of 
the project file.



PART 52_INTERGOVERNMENTAL REVIEW OF DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT PROGRAMS AND ACTIVITIES--Table of Contents



Sec.
52.1 What is the purpose of these regulations?
52.2 What definitions apply to these regulations?
52.3 What programs and activities of the Department are subject to these 
          regulations?
52.4 What are the Secretary's general responsibilities under the Order?
52.5 What is the Secretary's obligation with respect to Federal 
          interagency coordination?
52.6 What procedures apply to the selection of programs and activities 
          under these regulations?
52.7 How does the Secretary communicate with state and local officials 
          concerning the Department's programs and activities?
52.8 How does the Secretary provide states an opportunity to comment on 
          proposed Federal financial assistance and direct Federal 
          development?
52.9 How does the Secretary receive and respond to comments?
52.10 How does the Secretary make efforts to accommodate 
          intergovernmental concerns?
52.11 What are the Secretary's obligations in interstate situations?
52.12 [Reserved]

    Authority: 31 U.S.C. 6506; 42 U.S.C. 3334, 3535(d).

    Source: 48 FR 29216, June 24, 1983, unless otherwise noted.



Sec.  52.1  What is the purpose of these regulations?

    (a) The regulations in this part implement Executive Order 12372, 
``Intergovernmental Review of Federal Programs,'' issued July 14, 1982 
and amended on April 8, 1983. These regulations also implement 
applicable provisions of section 401 of the Intergovernmental 
Cooperation Act of 1968 and section 204 of the Demonstration Cities and 
Metropolitan Development Act of 1966.
    (b) These regulations are intended to foster an intergovernmental 
partnership and a strengthened Federalism by relying on state processes 
and on state, areawide, regional and local coordination for review of 
proposed Federal financial assistance and direct Federal development.
    (c) These regulations are intended to aid the internal management of 
the Department, and are not intended to create any right or benefit 
enforceable at law by a party against the Department or its officers.



Sec.  52.2  What definitions apply to these regulations?

    Order means Executive Order 12372, issued July 14, 1982, and amended 
April 8, 1983 and titled ``Intergovernmental Review of Federal 
Programs.''
    Secretary means the Secretary of the U.S. Department of Housing and 
Urban Development or an official or employee of the Department acting 
for the Secretary under a delegation of authority.
    State means any of the 50 states, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, Guam, American Samoa, the U.S. Virgin Islands, or the Trust 
Territory of the Pacific Islands.

[48 FR 29216, June 24, 1983, as amended at 61 FR 5205, Feb. 9, 1996]



Sec.  52.3  What programs and activities of the Department are subject
to these regulations?

    The Secretary publishes in the Federal Register a list of the 
Department's programs and activities that are subject to these 
regulations and identifies which of these are subject to the 
requirements of section 204 of the Demonstration Cities and Metropolitan 
Development Act.



Sec.  52.4  What are the Secretary's general responsibilities under the Order?

    (a) The Secretary provides opportunities for consultation by elected 
officials of those state and local governments that would provide the 
non-federal funds for, or that would be directly affected by, proposed 
Federal financial assistance from, or direct Federal development by, the 
Department.

[[Page 369]]

    (b) If a state adopts a process under the Order to review and 
coordinate proposed Federal financial assistance and direct Federal 
development, the Secretary, to the extent permitted by law:
    (1) Uses the state process to determine official views of state and 
local elected officials;
    (2) Communicates with state and local elected officials as early in 
a program planning cycle as is reasonably feasible to explain specific 
plans and actions;
    (3) Makes efforts to accommodate state and local elected officials' 
concerns with proposed Federal financial assistance and direct Federal 
development that are communicated through the state process;
    (4) Allows the states to simplify and consolidate existing federally 
required state plan submissions;
    (5) Where state planning and budgeting systems are sufficient and 
where permitted by law, encourages the substitution of state plans for 
federally required state plans;
    (6) Seeks the coordination of views of affected state and local 
elected officials in one state with those of another state when proposed 
Federal financial assistance or direct Federal development has an impact 
on interstate metropolitan urban centers or other interstate areas; and
    (7) Supports state and local governments by discouraging the 
reauthorization or creation of any planning organization which is 
federally-funded, which has a limited purpose, and which is not 
adequately representative of, or accountable to, state or local elected 
officials.



Sec.  52.5  What is the Secretary's obligation with respect to Federal
interagency coordination?

    The Secretary, to the extent practicable, consults with and seeks 
advice from all other substantially affected Federal departments and 
agencies in an effort to assure full coordination between such agencies 
and the Department regarding programs and activities covered under these 
regulations.



Sec.  52.6  What procedures apply to the selection of programs and
activities under these regulations?

    (a) A state may select any program or activity published in the 
Federal Register in accordance with Sec.  52.3 of this part for 
intergovernmental review under these regulations. Each state, before 
selecting programs and activities shall consult with local elected 
officials.
    (b) Each state that adopts a process shall notify the Secretary of 
the Department's programs and activities selected for that process.
    (c) A state may notify the Secretary of changes in its selections at 
any time. For each change, the state shall submit to the Secretary an 
assurance that the state has consulted with local elected officials 
regarding the change. The Department may establish deadlines by which 
states are required to inform the Secretary of changes in their program 
selections.
    (d) The Secretary uses a state's process as soon as feasible, 
depending on individual programs and activities, after the Secretary is 
notified of its selections.



Sec.  52.7  How does the Secretary communicate with state and local
officials concerning the Department's programs and activities?

    (a) For those programs and activities covered by a state process 
under Sec.  52.6, the Secretary, to the extent permitted by law--
    (1) Uses the state process to determine views of state and local 
elected officials; and,
    (2) Communicates with state and local elected officials, through the 
state process, as early in a program planning cycle as is reasonably 
feasible to explain specific plans and actions.
    (b) The Secretary provides notice to directly affected state, 
areawide, regional, and local entities in a state of proposed Federal 
financial assistance or direct Federal development if--
    (1) The state has not adopted a process under the Order; or
    (2) The assistance or development involves a program or activity not 
selected for the state process.


This notice may be made by publication in the Federal Register or other

[[Page 370]]

appropriate means, which the Department in its discretion deems 
appropriate.



Sec.  52.8  How does the Secretary provide states an opportunity to
comment on proposed Federal financial assistance and direct Federal
development?

    (a) Except in unusual circumstances, the Secretary gives state 
processes or directly affected state, areawide, regional and local 
officials and entities--
    (1) At least 30 days from the date established by the Secretary to 
comment on proposed Federal financial assistance under: (i) A covered 
mortgage insurance program, (ii) the Urban Development Action Grant 
Program, or (iii) the Housing Development Grant Program.
    (2) At least 60 days from the date established by the Secretary to 
comment on proposed Federal financial assistance other than under a 
program covered by paragraph (a)(1).
    (b) This section also applies to comments in cases in which the 
review, coordination, and communication with the Department have been 
delegated.
    (c) Applicants for programs and activities subject to section 204 of 
the Demonstration Cities and Metropolitan Act shall allow areawide 
agencies a 60-day opportunity for review and comment.

[48 FR 29216, June 24, 1983, as amended at 49 FR 24653, June 14, 1984]



Sec.  52.9  How does the Secretary receive and respond to comments?

    (a) The Secretary follows the procedures in Sec.  52.10 if--
    (1) A state office or official is designated to act as a single 
point of contact between a state process and all Federal agencies, and
    (2) That office or official transmits a state process recommendation 
for a program selected under Sec.  52.6.
    (b)(1) The single point of contact is not obligated to transmit 
comments from state, areawide, regional or local officials and entities 
where there is no state process recommendation.
    (2) If a state process recommendation is transmitted by a single 
point of contact, all comments from state, areawide, regional, and local 
officials and entities that differ from it must also be transmitted.
    (c) If a state has not established a process, or is unable to submit 
a state process recommendation, state, areawide, regional and local 
officials and entities may submit comments either to the applicant or to 
the Department.
    (d) If a program or activity is not selected for a state process, 
state, areawide, regional and local officials and entities may submit 
comments either to the applicant or to the Department. In addition, if a 
state process recommendation for a nonselected program or activity is 
transmitted to the Department by the single point of contact, the 
Secretary follows the procedures of Sec.  52.10 of this part.
    (e) The Secretary considers comments which do not constitute a state 
process recommendation submitted under these regulations and for which 
the Secretary is not required to apply the procedures of Sec.  52.10 of 
this part, when such comments are provided by a single point of contact, 
by the applicant, or directly to the Department by a commenting party.



Sec.  52.10  How does the Secretary make efforts to accommodate 
intergovernmental concerns?

    (a) If a state process provides a state process recommendation to 
the Department through its single point of contact, the Secretary 
either--
    (1) Accepts the recommendation;
    (2) Reaches a mutually agreeable solution with the state process; or
    (3) Provides the single point of contact with such written 
explanation of its decision, as the Secretary in his or her discretion 
deems appropriate. The Secretary may also supplement the written 
explanation by providing the explanation to the single point of contact 
by telephone, other telecommunication, or other means.
    (b) In any explanation under paragraph (a)(3) of this section, the 
Secretary informs the single point of contact that--
    (1) The Department will not implement its decision for at least ten 
days after the single point of contact receives the explanation; or

[[Page 371]]

    (2) The Secretary has reviewed the decision and determined that, 
because of unusual circumstances, the waiting period of at least ten 
days is not feasible.
    (c) For purposes of computing the waiting period under paragraph 
(b)(1) of this section, a single point of contact is presumed to have 
received written notification 5 days after the date of mailing of such 
notification.



Sec.  52.11  What are the Secretary's obligations in interstate
situations?

    (a) The Secretary is responsible for--
    (1) Identifying proposed Federal financial assistance and direct 
Federal development that have an impact on interstate areas;
    (2) Notifying appropriate officials and entities in states which 
have adopted a process and which select the Department's program or 
activity.
    (3) Making efforts to identify and notify the affected state, 
areawide, regional, and local officials and entities in those states 
that have not adopted a process under the Order or do not select the 
Department's program or activity;
    (4) Responding pursuant to Sec.  52.10 of this part if the Secretary 
receives a recommendation from a designated areawide agency transmitted 
by a single point of contact, in cases in which review, coordination, 
and communication with the Department have been delegated.
    (b) The Secretary uses the procedures in Sec.  52.10 if a state 
process provides a state process recommendation to the Department 
through a single point of contact.



Sec.  52.12  [Reserved]



PART 55_FLOODPLAIN MANAGEMENT AND PROTECTION OF WETLANDS
--Table of Contents



                            Subpart A_General

Sec.
55.1 Purpose and basic responsibility.
55.2 Terminology.
55.3 Assignment of responsibilities.

 Subpart B_Application of Executive Orders on Floodplain Management and 
                         Protection of Wetlands

55.10 Environmental review procedures under 24 CFR parts 50 and 58.
55.11 Applicability of subpart C decisionmaking process.
55.12 Inapplicability of 24 CFR part 55 to certain categories of 
          proposed actions.

Subpart C_Procedures for Making Determinations on Floodplain Management 
                       and Protection of Wetlands

55.20 Decision making process.
55.21 Notification of floodplain hazard.
55.22 Conveyance restrictions for the disposition of multifamily real 
          property.
55.23 [Reserved]
55.24 Aggregation.
55.25 Areawide compliance.
55.26 Adoption of another agency's review under the executive orders.
55.27 Documentation.
55.28 Use of individual permits under section 404 of the Clean Water Act 
          for HUD Executive Order 11990 processing where all wetlands 
          are covered by the permit.

    Authority: 42 U.S.C. 3535(d), 4001-4128 and 5154a; E.O. 11988, 42 FR 
26951, 3 CFR, 1977 Comp., p. 117; E.O. 11990, 42 FR 26961, 3 CFR, 1977 
Comp., p 121.

    Source: 59 FR 19107, Apr. 21, 1994, unless otherwise noted.



                            Subpart A_General



Sec.  55.1  Purpose and basic responsibility.

    (a)(1) The purpose of Executive Order 11988, Floodplain Management, 
is ``to avoid to the extent possible the long and short-term adverse 
impacts associated with the occupancy and modification of floodplains 
and to avoid direct or indirect support of floodplain development 
wherever there is a practicable alternative.''
    (2) The purpose of Executive Order 11990, Protection of Wetlands, is 
``to avoid to the extent possible the long- and short-term adverse 
impacts associated with the destruction or modification of wetlands and 
to avoid direct or indirect support of new construction in wetlands 
wherever there is a practicable alternative.''

[[Page 372]]

    (3) This part implements the requirements of Executive Order 11988, 
Floodplain Management, and Executive Order 11990, Protection of 
Wetlands, and employs the principles of the Unified National Program for 
Floodplain Management. These regulations apply to all HUD (or 
responsible entity) actions that are subject to potential harm by 
location in floodplains or wetlands. Covered actions include the 
proposed acquisition, construction, demolition, improvement, 
disposition, financing, and use of properties located in floodplains or 
wetlands for which approval is required either from HUD, under any 
applicable HUD program, or from a responsible entity authorized by 24 
CFR part 58.
    (4) This part does not prohibit approval of such actions (except for 
certain actions in Coastal High Hazard Areas), but provides a consistent 
means for implementing the Department's interpretation of the Executive 
Orders in the project approval decisionmaking processes of HUD and of 
responsible entities subject to 24 CFR part 58. The implementation of 
Executive Orders 11988 and 11990 under this part shall be conducted by 
HUD for Department-administered programs subject to environmental review 
under 24 CFR part 50 and by authorized responsible entities that are 
responsible for environmental review under 24 CFR part 58.
    (5) Nonstructural alternatives to floodplain development and the 
destruction of wetlands are both favored and encouraged to reduce the 
loss of life and property caused by floods, and to restore the natural 
resources and functions of floodplains and wetlands. Nonstructural 
alternatives should be discussed in the decisionmaking process where 
practicable.
    (b)(1) Under section 202(a) of the Flood Disaster Protection Act of 
1973, 42 U.S.C. 4106(a), proposed HUD financial assistance (including 
mortgage insurance) for acquisition or construction purposes in any 
``area having special flood hazards'' (a flood zone designated by the 
Federal Emergency Management Agency (FEMA)) shall not be approved in 
communities identified by FEMA as eligible for flood insurance but which 
are not participating in the National Flood Insurance Program. This 
prohibition only applies to proposed HUD financial assistance in a FEMA-
designated area of special flood hazard one year after the community has 
been formally notified by FEMA of the designation of the affected area. 
This prohibition is not applicable to HUD financial assistance in the 
form of formula grants to states, including financial assistance under 
the State-administered CDBG Program (24 CFR part 570, subpart I) and the 
State-administered Rental Rehabilitation Program (24 CFR 511.51), 
Emergency Shelter Grant amounts allocated to States (24 CFR parts 575 
and 576), and HOME funds provided to a state under Title II of the 
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12701-
12839).
    (2) Under section 582 of the National Flood Insurance Reform Act of 
1994 (42 U.S.C. 5154a), HUD disaster assistance that is made available 
in a special flood hazard area may not be used to make a payment 
(including any loan assistance payment) to a person for repair, 
replacement, or restoration of damage to any personal, residential, or 
commercial property if:
    (i) The person had previously received Federal flood disaster 
assistance conditioned on obtaining and maintaining flood insurance; and
    (ii) The person failed to obtain and maintain the flood insurance.
    (c) Except with respect to actions listed in Sec.  55.12(c), no HUD 
financial assistance (including mortgage insurance) may be approved 
after May 23, 1994 with respect to:
    (1) Any action other than a functionally dependent use or floodplain 
function restoration activity, located in a floodway;
    (2) Any critical action located in a coastal high hazard area; or
    (3) Any noncritical action located in a Coastal High Hazard Area, 
unless the action is a functionally dependent use, existing construction 
(including improvements), or reconstruction following destruction caused 
by a disaster. If the action is not a functionally dependent use, the 
action must be designed for location in a Coastal High

[[Page 373]]

Hazard Area. An action will be considered designed for a Coastal High 
Hazard Area if:
    (i) In the case of reconstruction following destruction caused by a 
disaster or substantial improvement, the work meets the current 
standards for V zones in FEMA regulations (44 CFR 60.3(e)) and, if 
applicable, the Minimum Property Standards for such construction in 24 
CFR 200.926d(c)(4)(iii); or
    (ii) In the case of existing construction (including any minor 
improvements):
    (A) The work met FEMA elevation and construction standards for a 
coastal high hazard area (or if such a zone or such standards were not 
designated, the 100-year floodplain) applicable at the time the original 
improvements were constructed; or
    (B) If the original improvements were constructed before FEMA 
standards for the 100-year floodplain became effective or before FEMA 
designated the location of the action as within the 100-year floodplain, 
the work would meet at least the earliest FEMA standards for 
construction in the 100-year floodplain.

[59 FR 19107, Apr. 21, 1994, as amended at 78 FR 68728, Nov. 15, 2013]



Sec.  55.2  Terminology.

    (a) With the exception of those terms defined in paragraph (b) of 
this section, the terms used in this part shall follow the definitions 
contained in section 6 of Executive Order 11988, section 7 of Executive 
Order 11990, and the Floodplain Management Guidelines for Implementing 
Executive Order 11988 (43 FR 6030, February 10, 1978), issued by the 
Water Resources Council; the terms ``special flood hazard area,'' 
``criteria,'' and ``Regular Program'' shall follow the definitions 
contained in FEMA regulations at 44 CFR 59.1; and the terms ``Letter of 
Map Revision'' and ``Letter of Map Amendment'' shall refer to letters 
issued by FEMA, as provided in 44 CFR part 65 and 44 CFR part 70, 
respectively.
    (b) For purposes of this part, the following definitions apply:
    (1) Coastal high hazard area means the area subject to high velocity 
waters, including but not limited to hurricane wave wash or tsunamis. 
The area is designated on a Flood Insurance Rate Map (FIRM) or Flood 
Insurance Study (FIS) under FEMA regulations. FIRMs and FISs are also 
relied upon for the designation of ``100-year floodplains'' (Sec.  
55.2(b)(9)), ``500-year floodplains'' (Sec.  55.2(b)(4)), and 
``floodways'' (Sec.  55.2(b)(5)). When FEMA provides interim flood 
hazard data, such as Advisory Base Flood Elevations (ABFE) or 
preliminary maps and studies, HUD or the responsible entity shall use 
the latest of these sources. If FEMA information is unavailable or 
insufficiently detailed, other Federal, state, or local data may be used 
as ``best available information'' in accordance with Executive Order 
11988. However, a base flood elevation from an interim or preliminary or 
non-FEMA source cannot be used if it is lower than the current FIRM and 
FIS.
    (2) Compensatory mitigation means the restoration (reestablishment 
or rehabilitation), establishment (creation), enhancement, and/or, in 
certain circumstances, preservation of aquatic resources for the 
purposes of offsetting unavoidable adverse impacts that remain after all 
appropriate and practicable avoidance and minimization have been 
achieved.
    Examples include, but are not limited to:
    (i) Permittee-responsible mitigation: On-site or off-site mitigation 
undertaken by the holder of a wetlands permit under section 404 of the 
Clean Water Act (or an authorized agent or contractor), for which the 
permittee retains full responsibility;
    (ii) Mitigation banking: A permittee's purchase of credits from a 
wetlands mitigation bank, comprising wetlands that have been set aside 
to compensate for conversions of other wetlands; the mitigation 
obligation is transferred to the sponsor of the mitigation bank; and
    (iii) In-lieu fee mitigation: A permittee's provision of funds to an 
in-lieu fee sponsor (public agency or nonprofit organization) that 
builds and maintains a mitigation site, often after the permitted 
adverse wetland impacts have occurred; the mitigation obligation is 
transferred to the in-lieu fee sponsor.
    (3)(i) Critical action means any activity for which even a slight 
chance of

[[Page 374]]

flooding would be too great, because such flooding might result in loss 
of life, injury to persons, or damage to property. Critical actions 
include activities that create, maintain or extend the useful life of 
those structures or facilities that:
    (A) Produce, use or store highly volatile, flammable, explosive, 
toxic or water-reactive materials;
    (B) Provide essential and irreplaceable records or utility or 
emergency services that may become lost or inoperative during flood and 
storm events (e.g., data storage centers, generating plants, principal 
utility lines, emergency operations centers including fire and police 
stations, and roadways providing sole egress from flood-prone areas); or
    (C) Are likely to contain occupants who may not be sufficiently 
mobile to avoid loss of life or injury during flood or storm events, 
e.g., persons who reside in hospitals, nursing homes, convalescent 
homes, intermediate care facilities, board and care facilities, and 
retirement service centers. Housing for independent living for the 
elderly is not considered a critical action.
    (ii) Critical actions shall not be approved in floodways or coastal 
high hazard areas.
    (4) 500-year floodplain means the minimum floodplain of concern for 
Critical Actions and is the area subject to inundation from a flood 
having a 0.2 percent chance of occurring in any given year. (See Sec.  
55.2(b)(1) for appropriate data sources.)
    (5) Floodway means that portion of the floodplain which is effective 
in carrying flow, where the flood hazard is generally the greatest, and 
where water depths and velocities are the highest. The term ``floodway'' 
as used here is consistent with ``regulatory floodways'' as identified 
by FEMA. (See Sec.  55.2(b)(1) for appropriate data sources.)
    (6) Functionally dependent use means a land use that must 
necessarily be conducted in close proximity to water (e.g., a dam, 
marina, port facility, water-front park, and many types of bridges).
    (7) High hazard area means a floodway or a coastal high hazard area.
    (8) New construction includes draining, dredging, channelizing, 
filling, diking, impounding, and related activities and any structures 
or facilities begun after the effective date of Executive Order 11990. 
(See section 7(b) of Executive Order 11990.)
    (9) 100-year floodplain means the floodplain of concern for this 
part and is the area subject to inundation from a flood having a one 
percent or greater chance of being equaled or exceeded in any given 
year. (See Sec.  55.2(b)(1) for appropriate data sources.)
    (10)(i) Substantial improvement means either:
    (A) Any repair, reconstruction, modernization or improvement of a 
structure, the cost of which equals or exceeds 50 percent of the market 
value of the structure either:
    (1) Before the improvement or repair is started; or
    (2) If the structure has been damaged, and is being restored, before 
the damage occurred; or
    (B) Any repair, reconstruction, modernization or improvement of a 
structure that results in an increase of more than twenty percent in the 
number of dwelling units in a residential project or in the average peak 
number of customers and employees likely to be on-site at any one time 
for a commercial or industrial project.
    (ii) Substantial improvement may not be defined to include either:
    (A) Any project for improvement of a structure to comply with 
existing state or local health, sanitary or safety code specifications 
that is solely necessary to assure safe living conditions, or
    (B) Any alteration of a structure listed on the National Register of 
Historical Places or on a State Inventory of Historic Places.
    (iii) Structural repairs, reconstruction, or improvements not 
meeting this definition are considered ``minor improvements''.
    (11) Wetlands means those areas that are inundated by surface or 
ground water with a frequency sufficient to support, and under normal 
circumstances does or would support, a prevalence of vegetative or 
aquatic life that requires saturated or seasonally saturated soil 
conditions for growth and reproduction. Wetlands generally

[[Page 375]]

include swamps, marshes, bogs, and similar areas such as sloughs, 
potholes, wet meadows, river overflows, mud flats, and natural ponds. 
This definition includes those wetland areas separated from their 
natural supply of water as a result of activities such as the 
construction of structural flood protection methods or solid-fill road 
beds and activities such as mineral extraction and navigation 
improvements. This definition includes both wetlands subject to and 
those not subject to section 404 of the Clean Water Act as well as 
constructed wetlands. The following process shall be followed in making 
the wetlands determination:
    (i) HUD or, for programs subject to 24 CFR part 58, the responsible 
entity, shall make a determination whether the action is new 
construction that is located in a wetland. These actions are subject to 
processing under the Sec.  55.20 decisionmaking process for the 
protection of wetlands.
    (ii) As primary screening, HUD or the responsible entity shall 
verify whether the project area is located in proximity to wetlands 
identified on the National Wetlands Inventory (NWI). If so, HUD or the 
responsible entity should make a reasonable attempt to consult with the 
Department of the Interior, Fish and Wildlife Service (FWS), for 
information concerning the location, boundaries, scale, and 
classification of wetlands within the area. If an NWI map indicates the 
presence of wetlands, FWS staff, if available, must find that no wetland 
is present in order for the action to proceed without further 
processing. Where FWS staff is unavailable to resolve any NWI map 
ambiguity or controversy, an appropriate wetlands professional must find 
that no wetland is present in order for the action to proceed without 
Sec.  55.20 processing.
    (iii) As secondary screening used in conjunction with NWI maps, HUD 
or the responsible entity is encouraged to use the Department of 
Agriculture, Natural Resources Conservation Service (NRCS) National Soil 
Survey (NSS) and any state and local information concerning the 
location, boundaries, scale, and classification of wetlands within the 
action area.
    (iv) Any challenges from the public or other interested parties to 
the wetlands determinations made under this part must be made in writing 
to HUD (or the responsible entity authorized under 24 CFR part 58) 
during the commenting period and must be substantiated with verifiable 
scientific information. Commenters may request a reasonable extension of 
the time for the commenting period for the purpose of substantiating any 
objections with verifiable scientific information. HUD or the 
responsible entity shall consult FWS staff, if available, on the 
validity of the challenger's scientific information prior to making a 
final wetlands determination.

[59 FR 19107, Apr. 21, 1994, as amended at 78 FR 68729, Nov. 15, 2013]



Sec.  55.3  Assignment of responsibilities.

    (a)(1) The Assistant Secretary for Community Planning and 
Development (CPD) shall oversee:
    (i) The Department's implementation of Executive Orders 11988 and 
11990 and this part in all HUD programs; and
    (ii) The implementation activities of HUD program managers and, for 
HUD financial assistance subject to 24 CFR part 58, of grant recipients 
and responsible entities.
    (2) In performing these responsibilities, the Assistant Secretary 
for CPD shall make pertinent policy determinations in cooperation with 
appropriate program offices and provide necessary assistance, training, 
publications, and procedural guidance.
    (b) Other HUD Assistant Secretaries, the General Counsel, and the 
President of the Government National Mortgage Association (GNMA) shall:
    (1) Ensure compliance with this part for all actions under their 
jurisdiction that are proposed to be conducted, supported, or permitted 
in a floodplain or wetland;
    (2) Ensure that actions approved by HUD or responsible entities are 
monitored and that any prescribed mitigation is implemented;
    (3) Ensure that the offices under their jurisdiction have the 
technical resources to implement the requirements of this part; and
    (4) Incorporate in departmental regulations, handbooks, and project 
and

[[Page 376]]

site standards those criteria, standards, and procedures necessary to 
comply with the requirements of this part.
    (c) Responsible Entity Certifying Officer. Certifying Officers of 
responsible entities administering or reviewing activities subject to 24 
CFR part 58 shall comply with this part in carrying out HUD-assisted 
programs. Certifying Officers of responsible entities subject to 24 CFR 
part 58 shall monitor approved actions and ensure that any prescribed 
mitigation is implemented.
    (d) Recipient. Recipients subject to 24 CFR part 58 shall monitor 
approved actions and ensure that any prescribed mitigation is 
implemented. Recipients shall:
    (1) Supply HUD (or the responsible entity authorized by 24 CFR part 
58) with all available, relevant information necessary for HUD (or the 
responsible entity) to perform the compliance required by this part; and
    (2) Implement mitigating measures required by HUD (or the 
responsible entity authorized by 24 CFR part 58) under this part or 
select alternate eligible property.

[59 FR 19107, Apr. 21, 1994, as amended at78 FR 68730, Nov. 15, 2013]



 Subpart B_Application of Executive Orders on Floodplain Management and 
                         Protection of Wetlands



Sec.  55.10  Environmental review procedures under 24 CFR parts 50 and 58.

    (a) Where an environmental review is required under the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), and 24 
CFR part 50 or part 58, compliance with this part shall be completed 
before the completion of an environmental assessment (EA), including a 
finding of no significant impact (FONSI), or an environmental impact 
statement (EIS), in accordance with the decision points listed in 24 CFR 
50.17(a) through (h), or before the preparation of an EA under 24 CFR 
58.40 or an EIS under 24 CFR 58.37. For types of proposed actions that 
are categorically excluded from NEPA requirements under 24 CFR part 50 
(or part 58), compliance with this part shall be completed before the 
Department's initial approval (or approval by a responsible entity 
authorized by 24 CFR part 58) of proposed actions in a floodplain or 
wetland.
    (b) The categorical exclusion of certain proposed actions from 
environmental review requirements under NEPA and 24 CFR parts 50 and 58 
(see 24 CFR 50.20 and 58.35(a)) does not exclude those actions from 
compliance with this part.

[78 FR 68730, Nov. 15, 2013]



Sec.  55.11  Applicability of Subpart C decisionmaking process.

    (a) Before reaching the decision points described in Sec.  55.10(a), 
HUD (for Department-administered programs) or the responsible entity 
(for HUD financial assistance subject to 24 CFR part 58) shall determine 
whether Executive Order 11988, Executive Order 11990, and this part 
apply to the proposed action.
    (b) If Executive Order 11988 or Executive Order 11990 and this part 
apply, the approval of a proposed action or initial commitment shall be 
made in accordance with this part. The primary purpose of Executive 
Order 11988 is ``to avoid to the extent possible the long and short term 
adverse impacts associated with the occupancy and modification of 
floodplains and to avoid direct or indirect support of floodplain 
development wherever there is a practicable alternative.'' The primary 
purpose of Executive Order 11990 is ``to avoid to the extent possible 
the long and short-term adverse impacts associated with the destruction 
or modification of wetlands and to avoid direct or indirect support of 
new construction in wetlands wherever there is a practicable 
alternative.''
    (c) The following table indicates the applicability, by location and 
type of action, of the decisionmaking process for implementing Executive 
Order 11988 and Executive Order 11990 under subpart C of this part.

[[Page 377]]



                                                     TABLE 1
----------------------------------------------------------------------------------------------------------------
                                                              Type of proposed action
                                 -------------------------------------------------------------------------------
  Type of proposed action (new                                             Wetlands or 100-    Nonwetlands area
     reviewable action or an                                                year floodplain   outside of the 100-
         amendment) \1\                Floodways         Coastal high       outside coastal     year and within
                                                         hazard areas      high hazard area      the 500-year
                                                                             and floodways        floodplain
----------------------------------------------------------------------------------------------------------------
Critical Actions as defined in    Critical actions    Critical actions    Allowed if the      Allowed if the
 Sec.   55.12(b)(2).               not allowed.        not allowed.        proposed critical   proposed critical
                                                                           action is           action is
                                                                           processed under     processed under
                                                                           Sec.   55.20.\2\    Sec.   55.20.\2\
Noncritical actions not excluded  Allowed only if     Allowed only if     Allowed if          Any noncritical
 under Sec.   55.12(b) or (c).     the proposed non-   the proposed        proposed            action is allowed
                                   critical action     noncritical         noncritical         without
                                   is a functionally   action is           action is           processing under
                                   dependent use and   processed under     processed under     this part.
                                   processed under     Sec.   55.20 \2\    Sec.   55.20.\2\
                                   Sec.   55.20.\2\    and is (1) a
                                                       functionally
                                                       dependent use,
                                                       (2) existing
                                                       construction
                                                       (including
                                                       improvements), or
                                                       (3)
                                                       reconstruction
                                                       following
                                                       destruction
                                                       caused by a
                                                       disaster. If the
                                                       action is not a
                                                       functionally
                                                       dependent use,
                                                       the action must
                                                       be designed for
                                                       location in a
                                                       Coastal High
                                                       Hazard Area under
                                                       Sec.   55.1(c)(3).
----------------------------------------------------------------------------------------------------------------
\1\ Under Executive Order 11990, the decisionmaking process in Sec.   55.20 only applies to Federal assistance
  for new construction in wetlands locations.
\2\ Or those paragraphs of Sec.   55.20 that are applicable to an action listed in Sec.   55.12(a).


[78 FR 68730, Nov. 15, 2013]



Sec.  55.12  Inapplicability of 24 CFR part 55 to certain categories of proposed actions.

    (a) The decisionmaking steps in Sec.  55.20(b), (c), and (g) (steps 
2, 3, and 7) do not apply to the following categories of proposed 
actions:
    (1) HUD's or the recipient's actions involving the disposition of 
acquired multifamily housing projects or ``bulk sales'' of HUD-acquired 
(or under part 58 of recipients') one- to four-family properties in 
communities that are in the Regular Program of National Flood Insurance 
Program and in good standing (i.e., not suspended from program 
eligibility or placed on probation under 44 CFR 59.24). For programs 
subject to part 58, this paragraph applies only to recipients' 
disposition activities that are subject to review under part 58.
    (2) HUD's actions under the National Housing Act (12 U.S.C. 1701) 
for the purchase or refinancing of existing multifamily housing 
projects, hospitals, nursing homes, assisted living facilities, board 
and care facilities, and intermediate care facilities, in communities 
that are in good standing under the NFIP.
    (3) HUD's or the recipient's actions under any HUD program involving 
the repair, rehabilitation, modernization, weatherization, or 
improvement of existing multifamily housing projects, hospitals, nursing 
homes, assisted living facilities, board and care facilities, 
intermediate care facilities, and one- to four-family properties, in 
communities that are in the Regular Program of the National Flood 
Insurance Program (NFIP) and are in good standing, provided that the 
number of units is not increased more than 20 percent, the action does 
not involve a conversion from nonresidential to residential land use, 
the action does not meet the thresholds for ``substantial improvement'' 
under Sec.  55.2(b)(10), and the footprint of the structure and paved 
areas is not significantly increased.
    (4) HUD's or the recipient's actions under any HUD program involving 
the repair, rehabilitation, modernization, weatherization, or 
improvement of existing nonresidential buildings and structures, in 
communities that are in the Regular Program of the NFIP and

[[Page 378]]

are in good standing, provided that the action does not meet the 
thresholds for ``substantial improvement'' under Sec.  55.2(b)(10) and 
that the footprint of the structure and paved areas is not significantly 
increased.
    (b) The decisionmaking process in Sec.  55.20 shall not apply to the 
following categories of proposed actions:
    (1) HUD's mortgage insurance actions and other financial assistance 
for the purchasing, mortgaging or refinancing of existing one- to four-
family properties in communities that are in the Regular Program of the 
NFIP and in good standing (i.e., not suspended from program eligibility 
or placed on probation under 44 CFR 59.24), where the action is not a 
critical action and the property is not located in a floodway or Coastal 
High Hazard Area;
    (2) Financial assistance for minor repairs or improvements on one- 
to four-family properties that do not meet the thresholds for 
``substantial improvement'' under Sec.  55.2(b)(10);
    (3) HUD or a recipient's actions involving the disposition of 
individual HUD-acquired, one- to four-family properties;
    (4) HUD guarantees under the Loan Guarantee Recovery Fund Program 
(24 CFR part 573) of loans that refinance existing loans and mortgages, 
where any new construction or rehabilitation financed by the existing 
loan or mortgage has been completed prior to the filing of an 
application under the program, and the refinancing will not allow 
further construction or rehabilitation, nor result in any physical 
impacts or changes except for routine maintenance; and
    (5) The approval of financial assistance to lease an existing 
structure located within the floodplain, but only if;
    (i) The structure is located outside the floodway or Coastal High 
Hazard Area, and is in a community that is in the Regular Program of the 
NFIP and in good standing (i.e., not suspended from program eligibility 
or placed on probation under 44 CFR 59.24);
    (ii) The project is not a critical action; and
    (iii) The entire structure is or will be fully insured or insured to 
the maximum under the NFIP for at least the term of the lease.
    (c) This part shall not apply to the following categories of 
proposed HUD actions:
    (1) HUD-assisted activities described in 24 CFR 58.34 and 58.35(b);
    (2) HUD-assisted activities described in 24 CFR 50.19, except as 
otherwise indicated in Sec.  50.19;
    (3) The approval of financial assistance for restoring and 
preserving the natural and beneficial functions and values of 
floodplains and wetlands, including through acquisition of such 
floodplain and wetland property, but only if:
    (i) The property is cleared of all existing structures and related 
improvements;
    (ii) The property is dedicated for permanent use for flood control, 
wetland protection, park land, or open space; and
    (iii) A permanent covenant or comparable restriction is placed on 
the property's continued use to preserve the floodplain or wetland from 
future development.
    (4) An action involving a repossession, receivership, foreclosure, 
or similar acquisition of property to protect or enforce HUD's financial 
interests under previously approved loans, grants, mortgage insurance, 
or other HUD assistance;
    (5) Policy-level actions described at 24 CFR 50.16 that do not 
involve site-based decisions;
    (6) A minor amendment to a previously approved action with no 
additional adverse impact on or from a floodplain or wetland;
    (7) HUD's or the responsible entity's approval of a project site, an 
incidental portion of which is situated in an adjacent floodplain, 
including the floodway or Coastal High Hazard Area, or wetland, but only 
if:
    (i) The proposed construction and landscaping activities (except for 
minor grubbing, clearing of debris, pruning, sodding, seeding, or other 
similar activities) do not occupy or modify the 100-year floodplain (or 
the 500-year floodplain for critical actions) or the wetland;
    (ii) Appropriate provision is made for site drainage that would not 
have an adverse effect on the wetland; and

[[Page 379]]

    (iii) A permanent covenant or comparable restriction is placed on 
the property's continued use to preserve the floodplain or wetland;
    (8) HUD's or the responsible entity's approval of financial 
assistance for a project on any nonwetland site in a floodplain for 
which FEMA has issued:
    (i) A final Letter of Map Amendment (LOMA), final Letter of Map 
Revision (LOMR), or final Letter of Map Revision Based on Fill (LOMR-F) 
that removed the property from a FEMA-designated floodplain location; or
    (ii) A conditional LOMA, conditional LOMR, or conditional LOMR-F if 
HUD or the responsible entity's approval is subject to the requirements 
and conditions of the conditional LOMA or conditional LOMR;
    (9) Issuance or use of Housing Vouchers, Certificates under the 
Section 8 Existing Housing Program, or other forms of rental subsidy 
where HUD, the awarding community, or the public housing agency that 
administers the contract awards rental subsidies that are not project-
based (i.e., do not involve site-specific subsidies);
    (10) Special projects directed to the removal of material and 
architectural barriers that restrict the mobility of and accessibility 
to elderly and persons with disabilities;
    (11) The approval of financial assistance for acquisition, leasing, 
construction, rehabilitation, repair, maintenance, or operation of ships 
and other waterborne vessels that will be used for transportation or 
cruises and will not be permanently moored.

[78 FR 68731, Nov. 15, 2013; 78 FR 74009, Dec. 10, 2013]



Subpart C_Procedures for Making Determinations on Floodplain Management 
                       and Protection of Wetlands



Sec.  55.20  Decision making process.

    Except for actions covered by Sec.  55.12(a), the decisionmaking 
process for compliance with this part contains eight steps, including 
public notices and an examination of practicable alternatives when 
addressing floodplains and wetlands. The steps to be followed in the 
decisionmaking process are as follows:
    (a) Step 1. Determine whether the proposed action is located in the 
100-year floodplain (500-year floodplain for critical actions) or 
results in new construction in a wetland. If the action does not occur 
in a floodplain or result in new construction in a wetland, then no 
further compliance with this part is required. The following process 
shall be followed by HUD (or the responsible entity) in making wetland 
determinations.
    (1) Refer to Sec.  55.28(a) where an applicant has submitted with 
its application to HUD (or to the recipient under programs subject to 24 
CFR part 58) an individual Section 404 permit (including approval 
conditions and related environmental review).
    (2) Refer to Sec.  55.2(b)(11) for making wetland determinations 
under this part.
    (3) For proposed actions occurring in both a wetland and a 
floodplain, completion of the decisionmaking process under Sec.  55.20 
is required regardless of the issuance of a Section 404 permit. In such 
a case, the wetland will be considered among the primary natural and 
beneficial functions and values of the floodplain.
    (b) Step 2. Notify the public and agencies responsible for 
floodplain management or wetlands protection at the earliest possible 
time of a proposal to consider an action in a 100-year floodplain (or a 
500-year floodplain for a Critical Action) or wetland and involve the 
affected and interested public and agencies in the decisionmaking 
process.
    (1) The public notices required by paragraphs (b) and (g) of this 
section may be combined with other project notices wherever appropriate. 
Notices required under this part must be bilingual if the affected 
public is largely non-English speaking. In addition, all notices must be 
published in an appropriate local printed news medium, and must be sent 
to federal, state, and local public agencies, organizations, and, where 
not otherwise covered, individuals known to be interested in the 
proposed action.
    (2) A minimum of 15 calendar days shall be allowed for comment on 
the public notice.

[[Page 380]]

    (3) A notice under this paragraph shall state: The name, proposed 
location, and description of the activity; the total number of acres of 
floodplain or wetland involved; the related natural and beneficial 
functions and values of the floodplain or wetland that may be adversely 
affected by the proposed activity; the HUD approving official (or the 
Certifying Officer of the responsible entity authorized by 24 CFR part 
58); and the phone number to call for information. The notice shall 
indicate the hours of HUD or the responsible entity's office, and any 
Web site at which a full description of the proposed action may be 
reviewed.
    (c) Step 3. Identify and evaluate practicable alternatives to 
locating the proposed action in a 100-year floodplain (or a 500-year 
floodplain for a Critical Action) or wetland.
    (1) Except as provided in paragraph (c)(3) of this section, HUD's or 
the responsible entity's consideration of practicable alternatives to 
the proposed site selected for a project should include:
    (i) Locations outside and not affecting the 100-year floodplain (or 
the 500-year floodplain for a Critical Action) or wetland;
    (ii) Alternative methods to serve the identical project objective, 
including feasible technological alternatives; and
    (iii) A determination not to approve any action proposing the 
occupancy or modification of a floodplain or wetland.
    (2) Practicability of alternative sites should be addressed in light 
of the following:
    (i) Natural values such as topography, habitat, and hazards;
    (ii) Social values such as aesthetics, historic and cultural values, 
land use patterns, and environmental justice; and
    (iii) Economic values such as the cost of space, construction, 
services, and relocation.
    (3) For multifamily projects involving HUD mortgage insurance that 
are initiated by third parties, HUD's consideration of practicable 
alternatives should include a determination not to approve the request.
    (d) Step 4. Identify and evaluate the potential direct and indirect 
impacts associated with the occupancy or modification of the 100-year 
floodplain (or the 500-year floodplain for a Critical Action) or the 
wetland and the potential direct and indirect support of floodplain and 
wetland development that could result from the proposed action.
    (1) Floodplain evaluation: The focus of the floodplain evaluation 
should be on adverse impacts to lives and property, and on natural and 
beneficial floodplain values. Natural and beneficial values include:
    (i) Water resources such as natural moderation of floods, water 
quality maintenance, and groundwater recharge;
    (ii) Living resources such as flora and fauna;
    (iii) Cultural resources such as archaeological, historic, and 
recreational aspects; and
    (iv) Agricultural, aquacultural, and forestry resources.
    (2) Wetland evaluation: In accordance with Section 5 of Executive 
Order 11990, the decisionmaker shall consider factors relevant to a 
proposal's effect on the survival and quality of the wetland. Among 
these factors that should be evaluated are:
    (i) Public health, safety, and welfare, including water supply, 
quality, recharge, and discharge; pollution; flood and storm hazards and 
hazard protection; and sediment and erosion;
    (ii) Maintenance of natural systems, including conservation and 
long-term productivity of existing flora and fauna; species and habitat 
diversity and stability; natural hydrologic function; wetland type; 
fish; wildlife; timber; and food and fiber resources;
    (iii) Cost increases attributed to wetland-required new construction 
and mitigation measures to minimize harm to wetlands that may result 
from such use; and
    (iv) Other uses of wetlands in the public interest, including 
recreational, scientific, and cultural uses.
    (e) Step 5. Where practicable, design or modify the proposed action 
to minimize the potential adverse impacts to and from the 100-year 
floodplain (or the 500-year floodplain for a Critical Action) or the 
wetland and to restore and

[[Page 381]]

preserve its natural and beneficial functions and values.
    (1) Minimization techniques for floodplain and wetland purposes 
include, but are not limited to: the use of permeable surfaces, natural 
landscape enhancements that maintain or restore natural hydrology 
through infiltration, native plant species, bioswales, 
evapotranspiration, stormwater capture and reuse, green or vegetative 
roofs with drainage provisions, and Natural Resource Conservation 
Service conservation easements. Floodproofing and elevating structures, 
including freeboard above the required base flood elevations, are also 
minimization techniques for floodplain purposes.
    (2) Appropriate and practicable compensatory mitigation is 
recommended for unavoidable adverse impacts to more than one acre of 
wetland. Compensatory mitigation includes, but is not limited to: 
permitee-responsible mitigation, mitigation banking, in-lieu fee 
mitigation, the use of preservation easements or protective covenants, 
and any form of mitigation promoted by state or Federal agencies. The 
use of compensatory mitigation may not substitute for the requirement to 
avoid and minimize impacts to the maximum extent practicable.
    (3) Actions covered by Sec.  55.12(a) must be rejected if the 
proposed minimization is financially or physically unworkable. All 
critical actions in the 500-year floodplain shall be designed and built 
at or above the 100-year floodplain (in the case of new construction) 
and modified to include:
    (i) Preparation of and participation in an early warning system;
    (ii) An emergency evacuation and relocation plan;
    (iii) Identification of evacuation route(s) out of the 500-year 
floodplain; and
    (iv) Identification marks of past or estimated flood levels on all 
structures.
    (f) Step 6. Reevaluate the proposed action to determine:
    (1) Whether the action is still practicable in light of exposure to 
flood hazards in the floodplain or wetland, possible adverse impacts on 
the floodplain or wetland, the extent to which it will aggravate the 
current hazards to other floodplains or wetlands, and the potential to 
disrupt the natural and beneficial functions and values of floodplains 
or wetlands; and
    (2) Whether alternatives preliminarily rejected at Step 3 (paragraph 
(c)) of this section are practicable in light of information gained in 
Steps 4 and 5 (paragraphs (d) and (e)) of this section.
    (i) The reevaluation of alternatives shall include the potential 
impacts avoided or caused inside and outside the floodplain or wetland 
area. The impacts should include the protection of human life, real 
property, and the natural and beneficial functions and values served by 
the floodplain or wetland.
    (ii) A reevaluation of alternatives under this step should include a 
discussion of economic costs. For floodplains, the cost estimates should 
include savings or the costs of flood insurance, where applicable; flood 
proofing; replacement of services or functions of critical actions that 
might be lost; and elevation to at least the base flood elevation for 
sites located in floodplains, as appropriate on the applicable source 
under Sec.  55.2(b)(1). For wetlands, the cost estimates should include 
the cost of filling the wetlands and mitigation.
    (g) Step 7. (1) If the reevaluation results in a determination that 
there is no practicable alternative to locating the proposal in the 100-
year floodplain (or the 500-year floodplain for a Critical Action) or 
the wetland, publish a final notice that includes:
    (i) The reasons why the proposal must be located in the floodplain 
or wetland;
    (ii) A list of the alternatives considered in accordance with 
paragraphs(c)(1) and (c)(2) of this section; and
    (iii) All mitigation measures to be taken to minimize adverse 
impacts and to restore and preserve natural and beneficial functions and 
values.
    (2) In addition, the public notice procedures of Sec.  55.20(b)(1) 
shall be followed, and a minimum of 7 calendar days for public comment 
before approval of the proposed action shall be provided.
    (h) Step 8. Upon completion of the decisionmaking process in Steps 1

[[Page 382]]

through 7, implement the proposed action. There is a continuing 
responsibility on HUD (or on the responsible entity authorized by 24 CFR 
part 58) and the recipient (if other than the responsible entity) to 
ensure that the mitigating measures identified in Step 7 are 
implemented.

[59 FR 19107, Apr. 21, 1994, as amended at 78 FR 68732, Nov. 15, 2013]



Sec.  55.21  Notification of floodplain hazard.

    For HUD programs under which a financial transaction for a property 
located in a floodplain (a 500-year floodplain for a Critical Action) is 
guaranteed, approved, regulated or insured, any private party 
participating in the transaction and any current or prospective tenant 
shall be informed by HUD (or by HUD's designee, e.g., a mortgagor) or a 
responsible entity subject to 24 CFR part 58 of the hazards of the 
floodplain location before the execution of documents completing the 
transaction.

[59 FR 19107, Apr. 21, 1994, as amended at 78 FR 68734, Nov. 15, 2013]



Sec.  55.22  Conveyance restrictions for the disposition of multifamily
real property.

    (a) In the disposition (including leasing) of multifamily properties 
acquired by HUD that are located in a floodplain (a 500-year floodplain 
for a Critical Action), the documents used for the conveyance must: (1) 
Refer to those uses that are restricted under identified federal, state, 
or local floodplain regulations; and
    (2) Include any land use restrictions limiting the use of the 
property by a grantee or purchaser and any successors under state or 
local laws.
    (b)(1) For disposition of multifamily properties acquired by HUD 
that are located in a 500-year floodplain and contain Critical Actions, 
HUD shall, as a condition of approval of the disposition, require by 
covenant or comparable restriction on the property's use that the 
property owner and successive owners provide written notification to 
each current and prospective tenant concerning: (i) The hazards to life 
and to property for those persons who reside or work in a structure 
located within the 500-year floodplain, and
    (ii) The availability of flood insurance on the contents of their 
dwelling unit or business.
    (2) The notice shall also be posted in the building so that it will 
be legible at all times and easily visible to all persons entering or 
using the building.

[59 FR 19107, Apr. 21, 1994, as amended at 59 FR 33199, June 28, 1994]



Sec.  55.23  [Reserved]



Sec.  55.24  Aggregation.

    Where two or more actions have been proposed, require compliance 
with subpart C of this part, affect the same floodplain or wetland, and 
are currently under review by HUD (or by a responsible entity authorized 
by 24 CFR part 58), individual or aggregated approvals may be issued. A 
single compliance review and approval under this section is subject to 
compliance with the decisionmaking process in Sec.  55.20.

[78 FR 68734, Nov. 15, 2013]



Sec.  55.25  Areawide compliance.

    (a) A HUD-approved areawide compliance process may be substituted 
for individual compliance or aggregated compliance under Sec.  55.24 
where a series of individual actions is proposed or contemplated in a 
pertinent area for HUD's examination of floodplain hazards. In areawide 
compliances, the area for examination may include a sector of, or the 
entire, floodplain--as relevant to the proposed or anticipated actions. 
The areawide compliance process shall be in accord with the decision 
making process under Sec.  55.20.
    (b) The areawide compliance process shall address the relevant 
executive orders and shall consider local land use planning and 
development controls (e.g., those enforced by the community for purposes 
of floodplain management under the National Flood Insurance Program 
(NFIP)) and applicable state programs for floodplain management. The 
process shall include the development and publication of a strategy that 
identifies the range of development and mitigation measures under which 
the proposed HUD assistance may be approved and that indicates the

[[Page 383]]

types of actions that will not be approved in the floodplain.
    (c) Individual actions that fit within the types of proposed HUD 
actions specifically addressed under the areawide compliance do not 
require further compliance with Sec.  55.20 except that a determination 
by the Department or a responsible entitysubject to 24 CFR part 58 shall 
be made concerning whether the individual action accords with the 
areawide strategy. Where the individual action does not accord with the 
areawide strategy, specific development and mitigation measures shall be 
prescribed as a condition of HUD's approval of the individual action.
    (d) Areawide compliance under the procedures of this section is 
subject to the following provisions:
    (1) It shall be initiated by HUD through a formal agreement of 
understanding with affected local governments concerning mutual 
responsibilities governing the preparation, issuance, implementation, 
and enforcement of the areawide strategy;
    (2) It may be performed jointly with one or more Federal departments 
or agencies, or responsible entities subject to 24 CFR part 58 that 
serve as the responsible Federal official;
    (3) It shall establish mechanisms to ensure that:
    (i) The terms of approval of individual actions (e.g., concerning 
structures and facilities) will be consistent with the areawide 
strategy;
    (ii) The controls set forth in the areawide strategy are implemented 
and enforced in a timely manner; and
    (iii) Where necessary, mitigation for individual actions will be 
established as a condition of approval.
    (4) An open scoping process (in accordance with 40 CFR 1501.7) shall 
be used for determining the scope of issues to be addressed and for 
identifying significant issues related to housing and community 
development for the floodplain;
    (5) Federal, state and local agencies with expertise in floodplain 
management, flood evacuation preparedness, land use planning and 
building regulation, or soil and natural resource conservation shall be 
invited to participate in the scoping process and to provide advice and 
comments; and
    (6) Eligibility for participation in and the use of the areawide 
compliance must be limited to communities that are in the Regular 
Program of the National Flood Insurance Program and in good standing 
(i.e., not suspended from program eligibility or placed on probation 
under 44 CFR 59.24), thereby demonstrating a capacity for and commitment 
to floodplain management standards sufficient to perform 
responsibilities under this part.
    (7) An expiration date (not to exceed ten years from the date of the 
formal adoption by the local governments) for HUD approval of areawide 
compliance under this part must be stated in the agreement between the 
local governments and HUD. In conjunction with the setting of an 
expiration date, a mechanism for HUD's reevaluation of the 
appropriateness of areawide compliance must be provided in the 
agreement.

[59 FR 19107, Apr. 21, 1994, as amended at 78 FR 68734, Nov. 15, 2013]



Sec.  55.26  Adoption of another agency's review under the executive orders.

    If a proposed action covered under this part is already covered in a 
prior review performed under either or both of the Executive Orders by 
another agency, including HUD or a different responsible entity, that 
review may be adopted by HUD or by a responsible entity authorized under 
24 CFR part 58, provided that:
    (a) There is no pending litigation relating to the other agency's 
review for floodplain management or wetland protection;
    (b) The adopting agency makes a finding that:
    (1) The type of action currently proposed is comparable to the type 
of action previously reviewed by the other agency; and
    (2) There has been no material change in circumstances since the 
previous review was conducted; and
    (c) As a condition of approval, mitigation measures similar to those 
prescribed in the previous review shall be required of the current 
proposed action.

[59 FR 19107, Apr. 21, 1994, as amended at78 FR 68734, Nov. 15, 2013]

[[Page 384]]



Sec.  55.27  Documentation.

    (a) For purposes of compliance with Sec.  55.20, the responsible HUD 
official who would approve the proposed action (or Certifying Officer 
for a responsible entity authorized by 24 CFR part 58) shall require 
that the following actions be documented:
    (1) When required by Sec.  55.20(c), practicable alternative sites 
have been considered outside the floodplain or wetland, but within the 
local housing market area, the local public utility service area, or the 
jurisdictional boundaries of a recipient unit of general local 
government, whichever geographic area is most appropriate to the 
proposed action. Actual sites under review must be identified and the 
reasons for the nonselection of those sites as practicable alternatives 
must be described; and
    (2) Under Sec.  55.20(e)(2), measures to minimize the potential 
adverse impacts of the proposed action on the affected floodplain or 
wetland as identified in Sec.  55.20(d) have been applied to the design 
for the proposed action.
    (b) For purposes of compliance with Sec.  55.24, Sec.  55.25, or 
Sec.  55.26 (as appropriate), the responsible HUD official (or the 
Certifying Officer for a responsible entitysubject to 24 CFR part 58) 
who would approve the proposed action shall require documentation of 
compliance with the required conditions.
    (c) Documentation of compliance with this part (including copies of 
public notices) must be attached to the environmental assessment, the 
environmental impact statement or the compliance record and be 
maintained as a part of the project file. In addition, for environmental 
impact statements, documentation of compliance with this part must be 
included as a part of the record of decision (or environmental review 
record for responsible entitiessubject to 24 CFR part 58).

[59 FR 19107, Apr. 21, 1994, as amended at 78 FR 68734, Nov. 15, 2013]



Sec.  55.28  Use of individual permits under section 404 of the Clean
Water Act for HUD Executive Order 11990 processing where all wetlands
are covered by the permit.

    (a) Processing requirements. HUD (or the responsible entity subject 
to 24 CFR part 58) shall not be required to perform the steps at Sec.  
55.20(a) through (e) upon adoption by HUD (or the responsible entity) of 
the terms and conditions of a Section 404 permit so long as:
    (1) The project involves new construction on a property located 
outside of the 100-year floodplain (or the 500-year floodplain for 
critical actions);
    (2) The applicant has submitted, with its application to HUD (or to 
the recipient under programs subject to 24 CFR part 58), an individual 
Section 404 permit (including approval conditions) issued by the U.S. 
Army Corps of Engineers (USACE) (or by a State or Tribal government 
under Section 404(h) of the Clean Water Act) for the proposed project; 
and
    (3) All wetlands adversely affected by the action are covered by the 
permit.
    (b) Unless a project is excluded under Sec.  55.12, processing under 
all of Sec.  55.20 is required for new construction in wetlands that are 
not subject to section 404 of the Clean Water Act and for new 
construction for which the USACE (or a State or Tribal government under 
section 404(h) of the Clean Water Act) issues a general permit under 
Section 404.

[78 FR 68734, Nov. 15, 2013]



PART 58_ENVIRONMENTAL REVIEW PROCEDURES FOR ENTITIES ASSUMING HUD
ENVIRONMENTAL RESPONSIBILITIES--Table of Contents



    Subpart A_Purpose, Legal Authority, Federal Laws and Authorities

Sec.
58.1 Purpose and applicability.
58.2 Terms, abbreviations and definitions.
58.4 Assumption authority.
58.5 Related Federal laws and authorities.
58.6 Other requirements.

   Subpart B_General Policy: Responsibilities of Responsible Entities

58.10 Basic environmental responsibility.
58.11 Legal capacity and performance.
58.12 Technical and administrative capacity.
58.13 Responsibilities of the certifying officer.
58.14 Interaction with State, Federal and non-Federal entities.
58.15 Tiering.

[[Page 385]]

58.17 [Reserved]
58.18 Responsibilities of States assuming HUD environmental 
          responsibilities.

        Subpart C_General Policy: Environmental Review Procedures

58.21 Time periods.
58.22 Limitations on activities pending clearance.
58.23 Financial assistance for environmental review.

    Subpart D_Environmental Review Process: Documentation, Range of 
           Activities, Project Aggregation and Classification

58.30 Environmental review process.
58.32 Project aggregation.
58.33 Emergencies.
58.34 Exempt activities.
58.35 Categorical exclusions.
58.36 Environmental assessments.
58.37 Environmental impact statement determinations.
58.38 Environmental review record.

Subpart E_Environmental Review Process: Environmental Assessments (EA's)

58.40 Preparing the environmental assessment.
58.43 Dissemination and/or publication of the findings of no significant 
          impact.
58.45 Public comment periods.
58.46 Time delays for exceptional circumstances.
58.47 Re-evaluation of environmental assessments and other environmental 
          findings.

 Subpart F_Environmental Review Process: Environmental Impact Statement 
                             Determinations

58.52 Adoption of other agencies' EISs.
58.53 Use of prior environmental impact statements.

Subpart G_Environmental Review Process: Procedures for Draft, Final and 
              Supplemental Environmental Impact Statements

58.55 Notice of intent to prepare an EIS.
58.56 Scoping process.
58.57 Lead agency designation.
58.59 Public hearings and meetings.
58.60 Preparation and filing of environmental impact statements.

           Subpart H_Release of Funds for Particular Projects

58.70 Notice of intent to request release of funds.
58.71 Request for release of funds and certification.
58.72 HUD or State actions on RROFs and certifications.
58.73 Objections to release of funds.
58.74 Time for objecting.
58.75 Permissible bases for objections.
58.76 Procedure for objections.
58.77 Effect of approval of certification.

    Authority: 12 U.S.C. 1707 note, 1715z-13a(k); 25 U.S.C. 4115 and 
4226; 42 U.S.C. 1437x, 3535(d), 3547, 4321-4335, 4852, 5304(g), 12838, 
and 12905(h); title II of Pub. L. 105-276; E.O. 11514 as amended by E.O. 
11991, 3 CFR, 1977 Comp., p. 123.

    Source: 61 FR 19122, Apr. 30, 1996, unless otherwise noted.



    Subpart A_Purpose, Legal Authority, Federal Laws and Authorities



Sec.  58.1  Purpose and applicability.

    (a) Purpose. This part provides instructions and guidance to 
recipients of HUD assistance and other responsible entities for 
conducting an environmental review for a particular project or activity 
and for obtaining approval of a Request for Release of Funds.
    (b) Applicability. This part applies to activities and projects 
where specific statutory authority exists for recipients or other 
responsible entities to assume environmental responsibilities. Programs 
and activities subject to this part include:
    (1) Community Development Block Grant programs authorized by Title I 
of the Housing and Community Development Act of 1974, in accordance with 
section 104(g) (42 U.S.C. 5304(g));
    (2) [Reserved]
    (3)(i) Grants to states and units of general local government under 
the Emergency Shelter Grant Program, Supportive Housing Program (and its 
predecessors, the Supportive Housing Demonstration Program (both 
Transitional Housing and Permanent Housing for Homeless Persons with 
Disabilities) and Supplemental Assistance for Facilities to Assist the 
Homeless), Shelter Plus Care Program, Safe Havens for Homeless 
Individuals Demonstration Program, and Rural Homeless Housing 
Assistance, authorized by Title IV of

[[Page 386]]

the McKinney-Vento Homeless Assistance Act, in accordance with section 
443 (42 U.S.C. 11402);
    (ii) Grants beginning with Fiscal Year 2001 to private non-profit 
organizations and housing agencies under the Supportive Housing Program 
and Shelter Plus Care Program authorized by Title IV of the McKinney-
Vento Homeless Assistance Act, in accordance with section 443 (42 U.S.C. 
11402);
    (4) The HOME Investment Partnerships Program authorized by Title II 
of the Cranston-Gonzalez National Affordable Housing Act (NAHA), in 
accordance with section 288 (42 U.S.C. 12838);
    (5) Grants to States and units of general local government for 
abatement of lead-based paint and lead dust hazards pursuant to Title II 
of the Departments of Veterans Affairs and Housing and Urban Development 
and Independent Agencies Appropriations Act, 1992, and grants for lead-
based paint hazard reduction under section 1011 of the Housing and 
Community Development Act of 1992, in accordance with section 1011(o) 
(42 U.S.C. 4852(o));
    (6)(i) Public Housing Programs under Title I of the United States 
Housing Act of 1937, including HOPE VI grants authorized under section 
24 of the Act for Fiscal Year 2000 and later, in accordance with section 
26 (42 U.S.C. 1437x);
    (ii) Grants for the revitalization of severely distressed public 
housing (HOPE VI) for Fiscal Year 1999 and prior years, in accordance 
with Title II of the Departments of Veterans Affairs and Housing and 
Urban Development, and Independent Agencies Appropriations Act, 1999 
(Pub. L. 105-276, approved October 21, 1998); and
    (iii) Assistance administered by a public housing agency under 
section 8 of the United States Housing Act of 1937, except for 
assistance provided under part 886 of this title, in accordance with 
section 26 (42 U.S.C. 1437x);
    (7) Special Projects appropriated under an appropriation act for 
HUD, such as special projects under the heading ``Annual Contributions 
for Assisted Housing'' in Title II of various Departments of Veterans 
Affairs and Housing and Urban Development, and Independent Agencies 
Appropriations Acts, in accordance with section 305(c) of the 
Multifamily Housing Property Disposition Reform Act of 1994 (42 U.S.C. 
3547);
    (8) The FHA Multifamily Housing Finance Agency Pilot Program under 
section 542(c) of the Housing and Community Development Act of 1992, in 
accordance with section 542(c)(9)(12 U.S.C. 1707 note);
    (9) The Self-Help Homeownership Opportunity Program under section 11 
of the Housing Opportunity Program Extension Act of 1996 (Pub. L. 104-
120, 110 Stat. 834), in accordance with section 11(m));
    (10) Assistance provided under the Native American Housing 
Assistance and Self-Determination Act of 1996 (NAHASDA), in accordance 
with:
    (i) Section 105 for Indian Housing Block Grants and Federal 
Guarantees or Financing for Tribal Housing Authorities (25 U.S.C. 4115 
and 4226); and
    (ii) Section 806 for Native Hawaiian Housing Block Grants (25 U.S.C. 
4226);
    (11) Indian Housing Loan Guarantees authorized by section 184 of the 
Housing and Community Development Act of 1992, in accordance with 
section 184(k) (12 U.S.C. 1715z-13a(k)); and
    (12) Grants for Housing Opportunities for Persons with AIDS (HOPWA) 
under the AIDS Housing Opportunity Act, as follows: competitive grants 
beginning with Fiscal Year 2001 and all formula grants, in accordance 
with section 856(h) (42 U.S.C. 12905(h)); all grants for Fiscal Year 
1999 and prior years, in accordance with section 207(c) of the 
Departments of Veterans Affairs and Housing and Urban Development, and 
Independent Agencies Appropriations Act, 1999 (Pub. L. 105-276, approved 
October 21, 1998).
    (c) When HUD assistance is used to help fund a revolving loan fund 
that is administered by a recipient or another party, the activities 
initially receiving assistance from the fund are subject to the 
requirements in this part. Future activities receiving assistance from 
the revolving loan fund, after the fund has received loan repayments, 
are subject to the environmental review requirements if the rules of the 
HUD program that initially provided assistance to the fund continue to 
treat the activities as subject to the Federal requirements. If the HUD 
program treats the activities as not being subject to any

[[Page 387]]

Federal requirements, then the activities cease to become Federally-
funded activities and the provisions of this part do not apply.
    (d) To the extent permitted by applicable laws and the applicable 
regulations of the Council on Environmental Quality, the Assistant 
Secretary for Community Planning and Development may, for good cause and 
with appropriate conditions, approve waivers and exceptions or establish 
criteria for exceptions from the requirements of this part.

[61 FR 19122, Apr. 30, 1996, as amended at 68 FR 56127, Sept. 29, 2003]



Sec.  58.2  Terms, abbreviations and definitions.

    (a) For the purposes of this part, the following definitions 
supplement the uniform terminology provided in 40 CFR part 1508:
    (1) Activity means an action that a grantee or recipient puts forth 
as part of an assisted project, regardless of whether its cost is to be 
borne by the HUD assistance or is an eligible expense under the HUD 
assistance program.
    (2) Certifying Officer means the official who is authorized to 
execute the Request for Release of Funds and Certification and has the 
legal capacity to carry out the responsibilities of Sec.  58.13.
    (3) Extraordinary Circumstances means a situation in which an 
environmental assessment (EA) or environmental impact statement (EIS) is 
not normally required, but due to unusual conditions, an EA or EIS is 
appropriate. Indicators of unusual conditions are:
    (i) Actions that are unique or without precedent;
    (ii) Actions that are substantially similar to those that normally 
require an EIS;
    (iii) Actions that are likely to alter existing HUD policy or HUD 
mandates; or
    (iv) Actions that, due to unusual physical conditions on the site or 
in the vicinity, have the potential for a significant impact on the 
environment or in which the environment could have a significant impact 
on users of the facility.
    (4) Project means an activity, or a group of integrally related 
activities, designed by the recipient to accomplish, in whole or in 
part, a specific objective.
    (5) Recipient means any of the following entities, when they are 
eligible recipients or grantees under a program listed in Sec.  58.1(b):
    (i) A State that does not distribute HUD assistance under the 
program to a unit of general local government;
    (ii) Guam, the Northern Mariana Islands, the Virgin Islands, 
American Samoa, and Palau;
    (iii) A unit of general local government;
    (iv) An Indian tribe;
    (v) With respect to Public Housing Programs under Sec.  
58.1(b)(6)(i), fiscal year 1999 and prior HOPE VI grants under Sec.  
58.1(b)(6)(ii) or Section 8 assistance under Sec.  58.1(b)(6)(iii), a 
public housing agency;
    (vi) Any direct grantee of HUD for a special project under Sec.  
58.1(b)(7);
    (vii) With respect to the FHA Multifamily Housing Finance Agency 
Program under 58.1(b)(8), a qualified housing finance agency;
    (viii) With respect to the Self-Help Homeownership Opportunity 
Program under Sec.  58.1(b)(9), any direct grantee of HUD.
    (ix)(A) With respect to NAHASDA assistance under Sec.  58.1(b)(10), 
the Indian tribe or the Department of Hawaiian Home Lands; and
    (B) With respect to the Section 184 Indian Housing Loan Guarantee 
program under Sec.  58.1(b)(11), the Indian tribe.
    (x) With respect to the Shelter Plus Care and Supportive Housing 
Programs under Sec.  58.1(b)(3)(ii), nonprofit organizations and other 
entities.
    (6) Release of funds. In the case of the FHA Multifamily Housing 
Finance Agency Program under Sec.  58.1(b)(8), Release of Funds, as used 
in this part, refers to HUD issuance of a firm approval letter, and 
Request for Release of Funds refers to a recipient's request for a firm 
approval letter. In the case of the Section 184 Indian Housing Loan 
Guarantee program under Sec.  58.1(b)(11), Release of Funds refers to 
HUD's issuance of a commitment to guarantee a loan, or if there is no 
commitment, HUD's issuance of a certificate of guarantee.

[[Page 388]]

    (7) Responsible Entity. Responsible Entity means:
    (i) With respect to environmental responsibilities under programs 
listed in Sec.  58.1(b)(1), (2), (3)(i), (4), and (5), a recipient under 
the program.
    (ii) With respect to environmental responsibilities under the 
programs listed in Sec.  58.1(b)(3)(ii) and (6) through (12), a state, 
unit of general local government, Indian tribe or Alaska Native Village, 
or the Department of Hawaiian Home Lands, when it is the recipient under 
the program. Under the Native American Housing Assistance and Self-
Determination Act of 1996 (25 U.S.C. 4101 et seq.) listed in Sec.  
58.1(b)(10)(i), the Indian tribe is the responsible entity whether or 
not a Tribally Designated Housing Entity is authorized to receive grant 
amounts on behalf of the tribe. The Indian tribe is also the responsible 
entity under the Section 184 Indian Housing Loan Guarantee program 
listed in Sec.  58.1(b)(11). Regional Corporations in Alaska are 
considered Indian tribes in this part. Non-recipient responsible 
entities are designated as follows:
    (A) For qualified housing finance agencies, the State or a unit of 
general local government, Indian tribe or Alaska native village whose 
jurisdiction contains the project site;
    (B) For public housing agencies, the unit of general local 
government within which the project is located that exercises land use 
responsibility, or if HUD determines this infeasible, the county, or if 
HUD determines this infeasible, the State;
    (C) For non-profit organizations and other entities, the unit of 
general local government, Indian tribe or Alaska native village within 
which the project is located that exercises land use responsibility, or 
if HUD determines this infeasible, the county, or if HUD determines this 
infeasible, the State;
    (8) Unit Density refers to a change in the number of dwelling units. 
Where a threshold is identified as a percentage change in density that 
triggers review requirements, no distinction is made between an increase 
or a decrease in density.
    (9) Tiering means the evaluation of an action or an activity at 
various points in the development process as a proposal or event becomes 
ripe for an Environment Assessment or Review.
    (10) Vacant Building means a habitable structure that has been 
vacant for more than one year.
    (b) The following abbreviations are used throughout this part:
    (1) CDBG--Community Development Block Grant;
    (2) CEQ--Council on Environmental Quality;
    (3) EA--Environmental Assessment;
    (4) EIS--Environmental Impact Statement;
    (5) EPA--Environmental Protection Agency;
    (6) ERR--Environmental Review Record;
    (7) FONSI--Finding of No Significant Impact;
    (8) HUD--Department of Housing and Urban Development;
    (9) NAHA--Cranston-Gonzalez National Affordable Housing Act of 1990;
    (10) NEPA--National Environmental Policy Act of 1969, as amended;
    (11) NOI/EIS--Notice of Intent to Prepare an EIS;
    (12) NOI/RROF--Notice of Intent to Request Release of Funds;
    (13) ROD--Record of Decision;
    (14) ROF--Release of Funds; and
    (15) RROF--Request for Release of Funds.

[61 FR 19122, Apr. 30, 1996, as amended at 68 FR 56128, Sept. 29, 2003]



Sec.  58.4  Assumption authority.

    (a) Assumption authority for responsible entities: General. 
Responsible entities shall assume the responsibility for environmental 
review, decision-making, and action that would otherwise apply to HUD 
under NEPA and other provisions of law that further the purposes of 
NEPA, as specified in Sec.  58.5. Responsible entities that receive 
assistance directly from HUD assume these responsibilities by execution 
of a grant agreement with HUD and/or a legally binding document such as 
the certification contained on HUD Form 7015.15, certifying to the 
assumption of environmental responsibilities. When a State distributes 
funds to a responsible entity, the State must provide for appropriate 
procedures by which these responsible entities will evidence their

[[Page 389]]

assumption of environmental responsibilities.
    (b) Particular responsibilities of the States. (1) States are 
recipients for purposes of directly undertaking a State project and must 
assume the environmental review responsibilities for the State's 
activities and those of any non-governmental entity that may participate 
in the project. In this case, the State must submit the certification 
and RROF to HUD for approval.
    (2) States must exercise HUD's responsibilities in accordance with 
Sec.  58.18, with respect to approval of a unit of local government's 
environmental certification and RROF for a HUD assisted project funded 
through the state. Approval by the state of a unit of local government's 
certification and RROF satisfies the Secretary's responsibilities under 
NEPA and the related laws cited in Sec.  58.5.
    (c) Particular responsibilities of Indian tribes. An Indian tribe 
may, but is not required to, assume responsibilities for environmental 
review, decision-making and action for programs authorized by the Native 
American Housing Assistance and Self-Determination Act of 1996 (25 
U.S.C. 4101 et seq.) (other than title VIII) or section 184 of the 
Housing and Community Development Act of 1992 (12 U.S.C. 1715z-13a). The 
tribe must make a separate decision regarding assumption of 
responsibilities for each of these Acts and communicate that decision in 
writing to HUD. If the tribe assumes these responsibilities, the 
requirements of this part shall apply. If a tribe formally declines 
assumption of these responsibilities, they are retained by HUD and the 
provisions of part 50 of this title apply.

[61 FR 19122, Apr. 30, 1996, as amended at 68 FR 56128, Sept. 29, 2003]



Sec.  58.5  Related Federal laws and authorities.

    In accordance with the provisions of law cited in Sec.  58.1(b), the 
responsible entity must assume responsibilities for environmental 
review, decision-making and action that would apply to HUD under the 
following specified laws and authorities. The responsible entity must 
certify that it has complied with the requirements that would apply to 
HUD under these laws and authorities and must consider the criteria, 
standards, policies and regulations of these laws and authorities.
    (a) Historic properties. (1) The National Historic Preservation Act 
of 1966 (16 U.S.C. 470 et seq.), particularly sections 106 and 110 (16 
U.S.C. 470 and 470h-2).
    (2) Executive Order 11593, Protection and Enhancement of the 
Cultural Environment, May 13, 1971 (36 FR 8921), 3 CFR 1971-1975 Comp., 
p. 559, particularly section 2(c).
    (3) Federal historic preservation regulations as follows:
    (i) 36 CFR part 800 with respect to HUD programs other than Urban 
Development Action Grants (UDAG); and
    (ii) 36 CFR part 801 with respect to UDAG.
    (4) The Reservoir Salvage Act of 1960 as amended by the 
Archeological and Historic Preservation Act of 1974 (16 U.S.C. 469 et 
seq.), particularly section 3 (16 U.S.C. 469a-1).
    (b) Floodplain management and wetland protection. (1) Executive 
Order 11988, Floodplain Management, May 24, 1977 (42 FR 26951), 3 CFR, 
1977 Comp., p. 117, as interpreted in HUD regulations at 24 CFR part 55, 
particularly section 2(a) of the order (For an explanation of the 
relationship between the decision-making process in 24 CFR part 55 and 
this part, see Sec.  55.10 of this subtitle A.)
    (2) Executive Order 11990, Protection of Wetlands, May 24, 1977 (42 
FR 26961), 3 CFR, 1977 Comp., p. 121, as interpreted in HUD regulations 
at 24 CFR part 55, particularly sections 2 and 5 of the order.
    (c) Coastal Zone Management. The Coastal Zone Management Act of 1972 
(16 U.S.C. 1451 et seq.), as amended, particularly section 307(c) and 
(d) (16 U.S.C. 1456(c) and (d)).
    (d) Sole source aquifers. (1) The Safe Drinking Water Act of 1974 
(42 U.S.C. 201, 300(f) et seq., and 21 U.S.C. 349) as amended; 
particularly section 1424(e)(42 U.S.C. 300h-3(e)).
    (2) Sole Source Aquifers (Environmental Protection Agency--40 CFR 
part 149).
    (e) Endangered species. The Endangered Species Act of 1973 (16 
U.S.C. 1531 et seq.) as amended, particularly section 7 (16 U.S.C. 
1536).

[[Page 390]]

    (f) Wild and scenic rivers. The Wild and Scenic Rivers Act of 1968 
(16 U.S.C. 1271 et seq.) as amended, particularly section 7(b) and (c) 
(16 U.S.C. 1278(b) and (c)).
    (g) Air quality. (1) The Clean Air Act (42 U.S.C. 7401 et. seq.) as 
amended; particularly section 176(c) and (d) (42 U.S.C. 7506(c) and 
(d)).
    (2) Determining Conformity of Federal Actions to State or Federal 
Implementation Plans (Environmental Protection Agency--40 CFR parts 6, 
51, and 93).
    (h) Farmlands protection. (1) Farmland Protection Policy Act of 1981 
(7 U.S.C. 4201 et seq.) particularly sections 1540(b) and 1541 (7 U.S.C. 
4201(b) and 4202).
    (2) Farmland Protection Policy (Department of Agriculture--7 CFR 
part 658).
    (i) HUD environmental standards. (1) Applicable criteria and 
standards specified in part 51 of this title, other than the runway 
clear zone notification requirement in Sec.  51.303(a)(3).
    (2)(i) Also, it is HUD policy that all properties that are being 
proposed for use in HUD programs be free of hazardous materials, 
contamination, toxic chemicals and gases, and radioactive substances, 
where a hazard could affect the health and safety of occupants or 
conflict with the intended utilization of the property.
    (ii) The environmental review of multifamily housing with five or 
more dwelling units (including leasing), or non-residential property, 
must include the evaluation of previous uses of the site or other 
evidence of contamination on or near the site, to ensure that the 
occupants of proposed sites are not adversely affected by any of the 
hazards listed in paragraph (i)(2)(i) of this section.
    (iii) Particular attention should be given to any proposed site on 
or in the general proximity of such areas as dumps, landfills, 
industrial sites, or other locations that contain, or may have 
contained, hazardous wastes.
    (iv) The responsible entity shall use current techniques by 
qualified professionals to undertake investigations determined 
necessary.
    (j) Environmental justice. Executive Order 12898--Federal Actions to 
Address Environmental Justice in Minority Populations and Low-Income 
Populations, February 11, 1994 (59 FR 7629), 3 CFR, 1994 Comp. p. 859.

[61 FR 19122, Apr. 30, 1996, as amended at 68 FR 56128, Sept. 29, 2003; 
78 FR 68734, Nov. 15, 2013]



Sec.  58.6  Other requirements.

    In addition to the duties under the laws and authorities specified 
in Sec.  58.5 for assumption by the responsible entity under the laws 
cited in Sec.  58.1(b), the responsible entity must comply with the 
following requirements. Applicability of the following requirements does 
not trigger the certification and release of funds procedure under this 
part or preclude exemption of an activity under Sec.  58.34(a)(12) and/
or the applicability of Sec.  58.35(b). However, the responsible entity 
remains responsible for addressing the following requirements in its ERR 
and meeting these requirements, where applicable, regardless of whether 
the activity is exempt under Sec.  58.34 or categorically excluded under 
Sec.  58.35(a) or (b).
    (a)(1) Under the Flood Disaster Protection Act of 1973, as amended 
(42 U.S.C. 4001-4128), Federal financial assistance for acquisition and 
construction purposes (including rehabilitation) may not be used in an 
area identified by the Federal Emergency Management Agency (FEMA) as 
having special flood hazards, unless:
    (i) The community in which the area is situated is participating in 
the National Flood Insurance Program (see 44 CFR parts 59 through 79), 
or less than one year has passed since the FEMA notification regarding 
such hazards; and
    (ii) Where the community is participating in the National Flood 
Insurance Program, flood insurance protection is to be obtained as a 
condition of the approval of financial assistance to the property owner.
    (2) Where the community is participating in the National Flood 
Insurance Program and the recipient provides financial assistance for 
acquisition or construction purposes (including rehabilitation) for 
property located in an area identified by FEMA as having special flood 
hazards, the responsible entity is responsible for assuring that flood

[[Page 391]]

insurance under the National Flood Insurance Program is obtained and 
maintained.
    (3) Paragraph (a) of this section does not apply to Federal formula 
grants made to a State.
    (4) Flood insurance requirements cannot be fulfilled by self-
insurance except as authorized by law for assistance to state-owned 
projects within states approved by the Federal Insurance Administrator 
consistent with 44 CFR 75.11.
    (b) Under section 582 of the National Flood Insurance Reform Act of 
1994, 42 U.S.C. 5154a, HUD disaster assistance that is made available in 
a special flood hazard area may not be used to make a payment (including 
any loan assistance payment) to a person for repair, replacement or 
restoration for flood damage to any personal, residential or commercial 
property if:
    (1) The person had previously received Federal flood disaster 
assistance conditioned on obtaining and maintaining flood insurance; and
    (2) The person failed to obtain and maintain flood insurance.
    (c) Pursuant to the Coastal Barrier Resources Act, as amended by the 
Coastal Barrier Improvement Act of 1990 (16 U.S.C. 3501), HUD assistance 
may not be used for most activities proposed in the Coastal Barrier 
Resources System.
    (d) In all cases involving HUD assistance, subsidy, or insurance for 
the purchase or sale of an existing property in a Runway Clear Zone or 
Clear Zone, as defined in 24 CFR part 51, the responsible entity shall 
advise the buyer that the property is in a runway clear zone or clear 
zone, what the implications of such a location are, and that there is a 
possibility that the property may, at a later date, be acquired by the 
airport operator. The buyer must sign a statement acknowledging receipt 
of this information.

[61 FR 19122, Apr. 30, 1996, as amended at 63 FR 15271, Mar. 30, 1998; 
78 FR 68734, Nov. 15, 2013]



   Subpart B_General Policy: Responsibilities of Responsible Entities



Sec.  58.10  Basic environmental responsibility.

    In accordance with the provisions of law cited in Sec.  58.1(b), 
except as otherwise provided in Sec.  58.4(c), the responsible entity 
must assume the environmental responsibilities for projects under 
programs cited in Sec.  58.1(b). In doing so, the responsible entity 
must comply with the provisions of NEPA and the CEQ regulations 
contained in 40 CFR parts 1500 through 1508, including the requirements 
set forth in this part.

[68 FR 56128, Sept. 29, 2003]



Sec.  58.11  Legal capacity and performance.

    (a) A responsible entity which believes that it does not have the 
legal capacity to carry out the environmental responsibilities required 
by this part must contact the appropriate local HUD Office or the State 
for further instructions. Determinations of legal capacity will be made 
on a case-by-case basis.
    (b) If a public housing, special project, HOPWA, Supportive Housing, 
Shelter Plus Care, or Self-Help Homeownership Opportunity recipient that 
is not a responsible entity objects to the non-recipient responsible 
entity conducting the environmental review on the basis of performance, 
timing, or compatibility of objectives, HUD will review the facts to 
determine who will perform the environmental review.
    (c) At any time, HUD may reject the use of a responsible entity to 
conduct the environmental review in a particular case on the basis of 
performance, timing or compatibility of objectives, or in accordance 
with Sec.  58.77(d)(1).
    (d) If a responsible entity, other than a recipient, objects to 
performing an environmental review, or if HUD determines that the 
responsible entity should not perform the environmental review, HUD may 
designate another responsible entity to conduct the review in accordance 
with this part or may

[[Page 392]]

itself conduct the environmental review in accordance with the 
provisions of 24 CFR part 50.

[61 FR 19122, Apr. 30, 1996, as amended at 68 FR 56129, Sept. 29, 2003]



Sec.  58.12  Technical and administrative capacity.

    The responsible entity must develop the technical and administrative 
capability necessary to comply with 40 CFR parts 1500 through 1508 and 
the requirements of this part.



Sec.  58.13  Responsibilities of the certifying officer.

    Under the terms of the certification required by Sec.  58.71, a 
responsible entity's certifying officer is the ``responsible Federal 
official'' as that term is used in section 102 of NEPA and in statutory 
provisions cited in Sec.  58.1(b). The Certifying Officer is therefore 
responsible for all the requirements of section 102 of NEPA and the 
related provisions in 40 CFR parts 1500 through 1508, and 24 CFR part 
58, including the related Federal authorities listed in Sec.  58.5. The 
Certifying Officer must also:
    (a) Represent the responsible entity and be subject to the 
jurisdiction of the Federal courts. The Certifying Officer will not be 
represented by the Department of Justice in court; and
    (b) Ensure that the responsible entity reviews and comments on all 
EISs prepared for Federal projects that may have an impact on the 
recipient's program.



Sec.  58.14  Interaction with State, Federal and non-Federal entities.

    A responsible entity shall consult with appropriate environmental 
agencies, State, Federal and non-Federal entities and the public in the 
preparation of an EIS, EA or other environmental reviews undertaken 
under the related laws and authorities cited in Sec.  58.5 and Sec.  
58.6. The responsible entity must also cooperate with other agencies to 
reduce duplication between NEPA and comparable environmental review 
requirements of the State (see 40 CFR 1506.2 (b) and (c)). The 
responsible entity must prepare its EAs and EISs so that they comply 
with the environmental review requirements of both Federal and State 
laws unless otherwise specified or provided by law. State, Federal and 
local agencies may participate or act in a joint lead or cooperating 
agency capacity in the preparation of joint EISs or joint environmental 
assessments (see 40 CFR 1501.5(b) and 1501.6). A single EIS or EA may be 
prepared and adopted by multiple users to the extent that the review 
addresses the relevant environmental issues and there is a written 
agreement between the cooperating agencies which sets forth the 
coordinated and overall responsibilities.

[63 FR 15271, Mar. 30, 1998]



Sec.  58.15  Tiering.

    Responsible entities may tier their environmental reviews and 
assessments to eliminate repetitive discussions of the same issues at 
subsequent levels of review. Tiering is appropriate when there is a 
requirement to evaluate a policy or proposal in the early stages of 
development or when site-specific analysis or mitigation is not 
currently feasible and a more narrow or focused analysis is better done 
at a later date. The site specific review need only reference or 
summarize the issues addressed in the broader review. The broader review 
should identify and evaluate those issues ripe for decision and exclude 
those issues not relevant to the policy, program or project under 
consideration. The broader review should also establish the policy, 
standard or process to be followed in the site specific review. The 
Finding of No Significant Impact (FONSI) with respect to the broader 
assessment shall include a summary of the assessment and identify the 
significant issues to be considered in site specific reviews. Subsequent 
site-specific reviews will not require notices or a Request for Release 
of Funds unless the Certifying Officer determines that there are 
unanticipated impacts or impacts not adequately addressed in the prior 
review. A tiering approach can be used for meeting environmental review 
requirements in areas designated for special focus in local Consolidated 
Plans. Local and State Governments are encouraged to use the 
Consolidated Plan process to facilitate environmental reviews.

[[Page 393]]



Sec.  58.17  [Reserved]



Sec.  58.18  Responsibilities of States assuming HUD environmental
responsibilities.

    States that elect to administer a HUD program shall ensure that the 
program complies with the provisions of this part. The state must:
    (a) Designate the state agency or agencies that will be responsible 
for carrying out the requirements and administrative responsibilities 
set forth in subpart H of this part and which will:
    (1) Develop a monitoring and enforcement program for post-review 
actions on environmental reviews and monitor compliance with any 
environmental conditions included in the award.
    (2) Receive public notices, RROFs, and certifications from 
recipients pursuant to Sec. Sec.  58.70 and 58.71; accept objections 
from the public and from other agencies (Sec.  58.73); and perform other 
related responsibilities regarding releases of funds.
    (b) Fulfill the state role in subpart H relative to the time period 
set for the receipt and disposition of comments, objections and appeals 
(if any) on particular projects.

[68 FR 56129, Sept. 29, 2003]



        Subpart C_General Policy: Environmental Review Procedures



Sec.  58.21  Time periods.

    All time periods in this part shall be counted in calendar days. The 
first day of a time period begins at 12:01 a.m. local time on the day 
following the publication or the mailing and posting date of the notice 
which initiates the time period.



Sec.  58.22  Limitations on activities pending clearance.

    (a) Neither a recipient nor any participant in the development 
process, including public or private nonprofit or for-profit entities, 
or any of their contractors, may commit HUD assistance under a program 
listed in Sec.  58.1(b) on an activity or project until HUD or the state 
has approved the recipient's RROF and the related certification from the 
responsible entity. In addition, until the RROF and the related 
certification have been approved, neither a recipient nor any 
participant in the development process may commit non-HUD funds on or 
undertake an activity or project under a program listed in Sec.  58.1(b) 
if the activity or project would have an adverse environmental impact or 
limit the choice of reasonable alternatives.
    (b) If a project or activity is exempt under Sec.  58.34, or is 
categorically excluded (except in extraordinary circumstances) under 
Sec.  58.35(b), no RROF is required and the recipient may undertake the 
activity immediately after the responsible entity has documented its 
determination as required in Sec.  58.34(b) and Sec.  58.35(d), but the 
recipient must comply with applicable requirements under Sec.  58.6.
    (c) If a recipient is considering an application from a prospective 
subrecipient or beneficiary and is aware that the prospective 
subrecipient or beneficiary is about to take an action within the 
jurisdiction of the recipient that is prohibited by paragraph (a) of 
this section, then the recipient will take appropriate action to ensure 
that the objectives and procedures of NEPA are achieved.
    (d) An option agreement on a proposed site or property is allowable 
prior to the completion of the environmental review if the option 
agreement is subject to a determination by the recipient on the 
desirability of the property for the project as a result of the 
completion of the environmental review in accordance with this part and 
the cost of the option is a nominal portion of the purchase price. There 
is no constraint on the purchase of an option by third parties that have 
not been selected for HUD funding, have no responsibility for the 
environmental review and have no say in the approval or disapproval of 
the project.
    (e) Self-Help Homeownership Opportunity Program (SHOP). In 
accordance with section 11(d)(2)(A) of the Housing Opportunity Program 
Extension Act of 1996 (42 U.S.C. 12805 note), an organization, 
consortium, or affiliate receiving assistance under the SHOP program may 
advance nongrant funds to acquire

[[Page 394]]

land prior to completion of an environmental review and approval of a 
Request for Release of Funds (RROF) and certification, notwithstanding 
paragraph (a) of this section. Any advances to acquire land prior to 
approval of the RROF and certification are made at the risk of the 
organization, consortium, or affiliate and reimbursement for such 
advances may depend on the result of the environmental review. This 
authorization is limited to the SHOP program only and all other forms of 
HUD assistance are subject to the limitations in paragraph (a) of this 
section.
    (f) Relocation. Funds may be committed for relocation assistance 
before the approval of the RROF and related certification for the 
project provided that the relocation assistance is required by 24 CFR 
part 42.

[68 FR 56129, Sept. 29, 2003]



Sec.  58.23  Financial assistance for environmental review.

    The costs of environmental reviews, including costs incurred in 
complying with any of the related laws and authorities cited in Sec.  
58.5 and Sec.  58.6, are eligible costs to the extent allowable under 
the HUD assistance program regulations.



    Subpart D_Environmental Review Process: Documentation, Range of 
           Activities, Project Aggregation and Classification



Sec.  58.30  Environmental review process.

    (a) The environmental review process consists of all the actions 
that a responsible entity must take to determine compliance with this 
part. The environmental review process includes all the compliance 
actions needed for other activities and projects that are not assisted 
by HUD but are aggregated by the responsible entity in accordance with 
Sec.  58.32.
    (b) The environmental review process should begin as soon as a 
recipient determines the projected use of HUD assistance.



Sec.  58.32  Project aggregation.

    (a) A responsible entity must group together and evaluate as a 
single project all individual activities which are related either on a 
geographical or functional basis, or are logical parts of a composite of 
contemplated actions.
    (b) In deciding the most appropriate basis for aggregation when 
evaluating activities under more than one program, the responsible 
entity may choose: functional aggregation when a specific type of 
activity (e.g., water improvements) is to take place in several separate 
locales or jurisdictions; geographic aggregation when a mix of 
dissimilar but related activities is to be concentrated in a fairly 
specific project area (e.g., a combination of water, sewer and street 
improvements and economic development activities); or a combination of 
aggregation approaches, which, for various project locations, considers 
the impacts arising from each functional activity and its 
interrelationship with other activities.
    (c) The purpose of project aggregation is to group together related 
activities so that the responsible entity can:
    (1) Address adequately and analyze, in a single environmental 
review, the separate and combined impacts of activities that are 
similar, connected and closely related, or that are dependent upon other 
activities and actions. (See 40 CFR 1508.25(a)).
    (2) Consider reasonable alternative courses of action.
    (3) Schedule the activities to resolve conflicts or mitigate the 
individual, combined and/or cumulative effects.
    (4) Prescribe mitigation measures and safeguards including project 
alternatives and modifications to individual activities.
    (d) Multi-year project aggregation--(1) Release of funds. When a 
recipient's planning and program development provide for activities to 
be implemented over two or more years, the responsible entity's 
environmental review should consider the relationship among all 
component activities of the multi-year project regardless of the source 
of funds and address and evaluate their cumulative environmental 
effects. The estimated range of the aggregated activities and the 
estimated cost of the total project must be listed

[[Page 395]]

and described by the responsible entity in the environmental review and 
included in the RROF. The release of funds will cover the entire project 
period.
    (2) When one or more of the conditions described in Sec.  58.47 
exists, the recipient or other responsible entity must re-evaluate the 
environmental review.



Sec.  58.33  Emergencies.

    (a) In the cases of emergency, disaster or imminent threat to health 
and safety which warrant the taking of an action with significant 
environmental impact, the provisions of 40 CFR 1506.11 shall apply.
    (b) If funds are needed on an emergency basis and adherence to 
separate comment periods would prevent the giving of assistance during a 
Presidentially declared disaster, or during a local emergency that has 
been declared by the chief elected official of the responsible entity 
who has proclaimed that there is an immediate need for public action to 
protect the public safety, the combined Notice of FONSI and Notice of 
Intent to Request Release of Funds (NOI/RROF) may be disseminated and/or 
published simultaneously with the submission of the RROF. The combined 
Notice of FONSI and NOI/RROF shall state that the funds are needed on an 
emergency basis due to a declared disaster and that the comment periods 
have been combined. The Notice shall also invite commenters to submit 
their comments to both HUD and the responsible entity issuing the notice 
to ensure that these comments will receive full consideration.

[61 FR 19122, Apr. 30, 1996, as amended at 68 FR 56129, Sept. 29, 2003]



Sec.  58.34  Exempt activities.

    (a) Except for the applicable requirements of Sec.  58.6, the 
responsible entity does not have to comply with the requirements of this 
part or undertake any environmental review, consultation or other action 
under NEPA and the other provisions of law or authorities cited in Sec.  
58.5 for the activities exempt by this section or projects consisting 
solely of the following exempt activities:
    (1) Environmental and other studies, resource identification and the 
development of plans and strategies;
    (2) Information and financial services;
    (3) Administrative and management activities;
    (4) Public services that will not have a physical impact or result 
in any physical changes, including but not limited to services concerned 
with employment, crime prevention, child care, health, drug abuse, 
education, counseling, energy conservation and welfare or recreational 
needs;
    (5) Inspections and testing of properties for hazards or defects;
    (6) Purchase of insurance;
    (7) Purchase of tools;
    (8) Engineering or design costs;
    (9) Technical assistance and training;
    (10) Assistance for temporary or permanent improvements that do not 
alter environmental conditions and are limited to protection, repair, or 
restoration activities necessary only to control or arrest the effects 
from disasters or imminent threats to public safety including those 
resulting from physical deterioration;
    (11) Payment of principal and interest on loans made or obligations 
guaranteed by HUD;
    (12) Any of the categorical exclusions listed in Sec.  58.35(a) 
provided that there are no circumstances which require compliance with 
any other Federal laws and authorities cited in Sec.  58.5.
    (b) A recipient does not have to submit an RROF and certification, 
and no further approval from HUD or the State will be needed by the 
recipient for the drawdown of funds to carry out exempt activities and 
projects. However, the responsible entity must document in writing its 
determination that each activity or project is exempt and meets the 
conditions specified for such exemption under this section.

[61 FR 19122, Apr. 30, 1996, as amended at 63 FR 15271, Mar. 30, 1998]



Sec.  58.35  Categorical exclusions.

    Categorical exclusion refers to a category of activities for which 
no environmental impact statement or environmental assessment and 
finding of no significant impact under NEPA is

[[Page 396]]

required, except in extraordinary circumstances (see Sec.  58.2(a)(3)) 
in which a normally excluded activity may have a significant impact. 
Compliance with the other applicable Federal environmental laws and 
authorities listed in Sec.  58.5 is required for any categorical 
exclusion listed in paragraph (a) of this section.
    (a) Categorical exclusions subject to Sec.  58.5. The following 
activities are categorically excluded under NEPA, but may be subject to 
review under authorities listed in Sec.  58.5:
    (1) Acquisition, repair, improvement, reconstruction, or 
rehabilitation of public facilities and improvements (other than 
buildings) when the facilities and improvements are in place and will be 
retained in the same use without change in size or capacity of more than 
20 percent (e.g., replacement of water or sewer lines, reconstruction of 
curbs and sidewalks, repaving of streets).
    (2) Special projects directed to the removal of material and 
architectural barriers that restrict the mobility of and accessibility 
to elderly and handicapped persons.
    (3) Rehabilitation of buildings and improvements when the following 
conditions are met:
    (i) In the case of a building for residential use (with one to four 
units), the density is not increased beyond four units, and the land use 
is not changed;
    (ii) In the case of multifamily residential buildings:
    (A) Unit density is not changed more than 20 percent;
    (B) The project does not involve changes in land use from 
residential to non-residential; and
    (C) The estimated cost of rehabilitation is less than 75 percent of 
the total estimated cost of replacement after rehabilitation.
    (iii) In the case of non-residential structures, including 
commercial, industrial, and public buildings:
    (A) The facilities and improvements are in place and will not be 
changed in size or capacity by more than 20 percent; and
    (B) The activity does not involve a change in land use, such as from 
non-residential to residential, commercial to industrial, or from one 
industrial use to another.
    (4)(i) An individual action on up to four dwelling units where there 
is a maximum of four units on any one site. The units can be four one-
unit buildings or one four-unit building or any combination in between; 
or
    (ii) An individual action on a project of five or more housing units 
developed on scattered sites when the sites are more than 2,000 feet 
apart and there are not more than four housing units on any one site.
    (iii) Paragraphs (a)(4)(i) and (ii) of this section do not apply to 
rehabilitation of a building for residential use (with one to four 
units) (see paragraph (a)(3)(i) of this section).
    (5) Acquisition (including leasing) or disposition of, or equity 
loans on an existing structure, or acquisition (including leasing) of 
vacant land provided that the structure or land acquired, financed, or 
disposed of will be retained for the same use.
    (6) Combinations of the above activities.
    (b) Categorical exclusions not subject to Sec.  58.5. The Department 
has determined that the following categorically excluded activities 
would not alter any conditions that would require a review or compliance 
determination under the Federal laws and authorities cited in Sec.  
58.5. When the following kinds of activities are undertaken, the 
responsible entity does not have to publish a NOI/RROF or execute a 
certification and the recipient does not have to submit a RROF to HUD 
(or the State) except in the circumstances described in paragraph (c) of 
this section. Following the award of the assistance, no further approval 
from HUD or the State will be needed with respect to environmental 
requirements, except where paragraph (c) of this section applies. The 
recipient remains responsible for carrying out any applicable 
requirements under Sec.  58.6.
    (1) Tenant-based rental assistance;
    (2) Supportive services including, but not limited to, health care, 
housing services, permanent housing placement, day care, nutritional 
services, short-term payments for rent/mortgage/utility costs, and 
assistance in

[[Page 397]]

gaining access to local, State, and Federal government benefits and 
services;
    (3) Operating costs including maintenance, security, operation, 
utilities, furnishings, equipment, supplies, staff training and 
recruitment and other incidental costs;
    (4) Economic development activities, including but not limited to, 
equipment purchase, inventory financing, interest subsidy, operating 
expenses and similar costs not associated with construction or expansion 
of existing operations;
    (5) Activities to assist homebuyers to purchase existing dwelling 
units or dwelling units under construction, including closing costs and 
down payment assistance, interest buydowns, and similar activities that 
result in the transfer of title.
    (6) Affordable housing pre-development costs including legal, 
consulting, developer and other costs related to obtaining site options, 
project financing, administrative costs and fees for loan commitments, 
zoning approvals, and other related activities which do not have a 
physical impact.
    (7) Approval of supplemental assistance (including insurance or 
guarantee) to a project previously approved under this part, if the 
approval is made by the same responsible entity that conducted the 
environmental review on the original project and re-evaluation of the 
environmental findings is not required under Sec.  58.47.
    (c) Circumstances requiring NEPA review. If a responsible entity 
determines that an activity or project identified in paragraph (a) or 
(b) of this section, because of extraordinary circumstances and 
conditions at or affecting the location of the activity or project, may 
have a significant environmental effect, it shall comply with all the 
requirements of this part.
    (d) The Environmental Review Record (ERR) must contain a well 
organized written record of the process and determinations made under 
this section.

[61 FR 19122, Apr. 30, 1996, as amended at 63 FR 15272, Mar. 30, 1998; 
68 FR 56129, Sept. 29, 2003; 78 FR 68734, Nov. 15, 2013]



Sec.  58.36  Environmental assessments.

    If a project is not exempt or categorically excluded under 
Sec. Sec.  58.34 and 58.35, the responsible entity must prepare an EA in 
accordance with subpart E of this part. If it is evident without 
preparing an EA that an EIS is required under Sec.  58.37, the 
responsible entity should proceed directly to an EIS.



Sec.  58.37  Environmental impact statement determinations.

    (a) An EIS is required when the project is determined to have a 
potentially significant impact on the human environment.
    (b) An EIS is required under any of the following circumstances, 
except as provided in paragraph (c) of this section:
    (1) The project would provide a site or sites for, or result in the 
construction of, hospitals or nursing homes containing a total of 2,500 
or more beds.
    (2) The project would remove, demolish, convert or substantially 
rehabilitate 2,500 or more existing housing units (but not including 
rehabilitation projects categorically excluded under Sec.  58.35), or 
would result in the construction or installation of 2,500 or more 
housing units, or would provide sites for 2,500 or more housing units.
    (3) The project would provide enough additional water and sewer 
capacity to support 2,500 or more additional housing units. The project 
does not have to be specifically intended for residential use nor does 
it have to be totally new construction. If the project is designed to 
provide upgraded service to existing development as well as to serve new 
development, only that portion of the increased capacity which is 
intended to serve new development should be counted.
    (c) If, on the basis of an EA, a responsible entity determines that 
the thresholds in paragraph (b) of this section are the sole reason for 
the EIS, the responsible entity may prepare a FONSI pursuant to 40 CFR 
1501.4. In such cases, the FONSI must be made available for public 
review for at least 30 days before the responsible entity makes the 
final determination whether to prepare an EIS.

[[Page 398]]

    (d) Notwithstanding paragraphs (a) through (c) of this section, an 
EIS is not required where Sec.  58.53 is applicable.
    (e) Recommended EIS Format. The responsible entity must use the EIS 
format recommended by the CEQ regulations (40 CFR 1502.10) unless a 
determination is made on a particular project that there is a compelling 
reason to do otherwise. In such a case, the EIS format must meet the 
minimum requirements prescribed in 40 CFR 1502.10.



Sec.  58.38  Environmental review record.

    The responsible entity must maintain a written record of the 
environmental review undertaken under this part for each project. This 
document will be designated the ``Environmental Review Record'' (ERR) 
and shall be available for public review. The Departmental Environmental 
Clearance Officer (DECO) shall establish a prescribed format that the 
responsible entity shall use to prepare the ERR. The DECO may prescribe 
alternative formats as necessary to meet specific program needs.
    (a) ERR Documents. The ERR shall contain all the environmental 
review documents, public notices and written determinations or 
environmental findings required by this part as evidence of review, 
decisionmaking and actions pertaining to a particular project of a 
recipient. The document shall:
    (1) Describe the project and the activities that the recipient has 
determined to be part of the project;
    (2) Evaluate the effects of the project or the activities on the 
human environment;
    (3) Document compliance with applicable statutes and authorities, in 
particular those cited in Sec.  58.5 and 58.6; and
    (4) Record the written determinations and other review findings 
required by this part (e.g., exempt and categorically excluded projects 
determinations, findings of no significant impact).
    (b) Other documents and information. The ERR shall also contain 
verifiable source documents and relevant base data used or cited in EAs, 
EISs or other project review documents. These documents may be 
incorporated by reference into the ERR provided that each source 
document is identified and available for inspection by interested 
parties. Proprietary material and special studies prepared for the 
recipient that are not otherwise generally available for public review 
shall not be incorporated by reference but shall be included in the ERR.

[61 FR 19122, Apr. 30, 1996, as amended at 79 FR 49229, Aug. 20, 2014]



Subpart E_Environmental Review Process: Environmental Assessments (EA's)



Sec.  58.40  Preparing the environmental assessment.

    The DECO shall establish a prescribed format that the responsible 
entity shall use to prepare the EA. The DECO may prescribe alternative 
formats as necessary to meet specific program needs. In preparing an EA 
for a particular proposed project or other action, the responsible 
entity must:
    (a) Determine existing conditions and describe the character, 
features and resources of the project area and its surroundings; 
identify the trends that are likely to continue in the absence of the 
project.
    (b) Identify all potential environmental impacts, whether beneficial 
or adverse, and the conditions that would change as a result of the 
project.
    (c) Identify, analyze and evaluate all impacts to determine the 
significance of their effects on the human environment and whether the 
project will require further compliance under related laws and 
authorities cited in Sec.  58.5 and Sec.  58.6.
    (d) Examine and recommend feasible ways in which the project or 
external factors relating to the project could be modified in order to 
eliminate or minimize adverse environmental impacts.
    (e) Discuss the need for the proposal, appropriate alternatives 
where the proposal involves unresolved conflicts concerning alternative 
uses of available resources, the environmental impacts of the proposed 
action and alternatives, and a listing of agencies and persons 
consulted.
    (f) Complete all environmental review requirements necessary for the

[[Page 399]]

project's compliance with applicable authorities cited in Sec. Sec.  
58.5 and 58.6.
    (g) Based on steps set forth in paragraph (a) through (f) of this 
section, make one of the following findings:
    (1) A Finding of No Significant Impact (FONSI), in which the 
responsible entity determines that the project is not an action that 
will result in a significant impact on the quality of the human 
environment. The responsible entity may then proceed to Sec.  58.43.
    (2) A finding of significant impact, in which the project is deemed 
to be an action which may significantly affect the quality of the human 
environment. The responsible entity must then proceed with its 
environmental review under subpart F or G of this part.

[61 FR 19122, Apr. 30, 1996, as amended at 79 FR 49229, Aug. 20, 2014]



Sec.  58.43  Dissemination and/or publication of the findings of no
significant impact.

    (a) If the responsible entity makes a finding of no significant 
impact, it must prepare a FONSI notice, using the current HUD-
recommended format or an equivalent format. As a minimum, the 
responsible entity must send the FONSI notice to individuals and groups 
known to be interested in the activities, to the local news media, to 
the appropriate tribal, local, State and Federal agencies; to the 
Regional Offices of the Environmental Protection Agency having 
jurisdiction and to the HUD Field Office (or the State where 
applicable). The responsible entity may also publish the FONSI notice in 
a newspaper of general circulation in the affected community. If the 
notice is not published, it must also be prominently displayed in public 
buildings, such as the local Post Office and within the project area or 
in accordance with procedures established as part of the citizen 
participation process.
    (b) The responsible entity may disseminate or publish a FONSI notice 
at the same time it disseminates or publishes the NOI/RROF required by 
Sec.  58.70. If the notices are released as a combined notice, the 
combined notice shall:
    (1) Clearly indicate that it is intended to meet two separate 
procedural requirements; and
    (2) Advise the public to specify in their comments which ``notice'' 
their comments address.
    (c) The responsible entity must consider the comments and make 
modifications, if appropriate, in response to the comments, before it 
completes its environmental certification and before the recipient 
submits its RROF. If funds will be used in Presidentially declared 
disaster areas, modifications resulting from public comment, if 
appropriate, must be made before proceeding with the expenditure of 
funds.



Sec.  58.45  Public comment periods.

    Required notices must afford the public the following minimum 
comment periods, counted in accordance with Sec.  58.21:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
(a) Notice of Finding of No Significant     15 days when published or,
 Impact (FONSI).                             if no publication, 18 days
                                             when mailing and posting
(b) Notice of Intent to Request Release of  7 days when published or, if
 Funds (NOI-RROF).                           no publication, 10 days
                                             when mailing and posting
(c) Concurrent or combined notices........  15 days when published or,
                                             if no publication, 18 days
                                             when mailing and posting
------------------------------------------------------------------------


[68 FR 56130, Sept. 29, 2003]



Sec.  58.46  Time delays for exceptional circumstances.

    The responsible entity must make the FONSI available for public 
comments for 30 days before the recipient files the RROF when:
    (a) There is a considerable interest or controversy concerning the 
project;
    (b) The proposed project is similar to other projects that normally 
require the preparation of an EIS; or
    (c) The project is unique and without precedent.



Sec.  58.47  Re-evaluation of environmental assessments and other
environmental findings.

    (a) A responsible entity must re-evaluate its environmental findings 
to determine if the original findings are still valid, when:
    (1) The recipient proposes substantial changes in the nature, 
magnitude or extent of the project, including adding new activities not 
anticipated in the original scope of the project;
    (2) There are new circumstances and environmental conditions which 
may

[[Page 400]]

affect the project or have a bearing on its impact, such as concealed or 
unexpected conditions discovered during the implementation of the 
project or activity which is proposed to be continued; or
    (3) The recipient proposes the selection of an alternative not in 
the original finding.
    (b)(1) If the original findings are still valid but the data or 
conditions upon which they were based have changed, the responsible 
entity must affirm the original findings and update its ERR by including 
this re-evaluation and its determination based on its findings. Under 
these circumstances, if a FONSI notice has already been published, no 
further publication of a FONSI notice is required.
    (2) If the responsible entity determines that the original findings 
are no longer valid, it must prepare an EA or an EIS if its evaluation 
indicates potentially significant impacts.
    (3) Where the recipient is not the responsible entity, the recipient 
must inform the responsible entity promptly of any proposed substantial 
changes under paragraph (a)(1) of this section, new circumstances or 
environmental conditions under paragraph (a)(2) of this section, or any 
proposals to select a different alternative under paragraph (a)(3) of 
this section, and must then permit the responsible entity to re-evaluate 
the findings before proceeding.

[61 FR 19122, Apr. 30, 1996, as amended at 63 FR 15272, Mar. 30, 1998]



 Subpart F_Environmental Review Process: Environmental Impact Statement 
                             Determinations



Sec.  58.52  Adoption of other agencies' EISs.

    The responsible entity may adopt a draft or final EIS prepared by 
another agency provided that the EIS was prepared in accordance with 40 
CFR parts 1500 through 1508. If the responsible entity adopts an EIS 
prepared by another agency, the procedure in 40 CFR 1506.3 shall be 
followed. An adopted EIS may have to be revised and modified to adapt it 
to the particular environmental conditions and circumstances of the 
project if these are different from the project reviewed in the EIS. In 
such cases the responsible entity must prepare, circulate, and file a 
supplemental draft EIS in the manner prescribed in Sec.  58.60(d) and 
otherwise comply with the clearance and time requirements of the EIS 
process, except that scoping requirements under 40 CFR 1501.7 shall not 
apply. The agency that prepared the original EIS should be informed that 
the responsible entity intends to amend and adopt the EIS. The 
responsible entity may adopt an EIS when it acts as a cooperating agency 
in its preparation under 40 CFR 1506.3. The responsible entity is not 
required to re-circulate or file the EIS, but must complete the 
clearance process for the RROF. The decision to adopt an EIS shall be 
made a part of the project ERR.



Sec.  58.53  Use of prior environmental impact statements.

    Where any final EIS has been listed in the Federal Register for a 
project pursuant to this part, or where an areawide or similar broad 
scale final EIS has been issued and the EIS anticipated a subsequent 
project requiring an environmental clearance, then no new EIS is 
required for the subsequent project if all the following conditions are 
met:
    (a) The ERR contains a decision based on a finding pursuant to Sec.  
58.40 that the proposed project is not a new major Federal action 
significantly affecting the quality of the human environment. The 
decision shall include:
    (1) References to the prior EIS and its evaluation of the 
environmental factors affecting the proposed subsequent action subject 
to NEPA;
    (2) An evaluation of any environmental factors which may not have 
been previously assessed, or which may have significantly changed;
    (3) An analysis showing that the proposed project is consistent with 
the location, use, and density assumptions for the site and with the 
timing and capacity of the circulation, utility, and other supporting 
infrastructure assumptions in the prior EIS;

[[Page 401]]

    (4) Documentation showing that where the previous EIS called for 
mitigating measures or other corrective action, these are completed to 
the extent reasonable given the current state of development.
    (b) The prior final EIS has been filed within five (5) years, and 
updated as follows:
    (1) The EIS has been updated to reflect any significant revisions 
made to the assumptions under which the original EIS was prepared;
    (2) The EIS has been updated to reflect new environmental issues and 
data or legislation and implementing regulations which may have 
significant environmental impact on the project area covered by the 
prior EIS.
    (c) There is no litigation pending in connection with the prior EIS, 
and no final judicial finding of inadequacy of the prior EIS has been 
made.



Subpart G_Environmental Review Process: Procedures for Draft, Final and 
              Supplemental Environmental Impact Statements



Sec.  58.55  Notice of intent to prepare an EIS.

    As soon as practicable after the responsible entity decides to 
prepare an EIS, it must publish a NOI/EIS, using the HUD recommended 
format and disseminate it in the same manner as required by 40 CFR parts 
1500 through 1508.



Sec.  58.56  Scoping process.

    The determination on whether or not to hold a scoping meeting will 
depend on the same circumstances and factors as for the holding of 
public hearings under Sec.  58.59. The responsible entity must wait at 
least 15 days after disseminating or publishing the NOI/EIS before 
holding a scoping meeting.



Sec.  58.57  Lead agency designation.

    If there are several agencies ready to assume the lead role, the 
responsible entity must make its decision based on the criteria in 40 
CFR 1501.5(c). If the responsible entity and a Federal agency are unable 
to reach agreement, then the responsible entity must notify HUD (or the 
State, where applicable). HUD (or the State) will assist in obtaining a 
determination based on the procedure set forth in 40 CFR 1501.5(e).



Sec.  58.59  Public hearings and meetings.

    (a) Factors to consider. In determining whether or not to hold 
public hearings in accordance with 40 CFR 1506.6, the responsible entity 
must consider the following factors:
    (1) The magnitude of the project in terms of economic costs, the 
geographic area involved, and the uniqueness or size of commitment of 
resources involved.
    (2) The degree of interest in or controversy concerning the project.
    (3) The complexity of the issues and the likelihood that information 
will be presented at the hearing which will be of assistance to the 
responsible entity.
    (4) The extent to which public involvement has been achieved through 
other means.
    (b) Procedure. All public hearings must be preceded by a notice of 
public hearing, which must be published in the local news media 15 days 
before the hearing date. The Notice must:
    (1) State the date, time, place, and purpose of the hearing or 
meeting.
    (2) Describe the project, its estimated costs, and the project area.
    (3) State that persons desiring to be heard on environmental issues 
will be afforded the opportunity to be heard.
    (4) State the responsible entity's name and address and the name and 
address of its Certifying Officer.
    (5) State what documents are available, where they can be obtained, 
and any charges that may apply.



Sec.  58.60  Preparation and filing of environmental impact statements.

    (a) The responsible entity must prepare the draft environmental 
impact statement (DEIS) and the final environmental impact statements 
(FEIS) using the current HUD recommended format or its equivalent.
    (b) The responsible entity must file and distribute the (DEIS) and 
the (FEIS) in the following manner:
    (1) Five copies to EPA Headquarters;
    (2) Five copies to EPA Regional Office;

[[Page 402]]

    (3) Copies made available in the responsible entity's and the 
recipient's office;
    (4) Copies or summaries made available to persons who request them; 
and
    (5) FEIS only--one copy to State, HUD Field Office, and HUD 
Headquarters library.
    (c) The responsible entity may request waivers from the time 
requirements specified for the draft and final EIS as prescribed in 40 
CFR 1506.6.
    (d) When substantial changes are proposed in a project or when 
significant new circumstances or information becomes available during an 
environmental review, the recipient may prepare a supplemental EIS as 
prescribed in 40 CFR 1502.9.
    (e) The responsible entity must prepare a Record of Decision (ROD) 
as prescribed in 40 CFR 1505.2.

[61 FR 19122, Apr. 30, 1996, as amended at 63 FR 15272, Mar. 30, 1998]



           Subpart H_Release of Funds for Particular Projects



Sec.  58.70  Notice of intent to request release of funds.

    The NOI/RROF must be disseminated and/or published in the manner 
prescribed by Sec.  58.43 and Sec.  58.45 before the certification is 
signed by the responsible entity.



Sec.  58.71  Request for release of funds and certification.

    (a) The RROF and certification shall be sent to the appropriate HUD 
Field Office (or the State, if applicable), except as provided in 
paragraph (b) of this section. This request shall be executed by the 
Certifying Officer. The request shall describe the specific project and 
activities covered by the request and contain the certification required 
under the applicable statute cited in Sec.  58.1(b). The RROF and 
certification must be in a form specified by HUD.
    (b) When the responsible entity is conducting an environmental 
review on behalf of a recipient, as provided for in Sec.  58.10, the 
recipient must provide the responsible entity with all available project 
and environmental information and refrain from undertaking any physical 
activities or choice limiting actions until HUD (or the State, if 
applicable) has approved its request for release of funds. The 
certification form executed by the responsible entity's certifying 
officer shall be sent to the recipient that is to receive the assistance 
along with a description of any special environmental conditions that 
must be adhered to in carrying out the project. The recipient is to 
submit the RROF and the certification of the responsible entity to HUD 
(or the State, if applicable) requesting the release of funds. The 
recipient must agree to abide by the special conditions, procedures and 
requirements of the environmental review, and to advise the responsible 
entity of any proposed change in the scope of the project or any change 
in environmental conditions.
    (c) If the responsible entity determines that some of the activities 
are exempt under applicable provisions of this part, the responsible 
entity shall advise the recipient that it may commit funds for these 
activities as soon as programmatic authorization is received. This 
finding shall be documented in the ERR maintained by the responsible 
entity and in the recipient's project files.



Sec.  58.72  HUD or State actions on RROFs and certifications.

    The actions which HUD (or a State) may take with respect to a 
recipient's environmental certification and RROF are as follows:
    (a) In the absence of any receipt of objection to the contrary, 
except as provided in paragraph (b) of this section, HUD (or the State) 
will assume the validity of the certification and RROF and will approve 
these documents after expiration of the 15-day period prescribed by 
statute.
    (b) HUD (or the state) may disapprove a certification and RROF if it 
has knowledge that the responsible entity or other participants in the 
development process have not complied with the items in Sec.  58.75, or 
that the RROF and certification are inaccurate.
    (c) In cases in which HUD has approved a certification and RROF but 
subsequently learns (e.g., through monitoring) that the recipient 
violated Sec.  58.22 or the recipient or responsible entity otherwise 
failed to comply with

[[Page 403]]

a clearly applicable environmental authority, HUD shall impose 
appropriate remedies and sanctions in accord with the law and 
regulations for the program under which the violation was found.

[61 FR 19122, Apr. 30, 1996, as amended at 68 FR 56130, Sept. 29, 2003]



Sec.  58.73  Objections to release of funds.

    HUD (or the State) will not approve the ROF for any project before 
15 calendar days have elapsed from the time of receipt of the RROF and 
the certification or from the time specified in the notice published 
pursuant to Sec.  58.70, whichever is later. Any person or agency may 
object to a recipient's RROF and the related certification. However, the 
objections must meet the conditions and procedures set forth in subpart 
H of this part. HUD (or the State) can refuse the RROF and certification 
on any grounds set forth in Sec.  58.75. All decisions by HUD (or the 
State) regarding the RROF and the certification shall be final.



Sec.  58.74  Time for objecting.

    All objections must be received by HUD (or the State) within 15 days 
from the time HUD (or the State) receives the recipient's RROF and the 
related certification, or within the time period specified in the 
notice, whichever is later.



Sec.  58.75  Permissible bases for objections.

    HUD (or the State), will consider objections claiming a responsible 
entity's noncompliance with this part based only on any of the following 
grounds:
    (a) The certification was not in fact executed by the responsible 
entity's Certifying Officer.
    (b) The responsible entity has failed to make one of the two 
findings pursuant to Sec.  58.40 or to make the written determination 
required by Sec. Sec.  58.35, 58.47 or 58.53 for the project, as 
applicable.
    (c) The responsible entity has omitted one or more of the steps set 
forth at subpart E of this part for the preparation, publication and 
completion of an EA.
    (d) The responsible entity has omitted one or more of the steps set 
forth at subparts F and G of this part for the conduct, preparation, 
publication and completion of an EIS.
    (e) The recipient or other participants in the development process 
have committed funds, incurred costs or undertaken activities not 
authorized by this part before release of funds and approval of the 
environmental certification by HUD (or the state).
    (f) Another Federal agency acting pursuant to 40 CFR part 1504 has 
submitted a written finding that the project is unsatisfactory from the 
standpoint of environmental quality.

[61 FR 19122, Apr. 30, 1996, as amended at 68 FR 56130, Sept. 29, 2003]



Sec.  58.76  Procedure for objections.

    A person or agency objecting to a responsible entity's RROF and 
certification shall submit objections in writing to HUD (or the State). 
The objections shall:
    (a) Include the name, address and telephone number of the person or 
agency submitting the objection, and be signed by the person or 
authorized official of an agency.
    (b) Be dated when signed.
    (c) Describe the basis for objection and the facts or legal 
authority supporting the objection.
    (d) State when a copy of the objection was mailed or delivered to 
the responsible entity's Certifying Officer.



Sec.  58.77  Effect of approval of certification.

    (a) Responsibilities of HUD and States. HUD's (or, where applicable, 
the State's) approval of the certification shall be deemed to satisfy 
the responsibilities of the Secretary under NEPA and related provisions 
of law cited at Sec.  58.5 insofar as those responsibilities relate to 
the release of funds as authorized by the applicable provisions of law 
cited in Sec.  58.1(b).
    (b) Public and agency redress. Persons and agencies seeking redress 
in relation to environmental reviews covered by an approved 
certification shall deal with the responsible entity and not with HUD. 
It is HUD's policy to refer all inquiries and complaints to the 
responsible entity and its Certifying Officer. Similarly, the State 
(where applicable) may direct persons and agencies

[[Page 404]]

seeking redress in relation to environmental reviews covered by an 
approved certification to deal with the responsible entity, and not the 
State, and may refer inquiries and complaints to the responsible entity 
and its Certifying Officer. Remedies for noncompliance are set forth in 
program regulations.
    (c) Implementation of environmental review decisions. Projects of a 
recipient will require post-review monitoring and other inspection and 
enforcement actions by the recipient and the State or HUD (using 
procedures provided for in program regulations) to assure that decisions 
adopted through the environmental review process are carried out during 
project development and implementation.
    (d) Responsibility for monitoring and training. (1) At least once 
every three years, HUD intends to conduct in-depth monitoring and 
exercise quality control (through training and consultation) over the 
environmental activities performed by responsible entities under this 
part. Limited monitoring of these environmental activities will be 
conducted during each program monitoring site visit. If through limited 
or in-depth monitoring of these environmental activities or by other 
means, HUD becomes aware of any environmental deficiencies, HUD may take 
one or more of the following actions:
    (i) In the case of problems found during limited monitoring, HUD may 
schedule in-depth monitoring at an earlier date or may schedule in-depth 
monitoring more frequently;
    (ii) HUD may require attendance by staff of the responsible entity 
at HUD-sponsored or approved training, which will be provided 
periodically at various locations around the country;
    (iii) HUD may refuse to accept the certifications of environmental 
compliance on subsequent grants;
    (iv) HUD may suspend or terminate the responsible entity's 
assumption of the environmental review responsibility;
    (v) HUD may initiate sanctions, corrective actions, or other 
remedies specified in program regulations or agreements or contracts 
with the recipient.
    (2) HUD's responsibilities and action under paragraph (d)(1) of this 
section shall not be construed to limit or reduce any responsibility 
assumed by a responsible entity with respect to any particular release 
of funds under this part. Whether or not HUD takes action under 
paragraph (d)(1) of this section, the Certifying Officer remains the 
responsible Federal official under Sec.  58.13 with respect to projects 
and activities for which the Certifying Officer has submitted a 
certification under this part.



PART 60_PROTECTION OF HUMAN SUBJECTS (Eff. until 1-19-18)--Table of Contents



    Authority: 5 U.S.C. 301; 42 U.S.C. 300v-1(b) and 3535(d).

    Source: 61 FR 36463, July 10, 1996, unless otherwise noted.

    Effective Date Note: At 82 FR 7271, Jan. 19, 2017, part 60 was 
revised, effective Jan. 19, 2018. For the convenience of the user, the 
new part 60 follows the text of this part.



Sec.  60.101  Cross-reference.

    The provisions set forth at 45 CFR part 46, subpart A, concerning 
the protection of human research subjects, apply to all research 
conducted, supported, or otherwise subject to regulation by HUD.

    Effective Date Note: At 82 FR 7271, Jan. 19, 2017, part 60 was 
revised, effective Jan. 19, 2018. For the convenience of the user, the 
revised text is set forth as follows:



PART 60_PROTECTION OF HUMAN SUBJECTS (Eff. 1-19-18)

Sec.
60.101 To what does this policy apply?
60.102 Definitions for purposes of this policy.
60.103 Assuring compliance with this policy--research conducted or 
          supported by any Federal department or agency.
60.104 Exempt research.
60.105 [Reserved]
60.106 [Reserved]
60.107 IRB membership.
60.108 IRB functions and operations.
60.109 IRB review of research.
60.110 Expedited review procedures for certain kinds of research 
          involving no more than minimal risk, and for minor changes in 
          approved research.
60.111 Criteria for IRB approval of research.
60.112 Review by institution.
60.113 Suspension or termination of IRB approval of research.

[[Page 405]]

60.114 Cooperative research.
60.115 IRB records.
60.116 General requirements for informed consent.
60.117 Documentation of informed consent.
60.118 Applications and proposals lacking definite plans for involvement 
          of human subjects.
60.119 Research undertaken without the intention of involving human 
          subjects.
60.120 Evaluation and disposition of applications and proposals for 
          research to be conducted or supported by a Federal department 
          or agency.
60.121 [Reserved]
60.122 Use of Federal funds.
60.123 Early termination of research support: Evaluation of applications 
          and proposals.
60.124 Conditions.

    Authority: 5 U.S.C. 301; 42 U.S.C. 300v-1(b) and 3535(d).



Sec.  60.101  To what does this policy apply?

    (a) Except as detailed in Sec.  60.104, this policy applies to all 
research involving human subjects conducted, supported, or otherwise 
subject to regulation by any Federal department or agency that takes 
appropriate administrative action to make the policy applicable to such 
research. This includes research conducted by Federal civilian employees 
or military personnel, except that each department or agency head may 
adopt such procedural modifications as may be appropriate from an 
administrative standpoint. It also includes research conducted, 
supported, or otherwise subject to regulation by the Federal Government 
outside the United States. Institutions that are engaged in research 
described in this paragraph and institutional review boards (IRBs) 
reviewing research that is subject to this policy must comply with this 
policy.
    (b) [Reserved]
    (c) Department or agency heads retain final judgment as to whether a 
particular activity is covered by this policy and this judgment shall be 
exercised consistent with the ethical principles of the Belmont 
Report.\62\
---------------------------------------------------------------------------

    \62\ The National Commission for the Protection of Human Subjects of 
Biomedical and Behavioral Research.- Belmont Report. Washington, DC: 
U.S. Department of Health and Human Services. 1979.
---------------------------------------------------------------------------

    (d) Department or agency heads may require that specific research 
activities or classes of research activities conducted, supported, or 
otherwise subject to regulation by the Federal department or agency but 
not otherwise covered by this policy comply with some or all of the 
requirements of this policy.
    (e) Compliance with this policy requires compliance with pertinent 
federal laws or regulations that provide additional protections for 
human subjects.
    (f) This policy does not affect any state or local laws or 
regulations (including tribal law passed by the official governing body 
of an American Indian or Alaska Native tribe) that may otherwise be 
applicable and that provide additional protections for human subjects.
    (g) This policy does not affect any foreign laws or regulations that 
may otherwise be applicable and that provide additional protections to 
human subjects of research.
    (h) When research covered by this policy takes place in foreign 
countries, procedures normally followed in the foreign countries to 
protect human subjects may differ from those set forth in this policy. 
In these circumstances, if a department or agency head determines that 
the procedures prescribed by the institution afford protections that are 
at least equivalent to those provided in this policy, the department or 
agency head may approve the substitution of the foreign procedures in 
lieu of the procedural requirements provided in this policy. Except when 
otherwise required by statute, Executive Order, or the department or 
agency head, notices of these actions as they occur will be published in 
the Federal Register or will be otherwise published as provided in 
department or agency procedures.
    (i) Unless otherwise required by law, department or agency heads may 
waive the applicability of some or all of the provisions of this policy 
to specific research activities or classes of research activities 
otherwise covered by this policy, provided the alternative procedures to 
be followed are consistent with the principles of the Belmont 
Report.\63\ Except when otherwise required by statute or Executive 
Order, the department or agency head shall forward advance notices of 
these actions to the Office for Human Research Protections, Department 
of Health and Human Services (HHS), or any successor office, or to the 
equivalent office within the appropriate Federal department or agency, 
and shall also publish them in the Federal Register or in such other 
manner as provided in department or agency procedures. The waiver notice 
must include a statement that identifies the conditions under which the 
waiver will be applied and a justification as to why the waiver is 
appropriate for the research, including how the decision is consistent 
with the principles of the Belmont Report.
---------------------------------------------------------------------------

    \63\ Id.
---------------------------------------------------------------------------

    (j) Federal guidance on the requirements of this policy shall be 
issued only after consultation, for the purpose of harmonization (to the 
extent appropriate), with other Federal departments and agencies that 
have

[[Page 406]]

adopted this policy, unless such consultation is not feasible.
    (k) [Reserved]
    (l) Compliance dates and transition provisions:
    (1) For purposes of this section, the pre-2018 Requirements means 
this subpart as published in the 2016 edition of the Code of Federal 
Regulations.
    (2) For purposes of this section, the 2018 Requirements means the 
Federal Policy for the Protection of Human Subjects requirements 
contained in this subpart. The compliance date for Sec.  60.114(b) 
(cooperative research) of the 2018 Requirements is January 20, 2020.
    (3) Research initially approved by an IRB, for which such review was 
waived pursuant to Sec.  60.101(i), or for which a determination was 
made that the research was exempt before January 19, 2018, shall comply 
with the pre-2018 Requirements, except that an institution engaged in 
such research on or after January 19, 2018, may instead comply with the 
2018 Requirements if the institution determines that such ongoing 
research will comply with the 2018 Requirements and an IRB documents 
such determination.
    (4) Research initially approved by an IRB, for which such review was 
waived pursuant to Sec.  60.101(i), or for which a determination was 
made that the research was exempt on or after January 19, 2018, shall 
comply with the 2018 Requirements.
    (m) Severability: Any provision of this part held to be invalid or 
unenforceable by its terms, or as applied to any person or circumstance, 
shall be construed so as to continue to give maximum effect to the 
provision permitted by law, unless such holding shall be one of utter 
invalidity or unenforceability, in which event the provision shall be 
severable from this part and shall not affect the remainder thereof or 
the application of the provision to other persons not similarly situated 
or to other dissimilar circumstances.



Sec.  60.102  Definitions for purposes of this policy.

    (a) Certification means the official notification by the institution 
to the supporting Federal department or agency component, in accordance 
with the requirements of this policy, that a research project or 
activity involving human subjects has been reviewed and approved by an 
IRB in accordance with an approved assurance.
    (b) Clinical trial means a research study in which one or more human 
subjects are prospectively assigned to one or more interventions (which 
may include placebo or other control) to evaluate the effects of the 
interventions on biomedical or behavioral health-related outcomes.
    (c) Department or agency head means the head of any Federal 
department or agency, for example, the Secretary of HHS, and any other 
officer or employee of any Federal department or agency to whom the 
authority provided by these regulations to the department or agency head 
has been delegated.
    (d) Federal department or agency refers to a federal department or 
agency (the department or agency itself rather than its bureaus, offices 
or divisions) that takes appropriate administrative action to make this 
policy applicable to the research involving human subjects it conducts, 
supports, or otherwise regulates (e.g., the U.S. Department of Health 
and Human Services, the U.S. Department of Defense, or the Central 
Intelligence Agency).
    (e)(1) Human subject means a living individual about whom an 
investigator (whether professional or student) conducting research:
    (i) Obtains information or biospecimens through intervention or 
interaction with the individual, and uses, studies, or analyzes the 
information or biospecimens; or (ii) Obtains, uses, studies, analyzes, 
or generates identifiable private information or identifiable 
biospecimens.
    (2) Intervention includes both physical procedures by which 
information or biospecimens are gathered (e.g., venipuncture) and 
manipulations of the subject or the subject's environment that are 
performed for research purposes.
    (3) Interaction includes communication or interpersonal contact 
between investigator and subject.
    (4) Private information includes information about behavior that 
occurs in a context in which an individual can reasonably expect that no 
observation or recording is taking place, and information that has been 
provided for specific purposes by an individual and that the individual 
can reasonably expect will not be made public (e.g., a medical record).
    (5) Identifiable private information is private information for 
which the identity of the subject is or may readily be ascertained by 
the investigator or associated with the information.
    (6) An identifiable biospecimen is a biospecimen for which the 
identity of the subject is or may readily be ascertained by the 
investigator or associated with the biospecimen.
    (7) Federal departments or agencies implementing this policy shall:
    (i) Upon consultation with appropriate experts (including experts in 
data matching and re-identification), reexamine the meaning of 
``identifiable private information,'' as defined in paragraph (e)(5) of 
this section, and ``identifiable biospecimen,'' as defined in paragraph 
(e)(6) of this section. This reexamination shall take place within 1 
year and regularly thereafter (at least every 4 years). This process 
will be conducted by collaboration among the Federal departments and 
agencies implementing this policy. If appropriate and permitted by law, 
such Federal

[[Page 407]]

departments and agencies may alter the interpretation of these terms, 
including through the use of guidance.
    (ii) Upon consultation with appropriate experts, assess whether 
there are analytic technologies or techniques that should be considered 
by investigators to generate ``identifiable private information,'' as 
defined in paragraph (e)(5) of this section, or an ``identifiable 
biospecimen,'' as defined in paragraph (e)(6) of this section. This 
assessment shall take place within 1 year and regularly thereafter (at 
least every 4 years). This process will be conducted by collaboration 
among the Federal departments and agencies implementing this policy. Any 
such technologies or techniques will be included on a list of 
technologies or techniques that produce identifiable private information 
or identifiable biospecimens. This list will be published in the Federal 
Register after notice and an opportunity for public comment. The 
Secretary, HHS, shall maintain the list on a publicly accessible Web 
site.
    (f) Institution means any public or private entity, or department or 
agency (including federal, state, and other agencies).
    (g) IRB means an institutional review board established in accord 
with and for the purposes expressed in this policy.
    (h) IRB approval means the determination of the IRB that the 
research has been reviewed and may be conducted at an institution within 
the constraints set forth by the IRB and by other institutional and 
federal requirements.
    (i) Legally authorized representative means an individual or 
judicial or other body authorized under applicable law to consent on 
behalf of a prospective subject to the subject's participation in the 
procedure(s) involved in the research. If there is no applicable law 
addressing this issue, legally authorized representative means an 
individual recognized by institutional policy as acceptable for 
providing consent in the nonresearch context on behalf of the 
prospective subject to the subject's participation in the procedure(s) 
involved in the research.
    (j) Minimal risk means that the probability and magnitude of harm or 
discomfort anticipated in the research are not greater in and of 
themselves than those ordinarily encountered in daily life or during the 
performance of routine physical or psychological examinations or tests.
    (k) Public health authority means an agency or authority of the 
United States, a state, a territory, a political subdivision of a state 
or territory, an Indian tribe, or a foreign government, or a person or 
entity acting under a grant of authority from or contract with such 
public agency, including the employees or agents of such public agency 
or its contractors or persons or entities to whom it has granted 
authority, that is responsible for public health matters as part of its 
official mandate.
    (l) Research means a systematic investigation, including research 
development, testing, and evaluation, designed to develop or contribute 
to generalizable knowledge. Activities that meet this definition 
constitute research for purposes of this policy, whether or not they are 
conducted or supported under a program that is considered research for 
other purposes. For example, some demonstration and service programs may 
include research activities. For purposes of this part, the following 
activities are deemed not to be research:
    (1) Scholarly and journalistic activities (e.g., oral history, 
journalism, biography, literary criticism, legal research, and 
historical scholarship), including the collection and use of 
information, that focus directly on the specific individuals about whom 
the information is collected.
    (2) Public health surveillance activities, including the collection 
and testing of information or biospecimens, conducted, supported, 
requested, ordered, required, or authorized by a public health 
authority. Such activities are limited to those necessary to allow a 
public health authority to identify, monitor, assess, or investigate 
potential public health signals, onsets of disease outbreaks, or 
conditions of public health importance (including trends, signals, risk 
factors, patterns in diseases, or increases in injuries from using 
consumer products). Such activities include those associated with 
providing timely situational awareness and priority setting during the 
course of an event or crisis that threatens public health (including 
natural or man-made disasters).
    (3) Collection and analysis of information, biospecimens, or records 
by or for a criminal justice agency for activities authorized by law or 
court order solely for criminal justice or criminal investigative 
purposes.
    (4) Authorized operational activities (as determined by each agency) 
in support of intelligence, homeland security, defense, or other 
national security missions.
    (m) Written, or in writing, for purposes of this part, refers to 
writing on a tangible medium (e.g., paper) or in an electronic format.



Sec.  60.103  Assuring compliance with this policy--research conducted 
          or supported by any Federal department or agency.

    (a) Each institution engaged in research that is covered by this 
policy, with the exception of research eligible for exemption under 
Sec.  60.104, and that is conducted or supported by a Federal department 
or agency, shall provide written assurance satisfactory to the 
department or agency head that it will comply with the requirements of 
this policy. In lieu of requiring submission of an assurance, individual 
department or agency heads shall accept the existence of a current

[[Page 408]]

assurance, appropriate for the research in question, on file with the 
Office for Human Research Protections, HHS, or any successor office, and 
approved for Federal-wide use by that office. When the existence of an 
HHS-approved assurance is accepted in lieu of requiring submission of an 
assurance, reports (except certification) required by this policy to be 
made to department and agency heads shall also be made to the Office for 
Human Research Protections, HHS, or any successor office. Federal 
departments and agencies will conduct or support research covered by 
this policy only if the institution has provided an assurance that it 
will comply with the requirements of this policy, as provided in this 
section, and only if the institution has certified to the department or 
agency head that the research has been reviewed and approved by an IRB 
(if such certification is required by Sec.  60.103(d)).
    (b) The assurance shall be executed by an individual authorized to 
act for the institution and to assume on behalf of the institution the 
obligations imposed by this policy and shall be filed in such form and 
manner as the department or agency head prescribes.
    (c) The department or agency head may limit the period during which 
any assurance shall remain effective or otherwise condition or restrict 
the assurance.
    (d) Certification is required when the research is supported by a 
Federal department or agency and not otherwise waived under Sec.  
60.101(i) or exempted under Sec.  60.104. For such research, 
institutions shall certify that each proposed research study covered by 
the assurance and this section has been reviewed and approved by the 
IRB. Such certification must be submitted as prescribed by the Federal 
department or agency component supporting the research. Under no 
condition shall research covered by this section be initiated prior to 
receipt of the certification that the research has been reviewed and 
approved by the IRB.
    (e) For nonexempt research involving human subjects covered by this 
policy (or exempt research for which limited IRB review takes place 
pursuant to Sec.  60.104(d)(2)(iii), (d)(3)(i)(C), or (d)(7) or (8)) 
that takes place at an institution in which IRB oversight is conducted 
by an IRB that is not operated by the institution, the institution and 
the organization operating the IRB shall document the institution's 
reliance on the IRB for oversight of the research and the 
responsibilities that each entity will undertake to ensure compliance 
with the requirements of this policy (e.g., in a written agreement 
between the institution and the IRB, by implementation of an 
institution-wide policy directive providing the allocation of 
responsibilities between the institution and an IRB that is not 
affiliated with the institution, or as set forth in a research 
protocol).

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec.  60.104  Exempt research.

    (a) Unless otherwise required by law or by department or agency 
heads, research activities in which the only involvement of human 
subjects will be in one or more of the categories in paragraph (d) of 
this section are exempt from the requirements of this policy, except 
that such activities must comply with the requirements of this section 
and as specified in each category.
    (b) Use of the exemption categories for research subject to the 
requirements of subparts B, C, and D: Application of the exemption 
categories to research subject to the requirements of 45 CFR part 46, 
subparts B, C, and D, is as follows:
    (1) Subpart B. Each of the exemptions at this section may be applied 
to research subject to subpart B if the conditions of the exemption are 
met.
    (2) Subpart C. The exemptions at this section do not apply to 
research subject to subpart C, except for research aimed at involving a 
broader subject population that only incidentally includes prisoners.
    (3) Subpart D. The exemptions at paragraphs (d)(1), (4), (5), (6), 
(7), and (8) of this section may be applied to research subject to 
subpart D if the conditions of the exemption are met. Paragraphs 
(d)(2)(i) and (ii) of this section only may apply to research subject to 
subpart D involving educational tests or the observation of public 
behavior when the investigator(s) do not participate in the activities 
being observed. Paragraph (d)(2)(iii) of this section may not be applied 
to research subject to subpart D.
    (c) [Reserved]
    (d) Except as described in paragraph (a) of this section, the 
following categories of human subjects research are exempt from this 
policy:
    (1) Research, conducted in established or commonly accepted 
educational settings, that specifically involves normal educational 
practices that are not likely to adversely impact students' opportunity 
to learn required educational content or the assessment of educators who 
provide instruction. This includes most research on regular and special 
education instructional strategies, and research on the effectiveness of 
or the comparison among instructional techniques, curricula, or 
classroom management methods.
    (2) Research that only includes interactions involving educational 
tests (cognitive, diagnostic, aptitude, achievement), survey procedures, 
interview procedures, or observation of public behavior (including 
visual or auditory recording) if at least one of the following criteria 
is met:
    (i) The information obtained is recorded by the investigator in such 
a manner that the

[[Page 409]]

identity of the human subjects cannot readily be ascertained, directly 
or through identifiers linked to the subjects;
    (ii) Any disclosure of the human subjects' responses outside the 
research would not reasonably place the subjects at risk of criminal or 
civil liability or be damaging to the subjects' financial standing, 
employability, educational advancement, or reputation; or
    (iii) The information obtained is recorded by the investigator in 
such a manner that the identity of the human subjects can readily be 
ascertained, directly or through identifiers linked to the subjects, and 
an IRB conducts a limited IRB review to make the determination required 
by Sec.  60.111(a)(7).
    (3)(i) Research involving benign behavioral interventions in 
conjunction with the collection of information from an adult subject 
through verbal or written responses (including data entry) or 
audiovisual recording if the subject prospectively agrees to the 
intervention and information collection and at least one of the 
following criteria is met:
    (A) The information obtained is recorded by the investigator in such 
a manner that the identity of the human subjects cannot readily be 
ascertained, directly or through identifiers linked to the subjects;
    (B) Any disclosure of the human subjects' responses outside the 
research would not reasonably place the subjects at risk of criminal or 
civil liability or be damaging to the subjects' financial standing, 
employability, educational advancement, or reputation; or
    (C) The information obtained is recorded by the investigator in such 
a manner that the identity of the human subjects can readily be 
ascertained, directly or through identifiers linked to the subjects, and 
an IRB conducts a limited IRB review to make the determination required 
by Sec.  60.111(a)(7).
    (ii) For the purpose of this provision, benign behavioral 
interventions are brief in duration, harmless, painless, not physically 
invasive, not likely to have a significant adverse lasting impact on the 
subjects, and the investigator has no reason to think the subjects will 
find the interventions offensive or embarrassing. Provided all such 
criteria are met, examples of such benign behavioral interventions would 
include having the subjects play an online game, having them solve 
puzzles under various noise conditions, or having them decide how to 
allocate a nominal amount of received cash between themselves and 
someone else.
    (iii) If the research involves deceiving the subjects regarding the 
nature or purposes of the research, this exemption is not applicable 
unless the subject authorizes the deception through a prospective 
agreement to participate in research in circumstances in which the 
subject is informed that he or she will be unaware of or misled 
regarding the nature or purposes of the research.
    (4) Secondary research for which consent is not required: Secondary 
research uses of identifiable private information or identifiable 
biospecimens, if at least one of the following criteria is met:
    (i) The identifiable private information or identifiable 
biospecimens are publicly available;
    (ii) Information, which may include information about biospecimens, 
is recorded by the investigator in such a manner that the identity of 
the human subjects cannot readily be ascertained directly or through 
identifiers linked to the subjects, the investigator does not contact 
the subjects, and the investigator will not re-identify subjects;
    (iii) The research involves only information collection and analysis 
involving the investigator's use of identifiable health information when 
that use is regulated under 45 CFR parts 160 and 164, subparts A and E, 
for the purposes of ``health care operations'' or ``research'' as those 
terms are defined at 45 CFR 164.501 or for ``public health activities 
and purposes'' as described under 45 CFR 164.512(b); or
    (iv) The research is conducted by, or on behalf of, a Federal 
department or agency using government-generated or government-collected 
information obtained for nonresearch activities, if the research 
generates identifiable private information that is or will be maintained 
on information technology that is subject to and in compliance with 
section 208(b) of the E-Government Act of 2002, 44 U.S.C. 3501 note, if 
all of the identifiable private information collected, used, or 
generated as part of the activity will be maintained in systems of 
records subject to the Privacy Act of 1974, 5 U.S.C. 552a, and, if 
applicable, the information used in the research was collected subject 
to the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq.
    (5) Research and demonstration projects that are conducted or 
supported by a Federal department or agency, or otherwise subject to the 
approval of department or agency heads (or the approval of the heads of 
bureaus or other subordinate agencies that have been delegated authority 
to conduct the research and demonstration projects), and that are 
designed to study, evaluate, improve, or otherwise examine public 
benefit or service programs, including procedures for obtaining benefits 
or services under those programs, possible changes in or alternatives to 
those programs or procedures, or possible changes in methods or levels 
of payment for benefits or services under those programs. Such projects 
include, but are not limited to, internal studies by Federal employees, 
and studies under contracts or consulting arrangements, cooperative 
agreements, or grants. Exempt projects also include waivers

[[Page 410]]

of otherwise mandatory requirements using authorities such as sections 
1115 and 1115A of the Social Security Act, as amended.
    (i) Each Federal department or agency conducting or supporting the 
research and demonstration projects must establish, on a publicly 
accessible Federal Web site or in such other manner as the department or 
agency head may determine, a list of the research and demonstration 
projects that the Federal department or agency conducts or supports 
under this provision. The research or demonstration project must be 
published on this list prior to commencing the research involving human 
subjects.
    (ii) [Reserved]
    (6) Taste and food quality evaluation and consumer acceptance 
studies:
    (i) If wholesome foods without additives are consumed, or
    (ii) If a food is consumed that contains a food ingredient at or 
below the level and for a use found to be safe, or agricultural chemical 
or environmental contaminant at or below the level found to be safe, by 
the Food and Drug Administration or approved by the Environmental 
Protection Agency or the Food Safety and Inspection Service of the U.S. 
Department of Agriculture.
    (7) Storage or maintenance for secondary research for which broad 
consent is required: Storage or maintenance of identifiable private 
information or identifiable biospecimens for potential secondary 
research use if an IRB conducts a limited IRB review and makes the 
determinations required by Sec.  60.111(a)(8).
    (8) Secondary research for which broad consent is required: Research 
involving the use of identifiable private information or identifiable 
biospecimens for secondary research use, if the following criteria are 
met:
    (i) Broad consent for the storage, maintenance, and secondary 
research use of the identifiable private information or identifiable 
biospecimens was obtained in accordance with Sec.  60.116(a)(1) through 
(4), (a)(6), and (d);
    (ii) Documentation of informed consent or waiver of documentation of 
consent was obtained in accordance with Sec.  60.117;
    (iii) An IRB conducts a limited IRB review and makes the 
determination required by Sec.  60.111(a)(7) and makes the determination 
that the research to be conducted is within the scope of the broad 
consent referenced in paragraph (d)(8)(i) of this section; and (iv) The 
investigator does not include returning individual research results to 
subjects as part of the study plan. This provision does not prevent an 
investigator from abiding by any legal requirements to return individual 
research results.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec.  60.105  [Reserved]



Sec.  60.106  [Reserved]



Sec.  60.107  IRB membership.

    (a) Each IRB shall have at least five members, with varying 
backgrounds to promote complete and adequate review of research 
activities commonly conducted by the institution. The IRB shall be 
sufficiently qualified through the experience and expertise of its 
members (professional competence), and the diversity of its members, 
including race, gender, and cultural backgrounds and sensitivity to such 
issues as community attitudes, to promote respect for its advice and 
counsel in safeguarding the rights and welfare of human subjects. The 
IRB shall be able to ascertain the acceptability of proposed research in 
terms of institutional commitments (including policies and resources) 
and regulations, applicable law, and standards of professional conduct 
and practice. The IRB shall therefore include persons knowledgeable in 
these areas. If an IRB regularly reviews research that involves a 
category of subjects that is vulnerable to coercion or undue influence, 
such as children, prisoners, individuals with impaired decision-making 
capacity, or economically or educationally disadvantaged persons, 
consideration shall be given to the inclusion of one or more individuals 
who are knowledgeable about and experienced in working with these 
categories of subjects.
    (b) Each IRB shall include at least one member whose primary 
concerns are in scientific areas and at least one member whose primary 
concerns are in nonscientific areas.
    (c) Each IRB shall include at least one member who is not otherwise 
affiliated with the institution and who is not part of the immediate 
family of a person who is affiliated with the institution.
    (d) No IRB may have a member participate in the IRB's initial or 
continuing review of any project in which the member has a conflicting 
interest, except to provide information requested by the IRB.
    (e) An IRB may, in its discretion, invite individuals with 
competence in special areas to assist in the review of issues that 
require expertise beyond or in addition to that available on the IRB. 
These individuals may not vote with the IRB.



Sec.  60.108  IRB functions and operations.

    (a) In order to fulfill the requirements of this policy each IRB 
shall:
    (1) Have access to meeting space and sufficient staff to support the 
IRB's review and recordkeeping duties;
    (2) Prepare and maintain a current list of the IRB members 
identified by name; earned degrees; representative capacity; indications 
of experience such as board certifications or licenses sufficient to 
describe each member's

[[Page 411]]

chief anticipated contributions to IRB deliberations; and any employment 
or other relationship between each member and the institution, for 
example, full-time employee, part-time employee, member of governing 
panel or board, stockholder, paid or unpaid consultant;
    (3) Establish and follow written procedures for:
    (i) Conducting its initial and continuing review of research and for 
reporting its findings and actions to the investigator and the 
institution;
    (ii) Determining which projects require review more often than 
annually and which projects need verification from sources other than 
the investigators that no material changes have occurred since previous 
IRB review; and
    (iii) Ensuring prompt reporting to the IRB of proposed changes in a 
research activity, and for ensuring that investigators will conduct the 
research activity in accordance with the terms of the IRB approval until 
any proposed changes have been reviewed and approved by the IRB, except 
when necessary to eliminate apparent immediate hazards to the subject.
    (4) Establish and follow written procedures for ensuring prompt 
reporting to the IRB; appropriate institutional officials; the 
department or agency head; and the Office for Human Research 
Protections, HHS, or any successor office, or the equivalent office 
within the appropriate Federal department or agency of
    (i) Any unanticipated problems involving risks to subjects or others 
or any serious or continuing noncompliance with this policy or the 
requirements or determinations of the IRB; and
    (ii) Any suspension or termination of IRB approval.
    (b) Except when an expedited review procedure is used (as described 
in Sec.  60.110), an IRB must review proposed research at convened 
meetings at which a majority of the members of the IRB are present, 
including at least one member whose primary concerns are in 
nonscientific areas. In order for the research to be approved, it shall 
receive the approval of a majority of those members present at the 
meeting.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec.  60.109  IRB review of research.

    (a) An IRB shall review and have authority to approve, require 
modifications in (to secure approval), or disapprove all research 
activities covered by this policy, including exempt research activities 
under Sec.  60.104 for which limited IRB review is a condition of 
exemption (under Sec.  60.104(d)(2)(iii), (d)(3)(i)(C), and (d)(7), and 
(8)).
    (b) An IRB shall require that information given to subjects (or 
legally authorized representatives, when appropriate) as part of 
informed consent is in accordance with Sec.  60.116. The IRB may require 
that information, in addition to that specifically mentioned in Sec.  
60.116, be given to the subjects when in the IRB's judgment the 
information would meaningfully add to the protection of the rights and 
welfare of subjects.
    (c) An IRB shall require documentation of informed consent or may 
waive documentation in accordance with Sec.  60.117.
    (d) An IRB shall notify investigators and the institution in writing 
of its decision to approve or disapprove the proposed research activity, 
or of modifications required to secure IRB approval of the research 
activity. If the IRB decides to disapprove a research activity, it shall 
include in its written notification a statement of the reasons for its 
decision and give the investigator an opportunity to respond in person 
or in writing.
    (e) An IRB shall conduct continuing review of research requiring 
review by the convened IRB at intervals appropriate to the degree of 
risk, not less than once per year, except as described in Sec.  
60.109(f).
    (f)(1) Unless an IRB determines otherwise, continuing review of 
research is not required in the following circumstances:
    (i) Research eligible for expedited review in accordance with Sec.  
60.110;
    (ii) Research reviewed by the IRB in accordance with the limited IRB 
review described in Sec.  60.104(d)(2)(iii), (d)(3)(i)(C), or (d)(7) or 
(8);
    (iii) Research that has progressed to the point that it involves 
only one or both of the following, which are part of the IRB-approved 
study:
    (A) Data analysis, including analysis of identifiable private 
information or identifiable biospecimens, or
    (B) Accessing follow-up clinical data from procedures that subjects 
would undergo as part of clinical care.
    (2) [Reserved.]
    (g) An IRB shall have authority to observe or have a third party 
observe the consent process and the research.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec.  60.110  Expedited review procedures for certain kinds of research 
          involving no more than minimal risk, and for minor changes in 
          approved research.

    (a) The Secretary of HHS has established, and published as a Notice 
in the Federal Register, a list of categories of research that may be 
reviewed by the IRB through an expedited review procedure. The Secretary 
will evaluate the list at least every 8 years and amend it, as 
appropriate, after consultation with other federal departments and

[[Page 412]]

agencies and after publication in the Federal Register for public 
comment. A copy of the list is available from the Office for Human 
Research Protections, HHS, or any successor office.
    (b)(1) An IRB may use the expedited review procedure to review the 
following:
    (i) Some or all of the research appearing on the list described in 
paragraph (a) of this section, unless the reviewer determines that the 
study involves more than minimal risk;
    (ii) Minor changes in previously approved research during the period 
for which approval is authorized; or
    (iii) Research for which limited IRB review is a condition of 
exemption under Sec.  60.104(d)(2)(iii), (d)(3)(i)(C), and (d)(7) and 
(8).
    (2) Under an expedited review procedure, the review may be carried 
out by the IRB chairperson or by one or more experienced reviewers 
designated by the chairperson from among members of the IRB. In 
reviewing the research, the reviewers may exercise all of the 
authorities of the IRB except that the reviewers may not disapprove the 
research. A research activity may be disapproved only after review in 
accordance with the nonexpedited procedure set forth in Sec.  60.108(b).
    (c) Each IRB that uses an expedited review procedure shall adopt a 
method for keeping all members advised of research proposals that have 
been approved under the procedure.
    (d) The department or agency head may restrict, suspend, terminate, 
or choose not to authorize an institution's or IRB's use of the 
expedited review procedure.



Sec.  60.111  Criteria for IRB approval of research.

    (a) In order to approve research covered by this policy the IRB 
shall determine that all of the following requirements are satisfied:
    (1) Risks to subjects are minimized:
    (i) By using procedures that are consistent with sound research 
design and that do not unnecessarily expose subjects to risk, and
    (ii) Whenever appropriate, by using procedures already being 
performed on the subjects for diagnostic or treatment purposes.
    (2) Risks to subjects are reasonable in relation to anticipated 
benefits, if any, to subjects, and the importance of the knowledge that 
may reasonably be expected to result. In evaluating risks and benefits, 
the IRB should consider only those risks and benefits that may result 
from the research (as distinguished from risks and benefits of therapies 
subjects would receive even if not participating in the research). The 
IRB should not consider possible long-range effects of applying 
knowledge gained in the research (e.g., the possible effects of the 
research on public policy) as among those research risks that fall 
within the purview of its responsibility.
    (3) Selection of subjects is equitable. In making this assessment 
the IRB should take into account the purposes of the research and the 
setting in which the research will be conducted. The IRB should be 
particularly cognizant of the special problems of research that involves 
a category of subjects who are vulnerable to coercion or undue 
influence, such as children, prisoners, individuals with impaired 
decision-making capacity, or economically or educationally disadvantaged 
persons.
    (4) Informed consent will be sought from each prospective subject or 
the subject's legally authorized representative, in accordance with, and 
to the extent required by, Sec.  60.116.
    (5) Informed consent will be appropriately documented or 
appropriately waived in accordance with Sec.  60.117.
    (6) When appropriate, the research plan makes adequate provision for 
monitoring the data collected to ensure the safety of subjects.
    (7) When appropriate, there are adequate provisions to protect the 
privacy of subjects and to maintain the confidentiality of data.
    (i) The Secretary of HHS will, after consultation with the Office of 
Management and Budget's privacy office and other Federal departments and 
agencies that have adopted this policy, issue guidance to assist IRBs in 
assessing what provisions are adequate to protect the privacy of 
subjects and to maintain the confidentiality of data.
    (ii) [Reserved]
    (8) For purposes of conducting the limited IRB review required by 
Sec.  60.104(d)(7)), the IRB need not make the determinations at 
paragraphs (a)(1) through (7) of this section, and shall make the 
following determinations:
    (i) Broad consent for storage, maintenance, and secondary research 
use of identifiable private information or identifiable biospecimens is 
obtained in accordance with the requirements of Sec.  60.116(a)(1)-(4), 
(a)(6), and (d);
    (ii) Broad consent is appropriately documented or waiver of 
documentation is appropriate, in accordance with Sec.  60.117; and
    (iii) If there is a change made for research purposes in the way the 
identifiable private information or identifiable biospecimens are stored 
or maintained, there are adequate provisions to protect the privacy of 
subjects and to maintain the confidentiality of data.
    (b) When some or all of the subjects are likely to be vulnerable to 
coercion or undue influence, such as children, prisoners, individuals 
with impaired decision-making capacity, or economically or educationally 
disadvantaged persons, additional safeguards have been included in the 
study to protect the rights and welfare of these subjects.



Sec.  60.112  Review by Institution

    Research covered by this policy that has been approved by an IRB may 
be subject to

[[Page 413]]

further appropriate review and approval or disapproval by officials of 
the institution. However, those officials may not approve the research 
if it has not been approved by an IRB.



Sec.  60.113  Suspension or Termination of IRB Approval of Research.

    An IRB shall have authority to suspend or terminate approval of 
research that is not being conducted in accordance with the IRB's 
requirements or that has been associated with unexpected serious harm to 
subjects. Any suspension or termination of approval shall include a 
statement of the reasons for the IRB's action and shall be reported 
promptly to the investigator, appropriate institutional officials, and 
the department or agency head.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec.  60.114  Cooperative Research.

    (a) Cooperative research projects are those projects covered by this 
policy that involve more than one institution. In the conduct of 
cooperative research projects, each institution is responsible for 
safeguarding the rights and welfare of human subjects and for complying 
with this policy.
    (b)(1) Any institution located in the United States that is engaged 
in cooperative research must rely upon approval by a single IRB for that 
portion of the research that is conducted in the United States. The 
reviewing IRB will be identified by the Federal department or agency 
supporting or conducting the research or proposed by the lead 
institution subject to the acceptance of the Federal department or 
agency supporting the research.
    (2) The following research is not subject to this provision:
    (i) Cooperative research for which more than single IRB review is 
required by law (including tribal law passed by the official governing 
body of an American Indian or Alaska Native tribe); or
    (ii) Research for which any Federal department or agency supporting 
or conducting the research determines and documents that the use of a 
single IRB is not appropriate for the particular context.
    (c) For research not subject to paragraph (b) of this section, an 
institution participating in a cooperative project may enter into a 
joint review arrangement, rely on the review of another IRB, or make 
similar arrangements for avoiding duplication of effort.



Sec.  60.115  IRB Records.

    (a) An institution, or when appropriate an IRB, shall prepare and 
maintain adequate documentation of IRB activities, including the 
following:
    (1) Copies of all research proposals reviewed, scientific 
evaluations, if any, that accompany the proposals, approved sample 
consent forms, progress reports submitted by investigators, and reports 
of injuries to subjects.
    (2) Minutes of IRB meetings, which shall be in sufficient detail to 
show attendance at the meetings; actions taken by the IRB; the vote on 
these actions including the number of members voting for, against, and 
abstaining; the basis for requiring changes in or disapproving research; 
and a written summary of the discussion of controverted issues and their 
resolution.
    (3) Records of continuing review activities, including the rationale 
for conducting continuing review of research that otherwise would not 
require continuing review as described in Sec.  60.109(f)(1).
    (4) Copies of all correspondence between the IRB and the 
investigators.
    (5) A list of IRB members in the same detail as described in Sec.  
60.108(a)(2).
    (6) Written procedures for the IRB in the same detail as described 
in Sec.  60.108(a)(3) and (4).
    (7) Statements of significant new findings provided to subjects, as 
required by Sec.  60.116(c)(5).
    (8) The rationale for an expedited reviewer's determination under 
Sec.  60.110(b)(1)(i) that research appearing on the expedited review 
list described in Sec.  60.110(a) is more than minimal risk.
    (9) Documentation specifying the responsibilities that an 
institution and an organization operating an IRB each will undertake to 
ensure compliance with the requirements of this policy, as described in 
Sec.  60.103(e).
    (b) The records required by this policy shall be retained for at 
least 3 years, and records relating to research that is conducted shall 
be retained for at least 3 years after completion of the research. The 
institution or IRB may maintain the records in printed form, or 
electronically. All records shall be accessible for inspection and 
copying by authorized representatives of the Federal department or 
agency at reasonable times and in a reasonable manner.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec.  60.116  General Requirements for Informed Consent.

    (a) General. General requirements for informed consent, whether 
written or oral, are set forth in this paragraph and apply to consent 
obtained in accordance with the requirements set forth in paragraphs (b) 
through (d) of this section. Broad consent may be obtained in lieu of 
informed consent obtained in accordance with paragraphs (b) and (c) of 
this section only with respect to

[[Page 414]]

the storage, maintenance, and secondary research uses of identifiable 
private information and identifiable biospecimens. Waiver or alteration 
of consent in research involving public benefit and service programs 
conducted by or subject to the approval of state or local officials is 
described in paragraph (e) of this section. General waiver or alteration 
of informed consent is described in paragraph (f) of this section. 
Except as provided elsewhere in this policy:
    (1) Before involving a human subject in research covered by this 
policy, an investigator shall obtain the legally effective informed 
consent of the subject or the subject's legally authorized 
representative.
    (2) An investigator shall seek informed consent only under 
circumstances that provide the prospective subject or the legally 
authorized representative sufficient opportunity to discuss and consider 
whether or not to participate and that minimize the possibility of 
coercion or undue influence.
    (3) The information that is given to the subject or the legally 
authorized representative shall be in language understandable to the 
subject or the legally authorized representative.
    (4) The prospective subject or the legally authorized representative 
must be provided with the information that a reasonable person would 
want to have in order to make an informed decision about whether to 
participate, and an opportunity to discuss that information.
    (5) Except for broad consent obtained in accordance with paragraph 
(d) of this section:
    (i) Informed consent must begin with a concise and focused 
presentation of the key information that is most likely to assist a 
prospective subject or legally authorized representative in 
understanding the reasons why one might or might not want to participate 
in the research. This part of the informed consent must be organized and 
presented in a way that facilitates comprehension.
    (ii) Informed consent as a whole must present information in 
sufficient detail relating to the research, and must be organized and 
presented in a way that does not merely provide lists of isolated facts, 
but rather facilitates the prospective subject's or legally authorized 
representative's understanding of the reasons why one might or might not 
want to participate.
    (6) No informed consent may include any exculpatory language through 
which the subject or the legally authorized representative is made to 
waive or appear to waive any of the subject's legal rights, or releases 
or appears to release the investigator, the sponsor, the institution, or 
its agents from liability for negligence.
    (b) Basic elements of informed consent. Except as provided in 
paragraph (d), (e), or (f) of this section, in seeking informed consent 
the following information shall be provided to each subject or the 
legally authorized representative:
    (1) A statement that the study involves research, an explanation of 
the purposes of the research and the expected duration of the subject's 
participation, a description of the procedures to be followed, and 
identification of any procedures that are experimental;
    (2) A description of any reasonably foreseeable risks or discomforts 
to the subject;
    (3) A description of any benefits to the subject or to others that 
may reasonably be expected from the research;
    (4) A disclosure of appropriate alternative procedures or courses of 
treatment, if any, that might be advantageous to the subject;
    (5) A statement describing the extent, if any, to which 
confidentiality of records identifying the subject will be maintained;
    (6) For research involving more than minimal risk, an explanation as 
to whether any compensation and an explanation as to whether any medical 
treatments are available if injury occurs and, if so, what they consist 
of, or where further information may be obtained;
    (7) An explanation of whom to contact for answers to pertinent 
questions about the research and research subjects' rights, and whom to 
contact in the event of a research-related injury to the subject;
    (8) A statement that participation is voluntary, refusal to 
participate will involve no penalty or loss of benefits to which the 
subject is otherwise entitled, and the subject may discontinue 
participation at any time without penalty or loss of benefits to which 
the subject is otherwise entitled; and
    (9) One of the following statements about any research that involves 
the collection of identifiable private information or identifiable 
biospecimens:
    (i) A statement that identifiers might be removed from the 
identifiable private information or identifiable biospecimens and that, 
after such removal, the information or biospecimens could be used for 
future research studies or distributed to another investigator for 
future research studies without additional informed consent from the 
subject or the legally authorized representative, if this might be a 
possibility; or
    (ii) A statement that the subject's information or biospecimens 
collected as part of the research, even if identifiers are removed, will 
not be used or distributed for future research studies.
    (c) Additional elements of informed consent. Except as provided in 
paragraph (d), (e), or (f) of this section, one or more of the following 
elements of information, when appropriate, shall also be provided to 
each subject or the legally authorized representative:
    (1) A statement that the particular treatment or procedure may 
involve risks to the

[[Page 415]]

subject (or to the embryo or fetus, if the subject is or may become 
pregnant) that are currently unforeseeable;
    (2) Anticipated circumstances under which the subject's 
participation may be terminated by the investigator without regard to 
the subject's or the legally authorized representative's consent;
    (3) Any additional costs to the subject that may result from 
participation in the research;
    (4) The consequences of a subject's decision to withdraw from the 
research and procedures for orderly termination of participation by the 
subject;
    (5) A statement that significant new findings developed during the 
course of the research that may relate to the subject's willingness to 
continue participation will be provided to the subject;
    (6) The approximate number of subjects involved in the study;
    (7) A statement that the subject's biospecimens (even if identifiers 
are removed) may be used for commercial profit and whether the subject 
will or will not share in this commercial profit;
    (8) A statement regarding whether clinically relevant research 
results, including individual research results, will be disclosed to 
subjects, and if so, under what conditions; and
    (9) For research involving biospecimens, whether the research will 
(if known) or might include whole genome sequencing (i.e., sequencing of 
a human germline or somatic specimen with the intent to generate the 
genome or exome sequence of that specimen).
    (d) Elements of broad consent for the storage, maintenance, and 
secondary research use of identifiable private information or 
identifiable biospecimens. Broad consent for the storage, maintenance, 
and secondary research use of identifiable private information or 
identifiable biospecimens (collected for either research studies other 
than the proposed research or nonresearch purposes) is permitted as an 
alternative to the informed consent requirements in paragraphs (b) and 
(c) of this section. If the subject or the legally authorized 
representative is asked to provide broad consent, the following shall be 
provided to each subject or the subject's legally authorized 
representative:
    (1) The information required in paragraphs (b)(2), (b)(3), (b)(5), 
and (b)(8) and, when appropriate, (c)(7) and (9) of this section;
    (2) A general description of the types of research that may be 
conducted with the identifiable private information or identifiable 
biospecimens. This description must include sufficient information such 
that a reasonable person would expect that the broad consent would 
permit the types of research conducted;
    (3) A description of the identifiable private information or 
identifiable biospecimens that might be used in research, whether 
sharing of identifiable private information or identifiable biospecimens 
might occur, and the types of institutions or researchers that might 
conduct research with the identifiable private information or 
identifiable biospecimens;
    (4) A description of the period of time that the identifiable 
private information or identifiable biospecimens may be stored and 
maintained (which period of time could be indefinite), and a description 
of the period of time that the identifiable private information or 
identifiable biospecimens may be used for research purposes (which 
period of time could be indefinite);
    (5) Unless the subject or legally authorized representative will be 
provided details about specific research studies, a statement that they 
will not be informed of the details of any specific research studies 
that might be conducted using the subject's identifiable private 
information or identifiable biospecimens, including the purposes of the 
research, and that they might have chosen not to consent to some of 
those specific research studies;
    (6) Unless it is known that clinically relevant research results, 
including individual research results, will be disclosed to the subject 
in all circumstances, a statement that such results may not be disclosed 
to the subject; and
    (7) An explanation of whom to contact for answers to questions about 
the subject's rights and about storage and use of the subject's 
identifiable private information or identifiable biospecimens, and whom 
to contact in the event of a research-related harm.
    (e) Waiver or alteration of consent in research involving public 
benefit and service programs conducted by or subject to the approval of 
state or local officials--(1) Waiver. An IRB may waive the requirement 
to obtain informed consent for research under paragraphs (a) through (c) 
of this section, provided the IRB satisfies the requirements of 
paragraph (e)(3) of this section. If an individual was asked to provide 
broad consent for the storage, maintenance, and secondary research use 
of identifiable private information or identifiable biospecimens in 
accordance with the requirements at paragraph (d) of this section, and 
refused to consent, an IRB cannot waive consent for the storage, 
maintenance, or secondary research use of the identifiable private 
information or identifiable biospecimens.
    (2) Alteration. An IRB may approve a consent procedure that omits 
some, or alters some or all, of the elements of informed consent set 
forth in paragraphs (b) and (c) of this section provided the IRB 
satisfies the requirements of paragraph (e)(3) of this section. An IRB 
may not omit or alter any of the requirements described in paragraph (a) 
of this section. If a broad consent procedure

[[Page 416]]

is used, an IRB may not omit or alter any of the elements required under 
paragraph (d) of this section.
    (3) Requirements for waiver and alteration. In order for an IRB to 
waive or alter consent as described in this subsection, the IRB must 
find and document that:
    (i) The research or demonstration project is to be conducted by or 
subject to the approval of state or local government officials and is 
designed to study, evaluate, or otherwise examine:
    (A) Public benefit or service programs;
    (B) Procedures for obtaining benefits or services under those 
programs;
    (C) Possible changes in or alternatives to those programs or 
procedures; or
    (D) Possible changes in methods or levels of payment for benefits or 
services under those programs; and
    (ii) The research could not practicably be carried out without the 
waiver or alteration.
    (f) General waiver or alteration of consent--(1) Waiver. An IRB may 
waive the requirement to obtain informed consent for research under 
paragraphs (a) through (c) of this section, provided the IRB satisfies 
the requirements of paragraph (f)(3) of this section. If an individual 
was asked to provide broad consent for the storage, maintenance, and 
secondary research use of identifiable private information or 
identifiable biospecimens in accordance with the requirements at 
paragraph (d) of this section, and refused to consent, an IRB cannot 
waive consent for the storage, maintenance, or secondary research use of 
the identifiable private information or identifiable biospecimens.
    (2) Alteration. An IRB may approve a consent procedure that omits 
some, or alters some or all, of the elements of informed consent set 
forth in paragraphs (b) and (c) of this section provided the IRB 
satisfies the requirements of paragraph (f)(3) of this section. An IRB 
may not omit or alter any of the requirements described in paragraph (a) 
of this section. If a broad consent procedure is used, an IRB may not 
omit or alter any of the elements required under paragraph (d) of this 
section.
    (3) Requirements for waiver and alteration. In order for an IRB to 
waive or alter consent as described in this subsection, the IRB must 
find and document that:
    (i) The research involves no more than minimal risk to the subjects;
    (ii) The research could not practicably be carried out without the 
requested waiver or alteration;
    (iii) If the research involves using identifiable private 
information or identifiable biospecimens, the research could not 
practicably be carried out without using such information or 
biospecimens in an identifiable format;
    (iv) The waiver or alteration will not adversely affect the rights 
and welfare of the subjects; and
    (v) Whenever appropriate, the subjects or legally authorized 
representatives will be provided with additional pertinent information 
after participation.
    (g) Screening, recruiting, or determining eligibility. An IRB may 
approve a research proposal in which an investigator will obtain 
information or biospecimens for the purpose of screening, recruiting, or 
determining the eligibility of prospective subjects without the informed 
consent of the prospective subject or the subject's legally authorized 
representative, if either of the following conditions are met:
    (1) The investigator will obtain information through oral or written 
communication with the prospective subject or legally authorized 
representative, or
    (2) The investigator will obtain identifiable private information or 
identifiable biospecimens by accessing records or stored identifiable 
biospecimens.
    (h) Posting of clinical trial consent form. (1) For each clinical 
trial conducted or supported by a Federal department or agency, one IRB-
approved informed consent form used to enroll subjects must be posted by 
the awardee or the Federal department or agency component conducting the 
trial on a publicly available Federal Web site that will be established 
as a repository for such informed consent forms.
    (2) If the Federal department or agency supporting or conducting the 
clinical trial determines that certain information should not be made 
publicly available on a Federal Web site (e.g. confidential commercial 
information), such Federal department or agency may permit or require 
redactions to the information posted.
    (3) The informed consent form must be posted on the Federal Web site 
after the clinical trial is closed to recruitment, and no later than 60 
days after the last study visit by any subject, as required by the 
protocol.
    (i) Preemption. The informed consent requirements in this policy are 
not intended to preempt any applicable Federal, state, or local laws 
(including tribal laws passed by the official governing body of an 
American Indian or Alaska Native tribe) that require additional 
information to be disclosed in order for informed consent to be legally 
effective.
    (j) Emergency medical care. Nothing in this policy is intended to 
limit the authority of a physician to provide emergency medical care, to 
the extent the physician is permitted to do so under applicable Federal, 
state, or local law (including tribal law passed by the official 
governing body of an American Indian or Alaska Native tribe).

[[Page 417]]


(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec.  60.117  Documentation of informed consent.

    (a) Except as provided in paragraph (c) of this section, informed 
consent shall be documented by the use of a written informed consent 
form approved by the IRB and signed (including in an electronic format) 
by the subject or the subject's legally authorized representative. A 
written copy shall be given to the person signing the informed consent 
form.
    (b) Except as provided in paragraph (c) of this section, the 
informed consent form may be either of the following:
    (1) A written informed consent form that meets the requirements of 
Sec.  60.116. The investigator shall give either the subject or the 
subject's legally authorized representative adequate opportunity to read 
the informed consent form before it is signed; alternatively, this form 
may be read to the subject or the subject's legally authorized 
representative.
    (2) A short form written informed consent form stating that the 
elements of informed consent required by Sec.  60.116 have been 
presented orally to the subject or the subject's legally authorized 
representative, and that the key information required by Sec.  
60.116(a)(5)(i) was presented first to the subject, before other 
information, if any, was provided. The IRB shall approve a written 
summary of what is to be said to the subject or the legally authorized 
representative. When this method is used, there shall be a witness to 
the oral presentation. Only the short form itself is to be signed by the 
subject or the subject's legally authorized representative. However, the 
witness shall sign both the short form and a copy of the summary, and 
the person actually obtaining consent shall sign a copy of the summary. 
A copy of the summary shall be given to the subject or the subject's 
legally authorized representative, in addition to a copy of the short 
form.
    (c)(1) An IRB may waive the requirement for the investigator to 
obtain a signed informed consent form for some or all subjects if it 
finds any of the following:
    (i) That the only record linking the subject and the research would 
be the informed consent form and the principal risk would be potential 
harm resulting from a breach of confidentiality. Each subject (or 
legally authorized representative) will be asked whether the subject 
wants documentation linking the subject with the research, and the 
subject's wishes will govern;
    (ii) That the research presents no more than minimal risk of harm to 
subjects and involves no procedures for which written consent is 
normally required outside of the research context; or
    (iii) If the subjects or legally authorized representatives are 
members of a distinct cultural group or community in which signing forms 
is not the norm, that the research presents no more than minimal risk of 
harm to subjects and provided there is an appropriate alternative 
mechanism for documenting that informed consent was obtained.
    (2) In cases in which the documentation requirement is waived, the 
IRB may require the investigator to provide subjects or legally 
authorized representatives with a written statement regarding the 
research.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec.  60.118  Applications and proposals lacking definite plans for 
          involvement of human subjects.

    Certain types of applications for grants, cooperative agreements, or 
contracts are submitted to Federal departments or agencies with the 
knowledge that subjects may be involved within the period of support, 
but definite plans would not normally be set forth in the application or 
proposal. These include activities such as institutional type grants 
when selection of specific projects is the institution's responsibility; 
research training grants in which the activities involving subjects 
remain to be selected; and projects in which human subjects' involvement 
will depend upon completion of instruments, prior animal studies, or 
purification of compounds. Except for research waived under Sec.  
60.101(i) or exempted under Sec.  60.104, no human subjects may be 
involved in any project supported by these awards until the project has 
been reviewed and approved by the IRB, as provided in this policy, and 
certification submitted, by the institution, to the Federal department 
or agency component supporting the research.



Sec.  60.119  Research undertaken without the intention of involving 
          human subjects.

    Except for research waived under Sec.  60.101(i) or exempted under 
Sec.  60.104, in the event research is undertaken without the intention 
of involving human subjects, but it is later proposed to involve human 
subjects in the research, the research shall first be reviewed and 
approved by an IRB, as provided in this policy, a certification 
submitted by the institution to the Federal department or agency 
component supporting the research, and final approval given to the 
proposed change by the Federal department or agency component.

[[Page 418]]



Sec.  60.120  Evaluation and disposition of applications and proposals 
          for research to be conducted or supported by a Federal 
          department or agency.

    (a) The department or agency head will evaluate all applications and 
proposals involving human subjects submitted to the Federal department 
or agency through such officers and employees of the Federal department 
or agency and such experts and consultants as the department or agency 
head determines to be appropriate. This evaluation will take into 
consideration the risks to the subjects, the adequacy of protection 
against these risks, the potential benefits of the research to the 
subjects and others, and the importance of the knowledge gained or to be 
gained.
    (b) On the basis of this evaluation, the department or agency head 
may approve or disapprove the application or proposal, or enter into 
negotiations to develop an approvable one.



Sec.  60.121  [Reserved]



Sec.  60.122  Use of Federal funds.

    Federal funds administered by a Federal department or agency may not 
be expended for research involving human subjects unless the 
requirements of this policy have been satisfied.



Sec.  60.123  Early termination of research support: Evaluation of 
          applications and proposals.

    (a) The department or agency head may require that Federal 
department or agency support for any project be terminated or suspended 
in the manner prescribed in applicable program requirements, when the 
department or agency head finds an institution has materially failed to 
comply with the terms of this policy.
    (b) In making decisions about supporting or approving applications 
or proposals covered by this policy the department or agency head may 
take into account, in addition to all other eligibility requirements and 
program criteria, factors such as whether the applicant has been subject 
to a termination or suspension under paragraph (a) of this section and 
whether the applicant or the person or persons who would direct or has/
have directed the scientific and technical aspects of an activity has/
have, in the judgment of the department or agency head, materially 
failed to discharge responsibility for the protection of the rights and 
welfare of human subjects (whether or not the research was subject to 
federal regulation).



Sec.  60.124  Conditions.

    With respect to any research project or any class of research 
projects the department or agency head of either the conducting or the 
supporting Federal department or agency may impose additional conditions 
prior to or at the time of approval when in the judgment of the 
department or agency head additional conditions are necessary for the 
protection of human subjects.



PART 70_USE OF VOLUNTEERS ON PROJECTS SUBJECT TO DAVIS-BACON AND HUD
-DETERMINED WAGE RATES--Table of Contents



Sec.
70.1 Purpose and authority.
70.2 Applicability.
70.3 Definitions.
70.4 Procedure for implementing prevailing wage exemptions for 
          volunteers.
70.5 Procedure for obtaining HUD waiver of prevailing wage rates for 
          volunteers.

    Authority: Sec. 955, Cranston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 1437(j), 5310 and 12 U.S.C. 1701q(c)(3); Sec. 7(d) 
Department of Housing and Urban Development Act (42 U.S.C. 3535(d)).

    Source: 57 FR 14756, Apr. 22, 1992, unless otherwise noted.



Sec.  70.1  Purpose and authority.

    (a) This part implements section 955 of the National Affordable 
Housing Act (NAHA), which provides an exemption from the requirement to 
pay prevailing wage rates determined under the Davis-Bacon Act or (in 
the case of laborers and mechanics employed in the operation of public 
housing projects, and architects, technical engineers, draftsmen and 
technicians employed in the development of public housing projects) 
determined or adopted by HUD, for volunteers employed on projects that 
are subject to prevailing wage rates under Title I of the Housing and 
Community Development Act of 1974 (including Community Development Block 
Grants, section 108 loan guarantees, and Urban Development Action 
Grants), under section 12 of the United States Housing Act of 1937 
(public housing development and operation and section 8 projects), and 
under section 202 of the Housing Act of 1959 for elderly and handicapped 
housing projects prior to the effective date of the amendment of section 
202 by section 801 of NAHA. This part also implements other provisions 
that provide an exemption for volunteers, including section 286 of NAHA 
(the HOME program), section 202 of the House Act of

[[Page 419]]

1959, as amended by NAHA (supportive housing for the elderly), and any 
later-enacted exemptions.
    (b) This part is also applicable to all HUD programs for which there 
is a statutory provision allowing HUD to waive Davis-Bacon wage rates 
for volunteers that are not otherwise employed at any time on the work 
for which the individual volunteers. These programs include section 811 
of NAHA (supportive housing for persons with disabilities), FHA mortgage 
insurance programs under sections 221(d)(3) and (d)(4) (each with 
respect to cooperative housing projects only), 221(h)(1) (but only where 
a nonprofit organization undertakes the construction), 235(j)(1) (but 
only where a nonprofit organization undertakes the construction), 231, 
232, 236 and 242 of the National Housing Act, rehabilitation under 
section 312 of the Housing Act of 1964 and college housing under section 
402 of the Housing Act of 1950.
    (c) This part provides definitions and procedures for determining 
allowable payments to volunteers, determining who is a bona fide 
volunteer, and otherwise implementing exemptions from and waivers of 
prevailing wage requirements where volunteers are employed.



Sec.  70.2  Applicability.

    This part applies to all HUD programs for which there is a statutory 
exemption from Davis-Bacon or HUD-determined prevailing wage rates for 
volunteers or a statutory provision allowing HUD waiver of Davis-Bacon 
prevailing wage rates for volunteers. The programs to which this part 
applies include the programs listed in section 70.1(a) and (b) and any 
other program for which a statutory exemption or HUD waiver provision 
for volunteers is enacted. This part does not, however, apply to HUD 
waivers of prevailing wage requirements under section 20 of the United 
States Housing Act of 1937 for public housing residents who volunteer a 
portion of their labor (see 24 CFR 964.41). This part also does not 
apply to the contribution of labor by an eligible family under the 
Mutual Help Homeownership Opportunity Program for Indian families under 
section 202 of the United States Housing Act of 1937.



Sec.  70.3  Definitions.

    (a) A volunteer, for purposes of this part, is an individual who 
performs service for a public or private entity for civic, charitable, 
or humanitarian reasons, without promise, expectation or receipt of 
compensation for services rendered, on a HUD-assisted or insured project 
which is subject to a requirement to pay prevailing wage rates.
    (1) Individuals shall be considered volunteers only where their 
services are offered freely and without pressure and coercion, direct or 
implied, from an employer.
    (2) An individual shall not be considered a volunteer if the 
individual is otherwise employed at any time in the construction or 
maintenance work for which the individual volunteers.
    (b) Expenses, reasonable benefits, or nominal fees may be provided 
to volunteers without the status of the volunteer being lost but only 
after a determination is made by HUD on a case-by-case basis by 
examining the total amount of payments made (expenses, benefits, fees) 
in the context of the economic realities of the particular situation. 
Subject to this determination:
    (1) A payment for an expense may be received by a volunteer for 
items such as uniform allowances or reimbursement for reasonable 
cleaning expenses or wear and tear on personal clothing worn while 
performing the volunteer work. Additionally, reimbursement for 
approximate out-of-pocket expenses for the cost of meals and 
transportation expenses may be made.
    (2) Reasonable benefits may constitute inclusion of individual 
volunteers in group insurance plans (such as liability, health, life, 
disability, workers' compensation) or pension plan or length of service 
awards.
    (3) A nominal fee is not a substitute for compensation and must not 
be tied to productivity. The decision as to what constitutes ``nominal'' 
must be made on a case-by-case basis and in the context of the economic 
realities of the situation.
    (4) The phrase economic realities means that in determining whether 
the fee described in paragraph (b)(3) of this section may be deemed 
``nominal'', the amount of the fee must be judged in the context of what 
paid workers doing

[[Page 420]]

the same work would earn in the particular locality involved. For 
example, a ``payment'' made to a ``homeless'' volunteer in an amount 
which covers basic necessities but nonetheless represents an 
insignificant amount when compared with local cost of living and real 
wages may be determined to be nominal for purposes of qualifying as a 
volunteer, provided the payment is not in fact a substitute for 
compensation and is not tied in any way to productivity.
    (c) Prevailing wage rates, for purposes of this part, means:
    (1) Wage rates required to be paid to laborers and mechanics 
employed in the construction (including rehabilitation) of a project (or 
in the case of public housing, the development of the project), as 
determined by the Secretary of Labor under the Davis-Bacon Act;
    (2) Wage rates required to be paid to laborers and mechanics 
employed in the operation of a public housing project, as determined or 
adopted by the Secretary of HUD; and
    (3) Wage rates required to be paid to architects, technical 
engineers, draftsmen and technicians employed in the development of a 
public housing project, as determined or adopted by the Secretary of 
HUD.



Sec.  70.4  Procedure for implementing prevailing wage exemptions
for volunteers.

    (a) This section applies to those HUD programs for which there is a 
statutory exemption for volunteers, as referenced in Sec.  70.1(a).
    (b) Local or State agencies or private parties whose employees are 
otherwise subject to Davis-Bacon or HUD-determined prevailing wage rates 
which propose to use volunteers and wish to pay the volunteers' 
expenses, reasonable benefits, or nominal fees shall request a 
determination from HUD that these payments meet the criteria in Sec.  
70.3(b). A written determination shall be provided to the requester by 
the Department within ten days of receipt by the Department of 
sufficient information to allow for the determination.
    (c) A determination under paragraph (b) shall not be construed in 
any way as limiting the use of bona fide volunteers on HUD-assisted 
construction, but rather is required to ensure that the Department 
performs its appropriate responsibilities under Reorganization Plan No. 
14 of 1950 and related Department of Labor Regulations in title 29 CFR 
part 5, regarding the administration and enforcement of the Davis-Bacon 
and Related Acts, and its responsibility for the administration and 
enforcement of HUD-determined or adopted wage rates in the operation of 
public housing assisted under the United States Housing Act of 1937.
    (d) For a project covered by prevailing wage rate requirements in 
which all the work is to be done by volunteers and there are no paid 
construction employees, the local or State funding agency (or, if none, 
the entity that employs the volunteers) shall record in the pertinent 
project file the name and address of the agency sponsoring the project, 
a description of the project (location, cost, nature of the work), and 
the number of volunteers and the hours of work they performed. The 
entity responsible for recording this information shall also provide a 
copy of this information to HUD.
    (e) For a project covered by prevailing wage rate requirements in 
which there is to be a mix of paid workers and volunteers, the local or 
State funding agency (or, if none, the entity responsible for generating 
certified payrolls) shall provide HUD the information in paragraph (d) 
of this section, along with the names of the volunteers.
    (f) Volunteers who receive no expenses, benefits or fees described 
in (c) and are otherwise bona fide shall be recorded as in (d) or (e).



Sec.  70.5  Procedure for obtaining HUD waiver of prevailing wage
rates for volunteers.

    (a) This section applies to those HUD programs under which HUD is 
statutorily authorized to waive prevailing wage requirements for 
volunteers, as referenced in Sec.  70.1(b).
    (b) Local or State agencies or private parties whose employees are 
otherwise subject to prevailing wage rates and

[[Page 421]]

which wish to use volunteers shall request a waiver of prevailing wage 
requirements from HUD for the volunteers. A request for waiver shall 
indicate that the proposed volunteers are volunteering their services 
for the purposes of lowering the costs of construction. The request 
shall include information sufficient for HUD to make a determination, as 
required by statute, that any amounts saved through the use of 
volunteers are fully credited to the corporation, cooperative, or public 
body or agency undertaking the construction and a determination that any 
payments to volunteers meet the criteria in section 70.3(b). Information 
regarding the crediting of amounts saved is required in order to insure 
that the statutorily prescribed purpose of lowering the costs of 
construction is fulfilled by passing savings from the use of volunteers 
on to the sponsor or other body or agency undertaking the construction, 
rather than permitting the retention of any savings as a windfall by a 
contractor or subcontractor. A written waiver shall be provided to the 
requestor by the Department within ten days of receipt by the Department 
of sufficient information to meet the requirements for a waiver.
    (c) For a project covered by prevailing wage rate requirements in 
which all the work is to be done by volunteers and there are no paid 
construction employees, the local or State funding agency (or, if none, 
the entity that employs the volunteers) shall record in the pertinent 
project file the name and address of the agency sponsoring the project, 
the name, location, and HUD project number (if any) of the project, the 
number of volunteers, and type of work and hours of work they performed. 
The entity responsible for recording this information shall provide a 
copy of the information to HUD.
    (d) For a project covered by prevailing wage rate requirements in 
which there is to be a mix of paid workers and volunteers, the local or 
State funding agency (or, if none, the entity responsible for generating 
certified payrolls) shall provide HUD the information in (c) of this 
section, along with the names of the proposed volunteers.



PART 81_THE SECRETARY OF HUD'S REGULATION OF THE FEDERAL NATIONAL
MORTGAGE ASSOCIATION (FANNIE MAE) AND THE FEDERAL HOME LOAN MORTGAGE
CORPORATION (FREDDIE MAC)--Table of Contents



                            Subpart A_General

Sec.
81.1 Scope of part.
81.2 Definitions.

                         Subpart B_Housing Goals

81.11 General.
81.12 Low- and Moderate-Income Housing Goal.
81.13 Central Cities, Rural Areas, and Other Underserved Areas Housing 
          Goal.
81.14 Special Affordable Housing Goal.
81.15 General requirements.
81.16 Special counting requirements.
81.17 Affordability--Income level definitions--family size and income 
          known (owner-occupied units, actual tenants, and prospective 
          tenants).
81.18 Affordability--Income level definitions--family size not known 
          (actual or prospective tenants).
81.19 Affordability--Rent level definitions--tenant income is not known.
81.20 Actions to be taken to meet the goals.
81.21 Notice and determination of failure to meet goals.
81.22 Housing plans.

                         Subpart C_Fair Housing

81.41 General.
81.42 Prohibitions against discrimination.
81.43 Reports; underwriting and appraisal guideline review.
81.44 Submission of information to the Secretary.
81.45 Obtaining and disseminating information.
81.46 Remedial actions.
81.47 Violations of provisions by the GSEs.

                     Subpart D_New Program Approval

81.51 General.
81.52 Requirement for program requests.
81.53 Processing of program requests.
81.54 Review of disapproval.

                    Subpart E_Reporting Requirements

81.61 General.
81.62 Mortgage reports.
81.63 Annual Housing Activities Report.
81.64 Periodic reports.
81.65 Other information and analyses.
81.66 Submission of reports.

[[Page 422]]

                     Subpart F_Access to Information

81.71 General.
81.72 Public-use database and public information.
81.73 GSE request for proprietary treatment.
81.74 Secretarial determination on GSE request.
81.75 Proprietary information withheld by order or regulation.
81.76 FOIA requests and protection of GSE information.
81.77 Requests for GSE information on behalf of Congress, the 
          Comptroller General, a subpoena, or other legal process.

         Subpart G_Procedures for Actions and Review of Actions

81.81 General.
81.82 Cease-and-desist proceedings.
81.83 Civil money penalties.
81.84 Hearings.
81.85 Public disclosure of final orders and agreements.
81.86 Enforcement and jurisdiction.
81.87 Judicial review.

                     Subpart H_Book-Entry Procedures

81.91 Maintenance of GSE Securities.
81.92 Law governing rights and obligations of United States, Federal 
          Reserve Banks, and GSEs; rights of any Person against United 
          States, Federal Reserve Banks, and GSEs; Law governing other 
          interests.
81.93 Creation of Participant's Security Entitlement; security 
          interests.
81.94 Obligations of GSEs; no adverse claims.
81.95 Authority of Federal Reserve Banks.
81.96 Withdrawal of Eligible Book-entry GSE Securities for conversion to 
          definitive form.
81.97 Waiver of regulations.
81.98 Liability of GSEs and Federal Reserve Banks.
81.99 Additional provisions.

                       Subpart I_Other Provisions

81.101 Equal employment opportunity.
81.102 Verification and enforcement to ensure GSE data integrity.

    Authority: 12 U.S.C. 1451 et seq., 1716-1723h, and 4501-4641; 28 
U.S.C. 2461 note; 42 U.S.C. 3535(d) and 3601-3619.

    Source: 60 FR 61888, Dec. 1, 1995, unless otherwise noted.



                            Subpart A_General



Sec.  81.1  Scope of part.

    (a) Authority. The Secretary has general regulatory power respecting 
the Federal National Mortgage Association (``Fannie Mae'') and the 
Federal Home Loan Mortgage Corporation (``Freddie Mac'') (referred to 
collectively as Government-sponsored enterprises (``GSEs'')) and is 
required to make such rules and regulations as are necessary and proper 
to ensure that the provisions of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (``FHEFSSA''), codified 
generally at 12 U.S.C. 4501-4641; the Fannie Mae Charter Act, 12 U.S.C. 
1716-1723h; and the Freddie Mac Act, 12 U.S.C. 1451-59, are 
accomplished.
    (b) Relation between this part and the authorities of OFHEO. The 
Director of the Office of Federal Housing Enterprise Oversight 
(``OFHEO'') will issue separate regulations implementing the Director's 
authority respecting the GSEs. In this part, OFHEO and the Director are 
only referenced when the Director's responsibilities are connected with 
the Secretary's responsibilities.



Sec.  81.2  Definitions.

    (a) Statutory terms. All terms defined in FHEFSSA (12 U.S.C. 4502) 
are used in accordance with their statutory meaning unless otherwise 
defined in paragraph (b) of this section.
    (b) Other terms. As used in this part, the term--
    AHAR means the Annual Housing Activities Report that a GSE submits 
to the Secretary under sections 309(n) of the Fannie Mae Charter Act or 
307(f) of the Freddie Mac Act.
    AHAR information means data or information contained in the AHAR.
    AHS means the American Housing Survey published by HUD and the 
Department of Commerce.
    Balloon mortgage means a mortgage providing for payments at regular 
intervals, with a final payment (``balloon payment'') that is at least 5 
percent more than the periodic payments. The periodic payments may cover 
some or all of the periodic principal or interest. Typically, the 
periodic payments are level monthly payments that would fully amortize 
the mortgage over a

[[Page 423]]

stated term and the balloon payment is a single payment due after a 
specified period (but before the mortgage would fully amortize) and pays 
off or satisfies the outstanding balance of the mortgage.
    Book-entry GSE Security means a GSE Security issued or maintained in 
the Book-entry System. Book-entry GSE Security also means the separate 
interest and principal components of a Book-entry GSE Security if such 
security has been designated by the GSE as eligible for division into 
such components and the components are maintained separately on the 
books of one or more Federal Reserve Banks.
    Book-entry System means the automated book-entry system operated by 
the Federal Reserve Banks acting as the fiscal agent for the GSEs, on 
which Book-entry GSE Securities are issued, recorded, transferred and 
maintained in book-entry form.
    Central city means the underserved areas located in any political 
subdivision designated as a central city by the Office of Management and 
Budget of the Executive Office of the President.
    Charter Act means the Federal National Mortgage Association Charter 
Act (12 U.S.C. 1716 et seq.) or the Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1451 et seq.).
    Contract rent means the total rent that is, or is anticipated to be, 
specified in the rental contract as payable by the tenant to the owner 
for rental of a dwelling unit, including fees or charges for management 
and maintenance services and those utility charges that are included in 
the rental contract. In determining contract rent, rent concessions 
shall not be considered, i.e., contract rent is not decreased by any 
rent concessions. Contract rent is rent net of rental subsidies.
    Conventional mortgage means a mortgage other than a mortgage as to 
which a GSE has the benefit of any guaranty, insurance or other 
obligation by the United States or any of its agencies or 
instrumentalities.
    Day means a calendar day.
    Definitive GSE Security means a GSE Security in engraved or printed 
form, or that is otherwise represented by a certificate.
    Director means the Director of OFHEO.
    Dwelling unit means a room or unified combination of rooms intended 
for use, in whole or in part, as a dwelling by one or more persons, and 
includes a dwelling unit in a single-family property, multifamily 
property, or other residential or mixed-use property.
    ECOA means the Equal Credit Opportunity Act (15 U.S.C. 1691 et 
seq.).
    Eligible Book-entry GSE Security means a Book-entry GSE Security 
issued or maintained in the Book-entry System which by the terms of its 
Security Documentation is eligible to be converted from book-entry form 
into definitive form.
    Entitlement Holder means a Person or a GSE to whose account an 
interest in a Book-entry GSE Security is credited on the records of a 
Securities Intermediary.
    Familial status has the same definition as is set forth at 24 CFR 
100.20.
    Family means one or more individuals who occupy the same dwelling 
unit.
    Fannie Mae means the Federal National Mortgage Association and any 
affiliate thereof.
    Federal Reserve Bank Operating Circular means the publication issued 
by each Federal Reserve Bank that sets forth the terms and conditions 
under which the Reserve Bank maintains book-entry Securities accounts 
(including Book-entry GSE Securities) and transfers book-entry 
Securities (including Book-entry GSE Securities).
    FHEFSSA means the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992, codified generally at 12 U.S.C. 4501-4651.
    FOIA means the Freedom of Information Act (5 U.S.C. 552).
    Freddie Mac means the Federal Home Loan Mortgage Corporation and any 
affiliate thereof.
    Freddie Mac Act means the Federal Home Loan Mortgage Corporation Act 
(12 U.S.C. 1451 et seq.).
    Government-sponsored enterprise or GSE means Fannie Mae or Freddie 
Mac.
    GSE Security means any security or obligation of Fannie Mae or 
Freddie Mac issued under its respective Charter Act in the form of a 
Definitive GSE Security or a Book-entry GSE Security.

[[Page 424]]

    Handicap has the same definition as is set forth at 24 CFR 100.201.
    HOEPA mortgage'' means a mortgage for which the annual percentage 
rate (as calculated in accordance with the relevant provisions of 
section 107 of the Home Ownership Equity Protection Act (HOEPA) (15 
U.S.C. 1606)) exceeds the threshold described in section 103(aa)(1)(A) 
of HOEPA (15 U.S.C. 1602(aa)(1)(A)), or for which the total points and 
fees payable by the borrower exceed the threshold described in section 
103(aa)(1)(B) of HOEPA (15 U.S.C. 1602(aa)(1)(B)), as those thresholds 
may be increased or decreased by the Federal Reserve Board or by 
Congress, unless the GSEs are otherwise notified in writing by HUD. 
Notwithstanding the exclusions in section 103(aa)(1) of HOEPA, for 
purposes of this part, the term ``HOEPA mortgage'' includes all types of 
mortgages as defined in this section, including residential mortgage 
transactions as that term is defined in section 103(w) of HOEPA (15 
U.S.C. 1602(w)), but does not include reverse mortgages.
    Home Purchase Mortgage means a residential mortgage for the purchase 
of an owner-occupied single-family property.
    HUD means the United States Department of Housing and Urban 
Development.
    Lender means any entity that makes, originates, sells, or services 
mortgages, and includes the secured creditors named in the debt 
obligation and document creating the mortgage.
    Low-income area means a census tract or block numbering area in 
which the median income does not exceed 80 percent of the area median 
income.
    Median income means, with respect to an area, the unadjusted median 
family income for the area as most recently determined and published by 
HUD. HUD will provide the GSEs annually with information specifying how 
HUD's published median family income estimates for metropolitan areas 
are to be applied for the purposes of determining median family income.
    Metropolitan area means a metropolitan statistical area (``MSA''), 
or a portion of such an area for which median family income estimates 
are published annually by HUD.
    Minority means any individual who is included within any one or more 
of the following racial and ethnic categories:
    (1) American Indian or Alaskan Native--a person having origins in 
any of the original peoples of North and South America (including 
Central America), and who maintains tribal affiliation or community 
attachment;
    (2) Asian--a person having origins in any of the original peoples of 
the Far East, Southeast Asia, or the Indian subcontinent, including, for 
example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the 
Philippine Islands, Thailand, and Vietnam;
    (3) Black or African American--a person having origins in any of the 
black racial groups of Africa;
    (4) Hispanic or Latino--a person of Cuban, Mexican, Puerto Rican, 
South or Central American, or other Spanish culture or origin, 
regardless of race; and
    (5) Native Hawaiian or Other Pacific Islander--a person having 
origins in any of the original peoples of Hawaii, Guam, Samoa, or other 
Pacific Islands.
    Mortgage means a member of such classes of liens, including 
subordinate liens, as are commonly given or are legally effective to 
secure advances on, or the unpaid purchase price of, real estate under 
the laws of the State in which the real estate is located, or a 
manufactured home that is personal property under the laws of the State 
in which the manufactured home is located, together with the credit 
instruments, if any, secured thereby, and includes interests in 
mortgages. ``Mortgage'' includes a mortgage, lien, including a 
subordinate lien, or other security interest on the stock or membership 
certificate issued to a tenant-stockholder or resident-member by a 
cooperative housing corporation, as defined in section 216 of the 
Internal Revenue Code of 1986, and on the proprietary lease, occupancy 
agreement, or right of tenancy in the dwelling unit of the tenant-
stockholder or resident-member in such cooperative housing corporation.
    Mortgage data means data obtained by the Secretary from the GSEs 
under subsection 309(m) of the Fannie Mae Charter Act and subsection 
307(e) of the Freddie Mac Act.

[[Page 425]]

    Mortgage purchase means a transaction in which a GSE bought or 
otherwise acquired with cash or other thing of value, a mortgage for its 
portfolio or for securitization.
    Mortgages contrary to good lending practices means a mortgage or a 
group or category of mortgages entered into by a lender and purchased by 
a GSE where it can be shown that a lender engaged in a practice of 
failing to:
    (1) Report monthly on borrowers' repayment history to credit 
repositories on the status of each GSE loan that a lender is servicing;
    (2) Offer mortgage applicants products for which they qualify, but 
rather steer applicants to high cost products that are designed for less 
credit worthy borrowers. Similarly, for consumers who seek financing 
through a lender's higher-priced subprime lending channel, lenders 
should not fail to offer or direct such consumers toward the lender's 
standard mortgage line if they are able to qualify for one of the 
standard products;
    (3) Comply with fair lending requirements; or
    (4) Engage in other good lending practices that are:
    (i) Identified in writing by a GSE as good lending practices for 
inclusion in this definition; and
    (ii) Determined by the Secretary to constitute good lending 
practices.
    Mortgages with unacceptable terms or conditions or resulting from 
unacceptable practices means a mortgage or a group or category of 
mortgages with one or more of the following terms or conditions:
    (1) Excessive fees, where the total points and fees charged to a 
borrower exceed the greater of 5 percent of the loan amount or a maximum 
dollar amount of $1000, or an alternative amount requested by a GSE and 
determined by the Secretary as appropriate for small mortgages.
    (i) For purposes of this definition, points and fees include:
    (A) Origination fees;
    (B) Underwriting fees;
    (C) Broker fees;
    (D) Finder's fees; and
    (E) Charges that the lender imposes as a condition of making the 
loan, whether they are paid to the lender or a third party.
    (ii) For purposes of this definition, points and fees do not 
include:
    (A) Bona fide discount points;
    (B) Fees paid for actual services rendered in connection with the 
origination of the mortgage, such as attorneys' fees, notary's fees, and 
fees paid for property appraisals, credit reports, surveys, title 
examinations and extracts, flood and tax certifications, and home 
inspections;
    (C) The cost of mortgage insurance or credit-risk price adjustments;
    (D) The costs of title, hazard, and flood insurance policies;
    (E) State and local transfer taxes or fees;
    (F) Escrow deposits for the future payment of taxes and insurance 
premiums; and
    (G) Other miscellaneous fees and charges that, in total, do not 
exceed 0.25 percent of the loan amount.
    (2) Prepayment penalties, except where:
    (i) The mortgage provides some benefits to the borrower (e.g., such 
as rate or fee reduction for accepting the prepayment premium);
    (ii) The borrower is offered the choice of another mortgage that 
does not contain payment of such a premium;
    (iii) The terms of the mortgage provision containing the prepayment 
penalty are adequately disclosed to the borrower; and
    (iv) The prepayment penalty is not charged when the mortgage debit 
is accelerated as the result of the borrower's default in making his or 
her mortgage payments.
    (3) The sale or financing of prepaid single-premium credit life 
insurance products in connection with the origination of the mortgage;
    (4) Evidence that the lender did not adequately consider the 
borrower's ability to make payments, i.e., mortgages that are originated 
with underwriting techniques that focus on the borrower's equity in the 
home, and do not give full consideration of the borrower's income and 
other obligations. Ability to repay must be determined and must be based 
upon relating the borrower's income, assets, and liabilities to the 
mortgage payments; or

[[Page 426]]

    (5) Other terms or conditions that are:
    (i) Identified in writing by a GSE as unacceptable terms or 
conditions or resulting from unacceptable practices for inclusion in 
this definition; and
    (ii) Determined by the Secretary as an unacceptable term or 
condition of a mortgage for which goals credit should not be received.
    Multifamily housing means a residence consisting of more than 4 
dwelling units. The term includes cooperative buildings and condominium 
projects.
    New England means Connecticut, Maine, Massachusetts, New Hampshire, 
Rhode Island, and Vermont.
    OFHEO means the Office of Federal Housing Enterprise Oversight.
    Ongoing program means a program that is expected to continue for the 
foreseeable future.
    Other underserved area means any underserved area that is in a 
metropolitan area, but not in a central city.
    Owner-occupied unit means a dwelling unit in single-family housing 
in which a mortgagor of the unit resides.
    Participant means a Person or GSE that maintains a Participant's 
Securities Account with a Federal Reserve Bank.
    Participation means a fractional interest in the principal amount of 
a mortgage.
    Person, as used in subpart H, means and includes an individual, 
corporation, company, governmental entity, association, firm, 
partnership, trust, estate, representative, and any other similar 
organization, but does not mean or include the United States, a GSE, or 
a Federal Reserve Bank.
    Portfolio of loans means 10 or more loans.
    Proprietary information means all mortgage data and all AHAR 
information that the GSEs submit to the Secretary in the AHARs that 
contain trade secrets or privileged or confidential, commercial, or 
financial information that, if released, would be likely to cause 
substantial competitive harm.
    Public data means all mortgage data and all AHAR information that 
the GSEs submit to the Secretary in the AHARs, that the Secretary 
determines are not proprietary and may appropriately be disclosed 
consistent with other applicable laws and regulations.
    Real estate mortgage investment conduit (REMIC) means multi-class 
mortgage securities issued by a tax-exempt entity.
    Refinancing means a transaction in which an existing mortgage is 
satisfied or replaced by a new mortgage undertaken by the same borrower. 
The term does not include:
    (1) A renewal of a single payment obligation with no change in the 
original terms;
    (2) A reduction in the annual percentage rate of the mortgage as 
computed under the Truth in Lending Act, with a corresponding change in 
the payment schedule;
    (3) An agreement involving a court proceeding;
    (4) A workout agreement, in which a change in the payment schedule 
or collateral requirements is agreed to as a result of the mortgagor's 
default or delinquency, unless the rate is increased or the new amount 
financed exceeds the unpaid balance plus earned finance charges and 
premiums for the continuation of insurance;
    (5) The renewal of optional insurance purchased by the mortgagor and 
added to an existing mortgage; and
    (6) A renegotiated balloon mortgage on a multifamily property where 
the balloon payment was due within 1 year after the date of the closing 
of the renegotiated mortgage.
    (7) A conversion of a balloon mortgage note on a single family 
property to a fully amortizing mortgage note where the GSE already owns 
or has an interest in the balloon note at the time of the conversion
    Rent means, for a dwelling unit:
    (1) When the contract rent includes all utilities, the contract 
rent; or
    (2) When the contract rent does not include all utilities, the 
contract rent plus:
    (i) The actual cost of utilities not included in the contract rent; 
or
    (ii) A utility allowance.
    Rental housing means dwelling units in multifamily housing and 
dwelling units that are not owner occupied in single-family housing.

[[Page 427]]

    Rental unit means a dwelling unit that is not owner-occupied and is 
rented or available to rent.
    Residence means a property where one or more families reside.
    Residential mortgage means a mortgage on single-family or 
multifamily housing.
    Revised Article 8 has the same meaning as in 31 CFR 357.2.
    Rural area means any underserved area located outside of any 
metropolitan area.
    Seasoned mortgage means a mortgage on which the date of the mortgage 
note is more than 1 year before the GSE purchased the mortgage.
    Second mortgage means any mortgage that has a lien position 
subordinate only to the lien of the first mortgage.
    Secondary residence means a dwelling where the mortgagor maintains 
(or will maintain) a part-time place of abode and typically spends (or 
will spend) less than the majority of the calendar year. A person may 
have more than one secondary residence at a time.
    Secretary means the Secretary of Housing and Urban Development and, 
where appropriate, any person designated by the Secretary to perform a 
particular function for the Secretary, including any HUD officer, 
employee, or agent.
    Security means any mortgage participation certificate, note, bond, 
debenture, evidence of indebtedness, collateral-trust certificate, 
transferable share, certificate of deposit for a security, or, in 
general, any interest or instrument commonly known as a ``security.''
    Securities Documentation means the applicable statement of terms, 
trust indenture, securities agreement or other documents establishing 
the terms of a Book-entry GSE Security.
    Single-family housing means a residence consisting of one to four 
dwelling units. Single-family housing includes condominium dwelling 
units and dwelling units in cooperative housing projects.
    Transfer message means an instruction of a Participant to a Federal 
Reserve Bank to effect a transfer of a Book-entry Security (including a 
Book-entry GSE Security) maintained in the Book-entry System, as set 
forth in Federal Reserve Bank Operating Circulars.
    Underserved area means:
    (1) For purposes of the definitions of ``Central city'' and ``Other 
underserved area,'' a census tract, a Federal or State American Indian 
reservation or tribal or individual trust land, or the balance of a 
census tract excluding the area within any Federal or State American 
Indian reservation or tribal or individual trust land, having:
    (i) A median income at or below 120 percent of the median income of 
the metropolitan area and a minority population of 30 percent or 
greater; or
    (ii) A median income at or below 90 percent of median income of the 
metropolitan area.
    (2) For purposes of the definition of ``Rural area,'' a whole census 
tract, a Federal or State American Indian reservation or tribal or 
individual trust land, or the balance of a census tract excluding the 
area within any Federal or State American Indian reservation or tribal 
or individual trust land, having:
    (i) A median income at or below 120 percent of the greater of the 
State non-metropolitan median income or the nationwide non-metropolitan 
median income and a minority population of 30 percent or greater; or
    (ii) A median income at or below 95 percent of the greater of the 
State non-metropolitan median income or nationwide non-metropolitan 
median income.
    (3) Any Federal or State American Indian reservation or tribal or 
individual trust land that includes land that is both within and outside 
of a metropolitan area and that is designated as an underserved area by 
HUD. In such cases, HUD will notify the GSEs as to applicability of 
other definitions and counting conventions.
    Utilities means charges for electricity, piped or bottled gas, 
water, sewage disposal, fuel (oil, coal, kerosene, wood, solar energy, 
or other), and garbage and trash collection. Utilities do not include 
charges for telephone service.
    Utility allowance means either:
    (1) The amount to be added to contract rent when utilities are not 
included in contract rent (also referred

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to as the ``AHS-derived utility allowance''), as issued annually by the 
Secretary; or
    (2) The utility allowance established under the HUD Section 8 
Program (42 U.S.C. 1437f) for the area where the property is located.
    Very-low-income has the same definition as ``very low-income'' has 
in FHEFSSA.
    Wholesale exchange means a transaction in which a GSE buys or 
otherwise acquires mortgages held in portfolio or securitized by the 
other GSE, or where both GSEs swap such mortgages.
    Working day means a day when HUD is officially open for business.
    (c) Subpart H terms. Unless the context requires otherwise, terms 
used in subpart H of this part that are not defined in this part, have 
the meanings as set forth in 31 CFR 357.2. Definitions and terms used in 
31 CFR part 357 should read as though modified to effectuate their 
application to the GSEs.

[60 FR 61888, Dec. 1, 1995, as amended at 61 FR 63947, Dec. 2, 1996; 62 
FR 28977, May 29, 1997; 65 FR 65084, Oct. 31, 2000; 69 FR 63638, Nov. 2, 
2004]



                         Subpart B_Housing Goals



Sec.  81.11  General.

    This subpart establishes: three housing goals, as required by 
FHEFSSA; requirements for measuring performance under the goals; and 
procedures for monitoring and enforcing the goals.



Sec.  81.12  Low- and Moderate-Income Housing Goal.

    (a) Purpose of goal. This annual goal for the purchase by each GSE 
of mortgages on housing for low- and moderate-income families (``the 
Low- and Moderate-Income Housing Goal'') is intended to achieve 
increased purchases by the GSEs of such mortgages.
    (b) Factors. In establishing the Low- and Moderate-Income Housing 
Goals, the Secretary considered the factors in 12 U.S.C. 4562(b). A 
statement documenting HUD's considerations and findings with respect to 
these factors, entitled ``Departmental Considerations to Establish the 
Low- and Moderate-Income Housing Goal,'' was published in the Federal 
Register on November 2, 2004.
    (c) Goals. The annual goals for each GSE's purchases of mortgages on 
housing for low- and moderate-income families are:
    (1) For the year 2005, 52 percent of the total number of dwelling 
units financed by that GSE's mortgage purchases unless otherwise 
adjusted by HUD in accordance with FHEFSSA. In addition, as a Low- and 
Moderate-Income Housing Home Purchase Subgoal, 45 percent of the total 
number of home purchase mortgages in metropolitan areas financed by that 
GSE's mortgage purchases shall be home purchase mortgages in 
metropolitan areas which count toward the Low- and Moderate-Income 
Housing Goal in the year 2005 unless otherwise adjusted by HUD in 
accordance with FHEFSSA;
    (2) For the year 2006, 53 percent of the total number of dwelling 
units financed by that GSE's mortgage purchases unless otherwise 
adjusted by HUD in accordance with FHEFSSA. In addition, as a Low- and 
Moderate-Income Housing Home Purchase Subgoal, 46 percent of the total 
number of home purchase mortgages in metropolitan areas financed by that 
GSE's mortgage purchases shall be home purchase mortgages in 
metropolitan areas which count toward the Low- and Moderate-Income 
Housing Goal in the year 2006 unless otherwise adjusted by HUD in 
accordance with FHEFSSA;
    (3) For the year 2007, 55 percent of the total number of dwelling 
units financed by that GSE's mortgage purchases unless otherwise 
adjusted by HUD in accordance with FHEFSSA. In addition, as a Low- and 
Moderate-Income Housing Home Purchase Subgoal, 47 percent of the total 
number of home purchase mortgages in metropolitan areas financed by that 
GSE's mortgage purchases shall be home purchase mortgages in 
metropolitan areas which count toward the Low- and Moderate-Income 
Housing Goal in the year 2007 unless otherwise adjusted by HUD in 
accordance with FHEFSSA;
    (4) For the year 2008, 56 percent of the total number of dwelling 
units financed by that GSE's mortgage purchases unless otherwise 
adjusted by HUD in accordance with FHEFSSA. In addition,

[[Page 429]]

as a Low- and Moderate-Income Housing Home Purchase Subgoal, 47 percent 
of the total number of home purchase mortgages in metropolitan areas 
financed by that GSE's mortgage purchases shall be home purchase 
mortgages in metropolitan areas which count toward the Low- and 
Moderate-Income Housing Goal in the year 2008 unless otherwise adjusted 
by HUD in accordance with FHEFSSA; and
    (5) For the year 2009 and thereafter HUD shall establish annual 
goals. Pending establishment of goals for the year 2009 and thereafter, 
the annual goal for each of those years shall be 56 percent of the total 
number of dwelling units financed by that GSE's mortgage purchases in 
each of those years. In addition, as a Low and Moderate Income Housing 
Home Purchase Subgoal, 47 percent of the total number of home purchase 
mortgages in metropolitan areas financed by that GSE's mortgage 
purchases shall be home purchase mortgages in metropolitan areas which 
count toward the Low- and Moderate-Income Housing Goal in each of those 
years unless otherwise adjusted by HUD in accordance with FHEFSSA.

[60 FR 61888, Dec. 1, 1995, as amended at 65 FR 65085, Oct. 31, 2000; 69 
FR 63639, Nov. 2, 2004]



Sec.  81.13  Central Cities, Rural Areas, and Other Underserved Areas
Housing Goal.

    (a) Purpose of the goal. This annual goal for the purchase by each 
GSE of mortgages on housing located in central cities, rural areas, and 
other underserved areas is intended to achieve increased purchases by 
the GSEs of mortgages financing housing in areas that are underserved in 
terms of mortgage credit.
    (b) Factors. In establishing the Central Cities, Rural Areas, and 
Other Underserved Areas Goals, the Secretary considered the factors in 
12 U.S.C. 4564(b). A statement documenting HUD's considerations and 
findings with respect to these factors, entitled ``Departmental 
Considerations to Establish the Central Cities, Rural Areas, and Other 
Underserved Areas Housing Goal,'' was published in the Federal Register 
on November 2, 2004.
    (c) Goals. The annual goals for each GSE's purchases of mortgages on 
housing located in central cities, rural areas, and other underserved 
areas are:
    (1) For the year 2005, 37 percent of the total number of dwelling 
units financed by that GSE's mortgage purchases unless otherwise 
adjusted by HUD in accordance with FHEFSSA. In addition, as a Central 
Cities, Rural Areas, and Other Underserved Areas Home Purchase Subgoal, 
32 percent of the total number of home purchase mortgages in 
metropolitan areas financed by that GSE's mortgage purchases shall be 
home purchase mortgages in metropolitan areas which count toward the 
Central Cities, Rural Areas, and Other Underserved Areas Housing Goal in 
the year 2005 unless otherwise adjusted by HUD in accordance with 
FHEFSSA;
    (2) For the year 2006, 38 percent of the total number of dwelling 
units financed by that GSE's mortgage purchases unless otherwise 
adjusted by HUD in accordance with FHEFSSA. In addition, as a Central 
Cities, Rural Areas, and Other Underserved Areas Home Purchase Subgoal, 
33 percent of the total number of home purchase mortgages in 
metropolitan areas financed by that GSE's mortgage purchases shall be 
home purchase mortgages in metropolitan areas which count toward the 
Central Cities, Rural Areas, and Other Underserved Areas Housing Goal in 
the year 2006 unless otherwise adjusted by HUD in accordance with 
FHEFSSA;
    (3) For the year 2007, 38 percent of the total number of dwelling 
units financed by that GSE's mortgage purchases unless otherwise 
adjusted by HUD in accordance with FHEFSSA. In addition, as a Central 
Cities, Rural Areas, and Other Underserved Areas Home Purchase Subgoal, 
33 percent of the total number of home purchase mortgages in 
metropolitan areas financed by that GSE's mortgage purchases shall be 
home purchase mortgages in metropolitan areas which count toward the 
Central Cities, Rural Areas, and Other Underserved Areas Housing Goal in 
the year 2007 unless otherwise adjusted by HUD in accordance with 
FHEFSSA;
    (4) For the year 2008, 39 percent of the total number of dwelling 
units financed

[[Page 430]]

by that GSE's mortgage purchases unless otherwise adjusted by HUD in 
accordance with FHEFSSA. In addition, as a Central Cities, Rural Areas, 
and Other Underserved Areas Home Purchase Subgoal, 34 percent of the 
total number of home purchase mortgages in metropolitan areas financed 
by that GSE's mortgage purchases shall be home purchase mortgages in 
metropolitan areas which count toward the Central Cities, Rural Areas, 
and Other Underserved Areas Housing Goal in the year 2008 unless 
otherwise adjusted by HUD in accordance with FHEFSSA; and
    (5) For the year 2009 and thereafter HUD shall establish annual 
goals. Pending establishment of goals for the year 2009 and thereafter, 
the annual goal for each of those years shall be 39 percent of the total 
number of dwelling units financed by that GSE's mortgage purchases in 
each of those years. In addition, as a Central Cities, Rural Areas, and 
Other Underserved Areas Home Purchase Subgoal, 34 percent of the total 
number of home purchase mortgages in metropolitan areas financed by that 
GSE's mortgage purchases shall be home purchase mortgages in 
metropolitan areas which count toward the Central Cities, Rural Areas, 
and Other Underserved Areas Housing Goal in each of those years unless 
otherwise adjusted by HUD in accordance with FHEFSSA.
    (d) Measuring performance. The GSEs shall determine on a mortgage-
by-mortgage basis, through geocoding or any similarly accurate and 
reliable method, whether a mortgage finances one or more dwelling units 
located in a central city, rural area, or other underserved area.

[60 FR 61888, Dec. 1, 1995, as amended at 65 FR 65086, Oct. 31, 2000; 69 
FR 63639, Nov. 2, 2004]



Sec.  81.14  Special Affordable Housing Goal.

    (a) Purpose of the goal. This goal is intended to achieve increased 
purchases by the GSEs of mortgages on rental and owner-occupied housing 
meeting the then-existing unaddressed needs of, and affordable to, low-
income families in low-income areas and very-low-income families.
    (b) Factors. In establishing the Special Affordable Housing Goals, 
the Secretary considered the factors in 12 U.S.C. 4563(a)(2). A 
statement documenting HUD's considerations and findings with respect to 
these factors, entitled ``Departmental Considerations to Establish the 
Special Affordable Housing Goal,'' was published in the Federal Register 
on November 2, 2004.
    (c) Goals. The annual goals for each GSE's purchases of mortgages on 
rental and owner-occupied housing meeting the then-existing, unaddressed 
needs of and affordable to low-income families in low-income areas and 
very low-income families are:
    (1) For the year 2005, 22 percent of the total number of dwelling 
units financed by each GSE's mortgage purchases unless otherwise 
adjusted by HUD in accordance with FHEFSSA. The goal for the year 2005 
shall include mortgage purchases financing dwelling units in multifamily 
housing totaling not less than 1.0 percent of the average annual dollar 
volume of combined (single-family and multifamily) mortgages purchased 
by the respective GSE in 2000, 2001, and 2002, unless otherwise adjusted 
by HUD in accordance with FHEFSSA. In addition, as a Special Affordable 
Housing Home Purchase Subgoal, 17 percent of the total number of home 
purchase mortgages in metropolitan areas financed by each GSE's mortgage 
purchases shall be home purchase mortgages in metropolitan areas which 
count toward the Special Affordable Housing Goal in the year 2005 unless 
otherwise adjusted by HUD in accordance with FHEFSSA;
    (2) For the year 2006, 23 percent of the total number of dwelling 
units financed by each GSE's mortgage purchases unless otherwise 
adjusted by HUD in accordance with FHEFSSA. The goal for the year 2006 
shall include mortgage purchases financing dwelling units in multifamily 
housing totaling not less than 1.0 percent of the average annual dollar 
volume of combined (single-family and multifamily) mortgages purchased 
by the respective GSE in 2000, 2001, and 2002, unless otherwise adjusted 
by HUD in accordance with FHEFSSA. In addition, as a Special Affordable 
Housing Home Purchase

[[Page 431]]

Subgoal, 17 percent of the total number of home purchase mortgages in 
metropolitan areas financed by each GSE's mortgage purchases shall be 
home purchase mortgages in metropolitan areas which count toward the 
Special Affordable Housing Goal in the year 2006 unless otherwise 
adjusted by HUD in accordance with FHEFSSA;
    (3) For the year 2007, 25 percent of the total number of dwelling 
units financed by each GSE's mortgage purchases unless otherwise 
adjusted by HUD in accordance with FHEFSSA. The goal for the year 2007 
shall include mortgage purchases financing dwelling units in multifamily 
housing totaling not less than 1.0 percent of the average annual dollar 
volume of combined (single-family and multifamily) mortgages purchased 
by the respective GSE in 2000, 2001, and 2002, unless otherwise adjusted 
by HUD in accordance with FHEFSSA. In addition, as a Special Affordable 
Housing Home Purchase Subgoal, 18 percent of the total number of home 
purchase mortgages in metropolitan areas financed by each GSE's mortgage 
purchases shall be home purchase mortgages in metropolitan areas which 
count toward the Special Affordable Housing Goal in the year 2007 unless 
otherwise adjusted by HUD in accordance with FHEFSSA;
    (4) For the year 2008, 27 percent of the total number of dwelling 
units financed by each GSE's mortgage purchases unless otherwise 
adjusted by HUD in accordance with FHEFSSA. The goal for the year 2008 
shall include mortgage purchases financing dwelling units in multifamily 
housing totaling not less than 1.0 percent of the average annual dollar 
volume of combined (single-family and multifamily) mortgages purchased 
by the respective GSE in 2000, 2001, and 2002, unless otherwise adjusted 
by HUD in accordance with FHEFSSA. In addition, as a Special Affordable 
Housing Home Purchase Subgoal, 18 percent of the total number of home 
purchase mortgages in metropolitan areas financed by each GSE's mortgage 
purchases shall be home purchase mortgages in metropolitan areas which 
count toward the Special Affordable Housing Goal in the year 2008 unless 
otherwise adjusted by HUD in accordance with FHEFSSA; and
    (5) For the year 2009 and thereafter HUD shall establish annual 
goals. Pending establishment of goals for the year 2009 and thereafter, 
the annual goal for each of those years shall be 27 percent of the total 
number of dwelling units financed by each GSE's mortgage purchases in 
each of those years. The goal for each such year shall include mortgage 
purchases financing dwelling units in multifamily housing totaling not 
less than 1.0 percent of the annual average dollar volume of combined 
(single-family and multifamily) mortgages purchased by the respective 
GSE in the years 2000, 2001, and 2002. In addition, as a Special 
Affordable Housing Home Purchase Subgoal, 18 percent of the total number 
of home purchase mortgages in metropolitan areas financed by each GSE's 
mortgage purchases shall be home purchase mortgages in metropolitan 
areas which count toward the Special Affordable Housing Goal in each of 
those years unless otherwise adjusted by HUD in accordance with FHEFSSA.
    (d) Counting of multifamily units. (1) Dwelling units affordable to 
low-income families and financed by a particular purchase of a mortgage 
on multifamily housing shall count toward achievement of the Special 
Affordable Housing Goal where at least:
    (i) 20 percent of the dwelling units in the particular multifamily 
property are affordable to especially low-income families; or
    (ii) 40 percent of the dwelling units in the particular multifamily 
property are affordable to very-low-income families.
    (2) Where only some of the units financed by a purchase of a 
mortgage on multifamily housing count under the multifamily component of 
the goal, only a portion of the unpaid principal balance of the mortgage 
attributable to such units shall count toward the multifamily component. 
The portion of the mortgage counted under the multifamily requirement 
shall be equal to the ratio of the total units that count to the total 
number of units in the mortgaged property.
    (e) Full Credit Activities. (1) For purposes of 12 U.S.C. 4563(b)(1) 
and this paragraph (e), full credit means that

[[Page 432]]

each unit financed by a mortgage purchased by a GSE and meeting the 
requirements of this section shall count toward achievement of the 
Special Affordable Housing Goal for that GSE.
    (2) Mortgages insured under HUD's Home Equity Conversion Mortgage 
(``HECM'') Insurance Program, 12 U.S.C. 1715 z-20; mortgages guaranteed 
under the Rural Housing Service's Single Family Housing Guaranteed Loan 
Program, 42 U.S.C. 1472; mortgages on properties on tribal lands insured 
under FHA's Section 248 program, 12 U.S.C. 1715 z-13, HUD's Section 184 
program, 12 U.S.C. 1515 z-13a, or Title VI of the Native American 
Housing Assistance and Self-Determination Act of 1996, 25 U.S.C. 4191-
4195; meet the requirements of 12 U.S.C. 4563(b)(1)(A)(i) and (ii).
    (3) HUD will give full credit toward achievement of the Special 
Affordable Housing Goal for the activities in 12 U.S.C. 4563(b)(1)(A), 
provided the GSE submits documentation to HUD that supports eligibility 
under 12 U.S.C. 4563(b)(1)(A) for HUD's approval.
    (4)(i) For purposes of determining whether a seller meets the 
requirement in 12 U.S.C. 4563(b)(1)(B), a seller must currently operate 
on its own or actively participate in an on-going, discernible, active, 
and verifiable program directly targeted at the origination of new 
mortgage loans that qualify under the Special Affordable Housing Goal.
    (ii) A seller's activities must evidence a current intention or plan 
to reinvest the proceeds of the sale into mortgages qualifying under the 
Special Affordable Housing Goal, with a current commitment of resources 
on the part of the seller for this purpose.
    (iii) A seller's actions must evidence willingness to buy qualifying 
loans when these loans become available in the market as part of active, 
on-going, sustainable efforts to ensure that additional loans that meet 
the goal are originated.
    (iv) Actively participating in such a program includes purchasing 
qualifying loans from a correspondent originator, including a lender or 
qualified housing group, that operates an on-going program resulting in 
the origination of loans that meet the requirements of the goal, has a 
history of delivering, and currently delivers qualifying loans to the 
seller.
    (v) The GSE must verify and monitor that the seller meets the 
requirements in paragraphs (e)(4)(i) through (e)(4)(iv) of this section 
and develop any necessary mechanisms to ensure compliance with the 
requirements, except as provided in paragraph (e)(4)(vi) and (vii) of 
this section.
    (vi) Where a seller's primary business is originating mortgages on 
housing that qualifies under this Special Affordable Housing Goal such 
seller is presumed to meet the requirements in paragraphs (e)(4)(i) 
through (e)(4)(iv) of this section. Sellers that are institutions that 
are:
    (A) Regularly in the business of mortgage lending;
    (B) A BIF-insured or SAIF-insured depository institution; and
    (C) Subject to, and has received at least a satisfactory performance 
evaluation rating for
    (1) At least the two most recent consecutive examinations under, the 
Community Reinvestment Act, if the lending institution has total assets 
in excess of $250 million; or
    (2) The most recent examination under the Community Reinvestment Act 
if the lending institutions which have total assets no more than $250 
million are identified as sellers that are presumed to have a primary 
business of originating mortgages on housing that qualifies under this 
Special Affordable Housing Goal and, therefore, are presumed to meet the 
requirements in paragraphs (e)(4)(i) through (e)(4)(iv) of this section.
    (vii) Classes of institutions or organizations that are presumed 
have as their primary business originating mortgages on housing that 
qualifies under this Special Affordable Housing Goal and, therefore. are 
presumed in paragraphs (e)(4)(i) through (e)(4)(iv) of this section to 
meet the requirements are as follows: State housing finance agencies; 
affordable housing loan consortia; Federally insured credit unions that 
are:
    (A) Members of the Federal Home Loan Bank System and meet the first-
time homebuyer standard of the Community Support Program; or

[[Page 433]]

    (B) Community development credit unions; community development 
financial institutions; public loan funds; or non-profit mortgage 
lenders. HUD may determine that additional classes of institutions or 
organizations are primarily engaged in the business of financing 
affordable housing mortgages for purposes of this presumption, and if, 
so will notify the GSEs in writing.
    (viii) For purposes of paragraph (e)(4) of this section, if the 
seller did not originate the mortgage loans, but the originator of the 
mortgage loans fulfills the requirements of either paragraphs (e)(4)(i) 
through (e)(4)(iv), paragraph (e)(4)(vi) or paragraph (e)(4)(vii) of 
this section; and the seller has held the loans for six months or less 
prior to selling the loans to the GSE, HUD will consider that the seller 
has met the requirements of this paragraph (e)(4) and of 12 U.S.C. 
4563(b)(1)(B).
    (f) Partial credit activities. Mortgages insured under HUD's Title I 
program, which includes property improvement and manufactured home 
loans, shall receive one-half credit toward the Special Affordable 
Housing Goal until such time as the Government National Mortgage 
Association fully implements a program to purchase and securitize Title 
I loans.
    (g) No credit activities. Neither the purchase nor the 
securitization of mortgages associated with the refinancing of a GSE's 
existing mortgage or mortgage-backed securities portfolios shall receive 
credit toward the achievement of the Special Affordable Housing Goal. 
Refinancings that result from the wholesale exchange of mortgages 
between the two GSEs shall not count toward the achievement of this 
goal. Refinancings of individual mortgages shall count toward 
achievement of this goal when the refinancing is an arms-length 
transaction that is borrower-driven and the mortgage otherwise counts 
toward achievement of this goal. For purposes of this paragraph (g), 
``mortgages or mortgage-backed securities portfolios'' includes 
mortgages retained by Fannie Mae or Freddie Mac and mortgages utilized 
to back mortgage-backed securities.

[60 FR 61888, Dec. 1, 1995, as amended at 65 FR 65086, Oct. 31, 2000; 69 
FR 63640, Nov. 2, 2004]



Sec.  81.15  General requirements.

    (a) Calculating the numerator and denominator. Performance under 
each of the housing goals shall be measured using a fraction that is 
converted into a percentage.
    (1) The numerator. The numerator of each fraction is the number of 
dwelling units financed by a GSE's mortgage purchases in a particular 
year that count toward achievement of the housing goal.
    (2) The denominator. The denominator of each fraction is, for all 
mortgages purchased, the number of dwelling units that could count 
toward achievement of the goal under appropriate circumstances. The 
denominator shall not include GSE transactions or activities that are 
not mortgages or mortgage purchases as defined by HUD or transactions 
that are specifically excluded as ineligible under Sec.  81.16(b).
    (3) Missing data or information. When a GSE lacks sufficient data or 
information to determine whether the purchase of a mortgage originated 
after 1992 counts toward achievement of a particular housing goal, that 
mortgage purchase shall be included in the denominator for that housing 
goal, except under the circumstances described in paragraphs (d) and 
(e)(6) of this section.
    (b) Properties with multiple dwelling units. For the purposes of 
counting toward the achievement of the goals, whenever the property 
securing a mortgage contains more than one dwelling unit, each such 
dwelling unit shall be counted as a separate dwelling unit financed by a 
mortgage purchase.
    (c) Credit toward multiple goals. A mortgage purchase (or dwelling 
unit financed by such purchase) by a GSE in a particular year shall 
count toward the achievement of each housing goal for which such 
purchase (or dwelling unit) qualifies in that year.
    (d) Counting owner-occupied units. (1) For purposes of counting 
owner-occupied units toward achievement of the Low- and Moderate-Income 
Housing Goal or the Special Affordable Housing Goal, mortgage purchases 
financing such units shall be evaluated based on the income of the 
mortgagors and the area median income at the time of

[[Page 434]]

origination of the mortgage. To determine whether mortgages may be 
counted under a particular family income level, i.e., especially low, 
very low, low or moderate income, the income of the mortgagors is 
compared to the median income for the area at the time of the mortgage 
application, using the appropriate percentage factor provided under 
Sec.  81.17.
    (2)(i) When the income of the mortgagor(s) is not available to 
determine whether an owner-occupied unit in a property securing a 
single-family mortgage originated after 1992 and purchased by a GSE 
counts toward achievement of the Low- and Moderate-Income Housing Goal 
or the Special Affordable Housing Goal, a GSE's performance with respect 
to such unit may be evaluated using estimated affordability information 
in accordance with one of the following methods:
    (A) Excluding from the denominator and the numerator single-family 
owner-occupied units located in census tracts with median incomes less 
than, or equal to, area median income based on the most recent decennial 
census, up to a maximum of one percent of the total number of single-
family owner-occupied dwelling units eligible to be counted toward the 
respective housing goal in the current year. Mortgage purchases with 
missing data in excess of the maximum will be included in the 
denominator and excluded from the numerator;
    (B) For home purchase mortgages and for refinance mortgages 
separately, multiplying the number of owner-occupied units with missing 
borrower income information in properties securing mortgages purchased 
by the GSE in each census tract by the percentage of all single-family 
owner-occupied mortgage originations in the respective tracts that would 
count toward achievement of each goal, as determined by HUD based on the 
most recent HMDA data available; or
    (C) Such other data source and methodology as may be approved by 
HUD.
    (ii) In any calendar year, a GSE may use only one of the methods 
specified in paragraph (d)(2)(i) of this section to estimate 
affordability information for single-family owner-occupied units.
    (iii) If a GSE chooses to use an estimation methodology under 
paragraph (d)(2)(i)(B) or (d)(2)(i)(C) of this section to determine 
affordability for owner-occupied units in properties securing single-
family mortgage purchases eligible to be counted toward the respective 
housing goal, then that methodology may be used up to nationwide 
maximums for home purchase mortgages and for refinance mortgages that 
shall be calculated by multiplying, for each census tract, the 
percentage of all single-family owner-occupied mortgage originations 
with missing borrower incomes (as determined by HUD based on the most 
recent HMDA data available for home purchase and refinance mortgages, 
respectively) by the number of single-family owner-occupied units in 
properties securing mortgages purchased by the GSE for each census 
tract, summed up over all census tracts. If this nationwide maximum is 
exceeded, then the estimated number of goal-qualifying units will be 
adjusted by the ratio of the applicable nationwide maximum number of 
units for which income information may be estimated to the total number 
of single-family owner-occupied units with missing income information in 
properties securing mortgages purchased by the GSE. Owner-occupied units 
in excess of the nationwide maximum, and any units for which estimation 
information is not available, shall remain in the denominator of the 
respective goal calculation.
    (e) Counting rental units--(1) Use of income, rent--(i) Generally. 
For purposes of counting rental units toward achievement of the Low- and 
Moderate-Income Housing Goal or the Special Affordable Housing Goal, 
mortgage purchases financing such units shall be evaluated based on the 
income of actual or prospective tenants where such data is available, 
i.e., known to a lender.
    (ii) Availability of income information. (A) Each GSE shall require 
lenders to provide to the GSE tenant income information under paragraphs 
(e)(3) and (4) of this section, but only when such information is known 
to the lender.
    (B) When such tenant income information is available for all 
occupied units, the GSE's performance shall be

[[Page 435]]

based on the income of the tenants in the occupied units. For unoccupied 
units that are vacant and available for rent and for unoccupied units 
that are under repair or renovation and not available for rent, the GSE 
shall use the income of prospective tenants, if paragraph (e)(4) of this 
section is applicable. If paragraph (e)(4) of this section is not 
applicable, the GSE shall use rent levels for comparable units in the 
property to determine affordability.
    (2) Model units and rental offices. A model unit or rental office in 
a multifamily property may count toward achievement of the housing goals 
only if a GSE determines that:
    (i) It is reasonably expected that the units will be occupied by a 
family within one year;
    (ii) The number of such units is reasonable and minimal considering 
the size of the multifamily property; and
    (iii) Such unit otherwise meets the requirements for the goal.
    (3) Income of actual tenants. When the income of actual tenants is 
available, to determine whether a tenant is very-low-, low-, or 
moderate-income, the income of the tenant shall be compared to the 
median income for the area, adjusted for family size as provided in 
Sec.  81.17.
    (4) Income of prospective tenants. When income for tenants is 
available to a lender because a project is subject to a Federal housing 
program that establishes the maximum income for a tenant or a 
prospective tenant in rental units, the income of prospective tenants 
may be counted at the maximum income level established under such 
housing program for that unit. In determining the income of prospective 
tenants, the income shall be projected based on the types of units and 
market area involved. Where the income of prospective tenants is 
projected, each GSE must determine that the income figures are 
reasonable considering the rents (if any) on the same units in the past 
and considering current rents on comparable units in the same market 
area.
    (5) Use of rent. When the income of the prospective or actual 
tenants of a dwelling unit is not available, performance under these 
goals will be evaluated based on rent and whether the rent is affordable 
to the income group targeted by the housing goal. A rent is affordable 
if the rent does not exceed 30 percent of the maximum income level of 
very-low-, low-, or moderate-income families as provided in Sec.  81.19. 
In determining contract rent for a dwelling unit, the actual rent or 
average rent by unit type shall be used.
    (6) Affordability data unavailable. (i) Multifamily. (A) When a GSE 
lacks sufficient information to determine whether a rental unit in a 
property securing a multifamily mortgage purchased by a GSE counts 
toward achievement of the Low- and Moderate-Income Housing Goal or the 
Special Affordable Housing Goal because neither the income of 
prospective or actual tenants, nor the actual or average rental data, 
are available, a GSE's performance with respect to such unit may be 
evaluated using estimated affordability information in accordance with 
one of the following methods:
    (1) Multiplying the number of rental units with missing 
affordability information in properties securing multifamily mortgages 
purchased by the GSE in each census tract by the percentage of all 
rental dwelling units in the respective tracts that would count toward 
achievement of each goal, as determined by HUD based on the most recent 
decennial census. For units with missing affordability information in 
tracts for which such methodology is not possible, such units will be 
excluded from the denominator as well as the numerator in calculating 
performance under the respective housing goal(s); or
    (2) Such other data source and methodology as may be approved by 
HUD.
    (B) In any calendar year, a GSE may use only one of the methods 
specified in paragraph (e)(6)(i)(A) of this section to estimate 
affordability information for multifamily rental units.
    (C) If a GSE chooses to use an estimation methodology under 
paragraph (e)(6)(i)(A) of this section to determine affordability for 
rental units in properties securing multifamily mortgage purchases 
eligible to be counted toward the respective housing goal, then that 
methodology may be used up to a nationwide maximum of ten percent of the 
total number of rental units in

[[Page 436]]

properties securing multifamily mortgages purchased by the GSE in the 
current year. If this maximum is exceeded, the estimated number of goal-
qualifying units will be adjusted by the ratio of the nationwide maximum 
number of units for which affordability information may be estimated to 
the total number of multifamily rental units with missing affordability 
information in properties securing mortgages purchased by the GSE. 
Multifamily rental units in excess of the maximum set forth in this 
paragraph (e)(6)(i)(C), and any units for which estimation information 
is not available, shall be removed from the denominator of the 
respective goal calculation.
    (ii) Rental units in 1-4 unit single-family properties. (A) When a 
GSE lacks sufficient information to determine whether a rental unit in a 
property securing a single-family mortgage purchased by a GSE counts 
toward achievement of the Low- and Moderate-Income Housing Goal or the 
Special Affordable Housing Goal because neither the income of 
prospective or actual tenants, nor the actual or average rental data, 
are available, a GSE's performance with respect to such unit may be 
evaluated using estimated affordability information in accordance with 
one of the following methods:
    (1) Excluding rental units in 1-to 4-unit properties with missing 
affordability information from the denominator as well as the numerator 
in calculating performance under those goals;
    (2) Multiplying the number of rental units with missing 
affordability information in properties securing single family mortgages 
purchased by the GSE in each census tract by the percentage of all 
rental dwelling units in the respective tracts that would count toward 
achievement of each goal, as determined by HUD based on the most recent 
decennial census. For units with missing affordability information in 
tracts for which such methodology is not possible, such units will be 
excluded from the denominator as well as the numerator in calculating 
performance under the respective housing goal(s); or
    (3) Such other data source and methodology as may be approved by 
HUD.
    (B) In any calendar year, a GSE may use only one of the methods 
specified in paragraph (e)(6)(ii)(A) of this section to estimate 
affordability information for single-family rental units.
    (C) If a GSE chooses to use an estimation methodology under 
paragraph (e)(6)(ii)(A)(2) or (e)(6)(ii)(A)(3) of this section to 
determine affordability for rental units in properties securing single-
family mortgage purchases eligible to be counted toward the respective 
housing goal, then that methodology may be used up to nationwide 
maximums of five percent of the total number of rental units in 
properties securing non-seasoned single-family mortgage purchases by the 
GSE in the current year and 20 percent of the total number of rental 
units in properties securing seasoned single-family mortgage purchases 
by the GSE in the current year. If either or both of these maximums are 
exceeded, the estimated number of goal-qualifying units will be adjusted 
by the ratio of the applicable nationwide maximum number of units for 
which affordability information may be estimated to the total number of 
single-family rental units with missing affordability information in 
properties securing seasoned or unseasoned mortgages purchased by the 
GSE, as applicable. Single-family rental units in excess of the maximums 
set forth in this paragraph (e)(6)(ii)(C), and any units for which 
estimation information is not available, shall be removed from the 
denominator of the respective goal calculation.
    (7) Timeliness of information. In determining performance under the 
housing goals, each GSE shall use tenant and rental information as of 
the time of mortgage:
    (i) Acquisition for mortgages on multifamily housing; and
    (ii) Origination for mortgages on single-family housing.
    (f) Application of Median income. (1) For purposes of determining an 
area's median income under Sec. Sec.  81.17 through 81.19 and for the 
definition of ``low-income area,'' the area is:
    (i) The metropolitan area, if the property which is the subject of 
the mortgage is in a metropolitan area; and

[[Page 437]]

    (ii) In all other areas, the county in which the property is 
located, except that where the State nonmetropolitan median income is 
higher than the county's median income, the area is the State 
nonmetropolitan area.
    (2) When a GSE cannot precisely determine whether a mortgage is on 
dwelling unit(s) located in one area, the GSE shall determine the median 
income for the split area in the manner prescribed by the Federal 
Financial Institutions Examination Council for reporting under the Home 
Mortgage Disclosure Act, if the GSE can determine that the mortgage is 
on dwelling unit(s) located in:
    (i) A census tract;
    (ii) A census place code;
    (iii) A block-group enumeration district;
    (iv) A nine-digit zip code; or
    (v) Another appropriate geographic segment that is partially located 
in more than one area (``split area'').
    (g) Sampling not permitted. Performance under the housing goals for 
each year shall be based on a complete tabulation of mortgage purchases 
for that year; a sampling of such purchases is not acceptable.
    (h) Newly available data. When a GSE uses data to determine whether 
a mortgage purchase counts toward achievement of any goal and new data 
is released after the start of a calendar quarter, the GSE need not use 
the new data until the start of the following quarter.
    (i) Counting mortgages toward the Home Purchase Subgoals--(1) 
General. The requirements of this section, except for paragraphs (b) and 
(e) of this section, shall apply to counting mortgages toward the Home 
Purchase Subgoals at Sec. Sec.  81.12 through 81.14. However, 
performance under the subgoals shall be counted using a fraction that is 
converted into a percentage for each subgoal and the numerator of the 
fraction for each subgoal shall be the number of home purchase mortgages 
in metropolitan areas financed by each GSE's mortgage purchases in a 
particular year that count towards achievement of the applicable housing 
goal. The denominator of each fraction shall be the total number of home 
purchase mortgages in metropolitan areas financed by each GSE's mortgage 
purchases in a particular year. For purposes of each subgoal, the 
procedure for addressing missing data or information, as set forth in 
paragraph (d) of this section, shall be implemented using numbers of 
home purchase mortgages in metropolitan areas and not single-family 
owner-occupied dwelling units.
    (2) Special counting rule for mortgages with more than one owner-
occupied unit. For purposes of counting mortgages toward the Home 
Purchase Subgoals, where a single home purchase mortgage finances the 
purchase of two or more owner-occupied units in a metropolitan area, the 
mortgage shall count once toward each subgoal that applies to the GSE's 
mortgage purchase.

[60 FR 61888, Dec. 1, 1995, as amended at 65 FR 65087, Oct. 31, 2000; 69 
FR 63641, Nov. 2, 2004]



Sec.  81.16  Special counting requirements.

    (a) General. HUD shall determine whether a GSE shall receive full, 
partial, or no credit for a transaction toward achievement of any of the 
housing goals. In this determination, HUD will consider whether a 
transaction or activity of the GSE is substantially equivalent to a 
mortgage purchase and either creates a new market or adds liquidity to 
an existing market, provided however that such mortgage purchase 
actually fulfills the GSE's purposes and is in accordance with its 
Charter Act.
    (b) Not counted. The following transactions or activities shall not 
count toward achievement of any of the housing goals and shall not be 
included in the denominator in calculating either GSE's performance 
under the housing goals:
    (1) Equity investments in housing development projects;
    (2) Purchases of State and local government housing bonds except as 
provided in 81.16(c)(8);
    (3) Purchases of non-conventional mortgages except:
    (i) Where such mortgages are acquired under a risk-sharing 
arrangement with a Federal agency;
    (ii) Mortgages insured under HUD's Home Equity Conversion Mortgage 
(``HECM'') insurance program, 12 U.S.C. 1715z-20; mortgages guaranteed

[[Page 438]]

under the Rural Housing Service's Single Family Housing Guaranteed Loan 
Program, 42 U.S.C. 1472; mortgages on properties on lands insured under 
FHA's Section 248 program, 12 U.S.C. 1715z-13, or HUD's Section 184 
program, 12 U.S.C. 1515z-13a, or Title VI of the Native American Housing 
Assistance and Self-Determination Act of 1996, 25 U.S.C. 4191-4195; and 
mortgages with expiring assistance contracts as defined at 42 U.S.C. 
1737f;
    (iii) Mortgages under other mortgage programs involving Federal 
guarantees, insurance or other Federal obligation where the Department 
determines in writing that the financing needs addressed by the 
particular mortgage program are not well served and that the mortgage 
purchases under such program should count under the housing goals, 
provided the GSE submits documentation to HUD that supports eligibility 
and that HUD makes such a determination, or
    (iv) As provided in Sec.  81.14(e)(3)
    (4) Commitments to buy mortgages at a later date or time;
    (5) Options to acquire mortgages;
    (6) Rights of first refusal to acquire mortgages;
    (7) Any interests in mortgages that the Secretary determines, in 
writing, shall not be treated as interests in mortgages;
    (8) Mortgage purchases to the extent they finance any dwelling units 
that are secondary residences; and
    (9) Single family mortgage refinancings that result from conversion 
of balloon notes to fully amortizing notes, if the GSE already owns or 
has an interest in the balloon note at the time conversion occurs.
    (10) Any combination of factors in paragraphs (b)(1) through (9) of 
this section.
    (c) Other special rules. Subject to HUD's primary determination of 
whether a GSE shall receive full, partial, or no credit for a 
transaction toward achievement of any of the housing goals as provided 
in paragraph (a) of this section, the following supplemental rules 
apply:
    (1) Credit enhancements. (i) Dwelling units financed under a credit 
enhancement entered into by a GSE shall be treated as mortgage purchases 
and count toward achievement of the housing goals when:
    (A) The GSE provides a specific contractual obligation to ensure 
timely payment of amounts due under a mortgage or mortgages financed by 
the issuance of housing bonds (such bonds may be issued by any entity, 
including a State or local housing finance agency);
    (B) The GSE assumes a credit risk in the transaction substantially 
equivalent to the risk that would have been assumed by the GSE if it had 
securitized the mortgages financed by such bonds; and
    (C) Such dwelling units otherwise qualify under this part.
    (ii) When a GSE provides a specific contractual obligation to ensure 
timely payment of amounts due under any mortgage originally insured by a 
public purpose mortgage insurance entity or fund, the GSE may, on a 
case-by-case basis, seek approval from the Secretary for such activities 
to count toward achievement of the housing goals.
    (2) Real estate mortgage investment conduits (``REMICs''). (i) A 
GSE's purchase or guarantee of all or a portion of a REMIC shall be 
treated as a mortgage purchase and receive credit toward the achievement 
of the housing goals provided:
    (A) The underlying mortgages or mortgage-backed securities for the 
REMIC were not:
    (1) Guaranteed by the Government National Mortgage Association; or
    (2) Previously counted toward any housing goal by the GSE; and
    (B) The GSE has the information necessary to support counting the 
dwelling units financed by the REMIC, or that part of the REMIC 
purchased or guaranteed by the GSE, toward the achievement of a 
particular housing goal.
    (ii) For REMICs that meet the requirements in paragraph (c)(2)(i) of 
this section and for which the GSE purchased or guaranteed:
    (A) The whole REMIC, all of the units financed by the REMIC shall be 
treated as a mortgage purchase and count toward achievement of the 
housing goals; or
    (B) A portion of the REMIC, the GSE shall receive partial credit 
toward

[[Page 439]]

achievement of the housing goals. This credit shall be equal to the 
percentage of the REMIC purchased or guaranteed by the GSE (the dollar 
amount of the purchase or guarantee divided by the total dollar amount 
of the REMIC) multiplied by the number of dwelling units that would have 
counted toward the goal(s) if the GSE had purchased or guaranteed the 
whole REMIC. In calculating performance under the housing goals, the 
denominator shall include the number of dwelling units included in the 
whole REMIC multiplied by the percentage of the REMIC purchased or 
guaranteed by the GSE.
    (3) Risk-sharing. Mortgage purchases under risk-sharing arrangements 
between the GSEs and any Federal agency where the units would otherwise 
count toward achievement of the housing goal under which the GSE is 
responsible for a substantial amount (50 percent or more) of the risk 
shall be treated as mortgage purchases and count toward achievement of 
the housing goal or goals.
    (4) Participations. Participations purchased by a GSE shall be 
treated as mortgage purchases and count toward the achievement of the 
housing goals, if the GSE's participation in the mortgage is 50 percent 
or more.
    (5) Cooperative housing and condominium projects. (i) The purchase 
of a mortgage on a cooperative housing unit (``a share loan'') or a 
condominium unit is a mortgage purchase. Such a purchase is counted 
toward achievement of a housing goal in the same manner as a mortgage 
purchase of single-family owner-occupied units, i.e., affordability is 
based on the income of the owner(s).
    (ii) The purchase of a mortgage on a cooperative building (``a 
blanket loan'') or a condominium project is a mortgage purchase and 
shall count toward achievement of the housing goals. Where a GSE 
purchases both ``a blanket loan'' and mortgages for units in the same 
building (``share loans''), both the blanket loan and the share loan(s) 
are mortgage purchases and shall count toward achievement of the housing 
goals. Where a GSE purchases both a condominium project mortgage and 
mortgages on condominium dwelling units in the same project, both the 
condominium project mortgages and the mortgages on condominium dwelling 
units are mortgage purchases and shall count toward achievement of the 
housing goals.
    (6) Seasoned mortgages. A GSE's purchase of a seasoned mortgage 
shall be treated as a mortgage purchase for purposes of these goals and 
shall be included in the numerator, as appropriate, and the denominator 
in calculating the GSE's performance under the housing goals, except 
where:
    (i) The GSE has already counted the mortgage under a housing goal 
applicable to 1993 or any subsequent year; or
    (ii) HUD determines, based upon a written request by a GSE, that a 
seasoned mortgage or class of such mortgages should be excluded from the 
numerator and the denominator in order to further the purposes of the 
Special Affordable Housing Goal.
    (7) Purchase of refinanced mortgages. Except as otherwise provided 
in this part, the purchase of a refinanced mortgage by a GSE is a 
mortgage purchase and shall count toward achievement of the housing 
goals to the extent the mortgage qualifies.
    (8) Mortgage revenue bonds. (i) The purchase of a state or local 
mortgage revenue bond shall be treated as a mortgage purchase and units 
financed under such MRB shall count toward achievement of the goals 
where:
    (A) The MRB is to be repaid only from the principal and interest of 
the underlying mortgages originated with funds made available by the 
MRB; and
    (B) The MRB is not a general obligation of a state or local 
government or agency or is not credit enchanced by any government or 
agency, third party guarantor or surety.
    (ii) Dwelling units financed by a mortgage revenue bond meeting the 
requirements of paragraph (c)(8)(i) of this section shall count toward a 
housing goal to the extent such dwelling units otherwise qualify under 
this part.
    (9) Expiring assistance contracts. In accordance with 12 U.S.C. 
4565(a)(5), actions that assist in maintaining the affordability of 
assisted units in eligible multifamily housing projects with expiring 
contracts shall receive credit under the housing goals as provided in 
paragraph (b)(3)(ii) and in accordance

[[Page 440]]

with paragraphs (b) and (c)(1) through (c)(9) of this section.
    (i) For restructured (modified) multifamily mortgage loans with an 
expiring assistance contract where a GSE holds the loan in portfolio and 
facilitates modification of loan terms that results in lower debt 
service to the project's owner, the GSE shall receive full credit under 
any of the housing goals for which the units covered by the mortgage 
otherwise qualify.
    (ii) Where a GSE undertakes more than one action to assist a single 
project or where a GSE engages in an activity that it believes assists 
in maintaining the affordability of assisted units in eligible 
multifamily housing projects but which is not otherwise covered in 
paragraph (c)(9)(i) of this section, the GSE must submit the transaction 
to HUD for a determination on appropriate goals counting treatment.
    (10)-(11) [Reserved]
    (12) HOEPA mortgages and mortgages with unacceptable terms and 
conditions. HOEPA mortgages and mortgages with unacceptable terms or 
conditions as defined in Sec.  81.2 will not receive credit toward any 
of the three housing goals.
    (13) Mortgages contrary to good lending practices. The Secretary 
will monitor the practices and processes of the GSEs to ensure that they 
are not purchasing loans that are contrary to good lending practices as 
defined in Sec.  81.2. Based on the results of such monitoring, the 
Secretary may determine in accordance with paragraph (d) of this section 
that mortgages or categories of mortgages where a lender has not engaged 
in good lending practices will not receive credit toward the three 
housing goals.
    (14) Seller dissolution option. (i) Mortgages acquired through 
transactions involving seller dissolution options shall be treated as 
mortgage purchases, and receive credit toward the achievement of the 
housing goals, only when:
    (A) The terms of the transaction provide for a lockout period that 
prohibits the exercise of the dissolution option for at least one year 
from the date on which the transaction was entered into by the GSE and 
the seller of the mortgages; and
    (B) The transaction is not dissolved during the one-year minimum 
lockout period.
    (ii) The Secretary may grant an exception to the one-year minimum 
lockout period described in paragraph (c)(14)(i)(A) and (B) of this 
section, in response to a written request from an enterprise, if the 
Secretary determines that the transaction furthers the purposes of 
FHEFSSA and the GSE's charter act;
    (iii) For purposes of this paragraph (c)(14), ``seller dissolution 
option'' means an option for a seller of mortgages to the GSEs to 
dissolve or otherwise cancel a mortgage purchase agreement or loan sale.
    (d) HUD review of transactions. HUD will determine whether a class 
of transactions counts as a mortgage purchase under the housing goals. 
If a GSE seeks to have a class of transactions counted under the housing 
goals that does not otherwise count under the rules in this part, the 
GSE may provide HUD detailed information regarding the transactions for 
evaluation and determination by HUD in accordance with this section. In 
making its determination, HUD may also request and evaluate additional 
information from a GSE with regard to how the GSE believes the 
transactions should be counted. HUD will notify the GSE of its 
determination regarding the extent to which the class of transactions 
may count under the goals.

[60 FR 61888, Dec. 1, 1995, as amended at 65 FR 65088, Oct. 31, 2000; 69 
FR 63642, Nov. 2, 2004]



Sec.  81.17  Affordability--Income level definitions--family size and
income known (owner-occupied units, actual tenants, and prospective
tenants).

    In determining whether a dwelling unit is affordable to very-low-, 
low-, or moderate-income families, where the unit is owner-occupied or, 
for rental housing, family size and income information for the dwelling 
unit is known to the GSE, the affordability of the unit shall be 
determined as follows:
    (a) Moderate-income means:
    (1) In the case of owner-occupied units, income not in excess of 100 
percent of area median income; and

[[Page 441]]

    (2) In the case of rental units, where the income of actual or 
prospective tenants is available, income not in excess of the following 
percentages of area median income corresponding to the following family 
sizes:

------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                Number of persons in family                    median
                                                               income
------------------------------------------------------------------------
1.........................................................           70
2.........................................................           80
3.........................................................           90
4.........................................................          100
5 or more.................................................         (*)
------------------------------------------------------------------------
*100% plus (8% multiplied by the number of persons in excess of 4).

    (b) Low-income means:
    (1) In the case of owner-occupied units, income not in excess of 80 
percent of area median income; and
    (2) In the case of rental units, where the income of actual or 
prospective tenants is available, income not in excess of the following 
percentages of area median income corresponding to the following family 
sizes:

------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                Number of persons in family                    median
                                                               income
------------------------------------------------------------------------
1.........................................................           56
2.........................................................           64
3.........................................................           72
4.........................................................           80
5 or more.................................................         (*)
------------------------------------------------------------------------
*80% plus (6.4% multiplied by the number of persons in excess of 4).

    (c) Very-low-income means:
    (1) In the case of owner-occupied units, income not in excess of 60 
percent of area median income; and
    (2) In the case of rental units, where the income of actual or 
prospective tenants is available, income not in excess of the following 
percentages of area median income corresponding to the following family 
sizes:

------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                Number of persons in family                    median
                                                               income
------------------------------------------------------------------------
1.........................................................           42
2.........................................................           48
3.........................................................           54
4.........................................................           60
5 or more.................................................         (*)
------------------------------------------------------------------------
*60% plus (4.8% multiplied by the number of persons in excess of 4).

    (d) Especially-low-income means, in the case of rental units, where 
the income of actual or prospective tenants is available, income not in 
excess of the following percentages of area median income corresponding 
to the following family sizes:

------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                Number of persons in family                    median
                                                               income
------------------------------------------------------------------------
1.........................................................           35
2.........................................................           40
3.........................................................           45
4.........................................................           50
5 or more.................................................         (*)
------------------------------------------------------------------------
* 50% plus (4.0% multiplied by the number of persons in excess of 4).


[60 FR 61888, Dec. 1, 1995, as amended at 65 FR 65089, Oct. 31, 2000]



Sec.  81.18  Affordability--Income level definitions--family size not known 
(actual or prospective tenants).

    In determining whether a rental unit is affordable to very-low, low-
, or moderate-income families where family size is not known to the GSE, 
income will be adjusted using unit size, and affordability determined as 
follows:
    (a) For moderate-income, the income of prospective tenants shall not 
exceed the following percentages of area median income with adjustments, 
depending on unit size:

------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                         Unit size                             median
                                                               income
------------------------------------------------------------------------
Efficiency................................................           70
1 bedroom.................................................           75
2 bedrooms................................................           90
3 bedrooms or more........................................         (*)
------------------------------------------------------------------------
*104% plus (12% multiplied by the number of bedrooms in excess of 3).

    (b) For low-income, income of prospective tenants shall not exceed 
the following percentages of area median income with adjustments, 
depending on unit size:

------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                         Unit size                             median
                                                               income
------------------------------------------------------------------------
Efficiency................................................           56
1 bedroom.................................................           60
2 bedrooms................................................           72
3 bedrooms or more........................................         (*)
------------------------------------------------------------------------
*83.2% plus (9.6% multiplied by the number of bedrooms in excess of 3).

    (c) For very-low-income, income of prospective tenants shall not 
exceed the following percentages of area median income with adjustments, 
depending on unit size:

[[Page 442]]



------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                         Unit size                             median
                                                               income
------------------------------------------------------------------------
Efficiency................................................           42
1 bedroom.................................................           45
2 bedrooms................................................           54
3 bedrooms or more........................................          (*)
------------------------------------------------------------------------
*62.4% plus (7.2% multiplied by the number of bedrooms in excess of 3).

    (d) For especially-low-income, income of prospective tenants shall 
not exceed the following percentages of area median income with 
adjustments, depending on unit size:

------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                         Unit size                             median
                                                               income
------------------------------------------------------------------------
Efficiency................................................           35
1 bedroom.................................................         37.5
2 bedrooms................................................           45
3 bedrooms or more........................................         (*)
------------------------------------------------------------------------
* 52% plus (6.0% multiplied by the number of bedrooms in excess of 3).


[60 FR 61888, Dec. 1, 1995, as amended at 65 FR 65089, Oct. 31, 2000]



Sec.  81.19  Affordability--Rent level definitions--tenant income is 
not known.

    For purposes of determining whether a rental unit is affordable to 
very-low-, low-, or moderate-income families where the income of the 
family in the dwelling unit is not known to the GSE, the affordability 
of the unit is determined based on unit size as follows:
    (a) For moderate-income, maximum affordable rents to count as 
housing for moderate-income families shall not exceed the following 
percentages of area median income with adjustments, depending on unit 
size:

------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                         Unit size                             median
                                                               income
------------------------------------------------------------------------
Efficiency................................................           21
1 bedroom.................................................         22.5
2 bedrooms................................................           27
3 bedrooms or more........................................          (*)
------------------------------------------------------------------------
*31.2% plus (3.6% multiplied by the number of bedrooms in excess of 3);

    (b) For low-income, maximum affordable rents to count as housing for 
low-income families shall not exceed the following percentages of area 
median income with adjustments, depending on unit size:

------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                         Unit size                             median
                                                               income
------------------------------------------------------------------------
Efficiency................................................         16.8
1 bedroom.................................................           18
2 bedrooms................................................         21.6
3 bedrooms or more........................................          (*)
------------------------------------------------------------------------
*24.96% plus (2.88% multiplied by the number of bedrooms in excess of
  3); and

    (c) For very-low-income, maximum affordable rents to count as 
housing for very-low-income families shall not exceed the following 
percentages of area median income with adjustments, depending on unit 
size:

------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                         Unit size                             median
                                                               income
------------------------------------------------------------------------
Efficiency................................................         12.6
1 bedroom.................................................         13.5
2 bedrooms................................................         16.2
3 bedrooms or more........................................         (*)
------------------------------------------------------------------------
*18.72% plus (2.16% multiplied by the number of bedrooms in excess of
  3).

    (d) For especially-low-income, maximum affordable rents to count as 
housing for especially-low-income families shall not exceed the 
following percentages of area median income with adjustments, depending 
on unit size:

------------------------------------------------------------------------
                                                             Percentage
                                                               of area
                         Unit size                             median
                                                               income
------------------------------------------------------------------------
Efficiency................................................         10.5
1 bedroom.................................................        11.25
2 bedrooms................................................         13.5
3 bedrooms or more........................................         (*)
------------------------------------------------------------------------
* 15.6% plus (1.8% multiplied by the number of bedrooms in excess of 3).

    (e) Missing Information. Each GSE shall make every effort to obtain 
the information necessary to make the calculations in this section. If a 
GSE makes such efforts but cannot obtain data on the number of bedrooms 
in particular units, in making the calculations on such units, the units 
shall be assumed to be efficiencies except as provided in Sec.  
81.15(e)(6)(i).

[60 FR 61888, Dec. 1, 1995, as amended at 65 FR 65089, Oct. 31, 2000]



Sec.  81.20  Actions to be taken to meet the goals.

    To meet the goals under this rule, each GSE shall operate in 
accordance with 12 U.S.C. 4565.

[[Page 443]]



Sec.  81.21  Notice and determination of failure to meet goals.

    If the Secretary determines that a GSE has failed or there is a 
substantial probability that a GSE will fail to meet any housing goal, 
the Secretary shall follow the procedures at 12 U.S.C. 4566(b).



Sec.  81.22  Housing plans.

    (a) If the Secretary determines, under Sec.  81.21, that a GSE has 
failed or there is a substantial probability that a GSE will fail to 
meet any housing goal and that the achievement of the housing goal was 
or is feasible, the Secretary shall require the GSE to submit a housing 
plan for approval by the Secretary.
    (b) Nature of plan. Each housing plan shall:
    (1) Be feasible;
    (2) Be sufficiently specific to enable the Secretary to monitor 
compliance periodically;
    (3) Describe the specific actions that the GSE will take:
    (i) To achieve the goal for the next calendar year; or
    (ii) If the Secretary determines that there is substantial 
probability that the GSE will fail to meet a housing goal in the current 
year, to make such improvements as are reasonable in the remainder of 
the year; and
    (4) Address any additional matters relevant to the plan as required, 
in writing, by the Secretary.
    (c) Deadline for submission. The GSE shall submit a housing plan to 
the Secretary within 30 days after issuance of a notice under Sec.  
81.21 requiring the GSE to submit a housing plan. The Secretary may 
extend the deadline for submission of a plan, in writing and for a time 
certain, to the extent the Secretary determines an extension is 
necessary.
    (d) Review of housing plans. The Secretary shall review and approve 
or disapprove housing plans in accordance with 12 U.S.C. 4566(c)(4) and 
(5).
    (e) Resubmission. If the Secretary disapproves an initial housing 
plan submitted by a GSE, the GSE shall submit an amended plan acceptable 
to the Secretary within 30 days of the Secretary disapproving the 
initial plan; the Secretary may extend the deadline if the Secretary 
determines an extension is in the public interest. If the amended plan 
is not acceptable to the Secretary, the Secretary may afford the GSE 15 
days to submit a new plan.



                         Subpart C_Fair Housing



Sec.  81.41  General.

    In this subpart, the Secretary: prohibits discrimination by the GSEs 
in their mortgage purchases because of race, color, religion, sex, 
handicap, familial status, age, or national origin, including any 
consideration of the age or location of a dwelling or age of the 
neighborhood or census tract where the dwelling is located in a manner 
that has a discriminatory effect; requires that the GSEs submit 
information to the Secretary to assist Fair Housing Act and ECOA 
investigations; provides for advising the GSEs of Fair Housing Act and 
ECOA violations; provides for reviewing the GSEs' underwriting and 
appraisal guidelines to ensure compliance with the Fair Housing Act; and 
requires that the GSEs take actions as directed by the Secretary 
following Fair Housing Act and ECOA adjudications. Because FHEFSSA 
provides, generally, that the Director of OFHEO shall enforce violations 
by the GSEs of FHEFSSA and regulations in this subpart, this subpart 
also provides for referral of such cases to the Director.



Sec.  81.42  Prohibitions against discrimination.

    Neither GSE shall discriminate in any manner in making any mortgage 
purchases because of race, color, religion, sex, handicap, familial 
status, age, or national origin, including any consideration of the age 
or location of the dwelling or the age of the neighborhood or census 
tract where the dwelling is located in a manner that has a 
discriminatory effect.



Sec.  81.43  Reports; underwriting and appraisal guideline review.

    (a) Reports. Each GSE, in the AHAR required under Sec.  81.63, shall 
assess underwriting standards, business practices, repurchase 
requirements, pricing, fees, and procedures that affect the purchase of 
mortgages for low- and moderate-income families, or that may

[[Page 444]]

yield disparate results based on the race, color, religion, sex, 
handicap, familial status, age, or national origin of the borrower, 
including revisions thereto to promote affordable housing or fair 
lending.
    (b) Review of Underwriting and Appraisal Guidelines. The Secretary 
shall periodically review and comment on the underwriting and appraisal 
guidelines of each enterprise to ensure that such guidelines are 
consistent with the Fair Housing Act and 12 U.S.C. 4545.



Sec.  81.44  Submission of information to the Secretary.

    (a) General. Upon request from the Secretary, the GSEs shall submit 
information and data to the Secretary to assist in investigating whether 
any mortgage lender with which the GSE does business has failed to 
comply with the Fair Housing Act or ECOA.
    (b) Information requests and submissions--(1) Information requests 
by the Secretary. The Secretary may require the GSEs to submit 
information to assist in Fair Housing Act or ECOA investigations of 
lenders. Under FHEFSSA, other Federal agencies responsible for the 
enforcement of ECOA must submit requests for information from the GSEs 
through the Secretary. For matters involving only ECOA, the Secretary 
will only issue requests for information upon request from the 
appropriate Federal agency responsible for ECOA.
    (2) Information from established data systems. The Secretary may 
request that a GSE generate information or reports from its data 
system(s) to assist a Fair Housing Act or ECOA investigation.
    (3) GSE replies. A GSE receiving any request(s) for information 
under this section shall reply in a complete and timely manner with any 
and all information that it is privy to and collects that is responsive 
to the request.
    (c) Submission to ECOA enforcers. The Secretary shall submit any 
information received under paragraph (b) of this section concerning 
compliance with ECOA to appropriate Federal agencies responsible for 
ECOA enforcement, as provided in section 704 of ECOA.



Sec.  81.45  Obtaining and disseminating information.

    (a) The Secretary shall obtain information from other regulatory and 
enforcement agencies of the Federal Government and State and local 
governments regarding violations by lenders of the Fair Housing Act, 
ECOA, and/or State or local fair housing/lending laws, and shall make 
such information available to the GSEs as the Secretary deems 
appropriate in accordance with applicable law regarding the 
confidentiality of supervisory information and the right to financial 
privacy, and subject to the terms of memoranda of understanding and 
other arrangements between the Secretary and Federal financial 
regulators and other agencies. In addition, the Secretary shall make 
information that the Secretary possesses regarding violations of the 
Fair Housing Act available to the GSEs.
    (b) As contemplated in paragraph (a) of this section, the Secretary 
shall obtain information regarding violations by lenders of the Fair 
Housing Act or ECOA involving discrimination with respect to the 
availability of credit in a residential real-estate-related transaction 
from other Federal regulatory or enforcement agencies. The Secretary 
will obtain information from regulators regarding violations of ECOA by 
lenders only in circumstances in which there is either more than a 
single ECOA violation, or the ECOA violation could also be a violation 
of the Fair Housing Act.



Sec.  81.46  Remedial actions.

    (a) General. The Secretary shall direct the GSEs to take one or more 
remedial actions, including suspension, probation, reprimand or 
settlement, against lenders found to have engaged in discriminatory 
lending practices in violation of the Fair Housing Act or ECOA, pursuant 
to a final adjudication on the record and an opportunity for a hearing 
under subchapter II of chapter 5 of title 5, United States Code.
    (b) Definitions. For purposes of this subpart, the following 
definitions apply:
    Indefinite suspension means that, until directed to do otherwise by 
the Secretary, the GSEs will refrain from purchasing mortgages from a 
lender.

[[Page 445]]

    Probation means that, for a fixed period of time specified by the 
Secretary, a lender that has been found to have violated the Fair 
Housing Act or ECOA will be subject automatically to more severe 
sanctions than probation, e.g., suspension, if further violations are 
found.
    Remedial action includes a reprimand, probation, temporary 
suspension, indefinite suspension, or settlement.
    Reprimand means a written letter to a lender from a GSE, which has 
been directed to be sent by the Secretary, stating that the lender has 
violated the Fair Housing Act or ECOA and warning of the possibility 
that the Secretary may impose more severe remedial actions than 
reprimand if any further violation occurs.
    Temporary Suspension means that, for a fixed period of time 
specified by the Secretary, the GSEs will not purchase mortgages from a 
lender.
    (c) Institution of remedial actions. (1) The Secretary shall direct 
the GSE to take remedial action(s) against a lender charged with 
violating ECOA only after a final determination on the charge has been 
made by an appropriate United States District Court or any other court 
of competent jurisdiction. The Secretary shall direct the GSE to take 
remedial action(s) against a lender charged with violating the Fair 
Housing Act only after a final determination on the matter has been made 
by a United States Court, a HUD Administrative Law Judge, or the 
Secretary.
    (2) Following a final determination sustaining a charge against a 
lender for violating the Fair Housing Act or ECOA, in accordance with 
paragraph (c)(1) of this section, the Secretary shall determine the 
remedial action(s) that the GSE is to be directed to take for such 
violation.
    (3) In determining the appropriate remedial action(s), the Secretary 
shall solicit and fully consider the views of the Federal financial 
regulator responsible for the subject lender concerning the action(s) 
that are contemplated to be directed against such lender, prior to 
directing any such action(s). If such responsible Federal financial 
regulator makes a written determination that a particular remedial 
action would threaten the financial safety and soundness of a Federally-
insured lender, the Secretary shall consider other remedial actions. 
Where warranted, the Secretary also shall solicit and fully consider the 
views of the Director regarding the effect of the action(s) that are 
contemplated on the safety and soundness of the GSE. In determining what 
action(s) to direct, the Secretary will also, without limitation, 
consider the following:
    (i) The gravity of the violation;
    (ii) The extent to which other action has been taken against the 
lender for discriminatory activities;
    (iii) Whether the lender's actions demonstrate a discriminatory 
pattern or practice or an individual instance of discrimination;
    (iv) The impact or seriousness of the harm;
    (v) The number of people affected by the discriminatory act(s);
    (vi) Whether the lender operates an effective program of self 
assessment and correction;
    (vii) The extent of any actions or programs by the lender designed 
to compensate victims and prevent future fair lending violations;
    (viii) The extent that a finding of liability against a lender is 
based on a lender's use of a facially-neutral underwriting guideline of 
a secondary mortgage market entity applied appropriately by the lender 
in order to sell loans to that secondary mortgage market entity; and
    (ix) Any other information deemed relevant by the Secretary.
    (d) Notice of remedial action(s). (1) Following the Secretary's 
decision concerning the appropriate remedial action(s) that the GSE is 
to be directed to take, the Secretary shall prepare and issue to the GSE 
and the lender a written notice setting forth the remedial action(s) to 
be taken and the date such remedial action(s) are to commence. The 
Notice shall inform the lender of its right to request a hearing on the 
appropriateness of the proposed remedial action(s), within 20 days of 
service of the Notice, by filing a request with the Docket Clerk, HUD 
Office of Administrative Law Judges.
    (2) Where a lender does not timely request a hearing on a remedial 
action,

[[Page 446]]

the GSE shall take the action in accordance with the Notice.
    (e) Review and decision on remedial action(s). (1) Where a lender 
timely requests a hearing on a remedial action, a hearing shall be 
conducted before a HUD administrative law judge (ALJ) and a final 
decision rendered in accordance with the procedures set forth in 24 CFR 
part 26, subpart B, to the extent such provisions are not inconsistent 
with subpart C of this part or FHEFSSA. The lender and the Secretary, 
but not the GSE, shall be parties to the action. At such hearing, the 
appropriateness of the remedial action for the violation(s) will be the 
sole matter for review. The validity or appropriateness of the 
underlying determination on the violation(s) shall not be subject to 
review at such hearing.
    (2) The Secretary shall transmit to the GSEs each final decision by 
HUD on a remedial action and any dispositive settlement of a proceeding 
on such action.
    (3) The GSE shall take the action(s) set forth in a final decision 
by HUD on remedial action(s) or any dispositive settlement of such a 
proceeding setting forth remedial action(s) in accordance with such 
decision or settlement.

[60 FR 61888, Dec. 1, 1995, as amended at 61 FR 50218, Sept. 24, 1996]



Sec.  81.47  Violations of provisions by the GSEs.

    (a) FHEFSSA empowers the Director of OFHEO to initiate enforcement 
actions for GSE violations of the provisions of section 1325 of FHEFSSA 
and these regulations. The Secretary shall refer violations and 
potential violations of 12 U.S.C. 4545 and this subpart C to the 
Director.
    (b) Where a private complainant or the Secretary is also proceeding 
against a GSE under the Fair Housing Act, the Assistant Secretary for 
Fair Housing and Equal Opportunity shall conduct the investigation of 
the complaint and make the reasonable cause/no reasonable cause 
determination required by section 810(g) of the Fair Housing Act. Where 
reasonable cause is found, a charge shall be issued and the matter will 
proceed to enforcement pursuant to sections 812(b) and (o) of the Fair 
Housing Act.



                     Subpart D_New Program Approval



Sec.  81.51  General.

    This subpart details the requirements and procedures for review of 
requests for new program approval by the Secretary.



Sec.  81.52  Requirement for program requests.

    (a) Before implementing a new program, a GSE shall submit a request 
for new program approval (``program request'') to the Secretary for the 
Secretary's review. Submission of a program request is not required 
where the program that the GSE proposes to implement is not 
significantly different from:
    (1) A program that has already been approved in writing by the 
Secretary; or
    (2) A program that was engaged in by the GSE prior to October 28, 
1992.
    (b) If a GSE does not submit a program request for a program, the 
Secretary may request information about the program and require that the 
GSE submit a program request. The GSE shall comply with the request and 
may indicate in such response its views respecting whether the program 
is subject to the Secretary's review.



Sec.  81.53  Processing of program requests.

    (a) Each program request submitted to the Secretary by a GSE shall 
be in writing and shall be submitted to the Secretary and the Director, 
Office of Government-Sponsored Enterprises, Department of Housing and 
Urban Development, Washington, DC. For those requests submitted before 1 
year after the effective date of the regulations issued by the Director 
of OFHEO under 12 U.S.C. 4611(e), the GSE shall simultaneously submit 
the program request to the Director.
    (b) Each program request shall include:
    (1) An opinion from counsel stating the statutory authority for the 
new program (Freddie Mac Act section 305(a) (1), (4), or (5), or Fannie 
Mae Charter Act section 302(b)(2)-(5) or 304);

[[Page 447]]

    (2) A good-faith estimate of the anticipated dollar volume of the 
program over the short- and long-term;
    (3) A full description of: (i) The purpose and operation of the 
proposed program;
    (ii) The market targeted by the program;
    (iii) The delivery system for the program;
    (iv) The effect of the program on the mortgage market; and
    (v) Material relevant to the public interest.
    (c) Following receipt of a program request, the Secretary and, where 
a program request is submitted to the Director pursuant to paragraph (a) 
of this section, the Director shall review the program request.
    (d) Transition standard for approval. Program requests submitted by 
the GSEs before the date occurring 1 year after the effective date of 
the regulations issued by the Director under 12 U.S.C. 4611(e) shall be 
approved or disapproved by the Secretary as provided in 12 U.S.C. 
4542(b)(2).
    (e) Permanent standard for approval by the Secretary. Program 
requests submitted after the date occurring one year after the effective 
date of the regulations issued by the Director under 12 U.S.C. 4611(e) 
establishing the risk-based capital test shall be approved by the 
Secretary in accordance with 12 U.S.C. 4542(b)(1).
    (f) Time for review. Unless the Secretary and, where appropriate, 
the Director of OFHEO, need additional information, a program request 
shall be approved or disapproved within 45 days from the date it is 
received by the Director, Office of Government-Sponsored Enterprises, 
and, where applicable, the Director of OFHEO. If within 45 days after 
receiving a request, the Secretary or the Director of OFHEO determine 
that additional information is necessary to review the matter and 
request such information from the GSE, the Secretary may extend the time 
period for consideration for an additional 15 days.
    (1) Where additional information is requested, the GSE must provide 
the requested information to the Secretary and, where appropriate, the 
Director, within 10 days after the request for additional information.
    (2) If the GSE fails to furnish requested information within 10 days 
after the request for information, the Secretary may deny the GSE's 
request for approval based on such failure and so report to the 
Committees of Congress in accordance with paragraph (g) of this section.
    (g) Approval or report. Within 45 days or, if the period is 
extended, 60 days following receipt of a program request, the Secretary 
shall approve the request, in writing, or submit a report to the 
Committee on Banking and Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban Affairs 
of the Senate, explaining the reasons for not approving the request. If 
the Secretary does not act within this time period, the GSE's program 
request will be deemed approved.



Sec.  81.54  Review of disapproval.

    (a) Programs disapproved as unauthorized. (1) Where the Secretary 
disapproves a program request on the grounds that the new program is not 
authorized, as defined in Sec.  81.53(d) or (e), the GSE may, within 30 
days of the date of receipt of the decision on disapproval, request an 
opportunity to review and supplement the administrative record for the 
decision, in accordance with paragraphs (a) (2) and (3) of this section.
    (2) Supplementing in writing. A GSE supplementing the record in 
writing must submit written materials within 30 days after the date of 
receipt of the decision on disapproval, but no later than the date of a 
meeting, if requested, under paragraph (a)(3) of this section.
    (3) Meeting. Within 10 days of the date of receipt of the decision 
of disapproval, the GSE may request a meeting. If the request for the 
meeting is timely, the Secretary shall arrange such a meeting, which 
shall be conducted by the Secretary or the Secretary's designee within 
10 working days after receipt of the request. The GSE may be represented 
by counsel and may submit relevant written materials to supplement the 
record.

[[Page 448]]

    (4) Determination. The Secretary shall:
    (i) In writing and within 10 days after submission of any materials 
under paragraph (a)(2) of this section or the conclusion of any meeting 
under paragraph (a)(3) of this section, whichever is later, withdraw, 
modify, or affirm the program disapproval; and
    (ii) Provide the GSE with that decision.
    (b) Programs disapproved under public interest determination. When a 
program request is disapproved because the Secretary determines that the 
program is not in the public interest or the Director makes the 
determination in 12 U.S.C. 4542(b)(2)(B), the Secretary shall provide 
the GSE with notice of, and opportunity for, a hearing on the record 
regarding such disapproval. A request for a hearing must be submitted by 
a GSE within 30 days of the Secretary's submission of a report under 
Sec.  81.53(g) disapproving a program request or the provision of the 
notice under this paragraph (b), whichever is later. The procedures for 
such hearings are provided in subpart G of this part.



                    Subpart E_Reporting Requirements



Sec.  81.61  General.

    This subpart establishes data submission and reporting requirements 
to carry out the requirements of the GSEs' Charter Acts and FHEFSSA.



Sec.  81.62  Mortgage reports.

    (a) Loan-level data elements. To implement the data collection and 
submission requirements for mortgage data and to assist the Secretary in 
monitoring the GSEs' housing goal activities, each GSE shall collect and 
compile computerized loan-level data on each mortgage purchased in 
accordance with 12 U.S.C. 1456(e) and 1723a(m). The Secretary may, from 
time-to-time, issue a list entitled ``Required Loan-level Data 
Elements'' specifying the loan-level data elements to be collected and 
maintained by the GSEs and provided to the Secretary. The Secretary may 
revise the list by written notice to the GSEs.
    (b) Quarterly Mortgage reports. Each GSE shall submit to the 
Secretary quarterly a Mortgage Report. The fourth quarter report shall 
serve as the Annual Mortgage Report and shall be designated as such.
    (1) Each Mortgage Report shall include:
    (i) Aggregations of the loan-level mortgage data compiled by the GSE 
under paragraph (a) of this section for year-to-date mortgage purchases, 
in the format specified in writing by the Secretary; and
    (ii) Year-to-date dollar volume, number of units, and number of 
mortgages on owner-occupied and rental properties purchased by the GSE 
that do and do not qualify under each housing goal as set forth in this 
part.
    (2) To facilitate the Secretary's monitoring of the GSE's housing 
goal activities, the Mortgage Report for the second quarter shall 
include year-to-date computerized loan-level data consisting of the data 
elements required under paragraph (a) of this section.
    (3) To implement the data collection and submission requirements for 
mortgage data and to assist the Secretary in monitoring the GSE's 
housing goal activities, each Annual Mortgage Report shall include year-
to-date computerized loan-level data consisting of the data elements 
required by under paragraph (a) of this section.
    (c) Timing of Reports. The GSEs shall submit the Mortgage Report for 
each of the first 3 quarters of each year within 60 days of the end of 
the quarter. Each GSE shall submit its Annual Mortgage Report within 75 
days after the end of the calendar year.
    (d) Revisions to Reports. At any time before submission of its 
Annual Mortgage Report, a GSE may revise any of its quarterly reports 
for that year.
    (e) Format. The GSEs shall submit to the Secretary computerized 
loan-level data with the Mortgage Report, in the format specified in 
writing by the Secretary.



Sec.  81.63  Annual Housing Activities Report.

    To comply with the requirements in sections 309(n) of the Fannie Mae 
Charter Act and 307(f) of the Freddie Mac Act and assist the Secretary 
in preparing the Secretary's Annual Report to Congress, each GSE shall 
submit to

[[Page 449]]

the Secretary an AHAR including the information listed in those sections 
of the Charter Acts and as provided in Sec.  81.43(a) of this part. Each 
GSE shall submit such report within 75 days after the end of each 
calendar year, to the Secretary the Committee on Banking and Financial 
Services of the House of Representatives, and the Committee on Banking, 
Housing, and Urban Affairs of the Senate. Each GSE shall make its AHAR 
available to the public at its principal and regional offices. Before 
making any such report available to the public, the GSE may exclude from 
the report any information that the Secretary has deemed proprietary 
under subpart F of this part.



Sec.  81.64  Periodic reports.

    Each GSE shall provide to the Secretary all:
    (a) Material distributed to the GSE's Housing Advisory Council;
    (b) Press releases;
    (c) Investor reports;
    (d) Proxy statements;
    (e) Seller-servicer guides; and
    (f) Other information disclosed by the GSE to entities outside of 
the GSE, but only where the GSE determines that such information is 
relevant to the Secretary's regulatory responsibilities.



Sec.  81.65  Other information and analyses.

    When deemed appropriate and requested in writing, on a case by-case 
basis, by the Secretary, a GSE shall furnish the data underlying any of 
the reports required under this part and shall conduct additional 
analyses concerning any such report. A GSE shall submit additional 
reports or other information concerning its activities when deemed 
appropriate to carry out the Secretary's responsibilities under FHEFSSA 
or the Charter Acts and requested in writing by the Secretary.



Sec.  81.66  Submission of reports.

    Each GSE shall submit all hard copy reports or other written 
information required under this subpart to the Secretary and the 
Director, Office of Government-Sponsored Enterprises. Each GSE shall 
submit computerized data required under this subpart to the Director, 
Financial Institutions Regulations, Office of Policy Development and 
Research. The address for both of these offices is Department of Housing 
and Urban Development, 451 7th Street, SW. Washington, DC 20410.



                     Subpart F_Access to Information



Sec.  81.71  General.

    This subpart:
    (a) Provides for the establishment of a public-use database to make 
available to the public mortgage data that the GSEs submit to the 
Secretary under subsection 309(m) of the Fannie Mae Charter Act and 
subsection 307(e) of the Freddie Mac Act, and AHAR information that the 
GSEs submit to the Secretary in the AHAR under subsection 309(n) of the 
Fannie Mae Charter Act and subsection 307(f) of the Freddie Mac Act;
    (b) Establishes mechanisms for the GSEs to designate mortgage data 
or AHAR information as proprietary information and for the Secretary to 
determine whether such mortgage data or AHAR information is proprietary 
information which should be withheld from disclosure;
    (c) Addresses the availability of HUD procedures to protect from 
public disclosure proprietary information and other types of 
confidential business information submitted by or relating to the GSEs;
    (d) Addresses protections from disclosure when there is a request 
from Congress for information and sets forth protections for treatment 
of data or information submitted by or relating to the GSEs by HUD 
officers, employees, and contractors; and
    (e) Provides that data or information submitted by or relating to 
the GSEs that would constitute a clearly unwarranted invasion of 
personal privacy shall not be disclosed to the public.



Sec.  81.72  Public-use database and public information.

    (a) General. Except as provided in paragraph (c) of this section, 
the Secretary shall establish and make available for public use, a 
public-use database containing public data as defined in Sec.  81.2.
    (b) Examination of submissions. Following receipt of mortgage data 
and

[[Page 450]]

AHAR information from the GSEs, the Secretary shall, as expeditiously as 
possible, examine the submissions for mortgage data and AHAR information 
that:
    (1) Has been deemed to be proprietary information under this part by 
a temporary order, final order, or regulation in effect at the time of 
submission;
    (2) Has been designated as proprietary information by the GSE in 
accordance with Sec.  81.73;
    (3) Would constitute a clearly unwarranted invasion of personal 
privacy if such data or information were released to the public; or
    (4) Is required to be withheld or, in the determination of the 
Secretary, is not appropriate for public disclosure under other 
applicable laws and regulations, including the Trade Secrets Act (18 
U.S.C. 1905) and Executive Order 12600.
    (c) Public data and proprietary data. The Secretary shall place 
public data in the public-use database. The Secretary shall exclude from 
the public-use database and from public disclosure:
    (1) All mortgage data and AHAR information within the scope of 
paragraphs (b)(1), (b)(3), and (b)(4) of this section;
    (2) Any other mortgage data and AHAR information under (b)(2) when 
determined by the Secretary under Sec.  81.74 to be proprietary 
information; and
    (3) Mortgage data that is not year-end data.
    (d) Access. The Secretary shall provide such means as the Secretary 
determines are reasonable for the public to gain access to the public-
use database. To obtain access to the public-use database, the public 
should contact the Director, Office of Government-Sponsored Enterprises, 
Department of Housing and Urban Development, 451 Seventh Street, S.W., 
Washington, DC 20410, telephone (202) 708-2224 (this is not a toll-free 
number).
    (e) Fees. The Secretary may charge reasonable fees to cover the cost 
of providing access to the public-use database. These fees will include 
the costs of system access, computer use, copying fees, and other costs.



Sec.  81.73  GSE request for proprietary treatment.

    (a) General. A GSE may request proprietary treatment of any mortgage 
data or AHAR information that the GSE submits to the Secretary. Such a 
request does not affect the GSE's responsibility to provide data or 
information required by the Secretary. Where the Secretary grants a 
request for proprietary treatment, HUD will not include the data or 
information in the public-use database or publicly disclose the data or 
information, except as otherwise provided in accordance with this 
subpart.
    (b) Request for proprietary treatment of mortgage data and AHAR 
information. Except as provided in paragraph (c) of this section, a GSE 
requesting proprietary treatment of mortgage data or AHAR information 
shall:
    (1) Clearly designate those portions of the mortgage data or AHAR 
information to be treated as proprietary, with a prominent stamp, typed 
legend, or other suitable form of notice, stating ``Proprietary 
Information--Confidential Treatment Requested by [name of GSE]'' on each 
page or portion of page to which the request applies. If such marking is 
impractical, the GSE shall attach to the mortgage data or information 
for which confidential treatment is requested a cover sheet prominently 
marked ``Proprietary Information--Confidential Treatment Requested by 
[name of GSE];''
    (2) Accompany its request with a certification by an officer or 
authorized representative of the GSE that the mortgage data or 
information is proprietary; and
    (3) Submit any additional statements in support of proprietary 
designation that the GSE chooses to provide.
    (c) Alternative procedure available for mortgage data or AHAR 
information subject to a temporary order, final order, or regulation in 
effect. When the request for proprietary treatment pertains to mortgage 
data or AHAR information that has been deemed proprietary by the 
Secretary under a temporary order, final order, or regulation in effect, 
the GSE may reference such temporary order, final order, or regulation 
in lieu of complying with paragraphs (b)(2) and (3) of this section.

[[Page 451]]

    (d) Nondisclosure during pendency. Except as may otherwise be 
required by law, during the time any Request for Proprietary Treatment 
under Sec.  81.73 is pending determination by the Secretary, the data or 
information submitted by the GSE that is the subject of the request 
shall not be disclosed to, or be subject to examination by, the public 
or any person or representative of any person or agency outside of HUD.



Sec.  81.74  Secretarial determination on GSE request.

    (a) General. The Secretary shall review all Requests for Proprietary 
Treatment from the GSEs, along with any other information that the 
Secretary may elicit from other sources regarding the Request.
    (b) Factors for proprietary treatment. Except as provided in 
paragraph (c) of this section, in making the determination of whether to 
accord proprietary treatment to mortgage data or AHAR information, the 
Secretary's considerations shall include, but are not limited to:
    (1) The type of data or information involved and the nature of the 
adverse consequences to the GSE, financial or otherwise, that would 
result from disclosure, including any adverse effect on the GSE's 
competitive position;
    (2) The existence and applicability of any prior determinations by 
HUD, any other Federal agency, or a court, concerning similar data or 
information;
    (3) The measures taken by the GSE to protect the confidentiality of 
the mortgage data or AHAR information in question, and similar data or 
information, before and after its submission to the Secretary;
    (4) The extent to which the mortgage data or AHAR information is 
publicly available including whether the data or information is 
available from other entities, from local government offices or records, 
including deeds, recorded mortgages, and similar documents, or from 
publicly available data bases;
    (5) The difficulty that a competitor, including a seller/servicer, 
would face in obtaining or compiling the mortgage data or AHAR 
information; and
    (6) Such additional facts and legal and other authorities as the 
Secretary may consider appropriate, including the age of the mortgage 
data (see 24 CFR 81.75(b)(3)), or the extent to which particular 
mortgage data or AHAR information, when considered together with other 
information, could reveal proprietary information.
    (c) Alternative criterion for mortgage data or AHAR information 
subject to a temporary order, final order, or regulation in effect. 
Where the request for proprietary treatment pertains to mortgage data or 
AHAR information that has been deemed proprietary by the Secretary under 
a temporary order, final order, or regulation in effect, the Secretary 
shall grant the request with respect to any mortgage data or AHAR 
information which comes within the order or regulation.
    (d) Determination of proprietary treatment. The Secretary shall 
determine, as expeditiously as possible, whether mortgage data or AHAR 
information designated as proprietary by a GSE is proprietary 
information, or whether it is not proprietary and subject to inclusion 
in the public-use database and public release notwithstanding the GSE's 
request.
    (e) Action when according proprietary treatment to mortgage data and 
AHAR information. (1) When the Secretary determines that mortgage data 
or AHAR information designated as proprietary by a GSE is proprietary, 
and the mortgage data or AHAR information is not subject to a temporary 
order, a final order, or a regulation in effect providing that the 
mortgage data or AHAR information is not subject to public disclosure, 
the Secretary shall notify the GSE that the request has been granted. In 
such cases, the Secretary shall issue either a temporary order, a final 
order, or a regulation providing that the mortgage data or information 
is not subject to public disclosure. Such a temporary order, final 
order, or regulation shall:
    (i) Document the reasons for the determination; and
    (ii) Be provided to the GSE, made available to members of the 
public, and published in the Federal Register, except that any portions 
of such order or regulation that would reveal the

[[Page 452]]

proprietary information shall be withheld from public disclosure. 
Publications of temporary orders shall invite public comments when 
feasible.
    (2) Where the Secretary determines that such mortgage data or 
information is proprietary, the Secretary shall not make it publicly 
available, except as otherwise provided in accordance with this subpart.
    (f) Determination not to accord proprietary treatment to mortgage 
data and AHAR information or to seek further information. When the 
Secretary determines that such mortgage data or AHAR information 
designated as proprietary by a GSE may not be proprietary, that the 
request may be granted only in part, or that questions exist concerning 
the request, the following procedure shall apply:
    (1) The Secretary shall provide the GSE with an opportunity for a 
meeting with HUD to discuss the matter, for the purpose of gaining 
additional information concerning the request.
    (2) Following the meeting, based on the Secretary's review of the 
mortgage data or AHAR information that is the subject of a request and 
the GSE's objections, if any, to disclosure of such mortgage data or 
AHAR information, the Secretary shall make a determination:
    (i) If the Secretary determines to withhold from the public-use 
database as proprietary the mortgage data or AHAR information that is 
the subject of a request, the procedures in paragraph (e) of this 
section shall apply; or
    (ii) If the Secretary determines that any mortgage data or AHAR 
information that is the subject of a request is not proprietary, the 
Secretary shall provide notice in writing to the GSE of the reasons for 
this determination, and such notice shall provide that the Secretary 
shall not release the mortgage data or AHAR information to the public 
for 10 working days.

[60 FR 61888, Dec. 1, 1995, as amended at 70 FR 69031, Nov. 10, 2005]



Sec.  81.75  Proprietary information withheld by order or regulation.

    (a) Secretarial determination of proprietary classification. 
Following a determination by the Secretary that mortgage data or AHAR 
information are proprietary information under FHEFSSA, the Secretary 
shall expeditiously issue a temporary order, final order, or regulation 
withholding the mortgage data or AHAR information from the public-use 
database and from public disclosure by HUD in accordance with 12 U.S.C. 
4546. The Secretary may, from time to time, by regulation or order, 
issue a list providing that certain mortgage data or AHAR information 
shall be treated as proprietary information.
    (b) Modification of proprietary classification--(1) General. The 
Secretary may, based upon a consideration of the factors in Sec.  
81.74(b), modify a previous determination that mortgage data or AHAR 
information are proprietary information (and may also make conforming 
changes to the list designating certain mortgage data or AHAR 
information as proprietary information) by regulation, or by order using 
the procedures described in paragraph (d) of this section, as 
applicable.
    (2) Release of data following a modification of proprietary 
classification. Following the Secretary's determination under paragraph 
(b)(1) of this section to modify a previous proprietary determination by 
reclassifying certain mortgage data as non-proprietary, the Secretary 
shall release the reclassified, non-proprietary mortgage data to the 
public both prospectively and for all prior years' public use databases, 
unless otherwise provided by the Secretary.
    (3) Release of aged data. The Secretary may determine, through case-
by-case consideration of individual data elements under paragraph (b)(1) 
of this section, that certain mortgage data previously determined to be 
proprietary may lose their proprietary status if they are at least five 
years old (as measured from the end of the calendar year to which the 
mortgage data pertain). The Secretary will evaluate the age of the data 
as one of the relevant factors that may be considered under 24 CFR 
81.74(b)(6). If the Secretary determines that such aged mortgage data 
have lost their proprietary status, these data shall be released 
publicly.
    (c) Release of aggregated data derived from proprietary loan-level 
data. The

[[Page 453]]

Secretary may, based upon a consideration of the factors in Sec.  
81.74(b) and using the procedures in paragraph (d) of this section, 
determine that certain aggregated data derived from proprietary loan-
level mortgage data are not proprietary. If the Secretary makes such a 
determination, then the aggregated data shall be released to the public 
both prospectively and for all prior years, unless otherwise provided by 
the Secretary.
    (d) Procedures. The following procedures apply to the Secretary's 
issuance of an order in connection with a determination under paragraph 
(b)(1) or (c) of this section:
    (1) The Secretary shall provide each GSE with written notice of the 
mortgage data, AHAR information or aggregated data proposed to be 
released, and an opportunity to submit written comments. The Secretary 
may also provide each GSE with an opportunity for a meeting with HUD to 
discuss the proposed release of mortgage data, AHAR information, or 
aggregated data;
    (2) The Secretary shall make a determination regarding the proposed 
release of the GSE mortgage data, AHAR information, or aggregated data 
based upon a consideration of the data or information under the 
standards set forth in 24 CFR 81.74(b) and the GSEs' written and oral 
objections, if any, to the proposed release of such mortgage data, AHAR 
information, or aggregated data;
    (3) The Secretary shall provide notice in writing to each GSE of the 
Secretary's determination and the reasons under Sec.  81.74(b) for his 
or her determination. If the Secretary determines that the mortgage 
data, AHAR information, or aggregated data may be released, the notice 
will also provide that the Secretary shall not release the mortgage 
data, AHAR information, or aggregated data to the public for 10 working 
days;
    (4) The Secretary shall, no earlier than the end of the ten-working-
day period referred to in paragraph (d)(3) of this section, publish an 
order in the Federal Register notifying the public of the Secretary's 
determination to release the mortgage data or AHAR information that has 
been reclassified as non-proprietary and/or to release certain non-
proprietary aggregations of data derived from proprietary loan-level 
mortgage data. The order will also modify the list described in 
paragraph (a) of this section to reflect the Secretary's 
reclassification of the mortgage data or AHAR information. The Secretary 
shall omit from the published order any information that would reveal 
proprietary information.

[70 FR 69031, Nov. 10, 2005]



Sec.  81.76  FOIA requests and protection of GSE information.

    (a) General. HUD shall process FOIA requests for information 
submitted to the Secretary by the GSEs in accordance with:
    (1) HUD's FOIA and Privacy Act regulations, 24 CFR parts 15 and 16;
    (2) 12 U.S.C. 4525, 4543, and 4546 and this subpart; and
    (3) Other applicable statutes, regulations, and guidelines, 
including the Trade Secrets Act, 18 U.S.C. 1905, and Executive Order 
12600. In responding to requests for data or information submitted by or 
relating to the GSEs, the Secretary may invoke provisions of these 
authorities to protect data or information from disclosure.
    (b) Protection of confidential business information other than 
mortgage data and AHAR information. When a GSE seeks to protect from 
disclosure confidential business information, the GSE may seek 
protection of such confidential business information pursuant to the 
provisions of HUD's FOIA regulations at 24 CFR part 15, without regard 
to whether or not it is mortgage data or AHAR information.
    (c) Processing of FOIA requests--(1) FOIA Exemption (b)(4). HUD will 
process FOIA requests for confidential business information of the GSEs 
to which FOIA exemption 4 may apply in accordance with 24 CFR part 15, 
and the predisclosure notification procedures of Executive Order 12,600.
    (2) FOIA Exemption (b)(8). Under section 1319F of FHEFSSA, the 
Secretary may invoke FOIA exemption (b)(8) to withhold from the public 
any GSE data or information contained in or related to examination, 
operating, or condition reports prepared by, on behalf of, or for the 
use of HUD. HUD may make data

[[Page 454]]

or information available for the confidential use of other government 
agencies in their official duties or functions, but all data or 
information remains the property of HUD and any unauthorized use or 
disclosure of such data or information may be subject to the penalties 
of 18 U.S.C. 641.
    (3) Other FOIA exemptions. Under 24 CFR part 15, the Secretary may 
invoke other exemptions including, without limitation, exemption (b)(6) 
(5 U.S.C. 552(b)(6)), to protect data and information that would 
constitute a clearly unwarranted invasion of personal privacy.
    (d) Protection of information by HUD officers and employees. The 
Secretary will institute all reasonable safeguards to protect data or 
information submitted by or relating to either GSE, including, but not 
limited to, advising all HUD officers and employees having access to 
data or information submitted by or relating to either GSE of the legal 
restrictions against unauthorized disclosure of such data or information 
under the executive branch-wide standards of ethical conduct, 5 CFR part 
2635, and the Trade Secrets Act, 18 U.S.C. 1905. Officers and employees 
shall be advised of the penalties for unauthorized disclosure, ranging 
from disciplinary action under 5 CFR part 2635 to criminal prosecution.
    (e) Protection of information by contractors. (1) In contracts and 
agreements entered into by HUD where contractors have access to data or 
information submitted by or relating to either GSE, HUD shall include 
detailed provisions specifying that:
    (i) Neither the contractor nor any of its officers, employees, 
agents, or subcontractors may release data submitted by or relating to 
either GSE without HUD's authorization; and
    (ii) Unauthorized disclosure may be a basis for:
    (A) Terminating the contract for default;
    (B) Suspending or debarring the contractor; and
    (C) Criminal prosecution of the contractor, its officers, employees, 
agents, or subcontractors under the Federal Criminal Code.
    (2) Contract provisions shall require safeguards against 
unauthorized disclosure, including training of contractor and 
subcontractor agents and employees, and provide that the contractor will 
indemnify and hold HUD harmless against unauthorized disclosure of data 
or information belonging to the GSEs or HUD.

[60 FR 61888, Dec. 1, 1995, as amended at 65 FR 65089, Oct. 31, 2000]



Sec.  81.77  Requests for GSE information on behalf of Congress, the
Comptroller General, a subpoena, or other legal process.

    (a) General. With respect to information submitted by or relating to 
the GSEs, nothing in this subpart F may be construed to grant authority 
to the Secretary under FHEFSSA to withhold any information from or to 
prohibit the disclosure of any information to the following persons or 
entities:
    (1) Either House of Congress or, to the extent of matters within its 
jurisdiction, any committee or subcommittee thereof, or any joint 
committee of Congress or subcommittee of any such joint committee;
    (2) The Comptroller General, or any of the Comptroller General's 
authorized representatives, in the course of the performance of the 
duties of the General Accounting Office;
    (3) A court of competent jurisdiction pursuant to a subpoena; or
    (4) As otherwise compelled by law.
    (b) Notice of proprietary or confidential nature of GSE information. 
(1) In releasing data or information in response to a request as set out 
in paragraph (a) of this section, the Secretary will, where applicable, 
include a statement with the data or information to the effect that:
    (i) The GSE regards the data or information as proprietary 
information and/or confidential business information;
    (ii) Public disclosure of the data or information may cause 
competitive harm to the GSE; and
    (iii) The Secretary has determined that the data or information is 
proprietary information and/or confidential business information.
    (2) To the extent practicable, the Secretary will provide notice to 
the GSE after a request from the persons or entities described in 
paragraphs (a)(1)-(4) of this section for proprietary

[[Page 455]]

information or confidential business information is received and before 
the data or information is provided in response to the request.
    (c) Procedures for requests pursuant to subpoena or other legal 
process. The procedures in 24 CFR 15.71-15.74 shall be followed when a 
subpoena, order, or other demand of a court or other authority is issued 
for the production or disclosure of any GSE data or information that:
    (1) Is contained in HUD's files;
    (2) Relates to material contained in HUD's files; or
    (3) Was acquired by any person while such person was an employee of 
HUD, as a part of the performance of the employee's official duties or 
because of the employee's official status.
    (d) Requests pursuant to subpoena or other legal process not served 
on HUD. If an individual who is not a HUD employee or an entity other 
than HUD is served with a subpoena, order, or other demand of a court or 
authority for the production or disclosure of HUD data or information 
relating to a GSE and such data or information may not be disclosed to 
the public under this subpart or 24 CFR part 15, such individual or 
entity shall comply with 24 CFR 15.71-15.74 as if the individual or 
entity is a HUD employee, including immediately notifying HUD in 
accordance with the procedures set forth in 24 CFR 15.73(a).
    (e) Reservation of additional actions. Nothing in this section 
precludes further action by the Secretary, in his or her discretion, to 
protect data or information submitted by a GSE from unwarranted 
disclosure in appropriate circumstances.



         Subpart G_Procedures for Actions and Review of Actions



Sec.  81.81  General.

    This subpart sets forth procedures for:
    (a) The Secretary to issue cease-and-desist orders and impose civil 
money penalties to enforce the housing goal provisions implemented in 
subpart B of this part and the information submission and reporting 
requirements implemented in subpart E of this part; and
    (b) Hearings, in accordance with 12 U.S.C. 4542(c)(4)(B), on the 
Secretary's disapproval of new programs that the Secretary determines 
are not in the public interest.



Sec.  81.82  Cease-and-desist proceedings.

    (a) Issuance. The Secretary may issue and serve upon a GSE a written 
notice of charges justifying issuance of a cease-and-desist order, if 
the Secretary determines the GSE:
    (1) Has failed to submit, within the time prescribed in Sec.  81.22, 
a housing plan that substantially complies with 12 U.S.C. 4566(c), as 
implemented by Sec.  81.22;
    (2) Is failing or has failed, or there is reasonable cause to 
believe that the GSE is about to fail, to make a good-faith effort to 
comply with a housing plan submitted to and approved by the Secretary; 
or
    (3) Has failed to submit any of the information required under 
sections 309(m) or (n) of the Fannie Mae Charter Act, sections 307(e) or 
(f) of the Freddie Mac Act, or subpart E of this part.
    (b) Procedures--(1) Content of notice. The notice of charges shall 
provide:
    (i) A concise statement of the facts constituting the alleged 
misconduct and the violations with which the GSE is charged;
    (ii) Notice of the GSE's right to a hearing on the record;
    (iii) A time and date for a hearing on the record;
    (iv) A statement of the consequences of failing to contest the 
matter; and
    (v) The effective date of the order if the GSE does not contest the 
matter.
    (2) Administrative Law Judge. A HUD Administrative Law Judge (ALJ) 
shall preside over any hearing conducted under this section. The hearing 
shall be conducted in accordance with Sec.  81.84 and, to the extent the 
provisions are not inconsistent with any of the procedures in this part 
or FHEFSSA, with 24 CFR part 26, subpart B.
    (3) Issuance of order. If the GSE consents to the issuance of the 
order or the ALJ finds, based on the hearing record, that a 
preponderance of the evidence established the conduct specified in the 
notice of charges, the ALJ may issue and serve upon the GSE an order 
requiring the GSE to:

[[Page 456]]

    (i) Submit a housing plan that substantially complies with 12 U.S.C. 
4566(c), as implemented by Sec.  81.22;
    (ii) Comply with a housing plan; or
    (iii) Provide the information required under subpart E of this part.
    (4) Effective date. An order under this section shall be effective 
as provided in 12 U.S.C. 4581(c) and Sec.  81.84(m).

[60 FR 61888, Dec. 1, 1995, as amended at 61 FR 50218, Sept. 24, 1996]



Sec.  81.83  Civil money penalties.

    (a) Imposition. The Secretary may impose a civil money penalty on a 
GSE that has failed:
    (1) To submit, within the time prescribed in Sec.  81.22, a housing 
plan that substantially complies with 12 U.S.C. 4566(c), as implemented 
by Sec.  81.22;
    (2) To make a good-faith effort to comply with a housing plan 
submitted and approved by the Secretary; or
    (3) To submit any of the information required under sections 309(m) 
or (n) of the Fannie Mae Charter Act, sections 307(e) or (f) of the 
Freddie Mac Act, or subpart E of this part.
    (b) Amount of penalty. The amount of the penalty shall not exceed:
    (1) For any failure described in paragraph (a)(1) of this section, 
$35,000 for each day that the failure occurs; and
    (2) For any failure described in paragraphs (a)(2) or (a)(3) of this 
section, $16,000 for each day that the failure occurs.
    (c) Factors in determining amount of penalty. In determining the 
amount of a penalty under this section, the Secretary shall consider the 
factors in 12 U.S.C. 4585(c)(2) including the public interest.
    (d) Procedures--(1) Notice of Intent. The Secretary shall notify the 
GSE in writing of the Secretary's determination to impose a civil money 
penalty by issuing a Notice of Intent to Impose Civil Money Penalties 
(``Notice of Intent''). The Notice of Intent shall provide:
    (i) A concise statement of the facts constituting the alleged 
misconduct;
    (ii) The amount of the civil money penalty;
    (iii) Notice of the GSE's right to a hearing on the record;
    (iv) The procedures to follow to obtain a hearing;
    (v) A statement of the consequences of failing to request a hearing; 
and
    (vi) The date the penalty shall be due unless the GSE contests the 
matter.
    (2) To appeal the Secretary's decision to impose a civil money 
penalty, the GSE shall, within 20 days of service of the Notice of 
Intent, file a written Answer with the Chief Docket Clerk, Office of 
Administrative Law Judges, Department of Housing and Urban Development, 
at the address provided in the Notice of Intent.
    (3) Administrative law judge. A HUD ALJ shall preside over any 
hearing conducted under this section, in accordance with Sec.  81.84 
and, to the extent the provisions are not inconsistent with any of the 
procedures in this part or FHEFSSA, with 24 CFR part 26, subpart B.
    (4) Issuance of order. If the GSE consents to the issuance of the 
order or the ALJ finds, on the hearing record, that a preponderance of 
the evidence establishes the conduct specified in the notice of charges, 
the ALJ may issue an order imposing a civil money penalty.
    (5) Consultation with the Director. In the Secretary's discretion, 
the Director of OFHEO may be requested to review any Notice of Intent, 
determination, order, or interlocutory ruling arising from a hearing.
    (e) Action to collect penalty. The Secretary may request the 
Attorney General of the United States to bring an action to collect the 
penalty, in accordance with 12 U.S.C. 4585(d). Interest on, and other 
charges for, any unpaid penalty may be assessed in accordance with 31 
U.S.C. 3717.
    (f) Settlement by Secretary. The Secretary may compromise, modify, 
or remit any civil money penalty that may be, or has been, imposed under 
this section.

[60 FR 61888, Dec. 1, 1995, as amended at 61 FR 50218, Sept. 24, 1996; 
68 FR 12788, Mar. 17, 2003; 72 FR 5588, Feb. 6, 2007]



Sec.  81.84  Hearings.

    (a) Applicability. The hearing procedures in this section apply to 
hearings on the record to review cease-and-desist orders, civil money 
penalties, and new programs disapproved based upon a determination by 
the Secretary that

[[Page 457]]

such programs are not in the public interest, in accordance with 12 
U.S.C. 4542(c)(4)(B).
    (b) Hearing requirements. (1) Hearings shall be held in the District 
of Columbia.
    (2) Hearings shall be conducted by a HUD ALJ authorized to conduct 
proceedings under 24 CFR part 26, subpart B.
    (c) Timing. Unless an earlier or later date is requested by a GSE 
and the request is granted by the ALJ, a hearing shall be fixed for a 
date not earlier than 30 days, nor later than 60 days, after:
    (1) Service of the notice of charges under Sec.  81.82;
    (2) Service of the Notice of Intent to Impose Civil Money 
Penalty(ies) under Sec.  81.83; or
    (3) Filing of a request for a hearing under Sec.  81.54(b).
    (d) Procedure. Hearings shall be conducted in accordance with the 
procedures set forth in 24 CFR part 26, subpart B to the extent that 
such provisions are not inconsistent with any of the procedures in this 
part or FHEFSSA.
    (e) Service--(1) To GSE. Any service required or authorized to be 
made by the Secretary under this subpart G may be made to the Chief 
Executive Officer of a GSE or any other representative as the GSE may 
designate in writing to the Secretary.
    (2) How service may be made. A serving party shall use one or more 
of the following methods of service:
    (i) Personal service;
    (ii) Delivering the papers to a reliable commercial courier service, 
overnight delivery service, or the U.S. Post Office for Express Mail 
Delivery; or
    (iii) Transmission by electronic media, only if the parties mutually 
agree. The serving party shall mail an original of the filing after any 
proper service using electronic media.
    (f) Subpoena authority--(1) General. In the course of or in 
connection with any hearing, the Secretary and the ALJ shall have the 
authority to:
    (i) Administer oaths and affirmations;
    (ii) Take and preserve testimony under oath;
    (iii) Issue subpoenas and subpoenas duces tecum; and
    (iv) Revoke, quash, or modify subpoenas and subpoenas duces tecum 
issued under this paragraph (f).
    (2) Witnesses and documents. The attendance of witnesses and the 
production of documents provided for in this section may be required 
from any place in any State. A witness may be required to appear, and a 
document may be required to be produced, at:
    (i) The hearing; and
    (ii) Any place that is designated for attendance at a deposition or 
production of a document under this section.
    (3) Enforcement. In accordance with 12 U.S.C. 4588(c), the Secretary 
may request the Attorney General of the United States to enforce any 
subpoena or subpoena duces tecum issued pursuant to this section. If a 
subpoenaed person fails to comply with all or any portion of a subpoena 
issued pursuant to this paragraph (f), the subpoenaing party or any 
other aggrieved person may petition the Secretary to seek enforcement of 
the subpoena. A party's petition to the Secretary for enforcement of a 
subpoena in no way limits the sanctions that may be imposed by the ALJ 
on a party who fails to comply with a subpoena issued under this 
paragraph (f).
    (4) Fees and expenses. Witnesses subpoenaed under this section shall 
be paid the same fees and mileage that are paid witnesses in the 
district courts of the United States and may seek reasonable expenses 
and attorneys fees in any court having jurisdiction of any proceeding 
instituted under this section. Such expenses and fees shall be paid by 
the GSE or from its assets.
    (g) Failure to appear. If a GSE fails to appear at a hearing through 
a duly authorized representative, the GSE shall be deemed to have 
consented to the issuance of the cease-and-desist order, the imposition 
of the penalty, or the disapproval of the new program, whichever is 
applicable.
    (h) Public hearings. (1) All hearings shall be open to the public, 
unless the ALJ determines that an open hearing would be contrary to the 
public interest. Where a party makes a timely motion to close a hearing 
and the ALJ denies the motion, such party may file

[[Page 458]]

with the Secretary within 5 working days a request for a closed hearing, 
and any party may file a reply to such a request within 5 working days 
of service of such a motion. Such motions, requests, and replies are 
governed by Sec.  26.38 of this title. When a request for a closed 
hearing has been filed with the Secretary under this paragraph (h)(1), 
the hearing shall be stayed until the Secretary has advised the parties 
and the ALJ, in writing, of the Secretary's decision on whether the 
hearing should be closed.
    (2) Failure to file a timely motion, request or reply is deemed a 
waiver of any objection regarding whether the hearing will be public or 
closed. A party must file any motion for a closed hearing within 10 days 
after:
    (i) Service of the notice of charges under Sec.  81.82;
    (ii) Service of the Notice of Intent to Impose Civil Money 
Penalt(ies) under Sec.  81.83; or
    (iii) Filing of a request for a hearing under Sec.  81.54(b).
    (i) Decision of ALJ. After each hearing, the ALJ shall issue an 
initial decision and serve the initial decision on the GSE, the 
Secretary, any other parties, and the HUD General Counsel. This service 
will constitute notification that the case has been submitted to the 
Secretary.
    (j) Review of initial decision--(1) Secretary's discretion. The 
Secretary, in the Secretary's discretion, may review any initial 
decision.
    (2) Requested by a party. Any party may file a notice of appeal of 
an initial decision to the Secretary in accordance with Sec.  26.51(c) 
of this title. Any waiver of the limitations contained in Sec.  26.51(f) 
of this title on the number of pages for notices of appeal and 
responses, of the time limitation in Sec.  26.51(c) of this title for 
filing a notice of appeal of the initial decision, or any other waivers 
under this subpart shall not be subject to the publication requirements 
in 42 U.S.C. 3535(q).
    (k) Final decision. (1) The initial decision will become the final 
decision unless the Secretary issues a final decision within 90 days 
after the initial decision is served on the Secretary.
    (2) Issuance of final decision by Secretary. The Secretary may 
review any finding of fact, conclusion of law, or order contained in the 
initial decision of the ALJ and may issue a final decision in the 
proceeding. Any decision shall include findings of fact upon which the 
decision is predicated. The Secretary may affirm, modify, or set aside, 
in whole or in part, the initial decision or may remand the initial 
decision for further proceedings. The final decision shall be served on 
all parties and the ALJ.
    (l) Decisions on remand. If the initial decision is remanded for 
further proceedings, the ALJ shall issue an initial decision on remand 
within 60 days of the date of issuance of the decision to remand, unless 
it is impractical to do so.
    (m) Modification. The Secretary may modify, terminate, or set aside 
any order in accordance with 12 U.S.C. 4582(b)(2).

[60 FR 61888, Dec. 1, 1995, as amended at 61 FR 50219 Sept. 24, 1996]



Sec.  81.85  Public disclosure of final orders and agreements.

    (a) Disclosure. Except as provided in paragraph (b) of this section, 
the Secretary shall make available to the public final orders; written 
agreements and statements; and modifications and terminations of those 
orders, agreements, and statements, as set forth in 12 U.S.C. 4586(a) 
and the implementing regulations in this subpart G. The retention of 
records of these orders, agreements, and statements, and their 
modifications and terminations, are governed by 12 U.S.C. 4586(e).
    (b) Exceptions to disclosure. Exceptions to disclosure will be 
determined in accordance with 12 U.S.C. 4586 (c), (d), and (f) and 
paragraph (c) of this section.
    (c) Filing documents under seal--(1) Request by party. Upon the 
denial by the ALJ of a motion for a protective order, any party may 
request the Secretary to file any document or part of a document under 
seal if the party believes that disclosure of the document would be 
contrary to the public interest. Any other party may file with the 
Secretary a reply to such a request within 5 working days after a 
request is made or some other time to be determined by

[[Page 459]]

the Secretary. Such requests and replies are governed by Sec.  26.38 of 
this title.
    (2) Effect of request. A document or part of a document that is the 
subject of a timely request to the Secretary to file under seal will not 
be disclosed under this section until the Secretary has advised the 
parties and the ALJ, in writing, of the Secretary's decision on whether 
the document or part of a document should be filed under seal. The ALJ 
shall take all appropriate steps to preserve the confidentiality of such 
documents or parts of documents, including closing portions of the 
hearing to the public.
    (3) Time of request. Failure to file with the Secretary a timely 
request or a reply is deemed a waiver of any objection regarding the 
decision on whether a document is to be disclosed. A party must make its 
request to file a document under seal at least 10 days before the 
commencement of the hearing. A request may be filed at any other time 
before or during the course of the hearing, but the requesting party's 
obligation to produce the document or parts of the document will not be 
affected by the party's pending request to the Secretary, unless the 
Secretary expressly directs the ALJ to treat the document as protected 
from disclosure until the Secretary makes a final written decision on 
whether the document should be filed under seal. If the Secretary's 
direction to the ALJ is made orally, that direction must be reduced to 
writing and filed with the ALJ within 3 working days of the making of 
the oral order or the document will then be subject to disclosure 
pending the Secretary's final written decision on disclosure.

[60 FR 61888, Dec. 1, 1995, as amended at 61 FR 50219 Sept. 24, 1996]



Sec.  81.86  Enforcement and jurisdiction.

    If a GSE fails to comply with a final decision, the Secretary may 
request the Attorney General of the United States to bring an action in 
the United States District Court for the District of Columbia for the 
enforcement of the notice or order. Such request may be made:
    (a) For a cease-and-desist order:
    (1) Upon expiration of the 30-day period beginning on the service of 
the order on the GSE; or
    (2) Upon the effective time specified in an order issued upon 
consent; and
    (b) For a civil money penalty, when the order imposing the penalty 
is no longer subject to review under 12 U.S.C. 4582 and 4583 and the 
implementing regulations at Sec. Sec.  81.84 and 81.87.



Sec.  81.87  Judicial review.

    (a) Commencement. In a proceeding under 12 U.S.C. 4581 or 4585, as 
implemented by Sec. Sec.  81.82 or 81.83, a GSE that is a party to the 
proceeding may obtain review of any final order issued under Sec.  81.84 
by filing in the United States Court of Appeals for the District of 
Columbia Circuit, within 30 days after the date of service of such 
order, a written petition praying that the order of the Secretary be 
modified, terminated, or set aside.
    (b) Filing of record. Upon receiving a copy of a petition, the Chief 
Docket Clerk, Office of Administrative Law Judges, shall file in the 
court the record in the proceeding, as provided in 28 U.S.C. 2112.
    (c) No automatic stay. The commencement of proceedings for judicial 
review under this section shall not, unless specifically ordered by the 
court, operate as a stay of any order issued by the Secretary.



                     Subpart H_Book-Entry Procedures

    Source: 61 FR 63948, Dec. 2, 1996, unless otherwise noted.



Sec.  81.91  Maintenance of GSE Securities.

    A GSE Security may be maintained in the form of a Definitive GSE 
Security or a Book-entry GSE Security. A Book-entry GSE Security shall 
be maintained in the Book-entry System.



Sec.  81.92  Law governing rights and obligations of United States,
Federal Reserve Banks, and GSEs; rights of any Person against United 
States, Federal Reserve Banks, and GSEs; Law governing other interests.

    (a) Except as provided in paragraph (b) of this section, the 
following rights and obligations are governed solely by the book-entry 
regulations contained

[[Page 460]]

in this subpart H, the Securities Documentation, and Federal Reserve 
Bank Operating Circulars (but not including any choice of law provisions 
in the Security Documentation to the extent such provisions conflict 
with the Book-entry regulations contained in this subpart H):
    (1) The rights and obligations of a GSE and the Federal Reserve 
Banks with respect to:
    (i) A Book-entry GSE Security or Security Entitlement; and
    (ii) The operation of the Book-entry System as it applies to GSE 
Securities; and
    (2) The rights of any Person, including a Participant, against a GSE 
and the Federal Reserve Banks with respect to:
    (i) A Book-entry GSE Security or Security Entitlement; and
    (ii) The operation of the Book-entry System as it applies to GSE 
Securities;
    (b) A security interest in a Security Entitlement that is in favor 
of a Federal Reserve Bank from a Participant and that is not recorded on 
the books of a Federal Reserve Bank pursuant to Sec.  81.93(c)(1), is 
governed by the law (not including the conflict-of-law rules) of the 
jurisdiction where the head office of the Federal Reserve Bank 
maintaining the Participant's Securities Account is located. A security 
interest in a Security Entitlement that is in favor of a Federal Reserve 
Bank from a Person that is not a Participant, and that is not recorded 
on the books of a Federal Reserve Bank pursuant to Sec.  81.93(c)(1), is 
governed by the law determined in the manner specified in paragraph (d) 
of this section.
    (c) If the jurisdiction specified in the first sentence of paragraph 
(b) of this section is a State that has not adopted Revised Article 8, 
then the law specified in paragraph (b) of this section shall be the law 
of that State as though Revised Article 8 had been adopted by that 
State.
    (d) To the extent not otherwise inconsistent with this subpart H, 
and notwithstanding any provision in the Security Documentation setting 
forth a choice of law, the provisions set forth in 31 CFR 357.11 
regarding law governing other interests apply and shall be read as 
though modified to effectuate the application of 31 CFR 357.11 to the 
GSEs.

[61 FR 63948, Dec. 2, 1996, as amended at 62 FR 28977, May 29, 1997]



Sec.  81.93  Creation of Participant's Security Entitlement; security
interests.

    (a) A Participant's Security Entitlement is created when a Federal 
Reserve Bank indicates by book-entry that a Book-entry GSE Security has 
been credited to a Participant's Securities Account.
    (b) A security interest in a Security Entitlement of a Participant 
in favor of the United States to secure deposits of public money, 
including without limitation deposits to the Treasury tax and loan 
accounts, or other security interest in favor of the United States that 
is required by Federal statute, regulation, or agreement, and that is 
marked on the books of a Federal Reserve Bank is thereby effected and 
perfected, and has priority over any other interest in the securities. 
Where a security interest in favor of the United States in a Security 
Entitlement of a Participant is marked on the books of a Federal Reserve 
Bank, such Reserve Bank may rely, and is protected in relying, 
exclusively on the order of an authorized representative of the United 
States directing the transfer of the security. For purposes of this 
paragraph, an ``authorized representative of the United States'' is the 
official designated in the applicable regulations or agreement to which 
a Federal Reserve Bank is a party, governing the security interest.
    (c)(1) A GSE and the Federal Reserve Banks have no obligation to 
agree to act on behalf of any Person or to recognize the interest of any 
transferee of a security interest or other limited interest in favor of 
any Person except to the extent of any specific requirement of Federal 
law or regulation or to the extent set forth in any specific agreement 
with the Federal Reserve Bank on whose books the interest of the 
Participant is recorded. To the extent required by such law or 
regulation or set forth in an agreement with a Federal Reserve Bank, or 
the Federal Reserve Bank Operating Circular, a security interest in a 
Security Entitlement that is in favor of a Federal Reserve Bank,

[[Page 461]]

a GSE, or a Person may be created and perfected by a Federal Reserve 
Bank marking its books to record the security interest. Except as 
provided in paragraph (b) of this section, a security interest in a 
Security Entitlement marked on the books of a Federal Reserve Bank shall 
have priority over any other interest in the securities.
    (2) In addition to the method provided in paragraph (c)(1) of this 
section, a security interest, including a security interest in favor of 
a Federal Reserve Bank, may be perfected by any method by which a 
security interest may be perfected under applicable law as described in 
Sec.  81.92(b) or (d). The perfection, effect of perfection or non-
perfection and priority of a security interest are governed by such 
applicable law. A security interest in favor of a Federal Reserve Bank 
shall be treated as a security interest in favor of a clearing 
corporation in all respects under such law, including with respect to 
the effect of perfection and priority of such security interest. A 
Federal Reserve Bank Operating Circular shall be treated as a rule 
adopted by a clearing corporation for such purposes.

[61 FR 63948, Dec. 2, 1996, as amended at 62 FR 28977, May 29, 1997]



Sec.  81.94  Obligations of GSEs; no adverse claims.

    (a) Except in the case of a security interest in favor of the United 
States or a Federal Reserve Bank or otherwise as provided in Sec.  
81.93(c)(1), for the purposes of this subpart H, the GSE and the Federal 
Reserve Banks shall treat the Participant to whose Securities Account an 
interest in a Book-entry GSE Security has been credited as the person 
exclusively entitled to issue a Transfer Message, to receive interest 
and other payments with respect thereof and otherwise to exercise all 
the rights and powers with respect to such Security, notwithstanding any 
information or notice to the contrary. Neither the Federal Reserve Banks 
nor a GSE is liable to a Person asserting or having an adverse claim to 
a Security Entitlement or to a Book-entry GSE Security in a 
Participant's Securities Account, including any such claim arising as a 
result of the transfer or disposition of a Book-entry GSE Security by a 
Federal Reserve Bank pursuant to a Transfer Message that the Federal 
Reserve Bank reasonably believes to be genuine.
    (b) The obligation of the GSE to make payments (including payments 
of interest and principal) with respect to Book-entry GSE Securities is 
discharged at the time payment in the appropriate amount is made as 
follows:
    (1) Interest or other payments on Book-entry GSE Securities is 
either credited by a Federal Reserve Bank to a Funds Account maintained 
at such Bank or otherwise paid as directed by the Participant.
    (2) Book-entry GSE Securities are redeemed in accordance with their 
terms by a Federal Reserve Bank withdrawing the securities from the 
Participant's Securities Account in which they are maintained and by 
either crediting the amount of the redemption proceeds, including both 
redemption proceeds, where applicable, to a Funds Account at such Bank 
or otherwise paying such redemption proceeds as directed by the 
Participant. No action by the Participant ordinarily is required in 
connection with the redemption of a Book-entry GSE Security.

[61 FR 63948, Dec. 2, 1996, as amended at 62 FR 28977, May 28, 1997]



Sec.  81.95  Authority of Federal Reserve Banks.

    (a) Each Federal Reserve Bank is hereby authorized as fiscal agent 
of the GSEs to perform the following functions with respect to the 
issuance of Book-entry GSE Securities offered and sold by a GSE to which 
this subpart H applies, in accordance with the Securities Documentation, 
Federal Reserve Bank Operating Circulars, this subpart H, and procedures 
established by the Secretary consistent with these authorities:
    (1) To service and maintain Book-entry GSE Securities in accounts 
established for such purposes;
    (2) To make payments with respect to such securities, as directed by 
the GSE;
    (3) To effect transfer of Book-entry GSE Securities between 
Participants' Securities Accounts as directed by the Participants;

[[Page 462]]

    (4) To effect conversions between Book-entry GSE Securities and 
Definitive GSE Securities with respect to those securities as to which 
conversion rights are available pursuant to the applicable Securities 
Documentation; and
    (5) To perform such other duties as fiscal agent as may be requested 
by the GSE.
    (b) Each Federal Reserve Bank may issue Operating Circulars not 
inconsistent with this subpart H, governing the details of its handling 
of Book-entry GSE Securities, Security Entitlements, and the operation 
of the book-entry system under this subpart H.



Sec.  81.96  Withdrawal of Eligible Book-entry GSE Securities for
conversion to definitive form.

    (a) Eligible Book-entry GSE Securities may be withdrawn from the 
Book-entry System by requesting delivery of like Definitive GSE 
Securities.
    (b) A Reserve bank shall, upon receipt of appropriate instructions 
to withdraw Eligible Book-entry GSE Securities from book-entry in the 
Book-entry System, convert such securities into Definitive GSE 
Securities and deliver them in accordance with such instructions. No 
such conversion shall affect existing interests in such GSE Securities.
    (c) All requests for withdrawal of Eligible Book-entry GSE 
Securities must be made prior to the maturity or date of call of the 
securities.
    (d) GSE Securities which are to be delivered upon withdrawal may be 
issued in either registered or bearer form, to the extent permitted by 
the applicable Securities Documentation.

[61 FR 63948, Dec. 2, 1996, as amended at 62 FR 28977, May 29, 1997]



Sec.  81.97  Waiver of regulations.

    The Secretary reserves the right in the Secretary's discretion, to 
waive any provision(s) of these regulations in any case or class of 
cases for the convenience of a GSE, the United States, or in order to 
relieve any person(s) of unnecessary hardship, if such action is not 
inconsistent with law, does not adversely affect any substantial 
existing rights, and the Secretary is satisfied that such action will 
not subject a GSE or the United States to any substantial expense or 
liability.



Sec.  81.98  Liability of GSEs and Federal Reserve Banks.

    A GSE and the Federal Reserve Banks may rely on the information 
provided in a Transfer Message, and are not required to verify the 
information. A GSE and the Federal Reserve Banks shall not be liable for 
any action taken in accordance with the information set out in a 
Transfer Message, or evidence submitted in support thereof.



Sec.  81.99  Additional provisions.

    (a) Additional requirements. In any case or any class of cases 
arising under these regulations, a GSE may require such additional 
evidence and a bond of indemnity, with or without surety, as may in the 
judgment of the GSE be necessary for the protection of the interests of 
the GSE.
    (b) Notice of attachment for GSE Securities in Book-entry system. 
The interest of a debtor in a Security Entitlement may be reached by a 
creditor only by legal process upon the Securities Intermediary with 
whom the debtor's securities account is maintained, except where a 
Security Entitlement is maintained in the name of a secured party, in 
which case the debtor's interest may be reached by legal process upon 
the secured party. These regulations do not purport to establish whether 
a Federal Reserve Bank is required to honor an order or other notice of 
attachment in any particular case or class of cases.



                       Subpart I_Other Provisions



Sec.  81.101  Equal employment opportunity.

    Fannie Mae and Freddie Mac shall comply with sections 1 and 2 of 
Executive Order 11478 (3 CFR, 1966-1970 Compilation, p. 803), as amended 
by Executive Order 12106, (3 CFR, 1978, Compilation, p. 263), providing 
for the adoption and implementation of equal employment opportunity, as 
required by section 1216 of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (12 U.S.C. 1833e).

[[Page 463]]



Sec.  81.102  Verification and enforcement to ensure GSE data integrity.

    (a) Independent verification authority. The Secretary may 
independently verify the accuracy and completeness of the data, 
information, and reports provided by each GSE, including conducting on-
site verification, when such steps are reasonably related to determining 
whether a GSE is complying with 12 U.S.C. 4541-4589 and the GSE's 
Charter Act.
    (b) Certification. (1) The senior officer of each GSE who is 
responsible for submitting to HUD the fourth quarter Annual Mortgage 
Report and the AHAR under sections 309(m) and (n) of the Fannie Mae 
Charter Act or sections 307(e) and (f) of the Freddie Mac Act, as 
applicable, or for submitting to the Secretary such other report(s), 
data, or information for which certification is requested in writing by 
the Secretary, shall certify such report(s), data or information.
    (2) The certification shall state as follows: ``To the best of my 
knowledge and belief, the information provided herein is true, correct 
and complete.''
    (3) If the Secretary determines that a GSE has failed to provide the 
certification required by paragraphs (b)(1) and (b)(2) of this section, 
or that a GSE has provided the certification required by paragraph (b) 
in connection with data, information or report(s) that the Secretary 
later determines are not true, correct and complete, the Secretary may 
pursue the enforcement remedies under paragraph (e) of this section. For 
data, information or report(s) subject to paragraphs (c) or (d) of this 
section, the Secretary may pursue the enforcement remedies described in 
paragraph (e) only in connection with material errors, omissions or 
discrepancies as those terms are defined in Sec.  81.102(c) or (d).
    (c) Verification procedure and adjustment to correct errors, 
omissions or discrepancies in AHAR data for the immediately preceding 
year. (1) This paragraph (c) pertains to the GSEs' submission of year-
end data. For purposes of this paragraph, ``year-end data'' means data 
that HUD receives from the GSEs related to housing goals performance in 
the immediately preceding year and covering data reported in the fourth 
quarter Annual Mortgage Report and the GSE's AHAR. An ``error'' means a 
technical mistake, such as a mistake in coding or calculating data. An 
``omission'' means a GSE's failure to count units in the denominator. A 
``discrepancy'' means any difference between HUD's analysis of data and 
the analysis contained in a GSE's submission of data, including a 
discrepancy in goal or Special Affordable subgoal performance.
    (2) If HUD finds errors, omissions or discrepancies in a GSE's year-
end data submissions relative to HUD's regulations, HUD will first 
notify the GSE by telephone or e-mail transmission of each such error, 
omission or discrepancy. The GSE must respond within five working days 
of each such notification. HUD may, in its discretion or upon a request 
by a GSE within the five working day period, extend the response period 
for up to an additional 20 working days. Information exchanges during 
the five working day period following initial notification, and any 
subsequent extensions of time that may be granted, may be by electronic 
mail. Any person with delegated authority from the Secretary, or the 
Director of HUD's Financial Institution Regulation Division, or his or 
her designee, shall be responsible for issuing initial notifications 
regarding errors, omissions, or discrepancies; making determinations on 
the adequacy of responses received; approving any extensions of time 
permitted under this provision; and managing the data verification 
process.
    (3) If each error, omission or discrepancy is not resolved to HUD's 
satisfaction during the initial five working day period from 
notification, and any extension period, the Secretary will notify the 
GSE in writing and seek clarification or additional information to 
correct the error, omission or discrepancy. The GSE shall have 10 
working days (or such longer period as the Secretary may establish, not 
to exceed 30 working days) from the date of the Secretary's written 
notice to respond in writing to the notice. If the GSE fails to submit a 
written response to the Secretary within this period, or if the 
Secretary determines that the GSE's

[[Page 464]]

written response fails to correct or otherwise resolve each error, 
omission or discrepancy in its reported year-end data to the Secretary's 
satisfaction, the Secretary will determine the appropriate adjustments 
to the numerator and the denominator of the applicable housing goal(s) 
and Special Affordable subgoal(s) due to the GSE's failure to provide 
the Secretary with accurate submissions of data.
    (4) The Secretary, or his or her designee, shall inform a GSE in 
writing, at least five working days prior to HUD's release of its 
official performance figures to the public, of HUD's determination of 
official goals performance figures, including any adjustments. During 
the five working days prior to such public release, a GSE may request, 
in writing, a reconsideration of HUD's final determination of its 
performance and must provide the basis for requesting the 
reconsideration. If the request is granted, the Secretary will consider 
the GSE's request for reconsideration of its determination of goals 
performance and make a final determination regarding the GSE's 
performance, within 10 working days of the Secretary's granting of the 
GSE's written request for reconsideration.
    (5) Should the Secretary determine that additional enforcement 
action against the GSE is warranted for material errors, omissions or 
discrepancies with regard to a housing goal or Special Affordable 
subgoal, it may pursue additional remedies under paragraph (e) of this 
section. An error, omission or discrepancy is material if it results in 
an overstatement of credit for a housing goal or Special Affordable 
subgoal, and, without such overstatement, the GSE would have failed to 
meet such housing goal or Special Affordable subgoal for the immediately 
preceding year.
    (d) Adjustment to correct prior year reporting errors, omissions or 
discrepancies--(1) General. The Secretary may require a GSE to correct a 
material error, omission or discrepancy in a GSE's prior year's data 
reported in the fourth quarter Annual Mortgage Report and the GSE's AHAR 
under sections 309(m) and (n) of the Fannie Mae Charter Act or sections 
307(e) and (f) of the Freddie Mac Act, as applicable. An error, omission 
or discrepancy is material if it results in an overstatement of credit 
for a housing goal or Special Affordable subgoal and, without such 
overstatement, the GSE would have failed to meet such housing goal or 
Special Affordable subgoal for the prior year. A ``prior year'' for 
purposes of this section is any one of the two years immediately 
preceding the latest year for which data on housing goals performance 
was reported to HUD.
    (2) Procedural requirements. In the event the Secretary determines 
that a GSE's prior year's fourth quarter Annual Mortgage Report or AHAR 
contain a material error, omission or discrepancy, the Secretary will 
provide the GSE with an initial letter containing written findings and 
determinations within 24 months of the end of the relevant GSE reporting 
year. The GSE shall have an opportunity, not to exceed 30 days from the 
date of receipt of the Secretary's initial letter, to respond in writing 
with supporting documentation, to contest the Secretary's initial 
determination that there was a material error, omission or discrepancy 
in a prior year's data. The Secretary shall then issue a final 
determination letter within 60 days of the date of HUD's receipt of the 
GSE's written response or, if no response is received, within 90 days of 
the date of the GSE's receipt of the Secretary's initial letter. The 
Secretary may extend the period for issuing a final determination letter 
by an additional 30 days and may grant the GSE an opportunity, for a 
period not to exceed 10 working days from the date of the GSE's receipt 
of the determination letter to request that the determination be 
reconsidered.
    (3) If the Secretary determines that a GSE's prior year's fourth 
quarter Annual Mortgage Report or AHAR contained a material error, 
omission or discrepancy, the Secretary may direct the GSE to correct the 
overstatement by purchasing mortgages to finance the number of units 
that HUD has determined were overstated in the prior year's goal 
performance (or, for the Special Affordable subgoal, the number or 
dollar amount, as applicable, of mortgage purchases that HUD has 
determined were overstated), or that

[[Page 465]]

equal the percentage of the overstatement in the prior year's goal or 
Special Affordable subgoal performance as applied to the most current 
year-end performance, whichever is less. Units or mortgages purchased to 
remedy an overstatement in the housing goals or the Special Affordable 
subgoal must be eligible to qualify under the same goal or Special 
Affordable subgoal that HUD has determined were overstated in the prior 
year.
    (4) If a GSE does not purchase a sufficient amount or type of 
mortgages to meet the requirements set forth in paragraph (d)(3) of this 
section as directed by the Secretary by no later than the end of the 
calendar year immediately following the year in which the Secretary 
notifies the GSE of such overstatement (unless, upon written request 
from the GSE, the Secretary, in his or her discretion, determines that a 
grant of additional time is appropriate to correct or compensate for the 
overstatement) the Department may pursue any or all of the following 
remedies:
    (i) Issue a notice that the GSE has failed a housing goal or Special 
Affordable subgoal in the prior year;
    (ii) Seek additional enforcement remedies under paragraph (e) of 
this section;
    (iii) Pursue any other civil or administrative remedies as are 
available to it.
    (e) Additional enforcement options--(1) General. In the event the 
Secretary determines, either as a result of his or her independent 
verification authority described in paragraph (a) of this section, or by 
the authority set forth in paragraphs (b), (c) or (d) of this section, 
that any of the following circumstances has occurred with respect to 
data, information or report(s) required by sections 309(m) or (n) of the 
Fannie Mae Charter Act, sections 307(e) or (f) of the Freddie Mac Act, 
or subpart E of this part, the Secretary may regard this as a GSE's 
failure to submit such data, information or report(s) and, accordingly, 
the Secretary may take the additional enforcement actions authorized by 
paragraph (e)(2) of this section:
    (i) A GSE fails to submit the certification required by paragraphs 
(b)(1) and (b)(2) of this section in connection with such data, 
information or report(s); or
    (ii) A GSE submits the certification required by paragraph (b) of 
this section, but the Secretary later determines that the data, 
information or report(s) are not true, correct and complete. For data, 
information or report(s) subject to paragraphs (c) or (d) of this 
section, the Secretary may pursue the additional enforcement remedies 
under paragraph (e)(2) only in connection with material errors, 
omissions or discrepancies, as those terms are defined in Sec.  
81.102(c) or (d). In addition, the Secretary may only pursue such 
remedies in connection with material errors, omissions or discrepancies 
arising under paragraph (d) of this section if the GSE has failed to 
purchase a sufficient amount or type of mortgages, as provided in 
paragraphs (d)(3) and (d)(4) of this section.
    (2) Remedies. (i) Submissions required under the GSE's charter acts. 
After the Secretary makes a determination under paragraph (e)(1) of this 
section that any of the circumstances described in paragraphs (e)(1)(i) 
or (ii) has occurred with respect to data, information, or report(s) 
required by sections 309(m) or (n) of the Fannie Mae Charter Act, or by 
sections 307(e) or (f) of the Freddie Mac Act, the Secretary may pursue 
any or all of the following remedies in accordance with paragraph 
(e)(3), or applicable law, as appropriate:
    (A) A cease-and-desist order against the GSE for failing to submit 
the required data, information or report(s) in accordance with this 
section;
    (B) Civil money penalties against the GSE for failing to submit the 
required data, information or report(s) in accordance with this section;
    (C) Any other civil or administrative remedies or penalties against 
the GSE that may be available to the Secretary by virtue of the GSE's 
failing to submit or certify the required data, information or report(s) 
in accordance with this section.
    (ii) Submissions required under subpart E of this part. After the 
Secretary makes a determination under paragraph (e)(1) of this section 
that any of the circumstances described in paragraphs (e)(1)(i) or (ii) 
has occurred with

[[Page 466]]

respect to data, information or report(s) required under subpart E of 
this part (but that are not required by sections 309(m) or (n) of the 
Fannie Mae Charter Act or by sections 307(e) or (f) of the Freddie Mac 
Act), the Secretary may pursue any civil or administrative remedies or 
penalties against the GSE that may be available to the Secretary. The 
Secretary shall pursue such remedies under applicable law.
    (3) Procedures. The Secretary shall comply with the procedures set 
forth in subpart G of this part in connection with any enforcement 
action that he or she may initiate against a GSE under paragraph (e) of 
this section.

[69 FR 63642, Nov. 2, 2004]



PART 84_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS
WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT
ORGANIZATIONS--Table of Contents



    Authority: 42 U.S.C. 3535(d).

    Source: 59 FR 47011, Sept. 13, 1994, unless otherwise noted.



Sec.  84.1  Applicability of and cross reference to 2 CFR part 200.

    (a) Federal awards to institutions of higher education, hospitals 
and other non-profit organizations are subject to the Uniform 
Administrative Requirements, Cost Principles and Audit Requirements for 
Federal Awards at 2 CFR part 200.
    (b) Federal awards made prior to December 26, 2014 will continue to 
be governed by the regulations in effect and codified in 24 CFR part 84 
(2013 edition) or as provided under the terms of the Federal award. 
Where the terms of a Federal award made prior to December 26, 2014, 
state that the award will be subject to regulations as may be amended, 
the Federal award shall be subject to 2 CFR part 200.

[79 FR 76078, Dec. 19, 2014]



PART 85_ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS
TO STATE, LOCAL AND FEDERALLY RECOGNIZED INDIAN TRIBAL GOVERNMENTS
--Table of Contents



    Authority: 42 U.S.C. 3535(d).

    Source: 53 FR 8068, 8087, Mar. 11, 1988, unless otherwise noted.



Sec.  85.1  Applicability of and cross reference to 2 CFR part 200.

    (a) Federal awards with State, local and Indian tribal governments 
are subject to the Uniform Administrative Requirements, Cost Principles 
and Audit Requirements for Federal Awards at 2 CFR part 200.
    (b) Federal awards made prior to December 26, 2014 will continue to 
be governed by the regulations in effect and codified in 24 CFR part 85 
(2013 edition) or as provided by the terms of the Federal award. Where 
the terms of a Federal award made prior to December 26, 2014, state that 
the award will be subject to regulations as may be amended, the Federal 
award shall be subject to 2 CFR part 200.

[79 FR 76079, Dec. 19, 2014]



PART 87_NEW RESTRICTIONS ON LOBBYING--Table of Contents



                            Subpart A_General

Sec.
87.100 Conditions on use of funds.
87.105 Definitions.
87.110 Certification and disclosure.

                  Subpart B_Activities by Own Employees

87.200 Agency and legislative liaison.
87.205 Professional and technical services.
87.210 Reporting.

            Subpart C_Activities by Other Than Own Employees

87.300 Professional and technical services.

                   Subpart D_Penalties and Enforcement

87.400 Penalties.
87.405 Penalty procedures.
87.410 Enforcement.

[[Page 467]]

                          Subpart E_Exemptions

87.500 Secretary of Defense.

                        Subpart F_Agency Reports

87.600 Semi-annual compilation.
87.605 Inspector General report.

Appendix A to Part 87--Certification Regarding Lobbying
Appendix B to Part 87--Disclosure Form To Report Lobbying

    Authority: 28 U.S.C. 1 note; 31 U.S.C. 1352; 42 U.S.C. 3535(d).

    Source: 55 FR 6737, 6750, Feb. 26, 1990, unless otherwise noted.

    Cross Reference: See also OMB notice published at 54 FR 52306, 
December 20, 1989.



                            Subpart A_General



Sec.  87.100  Conditions on use of funds.

    (a) No appropriated funds may be expended by the recipient of a 
Federal contract, grant, loan, or cooperative ageement to pay any person 
for influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with any of the following 
covered Federal actions: the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of any Federal 
contract, grant, loan, or cooperative agreement.
    (b) Each person who requests or receives from an agency a Federal 
contract, grant, loan, or cooperative agreement shall file with that 
agency a certification, set forth in appendix A, that the person has not 
made, and will not make, any payment prohibited by paragraph (a) of this 
section.
    (c) Each person who requests or receives from an agency a Federal 
contract, grant, loan, or a cooperative agreement shall file with that 
agency a disclosure form, set forth in appendix B, if such person has 
made or has agreed to make any payment using nonappropriated funds (to 
include profits from any covered Federal action), which would be 
prohibited under paragraph (a) of this section if paid for with 
appropriated funds.
    (d) Each person who requests or receives from an agency a commitment 
providing for the United States to insure or guarantee a loan shall file 
with that agency a statement, set forth in appendix A, whether that 
person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.
    (e) Each person who requests or receives from an agency a commitment 
providing for the United States to insure or guarantee a loan shall file 
with that agency a disclosure form, set forth in appendix B, if that 
person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.



Sec.  87.105  Definitions.

    For purposes of this part:
    (a) Agency, as defined in 5 U.S.C. 552(f), includes Federal 
executive departments and agencies as well as independent regulatory 
commissions and Government corporations, as defined in 31 U.S.C. 
9101(1).
    (b) Covered Federal action means any of the following Federal 
actions:
    (1) The awarding of any Federal contract;
    (2) The making of any Federal grant;
    (3) The making of any Federal loan;
    (4) The entering into of any cooperative agreement; and,
    (5) The extension, continuation, renewal, amendment, or modification 
of any Federal contract, grant, loan, or cooperative agreement.

Covered Federal action does not include receiving from an agency a 
commitment providing for the United States to insure or guarantee a 
loan. Loan guarantees and loan insurance are addressed independently 
within this part.
    (c) Federal contract means an acquisition contract awarded by an 
agency, including those subject to the Federal Acquisition Regulation 
(FAR), and any

[[Page 468]]

other acquisition contract for real or personal property or services not 
subject to the FAR.
    (d) Federal cooperative agreement means a cooperative agreement 
entered into by an agency.
    (e) Federal grant means an award of financial assistance in the form 
of money, or property in lieu of money, by the Federal Government or a 
direct appropriation made by law to any person. The term does not 
include technical assistance which provides services instead of money, 
or other assistance in the form of revenue sharing, loans, loan 
guarantees, loan insurance, interest subsidies, insurance, or direct 
United States cash assistance to an individual.
    (f) Federal loan means a loan made by an agency. The term does not 
include loan guarantee or loan insurance.
    (g) Indian tribe and tribal organization have the meaning provided 
in section 4 of the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions 
of Indian tribes in that Act.
    (h) Influencing or attempting to influence means making, with the 
intent to influence, any communication to or appearance before an 
officer or employee or any agency, a Member of Congress, an officer or 
employee of Congress, or an employee of a Member of Congress in 
connection with any covered Federal action.
    (i) Loan guarantee and loan insurance means an agency's guarantee or 
insurance of a loan made by a person.
    (j) Local government means a unit of government in a State and, if 
chartered, established, or otherwise recognized by a State for the 
performance of a governmental duty, including a local public authority, 
a special district, an intrastate district, a council of governments, a 
sponsor group representative organization, and any other instrumentality 
of a local government.
    (k) Officer or employee of an agency includes the following 
individuals who are employed by an agency:
    (1) An individual who is appointed to a position in the Government 
under title 5, U.S. Code, including a position under a temporary 
appointment;
    (2) A member of the uniformed services as defined in section 101(3), 
title 37, U.S. Code;
    (3) A special Government employee as defined in section 202, title 
18, U.S. Code; and,
    (4) An individual who is a member of a Federal advisory committee, 
as defined by the Federal Advisory Committee Act, title 5, U.S. Code 
appendix 2.
    (l) Person means an individual, corporation, company, association, 
authority, firm, partnership, society, State, and local government, 
regardless of whether such entity is operated for profit or not for 
profit. This term excludes an Indian tribe, tribal organization, or any 
other Indian organization with respect to expenditures specifically 
permitted by other Federal law.
    (m) Reasonable compensation means, with respect to a regularly 
employed officer or employee of any person, compensation that is 
consistent with the normal compensation for such officer or employee for 
work that is not furnished to, not funded by, or not furnished in 
cooperation with the Federal Government.
    (n) Reasonable payment means, with respect to perfessional and other 
technical services, a payment in an amount that is consistent with the 
amount normally paid for such services in the private sector.
    (o) Recipient includes all contractors, subcontractors at any tier, 
and subgrantees at any tier of the recipient of funds received in 
connection with a Federal contract, grant, loan, or cooperative 
agreement. The term excludes an Indian tribe, tribal organization, or 
any other Indian organization with respect to expenditures specifically 
permitted by other Federal law.
    (p) Regularly employed means, with respect to an officer or employee 
of a person requesting or receiving a Federal contract, grant, loan, or 
cooperative agreement or a commitment providing for the United States to 
insure or guarantee a loan, an officer or employee who is employed by 
such person for at least 130 working days within one year immediately 
preceding the date of the submission that initiates agency consideration 
of such person for

[[Page 469]]

receipt of such contract, grant, loan, cooperative agreement, loan 
insurance commitment, or loan guarantee commitment. An officer or 
employee who is employed by such person for less than 130 working days 
within one year immediately preceding the date of the submission that 
initiates agency consideration of such person shall be considered to be 
regularly employed as soon as he or she is employed by such person for 
130 working days.
    (q) State means a State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, a territory or possession of 
the United States, an agency or instrumentality of a State, and a multi-
State, regional, or interstate entity having governmental duties and 
powers.



Sec.  87.110  Certification and disclosure.

    (a) Each person shall file a certification, and a disclosure form, 
if required, with each submission that initiates agency consideration of 
such person for:
    (1) Award of a Federal contract, grant, or cooperative agreement 
exceeding $100,000; or
    (2) An award of a Federal loan or a commitment providing for the 
United States to insure or guarantee a loan exceeding $150,000 or the 
single family maximum mortgage limit for affected programs, whichever is 
greater.
    (b) Each person shall file a certification, and a disclosure form, 
if required, upon receipt by such person of:
    (1) A Federal contract, grant, or cooperative agreement exceeding 
$100,000; or
    (2) A Federal loan or a commitment providing for the United States 
to insure or guarantee a loan exceeding $150,000 or the single family 
maximum mortgage limit for affected programs, whichever is greater.

Unless such person previously filed a certification, and a disclosure 
form, if required, under paragraph (a) of this section.
    (c) Each person shall file a disclosure form at the end of each 
calendar quarter in which there occurs any event that requires 
disclosure or that materially affects the accuracy of the information 
contained in any disclosure form previously filed by such person under 
paragraphs (a) or (b) of this section. An event that materially affects 
the accuracy of the information reported includes:
    (1) A cumulative increase of $25,000 or more in the amount paid or 
expected to be paid for influencing or attempting to influence a covered 
Federal action; or
    (2) A change in the person(s) or individual(s) influencing or 
attempting to influence a covered Federal action; or,
    (3) A change in the officer(s), employee(s), or Member(s) contacted 
to influence or attempt to influence a covered Federal action.
    (d) Any person who requests or receives from a person referred to in 
paragraphs (a) or (b) of this section:
    (1) A subcontract exceeding $100,000 at any tier under a Federal 
contract;
    (2) A subgrant, contract, or subcontract exceeding $100,000 at any 
tier under a Federal grant;
    (3) A contract or subcontract exceeding $100,000 at any tier under a 
Federal loan exceeding $150,000; or,
    (4) A contract or subcontract exceeding $100,000 at any tier under a 
Federal cooperative agreement,

Shall file a certification, and a disclosure form, if required, to the 
next tier above.
    (e) All disclosure forms, but not certifications, shall be forwarded 
from tier to tier until received by the person referred to in paragraphs 
(a) or (b) of this section. That person shall forward all disclosure 
forms to the agency.
    (f) Any certification or disclosure form filed under paragraph (e) 
of this section shall be treated as a material representation of fact 
upon which all receiving tiers shall rely. All liability arising from an 
erroneous representation shall be borne solely by the tier filing that 
representation and shall not be shared by any tier to which the 
erroneous representation is forwarded. Submitting an erroneous 
certification or disclosure constitutes a failure to file the required 
certification or disclosure, respectively. If a person fails to file a 
required certification or disclosure, the United States may pursue all 
available remedies, including those authorized by section 1352, title 
31, U.S. Code.

[[Page 470]]

    (g) For awards and commitments in process prior to December 23, 
1989, but not made before that date, certifications shall be required at 
award or commitment, covering activities occurring between December 23, 
1989, and the date of award or commitment. However, for awards and 
commitments in process prior to the December 23, 1989 effective date of 
these provisions, but not made before December 23, 1989, disclosure 
forms shall not be required at time of award or commitment but shall be 
filed within 30 days.
    (h) No reporting is required for an activity paid for with 
appropriated funds if that activity is allowable under either subpart B 
or C.

[55 FR 6737, 6750, Feb. 26, 1990, as amended at 59 FR 5321, Feb. 4, 
1994]



                  Subpart B_Activities by Own Employees



Sec.  87.200  Agency and legislative liaison.

    (a) The prohibition on the use of appropriated funds, in Sec.  
87.100 (a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement if 
the payment is for agency and legislative liaison activities not 
directly related to a covered Federal action.
    (b) For purposes of paragraph (a) of this section, providing any 
information specifically requested by an agency or Congress is allowable 
at any time.
    (c) For purposes of paragraph (a) of this section, the following 
agency and legislative liaison activities are allowable at any time only 
where they are not related to a specific solicitation for any covered 
Federal action:
    (1) Discussing with an agency (including individual demonstrations) 
the qualities and characteristics of the person's products or services, 
conditions or terms of sale, and service capabilities; and,
    (2) Technical discussions and other activities regarding the 
application or adaptation of the person's products or services for an 
agency's use.
    (d) For purposes of paragraph (a) of this section, the following 
agencies and legislative liaison activities are allowable only where 
they are prior to formal solicitation of any covered Federal action:
    (1) Providing any information not specifically requested but 
necessary for an agency to make an informed decision about initiation of 
a covered Federal action;
    (2) Technical discussions regarding the preparation of an 
unsolicited proposal prior to its official submission; and,
    (3) Capability presentations by persons seeking awards from an 
agency pursuant to the provisions of the Small Business Act, as amended 
by Pub. L. 95-507 and other subsequent amendments.
    (e) Only those activities expressly authorized by this section are 
allowable under this section.



Sec.  87.205  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec.  
87.100 (a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement or 
an extension, continuation, renewal, amendment, or modification of a 
Federal contract, grant, loan, or cooperative agreement if payment is 
for professional or technical services rendered directly in the 
preparation, submission, or negotiation of any bid, proposal, or 
application for that Federal contract, grant, loan, or cooperative 
agreement or for meeting requirements imposed by or pursuant to law as a 
condition for receiving that Federal contract, grant, loan, or 
cooperative agreement.
    (b) For purposes of paragraph (a) of this section, professional and 
technical services shall be limited to advice and analysis directly 
applying any professional or technical discipline. For example, drafting 
of a legal document accompanying a bid or proposal by a lawyer is 
allowable. Similarly, technical advice provided by an engineer on the 
performance or operational capability of a piece of equipment rendered 
directly in the negotiation of a contract is allowable. However, 
communications with the intent to influence made by a

[[Page 471]]

professional (such as a licensed lawyer) or a technical person (such as 
a licensed accountant) are not allowable under this section unless they 
provide advice and analysis directly applying their professional or 
technical expertise and unless the advice or analysis is rendered 
directly and solely in the preparation, submission or negotiation of a 
covered Federal action. Thus, for example, communications with the 
intent to influence made by a lawyer that do not provide legal advice or 
analysis directly and solely related to the legal aspects of his or her 
client's proposal, but generally advocate one proposal over another are 
not allowable under this section because the lawyer is not providing 
professional legal services. Similarly, communications with the intent 
to influence made by an engineer providing an engineering analysis prior 
to the preparation or submission of a bid or proposal are not allowable 
under this section since the engineer is providing technical services 
but not directly in the preparation, submission or negotiation of a 
covered Federal action.
    (c) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (d) Only those services expressly authorized by this section are 
allowable under this section.



Sec.  87.210  Reporting.

    No reporting is required with respect to payments of reasonable 
compensation made to regularly employed officers or employees of a 
person.



            Subpart C_Activities by Other Than Own Employees



Sec.  87.300  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec.  
87.100 (a), does not apply in the case of any reasonable payment to a 
person, other than an officer or employee of a person requesting or 
receiving a covered Federal action, if the payment is for professional 
or technical services rendered directly in the preparation, submission, 
or negotiation of any bid, proposal, or application for that Federal 
contract, grant, loan, or cooperative agreement or for meeting 
requirements imposed by or pursuant to law as a condition for receiving 
that Federal contract, grant, loan, or cooperative agreement.
    (b) The reporting requirements in Sec.  87.110 (a) and (b) regarding 
filing a disclosure form by each person, if required, shall not apply 
with respect to professional or technical services rendered directly in 
the preparation, submission, or negotiation of any commitment providing 
for the United States to insure or guarantee a loan.
    (c) For purposes of paragraph (a) of this section, professional and 
technical services shall be limited to advice and analysis directly 
applying any professional or technical discipline. For example, drafting 
or a legal document accompanying a bid or proposal by a lawyer is 
allowable. Similarly, technical advice provided by an engineer on the 
performance or operational capability of a piece of equipment rendered 
directly in the negotiation of a contract is allowable. However, 
communications with the intent to influence made by a professional (such 
as a licensed lawyer) or a technical person (such as a licensed 
accountant) are not allowable under this section unless they provide 
advice and analysis directly applying their professional or technical 
expertise and unless the advice or analysis is rendered directly and 
solely in the preparation, submission or negotiation of a covered 
Federal action. Thus, for example, communications with the intent to 
influence made by a lawyer that do not provide legal advice or analysis 
directly and solely related to the legal aspects of his or her client's 
proposal, but generally advocate one proposal over another are not 
allowable under this section because the lawyer is not providing 
professional legal services. Similarly, communications with the intent 
to influence made by an engineer providing an engineering analysis prior 
to the preparation or submission of a bid or proposal are not allowable 
under this section since the engineer is providing technical services 
but not directly in the preparation,

[[Page 472]]

submission or negotiation of a covered Federal action.
    (d) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (e) Persons other than officers or employees of a person requesting 
or receiving a covered Federal action include consultants and trade 
associations.
    (f) Only those services expressly authorized by this section are 
allowable under this section.



                   Subpart D_Penalties and Enforcement



Sec.  87.400  Penalties.

    (a) Any person who makes an expenditure prohibited herein shall be 
subject to a civil penalty of not less than $18,936 and not more than 
$189,361 for each such expenditure.
    (b) Any person who fails to file or amend the disclosure form (see 
appendix B) to be filed or amended if required herein, shall be subject 
to a civil penalty of not less than $18,936 and not more than $189,361 
for each such failure.
    (c) A filing or amended filing on or after the date on which an 
administrative action for the imposition of a civil penalty is commenced 
does not prevent the imposition of such civil penalty for a failure 
occurring before that date. An administrative action is commenced with 
respect to a failure when an investigating official determines in 
writing to commence an investigation of an allegation of such failure.
    (d) In determining whether to impose a civil penalty, and the amount 
of any such penalty, by reason of a violation by any person, the agency 
shall consider the nature, circumstances, extent, and gravity of the 
violation, the effect on the ability of such person to continue in 
business, any prior violations by such person, the degree of culpability 
of such person, the ability of the person to pay the penalty, and such 
other matters as may be appropriate.
    (e) First offenders under paragraph (a) or (b) of this section shall 
be subject to a civil penalty of $18,936, absent aggravating 
circumstances. Second and subsequent offenses by persons shall be 
subject to an appropriate civil penalty between $18,936 and $189,361, as 
determined by the agency head or his or her designee.
    (f) An imposition of a civil penalty under this section does not 
prevent the United States from seeking any other remedy that may apply 
to the same conduct that is the basis for the imposition of such civil 
penalty.

[55 FR 6737, 6750, Feb. 26, 1990, as amended at 81 FR 38935, June 15, 
2016]



Sec.  87.405  Penalty procedures.

    Agencies shall impose and collect civil penalties pursuant to the 
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. 
sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 
3812, insofar as these provisions are not inconsistent with the 
requirements herein.



Sec.  87.410  Enforcement.

    The head of each agency shall take such actions as are necessary to 
ensure that the provisions herein are vigorously implemented and 
enforced in that agency.



                          Subpart E_Exemptions



Sec.  87.500  Secretary of Defense.

    (a) The Secretary of Defense may exempt, on a case-by-case basis, a 
covered Federal action from the prohibition whenever the Secretary 
determines, in writing, that such an exemption is in the national 
interest. The Secretary shall transmit a copy of each such written 
exemption to Congress immediately after making such a determination.
    (b) The Department of Defense may issue supplemental regulations to 
implement paragraph (a) of this section.



                        Subpart F_Agency Reports



Sec.  87.600  Semi-annual compilation.

    (a) The head of each agency shall collect and compile the disclosure 
reports (see appendix B) and, on May 31 and

[[Page 473]]

November 30 of each year, submit to the Secretary of the Senate and the 
Clerk of the House of Representatives a report containing a compilation 
of the information contained in the disclosure reports received during 
the six-month period ending on March 31 or September 30, respectively, 
of that year.
    (b) The report, including the compilation, shall be available for 
public inspection 30 days after receipt of the report by the Secretary 
and the Clerk.
    (c) Information that involves intelligence matters shall be reported 
only to the Select Committee on Intelligence of the Senate, the 
Permanent Select Committee on Intelligence of the House of 
Representatives, and the Committees on Appropriations of the Senate and 
the House of Representatives in accordance with procedures agreed to by 
such committees. Such information shall not be available for public 
inspection.
    (d) Information that is classified under Executive Order 12356 or 
any successor order shall be reported only to the Committee on Foreign 
Relations of the Senate and the Committee on Foreign Affairs of the 
House of Representatives or the Committees on Armed Services of the 
Senate and the House of Representatives (whichever such committees have 
jurisdiction of matters involving such information) and to the 
Committees on Appropriations of the Senate and the House of 
Representatives in accordance with procedures agreed to by such 
committees. Such information shall not be available for public 
inspection.
    (e) The first semi-annual compilation shall be submitted on May 31, 
1990, and shall contain a compilation of the disclosure reports received 
from December 23, 1989 to March 31, 1990.
    (f) Major agencies, designated by the Office of Management and 
Budget (OMB), are required to provide machine-readable compilations to 
the Secretary of the Senate and the Clerk of the House of 
Representatives no later than with the compilations due on May 31, 1991. 
OMB shall provide detailed specifications in a memorandum to these 
agencies.
    (g) Non-major agencies are requested to provide machine-readable 
compilations to the Secretary of the Senate and the Clerk of the House 
of Representatives.
    (h) Agencies shall keep the originals of all disclosure reports in 
the official files of the agency.



Sec.  87.605  Inspector General report.

    (a) The Inspector General, or other official as specified in 
paragraph (b) of this section, of each agency shall prepare and submit 
to Congress each year, commencing with submission of the President's 
Budget in 1991, an evaluation of the compliance of that agency with, and 
the effectiveness of, the requirements herein. The evaluation may 
include any recommended changes that may be necessary to strengthen or 
improve the requirements.
    (b) In the case of an agency that does not have an Inspector 
General, the agency official comparable to an Inspector General shall 
prepare and submit the annual report, or, if there is no such comparable 
official, the head of the agency shall prepare and submit the annual 
report.
    (c) The annual report shall be submitted at the same time the agency 
submits its annual budget justifications to Congress.
    (d) The annual report shall include the following: All alleged 
violations relating to the agency's covered Federal actions during the 
year covered by the report, the actions taken by the head of the agency 
in the year covered by the report with respect to those alleged 
violations and alleged violations in previous years, and the amounts of 
civil penalties imposed by the agency in the year covered by the report.



      Sec. Appendix A to Part 87--Certification Regarding Lobbying

 Certification for Contracts, Grants, Loans, and Cooperative Agreements

    The undersigned certifies, to the best of his or her knowledge and 
belief, that:
    (1) No Federal appropriated funds have been paid or will be paid, by 
or on behalf of the undersigned, to any person for influencing or 
attempting to influence an officer or employee of an agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering

[[Page 474]]

into of any cooperative agreement, and the extension, continuation, 
renewal, amendment, or modification of any Federal contract, grant, 
loan, or cooperative agreement.
    (2) If any funds other than Federal appropriated funds have been 
paid or will be paid to any person for influencing or attempting to 
influence an officer or employee of any agency, a Member of Congress, an 
officer or employee of Congress, or an employee of a Member of Congress 
in connection with this Federal contract, grant, loan, or cooperative 
agreement, the undersigned shall complete and submit Standard Form-LLL, 
``Disclosure Form to Report Lobbying,'' in accordance with its 
instructions.
    (3) The undersigned shall require that the language of this 
certification be included in the award documents for all subawards at 
all tiers (including subcontracts, subgrants, and contracts under 
grants, loans, and cooperative agreements) and that all subrecipients 
shall certify and disclose accordingly.
    This certification is a material representation of fact upon which 
reliance was placed when this transaction was made or entered into. 
Submission of this certification is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S. 
Code. Any person who fails to file the required certification shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such failure.

            Statement for Loan Guarantees and Loan Insurance

    The undersigned states, to the best of his or her knowledge and 
belief, that:
    If any funds have been paid or will be paid to any person for 
influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with this commitment 
providing for the United States to insure or guarantee a loan, the 
undersigned shall complete and submit Standard Form-LLL, ``Disclosure 
Form to Report Lobbying,'' in accordance with its instructions.
    Submission of this statement is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S. 
Code. Any person who fails to file the required statement shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such failure.

[[Page 475]]



     Sec. Appendix B to Part 87--Disclosure Form To Report Lobbying
[GRAPHIC] [TIFF OMITTED] TC12OC91.004


[[Page 476]]


[GRAPHIC] [TIFF OMITTED] TC12OC91.005


[[Page 477]]


[GRAPHIC] [TIFF OMITTED] TC12OC91.006


[[Page 478]]





PART 91_CONSOLIDATED SUBMISSIONS FOR COMMUNITY PLANNING AND DEVELOPMENT
PROGRAMS--Table of Contents



                            Subpart A_General

Sec.
91.1 Purpose.
91.2 Applicability.
91.5 Definitions.
91.10 Consolidated program year.
91.15 Submission date.
91.20 Exceptions.

            Subpart B_Citizen Participation and Consultation

91.100 Consultation; local governments.
91.105 Citizen participation plan; local governments.
91.110 Consultation; states.
91.115 Citizen participation plan; States.

       Subpart C_Local Governments; Contents of Consolidated Plan

91.200 General.
91.205 Housing and homeless needs assessment.
91.210 Housing market analysis.
91.215 Strategic plan.
91.220 Action plan.
91.225 Certifications.
91.230 Monitoring.
91.235 Special case; abbreviated consolidated plan.
91.236 Special case; District of Columbia.

       Subpart D_State Governments; Contents of Consolidated Plan

91.300 General.
91.305 Housing and homeless needs assessment.
91.310 Housing market analysis.
91.315 Strategic plan.
91.320 Action plan.
91.325 Certifications.
91.330 Monitoring.

           Subpart E_Consortia; Contents of Consolidated Plan

91.400 Applicability.
91.401 Citizen participation plan.
91.402 Consolidated program year.
91.405 Housing and homeless needs assessment.
91.410 Housing market analysis.
91.415 Strategic plan.
91.420 Action plan.
91.425 Certifications.
91.430 Monitoring.

                  Subpart F_Other General Requirements

91.500 HUD approval action.
91.505 Amendments to the consolidated plan.
91.510 Consistency determinations.
91.515 Funding determinations by HUD.
91.520 Performance reports.
91.525 Performance review by HUD.
91.600 Waiver authority.

    Authority: 42 U.S.C. 3535(d), 3601-3619, 5301-5315, 11331-11388, 
12701-12711, 12741-12756, and 12901-12912.

    Source: 60 FR 1896, Jan. 5, 1995, unless otherwise noted.



                            Subpart A_General



Sec.  91.1  Purpose.

    (a) Overall goals. (1) The overall goal of the community planning 
and development programs covered by this part is to develop viable urban 
communities by providing decent housing and a suitable living 
environment and expanding economic opportunities principally for low- 
and moderate-income persons. The primary means towards this end is to 
extend and strengthen partnerships among all levels of government and 
the private sector, including for-profit and non-profit organizations, 
in the production and operation of affordable housing.
    (i) Decent housing includes assisting homeless persons to obtain 
appropriate housing and assisting persons at risk of becoming homeless; 
retention of the affordable housing stock; and increasing the 
availability of permanent housing in standard condition and affordable 
cost to low-income and moderate-income families, particularly to members 
of disadvantaged minorities, without discrimination on the basis of 
race, color, religion, sex, national origin, familial status, or 
disability. Decent housing also includes increasing the supply of 
supportive housing, which combines structural features and services 
needed to enable persons with special needs, including persons with HIV/
AIDS and their families, to live with dignity and independence; and 
providing housing affordable to low-income persons accessible to job 
opportunities.

[[Page 479]]

    (ii) A suitable living environment includes improving the safety and 
livability of neighborhoods; increasing access to quality public and 
private facilities and services; reducing the isolation of income groups 
within a community or geographical area through the spatial 
deconcentration of housing opportunities for persons of lower income and 
the revitalization of deteriorating or deteriorated neighborhoods; 
restoring and preserving properties of special historic, architectural, 
or aesthetic value; and conservation of energy resources.
    (iii) Expanded economic opportunities includes job creation and 
retention; establishment, stabilization and expansion of small 
businesses (including microbusinesses); the provision of public services 
concerned with employment; the provision of jobs involved in carrying 
out activities under programs covered by this plan to low-income persons 
living in areas affected by those programs and activities; availability 
of mortgage financing for low-income persons at reasonable rates using 
nondiscriminatory lending practices; access to capital and credit for 
development activities that promote the long-term economic and social 
viability of the community; and empowerment and self-sufficiency 
opportunities for low-income persons to reduce generational poverty in 
federally assisted and public housing.
    (2) The consolidated submission described in this part 91 requires 
the jurisdiction to state in one document its plan to pursue these goals 
for all the community planning and development programs, as well as for 
housing programs. It is these goals against which the plan and the 
jurisdiction's performance under the plan will be evaluated by HUD.
    (b) Functions of plan. The consolidated plan serves the following 
functions:
    (1) A planning document for the jurisdiction, which builds on a 
participatory process among citizens, organizations, businesses, and 
other stakeholders;
    (2) A submission for federal funds under HUD's formula grant 
programs for jurisdictions;
    (3) A strategy to be followed in carrying out HUD programs; and
    (4) A management tool for assessing performance and tracking 
results.

[60 FR 1896, Jan. 5, 1995, as amended at 71 FR 6961, Feb. 9, 2006]



Sec.  91.2  Applicability.

    (a) The following formula grant programs are covered by the 
consolidated plan:
    (1) The Community Development Block Grant (CDBG) programs (see 24 
CFR part 570, subparts D and I);
    (2) The Emergency Solutions Grants (ESG) program (see 24 CFR part 
576);
    (3) The HOME Investment Partnerships (HOME) program (see 24 CFR part 
92);
    (4) The Housing Opportunities for Persons With AIDS (HOPWA) program 
(see 24 CFR part 574); and
    (5) The Housing Trust Fund (HTF) program (see 24 CFR part 93).
    (b) The following programs require either that the jurisdiction 
receiving funds directly from HUD have a consolidated plan that is 
approved by HUD or that the application for HUD funds contain a 
certification that the application is consistent with a HUD-approved 
consolidated plan:
    (1) The HOPE I Public Housing Homeownership (HOPE I) program (see 24 
CFR Subtitle A, Appendix A);
    (2) The HOPE II Homeownership of Multifamily Units (HOPE II) program 
(see 24 CFR Subtitle A, Appendix B);
    (3) The HOPE III Homeownership of Single Family Homes (HOPE III) 
program (see 24 CFR part 572);
    (4) The Low-Income Housing Preservation (prepayment avoidance 
incentives) program, when administered by a State agency (see 24 CFR 
248.177);
    (5) The Supportive Housing for the Elderly (Section 202) program 
(see 24 CFR part 889);
    (6) The Supportive Housing for Persons with Disabilities program 
(see 24 CFR part 890);
    (7) The Supportive Housing program (see 24 CFR part 583);
    (8) The Single Room Occupancy Housing (SRO) program (see 24 CFR part 
882, subpart H);
    (9) The Shelter Plus Care program (see 24 CFR part 582);

[[Page 480]]

    (10) The Community Development Block Grant program--Small Cities 
(see 24 CFR part 570, subpart F);
    (11) HOME program reallocations;
    (12) Revitalization of Severely Distressed Public Housing (section 
24 of the United States Housing Act of 1937, (42 U.S.C. 1437 et seq.));
    (13) Hope for Youth: Youthbuild (see 24 CFR part 585);
    (14) The John Heinz Neighborhood Development program (see 24 CFR 
part 594);
    (15) The ``Lead-Based Paint Hazard Reduction Program (see 42 U.S.C. 
4852(o));''
    (16) Grants for Regulatory Barrier Removal Strategies and 
Implementation (section 1204, Housing and Community Development Act of 
1992 (42 U.S.C. 12705c)); and
    (17) Competitive grants under the Housing Opportunities for Persons 
With AIDS (HOPWA) program (see 24 CFR part 574).
    (c) Other programs do not require consistency with an approved 
consolidated plan. However, HUD funding allocations for the Section 8 
Certificate and Voucher Programs are to be made in a way that enables 
participating jurisdictions to carry out their consolidated plans.
    (d) The Public Housing Agency Plan submission (PHA Plan) (see 24 CFR 
part 903) includes a certification by the appropriate state or local 
official that the PHA Plan is consistent with the applicable 
consolidated plan for the jurisdiction in which the public housing 
agency is located and must describe the manner in which the applicable 
contents of the PHA Plan are consistent with the consolidated plan.

[60 FR 1896, Jan. 5, 1995, as amended at 60 FR 16379, Mar. 30, 1995; 64 
FR 50223, Sept. 15, 1999; 71 FR 6961, Feb. 9, 2006; 76 FR 75966, Dec. 5, 
2011; 80 FR 5219, Jan. 30, 2015]



Sec.  91.5  Definitions.

    The terms Affirmatively Furthering Fair Housing, Assessment of Fair 
Housing or AFH, elderly person, and HUD are defined in 24 CFR part 5.
    At risk of homelessness. (1) An individual or family who:
    (i) Has an annual income below 30 percent of median family income 
for the area, as determined by HUD;
    (ii) Does not have sufficient resources or support networks, e.g., 
family, friends, faith-based or other social networks, immediately 
available to prevent them from moving to an emergency shelter or another 
place described in paragraph (1) of the ``Homeless'' definition in this 
section; and
    (iii) Meets one of the following conditions:
    (A) Has moved because of economic reasons two or more times during 
the 60 days immediately preceding the application for homelessness 
prevention assistance;
    (B) Is living in the home of another because of economic hardship;
    (C) Has been notified in writing that their right to occupy their 
current housing or living situation will be terminated within 21 days 
after the date of application for assistance;
    (D) Lives in a hotel or motel and the cost of the hotel or motel 
stay is not paid by charitable organizations or by federal, State, or 
local government programs for low-income individuals;
    (E) Lives in a single-room occupancy or efficiency apartment unit in 
which there reside more than two persons or lives in a larger housing 
unit in which there reside more than 1.5 people per room, as defined by 
the U.S. Census Bureau;
    (F) Is exiting a publicly funded institution, or system of care 
(such as a health-care facility, a mental health facility, foster care 
or other youth facility, or correction program or institution); or
    (G) Otherwise lives in housing that has characteristics associated 
with instability and an increased risk of homelessness, as identified in 
the recipient's approved consolidated plan;
    (2) A child or youth who does not qualify as ``homeless'' under this 
section, but qualifies as ``homeless'' under section 387(3) of the 
Runaway and Homeless Youth Act (42 U.S.C. 5732a(3)), section 637(11) of 
the Head Start Act (42 U.S.C. 9832(11)), section 41403(6) of the 
Violence Against Women Act of 1994 (42 U.S.C. 14043e-2(6)), section 
330(h)(5)(A) of the Public Health Service Act (42 U.S.C. 254b(h)(5)(A)), 
section 3(m) of the Food and Nutrition Act of 2008 (7 U.S.C. 2012(m)), 
or section

[[Page 481]]

17(b)(15) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(b)(15)); or
    (3) A child or youth who does not qualify as ``homeless'' under this 
section, but qualifies as ``homeless'' under section 725(2) of the 
McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a(2)), and the 
parent(s) or guardian(s) of that child or youth if living with her or 
him.
    Certification. A written assertion, based on supporting evidence, 
that must be kept available for inspection by HUD, by the Inspector 
General of HUD, and by the public. The assertion shall be deemed to be 
accurate unless HUD determines otherwise, after inspecting the evidence 
and providing due notice and opportunity for comment.
    Chronically homeless means:
    (1) A ``homeless individual with a disability,'' as defined in 
section 401(9) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
11360(9)), who:
    (i) Lives in a place not meant for human habitation, a safe haven, 
or in an emergency shelter; and
    (ii) Has been homeless and living as described in paragraph (1)(i) 
of this definition continuously for at least 12 months or on at least 4 
separate occasions in the last 3 years, as long as the combined 
occasions equal at least 12 months and each break in homelessness 
separating the occasions included at least 7 consecutive nights of not 
living as described in paragraph (1)(i). Stays in institutional care 
facilities for fewer than 90 days will not constitute as a break in 
homelessness, but rather such stays are included in the 12-month total, 
as long as the individual was living or residing in a place not meant 
for human habitation, a safe haven, or an emergency shelter immediately 
before entering the institutional care facility;
    (2) An individual who has been residing in an institutional care 
facility, including a jail, substance abuse or mental health treatment 
facility, hospital, or other similar facility, for fewer than 90 days 
and met all of the criteria in paragraph (1) of this definition, before 
entering that facility; or
    (3) A family with an adult head of household (or if there is no 
adult in the family, a minor head of household) who meets all of the 
criteria in paragraph (1) or (2) of this definition, including a family 
whose composition has fluctuated while the head of household has been 
homeless.
    Consolidated plan or (``the plan''). The document that is submitted 
to HUD that serves as the comprehensive housing affordability strategy, 
community development plan, and submissions for funding under any of the 
Community Planning and Development formula grant programs (e.g., CDBG, 
ESG, HOME, and HOPWA), that is prepared in accordance with the process 
described in this part.
    Consortium. An organization of geographically contiguous units of 
general local government that are acting as a single unit of general 
local government for purposes of the HOME program (see 24 CFR part 92).
    Continuum of Care. The group composed of representatives of relevant 
organizations, which generally includes nonprofit homeless providers, 
victim service providers, faith-based organizations, governments, 
businesses, advocates, public housing agencies, school districts, social 
service providers, mental health agencies, hospitals, universities, 
affordable housing developers, law enforcement, organizations that serve 
homeless and formerly homeless veterans, and homeless and formerly 
homeless persons that are organized to plan for and provide, as 
necessary, a system of outreach, engagement, and assessment; emergency 
shelter; rapid re-housing; transitional housing; permanent housing; and 
prevention strategies to address the various needs of homeless persons 
and persons at risk of homelessness for a specific geographic area.
    Cost burden. The extent to which gross housing costs, including 
utility costs, exceed 30 percent of gross income, based on data 
available from the U.S. Census Bureau.
    Emergency shelter. Any facility, the primary purpose of which is to 
provide a temporary shelter for the homeless in general or for specific 
populations of the homeless, and which does not require occupants to 
sign leases or occupancy agreements.

[[Page 482]]

    Extremely low-income family. Family whose income is between 0 and 30 
percent of the median income for the area, as determined by HUD with 
adjustments for smaller and larger families, except that HUD may 
establish income ceilings higher or lower than 30 percent of the median 
for the area on the basis of HUD's findings that such variations are 
necessary because of prevailing levels of construction costs or fair 
market rents, or unusually high or low family incomes.
    Homeless. (1) An individual or family who lacks a fixed, regular, 
and adequate nighttime residence, meaning:
    (i) An individual or family with a primary nighttime residence that 
is a public or private place not designed for or ordinarily used as a 
regular sleeping accommodation for human beings, including a car, park, 
abandoned building, bus or train station, airport, or camping ground;
    (ii) An individual or family living in a supervised publicly or 
privately operated shelter designated to provide temporary living 
arrangements (including congregate shelters, transitional housing, and 
hotels and motels paid for by charitable organizations or by federal, 
state, or local government programs for low-income individuals); or
    (iii) An individual who is exiting an institution where he or she 
resided for 90 days or less and who resided in an emergency shelter or 
place not meant for human habitation immediately before entering that 
institution;
    (2) An individual or family who will imminently lose their primary 
nighttime residence, provided that:
    (i) The primary nighttime residence will be lost within 14 days of 
the date of application for homeless assistance;
    (ii) No subsequent residence has been identified; and
    (iii) The individual or family lacks the resources or support 
networks, e.g., family, friends, faith-based or other social networks 
needed to obtain other permanent housing;
    (3) Unaccompanied youth under 25 years of age, or families with 
children and youth, who do not otherwise qualify as homeless under this 
definition, but who:
    (i) Are defined as homeless under section 387 of the Runaway and 
Homeless Youth Act (42 U.S.C. 5732a), section 637 of the Head Start Act 
(42 U.S.C. 9832), section 41403 of the Violence Against Women Act of 
1994 (42 U.S.C. 14043e-2), section 330(h) of the Public Health Service 
Act (42 U.S.C. 254b(h)), section 3 of the Food and Nutrition Act of 2008 
(7 U.S.C. 2012), section 17(b) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(b)), or section 725 of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11434a);
    (ii) Have not had a lease, ownership interest, or occupancy 
agreement in permanent housing at any time during the 60 days 
immediately preceding the date of application for homeless assistance;
    (iii) Have experienced persistent instability as measured by two 
moves or more during the 60-day period immediately preceding the date of 
applying for homeless assistance; and
    (iv) Can be expected to continue in such status for an extended 
period of time because of chronic disabilities, chronic physical health 
or mental health conditions, substance addiction, histories of domestic 
violence or childhood abuse (including neglect), the presence of a child 
or youth with a disability, or two or more barriers to employment, which 
include the lack of a high school degree or General Education 
Development (GED), illiteracy, low English proficiency, a history of 
incarceration or detention for criminal activity, and a history of 
unstable employment; or
    (4) Any individual or family who:
    (i) Is fleeing, or is attempting to flee, domestic violence, dating 
violence, sexual assault, stalking, or other dangerous or life-
threatening conditions that relate to violence against the individual or 
a family member, including a child, that has either taken place within 
the individual's or family's primary nighttime residence or has made the 
individual or family afraid to return to their primary nighttime 
residence;
    (ii) Has no other residence; and
    (iii) Lacks the resources or support networks, e.g., family, 
friends, faith-based or other social networks, to obtain other permanent 
housing.
    Homeless Management Information System (HMIS). The information 
system designated by the Continuum of Care

[[Page 483]]

to comply with HUD's data collection, management, and reporting 
standards and used to collect client-level data and data on the 
provision of housing and services to homeless individuals and families 
and persons at risk of homelessness.
    Homeless person. A youth (17 years or younger) not accompanied by an 
adult (18 years or older) or an adult without children, who is homeless 
(not imprisoned or otherwise detained pursuant to an Act of Congress or 
a State law), including the following:
    (1) An individual who lacks a fixed, regular, and adequate nighttime 
residence; and
    (2) An individual who has a primary nighttime residence that is:
    (i) A supervised publicly or privately operated shelter designed to 
provide temporary living accommodations (including welfare hotels, 
congregate shelters, and transitional housing for the mentally ill);
    (ii) An institution that provides a temporary residence for 
individuals intended to be institutionalized; or
    (iii) A public or private place not designed for, or ordinarily used 
as, a regular sleeping accommodation for human beings.
    Jurisdiction. A State or unit of general local government.
    Large family. Family of five or more persons.
    Lead-based paint hazards means lead-based paint hazards as defined 
in part 35, subpart B of this title.
    Low-income families. Low-income families whose incomes do not exceed 
50 percent of the median family income for the area, as determined by 
HUD with adjustments for smaller and larger families, except that HUD 
may establish income ceilings higher or lower than 50 percent of the 
median for the area on the basis of HUD's findings that such variations 
are necessary because of prevailing levels of construction costs or fair 
market rents, or unusually high or low family incomes.
    Middle-income family. Family whose income is between 80 percent and 
95 percent of the median income for the area, as determined by HUD, with 
adjustments for smaller and larger families, except that HUD may 
establish income ceilings higher or lower than 95 percent of the median 
for the area on the basis of HUD's findings that such variations are 
necessary because of prevailing levels of construction costs or fair 
market rents, or unusually high or low family incomes. (This corresponds 
to the term ``moderate income family'' under the CHAS statute, 42 U.S.C. 
12705.)
    Moderate-income family. Family whose income does not exceed 80 
percent of the median income for the area, as determined by HUD with 
adjustments for smaller and larger families, except that HUD may 
establish income ceilings higher or lower than 80 percent of the median 
for the area on the basis of HUD's findings that such variations are 
necessary because of prevailing levels of construction costs or fair 
market rents, or unusually high or low family incomes.
    Overcrowding. For purposes of describing relative housing needs, a 
housing unit containing more than one person per room, as defined by the 
U.S. Census Bureau, for which data are made available by the Census 
Bureau. (See 24 CFR 791.402(b).)
    Person with a disability. A person who is determined to:
    (1) Have a physical, mental or emotional impairment that:
    (i) Is expected to be of long-continued and indefinite duration;
    (ii) Substantially impedes his or her ability to live independently; 
and
    (iii) Is of such a nature that the ability could be improved by more 
suitable housing conditions; or
    (2) Have a developmental disability, as defined in section 102(7) of 
the Developmental Disabilities Assistance and Bill of Rights Act (42 
U.S.C. 6001-6007); or
    (3) Be the surviving member or members of any family that had been 
living in an assisted unit with the deceased member of the family who 
had a disability at the time of his or her death.
    Poverty level family. Family with an income below the poverty line, 
as defined by the Office of Management and Budget and revised annually.
    Rapid re-housing assistance. The provision of housing relocation and 
stabilization services and short- and/or medium-term rental assistance 
as necessary to help a homeless individual or

[[Page 484]]

family move as quickly as possible into permanent housing and achieve 
stability in that housing.
    Severe cost burden. The extent to which gross housing costs, 
including utility costs, exceed 50 percent of gross income, based on 
data available from the U.S. Census Bureau.
    State. Any State of the United States and the Commonwealth of Puerto 
Rico.
    Transitional housing. A project that is designed to provide housing 
and appropriate supportive services to homeless persons to facilitate 
movement to independent living within 24 months, or a longer period 
approved by HUD. For purposes of the HOME program, there is no HUD-
approved time period for moving to independent living.
    Victim service provider. A private nonprofit organization whose 
primary mission is to provide services to victims of domestic violence, 
dating violence, sexual assault, or stalking. This term includes rape 
crisis centers, battered women's shelters, domestic violence 
transitional housing programs, and other programs.
    Unit of general local government. A city, town, township, county, 
parish, village, or other general purpose political subdivision of a 
State; an urban county; and a consortium of such political subdivisions 
recognized by HUD in accordance with the HOME program (24 CFR part 92) 
or the CDBG program (24 CFR part 570).
    Urban county. See definition in 24 CFR 570.3.

[60 FR 1896, Jan. 5, 1995; 60 FR 4861, Jan. 25, 1995, as amended at 61 
FR 5205, Feb. 9, 1996; 64 FR 50223, Sept. 15, 1999; 71 FR 6961, Feb. 9, 
2006; 76 FR 75966, 76013, Dec. 5, 2011; 80 FR 42360, July 16, 2015; 80 
FR 75804, Dec. 4, 2015]



Sec.  91.10  Consolidated program year.

    (a) Each of the following programs shall be administered by a 
jurisdiction on a single consolidated program year, established by the 
jurisdiction: CDBG, ESG, HOME, HOPWA, and HTF. Except as provided in 
paragraph (b) of this section, the program year shall run for a twelve 
month period and begin on the first calendar day of a month.
    (b) Once a program year is established, the jurisdiction may either 
shorten or lengthen its program year to change the beginning date of the 
following program year, provided that it notifies HUD in writing at 
least two months before the date the program year would have ended if it 
had not been lengthened or at least two months before the end of a 
proposed shortened program year.
    (c) See subpart E of this part for requirements concerning program 
year for units of general local government that are part of a 
consortium.

[60 FR 1896, Jan. 5, 1995, as amended at 80 FR 5219, Jan. 30, 2015]



Sec.  91.15  Submission date.

    (a) General. (1) In order to facilitate continuity in its program 
and to provide accountability to citizens, each jurisdiction should 
submit its consolidated plan to HUD at least 45 days before the start of 
its program year. (But see Sec.  92.104 of this subtitle with respect to 
newly eligible jurisdictions under the HOME program.) With the exception 
of the August 16 date noted in paragraph (a)(2) of this section, HUD may 
grant a jurisdiction an extension of the submission deadline for good 
cause.
    (2) In no event will HUD accept a submission earlier than November 
15 or later than August 16 of the federal fiscal year for which the 
grant funds are appropriated. Failure to receive the plan by August 16 
will automatically result in a loss of the CDBG funds to which the 
jurisdiction would otherwise be entitled.
    (3) A jurisdiction may have a program year that coincides with the 
federal fiscal year (e.g., October 1, 2005 through September 30, 2006, 
for federal fiscal year 2006 funds). However, the consolidated plan may 
not be submitted earlier than November 15 of the federal fiscal year and 
HUD has the period specified in Sec.  91.500 to review the consolidated 
plan.
    (4) See Sec.  91.20 for HUD field office authorization to grant 
exceptions to these provisions.
    (b) Frequency of submission. (1) The summary of the citizen 
participation and consultation process, the action plan, and the 
certifications must be submitted on an annual basis.
    (2) The housing, and homeless needs assessment, market analysis, and 
strategic plan must be submitted at least

[[Page 485]]

once every five years, or as such time agreed upon by HUD and the 
jurisdiction in order to facilitate orderly program management, 
coordinate consolidated plans with time periods used for cooperation 
agreements, other plans, or the availability of data.
    (3) A jurisdiction may make amendments that extend the time period 
covered by their plan if agreed upon by HUD.

[71 FR 6961, Feb. 9, 2006]



Sec.  91.20  Exceptions.

    The HUD Field Office may grant a jurisdiction an exception from the 
submission deadline for plans and reports and from a requirement in the 
implementation guidelines for good cause, as determined by the field 
office and reported in writing to HUD Headquarters, unless the 
requirement is required by statute or regulation.

[71 FR 6962, Feb. 9, 2006]



            Subpart B_Citizen Participation and Consultation



Sec.  91.100  Consultation; local governments.

    (a) General. (1) When preparing the AFH and the consolidated plan, 
the jurisdiction shall consult with other public and private agencies 
that provide assisted housing, health services, and social services 
(including those focusing on services to children, elderly persons, 
persons with disabilities, persons with HIV/AIDS and their families, 
homeless persons), community-based and regionally-based organizations 
that represent protected class members, and organizations that enforce 
fair housing laws. When preparing the consolidated plan, the 
jurisdiction shall also consult with public and private organizations. 
Commencing with consolidated plans submitted on or after January 1, 
2018, such consultations shall include broadband internet service 
providers, organizations engaged in narrowing the digital divide, 
agencies whose primary responsibilities include the management of flood 
prone areas, public land or water resources, and emergency management 
agencies.
    (2) When preparing the portions of the consolidated plan describing 
the jurisdiction's homeless strategy and the resources available to 
address the needs of homeless persons (particularly chronically homeless 
individuals and families, families with children, veterans and their 
families, and unaccompanied youth) and persons at risk of homelessness, 
the jurisdiction must consult with:
    (i) The Continuum(s) of Care that serve(s) the jurisdiction's 
geographic area;
    (ii) Public and private agencies that address housing, health, 
social service, victim services, employment, or education needs of low-
income individuals and families; homeless individuals and families, 
including homeless veterans; youth; and/or other persons with special 
needs;
    (iii) Publicly funded institutions and systems of care that may 
discharge persons into homelessness (such as health-care facilities, 
mental health facilities, foster care and other youth facilities, and 
corrections programs and institutions); and
    (iv) Business and civic leaders.
    (3) When preparing the portion of its consolidated plan concerning 
lead-based paint hazards, the jurisdiction shall consult with state or 
local health and child welfare agencies and examine existing data 
related to lead-based paint hazards and poisonings, including health 
department data on the addresses of housing units in which children have 
been identified as lead poisoned.
    (4) When preparing the description of priority nonhousing community 
development needs, a unit of general local government must notify 
adjacent units of general local government, to the extent practicable. 
The nonhousing community development plan must be submitted to the 
state, and, if the jurisdiction is a CDBG entitlement grantee other than 
an urban county, to the county.
    (5) The jurisdiction also should consult with adjacent units of 
general local government and local and regional government agencies, 
including local government agencies with metropolitan-wide planning and 
transportation responsibilities, particularly for

[[Page 486]]

problems and solutions that go beyond a single jurisdiction.
    (b) HOPWA. The largest city in each eligible metropolitan 
statistical area (EMSA) that is eligible to receive a HOPWA formula 
allocation must consult broadly to develop a metropolitan-wide strategy 
for addressing the needs of persons with HIV/AIDS and their families 
living throughout the EMSA. All jurisdictions within the EMSA must 
assist the jurisdiction that is applying for a HOPWA allocation in the 
preparation of the HOPWA submission.
    (c) Public housing agencies (PHAs). (1) The jurisdiction shall 
consult with local PHAs operating in the jurisdiction regarding 
consideration of public housing needs, planned programs and activities, 
the AFH, strategies for affirmatively furthering fair housing, and 
proposed actions to affirmatively further fair housing in the 
consolidated plan. (See also 24 CFR 5.158 for coordination when 
preparing an AFH jointly with a PHA.) This consultation will help 
provide a better basis for the certification by the authorized official 
that the PHA Plan is consistent with the consolidated plan and the local 
government's description of its strategy for affirmatively furthering 
fair housing and the manner in which it will address the needs of public 
housing and, where necessary, the manner in which it will provide 
financial or other assistance to a troubled PHA to improve the PHA's 
operations and remove the designation of troubled, as well as obtaining 
PHA input on addressing fair housing issues in the Public Housing and 
Housing Choice Voucher programs.
    (2) This consultation will also help ensure that activities with 
regard to affirmatively furthering fair housing, local drug elimination, 
neighborhood improvement programs, and resident programs and services, 
those funded under a PHA's program and those funded under a program 
covered by the consolidated plan, are fully coordinated to achieve 
comprehensive community development goals and affirmatively further fair 
housing. If a PHA is required to implement remedies under a Voluntary 
Compliance Agreement, the local jurisdiction should work with or consult 
with the PHA, as appropriate, to identify actions the jurisdiction may 
take, if any, to assist the PHA in implementing the required remedies. A 
local jurisdiction may use CDBG funds for eligible activities or other 
funds to implement remedies required under a Voluntary Compliance 
Agreement.
    (d) Emergency Solutions Grants (ESG). A jurisdiction that receives 
an ESG grant must consult with the Continuum of Care in determining how 
to allocate its ESG grant for eligible activities; in developing the 
performance standards for, and evaluating the outcomes of, projects and 
activities assisted by ESG funds; and in developing funding, policies, 
and procedures for the operation and administration of the HMIS.
    (e) Affirmatively Furthering Fair Housing. (1) The jurisdiction 
shall consult with community-based and regionally-based organizations 
that represent protected class members, and organizations that enforce 
fair housing laws, such as State or local fair housing enforcement 
agencies (including participants in the Fair Housing Assistance Program 
(FHAP)), fair housing organizations and other nonprofit organizations 
that receive funding under the Fair Housing Initiative Program (FHIP), 
and other public and private fair housing service agencies, to the 
extent that such entities operate within its jurisdiction. This 
consultation will help provide a better basis for the jurisdiction's 
AFH, its certification to affirmatively further fair housing, and other 
portions of the consolidated plan concerning affirmatively furthering 
fair housing.
    (2) This consultation must occur with any organizations that have 
relevant knowledge or data to inform the AFH and that are sufficiently 
independent and representative to provide meaningful feedback to a 
jurisdiction on the AFH, the consolidated plan, and their 
implementation.
    (3) Consultation must occur at various points in the fair housing 
planning process, meaning that, at a minimum, the jurisdiction will 
consult with the organizations described in this paragraph (e) in the 
development of both the AFH and the consolidated plan. Consultation on 
the consolidated plan shall specifically seek input into how the goals 
identified in an accepted AFH

[[Page 487]]

inform the priorities and objectives of the consolidated plan.

[60 FR 1896, Jan. 5, 1995, as amended at 71 FR 6962, Feb. 9, 2006; 76 FR 
75967, Dec. 5, 2011; 80 FR 42360, July 16, 2015; 81 FR 91011, Dec. 16, 
2016]



Sec.  91.105  Citizen participation plan; local governments.

    (a) Applicability and adoption of the citizen participation plan. 
(1) The jurisdiction is required to adopt a citizen participation plan 
that sets forth the jurisdiction's policies and procedures for citizen 
participation. (Where a jurisdiction, before August 17, 2015, adopted a 
citizen participation plan it, will need to amend the citizen 
participation plan to comply with provisions of this section.)
    (2) Encouragement of citizen participation. (i) The citizen 
participation plan must provide for and encourage citizens to 
participate in the development of the AFH, any revisions to the AFH, the 
consolidated plan, any substantial amendment to the consolidated plan, 
and the performance report. These requirements are designed especially 
to encourage participation by low- and moderate-income persons, 
particularly those persons living in areas designated by the 
jurisdiction as a revitalization area or in a slum and blighted area and 
in areas where CDBG funds are proposed to be used, and by residents of 
predominantly low- and moderate-income neighborhoods, as defined by the 
jurisdiction. A jurisdiction must take appropriate actions to encourage 
the participation of all its citizens, including minorities and non-
English speaking persons, as provided in paragraph (a)(4) of this 
section, as well as persons with disabilities.
    (ii) The jurisdiction shall encourage the participation of local and 
regional institutions, Continuums of Care, and other organizations 
(including businesses, developers, nonprofit organizations, 
philanthropic organizations, and community-based and faith-based 
organizations) in the process of developing and implementing the AFH and 
the consolidated plan. The jurisdiction shall encourage the 
participation of public and private organizations. Commencing with 
consolidated plans submitted on or after January 1, 2018, such 
consultations shall include broadband internet service providers, 
organizations engaged in narrowing the digital divide, agencies whose 
primary responsibilities include the management of flood prone areas, 
public land or water resources, and emergency management agencies in the 
process of developing the consolidated plan.
    (iii) The jurisdiction shall encourage, in conjunction with 
consultation with public housing agencies, the participation of 
residents of public and assisted housing developments (including any 
resident advisory boards, resident councils, and resident management 
corporations) in the process of developing and implementing the AFH and 
the consolidated plan, along with other low-income residents of targeted 
revitalization areas in which the developments are located. The 
jurisdictions shall make an effort to provide information to the PHA 
about the AFH, AFFH strategy, and consolidated plan activities related 
to its developments and surrounding communities so that the PHA can make 
this information available at the annual public hearing(s) required for 
the PHA Plan.
    (iv) The jurisdiction should explore alternative public involvement 
techniques and quantitative ways to measure efforts that encourage 
citizen participation in a shared vision for change in communities and 
neighborhoods, and the review of program performance; e.g., use of focus 
groups and the Internet.
    (3) Citizen comment on the citizen participation plan and 
amendments. The jurisdiction must provide citizens with a reasonable 
opportunity to comment on the original citizen participation plan and on 
substantial amendments to the citizen participation plan, and must make 
the citizen participation plan public. The citizen participation plan 
must be in a format accessible to persons with disabilities, upon 
request.
    (4) The citizen participation plan shall describe the jurisdiction's 
procedures for assessing its language needs and identify any need for 
translation of notices and other vital documents. At a minimum, the 
citizen participation plan shall require that the jurisdiction take 
reasonable steps to provide language assistance to ensure meaningful

[[Page 488]]

access to participation by non-English-speaking residents of the 
community.
    (b) Development of the AFH and the consolidated plan. The citizen 
participation plan must include the following minimum requirements for 
the development of the AFH and the consolidated plan:
    (1)(i) The citizen participation plan must require that at or as 
soon as feasible after the start of the public participation process the 
jurisdiction will make the HUD-provided data and any other supplemental 
information the jurisdiction plans to incorporate into its AFH available 
to its residents, public agencies, and other interested parties. The 
jurisdiction may make the HUD-provided data available to the public by 
cross-referencing to the data on HUD's Web site.
    (ii) The citizen participation plan must require that, before the 
jurisdiction adopts a consolidated plan, the jurisdiction will make 
available to residents, public agencies, and other interested parties 
information that includes the amount of assistance the jurisdiction 
expects to receive (including grant funds and program income) and the 
range of activities that may be undertaken, including the estimated 
amount that will benefit persons of low- and moderate-income. The 
citizen participation plan also must set forth the jurisdiction's plans 
to minimize displacement of persons and to assist any persons displaced, 
specifying the types and levels of assistance the jurisdiction will make 
available (or require others to make available) to persons displaced, 
even if the jurisdiction expects no displacement to occur.
    (iii) The citizen participation plan must state when and how the 
jurisdiction will make this information available.
    (2) The citizen participation plan must require the jurisdiction to 
publish the proposed AFH and the proposed consolidated plan in a manner 
that affords its residents, public agencies, and other interested 
parties a reasonable opportunity to examine its content and to submit 
comments. The citizen participation plan must set forth how the 
jurisdiction will publish the proposed AFH and the proposed consolidated 
plan and give reasonable opportunity to examine each document's content. 
The requirement for publishing may be met by publishing a summary of 
each document in one or more newspapers of general circulation, and by 
making copies of each document available on the Internet, on the 
jurisdiction's official government Web site, and as well at libraries, 
government offices, and public places. The summary must describe the 
content and purpose of the AFH or the consolidated plan (as applicable), 
and must include a list of the locations where copies of the entire 
proposed document may be examined. In addition, the jurisdiction must 
provide a reasonable number of free copies of the plan or the AFH (as 
applicable) to residents and groups that request it.
    (3) The citizen participation plan must provide for at least one 
public hearing during the development of the AFH or the consolidated 
plan (as applicable). See paragraph (e) of this section for public 
hearing requirements, generally.
    (4) The citizen participation plan must provide a period, not less 
than 30 calendar days, to receive comments from residents of the 
community on the consolidated plan or the AFH (as applicable).
    (5) The citizen participation plan shall require the jurisdiction to 
consider any comments or views of residents of the community received in 
writing, or orally at the public hearings, in preparing the final AFH or 
the final consolidated plan (as applicable). A summary of these comments 
or views, and a summary of any comments or views not accepted and the 
reasons why, shall be attached to the final AFH or the final 
consolidated plan (as applicable).
    (c) Consolidated plan amendments and AFH revisions--(1)(i) Criteria 
for amendment to consolidated plan. The citizen participation plan must 
specify the criteria the jurisdiction will use for determining what 
changes in the jurisdiction's planned or actual activities constitute a 
substantial amendment to the consolidated plan. (See Sec.  91.505.) The 
citizen participation plan must include, among the criteria for a 
substantial amendment, changes in the use of

[[Page 489]]

CDBG funds from one eligible activity to another.
    (ii) Criteria for revision to the AFH. The jurisdiction must specify 
the criteria the jurisdiction will use for determining when revisions to 
the AFH will be required. (At a minimum, the specified criteria must 
include the situations described in 24 CFR 5.164.)
    (2) The citizen participation plan must provide community residents 
with reasonable notice and an opportunity to comment on substantial 
amendments to the consolidated plan and revisions to the AFH. The 
citizen participation plan must state how reasonable notice and an 
opportunity to comment will be given. The citizen participation plan 
must provide a period, of not less than 30 calendar days, to receive 
comments on the consolidated plan substantial amendment or any revision 
to the AFH before the consolidated plan substantial amendment is 
implemented or the revised AFH is submitted to HUD for review.
    (3) The citizen participation plan shall require the jurisdiction to 
consider any comments or views of residents of the community received in 
writing, or orally at public hearings, if any, in preparing the 
substantial amendment of the consolidated plan or significant revision 
to the AFH (as applicable). A summary of these comments or views, and a 
summary of any comments or views not accepted and the reasons why, shall 
be attached to the substantial amendment of the consolidated plan or 
revision to the AFH (as applicable).
    (d) Performance reports. (1) The citizen participation plan must 
provide citizens with reasonable notice and an opportunity to comment on 
performance reports. The citizen participation plan must state how 
reasonable notice and an opportunity to comment will be given. The 
citizen participation plan must provide a period, not less than 15 days, 
to receive comments on the performance report that is to be submitted to 
HUD before its submission.
    (2) The citizen participation plan shall require the jurisdiction to 
consider any comments or views of citizens received in writing, or 
orally at public hearings in preparing the performance report. A summary 
of these comments or views shall be attached to the performance report.
    (e) Public hearings--(1)(i) Consolidated plan. The citizen 
participation plan must provide for at least two public hearings per 
year to obtain residents' views and to respond to proposals and 
questions, to be conducted at a minimum of two different stages of the 
program year. Together, the hearings must address housing and community 
development needs, development of proposed activities, proposed 
strategies and actions for affirmatively furthering fair housing 
consistent with the AFH, and a review of program performance.
    (ii) Minimum number of hearings. To obtain the views of residents of 
the community on housing and community development needs, including 
priority nonhousing community development needs and affirmatively 
furthering fair housing, the citizen participation plan must provide 
that at least one of these hearings is held before the proposed 
consolidated plan is published for comment.
    (iii) Assessment of Fair Housing. To obtain the views of the 
community on AFH-related data and affirmatively furthering fair housing 
in the jurisdiction's housing and community development programs, the 
citizen participation plan must provide that at least one public hearing 
is held before the proposed AFH is published for comment.
    (2) The citizen participation plan must state how and when adequate 
advance notice will be given to citizens of each hearing, with 
sufficient information published about the subject of the hearing to 
permit informed comment. (Publishing small print notices in the 
newspaper a few days before the hearing does not constitute adequate 
notice. Although HUD is not specifying the length of notice required, it 
would consider two weeks adequate.)
    (3) The citizen participation plan must provide that hearings be 
held at times and locations convenient to potential and actual 
beneficiaries, and with accommodation for persons with disabilities. The 
citizen participation plan must specify how it will meet these 
requirements.

[[Page 490]]

    (4) The citizen participation plan must identify how the needs of 
non-English speaking residents will be met in the case of public 
hearings where a significant number of non-English speaking residents 
can be reasonably expected to participate.
    (f) Meetings. The citizen participation plan must provide residents 
of the community with reasonable and timely access to local meetings, 
consistent with accessibility and reasonable accommodation requirements, 
in accordance with section 504 of the Rehabilitation Act of 1973 and the 
regulations at 24 CFR part 8; and the Americans with Disabilities Act 
and the regulations at 28 CFR parts 35 and 36, as applicable.
    (g) Availability to the public. The citizen participation plan must 
provide that the consolidated plan as adopted, consolidated plan 
substantial amendments, HUD-accepted AFH, revisions to the AFH, and the 
performance report will be available to the public, including the 
availability of materials in a form accessible to persons with 
disabilities, upon request. The citizen participation plan must state 
how these documents will be available to the public.
    (h) Access to records. The citizen participation plan must require 
the jurisdiction to provide residents of the community, public agencies, 
and other interested parties with reasonable and timely access to 
information and records relating to the jurisdiction's AFH, consolidated 
plan, and use of assistance under the programs covered by this part 
during the preceding 5 years.
    (i) Technical assistance. The citizen participation plan must 
provide for technical assistance to groups representative of persons of 
low- and moderate-income that request such assistance in commenting on 
the AFH and in developing proposals for funding assistance under any of 
the programs covered by the consolidated plan, with the level and type 
of assistance determined by the jurisdiction. The assistance need not 
include the provision of funds to the groups.
    (j) Complaints. The citizen participation plan shall describe the 
jurisdiction's appropriate and practicable procedures to handle 
complaints from its residents related to the consolidated plan, 
amendments, AFH, revisions, and the performance report. At a minimum, 
the citizen participation plan shall require that the jurisdiction must 
provide a timely, substantive written response to every written resident 
complaint, within an established period of time (within 15 working days, 
where practicable, if the jurisdiction is a CDBG grant recipient).
    (k) Use of citizen participation plan. The jurisdiction must follow 
its citizen participation plan.
    (l) Jurisdiction responsibility. The requirements for citizen 
participation do not restrict the responsibility or authority of the 
jurisdiction for the development and execution of its consolidated plan 
or AFH.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995; 60 FR 10427, Feb. 24, 1995, as amended at 71 
FR 6962, Feb. 9, 2006; 76 FR 75967, Dec. 5, 2011; 80 FR 42360, July 16, 
2015; 81 FR 91011, Dec. 16, 2016]



Sec.  91.110  Consultation; States.

    (a) When preparing the AFH and the consolidated plan, the State 
shall consult with public and private agencies that provide assisted 
housing (including any State housing agency administering public 
housing), health services, social services (including those focusing on 
services to children, elderly persons, persons with disabilities, 
persons with HIV/AIDS and their families, and homeless persons), and 
State-based and regionally-based organizations that represent protected 
class members and organizations that enforce fair housing laws during 
preparation of the consolidated plan. When preparing the consolidated 
plan, the State shall also consult with public and private 
organizations. Commencing with consolidated plans submitted on or after 
January 1, 2018, such consultations shall include broadband internet 
service providers, organizations engaged in narrowing the digital 
divide, agencies whose primary responsibilities include the management 
of flood prone areas, public land or water resources, and emergency 
management agencies.
    (1) With respect to public housing or Housing Choice Voucher 
programs, the State shall consult with any housing agency administering 
public housing or

[[Page 491]]

the section 8 program on a Statewide basis as well as all PHAs that 
certify consistency with the State's consolidated plan. State 
consultation with these entities may consider public housing needs, 
planned programs and activities, the AFH, strategies for affirmatively 
furthering fair housing, and proposed actions to affirmatively further 
fair housing. This consultation helps provide a better basis for the 
certification by the authorized official that the PHA Plan is consistent 
with the consolidated plan and the State's description of its strategy 
for affirmatively furthering fair housing, and the manner in which the 
State will address the needs of public housing and, where applicable, 
the manner in which the State may provide financial or other assistance 
to a troubled PHA to improve its operations and remove such designation, 
as well as in obtaining PHA input on addressing fair housing issues in 
public housing and the Housing Choice Voucher programs. This 
consultation also helps ensure that activities with regard to 
affirmatively furthering fair housing, local drug elimination, 
neighborhood improvement programs, and resident programs and services, 
funded under a PHA's program and those funded under a program covered by 
the consolidated plan, are fully coordinated to achieve comprehensive 
community development goals and affirmatively further fair housing. If a 
PHA is required to implement remedies under a Voluntary Compliance 
Agreement, the State should consult with the PHA and identify actions 
the State may take, if any, to assist the PHA in implementing the 
required remedies.
    (2) The State shall consult with State-based and regionally-based 
organizations that represent protected class members, and organizations 
that enforce fair housing laws, such as State fair housing enforcement 
agencies (including participants in the Fair Housing Assistance Program 
(FHAP)), fair housing organizations and other nonprofit organizations 
that receive funding under the Fair Housing Initiative Program (FHIP), 
and other public and private fair housing service agencies, to the 
extent such entities operate within the State. This consultation will 
help provide a better basis for the State's AFH, its certification to 
affirmatively further fair housing, and other portions of the 
consolidated plan concerning affirmatively furthering fair housing. This 
consultation should occur with organizations that have the capacity to 
engage with data informing the AFH and be sufficiently independent and 
representative to provide meaningful feedback on the AFH, the 
consolidated plan, and their implementation. Consultation must occur at 
various points in the fair housing planning process, meaning that, at a 
minimum, the jurisdiction will consult with the organizations described 
in this paragraph (a)(2) in the development of both the AFH and the 
consolidated plan. Consultation on the consolidated plan shall 
specifically seek input into how the goals identified in an accepted AFH 
inform the priorities and objectives of the consolidated plan.
    (b) When preparing the portions of the consolidated plan describing 
the State's homeless strategy and the resources available to address the 
needs of homeless persons (particularly chronically homeless individuals 
and families, families with children, veterans and their families, and 
unaccompanied youth) and persons at risk of homelessness, the State must 
consult with:
    (1) Each Continuum of Care within the state;
    (2) Public and private agencies that address housing, health, social 
services, victim services, employment, or education needs of low-income 
individuals and families; of homeless individuals and families, 
including homeless veterans; youth; and/or of other persons with special 
needs;
    (3) Publicly funded institutions and systems of care that may 
discharge persons into homelessness (such as health-care facilities, 
mental health facilities, foster care and other youth facilities, and 
corrections programs and institutions); and
    (4) Business and civic leaders.
    (c) When preparing the portion of its consolidated plan concerning 
lead-based paint hazards, the State shall consult with state or local 
health and child welfare agencies and examine existing data related to 
lead-based paint

[[Page 492]]

hazards and poisonings, including health department data on the 
addresses of housing units in which children have been identified as 
lead-poisoned.
    (d) When preparing its method of distribution of assistance under 
the CDBG program, a State must consult with local governments in 
nonentitlement areas of the state.
    (e) The State must also consult with each Continuum of Care within 
the state in determining how to allocate its ESG grant for eligible 
activities; developing the performance standards for, and evaluating the 
outcomes of, projects and activities assisted by ESG funds; and 
developing funding, policies, and procedures for the operation and 
administration of the HMIS.

[76 FR 75968, Dec. 5, 2011, as amended at 80 FR 42362, July 16, 2015; 81 
FR 91011, Dec. 16, 2016]



Sec.  91.115  Citizen participation plan; States.

    (a) Applicability and adoption of the citizen participation plan--
(1) When citizen participation plan must be amended. The State is 
required to adopt a citizen participation plan that sets forth the 
State's policies and procedures for citizen participation. (Where a 
State, before August 17, 2015, adopted a citizen participation plan, it 
will need to amend the citizen participation plan to comply with 
provisions of this section.)
    (2) Encouragement of citizen participation. (i) The citizen 
participation plan must provide for and encourage citizens to 
participate in the development of the AFH, any revision to the AFH, the 
consolidated plan, any substantial amendments to the consolidated plan, 
and the performance report. These requirements are designed especially 
to encourage participation by low- and moderate-income persons, 
particularly those living in slum and blighted areas and in areas where 
CDBG funds are proposed to be used and by residents of predominantly 
low- and moderate-income neighborhoods. A State must take appropriate 
actions to encourage the participation of all its residents, including 
minorities and non-English speaking persons, as provided in paragraph 
(a)(4) of this section, as well as persons with disabilities.
    (ii) The State shall encourage the participation of Statewide and 
regional institutions, Continuums of Care, and other organizations 
(including businesses, developers, nonprofit organizations, 
philanthropic organizations, and community-based and faith-based 
organizations) that are involved with or affected by the programs or 
activities covered by the consolidated plan in the process of developing 
and implementing the AFH and the consolidated plan. Commencing with 
consolidated plans submitted in or after January 1, 2018, the State 
shall also encourage the participation of public and private 
organizations, including broadband internet service providers, 
organizations engaged in narrowing the digital divide, agencies whose 
primary responsibilities include the management of flood prone areas, 
public land or water resources, and emergency management agencies in the 
process of developing the consolidated plan.
    (iii) The State should also explore alternative public involvement 
techniques that encourage a shared vision of change for the community 
and the review of program performance; e.g., use of focus groups and use 
of the Internet.
    (3) Citizen and local government comment on the citizen 
participation plan and amendments. The State must provide citizens and 
units of general local government a reasonable opportunity to comment on 
the original citizen participation plan and on substantial amendments to 
the citizen participation plan, and must make the citizen participation 
plan public. The citizen participation plan must be in a format 
accessible to persons with disabilities, upon request.
    (4) Language assistance for those with limited English proficiency. 
The citizen participation plan shall describe the State's procedures for 
assessing its language needs and identify any need for translation of 
notices and other vital documents. At a minimum, the citizen 
participation plan shall require the State to make reasonable efforts to 
provide language assistance to ensure meaningful access to participation 
by non-English speaking persons.

[[Page 493]]

    (b) Development of the AFH and the consolidated plan. The citizen 
participation plan must include the following minimum requirements for 
the development of the AFH and consolidated plan:
    (1)(i) The citizen participation plan must require that at or as 
soon as feasible after the start of the public participation process the 
State will make HUD-provided data and any other supplemental information 
the State intends to incorporate into its AFH available to the public, 
public agencies, and other interested parties. The State may make the 
HUD-provided data available to the public by cross-referencing to the 
data on HUD's Web site.
    (ii) The citizen participation plan must require that, before the 
State adopts an AFH or consolidated plan, the State will make available 
to its residents, public agencies, and other interested parties 
information that includes the amount of assistance the State expects to 
receive and the range of activities that may be undertaken, including 
the estimated amount that will benefit persons of low- and moderate-
income and the plans to minimize displacement of persons and to assist 
any persons displaced. The citizen participation plan must state when 
and how the State will make this information available.
    (2) The citizen participation plan must require the State to publish 
the proposed AFH and the proposed consolidated plan in a manner that 
affords residents, units of general local governments, public agencies, 
and other interested parties a reasonable opportunity to examine the 
document's content and to submit comments. The citizen participation 
plan must set forth how the State will make publicly available the 
proposed AFH and the proposed consolidated plan and give reasonable 
opportunity to examine each document's content. To ensure that the AFH, 
the consolidated plan, and the PHA plan are informed by meaningful 
community participation, program participants should employ 
communications means designed to reach the broadest audience. Such 
communications may be met by publishing a summary of each document in 
one or more newspapers of general circulation, and by making copies of 
each document available on the Internet, on the grantee's official 
government Web site, and as well at libraries, government offices, and 
public places. The summary must describe the content and purpose of the 
AFH or the consolidated plan (as applicable), and must include a list of 
the locations where copies of the entire proposed document(s) may be 
examined. In addition, the State must provide a reasonable number of 
free copies of the plan or the AFH (as applicable) to its residents and 
groups that request a copy of the plan or the AFH.
    (3) The citizen participation plan must provide for at least one 
public hearing on housing and community development needs and proposed 
strategies and actions for affirmatively furthering fair housing 
consistent with the AFH, before the proposed consolidated plan is 
published for comment. To obtain the public's views on AFH-related data 
and affirmatively furthering fair housing in the State's housing and 
community development programs, the citizen participation plan must 
provide that at least one public hearing is held before the proposed AFH 
is published for comment.
    (i) The citizen participation plan must state how and when adequate 
advance notice of the hearing will be given to residents, with 
sufficient information published about the subject of the hearing to 
permit informed comment. (Publishing small print notices in the 
newspaper a few days before the hearing does not constitute adequate 
notice. Although HUD is not specifying the length of notice required, 
HUD would consider 2 weeks adequate.)
    (ii) The citizen participation plan must provide that the hearing be 
held at a time and accessible location convenient to potential and 
actual beneficiaries, and with accommodation for persons with 
disabilities. The citizen participation plan must specify how it will 
meet these requirements.
    (iii) The citizen participation plan must identify how the needs of 
non-English speaking residents will be met in the case of a public 
hearing where a significant number of non-English speaking residents can 
be reasonably expected to participate.

[[Page 494]]

    (4) The citizen participation plan must provide a period, of not 
less than 30 calendar days, to receive comments from residents and units 
of general local government on the consolidated plan or the AFH (as 
applicable).
    (5) The citizen participation plan shall require the State to 
consider any comments or views of its residents and units of general 
local government received in writing, or orally at the public hearings, 
in preparing the final AFH and the final consolidated plan. A summary of 
these comments or views, and a summary of any comments or views not 
accepted and the reasons therefore, shall be attached to the final AFH 
or the final consolidated plan (as applicable).
    (c) Amendments--(1)(i) Criteria for amendment to consolidated plan. 
The citizen participation plan must specify the criteria the State will 
use for determining what changes in the State's planned or actual 
activities constitute a substantial amendment to the consolidated plan. 
(See Sec.  91.505.) The citizen participation plan must include, among 
the criteria for a consolidated plan, substantial amendment changes in 
the method of distribution of such funds.
    (ii) Criteria for revision to the AFH. The State must specify the 
criteria it will use for determining when revision to the AFH will be 
appropriate. (At a minimum, the specified criteria must include the 
situations described in 24 CFR 5.164.)
    (2) The citizen participation plan must provide residents and units 
of general local government with reasonable notice and an opportunity to 
comment on consolidated plan substantial amendments and any revision to 
the AFH. The citizen participation plan must state how reasonable notice 
and an opportunity to comment will be given. The citizen participation 
plan must provide a period, of not less than 30 calendar days, to 
receive comments on the consolidated plan substantial amendment or 
revision to the AFH before the consolidated plan substantial amendment 
is implemented or the revised AFH is submitted to HUD.
    (3) The citizen participation plan shall require the State to 
consider any comments or views of its residents and units of general 
local government received in writing, or orally at public hearings, if 
any, in preparing the substantial amendment of the consolidated plan or 
revision to the AFH (as applicable). A summary of these comments or 
views, and a summary of any comments or views not accepted and the 
reasons why, shall be attached to the substantial amendment of the 
consolidated plan or any revision to the AFH (as applicable).
    (d) Performance Reports. (1) The citizen participation plan must 
provide citizens with reasonable notice and an opportunity to comment on 
performance reports. The citizen participation plan must state how 
reasonable notice and an opportunity to comment will be given. The 
citizen participation plan must provide a period, not less than 15 days, 
to receive comments on the performance report that is to be submitted to 
HUD before its submission.
    (2) The citizen participation plan shall require the state to 
consider any comments or views of citizens received in writing, or 
orally at public hearings in preparing the performance report. A summary 
of these comments or views shall be attached to the performance report.
    (e) Citizen participation requirements for local governments. The 
citizen participation plan must describe the citizen participation 
requirements for units of general local government receiving CDBG funds 
from the State in 24 CFR 570.486. The citizen participation plan must 
explain how the requirements will be met.
    (f) Availability to the public. The citizen participation plan must 
provide that the consolidated plan as adopted, consolidated plan 
substantial amendments, the HUD-accepted AFH, any revision to the AFH, 
and the performance report will be available to the public, including 
the availability of materials in a form accessible to persons with 
disabilities, upon request. The citizen participation plan must state 
how these documents will be available to the public.
    (g) Access to records. The citizen participation plan must require 
the State to provide its residents, public agencies, and other 
interested parties with

[[Page 495]]

reasonable and timely access to information and records relating to the 
State's AFH, consolidated plan and use of assistance under the programs 
covered by this part during the preceding 5 years.
    (h) Complaints. The citizen participation plan shall describe the 
State's appropriate and practicable procedures to handle complaints from 
its residents related to the consolidated plan, consolidated plan 
amendments, the AFH, any revisions to the AFH, and the performance 
report. At a minimum, the citizen participation plan shall require that 
the State must provide a timely, substantive written response to every 
written resident complaint, within an established period of time (within 
15 working days, where practicable, if the State is a CDBG grant 
recipient).
    (i) Use of citizen participation plan. The State must follow its 
citizen participation plan.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995, as amended at 71 FR 6963, Feb. 9, 2006; 76 FR 
75968, Dec. 5, 2011; 80 FR 42363, July 16, 2015; 81 FR 91011, Dec. 16, 
2016]



       Subpart C_Local Governments; Contents of Consolidated Plan



Sec.  91.200  General.

    (a) A complete consolidated plan consists of the information 
required in Sec.  91.200 through Sec.  91.230, submitted in accordance 
with instructions prescribed by HUD (including tables and narratives), 
or in such other format as jointly agreed upon by HUD and the 
jurisdiction. A comprehensive housing affordability strategy consists of 
the information required in Sec.  91.200 through Sec.  91.215(e), Sec.  
91.215(h) through Sec.  91.215(l), Sec.  91.220(c), Sec.  91.220(g), 
Sec.  91.225 and Sec.  91.230.
    (b) The jurisdiction shall describe:
    (1) The lead agency or entity responsible for overseeing the 
development of the plan and the significant aspects of the process by 
which the consolidated plan was developed;
    (2) The identity of the agencies, groups, organizations, and others 
who participated in the process; and
    (3) A jurisdiction's consultations with:
    (i) The Continuum of Care that serves the jurisdiction's geographic 
area;
    (ii) Public and private agencies that address housing, health, 
social services, employment, or education needs of low-income 
individuals and families, of homeless individuals and families, of 
youth, and/or of other persons with special needs;
    (iii) Publicly funded institutions and systems of care that may 
discharge persons into homelessness (such as health-care facilities, 
mental health facilities, foster care and other youth facilities, and 
corrections programs and institutions);
    (iv) Commencing with consolidated plans submitted on or after 
January 1, 2018, public and private organizations, including broadband 
internet service providers and organizations engaged in narrowing the 
digital divide;
    (v) Commencing with consolidated plans submitted on or after January 
1, 2018, agencies whose primary responsibilities include the management 
of flood prone areas, public land or water resources, and emergency 
management agencies; and
    (vi) Other entities.
    (c) In order to facilitate citizen review and comment each year, the 
plan shall contain a concise executive summary that includes the 
objectives and outcomes identified in the plan as well as an evaluation 
of past performance. The plan shall also include a concise summary of 
the citizen participation process, public comments, and efforts made to 
broaden public participation in the development of the consolidated 
plan.

[71 FR 6963, Feb. 9, 2006, as amended at 76 FR 75968, Dec. 5, 2011; 81 
FR 91011, Dec. 16, 2016]



Sec.  91.205  Housing and homeless needs assessment.

    (a) General. The consolidated plan must provide a concise summary of 
the jurisdiction's estimated housing needs projected for the ensuing 
five-year period. Housing data included in this portion of the plan 
shall be based on U.S. Census data, as provided by HUD, as updated by 
any properly conducted local study, or any other reliable source that 
the jurisdiction clearly

[[Page 496]]

identifies, and should reflect the consultation with social service 
agencies and other entities conducted in accordance with Sec.  91.100 
and the citizen participation process conducted in accordance with Sec.  
91.105. For a jurisdiction seeking funding on behalf of an eligible 
metropolitan statistical area under the HOPWA program, the needs 
described for housing and supportive services must address the unmet 
needs of low-income persons with HIV/AIDS and their families throughout 
the eligible metropolitan statistical area.
    (b) Categories of persons affected. (1)(i) The plan shall estimate 
the number and type of families in need of housing assistance for:
    (A) Extremely low-income, low-income, moderate-income, and middle-
income families;
    (B) Renters and owners;
    (C) Elderly persons;
    (D) Single persons;
    (E) Large families;
    (F) Public housing residents;
    (G) Families on the public housing and Section 8 tenant-based 
waiting list;
    (H) Persons with HIV/AIDS and their families;
    (I) Victims of domestic violence, dating violence, sexual assault, 
and stalking;
    (J) Persons with disabilities; and
    (K) Formerly homeless families and individuals who are receiving 
rapid re-housing assistance and are nearing the termination of that 
assistance.
    (ii) The description of housing needs shall include a concise 
summary of the cost burden and severe cost burden, overcrowding 
(especially for large families), and substandard housing conditions 
being experienced by extremely low-income, low-income, moderate-income, 
and middle-income renters and owners compared to the jurisdiction as a 
whole. (The jurisdiction must define in its consolidated plan the terms 
``standard condition'' and ``substandard condition but suitable for 
rehabilitation.'')
    (2) Until the jurisdiction has submitted an AFH, which includes an 
assessment of disproportionate housing needs in accordance with 24 CFR 
5.154(d)(2)(iv), the following assessment shall continue to be included 
in the consolidated plan. For any of the income categories enumerated in 
paragraph (b)(1) of this section, to the extent that any racial or 
ethnic group has disproportionately greater need in comparison to the 
needs of that category as a whole, assessment of that specific need 
shall be included. For this purpose, disproportionately greater need 
exists when the percentage of persons in a category of need who are 
members of a particular racial or ethnic group in a category of need is 
at least 10 percentage points higher than the percentage of persons in 
the category as a whole. Once the jurisdiction has submitted an AFH, 
however, this assessment need not be included in the consolidated plan.
    (c) Persons who are homeless or at risk of homelessness. (1) The 
plan must describe, in a form prescribed by HUD, the nature and extent 
of unsheltered and sheltered homelessness, including rural homelessness, 
within the jurisdiction. At a minimum, the recipient must use data from 
the Homeless Management Information System (HMIS) and data from the 
Point-In-Time (PIT) count conducted in accordance with HUD standards.
    (i) The description must include, for each category of homeless 
persons specified by HUD (including chronically homeless individuals and 
families, families with children, veterans and their families, and 
unaccompanied youth), the number of persons experiencing homelessness on 
a given night, the number of persons who experience homelessness each 
year, the number of persons who lose their housing and become homeless 
each year, the number of persons who exit homelessness each year, the 
number of days that persons experience homelessness, and other measures 
specified by HUD.
    (ii) The plan also must contain a brief narrative description of the 
nature and extent of homelessness by racial and ethnic group, to the 
extent information is available.
    (2) The plan must include a narrative description of the 
characteristics and needs of low-income individuals and families with 
children (especially extremely low-income) who are currently

[[Page 497]]

housed but threatened with homelessness. This information may be 
evidenced by the characteristics and needs of individuals and families 
with children who are currently entering the homeless assistance system 
or appearing for the first time on the streets. The description must 
also specify particular housing characteristics that have been linked 
with instability and an increased risk of homelessness.
    (d) Other special needs. (1) The jurisdiction shall estimate, to the 
extent practicable, the number of persons who are not homeless but 
require supportive housing, including the elderly, frail elderly, 
persons with disabilities (mental, physical, developmental), persons 
with alcohol or other drug addiction, persons with HIV/AIDS and their 
families, public housing residents, and any other categories the 
jurisdiction may specify, and describe their supportive housing needs.
    (2) With respect to a jurisdiction seeking funding on behalf of an 
eligible metropolitan statistical area under the HOPWA program, the plan 
must identify the size and characteristics of the population with HIV/
AIDS and their families within the eligible metropolitan statistical 
area it will serve.
    (e) Lead-based paint hazards. The plan must estimate the number of 
housing units within the jurisdiction that are occupied by low-income 
families or moderate-income families that contain lead-based paint 
hazards, as defined in this part.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995, as amended at 61 FR 51760, Oct. 3, 1996; 71 
FR 6963, Feb. 9, 2006; 73 FR 72342, Nov. 28, 2008; 75 FR 66260, Oct. 27, 
2010; 76 FR 75968, Dec. 5, 2011; 80 FR 42364, July 16, 2015]



Sec.  91.210  Housing market analysis.

    (a) General characteristics. (1) Based on information available to 
the jurisdiction, the plan must describe the significant characteristics 
of the jurisdiction's housing market, including the supply, demand, and 
condition and cost of housing and the housing stock available to serve 
persons with disabilities, and to serve other low-income persons with 
special needs, including persons with HIV/AIDS and their families.
    (2) Data on the housing market should include, to the extent 
information is available, an estimate of the number of vacant or 
abandoned buildings and whether units in these buildings are suitable 
for rehabilitation.
    (3) The jurisdiction must also identify and describe any areas 
within the jurisdiction with concentrations of racial/ethnic minorities 
and/or low-income families, stating how it defines the terms ``area of 
low-income concentration'' and ``area of minority concentration'' for 
this purpose. The locations and degree of these concentrations must be 
identified, either in a narrative or on one or more maps.
    (4) Commencing with consolidated plans submitted on or after January 
1, 2018, the jurisdiction must also describe the broadband needs of 
housing occupied by low- and moderate-income households based on an 
analysis of data, identified by the jurisdiction, for its low- and 
moderate-income neighborhoods. These needs include the need for 
broadband wiring and for connection to the broadband service in the 
household units and the need for increased competition by having more 
than one broadband Internet service provider serve the jurisdiction.
    (5) Commencing with consolidated plans submitted on or after January 
1, 2018, the jurisdiction must also describe the vulnerability of 
housing occupied by low- and moderate-income households to increased 
natural hazard risks associated with climate change based on an analysis 
of data, findings, and methods identified by the jurisdiction in its 
consolidated plan.
    (b) Public and assisted housing. (1) The plan must describe and 
identify the public housing developments and the number of public 
housing units in the jurisdiction, the physical condition of such units, 
the restoration and revitalization needs, results from the Section 504 
needs assessment (i.e., assessment of needs of tenants and applicants on 
waiting list for accessible units, as required by 24 CFR 8.25), and the 
public housing agency's strategy for improving the management and 
operation of such public housing and for improving the living 
environment of low- and moderate-income families residing in public 
housing. The consolidated plan

[[Page 498]]

must identify the public housing developments in the jurisdictions that 
are participating in an approved PHA Plan.
    (2) The jurisdiction shall include a description of the number and 
targeting (income level and type of family served) of units currently 
assisted by local, state, or federally funded programs, and an 
assessment of whether any such units are expected to be lost from the 
assisted housing inventory for any reason, such as expiration of Section 
8 contracts.
    (c) Facilities, housing, and services for homeless persons. The plan 
must include a brief inventory of facilities, housing, and services that 
meet the needs of homeless persons within the jurisdiction, particularly 
chronically homeless individuals and families, families with children, 
veterans and their families, and unaccompanied youth.
    (1) The inventory of facilities and housing (e.g., emergency 
shelter, transitional housing, and permanent supportive housing) must be 
presented in a form specified by HUD.
    (2) The inventory of services must include both services targeted to 
homeless persons and mainstream services, such as health, mental health, 
and employment services to the extent those services are used to 
complement services targeted to homeless persons.
    (d) Special need facilities and services. The plan must describe, to 
the extent information is available, the facilities and services that 
assist persons who are not homeless but who require supportive housing, 
and programs for ensuring that persons returning from mental and 
physical health institutions receive appropriate supportive housing.
    (e) Barriers to affordable housing. The plan must explain whether 
the cost of housing or the incentives to develop, maintain, or improve 
affordable housing in the jurisdiction are affected by public policies, 
particularly by policies of the jurisdiction, including tax policies 
affecting land and other property, land use controls, zoning ordinances, 
building codes, fees and charges, growth limits, and policies that 
affect the return on residential investment.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995, as amended at 71 FR 6964, Feb. 9, 2006; 76 FR 
75969, Dec. 5, 2011; 81 FR 91012, Dec. 16, 2016]



Sec.  91.215  Strategic plan.

    (a) General. For the categories described in paragraphs (b), (c), 
(d), (e), and (f) of this section, the consolidated plan must do the 
following:
    (1) Indicate the general priorities for allocating investment 
geographically within the jurisdiction (or within the EMSA for the HOPWA 
program) and among different activities and needs, as identified in 
tables prescribed by HUD.
    (2) Describe the rationale for establishing the allocation 
priorities given to each category of priority needs, particularly among 
extremely low-income, low-income, and moderate-income households;
    (3) Identify any obstacles to meeting underserved needs;
    (4) Summarize the priorities and specific objectives the 
jurisdiction intends to initiate and/or complete during the time period 
covered by the strategic plan and how funds that are reasonably expected 
to be available will be used to address identified needs. For each 
specific objective statement, identify proposed accomplishments and 
outcomes the jurisdiction hopes to achieve in quantitative terms over a 
specified time period (e.g., one, two, three or more years), or in other 
measurable terms as identified and defined by the jurisdiction. This 
information is to be provided in accordance with guidance to be issued 
by HUD.
    (5)(i) Describe how the priorities and specific objectives of the 
jurisdiction under paragraph (a)(4) of this section will affirmatively 
further fair housing by setting forth strategies and actions consistent 
with the goals and other elements identified in an AFH conducted in 
accordance with 24 CFR 5.150 through 5.180.
    (ii) For AFH goals not addressed by these priorities and objectives, 
identify any additional objectives and priorities for affirmatively 
furthering fair housing.

[[Page 499]]

    (b) Affordable housing. With respect to affordable housing, the 
consolidated plan must include the priority housing needs table 
prescribed by HUD and must do the following:
    (1) The affordable housing section shall describe how the 
characteristics of the housing market and the severity of housing 
problems and needs of extremely low-income, low-income, and moderate-
income renters and owners, persons at risk of homelessness, and homeless 
persons identified in accordance with Sec.  91.205 provided the 
rationale for establishing allocation priorities and use of funds made 
available for rental assistance, production of new units, rehabilitation 
of existing units, or acquisition of existing units (including 
preserving affordable housing units that may be lost from the assisted 
housing inventory for any reason). Household and income types may be 
grouped together for discussion where the analysis would apply to more 
than one of them. If the jurisdiction intends to use HOME funds for 
tenant-based assistance, the jurisdiction must specify local market 
conditions that led to the choice of that option.
    (2) The affordable housing section shall include specific objectives 
that describe proposed accomplishments the jurisdiction hopes to achieve 
and must specify the number of extremely low-income, low-income, and 
moderate-income families to whom the jurisdiction will provide 
affordable housing as defined in 24 CFR 92.252 for rental housing, 24 
CFR 92.254 for homeownership, and 24 CFR 93.302 and 24 CFR 93.304 (if 
the jurisdiction receives HTF funds from the State) over a specific time 
period.
    (c) Public housing. The consolidated plan must describe the manner 
in which the plan of the jurisdiction will address the needs of public 
housing, including the need to increase the number of accessible units 
where required by a Section 504 Voluntarily Compliance Agreement. The 
consolidated plan must also describe the jurisdiction's activities to 
encourage public housing residents to become more involved in management 
and participate in homeownership. If the public housing agency is 
designated as ``troubled'' by HUD under 24 CFR part 902, the 
jurisdiction must describe the manner in which it will provide financial 
or other assistance to improve its operations and remove the 
``troubled'' designation.
    (d) Homelessness. The consolidated plan must include the priority 
homeless needs table prescribed by HUD and must describe the 
jurisdiction's strategy for reducing and ending homelessness through:
    (1) Reaching out to homeless persons (especially unsheltered 
persons) and assessing their individual needs;
    (2) Addressing the emergency shelter and transitional housing needs 
of homeless persons;
    (3) Helping homeless persons (especially chronically homeless 
individuals and families, families with children, veterans and their 
families, and unaccompanied youth) make the transition to permanent 
housing and independent living, including shortening the period of time 
individuals and families experience homelessness, facilitating access 
for homeless individuals and families to affordable housing units, and 
preventing individuals and families who were recently homeless from 
becoming homeless again; and
    (4) Helping low-income individuals and families avoid becoming 
homeless, especially extremely low-income individuals and families who 
are:
    (i) Likely to become homeless after being discharged from publicly 
funded institutions and systems of care into homelessness (such as 
health-care facilities, mental health facilities, foster care and other 
youth facilities, and corrections programs and institutions) or
    (ii) Receiving assistance from public and private agencies that 
address housing, health, social services, employment, education, or 
youth needs.
    (e) Other special needs. With respect to special needs of the non-
homeless, the consolidated plan must provide a concise summary of the 
priority housing and supportive service needs of persons who are not 
homeless but who may or may not require supportive housing (i.e., 
elderly, frail elderly, persons with disabilities (mental, physical, 
developmental), persons with alcohol or other drug addiction, persons 
with HIV/AIDS and their families, and

[[Page 500]]

public housing residents). If the jurisdiction intends to use HOME funds 
for tenant-based assistance to assist one or more of these 
subpopulations, it must specify local market conditions that led to the 
choice of this option.
    (f) Nonhousing community development plan. If the jurisdiction seeks 
assistance under the Community Development Block Grant (CDBG) program, 
the consolidated plan must provide a concise summary of the 
jurisdiction's priority non-housing community development needs eligible 
for assistance under HUD's community development programs by CDBG 
eligibility category, in accordance with a table prescribed by HUD. This 
community development component of the plan must state the 
jurisdiction's specific long-term and short-term community development 
objectives (including economic development activities that create jobs), 
which must be developed in accordance with the primary objective of the 
CDBG program to develop viable urban communities by providing decent 
housing and a suitable living environment and expanding economic 
opportunities, principally for low-income and moderate-income persons.
    (g) Neighborhood Revitalization. Jurisdictions are encouraged to 
identify locally designated areas where geographically targeted 
revitalization efforts are carried out through multiple activities in a 
concentrated and coordinated manner. In addition, a jurisdiction may 
elect to carry out a HUD-approved neighborhood revitalization strategy 
that includes the economic empowerment of low-income residents with 
respect to one or more of its areas. If HUD approves such a strategy, 
the jurisdiction can obtain greater flexibility in the use of the CDBG 
funds in the revitalization area(s) as described in 24 CFR part 570, 
subpart C. This strategy must identify long-term and short-term 
objectives (e.g., physical improvements, social initiatives and economic 
empowerment), expressing them in terms of measures of outputs and 
outcomes the jurisdiction expects to achieve in the neighborhood through 
the use of HUD programs.
    (h) Barriers to affordable housing. The consolidated plan must 
describe the jurisdiction's strategy to remove or ameliorate negative 
effects of public policies that serve as barriers to affordable housing, 
as identified in accordance with Sec.  91.210(e), except that, if a 
State requires a unit of general local government to submit a regulatory 
barrier assessment that is substantially equivalent to the information 
required under this paragraph (h), as determined by HUD, the unit of 
general local government may submit its assessment submitted to the 
State to HUD and shall be considered to have complied with this 
requirement.
    (i) Lead-based paint hazards. The consolidated plan must outline 
actions proposed or being taken to evaluate and reduce lead-based paint 
hazards and increase access to housing without such health hazards, how 
the plan for the reduction of lead-based hazards is related to the 
extent of lead poisoning and hazards, and how the plan for the reduction 
of lead-based hazards will be integrated into housing policies and 
programs.
    (j) Anti-poverty strategy. The consolidated plan must provide a 
concise summary of the jurisdiction's goals, programs, and policies for 
reducing the number of poverty-level families and how the jurisdiction's 
goals, programs, and policies for producing and preserving affordable 
housing, set forth in the housing component of the consolidated plan, 
will be coordinated with other programs and services for which the 
jurisdiction is responsible and the extent to which they will reduce (or 
assist in reducing) the number of poverty-level families, taking into 
consideration factors over which the jurisdiction has control. These 
policies may include the jurisdiction's policies for providing 
employment and training opportunities to section 3 residents pursuant to 
24 CFR part 135.
    (k) Institutional structure. The consolidated plan must provide a 
concise summary of the institutional structure, including private 
industry; nonprofit organizations; community and faith-based 
organizations; philanthropic organizations; the Continuum of Care; and 
public institutions, departments and agencies through which the 
jurisdiction will carry out its housing, homeless, and community 
development plan; a brief assessment of the

[[Page 501]]

strengths and gaps in that delivery system; and a concise summary of 
what the jurisdiction will do to overcome gaps in the institutional 
structure for carrying out its strategy for addressing its priority 
needs.
    (l) Coordination. The consolidated plan must provide a concise 
summary of the jurisdiction's activities to enhance coordination among 
the Continuum of Care, public and assisted housing providers, and 
private and governmental health, mental health, and service agencies. 
The summary must address the jurisdiction's efforts to coordinate 
housing assistance and services for homeless persons (especially 
chronically homeless individuals and families, families with children, 
veterans and their families, and unaccompanied youth) and persons who 
were recently homeless but now live in permanent housing. With respect 
to the public entities involved, the plan must describe the means of 
cooperation and coordination among the State and any units of general 
local government in the metropolitan area in the implementation of its 
consolidated plan. With respect to economic development, the 
jurisdiction should describe efforts to enhance coordination with 
private industry, businesses, developers, and social service agencies.

[71 FR 6964, Feb. 9, 2006, as amended at 76 FR 75969, Dec. 5, 2011; 80 
FR 5219, Jan. 30, 2015; 80 FR 42364, July 16, 2015]



Sec.  91.220  Action plan.

    The action plan must include the following:
    (a) Standard Form 424;
    (b) A concise executive summary that includes the objectives and 
outcomes identified in the plan as well as an evaluation of past 
performance, a summary of the citizen participation and consultation 
process (including efforts to broaden public participation) (24 CFR 
91.200 (b)), a summary of comments or views, and a summary of comments 
or views not accepted and the reasons therefore (24 CFR 91.105 (b)(5)).
    (c) Resources and objectives--(1) Federal resources. The 
consolidated plan must provide a concise summary of the federal 
resources (including grant funds and program income) expected to be made 
available. Federal resources should include Section 8 funds made 
available to jurisdictions, Low-Income Housing Tax Credits, and 
competitive McKinney-Vento Homeless Assistance Act funds, expected to be 
available to address priority needs and specific objectives identified 
in the strategic plan.
    (2) Other resources. The consolidated plan must indicate resources 
from private and state and local sources that are reasonably expected to 
be made available to address the needs identified in the plan. The plan 
must explain how federal funds will leverage those additional resources, 
including a description of how matching requirements of the HUD programs 
will be satisfied. Where the jurisdiction deems it appropriate, the 
jurisdiction may indicate publicly owned land or property located within 
the jurisdiction that may be used to address the needs identified in the 
plan;
    (3) Annual objectives. The consolidated plan must contain a summary 
of the annual objectives the jurisdiction expects to achieve during the 
forthcoming program year.
    (d) Activities to be undertaken. The action plan must provide a 
description of the activities the jurisdiction will undertake during the 
next year to address priority needs and objectives. This description of 
activities shall estimate the number and type of families that will 
benefit from the proposed activities, the specific local objectives and 
priority needs (identified in accordance with Sec.  91.215) that will be 
addressed by the activities using formula grant funds and program income 
the jurisdiction expects to receive during the program year, proposed 
accomplishments, and a target date for completion of the activity. This 
information is to be presented in the form of a table prescribed by HUD. 
The plan must also describe the reasons for the allocation priorities 
and identify any obstacles to addressing underserved needs;
    (e) Outcome measures. Each jurisdiction must provide outcome 
measures for activities included in its action plan in accordance with 
guidance to be issued by HUD.

[[Page 502]]

    (f) Geographic distribution. A description of the geographic areas 
of the jurisdiction (including areas of low-income and minority 
concentration) in which it will direct assistance during the ensuing 
program year, giving the rationale for the priorities for allocating 
investment geographically. When appropriate, jurisdictions should 
estimate the percentage of funds they plan to dedicate to target areas.
    (g) Affordable housing. The jurisdiction must specify one-year goals 
for the number of homeless, non-homeless, and special-needs households 
to be provided affordable housing using funds made available to the 
jurisdiction and one-year goals for the number of households to be 
provided affordable housing through activities that provide rental 
assistance, production of new units, rehabilitation of existing units, 
or acquisition of existing units using funds made available to the 
jurisdiction. The term affordable housing shall be as defined in 24 CFR 
92.252 for rental housing and 24 CFR 92.254 for homeownership.
    (h) Public housing. Actions it plans to take during the next year to 
address the needs of public housing and actions to encourage public 
housing residents to become more involved in management and participate 
in homeownership. If the public housing agency is designated as 
``troubled'' by HUD under part 902 of this title, the jurisdiction must 
describe the manner in which it will provide financial or other 
assistance to improve its operations and remove the ``troubled'' 
designation.
    (i) Homeless and other special needs activities. (1) The 
jurisdiction must describe its one-year goals and specific actions steps 
for reducing and ending homelessness through:
    (i) Reaching out to homeless persons (especially unsheltered 
persons) and assessing their individual needs;
    (ii) Addressing the emergency shelter and transitional housing needs 
of homeless persons; and
    (iii) Helping homeless persons (especially chronically homeless 
individuals and families, families with children, veterans and their 
families, and unaccompanied youth) make the transition to permanent 
housing and independent living, including shortening the period of time 
that individuals and families experience homelessness, facilitating 
access for homeless individuals and families to affordable housing 
units, and preventing individuals and families who were recently 
homeless from becoming homeless again; and
    (iv) Helping low-income individuals and families avoid becoming 
homeless, especially extremely low-income individuals and families who 
are:
    (A) Being discharged from publicly funded institutions and systems 
of care, such as health-care facilities, mental health facilities, 
foster care and other youth facilities, and corrections programs and 
institutions; or
    (B) Receiving assistance from public and private agencies that 
address housing, health, social services, employment, education, or 
youth needs.
    (2) The jurisdiction must specify the activities that it plans to 
undertake during the next year to address the housing and supportive 
service needs identified in accordance with Sec.  91.215(e) with respect 
to persons who are not homeless but have other special needs.
    (j) Barriers to affordable housing. Actions it plans to take during 
the next year to remove or ameliorate the negative effects of public 
policies that serve as barriers to affordable housing. Such policies, 
procedures and processes include, but are not limited to, land use 
controls, tax policies affecting land, zoning ordinances, building 
codes, fees and charges, growth limitations, and policies affecting the 
return on residential investment.
    (k)(1) Affirmatively furthering fair housing. Actions it plans to 
take during the next year that address fair housing goals identified in 
the AFH.
    (2) Other actions. Actions it plans to take during the next year to 
address obstacles to meeting underserved needs, foster and maintain 
affordable housing, evaluate and reduce lead-based paint hazards, reduce 
the number of poverty-level families, develop institutional structure, 
and enhance coordination between public and private housing and social 
service agencies (see Sec.  91.215(a), (b), (i), (j), (k), and (l)).
    (l) Program-specific requirements--(1) CDBG. (i) A jurisdiction must 
describe activities planned with respect to all

[[Page 503]]

CDBG funds expected to be available during the program year, except that 
an amount generally not to exceed 10 percent of such total available 
CDBG funds may be excluded from the funds for which eligible activities 
are described if it has been identified for the contingency of cost 
overruns.
    (ii) ``CDBG funds expected to be available during the program year'' 
includes all of the following:
    (A) The CDBG origin year grant.
    (B) Any program income expected to be received during the program 
year.
    (C) Any program income amounts not included in a prior action plan.
    (D) Any program income previously generated under a lump sum 
drawdown agreement for which a new agreement will be executed during the 
program year pursuant to 24 CFR 570.513(b).
    (E) Proceeds from Section 108 loan guarantees that will be used 
during the year to address the priority needs and specific objectives 
identified in its strategic plan.
    (F) Surplus from urban renewal settlements.
    (G) Reimbursements, other than program income, made to a local 
account.
    (H) Income from float-funded activities: The full amount of income 
expected to be generated by a float-funded activity must be shown, 
whether or not some or all of the income is expected to be received in a 
future program year. To assure that citizens understand the risks 
inherent in undertaking float-funded activities, the recipient must 
specify the total amount of program income expected to be received and 
the month(s) and year(s) that it expects the float-funded activity to 
generate such program income.
    (iii) An ``urgent needs'' activity (one that is expected to qualify 
under Sec.  570.208(c) of this title) may be included only if the 
jurisdiction identifies the activity in the action plan and certifies 
that the activity is designed to meet other community development needs 
having a particular urgency because existing conditions pose a serious 
and immediate threat to the health or welfare of the community and 
because other financial resources are not available.
    (iv) The plan shall identify the estimated amount of CDBG funds that 
will be used for activities that benefit persons of low- and moderate-
income. The information about activities shall be in sufficient detail, 
including location, to allow citizens to determine the degree to which 
they are affected.
    (2) HOME. (i) The HOME program resources that the participating 
jurisdiction must describe in the action plan are the fiscal year HOME 
allocation plus the amount of program income, repayments, and recaptured 
funds in the participating jurisdiction's HOME Investment Trust Fund 
local account (see 24 CFR 92.500(c)(1)) at the beginning of the 
participating jurisdiction's program year. The jurisdiction may choose 
to include program income, repayments, and recaptured funds that are 
expected to be received during the program year if the jurisdiction 
plans to commit these funds during the program year.
    (ii) For HOME funds, a participating jurisdiction shall describe 
other forms of investment that are not described in 24 CFR 92.205(b). 
HUD's specific written approval to the jurisdiction is required for 
other forms of investment, as provided in Sec.  92.205(b). Approval of 
the consolidated plan or action plan under Sec.  91.500 or the failure 
to disapprove the consolidated plan or action plan does not satisfy the 
requirement for specific HUD approval for other forms of investment.
    (iii) If the participating jurisdiction intends to use HOME funds 
for homebuyers, it must set forth the guidelines for resale or 
recapture, and obtain HUD's specific, written approval, as required in 
24 CFR 92.254. Approval of the consolidated plan or action plan under 
Sec.  91.500 or the failure to disapprove the consolidated plan or 
action does not satisfy the requirement for specific HUD approval for 
resale or recapture guidelines.
    (iv) If the participating jurisdiction intends to use HOME funds to 
refinance existing debt secured by multifamily housing that is being 
rehabilitated with HOME funds, it must state its refinancing guidelines 
required under 24 CFR 92.206(b). The guidelines shall describe the 
conditions under which the participating jurisdictions will refinance 
existing debt. At minimum, the guidelines must:

[[Page 504]]

    (A) Demonstrate that rehabilitation is the primary eligible activity 
and ensure that this requirement is met by establishing a minimum level 
of rehabilitation per unit or a required ratio between rehabilitation 
and refinancing.
    (B) Require a review of management practices to demonstrate that 
disinvestment in the property has not occurred; that the long-term needs 
of the project can be met; and that the feasibility of serving the 
targeted population over an extended affordability period can be 
demonstrated.
    (C) State whether the new investment is being made to maintain 
current affordable units, create additional affordable units, or both.
    (D) Specify the required period of affordability, whether it is the 
minimum 15 years or longer.
    (E) Specify whether the investment of HOME funds may be 
jurisdiction-wide or limited to a specific geographic area, such as a 
neighborhood identified in a neighborhood revitalization strategy under 
24 CFR 91.215(g) or a federally designated Empowerment Zone or 
Enterprise Community.
    (F) State that HOME funds cannot be used to refinance multifamily 
loans made or insured by any federal program, including CDBG.
    (v) If the participating jurisdiction intends to use HOME funds for 
homebuyer assistance or for rehabilitation of owner-occupied single 
family housing and does not use the HOME affordable homeownership limits 
for the area provided by HUD, it must determine 95 percent of the median 
area purchase price and set forth the information in accordance with 24 
CFR 92.254(a)(2)(iii).
    (vi) The jurisdiction must describe eligible applicants (e.g., 
categories of eligible applicants), describe its process for soliciting 
and funding applications or proposals (e.g., competition, first-come 
first-serve) and state where detailed information may be obtained (e.g., 
application packages are available at the office of the jurisdiction or 
on the jurisdiction's Web site).
    (vii) The participating jurisdiction may limit the beneficiaries or 
give preferences to a particular segment of the low-income population 
only if described in the action plan.
    (A) Any limitation or preference must not violate nondiscrimination 
requirements in 24 CFR 92.350, and the participating jurisdiction must 
not limit or give preferences to students.
    (B) A limitation or preference may include, in addition to targeting 
tenant- based rental assistance to persons with special needs, as 
provided in 24 CFR 92.209(c)(2), limiting beneficiaries or giving 
preferences to such professions as police officers, teachers, or 
artists.
    (C) The participating jurisdiction must not limit beneficiaries or 
give a preference to all employees of the jurisdiction.
    (D) The participating jurisdiction may permit rental housing owners 
to limit tenants or give a preference in accordance with 24 CFR 
92.253(d) only if such limitation or preference is described in the 
action plan.
    (viii) If the participating jurisdiction will receive funding under 
the American Dream Downpayment Initiative (ADDI) (see 24 CFR part 92, 
subpart M), it must include:
    (A) A description of the planned use of the ADDI funds;
    (B) A plan for conducting targeted outreach to residents and tenants 
of public and manufactured housing and to other families assisted by 
public housing agencies, for the purposes of ensuring that the ADDI 
funds are used to provide downpayment assistance for such residents, 
tenants, and families; and
    (C) A description of the actions to be taken to ensure the 
suitability of families receiving ADDI funds to undertake and maintain 
homeownership.
    (3) HOPWA. For HOPWA funds, the jurisdiction must specify one-year 
goals for the number of households to be provided housing through the 
use of HOPWA activities for: short-term rent, mortgage, and utility 
assistance payments to prevent homelessness of the individual or family; 
tenant-based rental assistance; and units provided in housing facilities 
that are being developed, leased, or operated with HOPWA funds and shall 
identify the method of selecting project sponsors (including providing 
full access to grassroots faith-based and other community 
organizations).

[[Page 505]]

    (4) ESG. (i) The jurisdiction must include its written standards for 
providing ESG assistance. The minimum requirements regarding these 
standards are set forth in 24 CFR 576.400(e)(1) and (e)(3).
    (ii) If the Continuum of Care for the jurisdiction's area has 
established a centralized or coordinated assessment system that meets 
HUD requirements, the jurisdiction must describe that centralized or 
coordinated assessment system. The requirements for using a centralized 
or coordinated assessment system, including the exception for victim 
service providers, are set forth under 24 CFR 576.400(d).
    (iii) The jurisdiction must identify its process for making 
subawards and a description of how the jurisdiction intends to make its 
allocation available to private nonprofit organizations (including 
community and faith-based organizations), and in the case of urban 
counties, funding to participating units of local government.
    (iv) If the jurisdiction is unable to meet the homeless 
participation requirement in 24 CFR 576.405(a), the jurisdiction must 
specify its plan for reaching out to and consulting with homeless or 
formerly homeless individuals in considering and making policies and 
decisions regarding any facilities or services that receive funding 
under ESG.
    (v) The jurisdiction must describe the performance standards for 
evaluating ESG activities.
    (vi) The jurisdiction must describe its consultation with each 
Continuum of Care that serves the jurisdiction in determining how to 
allocate ESG funds each program year; developing the performance 
standards for, and evaluating the outcomes of, projects and activities 
assisted by ESG funds; and developing funding, policies, and procedures 
for the administration and operation of the HMIS.
    (5) Housing Trust Fund. (i) If the jurisdiction receives HTF funds 
from the State under 24 CFR 93.105, the action plan must include the HTF 
allocation plan (consistent with the State's HTF requirements) that 
describes the distribution of the HTF funds, and establishes the 
application requirements and the criteria for selection of applications 
submitted by eligible recipients that meet the jurisdiction's priority 
housing needs. The plan must include the following:
    (A) The plan must identify priority factors for funding that shall 
include the following: geographic distribution which is a description of 
the geographic areas of the State (including areas of low-income and 
minority concentration) in which it will direct assistance during the 
ensuing program year; the applicant's ability to obligate HTF funds and 
undertake eligible activities in a timely manner; in the case of rental 
housing projects, the extent to which rents for units in the project are 
affordable to extremely low-income families; in the case of rental 
housing projects, the duration of the units' affordability period; the 
merits of the application in meeting the priority housing needs of the 
jurisdiction (such as housing that is accessible to transit or 
employment centers, housing that includes green building and sustainable 
development features, and housing that serves special needs 
populations); the location of existing affordable housing, and the 
extent to which the application makes use of non-federal funding 
sources.
    (B) The plan must include the requirement that the application 
contain a description of the eligible activities to be conducted with 
the HTF funds (as provided in 24 CFR 93.200) and contain a certification 
by each eligible recipient that housing units assisted with the HTF will 
comply with HTF requirements. The plan must also describe eligibility 
requirements for recipients (as defined in 24 CFR 93.2).
    (C) The plan must provide for performance goals, consistent with the 
jurisdiction's goals established under 24 CFR 91.215(b)(2).
    (D) The plan must provide the jurisdiction's rehabilitation 
standards, as required by 24 CFR 93.301(b).
    (E) If the jurisdiction intends to use HTF funds for first-time 
homebuyers, it must set forth the guidelines for resale or recapture, 
and obtain HUD's specific, written approval, as required in Sec.  
93.304(f). Approval of the consolidated plan or action plan under Sec.  
91.500

[[Page 506]]

or the failure to disapprove the consolidated plan or action plan does 
not satisfy the requirement for specific HUD approval for resale or 
recapture guidelines.
    (F) If the jurisdiction intends to use HTF funds for homebuyer 
assistance and does not use the HTF affordable homeownership limits for 
the area provided by HUD, it must determine 95 percent of the median 
area purchase price and set forth the information in accordance with 
Sec.  93.305.
    (G) The jurisdiction may limit the beneficiaries or give preferences 
to a particular segment of the extremely low- or very low-income 
population only if described in the action plan.
    (1) Any limitation or preference must not violate nondiscrimination 
requirements in 24 CFR 93.350, and the jurisdiction must not limit or 
give preferences to students.
    (2) The jurisdiction may permit rental housing owners to limit 
tenants or give a preference in accordance with 24 CFR 93.303 only if 
such limitation or preference is described in the action plan.
    (H) The plan must describe the conditions under which the 
jurisdiction will refinance existing rental housing project debt.
    (ii) [Reserved].

[71 FR 6965, Feb. 9, 2006, as amended at 76 FR 75970, Dec. 5, 2011; 78 
FR 44663, July 24, 2013; 80 FR 5219, Jan. 30, 2015; 80 FR 42364, July 
16, 2015; 80 FR 69869, Nov. 12, 2015; 81 FR 86951, Dec. 2, 2016]



Sec.  91.225  Certifications.

    (a) General. The following certifications, satisfactory to HUD, must 
be included in the annual submission to HUD. (See definition of 
``certification'' in Sec.  91.5.)
    (1) Affirmatively furthering fair housing. Each jurisdiction is 
required to submit a certification that it will affirmatively further 
fair housing, which means that it will take meaningful actions to 
further the goals identified in the AFH conducted in accordance with the 
requirements of 24 CFR 5.150 through 5.180, and that it will take no 
action that is materially inconsistent with its obligation to 
affirmatively further fair housing.
    (2) Anti-displacement and relocation plan. Each jurisdiction is 
required to submit a certification that it has in effect and is 
following a residential antidisplacement and relocation assistance plan 
in connection with any activity assisted with funding under the CDBG or 
HOME programs.
    (3) Anti-lobbying. The jurisdiction must submit a certification with 
regard to compliance with restrictions on lobbying required by 24 CFR 
part 87, together with disclosure forms, if required by that part.
    (4) Authority of jurisdiction. The jurisdiction must submit a 
certification that the consolidated plan is authorized under State and 
local law (as applicable) and that the jurisdiction possesses the legal 
authority to carry out the programs for which it is seeking funding, in 
accordance with applicable HUD regulations.
    (5) Consistency with plan. The jurisdiction must submit a 
certification that the housing activities to be undertaken with CDBG, 
HOME, ESG, and HOPWA funds are consistent with the strategic plan. Where 
the HOPWA funds are to be received by a city that is the most populous 
unit of general local government in an EMSA, it must obtain and keep on 
file certifications of consistency from the authorized public officials 
for each other locality in the EMSA in which housing assistance is 
provided.
    (6) Acquisition and relocation. The jurisdiction must submit a 
certification that it will comply with the acquisition and relocation 
requirements of the Uniform Relocation Assistance and Real Property 
Acquisition Policies Act of 1970, as amended (42 U.S.C. 4601), and 
implementing regulations at 49 CFR part 24.
    (7) Section 3. The jurisdiction must submit a certification that it 
will comply with section 3 of the Housing and Urban Development Act of 
1968 (12 U.S.C. 1701u), and implementing regulations at 24 CFR part 135.
    (b) Community Development Block Grant program. For jurisdictions 
that seek funding under CDBG, the following certifications are required:
    (1) Citizen participation. Each jurisdiction must certify that it is 
in full compliance and following a detailed citizen

[[Page 507]]

participation plan that satisfies the requirements of Sec.  91.105.
    (2) Community development plan. A certification that this 
consolidated housing and community development plan identifies community 
development and housing needs and specifies both short-term and long-
term community development objectives that have been developed in 
accordance with the primary objective of the statute authorizing the 
CDBG program, as described in 24 CFR 570.2, and requirements of this 
part and 24 CFR part 570.
    (3) Following a plan. A certification that the jurisdiction is 
following a current consolidated plan (or Comprehensive Housing 
Affordability Strategy) that has been approved by HUD.
    (4) Use of funds. A certification that the jurisdiction has complied 
with the following criteria:
    (i) With respect to activities expected to be assisted with CDBG 
funds, the Action Plan has been developed so as to give the maximum 
feasible priority to activities that will benefit low- and moderate-
income families or aid in the prevention or elimination of slums or 
blight. The plan may also include CDBG-assisted activities that are 
certified to be designed to meet other community development needs 
having particular urgency because existing conditions pose a serious and 
immediate threat to the health or welfare of the community where other 
financial resources are not available to meet such needs;
    (ii) The aggregate use of CDBG funds, including section 108 
guaranteed loans, during a period specified by the jurisdiction, 
consisting of one, two, or three specific consecutive program years, 
shall principally benefit low- and moderate-income families in a manner 
that ensures that at least 70 percent of the amount is expended for 
activities that benefit such persons during the designated period (see 
24 CFR 570.3 for definition of ``CDBG funds''); and
    (iii) The jurisdiction will not attempt to recover any capital costs 
of public improvements assisted with CDBG funds, including Section 108 
loan guaranteed funds, by assessing any amount against properties owned 
and occupied by persons of low- and moderate-income, including any fee 
charged or assessment made as a condition of obtaining access to such 
public improvements. However, if CDBG funds are used to pay the 
proportion of a fee or assessment attributable to the capital costs of 
public improvements (assisted in part with CDBG funds) financed from 
other revenue sources, an assessment or charge may be made against the 
property with respect to the public improvements financed by a source 
other than CDBG funds. In addition, with respect to properties owned and 
occupied by moderate-income (but not low-income) families, an assessment 
or charge may be made against the property with respect to the public 
improvements financed by a source other than CDBG funds if the 
jurisdiction certifies that it lacks CDBG funds to cover the assessment.
    (5) Excessive force. A certification that the jurisdiction has 
adopted and is enforcing:
    (i) A policy prohibiting the use of excessive force by law 
enforcement agencies within its jurisdiction against any individuals 
engaged in non-violent civil rights demonstrations; and
    (ii) A policy of enforcing applicable State and local laws against 
physically barring entrance to or exit from, a facility or location that 
is the subject of such non-violent civil rights demonstrations within 
its jurisdiction.
    (6) Compliance with anti-discrimination laws. The jurisdiction must 
submit a certification that the grant will be conducted and administered 
in conformity with title VI of the Civil Rights Act of 1964 (42 U.S.C. 
2000d), the Fair Housing Act (42 U.S.C. 3601-3619), and implementing 
regulations.
    (7) Compliance with lead-based paint procedures. The jurisdiction 
must submit a certification that its activities concerning lead-based 
paint will comply with the requirements of part 35, subparts A, B, J, K, 
and R of this title.
    (8) Compliance with laws. A certification that the jurisdiction will 
comply with applicable laws.
    (c) ESG. For jurisdictions that seek ESG funding under 24 CFR part 
576, the following certifications are required:
    (1) If an emergency shelter's rehabilitation costs exceed 75 percent 
of the value of the building before rehabilitation, the jurisdiction 
will maintain the

[[Page 508]]

building as a shelter for homeless individuals and families for a 
minimum of 10 years after the date the building is first occupied by a 
homeless individual or family after the completed rehabilitation;
    (2) If the cost to convert a building into an emergency shelter 
exceeds 75 percent of the value of the building after conversion, the 
jurisdiction will maintain the building as a shelter for homeless 
individuals and families for a minimum of 10 years after the date the 
building is first occupied by a homeless individual or family after the 
completed conversion;
    (3) In all other cases where ESG funds are used for renovation, the 
jurisdiction will maintain the building as a shelter for homeless 
individuals and families for a minimum of 3 years after the date the 
building is first occupied by a homeless individual or family after the 
completed renovation;
    (4) In the case of assistance involving shelter operations or 
essential services related to street outreach or emergency shelter, the 
jurisdiction will provide services or shelter to homeless individuals 
and families for the period during which the ESG assistance is provided, 
without regard to a particular site or structure, so long as the 
jurisdiction serves the same type of persons (e.g., families with 
children, unaccompanied youth, disabled individuals, or victims of 
domestic violence) or persons in the same geographic area;
    (5) Any renovation carried out with ESG assistance shall be 
sufficient to ensure that the building involved is safe and sanitary;
    (6) The jurisdiction will assist homeless individuals in obtaining 
permanent housing, appropriate supportive services (including medical 
and mental health treatment, victim services, counseling, supervision, 
and other services essential for achieving independent living), and 
other Federal, State, local, and private assistance available for these 
individuals;
    (7) The jurisdiction will obtain matching amounts required under 24 
CFR 576.201;
    (8) The jurisdiction has established and is implementing procedures 
to ensure the confidentiality of records pertaining to any individual 
provided family violence prevention or treatment services under any 
project assisted under the ESG program, including protection against the 
release of the address or location of any family violence shelter 
project, except with the written authorization of the person responsible 
for the operation of that shelter;
    (9) To the maximum extent practicable, the jurisdiction will 
involve, through employment, volunteer services, or otherwise, homeless 
individuals and families in constructing, renovating, maintaining, and 
operating facilities assisted under the ESG program, in providing 
services assisted under the program, and in providing services for 
occupants of facilities assisted under the program;
    (10) All activities the jurisdiction undertakes with assistance 
under ESG are consistent with the jurisdiction's consolidated plan; and
    (11) The jurisdiction will establish and implement, to the maximum 
extent practicable and where appropriate, policies and protocols for the 
discharge of persons from publicly funded institutions or systems of 
care (such as health-care facilities, mental health facilities, foster 
care or other youth facilities, or correction programs and institutions) 
in order to prevent this discharge from immediately resulting in 
homelessness for these persons.
    (d) HOME program. Each participating jurisdiction must provide the 
following certifications:
    (1) If it plans to use HOME funds for tenant-based rental 
assistance, a certification that rental-based assistance is an essential 
element of its consolidated plan;
    (2) A certification that it is using and will use HOME funds for 
eligible activities and costs, as described in Sec. Sec.  92.205 through 
92.209 of this subtitle and that it is not using and will not use HOME 
funds for prohibited activities, as described in Sec.  92.214 of this 
subtitle; and
    (3) A certification that before committing funds to a project, the 
participating jurisdiction will evaluate the project in accordance with 
guidelines that it adopts for this purpose and will not invest any more 
HOME funds in

[[Page 509]]

combination with other federal assistance than is necessary to provide 
affordable housing.
    (e) Housing Opportunities for Persons With AIDS. For jurisdictions 
that seek funding under the Housing Opportunities for Persons With AIDS 
program, a certification is required by the jurisdiction that:
    (1) Activities funded under the program will meet urgent needs that 
are not being met by available public and private sources; and
    (2) Any building or structure assisted under that program shall be 
operated for the purpose specified in the plan:
    (i) For a period of not less than 10 years in the case of assistance 
involving new construction, substantial rehabilitation, or acquisition 
of a facility; or
    (ii) For a period of not less than three years in the case of 
assistance involving non-substantial rehabilitation or repair of a 
building or structure.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995; 60 FR 4861, Jan. 25, 1995, as amended at 64 
FR 50224, Sept. 15, 1999; 71 FR 6967, Feb. 9, 2006; 72 FR 73493, Dec. 
27, 2007; 76 FR 75970, Dec. 5, 2011; 80 FR 42365, July 16, 2015]



Sec.  91.230  Monitoring.

    The plan must describe the standards and procedures that the 
jurisdiction will use to monitor activities carried out in furtherance 
of the plan, including strategies and actions that address the fair 
housing issues and goals identified in the AFH, and that the 
jurisdiction will use to ensure long-term compliance with requirements 
of the programs involved, including civil rights related program 
requirements, minority business outreach, and the comprehensive planning 
requirements.

[80 FR 42365, July 16, 2015]



Sec.  91.235  Special case; abbreviated consolidated plan.

    (a) Who may submit an abbreviated plan? A jurisdiction that is not a 
CDBG entitlement community under 24 CFR part 570, subpart D, and is not 
expected to be a participating jurisdiction in the HOME program under 24 
CFR part 92, as well as an Insular Area that is a HOME or CDBG grantee, 
may submit an abbreviated consolidated plan that is appropriate to the 
types and amounts of assistance sought from HUD, instead of a full 
consolidated plan.
    (b) When is an abbreviated plan necessary?--(1) Jurisdiction. When a 
jurisdiction that is permitted to use an abbreviated plan applies to HUD 
for funds under a program that requires an approved consolidated plan 
(see Sec.  91.2(b)), it must obtain approval of an abbreviated plan (or 
full consolidated plan) and submit a certification that the housing 
activities are consistent with the plan.
    (2) Other applicants. When an eligible applicant other than a 
jurisdiction (e.g., a public housing agency or nonprofit organization) 
seeks to apply for funding under a program requiring certification of 
consistency with an approved consolidated plan, the jurisdiction--if it 
is permitted to use an abbreviated plan--may prepare an abbreviated plan 
appropriate to the project. See Sec.  91.510.
    (3) Limitation. For the HOME program, an abbreviated consolidated 
plan is permitted only with respect to reallocations to other than 
participating jurisdictions (see 24 CFR part 92, subpart J), and for 
Insular Area grantees that submit an abbreviated consolidated plan 
pursuant to 24 CFR 570.440. For the CDBG program, an abbreviated plan 
may be submitted for the HUD-administered Small Cities program (except 
that an abbreviated plan may not be submitted for the HUD-administered 
Small Cities program in the state of Hawaii), and for Insular Area 
grantees pursuant to 24 CFR 570.440.
    (c) What is an abbreviated plan?--(1) Assessment of needs, 
resources, and planned activities. An abbreviated plan must contain 
sufficient information about needs, resources, and planned activities to 
address the needs to cover the type and amount of assistance anticipated 
to be funded by HUD. The plan must describe how the jurisdiction will 
affirmatively further fair housing by addressing issues identified in an 
AFH conducted in accordance with 24 CFR 5.150 through 5.180.

[[Page 510]]

    (2) Nonhousing community development plan. If the jurisdiction seeks 
assistance under the Community Development Block Grant program, it must 
describe the jurisdiction's priority non-housing community development 
needs eligible for assistance under HUD's community development programs 
by CDBG eligibility category, reflecting the needs of families for each 
type of activity, as appropriate, in terms of dollar amounts estimated 
to meet the priority need for the type of activity, in accordance with a 
table prescribed by HUD. This community development component of the 
plan must state the jurisdiction's specific long-term and short-term 
community development objectives (including economic development 
activities that create jobs), which must be developed in accordance with 
the statutory goals described in Sec.  91.1 and the primary objective of 
the Housing and Community Development Act of 1974, 42 U.S.C. 5301(c), of 
the development of viable urban communities by providing decent housing 
and a suitable living environment and expanding economic opportunities, 
principally for low-income and moderate-income persons.
    (3) Separate application for funding. In addition to submission of 
the abbreviated consolidated plan, an application must be submitted for 
funding is sought under a competitive program. The applicable program 
requirements are found in the regulations for the program and in the 
Notice of Funding Availability published for the applicable fiscal year. 
For the CDBG Small Cities program, the applicable regulations are found 
at 24 CFR part 570, subpart F.
    (4) Submissions, certifications, amendments, and performance 
reports. An Insular Area grantee that submits an abbreviated 
consolidated plan under this section must comply with the submission, 
certification, amendment, and performance report requirements of 24 CFR 
570.440. This includes certification that the grantee will affirmatively 
further fair housing, which means that it will take meaningful actions 
to further the goals identified in an AFH conducted in accordance with 
the requirements of 24 CFR 5.150 through 5.180, and that it will take no 
action that is materially inconsistent with its obligation to 
affirmatively further fair housing.
    (d) What consultation is applicable? The jurisdiction must make 
reasonable efforts to consult with appropriate public and private social 
service agencies regarding the needs to be served with the funding 
sought from HUD. The jurisdiction must attempt some consultation with 
the State. (Section 91.100 does not apply.)
    (e) Citizen Participation. An Insular Area grantee that submits an 
abbreviated consolidated plan under this section must comply with the 
citizen participation requirements of 24 CFR 570.441.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995; 60 FR 4861, Jan. 25, 1995; 72 FR 12535, Mar. 
15, 2007; 80 FR 42365, July 16, 2015]



Sec.  91.236  Special case; District of Columbia.

    For consolidated planning purposes, the District of Columbia must 
follow the requirements applicable to local jurisdictions (Sec. Sec.  
91.100, 91.105, and 91.200 through 91.230). In addition, it must submit 
the component of the State requirements dealing with the use of Low 
Income Housing Tax Credits (Sec.  91.315(j)).

(Approved by the Office of Management and Budget under control number 
2506-0117)



       Subpart D_State Governments; Contents of Consolidated Plan



Sec.  91.300  General.

    (a) A complete consolidated plan consists of the information 
required in Sec.  91.300 through Sec.  91.330, submitted in accordance 
with instructions prescribed by HUD (including tables and narratives), 
or in such other format as jointly agreed upon by HUD and the state. A 
comprehensive housing affordability strategy consists of the information 
required in Sec. Sec.  91.300 through 91.315(e), 91.315(h) through 
91.315(m), 91.320(c), 91.320 (g), 91.225 and 91.330.
    (b) The State shall describe:
    (1) The lead agency or entity responsible for overseeing the 
development of the plan and the significant aspects of

[[Page 511]]

the process by which the consolidated plan was developed;
    (2) The identity of the agencies, groups, organizations, and others 
who participated in the process;
    (3) The State's consultations with:
    (i) Continuums of Care;
    (ii) Public and private agencies that address housing, health, 
social services, employment, or education needs of low-income 
individuals and families, homeless individuals and families, youth, and/
or other persons with special needs;
    (iii) Publicly funded institutions and systems of care that may 
discharge persons into homelessness (such as health-care facilities, 
mental health facilities, foster care and other youth facilities, and 
corrections programs and institutions);
    (iv) Commencing with consolidated plans submitted on or after 
January 1, 2018, public and private organizations, including broadband 
internet service providers and organizations engaged in narrowing the 
digital divide;
    (v) Commencing with consolidated plans submitted on or after January 
1, 2018, agencies whose primary responsibilities include the management 
of flood prone areas, public land or water resources, and emergency 
management agencies; and
    (vi) Other entities.
    (c) The plan shall contain a concise executive summary that includes 
the objectives and outcomes identified in the plan as well as an 
evaluation of past performance. The plan shall also contain a concise 
summary of the citizen participation process, public comments, and 
efforts made to broaden public participation in the development of the 
consolidated plan.

[71 FR 6967, Feb. 9, 2006, as amended at 76 FR 75970, Dec. 5, 2011; 81 
FR 91012, Dec. 16, 2016]



Sec.  91.305  Housing and homeless needs assessment.

    (a) General. The consolidated plan must provide a concise summary of 
the state's estimated housing needs projected for the ensuing five-year 
period. Housing data included in this portion of the plan shall be based 
on U.S. Census data, as provided by HUD, as updated by any properly 
conducted local study, or any other reliable source that the state 
clearly identifies and should reflect the consultation with social 
service agencies and other entities conducted in accordance with Sec.  
91.110 and the citizen participation process conducted in accordance 
with Sec.  91.115. For a state seeking funding under the HOPWA program, 
the needs described for housing and supportive services must address the 
unmet needs of low-income persons with HIV/AIDS and their families in 
areas outside of eligible metropolitan statistical areas.
    (b) Categories of persons affected. (1)(i) The plan shall estimate 
the number and type of families in need of housing assistance for:
    (A) Extremely low-income, low-income, moderate-income, and middle-
income families;
    (B) Renters and owners;
    (C) Elderly persons;
    (D) Single persons;
    (E) Large families;
    (F) Public housing residents;
    (G) Families on the public housing and Section 8 tenant-based 
waiting list;
    (H) Persons with HIV/AIDS and their families;
    (I) Victims of domestic violence, dating violence, sexual assault, 
and stalking;
    (J) Persons with disabilities; and
    (K) Formerly homeless families and individuals who are receiving 
rapid re-housing assistance and are nearing the termination of that 
assistance.
    (ii) The description of housing needs shall include a concise 
summary of the cost burden and severe cost burden, overcrowding 
(especially for large families), and substandard housing conditions 
being experienced by extremely low-income, low-income, moderate-income, 
and middle-income renters and owners compared to the state as a whole. 
(The state must define in its consolidated plan the terms ``standard 
condition'' and ``substandard condition but suitable for 
rehabilitation.'')
    (2) Until the jurisdiction has submitted an AFH, which includes an 
assessment of disproportionate housing needs in accordance with 24 CFR 
5.154(d)(2)(iv), the following assessment shall continue to be included 
in the

[[Page 512]]

consolidated plan. For any of the income categories enumerated in 
paragraph (b)(1) of this section, to the extent that any racial or 
ethnic group has disproportionately greater need in comparison to the 
needs of that category as a whole, assessment of that specific need 
shall be included. For this purpose, disproportionately greater need 
exists when the percentage of persons in a category of need who are 
members of a particular racial or ethnic group in a category of need is 
at least 10 percentage points higher than the percentage of persons in 
the category as a whole. Once the jurisdiction has submitted an AFH, 
however, this assessment need not be included in the consolidated plan.
    (c) Persons who are homeless or at risk of homelessness. (1) The 
plan must describe, in a form prescribed by HUD, the nature and extent 
of homelessness, including rural homelessness, within the state.
    (i) The description must include, for each category of homeless 
persons specified by HUD (including chronically homeless individuals and 
families, families with children, veterans and their families, and 
unaccompanied youth), the number of persons experiencing homelessness on 
a given night, the number of persons who experience homelessness each 
year, the number of persons who lose their housing and become homeless 
each year, the number of persons who exit homelessness each year, and 
the number of days that persons experience homelessness, and any other 
measures specified by HUD.
    (ii) The plan also must contain a brief narrative description of the 
nature and extent of homelessness by racial and ethnic group, to the 
extent that information is available.
    (2) The plan must include a narrative description of the 
characteristics and needs of low-income individuals and families with 
children (especially extremely low-income) who are currently housed but 
threatened with homelessness. This information may be evidenced by the 
characteristics and needs of individuals and families with children who 
are currently entering the homeless assistance system or appearing for 
the first time on the streets. The description must also include 
specific housing characteristics linked to instability and an increased 
risk of homelessness.
    (d) Other special needs. (1) The State shall estimate, to the extent 
practicable, the number of persons who are not homeless but require 
supportive housing, including the elderly, frail elderly, persons with 
disabilities (mental, physical, developmental), persons with alcohol or 
other drug addiction, persons with HIV/AIDS and their families, and any 
other categories the State may specify, and describe their supportive 
housing needs.
    (2) With respect to a State seeking assistance under the HOPWA 
program, the plan must identify the size and characteristics of the 
population with HIV/AIDS and their families within the area it will 
serve.
    (e) Lead-based paint hazards. The plan must estimate the number of 
housing units within the State that are occupied by low-income families 
or moderate-income families that contain lead-based paint hazards, as 
defined in this part.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995, as amended at 61 FR 51760, Oct. 3, 1996; 71 
FR 6967, Feb. 9, 2006; 73 FR 72342, Nov. 28, 2008; 75 FR 66260, Oct. 27, 
2010; 76 FR 75970, Dec. 5, 2011; 80 FR 42365, July 16, 2015]



Sec.  91.310  Housing market analysis.

    (a) General characteristics. (1) Based on data available to the 
State, the plan must describe the significant characteristics of the 
State's housing markets (including such aspects as the supply, demand, 
and condition and cost of housing).
    (2) Commencing with consolidated plans submitted on or after January 
1, 2018, the State must describe the broadband needs of housing in the 
State based on an analysis of data identified by the State. These needs 
include the need for broadband wiring and for connection to the 
broadband service in the household units, the need for increased 
competition by having more than one broadband Internet service provider 
serve the jurisdiction.
    (3) Commencing with consolidated plans submitted on or after January 
1, 2018, the State must also describe the

[[Page 513]]

vulnerability of housing occupied by low- and moderate-income households 
to increased natural hazard risks due to climate change based on an 
analysis of data, findings, and methods identified by the State in its 
consolidated plan.
    (b) Facilities, housing, and services for homeless persons. The plan 
must include a brief inventory of facilities and services that meet the 
needs of homeless persons within the state, particularly chronically 
homeless individuals and families, families with children, veterans and 
their families, and unaccompanied youth.
    (1) The inventory of facilities and housing (e.g., emergency 
shelter, transitional housing, and permanent supportive housing) must be 
presented in a form specified by HUD.
    (2) The inventory of services must include both services targeted to 
homeless persons and mainstream services, such as health, mental health, 
and employment services to the extent those services are used to 
complement services targeted to homeless persons.
    (c) Special need facilities and services. The plan must describe, to 
the extent information is available, the facilities and services that 
assist persons who are not homeless but who require supportive housing, 
and programs for ensuring that persons returning from mental and 
physical health institutions receive appropriate supportive housing.
    (d) Barriers to affordable housing. The plan must explain whether 
the cost of housing or the incentives to develop, maintain, or improve 
affordable housing in the State are affected by its policies, including 
tax policies affecting land and other property, land use controls, 
zoning ordinances, building codes, fees and charges, growth limits, and 
policies that affect the return on residential investment.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995; 60 FR 4861, Jan. 25, 1995, as amended at 71 
FR 6967, Feb. 9, 2006; 76 FR 75971, Dec. 5, 2011; 81 FR 91012, Dec. 16, 
2016]



Sec.  91.315  Strategic plan.

    (a) General. For the categories described in paragraphs (b), (c), 
(d), (e), and (f) of this section, the consolidated plan must do the 
following:
    (1) Indicate the general priorities for allocating investment 
geographically within the state and among different activities and 
needs.
    (2) Describe the rationale for establishing the allocation 
priorities given to each category of priority needs, particularly among 
extremely low-income, low-income, and moderate-income households.
    (3) Identify any obstacles to meeting underserved needs.
    (4) Summarize the priorities and specific objectives the state 
intends to initiate and/or complete during the time period covered by 
the strategic plan describing how the proposed distribution of funds 
will address identified needs. For each specific objective statement, 
identify proposed accomplishments and outcomes the state hopes to 
achieve in quantitative terms over a specified time period (e.g., one, 
two, three or more years), or in other measurable terms as identified 
and defined by the state. This information shall be provided in 
accordance with guidance to be issued by HUD.
    (5)(i) Describe how the priorities and specific objectives of the 
State under Sec.  91.315(a)(4) will affirmatively further fair housing 
by setting forth strategies and actions consistent with the goals and 
other elements identified in an AFH conducted in accordance with 24 CFR 
5.150 through 5.180.
    (ii) For AFH goals not addressed by these priorities and objectives, 
identify any additional objectives and priorities for affirmatively 
furthering fair housing.
    (b) Affordable housing. With respect to affordable housing, the 
consolidated plan must include the priority housing needs table 
prescribed by HUD and the following:
    (1) The affordable housing section shall describe how the 
characteristics of the housing market and the severity of housing 
problems and needs of extremely low-income, low-income, and moderate-
income renters and owners, persons at risk of homelessness, and homeless 
persons identified in accordance with Sec.  91.305 provided the 
rationale for establishing allocation priorities and use of funds made 
available

[[Page 514]]

for rental assistance, production of new units, rehabilitation of 
existing units, or acquisition of existing units (including preserving 
affordable housing units that may be lost from the assisted housing 
inventory for any reason). Household and income types may be grouped 
together for discussion where the analysis would apply to more than one 
of them. If the State intends to use HOME funds for tenant-based rental 
assistance, the State must specify local market conditions that led to 
the choice of that option.
    (2) The affordable housing section shall include specific objectives 
that describe proposed accomplishments the State hopes to achieve and 
must specify the number of extremely low-income, low-income, and 
moderate-income families to which the State will provide affordable 
housing, as defined in 24 CFR 92.252 for rental housing, 24 CFR 92.254 
for homeownership, and 24 CFR 93.302 for rental housing and 24 CFR 
93.304 for homeownership over a specific time period.
    (c) Public housing. With respect to public housing, the consolidated 
plan must do the following:
    (1) Resident initiatives. For a state that has a state housing 
agency administering public housing funds, the consolidated plan must 
describe the state's activities to encourage public housing residents to 
become more involved in management and participate in homeownership;
    (2) Public housing needs. The consolidated plan must describe the 
manner in which the plan of the state will address the needs of public 
housing; and
    (3) Troubled public housing agencies. If a public housing agency 
located within a state is designated as ``troubled'' by HUD under part 
902 of this title, the strategy for the state or unit of local 
government in which any troubled public housing agency is located must 
describe the manner in which the state or unit of general local 
government will provide financial or other assistance to improve the 
public housing agency's operations and remove the ``troubled'' 
designation. A state is not required to describe the manner in which 
financial or other assistance is provided if the troubled public housing 
agency is located entirely within the boundaries of a unit of general 
local government that must submit a consolidated plan to HUD.
    (d) Homelessness. The consolidated plan must include the priority 
homeless needs table prescribed by HUD and must describe the State's 
strategy for reducing and ending homelessness through:
    (1) Reaching out to homeless persons (especially unsheltered 
persons) and assessing their individual needs;
    (2) Addressing the emergency shelter and transitional housing needs 
of homeless persons;
    (3) Helping homeless persons (especially chronically homeless 
individuals and families, families with children, veterans and their 
families, and unaccompanied youth) make the transition to permanent 
housing and independent living, including shortening the period of time 
individuals and families experience homelessness, facilitating access 
for homeless individuals and families to affordable housing units, and 
preventing individuals and families who were recently homeless from 
becoming homeless again; and
    (4) Helping low-income individuals and families avoid becoming 
homeless, especially extremely low-income individuals and families who 
are:
    (i) Likely to become homeless after being discharged from publicly 
funded institutions and systems of care (such as health-care facilities, 
mental health facilities, foster care and other youth facilities, and 
corrections programs and institutions); or
    (ii) Receiving assistance from public or private agencies that 
address housing, health, social services, employment, education, or 
youth needs.
    (e) Other special needs. With respect to supportive needs of the 
non-homeless, the consolidated plan must provide a concise summary of 
the priority housing and supportive service needs of persons who are not 
homeless but require supportive housing, i.e., elderly, frail elderly, 
persons with disabilities (mental, physical, developmental), persons 
with alcohol or other drug addiction, persons with HIV/AIDS and their 
families, and public housing residents. If the state intends to use HOME 
funds for tenant-based assistance to assist one or more of these 
subpopulations, it

[[Page 515]]

must specify local market conditions that led to the choice of this 
option.
    (f) Nonhousing community development plan. If the state seeks 
assistance under the CDBG program, the consolidated plan must concisely 
describe the state's priority nonhousing community development needs 
that affect more than one unit of general local government. These 
priority needs must be described by CDBG eligibility category, 
reflecting the needs of persons or families for each type of activity. 
This community development component of the plan must identify the 
state's specific long-term and short-term community development 
objectives (including economic development activities that create jobs), 
which must be developed in accordance with the primary objective of the 
CDBG program to develop viable urban communities by providing decent 
housing and a suitable living environment and expanding economic 
opportunities, principally for low-income and moderate-income persons.
    (g) Community Revitalization. States are encouraged to identify 
areas where geographically targeted revitalization efforts are carried 
out through multiple activities in a concentrated and coordinated 
manner. In addition, a state may elect to allow units of general local 
government to carry out a community revitalization strategy that 
includes the economic empowerment of low-income residents, in order to 
obtain the additional flexibility available as provided in 24 CFR part 
570, subpart I. A state must approve a local government's revitalization 
strategy before it may be implemented. If a state elects to allow 
revitalization strategies in its program, the method of distribution 
contained in a state's action plan pursuant to Sec.  91.320(k)(1) must 
reflect the state's process and criteria for approving local 
government's revitalization strategies. The strategy must identify the 
long-term and short-term objectives (e.g., physical improvements, social 
initiatives, and economic empowerment), expressing them in terms of 
measures of outputs and outcomes that are expected through the use of 
HUD programs. The state's process and criteria are subject to HUD 
approval.
    (h) Barriers to affordable housing. The consolidated plan must 
describe the state's strategy to remove or ameliorate negative effects 
of its policies that serve as barriers to affordable housing, as 
identified in accordance with Sec.  91.310.
    (i) Lead based paint. The consolidated plan must outline the actions 
proposed or being taken to evaluate and reduce lead-based paint hazards, 
and describe how the lead-based paint hazard reduction will be 
integrated into housing policies and programs.
    (j) Anti-poverty strategy. The consolidated plan must provide a 
concise summary of the state's goals, programs, and policies for 
reducing the number of poverty-level families and how the state's goals, 
programs, and policies for producing and preserving affordable housing, 
set forth in the housing component of the consolidated plan, will be 
coordinated with other programs such as Temporary Assistance for Needy 
Families as well as employment and training programs and services for 
which the state is responsible and the extent to which they will reduce 
(or assist in reducing) the number of poverty-level families, taking 
into consideration factors over which the state has control.
    (k) Institutional structure. The consolidated plan must provide a 
concise summary of the institutional structure, including businesses, 
developers, nonprofit organizations, philanthropic organizations, 
community-based and faith-based organizations, the Continuum of Care, 
and public institutions, departments, and agencies through which the 
State will carry out its housing, homeless, and community development 
plan; a brief assessment of the strengths and gaps in that delivery 
system; and a concise summary of what the State will do to overcome gaps 
in the institutional structure for carrying out its strategy for 
addressing its priority needs.
    (l) Coordination. The consolidated plan must provide a concise 
summary of the jurisdiction's activities to enhance coordination among 
Continuums of Care, public and assisted housing providers, and private 
and governmental health, mental health, and service agencies. The 
summary must

[[Page 516]]

include the jurisdiction's efforts to coordinate housing assistance and 
services for homeless persons (especially chronically homeless 
individuals and families, families with children, veterans and their 
families, and unaccompanied youth) and persons who were recently 
homeless but now live in permanent housing. With respect to the public 
entities involved, the plan must describe the means of cooperation and 
coordination among the State and any units of general local government 
in the implementation of its consolidated plan. With respect to economic 
development, the State should describe efforts to enhance coordination 
with private industry, businesses, developers, and social service 
agencies.
    (m) Low-income housing tax credit. The consolidated plan must 
describe the strategy to coordinate the Low-Income Housing Tax Credit 
with the development of housing that is affordable to low-income and 
moderate-income families.

[71 FR 6968, Feb. 9, 2006, as amended at 76 FR 75972, Dec. 5, 2011; 80 
FR 5220, Jan. 30, 2015; 80 FR 42365, July 16, 2015]



Sec.  91.320  Action plan.

    The action plan must include the following:
    (a) Standard Form 424;
    (b) A concise executive summary that includes the objectives and 
outcomes identified in the plan as well as an evaluation of past 
performance, a summary of the citizen participation and consultation 
process (including efforts to broaden public participation) (24 CFR 
91.300 (b)), a summary of comments or views, and a summary of comments 
or views not accepted and the reasons therefore (24 CFR 91.115 (b)(5)).
    (c) Resources and objectives--(1) Federal resources. The 
consolidated plan must provide a concise summary of the federal 
resources expected to be made available. These resources include grant 
funds and program income.
    (2) Other resources. The consolidated plan must indicate resources 
from private and non-federal public sources that are reasonably expected 
to be made available to address the needs identified in the plan. The 
plan must explain how federal funds will leverage those additional 
resources, including a description of how matching requirements of the 
HUD programs will be satisfied. Where the State deems it appropriate, it 
may indicate publicly owned land or property located within the State 
that may be used to carry out the purposes identified in the plan;
    (3) Annual objectives. The consolidated plan must contain a summary 
of the annual objectives the State expects to achieve during the 
forthcoming program year.
    (d) Activities. A description of the State's method for distributing 
funds to local governments and nonprofit organizations to carry out 
activities, or the activities to be undertaken by the State, using funds 
that are expected to be received under formula allocations (and related 
program income) and other HUD assistance during the program year, the 
reasons for the allocation priorities, how the proposed distribution of 
funds will address the priority needs and specific objectives described 
in the consolidated plan, and any obstacles to addressing underserved 
needs.
    (e) Outcome measures. Each State must provide outcome measures for 
activities included in its action plan in accordance with guidance 
issued by HUD. For the CDBG program, this would include activities that 
are likely to be funded as a result of the implementation of the State's 
method of distribution.
    (f) Geographic distribution. A description of the geographic areas 
of the State (including areas of low-income and minority concentration) 
in which it will direct assistance during the ensuing program year, 
giving the rationale for the priorities for allocating investment 
geographically. When appropriate, the State should estimate the 
percentage of funds they plan to dedicate to target area(s).
    (g) Affordable housing goals. The State must specify one-year goals 
for the number of households to be provided affordable housing through 
activities that provide rental assistance, production of new units, 
rehabilitation of existing units, or acquisition of existing units using 
funds made available to the

[[Page 517]]

State, and one-year goals for the number of homeless, non-homeless, and 
special-needs households to be provided affordable housing using funds 
made available to the State. The term affordable housing shall be as 
defined in 24 CFR 92.252 for rental housing and 24 CFR 92.254 for 
homeownership.
    (h) Homeless and other special needs activities. (1) The State must 
describe its one-year goals and specific actions steps for reducing and 
ending homelessness through:
    (i) Reaching out to homeless persons (especially unsheltered 
persons) and assessing their individual needs;
    (ii) Addressing the emergency shelter and transitional housing needs 
of homeless persons;
    (iii) Helping homeless persons (especially chronically homeless 
individuals and families, families with children, veterans and their 
families, and unaccompanied youth) make the transition to permanent 
housing and independent living, including shortening the period of time 
that individuals and families experience homelessness, facilitating 
access for homeless individuals and families to affordable housing 
units, and preventing individuals and families who were recently 
homeless from becoming homeless again; and
    (iv) Helping low-income individuals and families avoid becoming 
homeless, especially extremely low-income individuals and families who 
are:
    (A) Being discharged from publicly funded institutions and systems 
of care (such as health-care facilities, mental health facilities, 
foster care and other youth facilities, and corrections programs and 
institutions); or
    (B) Receiving assistance from public or private agencies that 
address housing, health, social services, employment, education, or 
youth needs.
    (2) The State must specify the activities that it plans to undertake 
during the next year to address the housing and supportive service needs 
identified in accordance with Sec.  91.315(e) with respect to persons 
who are not homeless but have other special needs.
    (i) Barriers to affordable housing. Actions it plans to take during 
the next year to remove or ameliorate the negative effects of public 
policies that serve as barriers to affordable housing. Such policies, 
procedures, and processes include but are not limited to: land use 
controls, tax policies affecting land, zoning ordinances, building 
codes, fees and charges, growth limitations, and policies affecting the 
return on residential investment.
    (j)(1) Affirmatively furthering fair housing. Actions it plans to 
take during the next year that address fair housing goals identified in 
the AFH.
    (2) Other actions. Actions it plans to take during the next year to 
implement its strategic plan and address obstacles to meeting 
underserved needs, foster and maintain affordable housing (including 
allocation plans and policies governing the use of Low-Income Housing 
Credits under 26 U.S.C. 42, which are more commonly referred to as Low-
Income Housing Tax Credits), evaluate and reduce lead-based paint 
hazards, reduce the number of poverty-level families, develop 
institutional structure, enhance coordination between public and private 
housing and social service agencies, address the needs of public housing 
(including providing financial or other assistance to troubled PHAs), 
and encourage public housing residents to become more involved in 
management and participate in homeownership.
    (k) Program-specific requirements. In addition, the plan must 
include the following specific information:
    (1) CDBG. The action plan must set forth the State's method of 
distribution.
    (i) The method of distribution must contain a description of all 
criteria used to select applications from local governments for funding, 
including the relative importance of the criteria, where applicable. The 
method of distribution must provide sufficient information so that units 
of general local government will be able to understand and comment on 
it, understand what criteria and information their application will be 
judged on, and be able to prepare responsive applications. The method of 
distribution may provide a summary of the selection criteria, provided 
that all criteria are summarized and the details are set forth in 
application manuals or other official State publications that are widely 
distributed to eligible applicants.

[[Page 518]]

    (ii) The action plan must include a description of how all CDBG 
resources will be allocated among funding categories and the threshold 
factors and grant size limits that are to be applied. The total CDBG 
resources to be described in the action plan include all of the 
following:
    (A) The CDBG origin year grant.
    (B) Any program income expected to be returned to the State in 
accordance with 24 CFR 570.489(e)(3)(i) in the program year or not 
included in a prior action plan, and any program income expected to be 
received by any State revolving fund in accordance with 24 CFR 
570.489(f)(2) in the program year or not included in a prior action 
plan.
    (C) Reimbursements, other than program income, made to a local 
account.
    (iii) If the State intends to help nonentitlement units of general 
local government apply for guaranteed loan funds under 24 CFR part 570, 
subpart M, it must describe available guarantee amounts and how 
applications will be selected for assistance. If a State elects to allow 
units of general local government to carry out community revitalization 
strategies, the method of distribution shall reflect the State's process 
and criteria for approving local government's revitalization strategies.
    (iv) If the State permits units of general local government to 
retain program income per 24 CFR 570.489(e)(3) or establish local 
revolving funds per 24 CFR 570.489(f)(1), the State must include a 
description of each of the local accounts including the name of the 
local entity administering the funds, contact information for the entity 
administering the funds, the amounts expected to be available during the 
program year, the eligible activity type(s) expected to be carried out 
with the program income, and the national objective(s) served with the 
funds.
    (iv) HUD may monitor the method of distribution as part of its audit 
and review responsibilities, as provided in 24 CFR 570.493(a)(1), in 
order to determine compliance with program requirements.
    (2) HOME. (i) The HOME program resources that the State must 
describe in the action plan are the fiscal year HOME allocation plus the 
amount of program income, repayments, and recaptured funds in the 
State's HOME Investment Trust Fund local account (see 24 CFR 
92.500(c)(1)) at the beginning of the State's program year. The State 
may choose to include program income, repayments, and recaptured funds 
that are expected to be received during the program year if the State 
plans to commit these funds during the program year.
    (ii) The State shall describe other forms of investment that are not 
described in 24 CFR 92.205(b). HUD's specific written approval is 
required for other forms of investment, as provided in Sec.  92.205(b). 
Approval of the consolidated plan or action plan under Sec.  91.500 or 
the failure to disapprove the consolidated plan or action plan does not 
satisfy the requirement for specific HUD approval for resale or 
recapture guidelines.
    (iii) If the State intends to use HOME funds for homebuyers, it must 
set forth the guidelines for resale or recapture, and obtain HUD's 
specific, written approval, as required in 24 CFR 92.254. Approval of 
the consolidated plan or action plan under Sec.  91.500 or the failure 
to disapprove the consolidated plan or action does not satisfy the 
requirement for specific HUD approval for other forms of investment.
    (iv) If the State intends to use HOME funds to refinance existing 
debt secured by multifamily housing that is being rehabilitated with 
HOME funds, it must State its refinancing guidelines required under 24 
CFR 92.206(b). The guidelines shall describe the conditions under which 
the State will refinance existing debt. At minimum, the guidelines must:
    (A) Demonstrate that rehabilitation is the primary eligible activity 
and ensure that this requirement is met by establishing a minimum level 
of rehabilitation per unit or a required ratio between rehabilitation 
and refinancing.
    (B) Require a review of management practices to demonstrate that 
disinvestment in the property has not occurred; that the long-term needs 
of the project can be met; and that the feasibility of serving the 
targeted population over an extended affordability period can be 
demonstrated.

[[Page 519]]

    (C) State whether the new investment is being made to maintain 
current affordable units, create additional affordable units, or both.
    (D) Specify the required period of affordability, whether it is the 
minimum 15 years or longer.
    (E) Specify whether the investment of HOME funds may be state-wide 
or limited to a specific geographic area, such as a community identified 
in a neighborhood revitalization strategy under 24 CFR 91.315(g), or a 
federally designated Empowerment Zone or Enterprise Community.
    (F) State that HOME funds cannot be used to refinance multifamily 
loans made or insured by any federal program, including the CDBG 
program.
    (v) If the participating jurisdiction intends to use HOME funds for 
homebuyer assistance or for rehabilitation of owner-occupied single 
family housing and does not use the HOME affordable homeownership limits 
for the area provided by HUD, it must determine 95 percent of the median 
area purchase price and set forth the information in accordance with 24 
CFR 92.254(a)(2)(iii).
    (vi) The State must describe eligible applicants (e.g., categories 
of eligible applicants), describe its process for soliciting and funding 
applications or proposals (e.g., competition, first-come first-serve; 
subgrants to local jurisdictions) and State where detailed information 
may be obtained (e.g., application packages are available at the office 
of the State or on the State's Web site).
    (vii) The participating jurisdiction may limit the beneficiaries or 
give preferences to a particular segment of the low-income population 
only if described in the action plan.
    (A) Any limitation or preference must not violate nondiscrimination 
requirements in 24 CFR 92.350, and the participating jurisdiction must 
not limit or give preferences to students.
    (B) A limitation or preference may include, in addition to targeting 
tenant-based rental assistance to persons with special needs as provided 
in 24 CFR 92.209(c)(2), limiting beneficiaries or giving preferences to 
persons in certain occupations, such as police officers, firefighters, 
or teachers.
    (C) The participating jurisdiction must not limit beneficiaries or 
give a preference to all employees of the jurisdiction.
    (D) The participating jurisdiction may permit rental housing owners 
to limit tenants or give a preference in accordance with 24 CFR 
92.253(d) only if such limitation or preference is described in the 
action plan.
    (viii) If the State will receive funding under the American Dream 
Downpayment Initiative (ADDI) (see 24 CFR part 92, subpart M), it must 
include:
    (A) A description of the planned use of the ADDI funds;
    (B) A plan for conducting targeted outreach to residents and tenants 
of public and manufactured housing and to other families assisted by 
public housing agencies, for the purposes of ensuring that the ADDI 
funds are used to provide downpayment assistance for such residents, 
tenants, and families; and
    (C) A description of the actions to be taken to ensure the 
suitability of families receiving ADDI funds to undertake and maintain 
homeownership, such as provision of housing counseling to homebuyers.
    (3) ESG. (i) The State must either include its written standards for 
providing Emergency Solutions Grant (ESG) assistance or describe its 
requirements for its subrecipients to establish and implement written 
standards for providing ESG assistance. The minimum requirements 
regarding these standards are set forth in 24 CFR 576.400(e)(2) and 
(e)(3).
    (ii) For each area of the State in which a Continuum of Care has 
established a centralized or coordinated assessment system that meets 
HUD requirements, the State must describe that centralized or 
coordinated assessment system. The requirements for using a centralized 
or coordinated assessment system, including the exception for victim 
service providers, are set forth under 24 CFR 576.400(d).
    (iii) The State must identify its process for making subawards and a 
description of how the State intends to make its allocation available to 
units of general local government and private nonprofit organizations, 
including

[[Page 520]]

community and faith-based organizations.
    (iv) The State must describe the performance standards for 
evaluating ESG activities.
    (v) The State must describe its consultation with each Continuum of 
Care in determining how to allocate ESG funds each program year; 
developing the performance standards for, and evaluating the outcomes 
of, projects and activities assisted by ESG funds; and developing 
funding, policies and procedures for the administration and operation of 
the HMIS.
    (4) HOPWA. For HOPWA funds, the State must specify one-year goals 
for the number of households to be provided housing through the use of 
HOPWA activities for short-term rent; mortgage and utility assistance 
payments to prevent homelessness of the individual or family; tenant-
based rental assistance; and units provided in housing facilities that 
are being developed, leased or operated with HOPWA funds, and shall 
identify the method of selecting project sponsors (including providing 
full access to grassroots faith-based and other community-based 
organizations).
    (5) Housing Trust Fund. The action plan must include the HTF 
allocation plan that describes the distribution of the HTF funds, and 
establishes the application requirements and the criteria for selection 
of applications submitted by eligible recipients that meet the State's 
priority housing needs. The plan must also establish the State's maximum 
per-unit development subsidy limit for housing assisted with HTF funds. 
If the HTF funds will be used for first-time homebuyers, it must State 
the guidelines for resale and recapture as required in 24 CFR 93.304. 
The plan must reflect the State's decision to distribute HTF funds 
through grants to subgrantees and/or to select applications submitted by 
eligible recipients. If the State is selecting applications submitted by 
eligible recipients, the plan must include the following:
    (i) The plan must provide priority for funding based on geographic 
diversity (as defined by the State in the consolidated plan); the 
applicant's ability to obligate HTF funds and undertake eligible 
activities in a timely manner; in the case of rental housing projects, 
the extent to which the project has Federal, State, or local project-
based rental assistance so that rents are affordable to extremely low-
income families; in the case of rental housing projects, the duration of 
the units' affordability period; the merits of the application in 
meeting the priority housing needs of the State (such as housing that is 
accessible to transit or employment centers, housing that includes green 
building and sustainable development features, or housing that serves 
special needs populations); and the extent to which the application 
makes use of non-federal funding sources.
    (ii) The plan must include the requirement that the application 
contain a description of the eligible activities to be conducted with 
the HTF funds (as provided in 24 CFR 93.200) and contain a certification 
by each eligible recipient that housing units assisted with the HTF will 
comply with HTF requirements. The plan must also describe eligibility 
requirements for recipients (as defined in 24 CFR 93.2).
    (iii) The plan must provide for performance goals and benchmarks 
against which the State will measure its progress, consistent with the 
State's goals established under 24 CFR 91.315(b)(2).
    (iv) The plan must include the State's rehabilitation standards, as 
required by 24 CFR 93.301(b)(1).
    (v) If the State intends to use HTF funds for first-time homebuyers, 
it must set forth the guidelines for resale or recapture, and obtain 
HUD's specific, written approval, as required in Sec.  93.304(f). 
Approval of the consolidated plan or action plan under Sec.  91.500 or 
the failure to disapprove the consolidated plan or action does not 
satisfy the requirement for specific HUD approval for resale or 
recapture guidelines.
    (vi) If the State intends to use HTF funds for homebuyer assistance 
and does not use the HTF affordable homeownership limits for the area 
provided by HUD, it must determine 95 percent of the median area 
purchase price and set forth the information in accordance with Sec.  
93.305.

[[Page 521]]

    (vii) The State may limit the beneficiaries or give preferences to a 
particular segment of the extremely low- or very low-income population 
only if described in the action plan.
    (A) Any limitation or preference must not violate nondiscrimination 
requirements in 24 CFR 93.350, and the State must not limit or give 
preferences to students.
    (B) The State may permit rental housing owners to limit tenants or 
give a preference in accordance with 24 CFR 93.303(d)(3) only if such 
limitation or preference is described in the action plan.
    (viii) The plan must describe the conditions under which the State 
will refinance existing debt.

[71 FR 6969, Feb. 9, 2006, as amended at 76 FR 75972, Dec. 5, 2011; 78 
FR 44664, July 24, 2013; 80 FR 5220, Jan. 30, 2015; 80 FR 42365, July 
16, 2015; 80 FR 69869, Nov. 12, 2015; 81 FR 86951, Dec. 1, 2016]



Sec.  91.325  Certifications.

    (a) General--(1) Affirmatively furthering fair housing. Each State 
is required to submit a certification that it will affirmatively further 
fair housing, which means that it will take meaningful actions to 
further the goals identified in an AFH conducted in accordance with the 
requirements of 24 CFR 5.150 through 5.180, and that it will take no 
action that is materially inconsistent with its obligation to 
affirmatively further fair housing.
    (2) Anti-displacement and relocation plan. The State is required to 
submit a certification that it has in effect and is following a 
residential antidisplacement and relocation assistance plan in 
connection with any activity assisted with funding under the CDBG or 
HOME programs.
    (3) Anti-lobbying. The State must submit a certification with regard 
to compliance with restrictions on lobbying required by 24 CFR part 87, 
together with disclosure forms, if required by that part.
    (4) Authority of State. The State must submit a certification that 
the consolidated plan is authorized under State law and that the State 
possesses the legal authority to carry out the programs for which it is 
seeking funding, in accordance with applicable HUD regulations.
    (5) Consistency with plan. The State must submit a certification 
that the housing activities to be undertaken with CDBG, HOME, ESG, and 
HOPWA funds are consistent with the strategic plan.
    (6) Acquisition and relocation. The State must submit a 
certification that it will comply with the acquisition and relocation 
requirements of the Uniform Relocation Assistance and Real Property 
Acquisition Policies Act of 1970, as amended, and implementing 
regulations at 49 CFR part 24.
    (7) Section 3. The State must submit a certification that it will 
comply with section 3 of the Housing and Urban Development Act of 1968 
(12 U.S.C. 1701u), and implementing regulations at 24 CFR part 135.
    (b) Community Development Block Grant program. For States that seek 
funding under CDBG, the following certifications are required:
    (1) Citizen participation. A certification that the State is 
following a detailed citizen participation plan that satisfies the 
requirements of Sec.  91.115, and that each unit of general local 
government that is receiving assistance from the State is following a 
detailed citizen participation plan that satisfies the requirements of 
Sec.  570.486 of this title.
    (2) Consultation with local governments. A certification that:
    (i) It has consulted with affected units of local government in the 
nonentitlement area of the State in determining the method of 
distribution of funding;
    (ii) It engages or will engage in planning for community development 
activities;
    (iii) It provides or will provide technical assistance to units of 
general local government in connection with community development 
programs;
    (iv) It will not refuse to distribute funds to any unit of general 
local government on the basis of the particular eligible activity 
selected by the unit of general local government to meet its community 
development needs, except that a State is not prevented from 
establishing priorities in distributing

[[Page 522]]

funding on the basis of the activities selected; and
    (v) Each unit of general local government to be distributed funds 
will be required to identify its community development and housing 
needs, including the needs of the low-income and moderate-income 
families, and the activities to be undertaken to meet these needs.
    (3) Community development plan. A certification that this 
consolidated plan identifies community development and housing needs and 
specifies both short-term and long-term community development objectives 
that have been developed in accordance with the primary objective of the 
statute authorizing the CDBG program, as described in 24 CFR 570.2, and 
requirements of this part and 24 CFR part 570.
    (4) Use of funds. A certification that the State has complied with 
the following criteria:
    (i) With respect to activities expected to be assisted with CDBG 
funds, the action plan has been developed so as to give the maximum 
feasible priority to activities that will benefit low- and moderate-
income families or aid in the prevention or elimination of slums or 
blight. The plan may also include CDBG-assisted activities that are 
certified to be designed to meet other community development needs 
having particular urgency because existing conditions pose a serious and 
immediate threat to the health or welfare of the community where other 
financial resources are not available to meet such needs;
    (ii) In the aggregate, not less than 70 percent of the CDBG funds 
received by the State during a period specified by the State, not to 
exceed three years, will be used for activities that benefit persons of 
low and moderate income. The period selected and certified to by the 
State shall be designated by fiscal year of annual grants, and shall be 
for one, two, or three consecutive annual grants. (See 24 CFR 570.481 
for definition of ``CDBG funds''); and
    (iii) The State will not attempt to recover any capital costs of 
public improvements assisted with CDBG funds, including Section 108 loan 
guaranteed funds, by assessing any amount against properties owned and 
occupied by persons of low- and moderate-income, including any fee 
charged or assessment made as a condition of obtaining access to such 
public improvements. However, if CDBG funds are used to pay the 
proportion of a fee or assessment attributable to the capital costs of 
public improvements (assisted in part with CDBG funds) financed from 
other revenue sources, an assessment or charge may be made against the 
property with respect to the public improvements financed by a source 
other than with CDBG funds. In addition, with respect to properties 
owned and occupied by moderate-income (but not low-income) families, an 
assessment or charge may be made against the property with respect to 
the public improvements financed by a source other than CDBG funds if 
the State certifies that it lacks CDBG funds to cover the assessment.
    (5) Compliance with anti-discrimination laws. A certification that 
the grant will be conducted and administered in conformity with title VI 
of the Civil Rights Act of 1964 (42 U.S.C. 2000d) and the Fair Housing 
Act (42 U.S.C. 3601-3619) and implementing regulations.
    (6) Excessive force. A certification that the State will require 
units of general local government that receive CDBG funds to certify 
that they have adopted and are enforcing:
    (i) A policy prohibiting the use of excessive force by law 
enforcement agencies within its jurisdiction against any individuals 
engaged in non-violent civil rights demonstrations; and
    (ii) A policy of enforcing applicable State and local laws against 
physically barring entrance to or exit from a facility or location that 
is the subject of such non-violent civil rights demonstrations within 
its jurisdiction.
    (7) Compliance with laws. A certification that the State will comply 
with applicable laws.
    (c) ESG. Each State that seeks funding under ESG must provide the 
following certifications:
    (1) The State will obtain any matching amounts required under 24 CFR 
576.201 in a manner so that its subrecipients that are least capable of 
providing matching amounts receive the benefit of the exception under 24 
CFR 576.201(a)(2);

[[Page 523]]

    (2) The State will establish and implement, to the maximum extent 
practicable and where appropriate, policies, and protocols for the 
discharge of persons from publicly funded institutions or systems of 
care (such as health-care facilities, mental health facilities, foster 
care or other youth facilities, or correction programs and institutions) 
in order to prevent this discharge from immediately resulting in 
homelessness for these persons;
    (3) The State will develop and implement procedures to ensure the 
confidentiality of records pertaining to any individual provided family 
violence prevention or treatment services under any project assisted 
under the ESG program, including protection against the release of the 
address or location of any family violence shelter project, except with 
the written authorization of the person responsible for the operation of 
that shelter; and
    (4) The State will ensure that its subrecipients comply with the 
following criteria:
    (i) If an emergency shelter's rehabilitation costs exceed 75 percent 
of the value of the building before rehabilitation, the building will be 
maintained as a shelter for homeless individuals and families for a 
minimum of 10 years after the date the building is first occupied by a 
homeless individual or family after the completed rehabilitation;
    (ii) If the cost to convert a building into an emergency shelter 
exceeds 75 percent of the value of the building after conversion, the 
building will be maintained as a shelter for homeless individuals and 
families for a minimum of 10 years after the date the building is first 
occupied by a homeless individual or family after the completed 
conversion;
    (iii) In all other cases where ESG funds are used for renovation, 
the building will be maintained as a shelter for homeless individuals 
and families for a minimum of 3 years after the date the date the 
building is first occupied by a homeless individual or family after the 
completed renovation;
    (iv) If ESG funds are used for shelter operations or essential 
services related to street outreach or emergency shelter, the 
subrecipient will provide services or shelter to homeless individuals 
and families for the period during which the ESG assistance is provided, 
without regard to a particular site or structure, so long as the 
applicant serves the same type of persons (e.g., families with children, 
unaccompanied youth, veterans, disabled individuals, or victims of 
domestic violence) or persons in the same geographic area;
    (v) Any renovation carried out with ESG assistance shall be 
sufficient to ensure that the building involved is safe and sanitary;
    (vi) The subrecipient will assist homeless individuals in obtaining 
permanent housing, appropriate supportive services (including medical 
and mental health treatment, counseling, supervision, and other services 
essential for achieving independent living), and other Federal, State, 
local, and private assistance available for such individuals;
    (vii) To the maximum extent practicable, the subrecipient will 
involve, through employment, volunteer services, or otherwise, homeless 
individuals and families in constructing, renovating, maintaining, and 
operating facilities assisted under ESG, in providing services assisted 
under ESG, and in providing services for occupants of facilities 
assisted under ESG; and
    (viii) All activities the subrecipient undertakes with assistance 
under ESG are consistent with the State's current HUD-approved 
consolidated plan.
    (d) HOME program. Each State must provide the following 
certifications:
    (1) If it plans to use program funds for tenant-based rental 
assistance, a certification that rental-based assistance is an essential 
element of its consolidated plan;
    (2) A certification that it is using and will use HOME funds for 
eligible activities and costs, as described in Sec. Sec.  92.205 through 
92.209 of this subtitle and that it is not using and will not use HOME 
funds for prohibited activities, as described in Sec.  92.214 of this 
subtitle; and
    (3) A certification that before committing funds to a project, the 
State or its recipients will evaluate the project in accordance with 
guidelines that it adopts for this purpose and will not invest any more 
HOME funds in combination with other federal assistance than

[[Page 524]]

is necessary to provide affordable housing.
    (e) Housing Opportunities for Persons With AIDS. For States that 
seek funding under the Housing Opportunities for Persons With AIDS 
program, a certification is required by the State that:
    (1) Activities funded under the program will meet urgent needs that 
are not being met by available public and private sources; and
    (2) Any building or structure purchased, leased, rehabilitated, 
renovated, or converted with assistance under that program shall be 
operated for not less than 10 years specified in the plan, or for a 
period of not less than three years in cases involving non-substantial 
rehabilitation or repair of a building or structure.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995, as amended at 71 FR 6970, Feb. 9, 2006; 72 FR 
73493, Dec. 27, 2007; 76 FR 75973, Dec. 5, 2011; 80 FR 42365, July 16, 
2015; 80 FR 69870, Nov. 12, 2015]



Sec.  91.330  Monitoring.

    The consolidated plan must describe the standards and procedures 
that the State will use to monitor activities carried out in furtherance 
of the plan and will use to ensure long-term compliance with 
requirements of the programs involved, including the comprehensive 
planning requirements.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995; 60 FR 4861, Jan. 25, 1995]



           Subpart E_Consortia; Contents of Consolidated Plan



Sec.  91.400  Applicability.

    This subpart applies to HOME program consortia, as defined in Sec.  
91.5 (see 24 CFR part 92). Units of local government that participate in 
a consortium must participate in submission of a consolidated plan for 
the consortium, prepared in accordance with this subpart. CDBG 
entitlement communities that are members of a consortium must provide 
additional information for the consolidated plan, as described in this 
subpart.



Sec.  91.401  Citizen participation plan.

    The consortium must have a citizen participation plan that complies 
with the requirements of Sec.  91.105. If the consortium contains one or 
more CDBG entitlement communities, the consortium's citizen 
participation plan must provide for citizen participation within each 
CDBG entitlement community, either by the consortium or by the CDBG 
entitlement community, in a manner sufficient for the CDBG entitlement 
community to certify that it is following a citizen participation plan.



Sec.  91.402  Consolidated program year.

    (a) Same program year for consortia members. All units of general 
local government that are members of a consortium must be on the same 
program year for CDBG, HOME, ESG, and HOPWA. The program year shall run 
for a twelve month period and begin on the first calendar day of a 
month.
    (b) Transition period. (1) A consortium in existence on February 6, 
1995, with all members having aligned program years must comply with 
paragraph (a) of this section. A consortium in existence on February 6, 
1995, in which all members do not have aligned program years will be 
allowed a transition period during the balance of its current consortium 
agreement to bring the program year for all members into alignment.
    (2) During any such transition period, the lead agency (if it is a 
CDBG entitlement community) must submit, as its consolidated plan, a 
plan that complies with this subpart for the consortium, plus its 
nonhousing Community Development Plan (in accordance with Sec.  91.215). 
All other CDBG entitlement communities in the consortium may submit 
their respective nonhousing Community Development Plans (Sec.  
91.215(e)), an Action Plan (Sec.  91.220) and the certifications (Sec.  
91.425(a) and (b)) in accordance with their individual program years.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995; 60 FR 10427, Feb. 24, 1995]

[[Page 525]]



Sec.  91.405  Housing and homeless needs assessment.

    Housing and homeless needs must be described in the consolidated 
plan in accordance with the provisions of Sec.  91.205 for the entire 
consortium. In addition to describing these needs for the entire 
consortium, the consolidated plan may also describe these needs for 
individual communities that are members of the consortium.

(Approved by the Office of Management and Budget under control number 
2506-0117)



Sec.  91.410  Housing market analysis.

    Housing market analysis must be described in the consolidated plan 
in accordance with the provisions of Sec.  91.210 for the entire 
consortium. In addition to describing market conditions for the entire 
consortium, the consolidated plan may also describe these conditions for 
individual communities that are members of the consortium.

(Approved by the Office of Management and Budget under control number 
2506-0117)



Sec.  91.415  Strategic plan.

    Strategies and priority needs must be described in the consolidated 
plan, in accordance with the provisions of Sec.  91.215, for the entire 
consortium. The consortium is not required to submit a nonhousing 
Community Development Plan; however, if the consortium includes CDBG 
entitlement communities, the consolidated plan must include the 
nonhousing Community Development Plans of the CDBG entitlement community 
members of the consortium. The consortium must set forth its priorities 
for allocating housing (including CDBG and ESG, where applicable) 
resources geographically within the consortium, describing how the 
consolidated plan will address the needs identified (in accordance with 
Sec.  91.405), setting forth strategies and actions consistent with the 
goals and other elements identified in an AFH conducted in accordance 
with 24 CFR 5.150 through 5.180, describing the reasons for the 
consortium's allocation priorities, and identifying any obstacles there 
are to addressing underserved needs.

[80 FR 42365, July 16, 2015]



Sec.  91.420  Action plan.

    (a) Form application. The action plan for the consortium must 
include a Standard Form 424 for the consortium for the HOME program. 
Each entitlement jurisdiction also must submit a Standard Form 424 for 
its funding under the CDBG program and, if applicable, the ESG and HOPWA 
programs.
    (b) Description of resources and activities. The action plan must 
describe the resources to be used and activities to be undertaken to 
pursue its strategic plan, including actions the consortium plans to 
take during the next year that address fair housing issues identified in 
the AFH. The consolidated plan must provide this description for all 
resources and activities within the entire consortium as a whole, as 
well as a description for each individual community that is a member of 
the consortium.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995, as amended at 80 FR 42366, July 16, 2015]



Sec.  91.425  Certifications.

    (a) Consortium certifications--(1) General--(i) Affirmatively 
furthering fair housing. Each consortium must certify that it will 
affirmatively further fair housing, which means that it will take 
meaningful actions to further the goals identified in an AFH conducted 
in accordance with the requirements of 24 CFR 5.150 through 5.180, and 
that it will take no action that is materially inconsistent with its 
obligation to affirmatively further fair housing.
    (ii) Anti-displacement and relocation plan. Each consortium must 
certify that it has in effect and is following a residential 
antidisplacement and relocation assistance plan in connection with any 
activity assisted with funding under the HOME or CDBG program.
    (iii) Anti-lobbying. The consortium must submit a certification with 
regard to compliance with restrictions on lobbying required by 24 CFR 
part 87, together with disclosure forms, if required by that part.
    (iv) Authority of consortium. The consortium must submit a 
certification

[[Page 526]]

that the consolidated plan is authorized under State and local law (as 
applicable) and that the consortium possesses the legal authority to 
carry out the programs for which it is seeking funding, in accordance 
with applicable HUD regulations.
    (v) Consistency with plan. The consortium must certify that the 
housing activities to be undertaken with CDBG, HOME, ESG, and HOPWA 
funds are consistent with the strategic plan.
    (vi) Acquisition and relocation. The consortium must certify that it 
will comply with the acquisition and relocation requirements of the 
Uniform Relocation Assistance and Real Property Acquisition Policies Act 
of 1970, as amended (42 U.S.C. 4601), and implementing regulations at 49 
CFR part 24.
    (vii) Section 3. The consortium must certify that it will comply 
with section 3 of the Housing and Urban Development Act of 1968 (12 
U.S.C. 1701u), and implementing regulations at 24 CFR part 135.
    (2) HOME program. The consortium must provide the following 
certifications:
    (i) If it plans to use HOME funds for tenant-based rental 
assistance, a certification that rental-based assistance is an essential 
element of its consolidated plan;
    (ii) That it is using and will use HOME funds for eligible 
activities and costs, as described in Sec. Sec.  92.205 through 92.209 
of this subtitle and that it is not using and will not use HOME funds 
for prohibited activities, as described in Sec.  92.214 of this 
subtitle; and
    (iii) That before committing funds to a project, the consortium will 
evaluate the project in accordance with guidelines that it adopts for 
this purpose and will not invest any more HOME funds in combination with 
other federal assistance than is necessary to provide affordable 
housing.
    (b) CDBG entitlement community certifications. A CDBG entitlement 
community that is a member of a consortium must submit the 
certifications required by Sec.  91.225 (a) and (b), and, if applicable, 
of Sec.  91.225 (c) and (d).

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995, as amended at 72 FR 73493, Dec. 27, 2007; 80 
FR 42366, July 16, 2015]



Sec.  91.430  Monitoring.

    The consolidated plan must describe the standards and procedures 
that the consortium will use to monitor activities carried out in 
furtherance of the plan and will use to ensure long-term compliance with 
requirements of the programs involved, including minority business 
outreach and the comprehensive planning requirements.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995; 60 FR 4861, Jan. 25, 1995]



                  Subpart F_Other General Requirements



Sec.  91.500  HUD approval action.

    (a) General. HUD will review the plan upon receipt. The plan will be 
deemed approved 45 days after HUD receives the plan, unless before that 
date HUD has notified the jurisdiction that the plan is disapproved.
    (b) Standard of review. HUD may disapprove a plan or a portion of a 
plan if it is inconsistent with the purposes of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 12703), if it is 
substantially incomplete, or, in the case of certifications applicable 
to the CDBG program under Sec. Sec.  91.225 (a) and (b) or 91.325 (a) 
and (b), if it is not satisfactory to the Secretary in accordance with 
Sec. Sec.  570.304, 570.429(g), or 570.485(c) of this title, as 
applicable. The following are examples of consolidated plans that are 
substantially incomplete:
    (1) A plan that was developed without the required citizen 
participation or the required consultation;
    (2) A plan that fails to satisfy all the required elements in this 
part; and
    (3) A plan for which a certification is rejected by HUD as 
inaccurate, after HUD has inspected the evidence and provided due notice 
and opportunity to the jurisdiction for comment; and
    (4) A plan that does not include a description of the manner in 
which the unit of general local government or state will provide 
financial or other assistance to a public housing agency if the public 
housing agency is designated as ``troubled'' by HUD.

[[Page 527]]

    (c) Written notice of disapproval. Within 15 days after HUD notifies 
a jurisdiction that it is disapproving its plan, it must inform the 
jurisdiction in writing of the reasons for disapproval and actions that 
the jurisdiction could take to meet the criteria for approval. 
Disapproval of a plan with respect to one program does not affect 
assistance distributed on the basis of a formula under other programs.
    (d) Revisions and resubmission. The jurisdiction may revise or 
resubmit a plan within 45 days after the first notification of 
disapproval. HUD must respond to approve or disapprove the plan within 
30 days of receiving the revisions or resubmission.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995, as amended at 60 FR 56909, Nov. 9, 1995; 61 
FR 54920, Oct. 22, 1996; 71 FR 6970, Feb. 9, 2006]



Sec.  91.505  Amendments to the consolidated plan.

    (a) Amendments to the plan. The jurisdiction shall amend its 
approved plan whenever it makes one of the following decisions:
    (1) To make a change in its allocation priorities or a change in the 
method of distribution of funds;
    (2) To carry out an activity, using funds from any program covered 
by the consolidated plan (including program income, reimbursements, 
repayment, recaptures, or reallocations from HUD), not previously 
described in the action plan; or
    (3) To change the purpose, scope, location, or beneficiaries of an 
activity.
    (b) Criteria for substantial amendment. The jurisdiction shall 
identify in its citizen participation plan the criteria it will use for 
determining what constitutes a substantial amendment. It is these 
substantial amendments that are subject to a citizen participation 
process, in accordance with the jurisdiction's citizen participation 
plan. (See Sec. Sec.  91.105 and 91.115.)
    (c) Submission to HUD. (1) Upon completion, the jurisdiction must 
make the amendment public and must notify HUD that an amendment has been 
made. The jurisdiction may submit a copy of each amendment to HUD as it 
occurs, or at the end of the program year. Letters transmitting copies 
of amendments must be signed by the official representative of the 
jurisdiction authorized to take such action.
    (2) See subpart B of this part for the public notice procedures 
applicable to substantial amendments. For any amendment affecting the 
HOPWA program that would involve acquisition, rehabilitation, 
conversion, lease, repair or construction of properties to provide 
housing, an environmental review of the revised proposed use of funds 
must be completed by HUD in accordance with 24 CFR 574.510.
    (d) The jurisdiction must ensure that amendments to the plan are 
consistent with its certification to affirmatively further fair housing 
and the analysis and strategies of the AFH.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995, as amended at 80 FR 42366, July 16, 2015; 80 
FR 69870, Nov. 12, 2015; 81 FR 86951, Dec. 2, 2016]



Sec.  91.510  Consistency determinations.

    (a) Applicability. For competitive programs, a certification of 
consistency of the application with the approved consolidated plan for 
the jurisdiction may be required, whether the applicant is the 
jurisdiction or another applicant.
    (b) Certifying authority. (1) The certification must be obtained 
from the unit of general local government if the project will be located 
in a unit of general local government that: is required to have a 
consolidated plan, is authorized to use an abbreviated consolidated plan 
but elects to prepare and has submitted a full consolidated plan, or is 
authorized to use an abbreviated consolidated plan and is applying for 
the same program as the applicant pursuant to the same Notice of Funding 
Availability (and therefore has or will have an abbreviated consolidated 
plan for the fiscal year for that program).
    (2) If the project will not be located in a unit of general local 
government, the certification may be obtained from the State or, if the 
project will be located in a unit of general local government authorized 
to use an abbreviated consolidated plan, from the unit of general local 
government if it is willing to prepare such a plan.

[[Page 528]]

    (3) Where the recipient of a HOPWA grant is a city that is the most 
populous unit of general local government in an EMSA, it also must 
obtain and keep on file certifications of consistency from such public 
officials for each other locality in the EMSA in which housing 
assistance is provided.
    (c) Meaning. A jurisdiction's certification that an application is 
consistent with its consolidated plan means the jurisdiction's plan 
shows need, the proposed activities are consistent with the 
jurisdiction's strategic plan, and the location of the proposed 
activities is consistent with the geographic areas specified in the 
plan. The jurisdiction shall provide the reasons for the denial when it 
fails to provide a certification of consistency.

(Approved by the Office of Management and Budget under control number 
2506-0117)



Sec.  91.515  Funding determinations by HUD.

    (a) Formula funding. The action plan submitted by the jurisdiction 
will be considered as the application for the CDBG, HOME, ESG, and HOPWA 
formula grant programs. The Department will make its funding award 
determination after reviewing the plan submission in accordance with 
Sec.  91.500.
    (b) Other funding. For other funding, the jurisdiction must still 
respond to Notices of Funding Availability for the individual programs 
in order to receive funding.

(Approved by the Office of Management and Budget under control number 
2506-0117)



Sec.  91.520  Performance reports.

    (a) General. Each jurisdiction that has an approved consolidated 
plan shall annually review and report, in a form prescribed by HUD, on 
the progress it has made in carrying out its strategic plan and its 
action plan. The performance report must include a description of the 
resources made available, the investment of available resources, the 
geographic distribution and location of investments, the families and 
persons assisted (including the racial and ethnic status of persons 
assisted), actions taken to affirmatively further fair housing, and 
other actions indicated in the strategic plan and the action plan. This 
performance report shall be submitted to HUD within 90 days after the 
close of the jurisdiction's program year.
    (b) Affordable housing. The report shall include an evaluation of 
the jurisdiction's progress in meeting its specific objective of 
providing affordable housing, including the number and types of families 
served. This element of the report must include the number of extremely 
low-income, low-income, moderate-income, middle-income, and homeless 
persons served.
    (c) Homelessness. The report must include, in a form prescribed by 
HUD, an evaluation of the jurisdiction's progress in meeting its 
specific objectives for reducing and ending homelessness through:
    (1) Reaching out to homeless persons (especially unsheltered 
persons) and assessing their individual needs;
    (2) Addressing the emergency shelter and transitional housing needs 
of homeless persons;
    (3) Helping homeless persons (especially chronically homeless 
individuals and families, families with children, veterans and their 
families, and unaccompanied youth) make the transition to permanent 
housing and independent living, including shortening the period of time 
that individuals and families experience homelessness, facilitating 
access for homeless individuals and families to affordable housing 
units, and preventing individuals and families who were recently 
homeless from becoming homeless again; and
    (4) Helping low-income individuals and families avoid becoming 
homeless, especially extremely low-income individuals and families and 
those who are
    (i) Likely to become homeless after being discharged from publicly 
funded institutions and systems of care (such as health-care facilities, 
mental health facilities, foster care and other youth facilities, and 
corrections programs and institutions);
    (ii) Receiving assistance from public or private agencies that 
address housing, health, social services, employment, education, or 
youth needs.
    (d) CDBG. For CDBG recipients, the report shall include a 
description of the use of CDBG funds during the program

[[Page 529]]

year and an assessment by the jurisdiction of the relationship of that 
use to the priorities and specific objectives identified in the plan, 
giving special attention to the highest priority activities that were 
identified. This element of the report must specify the nature of and 
reasons for any changes in its program objectives and indications of how 
the jurisdiction would change its programs as a result of its 
experiences. This element of the report also must include the number of 
extremely low-income, low-income, and moderate-income persons served by 
each activity where information on income by family size is required to 
determine the eligibility of the activity.
    (e) HOME. For HOME participating jurisdictions, the report shall 
include the results of on-site inspections of affordable rental housing 
assisted under the program to determine compliance with housing codes 
and other applicable regulations, an assessment of the jurisdiction's 
affirmative marketing actions and outreach to minority-owned and women-
owned businesses, data on the amount and use of program income for 
projects, including the number of projects and owner and tenant 
characteristics, and data on emergency transfers requested under 24 CFR 
5.2005(e) and 24 CFR 92.359, pertaining to victims of domestic violence, 
dating violence, sexual assault, or stalking, including data on the 
outcomes of such requests.
    (f) HOPWA. For jurisdictions receiving funding under the Housing 
Opportunities for Persons With AIDS program, the report must include the 
number of individuals assisted and the types of assistance provided, as 
well as data on emergency transfers requested under 24 CFR 5.2005(e), 
pertaining to victims of domestic violence, dating violence, sexual 
assault, or stalking, including data on the outcomes of such requests.
    (g) ESG. For jurisdictions receiving funding under the ESG program 
provided in 24 CFR part 576, the report, in a form prescribed by HUD, 
must include the number of persons assisted, the types of assistance 
provided, the project or program outcomes data measured under the 
performance standards developed in consultation with the Continuum(s) of 
Care, and data on emergency transfers requested under 24 CFR 5.2005(e) 
and 24 CFR 576.409, pertaining to victims of domestic violence, dating 
violence, sexual assault, or stalking, including data on the outcomes of 
such requests.
    (h) HTF. For jurisdictions receiving HTF funds, the report must 
describe the HTF program's accomplishments, and the extent to which the 
jurisdiction complied with its approved HTF allocation plan and the 
requirements of 24 CFR part 93, as well as data on emergency transfers 
requested under 24 CFR 5.2005(e) and 24 CFR 93.356, pertaining to 
victims of domestic violence, dating violence, sexual assault, or 
stalking, including data on the outcomes of such requests.
    (i) Evaluation by HUD. HUD shall review the performance report and 
determine whether it is satisfactory. If a satisfactory report is not 
submitted in a timely manner, HUD may suspend funding until a 
satisfactory report is submitted, or may withdraw and reallocate funding 
if HUD determines, after notice and opportunity for a hearing, that the 
jurisdiction will not submit a satisfactory report.
    (j) The report will include a comparison of the proposed versus 
actual outcomes for each outcome measure submitted with the consolidated 
plan and explain, if applicable, why progress was not made toward 
meeting goals and objectives.

(Approved by the Office of Management and Budget under control number 
2506-0117)

[60 FR 1896, Jan. 5, 1995, as amended at 71 FR 6971, Feb. 9, 2006; 76 FR 
75973, Dec. 5, 2011; 80 FR 5220, Jan. 30, 2015; 81 FR 80803, Nov. 16, 
2016]



Sec.  91.525  Performance review by HUD.

    (a) General. HUD shall review the performance of each jurisdiction 
covered by this part at least annually, including site visits by 
employees--insofar as practicable, assessing the following:
    (1) Management of funds made available under programs administered 
by HUD;
    (2) Compliance with the consolidated plan;
    (3) Accuracy of performance reports;

[[Page 530]]

    (4) Extent to which the jurisdiction made progress towards the 
statutory goals identified in Sec.  91.1; and
    (5) Efforts to ensure that housing assisted under programs 
administered by HUD is in compliance with contractual agreements and the 
requirements of law.
    (b) Report by HUD. HUD shall report on the performance review in 
writing, stating the length of time the jurisdiction has to review and 
comment on the report, which will be at least 30 days. HUD may revise 
the report after considering the jurisdiction's views, and shall make 
the report, the jurisdiction's comments, and any revisions available to 
the public within 30 days after receipt of the jurisdiction's comments.



Sec.  91.600  Waiver authority.

    Upon determination of good cause, HUD may, subject to statutory 
limitations, waive any provision of this part. Each such waiver must be 
in writing and must be supported by documentation of the pertinent facts 
and grounds.

[60 FR 50802, Sept. 29, 1995]



PART 92_HOME INVESTMENT PARTNERSHIPS PROGRAM--Table of Contents



                            Subpart A_General

Sec.
92.1 Overview.
92.2 Definitions.
92.3 Applicability of 2013 regulatory changes.
92.4 Waivers and suspension of requirements for disaster areas.

                      Subpart B_Allocation Formula

92.50 Formula allocation.

                          Insular Areas Program

92.60 Allocation amounts for insular areas.
92.61 Program description.
92.62 Review of program description and certifications.
92.63 Amendments to program description.
92.64 Applicability of requirements to insular areas.
92.65 Funding sanctions.
92.66 Reallocation.

  Subpart C_Consortia; Designation and Revocation of Designation as a 
                       Participating Jurisdiction

92.100 [Reserved]
92.101 Consortia.
92.102 Participation threshold amount.
92.103 Notification of intent to participate.
92.104 Submission of a consolidated plan and Assessment of Fair Housing.
92.105 Designation as a participating jurisdiction.
92.106 Continuous designation as a participating jurisdiction.
92.107 Revocation of designation as a participating jurisdiction.

                    Subpart D_Submission Requirements

92.150 Submission requirements.

                     Subpart E_Program Requirements

92.200 Private-public partnership.
92.201 Distribution of assistance.
92.202 Site and neighborhood standards.
92.203 Income determinations.
92.204 Applicability of requirements to entities that receive a 
          reallocation of HOME funds, other than participating 
          jurisdictions.

                   Eligible and Prohibited Activities

92.205 Eligible activities: General.
92.206 Eligible project costs.
92.207 Eligible administrative and planning costs.
92.208 Eligible community housing development organization (CHDO) 
          operating expense and capacity building costs.
92.209 Tenant-based rental assistance: Eligible costs and requirements.
92.210 Troubled HOME-assisted rental housing projects.
92.212 Pre-award costs.
92.213 HOME funds and public housing.
92.214 Prohibited activities and fees.
92.215 Limitation on jurisdictions under court order.

                            Income Targeting

92.216 Income targeting: Tenant-based rental assistance and rental 
          units.
92.217 Income targeting: Homeownership.

                    Matching Contribution Requirement

92.218 Amount of matching contribution.
92.219 Recognition of matching contribution.
92.220 Form of matching contribution.
92.221 Match credit.
92.222 Reduction of matching contribution requirement.

[[Page 531]]

                     Subpart F_Project Requirements

92.250 Maximum per-unit subsidy amount, underwriting, and subsidy 
          layering.
92.251 Property standards.
92.252 Qualification as affordable housing: Rental housing.
92.253 Tenant protections and selection.
92.254 Qualification as affordable housing: Homeownership.
92.255 Converting rental units to homeownership units for existing 
          tenants.
92.256 [Reserved]
92.257 Equal participation of faith-based organizations.
92.258 Elder cottage housing opportunity (ECHO) units.

          Subpart G_Community Housing Development Organizations

92.300 Set-aside for community housing development organizations 
          (CHDOs).
92.301 Project-specific assistance to community housing development 
          organizations.
92.302 Housing education and organizational support.
92.303 Tenant participation plan.

                  Subpart H_Other Federal Requirements

92.350 Other Federal requirements and nondiscrimination.
92.351 Affirmative marketing; minority outreach program.
92.352 Environmental review.
92.353 Displacement, relocation, and acquisition.
92.354 Labor.
92.355 Lead-based paint.
92.356 Conflict of interest.
92.357 Executive Order 12372.
92.358 Consultant activities.
92.359 VAWA requirements.

                     Subpart I_Technical Assistance

92.400 Coordinated Federal support for housing strategies.

                         Subpart J_Reallocations

92.450 General.
92.451 Reallocation of HOME funds from a jurisdiction that is not 
          designated a participating jurisdiction or has its designation 
          revoked.
92.452 Reallocation of community housing development organization set-
          aside.
92.453 Competitive reallocations.
92.454 Reallocations by formula.

                    Subpart K_Program Administration

92.500 The HOME Investment Trust Fund.
92.501 HOME Investment Partnership Agreement.
92.502 Program disbursement and information system.
92.503 Program income, repayments, and recaptured funds.
92.504 Participating jurisdiction responsibilities; written agreements; 
          on-site inspections.
92.505 Applicability of uniform administrative requirements.
92.506 Audit.
92.507 Closeout.
92.508 Recordkeeping.
92.509 Performance reports.

               Subpart L_Performance Reviews and Sanctions

92.550 Performance reviews.
92.551 Corrective and remedial actions.
92.552 Notice and opportunity for hearing; sanctions.

             Subpart M_American Dream Downpayment Initiative

92.600 Purpose.
92.602 Eligible activities.
92.604 ADDI allocation formula.
92.606 Reallocations.
92.608 Consolidated plan.
92.610 Program requirements
92.612 Project requirements.
92.614 Other Federal requirements.
92.616 Program administration.
92.618 Performance reviews and sanctions.

    Authority: 42 U.S.C. 3535(d), 12 U.S.C. 1701x and 4568.

    Source: 61 FR 48750, Sept. 16, 1996, unless otherwise noted.



                            Subpart A_General



Sec.  92.1  Overview.

    This part implements the HOME Investment Partnerships Act (the HOME 
Investment Partnerships Program). In general, under the HOME Investment 
Partnerships Program, HUD allocates funds by formula among eligible 
State and local governments to strengthen public-private partnerships 
and to expand the supply of decent, safe, sanitary, and affordable 
housing, with primary attention to rental housing, for very low-income 
and low-income families. Generally, HOME funds must be matched by 
nonfederal resources. State and local governments that become 
participating jurisdictions may use HOME funds to carry out multi-year 
housing strategies through acquisition, rehabilitation, and new 
construction of

[[Page 532]]

housing, and tenant-based rental assistance. Participating jurisdictions 
may provide assistance in a number of eligible forms, including loans, 
advances, equity investments, interest subsidies and other forms of 
investment that HUD approves.



Sec.  92.2  Definitions.

    The terms 1937 Act, ALJ, Fair Housing Act, HUD, Indian Housing 
Authority (IHA), Public housing, Public Housing Agency (PHA), and 
Secretary are defined in 24 CFR 5.100.
    Act means the HOME Investment Partnerships Act at title II of the 
Cranston-Gonzalez National Affordable Housing Act, as amended, 42 U.S.C. 
12701 et seq.
    ADDI funds means funds made available under subpart M through 
allocations and reallocations.
    Adjusted income. See Sec.  92.203.
    Annual income. See Sec.  92.203.
    CDBG program means the Community Development Block Grant program 
under 24 CFR part 570.
    Certification shall have the meaning provided in section 104(21) of 
the Cranston-Gonzalez National Affordable Housing Act, as amended, 42 
U.S.C. 12704.
    Commitment means:
    (1) The participating jurisdiction has executed a legally binding 
written agreement (that includes the date of the signature of each 
person signing the agreement) that meets the minimum requirements for a 
written agreement in Sec.  92.504(c). An agreement between the 
participating jurisdiction and a subrecipient that is controlled by the 
participating jurisdiction (e.g., an agency whose officials or employees 
are official or employees of the participating jurisdiction) does not 
constitute a commitment. An agreement between the representative unit 
and a member unit of general local government of a consortium does not 
constitute a commitment. Funds for administrative and planning costs of 
the HOME program are committed based on the amount in the program 
disbursement and information system for administration and planning. The 
written agreement must be:
    (i) With a State recipient or a subrecipient to use a specific 
amount of HOME funds to produce affordable housing, provide downpayment 
assistance, or provide tenant-based rental assistance;
    (ii) With a community housing development organization to provide 
operating expenses;
    (iii) With a community housing development organization to provide 
project-specific technical assistance and site control loans or project-
specific seed money loans, in accordance with Sec.  92.301;
    (iv) To develop the capacity of community housing development 
organizations in the jurisdiction, in accordance with Sec.  92.300(b); 
or
    (v) To commit to a specific local project, as defined in paragraph 
(2) of this definition.
    (2) Commit to a specific local project means:
    (i) If the project consists of rehabilitation or new construction 
(with or without acquisition) the participating jurisdiction (or State 
recipient or sub recipient) and project owner have executed a written 
legally binding agreement under which HOME assistance will be provided 
to the owner for an identifiable project for which all necessary 
financing has been secured, a budget and schedule have been established, 
and underwriting has been completed and under which construction is 
scheduled to start within twelve months of the agreement date. If the 
project is owned by the participating jurisdiction or State recipient, 
the project has been set up in the disbursement and information system 
established by HUD, and construction can reasonably be expected to start 
within twelve months of the project set-up date.
    (ii)(A) If the project consists of acquisition of standard housing 
and the participating jurisdiction (or State recipient or subrecipient) 
is acquiring the property with HOME funds, the participating 
jurisdiction (or State recipient or subrecipient) and the property owner 
have executed a legally binding contract for sale of an identifiable 
property and the property title will be transferred to the participating 
jurisdiction (or State recipient or subrecipient) within six months of 
the date of the contract.

[[Page 533]]

    (B) If the project consists of acquisition of standard housing and 
the participating jurisdiction (or State recipient or subrecipient) is 
providing HOME funds to a family to acquire single family housing for 
homeownership or to a purchaser to acquire rental housing, the 
participating jurisdiction (or State recipient or subrecipient) and the 
family or purchaser have executed a written agreement under which HOME 
assistance will be provided for the purchase of the single family 
housing or rental housing and the property title will be transferred to 
the family or purchaser within six months of the agreement date.
    (iii) If the project consists of tenant-based rental assistance, the 
participating jurisdiction (or State recipient, or subrecipient) has 
entered into a rental assistance contract with the owner or the tenant 
in accordance with the provisions of Sec.  92.209.
    Community housing development organization means a private nonprofit 
organization that:
    (1) Is organized under State or local laws;
    (2) Has no part of its net earnings inuring to the benefit of any 
member, founder, contributor, or individual;
    (3) Is neither controlled by, nor under the direction of, 
individuals or entities seeking to derive profit or gain from the 
organization. A community housing development organization may be 
sponsored or created by a for-profit entity, but:
    (i) The for-profit entity may not be an entity whose primary purpose 
is the development or management of housing, such as a builder, 
developer, or real estate management firm.
    (ii) The for-profit entity may not have the right to appoint more 
than one-third of the membership of the organization's governing body. 
Board members appointed by the for-profit entity may not appoint the 
remaining two-thirds of the board members;
    (iii) The community housing development organization must be free to 
contract for goods and services from vendors of its own choosing; and
    (iv) The officers and employees of the for-profit entity may not be 
officers or employees of the community housing development organization.
    (4) Has a tax exemption ruling from the Internal Revenue Service 
under section 501(c)(3) or (4) of the Internal Revenue Code of 1986 (26 
CFR 1.501(c)(3)-1 or 1.501(c)(4)-1)), is classified as a subordinate of 
a central organization non-profit under section 905 of the Internal 
Revenue Code of 1986, or if the private nonprofit organization is an 
wholly owned entity that is disregarded as an entity separate from its 
owner for tax purposes (e.g., a single member limited liability company 
that is wholly owned by an organization that qualifies as tax-exempt), 
the owner organization has a tax exemption ruling from the Internal 
Revenue Service under section 501(c)(3) or (4) of the Internal Revenue 
Code of 1986 and meets the definition of ``community housing development 
organization;''
    (5) Is not a governmental entity (including the participating 
jurisdiction, other jurisdiction, Indian tribe, public housing 
authority, Indian housing authority, housing finance agency, or 
redevelopment authority) and is not controlled by a governmental entity. 
An organization that is created by a governmental entity may qualify as 
a community housing development organization; however, the governmental 
entity may not have the right to appoint more than one-third of the 
membership of the organization's governing body and no more than one- 
third of the board members may be public officials or employees of 
governmental entity. Board members appointed by a governmental entity 
may not appoint the remaining two-thirds of the board members. The 
officers or employees of a governmental entity may not be officers or 
employees of a community housing development organization;
    (6) Has standards of financial accountability that conform to 2 CFR 
200.302, `Financial Management' and 2 CFR 200.303, `Internal Controls;'
    (7) Has among its purposes the provision of decent housing that is 
affordable to low-income and moderate-income persons, as evidenced in 
its charter, articles of incorporation, resolutions or by-laws;
    (8) Maintains accountability to low-income community residents by:
    (i) Maintaining at least one-third of its governing board's 
membership for

[[Page 534]]

residents of low-income neighborhoods, other low-income community 
residents, or elected representative of low-income neighborhood 
organizations. For urban areas, ``community'' may be a neighborhood or 
neighborhoods, city, county or metropolitan area; for rural areas, it 
may be a neighborhood or neighborhoods, town, village, county, or multi-
county area (but not the entire State); and
    (ii) Providing a formal process for low-income program beneficiaries 
to advise the organization in its decisions regarding the design, 
siting, development, and management of affordable housing;
    (9) Has a demonstrated capacity for carrying out housing projects 
assisted with HOME funds. A designated organization undertaking 
development activities as a developer or sponsor must satisfy this 
requirement by having paid employees with housing development experience 
who will work on projects assisted with HOME funds. For its first year 
of funding as a community housing development organization, an 
organization may satisfy this requirement through a contract with a 
consultant who has housing development experience to train appropriate 
key staff of the organization. An organization that will own housing 
must demonstrate capacity to act as owner of a project and meet the 
requirements of Sec.  92.300(a)(2). A nonprofit organization does not 
meet the test of demonstrated capacity based on any person who is a 
volunteer or whose services are donated by another organization; and
    (10) Has a history of serving the community within which housing to 
be assisted with HOME funds is to be located. In general, an 
organization must be able to show one year of serving the community 
before HOME funds are reserved for the organization. However, a newly 
created organization formed by local churches, service organizations or 
neighborhood organizations may meet this requirement by demonstrating 
that its parent organization has at least a year of serving the 
community.
    Consolidated plan means the plan submitted and approved in 
accordance with 24 CFR part 91.
    Displaced homemaker means an individual who:
    (1) Is an adult;
    (2) Has not worked full-time full-year in the labor force for a 
number of years but has, during such years, worked primarily without 
remuneration to care for the home and family; and
    (3) Is unemployed or underemployed and is experiencing difficulty in 
obtaining or upgrading employment.
    Family has the same meaning given that term in 24 CFR 5.403.
    First-time homebuyer means an individual and his or her spouse who 
have not owned a home during the three-year period prior to purchase of 
a home with assistance under the American Dream Downpayment Initiative 
(ADDI) described in subpart M of this part. The term first-time 
homebuyer also includes an individual who is a displaced homemaker or 
single parent, as those terms are defined in this section. An individual 
shall not be excluded from consideration as a first-time homebuyer on 
the basis that the individual owns or owned, as a principal residence 
during the three-year period, a dwelling unit whose structure is not 
permanently affixed to a permanent foundation in accordance with local 
or other applicable regulations or is not in compliance with State, 
local, or model building codes, or other applicable codes, and cannot be 
brought into compliance with the codes for less than the cost of 
constructing a permanent structure.
    HOME funds means funds made available under this part through 
allocations and reallocations, plus program income.
    Homebuyer counseling has the same meaning as homeownership 
counseling in 24 CFR 5.100, and is a type of housing counseling.
    Homeownership means ownership in fee simple title in a 1- to 4-unit 
dwelling or in a condominium unit, or equivalent form of ownership 
approved by HUD.
    (1) The land may be owned in fee simple or the homeowner may have a 
99-year ground lease.
    (i) For housing located in the insular areas, the ground lease must 
be 40 years or more.
    (ii) For housing located on Indian trust or restricted Indian lands 
or a

[[Page 535]]

Community Land Trust, the ground lease must be 50 years or more.
    (iii) For manufactured housing, the ground lease must be for a 
period at least equal to the applicable period of affordability in Sec.  
92.254.
    (2) Right to possession under a contract for deed, installment 
contract, or land contract (pursuant to which the deed is not given 
until the final payment is made) is not an equivalent form of ownership.
    (3) The ownership interest may be subject only to the restrictions 
on resale required under Sec.  92.254(a); mortgages, deeds of trust, or 
other liens or instruments securing debt on the property as approved by 
the participating jurisdiction; or any other restrictions or 
encumbrances that do not impair the good and marketable nature of title 
to the ownership interest.
    (4) The participating jurisdiction must determine whether or not 
ownership or membership in a cooperative or mutual housing project 
constitutes homeownership under State law; however, if the cooperative 
or mutual housing project receives Low Income Housing Tax Credits, the 
ownership or membership does not constitute homeownership.
    Household means one or more persons occupying a housing unit.
    Housing includes manufactured housing and manufactured housing lots, 
permanent housing for disabled homeless persons, transitional housing, 
single-room occupancy housing, and group homes. Housing also includes 
elder cottage housing opportunity (ECHO) units that are small, free- 
standing, barrier-free, energy-efficient, removable, and designed to be 
installed adjacent to existing single-family dwellings. Housing does not 
include emergency shelters (including shelters for disaster victims) or 
facilities such as nursing homes, convalescent homes, hospitals, 
residential treatment facilities, correctional facilities, halfway 
houses, housing for students, or dormitories (including farmworker 
dormitories).
    Housing counseling has the meaning given the term in 24 CFR 5.100.
    Insular areas means Guam, the Northern Mariana Islands, the United 
States Virgin Islands, and American Samoa.
    Jurisdiction means a State or unit of general local government.
    Low-income families means families whose annual incomes do not 
exceed 80 percent of the median income for the area, as determined by 
HUD, with adjustments for smaller and larger families, except that HUD 
may establish income ceilings higher or lower than 80 percent of the 
median for the area on the basis of HUD findings that such variations 
are necessary because of prevailing levels of construction costs or fair 
market rents, or unusually high or low family incomes. An individual 
does not qualify as a low-income family if the individual is a student 
who is not eligible to receive Section 8 assistance under 24 CFR 5.612.
    Metropolitan city has the meaning given the term in 24 CFR 570.3.
    Neighborhood means a geographic location designated in comprehensive 
plans, ordinances, or other local documents as a neighborhood, village, 
or similar geographical designation that is within the boundary but does 
not encompass the entire area of a unit of general local government; 
except that if the unit of general local government has a population 
under 25,000, the neighborhood may, but need not, encompass the entire 
area of a unit of general local government.
    Participating jurisdiction means a jurisdiction (as defined in this 
section) that has been so designated by HUD in accordance with Sec.  
92.105.
    Person with disabilities means a household composed of one or more 
persons, at least one of whom is an adult, who has a disability.
    (1) A person is considered to have a disability if the person has a 
physical, mental, or emotional impairment that:
    (i) Is expected to be of long-continued and indefinite duration;
    (ii) Substantially impedes his or her ability to live independently; 
and
    (iii) Is of such a nature that such ability could be improved by 
more suitable housing conditions.
    (2) A person will also be considered to have a disability if he or 
she has a developmental disability, which is a severe, chronic 
disability that:
    (i) Is attributable to a mental or physical impairment or 
combination of mental and physical impairments;

[[Page 536]]

    (ii) Is manifested before the person attains age 22;
    (iii) Is likely to continue indefinitely;
    (iv) Results in substantial functional limitations in three or more 
of the following areas of major life activity: self-care, receptive and 
expressive language, learning, mobility, self-direction, capacity for 
independent living, and economic self-sufficiency; and
    (v) Reflects the person's need for a combination and sequence of 
special, interdisciplinary, or generic care, treatment, or other 
services that are of lifelong or extended duration and are individually 
planned and coordinated. Notwithstanding the preceding provisions of 
this definition, the term ``person with disabilities'' includes two or 
more persons with disabilities living together, one or more such persons 
living with another person who is determined to be important to their 
care or well-being, and the surviving member or members of any household 
described in the first sentence of this definition who were living, in a 
unit assisted with HOME funds, with the deceased member of the household 
at the time of his or her death.
    Program income means gross income received by the participating 
jurisdiction, State recipient, or a subrecipient directly generated from 
the use of HOME funds or matching contributions. When program income is 
generated by housing that is only partially assisted with HOME funds or 
matching funds, the income shall be prorated to reflect the percentage 
of HOME funds used. Program income includes, but is not limited to, the 
following:
    (1) Proceeds from the disposition by sale or long-term lease of real 
property acquired, rehabilitated, or constructed with HOME funds or 
matching contributions;
    (2) Gross income from the use or rental of real property, owned by 
the participating jurisdiction, State recipient, or a subrecipient, that 
was acquired, rehabilitated, or constructed, with HOME funds or matching 
contributions, less costs incidental to generation of the income 
(Program income does not include gross income from the use, rental or 
sale of real property received by the project owner, developer, or 
sponsor, unless the funds are paid by the project owner, developer, or 
sponsor to the participating jurisdiction, subrecipient or State 
recipient);
    (3) Payments of principal and interest on loans made using HOME 
funds or matching contributions;
    (4) Proceeds from the sale of loans made with HOME funds or matching 
contributions;
    (5) Proceeds from the sale of obligations secured by loans made with 
HOME funds or matching contributions;
    (6) Interest earned on program income pending its disposition; and
    (7) Any other interest or return on the investment permitted under 
Sec.  92.205(b) of HOME funds or matching contributions.
    Project means a site or sites together with any building (including 
a manufactured housing unit) or buildings located on the site(s) that 
are under common ownership, management, and financing and are to be 
assisted with HOME funds as a single undertaking under this part. The 
project includes all the activities associated with the site and 
building. For tenant-based rental assistance, project means assistance 
to one or more families.
    Project completion means that all necessary title transfer 
requirements and construction work have been performed; the project 
complies with the requirements of this part (including the property 
standards under Sec.  92.251); the final drawdown of HOME funds has been 
disbursed for the project; and the project completion information has 
been entered into the disbursement and information system established by 
HUD, except that with respect to rental housing project completion, for 
the purposes of Sec.  92.502(d) of this part, project completion occurs 
upon completion of construction and before occupancy. For tenant-based 
rental assistance, project completion means the final drawdown has been 
disbursed for the project.
    Reconstruction means the rebuilding, on the same lot, of housing 
standing on a site at the time of project commitment, except that 
housing that was destroyed may be rebuilt on the same lot if HOME funds 
are committed within 12 months of the date of destruction. The

[[Page 537]]

number of housing units on the lot may not be decreased or increased as 
part of a reconstruction project, but the number of rooms per unit may 
be increased or decreased. Reconstruction also includes replacing an 
existing substandard unit of manufactured housing with a new or standard 
unit of manufactured housing. Reconstruction is rehabilitation for 
purposes of this part.
    Single family housing means a one-to four-family residence, 
condominium unit, cooperative unit, combination of manufactured housing 
and lot, or manufactured housing lot.
    Single parent means an individual who:
    (1) Is unmarried or legally separated from a spouse; and
    (2) Has one or more minor children of whom the individual has 
custody or joint custody, or is pregnant.
    Single room occupancy (SRO) housing means housing (consisting of 
single- room dwelling units) that is the primary residence of its 
occupant or occupants. The unit must contain either food preparation or 
sanitary facilities (and may contain both) if the project consists of 
new construction, conversion of nonresidential space, or reconstruction. 
For acquisition or rehabilitation of an existing residential structure 
or hotel, neither food preparation nor sanitary facilities are required 
to be in the unit. If the units do not contain sanitary facilities, the 
building must contain sanitary facilities that are shared by tenants. A 
project's designation as an SRO cannot be inconsistent with the 
building's zoning and building code classification.
    State means any state of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, or any agency or 
instrumentality thereof that is established pursuant to legislation and 
designated by the chief executive officer to act on behalf of the state 
with regard to the provisions of this part; however, for purposes of the 
American Dream Downpayment Initiative (ADDI) described in subpart M of 
this part, the term ``state'' does not include the Commonwealth of 
Puerto Rico (except for FY2003 ADDI funds).
    State recipient. See Sec.  92.201(b)(2).
    Subrecipient means a public agency or nonprofit organization 
selected by the participating jurisdiction to administer all or some of 
the participating jurisdiction's HOME programs to produce affordable 
housing, provide downpayment assistance, or provide tenant-based rental 
assistance. A public agency or nonprofit organization that receives HOME 
funds solely as a developer or owner of a housing project is not a 
subrecipient. The participating jurisdiction's selection of a 
subrecipient is not subject to the procurement procedures and 
requirements.
    Tenant-based rental assistance is a form of rental assistance in 
which the assisted tenant may move from a dwelling unit with a right to 
continued assistance. Tenant-based rental assistance under this part 
also includes security deposits for rental of dwelling units.
    Transitional housing means housing that:
    (1) Is designed to provide housing and appropriate supportive 
services to persons, including (but not limited to) deinstitutionalized 
individuals with disabilities, homeless individuals with disabilities, 
and homeless families with children; and
    (2) Has as its purpose facilitating the movement of individuals and 
families to independent living within a time period that is set by the 
participating jurisdiction or project owner before occupancy.
    Uniform Physical Condition Standards (UPCS) means uniform national 
standards established by HUD pursuant to 24 CFR 5.703 for housing that 
is decent, safe, sanitary, and in good repair. Standards are established 
for inspectable items for each of the following areas: site, building 
exterior, building systems, dwelling units, and common areas.
    Unit of general local government means a city, town, township, 
county, parish, village, or other general purpose political subdivision 
of a State; a consortium of such political subdivisions recognized by 
HUD in accordance with Sec.  92.101; and any agency or instrumentality 
thereof that is established pursuant to legislation and designated by 
the chief executive to act on behalf of the jurisdiction with regard to 
provisions of this part. When a county is an urban county, the urban 
county is the

[[Page 538]]

unit of general local government for purposes of the HOME Investment 
Partnerships Program.
    Urban county has the meaning given the term in 24 CFR 570.3.
    Very low-income families means low- income families whose annual 
incomes do not exceed 50 percent of the median family income for the 
area, as determined by HUD with adjustments for smaller and larger 
families, except that HUD may establish income ceilings higher or lower 
than 50 percent of the median for the area on the basis of HUD findings 
that such variations are necessary because of prevailing levels of 
construction costs or fair market rents, or unusually high or low family 
incomes. An individual does not qualify as a very low-income family if 
the individual is a student who is not eligible to receive Section 8 
assistance under 24 CFR 5.612.

[61 FR 48750, Sept. 16, 1996, as amended at 67 FR 61755, Oct. 1, 2002; 
69 FR 16765, Mar. 30, 2004; 72 FR 16685, Apr. 4, 2007; 78 FR 44664, July 
24, 2013; 80 FR 75934, Dec. 7, 2015; 81 FR 86952, Dec. 2, 2016; 81 FR 
90657, Dec. 14, 2016]



Sec.  92.3  Applicability of 2013 regulatory changes.

    The regulations of this part, as revised by final rule published on 
July 24, 2013 are applicable to projects for which HOME funds are 
committed on or after August 23, 2013, with the exception of the 
following provisions;
    (a) Section 92.2, for the definition of commitment, the change which 
eliminates reservations of funds that are not project-specific to CHDOs 
as a commitment will be applicable on October 22, 2013 and will be 
implemented by HUD for deadlines that occur on or after January 1, 2015;
    (b) Section 92.251, Property Standards, will apply to projects to 
which funds are committed on or after January 24, 2015;
    (c) Section 92.254(f). Homebuyer program policies, for written 
policies related to underwriting, responsible lending, and refinancing, 
will be applicable on January 24, 2014;
    (d) Section 92.500(d)(1)(C), establishing the separate 5-year 
deadline for expenditure of CHDO set-aside funds will be applicable on 
January 1, 2015 and will be implemented by HUD for all deadlines that 
occur on or after that date; and
    (e) Section 92.504(a), for written policies, procedures, and 
systems, will be applicable on July 24, 2014.
    (f) Section 92.504(d)(2), for financial oversight of projects 
assisted with HOME funds, will be applicable on July 24, 2014.

[78 FR 44666, Aug. 22, 2013]



Sec.  92.4  Waivers and suspension of requirements for disaster areas.

    HUD's authority for waiver of regulations and for the suspension of 
requirements to address damage in a Presidentially declared disaster 
area is described in 24 CFR 5.110 and in section 290 of the Act, 
respectively.



                      Subpart B_Allocation Formula



Sec.  92.50  Formula allocation.

    (a) Jurisdictions eligible for a formula allocation. HUD will 
provide allocations of funds in amounts determined by the formula 
described in this section to units of general local governments that, as 
of the end of the previous fiscal year, are metropolitan cities, urban 
counties, or consortia approved under Sec.  92.101; and States.
    (b) Amounts available for allocation; State and local share. The 
amount of funds that are available for allocation by the formula under 
this section is equal to the balance of funds remaining after reserving 
amounts for insular areas, housing education and organizational support, 
other support for State and local housing strategies, and other purposes 
authorized by Congress, in accordance with the Act and appropriations.
    (c) Formula factors. The formula for determining allocations uses 
the following factors. The first and sixth factors are weighted 0.1; the 
other four factors are weighted 0.2.
    (1) Vacancy-adjusted rental units where the household head is at or 
below the poverty level. These rental units are multiplied by the ratio 
of the national rental vacancy rate over a jurisdiction's rental vacancy 
rate.

[[Page 539]]

    (2) Occupied rental units with at least one of four problems 
(overcrowding, incomplete kitchen facilities, incomplete plumbing, or 
high rent costs). Overcrowding is a condition that exists if there is 
more than one person per room occupying the unit. Incomplete kitchen 
facilities means the unit lacks a sink with running water, a range, or a 
refrigerator. Incomplete plumbing means the unit lacks hot and cold 
piped water, a flush toilet, or a bathtub or shower inside the unit for 
the exclusive use of the occupants of the unit. High rent costs occur 
when more than 30 percent of household income is used for rent.
    (3) Rental units built before 1950 occupied by poor households.
    (4) Rental units described in paragraph (c)(2) of this section 
multiplied by the ratio of the cost of producing housing for a 
jurisdiction divided by the national cost.
    (5) Number of families at or below the poverty level.
    (6) Population of a jurisdiction multiplied by a net per capita 
income (pci). To compute net pci for a jurisdiction or for the nation, 
the pci of a three person family at the poverty threshold is subtracted 
from the pci of the jurisdiction or of the nation. The index is 
constructed by dividing the national net pci by the net pci of a 
jurisdiction.
    (d) Calculating formula allocations for units of general local 
government. (1) Initial allocation amounts for units of general local 
government described in paragraph (a) of this section are determined by 
multiplying the sum of the shares of the six factors in paragraph (c) of 
this section by 60 percent of the amount available under paragraph (b) 
of this section for formula allocation. The shares are the ratio of the 
weighted factor for each jurisdiction over the corresponding factor for 
the total for all of these units of general local government.
    (2) If any of the initial amounts for such units of general local 
government in Puerto Rico exceeds twice the national average, on a per 
rental unit basis, that amount is capped at twice the national average.
    (3) To determine the maximum number of units of general local 
government that receive a formula allocation, only one jurisdiction (the 
unit of general local government with the smallest allocation of HOME 
funds) is dropped from the pool of eligible jurisdictions on each 
successive recalculation, except that jurisdictions that are 
participating jurisdictions (other than consortia that fail to renew the 
membership of all of their member jurisdictions) are not dropped. Then 
the amount of funds available for units of general local government is 
redistributed to all others. This recalculation/redistribution continues 
until all remaining units of general local government receive an 
allocation of $500,000 or more or are participating jurisdictions. Only 
units of general local government which receive an allocation of 
$500,000 or more under the formula or which are participating 
jurisdictions will be awarded an allocation. In fiscal years in which 
Congress appropriates less than $1.5 billion of HOME funds, $335,000 is 
substituted for $500,000.
    (4) The allocation amounts determined under paragraph (d)(3) of this 
section are reduced by any amounts that are necessary to provide 
increased allocations to States that have no unit of general local 
government receiving a formula allocation (see paragraph (e)(4) of this 
section). These reductions are made on a pro rata basis, except that no 
unit of general local government allocation is reduced below $500,000 
(or $335,000 in fiscal years in which Congress appropriates less than 
$1.5 billion of HOME funds) and no participating jurisdiction allocation 
which is below this amount is reduced.
    (e) Calculating formula allocations for States. (1) Forty percent of 
the funds available for allocation under paragraph (b) of this section 
are allocated to States. The allocation amounts for States are 
calculated by determining initial amounts for each State, based on the 
sum of the shares of the six factors. For 20 percent of the funds to be 
allocated to States, the shares are the ratio of the weighted factor for 
the entire State over the corresponding factor for the total for all 
States. For 80 percent of the funds to be allocated to States, the 
shares are the ratio of the weighted factor for all units of general 
local government within the State that do not receive a formula 
allocation

[[Page 540]]

over the corresponding factor for the total for all States.
    (2) If the initial amounts for Puerto Rico (based on either or both 
the 80 percent of funds or 20 percent of funds calculation) exceed twice 
the national average, on a per rental unit basis, each amount that 
exceeds the national average is capped at twice the national average, 
and the resultant funds are reallocated to other States on a prorata 
basis.
    (3) If the initial amounts when combined for any State are less than 
the $3,000,000, the allocation to that State is increased to the 
$3,000,000 and all other State allocations are reduced by an equal 
amount on a prorata basis, except that no State allocation is reduced 
below $3,000,000.
    (4) The allocation amount for each State that has no unit of general 
local government within the State receiving an allocation under 
paragraph (d) of this section is increased by $500,000. Funds for this 
increase are derived from the funds available for units of general local 
government, in accordance with paragraph (d)(4) of this section.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28928, May 28, 1997; 
67 FR 61755, Oct. 1, 2002]

                          Insular Areas Program



Sec.  92.60  Allocation amounts for insular areas.

    (a) Initial allocation amount for each insular area. The initial 
allocation amount for each insular area is determined based upon the 
insular area's population and occupied rental units compared to all 
insular areas.
    (b) Threshold requirements. The HUD Field Office shall review each 
insular area's progress on outstanding allocations made under this 
section, based on the insular area's performance report, the timeliness 
of close-outs, and compliance with fund management requirements and 
regulations, taking into consideration the size of the allocation and 
the degree and complexity of the program. If HUD determines from this 
review that the insular area does not have the capacity to administer 
effectively a new allocation, or a portion of a new allocation, in 
addition to allocations currently under administration, HUD may reduce 
the insular area's initial allocation amount.
    (c) Previous audit findings and outstanding monetary obligations. 
HUD shall not make an allocation to an insular area that has either an 
outstanding audit finding for any HUD program, or an outstanding 
monetary obligation to HUD that is in arrears, or for which a repayment 
schedule has not been established. This restriction does not apply if 
the HUD Field Office finds that the insular area has made a good faith 
effort to clear the audit and, when there is an outstanding monetary 
obligation to HUD, the insular area has made a satisfactory arrangement 
for repayment of the funds due HUD and payments are current.
    (d) Increases to the initial allocation amount. If funds reserved 
for the insular areas are available because HUD has decreased the amount 
for one or more insular areas in accordance with paragraphs (b) or (c) 
of this section, or for any other reason, HUD may increase the 
allocation amount for one or more of the remaining insular areas based 
upon the insular area's performance in committing HOME funds within the 
24 month deadline, producing housing units described in its program 
description, and meeting HOME program requirements. Funds that become 
available but which are not used to increase the allocation amount for 
one or more of the remaining insular areas will be reallocated in 
accordance with Sec.  92.66.
    (e) Notice of allocation amounts. HUD will notify each insular area, 
in writing, as to the amount of its HOME allocation.



Sec.  92.61  Program description.

    (a) Submission requirement. Not later than 90 days after HUD 
notifies the insular area of the amount of its allocation, the insular 
area must submit a program description and certifications to HUD.
    (b) Content of program description. The program description must 
contain the following:
    (1) An executed Standard Form 424;
    (2) The estimated use of HOME funds and a description of projects 
and eligible activities, including number of

[[Page 541]]

units to be assisted, estimated costs, and tenure type (rental or owner 
occupied) and, for tenant assistance, number of households to be 
assisted;
    (3) A timetable for the implementation of the projects or eligible 
activities;
    (4) If the insular area intends to use HOME funds for homebuyers, 
the guidelines for resale or recapture as required in Sec.  
92.254(a)(5);
    (5) If the insular area intends to use HOME funds for tenant-based 
rental assistance, a description of how the program will be administered 
consistent with the minimum guidelines described in Sec.  92.209;
    (6) If an insular area intends to use other forms of investment not 
described in Sec.  92.205(b), a description of the other forms of 
investment;
    (7) A statement of the policy and procedures to be followed by the 
insular area to meet the requirements for affirmative marketing, and 
establishing and overseeing a minority and women business outreach 
program under Sec.  92.351;
    (8) If the insular intends to use HOME funds for refinancing along 
with rehabilitation, the insular area's guidelines described in Sec.  
92.206(b).
    (c) Certifications. The following certifications must accompany the 
program description:
    (1) A certification that, before committing funds to a project, the 
insular area will evaluate the project in accordance with guidelines 
that it adopts for this purpose and will not invest any more HOME funds 
in combination with other governmental assistance than is necessary to 
provide affordable housing;
    (2) If the insular area intends to provide tenant-based rental 
assistance, the certification required by Sec.  92.209;
    (3) A certification that the submission of the program description 
is authorized under applicable law and the insular area possesses the 
legal authority to carry out the HOME Investment Partnerships Program, 
in accordance with the HOME regulations;
    (4) A certification that it will comply with the acquisition and 
relocation requirements of the Uniform Relocation Assistance and Real 
Property Acquisition Policies Act of 1970, as amended, implementing 
regulations at 49 CFR part 24 and the requirements of Sec.  92.353;
    (5) A certification that the insular area will use HOME funds in 
compliance with all requirements of this part;
    (6) The certification required with regard to lobbying required by 
24 CFR part 87, together with disclosure forms, if required by 24 CFR 
part 87.

[61 FR 48750, Sept. 16, 1996, as amended at 72 FR 73493, Dec. 27, 2007]



Sec.  92.62  Review of program description and certifications.

    (a) Review of program description. The responsible HUD Field Office 
will review an insular area's program description and will approve the 
description unless the insular area has failed to submit information 
sufficient to allow HUD to make the necessary determinations required 
for Sec.  92.61 (b)(4), (b)(6), and (b)(7), or the guidelines under 
(b)(8) are not satisfactory to HUD, if applicable; or if the level of 
proposed projects or eligible activities is not within the management 
capability demonstrated by past performance in housing and community 
development programs. If the insular area has not submitted information 
on Sec.  92.61 (b)(4), (b)(6), and (b)(7), or the guidelines under 
(b)(8) are not satisfactory to HUD, if applicable; or if the level of 
proposed projects or eligible activities is not within the management 
capability demonstrated by past performance in housing and community 
development programs, the insular area may be required to furnish such 
further information or assurances as HUD may consider necessary to find 
the program description and certifications satisfactory. The HUD Field 
Office shall work with the insular area to achieve a complete and 
satisfactory program description.
    (b) Review period. Within thirty days of receipt of the program 
description, the HUD Field Office will notify the insular area if 
determinations cannot be made under Sec.  92.61 (b)(4), (b)(6), (b)(7), 
or (b)(8) with the supporting information submitted, or if the proposed 
projects or activities are beyond currently demonstrated capability. The 
insular area will have a reasonable period of time, agreed upon 
mutually, to submit the necessary supporting information or to

[[Page 542]]

revise the proposed projects or activities in its program description.
    (c) HOME Investment Partnership Agreement. After HUD Field Office 
approval under this section, a HOME funds allocation is made by HUD 
execution of the agreement, subject to execution by the insular area. 
The funds are obligated on the date HUD notifies the insular area of 
HUD's execution of the agreement.



Sec.  92.63  Amendments to program description.

    An insular area must submit to HUD for approval any substantial 
change in its HUD-approved program description that it makes and must 
document any other changes in its file. A substantial change involves a 
change in the guidelines for resale or recapture (Sec.  92.61(b)(4)), 
other forms of investment (Sec.  92.61(b)(6)), minority and women 
business outreach program (Sec.  92.61(b)(7)) or refinancing (Sec.  
92.61(b)(8)); or a change in the tenure type of the project or 
activities; or a funding increase to a project or activity of $100,000 
or 50% (whichever is greater). The HUD Field Office will notify the 
insular area if its program description, as amended, does not permit 
determinations to be made under Sec.  92.61 (b)(4), (b)(6), (b)(7), or 
(b)(8), or if the level of proposed projects or eligible activities is 
not within the management capability demonstrated by past performance in 
housing and community development programs, within 30 days of receipt. 
The insular area will have a reasonable period of time, agreed upon 
mutually, to submit the necessary supporting information to revise the 
proposed projects or activities in its program description.



Sec.  92.64  Applicability of requirements to insular areas.

    (a) Insular areas are subject to the same requirements in subpart E 
(Program Requirements), subpart F (Project Requirements), subpart K 
(Program Administration), and subpart L (Performance Reviews and 
Sanctions) of this part as participating jurisdictions, except for the 
following:
    (1) Subpart E (Program Requirements): Administrative costs, as 
described in Sec.  92.207, are eligible costs for insular areas in an 
amount not to exceed 15 percent of the HOME funds provided to the 
insular area. The matching contribution requirements in this part do not 
apply.
    (2) Subpart K (Program Administration):
    (i) Section 92.500 (The HOME Investment Trust Fund) does not apply. 
HUD will establish a HOME account in the United States Treasury for each 
insular area and the HOME funds must be used for approved activities. A 
local account must be established for program income. Each insular area 
may use either a separate local HOME account or a subsidiary account 
within its general fund (or other appropriate fund) as the local HOME 
account. HUD will recapture HOME funds in the HOME Treasury account by 
the amount of:
    (A) Any funds that are not committed within 24 months after the last 
day of the month in which HUD notifies the insular area of HUD's 
execution of the HOME Investment Partnership Agreement;
    (B) Any funds that are not expended within five years after the last 
day of the month in which HUD notifies the insular area of HUD's 
execution of the HOME Investment Partnership Agreement; and
    (C) Any penalties assessed by HUD under Sec.  92.552.
    (ii) Section 92.502 (Program disbursement and information system) 
applies, except that references to the HOME Investment Trust Fund mean 
HOME account. In addition, Sec.  92.502(c) does not apply, and instead 
compliance with Treasury Circular No. 1075 (31 CFR part 205) and 2 CFR 
200.305 is required.
    (iii) Section 92.503 (Program income, repayments, and recaptured 
funds) applies, except that the funds may be retained provided the funds 
are used for eligible activities in accordance with the requirements of 
this section.
    (3) Section 92.504 (Participating jurisdiction responsibilities; 
written agreements; on-site inspections) applies, except that the 
written agreement must ensure compliance with the requirements in this 
section.
    (4) Section 92.508 (Recordkeeping) applies with respect to the 
records that relate to the requirements of this section.

[[Page 543]]

    (5) Section 92.509 (Performance reports) applies, except that a 
performance report is required for the fiscal year allocation only after 
completion of the approved projects funded by the allocation.
    (6) Subpart L (Performance Reviews and Sanctions): Section 92.552 
does not apply. Instead, Sec.  92.65 applies.
    (b) The requirements of subpart H (Other Federal Requirements) of 
this part apply as follows: Sec.  92.357 Executive Order 12372 applies 
as written, and the requirements of the remaining sections which apply 
to participating jurisdictions are applicable to the insular areas.
    (c) Subpart B (Allocation Formula), subpart C (Consortia; 
Designation and Revocation as a Participating Jurisdiction), subpart D 
(Submission Requirements), and subpart G (Community Housing Development 
Organizations) of this part do not apply.
    (d) Subpart A (General) applies, except that for the definitions of 
commitment, program income, and subrecipient, ``participating 
jurisdiction'' means ``insular area.''

[69 FR 15673, Mar. 26, 2004, as amended at 80 FR 75935, Dec. 7, 2015]



Sec.  92.65  Funding sanctions.

    Following notice and opportunity for informal consultation, HUD may 
withhold, reduce or terminate the assistance where any corrective or 
remedial actions taken under Sec.  92.551 fail to remedy an insular 
area's performance deficiencies, and the deficiencies are sufficiently 
substantial, in the judgment of HUD, to warrant sanctions.



Sec.  92.66  Reallocation.

    Any HOME funds which are reduced or recaptured from an insular 
area's allocation and which are not used to increase the allocation 
amount for one or more of the remaining insular areas as provided in 
Sec.  92.60 of this part, will be reallocated by HUD to the States in 
accordance with the requirements in subpart J for reallocating funds 
initially allocated to a State.



  Subpart C_Consortia; Designation and Revocation of Designation as a 
                       Participating Jurisdiction



Sec.  92.100  [Reserved]



Sec.  92.101  Consortia.

    (a) A consortium of geographically contiguous units of general local 
government is a unit of general local government for purposes of this 
part if the requirements of this section are met.
    (1) One or more members of a proposed consortium or an existing 
consortium whose consortium qualification terminates at the end of the 
fiscal year, must provide written notification to the HUD Field Office 
of its intent to participate as a consortium in the HOME Program for the 
following fiscal year. HUD shall establish the deadline for this 
submission.
    (2) The proposed consortium must provide, at such time and in a 
manner and form prescribed by HUD, the qualification documents, which 
will include submission of:
    (i) A written certification by the State that the consortium will 
direct its activities to alleviation of housing problems within the 
State; and
    (ii) Documentation which demonstrates that the consortium has 
executed one legally binding cooperation agreement among its members 
authorizing one member unit of general local government to act in a 
representative capacity for all member units of general local government 
for the purposes of this part and providing that the representative 
member assumes overall responsibility for ensuring that the consortium's 
HOME Program is carried out in compliance with the requirements of this 
part.
    (3) Before the end of the fiscal year in which the notice of intent 
and documentation are submitted, HUD must determine that a proposed 
consortium has sufficient authority and administrative capability to 
carry out the purposes of this part on behalf of its member 
jurisdictions. HUD will endeavor to make its determination as quickly as 
practicable after receiving the consortium's documentation in order to 
provide the consortium an opportunity to correct its submission, if 
necessary. If

[[Page 544]]

the submission is deficient, HUD will work with the consortium to 
resolve the issue, but will not delay the formula allocations. HUD, at 
its discretion, may review the performance of an existing consortium 
that wishes to requalify to determine whether it continues to have 
sufficient authority and administrative capacity to successfully 
administer the program.
    (b) A metropolitan city or an urban county may be a member of a 
consortium. A unit of general local government that is included in an 
urban county may be part of a consortium, only if the urban county joins 
the consortium. The included local government cannot join the consortium 
except through participation in the urban county.
    (c) A non-urban county may be a member of a consortium. However, the 
county cannot on its own include the whole county in the consortium. A 
unit of local government located within the non-urban county that wishes 
to participate as a member of the consortium must sign the HOME 
consortium agreement.
    (d) If the representative unit of general local government 
distributes HOME funds to member units of general local government, the 
representative unit is responsible for applying to the member units of 
general local government the same requirements as are applicable to 
subrecipients.
    (e) The consortium's qualification as a unit of general local 
government continues for a period of three successive Federal fiscal 
years, or until HUD revokes its designation as a participating 
jurisdiction, or until an urban county member fails to requalify under 
the CDBG program as an urban county for a fiscal year included in the 
consortium's qualification period, or the consortium fails to receive a 
HOME allocation for the first Federal fiscal year of the consortium's 
qualification period and does not request to be considered to receive a 
HOME allocation in each of the subsequent two years. However, if a 
member urban county's three year CDBG qualification cycle is not the 
same as the consortium, the consortium may elect a shorter qualification 
period than three years to synchronize with the urban county's 
qualification period. During the period of qualification, additional 
units of general local government may join the consortium, but no 
included unit of general local government may withdraw from the 
consortium. See 24 CFR part 91, subpart E, for consolidated plan 
requirements for consortia, including the requirement that all members 
of the consortia must be on the same program year.
    (f) The consortium agreement may, at the option of its member units 
of general local government, contain a provision that authorizes 
automatic renewals for the successive qualification period of three 
Federal fiscal years. The provision authorizing automatic renewal must 
require the lead consortium member to give the consortium members 
written notice of their right to elect not to continue participation for 
the new qualification period.

[61 FR 48750, Sept. 16, 1996, as amended at 67 FR 61756, Oct. 1, 2002]



Sec.  92.102  Participation threshold amount.

    (a) To be eligible to become a participating jurisdiction, a unit of 
general local government must have a formula allocation under Sec.  
92.50 that is equal to or greater than $750,000; or
    (b) If a unit of general local government's formula allocation is 
less than $750,000, HUD must find:
    (1) The unit of general local government has a local PHA and has 
demonstrated a capacity to carry out the provisions of this part, as 
evidenced by satisfactory performance under one or more HUD-administered 
programs that provide assistance for activities comparable to the 
eligible activities under this part; and
    (2) The State has authorized HUD to transfer to the unit of general 
local government a portion of the State's allocation or the State, the 
unit of general local government, or both, has made available its own 
resources such that the sum of the amounts transferred or made available 
are equal to or greater than the difference between the unit of general 
local government's formula allocation and $750,000.
    (c) In fiscal years in which Congress appropriates less than $1.5 
billion for this part, $500,000 is substituted for

[[Page 545]]

$750,000 each time it appears in this section.



Sec.  92.103  Notification of intent to participate.

    (a) Not later than 30 days after receiving notice of its formula 
allocation amount, a jurisdiction must notify HUD in writing of its 
intention to become a participating jurisdiction.
    (b) A unit of general local government that has a formula allocation 
of less than $750,000, or less than $500,000 in fiscal years in which 
Congress appropriates less than $1.5 billion for this part, must submit, 
with its notice, one or more of the following, as appropriate, as 
evidence that it has met the threshold allocation requirements in Sec.  
92.102(b):
    (1) Authorization from the State to transfer a portion of its 
allocation to the unit of general local government;
    (2) A letter from the governor or designee indicating that the 
required funds have been approved and budgeted for the unit of general 
local government;
    (3) A letter from the chief executive officer of the unit of general 
local government indicating that the required funds have been approved 
and budgeted.



Sec.  92.104  Submission of a consolidated plan and Assessment of
Fair Housing.

    A jurisdiction that has not submitted a consolidated plan to HUD 
must submit to HUD, not later than 90 calendar days after providing 
notification under Sec.  92.103, a consolidated plan in accordance with 
24 CFR part 91 and an Assessment of Fair Housing (AFH) in accordance 
with 24 CFR 5.150 through 5.180.

[80 FR 42366, July 16, 2015]



Sec.  92.105  Designation as a participating jurisdiction.

    When a jurisdiction has complied with the requirements of Sec. Sec.  
92.102 through 92.104 and HUD has approved the jurisdiction's 
consolidated plan in accordance with 24 CFR part 91, HUD will designate 
the jurisdiction as a participating jurisdiction.



Sec.  92.106  Continuous designation as a participating jurisdiction.

    Once a State or unit of general local government is designated a 
participating jurisdiction, it remains a participating jurisdiction for 
subsequent fiscal years and the requirements of Sec. Sec.  92.102 
through 92.105 do not apply, unless HUD revokes the designation in 
accordance with Sec.  92.107.



Sec.  92.107  Revocation of designation as a participating jurisdiction.

    HUD may revoke a jurisdiction's designation as a participating 
jurisdiction if:
    (a) HUD finds, after reasonable notice and opportunity for hearing 
as provided in Sec.  92.552(b) that the jurisdiction is unwilling or 
unable to carry out the provisions of this part, including failure to 
meet matching contribution requirements; or
    (b) The jurisdiction's formula allocation falls below $750,000 (or 
below $500,000 in fiscal years in which Congress appropriates less than 
$1.5 billion for this part) for three consecutive years, below $625,000 
(or below $410,000 in fiscal years in which Congress appropriates less 
than $1.5 billion for this part) for two consecutive years, or the 
jurisdiction does not receive a formula allocation in any one year.
    (c) When HUD revokes a participating jurisdiction's designation as a 
participating jurisdiction, HUD will reallocate any remaining funds in 
the jurisdiction's HOME Investment Trust Fund established under Sec.  
92.500 in accordance with Sec.  92.451.



                    Subpart D_Submission Requirements



Sec.  92.150  Submission requirements.

    In order to receive its HOME allocation, a participating 
jurisdiction must submit a consolidated plan in accordance with 24 CFR 
part 91. That part includes requirements for the content of the 
consolidated plan, the process of developing the consolidated plan, 
including citizen participation, the submission date, HUD approval, and 
amendments.

[[Page 546]]



                     Subpart E_Program Requirements



Sec.  92.200  Private-public partnership.

    Each participating jurisdiction must make all reasonable efforts to 
maximize participation by the private sector in accordance with section 
221 of the Act.



Sec.  92.201  Distribution of assistance.

    (a) Local. (1) Each local participating jurisdiction must, insofar 
as is feasible, distribute HOME funds geographically within its 
boundaries and among different categories of housing need, according to 
the priorities of housing need identified in its approved consolidated 
plan.
    (2) The participating jurisdiction may only invest its HOME funds in 
eligible projects within its boundaries, or in jointly funded projects 
within the boundaries of contiguous local jurisdictions which serve 
residents from both jurisdictions. For a project to be jointly funded, 
both jurisdictions must make a financial contribution to the project. A 
jurisdiction's financial contribution may take the form of a grant or 
loan (including a loan of funds that comes from other federal sources 
and that are in the jurisdiction's control, such as CDBG program funds) 
or relief of a significant tax or fee (such as waiver of impact fees, 
property taxes, or other taxes or fees customarily imposed on projects 
within the jurisdiction).
    (b) State. (1) Each State participating jurisdiction is responsible 
for distributing HOME funds throughout the State according to the 
State's assessment of the geographical distribution of the housing needs 
within the State, as identified in the State's approved consolidated 
plan. The State must distribute HOME funds to rural areas in amounts 
that take into account the non-metropolitan share of the State's total 
population and objective measures of rural housing need, such as poverty 
and substandard housing, as set forth in the State's approved 
consolidated plan. To the extent the need is within the boundaries of a 
participating unit of general local government, the State and the unit 
of general local government shall coordinate activities to address that 
need.
    (2) A State may carry out its own HOME program without active 
participation of units of general local government or may distribute 
HOME funds to units of general local government to carry out HOME 
programs in which both the State and all or some of the units of general 
local government perform specified program functions. A unit of general 
local government designated by a State to receive HOME funds from a 
State is a State recipient.
    (3)(i) A State that uses State recipients to perform program 
functions shall ensure that the State recipients use HOME funds in 
accordance with the requirements of this part and other applicable laws. 
The State may require the State recipient to comply with requirements 
established by the State or may permit the State recipient to establish 
its own requirements to comply with this part.
    (ii) The State shall conduct such reviews and audit of its State 
recipients as may be necessary or appropriate to determine whether the 
State recipient has committed and expended the HOME funds in the United 
States Treasury account as required by Sec.  92.500, and has met the 
requirements of this part, particularly eligible activities, income 
targeting, affordability, and matching contribution requirements.
    (4) A State and local participating jurisdiction may jointly fund a 
project within the boundaries of the local participating jurisdiction. 
The State may provide the HOME funds to the project or it may provide 
the HOME funds to the local participating jurisdiction to fund the 
project.
    (5) A State may fund projects on Indian reservations located within 
the State provided that the State includes Indian reservations in its 
consolidated plan.

[61 FR 48750, Sept. 16, 1996, as amended at 78 FR 44666, July 24, 2013]



Sec.  92.202  Site and neighborhood standards.

    (a) General. A participating jurisdiction must administer its HOME 
program in a manner that provides housing that is suitable from the 
standpoint of facilitating and furthering full

[[Page 547]]

compliance with the applicable provisions of title VI of the Civil 
Rights Act of 1964 (42 U.S.C. 2000d--2000d-4), the Fair Housing Act (42 
U.S.C. 3601 et seq., E.O. 11063 (3 CFR, 1959-1963 Comp., p. 652), and 
HUD regulations issued pursuant thereto; and promotes greater choice of 
housing opportunities.
    (b) New rental housing. In carrying out the site and neighborhood 
requirements with respect to new construction of rental housing, a 
participating jurisdiction is responsible for making the determination 
that proposed sites for new construction meet the requirements in 24 CFR 
983.57(e)(2) and (3).

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28928, May 28, 1997; 
78 FR 44666, July 24, 2013]



Sec.  92.203  Income determinations.

    (a) The HOME program has income targeting requirements for the HOME 
program and for HOME projects. Therefore, the participating jurisdiction 
must determine each family is income eligible by determining the 
family's annual income.
    (1) For families who are tenants in HOME-assisted housing and not 
receiving HOME tenant-based rental assistance, the participating 
jurisdiction must initially determine annual income using the method in 
paragraph (a)(1)(i) of this section. For subsequent income 
determinations during the period of affordability, the participating 
jurisdiction may use any one of the following methods in accordance with 
Sec.  92.252(h):
    (i) Examine at least 2 months of source documents evidencing annual 
income (e.g., wage statement, interest statement, unemployment 
compensation statement) for the family.
    (ii) Obtain from the family a written statement of the amount of the 
family's annual income and family size, along with a certification that 
the information is complete and accurate. The certification must state 
that the family will provide source documents upon request.
    (iii) Obtain a written statement from the administrator of a 
government program under which the family receives benefits and which 
examines each year the annual income of the family. The statement must 
indicate the tenant's family size and state the amount of the family's 
annual income; or alternatively, the statement must indicate the current 
dollar limit for very low- or low-income families for the family size of 
the tenant and state that the tenant's annual income does not exceed 
this limit.
    (2) For all other families (i.e., homeowners receiving 
rehabilitation assistance, homebuyers, and recipients of HOME tenant-
based rental assistance), the participating jurisdiction must determine 
annual income by examining at least 2 months of source documents 
evidencing annual income (e.g., wage statement, interest statement, 
unemployment compensation statement) for the family.
    (b) When determining whether a family is income eligible, the 
participating jurisdiction must use one of the following two definitions 
of ``annual income'':
    (1) Annual income as defined at 24 CFR 5.609 (except when 
determining the income of a homeowner for an owner-occupied 
rehabilitation project, the value of the homeowner's principal residence 
may be excluded from the calculation of Net Family Assets, as defined in 
24 CFR 5.603); or
    (2) Adjusted gross income as defined for purposes of reporting under 
Internal Revenue Service Form 1040 series for individual Federal annual 
income tax purposes.
    (c) Although the participating jurisdiction may use either of the 
definitions of ``annual income'' permitted in paragraph (b) of this 
section to calculate adjusted income, it must apply exclusions from 
income established at 24 CFR 5.611. The HOME rents for very low-income 
families established under Sec.  92.252(b)(2) are based on adjusted 
income. In addition, the participating jurisdiction may base the amount 
of tenant-based rental assistance on the adjusted income of the family. 
The participating jurisdiction may use only one definition for each 
HOME-assisted program (e.g., downpayment assistance program) that it 
administers and for each rental housing project.
    (d)(1) The participating jurisdiction must calculate the annual 
income of the family by projecting the prevailing rate of income of the 
family at the

[[Page 548]]

time the participating jurisdiction determines that the family is income 
eligible. Annual income shall include income from all persons in the 
household. Income or asset enhancement derived from the HOME-assisted 
project shall not be considered in calculating annual income.
    (2) The participating jurisdiction is not required to re-examine the 
family's income at the time the HOME assistance is provided, unless more 
than six months has elapsed since the participating jurisdiction 
determined that the family qualified as income eligible.
    (3) The participating jurisdiction must follow the requirements in 
Sec.  5.617 when making subsequent income determinations of persons with 
disabilities who are tenants in HOME-assisted rental housing or who 
receive tenant-based rental assistance.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28928, May 28, 1997; 
66 FR 6224, Jan. 19, 2001; 78 FR 44666, July 24, 2013]



Sec.  92.204  Applicability of requirements to entities that receive a
reallocation of HOME funds, other than participating jurisdictions.

    (a) Jurisdictions other than participating jurisdictions and 
community housing development organizations receiving competitive 
reallocations from HUD are subject to the same requirements in subpart E 
(Program Requirements), subpart F (Project Requirements), subpart K 
(Program Administration), and subpart L (Performance Reviews and 
Sanctions) of this part as participating jurisdictions, except for the 
following:
    (1) Subpart E (Program Requirements): the matching contribution 
requirements in Sec.  92.218 through Sec.  92.221 do not apply.
    (2) Subpart K (Program Administration):
    (i) Section 92.500 (The HOME Investment Trust Fund) does not apply. 
HUD will establish a HOME account in the United States Treasury and the 
HOME funds must be used for approved activities. A local account must be 
established for program income. HUD will recapture HOME funds in the 
HOME Treasury account by the amount of:
    (A) Any funds that are not committed within 24 months after the last 
day of the month in which HUD notifies the entity of HUD's execution of 
the HOME Investment Partnership Agreement;
    (B) Any funds that are not expended within five years after the last 
day of the month in which HUD notifies the entity of HUD's execution of 
the HOME Investment Partnership Agreement; and
    (C) Any penalties assessed by HUD under Sec.  92.552.
    (ii) Section 92.502 (Program disbursement and information system) 
applies, except that references to the HOME Investment Trust Fund mean 
HOME account and the reference to 24 CFR part 58 does not apply. In 
addition, Sec.  92.502(c) does not apply, and instead, compliance with 
Treasury Circular No. 1075 (31 CFR part 205) and 2 CFR 200.305 is 
required.
    (iii) Section 92.503 (Program income, repayments, and recaptured 
funds) applies, except that program income may be retained provided the 
funds are used for eligible activities in accordance with the 
requirements of this section.
    (3) Section 92.504 (Participating jurisdiction responsibilities; 
written agreements; on-site inspections) applies, except that the 
written agreement must ensure compliance with the requirements in this 
section.
    (4) Section 92.508 (Recordkeeping) applies with respect to the 
records that relate to the requirements of this section.
    (5) Section 92.509 (Performance reports) applies, except that a 
performance report is required only after completion of the approved 
projects.
    (b) The requirements in subpart H (Other Federal Requirements) of 
this part apply as written, except that jurisdictions and community 
housing development organizations receiving reallocations from HUD must 
comply with affirmative marketing requirements, labor requirements, and 
lead-based paint requirements, applicable to participating 
jurisdictions.
    (c) Subpart B (Allocation Formula), subpart C (Consortia; 
Designation and Revocation of Designation as a Participating 
Jurisdiction), and subpart G (Community Housing Development 
Organizations) of this part do not apply.

[[Page 549]]

    (d) Subpart A (General) applies, except that for the definitions of 
commitment, program income, and subrecipient, ``participating 
jurisdiction'' means jurisdiction or community housing development 
organization receiving the competitive reallocation.

[69 FR 15673, Mar. 26, 2004, as amended at 80 FR 75935, Dec. 7, 2015]

                   Eligible and Prohibited Activities



Sec.  92.205  Eligible activities: General.

    (a) Eligible activities. (1) HOME funds may be used by a 
participating jurisdiction to provide incentives to develop and support 
affordable rental housing and homeownership affordability through the 
acquisition (including assistance to homebuyers), new construction, 
reconstruction, or rehabilitation of nonluxury housing with suitable 
amenities, including real property acquisition, site improvements, 
conversion, demolition, and other expenses, including financing costs, 
relocation expenses of any displaced persons, families, businesses, or 
organizations; to provide tenant-based rental assistance, including 
security deposits; to provide payment of reasonable administrative and 
planning costs; and to provide for the payment of operating expenses of 
community housing development organizations. The housing must be 
permanent or transitional housing. The specific eligible costs for these 
activities are set forth in Sec. Sec.  92.206 through 92.209. The 
activities and costs are eligible only if the housing meets the property 
standards in Sec.  92.251 upon project completion.
    (2) Acquisition of vacant land or demolition must be undertaken only 
with respect to a particular housing project intended to provide 
affordable housing within the time frames established in paragraph (2) 
of the definition of ``commitment'' in Sec.  92.2.
    (3) Conversion of an existing structure to affordable housing is 
rehabilitation, unless the conversion entails adding one or more units 
beyond the existing walls, in which case, the project is new 
construction for purposes of this part.
    (4) Manufactured housing. HOME funds may be used to purchase and/or 
rehabilitate a manufactured housing unit, or purchase the land upon 
which a manufactured housing unit is located. Except for existing, 
owner-occupied manufactured housing that is rehabilitated with HOME 
funds, the manufactured housing unit must, at the time of project 
completion, be connected to permanent utility hook-ups and be located on 
land that is owned by the manufactured housing unit owner or land for 
which the manufactured housing owner has a lease for a period at least 
equal to the applicable period of affordability.
    (b) Forms of assistance. (1) A participating jurisdiction may invest 
HOME funds as equity investments, interest-bearing loans or advances, 
non-interest-bearing loans or advances, interest subsidies consistent 
with the purposes of this part, deferred payment loans, grants, or other 
forms of assistance that HUD determines to be consistent with the 
purposes of this part and specifically approves in writing. Each 
participating jurisdiction has the right to establish the terms of 
assistance, subject to the requirements of this part.
    (2) A participating jurisdiction may invest HOME funds to guarantee 
loans made by lenders and, if required, the participating jurisdiction 
may establish a loan guarantee account with HOME funds. The HOME funds 
may be used to guarantee the timely payment of principal and interest or 
payment of the outstanding principal and interest upon foreclosure of 
the loan. The amount of the loan guarantee account must be based on a 
reasonable estimate of the default rate on the guaranteed loans, but 
under no circumstances may the amount on deposit exceed 20 percent of 
the total outstanding principal amount guaranteed; except that the 
account may include a reasonable minimum balance. While loan funds 
guaranteed with HOME funds are subject to all HOME requirements, funds 
which are used to repay the guaranteed loans are not.
    (c) Minimum amount of assistance. The minimum amount of HOME funds 
that must be invested in a project involving rental housing or 
homeownership is $1,000 times the number of HOME-assisted units in the 
project.

[[Page 550]]

    (d) Multi-unit projects. HOME funds may be used to assist one or 
more housing units in a multi-unit project.
    (1) Only the actual HOME eligible development costs of the assisted 
units may be charged to the HOME program. If the assisted and 
nonassisted units are not comparable, the actual costs may be determined 
based on a method of cost allocation. If the assisted and non- assisted 
units are comparable in terms of size, features, and number of bedrooms, 
the actual cost of the HOME- assisted units can be determined by 
prorating the total HOME eligible development costs of the project so 
that the proportion of the total development costs charged to the HOME 
program does not exceed the proportion of the HOME-assisted units in the 
project.
    (2) After project completion, the number of units designated as 
HOME- assisted may be reduced only in accordance with Sec.  92.210, 
except that in a project consisting of all HOME- assisted units, one 
unit may be subsequently converted to an on-site manager's unit if the 
participating jurisdiction determines that the conversion will 
contribute to the stability or effectiveness of the housing and that, 
notwithstanding the loss of one HOME-assisted unit, the costs charged to 
the HOME program do not exceed the actual costs of the HOME- assisted 
units and do not exceed the subsidy limit in Sec.  92.250(b).
    (e) Terminated projects. A HOME assisted project that is terminated 
before completion, either voluntarily or involuntarily, constitutes an 
ineligible activity, and the participating jurisdiction must repay any 
HOME funds invested in the project to the participating jurisdiction's 
HOME Investment Trust Fund in accordance with Sec.  92.503(b) (except 
for project- specific assistance to community housing development 
organizations as provided in Sec.  92.301(a)(3) and (b)(3)).
    (1) A project that does not meet the requirements for affordable 
housing must be terminated and the participating jurisdiction must repay 
all HOME funds invested in the project to the participating 
jurisdiction's HOME Investment Trust Fund in accordance with Sec.  
92.503(b).
    (2) If a participating jurisdiction does not complete a project 
within 4 years of the date of commitment of funds, the project is 
considered to be terminated and the participating jurisdiction must 
repay all funds invested in the project to the participating 
jurisdiction's HOME Investment Trust Fund in accordance with Sec.  
92.503(b). The participating jurisdiction may request a one-year 
extension of this deadline in writing, by submitting information about 
the status of the project, steps being taken to overcome any obstacles 
to completion, proof of adequate funding to complete the project, and a 
schedule with milestones for completion of the project for HUD's review 
and approval.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28928, May 28, 1997; 
78 FR 44667, July 24, 2013]



Sec.  92.206  Eligible project costs.

    HOME funds may be used to pay the following eligible costs:
    (a) Development hard costs. The actual cost of constructing or 
rehabilitating housing. These costs include the following:
    (1) For new construction projects, costs to meet the new 
construction standards in Sec.  92.251;
    (2) For rehabilitation, costs to meet the property standards for 
rehabilitation projects in Sec.  92.251;
    (3) For both new construction and rehabilitation projects, costs:
    (i) To demolish existing structures;
    (ii) To make utility connections including off-site connections from 
the property line to the adjacent street; and
    (iii) To make improvements to the project site that are in keeping 
with improvements of surrounding, standard projects. Site improvements 
may include on-site roads and sewer and water lines necessary to the 
development of the project. The project site is the property, owned by 
the project owner, upon which the project is located.
    (4) For both new construction and rehabilitation of multifamily 
rental housing projects, costs to construct or rehabilitate laundry and 
community facilities that are located within the same building as the 
housing and

[[Page 551]]

which are for the use of the project residents and their guests.
    (5) Costs to make utility connections or to make improvements to the 
project site, in accordance with the provisions of Sec.  92.206(a)(3) 
(ii) and (iii) are also eligible in connection with acquisition of 
standard housing.
    (b) Refinancing costs. The cost to refinance existing debt secured 
by a housing project that is being rehabilitated with HOME funds. These 
costs include the following:
    (1) For single-family (one- to four- family) owner-occupied housing, 
when loaning HOME funds to rehabilitate the housing, if the refinancing 
is necessary to reduce the overall housing costs to the borrower and 
make the housing more affordable and if the rehabilitation cost is 
greater than the amount of debt that is refinanced.
    (2) For single family or multifamily projects, when loaning HOME 
funds to rehabilitate the units if refinancing is necessary to permit or 
continue affordability under Sec.  92.252. The participating 
jurisdiction must establish refinancing guidelines and state them in its 
consolidated plan described in 24 CFR part 91. Regardless of the amount 
of HOME funds invested, the minimum affordability period shall be 15 
years. The guidelines shall describe the conditions under which the 
participating jurisdictions will refinance existing debt. At minimum, 
the guidelines must:
    (i) Demonstrate that rehabilitation is the primary eligible activity 
and ensure that this requirement is met by establishing a minimum level 
of rehabilitation per unit or a required ratio between rehabilitation 
and refinancing;
    (ii) Require a review of management practices to demonstrate that 
disinvestment in the property has not occurred, that the long term needs 
of the project can be met and that the feasibility of serving the 
targeted population over an extended affordability period can be 
demonstrated;
    (iii) State whether the new investment is being made to maintain 
current affordable units, create additional affordable units, or both;
    (iv) Specify the required period of affordability, whether it is the 
minimum 15 years or longer;
    (v) Specify whether the investment of HOME funds may be 
jurisdiction-wide or limited to a specific geographic area, such as a 
neighborhood identified in a neighborhood revitalization strategy under 
24 CFR 91.215(e)(2) or a Federally designated Empowerment Zone or 
Enterprise Community; and
    (vi) State that HOME funds cannot be used to refinance single family 
or multifamily housing loans made or insured by any Federal program, 
including CDBG.
    (c) Acquisition costs. Costs of acquiring improved or unimproved 
real property, including acquisition by homebuyers.
    (d) Related soft costs. Other reasonable and necessary costs 
incurred by the owner or participating jurisdiction and associated with 
the financing, or development (or both) of new construction, 
rehabilitation or acquisition of housing assisted with HOME funds. These 
costs include, but are not limited to:
    (1) Architectural, engineering, or related professional services 
required to prepare plans, drawings, specifications, or work write-ups. 
The costs may be paid if they were incurred not more than 24 months 
before the date that HOME funds are committed to the project and the 
participating jurisdiction expressly permits HOME funds to be used to 
pay the costs in the written agreement committing the funds.
    (2) Costs to process and settle the financing for a project, such as 
private lender origination fees, credit reports, fees for title 
evidence, fees for recordation and filing of legal documents, building 
permits, attorneys fees, private appraisal fees and fees for an 
independent cost estimate, builders or developers fees.
    (3) Costs of a project audit, including certification of costs 
performed by a certified public accountant, that the participating 
jurisdiction may require with respect to the development of the project.
    (4) Costs to provide information services such as affirmative 
marketing and fair housing information to prospective homeowners and 
tenants as required by Sec.  92.351.
    (5) For new construction or rehabilitation, the cost of funding an 
initial

[[Page 552]]

operating deficit reserve, which is a reserve to meet any shortfall in 
project income during the period of project rent-up (not to exceed 18 
months) and which may only be used to pay project operating expenses, 
scheduled payments to a replacement reserve, and debt service. Any HOME 
funds placed in an operating deficit reserve that remain unexpended 
after the period of project rent-up may be retained for project reserves 
if permitted by the participating jurisdiction.
    (6) Staff and overhead costs of the participating jurisdiction 
directly related to carrying out the project, such as work 
specifications preparation, loan processing inspections, and other 
services related to assisting potential owners, tenants, and homebuyers, 
e.g., housing counseling, may be charged to project costs only if the 
project is funded and the individual becomes the owner or tenant of the 
HOME-assisted project. For multi-unit projects, such costs must be 
allocated among HOME- assisted units in a reasonable manner and 
documented. Although these costs may be charged as project costs, these 
costs (except housing counseling) cannot be charged to or paid by low-
income families.
    (7) For both new construction and rehabilitation, costs for the 
payment of impact fees that are charged for all projects within a 
jurisdiction.
    (8) Costs of environmental review and release of funds in accordance 
with 24 CFR part 58 which are directly related to the project.
    (e) Community housing development organization costs. Eligible costs 
of project-specific assistance are set forth in Sec.  92.301.
    (f) Relocation costs. The cost of relocation payments and other 
relocation assistance to persons displaced by the project are eligible 
costs.
    (1) Relocation payments include replacement housing payments, 
payments for moving expenses, and payments for reasonable out-of-pocket 
costs incurred in the temporary relocation of persons.
    (2) Other relocation assistance means staff and overhead costs 
directly related to providing advisory and other relocation services to 
persons displaced by the project, including timely written notices to 
occupants, referrals to comparable and suitable replacement property, 
property inspections, counseling, and other assistance necessary to 
minimize hardship.
    (g) Costs relating to payment of loans. If the HOME funds are not 
used to directly pay a cost specified in this section, but are used to 
pay off a construction loan, bridge financing loan, or guaranteed loan, 
the payment of principal and interest for such loan is an eligible cost 
only if:
    (1) The loan was used for eligible costs specified in this section, 
and
    (2) The HOME assistance is part of the original financing for the 
project and the project meets the requirements of this part.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28928, May 28, 1997; 
64 FR 50224, Sept. 15, 1999; 78 FR 44667, July 24, 2013]



Sec.  92.207  Eligible administrative and planning costs.

    A participating jurisdiction may expend, for payment of reasonable 
administrative and planning costs of the HOME program and ADDI, an 
amount of HOME funds that is not more than ten percent of the sum of the 
Fiscal Year HOME basic formula allocation plus any funds received in 
accordance with Sec.  92.102(b) to meet or exceed participation 
threshold requirements that Fiscal Year. A state that transfers any HOME 
funds in accordance with Sec.  92.102(b) must exclude these funds in 
calculating the amount it may expend for administrative and planning 
costs. A participating jurisdiction may also expend, for payment of 
reasonable administrative and planning costs of the HOME program and the 
ADDI described in subpart M of this part, a sum up to ten percent of the 
program income deposited into its local account or received and reported 
by its state recipients or subrecipients during the program year. A 
participating jurisdiction may expend such funds directly or may 
authorize its state recipients or subrecipients, if any, to expend all 
or a portion of such funds, provided total expenditures for planning and 
administrative costs do not exceed the maximum allowable amount. 
Reasonable administrative and planning costs include:

[[Page 553]]

    (a) General management, oversight and coordination. Reasonable costs 
of overall program management, coordination, monitoring, and evaluation. 
Such costs include, but are not limited to, necessary expenditures for 
the following:
    (1) Salaries, wages, and related costs of the participating 
jurisdiction's staff. In charging costs to this category the 
participating jurisdiction may either include the entire salary, wages, 
and related costs allocable to the program of each person whose primary 
responsibilities with regard to the program involves program 
administration assignments, or the prorated share of the salary, wages, 
and related costs of each person whose job includes any program 
administration assignments. The participating jurisdiction may use only 
one of these methods. Program administration includes the following 
types of assignments:
    (i) Developing systems and schedules for ensuring compliance with 
program requirements;
    (ii) Developing interagency agreements and agreements with entities 
receiving HOME funds;
    (iii) Monitoring HOME-assisted housing for progress and compliance 
with program requirements;
    (iv) Developing agreements and monitoring housing not assisted with 
HOME funds that the participating jurisdiction designates as a matching 
contribution in accordance with Sec.  92.219(b) for compliance with 
applicable program requirements;
    (v) Preparing reports and other documents related to the program for 
submission to HUD;
    (vi) Coordinating the resolution of audit and monitoring findings;
    (vii) Evaluating program results against stated objectives; and
    (viii) Managing or supervising persons whose primary 
responsibilities with regard to the program include such assignments as 
those described in paragraphs (a)(1)(i) through (vii) of this section;
    (2) Travel costs incurred for official business in carrying out the 
program;
    (3) Administrative services performed under third party contracts or 
agreements, including such services as general legal services, 
accounting services, and audit services;
    (4) Other costs for goods and services required for administration 
of the program, including such goods and services as rental or purchase 
of equipment, insurance, utilities, office supplies, and rental and 
maintenance (but not purchase) of office space; and
    (5) Costs of administering tenant-based rental assistance programs.
    (b) Staff and overhead. Staff and overhead costs of the 
participating jurisdiction directly related to carrying out the project, 
such as work specifications preparation, loan processing, inspections, 
lead-based paint evaluations (visual assessments, inspections, and risk 
assessments) and other services related to assisting potential owners, 
tenants, and homebuyers (e.g., housing counseling); and staff and 
overhead costs directly related to providing advisory and other 
relocation services to persons displaced by the project, including 
timely written notices to occupants, referrals to comparable and 
suitable replacement property, property inspections, counseling, and 
other assistance necessary to minimize hardship. These costs may be 
charged as administrative costs or as project costs under Sec.  
92.206(d)(6) and (f)(2), at the discretion of the participating 
jurisdiction; however, these costs (except housing counseling) cannot be 
charged to or paid by the low-income families.
    (c) Public information. The provision of information and other 
resources to residents and citizen organizations participating in the 
planning, implementation, or assessment of projects being assisted with 
HOME funds.
    (d) Fair housing. Activities to affirmatively further fair housing 
in accordance with the participating jurisdiction's certification under 
24 CFR part 91.
    (e) Indirect Costs. Indirect costs may be charged to the HOME 
program under a cost allocation plan prepared in accordance with 2 CFR 
part 200, subpart E.
    (f) Preparation of the consolidated plan. Preparation of the 
consolidated plan required under 24 CFR part 91. Preparation includes 
the costs of public hearings, consultations, and publication.

[[Page 554]]

    (g) Other Federal requirements. Costs of complying with the Federal 
requirements in subpart H of this part. Project-specific environmental 
review costs may be charged as administrative costs or as project costs 
in accordance with Sec.  92.206(d)(8), at the discretion of the 
participating jurisdiction.
    (h) Preserving affordable housing already assisted with HOME funds. 
Costs specified under Sec.  92.254(a)(9) may be charged as an 
administrative cost or may be charged to the project as provided in 
Sec.  92.254(a)(9). In addition, the foreclosure cost of a HOME-assisted 
rental housing project with a HOME loan in default is an eligible 
administrative cost.

[61 FR 48750, Sept. 16, 1996, as amended at 67 FR 61756, Oct. 1, 2002; 
69 FR 16766, Mar. 30, 2004; 72 FR 16685, Apr. 4, 2007; 78 FR 44668, July 
24, 2013; 80 FR 75935, Dec. 7, 2015]



Sec.  92.208  Eligible community housing development organization (CHDO)
operating expense and capacity building costs.

    (a) Up to 5 percent of a participating jurisdiction's fiscal year 
HOME allocation may be used for the operating expenses of community 
housing development organizations (CHDOs). This amount is in addition to 
amounts set aside for housing projects that are owned, developed, or 
sponsored by CHDOs as described in Sec.  92.300(a). These funds may not 
be used to pay operating expenses incurred by a CHDO acting as a 
subrecipient or contractor under the HOME Program. Operating expenses 
means reasonable and necessary costs for the operation of the community 
housing development organization. Such costs include salaries, wages, 
and other employee compensation and benefits; employee education, 
training, and travel; rent; utilities; communication costs; taxes; 
insurance; equipment; materials; and supplies. The requirements and 
limitations on the receipt of these funds by CHDOs are set forth in 
Sec.  92.300(e) and (f).
    (b) HOME funds may be used for capacity building costs under Sec.  
92.300(b).

[61 FR 48750, Sept. 16, 1996, as amended at 78 FR 44668, July 24, 2013]



Sec.  92.209  Tenant-based rental assistance: Eligible costs and
requirements.

    (a) Eligible costs. Eligible costs are the rental assistance and 
security deposit payments made to provide tenant-based rental assistance 
for a family pursuant to this section. Eligible costs also include 
utility deposit assistance, but only if this assistance is provided with 
tenant-based rental assistance or security deposit payment. 
Administration of tenant-based rental assistance is eligible only under 
general management oversight and coordination at Sec.  92.207(a), except 
that the costs of inspecting the housing and determining the income 
eligibility of the family are eligible as costs of the tenant-based 
rental assistance.
    (b) General requirement. A participating jurisdiction may use HOME 
funds for tenant-based rental assistance only if the participating 
jurisdiction makes the certification about inclusion of this type of 
assistance in its consolidated plan in accordance with 24 CFR 
91.225(d)(1), 91.325(d)(1), or 91.425(a)(2)(i), and specifies local 
market conditions that lead to the choice of this option.
    (c) Tenant selection. The participating jurisdiction must select 
low-income families in accordance with written tenant selection policies 
and criteria that are based on local housing needs and priorities 
established in the participating jurisdiction's consolidated plan.
    (1) Low-income families. Tenant-based rental assistance may only be 
provided to very low- and low-income families. The participating 
jurisdiction must determine that the family is very low- or low-income 
before the assistance is provided. During the period of assistance, the 
participating jurisdiction must annually determine that the family 
continues to be low-income.
    (2) Targeted assistance. (i) The participating jurisdiction may 
establish a preference for individuals with special needs (e.g., 
homeless persons or elderly persons) or persons with disabilities. The 
participating jurisdiction may offer, in conjunction with a tenant-based 
rental assistance program, particular types of nonmandatory services

[[Page 555]]

that may be most appropriate for persons with a special need or a 
particular disability. Generally, tenant-based rental assistance and the 
related services should be made available to all persons with special 
needs or disabilities who can benefit from such services. Participation 
may be limited to persons with a specific disability if necessary to 
provide as effective housing, aid, benefit, or services as those 
provided to others in accordance with 24 CFR 8.4(b)(1)(iv).
    (ii) The participating jurisdiction may also provide a preference 
for a specific category of individuals with disabilities (e.g., persons 
with HIV/AIDS or chronic mental illness) if the specific category is 
identified in the participating jurisdiction's consolidated plan as 
having unmet need and the preference is needed to narrow the gap in 
benefits and services received by such persons.
    (iii) Self-sufficiency program. The participating jurisdiction may 
require the family to participate in a self- sufficiency program as a 
condition of selection for assistance. The family's failure to continue 
participation in the self-sufficiency program is not a basis for 
terminating the assistance; however, renewal of the assistance may be 
conditioned on participation in the program. Tenants living in a HOME- 
assisted rental project who receive tenant-based rental assistance as 
relocation assistance must not be required to participate in a self- 
sufficiency program as a condition of receiving assistance.
    (iv) Homebuyer program. HOME tenant-based rental assistance may 
assist a tenant who has been identified as a potential low-income 
homebuyer through a lease-purchase agreement, with monthly rental 
payments for a period up to 36 months (i.e., 24 months, with a 12-month 
renewal in accordance with paragraph (e) of this section). The HOME 
tenant-based rental assistance payment may not be used to accumulate a 
downpayment or closing costs for the purchase; however, all or a portion 
of the homebuyer-tenant's monthly contribution toward rent may be set 
aside for this purpose. If a participating jurisdiction determines that 
the tenant has met the lease-purchase criteria and is ready to assume 
ownership, HOME funds may be provided for downpayment assistance in 
accordance with the requirements of this part.
    (v) Preferences cannot be administered in a manner that limits the 
opportunities of persons on any basis prohibited by the laws listed 
under 24 CFR 5.105(a). For example, a participating jurisdiction may not 
determine that persons given a preference under the program are 
therefore prohibited from applying for or participating in other 
programs or forms of assistance. Persons who are eligible for a 
preference must have the opportunity to participate in all programs of 
the participating jurisdiction, including programs that are not separate 
or different.
    (3) Existing tenants in the HOME-assisted projects. A participating 
jurisdiction may select low-income families currently residing in 
housing units that are designated for rehabilitation or acquisition 
under the participating jurisdiction's HOME program. Participating 
jurisdictions using HOME funds for tenant-based rental assistance 
programs may establish local preferences for the provision of this 
assistance. Families so selected may use the tenant-based assistance in 
the rehabilitated or acquired housing unit or in other qualified 
housing.
    (d) Portability of assistance. A participating jurisdiction may 
require the family to use the tenant-based assistance within the 
participating jurisdiction's boundaries or may permit the family to use 
the assistance outside its boundaries.
    (e) Term of rental assistance contract. The term of the rental 
assistance contract providing assistance with HOME funds may not exceed 
24 months, but may be renewed, subject to the availability of HOME 
funds. The term of the rental assistance contract must begin on the 
first day of the term of the lease. For a rental assistance contract 
between a participating jurisdiction and an owner, the term of the 
contract must terminate on termination of the lease. For a rental 
assistance contract between a participating jurisdiction and a family, 
the term of the contract need not end on termination of the lease, but 
no payments may be made after termination of the lease until a family 
enters into a new lease.

[[Page 556]]

    (f) Rent reasonableness. The participating jurisdiction must 
disapprove a lease if the rent is not reasonable, based on rents that 
are charged for comparable unassisted rental units.
    (g) Tenant protections. The tenant must have a lease that complies 
with the requirements in Sec.  92.253 (a) and (b).
    (h) Maximum subsidy. (1) The amount of the monthly assistance that a 
participating jurisdiction may pay to, or on behalf of, a family may not 
exceed the difference between a rent standard for the unit size 
established by the participating jurisdiction and 30 percent of the 
family's monthly adjusted income.
    (2) The participating jurisdiction must establish a minimum tenant 
contribution to rent.
    (3) The participating jurisdiction's rent standard for a unit size 
must be based on:
    (i) Local market conditions; or
    (ii) The Section 8 Housing Choice Voucher Program (24 CFR part 982).
    (i) Housing quality standards. Housing occupied by a family 
receiving tenant-based assistance under this section must meet the 
requirements set forth in 24 CFR 982.401. The participating jurisdiction 
must inspect the housing initially and re-inspect it annually.
    (j) Security deposits. (1) A participating jurisdiction may use HOME 
funds provided for tenant-based rental assistance to provide loans or 
grants to very low- and low-income families for security deposits for 
rental of dwelling units whether or not the participating jurisdiction 
provides any other tenant-based rental assistance under this section.
    (2) The relevant State or local definition of ``security deposit'' 
in the jurisdiction where the unit is located is applicable for the 
purposes of this part, except that the amount of HOME funds that may be 
provided for a security deposit may not exceed the equivalent of two 
month's rent for the unit.
    (3) Only the prospective tenant may apply for HOME security deposit 
assistance, although the participating jurisdiction may pay the funds 
directly to the tenant or to the landlord.
    (4) HOME funds for security deposits may be provided as a grant or 
as a loan. If they are provided as a loan, the loan repayments are 
program income to be used in accordance with Sec.  92.503.
    (5) Paragraphs (b), (c), (d), (f), (g), and (i) of this section are 
applicable to HOME security deposit assistance, except that income 
determinations pursuant to paragraph (c)(1) of this section and Housing 
Quality Standard inspections pursuant to paragraph (i) of this section 
are required only at the time the security deposit assistance is 
provided.
    (k) Program operation. A tenant-based rental assistance program must 
be operated consistent with the requirements of this section. The 
participating jurisdiction may operate the program itself, or may 
contract with a PHA or other entity with the capacity to operate a 
rental assistance program. The tenant-based rental assistance may be 
provided through an assistance contract to an owner that leases a unit 
to an assisted family or directly to the family. In either case, the 
participating jurisdiction (or entity operating the program) must 
approve the lease.
    (l) Use of Section 8 assistance. In any case where assistance under 
section 8 of the 1937 Act becomes available, recipients of tenant-based 
rental assistance under this part will qualify for tenant selection 
preferences to the same extent as when they received the HOME tenant-
based rental assistance under this part.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28928, May 28, 1997; 
67 FR 61756, Oct. 1, 2002; 78 FR 44668, July 24, 2013]



Sec.  92.210  Troubled HOME-assisted rental housing projects.

    (a) The provisions of this section apply only to an existing HOME- 
assisted rental project that, within the HOME period of affordability, 
is no longer financially viable. For purposes of this section, a HOME 
assisted rental project is no longer financially viable if its operating 
costs significantly exceed its operating revenue. HUD may approve one or 
both of the actions described in paragraphs (b) and (c) of this section 
to strategically preserve a rental project after consideration of market 
needs, available resources, and the likelihood of long-term viability of 
the project.

[[Page 557]]

    (b) Notwithstanding Sec.  92.214, a participating jurisdiction may 
request and HUD may permit, pursuant to a written memorandum of 
agreement, a participating jurisdiction to invest additional HOME funds 
in the existing HOME-assisted rental project. The total HOME funding for 
the project (original investment plus additional investment) must not 
exceed the per-unit subsidy limit in Sec.  92.250(a). The use of HOME 
funds may include, but is not limited to, rehabilitation of the HOME 
units and recapitalization of project reserves for the HOME units (to 
fund capital costs). If additional HOME funds are invested, HUD may 
require the period of affordability to be extended, based on such 
considerations as the amount of additional HOME funds or additional 
units.
    (c) HUD Headquarters may, through written approval, permit the 
participating jurisdiction to reduce the number of HOME-assisted units, 
if the project contains more than the minimum number of units required 
to be designated as HOME-assisted under Sec.  92.205(d). In determining 
whether to permit a reduction in the number of HOME-assisted units, HUD 
will take into account the required period of affordability and the 
amount of HOME assistance provided to the project.

[78 FR 44669, July 24, 2013]



Sec.  92.212  Pre-award costs.

    (a) General. Before the effective date of the HOME Investment 
Partnership Agreement, the participating jurisdiction may incur costs 
which may be charged to the HOME allocation after the award of the HOME 
allocation, provided the costs are in compliance with the requirements 
of this part (including environmental review requirements) and with the 
statutory and regulatory requirements in effect at the time the costs 
are charged to the HOME allocation.
    (b) Administrative and planning costs. Eligible administrative and 
planning costs may be incurred as of the beginning of the participating 
jurisdiction's consolidated program year (see 24 CFR 91.10) or the date 
the consolidated plan describing the HOME allocation to which the costs 
will be charged is received by HUD, whichever is later.
    (c) Project costs. Eligible project costs may be incurred during the 
current program year in an amount not to exceed 25% of the current HOME 
allocation amount, to be charged to the following year's HOME 
allocation. Before incurring the pre-award costs, the participating 
jurisdiction must comply with its citizen participation plan 
requirements addressing 24 CFR 91.105(b)(2), (4), (5) and (g) (local 
governments) or 24 CFR 91.115(b)(2), (4), (5) and (f) (States). In lieu 
of a full action plan, the participating jurisdiction may develop a 
mini-action plan which describes the proposed pre-award projects and 
costs in accordance with 24 CFR 91.220(c) and includes, if applicable, 
24 CFR 91.220(g)(2) (local governments) or 24 CFR 91.320(c) and, if 
applicable, 24 CFR 91.320(g)(2) (States). The mini-action plan must 
state that HOME funding for the project(s) is subject to the future 
availability of HOME funds. The subsequent action plan (i.e., action 
plan for the HOME allocation to which the costs will be charged) must 
also include the use of HOME funds contained in the mini-action plan.
    (d) Subrecipient or State recipient costs. The participating 
jurisdiction may authorize its subrecipient or State recipient to incur 
pre-award costs in accordance with the requirements of this section. The 
authorization must be in writing.
    (e) Other pre-agreement costs. Pre-agreement costs in excess of the 
amount set forth in paragraph (c) of this section must be approved, in 
writing, by the HUD Field Office before the costs are incurred.



Sec.  92.213  HOME Funds and Public Housing.

    (a) General rule. HOME funds may not be used for public housing 
units. HOME-assisted housing units may not receive Operating Fund or 
Capital Fund assistance under section 9 of the 1937 Act during the HOME 
period of affordability.
    (b) Exception. HOME funds may be used for the development of public 
housing units, if the units are developed under section 24 of the 1937 
Act (HOPE VI) and no Capital Fund assistance under section 9(d) of the 
Act is used for the development of the unit.

[[Page 558]]

Units developed with both HOME and HOPE VI may receive operating 
assistance under section 9 of the 1937 Act. Units developed with HOME 
and HOPE VI funds under this paragraph may subsequently receive Capital 
Funds for rehabilitation or modernization.
    (c) Using HOME funds in public housing projects. Consistent with 
Sec.  92.205(d), HOME funds may be used for affordable housing units in 
a project that also contains public housing units, provided that the 
HOME funds are not used for the public housing units (except as provided 
in paragraph (b) of this section) and HOME funds are used only for 
eligible costs in accordance with this part.
    (d) The HOME funds must be used in accordance with the requirements 
of this part and the project must meet the requirements of this part, 
including rent requirements in Sec.  92.252.

[78 FR 44669, July 24, 2013]



Sec.  92.214  Prohibited activities and fees.

    (a) HOME funds may not be used to:
    (1) Provide project reserve accounts, except as provided in Sec.  
92.206(d)(5), or operating subsidies;
    (2) Provide tenant-based rental assistance for the special purposes 
of the existing section 8 program, in accordance with section 212(d) of 
the Act;
    (3) Provide non-federal matching contributions required under any 
other Federal program;
    (4) Provide assistance for uses authorized under section 9 of the 
1937 Act (Public Housing Capital and Operating Funds);
    (5) Provide assistance to eligible low-income housing under 24 CFR 
part 248 (Prepayment of Low Income Housing Mortgages), except that 
assistance may be provided to priority purchasers as defined in 24 CFR 
248.101;
    (6) Provide assistance (other than tenant-based rental assistance, 
assistance to a homebuyer to acquire housing previously assisted with 
HOME funds, or assistance to preserve affordability of homeownership 
housing in accordance with Sec.  92.254(a)(9)) to a project previously 
assisted with HOME funds during the period of affordability established 
by the particular jurisdiction in the written agreement under Sec.  
92.504. However, additional HOME funds may be committed to a project for 
up to one year after project completion (see Sec.  92.502), but the 
amount of HOME funds in the project may not exceed the maximum per-unit 
subsidy amount established under Sec.  92.250.
    (7) Pay for the acquisition of property owned by the participating 
jurisdiction, except for property acquired by the participating 
jurisdiction with HOME funds, or property acquired in anticipation of 
carrying out a HOME project; or
    (8) Pay delinquent taxes, fees or charges on properties to be 
assisted with HOME funds.
    (9) Pay for any cost that is not eligible under Sec. Sec.  92.206 
through 92.209.
    (b)(1) Participating jurisdictions may not charge (and must prohibit 
State recipients, subrecipients, and community housing development 
organizations from charging) servicing, origination, or other fees for 
the purpose of covering costs of administering the HOME program (e.g., 
fees on low-income families for construction management or for 
inspections for compliance with property standards) (see Sec.  
92.206(d)(6) and Sec.  92.207), except that:
    (i) Participating jurisdictions and State recipients may charge 
owners of rental projects reasonable annual fees for compliance 
monitoring during the period of affordability. The fees must be based 
upon the average actual cost of performing the monitoring of HOME-
assisted rental projects. The basis for determining the amount of for 
the fee amount must be documented and the fee must be included in the 
costs of the project as part of the project underwriting;
    (ii) Participating jurisdictions, subrecipients and State recipients 
may charge nominal application fees (although these fees are not an 
eligible HOME cost) to project owners to discourage frivolous 
applications. The amount of application fees must be appropriate to the 
type of application and may not create an undue impediment to a low-
income family's, subrecipient's, State recipient's, or other entity's 
participation in the participating jurisdiction's program; and
    (iii) Participating jurisdictions, subrecipients and State 
recipients may

[[Page 559]]

charge homebuyers a fee for housing counseling.
    (2) All fees charged under paragraph (b)(1) of this section are 
applicable credits under 2 CFR 200.406.
    (3) The participating jurisdiction must prohibit project owners from 
charging fees that are not customarily charged in rental housing (e.g., 
laundry room access fees), except that rental project owners may charge:
    (i) Reasonable application fees to prospective tenants;
    (ii) Parking fees to tenants only if such fees are customary for 
rental housing projects in the neighborhood; and
    (iii) Fees for services such as bus transportation or meals, as long 
as the services are voluntary and fees are charged for services 
provided.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28929, May 28, 1997; 
67 FR 61756, Oct. 1, 2002; 72 FR 16685, Apr. 4, 2007; 78 FR 44669, July 
24, 2013; 80 FR 75935, Dec. 7, 2015]



Sec.  92.215  Limitation on jurisdictions under court order.

    Limitations on the use of HOME funds in connection with litigation 
involving discrimination or fair housing are set forth in section 224 of 
the Act.

                            Income Targeting



Sec.  92.216  Income targeting: Tenant-based rental assistance and
rental units.

    Each participating jurisdiction must invest HOME funds made 
available during a fiscal year so that, with respect to tenant-based 
rental assistance and rental units:
    (a) Not less than 90 percent of:
    (1) The families receiving such rental assistance are families whose 
annual incomes do not exceed 60 percent of the median family income for 
the area, as determined and made available by HUD with adjustments for 
smaller and larger families (except that HUD may establish income 
ceilings higher or lower than 60 percent of the median for the area on 
the basis of HUD's findings that such variations are necessary because 
of prevailing levels of construction cost or fair market rent, or 
unusually high or low family income) at the time of occupancy or at the 
time funds are invested, whichever is later; or
    (2) The dwelling units assisted with such funds are occupied by 
families having such incomes; and
    (b) The remainder of:
    (1) The families receiving such rental assistance are households 
that qualify as low-income families (other than families described in 
paragraph (a)(1) of this section) at the time of occupancy or at the 
time funds are invested, whichever is later; or
    (2) The dwelling units assisted with such funds are occupied by such 
households.



Sec.  92.217  Income targeting: Homeownership.

    Each participating jurisdiction must invest HOME funds made 
available during a fiscal year so that with respect to homeownership 
assistance, 100 percent of these funds are invested in dwelling units 
that are occupied by households that qualify as low-income families.

[67 FR 61756, Oct. 1, 2002]

                    Matching Contribution Requirement



Sec.  92.218  Amount of matching contribution.

    (a) General. Each participating jurisdiction must make contributions 
to housing that qualifies as affordable housing under the HOME program, 
throughout a fiscal year. The contributions must total not less than 25 
percent of the funds drawn from the jurisdiction's HOME Investment Trust 
Fund Treasury account in that fiscal year, excluding funds drawn for 
purposes identified in paragraph (c) of this section.
    (b) Shortfall amount from State or local resources. Amounts made 
available under Sec.  92.102(b)(2) from the resources of a State (other 
than a transfer of the State's formula allocation), the local 
participating jurisdiction, or both, to enable the local participating 
jurisdiction to meet the participation threshold amount are not required 
to be matched and do not constitute matching contributions.
    (c) HOME funds not required to be matched. HOME funds used for 
administrative and planning costs (pursuant to

[[Page 560]]

Sec.  92.207); community housing development organization operating 
expenses (pursuant to Sec.  92.208); capacity building (pursuant to 
Sec.  92.300(b)) of community housing development organizations; and 
project specific assistance to community housing development 
organizations (pursuant to Sec.  92.301) when the participating 
jurisdiction waives repayment under the provisions of Sec.  92.301(a)(3) 
or Sec.  92.301(b)(3) are not required to be matched.
    (d) Match contribution for other programs. Contributions that have 
been or will be counted as satisfying a matching requirement of another 
Federal grant or award may not count as satisfying the matching 
contribution requirement for the HOME program.



Sec.  92.219  Recognition of matching contribution.

    (a) Match contribution to HOME-assisted housing. A contribution is 
recognized as a matching contribution if it is made with respect to:
    (1) A tenant who is assisted with HOME funds;
    (2) A HOME-assisted unit;
    (3) The portion of a project that is not HOME-assisted provided that 
at least 50 percent of the housing units in the project are HOME-
assisted. If the match contribution to the portion of the project that 
is not HOME-assisted meets the affordable housing requirements of Sec.  
92.219(b)(2), the percentage requirement for HOME-assisted units does 
not apply; or
    (4) The commercial space in a mixed-use project in which at least 51 
percent of the floor space is residential provided that at least 50 
percent of the dwelling units are HOME-assisted.
    (b) Match contribution to affordable housing that is not HOME-
assisted. The following requirements apply for recognition of matching 
contributions made to affordable housing that is not HOME-assisted:
    (1) For tenant-based rental assistance that is not HOME-assisted:
    (i) The contribution must be made with respect to a tenant who is 
assisted with tenant-based rental assistance that meets the requirements 
of Sec.  92.203 (Income determinations) and paragraphs (a), (c), (f), 
and (i) of Sec.  92.209 (Tenant-based rental assistance); and
    (ii) The participating jurisdiction must demonstrate in writing that 
such assistance meets the provisions of Sec. Sec.  92.203 and 92.209 
(except Sec.  92.209(e)).
    (2) For affordable housing that is not HOME-assisted:
    (i) The contribution must be made with respect to housing that 
qualifies as affordable housing under Sec.  92.252 or Sec.  92.254.
    (ii) The participating jurisdiction or its instrumentality must 
execute, with the owner of the housing (or, if the participating 
jurisdiction is the owner, with the manager or developer), a written 
agreement that imposes and enumerates all of the affordability 
requirements from Sec.  92.252 and Sec.  92.253(a) and (b) (Tenant 
protections), or Sec.  92.254, whichever are applicable; the property 
standards requirements of Sec.  92.251; and income determinations made 
in accordance with Sec.  92.203. This written agreement must be executed 
before any match contributions may be made.
    (iii) A participating jurisdiction must establish a procedure to 
monitor HOME match-eligible housing to ensure continued compliance with 
the requirements of Sec. Sec.  92.203 (Income determinations), 92.252 
(Qualification as affordable housing: Rental housing), 92.253(a) and (b) 
(Tenant protections) and 92.254 (Qualification as affordable housing: 
Homeownership). No other HOME requirements apply.
    (iv) The match may be in any eligible form of match except those in 
Sec.  92.220(a)(2) (forbearance of fees), (a)(4) (on-site and off-site 
infrastructure), (a)(10) (direct cost of supportive services) and 
(a)(11) (direct costs of homebuyer counseling services).
    (v) Match contributions to mixed-use or mixed-income projects that 
contain affordable housing units will be recognized only if the 
contribution is made to the project's affordable housing units.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28929, May 28, 1997]



Sec.  92.220  Form of matching contribution.

    (a) Eligible forms. Matching contributions must be made from 
nonfederal resources and may be in the form of one or more of the 
following:

[[Page 561]]

    (1) Cash contributions from nonfederal sources. To be recognized as 
a cash contribution, funds must be contributed permanently to the HOME 
program (or to affordable housing not assisted with HOME funds), 
regardless of the form of investment provided to the project. Therefore, 
to receive match credit for the full amount of a loan to a HOME project, 
all repayment, interest, or other return on investment of the 
contribution must be deposited in the local account of the participating 
jurisdiction's HOME Investment Trust Fund to be used for eligible HOME 
activities in accordance with the requirements of this part. A cash 
contribution to affordable housing that is not assisted with HOME funds 
must be contributed permanently to the project. Repayments of matching 
contributions in affordable housing projects, as defined in Sec.  
92.219(b), that are not HOME-assisted, must be made to the local account 
of the participating jurisdiction's HOME Investment Trust Fund to get 
match credit for the full loan amount.
    (i) A cash contribution may be made by the participating 
jurisdiction, non-Federal public entities, private entities, or 
individuals, except as prohibited under paragraph (b)(4) of this 
section. A cash contribution made to a nonprofit organization for use in 
a HOME project may be counted as a matching contribution.
    (ii) A cash contribution may be made from program income (as defined 
by 2 CFR 200.80) from a Federal grant earned after the end of the award 
period if no Federal requirements govern the disposition of the program 
income. Included in this category are repayments from closed out grants 
under the Urban Development Action Grant Program (24 CFR part 570, 
subpart G) and the Housing Development Grant Program (24 CFR part 850), 
and from the Rental Rehabilitation Grant Program (24 CFR part 511) after 
all fiscal year Rental Rehabilitation grants have been closed out.
    (iii) The grant equivalent of a below-market interest rate loan to 
the project that is not repayable to the participating jurisdiction's 
HOME Investment Trust Fund may be counted as a cash contribution, as 
follows:
    (A) If the loan is made from funds borrowed by a jurisdiction or 
public agency or corporation the contribution is the present discounted 
cash value of the difference between the payments to be made on the 
borrowed funds and payments to be received from the loan to the project 
based on a discount rate equal to the interest rate on the borrowed 
funds.
    (B) If the loan is made from funds other than funds borrowed by a 
jurisdiction or public agency or corporation, the contribution is the 
present discounted cash value of the yield foregone. In determining the 
yield foregone, the participating jurisdiction must use as a measure of 
a market rate yield one of the following, as appropriate:
    (1) With respect to one- to four-unit housing financed with a fixed 
interest rate mortgage, a rate equal to the 10-year Treasury note rate 
plus 200 basis points;
    (2) With respect to one- to four-unit housing financed with an 
adjustable interest rate mortgage, a rate equal to the one-year Treasury 
bill rate plus 250 basis points;
    (3) With respect to a multifamily project, a rate equal to the 10-
year Treasury note rate plus 300 basis points; or
    (4) With respect to housing receiving financing for rehabilitation, 
a rate equal to the 10-year Treasury note rate plus 400 basis points.
    (iv) Proceeds of bonds that are not repaid with revenue from an 
affordable housing project (e.g., general obligation bonds) and that are 
loaned to a HOME-assisted or other qualified affordable housing project 
constitute a cash contribution under this paragraph.
    (v) A cash contribution may be counted as a matching contribution 
only if it is used for costs eligible under Sec. Sec.  92.206 or 92.209, 
or for the following (which are not HOME eligible costs): the cost of 
removing and relocating an ECHO housing unit during the period of 
affordability in accordance with Sec.  92.258(d)(3)(ii), payments to a 
project reserve account beyond payments permitted by Sec.  92.206(d)(5), 
operating subsidies, or costs relating to the portion of a mixed-income 
or mixed-

[[Page 562]]

use HOME-assisted project not related to the affordable housing units.
    (2) Forbearance of fees--(i) State and local taxes, charges or fees. 
The value (based on customary and reasonable means for establishing 
value) of State or local taxes, fees, or other charges that are normally 
and customarily imposed or charged by a State or local government on all 
transactions or projects in the conduct of its operations, which are 
waived, foregone, or deferred (including State low-income housing tax 
credits) in a manner that achieves affordability of HOME-assisted 
projects, may be counted as match. The amount of any real estate taxes 
may be based on post-improvement property value. For taxes, fees, or 
charges that are forgiven for future years, the value is the present 
discounted cash value, based on a rate equal to the rate for the 
Treasury security with a maturity closest to the number of years for 
which the taxes, fees, or charges are waived, foregone, or deferred.
    (ii) Other charges or fees. The value of fees or charges associated 
with the transfer or development of real estate that are normally and 
customarily imposed or charged by public or private entities, which are 
waived or foregone, in whole or in part, in a manner that achieves 
affordability of HOME-assisted projects, may be counted as match. Fees 
and charges under this paragraph do not include fees or charges for 
legal or other professional services; professional services which are 
donated, in whole or in part, are an eligible matching contribution in 
accordance with paragraph (a)(7) of this section.
    (iii) Fees or charges that are associated with the HOME Program only 
(rather than normally and customarily imposed or charged on all 
transactions or projects) are not eligible forms of matching 
contributions.
    (3) Donated Real Property. The value, before the HOME assistance is 
provided and minus any debt burden, lien, or other encumbrance, of 
donated land or other real property may be counted as match. The 
donation may be made by the participating jurisdiction, non-Federal 
public entities, private entities, or individuals, except as prohibited 
under paragraph (b)(4) of this section.
    (i) Donated property not acquired with Federal resources is a 
contribution in the amount of 100% of the value.
    (ii) Donated property acquired with Federal assistance may provide a 
partial contribution as follows. The property must be acquired with 
Federal assistance specifically for a HOME project (or for affordable 
housing that will be counted as match pursuant to Sec.  92.219(b)(2)). 
The property must be acquired with the Federal assistance at 
demonstrably below the appraised value and must be acknowledged by the 
seller as a donation to affordable housing at the time of the 
acquisition with the Federal assistance. The amount of the contribution 
is the difference between the acquisition price and the appraised value 
at the time of acquisition with the Federal assistance. If the property 
is acquired with the Federal assistance by someone other than the HOME 
project (or affordable housing) owner, to continue to qualify as a 
contribution, the property must be given to the HOME project (or 
affordable housing) owner at a price that does not exceed the amount of 
the Federal assistance used to acquire the property.
    (iii) Property must be appraised in conformance with established and 
generally recognized appraisal practice and procedures in common use by 
professional appraisers. Opinions of value must be based on the best 
available data properly analyzed and interpreted. The appraisal of land 
and structures must be performed by an independent, certified appraiser.
    (4) The cost, not paid with Federal resources, of on-site and off-
site infrastructure that the participating jurisdiction documents are 
directly required for HOME-assisted projects. The infrastructure must 
have been completed no earlier than 12 months before HOME funds are 
committed to the project.
    (5) Proceeds from multifamily and single family affordable housing 
project bond financing validly issued by a State or local government, or 
an agency or instrumentality of a State or

[[Page 563]]

local government or a political subdivision of a State and repayable 
with revenues from the affordable housing project financed as follows:
    (i) Fifty percent of the loan amount made from bond proceeds to a 
multifamily affordable housing project owner may qualify as match.
    (ii) Twenty-five percent of the loan amount from bond proceeds made 
to a single-family affordable housing project owner may qualify as 
match.
    (iii) Loans made from bond proceeds may not constitute more than 25 
percent of a participating jurisdiction's total annual match 
contribution.
    (6) The reasonable value of donated site-preparation and 
construction materials, not acquired with Federal resources. The value 
of site-preparation and construction materials is to be determined in 
accordance with the participating jurisdiction's cost estimate 
procedures.
    (7) The reasonable rental value of the donated use of site 
preparation or construction equipment.
    (8) The value of donated or voluntary labor or professional services 
(see Sec.  92.354(b)) in connection with the provision of affordable 
housing. A single rate established by HUD shall be applicable for 
determining the value of unskilled labor. The value of skilled labor or 
professional services shall be determined by the rate that the 
individual or entity performing the labor or service normally charges.
    (9) The value of sweat equity (see Sec.  92.354(c)) provided to a 
homeownership project, under an established component of a participating 
jurisdiction's program, up until the time of project completion (i.e., 
submission of a project completion form). Such labor shall be valued at 
the rate established for unskilled labor at paragraph (a)(8) of this 
section.
    (10) The direct cost of supportive services provided to families 
residing in HOME-assisted units during the period of affordability or 
receiving HOME tenant-based rental assistance during the term of the 
tenant-based rental assistance contract. The supportive services must be 
necessary to facilitate independent living or be required as part of a 
self-sufficiency program. Examples of supportive services include: case 
management, mental health services, assistance with the tasks of daily 
living, substance abuse treatment and counseling, day care, and job 
training and counseling.
    (11) The direct cost of homebuyer counseling services provided to 
families that acquire properties with HOME funds under the provisions of 
Sec.  92.254(a), including ongoing counseling services provided during 
the period of affordability. These services may be provided as part of a 
homebuyer counseling program that is not specific to the HOME Program, 
but only the cost of services to families that complete purchases with 
HOME assistance may be counted as match.
    (b) Ineligible forms. The following are examples that do not meet 
the requirements of paragraph (a) of this section and do not count 
toward meeting a participating jurisdiction's matching contribution 
requirement:
    (1) Contributions made with or derived from Federal resources or 
funds, regardless of when the Federal resources or funds were received 
or expended. CDBG funds (defined in 24 CFR 570.3) are Federal funds for 
this purpose;
    (2) The interest rate subsidy attributable to the Federal tax-
exemption on financing or the value attributable to Federal tax credits;
    (3) Owner equity or investment in a project; and
    (4) Cash or other forms of contributions from applicants for or 
recipients of HOME assistance or contracts, or investors who own, are 
working on, or are proposing to apply for assistance for a HOME-assisted 
project. The prohibition in this paragraph (b)(4) does not apply to 
contractors (who do not own any HOME project) contributing professional 
services in accordance with paragraph (a)(8) of this section or to 
persons contributing sweat equity in accordance with paragraph (a)(9) of 
this section.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28929, May 28, 1997; 
62 FR 44840, Aug. 22, 1997; 80 FR 75935, Dec. 7, 2015]



Sec.  92.221  Match credit.

    (a) When credit is given. Contributions are credited on a fiscal 
year basis at

[[Page 564]]

the time the contribution is made, as follows:
    (1) A cash contribution is credited when the funds are expended.
    (2) The grant equivalent of a below-market interest rate loan is 
credited at the time of the loan closing.
    (3) The value of state or local taxes, fees, or other charges that 
are normally and customarily imposed but are waived, foregone, or 
deferred is credited at the time the state or local government or other 
public or private entity officially waives, forgoes, or defers the 
taxes, fees, or other charges and notifies the project owner.
    (4) The value of donated land or other real property is credited at 
the time ownership of the property is transferred to the HOME project 
(or affordable housing) owner.
    (5) The cost of investment in infrastructure directly required for 
HOME-assisted projects is credited at the time funds are expended for 
the infrastructure or at the time the HOME funds are committed to the 
project if the infrastructure was completed before the commitment of 
HOME funds.
    (6) The value of donated material is credited as match at the time 
it is used for affordable housing.
    (7) The value of the donate use of site preparation or construction 
equipment is credited as match at the time the equipment is used for 
affordable housing.
    (8) The value of donated or voluntary labor or professional services 
is credited at the time the work is performed.
    (9) A loan made from bond proceeds under Sec.  92.220(a)(5) is 
credited at the time of the loan closing.
    (10) The direct cost of social services provided to residents of 
HOME-assisted units is credited at the time that the social services are 
provided during the period of affordability.
    (11) The direct cost of homebuyer counseling services provided to 
families that purchase HOME-assisted units is credited at the time that 
the homebuyer purchases the unit or for post-purchase counseling 
services, at the time the counseling services are provided.
    (b) Excess match. Contributions made in a fiscal year that exceed 
the participating jurisdiction's match liability for the fiscal year in 
which they were made may be carried over and applied to future fiscal 
years' match liability. Loans made from bond proceeds in excess of 25 
percent of a participating jurisdiction's total annual match 
contribution may be carried over to subsequent fiscal years as excess 
match, subject to the annual 25 percent limitation.
    (c) Credit for match contributions shall be assigned as follows:
    (1) For HOME-assisted projects involving more than one participating 
jurisdiction, the participating jurisdiction that makes the match 
contribution may decide to retain the match credit or permit the other 
participating jurisdiction to claim the credit.
    (2) For HOME match contributions to affordable housing that is not 
HOME-assisted (match pursuant to Sec.  92.219(b)) involving more than 
one participating jurisdiction, the participating jurisdiction that 
makes the match contribution receives the match credit.
    (3) A State that provides non-Federal funds to a local participating 
jurisdiction to be used for a contribution to affordable housing, 
whether or not HOME-assisted, may take the match credit for itself or 
may permit the local participating jurisdiction to receive the match 
credit.
    (d) Match credit for the development of affordable homeownership 
housing for sale to homebuyers. Contributions to the development of 
homeownership housing may be credited as a match only to the extent that 
the sales price of the housing is reduced by the amount of the 
contribution or, if the development costs exceed the fair market value 
of the housing, the contribution may be credited to the extent that the 
contributions enable the housing to be sold for less than the cost of 
development.

[61 FR 48750, Sept. 16, 1996, as amended at 78 FR 44670, July 24, 2013]



Sec.  92.222  Reduction of matching contribution requirement.

    (a) Reduction for fiscal distress. HUD will determine match 
reductions annually.

[[Page 565]]

    (1) Distress criteria for local government participating 
jurisdictions. If a local government participating jurisdiction 
satisfies both of the distress factors in paragraphs (a)(1)(i) and (ii) 
of this section, it is in severe fiscal distress and its match 
requirement will be reduced by 100% for the period specified in 
paragraph (a)(3) of this section. If a local government participating 
jurisdiction satisfies either distress factor in paragraphs (a)(1)(i) or 
(ii) of this section, it is in fiscal distress and its match requirement 
will be reduced by 50 percent, for the period specified in paragraph 
(a)(4) of this section.
    (i) Poverty rate. The average poverty rate in the participating 
jurisdiction was equal to or greater than 125 percent of the average 
national poverty rate during the calendar year for which the most recent 
data are available, as determined according to information of the Bureau 
of the Census.
    (ii) Per capita income. The average per capita income in the 
participating jurisdiction was less than 75 percent of the average 
national per capita income, during the calendar year for which the most 
recent data are available, as determined according to information from 
the Bureau of the Census.
    (2) Distress criteria for participating jurisdictions that are 
States. If a State satisfies at least 2 of the 3 distress factors in 
paragraphs (a)(2)(i) through (iii) of this section, it is in severe 
fiscal distress and its match requirement will be reduced by 100% for 
the period specified in paragraph (a)(3) of this section. If a State 
satisfies any 1 of the 3 distress factors in paragraphs (a)(2)(i) 
through (iii) of this section, it is in fiscal distress and its match 
requirement will be reduced by 50 percent, for the period specified in 
paragraph (a)(4) of this section.
    (i) Poverty rate. The average poverty rate in the State was equal to 
or greater than 125 percent of the average national poverty rate during 
the calendar year for which the most recent data are available, as 
determined according to information from the Bureau of the Census.
    (ii) Per capita income. The average per capita income in the State 
was less than 75 percent of the average national per capita income, 
during the calendar year for which the most recent data are available, 
as determined according to information from the Bureau of the Census.
    (iii) Personal income growth. The average personal income growth 
rate in the State over the most recent four quarters for which the data 
are available was less than 75 percent of the average national personal 
income growth rate during that period, as determined according to 
information from the Bureau of Economic Analysis.
    (3) Period of match reduction for severe fiscal distress. A 100% 
match reduction is effective for the fiscal year in which the severe 
fiscal distress determination is made and for the following fiscal year.
    (4) Period of match reduction for fiscal distress. A 50% match 
reduction is effective for the fiscal year in which the fiscal distress 
determination is made and for the following fiscal year, except that if 
a severe fiscal distress determination is published in that following 
fiscal year, the participating jurisdiction starts a new two-year match 
reduction period in accordance with the provisions of paragraph (a)(3) 
of this section.
    (b) Reduction of match for participating jurisdictions in disaster 
areas. If a participating jurisdiction is located in an area in which a 
declaration of major disaster is made pursuant to the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121-5206), the 
participating jurisdiction may request a reduction of its matching 
requirement.
    (1) In determining whether to grant the request and the amount and 
duration of the reduction, if any, HUD must consider the fiscal impact 
of the disaster on the participating jurisdiction.
    (i) For a local participating jurisdiction, the HUD Field office may 
reduce the matching requirement specified in Sec.  92.218 by up to 100 
percent for the fiscal year in which the declaration of major disaster 
is made and the following fiscal year.
    (ii) For a State participating jurisdiction, the HUD Field office 
may reduce the matching requirement specified in Sec.  92.218, by up to 
100 percent for the fiscal year in which the declaration

[[Page 566]]

of major disaster is made and the following fiscal year with respect to 
any HOME funds expended in an area to which the declaration of a major 
disaster applies.
    (2) At its discretion and upon request of the participating 
jurisdiction, the HUD Field Office may extend the reduction for an 
additional year.

[61 FR 48750, Sept. 16, 1996, as amended at 78 FR 44670, July 24, 2013]



                     Subpart F_Project Requirements



Sec.  92.250  Maximum per-unit subsidy amount, underwriting, and 
subsidy layering.

    (a) Maximum per-unit subsidy amount. The total amount of HOME funds 
and ADDI funds that a participating jurisdiction may invest on a per-
unit basis in affordable housing may not exceed the per-unit dollar 
limitations established under section 221(d)(3)(ii) of the National 
Housing Act (12 U.S.C.17151(d)(3)(ii)) for elevator- type projects that 
apply to the area in which the housing is located. HUD will allow the 
per-unit subsidy amount to be increased on a program-wide basis to an 
amount, up to 240 percent of the original per unit limits, to the extent 
that the costs of multifamily housing construction exceed the section 
221(d)(3)(ii) limit.
    (b) Underwriting and subsidy layering. Before committing funds to a 
project, the participating jurisdiction must evaluate the project in 
accordance with guidelines that it has adopted for determining a 
reasonable level of profit or return on owner's or developer's 
investment in a project and must not invest any more HOME funds, alone 
or in combination with other governmental assistance, than is necessary 
to provide quality affordable housing that is financially viable for a 
reasonable period (at minimum, the period of affordability in Sec.  
92.252 or Sec.  92.254) and that will not provide a profit or return on 
the owner's or developer's investment that exceeds the participating 
jurisdiction's established standards for the size, type, and complexity 
of the project. The participating jurisdiction's guidelines must require 
the participating jurisdiction to undertake:
    (1) An examination of the sources and uses of funds for the project 
and a determination that the costs are reasonable; and
    (2) An assessment, at minimum, of the current market demand in the 
neighborhood in which the project will be located, the experience of the 
developer, the financial capacity of the developer, and firm written 
financial commitments for the project.
    (3) For projects involving rehabilitation of owner-occupied housing 
pursuant to Sec.  92.254(b):
    (i) An underwriting analysis is required only if the HOME-funded 
rehabilitation loan is an amortizing loan; and
    (ii) A market analysis or evaluation of developer capacity is not 
required.
    (4) For projects involving HOME-funded downpayment assistance 
pursuant to Sec.  92.254(a) and which do not include HOME-funded 
development activity, a market analysis or evaluation of developer 
capacity is not required.

[78 FR 44670, July 24, 2013]



Sec.  92.251  Property standards.

    (a) New construction projects. (1) State and local codes, 
ordinances, and zoning requirements. Housing that is newly constructed 
with HOME funds must meet all applicable State and local codes, 
ordinances, and zoning requirements. HOME-assisted new construction 
projects must meet State or local residential and building codes, as 
applicable or, in the absence of a State or local building code, the 
International Residential Code or International Building Code (as 
applicable to the type of housing) of the International Code Council. 
The housing must meet the applicable requirements upon project 
completion.
    (2) HUD requirements. All new construction projects must also meet 
the requirements described in this paragraph:
    (i) Accessibility. The housing must meet the accessibility 
requirements of 24 CFR part 8, which implements Section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794), and Titles II and III of the 
Americans with Disabilities Act (42 U.S.C. 12131-12189) implemented at 
28 CFR parts 35 and 36, as applicable.

[[Page 567]]

Covered multifamily dwellings, as defined at 24 CFR 100.201, must also 
meet the design and construction requirements at 24 CFR 100.205, which 
implements the Fair Housing Act (42 U.S.C. 3601-3619).
    (ii) [Reserved]
    (iii) Disaster mitigation. Where relevant, the housing must be 
constructed to mitigate the impact of potential disasters (e.g., 
earthquakes, hurricanes, flooding, and wildfires), in accordance with 
State and local codes, ordinances, or other State and local 
requirements, or such other requirements as HUD may establish.
    (iv) Written cost estimates, construction contracts and construction 
documents. The participating jurisdiction must ensure the construction 
contract(s) and construction documents describe the work to be 
undertaken in adequate detail so that inspections can be conducted. The 
participating jurisdiction must review and approve written cost 
estimates for construction and determining that costs are reasonable.
    (v) Construction progress inspections. The participating 
jurisdiction must conduct progress and final inspections of construction 
to ensure that work is done in accordance with the applicable codes, the 
construction contract, and construction documents.
    (vi) Broadband infrastructure. For new commitments made after 
January 19, 2017 for a new construction housing project of a building 
with more than 4 rental units, the construction must include 
installation of broadband infrastructure, as this term is defined in 24 
CFR 5.100, except where the participating jurisdiction determines and, 
in accordance with Sec.  92.508(a)(3)(iv), documents the determination 
that:
    (A) The location of the new construction makes installation of 
broadband infrastructure infeasible; or
    (B) The cost of installing the infrastructure would result in a 
fundamental alteration in the nature of its program or activity or in an 
undue financial burden.
    (b) Rehabilitation projects. All rehabilitation that is performed 
using HOME funds must meet the requirements of this paragraph (b).
    (1) Rehabilitation standards. The participating jurisdiction must 
establish rehabilitation standards for all HOME- assisted housing 
rehabilitation activities that set forth the requirements that the 
housing must meet upon project completion. The participating 
jurisdiction's description of its standards must be in sufficient detail 
to determine the required rehabilitation work including methods and 
materials. The standards may refer to applicable codes or they may 
establish requirements that exceed the minimum requirements of the 
codes. The rehabilitation standards must address each of the following:
    (i) Health and safety. The participating jurisdiction's standards 
must identify life-threatening deficiencies that must be addressed 
immediately if the housing is occupied.
    (ii) Major systems. Major systems are: structural support; roofing; 
cladding and weatherproofing (e.g., windows, doors, siding, gutters); 
plumbing; electrical; and heating, ventilation, and air conditioning. 
For rental housing, the participating jurisdiction's standards must 
require the participating jurisdiction to estimate (based on age and 
condition) the remaining useful life of these systems, upon project 
completion of each major systems. For multifamily housing projects of 26 
units or more, the participating jurisdiction's standards must require 
the participating jurisdiction to determine the useful life of major 
systems through a capital needs assessment of the project. For rental 
housing, if the remaining useful life of one or more major system is 
less than the applicable period of affordability, the participating 
jurisdiction's standards must require the participating jurisdiction to 
ensure that a replacement reserve is established and monthly payments 
are made to the reserve that are adequate to repair or replace the 
systems as needed. For homeownership housing, the participating 
jurisdiction's standards must require, upon project completion, each of 
the major systems to have a remaining useful life for a minimum of 5 
years or for such longer period specified by the participating 
jurisdiction, or the major systems must be rehabilitated or replaced as 
part of the rehabilitation work.

[[Page 568]]

    (iii) Lead-based paint. The participating jurisdiction's standards 
must require the housing to meet the lead-based paint requirements at 24 
CFR part 35.
    (iv) Accessibility. The participating jurisdiction's standards must 
require the housing to meet the accessibility requirements in 24 CFR 
part 8, which implements Section 504 of the Rehabilitation Act of 1973 
(29 U.S.C. 794), and Titles II and III of the Americans with 
Disabilities Act (42 U.S.C. 12131-12189) implemented at 28 CFR parts 35 
and 36, as applicable. Covered multifamily dwellings, as defined at 24 
CFR 100.201, must also meet the design and construction requirements at 
24 CFR 100.205, which implements the Fair Housing Act (42 U.S.C. 3601-
3619). Rehabilitation may include improvements that are not required by 
regulation or statute that permit use by a person with disabilities.
    (v) [Reserved]
    (vi) Disaster mitigation. Where relevant, the participating 
jurisdiction's standards must require the housing to be improved to 
mitigate the impact of potential disasters (e.g., earthquake, 
hurricanes, flooding, and wildfires) in accordance with State and local 
codes, ordinances, and requirements.
    (vii) State and local codes, ordinances, and zoning requirements. 
The participating jurisdiction's standards must require the housing to 
meet all applicable State and local codes, ordinances, and requirements 
or, in the absence of a State or local building code, the International 
Existing Building Code of the International Code Council.
    (viii) Uniform Physical Condition Standards. The standards of the 
participating jurisdiction must be such that, upon completion, the HOME-
assisted project and units will be decent, safe, sanitary, and in good 
repair as described in 24 CFR 5.703. HUD will establish the minimum 
deficiencies that must be corrected under the participating 
jurisdiction's rehabilitation standards based on inspectable items and 
inspected areas from HUD-prescribed physical inspection procedures 
(Uniform Physical Conditions Standards) pursuant to 24 CFR 5.705.
    (ix) Capital Needs Assessments. For multifamily rental housing 
projects of 26 or more total units, the participating jurisdiction must 
determine all work that will be performed in the rehabilitation of the 
housing and the long-term physical needs of the project through a 
capital needs assessment of the project.
    (x) Broadband infrastructure. For new commitments made after January 
19, 2017 for a substantial rehabilitation project of a building with 
more than 4 rental units, any substantial rehabilitation, as defined in 
24 CFR 5.100, must provide for installation of broadband infrastructure, 
as this term is also defined in 24 CFR 5.100, except where the 
participating jurisdiction determines and, in accordance with Sec.  
92.508(a)(3)(iv), documents the determination that:
    (A) The location of the substantial rehabilitation makes 
installation of broadband infrastructure infeasible;
    (B) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (C) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.
    (2) Construction documents and cost estimates. The participating 
jurisdiction must ensure that the work to be undertaken will meet the 
participating jurisdiction's rehabilitation standards. The construction 
documents (i.e., written scope of work to be performed) must be in 
sufficient detail to establish the basis for a uniform inspection of the 
housing to determine compliance with the participating jurisdiction's 
standards. The participating jurisdiction must review and approve a 
written cost estimate for rehabilitation after determining that costs 
are reasonable.
    (3) Frequency of inspections. The participating jurisdiction must 
conduct an initial property inspection to identify the deficiencies that 
must be addressed. The participating jurisdiction must conduct progress 
and final inspections to determine that work was done in accordance with 
work write-ups.
    (c) Acquisition of standard housing. (1) Existing housing that is 
acquired with HOME assistance for rental housing,

[[Page 569]]

and that was newly constructed or rehabilitated less than 12 months 
before the date of commitment of HOME funds, must meet the property 
standards of paragraph (a) or paragraph (b) of this section, as 
applicable, of this section for new construction and rehabilitation 
projects. The participating jurisdiction must document this compliance 
based upon a review of approved building plans and Certificates of 
Occupancy, and an inspection that is conducted no earlier than 90 days 
before the commitment of HOME assistance.
    (2) All other existing housing that is acquired with HOME assistance 
for rental housing must meet the rehabilitation property standards 
requirements of paragraph (b) of this section. The participating 
jurisdiction must document this compliance based upon an inspection that 
is conducted no earlier than 90 days before the commitment of HOME 
assistance. If the property does not meet these standards, HOME funds 
cannot be used to acquire the property unless it is rehabilitated to 
meet the standards of paragraph (b) of this section.
    (3) Existing housing that is acquired for homeownership (e.g., 
downpayment assistance) must be decent, safe, sanitary, and in good 
repair. The participating jurisdiction must establish standards to 
determine that the housing is decent, safe, sanitary, and in good 
repair. At minimum, the standards must provide that the housing meets 
all applicable State and local housing quality standards and code 
requirements and the housing does not contain the specific deficiencies 
proscribed by HUD based on the applicable inspectable items and 
inspected areas in HUD-prescribed physical inspection procedures 
(Uniform Physical Condition Standards) issued pursuant to 24 CFR 5.705. 
The participating jurisdiction must inspect the housing and document 
this compliance based upon an inspection that is conducted no earlier 
than 90 days before the commitment of HOME assistance. If the housing 
does not meet these standards, the housing must be rehabilitated to meet 
the standards of this paragraph (c)(3) or it cannot be acquired with 
HOME funds.
    (d) Occupied housing by tenants receiving HOME tenant-based rental 
assistance. All housing occupied by tenants receiving HOME tenant-based 
rental assistance must meet the standards in 24 CFR 982.401, or the 
successor requirements as established by HUD.
    (e) Manufactured housing. Construction of all manufactured housing 
including manufactured housing that replaces an existing substandard 
unit under the definition of ``reconstruction'' must meet the 
Manufactured Home Construction and Safety Standards codified at 24 CFR 
part 3280. These standards preempt State and local codes which are not 
identical to the federal standards for the new construction of 
manufactured housing. Participating jurisdictions providing HOME funds 
to assist manufactured housing units must comply with applicable State 
and local laws or codes. In the absence of such laws or codes, the 
installation must comply with the manufacturer's written instructions 
for installation of manufactured housing units. All new manufactured 
housing and all manufactured housing that replaces an existing 
substandard unit under the definition of ``reconstruction'' must be on a 
permanent foundation that meets the requirements for foundation systems 
as set forth in 24 CFR 203.43f(c)(i). All new manufactured housing and 
all manufactured housing that replaces an existing substandard unit 
under the definition of ``reconstruction'' must, at the time of project 
completion, be connected to permanent utility hook-ups and be located on 
land that is owned by the manufactured housing unit owner or land for 
which the manufactured housing owner has a lease for a period at least 
equal to the applicable period of affordability. In HOME-funded 
rehabilitation of existing manufactured housing the foundation and 
anchoring must meet all applicable State and local codes, ordinances, 
and requirements or in the absence of local or state codes, the Model 
Manufactured Home Installation Standards at 24 CFR part 3285. 
Manufactured housing that is rehabilitated using HOME funds must meet 
the property standards requirements in paragraph (b) of this section, as 
applicable. The participating jurisdiction must

[[Page 570]]

document this compliance in accordance with inspection procedures that 
the participating jurisdiction has established pursuant to Sec.  92.251, 
as applicable.
    (f) Ongoing property condition standards: Rental housing. (1) 
Ongoing property standards. The participating jurisdiction must 
establish property standards for rental housing (including manufactured 
housing) that apply throughout the affordability period. The standards 
must ensure that owners maintain the housing as decent, safe, and 
sanitary housing in good repair. The participating jurisdiction's 
description of its property standards must be in sufficient detail to 
establish the basis for a uniform inspection of HOME rental projects. 
The participating jurisdiction's ongoing property standards must address 
each of the following:
    (i) Compliance with State and local codes, ordinances, and 
requirements. The participating jurisdiction's standards must require 
the housing to meet all applicable State and local code requirements and 
ordinances. In the absence of existing applicable State or local code 
requirements and ordinances, at a minimum, the participating 
jurisdiction's ongoing property standards must include all inspectable 
items and inspectable areas specified by HUD based on the HUD physical 
inspection procedures (Uniform Physical Condition Standards (UPCS)) 
prescribed by HUD pursuant to 24 CFR 5.705. The participating 
jurisdiction's property standards are not required to use any scoring, 
item weight, or level of criticality used in UPCS.
    (ii) Health and safety. The participating jurisdiction's standards 
must require the housing to be free of all health and safety defects. 
The standards must identify life-threatening deficiencies that the owner 
must immediately correct and the time frames for addressing these 
deficiencies.
    (iii) Lead-based paint. The participating jurisdiction's standards 
must require the housing to meet the lead-based paint requirements in 24 
CFR part 35.
    (2) Projects to which HOME funds were committed before January 24, 
2015 must meet all applicable State or local housing quality standards 
or code requirements, and if there are no such standard or code 
requirements, the housing must meet the housing quality standards in 24 
CFR 982.401.
    (3) Inspections. The participating jurisdiction must undertake 
ongoing property inspections, in accordance with Sec.  92.504(d).
    (4) Corrective and remedial actions. The participating jurisdiction 
must have procedures for ensuring that timely corrective and remedial 
actions are taken by the project owner to address identified 
deficiencies.
    (5) Inspection procedures. The participating jurisdiction must 
establish written inspection procedures inspections. The procedures must 
include detailed inspection checklists, description of how and by whom 
inspections will be carried out, and procedures for training and 
certifying qualified inspectors. The procedures must also describe how 
frequently the property will be inspected, consistent with this section, 
Sec.  92.209, and Sec.  92.504(d).

[78 FR 44670, July 24, 2013, as amended at 81 FR 92635, Dec. 20, 2016]



Sec.  92.252  Qualification as affordable housing: Rental housing.

    The HOME-assisted units in a rental housing project must be occupied 
by households that are eligible as low- income families and must meet 
the requirements of this section to qualify as affordable housing. If 
the housing is not occupied by eligible tenants within six months 
following the date of project completion, HUD will require the 
participating jurisdiction to submit marketing information and, if 
appropriate, submit a marketing plan. HUD will require the participating 
jurisdiction to repay HOME funds invested in any housing unit that has 
not been rented to eligible tenants 18 months after the date of project 
completion. The affordability requirements also apply to the HOME- 
assisted non-owner-occupied units in single-family housing purchased 
with HOME funds in accordance with Sec.  92.254. The tenant must have a 
written lease that complies with Sec.  92.253.
    (a) Rent limitation. HUD provides the following maximum HOME rent 
limits. The rent limits apply to the rent plus the utilities or the 
utility allowance.

[[Page 571]]

The maximum HOME rents (High HOME Rents) are the lesser of:
    (1) The fair market rent for existing housing for comparable units 
in the area as established by HUD under 24 CFR 888.111; or
    (2) A rent that does not exceed 30 percent of the adjusted income of 
a family whose annual income equals 65 percent of the median income for 
the area, as determined by HUD, with adjustments for number of bedrooms 
in the unit. The HOME rent limits provided by HUD will include average 
occupancy per unit and adjusted income assumptions.
    (b) Additional rent limitations (Low HOME Rents). The participating 
jurisdiction may designate (in its written agreement with the project 
owner) more than the minimum HOME units in a rental housing project, 
regardless of project size, to have Low HOME Rents that meet the 
requirements of this paragraph (b). In rental projects with five or more 
HOME-assisted rental units, at least 20 percent of the HOME-assisted 
units must be occupied by very low-income families and meet one of the 
following rent requirements:
    (1) The rent does not exceed 30 percent of the annual income of a 
family whose income equals 50 percent of the median income for the area, 
as determined by HUD, with adjustments for smaller and larger families. 
HUD provides the HOME rent limits which include average occupancy per 
unit and adjusted income assumptions. However, if the rent determined 
under this paragraph is higher than the applicable rent under paragraph 
(a) of this section, then the maximum rent for units under this 
paragraph is that calculated under paragraph (a) of this section.
    (2) The rent does not exceed 30 percent of the family's adjusted 
income. If the unit receives Federal or State project-based rental 
subsidy and the very low-income family pays as a contribution toward 
rent not more than 30 percent of the family's adjusted income, then the 
maximum rent (i.e., tenant contribution plus project-based rental 
subsidy) is the rent allowable under the Federal or State project-based 
rental subsidy program.
    (c) Additional rent limitations for SRO projects. (1) For SRO units 
that have both sanitary and food preparation facilities, the maximum 
HOME rent is based on the zero-bedroom fair market rent. The project 
must meet the requirements of paragraphs (a) and (b) of this section.
    (2) For SRO units that have no sanitary or food preparation 
facilities or only one of the two, the maximum HOME rent is based on 75 
percent of the zero-bedroom fair market rent. The project is not 
required to have low HOME rents in accordance with paragraph (b)(1) or 
(2) of this section, but must meet the occupancy requirements of 
paragraph (b) of this section.
    (d) Initial rent schedule and utility allowances. (1) The 
participating jurisdiction must establish maximum monthly allowances for 
utilities and services (excluding telephone) and update the allowances 
annually. The participating jurisdiction must use the HUD Utility 
Schedule Model or otherwise determine the utility allowance for the 
project based on the type of utilities used at the project.
    (2) The participating jurisdiction must review and approve rents 
proposed by the owner for units, subject to the maximum rent limitations 
in paragraphs (a) or (b) of this section. For all units subject to the 
maximum rent limitations in paragraphs (a) or (b) of this section for 
which the tenant is paying utilities and services, the participating 
jurisdiction must ensure that the rents do not exceed the maximum rent 
minus the monthly allowances for utilities and services.
    (e) Periods of affordability. The HOME-assisted units must meet the 
affordability requirements for not less than the applicable period 
specified in the following table, beginning after project completion.
    (1) The affordability requirements:
    (i) Apply without regard to the term of any loan or mortgage, 
repayment of the HOME investment, or the transfer of ownership;
    (ii) Must be imposed by a deed restriction, a covenant running with 
the land, an agreement restricting the use of the property, or other 
mechanisms approved by HUD and must give the participating jurisdiction 
the right to require specific performance (except that the participating 
jurisdiction may

[[Page 572]]

provide that the affordability restrictions may terminate upon 
foreclosure or transfer in lieu of foreclosure); and
    (iii) Must be recorded in accordance with State recordation laws.
    (2) The participating jurisdiction may use purchase options, rights 
of first refusal or other preemptive rights to purchase the housing 
before foreclosure or deed in lieu of foreclosure in order to preserve 
affordability.
    (3) The affordability restrictions shall be revived according to the 
original terms if, during the original affordability period, the owner 
of record before the foreclosure, or deed in lieu of foreclosure, or any 
entity that includes the former owner or those with whom the former 
owner has or had family or business ties, obtains an ownership interest 
in the project or property.
    (4) The termination of the restrictions on the project does not 
terminate the participating jurisdiction's repayment obligation under 
Sec.  92.503(b).

------------------------------------------------------------------------
                                                         Minimum period
                Rental housing activity                 of affordability
                                                            in years
------------------------------------------------------------------------
Rehabilitation or acquisition of existing housing per                  5
 unit amount of HOME funds: Under $15,000.............
$15,000 to $40,000....................................                10
Over $40,000 or rehabilitation involving refinancing..                15
New construction or acquisition of newly constructed                  20
 housing..............................................
------------------------------------------------------------------------

    (f) Subsequent rents during the affordability period. (1) The 
maximum HOME rent limits are recalculated on a periodic basis after HUD 
determines fair market rents and median incomes. HUD then provides the 
new maximum HOME rent limits to participating jurisdictions. Regardless 
of changes in fair market rents and in median income over time, the HOME 
rents for a project are not required to be lower than the HOME rent 
limits for the project in effect at the time of project commitment.
    (2) The participating jurisdiction must provide project owners with 
information on updated HOME rent limits so that rents may be adjusted 
(not to exceed the maximum HOME rent limits in paragraph (f)(1) of this 
section) in accordance with the written agreement between the 
participating jurisdiction and the owner. Owners must annually provide 
the participating jurisdiction with information on rents and occupancy 
of HOME-assisted units to demonstrate compliance with this section. The 
participating jurisdiction must review rents for compliance and approve 
or disapprove them every year.
    (3) Any increase in rents for HOME-assisted units is subject to the 
provisions of outstanding leases, and in any event, the owner must 
provide tenants of those units not less than 30 days prior written 
notice before implementing any increase in rents.
    (g) Adjustment of HOME rent limits for an existing project. (1) 
Changes in fair market rents and in median income over time should be 
sufficient to maintain the financial viability of a project within the 
HOME rent limits in this section.
    (2) HUD may adjust the HOME rent limits for a project, only if HUD 
finds that an adjustment is necessary to support the continued financial 
viability of the project and only by an amount that HUD determines is 
necessary to maintain continued financial viability of the project. HUD 
expects that this authority will be used sparingly.
    (h) Tenant income. The income of each tenant must be determined 
initially in accordance with Sec.  92.203(a)(1)(i). In addition, each 
year during the period of affordability the project owner must re-
examine each tenant's annual income in accordance with one of the 
options in Sec.  92.203 selected by the participating jurisdiction. An 
owner of a multifamily project with an affordability period of 10 years 
or more who re-examines tenant's annual income through a statement and 
certification in accordance with Sec.  92.203(a)(1)(ii), must examine 
the income of each tenant, in accordance with Sec.  92.203(a)(1)(i), 
every sixth year of the affordability period. Otherwise, an owner who 
accepts

[[Page 573]]

the tenant's statement and certification in accordance with Sec.  
92.203(a)(1)(ii) is not required to examine the income of tenants in 
multifamily or single-family projects unless there is evidence that the 
tenant's written statement failed to completely and accurately state 
information about the family's size or income.
    (i) Over-income tenants. (1) HOME-assisted units continue to qualify 
as affordable housing despite a temporary noncompliance caused by 
increases in the incomes of existing tenants if actions satisfactory to 
HUD are being taken to ensure that all vacancies are filled in 
accordance with this section until the noncompliance is corrected.
    (2) Tenants who no longer qualify as low-income families must pay as 
rent the lesser of the amount payable by the tenant under State or local 
law or 30 percent of the family's adjusted income, except that tenants 
of HOME-assisted units that have been allocated low-income housing tax 
credits by a housing credit agency pursuant to section 42 of the 
Internal Revenue Code of 1986 (26 U.S.C. 42) must pay rent governed by 
section 42. In addition, in projects in which the Home units are 
designated as floating pursuant to paragraph (j) of this section, 
tenants who no longer qualify as low-income are not required to pay as 
rent an amount that exceeds the market rent for comparable, unassisted 
units in the neighborhood.
    (j) Fixed and floating HOME units. In a project containing HOME-
assisted and other units, the participating jurisdiction may designate 
fixed or floating HOME units. This designation must be made at the time 
of project commitment in the written agreement between the participating 
jurisdiction and the owner, and the HOME units must be identified not 
later than the time of initial unit occupancy. Fixed units remain the 
same throughout the period of affordability. Floating units are changed 
to maintain conformity with the requirements of this section during the 
period of affordability so that the total number of housing units 
meeting the requirements of this section remains the same, and each 
substituted unit is comparable in terms of size, features, and number of 
bedrooms to the originally designated HOME-assisted unit.
    (k) Tenant selection. The tenants must be selected in accordance 
with Sec.  92.253(d).
    (l) Ongoing responsibilities. The participating jurisdiction's 
responsibilities for on-site inspections and financial oversight of 
rental projects are set forth in Sec.  92.504(d).

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28929, May 28, 1997; 
62 FR 44840, Aug. 22, 1997; 78 FR 44672, July 24, 2013]



Sec.  92.253  Tenant protections and selection.

    (a) Lease. There must be a written lease between the tenant and the 
owner of rental housing assisted with HOME funds that is for a period of 
not less than 1 year, unless by mutual agreement between the tenant and 
the owner a shorter period is specified. The lease must incorporate the 
VAWA lease term/addendum required under Sec.  92.359(e), except as 
otherwise provided by Sec.  92.359(b).
    (b) Prohibited lease terms. The lease may not contain any of the 
following provisions:
    (1) Agreement to be sued. Agreement by the tenant to be sued, to 
admit guilt, or to a judgment in favor of the owner in a lawsuit brought 
in connection with the lease;
    (2) Treatment of property. Agreement by the tenant that the owner 
may take, hold, or sell personal property of household members without 
notice to the tenant and a court decision on the rights of the parties. 
This prohibition, however, does not apply to an agreement by the tenant 
concerning disposition of personal property remaining in the housing 
unit after the tenant has moved out of the unit. The owner may dispose 
of this personal property in accordance with State law;
    (3) Excusing owner from responsibility. Agreement by the tenant not 
to hold the owner or the owner's agents legally responsible for any 
action or failure to act, whether intentional or negligent;
    (4) Waiver of notice. Agreement of the tenant that the owner may 
institute a lawsuit without notice to the tenant;
    (5) Waiver of legal proceedings. Agreement by the tenant that the 
owner may evict the tenant or household

[[Page 574]]

members without instituting a civil court proceeding in which the tenant 
has the opportunity to present a defense, or before a court decision on 
the rights of the parties;
    (6) Waiver of a jury trial. Agreement by the tenant to waive any 
right to a trial by jury;
    (7) Waiver of right to appeal court decision. Agreement by the 
tenant to waive the tenant's right to appeal, or to otherwise challenge 
in court, a court decision in connection with the lease;
    (8) Tenant chargeable with cost of legal actions regardless of 
outcome. Agreement by the tenant to pay attorney's fees or other legal 
costs even if the tenant wins in a court proceeding by the owner against 
the tenant. The tenant, however, may be obligated to pay costs if the 
tenant loses; and
    (9) Mandatory supportive services. Agreement by the tenant (other 
than a tenant in transitional housing) to accept supportive services 
that are offered.
    (c) Termination of tenancy. An owner may not terminate the tenancy 
or refuse to renew the lease of a tenant of rental housing assisted with 
HOME funds, except for serious or repeated violation of the terms and 
conditions of the lease; for violation of applicable Federal, State, or 
local law; for completion of the tenancy period for transitional housing 
or failure to follow any required transitional housing supportive 
services plan; or for other good cause. Good cause does not include an 
increase in the tenant's income or refusal of the tenant to purchase the 
housing. To terminate or refuse to renew tenancy, the owner must serve 
written notice upon the tenant specifying the grounds for the action at 
least 30 days before the termination of tenancy.
    (d) Tenant selection. An owner of rental housing assisted with HOME 
funds must comply with the affirmative marketing requirements 
established by the participating jurisdiction pursuant to Sec.  
92.351(a). The owner must adopt and follow written tenant selection 
policies and criteria that:
    (1) Limit the housing to very low- income and low-income families;
    (2) Are reasonably related to the applicants' ability to perform the 
obligations of the lease (i.e., to pay the rent, not to damage the 
housing; not to interfere with the rights and quiet enjoyment of other 
tenants);
    (3) Limit eligibility or give a preference to a particular segment 
of the population if permitted in its written agreement with the 
participating jurisdiction (and only if the limitation or preference is 
described in the participating jurisdiction's consolidated plan).
    (i) Any limitation or preference must not violate nondiscrimination 
requirements in Sec.  92.350. A limitation or preference does not 
violate nondiscrimination requirements if the housing also receives 
funding from a Federal program that limits eligibility to a particular 
segment of the population (e.g., the Housing Opportunity for Persons 
with AIDS program under 24 CFR part 574, the Shelter Plus Care program 
under 24 CFR part 582, the Supportive Housing program under 24 CFR part 
583, supportive housing for the elderly or persons with disabilities 
under 24 CFR part 891), and the limit or preference is tailored to serve 
that segment of the population.
    (ii) If a project does not receive funding from a Federal program 
that limits eligibility to a particular segment of the population, the 
project may have a limitation or preference for persons with 
disabilities who need services offered at a project only if:
    (A) The limitation or preference is limited to the population of 
families (including individuals) with disabilities that significantly 
interfere with their ability to obtain and maintain housing;
    (B) Such families will not be able to obtain or maintain themselves 
in housing without appropriate supportive services; and
    (C) Such services cannot be provided in a nonsegregated setting. The 
families must not be required to accept the services offered at the 
project. In advertising the project, the owner may advertise the project 
as offering services for a particular type of disability; however, the 
project must be open to all otherwise eligible persons with disabilities 
who may benefit from the services provided in the project.

[[Page 575]]

    (4) Do not exclude an applicant with a certificate or voucher under 
the Section 8 Tenant-Based Assistance: Housing Choice Voucher Program 
(24 CFR part 982) or an applicant participating in a HOME tenant-based 
rental assistance program because of the status of the prospective 
tenant as a holder of such certificate, voucher, or comparable HOME 
tenant-based assistance document.
    (5) Provide for the selection of tenants from a written waiting list 
in the chronological order of their application, insofar as is 
practicable;
    (6) Give prompt written notification to any rejected applicant of 
the grounds for any rejection; and
    (7) Comply with the VAWA requirements prescribed in Sec.  92.359.

[61 FR 48750, Sept. 16, 1996, as amended at 67 FR 61756, Oct. 1, 2002; 
78 FR 44674, July 24, 2013; 81 FR 80803, Nov. 16, 2016]



Sec.  92.254  Qualification as affordable housing: Homeownership.

    (a) Acquisition with or without rehabilitation. Housing that is for 
acquisition by a family must meet the affordability requirements of this 
paragraph (a).
    (1) The housing must be single family housing.
    (2) The housing must be modest housing as follows:
    (i) In the case of acquisition of newly constructed housing or 
standard housing, the housing has a purchase price for the type of 
single family housing that does not exceed 95 percent of the median 
purchase price for the area, as described in paragraph (a)(2)(iii) of 
this section.
    (ii) In the case of acquisition with rehabilitation, the housing has 
an estimated value after rehabilitation that does not exceed 95 percent 
of the median purchase price for the area, described in paragraph 
(a)(2)(iii) of this section.
    (iii) If a participating jurisdiction intends to use HOME funds for 
homebuyer assistance or for the rehabilitation of owner-occupied single- 
family properties, the participating jurisdiction must use the HOME 
affordable homeownership limits provided by HUD for newly constructed 
housing and for existing housing. HUD will provide limits for affordable 
newly constructed housing based on 95 percent of the median purchase 
price for the area using Federal Housing Administration (FHA) single 
family mortgage program data for newly constructed housing, with a 
minimum limit based on 95 percent of the U.S. median purchase price for 
new construction for nonmetropolitan areas. HUD will provide limits for 
affordable existing housing based on 95 percent of the median purchase 
price for the area using Federal FHA single family mortgage program data 
for existing housing data and other appropriate data that are available 
nation-wide for sales of existing housing, with a minimum limit based on 
95 percent of the state-wide nonmetropolitan area median purchase price 
using this data. In lieu of the limits provided by HUD, the 
participating jurisdiction may determine 95 percent of the median area 
purchase price for single family housing in the jurisdiction annually, 
as follows. The participating jurisdiction must set forth the price for 
different types of single family housing for the jurisdiction. The 
participating jurisdiction may determine separate limits for existing 
housing and newly constructed housing. For housing located outside of 
metropolitan areas, a State may aggregate sales data from more than one 
county, if the counties are contiguous and similarly situated. The 
following information must be included in the annual action plan of the 
Consolidated Plan submitted to HUD for review and updated in each action 
plan.
    (A) The 95 percent of median area purchase price must be established 
in accordance with a market analysis that ensured that a sufficient 
number of recent housing sales are included in the survey.
    (B) Sales must cover the requisite number of months based on volume: 
For 500 or more sales per month, a one- month reporting period; for 250 
through 499 sales per month, a 2-month reporting period; for less than 
250 sales per month, at least a 3-month reporting period. The data must 
be listed in ascending order of sales price.
    (C) The address of the listed properties must include the location 
within the participating jurisdiction. Lot,

[[Page 576]]

square, and subdivision data may be substituted for the street address.
    (D) The housing sales data must reflect all, or nearly all, of the 
one- family house sales in the entire participating jurisdiction.
    (E) To determine the median, take the middle sale on the list if an 
odd number of sales, and if an even number, take the higher of the 
middle numbers and consider it the median. After identifying the median 
sales price, the amount should be multiplied by 0.95 to determine the 95 
percent of the median area purchase price.
    (3) The housing must be acquired by a homebuyer whose family 
qualifies as a low-income family, and the housing must be the principal 
residence of the family throughout the period described in paragraph 
(a)(4) of this section. If there is no ratified sales contract with an 
eligible homebuyer for the housing within 9 months of the date of 
completion of construction or rehabilitation, the housing must be rented 
to an eligible tenant in accordance with Sec.  92.252. In determining 
the income eligibility of the family, the participating jurisdiction 
must include the income of all persons living in the housing. The 
homebuyer must receive housing counseling.
    (4) Periods of affordability. The HOME-assisted housing must meet 
the affordability requirements for not less than the applicable period 
specified in the following table, beginning after project completion. 
The per unit amount of HOME funds and the affordability period that they 
trigger are described more fully in paragraphs (a)(5)(i) (resale) and 
(ii) (recapture) of this section.

------------------------------------------------------------------------
                                                       Minimum period of
    Homeownership assistance HOME amount per-unit      affordability in
                                                             years
------------------------------------------------------------------------
Under $15,000.......................................                   5
$15,000 to $40,000..................................                  10
Over $40,000........................................                  15
------------------------------------------------------------------------

    (5) Resale and recapture. The participating jurisdiction must 
establish the resale or recapture requirements that comply with the 
standards of this section and set forth the requirements in its 
consolidated plan. HUD must determine that they are appropriate and must 
specifically approve them in writing.
    (i) Resale. Resale requirements must ensure, if the housing does not 
continue to be the principal residence of the family for the duration of 
the period of affordability that the housing is made available for 
subsequent purchase only to a buyer whose family qualifies as a low-
income family and will use the property as the family's principal 
residence. The resale requirement must also ensure that the price at 
resale provides the original HOME-assisted owner a fair return on 
investment (including the homeowner's investment and any capital 
improvement) and ensure that the housing will remain affordable to a 
reasonable range of low- income homebuyers. The participating 
jurisdiction must specifically define ``fair return on investment'' and 
``affordability to a reasonable range of low-income homebuyers,'' and 
specifically address how it will make the housing affordable to a low-
income homebuyer in the event that the resale price necessary to provide 
fair return is not affordable to the subsequent buyer. The period of 
affordability is based on the total amount of HOME funds invested in the 
housing.
    (A) Except as provided in paragraph (a)(5)(i)(B) of this section, 
deed restrictions, covenants running with the land, or other similar 
mechanisms must be used as the mechanism to impose the resale 
requirements. The affordability restrictions may terminate upon 
occurrence of any of the following termination events: foreclosure, 
transfer in lieu of foreclosure or assignment of an FHA insured mortgage 
to HUD. The participating jurisdiction may use purchase options, rights 
of first refusal or other preemptive rights to purchase the housing 
before foreclosure to preserve affordability. The affordability 
restrictions shall be revived according to the original terms if, during 
the original affordability period, the owner of record before the 
termination event, obtains an ownership interest in the housing.
    (B) Certain housing may be presumed to meet the resale restrictions 
(i.e., the

[[Page 577]]

housing will be available and affordable to a reasonable range of low-
income homebuyers; a low-income homebuyer will occupy the housing as the 
family's principal residence; and the original owner will be afforded a 
fair return on investment) during the period of affordability without 
the imposition of enforcement mechanisms by the participating 
jurisdiction. The presumption must be based upon a market analysis of 
the neighborhood in which the housing is located. The market analysis 
must include an evaluation of the location and characteristics of the 
housing and residents in the neighborhood (e.g., sale prices, age and 
amenities of the housing stock, incomes of residents, percentage of 
owner-occupants) in relation to housing and incomes in the housing 
market area. An analysis of the current and projected incomes of 
neighborhood residents for an average period of affordability for 
homebuyers in the neighborhood must support the conclusion that a 
reasonable range of low-income families will continue to qualify for 
mortgage financing. For example, an analysis shows that the housing is 
modestly priced within the housing market area and that families with 
incomes of 65% to 80% of area median can afford monthly payments under 
average FHA terms without other government assistance and housing will 
remain affordable at least during the next five to seven years compared 
to other housing in the market area; the size and amenities of the 
housing are modest and substantial rehabilitation will not significantly 
increase the market value; the neighborhood has housing that is not 
currently owned by the occupants, but the participating jurisdiction is 
encouraging homeownership in the neighborhood by providing homeownership 
assistance and by making improvements to the streets, sidewalks, and 
other public facilities and services. If a participating jurisdiction in 
preparing a neighborhood revitalization strategy under Sec.  
91.215(e)(2) of its consolidated plan or Empowerment Zone or Enterprise 
Community application under 24 CFR part 597 has incorporated the type of 
market data described above, that submission may serve as the required 
analysis under this section. If the participating jurisdiction continues 
to provide homeownership assistance for housing in the neighborhood, it 
must periodically update the market analysis to verify the original 
presumption of continued affordability.
    (ii) Recapture. Recapture provisions must ensure that the 
participating jurisdiction recoups all or a portion of the HOME 
assistance to the homebuyers, if the housing does not continue to be the 
principal residence of the family for the duration of the period of 
affordability. The participating jurisdiction may structure its 
recapture provisions based on its program design and market conditions. 
The period of affordability is based upon the total amount of HOME funds 
subject to recapture described in paragraph (a)(5)(ii)(A)(5) of this 
section. Recapture provisions may permit the subsequent homebuyer to 
assume the HOME assistance (subject to the HOME requirements for the 
remainder of the period of affordability) if the subsequent homebuyer is 
low-income, and no additional HOME assistance is provided.
    (A) The following options for recapture requirements are acceptable 
to HUD. The participating jurisdiction may adopt, modify or develop its 
own recapture requirements for HUD approval. In establishing its 
recapture requirements, the participating jurisdiction is subject to the 
limitation that when the recapture requirement is triggered by a sale 
(voluntary or involuntary) of the housing unit, the amount recaptured 
cannot exceed the net proceeds, if any. The net proceeds are the sales 
price minus superior loan repayment (other than HOME funds) and any 
closing costs.
    (1) Recapture entire amount. The participating jurisdiction may 
recapture the entire amount of the HOME investment from the homeowner.
    (2) Reduction during affordability period. The participating 
jurisdiction may reduce the HOME investment amount to be recaptured on a 
prorata basis for the time the homeowner has owned and occupied the 
housing measured against the required affordability period.
    (3) Shared net proceeds. If the net proceeds are not sufficient to 
recapture

[[Page 578]]

the full HOME investment (or a reduced amount as provided for in 
paragraph (a)(5)(ii)(A)(2) of this section) plus enable the homeowner to 
recover the amount of the homeowner's downpayment and any capital 
improvement investment made by the owner since purchase, the 
participating jurisdiction may share the net proceeds. The net proceeds 
are the sales price minus loan repayment (other than HOME funds) and 
closing costs. The net proceeds may be divided proportionally as set 
forth in the following mathematical formulas:
[GRAPHIC] [TIFF OMITTED] TC12OC91.007

    (4) Owner investment returned first. The participating jurisdiction 
may permit the homebuyer to recover the homebuyer's entire investment 
(downpayment and capital improvements made by the owner since purchase) 
before recapturing the HOME investment.
    (5) Amount subject to recapture. The HOME investment that is subject 
to recapture is based on the amount of HOME assistance that enabled the 
homebuyer to buy the dwelling unit. This includes any HOME assistance 
that reduced the purchase price from fair market value to an affordable 
price, but excludes the amount between the cost of producing the unit 
and the market value of the property (i.e., the development subsidy). 
The recaptured funds must be used to carry out HOME-eligible activities 
in accordance with the requirements of this part. If the HOME assistance 
is only used for the development subsidy and therefore not subject to 
recapture, the resale option must be used.
    (6) Special considerations for single-family properties with more 
than one unit. If the HOME funds are only used to assist a low-income 
homebuyer to acquire one unit in single-family housing containing more 
than one unit and the assisted unit will be the principal residence of 
the homebuyer, the affordability requirements of this section apply only 
to the assisted unit. If HOME funds are also used to assist the low-
income homebuyer to acquire one or more of the rental units in the 
single-family housing, the affordability requirements of Sec.  92.252 
apply to assisted rental units, except that the participating 
jurisdiction may impose resale or recapture restrictions on all assisted 
units (owner-occupied and rental units) in the single family housing. If 
resale restrictions are used, the affordability requirements on all 
assisted units continue for the period of affordability. If recapture 
restrictions are used, the affordability requirements on the assisted 
rental units may be terminated, at the discretion of the participating 
jurisdiction, upon recapture of the HOME investment. (If HOME funds are 
used to assist only the rental units in such a property then the 
requirements of Sec.  92.252 would apply and the owner-occupied unit 
would not be subject to the income targeting or affordability provisions 
of Sec.  92.254.)
    (7) Lease-purchase. HOME funds may be used to assist homebuyers 
through lease-purchase programs for existing housing and for housing to 
be constructed. The housing must be purchased by a homebuyer within 36 
months of signing the lease'purchase agreement. The homebuyer must 
qualify as a low-income family at the time the lease-purchase agreement 
is signed. If HOME funds are used to acquire housing that will be resold 
to a homebuyer through a lease-purchase program, the HOME affordability 
requirements for rental housing in Sec.  92.252 shall apply if the 
housing is not transferred to a homebuyer within forty-two months after 
project completion.
    (8) Contract to purchase. If HOME funds are used to assist a 
homebuyer

[[Page 579]]

who has entered into a contract to purchase housing to be constructed, 
the homebuyer must qualify as a low-income family at the time the 
contract is signed.
    (9) Preserving affordability of housing that was previously assisted 
with HOME funds.
    (i) To preserve the affordability of HOME-assisted housing a 
participating jurisdiction may use additional HOME funds for the 
following costs:
    (A) The cost to acquire the housing through a purchase option, right 
of first refusal, or other preemptive right before foreclosure, or at 
the foreclosure sale. (The foreclosure costs to acquire housing with a 
HOME loan in default are eligible. However, HOME funds may not be used 
to repay a loan made with HOME funds.)
    (B) The cost to undertake any necessary rehabilitation for the 
housing acquired.
    (C) The cost of owning/holding the housing pending resale to another 
homebuyer.
    (D) The cost to assist another homebuyer in purchasing the housing.
    (ii) When a participating jurisdiction uses HOME funds to preserve 
the affordability of such housing, the additional investment must be 
treated as an amendment to the original project. The housing must be 
sold to a new eligible homebuyer in accordance with the requirements of 
Sec.  92.254(a) within a reasonable period of time.
    (iii) The total amount of the original and additional HOME 
assistance may not exceed the maximum per unit subsidy amount 
established under Sec.  92.250. Alternatively to charging the cost to 
the HOME program under Sec.  92.206, the participating jurisdiction may 
charge the cost to the HOME program under Sec.  92.207 as a reasonable 
administrative cost of its HOME program, so that the additional HOME 
funds for the housing are not subject to the maximum per-unit subsidy 
amount. To the extent administrative funds are used, they may be 
reimbursed, in whole or in part, when the housing is sold to a new 
eligible homebuyer.
    (b) Rehabilitation not involving acquisition. Housing that is 
currently owned by a family qualifies as affordable housing only if:
    (1) The estimated value of the property, after rehabilitation, does 
not exceed 95 percent of the median purchase price for the area, 
described in paragraph (a)(2)(iii) of this section; and
    (2) The housing is the principal residence of an owner whose family 
qualifies as a low-income family at the time HOME funds are committed to 
the housing. In determining the income eligibility of the family, the 
participating jurisdiction must include the income of all persons living 
in the housing.
    (c) Ownership interest. The ownership in the housing assisted under 
this section must meet the definition of ``homeownership'' in Sec.  
92.2, except that housing that is rehabilitated pursuant to paragraph 
(b) of this section may also include inherited property with multiple 
owners, life estates, living trusts and beneficiary deeds under the 
following conditions. The participating jurisdiction has the right to 
establish the terms of assistance.
    (1) Inherited property. Inherited property with multiple owners: 
Housing for which title has been passed to several individuals by 
inheritance, but not all heirs reside in the housing, sharing ownership 
with other nonresident heirs. (The occupant of the housing has a divided 
ownership interest.) The participating jurisdiction may assist the 
owner-occupant if the occupant is low-income, occupies the housing as 
his or her principal residence, and pays all the costs associated with 
ownership and maintenance of the housing (e.g., mortgage, taxes, 
insurance, utilities).
    (2) Life estate. The person who has the life estate has the right to 
live in the housing for the remainder of his or her life and does not 
pay rent. The participating jurisdiction may assist the person holding 
the life estate if the person is low-income and occupies the housing as 
his or her principal residence.
    (3) Inter vivos trust, also known as a living trust. A living trust 
is created during the lifetime of a person. A living trust is created 
when the owner of property conveys his or her property to a trust for 
his or her own benefit or for that of a third party (the beneficiaries). 
The trust holds legal title and the beneficiary holds equitable

[[Page 580]]

title. The person may name him or herself as the beneficiary. The 
trustee is under a fiduciary responsibility to hold and manage the trust 
assets for the beneficiary. The participating jurisdiction may assist if 
all beneficiaries of the trust qualify as a low-income family and occupy 
the property as their principal residence (except that contingent 
beneficiaries, who receive no benefit from the trust nor have any 
control over the trust assets until the beneficiary is deceased, need 
not be low-income). The trust must be valid and enforceable and ensure 
that each beneficiary has the legal right to occupy the property for the 
remainder of his or her life.
    (4) Beneficiary deed. A beneficiary deed conveys an interest in real 
property, including any debt secured by a lien on real property, to a 
grantee beneficiary designated by the owner and that expressly states 
that the deed is effective on the death of the owner. Upon the death of 
the owner, the grantee beneficiary receives ownership in the property, 
subject to all conveyances, assignments, contracts, mortgages, deeds of 
trust, liens, security pledges, and other encumbrances made by the owner 
or to which the owner was subject during the owner's lifetime. The 
participating jurisdiction may assist if the owner qualifies as low-
income and the owner occupies the property as his or her principal 
residence.
    (d) New construction without acquisition. Newly constructed housing 
that is built on property currently owned by a family which will occupy 
the housing upon completion, qualifies as affordable housing if it meets 
the requirements under paragraph (a) of this section.
    (e) Providing homeownership assistance through lenders. Subject to 
the requirements of this paragraph (e), the participating jurisdiction 
may provide homeownership assistance through for-profit or nonprofit 
lending institutions that provide the first mortgage loan to a low-
income family.
    (1) The homeownership assistance may be provided only as specified 
in a written agreement between the participating jurisdiction and the 
lender. The written agreement must specify the forms and amounts of 
homeownership assistance that the participating jurisdiction authorizes 
the lender to provide to families and any conditions that apply to the 
provision of such homeownership assistance.
    (2) Before the lender provides any homeownership assistance to a 
family, the participating jurisdiction must verify that the family is 
low-income and must inspect the housing for compliance with the property 
standards in Sec.  92.251.
    (3) No fees (e.g., origination fees or points) may be charged to a 
family for the HOME homeownership assistance provided pursuant to this 
paragraph (e), and the participating jurisdiction must determine that 
the fees and other amounts charged to the family by the lender for the 
first mortgage financing are reasonable. Reasonable administrative costs 
may be charged to the HOME program as a project cost. If the 
participating jurisdiction requires lenders to pay a fee to participate 
in the HOME program, the fee is program income to the HOME program.
    (4) If the nonprofit lender is a subrecipient or contractor that is 
receiving HOME assistance to determine that the family is eligible for 
homeownership assistance, but the participating jurisdiction or another 
entity is making the assistance to the homebuyer (e.g., signing the 
documents for the loan or the grant), the requirements of paragraphs 
(e)(2) and (3) of this section are applicable.
    (f) Homebuyer program policies. The participating jurisdiction must 
have and follow written policies for:
    (1) Underwriting standards for homeownership assistance that 
evaluate housing debt and overall debt of the family, the 
appropriateness of the amount of assistance, monthly expenses of the 
family, assets available to acquire the housing, and financial resources 
to sustain homeownership;
    (2) Responsible lending, and
    (3) Refinancing loans to which HOME loans are subordinated to ensure 
that

[[Page 581]]

the terms of the new loan are reasonable.

[61 FR 48750, Sept. 16, 1996, as amended at 67 FR 61756, Oct. 1, 2002; 
68 FR 10161, Mar. 4, 2003; 69 FR 16766, Mar. 30, 2004; 69 FR 68052, Nov. 
22, 2004; 72 FR 16685, Apr. 4, 2007; 78 FR 44674, July 24, 2013]



Sec.  92.255  Converting rental units to homeownership units for
existing tenants.

    (a) The participating jurisdiction may permit the owner of HOME-
assisted rental units to convert the rental units to homeownership units 
by selling, donating, or otherwise conveying the units to the existing 
tenants to enable the tenants to become homeowners in accordance with 
the requirements of Sec.  92.254. However, refusal by the tenant to 
purchase the housing does not constitute grounds for eviction or for 
failure to renew the lease.
    (b) If no additional HOME funds are used to enable the tenants to 
become homeowners, the homeownership units are subject to a minimum 
period of affordability equal to the remaining affordable period if the 
units continued as rental units. If additional HOME funds are used to 
directly assist the tenants to become homeowners, the minimum period of 
affordability is the affordability period under Sec.  92.254(a)(4), 
based on the amount of direct homeownership assistance provided.

[78 FR 44676, July 24, 2013]



Sec.  92.256  [Reserved]



Sec.  92.257  Equal participation of faith-based organizations.

    The HUD program requirements in Sec.  5.109 apply to the HOME 
program, including the requirements regarding disposition and change in 
use of real property by a faith-based organization.

[81 FR 19418, Apr. 4, 2016]



Sec.  92.258  Elder cottage housing opportunity (ECHO) units.

    (a) General. HOME funds may be used for the initial purchase and 
initial placement costs of elder cottage housing opportunity (ECHO) 
units that meet the requirements of this section, and that are small, 
free-standing, barrier-free, energy-efficient, removable, and designed 
to be installed adjacent to existing single-family dwellings.
    (b) Eligible owners. The owner of a HOME-assisted ECHO unit may be:
    (1) The owner-occupant of the single-family host property on which 
the ECHO unit will be located;
    (2) A participating jurisdiction; or
    (3) A non-profit organization.
    (c) Eligible tenants. During the affordability period, the tenant of 
a HOME-assisted ECHO unit must be an elderly or disabled family as 
defined in 24 CFR 5.403 and must also be a low-income family.
    (d) Applicable requirements. The requirements of Sec.  92.252 apply 
to HOME-assisted ECHO units, with the following modifications:
    (1) Only one ECHO unit may be provided per host property.
    (2) The ECHO unit owner may choose whether or not to charge the 
tenant of the ECHO unit rent, but if a rent is charged, it must meet the 
requirements of Sec.  92.252.
    (3) The ECHO housing must remain affordable for the period specified 
in Sec.  92.252(e). If within the affordability period the original 
occupant no longer occupies the unit, the ECHO unit owner must:
    (i) Rent the unit to another eligible occupant on site;
    (ii) Move the ECHO unit to another site for occupancy by an eligible 
occupant; or
    (iii) If the owner of the ECHO unit is the host property owner-
occupant, the owner may repay the HOME funds in accordance with the 
recapture provisions imposed by the participating jurisdiction 
consistent with Sec.  92.254(a)(5)(ii). The participating jurisdiction 
must use the recaptured HOME funds for additional HOME activities.
    (4) The participating jurisdiction has the responsibility to enforce 
the project requirements applicable to ECHO units.

[[Page 582]]



          Subpart G_Community Housing Development Organizations



Sec.  92.300  Set-aside for community housing development organizations
(CHDOs).

    (a) Within 24 months after the date that HUD notifies the 
participating jurisdiction of HUD's execution of the HOME Investment 
Partnerships Agreement, the participating jurisdiction must reserve not 
less than 15 percent of the HOME allocation for investment only in 
housing to be owned, developed or sponsored by community housing 
development organizations. For a State, the HOME allocation includes 
funds reallocated under Sec.  92.451(c)(2)(i) and, for a unit of general 
local government, includes funds transferred from a State under Sec.  
92.102(b). The participating jurisdiction must certify the organization 
as meeting the definition of ``community housing development 
organization'' and must document that the organization has capacity to 
own, develop, or sponsor housing each time it commits funds to the 
organization. For purposes of this paragraph:
    (1) Funds are reserved when a participating jurisdiction enters into 
a written agreement with the community housing development organization 
(or project owner as described in paragraph (a)(4) of this section) 
committing the funds to a specific local project in accordance with 
paragraph (2) of the definition of ``commitment'' in Sec.  92.2.
    (2) Rental housing is ``owned'' by the community housing development 
organization if the community housing development organization is the 
owner in fee simple absolute of multifamily or single family housing (or 
has a long term ground lease) for rental to low-income families in 
accordance with Sec.  92.252. If the housing is to be rehabilitated or 
constructed, the community housing development organization hires and 
oversees the developer that rehabilitates or constructs the housing. At 
minimum, the community housing development organization must hire or 
contract with an experienced project manager to oversee all aspects of 
the development, including obtaining zoning, securing non-HOME 
financing, selecting a developer or general contractor, overseeing the 
progress of the work and determining the reasonableness of costs. The 
community housing development organization must own the rental housing 
during development and for a period at least equal to the period of 
affordability in Sec.  92.252. If the CHDO acquires housing that meets 
the property standards in Sec.  92.251, the CHDO must own the rental 
housing for a period at least equal to the period of affordability in 
Sec.  92.252.
    (3) Rental housing is ``developed'' by the community development 
housing organization if the community housing development organization 
is the owner of multifamily or single family housing in fee simple 
absolute (or has a long term ground lease) and the developer of new 
housing that will be constructed or existing substandard housing that 
will be rehabilitated for rent to low-income families in accordance with 
Sec.  92.252. To be the ``developer,'' the community development housing 
organization must be in sole charge of all aspects of the development 
process, including obtaining zoning, securing non-HOME financing, 
selecting architects, engineers and general contractors, overseeing the 
progress of the work and determining the reasonableness of costs. At a 
minimum, the community housing development organization must own the 
housing during development and for a period at least equal to the period 
of affordability in Sec.  92.252.
    (4) Rental housing is ``sponsored'' by the community development 
housing organization if it is rental housing ``owned'' or ``developed'' 
by a subsidiary of a community housing development organization, a 
limited partnership of which the community housing development 
organization or its subsidiary is the sole general partner, or a limited 
liability company of which the community housing development 
organization or its subsidiary is the sole managing member.
    (i) The subsidiary of the community housing development organization 
may be a for-profit or nonprofit organization and must be wholly owned 
by the community housing development organization. If the limited 
partnership or limited liability company agreement permits the community 
housing development organization to be removed as

[[Page 583]]

general partner or sole managing member, the agreement must provide that 
the removal must be for cause and that the community housing development 
organization must be replaced with another community housing development 
organization.
    (ii) The HOME funds must be provided to the entity that owns the 
project.
    (5) HOME-assisted rental housing is also ``sponsored'' by a 
community housing development organization if the community housing 
development organization ``developed'' the rental housing project that 
it agrees to convey to an identified private nonprofit organization at a 
predetermined time after completion of the development of the project. 
Sponsored rental housing, as provided in this paragraph (a)(5), is 
subject to the following requirements:
    (i) The private nonprofit organization may not be created by a 
governmental entity.
    (ii) The HOME funds must be invested in the project that is owned by 
the community housing development organization.
    (iii) Before commitment of HOME funds, the community housing 
development organization sponsor must select the nonprofit organization 
that will obtain ownership of the property.
    (A) The nonprofit organization assumes the community housing 
development organization's HOME obligations (including any repayment of 
loans) for the rental project at a specified time after completion of 
development.
    (B) If the housing is not transferred to the nonprofit organization, 
the community housing development organization sponsor remains 
responsible for the HOME assistance and the HOME project.
    (6) Housing for homeownership is ``developed'' by the community 
development housing organization if the community housing development 
organization is the owner (in fee simple absolute) and developer of new 
housing that will be constructed or existing substandard housing that 
will be rehabilitated for sale to low-income families in accordance with 
Sec.  92.254.
    (i) To be the ``developer'' the community development housing 
organization must arrange financing of the project and be in sole charge 
of construction. The community housing development organization may 
provide direct homeownership assistance (e.g., downpayment assistance) 
when it sells the housing to low-income families and the community 
housing development organization will not be considered a subrecipient. 
The HOME funds for downpayment assistance shall not be greater than 10 
percent of the amount of HOME funds for development of the housing.
    (ii) The participating jurisdiction must determine and set forth in 
its written agreement with the community housing development 
organization the actual sales prices of the housing or the method by 
which the sales prices for the housing will be established and whether 
the proceeds must be returned to the participating jurisdiction or may 
be retained by the community housing development organization.
    (A) While proceeds that the participating jurisdiction permits the 
community housing development organization to retain are not subject to 
the requirements of this part, the participating jurisdiction must 
specify in the written agreement with the community housing development 
organization whether the proceeds are to be used for HOME-eligible 
activities or other housing activities to benefit low-income families.
    (B) Funds that are recaptured because the housing no longer meets 
the affordability requirements under Sec.  92.254(a)(5)(ii) are subject 
to the requirements of this part in accordance with Sec.  92.503.
    (7) The participating jurisdiction determines the form of assistance 
(e.g., grant or loan) that it will provide to the community housing 
development organization receives or, for rental housing projects under 
paragraph (a)(4) of this section, to the entity that owns the project.
    (b) Each participating jurisdiction must make reasonable efforts to 
identify community housing development organizations that are capable, 
or can reasonably be expected to become capable, of carrying out 
elements of the jurisdiction's approved consolidated plan and to 
encourage such community housing development organizations to

[[Page 584]]

do so. If during the first 24 months of its participation in the HOME 
Program a participating jurisdiction cannot identify a sufficient number 
of capable community housing development organizations, up to 20 percent 
of the minimum community housing development organization setaside of 15 
percent specified in paragraph (a) of this section, above, (but not more 
than $150,000 during the 24 month period) may be committed to develop 
the capacity of community housing development organizations in the 
jurisdiction.
    (c) Up to 10 percent of the HOME funds reserved under this section 
may be used for activities specified under Sec.  92.301.
    (d) HOME funds required to be reserved under this section are 
subject to reduction, as provided in Sec.  92.500(d).
    (e) If funds for operating expenses are provided under Sec.  92.208 
to a community housing development organization that is not also 
receiving funds under paragraph (a) of this section for housing to be 
owned, developed or sponsored by the community housing development 
organization, the participating jurisdiction's written agreement with 
the community housing development organization must provide that the 
community housing development organization is expected to receive funds 
under paragraph (a) of this section for a project within 24 months of 
the date of receiving the funds for operating expenses, and specifies 
the terms and conditions upon which this expectation is based.
    (f) The participating jurisdiction must ensure that a community 
housing development organization does not receive HOME funding for any 
fiscal year in an amount that provides more than 50 percent or $50,000, 
whichever is greater, of the community housing development 
organization's total operating expenses in that fiscal year. This also 
includes organizational support and housing education provided under 
section 233(b)(1), (2), and (6) of the Act, as well as funds for 
operating expenses provided under Sec.  92.208.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28930, May 28, 1997; 
78 FR 44677, July 24, 2013]



Sec.  92.301  Project-specific assistance to community housing 
development organizations.

    (a) Project-specific technical assistance and site control loans--
(1) General. Within the percentage specified in Sec.  92.300(c), HOME 
funds may be used by a participating jurisdiction to provide technical 
assistance and site control loans to community housing development 
organizations in the early stages of site development for an eligible 
project. These loans may not exceed amounts that the participating 
jurisdiction determines to be customary and reasonable project 
preparation costs allowable under paragraph (a)(2) of this section. All 
costs must be related to a specific eligible project or projects.
    (2) Allowable costs. A loan may be provided to cover project costs 
necessary to determine project feasibility (including costs of an 
initial feasibility study), consulting fees, costs of preliminary 
financial applications, legal fees, architectural fees, engineering 
fees, engagement of a development team, option to acquire property, site 
control and title clearance. General operational expenses of the 
community housing development organization are not allowable costs.
    (3) Repayment. The community housing development organization must 
repay the loan to the participating jurisdiction from construction loan 
proceeds or other project income. The participating jurisdiction may 
waive repayment of the loan, in part or in whole, if there are 
impediments to project development that the participating jurisdiction 
determines are reasonably beyond the control of the borrower.
    (b) Project-specific seed money loans--(1) General. Within the 
percentage specified in Sec.  92.300(c), HOME funds may be used to 
provide loans to community housing development organizations to cover 
preconstruction project costs that the participating jurisdiction 
determines to be customary and reasonable, including, but not limited to 
the costs of obtaining firm construction loan commitments, architectural 
plans and specifications, zoning approvals, engineering studies, and 
legal fees.

[[Page 585]]

    (2) Eligible sponsors. A loan may be provided only to a community 
housing development organization that has, with respect to the project 
concerned, site control (evidenced by a deed, a sales contract, or an 
option contract to acquire the property), a preliminary financial 
commitment, and a capable development team.
    (3) Repayment. The community housing development organization must 
repay the loan to the participating jurisdiction from construction loan 
proceeds or other project income. The participating jurisdiction may 
waive repayment of the loan, in whole or in part, if there are 
impediments to project development that the participating jurisdiction 
determines are reasonably beyond the control of the community housing 
development organization.



Sec.  92.302  Housing education and organizational support.

    HUD is authorized to provide education and organizational support 
assistance, in conjunction with HOME funds made available to community 
housing development organizations in accordance with section 233 of the 
Act. HUD will publish a notice in the Federal Register announcing the 
availability of funding under this section, as appropriate. The notice 
need not include funding for each of the eligible activities, but may 
target funding from among the eligible activities.



Sec.  92.303  Tenant participation plan.

    A community housing development organization that receives 
assistance under this part must adhere to a fair lease and grievance 
procedure approved by the participating jurisdiction and provide a plan 
for and follow a program of tenant participation in management 
decisions.



                  Subpart H_Other Federal Requirements



Sec.  92.350  Other Federal requirements and nondiscrimination.

    (a) The Federal requirements set forth in 24 CFR part 5, subpart A, 
are applicable to participants in the HOME program. The requirements of 
this subpart include: nondiscrimination and equal opportunity; 
disclosure requirements; debarred, suspended or ineligible contractors; 
drug-free work; and housing counseling.
    (b) The nondiscrimination requirements at section 282 of the Act are 
applicable. These requirements are waived in connection with the use of 
HOME funds on lands set aside under the Hawaiian Homes Commission Act, 
1920 (42 Stat. 108).

[62 FR 28930, May 28, 1997, as amended at 81 FR 90657, Dec. 14, 2016]



Sec.  92.351  Affirmative marketing; minority outreach program.

    (a) Affirmative marketing. (1) Each participating jurisdiction must 
adopt and follow affirmative marketing procedures and requirements for 
rental and homebuyer projects containing five or more HOME-assisted 
housing units. Affirmative marketing requirements and procedures also 
apply to all HOME- funded programs, including, but not limited to, 
tenant-based rental assistance and downpayment assistance programs. 
Affirmative marketing steps consist of actions to provide information 
and otherwise attract eligible persons in the housing market area to the 
available housing without regard to race, color, national origin, sex, 
religion, familial status, or disability. If participating 
jurisdiction's written agreement with the project owner permits the 
rental housing project to limit tenant eligibility or to have a tenant 
preference in accordance with Sec.  92.253(d)(3), the participating 
jurisdiction must have affirmative marketing procedures and requirements 
that apply in the context of the limited/preferred tenant eligibility 
for the project.
    (2) The affirmative marketing requirements and procedures adopted 
must include:
    (i) Methods for informing the public, owners, and potential tenants 
about Federal fair housing laws and the participating jurisdiction's 
affirmative marketing policy (e.g., the use of the Equal Housing 
Opportunity logotype or slogan in press releases and solicitations for 
owners, and written communication to fair housing and other groups);
    (ii) Requirements and practices each subrecipient and owner must 
adhere to

[[Page 586]]

in order to carry out the participating jurisdiction's affirmative 
marketing procedures and requirements (e.g., use of commercial media, 
use of community contacts, use of the Equal Housing Opportunity logotype 
or slogan, and display of fair housing poster);
    (iii) Procedures to be used by subrecipients and owners to inform 
and solicit applications from persons in the housing market area who are 
not likely to apply for the housing program or the housing without 
special outreach (e.g., through the use of community organizations, 
places of worship, employment centers, fair housing groups, or housing 
counseling agencies);
    (iv) Records that will be kept describing actions taken by the 
participating jurisdiction and by subrecipients and owners to 
affirmatively market the program and units and records to assess the 
results of these actions; and
    (v) A description of how the participating jurisdiction will 
annually assess the success of affirmative marketing actions and what 
corrective actions will be taken where affirmative marketing 
requirements are not met.
    (3) A State that distributes HOME funds to units of general local 
government must require each unit of general local government to adopt 
affirmative marketing procedures and requirements that meet the 
requirement in paragraphs (a) and (b) of this section.
    (b) Minority outreach. A participating jurisdiction must prescribe 
procedures acceptable to HUD to establish and oversee a minority 
outreach program within its jurisdiction to ensure the inclusion, to the 
maximum extent possible, of minorities and women, and entities owned by 
minorities and women, including, without limitation, real estate firms, 
construction firms, appraisal firms, management firms, financial 
institutions, investment banking firms, underwriters, accountants, and 
providers of legal services, in all contracts entered into by the 
participating jurisdiction with such persons or entities, public and 
private, in order to facilitate the activities of the participating 
jurisdiction to provide affordable housing authorized under this Act or 
any other Federal housing law applicable to such jurisdiction. Section 
200.321 of title 2 Code of Federal Regulations describes actions to be 
taken by a participating jurisdiction to assure that minority business 
enterprises and women business enterprises are used when possible in the 
procurement of property and services.

[61 FR 48750, Sept. 16, 1996, as amended at 78 FR 44678, July 24, 2013; 
80 FR 75935, Dec. 7, 2015]



Sec.  92.352  Environmental review.

    (a) General. The environmental effects of each activity carried out 
with HOME funds must be assessed in accordance with the provisions of 
the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321) 
and the related authorities listed in HUD's implementing regulations at 
24 CFR parts 50 and 58. The applicability of the provisions of 24 CFR 
part 50 or part 58 is based on the HOME project (new construction, 
rehabilitation, acquisition) or activity (tenant-based rental 
assistance) as a whole, not on the type of the cost paid with HOME 
funds.
    (b) Responsibility for review. (1) The jurisdiction (e.g., the 
participating jurisdiction or State recipient) or insular area must 
assume responsibility for environmental review, decisionmaking, and 
action for each activity that it carries out with HOME funds, in 
accordance with the requirements imposed on a recipient under 24 CFR 
part 58. No funds may be committed to a HOME activity or project before 
the completion of the environmental review and approval of the request 
for release of funds and related certification, except as authorized by 
24 CFR part 58.
    (2) A State participating jurisdiction must also assume 
responsibility for approval of requests for release of HOME funds 
submitted by State recipients.
    (3) HUD will perform the environmental review, in accordance with 24 
CFR part 50, for a competitively awarded application for HOME funds 
submitted to HUD by an entity that is not a jurisdiction.

[61 FR 48750, Sept. 16, 1996, as amended at 78 FR 44678, July 24, 2013]

[[Page 587]]



Sec.  92.353  Displacement, relocation, and acquisition.

    (a) Minimizing displacement. Consistent with the other goals and 
objectives of this part, the participating jurisdiction must ensure that 
it has taken all reasonable steps to minimize the displacement of 
persons (families, individuals, businesses, nonprofit organizations, and 
farms) as a result of a project assisted with HOME funds. To the extent 
feasible, residential tenants must be provided a reasonable opportunity 
to lease and occupy a suitable, decent, safe, sanitary, and affordable 
dwelling unit in the building/complex upon completion of the project.
    (b) Temporary relocation. The following policies cover residential 
tenants who will not be required to move permanently but who must 
relocate temporarily for the project. Such tenants must be provided:
    (1) Reimbursement for all reasonable out-of-pocket expenses incurred 
in connection with the temporary relocation, including the cost of 
moving to and from the temporarily occupied housing and any increase in 
monthly rent/utility costs.
    (2) Appropriate advisory services, including reasonable advance 
written notice of:
    (i) The date and approximate duration of the temporary relocation;
    (ii) The location of the suitable, decent, safe, and sanitary 
dwelling to be made available for the temporary period;
    (iii) The terms and conditions under which the tenant may lease and 
occupy a suitable, decent, safe, and sanitary dwelling in the building/
complex upon completion of the project; and
    (iv) The provisions of paragraph (b)(1) of this section.
    (c) Relocation assistance for displaced persons--(1) General. A 
displaced person (defined in paragraph (c)(2) of this section) must be 
provided relocation assistance at the levels described in, and in 
accordance with the requirements of the Uniform Relocation Assistance 
and Real Property Acquisition Policies Act of 1970 (URA) (42 U.S.C. 
4201-4655) and 49 CFR part 24. A ``displaced person'' must be advised of 
his or her rights under the Fair Housing Act and, if the comparable 
replacement dwelling used to establish the amount of the replacement 
housing payment to be provided to a minority person is located in an 
area of minority concentration, the minority person also must be given, 
if possible, referrals to comparable and suitable, decent, safe, and 
sanitary replacement dwellings not located in such areas.
    (2) Displaced Person. (i) For purposes of paragraph (c) of this 
section, the term displaced person means a person (family individual, 
business, nonprofit organization, or farm, including any corporation, 
partnership or association) that moves from real property or moves 
personal property from real property, permanently, as a direct result of 
acquisition, rehabilitation, or demolition for a project assisted with 
HOME funds. This includes any permanent, involuntary move for an 
assisted project, including any permanent move from the real property 
that is made:
    (A) After notice by the owner to move permanently from the property, 
if the move occurs on or after:
    (1) The date of the submission of an application to the 
participating jurisdiction or HUD, if the applicant has site control and 
the application is later approved; or
    (2) The date the jurisdiction approves the applicable site, if the 
applicant does not have site control at the time of the application; or
    (B) Before the date described in paragraph (c)(2)(i)(A) of this 
section, if the jurisdiction or HUD determines that the displacement 
resulted directly from acquisition, rehabilitation, or demolition for 
the project; or
    (C) By a tenant-occupant of a dwelling unit, if any one of the 
following three situations occurs:
    (1) The tenant moves after execution of the agreement covering the 
acquisition, rehabilitation, or demolition and the move occurs before 
the tenant is provided written notice offering the tenant the 
opportunity to lease and occupy a suitable, decent, safe, and sanitary 
dwelling in the same building/complex upon completion of the project 
under reasonable terms and conditions. Such reasonable terms and 
conditions must include a term of at least one year at a monthly rent 
and

[[Page 588]]

estimated average monthly utility costs that do not exceed the greater 
of:
    (i) The tenant's monthly rent before such agreement and estimated 
average monthly utility costs; or
    (ii) The total tenant payment, as determined under 24 CFR 5.628, if 
the tenant is low-income, or 30 percent of gross household income, if 
the tenant is not low-income;
    (2) The tenant is required to relocate temporarily, does not return 
to the building/complex, and either
    (i) The tenant is not offered payment for all reasonable out-of-
pocket expenses incurred in connection with the temporary relocation; or
    (ii) Other conditions of the temporary relocation are not 
reasonable; or
    (3) The tenant is required to move to another dwelling unit in the 
same building/complex but is not offered reimbursement for all 
reasonable out-of-pocket expenses incurred in connection with the move, 
or other conditions of the move are not reasonable.
    (ii) Notwithstanding paragraph (c)(2)(i) of this section, a person 
does not qualify as a displaced person if:
    (A) The person has been evicted for cause based upon a serious or 
repeated violation of the terms and conditions of the lease or occupancy 
agreement, violation of applicable federal, State or local law, or other 
good cause, and the participating jurisdiction determines that the 
eviction was not undertaken for the purpose of evading the obligation to 
provide relocation assistance. The effective date of any termination or 
refusal to renew must be preceded by at least 30 days advance written 
notice to the tenant specifying the grounds for the action.
    (B) The person moved into the property after the submission of the 
application but, before signing a lease and commencing occupancy, was 
provided written notice of the project, its possible impact on the 
person (e.g., the person may be displaced, temporarily relocated, incur 
a rent increase), and the fact that the person would not qualify as a 
``displaced person'' (or for any assistance under this section) as a 
result of the project;
    (C) The person is ineligible under 49 CFR 24.2(g)(2); or
    (D) HUD determines that the person was not displaced as a direct 
result of acquisition, rehabilitation, or demolition for the project.
    (iii) The jurisdiction may, at any time, ask HUD to determine 
whether a displacement is or would be covered by this rule.
    (3) Initiation of negotiations. For purposes of determining the 
formula for computing replacement housing assistance to be provided 
under paragraph (c) of this section to a tenant displaced from a 
dwelling as a direct result of private-owner rehabilitation, demolition 
or acquisition of the real property, the term initiation of negotiations 
means the execution of the agreement covering the acquisition, 
rehabilitation, or demolition.
    (d) Optional relocation assistance. The participating jurisdiction 
may provide relocation payments and other relocation assistance to 
families, individuals, businesses, nonprofit organizations, and farms 
displaced by a project assisted with HOME funds where the displacement 
is not subject to paragraph (c) of this section. The jurisdiction may 
also provide relocation assistance to persons covered under paragraph 
(c) of this section beyond that required. For any such assistance that 
is not required by State or local law, the jurisdiction must adopt a 
written policy available to the public that describes the optional 
relocation assistance that it has elected to furnish and provides for 
equal relocation assistance within each class of displaced persons.
    (e) Residential antidisplacement and relocation assistance plan. The 
participating jurisdiction shall comply with the requirements of 24 CFR 
part 42, subpart C.
    (f) Real property acquisition requirements. The acquisition of real 
property for a project is subject to the URA and the requirements of 49 
CFR part 24, subpart B.
    (g) Appeals. A person who disagrees with the participating 
jurisdiction's determination concerning whether the person qualifies as 
a displaced person, or the amount of relocation assistance for which the 
person may be eligible, may file a written appeal of that determination 
with the jurisdiction. A low-income person who is dissatisfied with

[[Page 589]]

the jurisdiction's determination on his or her appeal may submit a 
written request for review of that determination to the HUD Field 
Office.

[61 FR 48750, Sept. 16, 1996, as amended at 61 FR 51760, Oct. 3, 1996; 
62 FR 28930, May 28, 1997; 67 FR 61756, Oct. 1, 2002; 78 FR 44678, July 
24, 2013]



Sec.  92.354  Labor.

    (a) General. (1) Every contract for the construction (rehabilitation 
or new construction) of housing that includes 12 or more units assisted 
with HOME funds must contain a provision requiring the payment of not 
less than the wages prevailing in the locality, as predetermined by the 
Secretary of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 3141), to 
all laborers and mechanics employed in the development of any part of 
the housing. Such contracts must also be subject to the overtime 
provisions, as applicable, of the Contract Work Hours and Safety 
Standards Act (40 U.S.C. 3701).
    (2) The contract for construction must contain these wage provisions 
if HOME funds are used for any project costs in Sec.  92.206, including 
construction or nonconstruction costs, of housing with 12 or more HOME-
assisted units. When HOME funds are only used to assist homebuyers to 
acquire single-family housing, and not for any other project costs, the 
wage provisions apply to the construction of the housing if there is a 
written agreement with the owner or developer of the housing that HOME 
funds will be used to assist homebuyers to buy the housing and the 
construction contract covers 12 or more housing units to be purchased 
with HOME assistance. The wage provisions apply to any construction 
contract that includes a total of 12 or more HOME-assisted units, 
whether one or more than one project is covered by the construction 
contract. Once they are determined to be applicable, the wage provisions 
must be contained in the construction contract so as to cover all 
laborers and mechanics employed in the development of the entire 
project, including portions other than the assisted units. Arranging 
multiple construction contracts within a single project for the purpose 
of avoiding the wage provisions is not permitted.
    (3) Participating jurisdictions, contractors, subcontractors, and 
other participants must comply with regulations issued under these acts 
and with other Federal laws and regulations pertaining to labor 
standards, as applicable. Participating jurisdictions shall be 
responsible for ensuring compliance by contractors and subcontractors 
with labor standards described in this section. In accordance with 
procedures specified by HUD, participating jurisdictions shall:
    (i) Ensure that bid and contract documents contain required labor 
standards provisions and the appropriate Department of Labor wage 
determinations;
    (ii) Conduct on-site inspections and employee interviews;
    (iii) Collect and review certified weekly payroll reports;
    (iv) Correct all labor standards violations promptly;
    (v) Maintain documentation of administrative and enforcement 
activities; and
    (vi) Require certification as to compliance with the provisions of 
this section before making any payment under such contracts.
    (b) Volunteers. The prevailing wage provisions of paragraph (a) of 
this section do not apply to an individual who receives no compensation 
or is paid expenses, reasonable benefits, or a nominal fee to perform 
the services for which the individual volunteered and who is not 
otherwise employed at any time in the construction work. See 24 CFR part 
70.
    (c) Sweat equity. The prevailing wage provisions of paragraph (a) of 
this section do not apply to members of an eligible family who provide 
labor in exchange for acquisition of a property for homeownership or 
provide labor in lieu of, or as a supplement to, rent payments.

[61 FR 48750, Sept. 16, 1996, as amended at 78 FR 44678, July 24, 2013]



Sec.  92.355  Lead-based paint.

    Housing assisted with HOME funds is subject to the Lead-Based Paint 
Poisoning Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-
Based Paint Hazard Reduction Act of 1992 (42 U.S.C.

[[Page 590]]

4851-4856), and implementing regulations at part 35, subparts A, B, J, 
K, M and R of this title.

[64 FR 50224, Sept. 15, 1999]



Sec.  92.356  Conflict of interest.

    (a) Applicability. In the procurement of property and services by 
participating jurisdictions, State recipients, and subrecipients, the 
conflict of interest provisions in 2 CFR 200.317 and 2 CFR 200.318, 
apply. In all cases not governed by 2 CFR 200.317 and 2 CFR 200.318, the 
provisions of this section apply.
    (b) Conflicts prohibited. No persons described in paragraph (c) of 
this section who exercise or have exercised any functions or 
responsibilities with respect to activities assisted with HOME funds or 
who are in a position to participate in a decision-making process or 
gain inside information with regard to these activities may obtain a 
financial interest or financial benefit from a HOME-assisted activity, 
or have a financial interest in any contract, subcontract, or agreement 
with respect to the HOME-assisted activity, or the proceeds from such 
activity, either for themselves or those with whom they have business or 
immediate family ties, during their tenure or for one year thereafter. 
Immediate family ties include (whether by blood, marriage or adoption) 
the spouse, parent (including a stepparent), child (including a 
stepchild), brother, sister (including a stepbrother or stepsister), 
grandparent, grandchild, and in-laws of a covered person.
    (c) Persons covered. The conflict of interest provisions of 
paragraph (b) of this section apply to any person who is an employee, 
agent, consultant, officer, or elected official or appointed official of 
the participating jurisdiction, State recipient, or subrecipient which 
are receiving HOME funds.
    (d) Exceptions: Threshold requirements. Upon the written request of 
the participating jurisdiction, HUD may grant an exception to the 
provisions of paragraph (b) of this section on a case-by-case basis when 
it determines that the exception will serve to further the purposes of 
the HOME Investment Partnerships Program and the effective and efficient 
administration of the participating jurisdiction's program or project. 
An exception may be considered only after the participating jurisdiction 
has provided the following:
    (1) A disclosure of the nature of the conflict, accompanied by an 
assurance that there has been public disclosure of the conflict and a 
description of how the public disclosure was made; and
    (2) An opinion of the participating jurisdiction's or State 
recipient's attorney that the interest for which the exception is sought 
would not violate State or local law.
    (e) Factors to be considered for exceptions. In determining whether 
to grant a requested exception after the participating jurisdiction has 
satisfactorily met the requirements of paragraph (d) of this section, 
HUD will consider the cumulative effect of the following factors, where 
applicable:
    (1) Whether the exception would provide a significant cost benefit 
or an essential degree of expertise to the program or project which 
would otherwise not be available;
    (2) Whether the person affected is a member of a group or class of 
low-income persons intended to be the beneficiaries of the assisted 
activity, and the exception will permit such person to receive generally 
the same interests or benefits as are being made available or provided 
to the group or class;
    (3) Whether the affected person has withdrawn from his or her 
functions or responsibilities, or the decisionmaking process with 
respect to the specific assisted activity in question;
    (4) Whether the interest or benefit was present before the affected 
person was in a position as described in paragraph (c) of this section;
    (5) Whether undue hardship will result either to the participating 
jurisdiction or the person affected when weighed against the public 
interest served by avoiding the prohibited conflict; and
    (6) Any other relevant considerations.
    (f) Owners and developers. (1) No owner, developer, or sponsor of a 
project assisted with HOME funds (or officer, employee, agent, elected 
or appointed official, or consultant of the owner, developer, or sponsor 
or immediate family member or immediate

[[Page 591]]

family member of an officer, employee, agent, elected or appointed 
official, or consultant of the owner, developer, or sponsor) whether 
private, for-profit or nonprofit (including a community housing 
development organization (CHDO) when acting as an owner, developer, or 
sponsor) may occupy a HOME-assisted affordable housing unit in a project 
during the required period of affordability specified in Sec.  92.252(e) 
or Sec.  92.254(a)(4). This provision does not apply to an individual 
who receives HOME funds to acquire or rehabilitate his or her principal 
residence or to an employee or agent of the owner or developer of a 
rental housing project who occupies a housing unit as the project 
manager or maintenance worker.
    (2) Exceptions. Upon written request of a housing owner or 
developer, the participating jurisdiction (or State recipient, if 
authorized by the State participating jurisdiction) may grant an 
exception to the provisions of paragraph (f)(1) of this section on a 
case-by-case basis when it determines that the exception will serve to 
further the purposes of the HOME program and the effective and efficient 
administration of the owner's or developer's HOME-assisted project. In 
determining whether to grant a requested exception, the participating 
jurisdiction shall consider the following factors:
    (i) Whether the person receiving the benefit is a member of a group 
or class of low-income persons intended to be the beneficiaries of the 
assisted housing, and the exception will permit such person to receive 
generally the same interests or benefits as are being made available or 
provided to the group or class;
    (ii) Whether the person has withdrawn from his or her functions or 
responsibilities, or the decisionmaking process with respect to the 
specific assisted housing in question;
    (iii) Whether the tenant protection requirements of Sec.  92.253 are 
being observed;
    (iv) Whether the affirmative marketing requirements of Sec.  92.351 
are being observed and followed; and
    (v) Any other factor relevant to the participating jurisdiction's 
determination, including the timing of the requested exception.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28930, May 28, 1997; 
78 FR 44679, July 24, 2013; 80 FR 75935, Dec. 7, 2015]



Sec.  92.357  Executive Order 12372.

    (a) General. Executive Order 12372, as amended by Executive Order 
12416 (3 CFR, 1982 Comp., p. 197 and 3 CFR, 1983 Comp., p. 186) 
(Intergovernmental Review of Federal Programs) and HUD's implementing 
regulations at 24 CFR part 52, allow each State to establish its own 
process for review and comment on proposed Federal financial assistance 
programs.
    (b) Applicability. Executive Order 12372 applies to applications 
submitted with respect to HOME funds being competitively reallocated 
under subpart J of this part to units of general local government.



Sec.  92.358  Consultant activities.

    No person providing consultant services in an employer-employee type 
relationship shall receive more than a reasonable rate of compensation 
for personal services paid with HOME funds. In no event, however, shall 
such compensation exceed the limits in effect under the provisions of 
any applicable statute (e.g., annual HUD appropriations acts which have 
set the limit at the equivalent of the daily rate paid for Level IV of 
the Executive Schedule, see the Departments of Veterans Affairs and 
Housing and Urban Development, and Independent Agencies Appropriations 
Act, 1997, Pub. L. 104-204 (September 26, 1996)). Such services shall be 
evidenced by written agreements between the parties which detail the 
responsibilities, standards, and compensation. Consultant services 
provided under an independent contractor relationship are not subject to 
the compensation limitation of Level IV of the Executive Schedule.

[62 FR 28930, May 28, 1997]



Sec.  92.359  VAWA requirements.

    (a) General. (1) The Violence Against Women Act (VAWA) requirements 
set forth in 24 CFR part 5, subpart L, apply to all HOME tenant-based 
rental assistance and rental housing assisted

[[Page 592]]

with HOME funds, as supplemented by this section.
    (2) For the HOME program, the ``covered housing provider,'' as this 
term is used in HUD's regulations in 24 CFR part 5, subpart L, refers 
to:
    (i) The housing owner for the purposes of 24 CFR 5.2005(d)(1), 
(d)(3), and (d)(4) and Sec.  5.2009(a); and
    (ii) The participating jurisdiction and the owner for purposes of 24 
CFR 5.2005(d)(2), 5.2005(e), and 5.2007, except as otherwise provided in 
paragraph (g) of this section.
    (b) Effective date. The core statutory protections of VAWA that 
prohibit denial or termination of assistance or eviction solely because 
an applicant or tenant is a victim of domestic violence, dating 
violence, sexual assault, or stalking became applicable upon enactment 
of VAWA 2013 on March 7, 2013. Compliance with the VAWA regulatory 
requirements under this section and 24 CFR part 5, subpart L, are 
required for any tenant-based rental assistance or rental housing 
project for which the date of the HOME funding commitment is on or after 
December 16, 2016.
    (c) Notification requirements. The participating jurisdiction must 
provide a notice and certification form that meet the requirements of 24 
CFR 5.2005(a) to the owner of HOME-assisted rental housing.
    (1) For HOME-assisted units. The owner of HOME-assisted rental 
housing must provide the notice and certification form described in 24 
CFR 5.2005(a) to the applicant for a HOME-assisted unit at the time the 
applicant is admitted to a HOME-assisted unit, or denied admission to a 
HOME-assisted unit based on the owner's tenant selection policies and 
criteria. The owner of HOME-assisted rental housing must also provide 
the notice and certification form described in 24 CFR 5.2005 with any 
notification of eviction from a HOME-assisted unit.
    (2) For HOME tenant-based rental assistance. The participating 
jurisdiction must provide the notice and certification form described in 
24 CFR 5.2005(a) to the applicant for HOME tenant-based rental 
assistance when the applicant's HOME tenant-based rental assistance is 
approved or denied. The participating jurisdiction must also provide the 
notice and certification form described in 24 CFR 5.2005(a) to a tenant 
receiving HOME tenant-based rental assistance when the participating 
jurisdiction provides the tenant with notification of termination of the 
HOME tenant-based rental assistance, and when the participating 
jurisdiction learns that the tenant's housing owner intends to provide 
the tenant with notification of eviction.
    (d) Bifurcation of lease requirements. For the purposes of this 
part, the following requirements shall apply in place of the 
requirements at 24 CFR 5.2009(b):
    (1) If a family living in a HOME-assisted rental unit separates 
under 24 CFR 5.2009(a), the remaining tenant(s) may remain in the HOME-
assisted unit.
    (2) If a family who is receiving HOME tenant-based rental assistance 
separates under 24 CFR 5.2009(a), the remaining tenant(s) will retain 
the HOME tenant-based rental assistance. The participating jurisdiction 
must determine whether the tenant that was removed from the unit will 
receive HOME tenant-based rental assistance.
    (e) VAWA lease term/addendum. The participating jurisdiction must 
develop a VAWA lease term/addendum to incorporate all requirements that 
apply to the owner or lease under 24 CFR part 5, subpart L, and this 
section, including the prohibited bases for eviction and restrictions on 
construing lease terms under 24 CFR 5.2005(b) and (c). This VAWA lease 
term/addendum must also provide that the tenant may terminate the lease 
without penalty if the participating jurisdiction determines that the 
tenant has met the conditions for an emergency transfer under 24 CFR 
5.2005(e). When HOME tenant-based rental assistance is provided, the 
lease term/addendum must require the owner to notify the participating 
jurisdiction before the owner bifurcates the lease or provides 
notification of eviction to the tenant. If HOME tenant-based rental 
assistance is the only assistance provided (i.e., the unit is not 
receiving project-based assistance under a covered housing program, as 
defined in 24

[[Page 593]]

CFR 5.2003), the VAWA lease term/addendum may be written to expire at 
the end of the rental assistance period.
    (f) Period of applicability. For HOME-assisted rental housing, the 
requirements of this section shall apply to the owner of the housing for 
the duration of the affordability period. For HOME tenant-based rental 
assistance, the requirements of this section shall apply to the owner of 
the tenant's housing for the period for which the rental assistance is 
provided.
    (g) Emergency Transfer Plan. (1) The participating jurisdiction must 
develop and implement an emergency transfer plan and must make the 
determination of whether a tenant qualifies under the plan. The plan 
must meet the requirements in 24 CFR 5.2005(e), as supplemented by this 
section.
    (2) For the purposes of Sec.  5.2005(e)(7), the required policies 
must specify that for tenants who qualify for an emergency transfer and 
who wish to make an external emergency transfer when a safe unit is not 
immediately available, the participating jurisdiction must provide a 
list of properties in the jurisdiction that include HOME-assisted units. 
The list must include the following information for each property: The 
property's address, contact information, the unit sizes (number of 
bedrooms) for the HOME-assisted units, and, to the extent known, any 
tenant preferences or eligibility restrictions for the HOME-assisted 
units. In addition, the participating jurisdiction may:
    (i) Establish a preference under the participating jurisdiction's 
HOME program for tenants who qualify for emergency transfers under 24 
CFR 5.2005(e);
    (ii) Provide HOME tenant-based rental assistance to tenants who 
qualify for emergency transfers under 24 CFR 5.2005(e); or
    (iii) Coordinate with victim service providers and advocates to 
develop the emergency transfer plan, make referrals, and facilitate 
emergency transfers to safe and available units.

[81 FR 80803, Nov. 16, 2016]



                     Subpart I_Technical Assistance



Sec.  92.400  Coordinated Federal support for housing strategies.

    (a) General. HUD will provide assistance in accordance with Subtitle 
C of the Act.
    (b) Notice of funding. HUD will publish a notice in the Federal 
Register announcing the availability of funding under this section as 
appropriate.



                         Subpart J_Reallocations



Sec.  92.450  General.

    (a) This subpart J sets out the conditions under which HUD 
reallocates HOME funds that have been allocated, reserved, or placed in 
a HOME Investment Trust Fund.
    (b) A jurisdiction that is not a participating jurisdiction but is 
meeting the requirements of Sec. Sec.  92.102, 92.103, and 92.104, 
(participation threshold, notice of intent, and submission of 
consolidated plan) is treated as a participating jurisdiction for 
purposes of receiving a reallocation under subpart J of this part.



Sec.  92.451  Reallocation of HOME funds from a jurisdiction that is 
not designated a participating jurisdiction or has its designation revoked.

    (a) Failure to be designated a participating jurisdiction. HUD will 
reallocate, under this section, any HOME funds allocated to or reserved 
for a jurisdiction that is not a participating jurisdiction if:
    (1) HUD determines that the jurisdiction has failed to:
    (i) Meet the participation threshold amount in Sec.  92.102;
    (ii) Provide notice of its intent to become a participating 
jurisdiction in accordance with Sec.  92.103; or
    (iii) Submit its consolidated plan, in accordance with 24 CFR part 
91; or
    (2) HUD after providing for amendments and resubmissions in 
accordance with 24 CFR part 91 disapproves the jurisdiction's 
consolidated plan.
    (b) Designation revoked. HUD will reallocate, under this section, 
any funds remaining in a jurisdiction's HOME Investment Trust Fund after 
HUD has revoked the jurisdiction's designation as

[[Page 594]]

a participating jurisdiction under Sec.  92.107.
    (c) Manner of reallocation. HUD will reallocate funds that are 
subject to reallocation under this section in the following manner:
    (1) If the funds to be reallocated under this section are from a 
State, HUD will:
    (i) Make the funds available by competition in accordance with 
criteria in Sec.  92.453 among applications submitted by units of 
general local government within the State and with preference being 
given to applications from units of general local government that are 
not participating jurisdictions, and
    (ii) Reallocate the remainder by formula in accordance with Sec.  
92.454.
    (2) If the funds to be reallocated are from a unit of general local 
government:
    (i) Located in a State that is participating jurisdiction, HUD will 
reallocate the funds to that State. The State, in distributing these 
funds, must give preference to the provision of affordable housing 
within the unit of general local government; or
    (ii) Located in a State that is not a participating jurisdiction, 
HUD will reallocate the funds by competition among units of general 
local government and community housing development organizations within 
the State, with priority going to applications for affordable housing 
within the unit of general local government; and reallocate the 
remainder by formula in accordance with Sec.  92.454.



Sec.  92.452  Reallocation of community housing development organization
set-aside.

    HUD will reallocate, under this section, any HOME funds reduced or 
recaptured by HUD from a participating jurisdiction's HOME Investment 
Trust Fund under Sec.  92.300(d). HUD will reallocate these funds by 
competition in accordance with criteria in Sec.  92.453 to other 
participating jurisdictions for affordable housing developed, sponsored, 
or owned by community housing development organizations.



Sec.  92.453  Competitive reallocations.

    (a) HUD will invite applications through Federal Register 
publication of a Notice of Funding Availability (NOFA), in accordance 
with section 102 of the Department of Housing and Urban Development 
Reform Act of 1989 (42 U.S.C. 3545) and the requirements of sec. 217(c) 
of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12747(c)), for HOME funds that become available for competitive 
reallocation under Sec.  92.451 or Sec.  92.452, or both. The NOFA will 
describe the application requirements and procedures, including the 
total funding available for the competition and any maximum amount of 
individual awards. The NOFA will also describe the selection criteria 
and any special factors to be evaluated in awarding points under the 
selection criteria.
    (b) The NOFA will include the selection criteria at sec. 217(c) of 
the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12747(c)), with the following maximum number of points awarded for each 
category of criteria:
    (1) Commitment. Up to 25 points for the criteria at sec. 217(c)(1) 
of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12747(c)(1));
    (2) Actions. Up to 50 points for the criteria at sec. 217(c)(2) of 
the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12747(c)(2)); and
    (3) Policies. Up to 25 points for the criteria at sec. 217(c)(3) of 
the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12747(c)(3)).

[62 FR 44840, Aug. 22, 1997]



Sec.  92.454  Reallocations by formula.

    (a) HUD will reallocate under this section:
    (1) Any HOME funds remaining available for reallocation after HUD 
has made competitive reallocations under Sec.  92.451 and Sec.  92.452;
    (2) Any HOME funds available for reallocation because HUD reduced or 
recaptured funds from participating jurisdiction under Sec.  92.500(d) 
for failure to commit the funds within the time specified;
    (3) Any HOME funds withdrawn by HUD from a participating 
jurisdiction under 24 CFR 91.520(f) for failure to submit in a timely 
manner a performance report required by 24 CFR 91.520 that is 
satisfactory to HUD; and

[[Page 595]]

    (4) Any HOME funds remitted to HUD under Sec.  92.503(b) when a 
jurisdiction ceases to be a participating jurisdiction.
    (b) Any reallocation of funds from a State must be made only among 
all participating States, and any reallocation of funds from units of 
general local government must be made only among all participating units 
of general local government, except those participating jurisdictions 
that HUD has removed from participating in reallocations under Sec.  
92.552.
    (c) A local participating jurisdiction's share of a reallocation is 
calculated by multiplying the amount available for reallocation to units 
of general local government by a factor that is that ratio of the 
participating jurisdiction's formula allocation provided under Sec.  
92.50 to the total of the formula allocations provided for all local 
participating jurisdictions sharing in the reallocation. A State 
participating jurisdiction's share is comparably determined using the 
amount available for reallocation to States.
    (d) HUD will make reallocations under this section quarterly, unless 
the amount available for such reallocation is insufficient to warrant 
making a reallocation. In any event, HUD will make a reallocation under 
this section at least once a year. The minimum amount of a reallocation 
is $1000.



                    Subpart K_Program Administration



Sec.  92.500  The HOME Investment Trust Fund.

    (a) General. A HOME Investment Trust Fund consists of the accounts 
described in this section solely for investment in accordance with the 
provisions of this part. HUD will establish a HOME Investment Trust Fund 
United States Treasury account for each participating jurisdiction. Each 
participating jurisdiction may use either a separate local HOME 
Investment Trust Fund account or, a subsidiary account within its 
general fund (or other appropriate fund) as the local HOME Investment 
Trust Fund account.
    (b) Treasury Account. The United States Treasury account of the HOME 
Investment Trust Fund includes funds allocated to the participating 
jurisdiction under Sec.  92.50 (including for a local participating 
jurisdiction, any transfer of the State's allocation pursuant to Sec.  
92.102(b)(2)) and funds reallocated to the participating jurisdiction, 
either by formula or by competition, under subpart J of this part; and
    (c) Local account. (1) The local account of the HOME Investment 
Trust Fund includes deposits of HOME funds disbursed from the Treasury 
account; the deposit of any State funds (other than HOME funds 
transferred pursuant to Sec.  92.102(b)(2)) or local funds that enable 
the jurisdiction to meet the participating threshold amount in Sec.  
92.102, any program income (from both the allocated funds and matching 
contributions in accordance with the definition of program income), and 
any repayments or recaptured funds as required by Sec.  92.503. The 
local account must be interest-bearing.
    (2) The participating jurisdiction may establish a second local 
account of the HOME Investment Trust Funds if:
    (i) The participating jurisdiction has its own affordable housing 
trust fund that the participating jurisdiction will use for matching 
contributions to the HOME program;
    (ii) The statute or local ordinance requires repayments from its own 
trust fund to be made to the trust fund;
    (iii) The participating jurisdiction establishes a separate account 
within its own trust fund for repayments of the matching contributions; 
and
    (iv) The funds in the account are used solely for investment in 
eligible activities within the participating jurisdiction's boundaries 
in accordance with the provisions of this part, except as provided under 
Sec.  92.201(a)(2).
    (3) The funds in the local account cannot be used for the matching 
contribution and do not need to be matched.
    (d)(1) Reductions of Fiscal Year 2015 and subsequent fiscal year 
allocations. HUD will reduce or recapture HOME funds in the HOME 
Investment Trust Fund, as follows:
    (i) Any funds from a specific fiscal year allocation that are in the 
United States Treasury account that are not

[[Page 596]]

committed (including funds for community housing development 
organizations under Sec.  92.300) within 24 months after the last day of 
the month in which HUD notifies the participating jurisdiction of HUD's 
execution of the HOME Investment Partnership Agreement for the specific 
fiscal year allocation;
    (ii) Any funds from a specific fiscal year allocation that were 
committed to a State recipient or subrecipient that are not committed to 
a specific local project within 36 months after the last day of the 
month in which HUD notifies the participating jurisdiction of HUD's 
execution of the HOME Investment Partnership Agreement for the specific 
fiscal year allocation;
    (iii) Any funds from a specific fiscal year allocation that are in 
the United States Treasury account that are not expended (drawn down) by 
September 30 of the fifth year after the end of the period of 
availability of the fiscal year allocation for obligation by HUD. Due to 
end-of-year financial system closeouts that begin before this date and 
prevent electronic access to the payment system, requests to draw down 
the funds must be made at least 7 full business days before this date to 
ensure that the funds still can be drawn from the United States Treasury 
account through the computerized disbursement and information system; 
and
    (iv) Any penalties assessed by HUD under Sec.  92.552.
    (2)(i) Reductions of Fiscal Year 2014 and prior fiscal year 
allocations. HUD will reduce or recapture HOME funds in the HOME 
Investment Trust Fund by the amount of:
    (A) Any funds from Fiscal Year 2014 and prior fiscal year 
allocations in the United States Treasury account that are required to 
be reserved (i.e., 15 percent of the funds) by a participating 
jurisdiction, under Sec.  92.300, and which are not committed to a 
community housing development organization project within 24 months 
after the last day of the month in which HUD notifies the participating 
jurisdiction of HUD's execution of the HOME Investment Partnership 
Agreement;
    (B) Any funds from Fiscal Year 2014 and prior fiscal year 
allocations in the United States Treasury account that are not committed 
within 24 months after the last day of the month in which HUD notifies 
the participating jurisdiction of HUD's execution of the HOME Investment 
Partnership Agreement;
    (C) Any funds from Fiscal Year 2014 and prior fiscal year 
allocations in the United States Treasury account that are not expended 
within 5 years after the last day of the month in which HUD notifies the 
participating jurisdiction of HUD's execution of the HOME Investment 
Partnership Agreement; and
    (D) Any penalties assessed by HUD under Sec.  92.552.
    (ii) For purposes of determining the amount by which the HOME 
Investment Trust Fund will be reduced or recaptured under paragraphs 
(d)(2)(i)(A), (B), and (C) of this section, HUD will consider the sum of 
commitments to CHDOs, commitments, or expenditures, as applicable, from 
all fiscal year allocations through the Fiscal Year 2014 allocation. 
This sum must be equal to or greater than the sum of all fiscal year 
allocations through the fiscal year allocation being examined (minus 
previous reductions to the HOME Investment Trust Fund), or in the case 
of commitments to CHDOs, 15 percent of those fiscal year allocations.
    (iii) HUD will reduce or recapture HOME funds in the HOME Investment 
Trust Fund by the amount of all fiscal year allocations through the 
Fiscal Year 2014 allocation that are uncommitted by the commitment 
deadline for the Fiscal Year 2015 allocation.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28930, May 28, 1997; 
78 FR 44679, July 24, 2013; 81 FR 86952, Dec. 2, 2016]



Sec.  92.501  HOME Investment Partnership Agreement.

    Allocated and reallocated funds will be made available pursuant to a 
HOME Investment Partnership Agreement. The agreement ensures that HOME 
funds invested in affordable housing are repayable if the housing ceases 
to qualify as affordable housing before the period of affordability 
expires.

[[Page 597]]



Sec.  92.502  Program disbursement and information system.

    (a) General. The HOME Investment Trust Fund account established in 
the United States Treasury is managed through a computerized 
disbursement and information system established by HUD. The system 
disburses HOME funds that are allocated or reallocated, and collects and 
reports information on the use of HOME funds in the United States 
Treasury account. (For purposes of reporting in the Integrated 
Disbursement and Information System, a HOME project is an activity.) The 
participating jurisdiction must report all program income in HUD's 
computerized disbursement and information system.
    (b) Project set-up. After the participating jurisdiction executes 
the HOME Investment Partnership Agreement, submits the applicable 
banking and security documents, complies with the environmental 
requirements under 24 CFR part 58 for release of funds and commits funds 
to a specific local project, the participating jurisdiction may identify 
(set up) specific investments in the disbursement and information 
system. Investments that require the set-up of projects in the system 
are the acquisition, new construction, or rehabilitation of housing, and 
the provision of tenant-based rental assistance. The participating 
jurisdiction is required to enter complete project set-up information at 
the time of project set-up.
    (c) Disbursement of HOME funds. (1) After complete project set-up 
information is entered into the disbursement and information system, 
HOME funds for the project may be drawn down from the United States 
Treasury account by the participating jurisdiction by electronic funds 
transfer. The funds will be deposited in the local account of the HOME 
Investment Trust Fund of the participating jurisdiction within 48 to 72 
hours of the disbursement request. Any drawdown of HOME funds from the 
United States Treasury account is conditioned upon the provision of 
satisfactory information by the participating jurisdiction about the 
project or tenant-based rental assistance and compliance with other 
procedures, as specified by HUD.
    (2) HOME funds drawn from the United States Treasury account must be 
expended for eligible costs within 15 days. Any interest earned within 
the 15-day period may be retained by the participating jurisdiction as 
HOME funds. Any funds that are drawn down and not expended for eligible 
costs within 15 days of the disbursement must be returned to HUD for 
deposit in the participating jurisdiction's United States Treasury 
account of the HOME Investment Trust Fund. Interest earned after 15 days 
belongs to the United States and must be remitted to the United States 
as provided in 2 CFR 200.305(b)(9), except interest amounts up to $500 
per year may be retained for administrative expenses.
    (3) HOME funds in the local account of the HOME Investment Trust 
Fund must be disbursed before requests are made for HOME funds in the 
United States Treasury account. Beginning with the Fiscal Year 2015 
allocation, the specific funds that are committed to a project will be 
disbursed for that project. If both funds in the local account and funds 
in the United States Treasury account are committed to a project, the 
funds in the local account must be disbursed before requests are made 
for HOME funds in the United States Treasury account for the project.
    (4) A participating jurisdiction will be paid on an advance basis 
provided it complies with the requirements of this part.
    (d) Project completion. (1) Complete project completion information 
must be entered into the disbursement and information system, or 
otherwise provided, within 120 days of the final project drawdown. If 
satisfactory project completion information is not provided, HUD may 
suspend further project set-ups or take other corrective actions.
    (2) Additional HOME funds may be committed to a project up to one 
year after project completion, but the amount of HOME funds in the 
project may not exceed the maximum per-unit subsidy amount established 
under Sec.  92.250.
    (e) Access by other participants. Access to the disbursement and 
information system by other entities participating

[[Page 598]]

in the HOME program (e.g., State recipients) will be governed by 
procedures established by HUD. Only participating jurisdictions and 
State recipients (if permitted by the State) may request disbursement.

[61 FR 48750, Sept. 16, 1996, as amended at 78 FR 44679, July 24, 2013; 
80 FR 75935, Dec. 7, 2015; 81 FR 86952, Dec. 2, 2016]



Sec.  92.503  Program income, repayments, and recaptured funds.

    (a) Program income. (1) Program income must be used in accordance 
with the requirements of this part. Program income must be deposited in 
the participating jurisdiction's HOME Investment Trust Fund local 
account unless the participating jurisdiction permits the State 
recipient or subrecipient to retain the program income for additional 
HOME projects pursuant to the written agreement required by Sec.  
92.504.
    (2) If the jurisdiction is not a participating jurisdiction when the 
program income is received, the funds are not subject to the 
requirements of this part.
    (3) Program income derived from consortium activities undertaken by 
or within a member unit of general local government which thereafter 
terminates its participation in the consortium continues to be program 
income of the consortium.
    (b) Repayments. (1) Any HOME funds invested in housing that does not 
meet the affordability requirements for the period specified in Sec.  
92.252 or Sec.  92.254, as applicable, must be repaid by the 
participating jurisdiction in accordance with paragraph (b)(3) of this 
section.
    (2) Any HOME funds invested in a project that is terminated before 
completion, either voluntarily or otherwise, must be repaid by the 
participating jurisdiction, in accordance with paragraph (b)(3) of this 
section, except for repayments of project-specific community housing 
development organization loans that are waived, in accordance with 
Sec. Sec.  92.301(a)(3) and (b)(3). In addition, any HOME funds used for 
costs that are not eligible under this part must be repaid by the 
participating jurisdiction, in accordance with paragraph (b)(3) of this 
section.
    (3) HUD will instruct the participating jurisdiction to either repay 
the funds to the HOME Investment Trust Fund Treasury account or the 
local account. If the jurisdiction is not a participating jurisdiction 
at the time the repayment is made, the funds must be remitted to HUD and 
reallocated, in accordance with Sec.  92.454.
    (c) Recaptures. HOME funds recaptured in accordance with Sec.  
92.254(a)(5)(ii) must be used in accordance with the requirements of 
this part. Recaptured funds must be deposited in the participating 
jurisdiction's HOME Investment Trust Fund local account unless the 
participating jurisdiction permits the State recipient, subrecipient, or 
community housing development organization to retain the recaptured 
funds for additional HOME projects pursuant to the written agreement 
required by Sec.  92.504. If the jurisdiction is not a participating 
jurisdiction when the recaptured funds are received, the funds must be 
remitted to HUD and reallocated in accordance with Sec.  92.454.
    (d) Commitment of funds in the local account. Beginning with the 
Fiscal Year 2017 action plan, as provided in 24 CFR 91.220(l)(2) and 
91.320(k)(2), program income, repayments, and recaptured funds in the 
participating jurisdiction's HOME Investment Trust Fund local account 
must be used in accordance with the requirements of this part, and the 
amount of program income, repayments, and recaptured funds in the 
participating jurisdiction's HOME Investment Trust Fund local account at 
the beginning of the program year must be committed before HOME funds in 
the HOME Investment Trust Fund United States Treasury account, except 
for the HOME funds in the United States Treasury account that are 
required to be reserved (i.e., 15 percent of the funds), under Sec.  
92.300(a), for investment only in housing to be owned, developed, or 
sponsored by community housing development organizations. The deadline 
for committing program income, repayments, and recaptured funds received 
during a program year is the date of the participating jurisdiction's 
commitment deadline for the subsequent year's grant allocation.

[61 FR 48750, Sept. 16, 1996, as amended at 78 FR 44680, July 24, 2013; 
81 FR 86952, Dec. 2, 2016]

[[Page 599]]



Sec.  92.504  Participating jurisdiction responsibilities; written
agreements; on-site inspection.

    (a) Responsibilities. The participating jurisdiction is responsible 
for managing the day-to-day operations of its HOME program, ensuring 
that HOME funds are used in accordance with all program requirements and 
written agreements, and taking appropriate action when performance 
problems arise. The use of State recipients, subrecipients, or 
contractors does not relieve the participating jurisdiction of this 
responsibility. The performance and compliance of each contractor, State 
recipient, and subrecipient must be reviewed at least annually. The 
participating jurisdiction must have and follow written policies, 
procedures, and systems, including a system for assessing risk of 
activities and projects and a system for monitoring entities consistent 
with this section, to ensure that the requirements of this part are met.
    (b) Executing a written agreement. Before disbursing any HOME funds 
to any entity, the participating jurisdiction must enter into a written 
agreement with that entity. Before disbursing any HOME funds to any 
entity, a State recipient, subrecipient, or contractor which is 
administering all or a part of the HOME program on behalf of the 
participating jurisdiction, must also enter into a written agreement 
with that entity. The written agreement must ensure compliance with the 
requirements of this part.
    (c) Provisions in written agreements. The contents of the agreement 
may vary depending upon the role the entity is asked to assume or the 
type of project undertaken. This section details basic requirements by 
role and the minimum provisions that must be included in a written 
agreement.
    (1) State recipient. The provisions in the written agreement between 
the State and a State recipient will depend on the program functions 
that the State specifies the State recipient will carry out in 
accordance with Sec.  92.201(b). In accordance with Sec.  92.201, the 
written agreement must either require the State recipient to comply with 
the requirements established by the State or require the State recipient 
to establish its own requirements to comply with this part, including 
requirements for income determinations and underwriting subsidy layering 
guidelines, rehabilitation standards, refinancing guidelines, homebuyer 
program policies, and affordability.
    (i) Use of the HOME funds. The agreement must describe the amount 
and use of the HOME funds to administer one or more programs to produce 
affordable housing, provide downpayment assistance, or provide tenant-
based rental assistance, including the type and number of housing 
projects to be funded (e.g. the number of single- family homeowner loans 
to be made or number of homebuyers to receive downpayment assistance), 
tasks to be performed, a schedule for completing the tasks (including a 
schedule for committing funds to projects that meet the deadlines 
established by this part), a budget for each program, and any 
requirement for matching contributions. These items must be in 
sufficient detail to provide a sound basis for the State to effectively 
monitor performance under the agreement.
    (ii) Affordability. The agreement must require housing assisted with 
HOME funds to meet the affordability requirements of Sec.  92.252 or 
Sec.  92.254, as applicable, and must require repayment of the funds if 
the housing does not meet the affordability requirements for the 
specified time period. The agreement must state if repayment of HOME 
funds or recaptured HOME funds must be remitted to the State or retained 
by the State recipient for additional eligible activities.
    (iii) Program income. The agreement must state if program income is 
to be remitted to the State or to be retained by the State recipient for 
additional eligible activities.
    (iv) Uniform administrative requirements. The agreement must require 
the State recipient to comply with applicable uniform administrative 
requirements, as described in Sec.  92.505.
    (v) Project requirement. The agreement must require compliance with 
project requirements in subpart F of this part, as applicable in 
accordance with the type of project assisted.

[[Page 600]]

    (vi) Other program requirements. The agreement must require the 
State recipient to carry out each activity in compliance with all 
Federal laws and regulations described in subpart H of this part, except 
that the State recipient does not assume the State's responsibilities 
for release of funds under Sec.  92.352 and the intergovernmental review 
process in Sec.  92.357 does not apply to the State recipient. If HOME 
funds are provided for development of rental housing or provision of 
tenant-based rental assistance, the agreement must set forth all 
obligations the State imposes on the State recipient in order to meet 
the VAWA requirements under Sec.  92.359, including notice obligations 
and any obligations with respect to the emergency transfer plan 
(including whether the State recipient must develop its own plan or 
follow the State's plan).
    (vii) Affirmative marketing. The agreement must specify the State 
recipient's affirmative marketing responsibilities in accordance with 
Sec.  92.351.
    (viii) Requests for disbursement of funds. The agreement must 
specify that the State recipient may not request disbursement of HOME 
funds under this agreement until the funds are needed for payment of 
eligible costs. The amount of each request must be limited to the amount 
needed. Program income must be disbursed before the State recipient 
requests funds from the State.
    (ix) Records and reports. The agreement must specify the particular 
records that must be maintained and the information or reports that must 
be submitted in order to assist the State in meeting its recordkeeping 
and reporting requirements.
    (x) Enforcement of the agreement. The agreement must provide for a 
means of enforcement of affordable housing requirements by the State or 
the intended beneficiaries, if the State recipient will be the owner at 
project completion of the affordable housing. The means of enforcement 
may include liens on real property, deed restrictions, or covenants 
running with the land. The affordability requirements in Sec.  92.252 
must be enforced by deed restriction. In addition, the agreement must 
specify remedies for breach of the HOME requirements. The agreement must 
specify that, in accordance with 2 CFR 200.338, suspension or 
termination may occur if the State recipient materially fails to comply 
with any term of the agreement. The State may permit the agreement to be 
terminated in whole or in part in accordance with 2 CFR 200.339.
    (xi) Written agreement. Before the State recipient provides funds to 
for-profit owners or developers, nonprofit owners or developers or 
sponsors, subrecipients, homeowners, homebuyers, tenants (or landlords) 
receiving tenant-based rental assistance, or contractors who are 
providing services to the State recipient, the State recipient must have 
a written agreement with such entities that meets the requirements of 
this section.
    (xii) Duration of the agreement. The duration of the agreement will 
depend on which functions the State recipient performs (e.g., whether 
the State recipient or the State has responsibility for monitoring 
rental projects for the period of affordability) and which activities 
are funded under the agreement.
    (xiii) Fees. The agreement must prohibit the State recipient and its 
subrecipients and community housing development organizations from 
charging servicing, origination, processing, inspection, or other fees 
for the costs of administering a HOME program, except as permitted by 
Sec.  92.214(b)(1).
    (2) Subrecipient. A subrecipient is a public agency or nonprofit 
organization selected by the participating jurisdiction to administer 
all or some of the participating jurisdiction's HOME programs to produce 
affordable housing, provide downpayment assistance, or provide tenant-
based rental assistance. The agreement must set forth and require the 
subrecipient to follow the participating jurisdiction's requirements, 
including requirements for income determinations, underwriting and 
subsidy layering guidelines, rehabilitation standards, refinancing 
guidelines, homebuyer program policies, and affordability requirements. 
The agreement between the participating jurisdiction and the 
subrecipient must include:

[[Page 601]]

    (i) Use of the HOME funds. The agreement must describe the amount 
and use of the HOME funds for one or more programs, including the type 
and number of housing projects to be funded (e.g., the number of single-
family homeowners loans to be made or the number of homebuyers to 
receive downpayment assistance), tasks to be performed, a schedule for 
completing the tasks (including a schedule for committing funds to 
projects in accordance with deadlines established by this part), a 
budget, any requirement for matching contributions and the period of the 
agreement. These items must be in sufficient detail to provide a sound 
basis for the participating jurisdiction to effectively monitor 
performance under the agreement.
    (ii) Program income. The agreement must state if program income is 
to be remitted to the participating jurisdiction or to be retained by 
the subrecipient for additional eligible activities.
    (iii) Uniform administrative requirements. The agreement must 
require the subrecipient to comply with applicable uniform 
administrative requirements, as described in Sec.  92.505.
    (iv) Other program requirements. The agreement must require the 
subrecipient to carry out each activity in compliance with all Federal 
laws and regulations described in subpart H of this part, except that 
the subrecipient does not assume the participating jurisdiction's 
responsibilities for environmental review under Sec.  92.352 and the 
intergovernmental review process in Sec.  92.357 does not apply. The 
agreement must set forth the requirements the subrecipient must follow 
to enable the participating jurisdiction to carry environmental review 
responsibilities before HOME funds are committed to a project. If HOME 
funds are being provided to develop rental housing or provide tenant-
based rental assistance, the agreement must set forth all obligations 
the participating jurisdiction imposes on the subrecipient in order to 
meet the VAWA requirements under Sec.  92.359, including notice 
obligations and obligations under the emergency transfer plan.
    (v) Affirmative marketing. The agreement must specify the 
subrecipient's affirmative marketing responsibilities in accordance with 
Sec.  92.351.
    (vi) Requests for disbursement of funds. The agreement must specify 
that the subrecipient may not request disbursement of funds under the 
agreement until the funds are needed for payment of eligible costs. The 
amount of each request must be limited to the amount needed. Program 
income must be disbursed before the subrecipient requests funds from the 
participating jurisdiction.
    (vii) Reversion of assets. The agreement must specify that upon 
expiration of the agreement, the subrecipient must transfer to the 
participating jurisdiction any HOME funds on hand at the time of 
expiration and any accounts receivable attributable to the use of HOME 
funds.
    (viii) Records and reports. The agreement must specify the 
particular records that must be maintained and the information or 
reports that must be submitted in order to assist the participating 
jurisdiction in meeting its recordkeeping and reporting requirements.
    (ix) Enforcement of the agreement. The agreement must specify 
remedies for breach of the provisions of the agreement. The agreement 
must specify that, in accordance with 2 CFR 200.338, suspension or 
termination may occur if the subrecipient materially fails to comply 
with any term of the agreement. The participating jurisdiction may 
permit the agreement to be terminated in whole or in partin accordance 
with 2 CFR 200.339.
    (x) Written agreement. Before the subrecipient provides HOME funds 
to for-profit owners or developers, nonprofit owners or developers or 
sponsors, subrecipients, homeowners, homebuyers, tenants (or landlords) 
receiving tenant-based rental assistance, or contractors, the 
subrecipient must have a written agreement that meets the requirements 
of this section. The agreement must state if repayment of HOME funds or 
recaptured HOME funds must be remitted to the participating jurisdiction 
or retained by the subrecipient for additional eligible activities.

[[Page 602]]

    (xi) Fees. The agreement must prohibit the subrecipient and any 
community housing development organizations from charging servicing, 
origination, or other fees for the costs of administering the HOME 
program, except as permitted by Sec.  92.214(b)(1).
    (3) For-profit or nonprofit housing owner, sponsor, or developer 
(other than single-family owner-occupant). The participating 
jurisdiction may preliminarily award HOME funds for a proposed project, 
contingent on conditions such as obtaining other financing for the 
project. This preliminary award is not a commitment to a project. The 
written agreement committing the HOME funds to the project must meet the 
requirements of ``commit to a specific local project'' in the definition 
of ``commitment'' in Sec.  92.2 and contain the following:
    (i) Use of the HOME funds. The agreement between the participating 
jurisdiction and a for-profit or nonprofit housing owner, sponsor, or 
developer must describe the address of the project or the legal 
description of the property if a street address has not been assigned to 
the property, the use of the HOME funds and other funds for the project, 
including the tasks to be performed for the project, a schedule for 
completing the tasks and the project, and a complete budget. These items 
must be in sufficient detail to provide a sound basis for the 
participating jurisdiction to effectively monitor performance under the 
agreement to achieve project completion and compliance with the HOME 
requirements.
    (ii) Affordability. The agreement must require housing assisted with 
HOME funds to meet the affordability requirements of Sec.  92.252 or 
Sec.  92.254, as applicable, and must require repayment of the funds if 
the housing does not meet the affordability requirements for the 
specified time period. The affordability requirements in Sec.  92.252 
must be imposed by deed restrictions, covenants running with the land, 
use restrictions, or other mechanisms approved by HUD under which the 
participating jurisdiction has the right to require specific 
performance.
    (A) If the owner or developer is undertaking rental projects, the 
agreement must establish the initial rents, the procedures for rent 
increases pursuant to Sec.  92.252(f)(2), the number of HOME units, the 
size of the HOME units, and the designation of the HOME units as fixed 
or floating, and include the requirement that the owner or developer 
provide the address (e.g., street address and apartment number) of each 
HOME unit no later than the time of initial occupancy.
    (B) If the owner or developer is undertaking a homeownership project 
for sale to homebuyers in accordance with Sec.  92.254(a), the agreement 
must set forth the resale or recapture requirements that must be imposed 
on the housing, the sales price or the basis upon which the sales price 
will be determined, and the disposition of the sales proceeds. 
Recaptured funds must be returned to the participating jurisdiction.
    (iii) Project requirements. The agreement must require compliance 
with project requirements in subpart F of this part, as applicable in 
accordance with the type of project assisted. The agreement may permit 
the owner to limit eligibility or give a preference to a particular 
segment of the population in accordance with Sec.  92.253(d).
    (iv) Property standards. The agreement must require the housing to 
meet the property standards in Sec.  92.251, upon project completion. 
The agreement must also require owners of rental housing assisted with 
HOME funds to maintain the housing compliance with Sec.  92.251 for the 
duration of the affordability period.
    (v) Other program requirements. The agreement must require the 
owner, developer or sponsor to carry out each project in compliance with 
the following requirements of subpart H of this part:
    (A) The agreement must specify the owner or developer's affirmative 
marketing responsibilities as enumerated by the participating 
jurisdiction in accordance with Sec.  92.351.
    (B) The federal requirements and nondiscrimination established in 
Sec.  92.350.
    (C) Any displacement, relocation, and acquisition requirements 
imposed by the participating jurisdiction consistent with Sec.  92.353.
    (D) The labor requirements in Sec.  92.354.

[[Page 603]]

    (E) The conflict of interest provisions prescribed in Sec.  
92.356(f).
    (F) If HOME funds are being provided to develop rental housing, the 
agreement must set forth all obligations the participating jurisdiction 
imposes on the owner in order to meet the VAWA requirements under Sec.  
92.359, including the owner's notice obligations and owner obligations 
under the emergency transfer plan.
    (vi) Records and reports. The agreement must specify the particular 
records that must be maintained and the information or reports that must 
be submitted in order to assist the participating jurisdiction in 
meeting its recordkeeping and reporting requirements. The owner of 
rental housing must annually provide the participating jurisdiction with 
information on rents and occupancy of HOME-assisted units to demonstrate 
compliance with Sec.  92.252. If the rental housing project has floating 
HOME units, the owner must provide the participating jurisdiction with 
information regarding unit substitution and filling vacancies so that 
the project remains in compliance with HOME rental occupancy 
requirements. The agreement must specify the reporting requirements 
(including copies of financial statements) to enable the participating 
jurisdiction to determine the financial condition (and continued 
financial viability) of the rental project.
    (vii) Enforcement of the agreement. The agreement must provide for a 
means of enforcement of the affordable housing requirements by the 
participating jurisdiction and the intended beneficiaries. This means of 
enforcement may include liens on real property, deed restrictions, or 
covenants running with the land. The affordability requirements in Sec.  
92.252 must be imposed by deed restrictions, covenants running with the 
land, use restrictions, or other mechanisms approved by HUD under which 
the participating jurisdiction has the right to require specific 
performance. In addition, the agreement must specify remedies for breach 
of the provisions of the agreement.
    (viii) Requests for disbursement of funds. The agreement must 
specify that the developer may not request disbursement of funds under 
the agreement until the funds are needed for payment of eligible costs. 
The amount of each request must be limited to the amount needed.
    (ix) Duration of the agreement. The agreement must specify the 
duration of the agreement. If the housing assisted under this agreement 
is rental housing, the agreement must be in effect through the 
affordability period required by the participating jurisdiction under 
Sec.  92.252. If the housing assisted under this agreement is 
homeownership housing, the agreement must be in effect at least until 
completion of the project and ownership by the low-income family.
    (x) Community housing development organization provisions. If the 
nonprofit owner or developer is a community housing development 
organization and is using set-aside funds under Sec.  92.300, the 
agreement must include the appropriate provisions under Sec. Sec.  
92.300, 92.301, and 92.303. If the community development organization is 
receiving HOME funds as a developer of homeownership housing, the 
agreement must specify if the organization may retain proceeds from the 
sale of the housing and whether the proceeds are to be used for HOME-
eligible or other housing activities to benefit low-income families. 
Recaptured funds are subject to the requirements of Sec.  92.503. If the 
community housing development organization is receiving assistance for 
operating expenses, see paragraph (c)(6) of this section.
    (xi) Fees. The agreement must prohibit project owners from charging 
fees that are not customarily charged in rental housing such as laundry 
room access fees, and other fees. However, rental project owners may 
charge reasonable application fees to prospective tenants may charge 
parking fees to tenants only if such fees are customary for rental 
housing projects in the neighborhood; and may charge fees for services 
such as bus transportation or meals, as long as such services are 
voluntary. The agreement must also prohibit the developer that is 
undertaking a homeownership project from charging servicing, 
origination, processing, inspection, or other fees for the costs of 
providing homeownership assistance.

[[Page 604]]

    (4) Contractor. The participating jurisdiction selects a contractor 
through applicable procurement procedures and requirements. The 
contractor provides goods or services in accordance with a written 
agreement (the contract). For contractors who are administering all or 
some of the participating jurisdiction's HOME programs or specific 
services for one or more programs, the contract must include at a 
minimum the following provisions:
    (i) Use of the HOME funds. The agreement must describe the use of 
the HOME funds, including the tasks to be performed, a schedule for 
completing the tasks, a budget, and the length of the agreement.
    (ii) Program requirements. The agreement must provide that the 
contractor is subject to the requirements in part 92 that are applicable 
to the participating jurisdiction, except Sec. Sec.  92.505 and 92.506 
do not apply, and the contractor cannot assume the participating 
jurisdiction responsibilities for environmental review, decisionmaking, 
and action under Sec.  92.352. Where the contractor is administering 
only a portion of the program, the agreement must list the requirements 
applicable to the activities the contractor is administering. If 
applicable to the work under the contract, the agreement must set forth 
all obligations the participating jurisdiction imposes on the contractor 
in order to meet the VAWA requirements under Sec.  92.359, including any 
notice obligations and any obligations under the emergency transfer 
plan.
    (iii) Duration of agreement. The agreement must specify the duration 
of the contract. Generally, the duration of a contract should not exceed 
two years.
    (5) Homebuyer, homeowner or tenant receiving tenant-based rental or 
security deposit assistance. When a participating jurisdiction provides 
assistance to a homebuyer, homeowner or tenant the written agreement may 
take many forms depending upon the nature of assistance. As appropriate, 
it must include as a minimum:
    (i) For homebuyers, the agreement must conform to the requirements 
in Sec.  92.254(a), the value of the property, principal residence, 
lease-purchase, if applicable, and the resale or recapture provisions. 
The agreement must specify the amount of HOME funds, the form of 
assistance, e.g., grant, amortizing loan, deferred payment loan, the use 
of the funds (e.g., down-payment, closing costs, rehabilitation) and the 
time by which the housing must be acquired.
    (ii) For homeowners, the agreement must conform to the requirements 
in Sec.  92.254(b) and specify the amount and form of HOME assistance, 
rehabilitation work to be undertaken, date for completion, and property 
standards to be met.
    (iii) For tenants, the rental assistance contract or the security 
deposit contract must conform to Sec. Sec.  92.209 and 92.253.
    (6) Community housing development organization receiving assistance 
for operating expenses. The agreement must describe the use of HOME 
funds for operating expenses; e.g., salaries, wages, and other employee 
compensation and benefits; employee education, training, and travel; 
rent; utilities; communication costs; taxes; insurance; equipment; and 
materials and supplies. If the community housing development 
organization is not also receiving funds for a housing project to be 
developed, sponsored, or owned by the community housing development 
organization, the agreement must provide that the community housing 
development organization is expected to receive funds for a project 
within 24 months of the date of receiving the funds for operating 
expenses, and must specify the terms and conditions upon which this 
expectation is based and the consequences of failure to receive funding 
for a project.
    (7) Community housing development organization receiving assistance 
for project-specific technical assistance and site control loans or 
project-specific seed money loans. The agreement must identify the 
specific site or sites and describe the amount and use of the HOME funds 
(in accordance with Sec.  92.301), including a budget for work, a period 
of performance, and a schedule for completion. The agreement must also 
set forth the basis upon which the participating jurisdiction may waive 
repayment of the loans, consistent with Sec.  92.301, if applicable.

[[Page 605]]

    (8) Technical assistance provider to develop the capacity of 
community housing development organizations in the jurisdiction. The 
agreement must identify the specific nonprofit organization(s) to 
receive capacity building assistance. The agreement must describe the 
amount and use (scope of work) of the HOME funds, including a budget, a 
period of performance, and a schedule for completion.
    (d) On-site inspections and financial oversight. (1) Inspections. 
The participating jurisdiction must inspect each project at project 
completion and during the period of affordability to determine that the 
project meets the property standards of Sec.  92.251.
    (i) Completion inspections. Before completing the project in the 
disbursement and information system established by HUD, the 
participating jurisdiction must perform an on-site inspection of HOME-
assisted housing to determine that all contracted work has been 
completed and that the project complies with the property standards of 
Sec.  92.251.
    (ii) Ongoing periodic inspections of HOME-assisted rental housing. 
During the period of affordability, the participating jurisdiction must 
perform on-site inspections of HOME-assisted rental housing to determine 
compliance with the property standards of Sec.  92.251 and to verify the 
information submitted by the owners in accordance with the requirements 
of Sec.  92.252. The inspections must be in accordance with the 
inspection procedures that the participating jurisdiction establishes to 
meet the inspection requirements of Sec.  92.251.
    (A) The on-site inspections must occur within 12 months after 
project completion and at least once every 3 years thereafter during the 
period of affordability.
    (B) If there are observed deficiencies for any of the inspectable 
items in the property standards established by the participating 
jurisdiction, in accordance with the inspection requirements of Sec.  
92.251, a follow-up on-site inspection to verify that deficiencies are 
corrected must occur within 12 months. The participating jurisdiction 
may establish a list of non-hazardous deficiencies for which correction 
can be verified by third party documentation (e.g., paid invoice for 
work order) rather than re-inspection. Health and safety deficiencies 
must be corrected immediately, in accordance with Sec.  92.251. The 
participating jurisdiction must adopt a more frequent inspection 
schedule for properties that have been found to have health and safety 
deficiencies.
    (C) The property owner must annually certify to the participating 
jurisdiction that each building and all HOME- assisted units in the 
project are suitable for occupancy, taking into account State and local 
health, safety, and other applicable codes, ordinances, and 
requirements, and the ongoing property standards established by the 
participating jurisdiction to meet the requirements of Sec.  92.251.
    (D) Inspections must be based on a statistically valid sample of 
units appropriate for the size of the HOME-assisted project, as set 
forth by HUD through notice. For projects with one-to-four HOME-assisted 
units, participating jurisdiction must inspect 100 percent of the HOME-
assisted units and the inspectable items (site, building exterior, 
building systems, and common areas) for each building housing HOME-
assisted units.
    (iii) Annual inspections. Tenant- based rental assistance (TBRA). 
All housing occupied by tenants receiving HOME tenant-based rental 
assistance must meet the standards in 24 CFR 982.401 or the successor 
requirements as established by HUD. The participating jurisdiction must 
perform annual on-site inspections of rental housing occupied by tenants 
receiving HOME-assisted TBRA to determine compliance with these 
standards.
    (2) Financial oversight. During the period of affordability, the 
participating jurisdiction must examine at least annually the financial 
condition of HOME-assisted rental projects with 10 units or more to 
determine the continued financial viability of the housing and must take 
actions to correct problems, to the extent feasible.

[61 FR 48750, Sept. 16, 1996, as amended at 64 FR 50224, Sept. 15, 1999; 
67 FR 61757, Oct. 1, 2002; 68 FR 56404, Sept. 30, 2003; 78 FR 44680, 
July 24, 2013; 80 FR 75935, Dec. 7, 2015; 81 FR 80804, Nov. 16, 2016; 81 
FR 86953, Dec. 2, 2016]

[[Page 606]]



Sec.  92.505  Applicability of uniform administrative requirements.

    The requirements of 2 CFR part 200 apply to participating 
jurisdictions, State recipients, and subrecipients receiving HOME funds, 
except for the following provisions: Sec. Sec.  200.306, 200.307, 
200.308 (not applicable to participating jurisdictions), 200.311 (except 
as provided in Sec.  92.257), 200.312, 200.329, 200.333, and 200.334. 
The provisions of 2 CFR 200.305 apply as modified by Sec.  92.502(c). If 
there is a conflict between definitions in 2 CFR part 200 and 24 CFR 
part 92, the definitions in 24 CFR part 92 govern.

[80 FR 75935, Dec. 7, 2015]



Sec.  92.506  Audit.

    Audits of the participating jurisdiction, State recipients, and 
subrecipients must be conducted in accordance with 2 CFR part 200, 
subpart F.

[67 FR 61757, Oct. 1, 2002, as amended at 80 FR 75935, Dec. 7, 2015]



Sec.  92.507  Closeout.

    HOME funds will be closed out in accordance with 2 CFR part 200, 
subpart D.

[80 FR 75935, Dec. 7, 2015]



Sec.  92.508  Recordkeeping.

    (a) General. Each participating jurisdiction must establish and 
maintain sufficient records to enable HUD to determine whether the 
participating jurisdiction has met the requirements of this part. At a 
minimum, the following records are needed:
    (1) Records concerning designation as a participating jurisdiction. 
(i) For a consortium, the consortium agreement among the participating 
member units of general local government as required by Sec.  92.101.
    (ii) For a unit of general local government receiving a formula 
allocation of less than $750,000 (or less than $500,000 in fiscal years 
in which Congress appropriates less than $1.5 billion for this part), 
records demonstrating that funds have been made available (either by the 
State or the unit of general local government, or both) equal to or 
greater than the difference between its formula allocation and $750,000 
(or $500,000 in fiscal years in which Congress appropriates less than 
$1.5 billion) as required by Sec.  92.102(b).
    (2) Program records. (i) Records of the efforts to maximize 
participation by the private sector as required by Sec.  92.200.
    (ii) The forms of HOME assistance used in the program, including any 
forms of investment described in the Consolidated Plan under 24 CFR part 
91 that are not identified in Sec.  92.205(b), and which are 
specifically approved by HUD.
    (iii) The underwriting and subsidy layering guidelines adopted in 
accordance with Sec.  92.250 that support the participating 
jurisdiction's Consolidated Plan certification.
    (iv) If existing debt is refinanced for multi-family rehabilitation 
projects, the refinancing guidelines established in accordance with 
Sec.  92.206(b), described in the Consolidated Plan.
    (v) If HOME funds are used for tenant-based rental assistance, 
records supporting the participating jurisdiction's Consolidated Plan 
certification in accordance with Sec.  92.209(b), including 
documentation of the local market conditions that led to the choice of 
this option; written selection policies and criteria; supporting 
documentation for preferences for specific categories of individuals 
with disabilities; and records supporting the rent standard and minimum 
tenant contribution established in accordance with Sec.  92.209(h).
    (vi) If HOME funds are used for tenant-based rental assistance or 
rental housing, records evidencing that not less than 90 percent of the 
families receiving such rental assistance meet the income requirements 
of Sec.  92.216.
    (vii) If HOME funds are used for homeownership housing, the 
procedures used for establishing 95 percent of the median purchase price 
for the area in accordance with Sec.  92.254(a)(2), in the Consolidated 
Plan.
    (viii) If HOME funds are used for acquisition of housing for 
homeownership, the resale or recapture guidelines established in 
accordance with Sec.  92.254(a)(5), as set forth in the Consolidated 
Plan.
    (ix) Records demonstrating compliance with the matching requirements 
of Sec.  92.218 through Sec.  92.222 including a

[[Page 607]]

running log and project records documenting the type and amount of match 
contributions by project.
    (x) Records documenting compliance with the 24 month commitment 
deadline of Sec.  92.500(d).
    (xi) Records demonstrating compliance with the fifteen percent CHDO 
set-aside requirement of Sec.  92.300(a).
    (xii) Records documenting compliance with the ten percent limitation 
on administrative and planning costs in accordance with Sec.  92.207.
    (xiii) Records documenting objections to the religious character of 
an organization that provides services under the HOME program, and the 
reasonable efforts undertaken to identify and refer the program 
participant to an alternative provider to which the prospective program 
participant has no objection, as provided in Sec.  92.257(d).
    (3) Project records. (i) A full description of each project assisted 
with HOME funds, including the location (address of each unit), form of 
HOME assistance, and the units or tenants assisted with HOME funds.
    (ii) The source and application of funds for each project, including 
supporting documentation in accordance with 2 CFR 200.302; and records 
to document the eligibility and permissibility of the project costs, 
including the documentation of the actual HOME-eligible development 
costs of each HOME-assisted unit (through allocation of costs, if 
permissible under Sec.  92.205(d)) where HOME funds are used to assist 
less than all of the units in a multi-unit project.
    (iii) Records demonstrating that each rental housing or 
homeownership project meets the minimum per-unit subsidy amount of Sec.  
92.205(c), the maximum per-unit subsidy amount of Sec.  92.250(a), and 
the subsidy layering and underwriting evaluation adopted in accordance 
with Sec.  92.250(b).
    (iv) Records (e.g., inspection reports) demonstrating that each 
project meets the property standards of Sec.  92.251 at project 
completion. In addition, during the period of affordability, records for 
rental projects demonstrating compliance with the property standards and 
financial reviews and actions pursuant to Sec.  92.504(d).
    (v) Records demonstrating that each family is income eligible in 
accordance with Sec.  92.203.
    (vi) Records demonstrating that each tenant-based rental assistance 
project meets the written tenant selection policies and criteria of 
Sec.  92.209(c), including any targeting requirements, the rent 
reasonableness requirements of Sec.  92.209(f), the maximum subsidy 
provisions of Sec.  92.209(h), property inspection reports, and 
calculation of the HOME subsidy.
    (vii) Records demonstrating that each rental housing project meets 
the affordability and income targeting requirements of Sec.  92.252 for 
the required period. Records must be kept for each family assisted.
    (viii) Records demonstrating that each multifamily rental housing 
project involving rehabilitation with refinancing complies with the 
refinancing guidelines established in accordance with Sec.  92.206(b).
    (ix) Records demonstrating that each lease for a tenant receiving 
tenant-based rental assistance and for an assisted rental housing unit 
complies with the tenant and participant protections of Sec.  92.253. 
Records must be kept for each family.
    (x) Records demonstrating that the purchase price or estimated value 
after rehabilitation for each homeownership housing project does not 
exceed 95 percent of the median purchase price for the area in 
accordance with Sec.  92.254(a)(2). The records must demonstrate how the 
estimated value was determined.
    (xi) Records demonstrating that each homeownership project meets the 
affordability requirements of Sec.  92.254 for the required period.
    (xii) Records demonstrating that any pre-award costs charged to the 
HOME allocation meet the requirements of Sec.  92.212.
    (xiii) Records demonstrating that a site and neighborhood standards 
review was conducted for each project which includes new construction of 
rental housing assisted under this part to determine that the site meets 
the requirements of 24 CFR 983.57(e)(2) and (e)(3), in accordance with 
Sec.  92.202.
    (xiv) Records (written agreements) demonstrating compliance with the

[[Page 608]]

written agreements requirements in Sec.  92.504.
    (4) Community Housing Development Organizations (CHDOs) Records. (i) 
Written agreements committing HOME funds to CHDO projects in accordance 
with Sec.  92.300(a).
    (ii) Records setting forth the efforts made to identify and 
encourage CHDOs, as required by Sec.  92.300(b).
    (iii) The name and qualifications of each CHDO and amount of HOME 
CHDO set-aside funds committed.
    (iv) Records demonstrating that each CHDO complies with the written 
agreements required by Sec.  92.504.
    (v) Records concerning the use of CHDO setaside funds, including 
funds used to develop CHDO capacity pursuant to Sec.  92.300(b).
    (vi) Records concerning the use of funds for CHDO operating expenses 
and demonstrating compliance with the requirements of Sec. Sec.  92.208, 
92.300(e) and 92.300(f).
    (vii) Records concerning the tenant participation plan required by 
Sec.  92.303.
    (viii) Records concerning project-specific assistance to CHDOs 
pursuant to Sec.  92.301, including the impediments to repayment, if 
repayment is waived.
    (5) Financial records. (i) Records, in accordance with 2 CFR 
200.302, identifying the source and application of funds for each fiscal 
year, including the formula allocation, any reallocation (identified by 
federal fiscal year appropriation), and any State or local funds 
provided under Sec.  92.102(b).
    (ii) Records concerning the HOME Investment Trust Fund Treasury 
account and local account required to be established and maintained by 
Sec.  92.500, including deposits, disbursements, balances, supporting 
documentation and any other information required by the program 
disbursement and information system established by HUD.
    (iii) Records identifying the source and application of program 
income, repayments and recaptured funds.
    (iv) Records demonstrating adequate budget control and other records 
required by 2 CFR 200.302, including evidence of periodic account 
reconciliations.
    (6) Program administration records. (i) Written policies, 
procedures, and systems, including a system for assessing risk of 
activities and projects and a system for monitoring entities consistent 
with this section, to ensure that the requirements of this part are met.
    (ii) Records demonstrating compliance with the written agreements 
required by Sec.  92.504.
    (iii) Records demonstrating compliance with the applicable uniform 
administrative requirements required by Sec.  92.505.
    (iv) Records documenting required inspections, monitoring reviews 
and audits, and the resolution of any findings or concerns.
    (7) Records concerning other Federal requirements--(i) Equal 
opportunity and fair housing records. (A) Data on the extent to which 
each racial and ethnic group and single-headed households (by gender of 
household head) have applied for, participated in, or benefited from, 
any program or activity funded in whole or in part with HOME funds.
    (B) Documentation of actions undertaken to meet the requirements of 
24 CFR part 135 which implements section 3 of the Housing Development 
Act of 1968, as amended (12 U.S.C. 1701u).
    (C) Documentation of the actions the participating jurisdiction has 
taken to affirmatively further fair housing, including documentation 
related to the participating jurisdiction's Assessment of Fair Housing 
as described in 24 CFR 5.168.
    (ii) Affirmative marketing and MBE/WBE records.
    (A) Records demonstrating compliance with the affirmative marketing 
procedures and requirements of Sec.  92.351.
    (B) Documentation and data on the steps taken to implement the 
jurisdiction's outreach programs to minority-owned (MBE) and female-
owned (WBE) businesses including data indicating the racial/ethnic or 
gender character of each business entity receiving a contract or 
subcontract of $25,000 or more paid, or to be paid, with HOME funds; the 
amount of the contract or subcontract, and documentation of 
participating jurisdiction's affirmative steps to assure that minority 
business and women's business enterprises have an equal opportunity to 
obtain or compete for contracts and subcontracts as

[[Page 609]]

sources of supplies, equipment, construction, and services.
    (iii) Records demonstrating compliance with the environmental review 
requirements of Sec.  92.352 and 24 CFR part 58, including flood 
insurance requirements.
    (iv) Records demonstrating compliance with the requirements of Sec.  
92.353 regarding displacement, relocation, and real property 
acquisition, including project occupancy lists identifying the name and 
address of all persons occupying the real property on the date described 
in Sec.  92.353(c)(2)(i)(A), moving into the property on or after the 
date described in Sec.  92.353(c)(2)(i)(A), and occupying the property 
upon completion of the project.
    (v) Records demonstrating compliance with the labor requirements of 
Sec.  92.354, including contract provisions and payroll records.
    (vi) Records demonstrating compliance with the lead-based paint 
requirements of part 35, subparts A, B, J, K, M and R of this title.
    (vii) Records supporting exceptions to the conflict of interest 
prohibition pursuant to Sec.  92.356.
    (viii) Records demonstrating compliance with debarment and 
suspension requirements in 2 CFR part 2424.
    (ix) Records concerning intergovernmental review, as required by 
Sec.  92.357.
    (x) Records of emergency transfers requested under 24 CFR 5.2005(e) 
and 92.359 pertaining to victims of domestic violence, dating violence, 
sexual assault, or stalking, including data on the outcomes of those 
requests.
    (b) States with State Recipients. A State that distributes HOME 
funds to State recipients must require State recipients to keep the 
records required by paragraphs (a)(2), (a)(3), (a)(5), (a)(6) and (a)(7) 
of this section, and such other records as the State determines to be 
necessary to enable the State to carry out its responsibilities under 
this part. The State need not duplicate the records kept by the State 
recipients. The State must keep records concerning its review of State 
recipients required under Sec.  92.201(b)(3).
    (c) Period of record retention. All records pertaining to each 
fiscal year of HOME funds must be retained for the most recent five year 
period, except as provided below.
    (1) For rental housing projects, records may be retained for five 
years after the project completion date; except that records of 
individual tenant income verifications, project rents and project 
inspections must be retained for the most recent five year period, until 
five years after the affordability period terminates.
    (2) For homeownership housing projects, records may be retained for 
five years after the project completion date, except for documents 
imposing recapture/resale restrictions which must be retained for five 
years after the affordability period terminates.
    (3) For tenant-based rental assistance projects, records must be 
retained for five years after the period of rental assistance 
terminates.
    (4) Written agreements must be retained for five years after the 
agreement terminates.
    (5) Records covering displacements and acquisition must be retained 
for five years after the date by which all persons displaced from the 
property and all persons whose property is acquired for the project have 
received the final payment to which they are entitled in accordance with 
Sec.  92.353.
    (6) If any litigation, claim, negotiation, audit, monitoring, 
inspection or other action has been started before the expiration of the 
required record retention period records must be retained until 
completion of the action and resolution of all issues which arise from 
it, or until the end of the required period, whichever is later.
    (d) Access to records. (1) The participating jurisdiction must 
provide citizens, public agencies, and other interested parties with 
reasonable access to records, consistent with applicable state and local 
laws regarding privacy and obligations of confidentiality.
    (2) HUD and the Comptroller General of the United States, any of 
their representatives, have the right of access to any pertinent books, 
documents, papers or other records of the participating jurisdiction, 
state recipients,

[[Page 610]]

and subrecipients, in order to make audits, examinations, excerpts, and 
transcripts.

[61 FR 48750, Sept. 16, 1996, as amended at 64 FR 50224, Sept. 15, 1999; 
67 FR 61757, Oct. 1, 2002; 72 FR 73493, Dec. 27, 2007; 78 FR 44682, July 
24, 2013; 80 FR 42366, July 16, 2015; 80 FR 75935, Dec. 7, 2015; 81 FR 
80805, Nov. 16, 2016]



Sec.  92.509  Performance reports.

    (a) Management reports. Each participating jurisdiction must submit 
management reports on its HOME Investment Partnerships Program in such 
format and at such time as HUD may prescribe.
    (b) Annual performance report. For annual performance report 
requirements, see 24 CFR part 91.



               Subpart L_Performance Reviews and Sanctions



Sec.  92.550  Performance reviews.

    (a) General. HUD will review the performance of each participating 
jurisdiction in carrying out its responsibilities under this part 
whenever determined necessary by HUD, but at least annually. In 
conducting performance reviews, HUD will rely primarily on information 
obtained from the participating jurisdiction's and, as appropriate, the 
State recipient's records and reports, findings from on-site monitoring, 
audit reports, and information generated from the disbursement and 
information system established by HUD. Where applicable, HUD may also 
consider relevant information pertaining to a participating 
jurisdiction's or State recipient's performance gained from other 
sources, including citizen comments, complaint determinations, and 
litigation. Reviews to determine compliance with specific requirements 
of this part will be conducted as necessary, with or without prior 
notice to the participating jurisdiction or State recipient. 
Comprehensive performance reviews under the standards in paragraph (b) 
of this section will be conducted after prior notice to the 
participating jurisdiction.
    (b) Standards for comprehensive performance review. A participating 
jurisdiction's performance will be comprehensively reviewed 
periodically, as prescribed by HUD, to determine:
    (1) For local participating jurisdictions and State participating 
jurisdictions administering their own HOME programs, whether the 
participating jurisdiction has committed the HOME funds in the United 
States Treasury account as required by Sec.  92.500 and expended the 
funds in the United States Treasury account as required by Sec.  92.500, 
and has met the requirements of this part, particularly eligible 
activities, income targeting, affordability, and matching requirements; 
or
    (2) For State participating jurisdictions distributing HOME funds to 
State recipients, whether the State has met the matching contribution 
and other requirements of this part; has distributed the funds in 
accordance with the requirements of this part; and has made such reviews 
and audits of its State recipients as may be appropriate to determine 
whether they have satisfied the requirements of paragraph (b)(1) of this 
section.



Sec.  92.551  Corrective and remedial actions.

    (a) General. HUD will use the procedures in this section in 
conducting the performance review as provided in Sec.  92.550 and in 
taking corrective and remedial actions.
    (b) Performance review. (1) If HUD determines preliminarily that the 
participating jurisdiction has not met a requirement of this part, the 
participating jurisdiction will be given notice of this determination 
and an opportunity to demonstrate, within the time prescribed by HUD 
(not to exceed 30 days) and on the basis of substantial facts and data, 
that it has done so.
    (2) If the participating jurisdiction fails to demonstrate to HUD's 
satisfaction that it has met the requirement, HUD will take corrective 
or remedial action in accordance with this section or Sec.  92.552.
    (c) Corrective and remedial actions. Corrective or remedial actions 
for a performance deficiency (failure to meet a provision of this part) 
will be designed to prevent a continuation of the deficiency; mitigate, 
to the extent possible, its adverse effects or consequences; and prevent 
its recurrence.

[[Page 611]]

    (1) HUD may instruct the participating jurisdiction to submit and 
comply with proposals for action to correct, mitigate and prevent a 
performance deficiency, including:
    (i) Preparing and following a schedule of actions for carrying out 
the affected activities, consisting of schedules, timetables, and 
milestones necessary to implement the affected activities;
    (ii) Establishing and following a management plan that assigns 
responsibilities for carrying out the remedial actions;
    (iii) Canceling or revising activities likely to be affected by the 
performance deficiency, before expending HOME funds for the activities;
    (iv) Reprogramming HOME funds that have not yet been expended from 
affected activities to other eligible activities;
    (v) Reimbursing its HOME Investment Trust Fund in any amount not 
used in accordance with the requirements of this part;
    (vi) Suspending disbursement of HOME funds for affected activities; 
and
    (vii) Establishing procedures to ensure compliance with HOME 
requirements;
    (viii) Making matching contributions as draws are made from the 
participating jurisdiction's HOME Investment Trust Fund United States 
Treasury Account and establishing a remedial plan to make up the 
matching contributions deficit; and
    (ix) If the participating jurisdiction is a metropolitan city, 
forming a consortium with the urban county if the urban county is 
willing to carry out the HOME program in the metropolitan city.
    (2) HUD may also change the method of payment from an advance to 
reimbursement basis and may require supporting documentation to be 
submitted for HUD review for each payment request before payment is 
made; determine the participating jurisdiction to be high risk and 
impose special conditions or restrictions on the next year's allocation 
in accordance with 2 CFR 200.207; and take other remedies that may be 
legally available, including remedies under 2 CFR 200.338.

[61 FR 48750, Sept. 16, 1996, as amended at 78 FR 44683, July 24, 2013; 
80 FR 75935, Dec. 7, 2015]



Sec.  92.552  Notice and opportunity for hearing; sanctions.

    (a) If HUD finds after reasonable notice and opportunity for hearing 
that a participating jurisdiction has failed to comply with any 
provision of this part and until HUD is satisfied that there is no 
longer any such failure to comply:
    (1) HUD shall reduce the funds in the participating jurisdiction's 
HOME Investment Trust Fund by the amount of any expenditures that were 
not in accordance with the requirements of this part; and
    (2) HUD may do one or more of the following:
    (i) Prevent withdrawals from the participating jurisdiction's HOME 
Investment Trust Fund for activities affected by the failure to comply;
    (ii) Restrict the participating jurisdiction's activities under this 
part to activities that conform to one or more model programs which HUD 
has developed in accordance with section 213 of the Act;
    (iii) Remove the participating jurisdiction from participation in 
allocations or reallocations of funds made available under subpart B or 
J of this part;
    (iv) Require the participating jurisdiction to make matching 
contributions in amounts required by Sec.  92.218(a) as HOME funds are 
drawn from the participating jurisdiction's HOME Investment Trust Fund 
United States Treasury Account. Provided, however, that HUD may on due 
notice suspend payments at any time after the issuance of a notice of 
opportunity for hearing pursuant to paragraph (b)(1) of this section, 
pending such hearing and a final decision, to the extent HUD determines 
such action necessary to preclude the further expenditure of funds for 
activities affected by the failure to comply.
    (b) Proceedings. When HUD proposes to take action pursuant to this 
section, the respondent in the proceedings will be the participating 
jurisdiction or, at

[[Page 612]]

HUD's option, the State recipient. Proceedings will be conducted in 
accordance with 24 CFR part 26.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 44840, Aug. 22, 1997; 
78 FR 44683, July 24, 2013]



             Subpart M_American Dream Downpayment Initiative

    Source: 69 FR 16766, Mar. 30, 2004, unless otherwise noted.



Sec.  92.600  Purpose.

    This subpart describes the requirements for the HOME Program 
American Dream Downpayment Initiative (ADDI). Through the ADDI, HUD 
makes formula grants to participating jurisdictions that qualify for 
allocations to assist low-income families achieve homeownership in 
accordance with the provisions of this subpart. Unless otherwise noted 
in this subpart, the HOME Program requirements contained in subparts B 
through L of this part do not apply to the ADDI.



Sec.  92.602  Eligible activities.

    (a) Eligible activities. ADDI funds may only be used for:
    (1) Downpayment assistance towards the purchase of single family 
housing by low-income families who are first-time homebuyers; and
    (2) Rehabilitation that is completed in conjunction with the home 
purchase assisted with ADDI funds. The rehabilitation assisted with ADDI 
funds, including the reduction of lead paint hazards and the remediation 
of other home health hazards, must be completed within one year of the 
purchase of the home. Total rehabilitation shall not exceed 20 percent 
of the participating jurisdiction's ADDI fiscal year formula allocation. 
FY2003 ADDI funds may not be used for rehabilitation.
    (3) Manufactured housing. ADDI funds may be used to purchase a 
manufactured housing unit and purchase a manufactured housing lot. The 
manufactured housing unit must, at the time of project completion, be 
connected to permanent utility hook-ups and be located on land that is 
owned by the manufactured housing owner, owned as a cooperative, or is 
subject to a leasehold interest with a term equal to at least the term 
of the mortgage financing on the unit or the period of affordability 
(whichever is greater).
    (b) Eligible project costs. ADDI funds may be used for the following 
eligible costs:
    (1) Acquisition costs. The costs of acquiring single family housing.
    (2) Rehabilitation costs. The eligible development hard costs for 
rehabilitation projects described in Sec.  92.206(a) and the costs for 
reduction of lead paint hazards and the remediation of other home health 
hazards. FY2003 ADDI funds may not be used for rehabilitation.
    (3) Related soft costs. Reasonable and necessary costs incurred by 
the homebuyer or participating jurisdiction and associated with the 
financing of single family housing acquisition and rehabilitation. These 
costs include, but are not limited to:
    (i) Costs to process and settle the financing for purchase of a 
home, such as private lender origination fees, credit report fees, fees 
for title evidence, fees for recordation and filing of legal documents, 
attorneys fees, and private appraisal fees.
    (ii) Architectural, engineering, or related professional services 
required to prepare plans, drawings, specifications, or work write-ups.
    (iii) Costs to provide information services, such as fair housing 
information to prospective homeowners.
    (iv) Staff and overhead costs directly related to carrying out the 
project, such as work specifications preparation, loan processing 
inspections, and other services related to assisting a potential 
homebuyer (e.g., housing counseling), which may be charged to project 
costs only if the individual purchases single family housing with ADDI 
assistance.
    (v) Costs of environmental review and release of funds (in 
accordance with 24 CFR part 58) that are directly related to the 
project.
    (4) Ineligible costs. ADDI funds may not be used for the development 
costs (hard costs or soft costs) of new construction of housing or for 
rental assistance.
    (c) Forms of investment. A participating jurisdiction may invest 
ADDI

[[Page 613]]

funds as interest-bearing loans or advances, non-interest bearing loans 
or advances, interest subsidies consistent with the purposes of this 
subpart, deferred payment loans, grants, or other forms of assistance 
that HUD determines to be consistent with this subpart. Each 
participating jurisdiction has the right to establish the terms of 
assistance, subject to the requirements of this subpart.
    (d) Minimum amount of assistance. The minimum amount of ADDI funds 
in combination with HOME funds that must be invested in a project is 
$1,000.
    (e) Maximum amount of assistance. The amount of ADDI funds provided 
to any family shall not exceed the greater of six percent of the 
purchase price of the single family housing or $10,000. This limitation 
does not apply to FY2003 ADDI funds.
    (f) Limitation on subrecipients and contractors. A participating 
jurisdiction may not provide ADDI funds to an entity or organization 
that provides downpayment assistance, if the activities of that entity 
or organization are financed in whole or in part, directly or 
indirectly, by contributions, service fees, or other payments from the 
sellers of housing, whether or not made in conjunction with the sale of 
specific housing acquired with ADDI funds.

[69 FR 16766, Mar. 30, 2004, as amended at 72 FR 16685, Apr. 4, 2007]



Sec.  92.604  ADDI allocation formula.

    (a) General. HUD will provide ADDI funds to participating 
jurisdictions in amounts determined by the formula described in this 
section.
    (b) Allocation to states that are participating jurisdictions. HUD 
will provide ADDI funds to each state in an amount that is equal to the 
percentage of the national total of low-income households residing in 
rental housing in the state, as determined on the basis of the most 
recent available U.S. census data (as adjusted by HUD).
    (c) Local participating jurisdictions. Subject to paragraph (d) of 
this section, HUD will further allocate to each local participating 
jurisdiction located within a state an amount equal to the percentage of 
the state-wide total of low-income households residing in rental housing 
in such participating jurisdiction, as determined on the basis of the 
most recent available U.S. census data (as adjusted by HUD).
    (d) Limitation on allocations to local participating jurisdictions. 
(1) Allocations under paragraph (c) of this section shall be made only 
if the local participating jurisdiction:
    (i) Has a total population of 150,000 individuals or more, as 
determined on the basis of the most recent available U.S. census data 
(as adjusted by HUD); or
    (ii) Would receive an allocation of $50,000 or more.
    (2) Any allocation that would have otherwise been made to a local 
participating jurisdiction that does not meet the requirements of 
paragraph (d)(1) of this section shall revert back to the state in which 
the participating jurisdiction is located.
    (e) Consortia with members in more than one state. A consortium with 
members in more than one state will receive an allocation if the 
consortium meets the requirements described in paragraph (d) of this 
section.
    (f) Allocation of FY2003 ADDI funds. For the allocation of FY2003 
ADDI funds, HUD will consider a participating jurisdiction's need for, 
and prior commitment to, assistance to homebuyers. Puerto Rico is a 
``state'' for FY2003 ADDI funds.
    (1) Need. The need of the participating jurisdiction for assistance 
to homebuyers is measured by its ADDI formula allocation, as calculated 
under paragraphs (b) through (e) of this section.
    (2) Prior commitment. Only those participating jurisdictions that 
have demonstrated prior commitment to assistance to homebuyers will 
receive FY2003 ADDI funds. A participating jurisdiction has demonstrated 
prior commitment to homebuyers if it has previously committed funds to 
such purpose under the HOME program, the Community Development Block 
Grants (CDBG) program, mortgage revenue bonds, or existing funding from 
state and local governments.



Sec.  92.606  Reallocations.

    If any funds allocated to a participating jurisdiction under Sec.  
92.604 become available for reallocation, the

[[Page 614]]

funds shall be reallocated in the next fiscal year in accordance with 
Sec.  92.604.



Sec.  92.608  Consolidated plan.

    To receive an ADDI formula allocation, a participating jurisdiction 
must address the use of the ADDI funds in its consolidated plan 
submitted in accordance with 24 CFR part 91.



Sec.  92.610  Program requirements.

    The following program requirements contained in subpart E of this 
part apply to the ADDI:
    (a) Private-public partnership. The private-public partnership 
provisions contained in Sec.  92.200 apply to the ADDI.
    (b) Distribution of assistance. The distribution of assistance 
requirements contained in Sec.  92.201 apply to the ADDI.
    (c) Income determinations. The income determination requirements 
contained in Sec.  92.203 apply to the ADDI.
    (d) Pre-award costs. The requirements regarding pre-award costs 
contained in Sec.  92.212 apply to the ADDI.
    (e) Matching contribution requirement. The matching contribution 
requirements contained in Sec. Sec.  92.218 through 92.222 apply to 
FY2003 ADDI funds only.



Sec.  92.612  Project requirements.

    The following project requirements contained in subpart F of this 
part apply to the ADDI:
    (a) Maximum per-unit subsidy amount and subsidy layering. The 
maximum per-unit subsidy limits and subsidy layering requirements 
contained in Sec.  92.250 apply to the total HOME and ADDI funds in a 
project.
    (b) Property standards. Housing assisted with ADDI funds must meet 
the property standards contained in Sec.  92.251.
    (c) Qualification as affordable housing. Housing assisted with ADDI 
funds must meet the affordability requirements contained in Sec.  
92.254(a) and (c). If a project receives both HOME and ADDI funds, the 
total of HOME and ADDI funds in the project is used for calculating the 
period of affordability described in Sec.  92.254(a)(4) and applied to 
resales (Sec.  92.254(a)(5)(i)) and recaptures (Sec.  92.254(a)(5)(ii)).
    (d) Faith-based organizations. Faith-based organizations are 
eligible to participate in the ADDI as subrecipients or contractors as 
provided in Sec.  92.257.



Sec.  92.614  Other Federal requirements.

    (a) The following Federal requirements contained in subpart H of 
this part apply to the ADDI:
    (1) Other Federal requirements and nondiscrimination. The Federal 
and nondiscrimination requirements contained in Sec.  92.350 apply to 
the ADDI.
    (2) Environmental review. The environmental review requirements 
contained in Sec.  92.352 apply to the ADDI.
    (3) Affirmative marketing. The affirmative marketing requirements 
contained in Sec.  92.351(a).
    (4) Labor. The labor requirements contained in Sec.  92.354 apply to 
ADDI.
    (5) Lead-based paint. The lead-based paint prevention and abatement 
requirements contained in Sec.  92.355 apply to the ADDI.
    (6) Conflict of interest. The conflict of interest requirements 
contained in Sec.  92.356 apply to the ADDI.
    (7) Consultant activities. The requirements regarding consultant 
activities contained in Sec.  92.358 apply to the ADDI.
    (b) The following Federal requirements contained in subpart H of 
this part do not apply to the ADDI:
    (1) Displacement, relocation, and acquisition. The displacement, 
relocation, and acquisition requirements implementing the Uniform 
Relocation Assistance and Real Property Acquisition Policies Act (42 
U.S.C. 4201-4655) and the implementing regulations at 49 CFR part 24, 
contained in Sec.  92.353 do not apply to ADDI, except the requirements 
do apply to FY2003 ADDI funds.
    (2) Executive Order 12372. The requirements of Executive Order 12372 
(entitled ``Intergovernmental Review) described in Sec.  92.357.

[69 FR 16766, Mar. 30, 2004, as amended at 78 FR 44683, July 24, 2013]



Sec.  92.616  Program administration.

    The following program administration requirements contained in 
subpart K of this part apply to the ADDI:
    (a) HOME Investment Trust Fund. The requirements regarding the HOME 
Investment Trust Fund contained in Sec.  92.500 apply to the ADDI, with 
the exception of paragraphs (c)(2) and (d)(1)(A).

[[Page 615]]

    (b) HOME Investment Partnership Agreement. The requirements 
regarding HOME Investment Partnership Agreements contained in Sec.  
92.501 apply to the ADDI.
    (c) Program disbursement and information system. The requirements 
regarding program disbursement and information systems contained in 
Sec.  92.502 apply to the ADDI.
    (d) Program income, repayments and recaptured funds. The 
requirements regarding program income, repayments, and recaptured funds 
contained in Sec.  92.503 apply to the ADDI, except the program income 
and recaptured funds must be deposited in the participating 
jurisdiction's HOME investments trust fund local account and used in 
accordance with the HOME program requirements.
    (e) Participating jurisdiction responsibilities and written 
agreements. The requirements regarding participating jurisdiction 
responsibilities and written agreements contained in Sec.  92.504 apply 
to the ADDI, with the modification that the written agreement is not 
required to cover any HOME requirement that is not applicable to the 
ADDI.
    (f) Applicability of uniform administrative requirements. The 
uniform administrative requirements contained in Sec.  982.505 apply to 
the ADDI.
    (g) Audit. The audit requirements contained in Sec.  92.506 apply to 
the ADDI.
    (h) Closeout. The closeout requirements contained in Sec.  92.507 
apply to the ADDI.
    (i) Recordkeeping. The project records must include records 
demonstrating that the family qualifies as a first-time homebuyer. The 
recordkeeping requirements contained in Sec.  92.508 apply to the ADDI, 
with the exception of the following paragraphs:
    (1) Paragraph (a)(1);
    (2) Paragraphs (a)(2)(iv), (a)(2)(v), (a)(2)(vi), (a)(2)(xi), and 
(a)(2)(xii);
    (3) Paragraphs (a)(3)(vi), (a)(3)(vii), (a)(3)(viii), (a)(3)(ix), 
and (a)(3)(xiii);
    (4) Paragraph (a)(4);
    (5) Paragraphs (a)(7)(i)(B), (a)(7)(i)(C), (a)(7)(ii)(A), and 
(a)(7)(ix) (in addition, the requirements of paragraph (a)(7)(iv) apply 
to FY2003 ADDI funds only); and
    (6) Paragraphs (c)(1) and (c)(3) (in addition, the requirements of 
paragraph (c)(5) apply to FY2003 ADDI funds only).
    (j) Performance reports. The requirements regarding performance 
reports contained in Sec.  92.509 apply to the ADDI.



Sec.  92.618  Performance reviews and sanctions.

    HUD will review the performance of participating jurisdictions in 
carrying out its responsibilities under the ADDI in accordance with the 
policies and procedures contained in subpart L of this part.



PART 93_HOUSING TRUST FUND--Table of Contents



                            Subpart A_General

Sec.
93.1 Overview.
93.2 Definitions.
93.3 Waivers.

               Subpart B_Allocation Formula; Reallocations

93.50 Formula allocation.
93.51 Formula factors.
93.52 Minimum allocations.
93.53 Federal Register notice of formula allocations.
93.54 Reallocations by formula.

  Subpart C_Participation and Submission Requirements; Distribution of 
                               Assistance

93.100 Participation and submission requirements.
93.101 Distribution of assistance.

                     Subpart D_Program Requirements

93.150 Site and neighborhood standards.
93.151 Income determinations.

              Subpart E_Eligible and Prohibited Activities

93.200 Eligible activities: General.
93.201 Eligible project costs.
93.202 Eligible administrative and planning costs.
93.203 HTF funds and public housing.
93.204 Prohibited activities and fees.

                       Subpart F_Income Targeting

93.250 Income targeting.

                     Subpart G_Project Requirements

93.300 Maximum per-unit subsidy amount, underwriting, and subsidy 
          layering.
93.301 Property standards.

[[Page 616]]

93.302 Qualification as affordable housing: rental housing.
93.303 Tenant protections and selection.
93.304 Qualification as affordable housing: homeownership.
93.305 Qualification as affordable housing: modest housing requirements 
          for homeownership; resale or recapture requirements.

                  Subpart H_Other Federal Requirements

93.350 Other Federal requirements and nondiscrimination; affirmative 
          marketing.
93.351 Lead-based paint.
93.352 Displacement, relocation, and acquisition.
93.353 Conflict of interest.
93.354 Funding Accountability and Transparency Act.
93.355 Eminent domain.
93.356 VAWA requirements.

                    Subpart I_Program Administration

93.400 Housing Trust Fund (HTF) accounts.
93.401 HTF grant agreement.
93.402 Program disbursement and information system.
93.403 Program income and repayments.
93.404 Grantee responsibilities; written agreements; onsite inspections; 
          financial oversight.
93.405 Applicability of uniform administrative requirements, cost 
          principles, and audits.
93.406 Audits.
93.407 Recordkeeping.
93.408 Performance reports.

               Subpart J_Performance Reviews and Sanctions

93.450 Accountability of recipients.
93.451 Performance reviews.
93.452 Corrective and remedial actions.
93.453 Notice and opportunity for hearing; sanctions.

    Authority: 42 U.S.C. 3535(d), 12 U.S.C. 4568.

    Source: 80 FR 5220, Jan. 30, 2015, unless otherwise noted.



                            Subpart A_General



Sec.  93.1  Overview.

    (a) This part implements the Housing Trust Fund (HTF) program 
established under section 1338 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992, as amended (12 U.S.C. 4501 
et seq.) (the Act). In general, under the HTF program, HUD allocates 
funds by formula to eligible States to increase and preserve the supply 
of decent, safe, sanitary, and affordable housing, with primary 
attention to rental housing for extremely low-income and very low-income 
households, including homeless families.
    (b) Section 1337 of the Act requires a percentage of the unpaid 
principal balance of total new business for the Federal Home Loan 
Mortgage Corporation (Freddie Mac) and the Federal National Mortgage 
Association (Fannie Mae) (collectively, the government-sponsored 
enterprises or GSEs) to be setaside and allocated as a dedicated source 
of annual funding for the HTF, unless allocations are suspended by the 
Director of the Federal Housing Finance Agency, the agency that 
regulates the GSEs. These funds will be deposited into an HTF account 
established in the Treasury of the United States by the Secretary of the 
Treasury to carry out the HTF program. The Act also provides that the 
HTF may be funded with amounts appropriated, transferred, or credited to 
the HTF under other provisions of law.



Sec.  93.2  Definitions.

    1937 Act means the United States Housing Act of 1937 (42 U.S.C. 1437 
et seq.).
    Act means the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992, as amended (12 U.S.C. 4501 et seq).
    Annual income. See Sec.  93.151.
    Commitment means:
    (1) The grantee has executed a legally binding written agreement 
(that includes the date of the signature of each person signing the 
agreement) with an eligible recipient for a project that meets the 
definition of ``commit to a specific local project'' of paragraph (2) of 
this definition.
    (2) ``Commit to a specific local project'' means:
    (i) If the project consists of rehabilitation or new construction 
(with or without acquisition), the grantee and recipient have executed a 
written legally binding agreement under which HTF assistance will be 
provided to the recipient for an identifiable project for which 
construction can reasonably be expected to start within 12 months of

[[Page 617]]

the agreement date. The written agreement for rehabilitation or new 
construction of rental housing may also provide operating cost 
assistance and/or operating cost assistance reserves.
    (ii) If the project consists of acquisition of standard housing and 
the grantee is providing HTF funds to a recipient to acquire rental 
housing, or to a first-time homebuyer family to acquire single family 
housing for homeownership, the grantee and recipient or the family have 
executed a written agreement under which HTF assistance will be provided 
for the purchase of the rental housing or single family housing and the 
property title will be transferred to the recipient or family within 6 
months of the agreement date. The written agreement for acquisition of 
rental housing may also provide operating cost assistance and/or 
operating cost assistance reserves.
    (iii) If the project is for renewal of operating cost assistance or 
operating cost assistance reserves, the grantee and the recipient must 
have executed a legally binding written agreement under which HTF funds 
will be provided to the recipient for operating cost assistance or 
operating cost assistance reserves for the identified HTF project.
    Consolidated plan means the plan submitted and approved in 
accordance with 24 CFR part 91.
    Displaced homemaker means an individual who:
    (1) Is an adult;
    (2) Has not worked full-time full-year in the labor force for a 
number of years, but has, during such years, worked primarily without 
remuneration to care for the home and family; and
    (3) Is unemployed or underemployed and is experiencing difficulty in 
obtaining or upgrading employment.
    Extremely low-income families means low-income families whose annual 
incomes do not exceed 30 percent of the median family income of a 
geographic area, as determined by HUD with adjustments for smaller and 
larger families.
    Family has the same meaning given that term in 24 CFR 5.403.
    First-time homebuyer means an individual and his or her spouse who 
have not owned a home during the 3-year period prior to purchase of a 
home with assistance under this part. The term first-time homebuyer also 
includes an individual who is a displaced homemaker or single parent, as 
those terms are defined in this section.
    Grantee means the State or the State-designated entity that receives 
the HTF funds from HUD.
    HTF allocation plan means the annual submission to HUD required by 
the Act that describes how the grantee will distribute its HTF funds, 
including how it will use the funds to address its priority housing 
needs, what activities may be undertaken with those funds, and how 
recipients and projects will be selected to receive those funds. See 24 
CFR 91.220(l)(4) and 91.320(k)(5).
    HTF funds means funds made available under this part through formula 
allocations and reallocations, plus program income.
    Homeownership means ownership in fee simple title in a 1- to 4-unit 
dwelling or in a condominium unit, or equivalent form of ownership 
approved by HUD.
    (1) The land may be owned in fee simple or the homeowner may have a 
99-year ground lease.
    (i) For housing located in the insular areas, the ground lease must 
be 40 years or more.
    (ii) For housing located on Indian trust or restricted Indian lands 
or a Community Land Trust, the ground lease must be 50 years or more.
    (iii) For manufactured housing, the ground lease must be for a 
period at least equal to the applicable period of affordability in Sec.  
93.304(e).
    (2) Right to possession under a contract for deed, installment 
contract, or land contract (pursuant to which the deed is not given 
until the final payment is made) is not an equivalent form of ownership.
    (3) The ownership interest may be subject only to the restrictions 
on resale required under Sec.  93.304; mortgages, deeds of trust, or 
other liens or instruments securing debt on the property as approved by 
the grantee; or any other restrictions or encumbrances that do not 
impair the good and marketable nature of title to the ownership 
interest.

[[Page 618]]

    (4) The grantee must determine whether or not ownership or 
membership in a cooperative or mutual housing project constitutes 
homeownership under State law; however, if the cooperative or mutual 
housing project receives low income housing tax credits, the ownership 
or membership does not constitute homeownership.
    Homeownership counseling has the same meaning given the term in 24 
CFR 5.100, and is a type of housing counseling.
    Household means one or more persons occupying a housing unit.
    Housing includes manufactured housing and manufactured housing lots, 
permanent housing for disabled homeless persons, single-room occupancy 
housing, and group homes. Housing does not include emergency shelters 
(including shelters for disaster victims) or facilities such as nursing 
homes, convalescent homes, hospitals, residential treatment facilities, 
correctional facilities, halfway houses, housing for students, or 
dormitories (including farmworker dormitories).
    Housing counseling has the meaning given the term in 24 CFR 5.100.
    HUD means the Department of Housing and Urban Development.
    Income-eligible means a family, homeowner, or household (as 
appropriate given the context of the specific regulatory provision) that 
is very low-income, extremely low-income, or both, depending on the 
income-targeting requirements set forth in Sec.  93.250.
    Insular areas means Guam, the Commonwealth of the Northern Mariana 
Islands, the United States Virgin Islands, and American Samoa.
    Neighborhood means a geographic location designated in comprehensive 
plans, ordinances, or other local documents as a neighborhood, village, 
or similar geographical designation that is within the boundary but does 
not encompass the entire area of a unit of general local government; 
except that if the unit of general local government has a population 
under 25,000, the neighborhood may, but need not, encompass the entire 
area of a unit of general local government.
    Poverty line is defined in section 673 of the Omnibus Budget 
Reconciliation Act of 1981 (42 U.S.C. 9902).
    Program income means gross income received by the grantee that is 
directly generated from the use of HTF funds. When program income is 
generated by housing that is only partially assisted with HTF funds, the 
income shall be prorated to reflect the percentage of HTF funds used. 
Program income includes, but is not limited to, the following:
    (1) Proceeds from the disposition by sale or long-term lease of real 
property acquired, rehabilitated, or constructed with HTF funds;
    (2) Gross income from the use or rental of real property owned by 
the grantee that was acquired, rehabilitated, or constructed with HTF 
funds, minus costs that were incidental to generation of the income; 
therefore, program income does not include gross income from the use, 
rental, or sale of real property received by the recipient, unless the 
funds are paid by the recipient to the grantee);
    (3) Payments of principal and interest on loans made using HTF 
funds;
    (4) Proceeds from the sale of loans made with HTF funds;
    (5) Proceeds from the sale of obligations secured by loans made with 
HTF funds;
    (6) Interest earned on program income pending its disposition; and
    (7) Any other interest or return on the investment of HTF funds, as 
permitted under Sec.  93.200(b).
    Project means a site or sites together with any building (including 
a manufactured housing unit) or buildings located on the site(s) that 
are under common ownership, management, and financing and are to be 
assisted with HTF funds as a single undertaking under this part. The 
project includes all the activities associated with the site and 
building.
    Project completion means that all necessary title transfer 
requirements and construction work have been performed, the project 
complies with the requirements of this part (including the property 
standards under Sec.  93.301 of this part), the final drawdown has been 
disbursed for the project, and the project completion information has 
been entered in the disbursement and information system established by

[[Page 619]]

HUD, except that with respect to rental housing project completion, for 
the purposes of Sec.  93.402(d) of this part, project completion occurs 
upon completion of construction before occupancy.
    Recipient means an organization, agency, or other entity (including 
a public housing agency, or a for-profit entity or a nonprofit entity) 
that receives HTF assistance from a grantee as an owner or developer to 
carry out an HTF-assisted project. A recipient must:
    (1) Make acceptable assurances to the grantee that it will comply 
with the requirements of the HTF program during the entire period that 
begins upon selection of the recipient to receive HTF funds, and ending 
upon the conclusion of all HTF-funded activities;
    (2) Demonstrate the ability and financial capacity to undertake, 
comply, and manage the eligible activity;
    (3) Demonstrate its familiarity with the requirements of other 
Federal, State, or local housing programs that may be used in 
conjunction with HTF funds to ensure compliance with all applicable 
requirements and regulations of such programs; and
    (4) Have demonstrated experience and capacity to conduct an eligible 
HTF activity as evidenced by its ability to:
    (i) Own, construct, or rehabilitate, and manage and operate an 
affordable multifamily rental housing development; or
    (ii) Design, construct, or rehabilitate, and market affordable 
housing for homeownership.
    (iii) Provide forms of assistance, such as down payments, closing 
costs, or interest rate buydowns for purchasers.
    Reconstruction means the rebuilding, on the same lot, of housing 
standing on a site at the time of project commitment, except that 
housing that was destroyed may be rebuilt on the same lot if HTF funds 
are committed within 12 months of the date of destruction. The number of 
housing units on the lot may not be decreased or increased as part of a 
reconstruction project, but the number of rooms per unit may be 
increased or decreased. Reconstruction also includes replacing an 
existing substandard unit of manufactured housing with a new or standard 
unit of manufactured housing. Reconstruction is new construction for 
purposes of this part.
    Shortage of standard rental units both affordable and available to 
extremely low-income renter households means
    (1) For any State or other geographical area the gap between:
    (i) The number of units with complete plumbing and kitchen 
facilities with a rent that does not exceed 30 percent of 30 percent of 
the adjusted area median income (AMI) as determined by HUD that either 
are occupied by extremely low-income renter households or are vacant for 
rent; and
    (ii) The number of extremely low-income renter households.
    (2) If the number of units described in paragraph (1)(i) of this 
definition exceeds the number of extremely low-income households 
described in paragraph (1)(ii) of this definition, there is no shortage.
    Single family housing means a one-to four-family residence, 
condominium unit, cooperative unit, combination of manufactured housing 
and lot, or manufactured housing lot.
    Single parent means an individual who:
    (1) Is unmarried or legally separated from a spouse; and
    (2) Has one or more minor children of whom the individual has 
custody or joint custody, or is pregnant.
    State means any State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the 
Northern Mariana Islands, Guam, the Virgin Islands, and American Samoa.
    State-designated entity means a State housing finance agency, 
tribally designated housing entity, or any other qualified 
instrumentality of the State that is designated by the State to be the 
grantee.
    Subgrantee means a unit of general local government or State agency 
selected by the grantee to administer all or a portion of its HTF 
program. A local government subgrantee must have an approved 
consolidated plan submitted in accordance with 24 CFR part 91. The 
selection of a subgrantee by a grantee is not subject to the procurement 
procedures and requirements.

[[Page 620]]

    Tribally designated housing entity has the meaning given the term in 
section 4 of the Native American Housing Assistance and Self-
Determination Act of 1997 (25 U.S.C. 4103).
    Unit of general local government means a city, town, township, 
county, parish, village, or other general purpose political subdivision 
of a State; and any agency or instrumentality thereof that is 
established pursuant to legislation and designated by the chief 
executive to act on behalf of the jurisdiction with regard to provisions 
of this part. When a county is an urban county, the urban county is the 
unit of general local government for purposes of the HTF program.
    Urban county has the meaning given the term in 24 CFR 570.3.
    Very low-income renter households means a household whose income is 
in excess of 30 percent but not greater than 50 percent of the area 
median income, with adjustments for smaller and larger families, as 
determined by HUD.
    Very low-income families means low-income families whose annual 
incomes are in excess of 30 percent but not greater than 50 percent of 
the median family income of a geographic area, as determined by HUD with 
adjustments for smaller and larger families. ``Very low-income family'' 
also includes any family that resides in a nonmetropolitan area that 
does not exceed the poverty line applicable to the family size involved.

[80 FR 5220, Jan. 30, 2015, as amended at 81 FR 90657, Dec. 14, 2016]



Sec.  93.3  Waivers.

    HUD may, upon a determination of good cause and subject to statutory 
limitations, waive any provision of this part and delegate this 
authority in accordance with section 106 of the Department of Housing 
and Urban Development Reform Act of 1989 (42 U.S.C. 3535(q)).



               Subpart B_Allocation Formula; Reallocations



Sec.  93.50  Formula allocation.

    (a) Allocations to States. HUD will provide to the States 
allocations of funds in amounts determined by the formula described in 
this part.
    (b) Amount available for allocation. The amount of funds available 
for allocation by the formula is the balance remaining after providing 
for other purposes authorized by Congress, in accordance with the Act 
and appropriations.
    (c) Allocations for the insular areas. The allocation amount for 
each insular area is determined by multiplying the funds available times 
the ratio of renter households in each insular area to the total number 
of renter households in the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the insular areas.
    (d) Allocations for the 50 States, the Commonwealth of Puerto Rico, 
and the District of Columbia--(1) Amounts available for allocations. The 
amount of funds that is available for allocation by the formula to the 
50 States, the Commonwealth of Puerto Rico, and the District of Columbia 
is determined using the most current data available from the U.S. Census 
Bureau that is available for the same year for all these geographic 
areas. The amount is equal to the balance of funds remaining after 
determining formula allocations for the insular areas under Sec.  
93.50(c). For purposes of paragraphs (d)(1) and (2) of this section, the 
term ``State'' means any of the 50 United States, the Commonwealth of 
Puerto Rico, and the District of Columbia.
    (2) Allocations. (i) Allocations to the States are determined using 
the four needs factors described in Sec.  93.51(a) through (d), 
multiplying each factor by the amount available under Sec.  93.51(d)(1) 
by its priority weight, and summing the four factors for each State.
    (ii) The factor described in Sec.  93.51(a) is weighted 0.5. The 
factors described in Sec.  93.51(b) and (d) are weighted at 0.125 and 
the factor described in Sec.  93.51(c) of this section is weighted at 
0.25.
    (iii) The sum of the four needs factors for each State is then 
multiplied by the construction cost factor described in Sec.  93.51(e) 
of this section and by the total amount of funds available for State 
allocations.

[[Page 621]]



Sec.  93.51  Formula factors.

    (a) Need factor one. The ratio of the shortage of standard rental 
units both affordable and available to extremely low-income renter 
households in the State to the aggregate shortage of standard rental 
units both affordable and available to extremely low-income renter 
households in all the States.
    (b) Need factor two. The ratio of the shortage of standard rental 
units both affordable and available to very low-income renter households 
in the State to the aggregate shortage of standard rental units both 
affordable and available to very low-income renter households in all the 
States.
    (c) Need factor three. The ratio of:
    (1) Extremely low-income renter households in the State living with 
either incomplete kitchen or plumbing facilities, more than one person 
per room, or paying more than 50 percent of income for housing costs, to
    (2) The aggregate number of extremely low-income renter households 
living with either incomplete kitchen or plumbing facilities, more than 
one person per room, or paying more than 50 percent of income for 
housing costs in all the States.
    (d) Need factor four. The ratio of very low-income renter households 
in the State paying more than 50 percent of income on rent relative to 
the aggregate number of very low-income renter households paying more 
than 50 percent of income on rent in all the States.
    (e) Construction cost factor. The resulting sum calculated from the 
factors described in paragraphs (a) through (d) of this section shall be 
multiplied by the relative cost of construction in the state. For 
purposes of calculating this factor, the term ``cost of construction'':
    (1) Means the cost of construction or building rehabilitation in the 
State relative to the national cost of construction or building 
rehabilitation; and
    (2) Is calculated so that values higher than 1.0 indicate that the 
State's construction costs are higher than the national average, a value 
of 1.0 indicates that the State's construction costs are exactly the 
same as the national average, and values lower than 1.0 indicate that 
the State's cost of construction are lower than the national average.



Sec.  93.52  Minimum allocations.

    (a) In accordance with the HTF statute, HUD is required to provide 
each of the States and the District of Columbia with a minimum grant of 
$3 million. If the formula amount determined for a fiscal year is less 
than $3 million to any of the 50 States or the District of Columbia, 
then the allocation to that State or the District of Columbia is 
increased to $3 million, and allocations to States and the District of 
Columbia above $3 million and to the Commonwealth of Puerto Rico and the 
insular areas are adjusted by an equal amount on a pro rata basis.
    (b) If in any fiscal year, funding in the HTF is insufficient to 
provide each of the 50 States and the District of Columbia with a 
minimum grant of $3 million, HUD will, through notice published in the 
Federal Register for public comment, describe an alternative method for 
allocating grant funds to the 50 States and the District of Columbia.



Sec.  93.53  Federal Register notice of formula allocations.

    Not later than 60 calendar days after the date that HUD determines 
the formula amounts under this subpart, HUD will publish a notice in the 
Federal Register announcing the availability of the allocations to 
States.



Sec.  93.54  Reallocations by formula.

    (a) HUD will reallocate under this section:
    (1) Any HTF funds available for reallocation because HUD reduced or 
recaptured funds from an HTF grantee under Sec.  93.400(d) for failure 
to commit or expend the funds within the time specified, or under Sec.  
93.453 for failure to comply substantially with any provision of this 
part;
    (2) Any HTF funds reduced for failure by the grantee to obtain funds 
required to be reimbursed or returned under Sec.  93.450; and
    (3) Any HTF funds remitted to HUD under Sec.  93.403(b)(4) when a 
grantee ceases to be an HTF grantee for any reason.

[[Page 622]]

    (b) Any reallocation of funds must be made only among all 
participating States, except those States from which the funds were 
recaptured or reduced.
    (c) Any amounts that become available for reallocation shall be 
added to amounts for formula allocation in the succeeding fiscal year.



  Subpart C_Participation and Submission Requirements; Distribution of 
                               Assistance



Sec.  93.100  Participation and submission requirements.

    (a) Notification of intent to participate. Not later than 30 
calendar days after HUD's publication of the formula allocation amounts 
as provided in Sec.  93.53, the State must notify HUD in writing of its 
intention to become an HTF grantee for the first year of HTF funding.
    (b) Submission requirement. To receive its HTF grant, the grantee 
must submit a consolidated plan in accordance with 24 CFR part 91.



Sec.  93.101  Distribution of assistance.

    (a) A State may choose to be the HTF grantee to receive and 
administer its grant or it may choose a qualified State-designated 
entity to be the HTF grantee.
    (b) Each grantee is responsible for distributing HTF funds 
throughout the State according to the State's assessment of the priority 
housing needs within the State, as identified in the State's approved 
consolidated plan.
    (c) An HTF grantee may choose to directly fund projects by eligible 
recipients in accordance with the State's HTF allocation plan or to fund 
projects by eligible recipients through one or more subgrantees. An HTF 
subgrantee that is a unit of general local government must have a 
consolidated plan under 24 CFR part 91, and must include an HTF 
allocation plan in its consolidated plan (see 24 CFR 91.220(l)(4)), and 
must select projects by eligible recipients in accordance with its HTF 
allocation plan. Because a State has only one consolidated plan, and HTF 
allocation plan for an HTF subgrantee that is a State agency must be 
included in the State's HTF allocation plan. The grantee or subgrantee 
must determine that the applicant is an eligible recipient that meets 
the definition of ``recipient'' in Sec.  93.2 before awarding HTF 
assistance.
    (d) If the HTF grantee subgrants HTF funds to subgrantees, the 
grantee must ensure that its subgrantees comply with the requirements of 
this part and carry out the responsibilities of the grantee. The grantee 
must annually review the performance of subgrantees in accordance with 
24 CFR 93.404(a).



                     Subpart D_Program Requirements



Sec.  93.150  Site and neighborhood standards.

    (a) General. A grantee must administer its HTF program in a manner 
that provides housing that is suitable from the standpoint of 
facilitating and furthering full compliance with the applicable 
provisions of title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-
2000d-4), the Fair Housing Act (42 U.S.C. 3601 et seq., E.O. 11063, 3 
CFR, 1959-1963 Comp., p. 652) and HUD regulations issued pursuant 
thereto; and promotes greater choice of housing opportunities.
    (b) New rental housing. In carrying out the site and neighborhood 
requirements with respect to new construction of rental housing, a 
grantee is responsible for making the determination that proposed sites 
for new construction meet the requirements in 24 CFR 983.57(e)(2).



Sec.  93.151  Income determinations.

    (a) General. The HTF program has income-targeting requirements. 
Therefore, the grantee must determine that each family occupying an HTF-
assisted unit is income-eligible by determining the family's annual 
income.
    (b) Definition of ``annual income.'' (1) When determining whether a 
family is income-eligible, the grantee must use one of the following two 
definitions of ``annual income'':
    (i) ``Annual income'' as defined at 24 CFR 5.609; or
    (ii) ``Adjusted gross income'' as defined for purposes of reporting 
under the Internal Revenue Service (IRS) Form 1040 series for individual 
federal annual income tax purposes.

[[Page 623]]

    (2) The grantee may use only one definition for each HTF-assisted 
program (e.g., down payment assistance program) that it administers and 
for each rental housing project.
    (c) Determining annual income--(1) Tenants in HTF-assisted housing. 
For families who are tenants in HTF-assisted housing, the grantee must 
initially determine annual income using the method in paragraph (d)(1) 
of this section. For subsequent income determinations during the period 
of affordability, the grantee may use any one of the methods described 
in paragraph (d) of this section, in accordance with Sec.  93.302(e).
    (2) HTF-assisted homebuyers. For families who are HTF-assisted 
homebuyers, the grantee must determine annual income using the method 
described in paragraph (d)(1) of this section.
    (d) Methods of determining annual income. (1) Examine at least 2 
months of source documents evidencing annual income (e.g., wage 
statement, interest statement, unemployment compensation statement) for 
the family.
    (2) Obtain from the family a written statement of the amount of the 
family's annual income and family size, along with a certification that 
the information is complete and accurate. The certification must state 
that the family will provide source documents upon request.
    (3) Obtain a written statement from the administrator of a 
government program under which the family receives benefits and which 
examines each year the annual income of the family. The statement must 
indicate the tenant's family size and state the amount of the family's 
annual income; or alternatively, the statement must indicate the current 
dollar limit for very low- or low-income families for the family size of 
the tenant and state that the tenant's annual income does not exceed 
this limit.



              Subpart E_Eligible and Prohibited Activities



Sec.  93.200  Eligible activities: General.

    (a)(1) HTF funds may be used for the production, preservation, and 
rehabilitation of affordable rental housing and affordable housing for 
first-time homebuyers through the acquisition (including assistance to 
homebuyers), new construction, reconstruction, or rehabilitation of 
nonluxury housing with suitable amenities, including real property 
acquisition, site improvements, conversion, demolition, and other 
expenses, including financing costs, relocation expenses of any 
displaced persons, families, businesses, or organizations; for operating 
costs of HTF-assisted rental housing; and for reasonable administrative 
and planning costs. Not more than one third of each annual grant may be 
used for operating cost assistance and operating cost assistance 
reserves. Operating cost assistance and operating cost assistance 
reserves may be provided only to rental housing acquired, rehabilitated, 
reconstructed, or newly constructed with HTF funds. Not more than 10 
percent of the annual grant shall be used for housing for homeownership. 
HTF-assisted housing must be permanent housing. The specific eligible 
costs for these activities are found in Sec. Sec.  93.201 and 93.202. 
The activities and costs are eligible only if the housing meets the 
property standards in Sec.  93.301, as applicable, upon project 
completion.
    (2) Acquisition of vacant land or demolition must be undertaken only 
with respect to a particular housing project intended to provide 
affordable housing within the time frames established in the definition 
of ``commitment'' in Sec.  93.2.
    (3) HTF funds may be used to purchase and/or rehabilitate a 
manufactured housing unit, and purchase the land upon which a 
manufactured housing unit is located. The manufactured housing unit 
must, at the time of project completion, be connected to permanent 
utility hook-ups and be located on land that is owned by the 
manufactured housing unit owner or land for which the manufactured 
housing owner has a lease for a period at least equal to the applicable 
period of affordability.
    (b) Forms of assistance to projects. A grantee may provide HTF funds 
as equity investments, interest-bearing loans or advances, non-interest-
bearing loans or advances, interest subsidies consistent with the 
purposes of this part, deferred payment loans, grants,

[[Page 624]]

or other forms of assistance that HUD determines to be consistent with 
the purposes of this part. Each grantee has the right to establish the 
terms of assistance, subject to the requirements of this part.
    (c) Multi-unit projects. (1) HTF funds may be used to assist in the 
development of one or more housing units in a multi-unit project. Only 
the actual HTF eligible development costs of the assisted units may be 
charged to the HTF program. If the assisted and non-assisted units are 
not comparable, the actual costs may be determined based on a method of 
cost allocation. If the assisted and non-assisted units are comparable 
in terms of size, features, and number of bedrooms, the actual cost of 
the HTF-assisted units can be determined by prorating the total HTF-
eligible development costs of the project so that the proportion of the 
total development costs charged to the HTF program does not exceed the 
proportion of the HTF-assisted units in the project.
    (2) After project completion, the number of units designated as HTF-
assisted may be reduced only in accordance with Sec.  93.203, except 
that in a project consisting of all HTF-assisted units, one unit may be 
converted to an onsite manager's unit if the grantee determines the 
conversion is reasonable and that, based on one fewer HTF-assisted unit, 
the costs charged to the HTF program do not exceed the actual costs of 
the HTF-assisted units and do not exceed the subsidy limit established 
pursuant to Sec.  93.300(a).
    (d) Terminated projects. An HTF-assisted project that is terminated 
before completion, either voluntarily or otherwise, constitutes an 
ineligible activity and the grantee must repay any HTF funds invested in 
the project to its HTF account from which the funds were drawn (i.e., 
local or Treasury account), in accordance with Sec.  93.403(b). A 
project that does not meet the requirements for affordable housing must 
be terminated and the grantee must repay the HTF funds to the grantee's 
HTF account.



Sec.  93.201  Eligible project costs.

    HTF funds may be used to pay the following eligible costs:
    (a) Development hard costs. The actual cost of constructing or 
rehabilitating housing. These costs include the following:
    (1) For new construction projects, costs to meet the new 
construction standards of the grantee in Sec.  93.301;
    (2) For rehabilitation, costs to meet the property standards for 
rehabilitation projects in Sec.  93.301(b);
    (3) For both new construction and rehabilitation projects, costs:
    (i) To demolish existing structures;
    (ii) To make utility connections including off-site connections from 
the property line to the adjacent street; and
    (iii) To make improvements to the project site that are in keeping 
with improvements of surrounding, standard projects. Site improvements 
may include onsite roads and sewer and water lines necessary to the 
development of the project. The project site is the property, owned by 
the project owner, upon which the project is located.
    (4) For both new construction and rehabilitation of multifamily 
rental housing projects, costs to construct or rehabilitate laundry and 
community facilities that are located within the same building as the 
housing and which are for the use of the project residents and their 
guests.
    (5) Costs to make utility connections or to make improvements to the 
project site, in accordance with the provisions of paragraphs (a)(3)(ii) 
and (iii) of this section are also eligible in connection with the 
acquisition of standard housing.
    (b) Refinancing costs. (1) The cost to refinance existing debt 
secured by rental housing units that are being rehabilitated with HTF 
funds, but only if the refinancing is necessary to reduce the overall 
housing costs and to make the housing more affordable and proportional 
to the number of HTF-assisted units in the rental project. The 
proportional rehabilitation cost must be greater than the proportional 
amount of debt that is refinanced.
    (2) The grantee must establish refinancing guidelines and state them 
in its consolidated plan described in 24 CFR part 91. The guidelines 
shall describe the conditions under which the grantee will refinance 
existing debt. At

[[Page 625]]

minimum, the guidelines must demonstrate that rehabilitation is the 
primary eligible activity and ensure that this requirement is met by 
establishing a minimum level of rehabilitation per unit or a required 
ratio between rehabilitation and refinancing.
    (c) Acquisition costs. Costs of acquiring improved or unimproved 
real property, including acquisition by homebuyers.
    (d) Related soft costs. Other reasonable and necessary costs 
incurred by the owner or grantee and associated with the financing, or 
development (or both) of new construction, rehabilitation or acquisition 
of housing assisted with HTF funds. These costs include, but are not 
limited to:
    (1) Architectural, engineering, or related professional services 
required to prepare plans, drawings, specifications, or work write-ups. 
The costs may be paid if they were incurred not more than 24 months 
before the date that HTF funds are committed to the project and the 
grantee expressly permits HTF funds to be used to pay the costs in the 
written agreement committing the funds.
    (2) Costs to process and settle the financing for a project, such as 
private lender origination fees, credit reports, fees for title 
evidence, fees for recordation and filing of legal documents, building 
permits, attorneys' fees, private appraisal fees and fees for an 
independent cost estimate, and builders' or developers' fees.
    (3) Costs of a project audit, including certification of costs 
performed by a certified public accountant, that the grantee may require 
with respect to the development of the project.
    (4) Costs to provide information services such as affirmative 
marketing and fair housing information to prospective homeowners and 
tenants as required by Sec.  93.350.
    (5) For new construction or rehabilitation, the cost of funding an 
initial operating deficit reserve, which is a reserve to meet any 
shortfall in project income during the period of project rent-up (not to 
exceed 18 months) and which may only be used to pay project operating 
expenses, scheduled payments to a replacement reserve, and debt service. 
Any HTF funds placed in an operating deficit reserve that remain 
unexpended after the period of project rent-up may be retained for 
project reserves if permitted by the grantee.
    (6) Staff and overhead costs of the grantee directly related to 
carrying out the project, such as work specifications preparation, loan 
processing, and inspections. For multi-unit projects, such costs must be 
allocated among HTF-assisted units in a reasonable manner and 
documented. Although these costs may be charged as project costs, these 
costs cannot be charged to or paid by the assisted families.
    (7) For both new construction and rehabilitation, costs for the 
payment of impact fees that are charged for all projects within a 
jurisdiction.
    (e) Operating cost assistance and operating cost assistance 
reserves. For HTF-assisted units for which project-based assistance is 
not available, when necessary and subject to the limitations in Sec.  
93.200(a), HTF funds may be used to pay for operating cost assistance 
and operating cost assistance reserves, as follows:
    (1) Operating costs are costs for insurance, utilities, real 
property taxes, and maintenance and scheduled payments to a reserve for 
replacement of major systems (provided that the payments must be based 
on the useful life of each major system and expected replacement cost) 
of an HTF-assisted unit. The eligible amount of HTF funds per unit for 
operating cost assistance is determined based on the deficit remaining 
after the monthly rent payment for the HTF-assisted unit is applied to 
the HTF-assisted unit's share of monthly operating costs. The maximum 
amount of the operating cost assistance to be provided to an HTF-
assisted rental project must be based on the underwriting of the project 
and must be specified in a written agreement between the grantee and the 
recipient. The written agreement may commit, from a fiscal year HTF 
grant, funds for operating cost assistance for a multiyear period 
provided that the grantee is able meet its expenditure deadline in Sec.  
93.400(d). The grantee may renew operating cost assistance with future 
fiscal year HTF grants during the affordability period and the

[[Page 626]]

amount must be based on the need for the operating cost assistance at 
the time the assistance is renewed.
    (2) An operating cost assistance reserve may be funded by the 
grantee for HTF-assisted units in a project where the grantee determines 
in its underwriting of the project the reserve is necessary to ensure 
the project's financial feasibility. If the operating cost assistance 
reserve is funded with appropriated HTF funds, the allowable amount of 
the reserve shall not exceed the amount determined by the grantee to be 
necessary to provide operating cost assistance for HTF-assisted units, 
for a period not to exceed 5 years, based on an analysis of potential 
deficits remaining after the expected rent payments for the HTF-assisted 
unit are applied to the HTF-assisted unit's expected share of operating 
costs. The grantee may renew operating cost assistance reserves with 
future fiscal year HTF grants during the affordability period and the 
amount must be based on the need for the operating cost assistance 
reserve at the time the assistance for the reserve is renewed. If the 
operating cost assistance reserve is funded with non-appropriated HTF 
funds, the reserve may be funded for the period of affordability.
    (f) Relocation costs. The cost of relocation payments and other 
relocation assistance to persons displaced by the project are eligible 
costs.
    (1) Relocation payments include replacement housing payments, 
payments for moving expenses, and payments for reasonable out-of-pocket 
costs incurred in the temporary relocation of persons.
    (2) Other relocation assistance means staff and overhead costs 
directly related to providing advisory and other relocation services to 
persons displaced by the project, including timely written notices to 
occupants, referrals to comparable and suitable replacement property, 
property inspections, counseling, and other assistance necessary to 
minimize hardship.
    (g) Costs relating to payment of loans. If the HTF funds are not 
used to directly pay a cost specified in this section, but are used to 
pay off a construction loan, bridge financing loan, or guaranteed loan, 
the payment of principal and interest for such loan is an eligible cost 
only if:
    (1) The loan was used for eligible costs specified in this section, 
and
    (2) The HTF assistance is part of the original financing for the 
project and the project meets the requirements of this part.
    (h) Construction undertaken before the HTF funds are committed to 
the project. HTF funds cannot be used for development hard costs, as 
provided in paragraph (a) of this section, or for acquisition, 
undertaken before the HTF funds are committed to the project. However, 
the written agreement committing the HTF funds to the project may 
authorize HTF funds to be used for architectural and engineering costs 
and other related professional services, as provided in paragraph (d)(1) 
of this section.



Sec.  93.202  Eligible administrative and planning costs.

    (a) General. A HTF grantee may expend, for payment of reasonable 
administrative and planning costs of the HTF, an amount of HTF funds 
that is not more than 10 percent of the sum of each fiscal year HTF 
grant and of program income deposited into its local account or received 
and reported by its subgrantees during the program year. A HTF grantee 
may expend the funds directly or may authorize its subgrantees, if any, 
to expend all or a portion of such funds, provided total expenditures 
for planning and administrative costs do not exceed the maximum 
allowable amount. Reasonable administrative and planning costs are those 
costs described in paragraphs (b) through (h) of this section:
    (b) General management, oversight and coordination. Reasonable costs 
of overall program management, coordination, monitoring, and evaluation. 
Such costs include, but are not limited to, necessary expenditures for 
the following:
    (1) Salaries, wages, and related costs of the grantee's staff. In 
charging costs to this category the grantee may either include the 
entire salary, wages, and related costs allocable to the program of each 
person whose primary responsibilities with regard to the program 
involves program administration

[[Page 627]]

assignments, or the prorated share of the salary, wages, and related 
costs of each person whose job includes any program administration 
assignments. The grantee may use only one of these methods. Program 
administration includes the following types of assignments:
    (i) Developing systems and schedules for ensuring compliance with 
program requirements;
    (ii) Developing interagency agreements and agreements with entities 
receiving HTF funds;
    (iii) Monitoring HTF-assisted housing for progress and compliance 
with program requirements;
    (iv) Preparing reports and other documents related to the program 
for submission to HUD;
    (v) Coordinating the resolution of audit and monitoring findings;
    (vi) Evaluating program results against stated objectives; and
    (vii) Managing or supervising persons whose primary responsibilities 
with regard to the program include such assignments as those described 
in paragraphs (a)(1)(i) through (vi) of this section;
    (2) Travel costs incurred for official business in carrying out the 
program;
    (3) Administrative services performed under third party contracts or 
agreements, including such services as general legal services, 
accounting services, and audit services;
    (4) Other costs for goods and services required for administration 
of the program, including such goods and services as rental or purchase 
of equipment, insurance, utilities, office supplies, and rental and 
maintenance (but not purchase) of office space; and
    (c) Staff and overhead. Staff and overhead costs of the grantee 
directly related to carrying out the project, such as work 
specifications preparation, loan processing, inspections, lead-based 
paint evaluations (visual assessments, inspections, and risk 
assessments), other services related to assisting potential owners, 
tenants and homebuyers (e.g., housing counseling); and staff and 
overhead costs directly related to providing advisory and other 
relocation services to persons displaced by the project, including 
timely written notices to occupants, referrals to comparable and 
suitable replacement property, property inspections, counseling, and 
other assistance necessary to minimize hardship. These costs (except 
homeownership counseling) may be charged as administrative costs or as 
project costs under Sec.  93.201(d)(6) and (f)(2), at the discretion of 
the grantee; however, these costs (except homeownership counseling) 
cannot be charged to or paid by the low-income families.
    (d) Public information. The provision of information and other 
resources to residents and citizen organizations participating in the 
planning, implementation, or assessment of projects being assisted with 
HTF funds.
    (e) Fair housing. Activities to affirmatively further fair housing 
in accordance with the grantee's certification under 24 CFR part 91.
    (f) Indirect costs. Indirect costs may be charged to the HTF program 
in accordance with 2 CFR part 200, subpart E.
    (g) Preparation of the consolidated plan. Preparation of the 
consolidated plan required under 24 CFR part 91. Preparation includes 
the costs of public hearings, consultations, and publication.
    (h) Other Federal requirements. Costs of complying with the Federal 
requirements in subpart H of this part.



Sec.  93.203  HTF funds and public housing.

    (a) HTF funds may be used for new construction or rehabilitation of 
public housing units only in accordance with the following:
    (1) HTF funds may be used for new construction of public housing as 
part of the Choice Neighborhoods (Choice) program under a HUD 
appropriation act or for new public housing units that have been 
allocated and will receive low-income housing tax credits under section 
42 of the Internal Revenue Code of 1986 (26 U.S.C. 42).
    (2) HTF funds may be used for the rehabilitation of existing public 
housing units in which the public housing assistance will be converted 
and used at the properties under the Rental Assistance Demonstration 
(RAD) program under HUD's 2012 Appropriations Act (Pub. L. 112-55, 125 
Stat. 552, approved

[[Page 628]]

November 18, 2011) or subsequent statutes. HTF funds may also be used 
for the rehabilitation of existing public housing under the Choice 
program, and of existing public housing units that have been allocated 
and will receive low-income housing tax credits under section 42 of the 
Internal Revenue Code of 1986 (26 U.S.C. 42).
    (b) The public housing units constructed using funds under this part 
must replace units that were removed from a public housing agency's 
public housing inventory as part of a Choice program grant, or as part 
of a mixed-financed development under section 35 of the 1937 Act. The 
number of replacement units cannot be more than the number of units 
removed from the public housing agency's inventory. The public housing 
units constructed or rehabilitated using funds under this part must 
receive Public Housing Operating Fund assistance (and may receive Public 
Housing Capital Fund assistance) under section 9 of the 1937 Act. These 
units cannot receive operating costs assistance or operating cost 
assistance reserves under this part.
    (c) Except as provided in paragraph (b) of this section, HTF-
assisted housing may not receive Operating Fund or Capital Fund 
assistance under section 9 of the 1937 Act during the HTF period of 
affordability.
    (d) Consistent with Sec.  93.200(c), HTF funds may be used for 
affordable housing in a project that also contains public housing units, 
provided that the HTF funds are not used for the public housing units 
and HTF funds are used only for eligible costs, in accordance with this 
part.



Sec.  93.204  Prohibited activities and fees.

    (a) HTF funds may not be used to:
    (1) Provide assistance (other than assistance to a homebuyer to 
acquire housing previously assisted with HTF funds or renewal of 
operating cost assistance or renewal of operating cost assistance 
reserve) to a project previously assisted with HTF funds during the 
period of affordability established by the grantee in the written 
agreement under Sec.  93.404 (c)(2)(iv). However, additional HTF funds 
may be committed to a project up to one year after project completion, 
but the amount of HTF funds in the project may not exceed the maximum 
per-unit development subsidy amount established pursuant to Sec.  
93.300.
    (2) Pay for the acquisition of property owned by the grantee, except 
for property acquired by the grantee with HTF funds or property acquired 
in anticipation of carrying out an HTF project.
    (3) Pay delinquent taxes, fees, or charges on properties to be 
assisted with HTF funds.
    (4) Pay for political activities, advocacy, lobbying (whether 
directly or through other parties), counseling services (except for 
housing counseling), travel expenses (other than those eligible under 
Sec.  93.202(b)), or preparing or providing advice on tax returns. The 
prohibited use of funds for political activities includes influencing 
the selection, nomination, election, or appointment of one or more 
candidates to any Federal, State, or local office as codified in section 
501 of the Internal Revenue Code of 1986 (26 U.S.C. 501).
    (5) Pay for administrative, outreach, or other costs to manage and 
operate the grantee of HTF funds, except those administrative costs 
necessary to carry out the HTF program in Sec.  93.202, including 
housing counseling.
    (6) Pay for any cost that is not eligible under Sec.  93.201 and 
Sec.  93.202.
    (b)(1) The grantee may not charge (and must prohibit subgrantees and 
recipients from charging) servicing, origination, or other fees for the 
costs of administering the HTF program. However, the grantee may charge 
owners of rental projects reasonable annual fees for monitoring 
compliance during the period of affordability. The fees must be based 
upon the average actual cost of performing the monitoring of HTF-
assisted rental projects. The basis for determining the amount of the 
fee must be documented and the fee must be included in the costs of the 
project as part of the project underwriting.
    (2) The grantee may also charge nominal application fees (although 
these fees are not an eligible HTF cost) to eligible recipients, to 
discourage frivolous applications. The amount of application fees must 
be appropriate to the type of application and may not

[[Page 629]]

create an undue impediment to an extremely low-income family to be able 
to participate in the grantee's program.
    (3) All fees are applicable credits under 2 CFR part 200, subpart E.
    (4) In addition, the grantee must prohibit project owners from 
charging fees that are not customarily charged in rental housing (e.g., 
laundry room access fees), except that rental project owners may charge:
    (i) Reasonable application fees to prospective tenants;
    (ii) Parking fees to tenants only if such fees are customary for 
rental housing projects in the neighborhood; and
    (iii) Fees for services such as bus transportation or meals, as long 
as the services are voluntary and fees are charged for services 
provided.



                       Subpart F_Income Targeting



Sec.  93.250  Income targeting.

    (a) In any fiscal year in which the total amount available for 
allocation of HTF funds is less than $1 billion, the grantee must use 
100 percent of its HTF grant for the benefit of extremely low-income 
families or families with incomes at or below the poverty line 
(whichever is greater). In any fiscal year in which the total amount 
available for allocation of HTF funds is greater than $1 billion, the 
grantee must use at least 75 percent of its grant for the benefit of 
extremely low-income families or families with incomes at or below the 
poverty line.
    (b) Any grant funds not used in accordance with paragraph (a) of 
this section must be used for the benefit of very-low income families.



                     Subpart G_Project Requirements



Sec.  93.300  Maximum per-unit development subsidy amount, underwriting,
and subsidy layering.

    (a) Maximum per-unit development subsidy amount. The grantee must 
establish maximum limitations on the total amount of HTF funds that the 
grantee may invest per-unit for development of non-luxury housing, with 
adjustments for the number of bedrooms and the geographic location of 
the project. These limits must be reasonable and based on actual costs 
of developing non-luxury housing in the area. The grantee must include 
these limits in its consolidated plan and update these limits annually.
    (b) Underwriting and subsidy layering. Before committing funds to a 
project, the grantee must evaluate the project in accordance with 
guidelines that it has adopted for determining a reasonable level of 
profit or return on recipient's investment in a project and must not 
invest any more HTF funds, alone or in combination with other 
governmental assistance, than is necessary to provide quality affordable 
housing that is financially viable for a reasonable period (at minimum, 
the period of affordability in Sec.  93.302 or Sec.  93.304) and that 
will not provide a profit or return on the recipient's investment that 
exceeds the grantee's established standards for the size, type, and 
complexity of the project. The guidelines adopted by the grantees must 
require the grantee to undertake:
    (1) An examination of the sources and uses of funds for the project 
(including any operating cost assistance, operating cost assistance 
reserve, or project-based rental assistance that will be provided to the 
project) and a determination that the costs are reasonable; and
    (2) An assessment, at minimum, of the current market demand in the 
neighborhood in which the project will be located, the experience of the 
recipient, the financial capacity of the recipient, and firm written 
financial commitments for the project.
    (3) For HTF-funded downpayment assistance, a market analysis is not 
required.



Sec.  93.301  Property standards.

    (a) New construction projects. (1) State and local codes, 
ordinances, and zoning requirements. Housing that is newly constructed 
with HTF funds must meet all applicable State and local codes, 
ordinances, and zoning requirements. HTF-assisted new construction 
projects must meet State or local residential and building codes, as 
applicable or, in the absence of a State or local building code, the 
International Residential Code or International Building Code (as 
applicable to the

[[Page 630]]

type of housing) of the International Code Council. The housing must 
meet the applicable requirements upon project completion.
    (2) HUD requirements. All new construction projects must also meet 
the requirements described in this paragraph:
    (i) Accessibility. The housing must meet the accessibility 
requirements of 24 CFR part 8, which implements section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794), and Titles II and III of the 
Americans with Disabilities Act (42 U.S.C. 12131-12189) implemented at 
28 CFR parts 35 and 36, as applicable. ``Covered multifamily 
dwellings,'' as defined at 24 CFR 100.201, must also meet the design and 
construction requirements at 24 CFR 100.205, which implements the Fair 
Housing Act (42 U.S.C. 3601-3619).
    (ii) Energy efficiency. The housing must meet the energy efficiency 
standards established pursuant to section 109 of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 12709).
    (iii) Disaster mitigation. Where relevant, the housing must be 
constructed to mitigate the impact of potential disasters (e.g., 
earthquakes, hurricanes, flooding, and wildfires), in accordance with 
State and local codes, ordinances, or other State and local 
requirements, or such other requirements as HUD may establish.
    (iv) Written cost estimates, construction contracts, and 
construction documents. The grantee must ensure the construction 
contract(s) and construction documents describe the work to be 
undertaken in adequate detail so that inspections can be conducted. The 
grantee must review and approve written cost estimates for construction 
and determine that costs are reasonable.
    (v) Construction progress inspections. The grantee must conduct 
progress and final inspections of construction to ensure that work is 
done in accordance with the applicable codes, the construction contract, 
and construction documents.
    (vi) Broadband infrastructure. For new commitments made after 
January 19, 2017 for a new construction housing project of a building 
with more than 4 rental units, the construction must include 
installation of broadband infrastructure, as this term is defined in 24 
CFR 5.100, except where the grantee determines and, in accordance with 
Sec.  93.407(a)(2)(iv), documents the determination that:
    (A) The location of the new construction makes installation of 
broadband infrastructure infeasible; or
    (B) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden.
    (b) Rehabilitation projects. All rehabilitation that is performed 
using HTF funds must meet the requirements of this paragraph (b).
    (1) Rehabilitation standards. The grantee must establish 
rehabilitation standards for all HTF-assisted housing rehabilitation 
activities that set forth the requirements that the housing must meet 
upon project completion. The grantee's description of its standards must 
be in sufficient detail to determine the required rehabilitation work 
including methods and materials. The standards may refer to applicable 
codes or they may establish requirements that exceed the minimum 
requirements of the codes. The rehabilitation standards must address 
each of the following:
    (i) Health and safety. The grantee's standards must identify life-
threatening deficiencies that must be addressed immediately if the 
housing is occupied.
    (ii) Major systems. Major systems are: structural support; roofing; 
cladding and weatherproofing (e.g., windows, doors, siding, gutters); 
plumbing; electrical; and heating, ventilation, and air conditioning. 
For rental housing, the grantee's standards must require the grantee to 
estimate (based on age and condition) the remaining useful life of these 
systems, upon project completion of each major system. For multifamily 
housing projects of 26 units or more, the grantee's standards must 
require the grantee to determine the useful life of major systems 
through a capital needs assessment of the project. For rental housing, 
if the remaining useful life of one or more major system is less than 
the applicable period of affordability, the grantee's standards must

[[Page 631]]

require the grantee to ensure that a replacement reserve is established 
and monthly payments are made to the reserve that are adequate to repair 
or replace the systems as needed. For homeownership housing, the 
grantee's standards must require, upon project completion, each of the 
major systems to have a remaining useful life for a minimum of 5 years 
or for such longer period specified by grantee, or the major systems 
must be rehabilitated or replaced as part of the rehabilitation work.
    (iii) Lead-based paint. The grantee's standards must require the 
housing to meet the lead-based paint requirements at 24 CFR part 35.
    (iv) Accessibility. The grantee's standards must require the housing 
to meet the accessibility requirements in 24 CFR part 8, which 
implements section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 
794), and Titles II and III of the Americans with Disabilities Act (42 
U.S.C. 12131-12189) implemented at 28 CFR parts 35 and 36, as 
applicable. ``Covered multifamily dwellings,'' as defined at 24 CFR 
100.201, must also meet the design and construction requirements at 24 
CFR 100.205, which implements the Fair Housing Act (42 U.S.C. 3601-
3619). Rehabilitation may include improvements that are not required by 
regulation or statute that permit use by a person with disabilities.
    (v) [Reserved].
    (vi) Disaster mitigation. Where relevant, the grantee's standards 
must require the housing to be improved to mitigate the impact of 
potential disasters (e.g., earthquake, hurricanes, flooding, and 
wildfires) in accordance with State and local codes, ordinances, and 
requirements, or such other requirements as HUD may establish.
    (vii) State and local codes, ordinances, and zoning requirements. 
The grantee's standards must require the housing to meet all applicable 
State and local codes, ordinances, and requirements or, in the absence 
of a State or local building code, the International Existing Building 
Code of the International Code Council.
    (viii) Uniform Physical Condition Standards. The standards of the 
grantee must be such that, upon completion, the HTF-assisted project and 
units will be decent, safe, sanitary, and in good repair as described in 
24 CFR 5.703. HUD will establish the minimum deficiencies that must be 
corrected under the grantee's rehabilitation standards based on 
inspectable items and inspected areas from HUD-prescribed physical 
inspection procedures (Uniform Physical Conditions Standards) pursuant 
to 24 CFR 5.705.
    (ix) Capital Needs Assessments. For multifamily rental housing 
projects of 26 or more total units, the grantee must determine all work 
that will be performed in the rehabilitation of the housing and the 
long-term physical needs of the project through a capital needs 
assessment of the project.
    (x) Broadband infrastructure. For new commitments made after January 
19, 2017 for a substantial rehabilitation project of a building with 
more than 4 rental units, any substantial rehabilitation, as defined in 
24 CFR 5.100, must provide for installation of broadband infrastructure, 
as this term is also defined in 24 CFR 5.100, except where the grantee 
determines and, in accordance with Sec.  93.407(a)(2)(iv), documents the 
determination that:
    (A) The location of the substantial rehabilitation makes 
installation of broadband infrastructure infeasible;
    (B) The cost of installing broadband infrastructure would result in 
a fundamental alteration in the nature of its program or activity or in 
an undue financial burden; or
    (C) The structure of the housing to be substantially rehabilitated 
makes installation of broadband infrastructure infeasible.
    (2) Construction documents and cost estimates. The grantee must 
ensure that the work to be undertaken will meet the grantee's 
rehabilitation standards. The construction documents (i.e., written 
scope of work to be performed) must be in sufficient detail to establish 
the basis for a uniform inspection of the housing to determine 
compliance with the grantee's standards. The grantee must review and 
approve a written cost estimate for rehabilitation after determining 
that costs are reasonable.

[[Page 632]]

    (3) Frequency of inspections. The grantee must conduct an initial 
property inspection to identify the deficiencies that must be addressed. 
The grantee must conduct progress and final inspections to determine 
that work was done in accordance with work write-ups.
    (c) Acquisition of standard housing. (1) Existing housing that is 
acquired with HTF assistance for rental housing, and that was newly 
constructed or rehabilitated less than 12 months before the date of 
commitment of HTF funds, must meet the property standards of paragraph 
(a) or paragraph (b) of this section, as applicable, for new 
construction and rehabilitation projects. The grantee must document this 
compliance based upon a review of approved building plans and 
Certificates of Occupancy, and an inspection that is conducted no 
earlier than 90 calendar days before the date of commitment of HTF 
assistance.
    (2) All other existing housing that is acquired with HTF assistance 
for rental housing must meet the rehabilitation property standards 
requirements of paragraph (b) of this section. The grantee must document 
this compliance based upon an inspection that is conducted no earlier 
than 90 calendar days before the date of commitment of HTF assistance. 
If the property does not meet these standards, HTF funds cannot be used 
to acquire the property unless it is rehabilitated to meet the standards 
of paragraph (b) of this section.
    (3) Existing housing that is acquired for homeownership (e.g., 
downpayment assistance) must be decent, safe, sanitary, and in good 
repair. The grantee must establish standards to determine that the 
housing is decent, safe, sanitary, and in good repair. At minimum, the 
standards must provide that the housing meets all applicable State and 
local standards and code requirements and the housing does not contain 
the specific deficiencies proscribed by HUD based on the applicable 
inspectable items and inspected areas in HUD-prescribed physical 
inspection procedures (Uniform Physical Condition Standards) issued 
pursuant to 24 CFR 5.705. The grantee must inspect the housing and 
document this compliance based upon an inspection that is conducted no 
earlier than 90 calendar days before the date of commitment of HTF 
assistance. If the housing does not meet these standards, the housing 
must be rehabilitated to meet the standards of this paragraph (c)(3) or 
it cannot be assisted with HTF funds.
    (d) Manufactured housing. Construction of all manufactured housing 
(including manufactured housing that replaces an existing substandard 
unit under the definition of ``reconstruction'') must meet the 
Manufactured Home Construction and Safety Standards codified at 24 CFR 
part 3280. These standards preempt State and local codes which are not 
identical to the Federal standards for the new construction of 
manufactured housing. The grantees providing HTF funds to assist 
manufactured housing units must comply with applicable State and local 
laws or codes. In the absence of such laws or codes, the installation 
must comply with the manufacturer's written instructions for 
installation of manufactured housing units. All new manufactured housing 
and all manufactured housing that replaces an existing substandard unit 
under the definition of ``reconstruction'' must be on a permanent 
foundation that meets the requirements for foundation systems as set 
forth in 24 CFR 203.43f(c)(i). All new manufactured housing (and all 
manufactured housing that replaces an existing substandard unit under 
the definition of ``reconstruction'') must, at the time of project 
completion, be connected to permanent utility hook-ups and be located on 
land that is owned by the manufactured housing unit owner or land for 
which the manufactured housing owner has a lease for a period at least 
equal to the applicable period of affordability. In HTF-funded 
rehabilitation of existing manufactured housing the foundation and 
anchoring must meet all applicable State and local codes, ordinances, 
and requirements or in the absence of local or State codes, the Model 
Manufactured Home Installation Standards at 24 CFR part 3285. 
Manufactured housing that is rehabilitated using HTF funds must meet the 
property standards requirements in paragraph (b) of this section,

[[Page 633]]

as applicable. The grantee must document this compliance in accordance 
with inspection procedures that the grantee has established pursuant to 
Sec.  92.301, as applicable.
    (e) Ongoing property condition standards: Rental housing--(1) 
Ongoing property standards. The grantee must establish property 
standards for rental housing (including manufactured housing) that apply 
throughout the affordability period. The standards must ensure that 
owners maintain the housing as decent, safe, and sanitary housing in 
good repair. The grantee's description of its property standards must be 
in sufficient detail to establish the basis for a uniform inspection of 
HTF rental projects. The grantee's ongoing property standards must 
address each of the following:
    (i) At a minimum, the grantee's ongoing property standards must 
include all inspectable items and inspectable areas specified by HUD 
based on the HUD physical inspection procedures (Uniform Physical 
Condition Standards (UPCS)) prescribed by HUD pursuant to 24 CFR 5.705.
    (ii) Health and safety. The grantee's standards must require the 
housing to be free of all health and safety defects. The standards must 
identify life-threatening deficiencies that the owner must immediately 
correct and the time frames for addressing these deficiencies.
    (iii) Lead-based paint. The grantee's standards must require the 
housing to meet the lead-based paint requirements in 24 CFR part 35.
    (2) Inspections. The grantee must undertake ongoing property 
inspections, in accordance with Sec.  93.404.
    (3) Corrective and remedial actions. The grantee must have 
procedures for ensuring that timely corrective and remedial actions are 
taken by the project owner to address identified deficiencies.
    (4) Inspection procedures. The grantee must establish written 
inspection procedures. The procedures must include detailed inspection 
checklists, description of how and by whom inspections will be carried 
out, and procedures for training and certifying qualified inspectors. 
The procedures must also describe how frequently the property will be 
inspected, consistent with section Sec.  93.404(d).
    (f) Environmental provisions--(1) New construction projects 
environmental requirements--(i) Historic preservation--(A) Standards. 
The project activities (including demolition) must not be performed on 
properties that are either listed in or determined eligible for listing 
in the National Register of Historic Places, unless the project 
activities meet the Secretary of the Interior's Standards for 
Rehabilitation, either as certified through the Federal and/or State 
historic rehabilitation tax credit programs or as verified by someone 
that meets the relevant Secretary of the Interior's Professional 
Qualification Standards;
    (B) Archaeological resources. If archaeological resources or human 
remains are discovered on the project site during construction, the 
grantee must consult with affected tribes and/or descendant communities 
and comply with the Native American Graves Protection and Repatriation 
Act (25 U.S.C. 3001-3013), State law and/or local ordinance (e.g., State 
unmarked burial law).
    (ii) Farmland. Project activities must not result in the conversion 
of unique, prime, or statewide or locally significant agricultural 
properties to urban uses.
    (iii) Airport zones. Projects are not permitted within the runway 
protection zones of civilian airports, or the clear zones or accident 
potential zones of military airfields.
    (iv) Coastal Barrier Resource System. No projects may be assisted in 
Coastal Barrier Resource System (CBRS) units. CBRS units are mapped and 
available from the U.S. Fish and Wildlife Service.
    (v) Coastal zone management. Development must be consistent with the 
appropriate State coastal zone management plan. Plans are available from 
the local coastal zone management agency.
    (vi) Floodplains. Except as modified below, definitions for terms 
used below can be found at 24 CFR part 55.
    (A) Construction and other activities in the 100-year floodplain are 
to be avoided when practicable. If there are

[[Page 634]]

no practicable alternatives to new construction or substantial 
improvement in the 100-year floodplain, the structure must be elevated 
at least the base flood elevation (BFE) or floodproofed to one foot 
above the BFE. Elevated and floodproofed buildings must adhere to 
National Flood Insurance Program standards. The primary sources of 
floodplain data are Federal Emergency Management Agency (FEMA) Flood 
Insurance Rate Maps (FIRMs). When FEMA provides interim flood hazard 
data, such as Advisory Base Flood Elevations (ABFE) or preliminary maps 
or studies, the latest of these sources shall be used.
    (B) No HTF assistance may be approved with respect to:
    (1) Any action, other than a functionally dependent use, located in 
a floodway;
    (2) Any new construction critical action located in a coastal high 
hazard area, 100- or 500-year floodplain; or
    (3) Any non-critical new construction action in a coastal high 
hazard area, unless the action is reconstruction following destruction 
caused by a disaster and is designed for location in a coastal high 
hazard area consistent with the FEMA National Flood Insurance Program 
requirements for V-Zones.
    (vii) Wetlands. (A) No draining, dredging, channelizing, filling, 
diking, impounding, or related grading activities are to be performed in 
wetlands. No activities, structures, or facilities funded under this 
program are to adversely impact a wetland.
    (B) A wetland means those areas that are inundated by surface or 
ground water with a frequency sufficient to support, and under normal 
circumstances, does or would support a prevalence of vegetative or 
aquatic life that requires saturated or seasonally saturated soil 
conditions for growth and reproduction. Wetlands generally include 
swamps, marshes, bogs, and similar areas such as sloughs, potholes, wet 
meadows, river overflows, mud flats, and natural ponds. This definition 
includes those wetland areas separated from their natural supply of 
water as a result of activities, such as the construction of structural 
flood protection methods or solid-fill road beds, or mineral extraction 
and navigation improvements. This definition is independent of the 
definition of jurisdictional wetland used by the U. S. Army Corps of 
Engineers under section 404 of the Clean Water Act (33 U.S.C. 1251 et 
seq.).
    (viii) Explosives and hazards. Projects must be in compliance with 
the standards for acceptable separation distance, as set forth at 24 CFR 
part 51, subpart C.
    (ix) Contamination. All properties assisted with HTF funds must be 
free of hazardous materials, contamination, toxic chemicals and gases, 
and radioactive substances, where a hazard could affect the health and 
safety of occupants or conflict with the intended use of the property.
    (A) All proposed multifamily (more than four housing units) HTF 
projects require a Phase I Environmental Site Assessment (ESA-ASTM). If 
the Phase I ESA identifies recognized environmental concerns (RECs), a 
Phase II (ESA-ASTM) will be required. ASTM reports shall be prepared in 
accordance with the most current ASTM standard. Single family housing 
does not require a Phase I ESA.
    (B) HTF projects must avoid sites located within 0.25 miles of a 
Superfund or CERCLIS (Comprehensive Environmental Response, 
Compensation, and Liability Information System) site or other 
contaminated site reported to Federal, State, or local authorities 
without a statement in writing from the U.S. Environmental Protection 
Agency (EPA) or the appropriate State agency that there is no hazard 
that could affect the health and safety of the occupants or conflict 
with the intended use of the property.
    (x) Noise. (A) Internal noise levels: All activities will be 
developed to ensure an interior noise level of no more than 45 decibels 
(dB).
    (B) External noise levels:
    (1) Project sites exposed to less than or equal to 65 dB of 
environmental noise are acceptable.
    (2) Sites between 65 dB and less than 75 dB are acceptable with 
mitigation (e.g., noise walls, careful site planning) that result in an 
interior standard of 45 dB.
    (3) Locations with environmental noise levels of 75 dB or greater 
may not

[[Page 635]]

have noise sensitive outdoor uses (e.g., picnic areas, tot lots, 
balconies, or patios) and require sound attenuation in the building 
shell to achieve the 45 dB interior standard.
    (xi) Endangered species. The grantee must avoid all actions which 
could jeopardize the continued existence of any endangered or threatened 
species, as designated by the U.S. Fish and Wildlife Service or National 
Marine Fisheries Service, or would result in the destruction or 
adversely modify the designated critical habitat of such species.
    (xii) Wild and scenic rivers. The grantee must avoid activities that 
are inconsistent with conservation easements, land-use protections, and 
restrictions adjacent to wild and scenic rivers, as designated/listed by 
the Departments of Agriculture or Interior. Maps for the National Wild 
and Scenic Rivers System are available at the governing departments.
    (xiii) Safe drinking water. Projects with a potable water system 
must use only lead-free pipes, solder, and flux.
    (xiv) Sole-source aquifers. Project activities should avoid sites 
and activities that have the potential to contaminate sole source 
aquifer areas (SSAs). EPA defines a sole or principal source aquifer as 
an aquifer that supplies at least 50 percent of the drinking water 
consumed in the area overlying the aquifer. If the project overlies an 
SSA, EPA must review the project. EPA review is designed to reduce the 
risk of ground water contamination that could pose a health hazard to 
those who use it.
    (2) Rehabilitation projects environmental requirements--(i) Historic 
preservation. (A) The project activities (including demolition) must not 
be performed on properties that are either listed in or determined 
eligible for listing in the National Register of Historic Places, unless 
the project activities meet the Secretary of the Interior's Standards 
for Rehabilitation, either as certified through the Federal and/or State 
historic rehabilitation tax credit programs or as verified by someone 
that meets the relevant Secretary of the Interior's Professional 
Qualification Standards;
    (B) Archaeological resources. If archaeological resources or human 
remains are discovered on the project site during construction or 
rehabilitation, the grantee must consult with affected tribes and/or 
descendant communities and comply with the Native American Graves 
Protection and Repatriation Act (25 U.S.C. 3001-3013), State law, and/or 
local ordinance (e.g., State unmarked burial law).
    (ii) Farmland. Project activities must not result in the conversion 
of unique, prime, or locally significant agricultural properties to 
urban uses.
    (iii) Airport zones. Projects are not permitted within the runway 
protection zones of civilian airports, or the clear zones or accident 
potential zones of military airfields.
    (iv) Coastal Barrier Resource System. No projects may be assisted in 
Coastal Barrier Resource System (CBRS) units. CBRS units are mapped and 
available from the U.S. Fish and Wildlife Service.
    (v) Coastal zone management. Development must be consistent with the 
appropriate State coastal zone management plan. Plans are available from 
the local coastal zone management agency.
    (vi) Floodplains. Except as modified below, definitions for terms 
used below can be found at 24 CFR part 55.
    (A) Construction and other activities in the 100-year floodplain are 
to be avoided when practicable. If there are no practicable alternatives 
to new construction or substantial improvement in the 100-year 
floodplain, the structure must be elevated at least to the base flood 
elevation (BFE) or floodproofed to one foot above the BFE. Elevated and 
floodproofed buildings must adhere to National Flood Insurance Program 
standards. The primary sources of floodplain data are Federal Emergency 
Management Agency (FEMA) Flood Insurance Rate Maps (FIRMS). When FEMA 
provides interim flood hazard data, such as Advisory Base Flood 
Elevations (ABFE) or preliminary maps or studies, the latest of these 
sources shall be used.
    (B) No HTF assistance may be approved with respect to:

[[Page 636]]

    (1) Any action, other than functionally dependent uses, located in a 
floodway;
    (2) Any critical action located in a coastal high hazard area, 100- 
or 500-year floodplain; or
    (3) Any non-critical action located in a coastal high hazard area, 
unless the action is designed for location in a coastal high hazard area 
consistent with the FEMA National Flood Insurance Program requirements 
for V-Zones. ``Any non-critical action in a coastal high hazard area, 
unless the action is reconstruction following destruction caused by a 
disaster and is designed for location in a coastal high hazard area 
consistent with the FEMA National Flood Insurance Program requirements 
for V-Zones.''
    (vii) Wetlands. No rehabilitation of existing properties that 
expands the footprint into a wetland is allowed. A wetland means those 
areas that are inundated by surface or ground water with a frequency 
sufficient to support, and under normal circumstances, does or would 
support a prevalence of vegetative or aquatic life that requires 
saturated or seasonally saturated soil conditions for growth and 
reproduction. Wetlands generally include swamps, marshes, bogs, and 
similar areas such as sloughs, potholes, wet meadows, river overflows, 
mud flats, and natural ponds. This definition includes those wetland 
areas separated from their natural supply of water as a result of 
activities such as the construction of structural flood protection 
methods or solid-fill road beds and activities such as mineral 
extraction and navigation improvements. This definition is independent 
of the definition of jurisdictional wetland used by the U.S. Army Corps 
of Engineers under section 404 of the Clean Water Act (33 U.S.C. 1251 et 
seq.).
    (viii) Explosives and hazards. If the rehabilitation of the building 
increases the number of dwelling units, then the project must be in 
compliance with the standards for acceptable separation distance as set 
forth at 24 CFR part 51, subpart C.
    (ix) Contamination. All properties assisted with HTF funds must be 
free of hazardous materials, contamination, toxic chemicals and gases, 
and radioactive substances, where a hazard could affect the health and 
safety of occupants or conflict with the intended use of the property:
    (A) All proposed multifamily (more than four housing units) HTF 
project activities require a Phase I Environmental Site Assessment 
(ESA--ASTM). If the Phase I ESA identifies recognized environmental 
concerns (RECs), a Phase II (ESA-ASTM) will be required. ASTM reports 
shall be prepared in accordance with the most current ASTM standard. 
Single family housing does not require a Phase I ESA.
    (B) HTF projects must avoid sites located within 0.25 miles of a 
Superfund or CERCLIS (Comprehensive Environmental Response, 
Compensation, and Liability Information System) site or other 
contaminated site reported to Federal, State, or local authorities 
without a statement in writing from EPA or the appropriate State agency 
that there is no hazard that could affect the health and safety of the 
occupants or conflict with the intended utilization of the property.
    (x) Noise--(A) Internal noise levels. All activities will be 
developed to ensure an interior noise level of no more than45 decibels 
(dB).
    (B) [Reserved].
    (xi) Endangered species. (A) The grantee must avoid all actions that 
could jeopardize the continued existence of any species designated by 
the U.S. Fish and Wildlife Service or National Marine Fisheries Service 
as endangered or threatened.
    (B) The grantee must avoid all actions that adversely modify the 
critical habitat of such species.
    (xii) Wild and scenic rivers. The grantee must avoid activities that 
are inconsistent with conservation easements, land-use protections, and 
restrictions adjacent to wild and scenic rivers, as designated/listed by 
the Departments of Agriculture and Interior. Maps for the National Wild 
and Scenic Rivers System are available at the governing departments.
    (xiii) Safe drinking water. Projects with a potable water system 
must use only lead-free pipes, solder, and flux.

[[Page 637]]

    (xiv) Sole-source aquifers. Project activities should avoid sites 
and activities that have the potential to contaminate sole source 
aquifer areas (SSAs). The EPA defines a sole or principal source aquifer 
as an aquifer that supplies at least 50 percent of the drinking water 
consumed in the area overlying the aquifer. If the project overlies an 
SSA, the EPA must review the project. The EPA review is designed to 
reduce the risk of ground water contamination, which could pose a health 
hazard to those who use it.
    (3) Acquisition projects environmental requirements. (i)(A) Existing 
housing that is acquired with HTF funds, and has been newly constructed 
or rehabilitated less than 12 months before the commitment of HTF funds 
must meet the property standards at paragraph (f)(1) of this section.
    (B) All other existing housing that is acquired with HTF assistance 
must meet the property standards requirements of paragraph (f)(2) of 
this section.
    (ii) If under paragraph (f)(3)(i)(A) or paragraph (B) of this 
section, the property does not meet these standards, with the exception 
of the noise standards in paragraph (f)(2) of this section, HTF funds 
cannot be used to acquire the property.
    (4) Manufactured housing environmental requirements. Manufactured 
housing is subject to the environmental standards in paragraph (f)(1) of 
this section for new construction or paragraph (f)(2) of this section 
for rehabilitation, as applicable. If an existing property does not meet 
these standards, HTF funds cannot be used to acquire the property unless 
it is rehabilitated to meet the standards in paragraph (f)(2), as 
applicable, with the exception of noise standards in paragraph 
(f)(2)(x).

[80 FR 5220, Jan. 30, 2015, as amended at 81 FR 92636, Dec. 20, 2016]



Sec.  93.302  Qualification as affordable housing: rental housing.

    (a) Eligible tenants. The HTF-assisted units in a rental housing 
project must be occupied by households who are eligible families in 
accordance with the income targeting requirements in Sec.  93.250.
    (b) Rent limitations--(1)(i) Extremely low-income tenants. The HTF 
rent plus utilities of an extremely low-income tenant shall not exceed 
the greater of 30 percent of the federal poverty line or 30 percent of 
the income of a family whose annual income equals 30 percent of the 
median income for the area, as determined by HUD, with adjustments for 
the number of bedrooms in the unit. HUD will publish the HTF rent limits 
on an annual basis.
    (ii) Very-low income tenants. The HTF rent plus utilities of a very 
low-income tenant shall not exceed 30 percent of the income of a family 
whose annual income equals 50 percent of the median income for the area, 
as determined by HUD, with adjustments for the number of bedrooms in the 
unit. HUD will publish the HTF rent limits on an annual basis.
    (2) If the unit receives Federal or State project-based rental 
subsidy, and the tenant pays as a contribution toward rent not more than 
30 percent of the tenant's adjusted income, the maximum rent is the rent 
allowable under the Federal or State project-based rental subsidy 
program.
    (c) Initial rent schedule and utility allowance. (1) The grantee 
must establish maximum monthly allowances for utilities and services 
(excluding telephone, television, and Internet service).
    (2) The grantee must annually review and approve rents proposed by 
the owner for HTF units. For all units for which the tenant is paying 
utilities, the grantee must ensure that the rents do not exceed the 
maximum rent minus the monthly allowances for utilities.
    (d) Periods of affordability. (1) HTF-assisted units must meet the 
affordability requirements for not less than 30 years, beginning after 
project completion. The grantee may impose longer periods.
    (2) The affordability requirements apply without regard to the term 
of any loan or mortgage, repayment of the HTF investment, or the 
transfer of ownership. They must be imposed by a deed restriction, 
covenant running with the land, an agreement restricting the use of the 
property, or other mechanisms approved by HUD under which the grantee 
and beneficiaries have the right to require specific performance,

[[Page 638]]

except that the affordability restrictions may terminate upon 
foreclosure or transfer in lieu of foreclosure. The affordability 
requirements must be recorded in accordance with State recordation laws.
    (3) The grantee may use purchase options, rights of first refusal, 
or other preemptive rights to purchase the housing before foreclosure or 
deed in lieu of foreclosure to preserve affordability.
    (4) The affordability restrictions shall be revived according to the 
original terms if, during the original affordability period, the owner 
of record before the foreclosure, or deed in lieu of foreclosure, or any 
entity that includes the former owner or those with whom the former 
owner has or had family or business ties, obtains an ownership interest 
in the project or property.
    (5) The termination of the restrictions on the project does not 
terminate the grantee's repayment obligation under Sec.  93.403.
    (e) Tenant income. (1) The income of each tenant must be determined 
initially in accordance with Sec.  93.151. In addition, in each year 
during the period of affordability, the project owner must re-examine 
each tenant's annual income in accordance with one of the options in 
Sec.  93.151(c) selected by the grantee.
    (2) An owner who re-examines a tenant's annual income through a 
statement and certification in accordance with Sec.  93.151(a)(1)(iii) 
must examine the source documentation of the income of each tenant every 
6th year of the affordability period, except that, for units that 
receive project-based assistance, the owner must re-examine the tenant's 
annual income in accordance with the project-based assistance rules. 
Otherwise, an owner who accepts the tenant's statement and certification 
in accordance with Sec.  93.151(a)(1)(iii) is not required to examine 
the income of tenants, unless there is evidence that the tenant's 
written statement failed to completely and accurately state information 
about the family's size or income.
    (f) Over-income tenants. HTF-assisted units continue to qualify as 
affordable housing despite a temporary noncompliance caused by increases 
in the incomes of existing tenants if actions satisfactory to HUD are 
being taken to ensure that all vacancies are filled in accordance with 
this section until the noncompliance is corrected.
    (g) Fixed and floating HTF units. In a project containing HTF-
assisted and other units, the grantee may designate fixed or floating 
HTF units. This designation must be made at the time of project 
commitment in the written agreement between the grantee and the 
recipient, and the HTF units must be identified not later than the time 
of project completion. Fixed units must remain the same throughout the 
period of affordability. Floating units must be changed to maintain 
conformity with the requirements of this section during the period of 
affordability so that the total number of housing units meeting the 
requirements of this section remains the same, and each substituted unit 
must be comparable in terms of size, features, and number of bedrooms to 
the originally designated HTF-assisted unit.
    (h) Tenant selection. The tenants must be selected in accordance 
with Sec.  93.303.
    (i) Onsite inspections and financial oversight. See Sec.  93.404(d) 
for the grantee's ongoing responsibilities for onsite inspections and 
financial oversight.



Sec.  93.303  Tenant protections and selection.

    (a) Lease. There must be a written lease between the tenant and the 
owner of rental housing assisted with HTF funds that is for a period of 
not less than one year, unless by mutual agreement between the tenant 
and the owner a shorter period is specified. The lease must incorporate 
the VAWA lease term/addendum required under Sec.  93.356(d).
    (b) Prohibited lease terms. The lease may not contain any of the 
following provisions:
    (1) Agreement to be sued. Agreement by the tenant to be sued, to 
admit guilt, or to a judgment in favor of the owner in a lawsuit brought 
in connection with the lease;
    (2) Treatment of property. Agreement by the tenant that the owner 
may take, hold, or sell personal property of household members without 
notice to the tenant and a court decision on the

[[Page 639]]

rights of the parties. This prohibition, however, does not apply to an 
agreement by the tenant concerning disposition of personal property 
remaining in the housing unit after the tenant has moved out of the 
unit. The owner may dispose of this personal property in accordance with 
State law;
    (3) Excusing owner from responsibility. Agreement by the tenant not 
to hold the owner or the owner's agents legally responsible for any 
action or failure to act, whether intentional or negligent;
    (4) Waiver of notice. Agreement of the tenant that the owner may 
institute a lawsuit without notice to the tenant;
    (5) Waiver of legal proceedings. Agreement by the tenant that the 
owner may evict the tenant or household members without instituting a 
civil court proceeding in which the tenant has the opportunity to 
present a defense, or before a court decision on the rights of the 
parties;
    (6) Waiver of a jury trial. Agreement by the tenant to waive any 
right to a trial by jury;
    (7) Waiver of right to appeal court decision. Agreement by the 
tenant to waive the tenant's right to appeal, or to otherwise challenge 
in court, a court decision in connection with the lease;
    (8) Tenant chargeable with cost of legal actions regardless of 
outcome. Agreement by the tenant to pay attorney's fees or other legal 
costs even if the tenant wins in a court proceeding by the owner against 
the tenant. The tenant, however, may be obligated to pay costs if the 
tenant loses; and
    (9) Mandatory supportive services. Agreement by the tenant to accept 
supportive services that are offered.
    (c) Termination of tenancy. An owner may not terminate the tenancy 
or refuse to renew the lease of a tenant of rental housing assisted with 
HTF funds, except for serious or repeated violation of the terms and 
conditions of the lease; for violation of applicable Federal, State, or 
local law; or for other good cause. Good cause does not include an 
increase in the tenant's income. To terminate or refuse to renew 
tenancy, the owner must serve written notice upon the tenant specifying 
the grounds for the action and providing a specific period for vacating 
that is consistent with State or local law.
    (d) Tenant selection. An owner of rental housing assisted with HTF 
funds must comply with the affirmative marketing requirements 
established by the grantee pursuant to Sec.  93.350. The owner must 
adopt and follow written tenant selection policies and criteria that:
    (1) Limit the housing to income-eligible families;
    (2) Are reasonably related to the applicants' ability to perform the 
obligations of the lease (i.e., to pay the rent, not to damage the 
housing; not to interfere with the rights and quiet enjoyment of other 
tenants);
    (3) Limit eligibility or give a preference to a particular segment 
of the population if permitted in its written agreement with the grantee 
(and only if the limitation or preference is described in the grantee's 
consolidated plan).
    (i) Any limitation or preference must not violate nondiscrimination 
requirements in Sec.  93.350. A limitation or preference does not 
violate nondiscrimination requirements if the housing also receives 
funding from a Federal program that limits eligibility to a particular 
segment of the population (e.g., the Housing Opportunity for Persons 
With AIDS program under 24 CFR part 574), and the limit or preference is 
tailored to serve that segment of the population.
    (ii) If a project does not receive funding from a Federal program 
that limits eligibility to a particular segment of the population, the 
project may have a limitation or preference for persons with 
disabilities who need services offered at a project only if:
    (A) The limitation or preference is limited to the population of 
families (including individuals) with disabilities that significantly 
interfere with their ability to obtain and maintain housing;
    (B) Such families will not be able to obtain or maintain themselves 
in housing without appropriate supportive services; and
    (C) Such services cannot be provided in a nonsegregated setting. The 
families must not be required to accept the services offered at the 
project. In advertising the project, the owner may advertise the project 
as offering services for a particular type of disability; however, the 
project must be open to

[[Page 640]]

all otherwise eligible persons with disabilities who may benefit from 
the services provided in the project.
    (4) Do not exclude an applicant with a voucher under the Section 8 
Tenant-Based Assistance: Housing Choice Voucher program (24 CFR part 
982) or an applicant participating in a HOME tenant-based rental 
assistance program (24 CFR part 92) because of the status of the 
prospective tenant as a holder of such voucher or comparable HOME 
tenant-based assistance document.
    (5) Provide for the selection of tenants from a written waiting list 
in the chronological order of their application, insofar as is 
practicable;
    (6) Give prompt written notification to any rejected applicant of 
the grounds for any rejection; and
    (7) Comply with the VAWA requirements prescribed in Sec.  93.356.

[80 FR 5220, Jan. 30, 2015, as amended at 81 FR 80805, Nov. 16, 2016]



Sec.  93.304  Qualification as affordable housing: Homeownership.

    (a) Homeownership activities. Housing that is for purchase by a 
first-time homebuyer must meet the affordability requirements of this 
section.
    (b) Single family housing. The housing must be single-family 
housing, as defined at Sec.  93.2.
    (c) Modest housing. The housing must be modest housing, in 
accordance with Sec.  93.305.
    (d) First-time homebuyer and income requirements. The housing must 
be acquired by a first-time homebuyer whose family qualifies as an 
income-eligible family in accordance with Sec.  93.251 and the housing 
must be the principal residence of the family throughout the period 
described in paragraph (e) of this section. In determining the income 
eligibility of the family, the grantee must include the income of all 
persons living in the housing. Before purchasing the housing, the family 
must have completed a program of independent financial education and 
homeownership counseling from an eligible organization that has been 
certified in accordance with section 106(e) of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701x (e)).
    (e) Period of affordability. The HTF-assisted housing must meet the 
affordability requirements for not less than 30 years.
    (f) Resale or recapture requirements. The grantee must establish the 
resale or recapture requirements that comply with the standards of Sec.  
93.305 and set forth the requirements in its consolidated plan. HUD must 
determine that they are appropriate and must specifically approve them 
in writing.
    (g) Special considerations for single family properties with more 
than one unit. (1) If the HTF funds are used only to assist an income-
eligible homebuyer in acquiring one unit in a single family property 
containing more than one unit and the assisted unit will be the 
principal residence of the homebuyer, the affordability requirements of 
this section apply only to the assisted unit.
    (2) If HTF funds are also used to assist the income-eligible 
homebuyer in acquiring one or more of the rental units in the single 
family property, the affordability requirements of Sec.  93.302 apply to 
assisted rental units, except that the grantee must impose resale 
restrictions on all assisted units (owner-occupied and rental units) in 
the single-family housing. The affordability requirements on all 
assisted units continue for the period of affordability. If HTF funds 
are used to assist only the rental units in such a property, then the 
requirements of Sec.  93.302 would apply and the owner-occupied unit 
would not be subject to the income targeting or affordability provisions 
of this section.
    (h) Lease-purchase. (1) HTF funds may be used to assist homebuyers 
through lease-purchase programs for existing housing and for housing to 
be constructed. The housing must be purchased by an eligible homebuyer 
within 36 months of signing the lease-purchase agreement. The homebuyer 
must qualify as an income-eligible family at the time the lease-purchase 
agreement is signed.
    (2) If HTF funds are used to acquire housing that will be resold to 
a homebuyer through a lease-purchase program, the HTF affordability 
requirements for rental housing in Sec.  93.302 shall apply if the 
housing is not transferred to an eligible homebuyer within 42 months 
after project completion.
    (i) Contract to purchase. If HTF funds are used to assist a 
homebuyer who has

[[Page 641]]

entered into a contract to purchase housing to be constructed, the 
homebuyer must qualify as an income-eligible family at the time the 
contract is signed.
    (j) If there is no ratified sales contract with an eligible 
homebuyer for the housing within 9 months of the date of completion of 
construction or rehabilitation, the housing must be rented to an 
eligible tenant in accordance with Sec.  93.301.
    (k) Preserving affordability. (1) To preserve the affordability of 
housing that was previously assisted with HTF funds and subject to the 
requirements of this section, a grantee may use additional HTF funds to 
acquire the housing through a purchase option, right of first refusal, 
or other preemptive right before foreclosure, or to acquire the housing 
at the foreclosure sale, undertake any necessary rehabilitation, and 
provide assistance to another first-time homebuyer. The housing must be 
sold to a new eligible homebuyer in accordance with the requirements of 
this section. Additional HTF funds may not be used if the mortgage in 
default was funded with HTF funds.
    (2) The total amount of original and additional HTF assistance may 
not exceed the maximum per-unit development subsidy amount established 
pursuant to Sec.  93.300. As an alternative to charging the cost to the 
HTF program under Sec.  93.201, the grantee may charge the cost to the 
HTF program under Sec.  93.302 as a reasonable administrative cost of 
its HTF program, so that the additional HTF funds for the housing are 
not subject to the maximum per-unit subsidy amount.
    (l) Agreements with lending institutions. (1) The grantee may 
provide homeownership assistance through written agreements with for-
profit or nonprofit lending institutions that are providing the first 
mortgage loan to a family. The grantee must independently verify that 
the family is income-eligible and meets the definition of ``first-time 
homebuyer,'' and must inspect the housing for compliance with the 
applicable property standards.
    (2) No fees may be charged to the family for the HTF homeownership 
assistance (e.g., origination fees or points, processing fees, 
inspection fees). The grantee must determine that the fees and other 
amounts charged to the family by the lender for the first mortgage 
financing are reasonable. Reasonable administrative costs of the HTF 
homeownership assistance can be charged to the HTF program as a project 
cost. If the grantee requires lenders to pay a fee to participate in the 
HTF program, the fee is program income to the HTF program.
    (m) Written policies. The grantee must have and follow written 
policies for:
    (1) Underwriting standards for homeownership assistance that examine 
the family's housing debt, overall debt, income, and ability to maintain 
the housing;
    (2) Anti-predatory lending; and
    (3) Refinancing loans to which HTF loans are subordinated to ensure 
that the terms of the new loan are reasonable.



Sec.  93.305  Qualification as affordable housing: modest housing 
requirements for homeownership; resale or recapture requirements.

    (a) Housing that is for acquisition by a family pursuant to Sec.  
93.304 must be modest housing.
    (1) The housing must be modest housing as follows: The housing has a 
purchase price for the type of single family housing that does not 
exceed 95 percent of the median purchase price for the area for newly 
constructed or standard housing. The grantee must use the HTF affordable 
homeownership limits provided by HUD for newly constructed housing and 
for existing housing. HUD will provide limits for affordable newly 
constructed housing based on 95 percent of the median purchase price for 
the area using Federal Housing Administration (FHA) single family 
mortgage program data for newly constructed housing, with a minimum 
limit based on 95 percent of the U.S. median purchase price for new 
construction for nonmetropolitan areas. HUD will provide limits for 
affordable existing housing based on 95 percent of the median purchase 
price for the area using FHA single family mortgage program data for 
existing housing data and other appropriate data that are available 
nation-wide for sales of existing housing, with a minimum limit

[[Page 642]]

based on 95 percent of the state-wide nonmetropolitan area median 
purchase price using these data. For States with no non-metropolitan 
areas, the minimum purchase price is defined as the lesser of the State 
non-metro or the United States non-metro median.
    (2) In lieu of the limits provided by HUD, the grantee may determine 
95 percent of the median area purchase price for single family housing 
in the jurisdiction annually, as follows: The grantee must set forth the 
price for different types of single family housing for the jurisdiction. 
The grantee may determine separate limits for existing housing and newly 
constructed housing. For housing located outside of metropolitan areas, 
a grantee may aggregate sales data from more than one county, if the 
counties are contiguous and similarly situated. The following 
information must be included in the annual action plan of the 
consolidated plan submitted to HUD for review and updated in each action 
plan:
    (i) The 95 percent of median area purchase price must be established 
in accordance with a market analysis that ensured that a sufficient 
number of recent housing sales are included in the survey.
    (ii) Sales must cover the requisite number of months based on 
volume: For 500 or more sales per month, a one- month reporting period; 
for 250 through 499 sales per month, a 2-month reporting period; for 
less than 250 sales per month, at least a 3-month reporting period. The 
data must be listed in ascending order of sales price.
    (iii) The address of the listed properties must include the location 
within the grantee. Lot, square, and subdivision data may be substituted 
for the street address.
    (iv) The housing sales data must reflect all, or nearly all, of the 
one- family house sales in the entire area.
    (v) To determine the median, take the middle sale on the list if an 
odd number of sales, and if an even number, take the higher of the 
middle numbers and consider it the median. After identifying the median 
sales price, the amount should be multiplied by 0.95 to determine 95 
percent of the median area purchase price.
    (b) Resale or recapture requirements. The grantee must establish the 
resale or recapture requirements that comply with the standards of this 
section and set forth the requirements in its consolidated plan. The 
HTF-assisted housing must meet the affordability requirements for not 
less than 30 years if resale restrictions are used. If recapture 
restrictions are used, the affordability periods are based on the amount 
of HTF funds per unit as follows:

------------------------------------------------------------------------
                                                       Minimum period of
     Homeownership assistance HTF amount per-unit       affordability in
                                                             years
------------------------------------------------------------------------
Under $30,000........................................                 10
$30,000-$50,000......................................                 20
Over $50,000.........................................                 30
------------------------------------------------------------------------

    (1) Resale. Resale requirements must ensure, if the housing does not 
continue to be the principal residence of the family for the duration of 
the period of affordability, that the housing is made available for 
subsequent purchase only to a buyer whose family qualifies as a very 
low-income family and will use the property as the family's principal 
residence. The resale requirement must also ensure that the price at 
resale provides the original HTF-assisted owner a fair return on 
investment (including the homeowner's investment and any capital 
improvement) and ensure that the housing will remain affordable to a 
reasonable range of income-eligible homebuyers. The grantee must 
specifically define ``fair return on investment'' and ``affordability to 
a reasonable range of very low-income homebuyers,'' and specifically 
address how it will make the housing affordable to an income eligible 
homebuyer in the event that the resale price necessary to provide fair 
return is not affordable to the subsequent buyer. Deed restrictions, 
covenants running with the land, or other mechanisms approved by HUD 
must be used as the mechanism to impose the resale requirements. The 
affordability restrictions may terminate upon occurrence of any of the 
following termination events: foreclosure, transfer in lieu of 
foreclosure, or assignment of an FHA insured mortgage to HUD. The 
grantee may use purchase options,

[[Page 643]]

rights of first refusal or other preemptive rights to purchase the 
housing before foreclosure to preserve affordability. The affordability 
restrictions shall be revived according to the original terms if, during 
the original affordability period, the owner of record before the 
termination event, obtains an ownership interest in the housing.
    (2) Recapture. (i) Recapture provisions must ensure that the grantee 
recoups all or a portion of the HTF assistance to the homebuyers, if the 
housing does not continue to be the principal residence of the family 
for the duration of the period of affordability. The grantee may 
structure its recapture provisions based on its program design and 
market conditions. Recapture provisions may permit the subsequent 
homebuyer to assume the HTF assistance (subject to the HTF requirements 
for the remainder of the period of affordability) if the subsequent 
homebuyer is income-eligible, and no additional HTF assistance is 
provided.
    (ii) The following options for recapture requirements are acceptable 
to HUD. The grantee may adopt, modify, or develop its own recapture 
requirements for HUD approval. In establishing its recapture 
requirements, the grantee is subject to the limitation that, when the 
recapture requirement is triggered by a sale (voluntary or involuntary) 
of the housing unit, the amount recaptured cannot exceed the net 
proceeds, if any. The net proceeds are the sales price minus superior 
loan repayment (other than HTF funds) and any closing costs.
    (A) Recapture entire amount. The grantee may recapture the entire 
amount of the HTF assistance from the homeowner.
    (B) Reduction during affordability period. The grantee may reduce 
the HTF assistance amount to be recaptured on a prorata basis for the 
time the homeowner has owned and occupied the housing measured against 
the required affordability period.
    (C) Shared net proceeds. If the net proceeds are not sufficient to 
recapture the full HTF assistance (or a reduced amount as provided for 
in this section) plus enable the homeowner to recover the amount of the 
homeowner's downpayment and any capital improvement investment made by 
the owner since purchase, the grantee may share the net proceeds. The 
net proceeds are the sales price minus loan repayment (other than HTF 
funds) and closing costs. The net proceeds may be divided proportionally 
as set forth in the following mathematical formulas:
[GRAPHIC] [TIFF OMITTED] TR30JA15.010

    (D) Owner investment returned first. The grantee may permit the 
homebuyer to recover the homebuyer's entire investment (downpayment and 
capital improvements made by the owner since purchase) before 
recapturing the HTF assistance.
    (E) Amount subject to recapture. The HTF assistance that is subject 
to recapture is based on the amount of HTF assistance that enabled the 
homebuyer to buy the dwelling unit. This includes any HTF assistance 
that reduced the purchase price from fair market value to an affordable 
price, but excludes the amount between the cost of producing the unit 
and the market value of the property (i.e., the development subsidy). 
The recaptured funds must be used to carry out HTF-eligible activities 
in accordance with the requirements of this part. If the HTF assistance 
is only used for the development subsidy and therefore not subject to 
recapture, the resale option must be used.

[[Page 644]]



                  Subpart H_Other Federal Requirements



Sec.  93.350  Other federal requirements and nondiscrimination; 
affirmative marketing.

    (a) General. The Federal requirements set forth in 24 CFR part 5, 
subpart A, are applicable to participants in the HTF program. The 
requirements of this subpart include: nondiscrimination and equal 
opportunity; disclosure requirements; debarred, suspended, or ineligible 
contractors; drug-free work; and housing counseling.
    (b) Affirmative marketing. (1) Each grantee must adopt and follow 
affirmative marketing procedures and requirements for rental projects 
containing five or more HTF-assisted housing units and for homeownership 
assistance programs. Affirmative marketing steps consist of actions to 
provide information and otherwise attract eligible persons in the 
housing market area to the available housing without regard to race, 
color, national origin, sex, religion, familial status, or disability. 
If a grantee's written agreement with the project owner permits the 
rental housing project to limit tenant eligibility or to have a tenant 
preference in accordance with Sec.  93.303(d)(3), the grantee must have 
affirmative marketing procedures and requirements that apply in the 
context of the limited/preferred tenant eligibility for the project.
    (2) The affirmative marketing requirements and procedures adopted 
must include:
    (i) Methods for informing the public, owners, and potential tenants 
about Federal fair housing laws and the grantee's affirmative marketing 
policy (e.g., the use of the Equal Housing Opportunity logotype or 
slogan in press releases and solicitations for owners, and written 
communication to fair housing and other groups);
    (ii) Requirements and practices the grantee and owner must adhere to 
in order to carry out the grantee's affirmative marketing procedures and 
requirements (e.g., use of commercial media, use of community contacts, 
use of the Equal Housing Opportunity logotype or slogan, and display of 
fair housing poster);
    (iii) Procedures to be used by the grantee and owners to inform and 
solicit applications from persons in the housing market area who are not 
likely to apply for the rental housing or homeownership assistance 
program without special outreach (e.g., through the use of community 
organizations, places of worship, employment centers, fair housing 
groups, or housing counseling agencies);
    (iv) Records that will be kept describing actions taken by the 
grantee and owners to affirmatively market rental housing units and 
homeownership assistance program and records to assess the results of 
these actions; and
    (v) A description of how the grantee will annually assess the 
success of affirmative marketing actions and what corrective actions 
will be taken where affirmative marketing requirements are not met.
    (3) A grantee that subgrants HTF funds to subgrantees must require 
each subgrantee to either follow the grantee's procedures and 
requirements or adopt its own affirmative marketing procedures and 
requirements that meet this section.

[80 FR 5220, Jan. 30, 2015, as amended at 81 FR 90657, Dec. 14, 2016]



Sec.  93.351  Lead-based paint.

    Housing assisted with HTF funds is subject to the regulations at 24 
CFR part 35, subparts A, B, J, K, and R.



Sec.  93.352  Displacement, relocation, and acquisition.

    (a) Minimizing displacement. Consistent with the other goals and 
objectives of this part, the grantee must ensure that it has taken all 
reasonable steps to minimize the displacement of persons (families, 
individuals, businesses, nonprofit organizations, and farms) as a result 
of a project assisted with HTF funds. To the extent feasible, displaced 
residential tenants must be provided a reasonable opportunity to lease 
and occupy a suitable, decent, safe, sanitary, and affordable dwelling 
unit in the building/complex upon completion of the project.
    (b) Temporary relocation. The following policies cover residential 
tenants who will not be required to move permanently but who must 
relocate

[[Page 645]]

temporarily for the project. Such tenants must be provided:
    (1) Reimbursement for all reasonable out-of-pocket expenses incurred 
in connection with the temporary relocation, including the cost of 
moving to and from the temporarily occupied housing and any increase in 
monthly rent/utility costs.
    (2) Appropriate advisory services, including reasonable advance 
written notice of:
    (i) The date and approximate duration of the temporary relocation;
    (ii) The location of the suitable, decent, safe, and sanitary 
dwelling to be made available for the temporary period;
    (iii) The terms and conditions under which the tenant may lease and 
occupy a suitable, decent, safe, and sanitary dwelling in the building/
complex upon completion of the project; and
    (iv) The provisions of paragraph (b)(1) of this section.
    (c) Relocation assistance for displaced persons--(1) General. A 
displaced person (defined in paragraph (c)(2) of this section) must be 
provided relocation assistance at the levels described in, and in 
accordance with the requirements of the Uniform Relocation Assistance 
and Real Property Acquisition Policies Act of 1970 (URA) (42 U.S.C. 
4201-4655) and 49 CFR part 24. A ``displaced person'' must be advised of 
his or her rights under the Fair Housing Act and, if the comparable 
replacement dwelling used to establish the amount of the replacement 
housing payment to be provided to a minority person is located in an 
area of minority concentration, the minority person also must be given, 
if possible, referrals to comparable and suitable, decent, safe, and 
sanitary replacement dwellings not located in such areas.
    (2) Displaced person. (i) For purposes of this paragraph (c), the 
term ``displaced person'' means a person (family individual, business, 
nonprofit organization, or farm, including any corporation, partnership 
or association) that moves from real property or moves personal property 
from real property, permanently, as a direct result of acquisition, 
rehabilitation, or demolition for a project assisted with HTF funds. 
This includes any permanent, involuntary move for an assisted project, 
including any permanent move from the real property that is made:
    (A) After notice by the owner to move permanently from the property, 
if the move occurs on or after:
    (1) The date of the submission of an application to the grantee or 
HUD, if the applicant has site control and the application is later 
approved; or
    (2) The date the grantee approves the applicable site, if the 
applicant does not have site control at the time of the application; or
    (B) Before the date described in paragraph (c)(2)(i)(A) of this 
section, if the grantee or HUD determines that the displacement resulted 
directly from acquisition, rehabilitation, or demolition for the 
project; or
    (C) By a tenant-occupant of a dwelling unit, if any one of the 
following three situations occurs:
    (1) The tenant moves after execution of the agreement covering the 
acquisition, rehabilitation, or demolition and the move occurs before 
the tenant is provided written notice offering the tenant the 
opportunity to lease and occupy a suitable, decent, safe, and sanitary 
dwelling in the same building/complex upon completion of the project 
under reasonable terms and conditions. Such reasonable terms and 
conditions must include a term of at least one year at a monthly rent 
and estimated average monthly utility costs that do not exceed the 
greater of:
    (i) The tenant's monthly rent before such agreement and estimated 
average monthly utility costs; or
    (ii) The total tenant payment, as determined under 24 CFR 5.628, if 
the tenant is low-income, or 30 percent of gross household income, if 
the tenant is not low-income;
    (2) The tenant is required to relocate temporarily, does not return 
to the building/complex, and either:
    (i) The tenant is not offered payment for all reasonable out-of-
pocket expenses incurred in connection with the temporary relocation; or
    (ii) Other conditions of the temporary relocation are not 
reasonable; or
    (3) The tenant is required to move to another dwelling unit in the 
same building/complex but is not offered reimbursement for all 
reasonable out-of-

[[Page 646]]

pocket expenses incurred in connection with the move, or other 
conditions of the move are not reasonable.
    (ii) Notwithstanding paragraph (c)(2)(i) of this section, a person 
does not qualify as a ``displaced person'' if:
    (A) The person has been evicted for cause based upon a serious or 
repeated violation of the terms and conditions of the lease or occupancy 
agreement, violation of applicable Federal, State or local law, or other 
good cause, and the grantee determines that the eviction was not 
undertaken for the purpose of evading the obligation to provide 
relocation assistance. The effective date of any termination or refusal 
to renew must be preceded by at least 30 calendar days advance written 
notice to the tenant specifying the grounds for the action.
    (B) The person moved into the property after the submission of the 
application, but before signing a lease and commencing occupancy, was 
provided written notice of the project, its possible impact on the 
person (e.g., the person may be displaced, temporarily relocated, incur 
a rent increase), and the fact that the person would not qualify as a 
``displaced person'' (or for any assistance under this section) as a 
result of the project;
    (C) The person is ineligible under 49 CFR 24.2(g)(2); or
    (D) HUD determines that the person was not displaced as a direct 
result of acquisition, rehabilitation, or demolition for the project.
    (iii) The grantee may, at any time, ask HUD to determine whether a 
displacement is or would be covered by this rule.
    (3) Initiation of negotiations. For purposes of determining the 
formula for computing replacement housing assistance to be provided 
under this paragraph (c) to a tenant displaced from a dwelling as a 
direct result of private-owner rehabilitation, demolition, or 
acquisition of the real property, the term ``initiation of 
negotiations'' means the execution of the agreement covering the 
acquisition, rehabilitation, or demolition.
    (d) Optional relocation assistance. The grantee may provide 
relocation payments and other relocation assistance to families, 
individuals, businesses, nonprofit organizations, and farms displaced by 
a project assisted with HTF funds where the displacement is not subject 
to paragraph (c) of this section. The grantee may also provide 
relocation assistance to persons covered under paragraph (c) of this 
section beyond that required. For any such assistance that is not 
required by State or local law, the grantee must adopt a written policy 
available to the public that describes the optional relocation 
assistance that it has elected to furnish and provides for equal 
relocation assistance within each class of displaced persons.
    (e) Real property acquisition requirements. The acquisition of real 
property for a project is subject to the URA and the requirements of 49 
CFR part 24, subpart B.
    (f) Appeals. A person who disagrees with the grantee's determination 
concerning whether the person qualifies as a displaced person, or the 
amount of relocation assistance for which the person may be eligible, 
may file a written appeal of that determination with the grantee.



Sec.  93.353  Conflict of interest.

    (a) Applicability of 2 CFR 200.318. In the procurement of property 
and services by grantees and subgrantees, the conflict of interest 
provisions in 2 CFR 200.318 apply. In all cases not governed by 2 CFR 
200.318, the provisions of this section apply.
    (b) Conflicts prohibited. No persons described in paragraph (c) of 
this section who exercise or have exercised any functions or 
responsibilities with respect to activities assisted with HTF funds or 
who are in a position to participate in a decision-making process or 
gain inside information with regard to these activities may obtain a 
financial interest or financial benefit from a HTF-assisted activity, or 
have a financial interest in any contract, subcontract, or agreement 
with respect to the HTF-assisted activity, or the proceeds from such 
activity, either for themselves or those with whom they have business or 
immediate family ties, during their tenure or for one year thereafter. 
Immediate family ties include (whether by blood, marriage, or adoption) 
the spouse, parent (including

[[Page 647]]

a stepparent), child (including a stepchild), brother, sister (including 
a stepbrother or stepsister), grandparent, grandchild, and in-laws of a 
covered person.
    (c) Persons covered. The conflict of interest provisions of 
paragraph (b) of this section apply to any person who is an employee, 
agent, consultant, officer, or elected official or appointed official of 
the grantee or subgrantee.
    (d) Exceptions: Threshold requirements. Upon the written request of 
the grantee, HUD may grant an exception to the provisions of paragraph 
(b) of this section on a case-by-case basis when it determines that the 
exception will serve to further the purposes of the HTF and the 
effective and efficient administration of the grantee's program or 
project. An exception may be considered only after the grantee has 
provided the following:
    (1) A disclosure of the nature of the conflict, accompanied by an 
assurance that there has been public disclosure of the conflict and a 
description of how the public disclosure was made; and
    (2) An opinion of the grantee's attorney that the interest for which 
the exception is sought would not violate State or local law.
    (e) Factors to be considered for exceptions. In determining whether 
to grant a requested exception after the grantee has satisfactorily met 
the requirements of paragraph (d) of this section, HUD will consider the 
cumulative effect of the following factors, where applicable:
    (1) Whether the exception would provide a significant cost benefit 
or an essential degree of expertise to the program or project which 
would otherwise not be available;
    (2) Whether the person affected is a member of a group or class of 
income eligible persons intended to be the beneficiaries of the assisted 
activity, and the exception will permit such person to receive generally 
the same interests or benefits as are being made available or provided 
to the group or class;
    (3) Whether the affected person has withdrawn from his or her 
functions or responsibilities, or the decisionmaking process with 
respect to the specific assisted activity in question;
    (4) Whether the interest or benefit was present before the affected 
person was in a position as described in paragraph (c) of this section;
    (5) Whether undue hardship will result either to the grantee or the 
person affected when weighed against the public interest served by 
avoiding the prohibited conflict; and
    (6) Any other relevant considerations.
    (f) Recipient--(1) General. No recipient assisted with HTF funds (or 
officer, employee, agent, elected or appointed official, or consultant 
of recipient or immediate family member or immediate family member of an 
officer, employee, agent, elected or appointed official, or consultant 
of a recipient) whether private, for-profit or nonprofit, may occupy a 
HTF-assisted affordable housing unit in a project during the required 
period of affordability specified in Sec.  93.302(e) or Sec.  93.304. 
This provision does not apply to an employee or agent of the recipient 
who occupies a housing unit as the project manager or maintenance 
worker.
    (2) Exceptions. Upon written request of a recipient, the grantee (or 
subgrantee, if authorized by the grantee) may grant an exception to the 
provisions of paragraph (f)(1) of this section on a case-by-case basis 
when it determines that the exception will serve to further the purposes 
of the HTF program and the effective and efficient administration of the 
recipient's HTF-assisted project. In determining whether to grant a 
requested exception, the grantee shall consider the following factors:
    (i) Whether the person receiving the benefit is a member of a group 
or class of low-income persons intended to be the beneficiaries of the 
assisted housing, and the exception will permit such person to receive 
generally the same interests or benefits as are being made available or 
provided to the group or class;
    (ii) Whether the person has withdrawn from his or her functions or 
responsibilities, or the decisionmaking process with respect to the 
specific assisted housing in question;
    (iii) Whether the tenant protection requirements of Sec.  93.303 are 
being observed;

[[Page 648]]

    (iv) Whether the affirmative marketing requirements of Sec.  93.350 
are being observed and followed; and
    (v) Any other factor relevant to the grantee's determination, 
including the timing of the requested exception.



Sec.  93.354  Funding Accountability and Transparency Act.

    The HTF grant to the grantee and all assistance provided to 
subgrantees and recipients shall be considered a Federal award for 
purposes of the Federal Funding Accountability and Transparency Act of 
2006 (31 U.S.C. 6101 note).



Sec.  93.355  Eminent domain.

    No HTF funds may be used in conjunction with property taken by 
eminent domain, unless eminent domain is employed only for a public use, 
except that, public use shall not be construed to include economic 
development that primarily benefits any private entity.



Sec.  93.356  VAWA requirements.

    (a) General. (1) The Violence Against Women Act (VAWA) requirements 
set forth in 24 CFR part 5, subpart L, apply to all rental housing 
assisted with HTF funds, as provided in this section.
    (2) For the HTF program, the ``covered housing provider,'' as this 
term is used in HUD's regulations in 24 CFR part 5, subpart L, refers 
to:
    (i) The owner of HTF-assisted rental housing for the purposes of 24 
CFR 5.2005(d)(1), (2), (3), and (4) and 5.2009(a); and
    (ii) The owner and the grantee for purposes of 24 CFR 5.2005(e) and 
5.2007, except as otherwise provided in paragraph (f) of this section.
    (b) Notification requirements. The grantee must provide a notice and 
certification form that meet the requirements of 24 CFR 5.2005(a) to the 
owner of HTF-assisted rental housing. The owner of HTF-assisted rental 
housing must provide the notice and certification form described in 24 
CFR 5.2005(a) to the applicant for a HTF-assisted unit at the time the 
applicant is admitted to an HTF-assisted unit, or denied admission to a 
HTF-assisted unit based on the owner's tenant selection policies and 
criteria. The owner of HTF-assisted rental housing must also provide the 
notice and certification form described in 24 CFR 5.2005 with any 
notification of eviction from a HTF-assisted unit.
    (c) Bifurcation of lease requirements. For purposes of this part, 
the requirements of 24 CFR 5.2009(b) do not apply. If a family who lives 
in a HTF-assisted rental unit separates under 24 CFR 5.2009(a), the 
remaining tenant(s) may remain in the HTF-assisted unit.
    (d) VAWA lease term/addendum. The grantee must develop a VAWA lease 
term/addendum to incorporate all requirements that apply to the owner or 
lease of HTF-assisted rental housing under 24 CFR part 5, subpart L, and 
this section, including the prohibited bases for eviction and 
restrictions on construing lease terms under 24 CFR 5.2005(b) and (c). 
This VAWA lease term/addendum must also provide that the tenant may 
terminate the lease without penalty if the grantee determines that the 
tenant has met the conditions for an emergency transfer under 24 CFR 
5.2005(e).
    (e) Period of applicability. The requirements of this section shall 
apply to the owner of the HTF-assisted rental housing for the duration 
of the affordability period.
    (f) Emergency transfer plan. The grantee must develop and implement 
an emergency transfer plan and must make the determination of whether a 
tenant qualifies for an emergency transfer under the plan. The plan must 
meet the requirements in 24 CFR 5.2005(e), where, for the purposes of 
Sec.  5.2005(e)(7), the required policies must specify that for tenants 
who qualify for an emergency transfer and who wish to make an external 
emergency transfer when a safe unit is not immediately available, the 
grantee must provide a list of properties in the jurisdiction that 
include HTF-assisted units. The list must include the following 
information for each property: The property's address, contact 
information, the unit sizes (number of bedrooms) for the HTF-assisted 
units, and, to the extent known, any tenant preferences or eligibility 
restrictions for the HTF-assisted units. In addition, the grantee may:
    (1) Establish a preference under the grantee's HTF program for 
tenants

[[Page 649]]

who qualify for emergency transfers under 24 CFR 5.2005(e); and
    (2) Coordinate with victim service providers and advocates to 
develop the emergency transfer plan, make referrals, and facilitate 
emergency transfers to safe and available units.

[81 FR 80805, Nov. 16, 2016]



                    Subpart I_Program Administration



Sec.  93.400  Housing Trust Fund (HTF) accounts.

    (a) General. HUD will establish an HTF United States Treasury 
account (HTF Treasury account) for each grantee. Each grantee may use 
either a separate HTF local account or a subsidiary account within its 
general fund (or other appropriate fund) as the HTF local account.
    (b) HTF Treasury account. The HTF Treasury account includes the 
annual grant and funds reallocated to the State by formula.
    (c) HTF local account. (1) The HTF local account includes deposits 
of HTF funds disbursed from the HTF Treasury account, any program 
income, and any repayments as required by Sec.  93.403.
    (2) The HTF local account must be interest-bearing.
    (d) Reductions. HUD will reduce or recapture funds in the HTF 
account by the amount of:
    (1) Any fiscal year grant funds in the HTF Treasury account that are 
not committed within 24 months after the date of HUD's execution of the 
HTF grant agreement;
    (2) Any fiscal year grant funds in the HTF local account that are 
not expended within 5 years after the date of HUD's execution of the HTF 
grant agreement;
    (3) Any amounts pursuant to Sec.  93.453; and
    (4) Amounts that the grantee fails to obtain and that were required 
to be reimbursed or returned under Sec.  93.450.



Sec.  93.401  HTF grant agreement.

    Allocated and reallocated funds will be made available pursuant to 
an HTF grant agreement.



Sec.  93.402  Program disbursement and information system.

    (a) General. The HTF Treasury account is managed through a 
computerized disbursement and information system established by HUD. The 
system disburses HTF funds that are allocated or reallocated, and 
collects and reports information on the use of funds in the HTF Treasury 
account. The grantee must report on the receipt and use of all program 
income in HUD's computerized disbursement and information system. The 
grantee must develop and maintain a system to ensure that each recipient 
and subgrantee uses HTF funds in accordance with the requirements of 
this part and that any requirements or conditions under which the HTF 
funds were provided.
    (b) Project set-up. (1) After the grantee executes the HTF grant 
agreement, submits the applicable banking and security documents, and 
commits funds to a specific local project, the grantee shall identify 
(set up) specific activities (i.e., projects) in the disbursement and 
information system. Investments that require the set-up of projects in 
the system are the acquisition, new construction, or rehabilitation of 
housing, operating cost assistance, and operating cost assistance 
reserves. The grantee is required to enter complete project set-up 
information at the time of project set-up.
    (2) If the project set-up information is not completed within 20 
calendar days of the date of the initial project set-up, the project may 
be canceled by the system. In addition, a project that has been 
committed in the system for 12 months without an initial disbursement of 
funds may be canceled by the system.
    (c) Disbursement of HTF Funds. (1) After complete project set-up 
information is entered into the disbursement and information system, HTF 
funds for the project may be drawn down from the HTF Treasury account by 
the grantee by electronic funds transfer. Any drawdown of funds in the 
HTF Treasury account is conditioned upon the provision of satisfactory 
information by the grantee about the project and compliance with other 
procedures, as specified by HUD.

[[Page 650]]

    (2) Funds drawn from the HTF Treasury account are subject to the 
Intergovernmental Cooperation Act (31 U.S.C. 6501 et seq.) and 
regulations at 31 CFR part 205.
    (3) Funds in the HTF local account must be disbursed before requests 
are made for funds in the HTF Treasury account.
    (d) Project completion. (1) Complete project completion information 
must be entered into the disbursement and information system, or 
otherwise provided, within 120 calendar days of the date of the final 
project drawdown. If satisfactory project completion information is not 
provided, HUD may suspend further project set-ups or take other 
corrective actions.
    (2) Additional HTF funds for development-related costs may be 
committed to a project up to one year after project completion, but the 
amount of HTF funds in the project may not exceed the maximum per-unit 
development subsidy amount established pursuant to Sec.  93.300.
    (e) Access by other participants. Access to the disbursement and 
information system by other entities participating in the HTF program 
will be governed by procedures established by HUD.



Sec.  93.403  Program income and repayments.

    (a) Program income. Program income must be treated as HTF funds and 
must be used in accordance with the requirements of this part. Program 
income must be deposited in the grantee's HTF local account unless the 
grantee permits a subgrantee to retain the program income for additional 
HTF projects pursuant to the written agreement required by Sec.  
93.404(b). The grantee must report the program income received as well 
as the use of the program income in the disbursement and information 
system that HUD designates for the HTF.
    (b) Repayments. (1) Any HTF funds invested in housing that does not 
meet the affordability requirements for the period specified in Sec.  
93.302 or Sec.  93.304, as applicable, must be repaid by the grantee in 
accordance with paragraph (b)(3) of this section.
    (2) Any HTF funds invested in a project that is terminated before 
completion, either voluntarily or otherwise, must be repaid by the 
grantee, in accordance with paragraph (b)(3) of this section.
    (3) HUD will instruct the grantee to either repay the funds to the 
HTF Treasury account or the local account. Generally, if the HTF funds 
were disbursed from the grantee's HTF Treasury account, they must be 
repaid to the HTF Treasury account. If the HTF funds were disbursed from 
the grantee's HTF local account, they must be repaid to the local 
account.
    (4) If the grantee is no longer a grantee in the HTF program when 
the repayment is made, the funds must be remitted to HUD and reallocated 
in accordance with Sec.  93.54 of this part.



Sec.  93.404  Grantee responsibilities; written agreements; onsite
inspections; financial oversight.

    (a) Responsibilities. The grantee is responsible for managing the 
day-to-day operations of its HTF program, ensuring that HTF funds are 
used in accordance with all program requirements and written agreements, 
and taking appropriate action when performance problems arise. The use 
of subgrantees or contractors does not relieve the grantee of this 
responsibility. The performance and compliance of each contractor and 
subgrantee must be reviewed at least annually. The grantee must have and 
follow written policies, procedures, and systems, including a system for 
assessing risk of activities and projects and a system for monitoring 
entities consistent with this section, to ensure that the requirements 
of this part are met.
    (b) Executing a written agreement. Before disbursing any HTF funds 
to any entity, the grantee must enter into a written agreement with that 
entity. The written agreement must ensure compliance with the 
requirements of this part.
    (c) Provisions in written agreements. The contents of the agreement 
may vary depending upon the role the entity is asked to assume or the 
type of project undertaken. This section details basic requirements by 
role and the minimum provisions that must be included in a written 
agreement.

[[Page 651]]

    (1) Subgrantee. The agreement must require the subgrantee to comply 
with the requirements applicable to the grantee under this part. The 
agreement between the grantee and the subgrantee must include:
    (i) Use of the HTF funds. An HTF subgrantee that is a unit of 
general local government must have a consolidated plan under 24 CFR part 
91, and the written agreement must require that an HTF allocation plan 
to be part of the subgrantee's consolidated plan (see 24 CFR 
91.220(l)(5)). The HTF allocation plan of an HTF subgrantee that is a 
State agency is included in the grantee's HTF allocation plan. The 
grantee may impose restrictions on the use of funds by the subgrantee, 
e.g., limit to rental projects. The written agreement must require that 
the selection of projects by eligible recipients will be in accordance 
with the HTF allocation plan. The agreement must describe the tasks to 
be performed, a schedule for completing the tasks (including a schedule 
for committing funds to projects), a budget, and the period of the 
agreement. These items must be in sufficient detail to provide a sound 
basis for the grantee to effectively monitor performance under the 
agreement.
    (ii) Deadlines. The agreement must state the time requirements for 
the commitment and expenditure of HTF funds and specify that remaining 
funds will be reduced or recaptured by the grantee so that the grantee 
can meet its commitment and expenditure deadlines in Sec.  93.400.
    (iii) Audit. The agreement must state that an audit of the 
subgrantee must be conducted at least annually, in accordance with Sec.  
93.406.
    (iv) Program income. The agreement must state if program income is 
to be remitted to the grantee or to be retained by the subgrantee for 
additional HTF eligible activities.
    (v) Uniform administrative requirements. The agreement must require 
the subgrantee to comply with the requirements of 2 CFR part 200, as 
described in Sec.  93.405. The agreement must include the information in 
2 CFR 200.331.
    (vi) Other program requirements. The agreement must require the 
subgrantee to carry out each project in compliance with all Federal laws 
and regulations described in Sec. Sec.  93.350 through 93.356. The 
agreement must set forth all obligations the grantee imposes on the 
subgrantee in order to meet the VAWA requirements under Sec.  93.356, 
including notice obligations and obligations under the emergency 
transfer plan.
    (vii) Affirmative marketing. The agreement must specify the 
subgrantee's affirmative marketing responsibilities, in accordance with 
Sec.  93.350.
    (viii) Requests for disbursement of funds. The agreement must 
specify that the subgrantee may not request disbursement of funds under 
the agreement until the funds are needed for payment of eligible costs. 
The amount of each request must be limited to the amount needed. Program 
income must be disbursed before the subgrantee requests grant funds from 
the grantee.
    (ix) Reversion of assets. The agreement must specify that upon 
closeout of the subgrant agreement, the subgrantee must transfer to the 
grantee any HTF funds on hand and any accounts receivable attributable 
to the use of HTF funds.
    (x) Records and reports. The agreement must specify the particular 
records that must be maintained and the information or reports that must 
be submitted in order to assist the grantee in meeting its recordkeeping 
and reporting requirements.
    (xi) Enforcement of the agreement. The agreement must specify 
remedies for breach of the provisions of the agreement. The agreement 
must specify that, in accordance with 2 CFR 200.338, suspension or 
termination may occur if the subgrantee materially fails to comply with 
any term of the agreement. The grantee may permit the agreement to be 
terminated in whole or in part, in accordance with 2 CFR 200.339.
    (xii) Written agreement. The agreement must require that before the 
subgrantee provides HTF funds to eligible recipients, first-time 
homebuyers, or contractors, the subgrantee must have a written agreement 
that meets the requirements of this section.
    (xiii) Duration of the agreement. The agreement must specify the 
period of performance of the agreement.
    (xiv) Fees. The agreement must prohibit the subgrantee from charging

[[Page 652]]

servicing, origination, or other fees for the costs of administering the 
HTF program, except that:
    (A) The subgrantee may charge owners of rental projects reasonable 
annual fees for compliance monitoring during the period of 
affordability. The fees must be based upon the average actual cost of 
performing the monitoring of HTF-assisted rental projects. The basis for 
determining the amount of the fee amount must be documented and the fee 
must be included in the costs of the project as part of the project 
underwriting;
    (B) The subgrantee may charge nominal application fees (although 
these fees are not an eligible HTF cost) to discourage frivolous 
applications. The amount of application fees must be appropriate to the 
type of application and may not create an undue impediment to an income-
eligible family's, or other potential recipient's participation in the 
HTF program; and
    (C) The subgrantee may charge homebuyers a fee for housing 
counseling.
    (2) Eligible recipient. The agreement between the grantee and the 
eligible recipient selected for funding must include:
    (i) Use of the HTF funds. The agreement must describe the use of the 
HTF funds for the project, including the tasks to be performed, a 
schedule for completing the tasks and project (including the expenditure 
deadline), and a project budget. These items must be in sufficient 
detail to provide a sound basis for the grantee to effectively monitor 
performance under the agreement. If the grantee is providing operating 
cost assistance, the written agreement must include the provisions 
required by Sec.  93.201.
    (ii) Deadlines. The agreement must state the time requirements for 
the commitment and expenditure of HTF funds and specify that remaining 
funds will be reduced or recaptured.
    (iii) Audit. The agreement must specify that the recipient will 
submit to the grantee a cost certification performed by a certified 
public accountant for each project assisted with HTF funds. The 
agreement must specify that the recipient will submit to the grantee an 
annual audit performed on each project assisted with HTF funds, 
beginning the first year following the cost certification and with the 
final annual audit occurring the last year of the affordability period.
    (iv) Affordability. The agreement must specify the affordability 
period, require housing assisted with HTF funds to meet the 
affordability requirements of Sec.  93.302 or Sec.  93.304, as 
applicable, and must require repayment of the funds if the housing does 
not meet the affordability requirements for the specified time period. 
If the recipient is undertaking a rental project, the agreement must 
establish the initial rents and the procedures for rent increases, the 
number of HTF units, the size of the HTF units, the designation of the 
HTF units as fixed or floating, and the requirement to provide the 
address (e.g., street address and apartment number) of each HTF unit no 
later than the time of project completion. If the recipient is 
undertaking homeownership projects for sale to first-time homebuyers, in 
accordance with Sec.  93.304, the agreement must establish the resale or 
recapture requirements that must be imposed on the housing, the sales 
price or the basis upon which the sales price will be determined, and 
the disposition of the sales proceeds.
    (v) Project requirements. The agreement must require the housing to 
meet the property standards in Sec.  93.301 of this part, as applicable, 
and in accordance with the type of project assisted upon project 
completion. The agreement must also require owners of rental housing 
assisted with HTF funds to maintain the housing in compliance with Sec.  
93.301 of this part for the duration of the affordability period, and to 
comply with the requirements of Sec.  93.303. The agreement may permit 
the recipient to limit eligibility or give a preference to a particular 
segment of the population, only if the grantee has described any such 
limited eligibility or preference in its consolidated plan; provided, 
however, that any limitation or preference cannot violate 
nondiscrimination requirements in Sec.  93.350.
    (vi) Other program requirements. The agreement must require the 
eligible recipient to carry out each project in compliance with all 
Federal laws and regulations described in Sec. Sec.  93.350

[[Page 653]]

through 93.356. The agreement must set forth all obligations the grantee 
imposes on the recipient in order to meet the VAWA requirements under 
Sec.  93.356, including notice obligations and obligations under the 
emergency transfer plan.
    (vii) Affirmative marketing. The agreement must specify the 
recipient's affirmative marketing responsibilities, as enumerated by the 
grantee in accordance with Sec.  93.350.
    (viii) Requests for disbursement of funds. The agreement must 
specify that the recipient may not request disbursement of funds under 
the agreement until the funds are needed for payment of eligible costs. 
The amount of each request must be limited to the amount needed.
    (ix) Records and reports. The agreement must specify the particular 
records that must be maintained and the information or reports that must 
be submitted to assist the grantee in meeting its recordkeeping and 
reporting requirements. The owner of rental housing must annually 
provide the grantee with information on rents and occupancy of HTF-
assisted units to demonstrate compliance with Sec.  93.302. If the 
rental housing project has floating HTF units, the owner must provide 
the grantee with information regarding unit substitution and filling 
vacancies so that the project remains in compliance with HTF rental 
occupancy requirements. The agreement must specify the reporting 
requirements (including copies of financial statements) to enable the 
grantee to determine the financial condition (and continued financial 
viability) of the rental project.
    (x) Enforcement of the agreement. The agreement must provide for a 
means of enforcement of the affordable housing requirements by the 
grantee and the intended beneficiaries. This means of enforcement and 
the affordability requirements in Sec.  93.302 must be imposed by deed 
restrictions, covenants running with the land, use restrictions, or 
other mechanisms approved by HUD under which the grantee and 
beneficiaries may require specific performance. In addition, the 
agreement must specify remedies for breach of the provisions of the 
agreement.
    (xi) Duration of the agreement. The agreement must specify the 
duration of the agreement. If the housing assisted under this agreement 
is rental housing, the agreement must be in effect through the 
affordability period required by the grantee under Sec.  93.302. If the 
housing assisted under this agreement is homeownership housing, the 
agreement must be in effect at least until completion of the project and 
ownership by the first-time homebuyer.
    (xii) Fees. The agreement must prohibit project owners from charging 
origination fees, parking fees, laundry room access fees, and other 
fees; however, rental project owners may charge reasonable application 
fees to prospective tenants.
    (3) First-time homebuyer. When a grantee provides assistance to a 
homebuyer, the written agreement must include as a minimum:
    (i) Use of the HTF funds. The agreement must conform to the 
requirements in Sec.  93.304, including the limitations on the value of 
the property, principal residence requirement, lease-purchase terms, if 
applicable, and the resale or recapture provisions. The agreement must 
specify the amount of HTF funds, the form of assistance (e.g., grant, 
amortizing loan, deferred payment loan), the use of the funds (e.g., 
downpayment, closing costs), and the time by which the housing must be 
acquired.
    (ii) Resale or recapture restrictions. The agreement must specify 
the resale or recapture restrictions established under Sec.  93.304 for 
the specified time period.
    (iii) Enforcement of the agreement. The agreement must provide for a 
means of enforcement of the affordable housing requirements by the 
grantee. The means of enforcement and the affordability requirements in 
Sec.  93.304 for resale restrictions must be imposed by deed 
restrictions, covenants running with the land, use restrictions, or 
other mechanisms approved by HUD under which the grantee may require 
specific performance. In addition, the agreement must specify remedies 
for breach of the provisions of the agreement.
    (d) Onsite inspections--(1) Project completion. The grantee must 
perform an

[[Page 654]]

onsite inspection of each HTF-assisted project at project completion to 
determine that the housing meets the property standards of Sec.  93.301. 
The inspections must be in accordance with the inspection procedures 
that the grantee establishes to meet the inspection requirements of 
Sec.  93.301.
    (2) Period of affordability. (i) During the period of affordability, 
the grantee must perform onsite inspections of HTF-assisted rental 
housing buildings to determine compliance with the ongoing property 
standards of Sec.  93.301 and to verify the information submitted by the 
owners in accordance with the requirements of Sec.  93.302. The 
inspections must be in accordance with the inspection procedures that 
the grantee establishes to meet the inspection requirements of Sec.  
93.301.
    (ii) The onsite inspections must occur 12 months after project 
completion and at least once every 3 years thereafter during the period 
of affordability.
    (iii) If there are observed deficiencies for any of the inspectable 
items established by the grantee, in accordance with the inspection 
requirements of Sec.  93.301, a follow-up onsite inspection must occur 
within 12 months, or within a reasonable time frame established by the 
grantee depending on the severity of the deficiency, to verify that all 
observed deficiencies have been corrected. The grantee may establish a 
list of non-hazardous deficiencies for which correction can be verified 
by third party documentation rather than reinspection. The grantee must 
adopt a more frequent inspection schedule for properties that have been 
found to have health and safety violations. Life-threatening health and 
safety deficiencies must be corrected immediately, in accordance with 
Sec.  93.301.
    (iv) The property owner must annually certify to the grantee that 
each building in the project is suitable for occupancy, taking into 
account State and local health, safety, and other applicable codes, 
ordinances, and requirements, and the ongoing property standards 
established by the grantee to meet the requirements of Sec.  93.301.
    (v) Inspections must be based on a statistically valid sample of 
units appropriate for the size of the HTF-assisted project, as set forth 
by HUD through notice. The grantee must select the sample. For projects 
with one to four HTF-assisted units, the inspectable items (site, 
building exterior, building systems, and common areas) for each building 
with HTF-assisted units and 100 percent of the HTF-assisted dwelling 
units must be inspected.
    (e) Financial oversight. During the period of affordability, the 
grantee must examine regularly (at least annually) the financial 
condition of HTF-assisted rental projects with 10 or more HTF-assisted 
units to determine the continued financial viability of the housing and 
must take actions to correct problems.

[80 FR 5220, Jan. 30, 2015, as amended at 81 FR 80805, Nov. 16, 2016]



Sec.  93.405  Applicability of uniform administrative requirements,
cost principles, and audits.

    The requirements of 2 CFR part 200 apply to the grantees and 
subgrantees receiving HTF funds, except for the following provisions: 
Sec. Sec.  200.307, 200.311, 300.328(b), 200.329, and 200.333. If there 
is a conflict between the definitions in 2 CFR part 200 and 24 CFR part 
93, the definitions in part 93 govern.



Sec.  93.406  Audits.

    (a) Audits of the grantee and subgrantees must be conducted in 
accordance with 2 CFR part 200, subpart F. The use of HTF grant funds by 
the grantee must be audited not less than annually to ensure compliance 
with this part. Any financial statement submitted by the grantee to HUD 
must be reviewed by an independent certified public accountant, in 
accordance with Statements on Standards for Accounting and Review 
Services, which is issued by the American Institute of Certified Public 
Accountants.
    (b) The written agreement providing HTF assistance to the recipient 
must specify that the recipient will submit to the grantee a cost 
certification performed by a certified public accountant for each 
project assisted with HTF funds. The agreement must specify that the 
recipient will submit to the grantee an annual audit performed on each 
project assisted with HTF funds, beginning the first year following the

[[Page 655]]

cost certification and with the final annual audit occurring the last 
year of the affordability period.



Sec.  93.407  Recordkeeping.

    (a) General. Each grantee must establish and maintain sufficient 
records to enable HUD to determine whether the grantee has met the 
requirements of this part. At a minimum, the following records are 
needed:
    (1) Program records. (i) The forms of HTF assistance used in the 
program.
    (ii) The subsidy layering guidelines adopted in accordance with 
Sec.  93.300.
    (iii) If HTF funds are used for housing for first-time homebuyers, 
the procedures used for establishing 95 percent of the median purchase 
price for the area in accordance with Sec.  93.305, as set forth in the 
consolidated plan.
    (iv) If HTF funds are used for acquisition of housing for 
homeownership, the resale guidelines established in accordance with 
Sec.  93.304, as set forth in the consolidated plan.
    (v) Records documenting compliance with the 24-month commitment 
deadline of Sec.  93.400(d)(l).
    (vi) Records documenting compliance with the 10 percent limitation 
on administrative and planning costs in accordance with Sec.  93.202.
    (2) Project records. (i) A full description of each project assisted 
with HTF funds, including the location (address of each unit), form of 
HTF assistance, and the units assisted with HTF funds.
    (ii) The source and application of funds for each project, including 
supporting documentation, in accordance with 2 CFR 200.333 through 
200.337, and records to document the eligibility and allowability of the 
project costs, including the documentation of the actual HTF-eligible 
development costs of each HTF-assisted unit (through allocation of 
costs, if permissible under Sec.  93.200(c)) where HTF funds are used to 
assist less than all of the units in a multi-unit project.
    (iii) Records demonstrating that each rental housing or 
homeownership project meets the maximum per-unit subsidy amount 
established pursuant to Sec.  93.300(a), and the subsidy layering and 
underwriting evaluation in accordance with Sec.  93.300.
    (iv) Records (e.g., inspection reports) demonstrating that each 
project meets the property standards of Sec.  93.301 of this part at 
project completion. In addition, during the period of affordability, 
records for rental projects demonstrating compliance with the property 
standards, and financial reviews and actions pursuant to Sec.  
93.404(a).
    (v) Records demonstrating that each family is income-eligible.
    (vi) Records demonstrating that each rental housing project meets 
the affordability and income targeting requirements of Sec.  93.302 for 
the required period. Records must be kept for each family assisted.
    (vii) Records demonstrating that each lease for an assisted rental 
housing unit complies with the tenant and participant protections of 
Sec.  93.303. Records must be kept for each family assisted.
    (viii) Records demonstrating that the purchase price for each 
housing unit for a first-time homebuyer does not exceed 95 percent of 
the median purchase price for the area, in accordance with Sec.  93.305.
    (ix) Records demonstrating that each housing unit for a first-time 
homebuyer meets the affordability requirements of Sec.  93.304 for the 
required period.
    (x) Records demonstrating that a site and neighborhood standards 
review was conducted for each project that included new construction of 
rental housing assisted under this part, to determine that the site 
meets the requirements of Sec.  93.150.
    (xi) Records (written agreements) demonstrating compliance with the 
written agreements requirements in Sec.  93.404.
    (3) Financial records. (i) Records identifying the source and 
application of funds for each fiscal year, including the annual grant 
and any reallocation (identified by federal fiscal year).
    (ii) Records concerning the HTF Treasury account and local account 
required to be established and maintained by Sec.  93.400, including 
deposits, disbursements, balances, supporting documentation, and any 
other information required by the program disbursement and information 
system established by HUD.

[[Page 656]]

    (iii) Records identifying the source and application of program 
income and repayments.
    (iv) Records demonstrating adequate budget control, in accordance 
with 2 CFR part 200, including evidence of periodic account 
reconciliations.
    (4) Program administration records. (i) Written policies, 
procedures, and systems, including a system for assessing risk of 
activities and projects, and a system for monitoring entities consistent 
with this section, to ensure that the requirements of this part are met.
    (ii) Records demonstrating compliance with the applicable uniform 
administrative requirements required by Sec.  93.405.
    (iii) Records documenting required inspections, monitoring reviews 
and audits, and the resolution of any findings or concerns.
    (5) Records concerning other Federal requirements. (i) Equal 
opportunity and fair housing records, as required under 24 CFR part 121.
    (A) Data on the extent to which each racial and ethnic group and 
single-headed households (by gender of household head) have applied for, 
participated in, or benefited from, any program or activity funded in 
whole or in part with HTF funds.
    (B) Documentation of actions undertaken to meet the requirements of 
24 CFR part 135, which implements section 3 of the Housing and Urban 
Development Act of 1968, as amended (12 U.S.C. 1701u).
    (ii) Records demonstrating compliance with the affirmative marketing 
procedures and requirements of Sec.  93.350.
    (iii) Records demonstrating compliance with the lead-based paint 
requirements of 24 part 35, subparts A, B, J, K, M, and R.
    (iv) Records demonstrating compliance with requirements of Sec.  
93.352 regarding displacement, relocation, and real property 
acquisition.
    (v) Records supporting exceptions to the conflict-of-interest 
prohibition pursuant to Sec.  93.353.
    (vi) Debarment and suspension certifications required by 24 
CFR5.105(c) and 2 CFR part 2424.
    (vii) Records demonstrating compliance with Sec.  93.354.
    (viii) Records demonstrating compliance with 2 CFR 200.321 regarding 
the grantee's activities related to minority business enterprise (MBE) 
and women's business enterprise (WBE).
    (ix) Documentation on emergency transfers requested under 24 CFR 
5.2005(e) and Sec.  93.356 pertaining to victims of domestic violence, 
dating violence, sexual assault, or stalking, including data on the 
outcomes of such requests.
    (b) Period of record retention. All records pertaining to each 
fiscal year of HTF funds must be retained in a secure location for the 
most recent 5-year period, except as provided below.
    (1) For rental housing projects, records may be retained for 5 years 
after the project completion date, except that records of individual 
tenant income verifications, project rents, and project inspections must 
be retained for the most recent 5-year period, until 5 years after the 
affordability period terminates.
    (2) For homeownership housing projects, records may be retained for 
5 years after the project completion date, except for documents imposing 
resale or recapture restrictions that must be retained for 5 years after 
the affordability period terminates.
    (3) Written agreements must be retained for 5 years after the 
agreement terminates.
    (4) Records covering displacements and acquisitions must be retained 
for 5 years after the date by which all persons displaced from the 
property and all persons whose property is acquired for the project have 
received the final payment to which they are entitled, in accordance 
with Sec.  93.352.
    (5) If any litigation, claim, negotiation, audit, monitoring, 
inspection, or other action has been started before the expiration of 
the required record retention period, records must be retained until 
completion of the action and resolution of all issues that arise from 
it, or until the end of the required period, whichever is later.
    (c) Access to records. (1) The grantee must provide citizens, public 
agencies, and other interested parties with reasonable access to 
records, consistent

[[Page 657]]

with applicable State and local laws regarding privacy and obligations 
of confidentiality.
    (2) HUD and the Comptroller General of the United States, and any of 
their representatives, have the right of access to any pertinent books, 
documents, papers, or other records of the grantee, subgrantees, and 
recipients, to make audits, examinations, excerpts, and transcripts.

[80 FR 5220, Jan. 30, 2015, as amended at 81 FR 80805, Nov. 16, 2016]



Sec.  93.408  Performance reports.

    Each grantee must develop and maintain a system to track the use of 
its HTF funds, and submit annual performance and management reports on 
its HTF program in accordance with 24 CFR 91.520. HUD will make the 
performance and management reports publicly available.



               Subpart J_Performance Reviews and Sanctions



Sec.  93.450  Accountability of recipients.

    The grantee shall review each recipient to determine compliance with 
the requirements of this part and the terms of the written agreement in 
accordance with the grantee's policies, procedures, and systems 
established pursuant to Sec.  93.404(a).
    (a) Misuse of funds--(1) Reimbursement requirement. If a recipient 
of HTF assistance is determined to have used HTF funds in a manner that 
is materially in violation of the requirements of this part or any 
requirements or conditions under which the funds were provided, the 
grantee must require that, within 12 months after the determination of 
such misuse, the recipient reimburse the grantee for such misused 
amounts and return to the grantee any such amounts that remain unused or 
uncommitted for use. The reimbursement is in addition to any other 
remedies that may be available under law.
    (2) Determination. The grantee or HUD may make the determination, 
provided that:
    (i) The grantee provides notification and opportunity for 
discretionary review to HUD; and
    (ii) HUD does not subsequently reverse the determination.
    (b) Reduction for failure to obtain return of misused funds. (1) If, 
in any year, a grantee fails to obtain reimbursement or return of the 
full amount required to be reimbursed or returned to the grantee during 
the year, the amount of the grant for the grantee for the succeeding 
year will be reduced by the amount by which the amounts required to be 
reimbursed or returned exceed the amount actually reimbursed or 
returned.
    (2) In any case in which a failure to obtain reimbursement or return 
occurs during a year immediately preceding a year in which HTF grants 
will not be made, the grantee shall pay to HUD, for reallocation among 
the other grantees, an amount equal to the amount of the reduction for 
the entity that would otherwise apply.



Sec.  93.451  Performance reviews.

    (a) General. HUD will review the performance of each grantee in 
carrying out its responsibilities under this part whenever determined 
necessary by HUD, but at least annually. In conducting performance 
reviews, HUD will rely primarily on information obtained from the 
grantee's records and reports, findings from onsite monitoring, audit 
reports, and information generated from the disbursement and information 
system established by HUD. Where applicable, HUD may also consider 
relevant information pertaining to a grantee's performance gained from 
other sources, including citizen comments, complaint determinations, and 
litigation. Reviews to determine compliance with specific requirements 
of this part will be conducted as necessary, with or without prior 
notice to the grantee. Onsite comprehensive performance reviews under 
the standards in paragraph (b) of this section will be conducted after 
prior notice to the grantee.
    (b) Standards for comprehensive performance review. A grantee's 
performance will be comprehensively reviewed periodically, as prescribed 
by HUD, to determine whether the grantee has committed and expended the 
HTF funds as required by Sec.  93.400; has met

[[Page 658]]

the requirements of this part, particularly eligible activities, income 
targeting, affordability, and property standards; has awarded the funds 
in accordance with its HTF allocation plan and requirements of this 
part; has reviewed its subgrantees and recipients to determine whether 
they have satisfied the requirements of this part and the terms of their 
written agreements; and has met its performance measures in its 
consolidated plan.



Sec.  93.452  Corrective and remedial actions.

    (a) General. HUD will use the procedures in this section in 
conducting the performance review as provided in Sec.  93.451 and in 
taking corrective and remedial actions.
    (b) Performance review. (1) If HUD determines preliminarily that the 
grantee has not met a requirement of this part, the grantee will be 
given notice of this determination and an opportunity to demonstrate, 
within the time prescribed by HUD (not to exceed 30 calendar days) and 
on the basis of substantial facts and data, that it has done so.
    (2) If the grantee fails to demonstrate to HUD's satisfaction that 
it has met the requirement, HUD will take corrective or remedial action 
in accordance with this section or Sec.  93.453.
    (c) Corrective and remedial actions. Corrective or remedial actions 
for a performance deficiency (failure to meet a provision of this part) 
will be designed to prevent a continuation of the deficiency; mitigate, 
to the extent possible, its adverse effects or consequences; and prevent 
its recurrence.
    (1) HUD may instruct the grantee to submit and comply with proposals 
for action to correct, mitigate, and prevent a performance deficiency, 
including:
    (i) Preparing and following a schedule of actions for carrying out 
the affected activities, consisting of schedules, timetables, and 
milestones necessary to implement the affected activities;
    (ii) Establishing and following a management plan that assigns 
responsibilities for carrying out the remedial actions;
    (iii) Canceling or revising activities likely to be affected by the 
performance deficiency, before expending HTF funds for the activities;
    (iv) Reprogramming HTF funds that have not yet been expended from 
affected activities to other eligible activities;
    (v) Reimbursing its HTF account in any amount not used in accordance 
with the requirements of this part;
    (vi) Suspending disbursement of HTF funds for affected activities; 
and
    (vii) Establishing procedures to ensure compliance with HTF 
requirements;
    (2) HUD may also change the method of payment from an advance to 
reimbursement basis and may require supporting documentation to be 
submitted for HUD review for each payment request before payment is 
made; determine the grantee to be high risk and impose special 
conditions or restrictions on the allocation in accordance with 2 CFR 
200.207 or 200.338; and take other remedies that may be legally 
available.



Sec.  93.453  Notice and opportunity for hearing; sanctions.

    (a) If HUD finds after reasonable notice and opportunity for hearing 
that a grantee has substantially failed to comply with any provision of 
this part, and until HUD is satisfied that there is no longer any such 
failure to comply:
    (1) HUD shall reduce the funds in the grantee's HTF account by the 
amount of any expenditures that were not in accordance with the 
requirements of this part or require the grantee to repay to HUD any 
amount of the HTF grant that was not used in accordance with the 
requirements of this part; and
    (2) HUD may do one or more of the following:
    (i) Prevent withdrawals from the grantee's HTF account for 
activities affected by the failure to comply;
    (ii) Restrict the grantee's activities under this part to activities 
or recipients not affected by the failure to comply;
    (iii) Remove the State from participation in allocations or 
reallocations of funds made available under Sec. Sec.  93.50 through 
93.54 of this part; or

[[Page 659]]

    (iv) Terminate any HTF assistance to the grantee. HUD may, on due 
notice, suspend payments at any time after the issuance of a notice of 
opportunity for hearing pursuant to paragraph (a) of this section, 
pending such hearing and a final decision, to the extent that HUD 
determines such action to be necessary to preclude the further 
expenditure of funds for activities affected by the failure to comply.
    (b) Proceedings. When HUD proposes to take action pursuant to this 
section, the respondent in the proceedings will be the grantee. 
Proceedings will be conducted in accordance with 24 CFR part 26.

                         PARTS 94	99 [RESERVED]



--Table of Contents





              Sec. Appendixes A-C to Subtitle A [Reserved]

[[Page 661]]

    Subtitle B--Regulations Relating to Housing and Urban Development

[[Page 663]]



    CHAPTER I--OFFICE OF ASSISTANT SECRETARY FOR EQUAL OPPORTUNITY, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT




  --------------------------------------------------------------------

                       SUBCHAPTER A--FAIR HOUSING
Part                                                                Page
100             Discriminatory conduct under the Fair 
                    Housing Act.............................         665
103             Fair housing--complaint processing..........         688
105

[Reserved]

107             Nondiscrimination and equal opportunity in 
                    housing under Executive Order 11063.....         700
108             Compliance procedures for affirmative fair 
                    housing marketing.......................         706
110             Fair housing poster.........................         711
115             Certification and funding of State and local 
                    fair housing enforcement agencies.......         713
121             Collection of data..........................         729
125             Fair housing initiatives program............         730
            SUBCHAPTER B--EMPLOYMENT AND BUSINESS OPPORTUNITY
135             Economic opportunities for low- and very 
                    low-income persons......................         735
146             Nondiscrimination on the basis of age in HUD 
                    programs or activities receiving Federal 
                    financial assistance....................         753
180             Consolidated HUD hearing procedures for 
                    civil rights matters....................         760
181-199

[Reserved]

[[Page 665]]



                        SUBCHAPTER A_FAIR HOUSING





PART 100_DISCRIMINATORY CONDUCT UNDER THE FAIR HOUSING ACT--Table of Contents



                            Subpart A_General

Sec.
100.1 Authority.
100.5 Scope.
100.7 Liability for discriminatory housing practices.
100.10 Exemptions.
100.20 Definitions.

               Subpart B_Discriminatory Housing Practices

100.50 Real estate practices prohibited.
100.60 Unlawful refusal to sell or rent or to negotiate for the sale or 
          rental.
100.65 Discrimination in terms, conditions and privileges and in 
          services and facilities.
100.70 Other prohibited sale and rental conduct.
100.75 Discriminatory advertisements, statements and notices.
100.80 Discriminatory representations on the availability of dwellings.
100.85 Blockbusting.
100.90 Discrimination in the provision of brokerage services.

Subpart C_Discrimination in Residential Real Estate-Related Transactions

100.110 Discriminatory practices in residential real estate-related 
          transactions.
100.115 Residential real estate-related transactions.
100.120 Discrimination in the making of loans and in the provision of 
          other financial assistance.
100.125 Discrimination in the purchasing of loans.
100.130 Discrimination in the terms and conditions for making available 
          loans or other financial assistance.
100.135 Unlawful practices in the selling, brokering, or appraising of 
          residential real property.
100.140 General rules.
100.141 Definitions.
100.142 Types of information.
100.143 Appropriate corrective action.
100.144 Scope of privilege.
100.145 Loss of privilege.
100.146 Limited use of privileged information.
100.147 Adjudication.
100.148 Effective date.

    Subpart D_Prohibition Against Discrimination Because of Handicap

100.200 Purpose.
100.201 Definitions.
100.201a Incorporation by reference.
100.202 General prohibitions against discrimination because of handicap.
100.203 Reasonable modifications of existing premises.
100.204 Reasonable accommodations.
100.205 Design and construction requirements.

                   Subpart E_Housing for Older Persons

100.300 Purpose.
100.301 Exemption.
100.302 State and Federal elderly housing programs.
100.303 62 or over housing.
100.304 Housing for persons who are 55 years of age or older.
100.305 80 percent occupancy.
100.306 Intent to operate as housing designed for persons who are 55 
          years of age or older.
100.307 Verification of occupancy.
100.308 Good faith defense against civil money damages.

            Subpart F_Interference, Coercion or Intimidation

100.400 Prohibited interference, coercion or intimidation.

                     Subpart G_Discriminatory Effect

100.500 Discriminatory effect prohibited.

       Subpart H_ Quid Pro Quo and Hostile Environment Harassment

Sec.  100.600 Quid pro quo and hostile environment harassment.

    Authority: 42 U.S.C. 3535(d), 3600-3620.

    Source: 54 FR 3283, Jan. 23, 1989, unless otherwise noted.



                            Subpart A_General



Sec.  100.1  Authority.

    This regulation is issued under the authority of the Secretary of 
Housing and Urban Development to administer and enforce title VIII of 
the Civil Rights Act of 1968, as amended by the Fair Housing Amendments 
Act of 1988 (the Fair Housing Act).

[[Page 666]]



Sec.  100.5  Scope.

    (a) It is the policy of the United States to provide, within 
constitutional limitations, for fair housing throughout the United 
States. No person shall be subjected to discrimination because of race, 
color, religion, sex, handicap, familial status, or national origin in 
the sale, rental, or advertising of dwellings, in the provision of 
brokerage services, or in the availability of residential real estate-
related transactions.
    (b) This part provides the Department's interpretation of the 
coverage of the Fair Housing Act regarding discrimination related to the 
sale or rental of dwellings, the provision of services in connection 
therewith, and the availability of residential real estate-related 
transactions. The illustrations of unlawful housing discrimination in 
this part may be established by a practice's discriminatory effect, even 
if not motivated by discriminatory intent, consistent with the standards 
outlined in Sec.  100.500.
    (c) Nothing in this part relieves persons participating in a Federal 
or Federally-assisted program or activity from other requirements 
applicable to buildings and dwellings.

[54 FR 3283, Jan. 23, 1989, as amended at 78 FR 11481, Feb. 15, 2013]



Sec.  100.7  Liability for discriminatory housing practices.

    (a) Direct liability. (1) A person is directly liable for:
    (i) The person's own conduct that results in a discriminatory 
housing practice.
    (ii) Failing to take prompt action to correct and end a 
discriminatory housing practice by that person's employee or agent, 
where the person knew or should have known of the discriminatory 
conduct.
    (iii) Failing to take prompt action to correct and end a 
discriminatory housing practice by a third-party, where the person knew 
or should have known of the discriminatory conduct and had the power to 
correct it. The power to take prompt action to correct and end a 
discriminatory housing practice by a third-party depends upon the extent 
of the person's control or any other legal responsibility the person may 
have with respect to the conduct of such third-party.
    (2) For purposes of determining liability under paragraphs 
(a)(1)(ii) and (iii) of this section, prompt action to correct and end 
the discriminatory housing practice may not include any action that 
penalizes or harms the aggrieved person, such as eviction of the 
aggrieved person.
    (b) Vicarious liability. A person is vicariously liable for a 
discriminatory housing practice by the person's agent or employee, 
regardless of whether the person knew or should have known of the 
conduct that resulted in a discriminatory housing practice, consistent 
with agency law.

[81 FR 63074, Sept. 14, 2016]



Sec.  100.10  Exemptions.

    (a) This part does not:
    (1) Prohibit a religious organization, association, or society, or 
any nonprofit institution or organization operated, supervised or 
controlled by or in conjunction with a religious organization, 
association, or society, from limiting the sale, rental or occupancy of 
dwellings which it owns or operates for other than a commercial purpose 
to persons of the same religion, or from giving preference to such 
persons, unless membership in such religion is restricted because of 
race, color, or national origin;
    (2) Prohibit a private club, not in fact open to the public, which, 
incident to its primary purpose or purposes, provides lodgings which it 
owns or operates for other than a commercial purpose, from limiting the 
rental or occupancy of such lodgings to its members or from giving 
preference to its members;
    (3) Limit the applicability of any reasonable local, State or 
Federal restrictions regarding the maximum number of occupants permitted 
to occupy a dwelling; or
    (4) Prohibit conduct against a person because such person has been 
convicted by any court of competent jurisdiction of the illegal 
manufacture or distribution of a controlled substance as defined in 
section 102 of the Controlled Substances Act (21 U.S.C. 802).

[[Page 667]]

    (b) Nothing in this part regarding discrimination based on familial 
status applies with respect to housing for older persons as defined in 
subpart E of this part.
    (c) Nothing in this part, other than the prohibitions against 
discriminatory advertising, applies to:
    (1) The sale or rental of any single family house by an owner, 
provided the following conditions are met:
    (i) The owner does not own or have any interest in more than three 
single family houses at any one time.
    (ii) The house is sold or rented without the use of a real estate 
broker, agent or salesperson or the facilities of any person in the 
business of selling or renting dwellings. If the owner selling the house 
does not reside in it at the time of the sale or was not the most recent 
resident of the house prior to such sale, the exemption in this 
paragraph (c)(1) of this section applies to only one such sale in any 
24-month period.
    (2) Rooms or units in dwellings containing living quarters occupied 
or intended to be occupied by no more than four families living 
independently of each other, if the owner actually maintains and 
occupies one of such living quarters as his or her residence.



Sec.  100.20  Definitions.

    The terms Department, Fair Housing Act, and Secretary are defined in 
24 CFR part 5.
    Aggrieved person includes any person who--
    (a) Claims to have been injured by a discriminatory housing 
practice; or
    (b) Believes that such person will be injured by a discriminatory 
housing practice that is about to occur.
    Broker or Agent includes any person authorized to perform an action 
on behalf of another person regarding any matter related to the sale or 
rental of dwellings, including offers, solicitations or contracts and 
the administration of matters regarding such offers, solicitations or 
contracts or any residential real estate-related transactions.
    Discriminatory housing practice means an act that is unlawful under 
section 804, 805, 806, or 818 of the Fair Housing Act.
    Dwelling means any building, structure or portion thereof which is 
occupied as, or designed or intended for occupancy as, a residence by 
one or more families, and any vacant land which is offered for sale or 
lease for the construction or location thereon of any such building, 
structure or portion thereof.
    Familial status means one or more individuals (who have not attained 
the age of 18 years) being domiciled with--
    (a) A parent or another person having legal custody of such 
individual or individuals; or
    (b) The designee of such parent or other person having such custody, 
with the written permission of such parent or other person.

The protections afforded against discrimination on the basis of familial 
status shall apply to any person who is pregnant or is in the process of 
securing legal custody of any individual who has not attained the age of 
18 years.
    Handicap is defined in Sec.  100.201.
    Person includes one or more individuals, corporations, partnerships, 
associations, labor organizations, legal representatives, mutual 
companies, joint-stock companies, trusts, unincorporated organizations, 
trustees, trustees in cases under title 11 U.S.C., receivers, and 
fiduciaries.
    Person in the business of selling or renting dwellings means any 
person who:
    (a) Within the preceding twelve months, has participated as 
principal in three or more transactions involving the sale or rental of 
any dwelling or any interest therein;
    (b) Within the preceding twelve months, has participated as agent, 
other than in the sale of his or her own personal residence, in 
providing sales or rental facilities or sales or rental services in two 
or more transactions involving the sale or rental of any dwelling or any 
interest therein; or
    (c) Is the owner of any dwelling designed or intended for occupancy 
by, or occupied by, five or more families.
    State means any of the several states, the District of Columbia, the 
Commonwealth of Puerto Rico, or any of the territories and possessions 
of the United States.

[54 FR 3283, Jan. 23, 1989, as amended at 61 FR 5205, Feb. 9, 1996]

[[Page 668]]



               Subpart B_Discriminatory Housing Practices



Sec.  100.50  Real estate practices prohibited.

    (a) This subpart provides the Department's interpretation of conduct 
that is unlawful housing discrimination under section 804 and section 
806 of the Fair Housing Act. In general the prohibited actions are set 
forth under sections of this subpart which are most applicable to the 
discriminatory conduct described. However, an action illustrated in one 
section can constitute a violation under sections in the subpart. For 
example, the conduct described in Sec.  100.60(b)(3) and (4) would 
constitute a violation of Sec.  100.65(a) as well as Sec.  100.60(a).
    (b) It shall be unlawful to:
    (1) Refuse to sell or rent a dwelling after a bona fide offer has 
been made, or to refuse to negotiate for the sale or rental of a 
dwelling because of race, color, religion, sex, familial status, or 
national origin, or to discriminate in the sale or rental of a dwelling 
because of handicap.
    (2) Discriminate in the terms, conditions or privileges of sale or 
rental of a dwelling, or in the provision of services or facilities in 
connection with sales or rentals, because of race, color, religion, sex, 
handicap, familial status, or national origin.
    (3) Engage in any conduct relating to the provision of housing which 
otherwise makes unavailable or denies dwellings to persons because of 
race, color, religion, sex, handicap, familial status, or national 
origin.
    (4) Make, print or publish, or cause to be made, printed or 
published, any notice, statement or advertisement with respect to the 
sale or rental of a dwelling that indicates any preference, limitation 
or discrimination because of race, color, religion, sex, handicap, 
familial status, or national origin, or an intention to make any such 
preference, limitation or discrimination.
    (5) Represent to any person because of race, color, religion, sex, 
handicap, familial status, or national origin that a dwelling is not 
available for sale or rental when such dwelling is in fact available.
    (6) Engage in blockbusting practices in connection with the sale or 
rental of dwellings because of race, color, religion, sex, handicap, 
familial status, or national origin.
    (7) Deny access to or membership or participation in, or to 
discriminate against any person in his or her access to or membership or 
participation in, any multiple-listing service, real estate brokers' 
association, or other service organization or facility relating to the 
business of selling or renting a dwelling or in the terms or conditions 
or membership or participation, because of race, color, religion, sex, 
handicap, familial status, or national origin.
    (c) The application of the Fair Housing Act with respect to persons 
with handicaps is discussed in subpart D of this part.



Sec.  100.60  Unlawful refusal to sell or rent or to negotiate for
the sale or rental.

    (a) It shall be unlawful for a person to refuse to sell or rent a 
dwelling to a person who has made a bona fide offer, because of race, 
color, religion, sex, familial status, or national origin or to refuse 
to negotiate with a person for the sale or rental of a dwelling because 
of race, color, religion, sex, familial status, or national origin, or 
to discriminate against any person in the sale or rental of a dwelling 
because of handicap.
    (b) Prohibited actions under this section include, but are not 
limited to:
    (1) Failing to accept or consider a bona fide offer because of race, 
color, religion, sex, handicap, familial status, or national origin.
    (2) Refusing to sell or rent a dwelling to, or to negotiate for the 
sale or rental of a dwelling with, any person because of race, color, 
religion, sex, handicap, familial status, or national origin.
    (3) Imposing different sales prices or rental charges for the sale 
or rental of a dwelling upon any person because of race, color, 
religion, sex, handicap, familial status, or national origin.
    (4) Using different qualification criteria or applications, or sale 
or rental

[[Page 669]]

standards or procedures, such as income standards, application 
requirements, application fees, credit analysis or sale or rental 
approval procedures or other requirements, because of race, color, 
religion, sex, handicap, familial status, or national origin.
    (5) Evicting tenants because of their race, color, religion, sex, 
handicap, familial status, or national origin or because of the race, 
color, religion, sex, handicap, familial status, or national origin of a 
tenant's guest.
    (6) Conditioning the availability of a dwelling, including the 
price, qualification criteria, or standards or procedures for securing 
the dwelling, on a person's response to harassment because of race, 
color, religion, sex, handicap, familial status, or national origin.
    (7) Subjecting a person to harassment because of race, color, 
religion, sex, handicap, familial status, or national origin that causes 
the person to vacate a dwelling or abandon efforts to secure the 
dwelling.

[54 FR 3283, Jan. 23, 1989, as amended at 81 FR 63074, Sept. 14, 2016]



Sec.  100.65  Discrimination in terms, conditions and privileges and
in services and facilities.

    (a) It shall be unlawful, because of race, color, religion, sex, 
handicap, familial status, or national origin, to impose different 
terms, conditions or privileges relating to the sale or rental of a 
dwelling or to deny or limit services or facilities in connection with 
the sale or rental of a dwelling.
    (b) Prohibited actions under this section include, but are not 
limited to:
    (1) Using different provisions in leases or contracts of sale, such 
as those relating to rental charges, security deposits and the terms of 
a lease and those relating to down payment and closing requirements, 
because of race, color, religion, sex, handicap, familial status, or 
national origin.
    (2) Failing or delaying maintenance or repairs of sale or rental 
dwellings because of race, color, religion, sex, handicap, familial 
status, or national origin.
    (3) Failing to process an offer for the sale or rental of a dwelling 
or to communicate an offer accurately because of race, color, religion, 
sex, handicap, familial status, or national origin.
    (4) Limiting the use of privileges, services or facilities 
associated with a dwelling because of race, color, religion, sex, 
handicap, familial status, or national origin of an owner, tenant or a 
person associated with him or her.
    (5) Denying or limiting services or facilities in connection with 
the sale or rental of a dwelling, because a person failed or refused to 
provide sexual favors.
    (6) Conditioning the terms, conditions, or privileges relating to 
the sale or rental of a dwelling, or denying or limiting the services or 
facilities in connection therewith, on a person's response to harassment 
because of race, color, religion, sex, handicap, familial status, or 
national origin.
    (7) Subjecting a person to harassment because of race, color, 
religion, sex, handicap, familial status, or national origin that has 
the effect of imposing different terms, conditions, or privileges 
relating to the sale or rental of a dwelling or denying or limiting 
services or facilities in connection with the sale or rental of a 
dwelling.

[54 FR 3283, Jan. 23, 1989, as amended at 81 FR 63074, Sept. 14, 2016]



Sec.  100.70  Other prohibited sale and rental conduct.

    (a) It shall be unlawful, because of race, color, religion, sex, 
handicap, familial status, or national origin, to restrict or attempt to 
restrict the choices of a person by word or conduct in connection with 
seeking, negotiating for, buying or renting a dwelling so as to 
perpetuate, or tend to perpetuate, segregated housing patterns, or to 
discourage or obstruct choices in a community, neighborhood or 
development.
    (b) It shall be unlawful, because of race, color, religion, sex, 
handicap, familial status, or national origin, to engage in any conduct 
relating to the provision of housing or of services and facilities in 
connection therewith that otherwise makes unavailable or denies 
dwellings to persons.
    (c) Prohibited actions under paragraph (a) of this section, which 
are generally referred to as unlawful steering

[[Page 670]]

practices, include, but are not limited to:
    (1) Discouraging any person from inspecting, purchasing or renting a 
dwelling because of race, color, religion, sex, handicap, familial 
status, or national origin, or because of the race, color, religion, 
sex, handicap, familial status, or national origin of persons in a 
community, neighborhood or development.
    (2) Discouraging the purchase or rental of a dwelling because of 
race, color, religion, sex, handicap, familial status, or national 
origin, by exaggerating drawbacks or failing to inform any person of 
desirable features of a dwelling or of a community, neighborhood, or 
development.
    (3) Communicating to any prospective purchaser that he or she would 
not be comfortable or compatible with existing residents of a community, 
neighborhood or development because of race, color, religion, sex, 
handicap, familial status, or national origin.
    (4) Assigning any person to a particular section of a community, 
neighborhood or development, or to a particular floor of a building, 
because of race, color, religion, sex, handicap, familial status, or 
national origin.
    (d) Prohibited activities relating to dwellings under paragraph (b) 
of this section include, but are not limited to:
    (1) Discharging or taking other adverse action against an employee, 
broker or agent because he or she refused to participate in a 
discriminatory housing practice.
    (2) Employing codes or other devices to segregate or reject 
applicants, purchasers or renters, refusing to take or to show listings 
of dwellings in certain areas because of race, color, religion, sex, 
handicap, familial status, or national origin, or refusing to deal with 
certain brokers or agents because they or one or more of their clients 
are of a particular race, color, religion, sex, handicap, familial 
status, or national origin.
    (3) Denying or delaying the processing of an application made by a 
purchaser or renter or refusing to approve such a person for occupancy 
in a cooperative or condominium dwelling because of race, color, 
religion, sex, handicap, familial status, or national origin.
    (4) Refusing to provide municipal services or property or hazard 
insurance for dwellings or providing such services or insurance 
differently because of race, color, religion, sex, handicap, familial 
status, or national origin.
    (5) Enacting or implementing land-use rules, ordinances, policies, 
or procedures that restrict or deny housing opportunities or otherwise 
make unavailable or deny dwellings to persons because of race, color, 
religion, sex, handicap, familial status, or national origin.

[54 FR 3283, Jan. 23, 1989, as amended at 78 FR 11481, Feb. 15, 2013]



Sec.  100.75  Discriminatory advertisements, statements and notices.

    (a) It shall be unlawful to make, print or publish, or cause to be 
made, printed or published, any notice, statement or advertisement with 
respect to the sale or rental of a dwelling which indicates any 
preference, limitation or discrimination because of race, color, 
religion, sex, handicap, familial status, or national origin, or an 
intention to make any such preference, limitation or discrimination.
    (b) The prohibitions in this section shall apply to all written or 
oral notices or statements by a person engaged in the sale or rental of 
a dwelling. Written notices and statements include any applications, 
flyers, brochures, deeds, signs, banners, posters, billboards or any 
documents used with respect to the sale or rental of a dwelling.
    (c) Discriminatory notices, statements and advertisements include, 
but are not limited to:
    (1) Using words, phrases, photographs, illustrations, symbols or 
forms which convey that dwellings are available or not available to a 
particular group of persons because of race, color, religion, sex, 
handicap, familial status, or national origin.
    (2) Expressing to agents, brokers, employees, prospective sellers or 
renters or any other persons a preference for or limitation on any 
purchaser or renter because of race, color, religion, sex,

[[Page 671]]

handicap, familial status, or national origin of such persons.
    (3) Selecting media or locations for advertising the sale or rental 
of dwellings which deny particular segments of the housing market 
information about housing opportunities because of race, color, 
religion, sex, handicap, familial status, or national origin.
    (4) Refusing to publish advertising for the sale or rental of 
dwellings or requiring different charges or terms for such advertising 
because of race, color, religion, sex, handicap, familial status, or 
national origin.
    (d) 24 CFR part 109 provides information to assist persons to 
advertise dwellings in a nondiscriminatory manner and describes the 
matters the Department will review in evaluating compliance with the 
Fair Housing Act and in investigating complaints alleging discriminatory 
housing practices involving advertising.



Sec.  100.80  Discriminatory representations on the availability of
dwellings.

    (a) It shall be unlawful, because of race, color, religion, sex, 
handicap, familial status, or national origin, to provide inaccurate or 
untrue information about the availability of dwellings for sale or 
rental.
    (b) Prohibited actions under this section include, but are not 
limited to:
    (1) Indicating through words or conduct that a dwelling which is 
available for inspection, sale, or rental has been sold or rented, 
because of race, color, religion, sex, handicap, familial status, or 
national origin.
    (2) Representing that covenants or other deed, trust or lease 
provisions which purport to restrict the sale or rental of dwellings 
because of race, color, religion, sex, handicap, familial status, or 
national origin preclude the sale of rental of a dwelling to a person.
    (3) Enforcing covenants or other deed, trust, or lease provisions 
which preclude the sale or rental of a dwelling to any person because of 
race, color, religion, sex, handicap, familial status, or national 
origin.
    (4) Limiting information, by word or conduct, regarding suitably 
priced dwellings available for inspection, sale or rental, because of 
race, color, religion, sex, handicap, familial status, or national 
origin.
    (5) Providing false or inaccurate information regarding the 
availability of a dwelling for sale or rental to any person, including 
testers, regardless of whether such person is actually seeking housing, 
because of race, color, religion, sex, handicap, familial status, or 
national origin.
    (6) Representing to an applicant that a unit is unavailable because 
of the applicant's response to a request for a sexual favor or other 
harassment because of race, color, religion, sex, handicap, familial 
status, or national origin.

[54 FR 3283, Jan. 23, 1989, as amended at 81 FR 63074, Sept. 14, 2016]



Sec.  100.85  Blockbusting.

    (a) It shall be unlawful, for profit, to induce or attempt to induce 
a person to sell or rent a dwelling by representations regarding the 
entry or prospective entry into the neighborhood of a person or persons 
of a particular race, color, religion, sex, familial status, or national 
origin or with a handicap.
    (b) In establishing a discriminatory housing practice under this 
section it is not necessary that there was in fact profit as long as 
profit was a factor for engaging in the blockbusting activity.
    (c) Prohibited actions under this section include, but are not 
limited to:
    (1) Engaging, for profit, in conduct (including uninvited 
solicitations for listings) which conveys to a person that a 
neighborhood is undergoing or is about to undergo a change in the race, 
color, religion, sex, handicap, familial status, or national origin of 
persons residing in it, in order to encourage the person to offer a 
dwelling for sale or rental.
    (2) Encouraging, for profit, any person to sell or rent a dwelling 
through assertions that the entry or prospective entry of persons of a 
particular race, color, religion, sex, familial status, or national 
origin, or with handicaps, can or will result in undesirable 
consequences for the project, neighborhood or community, such as a 
lowering of property values, an increase in criminal or antisocial 
behavior, or a decline in the quality of schools or other services or 
facilities.

[[Page 672]]



Sec.  100.90  Discrimination in the provision of brokerage services.

    (a) It shall be unlawful to deny any person access to or membership 
or participation in any multiple listing service, real estate brokers' 
organization or other service, organization, or facility relating to the 
business of selling or renting dwellings, or to discriminate against any 
person in the terms or conditions of such access, membership or 
participation, because of race, color, religion, sex, handicap, familial 
status, or national origin.
    (b) Prohibited actions under this section include, but are not 
limited to:
    (1) Setting different fees for access to or membership in a multiple 
listing service because of race, color, religion, sex, handicap, 
familial status, or national origin.
    (2) Denying or limiting benefits accruing to members in a real 
estate brokers' organization because of race, color, religion, sex, 
handicap, familial status, or national origin.
    (3) Imposing different standards or criteria for membership in a 
real estate sales or rental organization because of race, color, 
religion, sex, handicap, familial status, or national origin.
    (4) Establishing geographic boundaries or office location or 
residence requirements for access to or membership or participation in 
any multiple listing service, real estate brokers' organization or other 
service, organization or facility relating to the business of selling or 
renting dwellings, because of race, color, religion, sex, handicap, 
familial status, or national origin.
    (5) Conditioning access to brokerage services on a person's response 
to harassment because of race, color, religion, sex, handicap, familial 
status, or national origin.
    (6) Subjecting a person to harassment because of race, color, 
religion, sex, handicap, familial status, or national origin that has 
the effect of discouraging or denying access to brokerage services.

[54 FR 3283, Jan. 23, 1989, as amended at 81 FR 63074, Sept. 14, 2016]



Subpart C_Discrimination in Residential Real Estate-Related Transactions



Sec.  100.110  Discriminatory practices in residential real estate-related
transactions.

    (a) This subpart provides the Department's interpretation of the 
conduct that is unlawful housing discrimination under section 805 of the 
Fair Housing Act.
    (b) It shall be unlawful for any person or other entity whose 
business includes engaging in residential real estate-related 
transactions to discriminate against any person in making available such 
a transaction, or in the terms or conditions of such a transaction, 
because of race, color, religion, sex, handicap, familial status, or 
national origin.



Sec.  100.115  Residential real estate-related transactions.

    The term residential real estate-related transactions means:
    (a) The making or purchasing of loans or providing other financial 
assistance--
    (1) For purchasing, constructing, improving, repairing or 
maintaining a dwelling; or
    (2) Secured by residential real estate; or
    (b) The selling, brokering or appraising of residential real 
property.



Sec.  100.120  Discrimination in the making of loans and in the provision
of other financial assistance.

    (a) It shall be unlawful for any person or entity whose business 
includes engaging in residential real estate-related transactions to 
discriminate against any person in making available loans or other 
financial assistance for a dwelling, or which is or is to be secured by 
a dwelling, because of race, color, religion, sex, handicap, familial 
status, or national origin.
    (b) Practices prohibited under this section in connection with a 
residential real estate-related transaction include, but are not limited 
to:
    (1) Failing or refusing to provide to any person information 
regarding the availability of loans or other financial assistance, 
application requirements,

[[Page 673]]

procedures or standards for the review and approval of loans or 
financial assistance, or providing information which is inaccurate or 
different from that provided others, because of race, color, religion, 
sex, handicap, familial status, or national origin.
    (2) Providing, failing to provide, or discouraging the receipt of 
loans or other financial assistance in a manner that discriminates in 
their denial rate or otherwise discriminates in their availability 
because of race, color, religion, sex, handicap, familial status, or 
national origin.
    (3) Conditioning the availability of a loan or other financial 
assistance on a person's response to harassment because of race, color, 
religion, sex, handicap, familial status, or national origin.
    (4) Subjecting a person to harassment because of race, color, 
religion, sex, handicap, familial status, or national origin that 
affects the availability of a loan or other financial assistance.

[54 FR 3283, Jan. 23, 1989, as amended at 78 FR 11481, Feb. 15, 2013; 81 
FR 63074, Sept. 14, 2016]



Sec.  100.125  Discrimination in the purchasing of loans.

    (a) It shall be unlawful for any person or entity engaged in the 
purchasing of loans or other debts or securities which support the 
purchase, construction, improvement, repair or maintenance of a 
dwelling, or which are secured by residential real estate, to refuse to 
purchase such loans, debts, or securities, or to impose different terms 
or conditions for such purchases, because of race, color, religion, sex, 
handicap, familial status, or national origin.
    (b) Unlawful conduct under this section includes, but is not limited 
to:
    (1) Purchasing loans or other debts or securities which relate to, 
or which are secured by dwellings in certain communities or 
neighborhoods but not in others because of the race, color, religion, 
sex, handicap, familial status, or national origin of persons in such 
neighborhoods or communities.
    (2) Pooling or packaging loans or other debts or securities which 
relate to, or which are secured by, dwellings differently because of 
race, color, religion, sex, handicap, familial status, or national 
origin.
    (3) Imposing or using different terms or conditions on the marketing 
or sale of securities issued on the basis of loans or other debts or 
securities which relate to, or which are secured by, dwellings because 
of race, color, religion, sex, handicap, familial status, or national 
origin.
    (c) This section does not prevent consideration, in the purchasing 
of loans, of factors justified by business necessity, including 
requirements of Federal law, relating to a transaction's financial 
security or to protection against default or reduction of the value of 
the security. Thus, this provision would not preclude considerations 
employed in normal and prudent transactions, provided that no such 
factor may in any way relate to race, color, religion, sex, handicap, 
familial status or national origin.



Sec.  100.130  Discrimination in the terms and conditions for making 
available loans or other financial assistance.

    (a) It shall be unlawful for any person or entity engaged in the 
making of loans or in the provision of other financial assistance 
relating to the purchase, construction, improvement, repair or 
maintenance of dwellings or which are secured by residential real estate 
to impose different terms or conditions for the availability of such 
loans or other financial assistance because of race, color, religion, 
sex, handicap, familial status, or national origin.
    (b) Unlawful conduct under this section includes, but is not limited 
to:
    (1) Using different policies, practices or procedures in evaluating 
or in determining creditworthiness of any person in connection with the 
provision of any loan or other financial assistance for a dwelling or 
for any loan or other financial assistance which is secured by 
residential real estate because of race, color, religion, sex, handicap, 
familial status, or national origin.
    (2) Determining the type of loan or other financial assistance to be 
provided with respect to a dwelling, or fixing the amount, interest 
rate, cost, duration or other terms or conditions for a loan or other 
financial assistance for

[[Page 674]]

a dwelling or which is secured by residential real estate, because of 
race, color, religion, sex, handicap, familial status, or national 
origin.
    (3) Servicing of loans or other financial assistance with respect to 
dwellings in a manner that discriminates, or servicing of loans or other 
financial assistance which are secured by residential real estate in a 
manner that discriminates, or providing such loans or financial 
assistance with other terms or conditions that discriminate, because of 
race, color, religion, sex, handicap, familial status, or national 
origin.
    (4) Conditioning an aspect of a loan or other financial assistance 
to be provided with respect to a dwelling, or the terms or conditions 
thereof, on a person's response to harassment because of race, color, 
religion, sex, handicap, familial status, or national origin.
    (5) Subjecting a person to harassment because of race, color, 
religion, sex, handicap, familial status, or national origin that has 
the effect of imposing different terms or conditions for the 
availability of such loans or other financial assistance.

[54 FR 3283, Jan. 23, 1989, as amended at 78 FR 11481, Feb. 15, 2013; 81 
FR 63074, Sept. 14, 2016]



Sec.  100.135  Unlawful practices in the selling, brokering, or 
appraising of residential real property.

    (a) It shall be unlawful for any person or other entity whose 
business includes engaging in the selling, brokering or appraising of 
residential real property to discriminate against any person in making 
available such services, or in the performance of such services, because 
of race, color, religion, sex, handicap, familial status, or national 
origin.
    (b) For the purposes of this section, the term appraisal means an 
estimate or opinion of the value of a specified residential real 
property made in a business context in connection with the sale, rental, 
financing or refinancing of a dwelling or in connection with any 
activity that otherwise affects the availability of a residential real 
estate-related transaction, whether the appraisal is oral or written, or 
transmitted formally or informally. The appraisal includes all written 
comments and other documents submitted as support for the estimate or 
opinion of value.
    (c) Nothing in this section prohibits a person engaged in the 
business of making or furnishing appraisals of residential real property 
from taking into consideration factors other than race, color, religion, 
sex, handicap, familial status, or national origin.
    (d) Practices which are unlawful under this section include, but are 
not limited to:
    (1) Using an appraisal of residential real property in connection 
with the sale, rental, or financing of any dwelling where the person 
knows or reasonably should know that the appraisal improperly takes into 
consideration race, color, religion, sex, handicap, familial status, or 
national origin.
    (2) Conditioning the terms of an appraisal of residential real 
property in connection with the sale, rental, or financing of a dwelling 
on a person's response to harassment because of race, color, religion, 
sex, handicap, familial status, or national origin.

[54 FR 3283, Jan. 23, 1989, as amended at 81 FR 63075, Sept. 14, 2016]



Sec.  100.140  General rules.

    (a) Voluntary self-testing and correction. The report or results of 
a self-test a lender voluntarily conducts or authorizes are privileged 
as provided in this subpart if the lender has taken or is taking 
appropriate corrective action to address likely violations identified by 
the self-test. Data collection required by law or any governmental 
authority (federal, state, or local) is not voluntary.
    (b) Other privileges. This subpart does not abrogate any evidentiary 
privilege otherwise provided by law.

[62 FR 66432, Dec. 18, 1997]



Sec.  100.141  Definitions.

    As used in this subpart:
    Lender means a person who engages in a residential real estate-
related lending transaction.
    Residential real estate-related lending transaction means the making 
of a loan:

[[Page 675]]

    (1) For purchasing, constructing, improving, repairing, or 
maintaining a dwelling; or
    (2) Secured by residential real estate.
    Self-test means any program, practice or study a lender voluntarily 
conducts or authorizes which is designed and used specifically to 
determine the extent or effectiveness of compliance with the Fair 
Housing Act. The self-test must create data or factual information that 
is not available and cannot be derived from loan files, application 
files, or other residential real estate-related lending transaction 
records. Self-testing includes, but is not limited to, using fictitious 
credit applicants (testers) or conducting surveys of applicants or 
customers, nor is it limited to the pre-application stage of loan 
processing.

[62 FR 66432, Dec. 18, 1997]



Sec.  100.142  Types of information.

    (a) The privilege under this subpart covers:
    (1) The report or results of the self-test;
    (2) Data or factual information created by the self-test;
    (3) Workpapers, draft documents and final documents;
    (4) Analyses, opinions, and conclusions if they directly result from 
the self-test report or results.
    (b) The privilege does not cover:
    (1) Information about whether a lender conducted a self-test, the 
methodology used or scope of the self-test, the time period covered by 
the self-test or the dates it was conducted;
    (2) Loan files and application files, or other residential real 
estate-related lending transaction records (e.g., property appraisal 
reports, loan committee meeting minutes or other documents reflecting 
the basis for a decision to approve or deny a loan application, loan 
policies or procedures, underwriting standards, compensation records) 
and information or data derived from such files and records, even if 
such data has been aggregated, summarized or reorganized to facilitate 
analysis.

[62 FR 66432, Dec. 18, 1997]



Sec.  100.143  Appropriate corrective action.

    (a) The report or results of a self-test are privileged as provided 
in this subpart if the lender has taken or is taking appropriate 
corrective action to address likely violations identified by the self-
test. Appropriate corrective action is required when a self-test shows 
it is more likely than not that a violation occurred even though no 
violation was adjudicated formally.
    (b) A lender must take action reasonably likely to remedy the cause 
and effect of the likely violation and must:
    (1) Identify the policies or practices that are the likely cause of 
the violation, such as inadequate or improper lending policies, failure 
to implement established policies, employee conduct, or other causes; 
and
    (2) Assess the extent and scope of any likely violation, by 
determining which areas of operation are likely to be affected by those 
policies and practices, such as stages of the loan application process, 
types of loans, or the particular branch where the likely violation has 
occurred. Generally, the scope of the self-test governs the scope of the 
appropriate corrective action.
    (c) Appropriate corrective action may include both prospective and 
remedial relief, except that to establish a privilege under this 
subpart:
    (1) A lender is not required to provide remedial relief to a tester 
in a self-test;
    (2) A lender is only required to provide remedial relief to an 
applicant identified by the self-test as one whose rights were more 
likely than not violated;
    (3) A lender is not required to provide remedial relief to a 
particular applicant if the statute of limitations applicable to the 
violation expired before the lender obtained the results of the self-
test or the applicant is otherwise ineligible for such relief.
    (d) Depending on the facts involved, appropriate corrective action 
may include, but is not limited to, one or more of the following:
    (1) If the self-test identifies individuals whose applications were 
inappropriately processed, offering to extend credit if the applications 
were improperly denied; compensating such persons

[[Page 676]]

for any damages, both out-of-pocket and compensatory;
    (2) Correcting any institutional policies or procedures that may 
have contributed to the likely violation, and adopting new policies as 
appropriate;
    (3) Identifying, and then training and/or disciplining the employees 
involved;
    (4) Developing outreach programs, marketing strategies, or loan 
products to serve more effectively the segments of the lender's market 
that may have been affected by the likely violation; and
    (5) Improving audit and oversight systems to avoid a recurrence of 
the likely violations.
    (e) Determination of appropriate corrective action is fact-based. 
Not every corrective measure listed in paragraph (d) of this section 
need be taken for each likely violation.
    (f) Taking appropriate corrective action is not an admission by a 
lender that a violation occurred.

[62 FR 66432, Dec. 18, 1997]



Sec.  100.144  Scope of privilege.

    The report or results of a self-test may not be obtained or used by 
an aggrieved person, complainant, department or agency in any:
    (a) Proceeding or civil action in which a violation of the Fair 
Housing Act is alleged; or
    (b) Examination or investigation relating to compliance with the 
Fair Housing Act.

[62 FR 66432, Dec. 18, 1997]



Sec.  100.145  Loss of privilege.

    (a) The self-test report or results are not privileged under this 
subpart if the lender or person with lawful access to the report or 
results:
    (1) Voluntarily discloses any part of the report or results or any 
other information privileged under this subpart to any aggrieved person, 
complainant, department, agency, or to the public; or
    (2) Discloses the report or results or any other information 
privileged under this subpart as a defense to charges a lender violated 
the Fair Housing Act; or
    (3) Fails or is unable to produce self-test records or information 
needed to determine whether the privilege applies.
    (b) Disclosures or other actions undertaken to carry out appropriate 
corrective action do not cause the lender to lose the privilege.

[62 FR 66432, Dec. 18, 1997]



Sec.  100.146  Limited use of privileged information.

    Notwithstanding Sec.  100.145, the self-test report or results may 
be obtained and used by an aggrieved person, applicant, department or 
agency solely to determine a penalty or remedy after the violation of 
the Fair Housing Act has been adjudicated or admitted. Disclosures for 
this limited purpose may be used only for the particular proceeding in 
which the adjudication or admission is made. Information disclosed under 
this section remains otherwise privileged under this subpart.

[62 FR 66433, Dec. 18, 1997]



Sec.  100.147  Adjudication.

    An aggrieved person, complainant, department or agency that 
challenges a privilege asserted under Sec.  100.144 may seek a 
determination of the existence and application of that privilege in:
    (a) A court of competent jurisdiction; or
    (b) An administrative law proceeding with appropriate jurisdiction.

[62 FR 66433, Dec. 18, 1997]



Sec.  100.148  Effective date.

    The privilege under this subpart applies to self-tests conducted 
both before and after January 30, 1998, except that a self-test 
conducted before January 30, 1998 is not privileged:
    (a) If there was a court action or administrative proceeding before 
January 30, 1998, including the filing of a complaint alleging a 
violation of the Fair Housing Act with the Department or a substantially 
equivalent state or local agency; or
    (b) If any part of the report or results were disclosed before 
January 30, 1998 to any aggrieved person, complainant, department or 
agency, or to the general public.

[62 FR 66433, Dec. 18, 1997]

[[Page 677]]



    Subpart D_Prohibition Against Discrimination Because of Handicap



Sec.  100.200  Purpose.

    The purpose of this subpart is to effectuate sections 6 (a) and (b) 
and 15 of the Fair Housing Amendments Act of 1988.



Sec.  100.201  Definitions.

    As used in this subpart:
    Accessible, when used with respect to the public and common use 
areas of a building containing covered multifamily dwellings, means that 
the public or common use areas of the building can be approached, 
entered, and used by individuals with physical disabilities. The phrase 
``readily accessible to and usable by'' is synonymous with accessible. A 
public or common use area that complies with the appropriate 
requirements of ICC/ANSI A117.1-2003 (incorporated by reference at Sec.  
100.201a), ICC/ANSI A117.1-1998 (incorporated by reference at Sec.  
100.201a), CABO/ANSI A117.1-1992 (incorporated by reference at Sec.  
100.201a), ANSI A117.1-1986 (incorporated by reference at Sec.  
100.201a), or a comparable standard is deemed ``accessible'' within the 
meaning of this paragraph.
    Accessible route means a continuous unobstructed path connecting 
accessible elements and spaces in a building or within a site that can 
be negotiated by a person with a severe disability using a wheelchair 
and that is also safe for and usable by people with other disabilities. 
Interior accessible routes may include corridors, floors, ramps, 
elevators, and lifts. Exterior accessible routes may include parking 
access aisles, curb ramps, walks, ramps, and lifts. A route that 
complies with the appropriate requirements of ICC/ANSI A117.1-2003 
(incorporated by reference at Sec.  100.201a), ICC/ANSI A117.1-1998 
(incorporated by reference at Sec.  100.201a), CABO/ANSI A117.1-1992, 
ANSI A117.1-1986 (incorporated by reference at Sec.  100.201a), or a 
comparable standard is an ``accessible route.''
    Building means a structure, facility or portion thereof that 
contains or serves one or more dwelling units.
    Building entrance on an accessible route means an accessible 
entrance to a building that is connected by an accessible route to 
public transportation stops, to accessible parking and passenger loading 
zones, or to public streets or sidewalks, if available. A building 
entrance that complies with ICC/ANSI A117.1-2003 (incorporated by 
reference at Sec.  100.201a), ICC/ANSI A117.1-1998 (incorporated by 
reference at Sec.  100.201a), CABO/ANSI A117.1-1992 (incorporated by 
reference at Sec.  100.201a), ANSI A117.1-1986 (incorporated by 
reference at Sec.  100.201a), or a comparable standard complies with the 
requirements of this paragraph.
    Common use areas means rooms, spaces or elements inside or outside 
of a building that are made available for the use of residents of a 
building or the guests thereof. These areas include hallways, lounges, 
lobbies, laundry rooms, refuse rooms, mail rooms, recreational areas and 
passageways among and between buildings.
    Controlled substance means any drug or other substance, or immediate 
precursor included in the definition in section 102 of the Controlled 
Substances Act (21 U.S.C. 802).
    Covered multifamily dwellings means buildings consisting of 4 or 
more dwelling units if such buildings have one or more elevators; and 
ground floor dwelling units in other buildings consisting of 4 or more 
dwelling units.
    Dwelling unit means a single unit of residence for a family or one 
or more persons. Examples of dwelling units include: a single family 
home; an apartment unit within an apartment building; and in other types 
of dwellings in which sleeping accommodations are provided but toileting 
or cooking facilities are shared by occupants of more than one room or 
portion of the dwelling, rooms in which people sleep. Examples of the 
latter include dormitory rooms and sleeping accommodations in shelters 
intended for occupancy as a residence for homeless persons.
    Entrance means any access point to a building or portion of a 
building used by residents for the purpose of entering.
    Exterior means all areas of the premises outside of an individual 
dwelling unit.

[[Page 678]]

    First occupancy means a building that has never before been used for 
any purpose.
    Ground floor means a floor of a building with a building entrance on 
an accessible route. A building may have more than one ground floor.
    Handicap means, with respect to a person, a physical or mental 
impairment which substantially limits one or more major life activities; 
a record of such an impairment; or being regarded as having such an 
impairment. This term does not include current, illegal use of or 
addiction to a controlled substance. For purposes of this part, an 
individual shall not be considered to have a handicap solely because 
that individual is a transvestite. As used in this definition:
    (a) Physical or mental impairment includes:
    (1) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genito-urinary; hemic and lymphatic; skin; and endocrine; or
    (2) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities. The term physical or mental impairment 
includes, but is not limited to, such diseases and conditions as 
orthopedic, visual, speech and hearing impairments, cerebral palsy, 
autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart 
disease, diabetes, Human Immunodeficiency Virus infection, mental 
retardation, emotional illness, drug addiction (other than addiction 
caused by current, illegal use of a controlled substance) and 
alcoholism.
    (b) Major life activities means functions such as caring for one's 
self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning and working.
    (c) Has a record of such an impairment means has a history of, or 
has been misclassified as having, a mental or physical impairment that 
substantially limits one or more major life activities.
    (d) Is regarded as having an impairment means:
    (1) Has a physical or mental impairment that does not substantially 
limit one or more major life activities but that is treated by another 
person as constituting such a limitation;
    (2) Has a physical or mental impairment that substantially limits 
one or more major life activities only as a result of the attitudes of 
other toward such impairment; or
    (3) Has none of the impairments defined in paragraph (a) of this 
definition but is treated by another person as having such an 
impairment.
    Interior means the spaces, parts, components or elements of an 
individual dwelling unit.
    Modification means any change to the public or common use areas of a 
building or any change to a dwelling unit.
    Premises means the interior or exterior spaces, parts, components or 
elements of a building, including individual dwelling units and the 
public and common use areas of a building.
    Public use areas means interior or exterior rooms or spaces of a 
building that are made available to the general public. Public use may 
be provided at a building that is privately or publicly owned.
    Site means a parcel of land bounded by a property line or a 
designated portion of a public right or way.

[54 FR 3283, Jan. 23, 1989, as amended at 69 FR 18803, Apr. 9, 2004; 73 
FR 63615, Oct. 24, 2008]



Sec.  100.201a  Incorporation by reference.

    (a) The following standards are incorporated by reference into 24 
CFR part 100 pursuant to 5 U.S.C. 552(a) and 1 CFR part 51, as though 
set forth in full. The incorporation by reference of these standards has 
been approved by the Director of the Federal Register. The effect of 
compliance with these standards is as stated in 24 CFR 100.205.
    (b) The addresses of organizations from which the referenced 
standards can be obtained appear below:
    (1) American National Standard: Accessible and Usable Buildings and 
Facilities, 2003 edition, (ICC/ANSI A117.1-2003), may be obtained from 
the International Code Council, 500 New Jersey Avenue, NW., 6th Floor, 
Washington,

[[Page 679]]

DC 20001-2070, telephone number 1-888-422-7233, http://www.iccsafe.org/
e/category.html.
    (2) American National Standard: Accessible and Usable Buildings and 
Facilities, 1998 edition, (ICC/ANSI A117.1-1998), may be obtained from 
the International Code Council, 500 New Jersey Avenue, NW., 6th Floor, 
Washington, DC 20001-2070, telephone number 1-888-422-7233, http://
www.iccsafe.org/e/category.html.
    (3) American National Standard: Accessible and Usable Buildings and 
Facilities, 1992 edition, (CABO/ANSI A117.1-1992), may be obtained from 
the International Code Council, 500 New Jersey Avenue, NW., 6th Floor, 
Washington, DC 20001-2070, telephone number 1-888-422-7233, http://
www.iccsafe.org/e/category.html.
    (4) American National Standard for Buildings and Facilities: 
Providing Accessibility and Usability for Physically Handicapped People, 
1986 edition, (ANSI A117.1-1986) may be obtained from Global Engineering 
Documents, 15 Inverness Way East, Englewood, CO 80112, telephone number 
1-800-854-7179, global.ihs.com.
    (c) The 1986, 1992, 1998, and 2003 editions of ANSI A117.1 may be 
inspected at the Department of Housing and Urban Development, 451 
Seventh Street, SW., Room 5240, Washington, DC 20410-0001, telephone 
number 202-708-2333.

[73 FR 63615, Oct. 24, 2008]



Sec.  100.202  General prohibitions against discrimination because of handicap.

    (a) It shall be unlawful to discriminate in the sale or rental, or 
to otherwise make unavailable or deny, a dwelling to any buyer or renter 
because of a handicap of--
    (1) That buyer or renter;
    (2) A person residing in or intending to reside in that dwelling 
after it is so sold, rented, or made available; or
    (3) Any person associated with that person.
    (b) It shall be unlawful to discriminate against any person in the 
terms, conditions, or privileges of the sale or rental of a dwelling, or 
in the provision of services or facilities in connection with such 
dwelling, because of a handicap of--
    (1) That buyer or renter;
    (2) A person residing in or intending to reside in that dwelling 
after it is so sold, rented, or made available; or
    (3) Any person associated with that person.
    (c) It shall be unlawful to make an inquiry to determine whether an 
applicant for a dwelling, a person intending to reside in that dwelling 
after it is so sold, rented or made available, or any person associated 
with that person, has a handicap or to make inquiry as to the nature or 
severity of a handicap of such a person. However, this paragraph does 
not prohibit the following inquiries, provided these inquiries are made 
of all applicants, whether or not they have handicaps:
    (1) Inquiry into an applicant's ability to meet the requirements of 
ownership or tenancy;
    (2) Inquiry to determine whether an applicant is qualified for a 
dwelling available only to persons with handicaps or to persons with a 
particular type of handicap;
    (3) Inquiry to determine whether an applicant for a dwelling is 
qualified for a priority available to persons with handicaps or to 
persons with a particular type of handicap;
    (4) Inquiring whether an applicant for a dwelling is a current 
illegal abuser or addict of a controlled substance;
    (5) Inquiring whether an applicant has been convicted of the illegal 
manufacture or distribution of a controlled substance.
    (d) Nothing in this subpart requires that a dwelling be made 
available to an individual whose tenancy would constitute a direct 
threat to the health or safety of other individuals or whose tenancy 
would result in substantial physical damage to the property of others.



Sec.  100.203  Reasonable modifications of existing premises.

    (a) It shall be unlawful for any person to refuse to permit, at the 
expense of a handicapped person, reasonable modifications of existing 
premises, occupied or to be occupied by a handicapped person, if the 
proposed modifications may be necessary to afford the handicapped person 
full enjoyment of the premises of a dwelling. In the case of a rental,

[[Page 680]]

the landlord may, where it is reasonable to do so, condition permission 
for a modification on the renter agreeing to restore the interior of the 
premises to the condition that existed before the modification, 
reasonable wear and tear excepted. The landlord may not increase for 
handicapped persons any customarily required security deposit. However, 
where it is necessary in order to ensure with reasonable certainty that 
funds will be available to pay for the restorations at the end of the 
tenancy, the landlord may negotiate as part of such a restoration 
agreement a provision requiring that the tenant pay into an interest 
bearing escrow account, over a reasonable period, a reasonable amount of 
money not to exceed the cost of the restorations. The interest in any 
such account shall accrue to the benefit of the tenant.
    (b) A landlord may condition permission for a modification on the 
renter providing a reasonable description of the proposed modifications 
as well as reasonable assurances that the work will be done in a 
workmanlike manner and that any required building permits will be 
obtained.
    (c) The application of paragraph (a) of this section may be 
illustrated by the following examples:

    Example (1): A tenant with a handicap asks his or her landlord for 
permission to install grab bars in the bathroom at his or her own 
expense. It is necessary to reinforce the walls with blocking between 
studs in order to affix the grab bars. It is unlawful for the landlord 
to refuse to permit the tenant, at the tenant's own expense, from making 
the modifications necessary to add the grab bars. However, the landlord 
may condition permission for the modification on the tenant agreeing to 
restore the bathroom to the condition that existed before the 
modification, reasonable wear and tear excepted. It would be reasonable 
for the landlord to require the tenant to remove the grab bars at the 
end of the tenancy. The landlord may also reasonably require that the 
wall to which the grab bars are to be attached be repaired and restored 
to its original condition, reasonable wear and tear excepted. However, 
it would be unreasonable for the landlord to require the tenant to 
remove the blocking, since the reinforced walls will not interfere in 
any way with the landlord's or the next tenant's use and enjoyment of 
the premises and may be needed by some future tenant.
    Example (2): An applicant for rental housing has a child who uses a 
wheelchair. The bathroom door in the dwelling unit is too narrow to 
permit the wheelchair to pass. The applicant asks the landlord for 
permission to widen the doorway at the applicant's own expense. It is 
unlawful for the landlord to refuse to permit the applicant to make the 
modification. Further, the landlord may not, in usual circumstances, 
condition permission for the modification on the applicant paying for 
the doorway to be narrowed at the end of the lease because a wider 
doorway will not interfere with the landlord's or the next tenant's use 
and enjoyment of the premises.



Sec.  100.204  Reasonable accommodations.

    (a) It shall be unlawful for any person to refuse to make reasonable 
accommodations in rules, policies, practices, or services, when such 
accommodations may be necessary to afford a handicapped person equal 
opportunity to use and enjoy a dwelling unit, including public and 
common use areas.
    (b) The application of this section may be illustrated by the 
following examples:

    Example (1): A blind applicant for rental housing wants live in a 
dwelling unit with a seeing eye dog. The building has a no pets policy. 
It is a violation of Sec.  100.204 for the owner or manager of the 
apartment complex to refuse to permit the applicant to live in the 
apartment with a seeing eye dog because, without the seeing eye dog, the 
blind person will not have an equal opportunity to use and enjoy a 
dwelling.
    Example (2): Progress Gardens is a 300 unit apartment complex with 
450 parking spaces which are available to tenants and guests of Progress 
Gardens on a first come first served basis. John applies for housing in 
Progress Gardens. John is mobility impaired and is unable to walk more 
than a short distance and therefore requests that a parking space near 
his unit be reserved for him so he will not have to walk very far to get 
to his apartment. It is a violation of Sec.  100.204 for the owner or 
manager of Progress Gardens to refuse to make this accommodation. 
Without a reserved space, John might be unable to live in Progress 
Gardens at all or, when he has to park in a space far from his unit, 
might have great difficulty getting from his car to his apartment unit. 
The accommodation therefore is necessary to afford John an equal 
opportunity to use and enjoy a dwelling. The accommodation is reasonable 
because it is feasible and practical under the circumstances.



Sec.  100.205  Design and construction requirements.

    (a) Covered multifamily dwellings for first occupancy after March 
13, 1991

[[Page 681]]

shall be designed and constructed to have at least one building entrance 
on an accessible route unless it is impractical to do so because of the 
terrain or unusual characteristics of the site. For purposes of this 
section, a covered multifamily dwelling shall be deemed to be designed 
and constructed for first occupancy on or before March 13, 1991, if the 
dwelling is occupied by that date, or if the last building permit or 
renewal thereof for the dwelling is issued by a State, County or local 
government on or before June 15, 1990. The burden of establishing 
impracticality because of terrain or unusual site characteristics is on 
the person or persons who designed or constructed the housing facility.
    (b) The application of paragraph (a) of this section may be 
illustrated by the following examples:

    Example (1): A real estate developer plans to construct six covered 
multifamily dwelling units on a site with a hilly terrain. Because of 
the terrain, it will be necessary to climb a long and steep stairway in 
order to enter the dwellings. Since there is no practical way to provide 
an accessible route to any of the dwellings, one need not be provided.
    Example (2): A real estate developer plans to construct a building 
consisting of 10 units of multifamily housing on a waterfront site that 
floods frequently. Because of this unusual characteristic of the site, 
the builder plans to construct the building on stilts. It is customary 
for housing in the geographic area where the site is located to be built 
on stilts. The housing may lawfully be constructed on the proposed site 
on stilts even though this means that there will be no practical way to 
provide an accessible route to the building entrance.
    Example (3): A real estate developer plans to construct a 
multifamily housing facility on a particular site. The developer would 
like the facility to be built on the site to contain as many units as 
possible. Because of the configuration and terrain of the site, it is 
possible to construct a building with 105 units on the site provided the 
site does not have an accessible route leading to the building entrance. 
It is also possible to construct a building on the site with an 
accessible route leading to the building entrance. However, such a 
building would have no more than 100 dwelling units. The building to be 
constructed on the site must have a building entrance on an accessible 
route because it is not impractical to provide such an entrance because 
of the terrain or unusual characteristics of the site.

    (c) All covered multifamily dwellings for first occupancy after 
March 13, 1991 with a building entrance on an accessible route shall be 
designed and constructed in such a manner that--
    (1) The public and common use areas are readily accessible to and 
usable by handicapped persons;
    (2) All the doors designed to allow passage into and within all 
premises are sufficiently wide to allow passage by handicapped persons 
in wheelchairs; and
    (3) All premises within covered multifamily dwelling units contain 
the following features of adaptable design:
    (i) An accessible route into and through the covered dwelling unit;
    (ii) Light switches, electrical outlets, thermostats, and other 
environmental controls in accessible locations;
    (iii) Reinforcements in bathroom walls to allow later installation 
of grab bars around the toilet, tub, shower, stall and shower seat, 
where such facilities are provided; and
    (iv) Usable kitchens and bathrooms such that an individual in a 
wheelchair can maneuver about the space.
    (d) The application of paragraph (c) of this section may be 
illustrated by the following examples:

    Example (1): A developer plans to construct a 100 unit condominium 
apartment building with one elevator. In accordance with paragraph (a), 
the building has at least one accessible route leading to an accessible 
entrance. All 100 units are covered multifamily dwelling units and they 
all must be designed and constructed so that they comply with the 
accessibility requirements of paragraph (c) of this section.
    Example (2): A developer plans to construct 30 garden apartments in 
a three story building. The building will not have an elevator. The 
building will have one accessible entrance which will be on the first 
floor. Since the building does not have an elevator, only the ground 
floor units are covered multifamily units. The ground floor is the first 
floor because that is the floor that has an accessible entrance. All of 
the dwelling units on the first floor must meet the accessibility 
requirements of paragraph (c) of this section and must have access to at 
least one of each type of public or common use area available for 
residents in the building.

    (e)(1) Compliance with the appropriate requirements of ICC/ANSI 
A117.1-2003 (incorporated by reference

[[Page 682]]

at Sec.  100.201a), ICC/ANSI A117.1-1998 (incorporated by reference at 
Sec.  100.201a), CABO/ANSI A117.1-1992 (incorporated by reference at 
Sec.  100.201a), or ANSI A117.1-1986 (incorporated by reference at Sec.  
100.201a) suffices to satisfy the requirements of paragraph (c)(3) of 
this section.
    (2) The following also qualify as HUD-recognized safe harbors for 
compliance with the Fair Housing Act design and construction 
requirements:
    (i) Fair Housing Accessibility Guidelines, March 6, 1991, in 
conjunction with the Supplement to Notice of Fair Housing Accessibility 
Guidelines: Questions and Answers About the Guidelines, June 28, 1994;
    (ii) Fair Housing Act Design Manual, published by HUD in 1996, 
updated in 1998;
    (iii) 2000 ICC Code Requirements for Housing Accessibility (CRHA), 
published by the International Code Council (ICC), October 2000 (with 
corrections contained in ICC-issued errata sheet), if adopted without 
modification and without waiver of any of the provisions;
    (iv) 2000 International Building Code (IBC), as amended by the 2001 
Supplement to the International Building Code (2001 IBC Supplement), if 
adopted without modification and without waiver of any of the provisions 
intended to address the Fair Housing Act's design and construction 
requirements;
    (v) 2003 International Building Code (IBC), if adopted without 
modification and without waiver of any of the provisions intended to 
address the Fair Housing Act's design and construction requirements, and 
conditioned upon the ICC publishing and distributing a statement to 
jurisdictions and past and future purchasers of the 2003 IBC stating, 
``ICC interprets Section 1104.1, and specifically, the Exception to 
Section 1104.1, to be read together with Section 1107.4, and that the 
Code requires an accessible pedestrian route from site arrival points to 
accessible building entrances, unless site impracticality applies. 
Exception 1 to Section 1107.4 is not applicable to site arrival points 
for any Type B dwelling units because site impracticality is addressed 
under Section 1107.7.''
    (vi) 2006 International Building Code; published by ICC, January 
2006, with the January 31, 2007, erratum to correct the text missing 
from Section 1107.7.5, if adopted without modification and without 
waiver of any of the provisions intended to address the Fair Housing 
Act's design and construction requirements, and interpreted in 
accordance with the relevant 2006 IBC Commentary;
    (3) Compliance with any other safe harbor recognized by HUD in the 
future and announced in the Federal Register will also suffice to 
satisfy the requirements of paragraph (c)(3) of this section.
    (f) Compliance with a duly enacted law of a State or unit of general 
local government that includes the requirements of paragraphs (a) and 
(c) of this section satisfies the requirements of paragraphs (a) and (c) 
of this section.
    (g)(1) It is the policy of HUD to encourage States and units of 
general local government to include, in their existing procedures for 
the review and approval of newly constructed covered multifamily 
dwellings, determinations as to whether the design and construction of 
such dwellings are consistent with paragraphs (a) and (c) of this 
section.
    (2) A State or unit of general local government may review and 
approve newly constructed multifamily dwellings for the purpose of 
making determinations as to whether the requirements of paragraphs (a) 
and (c) of this section are met.
    (h) Determinations of compliance or noncompliance by a State or a 
unit of general local government under paragraph (f) or (g) of this 
section are not conclusive in enforcement proceedings under the Fair 
Housing Amendments Act.
    (i) This subpart does not invalidate or limit any law of a State or 
political subdivision of a State that requires dwellings to be designed 
and constructed in a manner that affords handicapped persons greater 
access than is required by this subpart.

[54 FR 3283, Jan. 23, 1989, as amended at 56 FR 11665, Mar. 20, 1991; 73 
FR 63616, Oct. 24, 2008]

[[Page 683]]



                   Subpart E_Housing for Older Persons



Sec.  100.300  Purpose.

    The purpose of this subpart is to effectuate the exemption in the 
Fair Housing Amendments Act of 1988 that relates to housing for older 
persons.



Sec.  100.301  Exemption.

    (a) The provisions regarding familial status in this part do not 
apply to housing which satisfies the requirements of Sec. Sec.  100.302, 
100.303 or Sec.  100.304.
    (b) Nothing in this part limits the applicability of any reasonable 
local, State, or Federal restrictions regarding the maximum number of 
occupants permitted to occupy a dwelling.



Sec.  100.302  State and Federal elderly housing programs.

    The provisions regarding familial status in this part shall not 
apply to housing provided under any Federal or State program that the 
Secretary determines is specifically designed and operated to assist 
elderly persons, as defined in the State or Federal program.



Sec.  100.303  62 or over housing.

    (a) The provisions regarding familial status in this part shall not 
apply to housing intended for, and solely occupied by, persons 62 years 
of age or older. Housing satisfies the requirements of this section even 
though:
    (1) There are persons residing in such housing on September 13, 1988 
who are under 62 years of age, provided that all new occupants are 
persons 62 years of age or older;
    (2) There are unoccupied units, provided that such units are 
reserved for occupancy by persons 62 years of age or over;
    (3) There are units occupied by employees of the housing (and family 
members residing in the same unit) who are under 62 years of age 
provided they perform substantial duties directly related to the 
management or maintenance of the housing.
    (b) The following examples illustrate the application of paragraph 
(a) of this section:

    Example (1): John and Mary apply for housing at the Vista Heights 
apartment complex which is an elderly housing complex operated for 
persons 62 years of age or older. John is 62 years of age. Mary is 59 
years of age. If Vista Heights wishes to retain its ``62 or over'' 
exemption it must refuse to rent to John and Mary because Mary is under 
62 years of age. However, if Vista Heights does rent to John and Mary, 
it might qualify for the ``55 or over'' exemption in Sec.  100.304.
    Example (2): The Blueberry Hill retirement community has 100 
dwelling units. On September 13, 1988, 15 units were vacant and 35 units 
were occupied with at least one person who is under 62 years of age. The 
remaining 50 units were occupied by persons who were all 62 years of age 
or older. Blueberry Hill can qualify for the ``62 or over'' exemption as 
long as all units that were occupied after September 13, 1988 are 
occupied by persons who were 62 years of age or older. The people under 
62 in the 35 units previously described need not be required to leave 
for Blueberry Hill to qualify for the ``62 or over'' exemption.



Sec.  100.304  Housing for persons who are 55 years of age or older.

    (a) The provisions regarding familial status in this part shall not 
apply to housing intended and operated for persons 55 years of age or 
older. Housing qualifies for this exemption if:
    (1) The alleged violation occurred before December 28, 1995 and the 
housing community or facility complied with the HUD regulations in 
effect at the time of the alleged violation; or
    (2) The alleged violation occurred on or after December 28, 1995 and 
the housing community or facility complies with:
    (i) Section 807(b)(2)(C) (42 U.S.C. 3607(b)) of the Fair Housing Act 
as amended; and
    (ii) 24 CFR 100.305, 100.306, and 100.307.
    (b) For purposes of this subpart, housing facility or community 
means any dwelling or group of dwelling units governed by a common set 
of rules, regulations or restrictions. A portion or portions of a single 
building shall not constitute a housing facility or community. Examples 
of a housing facility or community include, but are not limited to:
    (1) A condominium association;
    (2) A cooperative;
    (3) A property governed by a homeowners' or resident association;
    (4) A municipally zoned area;

[[Page 684]]

    (5) A leased property under common private ownership;
    (6) A mobile home park; and
    (7) A manufactured housing community.
    (c) For purposes of this subpart, older person means a person 55 
years of age or older.

[64 FR 16329, Apr. 2, 1999]



Sec.  100.305  80 percent occupancy.

    (a) In order for a housing facility or community to qualify as 
housing for older persons under Sec.  100.304, at least 80 percent of 
its occupied units must be occupied by at least one person 55 years of 
age or older.
    (b) For purposes of this subpart, occupied unit means:
    (1) A dwelling unit that is actually occupied by one or more persons 
on the date that the exemption is claimed; or
    (2) A temporarily vacant unit, if the primary occupant has resided 
in the unit during the past year and intends to return on a periodic 
basis.
    (c) For purposes of this subpart, occupied by at least one person 55 
years of age or older means that on the date the exemption for housing 
designed for persons who are 55 years of age or older is claimed:
    (1) At least one occupant of the dwelling unit is 55 years of age or 
older; or
    (2) If the dwelling unit is temporarily vacant, at least one of the 
occupants immediately prior to the date on which the unit was 
temporarily vacated was 55 years of age or older.
    (d) Newly constructed housing for first occupancy after March 12, 
1989 need not comply with the requirements of this section until at 
least 25 percent of the units are occupied. For purposes of this 
section, newly constructed housing includes a facility or community that 
has been wholly unoccupied for at least 90 days prior to re-occupancy 
due to renovation or rehabilitation.
    (e) Housing satisfies the requirements of this section even though:
    (1) On September 13, 1988, under 80 percent of the occupied units in 
the housing facility or community were occupied by at least one person 
55 years of age or older, provided that at least 80 percent of the units 
occupied by new occupants after September 13, 1988 are occupied by at 
least one person 55 years of age or older.
    (2) There are unoccupied units, provided that at least 80 percent of 
the occupied units are occupied by at least one person 55 years of age 
or older.
    (3) There are units occupied by employees of the housing facility or 
community (and family members residing in the same unit) who are under 
55 years of age, provided the employees perform substantial duties 
related to the management or maintenance of the facility or community.
    (4) There are units occupied by persons who are necessary to provide 
a reasonable accommodation to disabled residents as required by Sec.  
100.204 and who are under the age of 55.
    (5) For a period expiring one year from the effective date of this 
final regulation, there are insufficient units occupied by at least one 
person 55 years of age or older, but the housing facility or community, 
at the time the exemption is asserted:
    (i) Has reserved all unoccupied units for occupancy by at least one 
person 55 years of age or older until at least 80 percent of the units 
are occupied by at least one person who is 55 years of age or older; and
    (ii) Meets the requirements of Sec. Sec.  100.304, 100.306, and 
100.307.
    (f) For purposes of the transition provision described in Sec.  
100.305(e)(5), a housing facility or community may not evict, refuse to 
renew leases, or otherwise penalize families with children who reside in 
the facility or community in order to achieve occupancy of at least 80 
percent of the occupied units by at least one person 55 years of age or 
older.
    (g) Where application of the 80 percent rule results in a fraction 
of a unit, that unit shall be considered to be included in the units 
that must be occupied by at least one person 55 years of age or older.
    (h) Each housing facility or community may determine the age 
restriction, if any, for units that are not occupied by at least one 
person 55 years of age or older, so long as the housing facility or 
community complies with the provisions of Sec.  100.306.

[64 FR 16329, Apr. 2, 1999]

[[Page 685]]



Sec.  100.306  Intent to operate as housing designed for persons who
are 55 years of age or older.

    (a) In order for a housing facility or community to qualify as 
housing designed for persons who are 55 years of age or older, it must 
publish and adhere to policies and procedures that demonstrate its 
intent to operate as housing for persons 55 years of age or older. The 
following factors, among others, are considered relevant in determining 
whether the housing facility or community has complied with this 
requirement:
    (1) The manner in which the housing facility or community is 
described to prospective residents;
    (2) Any advertising designed to attract prospective residents;
    (3) Lease provisions;
    (4) Written rules, regulations, covenants, deed or other 
restrictions;
    (5) The maintenance and consistent application of relevant 
procedures;
    (6) Actual practices of the housing facility or community; and
    (7) Public posting in common areas of statements describing the 
facility or community as housing for persons 55 years of age or older.
    (b) Phrases such as ``adult living'', ``adult community'', or 
similar statements in any written advertisement or prospectus are not 
consistent with the intent that the housing facility or community 
intends to operate as housing for persons 55 years of age or older.
    (c) If there is language in deed or other community or facility 
documents which is inconsistent with the intent to provide housing for 
persons who are 55 years of age or older housing, HUD shall consider 
documented evidence of a good faith attempt to remove such language in 
determining whether the housing facility or community complies with the 
requirements of this section in conjunction with other evidence of 
intent.
    (d) A housing facility or community may allow occupancy by families 
with children as long as it meets the requirements of Sec. Sec.  100.305 
and 100.306(a).

(Approved by the Office of Management and Budget under control number 
2529-0046)

[64 FR 16330, Apr. 2, 1999]



Sec.  100.307  Verification of occupancy.

    (a) In order for a housing facility or community to qualify as 
housing for persons 55 years of age or older, it must be able to 
produce, in response to a complaint filed under this title, verification 
of compliance with Sec.  100.305 through reliable surveys and 
affidavits.
    (b) A facility or community shall, within 180 days of the effective 
date of this rule, develop procedures for routinely determining the 
occupancy of each unit, including the identification of whether at least 
one occupant of each unit is 55 years of age or older. Such procedures 
may be part of a normal leasing or purchasing arrangement.
    (c) The procedures described in paragraph (b) of this section must 
provide for regular updates, through surveys or other means, of the 
initial information supplied by the occupants of the housing facility or 
community. Such updates must take place at least once every two years. A 
survey may include information regarding whether any units are occupied 
by persons described in paragraphs (e)(1), (e)(3), and (e)(4) of Sec.  
100.305.
    (d) Any of the following documents are considered reliable 
documentation of the age of the occupants of the housing facility or 
community:
    (1) Driver's license;
    (2) Birth certificate;
    (3) Passport;
    (4) Immigration card;
    (5) Military identification;
    (6) Any other state, local, national, or international official 
documents containing a birth date of comparable reliability; or
    (7) A certification in a lease, application, affidavit, or other 
document signed by any member of the household age 18 or older asserting 
that at least one person in the unit is 55 years of age or older.
    (e) A facility or community shall consider any one of the forms of 
verification identified above as adequate for verification of age, 
provided that it contains specific information about current age or date 
of birth.

[[Page 686]]

    (f) The housing facility or community must establish and maintain 
appropriate policies to require that occupants comply with the age 
verification procedures required by this section.
    (g) If the occupants of a particular dwelling unit refuse to comply 
with the age verification procedures, the housing facility or community 
may, if it has sufficient evidence, consider the unit to be occupied by 
at least one person 55 years of age or older. Such evidence may include:
    (1) Government records or documents, such as a local household 
census;
    (2) Prior forms or applications; or
    (3) A statement from an individual who has personal knowledge of the 
age of the occupants. The individual's statement must set forth the 
basis for such knowledge and be signed under the penalty of perjury.
    (h) Surveys and verification procedures which comply with the 
requirements of this section shall be admissible in administrative and 
judicial proceedings for the purpose of verifying occupancy.
    (i) A summary of occupancy surveys shall be available for inspection 
upon reasonable notice and request by any person.

(Approved by the Office of Management and Budget under control number 
2529-0046)

[64 FR 16330, Apr. 2, 1999]



Sec.  100.308  Good faith defense against civil money damages.

    (a) A person shall not be held personally liable for monetary 
damages for discriminating on the basis of familial status, if the 
person acted with the good faith belief that the housing facility or 
community qualified for a housing for older persons exemption under this 
subpart.
    (b)(1) A person claiming the good faith belief defense must have 
actual knowledge that the housing facility or community has, through an 
authorized representative, asserted in writing that it qualifies for a 
housing for older persons exemption.
    (2) Before the date on which the discrimination is claimed to have 
occurred, a community or facility, through its authorized 
representatives, must certify, in writing and under oath or affirmation, 
to the person subsequently claiming the defense that it complies with 
the requirements for such an exemption as housing for persons 55 years 
of age or older in order for such person to claim the defense.
    (3) For purposes of this section, an authorized representative of a 
housing facility or community means the individual, committee, 
management company, owner, or other entity having the responsibility for 
adherence to the requirements established by this subpart.
    (4) For purposes of this section, a person means a natural person.
    (5) A person shall not be entitled to the good faith defense if the 
person has actual knowledge that the housing facility or community does 
not, or will not, qualify as housing for persons 55 years of age or 
older. Such a person will be ineligible for the good faith defense 
regardless of whether the person received the written assurance 
described in paragraph (b) of this section.

[64 FR 16330, Apr. 2, 1999]



            Subpart F_Interference, Coercion or Intimidation



Sec.  100.400  Prohibited interference, coercion or intimidation.

    (a) This subpart provides the Department's interpretation of the 
conduct that is unlawful under section 818 of the Fair Housing Act.
    (b) It shall be unlawful to coerce, intimidate, threaten, or 
interfere with any person in the exercise or enjoyment of, or on account 
of that person having exercised or enjoyed, or on account of that person 
having aided or encouraged any other person in the exercise or enjoyment 
of, any right granted or protected by this part.
    (c) Conduct made unlawful under this section includes, but is not 
limited to, the following:
    (1) Coercing a person, either orally, in writing, or by other means, 
to deny or limit the benefits provided that person in connection with 
the sale or rental of a dwelling or in connection with a residential 
real estate-related transaction because of race, color, religion, sex, 
handicap, familial status, or national origin.

[[Page 687]]

    (2) Threatening, intimidating or interfering with persons in their 
enjoyment of a dwelling because of the race, color, religion, sex, 
handicap, familial status, or national origin of such persons, or of 
visitors or associates of such persons.
    (3) Threatening an employee or agent with dismissal or an adverse 
employment action, or taking such adverse employment action, for any 
effort to assist a person seeking access to the sale or rental of a 
dwelling or seeking access to any residential real estate-related 
transaction, because of the race, color, religion, sex, handicap, 
familial status, or national origin of that person or of any person 
associated with that person.
    (4) Intimidating or threatening any person because that person is 
engaging in activities designed to make other persons aware of, or 
encouraging such other persons to exercise, rights granted or protected 
by this part.
    (5) Retaliating against any person because that person has made a 
complaint, testified, assisted, or participated in any manner in a 
proceeding under the Fair Housing Act.
    (6) Retaliating against any person because that person reported a 
discriminatory housing practice to a housing provider or other 
authority.

[54 FR 3283, Jan. 23, 1989, as amended at 81 FR 63075, Sept. 14, 2016]



                     Subpart G_Discriminatory Effect



Sec.  100.500  Discriminatory effect prohibited.

    Liability may be established under the Fair Housing Act based on a 
practice's discriminatory effect, as defined in paragraph (a) of this 
section, even if the practice was not motivated by a discriminatory 
intent. The practice may still be lawful if supported by a legally 
sufficient justification, as defined in paragraph (b) of this section. 
The burdens of proof for establishing a violation under this subpart are 
set forth in paragraph (c) of this section.
    (a) Discriminatory effect. A practice has a discriminatory effect 
where it actually or predictably results in a disparate impact on a 
group of persons or creates, increases, reinforces, or perpetuates 
segregated housing patterns because of race, color, religion, sex, 
handicap, familial status, or national origin.
    (b) Legally sufficient justification. (1) A legally sufficient 
justification exists where the challenged practice:
    (i) Is necessary to achieve one or more substantial, legitimate, 
nondiscriminatory interests of the respondent, with respect to claims 
brought under 42 U.S.C. 3612, or defendant, with respect to claims 
brought under 42 U.S.C. 3613 or 3614; and
    (ii) Those interests could not be served by another practice that 
has a less discriminatory effect.
    (2) A legally sufficient justification must be supported by evidence 
and may not be hypothetical or speculative. The burdens of proof for 
establishing each of the two elements of a legally sufficient 
justification are set forth in paragraphs (c)(2) and (c)(3) of this 
section.
    (c) Burdens of proof in discriminatory effects cases. (1) The 
charging party, with respect to a claim brought under 42 U.S.C. 3612, or 
the plaintiff, with respect to a claim brought under 42 U.S.C. 3613 or 
3614, has the burden of proving that a challenged practice caused or 
predictably will cause a discriminatory effect.
    (2) Once the charging party or plaintiff satisfies the burden of 
proof set forth in paragraph (c)(1) of this section, the respondent or 
defendant has the burden of proving that the challenged practice is 
necessary to achieve one or more substantial, legitimate, 
nondiscriminatory interests of the respondent or defendant.
    (3) If the respondent or defendant satisfies the burden of proof set 
forth in paragraph (c)(2) of this section, the charging party or 
plaintiff may still prevail upon proving that the substantial, 
legitimate, nondiscriminatory interests supporting the challenged 
practice could be served by another practice that has a less 
discriminatory effect.
    (d) Relationship to discriminatory intent. A demonstration that a 
practice is supported by a legally sufficient justification, as defined 
in paragraph (b) of this section, may not be used as a

[[Page 688]]

defense against a claim of intentional discrimination.

[78 FR 11482, Feb. 15, 2013]



       Subpart H_ Quid Pro Quo and Hostile Environment Harassment

    Source: 81 FR 63075, Sept. 14, 2016, unless otherwise noted.



Sec.  100.600  Quid pro quo and hostile environment harassment.

    (a) General. Quid pro quo and hostile environment harassment because 
of race, color, religion, sex, familial status, national origin or 
handicap may violate sections 804, 805, 806 or 818 of the Act, depending 
on the conduct. The same conduct may violate one or more of these 
provisions.
    (1) Quid pro quo harassment. Quid pro quo harassment refers to an 
unwelcome request or demand to engage in conduct where submission to the 
request or demand, either explicitly or implicitly, is made a condition 
related to: The sale, rental or availability of a dwelling; the terms, 
conditions, or privileges of the sale or rental, or the provision of 
services or facilities in connection therewith; or the availability, 
terms, or conditions of a residential real estate-related transaction. 
An unwelcome request or demand may constitute quid pro quo harassment 
even if a person acquiesces in the unwelcome request or demand.
    (2) Hostile environment harassment. Hostile environment harassment 
refers to unwelcome conduct that is sufficiently severe or pervasive as 
to interfere with: The availability, sale, rental, or use or enjoyment 
of a dwelling; the terms, conditions, or privileges of the sale or 
rental, or the provision or enjoyment of services or facilities in 
connection therewith; or the availability, terms, or conditions of a 
residential real estate-related transaction. Hostile environment 
harassment does not require a change in the economic benefits, terms, or 
conditions of the dwelling or housing-related services or facilities, or 
of the residential real-estate transaction.
    (i) Totality of the circumstances. Whether hostile environment 
harassment exists depends upon the totality of the circumstances.
    (A) Factors to be considered to determine whether hostile 
environment harassment exists include, but are not limited to, the 
nature of the conduct, the context in which the incident(s) occurred, 
the severity, scope, frequency, duration, and location of the conduct, 
and the relationships of the persons involved.
    (B) Neither psychological nor physical harm must be demonstrated to 
prove that a hostile environment exists. Evidence of psychological or 
physical harm may, however, be relevant in determining whether a hostile 
environment existed and, if so, the amount of damages to which an 
aggrieved person may be entitled.
    (C) Whether unwelcome conduct is sufficiently severe or pervasive as 
to create a hostile environment is evaluated from the perspective of a 
reasonable person in the aggrieved person's position.
    (ii) Title VII affirmative defense. The affirmative defense to an 
employer's vicarious liability for hostile environment harassment by a 
supervisor under Title VII of the Civil Rights Act of 1964 does not 
apply to cases brought pursuant to the Fair Housing Act.
    (b) Type of conduct. Harassment can be written, verbal, or other 
conduct, and does not require physical contact.
    (c) Number of incidents. A single incident of harassment because of 
race, color, religion, sex, familial status, national origin, or 
handicap may constitute a discriminatory housing practice, where the 
incident is sufficiently severe to create a hostile environment, or 
evidences a quid pro quo.



PART 103_FAIR HOUSING_COMPLAINT PROCESSING--Table of Contents



                    Subpart A_Purpose and Definitions

Sec.
103.1 Purpose and applicability.
103.5 Other civil rights authorities.
103.9 Definitions.

                          Subpart B_Complaints

103.10 What can I do if I believe someone is discriminating against me 
          in the sale, rental, finance, or advertisement of housing?

[[Page 689]]

103.15 Can I file a claim if the discrimination has not yet occurred?
103.20 Can someone help me with filing a claim?
103.25 What information should I provide to HUD?
103.30 How should I bring a claim that I am the victim of 
          discrimination?
103.35 Is there a time limit on when I can file?
103.40 Can I change my complaint after it is filed?

      Subpart C_Referral of Complaints to State and Local Agencies

103.100 Notification and referral to substantially equivalent State or 
          local agencies.
103.105 Cessation of action on referred complaints.
103.110 Reactivation of referred complaints.
103.115 Notification upon reactivation.

                   Subpart D_Investigation Procedures

103.200 Investigations.
103.201 Service of notice on aggrieved person.
103.202 Notification of respondent; joinder of additional or substitute 
          respondents.
103.203 Answer to complaint.
103.204 HUD complaints and compliance reviews.
103.205 Systemic processing.
103.215 Conduct of investigation.
103.220 Cooperation of Federal, State and local agencies.
103.225 Completion of investigation.
103.230 Final investigative report.

                    Subpart E_Conciliation Procedures

103.300 Conciliation.
103.310 Conciliation agreement.
103.315 Relief sought for aggrieved persons.
103.320 Provisions sought for the public interest.
103.325 Termination of conciliation efforts.
103.330 Prohibitions and requirements with respect to disclosure of 
          information obtained during conciliation.
103.335 Review of compliance with conciliation agreements.

                      Subpart F_Issuance of Charge

103.400 Reasonable cause determination.
103.405 Issuance of charge.
103.410 Election of civil action or provision of administrative 
          proceeding.

                    Subpart G_Prompt Judicial Action

103.500 Prompt judicial action.

                         Subpart H_Other Action

103.510 Other action by HUD.
103.515 Action by other agencies.

    Authority: 42 U.S.C. 3535(d), 3600-3619.

    Source: 54 FR 3292, Jan. 23, 1989, unless otherwise noted.



                    Subpart A_Purpose and Definitions



Sec.  103.1  Purpose and applicability.

    (a) This part contains the procedures established by the Department 
of Housing and Urban Development for the investigation and conciliation 
of complaints under section 810 of the Fair Housing Act, 42 U.S.C. 3610.
    (b) This part applies to:
    (1) Complaints alleging discriminatory housing practices because of 
race, color, religion, sex or national origin; and
    (2) Complaints alleging discriminatory housing practices on account 
of handicap or familial status occurring on or after March 12, 1989.
    (c) Part 180 of this chapter governs the administrative proceedings 
before an administrative law judge adjudicating charges issued under 
Sec.  103.405.
    (d) The Department will reasonably accommodate persons with 
disabilities who are participants in complaint processing.

[54 FR 3292, Jan. 23, 1989, as amended at 62 FR 66433, Dec. 18, 1997]



Sec.  103.5  Other civil rights authorities.

    In addition to the Fair Housing Act, other civil rights authorities 
may be applicable in a particular case. Thus, where a person charged 
with a discriminatory housing practice in a complaint filed under 
section 810 of the Fair Housing Act is also prohibited from engaging in 
similar practices under title VI of the Civil Rights Act of 1964 (42 
U.S.C. 2000d-2000d-5), section 109 of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5309), Executive Order 11063 of 
November 20, 1962, on Equal Opportunity in Housing (27 FR 11527-11530, 
November 24, 1962), section 504 of the Rehabilitation Act of 1973 (29 
U.S.C. 794), the Age Discrimination Act (42 U.S.C. 6101) or other 
applicable law, the person may also be subject to action by HUD or other 
Federal agencies under the rules, regulations, and procedures prescribed 
under title

[[Page 690]]

VI (24 CFR parts 1 and 2), section 109 (24 CFR 570.602)), Executive 
Order 11063 (24 CFR part 107), section 504 (24 CFR part 8), or other 
applicable law.



Sec.  103.9  Definitions.

    The terms Fair Housing Act, General Counsel, and HUD are defined in 
24 CFR part 5.
    Aggrieved person includes any person who:
    (a) Claims to have been injured by a discriminatory housing 
practice; or
    (b) Believes that such person will be injured by a discriminatory 
housing practice that is about to occur.
    Assistant Secretary means the Assistant Secretary for Fair Housing 
and Equal Opportunity in HUD.
    Attorney General means the Attorney General of the United States.
    Complainant means the person (including the Assistant Secretary) who 
files a complaint under this part.
    Conciliation means the attempted resolution of issues raised by a 
complaint, or by the investigation of a complaint, through informal 
negotiations involving the aggrieved person, the respondent, and the 
Assistant Secretary.
    Conciliation agreement means a written agreement setting forth the 
resolution of the issues in conciliation.
    Discriminatory housing practice means an act that is unlawful under 
section 804, 805, 806 or 818 of the Fair Housing Act, as described in 
part 100.
    Dwelling means any building, structure, or portion thereof which is 
occupied as, or designed or intended for occupancy as, a residence by 
one or more families, or any vacant land which is offered for sale or 
lease for the construction or location thereon of any such building, 
structure, or portion thereof.
    Person includes one or more individuals, corporations, partnerships, 
associations, labor organizations, legal representatives, mutual 
companies, joint-stock companies, trusts, unincorporated organizations, 
trustees, trustee in cases under title 11 U.S.C., receivers and 
fiduciaries.
    Personal service means handing a copy of the document to the person 
to be served or leaving a copy of the document with a person of suitable 
age and discretion at the place of business, residence or usual place of 
abode of the person to be served.
    Receipt of notice means the day that personal service is completed 
by handing or delivering a copy of the document to an appropriate person 
or the date that a document is delivered by certified mail.
    Respondent means:
    (a) The person or other entity accused in a complaint of a 
discriminatory housing practice; and
    (b) Any other person or entity identified in the course of 
investigation and notified as required under Sec.  103.50.
    State means any of the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, or any of the territories and possessions 
of the United States.
    Substantially equivalent State or local agency means a State or 
local agency certified by HUD under 24 CFR part 115 (including agencies 
certified for interim referrals).
    To rent includes to lease, to sublease, to let, and otherwise to 
grant for consideration the right to occupy premises not owned by the 
occupant.

[54 FR 3292, Jan. 23, 1989, as amended at 61 FR 5205, Feb. 9, 1996]



                          Subpart B_Complaints



Sec.  103.10  What can I do if I believe someone is discriminating
against me in the sale, rental, finance, or advertisement of housing?

    You can notify HUD if you believe there has been discrimination 
against you in any activity related to housing because of race, color, 
religion, national origin, sex, disability, or the presence of children 
under the age of 18 in a household.

[64 FR 18540, Apr. 14, 1999]



Sec.  103.15  Can I file a claim if the discrimination has not yet occurred?

    Yes, you may file a claim with HUD if you have knowledge that a 
discriminatory action is about to occur.

[64 FR 18540, Apr. 14, 1999]

[[Page 691]]



Sec.  103.20  Can someone help me with filing a claim?

    HUD's Office of Fair Housing and Equal Opportunity can help you in 
filing a claim, if you contact them directly. You, or anyone who acts 
for you, may also ask any HUD office or an organization, individual, or 
attorney to help you.

[64 FR 18540, Apr. 14, 1999]



Sec.  103.25  What information should I provide to HUD?

    You should provide us with:
    (a) Your name, address, and telephone numbers where you can be 
reached;
    (b) The name and address of the persons, businesses, or 
organizations you believe discriminated against you;
    (c) If there is a specific property involved, you should provide the 
property's address and physical description, such as apartment, 
condominium, house, or vacant lot; and
    (d) A brief description of how you were discriminated against in an 
activity related to housing. You should include in this description the 
date when the discrimination happened and why you believe the 
discrimination occurred because of race, color, religion, national 
origin, sex, disability, or the presence of children under the age of 18 
in a household.

[64 FR 18540, Apr. 14, 1999]



Sec.  103.30  How should I bring a claim that I am the victim of
discrimination?

    (a) You can file a claim by mail or telephone with any of HUD's 
Offices of Fair Housing and Equal Opportunity or with any State or local 
agency that HUD has certified to receive complaints.
    (b) You can call or go to any other HUD office for help in filing a 
claim. These offices will send your claim to HUD's Office of Fair 
Housing and Equal Opportunity, which will contact you about the filing 
of your complaint.

[64 FR 18540, Apr. 14, 1999]



Sec.  103.35  Is there a time limit on when I can file?

    Yes, you must notify us within one year that you are a victim of 
discrimination. If you indicate that there is more than one act of 
discrimination, or that the discrimination is continuing, we must 
receive your information within one year of the last incident of 
discrimination.

[64 FR 18540, Apr. 14, 1999]



Sec.  103.40  Can I change my complaint after it is filed?

    (a) Yes, you may change your fair housing complaint:
    (1) At any time to add or remove people according to the law and the 
facts; or
    (2) To correct other items, such as to add additional information 
found during the investigation of the complaint.
    (b) You must approve any change to your complaint; we will consider 
the changes made as of the date of your original complaint.

[64 FR 18540, Apr. 14, 1999]



      Subpart C_Referral of Complaints to State and Local Agencies



Sec.  103.100  Notification and referral to substantially equivalent
State or local agencies.

    (a) Whenever a complaint alleges a discriminatory housing practice 
that is within the jurisdiction of a substantially equivalent State or 
local agency and the agency is certified or may accept interim referrals 
under 24 CFR part 115 with regard to the alleged discriminatory housing 
practice, the Assistant Secretary will notify the agency of the filing 
of the complaint and refer the complaint to the agency for further 
processing before HUD takes any action with respect to the complaint. 
The Assistant Secretary will notify the State or local agency of the 
referral by certified mail.
    (b) The Assistant Secretary will notify the aggrieved person and the 
respondent, by certified mail or personal service, of the notification 
and referral under paragraph (a) of this section. The notice will advise 
the aggrieved person and the respondent of the aggrieved person's right 
to commence a civil action under section 813 of the Fair Housing Act in 
an appropriate United States District Court, not later than

[[Page 692]]

two years after the occurrence or termination of the alleged 
discriminatory housing practice. The notice will state that the 
computation of this two-year period excludes any time during which a 
proceeding is pending under this part or part 180 with respect to 
complaint or charge based on the alleged discriminatory housing 
practice. The notice will also state that the time period includes the 
time during which an action arising from a breach of a conciliation 
agreement under section 814(b)(2) of the Fair Housing Act is pending.

[54 FR 3292, Jan. 23, 1989, as amended at 61 FR 52218, Oct. 4, 1996]



Sec.  103.105  Cessation of action on referred complaints.

    A referral under Sec.  103.100 does not prohibit the Assistant 
Secretary from taking appropriate action to review or investigate 
matters in the complaint that raise issues cognizable under other civil 
rights authorities applicable to departmental programs (see Sec.  
103.5).

[54 FR 3292, Jan. 23, 1989, as amended at 61 FR 14379, Apr. 1, 1996]



Sec.  103.110  Reactivation of referred complaints.

    The Assistant Secretary may reactivate a complaint referred under 
Sec.  103.100 for processing by HUD if:
    (a) The substantially equivalent State or local agency consents or 
requests the reactivation;
    (b) The Assistant Secretary determines that, with respect to the 
alleged discriminatory housing practice, the agency no longer qualifies 
for certification as a substantially equivalent State or local agency 
and may not accept interim referrals; or
    (c) The substantially equivalent State or local agency has failed to 
commence proceedings with respect to the complaint within 30 days of the 
date that it received the notification and referral of the complaint; or 
the agency commenced proceedings within this 30-day period, but the 
Assistant Secretary determines that the agency has failed to carry the 
proceedings forward with reasonable promptness.

[54 FR 3292, Jan. 23, 1989, as amended at 61 FR 14379, Apr. 1, 1996]



Sec.  103.115  Notification upon reactivation.

    (a) Whenever a complaint referred to a State or local fair housing 
agency under Sec.  103.100 is reactivated under Sec.  103.110, the 
Assistant Secretary will notify the substantially equivalent State or 
local agency, the aggrieved person and the respondent of HUD's 
reactivation. The notification will be made by certified mail or 
personal service.
    (b) The notification to the respondent and the aggrieved person 
will:
    (1) Advise the aggrieved person and the respondent of the time 
limits applicable to complaint processing and the procedural rights and 
obligations of the aggrieved person and the respondent under this part 
and part 180.
    (2) State that HUD will process the complaint under the Fair Housing 
Act and that the State or local agency to which the complaint was 
referred may continue to process the complaint under State or local law.
    (3) Advise the aggrieved person and the respondent of the aggrieved 
person's right to commence a civil action under section 813 of the Fair 
Housing Act in an appropriate United States District Court, not later 
than two years after the occurrence or termination of the alleged 
discriminatory housing practice. The notice will state that the 
computation of this two-year period excludes any time during which a 
proceeding is pending under this part or part 180 with respect to a 
complaint or charge based on the alleged discriminatory housing practice 
under part 180. The notices will also state that the time period 
includes the time during which an action arising from a breach of 
conciliation agreement under section 814(b)(2) of the Fair Housing Act 
is pending.

[54 FR 3292, Jan. 23, 1989, as amended at 61 FR 52218, Oct. 4, 1996]



                   Subpart D_Investigation Procedures



Sec.  103.200  Investigations.

    (a) Upon the filing of a complaint under Sec.  103.40, the Assistant 
Secretary will initiate an investigation. The purposes of an 
investigation are:

[[Page 693]]

    (1) To obtain information concerning the events or transactions that 
relate to the alleged discriminatory housing practice identified in the 
complaint.
    (2) To document policies or practices of the respondent involved in 
the alleged discriminatory housing practice raised in the complaint.
    (3) To develop factual data necessary for the General Counsel to 
make a determination under Sec.  103.400 whether reasonable cause exists 
to believe that a discriminatory housing practice has occurred or is 
about to occur, and for the Assistant Secretary to make a determination 
under Sec.  103.400 that no reasonable cause exists to believe that a 
discriminatory housing practice has occurred or is about to occur, and 
to take other actions provided under this part.
    (b) Upon the written direction of the Assistant Secretary, HUD may 
initate an investigation of housing practices to determine whether a 
complaint should be filed under subpart B of this part. Such 
investigations will be conducted in accordance with the procedures 
described under this subpart.

[54 FR 3292, Jan. 23, 1989, as amended at 55 FR 53293, Dec. 28, 1990, 57 
FR 39116, Aug. 28, 1992]



Sec.  103.201  Service of notice on aggrieved person.

    Upon the filing of a complaint, the Assistant Secretary will notify, 
by certified mail or personal service, each aggrieved person on whose 
behalf the complaint was filed. The notice will:
    (a) Acknowledge the filing of the complaint and state the date that 
the complaint was accepted for filing.
    (b) Include a copy of the complaint.
    (c) Advise the aggrieved person of the time limits applicable to 
complaint processing and of the procedural rights and obligations of the 
aggrieved person under this part and part 180.
    (d) Advise the aggrieved person of his or her right to commence a 
civil action under section 813 of the Fair Housing Act in an appropriate 
United States District Court, not later than two years after the 
occurrence or termination of the alleged discriminatory housing 
practice. The notice will state that the computation of this two-year 
period excludes any time during which a proceeding is pending under this 
part or part 180 with respect to a complaint or charge based on the 
alleged discriminatory housing practice. The notice will also state that 
the time period includes the time during which an action arising from a 
breach of a conciliation agreement under section 814(b)(2) of the Fair 
Housing Act is pending.
    (e) Advise the aggrieved person that retaliation against any person 
because he or she made a complaint or testified, assisted, or 
participated in an investigation or conciliation under this part or an 
administrative proceeding under part 180, is a discriminatory housing 
practice that is prohibited under section 818 of the Fair Housing Act.

[54 FR 3292, Jan. 23, 1989, as amended at 61 FR 52218, Oct. 4, 1996. 
Redesignated at 64 FR 18540, Apr. 14, 1999]



Sec.  103.202  Notification of respondent; joinder of additional or
substitute respondents.

    (a) Within ten days of the filing of a complaint under Sec.  103.40 
or the filing of an amended complaint under Sec.  103.42, the Assistant 
Secretary will serve a notice on each respondent by certified mail or by 
personal service. A person who is not named as a respondent in a 
complaint, but who is identified in the course of the investigation 
under subpart D of this part as a person who is alleged to be engaged, 
to have engaged, or to be about to engage in the discriminatory housing 
practice upon which the complaint is based may be joined as an 
additional or substitute respondent by service of a notice on the person 
under this section within ten days of the identification.
    (b) The Assistant Secretary will also serve notice on any person who 
directs or controls, or who has the right to direct or control, the 
conduct of another person who is involved in a fair housing complaint.

[54 FR 3292, Jan. 23, 1989, as amended at 61 FR 52218, Oct. 4, 1996. 
Redesignated and amended at 64 FR 18540, 18541, Apr. 14, 1999]



Sec.  103.203  Answer to complaint.

    (a) The respondent may file an answer not later than ten days after 
receipt of the notice described in Sec.  103.50.

[[Page 694]]

The respondent may assert any defense that might be available to a 
defendant in a court of law. The answer must be signed and affirmed by 
the respondent. The affirmation must state: ``I declare under penalty of 
perjury that the foregoing is true and correct.''
    (b) An answer may be reasonably and fairly amended at any time with 
the consent of the Assistant Secretary.

[54 FR 3292, Jan. 23, 1989. Redesignated at 64 FR 18540, Apr. 14, 1999]



Sec.  103.204  HUD complaints and compliance reviews.

    (a) The Assistant Secretary may conduct an investigation and file a 
complaint under this subpart based on information that one or more 
discriminatory housing practices has occurred, or is about to occur.
    (b) HUD may also initiate compliance reviews under other appropriate 
civil rights authorities, such as E.O. 11063 on Equal Opportunity in 
Housing, title VI of the Civil Rights Act of 1964, section 109 of the 
Housing and Community Development Act of 1974, section 504 of the 
Rehabilitation Act of 1973 or the Age Discrimination Act of 1975.
    (c) HUD may also make the information you provide available to other 
Federal, State, or local agencies having an interest in the matter. In 
making such information available, HUD will take steps to protect the 
confidentiality of any informant or complainant when desired by the 
informant or complainant.

[64 FR 18541, Apr. 14, 1999]



Sec.  103.205  Systemic processing.

    Where the Assistant Secretary determines that the alleged 
discriminatory practices contained in a complaint are pervasive or 
institutional in nature, or that the processing of the complaint will 
involve complex issues, novel questions of fact or law, or will affect a 
large number of persons, the Assistant Secretary may identify the 
complaint for systemic processing. This determination can be based on 
the face of the complaint or on information gathered in connection with 
an investigation. Systemic investigations may focus not only on 
documenting facts involved in the alleged discriminatory housing 
practice that is the subject of the complaint but also on review of 
other policies and procedures related to matters under investigation, to 
make sure that they also comply with the nondiscrimination requirements 
of the Fair Housing Act.



Sec.  103.215  Conduct of investigation.

    (a) In conducting investigations under this part, the Assistant 
Secretary will seek the voluntary cooperation of all persons to obtain 
access to premises, records, documents, individuals, and other possible 
sources of information; to examine, record, and copy necessary 
materials; and to take and record testimony or statements of persons 
reasonably necessary for the furtherance of the investigation.
    (b) The Assistant Secretary may conduct and order discovery in aid 
of the investigation by the same methods and to the same extent that 
discovery may be ordered in an administrative proceeding under 24 CFR 
part 180, except that the Assistant Secretary shall have the power to 
issue subpoenas described in 24 CFR 180.545 in support of the 
investigation. Subpoenas issued by the Assistant Secretary must be 
approved by the General Counsel as to their legality before issuance.

[54 FR 3292, Jan. 23, 1989, as amended at 61 FR 41482, Aug. 8, 1996; 61 
FR 52218, Oct. 4, 1996; 62 FR 66433, Dec. 18, 1997]



Sec.  103.220  Cooperation of Federal, State and local agencies.

    The Assistant Secretary, in processing Fair Housing Act complaints, 
may seek the cooperation and utilize the services of Federal, State or 
local agencies, including any agency having regulatory or supervisory 
authority over financial institutions.



Sec.  103.225  Completion of investigation.

    The investigation will remain open until a determination is made 
under Sec.  103.400, or a conciliation agreement is executed and 
approved under Sec.  103.310. Unless it is impracticable to do so, the 
Assistant Secretary will complete the investigation of the alleged 
discriminatory housing practice within 100 days of the filing of the 
complaint (or where the Assistant Secretary reactivates the complaint, 
within 100 days after service

[[Page 695]]

of the notice of reactivation under Sec.  103.115). If the Assistant 
Secretary is unable to complete the investigation within the 100-day 
period, HUD will notify the aggrieved person and the respondent, by 
mail, of the reasons for the delay.

[61 FR 14380, Apr. 1, 1996]



Sec.  103.230  Final investigative report.

    (a) At the end of each investigation under this part, the Assistant 
Secretary will prepare a final investigative report. The investigative 
report will contain:
    (1) The names and dates of contacts with witnesses, except that the 
report will not disclose the names of witnesses that request anonymity. 
HUD, however, may be required to disclose the names of such witnesses in 
the course of an administrative hearing under part 180 of this chapter 
or a civil action under title VIII of the Fair Housing Act;
    (2) A summary and the dates of correspondence and other contacts 
with the aggrieved person and the respondent;
    (3) A summary description of other pertinent records;
    (4) A summary of witness statements; and
    (5) Answers to interrogatories.
    (b) A final investigative report may be amended at any time, if 
additional evidence is discovered.
    (c) Notwithstanding the prohibitions and requirements with respect 
to disclosure of information contained in Sec.  103.330, the Assistant 
Secretary will make information derived from an investigation, including 
the final investigative report, available to the aggrieved person and 
the respondent. Following the completion of investigation, the Assistant 
Secretary shall notify the aggrieved person and the respondent that the 
final investigation report is complete and will be provided upon 
request.

[54 FR 3292, Jan. 23, 1989, as amended at 62 FR 66433, Dec. 18, 1997]



                    Subpart E_Conciliation Procedures



Sec.  103.300  Conciliation.

    (a) During the period beginning with the filing of the complaint and 
ending with the filing of a charge or the dismissal of the complaint by 
the General Counsel or the Assistant Secretary, the Assistant Secretary 
will, to the extent feasible, attempt to conciliate the complaint.
    (b) In conciliating a complaint, HUD will attempt to achieve a just 
resolution of the complaint and to obtain assurances that the respondent 
will satisfactorily remedy any violations of the rights of the aggrieved 
person, and take such action as will assure the elimination of 
discriminatory housing practices, or the prevention of their occurrence, 
in the future.
    (c) Generally, officers, employees, and agents of HUD engaged in the 
investigation of a complaint under this part will not participate or 
advise in the conciliation of the same complaint or in any factually 
related complaint. Where the rights of the aggrieved party and the 
respondent can be protected and the prohibitions with respect to the 
disclosure of information can be observed, the investigator may suspend 
fact finding and engage in efforts to resolve the complaint by 
conciliation.

[54 FR 3292, Jan. 23, 1989, as amended at 55 FR 53294, Dec. 28, 1990]



Sec.  103.310  Conciliation agreement.

    (a) The terms of a settlement of a complaint will be reduced to a 
written conciliation agreement. The conciliation agreement shall seek to 
protect the interests of the aggrieved person, other persons similarly 
situated, and the public interest. The types of relief that may be 
sought for the aggrieved person are described in Sec.  103.315. The 
provisions that may be sought for the vindication of the public interest 
are described in Sec.  103.320.
    (b)(1) The agreement must be executed by the respondent and the 
complainant. The agreement is subject to the approval of the Assistant 
Secretary, who will indicate approval by signing the agreement. The 
Assistant Secretary will approve an agreement

[[Page 696]]

and, if the Assistant Secretary is the complainant, will execute the 
agreement, only if:
    (i) The complainant and the respondent agree to the relief accorded 
the aggrieved person;
    (ii) The provisions of the agreement will adequately vindicate the 
public interest; and
    (iii) If the Assistant Secretary is the complainant, all aggrieved 
persons named in the complaint are satisfied with the relief provided to 
protect their interests.
    (2) The General Counsel may issue a charge under Sec.  103.405 if 
the aggrieved person and the respondent have executed a conciliation 
agreement that has not been approved by the Assistant Secretary.



Sec.  103.315  Relief sought for aggrieved persons.

    (a) The following types of relief may be sought for aggrieved 
persons in conciliation:
    (1) Monetary relief in the form of damages, including damages caused 
by humiliation or embarrassment, and attorney fees;
    (2) Other equitable relief including, but not limited to, access to 
the dwelling at issue, or to a comparable dwelling, the provision of 
services or facilities in connection with a dwelling, or other specific 
relief; or
    (3) Injunctive relief appropriate to the elimination of 
discriminatory housing practices affecting the aggrieved person or other 
persons.
    (b) The conciliation agreement may provide for binding arbitration 
of the dispute arising from the complaint. Arbitration may award 
appropriate relief as described in paragraph (a) of this section. The 
aggrieved person and the respondent may, in the conciliation agreement, 
limit the types of relief that may be awarded under binding arbitration.



Sec.  103.320  Provisions sought for the public interest.

    The following are types of provisions may be sought for the 
vindication of the public interest:
    (a) Elimination of discriminatory housing practices.
    (b) Prevention of future discriminatory housing practices.
    (c) Remedial affirmative activities to overcome discriminatory 
housing practices.
    (d) Reporting requirements.
    (e) Monitoring and enforcement activities.



Sec.  103.325  Termination of conciliation efforts.

    (a) HUD may terminate its efforts to conciliate the complaint if the 
respondent fails or refuses to confer with HUD; the aggrieved person or 
the respondent fail to make a good faith effort to resolve any dispute; 
or HUD finds, for any reason, that voluntary agreement is not likely to 
result.
    (b) Where the aggrieved person has commenced a civil action under an 
Act of Congress or a State law seeking relief with respect to the 
alleged discriminatory housing practice, and the trial in the action has 
commenced, HUD will terminate conciliation unless the court specifically 
requests assistance from the Assistant Secretary.



Sec.  103.330  Prohibitions and requirements with respect to disclosure
of information obtained during conciliation.

    (a) Except as provided in paragraph (b) of this section and Sec.  
103.230(c), nothing that is said or done in the course of conciliation 
under this part may be made public or used as evidence in a subsequent 
administrative hearing under part 180 or in civil actions under title 
VIII of the Fair Housing Act, without the written consent of the persons 
concerned.
    (b) Conciliation agreements shall be made public, unless the 
aggrieved person and respondent request nondisclosure and the Assistant 
Secretary determines that disclosure is not required to further the 
purposes of the Fair Housing Act. Notwithstanding a determination that 
disclosure of a conciliation agreement is not required, the Assistant 
Secretary may publish tabulated descriptions of the results of all 
conciliation efforts.

[54 FR 3292, Jan. 23, 1989, as amended at 61 FR 52218, Oct. 4, 1996]

[[Page 697]]



Sec.  103.335  Review of compliance with conciliation agreements.

    HUD may, from time to time, review compliance with the terms of any 
conciliation agreement. Whenever HUD has reasonable cause to believe 
that a respondent has breached a conciliation agreement, the Assistant 
Secretary shall refer the matter to the Attorney General with a 
recommendation for the filing of a civil action under section 814(b)(2) 
of the Fair Housing Act for the enforcement of the terms of the 
conciliation agreement.

[54 FR 3292, Jan. 23, 1989, as amended at 59 FR 39956, Aug. 5, 1994]



                      Subpart F_Issuance of Charge



Sec.  103.400  Reasonable cause determination.

    (a) If a conciliation agreement under Sec.  103.310 has not been 
executed by the complainant and the respondent and approved by the 
Assistant Secretary, the Assistant Secretary shall conduct a review of 
the factual circumstances revealed as part of HUD's investigation.
    (1) If the Assistant Secretary for Fair Housing and Equal 
Opportunity determines that, based on the totality of factual 
circumstances known at the time of the Assistant Secretary's review, no 
reasonable cause exists to believe that a discriminatory housing 
practice has occurred or is about to occur, the Assistant Secretary 
shall: Issue a short and plain written statement of the facts upon which 
the Assistant Secretary has based the no reasonable cause determination; 
dismiss the complaint; notify the aggrieved person and the respondent of 
the dismissal (including the written statement of facts) by mail; and 
make public disclosure of the dismissal. The respondent may request that 
no public disclosure be made. Notwithstanding such a request, the fact 
of dismissal, including the names of the parties, shall be public 
information available on request. The Assistant Secretary's 
determination shall be based solely upon the facts concerning the 
alleged discriminatory housing practice provided by complainant and 
respondent and otherwise disclosed during the investigation. In making 
this determination, the Assistant Secretary shall consider whether the 
facts concerning the alleged discriminatory housing practice are 
sufficient to warrant the initiation of a civil action in federal court.
    (2) If, based on the totality of the factual circumstances known at 
the time of the decision, the Assistant Secretary believes that 
reasonable cause may exist to believe that a discriminatory housing 
practice has occurred or is about to occur, the Assistant Secretary 
shall determine that reasonable cause exists to believe that a 
discriminatory housing practice has occurred or is about to occur, in 
all cases not involving the legality of local land use laws or 
ordinances (except as provided in paragraph (b) of this section). The 
Assistant Secretary's determination shall be based solely on the facts 
concerning the alleged discriminatory housing practices provided by 
complainants and respondents and otherwise identified during the 
investigation in making this determination. In making this 
determination, the Assistant Secretary shall consider whether the facts 
concerning the alleged discriminatory housing practice are sufficient to 
warrant the initiation of a civil action in federal court.
    (i) If the Assistant Secretary determines that reasonable cause 
exists, the Assistant Secretary, upon receipt of concurrence of the 
General Counsel, will issue such determination and direct the issuance 
of a charge under Sec.  103.405 on behalf of the aggrieved person, and 
shall notify the complainant and the respondent of this determination by 
certified mail or personal service.
    (ii) If the Assistant Secretary determines that no reasonable cause 
exists, the Assistant Secretary shall: Issue a short and plain written 
statement of the facts upon which the Assistant Secretary has based the 
no reasonable cause determination; dismiss the complaint; notify the 
complainant and the respondent of the dismissal (including the written 
statement of facts) by mail; and make public disclosure of the 
dismissal. The complainant or respondent may request that no public 
disclosure be made. Notwithstanding such a request, the fact of 
dismissal, including

[[Page 698]]

the names of the parties, shall be public information available on 
request.
    (3) If the Assistant Secretary determines that the matter involves 
the legality of local zoning or land use laws or ordinances, the 
Assistant Secretary, in lieu of making a determination regarding 
reasonable cause, shall refer the investigative material to the Attorney 
General for appropriate action under section 814(b)(1) of the Fair 
Housing Act, and shall notify the complainant and the respondent of this 
action by mail or personal service.
    (b) The Assistant Secretary may not issue a charge under paragraph 
(a) of this section regarding an alleged discriminatory housing 
practice, if an aggrieved person has commenced a civil action under an 
Act of Congress or a state law seeking relief with respect to the 
alleged housing practice and the trial in the action has commenced. If a 
charge may not be issued because of the commencement of such a trial, 
the Assistant Secretary shall so notify the complainant and the 
respondent by certified mail or personal service.
    (c)(1) A determination of reasonable cause or no reasonable cause by 
the Assistant Secretary shall be made within 100 days after filing of 
the complaint (or where the Assistant Secretary has reactivated a 
complaint, within 100 days after service of the notice of reactivation 
under Sec.  103.115), unless it is impracticable to do so.
    (2) If the Assistant Secretary is unable to make the determination 
within the 100-day period specified in paragraph (c)(1) of this section, 
the Assistant Secretary will notify the complainant and the respondent 
by mail of the reasons for the delay.

[55 FR 53294, Dec. 28, 1990, as amended at 57 FR 18398, Apr. 30, 1992; 
59 FR 39956, Aug. 5, 1994; 59 FR 46759, Sept. 12, 1994]



Sec.  103.405  Issuance of charge.

    (a) A charge:
    (1) Shall consist of a short and plain written statement of the 
facts upon which the Assistant Secretary has found reasonable cause to 
believe that a discriminatory housing practice has occurred or is about 
to occur;
    (2) Shall be based on the final investigative report; and
    (3) Need not be limited to facts or grounds that are alleged in the 
complaint filed under subpart B of this part. If the charge is based on 
grounds that are not alleged in the complaint, HUD will not issue a 
charge with regard to the grounds unless the record of investigation 
demonstrates that the respondent has been given notice and an 
opportunity to respond to the allegation.
    (b) Within three business days after the issuance of the charge, the 
General Counsel shall:
    (1) Obtain a time and place for hearing from the Docket Clerk for 
the Office of Administrative Law Judges;
    (2) File the charge along with the notifications described in 24 CFR 
180.410(b) with the Office of Administrative Law Judges;
    (3) Serve the charge and notifications in accordance with 24 CFR 
180.410(a); and
    (4) Notify the Assistant Secretary of the filing of the charge.

[54 FR 3292, Jan. 23, 1989, as amended at 56 FR 55078, Oct. 24, 1991; 59 
FR 39956, Aug. 5, 1994; 59 FR 46759, Sept. 12, 1994; 60 FR 58452, Nov. 
27, 1995; 62 FR 66433, Dec. 18, 1997; 74 FR 4635, Jan. 26, 2009]



Sec.  103.410  Election of civil action or provision of administrative
proceeding.

    (a) If a charge is issued under Sec.  103.405, a complainant 
(including the Assistant Secretary, if HUD filed the complaint), a 
respondent, or an aggrieved person on whose behalf the complaint is 
filed may elect, in lieu of an administrative proceeding under 24 CFR 
part 180, to have the claims asserted in the charge decided in a civil 
action under section 812(o) of the Fair Housing Act.
    (b) The election must be made not later than 20 says after the 
receipt of service of the charge, or in the case of the Assistant 
Secretary, not later than 20 days after service. The notice of election 
must be filed with the Docket Clerk in the Office of Administrative Law 
Judges and served on the General Counsel, the Assistant Secretary, the 
respondent, and the aggrieved persons on whose behalf the complaint was 
filed. The notification will be filed and

[[Page 699]]

served in accordance with the procedures established under 24 CFR part 
180.
    (c) If an election is not made under this section, the General 
Counsel will maintain an administrative proceeding based on the charge 
in accordance with the procedures under 24 CFR part 180.
    (d) If an election is made under this section, the General Counsel 
shall immediately notify and authorize the Attorney General to commence 
and maintain a civil action seeking relief under section 812(o) of the 
Fair Housing Act on behalf of the aggrieved person in an appropriate 
United States District Court. Such notification and authorization shall 
include transmission of the file in the case, including a copy of the 
final investigative report and the charge, to the Attorney General.
    (e) The General Counsel shall be available for consultation 
concerning any legal issues raised by the Attorney General as to how 
best to proceed in the event that a new court decision or newly 
discovered evidence is regarded as relevant to the reasonable cause 
determination.

[54 FR 3292, Jan. 23, 1989, as amended at 61 FR 52218, Oct. 4, 1996; 74 
FR 4635, Jan. 26, 2009]



                    Subpart G_Prompt Judicial Action



Sec.  103.500  Prompt judicial action.

    (a) If at any time following the filing of a complaint, the General 
Counsel concludes that prompt judicial action is necessary to carry out 
the purposes of this part or 24 CFR part 180, the General Counsel may 
authorize the Attorney General to commence a civil action for 
appropriate temporary or preliminary relief pending final disposition of 
the complaint. To ensure the prompt initiation of the civil action, the 
General Counsel will consult with the Assistant Attorney General for the 
Civil Rights Division before making the determination that prompt 
judicial action is necessary. The commencement of a civil action by the 
Attorney General under this section will not affect the initiation or 
continuation of proceedings under this part or administrative 
proceedings under part 180.
    (b) If the General Counsel has reason to believe that a basis exists 
for the commencement of proceedings against the respondent under section 
814(a) of the Fair Housing Act (Pattern or Practice Cases), proceedings 
under section 814(c) of the Fair Housing Act (Enforcement of Subpoenas), 
or proceedings by any governmental licensing or supervisory authorities, 
the General Counsel shall transmit the information upon which that 
belief is based to the Attorney General and to other appropriate 
authorities.

[54 FR 3292, Jan. 23, 1989, as amended at 61 FR 52218, Oct. 4, 1996]



                         Subpart H_Other Action



Sec.  103.510  Other action by HUD.

    In addition to the actions described in Sec.  103.500, HUD may 
pursue one or more of the following courses of action:
    (a) Refer the matter to the Attorney General for appropriate action 
(e.g., enforcement of criminal penalties under section 811(c) of the 
Act).
    (b) Take appropriate steps to initiate proceedings leading to the 
debarment of the respondent under 2 CFR part 2424, or initiate other 
actions leading to the imposition of administrative sanctions, where HUD 
determines that such actions are necessary to the effective operation 
and administration of federal programs or activities.
    (c) Take appropriate steps to initiate proceedings under:
    (1) 24 CFR part 1, implementing title VI of the Civil Rights Act of 
1964;
    (2) 24 CFR 570.912, implementing section 109 of the Housing and 
Community Development Act of 1974;
    (3) 24 CFR part 8, implementing section 504 of the Rehabilitation 
Act of 1973;
    (4) 24 CFR part 107, implementing Executive Order 11063; or
    (5) The Age Discrimination Act, 42 U.S.C. 6101.
    (d) Inform any other Federal, State or local agency with an interest 
in the enforcement of respondent's obligations with respect to 
nondiscrimination in housing.

[54 FR 3292, Jan. 23, 1989, as amended at 72 FR 73493, Dec. 27, 2007]

[[Page 700]]



Sec.  103.515  Action by other agencies.

    In accordance with section 808 (d) and (e) of the Fair Housing Act 
and Executive Order No. 12259, other Federal agencies, including any 
agency having regulatory or supervisory authority over financial 
institutions, are responsible for ensuring that their programs and 
activities relating to housing and urban development are administered in 
a manner affirmatively to further the goal of fair housing, and for 
cooperating with the Assistant Secretary in furthering the purposes of 
the Fair Housing Act.

                           PART 105 [RESERVED]



PART 107_NONDISCRIMINATION AND EQUAL OPPORTUNITY IN HOUSING UNDER
EXECUTIVE ORDER 11063--Table of Contents



Sec.
107.10 Purpose.
107.11 Relation to other authorities.
107.15 Definitions.
107.20 Prohibition against discriminatory practices.
107.21 Prevention of discriminatory practices.
107.25 Provisions in legal instruments.
107.30 Recordkeeping requirements.
107.35 Complaints.
107.40 Compliance meeting.
107.45 Resolution of matters.
107.50 Compliance reviews.
107.51 Findings of noncompliance.
107.55 Compliance report.
107.60 Sanctions and penalties.
107.65 Referral to the Attorney General.

    Authority: 42 U.S.C. 3535(d); E.O. 11063, 27 FR 11527, 3 CFR, 1958-
1963 Comp., p. 652; E.O. 12892, 59 FR 2939, 3 CFR, 1994 Comp., p. 849.

    Source: 45 FR 59514, Sept. 9, 1980, unless otherwise noted.



Sec.  107.10  Purpose.

    These regulations are to carry out the requirements of E.O. 11063 
that all action necessary and appropriate be taken to prevent 
discrimination because of race, color, religion (creed), sex or national 
origin in the sale, rental, leasing or other disposition of residential 
property and related facilities or in the use or occupancy thereof where 
such property or facilities are owned or operated by the Federal 
Government, or provided with Federal assistance by the Department of 
Housing and Urban Development and in the lending practices with respect 
to residential property and related facilities of lending institutions 
insofar as such practices relate to loans insured, guaranteed or 
purchased by the Department. These regulations are intended to assure 
compliance with the established policy of the United States that the 
benefits under programs and activities of the Department which provide 
financial assistance, directly or indirectly, for the provision, 
rehabilitation, or operation of housing and related facilities are made 
available without discrimination based on race, color, religion (creed), 
sex or national origin. These regulations are also intended to assure 
compliance with the policy of this Department to administer its housing 
programs affirmatively, so as to achieve a condition in which 
individuals of similar income levels in the same housing market area 
have a like range of housing choices available to them regardless of 
their race, color, religion (creed), sex or national origin.

[45 FR 59514, Sept. 9, 1980, as amended at 50 FR 31360, Aug. 2, 1985]



Sec.  107.11  Relation to other authorities.

    (a) Where allegations of discrimination on the grounds of race, 
color, or national origin are made in a program or activity of Federal 
financial assistance of the Department which does not involve a contract 
of insurance or guaranty, the provisions of title VI of the Civil Rights 
Act of 1964 and regulations implementing title VI, Nondiscrimination in 
Federally Assisted Programs, under part 1 of this title shall apply. Any 
complaint alleging discrimination on the basis of race, color, religion 
(creed), sex or national origin in a program or activity of the 
Department involving a contract of insurance or guaranty will be 
received and processed according to this part.
    (b) Where a complaint filed pursuant to this part alleges a 
discriminatory housing practice which is also covered by title VIII of 
the Civil Rights Act of 1968, the complainant shall be advised of the 
right to file a complaint pursuant to section 810 of that title and of

[[Page 701]]

the availability of Department procedures regarding fair housing 
complaints under part 105 of this title. The complainant shall also be 
advised of the right to initiate a civil action in court pursuant to 
section 812 of the Civil Rights Act of 1968 without first filing a 
complaint with HUD.

[45 FR 59514, Sept. 9, 1980, as amended at 50 FR 31360, Aug. 2, 1985]



Sec.  107.15  Definitions.

    (a) Department and Secretary are defined in 24 CFR part 5.
    (b) State means each of the fifty states, the District of Columbia, 
the Commonwealths of Puerto Rico and the Northern Marianas, and the 
territories of the United States.
    (c) Assistance includes (1) grants, loans, contributions, and 
advances of Federal funds; (2) the grant or donation of Federal property 
and interests in property; (3) the sale, lease, and rental of, and the 
permission to use (on other than a casual or transient basis), Federal 
property or any interest in such property without consideration or at a 
nominal consideration or at a consideration which is reduced for the 
purpose of assisting the recipient or in recognition of the public 
interest to be served by such sale or lease to the recipient, when such 
order granting permission accompanies the sale, lease, or rental of 
Federal properties; (4) loans in whole or in part insured, guaranteed, 
or otherwise secured by the credit of the Federal Government; and (5) 
any Federal agreement, arrangement, or other contract which has as one 
of its purposes the provision of assistance.
    (d) Person includes one or more individuals, corporations, 
partnerships, associations, labor organizations, legal representatives 
or agents, mutual companies, joint-stock companies, trusts, 
unincorporated organizations, trustees, trustees in bankruptcy, 
receivers, fiduciaries and public entities.
    (e) Public entity means a government or governmental subdivision or 
agency.
    (f) Discriminatory practice means: (1) Any discrimination on the 
basis of race, color, religion (creed), sex or national origin or the 
existence or use of a policy or practice, or any arrangement, criterion 
or other method of administration which has the effect of denying equal 
housing opportunity or which substantially impairs the ability of 
persons to apply for or receive the benefits of assistance because of 
race, color, religion (creed), sex or national origin, in the sale, 
rental or other disposition of residential property or related 
facilities (including land to be developed for residential use), or in 
the use or occupancy thereof, where such property or related facilities 
are:
    (i) Owned or operated by the Secretary;
    (ii) Provided in whole or in part with the aid of loans, advances, 
grants, or contributions agreed to be made by the Department after 
November 20, 1962;
    (iii) Provided in whole or in part by loans insured, guaranteed or 
otherwise secured by the credit of the Department after November 20, 
1962; or
    (iv) Provided by the development or the redevelopment of real 
property purchased, leased, or otherwise obtained from a State or local 
public agency or unit of general purpose local government receiving 
Federal financial assistance from the Department under a loan or grant 
contract entered into after November 20, 1962.
    (2) Any discrimination on the basis of race, color, religion 
(creed), sex or national origin or the existence or use of a policy, 
practice, or any arrangement, criterion or other method of 
administration which has the effect of denying equal housing opportunity 
or which substantially impairs the ability of persons to apply for or 
receive the benefits of assistance because of race, color, religion 
(creed), sex or national origin in lending practices with respect to 
residential property and related facilities (including land to be 
developed for residential use) of lending institutions, insofar as such 
practices relate to loans, insured or guaranteed, by the Department 
after November 20, 1962. Examples of discriminatory practices under 
subsections (1) and (2) include but are not limited to the following 
when based on race, color, religion (creed), sex or national origin:
    (i) Denial to a person of any housing accommodations, facilities, 
services, financial aid, financing or other benefit provided under a 
program or activity;

[[Page 702]]

    (ii) Providing any housing accommodations, facilities, services, 
financial aid, financing or other benefits to a person which are 
different, or are provided in a different manner, from those provided to 
others in a program or activity;
    (iii) Subjecting a person to segregation or separate treatment in 
any matter related to the receipt of housing, accommodations, 
facilities, services, financial aid, financing or other benefits under a 
program or activity;
    (iv) Restricting a person in any way in access to housing, 
accommodations, facilities, services, financial aid, financing or other 
benefits, or in the enjoyment of any advantage or privilege enjoyed by 
others in connection with such housing, accommodations, facilities, 
services, financial aid, or other benefits under a program or activity;
    (v) Treating persons differently in determining whether they satisfy 
any occupancy, admission, enrollment, eligibility, membership, or other 
requirement or condition which persons must meet in order to be provided 
any housing, accommodations, facilities, services, financial aid, 
financing or other benefits under a program or activity; and
    (vi) Denying a person opportunity to participate in a program or 
activity through the provision of services or otherwise, or affording 
the person an opportunity to do so which is different from that afforded 
others in a program or activity.
    (3) Noncompliance with relevant affirmative fair housing marketing 
requirements contained in Department programs and regulations.
    (4) A formal finding of a violation of title VIII of the Civil 
Rights Act of 1968 or a state or local fair housing law with respect to 
activities also covered by E.O. 11063.

[45 FR 59514, Sept. 9, 1980, as amended at 50 FR 31360, Aug. 2, 1985; 61 
FR 5205, Feb. 9, 1996]



Sec.  107.20  Prohibition against discriminatory practices.

    (a) No person receiving assistance from or participating in any 
program or activity of the Department involving housing and related 
facilities shall engage in a discriminatory practice.
    (b) Where such person has been found by the Department or any other 
Federal Department, agency, or court to have previously discriminated 
against persons on the ground of race, color, religion (creed), sex or 
national origin, he or she must take affirmative action to overcome the 
effects of prior discrimination.
    (c) Nothing in this part precludes such person from taking 
affirmative action to prevent discrimination in housing or related 
facilities where the purpose of such action is to overcome prior 
discriminatory practice or usage or to overcome the effects of 
conditions which resulted in limiting participation by persons of a 
particular race, color, religion (creed), sex or national origin.

[45 FR 59514, Sept. 9, 1980, as amended at 50 FR 31360, Aug. 2, 1985]



Sec.  107.21  Prevention of discriminatory practices.

    All persons receiving assistance from, or participating in any 
program or activity of the Department involving housing and related 
facilities shall take all action necessary and proper to prevent 
discrimination on the basis of race, color, religion (creed), sex or 
national origin.

[45 FR 59514, Sept. 9, 1980, as amended at 50 FR 31360, Aug. 2, 1985]



Sec.  107.25  Provisions in legal instruments.

    (a) The following documents shall contain provisions or statements 
requiring compliance with E.O. 11063 and this part:
    (1) Contracts, grants and agreements providing Departmental 
assistance for the provision of housing and related facilities,
    (2) Contracts, grants and agreements regarding the sale, rental or 
management of properties owned by the Secretary,
    (3) Corporate charters and regulatory agreements relating to 
multifamily and land development projects assisted by the Department,
    (4) Approvals of financial institutions and other lenders as 
approved FHA mortgagees,
    (5) Requests for subdivision reports under home mortgage procedures 
and

[[Page 703]]

for preapplication analysis of multifamily and land development 
projects, and
    (6) Contracts and agreements providing for Departmental insurance or 
guarantee of loans with respect to housing and related facilities.
    (b) The provision or statement required pursuant to this section 
shall indicate that the failure or refusal to comply with the 
requirements of E.O. 11063 or this part shall be a proper basis for the 
imposition of sanctions provided in Sec.  107.60.



Sec.  107.30  Recordkeeping requirements.

    (a) All persons receiving assistance through any program or activity 
of the Department involving the provision of housing and related 
activities subject to Executive Order 11063 shall maintain racial, 
religious, national origin and sex data required by the Department in 
connection with its programs and activities.
    (b) All lenders participating in Departmental mortgage insurance 
programs, home improvement loan programs, GNMA mortgage purchase 
programs, or special mortgage assistance programs, shall maintain data 
regarding the race, religion, national origin and sex of each applicant 
and joint applicant for assistance with regard to residential property 
and related facilities. Racial data shall be noted in the following 
categories: American Indian/Alaskan Native, Asian/Pacific Islander, 
Black, White, Hispanic. If an applicant or joint applicant refuses to 
voluntarily provide the information or any part of it, that fact shall 
be noted and the information shall be obtained, to the extent possible, 
through observation. Applications shall be retained for a period of at 
least twenty-five (25) months following the date the record was made.
    (c) If an investigation or compliance review under this part reveals 
a failure to comply with any of the requirements of paragraph (a) or (b) 
of this section, the respondent shall have the burden of establishing 
its compliance with this part and with the equal housing opportunity 
requirements of the Executive order.

[45 FR 59514, Sept. 9, 1980, as amended at 50 FR 52442, Dec. 24, 1985]



Sec.  107.35  Complaints.

    (a) The Assistant Secretary for FH&EO, or designee, shall conduct 
such compliance reviews, investigations, inquiries, and informal 
meetings as may be necessary to effect compliance with this part.
    (b) Complaints under this part may be filed by any person and must 
be filed within one year of date of the alleged act of discrimination 
unless the time for filing is extended by the Assistant Secretary for 
FH&EO. Complaints must be signed by the complainant and may be filed 
with the Assistant Secretary for Fair Housing and Equal Opportunity, 
Department of Housing and Urban Development, Washington, DC 20410, or 
any Regional or Area Office of the Department. All complaints shall be 
forwarded to the Director, Office of Regional Fair Housing and Equal 
Opportunity in the appropriate Regional Office which has jurisdiction in 
the area in which the property is located.
    (c) Upon receipt of a timely complaint, the Director of the Office 
of Regional FH&EO shall determine whether the complaint indicates a 
possible violation of the Executive Order or this part. The Director of 
the Office of Regional FH&EO or a designee within a reasonable period of 
time shall conduct an investigation into the facts. The complainant 
shall be notified of the determination.



Sec.  107.40  Compliance meeting.

    (a) Where preliminary analysis of a complaint, a compliance review 
initiated by the Assistant Secretary for FH&EO, or other information 
indicates a possible violation of E.O. 11063, or this part, the person 
allegedly in violation (respondent) shall be sent a Notice of Compliance 
Meeting and requested to attend a compliance meeting. The Notice shall 
advise the respondent of the matters to be addressed in the Compliance 
Meeting and the allegations contained in a complaint received pursuant 
to Sec.  107.35. The purpose of the compliance meeting is to provide the 
respondent with the opportunity to address matters raised and to remedy 
such possible violations speedily and informally, to identify possible 
remedies; and to effect a resolution as provided in Sec.  107.45.

[[Page 704]]

    (b) The Notice of Compliance Meeting shall be sent to the last known 
address of the person allegedly in violation, by certified mail, or 
through personal service. The Notice will advise such person of the 
right to respond within seven (7) days to the matters and to submit 
information and relevant data evidencing compliance with E.O. 11063, the 
Affirmative Fair Housing Marketing Regulations, 24 CFR 200.600, the Fair 
Housing Poster Regulations, 24 CFR part 110, the Advertising Guidelines 
for Fair Housing, 37 FR 6700, April 1, 1972, other affirmative marketing 
requirements applicable to the program or activity and any revisions 
thereto. Further, the person will be offered an opportunity to be 
present at the meeting in order to submit any other evidence showing 
such compliance. The date, place, and time of the scheduled meeting will 
be included in the Notice.
    (c) Whenever a compliance meeting is scheduled as a result of a 
complaint, the complainant shall be sent a copy of the Notice of 
Compliance Meeting and shall be provided an opportunity to attend the 
meeting.
    (d) The Area Office having jurisdiction over the program will 
prepare a report concerning the status of the respondent's participation 
in Department programs to be presented to the respondent at the meeting. 
The Area Manager shall be notified of the meeting and may attend the 
meeting.
    (e) At the Compliance Meeting the respondent and the complainant may 
be represented by counsel and shall have a fair opportunity to present 
any matters relevant to the complaint.
    (f) During and pursuant to the Compliance Meeting, the Director of 
the Office of Regional FH&EO shall consider all evidence relating to the 
alleged violation, including any action taken by the person allegedly in 
violation to comply with E.O. 11063.
    (g) If the evidence shows no violation of the Executive order or 
this part, the Director of the Office of Regional FH&EO shall so notify 
the person(s) involved within ten (10) days of the meeting. A copy of 
this notification shall be sent to the complainant, if any, and shall be 
submitted to the Assistant Secretary for FH&EO.
    (h) If the evidence indicates an apparent failure to comply with the 
Executive order or this part, and the matter cannot be resolved 
informally pursuant to Sec.  107.45, the Director of the Office of 
Regional FH&EO shall so notify the respondent and the complainant, if 
any, no later than ten (10) days after the date on which the compliance 
meeting is held, in writing by certified mail, return receipt requested, 
and shall advise the complainant, if any, and the respondent whether the 
Department will conduct a compliance review pursuant to Sec.  107.50 or, 
where appropriate, refer the matter to the Assistant Secretary for FH&EO 
for possible imposition of sanctions. A copy of this notification shall 
be submitted to the Assistant Secretary for FH&EO. The compliance review 
shall be conducted to determine whether the respondent has complied with 
the provisions of E.O. 11063, title VIII of the Civil Rights Act of 
1968, Department regulations and the Department's Affirmative Fair 
Housing Marketing requirements.
    (i) If the respondent fails to attend a compliance meeting scheduled 
pursuant to this section, the Director of the Office of Regional FH&EO 
shall notify the respondent no later than ten (10) days after the date 
of the scheduled meeting, in writing by certified mail, return receipt 
requested, as to whether the Department will conduct a compliance review 
or, where appropriate, refer the matter to the Assistant Secretary for 
FH&EO for possible imposition of sanctions. A copy of this notification 
shall be submitted to the Assistant Secretary for FH&EO and sent to the 
complainant, if any.



Sec.  107.45  Resolution of matters.

    (a) Attempts to resolve and remedy matters found in a complaint 
investigation or a compliance review shall be made through the methods 
of conference, conciliation, and persuasion.
    (b) Resolution of matters pursuant to this section and Sec.  107.40 
need not be attempted where similar efforts by another Federal agency 
have been unsuccessful in ending and remedying the violation found with 
respect to the same respondent.

[[Page 705]]

    (c) Efforts to remedy matters shall be directed toward achieving a 
just resolution of the probable violation and obtaining assurance(s) 
that the respondent will satisfactorily remedy any violation of E.O. 
11063 and will take actions to eliminate the discriminatory practices 
and prevent reoccurrences. Compensation to individuals from the 
respondent may also be considered.
    (d) The terms of settlements shall be reduced to a written 
agreement, signed by the respondent and the Assistant Secretary for 
FH&EO or a designee. Such settlements shall seek to protect the 
interests of the complainant, if any, other persons similarly affected, 
and the public interest. A written notice of the disposition of matters 
pursuant to this section and of the terms of settlements shall be given 
to the Area Manager by the Assistant Secretary for FH&EO or a designee 
and to the complainant, if any. When the Assistant Secretary or a 
designee determines that there has been a violation of a settlement 
agreement, the Assistant Secretary immediately may take action to impose 
sanctions provided under this part, including the referral of the matter 
to the Attorney General for appropriate action.



Sec.  107.50  Compliance reviews.

    (a) Compliance reviews shall be conducted by the Director of the 
Office of Regional FH&EO or a designee. Complaints alleging a 
violation(s) of this part or information ascertained in the absence of a 
complaint indicating apparent failure to comply with this part shall be 
referred immediately to the Director of the Office of Regional FH&EO. 
The Regional Director of the Office having jurisdiction over the 
programs involved and the Area Manager shall be notified of all alleged 
violations of the regulations. A complaint is not a prerequisite for the 
initiation of compliance review.
    (b) The purpose of a compliance review is to determine whether the 
respondent is in compliance with the Executive order and this part. 
Where allegations may also indicate a violation of the provisions of 
title VIII of the Civil Rights Act of 1968, HUD regulations issued 
thereunder and Affirmative Fair Housing Marketing requirements, a review 
may be undertaken to determine compliance with those requirements. The 
respondent shall be given at least five (5) days notice of the time set 
for any compliance review and the place or places for such review. The 
complainant shall also be notified of the compliance review.



Sec.  107.51  Findings of noncompliance.

    (a) A finding of noncompliance shall be made when the facts 
disclosed during an investigation or compliance review, or other 
information, indicate a failure to comply with the provisions of E.O. 
11063 or this part. In no event will a finding of noncompliance precede 
the completion of the compliance meeting procedures set forth in Sec.  
107.40.
    (b) Determinations of noncompliance with E.O. 11063 shall be made in 
any case in which the facts establish the existence of a discriminatory 
practice under Sec.  107.15(g)
    (c) The existence or use of a policy or practice, or any 
arrangement, criterion or other method of administration which has the 
effect of denying equal housing opportunity or which substantially 
impairs the ability of persons, because of race, color, religion 
(creed), sex or national origin, to apply for or receive the benefits of 
assistance shall be a basis for finding a discriminatory practice unless 
the respondent can establish that:
    (1) The policy or practice is designed to serve a legitimate 
business necessity or governmental purpose of the respondent;
    (2) The policy or practice effectively carries out the interest it 
is designed to serve; and
    (3) No alternative course of action could be adopted that would 
enable respondent's interest to be served with a less discriminatory 
impact.

[45 FR 59514, Sept. 9, 1980, as amended at 50 FR 31360, Aug. 2, 1985]



Sec.  107.55  Compliance report.

    (a) Following completion of efforts under this part, the Director of 
the Office of Regional FH&EO or a designee shall prepare a compliance 
report promptly and the Assistant Secretary for FH&EO shall make a 
finding of compliance or noncompliance. If it is

[[Page 706]]

found that the respondent is in compliance, all persons concerned shall 
be notified of the finding. Where a finding of noncompliance is made, 
the report shall specify the violations found. The Director of the 
Office of Regional FH&EO shall send a copy of the report to the 
respondent by certified mail, return receipt requested, together with a 
Notice that the matter will be forwarded to the Assistant Secretary for 
FH&EO for a determination as to whether actions will be initiated for 
the imposition of sanctions. The Regional Director of the Office having 
jurisdiction over the programs involved and the Area Manager shall also 
receive a copy of the report and the notice of intention to refer the 
matter to the Assistant Secretary for FH&EO.
    (b) The Notice will provide that the respondent shall have seven (7) 
days to respond to the violations found and resolve and remedy matters 
in the compliance report. At the expiration of the seven (7) day period 
the matter shall be referred to the Assistant Secretary for FH&EO.
    (c) The complainant shall be sent a copy of the findings and 
compliance report and shall have seven (7) days to comment thereon.



Sec.  107.60  Sanctions and penalties.

    (a) Failure or refusal to comply with E.O. 11063 or the requirements 
of this part shall be proper basis for applying sanctions. Violations of 
title VIII of the Civil Rights Act of 1968 or a state or local fair 
housing law, with respect to activities covered by the Executive order, 
or of the regulations and requirements under E.O. 11063 of other Federal 
Departments and agencies may also result in the imposition of sanctions 
by this Department.
    (b) Such sanctions as are specified by E.O. 11063, the contract 
through which federal assistance is provided, and such sanctions as are 
specified by the rules or regulations of the Department governing the 
program under which federal assistance to the project is provided shall 
be applied in accordance with the relevant regulations. Actions that may 
be taken include: cancellation or termination, in whole or in part, of 
the contract or agreement; refusal to approve a lender or withdrawal of 
approval; or a determination of ineligibility, suspension, or debarment 
from any further assistance or contracts; provided, however, that 
sanctions of debarment, suspension, and ineligibility are subject to the 
Department's regulations under 2 CFR part 2424, and, further, that no 
sanction under section 302 (a), (b), and (c) of Executive Order 11063 
shall be applied by the Assistant Secretary for Fair Housing and Equal 
Opportunity without the concurrence of the Secretary.
    (c) The Department shall use its good offices in order to promote 
the abandonment of discriminatory practices with regard to residential 
property and related facilities provided with assistance prior to the 
effective date of E.O. 11063 and take appropriate actions permitted by 
law including the institution of appropriate litigation to provide such 
equal housing opportunities.
    (d) In any case involving the failure of a lender to comply with the 
requirements of the Executive order or this part, the Assistant 
Secretary for FH&EO shall notify the Federal financial regulatory agency 
having jurisdiction over the lender of the findings in the case.

[45 FR 59514, Sept. 9, 1980, as amended at 72 FR 73493, Dec. 27, 2007]



Sec.  107.65  Referral to the Attorney General.

    If the results of a complaint investigation or a compliance review 
demonstrate that any person, or specified class of persons, has violated 
E.O. 11063 or this part, and efforts to resolve the matter(s) by 
informal means have failed, the Assistant Secretary for FH&EO in 
appropriate cases shall recommend that the General Counsel refer the 
case to the Attorney General of the United States for appropriate civil 
or criminal action under section 303 of E.O. 11063.



PART 108_COMPLIANCE PROCEDURES FOR AFFIRMATIVE FAIR HOUSING MARKETING
--Table of Contents



Sec.
108.1 Purpose and application.
108.5 Authority.
108.15 Pre-occupancy conference.

[[Page 707]]

108.20 Monitoring office responsibility for monitoring plans and 
          reports.
108.21 Civil rights/compliance reviewing office compliance 
          responsibility.
108.25 Compliance meeting.
108.35 Complaints.
108.40 Compliance reviews.
108.45 Compliance report.
108.50 Sanctions.

    Authority: 42 U.S.C. 3608, 3535(d); E.O. 11063, 27 FR 11527, 3 CFR, 
1958-1963 Comp., p. 652; E.O. 12892, 59 FR 2939, 3 CFR, 1994 Comp., p. 
849.

    Source: 44 FR 47013, Aug. 9, 1979, unless otherwise noted.



Sec.  108.1  Purpose and application.

    (a) The primary purpose of this regulation is to establish 
procedures for determining whether or not an applicant's actions are in 
compliance with its approved Affirmative Fair Housing Marketing (AFHM) 
plan, AFHM Regulation (24 CFR 200.600), and AFHM requirements in 
Departmental programs.
    (b) These regulations apply to all applicants for participation in 
subsidized and unsubsidized housing programs administered by the 
Department of Housing and Urban Development and to all other persons 
subject to Affirmative Fair Housing Marketing requirements in Department 
programs.
    (c) The term applicant includes:
    (1) All persons whose applications are approved for development or 
rehabilitation of: Subdivisions; multifamily projects; manufactured home 
parks of five or more lots, units or spaces; or dwelling units, when the 
applicant's participation in FHA housing programs has exceeded, or would 
thereby exceed, development of five or more such dwelling units during 
the year preceding the application, except that there shall not be 
included in a determination of the number of dwelling units developed or 
rehabilitated by an applicant, those in which a single family dwelling 
is constructed or rehabilitated for occupancy by a mortgagor on property 
owned by the mortgagor and in which the applicant had no interest prior 
to entering into the contract for construction or rehabilitation. For 
the purposes of this definition, a person remains an applicant from the 
date of submission of an application through duration of receipt of 
assistance pursuant to such application.
    (2) All other persons subject to AFHM requirements in Departmental 
programs.
    (d) The term person includes one or more individuals, corporations, 
partnerships, associations, labor organizations, legal representatives 
or agents, mutual companies, joint-stock companies, trusts, 
unincorporated organizations, trustees, trustees in bankruptcy, 
receivers, fiduciaries and public entities.
    (e) The term monitoring office includes any office within HUD 
designated by HUD to act as a monitoring office. As necessary, HUD will 
designate specific offices within HUD to act as monitoring offices 
through a notice published in the Federal Register.
    (f) The term civil rights/compliance reviewing office includes any 
office within HUD designated by HUD to act as a civil rights/compliance 
reviewing office. As necessary, HUD will designate specific offices 
within HUD to act as civil rights/compliance reviewing offices through a 
notice published in the Federal Register.

[44 FR 47013, Aug. 9, 1979, as amended at 50 FR 9268, Mar. 7, 1985; 64 
FR 44095, Aug. 12, 1999]



Sec.  108.5  Authority.

    The regulations in this part are issued pursuant to the authority to 
issue regulations granted to the Secretary by section 7(d) of the 
Department of Housing and Urban Development Act of 1965, 42 U.S.C. 
3535(d). They implement the functions, powers, and duties imposed on the 
Secretary by Executive Order 11063, 27 FR 11527 and title VIII of the 
Civil Rights Act of 1968, 42 U.S.C. 3608.



Sec.  108.15  Pre-occupancy conference.

    Applicants shall submit a Notification of Intent to Begin Marketing 
to the monitoring office no later than 90 days prior to engaging in 
sales or rental marketing activities. Upon receipt of the Notification 
of Intent to Begin Marketing from the applicant, the monitoring office 
shall review any previously approved plan and may schedule a pre-
occupancy conference. Such pre-occupancy conference shall be held prior 
to initiation of sales or rental

[[Page 708]]

marketing activities. At this conference, the previously approved AFHM 
plan shall be reviewed with the applicant to determine if the plan, and/
or its proposed implementation, requires modification previous to 
initiation of marketing in order to achieve the objectives of the AFHM 
regulation and the plan.

(Approved by the Office of Management and Budget under control number 
2535-0027)

[44 FR 47013, Aug. 9, 1979, as amended at 48 FR 20903, May 10, 1983; 64 
FR 44095, Aug. 12, 1999]



Sec.  108.20  Monitoring office responsibility for monitoring plans
and reports.

    (a) Submission of documentation. Pursuant to initiation of 
marketing, the applicant shall submit to the monitoring office reports 
documenting the implementation of the AFHM plan, including sales or 
rental reports, as required by the Department. Copies of such 
documentation shall be forwarded to the civil rights/compliance 
reviewing office by the monitoring office as requested.
    (b) Monitoring of AFHM plan. The monitoring office is responsible 
for monitoring AFHM plans and providing technical assistance to the 
applicant in preparation or modification of such plans during the period 
of development and initial implementation.
    (c) Review of applicant's reports. Each sales or rental report shall 
be reviewed by the monitoring office as it is received. When sales or 
rental reports show that 20% of the units covered by the AFHM plan have 
been sold or rented, or whenever it appears that the plan may not 
accomplish its intended objective, the monitoring office shall notify 
the civil rights/compliance reviewing office.
    (d) Failure of applicant to file documentation. If the applicant 
fails to file required documentation, the applicant shall be sent a 
written notice indicating that if the delinquent documentation is not 
submitted to the monitoring office within 10 days from date of receipt 
of the notice, the matter will be referred to the civil rights/
compliance reviewing office by the monitoring office for action which 
may lead to the imposition of sanctions.

[64 FR 44096, Aug. 12, 1999]



Sec.  108.21  Civil rights/compliance reviewing office compliance
responsibility.

    The civil rights/compliance reviewing office shall be responsible 
for determining whether an applicant's actions are in apparent 
compliance with its approved AFHM plan, the AFHM regulations, and this 
part and for determining changes or modifications necessary in the plan 
after initiation of marketing.

[64 FR 44096, Aug. 12, 1999]



Sec.  108.25  Compliance meeting.

    (a) Scheduling meeting. If an applicant fails to comply with 
requirements under Sec.  108.15 or Sec.  108.20 or it appears that the 
goals of the AFHM plan may not be achieved, or that the implementation 
of the Plan should be modified, the civil rights/compliance reviewing 
office shall schedule a meeting with the applicant. The meeting shall be 
held at least ten days before the next sales or rental report is due. 
The purpose of the compliance meeting is to review the applicant's 
compliance with AFHM requirements and the implementation of the AFHM 
Plan and to indicate any changes or modifications which may be required 
in the Plan.
    (b) Notice of Compliance Meeting. A Notice of Compliance Meeting 
shall be sent to the last known address of the applicant, by certified 
mail or through personal service. The Notice will advise the applicant 
of the right to respond within seven (7) days to the matters identified 
as subjects of the meeting and to submit information and relevant data 
evidencing compliance with the AFHM regulations, the AFHM Plan, 
Executive Order 11063 and title VIII of the Civil Rights Act of 1968, 
when appropriate. If the applicant is a small entity, as defined by the 
regulations of the Small Business Administration, the Notice shall 
include notification that the entity may submit comment on HUD's actions 
to the Small Business and Agriculture Regulatory Enforcement Ombudsman, 
and

[[Page 709]]

shall include the appropriate contact information.
    (c) Applicant data required. The applicant will be requested in 
writing to provide, prior to or at the compliance meeting, specific 
documents, records, and other information relevant to compliance, 
including but not limited to:
    (1) Copies or scripts of all advertising in the Standard 
Metropolitan Statistical Area (SMSA) or housing market area, as 
appropriate, including newspaper, radio and television advertising, and 
a photograph of any sale or rental sign at the site of construction;
    (2) Copies of brochures and other printed material used in 
connection with sales or rentals;
    (3) Evidence of outreach to community organizations;
    (4) Any other evidence of affirmative outreach to groups which are 
not likely to apply for the subject housing;
    (5) Evidence of instructions to employees with respect to company 
policy of nondiscrimination in housing;
    (6) Description of training conducted with sales/rental staff;
    (7) Evidence of nondiscriminatory hiring and recruiting policies for 
staff engaged in the sale or rental of properties, and data by race and 
sex of the composition of the staff;
    (8) Copies of applications and waiting lists of prospective buyers 
or renters maintained by applicant;
    (9) Copies of Sign-in Lists maintained on site for prospective 
buyers and renters who are shown the facility;
    (10) Copies of the selection and screening criteria;
    (11) Copies of relevant lease or sales agreements;
    (12) Any other information which documents efforts to comply with an 
approved plan.
    (d) Preparation for the compliance meeting. The monitoring office 
will provide information concerning the status of the project or housing 
involved to be presented to the applicant at the meeting. The monitoring 
office shall be notified of the meeting and may send representatives to 
the meeting.
    (e) Resolution of matters. Where matters raised in the compliance 
meetings are resolved through revision to the plan or its 
implementation, the terms of the resolution shall be reduced to writing 
and submitted to the civil rights/compliance reviewing office within 10 
days of the date of the compliance meeting.
    (f) Determination of compliance. If the evidence shows no violation 
of the AFHM regulations and that the applicant is complying with its 
approved AFHM plan and this part, the civil rights/compliance reviewing 
office shall so notify the applicant within 10 days of the meeting.
    (g) Determination of possible noncompliance. If the evidence 
indicates an apparent failure to comply with the AFHM plan or the AFHM 
regulation, or if the matters raised cannot be resolved, the civil 
rights/compliance reviewing office shall so notify the applicant no 
later than ten (10) days after the date the compliance meeting is held, 
in writing by certified mail, return receipt requested, and shall advise 
the applicant that the Department will conduct a comprehensive 
compliance review or refer the matter to the Assistant Secretary for 
Fair Housing and Equal Opportunity for consideration of action including 
the imposition of sanctions. The purpose of a compliance review is to 
determine whether the applicant has complied with the provisions of 
Executive Order 11063, title VIII of the Civil Rights Act of 1968, and 
the AFHM regulations in conjunction with the applicant's specific AFHM 
plan previously approved by HUD.
    (h) Failure of applicant to attend the meeting. If the applicant 
fails to attend the meeting scheduled pursuant to this section, the 
civil rights/compliance reviewing office shall so notify the applicant 
no later than ten (10) days after the date of the scheduled meeting, in 
writing by certified mail, return receipt requested, and shall advise 
the applicant as to whether the civil rights/compliance reviewing office 
will conduct a comprehensive compliance review or refer the matter to 
the Assistant Secretary for Fair Housing and Equal Opportunity for 
consideration of action including the imposition of sanctions.

[44 FR 47013, Aug. 9, 1979, as amended at 64 FR 44096, Aug. 12, 1999]

[[Page 710]]



Sec.  108.35  Complaints.

    Individuals and private and public entities may file complaints 
alleging violations of the AFHM regulations or an approved AFHM plan 
with any monitoring office, civil rights/compliance reviewing office, or 
with the Assistant Secretary for FH&EO. Complaints will be referred to 
the civil rights/compliance reviewing office. Where there is an 
allegation of a violation of title VIII the complaint also will be 
processed under part 105.

[44 FR 47013, Aug. 9, 1979, as amended at 64 FR 44096, Aug. 12, 1999]



Sec.  108.40  Compliance reviews.

    (a) General. All compliance reviews shall be conducted by the civil 
rights/compliance reviewing office. Complaints alleging a violation(s) 
of the AFHM regulations, or information ascertained in the absence of a 
complaint indicating an applicant's failure to comply with an AFHM plan, 
shall be referred immediately to the civil rights/compliance reviewing 
office. The monitoring office shall be notified as appropriate of all 
alleged violations of the AFHM regulations or alleged failure to comply 
with an AFHM plan.
    (b) Initiation of compliance reviews. Even in the absence of a 
complaint or other information indicating noncompliance pursuant to 
paragraph (a), the civil rights/compliance reviewing office may conduct 
periodic compliance reviews throughout the life of the mortgage in the 
case of multi-family projects and throughout the duration of the Housing 
Assistance Payments Contract with the Department in the case of housing 
assisted under section 8 of the United States Housing Act of 1937, as 
amended, 42 U.S.C. 1437.
    (c) Nature of compliance reviews. The purpose of a compliance review 
is to determine whether the applicant is in compliance with the 
Department's AFHM requirements and the applicant's approved AFHM plan. 
Where allegations under this part may also constitute a violation of the 
provisions of Executive Order 11063 or title VIII, the review will also 
determine compliance with the requirements thereof. The applicant shall 
be given at least five (5) days notice of the time set for any 
compliance review and the place or places for such review. The 
compliance review will cover the following areas:
    (1) Applicant's sales and rental practices, including practices in 
soliciting buyers and tenants, determining eligibility, selecting and 
rejecting buyers and renters, and in concluding sales and rental 
transactions.
    (2) Programs to attract minority and majority buyers and renters 
regardless of sex, including:
    (i) Use of advertising media, brochures, and pamphlets;
    (ii) Conformance with both the Department's Fair Housing Poster 
Regulation (24 CFR part 110) and the Advertising Guidelines for Fair 
Housing (37 FR 6700) and any revisions thereto.
    (3) Data relating to:
    (i) The size and location of units;
    (ii) Services provided;
    (iii) Sales and/or rental price ranges;
    (iv) The race and sex of buyers and/or renters;
    (v) Race and sex of staff engaged in sale or rental of dwellings.
    (4) Other matters relating to the marketing or sales of dwellings 
under HUD affirmative marketing requirements, the AFMH Plan and this 
part.

[44 FR 47013, Aug. 9, 1979, as amended at 64 FR 44096, Aug. 12, 1999]



Sec.  108.45  Compliance report.

    Following a compliance review, a report shall be prepared promptly 
and the Assistant Secretary for FH&EO shall make a finding of compliance 
or noncompliance. If it is found that the applicant is in compliance, 
all parties concerned shall be notified of the findings. Whenever a 
finding of noncompliance is made pursuant to this part, the report shall 
list specifically the violations found. The applicant shall be sent a 
copy of the report by certified mail, return receipt requested, together 
with a notice that, if the matter cannot be resolved within ten days of 
receipt of the Notice, the matter will be referred to the Assistant 
Secretary for FH&EO to make a determination as to whether actions will 
be initiated for the imposition of sanctions.

[44 FR 47013, Aug. 9, 1979, as amended at 64 FR 44097, Aug. 12, 1999]

[[Page 711]]



Sec.  108.50  Sanctions.

    Applicants failing to comply with the requirements of these 
regulations, the AFHM regulations, or an AFHM plan will make themselves 
liable to sanctions authorized by law, regulations, agreements, rules, 
or policies governing the program pursuant to which the application was 
made, including, but not limited to, denial of further participation in 
Departmental programs and referral to the Department of Justice for suit 
by the United States for injunctive or other appropriate relief.



PART 110_FAIR HOUSING POSTER--Table of Contents



                    Subpart A_Purpose and Definitions

Sec.
110.1 Purpose.
110.5 Definitions.

              Subpart B_Requirements for Display of Posters

110.10 Persons subject.
110.15 Location of posters.
110.20 Availability of posters.
110.25 Description of posters.

                          Subpart C_Enforcement

110.30 Effect of failure to display poster.

    Authority: 42 U.S.C. 3535(d), 3600-3620.

    Source: 37 FR 3429, Feb. 16, 1972, unless otherwise noted.



                    Subpart A_Purpose and Definitions



Sec.  110.1  Purpose.

    The regulations set forth in this part contain the procedures 
established by the Secretary of Housing and Urban Development with 
respect to the display of a fair housing poster by persons subject to 
sections 804 through 806 of the Fair Housing Act, 42 U.S.C. 3604-3606.

[54 FR 3310, Jan. 23, 1989]



Sec.  110.5  Definitions.

    (a) The terms Department and Secretary are defined in 24 CFR part 5.
    (b) Discriminatory housing practice means an act that is unlawful 
under section 804, 805, 806, or 818 of the Act.
    (c) Dwelling means any building, structure, or portion thereof which 
is occupied as, or designed or intended for occupancy as, a residence by 
one or more families, and any vacant land which is offered for sale or 
lease for the construction or location thereon of any such building, 
structure, or portion thereof.
    (d) Family includes a single individual.
    (e) Person includes one or more individuals, corporations, 
partnerships, associations, labor organizations, legal representatives, 
mutual companies, joint-stock companies, trusts, unincorporated 
organizations, trustees, trustees in cases under title 11 U.S.C., 
receivers and fiduciaries.
    (f) Fair housing poster means the poster prescribed by the Secretary 
for display by persons subject to sections 804-806 of the Act.
    (g) The Act means the Fair Housing Act (The Civil Rights Act of 
1968, as amended by the Fair Housing Amendments Act of 1988), 42 U.S.C. 
3600, et seq.
    (h) Person in the business of selling or renting dwellings means a 
person as defined in section 803(c) of the Act.

[37 FR 3429, Feb. 16, 1972, as amended at 54 FR 3311, Jan. 23, 1989; 61 
FR 5205, Feb. 9, 1996]



              Subpart B_Requirements for Display of Posters



Sec.  110.10  Persons subject.

    (a) Except to the extent that paragraph (b) of this section applies, 
all persons subject to section 804 of the Act, Discrimination in the 
Sale or Rental of Housing and Other Prohibited Practices, shall post and 
maintain a fair housing poster as follows:
    (1) With respect to a single-family dwelling (not being offered for 
sale or rental in conjunction with the sale or rental of other 
dwellings) offered for sale or rental through a real estate broker, 
agent, salesman, or person in the business of selling or renting 
dwellings, such person shall post and maintain a fair housing poster at 
any place of business where the dwelling is offered for sale or rental.
    (2) With respect to all other dwellings covered by the Act:

[[Page 712]]

    (i) A fair housing poster shall be posted and maintained at any 
place of business where the dwelling is offered for sale or rental, and
    (ii) A fair housing poster shall be posted and maintained at the 
dwelling, except that with respect to a single-family dwelling being 
offered for sale or rental in conjunction with the sale or rental of 
other dwellings, the fair housing poster may be posted and maintained at 
the model dwellings instead of at each of the individual dwellings.
    (3) With respect to those dwellings to which paragraph (a)(2) of 
this section applies, the fair housing poster must be posted at the 
beginning of construction and maintained throughout the period of 
construction and sale or rental.
    (b) This part shall not require posting and maintaining a fair 
housing poster:
    (1) On vacant land, or
    (2) At any single-family dwelling, unless such dwelling
    (i) Is being offered for sale or rental in conjunction with the sale 
or rental of other dwellings in which circumstances a fair housing 
poster shall be posted and maintained as specified in paragraph 
(a)(2)(ii) of this section, or
    (ii) Is being offered for sale or rental through a real estate 
broker, agent, salesman, or person in the business of selling or renting 
dwellings in which circumstances a fair housing poster shall be posted 
and maintained as specified in paragraph (a)(1) of this section,
    (c) All persons subject to section 805 of the Act, Discrimination In 
Residential Real Estate-Related Transactions shall post and maintain a 
fair housing poster at all their places of business which participate in 
the covered activities.
    (d) All persons subject to section 806 of the Act, Discrimination in 
the Provision of Brokerage Services, shall post and maintain a fair 
housing poster at all their places of business.

[37 FR 3429, Feb. 16, 1972, as amended at 54 FR 3311, Jan. 23, 1989]



Sec.  110.15  Location of posters.

    All fair housing posters shall be prominently displayed so as to be 
readily apparent to all persons seeking housing accommodations or 
seeking to engage in residential real estate-related transactions or 
brokerage services as contemplated by sections 804 through 806 of the 
Act.

[54 FR 3311, Jan. 23, 1989]



Sec.  110.20  Availability of posters.

    All persons subject to this part may obtain fair housing posters 
from the Department's regional and area offices. A facsimile may be used 
if the poster and the lettering are equivalent in size and legibility to 
the poster available from the Department.

[37 FR 3429, Feb. 16, 1972]



Sec.  110.25  Description of posters.

    (a) The fair housing poster shall be 11 inches by 14 inches and 
shall bear the following legend:
[GRAPHIC] [TIFF OMITTED] TC12OC91.008


[[Page 713]]



                        EQUAL HOUSING OPPORTUNITY

         We do Business in Accordance With the Fair Housing Act

(The Civil Rights Act of 1968, as amended by the Fair Housing Amendments 
Act of 1988)

                  IT IS ILLEGAL TO DISCRIMINATE AGAINST

  ANY PERSON BECAUSE OF RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL 
        STATUS (HAVING ONE OR MORE CHILDREN), OR NATIONAL ORIGIN

     In the sale or rental of housing or residential lots.
     In advertising the sale or rental of housing.
     In the financing of housing.
     In the appraisal of housing.
     In the provision of real estate brokerage services.
     Blockbusting is also illegal.
    Anyone who feels he or she has been discriminated against should 
send a complaint to:

U.S. Department of Housing and Urban Development, Assistant Secretary 
for Fair Housing and Equal Opportunity, Washington, DC 20410

 or

HUD Region or [Area Office stamp]

    (b) The Assistant Secretary for Equal Opportunity may grant a waiver 
permitting the substitution of a poster prescribed by a Federal 
financial regulatory agency for the fair housing poster described in 
paragraph (a) of this section. While such waiver remains in effect, 
compliance with the posting requirements of such regulatory agency shall 
be deemed compliance with the posting requirements of this part. Such 
waiver shall not affect the applicability of all other provisions of 
this part.

[37 FR 3429, Feb. 16, 1972, as amended at 40 FR 20079, May 8, 1975; 54 
FR 3311, Jan. 23, 1989]



                          Subpart C_Enforcement



Sec.  110.30  Effect of failure to display poster.

    Any person who claims to have been injured by a discriminatory 
housing practice may file a complaint with the Secretary pursuant to 
part 105 of this chapter. A failure to display the fair housing poster 
as required by this part shall be deemed prima facie evidence of a 
discriminatory housing practice.

[37 FR 3429, Feb. 16, 1972]



PART 115_CERTIFICATION AND FUNDING OF STATE AND LOCAL FAIR HOUSING
ENFORCEMENT AGENCIES--Table of Contents



                            Subpart A_General

Sec.
115.100 Definitions.
115.101 Program administration.
115.102 Public notices.

      Subpart B_Certification of Substantially Equivalent Agencies

115.200 Purpose.
115.201 The two phases of substantial equivalency certification.
115.202 Request for interim certification.
115.203 Interim certification procedures.
115.204 Criteria for adequacy of law.
115.205 Certification procedures.
115.206 Performance assessments; Performance standards.
115.207 Consequences of interim certification and certification.
115.208 Procedures for renewal of certification.
115.209 Technical assistance.
115.210 Performance deficiency procedures; Suspension; Withdrawal.
115.211 Changes limiting effectiveness of agency's law; Corrective 
          actions; Suspension; Withdrawal; Consequences of repeal; 
          Changes not limiting effectiveness.
115.212 Request after withdrawal.

                Subpart C_Fair Housing Assistance Program

115.300 Purpose.
115.301 Agency eligibility criteria; Funding availability.
115.302 Capacity building funds.
115.303 Eligible activities for capacity building funds.
115.304 Agencies eligible for contributions funds.
115.305 Special enforcement effort (SEE) funds.
115.306 Training funds.
115.307 Requirements for participation in the FHAP; Corrective and 
          remedial action for failing to comply with requirements.
115.308 Reporting and recordkeeping requirements.
115.309 Subcontracting under the FHAP.
115.310 FHAP and the First Amendment.
115.311 Testing.


[[Page 714]]


    Authority: 42 U.S.C. 3601-19; 42 U.S.C. 3535(d).

    Source: 72 FR 19074, Apr. 16, 2007, unless otherwise noted.



                            Subpart A_General



Sec.  115.100  Definitions.

    (a) The terms ``Fair Housing Act,'' ``HUD,'' and ``the Department,'' 
as used in this part, are defined in 24 CFR 5.100.
    (b) The terms ``aggrieved person,'' ``complainant,'' 
``conciliation,'' ``conciliation agreement,'' ``discriminatory housing 
practice,'' ``dwelling,'' ``handicap,'' ``person,'' ``respondent,'' 
``secretary,'' and ``state,'' as used in this part, are defined in 
Section 802 of the Fair Housing Act (42 U.S.C. 3602).
    (c) Other definitions. The following definitions also apply to this 
part:
    Act means the Fair Housing Act, as defined in 24 CFR 5.100.
    Assistant Secretary means the Assistant Secretary for Fair Housing 
and Equal Opportunity.
    Certified agency is an agency that has been granted certification by 
the Assistant Secretary in accordance with the requirements of this 
part.
    Cooperative agreement is the instrument HUD will use to provide 
funds. The Cooperative Agreement includes attachments and/or appendices 
establishing requirements relating to the operation and performance of 
the agency.
    Cooperative agreement officer (CAO) is the administrator of the 
funds awarded pursuant to this part and is a regional director of the 
Office of Fair Housing and Equal Opportunity.
    Dual-filed complaint means a housing discrimination complaint that 
has been filed with both HUD and the agency that has been granted 
interim certification or certification by the Assistant Secretary.
    FHAP means the Fair Housing Assistance Program.
    FHEO means HUD's Office of Fair Housing and Equal Opportunity.
    FHEO regional director means a regional director of the Office of 
Fair Housing and Equal Opportunity.
    Fair housing law or Law refers to both state fair housing laws and 
local fair housing laws.
    Final administrative disposition means an agency's completion of a 
case following a reasonable cause finding, including, but not limited 
to, an agency-approved settlement or a final, administrative decision 
issued by commissioners, hearing officers or administrative law judges. 
Final administrative disposition does not include dispositions in 
judicial proceedings resulting from election or appeal.
    Government Technical Monitor (GTM) means the HUD staff person who 
has been designated to provide technical and financial oversight and 
evaluation of the FHAP grantee's performance.
    Government Technical Representative (GTR) means the HUD staff person 
who is responsible for the technical administration of the FHAP grant, 
the evaluation of performance under the FHAP grant, the acceptance of 
technical reports or projects, the approval of payments, and other such 
specific responsibilities as may be stipulated in the FHAP grant.
    Impracticable, as used in this part, is when complaint processing is 
delayed by circumstances beyond the control of the interim or certified 
agency. Those situations include, but are not limited to, complaints 
involving complex issues requiring extensive investigations, complaints 
involving new and complicated areas of law that need to be analyzed, and 
where a witness is discovered late in the investigation and needs to be 
interviewed.
    Interim agency is an agency that has been granted interim 
certification by the Assistant Secretary.
    Ordinance, as used in this part, means a law enacted by the 
legislative body of a municipality.
    Statute, as used in this part, means a law enacted by the 
legislative body of a state.
    Testing refers to the use of an individual or individuals 
(``testers'') who, without a bona fide intent to rent or purchase a 
house, apartment, or other dwelling, pose as prospective renters or 
purchasers for the purpose of gathering information that may indicate 
whether a housing provider is complying with fair housing laws.

[[Page 715]]



Sec.  115.101  Program administration.

    (a) Authority and responsibility. The Secretary has delegated the 
authority and responsibility for administering this part to the 
Assistant Secretary.
    (b) Delegation of Authority. The Assistant Secretary retains the 
right to make final decisions concerning the granting and withdrawal of 
substantial equivalency interim certification and certification. The 
Assistant Secretary delegates the authority and responsibility for 
administering the remainder of this part to the FHEO regional director. 
This includes assessing the performance of interim and certified 
agencies as described in Sec.  115.206. This also includes the offering 
of a Performance Improvement Plan (PIP) as described in Sec.  115.210 
and the suspension of interim certification or certification due to 
performance deficiencies as described in Sec.  115.210.



Sec.  115.102  Public notices.

    (a) Periodically, the Assistant Secretary will publish the following 
public notices in the Federal Register:
    (1) A list of all interim and certified agencies; and
    (2) A list of agencies to which a withdrawal of interim 
certification or certification has been proposed.
    (b) On an annual basis, the Assistant Secretary may publish in the 
Federal Register a notice that identifies all agencies that have 
received interim certification during the prior year. The notice will 
invite the public to comment on the state and local laws of the new 
interim agencies, as well as on the performance of the agencies in 
enforcing their laws. All comments will be considered before a final 
decision on certification is made.



      Subpart B_Certification of Substantially Equivalent Agencies



Sec.  115.200  Purpose.

    This subpart implements section 810(f) of the Fair Housing Act. The 
purpose of this subpart is to set forth:
    (a) The basis for agency interim certification and certification;
    (b) Procedures by which a determination is made to grant interim 
certification or certification;
    (c) How the Department will evaluate the performance of an interim 
and certified agency;
    (d) Procedures that the Department will utilize when an interim or 
certified agency performs deficiently;
    (e) Procedures that the Department will utilize when there are 
changes limiting the effectiveness of an interim or certified agency's 
law;
    (f) Procedures for renewal of certification; and
    (g) Procedures when an agency requests interim certification or 
certification after a withdrawal.



Sec.  115.201  The two phases of substantial equivalency certification.

    Substantial equivalency certification is granted if the Department 
determines that a state or local agency enforces a law that is 
substantially equivalent to the Fair Housing Act with regard to 
substantive rights, procedures, remedies, and the availability of 
judicial review. The Department has developed a two-phase process of 
substantial equivalency certification.
    (a) Adequacy of Law. In the first phase, the Assistant Secretary 
will determine whether, on its face, the fair housing law that the 
agency administers provides rights, procedures, remedies, and the 
availability of judicial review that are substantially equivalent to 
those provided in the federal Fair Housing Act. An affirmative 
conclusion may result in the Department offering the agency interim 
certification. An agency must obtain interim certification prior to 
obtaining certification.
    (b) Adequacy of Performance. In the second phase, the Assistant 
Secretary will determine whether, in operation, the fair housing law 
that the agency administers provides rights, procedures, remedies, and 
the availability of judicial review that are substantially equivalent to 
those provided in the federal Fair Housing Act. An affirmative 
conclusion will result in the Department offering the agency 
certification.



Sec.  115.202  Request for interim certification.

    (a) A request for interim certification under this subpart shall be 
filed with the Assistant Secretary by the

[[Page 716]]

state or local official having principal responsibility for the 
administration of the state or local fair housing law. The request shall 
be supported by the text of the jurisdiction's fair housing law, the law 
creating and empowering the agency, all laws referenced in the 
jurisdiction's fair housing law, any regulations and directives issued 
under the law, and any formal opinions of the State Attorney General or 
the chief legal officer of the jurisdiction that pertain to the 
jurisdiction's fair housing law. A request shall also include 
organizational information of the agency responsible for administering 
and enforcing the law.
    (b) The request and supporting materials shall be filed with the 
Assistant Secretary for Fair Housing and Equal Opportunity, Department 
of Housing and Urban Development, 451 Seventh Street, SW., Washington, 
DC 20410-2000. The Assistant Secretary shall forward a copy of the 
request and supporting materials to the appropriate FHEO regional 
director. A copy of the request and supporting materials will be kept 
available for public examination and copying at:
    (1) The office of the Assistant Secretary; and
    (2) The office of the state or local agency charged with 
administration and enforcement of the state or local fair housing law.
    (c) Upon receipt of a request, HUD will analyze the agency's fair 
housing law to determine whether it meets the criteria identified in 
Sec.  115.204.
    (d) HUD shall review a request for interim certification from a 
local agency located in a state with an interim certified or certified 
substantially equivalent state agency. However, in the request for 
interim certification, the local agency must certify that the 
substantially equivalent state law does not prohibit the local agency 
from administering and enforcing its own fair housing law within the 
locality.



Sec.  115.203  Interim certification procedures.

    (a) Upon receipt of a request for interim certification filed under 
Sec.  115.202, the Assistant Secretary may request further information 
necessary for a determination to be made under this section. The 
Assistant Secretary may consider the relative priority given to fair 
housing administration, as compared to the agency's other duties and 
responsibilities, as well as the compatibility or potential conflict of 
fair housing objectives with these other duties and responsibilities.
    (b) If the Assistant Secretary determines, after application of the 
criteria set forth in Sec.  115.204, that the state or local law, on its 
face, provides substantive rights, procedures, remedies, and judicial 
review procedures for alleged discriminatory housing practices that are 
substantially equivalent to those provided in the Act, the Assistant 
Secretary may offer to enter into an Agreement for the Interim Referral 
of Complaints and Other Utilization of Services (interim agreement). The 
interim agreement will outline the procedures and authorities upon which 
the interim certification is based.
    (c) Such interim agreement, after it is signed by all appropriate 
signatories, will result in the agency receiving interim certification. 
Appropriate signatories include the Assistant Secretary, the FHEO 
regional director, and the state or local official having principal 
responsibility for the administration of the state or local fair housing 
law.
    (d) Interim agreements shall be for a term of no more than three 
years.
    (e) All regulations, rules, directives, and/or opinions of the State 
Attorney General or the jurisdiction's chief legal officer that are 
necessary for the law to be substantially equivalent on its face must be 
enacted and effective in order for the Assistant Secretary to offer the 
agency an interim agreement.
    (f) Interim certification required prior to certification. An agency 
is required to obtain interim certification prior to obtaining 
certification.



Sec.  115.204  Criteria for adequacy of law.

    (a) In order for a determination to be made that a state or local 
fair housing agency administers a law, which, on its face, provides 
rights and remedies for alleged discriminatory housing practices that 
are substantially equivalent to those provided in the Act, the law must:

[[Page 717]]

    (1) Provide for an administrative enforcement body to receive and 
process complaints and provide that:
    (i) Complaints must be in writing;
    (ii) Upon the filing of a complaint, the agency shall serve notice 
upon the complainant acknowledging the filing and advising the 
complainant of the time limits and choice of forums provided under the 
law;
    (iii) Upon the filing of a complaint, the agency shall promptly 
serve notice on the respondent or person charged with the commission of 
a discriminatory housing practice advising of his or her procedural 
rights and obligations under the statute or ordinance, together with a 
copy of the complaint;
    (iv) A respondent may file an answer to a complaint.
    (2) Delegate to the administrative enforcement body comprehensive 
authority, including subpoena power, to investigate the allegations of 
complaints, and power to conciliate complaints, and require that:
    (i) The agency commences proceedings with respect to the complaint 
before the end of the 30th day after receipt of the complaint;
    (ii) The agency investigates the allegations of the complaint and 
complete the investigation within the timeframe established by section 
810(a)(1)(B)(iv) of the Act or comply with the notification requirements 
of section 810(a)(1)(C) of the Act;
    (iii) The agency make final administrative disposition of a 
complaint within one year of the date of receipt of a complaint, unless 
it is impracticable to do so. If the agency is unable to do so, it shall 
notify the parties, in writing, of the reasons for not doing so;
    (iv) Any conciliation agreement arising out of conciliation efforts 
by the agency shall be an agreement between the respondent, the 
complainant, and the agency and shall require the approval of the 
agency;
    (v) Each conciliation agreement shall be made public, unless the 
complainant and respondent otherwise agree and the agency determines 
that disclosure is not required to further the purpose of the law.
    (3) Not place excessive burdens on the aggrieved person that might 
discourage the filing of complaints, such as:
    (i) A provision that a complaint must be filed within any period of 
time less than 180 days after an alleged discriminatory practice has 
occurred or terminated;
    (ii) Anti-testing provisions;
    (iii) Provisions that could subject an aggrieved person to costs, 
criminal penalties, or fees in connection with the filing of complaints.
    (4) Not contain exemptions that substantially reduce the coverage of 
housing accommodations as compared to section 803 of the Act.
    (5) Provide the same protections as those afforded by sections 804, 
805, 806, and 818 of the Act, consistent with HUD's implementing 
regulations found at 24 CFR part 100.
    (b) In addition to the factors described in paragraph (a) of this 
section, the provisions of the state or local law must afford 
administrative and judicial protection and enforcement of the rights 
embodied in the law.
    (1) The agency must have the authority to:
    (i) Grant or seek prompt judicial action for appropriate temporary 
or preliminary relief pending final disposition of a complaint, if such 
action is necessary to carry out the purposes of the law;
    (ii) Issue and seek enforceable subpoenas;
    (iii) Grant actual damages in an administrative proceeding or 
provide adjudication in court at agency expense to allow the award of 
actual damages to an aggrieved person;
    (iv) Grant injunctive or other equitable relief, or be specifically 
authorized to seek such relief in a court of competent jurisdiction;
    (v) Provide an administrative proceeding in which a civil penalty 
may be assessed or provide adjudication in court, at agency expense, 
allowing the assessment of punitive damages against the respondent.
    (2) If an agency's law offers an administrative hearing, the agency 
must also provide parties an election option substantially equivalent to 
the election provisions of section 812 of the Act.
    (3) Agency actions must be subject to judicial review upon 
application by any

[[Page 718]]

party aggrieved by a final agency order.
    (4) Judicial review of a final agency order must be in a court with 
authority to:
    (i) Grant to the petitioner, or to any other party, such temporary 
relief, restraining order, or other order as the court determines is 
just and proper;
    (ii) Affirm, modify, or set aside, in whole or in part, the order, 
or remand the order for further proceeding; and
    (iii) Enforce the order to the extent that the order is affirmed or 
modified.
    (c) The requirement that the state or local law prohibit 
discrimination on the basis of familial status does not require that the 
state or local law limit the applicability of any reasonable local, 
state, or federal restrictions regarding the maximum number of occupants 
permitted to occupy a dwelling.
    (d) The state or local law may assure that no prohibition of 
discrimination because of familial status applies to housing for older 
persons, as described in 24 CFR part 100, subpart E.
    (e) A determination of the adequacy of a state or local fair housing 
law ``on its face'' is intended to focus on the meaning and intent of 
the text of the law, as distinguished from the effectiveness of its 
administration. Accordingly, this determination is not limited to an 
analysis of the literal text of the law. Regulations, directives, rules 
of procedure, judicial decisions, or interpretations of the fair housing 
law by competent authorities will be considered in making this 
determination.
    (f) A law will be found inadequate ``on its face'' if it permits any 
of the agency's decision-making authority to be contracted out or 
delegated to a non-governmental authority. For the purposes of this 
paragraph, ``decision-making authority'' includes but is not limited to:
    (1) Acceptance of a complaint;
    (2) Approval of a conciliation agreement;
    (3) Dismissal of a complaint;
    (4) Any action specified in Sec.  115.204(a)(2)(iii) or (b)(1); and
    (5) Any decision-making regarding whether a particular matter will 
or will not be pursued.
    (g) The state or local law must provide for civil enforcement of the 
law by an aggrieved person by the commencement of an action in an 
appropriate court at least one year after the occurrence or termination 
of an alleged discriminatory housing practice. The court must be 
empowered to:
    (1) Award the plaintiff actual and punitive damages;
    (2) Grant as relief, as it deems appropriate, any temporary or 
permanent injunction, temporary restraining order or other order; and
    (3) Allow reasonable attorney's fees and costs.
    (h) If a state or local law is different than the Act in a way that 
does not diminish coverage of the Act, including, but not limited to, 
the protection of additional prohibited bases, then the state or local 
law may still be found substantially equivalent.



Sec.  115.205  Certification procedures.

    (a) Certification. (1) If the Assistant Secretary determines, after 
application of criteria set forth in Sec. Sec.  115.204, 115.206, and 
this section, that the state or local law, both ``on its face'' and ``in 
operation,'' provides substantive rights, procedures, remedies, and 
judicial review procedures for alleged discriminatory housing practices 
that are substantially equivalent to those provided in the Act, the 
Assistant Secretary may enter into a Memorandum of Understanding (MOU) 
with the agency.
    (2) The MOU is a written agreement providing for the referral of 
complaints to the agency and for communication procedures between the 
agency and HUD that are adequate to permit the Assistant Secretary to 
monitor the agency's continuing substantial equivalency certification.
    (3) The MOU, after it is signed by all appropriate signatories, may 
authorize an agency to be a certified agency for a period of not more 
than five years. Appropriate signatories include the Assistant 
Secretary, the FHEO regional director, and the authorized employee(s) of 
the agency.
    (b) In order to receive certification, during the 60 days prior to 
the expiration of the agency's interim agreement, the agency must 
certify to the Assistant Secretary that the state or local fair housing 
law, ``on its face,''

[[Page 719]]

continues to be substantially equivalent to the Act (i.e., there have 
been no amendments to the state or local fair housing law, adoption of 
rules or procedures concerning the fair housing law, or judicial or 
other authoritative interpretations of the fair housing law that limit 
the effectiveness of the agency's fair housing law).



Sec.  115.206  Performance assessments; Performance standards.

    (a) Frequency of on-site performance assessment during interim 
certification. The Assistant Secretary, through the appropriate FHEO 
regional office, may conduct an on-site performance assessment not later 
than six months after the execution of the interim agreement. An on-site 
performance assessment may also be conducted during the six months 
immediately prior to the expiration of the interim agreement. HUD has 
the discretion to conduct additional performance assessments during the 
period of interim certification, as it deems necessary.
    (b) Frequency of on-site performance assessment during 
certification. During certification, the Assistant Secretary through the 
FHEO regional office, may conduct on-site performance assessments every 
24 months. HUD has the discretion to conduct additional performance 
assessments during the period of certification, as it deems necessary.
    (c) In conducting the performance assessment, the FHEO regional 
office shall determine whether the agency engages in timely, 
comprehensive, and thorough fair housing complaint investigation, 
conciliation, and enforcement activities. In the performance assessment 
report, the FHEO regional office may recommend to the Assistant 
Secretary whether the agency should continue to be interim certified or 
certified. In conducting the performance assessment, the FHEO regional 
office shall also determine whether the agency is in compliance with the 
requirements for participation in the FHAP enumerated in Sec. Sec.  
115.307, 115.308, 115.309, 115.310, and 115.311 of this part. In the 
performance assessment report, the FHEO regional office shall identify 
whether the agency meets the requirements of Sec. Sec.  115.307, 
115.308, 115.309, 115.310, and 115.311 of this part, and, therefore, 
should continue receiving funding under the FHAP.
    (d) At a minimum, the performance assessment will consider the 
following to determine the effectiveness of an agency's fair housing 
complaint processing, consistent with such guidance as may be issued by 
HUD:
    (1) The agency's case processing procedures;
    (2) The thoroughness of the agency's case processing;
    (3) A review of cause and no cause determinations for quality of 
investigations and consistency with appropriate standards;
    (4) A review of conciliation agreements and other settlements;
    (5) A review of the agency's administrative closures; and
    (6) A review of the agency's enforcement procedures, including 
administrative hearings and judicial proceedings.
    (e) Performance standards. HUD shall utilize the following 
performance standards while conducting performance assessments. If an 
agency does not meet one or more performance standard(s), HUD shall 
utilize the performance deficiency procedures enumerated in Sec.  
115.210.
    (1) Performance Standard 1. Commence complaint proceedings, carry 
forward such proceedings, complete investigations, issue determinations, 
and make final administrative dispositions in a timely manner. To meet 
this standard, the performance assessment will consider the timeliness 
of the agency's actions with respect to its complaint processing, 
including, but not limited to:
    (i) Whether the agency began its processing of fair housing 
complaints within 30 days of receipt;
    (ii) Whether the agency completes the investigative activities with 
respect to a complaint within 100 days from the date of receipt or, if 
it is impracticable to do so, notifies the parties in writing of the 
reason(s) for the delay;
    (iii) Whether the agency makes a determination of reasonable cause 
or no reasonable cause with respect to a complaint within 100 days from 
the date of receipt or, if it is impracticable

[[Page 720]]

to do so, notifies the parties in writing of the reason(s) for the 
delay;
    (iv) Whether the agency makes a final administrative disposition of 
a complaint within one year from the date of receipt or, if it is 
impracticable to do so, notifies the parties in writing of the reason(s) 
for the delay; and
    (v) Whether the agency completed the investigation of the complaint 
and prepared a complete, final investigative report.
    (vi) When an agency is unable to complete investigative activities 
with respect to a complaint within 100 days, the agency must send 
written notification to the parties, indicating the reason(s) for the 
delay, within 110 days of the filing of the complaint.
    (2) Performance Standard 2. Administrative closures are utilized 
only in limited and appropriate circumstances. Administrative closures 
should be distinguished from a closure on the merits and may not be used 
instead of making a recommendation or determination of reasonable or no 
reasonable cause. HUD will provide further guidance to interim and 
certified agencies on the appropriate circumstances for administrative 
closures.
    (3) Performance Standard 3. During the period beginning with the 
filing of a complaint and ending with filing of a charge or dismissal, 
the agency will, to the extent feasible, attempt to conciliate the 
complaint. After a charge has been issued, the agency will, to the 
extent feasible, continue to attempt settlement until a hearing or a 
judicial proceeding has begun.
    (4) Performance Standard 4. The agency conducts compliance reviews 
of settlements, conciliation agreements, and orders resolving 
discriminatory housing practices. The performance assessment shall 
include, but not be limited to:
    (i) An assessment of the agency's procedures for conducting 
compliance reviews; and
    (ii) Terms and conditions of agreements and orders issued.
    (5) Performance Standard 5. The agency must consistently and 
affirmatively seek and obtain the type of relief designed to prevent 
recurrences of discriminatory practices. The performance assessment 
shall include, but not be limited to:
    (i) An assessment of the agency's use of its authority to seek 
actual damages, as appropriate;
    (ii) An assessment of the agency's use of its authority to seek and 
assess civil penalties or punitive damages, as appropriate;
    (iii) An assessment of the types of relief sought by the agency with 
consideration for the inclusion of affirmative provisions designed to 
protect the public interest;
    (iv) A review of all types of relief obtained;
    (v) A review of the adequacy of the relief sought and obtained in 
light of the issues raised by the complaint;
    (vi) The number of complaints closed with relief and the number 
closed without relief;
    (vii) The number of complaints that proceed to administrative 
hearing and the result; and
    (viii) The number of complaints that proceed to judicial proceedings 
and the result.
    (6) Performance Standard 6. The agency must consistently and 
affirmatively seek to eliminate all prohibited practices under its fair 
housing law. An assessment under this standard will include, but not be 
limited to, an identification of the education and outreach efforts of 
the agency.
    (7) Performance Standard 7. The agency must demonstrate that it 
receives and processes a reasonable number of complaints cognizable 
under both the federal Fair Housing Act and the agency's fair housing 
statute or ordinance. The reasonable number will be determined by HUD 
and based on all relevant circumstances including, but not limited to, 
the population of the jurisdiction that the agency serves, the length of 
time that the agency has participated in the FHAP, and the number of 
complaints that the agency has received and processed in the past. If an 
agency fails to receive and process a reasonable number of complaints 
during a year of FHAP participation, given education and outreach 
efforts conducted and receipts of complaints, then the FHEO regional 
director may offer the agency a Performance Improvement Plan (PIP), as 
described in

[[Page 721]]

Sec.  115.210(a)(2). The PIP will set forth the number of complaints the 
agency must process during subsequent years of FHAP participation. After 
issuing the PIP, the FHEO regional office will provide the agency with 
technical assistance on ways to increase awareness of fair housing 
rights and responsibilities in the jurisdiction.
    (8) Performance Standard 8. The agency must report to HUD on the 
final status of all dual-filed complaints where a determination of 
reasonable cause was made. The report must identify, at a minimum, how 
complaints were resolved (e.g., settlement, judicial proceedings, or 
administrative hearing), when they were resolved, the forum in which 
they were resolved, and types and amounts of relief obtained.
    (9) Performance Standard 9. The agency must conform its performance 
to the provisions of any written agreements executed by the agency and 
the Department related to substantial equivalency certification, 
including, but not limited to, the interim agreement or MOU.



Sec.  115.207  Consequences of interim certification and certification.

    (a) Whenever a complaint received by the Assistant Secretary alleges 
violations of a fair housing law administered by an agency that has been 
interim certified or certified as substantially equivalent, the 
complaint will be referred to the agency, and no further action shall be 
taken by the Assistant Secretary with respect to such complaint except 
as provided for by the Act, this part, 24 CFR part 103, subpart C, and 
any written agreements executed by the Agency and the Assistant 
Secretary. HUD shall make referrals to interim certified and certified 
local agencies in accordance with this section even when the local 
agency is located in a state with an interim certified or certified 
state agency.
    (b) If HUD determines that a complaint has not been processed in a 
timely manner in accordance with the performance standards set forth in 
Sec.  115.206, HUD may reactivate the complaint, conduct its own 
investigation and conciliation efforts, and make a determination 
consistent with 24 CFR part 103.
    (c) Notwithstanding paragraph (a) of this section, whenever the 
Assistant Secretary has reason to believe that a complaint demonstrates 
a basis for the commencement of proceedings against any respondent under 
section 814(a) of the Act or for proceedings by any governmental 
licensing or supervisory authorities, the Assistant Secretary shall 
transmit the information upon which such belief is based to the Attorney 
General, federal financial regulatory agencies, other federal agencies, 
or other appropriate governmental licensing or supervisory authorities.



Sec.  115.208  Procedures for renewal of certification.

    (a) If the Assistant Secretary affirmatively concludes that the 
agency's law and performance have complied with the requirements of this 
part in each of the five years of certification, the Assistant Secretary 
may renew the certification of the agency.
    (b) In determining whether to renew the certification of an agency, 
the Assistant Secretary's review may include, but is not limited to:
    (1) Performance assessments of the agency conducted by the 
Department during the five years of certification;
    (2) The agency's own certification that the state or local fair 
housing law continues to be substantially equivalent both ``on its 
face'' and ``in operation;'' (i.e., there have been no amendments to the 
state or local fair housing law, adoption of rules or procedures 
concerning the fair housing law, or judicial or other authoritative 
interpretations of the fair housing law that limit the effectiveness of 
the agency's fair housing law); and
    (3) Any and all public comments regarding the relevant state and 
local laws and the performance of the agency in enforcing the law.
    (c) If the Assistant Secretary decides to renew an agency's 
certification, the Assistant Secretary will offer the agency either a 
new MOU or an Addendum to the Memorandum of Understanding (addendum). 
The new MOU or addendum will extend and update the MOU between HUD and 
the agency.
    (d) The new MOU or addendum, when signed by all appropriate 
signatories, will result in the agency's certification

[[Page 722]]

being renewed for five years from the date on which the previous MOU was 
to expire. Appropriate signatories include the Assistant Secretary, the 
FHEO regional director, and the authorized employee(s) of the agency.
    (e) The provisions of this section may be applied to an agency that 
has an expired MOU or an expired addendum.



Sec.  115.209  Technical assistance.

    (a) The Assistant Secretary, through the FHEO regional office, may 
provide technical assistance to the interim and certified agencies at 
any time. The agency may request such technical assistance or the FHEO 
regional office may determine the necessity for technical assistance and 
require the agency's cooperation and participation.
    (b) The Assistant Secretary, through FHEO headquarters or regional 
staff, will require that the agency participate in training conferences 
and seminars that will enhance the agency's ability to process 
complaints alleging discriminatory housing practices.



Sec.  115.210  Performance deficiency procedures; Suspension; Withdrawal.

    (a) HUD may utilize the following performance deficiency procedures 
if it determines at any time that the agency does not meet one or more 
of the performance standards enumerated in Sec.  115.206. The 
performance deficiency procedures may be applied to agencies with either 
interim certification or certification. If an agency fails to meet 
performance standard 7, HUD may bypass the technical assistance 
performance deficiency procedure and proceed to the PIP.
    (1) Technical assistance. After discovering the deficiency, the FHEO 
regional office should immediately inform the agency and provide the 
agency with technical assistance.
    (2) Performance improvement plan. If, following technical 
assistance, the agency does not bring its performance into compliance 
with Sec.  115.206 within a time period identified by the FHEO regional 
director, the FHEO regional director may offer the agency a PIP.
    (i) The PIP will outline the agency's performance deficiencies, 
identify the necessary corrective actions, and include a timetable for 
completion.
    (ii) If the agency receives a PIP, funding under the FHAP may be 
suspended for the duration of the PIP.
    (iii) Once the agency has implemented the corrective actions to 
eliminate the deficiencies, and such corrective actions are accepted by 
the FHEO regional director, funding may be restored.
    (iv) The FHEO regional office may provide the agency with technical 
assistance during the period of the PIP, if appropriate.
    (b) Suspension. If the agency does not agree to implement the PIP or 
does not implement the corrective actions identified in the PIP within 
the time allotted, then the FHEO regional director may suspend the 
agency's interim certification or certification.
    (1) The FHEO regional director shall notify the agency in writing of 
the specific reasons for the suspension and provide the agency with an 
opportunity to respond within 30 days.
    (2) Suspension shall not exceed 180 days.
    (3) During the period of suspension, HUD will not refer complaints 
to the agency.
    (4) If an agency is suspended, the FHEO regional office may elect 
not to provide funding under the FHAP to the agency during the period of 
suspension, unless and until the Assistant Secretary determines that the 
agency is fully in compliance with Sec.  115.206.
    (5) HUD may provide the agency with technical assistance during the 
period of suspension, if appropriate.
    (6) No more than 60 days prior to the end of suspension, the FHEO 
regional office shall conduct a performance assessment of the agency.
    (c) Withdrawal. If, following the performance assessment conducted 
at the end of suspension, the Assistant Secretary determines that the 
agency has not corrected the deficiencies, the Assistant Secretary may 
propose to withdraw the interim certification or certification of the 
agency.
    (1) The Assistant Secretary shall proceed with withdrawal, unless 
the agency provides information or documentation that establishes that 
the agency's administration of its law meets all of

[[Page 723]]

the substantial equivalency certification criteria set forth in 24 CFR 
part 115.
    (2) The Assistant Secretary shall inform the agency in writing of 
the reasons for the withdrawal.
    (3) During any period after which the Assistant Secretary proposes 
withdrawal, until such time as the agency establishes that 
administration of its law meets all of the substantial equivalency 
certification criteria set forth in 24 CFR part 115, the agency shall be 
ineligible for funding under the FHAP.



Sec.  115.211  Changes limiting effectiveness of agency's law;
Corrective actions; Suspension; Withdrawal; Consequences of repeal; 
Changes not limiting effectiveness.

    (a) Changes limiting effectiveness of agency's law. (1) If a state 
or local fair housing law that HUD has previously deemed substantially 
equivalent to the Act is amended; or rules or procedures concerning the 
fair housing law are adopted; or judicial or other authoritative 
interpretations of the fair housing law are issued, the interim-
certified or certified agency must inform the Assistant Secretary of 
such amendment, adoption, or interpretation within 60 days of its 
discovery.
    (2) The requirements of this section shall apply equally to the 
amendment, adoption, or interpretation of any related law that bears on 
any aspect of the effectiveness of the agency's fair housing law.
    (3) The Assistant Secretary may conduct a review to determine if the 
amendment, adoption, or interpretation limits the effectiveness of the 
interim agency's fair housing law.
    (b) Corrective actions. (1) If the review indicates that the 
agency's law no longer meets the criteria identified in Sec.  115.204, 
the Assistant Secretary will so notify the agency in writing. Following 
notification, HUD may take appropriate actions, including, but not 
limited to, any or all of the following:
    (i) Declining to refer some or all complaints to the agency unless 
and until the fair housing law meets the criteria identified in Sec.  
115.204;
    (ii) Electing not to provide payment for complaints processed by the 
agency unless and until the fair housing law meets the criteria 
identified in Sec.  115.204;
    (iii) Providing technical assistance and/or guidance to the agency 
to assist the agency in curing deficiencies in its fair housing law.
    (2) Suspension based on changes in the law. If the corrective 
actions identified in paragraph (b)(1)(i) through (iii) of this section 
fail to bring the state or local fair housing law back into compliance 
with the criteria identified in Sec.  115.204 within the timeframe 
identified in HUD's notification to the agency, the Assistant Secretary 
may suspend the agency's interim certification or certification based on 
changes in the law or a related law.
    (i) The Assistant Secretary will notify the agency in writing of the 
specific reasons for the suspension and provide the agency with an 
opportunity to respond within 30 days.
    (ii) During the period of suspension, the Assistant Secretary has 
the discretion to not refer some or all complaints to the agency unless 
and until the agency's law meets the criteria identified in Sec.  
115.204.
    (iii) During suspension, HUD may elect not to provide payment for 
complaints processed unless and until the agency's law meets the 
criteria identified in Sec.  115.204.
    (iv) During the period of suspension, if the fair housing law is 
brought back into compliance with the criteria identified in Sec.  
115.204, and the Assistant Secretary determines that the fair housing 
law remains substantially equivalent to the Act, the Assistant Secretary 
will rescind the suspension and reinstate the agency's interim 
certification or certification.
    (3) Withdrawal based on changes in the law. If the Assistant 
Secretary determines that the agency has not brought its law back into 
compliance with the criteria identified in Sec.  115.204 during the 
period of suspension, the Assistant Secretary may propose to withdraw 
the agency's interim certification or certification.
    (i) The Assistant Secretary will proceed with withdrawal unless the 
agency provides information or documentation that establishes that the 
agency's current law meets the criteria of substantial equivalency 
certification identified in Sec.  115.204.

[[Page 724]]

    (ii) The Assistant Secretary will inform the agency in writing of 
the reasons for the withdrawal.
    (c)(1) If, following notification from HUD that its fair housing law 
no longer meets the criteria identified in Sec.  115.204, an interim-
certified or certified agency unequivocally expresses to HUD that its 
fair housing law will not be brought back into compliance, the Assistant 
Secretary may forgo suspension and proceed directly to withdrawal of the 
agency's interim certification or certification.
    (2) During any period after which the Assistant Secretary proposes 
withdrawal, until such time as the agency establishes that 
administration of its law meets all of the substantial equivalency 
certification criteria set forth in 24 CFR part 115, the agency shall be 
ineligible for funding under the FHAP.
    (d) Consequences of repeal. If a state or local fair housing law 
that HUD has previously deemed substantially equivalent to the Act is 
repealed, in whole or in part, or a related law that bears on any aspect 
of the effectiveness of the agency's fair housing law is repealed, in 
whole or in part, the Assistant Secretary may immediately withdraw the 
agency's interim certification or certification.
    (e) Changes not limiting effectiveness. Nothing in this section is 
meant to limit the Assistant Secretary's authority to determine that a 
change to a fair housing law does not jeopardize the substantial 
equivalency interim certification or certification of an agency.
    (1) Under such circumstances, the Assistant Secretary may proceed in 
maintaining the existing relationship with the agency, as set forth in 
the interim agreement or MOU.
    (2) Alternatively, the Assistant Secretary may decide not to refer 
certain types of complaints to the agency. The Assistant Secretary may 
elect not to provide payment for these complaints and may require the 
agency to refer such complaints to the Department for investigation, 
conciliation, and enforcement activities.
    (3) When the Assistant Secretary determines that a change to a fair 
housing law does not jeopardize an agency's substantial equivalency 
certification, the Assistant Secretary need not proceed to suspension or 
withdrawal if the change is not reversed.



Sec.  115.212  Request after withdrawal.

    (a) An agency that has had its interim certification or 
certification withdrawn, either voluntarily or by the Department, may 
request substantial equivalency interim certification or certification.
    (b) The request shall be filed in accordance with Sec.  115.202.
    (c) The Assistant Secretary shall determine whether the state or 
local law, on its face, provides substantive rights, procedures, 
remedies, and judicial review procedures for alleged discriminatory 
housing practices that are substantially equivalent to those provided in 
the federal Fair Housing Act. To meet this standard, the state or local 
law must meet the criteria enumerated in Sec.  115.204.
    (d) Additionally, if the agency had documented performance 
deficiencies that contributed to the past withdrawal, then the 
Department shall consider the agency's performance and any steps the 
agency has taken to correct performance deficiencies and to prevent them 
from recurring in determining whether to grant interim certification or 
certification. The review of the agency's performance shall include HUD 
conducting a performance assessment in accordance with Sec.  115.206.



                Subpart C_Fair Housing Assistance Program



Sec.  115.300  Purpose.

    The purpose of the Fair Housing Assistance Program (FHAP) is to 
provide assistance and reimbursement to state and local fair housing 
enforcement agencies. The intent of this funding program is to build a 
coordinated intergovernmental enforcement effort to further fair housing 
and to encourage the agencies to assume a greater share of the 
responsibility for the administration and enforcement of fair housing 
laws.
    The financial assistance is designed to provide support for:
    (a) The processing of dual-filed complaints;
    (b) Training under the Fair Housing Act and the agencies' fair 
housing law;

[[Page 725]]

    (c) The provision of technical assistance;
    (d) The creation and maintenance of data and information systems; 
and
    (e) The development and enhancement of fair housing education and 
outreach projects, special fair housing enforcement efforts, fair 
housing partnership initiatives, and other fair housing projects.



Sec.  115.301  Agency eligibility criteria; Funding availability.

    An agency with certification or interim certification under subpart 
B of this part, and which has entered into a MOU or interim agreement, 
is eligible to participate in the FHAP. All FHAP funding is subject to 
congressional appropriation.



Sec.  115.302  Capacity building funds.

    (a) Capacity building (CB) funds are funds that HUD may provide to 
an agency with interim certification.
    (b) CB funds will be provided in a fixed annual amount to be 
utilized for the eligible activities established pursuant to Sec.  
115.303. When the fixed annual amount will not adequately compensate an 
agency in its first year of participation in the FHAP due to the large 
number of fair housing complaints that the agency reasonably anticipates 
processing, HUD may provide the agency with additional funds.
    (c) HUD may provide CB funds during an agency's first three years of 
participation in the FHAP. However, in the second and third year of the 
agency's participation in the FHAP, HUD has the option to permit the 
agency to receive contribution funds under Sec.  115.304, instead of CB 
funds.
    (d) In order to receive CB funding, agencies must submit a statement 
of work prior to the signing of the cooperative agreement. The statement 
of work must identify:
    (1) The objectives and activities to be carried out with the CB 
funds received;
    (2) A plan for training all of the agency's employees involved in 
the administration of the agency's fair housing law;
    (3) A statement of the agency's intention to participate in HUD-
sponsored training in accordance with the training requirements set out 
in the cooperative agreement;
    (4) A description of the agency's complaint processing data and 
information system, or, alternatively, whether the agency plans to use 
CB funds to purchase and install a data system;
    (5) A description of any other fair housing activities that the 
agency will undertake with its CB funds. All such activities must 
address matters affecting fair housing enforcement that are cognizable 
under the Fair Housing Act. Any activities that do not address the 
implementation of the agency's fair housing law, and that are therefore 
not cognizable under the Fair Housing Act, will be disapproved.



Sec.  115.303  Eligible activities for capacity building funds.

    The primary purposes of capacity-building funding are to provide for 
complaint activities and to support activities that produce increased 
awareness of fair housing rights and remedies. All such activities must 
support the agency's administration and enforcement of its fair housing 
law and address matters affecting fair housing that are cognizable under 
the Fair Housing Act.



Sec.  115.304  Agencies eligible for contributions funds.

    (a) An agency that has received CB funds for one to three 
consecutive years may be eligible for contributions funding. 
Contributions funding consists of five categories:
    (1) Complaint processing (CP) funds;
    (2) Special enforcement effort (SEE) funds (see Sec.  115.305);
    (3) Training funds (see Sec.  115.306);
    (4) Administrative cost (AC) funds; and
    (5) Partnership (P) funds.
    (b) CP funds. (1) Agencies receiving CP funds will receive such 
support based solely on the number of complaints processed by the agency 
and accepted for payment by the FHEO regional director during a 
consecutive, specifically identified, 12-month period. The 12-month 
period will be identified in the cooperative agreement between HUD and 
the agency. The FHEO regional office shall determine whether or not 
cases are acceptably processed

[[Page 726]]

based on requirements enumerated in the cooperative agreement and its 
attachments/appendices, performance standards set forth in 24 CFR 
115.206, and provisions of the interim agreement or MOU.
    (2) The amount of funding to agencies that are new to contributions 
funding will be based on the number of complaints acceptably processed 
by the agency during the specifically identified 12-month period 
preceding the signing of the cooperative agreement.
    (c) AC funds. (1) Agencies that acceptably process 100 or more cases 
will receive no less than 10 percent of the agency's total FHAP payment 
amount for the preceding year, in addition to CP funds, contingent on 
fiscal year appropriations. Agencies that acceptably process fewer than 
100 cases will receive a flat rate, contingent on fiscal year 
appropriations.
    (2) Agencies will be required to provide HUD with a statement of how 
they intend to use the AC funds. HUD may require that some or all AC 
funding be directed to activities designed to create, modify, or improve 
local, regional, or national information systems concerning fair housing 
matters (including the purchase of state-of-the-art computer systems, 
obtaining and maintaining Internet access, etc.).
    (d) P funds. The purpose of P funds is for an agency participating 
in the FHAP to utilize the services of individuals and/or public, 
private, for-profit, or not-for-profit organizations that have expertise 
needed to effectively carry out the provisions of the agency's fair 
housing law. P funds are fixed amounts and shall be allocated based on 
the FHAP appropriation. Agencies must consult with the CAO and GTR in 
identifying appropriate usage of P funds for the geographical area that 
the agency services. Some examples of proper P fund usage include, but 
are not limited to:
    (1) Contracting with qualified organizations to conduct fair housing 
testing in appropriate cases;
    (2) Hiring experienced, temporary staff to assist in the 
investigation of complex or aged cases;
    (3) Partnering with grassroots, faith-based or other community-based 
organizations to conduct education and outreach to people of different 
backgrounds on how to live together peacefully in the same housing 
complex, neighborhood, or community;
    (4) Contracting with individuals outside the agency who have special 
expertise needed for the investigation of fair housing cases (e.g., 
architects for design and construction cases or qualified individuals 
from colleges and universities for the development of data and 
statistical analyses).



Sec.  115.305  Special enforcement effort (SEE) funds.

    (a) SEE funds are funds that HUD may provide to an agency to enhance 
enforcement activities of the agency's fair housing law. SEE funds will 
be a maximum of 20 percent of the agency's total FHAP cooperative 
agreement for the previous contract year, based on approval of eligible 
activity or activities, and contingent upon the appropriation of funds. 
All agencies receiving contributions funds are eligible to receive SEE 
funds if they meet three of the six criteria set out in paragraphs 
(a)(1) through (a)(6) of this section:
    (1) The agency enforced a subpoena or made use of its prompt 
judicial action authority within the past year;
    (2) The agency has held at least one administrative hearing or has 
had at least one case on a court's docket for civil proceedings during 
the past year;
    (3) At least ten percent of the agency's fair housing caseload 
resulted in written conciliation agreements providing monetary relief 
for the complainant as well as remedial action, monitoring, reporting, 
and public interest relief provisions;
    (4) The agency has had in the most recent three years, or is 
currently engaged in, at least one major fair housing systemic 
investigation requiring an exceptional amount of funds expenditure;
    (5) The agency's administration of its fair housing law received 
meritorious mention for its fair housing complaint processing or other 
fair housing activities that were innovative. The meritorious mention 
criterion may be met by an agency's successful fair housing work being 
identified and/or published by a reputable source. Examples of

[[Page 727]]

meritorious mention include, but are not limited to:
    (i) An article in a minority newspaper or a newspaper of general 
circulation that identifies the agency's role in the successful 
resolution of a housing discrimination complaint;
    (ii) A letter from a sponsoring organization of a fair housing 
conference or symposium that identifies the agency's successful 
participation and presentation at the conference or symposium;
    (iii) A letter of praise, proclamation, or other formal 
documentation from the mayor, county executive, or governor recognizing 
the fair housing achievement of the agency.
    (6) The agency has completed the investigation of at least 10 fair 
housing complaints during the previous funding year.
    (b) Regardless of whether an agency meets the eligibility criteria 
set forth in paragraph (a) of this section, an agency is ineligible for 
SEE funds if:
    (1) Twenty percent or more of an agency's fair housing complaints 
result in administrative closures; or
    (2) The agency is currently on a PIP, or its interim certification 
or certification has been suspended during the federal fiscal year in 
which SEE funds are sought.
    (c) SEE funding amounts are subject to the FHAP appropriation by 
Congress and will be described in writing in the cooperative agreements 
annually. HUD will periodically publish a list of activities eligible 
for SEE funding in the Federal Register.



Sec.  115.306  Training funds.

    (a) All agencies, including agencies that receive CB funds, are 
eligible to receive training funds. Training funds are fixed amounts 
based on the number of agency employees to be trained. Training funds 
shall be allocated based on the FHAP appropriation. Training funds may 
be used only for HUD-approved or HUD-sponsored training. Agency-
initiated training or other formalized training may be included in this 
category. However, such training must first be approved by the CAO and 
the GTR. Specifics on the amount of training funds that an agency will 
receive and, if applicable, amounts that may be deducted, will be set 
out in the cooperative agreement each year.
    (b) Each agency must send staff to mandatory FHAP training sponsored 
by HUD, including, but not necessarily limited to, the National Fair 
Housing Training Academy and the National Fair Housing Policy 
Conference. If the agency does not participate in mandatory HUD-approved 
and HUD-sponsored training, training funds will be deducted from the 
agency's overall training amount. All staff of the agency responsible 
for the administration and enforcement of the fair housing law must 
participate in HUD-approved or HUD-sponsored training each year.



Sec.  115.307  Requirements for participation in the FHAP; Corrective
and remedial action for failing to comply with requirements.

    (a) Agencies that participate in the FHAP must meet the requirements 
enumerated in this section. The FHEO regional office shall review the 
agency's compliance with the requirements of this section when it 
conducts on-site performance assessments in accordance with Sec.  
115.206. The requirements for participation in the FHAP are as follows:
    (1) The agency must conform to all reporting and record maintenance 
requirements set forth in Sec.  115.308, as well as any additional 
reporting and record maintenance requirements identified by the 
Assistant Secretary.
    (2) The agency must agree to on-site technical assistance and 
guidance and implementation of corrective actions set out by the 
Department in response to deficiencies found during the technical 
assistance or performance assessment evaluations of the agency's 
operations.
    (3) The agency must use the Department's official complaint data 
information system and must input all relevant data and information into 
the system in a timely manner.
    (4) The agency must agree to implement and adhere to policies and 
procedures (as the agency's laws allow) provided to the agency by the 
Assistant Secretary, including, but not limited

[[Page 728]]

to, guidance on investigative techniques, case file preparation and 
organization, and implementation of data elements for complaint 
tracking.
    (5) If an agency that participates in the FHAP enforces 
antidiscrimination laws other than a fair housing law (e.g., 
administration of a fair employment law), the agency must annually 
provide a certification to HUD stating that it spends at least 20 
percent of its total annual budget on fair housing activities. The term 
``total annual budget,'' as used in this subsection, means the entire 
budget assigned by the jurisdiction to the agency for enforcing and 
administering antidiscrimination laws, but does not include FHAP funds.
    (6) The agency may not co-mingle FHAP funds with other funds. FHAP 
funds must be segregated from the agency's and the state or local 
government's other funds and must be used for the purpose that HUD 
provided the funds.
    (7) An agency may not unilaterally reduce the level of financial 
resources currently committed to fair housing activities (budget and 
staff reductions or other actions outside the control of the agency will 
not, alone, result in a negative determination for the agency's 
participation in the FHAP).
    (8) The agency must comply with the provisions, certifications, and 
assurances required in any and all written agreements executed by the 
agency and the Department related to participation in the FHAP, 
including, but not limited to, the cooperative agreement.
    (9) The agency must draw down its funds in a timely manner.
    (10) The agency must be audited and receive copies of the audit 
reports in accordance with applicable rules and regulations of the state 
and local government in which it is located.
    (11) The agency must participate in all required training, as 
described in Sec.  115.306(b).
    (12) If the agency subcontracts any activity for which the 
subcontractor will receive FHAP funds, the agency must conform to the 
subcontracting requirements of Sec.  115.309.
    (13) If the agency receives a complaint that may implicate the First 
Amendment of the United States Constitution, then the agency must 
conform to the requirements of Sec.  115.310.
    (14) If the agency utilizes FHAP funds to conduct fair housing 
testing, then the agency must conform to the requirements of Sec.  
115.311.
    (b) Corrective and remedial action for failing to comply with 
requirements. The agency's refusal to provide information, assist in 
implementation, or carry out the requirements of this section may result 
in the denial or interruption of its receipt of FHAP funds. Prior to 
denying or interrupting an agency's receipt of FHAP funds, HUD will put 
the agency on notice of its intent to deny or interrupt. HUD will 
identify its rationale for the denial or interruption and provide the 
agency with an opportunity to respond within a reasonable period of 
time. If, within the time period requested, the agency does not provide 
information or documentation indicating that the requirement(s) 
enumerated in this section is/are met, HUD may proceed with the denial 
or interruption of FHAP funds. If, at any time following the denial or 
interruption, HUD learns that the agency meets the requirements 
enumerated in this section, HUD may opt to reinstate the agency's 
receipt of FHAP funds.



Sec.  115.308  Reporting and recordkeeping requirements.

    (a) The agency shall establish and maintain records demonstrating:
    (1) Its financial administration of FHAP funds; and
    (2) Its performance under the FHAP.
    (b) The agency will provide to the FHEO regional director reports 
maintained pursuant to paragraph (a) of this section. The agency will 
provide reports to the FHEO regional director in accordance with the 
frequency and content requirements identified in the cooperative 
agreement. In addition, the agency will provide reports on the final 
status of complaints following reasonable cause findings, in accordance 
with Performance Standard 8 identified in Sec.  115.206.
    (c) The agency will permit reasonable public access to its records 
consistent with the jurisdiction's requirements for release of 
information. Documents relevant to the agency's participation

[[Page 729]]

in the FHAP must be made available at the agency's office during normal 
working hours (except that documents with respect to ongoing fair 
housing complaint investigations are exempt from public review 
consistent with federal and/or state law).
    (d) The Secretary, Inspector General of HUD, and the Comptroller 
General of the United States or any of their duly authorized 
representatives shall have access to all pertinent books, accounts, 
reports, files, and other payments for surveys, audits, examinations, 
excerpts, and transcripts as they relate to the agency's participation 
in FHAP.
    (e) All files will be kept in such fashion as to permit audits under 
2 CFR part 200, subpart F.

[72 FR 19074, Apr. 16, 2007, as amended at 80 FR 75935, Dec. 7, 2015]



Sec.  115.309  Subcontracting under the FHAP.

    If an agency subcontracts to a public or private organization any 
activity for which the organization will receive FHAP funds, the agency 
must ensure and certify in writing that the organization is:
    (a) Using services, facilities, and electronic information 
technologies that are accessible in accordance with the Americans with 
Disability Act (ADA) (42 U.S.C. 12101), Section 504 of the 1973 
Rehabilitation Act (29 U.S.C. 701), and Section 508(a)(1) of the 
Rehabilitation Act amendments of 1998;
    (b) Complying with the standards of Section 3 of the Housing and 
Urban Development Act of 1968 (42 U.S.C. 1441);
    (c) Affirmatively furthering fair housing in the provision of 
housing and housing-related services; and
    (d) Not presently debarred, suspended, proposed for debarment, 
declared ineligible, or voluntarily excluded from covered transactions 
by any federal debarment or agency.



Sec.  115.310  FHAP and the First Amendment.

    None of the funding made available under the FHAP may be used to 
investigate or prosecute any activity engaged in by one or more persons, 
including the filing or maintaining of a non-frivolous legal action, 
that may be protected by the First Amendment of the United States 
Constitution. HUD guidance is available that sets forth the procedures 
HUD will follow when it is asked to accept and dual-file a case that may 
implicate the First Amendment of the United States Constitution.



Sec.  115.311  Testing.

    The following requirements apply to testing activities funded under 
the FHAP:
    (a) The testing must be done in accordance with a HUD-approved 
testing methodology;
    (b) Testers must not have prior felony convictions or convictions of 
any crimes involving fraud or perjury.
    (c) Testers must receive training or be experienced in testing 
procedures and techniques.
    (d) Testers and the organizations conducting tests, and the 
employees and agents of these organizations may not:
    (1) Have an economic interest in the outcome of the test, without 
prejudice to the right of any person or entity to recover damages for 
any cognizable injury;
    (2) Be a relative or acquaintance of any party in a case;
    (3) Have had any employment or other affiliation, within five years, 
with the person or organization to be tested; or
    (4) Be a competitor of the person or organization to be tested in 
the listing, rental, sale, or financing of real estate.



PART 121_COLLECTION OF DATA--Table of Contents



Sec.
121.1 Purpose.
121.2 Furnishing of data by program participation.

    Authority: Title VIII, Civil Rights Act of 1968 (42 U.S.C. 3600-
3620); E.O. 11063, 27 FR 11527; sec. 602, Civil Rights Act of 1964 (42 
U.S.C. 2000d-1); sec. 562, Housing and Community Development Act of 1987 
(42 U.S.C. 3608a); sec. 2, National Housing Act, 12 U.S.C. 1703; sec. 
7(d), Department of Housing and Urban Development Act, 42 U.S.C. 
3535(d).

    Source: 54 FR 3317, Jan. 23, 1989, unless otherwise noted.

[[Page 730]]



Sec.  121.1  Purpose.

    The purpose of this part is to enable the Secretary of Housing and 
Urban Development to carry out his or her responsibilities under the 
Fair Housing Act, Executive Order 11063, dated November 20, 1962, title 
VI of the Civil Rights Act of 1964, and section 562 of the Housing and 
Community Development Act of 1987. These authorities prohibit 
discrimination in housing and in programs receiving financial assistance 
from the Department of Housing and Urban Development, and they direct 
the Secretary to administer the Department's housing and urban 
development programs and activities in a manner affirmatively to further 
these policies and to collect certain data to assess the extent of 
compliance with these policies.



Sec.  121.2  Furnishing of data by program participants.

    Participants in the programs administered by the Department shall 
furnish to the Department such data concerning the race, color, 
religion, sex, national origin, age, handicap, and family 
characteristics of persons and households who are applicants for, 
participants in, or beneficiaries or potential beneficiaries of, those 
programs as the Secretary may determine to be necessary or appropriate 
to enable him or her to carry out his or her responsibilities under the 
authorities referred to in Sec.  121.1.



PART 125_FAIR HOUSING INITIATIVES PROGRAM--Table of Contents



Sec.
125.103 Definitions.
125.104 Program administration.
125.105 Application requirements.
125.106 Waivers.
125.107 Testers.
125.201 Administrative Enforcement Initiative.
125.301 Education and Outreach Initiative.
125.401 Private Enforcement Initiative.
125.501 Fair Housing Organizations Initiative.

    Authority: 42 U.S.C. 3535(d), 3616 note.

    Source: 60 FR 58452, Nov. 27, 1995, unless otherwise noted.



Sec.  125.103  Definitions.

    In addition to the definitions that appear at section 802 of title 
VIII (42 U.S.C. 3602), the following definitions apply to this part:
    Assistant Secretary means the Assistant Secretary for Fair Housing 
and Equal Opportunity in the Department of Housing and Urban 
Development.
    Expert witness means a person who testifies, or who would have 
testified but for a resolution of the case before a verdict is entered, 
and who qualifies as an expert witness under the rules of the court 
where the litigation funded by this part is brought.
    Fair housing enforcement organization (FHO) means any organization, 
whether or not it is solely engaged in fair housing enforcement 
activities, that--
    (1) Is organized as a private, tax-exempt, nonprofit, charitable 
organization;
    (2) Is currently engaged in complaint intake, complaint 
investigation, testing for fair housing violations and enforcement of 
meritorious claims; and
    (3) Upon the receipt of FHIP funds will continue to be engaged in 
complaint intake, complaint investigation, testing for fair housing 
violations and enforcement of meritorious claims.
    The Department may request an organization to submit documentation 
to support its claimed status as an FHO.
    FHIP means the Fair Housing Initiatives Program authorized by 
section 561 of the Housing and Community Development Act of 1987 (42 
U.S.C. 3616 note).
    Meritorious claims means enforcement activities by an organization 
that resulted in lawsuits, consent decrees, legal settlements, HUD and/
or substantially equivalent agency (under 24 CFR 115.6) conciliations 
and organization initiated settlements with the outcome of monetary 
awards for compensatory and/or punitive damages to plaintiffs or 
complaining parties, or other affirmative relief, including the 
provision of housing.
    Qualified fair housing enforcement organization (QFHO) means any 
organization, whether or not it is solely engaged in fair housing 
enforcement activities, that--

[[Page 731]]

    (1) Is organized as a private, tax-exempt, nonprofit, charitable 
organization;
    (2) Has at least 2 years experience in complaint intake, complaint 
investigation, testing for fair housing violations and enforcement of 
meritorious claims; and
    (3) Is engaged in complaint intake, complaint investigation, testing 
for fair housing violations and enforcement of meritorious claims at the 
time of application for FHIP assistance.
    For the purpose of meeting the 2-year qualification period for the 
activities included in paragraph (2) of this definition, it is not 
necessary that the activities were conducted simultaneously, as long as 
each activity was conducted for 2 years. It is also not necessary for 
the activities to have been conducted for 2 consecutive or continuous 
years. An organization may aggregate its experience in each activity 
over the 3 year period preceding its application to meet the 2-year 
qualification period requirement.
    The Department may request an organization to submit documentation 
to support its claimed status as a QFHO.
    Title VIII means title VIII of the Civil Rights Act of 1968, as 
amended (42 U.S.C. 3600-3620), commonly cited as the Fair Housing Act.

[60 FR 58452, Nov. 27, 1995, as amended at 61 FR 5206, Feb. 9, 1996]



Sec.  125.104  Program administration.

    (a) FHIP is administered by the Assistant Secretary.
    (b) FHIP funding is made available under the following initiatives:
    (1) The Administrative Enforcement Initiative;
    (2) The Education and Outreach Initiative;
    (3) The Private Enforcement Initiative; and
    (4) The Fair Housing Organizations Initiative.
    (c) FHIP funding is made available in accordance with the 
requirements of the authorizing statute (42 U.S.C. 3616 note), the 
regulation in this part, and Notices of Funding Availability (NOFAs), 
and is awarded through a grant or other funding instrument.
    (d) Notices of Funding Availability under this program will be 
published periodically in the Federal Register. Such notices will 
announce amounts available for award, eligible applicants, and eligible 
activities, and may limit funding to one or more of the Initiatives. 
Notices of Funding Availability will include the specific selection 
criteria for awards, and will indicate the relative weight of each 
criterion. The selection criteria announced in Notices of Funding 
Availability will be designed to permit the Department to target and 
respond to areas of concern, and to promote the purposes of the FHIP in 
an equitable and cost efficient manner.
    (e) All recipients of FHIP funds must conform to reporting and 
record maintenance requirements determined appropriate by the Assistant 
Secretary. Each funding instrument will include provisions under which 
the Department may suspend, terminate or recapture funds if the 
recipient does not conform to these requirements.
    (f) Recipients of FHIP funds may not use such funds for the payment 
of expenses in connection with litigation against the United States.
    (g) All recipients of funds under this program must conduct audits 
in accordance with 2 CFR part 200, subpart F.

[60 FR 58452, Nov. 27, 1995, as amended at 80 FR 75935, Dec. 7, 2015]



Sec.  125.105  Application requirements.

    Each application for funding under the FHIP must contain the 
following information, which will be assessed against the specific 
selection criteria set forth in a Notice of Funding Availability.
    (a) A description of the practice (or practices) that has affected 
adversely the achievement of the goal of fair housing, and that will be 
addressed by the applicant's proposed activities.
    (b) A description of the specific activities proposed to be 
conducted with FHIP funds including the final product(s) and/or any 
reports to be produced; the cost of each activity proposed; and a 
schedule for completion of the proposed activities.
    (c) A description of the applicant's experience in formulating or 
carrying out programs to prevent or eliminate discriminatory housing 
practices.

[[Page 732]]

    (d) An estimate of public or private resources that may be available 
to assist the proposed activities.
    (e) A description of the procedures to be used for monitoring 
conduct and assessing results of the proposed activities.
    (f) A description of the benefits that successful completion of the 
project will produce to enhance fair housing, and the indicators by 
which these benefits are to be measured.
    (g) A description of the expected long term viability of project 
results.
    (h) Any additional information that may be required by a Notice of 
Funding Availability published in the Federal Register.

(Approved by the Office of Management and Budget under control number 
2529-0033. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless the 
collection displays a valid control number.)



Sec.  125.106  Waivers.

    Upon determination of good cause, the Assistant Secretary may waive, 
in a published Notice of Funding Availability or other Federal Register 
notice, any requirement in this part that is not required by statute.



Sec.  125.107  Testers.

    The following requirements apply to testing activities funded under 
the FHIP:
    (a) Testers must not have prior felony convictions or convictions of 
crimes involving fraud or perjury.
    (b) Testers must receive training or be experienced in testing 
procedures and techniques.
    (c) Testers and the organizations conducting tests, and the 
employees and agents of these organizations may not:
    (1) Have an economic interest in the outcome of the test, without 
prejudice to the right of any person or entity to recover damages for 
any cognizable injury;
    (2) Be a relative of any party in a case;
    (3) Have had any employment or other affiliation, within one year, 
with the person or organization to be tested; or
    (4) Be a licensed competitor of the person or organization to be 
tested in the listing, rental, sale, or financing of real estate.



Sec.  125.201  Administrative Enforcement Initiative.

    The Administrative Enforcement Initiative provides funding to State 
and local fair housing agencies administering fair housing laws 
recognized by the Assistant Secretary under Sec.  115.6 of this 
subchapter as providing rights and remedies which are substantially 
equivalent to those provided in title VIII.



Sec.  125.301  Education and Outreach Initiative.

    (a) The Education and Outreach Initiative provides funding for the 
purpose of developing, implementing, carrying out, or coordinating 
education and outreach programs designed to inform members of the public 
concerning their rights and obligations under the provisions of fair 
housing laws.
    (b) Notices of Funding Availability published for the FHIP may 
divide Education and Outreach Initiative funding into separate 
competitions for each of the separate types of programs (i.e., national, 
regional and/or local, community-based) eligible under this Initiative.
    (c) National program applications, including those for Fair Housing 
Month funding, may be eligible to receive, as provided for in Notices of 
Funding Availability published in the Federal Register, a preference 
consisting of additional points if they:
    (1) Demonstrate cooperation with real estate industry organizations; 
and/or
    (2) Provide for the dissemination of educational information and 
technical assistance to support compliance with the housing adaptability 
and accessibility guidelines contained in the Fair Housing Amendments 
Act of 1988.
    (d) Activities that are regional are activities that are implemented 
in adjoining States or two or more units of general local government 
within a state. Activities that are local are activities whose 
implementation is limited to a single unit of general local government, 
meaning a city, town, township, county, parish, village, or

[[Page 733]]

other general purpose political subdivision of a State. Activities that 
are community-based in scope are those which are primarily focused on a 
particular neighborhood area within a unit of general local government.
    (e) Each non-governmental recipient of regional, local, or 
community-based funding for activities located within the jurisdiction 
of a State or local enforcement agency or agencies administering a 
substantially equivalent (under part 115 of this subchapter) fair 
housing law must consult with the agency or agencies to coordinate 
activities funded under FHIP.



Sec.  125.401  Private Enforcement Initiative.

    (a) The Private Enforcement Initiative provides funding on a single-
year or multi-year basis, to investigate violations and obtain 
enforcement of the rights granted under the Fair Housing Act or State or 
local laws that provide rights and remedies for discriminatory housing 
practices that are substantially equivalent to the rights and remedies 
provided in the Fair Housing Act. Multi-year funding may be contingent 
upon annual performance reviews and annual appropriations.
    (b) Organizations that are eligible to receive assistance under the 
Private Enforcement Initiative are:
    (1) Qualified fair housing enforcement organizations.
    (2) Fair housing enforcement organizations with at least 1 year of 
experience in complaint intake, complaint investigation, testing for 
fair housing violations and enforcement of meritorious claims. For the 
purpose of meeting this 1 year qualification period, it is not necessary 
that the activities were conducted simultaneously, as long as each 
activity was conducted for 1 year. It is also not necessary for the 
activities to have been conducted for a continuous year. An organization 
may aggregate its experience in each activity over the 2-year period 
preceding its application to meet this 1 year qualification period 
requirement.



Sec.  125.501  Fair Housing Organizations Initiative.

    (a) The Fair Housing Organizations Initiative of the FHIP provides 
funding to develop or expand the ability of existing eligible 
organizations to provide fair housing enforcement, and to establish, on 
a single-year or multi-year basis contingent upon annual performance 
reviews and annual appropriations, new fair housing enforcement 
organizations.
    (b) Continued development of existing organizations--(1) Eligible 
applicants. Eligible for funding under this component of the Fair 
Housing Organizations Initiative are:
    (i) Qualified fair housing enforcement organizations;
    (ii) Fair housing enforcement organizations; and
    (iii) Nonprofit groups organizing to build their capacity to provide 
fair housing enforcement.
    (2) Operating budget limitation. (i) Funding under this component of 
the Fair Housing Organizations Initiative may not be used to provide 
more than 50 percent of the operating budget of a recipient organization 
for any one year.
    (ii) For purposes of the limitation in this paragraph, operating 
budget means the applicant's total planned budget expenditures from all 
sources, including the value of in-kind and monetary contributions, in 
the year for which funding is sought.
    (c) Establishing new organizations--(1) Eligible applicants. 
Eligible for funding under this component of the Fair Housing 
Organizations Initiative are:
    (i) Qualified fair housing enforcement organizations;
    (ii) Fair housing enforcement organizations; and
    (iii) Organizations with at least three years of experience in 
complaint intake, complaint investigation, and enforcement of 
meritorious claims involving the use of testing evidence.
    (2) Targeted areas. FHIP Notices of Funding Availability may 
identify target areas of the country that may receive priority for 
funding under this component of the Fair Housing Organizations 
Initiative. An applicant may also seek funding to establish a new 
organization in a locality not identified as a target area, but in such 
a case, the applicant must submit sufficient evidence to establish the 
proposed area as being currently underserved by fair

[[Page 734]]

housing enforcement organizations or as containing large concentrations 
of protected classes.

[[Page 735]]



            SUBCHAPTER B_EMPLOYMENT AND BUSINESS OPPORTUNITY





PART 135_ECONOMIC OPPORTUNITIES FOR LOW- AND VERY LOW-INCOME PERSONS
--Table of Contents



                      Subpart A_General Provisions

Sec.
135.1 Purpose.
135.2 Effective date of regulation.
135.3 Applicability.
135.5 Definitions.
135.7 Delegation of authority.
135.9 Requirements applicable to HUD NOFAs for section 3 covered 
          programs.
135.11 Other laws governing training, employment, and contracting.

 Subpart B_Economic Opportunities for Section 3 Residents and Section 3 
                            Business Concerns

135.30 Numerical goals for meeting the greatest extent feasible 
          requirement.
135.32 Responsibilities of the recipient.
135.34 Preference for section 3 residents in training and employment 
          opportunities.
135.36 Preference for section 3 business concerns in contracting 
          opportunities.
135.38 Section 3 clause.
135.40 Providing other economic opportunities.

Subpart C [Reserved]

                Subpart D_Complaint and Compliance Review

135.70 General.
135.72 Cooperation in achieving compliance.
135.74 Section 3 compliance review procedures.
135.76 Filing and processing complaints.

                  Subpart E_Reporting and Recordkeeping

135.90 Reporting.
135.92 Recordkeeping and access to records.

Appendix to Part 135

    Authority: 12 U.S.C. 1701u; 42 U.S.C. 3535(d).

    Source: 59 FR 33880, June 30, 1994, unless otherwise noted.

    Effective Date Note: At 59 FR 33880, June 30, 1994, part 135 was 
revised effective Aug. 1, 1994, through June 30, 1995. At 60 FR 28325, 
May 31, 1995, the effective period was extended until the final rule 
implementing changes made to section 3 of the Housing and Urban 
Development Act of 1968 by the Housing and Community Development Act of 
1992 is published and becomes effective.



                      Subpart A_General Provisions



Sec.  135.1  Purpose.

    (a) Section 3. The purpose of section 3 of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701u) (section 3) is to ensure that 
employment and other economic opportunities generated by certain HUD 
financial assistance shall, to the greatest extent feasible, and 
consistent with existing Federal, State and local laws and regulations, 
be directed to low- and very low-income persons, particularly those who 
are recipients of government assistance for housing, and to business 
concerns which provide economic opportunities to low- and very low-
income persons.
    (b) Part 135. The purpose of this part is to establish the standards 
and procedures to be followed to ensure that the objectives of section 3 
are met.



Sec.  135.2  Effective date of regulation.

    The regulations of this part will remain in effect until the date 
the final rule adopting the regulations of this part with or without 
changes is published and becomes effective, at which point the final 
rule will remain in effect.

[60 FR 28326, May 31, 1995]



Sec.  135.3  Applicability.

    (a) Section 3 covered assistance. Section 3 applies to the following 
HUD assistance (section 3 covered assistance):
    (1) Public and Indian housing assistance. Section 3 applies to 
training, employment, contracting and other economic opportunities 
arising from the expenditure of the following public and Indian housing 
assistance:
    (i) Development assistance provided pursuant to section 5 of the 
U.S. Housing Act of 1937 (1937 Act);
    (ii) Operating assistance provided pursuant to section 9 of the 1937 
Act; and

[[Page 736]]

    (iii) Modernization assistance provided pursuant to section 14 of 
the 1937 Act;
    (2) Housing and community development assistance. Section 3 applies 
to training, employment, contracting and other economic opportunities 
arising in connection with the expenditure of housing assistance 
(including section 8 assistance, and including other housing assistance 
not administered by the Assistant Secretary of Housing) and community 
development assistance that is used for the following projects;
    (i) Housing rehabilitation (including reduction and abatement of 
lead-based paint hazards, but excluding routine maintenance, repair and 
replacement);
    (ii) Housing construction; and
    (iii) Other public construction.
    (3) Thresholds--(i) No thresholds for section 3 covered public and 
Indian housing assistance. The requirements of this part apply to 
section 3 covered assistance provided to recipients, notwithstanding the 
amount of the assistance provided to the recipient. The requirements of 
this part apply to all contractors and subcontractors performing work in 
connection with projects and activities funded by public and Indian 
housing assistance covered by section 3, regardless of the amount of the 
contract or subcontract.
    (ii) Thresholds for section 3 covered housing and community 
development assistance--(A) Recipient thresholds. The requirements of 
this part apply to recipients of other housing and community development 
program assistance for a section 3 covered project(s) for which the 
amount of the assistance exceeds $200,000.
    (B) Contractor and subcontractor thresholds. The requirements of 
this part apply to contractors and subcontractors performing work on 
section 3 covered project(s) for which the amount of the assistance 
exceeds $200,000; and the contract or subcontract exceeds $100,000.
    (C) Threshold met for recipients, but not contractors or 
subcontractors. If a recipient receives section 3 covered housing or 
community development assistance in excess of $200,000, but no contract 
exceeds $100,000, the section 3 preference requirements only apply to 
the recipient.
    (b) Applicability of section 3 to entire project or activity funded 
with section 3 assistance. The requirements of this part apply to the 
entire project or activity that is funded with section 3 covered 
assistance, regardless of whether the section 3 activity is fully or 
partially funded with section 3 covered assistance.
    (c) Applicability to Indian housing authorities and Indian tribes. 
Indian housing authorities and tribes that receive HUD assistance 
described in paragraph (a) of this section shall comply with the 
procedures and requirements of this part to the maximum extent 
consistent with, but not in derogation of, compliance with section 7(b) 
of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 
450e(b)). (See 24 CFR part 905.)
    (d) Other HUD assistance and other Federal assistance. Recipients, 
contractors and subcontractors that receive HUD assistance, not listed 
in paragraph (a) of this section, or other Federal assistance, are 
encouraged to provide, to the greatest extent feasible, training, 
employment, and contracting opportunities generated by the expenditure 
of this assistance to low- and very low-income persons, and business 
concerns owned by low- and very low-income persons, or which employ low- 
and very low-income persons.



Sec.  135.5  Definitions.

    The terms Department, HUD, Indian housing authority (IHA), Public 
housing agency (PHA), and Secretary are defined in 24 CFR part 5.
    Annual Contributions Contract (ACC) means the contract under the 
U.S. Housing Act of 1937 (1937 Act) between HUD and the PHA, or between 
HUD and the IHA, that contains the terms and conditions under which HUD 
assists the PHA or the IHA in providing decent, safe, and sanitary 
housing for low income families. The ACC must be in a form prescribed by 
HUD under which HUD agrees to provide assistance in the development, 
modernization and/or operation of a low income housing project under the 
1937 Act, and the PHA or IHA agrees to develop, modernize and operate 
the project in compliance with all provisions of the

[[Page 737]]

ACC and the 1937 Act, and all HUD regulations and implementing 
requirements and procedures. (The ACC is not a form of procurement 
contract.)
    Applicant means any entity which makes an application for section 3 
covered assistance, and includes, but is not limited to, any State, unit 
of local government, public housing agency, Indian housing authority, 
Indian tribe, or other public body, public or private nonprofit 
organization, private agency or institution, mortgagor, developer, 
limited dividend sponsor, builder, property manager, community housing 
development organization (CHDO), resident management corporation, 
resident council, or cooperative association.
    Assistant Secretary means the Assistant Secretary for Fair Housing 
and Equal Opportunity.
    Business concern means a business entity formed in accordance with 
State law, and which is licensed under State, county or municipal law to 
engage in the type of business activity for which it was formed.
    Business concern that provides economic opportunities for low- and 
very low-income persons. See definition of ``section 3 business 
concern'' in this section.
    Contract. See the definition of ``section 3 covered contract'' in 
this section.
    Contractor means any entity which contracts to perform work 
generated by the expenditure of section 3 covered assistance, or for 
work in connection with a section 3 covered project.
    Employment opportunities generated by section 3 covered assistance 
means all employment opportunities generated by the expenditure of 
section 3 covered public and Indian housing assistance (i.e., operating 
assistance, development assistance and modernization assistance, as 
described in Sec.  135.3(a)(1)). With respect to section 3 covered 
housing and community development assistance, this term means all 
employment opportunities arising in connection with section 3 covered 
projects (as described in Sec.  135.3(a)(2)), including management and 
administrative jobs connected with the section 3 covered project. 
Management and administrative jobs include architectural, engineering or 
related professional services required to prepare plans, drawings, 
specifications, or work write-ups; and jobs directly related to 
administrative support of these activities, e.g., construction manager, 
relocation specialist, payroll clerk, etc.
    Housing authority (HA) means, collectively, public housing agency 
and Indian housing authority.
    Housing and community development assistance means any financial 
assistance provided or otherwise made available through a HUD housing or 
community development program through any grant, loan, loan guarantee, 
cooperative agreement, or contract, and includes community development 
funds in the form of community development block grants, and loans 
guaranteed under section 108 of the Housing and Community Development 
Act of 1974, as amended. Housing and community development assistance 
does not include financial assistance provided through a contract of 
insurance or guaranty.
    Housing development means low-income housing owned, developed, or 
operated by public housing agencies or Indian housing authorities in 
accordance with HUD's public and Indian housing program regulations 
codified in 24 CFR Chapter IX.
    HUD Youthbuild programs mean programs that receive assistance under 
subtitle D of Title IV of the National Affordable Housing Act, as 
amended by the Housing and Community Development Act of 1992 (42 U.S.C. 
12899), and provide disadvantaged youth with opportunities for 
employment, education, leadership development, and training in the 
construction or rehabilitation of housing for homeless individuals and 
members of low- and very low-income families.
    Indian tribes shall have the meaning given this term in 24 CFR part 
571.
    JTPA means the Job Training Partnership Act (29 U.S.C. 1579(a)).
    Low-income person. See the definition of ``section 3 resident'' in 
this section.
    Metropolitan area means a metropolitan statistical area (MSA), as 
established by the Office of Management and Budget.
    Neighborhood area means:

[[Page 738]]

    (1) For HUD housing programs, a geographical location within the 
jurisdiction of a unit of general local government (but not the entire 
jurisdiction) designated in ordinances, or other local documents as a 
neighborhood, village, or similar geographical designation.
    (2) For HUD community development programs, see the definition, if 
provided, in the regulations for the applicable community development 
program, or the definition for this term in 24 CFR 570.204(c)(1).
    New hires mean full-time employees for permanent, temporary or 
seasonal employment opportunities.
    Nonmetropolitan county means any county outside of a metropolitan 
area.
    Other HUD programs means HUD programs, other than HUD public and 
Indian housing programs, that provide housing and community development 
assistance for ``section 3 covered projects,'' as defined in this 
section.
    Public housing resident has the meaning given this term in 24 CFR 
part 963.
    Recipient means any entity which receives section 3 covered 
assistance, directly from HUD or from another recipient and includes, 
but is not limited to, any State, unit of local government, PHA, IHA, 
Indian tribe, or other public body, public or private nonprofit 
organization, private agency or institution, mortgagor, developer, 
limited dividend sponsor, builder, property manager, community housing 
development organization, resident management corporation, resident 
council, or cooperative association. Recipient also includes any 
successor, assignee or transferee of any such entity, but does not 
include any ultimate beneficiary under the HUD program to which section 
3 applies and does not include contractors.
    Section 3 means section 3 of the Housing and Urban Development Act 
of 1968, as amended (12 U.S.C. 1701u).
    Section 3 business concern means a business concern, as defined in 
this section--
    (1) That is 51 percent or more owned by section 3 residents; or
    (2) Whose permanent, full-time employees include persons, at least 
30 percent of whom are currently section 3 residents, or within three 
years of the date of first employment with the business concern were 
section 3 residents; or
    (3) That provides evidence of a commitment to subcontract in excess 
of 25 percent of the dollar award of all subcontracts to be awarded to 
business concerns that meet the qualifications set forth in paragraphs 
(1) or (2) in this definition of ``section 3 business concern.''
    Section 3 clause means the contract provisions set forth in Sec.  
135.38.
    Section 3 covered activity means any activity which is funded by 
section 3 covered assistance public and Indian housing assistance.
    Section 3 covered assistance means: (1) Public and Indian housing 
development assistance provided pursuant to section 5 of the 1937 Act;
    (2) Public and Indian housing operating assistance provided pursuant 
to section 9 of the 1937 Act;
    (3) Public and Indian housing modernization assistance provided 
pursuant to section 14 of the 1937 Act;
    (4) Assistance provided under any HUD housing or community 
development program that is expended for work arising in connection 
with:
    (i) Housing rehabilitation (including reduction and abatement of 
lead-based paint hazards, but excluding routine maintenance, repair and 
replacement);
    (ii) Housing construction; or
    (iii) Other public construction project (which includes other 
buildings or improvements, regardless of ownership).
    Section 3 covered contract means a contract or subcontract 
(including a professional service contract) awarded by a recipient or 
contractor for work generated by the expenditure of section 3 covered 
assistance, or for work arising in connection with a section 3 covered 
project. ``Section 3 covered contracts'' do not include contracts 
awarded under HUD's procurement program, which are governed by the 
Federal Acquisition Regulation System (see 48 CFR, Chapter 1). ``Section 
3 covered contracts'' also do not include contracts for the purchase of 
supplies and materials. However, whenever a contract for materials 
includes the installation of the materials, the contract constitutes a 
section 3 covered contract. For example, a contract for the

[[Page 739]]

purchase and installation of a furnace would be a section 3 covered 
contract because the contract is for work (i.e., the installation of the 
furnace) and thus is covered by section 3.
    Section 3 covered project means the construction, reconstruction, 
conversion or rehabilitation of housing (including reduction and 
abatement of lead-based paint hazards), other public construction which 
includes buildings or improvements (regardless of ownership) assisted 
with housing or community development assistance.
    Section 3 joint venture. See Sec.  135.40. Section 3 resident means: 
(1) A public housing resident; or
    (2) An individual who resides in the metropolitan area or 
nonmetropolitan county in which the section 3 covered assistance is 
expended, and who is:
    (i) A low-income person, as this term is defined in section 3(b)(2) 
of the 1937 Act (42 U.S.C. 1437a(b)(2)). Section 3(b)(2) of the 1937 Act 
defines this term to mean families (including single persons) whose 
incomes do not exceed 80 per centum of the median income for the area, 
as determined by the Secretary, with adjustments for smaller and larger 
families, except that the Secretary may establish income ceilings higher 
or lower than 80 per centum of the median for the area on the basis of 
the Secretary's findings that such variations are necessary because of 
prevailing levels of construction costs or unusually high or low-income 
families; or
    (ii) A very low-income person, as this term is defined in section 
3(b)(2) of the 1937 Act (42 U.S.C. 1437a(b)(2)). Section 3(b)(2) of the 
1937 Act (42 U.S.C. 1437a(b)(2)) defines this term to mean families 
(including single persons) whose incomes do not exceed 50 per centum of 
the median family income for the area, as determined by the Secretary 
with adjustments for smaller and larger families, except that the 
Secretary may establish income ceilings higher or lower than 50 per 
centum of the median for the area on the basis of the Secretary's 
findings that such variations are necessary because of unusually high or 
low family incomes.
    (3) A person seeking the training and employment preference provided 
by section 3 bears the responsibility of providing evidence (if 
requested) that the person is eligible for the preference.
    Section 8 assistance means assistance provided under section 8 of 
the 1937 Act (42 U.S.C. 1437f) pursuant to 24 CFR part 882, subpart G.
    Service area means the geographical area in which the persons 
benefitting from the section 3 covered project reside. The service area 
shall not extend beyond the unit of general local government in which 
the section 3 covered assistance is expended. In HUD's Indian housing 
programs, the service area, for IHAs established by an Indian tribe as a 
result of the exercise of the tribe's sovereign power, is limited to the 
area of tribal jurisdiction.
    Subcontractor means any entity (other than a person who is an 
employee of the contractor) which has a contract with a contractor to 
undertake a portion of the contractor's obligation for the performance 
of work generated by the expenditure of section 3 covered assistance, or 
arising in connection with a section 3 covered project.
    Very low-income person. See the definition of ``section 3 resident'' 
in this section.
    Youthbuild programs. See the definition of ``HUD Youthbuild 
programs'' in this section.

[59 FR 33880, June 30, 1994, as amended at 61 FR 5206, Feb. 9, 1996]



Sec.  135.7  Delegation of authority.

    Except as may be otherwise provided in this part, the functions and 
responsibilities of the Secretary under section 3, and described in this 
part, are delegated to the Assistant Secretary for Fair Housing and 
Equal Opportunity. The Assistant Secretary is further authorized to 
redelegate functions and responsibilities to other employees of HUD; 
provided however, that the authority to issue rules and regulations 
under this part, which authority is delegated to the Assistant 
Secretary, may not be redelegated by the Assistant Secretary.

[[Page 740]]



Sec.  135.9  Requirements applicable to HUD NOFAs for section 3 
covered programs.

    (a) Certification of compliance with part 135. All notices of 
funding availability (NOFAs) issued by HUD that announce the 
availability of funding covered by section 3 shall include a provision 
in the NOFA that notifies applicants that section 3 and the regulations 
in part 135 are applicable to funding awards made under the NOFA. 
Additionally the NOFA shall require as an application submission 
requirement (which may be specified in the NOFA or application kit) a 
certification by the applicant that the applicant will comply with the 
regulations in part 135. (For PHAs, this requirement will be met where a 
PHA Resolution in Support of the Application is submitted.) With respect 
to application evaluation, HUD will accept an applicant's certification 
unless there is evidence substantially challenging the certification.
    (b) Statement of purpose in NOFAs. (1) For competitively awarded 
assistance in which the grants are for activities administered by an HA, 
and those activities are anticipated to generate significant training, 
employment or contracting opportunities, the NOFA must include a 
statement that one of the purposes of the assistance is to give to the 
greatest extent feasible, and consistent with existing Federal, State 
and local laws and regulations, job training, employment, contracting 
and other economic opportunities to section 3 residents and section 3 
business concerns.
    (2) For competitively awarded assistance involving housing 
rehabilitation, construction or other public construction, where the 
amount awarded to the applicant may exceed $200,000, the NOFA must 
include a statement that one of the purposes of the assistance is to 
give, to the greatest extent feasible, and consistent with existing 
Federal, State and local laws and regulations, job training, employment, 
contracting and other economic opportunities to section 3 residents and 
section 3 business concerns.
    (c) Section 3 as NOFA evaluation criteria. Where not otherwise 
precluded by statute, in the evaluation of applications for the award of 
assistance, consideration shall be given to the extent to which an 
applicant has demonstrated that it will train and employ section 3 
residents and contract with section 3 business concerns for economic 
opportunities generated in connection with the assisted project or 
activity. The evaluation criteria to be utilized, and the rating points 
to be assigned, will be specified in the NOFA.



Sec.  135.11  Other laws governing training, employment, and contracting.

    Other laws and requirements that are applicable or may be applicable 
to the economic opportunities generated from the expenditure of section 
3 covered assistance include, but are not necessarily limited to those 
listed in this section.
    (a) Procurement standards for States and local governments 2 CFR 
part 200, subpart D--(1) General. Nothing in this part 135 prescribes 
specific methods of procurement. However, neither section 3 nor the 
requirements of this part 135 supersede the general requirement of 2 CFR 
200.319 that all procurement transactions be conducted in a competitive 
manner. Consistent with 2 CFR 200.319, section 3 is a Federal statute 
that expressly encourages, to the maximum extent feasible, a geographic 
preference in the evaluation of bids or proposals.
    (2) Flexible Subsidy Program. Multifamily project mortgagors in the 
Flexible Subsidy Program are not required to utilize the methods of 
procurement in 2 CFR 200.320, and are not permitted to utilize methods 
of procurement that would result in their award of a contract to a 
business concern that submits a bid higher than the lowest responsive 
bid. A multifamily project mortgagor, however, must ensure that, to the 
greatest extent feasible, the procurement practices it selects provide 
preference to section 3 business concerns.
    (b) Procurement standards for other recipients (2 CFR part 200, 
subpart D). Nothing in this part prescribes specific methods of 
procurement for grants and other agreements with institutions of higher 
education, hospitals, and other nonprofit organizations. Consistent with 
the requirements set forth in 2 CFR part 200, subpart D, section 3 is a

[[Page 741]]

Federal statute that expressly encourages a geographic preference in the 
evaluation of bids or proposals.
    (c) Federal labor standards provisions. Certain construction 
contracts are subject to compliance with the requirement to pay 
prevailing wages determined under Davis-Bacon Act (40 U.S.C. 276a--276a-
7) and implementing U.S. Department of Labor regulations in 29 CFR part 
5. Additionally, certain HUD-assisted rehabilitation and maintenance 
activities on public and Indian housing developments are subject to 
compliance with the requirement to pay prevailing wage rates, as 
determined or adopted by HUD, to laborers and mechanics employed in this 
work. Apprentices and trainees may be utilized on this work only to the 
extent permitted under either Department of Labor regulations at 29 CFR 
part 5 or for work subject to HUD-determined prevailing wage rates, HUD 
policies and guidelines. These requirements include adherence to the 
wage rates and ratios of apprentices or trainees to journeymen set out 
in ``approved apprenticeship and training programs,'' as described in 
paragraph (d) of this section.
    (d) Approved apprenticeship and trainee programs. Certain 
apprenticeship and trainee programs have been approved by various 
Federal agencies. Approved apprenticeship and trainee programs include: 
an apprenticeship program approved by the Bureau of Apprenticeship and 
Training of the Department of Labor, or a State Apprenticeship Agency, 
or an on-the-job training program approved by the Bureau of 
Apprenticeship and Training, in accordance with the regulations at 29 
CFR part 5; or a training program approved by HUD in accordance with HUD 
policies and guidelines, as applicable. Participation in an approved 
apprenticeship program does not, in and of itself, demonstrate 
compliance with the regulations of this part.
    (e) Compliance with Executive Order 11246. Certain contractors 
covered by this part are subject to compliance with Executive Order 
11246, as amended by Executive Order 12086, and the Department of Labor 
regulations issued pursuant thereto (41 CFR chapter 60) which provide 
that no person shall be discriminated against on the basis of race, 
color, religion, sex, or national origin in all phases of employment 
during the performance of Federal or Federally assisted construction 
contracts.

[59 FR 33880, June 30, 1994, as amended at 80 FR 75935, Dec. 7, 2015]



 Subpart B_Economic Opportunities for Section 3 Residents and Section 3 
                            Business Concerns



Sec.  135.30  Numerical goals for meeting the greatest extent feasible
requirement.

    (a) General. (1) Recipients and covered contractors may demonstrate 
compliance with the ``greatest extent feasible'' requirement of section 
3 by meeting the numerical goals set forth in this section for providing 
training, employment, and contracting opportunities to section 3 
residents and section 3 business concerns.
    (2) The goals established in this section apply to the entire amount 
of section 3 covered assistance awarded to a recipient in any Federal 
Fiscal Year (FY), commencing with the first FY following the effective 
date of this rule.
    (3) For recipients that do not engage in training, or hiring, but 
award contracts to contractors that will engage in training, hiring, and 
subcontracting, recipients must ensure that, to the greatest extent 
feasible, contractors will provide training, employment, and contracting 
opportunities to section 3 residents and section 3 business concerns.
    (4) The numerical goals established in this section represent 
minimum numerical targets.
    (b) Training and employment. The numerical goals set forth in 
paragraph (b) of this section apply to new hires. The numerical goals 
reflect the aggregate hires. Efforts to employ section 3 residents, to 
the greatest extent feasible, should be made at all job levels.
    (1) Numerical goals for section 3 covered public and Indian housing 
programs. Recipients of section 3 covered public and Indian housing 
assistance (as described in Sec.  135.5) and their contractors and

[[Page 742]]

subcontractors may demonstrate compliance with this part by committing 
to employ section 3 residents as:
    (i) 10 percent of the aggregate number of new hires for the one year 
period beginning in FY 1995;
    (ii) 20 percent of the aggregate number of new hires for the one 
period beginning in FY 1996;
    (iii) 30 percent of the aggregate number of new hires for one year 
period beginning in FY 1997 and continuing thereafter.
    (2) Numerical goals for other HUD programs covered by section 3. (i) 
Recipients of section 3 covered housing assistance provided under other 
HUD programs, and their contractors and subcontractors (unless the 
contract or subcontract awards do not meet the threshold specified in 
Sec.  135.3(a)(3)) may demonstrate compliance with this part by 
committing to employ section 3 residents as 10 percent of the aggregate 
number of new hires for each year over the duration of the section 3 
project;
    (ii) Where a managing general partner or management agent is 
affiliated, in a given metropolitan area, with recipients of section 3 
covered housing assistance, for an aggregate of 500 or more units in any 
fiscal year, the managing partner or management agent may demonstrate 
compliance with this part by committing to employ section 3 residents 
as:
    (A) 10 percent of the aggregate number of new hires for the one year 
period beginning in FY 1995;
    (B) 20 percent of the aggregate number of new hires for the one year 
period beginning in FY 1996;
    (C) 30 percent of the aggregate number of new hires for the one year 
period beginning in FY 1997, and continuing thereafter.
    (3) Recipients of section 3 covered community development 
assistance, and their contractors and subcontractors (unless the 
contract or subcontract awards do not meet the threshold specified in 
Sec.  135.3(a)(3)) may demonstrate compliance with the requirements of 
this part by committing to employ section 3 residents as:
    (i) 10 percent of the aggregate number of new hires for the one year 
period beginning in FY 1995;
    (ii) 20 percent of the aggregate number of new hires for the one 
year period beginning in FY 1996; and
    (iii) 30 percent of the aggregate number of new hires for the one 
year period beginning in FY 1997 and continuing thereafter.
    (c) Contracts. Numerical goals set forth in paragraph (c) of this 
section apply to contracts awarded in connection with all section 3 
covered projects and section 3 covered activities. Each recipient and 
contractor and subcontractor (unless the contract or subcontract awards 
do not meet the threshold specified in Sec.  135.3(a)(3)) may 
demonstrate compliance with the requirements of this part by committing 
to award to section 3 business concerns:
    (1) At least 10 percent of the total dollar amount of all section 3 
covered contracts for building trades work for maintenance, repair, 
modernization or development of public or Indian housing, or for 
building trades work arising in connection with housing rehabilitation, 
housing construction and other public construction; and
    (2) At least three (3) percent of the total dollar amount of all 
other section 3 covered contracts.
    (d) Safe harbor and compliance determinations. (1) In the absence of 
evidence to the contrary, a recipient that meets the minimum numerical 
goals set forth in this section will be considered to have complied with 
the section 3 preference requirements.
    (2) In evaluating compliance under subpart D of this part, a 
recipient that has not met the numerical goals set forth in this section 
has the burden of demonstrating why it was not feasible to meet the 
numerical goals set forth in this section. Such justification may 
include impediments encountered despite actions taken. A recipient or 
contractor also can indicate other economic opportunities, such as those 
listed in Sec.  135.40, which were provided in its efforts to comply 
with section 3 and the requirements of this part.



Sec.  135.32  Responsibilities of the recipient.

    Each recipient has the responsibility to comply with section 3 in 
its own operations, and ensure compliance in the

[[Page 743]]

operations of its contractors and subcontractors. This responsibility 
includes but may not be necessarily limited to:
    (a) Implementing procedures designed to notify section 3 residents 
about training and employment opportunities generated by section 3 
covered assistance and section 3 business concerns about contracting 
opportunities generated by section 3 covered assistance;
    (b) Notifying potential contractors for section 3 covered projects 
of the requirements of this part, and incorporating the section 3 clause 
set forth in Sec.  135.38 in all solicitations and contracts.
    (c) Facilitating the training and employment of section 3 residents 
and the award of contracts to section 3 business concerns by undertaking 
activities such as described in the Appendix to this part, as 
appropriate, to reach the goals set forth in Sec.  135.30. Recipients, 
at their own discretion, may establish reasonable numerical goals for 
the training and employment of section 3 residents and contract award to 
section 3 business concerns that exceed those specified in Sec.  135.30;
    (d) Assisting and actively cooperating with the Assistant Secretary 
in obtaining the compliance of contractors and subcontractors with the 
requirements of this part, and refraining from entering into any 
contract with any contractor where the recipient has notice or knowledge 
that the contractor has been found in violation of the regulations in 24 
CFR part 135.
    (e) Documenting actions taken to comply with the requirements of 
this part, the results of actions taken and impediments, if any.
    (f) A State or county which distributes funds for section 3 covered 
assistance to units of local governments, to the greatest extent 
feasible, must attempt to reach the numerical goals set forth in 135.30 
regardless of the number of local governments receiving funds from the 
section 3 covered assistance which meet the thresholds for applicability 
set forth at 135.3. The State or county must inform units of local 
government to whom funds are distributed of the requirements of this 
part; assist local governments and their contractors in meeting the 
requirements and objectives of this part; and monitor the performance of 
local governments with respect to the objectives and requirements of 
this part.



Sec.  135.34  Preference for section 3 residents in training and
employment opportunities.

    (a) Order of providing preference. Recipients, contractors and 
subcontractors shall direct their efforts to provide, to the greatest 
extent feasible, training and employment opportunities generated from 
the expenditure of section 3 covered assistance to section 3 residents 
in the order of priority provided in paragraph (a) of this section.
    (1) Public and Indian housing programs. In public and Indian housing 
programs, efforts shall be directed to provide training and employment 
opportunities to section 3 residents in the following order of priority:
    (i) Residents of the housing development or developments for which 
the section 3 covered assistance is expended (category 1 residents);
    (ii) Residents of other housing developments managed by the HA that 
is expending the section 3 covered housing assistance (category 2 
residents);
    (iii) Participants in HUD Youthbuild programs being carried out in 
the metropolitan area (or nonmetropolitan county) in which the section 3 
covered assistance is expended (category 3 residents);
    (iv) Other section 3 residents.
    (2) Housing and community development programs. In housing and 
community development programs, priority consideration shall be given, 
where feasible, to:
    (i) Section 3 residents residing in the service area or neighborhood 
in which the section 3 covered project is located (collectively, 
referred to as category 1 residents); and
    (ii) Participants in HUD Youthbuild programs (category 2 residents).
    (iii) Where the section 3 project is assisted under the Stewart B. 
McKinney Homeless Assistance Act (42 U.S.C. 11301 et seq.), homeless 
persons residing in the service area or neighborhood in which the 
section 3 covered project is located shall be given the highest 
priority;

[[Page 744]]

    (iv) Other section 3 residents.
    (3) Recipients of housing assistance programs administered by the 
Assistant Secretary for Housing may, at their own discretion, provide 
preference to residents of the housing development receiving the section 
3 covered assistance within the service area or neighborhood where the 
section 3 covered project is located.
    (4) Recipients of community development programs may, at their own 
discretion, provide priority to recipients of government assistance for 
housing, including recipients of certificates or vouchers under the 
Section 8 housing assistance program, within the service area or 
neighborhood where the section 3 covered project is located.
    (b) Eligibility for preference. A section 3 resident seeking the 
preference in training and employment provided by this part shall 
certify, or submit evidence to the recipient contractor or 
subcontractor, if requested, that the person is a section 3 resident, as 
defined in Sec.  135.5. (An example of evidence of eligibility for the 
preference is evidence of receipt of public assistance, or evidence of 
participation in a public assistance program.)
    (c) Eligibility for employment. Nothing in this part shall be 
construed to require the employment of a section 3 resident who does not 
meet the qualifications of the position to be filled.



Sec.  135.36  Preference for section 3 business concerns in 
contracting opportunities.

    (a) Order of providing preference. Recipients, contractors and 
subcontractors shall direct their efforts to award section 3 covered 
contracts, to the greatest extent feasible, to section 3 business 
concerns in the order of priority provided in paragraph (a) of this 
section.
    (1) Public and Indian housing programs. In public and Indian housing 
programs, efforts shall be directed to award contracts to section 3 
business concerns in the following order of priority:
    (i) Business concerns that are 51 percent or more owned by residents 
of the housing development or developments for which the section 3 
covered assistance is expended, or whose full-time, permanent workforce 
includes 30 percent of these persons as employees (category 1 
businesses);
    (ii) Business concerns that are 51 percent or more owned by 
residents of other housing developments or developments managed by the 
HA that is expending the section 3 covered assistance, or whose full-
time, permanent workforce includes 30 percent of these persons as 
employees (category 2 businesses); or
    (iii) HUD Youthbuild programs being carried out in the metropolitan 
area (or nonmetropolitan county) in which the section 3 covered 
assistance is expended (category 3 businesses).
    (iv) Business concerns that are 51 percent or more owned by section 
3 residents, or whose permanent, full-time workforce includes no less 
than 30 percent section 3 residents (category 4 businesses), or that 
subcontract in excess of 25 percent of the total amount of subcontracts 
to business concerns identified in paragraphs (a)(1)(i) and (a)(1)(ii) 
of this section.
    (2) Housing and community development programs. In housing and 
community development programs, priority consideration shall be given, 
where feasible, to:
    (i) Section 3 business concerns that provide economic opportunities 
for section 3 residents in the service area or neighborhood in which the 
section 3 covered project is located (category 1 businesses); and
    (ii) Applicants (as this term is defined in 42 U.S.C. 12899) 
selected to carry out HUD Youthbuild programs (category 2 businesses);
    (iii) Other section 3 business concerns.
    (b) Eligibility for preference. A business concern seeking to 
qualify for a section 3 contracting preference shall certify or submit 
evidence, if requested, that the business concern is a section 3 
business concern as defined in Sec.  135.5.
    (c) Ability to complete contract. A section 3 business concern 
seeking a contract or a subcontract shall submit evidence to the 
recipient, contractor, or subcontractor (as applicable), if requested, 
sufficient to demonstrate to the satisfaction of the party awarding the 
contract that the business concern is responsible and has the ability to

[[Page 745]]

perform successfully under the terms and conditions of the proposed 
contract. (The ability to perform successfully under the terms and 
conditions of the proposed contract is required of all contractors and 
subcontractors subject to the procurement standards of 24 CFR 85.36 (2 
CFR 200.318(h).) This regulation requires consideration of, among other 
factors, the potential contractor's record in complying with public 
policy requirements. Section 3 compliance is a matter properly 
considered as part of this determination.

[59 FR 33880, June 30, 1994, as amended at 80 FR 75936, Dec. 7, 2015]



Sec.  135.38  Section 3 clause.

    All section 3 covered contracts shall include the following clause 
(referred to as the section 3 clause):

    A. The work to be performed under this contract is subject to the 
requirements of section 3 of the Housing and Urban Development Act of 
1968, as amended, 12 U.S.C. 1701u (section 3). The purpose of section 3 
is to ensure that employment and other economic opportunities generated 
by HUD assistance or HUD-assisted projects covered by section 3, shall, 
to the greatest extent feasible, be directed to low- and very low-income 
persons, particularly persons who are recipients of HUD assistance for 
housing.
    B. The parties to this contract agree to comply with HUD's 
regulations in 24 CFR part 135, which implement section 3. As evidenced 
by their execution of this contract, the parties to this contract 
certify that they are under no contractual or other impediment that 
would prevent them from complying with the part 135 regulations.
    C. The contractor agrees to send to each labor organization or 
representative of workers with which the contractor has a collective 
bargaining agreement or other understanding, if any, a notice advising 
the labor organization or workers' representative of the contractor's 
commitments under this section 3 clause, and will post copies of the 
notice in conspicuous places at the work site where both employees and 
applicants for training and employment positions can see the notice. The 
notice shall describe the section 3 preference, shall set forth minimum 
number and job titles subject to hire, availability of apprenticeship 
and training positions, the qualifications for each; and the name and 
location of the person(s) taking applications for each of the positions; 
and the anticipated date the work shall begin.
    D. The contractor agrees to include this section 3 clause in every 
subcontract subject to compliance with regulations in 24 CFR part 135, 
and agrees to take appropriate action, as provided in an applicable 
provision of the subcontract or in this section 3 clause, upon a finding 
that the subcontractor is in violation of the regulations in 24 CFR part 
135. The contractor will not subcontract with any subcontractor where 
the contractor has notice or knowledge that the subcontractor has been 
found in violation of the regulations in 24 CFR part 135.
    E. The contractor will certify that any vacant employment positions, 
including training positions, that are filled (1) after the contractor 
is selected but before the contract is executed, and (2) with persons 
other than those to whom the regulations of 24 CFR part 135 require 
employment opportunities to be directed, were not filled to circumvent 
the contractor's obligations under 24 CFR part 135.
    F. Noncompliance with HUD's regulations in 24 CFR part 135 may 
result in sanctions, termination of this contract for default, and 
debarment or suspension from future HUD assisted contracts.
    G. With respect to work performed in connection with section 3 
covered Indian housing assistance, section 7(b) of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450e) also applies 
to the work to be performed under this contract. Section 7(b) requires 
that to the greatest extent feasible (i) preference and opportunities 
for training and employment shall be given to Indians, and (ii) 
preference in the award of contracts and subcontracts shall be given to 
Indian organizations and Indian-owned Economic Enterprises. Parties to 
this contract that are subject to the provisions of section 3 and 
section 7(b) agree to comply with section 3 to the maximum extent 
feasible, but not in derogation of compliance with section 7(b).



Sec.  135.40  Providing other economic opportunities.

    (a) General. In accordance with the findings of the Congress, as 
stated in section 3, that other economic opportunities offer an 
effective means of empowering low-income persons, a recipient is 
encouraged to undertake efforts to provide to low-income persons 
economic opportunities other than training, employment, and contract 
awards, in connection with section 3 covered assistance.
    (b) Other training and employment related opportunities. Other 
economic opportunities to train and employ section 3 residents include, 
but need not be limited to, use of ``upward mobility'', ``bridge'' and 
trainee positions to fill vacancies; hiring section 3 residents in

[[Page 746]]

management and maintenance positions within other housing developments; 
and hiring section 3 residents in part-time positions.
    (c) Other business related economic opportunities. (l) A recipient 
or contractor may provide economic opportunities to establish, stabilize 
or expand section 3 business concerns, including micro-enterprises. Such 
opportunities include, but are not limited to the formation of section 3 
joint ventures, financial support for affiliating with franchise 
development, use of labor only contracts for building trades, purchase 
of supplies and materials from housing authority resident-owned 
businesses, purchase of materials and supplies from PHA resident-owned 
businesses and use of procedures under 24 CFR part 963 regarding HA 
contracts to HA resident-owned businesses. A recipient or contractor may 
employ these methods directly or may provide incentives to non-section 3 
businesses to utilize such methods to provide other economic 
opportunities to low-income persons.
    (2) A section 3 joint venture means an association of business 
concerns, one of which qualifies as a section 3 business concern, formed 
by written joint venture agreement to engage in and carry out a specific 
business venture for which purpose the business concerns combine their 
efforts, resources, and skills for joint profit, but not necessarily on 
a continuing or permanent basis for conducting business generally, and 
for which the section 3 business concern:
    (i) Is responsible for a clearly defined portion of the work to be 
performed and holds management responsibilities in the joint venture; 
and
    (ii) Performs at least 25 percent of the work and is contractually 
entitled to compensation proportionate to its work.

Subpart C [Reserved]



                Subpart D_Complaint and Compliance Review



Sec.  135.70  General.

    (a) Purpose. The purpose of this subpart is to establish the 
procedures for handling complaints alleging noncompliance with the 
regulations of this part, and the procedures governing the Assistant 
Secretary's review of a recipient's or contractor's compliance with the 
regulations in this part.
    (b) Definitions. For purposes of this subpart:
    (1) Complaint means an allegation of noncompliance with regulations 
of this part made in the form described in Sec.  135.76(d).
    (2) Complainant means the party which files a complaint with the 
Assistant Secretary alleging that a recipient or contractor has failed 
or refused to comply with the regulations in this part.
    (3) Noncompliance with section 3 means failure by a recipient or 
contractor to comply with the requirements of this part.
    (4) Respondent means the recipient or contractor against which a 
complaint of noncompliance has been filed. The term ``recipient'' shall 
have the meaning set forth in Sec.  135.7, which includes PHA and IHA.



Sec.  135.72  Cooperation in achieving compliance.

    (a) The Assistant Secretary recognizes that the success of ensuring 
that section 3 residents and section 3 business concerns have the 
opportunity to apply for jobs and to bid for contracts generated by 
covered HUD financial assistance depends upon the cooperation and 
assistance of HUD recipients and their contractors and subcontractors. 
All recipients shall cooperate fully and promptly with the Assistant 
Secretary in section 3 compliance reviews, in investigations of 
allegations of noncompliance made under Sec.  135.76, and with the 
distribution and collection of data and information that the Assistant 
Secretary may require in connection with achieving the economic 
objectives of section 3.
    (b) The recipient shall refrain from entering into a contract with 
any contractor after notification to the recipient by HUD that the 
contractor has been found in violation of the regulations in this part. 
The provisions of 2 CFR part 2424 apply to the employment, engagement of 
services, awarding of contracts, or funding of any contractors or 
subcontractors during any

[[Page 747]]

period of debarment, suspension, or otherwise ineligible status.

[59 FR 33880, June 30, 1994, as amended at 72 FR 73493, Dec. 27, 2007]



Sec.  135.74  Section 3 compliance review procedures.

    (a) Compliance reviews by Assistant Secretary. The Assistant 
Secretary shall periodically conduct section 3 compliance reviews of 
selected recipients and contractors to determine whether these 
recipients are in compliance with the regulations in this part.
    (b) Form of compliance review. A section 3 compliance review shall 
consist of a comprehensive analysis and evaluation of the recipient's or 
contractor's compliance with the requirements and obligations imposed by 
the regulations of this part, including an analysis of the extent to 
which section 3 residents have been hired and section 3 business 
concerns have been awarded contracts as a result of the methods 
undertaken by the recipient to achieve the employment, contracting and 
other economic objectives of section 3.
    (c) Where compliance review reveals noncompliance with section 3 by 
recipient or contractor. Where the section 3 compliance review reveals 
that a recipient or contractor has not complied with section 3, the 
Assistant Secretary shall notify the recipient or contractor of its 
specific deficiencies in compliance with the regulations of this part, 
and shall advise the recipient or contractor of the means by which these 
deficiencies may be corrected. HUD shall conduct a follow-up review with 
the recipient or contractor to ensure that action is being taken to 
correct the deficiencies.
    (d) Continuing noncompliance by recipient or contractor. A 
continuing failure or refusal by the recipient or contractor to comply 
with the regulations in this part may result in the application of 
sanctions specified in the contract through which HUD assistance is 
provided, or the application of sanctions specified in the regulations 
governing the HUD program under which HUD financial assistance is 
provided. HUD will notify the recipient of any continuing failure or 
refusal by the contractor to comply with the regulations in this part 
for possible action under any procurement contract between the recipient 
and the contractor. Where appropriate, debarment, suspension, and 
limited denial of participation may be applied to the recipient or the 
contractor, pursuant to HUD's regulations at 2 CFR part 2424.
    (e) Conducting compliance review before the award of assistance. 
Section 3 compliance reviews may be conducted before the award of 
contracts, and especially where the Assistant Secretary has reasonable 
grounds to believe that the recipient or contractor will be unable or 
unwilling to comply with the regulations in this part.
    (f) Consideration of complaints during compliance review. Complaints 
alleging noncompliance with section 3, as provided in Sec.  135.76, may 
also be considered during any compliance review conducted to determine 
the recipient's conformance with regulations in this part.

[59 FR 33880, June 30, 1994, as amended at 72 FR 73493, Dec. 27, 2007]



Sec.  135.76  Filing and processing complaints.

    (a) Who may file a complaint. The following individuals and business 
concerns may, personally or through an authorized representative, file 
with the Assistant Secretary a complaint alleging noncompliance with 
section 3:
    (1) Any section 3 resident on behalf of himself or herself, or as a 
representative of persons similarly situated, seeking employment, 
training or other economic opportunities generated from the expenditure 
of section 3 covered assistance with a recipient or contractor, or by a 
representative who is not a section 3 resident but who represents one or 
more section 3 residents;
    (2) Any section 3 business concern on behalf of itself, or as a 
representative of other section 3 business concerns similarly situated, 
seeking contract opportunities generated from the expenditure of section 
3 covered assistance from a recipient or contractor, or by an individual 
representative of section 3 business concerns.
    (b) Where to file a complaint. A complaint must be filed with the 
Assistant Secretary for Fair Housing and Equal Opportunity, Department 
of Housing and Urban Development, Washington, DC, 20410.

[[Page 748]]

    (c) Time of filing. (1) A complaint must be received not later than 
180 days from the date of the action or omission upon which the 
complaint is based, unless the time for filing is extended by the 
Assistant Secretary for good cause shown.
    (2) Where a complaint alleges noncompliance with section 3 and the 
regulations of this part that is continuing, as manifested in a number 
of incidents of noncompliance, the complaint will be timely if filed 
within 180 days of the last alleged occurrence of noncompliance.
    (3) Where a complaint contains incomplete information, the Assistant 
Secretary shall request the needed information from the complainant. In 
the event this information is not furnished to the Assistant Secretary 
within sixty (60) days of the date of the request, the complaint may be 
closed.
    (d) Contents of complaint--(1) Written complaints. Each complaint 
must be in writing, signed by the complainant, and include:
    (i) The complainant's name and address;
    (ii) The name and address of the respondent;
    (iii) A description of the acts or omissions by the respondent that 
is sufficient to inform the Assistant Secretary of the nature and date 
of the alleged noncompliance.
    (iv) A complainant may provide information to be contained in a 
complaint by telephone to HUD or any HUD Field Office, and HUD will 
reduce the information provided by telephone to writing on the 
prescribed complaint form and send the form to the complainant for 
signature.
    (2) Amendment of complaint. Complaints may be reasonably and fairly 
amended at any time. Such amendments may include, but are not limited 
to, amendments to cure, technical defects or omissions, including 
failure to sign or affirm a complaint, to clarify or amplify the 
allegations in a complaint, or to join additional or substitute 
respondents. Except for the purposes of notifying respondents, amended 
complaints will be considered as having been made as of the original 
filing date.
    (e) Resolution of complaint by recipient. (1) Within ten (10) days 
of timely filing of a complaint that contains complete information (in 
accordance with paragraphs (c) and (d) of this section), the Assistant 
Secretary shall determine whether the complainant alleges an action or 
omission by a recipient or the recipient's contractor that if proven 
qualifies as noncompliance with section 3. If a determination is made 
that there is an allegation of noncompliance with section 3, the 
complaint shall be sent to the recipient for resolution.
    (2) If the recipient believes that the complaint lacks merit, the 
recipient must notify the Assistant Secretary in writing of this 
recommendation with supporting reasons, within 30 days of the date of 
receipt of the complaint. The determination that a complaint lacks merit 
is reserved to the Assistant Secretary.
    (3) If the recipient determines that there is merit to the 
complaint, the recipient will have sixty (60) days from the date of 
receipt of the complaint to resolve the matter with the complainant. At 
the expiration of the 60-day period, the recipient must notify the 
Assistant Secretary in writing whether a resolution of the complaint has 
been reached. If resolution has been reached, the notification must be 
signed by both the recipient and the complainant, and must summarize the 
terms of the resolution reached between the two parties.
    (4) Any request for an extension of the 60-day period by the 
recipient must be submitted in writing to the Assistant Secretary, and 
must include a statement explaining the need for the extension.
    (5) If the recipient is unable to resolve the complaint within the 
60-day period (or more if extended by the Assistant Secretary), the 
complaint shall be referred to the Assistant Secretary for handling.
    (f) Informal resolution of complaint by Assistant Secretary--(1) 
Dismissal of complaint. Upon receipt of the recipient's written 
recommendation that there is no merit to the complaint, or upon failure 
of the recipient and complainant to reach resolution, the Assistant 
Secretary shall review the complaint to determine whether it presents a 
valid

[[Page 749]]

allegation of noncompliance with section 3. The Assistant Secretary may 
conduct further investigation if deemed necessary. Where the complaint 
fails to present a valid allegation of noncompliance with section 3, the 
Assistant Secretary will dismiss the complaint without further action. 
The Assistant Secretary shall notify the complainant of the dismissal of 
the complaint and the reasons for the dismissal.
    (2) Informal resolution. Where the allegations in a complaint on 
their face, or as amplified by the statements of the complainant, 
present a valid allegation of noncompliance with section 3, the 
Assistant Secretary will attempt, through informal methods, to obtain a 
voluntary and just resolution of the complaint. Where attempts to 
resolve the complaint informally fail, the Assistant Secretary will 
impose a resolution on the recipient and complainant. Any resolution 
imposed by the Assistant Secretary will be in accordance with 
requirements and procedures concerning the imposition of sanctions or 
resolutions as set forth in the regulations governing the HUD program 
under which the section 3 covered assistance was provided.
    (3) Effective date of informal resolution. The imposed resolution 
will become effective and binding at the expiration of 15 days following 
notification to recipient and complainant by certified mail of the 
imposed resolution, unless either party appeals the resolution before 
the expiration of the 15 days. Any appeal shall be in writing to the 
Secretary and shall include the basis for the appeal.
    (g) Sanctions. Sanctions that may be imposed on recipients that fail 
to comply with the regulations of this part include debarment, 
suspension and limited denial of participation in HUD programs.
    (h) Investigation of complaint. The Assistant Secretary reserves the 
right to investigate a complaint directly when, in the Assistant 
Secretary's discretion, the investigation would further the purposes of 
section 3 and this part.
    (i) Intimidatory or retaliatory acts prohibited. No recipient or 
other person shall intimidate, threaten, coerce, or discriminate against 
any person or business because the person or business has made a 
complaint, testified, assisted or participated in any manner in an 
investigation, proceeding, or hearing under this part. The identity of 
complainants shall be kept confidential except to the extent necessary 
to carry out the purposes of this part, including the conduct of any 
investigation, hearing or judicial proceeding arising thereunder.
    (j) Judicial relief. Nothing in this subpart D precludes a section 3 
resident or section 3 business concerning from exercising the right, 
which may otherwise be available, to seek redress directly through 
judicial procedures.

(Approved by the Office of Management and Budget under control number 
2529-0043)



                  Subpart E_Reporting and Recordkeeping



Sec.  135.90  Reporting.

    Each recipient which receives directly from HUD financial assistance 
that is subject to the requirements of this part shall submit to the 
Assistant Secretary an annual report in such form and with such 
information as the Assistant Secretary may request, for the purpose of 
determining the effectiveness of section 3. Where the program providing 
the section 3 covered assistance requires submission of an annual 
performance report, the section 3 report will be submitted with that 
annual performance report. If the program providing the section 3 
covered assistance does not require an annual performance report, the 
section 3 report is to be submitted by January 10 of each year or within 
10 days of project completion, whichever is earlier. All reports 
submitted to HUD in accordance with the requirements of this part will 
be made available to the public.

(Approved by the Office of Management and Budget under control number 
2529-0043)



Sec.  135.92  Recordkeeping and access to records.

    HUD shall have access to all records, reports, and other documents 
or items of the recipient that are maintained to demonstrate compliance 
with the requirements of this part, or that are

[[Page 750]]

maintained in accordance with the regulations governing the specific HUD 
program under which section 3 covered assistance is provided or 
otherwise made available to the recipient or contractor.



                        Sec. Appendix to Part 135

I. Examples of Efforts To Offer Training and Employment Opportunities to 
                           Section 3 Residents

    (1) Entering into ``first source'' hiring agreements with 
organizations representing Section 3 residents.
    (2) Sponsoring a HUD-certified ``Step-Up'' employment and training 
program for section 3 residents.
    (3) Establishing training programs, which are consistent with the 
requirements of the Department of Labor, for public and Indian housing 
residents and other section 3 residents in the building trades.
    (4) Advertising the training and employment positions by 
distributing flyers (which identify the positions to be filled, the 
qualifications required, and where to obtain additional information 
about the application process) to every occupied dwelling unit in the 
housing development or developments where category 1 or category 2 
persons (as these terms are defined in Sec.  135.34) reside.
    (5) Advertising the training and employment positions by posting 
flyers (which identify the positions to be filled, the qualifications 
required, and where to obtain additional information about the 
application process) in the common areas or other prominent areas of the 
housing development or developments. For HAs, post such advertising in 
the housing development or developments where category 1 or category 2 
persons reside; for all other recipients, post such advertising in the 
housing development or developments and transitional housing in the 
neighborhood or service area of the section 3 covered project.
    (6) Contacting resident councils, resident management corporations, 
or other resident organizations, where they exist, in the housing 
development or developments where category 1 or category 2 persons 
reside, and community organizations in HUD-assisted neighborhoods, to 
request the assistance of these organizations in notifying residents of 
the training and employment positions to be filled.
    (7) Sponsoring (scheduling, advertising, financing or providing in-
kind services) a job informational meeting to be conducted by an HA or 
contractor representative or representatives at a location in the 
housing development or developments where category 1 or category 2 
persons reside or in the neighborhood or service area of the section 3 
covered project.
    (8) Arranging assistance in conducting job interviews and completing 
job applications for residents of the housing development or 
developments where category 1 or category 2 persons reside and in the 
neighborhood or service area in which a section 3 project is located.
    (9) Arranging for a location in the housing development or 
developments where category 1 persons reside, or the neighborhood or 
service area of the project, where job applications may be delivered to 
and collected by a recipient or contractor representative or 
representatives.
    (10) Conducting job interviews at the housing development or 
developments where category 1 or category 2 persons reside, or at a 
location within the neighborhood or service area of the section 3 
covered project.
    (11) Contacting agencies administering HUD Youthbuild programs, and 
requesting their assistance in recruiting HUD Youthbuild program 
participants for the HA's or contractor's training and employment 
positions.
    (12) Consulting with State and local agencies administering training 
programs funded through JTPA or JOBS, probation and parole agencies, 
unemployment compensation programs, community organizations and other 
officials or organizations to assist with recruiting Section 3 residents 
for the HA's or contractor's training and employment positions.
    (13) Advertising the jobs to be filled through the local media, such 
as community television networks, newspapers of general circulation, and 
radio advertising.
    (14) Employing a job coordinator, or contracting with a business 
concern that is licensed in the field of job placement (preferably one 
of the section 3 business concerns identified in part 135), that will 
undertake, on behalf of the HA, other recipient or contractor, the 
efforts to match eligible and qualified section 3 residents with the 
training and employment positions that the HA or contractor intends to 
fill.
    (15) For an HA, employing section 3 residents directly on either a 
permanent or a temporary basis to perform work generated by section 3 
assistance. (This type of employment is referred to as ``force account 
labor'' in HUD's Indian housing regulations. See 24 CFR 905.102, and 
Sec.  905.201(a)(6).)
    (16) Where there are more qualified section 3 residents than there 
are positions to be filled, maintaining a file of eligible qualified 
section 3 residents for future employment positions.
    (17) Undertaking job counseling, education and related programs in 
association with local educational institutions.
    (18) Undertaking such continued job training efforts as may be 
necessary to ensure the continued employment of section 3 residents

[[Page 751]]

previously hired for employment opportunities.
    (19) After selection of bidders but prior to execution of contracts, 
incorporating into the contract a negotiated provision for a specific 
number of public housing or other section 3 residents to be trained or 
employed on the section 3 covered assistance.
    (20) Coordinating plans and implementation of economic development 
(e.g., job training and preparation, business development assistance for 
residents) with the planning for housing and community development.

    II. Examples of Efforts To Award Contracts to Section 3 Business 
                                Concerns

    (1) Utilizing procurement procedures for section 3 business concerns 
similar to those provided in 24 CFR part 905 for business concerns owned 
by Native Americans (see section III of this Appendix).
    (2) In determining the responsibility of potential contractors, 
consider their record of section 3 compliance as evidenced by past 
actions and their current plans for the pending contract.
    (3) Contacting business assistance agencies, minority contractors 
associations and community organizations to inform them of contracting 
opportunities and requesting their assistance in identifying section 3 
businesses which may solicit bids or proposals for contracts for work in 
connection with section 3 covered assistance.
    (4) Advertising contracting opportunities by posting notices, which 
provide general information about the work to be contracted and where to 
obtain additional information, in the common areas or other prominent 
areas of the housing development or developments owned and managed by 
the HA.
    (5) For HAs, contacting resident councils, resident management 
corporations, or other resident organizations, where they exist, and 
requesting their assistance in identifying category 1 and category 2 
business concerns.
    (6) Providing written notice to all known section 3 business 
concerns of the contracting opportunities. This notice should be in 
sufficient time to allow the section 3 business concerns to respond to 
the bid invitations or request for proposals.
    (7) Following up with section 3 business concerns that have 
expressed interest in the contracting opportunities by contacting them 
to provide additional information on the contracting opportunities.
    (8) Coordinating pre-bid meetings at which section 3 business 
concerns could be informed of upcoming contracting and subcontracting 
opportunities.
    (9) Carrying out workshops on contracting procedures and specific 
contract opportunities in a timely manner so that section 3 business 
concerns can take advantage of upcoming contracting opportunities, with 
such information being made available in languages other than English 
where appropriate.
    (10) Advising section 3 business concerns as to where they may seek 
assistance to overcome limitations such as inability to obtain bonding, 
lines of credit, financing, or insurance.
    (11) Arranging solicitations, times for the presentation of bids, 
quantities, specifications, and delivery schedules in ways to facilitate 
the participation of section 3 business concerns.
    (12) Where appropriate, breaking out contract work items into 
economically feasible units to facilitate participation by section 3 
business concerns.
    (13) Contacting agencies administering HUD Youthbuild programs, and 
notifying these agencies of the contracting opportunities.
    (14) Advertising the contracting opportunities through trade 
association papers and newsletters, and through the local media, such as 
community television networks, newspapers of general circulation, and 
radio advertising.
    (15) Developing a list of eligible section 3 business concerns.
    (16) For HAs, participating in the ``Contracting with Resident-Owned 
Businesses'' program provided under 24 CFR part 963.
    (17) Establishing or sponsoring programs designed to assist 
residents of public or Indian housing in the creation and development of 
resident-owned businesses.
    (18) Establishing numerical goals (number of awards and dollar 
amount of contracts) for award of contracts to section 3 business 
concerns.
    (19) Supporting businesses which provide economic opportunities to 
low income persons by linking them to the support services available 
through the Small Business Administration (SBA), the Department of 
Commerce and comparable agencies at the State and local levels.
    (20) Encouraging financial institutions, in carrying out their 
responsibilities under the Community Reinvestment Act, to provide no or 
low interest loans for providing working capital and other financial 
business needs.
    (21) Actively supporting joint ventures with section 3 business 
concerns.
    (22) Actively supporting the development or maintenance of business 
incubators which assist Section 3 business concerns.

III. Examples of Procurement Procedures That Provide for Preference for 
                       Section 3 Business Concerns

    This Section III provides specific procedures that may be followed 
by recipients and contractors (collectively, referred to as the 
``contracting party'') for implementing the section 3 contracting 
preference for each of

[[Page 752]]

the competitive procurement methods authorized in 2 CFR 200.320.
    (1) Small Purchase Procedures. For section 3 covered contracts 
aggregating no more than $25,000, the methods set forth in this 
paragraph (1) or the more formal procedures set forth in paragraphs (2) 
and (3) of this Section III may be utilized.
    (i) Solicitation. (A) Quotations may be solicited by telephone, 
letter or other informal procedure provided that the manner of 
solicitation provides for participation by a reasonable number of 
competitive sources. At the time of solicitation, the parties must be 
informed of:
--the section 3 covered contract to be awarded with sufficient 
specificity;
--the time within which quotations must be submitted; and
--the information that must be submitted with each quotation.

    (B) If the method described in paragraph (i)(A) is utilized, there 
must be an attempt to obtain quotations from a minimum of three 
qualified sources in order to promote competition. Fewer than three 
quotations are acceptable when the contracting party has attempted, but 
has been unable, to obtain a sufficient number of competitive 
quotations. In unusual circumstances, the contracting party may accept 
the sole quotation received in response to a solicitation provided the 
price is reasonable. In all cases, the contracting party shall document 
the circumstances when it has been unable to obtain at least three 
quotations.
    (ii) Award. (A) Where the section 3 covered contract is to be 
awarded based upon the lowest price, the contract shall be awarded to 
the qualified section 3 business concern with the lowest responsive 
quotation, if it is reasonable and no more than 10 percent higher than 
the quotation of the lowest responsive quotation from any qualified 
source. If no responsive quotation by a qualified section 3 business 
concern is within 10 percent of the lowest responsive quotation from any 
qualified source, the award shall be made to the source with the lowest 
quotation.
    (B) Where the section 3 covered contract is to be awarded based on 
factors other than price, a request for quotations shall be issued by 
developing the particulars of the solicitation, including a rating 
system for the assignment of points to evaluate the merits of each 
quotation. The solicitation shall identify all factors to be considered, 
including price or cost. The rating system shall provide for a range of 
15 to 25 percent of the total number of available rating points to be 
set aside for the provision of preference for section 3 business 
concerns. The purchase order shall be awarded to the responsible firm 
whose quotation is the most advantageous, considering price and all 
other factors specified in the rating system.
    (2) Procurement by sealed bids (Invitations for Bids). Preference in 
the award of section 3 covered contracts that are awarded under a sealed 
bid (IFB) process may be provided as follows:
    (i) Bids shall be solicited from all businesses (section 3 business 
concerns, and non-section 3 business concerns). An award shall be made 
to the qualified section 3 business concern with the highest priority 
ranking and with the lowest responsive bid if that bid--
    (A) is within the maximum total contract price established in the 
contracting party's budget for the specific project for which bids are 
being taken, and
    (B) is not more than ``X'' higher than the total bid price of the 
lowest responsive bid from any responsible bidder. ``X'' is determined 
as follows:

------------------------------------------------------------------------
                                                  x = lesser of:
------------------------------------------------------------------------
When the lowest responsive bid is less   10% of that bid or $9,000.
 than $100,000.
When the lowest responsive bid is:
    At least $100,000, but less than     9% of that bid, or $16,000.
     $200,000.
    At least $200,000, but less than     8% of that bid, or $21,000.
     $300,000.
    At least $300,000, but less than     7% of that bid, or $24,000.
     $400,000.
    At least $400,000, but less than     6% of that bid, or $25,000.
     $500,000.
    At least $500,000, but less than $1  5% of that bid, or $40,000.
     million.
    At least $1 million, but less than   4% of that bid, or $60,000.
     $2 million.
    At least $2 million, but less than   3% of that bid, or $80,000.
     $4 million.
    At least $4 million, but less than   2% of that bid, or $105,000.
     $7 million.
    $7 million or more.................  1\1/2\% of the lowest
                                          responsive bid, with no dollar
                                          limit.
------------------------------------------------------------------------

    (ii) If no responsive bid by a section 3 business concern meets the 
requirements of paragraph (2)(i) of this section, the contract shall be 
awarded to a responsible bidder with the lowest responsive bid.
    (3) Procurement under the competitive proposals method of 
procurement (Request for Proposals (RFP)). (i) For contracts and 
subcontracts awarded under the competitive proposals method of 
procurement (2 CFR 200.320), a Request for Proposals (RFP) shall 
identify all evaluation factors (and their relative importance) to be 
used to rate proposals.

[[Page 753]]

    (ii) One of the evaluation factors shall address both the preference 
for section 3 business concerns and the acceptability of the strategy 
for meeting the greatest extent feasible requirement (section 3 
strategy), as disclosed in proposals submitted by all business concerns 
(section 3 and non-section 3 business concerns). This factor shall 
provide for a range of 15 to 25 percent of the total number of available 
points to be set aside for the evaluation of these two components.
    (iii) The component of this evaluation factor designed to address 
the preference for section 3 business concerns must establish a 
preference for these business concerns in the order of priority ranking 
as described in 24 CFR 135.36.
    (iv) With respect to the second component (the acceptability of the 
section 3 strategy), the RFP shall require the disclosure of the 
contractor's section 3 strategy to comply with the section 3 training 
and employment preference, or contracting preference, or both, if 
applicable. A determination of the contractor's responsibility will 
include the submission of an acceptable section 3 strategy. The contract 
award shall be made to the responsible firm (either section 3 or non-
section 3 business concern) whose proposal is determined most 
advantageous, considering price and all other factors specified in the 
RFP.

[59 FR 33880, June 30, 1994, as amended at 80 FR 75936, Dec. 7, 2015]



PART 146_NONDISCRIMINATION ON THE BASIS OF AGE IN HUD PROGRAMS OR
ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE--Table of Contents



                            Subpart A_General

Sec.
146.1 Purpose of the Age Discrimination Act of 1975.
146.3 Purpose of HUD's age discrimination regulation.
146.5 Applicability of part.
146.7 Definitions.

         Subpart B_Standards for Determining Age Discrimination

146.11 Scope of subpart.
146.13 Rules against age discrimination.

                   Subpart C_Duties of HUD Recipients

146.21 General responsibilities.
146.23 Notice of subrecipients.
146.25 Assurance of compliance and recipient assessment of age 
          distinctions.
146.27 Information requirements.

     Subpart D_Investigation, Settlement, and Enforcement Procedures

146.31 Compliance reviews.
146.33 Complaints.
146.35 Mediation.
146.37 Investigation.
146.39 Enforcement procedures.
146.41 Prohibition against intimidation or retaliation.
146.43 Hearings, decisions, post-termination proceedings.
146.45 Exhaustion of administrative remedies.
146.47 Remedial and affirmative action by recipients.
146.49 Alternate funds disbursal procedure.

    Authority: 42 U.S.C. 3535(d) and 6103.

    Source: 51 FR 45266, Dec. 17, 1986, unless otherwise noted.



                            Subpart A_General



Sec.  146.1  Purpose of the Age Discrimination Act of 1975.

    The Age Discrimination Act of 1975 (the Act) prohibits 
discrimination on the basis of age in programs or activities receiving 
Federal financial assistance. The Act, however, permits federally 
assisted programs and activities and recipients of Federal funds to 
continue to use certain age distinctions and factors other than age 
which meet the requirements of the Act and this part.



Sec.  146.3  Purpose of HUD's age discrimination regulation.

    The purpose of this part is to state HUD's policies and procedures 
under the Age Discrimination Act of 1975, consistent with the 
government-wide age discrimination regulation contained at 45 CFR part 
90.



Sec.  146.5  Applicability of part.

    This part applies to each program or activity that receives Federal 
financial assistance provided by HUD.



Sec.  146.7  Definitions.

    The terms HUD and Secretary are defined in 24 CFR part 5.
    Act means the Age Discrimination Act of 1975, 42 U.S.C. 6101-07.
    Action means any act, activity, policy, rule, standard, or method of 
administration or the use of any policy,

[[Page 754]]

rule, standard, or method of administration.
    Age means how old a person is, or the number of elapsed years from 
the date of a person's birth.
    Age distinction means any action using age or an age-related term.
    Age-related term means a word or words which necessarily imply a 
particular age or range of ages (for example, children, adult, older 
persons, but not student).
    Federal financial assistance means any grant, entitlement, loan, 
cooperative agreement, contract (other than a procurement contract or a 
contract of insurance or guaranty), or any other arrangement by which 
HUD provides or otherwise makes available assistance in the form of:
    (a) Funds;
    (b) Service of Federal personnel; or
    (c) Real or personal property or any interest in or use of property, 
including:
    (1) Transfers or leases of property for less than fair market value 
or for reduced consideration; and
    (2) Proceeds from a subsequent transfer or lease of property if the 
Federal share of its fair market value is not returned to the Federal 
government.
    Recipient means any State or its political subdivisions; any 
instrumentality of a State or its political subdivisions; any public or 
private agency; any Indian tribe or Alaskan Native Village, institution, 
organization, or other entity; or any person to which Federal financial 
assistance is extended, directly or through another recipient. Recipient 
includes any successor, assignee, or transferee, but does not include 
the ultimate beneficiary of the assistance.
    Subrecipient means any of the entities in the definition of 
recipient to which a recipient extends or passes on Federal financial 
assistance. A subrecipient is regarded as a recipient of Federal 
financial assistance and has all the duties of a recipient set out in 
this part.
    United States means the several States, the District of Columbia, 
Puerto Rico, the Virgin Islands, American Samoa, Guam, Wake Island, the 
Canal Zone, the Trust Territory of the Pacific Islands, the Northern 
Marianas, and the territories and possessions of the United States.

[51 FR 45266, Dec. 17, 1986, as amended at 61 FR 5206, Feb. 9, 1996]



         Subpart B_Standards for Determining Age Discrimination



Sec.  146.11  Scope of subpart.

    This subpart contains the standards that HUD will use to determine 
whether an age distinction, or a factor other than age that may have a 
disproportionate effect on persons of different ages, is prohibited.



Sec.  146.13  Rules against age discrimination.

    (a) The rules stated in this paragraph are limited by the exceptions 
contained in paragraphs (b) and (c) of this section.
    (1) General rule. No person in the United States shall, on the basis 
of age, be excluded from participation in, be denied the benefits of, or 
be subjected to discrimination under, any program or activity receiving 
Federal financial assistance.
    (2) Specific rules. A recipient may not, in any program or activity 
receiving Federal financial assistance, directly or through contracting, 
licensing, or other arrangements, use age distinctions or take any other 
actions that have the effect, on the basis of age, of:
    (i) Excluding individuals from, denying them the benefits of, or 
subjecting them to discrimination under, a program or activity receiving 
Federal financial assistance; or
    (ii) Denying or limiting individuals in their opportunity to 
participate in any program or activity receiving Federal financial 
assistance.
    (3) The specific forms of age discrimination listed in paragraph 
(a)(2) of this section do not necessarily constitute a complete list.
    (b) Exceptions for normal operation or statutory objective of any 
program or activity. A recipient is permitted to take an action 
otherwise prohibited by paragraph (a) of this section if the action 
reasonably takes into account age as a factor necessary to the normal 
operation or the achievement of any statutory objective of a program or 
activity.

[[Page 755]]

An action reasonably takes into account age as a factor necessary to the 
normal operation or the achievement of any statutory objective of a 
program or activity, if:
    (1) Age is used as a measure or approximation of one or more other 
characteristics; and
    (2) The other characteristics must be measured or approximated in 
order for the normal operation of the program or activity to continue, 
or to achieve any statutory objective of the program or activity; and
    (3) The other characteristics can be reasonably measured or 
approximated by the use of age; and
    (4) The other characteristics are impractical to measure directly on 
an individual basis.
    (c) Exceptions for reasonable factors other than age. A recipient is 
permitted to take action otherwise prohibited by paragraph (a) of this 
section if the action is based on a factor other than age, even though 
that action may have a disproportionate effect on persons of different 
ages. An action may be based on a factor other than age only if the 
factor bears a direct and substantial relationship to the normal 
operation of the program or activity or the achievement of a statutory 
objective.
    (d) Burden of proof. The burden of proving that an age distinction 
or other action falls within an exception described in paragraph (b) or 
(c) of this section is on the recipient of Federal financial assistance.
    (e) For the purposes of paragraphs (b) and (c), normal operation 
means the operation of a program or activity without significant changes 
that would impair its ability to meet its statutory objectives. 
Statutory objectives means any purpose of a program or activity 
expressly stated in any Federal, State, or local statute adopted by an 
elected, general purpose legislative body.
    (f) Notwithstanding paragraph (b) of this section, if a recipient 
operating a program provides special benefits to the elderly or to 
children, such use of age distinctions shall be presumed to be necessary 
to the normal operation of the program.



                   Subpart C_Duties of HUD Recipients



Sec.  146.21  General responsibilities.

    Each recipient has primary responsibility to ensure that its 
programs and activities that receive Federal financial assistance from 
HUD comply with the provisions of the Act, the government-wide 
regulation, and this part, and shall take steps to eliminate violations 
of the Act. A recipient also has responsibility to maintain records, 
provide information, and to afford HUD access to its records to the 
extent HUD finds necessary to determine whether a program or activity 
receiving Federal financial assistance from HUD is in compliance with 
the Act and this part.

(Approved by the Office of Management and Budget under control number 
2529-0030)

[51 FR 45266, Dec. 17, 1986, as amended at 52 FR 7408, Mar. 11, 1987]



Sec.  146.23  Notice of subrecipients.

    Whenever a recipient passes Federal financial assistance from HUD to 
subrecipients, the recipient shall provide the subrecipient with written 
notice of its obligations under this part and the recipient will remain 
responsible for the subrecipient's compliance with respect to programs 
and activities receiving Federal financial assistance from HUD.



Sec.  146.25  Assurance of compliance and recipient assessment of
age distinctions.

    (a) Each recipient of Federal financial assistance from HUD shall 
sign a written assurance as specified by HUD that it will comply with 
the Act and this part with respect to programs and activities receiving 
Federal financial assistance from HUD.
    (b) As part of a compliance review under Sec.  146.31 or an 
investigation under Sec.  146.37, HUD may require a recipient employing 
the equivalent of 15 or more employees to complete, in a manner 
specified by the Secretary or Secretary's designee, a written self-
evaluation of any age distinction imposed in its program or activity 
receiving Federal financial assistance from HUD, so that HUD may have to 
assess the recipient's compliance with the Act.

[[Page 756]]

Whenever an assessment indicates a violation of the Act or this part, 
the recipient shall take corrective action to remedy the violation.

(Approved by the Office of Management and Budget under control number 
2529-0030)

[51 FR 45266, Dec. 17, 1986, as amended at 52 FR 7408, Mar. 11, 1987]



Sec.  146.27  Information requirements.

    In order to make it possible for HUD to determine whether recipients 
are in compliance with the Act and this part, each recipient shall:
    (a) Keep records in a form and containing information that HUD 
determines is necessary;
    (b) Make information available to HUD upon request;
    (c) Permit reasonable access by HUD to the books, records, accounts 
and other recipient facilities and sources of information.

(Approved by the Office of Management and Budget under control number 
2529-0030)

[51 FR 45266, Dec. 17, 1986, as amended at 52 FR 7408, Mar. 11, 1987]



     Subpart D_Investigation, Settlement, and Enforcement Procedures



Sec.  146.31  Compliance reviews.

    (a) HUD may conduct pre-award reviews to determine whether programs 
or activities submitted for HUD assistance are consistent with the age 
distinctions set forth at Sec.  146.13(b).
    (b) If a pre-award review indicates that the proposed programs or 
activities are not consistent with the age distinctions set forth at 
Sec.  146.13(b), the application will be returned to the applicant for 
additional information or clarification or for correction consistent 
with this part.
    (c) HUD may conduct compliance reviews of recipients that will 
enable it to investigate and correct violations of this part. HUD may 
conduct these reviews even in the absence of a complaint against a 
recipient. The review may be as comprehensive as necessary for HUD to 
determine whether a violation has occurred.
    (d) If a compliance review indicates a violation, HUD will attempt 
to achieve voluntary compliance. If voluntary compliance cannot be 
achieved, HUD may begin enforcement procedures as provided in Sec.  
146.39.



Sec.  146.33  Complaints.

    (a) Any person, individually or as a member of a class or on behalf 
of others, may file a complaint with HUD alleging discrimination 
prohibited by the Act. A complainant shall file a complaint within 180 
days from the date the complainant first had knowledge of the alleged 
act of discrimination. However, for good cause, HUD may extend this time 
limit. The filing date for a complaint will be the date upon which the 
complaint is deemed sufficient to be processed.
    (b) HUD shall facilitate the filing of complaints and shall take the 
following measures:
    (1) Accept as a sufficient complaint any written legible statement 
which is signed by the complainant and which identifies the parties 
involved, the date the complainant first had knowledge of the alleged 
violation, and describes generally the alleged prohibited action or 
practice;
    (2) Freely permit a complainant to add information to the complaint 
to meet the requirements of a sufficient complaint;
    (3) Widely disseminate information regarding the obligations of 
recipients under the Act and this part;
    (4) Notify the complainant and the recipient of their rights under 
the complaint process, including the right to have a representative at 
all stages of the complaint process; and
    (5) Notify the complainant and the recipient of their right to 
contact HUD for information and assistance regarding the complaint 
resolution process.
    (c) HUD will return to the complainant any complaint determined to 
be outside the coverage of this part, and shall state the reasons why it 
is outside the coverage.

(Approved by the Office of Management and Budget under control number 
2529-0030)

[51 FR 45266, Dec. 17, 1986, as amended at 52 FR 7408, Mar. 11, 1987]

[[Page 757]]



Sec.  146.35  Mediation.

    (a) HUD shall refer to the Federal Mediation and Conciliation 
Service, a mediation agency designated by the Secretary of Health and 
Human Services, all complaints that:
    (1) Fall within the coverage of this part, unless the age 
distinction complained of is clearly with an exception; and
    (2) Contain all information necessary for further processing.
    (b) Both the complainant and the recipient shall participate in the 
mediation process to the extent necessary to reach an agreement or make 
an informal judgment that an agreement is not possible. There should be 
at least one meeting by each party with the mediator during the 
mediation process. However, the recipient and the complainant need not 
meet with the mediator at the same time.
    (c) If the complainant and the recipient reach an agreement, the 
mediator shall prepare a written statement of the agreement and have the 
complainant and recipient sign it. The mediator shall send a copy of the 
agreement to HUD. HUD will take no further action on the complaint 
unless the complainant or the recipient fails to comply with the 
agreement.
    (d) The mediator shall protect the confidentiality of information 
obtained in the course of the mediation process. No mediator shall 
testify in any adjudicative proceeding, produce any document, or 
otherwise disclose any information obtained in the course of the 
mediation process without the prior approval of the head of the 
mediation agency.
    (e) HUD shall use the mediation process for a maximum of 60 days 
after receiving a complaint. Mediation ends if:
    (1) 60 days elapse from the time HUD receives the complaint; or
    (2) Before the end of the 60-day period, an agreement is reached; or
    (3) Before the end of the 60-day period, the mediator determines 
that an agreement cannot be reached.

This 60-day period may be extended by the mediator, with the concurrence 
of HUD, for not more than an additional 30 days if the mediator 
determines that it is likely that an agreement will be reached during 
such extended period.



Sec.  146.37  Investigation.

    (a) Investigation and settlement following mediation. (1) HUD shall 
investigate complaints that are unresolved after mediation or are 
reopened because of an alleged violation of a mediation agreement.
    (2) In the investigation of complaints filed under this part, HUD 
will establish facts through such methods as discussion with the 
complainant and recipient and the review of documents in the possession 
of either party. HUD may also seek the assistance of any applicable 
State agency. Where possible, HUD will settle the complaint on terms 
that are mutually agreeable to the parties.
    (3) Settlements shall be in writing and signed by the parties and by 
an authorized HUD official.
    (4) A settlement shall not affect the initiation or continuation of 
any other enforcement effort of HUD, including compliance reviews or 
investigation of other complaints involving the recipient.
    (5) A settlement reached under this paragraph (a) of this section is 
an agreement to resolve an alleged violation of the Act to the 
satisfaction of the parties involved, and does not constitute a finding 
of discrimination against the recipient.
    (b) Failure of settlement. If HUD cannot resolve the complaint 
through settlement, it may make a formal determination that the Act or 
this part has been violated and begin enforcement procedures, as 
provided in Sec.  146.39. HUD shall inform the recipient and complainant 
in writing that the matter cannot be resolved through settlement.



Sec.  146.39  Enforcement procedures.

    (a) HUD may enforce the Act this regulation by:
    (1) Termination of a recipient's financial assistance from HUD under 
the program or activity involved, if the recipient has violated the Act 
or this part. The determination of the recipient's violation may be made 
only after a recipient has had an opportunity for a hearing on the 
record before an Administrative Law Judge. If the financial assistance 
consists of a Community Development Block Grant, the requirements of 
section 109(b) of the

[[Page 758]]

Housing and Community Development Act of 1974, 42 U.S.C. 5309, must also 
be satisfied before the termination of financial assistance. Cases 
settled in mediation or before hearing will not involve termination of a 
recipient's Federal financial assistance from HUD.
    (2) Any other means authorized by law, including, but not limited 
to:
    (i) Referral to the Department of Justice for proceedings to enforce 
any rights of the United States or obligations of the recipient created 
by the Act or this part;
    (ii) Use of any requirement of, or referral to, any Federal, State 
or local government agency that will have the effect of correcting a 
violation of the Act or this part.
    (b) Whenever the Secretary determines that a State or unit of 
general local government which is a recipient of Federal financial 
assistance under Title I of the Housing and Community Development Act of 
1974, 42 U.S.C. 5301-5317, has failed to comply with requirements of the 
Age Discrimination Act or this part with respect to a program or 
activity funded in whole or in part with such assistance, he or she 
shall notify the Governor of such State or the chief executive officer 
of such unit of general local government of the noncompliance and shall 
request the Governor or chief executive officer to secure compliance. If 
within a reasonable period of time, not to exceed 60 days, the Governor 
or chief executive officer fails or refuses to secure compliance, the 
Secretary is authorized to take the action specified in (a) of this 
section, exercise the powers and functions provided for in section 
111(a) of the Housing and Community Act of 1974, 42 U.S.C. 5311(a), or 
take such other action as may be provided by law.
    (c) HUD shall limit any termination under Sec.  146.35 to the 
particular recipient and particular program or activity HUD finds to be 
in violation of this part. HUD shall not base any part of a termination 
on a finding with respect to any program or activity of the recipient 
which does not receive Federal financial assistance from HUD.
    (d) HUD shall take no action under paragraph (a) of this section 
until:
    (1) The Secretary has advised the recipient of its failure to comply 
with the Act or this part and has determined that voluntary compliance 
cannot be achieved.
    (2) Thirty days have elapsed after the Secretary has submitted a 
written report of the circumstances and grounds of the action to the 
committees of the Congress having legislative jurisdiction over the 
Federal program or activity involved. A report shall be filed whenever 
any action is taken under paragraph (a) of this section.
    (e)(1) The Secretary may defer the provision of new Federal 
financial assistance to a recipient when termination proceedings under 
this section are initiated.
    (2) New financial assistance from HUD includes all assistance for 
which HUD requires an application, approval, or submissions under the 
Community Development Block Grant program including renewal or 
continuation of existing activities, or authorization of new activities, 
during the deferral period. New financial assistance from HUD does not 
include increases in funding as a result of changed computation for 
formula awards or assistance approved before the beginning of a hearing 
under this section.
    (3) HUD shall not impose a deferral until the recipient has received 
a notice of an opportunity for a hearing under this section. HUD shall 
not continue a deferral for more than 60 days unless a hearing has begun 
within that time or the time for beginning the hearing has been extended 
by mutual consent of the recipient and the Secretary. HUD shall not 
continue a deferral for more than 30 days after the close of the 
hearing, unless the hearing results in a finding that the recipient has 
violated that Act or this part.



Sec.  146.41  Prohibition against intimidation or retaliation.

    A recipient may not engage in acts of intimidation or retaliation 
against any person who:
    (a) Attempts to assert a right protected by this part; or
    (b) Cooperates in any mediation, investigation, hearing, or other 
part of HUD's investigation, settlement, and enforcement process.

[[Page 759]]



Sec.  146.43  Hearings, decisions, post-termination proceedings.

    The provisions of 24 CFR part 180 apply to HUD enforcement of this 
part.

[61 FR 52218, Oct. 4, 1996]



Sec.  146.45  Exhaustion of administrative remedies.

    (a) A complainant may file a civil action following the exhaustion 
of administrative remedies under the Act. Administrative remedies are 
exhausted if:
    (1) 180 days have elapsed since the complainant filed the complaint 
and HUD had made no finding with regard to the complaint; or
    (2) HUD issues any finding in favor of the recipient.
    (b) If HUD fails to make a finding within 180 days or issues a 
finding in favor of the recipient, HUD shall:
    (1) Promptly advise the complainant of this fact;
    (2) Advise the complainant of his or her right to bring a civil 
action for injunctive relief; and
    (3) Inform the complainant:
    (i) That he or she may bring a civil action only in a United States 
District Court for the district in which the recipient is located or 
transacts business;
    (ii) That a complainant prevailing in a civil action has the right 
to be awarded the costs of the action, including reasonable attorney's 
fees, but that the complainant must demand these costs in the complaint;
    (iii) That before commencing the action, the complainant must give 
30 days' notice by registered mail to the Secretary of HUD, the 
Secretary of Health and Human Services, the Attorney General of the 
United States, and the recipient;
    (iv) That the notice must state: the alleged violation of the Act, 
the relief requested, the court in which the complainant is bringing the 
action, and whether or not attorney's fees are demanded in the event the 
complainant prevails; and
    (v) That the complainant may not bring an action if the same alleged 
violation of the Act by the same recipient is the subject of a pending 
action in any court of the United States.



Sec.  146.47  Remedial and affirmative action by recipients.

    (a) Where the Secretary finds that a recipient has unlawfully 
discriminated on the basis of age, the recipient shall take any action 
that the Secretary may require to overcome the effects of the 
discrimination. If another recipient exercises control over a 
subrecipient that has unlawfully discriminated, the Secretary may 
require both recipients to take remedial action.
    (b) Even in the absence of a finding of discrimination, a recipient 
may take affirmative action to overcome the effects of conditions that 
resulted in limited participation in the recipient's program or activity 
on the basis of age.
    (c) If a recipient operating a program which serves the elderly or 
children in addition to persons of other ages provides special benefits 
to the elderly or children, the provision of those benefits shall be 
presumed to be voluntary affirmative action, provided that it does not 
have the effect of excluding otherwise eligible persons from 
participation in the program.



Sec.  146.49  Alternate funds disbursal procedure.

    (a) Except as otherwise provided in this paragraph and to the extent 
authorized by law, the Secretary may redisburse funds withheld or 
terminated under this part directly to an alternate recipient, including 
any public or non-profit private organization or agency, State or 
political subdivision of the State. Under title I of the Housing and 
Community Development Act of 1974, 42 U.S.C. 5301, funds withheld 
because of a reduction or withdrawal of a recipient's Community 
Development Block Grant must be reallocated in the succeeding fiscal 
year, in accordance with the applicable regulations governing that 
program.
    (b) The Secretary shall require the alternate recipient to 
demonstrate:
    (1) The ability to comply with the regulations; and
    (2) The ability to achieve the goals of the Federal statute 
authorizing the program or activity.

[[Page 760]]



PART 180_CONSOLIDATED HUD HEARING PROCEDURES FOR CIVIL RIGHTS 
MATTERS--Table of Contents



                      Subpart A_General Information

Sec.
180.100 Definitions.
180.105 Scope of rules.

                   Subpart B_Administrative Law Judge

180.200 Designation.
180.205 Authority.
180.210 Withdrawal or disqualification of ALJ.
180.215 Ex parte communications.
180.220 Separation of functions.

                            Subpart C_Parties

180.300 Rights of parties.
180.305 Representation.
180.310 Parties.
180.315 Standards of conduct.

                 Subpart D_Proceedings Prior to Hearing

180.400 Service and filing.
180.405 Time computations.
180.410 Charges under the Fair Housing Act.
180.415 Notice of proposed adverse action regarding Federal financial 
          assistance in non-Fair Housing Act matters.
180.420 Answer.
180.425 Amendments to pleadings.
180.430 Motions.
180.435 Prehearing statements.
180.440 Prehearing conferences.
180.445 Settlement negotiations before a settlement judge.
180.450 Resolution of charge or notice of proposed adverse action.

                           Subpart E_Discovery

180.500 Discovery.
180.505 Supplementation of responses.
180.510 Interrogatories.
180.515 Depositions.
180.520 Use of deposition at hearings.
180.525 Requests for production of documents or things for inspection or 
          other purposes, including physical and mental examinations.
180.530 Requests for admissions.
180.535 Protective orders.
180.540 Motion to compel discovery.
180.545 Subpoenas.

                     Subpart F_Procedures at Hearing

180.600 Date and place of hearing.
180.605 Conduct of hearings.
180.610 Waiver of right to appear.
180.615 Failure of party to appear.
180.620 Evidence.
180.625 Record of hearing.
180.630 Stipulations.
180.635 Written testimony.
180.640 In camera and protective orders.
180.645 Exhibits.
180.650 Public document items.
180.655 Witnesses.
180.660 Closing of record.
180.665 Arguments and briefs.
180.670 Initial decision of ALJ.
180.671 Assessing civil penalties for Fair Housing Act cases.
180.675 Petitions for review.
180.680 Final decisions.

           Subpart G_Post-Final Decision in Fair Housing Cases

180.700 Action upon issuance of a final decision in Fair Housing Act 
          cases.
180.705 Attorney's fees and costs.
180.710 Judicial review of final decision.
180.715 Enforcement of final decision.

      Subpart H_Post-Final Decision in Non-Fair Housing Act Matters

180.800 Post-termination proceedings.
180.805 Judicial review of final decision.

    Authority: 28 U.S.C. 1 note; 29 U.S.C. 794; 42 U.S.C. 2000d-1, 
3535(d), 3601-3619, 5301-5320, and 6103.

    Source: 61 FR 52218, Oct. 4, 1996, unless otherwise noted.



                      Subpart A_General Information



Sec.  180.100  Definitions.

    As used in this part:
    (a) The terms ALJ, Department, Fair Housing Act, General Counsel, 
and HUD are defined in 24 CFR part 5, subpart A.
    (b) The terms Aggrieved Person, Assistant Secretary, Attorney 
General, Discriminatory Housing Practice, Person, and State are defined 
in 24 CFR part 103, subpart A.
    (c) Other terms used in this part are defined as follows:
    Agency has the same meaning as HUD.
    Applicant and Application have the meanings provided in 24 CFR 1.2 
or 24 CFR 8.3, as applicable.
    Charge means the statement of facts issued under 24 CFR 103.405 upon 
which HUD has found reasonable cause to believe that a discriminatory 
housing practice has occurred or is about to occur.

[[Page 761]]

    Complaint means a complaint filed under the statutes covered by this 
part.
    Complainant means the person (including the Assistant Secretary) who 
filed a complaint under the statutes covered by this part.
    Docket Clerk is the docket clerk for HUD's Office of Hearings and 
Appeals, 451 7th Street, SW., Room B-133, Washington, DC 20410. The 
telephone number is 202-254-0000 and the facsimile number is 202-619-
7304.
    Fair Housing Act matters refers to proceedings under this part 
pursuant to the Fair Housing Act and the implementing regulations at 24 
CFR parts 100 and 103.
    Federal financial assistance has the meaning provided in 24 CFR 1.2, 
6.3, 8.3, or 146.7, as applicable.
    Hearing means a trial-type proceeding that involves the submission 
of evidence, either by oral presentation or written submission, and 
briefs and oral arguments on the evidence and applicable law.
    Intervenor is a person entitled by law or permitted by the ALJ to 
participate as a party.
    Non-Fair Housing Act matters refers to proceedings under this part 
pursuant to:
    (1) Title VI of the Civil Rights Act of 1964, as amended, (42 U.S.C. 
2000d-1) and the implementing regulations at 24 CFR part 1;
    (2) Section 504 of the Rehabilitation Act of 1973, as amended, (29 
U.S.C. 794) and the implementing regulations at 24 CFR part 8;
    (3) The Age Discrimination Act of 1975, as amended, (42 U.S.C. 6103) 
and the implementing regulations at 24 CFR part 146; or
    (4) Section 109 of Title I of the Housing and Community Development 
Act of 1974, as amended, (42 U.S.C. 5301-5321) and the implementing 
regulations at 24 CFR part 6.
    Notice of Proposed Adverse Action is the statement of facts issued 
pursuant to a non-Fair Housing Act matter upon which HUD has found 
reason to terminate or refuse to grant or continue Federal financial 
assistance.
    Party is a person who has full participation rights in a proceeding 
under this part.
    Prevailing party has the same meaning as the term has in section 722 
of the Revised Statutes of the United States (42 U.S.C. 1988).
    Recipient has the meaning provided in 24 CFR 1.2, 6.3, 8.3, or 
146.7, as applicable.
    Respondent means the person accused of violating one of the statutes 
covered by this part, including a recipient.
    Secretary means the Secretary of HUD, or to the extent of any 
delegation of authority by the Secretary to act under any of the 
statutory authorities listed in Sec.  180.105(a), any other HUD official 
to whom the Secretary may hereafter delegate such authority.

[61 FR 52218, Oct. 4, 1996, as amended at 64 FR 3801, Jan. 25, 1999; 72 
FR 53879, Sept. 20, 2007; 74 FR 4635, Jan. 26, 2009]



Sec.  180.105  Scope of rules.

    (a) This part contains the rules of practice and procedure 
applicable to administrative proceedings before an ALJ under the 
following authorities:
    (1) The Fair Housing Act (42 U.S.C. 3601-3619) and the implementing 
regulations at 24 CFR parts 100 and 103, where no election to proceed in 
federal district court has been made;
    (2) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-1), 
and the implementing regulations at 24 CFR part 1;
    (3) Section 504 of the Rehabilitation Act of 1973, as amended (29 
U.S.C. 794), and the implementing regulations at 24 CFR part 8;
    (4) The Age Discrimination Act of 1975 (42 U.S.C. 6103), and the 
implementing regulations at 24 CFR part 146; and
    (5) Section 109 of title I of the Housing and Community Development 
Act of 1974 (42 U.S.C. 5301-5321) and implementing regulations at 24 CFR 
part 6.
    (b) In the absence of a specific provision, the Federal Rules of 
Civil Procedure shall serve as a general guide.
    (c) Hearings under this part shall be conducted as expeditiously and 
inexpensively as possible, consistent with the needs and rights of the 
parties to obtain a fair hearing and a complete record.
    (d) Except to the extent that a waiver would otherwise be contrary 
to law, the ALJ may, after adequate notice to all interested persons, 
modify or waive

[[Page 762]]

any of the rules in this part upon a determination that no person will 
be prejudiced and that the ends of justice will be served.
    (e) All pleadings, correspondence, exhibits, transcripts of 
testimony, exceptions, briefs, decisions, and other documents filed in 
any proceeding may be inspected in the Docket Clerk's office during 
regular business hours.

[61 FR 52218, Oct. 4, 1996, as amended at 64 FR 3801, Jan. 25, 1999; 74 
FR 4636, Jan. 26, 2009]



                   Subpart B_Administrative Law Judge



Sec.  180.200  Designation.

    Proceedings under this part shall be presided over by an ALJ 
appointed under 5 U.S.C. 3105.

[61 FR 52218, Oct. 4, 1996, as amended at 73 FR 13723, Mar. 13, 2008]



Sec.  180.205  Authority.

    The ALJ shall have all powers necessary to conduct fair, expeditious 
and impartial hearings, including the power to:
    (a) Administer oaths and affirmations and examine witnesses;
    (b) Rule on offers of proof and receive evidence;
    (c) Take depositions or have depositions taken when the ends of 
justice would be served;
    (d) Regulate the course of the hearing and the conduct of persons at 
the hearing;
    (e) Hold conferences for the settlement or simplification of the 
issues by consent of the parties;
    (f) Rule on motions, procedural requests, and similar matters;
    (g) Make and issue initial decisions;
    (h) Impose appropriate sanctions against any person failing to obey 
an order, refusing to adhere to reasonable standards of orderly and 
ethical conduct, or refusing to act in good faith;
    (i) Issue subpoenas if authorized by law; and
    (j) Exercise any other powers necessary and appropriate for the 
purpose and conduct of the proceeding as authorized by the rules in this 
part or in conformance with statute, including 5 U.S.C. 551-59.



Sec.  180.210  Withdrawal or disqualification of ALJ.

    (a) Disqualification. If an ALJ finds that there is a basis for his/
her disqualification in a proceeding, the ALJ shall withdraw from the 
proceeding. Withdrawal is accomplished by entering a notice in the 
record and providing a copy of the notice to the Director of the Office 
of Hearings and Appeals.
    (b) Motion for recusal. If a party believes that the presiding ALJ 
should be disqualified for any reason, the party may file a motion to 
recuse with the ALJ. The motion shall be supported by an affidavit 
setting forth the alleged grounds for disqualification. The ALJ shall 
rule on the motion, stating the grounds therefor.
    (c) Redesignation of ALJ. If an ALJ is disqualified, another ALJ 
shall be designated to preside over further proceedings.

[61 FR 52218, Oct. 4, 1996, as amended at 73 FR 13723, Mar. 13, 2008]



Sec.  180.215  Ex parte communications.

    (a) An ex parte communication is any direct or indirect 
communication concerning the merits of a pending proceeding, made by a 
party in the absence of any other party, to the presiding ALJ, and which 
was neither on the record nor on reasonable prior notice to all parties. 
Ex parte communications do not include communications made for the sole 
purpose of scheduling hearings, requesting extensions of time, or 
requesting information on the status of cases.
    (b) Ex parte communications are prohibited.
    (c) If the ALJ receives an ex parte communication that the ALJ knows 
or has reason to believe is prohibited, the ALJ shall promptly place the 
communication, or a written statement of the substance of the 
communication, in the record and shall furnish copies to all parties. 
Unauthorized communications shall not be taken into consideration in 
deciding any matter in issue. Any party making a prohibited ex parte 
communication may be subject to sanctions including, but not limited to, 
exclusion from the proceeding and an adverse ruling on the issue that is 
the

[[Page 763]]

subject of the prohibited communication.



Sec.  180.220  Separation of functions.

    No officer, employee, or agent of the Federal Government engaged in 
the performance of investigative, conciliatory, or prosecutorial 
functions in connection with the proceeding shall, in that proceeding or 
any factually related proceeding under this part, participate or advise 
in the decision of the ALJ, except as a witness or counsel during the 
proceedings or in its appellate review.



                            Subpart C_Parties



Sec.  180.300  Rights of parties.

    Each party may appear in person, be represented by counsel, examine 
or cross-examine witnesses, introduce documentary or other relevant 
evidence into the record and, in Fair Housing Act matters, request the 
issuance of subpoenas.



Sec.  180.305  Representation.

    (a) HUD is represented by the General Counsel.
    (b) Any party may appear on his/her/its own behalf or by an 
attorney. Each party or attorney shall file a notice of appearance. The 
notice must identify the matter before the ALJ, the party on whose 
behalf the appearance is made, and the mailing address and telephone 
number of the person appearing. Similar notice shall also be given for 
any withdrawal of appearance.
    (c) An attorney must be admitted to practice before a Federal Court 
or the highest court in any State. The attorney's representation that 
he/she is in good standing before any of these courts is sufficient 
evidence of the attorney's qualifications under this section, unless 
otherwise ordered by the ALJ.



Sec.  180.310  Parties.

    (a) Parties to proceedings under this part are HUD, the 
respondent(s), and any intervenors. Respondents include persons named as 
such in a charge issued under 24 CFR part 103 and Recipients/applicants 
named as respondents in hearing notices issued under 24 CFR parts 1, 6, 
8 or 146 and notices of proposed adverse action under this part.
    (b) An aggrieved person is not a party but may file a motion to 
intervene. Requests for intervention shall be filed within 50 days after 
the filing of the charge; however, the ALJ may allow intervention beyond 
that time. An intervenor's right to participate as a party may be 
restricted by order of the ALJ pursuant to statute, the rules in this 
part or other applicable law. Intervention shall be permitted if the 
person requesting intervention is
    (1) The aggrieved person on whose behalf the charge is issued; or
    (2) An aggrieved person who claims an interest in the property or 
transaction that is the subject of the charge and the disposition of the 
charge may, as a practical matter, impair or impede this person's 
ability to protect that interest, unless the aggrieved person is 
adequately represented by the existing parties.
    (c) A complainant in a non-Fair Housing Act matter is not a party 
but may file a motion to become an amicus curiae.
    (d) Any person may file a petition to participate in a proceeding 
under this part as an amicus curiae. An amicus curiae is not a party to 
the proceeding and may not introduce evidence at the hearing.
    (1) A petition to participate as amicus curiae shall be filed before 
the commencement of the hearing, unless the petitioner shows good cause 
for filing the petition later. The petition may be granted if the ALJ 
finds that the petitioner has a legitimate interest in the proceedings, 
and that such participation will not unduly delay the outcome and may 
contribute materially to the proper disposition thereof.
    (2) The amicus curiae may submit briefs within time limits set by 
the ALJ or by the Secretary in the event of an appeal to the Secretary.
    (3) When all parties have completed their initial examination of a 
witness, the amicus curiae may request the ALJ to propound specific 
questions to the witness. Any such request may be granted if the ALJ 
believes the proposed additional testimony may assist

[[Page 764]]

materially in elucidating factual matters at issue between the parties 
and will not expand the issues.

[61 FR 52218, Oct. 4, 1996, as amended at 64 FR 3801, Jan. 25, 1999]



Sec.  180.315  Standards of conduct.

    (a) All persons appearing in proceedings under this part shall act 
with integrity and in an ethical manner.
    (b) The ALJ may exclude parties or their representatives for refusal 
to comply with directions, continued use of dilatory tactics, refusal to 
adhere to reasonable standards of orderly and ethical conduct, failure 
to act in good faith, or violations of the prohibitions against ex parte 
communications. An attorney who is suspended or barred from 
participation may appeal to another ALJ designated by the Director of 
the Office of Hearings and Appeals. The proceeding will not be delayed 
or suspended pending disposition on the appeal, except that the ALJ 
shall suspend the proceeding for a reasonable time to enable the party 
to obtain another attorney.

[61 FR 52218, Oct. 4, 1996, as amended at 73 FR 13723, Mar. 13, 2008]



                 Subpart D_Proceedings Prior to Hearing



Sec.  180.400  Service and filing.

    (a) Service--(1) Service by the Office of ALJs. The Office of ALJs 
shall serve all notices, orders, decisions and other such documents by 
mail to each party and amicus curiae at the last known address.
    (2) Service by others. A copy of each filed document shall be served 
on each party and each amicus curiae. Service shall be made upon counsel 
if a party is represented by counsel. Service on counsel shall 
constitute service on the party. Service may be made to the last known 
address by first-class mail or other more expeditious means, such as:
    (i) Hand delivery to the person to be served or a person of suitable 
age and discretion at the place of business, residence, or usual place 
of abode of the person to be served;
    (ii) Overnight delivery; or
    (iii) Facsimile transmission or electronic means. The ALJ may place 
appropriate limits on service by facsimile transmission or electronic 
means.
    (3) Certificate of service. Every document served shall be 
accompanied by a certificate of service containing a statement as to the 
date of service, the method of service, the parties served and the 
address at which they were served, which is signed and dated by the 
person making service.
    (b) Filing--(1) Method. All documents shall be filed with the Docket 
Clerk. Filing may be by first class mail, delivery, facsimile 
transmission, or electronic means; however, the ALJ may place 
appropriate limits on filing by facsimile transmission or electronic 
means.
    (2) Form. Every pleading, motion, brief, or other document shall 
contain a caption setting forth the title of the proceeding, the docket 
number assigned by the Office of ALJs, and the designation of the type 
of document (e.g., charge, motion).
    (3) Signature. Every document filed by a party shall be signed by 
the party or the party's attorney and must include the signer's address 
and telephone number. The signature constitutes a certification that: 
the signer has read the document; to the best of the signer's knowledge, 
information and belief, the statements made therein are true; and the 
document is not interposed for delay.

[61 FR 52218, Oct. 4, 1996, as amended at 74 FR 4636, Jan. 26, 2009]



Sec.  180.405  Time computations.

    (a) In computing time under this part, the time period begins the 
day following the act, event, or default and includes the last day of 
the period, unless the last day is a Saturday, Sunday, or legal holiday 
observed by the Federal Government, in which case the time period 
includes the next business day.
    (b) Modification of time periods. Except for time periods required 
by statute, the ALJ may enlarge or reduce any time period required under 
this part where necessary to avoid prejudicing the public interest or 
the rights of the parties. Requests for extension of time should set 
forth the reasons for the request.

[[Page 765]]

    (c) Entry of orders. In computing any time period involving the date 
of the ALJ's issuance of an order or decision, the date of issuance is 
the date of service by the Docket Clerk.
    (d) Computation of time for delivery by mail. When documents are 
filed by mail, three days shall be added to the prescribed time period 
for filing any responsive pleading. Documents are not filed until 
received by the Docket Clerk.
    (e) Untimely filing. The ALJ may refuse to consider any motion or 
other document that is not filed in a timely fashion.

[61 FR 52218, Oct. 4, 1996, as amended at 74 FR 4636, Jan. 26, 2009]



Sec.  180.410  Charges under the Fair Housing Act.

    (a) Filing and service. Within 3 days after the issuance of a 
charge, the General Counsel shall file the charge with the Docket Clerk 
and serve copies (with the additional information required under 
paragraph (b) of this section) on all respondents and aggrieved persons.
    (b) Contents. The charge shall consist of a short and plain written 
statement of the facts upon which reasonable cause has been found to 
believe that a discriminatory housing practice has occurred or is about 
to occur. A notification shall be served with the charge containing the 
following information:
    (1) Any complainant, respondent, or aggrieved person may elect to 
have the claims asserted in the charge decided in a civil action under 
42 U.S.C. 3612(o), in lieu of an administrative proceeding under this 
part.
    (2) Such election must be made not later than 20 days after receipt 
of service of the charge by serving written notice of such on the Docket 
Clerk, each respondent, each aggrieved person on whose behalf the charge 
was issued, the Assistant Secretary, and the General Counsel.
    (3) If no person timely elects to have the claims asserted in the 
charge decided in a civil action under 42 U.S.C. 3612(o), an 
administrative proceeding will be conducted under this part.
    (4) If an administrative hearing is conducted:
    (i) The hearing will be held at a date and place specified.
    (ii) The respondent will have an opportunity to file an answer to 
the charge within 30 days after service of the charge.
    (iii) The aggrieved person may participate as a party to the 
administrative proceeding by filing a request for intervention within 50 
days after service of the charge.
    (iv) All discovery must be concluded 15 days before the date set for 
hearing.
    (v) The rules in this part will govern the proceeding.
    (5) If, at any time following service of the charge on the 
respondent, the respondent intends to enter into a contract, sale, 
encumbrance, or lease with any person regarding the property that is the 
subject of the charge, the respondent must provide a copy of the charge 
to such person before the respondent and the person enter into the 
contract, sale, encumbrance or lease.
    (c) Election of judicial determination. If the complainant, the 
respondent, or the aggrieved person on whose behalf a complaint was 
filed makes a timely election to have the claims asserted in the charge 
decided in a civil action under 42 U.S.C. 3612(o), the administrative 
proceeding shall be dismissed.
    (d) Effect of a civil action on administrative proceeding. An ALJ 
may not continue an administrative proceeding under the Fair Housing Act 
after the beginning of the trial of a civil action commenced by the 
aggrieved person under an act of Congress or a State law seeking relief 
with respect to that discriminatory housing practice. If such a trial is 
commenced, the ALJ shall dismiss the administrative proceeding. The 
commencement and maintenance of a civil action for appropriate temporary 
or preliminary relief under 42 U.S.C. 3610(e) or 42 U.S.C. 3613 does not 
affect administrative proceedings under this part.

[61 FR 52218, Oct. 4, 1996, as amended at 73 FR 13723, Mar. 13, 2008; 74 
FR 4636, Jan. 26, 2009]

[[Page 766]]



Sec.  180.415  Notice of proposed adverse action regarding Federal
financial assistance in non-Fair Housing Act matters.

    (a) Filing and service. Within 10 days after a recipient/applicant 
has requested a hearing, as provided for in 24 CFR parts 1, 6, 8, or 
146, the General Counsel shall file a notice of proposed adverse action 
with the Docket Clerk and serve copies (with the additional information 
required under paragraph (b) of this section) on all respondents and 
complainants.
    (b) Contents. The notice of proposed adverse action shall consist of 
a short and plain written statement of the facts and legal authority 
upon which the proposed action is based. A notification shall be served 
with the notice containing the following information:
    (1) That an administrative hearing will be held at a date and place 
specified.
    (2) That the respondent will have an opportunity to file an answer 
to the notice of adverse action within 30 days after its service.
    (3) That the complainant may participate as an amicus curiae by 
filing a timely request to do so.
    (4) That discovery must be concluded by a date specified.
    (5) That the rules specified in this part shall govern the 
proceeding.
    (c) Consolidation. The ALJ may provide for non-Fair Housing Act 
proceedings at HUD to be joined or consolidated for hearing with 
proceedings in other Federal departments or agencies, by agreement with 
such other departments or agencies. All parties to any proceeding 
consolidated subsequent to service of the notice of proposed adverse 
action shall be promptly served with notice of such consolidation.

[61 FR 52218, Oct. 4, 1996, as amended at 64 FR 3802, Jan. 25, 1999; 74 
FR 4636, Jan. 26, 2009]



Sec.  180.420  Answer.

    (a) Within 30 days after service of the charge or notice of proposed 
adverse action, a respondent may file an answer. The answer shall 
include:
    (1) A statement that the respondent admits, denies, or does not have 
and is unable to obtain sufficient information to admit or deny, each 
allegation made. A statement of lack of information shall have the 
effect of a denial. Any allegation that is not denied shall be deemed to 
be admitted.
    (2) A statement of each affirmative defense and a statement of facts 
supporting each affirmative defense.
    (b) Failure to file an answer within the 30-day period following 
service of the charge or notice of proposed adverse action shall be 
deemed an admission of all matters of fact recited therein and may 
result in the entry of a default decision.



Sec.  180.425  Amendments to pleadings.

    (a) By right. HUD may amend the charge or notice of proposed adverse 
action once as a matter of right prior to the filing of the answer.
    (b) By leave. Upon such conditions as are necessary to avoid 
prejudicing the public interest and the rights of the parties, the ALJ 
may allow amendments to pleadings upon a motion of a party.
    (c) Conformance to the evidence. When issues not raised by the 
pleadings are reasonably within the scope of the original charge or 
notice of proposed adverse action and have been tried by the express or 
implied consent of the parties, the issues shall be treated in all 
respects as if they had been raised in the pleadings, and amendments may 
be made as necessary to make the pleading conform to evidence.
    (d) Supplemental pleadings. The ALJ may, upon reasonable notice, 
permit supplemental pleadings concerning transactions, occurrences or 
events that have happened or been discovered since the date of the 
pleadings and which are relevant to any of the issues involved.



Sec.  180.430  Motions.

    (a) Motions. Any application for an order or other request shall be 
made by a motion which, unless made during an appearance before the ALJ, 
shall be in writing and shall state the specific relief requested and 
the basis therefor. Motions made during an appearance before the ALJ 
shall be stated orally and made a part of the transcript. All parties 
shall be given a reasonable opportunity to respond to written or oral 
motions or requests.

[[Page 767]]

    (b) Responses to written motions. Within seven calendar days after a 
written motion is served, any party to the proceeding may file a 
response in support of, or in opposition to, the motion. Unless 
otherwise ordered by the ALJ, no further responsive documents may be 
filed. Failure to file a response within the response period constitutes 
a waiver of any objection to the granting of the motion.
    (c) Oral argument. The ALJ may order oral argument on any motion.



Sec.  180.435  Prehearing statements.

    (a) Before the commencement of the hearing, the ALJ may direct the 
parties to file prehearing statements.
    (b) The prehearing statement must state the name of the party 
presenting the statement and, unless otherwise directed by the ALJ, 
briefly set forth the following:
    (1) The issues involved in the proceeding;
    (2) The facts stipulated by the parties and a statement that the 
parties have made a good faith effort to stipulate to the greatest 
extent possible;
    (3) The facts in dispute;
    (4) The witnesses (together with a summary of the testimony 
expected) and exhibits to be presented at the hearing;
    (5) A brief statement of applicable law;
    (6) Conclusions to be drawn;
    (7) Estimated time required for presentation of the party's case; 
and
    (8) Such other information as may assist in the disposition of the 
proceeding.



Sec.  180.440  Prehearing conferences.

    (a) Before the commencement of or during the course of the hearing, 
the ALJ may direct the parties to participate in a conference to 
expedite the hearing. Failure to attend a conference may constitute a 
waiver of all objections to the agreements reached at the conference and 
to any order with respect thereto.
    (b) During the conference, the ALJ may dispose of any procedural 
matters on which he/she is authorized to rule. At the conference, the 
following matters may be considered:
    (1) Pre-trial motions;
    (2) Identification, simplification and clarification of the issues;
    (3) Necessary amendments to the pleadings;
    (4) Stipulations of fact and of the authenticity, accuracy, and 
admissibility of documents;
    (5) Limitations on the number of witnesses;
    (6) Negotiation, compromise, or settlement of issues;
    (7) The exchange of proposed exhibits and witness lists;
    (8) Matters of which official notice will be requested;
    (9) Scheduling actions discussed at the conference; and
    (10) Such other matters as may assist in the disposition of the 
proceeding.
    (c) Conferences may be conducted by telephone or in person, but 
generally shall be conducted by telephone, unless the ALJ determines 
that this method is inappropriate. The ALJ shall give reasonable notice 
of the time, place and manner of the conference.
    (d) Record of conference. Unless otherwise directed by the ALJ, the 
conference will not be stenographically recorded. The ALJ will reduce 
the actions taken at the conference to a written order or, if the 
conference takes place less than seven days before the beginning of the 
hearing, may make a statement at the hearing and on the record 
summarizing the actions taken at the conference.



Sec.  180.445  Settlement negotiations before a settlement judge.

    (a) Appointment of settlement judge. The ALJ, upon the motion of a 
party or upon his or her own motion, may request the Director of the 
Office of Hearings and Appeals to appoint another ALJ to conduct 
settlement negotiations. The order shall direct the settlement judge to 
report to the presiding ALJ within specified time periods.
    (b) Duties of settlement judge. (1) The settlement judge shall 
convene and preside over conferences and settlement negotiations between 
the parties and assess the practicalities of a potential settlement.
    (2) The settlement judge shall report to the presiding ALJ 
describing the status of the settlement negotiations,

[[Page 768]]

evaluating settlement prospects, and recommending the termination or 
continuation of the settlement negotiations.
    (c) Termination of settlement negotiations. Settlement negotiations 
shall terminate upon the order of the presiding ALJ issued after 
consultation with the settlement judge. The conduct of settlement 
negotiations shall not unduly delay the commencement of the hearing.

[61 FR 52218, Oct. 4, 1996, as amended at 73 FR 13723, Mar. 13, 2008]



Sec.  180.450  Resolution of charge or notice of proposed adverse action.

    At any time before a final decision is issued, the parties may 
submit to the ALJ an agreement resolving the charge or notice of 
proposed adverse action. A charge under the Fair Housing Act can only be 
resolved with the agreement of the aggrieved person on whose behalf the 
charge was issued. If the agreement is in the public interest, the ALJ 
shall accept it by issuing an initial decision and consent order based 
on the agreement.



                           Subpart E_Discovery



Sec.  180.500  Discovery.

    (a) In general. This subpart governs discovery in aid of 
administrative proceedings under this part. Discovery in Fair Housing 
Act matters shall be completed 15 days before the date scheduled for 
hearing or at such time as the ALJ shall direct. Discovery in non-Fair 
Housing Act matters shall be completed as the ALJ directs.
    (b) Scope. The parties are encouraged to engage in voluntary 
discovery procedures. Discovery shall be conducted as expeditiously and 
inexpensively as possible, consistent with the needs of all parties to 
obtain relevant evidence. Unless otherwise ordered by the ALJ, the 
parties may obtain discovery regarding any matter, not privileged, that 
is relevant to the subject matter involved in the proceeding, including 
the existence, description, nature, custody, condition, and location of 
documents or persons having knowledge of any discoverable matter. It is 
not grounds for objection that information sought will be inadmissible 
if the information appears reasonably calculated to lead to the 
discovery of admissible evidence.
    (c) Methods. Parties may obtain discovery by one or more of the 
following methods:
    (1) Deposition upon oral examination or written questions.
    (2) Written interrogatories.
    (3) Requests for the production of documents or other evidence for 
inspection and other purposes.
    (4) Requests for admissions.
    (5) Upon motion of a party, the presiding ALJ may issue an order 
requiring a physical or mental examination of a party or of a person in 
the custody or under the legal control of a party.
    (d) Frequency and sequence. Unless otherwise ordered by the ALJ or 
restricted by this subpart, the frequency or sequence of these methods 
is not limited.
    (e) Non-intervening aggrieved person. For purposes of obtaining 
discovery from a non-intervening aggrieved person, the term party as 
used in this subpart includes the aggrieved person.



Sec.  180.505  Supplementation of responses.

    A party is under a duty, in a timely fashion, to:
    (a) Supplement a response with respect to any question directly 
addressed to:
    (1) The identity and location of persons having knowledge of 
discoverable matters; and
    (2) The identity of each person expected to be called as an expert 
witness, the subject matter on which the expert witness is expected to 
testify, and the substance of the testimony.
    (b) Amend a response if the party later obtains information upon the 
basis of which:
    (1) The party knows the response was incorrect when made, or
    (2) The party knows the response, though correct when made, is no 
longer true, and the circumstances are such that a failure to amend the 
response is, in substance, a knowing concealment.
    (c) Supplement other responses, as imposed by order of the ALJ or by 
agreement of the parties.

[[Page 769]]



Sec.  180.510  Interrogatories.

    (a) Any party may serve on any other party written interrogatories 
to be answered by the party served. If the party served is a public or 
private corporation, a partnership, an association, or a governmental 
agency, the interrogatories may be answered by any authorized officer or 
agent who shall furnish such information as may be available to the 
party. A party may serve not more than 30 written interrogatories on 
another party without an order of the ALJ.
    (b) Each interrogatory shall be answered separately and fully in 
writing under oath or affirmation, unless it is objected to, in which 
event, the reasons for the objection shall be stated in lieu of an 
answer. The answers shall be signed by the person making them, and the 
objections may be signed by the attorney or other representative making 
them. The answers and objections shall be served within 15 days after 
service of the interrogatories.
    (c) It is a sufficient answer to an interrogatory to specify the 
records from which the answer may be derived or ascertained if:
    (1) The answer to the interrogatory may be derived or ascertained 
from the records of the party on whom the interrogatory has been served 
or from an examination, audit or inspection of such records, or from a 
compilation, abstract or summary based thereon, and
    (2) The burden of deriving or ascertaining the answer is 
substantially the same for the party serving the interrogatory as the 
party served. The party serving the interrogatory shall be afforded 
reasonable opportunity to examine, audit or inspect such records and to 
make copies, compilations, abstracts or summaries. The specification 
shall include sufficient detail to permit the interrogating party to 
locate and identify the individual records from which the answer may be 
ascertained.
    (d) Objections to the form of written interrogatories are waived 
unless served in writing upon the party propounding the interrogatories.



Sec.  180.515  Depositions.

    (a) Notice. Upon written notice to the witness and to all other 
parties, a party may take the testimony of a witness by deposition and 
may request the production of specified documents or materials by the 
witness at the deposition. Notice of the taking of a deposition shall be 
given not less than five days before the deposition is scheduled. The 
notice shall state:
    (1) The purpose and general scope of the deposition;
    (2) The time and place of the deposition;
    (3) The name and address of the person before whom the deposition is 
to be taken;
    (4) The name and address of the witness; and
    (5) A specification of the documents and materials that the witness 
is requested to produce.
    (b) Deposition of an organization. If the deposition of a public or 
private corporation, partnership, association, or governmental agency is 
sought, the organization so named shall designate one or more officers, 
directors or agents to testify on its behalf, and may set forth, for 
each person designated, the matters on which he/she will testify.
    (c) Procedure at deposition. Depositions may be taken before any 
disinterested person having power to administer oaths in the location 
where the deposition is to be taken. Each deponent shall be placed under 
oath or affirmation, and the other parties will have the right to cross-
examine. The deponent may have counsel present during the deposition. 
The questions propounded and all answers and objections thereto shall be 
reduced to writing, read by or to and subscribed by the witness, and 
certified by the person before whom the deposition was taken. Non-
intervening aggrieved persons may be present at depositions in which 
they are not the deponent.
    (d) Motion to terminate or limit examination. During the taking of a 
deposition, a party or the witness may request suspension of the 
deposition on the grounds of bad faith in the conduct of the 
examination, oppression of the witness or party, or improper questioning 
or conduct. Upon request for suspension, the deposition will be 
adjourned. The objecting party or witness must immediately move the ALJ 
for a

[[Page 770]]

ruling on the objection. The ALJ may then limit the scope or manner of 
taking the deposition.
    (e) Waiver of deposing officer's disqualification. Objection to 
taking a deposition because of the disqualification of the officer 
before whom it is taken is waived unless made before the taking of the 
deposition begins or as soon thereafter as the disqualification becomes 
known or could have been discovered with reasonable diligence.
    (f) Payment of costs of deposition. The party requesting the 
deposition shall bear all costs of the deposition.



Sec.  180.520  Use of deposition at hearings.

    (a) In general. At the hearing, any part or all of a deposition, so 
far as admissible under the Federal Rules of Evidence, may be used 
against any party who was present or represented at the taking of the 
deposition or who had due notice of the taking of the deposition, in 
accordance with the following provisions:
    (1) Any deposition may be used by any party for the purpose of 
contradicting or impeaching the testimony of the deponent as a witness.
    (2) The deposition of an expert witness may be used by any party for 
any purpose, unless the ALJ rules that such use is unfair or in 
violation of due process.
    (3) The deposition of a party, or of anyone who at the time of the 
taking of the deposition was an officer, director, or duly authorized 
agent of a public or private corporation, partnership, or association 
that is a party, may be used by any other party for any purpose.
    (4) The deposition of a witness, whether or not a party, may be used 
by any party for any purpose if the ALJ finds:
    (i) That the witness is dead;
    (ii) That the witness is out of the United States or more than 100 
miles from the place of hearing, unless it appears that the absence of 
the witness was procured by the party offering the deposition;
    (iii) That the witness is unable to attend to testify because of 
age, sickness, infirmity, or imprisonment;
    (iv) That the party offering the deposition has been unable to 
procure the attendance of the witness by subpoena; or
    (v) Whenever exceptional circumstances exist as to make it 
desirable, in the interest of justice and with due regard to the 
importance of presenting the testimony of witnesses orally in open 
hearing, to allow the deposition to be used.
    (5) If a part of a deposition is offered in evidence by a party, any 
other party may require the party to introduce all of the deposition 
that is relevant to the part introduced. Any party may introduce any 
other part of the deposition.
    (6) Substitution of parties does not affect the right to use 
depositions previously taken. If a proceeding has been dismissed and 
another proceeding involving the same subject matter is later brought 
between the same parties or their representatives or successors in 
interest, all depositions lawfully taken in the former proceeding may be 
used in the latter proceeding.
    (b) Objections to admissibility. Except as provided in this 
paragraph, objection may be made at the hearing to receiving in evidence 
any deposition or part of a deposition for any reason that would require 
the exclusion of the evidence if the witness were present and 
testifying.
    (1) Objections to the competency of a witness or to the competency, 
relevancy, or materiality of testimony are not waived by failure to make 
them before or during the taking of the deposition, unless the basis of 
the objection is one which might have been obviated or removed if 
presented at that time.
    (2) Errors and irregularities occurring at the oral examination in 
the manner of taking the deposition, in the form of the questions or 
answers, in the oath or affirmation, or in the conduct of parties, and 
errors of any kind which might be obviated, removed or cured if promptly 
presented, are waived unless reasonable objection is made at the taking 
of the deposition.



Sec.  180.525  Requests for production of documents or things for 
inspection or other purposes, including physical and mental examinations.

    (a) Any party may serve on any other party a request to:

[[Page 771]]

    (1) Produce and/or permit the party, or a person acting on the 
party's behalf, to inspect and copy any designated documents, or to 
inspect and copy, test, or sample any tangible things that contain or 
may lead to relevant information and that are in the possession, 
custody, or control of the party upon whom the request is served.
    (2) Permit entry upon designated land or other property in the 
possession or control of the party upon whom the request is served for 
the purpose of inspection and measuring, photographing, testing, or 
other purposes stated in paragraph (a)(1) of this section.
    (b) Each request shall set forth with reasonable particularity the 
items or categories to be inspected and shall specify a reasonable time, 
place and manner for making the inspection and performing the related 
acts.
    (c) Within 15 days after service of the request, the party upon whom 
the request is served shall serve a written response on the party 
submitting the request. The response shall state, with regard to each 
item or category, that inspection and related activities will be 
permitted as requested, unless there are objections, in which case the 
reasons for the objection shall be stated.
    (d) Upon motion of any party, when the mental or physical condition 
(including the blood group) of a party or of a person in the custody or 
under the legal control of a party, is in controversy, the presiding ALJ 
may order the party to submit to a physical or mental examination by a 
suitably licensed or certified examiner or to produce for examination 
the person in the party's custody or legal control. The order may be 
made only on motion for good cause shown and upon notice to the person 
to be examined and to all parties and shall specify the time, place, 
manner, conditions, and scope of the examination and the person or 
persons by whom it is to be made. A report of the examiner shall be made 
in accordance with Rule 35(b) of the Federal Rules of Civil Procedure.



Sec.  180.530  Requests for admissions.

    (a) Any party may serve on any other party a written request for the 
admission of the truth of any matters relevant to the adjudication set 
forth in the request that relate to statements or opinions of fact or of 
application of law to fact, including the genuineness and authenticity 
of any documents described in or attached to the request.
    (b) Each matter for which an admission is requested is admitted 
unless, within 15 days after service of the request, or within such time 
as the ALJ allows, the party to whom the request is directed serves on 
the requesting party a sworn written answer which:
    (1) Specifically denies, in whole or in part, the matter for which 
an admission is requested;
    (2) Sets forth in detail why the party cannot truthfully admit or 
deny the matter; or
    (3) States an objection that the matter is privileged, irrelevant or 
otherwise improper in whole or in part.
    (c) An answering party may not give lack of information or knowledge 
as a reason for failure to admit or deny, unless he/she/it states that 
he/she/it has made a reasonable inquiry and that the information known 
to, or readily obtainable by, him/her/it is insufficient to enable the 
party to admit or deny.
    (d) The party requesting admissions may move for a determination of 
the sufficiency of the answers or objections. Unless the ALJ determines 
that an objection is justified, the ALJ shall order that an answer be 
served. If the ALJ determines that an answer does not comply with the 
requirements of this section, the ALJ may order either that the matter 
is admitted or that an amended answer be served.
    (e) Any matter admitted under this section is conclusively 
established unless, upon the motion of a party, the ALJ permits the 
withdrawal or amendment of the admission. Any admission made under this 
section is made for the purposes of the pending proceeding only, is not 
an admission by the party for any other purpose, and may not be used 
against the party in any other proceeding.



Sec.  180.535  Protective orders.

    (a) Upon motion of a party or a person from whom discovery is sought 
or in accordance with Sec.  180.540(c), and for good cause shown, the 
ALJ may make appropriate orders to protect a party

[[Page 772]]

or person from annoyance, embarrassment, oppression, or undue burden or 
expense as a result of the requested discovery request. The order may 
direct that:
    (1) The discovery may not be had;
    (2) The discovery may be had only on specified terms and conditions, 
including at a designated time and place;
    (3) The discovery may be had by a method of discovery other than 
that selected by the party seeking discovery;
    (4) Certain matters may not be the subject of discovery, or the 
scope of discovery may be limited to certain matters;
    (5) Discovery may be conducted with no one present other than 
persons designated by the ALJ;
    (6) A trade secret or other confidential research, development or 
commercial information may not be disclosed, or may be disclosed only in 
a designated way; or
    (7) The party or other person from whom discovery is sought may file 
specified documents or information under seal to be opened as directed 
by the ALJ.
    (b) The ALJ may permit a party or other person from whom discovery 
is sought, who is seeking a protective order, to make all or part of the 
showing of good cause in camera. If such a showing is made, upon motion 
of the party or other person from whom discovery is sought, an in camera 
record of the proceedings may be made. If the ALJ enters a protective 
order, any in camera record of such showing shall be sealed and 
preserved and made available to the ALJ or, in the event of appeal, to 
the Secretary or a court.



Sec.  180.540  Motion to compel discovery.

    (a) If a deponent fails to answer a question propounded, or a party 
upon whom a discovery request has been made fails to respond adequately, 
objects to a request, or fails to produce documents or other inspection 
as requested, the discovering party may move the ALJ for an order 
compelling discovery in accordance with the request. The motion shall:
    (1) State the nature of the request;
    (2) Set forth the response or objection of the deponent or party 
upon whom the request was served;
    (3) Present arguments supporting the motion; and
    (4) Attach copies of all relevant discovery requests and responses.
    (b) For the purposes of this section, an evasive or incomplete 
answer or response will be treated as a failure to answer or respond.
    (c) In ruling on a motion under this section, the ALJ may enter an 
order compelling a response in accordance with the request, may issue 
sanctions under paragraph (d) of this section, or may enter a protective 
order under Sec.  180.535.
    (d) Sanctions. If a party fails to provide or permit discovery, the 
ALJ may take such action as is just, including but not limited to the 
following:
    (1) Inferring that the admission, testimony, document, or other 
evidence would have been adverse to the party;
    (2) Ordering that, for purposes of the adjudication, the matters 
regarding which the order was made or any other designated facts shall 
be taken to be established in accordance with the claim of the party 
obtaining the order;
    (3) Prohibiting the party failing to comply with the order from 
introducing evidence concerning, or otherwise relying upon, documents or 
other evidence withheld;
    (4) Ordering that the party withholding discovery not introduce into 
evidence, or otherwise use in the hearing, information obtained in 
discovery;
    (5) Permitting the requesting party to introduce secondary evidence 
concerning the information sought;
    (6) Striking any appropriate part of the pleadings or other 
submissions of the party failing to comply with such order; or
    (7) Taking such other action as may be appropriate.



Sec.  180.545  Subpoenas.

    (a) This section governs the issuance of subpoenas in administrative 
proceedings under the Fair Housing Act. Except for time periods stated 
in the rules in this section, to the extent that this section conflicts 
with procedures for the issuance of subpoenas in civil actions in the 
United States District

[[Page 773]]

Court for the District in which the investigation of the discriminatory 
housing practice took place, the rules of the United States District 
Court apply.
    (b) Issuance of subpoena. Upon the written request of a party, the 
presiding ALJ or other designated ALJ may issue a subpoena requiring the 
attendance of a witness for the purpose of giving testimony at a 
deposition or hearing and requiring the production of relevant books, 
papers, documents or tangible things.
    (c) Time of request. Requests for subpoenas in aid of discovery must 
be submitted in time to permit the conclusion of discovery 15 days 
before the date scheduled for the hearing. If a request for subpoenas of 
a witness for testimony at a hearing is submitted three days or less 
before the hearing, the subpoena shall be issued at the discretion of 
the presiding ALJ, or other designated ALJ as appropriate.
    (d) Service. A subpoena may be served by any person who is not a 
party and is not less than 18 years of age. Service on a person shall be 
made by delivering a copy of the subpoena to the person and by tendering 
witness fees and mileage to that person. When the subpoena is issued on 
behalf of HUD, witness fees and mileage need not be tendered with the 
subpoena.
    (e) Amount of witness fees and mileage. A witness summoned by a 
subpoena issued under this part is entitled to the same witness and 
mileage fees as a witness in proceedings in United States District 
Courts. Fees payable to a witness summoned by a subpoena shall be paid 
by the party requesting the issuance of the subpoena, or where the ALJ 
determines that a party is unable to pay the fees, the fees shall be 
paid by HUD.
    (f) Motion to quash or limit subpoena. Upon a motion by the person 
served with a subpoena or by a party, made within five days after 
service of the subpoena (but in any event not less than the time 
specified in the subpoena for compliance), the ALJ may:
    (1) Quash or modify the subpoena if it is unreasonable and 
oppressive or for other good cause shown; or
    (2) Condition denial of the motion upon the advancement, by the 
party on whose behalf the subpoena was issued, of the reasonable cost of 
producing subpoenaed books, papers or documents. Where circumstances 
require, the ALJ may act upon such a motion at any time after a copy of 
the motion has been served upon the party on whose behalf the subpoena 
was issued.
    (g) Failure to comply with subpoena. If a person fails to comply 
with a subpoena issued under this section, the party requesting the 
subpoena may refer the matter to the Attorney General for enforcement in 
appropriate proceedings under 42 U.S.C. 3614(c).

[61 FR 52218, Oct. 4, 1996, as amended at 73 FR 13723, Mar. 13, 2008]



                     Subpart F_Procedures at Hearing



Sec.  180.600  Date and place of hearing.

    (a) For Fair Housing Act Cases--(1) Time. The hearing shall commence 
not later than 120 days after the issuance of the charge, unless it is 
impracticable to do so. If the hearing cannot be commenced within this 
time period, the ALJ shall notify in writing all parties, aggrieved 
persons, amici, and the Assistant Secretary of the reasons for the 
delay.
    (2) Place. The hearing will be conducted at a place in the vicinity 
in which the discriminatory housing practice is alleged to have occurred 
or to be about to occur.
    (b) For Non-Fair Housing Matters. Hearings shall be held in 
Washington, DC, unless the ALJ determines that the convenience of the 
respondent or HUD requires that another place be selected.
    (c) The ALJ may change the time, date or place of the hearing, or 
may temporarily adjourn or continue a hearing for good cause shown.



Sec.  180.605  Conduct of hearings.

    The hearing shall be conducted in accordance with the Administrative 
Procedure Act (5 U.S.C. 551-559).



Sec.  180.610  Waiver of right to appear.

    If all parties waive their right to appear before the ALJ, the ALJ 
need not conduct an oral hearing. Such waivers shall be in writing and 
filed with the ALJ. The ALJ shall make a record of

[[Page 774]]

the pleadings and relevant written evidence submitted by the parties. 
These documents may constitute the evidence in the proceeding, and the 
decision may be based upon this evidence.



Sec.  180.615  Failure of party to appear.

    A default decision may be entered against a party failing to appear 
at a hearing unless such party shows good cause for such failure.



Sec.  180.620  Evidence.

    The Federal Rules of Evidence apply to the presentation of evidence 
in hearings under this part.



Sec.  180.625  Record of hearing.

    (a) All oral hearings shall be recorded and transcribed by a 
reporter designated and supervised by the ALJ. The original transcript 
shall be a part of the record and shall constitute the sole official 
transcript. All exhibits introduced as evidence shall be incorporated 
into the record. The parties and the public may obtain transcripts from 
the official reporter at rates not to exceed the applicable rates fixed 
by the contract with the reporter.
    (b) Corrections to the official transcript will be permitted upon 
motion of a party. Motions for correction must be submitted within five 
days after receipt of the transcript. Corrections of the official 
transcript will be permitted only where errors of substance are involved 
and upon the ALJ's approval.



Sec.  180.630  Stipulations.

    The parties may stipulate to any pertinent facts by oral agreement 
at the hearing or by written agreement at any time. Stipulations may be 
submitted into evidence at any time before the end of the hearing. Once 
received into evidence, a stipulation is binding on the parties.



Sec.  180.635  Written testimony.

    The ALJ may accept and enter into the record direct testimony of 
witnesses made by verified written statement rather than by oral 
presentation at the hearing. Unless the ALJ fixes other time periods, 
affidavits shall be filed and served on the parties not later than 14 
days prior to the hearing. Witnesses whose testimony is presented by 
affidavit shall be available for cross-examination as may be required.



Sec.  180.640  In camera and protective orders.

    The ALJ may limit discovery or the introduction of evidence, or may 
issue such protective or other orders necessary to protect privileged 
communications. If the ALJ determines that information in documents 
containing privileged matters should be made available to a party, the 
ALJ may order the preparation of a summary or extract of the 
nonprivileged matter contained in the original.



Sec.  180.645  Exhibits.

    (a) Identification. All exhibits offered into evidence shall be 
numbered sequentially and marked with a designation identifying the 
sponsor. The original of each exhibit offered in evidence or marked for 
identification shall be filed and retained in the docket of the 
proceeding, unless the ALJ permits the substitution of a copy for the 
original.
    (b) Exchange of exhibits. One copy of each exhibit offered into 
evidence must be furnished to each of the parties and to the ALJ. If the 
ALJ does not fix a time for the exchange of exhibits, the parties shall 
exchange copies of proposed exhibits at the earliest practicable time 
before the commencement of the hearing. Exhibits submitted as rebuttal 
evidence are not required to be exchanged before the commencement of the 
hearing if the submission of such evidence could not reasonably be 
anticipated at that time.
    (c) Authenticity. The authenticity of all documents submitted or 
exchanged as proposed exhibits prior to the hearing shall be admitted 
unless written objection is filed before the commencement of the 
hearing, or unless good cause is shown for failing to file such a 
written objection.
    (d) The parties are encouraged to stipulate as to the admissibility 
of exhibits.



Sec.  180.650  Public document items.

    Whenever a public document, such as an official report, decision, 
opinion, or

[[Page 775]]

published scientific or economic statistical data issued by any of the 
executive departments (or their subdivisions), legislative agencies or 
committees, or administrative agencies of the Federal Government 
(including Government-owned corporations), or a similar document issued 
by a State or its agencies is offered (in whole or in part), and such 
document (or part thereof) has been shown by the offeror to be 
reasonably available to the public, such document need not be produced 
or marked for identification, but may be offered for official notice, as 
a public document item by specifying the document or relevant part 
thereof.



Sec.  180.655  Witnesses.

    (a) Witnesses shall testify under oath or affirmation.
    (b) If a witness fails or refuses to testify, the failure or refusal 
to answer any question found by the ALJ to be proper may be grounds for 
striking all or part of the testimony that may have been given by the 
witness, or for any other action deemed appropriate by the ALJ.



Sec.  180.660  Closing of record.

    (a) Oral hearings. Where there is an oral hearing, the hearing ends 
on the day of the adjournment of the oral hearing or, where written 
briefs are permitted, on the date that the written briefs are due.
    (b) Hearing on written record. Where the parties have waived an oral 
hearing, the hearing ends on the date set by the ALJ as the final date 
for the receipt of submissions by the parties.
    (c) Receipt of evidence following hearing. Following the end of the 
hearing, no additional evidence may be accepted into the record, except 
with the permission of the ALJ. The ALJ may receive additional evidence 
upon a determination that new and material evidence was not readily 
available before the end of the hearing, the evidence has been timely 
submitted, and its acceptance will not unduly prejudice the rights of 
the parties.



Sec.  180.665  Arguments and briefs.

    (a) Following the submission of evidence at an oral hearing, the 
parties may file a brief, proposed findings of fact and conclusions of 
law, or both, or, in the ALJ's discretion, make oral arguments.
    (b) Unless otherwise ordered by the ALJ, briefs and proposed 
findings of fact and conclusions of law shall be filed simultaneously by 
all parties. In Fair Housing Act cases, such filings shall be due not 
later than 45 days after the adjournment of the oral hearing. In other 
cases, they shall be due as the ALJ orders.



Sec.  180.670  Initial decision of ALJ.

    (a) The ALJ shall issue an initial decision including findings of 
fact and conclusions of law upon each material issue of fact or law 
presented on the record. The initial decision of the ALJ shall be based 
on the whole record of the proceeding. A copy of the initial decision 
shall be served upon all parties, aggrieved persons, the Assistant 
Secretary, the Secretary, and amici, if any.
    (b) Initial decision in Fair Housing Act cases. (1) The ALJ shall 
issue an initial decision within 60 days after the end of the hearing, 
unless it is impracticable to do so. If the ALJ is unable to issue the 
initial decision within this time period (or within any succeeding 60-
day period following the initial 60-day period), the ALJ shall notify in 
writing all parties, the aggrieved person on whose behalf the charge was 
filed, and the Assistant Secretary, of the reasons for the delay.
    (2) The initial decision shall state that it will become the final 
agency decision 30 days after the date of issuance of the initial 
decision.
    (3) Findings against respondents. If the ALJ finds that a respondent 
has engaged, or is about to engage, in a discriminatory housing 
practice, the ALJ shall issue an initial decision against the respondent 
and order such relief as may be appropriate. Relief may include, but is 
not limited to:
    (i) Ordering the respondent to pay damages to the aggrieved person 
(including damages caused by humiliation and embarrassment).
    (ii) Ordering injunctive or such other equitable relief as may be 
appropriate. No such order may affect any contract, sale, encumbrance or 
lease consummated before the issuance of the

[[Page 776]]

initial decision that involved a bona fide purchaser, encumbrancer or 
tenant without actual knowledge of the charge.
    (iii) Assessing a civil penalty against any respondent to vindicate 
the public interest in accordance with Sec.  180.671.
    (4) Findings in favor of respondents. If the ALJ finds that the 
charging party has not established that a respondent has engaged in a 
discriminatory housing practice, the ALJ shall make an initial decision 
dismissing the charge as against that respondent.
    (c) Initial Decision in Non-Fair Housing Act matters. The ALJ shall 
issue the initial decision as soon as possible after the end of the 
hearing.
    (1) Findings against Respondents. If the ALJ finds that a respondent 
has failed to comply substantially with the statutory and regulatory 
requirements that gave rise to the notice of proposed adverse action, 
the ALJ shall issue an initial decision against the respondent.
    (i) The initial decision shall provide for suspension or termination 
of, or refusal to grant or continue, Federal financial assistance, in 
whole or in part, to the involved program or activity.
    (ii) The initial decision may contain such terms, conditions, and 
other provisions as are consistent with and will effectuate the purposes 
of the applicable statute and regulations, including provisions designed 
to assure that no Federal financial assistance will be extended for the 
program or activity unless and until the respondent corrects its 
noncompliance and satisfies the Secretary that it will fully comply with 
the relevant statute and regulations.
    (iii) The initial decision shall state that it will become final 
only upon the Secretary's approval.
    (2) Findings in favor of respondents. If the ALJ finds that a 
respondent has not failed to comply substantially with the statutory and 
regulatory requirements that gave rise to the notice of proposed adverse 
action, the ALJ shall make an initial decision dismissing the notice of 
proposed adverse action. The initial decision shall state that it will 
become the final agency decision 30 days after the date of issuance.

[61 FR 52218, Oct. 4, 1996, as amended at 64 FR 6754, Feb. 10, 1999; 68 
FR 12788, Mar. 17, 2003; 72 FR 5588, Feb. 6, 2007]



Sec.  180.671  Assessing civil penalties for Fair Housing Act cases.

    (a) Amounts. The ALJ may assess a civil penalty against any 
respondent under Sec.  180.670(b)(3) for each separate and distinct 
discriminatory housing practice (as defined in paragraph (b) of this 
section) that the respondent committed, each civil penalty in an amount 
not to exceed:
    (1) $19,787, if the respondent has not been adjudged in any 
administrative hearing or civil action permitted under the Fair Housing 
Act or any state or local fair housing law, or in any licensing or 
regulatory proceeding conducted by a federal, state, or local 
governmental agency, to have committed any prior discriminatory housing 
practice.
    (2) $49,467, if the respondent has been adjudged in any 
administrative hearing or civil action permitted under the Fair Housing 
Act, or under any state or local fair housing law, or in any licensing 
or regulatory proceeding conducted by a federal, state, or local 
government agency, to have committed one other discriminatory housing 
practice and the adjudication was made during the 5-year period 
preceding the date of filing of the charge.
    (3) $98,935, if the respondent has been adjudged in any 
administrative hearings or civil actions permitted under the Fair 
Housing Act, or under any state or local fair housing law, or in any 
licensing or regulatory proceeding conducted by a federal, state, or 
local government agency, to have committed two or more discriminatory 
housing practices and the adjudications were made during the 7-year 
period preceding the date of filing of the charge.
    (b) Definition of separate and distinct discriminatory housing 
practice. A separate and distinct discriminatory housing practice is a 
single, continuous uninterrupted transaction or occurrence that violates 
section 804, 805, 806 or 818 of the Fair Housing Act. Even if such a 
transaction or occurrence violates more than one provision of the Fair

[[Page 777]]

Housing Act, violates a provision more than once, or violates the fair 
housing rights of more than one person, it constitutes only one separate 
and distinct discriminatory housing practice.
    (c) Factors for consideration by ALJ. (1) In determining the amount 
of the civil penalty to be assessed against any respondent for each 
separate and distinct discriminatory housing practice the respondent 
committed, the ALJ shall consider the following six (6) factors:
    (i) Whether that respondent has previously been adjudged to have 
committed unlawful housing discrimination;
    (ii) That respondent's financial resources;
    (iii) The nature and circumstances of the violation;
    (iv) The degree of that respondent's culpability;
    (v) The goal of deterrence; and
    (vi) Other matters as justice may require.
    (2)(i) Where the ALJ finds any respondent to have committed a 
housing-related hate act, the ALJ shall take this fact into account in 
favor of imposing a maximum civil penalty under the factors listed in 
paragraphs (c)(1)(iii), (iv), (v), and (vi) of this section.
    (ii) For purposes of this section, the term housing-related hate act 
means any act that constitutes a discriminatory housing practice under 
section 818 of the Fair Housing Act and which constitutes or is 
accompanied or characterized by actual violence, assault, bodily harm, 
and/or harm to property; intimidation or coercion that has such 
elements; or the threat or commission of any action intended to assist 
or be a part of any such act.
    (iii) Nothing in this paragraph shall be construed to require an ALJ 
to assess any amount less than a maximum civil penalty in a non-hate act 
case, where the ALJ finds that the factors listed in paragraphs 
(c)(1)(i) through (vi) of this section warrant the assessment of a 
maximum civil penalty.
    (d) Persons previously adjudged to have committed a discriminatory 
housing practice. If the acts constituting the discriminatory housing 
practice that is the subject of the charge were committed by the same 
natural person who has previously been adjudged, in any administrative 
proceeding or civil action, to have committed acts constituting a 
discriminatory housing practice, the time periods in paragraphs (a) (2) 
and (3) of this section do not apply.
    (e) Multiple discriminatory housing practices committed by the same 
respondent; multiple respondents. (1) In a proceeding where a respondent 
has been determined to have engaged in, or is about to engage in, more 
than one separate and distinct discriminatory housing practice, a 
separate civil penalty may be assessed against the respondent for each 
separate and distinct discriminatory housing practice.
    (2) In a proceeding involving two or more respondents who have been 
determined to have engaged in, or are about to engage in, one or more 
discriminatory housing practices, one or more civil penalties, as 
provided under this section, may be assessed against each respondent.

[64 FR 6754, Feb. 10, 1999, as amended at 68 FR 12788, Mar. 17, 2003; 72 
FR 5588, Feb. 6, 2007; 78 FR 4060, Jan. 18, 2013]



Sec.  180.675  Petitions for review.

    (a) The Secretary may affirm, modify or set aside, in whole or in 
part, the initial decision, or remand the initial decision for further 
proceedings.
    (b) Any party adversely affected by the ALJ's initial decision may 
file a motion with the Secretary explaining how and why the initial 
decision should be modified, set aside, in whole or in part, or remanded 
for further proceedings. Such petition shall be based only on the 
following grounds:
    (1) A finding of material fact is not supported by substantial 
evidence;
    (2) A necessary legal conclusion is erroneous;
    (3) The decision is contrary to law, duly promulgated rules of HUD, 
or legal precedent; or
    (4) A prejudicial error of procedure was committed.
    (c) Each issue shall be plainly and concisely stated and shall be 
supported by citations to the record when assignments of error are based 
on the record, statutes, regulations, cases, or other authorities relied 
upon. Except for good cause shown, no assignment of error by any party 
shall rely on any

[[Page 778]]

question of fact or law not presented to the ALJ.
    (d) Such petitions must be received by the Secretary within 15 days 
after issuance of the initial decision.
    (e) A statement in opposition to the petition for review may be 
filed. Such opposition must be received by the Secretary within 22 days 
after issuance of the initial decision.
    (f) A petition not granted within 30 days after the issuance of the 
initial decision is deemed denied.
    (g) If the Secretary remands the decision for further proceedings, 
the ALJ shall issue an initial decision on remand within 60 days after 
the date of issuance of the Secretary's decision, unless it is 
impracticable to do so. If the ALJ is unable to issue the initial 
decision within this time period (or within any succeeding 60-day period 
following the initial 60-day period), the ALJ shall notify in writing 
the parties, the aggrieved person on whose behalf the charge was filed, 
any amicus curiae and the Assistant Secretary, of the reasons for the 
delay.



Sec.  180.680  Final decisions.

    (a) Public disclosure. HUD shall make public disclosure of each 
final decision.
    (b) Where initial decision does not provide for suspension or 
termination of, or refusal to grant or continue, Federal financial 
assistance--(1) Issuance of final decision by Secretary. The Secretary 
may review any finding of fact, conclusion of law, or order contained in 
the initial decision of the ALJ and issue a final decision in the 
proceeding. The Secretary shall serve the final decision on all parties 
no later than 30 days after the date of issuance of the initial 
decision.
    (2) No final decision by Secretary. If the Secretary does not serve 
a final decision within the time period described in paragraph (b)(1) of 
this section, the initial decision of the ALJ will become the final 
agency decision. For the purposes of this part, such a final decision 
will be considered to have been issued 30 days after the date of 
issuance of the initial decision.
    (c) Where initial decision provides for suspension or termination 
of, or refusal to grant or continue, Federal financial assistance. When 
the initial decision provides for the suspension or termination of, or 
the refusal to grant or continue, Federal financial assistance, or the 
imposition of any other sanction, such decision shall not constitute an 
order or final agency action until approved by the Secretary. Further, 
in the case of proceedings under title VI of the Civil Rights Act of 
1964, no order suspending, terminating, or refusing to grant or continue 
Federal financial assistance shall become effective until the 
requirements of 24 CFR 1.8(c) have been met.



           Subpart G_Post-Final Decision in Fair Housing Cases



Sec.  180.700  Action upon issuance of a final decision in Fair
Housing Act cases.

    (a) Licensed or regulated businesses. (1) If a final decision 
includes a finding that a respondent has engaged or is about to engage 
in a discriminatory housing practice in the course of a business that is 
subject to licensing or regulation by a Federal, State or local 
governmental agency, the Assistant Secretary will notify the 
governmental agency of the decision by:
    (i) Sending copies of the findings of fact, conclusions of law and 
final decision to the governmental agency by certified mail; and
    (ii) Recommending appropriate disciplinary action to the 
governmental agency, including, where appropriate, the suspension or 
revocation of the respondent's license.
    (2) The Assistant Secretary will notify the appropriate governmental 
agencies within 30 days after the date of issuance of the final 
decision, unless a petition for judicial review of the final decision as 
described in Sec.  180.710 of this part has been filed before the 
issuance of the notification of the agency. If such a petition has been 
filed, the Assistant Secretary will provide the notification to the 
governmental agency within 30 days after the date that the final 
decision is affirmed upon review. If a petition for judicial review is 
timely filed following the notification of the governmental agency, the 
Assistant Secretary will promptly notify the governmental agency of the

[[Page 779]]

petition and withdraw his or her recommendation.
    (b) Notification to the Attorney General. If a final decision 
includes a finding that a respondent has engaged or is about to engage 
in a discriminatory housing practice and another final decision 
including such a finding was issued under this part within the five 
years preceding the date of issuance of the final decision, the General 
Counsel will notify the Attorney General of the decisions by sending a 
copy of each final decision.



Sec.  180.705  Attorney's fees and costs.

    Following the issuance of the final decision, any prevailing party, 
except HUD, may apply for attorney's fees and costs. The ALJ will issue 
an initial decision awarding or denying such fees and costs. The initial 
decision will become HUD's final decision unless the Secretary reviews 
the initial decision and issues a final decision on fees and costs 
within 30 days. The recovery of reasonable attorney's fees and costs 
will be permitted as follows:
    (a) If the respondent is the prevailing party, HUD will be liable 
for reasonable attorney's fees and costs to the extent provided under 
the Equal Access to Justice Act (5 U.S.C. 504) and HUD's regulations at 
24 CFR part 14, and an intervenor will be liable for reasonable 
attorney's fees and costs only to the extent that the intervenor's 
participation in the administrative proceeding was frivolous or 
vexatious, or was for the purpose of harassment.
    (b) To the extent that an intervenor is a prevailing party, the 
respondent will be liable for reasonable attorney's fees unless special 
circumstances make the recovery of such fees and costs unjust.



Sec.  180.710  Judicial review of final decision.

    (a) Any party adversely affected by a final decision may file a 
petition in the appropriate United States Court of Appeals for review of 
the decision under 42 U.S.C. 3612(i). The petition must be filed within 
30 days after the date of issuance of the final decision.
    (b) If no petition for review is filed under paragraph (a) of this 
section within 45 days after the date of issuance of the final decision, 
the findings of facts and final decision shall be conclusive in 
connection with any petition for enforcement.



Sec.  180.715  Enforcement of final decision.

    (a) Enforcement by HUD. Following the issuance of a final decision, 
the General Counsel may petition the appropriate United States Court of 
Appeals for the enforcement of the final decision and for appropriate 
temporary relief or restraining order in accordance with 42 U.S.C. 
3612(j).
    (b) Enforcement by others. If no petition for review has been filed 
within 60 days after the date of issuance, and the General Counsel has 
not sought enforcement of the final decision as described in paragraph 
(a) of this section, any person entitled to relief under the final 
decision may petition the appropriate United States Court of Appeals for 
the enforcement of the final decision in accordance with 42 U.S.C. 
3612(m).



      Subpart H_Post-Final Decision in Non-Fair Housing Act Matters



Sec.  180.800  Post-termination proceedings.

    (a) A respondent adversely affected by the order terminating, 
discontinuing, or refusing Federal financial assistance in consequence 
of proceedings pursuant to this title may request the Secretary for an 
order authorizing payment, or permitting resumption, of Federal 
financial assistance. Such request shall:
    (1) Be in writing;
    (2) Affirmatively show that, since entry of the order, the 
respondent has brought its program or activity into compliance with 
statutory and regulatory requirements; and
    (3) Set forth specifically, and in detail, the steps taken to 
achieve such compliance.
    (b) If the Secretary denies such request, the respondent may request 
an expeditious hearing. The request for such a hearing shall be 
addressed to the Secretary within 30 days after the respondent is 
informed that the Secretary has refused to authorize payment or permit 
resumption of Federal

[[Page 780]]

financial assistance and shall specify why the Secretary erred in 
denying the request.
    (c) The procedures established by this part shall be applicable to 
any hearing.



Sec.  180.805  Judicial review of final decision.

    A termination of or refusal to grant or to continue Federal 
financial assistance is subject to judicial review as provided in the 
applicable statute.

                        PARTS 181	199 [Reserved]

[[Page 781]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 783]]



                    Table of CFR Titles and Chapters




                      (Revised as of April 1, 2017)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
       III  Administrative Conference of the United States (Parts 
                300--399)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 2--199)
        II  Office of Management and Budget Guidance (Parts 200--
                299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300--
                399)
        IV  Department of Agriculture (Parts 400--499)
        VI  Department of State (Parts 600--699)
       VII  Agency for International Development (Parts 700--799)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
         X  Department of the Treasury (Parts 1000--1099)
        XI  Department of Defense (Parts 1100--1199)
       XII  Department of Transportation (Parts 1200--1299)
      XIII  Department of Commerce (Parts 1300--1399)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1800--1899)
        XX  United States Nuclear Regulatory Commission (Parts 
                2000--2099)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Housing and Urban Development (Parts 2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)
     XXVII  Small Business Administration (Parts 2700--2799)

[[Page 784]]

    XXVIII  Department of Justice (Parts 2800--2899)
      XXIX  Department of Labor (Parts 2900--2999)
       XXX  Department of Homeland Security (Parts 3000--3099)
      XXXI  Institute of Museum and Library Services (Parts 3100--
                3199)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
     XXXIV  Department of Education (Parts 3400--3499)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
     XXXVI  Office of National Drug Control Policy, Executive 
                Office of the President (Parts 3600--3699)
    XXXVII  Peace Corps (Parts 3700--3799)
     LVIII  Election Assistance Commission (Parts 5800--5899)
       LIX  Gulf Coast Ecosystem Restoration Council (Parts 5900--
                5999)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--199)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
        IV  Office of Personnel Management and Office of the 
                Director of National Intelligence (Parts 1400--
                1499)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600--3699)
    XXVIII  Department of Justice (Parts 3800--3899)

[[Page 785]]

      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Parts 4300--
                4399)
     XXXIV  Securities and Exchange Commission (Parts 4400--4499)
      XXXV  Office of Personnel Management (Parts 4500--4599)
     XXXVI  Department of Homeland Security (Parts 4600--4699)
    XXXVII  Federal Election Commission (Parts 4700--4799)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
      XLIX  Federal Labor Relations Authority (Parts 5900--5999)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
    LXVIII  Commission on Civil Rights (Parts 7800--7899)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
       LXX  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 8000--8099)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)
     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)

[[Page 786]]

     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
      LXXX  Federal Housing Finance Agency (Parts 9000--9099)
   LXXXIII  Special Inspector General for Afghanistan 
                Reconstruction (Parts 9300--9399)
    LXXXIV  Bureau of Consumer Financial Protection (Parts 9400--
                9499)
    LXXXVI  National Credit Union Administration (Parts 9600--
                9699)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)
    XCVIII  Council of the Inspectors General on Integrity and 
                Efficiency (Parts 9800--9899)
      XCIX  Military Compensation and Retirement Modernization 
                Commission (Parts 9900--9999)
         C  National Council on Disability (Partys 10000--10049)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 1--199)
         X  Privacy and Civil Liberties Oversight Board (Parts 
                1000--1099)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)

[[Page 787]]

        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)
       XXV  Office of Advocacy and Outreach, Department of 
                Agriculture (Parts 2500--2599)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  National Institute of Food and Agriculture (Parts 
                3400--3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)

[[Page 788]]

         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1300--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)
        II  Election Assistance Commission (Parts 9400--9499)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
         X  Bureau of Consumer Financial Protection (Parts 1000--
                1099)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XII  Federal Housing Finance Agency (Parts 1200--1299)
      XIII  Financial Stability Oversight Council (Parts 1300--
                1399)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)

[[Page 789]]

        XV  Department of the Treasury (Parts 1500--1599)
       XVI  Office of Financial Research (Parts 1600--1699)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--1199)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)

[[Page 790]]

       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  U.S. Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  U.S. Immigration and Customs Enforcement, Department 
                of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)

[[Page 791]]

         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Millennium Challenge Corporation (Parts 1300--1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)

[[Page 792]]

       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XV  Emergency Mortgage Insurance and Loan Programs, 
                Department of Housing and Urban Development (Parts 
                2700--2799) [Reserved]
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
      XXIV  Board of Directors of the HOPE for Homeowners Program 
                (Parts 4000--4099) [Reserved]
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

[[Page 793]]

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Parts 1200--1299)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--End)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)

[[Page 794]]

        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Bureau of Safety and Environmental Enforcement, 
                Department of the Interior (Parts 200--299)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
         V  Bureau of Ocean Energy Management, Department of the 
                Interior (Parts 500--599)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)
       XII  Office of Natural Resources Revenue, Department of the 
                Interior (Parts 1200--1299)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)

[[Page 795]]

      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)
         X  Financial Crimes Enforcement Network, Department of 
                the Treasury (Parts 1000--1099)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)

[[Page 796]]

        IV  Office of Career, Technical and Adult Education, 
                Department of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--
                599)[Reserved]
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799)[Reserved]
            Subtitle C--Regulations Relating to Education
        XI  [Reserved]
       XII  National Council on Disability (Parts 1200--1299)

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
        VI  [Reserved]
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Parts 1500--
                1599)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  U.S. Copyright Office, Library of Congress (Parts 
                200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                300--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--199)
        II  Armed Forces Retirement Home (Parts 200--299)

[[Page 797]]

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)
      VIII  Gulf Coast Ecosystem Restoration Council (Parts 1800--
                1899)

          Title 41--Public Contracts and Property Management

            Subtitle A--Federal Procurement Regulations System 
                [Note]
            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
   62--100  [Reserved]
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
  103--104  [Reserved]
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
  129--200  [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)

[[Page 798]]

       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--599)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 400--999)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10099)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)

[[Page 799]]

        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
        IX  Denali Commission (Parts 900--999)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Administration for Children and Families, Department 
                of Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)
        IV  National Telecommunications and Information 
                Administration, Department of Commerce, and 
                National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 400--499)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)

[[Page 800]]

         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Health and Human Services (Parts 300--399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  Agency for International Development (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399) 
                [Reserved]
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  Civilian Board of Contract Appeals, General Services 
                Administration (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)

[[Page 801]]

        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation (Parts 1400--1499) 
                [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

[[Page 803]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of April 1, 2017)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Administrative Conference of the United States    1, III
Advisory Council on Historic Preservation         36, VIII
Advocacy and Outreach, Office of                  7, XXV
Afghanistan Reconstruction, Special Inspector     5, LXXXIII
     General for
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              2, VII; 22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            2, IV; 5, LXXIII
  Advocacy and Outreach, Office of                7, XXV
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Economic Research Service                       7, XXXVII
  Energy Policy and New Uses, Office of           2, IX; 7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  National Institute of Food and Agriculture      7, XXXIV
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII

[[Page 804]]

Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase from People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Career, Technical and Adult Education, Office of  34, IV
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chemical Safety and Hazardous Investigation       40, VI
     Board
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X, XIII
Civil Rights, Commission on                       5, LXVIII; 45, VII
Civil Rights, Office for                          34, I
Council of the Inspectors General on Integrity    5, XCVIII
     and Efficiency
Court Services and Offender Supervision Agency    5, LXX
     for the District of Columbia
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               2, XIII; 44, IV; 50, VI
  Census Bureau                                   15, I
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III, IV
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Financial Protection Bureau              5, LXXXIV; 12, X
Consumer Product Safety Commission                5, LXXI; 16, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    5, LXX; 28, VIII
     for the District of Columbia
Customs and Border Protection                     19, I
Defense Contract Audit Agency                     32, I

[[Page 805]]

Defense Department                                2, XI; 5, XXVI; 32, 
                                                  Subtitle A; 40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III; 
                                                  48, 51
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
Denali Commission                                 45, IX
District of Columbia, Court Services and          5, LXX; 28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          2, XXXIV; 5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Career, Technical and Adult Education, Office   34, IV
       of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Career, Technical, and Adult Education, Office  34, IV
       of
Educational Research and Improvement, Office of   34, VII
Election Assistance Commission                    2, LVIII; 11, II
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             2, IX; 5, XXIII; 10, II, 
                                                  III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   2, XV; 5, LIV; 40, I, IV, 
                                                  VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                2, Subtitle A; 5, III, 
                                                  LXXVII; 14, VI; 48, 99

[[Page 806]]

  National Drug Control Policy, Office of         2, XXXVI; 21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       5, XXXVII; 11, I
Federal Emergency Management Agency               44, I
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Agency                    5, LXXX; 12, XII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority                 5, XIV, XLIX; 22, XIV
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Financial Crimes Enforcement Network              31, X
Financial Research Office                         12, XVI
Financial Stability Oversight Council             12, XIII
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV

[[Page 807]]

Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Gulf Coast Ecosystem Restoration Council          2, LIX; 40, VIII
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          2, III; 5, XLV; 45, 
                                                  Subtitle A
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X, XIII
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  2, XXX; 5, XXXVI; 6, I; 8, 
                                                  I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection                   19, I
  Federal Emergency Management Agency             44, I
  Human Resources Management and Labor Relations  5, XCVII
       Systems
  Immigration and Customs Enforcement Bureau      19, IV
  Transportation Security Administration          49, XII
HOPE for Homeowners Program, Board of Directors   24, XXIV
     of
Housing and Urban Development, Department of      2, XXIV; 5, LXV; 24, 
                                                  Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Immigration and Customs Enforcement Bureau        19, IV
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Independent Counsel, Offices of                   28, VI

[[Page 808]]

Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII, XV
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department                               2, XIV
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Natural Resource Revenue, Office of             30, XII
  Ocean Energy Management, Bureau of              30, V
  Reclamation, Bureau of                          43, I
  Safety and Enforcement Bureau, Bureau of        30, II
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
Investment Security, Office of                    31, VIII
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                2, XXVIII; 5, XXVIII; 28, 
                                                  I, XI; 40, IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Independent Counsel, Offices of                 28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  2, XXIX; 5, XLII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI

[[Page 809]]

  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I, VII
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Royalty Board                         37, III
  U.S. Copyright Office                           37, II
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Military Compensation and Retirement              5, XCIX
     Modernization Commission
Millennium Challenge Corporation                  22, XIII
Mine Safety and Health Administration             30, I
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
Museum and Library Services, Institute of         2, XXXI
National Aeronautics and Space Administration     2, XVIII; 5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   2, XXII; 45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    5, C; 34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              5, LXXXVI; 12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           2, XXXVI; 21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Geospatial-Intelligence Agency           32, I
National Highway Traffic Safety Administration    23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute of Food and Agriculture        7, XXXIV
National Institute of Standards and Technology    15, II
National Intelligence, Office of Director of      5, IV; 32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III

[[Page 810]]

National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       2, XXV; 5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III, IV
     Administration
National Transportation Safety Board              49, VIII
Natural Resources Conservation Service            7, VI
Natural Resource Revenue, Office of               30, XII
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     2, XX; 5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Ocean Energy Management, Bureau of                30, V
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       2, XXXVII; 22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 5, IV; 45, 
                                                  VIII
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Regulatory Commission                      5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Privacy and Civil Liberties Oversight Board       6, X
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Safety and Environmental Enforcement, Bureau of   30, II
Saint Lawrence Seaway Development Corporation     33, IV

[[Page 811]]

Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                5, XXXIV; 17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     2, XII; 5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 47, IV; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               2, X;5, XXI; 12, XV; 17, 
                                                  IV; 31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection                   19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Financial Crimes Enforcement Network            31, X
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  Investment Security, Office of                  31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
U.S. Copyright Office                             37, II
Utah Reclamation Mitigation and Conservation      43, III
   Commission
[[Page 812]]

Veterans Affairs Department                       2, VIII; 38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I, VII
World Agricultural Outlook Board                  7, XXXVIII

[[Page 813]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations (CFR) that 
were made by documents published in the Federal Register since January 
1, 2012 are enumerated in the following list. Entries indicate the 
nature of the changes effected. Page numbers refer to Federal Register 
pages. The user should consult the entries for chapters, parts and 
subparts as well as sections for revisions.
For changes to this volume of the CFR prior to this listing, consult the 
annual edition of the monthly List of CFR Sections Affected (LSA). The 
LSA is available at www.fdsys.gov. For changes to this volume of the CFR 
prior to 2001, see the ``List of CFR Sections Affected, 1949-1963, 1964-
1972, 1973-1985, and 1986-2000'' published in 11 separate volumes. The 
``List of CFR Sections Affected 1986-2000'' is available at 
www.fdsys.gov.

                                  2012

24 CFR
                                                                   77 FR
                                                                    Page
Subtitle A
5.100--5.110 (Subpart A) Heading revised............................5674
5.100 Amended.......................................................5674
5.105 Introductory text revised; (a) redesignated as (a)(1); 
        (a)(2) added................................................5674
5.403 Amended.......................................................5674
5.801 (a)(6) and (c) heading revised; (b) introductory text 
        amended; (b)(4), (c)(4) and (d)(4) added...................55134
25.3 Correctly amended.............................................51467
25.5 (d)(1)(ii) and (e)(1)(ii) correctly revised...................51467
25.6 (cc) correctly revised........................................51467
30.10 Correctly amended............................................51468
30.36 (a)(8) correctly revised.....................................51468
30.60 Heading, (a) introductory text and (3) correctly revised.....51468
91 Technical correction............................................28765

                                  2013

24 CFR
                                                                   78 FR
                                                                    Page
Subtitle A
Policy statement....................................................9815
5.801 (a)(5) revised...............................................57060
28 Authority citation revised.......................................4059
28.10 (a)(1) introductory text and (b)(1) introductory text 
        revised.....................................................4059
30.35 (c)(1) revised................................................4059
30.36 (c) revised...................................................4059
30.40 (c) revised...................................................4059
30.45 (g) revised...................................................4059
30.50 (c) revised...................................................4059
30.60 (c) revised...................................................4059
30.68 (c) revised...................................................4059
30.90 (c) revised...................................................4060
50 Authority citation revised......................................68728
50.4 (b)(2) and (3) revised........................................68728
55 Authority citation and heading revised..........................68728
55.1 (a), (c)(1), (3) introductory text and (i) revised; (b) 
        redesignated as (b)(1); (b)(2) added.......................68728
55.2 (b)(2) through (6), (7) and (8) redesignated as (b)(3) 
        through (7), (9) and (10); new (b)(2), new (8) and (11) 
        added; (a), (b) introductory text, (1) and new (9) revised
                                                                   68729
55.3 (a)(1), (b)(1), (2) and (c) revised; (d) added................68730
55.10--55.12 (Subpart B) Heading revised...........................68730
55.10 Revised......................................................68730
55.11 Revised......................................................68730
55.12 Revised......................................................68731
    (c)(12) correctly removed......................................74009

[[Page 814]]

55.20--55.27 (Subpart C) Heading revised...........................68730
55.20 Introductory text, (a), (b) introductory text, (3), (c), 
        (d), (e), (f), (g)(1) and (h) revised......................68730
55.21 Amended......................................................68734
55.24 Revised......................................................68734
55.25 (c) and (d)(2) amended.......................................68734
55.26 Introductory text and (a) revised............................68734
55.27 (a) revised; (b) and (c) amended.............................68734
55.28 Added........................................................68734
58.5 (b)(2) revised................................................68734
58.6 (a)(4) added..................................................68734
58.35 (a)(3)(i) revised............................................68734
91.220 (l)(2)(i) and (ii) revised; (l)(2)(iv) redesignated as 
        (l)(2)(vii); new (l)(2)(iv), (v) and (vi) added............44663
91.320 (k)(2)(i) and (ii) revised; (k)(2)(iv) redesignated as 
        (k)(2)(vii); new (k)(2)(iv), (v) and (vi) added............44664
92.2 Introductory text revised; amended............................44664
92.3 Added.........................................................44666
92.201 (a)(2) revised..............................................44666
92.202 (b) revised.................................................44666
92.203 (a)(1)(i), (2), (b), (c) and (d)(1) revised.................44666
92.205 (a)(1), (2), (b)(1), (d) and (e) revised....................44667
92.206 (a)(1), (2), (3) introductory text, (4), (b) introductory 
        text, (1), (2) introductory text, (vi), (d)(1), (3) and 
        (6) revised................................................44667
92.207 (b) revised.................................................44668
92.208 (a) revised.................................................44668
92.209 (a), (c) introductory text, (2), (g), (h)(3)(ii) and (l) 
        revised....................................................44668
92.210 Added.......................................................44669
92.213 Added.......................................................44669
92.214 Heading, (a)(4) and (b) revised.............................44669
92.221 (d) added...................................................44670
92.222 (b) revised.................................................44670
92.250 Revised.....................................................44670
92.251 Revised.....................................................44670
92.252 Introductory text, (a) introductory text, (b) introductory 
        text, (c), (d), (e), (f)(2), (g) heading and (j) revised; 
        (k) and (l) added..........................................44672
92.253 Heading, (a), (c) and (d) revised; (b)(7) and (8) amended; 
        (b)(9) added...............................................44674
92.254 (a)(2)(iii), (3), (5) introductory text, (i) introductory 
        text, (ii) introductory text, (b)(2) and (c) revised; (e) 
        and (f) added..............................................44674
92.255 Revised.....................................................44676
92.257 Revised.....................................................44676
92.300 (a), (e) and (f) revised....................................44677
92.351 (a)(1), (2)(ii), (iii) and (iv) revised.....................44678
92.352 (a) revised.................................................44678
92.353 (c)(2)(i)(C)(1)(ii) revised.................................44678
92.354 (a)(1) and (3) revised......................................44678
92.356 (b) and (f)(1) revised......................................44679
92.500 (c)(1), (d)(1)(A), (C) and (d)(2) revised...................44679
92.502 (a), (b)(2) and (e) revised.................................44679
92.503 (b)(3) revised..............................................44680
92.504 (a), (c)(1) introductory text, (i), (ii), (vii), (x), (2) 
        introductory text, (i), (iv), (v), (x), (3)(i) through 
        (iv), (v)(A), (vi), (vii), (x), (4) introductory text and 
        (d) revised; (c)(1)(xiii), (2)(xi), (3) introductory text, 
        (xi) and (6) added.........................................44680
92.505 Revised.....................................................44682
92.508 (a)(6)(i), (ii) and (iii) redesignated as (a)(6)(ii), (iii) 
        and (iv); (a)(2)(ii), (iii), (viii), (3)(i) through (iv), 
        (vi), (viii), (4)(i) and (iii) revised; (a)(2)(xiii), 
        (3)(xiv) and new (6)(i) added..............................44682
92.551 (c)(1)(vii) redesignated as (c)(1)(viii); new (c)(1)(vii) 
        and (ix) added; new (c)(1)(viii) and (2) revised...........44683
92.552 (b) revised.................................................44683
92.614 (b)(1) removed; (a)(3) through (6), (b)(2) and (3) 
        redesignated as (a)(4) through (7), new (b)(1) and (2); 
        new (a)(3) added...........................................44683
Chapter I
100.5 (b) amended..................................................11481
100.70 (d)(5) added................................................11481
100.120 (b) revised................................................11481
100.130 (b)(2) revised; (b)(3) added...............................11481
100.500 (Subpart G) added..........................................11482
180.671 (a)(2) and (3) revised......................................4060

[[Page 815]]

                                  2014

24 CFR
                                                                   79 FR
                                                                    Page
Subtitle A
5 Policy statement...................................35940, 54186, 59646
5.609 (c)(14) revised..............................................36164
5.801 (c)(4) introductory text revised; interim....................55362
    Regulation at 79 FR 55362 confirmed............................74613
8 Policy statement.................................................29671
30.65 (a) revised..................................................35042
35.1330 (a)(4)(iii) revised........................................35043
50 Authority citation revised......................................49228
50.18 Existing text designated as (b); (a) added...................49228
50.20 (a) introductory text revised................................49229
50.31 (a) revised..................................................49229
58 Authority citation revised......................................49229
58.38 Introductory text revised....................................49229
58.40 Introductory text and (e) revised............................49229
84.1--84.5 (Subpart A) Heading removed; interim....................76078
84.1 Revised; interim..............................................76078
84.2 Removed; interim..............................................76078
84.3 Removed; interim..............................................76078
84.4 Removed; interim..............................................76078
84.5 Removed; interim..............................................76078
84.10--84.17 (Subpart B) Removed; interim..........................76079
84.20--84.62 (Subpart C) Removed; interim..........................76079
84.70--84.73 (Subpart D) Removed; interim..........................76079
84.80--84.87 (Subpart E) Removed; interim..........................76079
84 Appendix A removed; interim.....................................76079
85.1--85.6 (Subpart A) Heading removed; interim....................76079
85.1 Revised; interim..............................................76079
85.2 Removed; interim..............................................76079
85.3 Removed; interim..............................................76079
85.4 Removed; interim..............................................76079
85.5 Removed; interim..............................................76079
85.6 Removed; interim..............................................76079
85.10--85.12 (Subpart B) Removed; interim..........................76079
85.20--85.44 (Subpart C) Removed; interim..........................76079
85.50--85.52 (Subpart D) Removed; interim..........................76079
85 Subpart E removed; interim......................................76079

                                  2015

24 CFR
                                                                   80 FR
                                                                    Page
Subtitle A
4.5 (a) revised....................................................75934
4.9 (a)(1)(iii) amended............................................75934
5.100--5.110 (Subpart A) Authority citation added..................42352
5.107 Amended......................................................75934
5.109 (g) amended..................................................75934
5.150 Undesignated center heading and section added................42352
5.151 Added........................................................42352
5.152 Added........................................................42352
5.154 Added........................................................42352
5.156 Added........................................................42352
5.158 Added........................................................42352
5.160 Added........................................................42352
    (a)(1)(i)(C) correctly revised.................................46487
5.162 Added........................................................42352
5.164 Added........................................................42352
5.166 Added........................................................42352
5.168 Added........................................................42352
5.801 (d)(1) amended...............................................75934
5.1003 Amended.....................................................75934
5.1004 Heading revised; amended....................................75934
15.1--15.2 (Subpart A) Revised.....................................49144
15.101--15.110 (Subpart B) Revised.................................49145
84 Technical correction............................................18519
85 Technical correction............................................18519
91 Policy statement................................................25901
91.2 (a)(3) and (4) amended; (a)(5) added; interim..................5219
91.5 Introductory text revised.....................................42360
91.10 (a) amended; interim..........................................5219
91.100 (a)(1), (5) and (c) revised; (e) added......................42360
91.105 (a)(1), (2)(i), (ii), (iii), (b), (c), (e)(1), (f) through 
        (j) and (l) revised; (a)(4) added..........................42360
91.110 (a) revised.................................................42362
91.115 (a)(1), (2), (b), (c), (f), (g) and (h) revised; (a)(4) 
        added......................................................42363
91.205 (b)(2) revised..............................................42364
91.215 (b)(2) revised; interim......................................5219
    (a)(5) added...................................................42364
91.220 (l)(5) added; interim........................................5219
    (k) revised....................................................42364
    (l)(1)(i) and (ii) revised; interim............................69869
91.225 (a)(1) revised..............................................42365
91.230 Revised.....................................................42365
91.235 (c)(1) and (4) revised......................................42365
91.305 (b)(2) revised..............................................42365
91.315 (b)(2) revised; interim......................................5220
91.315 (a)(5) added................................................42365

[[Page 816]]

91.320 (k)(5) revised; interim......................................5220
    (j) revised....................................................42365
    Amended; (k)(1) revised; interim...............................69869
91.325 (a)(1) revised..............................................42365
    (b)(4)(ii) revised; interim....................................69870
91.415 Revised.....................................................42365
91.420 (b) revised.................................................42366
91.425 (a)(1)(i) revised...........................................42366
91.505 (d) added...................................................42366
    (a)(2) amended; interim........................................69870
91.520 (h) and (i) redesignated as (i) and (j); new (h) added; 
        interim.....................................................5220
92.2 Amended.......................................................75934
92.64 (a)(2)(ii) amended...........................................75935
92.104 Revised.....................................................42366
92.204 (a)(2)(ii) amended..........................................75935
92.207 (e) amended.................................................75935
92.214 (b)(2) amended..............................................75935
92.220 (a)(1)(ii) amended..........................................75935
92.257 (e) amended.................................................75935
92.351 (b) amended.................................................75935
92.356 (a) amended.................................................75935
92.502 (c)(2) revised..............................................75935
92.504 (c)(1)(x) and (2)(ix) amended...............................75935
92.505 Revised.....................................................75935
92.506 Amended.....................................................75935
92.507 Revised.....................................................75935
92.508 (a)(7)(i)(C) revised........................................42366
    (a)(3)(ii), (5)(i) and (iv) amended............................75935
92.551 (c)(2) amended..............................................75935
93 Added; interim...................................................5220
    93 Policy statement............................................25901
Chapter I
115.308 (e) revised................................................75935
125.104 (g) amended................................................75935
135.11 (a), (1), (2) and (b) amended...............................75935
135.36 (c) amended.................................................75936
135 Appendix amended...............................................75936

                                  2016

24 CFR
                                                                   81 FR
                                                                    Page
Subtitle A
Subtitle A Policy statement........................................73030
5 Authority citation revised.........................19416, 80798, 90657
    Technical correction...........................................87812
5.100 Amended........................................64782, 90657, 92635
5.105 (a)(2)(i) heading and (ii) removed; (a)(2)(i) redesignated 
        as (a)(2)..................................................64782
    (a)(2) revised.................................................80993
5.106 Added........................................................64782
5.109 Heading, (a) through (d), (f), (g) and (h) revised; (e) 
        redesignated as (i); new (e), (j) and (k) added............19416
5.111 Added........................................................90657
5.216 Second paragraph of (g)(1)(ii) designated as (g)(1)(iii); 
        (h)(1) revised; (h)(2) amended; (h)(3) added; eff. 4-7-16 
                                                                   12369
5.520 (c)(1) introductory text, (2) introductory text and (d) 
        revised; (c)(1)(v), (2)(ii) introductory text and (iii) 
        amended; (e) added; eff. 4-7-16............................12370
5.603 (b) amended; eff. 4-7-16.....................................12370
5.609 (b)(9) amended; eff. 4-7-16..................................12370
5.617 (a) and (c) revised; (b) amended; eff. 4-7-16................12370
5.657 (d) added; eff. 4-7-16.......................................12371
5.2001--5.2011 (Subpart L) Revised.................................80798
7 Removed..........................................................31504
28 Authority citation revised......................................38935
28.10 (a)(1) introductory text and (b)(1) introductory text 
        revised; (c) amended; interim..............................38935
30 Authority citation revised......................................38935
30.20 (b) revised; interim.........................................38935
30.25 (b) revised; interim.........................................38935
30.30 Removed; interim.............................................38935
30.35 (c)(1) amended; interim......................................38935
30.36 (c) amended; interim.........................................38935
30.40 (c) amended; interim.........................................38935
30.45 (g) revised; interim.........................................38935
30.50 (c) amended; interim.........................................38935
30.55 Removed; interim.............................................38935
30.60 (c) revised; interim.........................................38935
30.65 (b) revised; interim.........................................38935
30.68 (c) revised; interim.........................................38935
30.69 Removed; interim.............................................38935
87 Authority citation revised......................................38935
87.400 (a), (b) and (e) revised; interim...........................38935
91 Technical correction............................................87812
91.100 (a)(1) amended..............................................91011
91.105 (a)(2)(ii) amended..........................................91011
91.110 (a) introductory text amended...............................91011
91.115 (a)(2)(ii) amended..........................................91011

[[Page 817]]

91.200 (b)(3)(iv) redesignated as (b)(3)(vi); new (b)(3)(iv) and 
        (v) added..................................................91011
91.210 (a) revised.................................................91012
91.220 (l)(2)(i) through (vii) redesignated as (l)(2)(ii) through 
        (viii); new (l)(2)(i) added; interim.......................86951
    Regulation at 81 FR 86951 eff. date corrected..................89381
91.300 (b)(3)(iii) amended; (b)(3)(iv) redesignated as (b)(3)(vi); 
        new (b)(3)(iv) and (v) added...............................91012
91.310 (a) revised.................................................91012
91.320 (k)(2)(i) through (vii) redesignated as (k)(2)(ii) through 
        (viii); new (k)(2)(i) added; interim.......................86951
    Regulation at 81 FR 86951 eff. date corrected..................89381
91.505 (a)(2) revised; interim.....................................86951
    Regulation at 81 FR 86951 eff. date corrected..................89381
91.520 (e) through (h) revised.....................................80803
92 Technical correction............................................87812
    Authority citation revised.....................................90657
92.2 Amended; interim..............................................86952
    Regulation at 81 FR 86952 eff. date corrected..................89381
    Amended........................................................90657
92.251 (a)(2) introductory text revised; (a)(2)(vi) and (b)(1)(x) 
        added......................................................92635
92.253 (a) revised; (d)(5) and (6) amended; (d)(7) added...........80803
92.257 Revised.....................................................19418
92.350 (a) amended.................................................90657
92.359 Added.......................................................80803
92.500 (d) revised; interim........................................86952
    Regulation at 81 FR 86951 eff. date corrected..................89381
92.502 (b)(2) removed; (b)(1) redesignated as (b); (c)(3) revised; 
        interim....................................................86952
    Regulation at 81 FR 86952 eff. date corrected..................89381
92.503 (b)(2) and (3) revised; (d) added; interim..................86952
    Regulation at 81 FR 86952 eff. date corrected..................89381
92.504 (c)(1)(vi), (2)(iv) and (4)(ii) amended; (c)(3)(v)(F) added
                                                                   80804
    (c)(7) and (8) added; interim..................................86953
    Regulation at 81 FR 86953 eff. date corrected..................89381
92.508 (a)(7)(x) added.............................................80805
93 Technical correction............................................87812
    Authority citation revised.....................................90657
93.2 Amended.......................................................90657
93.301 (a)(2) introductory text revised; (a)(2)(vi) and (b)(1)(x) 
        added......................................................92636
93.303 (a) revised; (d)(5) and (6) amended; (d)(7) added...........80805
93.350 (a) amended.................................................90657
93.356 Added.......................................................80805
93.404 (c)(1)(vi) and (2)(vi) revised..............................80805
93.407 (a)(5)(ix) added............................................80805
Chapter I
100 Policy statement...............................................88627
100.7 Added........................................................63074
100.60 (b)(6) and (7) added........................................63074
100.65 (b)(6) and (7) added........................................63074
100.80 (b)(6) added................................................63074
100.90 (b)(5) and (6) added........................................63074
100.120 (b)(3) and (4) added.......................................63074
100.130 (b)(4) and (5) added.......................................63074
100.135 (d) revised................................................63075
100.400 (c)(6) added...............................................63075
100.600 (Subpart H) Added..........................................63075
180 Authority citation revised.....................................38936
180.671 (a)(1), (2) and (3) revised; interim.......................38936

                                  2017

   (Regulations published from January 1, 2017, through April 1, 2017)

24 CFR
                                                                   82 FR
                                                                    Page
Subtitle A
15 Authority citation revised.......................................3622
15.101 (a) amended; (b)(7) and (8) added............................3622
15.103 (a) amended; (c) introductory text revised...................3622
15.104 (b) amended..................................................3622
15.105 (d)(2)(iv) redesignated as (d)(2)(vi); (d) introductory 
        text, new (2)(iv) and (v) added; (d)(1) amended.............3622
15.106 (d)(1) revised; (d)(5), (6) and (7) added....................3622
15.107 (b) removed; introductory text and (c) through (i) 
        redesignated as new (b) and (1) through (9); (a) and new 
        (b)(5) revised..............................................3623
30.35 (a)(8) and (10) revised; eff. 9-19-17.........................7117

[[Page 818]]

35.105 Removed......................................................4166
35.110 Amended......................................................4166
35.125 (c)(4)(iii) added............................................4167
35.155 (a) amended..................................................4167
35.165 (b)(4) amended...............................................4167
35.325 Revised......................................................4167
35.715 (d)(4) redesignated as (e); new (e) amended..................4167
35.720 (c) amended..................................................4167
35.730 Revised......................................................4167
35.830 Revised......................................................4168
35.1130 Revised.....................................................4169
35.1135 (d) amended.................................................4170
35.1215 (b) amended.................................................4170
35.1225 Revised.....................................................4171
35.1330 (a)(4)(iii) revised.........................................4172
60 Revised; eff. 1-19-18............................................7271


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